Attached files
file | filename |
---|---|
8-K - FORM 8-K - FOREST CITY ENTERPRISES INC | l42282e8vk.htm |
Exhibit 99.1
AT THE COMPANY
|
ON THE WEB | |
Robert OBrien
|
www.forestcity.net | |
Executive Vice President Chief Financial Officer |
||
216-621-6060 |
||
Jeff Linton |
||
Vice President Corporate Communication |
||
216-621-6060 |
FOR IMMEDIATE RELEASE
Forest City Reports Fiscal 2010 Full-Year
and Fourth-Quarter Results
and Fourth-Quarter Results
CLEVELAND, Ohio March 30, 2011 Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today
announced EBDT, net earnings and revenues for the fourth quarter and full year ended January 31,
2011.
EBDT
EBDT (Earnings Before Depreciation, Amortization and Deferred Taxes) for the full year ended
January 31, 2011, was $309.9 million, a new record for the company and a 2.9 percent increase
compared with last years $301.1 million. EBDT for the fourth quarter was $43.1 million, a 45
percent decrease compared with last years fourth-quarter EBDT of $78.4 million.
EBDT for the fourth quarter and full year 2010 were impacted by a loss on early extinguishment of
debt of $31.7 million ($0.16 on a fully diluted, per-share basis), related to inducement payments
for the early exchange of a portion of the companys 2016 Senior Notes for Class A common stock,
which occurred in the final week of the fiscal year.
On a fully diluted, per-share basis, full-year 2010 EBDT was $1.59, a 20.5 percent decrease from
the prior years $2.00 per share. Per-share EBDT for the fourth quarter of 2010 was $0.23,
compared with $0.43 per share in the fourth quarter of 2009. Per-share data reflects new Class A
common shares and the if-converted effect of convertible debt and convertible preferred stock
issued in 2009 and 2010.
For an explanation of the EBDT and EBDT per share variances, see the section titled Review and
Discussion of Results in this news release. EBDT and EBDT per share are non-Generally Accepted
Accounting Principle (GAAP) measures. A reconciliation of net earnings (the most directly
comparable GAAP measure to EBDT) to EBDT is provided in the Financial Highlights table in this news
release.
1
Net Earnings/Loss
For the full year, net earnings attributable to Forest City Enterprises, Inc., were $58.7 million,
or $0.34 per share, compared with a net loss of $30.7 million, or $0.22 per share, in 2009. For the
fourth quarter of 2010, net loss attributable to Forest City Enterprises, Inc. was $1.8 million, or
$0.01 per share, compared with net earnings of $6.2 million, or $0.04 per share in the fourth
quarter of 2009.
Net earnings in the fourth quarter were negatively impacted by impairment charges of $35.7 million
($21.4 million, net of tax), primarily related to the Village at Gulfstream Park, an unconsolidated
specialty retail center in Hallandale Beach, Florida, that opened in February, 2010. The property,
in which a Forest City subsidiary is 50 percent owner, is carried on the companys books under the
equity method of accounting. Due to a slower than anticipated ramp-up of the operations of the
property caused by the severe recessionary environment at the time of opening, it was determined
that the company was required under GAAP to recognize an impairment of its equity investment in the
property. Despite this, Forest City believes strongly in the long-term viability of the center, the
market area it serves, and the value proposition of both the existing property and the additional
future entitlements at the site.
Revenues
Revenues for the year ended January 31, 2011, were $1.18 billion, a 4.4 percent decrease compared
with prior year revenues of $1.23 billion. Fourth-quarter consolidated revenues were $297.8 million
compared with $318.5 million last year.
Liquidity
At January 31, 2011, the Company had $228.0 million ($193.4 million at full consolidation) in cash
on its balance sheet and $222.9 million of available capacity on the Companys revolving line of
credit.
Review and Discussion of Results
Exhibits illustrating factors impacting both fourth-quarter and full year 2010 EBDT results,
compared with results for the comparable periods in 2009, are available on the Investor Relations
page of the Companys web site: www.forestcity.net, and are included in the companys year-end 2010
Supplemental Package furnished to the Securities and Exchange Commission.
Fourth-Quarter EBDT
In the fourth quarter, total EBDT for the company was $43.1 million, down from $78.4 million in the
fourth quarter of 2009.
The largest impact on fourth quarter EBDT was the previously referenced loss on early
extinguishment of debt of $31.7 million ($0.16 on a per-share basis), related to inducement
payments for the early exchange of a portion of the companys 2016 Senior Notes for Class A common
stock. The exchange, which occurred in the final week of Forest Citys 2010 fiscal year, moved $110
million from debt to equity on the companys balance sheet.
2
In operating results, EBDT from the Commercial and Residential Segments combined (also referred to
as the rental properties portfolio) decreased by $11.5 million pre-tax. The portfolio was
positively impacted by increased hedging and other financial income of $8.4 million, increased gain
on early extinguishment of nonrecourse mortgage debt of $5.1 million and the ramp up of new
properties of $3.0 million. These increases were offset by decreased income recognized on the sale
of state and federal Historic Preservation, Brownfield and New Market tax credits of $12.1 million,
the 2009 income from Housing and Urban Development (HUD) replacement reserve of $11.0 million, and
reduced pre-tax EBDT from properties sold of $6.2 million.
The Nets provided a fourth quarter pre-tax EBDT increase of $13.3 million due to the decrease in
the companys allocated losses.
Full-year EBDT
For the year, total EBDT was $309.9 million, a new record for the company, and up from $301.1
million in 2009.
As with EBDT results for the fourth quarter, EBDT for the year was impacted by increased loss on
early extinguishment of corporate debt of $28.2 million (pre-tax), primarily related to the
previously mentioned inducement payments for the early exchange of a portion of the companys 2016
Senior Notes for Class A common stock.
For fiscal 2010, pre-tax EBDT from the Commercial and Residential Segments combined decreased $16.7
million pre-tax. Results from the portfolio were favorably impacted by lower write-offs of
abandoned development projects of $16.3 million, increased NOI on the mature portfolio of $12.9
million, and the ramp up of new properties of $12.0 million. These increases were offset by
reduced pre-tax EBDT from properties sold of $24.2 million, reduced gain on early extinguishment of
nonrecourse mortgage debt of $16.3 million primarily due to fewer opportunities to buy back
nonrecourse mortgage debt at a discount, decreased income from the HUD replacement reserve of $7.7
million, decreased EBDT from military housing of $10.7 million due to lower construction and
development fee income as anticipated, and increased interest expense on the mature portfolio of
$10.7 million.
Pre-tax EBDT from the Land Segment decreased $7.4 million, primarily due to the 2009 gain on early
extinguishment of nonrecourse mortgage debt of $11.3 million, partially offset by increased sales.
The Nets provided a pre-tax EBDT increase of $62.9 million, primarily due to the gain on
disposition of partial interest in the Nets of $31.4 million and decreased losses of $31.5 million
due to a decrease in Forest Citys share of allocated losses as a result of new operating
agreements entered into upon sale of the controlling interest of the team on May 12, 2010.
3
Corporate interest expense decreased by $17.0 million, primarily as a result of the reduction in
the strike rate for corporate interest rate swaps and the retirement of various senior notes in
exchange for preferred stock. Finally, EBDT was impacted by a smaller tax benefit of $11.8 million
compared to prior year.
Commentary
Were pleased with our fiscal 2010 results overall, said Charles A. Ratner, Forest City president
and chief executive officer. Total EBDT reached a new record level as our portfolio of rental
properties continued to perform well throughout the year. We opened new signature properties,
primarily in core markets, which collectively are achieving more than 175 basis points of spread to
their anticipated cost of permanent debt, creating real value for the company and shareholders. We
also achieved major milestones in our under-construction pipeline. In addition, we took advantage
of capital market conditions to further de-leverage our balance sheet, and selectively monetized
assets in our portfolio to capture value and generate liquidity. Notably, with the start of
construction at Foundry Lofts at The Yards in Washington, D.C., we also began the process of
unlocking embedded entitlement opportunities to fuel future growth.
Absent the impact of our debt-for-stock exchange transaction in the last week of the 2010 fiscal
year, our fourth quarter and full-year EBDT results would have been significantly higher. Despite
this, our decision to take advantage of the opportunity for early conversion of $110 million of
debt to equity was the right one, and we will continue to make improving our balance sheet a high
priority going forward.
Just this week, we made a significant announcement that continues our efforts to further
strengthen our balance sheet and position the company for future growth. On Tuesday, we announced
new joint ventures with investor Madison International Realty for ownership of a portfolio of 15 of
our mature New York City metropolitan area specialty retail and entertainment centers. The
transaction equates to a 6.9 percent cap rate and speaks to the quality of these assets and the
significant value embedded in our portfolio.
On March 1, 2011, we announced our senior-leadership succession plan, under which I will become
chairman of the board, and David LaRue will become president and chief executive officer, effective
with our annual meeting of shareholder in June of this year. Current co-chairmen of the board,
Albert Ratner and Sam Miller, will become co-chairmen emeritus at that time, and will remain active
with the company, but will no longer serve on the board. The succession plan has been very well
received by our shareholders, associates, lenders, business partners and other constituencies.
4
NOI, Occupancies and Rent
For the full year 2010, overall comparable property net operating income (NOI) increased 2.1
percent, with increases of 2.1 percent in office, 2.2 percent in retail and 2.7 percent in
apartments. In the fourth quarter of 2010, comparable property NOI increased 1.1 percent compared
with the prior year, with increases of 0.2 percent in office and 3.4 percent in retail, and a
decrease of 0.8 percent in apartments. The fourth quarter decline in apartments was primarily due
to a decrease in comparable property NOI in the senior-housing component of the portfolio as a
result of the timing of receipt of government subsidies, which offset an increase in conventional
apartments.
Comparable property NOI, defined as NOI from properties operated for the full year in both 2010 and
2009, is a non-GAAP financial measure and is based on the pro-rata consolidation method, also a
non-GAAP financial measure. Included in this release is a schedule that presents comparable
property NOI on the full consolidation method.
Comparable occupancies at the end of 2010 were 91.2 percent in the retail portfolio, an increase of
1.1 percentage points compared with 2009. In the office portfolio, comparable occupancies
decreased to 88.4 percent from 90.0 percent in 2009. The decrease in the office portfolio was due
primarily to lease expirations at two office buildings in New York, partially offset by occupancy
gains at the Science + Technology Park at Johns Hopkins in Baltimore.
In the residential portfolio, comparable average occupancies were 94.7 percent, compared with 92.1
percent in 2009, and comparable property net rental income (defined as total potential rent, less
vacancies and concessions) ended the year at 91.6 percent, up 1.9 percentage points from 2009. In
the companys regional malls, leasing spreads decreased 5.8 percent for the year, primarily related
to the companys strategic decision to prioritize occupancy and co-tenancy in exchange for
short-term rent concessions in selected lease rollovers. In the office portfolio, leasing spreads
increased 13.8 percent, reflecting strength in lease renewals in the life-science segment of
companys office portfolio. Regional mall sales averaged $399 per square foot on a rolling
12-month basis, while comparable regional mall sales increased 2.7 percent, compared with results
for 2009.
Debt Maturities and Financing Activity
During 2010, Forest City closed on transactions totaling $1.2 billion at the Companys pro-rata
share ($1.3 billion at full consolidation) in nonrecourse mortgage financings, including $272
million at pro-rata ($231 million at full consolidation) in refinancing, $196 million of
development projects ($593 million at full consolidation) and $683 million ($521 million at full
consolidation) in loan extensions and additional fundings. During the fourth quarter, the Company
closed 12 loan transactions totaling $132 million at pro-rata ($107 million at full consolidation).
5
Since January 31, 2011, the Company has addressed, through closed loans and committed financings,
$276.6 million at its pro-rata share ($296.7 million at full consolidation) of the $1.1 billion at
pro-rata and full consolidation of net maturities (inclusive of notes payable) coming due in fiscal
year 2011.
As of January 31, 2011 the Companys weighted average cost of mortgage debt decreased to 5.07
percent from 5.17 percent at January 31, 2010, primarily due to a decrease in both fixed-rate and
variable-rate mortgage debt. Fixed-rate mortgage debt, which represented 71 percent of the
Companys total nonrecourse mortgage debt, and is inclusive of interest rate swaps, decreased from
6.05 percent at January 31, 2010, to 5.97 percent at January 31, 2011. Variable-rate mortgage debt
decreased from 3.02 percent at January 31, 2010, to 2.87 percent at January 31, 2011. (All interest
rates are at full consolidation.)
We continue to see gradual improvement in credit market conditions and availability of capital at
attractive rates to finance operating properties, Ratner said. Throughout the recession and into
the recovery, we have consistently demonstrated our ability to meet the financing needs of the
portfolio, while retaining the exclusive use of non-recourse mortgage debt at the property level.
This is a testament to the quality of our real estate portfolio, the long-term relationships weve
built with lenders and the skill and perseverance of our finance teams.
Project Updates
Openings in 2010
During 2010, Forest City opened four projects, adding $512.3 million of cost at the Companys
pro-rata share ($339.7 million on a full-consolidation basis). Openings included:
| East River Plaza, a 527,000-square-foot big-box retail center the first of its kind in Manhattan. The center, which is currently 90 percent leased, includes the first Costco and Target stores in Manhattan, as well as Best Buy, Marshalls, PetSmart, Old Navy, Bobs Discount Furniture and others. The center has brought a new type of shopping experience to many New Yorkers, and the majority of tenants report strong sales and customer traffic. |
| The East 4th and West 4th office buildings at the mixed-use Waterfront Station project in Southwest Washington, D.C. The two buildings total 631,000 square feet of office and ground-level retail space. The office component is fully leased to the District of Columbia for governmental offices, and 89 percent of the retail space is also leased. |
| The Village at Gulfstream Park, a 511,000-square-foot mixed-use retail center in Hallandale Beach, Florida. The center, which is anchored by Gulfstream Park Racetrack and Casino, includes 422,000 square feet of retail space and 89,000 square feet of Class A office space. Currently, 80 percent of the center is leased. Restaurant and home furnishings tenants have consistently reported strong sales since opening, while results for soft goods tenants have been weaker. As |
6
previously referenced, as a result of the recession and a slower than anticipated ramp-up for the property, the company recognized a fourth quarter impairment of its equity investment. Forest City is committed to the market, to the long-term value proposition of the center and to the additional future entitlements at the site. |
| Presidio Landmark, a 161-unit apartment project in the Presidio National Park in San Francisco. The projects two components are a 154-unit adaptive re-use of a historically significant former U.S. Health Service hospital, and a small number of new, three-story townhomes, all built to a high standard of sustainability. Lease-up began in September, 2010 and the project is currently 38 percent leased. |
Under Construction and 2011 openings
At the end of fiscal 2010, Forest City had four projects under construction with a total project
cost of $1.7 billion at the Companys pro-rata share ($2.7 billion at full consolidation). Three of
the projects are in New York: 8 Spruce Street (formerly Beekman), a 903-unit residential tower in
Manhattan, Westchesters Ridge Hill, a mixed-use retail center in Yonkers, New York, and the
Barclays Center arena, the future home of the NBA Nets in Brooklyn. The fourth is Foundry Lofts at
The Yards in Washington, D.C.
At 8 Spruce Street, the Frank Gehry-designed apartment high rise in lower Manhattan, leasing
activity and initial tenant move-ins are underway for the lower floors, while interior build-out
continues on the upper floors. The property has received a tremendous reception from New Yorkers
as well as national and international media, including praise from prominent architecture critics.
Leasing activity began on February 18, 2011, and leases have already been executed for more than 50
units with 17 units already occupied. Full lease-up of the 76-story building, which has a total of
903 market-rate units, is expected to extend well into 2012. Project costs are in line with the
companys budget and the rental market in the Lower Manhattan submarket continues to be very
strong.
Leasing efforts and construction continue at Westchesters Ridge Hill, the companys mixed-use
retail project in Yonkers, New York, with commitments currently for 45 percent of the retail space.
In December, 2010, Forest Citys announcement that that Lord & Taylor would anchor the center with
a new, 80,000-square-foot store generated considerable interest from retailers and has added
momentum to leasing efforts. The center is expected to open in phases beginning in the second
quarter of this year, culminating in the Lord & Taylor opening in February, 2012. Other committed
tenants include National Amusements, Whole Foods, Dicks Sporting Goods, REI, and Cheesecake
Factory, among others, as well as WESTMED Medical Group as an anchor office tenant. The market
area served by Westchesters Ridge Hill has among the most attractive retail demographics of any
market in the nation.
7
Work continues at the Barclays Center arena at Atlantic Yards, with steel now rising several
stories above ground level at the site. With the building taking shape, the reality of major
league sports returning to Brooklyn has helped generate additional momentum and enthusiasm for the
project. Approximately 55 percent of forecasted contractually obligated revenues are currently
under contract for the arena, which is expected to open in late summer 2012.
Construction continues on Foundry Lofts, the initial residential building at The Yards mixed-use
project in Washington, D.C. The apartment building is on track to be completed and commence
lease-up in the third quarter of 2011. This adaptive reuse of a former Navy Yard industrial
building will offer 170 loft-style apartments, including 34 two-level penthouse units, together
with a small amount of street-level retail space. The Washington, D.C. real estate market
continues to be one of the strongest in the country.
Year-End Summary and Outlook
With our fiscal 2010 results, we mark the end of our second full year of successfully navigating
the worst economic and real estate market conditions most of us have ever experienced, Ratner
said. As a result, we believe Forest City is a stronger company today, with a much-improved
balance sheet, dramatically reduced development risk, and a fresh sense of optimism about the
future.
Our strong operating portfolio and additional high-quality projects under construction, together
with our strategic focus on core urban centers and substantial in-place entitlement in large
projects in New York, Washington, Denver and other key markets, positions us well to take advantage
of future growth opportunities. Though we retain an appropriate measure of caution in our outlook,
we are confident in our ability to continue to build long-term value for our shareholders,
associates, business partners and the communities where we live and work.
Corporate Description
Forest City Enterprises, Inc. is a NYSE-listed national real estate company with $11.8 billion in
total assets. The Company is principally engaged in the ownership, development, management and
acquisition of commercial and residential real estate and land throughout the United States. For
more information, visit www.forestcity.net.
Supplemental Package
Please refer to the Investor Relations section of the Companys website at www.forestcity.net for a
Supplemental Package, which the Company will also furnish to the Securities and Exchange Commission
(SEC) on Form 8-K. This Supplemental Package includes operating and financial information for the
year ended January 31, 2011, with reconciliations of non-GAAP financial measures, such as EBDT,
comparable NOI and pro-rata financial statements, to their most directly comparable GAAP financial
measures.
8
EBDT
The Company uses an additional measure, along with net earnings, to report its operating results.
This non-GAAP measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes
(EBDT), is not a measure of operating results or cash flows from operations as defined by GAAP
and may not be directly comparable to similarly titled measures reported by other companies.
The Company believes that EBDT provides additional information about its core operations and, along
with net earnings, is necessary to understand its operating results. EBDT is used by the chief
operating decision maker and management in assessing operating performance and to consider capital
requirements and allocation of resources by segment and on a consolidated basis. The Company
believes EBDT is important to investors because it provides another method for the investor to
measure its long-term operating performance, as net earnings can vary from year to year due to
property dispositions, acquisitions and other factors that have a short-term impact.
EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of
rental properties, divisions and other investments (net of tax); ii) the adjustment to recognize
rental revenues and rental expense using the straight-line method; iii) non-cash charges for real
estate depreciation, amortization, amortization of mortgage procurement costs and deferred income
taxes; iv) preferred payment which is classified as non-controlling interest expense on the
Companys Consolidated Statements of Operations; v) impairment of real estate (net of tax); vi)
extraordinary items (net of tax); and vii) cumulative or retrospective effect of change in
accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment
equals net earnings.
EBDT is reconciled to net earnings (loss), the most comparable financial measure calculated in
accordance with GAAP, in the table titled Financial Highlights below and in the Companys
Supplemental Package, which the Company will also furnish to the SEC on Form 8-K. The adjustment to
recognize rental revenues and rental expenses on the straight-line method is excluded because it is
managements opinion that rental revenues and expenses should be recognized when due from the
tenants or due to the landlord. The Company excludes depreciation and amortization expense related
to real estate operations from EBDT because it believes the values of its properties, in general,
have appreciated over time in excess of their original cost. Deferred taxes from real estate
operations, which are the result of timing differences of certain net expense items deducted in a
future year for federal income tax purposes, are excluded until the year in which they are
reflected in the Companys current tax provision. The impairment of real estate is excluded from
EBDT because it varies from year to year based on factors unrelated to the Companys overall
financial performance and is related to the ultimate gain on dispositions of operating properties.
The Companys EBDT may not be directly comparable to similarly titled measures reported by other
companies.
9
Pro-Rata Consolidation Method
This press release contains certain financial measures prepared in accordance with GAAP under the
full consolidation accounting method and certain financial measures prepared in accordance with the
pro-rata consolidation method (non-GAAP). The Company presents certain financial amounts under the
pro-rata method because it believes this information is useful to investors as this method reflects
the manner in which the Company operates its business. In line with industry practice, the Company
has made a large number of investments in which its economic ownership is less than 100 percent as
a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, the
Company generally presents its investments proportionate to its economic share of ownership. Under
GAAP, the full consolidation method is used to report partnership assets and liabilities
consolidated at 100 percent if deemed to be under its control or if the Company is deemed to be the
primary beneficiary of the variable interest entities (VIE), even if its ownership is not 100
percent. The Company provides reconciliations from the full consolidation method to the pro-rata
consolidation method in the exhibits below and throughout its Supplemental Package, which the
Company will also furnish to the SEC on Form 8-K.
Safe Harbor Language
Statements made in this news release that state the Companys or managements intentions, hopes,
beliefs, expectations or predictions of the future are forward-looking statements. The Companys
actual results could differ materially from those expressed or implied in such forward-looking
statements due to various risks, uncertainties and other factors. Risks and factors that could
cause actual results to differ materially from those in the forward-looking statements include, but
are not limited to, the impact of current lending and capital market conditions on our liquidity,
ability to finance or refinance projects and repay our debt, the impact of the current economic
environment on our ownership, development and management of our real estate portfolio, general real
estate investment and development risks, vacancies in our properties, further downturns in the
housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of
tenants, anchor store consolidations or closings, international activities, the impact of terrorist
acts, risks associated with an investment in a professional sports team, our substantial debt
leverage and the ability to obtain and service debt, the impact of restrictions imposed by our
credit facility and senior debt, exposure to hedging agreements, the level and volatility of
interest rates, the continued availability of tax-exempt government financing, the impact of credit
rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure
of our insurance carriers, environmental liabilities, conflicts of interest, risks associated with
the sale of tax credits, risks associated with developing and managing properties in partnership
with others, the ability to maintain effective internal controls, compliance with governmental
regulations, increased legislative and regulatory scrutiny of the financial services industry,
volatility in the market price of our publicly traded securities, inflation risks, litigation
risks, as well as other risks listed from time to time in the Companys SEC filings, including but
not limited to, the Companys annual and quarterly reports.
10
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Year Ended January 31, 2011 and 2010
(dollars in thousands, except per share data)
Financial Highlights
Year Ended January 31, 2011 and 2010
(dollars in thousands, except per share data)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
January 31, | Increase (Decrease) | January 31, | Increase (Decrease) | |||||||||||||||||||||||||||||
2011 | 2010 | Amount | Percent | 2011 | 2010 | Amount | Percent | |||||||||||||||||||||||||
Operating Results: |
||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
$ | (24,256 | ) | $ | 17,132 | $ | (41,388 | ) | $ | 102,268 | $ | (10,780 | ) | $ | 113,048 | |||||||||||||||||
Discontinued operations, net of tax |
27,858 | (10,520 | ) | 38,378 | (16,258 | ) | (13,261 | ) | (2,997 | ) | ||||||||||||||||||||||
Net earnings (loss) |
3,602 | 6,612 | (3,010 | ) | 86,010 | (24,041 | ) | 110,051 | ||||||||||||||||||||||||
Earnings from continuing operations attributable to noncontrolling interests |
(5,435 | ) | (525 | ) | (4,910 | ) | (22,974 | ) | (6,727 | ) | (16,247 | ) | ||||||||||||||||||||
Earnings from discontinued operations attributable to noncontrolling interests (1) |
| 114 | (114 | ) | (4,376 | ) | 117 | (4,493 | ) | |||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. |
$ | (1,833 | ) | $ | 6,201 | $ | (8,034 | ) | $ | 58,660 | $ | (30,651 | ) | $ | 89,311 | |||||||||||||||||
Preferred dividends |
(3,850 | ) | | (3,850 | ) | (11,807 | ) | | (11,807 | ) | ||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders |
$ | (5,683 | ) | $ | 6,201 | $ | (11,884 | ) | $ | 46,853 | $ | (30,651 | ) | $ | 77,504 | |||||||||||||||||
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) |
$ | 43,149 | $ | 78,407 | $ | (35,258 | ) | (45.0 | %) | $ | 309,875 | $ | 301,106 | $ | 8,769 | 2.9 | % | |||||||||||||||
Reconciliation of Net Earnings (Loss) to Earnings Before Depreciation,
Amortization and Deferred Taxes (EBDT) (2): |
||||||||||||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. |
$ | (1,833 | ) | $ | 6,201 | $ | (8,034 | ) | $ | 58,660 | $ | (30,651 | ) | $ | 89,311 | |||||||||||||||||
Depreciation and amortization Real Estate Groups (7) |
73,379 | 75,433 | (2,054 | ) | 286,042 | 293,869 | (7,827 | ) | ||||||||||||||||||||||||
Amortization of mortgage procurement costs Real Estate Groups (7) |
3,617 | 3,850 | (233 | ) | 14,341 | 15,583 | (1,242 | ) | ||||||||||||||||||||||||
Deferred income tax expense Real Estate Groups (8) |
(8,772 | ) | (10,558 | ) | 1,786 | 36,432 | (12,852 | ) | 49,284 | |||||||||||||||||||||||
Deferred income tax expense Non-Real Estate Groups (8) |
||||||||||||||||||||||||||||||||
Gain on disposition of other investments |
| 454 | (454 | ) | | 454 | (454 | ) | ||||||||||||||||||||||||
Current income tax expense on non-operating earnings: (8) |
||||||||||||||||||||||||||||||||
Net gain on disposition of partial interests in rental properties |
5,037 | | 5,037 | 37,483 | | 37,483 | ||||||||||||||||||||||||||
Gain on disposition included in discontinued operations |
5,000 | | 5,000 | 4,902 | 754 | 4,148 | ||||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
495 | 27,471 | (26,976 | ) | 3,926 | 27,674 | (23,748 | ) | ||||||||||||||||||||||||
Straight-line rent adjustment (4) |
(7,913 | ) | (3,689 | ) | (4,224 | ) | (18,160 | ) | (13,242 | ) | (4,918 | ) | ||||||||||||||||||||
Preference payment (6) |
585 | 585 | | 2,341 | 2,341 | | ||||||||||||||||||||||||||
Impairment of consolidated real estate, net of minority interest |
| 5,783 | (5,783 | ) | 5,277 | 8,907 | (3,630 | ) | ||||||||||||||||||||||||
Impairment of unconsolidated real estate |
35,714 | 1,693 | 34,021 | 72,459 | 36,356 | 36,103 | ||||||||||||||||||||||||||
Net gain on disposition of partial interests in rental properties |
| | | (202,878 | ) | | (202,878 | ) | ||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
(15,633 | ) | (45,263 | ) | 29,630 | (23,461 | ) | (49,761 | ) | 26,300 | ||||||||||||||||||||||
Discontinued operations: (1) |
||||||||||||||||||||||||||||||||
Gain on disposition of rental properties |
(46,527 | ) | (1,172 | ) | (45,355 | ) | (51,303 | ) | (5,720 | ) | (45,583 | ) | ||||||||||||||||||||
Impairment of real estate |
| 17,619 | (17,619 | ) | 79,603 | 27,394 | 52,209 | |||||||||||||||||||||||||
Noncontrolling interest Gain on disposition |
| | | 4,211 | | 4,211 | ||||||||||||||||||||||||||
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) |
$ | 43,149 | $ | 78,407 | $ | (35,258 | ) | (45.0 | %) | $ | 309,875 | $ | 301,106 | $ | 8,769 | 2.9 | % | |||||||||||||||
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) (3) (5) |
$ | 0.23 | $ | 0.43 | $ | (0.20 | ) | (46.5 | %) | $ | 1.59 | $ | 2.00 | $ | (0.41 | ) | (20.5 | %) | ||||||||||||||
Diluted Earnings per Common Share: |
||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
$ | (0.16 | ) | $ | 0.11 | $ | (0.27 | ) | $ | 0.59 | $ | (0.08 | ) | $ | 0.67 | |||||||||||||||||
Discontinued operations, net of tax |
0.18 | (0.07 | ) | 0.25 | (0.09 | ) | (0.09 | ) | | |||||||||||||||||||||||
Net earnings (loss) |
0.02 | 0.04 | (0.02 | ) | 0.50 | (0.17 | ) | 0.67 | ||||||||||||||||||||||||
Earnings from continuing operations attributable to noncontrolling interests |
(0.03 | ) | | (0.03 | ) | (0.13 | ) | (0.04 | ) | (0.09 | ) | |||||||||||||||||||||
Earnings from discontinued operations attributable to noncontrolling interests (1) |
| | | (0.03 | ) | (0.01 | ) | (0.02 | ) | |||||||||||||||||||||||
Net earnings attributable to noncontrolling interests |
(0.03 | ) | | (0.03 | ) | (0.16 | ) | (0.05 | ) | (0.11 | ) | |||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. |
$ | (0.01 | ) | $ | 0.04 | $ | (0.05 | ) | $ | 0.34 | $ | (0.22 | ) | $ | 0.56 | |||||||||||||||||
Preferred dividends |
(0.03 | ) | | (0.03 | ) | (0.07 | ) | | (0.07 | ) | ||||||||||||||||||||||
Interest on convertible debt |
| | | 0.02 | | 0.02 | ||||||||||||||||||||||||||
Preferred distribution on Class A Common Units |
| | | 0.01 | | 0.01 | ||||||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders |
$ | (0.04 | ) | $ | 0.04 | $ | (0.08 | ) | $ | 0.30 | $ | (0.22 | ) | $ | 0.52 | |||||||||||||||||
Basic weighted average shares outstanding (5) |
155,643,554 | 155,324,478 | 319,076 | 155,485,243 | 139,825,349 | 15,659,894 | ||||||||||||||||||||||||||
Diluted weighted average shares outstanding (5) |
202,691,428 | 187,453,699 | 15,237,729 | 200,909,266 | 151,890,543 | 49,018,723 | ||||||||||||||||||||||||||
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Year Ended January 31, 2011 and 2010
(dollars in thousands)
Financial Highlights
Year Ended January 31, 2011 and 2010
(dollars in thousands)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
January 31, | Increase (Decrease) | January 31, | Increase (Decrease) | |||||||||||||||||||||||||||||
2011 | 2010 | Amount | Percent | 2011 | 2010 | Amount | Percent | |||||||||||||||||||||||||
Operating Earnings (a non-GAAP financial measure) and Reconciliation to Net Earnings: |
||||||||||||||||||||||||||||||||
Revenues from real estate operations |
||||||||||||||||||||||||||||||||
Commercial Group |
$ | 231,626 | $ | 248,691 | $ | (17,065 | ) | $ | 934,045 | $ | 954,669 | $ | (20,624 | ) | ||||||||||||||||||
Residential Group |
53,597 | 63,063 | (9,466 | ) | 211,485 | 257,077 | (45,592 | ) | ||||||||||||||||||||||||
Land Development Group |
12,567 | 6,776 | 5,791 | 32,131 | 20,267 | 11,864 | ||||||||||||||||||||||||||
The Nets |
| | | | | | ||||||||||||||||||||||||||
Corporate Activities |
| | | | | | ||||||||||||||||||||||||||
Total Revenues |
297,790 | 318,530 | (20,740 | ) | (6.5 | %) | 1,177,661 | 1,232,013 | (54,352 | ) | (4.4 | %) | ||||||||||||||||||||
Operating expenses |
(182,787 | ) | (181,762 | ) | (1,025 | ) | (685,783 | ) | (704,552 | ) | 18,769 | |||||||||||||||||||||
Interest expense |
(71,105 | ) | (90,089 | ) | 18,984 | (315,340 | ) | (343,146 | ) | 27,806 | ||||||||||||||||||||||
Gain (loss) on early extinguishment of debt |
(31,688 | ) | (1,396 | ) | (30,292 | ) | (21,035 | ) | 36,569 | (57,604 | ) | |||||||||||||||||||||
Amortization of mortgage procurement costs (7) |
(3,418 | ) | (3,255 | ) | (163 | ) | (13,487 | ) | (13,709 | ) | 222 | |||||||||||||||||||||
Depreciation and amortization (7) |
(61,399 | ) | (65,911 | ) | 4,512 | (243,847 | ) | (260,223 | ) | 16,376 | ||||||||||||||||||||||
Interest and other income |
17,862 | 30,080 | (12,218 | ) | 52,826 | 53,999 | (1,173 | ) | ||||||||||||||||||||||||
Gain on disposition of partial interests in other investment Nets |
| | | 55,112 | | 55,112 | ||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, including impairment |
(12,742 | ) | 30,087 | (42,829 | ) | (30,194 | ) | (15,053 | ) | (15,141 | ) | |||||||||||||||||||||
Impairment of unconsolidated real estate |
35,714 | 1,693 | 34,021 | 72,459 | 36,356 | 36,103 | ||||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
(15,633 | ) | (45,263 | ) | 29,630 | (23,461 | ) | (49,761 | ) | 26,300 | ||||||||||||||||||||||
Revenues and interest income from discontinued operations (1) |
2,169 | 5,804 | (3,635 | ) | 17,986 | 30,691 | (12,705 | ) | ||||||||||||||||||||||||
Expenses from discontinued operations (1) |
(1,843 | ) | (6,468 | ) | 4,625 | (17,661 | ) | (30,604 | ) | 12,943 | ||||||||||||||||||||||
Operating loss (a non-GAAP financial measure) |
(27,080 | ) | (7,950 | ) | (19,130 | ) | 25,236 | (27,420 | ) | 52,656 | ||||||||||||||||||||||
Income tax expense (8) |
23,231 | (13,369 | ) | 36,600 | (69,720 | ) | 12,229 | (81,949 | ) | |||||||||||||||||||||||
Income tax expense from discontinued operations (1) (8) |
(18,995 | ) | 6,591 | (25,586 | ) | 11,717 | 8,326 | 3,391 | ||||||||||||||||||||||||
Income tax expense on non-operating earnings items (see below) |
9,831 | 8,275 | 1,556 | 44,598 | (6,662 | ) | 51,260 | |||||||||||||||||||||||||
Operating earnings (loss), net of tax (a non-GAAP financial measure) |
(13,013 | ) | (6,453 | ) | (6,560 | ) | 11,831 | (13,527 | ) | 25,358 | ||||||||||||||||||||||
Impairment of consolidated real estate |
| (5,783 | ) | 5,783 | (6,803 | ) | (8,907 | ) | 2,104 | |||||||||||||||||||||||
Impairment of unconsolidated real estate |
(35,714 | ) | (1,693 | ) | (34,021 | ) | (72,459 | ) | (36,356 | ) | (36,103 | ) | ||||||||||||||||||||
Gain on disposition of unconsolidated entities |
15,633 | 45,263 | (29,630 | ) | 23,461 | 49,761 | (26,300 | ) | ||||||||||||||||||||||||
Gain (loss) on disposition of partial interest in rental properties |
| | | 202,878 | | 202,878 | ||||||||||||||||||||||||||
Gain (loss) on disposition of rental properties included in discontinued operations (1) |
46,527 | 1,172 | 45,355 | 51,303 | 5,720 | 45,583 | ||||||||||||||||||||||||||
Impairment of real estate included in discontinued operations (1) |
| (17,619 | ) | 17,619 | (79,603 | ) | (27,394 | ) | (52,209 | ) | ||||||||||||||||||||||
Income tax benefit (expense) on non-operating earnings: (8) |
||||||||||||||||||||||||||||||||
Impairment of consolidated real estate |
| 2,244 | (2,244 | ) | 2,048 | 3,455 | (1,407 | ) | ||||||||||||||||||||||||
Impairment of unconsolidated real estate |
14,277 | 656 | 13,621 | 28,527 | 14,100 | 14,427 | ||||||||||||||||||||||||||
Gain on disposition of partial interest in rental properties |
825 | | 825 | (77,852 | ) | | (77,852 | ) | ||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
(6,063 | ) | (17,554 | ) | 11,491 | (9,099 | ) | (19,299 | ) | 10,200 | ||||||||||||||||||||||
Gain on disposition of rental properties included in discontinued operations |
(18,870 | ) | (454 | ) | (18,416 | ) | (19,094 | ) | (2,218 | ) | (16,876 | ) | ||||||||||||||||||||
Impairment of real estate included in discontinued operations |
| 6,833 | (6,833 | ) | 30,872 | 10,624 | 20,248 | |||||||||||||||||||||||||
Income tax expense on non-operating earnings (see above) |
(9,831 | ) | (8,275 | ) | (1,556 | ) | (44,598 | ) | 6,662 | (51,260 | ) | |||||||||||||||||||||
Net earnings (loss) |
3,602 | 6,612 | (3,010 | ) | 86,010 | (24,041 | ) | 110,051 | ||||||||||||||||||||||||
Noncontrolling Interests |
||||||||||||||||||||||||||||||||
Earnings from continuing operations attributable to noncontrolling interests |
(5,435 | ) | (525 | ) | (4,910 | ) | (22,974 | ) | (6,727 | ) | (16,247 | ) | ||||||||||||||||||||
Earnings from discontinued operations attributable to noncontrolling interests (1) |
||||||||||||||||||||||||||||||||
Operating earnings |
| 114 | (114 | ) | (165 | ) | 117 | (282 | ) | |||||||||||||||||||||||
Impairment of Real Estate |
| | | | | | ||||||||||||||||||||||||||
Gain on disposition of rental properties |
| | | (4,211 | ) | | (4,211 | ) | ||||||||||||||||||||||||
| 114 | (114 | ) | (4,376 | ) | 117 | (4,493 | ) | ||||||||||||||||||||||||
Noncontrolling Interests |
(5,435 | ) | (411 | ) | (5,024 | ) | (27,350 | ) | (6,610 | ) | (20,740 | ) | ||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. |
$ | (1,833 | ) | $ | 6,201 | $ | (8,034 | ) | $ | 58,660 | $ | (30,651 | ) | $ | 89,311 | |||||||||||||||||
Preferred dividends |
(3,850 | ) | | (3,850 | ) | (11,807 | ) | | (11,807 | ) | ||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders |
$ | (5,683 | ) | $ | 6,201 | $ | (11,884 | ) | $ | 46,853 | $ | (30,651 | ) | $ | 77,504 | |||||||||||||||||
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Year Ended January 31, 2011 and 2010
(in thousands)
Financial Highlights
Year Ended January 31, 2011 and 2010
(in thousands)
1) All earnings of properties which have been sold or are held for sale are reported as
discontinued operations assuming no significant continuing involvement.
2) The Company uses an additional measure, along with net earnings, to report its operating
results. This measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes
(EBDT), is not a measure of operating results as defined by generally accepted accounting
principles and may not be directly comparable to similarly-titled measures reported by other
companies. The Company believes that EBDT provides additional information about its operations, and
along with net earnings, is necessary to understand its operating results. EBDT is defined as net
earnings excluding the following items: i) gain (loss) on disposition of operating properties,
divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and
rental expense using the straight-line method; iii) non-cash charges for real estate depreciation,
amortization (including amortization of mortgage procurement costs) and deferred income taxes; iv)
preferred payment classified as noncontrolling interest expense on the Companys Consolidated
Statement of Earnings; v) impairment of real estate (net of tax); vi) extraordinary items (net of
tax); and vii) cumulative or retrospective effect of change in accounting principle (net of tax).
See our discussion of EBDT in the news release.
3) For the three and twelve months ended January 31, 2011, the calculation of EBDT per share
under the if-converted method requires an adjustment for interest of $2,631 and $10,551,
respectively, related to the 3.625% Puttable Senior Notes and the 5% Convertible Senior Notes.
Therefore EBDT for purposes of calculating per share data is $45,780 and $320,426 for the
three and twelve months ended January 31, 2011, respectively.
For the three and twelve months ended January 31, 2010, the calculation of EBDT per share under
the if-converted method requires an adjustment for interest of $2,641 and $3,051, respectively,
related to the 3.625% Puttable Senior Notes and the 5% Convertible Senior Notes. Therefore EBDT
for purposes of calculating per share data is $81,048 and $304,157 for the three and twelve months
ended January 31, 2010, respectively.
4) The Company recognizes minimum rents on a straight-line basis over the term of the related lease
pursuant to accounting for leases. The straight-line rent adjustment is recorded as an increase or
decrease to revenue or operating expense from Forest City Rental Properties Corporation, a
wholly-owned subsidiary of Forest City Enterprises, Inc., with the applicable offset to either
accounts receivable or accounts payable, as appropriate.
5) For the three months ended January 31, 2011, the effect of 47,047,874 shares of dilutive
securities were not included in the computation of diluted earnings per share because their
effect is anti-dilutive to the loss from continuing operations. (Since these shares are
dilutive for the computation of EBDT per share for the three months ended
January 31, 2011, diluted weighted average shares outstanding of 202,691,428 were used to
arrive at $0.23/share.)
For the twelve months ended January 31, 2011, weighted average shares issuable upon the conversion
of preferred stock and 2016 Notes of 13,115,165 and 14,356,215, respectively, are not included in
the calculation of earnings per share because they are anti-dilutive. They are included in the
calculation of EBDT per share because they are dilutive to this measure.
For the three and twelve months ended January 31, 2010, the effect of 32,129,221 and 12,065,194
shares of dilutive securities were not included in the computation of diluted earnings per share
because their effect is anti-dilutive to the loss from continuing operations. (Since these shares
are dilutive for the computation of EBDT per share for the three and twelve months ended
January 31, 2010, diluted weighted average shares outstanding of 187,453,699 and 151,890,543
were used to arrive at $0.43/share and $2.00/share, respectively.)
6) The preference payment represents the respective periods share of the annual preferred
payment in connection with the issuance of Class A Common Units in exchange for Bruce C.
Ratners noncontrolling interest in the Forest City Ratner Companies portfolio.
7) The following table provides detail of depreciation and amortization and amortization of
mortgage procurement costs.
Depreciation and Amortization | Depreciation and Amortization | |||||||||||||||
Three Months Ended January 31, | Year Ended January 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Full Consolidation |
$ | 61,399 | $ | 65,911 | $ | 243,847 | $ | 260,223 | ||||||||
Non-Real Estate |
(1,091 | ) | (3,108 | ) | (5,028 | ) | (13,480 | ) | ||||||||
Real Estate Groups Full Consolidation |
60,308 | 62,803 | 238,819 | 246,743 | ||||||||||||
Real Estate Groups related to noncontrolling interest |
(2,344 | ) | (1,717 | ) | (9,267 | ) | (5,037 | ) | ||||||||
Real Estate Groups Unconsolidated |
15,237 | 12,654 | 52,194 | 43,868 | ||||||||||||
Real Estate Groups Discontinued Operations |
178 | 1,693 | 4,296 | 8,295 | ||||||||||||
Real Estate Groups Pro-Rata Consolidation |
$ | 73,379 | $ | 75,433 | $ | 286,042 | $ | 293,869 | ||||||||
Amortization of Mortgage Procurement Costs | Amortization of Mortgage Procurement Costs | |||||||||||||||
Three Months Ended January 31, | Year Ended January 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Full Consolidation |
$ | 3,418 | $ | 3,255 | $ | 13,487 | $ | 13,709 | ||||||||
Non-Real Estate |
| | | | ||||||||||||
Real Estate Groups Full Consolidation |
3,418 | 3,255 | 13,487 | 13,709 | ||||||||||||
Real Estate Groups related to noncontrolling interest |
(422 | ) | (117 | ) | (1,514 | ) | (565 | ) | ||||||||
Real Estate Groups Unconsolidated |
614 | 639 | 2,245 | 2,126 | ||||||||||||
Real Estate Groups Discontinued Operations |
7 | 73 | 123 | 313 | ||||||||||||
Real Estate Groups Pro-Rata Consolidation |
$ | 3,617 | $ | 3,850 | $ | 14,341 | $ | 15,583 | ||||||||
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Year Ended January 31, 2011 and 2010
(in thousands)
Financial Highlights
Year Ended January 31, 2011 and 2010
(in thousands)
8) The following table provides detail of Income Tax Expense (Benefit):
Three Months Ended January 31, | Year Ended January 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
(A) Operating earnings |
||||||||||||||||
Current |
$ | (10,900 | ) | $ | (11,975 | ) | $ | (41,684 | ) | $ | (20,680 | ) | ||||
Deferred |
(3,292 | ) | 10,690 | 55,028 | 6,707 | |||||||||||
(14,192 | ) | (1,285 | ) | 13,344 | (13,973 | ) | ||||||||||
(B) Impairment of consolidated and unconsolidated real estate |
||||||||||||||||
Deferred Consolidated real estate |
| (2,244 | ) | (2,048 | ) | (3,455 | ) | |||||||||
Deferred Unconsolidated real estate |
(14,277 | ) | (656 | ) | (28,527 | ) | (14,100 | ) | ||||||||
(14,277 | ) | (2,900 | ) | (30,575 | ) | (17,555 | ) | |||||||||
(C) Net gain on disposition of partial interests in rental properties |
||||||||||||||||
Current |
5,037 | | 37,483 | | ||||||||||||
Deferred |
(5,862 | ) | | 40,369 | | |||||||||||
(825 | ) | | 77,852 | | ||||||||||||
(D) Gain on disposition of unconsolidated entities |
||||||||||||||||
Current |
495 | 27,471 | 3,926 | 27,674 | ||||||||||||
Deferred |
5,568 | (9,917 | ) | 5,173 | (8,375 | ) | ||||||||||
6,063 | 17,554 | 9,099 | 19,299 | |||||||||||||
Subtotal (A) (B) (C) (D) |
||||||||||||||||
Current |
(5,368 | ) | 15,496 | (275 | ) | 6,994 | ||||||||||
Deferred |
(17,863 | ) | (2,127 | ) | 69,995 | (19,223 | ) | |||||||||
Income tax expense |
(23,231 | ) | 13,369 | 69,720 | (12,229 | ) | ||||||||||
(E) Discontinued operations |
||||||||||||||||
Operating earnings |
||||||||||||||||
Current |
(378 | ) | (543 | ) | (1,534 | ) | (1,484 | ) | ||||||||
Deferred |
503 | 331 | 1,595 | 1,564 | ||||||||||||
125 | (212 | ) | 61 | 80 | ||||||||||||
Gain on disposition of rental properties |
||||||||||||||||
Current |
5,000 | | 4,902 | 754 | ||||||||||||
Deferred |
13,870 | | 14,192 | 1,010 | ||||||||||||
18,870 | | 19,094 | 1,764 | |||||||||||||
Gain on disposition of Lumber Group |
||||||||||||||||
Current |
| | | | ||||||||||||
Deferred |
| 454 | | 454 | ||||||||||||
| 454 | | 454 | |||||||||||||
Impairment of real estate |
||||||||||||||||
Current |
| | | | ||||||||||||
Deferred |
| (6,833 | ) | (30,872 | ) | (10,624 | ) | |||||||||
| (6,833 | ) | (30,872 | ) | (10,624 | ) | ||||||||||
18,995 | (6,591 | ) | (11,717 | ) | (8,326 | ) | ||||||||||
Grand Total (A) (B) (C) (D) (E) |
||||||||||||||||
Current |
(746 | ) | 14,953 | 3,093 | 6,264 | |||||||||||
Deferred |
(3,490 | ) | (8,175 | ) | 54,910 | (26,819 | ) | |||||||||
$ | (4,236 | ) | $ | 6,778 | $ | 58,003 | $ | (20,555 | ) | |||||||
Recap of Grand Total: |
||||||||||||||||
Real Estate Groups |
||||||||||||||||
Current |
2,629 | 15,766 | 23,593 | 14,740 | ||||||||||||
Deferred |
(8,772 | ) | (10,558 | ) | 36,432 | (12,852 | ) | |||||||||
(6,143 | ) | 5,208 | 60,025 | 1,888 | ||||||||||||
Non-Real Estate Groups |
||||||||||||||||
Current |
(3,375 | ) | (813 | ) | (20,500 | ) | (8,476 | ) | ||||||||
Deferred |
5,282 | 2,383 | 18,478 | (13,967 | ) | |||||||||||
1,907 | 1,570 | (2,022 | ) | (22,443 | ) | |||||||||||
Grand Total |
$ | (4,236 | ) | $ | 6,778 | $ | 58,003 | $ | (20,555 | ) | ||||||
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (Loss) (GAAP) (in thousands):
Three Months Ended January 31, 2011 | Three Months Ended January 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Plus | Plus | ||||||||||||||||||||||||||||||||||||||||
Full | Less | Unconsolidated | Plus | Pro-Rata | Full | Less | Unconsolidated | Plus | Pro-Rata | ||||||||||||||||||||||||||||||||
Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | ||||||||||||||||||||||||||||||||
(GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | ||||||||||||||||||||||||||||||||
Revenues from real estate operations |
$ | 297,790 | $ | 19,007 | $ | 80,167 | $ | 2,170 | $ | 361,120 | $ | 318,530 | $ | 12,655 | $ | 70,909 | $ | 5,727 | $ | 382,511 | |||||||||||||||||||||
Exclude straight-line rent adjustment (1) |
(9,015 | ) | | | (144 | ) | (9,159 | ) | (5,107 | ) | | | (176 | ) | (5,283 | ) | |||||||||||||||||||||||||
Adjusted revenues |
288,775 | 19,007 | 80,167 | 2,026 | 351,961 | 313,423 | 12,655 | 70,909 | 5,551 | 377,228 | |||||||||||||||||||||||||||||||
Add interest and other income |
17,862 | 611 | 381 | (1 | ) | 17,631 | 30,080 | 175 | 20,910 | 1 | 50,816 | ||||||||||||||||||||||||||||||
Add equity in earnings (loss) of unconsolidated entities, including impairment |
(12,742 | ) | 1,719 | 14,081 | | (380 | ) | 30,087 | 5 | (30,338 | ) | | (256 | ) | |||||||||||||||||||||||||||
Exclude gain on disposition of unconsolidated entities |
(15,633 | ) | | 15,633 | | | (45,263 | ) | | 45,263 | | | |||||||||||||||||||||||||||||
Exclude impairment of unconsolidated real estate |
35,714 | | (35,714 | ) | | | 1,693 | | (1,693 | ) | | | |||||||||||||||||||||||||||||
Exclude depreciation and amortization of unconsolidated entities (see below) |
15,851 | | (15,851 | ) | | | 13,293 | | (13,293 | ) | | | |||||||||||||||||||||||||||||
Adjusted total income |
329,827 | 21,337 | 58,697 | 2,025 | 369,212 | 343,313 | 12,835 | 91,758 | 5,552 | 427,788 | |||||||||||||||||||||||||||||||
Operating expenses |
182,787 | 9,454 | 39,254 | 893 | 213,480 | 181,762 | 6,551 | 71,105 | 2,769 | 249,085 | |||||||||||||||||||||||||||||||
Add back non-Real Estate depreciation and amortization (b) |
1,091 | | | | 1,091 | 3,108 | | 2,583 | | 5,691 | |||||||||||||||||||||||||||||||
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d) |
| | | | | | | 161 | | 161 | |||||||||||||||||||||||||||||||
Exclude straight-line rent adjustment (2) |
(1,246 | ) | | | | (1,246 | ) | (1,594 | ) | | | | (1,594 | ) | |||||||||||||||||||||||||||
Exclude preference payment |
(585 | ) | | | | (585 | ) | (585 | ) | | | | (585 | ) | |||||||||||||||||||||||||||
Adjusted operating expenses |
182,047 | 9,454 | 39,254 | 893 | 212,740 | 182,691 | 6,551 | 73,849 | 2,769 | 252,758 | |||||||||||||||||||||||||||||||
Net operating income |
147,780 | 11,883 | 19,443 | 1,132 | 156,472 | 160,622 | 6,284 | 17,909 | 2,783 | 175,030 | |||||||||||||||||||||||||||||||
Interest expense |
(71,105 | ) | (3,682 | ) | (22,228 | ) | (765 | ) | (90,416 | ) | (90,089 | ) | (3,925 | ) | (16,955 | ) | (1,743 | ) | (104,862 | ) | |||||||||||||||||||||
Gain (loss) on early extinguishment of debt |
(31,688 | ) | | 2,785 | | (28,903 | ) | (1,396 | ) | | (954 | ) | | (2,350 | ) | ||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, including impairment |
12,742 | (1,719 | ) | (14,081 | ) | | 380 | (30,087 | ) | (5 | ) | 30,338 | | 256 | |||||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
15,633 | | | | 15,633 | 45,263 | | | | 45,263 | |||||||||||||||||||||||||||||||
Impairment of unconsolidated real estate |
(35,714 | ) | | | | (35,714 | ) | (1,693 | ) | | | | (1,693 | ) | |||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated entities (see above) |
(15,851 | ) | | 15,851 | | | (13,293 | ) | | 13,293 | | | |||||||||||||||||||||||||||||
Net gain on disposition of rental properties and partial interests in rental properties |
| | | 46,527 | 46,527 | | | | 1,172 | 1,172 | |||||||||||||||||||||||||||||||
Impairment of consolidated real estate |
| | | | | (5,783 | ) | | | (17,619 | ) | (23,402 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization Real Estate Groups (a) |
(60,308 | ) | (2,344 | ) | (15,237 | ) | (178 | ) | (73,379 | ) | (62,803 | ) | (1,717 | ) | (12,654 | ) | (1,693 | ) | (75,433 | ) | |||||||||||||||||||||
Amortization of mortgage procurement costs Real Estate Groups (c) |
(3,418 | ) | (422 | ) | (614 | ) | (7 | ) | (3,617 | ) | (3,255 | ) | (117 | ) | (639 | ) | (73 | ) | (3,850 | ) | |||||||||||||||||||||
Straight-line rent adjustment (1) + (2) |
7,769 | | | 144 | 7,913 | 3,513 | | | 176 | 3,689 | |||||||||||||||||||||||||||||||
Preference payment |
(585 | ) | | | | (585 | ) | (585 | ) | | | | (585 | ) | |||||||||||||||||||||||||||
Earnings (loss) before income taxes |
(34,745 | ) | 3,716 | (14,081 | ) | 46,853 | (5,689 | ) | 414 | 520 | 30,338 | (16,997 | ) | 13,235 | |||||||||||||||||||||||||||
Income tax provision |
23,231 | | | (18,995 | ) | 4,236 | (13,369 | ) | | | 6,591 | (6,778 | ) | ||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, including impairment |
(12,742 | ) | 1,719 | 14,081 | | (380 | ) | 30,087 | 5 | (30,338 | ) | | (256 | ) | |||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
(24,256 | ) | 5,435 | | 27,858 | (1,833 | ) | 17,132 | 525 | | (10,406 | ) | 6,201 | ||||||||||||||||||||||||||||
Discontinued operations, net of tax |
27,858 | | | (27,858 | ) | | (10,520 | ) | (114 | ) | | 10,406 | | ||||||||||||||||||||||||||||
Net earnings |
3,602 | 5,435 | | | (1,833 | ) | 6,612 | 411 | | | 6,201 | ||||||||||||||||||||||||||||||
Noncontrolling interests |
|||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations attributable to noncontrolling interests |
(5,435 | ) | (5,435 | ) | | | | (525 | ) | (525 | ) | | | | |||||||||||||||||||||||||||
Earnings from discontinued operations attributable to noncontrolling interests |
| | | | | 114 | 114 | | | | |||||||||||||||||||||||||||||||
Noncontrolling interests |
(5,435 | ) | (5,435 | ) | | | | (411 | ) | (411 | ) | | | | |||||||||||||||||||||||||||
Net earnings attributable to Forest City Enterprises, Inc. |
$ | (1,833 | ) | $ | | $ | | $ | | $ | (1,833 | ) | $ | 6,201 | $ | | $ | | $ | | $ | 6,201 | |||||||||||||||||||
Preferred dividends |
(3,850 | ) | | | | (3,850 | ) | | | | | | |||||||||||||||||||||||||||||
Net earnings attributable to Forest City Enterprises, Inc. common shareholders |
$ | (5,683 | ) | $ | | $ | | $ | | $ | (5,683 | ) | $ | 6,201 | $ | | $ | | $ | | $ | 6,201 | |||||||||||||||||||
(a) Depreciation and amortization Real Estate Groups |
$ | 60,308 | $ | 2,344 | $ | 15,237 | $ | 178 | $ | 73,379 | $ | 62,803 | $ | 1,717 | $ | 12,654 | $ | 1,693 | $ | 75,433 | |||||||||||||||||||||
(b) Depreciation and amortization Non-Real Estate |
1,091 | | | | 1,091 | 3,108 | | 2,583 | | 5,691 | |||||||||||||||||||||||||||||||
Total depreciation and amortization |
$ | 61,399 | $ | 2,344 | $ | 15,237 | $ | 178 | $ | 74,470 | $ | 65,911 | $ | 1,717 | $ | 15,237 | $ | 1,693 | $ | 81,124 | |||||||||||||||||||||
(c) Amortization of mortgage procurement costs Real Estate Groups |
$ | 3,418 | $ | 422 | $ | 614 | $ | 7 | $ | 3,617 | $ | 3,255 | $ | 117 | $ | 639 | $ | 73 | $ | 3,850 | |||||||||||||||||||||
(d) Amortization of mortgage procurement costs Non-Real Estate |
| | | | | | | 161 | | 161 | |||||||||||||||||||||||||||||||
Total amortization of mortgage procurement costs |
$ | 3,418 | $ | 422 | $ | 614 | $ | 7 | $ | 3,617 | $ | 3,255 | $ | 117 | $ | 800 | $ | 73 | $ | 4,011 | |||||||||||||||||||||
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (Loss) (GAAP) (in
thousands):
Year Ended January 31, 2011 | Year Ended January 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Plus | Plus | ||||||||||||||||||||||||||||||||||||||||
Full | Less | Unconsolidated | Plus | Pro-Rata | Full | Less | Unconsolidated | Plus | Pro-Rata | ||||||||||||||||||||||||||||||||
Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | ||||||||||||||||||||||||||||||||
(GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | ||||||||||||||||||||||||||||||||
Revenues from real estate operations |
$ | 1,177,661 | $ | 68,419 | $ | 316,900 | $ | 17,848 | $ | 1,443,990 | $ | 1,232,013 | $ | 50,432 | $ | 303,029 | $ | 30,378 | $ | 1,514,988 | |||||||||||||||||||||
Exclude straight-line rent adjustment (1) |
(22,883 | ) | | | (609 | ) | (23,492 | ) | (18,824 | ) | | | (869 | ) | (19,693 | ) | |||||||||||||||||||||||||
Adjusted revenues |
1,154,778 | 68,419 | 316,900 | 17,239 | 1,420,498 | 1,213,189 | 50,432 | 303,029 | 29,509 | 1,495,295 | |||||||||||||||||||||||||||||||
Add interest and other income |
52,826 | 2,635 | 15,666 | 6 | 65,863 | 53,999 | 718 | 54,476 | 6 | 107,763 | |||||||||||||||||||||||||||||||
Add gain on disposition of partial interests in other investment Nets |
55,112 | 23,675 | | | 31,437 | | | | | | |||||||||||||||||||||||||||||||
Add equity in earnings (loss) of unconsolidated entities, including impairment |
(30,194 | ) | (4,613 | ) | 19,507 | | (6,074 | ) | (15,053 | ) | (76 | ) | 15,769 | | 792 | ||||||||||||||||||||||||||
Exclude gain on disposition of unconsolidated entities |
(23,461 | ) | | 23,461 | | | (49,761 | ) | | 49,761 | | | |||||||||||||||||||||||||||||
Exclude impairment of unconsolidated real estate |
72,459 | | (72,459 | ) | | | 36,356 | | (36,356 | ) | | | |||||||||||||||||||||||||||||
Exclude depreciation and amortization of unconsolidated entities (see below) |
54,439 | | (54,439 | ) | | | 45,994 | | (45,994 | ) | | | |||||||||||||||||||||||||||||
Adjusted total income |
1,335,959 | 90,116 | 248,636 | 17,245 | 1,511,724 | 1,284,724 | 51,074 | 340,685 | 29,515 | 1,603,850 | |||||||||||||||||||||||||||||||
Operating expenses |
685,783 | 36,392 | 169,265 | 7,451 | 826,107 | 704,552 | 24,006 | 259,085 | 12,286 | 951,917 | |||||||||||||||||||||||||||||||
Add back non-Real Estate depreciation and amortization (b) |
5,028 | | 878 | | 5,906 | 13,480 | | 14,931 | | 28,411 | |||||||||||||||||||||||||||||||
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d) |
| | 69 | | 69 | | | 563 | | 563 | |||||||||||||||||||||||||||||||
Exclude straight-line rent adjustment (2) |
(5,332 | ) | | | | (5,332 | ) | (6,451 | ) | | | | (6,451 | ) | |||||||||||||||||||||||||||
Exclude preference payment |
(2,341 | ) | | | | (2,341 | ) | (2,341 | ) | | | | (2,341 | ) | |||||||||||||||||||||||||||
Adjusted operating expenses |
683,138 | 36,392 | 170,212 | 7,451 | 824,409 | 709,240 | 24,006 | 274,579 | 12,286 | 972,099 | |||||||||||||||||||||||||||||||
Net operating income |
652,821 | 53,724 | 78,424 | 9,794 | 687,315 | 575,484 | 27,068 | 66,106 | 17,229 | 631,751 | |||||||||||||||||||||||||||||||
Interest expense |
(315,340 | ) | (18,690 | ) | (81,184 | ) | (5,824 | ) | (383,658 | ) | (343,146 | ) | (14,739 | ) | (66,850 | ) | (9,286 | ) | (404,543 | ) | |||||||||||||||||||||
Gain (loss) on early extinguishment of debt |
(21,035 | ) | 247 | 2,760 | | (18,522 | ) | 36,569 | | 744 | | 37,313 | |||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, including impairment |
30,194 | 4,613 | (19,507 | ) | | 6,074 | 15,053 | 76 | (15,769 | ) | | (792 | ) | ||||||||||||||||||||||||||||
Gain on disposition of unconsolidated entities |
23,461 | | | | 23,461 | 49,761 | | | | 49,761 | |||||||||||||||||||||||||||||||
Impairment of unconsolidated real estate |
(72,459 | ) | | | | (72,459 | ) | (36,356 | ) | | | | (36,356 | ) | |||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated entities (see above) |
(54,439 | ) | | 54,439 | | | (45,994 | ) | | 45,994 | | | |||||||||||||||||||||||||||||
Net gain on disposition of rental properties and partial interests in rental properties |
202,878 | | | 47,092 | 249,970 | | | | 5,720 | 5,720 | |||||||||||||||||||||||||||||||
Impairment of consolidated real estate |
(6,803 | ) | (1,526 | ) | | (79,603 | ) | (84,880 | ) | (8,907 | ) | | | (27,394 | ) | (36,301 | ) | ||||||||||||||||||||||||
Depreciation and amortization Real Estate Groups (a) |
(238,819 | ) | (9,267 | ) | (52,194 | ) | (4,296 | ) | (286,042 | ) | (246,743 | ) | (5,037 | ) | (43,868 | ) | (8,295 | ) | (293,869 | ) | |||||||||||||||||||||
Amortization of mortgage procurement costs Real Estate Groups (c) |
(13,487 | ) | (1,514 | ) | (2,245 | ) | (123 | ) | (14,341 | ) | (13,709 | ) | (565 | ) | (2,126 | ) | (313 | ) | (15,583 | ) | |||||||||||||||||||||
Straight-line rent adjustment (1) + (2) |
17,551 | | | 609 | 18,160 | 12,373 | | | 869 | 13,242 | |||||||||||||||||||||||||||||||
Preference payment |
(2,341 | ) | | | | (2,341 | ) | (2,341 | ) | | | | (2,341 | ) | |||||||||||||||||||||||||||
Earnings (loss) before income taxes |
202,182 | 27,587 | (19,507 | ) | (32,351 | ) | 122,737 | (7,956 | ) | 6,803 | (15,769 | ) | (21,470 | ) | (51,998 | ) | |||||||||||||||||||||||||
Income tax provision |
(69,720 | ) | | | 11,717 | (58,003 | ) | 12,229 | | | 8,326 | 20,555 | |||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, including impairment |
(30,194 | ) | (4,613 | ) | 19,507 | | (6,074 | ) | (15,053 | ) | (76 | ) | 15,769 | | 792 | ||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
102,268 | 22,974 | | (20,634 | ) | 58,660 | (10,780 | ) | 6,727 | | (13,144 | ) | (30,651 | ) | |||||||||||||||||||||||||||
Discontinued operations, net of tax |
(16,258 | ) | 4,376 | | 20,634 | | (13,261 | ) | (117 | ) | | 13,144 | | ||||||||||||||||||||||||||||
Net earnings (loss) |
86,010 | 27,350 | | | 58,660 | (24,041 | ) | 6,610 | | | (30,651 | ) | |||||||||||||||||||||||||||||
Noncontrolling interests |
|||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations attributable to noncontrolling interests |
(22,974 | ) | (22,974 | ) | | | | (6,727 | ) | (6,727 | ) | | | | |||||||||||||||||||||||||||
Earnings from discontinued operations attributable to noncontrolling interests |
(4,376 | ) | (4,376 | ) | | | | 117 | 117 | | | | |||||||||||||||||||||||||||||
Noncontrolling interests |
(27,350 | ) | (27,350 | ) | | | | (6,610 | ) | (6,610 | ) | | | | |||||||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. |
$ | 58,660 | $ | | $ | | $ | | $ | 58,660 | $ | (30,651 | ) | $ | | $ | | $ | | $ | (30,651 | ) | |||||||||||||||||||
Preferred dividends |
(11,807 | ) | | | | (11,807 | ) | | | | | | |||||||||||||||||||||||||||||
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders |
$ | 46,853 | $ | | $ | | $ | | $ | 46,853 | $ | (30,651 | ) | $ | | $ | | $ | | $ | (30,651 | ) | |||||||||||||||||||
(a) Depreciation and amortization Real Estate Groups |
$ | 238,819 | $ | 9,267 | $ | 52,194 | $ | 4,296 | $ | 286,042 | $ | 246,743 | $ | 5,037 | $ | 43,868 | $ | 8,295 | $ | 293,869 | |||||||||||||||||||||
(b) Depreciation and amortization Non-Real Estate |
5,028 | | 878 | | 5,906 | 13,480 | | 14,931 | | 28,411 | |||||||||||||||||||||||||||||||
Total depreciation and amortization |
$ | 243,847 | $ | 9,267 | $ | 53,072 | $ | 4,296 | $ | 291,948 | $ | 260,223 | $ | 5,037 | $ | 58,799 | $ | 8,295 | $ | 322,280 | |||||||||||||||||||||
(c) Amortization of mortgage procurement costs Real Estate Groups |
$ | 13,487 | $ | 1,514 | $ | 2,245 | $ | 123 | $ | 14,341 | $ | 13,709 | $ | 565 | $ | 2,126 | $ | 313 | $ | 15,583 | |||||||||||||||||||||
(d) Amortization of mortgage procurement costs Non-Real Estate |
| | 69 | | 69 | | | 563 | | 563 | |||||||||||||||||||||||||||||||
Total amortization of mortgage procurement costs |
$ | 13,487 | $ | 1,514 | $ | 2,314 | $ | 123 | $ | 14,410 | $ | 13,709 | $ | 565 | $ | 2,689 | $ | 313 | $ | 16,146 | |||||||||||||||||||||
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Supplemental Operating Information
Net Operating Income (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended January 31, 2011 | Three Months Ended January 31, 2010 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
Plus | Plus | ||||||||||||||||||||||||||||||||||||||||||||||||
Less | Unconsolidated | Plus | Pro-Rata | Full | Less | Unconsolidated | Plus | Pro-Rata | Full | Pro-Rata | |||||||||||||||||||||||||||||||||||||||
Full Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Consolidation | ||||||||||||||||||||||||||||||||||||||
(GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | (Non-GAAP) | ||||||||||||||||||||||||||||||||||||||
Commercial Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Retail |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
$ | 59,702 | $ | 2,913 | $ | 5,438 | $ | | $ | 62,227 | $ | 57,364 | $ | 2,658 | $ | 5,464 | $ | | $ | 60,170 | 4.1 | % | 3.4 | % | |||||||||||||||||||||||||
Total |
59,073 | 2,915 | 8,036 | 1,132 | 65,326 | 59,927 | 2,611 | 5,581 | 2,111 | 65,008 | |||||||||||||||||||||||||||||||||||||||
Office Buildings |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
57,638 | 2,382 | 1,537 | | 56,793 | 57,833 | 2,685 | 1,506 | | 56,654 | (0.3 | %) | 0.2 | % | |||||||||||||||||||||||||||||||||||
Total |
64,886 | 6,125 | 118 | | 58,879 | 65,248 | 2,608 | 1,506 | | 64,146 | |||||||||||||||||||||||||||||||||||||||
Hotels |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
1,788 | | 553 | | 2,341 | 2,140 | | 564 | | 2,704 | (16.4 | %) | (13.4 | %) | |||||||||||||||||||||||||||||||||||
Total |
1,788 | | 553 | | 2,341 | 2,140 | | 564 | | 2,704 | |||||||||||||||||||||||||||||||||||||||
Earnings from Commercial
Land Sales |
282 | | | | 282 | (144 | ) | | | | (144 | ) | |||||||||||||||||||||||||||||||||||||
Other (1) |
3,361 | (26 | ) | 1,966 | | 5,353 | 4,159 | 423 | (1,052 | ) | | 2,684 | |||||||||||||||||||||||||||||||||||||
Total Commercial Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
119,128 | 5,295 | 7,528 | | 121,361 | 117,337 | 5,343 | 7,534 | | 119,528 | 1.5 | % | 1.5 | % | |||||||||||||||||||||||||||||||||||
Total |
129,390 | 9,014 | 10,673 | 1,132 | 132,181 | 131,330 | 5,642 | 6,599 | 2,111 | 134,398 | |||||||||||||||||||||||||||||||||||||||
Residential
Group Apartments |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
25,346 | 543 | 6,606 | | 31,409 | 25,729 | 468 | 6,389 | | 31,650 | (1.5 | %) | (0.8 | %) | |||||||||||||||||||||||||||||||||||
Total |
29,441 | 2,315 | 8,447 | | 35,573 | 38,714 | 860 | 8,706 | 672 | 47,232 | |||||||||||||||||||||||||||||||||||||||
Military Housing |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
| | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
Total |
7,142 | | 378 | | 7,520 | 8,522 | (451 | ) | 311 | | 9,284 | ||||||||||||||||||||||||||||||||||||||
Other (1) |
(2,818 | ) | 170 | (191 | ) | | (3,179 | ) | 4,805 | (11 | ) | | | 4,816 | |||||||||||||||||||||||||||||||||||
Total Residential Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
25,346 | 543 | 6,606 | | 31,409 | 25,729 | 468 | 6,389 | | 31,650 | (1.5 | %) | (0.8 | %) | |||||||||||||||||||||||||||||||||||
Total |
33,765 | 2,485 | 8,634 | | 39,914 | 52,041 | 398 | 9,017 | 672 | 61,332 | |||||||||||||||||||||||||||||||||||||||
Total Rental Properties |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
144,474 | 5,838 | 14,134 | | 152,770 | 143,066 | 5,811 | 13,923 | | 151,178 | 1.0 | % | 1.1 | % | |||||||||||||||||||||||||||||||||||
Total |
163,155 | 11,499 | 19,307 | 1,132 | 172,095 | 183,371 | 6,040 | 15,616 | 2,783 | 195,730 | |||||||||||||||||||||||||||||||||||||||
Land Development Group |
2,941 | 384 | 136 | | 2,693 | 365 | 244 | (323 | ) | | (202 | ) | |||||||||||||||||||||||||||||||||||||
The Nets |
|||||||||||||||||||||||||||||||||||||||||||||||||
Operations |
(312 | ) | | | | (312 | ) | (13,648 | ) | | 2,616 | | (11,032 | ) | |||||||||||||||||||||||||||||||||||
Gain on disposition of partial interest |
| | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
Total |
(312 | ) | | | | (312 | ) | (13,648 | ) | | 2,616 | | (11,032 | ) | |||||||||||||||||||||||||||||||||||
Corporate Activities |
(18,004 | ) | | | | (18,004 | ) | (9,466 | ) | | | | (9,466 | ) | |||||||||||||||||||||||||||||||||||
Grand Total |
$ | 147,780 | $ | 11,883 | $ | 19,443 | $ | 1,132 | $ | 156,472 | $ | 160,622 | $ | 6,284 | $ | 17,909 | $ | 2,783 | $ | 175,030 | |||||||||||||||||||||||||||||
(1) | Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of historic and new market tax credit income. Write-offs of abandoned development projects for the three months ended January 31, 2011 were $7,378 at both full and pro-rata consolidation compared to $5,490 for the three months ended January 31, 2010 at both full and pro-rata consolidation. |
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Supplemental Operating Information
Net Operating Income (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended January 31, 2011 | Year Ended January 31, 2010 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
Plus | Plus | ||||||||||||||||||||||||||||||||||||||||||||||||
Less | Unconsolidated | Plus | Pro-Rata | Full | Less | Unconsolidated | Plus | Pro-Rata | Full | Pro-Rata | |||||||||||||||||||||||||||||||||||||||
Full Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Noncontrolling | Investments at | Discontinued | Consolidation | Consolidation | Consolidation | ||||||||||||||||||||||||||||||||||||||
(GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | Interest | Pro-Rata | Operations | (Non-GAAP) | (GAAP) | (Non-GAAP) | ||||||||||||||||||||||||||||||||||||||
Commercial Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Retail |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
$ | 236,459 | $ | 11,366 | $ | 21,643 | $ | | $ | 246,736 | $ | 229,780 | $ | 10,448 | $ | 22,055 | $ | | $ | 241,387 | 2.9 | % | 2.2 | % | |||||||||||||||||||||||||
Total |
250,055 | 11,379 | 24,738 | 8,894 | 272,308 | 241,481 | 11,351 | 22,350 | 10,641 | 263,121 | |||||||||||||||||||||||||||||||||||||||
Office Buildings |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
235,545 | 10,496 | 15,297 | | 240,346 | 238,106 | 10,407 | 7,782 | | 235,481 | (1.1 | %) | 2.1 | % | |||||||||||||||||||||||||||||||||||
Total |
259,111 | 20,508 | 9,950 | | 248,553 | 257,147 | 10,446 | 7,782 | | 254,483 | |||||||||||||||||||||||||||||||||||||||
Hotels |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
11,501 | | 1,480 | | 12,981 | 11,997 | | 1,510 | | 13,507 | (4.1 | %) | (3.9 | %) | |||||||||||||||||||||||||||||||||||
Total |
11,501 | | 1,480 | | 12,981 | 11,997 | | 1,510 | | 13,507 | |||||||||||||||||||||||||||||||||||||||
Earnings from Commercial
Land Sales |
4,652 | 14 | | | 4,638 | 5,416 | 476 | | | 4,940 | |||||||||||||||||||||||||||||||||||||||
Other (1) |
(3,547 | ) | (762 | ) | 7,132 | | 4,347 | (6,677 | ) | 946 | (2,561 | ) | (677 | ) | (10,861 | ) | |||||||||||||||||||||||||||||||||
Total Commercial Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
483,505 | 21,862 | 38,420 | | 500,063 | 479,883 | 20,855 | 31,347 | | 490,375 | 0.8 | % | 2.0 | % | |||||||||||||||||||||||||||||||||||
Total |
521,772 | 31,139 | 43,300 | 8,894 | 542,827 | 509,364 | 23,219 | 29,081 | 9,964 | 525,190 | |||||||||||||||||||||||||||||||||||||||
Residential
Group Apartments |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
96,723 | 2,504 | 27,043 | | 121,262 | 99,151 | 2,042 | 20,969 | | 118,078 | (2.4 | %) | 2.7 | % | |||||||||||||||||||||||||||||||||||
Total |
113,883 | 4,371 | 31,898 | 900 | 142,310 | 128,316 | 3,749 | 29,611 | 7,265 | 161,443 | |||||||||||||||||||||||||||||||||||||||
Military Housing |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
| | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
Total |
26,966 | (37 | ) | 1,503 | | 28,506 | 37,424 | (303 | ) | 1,044 | | 38,771 | |||||||||||||||||||||||||||||||||||||
Other (1) |
(3,515 | ) | 87 | 238 | | (3,364 | ) | (16,817 | ) | (18 | ) | 231 | | (16,568 | ) | ||||||||||||||||||||||||||||||||||
Total Residential Group |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
96,723 | 2,504 | 27,043 | | 121,262 | 99,151 | 2,042 | 20,969 | | 118,078 | (2.4 | %) | 2.7 | % | |||||||||||||||||||||||||||||||||||
Total |
137,334 | 4,421 | 33,639 | 900 | 167,452 | 148,923 | 3,428 | 30,886 | 7,265 | 183,646 | |||||||||||||||||||||||||||||||||||||||
Total Rental Properties |
|||||||||||||||||||||||||||||||||||||||||||||||||
Comparable |
580,228 | 24,366 | 65,463 | | 621,325 | 579,034 | 22,897 | 52,316 | | 608,453 | 0.2 | % | 2.1 | % | |||||||||||||||||||||||||||||||||||
Total |
659,106 | 35,560 | 76,939 | 9,794 | 710,279 | 658,287 | 26,647 | 59,967 | 17,229 | 708,836 | |||||||||||||||||||||||||||||||||||||||
Land Development Group |
5,278 | 732 | 339 | | 4,885 | 2,007 | 421 | (1,925 | ) | | (339 | ) | |||||||||||||||||||||||||||||||||||||
The Nets |
|||||||||||||||||||||||||||||||||||||||||||||||||
Operations |
(18,318 | ) | (6,243 | ) | 1,146 | | (10,929 | ) | (43,489 | ) | | 8,064 | | (35,425 | ) | ||||||||||||||||||||||||||||||||||
Gain on disposition of partial interest |
55,112 | 23,675 | | | 31,437 | | | | | | |||||||||||||||||||||||||||||||||||||||
Total |
36,794 | 17,432 | 1,146 | | 20,508 | (43,489 | ) | | 8,064 | | (35,425 | ) | |||||||||||||||||||||||||||||||||||||
Corporate Activities |
(48,357 | ) | | | | (48,357 | ) | (41,321 | ) | | | | (41,321 | ) | |||||||||||||||||||||||||||||||||||
Grand Total |
$ | 652,821 | $ | 53,724 | $ | 78,424 | $ | 9,794 | $ | 687,315 | $ | 575,484 | $ | 27,068 | $ | 66,106 | $ | 17,229 | $ | 631,751 | |||||||||||||||||||||||||||||
(1) | Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of historic and new market tax credit income. Write-offs of abandoned development projects for the year ended January 31, 2011 were $8,056 at full consolidation and $10,613 at pro-rata consolidation compared to $26,888 for the year ended January 31, 2010 at both full and pro-rata consolidation. |
Openings and Acquisitions as of January 31, 2011
Cost at FCE | ||||||||||||||||||||||||||||||||||||||
Date | Pro-Rata | Cost at Full | Total Cost | Pro-Rata Share | Sq. ft./ | Gross | ||||||||||||||||||||||||||||||||
Dev (D) | Opened / | FCE Legal | FCE % (a) | Consolidation | at 100% | (Non-GAAP) (c) | No. of | Leasable | Lease | |||||||||||||||||||||||||||||
Property | Location | Acq (A) | Acquired | Ownership % (a) | (1) | (GAAP) (b) | (2) | (1) X (2) | Units | Area | Commitment % | |||||||||||||||||||||||||||
2010 (4) | (in millions) | |||||||||||||||||||||||||||||||||||||
Retail Centers: |
||||||||||||||||||||||||||||||||||||||
Village at Gulfstream Park (d) |
Hallandale Beach, FL | D | Q1-10 | 50.0 | % | 50.0 | % | $ | 0.0 | $ | 214.2 | $ | 107.1 | 511,000 | (i) | 511,000 | 80 | % | ||||||||||||||||||||
East River Plaza (d) (e) |
Manhattan, NY | D | Q2-10 | 35.0 | % | 50.0 | % | 0.0 | 390.6 | 195.3 | 527,000 | 527,000 | 90 | % | ||||||||||||||||||||||||
$ | 0.0 | $ | 604.8 | $ | 302.4 | 1,038,000 | 1,038,000 | |||||||||||||||||||||||||||||||
Office: |
||||||||||||||||||||||||||||||||||||||
Waterfront Station East 4th & West 4th Buildings |
Washington, D.C. | D | Q1-10 | 45.0 | % | 45.0 | % | $ | 236.0 | $ | 236.0 | $ | 106.2 | 631,000 | (j) | 99 | % | |||||||||||||||||||||
Residential: |
||||||||||||||||||||||||||||||||||||||
Presidio Landmark |
San Francisco, CA | D | Q3-10 | 100.0 | % | 100.0 | % | $ | 103.7 | $ | 103.7 | $ | 103.7 | 161 | 38 | % | ||||||||||||||||||||||
Total 2010 (f) |
$ | 339.7 | $ | 944.5 | $ | 512.3 | ||||||||||||||||||||||||||||||||
Prior Two Years Openings (17) |
||||||||||||||||||||||||||||||||||||||
Retail Centers: |
||||||||||||||||||||||||||||||||||||||
Promenade in Temecula Expansion |
Temecula, CA | D | Q1-09 | 75.0 | % | 100.0 | % | $ | 113.4 | $ | 113.4 | $ | 113.4 | 127,000 | 127,000 | 83 | % | |||||||||||||||||||||
Orchard Town Center |
Westminster, CO | D | Q1-08 | 100.0 | % | 100.0 | % | 148.3 | 148.3 | 148.3 | 980,000 | 565,000 | 82 | % | ||||||||||||||||||||||||
Shops at Wiregrass |
Tampa, FL | D | Q3-08 | 50.0 | % | 100.0 | % | 147.5 | 147.5 | 147.5 | 642,000 | 352,000 | 93 | % | ||||||||||||||||||||||||
White Oak Village |
Richmond, VA | D | Q3-08 | 50.0 | % | 100.0 | % | 66.1 | 66.1 | 66.1 | 800,000 | 294,000 | 76 | % | ||||||||||||||||||||||||
$ | 475.3 | $ | 475.3 | $ | 475.3 | 2,549,000 | 1,338,000 | |||||||||||||||||||||||||||||||
Office: |
||||||||||||||||||||||||||||||||||||||
818 Mission Street (d) |
San Francisco, CA | A | Q1-08 | 50.0 | % | 50.0 | % | $ | 0.0 | $ | 15.8 | $ | 7.9 | 28,000 | 80 | % | ||||||||||||||||||||||
Johns Hopkins - 855 North Wolfe Street |
East Baltimore, MD | D | Q1-08 | 76.6 | % | 76.6 | % | 89.8 | 89.8 | 68.8 | 279,000 | 84 | % | |||||||||||||||||||||||||
Mesa Del Sol Aperture Center (d) |
Albuquerque, NM | D | Q4-08 | 47.5 | % | 47.5 | % | 0.0 | 16.2 | 7.7 | 74,000 | 16 | % | |||||||||||||||||||||||||
Mesa Del Sol Fidelity (d) (g) |
Albuquerque, NM | D | Q4-08/Q3-09 | 47.5 | % | 47.5 | % | 0.0 | 20.4 | 9.7 | 210,000 | 100 | % | |||||||||||||||||||||||||
$ | 89.8 | $ | 142.2 | $ | 94.1 | 591,000 | ||||||||||||||||||||||||||||||||
Residential (h): |
||||||||||||||||||||||||||||||||||||||
North Church Towers |
Parma Heights, OH | A | Q3-09 | 100.0 | % | 100.0 | % | $ | 5.0 | $ | 5.0 | $ | 5.0 | 399 | 90 | % | ||||||||||||||||||||||
DKLB BKLN (formerly 80 DeKalb) (g) |
Brooklyn, NY | D | Q4-09/10 | 80.0 | % | 100.0 | % | 157.8 | 157.8 | 157.8 | 365 | 99 | % | |||||||||||||||||||||||||
Lucky Strike |
Richmond, VA | D | Q1-08 | 100.0 | % | 100.0 | % | 35.2 | 35.2 | 35.2 | 131 | 95 | % | |||||||||||||||||||||||||
Uptown Apartments (d) (g) |
Oakland, CA | D | Q1-08/Q4-08 | 50.0 | % | 50.0 | % | 0.0 | 177.6 | 88.8 | 665 | 90 | % | |||||||||||||||||||||||||
Mercantile Place on Main (g) |
Dallas, TX | D | Q1-08/Q4-08 | 100.0 | % | 100.0 | % | 87.6 | 87.6 | 87.6 | 366 | 89 | % | |||||||||||||||||||||||||
Barrington Place (d) |
Raleigh, NC | A | Q3-08 | 49.0 | % | 49.0 | % | 0.0 | 23.7 | 11.6 | 274 | 87 | % | |||||||||||||||||||||||||
Legacy Arboretum (d) |
Charlotte, NC | A | Q3-08 | 49.0 | % | 49.0 | % | 0.0 | 23.1 | 11.3 | 266 | 93 | % | |||||||||||||||||||||||||
Hamel Mill Lofts (g) |
Haverhill, MA | D | Q4-08/Q2-09 | 100.0 | % | 100.0 | % | 76.9 | 76.9 | 76.9 | 305 | 94 | % | |||||||||||||||||||||||||
Legacy Crossroads (d) (g) |
Cary, NC | A/D | Q4-08/Q3-09 | 50.0 | % | 50.0 | % | 0.0 | 35.6 | 17.8 | 344 | 94 | % | |||||||||||||||||||||||||
$ | 362.5 | $ | 622.5 | $ | 492.0 | 3,115 | ||||||||||||||||||||||||||||||||
Total Prior Two Years Openings (k) |
$ | 927.6 | $ | 1,240.0 | $ | 1,061.4 | ||||||||||||||||||||||||||||||||
Total 2009 |
$ | 276.2 | $ | 276.2 | $ | 276.2 | ||||||||||||||||||||||||||||||||
Total 2008 |
651.4 | 963.8 | 785.2 | |||||||||||||||||||||||||||||||||||
$ | 927.6 | $ | 1,240.0 | $ | 1,061.4 | |||||||||||||||||||||||||||||||||
See attached footnotes.
Projects Under Construction as of January 31, 2011 (4)
Cost at FCE | ||||||||||||||||||||||||||||||||||||
Pro-Rata | Cost at Full | Total Cost | Pro-Rata Share | Sq. ft./ | Gross | |||||||||||||||||||||||||||||||
Anticipated | FCE Legal | FCE % (a) | Consolidation | at 100 % | (Non-GAAP) (c) | No. of | Leasable | Lease | ||||||||||||||||||||||||||||
Property | Location | Opening | Ownership % (a) | (1) | (GAAP) (b) | (2) | (1) X (2) | Units | Area | Commitment % | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||
Retail Centers: |
||||||||||||||||||||||||||||||||||||
Westchesters Ridge Hill (g) |
Yonkers, NY | 2011/2012 | 70.0 | % | 100.0 | % | $ | 827.4 | $ | 827.4 | $ | 827.4 | 1,336,000 | 1,336,000 | (l) | 45 | % | |||||||||||||||||||
Residential: |
||||||||||||||||||||||||||||||||||||
8 Spruce Street (formerly
Beekman) (g) |
Manhattan, NY | Q1-11/12 | 49.0 | % | 70.0 | % | $ | 875.7 | $ | 875.7 | $ | 613.0 | 903 | 6 | % (m) | |||||||||||||||||||||
Foundry Lofts |
Washington, D.C. | Q3-11 | 100.0 | % | 100.0 | % | 60.3 | 60.3 | 60.3 | 170 | ||||||||||||||||||||||||||
$ | 936.0 | $ | 936.0 | $ | 673.3 | 1,073 | ||||||||||||||||||||||||||||||
Arena: |
||||||||||||||||||||||||||||||||||||
Barclays Center |
Brooklyn, NY | 2012 | 26.6 | % | 26.6 | % | $ | 904.3 | $ | 904.3 | $ | 240.5 | 670,000 | 18,000 seats | (n) | 55 | % (o) | |||||||||||||||||||
Total Under Construction (p) |
$ | 2,667.7 | $ | 2,667.7 | $ | 1,741.2 | ||||||||||||||||||||||||||||||
Fee Development: |
Sq.ft. | |||||||||||||||||||||||||||||||||||
Las Vegas City Hall |
Las Vegas, NV | Q1-12 | | (q) | | (q) | $ | 0.0 | $ | 146.2 | $ | 0.0 | 270,000 | |||||||||||||||||||||||
FOOTNOTES | ||
( a ) | As is customary within the real estate industry, the Company invests in certain real estate projects through joint ventures. For some of these projects, the Company provides funding at percentages that differ from the Companys legal ownership. | |
( b ) | Amounts are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100 percent if we are deemed to have control or to be the primary beneficiary of our investments in the variable interest entity (VIE). | |
( c ) | Cost at pro-rata share represents Forest Citys share of cost, based on the Companys pro-rata ownership of each property (a non-GAAP measure). Under the pro-rata consolidation method of accounting the Company determines its pro-rata share by multiplying its pro-rata ownership by the total cost of the applicable property. | |
( d ) | Reported under the equity method of accounting. This method represents a GAAP measure for investments in which the Company is not deemed to have control or to be the primary beneficiary of our investments in a VIE. | |
( e ) | The cost of the property also includes construction of the 1,248-space parking garage and structural upgrades to accommodate a possible future residential project above the retail center. This also includes Costco which opened Q4-09. | |
( f ) | The difference between the full consolidation cost amount (GAAP) of $339.7 million to the Companys pro-rata share (a non-GAAP measure) of $512.3 million consists of a reduction to full consolidation for noncontrolling interest of $129.8 million of cost and the addition of its share of cost for unconsolidated investments of $302.4 million. | |
( g ) | Phased-in openings. Costs are representative of the total project. | |
( h ) | The lease percentage for the residential properties represents the occupancy as of January 31, 2011. | |
( i ) | Includes 89,000 square feet of office space. | |
( j ) | Includes 85,000 square feet of retail space. | |
( k ) | The difference between the full consolidation cost amount (GAAP) of $927.6 million to the Companys pro-rata share (a non-GAAP measure) of $1,061.4 million consists of a reduction to full consolidation for noncontrolling interest of $21.0 million of cost and the addition of its share of cost for unconsolidated investments of $154.8 million. | |
( l ) | Includes 156,000 square feet of office space. | |
( m ) | As of March 29, 2011, 53 leases have been signed since appointments with prospective residents began on February 18, 2011. | |
( n ) | The Nets, a member of the NBA, has a 37 year license agreement to use the arena. | |
( o ) | Represents the percentage of forecasted contractually obligated arena income that is under contract. Contractually obligated income, which include revenue from naming rights, sponsorships, suite licenses, Nets minimum rent and food concession agreements, accounts for 72% of total forecasted revenues for the Arena. | |
( p ) | The difference between the full consolidation cost amount (GAAP) of $2,667.7 million to the Companys pro-rata share (a non-GAAP measure) of $1,741.2 million consists of a reduction to full consolidation for noncontrolling interest of $926.5 million. | |
( q ) | This is a fee development project, owned by the City of Las Vegas. Therefore, these costs are not included on the full consolidation or pro-rata balance sheet. |
Equity Requirements for Projects Under Construction (a)
As of January 31, 2011
As of January 31, 2011
Less | Plus | |||||||||||||||||||||||
Unconsolidated | Full | Less | Unconsolidated | Pro-Rata | ||||||||||||||||||||
Investments | Consolidation | Noncontrolling | Investments | Consolidation | ||||||||||||||||||||
100% | at 100% | (GAAP) (b) | Interest | at Pro-Rata | (Non-GAAP) (c) | |||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||
Total Cost Under Construction |
$ | 2,667.7 | $ | | $ | 2,667.7 | $ | 926.5 | $ | | $ | 1,741.2 | ||||||||||||
Total Loan Draws and Other Sources at Completion
(d) |
1,873.3 | | 1,873.3 | 664.5 | | 1,208.8 | ||||||||||||||||||
Net Equity at Completion |
794.4 | | 794.4 | 262.0 | | 532.4 | ||||||||||||||||||
Net Costs Incurred to Date (e) |
1,667.9 | | 1,667.9 | 461.2 | | 1,206.7 | ||||||||||||||||||
Loan Draws and Other Sources to Date (e) |
914.9 | | 914.9 | 199.2 | | 715.7 | ||||||||||||||||||
Net Equity to Date (e) |
753.0 | | 753.0 | 262.0 | | 491.0 | ||||||||||||||||||
% of Total Equity |
95 | % | 95 | % | 92 | % | ||||||||||||||||||
Remaining Costs |
999.8 | | 999.8 | 465.3 | | 534.5 | ||||||||||||||||||
Remaining Loan Draws and Other Sources (f) |
958.4 | | 958.4 | 465.3 | | 493.1 | ||||||||||||||||||
Remaining Equity |
$ | 41.4 | $ | | $ | 41.4 | $ | | $ | | $ | 41.4 | ||||||||||||
% of Total Equity |
5 | % | 5 | % | 8 | % |
(a ) | This schedule includes only the four properties listed on the previous page. This does not include costs associated with phased-in units, operating property renovations and military housing. | |
(b) | Amounts are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100 percent if we are deemed to have control or to be the primary beneficiary of our investments in the variable interest entity (VIE). | |
(c) | Cost at pro-rata share represents Forest Citys share of cost, based on the Companys pro-rata ownership of each property (a non-GAAP measure). Under the pro-rata consolidation method of accounting the Company determines its pro-rata share by multiplying its pro-rata ownership by the total cost of the applicable property. | |
(d) | Other Sources includes estimates of third party subsidies and tax credit proceeds. The timing and the amounts may differ from our estimates. | |
(e) | Reflects activity through January 31, 2011 | |
(f) | One of the loan commitments require specific leasing hurdles to be achieved prior to drawing the final amount of the loan. The Company estimates that approximately $45.0 million at 100% and at full consolidation, and $31.5 million at pro-rata consolidation of loan commitments are at risk should these leasing hurdles not be achieved. |
Projects Under Development
January 31, 2011
January 31, 2011
Below is a summary of our active large scale development projects, which have yet to commence
construction, often referred to as our shadow pipeline which are crucial to our long-term growth.
While we cannot make any assurances on the timing or delivery of these projects, our track record
speaks to our ability to bring large, complex, projects to fruition when there is demand and
available construction financing. The projects listed below represent pro-rata costs of $566.6
million ($859.0 million at full consolidation) of Projects Under Development (PUD) on our
balance sheet and pro-rata mortgage debt of $111.4 million ($190.1 million at full consolidation).
1) Atlantic Yards Brooklyn, NY
Atlantic Yards is adjacent to the state-of-the art arena, the Barclays Center, which is
designed by the award-winning firms Ellerbe Becket and SHoP Architects and is currently under
construction. In addition, Atlantic Yards will feature more than 6,400 units of housing, including
over 2,200 affordable units, approximately 250,000 square feet of retail space, and more than 8
acres of landscaped open space.
2) LiveWork Las Vegas Las Vegas, NV
LiveWork Las Vegas is a mixed-use project on a 12.7-acre parcel in downtown Las Vegas. At
full build-out, the project will have a new 260,000-square-foot City Hall for Las Vegas, a fee
development project, and is also expected to include up to 1 million square feet of office space
and approximately 300,000 square feet of retail.
3) The Yards Washington, D.C.
The Yards is a 42-acre mixed-use project, located in the neighborhood of the Washington
Nationals baseball park in Southeast D.C. The full development is expected to include up to 2,700
residential units, 1.8 million square feet of office space, and 300,000 square feet of retail and
dining space. The Yards features a 5.5-acre publicly funded public park that is a gathering place
and recreational focus for the community. The first residential building, Foundry Lofts, commenced
construction in August 2010.
4) Colorado Science + Technology Park at Fitzsimons Aurora, CO
The 184-acre Colorado Science + Technology Park at Fitzsimons is becoming a hub for the
biotechnology industry in the Rocky Mountain region. Anchored by the University of Colorado at
Denver Health Science Center, the University of Colorado Hospital and The Denver Childrens
Hospital, the park will offer cost-effective lease rates; build-to-suit office and research sites;
and flexible lab and office layouts in a cutting-edge research park. The park is also adjacent to
Forest Citys 4,700-acre Stapleton mixed-used development.
5) The Science + Technology Park at Johns Hopkins Baltimore, MD
The 31-acre Science + Technology Park at Johns Hopkins is a new center for collaborative
research directly adjacent to the world-renowned Johns Hopkins medical and research complex.
Initial plans call for 1.1 million square feet in five buildings, with future phases that could
support additional expansion. In 2008, the Company opened the first of those buildings, 855 North
Wolfe Street, a 279,000-square-foot office building anchored by the Johns Hopkins School of
Medicines Institute for Basic Biomedical Sciences.
6) Waterfront Station Washington, D.C.
Located in Southwest Washington, Waterfront Station is adjacent to the Waterfront/Southeastern
University MetroRail station. Waterfront Station is expected to include 1.2 million square feet of
office space, an estimated 350 residential units and 125,000 square feet of stores and restaurants.
The projects first two government office buildings total 631,000 square feet of office, opened in
Q1 2010, and included ground-level retail space. The West 4th St Building received LEED Gold
certification and the East 4th St Building is expected to meet LEED Silver standards at a minimum.
The office component is fully leased to the District of Columbia for governmental offices and the
retail space is also substantially leased.
7) 300 Massachusetts Avenue Cambridge, MA
Located in the science and technology hub of Cambridge, MA, the 300 Massachusetts Avenue block
represents an expansion of University Park @ MIT. In a 50/50 partnership with MIT, Forest City is
presently focused on a project that reflects a development program of approximately 260,000 square
feet of lab and office space. Potential redevelopment of the entire block is possible with the
acquisition of adjacent parcels in future phases, and would result in an approximately 400,000
square foot project.
Military Housing as of January 31, 2011
Below is a summary of our equity method investments for Military Housing Development projects.
The Company provides development, construction and management services for these projects and
receives agreed upon fees for these services. The following phases still have a percentage of
units under construction:
Anticipated | FCE | Cost at Full | Total Cost | No. | ||||||||||||||
Property | Location | Opening | Pro-Rata % | Consolidation | at 100% | of Units | ||||||||||||
(in millions) | ||||||||||||||||||
Military Housing (7) |
||||||||||||||||||
Pacific Northwest Communities |
Seattle, WA | 2007-2011 | * | $ | 0.0 | $ | 280.5 | 2,985 | ||||||||||
Marines, Hawaii Increment II |
Honolulu, HI | 2007-2011 | * | 0.0 | 292.7 | 1,175 | ||||||||||||
Navy, Hawaii Increment III |
Honolulu, HI | 2007-2011 | * | 0.0 | 464.8 | 2,520 | ||||||||||||
Navy Midwest |
Chicago, IL | 2006-2012 | * | 0.0 | 200.3 | 1,401 | ||||||||||||
Midwest Millington |
Memphis, TN | 2008-2012 | * | 0.0 | 33.1 | 318 | ||||||||||||
Air Force Academy |
Colorado Springs, CO | 2007-2013 | 50.0% | 0.0 | 69.5 | 427 | ||||||||||||
Hawaii Phase IV |
Kaneohe, HI | 2007-2014 | * | 0.0 | 475.1 | 1,141 | ||||||||||||
Total Military Housing |
$ | 0.0 | $ | 1,816.0 | 9,967 | |||||||||||||
* | The Companys share of residual cash flow ranges from 0-20% during the life cycle of the project. |
Recent commitment not yet closed
Air Force Southern Group was awarded on August 30, 2010. We are currently in exclusive
negotiations with the Air Force. This project is expected to include 2,185 end state units at
four Air Force bases in Sumter, SC, Manchester, TN, Charleston, SC and Biloxi, MS. There are 330
financially excluded units that will not be encumbered by debt and which may be removed from the
end state at the sole discretion of the Air Force. The financial closing of the project and
commencement of construction are expected in mid 2011.
Development fees related to our military housing projects are earned based on a contractual
percentage of the actual development costs incurred. We also recognize additional development
incentive fees upon successful completion of certain criteria, such as incentives to realize
development cost savings, encourage small and local business participation, comply with specified
safety standards and other project management incentives as specified in the development
agreements. NOI from development and development incentive fees is $746,000 and $5,883,000 for the
three months and year ended January 31, 2011, respectively, and $4,550,000 and $11,169,000 for the
three months and year ended January 31, 2010, respectively.
Construction management fees are earned based on a contractual percentage of the actual
construction costs incurred. We also recognize certain construction incentive fees based upon
successful completion of certain criteria as set forth in the construction contracts. NOI from
construction and incentive fees is $880,000 and $5,634,000 for the three months and year ended
January 31, 2011, respectively, and $2,474,000 and $8,783,000 recognized during the three months
and year ended January 31, 2010, respectively.
Property management and asset management fees are earned based on a contractual percentage of the
annual net rental income and annual operating income, respectively, that is generated by the
military housing privatization projects as defined in the agreements. We also recognize certain
property management incentive fees based upon successful completion of certain criteria as set
forth in the property management agreements. Property management, management incentive and asset
management fees generated NOI of $3,060,000 and $12,865,000 during the three months and year ended
January 31, 2011, respectively, and $3,025,000 and $12,073,000 during the three months and year
ended January 31, 2010, respectively.
Land Held for Development or Sale as of January 31, 2011
The Land Development Group acquires and sells raw land and sells fully-entitled developed lots to
residential, commercial, and industrial customers. The Land Development Group also owns and
develops raw land into master-planned communities, mixed-use projects and other residential
developments. Below is a summary of our large Land Develoment projects.
Gross | Saleable | Option | ||||||||||
Location | Acres (1) | Acres (2) | Acres (3) | |||||||||
Stapleton Denver, CO |
254 | 156 | 1,369 | |||||||||
Mesa del Sol Albuquerque, NM |
3,023 | 1,659 | 5,731 | |||||||||
Central Station Chicago, IL |
30 | 30 | | |||||||||
Texas |
2,615 | 2,357 | | |||||||||
Florida |
1,412 | 1,412 | | |||||||||
Carolinas |
1,349 | 1,029 | 788 | |||||||||
Ohio |
996 | 663 | 470 | |||||||||
Arizona |
938 | 514 | | |||||||||
Other |
798 | 789 | | |||||||||
Total |
11,415 | 8,609 | 8,358 | |||||||||
(1) | Represent all acres currently owned including those used for roadways, open spaces and parks. | |
(2) | Saleable acres represent the total of all acres currently owned that will be available for sales. The Land Development Group may choose to further develop some of the acres into completed sublots prior to sale. | |
(3) | Option acres are those acres that the Land Development Group has a formal option to acquire. Typically these options are in the form of purchase agreements with contingencies for the satisfaction of due diligence reviews. |
Stapleton Denver, CO
Stapleton represents one of the nations 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, a
projected 3 million square-feet of retail and 10 million square-feet of office/research and
development/industrial space. Centrally located 10 minutes east of Downtown Denver and 20 minutes
from Denver International Airport, Stapleton will be home to 30,000 residents and 35,000 workers
when complete.
Mesa del Sol Albuquerque, NM
Mesa del Sol is a 20-square mile, mixed-use community on the south mesa of Albuquerque, N.M., five
minutes from the Albuquerque International Airport. Mesa del Sols master plan calls for mixed-use
development that will include 1,400 acres for industrial/commercial and office development use,
4,400 acres for residential and supporting retail use, 3,200 acres for open space and parks and 800
acres for schools and universities.
Central Station Chicago, IL
Located adjacent to the citys Museum Campus, and just minutes from the heart of Chicagos Loop,
the 80-acre Central Station is one of the fastest growing residential community in the city, with
more than 3,656 residential units completed and occupied, 573 units completed and listed for sale
and another 4,000 units in development. Central Station, a 14 million-square-foot development, is
being developed in partnership with The Fogelson Companies.
Land Held for Development or Sale as of January 31, 2011 (continued)
Other Significant Land Holdings
Legacy Lakes Aberdeen, NC
Legacy Lakes is a master-planned community located in the Pinehurst area. This community is
surrounding the Nicklaus-designed Legacy Golf Course. Legacy Lakes is 405 acres and includes 718
residential lots. Of the 405 total acres, 264 are saleable acres and 11 acres have been sold to
date.
Gladden Farms Marana, AZ
Gladden Farms is a master-planned community that includes residential and commercial uses in a
suburban area of northwest Tucson. This community includes parks, trails and a school in a rural
setting. Gladden Farms is 1,350 acres and includes approximately 4,141 residential lots and 223
acres of commercial space. As of January 31, 2011, 1,262 lots and 100 commercial acres have been
sold. Of the 1,350 total acres, 904 are saleable acres and 432 acres have been sold to date.
Cotton Creek Mooresville, NC
Cotton Creek is a master-planned community located in a northern suburb of Charlotte, NC. This
community will feature a variety of attached and detached home sites, which will be sold to a mix
of national and local builders. Cotton Creek is 532 acres. When completed the development is
expected to produce approximately 1,300 residential lots.
Tangerine Crossing Tucson, AZ
Tangerine Crossing is a master-planned gated residential community with a major retail component on
the exterior in a desirable region of the Tucson metropolitan area. This community includes open
space, trails and recreation. Tangerine Crossing is 309 acres and includes 396 residential lots
and a 25-acre retail center. As of January 31, 2011, 201 lots and the 25 commercial acres have
been sold. Of the 309 total acres, 103 are saleable acres and 62 acres have been sold to date.
Three Stones Prosper, TX
Three Stones is a master-planned community of 2,031 acres located in the growth corridor north of
Dallas in the town of Prosper. The community is fully entitled and the plan includes approximately
3,090 single family lots, 600 units of attached housing, over 600 acres of parks and open space and
250 acres for commercial/retail use. A variety of single family lot sizes will be offered, as well
as a complete amenity center. The development of Phase 1 is expected to be completed in late 2012.
San Antonio Portfolio San Antonio, TX
Forest City owns four (4) multi-phase communities and finished lots in six (6) additional locations
in the San Antonio area, predominantly on the west side. Since January 2008, almost 900 of the
total 2,563 lots have been sold. The remaining portfolio is comprised of 510 finished lots and
1,164 undeveloped paper lots. Our San Antonio communities serve several different price ranges,
and all lots are under option contract to one of eight (8) different builders.
Woodforest Houston, TX
Woodforest, which is not included in the acres on the previous page, is an active, 3,000-acre
master planned community, is located in southern Montgomery County, north of Houston. Forest City
entered into this project last year through the formation of a new partnership with Johnson
Development, with Forest City providing capital for financing and development. The project is
zoned for 5,700 units and six (6) active home builders are currently involved with model homes in
place serving a wide range of prices. Over 200 home sales have occurred to date. The project is
being developed adjacent to the 27-hole Woodforest Golf Club that opened in 2001 and has been rated
one of the top courses in the state.