Exhibit 99.1

AT THE COMPANY		ON THE WEB
Robert O’Brien		www.forestcity.net
Executive Vice President – Chief Financial Officer
216-621-6060
Jeff Linton
Vice President – Corporate Communication
216-621-6060

FOR IMMEDIATE RELEASE

Forest City Reports Fiscal 2011 First-Quarter Results

CLEVELAND, Ohio – June 6, 2011 – Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced EBDT, net earnings and revenues for the first quarter ended April 30, 2011.

EBDT

First-quarter EBDT (earnings before depreciation, amortization and deferred taxes) was $127.4 million, an increase of $56.9 million compared with 2010 first-quarter EBDT of $70.5 million. On a fully diluted, per-share basis, first-quarter 2011 EBDT was $0.63, a 70.3 percent increase compared with 2010 first quarter EBDT of $0.37.

For an explanation of EBDT variances, see the section titled “Review of Results” in this news release. EBDT and EBDT per share are non-Generally Accepted Accounting Principle (GAAP) measures. A reconciliation of net earnings (the most directly comparable GAAP measure to EBDT) to EBDT is provided in the Financial Highlights table in this news release.

Net Earnings/Loss

First-quarter net earnings attributable to Forest City Enterprises, Inc. were $47.6 million, or $0.25 per share, compared with a net loss of $15.6 million, or $0.10 per share, in the first quarter of 2010. After preferred dividends, net earnings attributable to Forest City Enterprises, Inc. common shareholders was $43.7 million, or $0.24 per share, for the quarter ended April 30, 2011.

Revenues

First-quarter 2011 consolidated revenues were $316.9 million compared with $271.5 million last year. The year-over-year revenue variance was impacted primarily by the same factors impacting EBDT, as described below under “Review of Results.”

Review of Results

An exhibit illustrating factors impacting first-quarter 2011 EBDT results, compared with results for the comparable period in 2010, is available on the Investor Relations page of the Company’s web site: www.forestcity.net, and is included in the company’s first-quarter 2011 Supplemental Package furnished to the Securities and Exchange Commission.

For the three months ended April 30, 2011, the Company’s combined Commercial and Residential Segments (also referred to as the rental properties portfolio) provided a pre-tax EBDT increase of $55.7 million, compared with the first quarter of 2010. The year-over-year increase was primarily the result of initial proceeds of $42.6 million from the previously announced sale of land and air rights to Rock Ohio Caesars Cleveland LLC for construction of a casino in downtown Cleveland, increased income of $7.7 million from tax credits, the ramp-up of new properties of $2.6 million, and decreased interest expense on the mature portfolio of $2.2 million. These increases in the portfolio were partially offset by reduced EBDT from properties sold of $4.6 million.

The Company’s Land Segment provided a pre-tax EBDT increase of $3.0 million, compared with the same period in 2010, primarily due to increased sales. The Nets provided a pre-tax EBDT increase of $3.9 million, compared to the first quarter of 2010, due to the decrease in Forest City’s share of allocated losses.

Corporate pre-tax EBDT decreased $6.9 million compared with the first quarter of 2010, primarily as a result of the nonrecurring 2010 gain on early extinguishment of debt of $6.3 million, related to the exchange of a portion of the Company’s Senior Notes. Finally, EBDT was favorably impacted by a larger tax benefit of $1.2 million, compared with the prior year.

NOI, Occupancies and Rent

Overall comparable property net operating income (NOI) was flat during the first quarter, compared with the same period a year ago. The retail portfolio was up 2.6 percent. In the residential portfolio, conventional apartments were up 5.8 percent, but portfolio-wide results were negatively impacted by an increase in, and the timing of, operating expenses in the senior-housing component, resulting in an overall residential increase of 1.8 percent. The office portfolio was down 2.5 percent, compared with the first quarter of 2010.

Comparable property NOI, defined as NOI from properties operated in the three months ended April 30, 2011 and 2010, is a non-GAAP financial measure, and is based on the pro-rata consolidation method, also a non-GAAP financial measure. Included in this release is a schedule that presents comparable property NOI on the full-consolidation method.

At April 30, 2011, comparable retail occupancies were 91.2 percent, compared with 89.7 percent at April 30, 2010, and regional mall sales averaged $411 per square foot on a rolling 12-month basis, an increase of 7.6 percent from the same period in 2010, while comparable regional mall sales increased 4.5 percent, compared with first quarter of 2010. Comparable office occupancies increased to 90.7 percent, compared with 90.6 percent last year. In the residential portfolio, comparable average occupancies for the three months ended April 30, 2011, were 95.4 percent, compared with 93.4 percent last year. Comparable residential net rental income (defined as gross rent less vacancies and concessions) increased to 93.0 percent, compared with 89.8 percent in the same period in 2010.

Commentary

Portfolio

“Overall, we’re pleased with our first quarter results, which were in line with our expectations,” said Charles A. Ratner, Forest City president and chief executive officer. “The year-over-year increase in total EBDT was driven largely by initial proceeds from our Cleveland casino land and air rights sale, as well as by increased income from tax credits, and a decrease in our allocated losses at the Nets.

“Results from our operating portfolio reflect continued improving fundamentals. Comparable occupancies were up year-over-year in all major product types, with solid gains in both retail and multifamily. Results from our retail portfolio, as measured by comparable property net operating income, showed solid improvement consistent with industry-wide trends. In our residential multifamily portfolio, results from our conventional apartments were up solidly, but the overall increase in multifamily comparable property net operating income was reduced by a year-over-year decline in our senior-housing component as a result of increased operating expenses. Comparable property results in the office portfolio were negatively impacted, as anticipated, by lease expirations at our Brooklyn office properties, although re-leasing efforts to date have exceeded our expectations, reflecting improvement in the overall New York office market. In our Land Segment, pre-tax EBDT was up modestly, but results continue to reflect weak conditions in our traditional land business, which is largely driven by the sale of lots to single-family homebuilders.

Capital Raising

“During the quarter, we continued to take advantage of improving valuations by selectively monetizing assets to generate liquidity and realize value from the portfolio. In addition to the casino land sale, transactions in the quarter included the sale of our interest in Met Lofts, a downtown Los Angeles apartment property, and the sale of the Charleston Marriott hotel in Charleston, West Virginia. The most significant transaction in the first quarter was the completion of our New York retail joint venture with Madison International Realty. That transaction, which resulted in an investment by Madison of $172.3 million, represented a 6.9 percent cap rate on 2010 net operating income for the 15 properties involved. These and other transactions we have executed over the past two years continue to demonstrate the significant value embedded in our portfolio of high-quality assets in strong markets.

“Since the end of the quarter, we have continued to evaluate and selectively take advantage of transactional opportunities. The most recent of these, which was completed May 10, was the sale to USAA Real Estate Company of the first two completed office buildings at our Waterfront Station mixed-use project in Washington, D.C., which opened in the first quarter of 2010. The sale price was $356.0 million, as compared to a cost of $245.9 million at full consolidation, as reflected in our Supplemental Package for the first quarter. Forest City’s share of net proceeds was $61 million, a clear demonstration of our ability to generate real value from our portfolio. Importantly, following the transaction, we and our partners at Waterfront Station retain more than a million square feet of additional future office, residential and retail entitlement. As we have historically, we will continue to selectively evaluate asset sales and joint ventures going forward as a means to generate liquidity and realize value.

“Another notable achievement during the first quarter was the closing of our new, $450 million revolving credit facility with a group of 14 banks. The new credit facility has improved terms, with fewer restrictions and an extended maturity, compared with the facility it replaced. Finally, in the first week of May, we executed privately negotiated exchanges of $40.0 million of our 5.00% Convertible Senior Notes due 2016 for Class A common stock. Both of these achievements reflect the strength of our relationships with our lenders and investors, as well as our commitment to reduce total recourse debt and improve our balance sheet and debt metrics.

Pipeline

“During the first quarter, we continued to make progress on our pipeline of under-construction projects. Of particular note is our 8 Spruce Street apartment high-rise in Lower Manhattan, which began first-phase lease-up on February 18. Market acceptance of this unique, luxury property has been remarkable. As of May 31, 202 leases have been signed, representing 22 percent of the property’s total 903 units at completion. Per-square-foot rates for leases signed to date are in line with our pro-forma for the property.

“Also since the beginning of the fiscal year, we have taken steps to advance new projects that we believe will add to future growth, both within our portfolio and through new opportunities. Leveraging existing entitlement at Stapleton in Denver, we expect to break ground this summer on two new multifamily projects, totaling 338 units. New vertical development is also anticipated in the near term at both Atlantic Yards in Brooklyn and The Yards in Washington, D.C. In the Dallas suburb of Frisco, we’ve entered into a public/private partnership with the city and its community development entity to develop a 320-acre mixed-use project on land we control with our partner. Finally, in San Francisco, Forest City has been selected as developer by the Port of San Francisco to execute the port’s master plan for “Pier 70,” a 25-acre site in a historic marine industrial area on that city’s Central Waterfront.”

Openings and Projects Under Construction

At the end of the first quarter, Forest City had four projects under construction with a total project cost of $1.7 billion at the Company’s pro-rata share ($2.7 billion at full consolidation). Three of the projects are in New York: 8 Spruce Street (formerly Beekman), a 903-unit residential tower in Manhattan, Westchester’s Ridge Hill, a mixed-use retail center in Yonkers, New York, and the Barclays Center arena, the future home of the NBA Nets in Brooklyn. The fourth is Foundry Lofts at The Yards in Washington, D.C.

As referenced above, first-phase lease-up and tenant move-ins on the lower floors are well underway at 8 Spruce Street, the Frank Gehry-designed apartment tower in lower Manhattan. Interior build-out continues on the upper floors, and additional phases of leasing are expected to begin later in 2011 and into the first quarter of 2012.

Leasing efforts and construction continue at Westchester’s Ridge Hill, the company’s mixed-use retail project in Yonkers, New York, with commitments currently for 50 percent of the retail space. In May, the first-phase opening for Cinema De Lux and REI took place. Additional tenant openings are anticipated later in 2011, leading up to the opening of anchor Lord & Taylor in February 2012. The center was the subject of considerable interest from retailers at the recent annual ICSC RECon event in Las Vegas. With economic conditions continuing to improve, retailer interest and leasing activity is accelerating.

Work continues at the Barclays Center at Atlantic Yards, and an official opening date of September 28, 2012 has been set for the arena. Approximately 55 percent of forecasted contractually obligated revenues for the arena are currently under contract. In addition to work on the arena, initial planning, design and engineering work is also underway for the first residential multifamily building at Atlantic Yards.

In Washington, D.C., construction continues on Foundry Lofts, the first residential building at The Yards mixed-use project. The apartment building is scheduled for completion and the beginning of lease-up in the third quarter of 2011. This adaptive reuse of a former Navy Yard industrial building will offer 170 loft-style apartments, including 34 two-level penthouse units, together with a small amount of street-level retail space.

Liquidity and Financing Activity

At April 30, 2011, the Company had $241.7 million ($204.6 million at full consolidation) in cash on its balance sheet, and $256.6 million of available capacity on its revolving line of credit.

Since January 31, 2011, the Company has addressed, through closed loans and committed financings, $664.5 million at full consolidation ($517.0 million at its pro-rata share) of the $1.2 billion ($1.1 billion at pro-rata) of long-term debt maturities coming due in fiscal year 2011. Additionally, the Company addressed $637.3 million ($543.2 million at pro-rata) of loans maturing in future years.

As of April 30, 2011, the Company’s weighted-average cost of nonrecourse debt decreased to 4.95 percent from 5.10 percent at April 30, 2010, primarily due to a decrease in fixed-rate mortgage debt. Fixed-rate mortgage debt, which represented 69 percent of the Company’s total nonrecourse mortgage debt, and is inclusive of interest rate swaps, decreased to 5.85 percent at April 30, 2011 from 6.06 percent and at April 30, 2010. Variable-rate mortgage debt increased from 2.87 percent at April 30, 2010, to 2.92 percent at April 30, 2011.

Outlook

“Forest City’s first-quarter results, as well as those for much of the broader real estate industry, continue to reflect improving conditions,” Ratner concluded. “In addition, development in key markets and property types, particularly multifamily, appears to be coming back into favor as fundamentals improve, asset valuations strengthen, tenants gain more confidence, and lenders and investors shift their focus from defensive strategies to future growth.

“We remain optimistic based on the performance of our portfolio, the strength of our core markets, and the depth of our entitlement. We retain appropriate caution in our outlook, given the many headwinds in the macro environment, ranging from the threat of rising interest rates, to sovereign debt crises in Europe, to federal, state and municipal fiscal concerns here in the U.S.

“Today, Forest City is well-positioned to take advantage of improving fundamentals and market demand. With growth from our portfolio as a strong foundation, we look forward to, and are prepared to take advantage of new opportunities as they arise.”

Corporate Description

Forest City Enterprises, Inc. is a NYSE-listed national real estate company with $11.5 billion in total assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit www.forestcity.net.

Supplemental Package

Please refer to the Investor Relations section of the Company’s website at www.forestcity.net for a Supplemental Package, which the Company will also furnish to the Securities and Exchange Commission (“SEC”) on Form 8-K. This Supplemental Package includes operating and financial information for the three months ended April 30, 2011, with reconciliations of non-GAAP financial measures, such as EBDT, comparable NOI and pro-rata financial statements, to their most directly comparable GAAP financial measures.

EBDT

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

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

EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of rental properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash charges for real estate depreciation, amortization, and amortization of mortgage procurement costs; iv) deferred income taxes; v) preferred payment which is classified as non-controlling interest expense on the Company’s Consolidated Statements of Operations; vi) impairment of real estate (net of tax); vii) extraordinary items (net of tax); and viii) cumulative or retrospective effect of change in accounting principle (net of tax).

EBDT is reconciled to net earnings (loss), the most comparable financial measure calculated in accordance with GAAP, in the table titled Financial Highlights below and in the Company’s Supplemental Package, which the Company will also furnish to the SEC on Form 8-K. The adjustment to recognize rental revenues and rental expenses on the straight-line method is excluded because it is management’s opinion that rental revenues and expenses should be recognized when due from the tenants or due to the landlord. The Company excludes depreciation and amortization expense related to real estate operations from EBDT because it believes the values of its properties, in general, have appreciated over time in excess of their original cost. Deferred income taxes, which are the result of timing differences of certain net expense items deducted in a future year for federal income tax purposes, are excluded until the year in which they are reflected in the Company’s current tax provision. The impairment of real estate is excluded from EBDT because it varies from year to year based on factors unrelated to the Company’s overall financial performance and is related to the ultimate gain on dispositions of operating properties. The Company’s EBDT may not be directly comparable to similarly titled measures reported by other companies.

Pro-Rata Consolidation Method

This press release contains certain financial measures prepared in accordance with GAAP under the full consolidation accounting method and certain financial measures prepared in accordance with the pro-rata consolidation method (non-GAAP). The Company presents certain financial amounts under the pro-rata method because it believes this information is useful to investors as this method reflects the manner in which the Company operates its business. In line with industry practice, the Company has made a large number of investments in which its economic ownership is less than 100 percent as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, the Company generally presents its investments proportionate to its economic share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities consolidated at

100 percent if deemed to be under its control or if the Company is deemed to be the primary beneficiary of the variable interest entities (“VIE”), even if its ownership is not 100 percent. The Company provides reconciliations from the full consolidation method to the pro-rata consolidation method in the exhibits below and throughout its Supplemental Package, which the Company will also furnish to the SEC on Form 8-K.

Safe Harbor Language

Statements made in this news release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company’s actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the impact of current lending and capital market conditions on our liquidity, ability to finance or refinance projects and repay our debt, the impact of the current economic environment on our ownership, development and management of our real estate portfolio, general real estate investment and development risks, vacancies in our properties, further downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts, risks associated with an investment in a professional sports team, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of our insurance carriers, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, volatility in the market price of our publicly traded securities, inflation risks, litigation risks, as well as other risks listed from time to time in the Company’s SEC filings, including but not limited to, the Company’s annual and quarterly reports.

     

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2011 and 2010
(dollars in thousands, except per share data)

		Three Months Ended
		April 30,								Increase (Decrease)
		2011				2010				Amount				Percent
Operating Results:
Earnings (loss) from continuing operations		$	42,978			$	(21,856	)		$	64,834
Discontinued operations, net of tax			5,719				492				5,227
Net earnings (loss)			48,697				(21,364	)			70,061
Earnings from continuing operations attributable to noncontrolling interests			(737	)			5,823				(6,560	)
Earnings from discontinued operations attributable to noncontrolling interests (1)			(393	)			(21	)			(372	)
Net earnings (loss) attributable to Forest City Enterprises, Inc.		$	47,567			$	(15,562	)		$	63,129
Preferred dividends			(3,850	)			-				(3,850	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders		$	43,717			$	(15,562	)		$	59,279
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2)		$	127,376			$	70,467			$	56,909				80.8	%
Reconciliation of Net Earnings (Loss) to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2):
Net earnings (loss) attributable to Forest City Enterprises, Inc.		$	47,567			$	(15,562	)		$	63,129
Depreciation and amortization - Real Estate Groups (7)			68,829				69,954				(1,125	)
Amortization of mortgage procurement costs - Real Estate Groups (7)			3,632				3,062				570
Deferred income tax expense (8)			4,813				(15,376	)			20,189
Remove deferred income tax expense for non-Real Estate Groups in 2010 (8)			-				5,133				(5,133	)
Current income tax expense on non-operating earnings: (8)
Gain on disposition of rental properties and partial interest in rental properties			30,304				13,724				16,580
Gain on disposition included in discontinued operations			1,201				-				1,201
Straight-line rent adjustment (4)			(2,224	)			(3,038	)			814
Preference payment (6)			585				585				-
Impairment of consolidated real estate			4,835				-				4,835
Impairment of unconsolidated real estate			-				12,899				(12,899	)
Gain on disposition of rental properties and partial interest in rental properties			(9,561	)			(866	)			(8,695	)
Gain on disposition of unconsolidated entities			(12,567	)			(48	)			(12,519	)
Discontinued operations: (1)
Gain on disposition of rental properties			(10,431	)			-				(10,431	)
Noncontrolling interest - Gain on disposition			393				-				393
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2)		$	127,376			$	70,467			$	56,909				80.8	%
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) (3) (5)		$	0.63			$	0.37			$	0.26				70.3	%
Diluted Earnings per Common Share:
Earnings (loss) from continuing operations		$	0.23			$	(0.14	)		$	0.37
Discontinued operations, net of tax			0.03				-				0.03
Net earnings (loss)			0.26				(0.14	)			0.40
Earnings from continuing operations attributable to noncontrolling interests			(0.01	)			0.04				(0.05	)
Earnings from discontinued operations attributable to noncontrolling interests (1)			-				-				-
Net earnings attributable to noncontrolling interests			(0.01	)			0.04				(0.05	)
Net earnings (loss) attributable to Forest City Enterprises, Inc.		$	0.25			$	(0.10	)		$	0.35
Preferred dividends			(0.02	)			-				(0.02	)
Interest on convertible debt			0.01				-				0.01
Preferred distribution on Class A Common Units			-				-				-
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders		$	0.24			$	(0.10	)		$	0.34
Basic weighted average shares outstanding (5)			165,498,904				155,352,050				10,146,854
Diluted weighted average shares outstanding (5)			204,975,222				196,290,633				8,684,589

     

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2011 and 2010
(dollars in thousands)

		Three Months Ended
		April 30,								Increase (Decrease)
		2011				2010				Amount				Percent
Operating Earnings (a non-GAAP financial measure) and Reconciliation to Net Earnings:
Revenues from real estate operations
Commercial Group		$	255,287			$	213,210			$	42,077
Residential Group			53,504				51,392				2,112
Land Development Group			8,090				6,858				1,232
The Nets			-				-				-
Corporate Activities			-				-				-
Total Revenues			316,881				271,460				45,421				16.7	%
Operating expenses			(165,688	)			(155,291	)			(10,397	)
Interest expense			(67,994	)			(81,118	)			13,124
Gain (loss) on early extinguishment of debt			(296	)			6,297				(6,593	)
Amortization of mortgage procurement costs (7)			(3,449	)			(2,612	)			(837	)
Depreciation and amortization (7)			(58,391	)			(60,071	)			1,680
Interest and other income			15,507				6,814				8,693
Equity in earnings (loss) of unconsolidated entities, including impairment			19,994				(17,124	)			37,118
Impairment of unconsolidated real estate			-				12,899				(12,899	)
Gain on disposition of unconsolidated entities			(12,567	)			(48	)			(12,519	)
Revenues and interest income from discontinued operations (1)			1,293				10,262				(8,969	)
Expenses from discontinued operations (1)			(1,293	)			(9,474	)			8,181
Operating loss (a non-GAAP financial measure)			43,997				(18,006	)			62,003
Impairment of consolidated real estate			(4,835	)			-				(4,835	)
Impairment of unconsolidated real estate			-				(12,899	)			12,899
Gain on disposition of unconsolidated entities			12,567				48				12,519
Gain on disposition of rental properties and partial interest in rental properties, net of noncontrolling interest			9,561				866				8,695
Gain on disposition of rental properties included in discontinued operations (1)			10,431				-				10,431
Income tax benefit (expense) (8)
Operating earnings			13,294				6,975				6,319
Deferred taxes			(4,813	)			15,376				(20,189	)
Gain on disposition of rental properties and partial interest in rental properties			(31,505	)			(13,724	)			(17,781	)
Income tax benefit (expense)			(23,024	)			8,627				(31,651	)
Net earnings (loss)			48,697				(21,364	)			70,061
Noncontrolling Interests
Earnings from continuing operations attributable to noncontrolling interests			(737	)			5,823				(6,560	)
Earnings from discontinued operations attributable to noncontrolling interests (1)
Operating earnings			-				(21	)			21
Gain on disposition of rental properties			(393	)			-				(393	)
			(393	)			(21	)			(372	)
Noncontrolling Interests			(1,130	)			5,802				(6,932	)
Net earnings (loss) attributable to Forest City Enterprises, Inc.		$	47,567			$	(15,562	)		$	63,129
Preferred dividends			(3,850	)			-				(3,850	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders		$	43,717			$	(15,562	)		$	59,279

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2011 and 2010
(in thousands)

1) All earnings of properties which have been sold or are held for sale are reported as discontinued operations assuming no significant continuing involvement.

2) The Company uses an additional measure, along with net earnings, to report its operating results. This measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results as defined by generally accepted accounting principles and may not be directly comparable to similarly-titled measures reported by other companies. The Company believes that EBDT provides additional information about its operations, and along with net earnings, is necessary to understand its operating results. EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of operating properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash charges for real estate depreciation, amortization (including amortization of mortgage procurement costs) and deferred income taxes; iv) preferred payment classified as noncontrolling interest expense on the Company’s Consolidated Statement of Earnings; v) impairment of real estate (net of tax); vi) extraordinary items (net of tax); and vii) cumulative or retrospective effect of change in accounting principle (net of tax). See our discussion of EBDT in the news release.

3) For the three months ended April 30, 2011 and 2010, the calculation of EBDT per share under the if-converted method requires an adjustment for interest of $1,798 and $2,640, respectively, related to the 3.625% Puttable Senior Notes and the 5% Convertible Senior Notes. Therefore EBDT for purposes of calculating per share data is $129,174 and $73,107 for the three months ended April 30, 2011 and 2010, respectively.

4) The Company recognizes minimum rents on a straight-line basis over the term of the related lease pursuant to accounting for leases. The straight-line rent adjustment is recorded as an increase or decrease to revenue or operating expense from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., with the applicable offset to either accounts receivable or accounts payable, as appropriate.

5) For the three months ended April 30, 2011, weighted average shares issuable upon the conversion of preferred stock of 14,550,257 are not included in the calculation of earnings per share because they are anti-dilutive. They are included in the calculation of EBDT per share because they are dilutive to this measure.

  For the three months ended April 30, 2010, the effect of 40,938,583 shares of dilutive securities were not included in the computation of diluted earnings per share because their effect is anti-dilutive to the loss from continuing operations. (Since these shares are dilutive for the computation of EBDT per share for the three months ended April 30, 2010, diluted weighted average shares outstanding of 196,290,633 were used to arrive at $0.37/share.)

6) The preference payment represents the respective period’s share of the annual preferred payment in connection with the issuance of Class A Common Units in exchange for Bruce C. Ratner’s noncontrolling interest in the Forest City Ratner Companies portfolio.

7) The following table provides detail of depreciation and amortization and amortization of mortgage procurement costs.

		Depreciation and Amortization
		Three Months Ended April 30,
		2011				2010
Full Consolidation		$	58,391			$	60,071
Non-Real Estate			(702	)			(1,568	)
Real Estate Groups Full Consolidation			57,689				58,503
Real Estate Groups related to noncontrolling interest			(2,550	)			(1,785	)
Real Estate Groups Unconsolidated			13,690				11,368
Real Estate Groups Discontinued Operations			-				1,868
Real Estate Groups Pro-Rata Consolidation		$	68,829			$	69,954
		Amortization of Mortgage Procurement Costs
		Three Months Ended April 30,
		2011				2010
Full Consolidation		$	3,449			$	2,612
Non-Real Estate			-				-
Real Estate Groups Full Consolidation			3,449				2,612
Real Estate Groups related to noncontrolling interest			(435	)			(89	)
Real Estate Groups Unconsolidated			618				484
Real Estate Groups Discontinued Operations			-				55
Real Estate Groups Pro-Rata Consolidation		$	3,632			$	3,062

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2011 and 2010
(in thousands)

		Three Months Ended April 30,
		2011				2010
8) The following table provides detail of Income Tax Expense (Benefit):		(in thousands)
Current taxes
Operating Earnings		$	(13,244	)		$	(7,105	)
Gain on disposition of rental properties and partial interest in rental properties			30,304				13,724
Subtotal			17,060				6,619
Discontinued operations
Operating Earnings			(50	)			130
Gain on disposition of rental properties and partial interest in rental properties			1,201				-
Subtotal			1,151				130
Total Current taxes			18,211				6,749
Deferred taxes
Continuing operations		$	1,252			$	(15,542	)
Discontinued operations			3,561				166
Total Deferred taxes			4,813				(15,376	)
Grand Total		$	23,024			$	(8,627	)
2010 Recap of Grand Total:
Real Estate Groups
Current							8,519
Deferred							(10,243	)
							(1,724	)
Non-Real Estate Groups
Current							(1,770	)
Deferred							(5,133	)
							(6,903	)
Grand Total						$	(8,627	)

     

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

		Three Months Ended April 30, 2011																					Three Months Ended April 30, 2010
										Plus																					Plus
		Full				Less				Unconsolidated				Plus				Pro-Rata					Full				Less				Unconsolidated				Plus				Pro-Rata
		Consolidation				Noncontrolling				Investments at				Discontinued				Consolidation					Consolidation				Noncontrolling				Investments at				Discontinued				Consolidation
		(GAAP)				Interest				Pro-Rata				Operations				(Non-GAAP)					(GAAP)				Interest				Pro-Rata				Operations				(Non-GAAP)
Revenues from real estate operations		$	316,881			$	17,240			$	82,714			$	1,293			$	383,648				$	271,460			$	13,092			$	73,473			$	10,184			$	342,025
Exclude straight-line rent adjustment (1)			(3,435	)			-				-				-				(3,435	)				(4,117	)			-				-				(163	)			(4,280	)
Adjusted revenues			313,446				17,240				82,714				1,293				380,213					267,343				13,092				73,473				10,021				337,745
Add interest and other income			15,507				(140	)			117				-				15,764					6,814				899				14,816				3				20,734
Add equity in earnings (loss) of unconsolidated entities, including impairment			19,994				48				(20,299	)			-				(353	)				(17,124	)			(6,444	)			10,953				-				273
Exclude gain on disposition of unconsolidated entities			(12,567	)			-				12,567				-				-					(48	)			-				48				-				-
Exclude impairment of unconsolidated real estate			-				-				-				-				-					12,899				-				(12,899	)			-				-
Exclude depreciation and amortization of unconsolidated entities (see below)			14,308				-				(14,308	)			-				-					11,852				-				(11,852	)			-				-
Adjusted total income			350,688				17,148				60,791				1,293				395,624					281,736				7,547				74,539				10,024				358,752
Operating expenses			165,688				8,967				37,684				1,247				195,652					155,291				6,363				53,636				5,647				208,211
Add back non-Real Estate depreciation and amortization (b)			702				-				-				-				702					1,568				-				878				-				2,446
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d)			-				-				-				-				-					-				-				69				-				69
Exclude straight-line rent adjustment (2)			(1,211	)			-				-				-				(1,211	)				(1,242	)			-				-				-				(1,242	)
Exclude preference payment			(585	)			-				-				-				(585	)				(585	)			-				-				-				(585	)
Adjusted operating expenses			164,594				8,967				37,684				1,247				194,558					155,032				6,363				54,583				5,647				208,899
Net operating income			186,094				8,181				23,107				46				201,066					126,704				1,184				19,956				4,377				149,853
Interest expense			(67,994	)			(4,455	)			(23,107	)			(46	)			(86,692	)				(81,118	)			(5,133	)			(19,956	)			(1,850	)			(97,791	)
Gain (loss) on early extinguishment of debt			(296	)			(4	)			-				-				(292	)				6,297				-				-				-				6,297
Equity in earnings (loss) of unconsolidated entities, including impairment			(19,994	)			(48	)			20,299				-				353					17,124				6,444				(10,953	)			-				(273	)
Gain on disposition of unconsolidated entities			12,567				-				-				-				12,567					48				-				-				-				48
Impairment of unconsolidated real estate			-				-				-				-				-					(12,899	)			-				-				-				(12,899	)
Depreciation and amortization of unconsolidated entities (see above)			(14,308	)			-				14,308				-				-					(11,852	)			-				11,852				-				-
Net gain on disposition of rental properties and partial interests in rental properties			9,561				-				-				10,038				19,599					866				-				-				-				866
Impairment of consolidated real estate			(4,835	)			-				-				-				(4,835	)				-				-				-				-				-
Depreciation and amortization - Real Estate Groups (a)			(57,689	)			(2,550	)			(13,690	)			-				(68,829	)				(58,503	)			(1,785	)			(11,368	)			(1,868	)			(69,954	)
Amortization of mortgage procurement costs - Real Estate Groups (c)			(3,449	)			(435	)			(618	)			-				(3,632	)				(2,612	)			(89	)			(484	)			(55	)			(3,062	)
Straight-line rent adjustment (1) + (2)			2,224				-				-				-				2,224					2,875				-				-				163				3,038
Preference payment			(585	)			-				-				-				(585	)				(585	)			-				-				-				(585	)
Earnings (loss) before income taxes			41,296				689				20,299				10,038				70,944					(13,655	)			621				(10,953	)			767				(24,462	)
Income tax provision			(18,312	)			-				-				(4,712	)			(23,024	)				8,923				-				-				(296	)			8,627
Equity in earnings (loss) of unconsolidated entities, including impairment			19,994				48				(20,299	)			-				(353	)				(17,124	)			(6,444	)			10,953				-				273
Earnings (loss) from continuing operations			42,978				737				-				5,326				47,567					(21,856	)			(5,823	)			-				471				(15,562	)
Discontinued operations, net of tax			5,719				393				-				(5,326	)			-					492				21				-				(471	)			-
Net earnings (loss)			48,697				1,130				-				-				47,567					(21,364	)			(5,802	)			-				-				(15,562	)
Noncontrolling interests
(Earnings) loss from continuing operations attributable to noncontrolling interests			(737	)			(737	)			-				-				-					5,823				5,823				-				-				-
Earnings from discontinued operations attributable to noncontrolling interests			(393	)			(393	)			-				-				-					(21	)			(21	)			-				-				-
Noncontrolling interests			(1,130	)			(1,130	)			-				-				-					5,802				5,802				-				-				-
Net earnings (loss) attributable to Forest City Enterprises, Inc.		$	47,567			$	-			$	-			$	-			$	47,567				$	(15,562	)		$	-			$	-			$	-			$	(15,562	)
Preferred dividends			(3,850	)			-				-				-				(3,850	)				-				-				-				-				-
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders		$	43,717			$	-			$	-			$	-			$	43,717				$	(15,562	)		$	-			$	-			$	-			$	(15,562	)
(a)   Depreciation and amortization - Real Estate Groups		$	57,689			$	2,550			$	13,690			$	-			$	68,829				$	58,503			$	1,785			$	11,368			$	1,868			$	69,954
(b)   Depreciation and amortization - Non-Real Estate			702				-				-				-				702					1,568				-				878				-				2,446
Total depreciation and amortization		$	58,391			$	2,550			$	13,690			$	-			$	69,531				$	60,071			$	1,785			$	12,246			$	1,868			$	72,400
(c)   Amortization of mortgage procurement costs - Real Estate Groups		$	3,449			$	435			$	618			$	-			$	3,632				$	2,612			$	89			$	484			$	55			$	3,062
(d)   Amortization of mortgage procurement costs - Non-Real Estate			-				-				-				-				-					-				-				69				-				69
Total amortization of mortgage procurement costs		$	3,449			$	435			$	618			$	-			$	3,632				$	2,612			$	89			$	553			$	55			$	3,131

     

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

		Net Operating Income (dollars in thousands)
		Three Months Ended April 30, 2011																					Three Months Ended April 30, 2010																				% Change
										Plus																					Plus
						Less				Unconsolidated				Plus				Pro-Rata					Full				Less				Unconsolidated				Plus				Pro-Rata				Full				Pro-Rata
		Full Consolidation				Noncontrolling				Investments at				Discontinued				Consolidation					Consolidation				Noncontrolling				Investments at				Discontinued				Consolidation				Consolidation				Consolidation
		(GAAP)				Interest				Pro-Rata				Operations				(Non-GAAP)					(GAAP)				Interest				Pro-Rata				Operations				(Non-GAAP)				(GAAP)				(Non-GAAP)
Commercial Group
Retail
Comparable		$	56,271			$	2,838			$	6,709			$	-			$	60,142				$	56,102			$	2,848			$	5,369			$	-			$	58,623				0.3	%			2.6	%
Total			58,986				2,893				8,372				-				64,465					61,609				2,924				5,583				2,935				67,203
Office Buildings
Comparable			55,465				2,086				4,816				-				58,195					58,195				2,601				4,074				-				59,668				(4.7	%)			(2.5	%)
Total			63,224				5,148				3,182				-				61,258					63,090				3,859				4,074				-				63,305
Hotels
Comparable			104				-				360				-				464					644				-				368				-				1,012				(83.9	%)			(54.2	%)
Total			104				-				360				46				510					644				-				368				793				1,805
Earnings from Commercial Land Sales (2)			42,585				(782	)			-				-				43,367					289				14				-				-				275
Other (1)			1,064				(54	)			1,938				-				3,056					(5,508	)			358				1,233				-				(4,633	)
Total Commercial Group
Comparable			111,840				4,924				11,885				-				118,801					114,941				5,449				9,811				-				119,303				(2.7	%)			(0.4	%)
Total			165,963				7,205				13,852				46				172,656					120,124				7,155				11,258				3,728				127,955
Residential Group
Apartments
Comparable			25,802				528				6,842				-				32,116					25,234				418				6,745				-				31,561				2.3	%			1.8	%
Total			29,092				1,074				8,276				-				36,294					26,411				462				7,448				649				34,046
Military Housing
Comparable			-				-				-				-				-					-				-				-				-				-
Total			5,590				-				378				-				5,968					6,477				-				370				-				6,847
Land Sales			158				16				-				-				142					-				-				-				-				-
Other (1)			(1,576	)			(390	)			452				-				(734	)				(3,879	)			(228	)			-				-				(3,651	)
Total Residential Group
Comparable			25,802				528				6,842				-				32,116					25,234				418				6,745				-				31,561				2.3	%			1.8	%
Total			33,264				700				9,106				-				41,670					29,009				234				7,818				649				37,242
Total Rental Properties
Comparable			137,642				5,452				18,727				-				150,917					140,175				5,867				16,556				-				150,864				(1.8	%)			0.0	%
Total			199,227				7,905				22,958				46				214,326					149,133				7,389				19,076				4,377				165,197
Land Development Group			2,102				276				149				-				1,975					(653	)			18				(266	)			-				(937	)
The Nets			(304	)			-				-				-				(304	)				(10,430	)			(6,223	)			1,146				-				(3,061	)
Corporate Activities			(14,931	)			-				-				-				(14,931	)				(11,346	)			-				-				-				(11,346	)
Grand Total		$	186,094			$	8,181			$	23,107			$	46			$	201,066				$	126,704			$	1,184			$	19,956			$	4,377			$	149,853