8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 9, 2004

Forest City Enterprises, Inc.

(Exact name of registrant as specified in its charter)

Ohio	1-4372	34-0863886
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Terminal Tower, 50 Public Square Suite 1100, Cleveland, Ohio	44113
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:	216-621-6060

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Exhibit 99.1 Supplemental Reporting Package for the Three and Nine Months Ended October 31, 2004

Item 2.02.      Results of Operations and Financial Condition

     On December 9, 2004 Forest City Enterprises, Inc. issued a supplemental package that provides certain supplemental operating and financial information for the three and nine months ended October 31, 2004. A copy of this supplemental information is attached hereto as Exhibit 99.1. The information in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FOREST CITY ENTERPRISES, INC.
	By:	/s/ THOMAS G. SMITH
	Name: Title:	Thomas G. Smith Executive Vice President, Chief Financial Officer and Secretary
Date: December 9, 2004

EXHIBIT INDEX

Exhibit
Number		Description
99.1	-	Supplemental Reporting Package for the Three and Nine Months Ended October 31, 2004

EX-99.1

EXHIBIT 99.1

Forest City Enterprises, Inc.

Supplemental Package

Three and Nine Months Ended October 31, 2004 and 2003

Forest City Enterprises, Inc. and Subsidiaries
Three and Nine Months Ended October 31, 2004 and 2003
Supplemental Package
 
NYSE: FCEA, FCEB

Index

Corporate Overview	3
Supplemental Operating Information
Occupancy Data	5
Comparable Net Operating Income (NOI)	6
Comparable NOI Detail	7-8
Reconciliation of NOI to Net Earnings	9-10
Lease Expirations Schedules	11-12
Schedules of Significant Tenants	13-14
Development Pipeline	15-17
Scheduled Maturities Table	18-19
Supplemental Financial Information
Consolidated Balance Sheet Information	20-21
Consolidated Earnings Information	22-25
Investment in and Advances to Real Estate Affiliates	26-27
Results of Operations Summary	28-29
Reconciliation of Net Earnings to EBDT	30-32
Summary of EBDT	33-46

This Supplemental Package, together with other statements and information publicly disseminated by the Company, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ from the results discussed in the forward-looking statements. Risk factors discussed on pages 5-12 of the Company’s Form 10-K for the year ended January 31, 2004 and other factors that might cause differences, some of which could be material, include, but are not limited to, real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, the effect of economic and market conditions on a nationwide basis as well as regionally in areas where the Company has a geographic concentration of properties, reliance on major tenants, the impact of terrorist acts, the Company’s substantial leverage and the ability to obtain and service debt, guarantees under the Company’s credit facility, the level and volatility of interest rates, continued availability of tax-exempt government financing, the sustainability of substantial operations at the subsidiary level, illiquidity of real estate investments, dependence on rental income from real property, conflicts of interest, financial stability of tenants within the retail industry, which may be impacted by competition and consumer spending, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation risks, the rate revenue increases versus the rate of expense increases, as well as other risks listed from time to time in the Company’s reports filed with the United States Securities and Exchange Commission. The Company has no obligation to revise or update any forward-looking statements, other than imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

2

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Corporate Overview

Corporate Description

Founded in 1920 and publicly traded since 1960, Forest City Enterprises, Inc. (“FCE” or the “Company”) is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate properties in 19 states and the District of Columbia. At October 31, 2004, we had approximately $7.2 billion in total assets. We have a portfolio of real estate assets diversified both geographically and among property types. We operate our business through four strategic business units as follows:

• Commercial Group, our largest business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office buildings, hotels and mixed-use projects;

• Residential Group owns, develops, acquires and operates residential rental properties, including upscale and middle-market apartments, adaptive re-use developments and supported-living facilities;

• Land Development Group acquires and sells both land and developed lots to residential, commercial and industrial customers. It also owns and develops land into master-planned communities and mixed-use projects; and

• A new segment, the Nets, is a franchise of the National Basketball Association in which the Company is an equity investor.

• The Company’s Lumber Group strategic business unit (formerly presented as Lumber Trading Group), which was sold on November 12 2004 to its employees, is no longer a reportable segment.

New Segment:

On August 16, 2004, the Company purchased a 21% ownership interest in the National Basketball Association (“NBA”) franchise known as the New Jersey Nets (the “Nets”) that will be reported on the equity method of accounting. The Company’s economic ownership can decrease based on the achievement of certain thresholds as provided in the arrangement with its partner. The purchase of the interest in the Nets is the first step in the Company’s efforts to pursue development projects, which include a new entertainment arena complex and adjacent developments combining housing, offices, shops and public open space. As the result of this investment, the Company had added a new reportable segment, the Nets. The Nets segment is primarily comprised of and will report on the sports operations of the basketball team.

In connection with the purchase of the franchise, the Company has provided an indemnity guarantee to the NBA for any losses arising from the purchase transaction, including the potential relocation of the team. The Company’s indemnity is limited to $100,000,000 and is effective as long as the Company owns an interest in the team. The indemnification provisions are standard provisions that are required by the NBA. The Company has purchased a $100,000,000 insurance policy in connection with such indemnity. The Company evaluated the indemnity guarantee in accordance with FIN No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, and determined that the fair value for the Company’s liability for its obligations under the guarantee was not material. The Nets report on a December 31 year end.

Supplemental Operating and Financial Information

Supplemental Financial Information

This supplemental package contains certain financial measures prepared in accordance with the generally accepted accounting principles (“GAAP”) under the full consolidation accounting method, and certain financial measures prepared in accordance with the pro-rata consolidation method, a non-GAAP financial measure. Along with net earnings, we use an additional measure, Earnings before Depreciation, Amortization and Deferred Taxes (“EBDT”), to report operating results. EBDT is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We believe the financial measures presented under the pro-rata consolidation method, comparable net operating income (“NOI”) and EBDT provide supplemental information about our operations. Although these financial measures are not presented in accordance with GAAP, we believe they are necessary to understand our business and operating results, along with net earnings and other GAAP financial measures. Our investors can use these non-GAAP financial measures as supplementary information to evaluate our business. Our non-GAAP financial measures are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP financial measures.

Pro-Rata Consolidation Method

We present certain financial amounts under the pro-rata consolidation method, because we believe this information is useful to investors as this method reflects the manner in which we operate our business. In line with industry practice, we have made a large number of investments in which our economic ownership is less than 100% and as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, we generally present our investments proportionate to our share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities as consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary for our investments in the variable interest entities (“VIE”), even if our ownership is not 100%. We provide reconciliations from the full consolidation method to the pro-rata consolidation method throughout our supplemental package.

Certain amounts in the Consolidated Balance Sheet Information and Consolidated Earnings Information are not comparable to the prior period due to the implementation of FIN No. 46 (R) at February 1, 2004, and the consolidation of four properties previously accounted under the equity method due to the acquisitions of our partners’ interest.

EBDT - We believe that EBDT, along with net earnings, provides additional information about our core operations. While property dispositions, acquisitions or other factors can affect net earnings in the short-term, we believe EBDT presents a more consistent view of the overall financial performance of our business from period-to-period. EBDT is used by the chief operating decision maker and management to assess performance and resource allocations by strategic business unit and on a consolidated basis. EBDT is similar to funds from operations (“FFO”), a measure of performance used by publicly traded Real Estate Investment Trusts (“REITS”), but may not be directly comparable to similarly titled measures reported by other companies. (See pages 28-32 for additional discussion of EBDT as well as a reconciliation of EBDT to net earnings.)

Supplemental Operating Information

The operating information contained in this document includes: occupancy data, comparable NOI, reconciliation of NOI to net earnings, retail and office lease expirations, significant retail and office tenant listings and our development pipeline. We believe this information will give interested parties a better understanding and more information about the operating performance of our Company. The term “comparable,” which is used throughout this document, is generally defined as including properties that were opened and operated in both three and nine month periods ended October 31, 2004 and 2003.

3

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

We believe occupancy rates, retail and office lease expirations base rent, and significant retail and office tenant listings represent meaningful operating statistics about our Company. This information will give interested parties a better understanding and more information about the operating performance of our Company.

Comparable NOI is useful because it measures the performance of the same properties on a period-to-period basis and, along with EBDT (as discussed beginning on page 28) is used to assess operating performance and resource allocation of our core business units. While property dispositions, acquisitions or other factors can impact net earnings in the short term, we believe comparable NOI gives a more consistent view of our overall performance from quarter-to-quarter and year-to-year. A reconciliation of net earnings, the most comparable financial measure calculated in accordance with GAAP, to NOI and reconciliation from NOI to comparable NOI is provided on pages 7-10 of this document. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-46.

Corporate Office

Forest City Enterprises, Inc.
Terminal Tower
50 Public Square, Suite 1100
Cleveland, Ohio 44113

SEC Form 10-K

A copy of the Annual Report on Form 10-K as filed with the Securities and Exchange Commission can be found on our website or may be obtained without charge upon written request to:

Thomas T. Kmiecik
Assistant Treasurer
tomkmiecik@forestcity.net

Website

www.forestcity.net
The information contained on this website is not incorporated herein by reference and does not constitute a part of this supplemental package.

Investor Relations

Thomas G. Smith
Executive Vice President,
Chief Financial Officer and Secretary

Transfer Agent and Registrar

National City Bank
Stock Transfer Department
P.O. Box 92301
Cleveland, OH 44193-0900
(800) 622-6757
www.shareholder.inquiries@nationalcity.com

Stock Exchange Listing

NYSE: FCEA and FCEB

Dividend Reinvestment and Stock Purchase Plan

The Company offers its stockholders the opportunity to purchase additional shares of common stock through the Forest City Enterprises, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”) at 97% of current market value. A copy of the Plan prospectus and an enrollment card may be obtained by contacting National City at (800) 622-6757.

4

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Occupancy Data
October 31, 2004 and 2003

We analyze our occupancy percentages by each of our major product lines as follows:

				Average						Average
	Occupancy			Occupancy			Occupancy			Occupancy
	As of			YTD			As of			YTD
	October 31, 2004			October 31, 2004			October 31, 2003			October 31, 2003
Retail
Comparable		92.3	%		92.1	%		90.5	%		90.2	%
Total		90.9	%		92.1	%		90.4	%		90.3	%
Office
Comparable		93.2	%		92.6	%		92.6	%		93.0	%
Total		92.5	%		92.6	%		92.7	%		89.1	%
Residential
Comparable		92.2	%		91.0	%		91.6	%		90.6	%
Total		92.2	%		90.0	%		91.1	%		90.3	%
Hotels
Comparable					75.8	%					73.0	%
ADR				$	160.87					$	145.78

Retail and office occupancy as of October 31, 2004 and 2003 is based on square feet leased as of October 31, 2004 and 2003, respectively. Average Occupancy YTD as of October 31, 2004 and 2003 for retail and office is calculated by dividing the sum of leased square feet at the beginning and end of the period, by two. Residential occupancy as of October 31, 2004 and 2003 represents total units occupied divided by total units available. Average residential occupancy for the nine months ended October 31, 2004 and 2003 is calculated by dividing gross potential rent less vacancy by gross potential rent. Average Daily Rate (“ADR”) is calculated by dividing revenue by the number of rooms sold for the nine months ended October 31, 2004 and 2003.

5

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

We use NOI, along with EBDT as discussed on page 3, to assess operating performance. Comparable NOI is defined as NOI from properties opened and operated in both three and nine months periods ended October 31, 2004 and 2003. The following schedules on pages 6 and 8 present comparable NOI for each of our major product lines, as well as each strategic business unit under which those product lines operate. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 9-10. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-46.

Comparable Net Operating Income (NOI) (% Change over same period, prior year)

	Three Months Ended October 31, 2004						Nine Months Ended October 31, 2004
	Full			Pro-Rata			Full			Pro-Rata
	Consolidation			Consolidation			Consolidation			Consolidation
Retail		(1.7	)%		(0.1	)%		1.4	%		1.7	%
Office		2.7	%		3.7	%		2.6	%		3.1	%
Hotel		62.6	%		56.0	%		48.3	%		50.2	%
Residential		(5.0	)%		(4.8	)%		(4.5	)%		(4.9	)%
Total		2.2	%		2.5	%		2.0	%		2.1	%

6

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

	Net Operating Income (in thousands)
	Three Months Ended October 31, 2004														Three Months Ended October 31, 2003														% Change
							Plus														Plus
				Less			Unconsolidated		Plus									Less			Unconsolidated			Plus
	Full			Minority			Investments at		Discontinued			Pro-Rata			Full			Minority			Investments at			Discontinued		Pro-Rata			Full			Pro-Rata
	Consolidation			Interest			Pro-Rata		Operations			Consolidation			Consolidation			Interest			Pro-Rata			Operations		Consolidation			Consolidation			Consolidation
Commercial Group
Retail
Comparable	$	27,514		$	4,353		$	4,835	$	—		$	27,996		$	27,985		$	4,735		$	4,776		$	—	$	28,026			(1.7	)%		(0.1	)%
Total		37,962			2,422			3,203		(13	)		38,730			31,465			5,573			6,216			581		32,689
Office Buildings Comparable		34,117			5,844			1,072		—			29,345			33,223			5,999			1,082			—		28,306			2.7	%		3.7	%
Total		42,928			7,147			1,072		380			37,233			42,794			8,632			1,082			811		36,055
Hotels
Comparable		6,679			973			970		—			6,676			4,107			458			630			—		4,279			62.6	%		56.0	%
Total		7,271			49			615		—			7,837			4,626			577			630			—		4,679
Other		1,358			(687	)		29		—			2,074			700			(1,310	)		908			—		2,918
Total Commercial Group
Comparable		68,310			11,170			6,877		—			64,017			65,315			11,192			6,488			—		60,611			4.6	%		5.6	%
Total		89,519			8,931			4,919		367			85,874			79,585			13,472			8,836			1,392		76,341
Residential Group
Comparable		20,938			1,068			4,712		—			24,582			22,040			469			4,249			—		25,820			(5.0	)%		(4.8	)%
Total		25,654			1,159			7,590		1,585			33,670			21,801			399			5,510			1,582		28,494
Total Real Estate Groups
Comparable		89,248			12,238			11,589		—			88,599			87,355			11,661			10,737			—		86,431			2.2	%		2.5	%
Total		115,173			10,090			12,509		1,952			119,544			101,386			13,871			14,346			2,974		104,835
Land Development Group		40,490			3,231			278		—			37,537			26,746			810			(16	)		—		25,920
The Nets		(1,630	)		—			156		—			(1,474	)		—			—			—			—		—
Corporate Activities		(9,553	)		—			—		—			(9,553	)		(6,816	)		—			—			—		(6,816	)
Grand Total	$	144,480		$	13,321		$	12,943	$	1,952		$	146,054		$	121,316		$	14,681		$	14,330		$	2,974	$	123,939

7

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

	Net Operating Income (in thousands)
	Nine Months Ended October 31, 2004													Nine Months Ended October 31, 2003													% Change
							Plus													Plus
				Less			Unconsolidated		Plus								Less			Unconsolidated		Plus
	Full			Minority			Investments at		Discontinued		Pro-Rata			Full			Minority			Investments at		Discontinued		Pro-Rata			Full			Pro-Rata
	Consolidation			Interest			Pro-Rata		Operations		Consolidation			Consolidation			Interest			Pro-Rata		Operations		Consolidation			Consolidation			Consolidation
Commercial Group
Retail
Comparable	$	84,531		$	13,837		$	14,178	$	—	$	84,872		$	83,339		$	14,288		$	14,365	$	—	$	83,416			1.4	%		1.7	%
Total		116,439			11,808			9,409		1,263		115,303			96,044			17,242			16,888		1,761		97,451
Office Buildings
Comparable		102,878			17,607			3,212		—		88,483			100,224			17,652			3,264		—		85,836			2.6	%		3.1	%
Total		142,195			27,012			3,212		2,227		120,622			118,719			23,548			3,264		2,914		101,349
Hotels
Comparable		13,319			1,916			3,617		—		15,020			8,981			886			1,905		—		10,000			48.3	%		50.2	%
Total		19,056			2,758			1,861		—		18,159			17,327			4,610			1,905		—		14,622
Other		865			(1,042	)		932		—		2,839			4,647			(2,742	)		3,011		—		10,400
Total Commercial Group
Comparable		200,728			33,360			21,007		—		188,375			192,544			32,826			19,534		—		179,252			4.3	%		5.1	%
Total		278,555			40,536			15,414		3,490		256,923			236,737			42,658			25,068		4,675		223,822
Residential Group
Comparable		63,966			3,536			14,045		—		74,475			66,969			1,424			12,769		—		78,314			(4.5	)%		(4.9	)%
Total		76,498			3,444			21,481		5,018		99,553			72,574			1,264			17,236		6,530		95,076
Total Real Estate Groups
Comparable		264,694			36,896			35,052		—		262,850			259,513			34,250			32,303		—		257,566			2.0	%		2.1	%
Total		355,053			43,980			36,895		8,508		356,476			309,311			43,922			42,304		11,205		318,898
Land Development Group		73,760			4,943			671		—		69,488			41,148			1,928			485		—		39,705
The Nets		(1,630	)		—			156		—		(1,474	)		—			—			—		—		—
Corporate Activities		(24,059	)		—			—		—		(24,059	)		(19,194	)		—			—		—		(19,194	)
Grand Total	$	403,124		$	48,923		$	37,722	$	8,508	$	400,431		$	331,265		$	45,850		$	42,789	$	11,205	$	339,409

8

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (GAAP) (in thousands):

	Three Months Ended October 31, 2004																Three Months Ended October 31, 2003
							Plus															Plus
				Less			Unconsolidated			Plus									Less			Unconsolidated			Plus
	Full			Minority			Investments			Discontinued			Pro-Rata			Full			Minority			Investments			Discontinued			Pro-Rata
	Consolidation			Interest			at Pro-Rata			Operations			Consolidation			Consolidation			Interest			at Pro-Rata			Operations			Consolidation
Revenues from real estate operations	$	256,108		$	28,027		$	67,604		$	4,101		$	299,786		$	236,043		$	35,480		$	67,497		$	6,830		$	274,890
Exclude straight-line rent adjustment(1)		(4,915	)		—			—			(202	)		(5,117	)		(3,921	)		—			—			(287	)		(4,208	)
Adjusted revenues		251,193			28,027			67,604			3,899			294,669			232,122			35,480			67,497			6,543			270,682
Operating expenses		149,562			17,127			39,402			1,938			173,775			132,716			20,799			37,695			3,576			153,188
Add back depreciation and amortization for non-Real Estate Groups(b)		531			—			185			—			716			483			—			70			—			553
Exclude straight-line rent adjustment(2)		(1,942	)		—			—			9			(1,933	)		(1,547	)		—			—			(7	)		(1,554	)
Adjusted operating expenses		148,151			17,127			39,587			1,947			172,558			131,652			20,799			37,765			3,569			152,187
Retained interest and interest income — Stapleton		24,169			2,417			—			—			21,752			—			—			—			—			—
Add equity in earnings of unconsolidated entities		10,777			4			(8,582	)		—			2,191			11,433			—			(6,122	)		—			5,311
Add back equity method depreciation expense (see below)		6,492			—			(6,492	)		—			—			9,413			—			(9,280	)		—			133
Net Operating Income		144,480			13,321			12,943			1,952			146,054			121,316			14,681			14,330			2,974			123,939
Interest expense, including loss on early extinguishment of debt		(67,771	)		(6,391	)		(12,943	)		(1,338	)		(75,661	)		(47,449	)		(8,703	)		(14,330	)		(2,470	)		(55,546	)
Gain on disposition of rental properties		—			—			—			31,397			31,397			—			—			—			6,358			6,358
Depreciation and amortization — Real Estate Groups(a)		(41,228	)		(3,253	)		(6,492	)		(600	)		(45,067	)		(29,160	)		(4,596	)		(9,280	)		(1,015	)		(34,859	)
Straight-line rent adjustment(1) + (2)		2,973			—			—			211			3,184			2,374			—			—			280			2,654
Equity method depreciation expense (see above)		(6,492	)		—			6,492			—			—			(9,413	)		—			9,280			—			(133	)
Earnings before income taxes		31,962			3,677			—			31,622			59,907			37,668			1,382			—			6,127			42,413
Income tax provision		(11,486	)		—			—			(12,490	)		(23,976	)		(16,086	)		—			—			(2,424	)		(18,510	)
Earnings before minority interest and discontinued operations		20,476			3,677			—			19,132			35,931			21,582			1,382			—			3,703			23,903
Minority Interest		(3,677	)		(3,677	)		—			—			—			(1,382	)		(1,382	)		—			—			—
Earnings from continuing operations		16,799			—			—			19,132			35,931			20,200			—			—			3,703			23,903
Discontinued operations, net of tax and minority interest:
Operating earnings from Lumber Group		1,409			—			—			—			1,409			2,069			—			—			—			2,069
Operating earnings from rental properties		153			—			—			(153	)		—			(141	)		—			—			141			—
Gain on disposition of rental properties		18,979			—			—			(18,979	)		—			3,844			—			—			(3,844	)		—
		20,541			—			—			(19,132	)		1,409			5,772			—			—			(3,703	)		2,069
Net earnings	$	37,340		$	—		$	—		$	—		$	37,340		$	25,972		$	—		$	—		$	—		$	25,972
(a) Depreciation and amortization - Real Estate Groups	$	41,228		$	3,253		$	6,492		$	600		$	45,067		$	29,160		$	4,596		$	9,280		$	1,015		$	34,859
(b) Depreciation and amortization - Non-Real Estate Groups		531			—			185			—			716			483			—			70			—			553
Total depreciation and amortization	$	41,759		$	3,253		$	6,677		$	600		$	45,783		$	29,643		$	4,596		$	9,350		$	1,015		$	35,412

9

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (GAAP) (in thousands):

	Nine Months Ended October 31, 2004															Nine Months Ended October 31, 2003
							Plus																Plus
				Less			Unconsolidated			Plus										Less			Unconsolidated			Plus
	Full			Minority			Investments			Discontinued			Pro-Rata				Full			Minority			Investments			Discontinued			Pro-Rata
	Consolidation			Interest			at Pro-Rata			Operations			Consolidation				Consolidation			Interest			at Pro-Rata			Operations			Consolidation
Revenues from real estate operations	$	762,152		$	108,358		$	200,670		$	16,753		$	871,217			$	646,709		$	111,366		$	192,866		$	23,160		$	751,369
Exclude straight-line rent adjustment (1)		(10,052	)		—			—			(849	)		(10,901	)			(8,136	)		—			—			(854	)		(8,990	)
Adjusted revenues		752,100			108,358			200,670			15,904			860,316				638,573			111,366			192,866			22,306			742,379
Operating expenses		434,704			62,368			118,097			7,401			497,834				366,614			65,516			107,605			11,122			419,825
Add back depreciation and amortization for non-Real Estate Groups (b)		1,614			—			343			—			1,957				1,477			—			150			—			1,627
Exclude straight-line rent adjustment (2)		(8,250	)		—			—			(5	)		(8,255	)			(3,784	)		—			—			(21	)		(3,805	)
Adjusted operating expenses		428,068			62,368			118,440			7,396			491,536				364,307			65,516			107,755			11,101			417,647
Retained interest and interest income — Stapleton		29,337			2,933			—			—			26,404				—			—			—			—			—
Add equity in earnings of unconsolidated entities		60,671			—			(55,661	)		—			5,010				33,103			—			(18,806	)		—			14,297
Remove gain on disposition of equity method operating properties		(31,996	)		—			31,996			—			—				—			—			—			—			—
Add back equity method depreciation expense (see below)		21,080			—			(20,843	)		—			237				23,896			—			(23,516	)		—			380
Net Operating Income		403,124			48,923			37,722			8,508			400,431				331,265			45,850			42,789			11,205			339,409
Interest expense, including loss on early extinguishment of debt		(183,794	)		(20,507	)		(37,722	)		(5,254	)		(206,263	)			(144,274	)		(23,722	)		(42,789	)		(6,943	)		(170,284	)
Gain on disposition of equity method rental properties (c)		31,996			—			—			—			31,996				—			—			—			—			—
(Loss) gain on disposition of rental properties, divisions and other investments		—			—			—			52,037			52,037				(431	)		—			—			6,446			6,015
Provision for decline in real estate		—			—			—			—			—				(1,624	)		—			—			(773	)		(2,397	)
Depreciation and amortization — Real Estate Groups (a)		(122,887	)		(8,634	)		(20,843	)		(2,638	)		(137,734	)			(85,476	)		(13,545	)		(23,516	)		(3,404	)		(98,851	)
Straight-line rent adjustment (1) + (2)		1,802			—			—			844			2,646				4,352			—			—			833			5,185
Equity method depreciation expense (see above)		(21,080	)		—			20,843			—			(237	)			(23,896	)		—			23,516			—			(380	)
Earnings before income taxes		109,161			19,782			—			53,497			142,876				79,916			8,583			—			7,364			78,697
Income tax provision		(36,262	)		—			—			(21,090	)		(57,352	)			(30,578	)		—			—			(2,910	)		(33,488	)
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle		72,899			19,782			—			32,407			85,524				49,338			8,583			—			4,454			45,209
Minority Interest		(19,782	)		(19,782	)		—			—			—				(8,583	)		(8,583	)		—			—			—
Earnings from continuing operations		53,117			—			—			32,407			85,524				40,755			—			—			4,454			45,209
Discontinued operations, net of tax and minority interest:
Operating earnings from Lumber Group		5,764			—			—			—			5,764				2,158			—			—			—			2,158
Operating earnings from rental properties		950			—			—			(950	)		—				557			—			—			(557	)		—
Loss on disposition of one division of Lumber Group		(661	)		—			—			—			(661	)			—			—			—			—			—
Gain on disposition of rental properties		31,457			—			—			(31,457	)		—				3,897			—			—			(3,897	)		—
		37,510			—			—			(32,407	)		5,103				6,612			—			—			(4,454	)		2,158
Cumulative effect of change in accounting principle, net of tax		(11,261	)		—			—			—			(11,261	)			—			—			—			—			—
Net earnings	$	79,366		$	—		$	—		$	—		$	79,366			$	47,367		$	—		$	—		$	—		$	47,367
(a) Depreciation and amortization — Real Estate Groups	$	122,887		$	8,634		$	20,843		$	2,638		$	137,734			$	85,476		$	13,545		$	23,516		$	3,404		$	98,851
(b) Depreciation and amortization — Non-Real Estate Groups		1,614			—			343			—			1,957				1,477			—			150			—			1,627
Total depreciation and amortization	$	124,501		$	8,634		$	21,186		$	2,638		$	139,691			$	86,953		$	13,545		$	23,666		$	3,404		$	100,478

Note c: Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 and therefore are reported in continuing operations when sold. For the nine months ended October 31, 2004, three equity method investments were sold including Chapel Hill Mall, Chapel Hill Suburban and Manhattan Town Center Mall, resulting in a gain on disposition of $31,996 which is included in Equity in Earnings of Unconsolidated Entities in the Company’s Consolidated Statement of Earnings.

10

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Retail Lease Expirations
As of October 31, 2004

													AVERAGE
													BASE
	NUMBER		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
EXPIRATION	OF EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL			SQUARE FEET
YEAR	LEASES		LEASES(3)		LEASED GLA(1)			EXPIRING(2)		BASE RENT			EXPIRING(3)
2004		62		153,056		1.64	%	$	3,312,489		1.97	%	$	27.96
2005		136		372,587		3.99			6,595,317		3.92			22.34
2006		203		492,252		5.27			10,789,528		6.41			28.51
2007		145		530,412		5.68			8,363,089		4.97			21.60
2008		155		586,483		6.28			10,178,551		6.05			23.73
2009		191		638,831		6.84			10,916,897		6.49			23.63
2010		96		397,611		4.26			7,664,440		4.56			24.95
2011		247		1,069,107		11.45			25,124,635		14.93			28.43
2012		117		694,510		7.44			13,189,962		7.84			28.68
2013		148		633,992		6.79			15,955,320		9.48			28.56
2014		124		543,800		5.82			9,518,995		5.66			26.18
Thereafter		102		3,226,278		34.54			46,635,226		27.72			19.88
TOTAL		1,726		9,338,919		100.00	%	$	168,244,449		100.00	%	$	23.96

(1) GLA = Gross Leasable Area.

(2) Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent, step rents and contingent rental payments, which are not reasonably estimatable.

(3) Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

11

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Office Lease Expirations
As of October 31, 2004

													AVERAGE
													BASE
	NUMBER		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
EXPIRATION	OF EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL			SQUARE FEET
YEAR	LEASES		LEASES(3)		LEASED GLA(1)			EXPIRING(2)		BASE RENT			EXPIRING(3)
2004		23		50,792		0.63	%	$	811,882		0.48	%	$	20.06
2005		68		536,190		6.61			9,924,601		5.83			24.26
2006		50		610,704		7.53			9,673,799		5.68			23.55
2007		43		318,423		3.92			5,754,907		3.38			23.50
2008		53		454,727		5.60			8,511,713		5.00			22.69
2009		33		310,457		3.83			6,056,634		3.56			24.89
2010		22		925,351		11.41			13,268,334		7.79			22.56
2011		8		233,104		2.87			6,818,317		4.00			31.50
2012		11		1,074,782		13.25			26,793,202		15.73			31.70
2013		15		625,409		7.71			11,813,796		6.93			23.41
2014		8		559,478		6.90			11,916,390		6.99			27.58
Thereafter		20		2,413,910		29.74			58,981,854		34.63			30.54
TOTAL		354		8,113,327		100.00	%	$	170,325,429		100.00	%	$	27.12

(1)	GLA = Gross Leasable Area.
(2)	Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent, step rents and contingent rental payments, which are not reasonably estimatable.
(3)	Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

12

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Retail Tenants
As of October 31, 2004

(Based on net base rent 1% or greater of the Company’s ownership share)

			PERCENTAGE
			OF TOTAL
	LEASED		RETAIL
TENANT	SQUARE FEET		SQUARE FEET
Regal Entertainment Group		492,180		5.27	%
The Gap		287,813		3.08
The Home Depot		282,000		3.02
AMC Entertainment, Inc.		273,731		2.93
TJX Companies		247,354		2.65
Dick’s Sporting Goods		226,408		2.42
The Limited		220,581		2.36
Circuit City Stores, Inc.		164,842		1.77
Abercrombie & Fitch Stores, Inc.		136,227		1.46
Pathmark Stores		123,500		1.32
Footlocker, Inc.		118,720		1.27
Ahold USA (Stop & Shop)		115,861		1.24
Best Buy Stores		102,661		1.10
DSW Shoe Warehouse, Inc.		89,820		0.96
Sub-Total		2,881,698		30.85
All Others		6,457,221		69.15
Total		9,338,919		100.00	%

13

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Office Tenants
As of October 31, 2004

(Based on net base rent 2% or greater of the Company’s ownership share)

			PERCENTAGE
			OF TOTAL
	LEASED		OFFICE
TENANT	SQUARE FEET		SQUARE FEET
City of New York		816,190		10.06	%
Millennium Pharmaceuticals, Inc.		725,833		8.95
U.S. Government		609,893		7.52
Keyspan Energy		450,004		5.55
Morgan Stanley & Co.		444,685		5.48
Securities Industry Automation Corp.		428,786		5.28
Wellchoice, Inc.		392,514		4.84
Bank of New York		317,572		3.91
Bear Stearns		275,244		3.39
Forest City Enterprises, Inc.		263,563		3.25
Alkermes, Inc.		210,248		2.59
Sub-Total		4,934,532		60.82	%
All Others		3,178,795		39.18
Total		8,113,327		100.00	%

14

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
October 31, 2004
2004 Openings/Acquisitions (8)

																Cost at
				Date					Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share		Square Feet/
		Dev.(D)		Opened /		Legal			%(t)			Consolidation		at 100%		(Non-GAAP)(b)		Number of
Property	Location	Acq.(A)		Acquired		Ownership%(t)			(1)			(GAAP)(a)		(2)		(1)X(2)		Units
												(in millions)
Retail Centers:
Brooklyn Commons	Brooklyn, NY		D		Q2-04		70.0	%		100.0	%	$	21.5	$	21.5	$	21.5		151,000
Atlantic Terminal	Brooklyn, NY		D		Q2-04		70.0	%		100.0	%		90.1		90.1		90.1		373,000
Quartermaster Plaza	Philadelphia, PA		D		Q3-04		70.0	%		100.0	%		69.7		69.7		69.7		459,000
Victoria Gardens	Rancho Cucamonga, CA		D		Q3-04		80.0	%		80.0	%		182.8		182.8		146.2		1,034,000	(1)
												$	364.1	$	364.1	$	327.5		2,017,000
Office:
Atlantic Terminal (2 Hanson Place)	Brooklyn, NY		D		Q2-04		70.0	%		100.0	%	$	107.9	$	107.9	$	107.9		399,000
Residential:
East 29th Avenue Town Center/Botanica	Denver, CO		D		Q1-04		90.0	%		90.0	%	$	46.0	$	46.0	$	41.4		157	(h)
Sterling Glen of Rye Brook (i) (p) (c)	Rye Brook, NY		D		Q1-04		40.0	%		40.0	%		0.0		58.3		23.3		165
Emerald Palms Expansion	Miami, FL		D		Q2-04		100.0	%		100.0	%		9.5		9.5		9.5		86
												$	55.5	$	113.8	$	74.2		408
Total 2004 Openings/Acquisitions(b) (d)												$	527.5	$	585.8	$	509.6
Residential phased-in units under construction:(c)(e)																		Opened in '04/Total
Settler’s Landing at Greentree	Streetsboro, OH		D		2001-04		50.0	%		50.0	%	$	0.0	$	25.9	$	13.0		68/408
Woodgate/Evergreen Farms	Olmsted Township, OH		D		2004-07		33.0	%		33.0	%		0.0		22.5		7.4		36/348
Eaton Ridge	Sagamore Hills, OH		D		2002-04		50.0	%		50.0	%		0.0		14.7		7.4		36/260
Newport Landing	Coventry, OH		D		2002-05		50.0	%		50.0	%		0.0		16.0		8.0		48/336
Total(b)(s)												$	0.0	$	79.1	$	35.8		188/1,352

See attached October 31, 2004 footnotes.

15

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
October 31, 2004
2004 Under Construction or to be Acquired (18)

																Cost at
									Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share		Square Feet/			Pre-
		Dev.(D)		Anticipated		Legal			%(t)			Consolidation		at 100%		(Non-GAAP)(b)		Number of			Leased
Property	Location	Acq.(A)		Opening		Ownership%(t)			(1)			(GAAP)(a)		(2)		(1)X(2)		Units			(Wtd. Avg.)
												(in millions)
Retail Centers:
Hispanic Retail Group-Gigante (c)	Inglewood, CA		D		Q1-05		19.0	%		19.0	%	$	0.0	$	9.6	$	1.8		53,000			100	%
Saddle Rock	Aurora, CO		D		Q1-05		80.0	%		80.0	%		31.8		31.8		25.4		185,000			30	%
Northfield at Stapleton	Denver, CO		D		Q3-05		90.0	%		90.0	%		165.1		165.1		148.6		779,000	(k)		48	%
Simi Valley	Simi Valley, CA		D		Q3-05		85.0	%		85.0	%		131.2		131.2		111.5		600,000			68	%
Short Pump Expansion	Richmond, VA		D		Q3-05		50.0	%		100.0	%		27.6		27.6		27.6		87,000			73	%
San Francisco Centre(c)(o)	San Francisco, CA		D		Q3-06		50.0	%		50.0	%		0.0		416.2		208.1		964,000	(m)		8	%
												$	355.7	$	781.5	$	523.0		2,668,000			39	%
Office:
University of Pennsylvania(n)	Philadelphia, PA		A		Q4-04		100.0	%		100.0	%		56.5		56.5		56.5		123,000			100	%
Twelve MetroTech Center	Brooklyn, NY		D		Q2-05		80.0	%		80.0	%		52.1		52.1		41.7		177,000	(g)		0	%
New York Times(c)	Manhattan, NY		D		Q2-07		28.0	%		40.0	%		0.0		415.0		166.0		734,000			0	%
												$	108.6	$	523.6	$	264.2		1,034,000			12	%
Residential:
23 Sidney Street	Cambridge, MA		D		Q1-05		100.0	%		100.0	%	$	17.7	$	17.7	$	17.7		51
Subway Terminal	Los Angeles, CA		D		Q1-05		100.0	%		100.0	%		57.3		57.3		57.3		277
Metropolitan Lofts(c)	Los Angeles, CA		D		Q1-05		50.0	%		50.0	%		0.0		62.3		31.2		264
Ashton Mill	Providence, RI		D		Q1-05		100.0	%		100.0	%		28.9		28.9		28.9		193
Sterling Glen of Lynbrook (i)(q)	Lynbrook, NY		D		Q2-05		80.0	%		80.0	%		27.5		27.5		22.0		100
100 Landsdowne	Cambridge, MA		D		Q3-05		100.0	%		100.0	%		65.3		65.3		65.3		203
Central Station Apartments	Chicago, IL		D		Q1-06		100.0	%		100.0	%		115.8		115.8		115.8		502
Sterling Glen of Roslyn(r)	Roslyn, NY		D		Q2-06		80.0	%		80.0	%		72.1		72.1		57.8		158
Ohana Military Communities(c)	Honolulu, HI		D		Q1-08		7.0	%		7.0	%		0.0		316.5		22.2		1,952
												$	384.6	$	763.4	$	418.2		3,700
Total 2004 Under Construction(b)(j)												$	848.9	$	2,068.5	$	1,205.4
Residential phased-in units under construction:(c)(e)																		Under Const./Total
Settler’s Landing at Greentree	Streetsboro, OH				2001-04		50.0	%		50.0	%	$	0.0	$	25.9	$	13.0		36/408
Arbor Glen	Twinsburg, OH				2001-07		50.0	%		50.0	%		0.0		18.8		9.4		144/288
Newport Landing	Coventry, OH				2002-05		50.0	%		50.0	%		0.0		16.0		8.0		60/336
Woodgate/Evergreen Farms	Olmsted Township, OH				2004-07		33.0	%		33.0	%		0.0		22.5		7.4		312/348
Pine Ridge Expansion	Willoughby, OH				2004-06		50.0	%		50.0	%		0.0		16.4		8.2		162/162
Total(b)(f)												$	0.0	$	99.6	$	46.0		714/1,542

See attached October 31, 2004 footnotes.

16

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
October 31, 2004 Footnotes

(a)	Amounts are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100% if we are deemed to have control or to be the primary beneficiary of our investments in the variable interest entity (“VIE”).
(b)	Cost at Pro-rata Share represents Forest City’s share of cost, based on its pro-rata ownership of each property (a Non-GAAP measure). Under the pro-rata consolidation method of accounting the Company determines its pro-rata share by multiplying its pro-rata ownership by the total cost of the applicable property.
(c)	Reported under the equity method of accounting. This method represents a GAAP presentation for investments in which the Company is not deemed to have control or to be the primary beneficiary of our investments in a VIE.
(d)	The difference between the full consolidation amount (GAAP) of $527.5 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $509.6 million of cost consists of a reduction to full consolidation for minority interest of $41.3 million of cost and the addition of its share of cost for unconsolidated investments of $23.3 million.
(e)	Phased-in openings. Costs are representative of the total project.
(f)	The difference between the full consolidation amount (GAAP) of $0.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $46.0 million of cost consists of the Company’s share of cost for unconsolidated investments of $46.0 million.
(g)	Represents the Company’s portion of this 1.1 million square-foot office condominium.
(h)	Project also includes 141,000 total square feet (57,000 square feet owned/managed by Forest City) of retail and 34,000 square feet of office space.
(i)	Supported-living property.
(j)	The difference between the full consolidation amount (GAAP) of $848.9 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $1,205.4 million of cost consists of a reduction to full consolidation for minority interest of $72.8 million of cost and the addition of its share of cost for unconsolidated investments of $429.3 million.
(k)	Includes 30,000 square feet of office space.
(l)	Includes 45,000 square feet of office space.
(m)	Includes 235,000 square feet of office space.
(n)	The Company will have an option to acquire this property.
(o)	This project will also include the acquisition of an adjacent retail center totaling 508,000 square feet.
(p)	Formerly Stone Gate at Bellefair.
(q)	Formerly Tanglewood Crest.
(r)	Formerly Bryant Landing.
(s)	The difference between the full consolidation amount (GAAP) of $0.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $35.8 million of cost consists of its share of cost for unconsolidated investments of $35.8 million.
(t)	As is customary within the real estate industry, the Company invests in certain real estate projects through joint ventures. For these projects, the Company provides funding for certain of its partners’ equity contributions. The Company consolidates its investments in these projects in accordance with FIN No. 46(R) at a consolidation percentage (reflected in the Pro-Rata % column). These advances entitle the Company to a preferred return on investment, which is payable from cash flows of each respective property. At the point the Company is no longer entitled to a preferred return on a particular joint venture because the partner’s advance has been repaid in full, the Company’s net assets will be adjusted to its intended ownership percentage (reflected in the Legal Ownership % column) by recording a minority interest to reflect the amount of the partner’s claim on those net assets.

17

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt (dollars in thousands)
As of October 31, 2004

	Period Ending January 31,												Fiscal Year Ending January 31,
	2005												2006
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		71,241			3,523			3,647			71,365			140,297			13,521			44,604			171,380
Weighted average rate		6.16	%		6.99	%		7.49	%		6.19	%		7.11	%		6.86	%		8.89	%		7.59	%
UDAG		18,036			23			10,728			28,741			10,931			94			—			10,837
Weighted average rate		0.00	%		0.00	%		8.00	%		2.99	%		3.87	%		0.0	%		0.0	%		3.90	%
Total fixed-rate debt		89,277			3,546			14,375			100,106			151,228			13,615			44,604			182,217
Variable:
Variable-rate debt		83,206			13,821			19,528			88,913			189,738			31,831			8,154			166,061
Weighted average rate		4.31	%		4.02	%		3.89	%		4.26	%		4.27	%		3.97	%		4.52	%		4.33	%
Tax-Exempt		7,940			1,985			5,337			11,292			174,835			19,165			40,057			195,727
Weighted average rate		3.51	%		3.51	%		3.14	%		3.33	%		3.09	%		3.21	%		2.42	%		2.95	%
Total variable-rate debt		91,146			15,806			24,865			100,205			364,573			50,996			48,211			361,788
Total Nonrecourse Mortgage Debt		180,423			19,352			39,240			200,311			515,801			64,611			92,815			544,005
Weighted Average Rate		4.58	%		4.50	%		5.25	%		4.71	%		4.63	%		4.34	%		5.72	%		4.85	%

	Fiscal Year Ending January 31,												Fiscal Year Ending January 31,
	2007												2008
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		482,029			73,091			38,610			447,548			136,448			22,763			116,724			230,409
Weighted average rate		6.67	%		6.26	%		7.75	%		6.83	%		7.08	%		7.23	%		7.47	%		7.26	%
UDAG		8,169			501			—			7,668			589			145			—			444
Weighted average rate		0.09	%		0.32	%		0.0	%		0.08	%		2.16	%		2.33	%		0.0	%		2.10	%
Total fixed-rate debt		490,198			73,592			38,610			455,216			137,037			22,908			116,724			230,853
Variable:
Variable-rate debt		267,311			78,897			30,808			219,222			81,222			21,889			12,471			71,804
Weighted average rate		5.38	%		6.06	%		5.07	%		5.09	%		4.29	%		4.37	%		3.41	%		4.11	%
Tax-Exempt		51,000			300			5,287			55,987			127,670			2,400			2,594			127,864
Weighted average rate		2.29	%		2.36	%		3.48	%		2.40	%		3.24	%		3.29	%		5.26	%		3.28	%
Total variable-rate debt		318,311			79,197			36,095			275,209			208,892			24,289			15,065			199,668
Total Nonrecourse Mortgage Debt		808,509			152,789			74,705			730,425			345,929			47,197			131,789			430,521
Weighted Average Rate		5.90	%		6.13	%		6.35	%		5.90	%		5.00	%		5.68	%		7.05	%		5.55	%

18

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt (dollars in thousands) (continued)
As of October 31, 2004

	Fiscal Year Ending January 31, 2009												Thereafter
							Plus												Plus
				Less			Unconsolidated									Less			Unconsolidated
	Full			Minority			Investments			Pro-Rata			Full			Minority			Investments			Pro-Rata
	Consolidation			Interest			at Pro-Rata			Consolidation			Consolidation			Interest			at Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		227,878			20,191			91,091			298,778			1,959,430			237,819			319,673			2,041,284
Weighted average rate		7.20	%		7.15	%		6.85	%		7.10	%		6.70	%		7.40	%		6.55	%		6.60	%
UDAG		581			151			967			1,397			67,838			19,386			—			48,452
Weighted average rate		2.06	%		2.41	%		0.00	%		0.60	%		1.69	%		1.30	%		0.0	%		1.85	%
Total fixed-rate debt		228,459			20,342			92,058			300,175			2,027,268			257,205			319,673			2,089,736
Variable:
Variable-rate debt		29,349			3,315			8,269			34,303			131,735			—			46,677			178,412
Weighted average rate		4.61	%		5.12	%		7.01	%		5.14	%		4.75	%		0.0	%		3.37	%		4.39	%
Tax-Exempt		16,000			3,200			—			12,800			275,825			27,781			43,999			292,043
Weighted average rate		3.31	%		3.31	%		0.0	%		3.31	%		2.74	%		2.69	%		2.68	%		2.74	%
Total variable-rate debt		45,349			6,515			8,269			47,103			407,560			27,781			90,676			470,455
Total Nonrecourse Mortgage Debt		273,808			26,857			100,327			347,278			2,434,828			284,986			410,349			2,560,191
Weighted Average Rate		6.68	%		6.41	%		6.80	%		6.74	%		6.01	%		6.52	%		5.77	%		5.92	%

	Total
							Plus
							Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		3,017,323			370,908			614,349			3,260,764
Weighted average rate		6.76	%		7.12	%		7.02	%		6.77	%
UDAG		106,144			20,300			11,695			97,539
Weighted average rate		1.51	%		1.29	%		7.34	%		2.25	%
Total fixed-rate debt		3,123,467			391,208			626,044			3,358,303
Variable:
Variable-rate debt		782,561			149,753			125,907			758,715
Weighted average rate		4.75	%		5.16	%		4.19	%		4.57	%
Tax-Exempt		653,270			54,831			97,274			695,713
Weighted average rate		2.92	%		2.96	%		2.71	%		2.89	%
Total variable-rate debt		1,435,831			204,584			223,181			1,454,428
Total Nonrecourse Mortgage Debt		4,559,298			595,792			849,225			4,812,731
Weighted Average Rate		5.74	%		6.05	%		6.11	%		5.77	%

19

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

As discussed on page 2, we present certain financial amounts under the pro-rata consolidation method (a non-GAAP measure). This information is useful to our investors because we believe that it more accurately reflects the manner in which we operate our business. This is because, in line with industry practice, we have a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. The information in the tables below present amounts for both full consolidation, a GAAP measure, and pro-rata consolidation, providing a reconciliation of the difference between the two methods. Under the pro-rata consolidation method, we present our partnership investments proportionate to our share of ownership for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed under our control or if we are deemed to be the primary beneficiary for our investments in a VIE. Partnership assets and liabilities are reported on the equity or cost method of accounting if we do not have control, or, in the case of investments in VIEs, the Company is not deemed the primary beneficiary.

Consolidated Balance Sheet Information – October 31, 2004 (Unaudited)

										Plus
										Unconsolidated			Pro-Rata
				Full			Less Minority			Investments at			Consolidation
				Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(in thousands)
Assets
Real Estate
	Completed rental properties			$	5,646,613		$	822,562		$	906,766		$	5,730,817
	Projects under development				589,473			28,111			109,952			671,314
	Land held for development or sale				96,922			4,078			88,137			180,981
			Total Real Estate		6,333,008			854,751			1,104,855			6,583,112
	Less accumulated depreciation				(850,845	)		(137,020	)		(243,201	)		(957,026	)
			Real Estate, net		5,482,163			717,731			861,654			5,626,086
Cash and equivalents					70,684			13,022			30,592			88,254
Restricted cash					426,266			35,172			65,732			456,826
Notes and accounts receivable, net					203,951			44,208			8,500			168,243
Investments in and advances to real estate affiliates					456,900			—			(104,440	)		352,460
Other assets					367,198			37,292			101,619			431,525
Lumber group assets – held for sale					248,725			—			—			248,725
			Total Assets	$	7,255,887		$	847,425		$	963,657		$	7,372,119
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse				$	4,559,298		$	595,792		$	849,225		$	4,812,731
Notes payable					91,567			16,544			40,570			115,593
Long-term credit facility					115,000			—			—			115,000
Senior and subordinated debt					449,400			—			—			449,400
Accounts payable and accrued expenses					544,355			121,030			73,862			497,187
Deferred income taxes					340,472			—			—			340,472
Lumber group liabilities – held for sale					231,554			—			—			231,554
		Total Liabilities			6,331,646			733,366			963,657			6,561,937
Minority interest					114,059			114,059			—			—
		Total Shareholders’ Equity			810,182			—			—			810,182
Total Liabilities and Shareholders’ Equity				$	7,255,887		$	847,425		$	963,657		$	7,372,119

20

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Balance Sheet Information – January 31, 2004

							Plus
							Unconsolidated			Pro-Rata
	Full			Less Minority			Investments at			Consolidation
	Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(unaudited)			(unaudited)			(unaudited)
		(in thousands)
Assets
Real Estate
Completed rental properties	$	4,504,756		$	706,045		$	996,505		$	4,795,216
Projects under development		506,986			72,999			123,578			557,565
Land held for development or sale		70,853			—			49,607			120,460
Total Real Estate		5,082,595			779,044			1,169,690			5,473,241
Less accumulated depreciation		(715,482	)		(109,941	)		(215,350	)		(820,891	)
Real Estate, net		4,367,113			669,103			954,340			4,652,350
Cash and equivalents		107,491			16,830			29,413			120,074
Restricted cash		257,795			38,678			23,059			242,176
Notes and accounts receivable, net		217,258			21,440			18,331			214,149
Investments in and advances to real estate affiliates		432,584			—			(78,634	)		353,950
Other assets		285,423			44,455			31,562			272,530
Lumber group assets – held for sale		256,408			—			—			256,408
Total Assets	$	5,924,072		$	790,506		$	978,071		$	6,111,637
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	3,634,177		$	618,798		$	910,866		$	3,926,245
Notes payable		86,030			16,529			8,948			78,449
Long-term credit facility		56,250			—			—			56,250
Senior and subordinated debt		349,400			—			—			349,400
Accounts payable and accrued expenses		463,023			106,705			58,257			414,575
Deferred income taxes		294,925			—			—			294,925
Lumber group liabilities – held for sale		242,882			—			—			242,882
Total Liabilities		5,126,687			742,032			978,071			5,362,726
Minority interest		48,474			48,474			—			—
Total Shareholders’ Equity		748,911			—			—			748,911
Total Liabilities and Shareholders’ Equity	$	5,924,072		$	790,506		$	978,071		$	6,111,637

21

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information – Three Months Ended October 31, 2004 (Unaudited)

							Plus
	Full						Unconsolidated			Plus			Pro-Rata
	Consolidation			Less Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	256,108		$	28,027		$	67,604		$	4,101		$	299,786
Expenses
Operating expenses		149,562			17,127			39,402			1,938			173,775
Interest expense, including early extinguishment of debt		67,771			6,391			12,943			1,338			75,661
Depreciation and amortization		41,759			3,253			6,677			600			45,783
		259,092			26,771			59,022			3,876			295,219
Retained interest and interest income — Stapleton		24,169			2,417			—			—			21,752
Equity in earnings of unconsolidated real estate entities		10,777			4			(8,582	)		—			2,191
Gain on disposition of rental properties		—			—			—			31,397			31,397
Earnings before income taxes		31,962			3,677			—			31,622			59,907
Income tax expense (benefit)
Current		(9,168	)		—			—			(161	)		(9,329	)
Deferred		20,654			—			—			12,651			33,305
		11,486			—			—			12,490			23,976
Earnings before minority interest and discontinued operations		20,476			3,677			—			19,132			35,931
Minority interest		(3,677	)		(3,677	)		—			—			—
Earnings from continuing operations		16,799			—			—			19,132			35,931
Discontinued operations, net of tax and minority interest
Earnings from Lumber Group		1,409			—			—			—			1,409
Earnings from rental properties		153			—			—			(153	)		—
Gain on disposition of rental properties		18,979			—			—			(18,979	)		—
		20,541			—			—			(19,132	)		1,409
Net earnings	$	37,340		$	—		$	—		$	—		$	37,340

22

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Nine Months Ended October 31, 2004 (Unaudited)

							Plus
	Full						Unconsolidated			Plus			Pro-Rata
	Consolidation			Less Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	762,152		$	108,358		$	200,670		$	16,753		$	871,217
Expenses
Operating expenses		434,704			62,368			118,097			7,401			497,834
Interest expense, including early extinguishment of debt		183,794			20,507			37,722			5,254			206,263
Depreciation and amortization		124,501			8,634			21,186			2,638			139,691
		742,999			91,509			177,005			15,293			843,788
Retained interest and interest income — Stapleton		29,337			2,933			—			—			26,404
Equity in earnings of unconsolidated real estate entities (Note 1)		60,671			—			(55,661	)		—			5,010
Gain on disposition of rental properties		—			—			31,996			52,037			84,033
Earnings before income taxes		109,161			19,782			—			53,497			142,876
Income tax expense (benefit)
Current		(10,417	)		—			—			415			(10,002	)
Deferred		46,679			—			—			20,675			67,354
		36,262			—			—			21,090			57,352
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle		72,899			19,782			—			32,407			85,524
Minority interest		(19,782	)		(19,782	)		—			—			—
Earnings from continuing operations (Note 1)		53,117			—			—			32,407			85,524
Discontinued operations, net of tax and minority interest
Operating earnings from Lumber Group		5,764			—			—			—			5,764
Operating earnings from rental properties		950			—			—			(950	)		—
Loss on disposition of one division of Lumber Group		(661	)		—			—			—			(661	)
Gain on disposition of rental properties		31,457			—			—			(31,457	)		—
		37,510			—			—			(32,407	)		5,103
Cumulative effect of change in accounting principle, net of tax		(11,261	)		—			—			—			(11,261	)
Net earnings	$	79,366		$	—		$	—		$	—		$	79,366

Note:

(1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144, and therefore are reported in continuing operations when sold. For the nine months ended October 31, 2004, three equity method investments were sold including Chapel Hill Mall, Chapel Hill Suburban, and Manhattan Town Center Mall. A pre-tax gain of $31,996,000 ($19,341,000 net of tax) has been reported in equity in earnings of unconsolidated real estate entities in the Consolidated Statement of Earnings and, therefore, are included in Earnings from Continuing Operations. No equity method investments were sold during the three months ended October 31, 2004 or the three and nine months ended October 31, 2003.

23

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended October 31, 2003 (Unaudited)

							Plus
	Full						Unconsolidated			Plus			Pro-Rata
	Consolidation			Less Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	236,043		$	35,480		$	67,497		$	6,830		$	274,890
Expenses
Operating expenses		132,716			20,799			37,695			3,576			153,188
Interest expense		47,449			8,703			14,330			2,470			55,546
Depreciation and amortization		29,643			4,596			9,350			1,015			35,412
		209,808			34,098			61,375			7,061			244,146
Equity in earnings of unconsolidated real estate entities		11,433			—			(6,122	)		—			5,311
Gain on disposition of rental properties		—			—			—			6,358			6,358
Earnings before income taxes		37,668			1,382			—			6,127			42,413
Income tax expense (benefit)
Current		(2,914	)		—			—			(305	)		(3,219	)
Deferred		19,000			—			—			2,729			21,729
		16,086			—			—			2,424			18,510
Earnings before minority interest and discontinued operations		21,582			1,382			—			3,703			23,903
Minority interest		(1,382	)		(1,382	)		—			—			—
Earnings from continuing operations		20,200			—			—			3,703			23,903
Discontinued operations, net of tax and minority interest
Operating earnings from Lumber Group		2,069			—			—			—			2,069
Operating loss from rental properties		(141	)		—			—			141			—
Gain in disposition of rental properties		3,844			—			—			(3,844	)		—
		5,772			—			—			(3,703	)		2,069
Net earnings	$	25,972		$	—		$	—		$	—		$	25,972

24

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Nine Months Ended October 31, 2003 (Unaudited)

							Plus
	Full						Unconsolidated			Plus			Pro-Rata
	Consolidation			Less Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
							(in thousands)
Revenues from real estate operations	$	646,709		$	111,366		$	192,866		$	23,160		$	751,369
Expenses
Operating expenses		366,614			65,516			107,605			11,122			419,825
Interest expense, including early extinguishment of debt		144,274			23,722			42,789			6,943			170,284
Provision for decline in real estate		1,624			—			—			773			2,397
Depreciation and amortization		86,953			13,545			23,666			3,404			100,478
		599,465			102,783			174,060			22,242			692,984
Equity in earnings of unconsolidated real estate entities		33,103			—			(18,806	)		—			14,297
Loss on securities		(431	)		—			—			6,446			6,015
Earnings before income taxes		79,916			8,583			—			7,364			78,697
Income tax expense
Current		36			—			—			1,749			1,785
Deferred		30,542			—			—			1,161			31,703
		30,578			—			—			2,910			33,488
Earnings before minority interest and discontinued operations		49,338			8,583			—			4,454			45,209
Minority interest		(8,583	)		(8,583	)		—			—			—
Earnings from continuing operations		40,755			—			—			4,454			45,209
Discontinued operations, net of tax and minority interest
Operating earnings from Lumber Group		2,158			—			—			—			2,158
Operating earnings from rental properties		557			—			—			(557	)		—
Gain on disposition of rental properties		3,897			—			—			(3,897	)		—
		6,612			—			—			(4,454	)		2,158
Net earnings	$	47,367		$	—		$	—		$	—		$	47,367

25

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

The following schedules on pages 26-27 present information on investments in and advances to real estate affiliates.

Investments in and Advances to Real Estate Affiliates

Included in Investments in and Advances to Real Estate Affiliates in the Consolidated Balance Sheet Information tables are unconsolidated investments in entities which we do not control or are not the primary beneficiary, and which are accounted for under the equity method of accounting, as well as advances to other partners. Summarized financial information for the equity method investments is as follows:

	Combined (100%)						Pro-Rata Share
	(GAAP)						(non-GAAP)
	October 31,			January 31,			October 31,			January 31,
	2004			2004			2004			2004
	(in thousands)						(in thousands)
Balance Sheet:
Completed rental properties	$	1,757,105		$	2,375,832		$	906,766		$	996,506
Projects under development		257,212			263,687			109,952			123,578
Land held for development or sale		166,265			104,851			88,137			49,607
Investments in and advances to real estate affiliates — syndicated residential partnerships (1)		—			—			—			40,790
Accumulated depreciation		(462,971	)		(499,297	)		(243,201	)		(215,350	)
Restricted cash (2)		372,229			50,503			65,732			23,059
Other assets (3)		525,404			195,765			140,711			79,305
Total Assets	$	2,615,244		$	2,491,341		$	1,068,097		$	1,097,495
Mortgage debt, nonrecourse	$	1,919,483		$	2,153,443		$	849,225		$	910,866
Advances from general partner		—			1,385			—			—
Other liabilities (3)		352,207			166,907			114,432			67,205
Members’ and partners’ equity (3)		343,554			169,606			104,440			119,424
Total Liabilities and Partners’ Equity	$	2,615,244		$	2,491,341		$	1,068,097		$	1,097,495
Three Months Ended October 31,		2004			2003			2004			2003
Operations:
Revenues	$	142,905		$	121,894		$	67,608		$	67,497
Equity in earnings of unconsolidated entities on a pro-rata basis		—			—			2,191			5,311
Operating expenses		(84,547	)		(67,586	)		(39,402	)		(37,695	)
Interest expense		(26,505	)		(26,213	)		(12,943	)		(14,330	)
Depreciation and amortization		(16,529	)		(17,327	)		(6,677	)		(9,350	)
Net Earnings (pre-tax)	$	15,324		$	10,768		$	10,777		$	11,433
Nine Months Ended October 31,		2004			2003			2004			2003
Operations:
Revenues	$	398,366		$	415,624		$	200,670		$	192,866
Equity in earnings of unconsolidated entities on a pro-rata basis		—			—			5,010			14,297
Operating expenses		(230,080	)		(226,294	)		(118,097	)		(107,605	)
Interest expense		(75,477	)		(95,987	)		(37,722	)		(42,789	)
Depreciation and amortization		(44,877	)		(55,370	)		(21,186	)		(23,666	)
Gain on disposition of operating properties (4)		61,427			—			31,996			—
Net Earnings (pre-tax)	$	109,359		$	37,973		$	60,671		$	33,103

26

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Investments in and Advances to Real Estate Affiliates (continued)

Following is a reconciliation of partners’ equity to our carrying value in the Consolidated Balance Sheet information presented above:

	October 31,		January 31,
	2004		2004
Members’ and Partners’ equity, as above	$	343,554	$	169,606
Equity of other members and partners		239,114		51,567
Company’s investment in partnerships		104,440		118,039
Advances to partnerships, as above		—		1,385
Advances to other real estate affiliates (5)		352,460		313,160
Investments in and advances to real estate affiliates	$	456,900	$	432,584

(1) We are a general partner in several syndicated residential partnerships which were accounted for on the equity method under both full consolidation and pro-rata consolidation at January 31, 2004. Effective February 1, 2004, these investments are now fully consolidated either as the result of the acquisition of our partner’s interest or our adoption of FIN No. 46 (R). Summarized balance sheet information as of January 31, 2004 at our economic share is as follows:

Total Assets	$	240,362
Total Liabilities	$	199,572
Partner’s Equity	$	40,790

(2)	The increase in restricted cash from January 31, 2004 to October 31, 2004 primarily relates to escrow deposits for construction loan proceeds for Ohana Military Communities, a 1,952 unit residential development property in Honolulu, Hawaii.
(3)	The increase in other assets, other liabilities and members’ and partners’ equity from January 31, 2004 to October 31, 2004 primarily relates to the Nets acquisition.
(4)	The following table shows the detail of gain on disposition of rental properties:

	Nine Months
	Ended October 31,
	2004
	(in thousands)
Chapel Hill Mall (Akron, Ohio)	$	56,455
Chapel Hill Suburban (Akron, Ohio)		1,831
Manhattan Town Center Mall (Manhattan, Kansas)		3,141
Total gain on disposition of rental properties	$	61,427
Company’s portion of gain on disposition of rental properties	$	31,996

(5) As is customary within the real estate industry, we invest in certain real estate projects through joint ventures. We often provide funding of our partners’ equity contributions. The most significant partnership for which we provide funding is related to Forest City Ratner Companies, representing the Commercial Group’s New York Office operations. We consolidate our investments in these projects. Our partner is the President and Chief Executive Officer of Forest City Ratner Companies who is the cousin to five executive officers of our Company. At October 31, 2004 and January 31, 2004 amounts advanced for real estate projects on behalf of this partner, collateralized by this partnership interest, were $81,135 and $114,164, respectively, of the $352,460 and $313,160 presented above for “Advances to other real estate affiliates.” These advances entitle us to a preferred return on and of the outstanding balances, which are payable from cash flows of each respective property. Effective February 1, 2004, we modified profit and loss allocation provisions of our arrangement with our partner in the New York operations for certain existing and all prospective property partnerships. These modifications had, and are expected to have, an insignificant financial impact on the Company. During the first quarter of 2004, we have reclassified in our Consolidated Balance Sheet a net amount of approximately $30,000 from investments and advances to real estate affiliates to minority interest, which had no impact to our Consolidated Statements of Earnings or Cash Flows.

We implemented FIN No. 46 (R) on February 1, 2004. As a result, we determined that we are the primary beneficiary of 25 previously unconsolidated VIEs representing 14 properties (19 VIEs representing eight properties in Residential Group, five VIEs/properties in Commercial Group and one VIE/property in Land Development Group). Of these 25 VIEs, 14 VIEs representing 13 properties (nine VIEs/properties in Residential Group, four VIEs/properties in Commercial Group and one VIE/property in Land Development Group) that were previously accounted for using the equity method of accounting have been consolidated. The remaining 11 VIEs representing one property, (10 VIEs in Residential Group and one VIE/property in Commercial Group) that were previously accounted for using the cost method of accounting have also fully been consolidated. In addition, we deconsolidated five properties that were previously consolidated.

27

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Results of Operations

Net Earnings – Our net earnings for the three months ended October 31, 2004 were $37,340,000 versus $25,972,000 for the three months ended October 31, 2003. Net earnings for the nine months ended October 31, 2004 were $79,366,000 versus $47,367,000 for the nine months ended October 31, 2003. The positive fluctuation is primarily attributable to the gain on sale of $19,341,000 related to two regional malls and one specialty retail center during the second quarter of 2004, the gain on sale of $15,348,000 related to the sale of an apartment community during the third quarter of 2004 and the sale of other rental properties and division. In addition, we received and reported revenue of $13,745,000, net of tax related to our retained interest in a trust holding $145,000,000 of bonds. Of this amount, $12,445,000 of net earnings was earned by the retained interest in previous fiscal years and deferred until 2004. The remaining $1,300,000 represents net earnings earned and recognized on the retained interest during the nine months ended October 31, 2004. The positive fluctuation is also attributable to the addition of eight residential communities, four office buildings and four retail centers partially offset by a loss of $985,000 related to our equity investment in the Nets.

Also impacting the change in net earnings is Lumber Group which had net earnings of $1,409,000 for the three months ended October 31, 2004 versus $2,069,000 for the three months ended October 31, 2003. The net earnings of Lumber Group for the nine months ended October 31, 2004 were $5,764,000 versus $2,158,000 for the nine months ended October 31, 2003. The Lumber Group was sold on November 12, 2004.

Net Operating Income from Real Estate Groups – NOI, a non-GAAP measure, is defined as revenues (excluding straight-line rent adjustments) less operating expenses (including depreciation and amortization for non-real estate groups) plus equity in earnings of unconsolidated entities (excluding gain on disposition of equity method operating properties) plus equity method depreciation and amortization. We believe NOI provides us, as well as our investors, additional information about our core business operations and, along with earnings, is necessary to understand our business and operating results. Under the full consolidation method (GAAP), NOI from the combination of the Commercial Group and the Residential Group (“Real Estate Groups”) for the three months ended October 31, 2004 was $115,173,000 compared to $101,386,000 for the three months ended October 31, 2003, a 13.6% increase. NOI for the Real Estate Groups was $355,053,000 for the nine months ended October 31, 2004 compared to $309,311,000 for the nine months ended October 31, 2003. This increase over the comparable period in the prior year is primarily attributable to NOI generated from new properties which include nine residential communities, three office buildings and one retail center opened during the year ended January 31, 2004, as well as the three residential communities, one office building and four retail centers opened thus far in 2004. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 9-10. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-46.

Management also analyzes property NOI using the pro-rata consolidation method because it provides operating data at our ownership share, and we publicly disclose and discuss our performance using this method of consolidation to compliment our GAAP disclosures. Under the pro-rata consolidation method, NOI from the Real Estate Groups for the three months ended October 31, 2004 was $119,544,000 compared to $104,835,000 for the three months ended October 31, 2003, a 14.0% increase. Under the pro-rata consolidation method, NOI for the Real Estate Groups was $356,476,000 for the nine months ended October 31, 2004 compared to $318,898,000 for the nine months ended October 31, 2003. Comparable NOI for the third quarter increased 2.5% compared to an increase of 2.9% for the previous quarter. In spite of flat third quarter results, comparable NOI for our retail portfolio is up 1.7% year to date. Our office portfolio has generated a 3.7% comparable increase for the quarter, and a year-to-date increase of 3.1%.

EBDT – We use an additional measure, along with net earnings, to report our operating results. This non-GAAP measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results or cash flows from operations as defined by GAAP and may not be directly comparable to similarly-titled measures reported by other companies.

We believe that EBDT provides additional information about our core operations and, along with net earnings, is necessary to understand our operating results. EBDT is used by the chief operating decision maker and management in assessing operating performance and to consider capital requirements and allocation of resources by segment and on a consolidated basis. We believe EBDT is important to investors because it provides another method for the investor to measure our long term operating performance as net earnings can vary from year to year due to property dispositions, acquisitions and other factors that have a short-term impact.

EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of operating properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash charges from real estate operations of Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization (including amortization of mortgage procurement costs) and deferred income taxes;

28

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings of the equity method investment.

EBDT is reconciled to net earnings, the most comparable financial measure calculated in accordance with GAAP below. The adjustment to recognize rental revenues and rental expenses on the straight-line method is excluded because it is management’s opinion that rental revenues and expenses should be recognized when due from the tenants or due to the landlord. We exclude depreciation and amortization expense related to real estate operations from EBDT because we believe the values of our properties, in general, have appreciated over time in excess of their original cost. Deferred taxes from real estate operations, which are the result of timing differences of certain net expense items deducted in a future year for federal income tax purposes, are excluded until the year in which they are reflected in our current tax provision. The provision for decline in real estate is excluded from EBDT because it varies from year to year based on factors unrelated to our overall financial performance and is related to the ultimate gain on dispositions of operating properties. Our EBDT may not be directly comparable to similarly-titled measures reported by other companies.

Our EBDT for the three months ended October 31, 2004 grew by 18.2% to $82,585,000 from $69,896,000 for the three months ended October 31, 2003. Our EBDT for the nine months ended October 31, 2004 grew by 21.6% to $208,701,000 from $171,581,000 for the nine months ended October 31, 2003. The positive fluctuation is primarily attributable to the addition of eight residential communities, four office buildings and five retail centers added to our portfolio in 2003 and 2004 and a non-recurring expense related to the write-off of bond issuance costs on bonds that were retired during the second quarter of 2003. In addition, we received and reported revenue related to our retained interest in a trust holding $145,000,000 of bonds. As a result, EBDT increased by approximately $13,745,000. Of this amount, $12,445,000 was earned by the retained interest in previous fiscal years and deferred until 2004 under the cost recovery method of revenue recognition. The remaining $1,300,000 represents EBDT earned and recognized on the retained interest during the nine months ended October 31, 2004. The positive fluctuation in EBDT is also attributable to increased development fees at Twelve MetroTech Center in Brooklyn, New York, and our continued tax management initiatives to decrease our current tax provision, thereby increasing deferred taxes.

29

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of EBDT - The information in the tables on pages 33-46 present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as a reconciliation from NOI to EBDT to net earnings. Under the pro-rata consolidation method, we present our partnership investments proportionate to our pro-rata share for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed under our control or if we are deemed to be the primary beneficiary for investments in the VIEs, or on the equity method of accounting if we do not have control or are not the primary beneficiary for investments in VIEs.

Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes ⁽²⁾ (EBDT)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Net earnings	$	37,340		$	25,972		$	79,366		$	47,367
Depreciation and amortization — Real Estate Groups (5)		45,067			34,859			137,734			98,851
Depreciation and amortization — equity method investments (3)		—			133			237			380
Deferred income tax expense — Real Estate Groups (6)		34,540			17,948			65,949			32,231
Deferred income tax expense (benefit) — Non Real Estate Groups: (6)
Gain on disposition of other investments		—			—			—			(179	)
Loss on disposition of one division of Lumber Group		—			—			89			—
Current income tax expense on non-operating earnings: (6)
Gain on disposition of other investments		—			—			—			9
Gain on disposition included in discontinued operations		219			(4	)		(140	)		1,725
Gain on disposition recorded on equity method		—			—			(209	)		—
Straight-line rent adjustment (4)		(3,184	)		(2,654	)		(2,646	)		(5,185	)
Provision for decline in real estate, net of minority interest		—			—			—			1,624
Gain on disposition recorded on equity method		—			—			(31,996	)		—
Gain on disposition of other investments		—			—			—			431
Discontinued operations: (1)
Gain on disposition of rental properties		(31,625	)		(6,358	)		(52,931	)		(6,769	)
Loss on disposition of one division of Lumber Group		—			—			1,093			—
Provision for decline		—			—			—			1,104
Minority interest		228			—			894			(8	)
Cumulative effect of change in accounting principle, net of tax		—			—			11,261			—
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2)	$	82,585		$	69,896		$	208,701		$	171,581

30

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) ⁽²⁾ (continued)

1) Pursuant to the definition of a component of an entity of SFAS No. 144, assuming no significant continuing involvement, all earnings of properties and a division which have been sold or held for sale are reported as discontinued operations.

2) The Company uses an additional measure, along with net earnings, to report its operating results. This measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results as defined by generally accepted accounting principles and may not be directly comparable to similarly-titled measures reported by other companies. The Company believes that EBDT provides additional information about its operations, and along with net earnings, is necessary to understand its operating results. EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of operating properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) noncash charges from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization (including amortization of mortgage procurement costs) and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax).

3) Amount represents depreciation expense for certain properties accounted for on the equity method of accounting under both full consolidation and pro-rata consolidation (a non-GAAP financial measure). See our discussion of pro-rata consolidation in the preceding narrative. See Investments and Advances to Real Estate Affiliates on pages 26-27 for discussion of these properties.

4) The Company recognizes minimum rents on a straight-line basis over the term of the related lease pursuant to the provision of SFAS No. 13, “Accounting for Leases.” The straight-line rent adjustment is recorded as an increase or decrease to revenue from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., with the applicable offset to either accounts receivable or accounts payable, as appropriate.

5) The following table provides detail of Depreciation and Amortization. The Company’s Real Estate Groups are owned by Forest City Rental Properties Corporation, a wholly-owned subsidiary engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large development projects.

	Three Months Ended October 31,						Nine Months Ended October 31,
	2004			2003			2004			2003
Full Consolidation	$	41,759		$	29,643		$	124,501		$	86,953
Non-Real Estate Groups		(531	)		(483	)		(1,614	)		(1,477	)
Real Estate Groups Full Consolidation		41,228			29,160			122,887			85,476
Real Estate Groups related to minority interest		(3,253	)		(4,596	)		(8,634	)		(13,545	)
Real Estate Groups Equity Method		6,492			9,280			20,843			23,516
Real Estate Group Discontinued Operations		600			1,015			2,638			3,404
Real Estate Groups Pro-Rata Consolidation	$	45,067		$	34,859		$	137,734		$	98,851

31

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) ² (continued)

(6) The following table provides detail of Income Tax Expense (Benefit):

	Three Months Ended October 31,						Nine Months Ended October 31,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
(A) Operating earnings
Current	$	(9,168	)	$	(2,914	)	$	(10,208	)	$	27
Deferred		20,654			19,000			33,815			31,363
		11,486			16,086			23,607			31,390
(B) Deferred tax on provision for decline in real estate		—			—			—			(642	)
(C) Loss on disposition of other investments
Current		—			—			—			9
Deferred — Non-Real Estate Groups		—			—			—			(179	)
		—			—			—			(170	)
(D) Gain on disposition recorded on equity method
Current		—			—			(209	)		—
Deferred		—			—			12,864			—
		—			—			12,655			—
Subtotal (A) (B) (C) (D)
Current		(9,168	)		(2,914	)		(10,417	)		36
Deferred		20,654			19,000			46,679			30,542
Income tax expense		11,486			16,086			36,262			30,578
(E) Discontinued operations — Rental Properties
Operating earnings
Current		(380	)		(301	)		34			24
Deferred		452			211			476			643
		72			(90	)		510			667
Deferred tax on provision for decline in real estate		—			—			—			(306	)
Gain (loss) on disposition of rental properties
Current		219			(4	)		381			1,725
Deferred		12,199			2,518			20,199			824
		12,418			2,514			20,580			2,549
		12,490			2,424			21,090			2,910
Subtotal (A) (B) (C) (D) (E)
Current		(9,329	)		(3,219	)		(10,002	)		1,785
Deferred		33,305			21,729			67,354			32,009
	$	23,976		$	18,510		$	57,352		$	33,794
(F) Discontinued operations — Lumber Group
Operating earnings
Current		2,289			788			4,212			1,378
Deferred		(1,237	)		870			(117	)		771
		1,052			1,658			4,095			2,149
Loss on disposition of one division of Lumber Group
Current		—			—			(521	)		—
Deferred		—			—			89			—
		—			—			(432	)		—
		13,542			4,082			24,753			5,059
Grand Total (A) (B) (C) (D) (E) (F)
Current		(7,040	)		(2,431	)		(6,311	)		3,163
Deferred		32,068			22,599			67,326			32,780
		25,028			20,168			61,015			35,943
Recap of Grand Total:
Real Estate Groups
Current		(7,176	)		1,933			3,217			14,724
Deferred		34,540			17,948			65,949			32,231
		27,364			19,881			69,166			46,955
Non-Real Estate Groups
Current		136			(4,364	)		(9,528	)		(11,561	)
Deferred		(2,472	)		4,651			1,377			549
		(2,336	)		287			(8,151	)		(11,012	)
Grand Total	$	25,028		$	20,168		$	61,015		$	35,943

32

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2004 (in thousands)

	Commercial Group 2004														Residential Group 2004
						Plus															Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata				Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued			Consolidation				Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)				(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	181,867		$	22,750	$	25,913		$	1,000		$	186,030			$	52,410		$	3,772	$	29,767		$	3,101		$	81,506
Exclude straight-line rent adjustment		(4,995	)		—		—			(202	)		(5,197	)			80			—		—			—			80
Adjusted revenues		176,872			22,750		25,913			798			180,833				52,490			3,772		29,767			3,101			81,586
Operating expenses, including depreciation and amortization for non-Real Estate Groups		96,068			13,823		14,634			422			97,301				33,549			2,613		16,022			1,516			48,474
Exclude straight-line rent adjustment		(1,942	)		—		—			9			(1,933	)			—			—		—			—			—
Adjusted operating expenses		94,126			13,823		14,634			431			95,368				33,549			2,613		16,022			1,516			48,474
Retained interest and interest income — Stapleton		—			—		—			—			—				—			—		—			—			—
Add equity in earnings of unconsolidated entities		4,152			4		(3,739	)		—			409				2,842			—		(2,284	)		—			558
Add back equity method depreciation and amortization expense		2,621			—		(2,621	)		—			—				3,871			—		(3,871	)		—			—
Net operating income		89,519			8,931		4,919			367			85,874				25,654			1,159		7,590			1,585			33,670
Interest expense		45,069			5,264		4,919			157			44,881				11,094			993		7,590			1,181			18,872
Income tax expense (benefit)		(8,003	)		—		—			(404	)		(8,407	)			(7,095	)		—		—			24			(7,071	)
Minority interest in earnings before depreciation and amortization		3,667			3,667		—			—			—				166			166		—			—			—
Add: EBDT from discontinued operations		614			—		—			(614	)		—				380			—		—			(380	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	49,400		$	—	$	—		$	—		$	49,400			$	21,869		$	—	$	—		$	—		$	21,869
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	49,400		$	—	$	—		$	—		$	49,400			$	21,869		$	—	$	—		$	—		$	21,869
Depreciation and amortization — Real Estate Groups		(30,791	)		—		—			(210	)		(31,001	)			(13,635	)		—		—			(390	)		(14,025	)
Deferred taxes — Real Estate Groups		(13,545	)		—		—			(473	)		(14,018	)			(7,145	)		—		—			21			(7,124	)
Straight-line rent adjustment		3,053			—		—			211			3,264				(80	)		—		—			—			(80	)
Gain on disposition of rental properties, net of tax		—			—		—			3,631			3,631				—			—		—			15,348			15,348
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(210	)		—		—			210			—				(390	)		—		—			390			—
Deferred taxes — Real Estate Groups		(473	)		—		—			473			—				21			—		—			(21	)		—
Straight-line rent adjustment		211			—		—			(211	)		—				—			—		—			—			—
Gain on disposition of rental properties		3,631			—		—			(3,631	)		—				15,348			—		—			(15,348	)		—
Net earnings	$	11,276		$	—	$	—		$	—		$	11,276			$	15,988		$	—	$	—		$	—		$	15,988

33

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2004 (in thousands) (continued)

	Land Development Group 2004													Lumber Group 2004
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata				Full		Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments			Discontinued		Consolidation				Consolidation		Minority		Investments		Discontinued		Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations		(Non-GAAP)				(GAAP)		Interest		at Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	21,822		$	1,505	$	11,858		$	—	$	32,175			$	—	$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted revenues		21,822			1,505		11,858			—		32,175				—		—		—		—		—
Operating expenses, including depreciation and amortization for non-Real Estate Groups		10,914			691		7,391			—		17,614				—		—		—		—		—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted operating expenses		10,914			691		7,391			—		17,614				—		—		—		—		—
Retained interest and interest income — Stapleton		24,169			2,417		—			—		21,752				—		—		—		—		—
Add equity in earnings of unconsolidated entities		5,413			—		(4,189	)		—		1,224				—		—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—			—		—				—		—		—		—		—
Net operating income		40,490			3,231		278			—		37,537				—		—		—		—		—
Interest expense		2,136			134		278			—		2,280				—		—		—		—		—
Income tax expense (benefit)		8,418			—		—			—		8,418				—		—		—		—		—
Minority interest in earnings before depreciation and amortization		3,097			3,097		—			—		—				—		—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—				1,409		—		—		—		1,409
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	26,839		$	—	$	—		$	—	$	26,839			$	1,409	$	—	$	—	$	—	$	1,409
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	26,839		$	—	$	—		$	—	$	26,839			$	1,409	$	—	$	—	$	—	$	1,409
Depreciation and amortization — Real Estate Groups		(41	)		—		—			—		(41	)			—		—		—		—		—
Deferred taxes — Real Estate Groups		(5,558	)		—		—			—		(5,558	)			—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Gain on disposition of rental properties, net of tax		—			—		—			—		—				—		—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Gain on disposition of rental properties		—			—		—			—		—				—		—		—		—		—
Net earnings	$	21,240		$	—	$	—		$	—	$	21,240			$	1.409	$	—	$	—	$	—	$	1,409

34

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2004 (in thousands) (continued)

	The Nets 2004												Corporate Activities 2004
						Plus														Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata				Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at		Discontinued		Consolidation				Consolidation			Minority			Investments			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)				(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	66	$	—	$	66			$	9		$	—		$	—		$	—		$	9
Exclude straight-line rent adjustment		—			—		—		—		—				—			—			—			—			—
Adjusted revenues		—			—		66		—		66				9			—			—			—			9
Operating expenses, including depreciation and amortization for non-Real Estate Groups		—			—		1,540		—		1,540				9,562			—			—			—			9,562
Exclude straight-line rent adjustment		—			—		—		—		—				—			—			—			—			—
Adjusted operating expenses		—			—		1,540		—		1,540				9,562			—			—			—			9,562
Retained interest and interest income — Stapleton		—			—		—		—		—					—			—			—			—			—
Add equity in earnings of unconsolidated entities		(1,630	)		—		1,630		—		—				—			—			—			—			—
Add back equity method depreciation and amortization expense		—			—		—		—		—				—			—			—			—			—
Net operating income		(1,630	)		—		156		—		(1,474	)			(9,553	)		—			—			—			(9,553	)
Interest expense		—			—		156		—		156				9,472			—			—			—			9,472
Income tax expense (benefit)		(645	)		—		—		—		(645	)			(3,078	)		—			—			—			(3,078	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—				—			—			—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—				—			—			—			—			—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(15,947	)	$	—		$	—		$	—		$	(15,947	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(15,947	)	$	—		$	—		$	—		$	(15,947	)
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				—			—			—			—			—
Deferred Taxes — Real Estate Groups		—			—		—		—		—				4,359			—			—			—			4,359
Straight-line rent adjustment		—			—		—		—		—				—			—			—			—			—
Gain on disposition of rental properties, net of tax		—			—		—		—		—				—			—			—			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization – Real Estate Groups		—			—		—		—		—				—			—			—			—			—
Deferred Taxes – Real Estate Groups		—			—		—		—		—				—			—			—			—			—
Straight-line rent adjustment		—			—		—		—		—				—			—			—			—			—
Gain on disposition of rental properties		—			—		—		—		—				—			—			—			—			—
Net earnings	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(11,588	)	$	—		$	—		$	—		$	(11,588	)

35

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2004 (in thousands) (continued)

	Total 2004
						Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	256,108		$	28,027	$	67,604		$	4,101		$	299,786
Exclude straight-line rent adjustment		(4,915	)		—		—			(202	)		(5,117	)
Adjusted revenues		251,193			28,027		67,604			3,899			294,669
Operating expenses, including depreciation and amortization for non-Real Estate Groups		150,093			17,127		39,587			1,938			174,491
Exclude straight-line rent adjustment		(1,942	)		—		—			9			(1,933	)
Adjusted operating expenses		148,151			17,127		39,587			1,947			172,558
Retained interest and interest income — Stapleton		24,169			2,417		—			—			21,752
Add equity in earnings of unconsolidated entities		10,777			4		(8,582	)		—			2,191
Add back equity method depreciation and amortization expense		6,492			—		(6,492	)		—			—
Net operating income		144,480			13,321		12,943			1,952			146,054
Interest expense		67,771			6,391		12,943			1,338			75,661
Income tax expense (benefit)		(10,403	)		—		—			(380	)		(10,783	)
Minority interest in earnings before depreciation and amortization		6,930			6,930		—			—			—
Add: EBDT from discontinued operations		2,403			—		—			(994	)		1,409
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	82,585		$	—	$	—		$	—		$	82,585
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	82,585		$	—	$	—		$	—		$	82,585
Depreciation and amortization — Real Estate Groups		(44,467	)		—		—			(600	)		(45,067	)
Deferred taxes — Real Estate Groups		(21,889	)		—		—			(452	)		(22,341	)
Straight-line rent adjustment		2,973			—		—			211			3,184
Gain on disposition of rental properties, net of tax		—			—		—			18,979			18,979
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(600	)		—		—			600			—
Deferred taxes — Real Estate Groups		(452	)		—		—			452
Straight-line rent adjustment		211			—		—			(211	)		—
Gain on disposition of rental properties		18,979			—		—			(18,979	)		—
Net earnings	$	37,340		$	—	$	—		$	—		$	37,340

36

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2004 (in thousands)

	Commercial Group 2004														Residential Group 2004
						Plus															Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata				Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments			Discontinued			Consolidation				Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)				(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	539,120		$	93,034	$	76,417		$	6,232		$	528,735			$	151,477		$	10,940	$	88,455		$	10,521		$	239,513
Exclude straight-line rent adjustment		(10,200	)		—		—			(849	)		(11,049	)			148			—		—			—			148
Adjusted revenues		528,920			93,034		76,417			5,383			517,686				151,625			10,940		88,455			10,521			239,661
Operating expenses, including depreciation and amortization for non-Real Estate Groups		275,501			52,498		45,211			1,898			270,112				94,677			7,496		48,280			5,503			140,964
Exclude straight-line rent adjustment		(8,250	)		—		—			(5	)		(8,255	)			—			—		—			—			—
Adjusted operating expenses		267,251			52,498		45,211			1,893			261,857				94,677			7,496		48,280			5,503			140,964
Retained interest and interest income — Stapleton		—			—		—			—			—				—			—		—			—			—
Add equity in earnings of unconsolidated entities		40,014			—		(38,920	)		—			1,094				7,338			—		(6,719	)		—			619
Remove gain on disposition recorded on equity method		(31,996	)		—		31,996			—			—				—			—		—			—			—
Add back equity method depreciation and amortization expense		8,868			—		(8,868	)		—			—				12,212			—		(11,975	)		—			237
Net operating income		278,555			40,536		15,414			3,490			256,923				76,498			3,444		21,481			5,018			99,553
Interest expense		121,785			17,774		15,414			1,553			120,978				30,856			2,513		21,481			3,701			53,525
Income tax expense (benefit)		(4,708	)		—		—			(89	)		(4,797	)			(9,635	)		—		—			123			(9,512	)
Minority interest in earnings before depreciation and amortization		22,762			22,762		—			—			—				931			931		—			—			—
Add: EBDT from discontinued operations		2,026			—		—			(2,026	)		—				1,194			—		—			(1,194	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	140,742		$	—	$	—		$	—		$	140,742			$	55,540		$	—	$	—		$	—		$	55,540
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	140,742		$	—	$	—		$	—		$	140,742			$	55,540		$	—	$	—		$	—		$	55,540
Depreciation and amortization — Real Estate Groups		(93,763	)		—		—			(952	)		(94,715	)			(41,579	)		—		—			(1,686	)		(43,265	)
Deferred taxes — Real Estate Groups		(22,472	)		—		—			(746	)		(23,218	)			(10,118	)		—		—			270			(9,848	)
Straight-line rent adjustment		1,950			—		—			844			2,794				(148	)		—		—			—			(148	)
Gain (loss) on disposition of rental properties, net of tax		—			—		—			4,322			4,322				—			—		—			27,135			27,135
Gain on disposition recorded on equity method, net of tax		19,341			—		—			—			19,341				—			—		—			—			—
Cumulative effect of change in accounting principle, net of tax		(477	)		—		—			—			(477	)			(10,784	)		—		—			—			(10,784	)
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(952	)		—		—			952			—				(1,686	)		—		—			1,686			—
Deferred taxes — Real Estate Groups		(746	)		—		—			746			—				270			—		—			(270	)		—
Straight-line rent adjustment		844			—		—			(844	)		—				—			—		—			—			—
Loss on disposition of one division of Lumber Group		—			—		—			—			—				—			—		—			—			—
Gain on disposition of rental properties, net of tax		4,322			—		—			(4,322	)		—				27,135			—		—			(27,135	)		—
Net earnings	$	48,789		$	—	$	—		$	—		$	48,789			$	18,630		$	—	$	—		$	—		$	18,630

37

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2004 (in thousands) (continued)

	Land Development Group 2004													Lumber Group 2004
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments			Discontinued		Consolidation			Consolidation			Minority		Investments		Discontinued		Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		at Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	71,452		$	4,384	$	35,732		$	—	$	102,800		$	—		$	—	$	—	$	—	$	107,968
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Adjusted revenues		71,452			4,384		35,732			—		102,800			—			—		—		—		—
Operating expenses, including depreciation and amortization for non-Real Estate Groups		41,978			2,374		23,409			—		63,013			—			—		—		—		—
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Adjusted operating expenses		41,978			2,374		23,409			—		63,013			—			—		—		—		—
Retained interest and interest income — Stapleton		29,337			2,933		—			—		26,404			—			—		—		—		—
Add equity in earnings of unconsolidated entities		14,949			—		(11,652	)		—		3,297			—			—		—		—		—
Remove gain on disposition recorded on equity method		—			—		—			—		—			—			—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—			—		—			—			—		—		—		—
Net operating income		73,760			4,943		671			—		69,488			—			—		—		—		—
Interest expense		4,855			220		671			—		5,306			—			—		—		—		—
Income tax expense (benefit)		21,505			—		—			—		21,505			—			—		—		—		—
Minority interest in earnings before depreciation and amortization		4,723			4,723		—			—		—			—			—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—			5,764			—		—		—		5,764
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	42,677		$	—	$	—		$	—	$	42,677		$	5,764		$	—	$	—	$	—	$	5,764
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	42,677		$	—	$	—		$	—	$	42,677		$	5,764		$	—	$	—	$	—	$	5,764
Depreciation and amortization — Real Estate Groups		9			—		—			—		9			—			—		—		—		—
Deferred taxes — Real Estate Groups		(3,998	)		—		—			—		(3,998	)		—			—		—		—		—
Straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Gain (loss) on disposition of rental properties and division, net of tax		—			—		—			—		—			—			—		—		—		—
Gain on disposition recorded on equity method, net of tax		—			—		—			—		—			—			—		—		—		—
Cumulative effect of change in accounting principle, net of tax		—			—		—			—		—			—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Loss on disposition of one division of Lumber Group		—			—		—			—		—			(661	)		—		—		—		(661	)
Gain on disposition of rental properties		—			—		—			—		—			—			—		—		—		—
Net earnings	$	38,688		$	—	$	—		$	—	$	38,688		$	5,103		$	—	$	—	$	—	$	5,103

38

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2004 (in thousands) (continued)

	The Nets												Corporate Activities 2004
						Plus													Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata				Full			Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments		Discontinued		Consolidation				Consolidation			Minority		Investments		Discontinued		Consolidation
	(GAAP)			Interest		at Pro-Rata		Operations		(Non-GAAP)				(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	66	$	—	$	66			$	103		$	—	$	—	$	—	$	103
Exclude straight-line rent adjustment		—			—		—		—		—				—			—		—		—		—
Adjusted revenues		—			—		66		—		66				103			—		—		—		103
Operating expenses, including depreciation and amortization for non-Real Estate Groups		—			—		1,540		—		1,540				24,162			—		—		—		24,162
Exclude straight-line rent adjustment		—			—		—		—		—				—			—		—		—		—
Adjusted operating expenses		—			—		1,540		—		1,540				24,162			—		—		—		24,162
Retained interest and interest income — Stapleton		—			—		—		—		—				—			—		—		—		—
Add equity in earnings of unconsolidated entities		(1,630	)		—		1,630		—		—				—			—		—		—		—
Remove gain on disposition recorded on equity method		—			—		—		—		—				—			—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—		—		—				—			—		—		—		—
Net operating income		(1,630	)		—		156		—		(1,474	)			(24,059	)		—		—		—		(24,059	)
Interest expense		—			—		156		—		156				26,298			—		—		—		26,298
Income tax expense (benefit)		(645	)		—		—		—		(645	)			(15,320	)		—		—		—		(15,320	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—				—			—		—		—		—
Add: EBDT from discontinued operations		—			—		—		—		—				—			—		—		—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(35,037	)	$	—	$	—	$	—	$	(35,037	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(35,037	)	$	—	$	—	$	—	$	(35,037	)
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				—			—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—		—		—				4,178			—		—		—		4,178
Straight-line rent adjustment		—			—		—		—		—				—			—		—		—		—
Gain (loss) on disposition of rental properties and division, net of tax		—			—		—		—		—				—			—		—		—		—
Gain on disposition recorded on equity method, net of tax		—			—		—		—		—				—			—		—		—		—
Cumulative effect of change in accounting principle, net of tax		—			—		—		—		—				—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				—			—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—		—		—				—			—		—		—		—
Straight-line rent adjustment		—			—		—		—		—				—			—		—		—		—
Loss on disposition of one division of Lumber Group		—			—		—		—		—				—			—		—		—		—
Gain (loss) on disposition of rental properties and division, net of tax		—			—		—		—		—				—			—		—		—		—
Net earnings	$	(985	)	$	—	$	—	$	—	$	(985	)		$	(30,859	)	$	—	$	—	$	—	$	(30,859	)

39

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2004 (in thousands) (continued)

	Total 2004
						Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	762,152		$	108,358	$	200,670		$	16,753		$	871,217
Exclude straight-line rent adjustment		(10,052	)		—		—			(849	)		(10,901	)
Adjusted revenues		752,100			108,358		200,670			15,904			860,316
Operating expenses, including depreciation and amortization for non-Real Estate Groups		436,318			62,368		118,440			7,401			499,791
Exclude straight-line rent adjustment		(8,250	)		—		—			(5	)		(8,255	)
Adjusted operating expenses		428,068			62,368		118,440			7,396			491,536
Retained interest and interest income — Stapleton		29,337			2,933		—			—			26,404
Add equity in earnings of unconsolidated entities		60,671			—		(55,661	)		—			5,010
Remove gain on disposition recorded on equity method		(31,996	)		—		31,996			—			—
Add back equity method depreciation and amortization expense		21,080			—		(20,843	)		—			237
Net operating income		403,124			48,923		37,722			8,508			400,431
Interest expense		183,794			20,507		37,722			5,254			206,263
Income tax expense (benefit)		(8,803	)		—		—			34			(8,769	)
Minority interest in earnings before depreciation and amortization		28,416			28,416		—			—			—
Add: EBDT from discontinued operations		8,984			—		—			(3,220	)		5,764
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	208,701		$	—	$	—		$	—		$	208,701
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	208,701		$	—	$	—		$	—		$	208,701
Depreciation and amortization — Real Estate Groups		(135,333	)		—		—			(2,638	)		(137,971	)
Deferred taxes — Real Estate Groups		(32,410	)		—		—			(476	)		(32,886	)
Straight-line rent adjustment		1,802			—		—			844			2,646
Gain (loss) on disposition of rental properties		—			—		—			31,457			31,457
Gain on disposition recorded on equity method, net of tax		19,341			—		—			—			19,341
Cumulative effect of change in accounting principle, net of tax		(11,261	)		—		—			—			(11,261	)
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(2,638	)		—		—			2,638			—
Deferred taxes — Real Estate Groups		(476	)		—		—			476			—
Straight-line rent adjustment		844			—		—			(844	)		—
Gain on disposition of rental properties		31,457			—		—			(31,457	)		—
Loss on disposition of one division of Lumber Group		(661	)		—		—			—			(661	)
Net earnings	$	79,366		$	—	$	—		$	—		$	79,366

40

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2003 (in thousands)

	Commercial Group 2003														Residential Group 2003
						Plus														Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued			Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	153,074		$	32,021	$	36,963		$	2,456		$	160,472		$	33,124		$	1,657	$	22,154		$	4,374		$	57,995
Exclude straight-line rent adjustment		(3,701	)		—		—			(287	)		(3,988	)		(220	)		—		—			—			(220	)
Adjusted revenues		149,373			32,021		36,963			2,169			156,484			32,904			1,657		22,154			4,374			57,775
Operating expenses, including depreciation and amortization
for non-Real Estate Groups		79,052			18,549		20,403			784			81,690			18,511			1,258		11,850			2,792			31,895
Exclude straight-line rent adjustment		(1,547	)		—		—			(7	)		(1,554	)		—			—		—			—			—
Adjusted operating expenses		77,505			18,549		20,403			777			80,136			18,511			1,258		11,850			2,792			31,895
Add equity in earnings of unconsolidated entities		1,513			—		(1,520	)		—			(7	)		4,199			—		(1,718	)		—			2,481
Add back equity method depreciation and amortization expense		6,204			—		(6,204	)		—			—			3,209			—		(3,076	)		—			133
Net operating income		79,585			13,472		8,836			1,392			76,341			21,801			399		5,510			1,582			28,494
Interest expense		35,077			8,481		8,836			741			36,173			5,108			222		5,510			1,729			12,125
Income tax expense (benefit)		(213	)		—		—			(17	)		(230	)		(809	)		—		—			(283	)		(1,092	)
Minority interest in earnings before depreciation and amortization		4,991			4,991		—			—			—			177			177		—			—			—
Add: EBDT from discontinued operations		668			—		—			(668	)		—			136			—		—			(136	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	40,398		$	—	$	—		$	—		$	40,398		$	17,461		$	—	$	—		$	—		$	17,461
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	40,398		$	—	$	—		$	—		$	40,398		$	17,461		$	—	$	—		$	—		$	17,461
Depreciation and amortization — Real Estate Groups		(26,524	)		—		—			(374	)		(26,898	)		(7,435	)		—		—			(641	)		(8,076	)
Deferred taxes — Real Estate Groups		(7,367	)		—		—			(237	)		(7,604	)		(4,678	)		—		—			26			(4,652	)
Straight-line rent adjustment		2,154			—		—			280			2,434			220			—		—			—			220
Gain on disposition of rental properties, net of tax		—			—		—			—			—			—			—		—			3,844			3,844
Discontinued operations, net of tax:
Depreciation and amortization — Real Estate Groups		(374	)		—		—			374			—			(641	)		—		—			641			—
Deferred taxes — Real Estate Groups		(237	)		—		—			237			—			26			—		—			(26	)		—
Straight-line rent adjustment		280			—		—			(280	)		—			—			—		—			—			—
Gain on disposition of rental properties		—			—		—			—			—			3,844			—		—			(3,844	)		—
Net earnings	$	8,330		$	—	$	—		$	—		$	8,330		$	8,797		$	—	$	—		$	—		$	8,797

41

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2003 (in thousands) (continued)

	Land Development Group 2003													Lumber Group 2003
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata				Full		Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments			Discontinued		Consolidation				Consolidation		Minority		Investments		Discontinued		Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations		(Non-GAAP)				(GAAP)		Interest		at Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	49,734		$	1,802	$	8,380		$	—	$	56,312			$	—	$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted revenues		49,734			1,802		8,380			—		56,312				—		—		—		—		—
Operating expenses, including depreciation and amortization for non-Real Estate Groups		28,709			992		5,512			—		33,229				—		—		—		—		—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted operating expenses		28,709			992		5,512			—		33,229				—		—		—		—		—
Add equity in earnings of unconsolidated entities		5,721			—		(2,884	)		—		2,837				—		—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—			—		—				—		—		—		—		—
Net operating income		26,746			810		(16	)		—		25,920				—		—		—		—		—
Interest expense		806			—		(16	)		—		790				—		—		—		—		—
Income tax provision (benefit)		8,827			—		—			—		8,827				—		—		—		—		—
Minority interest in earnings before depreciation and amortization		810			810		—			—		—				—		—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—				2,070		—		—		—		2,070
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	16,303		$	—	$	—		$	—	$	16,303			$	2,070	$	—	$	—	$	—	$	2,070
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	16,303		$	—	$	—		$	—	$	16,303			$	2,070	$	—	$	—	$	—	$	2,070
Depreciation and amortization — Real Estate Groups		(18	)		—		—			—		(18	)			—		—		—		—		—
Deferred taxes — Real Estate Groups		(1,212	)		—		—			—		(1,212	)			—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Gain on disposition of rental properties, net of tax		—			—		—			—		—				—		—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Gain on disposition of rental properties		—			—		—			—		—				—		—		—		—		—
Net earnings	$	15,073		$	—	$	—		$	—	$	15,073			$	2,070	$	—	$	—	$	—	$	2,070

42

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended October 31, 2003 (in thousands) (continued)

	Corporate Activities 2003												Total 2003
						Plus													Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata				Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments		Discontinued		Consolidation				Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata		Operations		(Non-GAAP)				(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	111		$	—	$	—	$	—	$	111			$	236,043		$	35,480	$	67,497		$	6,830		$	274,890
Exclude straight-line rent adjustment		—			—		—		—		—				(3,921	)		—		—			(287	)		(4,208	)
Adjusted revenues		111			—		—		—		111				232,122			35,480		67,497			6,543			270,682
Operating expenses, including depreciation and amortization for non-Real Estate Groups		6,927			—		—		—		6,927				133,199			20,799		37,765			3,576			153,741
Exclude straight-line rent adjustment		—			—		—		—		—				(1,547	)		—		—			(7	)		(1,554	)
Adjusted operating expenses		6,927			—		—		—		6,927				131,652			20,799		37,765			3,569			152,187
Add equity in earnings of unconsolidated entities		—			—		—		—		—				11,433			—		(6,122	)		—			5,311
Add back equity method depreciation and amortization expense		—			—		—		—		—				9,413			—		(9,280	)		—			133
Net operating income		(6,816	)		—		—		—		(6,816	)			121,316			14,681		14,330			2,974			123,939
Interest expense		6,458			—		—		—		6,458				47,449			8,703		14,330			2,470			55,546
Income tax provision (benefit)		(6,938	)		—		—		—		(6,938	)			867			—		—			(300	)		567
Minority interest in earnings before depreciation and amortization		—			—		—		—		—				5,978			5,978		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—				2,874			—		—			(804	)		2,070
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(6,336	)	$	—	$	—	$	—	$	(6,336	)		$	69,896		$	—	$	—		$	—		$	69,896
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(6,336	)	$	—	$	—	$	—	$	(6,336	)		$	69,896		$	—	$	—		$	—		$	69,896
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				(33,977	)		—		—			(1,015	)		(34,992	)
Deferred taxes — Real Estate Groups		(1,962	)		—		—		—		(1,962	)			(15,219	)		—		—			(211	)		(15,430	)
Straight-line rent adjustment		—			—		—		—		—				2,374			—		—			280			2,654
Gain on disposition of rental properties, net of tax		—			—		—		—		—				—			—		—			3,844			3,844
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				(1,015	)		—		—			1,015			—
Deferred taxes — Real Estate Groups		—			—		—		—		—				(211	)		—		—			211			—
Straight-line rent adjustment		—			—		—		—		—				280			—		—			(280	)		—
Gain on disposition of rental properties		—			—		—		—		—				3,844			—		—			(3,844	)		—
Net earnings	$	(8,298	)	$	—	$	—	$	—	$	(8,298	)		$	25,972		$	—	$	—		$	—		$	25,972

43

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2003 (in thousands)

	Commercial Group 2003														Residential Group 2003
						Plus														Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments			Discontinued			Consolidation			Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)			(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	462,958		$	101,694	$	112,345		$	7,697		$	481,306		$	108,775		$	5,555	$	63,947		$	15,463		$	182,630
Exclude straight-line rent adjustment		(7,773	)		—		—			(854	)		(8,627	)		(363	)		—		—			—			(363	)
Adjusted revenues		455,185			101,694		112,345			6,843			472,679			108,412			5,555		63,947			15,463			182,267
Operating expenses, including depreciation and amortization for non-Real Estate Groups		246,320			59,036		62,099			2,189			251,572			58,270			4,291		34,789			8,933			97,701
Exclude straight-line rent adjustment		(3,784	)		—		—			(21	)		(3,805	)		—			—		—			—			—
Adjusted operating expenses		242,536			59,036		62,099			2,168			247,767			58,270			4,291		34,789			8,933			97,701
Add equity in earnings of unconsolidated entities		9,086			—		(10,176	)		—			(1,090	)		13,538			—		(3,408	)		—			10,130
Add back equity method depreciation and amortization expense		15,002			—		(15,002	)		—			—			8,894			—		(8,514	)		—			380
Net operating income		236,737			42,658		25,068			4,675			223,822			72,574			1,264		17,236			6,530			95,076
Interest expense		96,162			23,147		25,068			2,223			100,306			14,562			575		17,236			4,720			35,943
Income tax provision (benefit)		2,653			—		—			227			2,880			4,115			—		—			(203	)		3,912
Minority interest in earnings before depreciation and amortization		19,511			19,511		—			—			—			689			689		—			—			—
Add: EBDT from discontinued operations		2,225			—		—			(2,225	)		—			2,013			—		—			(2,013	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	120,636		$	—	$	—		$	—		$	120,636		$	55,221		$	—	$	—		$	—		$	55,221
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	120,636		$	—	$	—		$	—		$	120,636		$	55,221		$	—	$	—		$	—		$	55,221
Depreciation and amortization — Real Estate Groups		(73,904	)		—		—			(1,211	)		(75,115	)		(21,869	)		—		—			(2,193	)		(24,062	)
Deferred taxes — Real Estate Groups		(18,908	)		—		—			(592	)		(19,500	)		(10,373	)		—		—			(51	)		(10,424	)
Straight-line rent adjustment		3,989			—		—			833			4,822			363			—		—			—			363
Provision for decline in real estate, net of tax and minority interest		—			—		—			(467	)		(467	)		(982	)		—		—			—			(982	)
Gain (loss) on disposition of rental properties and other investments, net of tax		—			—		—			(64	)		(64	)		—			—		—			3,961			3,961
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(1,211	)		—		—			1,211			—			(2,193	)		—		—			2,193			—
Deferred taxes — Real Estate Groups		(592	)		—		—			592			—			(51	)		—		—			51			—
Straight-line rent adjustment		833			—		—			(833	)		—			—			—		—			—			—
Provision for decline in real estate, net of tax and minority interest		(467	)		—		—			467			—			—			—		—			—			—
Gain (loss) on disposition of rental properties		(64	)		—		—			64			—			3,961			—		—			(3,961	)		—
Net earnings	$	30,312		$	—	$	—		$	—		$	30,312		$	24,077		$	—	$	—		$	—		$	24,077

44

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2003 (in thousands) (continued)

	Land Development Group 2003													Lumber Group 2003
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata				Full		Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments			Discontinued		Consolidation				Consolidation		Minority		Investments		Discontinued		Consolidation
	(GAAP)			Interest		at Pro-Rata			Operations		(Non-GAAP)				(GAAP)		Interest		at Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	74,565		$	4,117	$	16,574		$	—	$	87,022			$	—	$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted revenues		74,565			4,117		16,574			—		87,022				—		—		—		—		—
Operating expenses, including depreciation and amortization for non-Real Estate Groups		43,896			2,189		10,867			—		52,574				—		—		—		—		—
Exclude straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Adjusted operating expenses		43,896			2,189		10,867			—		52,574				—		—		—		—		—
Add equity in earnings of unconsolidated entities		10,479			—		(5,222	)		—		5,257				—		—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—			—		—				—		—		—		—		—
Net operating income		41,148			1,928		485			—		39,705				—		—		—		—		—
Interest expense		2,233			—		485			—		2,718				—		—		—		—		—
Income tax provision (benefit)		11,788			—		—			—		11,788				—		—		—		—		—
Minority interest in earnings before depreciation and amortization		1,928			1,928		—			—		—				—		—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—				2,158		—		—		—		2,158
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	25,199		$	—	$	—		$	—	$	25,199			$	2,158	$	—	$	—	$	—	$	2,158
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	25,199		$	—	$	—		$	—	$	25,199			$	2,158	$	—	$	—	$	—	$	2,158
Depreciation and amortization – Real Estate Groups		(54	)		—		—			—		(54	)			—		—		—		—		—
Deferred taxes — Real Estate Groups		(2,948	)		—		—			—		(2,948	)			—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Provision for decline in real estate, net of tax and minority interest		—			—		—			—		—				—		—		—		—		—
Gain (loss) on disposition of rental properties and other investments, net of tax		—			—		—			—		—				—		—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization – Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Deferred taxes – Real Estate Groups		—			—		—			—		—				—		—		—		—		—
Straight-line rent adjustment		—			—		—			—		—				—		—		—		—		—
Provision for decline in real estate, net of tax and minority interest		—			—		—			—		—				—		—		—		—		—
Loss on disposition of rental properties		—			—		—			—		—				—		—		—		—		—
Net earnings	$	22,197		$	—	$	—		$	—	$	22,197			$	2,158	$	—	$	—	$	—	$	2,158

45

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Nine Months Ended October 31, 2003 (in thousands) (continued)

	Corporate Activities 2003												Total 2003
						Plus													Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata				Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments		Discontinued		Consolidation				Consolidation			Minority		Investments			Discontinued			Consolidation
	(GAAP)			Interest		at Pro-Rata		Operations		(Non-GAAP)				(GAAP)			Interest		at Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	411		$	—	$	—	$	—	$	411			$	646,709		$	111,366	$	192,866		$	23,160		$	751,369
Exclude straight-line rent adjustment		—			—		—		—		—				(8,136	)		—		—			(854	)		(8,990	)
Adjusted revenues		411			—		—		—		411				638,573			111,366		192,866			22,306			742,379
Operating expenses, including depreciation and amortization for non-Real Estate Groups		19,605			—		—		—		19,605				368,091			65,516		107,755			11,122			421,452
Exclude straight-line rent adjustment		—			—		—		—		—				(3,784	)		—		—			(21	)		(3,805	)
Adjusted operating expenses		19,605			—		—		—		19,605				364,307			65,516		107,755			11,101			417,647
Add equity in earnings of unconsolidated entities		—			—		—		—		—				33,103			—		(18,806	)		—			14,297
Add back equity method depreciation and amortization expense		—			—		—		—		—				23,896			—		(23,516	)		—			380
Net operating income		(19,194	)		—		—		—		(19,194	)			331,265			45,850		42,789			11,205			339,409
Interest expense		31,317			—		—		—		31,317				144,274			23,722		42,789			6,943			170,284
Income tax provision (benefit)		(18,878	)		—		—		—		(18,878	)			(322	)		—		—			24			(298	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—				22,128			22,128		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—				6,396			—		—			(4,238	)		2,158
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(31,633	)	$	—	$	—	$	—	$	(31,633	)		$	171,581		$	—	$	—		$	—		$	171,581
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(31,633	)	$	—	$	—	$	—	$	(31,633	)		$	171,581		$	—	$	—		$	—		$	171,581
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				(95,827	)		—		—			(3,404	)		(99,231	)
Deferred taxes — Real Estate Groups		517			—		—		—		517				(31,712	)		—		—			(643	)		(32,355	)
Straight-line rent adjustment		—			—		—		—		—				4,352			—		—			833			5,185
Provision for decline in real estate, net of tax and minority interest		—			—		—		—		—				(982	)		—		—			(467	)		(1,449	)
Gain (loss) on disposition of rental properties and other investments, net of tax		(261	)		—		—		—		(261	)			(261	)		—		—			3,897			3,636
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—				(3,404	)		—		—			3,404			—
Deferred taxes — Real Estate Groups		—			—		—		—		—				(643	)		—		—			643			—
Straight-line rent adjustment		—			—		—		—		—				833			—		—			(833	)		—
Provision for decline in real estate, net of tax and minority interest		—			—		—		—		—				(467	)		—		—			467			—
Gain on disposition of operating properties		—			—		—		—		—				3,897			—		—			(3,897	)		—
Net earnings	$	(31,377	)	$	—	$	—	$	—	$	(31,377	)		$	47,367		$	—	$	—		$	—		$	47,367

46