Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
COMMISSION FILE No 0-1743
THE ROUSE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0735512
------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (410) 992-6000
--------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- ---------------------
Common Stock (par value 1 cent per share) New York Stock Exchange
- -----------------------------------------
Series A Convertible Preferred Stock
- -------------------------------------
(par value 1 cent per share) New York Stock Exchange
- ----------------------------
9 1/4% Cumulative Quarterly Income Preferred
- --------------------------------------------
Securities New York Stock Exchange
- ----------
Securities registered pursuant to Section 12(g) of the Act:
NONE
----
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No ____
-----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. __
As of February 20, 1996, there were outstanding 47,922,749 shares of the
registrant's common stock, par value 1c, which is the only class of common or
voting stock of the registrant. As of that date, the aggregate market value of
the shares of common stock held by non-affiliates of the registrant (based on
the closing price as reported in The Wall Street Journal, Eastern Edition) was
----------------------------------------
approximately $906,134,036.
Documents Incorporated by Reference
The specified portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 1995 are incorporated by reference into Parts I, II and IV.
Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before
April 7, 1996 is incorporated by reference into Part III.
PART I
------
Item 1. Business.
Item 1(a). General Development of Business.
The Rouse Company (the "Company") was incorporated as a
business corporation under the laws of the State of Maryland in 1956. Its
principal offices are located at The Rouse Company Building, Columbia,
Maryland 21044. Its telephone number is (410) 992-6000. The Company,
through its subsidiaries and affiliates, is engaged in (i) the ownership,
management, acquisition and development of income-producing and other real
estate in the United States, including retail centers, office buildings,
mixed-use projects, community retail centers and two hotels, and the
management of one retail center in Canada, and (ii) the development and sale
of land to builders and other developers, primarily around Columbia,
Maryland, for residential, commercial and industrial uses.
RECENT DEVELOPMENTS. On February 27, 1996, the Company entered into certain
merger agreements whereby the Company agreed, subject to certain conditions,
to acquire The Hughes Corporation, a Delaware corporation ("THC"), its
affiliated partnership, Howard Hughes Properties, Limited Partnership
("HHPLP"), a Delaware limited partnership, and their subsidiaries and
affiliates. THC and HHPLP are primarily engaged in real estate management
and development. The assets of THC and its subsidiaries include four
large-scale, master-planned business parks (three in Las Vegas and one in
Los Angeles), a 75% partnership interest in a regional shopping center in
Las Vegas, a 22,500 acre master planned, new community in Las Vegas and
a number of other land parcels and commercial buildings in both Nevada
and Los Angeles.
The Company agreed to acquire all the capital stock of THC ("THC Common
Stock") through a merger of THC into a wholly owned subsidiary of the
Company (the "Merger"). The Company agreed to acquire the 48% of the
partnership interests of HHPLP which are not currently owned by THC through
a merger of another wholly owned subsidiary of the Company into HHPLP (the
"HHPLP Merger"). The purchase price includes debt presently encumbering the
assets of THC and its subsidiaries.
In the Merger, holders of THC Common Stock are to receive (i) shares of Rouse
Common Stock or, in the event that the number of shares of Rouse Common
Stock issuable in the Merger would otherwise exceed 19.9% of the currently
outstanding Rouse Common Stock, a combination of Rouse Common Stock and
cash, in each case having a value of $176.4 million, (ii) a note of up to
$15 million and (iii) contractual rights to receive additional shares of
Rouse Common Stock or, if the Company is
I-1
Item 1. Business, continued.
unable for any reason to deliver shares of Rouse Common Stock, shares of a
new series of increasing rate Preferred Stock, par value $0.01 per share, of
the Company over a period of up to 15 years following the consummation of
the Merger based upon certain formulas relating to the cash flow and
appraised value of certain assets of THC and its subsidiaries. The number
of shares to be issued in the Merger will be determined by the average
closing price of the stock for the 30 trading days ending five days prior to
the closing date subject to maximum and minimum prices.
Pursuant to the HHPLP Merger, holders of partnership interests in HHPLP (other
than THC) will be entitled to receive an amount of cash equal to (i) the sum
of (x) $40 million plus (y) the aggregate amount of cash and cash
equivalents held by THC and its subsidiaries at December 31, 1995 minus (ii)
certain expenses, subject to certain adjustments.
The transactions are conditioned upon approval by the requisite vote of the
holders of THC Common Stock and certain other closing conditions and,
accordingly, there can be no assurance that the transactions will be
consummated. See Exhibit 99.2 for a description of the risks related to
these transactions. The transactions are expected to close in the second
quarter of 1996.
I-2
Item 1. Business, continued.
Item 1(b). Financial Information About Industry Segments.
Information required by Item 1(b) is incorporated herein by
reference to note 13 of the notes to consolidated financial statements
included in the 1995 Annual Report to Shareholders.
As noted in Item 1(a), the Company is a real estate company
engaged in most aspects of the real estate industry, including the
management, acquisition and development of income-producing and other
properties, both retail and commercial, community development and
management, and land sales. These business segments are further described
below.
I-3
Item 1. Business, continued.
Item 1(c). Narrative Description of Business.
Operating Properties:
--------------------
As set forth in Item 2, at December 31, 1995, the 66 regional
retail centers owned, in whole or in part, or operated by subsidiaries or
affiliates of the Company, aggregated 21,435,000 square feet of leasable
space, including 1,067,000 square feet leased to department stores and
402,000 square feet of office space. The activities involved in operating
and managing retail centers include: negotiating lease terms with present
and prospective tenants, identifying and attracting desirable new tenants,
conducting local market and consumer research, developing and implementing
short- and long-term merchandising and leasing programs, assisting tenants
in the presentation of their merchandise and the layout of their stores and
storefronts, and maintaining the buildings and common areas.
In conjunction with other partners or investors, the Company
has a program of acquiring completed retail centers, with the Company having
management responsibility and earning incentive fees including, in some
instances, equity interests in the centers. The Company also has a program
of providing management services for centers developed and owned by others
under management agreements that also provide for incentive fees and, in
some instances, equity interests in the centers. As of December 31, 1995,
the Company managed 19 such centers, which are included in the figures in
the preceding paragraph and aggregated 6,097,000 square feet of leasable
space.
In addition to Columbia Mall, which is included in the figures
in the second preceding paragraph, The Howard Research And Development
Corporation ("HRD", a wholly-owned subsidiary of the Company) and its
subsidiaries own and/or manage 17 office and industrial buildings and retail
centers with 3,081,000 square feet of leasable office space, 8 village
centers with 824,000 square feet of leasable retail space and other
properties and additional commercial space, including the 289-room Columbia
Inn in Columbia, Maryland.
Other subsidiaries of the Company own, in whole or in part, and
operate 11 office buildings with a total of 2,685,000 square feet of
leasable space and the 146-room Cross Keys Inn located at The Village of
Cross Keys in Baltimore, Maryland. The Company also has a 5% interest in
Rouse-Teachers Properties, Inc., which owns 76 office/industrial buildings
with 5,101,000
I-4
Item 1. Business, continued.
Item 1(c). Narrative Description of Business, continued:
square feet of space and 308 acres of land. A wholly owned affiliate of the
Company is responsible for the operation, management and development of all
buildings and land owned by Rouse-Teachers Properties, Inc.
Development:
-----------
The Company renovates and expands existing retail centers and
develops suburban and downtown retail centers and mixed-use projects,
primarily for ownership. In addition, the Company is capable of serving as
the master developer for certain mixed-use projects, with the Company
generally owning at least the retail component of such projects. The
activities involved in the development, renovation and expansion of retail
centers and mixed-use projects include: initial market and consumer
research, evaluating and acquiring land sites, obtaining necessary public
approvals, engaging architectural and engineering firms to design the
project, estimating development costs, developing and testing pro forma
operating statements, selecting a general contractor, arranging construction
and permanent financing, identifying and obtaining department stores and
other tenants, negotiating lease terms, negotiating partnership and joint
venture agreements and promoting new, renovated or expanded retail centers
and mixed-use projects.
The Company and certain subsidiaries or affiliates are in the
construction or development stage of announced projects, primarily
expansions of existing centers.
Land Sales:
----------
HRD is the developing entity of Columbia, Maryland, which is
located in the Baltimore-Washington corridor. HRD owns approximately 1,837
saleable acres of land in and around Columbia, and, through its subsidiaries
and affiliates, develops and sells this land to builders and other
developers for residential, commercial and industrial uses. The Company,
through its subsidiaries and affiliates, also is presently involved in
community development and related land sales elsewhere in Maryland and is
developing for sale a parcel of land in California.
In all aspects of the Company's business pertaining to the
ownership, management, acquisition or development of income-producing and
other real estate, the Company operates in highly competitive markets. With
respect to the leasing and operation or management of developed properties,
each project faces
I-5
Item 1. Business, continued.
Item 1(c). Narrative Description of Business, continued:
market competition from existing and future developments in its geographical
market area. The Company competes with developers and other buyers with
respect to the acquisition of development sites or centers and for financing
opportunities in the money markets. The Company also faces competition in
and around Columbia, Maryland with respect to the development and sale of
land for residential, commercial and industrial uses.
Neither the Company's business, taken as a whole, nor any of
its industry segments, is seasonal in nature.
Federal, state and local statutes and regulations relating to
the protection of the environment have previously had no material effect on
the Company's business. Future development opportunities of the Company may
involve additional capital and other expenditures in order to comply with
such statutes and regulations. It is impossible at this time to predict
with any certainty the magnitude of any such expenditures or the long-range
effect, if any, on the Company's operations. Compliance with such laws has
had no material adverse effect on the operating results or competitive
position of the Company in the past; the Company anticipates that they will
have no material adverse effect on its future operating results or its
competitive position in the industry.
None of the Company's industry segments depends upon a single
customer or a few customers, the loss of which would have a materially
adverse effect on the segment. No customer accounts for 10 percent or more
of the consolidated revenues of the Company.
The Company and its subsidiaries had 4,283 full- and part-
time employees at December 31, 1995.
I-6
Item 2. Properties.
The Company leases its headquarters building (approximately 127,000 square
feet) in Columbia, Maryland for an initial term of 30 years which expires in
2003 with options for two 15-year renewal periods. The lease on the
headquarters building is accounted for as a capital lease.
Information respecting the Company's operating properties is incorporated
herein by reference to the "Projects of The Rouse Company" table on pages 58
through 62 of Exhibit 13 to this Form 10-K. In addition to the properties
presented in the table, the Company owned Outlet Square in Atlanta, Georgia
and Talbottown in Easton, Maryland as of December 31, 1995. These properties
were sold in February, 1996. The ownership of virtually all properties is
subject to mortgage financing. The table of projects includes retail centers
managed by the Company for a fee as identified in notes (c) and (d) to the
table. Excluding such managed centers, certain of the remaining properties
are subject to leases which provide an option to purchase (or repurchase) the
property and/or to renew the leases for one or more renewal periods. The
years of expiration indicated below assume all options to extend the terms of
the leases are exercised. The properties subject to such leases in whole or
in part are as follows:
Year of
Nature of expiration
Property interest of lease
- --------------------------- -------------------------- -------------
Arizona Center Leasehold Various dates
from 2017 to 2050
Augusta Mall Leasehold by joint venture 2068
Bayside Marketplace Leasehold by joint venture 2062
Columbia Mall, Inc. -
American City Building Leasehold and fee 2000
Columbia Mall, Inc. -
Columbia Cinema Leasehold and fee 2003
Columbia Mall, Inc. -
Exhibit Building Leasehold and fee 2012
Columbia Mall, Inc. -
Oakland Building Leasehold 2062
Echelon Mall Leasehold 2008
Faneuil Hall Marketplace Leasehold 2074
First National Bank Plaza Leasehold 2013
I-7
Item 2. Properties, continued.
Year of
Nature of expiration
Property interest of lease
- --------------------------- -------------------------- -------------
Franklin Park Leasehold and fee by
joint venture 2024
The Gallery at Market East Leasehold 2082
Governor's Square Leasehold by joint venture 2054
Greengate Mall Leasehold 2070
Harborplace Leasehold 2054
Harundale Mall Leasehold and fee owned
jointly with others 2059
Highland Mall Leasehold and fee by
joint venture 2070
The Jacksonville Landing Leasehold 2057
Mall St. Matthews Leasehold 2053
Midtown Square Leasehold 2055
Pioneer Place Leasehold 2076
Plymouth Meeting Leasehold and fee 2063
Riverwalk Leasehold by joint venture 2076
St. Louis Union Station Leasehold 2060
South Street Seaport Leasehold 2031
Tampa Bay Center Leasehold and fee 2047
Westlake Center Leasehold by joint venture 2043
I-8
Item 3. Legal Proceedings.
On November 6, 1990, Robert P. Guastella Equities, Inc. ("Plaintiff"), a former
tenant at the Riverwalk Shopping Center in New Orleans, Louisiana
("Riverwalk"), which is owned and operated by New Orleans Riverwalk
Associates, an affiliate of the Company ("NORA"), filed suit in the Civil
District Court of Orleans Parish, Louisiana against NORA, the Company, two
Company affiliates - Rouse-New Orleans, Inc. and New Orleans Riverwalk Limited
Partnership - and Connecticut General Life Insurance Company, which is a
general partner of NORA (collectively, "Defendants"). Plaintiff alleged that
Defendants breached Plaintiff's lease agreement with NORA for the operation of
a restaurant at Riverwalk by (i) failing to prevent the leased premises from
flooding, (ii) refusing to permit entertainment on the leased premises, (iii)
interfering with the operation of air conditioning equipment on the leased
premises and (iv) failing to provide adequate security. Plaintiff claimed
that as a result of these breaches it suffered losses and could not pay the
rentals due under the lease agreement, as a result of which the lease and its
tenancy were terminated by NORA. Plaintiff sought damages of approximately
$600,000 for these alleged breaches. In addition, on September 3, 1992,
Plaintiff claimed $33,000,000 for alleged lost future profits which it claimed
it would have earned had its lease not been terminated. All Defendants filed
answers denying the claims of Plaintiff and asserted other defenses. NORA
also asserted a counterclaim against Plaintiff and its guarantors, Robert
Guastella and Charles Kovacs, for past due rentals and other charges in the
approximate amount of $300,000 plus interest and attorneys' fees as provided
for in the lease agreement. The case was tried before a jury and, on October
28, 1993, the jury returned a verdict against Defendants upon which judgment
was entered by the trial court on January 7, 1994, in the total net amount of
approximately $9,128,000 (which included a net award for lost future profits
of approximately $8,640,000) plus interest from the date the suit was filed
and attorneys' fees in an amount to be determined. On May 6, 1994, the trial
court denied all post-trial motions of both Plaintiff and Defendants. The
trial court also entered an amended judgment in which it awarded Plaintiff
$450,000 in attorneys' fees and awarded Defendants $25,000 in attorneys' fees.
On May 23, 1994, Defendants appealed this judgment to the Louisiana Court of
Appeal, Fourth District. On November 16, 1995, the Louisiana Court of Appeal
in a 2 to 1 decision reduced the judgement by $240,000, but otherwise affirmed
the damage award to Plaintiff. Defendants subsequently filed a motion for
reconsideration with the Louisiana Court of Appeal, which was denied on
December 19, 1995, again in a 2 to 1 decision. On January 18, 1996,
Defendants filed a petition requesting the Louisiana Supreme Court to consider
a further appeal of this judgment. Plaintiff filed an opposition to this
petition on February 2, 1996, and Defendants submitted a reply brief on
February 21, 1996.
I-9
The Company recorded in the fourth quarter of 1995 a pre-tax provision in the
amount of $12,321,000, representing the full amount of the modified award
(including attorneys' fees) plus interest, less pre-tax provisions previously
recorded totaling $1,150,000. The Company believes that the ultimate
disposition of this matter will not have a material adverse effect on the
Company's consolidated financial position.
I-10
Item 4. Submission of Matters to a Vote of Security Holders.
None.
I-11
Directors and Executive Officers.
The executive officers of the Company as of March 1, 1996 are:
Present office and Date of election Business or professional
position with the or appointment to experience during the past five
Executive Officer Age Company present office years
- -------------------- --- ------------------------- ------------------ --------------------------------
Anthony W. Deering 51 President and 2/25/93 President and Chief Executive
Chief Executive Officer 2/23/95 Officer of the Company;
formerly President and Chief
Operating Officer of the
Company; and Executive Vice
President - Finance and
Administration and Chief
Financial Officer of the
Company
Jeffrey H. Donahue 49 Senior Vice-President, 9/23/93 Senior Vice-President and Chief
Chief Financial Officer 9/23/93 Financial Officer of the
and Director of the 8/17/93 Company and Director of the
Finance Division Finance Division; formerly
Vice-President and Treasurer of
the Company
Duke S. Kassolis 44 Senior Vice-President 9/23/93 Senior Vice-President and
and Director of Office 8/17/93 Director of Office and Mixed-
and Mixed-Use Operations Use Operations of the Company;
formerly Vice-President and
Director of Office and
Commercial Properties of the
Company
Paul I. Latta, Jr. 52 Senior Vice-President 9/23/93 Senior Vice-President and
and Director of Retail 8/17/93 Director of Retail Operations
Operations of the Company; formerly Vice-
President and Associate
Division Director, Operating
Properties Division of the
Company
I-12
Directors and Executive Officers, continued.
Present office and Date of election Business or professional
position with the or appointment to experience during the past five
Executive Officer Age Company present office years
- -------------------- --- ------------------------- ------------------ --------------------------------
Douglas A. McGregor 53 Executive Vice-President 8/17/93 Executive Vice-President for
for Development and Development and Operations of
Operations the Company; formerly Executive
Vice-President - Development
and Director of the Office and
Community Development Division
of the Company
Robert Minutoli 45 Senior Vice-President 9/23/93 Senior Vice-President and
and Director of 8/17/93 Director of Acquisitions of the
Acquisitions Company; formerly Vice-
President for Development of
the Company
Robert D. Riedy 50 Senior Vice-President 9/23/93 Senior Vice-President and
and Director of Retail 8/17/93 Director of Retail Leasing of
Leasing the Company; formerly Vice-
President for Development of
the Company
Alton J. Scavo 49 Senior Vice-President, 9/23/93 Senior Vice-President and
Director of the 8/17/93 Director of the Community
Community Development Development Division of the
Division and General Company and General Manager of
Manager of Columbia Columbia; formerly Vice-
President and Associate
Director of the Community
Development Division of the
Company
Jerome D. Smalley 46 Senior Vice-President 9/23/93 Senior Vice-President and
and Director of the 8/17/93 Director of the Commercial and
Commercial and Office Office Development Division of
Development Division the Company; formerly Vice-
President for Development
of the Company
I-13
Directors and Executive Officers, continued.
Present office and Date of election Business or professional
position with the or appointment to experience during the past five
Executive Officer Age Company present office years
- -------------------- --- ------------------------- ------------------ --------------------------------
George L. Yungmann 53 Senior Vice-President, 9/23/93 Senior Vice-President and
Controller and Director 7/26/72 Controller of the Company and
of the Controller's 7/26/72 Director of the Controller's
Division Division; formerly Vice-
President, Controller and
Director of the Controller's
Division
The term of office of each officer is until election of a successor or otherwise
at the pleasure of the Board of Directors.
There is no arrangement or understanding between any of the above-listed
officers and any other person pursuant to which any such officer was elected as
an officer.
None of the above-listed officers has any family relationship with any director
or other executive officer.
I-14
Part II
-------
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.
Information required by Item 5 is incorporated herein by reference to
page 46 of Exhibit 13.
Item 6. Selected Financial Data.
Information required by Item 6 is incorporated herein by reference to
page 46 of Exhibit 13.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Information required by Item 7 is incorporated herein by reference to
pages 47 through 53 of Exhibit 13.
Item 8. Financial Statements and Supplementary Data.
Financial Statements required by Item 8 are set forth in the Index to
Financial Statements and Schedules on page IV-2.
Supplementary data required by Item 8 are incorporated herein by
reference to page 46 of Exhibit 13.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
II-1
Part III
--------
The information required by Items 10, 11, 12 and 13 (except that information
regarding executive officers called for by Item 10 that is contained in Part I)
is incorporated herein by reference from the definitive proxy statement that the
Company intends to file pursuant to Regulation 14A on or before April 7, 1996.
III-1
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1 and 2. Financial Statements and Schedules:
Reference is made to the Index to Financial Statements and Schedules
on page IV-2.
3. Exhibits: Reference is made to the Exhibit Index.
(b) Reports on Form 8-K:
A report on Form 8-K was filed on November 20, 1995, to report the decision
of the Louisiana Court of Appeals in the litigation matter described in Item
3 -- Legal Proceedings and the Company's decision to record an additional
provision for loss relating to the matter.
IV-1
THE ROUSE COMPANY AND SUBSIDIARIES
Index to Financial Statements and Schedules
Page
----
Independent Auditors' Report IV-3
Report of Independent Real Estate Consultants included on
page 21 of Exhibit 13 incorporated herein by reference
Financial Statements:
The Rouse Company and Subsidiaries included on pages 22
through 45 of Exhibit 13 incorporated herein by reference:
Consolidated Cost Basis and Current Value Basis Balance Sheets
at December 31, 1995 and 1994
Consolidated Cost Basis Statements of Operations for the Years
Ended December 31, 1995, 1994 and 1993
Consolidated Cost Basis Statements of Shareholders' Equity for
the Years Ended December 31, 1995, 1994 and 1993
Consolidated Cost Basis Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Consolidated Current Value Basis Statements of Changes in
Revaluation Equity for the Years Ended December 31, 1995,
1994 and 1993
Notes to Consolidated Financial Statements
Schedules:
The Rouse Company and Subsidiaries as of December 31, 1995 or
for the years ended December 31, 1995, 1994 and 1993:
Schedule II Valuation and Qualifying Accounts IV-4
Schedule III Real Estate and Accumulated Depreciation IV-5
All other schedules have been omitted as not applicable or not required,
or because the required information is included in the consolidated
financial statements or notes thereto.
IV-2
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Shareholders
The Rouse Company:
We have audited the consolidated cost basis financial statements and the related
financial statement schedules of The Rouse Company and subsidiaries as listed in
the accompanying index. We have also audited the supplemental consolidated
current value basis financial statements listed in the index. These
consolidated financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated cost basis financial statements referred to
above present fairly, in all material respects, the financial position of The
Rouse Company and subsidiaries as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedules,
when considered in relation to the basic consolidated cost basis financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
As more fully described in note 1 to the consolidated financial statements, the
supplemental consolidated current value basis financial statements referred to
above have been prepared by management to present relevant financial information
about The Rouse Company and its subsidiaries which is not provided by the cost
basis financial statements and are not intended to be a presentation in
conformity with generally accepted accounting principles. In addition, as more
fully described in note 1, the supplemental consolidated current value basis
financial statements do not purport to present the net realizable, liquidation
or market value of the Company as a whole. Furthermore, amounts ultimately
realized by the Company from the disposal of properties may vary from the
current values presented.
In our opinion, the supplemental consolidated current value basis financial
statements referred to above present fairly, in all material respects, the
information set forth therein on the basis of accounting described in note 1 to
the consolidated financial statements.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
February 22, 1996
IV-3
Schedule II
-----------
THE ROUSE COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended December 31, 1995, 1994 and 1993
Additions
------------------------
Balance at Charged to Charged to Balance at
beginning costs and other end of
Descriptions of year expenses accounts Deductions year
------------ ---------- ---------- --------- ---------- ----------
(in thousands)
Year ended December 31, 1995:
Allowance for doubtful receivables $25,124 $ 3,318 $ - $3,974 /(1)/ $ 24,468
======= ====== ======= ====== =======
Valuation allowance - properties held
for sale $ - $15,589 $ - $ - $ 15,589
======= ======= ======= ====== ========
Pre-construction reserve $14,109 $ 3,800 $ - $2,530 /(2)/ $ 15,379
======= ======= ======= ====== ========
Year ended December 31, 1994:
Allowance for doubtful receivables $24,036 $ 5,185 $ - $4,097 /(1)/ $ 25,124
======= ======= ======= ====== ========
Valuation allowance - properties held
for sale $ - $ - $ - $ - $ -
======= ======= ======= ====== ========
Pre-construction reserve $12,822 $ 3,400 $ - $2,113 /(2)/ $ 14,109
======= ======= ======= ====== ========
Year ended December 31, 1993:
Allowance for doubtful receivables $23,129 $ 4,741 $ - $3,834 /(1)/ $ 24,036
======= ======= ======= ====== ========
Valuation allowance - properties held
for sale $ - $ - $ - $ - $ -
======= ======= ======= ====== ========
Pre-construction reserve $11,127 $ 2,900 $ - $1,205 /(2)/ $ 12,822
======= ======= ======= ====== ========
Notes:
(1) Balances written off as uncollectible.
(2) Costs of unsuccessful projects written off.
IV-4
Schedule III
------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- -------------------- ---------------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ------- -------- -------- -------- ---- -------- ------
(in thousands)
Operating Properties:
Woodbridge Center $135,701 $- $- $142,447 $- $26,301 $116,146 $142,447
Retail Center
Woodbridge, NJ
South Street Seaport 52,000 - - 140,480 - - 140,480 140,480
Retail Center
New York, NY
Arizona Center 120,847 97 - 137,058 - 97 137,058 137,155
Mixed-use project
Phoenix, AZ
Pioneer Place 97,875 - - 122,055 - - 122,055 122,055
Mixed-use project
Portland, OR
Westlake Center 95,351 10,582 - 101,658 - 10,582 101,658 112,240
Mixed-use project
Seattle, WA
The Gallery
at Harborplace 111,694 6,648 - 103,176 - 6,648 103,176 109,824
Mixed-use project
Baltimore, MD
Owings Mills 56,016 13,408 - 86,358 - 13,408 86,358 99,766
Retail Center
Baltimore, MD
Bayside Marketplace 84,375 - - 97,662 - - 97,662 97,662
Retail Center
Miami, FL
Mall St. Matthews 73,468 - - 91,599 - - 91,599 91,599
Retail Center
Louisville, KY
Life on
which
depreciation
Accumulated Date of in latest
depreciation completion income
and of Date statement is
amortization constrution acquired computed
------------ ----------- -------- ------------
(in thousands)
Operating Properties:
Woodbridge Center $19,099 3/71 N/A Note 8
Retail Center
Woodbridge, NJ
South Street Seaport 22,047 7/83 N/A Note 8
Retail Center
New York, NY
Arizona Center 18,889 11/90 N/A Note 8
Mixed-use project
Phoenix, AZ
Pioneer Place 17,752 3/90 N/A Note 8
Mixed-use project
Portland, OR
Westlake Center 19,716 10/88 N/A Note 8
Mixed-use project
Seattle, WA
The Gallery
at Harborplace 19,974 9/87 N/A Note 8
Mixed-use project
Baltimore, MD
Owings Mills 8,631 7/86 N/A Note 8
Retail Center
Baltimore, MD
Bayside Marketplace 14,496 4/87 N/A Note 8
Retail Center
Miami, FL
Mall St. Matthews 10,495 3/62 N/A Note 8
Retail Center
Louisville, KY
(Continued)
IV-5
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- -------------------- ---------------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ------- -------- -------- -------- ---- -------- ------
(in thousands)
Paramus Park 70,353 13,475 - 69,290 - 13,475 69,290 82,765
Retail Center
Paramus, NJ
White Marsh 58,202 2,627 - 72,887 - 2,627 72,887 75,514
Retail Center
Baltimore, MD
Santa Monica Place - 5,088 - 68,207 - 5,088 68,207 73,295
Retail Center
Santa Monica, CA
Riverwalk 10,252 - - 72,211 - - 72,211 72,211
Retail Center
New Orleans, LA
Oakwood Center 55,000 14,750 - 56,888 - 14,750 56,888 71,638
Retail Center
Gretna, LA
Faneuil Hall
Marketplace 54,871 - - 71,476 - - 71,476 71,476
Retail Center
Boston, MA
Cherry Hill Mall 86,713 14,767 - 56,221 - 14,767 56,221 70,988
Retail Center
Cherry Hill, NJ
Hulen Mall 66,058 5,064 - 63,953 - 5,064 63,953 69,017
Retail Center
Ft. Worth, TX
St. Louis
Union Station - - - 67,093 - - 67,093 67,093
Retail Center
St. Louis, MO
Life on
which
depreciation
Accumulated Date of in latest
depreciation completion income
and of Date statement is
amortization constrution acquired computed
------------ ----------- -------- ------------
(in thousands)
Paramus Park 5,196 3/74 N/A Note 8
Retail Center
Paramus, NJ
White Marsh 10,649 8/81 N/A Note 8
Retail Center
Baltimore, MD
Santa Monica Place 7,973 10/80 N/A Note 8
Retail Center
Santa Monica, CA
Riverwalk 10,400 8/86 N/A Note 8
Retail Center
New Orleans, LA
Oakwood Center 6,117 10/82 N/A Note 8
Retail Center
Gretna, LA
Faneuil Hall
Marketplace 8,619 8/76 N/A Note 8
Retail Center
Boston, MA
Cherry Hill Mall 15,506 10/61 N/A Note 8
Retail Center
Cherry Hill, NJ
Hulen Mall 7,790 8/77 N/A Note 8
Retail Center
Ft. Worth, TX
St. Louis
Union Station 14,734 8/85 N/A Note 8
Retail Center
St. Louis, MO
IV-6 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- ---------------- -----------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ---- -------- -------- -------- ---- -------- -----
(in thousands)
Echelon Mall 62,000 6,160 - 53,910 - 6,160 53,910 60,070
Retail Center
Voorhees, NJ
The Mall in Columbia 47,414 4,788 - 46,663 - 4,788 46,663 51,451
Retail Center
Columbia, MD
Blue Cross &
Blue Shield Building I 38,295 1,000 - 44,580 - 1,000 44,580 45,580
Office Building
Baltimore, MD
Harborplace 32,891 - - 44,398 - - 44,398 44,398
Retail Center
Baltimore, MD
Village of Cross Keys - 1,083 - 40,189 - 1,083 40,189 41,272
Mixed-use Project
Baltimore, MD
Northwest Mall 23,426 6,649 - 27,320 - 6,649 27,320 33,969
Retail Center
Houston, TX
The Jacksonville Landing 15,211 - - 33,401 - - 33,401 33,401
Retail Center
Jacksonville, FL
Tampa Bay Center 48,000 920 - 30,579 - 920 30,579 31,499
Retail Center
Tampa, FL
Salem Mall 36,929 1,285 - 29,010 - 1,285 29,010 30,295
Retail Center
Dayton, OH
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Echelon Mall 9,373 9/70 N/A Note 8
Retail Center
Voorhees, NJ
The Mall in Columbia 9,591 8/71 N/A Note 8
Retail Center
Columbia, MD
Blue Cross &
Blue Shield Building I 6,735 7/89 N/A Note 8
Office Building
Baltimore, MD
Harborplace 9,931 7/80 N/A Note 8
Retail Center
Baltimore, MD
Village of Cross Keys 14,305 9/65 N/A Note 8
Mixed-use Project
Baltimore, MD
Northwest Mall 5,458 10/68 N/A Note 8
Retail Center
Houston, TX
The Jacksonville Landing 8,455 6/87 N/A Note 8
Retail Center
Jacksonville, FL
Tampa Bay Center 8,719 8/76 N/A Note 8
Retail Center
Tampa, FL
Salem Mall 8,422 10/66 N/A Note 8
Retail Center
Dayton, OH
IV-7 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- ---------------- -----------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2 Land (note 3) Total
- ----------- ------- ---- -------- -------- -------- ---- -------- --------
(in thousands)
Governors Square 28,115 - - 30,288 - - 30,288 30,288
Retail Center
Tallahassee, FL
Almeda Mall - 4,641 - 24,961 - 4,641 24,961 29,602
Retail Center
Houston, TX
Gateway Commerce Center #20 - 6,200 - 22,279 - 6,200 22,279 28,479
Industrial Building
Columbia, MD
North Star - 168 - 28,063 - 168 28,063 28,231
Retail Center
San Antonio, TX
Augusta Mall 21,314 1,601 - 26,117 - 1,601 26,117 27,718
Retail Center
Augusta, GA
Beachwood Place 41,228 3,276 - 23,982 - 3,276 23,982 27,258
Retail Center
Beachwood, OH
Plymouth Meeting 16,831 702 - 25,856 - 702 25,856 26,558
Retail Center
Plymouth Meeting, PA
Alexander & Alexander
Building I 22,469 1,000 - 25,021 - 1,000 25,021 26,021
Office Building
Baltimore, MD
Perimeter Mall 25,791 3,006 - 22,682 - 3,006 22,682 25,688
Retail Center
Atlanta, GA
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Governors Square 3,926 8/79 N/A Note 8
Retail Center
Tallahassee, FL
Almeda Mall 6,132 10/68 N/A Note 8
Retail Center
Houston, TX
Gateway Commerce Center #20 3,350 N/A 8/93 Note 8
Industrial Building
Columbia, MD
North Star 6,761 9/60 N/A Note 8
Retail Center
San Antonio, TX
Augusta Mall 4,530 8/78 N/A Note 8
Retail Center
Augusta, GA
Beachwood Place 6,413 8/78 N/A Note 8
Retail Center
Beachwood, OH
Plymouth Meeting 10,672 2/66 N/A Note 8
Retail Center
Plymouth Meeting, PA
Alexander & Alexander
Building I 4,989 9/87 N/A Note 8
Office Building
Baltimore, MD
Perimeter Mall 5,574 8/71 N/A Note 8
Retail Center
Atlanta, GA
IV-8 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- ----------------- ------------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ---- -------- -------- -------- ---- -------- -----
(in thousands)
Exton Square 8,683 3,173 - 22,054 - 3,173 22,054 25,227
Retail Center
Exton, PA
Ryland Group Headquarters 21,000 856 - 24,280 - 856 24,280 25,136
Office Building
Columbia, MD
The Gallery at
Market East - - - 23,785 - - 23,785 23,785
Retail Center
Philadelphia, PA
South Dekalb 772 3,534 - 18,849 - 3,534 18,849 22,383
Retail Center
Decatur, GA
Willowbrook 33,750 853 - 20,818 - 853 20,818 21,671
Retail Center
Wayne, NJ
Franklin Park 24,500 653 - 20,652 - 653 20,652 21,305
Retail Center
Toledo, OH
The Grand Avenue 12,633 - - 20,447 - - 20,447 20,447
Retail Center
Milwaukee, WI
Columbia Inn 20,333 1,384 - 18,994 - 1,384 18,994 20,378
Hotel
Columbia, MD
Mondawmin 6,519 2,251 - 17,509 - 2,251 17,509 19,760
Retail Center
Baltimore, MD
RWD Building 11,544 2,596 - 16,038 - 2,596 16,038 18,634
Office Building
Columbia, MD
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Exton Square 7,481 3/73 N/A Note 8
Retail Center
Exton, PA
Ryland Group Headquarters 2,877 6/92 N/A Note 8
Office Building
Columbia, MD
The Gallery at
Market East 6,193 8/77 N/A Note 8
Retail Center
Philadelphia, PA
South Dekalb 3,359 7/78 N/A Note 8
Retail Center
Decatur, GA
Willowbrook 7,100 9/69 N/A Note 8
Retail Center
Wayne, NJ
Franklin Park 4,059 7/71 N/A Note 8
Retail Center
Toledo, OH
The Grand Avenue 8,457 8/82 N/A Note 8
Retail Center
Milwaukee, WI
Columbia Inn 5,792 6/72 N/A Note 8
Hotel
Columbia, MD
Mondawmin 5,755 1/78 N/A Note 8
Retail Center
Baltimore, MD
RWD Building 5,017 7/86 N/A Note 8
Office Building
Columbia, MD
IV-9 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- ---------------- -----------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ---- -------- -------- -------- ---- -------- --------
(in thousands)
Blue Cross &
Blue Shield Building II 14,000 1,000 - 16,616 - 1,000 16,616 17,616
Office Building
Baltimore, MD
Alexander &
Alexander Building II 12,989 650 - 16,711 - 650 16,711 17,361
Office Building
Baltimore, MD
Eastfield Mall 5,000 1,077 - 15,467 - 1,077 15,467 16,544
Retail Center
Springfield, MA
Highland Mall 7,157 12 - 16,525 - 12 16,525 16,537
Retail Center
Austin, TX
Parkside
Office Building 11,940 463 - 15,064 - 463 15,064 15,527
Columbia, MD
Midtown Square - - - 14,247 - - 14,247 14,247
Retail Center
Charlotte, NC
Gateway Commerce Center #2 - 1,947 - 10,360 - 1,947 10,360 12,307
Industrial Building
Columbia, MD
30 Corporate Center 12,917 1,160 - 10,461 - 1,160 10,461 11,621
Office Building
Columbia, MD
Amdahl Building 6,909 927 - 10,351 - 927 10,351 11,278
Office Building
Columbia, MD
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Blue Cross &
Blue Shield Building II 2,141 8/90 N/A Note 8
Office Building
Baltimore, MD
Alexander &
Alexander Building II 4,728 11/88 N/A Note 8
Office Building
Baltimore, MD
Eastfield Mall 4,976 4/68 N/A Note 8
Retail Center
Springfield, MA
Highland Mall 4,806 8/71 N/A Note 8
Retail Center
Austin, TX
Parkside
Office Building 2,644 11/89 N/A Note 8
Columbia, MD
Midtown Square 9,312 10/59 N/A Note 8
Retail Center
Charlotte, NC
Gateway Commerce Center #2 1,407 N/A 8/93 Note 8
Industrial Building
Columbia, MD
30 Corporate Center 3,512 4/86 N/A Note 8
Office Building
Columbia, MD
Amdahl Building 3,691 6/81 N/A Note 8
Office Building
Columbia, MD
IV-10 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
--------------- ---------------- -----------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ------- ---- -------- -------- -------- ---- --------- --------
(in thousands)
Hickory Ridge Village Center 9,583 907 - 10,174 - 907 10,174 11,081
Village Center
Columbia, MD
American City Building 3,282 - - 11,023 - - 11,023 11,023
Office Building
Columbia, MD
Dorsey's Search
Village Center 10,298 911 - 9,889 - 911 9,889 10,800
Village Center
Columbia, MD
10 Corporate Center 4,937 733 - 7,957 - 733 7,957 8,690
Office Building
Columbia, MD
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Hickory Ridge Village Center 1,049 6/92 N/A Note 8
Village Center
Columbia, MD
American City Building 7,770 3/69 N/A Note 8
Office Building
Columbia, MD
Dorsey's Search 1,833 9/89 N/A Note 8
Village Center
Village Center
Columbia, MD
10 Corporate Center 3,157 9/81 N/A Note 8
Office Building
Columbia, MD
IV-11 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
-------------------- ---------------- -----------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- -------- ---- -------- -------- -------- ---- -------- -----
(in thousands)
King's Contrivance
Village Center 7,665 1,072 - 7,348 - 1,072 7,348 8,420
Village Center
Columbia, MD
Metro Plaza 1,129 202 - 7,932 - 202 7,932 8,134
Retail Center
Baltimore, MD
Investments in
unconsolidated real
estate ventures 21,811 - 32,713 52,059 - - 84,772 84,772
Receivables under
finance leases - - - 81,632 - - 81,632 81,632
Other properties
and related investments
less than 5% of total 42,974 3,618 - 97,419 - 3,618 97,419 101,037
--------- ------- ------ --------- -------- ------- --------- ---------
Total Operating
Properties 2,001,015 158,964 32,713 2,814,679 - 185,265 2,821,091 3,006,356
--------- ------- ------ --------- -------- ------- --------- ---------
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of statement
amorti- constr- Date is
zation uction acquired computed
-------- ------- -------- ---------
(in thousands)
King's Contrivance
Village Center 2,167 6/86 N/A Note 8
Village Center
Columbia, MD
Metro Plaza 2,980 N/A 12/82 Note 8
Retail Center
Baltimore, MD
Investments in - Various Various Note 8
unconsolidated real
estate ventures
Receivables under
finance leases - Various Various Note 8
Other properties
and related investments
less than 5% of total 35,637 Various Various Note 8
-------
Total Operating 519,319
Properties -------
IV-12 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
---------------- ------------------ -----------------------------------
Buildings
Buildings and
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- -------- ---- -------- -------- --------- ---- --------- --------
(in thousands)
Properties in Development:
Arizona Center - - - 15,967 - - 15,967 15,967
Developed/developable land
under master lease
Phoenix, AZ
Beachwood Place Expansion - 1,149 - 9,326 - 1,149 9,326 10,475
Expansion of retail center
Beachwood, OH
White Marsh Expansion - 3,373 5,003 - - 3,373 5,003 8,376
Expansion of retail center
Baltimore, MD
Pre-construction costs -
Various projects - - - 21,463 - - 21,463 21,463
Pre-construction reserve - - - (15,379) - - (15,379) (15,379)
Other projects,
less than 5% of total 6,209 11,534 - 3,715 - 11,534 3,715 15,249
----- ------ ----- ------- ------- ------ ------- -------
Total Properties
in Development 6,209 16,056 5,003 35,092 - 16,056 40,095 56,151
----- ------ ----- ------- ------- ------ ------- -------
Properties held for
sale, less than 5%
of total - - - 22,602 - - 22,602 22,602
----- ------ ----- ------- ------- ------ ------- -------
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Arizona Center N/A N/A N/A Note 8
Developed/developable land
under master lease
Phoenix, AZ
Beachwood Place Expansion - N/A N/A Note 8
Expansion of retail center
Beachwood, OH
White Marsh Expansion - N/A 8/95 Note 8
Expansion of retail center
Baltimore, MD
Pre-construction costs -
Various projects N/A N/A N/A N/A
Pre-construction reserve N/A N/A N/A N/A
Other projects,
less than 5% of total N/A N/A N/A N/A
Total Properties
in Development
Properties held for
sale, less than 5%
of total N/A Various Various N/A
IV-13 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1995
----------------- -------------------- -----------------------------
Buildings
Buildings and
Emcum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ---------- ------- -------- -------- -------- -------- ---------- --------
(in thousands)
Land held for development and sale:
Columbia 12,633 53,000 - 55,714 - 108,714 - 108,714
Land in various
stages
of development
Columbia, MD
Canyon Springs - 16,000 - 8,716 - 24,716 - 24,716
Land held for
development
Riverside County, CA
Other properties,
less than 5% of total - 738 - - - 738 - 738
------ ------ ------- ---------- -------- -------- ---------- ---------
Total land held for
development and
sale 12,633 69,738 - 64,430 - 134,168 - 134,168
------ ------ ------- ---------- -------- -------- ---------- ----------
Total Property $2,019,857 $271,059 $37,716 $2,910,502 $ - $335,489 $2,883,788 $3,219,277
========== ======== ======= ========== ======== ======== ========== ==========
Life on
which
Accumu- depre-
lated ciation
depre- Date of in latest
ciation comple- income
and tion of state-
amorti- constr- Date ment is
zation uction acquired computed
------- ------ -------- --------
(in thousands)
Land held for development and sale:
Columbia N/A N/A 9/85 N/A s
Land in various
stages
of development
Columbia, MD
Canyon Springs N/A N/A 7/89 N/A
Land held for
development
Riverside County, CA
Other properties,
less than 5% of total N/A N/A Various N/A
--------
Total land held for N/A N/A Various N/A
development and sale --------
Total Property $519,319
========
IV-14 (Continued)
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Notes:
(1) Reference is made to notes 2, 3, 4, 5, 6, 7, 11, 15 and 18 to the
consolidated financial statements. Land was generally acquired one to
three years before completion of construction.
(2) The determination of these amounts is not practicable and, accordingly,
they are included in improvements.
(3) Buildings and improvements include deferred costs of $118,930,000 at
December 31, 1995.
(4) Encumbrances on office buildings are included in operating property
encumbrances.
(5) The changes in total cost of properties for the years ended December 31,
1995, 1994 and 1993 are as follows (in thousands):
1995 1994 1993
----------- ----------- -----------
Balance at beginning of year $3,144,015 $3,010,195 $2,827,379
Additions, at cost 73,155 88,260 88,973
Cost of properties acquired 78,605 93,705 106,048
Additions to land held for
development and sale 16,091 16,270 21,388
Cost of land sales (14,214) (15,804) (16,270)
Retirements, sales and other
dispositions (75,787) (30,049) (21,307)
Additions to pre-construction reserve (3,800) (3,400) (2,900)
Receivables under finance leases, net 224 (632) 8,061
Investments in unconsolidated real
estate ventures, net 16,577 (12,317) 4,255
Provision for loss on operating properties (15,589) (2,212) (5,432)
---------- ---------- ----------
Balance at end of year $3,219,277 $3,144,015 $3,010,195
========== ========== ==========
In 1995 non-cash consideration in the form of purchase money loans was given in
acquisitions of properties and investments in unconsolidated real estate
ventures of $64,175,000 and $21,811,000, respectively.
IV-15
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1995
Notes, continued:
(6) The changes in accumulated depreciation and amortization for the years ended
December 31, 1995, 1994 and 1993 are as follows (in thousands):
1995 1994 1993
--------- --------- ---------
Balance at beginning of year $490,158 $429,070 $375,903
Depreciation and amortization
charged to operations 73,062 74,186 70,200
Retirements, sales and other, net (43,901) (13,098) (17,033)
-------- -------- --------
Balance at end of year $519,319 $490,158 $429,070
======== ======== ========
(7) The aggregate cost of properties for Federal income tax purposes is
approximately $3,334,400,000 at December 31, 1995.
(8) Reference is made to note 2(c) to the consolidated financial statements for
information related to depreciation.
(9) Reference is made to note 15 to the consolidated financial statements for
information related to provisions for losses on real estate assets.
IV-16
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
The Rouse Company
By: /s/ Anthony W. Deering
-------------------------------------
Anthony W. Deering March 5, 1996
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Principal Executive Officer:
/s/ Anthony W. Deering
-------------------------------------
Anthony W. Deering March 5, 1996
President and Chief Executive Officer
Principal Financial Officer:
/s/ Jeffrey H. Donahue
-------------------------------------
Jeffrey H. Donahue March 5, 1996
Senior Vice President and
Chief Financial Officer
Principal Accounting Officer:
/s/ George L. Yungmann
-------------------------------------
George L. Yungmann March 5, 1996
Senior Vice President and Controller
IV-17
Board of Directors:
David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
Mathias J. DeVito, Juanita T. James, Hanne M. Merriman, Thomas J. McHugh, Roger
W. Schipke and Alexander B. Trowbridge.
By: /s/ Anthony W. Deering
--------------------------------
Anthony W. Deering March 5, 1996
For Himself and as
Attorney-in-fact for the
above-named persons
IV-18
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
The Board of Directors
The Rouse Company:
We consent to the incorporation by reference in the Registration Statements of
The Rouse Company on Form S-8 (Registration Nos. 2-68258, 2-83612, 33-56231, 33-
56233 and 33-56235) and Form S-3 (Registration Nos. 2-78898, 2-95596, 33-52458,
33-56646, 33-57347, 33-57584, 33-57707 and 33-63279) of our report dated
February 22, 1996, relating to the consolidated financial statements and related
schedules of The Rouse Company and subsidiaries as of December 31, 1995 and 1994
and for each of the years in the three-year period ended December 31, 1995,
which report appears in the Annual Report on Form 10-K of The Rouse Company for
the year ended December 31, 1995.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
March 5, 1996
IV-19
CONSENT OF INDEPENDENT REAL ESTATE CONSULTANTS
----------------------------------------------
The Board of Directors
The Rouse Company:
We consent to the incorporation by reference in the Registration
Statements of The Rouse Company (the "Company") on Form S-8 (Registration Nos.
2-68258, 2-83612, 33-56231, 33-56233 and 33-5625) and Form S-3 (Registration
Nos. 2-78898, 2-95596, 33-52458, 33-56646, 33-57347, 33-57584, 33-57707 and
33-63279) of our report dated February 22, 1996 on our concurrence with the
Company's estimates of the total current value of its equity and other interests
in certain real property owned and/or managed by the Company and its
subsidiaries as of December 31, 1995 and 1994, which report appears in the
Annual Report on Form 10-K of the Company for the year ended December 31, 1995.
LANDAUER ASSOCIATES, INC.
Deborah A. Jackson
Senior Vice President
Director of Retail Valuation
New York, New York
March 5, 1996
IV-20
Exhibit Index
Exhibit No.
- -----------
3 Articles of Incorporation and Bylaws
10 Material Contracts
11 Statement re computation of per share earnings
12.1 Ratio of earnings to fixed charges
12.2 Ratio of earnings to combined fixed charges and preferred
stock dividend requirements
13 Annual report to security holders
21 Subsidiaries of the Registrant
24 Power of Attorney
27 Financial Data Schedule
99 Additional Exhibits:
99.1 Form 11-K Annual Report of The Rouse Company
Savings Plan for the year ended December 31, 1995
99.2 Factors affecting future operating results