« Brooklyn at Eye Level: go see it | Main | Advocates says housing subsidy too high for CityPoint units, urge HDC to reconsider »
December 9, 2008
Forest City Financial News
Yesterday, Atlantic Yards developer Forest City Enterprises announced third-quarter results and the company's plans to suspend dividends (press release).
The Cleveland Plain Dealer, Forest City losses widen; CEO expects economy to get worse
In a nutshell, due to the recession and a write-off caused by the Lehman Brothers bankruptcy:
Forest City's quarterly loss hit $18.5 million, or 18 cents per share, compared to a loss of $10.8 million, or 11 cents per share, during the same quarter of last year. Earnings before depreciation, amortization and deferred taxes -- a performance measure known as EBDT -- fell to $44.1 million, or 42 cents per share, from $68.8 million, or 64 cents per share, during the three months that ended Oct. 31, 2007.
...
During the first nine months of the year, Forest City lost $67.1 million, or 65 cents per share, compared to $39.8 million, or 38 cents per share, at this time last year. EBDT fell to $148.4 million, or $1.39 per share, from $174.5 million, or $1.62 per share during the first nine months of 2007. Forest City attributed the drop to factors including losses on dropped development projects. The company also shouldered a larger share of pre-tax losses -- $16.8 million -- on the New Jersey Nets basketball team, of which Forest City is a 23 percent owner.
Atlantic Yards Report, Forest City suspends dividend, announces major slowdowns, reaffirms commitment to "key projects" (presumably AY)
Norman Oder considers how this news relates to the stalled Atlantic Yards project:
[P]resident and CEO Chuck Ratner, in a press release, indicated that the developer has not formally backed off Atlantic Yards: "We remain committed to projects already under construction and to key, high-profile developments in core markets."
While Forest City Ratner has stalled work at the Metropolitan Transportation Authority's Vanderbilt Yard, spuriously blaming it on litigation, the parent company's announcements yesterday suggested a need to conserve cash flow.
...
[G]iven that the developer's New York affiliate Forest City Ratner has already gained government approvals for Atlantic Yards, it's plausible to believe that Forest City is willing to hold on over the long-term.
...
On the other hand, the continued losses the company faces owning the New Jersey Nets, as well as the need to build a new arena to spike the team's now-sinking value, has to put pressure on Forest City to move forward.
Despite multiple setbacks, Oder believes that the project, in some form, still stands a chance of being built.
Posted by lumi at December 9, 2008 4:24 AM