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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITITES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 2001
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
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
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(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 1 [cent] per share) New York Stock Exchange
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9 1/4% Cumulative Quarterly Income Preferred Securities New York Stock Exchange
- -------------------------------------------------------
Series B Convertible Preferred Stock
- ------------------------------------
(par value 1 [cent] per share) New York Stock Exchange
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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 for (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
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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.
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As of March 15, 2002, there were outstanding 86,327,929 shares of the
registrant's common stock, par value 1 [cent] , which is the only class of
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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 $2,590,232,548.
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Documents Incorporated by Reference
The specified portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 2000 are incorporated by reference into Parts I, II and IV.
Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before
April 11, 2001 is incorporated by reference into Part III.
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Part I
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Item 1. Business.
Item 1 (a). General Development of Business.
The Rouse Company ("we", "Rouse" or "us") was incorporated as a
business corporation under the laws of the State of Maryland in 1956.
Our principal offices are located at The Rouse Company Building,
Columbia, Maryland 21044. Our telephone number is (410) 992-6000. We,
through our subsidiaries and affiliates, are engaged in (i) the
ownership, management, acquisition and development of income-producing
and other real estate in the United States, including retail centers,
office and industrial buildings, mixed-use projects and community retail
centers, and (ii) the development and sale of land, primarily in and
around Columbia, Maryland and the Las Vegas, Nevada metropolitan area
for residential, commercial and industrial uses.
We elected to be taxed as a real estate investment trust (REIT) pursuant to
the Internal Revenue Code of 1986, as amended, effective
January 1, 1998. In general, a corporation that distributes at least
90% of its REIT taxable income to shareholders in any taxable year and
complies with certain other requirements (relating primarily to the
nature of its assets and the sources of its revenues) is not subject to
Federal income taxation to the extent of the income which it
distributes. We believe that we met the qualifications for REIT status
as of December 31, 2001 and intend to meet the qualifications in the
future and to distribute at least 90% of our REIT taxable income
(determined after taking into account any net operating loss deduction)
to shareholders in 2001 and subsequent years. We have elected to treat
certain subsidiaries as Taxable REIT Subsidiaries (TRS), which were
subject to Federal and state income taxes beginning in 2001. Except
with respect to the TRS, we do not believe that we will be liable for
significant income taxes at the Federal level or in most of the states
in which we operate in 2002 and future years.
Developments in 2001 and 2002
Relying on certain provisions of the REIT Modernization Act, which was
enacted into law in December 1999, the Company negotiated agreements in
the fourth quarter of 2000 to acquire the voting stock of certain real
estate ventures owned by The Rouse Company Incentive Compensation
Statutory Trust (the "Trust"). On January 2, 2001, the Company
exchanged 137,928 shares of common stock for the Trust's
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shares of voting common stock of the ventures. Prior to this
transaction, we owned substantially all of the financial interest in
these ventures but only 9% of their voting stock. The shares acquired
by the Company constitute all of the Trust's interests in the ventures.
The fair value of the consideration exchanged was approximately $3.5
million. As a result of this transaction, the Company owns 100% of the
voting common stock of the ventures.
In January 2002, we, Simon Property Group, Inc. and Westfield America Trust
announced that affiliates of each (collectively, the "purchasers")
entered into a Purchase Agreement with Rodamco North America N.V.
("Rodamco") to purchase substantially all of the assets of Rodamco for
an aggregate purchase price of approximately 2.48 billion euros
(approximately $2.21 billion based on exchange rates then in effect) in
cash, subject to adjustment, and the assumption of substantially all of
Rodamco's liabilities, including approximately $2.18 billion of U.S.
dollar denominated property debt and subsidiary perpetual preferred
stock. Additional obligations to be borne by the purchasers include
repayment of Rodamco corporate debt and payment of transaction expenses
aggregating approximately $1.2 billion. The purchase price will be
reduced by any amounts paid by Rodamco to its shareholders prior to
closing. If the closing occurs after May 15, 2002, the purchase price
will increase by an amount equal to the product of 622,642 euros and the
number of days from May 1, 2002 until the closing.
In connection with the Purchase Agreement, the purchasers entered into a
Joint Purchase Agreement that specifies the properties each will acquire
and sets forth the basis upon which the portion of the aggregate
purchase price to be paid to Rodamco by each purchaser will be
determined. Our share of the purchase price is expected to be
approximately 601 million euros (approximately $536 million based on
exchange rates in effect at the date of the Purchase Agreement). We
also expect to repay a portion of Rodamco's corporate debt and
transaction costs aggregating approximately $321 million and to assume
approximately $675 million of U.S. dollar denominated property debt and
subsidiary perpetual preferred stock.
In the proposed acquisition, we will acquire, directly or indirectly,
interests in the following operating properties:
I-2
Interest to
Property be acquired Location
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Collin Creek /(1)/ 70% Plano, TX
Lakeside Mall 100% Sterling Heights, MI
North Star /(1)/ 96% San Antonio, TX
Oakbrook Center /(2)/ 47% Oakbrook, IL
Perimeter Mall /(1)/ 50% Atlanta, GA
The Streets at South Point 100% Durham, NC
Water Tower Place /(2)/ 52% Chicago, IL
Willowbrook /(1)/ 62% Wayne, NJ
Notes:
/(1)/ As a result of the proposed acquisition, we will own 100% interests
in these properties.
/(2)/ Property also contains significant office space.
The purchasers will jointly own the remaining assets to be acquired from
Rodamco. We will own an interest of approximately 27.3% in these
assets, most of which are intended to be sold. These assets include
interests in a property/investment management company (RoProperty
Services BV) and a New York office building (745 Fifth Avenue) and
investments in real estate operating companies (South Square Mall,
River Ridge, the Plaza at Saw Mill Place, Tishman Investments, Westin
New York and Kravco). Rodamco may sell some of these assets prior to
the closing of the acquisition, and the proceeds from any sales will
reduce the purchase price. RoProperty Services BV and 745 Fifth
Avenue are currently under contracts for sale. In both cases, sale is
subject to a number of conditions, and if the sales are completed, it
is uncertain if they will occur before the purchase of the Rodamco
assets. The purchasers intend to operate and develop another property
management business, Urban Retail Properties Co., with a view toward
capitalizing on its current market position and the skills and talents
of its existing employees.
Also in connection with the Rodamco transaction, we agreed to sell our
interest in Franklin Park, a regional retail center in Toledo, Ohio, to
an affiliate of Westfield America Trust for $20.6 million. We expect
this transaction to close when the purchase of assets from Rodamco
closes.
As discussed above, the cash portion of the purchase price is payable in
euros. In January 2002, we acquired options to purchase 601 million
euros at a weighted-average per euro price of $0.8819. These
transactions were executed to reduce our risk to movements in currency
exchange rates. The contracts expire in May 2002 and had an aggregate
cost of $11.3 million. We will carry the contracts at fair value in
our balance sheet and record changes in their fair values in
operations. If the value of the euro does not exceed the strike prices
in the contracts, the contracts will have no value at their
maturities.
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We intend to fund the acquisition of the assets of Rodamco as follows (in
millions):
Sales of common stock completed in
January/February 2002 $ 457
Sale of certain "noncore" assets
acquired from Rodamco 135
Sale of interests in Columbia
community retail centers (see below) 60
Sale of interest in Franklin Park 20
Other sources, including proceeds
from possible issuance of debt
and/or possible dispositions of
interests in operating properties 185
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$ 857
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In January 2002, we obtained a commitment from Banc of America Securities,
LLC and Banc of America Mortgage Capital Corporation for up to an $870
million bridge facility with an initial maturity of six months from the
closing of the acquisition to provide interim financing for a portion of
the purchase price and related costs. Availability under the bridge
facility was reduced to $450 million as a result of the issuance of
common stock in January and February 2002. We have the right to extend
the commitment for an additional twelve months at reduced levels. We
believe we will have sufficient liquidity to close the acquisition and
repay amounts borrowed under the bridge facility before its extended
maturity.
There are significant risks associated with our proposed acquisition of
assets from Rodamco. Our obligation to consummate the proposed
acquisition is not subject to a financing condition. While we believe
we have significant liquidity to close the transaction, our plans
include using the proceeds from the sales of certain properties and
assets to be acquired jointly with the other purchasers to repay any
borrowings we may make under the bridge facility. We cannot assure that
these assets will be sold on the anticipated time schedule or at the
prices we expect. We are jointly and severally liable with the other
purchasers under the purchase agreement such that if the other
purchasers fail to perform, Rodamco could look to us for its damages
(although we would have claims against the other purchasers under
cross indemnities). We cannot assure that we will be able to
consummate the acquisition if the other purchasers fail to perform. In
addition, there are several conditions to closing the acquisition,
including approval of the acquisition by the shareholders of Rodamco.
I-4
We currently expect that a vote by the shareholders of Rodamco will
occur on March 25, 2002; however, there is ongoing legal action in the
Netherlands and we cannot assure that the vote will occur on that
date. It is possible that other legal challenges could occur. We
cannot assure that the shareholders of Rodamco will approve the
transaction if and when they do vote. Accordingly, we cannot assure
that the transaction will occur. For more information on these and
other risks associated with the proposed acquisitions, please refer to
Exhibit 99.2 to our Annual Report on Form 10-K for the year ended
December 31, 2001.
In January and February of 2002, we issued 16.675 million shares of common
stock for aggregate gross proceeds of $456.9 million ($27.40 per share)
under our effective shelf registration statement. We plan to use the
proceeds of the stock issuance to fund a portion of the purchase price
of the proposed acquisition of the assets of Rodamco described above.
In March 2002, we agreed to sell interests in 12 community retail centers
in Columbia for net proceeds of approximately $100 million. We expect to
record a gain on this transaction. We also agreed to repay $34.2 million
of debt secured by these properties and expect to incur losses on the
early extinguishment of this debt of approximately $5.1 million,
including prepayment penalties of $4.6 million. We expect this
transaction to close in April 2002.
Item 1 (b). Financial Information About Industry Segments.
Information required by Item 1(b) is incorporated herein by reference to
note 8 of the notes to consolidated financial statements included in the
2001 Annual Report to Shareholders.
As noted in Item 1(a), we are a real estate company engaged, through our
subsidiaries and affiliates, in most aspects of the real estate
industry, including the management, acquisition and development of
income-producing and other properties (retail and commercial),
community development and land development. These business segments are
further described below.
Item 1 (c). Narrative Description of Business.
Retail Centers:
--------------
At December 31, 2001, we owned, in whole or in part, and operated:
. 41 regional retail centers encompassing 32.6 million square feet,
including 19.8 million square feet leased to or owned by department
stores;
. Retail components of 5 mixed-use projects aggregating 0.9 million
square feet of leasable space;
. 12 community retail centers in Columbia, Maryland with 1.2 million
square feet of leasable space; and
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. 3 community retail centers in Summerlin, Nevada with 0.4 million
square feet of leasable space.
We also provide management services for other retail centers owned by
others under management agreements that provide for base and incentive
fees. We equity own interests in some of these centers. At
December 31, 2001 we managed 5 such centers with 4.9 million square feet
of space, 2.6 million of which was department store space.
The activities involved in operating and managing retail centers include:
. identifying and attracting desirable new tenants;
. negotiating lease terms with existing and prospective tenants;
. conducting local market and consumer research;
. developing and implementing short-term and long-term merchandising
and leasing plans;
. assisting tenants in the presentation of their merchandise and the
layout of their stores and store fronts; and
. maintaining the buildings and common areas.
Office and Other Properties:
---------------------------
At December 31, 2001, we owned and managed:
. Office components of 5 mixed-use projects with 1.9 million square feet
of leasable space;
. 41 office and industrial buildings with 2.2 million square feet of
leasable space and other properties in and around Las Vegas, Nevada;
. 18 office and industrial buildings with 1.4 million square feet of
leasable space in Columbia, Maryland;
. 56 office and industrial buildings with 3.8 million square feet of
leasable space primarily in the Baltimore-Washington corridor, but
outside Columbia.
The activities involved in operating and managing office and other
properties include:
. identifying and attracting desirable new tenants;
. negotiating lease terms with existing and prospective tenants;
. conducting local market research;
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. developing and implementing short-term and long-term leasing
plans;
. assisting tenants in the layout of their spaces; and
. maintaining the buildings and common areas.
Commercial Development:
----------------------
We renovate and expand existing retail centers and develop suburban and
urban retail centers, mixed-use projects and office and industrial
buildings primarily for ourselves or ventures in which we have invested.
The activities involved in these development activities include:
. initial market and consumer research;
. evaluating and acquiring land sites;
. obtaining necessary public approvals;
. engaging architectural and engineering firms to design projects;
. estimating and managing 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 and/or expanded retail centers, mixed-use
projects and other projects.
We and a lessee are expanding Fashion Show, in Las Vegas, Nevada. We are
an investor in and the development manager for a joint venture
developing the Village of Merrick Park, a mixed-use project in Coral
Gables, Florida. We are also planning additional retail center
expansions and are pursuing new retail center development in San
Antonio, Texas, Dade County, Florida and Summerlin, Nevada. In
addition, we are developing new office and industrial buildings in
Summerlin.
Community Development:
---------------------
We are the developers of the master-planned communities of Columbia,
Maryland and Summerlin, Nevada. Columbia is located in the
Baltimore-Washington corridor and encompasses approximately 18,000
acres. We own approximately 1,200
I-7
saleable acres of land in and around Columbia, including the adjacent
community of Emerson. Summerlin is located immediately north and west
of Las Vegas and encompasses approximately 22,500 acres. We own
approximately 7,300 saleable acres of land in Summerlin. We develop
and sell land in both communities to builders and other developers for
residential, commercial and other uses. We may also develop some of
this land for our own purposes. We are an investor in a joint venture
that is developing Fairwood, a new community in Prince Georges County,
Maryland. We are also developing or holding for sale parcels of land
elsewhere in Nevada and California.
General
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In all aspects of our business pertaining to the ownership, management,
acquisition or development of income-producing and other real estate, we
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.
We 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 our business, taken as a whole, nor any of our operating 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 our business. Future development opportunities may require
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 our operations. Compliance with such
laws has had no material adverse effect on our operating results or
competitive position in the past; we anticipate that they will have no
material adverse effect on our future operating results or competitive
position in the industry.
None of our operating 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% or more of our consolidated
revenues.
I-8
We believe department stores and other anchor tenants ("anchors") are
instrumental in creating and maintaining customer traffic in our
retail centers. Generally, higher levels of customer traffic will
result in higher tenant sales, a greater demand for space by other
tenants and, as a result, more favorable leasing terms (including
higher minimum rents) for our space.
Most anchors own their buildings, the land under them and, in some cases,
adjacent parking areas. Some anchors enter into long-term lease
agreements at rates that are generally lower than the rents charged to
other tenants at the retail center. Accordingly, anchors do not
provide a significant source of revenues in our operating results.
Anchors typically enter into reciprocal easement agreements that cover
items such as operational matters, initial construction and future
expansion.
The following table identifies the owners of the anchors and the name
plates on their sites within our portfolio (including our joint venture
and managed properties):
Owner/Name Plate Locations
- --------------------------------------------
May Company
Lord & Taylor 9
Strawbridge's 6
Hecht's 4
Foley's 4
Robinsons-May 1
--------
24
--------
JCPenney 21
Sears 17
Dillard's 15
Federated Department Stores
Macy's 11
Burdines 2
Bloomingdale's 2
--------
15
--------
Target Corporation
Marshall Field's 4
Mervyn's 3
--------
7
--------
Nordstrom 6
I-9
Owner/Name Plate, continued Locations
- --------------------------------------------
Saks Incorporated
Saks Fifth Avenue 3
Younkers 1
Carson Pirie Scott 1
--------
5
--------
Boscov's 4
Rich's 2
Nieman Marcus 1
Other occupied sites 11
Other unoccupied sites 6
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Total anchors 134
========
We employed 3,396 full-time and part-time employees at December 31, 2001.
I-10
Item 2. Properties.
We lease our 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 our operating properties is incorporated herein by
reference to the "Projects of The Rouse Company" table in pages 46
through 49 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 us for a fee. 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 operating properties subject to such leases
in whole or part are as follows:
Nature of Year of expiration
Property interest of lease
-------- -------- --------
American City Building Leasehold and fee 2020
Arizona Center Leasehold Various dates from
2017 to 2050
Augusta Mall Leasehold 2068
Bayside Marketplace Leasehold by joint venture 2062
Echelon Mall Leasehold 2008
Faneuil Hall Marketplace Leasehold 2074
Fashion Place Mall Leasehold 2059
First National Bank Plaza Leasehold 2013
Franklin Park Leasehold and fee by 2024
joint venture
The Gallery at Market Leasehold 2082
East
Governor's Square Leasehold 2054
Harborplace Leasehold 2054
Highland Mall Leasehold and fee by 2070
joint venture
I-11
Item 2. Properties, continued.
Nature of Year of expiration
Property interest of lease
-------- -------- --------
Hughes Center Leasehold 2059
The Jacksonville Landing Leasehold 2057
Mall St. Matthews Leasehold 2053
Pioneer Place Leasehold 2076
Plymouth Meeting Leasehold 2063
Riverwalk Leasehold and fee by joint 2076
venture
South Street Seaport Leasehold 2031
Tampa Bay Center Leasehold and fee by joint 2047
venture
Westdale Mall Leasehold by joint venture
Westlake Center Leasehold 2043
I-12
Item 3. Legal Proceedings.
None.
I-13
Item 4. Submission of Matters to a Vote of Security Holders.
None.
I-14
Executive Officers of the Registrant
The executive officers of the Company as of March 20, 2002 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 57 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
Jeffrey H. Donahue 55 Executive Vice-President 12/3/98 Executive Vice-President and Chief Financial
and Chief Financial Officer 9/23/93 Officer of the Company; formerly Senior Vice-
President and Chief Financial Officer of the
Company
Duke S. Kassolis 50 Senior Vice-President 7/1/99 Senior Vice-President and Director, Property
and Director, Property 9/23/93 Operations; formerly Senior Vice-President
Operations and Director of Office and Mixed-Use
Operations of the Company
Douglas A. McGregor 59 Vice Chairman and Chief 12/3/98 Vice Chairman and Chief Operating Officer;
Operating Officer formerly Executive Vice-President for
Development and Operations of the Company
Robert Minutoli 51 Senior Vice-President 9/23/93 Senior Vice-President and Director of
and Director of 8/17/93 New Business of the Company
New Business
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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
- ------------------ --- ------------------- ----------------- ----------------------------
Robert D. Riedy 56 Senior Vice-President 9/23/93 Senior Vice-President and Director of
and Director of Retail 8/17/93 Retail Leasing of the Company
Leasing
Alton J. Scavo 55 Senior Vice-President and 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
Manager of Columbia
Jerome D. Smalley 52 Executive Vice-President 12/3/98 Executive Vice-President - Development;
- Development formerly Senior Vice-President and Director
of the Commercial and Office Development
Division of the Company
Daniel C. Van Epp 46 Senior Vice-President 5/13/99 Senior Vice-President of the Company and
of the Company and President of The Howard Hughes Corporation;
President of The Howard formerly Vice-President, West Coast Community
Hughes Corporation Development Division of the Company and
Executive Vice-President, The Howard Hughes
Corporation
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 Anthony W. Deering.
None of the above-listed officers has any family relationship with any director
or other executive officer.
I-16
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 30 of Exhibit 13.
Item 6. Selected Financial Data.
Information required by Item 6 is incorporated by reference to page
29 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 31 through 43 of Exhibit 13.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Information required by Item 7A is incorporated herein by reference
to page 40 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 30 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 11,
2002.
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-3.
(b) Reports on Form 8-K:
Current Report on Form 8-K filed on January 16, 2002 disclosing that the
Company, Simon Property Group, Inc. and Westfield America Trust had
entered into an agreement to purchase substantially all of the assets of
Rodamco North America N.V.
Current Report on Form 8-K filed on January 18, 2002, disclosing that the
Company was selling 14.5 million shares of common stock under its
effective shelf registration statement.
(c) Exhibits required by Item 601 of Regulation S-K.
Exhibit No.
-----------
3 Articles of Incorporation and Bylaws
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
23 Consent of KPMG LLP, Independent Auditors
24 Power of Attorney
99 Additional Exhibits:
99.1 Form 11-K Annual Report of The Rouse Company Savings
Plan for the year ended December 31, 2001
99.2 Factors affecting future operating results
IV-1
The Rouse Company
Index to Financial Statements and Schedules
Page
----
Independent Auditors' Report IV-3
Financial Statements:
Included on pages 1 through
30 of Exhibit 13 incorporated herein by reference:
Consolidated Balance Sheets at December 31, 2001 and 2000
Consolidated Statements of Operations and Comprehensive Income
for the Years Ended December 31, 2001, 2000 and 1999
Consolidated Statements of Changes in Shareholders' Equity for
the Years Ended December 31, 2001, 2000 and 1999
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999
Notes to Consolidated Financial Statements
Schedules:
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 related
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 of The Rouse Company and
subsidiaries as listed in the accompanying index. In connection with our
audits of the consolidated financial statements, we have also audited the
financial statement schedules 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 auditing standards generally
accepted in the United States of America. 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, 2001 and 2000, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion, the related
financial statement schedules referred to above, 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 LLP
Baltimore, Maryland
February 22, 2002
IV-3
Schedule II
THE ROUSE COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended December 31, 2001, 2000 and 1999
(in thousands)
Additions
------------------------
Balance at Charged to Charged to Balance at
beginning costs and other end of
Descriptions of year expenses accounts Deductions year
- ------------ ---------- ---------- ---------- ---------- ----------
Year ended December 31, 2001:
Allowance for doubtful receivables $ 22,608 $ 8,992 $ 464/(1)/ $ 4,858/(2)/ $ 27,206
========== ========= ========= ========== ==========
Deferred tax asset valuation allowance $ --- $ 2,572 $ 4,463/(1)/ $ 959/(3)/ $ 6,076
========== ========= ========= ========== ==========
Preconstruction $ 7,576 $ 5,434 $ 749/(1)/ $ 6,231/(4)/ $ 7,528
========== ========= ========= ========== ==========
Year ended December 31, 2000:
Allowance for doubtful receivables $ 23,570 $ 6,683 $ --- $ 7,645/(2)/ $ 22,608
========== ========= ========= ========== ==========
Preconstruction $ 5,247 $ 4,691 $ --- $ 2,362/(4)/ $ 7,576
========== ========= ========= ========== ==========
Year ended December 31, 1999:
Allowance for doubtful receivables $ 19,014 $ 7,972 $ --- $ 3,416/(2)/ $ 23,570
========== ========= ========= ========== ==========
Preconstruction $ 15,908 $ --- $ --- $ 10,661/(4)/ $ 5,247
========== ========= ========= ========== ==========
Notes:
/(1)/ Balance acquired from The Rouse Company Incentive Compensation
Statutory Trust. Reference is made to note 2 to the consolidated
financial statements for information related to this acquisition.
/(2)/ Balances written off as uncollectible.
/(3)/ Recognition of deferred tax benefits previously provided for through
the valuation allowance account.
/(4)/ Costs of unsuccessful projects written off and other deductions.
IV-4
Schedule III
------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
--------------------- ------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- -------- ---- ----- ------ --------
Operating Properties:
The Mall in Columbia $ 136,487 $ 6,788 $ - $ 184,895 -
Retail Center
Columbia, MD
Pioneer Place 133,101 2,813 - 177,571 -
Mixed-Use Project
Portland, OR
Exton Square 101,916 4,979 - 166,356 -
Retail Center
Exton, PA
Fashion Show 39,019 35,036 120,347 8,899 -
Retail Center
Las Vegas, NV
South Street Seaport 45,000 - - 154,462 -
Retail Center
New York, NY
Arizona Center 73,621 98 - 152,231 -
Mixed-Use Project
Phoenix, AZ
Woodbridge Center 126,494 26,301 - 120,893 -
Retail Center
Woodbridge, NJ
Fashion Place 112,601 19,379 119,715 2,181 -
Retail Center
Salt Lake City, UT
Beachwood Place 114,666 10,673 - 128,892 -
Retail Center
Cleveland, OH
Gross amount at which carried
at close of period
---------------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- ------------
Operating Properties:
The Mall in Columbia $ 6,788 $ 184,895 $ 191,683 $ 27,058 08/71 N/A Note 6
Retail Center
Columbia, MD
Pioneer Place 2,813 177,571 180,384 36,905 03/90 N/A Note 6
Mixed-Use Project
Portland, OR
Exton Square 4,979 166,356 171,335 20,453 03/73 N/A Note 6
Retail Center
Exton, PA
Fashion Show 35,036 129,246 164,282 16,800 03/81 06/96 Note 6
Retail Center
Las Vegas, NV
South Street Seaport - 154,462 154,462 36,600 07/83 N/A Note 6
Retail Center
New York, NY
Arizona Center 98 152,231 152,329 42,915 07/83 N/A Note 6
Mixed-Use Project
Phoenix, AZ
Woodbridge Center 26,301 120,893 147,194 37,025 03/71 N/A Note 6
Retail Center
Woodbridge, NJ
Fashion Place 19,379 121,896 141,275 6,605 03/72 10/98 Note 6
Retail Center
Salt Lake City, UT
Beachwood Place 10,673 128,892 139,565 17,392 08/78 N/A Note 6
Retail Center
Cleveland, OH
IV-5
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
----------------------- ----------------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
- ----------- ------- ---- ----- ----- --------
Oviedo Marketplace $ 70,000 $ 9,594 $ - $ 129,859 -
Retail Center
Orlando, FL
Owings Mills 61,000 21,639 - 116,182 -
Retail Center
Baltimore, MD
Paramus Park 94,802 13,476 - 118,166 -
Retail Center
Paramus, NJ
Moorestown Mall 61,288 10,256 68,889 49,130 -
Retail Center
Moorestown, NJ
The Gallery at Harborplace 95,299 6,648 - 105,186 -
Mixed-Use Project
Baltimore, MD
Westlake Center 70,473 10,582 - 101,116 -
Mixed-Use Project
Seattle, WA
Mall St. Matthews 68,555 - - 108,083 -
Retail Center
Louisville, KY
Bayside Marketplace 72,622 - - 98,381 -
Retail Center
Miami, FL
Faneuil Hall Marketplace 55,000 - - 96,586 -
Retail Center
Boston, MA
Gross amount at which carried
at close of period
-------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
- ----------- ---- -------- ----- ------------ ------------ -------- -----------
Oviedo Marketplace $ 9,594 $ 129,859 $ 139,453 $ 10,182 03/98 N/A Note 6
Retail Center
Orlando, FL
Owings Mills 21,639 116,182 137,821 18,856 07/86 N/A Note 6
Retail Center
Baltimore, MD
Paramus Park 13,476 118,166 131,642 17,773 03/74 N/A Note 6
Retail Center
Paramus, NJ
Moorestown Mall 10,256 118,019 128,275 9,208 03/63 12/97 Note 6
Retail Center
Moorestown, NJ
The Gallery at Harborplace 6,648 105,186 111,834 30,073 09/87 N/A Note 6
Mixed-Use Project
Baltimore, MD
Westlake Center 10,582 101,116 111,698 31,171 10/88 N/A Note 6
Mixed-Use Project
Seattle, WA
Mall St. Matthews - 108,083 108,083 26,265 03/62 N/A Note 6
Retail Center
Louisville, KY
Bayside Marketplace - 98,381 98,381 22,783 04/87 N/A Note 6
Retail Center
Miami, FL
Faneuil Hall Marketplace - 96,586 96,586 15,493 08/76 N/A Note 6
Retail Center
Boston, MA
IV-6
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------------ ------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
White Marsh $ 78,488 $ 10,782 $ - $ 82,754 -
Retail Center
Baltimore, MD
Governor's Square 67,990 - - 82,974 -
Retail Center
Tallahassee, FL
Augusta Mall 56,431 4,697 - 74,782 -
Retail Center
Augusta, GA
Oakwood Center 51,889 15,938 - 63,083 -
Retail Center
Gretna, LA
Plymouth Meeting 33,336 702 - 77,776 -
Retail Center
Plymouth Meeting, PA
Cherry Hill Mall 75,441 14,767 - 60,610 -
Retail Center
Cherry Hill, NJ
Riverwalk 11,539 - - 72,212 -
Retail Center
New Orleans, LA
Hulen Mall 61,688 7,575 - 64,041 -
Retail Center
Ft. Worth, TX
Echelon Mall 56,060 6,160 - 63,736 -
Retail Center
Voorhees, NJ
Gross amount at which carried
at close of period
-------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- ----------
White Marsh $ 10,782 $ 82,754 $ 93,536 $ 24,000 08/81 N/A Note 6
Retail Center
Baltimore, MD
Governor's Square - 82,974 82,974 14,247 08/79 N/A Note 6
Retail Center
Tallahassee, FL
Augusta Mall 4,697 74,782 79,479 10,948 08/78 N/A Note 6
Retail Center
Augusta, GA
Oakwood Center 15,938 63,083 79,021 14,233 10/82 N/A Note 6
Retail Center
Gretna, LA
Plymouth Meeting 702 77,776 78,478 17,083 02/66 N/A Note 6
Retail Center
Plymouth Meeting, PA
Cherry Hill Mall 14,767 60,610 75,377 21,594 10/61 N/A Note 6
Retail Center
Cherry Hill, NJ
Riverwalk - 72,212 72,212 15,594 08/86 N/A Note 6
Retail Center
New Orleans, LA
Hulen Mall 7,575 64,041 71,616 13,886 08/77 N/A Note 6
Retail Center
Ft. Worth, TX
Echelon Mall 6,160 63,736 69,896 14,410 09/70 N/A Note 6
Retail Center
Voorhees, NJ
IV-7
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------------------ -------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Harborplace $ 34,066 $ - $ - $ 59,302 -
Retail Center
Baltimore, MD
3800 Howard Hughes Parkway 37,083 3,622 38,438 3,400 -
Office Building/Industrial
Las Vegas, NV
Blue Cross & Blue Shield 23,833 1,000 - 44,269 -
Building I
Office Building
Baltimore, MD
The Jacksonville Landing 1,629 - - 33,718 -
Retail Center
Jacksonville, FL
Village of Cross Keys 14,097 925 - 31,783 -
Mixed-Use Project
Baltimore, MD
Westdale Mall 22,138 697 30,495 1,251 -
Retail Center
Cedar Rapids, IA
3993 Howard Hughes Parkway - 1,526 - 28,924 -
Office Building
Las Vegas, NV
3773 Howard Hughes Parkway 21,272 1,739 22,625 3,564 -
Office Building
Las Vegas, NV
Gross amount at which carried
at close of period
-------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
Harborplace $ - $ 59,302 $ 59,302 $ 12,586 07/80 N/A Note 6
Retail Center
Baltimore, MD
3800 Howard Hughes Parkway 3,622 41,838 45,460 8,766 11/86 06/96 Note 6
Office Building/Industrial
Las Vegas, NV
Blue Cross & Blue Shield 1,000 44,269 45,269 13,368 07/89 N/A Note 6
Building I
Office Building
Baltimore, MD
The Jacksonville Landing - 33,718 33,718 15,829 06/87 N/A Note 6
Retail Center
Jacksonville, FL
Village of Cross Keys 925 31,783 32,708 11,258 09/65 N/A Note 6
Mixed-Use Project
Baltimore, MD
Westdale Mall 697 31,746 32,443 2,090 07/79 10/98 Note 6
Retail Center
Cedar Rapids, IA
3993 Howard Hughes Parkway 1,526 28,924 30,450 2,801 01/00 N/A Note 6
Office Building
Las Vegas, NV
3773 Howard Hughes Parkway 1,739 26,189 27,928 4,068 11/95 6/96 Note 6
Office Building
Las Vegas, NV
IV-8
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------------ ----------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Alexander & Alexander $ 16,684 $ 1,000 $ - $ 26,868 -
Building II
Office Building
Baltimore, MD
Hunt Valley 75 11,931 8,136 14,187 4,091 -
Office Building
Hunt Valley, MD
3960 Howard Hughes Parkway 23,254 800 - 24,845 -
Office Building
Las Vegas, NV
Seventy Columbia Corp Ctr 20,847 857 - 24,408 -
Office Building
Columbia, MD
The Gallery at Market East - - - 24,922 -
Retail Center
Philadelphia, PA
Mondawmin Mall 1,098 2,251 - 18,829 -
Retail Center
Baltimore, MD
Blue Cross & Blue Shield 8,693 1,000 - 16,413 -
Building II
Office Building
Baltimore, MD
Senate Plaza 11,144 2,284 13,319 1,585 -
Office Building
Camp Hill, PA
Gross amount at which carried
at close of period
--------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
Alexander & Alexander $ 1,000 $ 26,868 $ 27,868 $ 9,139 09/87 N/A Note 6
Building II
Office Building
Baltimore, MD
Hunt Valley 75 8,136 18,278 26,414 1,662 07/84 12/98 Note 6
Office Building
Hunt Valley, MD
3960 Howard Hughes Parkway 800 24,845 25,645 5,607 04/98 N/A Note 6
Office Building
Las Vegas, NV
Seventy Columbia Corp Ctr 857 24,408 25,265 7,654 06/92 N/A Note 6
Office Building
Columbia, MD
The Gallery at Market East - 24,922 24,922 8,619 08/77 N/A Note 6
Retail Center
Philadelphia, PA
Mondawmin Mall 2,251 18,829 21,080 9,123 01/78 N/A Note 6
Retail Center
Baltimore, MD
Blue Cross & Blue Shield 1,000 16,413 17,413 4,598 08/90 N/A Note 6
Building II
Office Building
Baltimore, MD
Senate Plaza 2,284 14,904 17,188 3,077 07/72 12/98 Note 6
Office Building
Camp Hill, PA
IV-9
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------------ ----------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
3753/3763 Howard Hughes Pky $ 10,154 $ 3,844 $ 12,018 $ 941 -
Office Building
Las Vegas, NV
Alexander & Alexander 9,727 650 - 15,796 -
Building I
Office Building
Baltimore, MD
Forty Columbia Corp Center 11,234 636 - 15,653 -
Office Building
Columbia, MD
Fifty Columbia Corp Center 11,637 463 - 15,687 -
Office Building
Columbia, MD
3930 Howard Hughes Parkway 4,800 3,108 11,279 1,325 -
Office Building
Las Vegas, NV
Sixty Columbia Corp Center 14,351 1,050 - 14,526 -
Office Building
Columbia, MD
Centerpointe 8,101 3,855 11,302 155 -
Office Building
Baltimore, MD
Tampa Bay Center 18,770 11,259 - 4,024 -
Retail Center
Tampa, FL
Gross amount at which carried
at close of period
-----------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
3753/3763 Howard Hughes Pky $ 3,844 $ 12,959 $ 16,803 $ 2,381 10/91 6/96 Note 6
Office Building
Las Vegas, NV
Alexander & Alexander 650 15,796 16,446 6,287 11/88 N/A Note 6
Building I
Office Building
Baltimore, MD
Forty Columbia Corp Center 636 15,653 16,289 6,696 06/87 N/A Note 6
Office Building
Columbia, MD
Fifty Columbia Corp Center 463 15,687 16,150 5,766 11/89 N/A Note 6
Office Building
Columbia, MD
3930 Howard Hughes Parkway 3,108 12,604 15,712 3,918 12/94 06/96 Note 6
Office Building
Las Vegas, NV
Sixty Columbia Corp Center 1,050 14,526 15,576 1,307 02/99 N/A Note 6
Office Building
Columbia, MD
Centerpointe 3,855 11,457 15,312 936 07/87 12/98 Note 6
Office Building
Baltimore, MD
Tampa Bay Center 11,259 4,024 15,283 2,157 08/76 N/A Note 6
Retail Center
Tampa, FL
IV-10
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
---------------------- ----------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Canyon Center C&D $ 139 $ 1,723 $ - $ 13,480 -
Office Building/Industrial
Las Vegas, NV
Canyon Center 11,862 2,081 7,161 5,281 -
Office Building
Las Vegas, NV
Schilling Plaza South 4,800 5,000 7,402 1,325 -
Office Building
Baltimore, MD
Schilling Plaza North 7,697 4,470 8,059 908 -
Office Building
Baltimore, MD
3980 Howard Hughes Parkway 10,032 879 5,583 6,251 -
Office Building
Las Vegas, NV
Crossing Business Ctr 5,979 2,842 1,416 8,305 -
Phase III
Office Building
Las Vegas, NV
Thirty Columbia Corp Ctr 12,544 1,160 - 10,816 -
Office Building
Columbia, MD
3770 Howard Hughes Parkway 5,117 691 8,010 3,034 -
Office Building
Las Vegas, NV
Gross amount at which carried
at close of period
--------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- ------------
Canyon Center C&D $ 1,723 $ 13,480 $ 15,203 $ 2,877 06/98 N/A Note 6
Office Building/Industrial
Las Vegas, NV
Canyon Center 2,081 12,442 14,523 1,931 03/98 N/A Note 6
Office Building
Las Vegas, NV
Schilling Plaza South 5,000 8,727 13,727 1,150 07/87 12/98 Note 6
Office Building
Baltimore, MD
Schilling Plaza North 4,470 8,967 13,437 758 07/80 12/98 Note 6
Office Building
Baltimore, MD
3980 Howard Hughes Parkway 879 11,834 12,713 1,767 04/97 N/A Note 6
Office Building
Las Vegas, NV
Crossing Business Ctr 2,842 9,721 12,563 1,915 09/96 N/A Note 6
Phase III
Office Building
Las Vegas, NV
Thirty Columbia Corp Ctr 1,160 10,816 11,976 5,392 04/86 N/A Note 6
Office Building
Columbia, MD
3770 Howard Hughes Parkway 691 11,044 11,735 4,445 10/90 06/96 Note 6
Office Building
Las Vegas, NV
IV-11
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
-------------------- ---------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- -------- ---- --------- -------- ---------
Twenty Columbia Corp Ctr $ 6,919 $ 927 $ - $ 10,106 -
Office Building
Columbia, MD
Hickory Ridge 8,028 907 - 10,080 -
Village Center
Columbia, MD
American City Building 3,163 - - 10,790 -
Office Building
Columbia, MD
Dorsey Search 9,092 911 - 9,815 -
Village Center
Columbia, MD
Inglewood Office II 5,859 2,233 7,304 1,186 -
Office Building
Landover, MD
10000 W. Charleston Arbors 23,981 695 - 9,730 -
Office Building
Summerlin, NV
Harper's Choice 7,566 546 - 9,578 -
Village Center
Columbia, MD
201 International Circle 3,571 5,464 3,763 652 -
Office Building
Baltimore, MD
Gross amount at which carried
at close of period
--------------------------------------------------------------------- Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- --------- ------ ------------ ------------ -------- ------------
Twenty Columbia Corp Ctr $ 927 $ 10,106 $ 11,033 $ 5,048 06/81 N/A Note 6
Office Building
Columbia, MD
Hickory Ridge 907 10,080 10,987 2,390 06/92 N/A Note 6
Village Center
Columbia, MD
American City Building - 10,790 10,790 9,592 03/69 N/A Note 6
Office Building
Columbia, MD
Dorsey Search 911 9,815 10,726 3,066 09/89 N/A Note 6
Village Center
Columbia, MD
Inglewood Office II 2,233 8,490 10,723 1,047 07/86 12/98 Note 6
Office Building
Landover, MD
10000 W. Charleston Arbors 695 9,730 10,425 1,452 05/99 N/A Note 6
Office Building
Summerlin, NV
Harper's Choice 546 9,578 10,124 3,776 06/71 N/A Note 6
Village Center
Columbia, MD
201 International Circle 5,464 4,415 9,879 491 07/82 12/98 Note 6
Office Building
Baltimore, MD
IV-12
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
--------------------- ----------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Crossing Business Center $ 7,160 $ 1,326 $ 7,951 $ 535 -
Phase I
Office Building
Las Vegas, NV
Riverspark 2/Building 2 3,629 2,783 6,594 - -
Office Building/Industrial
Columbia, MD
Inglewood Office
Center I 3,140 2,245 5,867 1,148 -
Office Building
Landover, MD
Metro Plaza - 202 - 8,913 -
Retail Center
Baltimore, MD
Ten Columbia Corp Center 2,621 733 - 8,263 -
Office Building
Columbia, MD
10190 Covington Cross 6,724 1,257 398 7,285 -
Office Building
Las Vegas, NV
Riverspark Building B 2,864 2,117 2,545 3,940 -
Industrial Building
Columbia, MD
Wilde Lake 1,457 1,486 - 6,877 -
Village Center
Columbia, MD
Gross amount at which carried
at close of period
-------------------------------------------------------------------- Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- ---------- ------- ------------ ------------- --------- ------------
Crossing Business Center $ 1,326 $ 8,486 $ 9,812 $ 1,465 12/94 06/96 Note 6
Phase I
Office Building
Las Vegas, NV
Riverspark 2/Building 2 2,783 6,594 9,377 540 07/87 12/98 Note 6
Office Building/Industrial
Columbia, MD
Inglewood Office 2,245 7,015 9,260 811 07/82 12/98 Note 6
Center I
Office Building
Landover, MD
Metro Plaza 202 8,913 9,115 4,570 N/A 12/82 Note 6
Retail Center
Baltimore, MD
Ten Columbia Corp Center 733 8,263 8,996 3,870 09/81 N/A Note 6
Office Building
Columbia, MD
10190 Covington Cross 1,257 7,683 8,940 1,001 12/97 N/A Note 6
Office Building
Las Vegas, NV
Riverspark Building B 2,117 6,485 8,602 356 07/85 12/98 Note 6
Industrial Building
Columbia, MD
Wilde Lake 1,486 6,877 8,363 4,553 07/67 N/A Note 6
Village Center
Columbia, MD
IV-13
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
-------------------- -----------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Kings Contrivance $ 7,386 $ 1,072 $ - $ 7,232 -
Village Center
Columbia, MD
USA Group 6,693 1,197 4,880 1,942 -
Office Building/Industrial
Las Vegas, NV
Columbia Crossing 6,515 1,527 - 6,352 -
Retail Center
Columbia, MD
Crossing Business Center 7,443 357 7,071 37 -
Phase II
Office Building/Industrial
Las Vegas, NV
Corporate Pointe - 1,743 - 5,552 -
Building III
Office Building
Las Vegas, NV
Inglewood Tech IV 3,175 2,576 3,365 846 -
Industrial Building
Landover, MD
Canyon Business Center 90 1,188 - 5,588 -
Phase V
Office Building/Industrial
Las Vegas, NV
Gross amount at which carried
at close of period
--------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
Kings Contrivance $ 1,072 $ 7,232 $ 8,304 $ 2,894 06/86 N/A Note 6
Village Center
Columbia, MD
USA Group 1,197 6,822 8,019 744 11/98 N/A Note 6
Office Building/Industrial
Las Vegas, NV
Columbia Crossing 1,527 6,352 7,879 1,026 11/98 N/A Note 6
Retail Center
Columbia, MD
Crossing Business Center 357 7,108 7,465 1,029 12/95 06/96 Note 6
Phase II
Office Building/Industrial
Las Vegas, NV
Corporate Pointe 1,743 5,552 7,295 275 02/01 N/A Note 6
Building III
Office Building
Las Vegas, NV
Inglewood Tech IV 2,576 4,211 6,787 463 07/86 12/98 Note 6
Industrial Building
Landover, MD
Canyon Business Center 1,188 5,588 6,776 1,366 03/98 N/A Note 6
Phase V
Office Building/Industrial
Las Vegas, NV
IV-14
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
---------------------- ---------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
- ----------- ------- ---- ----- ----- --------
Raytheon $ 153 $ 422 $ 6,134 $ - -
Office Building/Industrial
Las Vegas, NV
Plaza East 4,297 910 5,297 108 -
Office Building/Industrial
Las Vegas, NV
Inglewood Tech V 3,827 2,736 3,494 - -
Industrial Building
Landover, MD
First National Bank Plaza 5,061 - - 6,149 -
Office Building
Mt. Prospect, IL
Hunt Valley 49 3,446 1,718 3,892 357 -
Industrial Building
Hunt Valley, MD
Hunt Valley 36 3,201 1,256 3,954 636 -
Industrial Building
Hunt Valley, MD
Plaza West 4,163 195 5,360 130 -
Office Building/Industrial
Las Vegas, NV
Oakland Mills 1,178 1,746 - 3,884 -
Village Center
Columbia, MD
Gross amount at which carried
at close of period
--------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
- ----------- ---- -------- ----- ------------ ------------ --------- -----------
Raytheon $ 422 $ 6,134 $ 6,556 $ 909 11/92 06/96 Note 6
Office Building/Industrial
Las Vegas, NV
Plaza East 910 5,405 6,315 864 12/93 06/96 Note 6
Office Building/Industrial
Las Vegas, NV
Inglewood Tech V 2,736 3,494 6,230 394 07/86 12/98 Note 6
Industrial Building
Landover, MD
First National Bank Plaza - 6,149 6,149 2,294 07/81 N/A Note 6
Office Building
Mt. Prospect, IL
Hunt Valley 49 1,718 4,249 5,967 342 02/82 12/98 Note 6
Industrial Building
Hunt Valley, MD
Hunt Valley 36 1,256 4,590 5,846 471 02/76 12/98 Note 6
Industrial Building
Hunt Valley, MD
Plaza West 195 5,490 5,685 889 11/95 06/96 Note 6
Office Building/Industrial
Las Vegas, NV
Oakland Mills 1,746 3,884 5,630 862 06/69 N/A Note 6
Village Center
Columbia, MD
IV-15
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------- -------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Long Reach $ 4,696 $ 34 $ - $ 5,510 -
Village Center
Columbia, MD
Dobbin Road 2,114 542 - 4,989 -
Village Center
Columbia, MD
Rutherford 60 3,806 1,166 4,163 - -
Industrial Building
Woodlawn, MD
Other properties and
related investments 71,449 55,476 63,470 98,671 -
--------------------------------- --------------------
Total Operating
Properties $2,653,986 $408,124 $645,747 $3,373,597 -
--------------------------------- --------------------
Gross amount at which carried
at close of period
-------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
- ----------- ---- -------- ----- ------------ ------------ -------- -----------
Long Reach $ 34 $ 5,510 $ 5,544 $ 2,099 06/74 N/A Note 6
Village Center
Columbia, MD
Dobbin Road 542 4,989 5,531 2,280 06/83 N/A Note 6
Village Center
Columbia, MD
Rutherford 60 1,166 4,163 5,329 557 07/72 12/98 Note 6
Industrial Building
Woodlawn, MD
Other properties and
related investments 55,476 162,141 217,617 49,821
----------------------------------------------
Total Operating
Properties $408,124 $4,019,344 $4,427,468 $853,087
----------------------------------------------
IV-16
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
--------------------------- ----------------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- -------- ------ ------------ -------- ---------
Properties in Development:
Fashion Show Expansion $ - $ 23,539 $ - $ 108,265 -
Expansion of Retail Center
Las Vegas, NV
Summerlin Town Center 6,543 14,970 - 2,686 -
New Retail Center
Summerlin, NV
Arizona Center 12,800 13,893 - - -
Developed/Developable Land
Under Master Lease
Phoenix, AZ
La Cantera Center - - - 8,440 -
New Retail Center
San Antonio, TX
Canyon Pointe - 7,350 - 426 -
New Retail Center
Summerlin, NV
Coral Gables 1,195 7,272 - - -
Developed/Developable Land
Coral Gables, FL
Fashion Place Expansion - - - 6,751 -
Expansion of Retail Ctr
Salt Lake City, UT
The Mall in Columbia - - - 5,686 -
Expansion of Retail Center
Columbia, MD
Gross amount at which carried
at close of period
------------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
---------- ------- ---------- ---------- ------------- ------------ -------- -------------
Properties in Development:
Fashion Show Expansion $ 23,539 $ 108,265 $ 131,804 N/A N/A N/A N/A
Expansion of Retail Center
Las Vegas, NV
Summerlin Town Center 14,970 2,686 17,656 N/A N/A N/A N/A
New Retail Center
Summerlin, NV
Arizona Center 13,893 - 13,893 N/A N/A N/A N/A
Developed/Developable Land
Under Master Lease
Phoenix, AZ
La Cantera Center - 8,440 8,440 N/A N/A N/A N/A
New Retail Center
San Antonio, TX
Canyon Pointe 7,350 426 7,776 N/A N/A N/A N/A
New Retail Center
Summerlin, NV
Coral Gables 7,272 - 7,272 N/A N/A N/A N/A
Developed/Developable Land
Coral Gables, FL
Fashion Place Expansion - 6,751 6,751 N/A N/A N/A N/A
Expansion of Retail Ctr
Salt Lake City, UT
The Mall in Columbia - 5,686 5,686 N/A N/A N/A N/A
Expansion of Retail Center
Columbia, MD
IV-17
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------- ------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Pioneer Place - - - 3,434 -
Expansion of Mixed-Use
Project
Portland, OR
Other projects - 882 - 14,312 -
-------------------------------- -------------------------
Total Properties in
Development $ 20,538 $ 67,906 $ - $ 150,000 -
-------------------------------- -------------------------
Gross amount at which carried
At close of period
--------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
Pioneer Place - 3,434 3,434 N/A N/A N/A N/A
Expansion of Mixed-Use
Project
Portland, OR
Other projects 882 14,312 15,194 N/A
------------------------------------------------
Total Properties in
Development $ 67,906 $ 150,000 $ 217,906 -
------------------------------------------------
IV-18
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
(in thousands)
Costs capitalized
Initial cost to subsequent
Company to acquisition
------------------- -------------------------
Buildings
and Carrying
Encum- Improve- Improve- costs
Description brances Land ments ments (note 2)
----------- ------- ---- ----- ----- --------
Investment Land and
Land Held For Development
and Sale:
Summerlin $ 88,413 $ 74,029 $ - $ 87,804 -
Land in Various Stages
of Development
Summerlin, NV
Columbia and Emerson 12,178 53,000 - 29,106 -
Land in Various Stages
of Development
Howard County, MD
Canyon Springs - 12,872 - 11,909 -
Land Held for Development
Riverside County, CA
Investment Land
Las Vegas, NV - 15,047 - - -
Other - 55 - 469 -
---------------------------------------- -------------------------
Total Investment Land and
Land Held for Development
& Sale 100,591 155,003 - 129,288 -
---------------------------------------- -------------------------
Total $2,775,115 $631,033 $645,747 $3,652,885 -
======================================== =========================
Gross amount at which carried
at close of period
----------------------------------------------------------------------
Life on
which depre-
Buildings Accumulated Date of ciation in
and depreciation completion latest income
Improve- and of Date statement
Description Land ments Total amortization construction acquired is computed
----------- ---- -------- ----- ------------ ------------ -------- -----------
Investment Land and
Land Held For Development
and Sale:
Summerlin $161,833 $ - $ 161,833 N/A N/A 06/96 N/A
Land in Various Stages
of Development
Summerlin, NV
Columbia and Emerson 82,106 - 82,106 N/A N/A 09/85 N/A
Land in Various Stages
of Development
Howard County, MD
Canyon Springs 24,781 - 24,781 N/A N/A 07/89 N/A
Land Held for Development
Riverside County, CA
Investment Land
Las Vegas, NV 15,047 - 15,047 N/A
Other 524 - 524 N/A
-----------------------------------------------------------
Total Investment Land and
Land Held for Development
& Sale 284,291 - 284,291 -
-----------------------------------------------------------
Total $760,321 $4,169,344 $4,929,665 $853,087
===========================================================
IV-19
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
Notes:
/(1)/ Reference is made to notes 1, 3 and 6 to the consolidated financial
statements.
/(2)/ The determination of these amounts is not practicable and,
accordingly, they are included in improvements.
/(3)/ The changes in total cost of properties for the years ended December
31, 2001, 2000 and 1999 are as follows (in thousands):
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 3,898,984 $ 3,888,455 $ 4,826,913
Additions, at cost 319,735 212,040 219,374
Cost of properties acquired from
The Rouse Company Incentive Compensation
Statutory Trust (note 7) 802,720 -- --
Cost of other properties acquired --- 44,685 --
Cost of land sales (87,382) -- (7,211)
Retirements, sales and other
dispositions (4,392) (246,196) (1,105,486)
Provision for loss on operating properties --- --- (45,135)
----------- ----------- -----------
Balance at end of year $ 4,929,665 $ 3,898,984 $ 3,888,455
=========== =========== ===========
IV-20
Schedule III, continued
-----------------------
THE ROUSE COMPANY AND SUBSIDIARIES
Real Estate and Accumulated Depreciation (note 1)
December 31, 2001
Notes:
/(4)/ The changes in accumulated depreciation and amortization for the
years ended December 31, 2001, 2000 and 1999 are as follows
(in thousands):
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 608,061 $ 527,737 $ 525,098
Depreciation and amortization
charged to operations 125,504 90,307 94,532
Retirements, sales and other, net 778 (9,983) (91,893)
Accumulated depreciation on properties
acquired from The Rouse Company
Incentive Compensation Statutory
Trust (note 7) 118,744 -- --
--------- --------- ---------
Balance at end of year $ 853,087 $ 608,061 $ 527,737
========= ========= =========
/(5)/ The aggregate cost of properties for Federal income tax purposes is
approximately $3,786,755,000 at December 31, 2001.
/(6)/ Reference is made to note 1(c) to the consolidated financial
statements for information related to depreciation.
/(7)/ Reference is made to note 2 to the consolidated financial statements
for information related to the acquisition of properties (majority
financial interest ventures) from The Rouse Company Incentive
Compensation Statutory Trust.
/(8)/ Certain amounts for prior years have been reclassified to conform to
the presentation for 2001.
IV-21
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 22, 2002
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 22, 2002
Chairman of the Board, President
and Chief Executive Officer
Principal Financial Officer:
/s/ Jeffrey H. Donahue
- ------------------------------------------
Jeffrey H. Donahue March 22, 2002
Executive Vice President and
Chief Financial Officer
Principal Accounting Officer:
/s/ Melanie M. Lundquist
- ------------------------------------------
Melanie M. Lundquist March 22, 2002
Vice President and Corporate Controller
IV-22
Board of Directors:
David H. Benson, Jeremiah E. Casey, Platt W. Davis, III, Anthony W.
Deering, Rohit M. Desai, Juanita T. James, Thomas J. McHugh, Hanne M. Merriman,
Roger W. Schipke, John G. Schreiber, Mark R. Tercek and Gerard J. M. Vlak.
By:/s/ Anthony W. Deering
---------------------------------------
Anthony W. Deering March 22, 2002
For himself and as
Attorney-in-fact for
the above-named persons
IV-23
Exhibit Index
Exhibit No.
- -----------
3 Articles of Incorporation and Bylaws
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
23 Consent of KPMG LLP, Independent Auditors
24 Power of Attorney
99 Additional Exhibits:
99.1 Form 11-K Annual Report of The Rouse Company
Savings Plan for the year ended December 31, 2001
99.2 Factors affecting future operating results