-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Is02lfQkxTaSwyRK+NnpQA1jPugNAyVTjimrgt/JFJ1L2isLlKHKAvLlp6sbptlk A/jICIS6JkqeQdVK49N2oA== 0000085388-94-000005.txt : 19940513 0000085388-94-000005.hdr.sgml : 19940513 ACCESSION NUMBER: 0000085388-94-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROUSE COMPANY CENTRAL INDEX KEY: 0000085388 STANDARD INDUSTRIAL CLASSIFICATION: 6512 IRS NUMBER: 520735512 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01743 FILM NUMBER: 94527507 BUSINESS ADDRESS: STREET 1: 10275 LITTLE PATUXENT PKWY CITY: COLUMBIA STATE: MD ZIP: 21044 BUSINESS PHONE: 4109926000 MAIL ADDRESS: STREET 1: 10275 LITTLE PATUXENT PARKWAY CITY: COLUMBIA STATE: MD ZIP: 21044 FORMER COMPANY: FORMER CONFORMED NAME: COMMUNITY RESEARCH & DEVELOPMENT INC DATE OF NAME CHANGE: 19660913 10-Q 1 MARCH 31, 1994 FORM 10Q 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 -----END PRIVACY-ENHANCED MESSAGE-----