EX-12 3 l93888aex12.txt EXHIBIT 12
EXHIBIT 12 FOREST CITY ENTERPRISES, INC. STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES (IN THOUSANDS) ------------------------------------------------------- Fiscal Year Ended January 31, ------------------------------------------------------- Pro-Rata Full Consolidation(a) Consolidation(a) ------------------------------------------------------- 2002 2001 2000 1999 1998(b) ------------------------------------------------------- Earnings: Earnings from continuing operations before income taxes and extraordinary gain (excluding equity in earnings $107,623 $ 86,359 $ 59,851 $ 32,435 $ 3,386 of unconsolidated entities) Adjustments to earnings: Interest incurred, net of capitalized interest 178,580 182,544 139,865 124,601 136,322 Amortization of loan procurement costs 6,837 10,850 4,982 10,324 5,118 Previously capitalized interest amortized into earnings 5,364 4,925 4,791 4,291 3,939 Cash distributions from unconsolidated entities 69,213 82,100 66,679 47,228 354 Portion of rents representative of interest factor 3,927 4,951 3,609 3,336 2,771 ---------------------------------------------------- Earnings, as adjusted $371,544 $371,729 $279,777 $222,214 $151,890 =================================================== Fixed charges: Interest expensed $178,580 $182,544 $139,865 $124,601 $136,322 Interest capitalized 26,623 21,433 27,440 22,458 17,884 Amortization of loan procurement costs 6,837 10,850 4,982 10,324 5,118 Portion of rents representative of interest factor 3,927 4,951 3,609 3,336 2,771 ---------------------------------------------------- Total fixed charges $215,967 $219,778 $175,896 $160,719 $162,095 =================================================== Ratio of earnings to fixed charges (c) 1.72 1.69 1.59 1.38 -- ===================================================
(a) Effective January 31, 2001, the Company implemented a change in the presentation of its financial results. Prior to January 31, 2001, the Company used the pro-rata method of consolidation to report its partnership investments proportionate to its share of ownership for each line item of its consolidated financial statements. In accordance with the FASB's Emerging Issues Task Force Issue No. 00-1, "Investor Balance Sheet and Income Statement Display under the Equity Method for Investments in Certain Partnerships and Other Ventures," the Company can no longer use the pro-rata consolidation method for partnerships. Accordingly, partnership investments that were previously reported on the pro-rata method are not reported as consolidated at 100% if deemed under the Company's control, or otherwise on the equity method of accounting. (b) Total fixed charges exceeded the Company's adjusted earnings by $10 million for January 31, 1998. Earnings, as adjusted, includes income of $15 million from a lawsuit settlement related to Toscana, a California apartment project, and a $39 million loss related to the sale of Toscana ($36 million) and a partnership interest ($3 million), but does not include an extraordinary gain of $18 million related to the sale of Toscana. (c) The Company has other earnings from operations, principally from depreciation and amortization, that are available to cover fixed charges.