<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended December 31, 1997 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from ___________ to ___________
Commission File Number 0-1743
------
A. Full title of the plan and address of the plan:
The Rouse Company Savings Plan
c/o Personnel Division
The Rouse Company Building
10275 Little Patuxent Parkway
Columbia, Maryland 21044
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive offices:
The Rouse Company
The Rouse Company Building
10275 Little Patuxent Parkway
Columbia, Maryland 21044
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
December 31, 1997 and 1996
Index
-----
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits -
December 31, 1997 and 1996 2
Statements of Changes in Net Assets Available for Plan
Benefits - Years ended December 31, 1997 and 1996 3
Notes to Financial Statements - December 31, 1997 and 1996 5
Item 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1997 10
Item 27d - Schedule of Reportable Transactions - Year ended
December 31, 1997 11
* * * * * * *
The other schedules required by Item 27 of Department of Labor Form 5500 are
inapplicable and are therefore omitted.
<PAGE>
Independent Auditors' Report
----------------------------
The Trustee
The Rouse Company Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of The Rouse Company Savings Plan as of December 31, 1997 and 1996 and
the related statements of changes in net assets available for plan benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of The Rouse
Company Savings Plan as of December 31, 1997 and 1996, and the changes in net
assets available for plan benefits for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and the changes in net assets available for plan benefits of each fund.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
June 12, 1998
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
<TABLE>
<CAPTION>
The Rouse Company T. Rowe Price
--------------------------- -------------------------------------------------------------------------
Quarterly
Income Ariel Blended Equity International
Common Preferred Growth Balanced Stable Index Stock
Stock Securities Fund Fund Value Fund Fund Fund
------------ ------------ ------------ ------------ ------------ ------------ -------------
1997
<S> <C> <C> <C> <C> <C> <C> <C>
Investments $ 26,829,506 626,521 411,620 2,405,026 1,583,269 4,035,131 3,871,934
Contributions receivable
from:
The Rouse Company 22,373 396 53 104 -- 323 30
Participants 7,311 72 776 2,431 -- 4,693 4,835
------------ ------------ ------------ ------------ ------------ ------------ ------------
29,684 468 829 2,535 -- 5,016 4,865
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net assets available
for plan benefits $ 26,859,190 626,989 412,449 2,407,561 1,583,269 4,040,147 3,876,799
============ ============ ============ ============ ============ ============ ============
1996
Investments $ 28,128,526 229,725 40,047 1,986,558 -- 1,793,360 3,369,007
Contributions receivable
from:
The Rouse Company 128,032 -- -- -- -- -- --
Participants 41,301 3,429 2,402 11,398 -- 39,964 33,083
------------ ------------ ------------ ------------ ------------ ------------ ------------
169,333 3,429 2,402 11,398 -- 39,964 33,083
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net assets available
for plan benefits $ 28,297,859 233,154 42,449 1,997,956 -- 1,833,324 3,402,090
============ ============ ============ ============ ============ ============ ============
<CAPTION>
T. Rowe Price
---------------------------------------------------------------------------------------
New
America New Prime Small Spectrum Spectrum
Growth Horizons Reserve Cap Value Income Growth Insurance
Fund Fund Fund Fund Fund Fund Contracts
------------ ------------ ------------ ------------ ------------ ------------ -------------
1997
<S> <C> <C> <C> <C> <C> <C> <C>
Investments 5,518,203 6,961,821 4,004,373 3,363,952 1,994,570 5,648,184 5,789,962
Contributions receivable
from:
The Rouse Company 104 124 154 327 47 36 28
Participants 6,537 9,942 4,184 4,366 1,912 5,745 6,119
------------ ------------ ------------ ------------ ------------ ------------ ------------
6,641 10,066 4,338 4,693 1,959 5,781 6,147
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net assets available
for plan benefits 5,524,844 6,971,887 4,008,711 3,368,645 1,996,529 5,653,965 5,796,109
============ ============ ============ ============ ============ ============ ============
1996
Investments 4,526,321 5,963,594 3,517,125 1,693,924 1,617,123 4,648,534 7,213,858
Contributions receivable
from:
The Rouse Company -- -- -- -- -- -- --
Participants 56,783 80,509 22,053 23,457 14,212 52,765 45,862
------------ ------------ ------------ ------------ ------------ ------------ ------------
56,783 80,509 22,053 23,457 14,212 52,765 45,862
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net assets available
for plan benefits 4,583,104 6,044,103 3,539,178 1,717,381 1,631,335 4,701,299 7,259,720
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Participant
Loans Total
------------ ------------
1997
<S> <C> <C>
Investments 3,195,490 76,239,562
Contributions receivable
from:
The Rouse Company -- 24,099
Participants -- 58,923
------------ ------------
-- 83,022
------------ ------------
Net assets available
for plan benefits 3,195,490 76,322,584
============ ============
1996
Investments 2,656,661 67,384,363
Contributions receivable
from:
The Rouse Company -- 128,032
Participants -- 427,218
------------ ------------
-- 555,250
------------ ------------
Net assets available
for plan benefits 2,656,661 67,939,613
============ ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
The Rouse Company T. Rowe Price
--------------------------- -------------------------------------------------------------------------
Quarterly
Income Ariel Blended Equity International
Common Preferred Growth Balanced Stable Index Stock
1997 Stock Securities Fund Fund Value Fund Fund Fund
- ---- ------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions from
The Rouse Company 1,604,614 28,105 1,841 2,691 -- 6,569 2,052
Contributions from
participants 638,497 29,798 56,388 186,670 -- 518,852 482,174
Investment income:
Dividends and interest 816,108 49,608 34,989 93,644 -- 78,694 204,968
Net appreciation
(depreciation) in fair
values of investments 650,840 13,940 37,292 296,995 -- 731,010 (124,650)
Interest on participant
loans -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investment
income 1,466,948 63,548 72,281 390,639 -- 809,704 80,318
------------ ------------ ------------ ------------ ------------ ------------ ------------
Distributions to participants (2,058,517) (4,084) (20,464) (264,740) -- (263,875) (208,724)
Participant loans repaid
as part of termination
distributions -- -- -- -- -- -- --
Interprogram transfers, net (3,090,211) 276,468 259,954 94,345 1,583,269 1,135,573 118,889
------------ ------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease)
in net assets
available for
plan benefits (1,438,669) 393,835 370,000 409,605 1,583,269 2,206,823 474,709
Net assets available for
plan benefits:
Beginning of year 28,297,859 233,154 42,449 1,997,956 -- 1,833,324 3,402,090
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of year $ 26,859,190 626,989 412,449 2,407,561 1,583,269 4,040,147 3,876,799
============ ============ ============ ============ ============ ============ ============
<CAPTION>
T. Rowe Price
---------------------------------------------------------------------------------------
New
America New Prime Small Spectrum Spectrum
Growth Horizons Reserve Cap Value Income Growth Insurance
Fund Fund Fund Fund Fund Fund Contracts
------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions from
The Rouse Company 1,898 3,247 1,450 4,995 894 1,345 931
Contributions from
participants 684,223 896,601 373,729 419,922 217,554 568,970 569,406
Investment income:
Dividends and interest 260,477 168,457 196,963 212,445 134,990 570,468 429,016
Net appreciation
(depreciation) in fair
values of investments 662,976 454,870 -- 406,016 69,251 233,453 --
Interest on participant
loans -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investment
income 923,453 623,327 196,963 618,461 204,241 803,921 429,016
------------ ------------ ------------ ------------ ------------ ------------ ------------
Distributions to participants (277,128) (602,441) (428,173) (64,141) (153,840) (261,984) (923,557)
Participant loans repaid
as part of termination
distributions -- -- -- -- -- -- --
Interprogram transfers, net (390,706) 7,050 325,564 672,027 96,345 (159,586) (1,539,407)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease)
in net assets
available for
plan benefits 941,740 927,784 469,533 1,651,264 365,194 952,666 (1,463,611)
Net assets available for
plan benefits:
Beginning of year 4,583,104 6,044,103 3,539,178 1,717,381 1,631,335 4,701,299 7,259,720
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of year 5,524,844 6,971,887 4,008,711 3,368,645 1,996,529 5,653,965 5,796,109
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Participant
Loans Total
------------ ------------
<S> <C> <C>
Contributions from
The Rouse Company -- 1,660,632
Contributions from
participants -- 5,642,784
Investment income:
Dividends and interest -- 3,250,827
Net appreciation
(depreciation) in fair
values of investments -- 3,431,993
Interest on participant
loans 224,589 224,589
------------ ------------
Total investment
income 224,589 6,907,409
------------ ------------
Distributions to participants -- (5,531,668)
Participant loans repaid
as part of termination
distributions (296,186) (296,186)
Interprogram transfers, net 610,426 --
------------ ------------
Increase (decrease)
in net assets
available for
plan benefits 538,829 8,382,971
Net assets available for
plan benefits:
Beginning of year 2,656,661 67,939,613
------------ ------------
End of year 3,195,490 76,322,584
============ ============
(continued)
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
The Rouse Company T. Rowe Price
------------------------------------------ ----------------------------------------------------------
Quarterly
Convertible Income Ariel Equity International
Common Preferred Preferred Growth Balanced Index Stock
1996 Stock Stock Securities Fund Fund Fund Fund
- ---- ------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions from
The Rouse Company $ 1,401,791 221,447 2,392 -- -- -- --
Contributions from
participants 544,114 117,603 5,393 24,691 150,584 303,148 415,488
Conversions in from
acquisiton of The Hughes
Corporation (note 2) -- -- -- -- 1,271,004 -- 695,567
Investment income:
Dividends and interest 744,888 91,098 5,304 2,113 47,738 56,967 89,575
Net appreciation
(depreciation) in fair
values of investments 10,130,241 (64,477) (2,064) 4,131 82,104 237,920 281,639
Interest on participant
loans -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investment
income 10,875,129 26,621 3,240 6,244 129,842 294,887 371,214
------------ ------------ ------------ ------------ ------------ ------------ ------------
Distributions to participants (2,248,936) (142,137) -- (1,556) (53,972) (232,808) (271,688)
Participant loans repaid
as part of termination
distributions -- -- -- -- -- -- --
Interprogram transfers, net 170,996 (1,579,617) 222,129 13,070 (7,877) 275,426 168,095
------------ ------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease)
in net assets
available for
plan benefits 10,743,094 (1,356,083) 233,154 42,449 1,489,581 640,653 1,378,676
Net assets available for
plan benefits:
Beginning of year 17,554,765 1,356,083 -- -- 508,375 1,192,671 2,023,414
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of year $ 28,297,859 -- 233,154 42,449 1,997,956 1,833,324 3,402,090
============ ============ ============ ============ ============ ============ ============
<CAPTION>
T. Rowe Price
---------------------------------------------------------------------------------------
New
America New Prime Small Spectrum Spectrum
Growth Horizons Reserve Cap Value Income Growth Insurance
Fund Fund Fund Fund Fund Fund Contracts
------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions from
The Rouse Company -- -- -- -- -- -- --
Contributions from
participants 485,725 837,975 208,044 255,184 196,936 468,703 653,572
Conversions in from
acquisiton of The Hughes
Corporation (note 2) 2,652,254 -- 1,830,162 -- 142,197 1,429,921 --
Investment income:
Dividends and interest 377,059 550,334 99,332 84,100 114,588 323,063 440,290
Net appreciation
(depreciation) in fair
values of investments (56,716) 297,169 -- 208,845 (4,928) 242,991 --
Interest on participant
loans -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investment
income 320,343 847,503 99,332 292,945 109,660 566,054 440,290
------------ ------------ ------------ ------------ ------------ ------------ ------------
Distributions to participants (157,683) (797,842) (540,291) (172,155) (119,241) (256,505) (1,772,318)
Participant loans repaid
as part of termination
distributions -- -- -- -- -- -- --
Interprogram transfers, net 80,368 241,349 86,619 359,440 (150,773) 253,738 (538,602)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease)
in net assets
available for
plan benefits 3,381,007 1,128,985 1,683,866 735,414 178,779 2,461,911 (1,217,058)
Net assets available for
plan benefits:
Beginning of year 1,202,097 4,915,118 1,855,312 981,967 1,452,556 2,239,388 8,476,778
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of year 4,583,104 6,044,103 3,539,178 1,717,381 1,631,335 4,701,299 7,259,720
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Participant
Loans Total
------------ ------------
<S> <C> <C>
Contributions from
The Rouse Company -- 1,625,630
Contributions from
participants -- 4,667,160
Conversions in from
acquisiton of The Hughes
Corporation (note 2) 79,394 8,100,499
Investment income:
Dividends and interest -- 3,026,449
Net appreciation
(depreciation) in fair
values of investments -- 11,356,855
Interest on participant
loans 168,017 168,017
------------ ------------
Total investment
income 168,017 14,551,321
------------ ------------
Distributions to participants -- (6,767,132)
Participant loans repaid
as part of termination
distributions (247,904) (247,904)
Interprogram transfers, net 405,639 --
------------ ------------
Increase (decrease)
in net assets
available for
plan benefits 405,146 21,929,574
Net assets available for
plan benefits:
Beginning of year 2,251,515 46,010,039
------------ ------------
End of year 2,656,661 67,939,613
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of presentation
---------------------
The financial statements of The Rouse Company Savings Plan (the Plan)
have been prepared on the accrual basis and present the net assets
available for benefits and the changes in those net assets.
(b) Investments
-----------
Investments in the common stock and quarterly income preferred
securities of The Rouse Company and the T. Rowe Price and other mutual
funds are carried at fair values determined by quoted market prices.
Investments in the insurance contracts are carried at contract value
(representing contributions made plus interest credited less
distributions) as the insurance contracts held by the Plan are "fully
benefit-responsive," as defined in Statement of Position 94-4,
Reporting of Investment Contracts Held by Health and Welfare Benefit
Plans and Defined-Contribution Pension Plans. Loans to participants
are carried at cost, which approximates fair value. Security
transactions are recognized on a trade date basis. Unrealized
appreciation and depreciation in the fair values of investments are
recognized in the periods in which the changes occur.
(c) Administrative expenses
-----------------------
The Rouse Company pays all administrative expenses incurred on behalf
of the Plan. Terminated participants who have left their account
balances in the Plan are required to reimburse the Company for
administrative expenses relating to their accounts. Participants
requesting loans from the Plan are required to pay an administrative
fee to the Company for the processing of such loans.
(d) Use of estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to make
estimates and judgments that affect the reported amounts of net assets
and disclosures of contingencies at the date of the financial
statements and changes in net assets recognized during the reporting
period. Actual results could differ from those estimates.
The following brief description of the Plan summarizes the principal
provisions of the Plan and is provided for general information purposes
only. Participants should refer to the Plan agreement for more complete
information.
5
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
------------------------------
Notes to Financial Statements
(2) General Description of the Plan
-------------------------------
The Plan was established effective June 1, 1983 to provide employees of The
Rouse Company and certain of its subsidiaries and affiliates (the Company)
an incentive to save for retirement and for financial emergencies.
Generally, employees who are not covered under a collective bargaining
agreement, who are at least 21 years of age and who have completed 1,000
hours of service in one year are eligible to participate in the Plan.
On June 12, 1996, the Company acquired all of the outstanding equity
interests in The Hughes Corporation and its affiliated partnership, Howard
Hughes Properties, Limited Partnership (together, Hughes). Under the merger
agreement, participants in the Hughes 401(k) Savings Plan (Hughes
employees) became eligible to participate in the Plan as of the closing
date, subject to the terms of the Plan. Accordingly, account balances of
Hughes employees who elected to participate in the Plan were transferred
from the Hughes 401(k) Savings Plan to the Plan in 1996 and were allocated
among the various investment programs based on the similarity of investment
objectives. The merger agreement also provides that the Company will
consider participants' service with Hughes prior to the closing date for
eligibility and vesting purposes.
Basic contributions to the Plan are made pursuant to salary reduction
agreements between the Company and participants. Participants may elect to
reduce their compensation, as defined in the Plan, by amounts ranging from
1% to 19% of such compensation, subject to an annual limitation. Employees
may also make supplemental contributions to the Plan in amounts up to 9% of
compensation, as defined. The supplemental contributions are not pursuant
to salary reduction agreements. Aggregate basic and supplemental
contributions may not exceed 19% of compensation, as defined. Participants
are able to defer payment of income taxes on their basic contributions to
the Plan, related contributions by the Company and all income realized on
accounts maintained under the Plan.
Participants' contributions to the Plan are allocated among the various
investment programs based on their instructions, subject to certain
limitations defined in the Plan. Participants may change their allocation
instructions and transfer accumulated savings between funds on a monthly
basis, subject to certain limitations defined in the Plan.
Matching contributions are made by the Company to each participant's
account in an amount equal to $1.00 for every $2.00 of a participant's
basic contribution up to 6% of such participant's base salary. Until
December 31, 1996, the Company's matching contributions were invested in
the Company's common stock, convertible preferred stock or quarterly income
preferred securities based on participants' instructions. Effective January
1, 1997 participants may direct the Company's matching contributions to any
of the investment vehicles offered under the Plan. In addition, the Company
may make additional contributions to the Plan under certain circumstances.
Such additional contributions are
6
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
------------------------------
Notes to Financial Statements
(2) General Description of the Plan, Continued
------------------------------------------
distributed to accounts of participants pursuant to guidelines set forth in
the Plan. Participants who joined the Plan prior to January 1, 1989 obtain
an immediate and fully vested interest in all contributions made by the
Company. Participants who joined the Plan on or after January 1, 1989 are
required to complete two years of service, as defined in the Plan, to
become fully vested in the Company's contributions. Forfeitures of
nonvested Company contributions may be used by the Company to satisfy
future matching contribution requirements.
Participants or their beneficiaries are eligible for distributions upon
retirement, disability, termination of employment or death of the
participant. In addition, participants may make withdrawals from their
accounts upon attainment of age 59-1/2. Participants may also make
withdrawals of their basic contributions by reason of financial hardship,
under specific guidelines set forth in the Plan. Subject to certain
limitations, supplemental contributions may be withdrawn by participants
for any reason.
Generally, participants may borrow from the Plan up to the lesser of
$50,000 or 50% of their vested account balances. Interest on such
borrowings and repayment schedules are determined pursuant to guidelines in
the Plan. Generally, borrowings bear interest at the prime rate of a
designated commercial bank at the time of the loan application and must be
repaid to the Plan over a period not to exceed five years.
While the Company has not expressed any intent to terminate the Plan, it is
free to do so at any time. In the event of termination of the Plan, the
Plan's assets would be distributed to the participants in accordance with
the Plan agreement.
7
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
------------------------------
Notes to Financial Statements
(3) Investments
-----------
Information relating to investments, including individual investments which
represent 5% or more of net assets available for plan benefits, is
summarized as follows at December 31:
<TABLE>
<CAPTION>
1997 1996
------------------------- -------------------------
Contract Contract
Number of or fair Number of or fair
shares value shares value
--------- -------------- --------- --------------
<S> <C> <C> <C> <C>
The Rouse Company:
Common stock 819,251 $ 26,829,506 882,598 $ 28,128,526
Quarterly income
preferred securities 23,924 626,521 9,053 229,725
T. Rowe Price and other
Mutual Funds:
Equity Index Fund 152,962 4,035,131 88,169 1,793,360
International Stock Fund 288,520 3,871,934 244,131 3,369,007
New America Growth Fund 124,874 5,518,203 117,965 4,526,321
New Horizons Fund 298,791 6,961,821 273,936 5,963,594
Prime Reserve Fund 4,004,373 4,004,373 3,517,125 3,517,125
Spectrum Growth Fund 354,563 5,648,184 307,239 4,648,534
--------- ---------
Other 9,758,437 5,337,652
-------------- --------------
39,798,083 29,155,593
-------------- --------------
Insurance contracts 5,789,962 7,213,858
Participant loans 3,195,490 2,656,661
-------------- --------------
$ 76,239,562 $ 67,384,363
============== ==============
</TABLE>
The investments in insurance contracts consist of guaranteed income
contracts offered by various insurance companies. The Plan deals only with
highly rated insurance companies and does not expect that any of them will
fail to meet their obligations under the contracts. The contracts in effect
at December 31, 1997, provide for interest at rates ranging from 4.93% to
7.40% and mature at various dates to 2001. The average yield on the
contracts was 6.14% in 1997 and 6.22% in 1996. The aggregate contract value
of the contracts in effect at December 31, 1997 approximates their
aggregate estimated fair value based on current market interest rates for
contracts with similar maturities and credit quality.
8
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
------------------------------
Notes to Financial Statements
(4) Federal Income Tax Status
-------------------------
The Internal Revenue Service has determined and informed the Company by a
letter dated August 11, 1995 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC)
and, accordingly, are tax-exempt. The Plan's management believes that the
Plan continues to qualify and to operate in accordance with applicable
provisions of the IRC.
(5) Reconciliation to Form 5500
---------------------------
Amounts due to terminated participants for benefits payable of $125,113 at
December 31, 1997 and $86,374 at December 31, 1996 are reported as
liabilities in the Plan's Annual Report on Department of Labor Form 5500,
but are included in net assets available for plan benefits in the financial
statements.
9
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
Par value or
number of Current
Name of issuer and title of issue shares Cost (note 1) value
- --------------------------------- ------------ ------------- ----------
<S> <C> <C> <C>
The Rouse Company:
Common stock 819,251 $17,166,862 26,829,506
Quarterly income preferred securities 23,924 616,464 626,521
Ariel Growth Fund 10,321 373,746 411,620
T. Rowe Price Funds:
Balanced Fund 145,407 2,051,551 2,405,026
Blended Stable Value Fund 1,583,269 1,583,269 1,583,269
Equity Index Fund 152,962 3,006,430 4,035,131
International Stock Fund 288,520 3,714,022 3,871,934
New America Growth Fund 124,874 4,782,469 5,518,203
New Horizons Fund 298,791 5,649,522 6,961,821
Prime Reserve Fund 4,004,373 4,004,373 4,004,373
Small Cap Value Fund 143,759 2,724,137 3,363,952
Spectrum Income Fund 171,061 1,897,319 1,994,570
Spectrum Growth Fund 354,563 5,044,321 5,648,184
============
Insurance Contracts:
Principal Mutual Life Insurance Company 842,316 842,316
Hartford Life Insurance Company 1,097,601 1,097,601
John Hancock Mutual Life Insurance Company 1,119,619 1,119,619
Life of Georgia Life Insurance Company 978,703 978,703
American International Group Life
Insurance Company 1,751,723 1,751,723
Participant loans 3,195,490 3,195,490
----------- ----------
Total investments $61,599,937 76,239,562
=========== ==========
</TABLE>
Notes:
(1) Cost of the securities of The Rouse Company and the T. Rowe Price and
other mutual funds includes reinvested dividends or interest credited,
as applicable. Cost of the insurance contracts is equal to contract
value, representing contributions made plus interest credited less
distributions.
(2) T. Rowe Price Retirement Plan Services, Inc. and The Rouse Company
represent parties in interest.
10
<PAGE>
THE ROUSE COMPANY SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions (Note 1)
Year ended December 31, 1997
<TABLE>
<CAPTION>
Current
value of
Redemption asset on
Purchase or selling Cost of transaction Net gain
Description of assets price price asset dates (loss)
- --------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
The Rouse Company -
common stock $ 3,852,221 --- --- 3,852,221 ---
The Rouse Company -
common stock --- 5,802,081 4,016,031 5,802,081 1,786,050
</TABLE>
Notes:
(1) Reportable transactions are presented in accordance with Department of
Labor regulations relating to requirements for employee benefit plan
annual reports filed under the Employee Retirement Income Security Act
of 1974.
(2) The purchases and sales represent series of transactions; however, it is
not practical to determine the number of individual transactions
involved.
(3) The Rouse Company is a party in interest.
11
<PAGE>
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
amendment to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE ROUSE COMPANY SAVINGS PLAN
Date: June 26, 1998 By /s/ WILLIAM D. BODEN
--------------------
William D. Boden
Administrator
and
Date: June 26, 1998 By /s/ GEORGE L. YUNGMANN
----------------------
George L. Yungmann
Trustee
12
<PAGE>
Consent of Independent Certified Public Accountants
---------------------------------------------------
The Board of Directors
The Rouse Company:
We consent to the incorporation by reference in the Registration Statement (No.
2-83612) on Form S-8 of The Rouse Company of our report dated June 12, 1998,
relating to the statements of net assets available for plan benefits of The
Rouse Company Savings Plan as of December 31, 1997 and 1996, the related
statements of changes in net assets available for plan benefits for the years
then ended and the related schedules for the year ended December 31, 1997, which
report appears elsewhere in this Form 11-K/A.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Baltimore, Maryland
June 26, 1998
