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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31,1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE EQUIRED)
Commission File No 0-1743
THE ROUSE COMPANY
(Exact name of registrant as specified in its charter)
Maryland 52-0735512
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(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
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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 1c per share) New York Stock Exchange
- -------------------------------------
9 1/4% Cumulative Quarterly Income Preferred Securities New York Stock Exchange
- -------------------------------------------------------
Series B Convertible Preferred Stock New York Stock Exchange
- -------------------------------------
(par value 1c per share)
- --------------------------
Securities registered pursuant to Section 12(g) of the Act:
NONE
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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 17, 1998, there were outstanding 66,910,901 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 nonaffiliates of the registrant (based on the
closing price as reported in The Wall Street Journal, Eastern Edition) was
----------------------------------------
approximately $2,204,485,867
Documents Incorporated by Reference
The specified portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 1997 are incorporated by reference into Parts I, II, and IV.
Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before
April 3, 1998 is incorporated by reference into Part III.
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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,
affiliates and "Non-REIT Subsidiaries" (as defined below), is engaged or
has a material financial interest 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 in
Maryland, and Las Vegas, Nevada for residential, commercial and industrial
uses.
DEVELOPMENTS IN 1997
Election to be Taxed as a Real Estate Investment Trust and Related Matters
In December 1997, the Company determined that it would elect to be taxed as
a real estate investment trust (REIT) effective January 1, 1998. On
December 31, 1997, The Rouse Company Incentive Compensation Statutory
Trust (the "Trust"), an entity which is neither owned nor controlled by the
Company, acquired 91% of the voting common stock of certain subsidiary
companies for an aggregate consideration of $1,400,000. The Company
retained the remaining voting stock of the companies ("Non-REIT
Subsidiaries") and holds shares of nonvoting common and/or preferred stock
and, in certain cases, mortgage loans receivable from the Non-REIT
Subsidiaries which, taken together, comprise substantially all (at least
98%) of the financial interest in them.
As a result of its disposition of the majority voting interest in the Non-
REIT Subsidiaries, the Company began accounting for its investment in them
using the equity method effective December 31, 1997. Due to its continuing
financial interest in the Non-REIT Subsidiaries, the Company recognized
no gain for financial reporting purposes on the sales of stock and the Non-
REIT Subsidiaries did not adjust the cost basis of their assets and
liabilities.
I-2
Item 1. Business, continued.
The Company believes that it met the qualifications for REIT status as of
December 31, 1997, and it intends to continue to meet the qualifications in
the future and to distribute at least 100% of its REIT taxable income
(determined by taking into account any net operating loss deduction) to
stockholders in 1998 and subsequent years. Accordingly, management does
not believe that the Company will be liable for payment of income taxes
(except, possibly, in certain states) in those periods. The Company also
intends to elect to be subject to the "built-in gain" rules under which
taxes may be payable at the time and to the extent the net unrealized gains
on its assets at the date of conversion to REIT status are recognized in
taxable dispositions of such assets in the ten year period following
conversion. Due to the availability of the Company's net operating loss
carryforward (which was approximately $281,000,000 at December 31, 1997) to
offset any built-in gains which might be recognized, the potential for
making nontaxable dispositions, if necessary (e.g., like-kind exchanges of
properties), and the intent and ability of the Company to defer asset
dispositions to periods when related gains will not be subject to built-in
gains taxes, management does not believe that the Company will be liable
for payment of taxes on built-in gains during the ten year period. Based
on these considerations, management does not believe that the Company will
be liable for income taxes at the Federal level or in most states in which
it operates in future years. Accordingly, the Company eliminated
substantially all ($158,433,000) of the deferred tax assets and liabilities
it had recorded at December 31, 1997.
A summary of the principal assets and operations of the Non-REIT
Subsidiaries involved in the subject transactions is as follows:
a) Ownership and management of 14 office and industrial buildings, 10
community retail centers, a hotel and a major regional retail center
located in Columbia, Maryland.
b) Ownership and development of approximately 1,600 acres of saleable land
for residential and commercial uses in and around Columbia, Maryland, a
master planned community.
c) Ownership and development of approximately 10,400 acres of saleable
land for residential and commercial uses primarily in Summerlin,
Nevada, a master planned community, and Las Vegas, Nevada.
I-3
Item 1. Business, continued.
d) Ownership of management contracts for approximately 28 retail centers
and 71 office buildings.
e) Ownership interests in various other operating property and land
partnerships.
Item 1(b). Financial Information About Industry Segments.
Information required by Item 1(b) is incorporated herein by reference to note
10 of the notes to consolidated financial statements included in the 1997
Annual Report to Shareholders.
As noted in Item 1(a), the Company is a real estate company engaged, through
its subsidiaries, affiliates and having a material financial interest,
through its Non-REIT Subsidiaries, 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 development. These business segments
are further described below.
Item 1(c). Narrative Description of Business.
Operating Properties:
--------------------
As set forth in Item 2, at December 31, 1997, the 52 regional retail centers
owned, in whole or in part, or operated by subsidiaries or affiliates of
the Company or by Non-REIT Subsidiaries, aggregated 40,478,000 square feet,
including 23,472,000 square feet owned by or leased to department stores.
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 store fronts, and
maintaining the building and common areas.
In conjunction with other partners or investors, the Company, through its
subsidiaries and affiliates, acquires interests in completed retail
centers, with the Company (or, beginning December 31, 1997, Non-REIT
Subsidiaries) having management responsibility and earning incentive fees
including, in some instances, equity interests in the centers. Affiliates
of the Company (or, beginning December 31, 1997, Non-REIT Subsidiaries)
also provide management
I-4
Item 1. Business, continued.
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, 1997, Non-REIT
Subsidiaries of the Company managed 14 such centers, which are included in
the figures in the preceding paragraph and aggregated 10,586,000 square
feet of leasable space, 5,779,000 square feet of which was department store
space.
The Howard Research And Development Corporation ("HRD", a Non-REIT Subsidiary
of the Company) and its subsidiaries own and/or manage 14 office and
industrial buildings with 2,323,000 square feet of leasable space, 10
community retail centers with 962,000 square feet of leasable space, The
Mall in Columbia (which is included in the second preceding paragraph) and
other properties and additional commercial space, including the 289-room
Columbia Inn in Columbia, Maryland. Howard Hughes Properties, Limited
Partnership ("HHPLP", a majority owned affiliate of the Company) and its
subsidiaries and affiliates own and/or manage 59 office and industrial
buildings with 3,486,000 square feet of leasable space and other properties
in and around Las Vegas, Nevada and Los Angeles, California.
Other subsidiaries of the Company own and operate 5 mixed-use projects with a
total of 691,000 square feet of leasable retail space and 1,858,000 square
feet of leasable office space. Other subsidiaries of the Company own, in
whole or in part, 6 office buildings with total of 946,000 square feet of
leasable office space. The Company also has a 5% interest in Rouse-Teachers
Properties, Inc., which owns 29 office and industrial buildings with
4,601,000 square feet of space and 300 acres of land. A Non-REIT Subsidiary
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, through its subsidiaries, affiliates and Non-REIT Subsidiaries
renovates and expands existing retail centers and develops suburban and
downtown retail centers, mixed-use projects and master-planned business
parks, 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, mixed-use projects and master-planned business parks
include: initial market and consumer research, evaluating and acquiring
land sites, obtaining necessary public approvals, engaging architectural
and engineering
I-5
Item 1. Business, continued
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, mixed-use projects and master-planned business
parks.
The Company and certain subsidiaries, affiliates and Non-REIT Subsidiaries are
in the construction or development stage of announced projects, primarily
the construction of a new retail center in Orlando, Florida, expansions of
existing retail centers, expansions of existing mixed-use projects and
expansions of existing master-planned business parks in Las Vegas, Nevada.
Land Sales:
----------
HRD, which became a Non-REIT Subsidiary on December 31, 1997, is the
developing entity of Columbia, Maryland, which is located in the Baltimore-
Washington corridor. HRD owns approximately 2,000 developable acres (1,600
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
Hughes Corporation and Howard Hughes Properties, Inc. (collectively
"Hughes", which became Non-REIT Subsidiaries of the Company on December 31,
1997) and their subsidiaries and affiliates are the developing entities of
Summerlin, Nevada, which is located immediately north and west of Las
Vegas, Nevada. Hughes owns approximately 15,500 developable acres (10,400
saleable acres) of land in Summerlin, and develops and sells this land to
builders and other developers for residential and commercial uses. Other
affiliates or subsidiaries of the Company may also purchase some of this
land for their own development purposes. Non-REIT Subsidiaries of the
Company, directly or through affiliates, are also presently involved in
community development and related land sales elsewhere in Maryland, and are
developing or holding for sale parcels of land elsewhere in Nevada and
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 and its subsidiaries, affiliates and Non-REIT
Subsidiaries, operate in highly competitive markets. With respect to the
leasing and operation or management of developed properties, each project
faces market competition from existing and future developments in its
geographical market area.
I-6
Item 1. Business, continued.
The Company's affiliates and Non-REIT Subsidiaries also face competition in
and around Columbia, Maryland and Las Vegas, Nevada 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
statues 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, its subsidiaries and affiliates and Non-REIT Subsidiaries employ
4,040 full-time and part-time employees at December 31, 1997.
I-7
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 in pages
62 through 65 of Exhibit 13 to this Form 10-K. The ownership of virtually
all properties is subject to mortgage financing. The table of projects
includes properties managed by Non-REIT Subsidiaries of the Company for a
fee as identified in notes (c) and (d) to the table. Excluding such
managed properties, 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 leases
are exercised. The properties subject to such leases in whole or part
(including properties owned by Non-REIT Subsidiaries) are as follows
Nature of Year of expiration
Property interest of lease
-------- --------- ------------------
Arizona Center Leasehold Various dates from
2017 to 2050
Augusta Mall Leasehold 2068
Bayside Marketplace Leasehold by joint venture 2062
Columbia Mall, Inc. Leasehold and fee 2000
American City Building
Columbia Mall, Inc. Leasehold and fee 2012
Exhibit Building
Columbia Mall, Inc. Leasehold 2062
Oakland Building
Echelon Mall Leasehold 2008
Fanueil Hall Marketplace Leasehold 2074
First National Bank Plaza Leasehold 2013
Franklin Park Leasehold and fee by joint venture 2024
The Gallery at Market East Leasehold 2082
I-8
Item 2. Properties, continued.
Nature of Year of expiration
Property interest of lease
-------- --------- ------------------
Governor's Square Leasehold by joint venture 2054
Greengate Mall Leasehold 2070
Harborplace Leasehold 2054
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 2063
Riverwalk Leasehold and fee 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-9
Item 3. Legal Proceedings.
None.
I-10
Item 4. Submission of Matters to a Vote of Security Holders.
None.
I-11
The executive officers of the Company as of March 27, 1998 are:
Present office and Date of election Business or professional
position with the or appointment to experience during the past
Executive Officer Age Company present office five years
- ----------------- --- ------------------ ------------------ ------------------------------------------
Anthony W. Deering 53 Chairman of the Board, 2/25/97 Chairman of the Board, President and
President and 2/25/93 Chief Executive Officer of the Company;
Chief Executive Officer 2/23/95 formerly President and Chief Executive
Officer of the Company; 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 51 Senior Vice-President 9/23/93 Senior Vice-President and Chief Financial
Chief Financial Officer 9/23/93 Officer of the Company and Director of the
and Director of the 8/17/93 Finance Division; formerly Vice-President
Finance Division and Treasurer Of the Company
John L. Goolsby 56 President and Chief 9/1/88 President and Chief Executive Officer of
Executive Officer of The Howard Hughes Corporation
The Howard Hughes
Corporation, a Non-REIT
Subsidiary of the
Company
Duke S. Kassolis 46 Senior Vice-President 9/23/93 Senior Vice-President and Director of
and Director of Office 8/17/93 Office and Mixed-Use Operations of the
and Mixed-Use Operations Company; formerly Vice-President and
Director of Office and Commercial
Properties of the Company
I-12
Executive Officers of the Registrant.
Present office and Date of election Business or professional
position with the or appointment to experience during the past
Executive Officer Age Company present office five years
- ----------------- --- ------------------ ------------------ ------------------------------------------
Paul I. Latta, Jr. 54 Senior Vice-President 9/23/93 Senior Vice-President and Director
And Director of Retail 8/17/93 Of Retail Operations of the Company;
Operations formerly Vice-President and Associate
Division Director, Operating Properties
Division of the Company
Douglas A. McGregor 55 Executive Vice-President 8/17/93 Executive Vice-President for Development
for Development and and Operations of the Company; formerly
Operations Executive Vice-President Development
and Director of the Office and Community
Development Division of the Company
Robert Minutoli 47 Senior Vice-President 9/23/93 Senior Vice-President and Director of
and Director of 8/17/93 New Business of the Company; formerly
New Business Vice-President for Development of the
Company
Robert D. Riedy 52 Senior Vice-President 9/23/93 Senior Vice-President and Director of
and Director of Retail 8/17/93 Retail Leasing of the Company; formerly
Leasing Vice-President for Development of the
Company
I-13
Executive Officers of the Registrant.
Present office and Date of election Business or professional
position with the or appointment to experience during the past
Executive Officer Age Company present office five years
- ----------------- --- ------------------ ------------------ ------------------------------------------
Alton J. Scavo 51 Senior Vice-President, 9/23/93 Senior Vice-President and Director of
Director of the 8/17/93 the Community Development Division of
Community Development the Company and General Manager of
Division and General Columbia; formerly Vice-President and
Manager of Columbia Associate Director of the Community
Development Division of the Company
Jerome D. Smalley 48 Senior Vice-President 9/23/93 Senior Vice-President and Director of
And Director of the 8/17/93 the Commercial and Office Development
Commercial and Office Division of the Company; formerly Vice-
Development Division President for Development
George L. Yungmann 55 Senior Vice-President, 9/23/93 Senior Vice-President and Controller of
Controller and 7/26/72 the Company and Director of the Controller's
Director of the 7/26/72 Division; formerly Vice-President, Controller
Controller's Division 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, except with respect to John L. Goolsby. See Exhibit 10 to this Form
10-K.
None of the above-listed officers has any family relationship with any director
or other executive officer.
I-14
Part II
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Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Information required by Item 5 is incorporated herein by reference to
page 49 of Exhibit 13.
Item 6. Selected Financial Data.
Information required by Item 6 is incorporated by reference to
page 48 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 50 through 57 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 49 of Exhibit 13.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
II-1
Part III
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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 3, 1998.
III-1
Part IV
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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.
(b) Reports on Form 8-K:
None.
IV-1
The Rouse Company
Index to Financial Statements and Schedules
Page
----
Independent Auditors' Report IV-3
Financial Statements:
The Rouse Company and Subsidiaries included on pages
23 through 47 of Exhibit 13 incorporated herein by
reference:
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995
Notes to consolidated Financial Statements
Schedules:
The Rouse Company and Subsidiaries as of December 31, 1997
or for the years ended December 31, 1997, 1996 and 1995:
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 financial statements and the related
financial statement schedules of The Rouse Company and subsidiaries as listed
in the accompanying 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 financial statements referred to above
present fairly, in all material respects, the financial position of The Rouse
Company and subsidiaries as of December 31, 1997 and 1996, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted
accounting principles. Also in our opinion, the related financial statement
schedules, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
February 24, 1998
IV-3
Schedule II
-----------
THE ROUSE COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended December 31, 1997, 1996 and 1995
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, 1997:
Allowance for doubtful receivables $28,153 $ 5,766 $ --- $12,608 (1) $21,311
======= ======= ========= ======= =======
Valuation allowance -- properties held for sale $35,671 $26,249 $ --- $23,968 (2) $37,952
======= ======= ========= ======= =======
Preconstruction reserve $16,317 $ 2,800 $ --- $ 1,766 (3) $17,351
======= ======= ========= ======= =======
Year ended December 31, 1996:
Allowance for doubtful receivables $24,468 $ 3,688 $ 1,161 $ 1,164 (1) $28,153
======= ======= ========= ======= =======
Valuation allowance -- properties held for sale $15,589 $25,825 $ --- $ 5,743 (2) $35,671
======= ======= ========= ======= =======
Preconstruction reserve $15,379 $ 2,700 $ --- $ 1,762 (3) $16,317
======= ======= ========= ======= =======
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
======= ======= ========= ======= =======
Preconstruction reserve $14,109 $ 3,800 $ --- $ 2,530 (3) $15,379
======= ======= ========= ======= =======
Notes:
(1) Balances written off as uncollectible.
(2) Allowance related to properties sold or transferred to operating
properties.
(3) Costs of unsuccessful projects written off.
IV-4
Schedule III
------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1997
------------------------------------------- -------------------- -----------------------------
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 $134,231 $26,301 $ -- $117,800 $ -- $26,301 $117,800 $144,101
Retail Center
Woodbridge, NJ
South Street Seaport 60,297 -- -- 141,534 -- -- 141,534 141,534
Retail Center
New York, NY
Arizona Center 105,585 97 -- 138,357 -- 97 138,357 138,454
Mixed-use project
Phoenix, AZ
Beachwood Place 121,058 10,673 -- 120,914 -- 10,673 120,914 131,587
Retail Center
Beachwood, OH
Fashion Show Mall 75,150 26,776 97,017 1,552 -- 26,776 98,569 125,345
Retail Center
Las Vegas, NV
Pioneer Place 96,341 -- -- 122,790 -- -- 122,790 122,790
Mixed-use project
Portland, OR
Westlake Center 93,954 10,582 -- 102,991 -- 10,582 102,991 113,573
Mixed-use project
Seattle, WA
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- ----------- ------------------------ ------------------- -------- ----------------------
(In thousands)
Operating Properties:
Woodbridge Center $24,614 03/71 N/A Note 8
Retail Center
Woodbridge, NJ
South Street Seaport 24,266 07/83 N/A Note 8
Retail Center
New York, NY
Arizona Center 26,247 07/83 N/A Note 8
Mixed-use project
Phoenix, AZ
Beachwood Place 8,628 08/78 N/A Note 8
Retail Center
Beachwood, OH
Fashion Show Mall 3,806 03/81 06/96 Note 8
Retail Center
Las Vegas, NV
Pioneer Place 23,364 03/90 N/A Note 8
Mixed-use project
Portland, OR
Westlake Center 25,526 10/88 N/A Note 8
Mixed-use project
Seattle, WA
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1997
-------------------- --------------------- ---------------------------------
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)
The Gallery at Harborplace 107,894 6,648 -- 104,034 -- 6,648 104,034 110,682
Mixed-use project
Baltimore, MD
Owings Mills 61,000 13,408 -- 87,661 -- 13,408 87,661 101,069
Retail Center
Baltimore, MD
Bayside Marketplace 83,310 -- -- 97,915 -- -- 97,915 97,915
Retail Center
Miami, FL
Mall St. Matthews 72,072 -- -- 94,668 -- -- 94,668 94,668
Retail Center
Louisville, KY
Paramus Park 70,353 13,475 -- 69,614 -- 13,475 69,614 83,089
Retail Center
Paramus, NJ
Moorestown Mall 42,000 12,169 67,043 -- -- 12,169 67,043 79,212
Retail Center
Burlington County, NJ
Santa Monica Place -- 5,088 -- 68,740 -- 5,088 68,740 73,828
Retail Center
Santa Monica, CA
Faneuil Mall Marketplace 53,910 -- -- 73,099 -- -- 73,099 73,099
Retail Center
Boston, MA
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- -------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
The Gallery at Harborplace 24,823 09/87 N/A Note 8
Mixed-use project
Baltimore, MD
Owings Mills 11,941 07/86 N/A Note 8
Retail Center
Baltimore, MD
Bayside Marketplace 16,614 04/87 N/A Note 8
Retail Center
Miami, FL
Mall St. Matthews 15,176 03/62 N/A Note 8
Retail Center
Louisville, KY
Paramus Park 8,524 03/74 N/A Note 8
Retail Center
Paramus, NJ
Moorestown Mall -- 03/63 12/97 Note 8
Retail Center
Burlington County, NJ
Santa Monica Place 10,379 10/80 N/A Note 8
Retail Center
Santa Monica, CA
Faneuil Mall Marketplace 11,459 08/76 N/A Note 8
Retail Center
Boston, MA
IV-6
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1997
-------------------- --------------------- ---------------------------------
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)
Cherry Hill Mall 79,070 14,767 -- 57,536 -- 14,767 57,536 72,303
Retail Center
Cherry Hill, NJ
Oakwood Center 54,116 14,750 -- 56,959 -- 14,750 56,959 71,709
Retail Center
Gretna, LA
Augusta Mall 62,783 5,397 -- 65,720 -- 5,397 65,720 71,117
Retail Center
Augusta, GA
Hulen Mall 64,808 5,064 -- 65,336 -- 5,064 65,336 70,400
Retail Center
Ft. Worth, TX
Riverwalk 10,627 -- -- 69,900 -- -- 69,900 69,900
Retail Center
New Orleans, LA
St. Louis Union Station -- -- -- 67,497 -- -- 67,497 67,497
Retail Center
St. Louis, MO
Echelon Mall 60,294 6,160 -- 54,615 -- 6,160 54,615 60,775
Retail Center
Voorhees, NJ
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- -------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
Cherry Hill Mall 17,135 10/61 N/A Note 8
Retail Center
Cherry Hill, NJ
Oakwood Center 8,309 10/82 N/A Note 8
Retail Center
Gretna, LA
Augusta Mall 6,873 08/78 N/A Note 8
Retail Center
Augusta, GA
Hulen Mall 10,618 08/77 N/A Note 8
Retail Center
Ft. Worth, TX
Riverwalk 10,349 08/86 N/A Note 8
Retail Center
New Orleans, LA
St. Louis Union Station 18,110 08/85 N/A Note 8
Retail Center
St. Louis, MO
Echelon Mall 11,615 09/70 N/A Note 8
Retail Center
Voorhees, NJ
IV-7
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1997
-------------------- --------------------- ---------------------------------
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)
Harborplace 37,249 -- -- 51,573 -- -- 51,573 51,573
Retail Center
Baltimore, MD
Blue Cross &
Blue Shield Building I 33,508 1,000 -- 44,756 -- 1,000 44,756 45,756
Office Building
Baltimore, MD
3800 Howard
Hughes Parkway 39,941 3,676 39,014 1,152 -- 3,676 40,166 43,842
Office Building
Las Vegas, NV
The Jacksonville Landing 13,511 -- -- 32,549 -- -- 32,549 32,549
Retail Center
Jacksonville, FL
Tampa Bay Center 46,488 920 -- 31,152 -- 920 31,152 32,072
Retail Center
Tampa, FL
Governor's Square 27,429 -- -- 31,902 -- -- 31,902 31,902
Retail Center
Tallahassee, FL
Village of Cross Keys -- 910 -- 30,889 -- 910 30,889 31,799
Mixed-use project
Baltimore, MD
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- -------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
Harborplace 11,390 07/80 N/A Note 8
Retail Center
Baltimore, MD
Blue Cross & 8,981 07/89 N/A Note 8
Blue Shield Building I
Office Building
Baltimore, MD
3800 Howard 2,346 11/86 06/96 Note 8
Hughes Parkway
Office Building
Las Vegas, NV
The Jacksonville Landing 10,270 06/87 N/A Note 8
Retail Center
Jacksonville, FL
Tampa Bay Center 9,876 08/79 N/A Note 8
Retail Center
Tampa, FL
Governor's Square 4,472 08/79 N/A Note 8
Retail Center
Tallahassee, FL
Village of Cross Keys 9,923 09/65 N/A Note 8
Mixed-use project
Baltimore, MD
IV-8
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquisition at December 31, 1997
-------------------- --------------------- ---------------------------------
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)
White Marsh 41,705 316 -- 31,352 -- 316 31,352 31,668
Retail Center
Baltimore, MD
North Star -- 168 -- 30,323 -- 168 30,323 30,491
Retail Center
San Antonio, TX
Plymouth Meeting -- 702 -- 29,259 -- 702 29,259 29,961
Retail Center
Montgomery County, PA
Willowbrook 38,434 853 -- 28,789 -- 853 28,789 29,642
Retail Center
Wayne, NJ
Exton Square 7,369 1,408 -- 26,663 -- 1,408 26,663 28,071
Retail Center
Exton, PA
3773 Howard
Hughes Parkway 22,715 1,764 22,964 2,953 -- 1,764 25,917 27,681
Office Building
Las Vegas, NV
Alexander &
Alexander Building I 21,529 1,000 -- 24,605 -- 1,000 24,605 25,605
Office Building
Baltimore, MD
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- -------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
White Marsh 8,416 08/81 N/A Note 8
Retail Center
Baltimore, MD
North Star 7,998 09/60 N/A Note 8
Retail Center
San Antonio, TX
Plymouth Meeting 12,249 02/66 N/A Note 8
Retail Center
Montgomery County, PA
Willowbrook 6,482 09/69 N/A Note 8
Retail Center
Wayne, NJ
Exton Square 9,139 03/73 N/A Note 8
Retail Center
Exton, PA
3773 Howard
Hughes Parkway 931 11/95 06/96 Note 8
Office Building
Las Vegas, NV
Alexander &
Alexander Building I 5,805 09/87 N/A Note 8
Office Building
Baltimore, MD
IV-9
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acqisition at December 31, 1997
------------------- ------------------- -----------------------------
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)
The Gallery at Market East -- -- -- 23,916 -- -- 23,916 23,916
Retail Center
Philadelphia, PA
Perimeter Mall -- -- -- 22,086 -- -- 22,086 22,086
Retail Center
Atlanta, GA
Franklin Park 25,498 653 -- 20,908 -- 653 20,908 21,561
Retail Center
Toledo, OH
The Grand Avenue 4,442 -- -- 20,768 -- -- 20,768 20,768
Retail Center
Milwaukee, WI
Mondawmin 5,008 2,251 -- 17,973 -- 2,251 17,973 20,224
Retail Center
Baltimore, MD
Highland Mall 6,059 13 -- 17,701 -- 13 17,701 17,714
Retail Center
Austin, TX
Blue Cross &
Blue Shield Building II 12,222 1,000 -- 16,542 -- 1,000 16,542 17,542
Office Building
Baltimore, MD
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
and amortization of construction acquired is computed
------------------------ ------------------ -------- ----------------------
The Gallery at Market East 6,985 08/77 N/A Note 8
Retail Center
Philadelphia, PA
Perimeter Mall 6,324 08/71 N/A Note 8
Retail Center
Atlanta, GA
Franklin Park 4,685 07/71 N/A Note 8
Retail Center
Toledo, OH
The Grand Avenue 10,063 08/82 N/A Note 8
Retail Center
Milwaukee, WI
Mondawmin 6,757 01/78 N/A Note 8
Retail Center
Baltimore, MD
Highland Mall 5,592 08/71 N/A Note 8
Retail Center
Austin, TX
Blue Cross &
Blue Shield Building II 2,942 08/90 N/A Note 8
Office Building
Baltimore, MD
IV-10
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acqisition at December 31, 1997
------------------- ------------------- -----------------------------
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)
Alexander &
Alexander Building II 11,851 650 -- 16,816 -- 650 16,816 17,466
Office Building
Baltimore, MD
3753/3763 Howard
Hughes Parkway 11,216 3,901 12,199 237 -- 3,901 12,436 16,337
Office Building
Las Vegas, NV
Midtown Square -- -- -- 14,759 -- -- 14,759 14,759
Retail Center
Charlotte, NC
3930 Howard
Hughes Parkway 7,350 3,155 11,448 27 -- 3,155 11,475 14,630
Office Building
Las Vegas, NV
Canyon Center -- 2,091 7,197 4,924 -- 2,091 12,121 14,212
Office Building
Las Vegas, NV
Crossing Business
Center Phase III 8,666 2,883 1,481 8,254 -- 2,883 9,735 12,618
Office Building
Las Vegas, NV
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
and amortization of construction acquired is computed
------------------------ ------------------ -------- ----------------------
Alexander &
Alexander Building II 5,696 11/88 N/A Note 8
Office Building
Baltimore, MD
3753/3763 Howard
Hughes Parkway 597 10/91 06/96 Note 8
Office Building
Las Vegas, NV
Midtown Square 10,002 10/59 N/A Note 8
Retail Center
Charlotte, NC
3930 Howard
Hughes Parkway 731 12/94 06/96 Note 8
Office Building
Las Vegas, NV
Canyon Center 235 03/98 06/96 Note 8
Office Building
Las Vegas, NV
Crossing Business
Center Phase III 413 09/96 06/96 Note 8
Office Building
Las Vegas, NV
IV-II
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acqisition at December 31, 1997
------------------- ------------------- -----------------------------
Buildings Buildings
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ---------- -------- --------- --------- --------- ------ ---------- -------
(in thousands)
3980 Howard 10,740 881 5,607 5,947 -- 881 11,554 12,435
Hughes Parkway
Office Building
Las Vegas, NV
Crossing Business
Center Phase I 7,820 1,347 8,077 80 -- 1,347 8,157 9,504
Office Building
Las Vegas, NV
3770 Howard
Hughes Parkway 5,645 702 8,129 425 -- 702 8,554 9.256
Office Building
Las Vegas, NV
Metro Plaza 686 202 -- 8,038 -- 202 8,038 8,240
Retail Center
Baltimore, MD
Montgomery Ward 6,312 616 7,320 36 -- 616 7,356 7,972
Office Building
Las Vegas, NV
Crossing Business
Center Phase II 5,686 363 7,426 (215) -- 363 7,211 7,574
Office Building
Las Vegas, NV
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
and amortization of construction acquired is computed
------------------------ ------------------ -------- ----------------------
3980 Howard 177 04/97 06/96 Note 8
Hughes Parkway
Office Building
Las Vegas, NV
Crossing Business
Center Phase I 312 12/94 06/96 Note 8
Office Building
Las Vegas, NV
3770 Howard
Hughes Parkway 527 10/90 06/96 Note 8
Office Building
Las Vegas, NV
Metro Plaza 3,435 N/A 12/82 Note 8
Retail Center
Baltimore, MD
Montgomery Ward 331 10/95 06/96 Note 8
Office Building
Las Vegas, NV
Crossing Business
Center Phase II 271 12/95 06/96 Note 8
Office Building
Las Vegas, NV
IV-12
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acqisition at December 31, 1997
------------------- ------------------- -----------------------------
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)
Equinox @ CBC 7,171 1,257 398 5,696 -- 1,257 6,094 7,351
Office Building
Las Vegas, NV
Raytheon Building -- 429 6,293 (59) -- 429 6,234 6,663
Office Building
Las Vegas, NV
840 Grier 6,233 967 1,537 4,081 -- 967 5,618 6,585
Office Building
Las Vegas, NV
First National Bank Plaza 5,357 -- -- 6,330 -- -- 6,330 6,330
Office Building
Mt. Prospect, IL
Plaza East 4,718 925 5,384 (6) -- 925 5,378 6,303
Office Building
Las Vegas, NV
420 Pilot Road 4,195 1,080 (108) 5,242 -- 1,080 5,134 6,214
Office Building
Las Vegas, NV
Plaza West 4,476 198 5,444 103 -- 198 5,547 5,745
Office Building
Las Vegas, NV
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
and amortization of construction acquired is computed
------------------------ ------------------ -------- ----------------------
Equinox @ CBC 42 12/97 06/96 Note 8
Office Building
Las Vegas, NV
Raytheon Building 226 11/92 06/96 Note 8
Office Building
Las Vegas, NV
840 Grier 114 03/97 06/96 Note 8
Office Building
Las Vegas, NV
First National Bank Plaza 1,753 07/81 N/A Note 8
Office Building
Mt. Prospect, IL
Plaza East 251 12/93 06/96 Note 8
Office Building
Las Vegas, NV
420 Pilot Road 226 09/96 06/96 Note 8
Office Building
Las Vegas, NV
Plaza West 222 11/95 06/96 Note 8
Office Building
Las Vegas, NV
IV-13
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost subsequent to Gross amount at which carried
to Company acquisition at December 31, 1997
-------------------- ------------------- -------------------------------
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)
975 Kelly Johnson Drive 3,985 383 5,289 -- -- 383 5,289 5,672
Office Building
Las Vegas, NV
980 Kelly Johnson Drive 3,385 827 4,843 -- -- 827 4,843 5,670
Office Building
Las Vegas, NV
Other properties and
related investments
less than 5% of total 65,477 21,089 76,778 49,489 -- 21,089 126,267 147,356
--------- ------- ------- --------- ------- ------- --------- ---------
Total Operating Properties 2,072,929 231,935 400,780 2,447,247 -- 231,935 2,848,027 3,079,962
--------- ------- ------- --------- ------- ------- --------- ---------
Properties in Development
Oviedo Marketplace 46,296 11,951 -- 72,493 -- 11,951 72,493 84,444
Retail Center under development
Orlando, FL
Various Office Park Expansions -- 10,159 -- 10,943 -- 10,159 10,943 21,102
Las Vegas, NV
Arizona Center -- -- -- 16,373 -- -- 16,373 16,373
Developed/developable land
under master lease
Phoenix, AZ
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of constrtuction acquired is computed
- -------------------------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
975 Kelly Johnson Drive 246 11/90 06/96 Note 8
Office Building
Las Vegas, NV
980 Kelly Johnson Drive 223 05/92 06/96 Note 8
Office Building
Las Vegas, NV
Other properties and
related investments
less than 5% of total 16,197
--------
Total Operating Properties 515,229
-------
Properties in Development
Oviedo Marketplace -- N/A N/A N/A
Retail Center under development
Orlando, FL
Various Office Park Expansions -- N/A 06/96 N/A
Las Vegas, NV
Arizona Center -- N/A N/A N/A
Developed/developable land
under master lease
Phoenix, AZ
IV-14
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost subsequent to Gross amount at which carried
to Company acquisition at December 31, 1997
-------------------- ------------------- -------------------------------
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)
Perimeter Mall Expansion -- -- -- 23,232 -- -- 23,232 23,232
Expansion of retail center
Atlanta, GA
Owings Mills Expansion -- 8,380 -- 10,721 -- 8,380 10,721 19,101
Expansion of retail center
Baltimore County, MD
3960 Howard Hughes Parkway -- 794 -- 13,440 -- 794 13,440 14,234
Office Building under
development
Las Vegas, NV
Plymouth Meeting Expansion -- -- -- 13,509 -- -- 13,509 13,509
Expansion of retail center
Montgomery County, PA
Exton Square Expansion -- 3,251 -- 7,885 -- 3,251 7,885 11,136
Expansion of retail center
Exton, PA
Canyon Center -- 1,722 -- 4,751 -- 1,722 4,751 6,473
Office Building under
development
Las Vegas, NV
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of constrtuction acquired is computed
- -------------------------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
Perimeter Mall Expansion -- N/A N/A N/A
Expansion of retail center
Atlanta, GA
Owings Mills Expansion -- N/A N/A N/A
Expansion of retail center
Baltimore County, MD
3960 Howard Hughes Parkway -- N/A 06/96 N/A
Office Building under development
Las Vegas, NV
Plymouth Meeting Expansion -- N/A N/A N/A
Expansion of retail center
Montgomery County, PA
Exton Square Expansion -- N/A N/A N/A
Expansion of retail center
Exton, PA
Canyon Center -- N/A 06/96 N/A
Office Building under development
Las Vegas, NV
IV-15
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acquidsition at December 31, 1997
-------------------- --------------------- ---------------------------------
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)
White Marsh Expansion -- 4,074 -- 1,225 -- 4,074 1,225 5,299
Expansion of retail center
Baltimore, MD
Arizona Center Theatre -- -- -- 4,079 -- -- 4,079 4,079
Expansion of mixed-use
project
Phoenix, AZ
Paramus Park Expansion -- -- -- 4,392 -- -- 4,392 4,392
Expansion of retail center
Paramus, NJ
Oakwood Expansion -- 1,188 -- 2,486 -- 1,188 2,486 3,674
Expansion of retail center
Gretna, LA
Preconstruction costs -- -- -- 16,659 -- -- 16,659 16,659
various projects
Preconstruction reserve -- -- -- (17,351) -- -- (17,351) (17,351)
Other projects less than
5% of total -- 432 -- 5,561 -- 432 5,561 5,993
------- ------ ------------ -------- ------- ------- -------- --------
Total Properties in
Development 46,296 41,951 -- 190,398 -- 41,951 190,398 232,349
------- ------- ------------ -------- ------- ------- -------- --------
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
Description and amortization of construction acquired is computed
- -------------- ------------------------ ------------------ -------- ----------------------
(in thousands)
White Marsh Expansion -- N/A 06/95 N/A
Expansion of retail center
Baltimore, MD
Arizona Center Theatre -- N/A N/A N/A
Expansion of mixed-use
project
Phoenix, AZ
Paramus Park Expansion -- N/A N/A N/A
Expansion of retail center
Paramus, NJ
Oakwood Expansion N/A N/A N/A N/A
Expansion of retail center
Gretna, LA
Preconstruction costs N/A N/A N/A N/A
various projects
Preconstruction reserve N/A N/A N/A N/A
Other projects less than N/A N/A N/A N/A
5% of total
Total Properties in
Development
IV-16
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Cost capitalized
Initial cost to subsequent to Gross amount at which carried
Company acqisition at December 31, 1997
------------------- ------------------- -----------------------------
Buildings Buildings
Encum- and Carrying Improve-
brances Improve- Improve- costs ments
Description (note 4) Land ments ments (note 2) Land (note 3) Total
- ----------- ---------- -------- --------- --------- --------- ------ ---------- -------
(in thousands)
Properties held for sale:
Village of Cross Keys Inn -- -- -- 7,795 -- -- 7,795 7,795
Hotel
Baltimore, MD
Salem Mall 35,193 1,285 -- 21,355 -- 1,285 21,355 22,640
Retail Center
Dayton, OH
Eastfield Mall 5,000 1,077 -- 11,281 -- 1,077 11,281 12,358
Retail Center
Springfield, MA
Spectrum Club -- 137 1,229 1,016 -- 137 2,245 2,382
Office Building
Las Vegas, NV
Other Properties held for
sale, less than 5% of total -- 291 -- 12,538 -- 291 12,538 12,829
Valuation allowance -- -- -- (37,952) -- -- (37,952) (37,952)
--------- --------- --------- --------- ----- ------- --------- ---------
Total Properties held
for sale 40,193 2,790 1,229 16,033 -- 2,790 17,26 20,052
--------- --------- --------- --------- ----- ------- --------- ---------
Total Property 2,159,418 274,258 402,009 2,656,096 -- 274,258 3,058,105 3,332,363
========= ========= ========= ========= ===== ======= ========= =========
Life on which
depreciation in latest
Accumulated depreciation Date of completion Date income statement
and amortization of construction acquired is computed
------------------------ ------------------ -------- ----------------------
Properties held for sale:
Village of Cross Keys Inn -- 09/65 N/A N/A
Hotel
Baltimore, MD
Salem Mall -- 10/66 N/A N/A
Retail Center
Dayton, OH
Eastfield Mall -- 04/68 N/A N/A
Retail Center
Springfield, MA
Spectrum Club -- 09/93 06/96 N/A
Office Building
Las Vegas, NV
Other Properties held for --
sale, less than 5% of total
Valuation allowance --
Total Properties held --
for sale
-----------------
Total Property 515,229
=================
IV-17
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Notes:
(1) Reference is made to notes 1, 2, 3, 4, 8, 11, 12 and 16 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 $111,455,000 at
December 31, 1997.
(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,
1997, 1996 and 1995 are as follows (in thousands):
1997 1996 1995
---------- ---------- ----------
Balance at beginning of year $3,691,600 $3,052,873 $2,994,412
Additions, at cost 317,705 158,205 73,155
Cost of properties acquired 84,743 602,944 78,605
Additions to land held for
development and sale 134,447 48,474 16,091
Cost of land sales (131,310) (57,204) (14,214)
Retirements, sales and other
dispositions (114,435) (85,167) (75,787)
Property of subsidiaries in which a
majority voting interest was sold
to an affiliate (621,338) --- ---
Additions to preconstruction reserve (2,800) (2,700) (3,800)
Provision for loss on operating properties (26,249) (25,825) (15,589)
---------- ---------- ----------
Balance at end of year $3,332,363 $3,691,600 $3,052,873
========== ========== ==========
IV-18
Schedule III continued
----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 1997
Notes:
(6) The changes in accumulated depreciation and amortization for the years
ended December 31, 1997, 1996 and 1995 are as follows (in thousands):
1997 1996 1995
-------------- ------------- -----------
Balance at beginning of year $ 552,201 $ 519,319 $ 490,158
Depreciation and amortization
charged to operations 86,009 79,990 73,062
Retirements, sales and other, net (50,814) (47,108) (43,901)
Accumulated depreciation on property of
subsidiaries in which a majority
voting interest was sold to an
affiliate (72,167) --- ---
--------- --------- ---------
Balance at end of year $ 515,229 $ 552,201 $ 519,319
========= ========= =========
(7) The aggregate cost of properties for Federal income tax purposes is
approximately $3,437,074,000 at December 31, 1997.
(8) Reference is made to note 1(c) to the consolidated financial statements
for information related to depreciation.
(9) Reference is made to note 12 to the consolidated financial statements for
information related to provisions for losses on real estate assets.
(10) Certain amounts for prior years have been reclassified to conform to the
presentation for 1997.
IV-19
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 27, 1998
Chairman of the Board, 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 27, 1998
Chairman of the Board, President
and Chief Executive Officer
Principal Financial Officer:
/s/Jeffrey H. Donahue
-----------------------
Jeffrey H. Donahue March 27, 1998
Senior Vice President and
Chief Financial Officer
Principal Accounting Officer:
/s/George L. Yungmann
-----------------------
George L. Yungmann March 27, 1998
Senior Vice President and Controller
IV-20
Board of Directors:
David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
Mathias J. DeVito, Juanita T. James, William R. Lummis, Thomas J. McHugh,
Hanne M. Merriman, Roger W. Schipke, Alexander B. Trowbridge and Gerard J. M.
Vlak.
By: /s/Anthony W. Deering
-----------------------
Anthony W. Deering March 27, 1998
For himself and as
Attorney-in-fact for
the above-named persons
IV-21
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. 2-83612, 33-56231, 33-
56233, 33-56235 and 333-32277), Form S-3 (Registration Nos. 2-78898, 2-95596,
33-52458, 33-57347, 33-57707 and 333-20781) and Form S-4 (Registration No.
333-1693) of our report dated February 24, 1998, relating to the consolidated
financial statements and related schedules of The Rouse Company and
subsidiaries as of December 31, 1997 and 1996 and for each of the years in the
three-year period ended December 31, 1997, which report appears in the Annual
Report on Form 10-K of The Rouse Company for the year ended December 31, 1997.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
March 27, 1998
IV-22
Exhibit Index
Exhibit No.
- -----------
3 Articles of Incorporation and Bylaws
10 Material Contracts
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 Schedules:
27.1 Financial Data Schedule
27.2 Restated Financial Data Schedule,
December 31, 1996
27.3 Restated Financial Data Schedule,
December 31, 1995
99 Additional Exhibits:
99.1 Form 11-K Annual Report of The Rouse Company Savings Plan for the
year ended December 31, 1997
99.2 Factors affecting future operating results
Exhibit 3. Articles of Incorporation and Bylaws.
The Amendments to the Articles of Incorporation of The Rouse Company adopted
May 26, 1988 and the Amended and Restated Articles of Incorporation of The
Rouse Company, dated May 27, 1988, are incorporated by reference from the
Exhibits to the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1988.
The Articles of Amendment to the Amended and Restated Articles of Incorporation
of The Rouse Company, which Articles of Amendment were effective January 10,
1991, are incorporated by reference from the Exhibits to the Company's
Form 10-K Annual Report for the fiscal year ended December 31, 1990.
The Articles Supplementary to the Charter of The Rouse Company, dated
February 17, 1993, are incorporated by reference from the Exhibits to the
Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992.
The Articles Supplementary to the Charter of The Rouse Company, dated
September 26, 1994, are incorporated by reference from the Exhibits to the
Company's S-3 Registration Statement (No. 33-57707).
The Articles Supplementary to the Charter of The Rouse Company, dated
December 27, 1994, are incorporated by reference from the Exhibits to the
Company's S-3 Registration Statement (No. 33-57707).
The Articles Supplementary to the Charter of The Rouse Company, dated June 5,
1996, are incorporated by reference from the Exhibits to the Company's S-3
Registration Statement (No. 333-20781).
The Articles Supplementary to the Charter of The Rouse Company, dated June 11,
1996, are incorporated by reference from the Exhibits to the Company's
Form S-3 Registration Statement (No. 333-20781).
The Articles Supplementary to the Charter of The Rouse Company, dated
February 21, 1997, are incorporated by reference from the Exhibit to the
Company's Current Report on Form 8-K, dated February 26, 1997.
The Bylaws of The Rouse Company, as amended November 19, 1996 and January 30,
1997, are incorporated by reference from the Exhibits to the Company's
Form S-3 Registration Statement (No. 333-20781).
All documents referred to above may be found in Commission file number 0-1743.
Exhibit 10. Material Contracts.
The Company's 1985 Stock Option Plan and 1985 Stock Bonus Plan are incorporated
by reference from the Company's definitive proxy statement filed pursuant to
Regulation 14A on April 27, 1985, and the Amendment to The Rouse Company 1985
Stock Option Plan, effective as of May 12, 1994 is incorporated by reference
from the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1994.
The Company's 1990 Stock Option Plan and 1990 Stock Bonus Plan are incorporated
by reference from the Company's definitive proxy statement filed pursuant to
Regulation 14A on April 12, 1990, and the Amendment to The Rouse Company 1990
Stock Option Plan, effective as of May 12, 1994, is incorporated by reference
from the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1994.
The Company's 1994 Stock Incentive Plan is incorporated by reference from the
Company's definitive proxy statement filed pursuant to Regulation 14A on
April 5, 1994.
The Amended and Restated Supplemental Retirement Benefit Plan of The Rouse
Company, made as of January 1, 1985 and further amended and restated as of
September 24, 1992, March 4, 1994, and May 10, 1995, is incorporated by
reference from the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1996.
The Contingent Stock Agreement, effective as of January 1, 1996, by the Company
in favor of and for the benefit of the Holders and Representatives named
therein is incorporated by reference from the Exhibits to the Company's
Form S-4 Registration Statement (No. 333-1693).
The Rouse Company Deferred Compensation Plan for Outside Directors (Amended and
Restated), dated as of May 23, 1996, is incorporated by reference from the
Company's Form 10-K Annual Report for the fiscal year ended December 31, 1996.
The memorandum of agreement, dated December 19, 1996, between the Company and
Mathias J. DeVito, then Chairman of the Board of the Company, is incorporated
by reference from the Company's Form 10-K Annual Report for the fiscal year
ended December 31, 1996.
The employment agreement, dated May 1, 1996, between John L. Goolsby, The Rouse
Company and TRC Acquisition Company I is attached.
The Company's 1997 Stock Incentive Plan is incorporated by reference from the
Company's definitive proxy statement filed pursuant to Regulation 14A on
April 4, 1997.
The Rouse Company Special Option Plan, effective January 1, 1998, is attached.
All documents referred to above may be found in Commission file number 0-1743.