FOREST CITY ENTERPRISES INC - FORM 8-K - EX-99.1 - EXHIBIT

Attached files

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EX-99.2 - EXHIBIT - FOREST CITY ENTERPRISES INC	fceex992erq3-2014.htm
8-K - 8-K - FOREST CITY ENTERPRISES INC	a8kforsupppackq32014.htm

Exhibit 99.1

Forest City Enterprises, Inc.

Supplemental Package

For the Quarter Ended September 30, 2014

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Package

Third Quarter 2014

NYSE: FCEA, FCEB

Index



Corporate Description	2

Selected Financial Information
Consolidated Balance Sheets	5
Consolidated Statements of Operations	9
Net Asset Value Components	13

Supplemental Operating Information
Occupancy Data	15
Retail Sales Data	16
Leasing Summary	17
Comparable Net Operating Income (NOI)	20
NOI Detail	21
NOI By Product Type	23
NOI By Core Market	24
Reconciliation of NOI to Earnings (Loss) Before Income Taxes	25
Results of Operations	27
Reconciliation of Net Earnings (Loss) to FFO	33
Reconciliation of FFO to Operating FFO	34
Operating FFO Bridges	35
Development Pipeline	37

Supplemental Financial Information
Common Stock Data/Financial Covenants	41
Nonrecourse Debt Maturities Table	42
Summary of FFO by Segment	43

This supplemental package, together with other statements and information publicly disseminated by us, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of our Form 10-KT for the 11 months ended December 31, 2013 and other factors that might cause differences, some of which could be material, 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 the ownership, development and management of our commercial real estate portfolio, general real estate investment and development risks, using modular construction as a new construction methodology and investing in a facility to produce modular units, 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 of owning and operating an arena, 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, changes in federal, state or local tax laws, volatility in the market price of our publicly traded securities, inflation risks, litigation risks, cybersecurity risks and cyber incidents, as well as other risks listed from time to time in our reports filed with the Securities and Exchange Commission. We have no obligation to revise or update any forward-looking statements, other than imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial and Operating Information

Corporate Description

We principally engage in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. We operate through three strategic business units and have five reportable operating segments. The three strategic business units, which represent four reportable operating segments, are the Commercial Group, Residential Group and Land Development Group (collectively, the “Real Estate Groups”). The Commercial Group, our largest strategic business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office and life science buildings and mixed-use projects. Additionally, it operates Barclays Center, a sports and entertainment arena located in Brooklyn, New York, which is reported as a separate reportable operating segment (“Arena”). The Residential Group owns, develops, acquires and operates residential rental properties, including upscale and middle-market apartments and adaptive re-use developments. The Residential Group also owns interests in entities that develop and manage military family housing. The Land Development Group acquires and sells both land and developed lots to residential, commercial and industrial customers at its Stapleton project in Denver, Colorado.

Corporate Activities is the other reportable operating segment, which includes our equity method investment in The Nets, a member of the National Basketball Association (“NBA”).

We have approximately $8.2 billion of consolidated assets in 24 states and the District of Columbia at September 30, 2014. Our core markets include Boston, Chicago, Dallas, Denver, Los Angeles, Philadelphia and the greater metropolitan areas of New York City, San Francisco and Washington D.C. We have offices in Albuquerque, Boston, Dallas, Denver, Los Angeles, New York City, San Francisco, Washington, D.C. and our corporate headquarters in Cleveland, Ohio.

Supplemental Financial and Operating Information

We recommend this supplemental package be read in conjunction with our Form 10-Q for the three and nine months ended September 30, 2014. This supplemental package contains information prepared in accordance with generally accepted accounting principles (“GAAP”) under the full consolidation accounting method and information prepared under the pro-rata consolidation method, a non-GAAP measure. We present certain financial amounts under the pro-rata consolidation method because we believe this information is useful to investors as this method reflects the manner in which we operate our business. We believe the non-GAAP financial and operating information presented under the pro-rata consolidation method, net operating income ("NOI"), comparable NOI, Funds From Operations ("FFO") and Operating FFO are necessary to understand our business and operating results, along with net earnings and other GAAP measures. Our investors can use these non-GAAP measures as supplementary information to evaluate our business. Our non-GAAP measures are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP measures.

Change in Fiscal Year-End

Due to the change of our fiscal year-end to December 31 from January 31, effective December 31, 2013, the financial and operating information for the three and nine months ended September 30, 2013 are presented to allow for comparison between periods.

Consolidation Methods

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

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial and Operating Information

FFO

The majority of our peers in the publicly traded real estate industry are Real Estate Investment Trusts ("REITs") and report operations using FFO as defined by the National Association of Real Estate Investment Trusts (“NAREIT”). Although we are not a REIT, we believe it is important to publish this measure to allow for easier comparison of our performance to our peers. The major difference between us and our REIT peers is that we are a taxable entity and any taxable income we generate could result in payment of federal or state income taxes. Our REIT peers typically do not pay federal or state income taxes, but distribute a significant portion of their taxable income to shareholders. Due to our effective tax management policies, we have not historically been a significant payer of income taxes. This has allowed us to retain our internally generated cash flows but has also resulted in large non-cash expenses for deferred taxes as required by GAAP.

FFO is defined by NAREIT as net earnings excluding the following items at our proportionate share: i) gain (loss) on disposition of rental properties, divisions and other investments (net of tax); ii) non-cash charges for real estate depreciation and amortization; iii) impairment of depreciable real estate (net of tax); iv) extraordinary items (net of tax); and v) cumulative or retrospective effect of change in accounting principle (net of tax).

Operating FFO

In addition to reporting FFO, we report Operating FFO as an additional measure of our operating performance. We believe it is appropriate to adjust FFO for significant items driven by transactional activity and factors relating to the financial and real estate markets, rather than factors specific to the on-going operating performance of our properties. We use Operating FFO as an indicator of continuing operating results in planning and executing our business strategy. Operating FFO should not be considered to be an alternative to net earnings computed under GAAP as an indicator of our operating performance and may not be directly comparable to similarly-titled measures reported by other companies.

We define Operating FFO as FFO adjusted to exclude: i) activity related to our land held for divestiture (including impairment charges); ii) impairment of non-depreciable real estate; iii) write-offs of abandoned development projects; iv) income recognized on state and federal historic and other tax credits; v) gains or losses from extinguishment of debt; vi) change in fair market value of nondesignated hedges; vii) gains or losses on change in control of interests; viii) the adjustment to recognize rental revenues and rental expense using the straight-line method; ix) participation payments to ground lessors on refinancing of our properties; x) other transactional items; xi) the Nets pre-tax FFO; and xii) income taxes on FFO.

NOI

NOI, a non-GAAP measure, is defined as revenues (excluding straight-line rent adjustments) less operating expenses (including depreciation and amortization for non-real estate groups) plus interest income, equity in earnings (loss) of unconsolidated entities (excluding gain (loss) on disposition, gain (loss) on land held for divestiture activity, impairment, interest expense, gain (loss) on extinguishment of debt and depreciation and amortization of unconsolidated entities). We believe NOI provides additional information about our core operations and, along with earnings, is necessary to understand our business and operating results. NOI may not be directly comparable to similarly-titled measures reported by other companies.

Supplemental Operating Information

The operating information contained in this document includes: occupancy data, retail sales data, leasing summaries, comparable NOI, NOI by product type and core market, reconciliation of NOI to earnings (loss) before income taxes, results of operations discussion, reconciliation of net earnings (loss) to FFO, reconciliation of FFO to Operating FFO, Operating FFO bridges and our development pipeline. We believe this information gives interested parties a better understanding and more information about our operating performance. The term “comparable,” which is used throughout this document, is generally defined as including stabilized properties that were open and operated in both the three and nine months ended September 30, 2014 and 2013.

We believe occupancy data, retail sales data, leasing spreads on retail and office properties, and other rental rate information on multi-family properties represent meaningful operating statistics about us.

Comparable NOI is useful because it measures the performance of the same stabilized properties on a period-to-period basis and is used to assess operating performance and resource allocation of the operating properties within our strategic business units. While property dispositions, acquisitions or other factors can impact net earnings in the short term, we believe comparable NOI gives a more consistent view of the overall performance of our operating portfolio from quarter-to-quarter and year-to-year. A reconciliation of NOI to earnings (loss) before income taxes, the most comparable financial measure calculated in accordance with GAAP, a reconciliation of NOI to earnings (loss) before income taxes for each strategic business unit and a reconciliation from NOI to comparable NOI are included in this supplemental package.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial and Operating Information

Corporate Headquarters

Forest City Enterprises, Inc.

Terminal Tower

50 Public Square, Suite 1100

Cleveland, Ohio 44113

Annual Report on Form 10-KT

A copy of the Annual Report on Form 10-KT as filed with the Securities and Exchange Commission for the 11 months ended December 31, 2013, as amended on Form 10-KT/A on March 26, 2014, can be found on our website under SEC Filings or may be obtained without charge upon written request to:

Jeffrey B. Linton

Senior Vice President - Corporate Communication

jefflinton@forestcity.net

Website

www.forestcity.net

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

Investor Relations

Jeffrey M. Frericks

Vice President - Capital Markets

Investor Presentations

Please note we periodically post updated investor presentations on the Investors page of our website at www.forestcity.net. It is possible the periodic updates may include information deemed to be material. Therefore, we encourage investors, the media, and other interested parties to review the Investors page of our website at www.forestcity.net for the most recent investor presentation.

Transfer Agent and Registrar

Wells Fargo

Shareowner Services

P.O. Box 64854

St. Paul, MN 55164-9440

(800) 468-9716

www.shareowneronline.com

NYSE Listings

FCEA - Class A Common Stock ($.33 1/3 par value)

FCEB - Class B Common Stock ($.33 1/3 par value)

Dividend Reinvestment and Stock Purchase Plan

We offer our shareholders the opportunity to purchase additional shares of common stock through the Forest City Enterprises, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”) at 97% of current market value. You may obtain a copy of the Plan prospectus and an enrollment card by contacting Wells Fargo Shareowner Services at (800) 468-9716 or by visiting www.shareowneronline.com.

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet – September 30, 2014 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties
Residential	$	1,965,086		$	26,172		$	1,099,585		$	3,038,499
Commercial
Retail centers	1,624,625			—			1,675,424			3,300,049
Office buildings	2,621,517			106,131			264,267			2,779,653
Arena	938,511			578,474			—			360,037
Corporate and other equipment	11,298			—			—			11,298
Total completed rental properties	7,161,037			710,777			3,039,276			9,489,536
Projects under construction
Residential	326,626			67,183			5,762			265,205
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			25,676			25,676
Total projects under construction	326,626			67,183			31,438			290,881
Projects under development
Operating properties	21,537			—			9,860			31,397
Residential	144,230			22,243			190,242			312,229
Commercial
Retail centers	31,304			—			3,912			35,216
Office buildings	111,272			9,395			3,152			105,029
Total projects under development	308,343			31,638			207,166			483,871
Total projects under construction and development	634,969			98,821			238,604			774,752
Land inventory	113,892			5,847			8,368			116,413
Total Real Estate	7,909,898			815,445			3,286,248			10,380,701
Less accumulated depreciation	(1,567,874		)	(89,670		)	(700,653		)	(2,178,857		)
Real Estate, net	6,342,024			725,775			2,585,595			8,201,844
Cash and equivalents	181,656			27,243			65,567			219,980
Restricted cash	241,391			24,072			135,867			353,186
Notes and accounts receivable, net	442,624			35,485			49,704			456,843
Investments in and advances to unconsolidated entities	605,008			(102,647		)	(585,098		)	122,557
Lease and mortgage procurement costs, net	158,388			20,045			82,335			220,678
Prepaid expenses and other deferred costs, net	132,102			12,732			12,187			131,557
Intangible assets, net	105,737			—			15,890			121,627
Total Assets	$	8,208,930		$	742,705		$	2,362,047		$	9,828,272

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet – September 30, 2014 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Liabilities and Equity
Liabilities
Mortgage debt and notes payable, nonrecourse
Completed rental properties
Residential	$	1,195,938		$	19,722		$	810,546		$	1,986,762
Commercial
Retail centers	541,199			—			1,304,683			1,845,882
Office buildings	1,658,789			72,652			237,590			1,823,727
Arena	457,738			310,988			—			146,750
Total completed rental properties	3,853,664			403,362			2,352,819			5,803,121
Projects under construction
Residential	126,307			15,686			1,056			111,677
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			9,878			9,878
Total projects under construction	126,307			15,686			10,934			121,555
Projects under development
Operating properties	5,000			—			—			5,000
Residential	31,425			—			75,900			107,325
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			—			—
Total projects under development	36,425			—			75,900			112,325
Total projects under construction and development	162,732			15,686			86,834			233,880
Land inventory	—			—			8,580			8,580
Total mortgage debt and notes payable, nonrecourse	4,016,396			419,048			2,448,233			6,045,581
Revolving credit facility	—			—			—			—
Convertible senior debt	700,000			—			—			700,000
Construction payables	106,386			29,463			21,709			98,632
Operating accounts payable and accrued expenses	585,192			79,559			163,677			669,310
Accrued derivative liability	106,688			5			7,092			113,775
Total Accounts payable, accrued expenses and other liabilities	798,266			109,027			192,478			881,717
Cash distributions and losses in excess of investments in unconsolidated entities	278,168			(21,821		)	(278,664		)	21,325
Deferred income taxes	451,752			—			—			451,752
Total Liabilities	6,244,582			506,254			2,362,047			8,100,375
Redeemable Noncontrolling Interest	186,834			186,834			—			—
Equity
Shareholders’ Equity
Shareholders’ equity before accumulated other comprehensive loss	1,637,543			—			—			1,637,543
Accumulated other comprehensive loss	(61,308		)	—			—			(61,308		)
Total Shareholders’ Equity	1,576,235			—			—			1,576,235
Noncontrolling interest	201,279			49,617			—			151,662
Total Equity	1,777,514			49,617			—			1,727,897
Total Liabilities and Equity	$	8,208,930		$	742,705		$	2,362,047		$	9,828,272

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet – December 31, 2013 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties
Residential	$	1,800,946		$	22,962		$	1,071,445		$	2,849,429
Commercial
Retail centers	1,848,072			—			1,694,443			3,542,515
Office buildings	2,713,461			107,314			272,577			2,878,724
Arena	933,353			577,275			—			356,078
Corporate and other equipment	11,401			—			—			11,401
Total completed rental properties	7,307,233			707,551			3,038,465			9,638,147
Projects under construction
Residential	260,579			95,019			64,305			229,865
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			13,001			13,001
Total projects under construction	260,579			95,019			77,306			242,866
Projects under development
Operating properties	17,474			—			3,560			21,034
Residential	144,313			20,841			6,049			129,521
Commercial
Retail centers	27,284			—			3,461			30,745
Office buildings	85,829			14,259			3,110			74,680
Total projects under development	274,900			35,100			16,180			255,980
Total projects under construction and development	535,479			130,119			93,486			498,846
Land inventory	128,688			6,575			7,705			129,818
Total Real Estate	7,971,400			844,245			3,139,656			10,266,811
Less accumulated depreciation	(1,469,328		)	(61,112		)	(690,053		)	(2,098,269		)
Real Estate, net	6,502,072			783,133			2,449,603			8,168,542
Cash and equivalents	280,206			26,179			57,704			311,731
Restricted cash and escrowed funds	347,534			82,505			80,244			345,273
Notes and accounts receivable, net	455,561			37,482			51,800			469,879
Investments in and advances to unconsolidated entities	447,165			(247,642		)	(423,838		)	270,969
Lease and mortgage procurement costs, net	167,487			19,583			91,599			239,503
Prepaid expenses and other deferred costs, net	142,465			14,951			12,038			139,552
Intangible assets, net	105,364			—			16,812			122,176
Development project held for sale	504,171			137,341			—			366,830
Total Assets	$	8,952,025		$	853,532		$	2,335,962		$	10,434,455

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet – December 31, 2013 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Liabilities and Equity
Liabilities
Mortgage debt and notes payable, nonrecourse
Completed rental properties
Residential	$	1,151,183		$	18,771		$	815,368		$	1,947,780
Commercial
Retail centers	866,022			—			1,327,956			2,193,978
Office buildings	1,711,904			73,966			229,288			1,867,226
Arena	450,560			305,489			—			145,071
Total completed rental properties	4,179,669			398,226			2,372,612			6,154,055
Projects under construction
Residential	135,517			42,569			31,059			124,007
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			—			—
Total projects under construction	135,517			42,569			31,059			124,007
Projects under development
Operating properties	5,000			—			—			5,000
Residential	31,320			—			—			31,320
Commercial
Retail centers	—			—			—			—
Office buildings	—			—			—			—
Total projects under development	36,320			—			—			36,320
Total projects under construction and development	171,837			42,569			31,059			160,327
Land inventory	—			—			8,580			8,580
Total mortgage debt and notes payable, nonrecourse	4,351,506			440,795			2,412,251			6,322,962
Revolving credit facility	—			—			—			—
Convertible senior debt	700,000			—			—			700,000
Construction payables	132,008			34,922			16,669			113,755
Operating accounts payable and accrued expenses	576,805			73,535			165,378			668,648
Accrued derivative liability	123,107			25			7,299			130,381
Total Accounts payable, accrued expenses and other liabilities	831,920			108,482			189,346			912,784
Cash distributions and losses in excess of investments in unconsolidated entities	256,843			(27,049		)	(265,635		)	18,257
Deferred income taxes	485,894			—			—			485,894
Mortgage debt, nonrecourse of development project held for sale	228,000			59,669			—			168,331
Total Liabilities	6,854,163			581,897			2,335,962			8,608,228
Redeemable Noncontrolling Interest	171,743			171,743			—			—
Equity
Shareholders’ Equity
Shareholders’ equity before accumulated other comprehensive loss	1,716,788			—			—			1,716,788
Accumulated other comprehensive loss	(76,582		)	—			—			(76,582		)
Total Shareholders’ Equity	1,640,206			—			—			1,640,206
Noncontrolling interest	285,913			99,892			—			186,021
Total Equity	1,926,119			99,892			—			1,826,227
Total Liabilities and Equity	$	8,952,025		$	853,532		$	2,335,962		$	10,434,455

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statement of Operations – Three Months Ended September 30, 2014 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Revenues
Rental	$	132,536		$	3,701		$	70,180		$	199,015
Tenant recoveries	30,082			1,945			18,374			46,511
Service and management fees	12,150			18			1,828			13,960
Parking and other	13,604			309			5,633			18,928
Arena	25,039			11,380			—			13,659
Land sales	15,123			1,512			247			13,858
Subsidized Senior Housing	—			—			11,010			11,010
Military Housing	6,209			—			1,375			7,584
Total revenues	234,743			18,865			108,647			324,525
Expenses
Property operating and management	92,347			2,758			29,068			118,657
Real estate taxes	19,691			797			9,418			28,312
Ground rent	2,411			95			2,896			5,212
Arena operating	17,105			7,693			—			9,412
Cost of land sales	2,879			266			—			2,613
Subsidized Senior Housing operating	—			—			7,106			7,106
Military Housing operating	1,958			—			778			2,736
Corporate general and administrative	13,763			—			—			13,763
	150,154			11,609			49,266			187,811
Depreciation and amortization	55,511			4,888			21,521			72,144
Write-offs of abandoned development projects and demolition costs	456			—			—			456
Impairment of real estate	966			—			—			966
Total expenses	207,087			16,497			70,787			261,377
Operating income	27,656			2,368			37,860			63,148
Interest expense	(59,312		)	(7,605		)	(25,858		)	(77,565		)
Amortization of mortgage procurement costs	(2,074		)	(43		)	(808		)	(2,839		)
Gain (loss) on extinguishment of debt	(49		)	(37		)	312			300
Interest and other income	10,096			469			97			9,724
Net gain (loss) on disposition of full or partial interests in rental properties	(146		)	27			9,189			9,016
Earnings (loss) before income taxes	(23,829		)	(4,821		)	20,792			1,784
Income tax expense (benefit)
Current	3,493			—			—			3,493
Deferred	(3,858		)	—			—			(3,858		)
	(365		)	—			—			(365		)

Earnings (loss) from unconsolidated entities, gross of tax	19,346			17			(20,792		)	(1,463		)
Net loss	(4,118		)	(4,804		)	—			686
Noncontrolling interests
Loss attributable to noncontrolling interests, gross of tax	4,804			4,804			—			—

Net earnings attributable to Forest City Enterprises, Inc.	$	686		$	—		$	—		$	686

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statement of Operations – Nine Months Ended September 30, 2014 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Revenues
Rental	$	391,019		$	11,091		$	212,277		$	4,015		$	596,220
Tenant recoveries	89,146			5,234			55,530			1,377			140,819
Service and management fees	36,053			95			5,433			—			41,391
Parking and other	38,272			800			16,690			36			54,198
Arena	84,968			38,420			—			—			46,548
Land sales	50,367			4,974			2,688			1,601			49,682
Subsidized Senior Housing	—			—			32,750			—			32,750
Military Housing	24,092			1,358			4,221			—			26,955
Total revenues	713,917			61,972			329,589			7,029			988,563
Expenses
Property operating and management	283,075			6,118			84,326			2,539			363,822
Real estate taxes	59,445			2,404			27,968			(667		)	84,342
Ground rent	6,465			270			10,030			—			16,225
Arena operating	55,399			24,805			—			—			30,594
Cost of land sales	17,081			1,524			990			1,142			17,689
Subsidized Senior Housing operating	—			—			21,731			—			21,731
Military Housing operating	10,216			1,311			2,301			—			11,206
Corporate general and administrative	35,383			—			—			—			35,383
	467,064			36,432			147,346			3,014			580,992
Depreciation and amortization	169,838			14,250			64,504			986			221,078
Write-offs of abandoned development projects and demolition costs	1,389			—			—			—			1,389
Impairment of real estate	130,795			—			—			—			130,795
Total expenses	769,086			50,682			211,850			4,000			934,254
Operating income (loss)	(55,169		)	11,290			117,739			3,029			54,309
Interest expense	(178,917		)	(19,981		)	(81,763		)	(5,538		)	(246,237		)
Amortization of mortgage procurement costs	(5,967		)	(293		)	(2,397		)	(41		)	(8,112		)
Gain (loss) on extinguishment of debt	(927		)	(37		)	16			(448		)	(1,322		)
Interest and other income	33,974			1,501			293			—			32,766
Net loss on disposition of partial interest in development project	(19,590		)	(3,379		)	—			—			(16,211		)
Net gain (loss) on disposition of full or partial interests in rental properties	(613		)	27			50,075			28,042			77,477
Earnings (loss) before income taxes	(227,209		)	(10,872		)	83,963			25,044			(107,330		)
Income tax expense (benefit)
Current	8,992			—			—			3,675			12,667
Deferred	(52,373		)	—			—			8,407			(43,966		)
	(43,381		)	—			—			12,082			(31,299		)
Net gain on change in control of interests	2,759			—			—			—			2,759
Earnings (loss) from unconsolidated entities, gross of tax	80,543			94			(83,963		)	—			(3,514		)
Earnings (loss) from continuing operations	(100,526		)	(10,778		)	—			12,962			(76,786		)
Discontinued operations, net of tax
Operating loss from rental properties	(1,844		)	(8		)	—			1,836			—
Gain on disposition of rental properties	14,856			58			—			(14,798		)	—
	13,012			50			—			(12,962		)	—
Net loss	(87,514		)	(10,728		)	—			—			(76,786		)
Noncontrolling interests
Loss from continuing operations attributable to noncontrolling interests, gross of tax	10,778			10,778			—			—			—
Earnings from discontinued operations attributable to noncontrolling interests	(50		)	(50		)	—			—			—
	10,728			10,728			—			—			—
Net loss attributable to Forest City Enterprises, Inc.	$	(76,786	)	$	—		$	—		$	—		$	(76,786	)

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statement of Operations – Three Months Ended September 30, 2013 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Revenues
Rental	$	151,855		$	5,353		$	63,874		$	9,033		$	219,409
Tenant recoveries	37,890			2,128			15,032			2,863			53,657
Service and management fees	14,040			39			1,122			2			15,125
Parking and other	13,637			339			5,721			79			19,098
Arena	25,277			11,451			—			—			13,826
Land sales	22,523			1,967			—			—			20,556
Subsidized Senior Housing	—			—			10,851			—			10,851
Military Housing	11,471			1,774			1,357			—			11,054
Total revenues	276,693			23,051			97,957			11,977			363,576
Expenses
Property operating and management	107,140			2,723			26,142			4,247			134,806
Real estate taxes	20,825			803			8,246			2,340			30,608
Ground rent	1,181			93			4,072			—			5,160
Arena operating	16,286			7,175			—			—			9,111
Cost of land sales	14,186			1,028			81			—			13,239
Subsidized Senior Housing operating	—			—			7,549			—			7,549
Military Housing operating	7,890			1,684			746			—			6,952
Corporate general and administrative	13,994			—			—			—			13,994
	181,502			13,506			46,836			6,587			221,419
Depreciation and amortization	88,232			4,821			17,261			3,044			103,716
Write-offs of abandoned development projects and demolition costs	3,459			—			—			—			3,459
Impairment of real estate	—			—			—			6,870			6,870
Net (gain) loss on land held for divestiture activity	8,925			720			(79		)	—			8,126
Total expenses	282,118			19,047			64,018			16,501			343,590
Operating income (loss)	(5,425		)	4,004			33,939			(4,524		)	19,986

Interest expense	(82,253		)	(6,898		)	(24,339		)	(3,436		)	(103,130		)
Amortization of mortgage procurement costs	(2,300		)	(185		)	(743		)	(122		)	(2,980		)
Gain (loss) on extinguishment of debt	23,666			—			(50		)	—			23,616
Interest and other income	14,957			539			128			37			14,583
Net gain on disposition of full or partial interests in rental properties	386,559			—			34,281			22,335			443,175
Earnings (loss) before income taxes	335,204			(2,540		)	43,216			14,290			395,250
Income tax expense (benefit)
Current	36,865			—			—			8,983			45,848
Deferred	108,090			—			—			(229		)	107,861
	144,955			—			—			8,754			153,709
Earnings from unconsolidated entities, gross of tax
Equity in earnings	43,924			472			(43,137		)	—			315
Net gain on land held for divestiture activity	79			—			(79		)	—			—
	44,003			472			(43,216		)	—			315
Earnings (loss) from continuing operations	234,252			(2,068		)	—			5,536			241,856
Discontinued operations, net of tax:
Operating earnings (loss) from rental properties	(706		)	10			—			716			—
Impairment of real estate	(4,206		)	—			—			4,206			—
Gain on disposition of rental properties	10,583			125			—			(10,458		)	—
	5,671			135			—			(5,536		)	—
Net earnings (loss)	239,923			(1,933		)	—			—			241,856
Noncontrolling interests
Loss from continuing operations attributable to noncontrolling interests, gross of tax	2,068			2,068			—			—			—
Earnings from discontinued operations attributable to noncontrolling interests	(135		)	(135		)	—			—			—
	1,933			1,933			—			—			—
Net earnings attributable to Forest City Enterprises, Inc.	$	241,856		$	—		$	—		$	—		$	241,856

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statement of Operations – Nine Months Ended September 30, 2013 (Unaudited)



	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Revenues
Rental	$	449,583		$	14,739		$	195,359		$	37,571		$	667,774
Tenant recoveries	121,881			7,024			44,553			13,085			172,495
Service and management fees	42,448			140			3,773			105			46,186
Parking and other	40,470			983			17,208			896			57,591
Arena	76,270			34,426			—			—			41,844
Land sales	56,992			3,511			—			6,600			60,081
Subsidized Senior Housing	—			—			32,589			—			32,589
Military Housing	36,930			5,949			4,076			—			35,057
Total revenues	824,574			66,772			297,558			58,257			1,113,617
Expenses
Property operating and management	332,498			8,746			80,397			20,295			424,444
Real estate taxes	65,434			2,458			24,597			6,999			94,572
Ground rent	5,184			285			11,024			—			15,923
Arena operating	56,596			25,076			—			—			31,520
Cost of land sales	31,718			1,740			114			5,290			35,382
Subsidized Senior Housing operating	—			—			21,994			—			21,994
Military Housing operating	22,814			5,643			2,241			—			19,412
Corporate general and administrative	38,531			—			—			—			38,531
	552,775			43,948			140,367			32,584			681,778
Depreciation and amortization	236,488			13,620			53,886			11,548			288,302
Write-offs of abandoned development projects and demolition costs	17,012			—			—			—			17,012
Impairment of real estate	1,175			—			—			6,870			8,045
Net (gain) loss on land held for divestiture activity	(3,383		)	5,308			(2,590		)	—			(11,281		)
Total expenses	804,067			62,876			191,663			51,002			983,856
Operating income	20,507			3,896			105,895			7,255			129,761

Interest expense	(246,832		)	(21,314		)	(73,723		)	(11,258		)	(310,499		)
Amortization of mortgage procurement costs	(7,567		)	(530		)	(2,280		)	(483		)	(9,800		)
Gain (loss) on extinguishment of debt	18,718			—			761			(36		)	19,443
Interest and other income	37,382			1,441			391			263			36,595
Net gain on disposition of full or partial interests in rental properties	386,559			—			32,771			37,971			457,301
Earnings (loss) before income taxes	208,767			(16,507		)	63,815			33,712			322,801
Income tax expense (benefit)
Current	(3,265		)	—			—			12,716			9,451
Deferred	121,085			—			—			3,801			124,886
	117,820			—			—			16,517			134,337
Net gain on change in control of interests	2,762			—			—			—			2,762
Earnings (loss) from unconsolidated entities, gross of tax
Equity in earnings (loss)	56,680			(644		)	(61,225		)	—			(3,901		)
Net gain on land held for divestiture activity	2,590			—			(2,590		)	—			—
	59,270			(644		)	(63,815		)	—			(3,901		)
Earnings (loss) from continuing operations	152,979			(17,151		)	—			17,195			187,325
Discontinued operations, net of tax
Operating earnings from rental properties	1,674			74			—			(1,600		)	—
Impairment of real estate	(4,206		)	—			—			4,206			—
Gain on disposition of rental properties	25,761			5,960			—			(19,801		)	—
	23,229			6,034			—			(17,195		)	—
Net earnings (loss)	176,208			(11,117		)	—			—			187,325
Noncontrolling interests
Loss from continuing operations attributable to noncontrolling interests, gross of tax	17,151			17,151			—			—			—
Earnings from discontinued operations attributable to noncontrolling interests	(6,034		)	(6,034		)	—			—			—
	11,117			11,117			—			—			—
Net earnings attributable to Forest City Enterprises, Inc.	$	187,325		$	—		$	—		$	—		$	187,325
Preferred dividends	(185		)	—			—			—			(185		)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	187,140		$	—		$	—		$	—		$	187,140

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Net Asset Value Components – September 30, 2014

The following represents components of our business relevant to calculate Net Asset Value (“NAV”), a non-GAAP measure. There is no directly comparable GAAP financial measure to NAV. We consider NAV to be a useful supplemental measure which assists both management and investors to estimate the fair value of our Company. The calculation of the net asset value involves significant estimates and can be calculated using various methods. Each individual investor must determine the specific methodology, assumptions and estimates to use to arrive at an estimated NAV of the Company.

The components of NAV do not consider the potential changes in rental and fee income streams or development platform. The components include non-GAAP financial measures, such as NOI and information related to our rental properties business prepared using the pro-rata consolidation method. Although these measures are not presented in accordance with GAAP, investors can use these non-GAAP measures as supplementary information to evaluate our business. The non-GAAP measures presented are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP measures.



Net Asset Value Components - September 30, 2014
Completed Rental Properties
	Q3 2014			Net Stabilized			Stabilized			Annualized			Nonrecourse
(Dollars in millions at pro-rata)	NOI⁽¹⁾			Adjustments⁽²⁾			NOI			Stabilized NOI⁽³⁾			Debt⁽⁴⁾⁽⁵⁾
Commercial Real Estate	A			B			=A+B
Retail
Regional Malls	$	31.4		$	2.3		$	33.7		$	134.8		$	(1,319.6	)
Specialty Retail Centers	13.8			(0.3		)	13.5			54.0			(526.3		)
Subtotal Retail	$	45.2		$	2.0		$	47.2		$	188.8		$	(1,845.9	)
Office
Life Science	$	12.7		$	1.4		$	14.1		$	56.4		$	(376.8	)
New York	35.6			0.2			35.8			143.2			(1,201.2		)
Central Business District	5.0			—			5.0			20.0			(95.8		)
Suburban/Other	4.1			—			4.1			16.4			(149.9		)
Subtotal Office	$	57.4		$	1.6		$	59.0		$	236.0		$	(1,823.7	)
Arena	$	4.6		$	4.4		$	9.0		$	35.8		$	(146.8	)
Residential Real Estate
Apartments, Core Markets	$	29.0		$	4.9		$	33.9		$	135.6		$	(1,439.1	)
Apartments, Non-Core Markets	10.3			1.2			11.5			46.0			(424.4		)
Subsidized Senior Housing	3.8			0.3			4.1			16.4			(118.8		)
Military Housing	4.9			(1.1		)	3.8			15.0			(28.8		)

Subtotal Rental Properties	$	155.2		$	13.3		$	168.5		$	673.6		$	(5,827.5	)
Other	(8.8		)	—			(8.8		)	(35.0		)	—
Total Rental Properties	$	146.4		$	13.3		$	159.7		$	638.6		$	(5,827.5	)

Development Pipeline										Book Value⁽⁴⁾
Projects under construction ⁽⁵⁾										$	259.4		$	(97.3	)
Projects under development										$	483.9		$	(112.3	)
Land inventory										$	116.4		$	(8.6	)
Other Tangible Assets
Cash and equivalents										$	220.0
Restricted cash and escrowed funds										$	353.2
Notes and accounts receivable, net ⁽⁶⁾										$	456.8
Net investments and advances to unconsolidated entities										$	101.2
Prepaid expenses and other deferred costs, net										$	131.6
Recourse Debt and Other Liabilities
Revolving credit facility										$	—
Convertible senior debt										$	(700.0	)
Less: convertible debt										$	700.0
Construction payables										$	(98.6	)
Operating accounts payable and accrued expenses ⁽⁷⁾										$	(669.3	)
Weighted Average Shares Outstanding - Diluted
Number of shares for the three months ended September 30, 2014 (in millions)										235.8

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Net Asset Value Components – September 30, 2014 (continued)


(1)	Q3 2014 NOI is reconciled to NOI at full consolidation by Product Group for the three months ended September 30, 2014 in the Supplemental Operating Information section of this supplemental package.


(2)	The net stabilized adjustments column represents net adjustments required to arrive at an estimated annualized stabilized NOI for those properties currently in initial lease-up periods, net of the removal of partial period NOI for recently sold properties. The following properties are currently in their initial lease-up periods:



Property	Cost at Full Consolidation (GAAP)		Cost at FCE Pro-Rata Share (Non-GAAP)		Lease Commitment % as of October 27, 2014
	(in millions)
Apartments:
Radian	$	0.0	$	65.0	49%; Retail: 100%
The Yards - Twelve12	$	119.5	$	119.5	60%; Retail: 96%
3700M	$	0.0	$	22.7	33%
1111 Stratford (Non-Core Market)	$	23.9	$	23.9	95%
Aster Conservatory Green	$	49.5	$	44.6	80%
Specialty Retail Center:
The Yards - Lumber Shed	$	15.5	$	15.5	100%
Regional Mall:
Westchester's Ridge Hill	$	891.1	$	891.1	67%/77%


a)	NOI for the apartments and specialty retail center in the table above is reflected at 5% of the pro-rata cost. This assumption does not reflect Forest City’s anticipated NOI, but rather is used in order to establish a hypothetical basis for valuation of leased-up properties.

NOI for Westchester's Ridge Hill is reflected at 4% of the pro-rata cost disclosed in the table above. This assumption does not reflect Forest City’s anticipated NOI, but rather is used in order to establish a hypothetical basis for valuation of leased-up properties. The lease commitment percentage above represents approximately 900,000 square feet of leases that have been signed, representing 67% of the total 1,336,000 square feet after construction is complete. The leased percentage excluding Parcel L is 77%. Parcel L is a self contained pad site at the southern end of the center and has been assumed to be leased in the future predominantly to a single retail tenant in its own phase. Given its location on the end of the site, the lease commitment percentage has been presented both with and without the anticipated square footage for Parcel L in the denominator of Gross Leasable Area.


c)	Annual NOI for the Arena is expected to stabilize at approximately $65 million at full consolidation in the 2016 calendar year. Based on the partnership agreement, we expect to receive 55% of the NOI allocation until certain member loans are repaid. Therefore, we have included a stabilization adjustment to the Q3 2014 NOI to arrive at an annual stabilized NOI of $35.8 million.

In addition, we include stabilization adjustments to the Q3 2014 NOI as follows:


d)	Due to temporary declines in occupancy at MIT 88 Sidney (Life Science) and One Pierrepont Plaza (New York Office), we have included stabilization adjustments to the Q3 2014 NOI to arrive at our estimate of stabilized NOI.


e)	Due to ongoing or planned renovations at Ballston Common Mall (Regional Mall) and Heritage (Apartment), we have included stabilization adjustments to the Q3 2014 NOI to arrive at our estimate of stabilized NOI.


f)	Due to quarterly fluctuations of NOI as a result of distribution restrictions from our limited-distribution subsidized senior housing properties, we have included a stabilization adjustment to the Q3 2014 NOI to arrive at our estimate of stabilized NOI.


g)	At the conclusion of the initial development period at each of our military housing communities, we estimate the ongoing property and asset management fees, net of operating expenses, to be $15.0 million.


h)	Other excludes write-offs of abandoned development projects and demolition costs of $0.5 million, tax credit income of $3.5 million and certain variable development and operating overhead.

The net stabilized adjustments are not comparable to any GAAP measure and therefore do not have a reconciliation to the nearest comparable GAAP measure.


(3)	Pro-rata annualized stabilized NOI is calculated by taking the Q3 2014 stabilized NOI times a multiple of four.


(4)	Amounts are derived from the respective pro-rata balance sheet line item as of September 30, 2014 and are reconciled to their GAAP equivalents in the Selected Financial Information section of this supplemental package.

(5)

The Yards - Twelve12 has $31.5 million of project costs and $24.3 million of related mortgage debt at pro-rata consolidation recorded in projects under construction in our balance sheet at September 30, 2014, due to the property's phased opening. For NAV component purposes, these respective project costs and associated mortgage debt have been reclassed from the "Projects under construction" to the "Completed Rental Properties" section, since all NOI for the property is included in the "Completed Rental Properties" section through the net stabilized adjustments column.


(6)	Includes $164.7 million of straight-line rent receivable (net of $10.5 million of allowance for doubtful accounts).


(7)	Includes $37.6 million of straight-line rent payable.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Occupancy Data - September 30, 2014 and 2013

Retail and office occupancy data presented below represents leased occupancy at the end of the quarter. Leased occupancy percentage is calculated by dividing the sum of the total tenant occupied space under the lease and vacant space under lease by gross leasable area ("GLA"). Occupancy data includes leases with original terms of one year or less.



	Leased Occupancy as of September 30,
Retail	2014	2013
Comparable	92.1%	91.6%
Total	91.9%	91.8%
Office
Comparable	92.9%	92.5%
Total	92.4%	91.0%

Residential occupancy data represents economic occupancy, which is calculated by dividing the period-to-date gross potential rent less vacancy by gross potential rent. Residential occupancy data excludes military and limited-distribution subsidized senior housing units.



	Economic Occupancy
	Nine Months Ended September 30,
Residential	2014	2013
Comparable	95.0%	94.8%
Total	92.2%	93.1%

The graph below provides comparable leased occupancy data as reported in previous quarters. Prior period amounts may differ from above because the properties that qualify as comparable change from period to period.

Comparable Occupancy Percentage Recap

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Retail Sales Data

The following provides retail sales data for small shop inline tenants at our regional malls. We believe this data allows investors to better understand the productivity of our small shop inline tenants.

The graph below represents regional mall sales for tenants that were open and operating for the duration of each rolling 12-month period presented. Those tenants that have begun and/or ceased operations in the rolling 12-month periods shown are not included.

FCE Regional Mall Sales per Square Foot ^{(1) (2)}

Rolling 12-month basis for periods presented


(1)	All sales data is derived from schedules provided by our tenants and is not subject to the same internal control and verification procedures that are applied to the other data supplied in this supplemental package.

(2)

The increases for the rolling 12-months ended September 30, 2014, March 31, 2014 and December 31, 2013 over prior periods are partially due to the inclusion of sales data at Westchester’s Ridge Hill and the exclusion of sales data at Orchard Town Center (disposed Q4-13) and Promenade Bolingbrook (classified as held for sale as of March 31, 2014 and disposed Q2-14). With a comparable inclusion of Westchester’s Ridge Hill and exclusion of Orchard Town Center and Promenade Bolingbrook sales data, sales per square foot for the rolling 12-months ended September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014 would have been $508, $514, $512 and $520, respectively.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Leasing Summary

Retail Centers

The following tables represent those new leases and GLA signed and rent per square foot ("SF") on the same space in which there was a former tenant and existing tenant renewals.

Regional Malls



Calendar Quarter	Number of Leases Signed	GLA Signed	Contractual Rent Per SF ⁽¹⁾		Expired Rent Per SF ⁽¹⁾		Cash Basis % Change over Prior Rent
Q4 2013	24	79,493	$	59.29	$	49.53	19.7	%
Q1 2014	32	114,132	$	52.60	$	42.93	22.5	%
Q2 2014	60	152,130	$	82.45	$	63.13	30.6	%
Q3 2014	45	128,871	$	50.33	$	41.58	21.0	%
Total	161	474,626	$	62.97	$	50.20	25.4	%

Specialty Retail Centers



Calendar Quarter	Number of Leases Signed	GLA Signed	Contractual Rent Per SF ⁽¹⁾		Expired Rent Per SF ⁽¹⁾		Cash Basis % Change over Prior Rent
Q4 2013	3	4,905	$	31.46	$	30.24	4.0	%
Q1 2014	2	8,994	$	34.14	$	35.37	(3.5	)%
Q2 2014	18	120,433	$	50.68	$	44.01	15.2	%
Q3 2014	4	9,169	$	32.40	$	30.36	6.7	%
Total	27	143,501	$	47.75	$	42.08	13.5	%

Office Buildings

The following table represent those new leases and GLA signed on the same space in which there was a former tenant and existing tenant renewals along with all other new leases signed within the rolling 12-month period.



	Same-Space Leases								Other New Leases
Calendar Quarter	Number of Leases Signed	GLA Signed	Contractual Rent Per SF ⁽¹⁾		Expired Rent Per SF ⁽¹⁾		Cash Basis % Change over Prior Rent		Number of Leases Signed	GLA Signed	Contractual Rent Per SF ⁽¹⁾		Total GLA Signed
Q4 2013	27	120,088	$	18.74	$	17.63	6.3	%	5	15,468	$	18.50	135,556
Q1 2014	19	190,669	$	47.26	$	43.21	9.4	%	4	11,324	$	20.82	201,993
Q2 2014	20	189,441	$	26.64	$	23.89	11.5	%	5	40,891	$	24.94	230,332
Q3 2014	14	136,474	$	55.11	$	55.63	(0.9	)%	3	21,513	$	21.18	157,987
Total	80	636,672	$	37.73	$	35.56	6.1	%	17	89,196	$	22.39	725,868


(1)	Retail and Office contractual rent per square foot includes base rent and fixed additional charges for common area maintenance and real estate taxes as of rental commencement. Retail contractual rent per square foot also includes fixed additional marketing/promotional charges. For all expiring leases, contractual rent per square foot includes any applicable escalations.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Apartment Communities

The following tables present leasing information of our Apartment Communities. Prior period amounts may differ from data as reported in previous quarters since the properties that qualify as comparable change from period to period.

Quarterly Comparison



		Monthly Average Residential Rental Rates ⁽²⁾						Economic Residential Occupancy
Comparable Apartment	Leasable Units	Three Months Ended September 30,						Three Months Ended September 30,
Communities ⁽¹⁾	at Pro-Rata % ⁽³⁾	2014		2013		% Change		2014		2013		% Change
Core Markets	8,628	$	1,854	$	1,790	3.6	%	95.7	%	95.3	%	0.4	%
Non-Core Markets	8,550	$	973	$	950	2.4	%	95.0	%	94.3	%	0.7	%
Total Comparable Apartments	17,178	$	1,416	$	1,372	3.2	%	95.5	%	94.9	%	0.6	%

Year-to-Date Comparison



		Monthly Average Residential Rental Rates ⁽²⁾						Economic Residential Occupancy
Comparable Apartment	Leasable Units	Nine Months Ended September 30,						Nine Months Ended September 30,
Communities ⁽¹⁾	at Pro-Rata % ⁽³⁾	2014		2013		% Change		2014		2013		% Change
Core Markets	8,190	$	1,840	$	1,774	3.7	%	95.5	%	95.1	%	0.4	%
Non-Core Markets	8,550	$	965	$	942	2.4	%	94.1	%	94.1	%	—
Total Comparable Apartments	16,740	$	1,393	$	1,349	3.3	%	95.0	%	94.8	%	0.2	%

Sequential Comparison



		Monthly Average Residential Rental Rates ⁽²⁾						Economic Residential Occupancy
		Three Months Ended						Three Months Ended
Comparable Apartment	Leasable Units	September 30,		June 30,				September 30,		June 30,
Communities ⁽¹⁾	at Pro-Rata % ⁽³⁾	2014		2014		% Change		2014		2014		% Change
Core Markets	8,709	$	1,866	$	1,843	1.2	%	95.7	%	95.8	%	(0.1	)%
Non-Core Markets	8,550	$	973	$	965	0.8	%	95.0	%	94.1	%	0.9	%
Total Comparable Apartments	17,259	$	1,424	$	1,408	1.1	%	95.5	%	95.2	%	0.3	%

(1)

Includes stabilized apartment communities completely opened and operated in the periods presented. These apartment communities include units leased at affordable apartment rates which provide a discount from average market rental rates. For the three months ended September 30, 2014, 18.7% of leasable units in core markets and 3.8% of leasable units in non-core markets were affordable housing units. Excludes all military and limited-distribution subsidized senior housing units.


(2)	Represents gross potential rent less concessions.


(3)	Leasable units at pro-rata represent our share of comparable leasable units at the apartment community.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

(THIS PAGE INTENTIONALLY LEFT BLANK)

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Comparable NOI - Pro-Rata (% change over same period prior year)



	Three Months Ended		Nine Months Ended
	September 30, 2014		September 30, 2014
Retail	6.5	%	0.5	%
Office	4.7	%	4.9	%
Apartments	3.4	%	4.7	%
Total	4.8	%	3.6	%

The tables below provide the percentage change of Comparable NOI as reported in previous quarters. GAAP reconciliations for previous quarters can be found in prior supplemental packages furnished with the Securities and Exchange Commission and are available on our website at www.forestcity.net.



Quarterly Historical Trends											Annual Historical Trends

	Three Months Ended											11 Months Ended		Years Ended
	September 30, 2014		June 30, 2014		March 31, 2014		December 31, 2013		October 31, 2013			December 31, 2013		January 31, 2013		January 31, 2012
Retail	6.5	%	2.3	%	(2.7	)%	3.6	%	0.5	%	Retail	3.6	%	2.1	%	2.6	%
Office	4.7	%	7.1	%	1.6	%	(9.3	)%	(4.0	)%	Office	(6.4	)%	2.1	%	(2.6	)%
Apartments	3.4	%	4.6	%	5.5	%	3.3	%	5.3	%	Apartments	4.7	%	7.3	%	7.3	%
Total	4.8	%	5.0	%	1.5	%	(2.0	)%	(0.1	)%	Total	(0.2	)%	3.2	%	1.4	%

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information



	Net Operating Income (in thousands)
	Three Months Ended September 30, 2014											Three Months Ended September 30, 2013											% Change
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)		Pro-Rata Consolidation (Non-GAAP)
Retail
Comparable
Adjusted revenues	$	74,524		$	—		$	—	$	74,524		$	71,627		$	—		$	—	$	71,627		4.0	%	4.0	%
Adjusted operating expenses	33,414			—			—		33,414			33,011			—			—		33,011			1.2	%	1.2	%
Comparable NOI	41,110			—			—		41,110			38,616			—			—		38,616			6.5	%	6.5	%
Non-Comparable NOI	4,091			(34		)	—		4,125			12,919			787			4,346		16,478
Total	45,201			(34		)	—		45,235			51,535			787			4,346		55,094
Office Buildings
Comparable
Adjusted revenues	105,525			4,798			—		100,727			100,316			4,530			—		95,786			5.2	%	5.2	%
Adjusted operating expenses	46,274			2,512			—		43,762			43,593			2,220			—		41,373			6.2	%	5.8	%
Comparable NOI	59,251			2,286			—		56,965			56,723			2,310			—		54,413			4.5	%	4.7	%
Non-Comparable NOI	548			78			—		470			4,487			841			748		4,394
Total	59,799			2,364			—		57,435			61,210			3,151			748		58,807
Apartments
Comparable
Adjusted revenues	75,970			657			—		75,313			73,478			661			—		72,817			3.4	%	3.4	%
Adjusted operating expenses	34,022			252			—		33,770			32,814			156			—		32,658			3.7	%	3.4	%
Comparable NOI	41,948			405			—		41,543			40,664			505			—		40,159			3.2	%	3.4	%
Non-Comparable NOI	(2,251		)	(28		)	—		(2,223		)	(22		)	710			—		(732		)
Total	39,697			377			—		39,320			40,642			1,215			—		39,427
Arena	8,257			3,687			—		4,570			8,991			4,276			—		4,715
Subsidized Senior Housing	3,890			71			—		3,819			3,364			212			—		3,152
Military Housing	4,898			—			—		4,898			4,387			89			—		4,298
Hotels	—			—			—		—			302			—			41		343
Land sales	—			—			—		—			502			—			—		502
Write-offs of abandoned development projects and demolition costs	(456		)	—			—		(456		)	(3,459		)	—			—		(3,459		)
Other ⁽¹⁾	(8,652		)	(268		)	—		(8,384		)	(9,752		)	(659		)	76		(9,017		)
Total Rental Properties
Comparable
Adjusted revenues	256,019			5,455			—		250,564			245,421			5,191			—		240,230			4.3	%	4.3	%
Adjusted operating expenses	113,710			2,764			—		110,946			109,418			2,376			—		107,042			3.9	%	3.6	%
Comparable NOI	142,309			2,691			—		139,618			136,003			2,815			—		133,188			4.6	%	4.8	%
Non-Comparable NOI	10,325			3,506			—		6,819			21,719			6,256			5,211		20,674
Total	152,634			6,197			—		146,437			157,722			9,071			5,211		153,862
Land Development Group	14,585			1,545			—		13,040			9,215			1,175			—		8,040
Corporate Activities	(15,396		)	—			—		(15,396		)	(13,574		)	310			—		(13,884		)
Grand Total	$	151,823		$	7,742		$	—	$	144,081		$	153,363		$	10,556		$	5,211	$	148,018


(1)	Includes non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information



	Net Operating Income (in thousands)
	Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013											% Change
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)		Pro-Rata Consolidation (Non-GAAP)
Retail
Comparable
Adjusted revenues	$	194,731		$	—		$	—		$	194,731		$	192,501		$	—		$	—	$	192,501		1.2	%	1.2	%
Adjusted operating expenses	87,757			—			—			87,757			86,074			—			—		86,074			2.0	%	2.0	%
Comparable NOI	106,974			—			—			106,974			106,427			—			—		106,427			0.5	%	0.5	%
Non-Comparable NOI	22,917			(34		)	3,678			26,629			55,635			3,235			15,255		67,655
Total	129,891			(34		)	3,678			133,603			162,062			3,235			15,255		174,082
Office Buildings
Comparable
Adjusted revenues	308,697			13,691			—			295,006			298,140			13,149			—		284,991			3.5	%	3.5	%
Adjusted operating expenses	133,639			6,799			—			126,840			131,179			6,435			—		124,744			1.9	%	1.7	%
Comparable NOI	175,058			6,892			—			168,166			166,961			6,714			—		160,247			4.8	%	4.9	%
Non-Comparable NOI	(814		)	205			(43		)	(1,062		)	6,382			1,083			5,439		10,738
Total	174,244			7,097			(43		)	167,104			173,343			7,797			5,439		170,985
Apartments
Comparable
Adjusted revenues	220,331			1,820			—			218,511			213,848			1,817			—		212,031			3.0	%	3.1	%
Adjusted operating expenses	98,918			699			—			98,219			97,726			544			—		97,182			1.2	%	1.1	%
Comparable NOI	121,413			1,121			—			120,292			116,122			1,273			—		114,849			4.6	%	4.7	%
Non-Comparable NOI	1,654			850			—			804			(176		)	1,416			181		(1,411		)
Total	123,067			1,971			—			121,096			115,946			2,689			181		113,438
Arena	29,478			13,615			—			15,863			19,674			9,350			—		10,324
Subsidized Senior Housing	10,971			214			—			10,757			10,654			417			—		10,237
Military Housing	15,578			47			—			15,531			16,339			306			—		16,033
Hotels	—			—			—			—			1,693			—			2,535		4,228
Land sales ⁽¹⁾	488			13			459			934			9,444			—			1,310		10,754
Write-offs of abandoned development projects and demolition costs	(1,389		)	—			—			(1,389		)	(17,012		)	—			—		(17,012		)
Other ⁽²⁾	(31,288		)	—			—			(31,288		)	(37,987		)	(2,523		)	525		(34,939		)
Total Rental Properties
Comparable
Adjusted revenues	723,759			15,511			—			708,248			704,489			14,966			—		689,523			2.7	%	2.7	%
Adjusted operating expenses	320,314			7,498			—			312,816			314,979			6,979			—		308,000			1.7	%	1.6	%
Comparable NOI	403,445			8,013			—			395,432			389,510			7,987			—		381,523			3.6	%	3.6	%
Non-Comparable NOI	47,595			14,910			4,094			36,779			64,646			13,284			25,245		76,607
Total	451,040			22,923			4,094			432,211			454,156			21,271			25,245		458,130
Land Development Group	41,100			4,212			—			36,888			19,872			2,350			—		17,522
Corporate Activities	(39,745		)	—			—			(39,745		)	(42,802		)	—			—		(42,802		)
Grand Total	$	452,395		$	27,135		$	4,094		$	429,354		$	431,226		$	23,621		$	25,245	$	432,850


(1)	Includes $8,927 of NOI generated from certain non-outlot land sales at full and pro-rata consolidation for the nine months ended September 30, 2013.


(2)	Includes non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Operating Income by Product Type

Pro-Rata Consolidation (dollars in thousands)



Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013



NOI by Product Type	$	485,913		NOI by Product Type	$	504,124
Hotels	—			Hotels	4,228
Non-outlot land sale	—			Non-outlot land sale	8,927
Arena	15,863			Arena	10,324
Corporate Activities	(39,745		)	Corporate Activities	(42,802		)
Write-offs of abandoned development projects and demolition costs	(1,389		)	Write-offs of abandoned development projects and demolition costs	(17,012		)
Other ⁽³⁾	(31,288		)	Other ⁽³⁾	(34,939		)
Grand Total NOI	$	429,354		Grand Total NOI	$	432,850


(1)	Includes commercial and residential outlot land sales.


(2)	Includes limited-distribution subsidized senior housing.


(3)	Includes non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Operating Income by Core Market

Pro-Rata Consolidation (dollars in thousands)



Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013



NOI by Market	$	470,382		NOI by Market	$	488,091
Hotels	—			Hotels	4,228
Non-outlot land sale	—			Non-outlot land sale	8,927
Arena	15,863			Arena	10,324
Military Housing	15,531			Military Housing	16,033
Corporate Activities	(39,745		)	Corporate Activities	(42,802		)
Write-offs of abandoned development projects and demolition costs	(1,389		)	Write-offs of abandoned development projects and demolition costs	(17,012		)
Other ⁽³⁾	(31,288		)	Other ⁽³⁾	(34,939		)
Grand Total NOI	$	429,354		Grand Total NOI	$	432,850


(1)	Includes Richmond, Virginia.


(2)	Represents Regional Malls located in Non-Core Markets. Regional Malls located in Core Markets are included in their applicable Core Markets.


(3)	Includes non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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



	Three Months Ended September 30, 2014														Three Months Ended September 30, 2013
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Total revenues	$	234,743		$	18,865		$	108,647		$	—	$	324,525		$	276,693		$	23,051		$	97,957		$	11,977		$	363,576
Exclude straight-line adjustment	153			—			—			—		153			(4,112		)	—			—			(216		)	(4,328		)
Add interest and other income	10,096			469			97			—		9,724			14,957			539			128			37			14,583
Equity in earnings (loss) of unconsolidated entities	19,346			17			(20,792		)	—		(1,463		)	44,003			472			(43,216		)	—			315
Exclude net gain on land held for divestiture of unconsolidated entities	—			—			—			—		—			(79		)	—			79			—			—
Exclude operating expenses of unconsolidated entities	49,266			—			(49,266		)	—		—			46,836			—			(46,836		)	—			—
Exclude gain on disposition of unconsolidated entities	(9,189		)	—			9,189			—		—			(34,281		)	—			34,281			—			—
Exclude depreciation and amortization of unconsolidated entities	22,329			—			(22,329		)	—		—			18,004			—			(18,004		)	—			—
Exclude interest expense of unconsolidated entities	25,858			—			(25,858		)	—		—			24,339			—			(24,339		)	—			—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	(312		)	—			312			—		—			50			—			(50		)	—			—
Adjusted revenues	352,290			19,351			—			—		332,939			386,410			24,062			—			11,798			374,146
Operating expenses	150,154			11,609			49,266			—		187,811			181,502			13,506			46,836			6,587			221,419
Operating expenses of unconsolidated entities	49,266			—			(49,266		)	—		—			46,836			—			(46,836		)	—			—
Write-offs of abandoned development projects and demolition costs	456			—			—			—		456			3,459			—			—			—			3,459
Non-Real Estate depreciation and amortization	1,217			—			—			—		1,217			1,119			—			—			—			1,119
Exclude straight-line rent adjustment	(626		)	—			—			—		(626		)	131			—			—			—			131
Adjusted operating expenses	200,467			11,609			—			—		188,858			233,047			13,506			—			6,587			226,128
Net operating income	$	151,823		$	7,742		$	—		$	—	$	144,081		$	153,363		$	10,556		$	—		$	5,211		$	148,018
Interest expense	(59,312		)	(7,605		)	(25,858		)	—		(77,565		)	(82,253		)	(6,898		)	(24,339		)	(3,436		)	(103,130		)
Interest expense of unconsolidated entities	(25,858		)	—			25,858			—		—			(24,339		)	—			24,339			—			—
Gain (loss) on extinguishment of debt	(49		)	(37		)	312			—		300			23,666			—			(50		)	—			23,616
Gain (loss) on extinguishment of debt of unconsolidated entities	312			—			(312		)	—		—			(50		)	—			50			—			—
Equity in (earnings) loss of unconsolidated entities	(19,346		)	(17		)	20,792			—		1,463			(44,003		)	(472		)	43,216			—			(315		)
Net gain (loss) on land held for divestiture activity	—			—			—			—		—			(8,925		)	(720		)	79			—			(8,126		)
Net gain on land held for divestiture activity of unconsolidated entities	—			—			—			—		—			79			—			(79		)	—			—
Net gain (loss) on disposition of rental properties and partial interests in rental properties	(146		)	27			9,189			—		9,016			386,559			—			34,281			22,335			443,175
Gain on disposition of unconsolidated entities	9,189			—			(9,189		)	—		—			34,281			—			(34,281		)	—			—
Impairment of consolidated and unconsolidated real estate	(966		)	—			—			—		(966		)	—			—			—			(6,870		)	(6,870		)
Depreciation and amortization—Real Estate Groups (a)	(54,294		)	(4,888		)	(21,521		)	—		(70,927		)	(87,113		)	(4,821		)	(17,261		)	(3,044		)	(102,597		)
Amortization of mortgage procurement costs	(2,074		)	(43		)	(808		)	—		(2,839		)	(2,300		)	(185		)	(743		)	(122		)	(2,980		)
Depreciation and amortization of unconsolidated entities	(22,329		)	—			22,329			—		—			(18,004		)	—			18,004			—			—
Straight-line rent adjustment	(779		)	—			—			—		(779		)	4,243			—			—			216			4,459
Earnings (loss) before income taxes	$	(23,829	)	$	(4,821	)	$	20,792		$	—	$	1,784		$	335,204		$	(2,540	)	$	43,216		$	14,290		$	395,250

(a) Depreciation and amortization—Real Estate Groups	$	54,294		$	4,888		$	21,521		$	—	$	70,927		$	87,113		$	4,821		$	17,261		$	3,044		$	102,597
Depreciation and amortization—Non-Real Estate	1,217			—			—			—		1,217			1,119			—			—			—			1,119
Total depreciation and amortization	$	55,511		$	4,888		$	21,521		$	—	$	72,144		$	88,232		$	4,821		$	17,261		$	3,044		$	103,716

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information



Reconciliation of Net Operating Income (non-GAAP) to Earnings (Loss) Before Income Taxes (GAAP) (in thousands) (continued)

	Nine Months Ended September 30, 2014															Nine Months Ended September 30, 2013
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Total revenues	$	713,917		$	61,972		$	329,589		$	7,029		$	988,563		$	824,574		$	66,772		$	297,558		$	58,257		$	1,113,617
Exclude straight-line adjustment	(4,235		)	—			—			79			(4,156		)	(11,638		)	—			—			(691		)	(12,329		)
Add interest and other income	33,974			1,501			293			—			32,766			37,382			1,441			391			263			36,595
Equity in earnings (loss) of unconsolidated entities	80,543			94			(83,963		)	—			(3,514		)	59,270			(644		)	(63,815		)	—			(3,901		)
Exclude net gain on land held for divestiture of unconsolidated entities	—			—			—			—			—			(2,590		)	—			2,590			—			—
Exclude operating expenses of unconsolidated entities	147,346			—			(147,346		)	—			—			140,367			—			(140,367		)	—			—
Exclude gain on disposition of unconsolidated entities	(50,075		)	—			50,075			—			—			(32,771		)	—			32,771			—			—
Exclude depreciation and amortization of unconsolidated entities	66,901			—			(66,901		)	—			—			56,166			—			(56,166		)	—			—
Exclude interest expense of unconsolidated entities	81,763			—			(81,763		)	—			—			73,723			—			(73,723		)	—			—
Exclude gain on extinguishment of debt of unconsolidated entities	(16		)	—			16			—			—			(761		)	—			761			—			—
Adjusted revenues	1,070,118			63,567			—			7,108			1,013,659			1,143,722			67,569			—			57,829			1,133,982
Operating expenses	467,064			36,432			147,346			3,014			580,992			552,775			43,948			140,367			32,584			681,778
Operating expenses of unconsolidated entities	147,346			—			(147,346		)	—			—			140,367			—			(140,367		)	—			—
Write-offs of abandoned development projects and demolition costs	1,389			—			—			—			1,389			17,012			—			—			—			17,012
Non-Real Estate depreciation and amortization	3,484			—			—			—			3,484			3,679			—			—			—			3,679
Exclude straight-line rent adjustment	(1,560		)	—			—			—			(1,560		)	(1,337		)	—			—			—			(1,337		)
Adjusted operating expenses	617,723			36,432			—			3,014			584,305			712,496			43,948			—			32,584			701,132
Net operating income	$	452,395		$	27,135		$	—		$	4,094		$	429,354		$	431,226		$	23,621		$	—		$	25,245		$	432,850
Interest expense	(178,917		)	(19,981		)	(81,763		)	(5,538		)	(246,237		)	(246,832		)	(21,314		)	(73,723		)	(11,258		)	(310,499		)
Interest expense of unconsolidated entities	(81,763		)	—			81,763			—			—			(73,723		)	—			73,723			—			—
Gain (loss) on extinguishment of debt	(927		)	(37		)	16			(448		)	(1,322		)	18,718			—			761			(36		)	19,443
Gain on extinguishment of debt of unconsolidated entities	16			—			(16		)	—			—			761			—			(761		)	—			—
Equity in (earnings) loss of unconsolidated entities	(80,543		)	(94		)	83,963			—			3,514			(59,270		)	644			63,815			—			3,901
Net gain (loss) on land held for divestiture activity	—			—			—			—			—			3,383			(5,308		)	2,590			—			11,281
Net gain on land held for divestiture activity of unconsolidated entities	—			—			—			—			—			2,590			—			(2,590		)	—			—
Net loss on disposition of partial interest in development project	(19,590		)	(3,379		)	—			—			(16,211		)	—			—			—			—			—
Net gain (loss) on disposition of rental properties and partial interests in rental properties	(613		)	27			50,075			28,042			77,477			386,559			—			32,771			37,971			457,301
Gain on disposition of unconsolidated entities	50,075			—			(50,075		)	—			—			32,771			—			(32,771		)	—			—
Impairment of consolidated and unconsolidated real estate	(130,795		)	—			—			—			(130,795		)	(1,175		)	—			—			(6,870		)	(8,045		)
Depreciation and amortization—Real Estate Groups (a)	(166,354		)	(14,250		)	(64,504		)	(986		)	(217,594		)	(232,809		)	(13,620		)	(53,886		)	(11,548		)	(284,623		)
Amortization of mortgage procurement costs	(5,967		)	(293		)	(2,397		)	(41		)	(8,112		)	(7,567		)	(530		)	(2,280		)	(483		)	(9,800		)
Depreciation and amortization of unconsolidated entities	(66,901		)	—			66,901			—			—			(56,166		)	—			56,166			—			—
Straight-line rent adjustment	2,675			—			—			(79		)	2,596			10,301			—			—			691			10,992
Earnings (loss) before income taxes	$	(227,209	)	$	(10,872	)	$	83,963		$	25,044		$	(107,330	)	$	208,767		$	(16,507	)	$	63,815		$	33,712		$	322,801

(a) Depreciation and amortization—Real Estate Groups	$	166,354		$	14,250		$	64,504		$	986		$	217,594		$	232,809		$	13,620		$	53,886		$	11,548		$	284,623
Depreciation and amortization—Non-Real Estate	3,484			—			—			—			3,484			3,679			—			—			—			3,679
Total depreciation and amortization	$	169,838		$	14,250		$	64,504		$	986		$	221,078		$	236,488		$	13,620		$	53,886		$	11,548		$	288,302

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Results of Operations

Segment Operating Results

The following tables present revenues, operating expenses and interest expense by segment on a pro-rata basis for the three months ended September 30, 2014 compared with the three months ended September 30, 2013.



	Commercial Group			Residential Group			Arena			Land Development Group			Total
Revenues for the three months ended September 30, 2013	$	222,963		$	107,818		$	13,826		$	18,969		$	363,576
Increase (decrease) due to:
Comparable portfolio	7,107			2,410			—			—			9,517
Non-comparable properties ⁽¹⁾	215			2,642			(167		)	—			2,690
Properties in which partners' interest recently acquired	—			753			—			—			753
Recently disposed properties	(15,636		)	(2,182		)	—			—			(17,818		)
Properties in which partial interest was recently disposed	(15,786		)	—			—			—			(15,786		)
Land sales	(1,164		)	(1,701		)	—			(3,833		)	(6,698		)
Military housing	—			(3,470		)	—			—			(3,470		)
Subsidized senior housing	—			159			—			—			159
Other	(5,405		)	(3,538		)	—			545			(8,398		)
Revenues for the three months ended September 30, 2014	$	192,294		$	102,891		$	13,659		$	15,681		$	324,525



	Corporate Activities			Commercial Group			Residential Group			Arena		Land Development Group			Total
Operating expenses for the three months ended September 30, 2013	$	13,994		$	114,685		$	69,337		$	9,111	$	14,292		$	221,419
Increase (decrease) due to:
Comparable portfolio	—			568			2,062			—		—			2,630
Non-comparable properties ⁽¹⁾	—			(72		)	1,626			301		—			1,855
Properties in which partners' interest recently acquired	—			—			97			—		—			97
Recently disposed properties	—			(9,166		)	(1,020		)	—		—			(10,186		)
Properties in which partial interest was recently disposed	—			(5,586		)	—			—		—			(5,586		)
Land cost of sales	—			(580		)	(1,750		)	—		(8,296		)	(10,626		)
Military housing	—			—			(4,216		)	—		—			(4,216		)
Subsidized senior housing	—			—			(443		)	—		—			(443		)
Development, management, Corporate and other expenses	(231		)	(4,964		)	(1,586		)	—		(352		)	(7,133		)
Operating expenses for the three months ended September 30, 2014	$	13,763		$	94,885		$	64,107		$	9,412	$	5,644		$	187,811



	Corporate Activities			Commercial Group			Residential Group			Arena		Land Development Group			Total
Interest expense for the three months ended September 30, 2013	$	14,958		$	67,364		$	15,850		$	4,792	$	166		$	103,130
Increase (decrease) due to:
Comparable portfolio	—			(2,366		)	(1,569		)	—		—			(3,935		)
Non-comparable properties ⁽¹⁾	—			117			1,118			27		—			1,262
Properties in which partners' interest recently acquired	—			—			213			—		—			213
Recently disposed properties	—			(3,330		)	(546		)	—		—			(3,876		)
Properties in which partial interest was recently disposed	—			(9,031		)	—			—		—			(9,031		)
Capitalized interest	—			(1,956		)	268			—		9			(1,679		)
Mark-to-market adjustments on non-designated swaps	(68		)	(611		)	(1,665		)	—		(131		)	(2,475		)
Corporate borrowings	(5,309		)	—			—			—		—			(5,309		)
Other	—			30			(549		)	—		(216		)	(735		)
Interest expense for the three months ended September 30, 2014	$	9,581		$	50,217		$	13,120		$	4,819	$	(172	)	$	77,565

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information


(1)	The following table presents the increases (decreases) in revenues, operating expenses and interest expense for Commercial and Residential properties in lease-up and other non-comparable properties:



		Three Months Ended September 30, 2014 vs. 2013
Property	Quarter Opened	Revenues			Operating Expenses			Interest Expense
Commercial:
Properties in lease-up:
The Yards - Boilermaker Shops	Q4-12	$	47		$	83		$	12
The Yards - Lumbershed	Q3-13	284			47			109
Non-comparable properties:
Ballston Common Mall		(116		)	(202		)	(4		)
Total Commercial		$	215		$	(72	)	$	117
Residential:
Properties in lease-up:
1111 Stratford	Q3-13/Q1-14	$	470		$	446		$	112
3700M	Q3-14	23			71			45
Aster Conservatory Green	Q3-13/14	847			298			180
Radian	Q2-14	115			355			469
The Continental	Q1-13	501			(298		)	6
The Yards - Twelve12	Q2-14	293			413			307
Non-comparable properties:
Heritage		393			341			(1		)
Total Residential		$	2,642		$	1,626		$	1,118

Commercial Group:

Ballston Common Mall is classified as a non-comparable property due to its upcoming planned renovation project.

Residential Group:

The increases in revenues, operating expenses and interest expense related to partner's interest recently acquired are related to 91 Sidney, an apartment community in Cambridge, Massachusetts (Q1-2014). The decreases in revenues and operating expenses for other are primarily due to third party management fees and the expenditures associated with third party management and consulting fee arrangements.

Heritage is classified as a non-comparable property due to its recently completed renovation project resulting in a significant number of units being off-line.

Corporate Activities:

The decrease in interest expense is due to the redemptions of our Senior Notes due 2017 and 2034 and the exchanges of our Senior Notes due 2014 for Class A common stock, which is partially offset by the issuance of our Senior Notes due 2020 during 2013.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

The following tables present revenues, operating expenses and interest expense by segment on a pro-rata basis for the nine months ended September 30, 2014 compared with the nine months ended September 30, 2013.



	Commercial Group			Residential Group			Arena		Land Development Group		Total
Revenues for the nine months ended September 30, 2013	$	720,334		$	314,978		$	41,844	$	36,461	$	1,113,617
Increase (decrease) due to:
Comparable portfolio	8,160			6,779			—		—		14,939
Non-comparable properties ⁽¹⁾	5,808			4,736			4,704		—		15,248
Properties in which partners' interest recently acquired	—			5,362			—		—		5,362
Recently disposed properties	(62,515		)	(6,392		)	—		—		(68,907		)
Properties in which partial interest was recently disposed	(55,787		)	—			—		—		(55,787		)
Land sales	(23,602		)	(1,566		)	—		14,769		(10,399		)
Military housing	—			(8,102		)	—		—		(8,102		)
Subsidized senior housing	—			161			—		—		161
Other	(9,657		)	(8,769		)	—		857		(17,569		)
Revenues for the nine months ended September 30, 2014	$	582,741		$	307,187		$	46,548	$	52,087	$	988,563



	Corporate Activities			Commercial Group			Residential Group			Arena			Land Development Group			Total
Operating expenses for the nine months ended September 30, 2013	$	38,531		$	382,853		$	201,315		$	31,520		$	27,559		$	681,778
Increase (decrease) due to:
Comparable portfolio	—			2,647			2,075			—			—			4,722
Non-comparable properties ⁽¹⁾	—			(304		)	4,139			(926		)	—			2,909
Properties in which partners' interest recently acquired	—			—			2,528			—			—			2,528
Recently disposed properties	—			(36,173		)	(3,521		)	—			—			(39,694		)
Properties in which partial interest was recently disposed	—			(19,367		)	—			—			—			(19,367		)
Land cost of sales	—			(13,579		)	(1,762		)	—			(2,352		)	(17,693		)
Military housing	—			—			(8,206		)	—			—			(8,206		)
Subsidized senior housing	—			—			(263		)	—			—			(263		)
Development, management, Corporate and other expenses	(3,148		)	(11,117		)	(10,277		)	—			(1,180		)	(25,722		)
Operating expenses for the nine months ended September 30, 2014	$	35,383		$	304,960		$	186,028		$	30,594		$	24,027		$	580,992



	Corporate Activities			Commercial Group			Residential Group			Arena		Land Development Group			Total
Interest expense for the nine months ended September 30, 2013	$	45,556		$	200,619		$	50,631		$	13,782	$	(89	)	$	310,499
Increase (decrease) due to:
Comparable portfolio	—			(9,139		)	(2,912		)	—		—			(12,051		)
Non-comparable properties ⁽¹⁾	—			6			1,659			493		—			2,158
Properties in which partners' interest recently acquired	—			—			2,425			—		—			2,425
Recently disposed properties	—			(6,629		)	(1,736		)	—		—			(8,365		)
Properties in which partial interest was recently disposed	—			(22,792		)	—			—		—			(22,792		)
Capitalized interest	—			(597		)	(1,946		)	—		(28		)	(2,571		)
Mark-to-market adjustments on non-designated swaps	(222		)	(677		)	(4,162		)	—		(131		)	(5,192		)
Corporate borrowings	(16,916		)	—			—			—		—			(16,916		)
Other	—			185			(1,129		)	—		(14		)	(958		)
Interest expense for the nine months ended September 30, 2014	$	28,418		$	160,976		$	42,830		$	14,275	$	(262	)	$	246,237

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information


(1)	The following table presents the increases (decreases) in revenues, operating expenses and interest expense for Commercial and Residential properties in lease-up and other non-comparable properties:



		Nine Months Ended September 30, 2014 vs. 2013
Property	Quarter Opened	Revenues			Operating Expenses			Interest Expense
Commercial:
Properties in lease-up:
The Yards - Boilermaker Shops	Q4-12	$	249		$	106		$	36
The Yards - Lumbershed	Q3-13	925			335			288
Westchester's Ridge Hill	Q2-11/12	5,025			(901		)	40
Non-comparable properties:
Ballston Common Mall		(391		)	156			(358		)
Total Commercial		$	5,808		$	(304	)	$	6
Residential:
Properties in lease-up:
1111 Stratford	Q3-13/Q1-14	$	844		$	1,079		$	318
3700M	Q3-14	23			209			44
Aster Conservatory Green	Q3-13/14	1,613			882			328
Radian	Q2-14	120			726			706
The Continental	Q1-13	1,884			136			274
The Yards - Twelve12	Q2-14	309			613			340
Non-comparable properties:
Heritage		(57		)	494			(351		)
Total Residential		$	4,736		$	4,139		$	1,659

Commercial Group:

The decreases in revenues, operating expenses and interest expense related to recent disposals are due to the formation of new joint ventures with outside partners in eight regional retail malls in 2013 and our ongoing strategy to sell operating assets in non-core markets. The decreases in revenues and operating expenses for other are primarily due to a decrease in tenant reimbursable expenses at several properties in the Greater New York City metropolitan area. Additionally, the decrease in operating expenses for other is due to less development costs being expensed in 2014 compared with 2013 due to the increased amount of projects under active development. The decrease in interest expense for the comparable portfolio is primarily due to the paydown of several nonrecourse mortgage notes.

Ballston Common Mall is classified as a non-comparable property due to its upcoming planned renovation project.

Residential Group:

The increases in revenues, operating expenses and interest expense related to partner's interest recently acquired are related to Uptown Apartments, an apartment community in Oakland, California (Q2-2013), and 91 Sidney (Q1-2014). The decreases in revenues and operating expenses for other are primarily due to third party management fees and the expenditures associated with third party management and consulting fee arrangements.

Heritage is classified as a non-comparable property due to its recently completed renovation project resulting in a significant number of units being off-line.

Corporate Activities:

The decrease in operating expenses expenses is primarily due to a partial recovery of a legal settlement paid in a prior period, which was subsequently recovered in 2014. The decrease in interest expense is due to the redemptions of our Senior Notes due 2015, 2017 and 2034 and the exchanges of our Senior Notes due 2014 for Class A common stock, which is partially offset by the issuance of our Senior Notes due 2020 during 2013.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Earnings (Loss) Attributable to Forest City Enterprises, Inc. – Net earnings attributable to Forest City Enterprises, Inc. for the three months ended September 30, 2014 was $686,000 versus $241,856,000 for the three months ended September 30, 2013. Although we have substantial recurring revenue sources, significant transactions often create substantial variances in operating results between periods. The variance to the prior year period is primarily attributable to the following fluctuations, which are pre-tax and net of noncontrolling interests:

Asset Dispositions - $(426,495,000)


•	$(434,159,000) related to 2013 gains on disposition of full or partial interest in rental properties and unconsolidated investments exceeding 2014 gains;


•	$8,126,000 related to the net loss on land held for divestiture activities for fully consolidated land projects and land projects accounted for under the equity method of accounting in 2013;


•	$(4,925,000) related to a combined fluctuation in revenues, operating expenses and interest expense at properties in which we disposed of our full or partial interest during 2013 and 2014; and


•	$4,463,000 related to increased sales in our Land Development Group in 2014 compared with 2013, primarily at our Stapleton project.

Financing Transactions - $(15,532,000)


•	$(23,316,000) related to decreased gains on extinguishment of debt in 2014 compared with 2013;


•	$5,309,000 related to a decrease in interest expense on our corporate debt due to the redemptions of our Senior Notes due 2017 and 2034, which were partially offset by the issuance of our Senior Notes due 2020 during 2013; and


•	$2,475,000 related to the change in fair market value of certain derivatives not qualifying for hedge accounting between the comparable periods, which was marked to market through interest expense.

Non-Cash Transactions - $40,479,000

•

$31,572,000 related to a decrease in depreciation and amortization expense in 2014 compared with 2013 primarily due to accelerated depreciation expense at Ten MetroTech Center in 2013, the change from full consolidation method of accounting to equity method upon the formation of new joint ventures with an outside partner in seven regional retail malls in 2013 and the disposition of several rental properties during 2013 and 2014;


•	$5,904,000 related to decreased impairment of real estate (including discontinued operations) in 2014 compared with 2013; and


•	$3,003,000 related to decreased write-offs of abandoned development projects in 2014 compared with 2013.

Operations - $7,230,000


•	$10,822,000 related to a combined fluctuation in revenues, operating expenses and interest expense at properties in our comparable portfolio in 2014 compared with 2013; and


•	$(3,592,000) related to a decrease in the income recognition on the allocation of state and federal historic preservation tax credits, Brownfield tax credits and new market tax credits in 2014 compared with 2013.

Income Taxes


•	$154,074,000 due to decreased income tax expense attributable to both continuing and discontinued operations primarily related to the fluctuations in pre-tax earnings, including gains included in discontinued operations. These fluctuations are primarily due to the various transactions discussed herein.

Net loss attributable to Forest City Enterprises, Inc. for the nine months ended September 30, 2014 was $(76,786,000) versus net earnings of $187,325,000 for the nine months ended September 30, 2013. The variance to the prior year period is primarily attributable to the following fluctuations, which are pre-tax and net of noncontrolling interests:

Asset Dispositions - $(434,694,000)


•	$(379,824,000) related to 2013 gains on disposition of full or partial interest in rental properties and unconsolidated investments exceeding 2014 gains;


•	$(34,476,000) related to a combined fluctuation in revenues, operating expenses and interest expense at properties in which we disposed of our full or partial interest during 2013 and 2014;


•	$17,121,000 related to increased sales in our Land Development Group in 2014 compared with 2013, primarily at our Stapleton project;

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information


•	$(16,211,000) related to the net loss on partial disposition in Pacific Park Brooklyn, related to the formation of a new joint venture with Greenland in 2014;


•	$(11,281,000) related to the net gain on land held for divestiture activities for fully consolidated land projects and land projects accounted for under the equity method of accounting in 2013; and


•	$(10,023,000) related to decreased commercial outlot land sales in 2014 compared with 2013.

Financing Transactions - $1,343,000


•	$(20,765,000) related to decreased gains on extinguishment of debt in 2014 compared with 2013;


•	$16,916,000 related to a decrease in interest expense on our corporate debt due to the redemptions of our Senior Notes due 2015, 2017 and 2034 and the exchanges of our Senior Notes due 2014 for Class A common stock, which were partially offset by the issuance of our Senior Notes due 2020 during 2013; and


•	$5,192,000 related to the change in fair market value of certain derivatives not qualifying for hedge accounting between the comparable periods, which was marked to market through interest expense.

Non-Cash Transactions - $(39,903,000)


•	$(122,750,000) related to increased impairment of real estate (including discontinued operations) in 2014 compared with 2013;

•

$67,224,000 related to a decrease in depreciation and amortization expense in 2014 compared with 2013 primarily due to accelerated depreciation expense at Ten MetroTech Center in 2013, the change from full consolidation method of accounting to equity method upon the formation of new joint ventures with an outside partner in seven regional retail malls in 2013 and the disposition of several rental properties during 2013 and 2014. These decreases were partially offset by the change from equity method of accounting to full consolidation method upon the acquisition of our partners’ interest in two apartment communities; and


•	$15,623,000 related to decreased write-offs of abandoned development projects in 2014 compared with 2013.

Operations - $31,432,000


•	$22,268,000 related to a combined fluctuation in revenues, operating expenses and interest expense at properties in our comparable portfolio in 2014 compared with 2013;


•	$5,433,000 related to a combined fluctuation in revenues, operating expenses and interest expense at properties that are in lease-up as of September 30, 2014;


•	$5,137,000 related to a combined fluctuation in revenues, operating expenses and interest expense at Barclays Center in 2014 compared with 2013;


•	$(4,554,000) related to a decrease in the income recognition on the allocation of state and federal historic preservation tax credits, Brownfield tax credits and new market tax credits in 2014 compared with 2013; and


•	$3,148,000 related to a decrease in Corporate general and administrative expenses, primarily due to a partial recovery of a legal settlement paid in a prior period, which was subsequently recovered in 2014.

Income Taxes


•	$165,636,000 due to decreased income tax expense attributable to both continuing and discontinued operations primarily related to the fluctuations in pre-tax earnings, including gains included in discontinued operations. These fluctuations are primarily due to the various transactions discussed herein.

Capital Expenditures for our Operating Portfolio – Our diversified real estate portfolio requires certain capital expenditures, including tenant improvements, to maintain and improve its operating performance. During the nine months ended September 30, 2014, we invested $69,478,000 at pro-rata consolidation ($34,555,000 at full consolidation) in capital expenditures for our operating portfolio as compared with $83,070,000 at pro-rata consolidation ($61,857,000 at full consolidation) during the nine months ended September 30, 2013.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Reconciliation of Net Earnings (Loss) to FFO

The table below reconciles net earnings (loss), the most comparable GAAP measure, to FFO, a non-GAAP measure.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(in thousands)
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	686		$	241,856		$	(76,786	)	$	187,325
Depreciation and Amortization—Real Estate Groups	70,927			102,597			217,594			284,623
Impairment of depreciable rental properties	—			6,870			129,059			8,045
Gain on disposition of full or partial interests in rental properties	(9,016		)	(443,175		)	(77,477		)	(457,301		)
Income tax expense (benefit) adjustment — current and deferred ⁽¹⁾:
Gain on disposition of full or partial interests in rental properties	3,310			172,926			32,028			178,398
Impairment of depreciable rental properties	—			(2,668		)	(50,053		)	(3,124		)
FFO	$	65,907		$	78,406		$	174,365		$	197,966

FFO Per Share - Diluted
Numerator (in thousands):
FFO	$	65,907		$	78,406		$	174,365		$	197,966
If-Converted Method (adjustments for interest, net of tax):
3.625% Notes due 2014	—			22			—			1,645
5.000% Notes due 2016	382			382			1,147			1,147
4.250% Notes due 2018	2,277			2,277			6,830			6,830
3.625% Notes due 2020	1,664			1,324			4,993			1,324
FFO for per share data	$	70,230		$	82,411		$	187,335		$	208,912
Denominator:
Weighted average shares outstanding—Basic	198,893,584			197,442,451			198,328,900			190,919,579
Effect of stock options, restricted stock and performance shares	1,758,916			1,804,200			1,741,929			1,684,332
Effect of convertible preferred stock	—			—			—			185,199
Effect of convertible debt	32,138,215			29,877,940			32,138,215			29,813,775
Effect of convertible Class A Common Units	2,973,190			3,646,755			3,358,084			3,646,755
Weighted average shares outstanding - Diluted	235,763,905			232,771,346			235,567,128			226,249,640
FFO Per Share	$	0.30		$	0.35		$	0.80		$	0.92


(1)	The following table provides detail of income tax expense (benefit):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(in thousands)
Income tax expense (benefit) on FFO
Operating Earnings:
Current taxes	$	(6,922	)	$	(25,054	)	$	(13,504	)	$	(70,431	)
Deferred taxes	3,247			8,505			230			29,494
Total income tax expense (benefit) on FFO	(3,675		)	(16,549		)	(13,274		)	(40,937		)

Income tax expense (benefit) on non-FFO
Disposition of full or partial interests in rental properties:
Current taxes	$	10,415		$	70,902		$	26,171		$	79,882
Deferred taxes	(7,105		)	102,024			5,857			98,516
Disposition of full or partial interests in rental properties	3,310			172,926			32,028			178,398

Impairment of depreciable rental properties
Deferred taxes	$	—		$	(2,668	)	$	(50,053	)	$	(3,124	)
Total income tax expense (benefit) on non-FFO	3,310			170,258			(18,025		)	175,274
Grand Total	$	(365	)	$	153,709		$	(31,299	)	$	134,337

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Reconciliation of FFO to Operating FFO - Pro-Rata Consolidation



	Three Months Ended September 30,							Nine Months Ended September 30,
	2014			2013			% Change	2014			2013			% Change
	(in thousands)							(in thousands)
FFO	$	65,907		$	78,406			$	174,365		$	197,966
Net (gain) loss on land held for divestiture activity	—			8,126				—			(11,281		)
Impairment of non-depreciable real estate	966			—				1,736			—
Write-offs of abandoned development projects and demolition costs	456			3,459				1,389			17,012
Tax credit income	(3,515		)	(7,948		)		(12,942		)	(19,356		)
(Gain) loss on extinguishment of debt	(300		)	(23,616		)		1,322			(19,443		)
Change in fair market value of nondesignated hedges	55			4,771				3,046			6,496
Net gain on change in control of interests	—			—				(2,759		)	(2,762		)
Straight-line rent adjustments	779			(4,459		)		(2,596		)	(10,992		)
Participation payments	—			1,431				1,469			2,801
Non-outlot land sales	—			—				—			(8,927		)
Net loss on disposition of partial interest in development project	—			—				16,211			—
Nets Pre-tax FFO	947			(770		)		2,361			2,128
Income tax benefit on FFO	(3,675		)	(16,549		)		(13,274		)	(40,937		)
Operating FFO	$	61,620		$	42,851		43.8%	$	170,328		$	112,705		51.1%

Operating FFO Per Share - Diluted
Numerator (in thousands):
Operating FFO	$	61,620		$	42,851			$	170,328		$	112,705
If-Converted Method (adjustments for interest, pre-tax):
3.625% Notes due 2014	—			37				—			2,687
5.000% Notes due 2016	625			625				1,875			1,875
4.250% Notes due 2018	3,719			—				11,156			—
3.625% Notes due 2020	2,719			—				8,156			—
Operating FFO for per share data	$	68,683		$	43,513			$	191,515		$	117,267

Denominator:
Weighted average shares outstanding - Diluted ⁽¹⁾	235,763,905			206,764,752				235,567,128			206,778,087
Operating FFO Per Share	$	0.29		$	0.21			$	0.81		$	0.57

(1)

For the three and nine months ended September 30, 2013, weighted-average shares issuable upon the conversion of convertible debt of 26,006,594 and 19,471,553, respectively, were not included in the computation of diluted Operating FFO per share because their effect is anti-dilutive under the if-converted method. As a result, adjustments to Operating FFO are not required for interest expense of $5,881,000 and $13,319,000 for the three and nine months ended September 30, 2013, respectively, related to these securities.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(in thousands)						(in thousands)
Operating FFO by segment:
Commercial Group	$	45,582		$	38,159		$	114,691		$	113,367
Residential Group	27,236			26,571			82,919			71,608
Arena	(249		)	(136		)	1,508			(3,630		)
Land Group	13,081			7,869			37,012			17,590
Corporate Group	(24,030		)	(29,612		)	(65,802		)	(86,230		)
Operating FFO	$	61,620		$	42,851		$	170,328		$	112,705

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

*Other of $5.3 million is primarily due to reduced expensed overhead.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

*Other of $16.3 million is primarily due to reduced expensed overhead.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

Property Openings and Projects Under Construction

as of September 30, 2014



2014 Property Openings	Location	Date Opened/ Anticipated Opening	FCE Legal Ownership % (a)			Pro-Rata FCE % (a) (1)		Cost at Full Consolidation (GAAP) (b)		Total Cost at 100% (2)		Cost at FCE Pro-Rata Share (Non-GAAP) (c) (1) X (2)		Sq. ft./ No. of Units	Gross Leasable Area	Lease Commitment % (d)
								(in millions)
Residential:
Radian	Boston, MA	Q2-14/Q3-14	50	%	(e)	50	%	$	0.0	$	130.0	$	65.0	240	5,000	49%; Retail: 100%
The Yards - Twelve12	Washington, D.C.	Q2-Q4/14	80	%	(f)	100	%	119.5		119.5		119.5		218	88,000	60%; Retail: 96%
3700M	Dallas, TX	Q3-14/Q4-14	25	%	(e)	25	%	0.0		90.9		22.7		381	—	33%
Total 2014 Openings								$	119.5	$	340.4	$	207.2	839	93,000

Projects Under Construction

Residential:
2175 Market Street	San Francisco, CA	Q4-14	25	%		25	%	$	42.3	$	42.3	$	10.6	88	6,000
Winchester Lofts	New Haven, CT	Q4-14	100	%		100	%	62.0		62.0		62.0		158	—
The Yards - Arris	Washington, D.C.	Q1-16	25	%		25	%	142.7		142.7		35.7		327	19,000
Blossom Plaza	Los Angeles, CA	Q2-16	25	%		25	%	106.7		106.7		26.7		237	19,000
B2 BKLYN (g)	Brooklyn, NY	TBD	100	%		100	%	193.7		193.7		193.7		363	4,000
								$	547.4	$	547.4	$	328.7	1,173	48,000
Office:
300 Massachusetts Ave	Cambridge, MA	Q1-16	50	%	(e)	50	%	$	0.0	$	175.3	$	87.7	246,000	246,000	94%

Retail:
Antelope Valley Mall Expansion	Palmdale, CA	Q4-14	51	%	(e)	51	%	$	0.0	$	21.9	$	11.2	99,000	99,000	70%
Galleria at Sunset Expansion	Henderson, NV	Q2-15	51	%	(e)	51	%	0.0		24.4		12.4		32,000	32,000	69%
								$	0.0	$	46.3	$	23.6	131,000	131,000
Total Projects Under Construction								$	547.4	$	769.0	$	440.0

Fee Development Project (h)
Dept. of Health & Mental Hygiene (DHMH)	Baltimore, MD	Q4-14	-			-		$	0.0	$	138.0	$	0.0	234,000


(a)	The Company invests in certain real estate projects through joint ventures and, at times, may provide funding at percentages that differ from the Company's legal ownership.

(b)

Amounts represent estimated project costs to achieve stabilization and are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100% if we are deemed to have control or to be the primary beneficiary of our investments in the Company's VIE. Upon completion, our completed rental properties recorded on the consolidated balance sheet may include costs, in addition to costs above, not allocated to our partners, such as corporate capitalized interest.


(c)	Project cost at pro-rata share represents the Company's share of project cost, based on the Company's pro-rata ownership of each property (a non-GAAP measure). Under the pro-rata consolidation method of accounting, the Company determines its pro-rata share by multiplying its pro-rata ownership by the total project cost of the applicable property.


(d)	Lease commitments as of October 27, 2014.


(e)	Reported under the equity method of accounting. This method represents a GAAP measure for investments in which the Company is not deemed to have control or to be the primary beneficiary of our investments in a VIE.


(f)	Represents legal ownership of the residential units. Legal ownership for the retail space is 100%.

(g)

Based on the recent events related to the construction of B2 BKLYN and the uncertainty these events have caused, including the ceasing of construction of the building and litigation between the Company and Skanska USA, the project's Construction Manager, the anticipated opening date is currently indeterminable. Total project costs as disclosed are at significant risk. Based on the most current information available, total project costs could increase up to an amount ranging from $215 million to $265 million. The Company has commenced litigation against the Construction Manager to enforce its respective rights and recover damages in regards to the fixed price contract it entered into with the Construction Manager.


(h)	This is a fee development project in which the Company has no ownership interests. Therefore, these costs are not included on the full consolidation or pro-rata balance sheet.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

Projects Under Development

as of September 30, 2014

Below is a summary of our active large scale development projects, referred to as our “shadow pipeline,” which are crucial to our long-term growth. While we cannot make any assurances on the timing or delivery of these projects, our track record speaks to our ability to bring large, complex projects to fruition when there is demand and available construction financing. The projects listed below represent pro-rata costs of $296.8 million ($126.5 million at full consolidation) of Projects Under Development on our balance sheet and pro-rata mortgage debt of $87.1 million ($11.2 million at full consolidation).


1)	Pacific Park Brooklyn (formerly Atlantic Yards) - Brooklyn, NY

Pacific Park Brooklyn a 22-acre mixed-use project, is located adjacent to the state-of-the-art arena, Barclays Center. At full build-out, Pacific Park Brooklyn is expected to feature more than 6,400 units of housing, including 2,250 affordable units, approximately 250,000 square feet of retail space, and more than 8 acres of landscaped open space.

On June 30, 2014, we entered into a joint venture with Greenland Atlantic Yards, LLC, a subsidiary of Shanghai-based Greenland Holding Group Company Limited ("Greenland"), to develop the Pacific Park Brooklyn project. The joint venture will execute on the remaining development rights, including the infrastructure and vertical construction of the residential units, but excludes Barclays Center and the under construction B2 BKLYN apartment community. Under the joint venture, Greenland acquired 70% of the project and will co-develop the project with us, along with sharing in the entire project costs going forward in proportion to ownership interests. The joint venture will develop the project consistent with the approved master plan. The joint venture is accounted for on the equity method of accounting, resulting in the deconsolidation of the Pacific Park Brooklyn development project. The closing of this joint venture significantly reduced our equity requirements for the full build-out of this project, thereby reducing our development risk and improving our future liquidity.


2)	The Yards - Washington, D.C.

The Yards is a 42-acre mixed-use project, located in the neighborhood of the Washington Nationals baseball park in the Capitol Riverfront District. At full build-out, the project is expected to include up to 2,800 residential units, 1.8 million square feet of office space and approximately 300,000 square feet of retail and dining space. The Yards features a 5.5-acre publicly funded public park that is a gathering place and recreational focus for the community. Current completed projects include Foundry Lofts, Boilermaker Shops, and Lumber Shed. Phased opening began in Q2-14 for Twelve12 and is expected to be fully opened in Q4-14. Arris is currently under construction.


3)	The Science + Technology Park at Johns Hopkins - Baltimore, MD

The Science + Technology Park at Johns Hopkins is a 31-acre center for collaborative research directly adjacent to the world-renowned Johns Hopkins medical and research complex. Plans call for 1.1 million square feet in five buildings, with future phases that could support additional expansion. Current completed projects include 855 North Wolfe Street and a 492,000 square-foot parking garage for Johns Hopkins and the active buildings at the Science + Technology Park. Currently under construction is a 234,000 square-foot commercial building being developed on a fee basis which will be fully leased by the Department of Health & Mental Hygiene (DHMH).

4) Waterfront Station - Washington, D.C.

Located in Southwest Washington, D.C., Waterfront Station is adjacent to the Waterfront/Southeastern University MetroRail station. Waterfront Station is expected to include 660,000 square feet of office space, 365 residential units and 40,000 square feet of retail stores and restaurants.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

Land Inventory

Land inventory represents undeveloped land parcels we currently do not intend to hold for future vertical development. A summary of our land inventory follows:



	September 30, 2014				December 31, 2013
	Full Consolidation (GAAP)		Pro-Rata Consolidation (Non-GAAP)		Full Consolidation (GAAP)		Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Stapleton	$	56,666	$	51,149	$	64,395	$	58,149
Commercial outlots	57,226		65,264		64,293		71,669
Total Land Inventory ⁽¹⁾	$	113,892	$	116,413	$	128,688	$	129,818


(1)	A full reconciliation of pro-rata consolidation (non-GAAP) to their GAAP equivalents can be found in the Selected Financial Information section of this supplemental package.

Stapleton

Stapleton represents one of the nation's largest urban redevelopments. At full build-out of 4,700 acres or 7.5 square miles, Stapleton is planned for more than 12,000 homes and apartments, 3 million square feet of retail and 10 million square feet of office/research and development/industrial space. Located 10 minutes east of Downtown Denver and 20 minutes from Denver International Airport, Stapleton is expected to be home to 30,000 residents and 35,000 workers when complete. As of September 30, 2014, we own 310 gross acres, of which 144 acres are saleable. We also have an option to purchase an additional 849 gross acres at Stapleton.

Commercial Outlots

Commercial outlots are primarily undeveloped parcels of land adjacent to our retail assets throughout the United States. These parcels are sold to third party operators that benefit from being in close proximity to the existing retail asset. Typically, these outlots have zoning and entitlements consistent with our retail asset. Also included in commercial outlots is Las Vegas Land, a 13.5 acre parcel of undeveloped land located in downtown Las Vegas, NV adjacent to the City Hall.

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

(THIS PAGE INTENTIONALLY LEFT BLANK)

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Common Stock Data (NYSE: FCE A and FCE B)

The following summarizes information related to the Company’s Class A and Class B common stock based on information reported by the New York Stock Exchange:



	Quarter Ended						Two months ended		Quarter Ended
	September 30, 2014		June 30, 2014		March 31, 2014		December 31, 2013		October 31, 2013
Class A Common Stock
Closing Price, end of period	$	19.56	$	19.87	$	19.10	$	19.10	$	20.26
High Closing Price	$	21.30	$	20.09	$	19.58	$	20.51	$	20.50
Low Closing Price	$	19.17	$	18.46	$	17.71	$	18.20	$	16.91
Average Closing Price	$	19.99	$	19.10	$	18.88	$	19.32	$	18.72
Total Volume	47,200,607		40,112,884		48,844,589		29,215,341		67,320,220
Average Volume	737,509		636,712		800,731		712,569		1,035,696
Common shares outstanding, end of period	179,695,113		179,662,635		178,207,223		177,556,917		177,536,314
Class B Common Stock
Closing Price, end of period	$	19.83	$	19.89	$	19.02	$	18.93	$	20.41
High Closing Price	$	21.30	$	20.05	$	19.64	$	20.41	$	20.41
Low Closing Price	$	19.13	$	18.48	$	17.69	$	18.30	$	16.87
Average Closing Price	$	20.03	$	19.08	$	18.90	$	19.24	$	18.66
Total Volume	121,763		46,127		62,624		28,007		32,292
Average Volume	1,903		732		1,027		683		497
Common shares outstanding, end of period	19,220,506		19,227,650		19,548,552		20,173,558		20,191,151
Common Equity Market Capitalization	$	3,895,979,044	$	3,952,334,516	$	3,775,571,418	$	3,773,222,568	$	4,008,987,114
Quarterly dividends declared per common share Class A and Class B	$	—	$	—	$	—	$	—	$	—

Financial Covenants

The Company’s revolving credit facility contains certain restrictive financial covenants. A summary of the key financial covenants as defined in the agreement, all of which the Company is compliant with at September 30, 2014, follows:



	Requirement Per Agreement		As of September 30, 2014			As of June 30, 2014			As of March 31, 2014			As of December 31, 2013
	(dollars in thousands)
Credit Facility Financial Covenants
Debt Service Coverage Ratio	1.45x		1.72		x	1.65		x	1.60		x	1.60		x
Debt Yield Ratio	>9.25%		11.80		%	11.55		%	10.56		%	11.57		%
Cash Flow Coverage Ratio	3.00x		6.36		x	5.05		x	4.20		x	3.62		x
Total Development Ratio	<17%		7.18		%	6.40		%	8.36		%	7.82		%
Minimum Consolidated Shareholders’ Equity, as defined	$	2,320,175	$	3,755,092		$	3,675,042		$	3,749,687		$	3,738,475

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Nonrecourse Debt Maturities Table (dollars in thousands)

As of September 30, 2014



	Year Ending December 31, 2014												Year Ending December 31, 2015
	Full Consolidation			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation			Full Consolidation			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation
Fixed:
Fixed-rate debt	$	13,361		$	1,397		$	13,893		$	25,857		$	300,417		$	73,648		$	129,998		$	356,767
Weighted average rate	3.62		%	8.95		%	5.55		%	4.37		%	6.41		%	8.98		%	5.21		%	5.44		%
Variable:
Variable-rate debt	1,747			25			11,138			12,860			134,364			7,151			129,559			256,772
Weighted average rate	3.84		%	3.62		%	3.60		%	3.63		%	2.87		%	3.23		%	2.30		%	2.58		%

Tax-Exempt	135,810			239			799			136,370			10			—			53,034			53,044
Weighted average rate	2.45		%	2.04		%	1.41		%	2.44		%	3.01		%	—		%	2.34		%	2.34		%
Total variable-rate debt	137,557			264			11,937			149,230			134,374			7,151			182,593			309,816
Total Nonrecourse Debt	$	150,918		$	1,661		$	25,830		$	175,087		$	434,791		$	80,799		$	312,591		$	666,583
Weighted Average Rate	2.57		%	7.88		%	4.58		%	2.81		%	5.32		%	8.47		%	3.52		%	4.09		%

	Thereafter												Total
	Full Consolidation			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation			Full Consolidation			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation
Fixed:
Fixed-rate debt	$	1,878,538		$	322,834		$	1,705,457		$	3,261,161		$	2,192,316		$	397,879		$	1,849,348		$	3,643,785
Weighted average rate	5.44		%	7.56		%	5.08		%	5.04		%	5.57		%	7.83		%	5.09		%	5.08		%
Variable:
Variable-rate debt	1,104,979			—			239,397			1,344,376			1,241,090			7,176			380,094			1,614,008
Weighted average rate	5.48		%	—		%	2.91		%	5.03		%	5.20		%	3.23		%	2.72		%	4.62		%

Tax-Exempt	447,170			13,754			164,958			598,374			582,990			13,993			218,791			787,788
Weighted average rate	1.18		%	2.21		%	1.37		%	1.21		%	1.48		%	2.20		%	1.60		%	1.50		%
Total variable-rate debt	1,552,149			13,754			404,355			1,942,750			1,824,080			21,169			598,885			2,401,796
Total Nonrecourse Debt	$	3,430,687		$	336,588		$	2,109,812		$	5,203,911		$	4,016,396		$	419,048		$	2,448,233		$	6,045,581
Weighted Average Rate	4.90		%	7.35		%	4.54		%	4.60		%	4.86		%	7.56		%	4.41		%	4.49		%

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands)



	Three Months Ended September 30, 2014														Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Commercial Group
Total revenues	$	129,345		$	5,066		$	68,015		$	—	$	192,294		$	383,221		$	14,602		$	207,093		$	7,029		$	582,741
Exclude straight-line rent adjustment	(200		)	—			—			—		(200		)	(4,236		)	—			—			79			(4,157		)
Add interest and other income	1,579			6			59			—		1,632			5,585			49			134			—			5,670
Equity in earnings (loss) of unconsolidated entities	15,275			—			(15,792		)	—		(517		)	43,253			—			(43,789		)	—			(536		)
Exclude operating expenses of unconsolidated entities	27,462			—			(27,462		)	—		—			84,883			—			(84,883		)	—			—
Exclude gain on disposition of unconsolidated entities	(9,189		)	—			9,189			—		—			(25,279		)	—			25,279			—			—
Exclude depreciation and amortization of unconsolidated entities	14,044			—			(14,044		)	—		—			43,197			—			(43,197		)	—			—
Exclude interest expense of unconsolidated entities	20,277			—			(20,277		)	—		—			60,949			—			(60,949		)	—			—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	(312		)	—			312			—		—			(312		)	—			312			—			—
Adjusted revenues	198,281			5,072			—			—		193,209			591,261			14,651			—			7,108			583,718
Operating expenses	70,224			2,801			27,462			—		94,885			224,929			7,866			84,883			3,014			304,960
Operating expenses of unconsolidated entities	27,462			—			(27,462		)	—		—			84,883			—			(84,883		)	—			—
Write-offs of abandoned development projects and demolition costs	456			—			—			—		456			1,106			—			—			—			1,106
Non-Real Estate depreciation and amortization	255			—			—			—		255			658			—			—			—			658
Exclude straight-line rent adjustment	(597		)	—			—			—		(597		)	(1,471		)	—			—			—			(1,471		)
Adjusted operating expenses	97,800			2,801			—			—		94,999			310,105			7,866			—			3,014			305,253
Net operating income	100,481			2,271			—			—		98,210			281,156			6,785			—			4,094			278,465
Interest expense	(31,093		)	(1,153		)	(20,277		)	—		(50,217		)	(97,938		)	(3,449		)	(60,949		)	(5,538		)	(160,976		)
Interest expense of unconsolidated entities	(20,277		)	—			20,277			—		—			(60,949		)	—			60,949			—			—
Gain (loss) on extinguishment of debt	—			—			312			—		312			(871		)	—			312			(448		)	(1,007		)
Gain (loss) on extinguishment of debt of unconsolidated entities	312			—			(312		)	—		—			312			—			(312		)	—			—
Impairment of non-depreciable real estate	(966		)	—			—			—		(966		)	(966		)	—			—			—			(966		)
Loss on disposition of partial interest in development project	—			—			—			—		—			(19,590		)	(3,379		)	—			—			(16,211		)
Amortization of mortgage procurement costs - Real Estate Groups	(2,043		)	—			—			—		(2,043		)	(5,802		)	—			—			(41		)	(5,843		)
Net gain on change in control of interests	—			—			—			—		—			—			—			—			—			—
Straight-line rent adjustment	(397		)	—			—			—		(397		)	2,765			—			—			(79		)	2,686
Noncontrolling interest in FFO	(1,118		)	(1,118		)	—			—		—			43			43			—			—			—
Pre-tax FFO from discontinued operations	—			—			—			—		—			(2,012		)	—			—			2,012			—
Income tax benefit (expense) on FFO	—			—			—			—		—			—			—			—			—			—
Funds From Operations (FFO)	$	44,899		$	—		$	—		$	—	$	44,899		$	96,148		$	—		$	—		$	—		$	96,148
Depreciation and amortization - Real Estate Groups	(41,725		)	—			—			—		(41,725		)	(130,198		)	—			—			(986		)	(131,184		)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	(173		)	—			9,189			—		9,016			(640		)	—			25,279			28,042			52,681
Gain on disposition of unconsolidated entities	9,189			—			(9,189		)	—		—			25,279			—			(25,279		)	—			—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—			—			—		—			(129,059		)	—			—			—			(129,059		)
Non-FFO from discontinued operations	—			—			—			—		—			27,056			—			—			(27,056		)	—
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	12,190		$	—		$	—		$	—	$	12,190		$	(111,414	)	$	—		$	—		$	—		$	(111,414	)

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands) (continued)



	Three Months Ended September 30, 2014														Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Residential Group
Total revenues	$	63,303		$	717		$	40,305		$	—	$	102,891		$	190,525		$	3,454		$	120,116		$	—	$	307,187
Exclude straight-line rent adjustment	13			—			—			—		13			42			—			—			—		42
Add interest and other income	5,101			129			37			—		5,009			18,145			458			152			—		17,839
Equity in earnings (loss) of unconsolidated entities	5,577			17			(5,560		)	—		—			39,714			94			(40,111		)	—		(491		)
Exclude operating expenses of unconsolidated entities	21,027			—			(21,027		)	—		—			60,465			—			(60,465		)	—		—
Exclude gain on disposition of unconsolidated entities	—			—			—			—		—			(24,796		)	—			24,796			—		—
Exclude depreciation and amortization of unconsolidated entities	8,275			—			(8,275		)	—		—			23,674			—			(23,674		)	—		—
Exclude interest expense of unconsolidated entities	5,480			—			(5,480		)	—		—			20,518			—			(20,518		)	—		—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	—			—			—			—		—			296			—			(296		)	—		—
Adjusted revenues	108,776			863			—			—		107,913			328,583			4,006			—			—		324,577
Operating expenses	43,704			624			21,027			—		64,107			127,046			1,483			60,465			—		186,028
Operating expenses of unconsolidated entities	21,027			—			(21,027		)	—		—			60,465			—			(60,465		)	—		—
Write-offs of abandoned development projects	—			—			—			—		—			283			—			—			—		283
Non-Real Estate depreciation and amortization	178			—			—			—		178			472			—			—			—		472
Exclude straight-line rent adjustment	(29		)	—			—			—		(29		)	(89		)	—			—			—		(89		)
Adjusted operating expenses	64,880			624			—			—		64,256			188,177			1,483			—			—		186,694
Net operating income	43,896			239			—			—		43,657			140,406			2,523			—			—		137,883
Interest expense	(8,030		)	(390		)	(5,480		)	—		(13,120		)	(23,032		)	(720		)	(20,518		)	—		(42,830		)
Interest expense of unconsolidated entities	(5,480		)	—			5,480			—		—			(20,518		)	—			20,518			—		—
Gain (loss) on extinguishment of debt	(49		)	(37		)	—			—		(12		)	(56		)	(37		)	(296		)	—		(315		)
Gain (loss) on extinguishment of debt of unconsolidated entities	—			—			—			—		—			(296		)	—			296			—		—
Impairment of non-depreciable real estate	—			—			—			—		—			—			—			—			—		—
Loss on disposition of partial interest in development project	—			—			—			—		—			—			—			—			—		—
Amortization of mortgage procurement costs - Real Estate Groups	(796		)	—			—			—		(796		)	(2,182		)	—			—			—		(2,182		)
Net gain on change in control of interests	—			—			—			—		—			2,759			—			—			—		2,759
Straight-line rent adjustment	(42		)	—			—			—		(42		)	(131		)	—			—			—		(131		)
Noncontrolling interest in FFO	188			188			—			—		—			(1,766		)	(1,766		)	—			—		—
Pre-tax FFO from discontinued operations	—			—			—			—		—			—			—			—			—		—
Income tax benefit (expense) on FFO	—			—			—			—		—			—			—			—			—		—
Funds From Operations (FFO)	$	29,687		$	—		$	—		$	—	$	29,687		$	95,184		$	—		$	—		$	—	$	95,184
Depreciation and amortization - Real Estate Groups	(24,175		)	—			—			—		(24,175		)	(71,367		)	—			—			—		(71,367		)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	—			—			—			—		—			—			—			24,796			—		24,796
Gain on disposition of unconsolidated entities	—			—			—			—		—			24,796			—			(24,796		)	—		—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—			—			—		—			—			—			—			—		—
Non-FFO from discontinued operations	—			—			—			—		—			—			—			—			—		—
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	5,512		$	—		$	—		$	—	$	5,512		$	48,613		$	—		$	—		$	—	$	48,613

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands) (continued)



	Three Months Ended September 30, 2014													Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Arena
Total revenues	$	25,039		$	11,380		$	—	$	—	$	13,659		$	84,968		$	38,420		$	—	$	—	$	46,548
Exclude straight-line rent adjustment	340			—			—		—		340			(41		)	—			—		—		(41		)
Add interest and other income	—			—			—		—		—			—			—			—		—		—
Equity in earnings (loss) of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Exclude operating expenses of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Exclude gain on disposition of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Exclude depreciation and amortization of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Exclude interest expense of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Adjusted revenues	25,379			11,380			—		—		13,999			84,927			38,420			—		—		46,507
Operating expenses	17,105			7,693			—		—		9,412			55,399			24,805			—		—		30,594
Operating expenses of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Write-offs of abandoned development projects	—			—			—		—		—			—			—			—		—		—
Non-Real Estate depreciation and amortization	17			—			—		—		17			50			—			—		—		50
Exclude straight-line rent adjustment	—			—			—		—		—			—			—			—		—		—
Adjusted operating expenses	17,122			7,693			—		—		9,429			55,449			24,805			—		—		30,644
Net operating income	8,257			3,687			—		—		4,570			29,478			13,615			—		—		15,863
Interest expense	(10,895		)	(6,076		)	—		—		(4,819		)	(30,101		)	(15,826		)	—		—		(14,275		)
Interest expense of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Gain (loss) on extinguishment of debt	—			—			—		—		—			—			—			—		—		—
Gain (loss) on extinguishment of debt of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Impairment of non-depreciable real estate	—			—			—		—		—			—			—			—		—		—
Loss on disposition of partial interest in development project	—			—			—		—		—			—			—			—		—		—
Amortization of mortgage procurement costs - Real Estate Groups	—			—			—		—		—			(80		)	—			—		—		(80		)
Net gain on change in control of interests	—			—			—		—		—			—			—			—		—		—
Straight-line rent adjustment	(340		)	—			—		—		(340		)	41			—			—		—		41
Noncontrolling interest in FFO	2,389			2,389			—		—		—			2,211			2,211			—		—		—
Pre-tax FFO from discontinued operations	—			—			—		—		—			—			—			—		—		—
Income tax benefit (expense) on FFO	—			—			—		—		—			—			—			—		—		—
Funds From Operations (FFO)	$	(589	)	$	—		$	—	$	—	$	(589	)	$	1,549		$	—		$	—	$	—	$	1,549
Depreciation and amortization - Real Estate Groups	(4,986		)	—			—		—		(4,986		)	(14,927		)	—			—		—		(14,927		)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	—			—			—		—		—			—			—			—		—		—
Gain on disposition of unconsolidated entities	—			—			—		—		—			—			—			—		—		—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—			—		—		—			—			—			—		—		—
Non-FFO from discontinued operations	—			—			—		—		—			—			—			—		—		—
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(5,575	)	$	—		$	—	$	—	$	(5,575	)	$	(13,378	)	$	—		$	—	$	—	$	(13,378	)

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands) (continued)



	Three Months Ended September 30, 2014														Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Land Group
Total revenues	$	17,056		$	1,702		$	327		$	—	$	15,681		$	55,203		$	5,496		$	2,380		$	—	$	52,087
Exclude straight-line rent adjustment	—			—			—			—		—			—			—			—			—		—
Add interest and other income	3,384			334			1			—		3,051			10,091			994			7			—		9,104
Equity in earnings (loss) of unconsolidated entities	(559		)	—			560			—		1			(63		)	—			(63		)	—		(126		)
Exclude operating expenses of unconsolidated entities	777			—			(777		)	—		—			1,998			—			(1,998		)	—		—
Exclude gain on disposition of unconsolidated entities	—			—			—			—		—			—			—			—			—		—
Exclude depreciation and amortization of unconsolidated entities	10			—			(10		)	—		—			30			—			(30		)	—		—
Exclude interest expense of unconsolidated entities	101			—			(101		)	—		—			296			—			(296		)	—		—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	—			—			—			—		—			—			—			—			—		—
Adjusted revenues	20,769			2,036			—			—		18,733			67,555			6,490			—			—		61,065
Operating expenses	5,358			491			777			—		5,644			24,307			2,278			1,998			—		24,027
Operating expenses of unconsolidated entities	777			—			(777		)	—		—			1,998			—			(1,998		)	—		—
Write-offs of abandoned development projects	—			—			—			—		—			—			—			—			—		—
Non-Real Estate depreciation and amortization	49			—			—			—		49			150			—			—			—		150
Exclude straight-line rent adjustment	—			—			—			—		—			—			—			—			—		—
Adjusted operating expenses	6,184			491			—			—		5,693			26,455			2,278			—			—		24,177
Net operating income	14,585			1,545			—			—		13,040			41,100			4,212			—			—		36,888
Interest expense	287			14			(101		)	—		172			572			14			(296		)	—		262
Interest expense of unconsolidated entities	(101		)	—			101			—		—			(296		)	—			296			—		—
Gain (loss) on extinguishment of debt	—			—			—			—		—			—			—			—			—		—
Gain (loss) on extinguishment of debt of unconsolidated entities	—			—			—			—		—			—			—			—			—		—
Impairment of non-depreciable real estate	—			—			—			—		—			(770		)	—			—			—		(770		)
Loss on disposition of partial interest in development project	—			—			—			—		—			—			—			—			—		—
Amortization of mortgage procurement costs - Real Estate Groups	—			—			—			—		—			(7		)	—			—			—		(7		)
Net gain on change in control of interests	—			—			—			—		—			—			—			—			—		—
Straight-line rent adjustment	—			—			—			—		—			—			—			—			—		—
Noncontrolling interest in FFO	(1,559		)	(1,559		)	—			—		—			(4,226		)	(4,226		)	—			—		—
Pre-tax FFO from discontinued operations	—			—			—			—		—			—			—			—			—		—
Income tax benefit (expense) on FFO	—			—			—			—		—			—			—			—			—		—
Funds From Operations (FFO)	$	13,212		$	—		$	—		$	—	$	13,212		$	36,373		$	—		$	—		$	—	$	36,373
Depreciation and amortization - Real Estate Groups	(41		)	—			—			—		(41		)	(116		)	—			—			—		(116		)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	—			—			—			—		—			—			—			—			—		—
Gain on disposition of unconsolidated entities	—			—			—			—		—			—			—			—			—		—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—			—			—		—			—			—			—			—		—
Non-FFO from discontinued operations	—			—			—			—		—			—			—			—			—		—
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	13,171		$	—		$	—		$	—	$	13,171		$	36,257		$	—		$	—		$	—	$	36,257

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands) (continued)



	Three Months Ended September 30, 2014												Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Corporate Group
Total revenues	$	—		$	—	$	—	$	—	$	—		$	—		$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment	—			—		—		—		—			—			—		—		—		—
Add interest and other income	32			—		—		—		32			153			—		—		—		153
Equity in earnings (loss) of unconsolidated entities	(947		)	—		—		—		(947		)	(2,361		)	—		—		—		(2,361		)
Exclude operating expenses of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Exclude gain on disposition of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Exclude depreciation and amortization of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Exclude interest expense of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Adjusted revenues	(915		)	—		—		—		(915		)	(2,208		)	—		—		—		(2,208		)
Operating expenses	13,763			—		—		—		13,763			35,383			—		—		—		35,383
Operating expenses of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Write-offs of abandoned development projects	—			—		—		—		—			—			—		—		—		—
Non-Real Estate depreciation and amortization	718			—		—		—		718			2,154			—		—		—		2,154
Exclude straight-line rent adjustment	—			—		—		—		—			—			—		—		—		—
Adjusted operating expenses	14,481			—		—		—		14,481			37,537			—		—		—		37,537
Net operating income	(15,396		)	—		—		—		(15,396		)	(39,745		)	—		—		—		(39,745		)
Interest expense	(9,581		)	—		—		—		(9,581		)	(28,418		)	—		—		—		(28,418		)
Interest expense of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Gain (loss) on extinguishment of debt	—			—		—		—		—			—			—		—		—		—
Gain (loss) on extinguishment of debt of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Impairment of non-depreciable real estate	—			—		—		—		—			—			—		—		—		—
Loss on disposition of partial interest in development project	—			—		—		—		—			—			—		—		—		—
Amortization of mortgage procurement costs - Real Estate Groups	—			—		—		—		—			—			—		—		—		—
Net gain on change in control of interests	—			—		—		—		—			—			—		—		—		—
Straight-line rent adjustment	—			—		—		—		—			—			—		—		—		—
Noncontrolling interest in FFO	—			—		—		—		—			—			—		—		—		—
Pre-tax FFO from discontinued operations	—			—		—		—		—			—			—		—		—		—
Income tax benefit (expense) on FFO	3,675			—		—		—		3,675			13,274			—		—		—		13,274
Funds From Operations (FFO)	$	(21,302	)	$	—	$	—	$	—	$	(21,302	)	$	(54,889	)	$	—	$	—	$	—	$	(54,889	)
Depreciation and amortization - Real Estate Groups	—			—		—		—		—			—			—		—		—		—
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	—			—		—		—		—			—			—		—		—		—
Gain on disposition of unconsolidated entities	—			—		—		—		—			—			—		—		—		—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—		—		—		—			—			—		—		—		—
Non-FFO from discontinued operations	—			—		—		—		—			—			—		—		—		—
Income tax benefit (expense) on non-FFO:
Gain on disposition of rental properties	(3,310		)	—		—		—		(3,310		)	(32,028		)	—		—		—		(32,028		)
Impairment of depreciable real estate	—			—		—		—		—			50,053			—		—		—		50,053
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(24,612	)	$	—	$	—	$	—	$	(24,612	)	$	(36,864	)	$	—	$	—	$	—	$	(36,864	)

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Funds From Operations (FFO) - Three and Nine Months Ended September 30, 2014 (in thousands) (continued)



	Three Months Ended September 30, 2014														Nine Months Ended September 30, 2014
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Total
Total revenues	$	234,743		$	18,865		$	108,647		$	—	$	324,525		$	713,917		$	61,972		$	329,589		$	7,029		$	988,563
Exclude straight-line rent adjustment	153			—			—			—		153			(4,235		)	—			—			79			(4,156		)
Add interest and other income	10,096			469			97			—		9,724			33,974			1,501			293			—			32,766
Equity in earnings (loss) of unconsolidated entities	19,346			17			(20,792		)	—		(1,463		)	80,543			94			(83,963		)	—			(3,514		)
Exclude operating expenses of unconsolidated entities	49,266			—			(49,266		)	—		—			147,346			—			(147,346		)	—			—
Exclude gain on disposition of unconsolidated entities	(9,189		)	—			9,189			—		—			(50,075		)	—			50,075			—			—
Exclude depreciation and amortization of unconsolidated entities	22,329			—			(22,329		)	—		—			66,901			—			(66,901		)	—			—
Exclude interest expense of unconsolidated entities	25,858			—			(25,858		)	—		—			81,763			—			(81,763		)	—			—
Exclude (gain) loss on extinguishment of debt of unconsolidated entities	(312		)	—			312			—		—			(16		)	—			16			—			—
Adjusted revenues	352,290			19,351			—			—		332,939			1,070,118			63,567			—			7,108			1,013,659
Operating expenses	150,154			11,609			49,266			—		187,811			467,064			36,432			147,346			3,014			580,992
Operating expenses of unconsolidated entities	49,266			—			(49,266		)	—		—			147,346			—			(147,346		)	—			—
Write-offs of abandoned development projects and demolition costs	456			—			—			—		456			1,389			—			—			—			1,389
Non-Real Estate depreciation and amortization	1,217			—			—			—		1,217			3,484			—			—			—			3,484
Exclude straight-line rent adjustment	(626		)	—			—			—		(626		)	(1,560		)	—			—			—			(1,560		)
Adjusted operating expenses	200,467			11,609			—			—		188,858			617,723			36,432			—			3,014			584,305
Net operating income	151,823			7,742			—			—		144,081			452,395			27,135			—			4,094			429,354
Interest expense	(59,312		)	(7,605		)	(25,858		)	—		(77,565		)	(178,917		)	(19,981		)	(81,763		)	(5,538		)	(246,237		)
Interest expense of unconsolidated entities	(25,858		)	—			25,858			—		—			(81,763		)	—			81,763			—			—
Gain (loss) on extinguishment of debt	(49		)	(37		)	312			—		300			(927		)	(37		)	16			(448		)	(1,322		)
Gain (loss) on extinguishment of debt of unconsolidated entities	312			—			(312		)	—		—			16			—			(16		)	—			—
Impairment of non-depreciable real estate	(966		)	—			—			—		(966		)	(1,736		)	—			—			—			(1,736		)
Loss on disposition of partial interest in development project	—			—			—			—		—			(19,590		)	(3,379		)	—			—			(16,211		)
Amortization of mortgage procurement costs - Real Estate Groups	(2,839		)	—			—			—		(2,839		)	(8,071		)	—			—			(41		)	(8,112		)
Net gain on change in control of interests	—			—			—			—		—			2,759			—			—			—			2,759
Straight-line rent adjustment	(779		)	—			—			—		(779		)	2,675			—			—			(79		)	2,596
Noncontrolling interest in FFO	(100		)	(100		)	—			—		—			(3,738		)	(3,738		)	—			—			—
Pre-tax FFO from discontinued operations	—			—			—			—		—			(2,012		)	—			—			2,012			—
Income tax benefit (expense) on FFO	3,675			—			—			—		3,675			13,274			—			—			—			13,274
Funds From Operations (FFO)	$	65,907		$	—		$	—		$	—	$	65,907		$	174,365		$	—		$	—		$	—		$	174,365
Depreciation and amortization - Real Estate Groups	(70,927		)	—			—			—		(70,927		)	(216,608		)	—			—			(986		)	(217,594		)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest	(173		)	—			9,189			—		9,016			(640		)	—			50,075			28,042			77,477
Gain on disposition of unconsolidated entities	9,189			—			(9,189		)	—		—			50,075			—			(50,075		)	—			—
Impairment of consolidated and unconsolidated depreciable real estate, net of noncontrolling interest	—			—			—			—		—			(129,059		)	—			—			—			(129,059		)
Non-FFO from discontinued operations	—			—			—			—		—			27,056			—			—			(27,056		)	—
Income tax benefit (expense) on non-FFO:
Gain on disposition of rental properties	(3,310		)	—			—			—		(3,310		)	(32,028		)	—			—			—			(32,028		)
Impairment of depreciable real estate	—			—			—			—		—			50,053			—			—			—			50,053
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	686		$	—		$	—		$	—	$	686		$	(76,786	)	$	—		$	—		$	—		$	(76,786	)

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FOREST CITY ENTERPRISES INC Reports