Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-1743
The Rouse Company
(Exact name of registrant as specified in its charter)
Maryland 52-0735512
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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
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 the number of shares outstanding of the issuer's common stock as
of April 29, 1994:
Common Stock, $0.01 par value 47,562,749
Title of Class Number of Shares
Part I. Financial Information
Item 1. Financial Statements:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended March 31, 1994 and 1993
(Unaudited, in thousands except per share amounts, note 1)
Three months
ended March 31,
1994 1993
Revenues:
Operating properties:
Retail centers $115,840 $107,306
Office, mixed-use and other 34,855 34,554
150,695 141,860
Land sales 11,168 9,669
Corporate interest income 671 1,213
162,534 152,742
Operating expenses, exclusive of
provision for bad debts, depreciation
and amortization:
Operating properties:
Retail centers 62,752 58,597
Office, mixed-use and other 17,872 16,975
80,624 75,572
Land sales 6,189 5,299
Development 1,493 435
Corporate 1,750 1,365
90,056 82,671
Interest expense:
Operating properties:
Retail centers 31,056 29,999
Office, mixed-use and other 16,042 16,513
47,098 46,512
Land sales 1,433 790
Development 124 124
Corporate 2,688 5,616
51,343 53,042
Provision for bad debts 818 1,107
Depreciation and amortization 18,147 17,227
160,364 154,047
Gain (loss) on dispositions of assets and
other provisions, net (note 4) (4,793) (444)
The accompanying notes are an integral part of these statements.
1
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations, continued
Three Months Ended March 31, 1994 and 1993
(Unaudited, in thousands except per share amounts, note 1)
Three months
ended March 31,
1994 1993
Loss before income
taxes and extraordinary losses $(2,623) $(1,749)
Income tax benefit (provision):
Current - state (131) (93)
Deferred 504 299
373 206
Loss before
extraordinary losses (2,250) (1,543)
Extraordinary losses,
net of related income tax benefits (note 5) (474) (958)
Net loss $(2,724) $(2,501)
LOSS PER SHARE OF COMMON STOCK
AFTER PROVISION FOR DIVIDENDS
ON PREFERRED STOCK:
Loss before extraordinary losses $ (.12) $ (.07)
Extraordinary losses (.01) (.02)
$ (.13) $ (.09)
DIVIDENDS PER SHARE:
Common Stock $ .17 $ .15
Preferred Stock $ .81 $ .39
The accompanying notes are an integral part of these statements.
2
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1994 and December 31, 1993
(Unaudited, in thousands, note 1)
March 31, December 31,
1994 1993
Assets:
Property:
Operating properties:
Property and deferred costs of projects $2,795,500 $2,821,303
Less accumulated depreciation
and amortization 442,829 429,070
2,352,671 2,392,233
Properties in development (note 2) 70,227 57,065
Properties held for development and sale 129,442 131,827
Total property 2,552,340 2,581,125
Prepaid expenses, deferred charges
and other assets 100,281 107,972
Accounts and notes receivable 85,153 77,926
Investments in marketable securities 38,684 34,403
Cash and cash equivalents 68,528 73,556
Total $2,844,986 $2,874,982
The accompanying notes are an integral part of these statements.
3
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1994 and December 31, 1993
(Unaudited, in thousands, note 1)
March 31, December 31,
1994 1993
Liabilities:
Debt (note 3):
Property debt not carrying a Parent
Company guarantee of repayment $1,864,470 $1,886,257
Parent Company debt and debt carrying a
Parent Company guarantee of repayment:
Property debt 293,566 273,540
Convertible subordinated debentures 130,000 130,000
Other debt 120,700 120,700
544,266 524,240
Total debt 2,408,736 2,410,497
Obligations under capital leases 62,258 63,099
Accounts payable, accrued expenses
and other liabilities 194,478 209,256
Deferred income taxes 78,220 78,979
Shareholders' equity:
Series A Convertible Preferred stock of 1 cent
par value per share; 4,025,000 shares
authorized; 4,024,905 shares issued in
1994 with a liquidation preference of
$201,205 and 4,025,000 shares issued in 1993
with a liquidation preference of $201,250 40 40
Common stock of 1 cent par value per share;
250,000,000 shares authorized; 47,562,449
shares issued in 1994 and 47,562,226
shares issued in 1993 476 476
Additional paid-in capital 283,755 281,533
Accumulated deficit (182,977) (168,898)
Total shareholders' equity 101,294 113,151
Total $2,844,986 $2,874,982
The accompanying notes are an integral part of these statements.
4
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993
(Unaudited, in thousands, note 1)
1994 1993
Cash flows from operating activities:
Rents and other revenues received $148,055 $145,486
Proceeds from land sales 9,627 7,884
Interest received 1,685 2,398
Land development expenditures (3,614) (4,152)
Operating expenditures:
Operating properties (74,740) (72,387)
Land sales, development and corporate (4,981) (4,111)
Interest paid:
Operating properties (50,893) (47,497)
Land sales, development and corporate (2,950) (4,333)
Net cash provided by operating activities 22,189 23,288
Cash flows from investing activities:
Expenditures for properties in development
and improvements to existing properties
funded by debt (14,284) (26,363)
Expenditures for property acquisitions - (22,000)
Expenditures for improvements to
existing properties funded by cash
provided by operating activities:
Tenant leasing and remerchandising (2,385) (2,694)
Building and equipment (99) (2,317)
Purchases of marketable securities (39,846) (875)
Proceeds from redemptions or sales of
marketable securities 35,565 4,746
Other 379 (212)
Net cash used in investing activities (20,670) (49,715)
Cash flows from financing activities:
Proceeds from issuance of property debt 23,786 96,042
Repayments of property debt:
Scheduled principal payments (9,527) (4,674)
Other payments (2,117) (150,919)
Proceeds from issuance of other debt - 123,025
Repayments of other debt (7,333) (57,882)
Proceeds from issuance of Preferred stock - 196,057
Proceeds from exercise of stock options 2 96
Dividends paid (11,358) (5,088)
Net cash (used in) provided by financing
activities (6,547) 196,657
Net (decrease) increase in cash and cash
equivalents $ (5,028) $170,230
The accompanying notes are an integral part of these statements.
5
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993
(Unaudited, in thousands, note 1)
1994 1993
Reconciliation of net loss to net cash
provided by operating activities:
Net loss $(2,724) $(2,501)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 18,147 17,227
(Gain) loss on dispositions of assets
and other provisions, net 4,793 444
Deferred income tax benefit (504) (299)
Extraordinary losses, net of related income
tax benefits 474 958
Additions to pre-construction reserve 900 200
Provision for bad debts 818 1,107
Decrease in operating assets and
liabilities, net 285 6,152
Net cash provided by operating activities $22,189 $23,288
Schedule of Non-Cash Investing and Financing
Activities:
Mortgage debt extinguished in connection
with the disposition of an interest
in a property $15,681 $ -
Value of non-cash consideration given in
connection with the acquisition of an
interest in a property - 4,000
Mortgage debt assumed in connection with the
acquisition of an interest in a property - 21,819
The accompanying notes are an integral part of these statements.
6
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
March 31, 1994
(1) Principles of statement presentation
The unaudited consolidated financial statements include all
adjustments which are necessary, in the opinion of management, to
fairly reflect the Company's financial position and results of
operations. All such adjustments are of a normal recurring
nature. The statements have been prepared using the accounting
policies described in the 1993 Annual Report to Shareholders.
In its annual reports, the Company has included certain supplementary
current value basis financial information with the historical cost
basis financial statements. The current value basis presentation
has been and will continue to be an integral part of the Company's
formal, year-end reporting, but will not be included in quarterly
reports to shareholders. Therefore, all of the financial
information contained herein is based on the historical cost basis
as required by generally accepted accounting principles.
(2) Properties in development
Properties in development include construction and development in
progress and pre-construction costs, net. The construction and
development in progress accounts include land and land improvements
of $12,526,000 at March 31, 1994.
Changes in pre-construction costs, net, for the three months ended
March 31, 1994 are summarized as follows (in thousands):
Balance at beginning of period, before
pre-construction reserve $18,473
Costs incurred 2,065
Costs transferred to construction and development
in progress (3,141)
Costs transferred to operating properties (185)
Costs of unsuccessful projects written-off -
17,212
Less pre-construction reserve 13,722
Balance at end of period, net $ 3,490
7
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited), continued
(3) Debt
Debt at March 31, 1994 and December 31, 1993 is summarized as
follows (in thousands):
March 31, 1994 December 31, 1993
Due in Due in
Total one year Total one year
Mortgages and bonds $1,945,536 $49,409 $1,923,791 $30,485
Convertible sub-
ordinated debentures 130,000 - 130,000 -
Other loans 333,200 26,246 356,706 26,003
Total $2,408,736 $75,655 $2,410,497 $56,488
The amounts due in one year reflect the terms of existing loan
agreements except where refinancing commitments from outside lenders
have been obtained. In these instances, maturities are determined
based on the terms of the refinancing commitments.
(4) Gain (loss) on dispositions of assets and other provisions, net
The gain (loss) on dispositions of assets and other provisions, net,
in 1994 relates primarily to provisions for losses on two
investments in operating properties ($7,728,000). These provisions
were recognized based on management's determination that the Company
would not continue to support the projects under the existing
arrangements with lenders and/or partners and that it was unlikely
that the Company would recover all of its investments in these
projects based on forecasts of future cash flows. These losses were
partially offset by a gain related to the disposition of an interest
in a property the Company continues to manage ($2,935,000).
The loss in 1993 relates primarily to the disposition of an interest
in a property the Company continues to manage.
(5) Extraordinary losses, net of related income tax benefits
The extraordinary losses in 1994 result from early extinguishments of
debt and damages to a retail property as a result of an earthquake.
The extraordinary losses in 1993 result from early extinguishments of
debt.
8
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, (Unaudited), continued
(6) Contingencies
On November 6, 1990, Robert P. Guastella Equities, Inc. ("Plaintiff"), a
former tenant at the Riverwalk Shopping Center in New Orleans, Louisiana
("Riverwalk"), which is owned and operated by New Orleans Riverwalk
Associates, an affiliate of the Company ("NORA"), filed suit in the Civil
District Court of Orleans Parish, Louisiana against NORA, the Company,
two Company affiliates, and a partner of NORA (collectively,
"Defendants"). Plaintiff alleges that Defendants breached Plaintiff's
lease agreement with NORA for the operation of a restaurant at Riverwalk
and that as a result of these breaches it suffered losses and could not
pay the rentals due under the lease agreement, as a result of which the
lease and its tenancy were terminated by NORA. Plaintiff sought damages
of approximately $600,000 for these alleged breaches. In addition, on
September 3, 1992, Plaintiff claimed $33,000,000 for alleged lost future
profits which it claimed it would have earned had its lease not been
terminated. The Defendants filed answers denying the claims of Plaintiff
and asserting other defenses. NORA also asserted a counterclaim against
Plaintiff and its individual guarantors for past due rentals and other
charges in the approximate amount of $300,000 plus interest and
attorneys' fees as provided for in the lease agreement. The case was
tried before a jury and, on October 28, 1993, the jury returned a verdict
against Defendants upon which judgment was entered by the trial court on
January 7, 1994, in the total net amount of approximately $9,128,000
(which included a net award for lost future profits of approximately
$8,640,000) plus interest and attorneys' fees in an amount to be
determined. On May 6, 1994, the trial court denied all post-trial
motions of both Plaintiff and Defendants, including Defendants' Motions
for Judgment Notwithstanding the Verdict, Remittitur and/or New Trial.
The trial court also entered an amended judgment in which it awarded
Plaintiff $450,000 in attorneys' fees and awarded Defendants $25,000 in
attorneys' fees. Defendants believe that the verdict and judgment as
entered to date are contrary to the facts and applicable law. Defendants
intend to vigorously pursue their rights of appeal.
In addition, the Company and certain of its subsidiaries and affiliates are
defendants in various litigation matters arising in the ordinary course
of business, some of which involve claims for damages that are
substantial in amount. Some of these litigation matters are covered by
insurance. In the opinion of management, adequate provision has been
made for losses, with respect to all litigation matters, where
appropriate, and the ultimate resolution of all such litigation matters
is not likely to have a material effect on the consolidated financial
position of the Company. Due to the Company's modest and fluctuating net
earnings (loss), it is not possible to predict whether the resolution of
these matters is likely to have a material effect on the Company's
consolidated net earnings (loss), and it is, therefore, possible that the
resolution of these matters could have such a material effect in any
future quarter or annual fiscal period.
9
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations:
The following discussion and analysis covers any material changes in
financial condition since December 31, 1993 and any material changes in
the results of operations for the three months ended March 31, 1994 as
compared to the same period in 1993. This discussion and analysis should
be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in the 1993
Annual Report to Shareholders.
Operating Results:
Operating properties:
Revenues from retail centers increased $8,534,000 while total operating and
interest expenses for retail centers increased $4,975,000 for the three
months ended March 31, 1994 as compared to the same period in 1993. The
comparisons of revenues and expenses for the period are affected by
changes in the composition of the Company's portfolio of retail centers,
including the acquisition of an interest in a retail center in the second
quarter of 1993 and the openings of expansions in 1993. The effect of
these changes was to increase revenues and expenses as compared to the
same period in 1993. Increases in effective rents due to re-leasing
efforts and increases in occupancy rates and recoveries of operating
expenses from tenants at certain centers also contributed to the increase
in revenues. The increase in total operating and interest expenses is
net of reductions in interest expense due to debt repayments and
refinancings.
Revenues from office, mixed-use and other properties increased $301,000
while total operating and interest expenses increased $1,294,000 for the
three months ended March 31, 1994 as compared to the same period in 1993.
The increase in revenues is attributable to the openings of two
industrial buildings in Columbia in 1993 and leasing of vacant space,
partially offset by lower recoveries of operating expenses from tenants
at certain projects. The increase in expenses is due primarily to
operating and depreciation expenses related to the Columbia industrial
buildings and was mitigated by a reduction in interest expense due to
debt reductions, the expiration of certain interest rate exchange
agreements in 1993 and the exercise of an option to reduce the effective
interest rate on a mortgage.
Land sales:
Revenues from land sales increased $1,499,000 and total costs and expenses
increased $1,533,000 for the three months ended March 31, 1994, when
compared to the same period in 1993. The increase in revenues in 1994
relates to higher sales of land for commercial uses. The increase in
costs and expenses in 1994 is attributable to increased costs of sales
related to higher sales revenues and higher interest expenses due to
lower levels of land development activity on projects other than
Columbia.
10
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued:
Development:
These costs consist primarily of additions to the pre-construction reserve
and new business costs. The pre-construction reserve is maintained to
provide for costs of projects which may not go forward to completion.
New business costs relate primarily to the initial evaluation of
acquisition and development opportunities. These costs increased in 1994
when compared to 1993 due to the Company's more aggressive pursuit of new
development and acquisition opportunities.
Corporate:
Corporate interest income decreased $542,000 for the three months ended
March 31, 1994 when compared to the same period in 1993. The decrease is
primarily attributable to lower investment balances due to the use of the
proceeds from the offerings of the 8.5% unsecured notes and Preferred
stock completed in the first quarter of 1993 and, to a lesser extent,
lower investment rates.
Corporate interest costs were $3,148,000 and $6,157,000 for the three
months ended March 31, 1994 and 1993, respectively, of which $460,000 and
$541,000 were capitalized, respectively, on funds invested in development
projects. The decrease in corporate interest costs is primarily
attributable to the redemption of a $100,000,000 issue of convertible
subordinated debentures in May 1993. This decrease is partially offset
by issuance of the 8.5% unsecured notes; however, a portion of the
proceeds of the notes and proceeds from refinancings of certain retail
properties completed prior to 1993 were used to refinance certain land
and operating property debt and to finance improvements to a number of
operating properties during 1993. The interest costs on loan proceeds
used for other segments are included in the operating results of those
segments.
Gain (loss) on dispositions of assets and other provisions, net
The gain (loss) on dispositions of assets and other provisions, net, in
1994 relates primarily to provisions for losses on two investments in
operating properties ($7,728,000). These provisions were recognized
based on management's determination that the Company would not continue
to support the projects under the existing arrangements with lenders
and/or partners and that it was unlikely that the Company would recover
all of its investments in these projects based on forecasts of future
cash flows. These losses were partially offset by a gain related to the
disposition of an interest in a property the Company continues to manage
($2,935,000).
The loss in 1993 relates primarily to the disposition of an interest in a
property the Company continues to manage.
Financial Condition and Liquidity:
Shareholders' equity decreased $11,857,000 from $113,151,000 at December
31, 1993 to $101,294,000 at March 31, 1994. The decrease was principally
due to the payment of regular quarterly dividends on the Company's common
and Preferred stocks and, to a lesser extent, the net loss for the
period.
11
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued:
The Company had cash and cash equivalents and investments in marketable
securities totaling $107,212,000 and $107,959,000 at March 31, 1994 and
December 31, 1993, respectively, including $16,888,000 and $4,422,000,
respectively, restricted for use in the development of certain
properties.
The Company has lines of credit available for up to $125,000,000 which may
be used to provide corporate liquidity, fund property acquisition costs
and finance other corporate needs, subject to lenders' approvals. They
may also be utilized to pay some portion of existing debt, including
maturities in 1994. As of March 31, 1994, debt due in one year was
$75,655,000. The Company is confident that it will be able to make these
payments or arrange to refinance or extend these maturities prior to
their scheduled repayment dates without necessitating property sales.
Net cash provided by operating activities was $22,189,000 and $23,288,000
for the three months ended March 31, 1994 and 1993, respectively. The
decrease in 1994 is due primarily to the timing of receipt of revenues
(including land sales proceeds) and the payment of operating and interest
expenses and land development costs. The factors discussed previously
under the operating results of the four major business segments also
affected the level of net cash provided by operating activities.
Net cash used in investing activities was $20,670,000 and $49,715,000 for
the three months ended March 31, 1994 and 1993, respectively. The
decrease of $29,045,000 in 1994 is primarily attributable to a reduction
in expenditures for properties in development and property acquisitions,
partially offset by an increase in the net purchases of marketable
securities (primarily short-term U. S. Treasury securities).
Net cash used in financing activities was $6,547,000 for the three months
ended March 31, 1994 while net cash provided by financing activities was
$196,657,000 for the three months ended March 31, 1993. Cash flows from
financing activities for 1993 included the proceeds from public offerings
of unsecured debt and Preferred stock, portions of which were used to
repay property and other debt during the period. There were no similar
transactions in 1994.
Scheduled principal payments on property debt were $9,526,000 for the three
months ended March 31, 1994, including $8,671,000 relating to operating
properties debt.
12
Part II. Other Information
Item 1. Legal Proceedings
On November 6, 1990, Robert P. Guastella Equities, Inc. ("Plaintiff"), a
former tenant at the Riverwalk Shopping Center in New Orleans, Louisiana
("Riverwalk"), which is owned and operated by New Orleans Riverwalk
Associates, an affiliate of the Company ("NORA"), filed suit in the Civil
District Court of Orleans Parish, Louisiana against NORA, the Company,
two Company affiliates - Rouse-New Orleans, Inc. and New Orleans
Riverwalk Limited Partnership - and Connecticut General Life Insurance
Company, which is a general partner of NORA (collectively, "Defendants").
Plaintiff alleges that Defendants breached Plaintiff's lease agreement
with NORA for the operation of a restaurant at Riverwalk by (i) failing
to prevent the leased premises from flooding, (ii) refusing to permit
entertainment on the leased premises, (iii) interfering with the
operation of air conditioning equipment on the leased premises and (iv)
failing to provide adequate security. Plaintiff claims that as a result
of these breaches it suffered losses and could not pay the rentals due
under the lease agreement, as a result of which the lease and its tenancy
were terminated by NORA. Plaintiff seeks damages of approximately
$600,000 for these alleged breaches. In addition, on September 3, 1992,
Plaintiff claimed $33,000,000 for alleged lost future profits which it
claimed it would have earned had its lease not been terminated. All
Defendants filed answers denying the claims of Plaintiff and asserting
other defenses. NORA also asserted a counterclaim against Plaintiff and
its guarantors, Robert Guastella and Charles Kovacs, for past due rentals
and other charges in the approximate amount of $300,000 plus interest and
attorneys' fees as provided for in the lease agreement. The case was
tried before a jury and, on October 28, 1993, the jury returned a verdict
against Defendants upon which judgment was entered by the trial court on
January 7, 1994, in the total net amount of approximately $9,128,000
(which included a net award for lost future profits of approximately
$8,640,000) plus interest and attorneys' fees in an amount to be
determined. On May 6, 1994, the trial court denied all post-trial
motions of both Plaintiff and Defendants, including Defendants' Motions
for Judgment Notwithstanding the Verdict, Remittitur and/or New Trial.
The trial court also entered an amended judgment in which it awarded
Plaintiff $450,000 in attorneys' fees and awarded Defendants $25,000 in
attorneys' fees. Defendants believe that the verdict and judgment as
entered to date are contrary to the facts and applicable law. Defendants
intend to vigorously pursue their rights of appeal.
13
Part II. Other Information
The following items have been omitted as inapplicable or not required under
the applicable instructions:
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Reference is made to the Exhibit Index.
(b) Reports on Form 8-K
None.
14
Signatures
Pursuant to the requirements 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
Principal Financial Officer:
Date May 12, 1994 By /s/Jeffrey H. Donahue
Jeffrey H. Donahue
Senior Vice President and Chief
Financial Officer
Principal Accounting Officer:
Date May 12, 1994 By /s/George L. Yungmann
George L. Yungmann
Senior Vice President and Controller
15
Exhibit Index
Exhibit Number Description
11 Statement re Computation of per
share earnings (loss)
16
Exhibit 11
THE ROUSE COMPANY AND SUBSIDIARIES
Computation of Fully Diluted Earnings (Loss) Per Share
(Unaudited, in thousands except per share amounts)
Three months
ended March 31,
1994 1993
Loss before extraordinary losses $(2,250) $(1,543)
Add after-tax interest expense applicable
to convertible subordinated debentures 1,215 2,203
Earnings (loss) before extraordinary losses,
as adjusted (1,035) 660
Extraordinary losses (474) (958)
Net loss, as adjusted $(1,509) $ (298)
Shares:
Weighted average number of common shares
outstanding 47,562 47,320
Assuming conversion of convertible
Preferred stock 9,470 4,525
Assuming conversion of convertible
subordinated debentures 4,542 8,351
Assuming exercise of options and warrants
reduced by the number of shares which
could have been purchased with the
proceeds from the exercise of such options 131 62
Weighted average number of shares outstanding,
as adjusted 61,705 60,258
Loss per common share assuming full dilution:
Earnings (loss) before extraordinary losses,
as adjusted $ (.02) $ .01
Extraordinary losses (.01) (.02)
Net loss, as adjusted $ (.03) $ (.01)
This calculation is submitted in accordance with Regulation S-K item 601
(b) (11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an anti-dilutive result.
17
