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1
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, 2001
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OR
[ ] TRANSITION REPORT Pursuant to Section 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
------------------------- ---------------------
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.)
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
----------------------------
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, 2001 the aggregate market value of the voting stock held by
non-affiliates of the registrant amounted to $578,309,471 and $114,565,647 for
Class A and Class B common stock, respectively.
The number of shares of registrant's common stock outstanding on March 1, 2001
was 19,837,607 and 10,243,920 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, 2001 (2000 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 6, 2001 are incorporated
by reference into Part III of this Form 10-K.
2
FOREST CITY ENTERPRISES, INC.
ANNUAL REPORT ON FORM 10-K
JANUARY 31, 2001
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 6
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 9
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure 15
PART III
Item 10. Directors and Executive Officers of the Registrant 15
Item 11. Executive Compensation 15
Item 12. Security Ownership of Certain Beneficial Owners and Management 15
Item 13. Certain Relationships and Related Transactions 15
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 16
Signatures 27
1
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PART I
Item 1. Business
- ----------------
Founded 81 years ago and publicly traded since 1960, Forest City
Enterprises, Inc. (with its Subsidiaries, the "Company" or "Forest City") owns,
develops, acquires and operates commercial and residential real estate
properties in 22 states and the District of Columbia. At January 31, 2001, the
Company had $4.0 billion in consolidated assets, of which approximately $3.5
billion was invested in real estate, at cost.
The Company is organized into four principal business groups:
* Commercial Group, which owns, develops, acquires and operates
shopping centers, office buildings and mixed-use projects
including hotels,
* Residential Group, which owns, develops, acquires and operates
the Company's multi-family properties,
* Land Group, which owns and develops raw land into master
planned communities and other residential developments for
resale,
* and 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, 2001, the Commercial Group owned interests in 73
completed projects, including 39 retail properties, 25 office properties and 9
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, 2001, the Commercial Group's existing
shopping center portfolio consisted of 12 regional malls with a Gross Leasable
Area (GLA) of 3.9 million square feet 27 Specialty Retail Centers with a total
GLA of 5.2 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.
2
4
Item 1. Business (continued)
- ----------------------------
While the Company continues to develop regional malls in strong markets,
the Company has also pioneered the concept of bringing "big box" retailing to
urban locations previously ignored by major retailers primarily in the New York
metropolitan area. 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, 2001, the Company's operating portfolio of
office/mixed-use and hotel projects consists of 25 office buildings containing
7.3 million square feet, including mixed-use projects with an aggregate of
259,000 gross leasable square feet of retail space and nine hotels with 2,936
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, approximately 64% of the Company's office
buildings were built within the last 11 years and are concentrated in five urban
developments located in Brooklyn, New York, Cleveland, Ohio, Cambridge,
Massachusetts, Pittsburgh, Pennsylvania and San Jose, California.
Residential Group
- -----------------
The Company's Residential Group develops, acquires, owns, leases and
manages residential rental property in 17 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, newer
apartments in the suburbs and supported living communities. The Residential
Group does not develop or operate single-family housing or condominium projects.
At January 31, 2001, the Residential Group's operating portfolio consists
of 35,049 units in 116 properties in which Forest City has an ownership
interest, including 6,735 units of syndicated senior citizen subsidized housing
in 40 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 5,500 acres of undeveloped land for this purpose. The Company
currently has land development projects in nine 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. Land development activities at the Company's former
Stapleton airport project in Denver, Colorado and the Central Station project in
downtown Chicago, Illinois are reported in the Land Group.
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.
3
5
Item 1. Business (continued)
- ----------------------------
Lumber 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 10 strategically located trading offices in
the United States and Canada, employing over 320 traders, Forest City sold the
equivalent of over seven billion board feet of lumber in 2000, with a gross
sales volume of nearly $2.7 billion, making the Company one of the largest
lumber wholesalers in North America.
The Lumber Trading Group currently has sales and administrative offices
in six 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 2000 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, the Internet, 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 4,271 employees as of January 31, 2001, of which 3,272
were full-time and 999 were part-time.
Segments of Business
- --------------------
Financial information about industry segments required by this item is
incorporated by reference to Note M "Segment Information" which appears on pages
50 and 51 of the 2000 Annual Report to Shareholders.
4
6
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
with 14 administrative and sales offices and one processing plant located in
seven states and one sales office in Canada.
The "Forest City Rental Properties Corporation Portfolio of Real Estate,"
presented on pages 22 through 25 of the 2000 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
- -------------------------
In September 1999, a complaint was filed in state court in Los Angeles
County against Forest City Enterprises, Inc., Forest City California Residential
Development, Inc., Forest City Residential West, Inc. and others. Plaintiffs
were 63 construction workers who claim to have been exposed to asbestos and mold
and mildew while engaged in renovation work at a construction site in the state
of Washington. Three of the plaintiffs also claimed to have been exposed to
asbestos and lead paint at a construction site in California. Plaintiffs sought
damages for unspecified personal injuries, lost income and diminished earning
capacity and also sought punitive and treble damages.
The matter was settled by January 31, 2001 and the cases have been
dismissed. The settlement is reflected in the accompanying financial statements
and did not have a material effect.
5
7
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 6, 2001.
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 6, 2001.
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 73
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 79
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 59
James A. Ratner
Executive Vice President, Director, Officer of various
subsidiary corporations. 3-09-88 56
Ronald A. Ratner
Executive Vice President, Director, Officer of various
subsidiary corporations. 3-09-88 54
Thomas G. Smith
Executive Vice President since October 2000, Senior Vice President
prior to October 2000, Chief Financial Officer, Secretary,
Officer of various subsidiary corporations. 10-10-00 60
6
8
Item 4 (A). Executive Officers of the Registrant (continued)
- -------------------------------------------------------------
Date
Name and Position(s) Held Appointed Age
- ------------------------- --------- ---
William M. Warren
Senior Vice President, General Counsel and Assistant Secretary. 5-16-72 72
Brian J. Ratner
Executive Vice President--East Coast Development since August 2000,
Senior Vice President-- East Coast Development from January 1997
to August 2000, Vice President--Urban Entertainment from June 1995 to
December 1996, Vice President from May 1994 to June 1995
and an officer of various subsidiaries. 8-1-00 43
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 43
Note: Charles A. Ratner, James A. Ratner and Ronald A. Ratner are brothers.
Albert B. Ratner is the father of Brian J. Ratner and first cousin to
Charles A. Ratner, James A. Ratner and Ronald A. Ratner.
7
9
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 59 of
the 2000 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 26 of the 2000 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 60 through 73 of the 2000 Annual Report to Shareholders.
8
10
ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ----------------------------------------------------------------------
The Company's primary market risk exposure is interest rate risk. At January 31,
2001, the Company had $849,446,000 of variable-rate debt outstanding for full
consolidation and $904,838,000 for pro-rata consolidation. Additionally, the
Company has interest rate risk associated with fixed-rate debt at maturity.
The Company has purchased London Interbank Offered Rate ("LIBOR") interest rate
caps as follows.
Full Consolidation Pro-Rata Consolidation
------------------------------- ------------------------------
Coverage Notional Average Rate Notional Average Rate
- -------------------------------------------------------------------------------------------------
02/01/01 - 1/31/02 $ 793,264,000 7.04% $ 778,052,000 6.98%
02/01/02 - 1/31/03 622,736,000 7.69% 640,372,000 7.76%
02/01/03 - 1/31/04 391,800,000 7.75% 389,699,000 7.87%
02/01/04 - 1/31/05 211,800,000 8.00% 285,337,000 8.00%
02/01/05 - 1/31/06 177,300,000 8.00% 177,300,000 8.00%
The interest rate caps highlighted above were purchased to mitigate short-term
variable interest rate risk. The Company currently intends to convert a
significant portion of its committed variable-rate debt to fixed-rate debt. In
order to protect against significant increases in long-term interest rates, the
Company has purchased Treasury Options as follows.
Full Consolidation Pro-Rata Consolidation
----------------------------------------------- -----------------------------------------------
Weighted Remaining Weighted Remaining
Term Notional average rate Years at 1/31/01 Notional average rate Years at 1/31/01
- ------------------------------------------------------------------------------------------------------------------
10 years $123,100,000 7.00% 0.21 $ 86,890,000 7.00% 0.21
10 years 321,800,000 6.92% 1.35 210,261,000 6.93% 1.38
At January 31, 2001, the Company had $189,500,000 outstanding under its
$260,000,000 revolving credit facility, which bears interest at LIBOR plus
2.125%. The Company has purchased LIBOR interest rate caps at an average rate of
6.82% and an average rate of 7.75% for 2002 at notional amounts of $187,484,000
and $54,161,000, respectively.
Based upon SEC requirements on assessing the value of debt instruments, the
Company estimates the fair value by discounting future cash payments at interest
rates that approximate the current market. Based on these parameters, the
carrying amount of the Company's total fixed-rate debt at January 31, 2001 was
$2,000,367,000 compared to an estimated fair value of $1,939,559, 000 for full
consolidation and $2,130,980,000 compared to an estimated fair value of
$2,081,088,000 for pro-rata consolidation. The Company estimates that a 100
basis point decrease in market interest rates would change the fair value of
this fixed-rate debt for full consolidation and pro-rata consolidation to a
liability of approximately $2,050,864,000 and $2,198,518,000, respectively.
The Company estimates the fair value of its hedging instruments based on
interest rate market pricing models. At January 31, 2001, the unamortized book
value of the Company's hedging instruments was $17,000,000 compared to an
estimated fair value of $2,000,000.
The following tables provide information about the Company's financial
instruments that are sensitive to changes in interest rates.
9
11
FULL CONSOLIDATION METHOD
JANUARY 31, 2001
EXPECTED MATURITY DATE
---------------------------------------------------------------------------------------------
LONG-TERM DEBT 2001 2002 2003 2004 2005 THEREAFTER
-------------- ---- ---- ---- ---- ---- ----------
FIXED:
Fixed rate debt (1) $310,883,431 $ 62,061,339 $ 64,171,833 $34,090,134 $ 108,086,704 $1,132,281,249
Weighted average interest rate 7.92% 7.65% 7.66% 7.42% 7.26% 7.44%
UDAG (1) 82,228 102,386 225,414 454,327 10,972,492 56,555,052
Weighted average interest rate 6.99% 6.01% 2.93% 1.56% 3.90% 1.15%
Senior & Subordinated Debt -- -- -- -- -- 220,400,000
Weighted average interest rate 8.31%
------------ ------------ ------------ ----------- ------------- --------------
Total Fixed Rate Debt 310,965,659 62,163,725 64,397,247 34,544,461 119,059,196 1,409,236,301
------------ ------------ ------------ ----------- ------------- --------------
VARIABLE:
Variable rate debt (1) 207,395,269 101,001,131 271,551,378 25,847,856 -- --
Weighted average interest rate
Tax Exempt (1) 54,150,000 -- -- -- -- --
Weighted average interest rate
Revolving Credit Facility -- -- 189,500,000 -- -- --
Weighted average interest rate
------------ ------------ ------------ ----------- ------------- --------------
Total Variable Rate Debt 261,545,269 101,001,131 461,051,378 25,847,856 -- --
------------ ------------ ------------ ----------- ------------- --------------
TOTAL LONG-TERM DEBT $572,510,928 $163,164,856 $525,448,625 $60,392,317 $ 119,059,196 $1,409,236,301
============ ============ ============ =========== ============= ==============
TOTAL FAIR MARKET
OUTSTANDING VALUE
LONG-TERM DEBT 1/31/2001 1/31/2001
-------------- --------- ---------
FIXED:
Fixed rate debt (1) $1,711,574,690 $1,690,083,560
Weighted average interest rate 7.53%
UDAG (1) 68,391,899 36,775,918
Weighted average interest rate 1.61%
Senior & Subordinated Debt 220,400,000 212,700,000
Weighted average interest rate 8.31%
-------------- --------------
Total Fixed Rate Debt 2,000,366,589 1,939,559,478
-------------- --------------
VARIABLE:
Variable rate debt (1) 605,795,634 605,795,634
Weighted average interest rate 8.73%
Tax Exempt (1) 54,150,000 54,150,000
Weighted average interest rate 6.20%
Revolving Credit Facility 189,500,000 189,500,000
Weighted average interest rate 8.63%
-------------- --------------
Total Variable Rate Debt 849,445,634 849,445,634
-------------- --------------
TOTAL LONG-TERM DEBT $2,849,812,223 $2,789,005,112
============== ==============
10
(1) Represents nonrecourse debt.
12
PRO-RATA CONSOLIDATION METHOD
JANUARY 31, 2001
EXPECTED MATURITY DATE
---------------------------------------------------------------------------------------------
LONG-TERM DEBT 2001 2002 2003 2004 2005 THEREAFTER
-------------- ---- ---- ---- ---- ---- ----------
FIXED:
Fixed rate debt (1) $ 224,340,015 $ 65,356,145 $ 93,777,477 $ 54,380,328 $ 144,104,426 $1,258,800,910
Weighted average interest rate 7.93% 7.75% 8.46% 7.40% 7.75% 7.42%
UDAG (1) 10,490,882 1,548,523 173,777 345,799 10,859,802 46,401,987
Weighted average interest rate 7.95% 2.43% 0.00% 0.00% 3.87% 1.21%
Senior & Subordinated Debt -- -- - -- -- 220,400,000
Weighted average interest rate 8.31%
------------- ------------- ------------- ------------ ------------- --------------
Total Fixed Rate Debt 234,830,897 66,904,668 93,951,254 54,726,127 154,964,228 1,525,602,897
------------- ------------- ------------- ------------ ------------- --------------
VARIABLE:
Variable rate debt (1) 191,807,269 158,287,831 207,602,218 26,130,224 26,452,613 10,451,802
Weighted average interest rate
Tax Exempt (1) 94,605,416 -- -- -- -- --
Weighted average interest rate
Revolving Credit Facility -- -- 189,500,000 -- -- --
Weighted average interest rate
------------- ------------- ------------- ------------ ------------- --------------
Total Variable Rate Debt 286,412,685 158,287,831 397,102,218 26,130,224 26,452,613 10,451,802
------------- ------------- ------------- ------------ ------------- --------------
TOTAL LONG-TERM DEBT $ 521,243,582 $ 225,192,499 $ 491,053,472 $ 80,856,351 $ 181,416,841 $1,536,054,699
============= ============= ============= ============ ============= ==============
TOTAL FAIR MARKET
OUTSTANDING VALUE
LONG-TERM DEBT 1/31/2001 1/31/2001
-------------- --------- ---------
FIXED:
Fixed rate debt (1) $1,840,759,301 $1,822,852,367
Weighted average interest rate 7.57%
UDAG (1) 69,820,770 45,535,905
Weighted average interest rate 2.65%
Senior & Subordinated Debt 220,400,000 212,700,000
Weighted average interest rate 8.31%
-------------- --------------
Total Fixed Rate Debt 2,130,980,071 2,081,088,272
-------------- --------------
VARIABLE:
Variable rate debt (1) 620,731,957 620,731,957
Weighted average interest rate 8.59%
Tax Exempt (1) 94,605,416 94,605,416
Weighted average interest rate 5.36%
Revolving Credit Facility 189,500,000 189,500,000
Weighted average interest rate 8.63%
-------------- --------------
Total Variable Rate Debt 904,837,373 904,837,373
-------------- --------------
TOTAL LONG-TERM DEBT $3,035,817,444 $2,985,925,645
============== ==============
(1) Represents nonrecourse debt.
11
13
FULL CONSOLIDATION METHOD
JANUARY 31, 2000
EXPECTED MATURITY DATE
----------------------------------------------------------------------------------------
LONG-TERM DEBT 2000 2001 2002 2003 2004 THEREAFTER
-------------- ---- ---- ---- ---- ---- ----------
FIXED:
Fixed rate debt (1) $ 49,504,027 $ 99,647,653 $ 42,117,504 $ 65,234,832 $31,874,536 $1,077,753,910
Weighted average interest rate 8.32% 8.37% 7.48% 7.68% 7.40% 7.35%
UDAG (1) 65,838 70,280 89,934 212,049 439,941 67,596,611
Weighted average interest rate 6.97% 7.00% 5.87% 2.67% 1.38% 1.51%
Senior notes -- -- -- -- -- 200,000,000
Weighted average interest rate 8.50%
------------ ------------ ------------ ------------ ----------- -------------
Total Fixed Rate Debt 49,569,865 99,717,933 42,207,438 65,446,881 32,314,477 1,345,350,521
------------ ------------ ------------ ------------ ----------- -------------
VARIABLE:
Variable rate debt (1) (2) 446,959,395 38,205,393 72,587,415 67,688,685 17,646,808 --
Weighted average interest rate
Tax Exempt (1) 55,570,001 30,650,000 -- -- -- 24,679,000
Weighted average interest rate
Revolving Credit Facility -- 167,000,000 -- -- -- --
Weighted average interest rate
------------ ------------ ------------ ------------ ----------- -------------
Total Variable Rate Debt 502,529,396 235,855,393 72,587,415 67,688,685 17,646,808 24,679,000
------------ ------------ ------------ ------------ ----------- -------------
TOTAL LONG-TERM DEBT $552,099,261 $335,573,326 $114,794,853 $133,135,566 $49,961,285 $1,370,029,521
============ ============ ============ ============ =========== ==============
TOTAL FAIR MARKET
OUTSTANDING VALUE
LONG-TERM DEBT 1/31/00 1/31/00
-------------- ------- -------
FIXED:
Fixed rate debt (1) $1,366,132,462 $1,265,138,832
Weighted average interest rate 7.48%
UDAG (1) 68,474,653 31,635,041
Weighted average interest rate 1.53%
Senior notes 200,000,000 183,000,000
Weighted average interest rate 8.50%
-------------- --------------
Total Fixed Rate Debt 1,634,607,115 1,479,773,873
-------------- --------------
VARIABLE:
Variable rate debt (1) (2) 643,087,696 643,087,696
Weighted average interest rate 7.66%
Tax Exempt (1) 110,899,001 110,899,001
Weighted average interest rate 4.44%
Revolving Credit Facility 167,000,000 167,000,000
Weighted average interest rate 7.88%
-------------- --------------
Total Variable Rate Debt 920,986,697 920,986,697
-------------- --------------
TOTAL LONG-TERM DEBT $2,555,593,812 $2,400,760,570
============== ==============
(1) Represents nonrecourse debt.
(2) As of January 31, 2000, $205,615,000 of variable-rate debt has been hedged
via LIBOR-based swaps that have a remaining average life of 0.92 years.
12
14
PRO-RATA CONSOLIDATION METHOD
JANUARY 31, 2000
EXPECTED MATURITY DATE
-------------------------------------------------------------------------------------------
LONG-TERM DEBT 2000 2001 2002 2003 2004 THEREAFTER
-------------- ---- ---- ---- ---- ---- ----------
FIXED:
Fixed rate debt (1) $ 67,930,592 $ 81,160,031 $ 44,400,735 $ 86,509,644 $53,424,682 $1,231,194,549
Weighted average interest rate 8.11% 8.25% 7.51% 8.24% 7.40% 7.40%
UDAG (1) 1,049,610 10,481,224 541,722 163,085 334,290 57,288,853
Weighted average interest rate 0.35% 7.99% 7.73% 2.78% 1.45% 1.58%
Senior notes -- -- -- -- -- 200,000,000
Weighted average interest rate 8.50%
------------ ------------ ------------ ------------ ----------- --------------
Total Fixed Rate Debt 68,980,202 91,641,255 44,942,457 86,672,729 53,758,972 1,488,483,402
------------ ------------ ------------ ------------ ----------- --------------
VARIABLE:
Variable rate debt (1) (2) 347,609,980 34,141,905 119,367,166 68,992,986 17,646,808 7,685,100
Weighted average interest rate
Tax Exempt (1) 55,570,001 32,208,500 -- -- -- 64,679,000
Weighted average interest rate
Revolving Credit Facility -- 167,000,000 -- -- -- --
Weighted average interest rate
------------ ------------ ------------ ------------ ----------- --------------
Total Variable Rate Debt 403,179,981 233,350,405 119,367,166 68,992,986 17,646,808 72,364,100
------------ ------------ ------------ ------------ ----------- --------------
TOTAL LONG-TERM DEBT $472,160,183 $324,991,660 $164,309,623 $155,665,715 $71,405,780 $1,560,847,502
============ ============ ============ ============ =========== ==============
TOTAL FAIR MARKET
OUTSTANDING VALUE
LONG-TERM DEBT 1/31/00 1/31/00
-------------- ------- -------
FIXED:
Fixed rate debt (1) $1,564,620,233 $1,333,084,420
Weighted average interest rate 7.52%
UDAG (1) 69,858,784 39,902,100
Weighted average interest rate 2.57%
Senior notes 200,000,000 183,000,000
Weighted average interest rate 8.50%
-------------- --------------
Total Fixed Rate Debt 1,834,479,017 1,555,986,520
-------------- --------------
VARIABLE:
Variable rate debt (1) (2) 595,443,945 595,443,945
Weighted average interest rate 7.72%
Tax Exempt (1) 152,457,501 152,457,501
Weighted average interest rate 4.10%
Revolving Credit Facility 167,000,000 167,000,000
Weighted average interest rate 7.88%
-------------- --------------
Total Variable Rate Debt 914,901,446 914,901,446
-------------- --------------
TOTAL LONG-TERM DEBT $2,749,380,463 $2,470,887,966
============== ==============
(1) Represents nonrecourse debt.
(2) As of January 31, 2000, $198,792,000 of variable-rate debt has been hedged
via LIBOR-based swaps that have a remaining average life of 0.97 years.
13
15
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 28 through
59 of the 2000 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).
The quarterly revenues and earnings before income taxes reported in
"Quarterly Consolidated Financial Data (Unaudited)" located on page 59 of the
2000 Annual Report to Shareholders differs from the amounts last reported in
filings on Forms 10-Q in 2000 and the 1999 Form 10-K. The differences
result from a change in the presentation of the financial results from the
pro-rata method of consolidation to the full consolidation method, as more
fully described in Note A of "Notes to Consolidated Financial Statements" in
the 2000 Annual Report to Shareholders. The following is a reconciliation of
those differences.
AS
PER 2000 PREVIOUSLY
ANNUAL REPORT PLUS REPORTED
------------- LESS UNCONSOLIDATED --------
FULL MINORITY INVESTMENTS PRO-RATA
QUARTER ENDED CONSOLIDATION INTEREST AT PRO-RATA CONSOLIDATION
- ---------------------------------------------------------------------------------------------------------------------------
(in thousands)
OCTOBER 31, 2000
Revenues $211,526 $29,351 $45,561 $227,736
Earnings before income taxes 21,927 501 - 21,426
JULY 31, 2000
Revenues 190,263 28,852 39,730 201,141
Earnings before income taxes 41,703 856 - 40,847
APRIL 30, 2000
Revenues 166,867 22,096 41,847 186,618
Earnings before income taxes 44,272 47 - 44,225
JANUARY 31, 2000
Revenues 197,925 20,000 46,334 224,259
Earnings before income taxes 39,566 4,416 - 35,150
OCTOBER 31, 1999
Revenues 164,878 16,160 39,449 188,167
Earnings before income taxes 12,697 450 - 12,247
JULY 31, 1999
Revenues 174,062 16,620 41,509 198,951
Earnings before income taxes 8,918 649 - 8,269
APRIL 30, 1999
Revenues 161,923 15,464 35,235 181,694
Earnings before income taxes 9,225 42 - 9,183
14
16
PART III
Item 9. Changes In and Disagreements With Accountants on Accounting and
- -----------------------------------------------------------------------
Financial Disclosure
- --------------------
None.
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 April 27,
2001 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
April 27, 2001 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
April 27, 2001 and is incorporated herein by reference.
15
17
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 2000 Annual Report to Shareholders are
incorporated by reference in Part II, Item 8.
Report of Independent Accountants
Consolidated Balance Sheets - January 31, 2001 and 2000
Consolidated Statements of Earnings for the three years
ended January 31, 2001
Consolidated Statements of Shareholders' Equity for the
three years ended January 31, 2001
Consolidated Statements of Cash Flows for the three years
ended January 31, 2001 Notes to Consolidated Financial
Statements
Quarterly Consolidated Financial Data (Unaudited)
Individual financial statements of persons accounted for by
the equity method have been omitted because such 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, 2001, 2000 and 1999 24.
Schedule III - Real Estate and Accumulated Depreciation at
January 31, 2001 with reconciliations for the years
ended January 31, 2001, 2000 and 1999 25-26
The report of the independent accountants with respect to
the above listed financial statement schedules appears on
page 23.
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,
2001:
On November 29, 2000, the Company filed Form 8-K (dated
November 22, 2000) to submit Regulation FD Disclosure relating
to the issuance of a Limited Offering Memorandum in connection
with the issuance of $20,400,000 Multi-Family Housing Revenue
Refunding Bonds.
(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).
16
18
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).
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).
17
19
Exhibit
Number Description of Document
------ -----------------------
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 - Third Amendment to Credit Agreement, dated as of January 29,
1999, 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 incorporation by reference to Exhibit 20.1 to the
Company's Form 8-K, dated January 29, 1999 (File No. 1-4372).
10.9 - 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 (File No. 1-4372).
10.10 - 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 (File No. 1-4372).
10.11 - Amended and Restated Credit Agreement, dated as of June 25,
1999, 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 20.1 to the
Company's Form 8-K, dated June 25, 1999 (File No. 1-4372).
10.12 - Amended and Restated Guaranty of Payment of Debt, dated as of
June 25, 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 June 25, 1999 (File No. 1-4372).
10.13 - First Amendment to Amended and Restated Credit Agreement,
dated August 9, 2000, 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 10.51 to the Company's Form 10-Q for the quarter ended
July 31, 2000 (File No. 1-4372).
10.14 - First Amendment to Amended and Restated Guaranty of Payment of
Debt, dated August 9, 2000, by and among Forest City
Enterprises, the banks named therein, KeyBank National
Association, as administrative agent, and National City Bank,
as syndication agent, incorporated by reference to Exhibit
10.52 to the Company's Form 10-Q for the quarter ended July
31, 2000 (File No. 1-4372).
10.17 - 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).
18
20
Exhibit
Number Description of Document
------ -----------------------
10.18 - 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).
10.19 - 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).
10.20 - 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).
10.21 - 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).
10.22 - 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).
10.23 - 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).
10.24 - 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).
10.25 - 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).
10.26 - 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).
19
21
Exhibit
Number Description of Document
------ -----------------------
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 10.29 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 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).
10.29 - 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).
10.30 - 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).
10.31 - 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).
10.32 - 1994 Stock Option Plan, including forms of Incentive Stock
Option Agreement and Nonqualified Stock OptionAgreement,
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).
10.33 - 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).
10.34 - 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).
10.35 - 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).
10.36 - Dividend Reinvestment and Stock Purchase Plan, incorporated by
reference to Exhibit 10.42 to the Company's Form 10-K for the
year ended January 31, 1999 (File No. 1-4372).
10.37 - Deferred Compensation Plan for Executives, effective as of
January 1, 1999, incorporated by reference to Exhibit 10.43 to
the Company's Form 10-K for the year ended January 31, 1999
(File No. 1-4372).
10.38 - Deferred Compensation Plan for Nonemployee Directors,
effective as of January 1, 1999, incorporated by reference to
Exhibit 10.44 to the Company's Form 10-K for the year ended
January 31, 1999 (File No. 1-4372).
20
22
Exhibit
Number Description of Document
------ -----------------------
10.39 - First Amendment to the Deferred Compensation Plan for
Nonemployee Directors, effective October 1,1999 incorporated
by reference to Exhibit 4.6 to the Company's Registration
Statement on Form S-8 (Registration No. 333-38912).
10.40 - Second Amendment to the Deferred Compensation Plan for
Nonemployee Directors, effective March 10, 2000, incorporated
by reference to Exhibit 4.7 to the Company's Registration
Statement on Form S-8 (Registration No. 333-38912).
10.41 - 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).
10.42 - 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).
10.43 - Second Amendment to Employment Agreement entered into February
28, 2000, by and between Forest City Enterprises, Inc. and
Charles A. Ratner, incorporated by reference to Exhibit 10.48
to the Company's Form 10-K for the year ended January 31, 2000
(File No. 1-4372).
10.44 - Employment Agreement entered into on May 31, 1999, effective
January 1, 1999, by the Company and Albert B. Ratner,
incorporated by reference to Exhibit 10.47 to the Company's
Form 10-Q for the quarter ended July 31, 1999 (File No.
1-4372).
10.45 - First Amendment to Employment Agreement effective as of
February 28, 2000 between Forest City Enterprises, Inc. and
Albert B. Ratner, incorporated by reference to Exhibit 10.45
to the Company's Form 10-K for the year ended January 31, 2000
(File No. 1-4372).
10.46 - Employment Agreement entered into on May 31, 1999, effective
January 1, 1999, by the Company and Samuel H. Miller,
incorporated by reference to Exhibit 10.48 to the Company's
Form 10-Q for the quarter ended July 31, 1999 (File No.
1-4372).
10.47 - Employment Agreement entered into on May 3, 2000, effective
February 1, 2000, by the Company and James A. Ratner,
incorporated by reference to Exhibit 10.49 to the Company's
Form 10-Q for the quarter ended July 31, 2000 (File No.
1-4372).
10.48 - Employment Agreement entered into on May 3, 2000, effective
February 1, 2000, by the Company and Ronald A. Ratner,
incorporated by reference to Exhibit 10.50 to the Company's
Form 10-Q for the quarter ended July 31, 2000 (File No.
1-4372).
10.49 - 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).
10.50 - Agreement (re death benefits) entered into on May 31, 1999, by
the Company and Thomas G. Smith, incorporated by reference to
Exhibit 10.49 to the Company's Form 10-Q for the quarter ended
October 31, 1999 (File No. 1-4372).
21
23
Exhibit
Number Description of Document
------ -----------------------
* 13 - 2000 Annual Report to Shareholders.
* 21 - Subsidiaries of the Registrant.
* 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.
- -------------------------
* Filed herewith
22
24
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Shareholders and Board of Directors
of Forest City Enterprises, Inc.
Our audits of the consolidated financial statements referred to in our report
dated March 10, 2001 appearing on page 28 in the 2000 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.
PricewaterhouseCoopers LLP
Cleveland, Ohio
March 10, 2001
23
25
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
Year Ended January 31, 2001 $ 8,121 $ 4,796 $ 4,153 (b) $ 8,764
(Full Consolidation) (a)
- ------------------------------------------------------------------------------------------------------------------------
Year Ended January 31, 2000 $ 7,488 $ 2,958 $ 1,913 (b) $ 8,533
(Pro-Rata consolidation)
Year Ended January 31, 1999 $ 8,169 $ 4,017 $ 4,698 (b) $ 7,488
(Pro-Rata consolidation)
Reserve for Project write-offs
(Full Consolidation)
Year Ended January 31, 2001 $ 7,240 $ 12,387 (c) $ 9,054 $10,573
Year Ended January 31, 2000 $ 11,842 $ 8,977 (c) $ 13,579 (d) $ 7,240
Year Ended January 31, 1999 $ 9,551 $ 2,291 (c) $ - $11,842
Notes receivable reserve
(Full Consolidation)
Year Ended January 31, 2001 $ 16,727 $ - $ 10,775 (e) $ 5,952
Year Ended January 31, 2000 $ 17,227 $ - $ 500 (e) $16,727
Year Ended January 31, 1999 $ 20,727 $ - $ 3,500 (e) $17,227
(a) Effective January 31,2001, the Company implemented a change in the
presentation of its financial results that has impacted the
comparability of those results. Prior to January 31,2001, the Company
used the pro-rata method of consolidation to report its partnership
investments proportionate to its share of ownership for each line item
of its consolidated financial statements. In accordance with the FASB's
Emerging Issues Task Force Issue No. 00-1, "Investor Balance Sheet and
Income Statement Display under the Equity Method for Investments in
Certain Partnerships and Other Ventures, "the Company can no longer use
the pro-rata consolidation method for partnerships in its public
reporting. Accordingly, partnership investments that were previously
reported on the pro-rata method will now be reported as consolidated at
100% if deemed under the Company's "control" or otherwise on the equity
method of accounting.
(b) Uncollectible accounts written off.
(c) Additions charged to costs and expenses were recorded net of abandoned
development projects written off of $7,477, $7,305 and $6,774 for the
years ended January 31, 2001, 2000 and 1999, respectively.
(d) Allowance related to property sold and valuation losses of Land Group
investments.
(e) Reversal of a reserve against a note receivable from Millender Center.
See Note D in the Notes to Consolidated Financial Statements.
24
26
FOREST CITY ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
(in thousands)
Gross amount at
which carried
Initial cost Cost capitalized at close of
to Company subsequent January 31, 2001
Amount of ---------------------- to acquisition ------------------------------------
Encumbrance Buildings ---------------------- Buildings
At January 31, and Carrying and
Description of Property 2001 Land Improvements Improvements costs Land Improvements Total
- ----------------------- ---- ---- ------------ ------------ ----- ---- ------------ -----
(A) (A) (A) (A) (B) (B) (A) (B)
Apartments:
Miscellaneous investments $ 418,470 $ 50,849 $ 334,594 $ 48,757 $ 90,637 $ 52,525 $ 472,312 $ 524,837
Shopping Centers:
Miscellaneous investments 814,106 72,323 781,555 164,136 66,150 81,191 1,002,973 1,084,164
Office Buildings:
New York, New York 196,190 -- 196,398 3,352 7,061 -- 206,811 206,811
Miscellaneous investments 919,801 11,172 1,001,573 157,153 101,255 14,246 1,256,907 1,271,153
Leasehold improvements
and other equipment:
Miscellaneous investments -- -- 24,616 -- -- -- 24,616 24,616
Under Construction:
Miscellaneous investments 85,082 23,976 367,845 -- -- 23,976 367,845 391,821
Developed Land:
Miscellaneous investments 6,263 22,744 -- -- -- 22,744 -- 22,744
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total $2,439,912 $ 181,064 $2,706,581 $ 373,398 $ 265,103 $ 194,682 $3,331,464 $3,526,146
========== ========== ========== ========== ========== ========== ========== ==========
Range of lives
(in years) on
which depreciation in
Accumulated latest income
depreciation statement is computed
at January 31, Date of Date ----------------------
Description of Property 2001 construction acquired Bldg Improvements
- ----------------------- ---- ------------ -------- ---- ------------
(C)
Apartments:
Miscellaneous investments $ 63,102 Various - Various Various
Shopping Centers:
Miscellaneous investments 138,490 Various - Various Various
Office Buildings:
New York, New York 37,272 1989-1991 - Various Various
Miscellaneous investments 234,979 Various - Various Various
Leasehold improvements
and other equipment:
Miscellaneous investments 15,697 - Various Various Various
Under Construction:
Miscellaneous investments --
Developed Land:
Miscellaneous investments --
----------
Total $ 489,540
==========
(A) The aggregate cost at January 31, 2001 for federal income tax purposes was
$3,195,024. For (B) and (C) refer to the following page.
(Continued)
25
27
FOREST CITY ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
FOR THE YEARS ENDED JANUARY 31,
-----------------------------------------
2001 2000 1999
----------- ----------- -----------
(in thousands)
(B) Reconciliations of total real estate carrying value are as follows:
Balance at beginning of period $ 3,206,642 $ 2,791,921 $ 2,385,217
Additions during period -
Improvements 322,927 465,265 320,768
Other acquisitions 172,892 -- 139,293
----------- ----------- -----------
495,819 465,265 460,061
Deductions during period -
Cost of real estate sold (176,315) (50,544) (53,357)
----------- ----------- -----------
Balance at end of period $ 3,526,146 $ 3,206,642 $ 2,791,921
=========== =========== ===========
(C) Reconciliations of accumulated depreciation are as follows:
Balance at beginning of period $ 458,235 $ 413,705 $ 376,242
Additions during period -
Charged to profit or loss 98,364 81,504 83,839
Deductions during period -
Retirement and sales (67,059) (36,974) (46,376)
----------- ----------- -----------
Balance at end of period $ 489,540 $ 458,235 $ 413,705
=========== =========== ===========
26
28
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 25, 2001 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
--------- ----- ----
* Co-Chairman of the Board and Director April 25, 2001
- -----------------------------------
(Albert B. Ratner)
* Co-Chairman of the Board, Treasurer April 25, 2001
- ----------------------------------- and Director
(Samuel H. Miller)
/s/ Charles A. Ratner President, Chief Executive Officer April 25, 2001
- ----------------------------------- and Director (Principal Executive Officer)
(Charles A. Ratner)
/s/ Thomas G. Smith Executive Vice President, Chief April 25, 2001
- ----------------------------------- Financial Officer and Secretary
(Thomas G. Smith) (Principal Financial Officer)
/s/ Linda M. Kane Vice President and Corporate Controller April 25, 2001
- ----------------------------------- (Principal Accounting Officer)
(Linda M. Kane)
* Executive Vice President and Director April 25, 2001
- -----------------------------------
(James A. Ratner)
* Executive Vice President and Director April 25, 2001
- -----------------------------------
(Ronald A. Ratner)
* Executive Vice President and Director April 25, 2001
- -----------------------------------
(Brian J. Ratner)
* Director April 25, 2001
- -----------------------------------
(Deborah Ratner Salzberg)
27
29
Signature Title Date
--------- ----- ----
* Director April 25, 2001
- ---------------------------------------------
(Michael P. Esposito, Jr.)
* Director April 25, 2001
- --------------------------------------------
(Scott S. Cowen)
* Director April 25, 2001
- --------------------------------------------
(Jerry V. Jarrett)
* Director April 25, 2001
- --------------------------------------------
(Joan K. Shafran)
* Director April 25, 2001
- --------------------------------------------
(Louis Stokes)
* Director April 25, 2001
- --------------------------------------------
(Stan Ross)
The Registrant plans to furnish security holders a copy of the Annual Report and
Proxy material by April 27, 2001.
* 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 25, 2001
- -------------------------------------
(Charles A. Ratner, Attorney-in-Fact)
28
30
Exhibits Filed Herewith
-----------------------
13 - 2000 Annual Report to Shareholders.
21 - Subsidiaries of the Registrant.
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.