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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended January 31,1999
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OR
[ ] TRANSITION REPORT R 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-4372
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FOREST CITY ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-0863886
- ---------------------------------------- --------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
1100 Terminal Tower
50 Public Square Cleveland, Ohio 44113
- --------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 216-621-6060
--------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ---------------------------------------- --------------------------
Class A Common Stock ($.33 1/3 par value) New York Stock Exchange
Class B Common Stock ($.33 1/3 par value) New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
On March 1, 1999 the aggregate market value of the voting stock held by
non-affiliates of the registrant amounted to $276,261,359 and $57,914,494 for
Class A and Class B common stock, respectively.
The number of shares of registrant's common stock outstanding on March 1, 1999
was 19,281,816 and 10,701,296 for Class A and Class B common stock,
respectively.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders for the fiscal year
ended January 31, 1999 (1998 Annual Report to Shareholders) are incorporated by
reference into Parts I and II of this Form 10-K. Portions of the Proxy Statement
for the Annual Meeting of Shareholders to be held June 8, 1999 are incorporated
by reference into Part III of this Form 10-K.
FOREST CITY ENTERPRISES, INC.
ANNUAL REPORT ON FORM 10-K
JANUARY 31, 1999
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business 2
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
Item 4A. Executive Officers of the Registrant 6
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 8
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 8
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure 11
PART III
Item 10 Directors and Executive Officers of the Registrant 12
Item 11 Executive Compensation 12
Item 12. Security Ownership of Certain Beneficial Owners and
Management 12
Item 13. Certain Relationships and Related Transactions 12
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K 13
Signatures 25
PART I
Item 1. Business
Founded 79 years ago and publicly traded since 1960, Forest City
Enterprises, Inc. (with its Subsidiaries, the "Company" or "Forest City") owns,
develops, acquires and manages commercial and residential real estate projects
in 21 states and the District of Columbia. At January 31, 1999, the Company had
$3.4 billion in consolidated assets, of which approximately $3.1 billion was
invested in real estate.
The Company is organized into four principal business groups:
* The Commercial Group, which owns, develops, acquires and operates
shopping centers, office buildings and mixed-use projects
including hotels.
* The Residential Group, which develops, acquires, owns and
operates the Company's multi-family properties.
* The Land Group, which owns and develops raw land into master
planned communities and other residential developments for
resale.
* The Lumber Trading Group, which operates the Company's lumber
wholesaling business.
Each group operates autonomously and both the Commercial Group and the
Residential Group have separate development, acquisition, leasing, property and
financial management functions. As a result, each of these groups is able to
perform all of the tasks necessary to develop and maintain a property from
selecting a project site to financing the project to managing the completed
project. The Company's "Corporate" Activities relate to general corporate items.
Commercial Group
The Company has developed retail projects for more than 50 years and
office, mixed-use and hotel projects for more than 30 years. Today, the
Commercial Group owns a diverse portfolio in both urban and suburban locations
in 12 states. The Commercial Group targets densely populated locations where it
uses its expertise to develop complex projects, often employing public/private
partnerships. As of January 31, 1999, the Commercial Group owned interests in 65
completed projects, including 35 retail properties, 23 office properties and
seven hotels.
The Company opened its first strip shopping center in 1948, and its first
enclosed regional mall in 1962. Since then, it has developed urban retail
centers, entertainment based centers, community centers and power centers
focused on "big box" retailing (collectively, "Specialty Retail Centers"), as
well as regional malls. As of January 31, 1999, the Commercial Group's existing
shopping center portfolio consisted of 13 regional malls with a total GLA of
3.9 million square feet and 22 Specialty Retail Centers with a total GLA of 4.3
million square feet.
Malls are generally developed in collaboration with anchor stores that
usually own their own facilities as integral parts of the mall structure and
environment and which do not generate significant direct payments to the
Company. In contrast, anchor stores at specialty retail and power centers
generally are tenants under long-term leases which contribute significant rental
payments to the Company.
Item 1. Business (continued)
While the Company continues to develop regional malls in strong markets,
the Company recently has pioneered the concept of bringing "big box" retailing
to urban locations previously ignored by major retailers. With high population
densities and disposable income levels at or near those of the suburbs, urban
development is proving to be economically advantageous for the Company, for the
tenants who realize high sales per square foot and for the cities, which benefit
from the new jobs created in the urban locations.
At January 31, 1999, the Company's operating portfolio of office/mixed-use
and hotel projects consists of 23 office buildings containing 6.9 million square
feet, including mixed-use projects with an aggregate of 259,000 gross leasable
square feet of retail space and seven hotels with 2,032 rooms.
In its office development activities, Forest City is primarily a
build-to-suit developer which works with tenants to meet their highly
specialized requirements. The Company's office development has focused primarily
on mixed-use projects in urban developments, often built in conjunction with
hotels and shopping centers or as part of a major office campus. As a result of
this focus on new urban developments, 50% of the Company's office buildings were
built within the last eight years and are concentrated in four new urban
developments located in Brooklyn, New York, Cleveland, Ohio, Cambridge,
Massachusetts and Pittsburgh, Pennsylvania.
Residential Group
The Company's Residential Group develops, acquires, owns, leases and
manages residential rental property in 16 states and the District of Columbia.
The Company has been engaged in apartment community development for over 50
years beginning in northeast Ohio and gradually expanding nationally. Its
portfolio includes mature middle-market apartments in geographically attractive
suburbs, newer and higher end apartments in unique urban locations and newer
apartments in the suburbs. The Residential Group, which focuses on large
apartment complexes, does not develop or operate single-family housing or
condominium projects.
At January 31, 1999, the Residential Group's operating portfolio consists
of 33,692 units in 114 properties in which Forest City has an ownership
interest, including 7,695 units of syndicated senior citizen subsidized housing
in 45 buildings that the Company manages and in which it owns a residual
interest.
Land Group
The Company has been in the land business since the 1930's. The Land Group
acquires and sells both raw land and developed lots to residential, commercial
and industrial customers. The Land Group projects attract national, regional and
local builders. The Land Group develops raw land into master planned
communities, mixed-use and other residential developments and currently owns
more than 5,400 acres of undeveloped land for this purpose. The Company
currently has major land development projects in seven states.
Historically, the Land Group's activities focused on land development
projects in northeast Ohio. Over time, the Group's activities expanded to
larger, more complex projects, and regional expansion into western New York
State. In the last ten years, the Group has extended its activities on a
national basis, first in Arizona, and more recently in North Carolina, Florida,
Nevada and Colorado.
In addition to the sales activities of the Land Group, the Company also
sells land acquired by its Commercial Group and Residential Group adjacent to
their respective projects. Proceeds from such land sales are included in the
revenues of such Groups.
Item 1. Business (continued)
Forest City Trading Group
The Company's original business was selling lumber to homebuilders. The
Company expanded this business in 1969 through its acquisition of Forest City
Trading Group, Inc., which is a lumber wholesaler to customers in all 50 states
and all Canadian provinces. Through 11 strategically located trading offices in
the United States and Canada, employing over 300 traders, Forest City sold the
equivalent of eight billion board feet of lumber in 1998, with a gross sales
volume of nearly $3 billion, making the Company one of the largest lumber
wholesalers in North America.
The Lumber Trading Group currently has offices in nine states and
Vancouver, British Columbia. The Company opens offices in response to the
changing demands of the lumber industry.
The Lumber Trading Group's core business is supplying lumber for new home
construction and to the repair and remodeling markets. Approximately 65% of the
Lumber Trading Group's sales for 1998 involve back-to-back trades in which the
Company brings together a buyer and seller for an immediate purchase and sale.
The balance of transactions are trades in which the Company takes a short-term
ownership position and is at risk for lumber market fluctuations. This risk,
however, is reduced by the implementation of our lumber hedging strategy.
Competition
The real estate industry is highly competitive in all major markets. With
regard to the Commercial and Residential Groups, there are numerous other
developers, managers and owners of commercial and residential real estate that
compete with the Company nationally, regionally and/or locally in seeking
management and leasing revenues, land for development, properties for
acquisition and disposition and tenants for properties, some of whom may have
greater financial resources than the Company. There can be no assurance that the
Company will successfully compete for new projects or have the ability to react
to competitive pressures on existing projects caused by factors such as
declining occupancy rates or rental rates. In addition, tenants at the Company's
retail properties face continued competition in attracting customers from
retailers at other shopping centers, catalogue companies, warehouse stores,
large discounters, outlet malls, wholesale clubs and direct mail and
telemarketers. The existence of competing developers, managers and owners and
competition to the Company's tenants could have a material adverse effect on the
Company's ability to lease space in its properties and on the rents charged or
concessions granted, could materially and adversely affect the Company's results
of operations and cash flows, and could affect the realizable value of assets
upon sale.
With regard to the Lumber Trading Group, the lumber wholesaling business is
highly competitive. Competitors in the lumber brokerage business include
numerous brokers and in-house sales departments of lumber manufacturers, many of
which are larger and have greater resources than the Company.
Forest City was incorporated in Ohio in 1960 as a successor to a business
started in 1921.
Number of Employees
The Company had 3,860 employees as of January 31,1999, of which 2,871 were
full-time and 989 were part-time.
Segments of Business
Financial information about industry segments required by this item is
incorporated by reference to Note K "Segment Information" which appears on page
36 of the 1998 Annual Report to Shareholders.
Item 2. Properties
The Corporate headquarters of Forest City Enterprises, Inc. is located in
Cleveland, Ohio and is owned by the Company. Regional offices are located in New
York, Los Angeles, Boston, Tucson, Washington, D. C., Denver, and San Francisco.
Forest City Trading Group, Inc. maintains its headquarters in Portland, Oregon.
It has seven other offices and one processing plant located in Oregon, nine
additional offices in eight other states and one sales office in Canada.
The "Forest City Rental Properties Corporation Portfolio of Real Estate,"
presented on pages 22 and 23 of the 1998 Annual Report to Shareholders, lists
the shopping centers, office buildings, hotels and apartments in which Forest
City Rental Properties Corporation has an interest and is incorporated herein by
reference.
Item 3. Legal Proceedings
An action was filed in August 1997 against Forest City Trading Group, Inc.
(a wholly-owned subsidiary of the Company) and 10 of its subsidiaries, all of
which are in the business of trading lumber. The complaint alleged improper
calculation and underpayment of commissions and other related claims. On
September 11, 1998 Plaintiffs filed a Motion for Class Certification. On
December 8, 1998 the court posted an order denying class certification. On April
5, 1999 the original four Plaintiffs filed a notice of dismissal of this lawsuit
without prejudice in state court. On April 16, 1999, the case was re-filed in
Federal court against Forest City Trading Group, Inc. and four of its
subsidiaries. The Defendants will vigorously defend the allegations. This
litigation is not expected to have a material adverse effect upon the financial
condition, results of operations or cash flows of the Company.
The Company, through subsidiaries, owns a 14.6% interest in the Seven Hills
housing development, located in Henderson, Nevada, which is owned by the Silver
Canyon Partnership and is being developed in conjunction with a golf course. In
August 1997, a class-action lawsuit was filed by the current homeowners in Seven
Hills against the Silver Canyon Partnership, the golf course developers and
other entities, including the Company. In addition, separate lawsuits were filed
by some of the production homebuilding companies at Seven Hills, against some of
the same parties, not including the Company. Each of these lawsuits sought a
commitment for public play on the golf course, as well as damages and, in
October 1998, the court granted play rights. In February 1999 the owner of the
golf course filed a cross-claim against the Silver Canyon Partnership and the
Company. Sales efforts are continuing at the Seven Hills development, and
because these events are recent, it is not yet possible to determine the extent
of any impact on the Partnership's financial performance. The Company believes
that any exposure will be limited to the Silver Canyon Partnership and is not
expected to have a material adverse effect upon the financial condition, results
of operations or cash flows of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter.
Item 4 (A). Executive Officers of the Registrant
The following list is included as an unnumbered Item in Part I of this
Report in lieu of being included in the Proxy Statement for the Annual Meeting
of Shareholders to be held on June 8, 1999.
The names, ages and positions held by the executive officers of the Company
are presented in the following list. Each individual has been appointed to serve
for the period which ends with the Annual Meeting of Shareholders scheduled for
June 8, 1999.
Date
Name and Position(s) Held Appointed Age
- --------------------------------------------- --------- ---
Albert B. Ratner
Co-Chairman of the Board of Directors of
the Company since June 1995, Vice Chairman
of the Board of the Company from June 1993
to June 1995, Chief Executive Officer prior
to July 1995 and President prior to July 1993. 6-13-95 71
Samuel H. Miller
Co-Chairman of the Board of Directors of
the Company since June 1995, Chairman of the
Board of the Company from June 1993 to June
1995 and Vice Chairman of the Board, Chief
Operating Officer of the Company prior to June 1993,
Treasurer of the Company since December 1992. 6-13-95 77
Nathan Shafran
Honorary Vice Chairman of the Board of Directors
since June 1997, Vice Chairman of the Board of
Directors of the Company prior to June 1997. 3-11-87 85
Charles A. Ratner
President of the Company since June 1993,
Chief Executive Officer of the Company since
June 1995, Chief Operating Officer from June
1993 to June 1995 and Executive Vice
President prior to June 1993, Director. 6-13-95 57
James A. Ratner
Executive Vice President, Director, Officer
of various subsidiary corporations. 3-09-88 54
Ronald A. Ratner
Executive Vice President, Director, Officer
of various subsidiary corporations. 3-09-88 52
Thomas G. Smith
Senior Vice President, Chief Financial Officer,
Secretary, Officer of various subsidiary corporations. 9-03-85 58
William M. Warren
Senior Vice President, General Counsel and
Assistant Secretary. 5-16-72 70
Item 4 (A). Executive Officers of the Registrant (continued)
Date
Name and Position(s) Held Appointed Age
- ---------------------------------------------- --------- ---
Brian J. Ratner
Senior Vice President--East Coast Development
since January 1997, Vice President--Urban
Entertainment from June 1995 to December 1996,
Vice President from May 1994 to June 1995
and an officer of various subsidiaries. 1-01-97 41
Linda M. Kane
Vice President and Corporate Controller since
April 1995, Asset Manager--Commercial Group
from July 1992 to April 1995 and Financial
Manager--Residential Group from October 1990
to July 1992. 4-01-95 41
Note: Nathan Shafran is the uncle of Charles A. Ratner, James A. Ratner and
Ronald A. Ratner, who are brothers, and is the uncle of Albert B.
Ratner. Albert B. Ratner is the father of Brian J. Ratner and Deborah
Ratner Salzberg and is first cousin to Charles A. Ratner, James A.
Ratner and Ronald A. Ratner.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Information required by this item is incorporated by reference to
"Quarterly Consolidated Financial Data (Unaudited)" which appears on page 42 of
the 1998 Annual Report to Shareholders.
Item 6. Selected Financial Data
The information required by this item is incorporated by reference to
"Selected Financial Data" on page 24 of the 1998 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information required by this item is incorporated by reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 43 through 51 of the 1998 Annual Report to Shareholders.
Item 7 (A). Quantitative and Qualitative Disclosures About Market Risk
The Company's primary market risk exposure is interest rate risk. At
January 31, 1999, the Company had approximately $633,400,000 of variable-rate
debt outstanding. Additionally, the Company has interest rate risk associated
with fixed-rate debt at maturity.
To reduce the effects of significant increases in interest rates on the
amounts payable with respect to the Company's variable-rate debt, the Company
makes use of interest rate exchange agreements, including interest rate caps and
swaps, primarily to manage interest rate risk associated with variable-rate
debt. The Company had purchased London Interbank Offered Rate ("LIBOR") interest
rate caps as follows.
Cap
Strike Principal
Rate Period Outstanding
---- ------------------- ------------
6.50% 02/01/99 - 01/31/00 $394,503,000
6.50% 02/01/00 - 01/31/01 457,613,000
6.50% 02/01/01 - 07/31/01 362,577,000
7.00% 08/01/01 - 02/01/02 362,577,000
6.75% 09/01/00 - 09/01/03 79,929,000
The Company intends to convert a significant portion of its committed
variable-rate debt to fixed-rate debt. In addition, to reduce the effect of
upward fluctuations in future interest rates, the Company has purchased 10-year
Treasury Options at a strike rate of 6.00% in the amounts of $170,850,000,
$41,252,000 and $38,677,000 with the exercise dates of February 2000, April 2001
and August 2001, respectively.
Item 7 (A). Quantitative and Qualitative Disclosures About Market Risk
(continued)
At January 31, 1999, the Company had $105,000,000 outstanding under its
$225,000,000 revolving credit facility, which bears interest at LIBOR plus 2%.
The Company has entered into a one-year 5.125% LIBOR option expiring January 3,
2000 on $75,000,000 for its revolving credit line. Additionally, the Company has
purchased a 6.50% LIBOR interest rate cap for 2000 and an average 6.75% LIBOR
interest rate cap for 2001 at notional amounts of $42,387,000 and $37,423,000,
respectively.
At January 31, 1999, the Company estimates that a 100 basis point decrease
in market interest rates would have changed the fair value of fixed-rate debt at
that date of $1,836,321,000 to a liability of approximately $1,953,000,000. The
sensitivity to changes in interest rates of the Company's fixed-rate debt was
determined with a valuation model based upon changes that measure the net
present value of such obligation which arise from the hypothetical estimate as
discussed above. The Company intends to monitor and manage interest costs on its
variable debt portfolio and may enter into swap positions based on market
fluctuations.
The table below provides information about the Company's financial
instruments that are sensitive to changes in interest rates. For debt
obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates.
Expected Maturity Date
----------------------------------------------------------------
Long-Term Debt 1999 2000 2001 2002
- --------------------------------------------------- ------------- --------------- ---------------
Fixed:
Fixed rate debt (1) $ 161,922,344 $ 93,540,672 $ 82,559,907 $ 55,709,175
Weighted average interest rate 7.60% 8.10% 8.27% 7.66%
UDAG (1) 49,561 1,033,055 10,481,224 541,722
Weighted average interest rate 6.96% 0.35% 7.99% 7.73%
Senior notes - - - -
Weighted average interest rate
---------------- --------------- --------------- ---------------
Total Fixed Rate Debt 161,971,905 94,573,727 93,041,131 56,250,897
---------------- --------------- --------------- ---------------
Variable:
Variable rate debt (1) (2) 86,303,633 121,648,500 17,302,492 89,540,811
Weighted average interest rate
Tax exempt (1) 1,175,000 55,980,001 32,156,689 -
Weighted average interest rate
Revolving credit facility - 105,000,000 - -
Weighted average interest rate
------------- --------------- --------------- ---------------
Total Variable Rate Debt 87,478,633 282,628,501 49,459,181 89,540,811
------------- --------------- --------------- ---------------
Total Long-Term Debt $ 249,450,538 $ 377,202,228 $ 142,500,312 $ 145,791,708
============= =============== =============== ===============
Expected Maturity Date Total Fair Market
---------------------------- Outstanding Value
Long-Term Debt 2003 Thereafter 1/31/99 1/31/99
- --------------------------------------------------- --------------- --------------- ---------------
Fixed:
Fixed rate debt (1) $ 85,395,730 $ 1,096,603,124 $ 1,575,730,952 $ 1,590,449,430
Weighted average interest rate 8.32% 7.44% 7.59%
UDAG (1) 163,085 57,489,122 69,757,769 44,871,490
Weighted average interest rate 2.78% 1.57% 2.57%
Senior notes - 200,000,000 200,000,000 201,000,000
Weighted average interest rate 8.50% 8.50%
------------- --------------- --------------- ---------------
Total Fixed Rate Debt 85,558,815 1,354,092,246 1,845,488,721 1,836,320,920
------------- --------------- --------------- ---------------
Variable:
Variable rate debt (1) (2) 33,814,478 25,354,127 373,964,041 373,964,041
Weighted average interest rate 7.09%
Tax exempt (1) - 65,107,999 154,419,689 154,419,689
Weighted average interest rate 3.66%
Revolving credit facility - - 105,000,000 105,000,000
Weighted average interest rate 7.13%
------------- --------------- --------------- ---------------
Total Variable Rate Debt 33,814,478 90,462,126 633,383,730 633,383,730
------------- --------------- --------------- ---------------
Total Long-Term Debt $ 119,373,293 $ 1,444,554,372 2,478,872,451 $ 2,469,704,650
============= =============== =============== ===============
(1) Represents nonrecourse debt.
(2) As of January 31, 1999, $219,003,000 of variable-rate debt has been
hedged via $133,479,000 of 1-year LIBOR contracts and $85,524,000 of
LIBOR-based swaps that have a combined remaining average life of 0.65
years.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data required by this item are
incorporated by reference to "Report of Independent Accountants," "Consolidated
Financial Statements," "Notes to Consolidated Financial Statements" and
"Quarterly Consolidated Financial Data (Unaudited)" located on pages 25 through
42 of the 1998 Annual Report to Shareholders.
Financial Statement Schedule II, "Valuation and Qualifying Accounts" and
Schedule III, "Real Estate and Accumulated Depreciation" are included in Part
IV, Item 14(d).
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
(a) Identification of Directors is contained in a definitive proxy
statement which the registrant anticipates will be filed by May 3,
1999 and is incorporated herein by reference.
(b) Pursuant to General Instruction G of Form 10-K and Item 401(b) of
Regulation S-K, Executive Officers of the Registrant are reported in
Part I of this Form 10-K.
(c) The disclosure of delinquent filers, if any, under Section 16(a) of
the Securities Exchange Act of 1934 is contained in a definitive proxy
statement which the registrant anticipates will be filed by May 3,
1999 and is incorporated herein by reference.
Item 11. Executive Compensation; Item 12. Security Ownership of Certain
Beneficial Owners and Management; and Item 13. Certain Relationships and Related
Transactions
Information required under these sections is contained in a definitive
proxy statement which the registrant anticipates will be filed by May 3, 1999
and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) List of documents filed as part of this report.
1. The following financial statements and supplementary data
included in the 1998 Annual Report to Shareholders are
incorporated by reference in Part II, Item 8.
Report of Independent Accountants
Consolidated Balance Sheets - January 31, 1999 and 1998
Consolidated Statements of Earnings for the three years ended
January 31, 1999
Consolidated Statements of Shareholders' Equity for the three
years ended January 31, 1999
Consolidated Statements of Cash Flows for the three years ended
January 31, 1999
Notes to Consolidated Financial Statements
Quarterly Consolidated Financial Data (Unaudited)
Individual financial statements of 50% or less owned persons
accounted for by the equity method have been omitted because such
50% or less owned persons considered in the aggregate as a single
subsidiary would not constitute a significant subsidiary.
2. Financial statement schedules required by Part II, Item 8 are
included in Part IV, Item 14(d):
Page No.
Schedule II - Valuation and Qualifying Accounts
for the years ended January 31, 1999, 1998 and 1997 21
Schedule III - Real Estate and Accumulated Depreciation
at January 31, 1999 with reconciliations for the years
ended January 31, 1999, 1998 and 1997 22-23
The report of the independent accountants with respect to the
above listed financial statement schedules appears on page 20.
Schedules other than those listed above are omitted for the reason
that they are not required or are not applicable, or the required
information is shown in the consolidated financial statements or notes
thereto. Columns omitted from schedules filed have been omitted
because the information is not applicable.
3. Exhibits - see (c) below.
(b) Reports on Form 8-K filed during the three months ended January
31, 1999: None.
(c) Exhibits.
Exhibit
Number Description of Document
3.1 Amended Articles of Incorporation adopted as of October
11, 1983, incorporated by reference to Exhibit 3.1 to
the Company's Form 10-Q for the quarter ended October
31, 1983 (File No. 1-4372).
3.2 Code of Regulations as amended June 14, 1994,
incorporated by reference to Exhibit 3.2 to the
Company's Form 10-K for the fiscal year ended January
31, 1997 (File No.1-4372).
Exhibit
Number Description of Document
3.3 Certificate of Amendment by Shareholders to the
Articles of Incorporation of Forest City Enterprises,
Inc. dated June 24, 1997, incorporated by reference to
Exhibit 4.14 to the Company's Registration Statement on
Form S-3 (Registration No. 333-41437).
3.4 Certificate of Amendment by Shareholders to the
Articles of Incorporation of Forest City Enterprises,
Inc. dated June 16, 1998, incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on
Form S-8 (Registration No. 333-61925).
4.1 Form of Senior Subordinated Indenture between the
Company and National City Bank, as Trustee thereunder,
incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3
(Registration No. 333-22695).
4.2 Form of Junior Subordinated Indenture between the
Company and National City Bank, as Trustee thereunder,
incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3
(Registration No. 333-22695).
4.3 Form of Senior Subordinated Indenture between the
Company and The Bank of New York, as Trustee
thereunder, incorporated by reference to Exhibit 4.22
to the Company's Registration Statement on Form S-3
(Registration No. 333-41437).
10.1 Credit Agreement, dated as of December 10, 1997, by and
among Forest City Rental Properties Corporation, the
banks named therein, KeyBank National Association, as
administrative agent, and National City Bank, as
syndication agent, incorporated by reference to Exhibit
10.38 to the Company's Form 10-Q for the quarter ended
October 31, 1997 (File No. 1-4372).
10.2 Guaranty of Payment of Debt, dated as of December 10,
1997, by and among Forest City Enterprises, Inc., the
banks named therein, KeyBank National Association, as
administrative agent, and National City Bank, as
syndication agent, incorporated by reference to Exhibit
10.39 the Company's Form 10-Q for the quarter ended
October 31, 1997 (File No. 1-4372).
10.3 First Amendment to Credit Agreement, dated as of
January 20, 1998, by and among Forest City Rental
Properties Corporation, the banks named therein,
KeyBank National Association, as administrative agent,
and National City Bank, as syndication agent,
incorporated by reference to Exhibit 4.19 to the
Company's Registration Statement on Form S-3 (File No.
333-41437).
10.4 First Amendment to Guaranty of Payment of Debt, dated
as of the banks named therein, KeyBank National
Association, as administrative agent, and National City
Bank, as syndication agent, incorporated by reference
to Exhibit 4.20 to the Company's Registration Statement
on Form S-3 (File No. 333-41437).
Exhibit
Number Description of Document
10.5 Letter Agreement, dated as of February 25, 1998, by and
among Forest City Enterprises, Inc., Forest City Rental
Properties Corporation, the banks named therein,
KeyBank National Association, as administrative agent,
and National City Bank, as syndication agent,
incorporated by reference to Exhibit 4.21 to the
Company's Registration Statement on Form S-3 (File No.
333-41437).
10.6 Second Amendment to Credit Agreement, dated as of March
6, 1998, by and among Forest City Rental Properties
Corporation, the banks named therein, KeyBank National
Association, as administrative agent, and National City
Bank, as syndication agent, incorporated by reference
to Exhibit 10.1 to the Company's Form 8-K, dated March
6, 1998 (File No. 1-4372).
10.7 Second Amendment to Guaranty of Payment of Debt, dated
as of March 6, 1998, by and among Forest City
Enterprises, Inc., the banks named therein, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 10.2 to the Company's Form 8-K,
dated March 6, 1998 (File No. 1-4372).
10.8 Stock Purchase Agreement, dated May 7, 1997, between
Forest City Enterprises, Inc. and Richard Miller, Aaron
Miller and Gabrielle Miller, incorporated by reference
to Exhibit 10.34 to the Company's Form 10-Q for the
quarter ended April 30, 1997 (File No. 1-4372).
10.9 Letter Agreement, dated August 14, 1997, adjusting the
interest rate in the Stock Purchase Agreement, dated
May 7, 1997, between Forest City Enterprises, Inc. and
Richard Miller, Aaron Miller and Gabrielle Miller,
incorporated by reference to Exhibit 10.35 to the
Company's Form 10-Q for the quarter ended July 31, 1997
(File No. 1-4372).
10.10 Supplemental Unfunded Deferred Compensation Plan for
Executives, incorporated by reference to Exhibit 10.9
to the Company's Form 10-K for the year ended January
31, 1997 (File No. 1-4372).
10.11 Deferred Compensation Agreement between Forest City
Enterprises, Inc. and Thomas G. Smith, dated December
27, 1995, incorporated by reference to Exhibit 10.33 to
the Company's Form 10-K for the year ended January 31,
1997 (File No. 1-4372).
10.12 1994 Stock Option Plan, including forms of Incentive
Stock Option Agreement and Nonqualified Stock Option
Agreement, incorporated by reference to Exhibit 10.10
to the Company's Form 10-K for the year ended January
31, 1997 (File No. 1-4372).
10.13 Employment Agreement entered into as of September 25,
1989 by the Company and Albert B. Ratner, incorporated
by reference to Exhibit 10.11 to the Company's Form
10-K for the year ended January 31, 1997 (File No.
1-4372).
Exhibit
Number Description of Document
10.14 First Amendment to Employment Agreement entered into as
of December 6, 1996 by the Company and Albert B.
Ratner, incorporated by reference to Exhibit 10.12 to
the Company's Form 10-K for the year ended January 31,
1997 (File No. 1-4372).
10.15 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Samuel H. Miller, incorporated by reference to Exhibit
10.15 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.16 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Charles A. Ratner, incorporated by reference to Exhibit
10.16 to the Form 10-K for the year ended January 31,
1998 (File No.1-4372).
10.17 First Amendment to Employment Agreement (dated April 6,
1998) entered into as of April 24, 1998 by the Company
and Charles A. Ratner, incorporated by reference to
Exhibit 10.17 to the Company's Form 10-K for the year
ended January 31, 1998 (File No. 1-4372).
10.18 First Amendment to Employment Agreement (dated December
6, 1996 and superseded by Employment Agreement dated
April 6, 1998) entered into as of December 6, 1996 by
the Company and Charles A. Ratner, incorporated by
reference to Exhibit 10.18 to the Company's Form 10-K
for the year ended January 31, 1997 (File No.1-4372).
10.19 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
James A. Ratner, incorporated by reference to Exhibit
10.19 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.20 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Ronald A. Ratner, incorporated by reference to exhibit
10.20 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.21 Employment Agreement entered into as of September 25,
1989 by the Company and Nathan P. Shafran, incorporated
by reference to Exhibit 10.14 to the Company's Form
10-K for the year ended January 31, 1997 (File No.
1-4372).
10.22 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Deborah Ratner
Salzberg and Forest City Enterprises, Inc., insuring
the lives of Albert Ratner and Audrey Ratner, dated
June 26, 1996, incorporated by reference to Exhibit
10.19 to the Company's Form 10-K for the year ended
January 31, 1997 (File No. 1-4372).
10.23 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Brian J. Ratner
and Forest City Enterprises, Inc., insuring the lives
of Albert Ratner and Audrey Ratner, dated June 26,
1996, incorporated by reference to Exhibit 10.20 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
Exhibit
Number Description of Document
10.24 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between Brian J. Ratner and Forest City Enterprises,
Inc., insuring the lives of Albert Ratner and Audrey
Ratner, effective June 26, 1996, incorporated by
reference to Exhibit 10.21 to the Company's Form 10-K
for the year ended January 31, 1997 (File No. 1-4372).
10.25 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between Deborah Ratner Salzberg and Forest City
Enterprises, Inc., insuring the lives of Albert Ratner
and Audrey Ratner, effective June 26, 1996,
incorporated by reference to Exhibit 10.22 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.26 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1992 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the lives of Charles Ratner
and Ilana Horowitz (Ratner), dated November 2, 1996,
incorporated by reference to Exhibit 10.23 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.27 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.24 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.28 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.25 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.29 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.26 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.30 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.27 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
Exhibit
Number Description of Document
10.31 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.28 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.32 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.29 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.33 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.30 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.34 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.31 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.35 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between James Ratner and Albert Ratner, Trustees under
the Charles Ratner 1992 Irrevocable Trust Agreement and
Forest City Enterprises, Inc., insuring the lives of
Charles Ratner and Ilana Ratner, effective November 2,
1996, incorporated by reference to Exhibit 10.32 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.36 First Amendment to the 1994 Stock Option Plan dated as
of June 9, 1998, incorporated by reference to Exhibit
4.7 to the Company's Registration Statement on Form S-8
(Registration No. 333-61925).
10.37 First Amendment to the forms of Incentive Stock Option
Agreement and Nonqualified Stock Option Agreement,
incorporated by reference to Exhibit 4.8 to the
Company's Registration Statement on Form S-8
(Registration No.333-61925).
10.38 Amended and Restated form of Stock Option Agreement,
effective as of July 16, 1998, incorporated by
reference to Exhibit 10.38 to the Company's Form 10-Q
for the quarter ended October 31, 1998 (File No.
1-4372).
10.39 Third Amendment to Credit Agreement, dted as of January
29, 1999, by and among Forest City Rental Properties
Corporation, the banks named therein, KeyBank National
Association, as administravtive agent, and National
City Bank, as syndication agent incorporation by
reference to Exhibit 20.1 to the Company's Form 8-K,
dated January 29, 1999.
Exhibit
Number Description of Document
10.40 Third Amendment to Guaranty of Payment of Debt, dated
as of January 29, 1999, by and among Forest City
Enterprises, Inc., the banks named therein, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 20.2 to the Company's Form 8-K,
dated January 29, 1999.
10.41 Subordination Agreement, dated as of January 29, 1999,
by and among Forest City Enterprises, Inc., St. Paul
Fire and Marine Insurance Company, St. Paul Mercury
Insurance Company, St. Paul Guardian Insurance Company,
Seaboard Surety Company, Economy Fire & Casualty
Company, Asset Guaranty Insurance Company, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 20.3 to the Company's Form 8-K,
dated January 29, 1999.
* 10.42 Dividend Reinvestment and Stock Purchase Plan.
* 10.43 Deferred Compensation Plan for Executives,
effective as of January 1, 1999.
* 10.44 Deferred Compensation Plan for Nonemployee
Directors, effective as of January 1, 1999.
* 13 1998 Annual Report to Shareholders.
* 21 Subsidiaries of the Registrant. See page 24.
* 23 Consent of PricewaterhouseCoopers LLP regarding
Forms S-3 (Registration No. 333-22695 and 333-41437)
and Forms S-8 (Registration No. 33-65054, 33-65058 and
333-61925).
* 24 Powers of attorney.
* 27 Financial Data Schedules.
- -----------------
* Filed herewith.
Report of Independent Accountants on
Financial Statement Schedules
To the Board of Directors
of Forest City Enterprises, Inc.
Our audits of the consolidated financial statements referred to in our report
dated March 10, 1999 appearing on page 25 of the 1998 Annual Report to
Shareholders of Forest City Enterprises, Inc. and subsidiaries (which report and
consolidated financial statements are incorporated by reference in this Annual
Report on Form 10-K) also included an audit of the financial statement schedules
listed in Item 14(a)(2) of this Form 10-K. In our opinion, these financial
statement schedules present fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements.
/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
March 10, 1999
FOREST CITY ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and End of
Description of Period Expenses Deductions Period
- ----------- ----------- ---------- ---------- -----------
Allowance for
doubtful accounts
January 31, 1999 $ 8,169 $ 4,017 $ 4,698 (a) $ 7,488
January 31, 1998 $ 4,994 $ 4,794 $ 1,619 (a) $ 8,169
January 31, 1997 $ 3,687 $ 2,714 $ 1,407 (a) $ 4,994
(a) Uncollectible accounts written off.
Reserve for
project write-off's
January 31, 1999 $ 9,551 $ 2,291(b) $ 0 $ 11,842
January 31, 1998 $ 9,491 $ 60(b) $ 0 $ 9,551
January 31, 1997 $ 9,491 $ 0(b) $ 0 $ 9,491
(b) Additions charged to costs and expenses were recorded net of abandoned
development projects written off of $7,305, $6,774 and $6,497 for the years
ended January 31, 1999, 1998 and 1997, respectively.
FOREST CITY ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross amount at
which carried
Initial cost Cost capitalized at close of
to Company subsequent January 31, 1999
Amount of -------------------- acquisition --------------------------------
Encumbrance Buildings ---------------------- Buildings
At January 31, and Carrying and Total
Description of Property 1999 Land Improvements Improvements costs Land Improvements (A) (B)
- ----------------------- -------------- --------------------- ---------------------- ---------------------- ----------
(in thousands)
Miscellaneous investments $ 499,327 $59,341 $ 477,797 $ 58,389 $ 28,798 $ 69,053 $ 555,272 $ 624,325
Shopping Centers:
Miscellaneous investments 746,679 67,652 651,078 154,354 50,588 80,765 842,907 923,672
Office Buildings:
Miscellaneous investments 787,380 27,058 815,712 143,781 70,500 31,013 1,026,038 1,057,051
Leasehold improvements
and other equipment:
Miscellaneous investments - - 20,541 - - - 20,541 20,541
Under Construction:
Miscellaneous investments 115,610 46,532 365,540 - - 46,532 365,540 412,072
Undeveloped Land:
Miscellaneous investments 24,876 49.837 - - - 49,837 - 49,837
------ ------ ------- ------- ------ ------ ------- ------
Total $ 2,173,872 $ 250,420 $ 2,330,668 $ 356,524 $ 149,886 $277,200 $2,810,298 $3,087,498
=========== ========= =========== ========= ========= ======== ========== ==========
Range of lives
(in years) on
which depreciation in
Accumulated latest income
depreciation statement is computed
at January 31, Date of Date ---------------------
1999(C) construction acquired Bldg Improvements
------------- ------------ -------- ---------------------
Apartments:
Miscellaneous investments $ 123,485 Various - Various Various
Shopping Centers:
Miscellaneous investments 160,552 Various - Various Various
Office Buildings:
Miscellaneous investments 193,215 Various - Various Various
Leasehold improvements
and other equipment:
Miscellaneous investments 14,041 - Various Various Various
Under Construction:
Miscellaneous investments -
Undeveloped Land:
Miscellaneous investments -
---------
Total $ 491,293
=========
(A) The aggregate cost at January 31, 1999 for federal income tax purposes was $2,879,517.
For (B) and (C) refer to the following pages.
(Continued)
FOREST CITY ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
For the Years Ended January 31,
--------------------------------------------------------------
1999 1998 1997
--------- -------------- ---------
(in thousands)
(B) Reconciliations of total real estate carrying value are as follows:
Balance at beginning of period $2,704,560 $2,520,179 $2,425,083
Additions during period -
Improvements 327,471 205,051 148,025
Other acquisitions 156,879 90,438 22,264
---------- ---------- -------
484,350 295,489 170,289
---------- ---------- -------
Deductions during period -
Cost of real estate sold (101,412) (111,108) (75,193)
---------- ---------- --------
Balance at end of period $3,087,498 $2,704,560 $2,520,179
========== ========== ==========
(C) Reconciliations of accumulated depreciation are as follows:
Balance at beginning of period $448,634 $399,830 $347,912
Additions during period -
Charged to profit or loss 61,908 56,923 52,979
Deductions during period -
Retirement and sales (19,249) (8,119) (1,061)
-------- ------- -------
Balance at end of period $491,293 $ 448,634 $ 399,830
======== ========= =========
Item 14. Exhibit 21 - Parents and Subsidiaries
The voting securities of the subsidiaries below are in each case owned by Forest
City Enterprises, Inc. except where a subsidiary's name is indented, in which
case that subsidiary's voting securities are owned by the next preceding
subsidiary whose name is not so indented.
Percentage of
Voting Securities
Owned By State of
Name of Subsidiary Immediate Parent Incorporation
- --------------------------------------- ----------------- -------------
Forest City Rental Properties Corporation 100 Ohio
Forest City Commercial Group, Inc. 100 Ohio
Central Station Limited Partnership 100 Illinois
Temecula Power Center LLC 100 Ohio
Forest City Residential Group, Inc. 100 Ohio
Forest City Trading Group, Inc. 100 Oregon
Sunrise Development Company 100 Ohio
Sunrise Land Company 100 Ohio
FC Granite, Inc. 100 Ohio
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FOREST CITY ENTERPRISES, INC.
(Registrant)
DATE: April 27, 1999 BY: /s/ Charles A. Ratner
-------------- --------------------------
(Charles A. Ratner, President and Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- -------------------- ----------------------------------------- -------------
/s/ Albert B. Ratner Co-Chairman of the Board and Director April 27, 1999
(Albert B. Ratner)
/s/ Samuel H. Miller Co-Chairman of the Board, Treasurer April 27, 1999
(Samuel H. Miller) and Director
* President, Chief Executive Officer April 27, 1999
(Charles A. Ratner) and Director (Principal Executive Officer)
/s/ Thomas G. Smith Senior Vice President, Chief April 27, 1999
(Thomas G. Smith) Financial Officer and Secretary
(Principal Financial Officer)
/s/ Linda M. Kane Vice President and Corporate Controller April 27, 1999
(Linda M. Kane) (Principal Accounting Officer)
/s/ James A. Ratner Executive Vice President and Director April 27, 1999
(James A. Ratner)
/s/ Ronald A. Ratner Executive Vice President and Director April 27, 1999
(Ronald A. Ratner)
/s/ Brian J. Ratner Senior Vice President and Director April 27, 1999
(Brian J. Ratner)
/s/ Deborah Ratner Salzberg Director April 27, 1999
(Deborah Ratner Salzberg)
Signature Title Date
- ------------------------------ --------- --------------
/s/ Michael P. Esposito, Jr. Director April 27, 1999
(Michael P. Esposito, Jr.)
/s/ Scott S. Cowen Director April 27, 1999
(Scott S. Cowen)
/s/ Jerry V. Jarrett Director April 27, 1999
(Jerry V. Jarrett)
/s/ Joan K. Shafran Director April 27, 1999
(Joan K. Shafran)
/s/ Louis Stokes Director April 27, 1999
(Louis Stokes)
The Registrant plans to furnish security holders a copy of the Annual Report and
Proxy material by May 3, 1999.
* The undersigned, pursuant to a Power of Attorney executed by each of the
Directors and Officers identified above and filed with the Securities and
Exchange Commission, by signing his name hereto, does hereby sign and
execute this Form 10-K on behalf of each of the persons noted above, in the
capacities indicated.
By: /s/ Charles A. Ratner April 27, 1999
(Charles A. Ratner, Attorney-in-Fact)
Exhibit Index
-------------
Exhibit
Number Description of Document
3.1 Amended Articles of Incorporation adopted as of October
11, 1983, incorporated by reference to Exhibit 3.1 to
the Company's Form 10-Q for the quarter ended October
31, 1983 (File No. 1-4372).
3.2 Code of Regulations as amended June 14, 1994,
incorporated by reference to Exhibit 3.2 to the
Company's Form 10-K for the fiscal year ended January
31, 1997 (File No.1-4372).
3.3 Certificate of Amendment by Shareholders to the
Articles of Incorporation of Forest City Enterprises,
Inc. dated June 24, 1997, incorporated by reference to
Exhibit 4.14 to the Company's Registration Statement on
Form S-3 (Registration No. 333-41437).
3.4 Certificate of Amendment by Shareholders to the
Articles of Incorporation of Forest City Enterprises,
Inc. dated June 16, 1998, incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on
Form S-8 (Registration No. 333-61925).
4.1 Form of Senior Subordinated Indenture between the
Company and National City Bank, as Trustee thereunder,
incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3
(Registration No. 333-22695).
4.2 Form of Junior Subordinated Indenture between the
Company and National City Bank, as Trustee thereunder,
incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3
(Registration No. 333-22695).
4.3 Form of Senior Subordinated Indenture between the
Company and The Bank of New York, as Trustee
thereunder, incorporated by reference to Exhibit 4.22
to the Company's Registration Statement on Form S-3
(Registration No. 333-41437).
10.1 Credit Agreement, dated as of December 10, 1997, by and
among Forest City Rental Properties Corporation, the
banks named therein, KeyBank National Association, as
administrative agent, and National City Bank, as
syndication agent, incorporated by reference to Exhibit
10.38 to the Company's Form 10-Q for the quarter ended
October 31, 1997 (File No. 1-4372).
10.2 Guaranty of Payment of Debt, dated as of December 10,
1997, by and among Forest City Enterprises, Inc., the
banks named therein, KeyBank National Association, as
administrative agent, and National City Bank, as
syndication agent, incorporated by reference to Exhibit
10.39 the Company's Form 10-Q for the quarter ended
October 31, 1997 (File No. 1-4372).
10.3 First Amendment to Credit Agreement, dated as of
January 20, 1998, by and among Forest City Rental
Properties Corporation, the banks named therein,
KeyBank National Association, as administrative agent,
and National City Bank, as syndication agent,
incorporated by reference to Exhibit 4.19 to the
Company's Registration Statement on Form S-3 (File No.
333-41437).
10.4 First Amendment to Guaranty of Payment of Debt, dated
as of the banks named therein, KeyBank National
Association, as administrative agent, and National City
Bank, as syndication agent, incorporated by reference
to Exhibit 4.20 to the Company's Registration Statement
on Form S-3 (File No. 333-41437).
Exhibit
Number Description of Document
10.5 Letter Agreement, dated as of February 25, 1998, by and
among Forest City Enterprises, Inc., Forest City Rental
Properties Corporation, the banks named therein,
KeyBank National Association, as administrative agent,
and National City Bank, as syndication agent,
incorporated by reference to Exhibit 4.21 to the
Company's Registration Statement on Form S-3 (File No.
333-41437).
10.6 Second Amendment to Credit Agreement, dated as of March
6, 1998, by and among Forest City Rental Properties
Corporation, the banks named therein, KeyBank National
Association, as administrative agent, and National City
Bank, as syndication agent, incorporated by reference
to Exhibit 10.1 to the Company's Form 8-K, dated March
6, 1998 (File No. 1-4372).
10.7 Second Amendment to Guaranty of Payment of Debt, dated
as of March 6, 1998, by and among Forest City
Enterprises, Inc., the banks named therein, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 10.2 to the Company's Form 8-K,
dated March 6, 1998 (File No. 1-4372).
10.8 Stock Purchase Agreement, dated May 7, 1997, between
Forest City Enterprises, Inc. and Richard Miller, Aaron
Miller and Gabrielle Miller, incorporated by reference
to Exhibit 10.34 to the Company's Form 10-Q for the
quarter ended April 30, 1997 (File No. 1-4372).
10.9 Letter Agreement, dated August 14, 1997, adjusting the
interest rate in the Stock Purchase Agreement, dated
May 7, 1997, between Forest City Enterprises, Inc. and
Richard Miller, Aaron Miller and Gabrielle Miller,
incorporated by reference to Exhibit 10.35 to the
Company's Form 10-Q for the quarter ended July 31, 1997
(File No. 1-4372).
10.10 Supplemental Unfunded Deferred Compensation Plan for
Executives, incorporated by reference to Exhibit 10.9
to the Company's Form 10-K for the year ended January
31, 1997 (File No. 1-4372).
10.11 Deferred Compensation Agreement between Forest City
Enterprises, Inc. and Thomas G. Smith, dated December
27, 1995, incorporated by reference to Exhibit 10.33 to
the Company's Form 10-K for the year ended January 31,
1997 (File No. 1-4372).
10.12 1994 Stock Option Plan, including forms of Incentive
Stock Option Agreement and Nonqualified Stock Option
Agreement, incorporated by reference to Exhibit 10.10
to the Company's Form 10-K for the year ended January
31, 1997 (File No. 1-4372).
10.13 Employment Agreement entered into as of September 25,
1989 by the Company and Albert B. Ratner, incorporated
by reference to Exhibit 10.11 to the Company's Form
10-K for the year ended January 31, 1997 (File No.
1-4372).
Exhibit
Number Description of Document
10.14 First Amendment to Employment Agreement entered into as
of December 6, 1996 by the Company and Albert B.
Ratner, incorporated by reference to Exhibit 10.12 to
the Company's Form 10-K for the year ended January 31,
1997 (File No. 1-4372).
10.15 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Samuel H. Miller, incorporated by reference to Exhibit
10.15 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.16 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Charles A. Ratner, incorporated by reference to Exhibit
10.16 to the Form 10-K for the year ended January 31,
1998 (File No.1-4372).
10.17 First Amendment to Employment Agreement (dated April 6,
1998) entered into as of April 24, 1998 by the Company
and Charles A. Ratner, incorporated by reference to
Exhibit 10.17 to the Company's Form 10-K for the year
ended January 31, 1998 (File No. 1-4372).
10.18 First Amendment to Employment Agreement (dated December
6, 1996 and superseded by Employment Agreement dated
April 6, 1998) entered into as of December 6, 1996 by
the Company and Charles A. Ratner, incorporated by
reference to Exhibit 10.18 to the Company's Form 10-K
for the year ended January 31, 1997 (File No.1-4372).
10.19 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
James A. Ratner, incorporated by reference to Exhibit
10.19 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.20 Employment Agreement entered into on April 6, 1998,
effective as of February 1, 1997, by the Company and
Ronald A. Ratner, incorporated by reference to exhibit
10.20 to the Company's Form 10-K for the year ended
January 31, 1998 (File No. 1-4372).
10.21 Employment Agreement entered into as of September 25,
1989 by the Company and Nathan P. Shafran, incorporated
by reference to Exhibit 10.14 to the Company's Form
10-K for the year ended January 31, 1997 (File No.
1-4372).
10.22 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Deborah Ratner
Salzberg and Forest City Enterprises, Inc., insuring
the lives of Albert Ratner and Audrey Ratner, dated
June 26, 1996, incorporated by reference to Exhibit
10.19 to the Company's Form 10-K for the year ended
January 31, 1997 (File No. 1-4372).
10.23 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Brian J. Ratner
and Forest City Enterprises, Inc., insuring the lives
of Albert Ratner and Audrey Ratner, dated June 26,
1996, incorporated by reference to Exhibit 10.20 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
Exhibit
Number Description of Document
10.24 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between Brian J. Ratner and Forest City Enterprises,
Inc., insuring the lives of Albert Ratner and Audrey
Ratner, effective June 26, 1996, incorporated by
reference to Exhibit 10.21 to the Company's Form 10-K
for the year ended January 31, 1997 (File No. 1-4372).
10.25 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between Deborah Ratner Salzberg and Forest City
Enterprises, Inc., insuring the lives of Albert Ratner
and Audrey Ratner, effective June 26, 1996,
incorporated by reference to Exhibit 10.22 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.26 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1992 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the lives of Charles Ratner
and Ilana Horowitz (Ratner), dated November 2, 1996,
incorporated by reference to Exhibit 10.23 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.27 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.24 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.28 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.25 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.29 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.26 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.30 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.27 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
Exhibit
Number Description of Document
10.31 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Max Ratner 1988
Grandchildren's Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.28 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.32 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.29 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.33 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.30 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.34 Split Dollar Insurance Agreement and Assignment of Life
Insurance Policy as Collateral between Albert B. Ratner
and James Ratner, Trustees under the Charles Ratner
1989 Irrevocable Trust Agreement and Forest City
Enterprises, Inc., insuring the life of Charles Ratner,
dated October 24, 1996, incorporated by reference to
Exhibit 10.31 to the Company's Form 10-K for the year
ended January 31, 1997 (File No. 1-4372).
10.35 Letter Supplement to Split Dollar Insurance Agreement
and Assignment of Life Insurance Policy as Collateral
between James Ratner and Albert Ratner, Trustees under
the Charles Ratner 1992 Irrevocable Trust Agreement and
Forest City Enterprises, Inc., insuring the lives of
Charles Ratner and Ilana Ratner, effective November 2,
1996, incorporated by reference to Exhibit 10.32 to the
Company's Form 10-K for the year ended January 31, 1997
(File No. 1-4372).
10.36 First Amendment to the 1994 Stock Option Plan dated as
of June 9, 1998, incorporated by reference to Exhibit
4.7 to the Company's Registration Statement on Form S-8
(Registration No. 333-61925).
10.37 First Amendment to the forms of Incentive Stock Option
Agreement and Nonqualified Stock Option Agreement,
incorporated by reference to Exhibit 4.8 to the
Company's Registration Statement on Form S-8
(Registration No.333-61925).
10.38 Amended and Restated form of Stock Option Agreement,
effective as of July 16, 1998, incorporated by
reference to Exhibit 10.38 to the Company's Form 10-Q
for the quarter ended October 31, 1998 (File No.
1-4372).
10.39 Third Amendment to Credit Agreement, dted as of January
29, 1999, by and among Forest City Rental Properties
Corporation, the banks named therein, KeyBank National
Association, as administravtive agent, and National
City Bank, as syndication agent incorporation by
reference to Exhibit 20.1 to the Company's Form 8-K,
dated January 29, 1999.
Exhibit
Number Description of Document
10.40 Third Amendment to Guaranty of Payment of Debt, dated
as of January 29, 1999, by and among Forest City
Enterprises, Inc., the banks named therein, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 20.2 to the Company's Form 8-K,
dated January 29, 1999.
10.41 Subordination Agreement, dated as of January 29, 1999,
by and among Forest City Enterprises, Inc., St. Paul
Fire and Marine Insurance Company, St. Paul Mercury
Insurance Company, St. Paul Guardian Insurance Company,
Seaboard Surety Company, Economy Fire & Casualty
Company, Asset Guaranty Insurance Company, KeyBank
National Association, as administrative agent, and
National City Bank, as syndication agent, incorporated
by reference to Exhibit 20.3 to the Company's Form 8-K,
dated January 29, 1999.
* 10.42 Dividend Reinvestment and Stock Purchase Plan.
* 10.43 Deferred Compensation Plan for Executives,
effective as of January 1, 1999.
* 10.44 Deferred Compensation Plan for Nonemployee
Directors, effective as of January 1, 1999.
* 13 1998 Annual Report to Shareholders.
* 21 Subsidiaries of the Registrant. See page 24.
* 23 Consent of PricewaterhouseCoopers LLP regarding
Forms S-3 (Registration No. 333-22695 and 333-41437)
and Forms S-8 (Registration No. 33-65054, 33-65058 and
333-61925).
* 24 Powers of attorney.
* 27 Financial Data Schedules.
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* Filed herewith.