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Segment Information
 12 Months Ended
Jan. 31, 2012
Segment Information [Abstract]  
Segment Information

N.  Segment Information

The following tables summarize financial data for the Company’s five reportable segments. All amounts are presented in thousands.

 

                 
    January 31,  
    2012     2011  
   

 

 

  
    Identifiable Assets  
   

 

 

  

Commercial Group

     $     7,970,069       $ 8,617,287    

Residential Group

     2,022,135         2,825,527    

Land Development Group

     352,248         498,190    

The Nets (1)

     (3,836)        -    

Corporate Activities

     163,667         118,697    
   

 

 

  
      $     10,504,283       $ 12,059,701    
   

 

 

  

 

                                                 
    Years Ended January 31,     Years Ended January 31,  
    2012     2011     2010     2012     2011     2010  
    Revenues from Real Estate Operations     Operating Expenses  
             

Commercial Group

   $ 734,967     $ 849,291     $ 889,558     $     380,460     $     404,953     $     413,517  

Commercial Group Land Sales

     55,463       24,742       27,068       10,147       19,970       21,609  

Residential Group

     255,127       211,485       257,077       178,224       136,596       156,886  

Land Development Group

     44,420       32,131       20,267       47,543       38,650       33,119  

The Nets

     -       -       -       -       -       -  

Corporate Activities

     -       -       -       52,585       47,030       39,857  
    $ 1,089,977     $ 1,117,649     $ 1,193,970     $ 668,959     $ 647,199     $ 664,988  
               
    Depreciation and Amortization Expense     Interest Expense  
             

Commercial Group

   $ 163,170     $ 178,719     $ 195,071     $ 168,810     $ 221,642     $ 232,344  

Residential Group

     53,677       53,906       57,992       31,946       21,233       27,515  

Land Development Group

     240       334       830       3,443       3,007       2,109  

The Nets

     -       -       -       -       -       -  

Corporate Activities

     1,514       1,769       2,713       56,838       63,884       80,891  
    $ 218,601     $ 234,728     $ 256,606     $ 261,037     $ 309,766     $ 342,859  
               
    Interest and Other Income     Capital Expenditures  
             

Commercial Group

   $ 21,198     $ 23,384     $ 19,515     $ 604,737     $ 500,336     $ 552,241  

Residential Group

     19,816       19,830       23,673       154,475       222,712       390,088  

Land Development Group

     10,838       9,162       9,508       558       -       -  

The Nets

     -       -       -       -       -       -  

Corporate Activities

     262       442       1,249       611       110       280  
    $ 52,114     $ 52,818     $ 53,945     $ 760,381     $ 723,158     $ 942,609  

 

(1) The identifiable assets of $(3,836) at January 31, 2012 represent losses in excess of the Company’s investment basis in The Nets.

 

The Company uses a measure defined as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”) to report its operating results. EBDT is a non-GAAP measure and is defined as net earnings excluding the following items at the Company’s proportional share: i) gain (loss) on disposition of rental 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 for real estate depreciation, amortization, amortization of mortgage procurement costs: iv) deferred income taxes; v) preferred payment which is classified as noncontrolling interest expense in the Company’s Consolidated Statements of Operations; vi) impairment of real estate (net of tax); vii) extraordinary items (net of tax); viii) cumulative or retrospective effect of change in accounting principle (net of tax); and ix) revisions of prior period financial statements.

The Company believes that, although its business has many facets such as development, acquisitions, disposals and property management, the core of its business is the recurring operations of its portfolio of real estate assets. The Company’s Chief Executive Officer, the chief operating decision maker, uses EBDT, as presented, to assess performance of its portfolio of real estate assets by operating segment because it provides information on the financial performance of the core real estate portfolio operations. EBDT measures the profitability of a real estate segment’s operations of collecting rent, paying operating expenses and servicing its debt. The Company’s segments adhere to the accounting policies described in Note A.

Effective during the year ended January 31, 2012, under the direction of the Company’s chief operating decision maker, EBDT provided in order to assess performance for the Real Estate Groups and The Nets was on a pre-tax basis. The Corporate Activities segment controls tax strategies and evaluates results on a consolidated basis. As a result, beginning February 1, 2011, the Company no longer allocates income tax expense (benefit) to the Real Estate Groups or The Nets. In addition, based on the consolidated evaluation of income taxes, it was determined that EBDT would exclude all deferred income taxes instead of just those attributable to the Real Estate Groups. All amounts in the following table are presented in thousands:

(continued on next page)

 

Reconciliation of EBDT to Net Earnings (Loss) by Segment:

 

                                                 
Year Ended January 31, 2012   Commercial
Group		     Residential
Group		     Land
Development
Group		     The Nets     Corporate     Total  

EBDT

   $     325,063     $     100,924     $ 8,541     $ (26,814 )    $ (73,330 )    $ 334,384  

Depreciation and amortization – Real Estate Groups

     (198,063 )      (80,238 )      (249 )      -       -       (278,550 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (10,519 )      (3,506 )      (289 )      -       -       (14,314 ) 

Straight-line rent adjustment

     6,382       255       -       -       -       6,637  

Preference payment

     (1,732 )      -       -       -       -       (1,732 ) 

Gain on disposition of partial interests in rental properties

     15,410       2,255       -       -       -       17,665  

Gain on disposition of unconsolidated entities

     -       12,567       -       -       -       12,567  

Impairment of real estate

     (3,435 )      (235 )      (115,411 )      -       -       (119,081 ) 

Impairment of unconsolidated real estate

     (40,284 )      -       (41,902 )      -       -       (82,186 ) 

Allowance for projects under development revision (See note A)

     700       300       -       -       -       1,000  

Discontinued operations:

                                                

Depreciation and amortization – Real Estate Groups

     (3,154 )      -       -       -       -       (3,154 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (356 )      -       -       -       -       (356 ) 

Straight-line rent adjustment

     571       -       -       -       -       571  

Gain on disposition of rental properties

     51,796       -       -       -       -       51,796  

Impairment of real estate

     (10,257 )      -       -       -       -       (10,257 ) 

Income tax benefit (expense):

                                                

Deferred income taxes

     -       -       -       -       48,508       48,508  

Current income taxes attributable to above dispositions

     -       -       -       -       (49,984 )      (49,984 ) 

Net earnings (loss) attributable to Forest City Enterprises, Inc.

  $     132,122     $ 32,322     $ (149,310 )    $ (26,814 )    $ (74,806 )    $ (86,486 ) 

Preferred dividends

     -       -       -       -       (15,400 )      (15,400 ) 

Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders

  $     132,122     $ 32,322     $ (149,310 )    $ (26,814 )    $ (90,206 )    $ (101,886 ) 
Year Ended January 31, 2011                                          

EBDT

  $     277,480     $ 106,556     $     2,376     $       9,651     $ (86,188 )    $     309,875  

Depreciation and amortization – Real Estate Groups

     (199,640 )      (75,606 )      (264 )      -       -       (275,510 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (10,444 )      (2,568 )      (273 )      -       -       (13,285 ) 

Deferred taxes – Real Estate Groups

     (12,600 )      (3,002 )      (591 )      -       (19,095 )      (35,288 ) 

Straight-line rent adjustment

     15,851       522       (8 )      -       -       16,365  

Preference payment

     (2,341 )      -       -       -       -       (2,341 ) 

Gain on disposition of partial interests in rental properties, net of tax

     106,943       18,083       -       -       -       125,026  

Gain on disposition of unconsolidated entities, net of tax

     3,436       10,926       -       -       -       14,362  

Impairment of real estate, net of tax

     (964 )      -       (1,016 )      -       -       (1,980 ) 

Impairment of unconsolidated entities, net of tax

     (30,115 )      -       (13,817 )      -       -       (43,932 ) 

Allowance for projects under development revision (See note A)

     (700 )      (300 )      -       -       -       (1,000 ) 

Discontinued operations, net of tax:

                                                

Depreciation and amortization – Real Estate Groups

     (9,896 )      (636 )      -       -       -       (10,532 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (1,043 )      (13 )      -       -       -       (1,056 ) 

Deferred taxes – Real Estate Groups

     (2,069 )      (400 )      -       -       -       (2,469 ) 

Straight-line rent adjustment

     1,795       -       -       -       -       1,795  

Gain on disposition of rental properties

     26,899       1,099       -       -       -       27,998  

Impairment of real estate, net of tax

     (49,980 )      -       -       -       -       (49,980 ) 

Net earnings (loss) attributable to Forest City Enterprises, Inc.

  $     112,612     $ 54,661     $ (13,593 )    $ 9,651     $ (105,283 )    $ 58,048  

Preferred dividends

     -       -       -       -       (11,807 )      (11,807 ) 

Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders

  $     112,612     $ 54,661     $ (13,593 )    $ 9,651     $ (117,090 )    $ 46,241  
             
Year Ended January 31, 2010                                          

EBDT

  $     286,420     $ 122,769     $ 12,828     $ (28,674 )    $ (92,237 )    $ 301,106  

Depreciation and amortization – Real Estate Groups

     (201,660 )      (79,910 )      (387 )      -       -       (281,957 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (11,963 )      (2,627 )      (624 )      -       -       (15,214 ) 

Deferred taxes – Real Estate Groups

     (11,860 )      (12,010 )      (7,987 )      -       9,293       (22,564 ) 

Straight-line rent adjustment

     12,287       86       -       -       -       12,373  

Preference payment

     (2,341 )      -       -       -       -       (2,341 ) 

Gain on disposition of unconsolidated entities, net of tax

     -       30,462       -       -       -       30,462  

Impairment of real estate, net of tax

     (2,174 )      (897 )      (2,381 )      -       -       (5,452 ) 

Impairment of unconsolidated entities, net of tax

     (6,441 )      (14,877 )      (938 )      -       -       (22,256 ) 

Allowance for projects under development revision (See note A)

     4,200       1,800       -       -       -       6,000  

Discontinued operations, net of tax:

                                                

Depreciation and amortization – Real Estate Groups

     (9,038 )      (2,874 )      -       -       -       (11,912 ) 

Amortization of mortgage procurement costs – Real Estate Groups

     (293 )      (76 )      -       -       -       (369 ) 

Deferred taxes – Real Estate Groups

     (1,581 )      (874 )      -       -       -       (2,455 ) 

Straight-line rent adjustment

     869       -       -       -       -       869  

Gain on disposition of rental properties

     2,784       -       -       -       -       2,784  

Impairment of real estate, net of tax

     (8,067 )      (8,703 )      -       -       -       (16,770 ) 

Deferred gain on disposition of Lumber Group

     -       -       -       -       718       718  

Net earnings (loss) attributable to Forest City Enterprises, Inc.

  $     51,142     $ 32,269     $ 511     $ (28,674 )    $ (82,226 )    $ (26,978 )