Forest City Realty Trust, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 3, 2017

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EX-99.2 - EXHIBIT 99.2 - Forest City Realty Trust, Inc.fcrtex992erq2-2017.htm
8-K - 8-K - Forest City Realty Trust, Inc.a8kforsupppackq2-2017.htm
Exhibit 99.1




fcrtlogoa04.jpg
Supplemental Package
For the Quarter Ended June 30, 2017



Forest City Realty Trust, Inc. and Subsidiaries - Supplemental Package
Second Quarter 2017
Index
Corporate Description
Selected Financial Information
 
Consolidated Balance Sheets
Consolidated Statements of Operations
Net Asset Value Components
Supplemental Operating Information
 
Occupancy Data
Retail Sales Data
Leasing Summary
Comparable Net Operating Income (NOI)
NOI Detail
Comparable NOI Margins
NOI by Product Type
NOI by Core Market
Reconciliation of Earnings (Loss) Before Income Taxes to NOI
Net Earnings
Interest Expense and Capital Expenditures

Reconciliation of Net Earnings to FFO
Reconciliation of FFO to Operating FFO
Reconciliation of NOI to Operating FFO
Reconciliation of Net Earnings to EBITDA
Operating FFO Bridges
Historical Trends
Development Pipeline
Supplemental Financial Information
 
Common Stock Data/Financial Covenants
Nonrecourse Debt Maturities Table
Appendix
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, perhaps materially, from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of our Form 10-K for the year ended December 31, 2016 and other factors that might cause differences, some of which could be material, include, but are not limited to, our ability to carry out future transactions and strategic investments, as well as the acquisition related costs, unanticipated difficulties realizing expected benefits expected when entering into a transaction, our ability to qualify or to remain qualified as a REIT, our ability to satisfy REIT distribution requirements, the impact of issuing equity, debt or both, and selling assets to satisfy our future distributions required as a REIT or to fund capital expenditures, future growth and expansion initiatives, the impact of the amount and timing of any future distributions, the impact from complying with REIT qualification requirements limiting our flexibility or causing us to forego otherwise attractive opportunities beyond rental real estate operations, the impact of complying with the REIT requirements related to hedging, our lack of experience operating as a REIT, legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service, the possibility that our Board of Directors will unilaterally revoke our REIT election, the possibility that the anticipated benefits of qualifying as a REIT will not be realized, or will not be realized within the expected time period, the impact of current lending and capital market conditions on our liquidity, our ability to finance or refinance projects or repay our debt, the impact of the slow economic recovery on the ownership, development and management of our commercial real estate portfolio, general real estate investment and development risks, litigation risks, vacancies in our properties, risks associated with developing and managing properties in partnership with others, competition, our ability to renew leases or re-lease spaces as leases expire, illiquidity of real estate investments, our ability to identify and transact on chosen strategic alternatives for a portion of our retail portfolio, bankruptcy or defaults of tenants, anchor store consolidations or closings, the impact of terrorist acts and other armed conflicts, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our revolving credit facility, term loan and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, our ability to receive payment on the notes receivable issued by Onexim in connection with their purchase of our interests in the Barclays Center and the Nets, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of our insurance carriers, environmental liabilities, competing interests of our directors and executive officers, the ability to recruit and retain key personnel, risks associated with the sale of tax credits, downturns in the housing market, 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 and international trade agreements, volatility in the market price of our publicly traded securities, inflation risks, cybersecurity risks, cyber incidents, shareholder activism efforts, conflicts of interest, risks related to our organizational structure including operating through our Operating Partnership and our UPREIT structure, as well as other risks listed from time to time in our SEC filings, including but not limited to, our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as 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.

1


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial and Operating Information

Corporate Description
We principally engage in the operation, development, management and acquisition of office, apartment and retail real estate and land throughout the United States. We have approximately $8.2 billion of consolidated assets in 20 states and the District of Columbia at June 30, 2017. 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 regional offices in Boston, Dallas, Denver, Los Angeles, New York City, San Francisco, Washington, D.C. and our corporate headquarters in Cleveland, Ohio.
Segments
Real Estate Operations represents the performance of our core rental real estate portfolio and is comprised of the following reportable operating segments:
•
Office - owns, acquires and operates office and life science buildings.
•
Apartments - owns, acquires and operates upscale and middle-market apartments, adaptive re-use developments and subsidized senior housing.
•
Retail - owns, acquires and operates amenity retail within our mixed-use projects, regional malls and specialty/urban retail centers .
The remaining reportable operating segments consist of the following:
•
Development - develops and constructs office and life science buildings, apartments, condominiums, amenity retail, regional malls, specialty/urban retail centers and mixed-use projects. The Development segment includes recently opened operating properties prior to stabilization and the horizontal development and sale of land to residential, commercial and industrial customers primarily at our Stapleton project in Denver, Colorado.
•
Corporate - provides executive oversight to the company and various support services for Operations, Development and Corporate employees.
•
Other - owned and operated several non-core investments, including the Barclays Center, a sports and entertainment arena located in Brooklyn, New York (“Arena”) (sold in January 2016), our equity method investment in the Brooklyn Nets (the “Nets”) (sold in January 2016), and military housing operations (sold in February 2016).

Segment Transfers
The Development segment includes projects in development and projects under construction along with recently opened operating properties prior to stabilization. Projects will be reported in their applicable operating segment (Office, Apartments or Retail) beginning on January 1 of the year following stabilization. Therefore, the Development segment will continue to report results from recently opened properties until the year-end following initial stabilization. We generally define stabilized properties as achieving 92% or greater occupancy or having been open and operating for one or two years, depending on the size of the project. Once a stabilized property is transferred to the applicable Operations segment on January 1, it will be considered “comparable” beginning on the following January 1.

Segment Reclassifications
We recently completed an internal reorganization and began presenting new reportable operating segments during the three months ended September 30, 2016. The prior period has been recast to conform to the current period presentation.
Concurrent with our internal reorganization, certain functions previously performed within our old business unit structure were centralized into our corporate segment. We analyzed the allocation methodology of these new corporate functions and our historic corporate functions and how it relates to support services provided to our new segments within our new organizational structure. As a result of this analysis, certain expenses previously recorded in the old business units and reported on the property operating and management expenses financial statement line item are recorded in the corporate segment and included in the corporate general and administrative expense financial statement line item. To conform to the current year presentation, $800,000 and $2,260,000 have been reclassed from property operating and management expenses to corporate general and administrative expenses for the three and six months ended June 30, 2016, respectively.
Company Operations
We believe that we are organized in a manner enabling us to qualify, and intend to operate in a manner allowing us to continue to qualify, as a REIT for federal income tax purposes. As such, we intend to elect REIT status for our taxable year ended December 31, 2016, upon filing the 2016 Form 1120-REIT with the Internal Revenue Service on or before October 15, 2017.
We hold substantially all of our assets, and conduct substantially all of our business, through the Operating Partnership. We are the sole general partner of the Operating Partnership and, as of June 30, 2017, we directly or indirectly own all of the limited partnership interests in the Operating Partnership.

2


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial and Operating Information

We hold and operate certain of our assets through one or more taxable REIT subsidiaries (“TRSs”). A TRS is a subsidiary of a REIT subject to applicable corporate income tax. Our use of TRSs enables us to continue to engage in certain businesses while complying with REIT qualification requirements and allows us to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. The primary businesses held in TRSs include 461 Dean Street, an apartment building in Brooklyn, New York, South Bay Galleria and Antelope Valley Mall, regional malls in Redondo Beach, California and Palmdale, California, respectively, Pacific Park Brooklyn project, land development operations, Barclays Center arena (sold in January 2016), the Nets (sold in January 2016) and military housing operations (sold in February 2016). In the future, we may elect to reorganize and transfer certain assets or operations from our TRSs to other subsidiaries, including qualified REIT subsidiaries.

Supplemental Financial and Operating Information
We recommend this supplemental package be read in conjunction with our Form 10-Q for the three and six months ended June 30, 2017. This supplemental package contains consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”). We also present certain financial information at total company ownership because we believe this information is useful to financial statement users as this method reflects the manner in which we operate our business. We believe financial information and other operating metrics at total company ownership including net asset value (“NAV”) components, net operating income (“NOI”), comparable NOI, comparable NOI margins, Funds From Operations (“FFO”), Operating FFO, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Net Debt to Adjusted EBITDA are necessary to understand our business and operating results, along with net earnings and other GAAP measures. Our financial statement users can use these non-GAAP measures as supplementary information to evaluate our business. Our non-GAAP measures or information shown at total company ownership are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP measures.

This supplemental package also contains financial information of entities consolidated under GAAP (“Fully Consolidated Entities”), financial information on our partners’ share of entities consolidated under GAAP (“Noncontrolling Interest”) and financial information on our share of entities accounted for using the equity method of accounting (“Company Share of Unconsolidated Entities”). We believe disclosing financial information on Fully Consolidated Entities, Noncontrolling Interest and Company Share of Unconsolidated Entities is essential to allow our financial statement users the ability to arrive at our total company ownership of all of our real estate investments, whether or not we “control” the investment under GAAP.

Financial information related to Fully Consolidated Entities, Noncontrolling Interest and Company Share of Unconsolidated Entities is included in the Appendix section of this supplemental package.

Supplemental Operating Information
The operating information contained in this document includes: occupancy data, retail sales data, leasing summaries, comparable NOI, comparable NOI margins, NOI by product type and core market, reconciliation of earnings (loss) before income taxes to NOI, reconciliation of net earnings to FFO, reconciliation of FFO to Operating FFO, reconciliation of NOI to Operating FFO, reconciliation of net earnings to EBITDA, Operating FFO bridges, historical trends 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 open and operated in the three and six months ended June 30, 2017 and 2016. We believe occupancy data, retail sales data, leasing spreads on office and retail properties, and other rental rate information on multi-family properties represent meaningful operating statistics about us.

Consolidation Method
In line with industry practice, we have a number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. Under GAAP, the full consolidation method is used to report assets and liabilities 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%.

Net Asset Value Components
We disclose components of our business relevant to calculate 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 NAV 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. NAV components are shown at our total company ownership. We believe disclosing the components at total company ownership is essential to estimate NAV, as they represent our estimated proportionate amount of assets and liabilities the Company is entitled to.

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 at the

3


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial and Operating Information

Company’s share. Although these measures are not presented in accordance with GAAP, investors can use these non-GAAP measures as supplementary information to evaluate our business.

FFO
FFO, a non-GAAP measure, along with net earnings, provides additional information about our core operations. While property dispositions, acquisitions or other factors impact net earnings in the short-term, we believe FFO presents a consistent view of the overall financial performance of our business from period-to-period since the core of our business is the recurring operations of our portfolio of real estate assets. Management believes that the exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the Company’s core assets and assists in comparing those operating results between periods. Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes ratably over time. Since real estate values have historically risen or fallen with market conditions, many real estate investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets and impairment of depreciable real estate, management believes that FFO, along with the required GAAP presentations, provides another measurement of the Company’s performance relative to its competitors and an additional basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide.

The majority of our peers in the publicly traded real estate industry report operations using FFO as defined by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO is defined by NAREIT as net earnings excluding the following items at our ownership: i) gain (loss) on full or partial 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); and iv) cumulative or retrospective effect of change in accounting principle (net of tax).

Operating FFO
In addition to reporting FFO, we report Operating FFO, a non-GAAP measure, 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) impairment of non-depreciable real estate; ii) write-offs of abandoned development projects and demolition costs; iii) income recognized on state and federal historic and other tax credits; iv) gains or losses from extinguishment of debt; v) change in fair market value of nondesignated hedges; vi) gains or losses on change in control of interests; vii) the adjustment to recognize rental revenues and rental expense using the straight-line method; viii) participation payments to ground lessors on refinancing of our properties; ix) other transactional items; x) the Nets pre-tax FFO; and xi) income taxes on FFO.

EBITDA
EBITDA, a non-GAAP measure, is defined as net earnings excluding the following items at our company share: i) non-cash charges for depreciation and amortization; ii) interest expense; iii) amortization of mortgage procurement costs; and iv) income taxes. EBITDA may not be directly comparable to similarly-titled measures reported by other companies. We use EBITDA as the starting point in order to calculate Adjusted EBITDA as described below.

Adjusted EBITDA
We define Adjusted EBITDA, a non-GAAP measure, as EBITDA adjusted to exclude: i) impairment of real estate; ii) gains or losses from extinguishment of debt; iii) gain (loss) on full or partial disposition of rental properties, development projects and other investments; iv) gains or losses on change in control of interests; v) other transactional items, including organizational transformation and termination benefits; and vi) the Nets pre-tax EBITDA. We believe EBITDA, Adjusted EBITDA and net debt to Adjusted EBITDA provide additional information in evaluating our credit and ability to service our debt obligations. Adjusted EBITDA is used by the chief operating decision maker and management to assess operating performance and resource allocations by segment and on a consolidated basis. Management believes Adjusted EBITDA gives the investment community a further understanding of the Company’s operating results, including the impact of general and administrative expenses and acquisition-related expenses, before the impact of investing and financing transactions and facilitates comparisons with competitors. However, Adjusted EBITDA should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating Adjusted EBITDA and, accordingly, the Company’s Adjusted EBITDA may not be comparable to other REITs.



4


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial and Operating Information


Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA, a non-GAAP measure, is defined as total debt, net at our company share (total debt includes outstanding borrowings on our revolving credit facility, our term loan facility, convertible senior debt, net, nonrecourse mortgages and notes payable, net) less cash and equivalents, at our company share, divided by Adjusted EBITDA. Net Debt to Adjusted EBITDA is a supplemental measure derived from non-GAAP financial measures that the Company uses to evaluate its capital structure and the magnitude of its debt against its operating performance. The Company believes that investors use versions of this ratio in a similar manner. The Company’s method of calculating the ratio may be different from methods used by other REITs and, accordingly, may not be comparable to other REITs.

NOI
NOI, a non-GAAP measure, reflects our share of the core operations of our rental real estate portfolio, prior to any financing activity. NOI is defined as revenues less operating expenses at our ownership within our Office, Apartments, Retail, and Development segments, except for revenues and cost of sales associated with sales of land held in these segments. The activities of our Corporate and Other segments do not involve the operations of our rental property portfolio and therefore are not included in NOI.

We believe NOI provides important information about our core operations and, along with earnings before income taxes, is necessary to understand our business and operating results. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, revenues and cost of sales associated with sales of land, other non-property income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating office, apartment and retail real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. We use NOI to evaluate our operating performance on a portfolio basis since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant mix have on our financial results. Investors can use NOI as supplementary information to evaluate our business. In addition, management believes NOI provides useful information to the investment community about our financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry. NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, our GAAP measures, and may not be directly comparable to similarly-titled measures reported by other companies.

Comparable NOI
We use comparable NOI, a non-GAAP measure, as a metric to evaluate the performance of our office, apartment and retail properties. This measure provides a same-store comparison of operating results of all stabilized properties that are open and operating in all periods presented. Non-capitalizable development costs and unallocated management and service company overhead, net of service fee revenues, are not directly attributable to an individual operating property and are considered non-comparable NOI. In addition, certain income and expense items at the property level, such as lease termination income, real estate tax assessments or rebates, certain litigation expenses incurred and any related legal settlements and NOI impacts of changes in ownership percentages, are excluded from comparable NOI. Other properties and activities such as Arena, federally assisted housing, military housing, straight-line rent adjustments and participation payments as a result of refinancing transactions are not evaluated on a comparable basis and the NOI from these properties and activities is considered non-comparable NOI.

Comparable NOI is an operating statistic defined as NOI from stabilized properties operated in all periods presented. We believe comparable NOI is useful because it measures the performance of the same properties on a period-to-period basis and is used to assess operating performance and resource allocation of the operating properties. While property dispositions, acquisitions or other factors impact net earnings in the short term, we believe comparable NOI presents a consistent view of the overall performance of our operating portfolio from period to period. A reconciliation of earnings (loss) before income taxes, the most comparable financial measure calculated in accordance with GAAP, to NOI, a reconciliation of NOI to earnings (loss) before income taxes for each operating segment and a reconciliation from NOI to comparable NOI are included in this supplemental package.

Comparable NOI margin information is an operating statistic derived from comparable NOI as a percentage of revenues associated with comparable NOI. We believe comparable NOI margins are useful in evaluating revenue enhancements and expense management on our comparable properties while also assessing the execution of our business strategies.








5


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial and Operating Information

Corporate Headquarters
Forest City Realty Trust, Inc.
Terminal Tower
50 Public Square, Suite 1100
Cleveland, Ohio 44113
Annual Report on Form 10-K
A copy of the Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2016, 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
Michael E. Lonsway
Executive Vice President - Planning
MikeLonsway@forestcity.net
Investor Presentations
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 ($.01 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 Realty Trust, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”). 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.


6


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Consolidated Balance Sheets – (Unaudited)
 
June 30, 2017
December 31, 2016
 
(in thousands)
Assets
 
 
Real Estate
 
 
Completed rental properties
 
 
Office
$
3,520,419

$
3,603,480

Apartments
2,607,336

2,586,720

Retail
290,583

288,582

Total Operations
6,418,338

6,478,782

Recently-Opened Properties/Redevelopment
832,246

622,939

Corporate
10,990

10,626

Total completed rental properties
7,261,574

7,112,347

Projects under construction
 
 
Office
133,823

110,526

Apartments
297,055

399,332

Retail
9,103

6,457

Total projects under construction
439,981

516,315

Projects under development
 
 
Operating properties
1,485

1,637

Office
109,040

103,598

Apartments
98,125

113,430

Retail
—

—

Total projects under development
208,650

218,665

Total projects under construction and development
648,631

734,980

Land inventory
73,555

68,238

Total Real Estate
7,983,760

7,915,565

Less accumulated depreciation
(1,506,397
)
(1,442,006
)
Real Estate, net
6,477,363

6,473,559

Cash and equivalents
172,339

174,619

Restricted cash
143,237

149,300

Accounts receivable, net
210,215

208,563

Notes receivable
418,230

383,163

Investments in and advances to unconsolidated entities
543,167

564,779

Lease procurement costs, net
62,627

66,065

Prepaid expenses and other deferred costs, net
76,036

73,987

Intangible assets, net
118,095

134,562

Total Assets
$
8,221,309

$
8,228,597


7


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Consolidated Balance Sheets – (Unaudited)
 
June 30, 2017
December 31, 2016
 
(in thousands)
Liabilities and Equity
 
 
Liabilities
 
 
Nonrecourse mortgage debt and notes payable, net
 
 
Completed rental properties
 
 
Office
$
1,092,909

$
1,152,425

Apartments
1,401,624

1,396,088

Retail
139,124

141,160

Total Operations
2,633,657

2,689,673

Recently-Opened Properties/Redevelopment
353,690

292,083

Total completed rental properties
2,987,347

2,981,756

Projects under construction
 
 
Office
57,379

37,660

Apartments
82,938

69,996

Retail
—

—

Total projects under construction
140,317

107,656

Projects under development
 
 
Operating properties
—

—

Office
—

—

Apartments
30,616

31,421

Retail
—

—

Total projects under development
30,616

31,421

Total projects under construction and development
170,933

139,077

Land inventory
—

—

Nonrecourse mortgage debt and notes payable, net
3,158,280

3,120,833

Revolving credit facility
—

—

Term loan, net
333,468

333,268

Convertible senior debt, net
112,410

112,181

Construction payables
105,354

137,738

Operating accounts payable and accrued expenses
531,730

562,784

Accrued derivative liability
19,721

26,202

Total Accounts payable, accrued expenses and other liabilities
656,805

726,724

Cash distributions and losses in excess of investments in unconsolidated entities
123,807

150,592

Total Liabilities
4,384,770

4,443,598

Equity
 
 
Stockholders’ Equity
 
 
Stockholders’ equity before accumulated other comprehensive loss
3,368,054

3,298,248

Accumulated other comprehensive loss
(11,867
)
(14,410
)
Total Stockholders’ Equity
3,356,187

3,283,838

Noncontrolling interest
480,352

501,161

Total Equity
3,836,539

3,784,999

Total Liabilities and Equity
$
8,221,309

$
8,228,597







8


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Consolidated Statements of Operations – (Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Revenues
 
 
 
 
 
Rental
$
165,964

$
162,546

 
$
328,413

$
325,729

Tenant recoveries
28,132

28,644

 
54,064

60,234

Service and management fees
11,363

12,511

 
21,490

21,193

Parking and other
13,221

14,041

 
24,959

29,398

Arena
—

—

 
—

—

Land sales
17,762

8,221

 
23,522

12,154

Subsidized Senior Housing
—

—

 
—

—

Military Housing
—

—

 
—

3,518

Total revenues
236,442

225,963

 
452,448

452,226

Expenses
 
 
 
 
 
Property operating and management
78,158

81,435

 
156,951

171,355

Real estate taxes
21,357

21,600

 
42,557

46,066

Ground rent
3,766

3,447

 
7,654

7,086

Arena operating
—

—

 
—

—

Cost of land sales
7,694

1,702

 
9,695

2,042

Subsidized Senior Housing operating
—

—

 
—

—

Military Housing operating
—

—

 
—

2,730

Corporate general and administrative
14,018

16,750

 
29,601

33,862

Organizational transformation and termination benefits
6,863

5,681

 
11,388

14,401

 
131,856

130,615

 
257,846

277,542

Depreciation and amortization
65,747

62,418

 
129,302

125,629

Write-offs of abandoned development projects and demolition costs
1,596

—

 
1,596

—

Impairment of real estate
—

2,100

 
—

14,564

Total expenses
199,199

195,133

 
388,744

417,735

Operating Income
37,243

30,830

 
63,704

34,491

Interest and other income
9,896

11,031

 
20,168

20,685

Net gain on disposition of interest in unconsolidated entities
—

—

 
—

—

Interest expense
(28,901
)
(32,435
)
 
(56,876
)
(67,070
)
Amortization of mortgage procurement costs
(1,507
)
(1,416
)
 
(2,729
)
(3,081
)
Loss on extinguishment of debt
—

—

 
(2,843
)
(29,084
)
Earnings (loss) before income taxes and earnings from unconsolidated entities
16,731

8,010

 
21,424

(44,059
)
Equity in earnings
6,261

8,551

 
15,539

19,087

Net gain on disposition of interest in unconsolidated entities
35,253

12,613

 
52,954

12,613


41,514

21,164

 
68,493

31,700

Earnings (loss) before income taxes
58,245

29,174

 
89,917

(12,359
)
Income tax expense (benefit) of taxable REIT subsidiaries
 
 
 
 
 
Current
4,462

327

 
4,513

1,249

Deferred
—

(135
)
 
—

393

 
4,462

192

 
4,513

1,642

Earnings (loss) before gain on disposal of real estate
53,783

28,982

 
85,404

(14,001
)
Net gain (loss) on disposition of interest in development project
—

—

 
(113
)
136,117

Net gain (loss) on disposition of full or partial interests in rental properties, net of tax
4,526

(623
)
 
13,829

89,018

Earnings from continuing operations
58,309

28,359

 
99,120

211,134

Discontinued operations, net of tax
 
 
 
 
 
Operating loss from rental properties
—

—

 
—

(1,126
)
Gain on disposition of disposal group
—

—

 
—

64,553

Equity in earnings (loss)
—

—

 
—

(822
)
 
—

—

 
—

62,605

Net earnings
58,309

28,359

 
99,120

273,739

Noncontrolling interests, gross of tax
 
 
 
 
 
Earnings from continuing operations attributable to noncontrolling interests
(1,556
)
(1,760
)
 
(1,450
)
(3,881
)
Loss from discontinued operations attributable to noncontrolling interests
—

—

 
—

776

 
(1,556
)
(1,760
)
 
(1,450
)
(3,105
)
Net earnings attributable to Forest City Realty Trust, Inc.
$
56,753

$
26,599

 
$
97,670

$
270,634


9
























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10


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Net Asset Value Components – June 30, 2017
Completed Rental Properties - Operations
 
Q2 2017
 
Net Stabilized
 
Stabilized
 
Annualized
 
Nonrecourse
(Dollars in millions)
NOI (1)
 
Adjustments (2)
 
NOI
 
Stabilized NOI (3)
 
Debt, net (4)
Operations
A
 
B
 
=A+B
 

 
 
Office Real Estate
 
 


 
 
 


 
 
Life Science
 
 


 
 
 
 
 
 
Cambridge
$
21.9

 
$
(1.7
)
 
$
20.2

 
$
80.8

 
$
(505.1
)
Other Life Science
3.7

 
(0.1
)
 
3.6

 
14.4

 
(101.4
)
New York
 
 


 
 
 
 
 
 
Manhattan
14.6

 
(0.7
)
 
13.9

 
55.6

 
—

Brooklyn
24.7

 
—

 
24.7

 
98.8

 
(408.0
)
Other Office
7.2

—

—

 
7.2

 
28.8

 
(217.1
)
Subtotal Office
$
72.1

 
$
(2.5
)
 
$
69.6

 
$
278.4

 
$
(1,231.6
)
Apartment Real Estate
 
 


 
 
 
 
 
 
Apartments, Core Markets
$
35.7

—

$
—

 
$
35.7

 
$
142.8

 
$
(1,376.1
)
Apartments, Non-Core Markets
11.9

 
—

 
11.9

 
47.6

 
(327.9
)
Subtotal Apartment Product Type
$
47.6

 
$
—

 
$
47.6

 
$
190.4

 
$
(1,704.0
)
Federally Assisted Housing (5)
4.0

 
(2.3
)
 
1.7

 
6.8

 
(67.3
)
Subtotal Apartments
$
51.6

 
$
(2.3
)
 
$
49.3

 
$
197.2

 
$
(1,771.3
)
Retail Real Estate
 
 

 
 
 
 
 
 
Regional Malls
$
26.3

 
$
(2.1
)
 
$
24.2

 
$
96.8

 
$
(930.5
)
Specialty Retail Centers
12.7

—

0.1

 
12.8

 
51.2

 
(472.2
)
Subtotal Retail
$
39.0

 
$
(2.0
)
 
$
37.0

 
$
148.0

 
$
(1,402.7
)
Subtotal
$
162.7

 
$
(6.8
)
 
$
155.9

 
$
623.6

 
$
(4,405.6
)
Straight-line rent adjustments
3.8

 
—

 
3.8

 
15.2

 
—

Other Operations
(1.5
)
 
—

 
(1.5
)
 
(6.0
)
 
—

Total Operations
$
165.0

 
$
(6.8
)
 
$
158.2

 
$
632.8

 
$
(4,405.6
)
 
Development
 
 
 
 
 
 
 
 
 
Recently-Opened Properties/Redevelopment
$
0.7

 
$
5.7

 
$
6.4

 
$
25.6

 
$
(129.8
)
Straight-line rent adjustments
0.1

 
—

 
0.1

 
0.4

 
—

Other Development
(7.1
)
—

—

 
(7.1
)
 
(28.4
)
 
—

Total Development
$
(6.3
)
 
$
5.7

 
$
(0.6
)
 
$
(2.4
)
 
$
(129.8
)
 
 
 
 
 
 
 
Book Value (4)
 
 
Projects under construction (6)
 
$
519.8

 
$
(211.7
)
Projects under development
 
$
283.5

 
$
(187.4
)
Land inventory:
 
 
 
 
Stapleton
 
$
49.6

 
$
—

Commercial Outlots
 
$
19.7

 
$
—

Other Tangible Assets
Cash and equivalents
 
$
223.1

 
 
Restricted cash
 
$
227.0

 
 
Accounts receivable, net (7) 
 
$
257.1

 
 
Notes receivable
 
$
446.2

 
 
Net investments and advances to unconsolidated entities
 
$
41.7

 
 
Prepaid expenses and other deferred costs, net
 
$
87.9

 
 
Recourse Debt and Other Liabilities
Revolving credit facility
 
$
—

 
 
Term loan, net
 
$
(333.5
)
 
 
Convertible senior debt, net
 
$
(112.4
)
 
 
Less: convertible debt
 
$
112.4

 
 
Construction payables
 
$
(110.1
)
 
 
Operating accounts payable and accrued expenses (8) 
 
$
(657.9
)
 
 
Share Data (in millions)
Diluted weighted average number of shares for the three months ended June 30, 2017
 
268.8

 
 

11


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Net Asset Value Components – June 30, 2017 (continued)
(1)
Q2 2017 Earnings Before Income Taxes is reconciled to NOI for the three months ended June 30, 2017 in the Supplemental Operating Information section of this supplemental package.
(2)
The net stabilized adjustments column represents adjustments assumed to arrive at an estimated annualized stabilized NOI. We include stabilization adjustments to the Q2 2017 NOI as follows:
a)
We have removed Q2 2017 lease termination income from our Cambridge Life Science and Manhattan office portfolios.
b)
Due to quarterly fluctuations of NOI as a result of distribution restrictions from our limited-distribution federally assisted housing properties, we have included a stabilization adjustment to the Q2 2017 NOI to arrive at our estimate of stabilized NOI. Our estimate of stabilized NOI is based on the 2016 annual NOI of $6.8 million, which excludes NOI related to 22 properties in this portfolio sold during the six months ended June 30, 2017.
c)
Partial period NOI for recently sold properties has been removed in the Operations Segments.
d)
Due to the planned transfer of Boulevard Mall (Regional Malls) to the lender in a deed-in-lieu transaction during 2017, we have removed NOI and nonrecourse debt, net, related to this property.
e)
For recently-opened properties currently in initial lease-up periods included in the Development Segment, NOI is reflected at 5% of the company ownership cost. This assumption does not reflect our anticipated NOI, but rather is used in order to establish a hypothetical basis for an estimated valuation of leased-up properties. The following properties are currently in their initial lease-up periods:
        
 
Cost at 100%
Cost at Company Share
Lease Commitment % as of
Property
July 23, 2017
 
(in millions)
 
Office:
 
 
 
1812 Ashland Ave (Life Science)
$
61.2

$
61.2

75%
Total Office
$
61.2

$
61.2

 
Apartments:
 
 
 
535 Carlton (Core Market)
$
168.1

$
41.7

36%
Eliot on 4th (Core Market)
$
143.7

$
44.2

39%
NorthxNorthwest (Core Market)
$
115.0

$
33.5

24%
461 Dean Street (Core Market)
$
195.6

$
195.6

77%
The Bixby (Core Market)
$
59.2

$
11.8

99%
Blossom Plaza (Core Market)
$
100.6

$
29.9

95%
The Yards - Arris (Core Market)
$
143.2

$
42.9

94%
Total Apartments
$
925.4

$
399.6

 
Grand Total
$
986.6

$
460.8

 
NOI attributable to Kapolei Lofts, an apartment community on land in which we lease, is not included in NOI from lease-up properties. We consolidate the land lessor, who is entitled to a preferred return that currently exceeds anticipated operating cash flow of the project, and therefore, this project is reflected at 0% for company-share purposes.  In accordance with the waterfall provisions of the distribution Agreement, we expect to share in the net proceeds upon a sale of the project, which is not currently reflected on the NAV component schedule.
f)
Due to the redevelopment of Ballston Quarter (Development Segment; Recently-Opened Properties/Redevelopment), we have included a stabilization adjustment to the Q2 2017 NOI to arrive at $2.6 million, our estimate of annualized stabilized NOI prior to the commencement of our current redevelopment.
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)
Company ownership annualized stabilized NOI is calculated by taking the Q2 2017 stabilized NOI times a multiple of four.
(4)
Amounts represent the company’s share of each respective balance sheet line item as of June 30, 2017 and may be calculated using the financial information contained in the Appendix of this supplemental package. Due to the planned transfer of Boulevard Mall to the lender, we have removed nonrecourse debt, net, of $91.1 million related to this property.
(5)
Represents the remaining 25 federally assisted housing apartment communities. We recently signed a master purchase and sale agreement to dispose of this portfolio and expect to receive net proceeds of approximately $65 million. As of June 30, 2017, 22 properties have closed, representing $53.5 million in net proceeds.
(6)
We have removed $23.0 million of assets from projects under construction, which represents the costs on the balance sheet associated with the ongoing redevelopment of Ballston Quarter. NOI for this is stabilized under Recently-Opened Properties/Redevelopment.
(7)
Includes $149.9 million of straight-line rent receivable (net of $9.1 million of allowance for doubtful accounts).
(8)
Includes $62.2 million of straight-line rent payable.

12


Forest City Realty Trust, Inc. and Subsidiaries
Selected Financial Information

Net Asset Value Components - Stabilized NOI - Q1 2017 vs. Q2 2017
The following represents the quarterly change in stabilized NOI used to estimate NAV, as a result of recent property openings and sales, as well as other portfolio changes. GAAP reconciliations for the beginning period can be found in prior supplemental packages furnished with the SEC and are available on our website at www.forestcity.net.
 
 
 
 
 
 
 
 
 
 
Net Asset Value Components - Stabilized NOI
 
 
 
Stabilized Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1 2017
 
Property
 
Property
 
Portfolio
 
Q2 2017
(Dollars in millions)
Stabilized NOI
 
Openings
 
Sales
 
NOI Changes
 
Stabilized NOI
Operations
 
 
 
 
 
 
 
 
 
Office Real Estate
 
 
 
 
 
 
 
 
 
Life Science
 
 
 
 
 
 
 
 
 
Cambridge
$
20.1

 
$
—

 
$
—

 
$
0.1

 
$
20.2

Other Life Science
3.6

 
—

 
—

 
—

 
3.6

New York
 
 
 
 
 
 
 
 
 
Manhattan
14.1

 
—

 
—

 
(0.2
)
 
13.9

Brooklyn
23.4

 
—

 
—

 
1.3

 
24.7

Other Office
7.0

 
—

 
—

 
0.2

 
7.2

Subtotal Office
$
68.2

 
$
—

 
$
—

 
$
1.4

 
$
69.6

Apartment Real Estate
 
 
 
 
 
 
 
 
 
Apartments, Core Markets
$
34.4

 
$
—

 
$
—

 
$
1.3

 
$
35.7

Apartments, Non-Core Markets
11.0

 
—

 
—

 
0.9

 
11.9

Subtotal Apartment Product Type
$
45.4

 
$
—

 
$
—

 
$
2.2

 
$
47.6

Federally Assisted Housing (5)
3.9

 
—

 
(2.2
)
 
—

 
1.7

Subtotal Apartments
$
49.3

 
$
—

 
$
(2.2
)
 
$
2.2

 
$
49.3

Retail Real Estate
 
 
 
 
 
 
 
 
 
Regional Malls
$
25.7

 
$
—

 
$
—

 
$
(1.5
)
 
$
24.2

Specialty Retail Centers
12.3

 
—

 
0.1

 
0.4

 
12.8

Subtotal Retail
$
38.0

 
$
—

 
$
0.1

 
$
(1.1
)
 
$
37.0

Subtotal
$
155.5

 
$
—

 
$
(2.1
)
 
$
2.5

 
$
155.9

Straight-line rent adjustments
2.8

 
—

 
—

 
1.0

 
3.8

Other Operations
(0.4
)
 
—

 
—

 
(1.1
)
 
(1.5
)
Total Operations
$
157.9

 
$
—

 
$
(2.1
)
 
$
2.4

 
$
158.2

 
 
 
 
 
 
 
 
 
 
Development Pipeline
  
 
  
 
  
 
  
 
  
Development
 
 
 
 
 
 
 
 
 
Recently-Opened Properties/Redevelopment
$
6.3

 
$
—

 
$
—

 
$
0.1

 
$
6.4

Straight-line rent adjustments
0.1

 
—

 
—

 
—

 
0.1

Other Development
(6.9
)
 
—

 
—

 
(0.2
)
 
(7.1
)
Total Development
$
(0.5
)
 
$
—

 
$
—

 
$
(0.1
)
 
$
(0.6
)
Grand Total
$
157.4

 
$
—

 
$
(2.1
)
 
$
2.3

 
$
157.6









13
























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14


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Occupancy Data
Office and retail segment occupancy data 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 the lease by gross leasable area (“GLA”). Occupancy data includes leases with original terms of one year or less.
 
Leased Occupancy
 
As of June 30,
Office
2017
2016
Comparable
97.0%
97.8%
Total
94.5%
95.4%
Retail
 
 
Comparable
93.5%
94.2%
Total
93.4%
94.3%
Apartment segment occupancy data represents economic occupancy, which is calculated by dividing the period-to-date gross potential rent less vacancy by gross potential rent. Apartment occupancy data excludes limited-distribution subsidized senior housing units.
 
Economic Occupancy
 
Six Months Ended June 30,
Apartments
2017
2016
Comparable
94.1%
94.5%
Total
94.1%
94.5%
The graph below provides comparable leased and economic occupancy data as reported in previous quarters. Prior period amounts may differ from above since the properties qualifying as comparable change from period to period.
Comparable Occupancy Percentage Trend
fcrtex991_chart-39631a03.jpg

15


Forest City Realty Trust, 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

fcrtex991_chart-39652a03.jpg

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

(2)
The increase for the rolling 12-months ended March 31, 2017 over the prior periods is primarily due to the exclusion of sales data at Boulevard Mall, which is planned to transfer to the lender in a deed-in-lieu transaction during 2017. With the comparable exclusion of Boulevard Mall sales data, sales per square foot for the rolling 12-months ended June 30, 2016, September 30, 2016 and December 31, 2016 would have been $566, $561 and $567, respectively.









16


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Leasing Summary
Office Buildings
The following table represents 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
 
 
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
Q3 2016
9

79,348

$
28.02

$
26.52

5.7
 %
 
5

8,227

$
22.71

 
87,575

Q4 2016
12

88,740

$
20.36

$
21.46

(5.1
)%
 
3

3,549

$
25.27

 
92,289

Q1 2017
15

148,260

$
62.17

$
51.85

19.9
 %
 
5

13,128

$
25.04

 
161,388

Q2 2017
20

290,759

$
64.60

$
57.69

12.0
 %
 
5

27,326

$
42.07

 
318,085

Total
56

607,107

$
52.76

$
46.89

12.5
 %
 
18

52,230

$
33.60

 
659,337

 
 
 
 
 
 
 
 
 
 
 
 

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
Quarter
Number
of Leases
Signed
 
GLA
Signed
 
Contractual
Rent Per SF (1)
 
Expired Rent 
Per SF (1)
 
Cash Basis %
Change over
Prior Rent
 
Q3 2016
26

 
79,205

 
$
63.15

 
$
56.31

 
12.1
%
 
Q4 2016
14

 
53,130

 
$
153.75

 
$
137.47

 
11.8
%
 
Q1 2017
12

 
36,475

 
$
140.81

 
$
110.97

 
26.9
%
 
Q2 2017
22

 
70,685

 
$
69.77

 
$
58.09

 
20.1
%
 
Total
74

 
239,495

 
$
97.03

 
$
83.16

 
16.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Specialty Retail Centers
Quarter
Number
of Leases
Signed
 
GLA
Signed
 
Contractual
Rent Per SF (1)
 
Expired Rent 
Per SF (1)
 
Cash Basis %
Change over
Prior Rent
 
Q3 2016
2

 
5,131

 
$
82.06

 
$
78.17

 
5.0
 %
 
Q4 2016
—

 
—

 
$
—

 
$
—

 
0.0
 %
 
Q1 2017
—

 
—

 
$
—

 
$
—

 
0.0
 %
 
Q2 2017
1

 
7,463

 
$
45.00

 
$
58.52

 
(23.1
)%
 
Total
3

 
12,594

 
$
60.10

 
$
66.53

 
(9.7
)%
 
 
 
 
 
 
 
 
 
 
 
 

(1)
Office and Retail 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.







17


Forest City Realty Trust, 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 Apartment Rental Rates (2)
 
Economic Apartment Occupancy
Comparable Apartment
Leasable Units
 
Three Months Ended June 30,
 
 
Three Months Ended June 30,
 
Communities (1)
at Company % (3)
 
2017
2016
% Change
 
2017
2016
% Change
Core Markets
8,812

 
$
2,021

$
1,999

1.1
%
 
95.0
%
95.3
%
(0.3
)%
Non-Core Markets
7,954

 
$
999

$
979

2.0
%
 
93.5
%
93.4
%
0.1
%
Total Comparable Apartments
16,766

 
$
1,536

$
1,514

1.5
%
 
94.6
%
94.7
%
(0.1
)%
 
 
 
 
 
 
 
 
 
 

Year-to-Date Comparison
 
 
 
Monthly Average Apartment Rental Rates (2)
 
Economic Apartment Occupancy
Comparable Apartment
Leasable Units
 
Six Months Ended June 30,
 
 
Six Months Ended June 30,
 
Communities (1)
at Company % (3)
 
2017
2016
% Change
 
2017
2016
% Change
Core Markets
8,812

 
$
2,015

$
1,992

1.2
%
 
94.7
%
95.2
%
(0.5
)%
Non-Core Markets
7,954

 
$
997

$
976

2.2
%
 
92.6
%
92.7
%
(0.1
)%
Total Comparable Apartments
16,766

 
$
1,531

$
1,509

1.5
%
 
94.1
%
94.5
%
(0.4
)%
 
 
 
 
 
 
 
 
 
 

Sequential Comparison
 
 
 
Monthly Average Apartment Rental Rates (2)
 
Economic Apartment Occupancy
 
 
 
Three Months Ended
 
 
Three Months Ended
 
Comparable Apartment
Leasable Units
 
June 30,
March 31,
 
 
June 30,
March 31,
 
Communities (1)
at Company % (3)
 
2017
2017
% Change
 
2017
2017
% Change
Core Markets
8,812

 
$
2,021

$
2,008

0.6
%
 
95.0
%
94.4
%
0.6
%
Non-Core Markets
7,954

 
$
999

$
994

0.5
%
 
93.5
%
91.7
%
1.8
%
Total Comparable Apartments
16,766

 
$
1,536

$
1,526

0.7
%
 
94.6
%
93.6
%
1.0
%
 
 
 
 
 
 
 
 
 
 

(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 June 30, 2017, 15.1% of leasable units in core markets and 4.9% of leasable units in non-core markets were affordable housing units. Excludes limited-distribution federally assisted housing units.
(2)
Represents gross potential rent less concessions.
(3)
Leasable units represent our share of comparable leasable units at the apartment community.

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19


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Comparable NOI
 
Three Months Ended
 
Six Months Ended
 
June 30, 2017
 
June 30, 2017
Office
1.4
 %
 
0.5
 %
Apartments
2.3
 %
 
1.1
 %
Retail
(1.0
)%
 
(1.2
)%
Total
1.1
 %
 
0.3
 %
The tables below provide the percentage change of Comparable NOI as reported in previous quarters. GAAP reconciliations for previous periods can be found in prior supplemental packages furnished to the SEC and are available on our website at www.forestcity.net.
Quarterly Historical Trends
 
 
 
 
Three Months Ended
 
 
June 30, 2017
 
March 31, 2017
 
December 31, 2016
 
September 30, 2016
 
June 30, 2016
 
Office
1.4
 %
 
(1.4
)%
 
(0.4
)%
 
(0.4
)%
 
6.4
%
 
Apartments
2.3
 %
 
(0.3
)%
 
1.1
 %
 
1.8
 %
 
3.0
%
 
Retail
(1.0
)%
 
(1.2
)%
 
(2.9
)%
 
1.6
 %
 
2.7
%
 
Total
1.1
 %
 
(1.0
)%
 
(0.7
)%
 
0.8
 %
 
4.3
%
 
Annual Historical Trends
 
 
 
 
Years Ended
 
11 Months Ended
 
 
December 31, 2016
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
 
Office
3.6
%
 
4.9
%
 
6.6
%
 
(6.4
)%
 
Apartments
3.3
%
 
4.7
%
 
4.3
%
 
4.7
 %
 
Retail
2.6
%
 
5.1
%
 
2.6
%
 
3.6
 %
 
Total
3.2
%
 
4.9
%
 
4.8
%
 
(0.2
)%
 
The table below provides comparable NOI margins for our Operations segments. Properties included in prior periods may differ from the current year since properties qualifying as comparable change from period to period.
Year-to-Date and Annual Historical Trends - Margins on Comparable NOI
 
 
Six Months Ended
 
Years Ended
 
June 30, 2017
 
December 31, 2016
 
December 31, 2015
 
December 31, 2014
 
Office Segment
 
 
 
 
 
 
 
 
Life Science
68.5
%
 
60.1
%
 
58.7
%
 
58.5
%
 
New York
 
 
 
 
 
 
 
 
Manhattan
74.1
%
 
73.5
%
 
72.1
%
 
73.2
%
 
Brooklyn
53.1
%
 
53.0
%
 
51.4
%
 
50.5
%
 
Other Office
58.8
%
 
55.6
%
 
53.8
%
 
53.4
%
 
Total Office Segment
61.8
%
 
59.0
%
 
57.3
%
 
57.1
%
 
Apartment Segment
 
 
 
 
 
 
 
 
Core Markets
62.2
%
 
61.6
%
 
60.8
%
 
60.7
%
 
Non-Core Markets
50.0
%
 
48.9
%
 
46.3
%
 
47.0
%
 
Total Apartment Segment
58.6
%
 
57.8
%
 
56.7
%
 
56.7
%
 
Retail Segment
 
 
 
 
 
 
 
 
Regional Malls
59.4
%
 
60.2
%
 
58.5
%
 
61.1
%
 
Specialty Retail Centers
62.1
%
 
58.7
%
 
48.7
%
 
47.8
%
 
Total Retail Segment
60.3
%
 
59.7
%
 
55.0
%
 
55.6
%
 
Total
60.4
%
 
58.9
%
 
56.4
%
 
56.6
%
 


20


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


NOI (Non-GAAP) Detail (in thousands)
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
2017
2016
% Change
 
2017
2016
% Change
Office Segment
 
 
 
 
 
 
 
Comparable NOI
66,089

65,175

1.4
 %
 
130,903

130,226

0.5
 %
Non-Comparable NOI
6,043

5,015

 
 
11,175

9,903

 
Office Product Type NOI
72,132

70,190

 
 
142,078

140,129

 
Other NOI (1)
3,222

2,392

 
 
6,676

1,871

 
Total Office Segment
75,354

72,582

 
 
148,754

142,000

 
Apartment Segment
 
 
 
 
 
 
 
Comparable NOI
47,485

46,425

2.3
 %
 
92,853

91,867

1.1
 %
Non-Comparable NOI
87

(183
)
 
 
123

(1,311
)
 
Apartment Product Type NOI
47,572

46,242

 
 
92,976

90,556

 
Federally Assisted Housing
3,996

4,791

 
 
8,281

10,339

 
Other NOI (1)
(1,165
)
877

 
 
(1,897
)
(3,324
)
 
Total Apartment Segment
50,403

51,910

 
 
99,360

97,571

 
Retail Segment
 
 
 
 
 
 
 
Comparable NOI
36,577

36,930

(1.0
)%
 
74,347

75,237

(1.2
)%
Non-Comparable NOI
2,354

3,449

 
 
3,947

7,587

 
Retail Product Type NOI
38,931

40,379

 
 
78,294

82,824

 
Other NOI (1)
267

1,054

 
 
(71
)
2,064

 
Total Retail Segment
39,198

41,433

 
 
78,223

84,888

 
Operations
 
 
 
 
 
 
 
Comparable NOI
150,151

148,530

1.1
 %
 
298,103

297,330

0.3
 %
Non-Comparable NOI (2)
8,484

8,281

 
 
15,245

16,179

 
Product Type NOI
158,635

156,811

 
 
313,348

313,509

 
Federally Assisted Housing
3,996

4,791

 
 
8,281

10,339

 
Other NOI (1):
 
 
 
 
 
 
 
Straight-line rent adjustments
3,845

3,131

 
 
6,643

4,979

 
Other Operations
(1,521
)
1,192

 
 
(1,935
)
(4,368
)
 

2,324

4,323

 
 
4,708

611

 
Total Operations
164,955

165,925

 
 
326,337

324,459

 
Development Segment
 
 
 
 
 
 
 
Recently-Opened Properties/Redevelopment
744

625

 
 
(508
)
1,254

 
Other Development (3)
(6,982
)
(8,302
)
 
 
(13,859
)
(19,605
)
 
Total Development Segment
(6,238
)
(7,677
)
 
 
(14,367
)
(18,351
)
 
Other Segment
—

—

 
 
—

2,502

 
Grand Total
$
158,717

$
158,248

 
 
$
311,970

$
308,610

 

(1)
Includes straight-line rent adjustments, participation payments as a result of refinancing transactions on our properties and management and service company overhead, net of service fee revenues.
(2)
Non-comparable NOI includes lease termination income of $3,461 and $5,601 for the three and six months ended June 30, 2017, compared with $379 and $713 for the three and six months ended June 30, 2016.
(3)
Includes straight-line adjustments, non-capitalizable development overhead and other costs on our development projects.















21


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Summary of Corporate General and Administrative and Other NOI (in thousands)
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
2017
2016
Change
 
2017
2016
Change
Corporate General and Administrative
$
(14,018
)
$
(16,750
)
$
2,732

 
$
(29,601
)
$
(33,862
)
$
4,261

Other Operations NOI
(1,521
)
1,192

(2,713
)
 
(1,935
)
(4,368
)
2,433

Other Development NOI
(6,982
)
(8,302
)
1,320

 
(13,859
)
(19,605
)
5,746

Total
$
(22,521
)
$
(23,860
)
$
1,339

 
$
(45,395
)
$
(57,835
)
$
12,440


Year-to-Date and Annual Historical Trends
GAAP reconciliations for previous periods can be found in prior supplemental packages furnished to the SEC and are available on our website at www.forestcity.net.
 
Six Months Ended
 
Years Ended
 
June 30, 2017
 
December 31, 2016 (1)
December 31, 2015
 
(in thousands)
 
(in thousands)
Corporate General and Administrative
$
(29,601
)
 
$
(62,683
)
$
(51,974
)
Other Operations NOI
(1,935
)
 
(629
)
(18,051
)
Other Development NOI
(13,859
)
 
(28,676
)
(41,499
)
Total
$
(45,395
)
 
$
(91,988
)
$
(111,524
)

(1)
Includes development fee income of $6,500, primarily due to the achievement of certain milestones on the redevelopment project at Ballston Quarter. Exclusive of these development fees, total Corporate General and Administrative and Other NOI would have been $98,488 for the year ended December 31, 2016.







22


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


 
 
 
 
 
Comparable NOI Margin Bridges
To further explain our comparable NOI margins, we have included the following supplemental information relative to our Office and Apartment segment results for the six months ended June 30, 2017, which provides an additional operating metric which can be used to evaluate our NOI margins.

Office Segment
fcrtex991_chart-33319.jpg fcrtex991_chart-35149.jpg fcrtex991_chart-36668.jpg fcrtex991_chart-38008.jpg

* Due to the size and nature of this expense, we have made an adjustment to remove ground rent expense on our comparable office properties.

23


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Comparable NOI Margin Bridges (continued)

Apartment Segment
fcrtex991_chart-39464.jpg fcrtex991_chart-41002.jpg
fcrtex991_chart-42438.jpg

* The follow adjustments have been made exclude:
(1)
Comparable property-level service and management fee expense.
(2)
Operating expense allocations from the Corporate segment.


24


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Corporate General and Administrative Expenses
The following bridge illustrates Corporate Segment general and administrative expenses as a percentage of total revenues at the company’s share for the six months ended June 30, 2017.

fcrtex991_chart-33104.jpg

*
Adjustments include Apartment segment service and management fees of $5.4 million and corporate allocations of $1.6 million, respectively, which were removed from the Apartment segment comparable NOI margin bridges shown previously in this supplemental package. Additionally, $8.6 million of remaining unallocated Apartment segment service and management company expense (reflected in Apartment segment “other NOI” in the NOI Detail section of this supplemental package) is included in these adjustments.

**
Expected range with margin enhancements is 5.75% - 6.50% by year-end 2018.




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26


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


NOI by Product Type
(dollars in thousands)
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
producttypeq22017a03.jpg
NOI by Product Type in Operations
$
321,629

 
NOI by Product Type in Operations
$
323,848

Other NOI (2):
 
 
Other NOI (2):
 
Straight-line rent adjustments
6,643

 
Straight-line rent adjustments
4,979

Other Operations
(1,935
)
 
Other Operations
(4,368
)
 
4,708

 
 
611

Recently-Opened Properties/Redevelopment
(508
)
 
Recently-Opened Properties/Redevelopment
1,254

Development Segment (3)
(13,859
)
 
Development Segment (3)
(19,605
)
Other Segment
—

 
Other Segment
2,502

Grand Total NOI
$
311,970

 
Grand Total NOI
$
308,610


(1)
Includes limited-distribution federally assisted housing.
(2)
Includes straight-line rent adjustments, participation payments as a result of refinancing transactions on our properties and management and service company overhead, net of service fee revenues.
(3)
Includes straight-line adjustments, non-capitalizable development overhead and other costs on our development projects.

27


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


NOI by Core Market
(dollars in thousands)
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
coremarketq22017a01.jpg
NOI by Market in Operations
$
321,629

 
NOI by Market in Operations
$
323,848

Other NOI (3):
 
 
Other NOI (3):
 
Straight-line rent adjustments
6,643

 
Straight-line rent adjustments
4,979

Other Operations
(1,935
)
 
Other Operations
(4,368
)
 
4,708

 
 
611

Recently-Opened Properties/Redevelopment
(508
)
 
Recently-Opened Properties/Redevelopment
1,254

Development Segment (4)
(13,859
)
 
Development Segment (4)
(19,605
)
Other Segment
—

 
Other Segment
2,502

Grand Total NOI
$
311,970

 
Grand Total NOI
$
308,610

(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 straight-line rent adjustments, participation payments as a result of refinancing transactions on our properties and management and service company overhead, net of service fee revenues.
(4)
Includes straight-line adjustments, non-capitalizable development overhead and other costs on our development projects.

28


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Reconciliation of Earnings (Loss) Before Income Taxes (GAAP) to Net Operating Income (non-GAAP) (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
Earnings (loss) before income taxes (GAAP)
$
58,245

$
29,174

 
$
89,917

$
(12,359
)
Earnings from unconsolidated entities
(41,514
)
(21,164
)
 
(68,493
)
(31,700
)
Earnings (loss) before income taxes and earnings from unconsolidated entities
16,731

8,010

 
21,424

(44,059
)
Land sales
(17,762
)
(8,221
)
 
(23,522
)
(12,154
)
Cost of land sales
7,694

1,702

 
9,695

2,042

Other land development revenues
(1,862
)
(2,228
)
 
(2,967
)
(4,144
)
Other land development expenses
2,034

2,397

 
4,598

4,745

Corporate general and administrative expenses
14,018

16,750

 
29,601

33,862

Organizational transformation and termination benefits
6,863

5,681

 
11,388

14,401

Depreciation and amortization
65,747

62,418

 
129,302

125,629

Write-offs of abandoned development projects and demolition costs
1,596

—

 
1,596

—

Impairment of real estate
—

2,100

 
—

14,564

Interest and other income
(9,896
)
(11,031
)
 
(20,168
)
(20,685
)
Interest expense
28,901

32,435

 
56,876

67,070

Amortization of mortgage procurement costs
1,507

1,416

 
2,729

3,081

Loss on extinguishment of debt
—

—

 
2,843

29,084

NOI related to unconsolidated entities (1)
53,629

56,253

 
108,729

111,498

NOI related to noncontrolling interest (2)
(10,483
)
(9,434
)
 
(20,154
)
(17,522
)
NOI related to discontinued operations (3)
—

—

 
—

1,198

Net Operating Income (Non-GAAP)
$
158,717

$
158,248

 
$
311,970

$
308,610

 
 
 
 
 
 
(1) NOI related to unconsolidated entities:
 
 
 
 
 
Equity in earnings (GAAP)
$
6,261

$
8,551

 
$
15,539

$
19,087

Exclude non-NOI activity from unconsolidated entities:
 
 
 
 
 
Land and non-rental activity, net
(443
)
(1,730
)
 
(1,579
)
(2,671
)
Interest and other income
(451
)
(390
)
 
(1,976
)
(755
)
Write offs of abandoned development projects and demolition costs
396

—

 
747

—

Depreciation and amortization
23,938

23,469

 
47,027

45,143

Interest expense and extinguishment of debt
23,928

26,353

 
48,971

50,694

NOI related to unconsolidated entities
$
53,629

$
56,253

 
$
108,729

$
111,498

 
 
 
 
 
 
(2) NOI related to noncontrolling interest:
 
 
 
 
 
Earnings from continuing operations attributable to noncontrolling interests (GAAP)
$
(1,556
)
$
(1,760
)
 
$
(1,450
)
$
(3,881
)
Exclude non-NOI activity from noncontrolling interests:
 
 
 
 
 
Land and non-rental activity, net
1,132

713

 
1,378

1,062

Interest and other income
448

392

 
972

769

Depreciation and amortization
(7,194
)
(5,730
)
 
(14,177
)
(10,249
)
Interest expense and extinguishment of debt
(3,970
)
(3,049
)
 
(7,534
)
(5,038
)
Gain (loss) on disposition of full or partial interests in rental properties and interest in unconsolidated entities
657

—

 
657

(185
)
NOI related to noncontrolling interest
$
(10,483
)
$
(9,434
)
 
$
(20,154
)
$
(17,522
)
 
 
 
 
 
 
(3) NOI related to discontinued operations:
 
 
 
 
 
Operating loss from discontinued operations, net of tax (GAAP)
$
—

$
—

 
$
—

$
(1,126
)
Less loss from discontinued operations attributable to noncontrolling interests
—

—

 
—

776

Exclude non-NOI activity from discontinued operations (net of noncontrolling interest):
 
 
 
 
 
Depreciation and amortization
—

—

 
—

56

Interest expense
—

—

 
—

1,738

Income tax benefit
—

—

 
—

(246
)
NOI related to discontinued operations
$
—

$
—

 
$
—

$
1,198


29


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Net Earnings Attributable to Forest City Realty Trust, Inc.
Net earnings attributable to Forest City Realty Trust, Inc. for the three months ended June 30, 2017 was $56,753,000 versus net earnings of $26,599,000 for the three months ended June 30, 2016. The variance to the prior year period is primarily attributable to the following fluctuations, which are pre-tax, include unconsolidated investment activity and are net of noncontrolling interests:
Asset Dispositions - $24,691,000
•
$27,324,000 related to increased gains on disposition of full or partial interest in rental properties and unconsolidated investments in 2017 compared to 2016;
•
$(5,949,000) related to a combined fluctuation in revenues and operating expenses at properties in which we disposed of our full or partial interest during 2017 and 2016; and
•
$3,316,000 related to increased land sales in 2017 compared with 2016, primarily at our Stapleton project.
Financing Transactions - $6,880,000
•
$10,180,000 primarily related to a decrease in interest expense on nonrecourse mortgage debt due to the payoff of the $640,000,000 nonrecourse mortgage debt for the New York Times building in Q4 2016 partially offset by interest expense incurred on the Term Loan which we borrowed in full in November 2016 to payoff the mortgage debt on the New York Times;
•
$(5,101,000) related to an increase in interest expense in 2017 compared with 2016 due to decreased capitalized interest on projects under construction and development as we decreased our construction pipeline;
•
$954,000 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; and
•
$847,000 related to decreased losses on extinguishment of debt compared with 2016.
Operations - $6,960,000
•
$6,126,000 related to a combined fluctuation in revenues and operating expenses in our comparable portfolio in 2017 compared to 2016;
•
$2,016,000 related to a combined fluctuation in revenues and operating expenses for operations and development properties in lease-up or recently stabilized but not comparable and other non-comparable properties at June 30, 2017; and
•
$(1,182,000) related to higher organizational transformation and termination benefits in 2017 compared with 2016.
Non-Cash Transactions - $(2,439,000)
•
$(2,457,000) related to an increase in depreciation and amortization expense in 2017 compared with 2016 primarily attributable to new property openings in 2016 and 2017 offset by the sale of full or partial interest in rental properties in 2016;
•
$2,100,000 related to decreased impairment of real estate in 2017 compared to 2016; and
•
$(1,992,000) related to increased write-offs of abandoned development projects and demolition costs in 2017 compared with 2016.
Income Taxes
•
$(4,462,000) primarily due to increased state income tax expense related to gains on asset dispositions.

30


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information



Net earnings attributable to Forest City Realty Trust, Inc. for the six months ended June 30, 2017 was $97,670,000 versus net earnings of $270,634,000 for the six months ended June 30, 2016. The variance to the prior year period is primarily attributable to the following fluctuations, which are pre-tax, include unconsolidated investment activity and are net of noncontrolling interests:
Asset Dispositions - $(327,619,000)
•
$(181,677,000) related to decreased gains on disposition of full or partial interest in rental properties and unconsolidated investments in 2017 compared to 2016;
•
$(136,687,000) related to the net gain on disposition of the development site 625 Fulton Avenue in 2016;
•
$(12,843,000) related to a combined fluctuation in revenues and operating expenses at properties in which we disposed of our full or partial interest during 2017 and 2016; and
•
$3,588,000 related to increased land sales in 2017 compared with 2016, primarily at our Stapleton project.
Financing Transactions - $42,392,000
•
$25,465,000 related to decreased losses on extinguishment of debt compared with 2016 primarily due to separate, privately negotiated exchange transactions involving a portion of our Senior Notes due 2016, 2018 and 2020 in 2016;
•
$24,471,000 primarily related to decreases in interest expense on nonrecourse mortgage debt due to the payoff of the $640,000,000 nonrecourse mortgage debt for the New York Times building in Q4 2016 and on corporate debt due to separate, privately negotiated exchange transactions involving certain of our Senior Notes due 2016, 2018 and 2020 in 2016. The decreases were offset by interest expense incurred on the Term Loan which we borrowed in full in November 2016 to payoff the mortgage debt on the New York Times;
•
$(11,600,000) related to an increase in interest expense in 2017 compared with 2016 due to decreased capitalized interest on projects under construction and development as we decreased our construction pipeline; and
•
$4,056,000 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.
Operations - $22,842,000
•
$10,806,000 primarily related to lower corporate general and administrative expenses and decreased costs in our operations and development management and service entities;
•
$7,573,000 related to a combined fluctuation in revenues and operating expenses in our comparable portfolio in 2017 compared to 2016;
•
$3,013,000 related to lower organizational transformation and termination benefits in 2017 compared with 2016; and
•
$1,450,000 related to a combined fluctuation in revenues and operating expenses for operations and development properties in lease-up or recently stabilized but not comparable and other non-comparable properties at June 30, 2017.
Non-Cash Transactions - $10,304,000
•
$14,564,000 related to decreased impairment of real estate in 2017 compared to 2016;
•
$(2,343,000) related to increased write-offs of abandoned development projects and demolition costs in 2017 compared with 2016; and
•
$(1,917,000) related to to an increase in depreciation and amortization expense in 2017 compared with 2016 primarily attributable to new property openings in 2016 and 2017 offset by the sale of full or partial interest in rental properties in 2016.
Income Taxes
•
$78,309,000 due to decreased income tax expense primarily due to gains on sale of assets owned by our TRS in 2016. The tax expense in 2016 is primarily non-cash as it largely relates to the utilization of the deferred tax asset to offset the taxable gain on the various sales.


31


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


The interest expense and capital expenditure information shown below is for all of our consolidated investments. See the appendix for further information on noncontrolling interest share of these items plus our share of our unconsolidated investments’ interest expense and capital expenditures.
Interest Expense – The following table summarizes interest incurred, capitalized and paid on all forms of debt.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Amortization and mark-to-market adjustments of derivative instruments
$
203

$
1,135

 
$
(827
)
$
3,201

Interest incurred
35,195

41,326

 
68,951

85,164

Interest capitalized
(6,497
)
(10,026
)
 
(11,248
)
(21,295
)
Net interest expense
$
28,901

$
32,435

 
$
56,876

$
67,070


Capital Expenditures for our Operating Portfolio – Our diversified real estate portfolio requires capital expenditures, including tenant improvements, to maintain and improve its operating performance. The following table represents our capital expenditures by segment:
 
Six Months Ended June 30,
 
2017
2016
 
(in thousands)
Operating properties:
 
 
Office Segment
$
9,555

$
3,609

Apartment Segment
10,106

5,700

Retail Segment
392

2,743

Total operating properties
20,053

12,052

Corporate Segment
364

—

Tenant improvements:
 
 
Office Segment
17,746

10,417

Retail Segment
1,769

1,698

Total capital expenditures
$
39,932

$
24,167









32


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Reconciliation of Net Earnings to FFO
The table below reconciles net earnings, the most comparable GAAP measure, to FFO, a non-GAAP measure.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Net earnings attributable to Forest City Realty Trust, Inc. (GAAP)
$
56,753

$
26,599

 
$
97,670

$
270,634

Depreciation and Amortization—real estate (1)
81,400

78,788

 
159,749

157,650

Gain on disposition of full or partial interests in rental properties
(39,314
)
(11,990
)
 
(66,318
)
(111,748
)
Impairment of depreciable rental properties
—

2,100

 
—

14,564

Income tax expense adjustment — current and deferred (2):
 

 
 
 
Gain on disposition of full or partial interests in rental properties
4,642

236

 
4,642

55,272

FFO attributable to Forest City Realty Trust, Inc. (Non-GAAP)
$
103,481

$
95,733

 
$
195,743

$
386,372

FFO Per Share - Diluted
 
 
 
 
 
Numerator (in thousands):
 
 
 
 
 
FFO attributable to Forest City Realty Trust, Inc.
$
103,481

$
95,733

 
$
195,743

$
386,372

If-Converted Method (adjustments for interest):
 
 
 
 
 
4.250% Notes due 2018
778

778

 
1,556

2,250

3.625% Notes due 2020
362

362

 
725

1,280

FFO for per share data
$
104,621

$
96,873

 
$
198,024

$
389,902

Denominator:
 
 
 
 
 
Weighted average shares outstanding—Basic
260,569,749

258,645,220

 
259,688,409

258,298,148

Effect of stock options, restricted stock and performance shares
1,319,110

995,175

 
1,320,011

1,239,960

Effect of convertible debt
5,153,256

5,031,753

 
5,153,256

7,804,478

Effect of convertible 2006 Class A Common Units
1,797,909

1,940,788

 
1,853,955

1,940,788

Weighted average shares outstanding - Diluted
268,840,024

266,612,936

 
268,015,631

269,283,374

FFO Per Share - Diluted
$
0.39

$
0.36

 
$
0.74

$
1.45

(1)
The following table provides detail of depreciation and amortization:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Full Consolidation
$
65,747

$
62,418

 
$
129,302

$
125,629

Non-Real Estate
(689
)
(754
)
 
(1,391
)
(1,573
)
Real Estate Full Consolidation
65,058

61,664

 
127,911

124,056

Real Estate related to noncontrolling interest
(6,853
)
(5,463
)
 
(13,549
)
(9,790
)
Real Estate Unconsolidated
23,195

22,587

 
45,387

43,349

Real Estate Discontinued Operations
—

—

 
—

35

Real Estate at Company share
$
81,400

$
78,788

 
$
159,749

$
157,650

(2)
The following table provides detail of income tax expense (benefit):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Income tax expense on FFO
 
 
 
 
 
Operating Earnings:
 
 
 
 
 
Current taxes
$
12

$
91

 
$
63

$
3,720

Deferred taxes
—

(135
)
 
—

24,022

Total income tax expense on FFO
12

(44
)
 
63

27,742

Income tax expense (benefit) on non-FFO
 
 
 
 
 
Disposition of full or partial interests in rental properties:
 
 
 
 
 
Current taxes
$
4,642

$
236

 
$
4,642

$
(4,351
)
Deferred taxes
—

—

 
—

59,623

Total income tax expense on non-FFO
4,642

236

 
4,642

55,272

Grand Total
$
4,654

$
192

 
$
4,705

$
83,014



33


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information



Reconciliation of FFO to Operating FFO

Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
2017
2016
% Change
 
2017
2016
% Change
 
(in thousands)
 
 
(in thousands)
 
FFO attributable to Forest City Realty Trust, Inc.
$
103,481

$
95,733

 
 
$
195,743

$
386,372

 
Write-offs of abandoned development projects and demolition costs
1,992

—

 
 
2,343

—

 
Tax credit income
(2,521
)
(2,936
)
 
 
(5,212
)
(5,944
)
 
Loss on extinguishment of debt
2

849

 
 
4,468

29,933

 
Change in fair market value of nondesignated hedges
(301
)
590

 
 
(1,803
)
1,986

 
Net gain on disposition of interest in development project
—

—

 
 
—

(136,687
)
 
Net gain on disposition of partial interest in other investment - Nets
—

—

 
 
—

(136,247
)
 
Straight-line rent adjustments
(3,993
)
(3,350
)
 
 
(6,935
)
(5,211
)
 
Organizational transformation and termination benefits
6,863

5,681

 
 
11,388

14,401

 
Nets pre-tax FFO
—

—

 
 
—

1,400

 
Income tax expense (benefit) on FFO
12

(44
)
 
 
63

27,742

 
Operating FFO attributable to Forest City Realty Trust, Inc.
$
105,535

$
96,523

9.3%
 
$
200,055

$
177,745

12.6%
If-Converted Method (adjustments for interest) (in thousands):
 
 
 
 
 
 
 
4.250% Notes due 2018
778

778

 
 
1,556

2,250

 
3.625% Notes due 2020
362

362

 
 
725

1,280

 
Operating FFO attributable to Forest City Realty Trust, Inc. (If-Converted)
$
106,675

$
97,663

 
 
$
202,336

$
181,275

 
Weighted average shares outstanding - Diluted
268,840,024

266,612,936

 
 
268,015,631

269,283,374

 
Operating FFO per share - Diluted
$
0.40

$
0.37

8.1%
 
$
0.75

$
0.67

11.9%

Reconciliation of NOI to Operating FFO
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
NOI attributable to Forest City Realty Trust, Inc.
$
158,717

$
158,248

 
$
311,970

$
308,610

Land sales
38,101

8,050

 
46,183

12,258

Other land development revenues
1,676

2,021

 
3,065

3,794

Cost of land sales
(28,677
)
(1,942
)
 
(32,587
)
(2,250
)
Other land development expenses
(1,893
)
(2,207
)
 
(4,264
)
(4,622
)
Corporate general and administrative expenses
(14,018
)
(16,750
)
 
(29,601
)
(33,862
)
Interest and other income
9,899

11,029

 
21,172

20,671

Interest expense
(48,857
)
(54,890
)
 
(96,688
)
(113,615
)
Amortization of mortgage procurement costs
(1,909
)
(2,031
)
 
(3,741
)
(4,437
)
Non-real estate depreciation and amortization
(689
)
(754
)
 
(1,391
)
(1,573
)
Tax credit income
(2,521
)
(2,936
)
 
(5,212
)
(5,944
)
Change in fair market value of nondesignated hedges
(301
)
590

 
(1,803
)
1,986

Straight-line rent adjustments
(3,993
)
(3,350
)
 
(6,935
)
(5,211
)
Other
—

1,445

 
(113
)
1,940

Operating FFO attributable to Forest City Realty Trust, Inc.
$
105,535

$
96,523

 
$
200,055

$
177,745




34
Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Reconciliation of Net Earnings (GAAP) to EBITDA (non-GAAP)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Net earnings attributable to Forest City Realty Trust, Inc. (GAAP)
$
56,753

$
26,599

 
$
97,670

$
270,634

Depreciation and amortization
82,089

79,542

 
161,140

159,223

Interest expense (1)
48,857

54,890

 
96,688

113,615

Amortization of mortgage procurement costs
1,909

2,031

 
3,741

4,437

Income tax expense
4,654

192

 
4,705

83,014

EBITDA attributable to Forest City Realty Trust, Inc. (Non-GAAP)
$
194,262

$
163,254

 
$
363,944

$
630,923

Impairment of real estate
—

2,100

 
—

14,564

Net loss on extinguishment of debt
2

849

 
4,468

29,933

Net gain on disposition of interest in development project
—

—

 
—

(136,687
)
Net gain on disposition of partial interest in other investment - Nets
—

—

 
—

(136,247
)
Net gain on disposition of full or partial interests in rental properties
(39,314
)
(11,990
)
 
(66,318
)
(111,748
)
Nets pre-tax EBITDA
—

—

 
—

1,400

Organizational transformation and termination benefits
6,863

5,681

 
11,388

14,401

Adjusted EBITDA attributable to Forest City Realty Trust, Inc. (Non-GAAP)
$
161,813

$
159,894

 
$
313,482

$
306,539

 
 
 
 
 
 
 
As of June 30,
 
As of June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Nonrecourse mortgage debt and notes payable, net, at company share
$
5,025,661

$
5,664,408

 
$
5,025,661

$
5,664,408

Revolving credit facility
—

—

 
—

—

Term loan, net
333,468

—

 
333,468

—

Convertible senior debt, net
112,410

111,952

 
112,410

111,952

Total debt
$
5,471,539

$
5,776,360

 
$
5,471,539

$
5,776,360

Less cash and equivalents
(223,141
)
(461,369
)
 
(223,141
)
(461,369
)
Net Debt
$
5,248,398

$
5,314,991

 
$
5,248,398

$
5,314,991

Net Debt to Adjusted EBITDA (Annualized)
8.1
x
8.3
x
 
8.4
x
8.7
x
 
 
 
 
 
 
(1)
The following table provides detail of interest expense:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
2016
 
2017
2016
 
(in thousands)
Full consolidation
$
28,901

$
32,435

 
$
56,876

$
67,070

Noncontrolling interest
(3,970
)
(3,049
)
 
(7,534
)
(5,038
)
Unconsolidated entities at Company share
23,926

25,504

 
47,346

49,845

Discontinued operations at Company share
—

—

 
—

1,738

Company share
$
48,857

$
54,890

 
$
96,688

$
113,615



35






















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36
Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


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37


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


fcrtex991_chart-45838a03.jpg



38


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Historical Trends

Through the implementation of our strategic plan, we approach our business by:
•
Focus on the Core: Aligning our business initiatives with our core markets and products as we develop, own and operate a high-quality real estate portfolio;
•
Sustainable Capital Structure: Improving our metrics by delevering our balance sheet and activating our existing pipeline; and
•
Operational Excellence: Using the strength of the enterprise to maximize efficiency, effectiveness and customer satisfaction through continuous business process improvements.

The tables below illustrate our progress as we continue to implement our strategic plan. The financial and operating data presented is as reported in previous year-end supplemental packages. GAAP reconciliations for previous years can be found in prior supplemental packages furnished to the SEC and are available on our website at www.forestcity.net.

Development ratio is defined as total assets (less accumulated depreciation) divided by total projects under construction and development and land inventory. Total debt includes outstanding borrowings on our revolving credit facility, our term loan, net, convertible senior debt, net, nonrecourse mortgages and notes payable, net. All metrics are reflected at company share.

fcrtex991_chart-02941a01.jpg fcrtex991_chart-20626a02.jpg

*
Represents data for the full year ended December 31, 2013, which is consistent with our calendar year-end adopted in 2013. As such, data for the year ended December 31, 2013 includes results for the month ended January 31, 2013, which was previously included in the financial results for the year ended January 31, 2013 in our supplemental package furnished with the SEC on March 27, 2013.



39


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


fcrtex991_chart-41595a03.jpg fcrtex991_chart-43052a03.jpgfcrtex991_chart-28586a02.jpg fcrtex991_chart-09067a01.jpg

40


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Development Pipeline
Phased Openings and Projects Under Construction
June 30, 2017
 
 
 
 
 
 
 
Cost at Completion (b)
 
Cost Incurred to Date (c)
 
 
 
 
 
 
 
Anticipated
Legal
 
 
 
Cost at
 
 
Cost at
 
 
 
 
 
 
 
Opening
Ownership
Company
Cost
Company
 
Cost
Company
No. of
 
 
 
Lease %
 
Location
Date
(a)
% (a)
at 100%
Share
 
at 100%
Share
Units
 
GLA
 
(d)
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
2017 Phased Openings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apartments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Greenland Joint Venture (e):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
550 Vanderbilt (condominiums) (g)
Brooklyn, NY
Q1-17/Q3-17
30
%
(f)
30
%
 
$
362.7

$
116.4

 
$
325.1

$
106.7

278

 
7,000

 


Pacific Park - Parking (h)
Brooklyn, NY
Q1-17/Q3-17
30
%
(f)
30
%
 
46.2

4.1

 
36.3

1.2

—

 
—

 
 
Total Phased Openings
$
408.9

$
120.5

 
$
361.4

$
107.9

278

 
7,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Projects Under Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apartments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Arizona State Retirement System Joint Venture:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Axis
Los Angeles, CA
Q3-17/Q2-18
30
%
 
30
%
 
$
140.4

$
41.8

 
$
132.7

$
45.1

391

 
15,000

 
 
Ardan
Dallas, TX
Q1-18/Q2-18
30
%
 
30
%
 
122.1

36.2

 
60.1

20.8

389

 
4,250

 
 
 
 
 
 
 
 
 
$
262.5

$
78.0

 
$
192.8

$
65.9

780

 
19,250

 
 
Greenland Joint Venture (e):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38 Sixth Ave
Brooklyn, NY
Q3-17
30
%
(f)
30
%
 
202.7

50.1

 
153.9

40.1

303

 
28,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mint Town Center
Denver, CO
Q3-17/Q4-17
95
%
 
95
%
 
93.1

88.4

 
68.8

65.4

399

 
7,000

 
 
VYV
Jersey City, NJ
Q3-17/Q1-18
50
%
(f)
50
%
 
214.3

107.1

 
183.7

93.1

421

 
9,000

 
 
Ballston Quarter Residential
Arlington, VA
Q3-18/Q1-19
51
%
(f)
51
%
 
181.9

92.9

 
43.0

23.8

406

 
53,000

 
 
The Yards - The Guild
Washington, D.C.
Q4-18
0
%
(i)
0
%
 
91.1

0.0

 
25.8

0.0

191

 
6,000

 
 
Capper 769
Washington, D.C.
Q1-19
25
%
(f)
25
%
 
72.3

18.1

 
14.6

3.7

179

 
—

 
 
 
 
 
 
 
 
 
$
1,117.9

$
434.6

 
$
682.6

$
292.0

2,679

 
122,250

 
 
Retail:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Yards - District Winery
Washington, D.C.
Q4-17
100
%
 
100
%
 
$
10.6

$
10.6

 
$
9.1

$
9.1

—

 
16,150

 
100
%
Ballston Quarter Redevelopment
Arlington, VA
Q3-18
51
%
(f)
51
%
 
86.7

44.2

 
35.9

23.0

—

 
307,000

 
42
%
 
 
 
 
 
 
 
$
97.3

$
54.8

 
$
45.0

$
32.1

—

 
323,150

 
 
Total Projects Under Construction (j)
$
1,215.2

$
489.4

 
$
727.6

$
324.1



 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Initial Yield on Cost (k):



 
 
 
 
 
 
 
Apartments
5.6% - 6.1%

 
 
 
 
 
 
 
 
Retail
6.7% - 7.2%

 
 
 
 
 
 
 
 
Total Projects Under Construction
5.7% - 6.2%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See footnotes on the following page.




41


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Development Pipeline
Property Openings
June 30, 2017
 
 
 
 
 
 
 
Cost at Completion (b)
 
 
 
 
 
 
 
Date
Legal
 
Cost
Cost at
No. of
 
 
 
 
 
Location
Opened
Ownership (a)
Company % (a)
at 100%
Company Share
Units
 
GLA
 
Lease % (d)
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
2017 Property Openings
 
 
 
 
 
 
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
 
 
 
 
 
 
The Bridge at Cornell Tech
Roosevelt Island, NY
Q2-17
100
%
 
100
%
 
$
164.1

$
164.1

—

 
235,000

 
50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apartments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Greenland Joint Venture (e):
 
 
 
 
 
 
 
 
 
 
 
 
535 Carlton
Brooklyn, NY
Q1-17/Q2-17
30
%
(f)
30
%
 
$
168.1

$
41.7

298

 
—

 
36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
461 Dean Street
Brooklyn, NY
Q3-16/Q1-17
100
%
 
100
%
 
195.6

195.6

363

 
4,000

 
77
%
The Bixby
Washington, D.C.
Q3-16/Q2-17
25
%
(f)
25
%
 
59.2

11.8

195

 
—

 
99
%
Arizona State Retirement System Joint Venture:
 
 
 
 
 
 
 
 
 
 
 
 
Eliot on 4th (l)
Washington, D.C.
Q1-17/Q3-17
30
%
 
30
%
 
$
143.7

$
44.2

365

 
5,000

 
39
%
NorthxNorthwest
Philadelphia, PA
Q4-16/Q1-17
30
%
 
30
%
 
115.0

33.5

286

 
—

 
24
%
 
 
 
 
 
 
 
$
258.7

$
77.7

651

 
5,000

 
 
 
 
 
 
 
 
 
$
681.6

$
326.8

1,507

 
9,000

 
 
Total Property Openings
$
845.7

$
490.9

 
 
 
 
 
(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)
Represents estimated project costs to achieve stabilization, at 100% and the Company’s share, respectively. Amounts exclude capitalized interest not allocated to the underlying joint venture.
(c)
Represents total capitalized project costs incurred to date, at 100% and the Company’s share, respectively, including all capitalized interest related to the development project.
(d)
Lease commitments as of July 23, 2017.
(e)
During the year ended December 31, 2016, the Company recorded an impairment related to our equity method investment in the Greenland Joint Venture, of which was partially allocated to the assets listed above. Costs at completion and incurred to date amounts at company share have been adjusted by this impairment.
(f)
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 its investments in a VIE.
(g)
Costs Incurred to Date at 550 Vanderbilt represents total cumulative capitalized project costs incurred to date, gross of cost of goods sold related to applicable condominium units.
(h)
Expected to include 370 parking spaces.
(i)
Represents an apartment community under construction in which the Company has a 0% legal ownership interest. However, the Company is the project developer, on a fee basis. In addition, the Company has issued a project completion guarantee to the first mortgagee and is funding a portion of the construction costs through a mezzanine loan to the owner. As a result, the Company determined it was the primary beneficiary of this variable interest entity and has consolidated the project.
(j)
Of the remaining project costs, the Company has undrawn construction loan commitments of $251.1 million at the company’s share ($547.3 million at 100%).
(k)
Range of estimated initial yield on cost for projects under construction is calculated using estimated company-share initial stabilized NOI divided by the company’s share of project cost per above, net of anticipated subsidies and other cost adjustments.
(l)
As of June 30, 2017, construction on Eliot on 4th is complete. The property is open and has received partial tenant certificates of occupancy, 333 of 365, and is awaiting remaining tenant certificates of occupancy.


42


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Development Pipeline
Projects Under Development
June 30, 2017

Below is a summary of our active large scale development projects which are crucial to our long-term growth. While we cannot make any assurances on the timing or delivery of these projects, we believe 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 and other projects in core markets represent company ownership costs of $206.9 million ($157.9 million at full consolidation) of Projects Under Development on our balance sheet and company ownership mortgage debt, net of $165.8 million ($9.0 million at full consolidation).
1)
Pacific Park Brooklyn - 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, and more than 8 acres of landscaped open space. Included in the square feet of residential entitlements is 250,000 square feet of amenity retail that will reside in the base of the various buildings. The project is also currently entitled for approximately 1 million square feet of office space. 38 Sixth Ave, a 303-unit, 100% affordable rental building, is currently under construction. Current partially opened projects include 550 Vanderbilt, a 278-unit condominium building, and parking garages which are expected to include 370 parking spaces. 535 Carlton, a 100% affordable rental building with 298 apartment units, and 461 Dean Street, a 50% market-rate and 50% affordable rental building with 363 apartment units, are complete.
2)
The Yards - Washington, D.C.
The Yards is a fully entitled, 53-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 3,000 residential units, 1.8 million square feet of office space and approximately 400,000 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 715 apartment units and 178,000 square feet of retail. Currently under construction is the District Winery, a 16,150 square-foot retail building, which is 100% leased to a single tenant, and The Guild, a 191-unit apartment building.
3) Waterfront Station - Washington, D.C.
Located in Southwest Washington, D.C., Waterfront Station is adjacent to the Waterfront MetroRail station. At full build-out, Waterfront Station is expected to include 980 apartment units and approximately 50,000 square feet of retail stores and restaurants. Currently completed is a 365-unit apartment building, Eliot on 4th.
4) Pier 70 - San Francisco, CA
Pier 70 is a former shipyard on San Francisco’s eastern waterfront. Our master development area of 28 acres is a mixed-use project, which is expected to include 3.2 million total square feet, consisting of 900,000 to 1.8 million square feet of office space, approximately 360,000 square feet of traditional retail, local production, and cultural/community uses, 1,000 to 2,000 residential units, approximately 2,000 parking spaces and 7 acres of waterfront parks. The provided ranges for commercial and residential uses are the result of a flexible zoning approach taken with a select number of parcels, allowing either commercial or residential uses. Project entitlements are anticipated in Q4-2017 through the Port Commission, Planning Commission and Board of Supervisors.
5) 5M - San Francisco, CA
5M is a fully entitled, mixed-use project on approximately 4 acres in downtown San Francisco. 5M is expected to include approximately 800,000 square feet of commercial uses and 690 residential units. The project will retain three existing historic buildings, including the iconic San Francisco Chronicle building, and would create significant new open spaces for the neighborhood. The project is designed to house a dynamic ground-floor mix featuring local retail and arts, cultural and community uses for a total of approximately 1.7 million square feet of development.

6) Hudson Exchange - Jersey City, NJ
Hudson Exchange is a partnership with G&S Investors, the owner of an 18-acre parcel of land, three miles from downtown Manhattan in the waterfront section of Jersey City.  At full build-out, the project is expected to include up to 5,400 apartment units in twelve towers and 350,000 square feet of amenity retail and dining space. Currently under construction is VYV, a 421-unit apartment building.


43


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Operating Information


Development Pipeline
Summary of Development Projects
June 30, 2017

Below is a summary of our active large scale development projects in core markets, as well as other projects in core and non-core markets along with the approximate related developable square footage, by product type. These development opportunities are in a wide range of various stages, including but not limited to, being entitled for its intended development purposes and ready for construction to merely being controlled through a land option. The other product type includes condominiums and hotels. Amounts exclude any currently open or under construction projects within the larger overall development project and are shown at 100% and our estimated ownership share.

Developable Square Feet
Square Feet at 100%
 
Square Feet at Company Share
 
 
Office
Apartments
Retail
Other
Total
 
Office
Apartments
Retail
Other
Total
Projects under development balance
Development Projects - Core Markets
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Pacific Park Brooklyn - Brooklyn, NY
1,068,190

3,858,724

—

944,877

5,871,791

 
320,457

1,157,617

—

283,463

1,761,537

$
40,874

The Yards - Washington, D.C.
1,838,702

2,060,342

263,384

471,897

4,634,325

 
1,838,702

2,038,290

263,384

471,897

4,612,273

70,445

Waterfront Station - Washington, D.C.
—

634,441

57,949

—

692,390

 
—

285,498

26,078

—

311,576

10,355

Pier 70 - San Francisco, CA
1,200,936

865,412

363,104

772,250

3,201,702

 
1,200,936

865,412

363,104

772,250

3,201,702

36,176

5M - San Francisco, CA
801,327

260,203

36,478

552,252

1,650,260

 
133,020

43,194

6,055

91,674

273,943

30,811

Stapleton - Denver, CO
3,494,444

2,260,722

200,000

270,000

6,225,166

 
3,145,000

2,034,650

180,000

243,000

5,602,650

—

Hudson Exchange - Jersey City, NJ
—

5,952,232

350,000

—

6,302,232

 
—

2,976,120

175,000

—

3,151,120

12,475

Other
414,344

935,000

252,373

—

1,601,717

 
62,152

467,500

233,356

—

763,008

5,749

 
8,817,943

16,827,076

1,523,288

3,011,276

30,179,583

 
6,700,267

9,868,281

1,246,977

1,862,284

19,677,809

$
206,885

Development Projects - Non Core Markets
1,590,895

374,217

99,744

—

2,064,856

 
1,590,895

374,217

99,744

—

2,064,856

53,448

Projects under development - Operating Properties
—

—

—

—

—

 
—

—

—

—

—

23,121

Total
10,408,838

17,201,293

1,623,032

3,011,276

32,244,439

 
8,291,162

10,242,498

1,346,721

1,862,284

21,742,665

$
283,454

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:
Stapleton
Stapleton, a 90% owned entity, 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 June 30, 2017, we own 468 gross acres, of which 169 acres are saleable. We also have an option to purchase an additional 408 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.

44
























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45


Forest City Realty Trust, 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
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
Class A Common Stock
 
 
 
 
 
 
 
 
 
Closing Price, end of period
$
24.17

 
$
21.78

 
$
20.84

 
$
23.13

 
$
22.31

High Sales Price
$
24.73

 
$
23.42

 
$
23.08

 
$
24.22

 
$
23.56

Low Sales Price
$
21.59

 
$
20.25

 
$
17.79

 
$
22.24

 
$
20.50

Average Sales Price
$
23.04

 
$
22.11

 
$
20.29

 
$
23.35

 
$
21.77

Total Volume
91,271,300

 
114,635,533

 
114,234,232

 
74,328,684

 
60,999,364

Average Volume
1,448,751

 
1,848,960

 
1,813,242

 
1,161,386

 
953,115

Common shares outstanding, end of period
265,233,926

 
240,443,569

 
239,937,796

 
239,926,928

 
239,891,378

Class B Common Stock (1)
 
 
 
 
 
 
 
 
 
Closing Price, end of period
$
31.73

 
$
28.31

 
$
26.93

 
$
23.11

 
$
22.19

High Sales Price
$
31.97

 
$
30.32

 
$
28.41

 
$
24.84

 
$
23.20

Low Sales Price
$
27.82

 
$
26.25

 
$
18.00

 
$
22.29

 
$
20.60

Average Sales Price
$
29.38

 
$
28.63

 
$
22.21

 
$
23.47

 
$
21.80

Total Volume
57,800

 
85,539

 
211,574

 
73,494

 
61,451

Average Volume
1,180

 
1,380

 
3,358

 
1,148

 
960

Common shares outstanding, end of period
—

 
18,788,163

 
18,788,169

 
18,788,169

 
18,788,287

Common Equity Market Capitalization
$
6,410,703,991

 
$
5,768,753,827

 
$
5,506,269,060

 
$
5,983,704,430

 
$
5,768,888,732

Quarterly dividends declared and paid per Class A and Class B common share
$
0.09

 
$
0.09

 
$
0.06

 
$
0.06

 
$
0.06


(1)
Effective June 12, 2017, each share of Class B Common Stock outstanding was reclassified and exchanged into 1.31 shares of Class A common stock. As such, the Class B Common Stock data for the quarter ended June 30, 2017 relates to the period from April 1, 2017 to June 12, 2017.

Financial Covenants
Our revolving credit facility and term loan facility contain certain identical restrictive financial covenants. A summary of the key financial covenants as defined in the agreements, all of which we are compliant with at June 30, 2017, follows:

 
Requirement
Per  Agreements
 
As of
June 30, 2017
 
As of
March 31, 2017
 
As of
December 31, 2016
 
As of
September 30, 2016
Credit Facility Financial Covenants 
 
 
 
 
 
 
 
 
 
Maximum Total Leverage Ratio
≤65%
 
47.90
%
 
48.27
%
 
49.45
%
 
50.96
%
Maximum Secured Leverage Ratio
≤55%
 
44.28
%
 
44.54
%
 
45.49
%
 
51.08
%
Maximum Secured Recourse Leverage Ratio 
≤15%
 
0.00
%
 
0.00
%
 
0.00
%
 
0.00
%
Maximum Unsecured Leverage Ratio
≤60%
 
18.10
%
 
18.72
%
 
19.86
%
 
0.00
%
Minimum Fixed Charge Coverage Ratio
≥1.50x
 
2.06
x
 
2.00
x
 
1.95
x
 
1.74
x
Minimum Unencumbered Interest Coverage Ratio
≥1.50x
 
8.15
x
 
9.73
x
 
10.07
x
 
4.72
x







46


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial Information

Nonrecourse Debt Maturities Table (dollars in thousands)
As of June 30, 2017

 
Year Ending December 31, 2017
 
Year Ending December 31, 2018
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
Fixed:
 
 
 
 
 
 
 
 
 
Fixed-rate debt
$
170,387

$
10,219

$
89,825

$
249,993

 
$
208,235

$
7,777

$
247,785

$
448,243

Weighted average rate
6.04
%
6.47
%
5.20
%
5.72
%
 
4.52
%
3.58
%
4.96
%
4.78
%
Variable:
 
 
 
 
 
 
 
 
 
Variable-rate debt
36,779

4,467

1,158

33,470

 
176,560

111,540

227,795

292,815

Weighted average rate
3.84
%
3.84
%
3.79
%
3.84
%
 
3.62
%
3.42
%
5.13
%
4.87
%
 
 
 
 
 
 
 
 
 
 
Tax-Exempt
—

—

—

—

 
100,775

1,616

20,000

119,159

Weighted average rate
—

—

—

—

 
1.85
%
1.79
%
2.48
%
1.96
%
Total variable-rate debt
36,779

4,467

1,158

33,470

 
277,335

113,156

247,795

411,974

Total Nonrecourse Debt
$
207,166

$
14,686

$
90,983

$
283,463

 
$
485,570

$
120,933

$
495,580

$
860,217

Weighted Average Rate
5.65
%
5.67
%
5.19
%
5.50
%
 
3.64
%
3.40
%
4.94
%
4.42
%
 
 
 
 
 
 
 
 
 
 
 
Year Ending December 31, 2019
 
Year Ending December 31, 2020
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
Fixed:
 
 
 
 
 
 
 
 
 
Fixed-rate debt
$
107,423

$
4,362

$
32,932

$
135,993

 
$
160,563

$
22,629

$
150,759

$
288,693

Weighted average rate
4.06
%
4.25
%
5.29
%
4.35
%
 
5.03
%
4.36
%
4.81
%
4.97
%
Variable:
 
 
 
 
 
 
 
 
 
Variable-rate debt
353,095

131,422

99,042

320,715

 
58,567

—

1,121

59,688

Weighted average rate
2.99
%
2.86
%
4.32
%
3.46
%
 
3.58
%
—

2.92
%
3.57
%
 
 
 
 
 
 
 
 
 
 
Tax-Exempt
8,500

—

—

8,500

 
—

—

—

—

Weighted average rate    
3.90
%
—

—

3.90
%
 
—

—

—

—

Total variable-rate debt
361,595

131,422

99,042

329,215

 
58,567

—

1,121

59,688

Total Nonrecourse Debt
$
469,018

$
135,784

$
131,974

$
465,208

 
$
219,130

$
22,629

$
151,880

$
348,381

Weighted Average Rate
3.25
%
2.90
%
4.56
%
3.73
%
 
4.64
%
4.36
%
4.79
%
4.73
%

47


Forest City Realty Trust, Inc. and Subsidiaries
Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Debt (dollars in thousands) (continued)
As of June 30, 2017

 
Year Ending December 31, 2021
 
Thereafter
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
Fixed:
 
 
 
 
 
 
 
 
 
Fixed-rate debt
$
171,208

$
4,923

$
60,694

$
226,979

 
$
1,089,488

$
105,719

$
1,308,503

$
2,292,272

Weighted average rate
4.65
%
3.49
%
4.75
%
4.70
%
 
3.99
%
4.41
%
4.09
%
4.03
%
Variable:
 
 
 
 
 
 
 
 
 
Variable-rate debt
22,051

—

600

22,651

 
21,424

(1,974
)
700

24,098

Weighted average rate
4.66
%
—

2.02
%
4.59
%
 
3.42
%
—

2.02
%
3.38
%
 
 
 
 
 
 
 
 
 
 
Tax-Exempt
—

—

—

—

 
508,834

140,779

184,204

552,259

Weighted average rate
—

—

—

—

 
1.84
%
1.78
%
2.12
%
1.95
%
Total variable-rate debt
22,051

—

600

22,651

 
530,258

138,805

184,904

576,357

Total Nonrecourse Debt
$
193,259

$
4,923

$
61,294

$
249,630

 
$
1,619,746

$
244,524

$
1,493,407

$
2,868,629

Weighted Average Rate
4.65
%
3.49
%
4.72
%
4.69
%
 
3.31
%
2.92
%
3.85
%
3.62
%
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
Full
Consolidation
Noncontrolling
Interest
Company Share of Unconsolidated Entities
Company Share
 
 
 
 
 
Fixed:
 
 
 
 
 
 
 
 
 
Fixed-rate debt
$
1,907,304

$
155,629

$
1,890,498

$
3,642,173

 
 
 
 
 
Weighted average rate
4.38
%
4.46
%
4.36
%
4.37
%
 
 
 
 
 
Variable:
 
 
 
 
 
 
 
 
 
Variable-rate debt
668,476

245,455

330,416

753,437

 
 
 
 
 
Weighted average rate
3.32
%
3.13
%
4.86
%
4.06
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-Exempt
618,109

142,395

204,204

679,918

 
 
 
 
 
Weighted average rate    
1.87
%
1.78
%
2.16
%
1.97
%
 
 
 
 
 
Total variable-rate debt
1,286,585

387,850

534,620

1,433,355

 
 
 
 
 
Total Nonrecourse Debt
$
3,193,889

$
543,479

$
2,425,118

$
5,075,528

 
 
 
 
 
Net unamortized mortgage procurement costs
(35,609
)
(9,520
)
(23,778
)
$
(49,867
)
 
 
 
 
 
Total Nonrecourse Debt, net
$
3,158,280

$
533,959

$
2,401,340

$
5,025,661

 
 
 
 
 
Weighted Average Rate
3.68
%
3.16
%
4.24
%
4.00
%
 
 
 
 
 
 

48





Forest City Realty Trust, Inc. and Subsidiaries - Appendix
Second Quarter 2017
Index
General Information
Selected Financial Information
 
Asset, Liability and Equity Information
Revenue and Expense Information
Interest Expense Information
Capital Expenditures Information
Adjusted EBITDA and NOI by Segment - Fully Consolidated Entities, Noncontrolling Interest, Company Share of Unconsolidated Entities and Company Share of Discontinued Operations


49


Forest City Realty Trust, Inc. and Subsidiaries
Appendix - General Information


General Information

This appendix to this supplemental package contains certain financial information of entities accounted for using the full consolidated accounting method (“Fully Consolidated Entities”), financial information on our partners share of entities accounted for using the full consolidated accounting method (“Noncontrolling Interest”), financial information on our share of entities that we do not control and therefore account for using the equity method of accounting (“Company Share of Unconsolidated Entities”) and financial information on our share of entities qualifying for discontinued operations reporting (“Company Share of Discontinued Operations”).

Amounts in columns labeled “Fully Consolidated Entities” represent 100% of the activity related to all entities that are consolidated under GAAP. Amounts in the columns labeled “Company Share of Unconsolidated Entities” were derived on a property-by-property basis by applying to each financial statement line item the ownership percentage interest used to arrive at our share of net income during the period when applying the equity method of accounting. Similar calculations were performed for the amounts in the columns labeled “Noncontrolling Interest”, which represent assets we consolidate but own less than 100%, and amounts in the columns labeled “Company Share of Discontinued Operations”. A financial statement user is able to calculate Total Company Ownership by beginning with the “Fully Consolidated Entities” column, subtracting the column labeled “Noncontrolling Interest” and adding the columns labeled “Company Share of Unconsolidated Entities” and “Company Share of Discontinued Operations”.

We believe disclosing financial information on Fully Consolidated Entities, Noncontrolling Interest, Company Share of Unconsolidated Entities and Company Share of Discontinued Operations is essential to allow our financial statement users the ability to arrive at our Total Company Ownership for all of our ownership interests, irrespective of the accounting method used to account for the entity. We believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated joint ventures when read in conjunction with the Company’s results under GAAP. The calculation of Total Company Ownership financial information has limitations as an analytical tool. Some of these limitations include:

•
The amounts shown in the Noncontrolling Interest, Company Share of Unconsolidated Entities and Company Share of Discontinued Operations columns were derived by applying our ownership percentage interest used to arrive at our share of net income during the period when applying the equity method of accounting and calculating income/loss to minority partners under noncontrolling interest accounting as well as our share of entities qualifying for discontinued operations reporting and may not accurately depict the legal and economic implications of holding a non-controlling interest of an entity; and

•
Other companies in our industry may calculate their total company ownership amounts differently than we do, limiting the usefulness as a comparative measure.

Because of these limitations, the calculation of Total Company Ownership should not be considered in isolation or as a substitute for our financial statements as reported under GAAP. We suggest you compensate for these limitations by relying primarily on our GAAP results and using the Total Company Ownership information only supplementally.


50


Forest City Realty Trust, Inc. and Subsidiaries
Appendix - Asset, Liability and Equity Information


 
June 30, 2017
 
December 31, 2016
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
(in thousands)
Assets
 
 
 
 
 
Real Estate
 
 
 
 
 
Completed rental properties
 
 
 
 
 
Office
$
111,319

$
218,654

 
$
110,427

$
137,312

Apartments
368,683

807,161

 
374,128

970,009

Retail
—

1,982,186

 
—

1,979,903

Total Operations
480,002

3,008,001

 
484,555

3,087,224

Recently-Opened Properties/Redevelopment
427,885

83,906

 
339,735

123,511

Corporate
—

—

 
—

—

Total completed rental properties
907,887

3,091,907

 
824,290

3,210,735

Projects under construction
 
 
 
 
 
Office
—

—

 
—

—

Apartments
164,978

244,787

 
210,836

251,938

Retail
—

22,980

 
—

17,618

Total projects under construction
164,978

267,767

 
210,836

269,556

Projects under development
 
 
 
 
 
Operating properties
—

21,636

 
—

24,121

Office
9,377

3,289

 
9,021

3,287

Apartments
—

57,936

 
—

26,092

Retail
—

1,320

 
—

1,320

Total projects under development
9,377

84,181

 
9,021

54,820

Total projects under construction and development
174,355

351,948

 
219,857

324,376

Land inventory
5,686

1,399

 
5,026

4,359

Total Real Estate
1,087,928

3,445,254

 
1,049,173

3,539,470

Less accumulated depreciation
(102,169
)
(745,943
)
 
(90,917
)
(790,385
)
Real Estate, net
985,759

2,699,311

 
958,256

2,749,085

Cash and equivalents
27,157

77,959

 
22,269

69,128

Restricted cash
7,622

91,395

 
7,429

109,093

Accounts receivable, net
8,064

54,975

 
9,693

55,751

Notes receivable
(8,191
)
19,789

 
12,343

17,239

Investments in and advances to unconsolidated entities
(58,332
)
(557,308
)
 
(58,189
)
(569,864
)
Lease procurement costs, net
3,177

59,671

 
3,040

60,150

Prepaid expenses and other deferred costs, net
7,134

19,026

 
7,192

23,458

Intangible assets, net
12,869

11,944

 
14,008

12,446

Total Assets
$
985,259

$
2,476,762

 
$
976,041

$
2,526,486













51


Forest City Realty Trust, Inc. and Subsidiaries
Appendix - Asset, Liability and Equity Information


 
June 30, 2017
 
December 31, 2016
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
(in thousands)
Liabilities and Equity
 
 
 
 
 
Liabilities
 
 
 
 
 
Nonrecourse mortgage debt and notes payable, net
 
 
 
 
 
Completed rental properties
 
 
 
 
 
Office
$
40,988

$
179,641

 
$
41,605

$
112,409

Apartments
201,995

571,672

 
209,660

643,307

Retail
—

1,354,717

 
—

1,366,375

Total Operations
242,983

2,106,030

 
251,265

2,122,091

Recently-Opened Properties/Redevelopment
253,576

29,694

 
207,577

75,482

Total completed rental properties
496,559

2,135,724

 
458,842

2,197,573

Projects under construction
 
 
 
 
 
Office
—

—

 
—

—

Apartments
37,400

108,805

 
49,485

98,497

Retail
—

—

 
—

—

Total projects under construction
37,400

108,805

 
49,485

98,497

Projects under development
 
 
 
 
 
Operating properties
—

—

 
—

—

Office
—

—

 
—

—

Apartments
—

156,811

 
—

154,599

Retail
—

—

 
—

—

Total projects under development
—

156,811

 
—

154,599

Total projects under construction and development
37,400

265,616

 
49,485

253,096

Land inventory
—

—

 
—

—

Nonrecourse mortgage debt and notes payable, net
533,959

2,401,340

 
508,327

2,450,669

Revolving credit facility
—

—

 
—

—

Term loan, net
—

—

 
—

—

Convertible senior debt, net
—

—

 
—

—

Construction payables
45,709

50,492

 
53,749

65,684

Operating accounts payable and accrued expenses
33,844

159,971

 
27,753

161,767

Accrued derivative liability
—

3,190

 
654

4,543

Total Accounts payable, accrued expenses and other liabilities
79,553

213,653

 
82,156

231,994

Cash distributions and losses in excess of investments in unconsolidated entities
(16,893
)
(138,231
)
 
(16,603
)
(156,177
)
Total Liabilities
596,619

2,476,762

 
573,880

2,526,486

Equity
 
 
 
 
 
Stockholders’ Equity
 
 
 
 
 
Stockholders’ equity before accumulated other comprehensive loss
—

—

 
—

—

Accumulated other comprehensive loss
—

—

 
—

—

Total Stockholders’ Equity
—

—

 
—

—

Noncontrolling interest
388,640

—

 
402,161

—

Total Equity
388,640

—

 
402,161

—

Total Liabilities and Equity
$
985,259

$
2,476,762

 
$
976,041

$
2,526,486




52


Forest City Realty Trust, Inc. and Subsidiaries
Appendix - Revenue and Expense Information


 
 
 
 
 
 
 
Three Months Ended June 30, 2017
 
Three Months Ended June 30, 2016
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
(in thousands)
Revenues
 
 
 
 
 
Rental
$
16,645

$
64,170

 
$
13,412

$
62,392

Tenant recoveries
2,119

17,644

 
1,632

16,926

Service and management fees
86

2,358

 
43

2,329

Parking and other
647

4,270

 
917

5,079

Arena
—

—

 
—

—

Land sales
1,377

21,716

 
822

651

Subsidized Senior Housing
—

7,462

 
—

12,543

Military Housing
—

—

 
—

—

Total revenues
20,874

117,620

 
16,826

99,920

Expenses
 
 
 
 
 
Property operating and management
6,448

27,592

 
4,505

24,064

Real estate taxes
2,533

8,870

 
1,976

8,134

Ground rent
51

2,074

 
133

2,677

Arena operating
—

—

 
—

—

Cost of land sales
357

21,340

 
161

401

Subsidized Senior Housing operating
—

3,802

 
—

8,202

Military Housing operating
—

—

 
—

—

Corporate general and administrative
—

—

 
—

—

Organizational transformation and termination benefits
—

—

 
—

—

 
9,389

63,678

 
6,775

43,478

Depreciation and amortization
6,853

23,195

 
5,463

22,587

Write-offs of abandoned development projects and demolition costs
—

396

 
—

—

Impairment of real estate
—

—

 
—

—

Total expenses
16,242

87,269

 
12,238

66,065

Operating income (loss)
4,632

30,351

 
4,588

33,855

Interest and other income
448

451

 
392

390

Net gain on disposition of interest in unconsolidated entities
—

34,596

 
—

12,613

Interest expense
(3,970
)
(23,926
)
 
(3,049
)
(25,504
)
Amortization of mortgage procurement costs
(341
)
(743
)
 
(267
)
(882
)
Loss on extinguishment of debt
—

(2
)
 
—

(849
)
Earnings (loss) before income taxes and earnings (loss) from unconsolidated entities
769

40,727

 
1,664

19,623

Equity in earnings
130

(6,131
)
 
96

(7,010
)
Net gain on disposition of interest in unconsolidated entities
657

(34,596
)
 
—

(12,613
)

787

(40,727
)
 
96

(19,623
)
Earnings (loss) before income taxes
1,556

—

 
1,760

—

Income tax expense (benefit) of taxable REIT subsidiaries
 
 
 
 
 
Current
—

—

 
—

—

Deferred
—

—

 
—

—

 
—

—

 
—

—

Earnings (loss) before loss on disposal of real estate
1,556

—

 
1,760

—

Net gain on disposition of interest in development project, net of tax
—

—

 
—

—

Net gain (loss) on disposition of full or partial interests in rental properties, net of tax
—

—

 
—

—

Earnings (loss) from continuing operations
1,556

—

 
1,760

—

Discontinued operations, net of tax
 
 
 
 
 
Operating loss from rental properties
—

—

 
—

—

Gain (loss) on disposition of rental properties
—

—

 
—

—

Equity in earnings (loss)
—

—

 
—

—

 
—

—

 
—

—

Net earnings (loss)
1,556

—

 
1,760

—

Noncontrolling interests, gross of tax
 
 
 
 
 
Earnings from continuing operations attributable to noncontrolling interests
(1,556
)
—

 
(1,760
)
—

Loss from discontinued operations attributable to noncontrolling interests
—

—

 
—

—

 
(1,556
)
—

 
(1,760
)
—

Net earnings (loss) attributable to Forest City Realty Trust, Inc.
$
—

$
—

 
$
—

$
—


53


Forest City Realty Trust, Inc. and Subsidiaries
Appendix - Revenue and Expense Information


 
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
 
Noncontrolling
Interest
Company Share of Unconsolidated Investments
Company Share of Discontinued Operations
 
(in thousands)
Revenues
 
 
 
 
 
 
Rental
$
32,809

$
127,569

 
$
26,200

$
123,420

$
—

Tenant recoveries
3,865

35,335

 
3,229

32,938

—

Service and management fees
127

4,890

 
81

3,932

—

Parking and other
1,655

9,042

 
1,748

9,352

—

Arena
—

—

 
—

—

8,136

Land sales
1,907

24,568

 
1,213

1,317

—

Subsidized Senior Housing
—

19,478

 
—

25,432

—

Military Housing
—

—

 
—

971

—

Total revenues
40,363

220,882

 
32,471

197,362

8,136

Expenses
 
 
 
 
 
 
Property operating and management
13,724

53,040

 
9,669

47,288

—

Real estate taxes
4,678

17,647

 
3,936

15,909

—

Ground rent
103

4,859

 
267

5,335

—

Arena operating
—

—

 
—

—

6,938

Cost of land sales
516

23,408

 
193

401

—

Subsidized Senior Housing operating
—

11,810

 
—

15,923

—

Military Housing operating
—

—

 
—

455

—

Corporate general and administrative
—

—

 
—

—

—

Organizational transformation and termination benefits
—

—

 
—

—

—

 
19,021

110,764

 
14,065

85,311

6,938

Depreciation and amortization
13,549

45,387

 
9,790

43,349

35

Write-offs of abandoned development projects and demolition costs
—

747

 
—

—

—

Impairment of real estate
—

—

 
—

—

—

Total expenses
32,570

156,898

 
23,855

128,660

6,973

Operating income
7,793

63,984

 
8,616

68,702

1,163

Interest and other income
972

1,976

 
769

755

—

Net gain on disposition of interest in unconsolidated entities
—

52,297

 
—

12,613

—

Interest expense
(7,534
)
(47,346
)
 
(5,038
)
(49,845
)
(1,738
)
Amortization of mortgage procurement costs
(628
)
(1,640
)
 
(459
)
(1,794
)
(21
)
Loss on extinguishment of debt
—

(1,625
)
 
—

(849
)
—

Earnings (loss) before income taxes and earnings (loss) from unconsolidated entities
603

67,646

 
3,888

29,582

(596
)
Equity in earnings
190

(15,349
)
 
178

(16,969
)
(1,400
)
Net gain on disposition of interest in unconsolidated entities
657

(52,297
)
 
—

(12,613
)
—

 
847

(67,646
)
 
178

(29,582
)
(1,400
)
Earnings (loss) before income taxes
1,450

—

 
4,066

—

(1,996
)
Income tax expense (benefit) of taxable REIT subsidiaries
 
 
 
 
 
 
Current
—

—

 
—

—

(431
)
Deferred
—

—

 
—

—

(393
)
 
—

—

 
—

—

(824
)
Earnings (loss) before gain on disposal of real estate
1,450

—

 
4,066

—

(1,172
)
Net gain (loss) on disposition of interest in development project, net of tax
—

—

 
—

—

—

Net gain (loss) on disposition of full or partial interests in rental properties, net of tax
—

—

 
(185
)
—

64,553

Earnings (loss) from continuing operations
1,450

—

 
3,881

—

63,381

Discontinued operations, net of tax
 
 
 
 
 
 
Operating loss from rental properties
—

—

 
(776
)
—

350

Gain on disposition of disposal group
—

—

 
—

—

(64,553
)
Equity in earnings (loss)
—

—

 
—

—

822

 
—

—

 
(776
)
—

(63,381
)
Net earnings (loss)
1,450

—

 
3,105

—

—

Noncontrolling interests, gross of tax
 
 
 
 
 
 
Earnings from continuing operations attributable to noncontrolling interests
(1,450
)
—

 
(3,881
)
—

—

Loss from discontinued operations attributable to noncontrolling interests
—

—

 
776

—

—

 
(1,450
)
—

 
(3,105
)
—

—

Net earnings (loss) attributable to Forest City Realty Trust, Inc.
$
—

$
—


$
—

$
—

$
—


54


Forest City Realty Trust, Inc. and Subsidiaries
Appendix


Interest Expense Information
 
 
 
 
 
 
Three Months Ended June 30, 2017
Three Months Ended June 30, 2016
 
Noncontrolling Interest
Company Share of Unconsolidated Entities
Noncontrolling Interest
Company Share of Unconsolidated Entities
 
(in thousands)
Amortization and mark-to-market adjustments of derivative instruments
$
4

$
—

$
(5
)
$
12

Interest incurred
4,510

26,467

3,131

27,917

Interest capitalized
(544
)
(2,541
)
(77
)
(2,425
)
Net interest expense
$
3,970

$
23,926

$
3,049

$
25,504

 
Six Months Ended June 30, 2017
Six Months Ended June 30, 2016
 
Noncontrolling Interest
Company Share of Unconsolidated Entities
Noncontrolling Interest
Company Share of Unconsolidated Entities
Company Share of Discontinued Operations
 
(in thousands)
Amortization and mark-to-market adjustments of derivative instruments
$
13

$
—

$
2

$
16

$
—

Interest incurred
8,689

52,747

5,631

54,560

1,738

Interest capitalized
(1,168
)
(5,401
)
(595
)
(4,731
)
—

Net interest expense
$
7,534

$
47,346

$
5,038

$
49,845

$
1,738



Capital Expenditures Information
 
Six Months Ended June 30, 2017
Six Months Ended June 30, 2016
 
Noncontrolling Interest
Company Share of Unconsolidated Entities
Noncontrolling Interest
Company Share of Unconsolidated Entities
 
(in thousands)
Operating properties:
 
 
 
 
Office Segment
$
337

$
535

$
78

$
375

Apartment Segment
824

7,995

463

5,771

Retail Segment
—

6,749

—

4,695

Total operating properties
1,161

15,279

541

10,841

Corporate Segment
—

—

—

—

Tenant improvements:
 
 
 
 
Office Segment
218

733

189

3,195

Retail Segment
—

6,702

—

5,304

Total capital expenditures
$
1,379

$
22,714

$
730

$
19,340



55


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands)

 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2017
Fully Consolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
86,119

$
66,282

$
6,511

$
158,912

$
7,052

$
—

$
165,964

Tenant recoveries
23,689

518

3,493

27,700

432

—

28,132

Service and management fees
444

2,076

4,806

7,326

4,037

—

11,363

Other revenues (includes Subsidized Senior Housing)
7,131

3,438

234

10,803

20,180

—

30,983


117,383

72,314

15,044

204,741

31,701

—

236,442

Expenses
 
 
 
 
 
 
 
Property operating and management
(29,631
)
(25,257
)
(8,967
)
(63,855
)
(14,303
)
—

(78,158
)
Real estate taxes
(11,934
)
(6,450
)
(1,519
)
(19,903
)
(1,454
)
—

(21,357
)
Ground rent
(3,173
)
(483
)
(110
)
(3,766
)
—

—

(3,766
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(7,694
)
(20,881
)
(28,575
)

(44,738
)
(32,190
)
(10,596
)
(87,524
)
(23,451
)
(20,881
)
(131,856
)
Less organizational transformation and termination benefits
—

—

—

—

—

6,863

6,863

Write-offs of abandoned development projects and demolition costs
—

—

—

—

(1,596
)
—

(1,596
)
Interest and other income
—

—

—

—

—

9,896

9,896

Adjusted EBITDA attributable to Fully Consolidated Entities
$
72,645

$
40,124

$
4,448

$
117,217

$
6,654

$
(4,122
)
$
119,749

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(17,762
)
—

(17,762
)
Other land development revenues
—

—

—

—

(1,862
)
—

(1,862
)
Cost of land sales
—

—

—

—

7,694

—

7,694

Other land development expenses
—

—

—

—

2,034

—

2,034

Corporate general and administrative expenses
—

—

—

—

—

14,018

14,018

Write-offs of abandoned development projects and demolition costs
—

—

—

—

1,596

—

1,596

Interest and other income
—

—

—

—

—

(9,896
)
(9,896
)
Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(8,300
)
$
4,122

$
(4,178
)
Net Operating Income attributable to Fully Consolidated Entities
$
72,645

$
40,124

$
4,448

$
117,217

$
(1,646
)
$
—

$
115,571

NOI exclusions per above
4,178

Depreciation and Amortization
(65,747
)
Interest Expense
(28,901
)
Amortization of mortgage procurement costs
(1,507
)
Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
(6,863
)
Earnings (loss) from unconsolidated entities
41,514

Earnings (loss) before income taxes
$
58,245

Margin % (based on Adjusted EBITDA)
61.9
%
55.5
%
29.6
%
57.3
%
21.0
 %
0.0
%
50.6
%

56


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2017
Noncontrolling Interest
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
3,307

$
9,087

$
—

$
12,394

$
4,251

$
—

$
16,645

Tenant recoveries
2,052

52

—

2,104

15

—

2,119

Service and management fees
1

(3
)
—

(2
)
88

—

86

Other revenues (includes Subsidized Senior Housing)
145

226

—

371

1,653

—

2,024


5,505

9,362

—

14,867

6,007

—

20,874

Expenses
 
 
 
 
 
 
 
Property operating and management
(1,908
)
(2,527
)
—

(4,435
)
(2,013
)
—

(6,448
)
Real estate taxes
(747
)
(933
)
—

(1,680
)
(853
)
—

(2,533
)
Ground rent
(80
)
29

—

(51
)
—

—

(51
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(357
)
—

(357
)

(2,735
)
(3,431
)
—

(6,166
)
(3,223
)
—

(9,389
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

448

448

Adjusted EBITDA attributable to Noncontrolling Interest
$
2,770

$
5,931

$
—

$
8,701

$
2,784

$
448

$
11,933

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(1,377
)
—

(1,377
)
Other land development revenues
—

—

—

—

(186
)
—

(186
)
Cost of land sales
—

—

—

—

357

—

357

Other land development expenses
—

—

—

—

204

—

204

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(448
)
(448
)
Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(1,002
)
$
(448
)
$
(1,450
)
Net Operating Income attributable to Noncontrolling Interest
$
2,770

$
5,931

$
—

$
8,701

$
1,782

$
—

$
10,483

NOI exclusions per above
1,450

Depreciation and Amortization
(6,853
)
Interest Expense
(3,970
)
Amortization of mortgage procurement costs
(341
)
Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

Earnings (loss) from unconsolidated entities
787

Earnings (loss) before income taxes
$
1,556

Margin % (based on Adjusted EBITDA)
50.3
%
63.4
%
0.0
%
58.5
%
46.3
 %
0.0
%
57.2
%

57


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2017
Company Share of Unconsolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
6,849

$
19,662

$
37,233

$
63,744

$
426

$
—

$
64,170

Tenant recoveries
1,222

105

16,108

17,435

209

—

17,644

Service and management fees
465

1,030

927

2,422

(64
)
—

2,358

Other revenues (includes Subsidized Senior Housing)
482

8,425

2,804

11,711

21,737

—

33,448


9,018

29,222

57,072

95,312

22,308

—

117,620

Expenses
 
 
 
 
 
 
 
Property operating and management
(2,102
)
(7,214
)
(14,882
)
(24,198
)
(3,394
)
—

(27,592
)
Real estate taxes
(844
)
(1,742
)
(6,210
)
(8,796
)
(74
)
—

(8,870
)
Ground rent
(593
)
(254
)
(1,230
)
(2,077
)
3

—

(2,074
)
Other expenses (includes Subsidized Senior Housing)
—

(3,802
)
—

(3,802
)
(21,340
)
—

(25,142
)

(3,539
)
(13,012
)
(22,322
)
(38,873
)
(24,805
)
—

(63,678
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

(396
)
—

(396
)
Interest and other income
—

—

—

—

—

451

451

Adjusted EBITDA attributable to Unconsolidated Entities
$
5,479

$
16,210

$
34,750

$
56,439

$
(2,893
)
$
451

$
53,997

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(21,716
)
—

(21,716
)
Other land development revenues
—

—

—

—

—

—

—

Cost of land sales
—

—

—

—

21,340

—

21,340

Other land development expenses
—

—

—

—

63

—

63

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

396

—

396

Interest and other income
—

—

—

—

—

(451
)
(451
)
Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
83

$
(451
)
$
(368
)
Net Operating Income attributable to Unconsolidated Entities
$
5,479

$
16,210

$
34,750

$
56,439

$
(2,810
)
$
—

$
53,629

NOI exclusions per above
368

Depreciation and Amortization
(23,195
)
Interest Expense
(23,926
)
Amortization of mortgage procurement costs
(743
)
Net loss on extinguishment of debt
(2
)
Net gain on disposition of interest in unconsolidated entities
34,596

Organizational transformation and termination benefits
—

Earnings (loss) from unconsolidated entities
(40,727
)
Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
60.8
%
55.5
%
60.9
%
59.2
%
(13.0
)%
0.0
%
45.9
%

58


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2017
Company Share of Discontinued Operations
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Tenant recoveries
—

—

—

—

—

—

—

Service and management fees
—

—

—

—

—

—

—

Other revenues (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Expenses
 
 
 
 
 
 
 
Property operating and management
—

—

—

—

—

—

—

Real estate taxes
—

—

—

—

—

—

—

Ground rent
—

—

—

—

—

—

—

Other expenses (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

—

—

—

Other land development revenues
—

—

—

—

—

—

—

Cost of land sales
—

—

—

—

—

—

—

Other land development expenses
—

—

—

—

—

—

—

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Net Operating Income attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

NOI exclusions per above
—

Depreciation and Amortization
—

Interest Expense
—

Amortization of mortgage procurement costs
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

Earnings (loss) from unconsolidated entities
—

Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
0.0
%
0.0
%
0.0
%
0.0
%
0.0
 %
0.0
%
0.0
%

59


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2016
Fully Consolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
85,512

$
65,473

$
9,743

$
160,728

$
1,818

$
—

$
162,546

Tenant recoveries
25,053

310

3,264

28,627

17

—

28,644

Service and management fees
3,831

4,422

1,725

9,978

2,533

—

12,511

Other revenues (includes Subsidized Senior Housing)
6,169

3,668

1,203

11,040

11,222

—

22,262


120,565

73,873

15,935

210,373

15,590

—

225,963

Expenses
 
 
 
 
 
 
 
Property operating and management
(32,592
)
(25,613
)
(7,158
)
(65,363
)
(16,072
)
—

(81,435
)
Real estate taxes
(13,026
)
(6,163
)
(1,752
)
(20,941
)
(659
)
—

(21,600
)
Ground rent
(2,833
)
(507
)
(107
)
(3,447
)
—

—

(3,447
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(1,702
)
(22,431
)
(24,133
)

(48,451
)
(32,283
)
(9,017
)
(89,751
)
(18,433
)
(22,431
)
(130,615
)
Less organizational transformation and termination benefits
—

—

—

—

—

5,681

5,681

Interest and other income
—

—

—

—

—

11,031

11,031

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Fully Consolidated Entities
$
72,114

$
41,590

$
6,918

$
120,622

$
(2,843
)
$
(5,719
)
$
112,060

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(8,221
)
—

(8,221
)
Other land development revenues
—

—

—

—

(2,228
)
—

(2,228
)
Cost of land sales
—

—

—

—

1,702

—

1,702

Other land development expenses
—

—

—

—

2,397

—

2,397

Corporate general and administrative expenses
—

—

—

—

—

16,750

16,750

Interest and other income
—

—

—

—

—

(11,031
)
(11,031
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(6,350
)
$
5,719

$
(631
)
Net Operating Income attributable to Fully Consolidated Entities
$
72,114

$
41,590

$
6,918

$
120,622

$
(9,193
)
$
—

$
111,429

NOI exclusions per above
631

Depreciation and Amortization
(62,418
)
Interest Expense
(32,435
)
Amortization of mortgage procurement costs
(1,416
)
Impairment of real estate
(2,100
)
Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
(5,681
)
(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
21,164

Earnings (loss) before income taxes
$
29,174

Margin % (based on Adjusted EBITDA)
59.8
%
56.3
%
43.4
%
57.3
%
(18.2
)%
0.0
%
49.6
%

60


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2016
Noncontrolling Interest
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
3,210

$
8,994

$
—

$
12,204

$
1,208

$
—

$
13,412

Tenant recoveries
1,599

31

—

1,630

2

—

1,632

Service and management fees
1

(9
)
—

(8
)
51

—

43

Other revenues (includes Subsidized Senior Housing)
161

486

—

647

1,092

—

1,739


4,971

9,502

—

14,473

2,353

—

16,826

Expenses
 
 
 
 
 
 
 
Property operating and management
(1,686
)
(1,661
)
—

(3,347
)
(1,158
)
—

(4,505
)
Real estate taxes
(669
)
(948
)
—

(1,617
)
(359
)
—

(1,976
)
Ground rent
(79
)
(54
)
—

(133
)
—

—

(133
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(161
)
—

(161
)

(2,434
)
(2,663
)
—

(5,097
)
(1,678
)
—

(6,775
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

392

392

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Noncontrolling Interest
$
2,537

$
6,839

$
—

$
9,376

$
675

$
392

$
10,443

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(822
)
—

(822
)
Other land development revenues
—

—

—

—

(222
)
—

(222
)
Cost of land sales
—

—

—

—

161

—

161

Other land development expenses
—

—

—

—

266

—

266

Corporate general and administrative expenses
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(392
)
(392
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(617
)
$
(392
)
$
(1,009
)
Net Operating Income attributable to Noncontrolling Interest
$
2,537

$
6,839

$
—

$
9,376

$
58

$
—

$
9,434

NOI exclusions per above
1,009

Depreciation and Amortization
(5,463
)
Interest Expense
(3,049
)
Amortization of mortgage procurement costs
(267
)
Impairment of real estate
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
96

Earnings (loss) before income taxes
$
1,760

Margin % (based on Adjusted EBITDA)
51.0
%
72.0
%
0.0
%
64.8
%
28.7
 %
0.0
%
62.1
%

61


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2016
Company Share of Unconsolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
4,011

$
19,622

$
36,045

$
59,678

$
2,714

$
—

$
62,392

Tenant recoveries
685

96

15,460

16,241

685

—

16,926

Service and management fees
515

1,075

719

2,309

20

—

2,329

Other revenues (includes Subsidized Senior Housing)
447

13,535

3,406

17,388

885

—

18,273


5,658

34,328

55,630

95,616

4,304

—

99,920

Expenses
 
 
 
 
 
 
 
Property operating and management
(1,833
)
(7,107
)
(13,641
)
(22,581
)
(1,483
)
—

(24,064
)
Real estate taxes
(589
)
(1,605
)
(5,613
)
(7,807
)
(327
)
—

(8,134
)
Ground rent
(231
)
(255
)
(1,861
)
(2,347
)
(330
)
—

(2,677
)
Other expenses (includes Subsidized Senior Housing)
—

(8,202
)
—

(8,202
)
(401
)
—

(8,603
)

(2,653
)
(17,169
)
(21,115
)
(40,937
)
(2,541
)
—

(43,478
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

390

390

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

(75
)
—

(75
)
1,520

—

1,445

Adjusted EBITDA attributable to Unconsolidated Entities
$
3,005

$
17,084

$
34,515

$
54,604

$
3,283

$
390

$
58,277

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(651
)
—

(651
)
Other land development revenues
—

—

—

—

(15
)
—

(15
)
Cost of land sales
—

—

—

—

401

—

401

Other land development expenses
—

—

—

—

76

—

76

Corporate general and administrative expenses
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(390
)
(390
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

75

—

75

(1,520
)
—

(1,445
)
Subtotal NOI exclusions
$
—

$
75

$
—

$
75

$
(1,709
)
$
(390
)
$
(2,024
)
Net Operating Income attributable to Unconsolidated Entities
$
3,005

$
17,159

$
34,515

$
54,679

$
1,574

$
—

$
56,253

NOI exclusions per above
2,024

Depreciation and Amortization
(22,587
)
Interest Expense
(25,504
)
Amortization of mortgage procurement costs
(882
)
Impairment of real estate
—

Net loss on extinguishment of debt
(849
)
Net gain on disposition of interest in unconsolidated entities
12,613

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
(1,445
)
Earnings (loss) from unconsolidated entities
(19,623
)
Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
53.1
%
49.8
%
62.0
%
57.1
%
76.3
 %
0.0
%
58.3
%

62


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Three Months Ended June 30, 2016
Company Share of Discontinued Operations
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Tenant recoveries
—

—

—

—

—

—

—

Service and management fees
—

—

—

—

—

—

—

Other revenues (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Expenses
 
 
 
 
 
 
 
Property operating and management
—

—

—

—

—

—

—

Real estate taxes
—

—

—

—

—

—

—

Ground rent
—

—

—

—

—

—

—

Other expenses (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

—

—

—

Other land development revenues
—

—

—

—

—

—

—

Cost of land sales
—

—

—

—

—

—

—

Other land development expenses
—

—

—

—

—

—

—

Corporate general and administrative expenses
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Net Operating Income attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

NOI exclusions per above
—

Depreciation and Amortization
—

Interest Expense
—

Amortization of mortgage procurement costs
—

Impairment of real estate
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
—

Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
0.0
%
0.0
%
0.0
%
0.0
%
0.0
 %
0.0
%
0.0
%

63


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)


 
Six Months Ended June 30, 2017
Fully Consolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
170,893

$
131,070

$
13,418

$
315,381

$
13,032

$
—

$
328,413

Tenant recoveries
45,544

1,034

6,663

53,241

823

—

54,064

Service and management fees
1,367

5,176

9,137

15,680

5,810

—

21,490

Other revenues (includes Subsidized Senior Housing)
13,118

7,132

576

20,826

27,655

—

48,481


230,922

144,412

29,794

405,128

47,320

—

452,448

Expenses
 
 
 
 
 
 
 
Property operating and management
(56,790
)
(52,106
)
(18,176
)
(127,072
)
(29,879
)
—

(156,951
)
Real estate taxes
(24,333
)
(12,955
)
(2,944
)
(40,232
)
(2,325
)
—

(42,557
)
Ground rent
(6,391
)
(1,033
)
(230
)
(7,654
)
—

—

(7,654
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(9,695
)
(40,989
)
(50,684
)

(87,514
)
(66,094
)
(21,350
)
(174,958
)
(41,899
)
(40,989
)
(257,846
)
Less organizational transformation and termination benefits
—

—

—

—

—

11,388

11,388

Write-offs of abandoned development projects and demolition costs
—

—

—

—

(1,596
)
—

(1,596
)
Interest and other income
—

—

—

—

—

20,168

20,168

Loss on disposition of interest in development project
—

—

—

—

(113
)
—

(113
)
Adjusted EBITDA attributable to Fully Consolidated Entities
$
143,408

$
78,318

$
8,444

$
230,170

$
3,712

$
(9,433
)
$
224,449

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(23,522
)
—

(23,522
)
Other land development revenues
—

—

—

—

(2,967
)
—

(2,967
)
Cost of land sales
—

—

—

—

9,695

—

9,695

Other land development expenses
—

—

—

—

4,598

—

4,598

Corporate general and administrative expenses
—

—

—

—

—

29,601

29,601

Write-offs of abandoned development projects and demolition costs
—

—

—

—

1,596

—

1,596

Interest and other income
—

—

—

—

—

(20,168
)
(20,168
)
Loss on disposition of interest in development project
—

—

—

—

113

—

113

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(10,487
)
$
9,433

$
(1,054
)
Net Operating Income attributable to Fully Consolidated Entities
$
143,408

$
78,318

$
8,444

$
230,170

$
(6,775
)
$
—

$
223,395

NOI exclusions per above
1,054

Depreciation and Amortization
(129,302
)
Interest Expense
(56,876
)
Amortization of mortgage procurement costs
(2,729
)
Net loss on extinguishment of debt
(2,843
)
Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
(11,388
)
Loss on disposition of interest in development project
113

Earnings (loss) from unconsolidated entities
68,493

Earnings (loss) before income taxes
$
89,917

Margin % (based on Adjusted EBITDA)
62.1
%
54.2
%
28.3
%
56.8
%
7.8
%
0.0
%
49.6
%

64


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2017
Noncontrolling Interest
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
6,651

$
18,168

$
—

$
24,819

$
7,990

$
—

$
32,809

Tenant recoveries
3,718

127

—

3,845

20

—

3,865

Service and management fees
2

(3
)
—

(1
)
128

—

127

Other revenues (includes Subsidized Senior Housing)
298

676

—

974

2,588

—

3,562


10,669

18,968

—

29,637

10,726

—

40,363

Expenses
 
 
 
 
 
 
 
Property operating and management
(3,565
)
(5,514
)
—

(9,079
)
(4,645
)
—

(13,724
)
Real estate taxes
(1,492
)
(1,880
)
—

(3,372
)
(1,306
)
—

(4,678
)
Ground rent
(160
)
57

—

(103
)
—

—

(103
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(516
)
—

(516
)

(5,217
)
(7,337
)
—

(12,554
)
(6,467
)
—

(19,021
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

972

972

Loss on disposition of interest in development project
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Noncontrolling Interest
$
5,452

$
11,631

$
—

$
17,083

$
4,259

$
972

$
22,314

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(1,907
)
—

(1,907
)
Other land development revenues
—

—

—

—

(294
)
—

(294
)
Cost of land sales
—

—

—

—

516

—

516

Other land development expenses
—

—

—

—

497

—

497

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(972
)
(972
)
Loss on disposition of interest in development project
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(1,188
)
$
(972
)
$
(2,160
)
Net Operating Income attributable to Noncontrolling Interest
$
5,452

$
11,631

$
—

$
17,083

$
3,071

$
—

$
20,154

NOI exclusions per above
2,160

Depreciation and Amortization
(13,549
)
Interest Expense
(7,534
)
Amortization of mortgage procurement costs
(628
)
Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

Loss on disposition of interest in development project
—

Earnings (loss) from unconsolidated entities
847

Earnings (loss) before income taxes
$
1,450

Margin % (based on Adjusted EBITDA)
51.1
%
61.3
%
0.0
%
57.6
%
39.7
%
0.0
%
55.3
%

65


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2017
Company Share of Unconsolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
13,419

$
39,081

$
74,333

$
126,833

$
736

$
—

$
127,569

Tenant recoveries
2,478

209

32,249

34,936

399

—

35,335

Service and management fees
881

2,339

2,085

5,305

(415
)
—

4,890

Other revenues (includes Subsidized Senior Housing)
918

21,448

5,700

28,066

25,022

—

53,088


17,696

63,077

114,367

195,140

25,742

—

220,882

Expenses
 
 
 
 
 
 
 
Property operating and management
(3,983
)
(14,588
)
(29,143
)
(47,714
)
(5,326
)
—

(53,040
)
Real estate taxes
(1,731
)
(3,496
)
(12,280
)
(17,507
)
(140
)
—

(17,647
)
Ground rent
(1,184
)
(510
)
(3,165
)
(4,859
)
—

—

(4,859
)
Other expenses (includes Subsidized Senior Housing)
—

(11,810
)
—

(11,810
)
(23,408
)
—

(35,218
)

(6,898
)
(30,404
)
(44,588
)
(81,890
)
(28,874
)
—

(110,764
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

(747
)
—

(747
)
Interest and other income
—

—

—

—

—

1,976

1,976

Loss on disposition of interest in development project
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Unconsolidated Entities
$
10,798

$
32,673

$
69,779

$
113,250

$
(3,879
)
$
1,976

$
111,347

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

(24,568
)
—

(24,568
)
Other land development revenues
—

—

—

—

(392
)
—

(392
)
Cost of land sales
—

—

—

—

23,408

—

23,408

Other land development expenses
—

—

—

—

163

—

163

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

747

—

747

Interest and other income
—

—

—

—

—

(1,976
)
(1,976
)
Loss on disposition of interest in development project
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(642
)
$
(1,976
)
$
(2,618
)
Net Operating Income attributable to Unconsolidated Entities
$
10,798

$
32,673

$
69,779

$
113,250

$
(4,521
)
$
—

$
108,729

NOI exclusions per above
2,618

Depreciation and Amortization
(45,387
)
Interest Expense
(47,346
)
Amortization of mortgage procurement costs
(1,640
)
Net loss on extinguishment of debt
(1,625
)
Net gain on disposition of interest in unconsolidated entities
52,297

Organizational transformation and termination benefits
—

Loss on disposition of interest in development project
—

Earnings (loss) from unconsolidated entities
(67,646
)
Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
61.0
%
51.8
%
61.0
%
58.0
%
(15.1
)%
0.0
%
50.4
%

66


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2017
Company Share of Discontinued Operations
Office
Apartments
Retail
Total Operations
Development
Corporate
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
Rental
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Tenant recoveries
—

—

—

—

—

—

—

Service and management fees
—

—

—

—

—

—

—

Other revenues (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Expenses
 
 
 
 
 
 
 
Property operating and management
—

—

—

—

—

—

—

Real estate taxes
—

—

—

—

—

—

—

Ground rent
—

—

—

—

—

—

—

Other expenses (includes Subsidized Senior Housing)
—

—

—

—

—

—

—


—

—

—

—

—

—

—

Less organizational transformation and termination benefits
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Loss on disposition of interest in development project
—

—

—

—

—

—

—

Adjusted EBITDA attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Exclude:
 
 
 
 
 
 
 
Land sales
—

—

—

—

—

—

—

Other land development revenues
—

—

—

—

—

—

—

Cost of land sales
—

—

—

—

—

—

—

Other land development expenses
—

—

—

—

—

—

—

Corporate general and administrative expenses
—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

Loss on disposition of interest in development project
—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
—

$
—

$
—

Net Operating Income attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
—

NOI exclusions per above
—

Depreciation and Amortization
—

Interest Expense
—

Amortization of mortgage procurement costs
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

Loss on disposition of interest in development project
—

Earnings (loss) from unconsolidated entities
—

Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%

67


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2016
Fully Consolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Other
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
 
Rental
$
170,389

$
130,016

$
21,302

$
321,707

$
4,022

$
—

$
—

$
325,729

Tenant recoveries
49,620

619

9,333

59,572

662

—

—

60,234

Service and management fees
3,777

6,856

6,222

16,855

4,338

—

—

21,193

Other revenues (includes Subsidized Senior Housing)
12,387

7,550

4,269

24,206

17,346

—

3,518

45,070


236,173

145,041

41,126

422,340

26,368

—

3,518

452,226

Expenses
 
 
 
 
 
 
 
 
Property operating and management
(62,450
)
(54,510
)
(20,769
)
(137,729
)
(33,626
)
—

—

(171,355
)
Real estate taxes
(26,145
)
(13,368
)
(5,002
)
(44,515
)
(1,551
)
—

—

(46,066
)
Ground rent
(5,754
)
(1,034
)
(294
)
(7,082
)
(4
)
—

—

(7,086
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(2,042
)
(48,263
)
(2,730
)
(53,035
)

(94,349
)
(68,912
)
(26,065
)
(189,326
)
(37,223
)
(48,263
)
(2,730
)
(277,542
)
Less organizational transformation and termination benefits
—

—

—

—

—

14,401

—

14,401

Write-offs of abandoned development projects
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

20,685

—

20,685

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Adjusted EBITDA attributable to Fully Consolidated Entities
$
141,824

$
76,129

$
15,061

$
233,014

$
(10,855
)
$
(13,177
)
$
788

$
209,770

Exclude:
 
 
 
 
 
 
 
 
Land sales
—

—

—

—

(12,154
)
—

—

(12,154
)
Other land development revenues
—

—

—

—

(4,144
)
—

—

(4,144
)
Cost of land sales
—

—

—

—

2,042

—

—

2,042

Other land development expenses
—

—

—

—

4,745

—

—

4,745

Corporate general and administrative expenses
—

—

—

—

—

33,862

—

33,862

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(20,685
)
—

(20,685
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(9,511
)
$
13,177

$
—

$
3,666

Net Operating Income attributable to Fully Consolidated Entities
$
141,824

$
76,129

$
15,061

$
233,014

$
(20,366
)
$
—

$
788

$
213,436

NOI exclusions per above
(3,666
)
Depreciation and Amortization
(125,629
)
Interest Expense
(67,070
)
Amortization of mortgage procurement costs
(3,081
)
Impairment of real estate
(14,564
)
Net loss on extinguishment of debt
(29,084
)
Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
(14,401
)
(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
31,700

Earnings (loss) before income taxes
$
(12,359
)
Margin % (based on Adjusted EBITDA)
60.1
%
52.5
%
36.6
%
55.2
%
(41.2
)%
0.0
%
22.4
%
46.4
%

68


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2016
Noncontrolling Interest
Office
Apartments
Retail
Total Operations
Development
Corporate
Other
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
 
Rental
$
6,378

$
17,907

$
—

$
24,285

$
1,915

$
—

$
—

$
26,200

Tenant recoveries
3,164

63

—

3,227

2

—

—

3,229

Service and management fees
1

(9
)
—

(8
)
89

—

—

81

Other revenues (includes Subsidized Senior Housing)
290

1,069

—

1,359

1,602

—

—

2,961


9,833

19,030

—

28,863

3,608

—

—

32,471

Expenses
 
 
 
 
 
 
 
 
Property operating and management
(3,172
)
(4,249
)
—

(7,421
)
(2,248
)
—

—

(9,669
)
Real estate taxes
(1,338
)
(1,983
)
—

(3,321
)
(615
)
—

—

(3,936
)
Ground rent
(160
)
(107
)
—

(267
)
—

—

—

(267
)
Other expenses (includes Subsidized Senior Housing)
—

—

—

—

(193
)
—

—

(193
)

(4,670
)
(6,339
)
—

(11,009
)
(3,056
)
—

—

(14,065
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

769

—

769

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Adjusted EBITDA attributable to Noncontrolling Interest
$
5,163

$
12,691

$
—

$
17,854

$
552

$
769

$
—

$
19,175

Exclude:
 
 
 
 
 
 
 
 
Land sales
—

—

—

—

(1,213
)
—

—

(1,213
)
Other land development revenues
—

—

—

—

(411
)
—

—

(411
)
Cost of land sales
—

—

—

—

193

—

—

193

Other land development expenses
—

—

—

—

547

—

—

547

Corporate general and administrative expenses
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(769
)
—

(769
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
(884
)
$
(769
)
$
—

$
(1,653
)
Net Operating Income attributable to Noncontrolling Interest
$
5,163

$
12,691

$
—

$
17,854

$
(332
)
$
—

$
—

$
17,522

NOI exclusions per above
1,653

Depreciation and Amortization
(9,790
)
Interest Expense
(5,038
)
Amortization of mortgage procurement costs
(459
)
Impairment of real estate
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
178

Earnings (loss) before income taxes
$
4,066

Margin % (based on Adjusted EBITDA)
52.5
%
66.7
%
0.0
%
61.9
%
15.3
%
0.0
%
0.0
%
59.1
%

69


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2016
Company Share of Unconsolidated Entities
Office
Apartments
Retail
Total Operations
Development
Corporate
Other
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
 
Rental
$
7,945

$
39,043

$
72,930

$
119,918

$
3,502

$
—

$
—

$
123,420

Tenant recoveries
1,515

200

30,456

32,171

767

—

—

32,938

Service and management fees
612

2,002

1,293

3,907

25

—

—

3,932

Other revenues (includes Subsidized Senior Housing)
(141
)
27,381

7,167

34,407

1,694

—

971

37,072


9,931

68,626

111,846

190,403

5,988

—

971

197,362

Expenses
 
 
 
 
 
 
 
 
Property operating and management
(2,954
)
(14,837
)
(27,134
)
(44,925
)
(2,363
)
—

—

(47,288
)
Real estate taxes
(1,179
)
(3,222
)
(10,960
)
(15,361
)
(548
)
—

—

(15,909
)
Ground rent
(459
)
(511
)
(3,925
)
(4,895
)
(440
)
—

—

(5,335
)
Other expenses (includes Subsidized Senior Housing)
—

(15,923
)
—

(15,923
)
(401
)
—

(455
)
(16,779
)

(4,592
)
(34,493
)
(42,019
)
(81,104
)
(3,752
)
—

(455
)
(85,311
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

755

—

755

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

(109
)
—

(109
)
2,067

—

(18
)
1,940

Adjusted EBITDA attributable to Unconsolidated Entities
$
5,339

$
34,024

$
69,827

$
109,190

$
4,303

$
755

$
498

$
114,746

Exclude:
 
 
 
 
 
 
 
 
Land sales
—

—

—

—

(1,317
)
—

—

(1,317
)
Other land development revenues
—

—

—

—

(61
)
—

—

(61
)
Cost of land sales
—

—

—

—

401

—

—

401

Other land development expenses
—

—

—

—

424

—

—

424

Corporate general and administrative expenses
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

(755
)
—

(755
)
Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

109

—

109

(2,067
)
—

18

(1,940
)
Subtotal NOI exclusions
$
—

$
109

$
—

$
109

$
(2,620
)
$
(755
)
$
18

$
(3,248
)
Net Operating Income attributable to Unconsolidated Entities
$
5,339

$
34,133

$
69,827

$
109,299

$
1,683

$
—

$
516

$
111,498

NOI exclusions per above
3,248

Depreciation and Amortization
(43,349
)
Interest Expense
(49,845
)
Amortization of mortgage procurement costs
(1,794
)
Impairment of real estate
—

Net loss on extinguishment of debt
(849
)
Net gain on disposition of interest in unconsolidated entities
12,613

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
(1,940
)
Earnings (loss) from unconsolidated entities
(29,582
)
Earnings (loss) before income taxes
$
—

Margin % (based on Adjusted EBITDA)
53.8
%
49.6
%
62.4
%
57.3
%
71.9
%
0.0
%
51.3
%
58.1
%

70


Forest City Realty Trust, Inc. and Subsidiaries
Appendix
Summary of Adjusted EBITDA and NOI by Segment - Three and Six Months Ended June 30, 2017 and 2016 (in thousands) (continued)

 
Six Months Ended June 30, 2016
Company Share of Discontinued Operations
Office
Apartments
Retail
Total Operations
Development
Corporate
Other
Total
 
(in thousands)
Revenues
 
 
 
 
 
 
 
 
Rental
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Tenant recoveries
—

—

—

—

—

—

—

—

Service and management fees
—

—

—

—

—

—

—

—

Other revenues (includes Subsidized Senior Housing)
—

—

—

—

—

—

8,136

8,136


—

—

—

—

—

—

8,136

8,136

Expenses
 
 
 
 
 
 
 
 
Property operating and management
—

—

—

—

—

—

—

—

Real estate taxes
—

—

—

—

—

—

—

—

Ground rent
—

—

—

—

—

—

—

—

Other expenses (includes Subsidized Senior Housing)
—

—

—

—

—

—

(6,938
)
(6,938
)

—

—

—

—

—

—

(6,938
)
(6,938
)
Less organizational transformation and termination benefits
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

—

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Adjusted EBITDA attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
1,198

$
1,198

Exclude:
 
 
 
 
 
 
 
 
Land sales
—

—

—

—

—

—

—

—

Other land development revenues
—

—

—

—

—

—

—

—

Cost of land sales
—

—

—

—

—

—

—

—

Other land development expenses
—

—

—

—

—

—

—

—

Corporate general and administrative expenses
—

—

—

—

—

—

—

—

Write-offs of abandoned development projects and demolition costs
—

—

—

—

—

—

—

—

Interest and other income
—

—

—

—

—

—

—

—

Earnings (loss) from unconsolidated entities in Adjusted EBITDA
—

—

—

—

—

—

—

—

Subtotal NOI exclusions
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Net Operating Income attributable to Discontinued Operations
$
—

$
—

$
—

$
—

$
—

$
—

$
1,198

$
1,198

NOI exclusions per above
—

Depreciation and Amortization
(35
)
Interest Expense
(1,738
)
Amortization of mortgage procurement costs
(21
)
Impairment of real estate
—

Net loss on extinguishment of debt
—

Net gain on disposition of interest in unconsolidated entities
—

Organizational transformation and termination benefits
—

(Earnings) loss from unconsolidated entities in Adjusted EBITDA
—

Earnings (loss) from unconsolidated entities
(1,400
)
Earnings (loss) before income taxes
$
(1,996
)
Margin % (based on Adjusted EBITDA)
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
14.7
%
14.7
%

71


Forest City Realty Trust, Inc. Reports