<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549
                                   FORM 10-K

(X)             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
            OF THE SECURITITES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                  For the Fiscal Year Ended December 31,1998

                                       or

(_)             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
               OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                           Commission File NO 0-1743

                               THE ROUSE COMPANY

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                     MARYLAND                        52-0735512
          --------------------------------       -------------------
          (STATE OR OTHER JURISDICTION OF)        (I.R.S. EMPLOYER
           INCORPORATION OR ORGANIZATION          IDENTIFICATION NO.)

          10275 LITTLE PATUXENT PARKWAY
             COLUMBIA, MARYLAND                      21044-3456
     ----------------------------------------        -----------       
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)         (ZIP CODE)

   Registrant's telephone number, including area code:  (410) 992-6000
                                                        --------------

   Securities registered pursuant to Section 12(b) of the Act:

                                                         NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                       ON WHICH REGISTERED  
-------------------                                      ---------------------
Common Stock (par value 1 cent per share)                New York Stock Exchange
----------------------------------------                                
9 1/4% Cumulative Quarterly Income Preferred Securities  New York Stock Exchange
-------------------------------------------------------                         
Series B Convertible Preferred Stock
-------------------------------------
  (par value 1 cent per share)                           New York Stock Exchange
------------------------------                                            

    Securities registered pursuant to Section 12(g) of the Act:

                                        NONE
                                        ----

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months for (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X    No
    -----     -----     

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. 
           -------

    As of March 17, 1999, there were outstanding 72,256,106 shares of the
registrant's common stock, par value 1 cent, which is the only class of common
or voting stock of the registrant. As of that date, the aggregate market value
of the shares of common stock held by nonaffiliates of the registrant (based on
the closing price as reported in The Wall Street Journal, Eastern Edition) was
                                 ----------------------------------------     
approximately $1,634,126,080

                        Documents Incorporated by Reference

The specified portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 1998 are incorporated by reference into Parts I, II, and IV.

Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before
April 12, 1999 is incorporated by reference into Part III.
<PAGE>
 
                                    Part I
                                    ------


Item 1.   Business.


Item 1 (a).  General Development of Business.


  The Rouse Company (the "Company") was incorporated as a business corporation
     under the laws of the State of Maryland in 1956.  Its principal offices are
     located at The Rouse Company Building, Columbia, Maryland 21044.  Its
     telephone number is (410) 992-6000.  The Company, through its subsidiaries,
     affiliates and "Non-REIT Subsidiaries" (as defined below), is engaged or
     has a material financial interest in (i) the ownership, management,
     acquisition and development of income-producing and other real estate in
     the United States, including retail centers, office buildings, mixed-use
     projects and community retail centers, and the management of one retail
     center in Canada, and (ii) the development and sale of land in Maryland and
     the Las Vegas, Nevada metropolitan area for residential, commercial and
     industrial uses. "Non-REIT Subsidiaries" are companies as to which
     substantially all (at least 98%) of the financial interest is held by the
     Company, but in which The Rouse Company Incentive Compensation Statutory
     Trust, an entity that is neither owned nor controlled by the Company, owns
     91% of the voting stock.


 In December 1997, the Company determined that it would elect to be taxed as a
     real estate investment trust (REIT) effective January 1, 1998. The Company
     believes that it met the qualifications for REIT status during 1998, and it
     intends to continue to meet the qualifications in the future and to
     distribute at least 100% of its REIT taxable income (determined after
     taking into account any net operating loss deduction) to stockholders.
     Accordingly, management does not believe that the Company will be liable
     for payment of income taxes (except, possibly, in certain states).

Developments in 1998 and Early 1999

During the third and fourth quarters of 1998, subsidiaries of the Company
     purchased ownership interests in seven retail centers from TrizecHahn
     Centers Inc. for approximately $1.2 billion.  The centers are Park Meadows
     Mall in suburban Denver, Colorado, Towson Town Center in suburban
     Baltimore, Maryland, The Fashion Show on "The Strip" in Las Vegas, Nevada
     (in which a Company subsidiary already held a 75% ownership interest),
     Fashion Place in Salt Lake City, Utah,  Bridgewater Commons Mall in
     Bridgewater, New Jersey, Valley Fair in San Jose, California and Westdale
     Mall in Cedar Rapids, Iowa. Upon completion of the acquisitions,

                                      I-1
<PAGE>
 
     subsidiaries of the Company held 100% ownership interests in these centers,
     except that the subsidiaries held a 50% interest in Valley Fair and a 20.5%
     interest in Westdale Mall. At the time of the acquisitions, the Company
     decided to hold for sale its interests in Valley Fair and Westdale Mall.

On November 30, 1998, a wholly owned subsidiary of the Company acquired for
     approximately $373 million, from Teachers Properties, Inc. ("Teachers") its
     interest in Rouse-Teachers Properties, Inc. ("RTPI"), an entity in which
     Teachers held a 95% ownership interest and the Company held a 5% ownership
     interest.  The acquired assets of RTPI consisted of 22 office buildings in
     metropolitan Baltimore, Maryland containing approximately 1,034,000 square
     feet of leasable space, 26 industrial buildings in metropolitan Baltimore
     containing approximately 1,675,000 square feet of leasable space, 8 office
     buildings in Columbia, Maryland containing approximately 428,000 square
     feet of leasable space, 10 office buildings in metropolitan Washington,
     D.C. containing 1,227,000 square feet of leasable space, an office building
     in suburban Harrisburg, Pennsylvania containing approximately 231,000
     square feet of leasable space and approximately 107 saleable acres of land
     in the Baltimore and Washington metropolitan areas.  The Company sold three
     of the acquired buildings in metropolitan Washington, D.C. on December 1,
     1998 for an aggregate price of approximately $91 million.

On February 1, 1999, a wholly owned subsidiary of the Company completed the
     establishment of a joint venture (the "Four State Venture"), relating to
     four retail centers, with a venture (the "Morgan/NYSTRS Venture")
     consisting of the J.P. Morgan Strategic Property Fund and the New York
     State Teachers' Retirement System.  The centers, all of which were acquired
     in 1998 from TrizecHahn Centers Inc., are Park Meadows Mall, Towson Town
     Center, Fashion Place and Bridgewater Commons Mall.  The total cost of the
     retail center assets and related liabilities contributed to the Four State
     Venture was approximately $957 million and $542 million, respectively.  The
     Morgan/NYSTRS Venture made a $271 million cash contribution to the Four
     State Venture, which is approximately 65% of the net cost.  The Company
     subsidiary effectively has a 35% ownership interest in the Four State
     Venture, while the Morgan/NYSTRS Venture has a 65% ownership interest.

                                      I-2
<PAGE>
 
Additional information regarding the above developments is contained in the
     Company's Current Report on Form 8-K/A, filed on November 16, 1998, the
     Company's Current Report on Form 8-K, filed on December 14, 1998, the
     Company's Current Report on Form 8-K, filed on February 10, 1999, and the
     Company's Current Report on Form 8-K/A, filed on February 16, 1999.

Item 1(b).  Financial Information About Industry Segments.

  Information required by Item 1(b) is incorporated herein by reference to note
     9 of the notes to consolidated financial statements included in the 1998
     Annual Report to Shareholders.

  As noted in Item 1(a), the Company is a real estate company engaged, through
     its subsidiaries, affiliates and having a material financial interest,
     through its Non-REIT Subsidiaries, in most aspects of the real estate
     industry, including the management, acquisition and development of income-
     producing and other properties, both retail and commercial, community
     development and management, and land development.  These business segments
     are further described below.

Item 1(c).  Narrative Description of Business.

  Retail Centers:
  -------------- 

  As set forth in Item 2, at December 31, 1998, the 49 regional retail centers
     owned, in whole or in part, or operated by subsidiaries or affiliates of
     the Company or by Non-REIT Subsidiaries, aggregated 44,006,000 square feet,
     including 26,147,000 square feet owned by or leased to department stores.
     The activities involved in operating and managing retail centers include:
     negotiating lease terms with present and prospective tenants, identifying
     and attracting desirable new tenants, conducting local market and consumer
     research, developing and implementing short- and long-term merchandising
     and leasing programs, assisting tenants in the presentation of their
     merchandise and the layout of their stores and store fronts, and
     maintaining the building and common areas.

  In conjunction with other partners or investors, the Company, through its
     subsidiaries and affiliates and Non-REIT subsidiaries, acquires interests
     in completed retail centers, with the Company (or, beginning December 31,
     1997, its Non-REIT Subsidiaries) having management responsibility and
     earning incentive fees including, in some instances, equity interests in
     the centers.  Affiliates of the Company (or, beginning December 31, 1997,
     Non-REIT Subsidiaries) 

                                      I-3
<PAGE>
 
     also provide management services for centers developed and owned by others
     under management agreements that also provide for incentive fees and, in
     some instances, equity interests in the centers. As of December 31, 1998,
     Non-REIT Subsidiaries of the Company managed 9 such centers, which are
     included in the figures in the preceding paragraph and aggregated 8,778,000
     square feet of leasable space, 5,098,000 square feet of which was
     department store space.

  The Howard Research And Development Corporation ("HRD", a Non-REIT Subsidiary
     of the Company) and its subsidiaries own and/or manage 12 community retail
     centers with 890,000 square feet of leasable space, The Mall in Columbia
     (which is included in the second preceding paragraph) and other properties
     in Columbia, Maryland.  Howard Hughes Properties, Limited Partnership
     ("HHPLP", a majority owned affiliate of the Company) and its subsidiaries
     and affiliates own interests in 2 community retail centers with 238,000
     square feet of leasable space in Summerlin, Nevada.

Office, Mixed-Use and Other Properties:
-------------------------------------- 

  HHPLP and its subsidiaries and affiliates own and/or manage 61 office and
     industrial buildings with 3,914,000 square feet of leasable space, and
     other properties in and around Las Vegas, Nevada and Los Angeles,
     California.  HRD and its subsidiaries own and/or manage 12 office and
     industrial buildings with 1,188,000 square feet of leasable space and other
     properties in Columbia, Maryland.

Other subsidiaries of the Company own and operate 5 mixed-use projects with a
     total of 691,000 square feet of leasable retail space, a 90,000 square foot
     cinema and 1,891,000 square feet of leasable office space.  Other
     subsidiaries of the Company own, in whole or in part, 72 office and
     industrial buildings with a total of 4,909,000 square feet of leasable
     space.

The activities involved in operating and managing office, mixed-use and other
     properties include: negotiating lease terms with present and prospective
     tenants, identifying and attracting desirable new tenants, conducting local
     market and consumer research, developing and implementing short- and long-
     term merchandising and leasing programs, assisting tenants in the
     presentation of their merchandise and the layout of their stores and store
     fronts, and maintaining the building and common areas.

Development:
----------- 

The Company, through its subsidiaries, affiliates and Non-REIT subsidiaries
     renovates and expands existing retail centers and develops suburban and
     downtown retail centers, mixed-

                                      I-4
<PAGE>
 
     use projects and master-planned business parks, primarily for ownership. In
     addition, the Company is capable of serving as the master developer for
     certain mixed-use projects, with the Company generally owning at least the
     retail component of such projects. The activities involved in the
     development, renovation and expansion of retail centers, mixed-use projects
     and master-planned business parks include: initial market and consumer
     research, evaluating and acquiring land sites, obtaining necessary public
     approvals, engaging architectural and engineering firms to design the
     project, estimating development costs, developing and testing pro forma
     operating statements, selecting a general contractor, arranging
     construction and permanent financing, identifying and obtaining department
     stores and other tenants, negotiating lease terms, negotiating partnership
     and joint venture agreements and promoting new, renovated or expanded
     retail centers, mixed-use projects and master-planned business parks.

The Company and certain subsidiaries, affiliates and Non-REIT Subsidiaries are
     in the construction or development stage of announced projects, primarily
     the development of new retail centers, expansions of existing retail
     centers and mixed-use projects, and expansions of existing master-planned
     business parks in Las Vegas, Nevada.

Land Sales Operations:
--------------------- 

HRD, a Non-REIT Subsidiary of the Company, is the developing entity of Columbia,
     Maryland, which is located in the Baltimore-Washington corridor.  HRD owns
     approximately 1,600 salable acres of land in and around Columbia, and,
     through its subsidiaries and affiliates, develops and sells this land to
     builders and other developers for residential, commercial and industrial
     uses.  The Hughes Corporation and Howard Hughes Properties, Inc.
     (collectively "Hughes", Non-REIT Subsidiaries of the Company) and their
     subsidiaries and affiliates are the developers of Summerlin, Nevada, which
     is located immediately north and west of Las Vegas, Nevada.  Hughes owns
     approximately 8,700 salable acres of land in Summerlin, and develops and
     sells this land to builders and other developers for residential and
     commercial uses.  Other affiliates or subsidiaries of the Company may also
     purchase some of this land for their own development purposes.  Non-REIT
     Subsidiaries of the Company, directly or through affiliates, are also
     presently involved in community development and related land sales
     elsewhere in Maryland, and are developing or holding for sale parcels of
     land elsewhere in Nevada and California.

In all aspects of the Company's business pertaining to the ownership,
     management, acquisition or development of income-producing and other real
     estate, the Company and its subsidiaries, affiliates and Non-REIT
     Subsidiaries operate 

                                      I-5
<PAGE>
 
     in highly competitive markets. With respect to the leasing and operation or
     management of developed properties, each project faces market competition
     from existing and future developments in its geographical market area.

The Company's affiliates and Non-REIT Subsidiaries also face competition in and
     around Columbia, Maryland and Las Vegas, Nevada with respect to the
     development and sale of land for residential, commercial and industrial
     uses.

Neither the Company's business, taken as a whole, nor any of its operating
     segments, is seasonal in nature.

Federal, state and local statutes and regulations relating to the protection of
     the environment have previously had no material effect on the Company's
     business.  Future development opportunities of the Company may involve
     additional capital and other expenditures in order to comply with such
     statutes and regulations.  It is impossible at this time to predict with
     any certainty the magnitude of any such expenditures or the long-range
     effect, if any, on the Company's operations.  Compliance with such laws has
     had no material adverse effect on the operating results or competitive
     position of the Company in the past; the Company anticipates that they will
     have no material adverse effect on its future operating results or its
     competitive position in the industry.

None of the Company's operating segments depends upon a single customer or a few
     customers, the loss of which would have a materially adverse effect on the
     segment.  No customer accounts for 10 percent or more of the consolidated
     revenues of the Company.

The Company, its subsidiaries and affiliates and Non-REIT Subsidiaries employed
     4,126 full-time and part-time employees at December 31, 1998.

                                      I-6
<PAGE>
 
Item 2. Properties.

The Company leases its headquarters building (approximately 127,000 square feet)
     in Columbia, Maryland for an initial term of 30 years which expires in 2003
     with options for two 15-year renewal periods.  The lease on the
     headquarters building is accounted for as a capital lease.

Information respecting the Company's operating properties is incorporated herein
     by reference to the "Projects of The Rouse Company" table in pages 50
     through 53 of Exhibit 13 to this Form 10-K.  The ownership of virtually all
     properties is subject to mortgage financing.  The table of projects
     includes properties managed by Non-REIT Subsidiaries of the Company for a
     fee as identified in notes (c) and (d) to the table.  Excluding such
     managed properties, certain of the remaining properties are subject to
     leases which provide an option to purchase (or repurchase) the property
     and/or to renew the leases for one or more renewal periods.  The years of
     expiration indicated below assume all options to extend the terms of leases
     are exercised.  The properties subject to such leases in whole or part
     (including properties owned by Non-REIT Subsidiaries) are as follows:

<TABLE>
<CAPTION>
                                    Nature of                 Year of expiration
         Property                   interest                       of lease
         --------                   --------                       --------
<S>                          <C>                              <C>                      
Arizona Center               Leasehold                        Various dates from        
                                                              2017 to 2050
Augusta Mall                 Leasehold                                2068

Bayside Marketplace          Leasehold by joint venture               2062

Columbia Mall, Inc. -        Leasehold and fee                        2000
  American City Building                                              

Columbia Mall, Inc. -        Leasehold and fee                        2012
  Exhibit Building                                                    

Columbia Mall, Inc. -        Leasehold                                2062
  Oakland Building                                                    

Echelon Mall                 Leasehold                                2008

Faneuil Hall Marketplace     Leasehold                                2074

Fashion Place Mall           Leasehold                                2059

First National Bank Plaza    Leasehold                                2013

Franklin Park                Leasehold and fee by joint               2024
                             venture                                  

The Gallery at Market East   Leasehold                                2082
</TABLE>

                                      I-7
<PAGE>
 
Item 2.  Properties, continued.
 
<TABLE>
<CAPTION>
                                    Nature of                 Year of expiration
         Property                   interest                       of lease
         --------                   --------                       --------
<S>                          <C>                              <C>       
Governor's Square            Leasehold                                2054

Harborplace                  Leasehold                                2054

Highland Mall                Leasehold and fee by joint               2070
                             venture                                  

The Jacksonville Landing     Leasehold                                2057

Mall St. Matthews            Leasehold                                2053

Midtown Square               Leasehold                                2055

Pioneer Place                Leasehold                                2076

Plymouth Meeting             Leasehold                                2063

Riverwalk                    Leasehold and fee by joint               2076
                             venture                                  

South Street Seaport         Leasehold                                2031

Tampa Bay Center             Leasehold and fee by joint               2047
                             venture                                  

Westlake Center              Leasehold by joint venture               2043
</TABLE>

                                      I-8
<PAGE>
 
Item 3. Legal Proceedings.

  None.

                                      I-9
<PAGE>
 
Item 4. Submission of Matters to a Vote of Security Holders.

  None.

                                      I-10
<PAGE>
 
Executive Officers of the Registrant.


The executive officers of the Company as of March 26, 1999 are:

<TABLE>
<CAPTION>
                                    Present office and           Date of election   Business or professional
                                    position with the            or appointment to  experience during the past
Executive Officer         Age       Company                      present office     five years                                
-----------------         ---       ------------------           -----------------  ---------------------------               
<S>                       <C>       <C>                          <C>                <C>                                       
Anthony W. Deering         54       Chairman of the Board,           2/25/97        Chairman of the Board, President and      
                                    President and                    2/25/93        Chief Executive Officer of the Company;   
                                    Chief Executive Officer          2/23/95        formerly President and Chief Executive    
                                                                                    Officer of the Company;  President and    
                                                                                    Chief Operating Officer of the Company    
                                                                                                                              
Jeffrey H. Donahue         52       Executive Vice-President         12/3/98        Executive Vice-President and Chief Financial
                                    and Chief Financial Officer      9/23/93        Officer of the Company; formerly Senior Vice-
                                                                                    President and Chief Financial Officer of the
                                                                                    Company                                   
                                                                                                                              
Duke S. Kassolis           47       Senior Vice-President            9/23/93        Senior Vice-President and Director of     
                                    and Director of Office           8/17/93        Office and Mixed-Use Operations of the    
                                    and Mixed-Use Operations                        Company                                   
                                                                                                                              
Paul I. Latta, Jr.         55       Senior Vice-President            9/23/93        Senior Vice-President and Director of     
                                    and Director of Retail           8/17/93        Retail Operations of the Company          
                                    Operations                                                                                
                                                                                                                              
Douglas A. McGregor        56       Vice Chairman and Chief          12/3/98        Vice Chairman and Chief Operating Officer;
                                    Operating Officer                               formerly Executive Vice-President for     
                                                                                    Development and Operations of the Company 
                                                                                                                              
Robert Minutoli            48       Senior Vice-President            9/23/93        Senior Vice-President and Director of     
                                    and Director of                  8/17/93        New Business of the Company               
                                    New Business
</TABLE>

                                      I-11
<PAGE>
 
Executive Officers of the Registrant.
 
<TABLE> 
<CAPTION> 
                                    Present office and         Date of election   Business or professional
                                    position with the          or appointment to  experience during the past
Executive Officer           Age     Company                    present office     five years
------------------          ---     -------------------------  -----------------  --------------------------------
<S>                         <C>     <C>                        <C>                <C>
Robert D. Riedy              53     Senior Vice-President           9/23/93       Senior Vice-President and Director of
                                    and Director of Retail          8/17/93       Retail Leasing of the Company
                                    Leasing                                     
                                                                                
Alton J. Scavo               52     Senior Vice-President and       9/23/93       Senior Vice-President and Director of
                                    Director of the                 8/17/93       the Community Development Division of
                                    Community Development                         the Company and General Manager of
                                    Division and General                          Columbia
                                    Manager of Columbia                         
                                                                                
Jerome D. Smalley            49     Executive Vice-President        12/3/98       Executive Vice-President - Development;
                                    - Development                                 formerly Senior Vice-President and Director
                                                                                  of the Commercial and Office Development
                                                                                  Division of the Company
</TABLE> 

The term of office of each officer is until election of a successor or otherwise
at the pleasure of the Board of Directors.
 
There is no arrangement or understanding between any of the above-listed
officers and any other person pursuant to which any such officer was elected as
an officer, except with respect to Anthony W. Deering. See Exhibit 10 to this
Form 10-K.
 
None of the above-listed officers has any family relationship with any director
or other executive officer.

                                      I-12
<PAGE>
 
                                    Part II
                                    -------


Item 5.   Market for the Registrant's Common Equity and Related Stockholder
          Matters.

          Information required by Item 5 is incorporated herein by reference to
          page 35 of Exhibit 13.

Item 6.   Selected Financial Data.
          Information required by Item 6 is incorporated by reference to
          page 34 of Exhibit 13.

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

          Information required by Item 7 is incorporated herein by reference to
          pages 36 through 49 of Exhibit 13.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

          Information required by Item 7A is incorporated herein by reference to
          pages 45 and 46 of Exhibit 13.

Item 8.   Financial Statements and Supplementary Data.

          Financial Statements required by Item 8 are set forth in the Index to
          Financial Statements and Schedules on page IV-2.

          Supplementary data required by Item 8 are incorporated herein by
          reference to page 35 of Exhibit 13.

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure.

          None.

                                     II-1
<PAGE>
 
                                   Part III
                                   --------

The information required by Items 10, 11, 12 and 13 (except that information
regarding executive officers called for by Item 10 that is contained in Part I)
is incorporated herein by reference from the definitive proxy statement that the
Company intends to file pursuant to Regulation 14A on or before April 12, 1999.

                                     III-1
<PAGE>
 
                                    Part IV
                                    -------

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

     (a)  1. and 2.  Financial Statements and Schedules:

          Reference is made to the Index to Financial Statements and Schedules
          on page IV-2.

     (b)  Reports on Form 8-K:
          Current Report on Form 8-K/A filed October 9, 1998, disclosing
          financial statements required under Rule 3-14 of Regulation S-X and
          certain pro forma financial information.

          Current Report on Form 8-K filed October 21, 1998, disclosing
          acquisition of assets.

          Current Report on Form 8-K filed November 5, 1998, disclosing
          acquisition of assets.

          Current Report on Form 8-K/A filed November 16, 1998, disclosing
          financial statements required under Rule 3-14 of Regulation S-X and
          certain pro forma financial information.

          Current Report on Form 8-K filed December 14, 1998, disclosing
          acquisition of assets.

          Current Report on Form 8-K filed December 18, 1998, disclosing
          acquisition of assets.

     (c)  Exhibits required by Item 601 of Regulation S-K.        

                                
                                 Exhibit Index

          Exhibit No.
          -----------

               3    Articles of Incorporation and Bylaws

              10    Material Contracts

              12.1  Ratio of earnings to fixed charges

              12.2  Ratio of earnings to combined fixed charges and Preferred
                    stock dividend requirements

              13    Annual report to security holders

              21    Subsidiaries of the Registrant

              23.1  Consent of KPMG LLP, Independent Auditors

              23.2  Consent of KPMG LLP, Independent Auditors

              24    Power of Attorney

              27    Financial Data Schedule

              99    Additional Exhibits:

              99.1  Form 11-K Annual Report of The Rouse Company Savings
                    Plan for the year ended December 31, 1998

              99.2  Factors affecting future operating results


     (d)  Separate Financial Statements and Schedules of Subsidiaries not
          consolidated:
       
          Reference is made to the Index to Financial Statements and Schedules
          on page IV-2.


                                      IV-1
<PAGE>
 
                               The Rouse Company

                  Index to Financial Statements and Schedules

<TABLE> 
<CAPTION> 
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C> 
     Independent Auditors' Report                                                         IV-3

     Financial Statements:
          The Rouse Company and Subsidiaries included on pages 4 through 35 
               of Exhibit 13 incorporated herein by reference:

          Consolidated Balance Sheets at December 31, 1998 and 1997                       
          Consolidated Statements of Operations and Comprehensive Income 
               for the Years Ended December 31, 1998, 1997 and 1996                                
          Consolidated Statements of Changes in Shareholders' Equity for                  
               the Years Ended December 31, 1998, 1997 and 1996                              
          Consolidated Statements of Cash Flows for the Years Ended
               December 31, 1998, 1997 and 1996
          Notes to Consolidated Financial Statements

     Schedules:

          Real Estate Ventures Owned by The Rouse Company Incentive 
               Compensation Statutory Trust and The Rouse Company:
 
          Independent Auditors' Report                                                    IV-4
          Combined Consolidated Balance Sheet at December 31, 1998                        IV-5
          Combined Consolidated Statement of Operations for the Year Ended 
               December 31, 1998                                                          IV-6
          Combined Consolidated Statement of Changes in Shareholders' 
               Equity for the Year Ended December 31, 1998                                IV-7
          Combined Consolidated Statement of Cash Flows for the Year Ended 
               December 31, 1998                                                          IV-8
          Notes to Combined Consolidated Financial Statements                             IV-10
 
          The Rouse Company and Subsidiaries as of December 31, 1998 or for 
               the years ended December 31, 1998, 1997 and 1996:
 
          Schedule II Valuation and Qualifying Accounts                                   IV-19
          Schedule III Real Estate and Accumulated Depreciation                           IV-20
          Schedule IV Mortgage Loans on Real Estate                                       IV-35

          Real Estate Ventures Owned by The Rouse Company Incentive 
               Compensation Statutory Trust and The Rouse Company as of 
               December 31, 1998 or for the Year Ended December 31, 1998:

          Schedule II Valuation and Qualifying Accounts                                   IV-37
          Schedule III Real Estate and Accumulated Depreciation                           IV-38

     All other schedules have been omitted as not applicable or not 
          required, or because the required information is included in 
          the related financial statements or notes thereto.
</TABLE> 

                                      IV-2
<PAGE>
 
                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------


  The Board of Directors and Shareholders
  The Rouse Company:

  We have audited the consolidated financial statements and the related
  financial statement schedules of The Rouse Company and subsidiaries as listed
  in the accompanying index except for those schedules relating to the Real
  Estate Venture owned by The Rouse Company Incentive Compensation Statutory
  Trust and The Rouse Company. These consolidated financial statements and
  financial statement schedules are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these consolidated
  financial statements and financial statement schedules based on our audits.

  We conducted our audits in accordance with generally accepted auditing
  standards.  Those standards require that we plan and perform the audit to
  obtain reasonable assurance about whether the financial statements are free of
  material misstatement.  An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements.  An audit
  also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial
  statement presentation.  We believe that our audits provide a reasonable basis
  for our opinion.

  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the financial position of The Rouse
  Company and subsidiaries as of December 31, 1998 and 1997, and the results of
  their operations and their cash flows for each of the years in the three-year
  period ended December 31, 1998, in conformity with generally accepted
  accounting principles.  Also in our opinion, the related financial statement
  schedules referred to above, when considered in relation to the basic
  consolidated financial statements taken as a whole, present fairly, in all
  material respects, the information set forth therein.



                                                       KPMG LLP

  Baltimore, Maryland
  February 24, 1999

                                      IV-3
<PAGE>
 
                         INDEPENDENT AUDITORS' REPORT


The Board of Trustees
The Rouse Company Incentive Compensation Statutory Trust
and
The Board of Directors
The Rouse Company:

We have audited the accompanying combined consolidated financial statements and
the related financial statement schedules of Real Estate Ventures owned by The
Rouse Company Incentive Compensation Statutory Trust and The Rouse Company as
listed in the accompanying index. These combined consolidated financial
statements and financial statement schedules are the responsibility of the
Ventures' management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the combined consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Real Estate
Ventures owned by The Rouse Company Incentive Compensation Statutory Trust and
The Rouse Company as of December 31, 1998, and the results of their operations
and their cash flows for the year then ended in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic combined
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.



                                            KPMG LLP


Baltimore, Maryland
February  24, 1999


                                     IV-4

                                       
<PAGE>
 
                         Real Estate Ventures Owned by
          The Rouse Company Incentive Compensation Statutory Trust and
                               The Rouse Company

                      COMBINED CONSOLIDATED BALANCE SHEET

                               December 31, 1998

                                 (in thousands)
<TABLE>
 <S>                                                        <C> 
                 Assets
                --------
 
Property (notes 2, 5, and 11):
  Operating properties:
     Property and deferred costs of projects..............  $326,860
     Less accumulated depreciation and amortization.......    82,390
                                                            --------
                                                             244,470
  Properties in development...............................    66,442
  Investment land and land held for development and sale..   278,155
                                                            --------
 
     Total property.......................................   589,067
 
Accounts and notes receivable, including advances to
 The Rouse Company of $112,310 (note 3)...................   187,046
Deferred income taxes (note 6)............................    53,660
Prepaid expenses and other assets.........................    31,276
Investments in unconsolidated real estate ventures........    32,765
                                                            --------
  Total...................................................  $893,814
                                                            ========
 
          Liabilities and Shareholders' Equity (Deficit)
          ----------------------------------------------

Liabilities:
Debt (note 5):
  Borrowings from The Rouse Company.......................  $ 488,363
  Other borrowings........................................    332,945
                                                            ---------
     Total debt...........................................    821,308
                                                            ---------
Bank overdraft............................................     17,382
Deferred revenue..........................................     79,576
Accounts payable, accrued expenses and other liabilities..     19,286
Redeemable Series A Preferred stock (note 8)..............     50,000
Commitments and contingencies (notes 9, 11 and 12)
 
Shareholders' equity (deficit) (note 1):
Common stock..............................................          5
Additional paid-in capital................................    141,495
Accumulated deficit.......................................   (235,238)
                                                            ---------
  Net shareholders' deficit...............................    (93,738)
                                                            ---------
  Total...................................................  $ 893,814
                                                            =========
</TABLE>

The accompanying notes are an integral part of these statements.

                                      IV-5


<PAGE>
 
                         Real Estate Ventures Owned by
          The Rouse Company Incentive Compensation Statutory Trust and
                               The Rouse Company

                 COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

                          Year ended December 31, 1998

                                 (in thousands)


<TABLE>
 
<S>                                                          <C> 
Revenues:
  Land sales...............................................  $165,461
  Rentals and tenant services (note 9).....................    73,811
  Property management fees.................................    18,254
  Golf club operations.....................................    14,938
  Other (note 3)...........................................     9,546
                                                             --------
                                                              282,010

Cost of land sales and related administration..............    97,169
Other operating expenses, exclusive of provision for bad 
  debts, depreciation and amortization (notes 4 and 10)....    63,822
Interest expense (note 5)..................................    68,146
Provision for bad debts....................................       359
Depreciation and amortization (note 2).....................    10,585
Equity in earnings of unconsolidated real estate ventures..       811
Gain on dispositions of assets, net (note 7)...............    15,856
                                                             --------
 
  Earnings before income taxes and extraordinary losses....    58,596
                                                             --------
 
Income taxes, primarily federal (note 6):
  Current..................................................     5,478
  Deferred.................................................    16,582
                                                             --------
                                                               22,060
                                                             --------
 
  Earnings before extraordinary losses.....................    36,536
Extraordinary losses, net (note 5).........................     1,127
                                                             --------
 
  Net earnings.............................................  $ 35,409
                                                             ========
</TABLE>

The accompanying notes are an integral part of these statements.

                                      IV-6


<PAGE>
 
                         Real Estate Ventures Owned by
          The Rouse Company Incentive Compensation Statutory Trust and
                               The Rouse Company

  COMBINED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

                          Year ended December 31, 1998

                                 (in thousands)

<TABLE>
<CAPTION>
 
                                            Additional
                                    Common   paid-in    Accumulated
                                    stock    capital      deficit       Total
                                    ------  ----------  ------------  ----------
<S>                                 <C>     <C>         <C>           <C>
Balance at December 31, 1997......      $5    $141,495    $(265,797)  $(124,297)
 
Net earnings......................      --          --       35,409      35,409
Dividends declared-common stock...      --          --       (4,850)     (4,850)
                                    ------  ----------    ---------   ---------

Balance at December 31, 1998            $5    $141,495    $(235,238)   $(93,738)
                                    ======  ==========    =========   ========= 

</TABLE> 

The accompanying notes are an integral part of these statements.

                                      IV-7


<PAGE>
 
                         Real Estate Ventures Owned by
          The Rouse Company Incentive Compensation Statutory Trust and
                               The Rouse Company

                 COMBINED CONSOLIDATED STATEMENT OF CASH FLOWS

                          Year ended December 31, 1998

                                 (in thousands)

<TABLE>
<S>                                                               <C> 
Cash flows from operating activities
Rents and other revenues received...............................  $ 107,533
Proceeds from land sales........................................    124,152
Interest received...............................................        479
Land development expenditures...................................    (82,917)
Operating expenditures..........................................    (88,965)
Interest paid...................................................    (69,017)
Income taxes paid...............................................     (2,997)
                                                                  ---------
 
  Net cash used by operating activities.........................    (11,732)
                                                                  ---------
 
Cash flows from investing activities
Expenditures for properties in development and improvements to
  existing properties funded by debt............................    (78,464)
Expenditures for property acquisitions..........................    (10,054)
Proceeds from sales of operating properties.....................     69,063
Other...........................................................       (624)
                                                                  ---------
 
  Net cash used by investing activities.........................    (20,079)
                                                                  ---------
 
Cash flows from financing activities
Proceeds from issuance of property debt.........................     97,005
Repayments of property debt:
  Scheduled principal payments..................................     (5,433)
  Other payments................................................    (23,834)
Proceeds from issuance of other debt............................     13,794
Repayments of other debt........................................    (47,483)
Increase in bank overdraft......................................      2,984
Dividends paid..................................................     (4,850)
Other...........................................................       (372)
                                                                  ---------
 
  Net cash provided by financing activities.....................     31,811
                                                                  ---------
 
Net change in cash and cash equivalents.........................        ---
 
Cash and cash equivalents at beginning of year..................        ---
                                                                  ---------
 
Cash and cash equivalents at end of year........................  $     ---
                                                                  =========
 
</TABLE>

The accompanying notes are an integral part of these statements.

                                      IV-8


<PAGE>
 
Reconciliation of Net Earnings to Net Cash
  Used by Operating Activities
<TABLE>
<S>                                                            <C>
Net earnings.................................................  $ 35,409
Adjustments to reconcile net earnings to net cash
  used by operating activities:    
  Depreciation and amortization..............................    10,585
  Gain on dispositions of assets, net........................   (15,856)
  Extraordinary losses, net..................................     1,127
  Provision for bad debts....................................       359
  Decrease (increase) in:
     Accounts and notes receivable...........................   (42,950)
     Other assets............................................     2,264
  Increase in accounts payable, accrued expenses
     and other liabilities...................................     5,069
  Deferred income taxes......................................    16,582
  Other, net.................................................   (24,321)
                                                               --------
 
Net cash used by operating activities                          $(11,732)
                                                               ======== 

------------------------------------------------------------------------
Schedule of Noncash Investing and Financing Activities
 

Debt assumed by purchasers of land                              $14,836
                                                                =======
</TABLE> 

                                     IV-9

<PAGE>
 
                        Real Estate Ventures Owned by 
         The Rouse Company Incentive Compensation Statutory Trust and
                               The Rouse Company
              NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
                               December 31, 1998

<TABLE> 
<S>                         <C> 
(1)  Summary of             (a)   Basis of presentation
 significant                The combined consolidated financial statements include the accounts of the real
  accounting policies       estate ventures (Ventures) owned by The Rouse Company Incentive Compensation
                            Statutory Trust (Trust) and The Rouse Company (Company).  These ventures include
                            the following entities:
                                   .  The Howard Research And Development Corporation and subsidiaries    
                                   .  The Hughes Corporation and subsidiaries                             
                                   .  Howard Hughes Properties, Inc.                                      
                                   .  Rouse Property Management, Inc.                                     
                                   .  HRD Properties, Inc. and subsidiaries                                
                               The combined consolidated financial statements also include the accounts of
                            partnerships in which the Ventures have majority interest and control.
                            Investments in other entities are accounted for using the equity method.
                            Significant intercompany balances and transactions are eliminated.
                               The preparation of financial statements in conformity with generally accepted 
                            accounting principles requires management to make estimates and judgments that 
                            affect the reported amounts of assets and liabilities and disclosures of 
                            contingencies at the date of the financial statements and revenues and expenses 
                            recognized during the reporting period. Significant estimates are inherent in 
                            the preparation of the Ventures' financial statements. Actual results could differ 
                            from those estimates.  
                               The Ventures were initiated on December 31, 1997, when certain wholly owned
                            subsidiaries of the Company issued 91% of their voting common stock to the Trust,
                            an entity which is neither owned nor controlled by the Company, for an aggregate
                            consideration of $1,400,000.  These sales were made at fair value and as part of
                            the Company's plan to meet the qualifications for status as a Real Estate
                            Investment Trust (REIT).  The Company retained the remaining voting stock of the
                            Ventures and holds all outstanding shares of nonvoting common and/or preferred
                            stock and, in certain cases, mortgage loans receivable from the Ventures which,
                            taken together, comprise substantially all (at least 98%) of the financial
                            interest in them.
                               Due to the Company's continuing financial interest in the Ventures, the Ventures
                            retained the Company's historical cost basis of the assets acquired and
                            liabilities assumed on the date of sale of their voting common stock to the
                            Trust.  The condensed, combined consolidated balance sheet of the Ventures at
                            December 31, 1997, is summarized as follows (in thousands):
                            
                            Assets:
                             Operating properties, net.................................................  $  211,385
                             Properties in development.................................................      23,144
                             Investment land and land held for development and sale....................     266,477
                             Properties held for sale..................................................      46,289
                             Advances to the Company...................................................     131,832
                             Other.....................................................................     169,876
                                                                                                         ----------  
                               Total...................................................................  $  849,003
                                                                                                         ========== 
                            Liabilities and shareholders' deficit:
                             Borrowings from the Company...............................................  $  538,586
                             Other borrowings..........................................................     280,595
                             Other liabilities.........................................................     104,119
                             Redeemable Series A Preferred stock.......................................      50,000
                             Shareholders' deficit.....................................................    (124,297)
                                                                                                          ----------  
                               Total...................................................................  $  849,003
                                                                                                          ==========    
                             
                            (b)  Description of business
                            Through their subsidiaries and affiliates, the Ventures acquire, develop and/or
                            manage income-producing properties and develop and sell land for residential,
                            commercial and other uses.  The income-producing properties consist of retail
                            centers and office and industrial properties.  The retail centers include The
                            Mall in Columbia, a regional shopping center in Columbia, Maryland, and several
                            community shopping centers, in the Columbia area.  The office and industrial
                            properties are located in Columbia.  Land development and sales operations are
                            predominantly related to large-scale, long-term community development projects in
                            Columbia and Summerlin, Nevada.
</TABLE> 

                                     IV-10


<PAGE>
 
<TABLE>                                                                      
<S>                         <C>                                               
                            (c)  Property
                            Properties to be developed or held and used in operations are carried at cost
                            reduced for impairment losses, where appropriate.  Properties held for sale are
                            carried at cost reduced for valuation allowances, where appropriate.
                            Acquisition, development and construction costs of properties in development and
                            land development projects are capitalized including, where applicable, salaries
                            and related costs, real estate taxes, interest and preconstruction costs. The
                            preconstruction stage of development of an operating property (or an expansion of
                            an existing property) includes efforts and related costs to secure land control
                            and zoning, evaluate feasibility and complete other initial tasks which are
                            essential to development.  These costs are transferred to construction and
                            development in progress when the preconstruction tasks are completed.  Provision
                            is made for potentially unsuccessful preconstruction efforts by charges to
                            operations.  Development and construction costs and costs of significant
                            improvements, replacements and renovations at operating properties are
                            capitalized, while costs of maintenance and repairs are expensed as incurred.
                            Direct costs associated with financing and leasing of operating properties are
                            capitalized as deferred costs and amortized over the periods benefited by the
                            expenditures.
                               Depreciation of operating properties is computed using the straight-line method.
                            Properties are generally depreciated using composite lives ranging from 40 to 55
                            years producing effective annual rates of depreciation ranging from 1.6% to 2.5%.
                               If events or circumstances indicate that the carrying value of an operating
                            property to be held and used or a land development project may be impaired, a
                            recoverability analysis is performed based on estimated nondiscounted future cash
                            flows to be generated from the property or project.  If the analysis indicates
                            that the carrying value is not recoverable from future cash flows, the property
                            or project is written down to estimated fair value and an impairment loss is
                            recognized.
                               Properties held for sale are carried at the lower of their carrying values (i.e.,
                            cost less accumulated depreciation and any impairment loss recognized, where
                            applicable) or estimated fair values less costs to sell.  The net carrying values
                            of operating properties are classified as properties held for sale when marketing
                            of the properties for sale is authorized by management.  Depreciation of these
                            properties is discontinued at that time, but operating revenues, interest and
                            other operating expenses continue to be recognized until the date of sale.
 
                            (d)  Sales of property
                            Gains from sales of operating properties and revenues from land sales are
                            recognized using the full accrual method provided that various criteria relating
                            to the terms of the transactions and any subsequent involvement by the Ventures
                            with the properties sold are met.  Gains or revenues relating to transactions
                            which do not meet the established criteria are deferred and recognized when the
                            criteria are met or using the installment or cost recovery methods, as
                            appropriate in the circumstances.  For land sale transactions under terms of
                            which the Ventures are required to perform additional services and incur
                            significant costs after title has passed, revenues and costs of sales are
                            recognized proportionately on a percentage of completion basis.
                               Cost of land sales is generally determined as a specified percentage of land
                            sales revenues recognized for each land development project.  The cost
                            percentages used are based on estimates of development costs and sales revenues
                            to completion of each project and are revised periodically for changes in
                            estimates or development plans.  The specific identification method is used to
                            determine cost of sales of certain parcels of land.
</TABLE> 
 

                                     IV-11
<PAGE>
 
<TABLE>
<S>                         <C>                                                                            
                               Certain of the land assets of the Ventures are the subject of a Contingent Stock
                            Agreement (Agreement) between the Company and the former owners of the land or
                            their successors (the beneficiaries).  Under the Agreement, and subject to
                            various terms and conditions, the Company is required to issue shares of its
                            common stock (or, in certain circumstances, Increasing Rate Cumulative Preferred
                            stock) to the beneficiaries based on the appraised values of the assets at
                            specified "termination dates" from 2000 to 2009 and/or cash flows generated from
                            the development and/or sale of the assets prior to the termination dates.
                               The Company has retained full responsibility for its obligations under the
                            Agreement.  These obligations are unsecured and have not been guaranteed by the
                            Ventures.  Accordingly, the Agreement imposes no direct or contingent liabilities
                            on the Ventures and all related costs or expenses are recognized by the Company.
 
                            (e)  Leases
                            Leases which transfer substantially all the risks and benefits of ownership to
                            tenants are considered finance leases and the present values of the minimum lease
                            payments and the estimated residual values of the leased properties, if any, are
                            accounted for as receivables.  Leases which transfer substantially all the risks
                            and benefits of ownership to the Ventures are considered capital leases and the
                            present values of the minimum lease payments are accounted for as property and
                            debt.
                               In general, minimum rent revenues are recognized when due from tenants; however,
                            estimated collectible minimum rent revenues under leases which provide for
                            varying rents over their terms are averaged over the terms of the leases.
 
                            (f)  Income taxes
                            Deferred income taxes are accounted for using the asset and liability method.
                            Under this method, deferred income taxes are recognized for temporary differences
                            between the financial reporting bases of assets and liabilities and their
                            respective tax bases and for operating loss and tax credit carryforwards based on
                            enacted tax rates expected to be in effect when such amounts are realized or
                            settled.  However, deferred tax assets are recognized only to the extent that it
                            is more likely than not that they will be realized based on consideration of
                            available evidence, including tax planning strategies and other factors.
 
                            (g)  Cash and cash equivalents
                            Short-term investments with maturities at dates of purchase of three months or
                            less are classified as cash equivalents.
 
                            (h)   Information about financial instruments
                            Fair values of financial instruments approximate their carrying values in the
                            financial statements except for debt for which fair value information is provided
                            in note 5.
 
(2)  Property               Operating properties and deferred costs of projects at December 31, 1998 are
                            summarized as follows (in thousands):
 
                            Buildings and improvements................................................. $289,902
                            Land.......................................................................   26,023
                            Deferred costs.............................................................   10,472
                            Furniture and equipment....................................................      463
                              Total...................................................................  --------
                                                                                                        $326,860
                                                                                                        ======== 
 
                              Depreciation expense for 1998 was $9,668,000 and amortization expense was
                            $917,000.
 
</TABLE> 

                                     IV-12
<PAGE>
 
<TABLE>
<S>                         <C>                                                                              
                               Investment land and land held for development and sale at December 31, 1998 is
                            summarized as follows (in thousands):
 
                            Land under development.....................................................       $131,663
                            Finished land..............................................................         70,747
                            Raw land...................................................................         75,745
                               Total...................................................................       --------
                                                                                                              $278,155
                                                                                                              ========
 
(3)  Accounts and notes     Accounts and notes receivable at December 31, 1998 are summarized as follows (in
     receivable             thousands):
 
                            Accounts receivable, primarily accrued rents and
                              income under tenant leases...............................................       $ 11,547
                            Notes receivable from sales of operating properties........................          1,221
                            Notes receivable from sales of land........................................         62,802
                            Interest bearing advances to the Company...................................         99,018
                            Noninterest bearing advances to the Company................................         13,292
                                                                                                              --------
                                                                                                               187,880
                            Less allowance for doubtful receivables....................................            834
                                                                                                              --------
                               Total...................................................................       $187,046
                                                                                                              ======== 
                                                                                                 
 
                               Accounts and notes receivable due after one year were $27,561,000 at December 31,
                            1998.
                               Credit risk with respect to receivables from tenants is not highly concentrated
                            due to the large number of tenants.  The Ventures perform credit evaluations of
                            prospective new tenants and require security deposits in certain circumstances.
                            Tenants' compliance with the terms of their leases is monitored closely, and the
                            allowance for doubtful receivables is established based on analyses of the risk
                            of loss on specific tenant accounts, historical trends and other relevant
                            information. Notes receivable from sales of land are primarily due from builders
                            at the community development project in Summerlin. The Ventures perform credit
                            evaluations of the builders and generally require substantial down payments (at
                            least 20%) on all land sales that they finance.  These notes and notes from sales
                            of operating properties are generally secured by first liens on the related
                            properties.
                               Advances to the Company are unsecured and without a stated due date.  Interest is
                            charged (with limited exceptions) at the same rate that is charged on the Ventures'
                            credit facilities borrowings described in note 5.  Interest on these advances was 
                            $9,067,000 in 1998.
 
(4)  Pension and postre-    Substantially all of the employees of the Ventures are eligible to participate in
     tirement plans         a defined benefit pension plan (the "funded plan") sponsored by the Company.  In
                            addition, employees whose defined benefits exceed the limits of the funded plan
                            are eligible to participate in separate, nonqualified unfunded plans sponsored by
                            the Company.  Benefits under the pension plans are based on the participants'
                            years of service and compensation.  The Ventures reimburse the Company for their
                            share of the annual benefit cost under the plan.  The Ventures' pension cost was
                            $2,485,000 in 1998.
                               Full-time employees of the Ventures who meet minimum age and service requirements
                            are eligible to receive postretirement medical and life insurance benefits under
                            a plan sponsored by the Company.  The Ventures reimburse the Company for their
                            share of the annual benefit costs under the plan, which include a portion of the
                            cost of participants' life insurance coverage and contributions (based on years
                            of service) to the cost of participants' medical insurance coverage, subject to a
                            maximum annual contribution.  The Ventures' postretirement benefit cost was
                            $606,000 in 1998.
</TABLE>

                                     IV-13
<PAGE>
 
<TABLE>
<S>                         <C>                                                                               
(5)  Debt                   Debt at December 31, 1998 is summarized as follows (in thousands):
 
                            Borrowings from the Company:                                              
                              Deed of trust notes payable.............................................. $362,167 
                              Credit lines.............................................................   61,855
                              Other loans..............................................................   64,341
                                                                                                        --------
                                                                                                         488,363
                            Mortgages payable - other lenders..........................................  317,176
                            Other debt.................................................................   15,769
                                                                                                        --------
                               Total................................................................... $821,308
                                                                                                        ======== 
 
                               The deed of trust notes payable to the Company are secured by certain land and
                            operating properties and general assignments of rents.  These notes are due
                            December 31, 2012, and minimum principal payments, based on a thirty-year amortization
                            schedule, are due quarterly.  Specified principal payments are also required when
                            land is released from the deed of trust; however, payments made due to partial
                            releases reduce or offset the required quarterly payments. Notes aggregating 348,112,000 
                            bear interest at 12.25% through December 2000, and at the greater of the prime 
                            rate plus 3.75% or 10% thereafter to maturity or repayment. The remaining notes 
                            bear interest at 12.25% throughout their terms.  Interest on the notes was 
                            $45,671,000 in 1998.
                               The Ventures have five separate credit line facilities with the Company that
                            provide for aggregate borrowings of up to $115,000,000.  These facilities may be
                            used for various purposes, including acquisitions, development and other corporate
                            needs, subject to specified terms and conditions.  The credit facilities are
                            available to December 31, 2012.  Borrowings are secured by deeds of trust on
                            certain land assets.  Borrowings under the credit facilities bear interest at 9%
                            through December 2001, and at the greater of the prime rate plus 3.75% or 10%
                            thereafter.  Interest on the credit line facilities was $5,055,000 in 1998. 
                               Other loans payable to the Company are unsecured and are due in equal annual
                            installments over periods to 2023.  The notes bear interest at a variable rate (9%
                            at December 31, 1998) which is based on the weighted-average interest rate of
                            certain borrowings of the Company and subsidiaries.  Interest on the other loans
                            was $6,476,000 in 1998.
                               The mortgages payable to other lenders are secured by deeds of trust or mortgages
                            on properties and general assignments of rents.  This debt matures at various
                            dates through 2017 and, at December 31, 1998, bears interest at a weighted-average
                            effective rate of 7.70%.  At December 31, 1998, approximately $220,952,000 of the
                            mortgages were payable to one lender.
                               Other debt includes special improvement district bonds and construction loans.
                            Other debt bears interest at a weighted-average effective rate of 7.26% at
                            December 31, 1998.
                               The annual maturities of debt at December 31, 1998 are summarized as follows (in
                            thousands):
                                                                       Borrowings
                                                                        from the        Other
                                                                        Company       Borrowings      Total
                                                                      -------------  ------------  ------------
 
                            1999........................................   $  7,424      $  5,510      $ 12,934
                            2000........................................      3,828         4,281         8,109
                            2001........................................      4,024         5,944         9,968
                            2002........................................      4,247         7,249        11,496
                            2003........................................      4,499         6,126        10,625
                            Subsequent to 2003..........................    464,341       303,835       768,176
                                                                           --------      --------  ------------
                               Total....................................   $488,363      $332,945      $821,308
                                                                           ========      ========  ============
 
                               Total interest costs were $83,411,000 in 1998, of which $15,265,000, were
                            capitalized.
</TABLE> 




                                     IV-14

<PAGE>
 
<TABLE>
<S>                         <C>                                                                                 
                               During 1998, the Ventures incurred extraordinary losses related to extinguishments
                            of debt prior to scheduled maturity of $1,863,000, less related deferred income
                            tax benefits of $736,000.  The sources of funds used to pay the debt and fund the
                            prepayment penalties, where applicable, were refinancings of the related
                            properties.
 
                               The carrying amounts of the borrowings from the Company approximate fair value at
                            December 31, 1998.  The carrying amounts and estimated fair values of the
                            Ventures' other debt at December 31, 1998 are summarized as follows (in thousands):

                                                                                                     Carrying    Estimated
                                                                                                     Amount      Fair Value
                                                                                                   ------------  ----------
                               Fixed rate debt..................................................       $326,060    $342,962
                               Variable rate debt...............................................          6,885       6,885
                                                                                                   ------------  ----------
                                                                                                       $332,945    $349,847
                                                                                                   ============  ==========
 
                               Fair value estimates are made at a specific point in time, are subjective in
                            nature and involve uncertainties and matters of significant judgment.  Settlement
                            of the Ventures' debt obligations at fair value may not be possible and may not be
                            a prudent management decision.

(6)  Income taxes           Income tax expense is reconciled to the amount computed by applying the Federal
                            corporate tax rate as follows for the year ended December 31, 1998 (in thousands):
 
                            Tax at statutory rate on earnings before
                              income taxes and extraordinary losses.............................   $ 20,509 
                            State income taxes, net of Federal income                                      
                              tax benefit.......................................................      1,551
                                                                                                   --------  
                                   Income tax expense...........................................   $ 22,060  
                                                                                                   ========   
                                                                                                   
                               The net deferred tax asset at December 31, 1998 is summarized as follows (in
                            thousands):
 
                            Total deferred tax assets...........................................   $ 75,027
                            Total deferred tax liabilities......................................     21,367
                                                                                                   --------
                              Net deferred tax asset............................................   $ 53,660    
                                                                                                   ========
                                                                                         
 
                               The tax effects of temporary differences and loss carryforwards included in the net
                            deferred tax asset at December 31, 1998 are summarized as follows (in thousands):
 
                            Property, primarily differences in depreciation and
                               amortization, the tax basis of land assets and
                               treatment of interest and certain other costs....................   $ 41,740
                            Operating loss and tax credit carryforwards.........................     11,295
                            Other...............................................................        625
                                                                                                   --------
                               Total............................................................   $ 53,660
                                                                                                   ======== 
 
                               The net operating losses carried forward from December 31, 1998 for Federal income
                            tax purposes aggregate approximately $27,645,000.   The loss carryforward will
                            begin to expire in 2005.
 
                               As indicated above, the deferred tax assets relate primarily to differences in the
                            book and tax bases of property (particularly land assets) and to operating loss
                            carryforwards for Federal income tax purposes.  Based on projections of future
                            taxable income, management believes that it is more likely than not that the net
                            deferred tax asset will be realized.  The amount of the net 
</TABLE> 

                                     IV-15
<PAGE>
 
<TABLE>
<S>                         <C>                                                                                  
                            deferred tax asset considered realizable could be reduced in the near term, however, 
                            if estimates of future taxable income are reduced.
 
(7)    Gain on              Gain on dispositions of assets, net, is summarized as follows for the year ended
       dispositions         December 31, 1998 (in thousands):
       of assets, net   

                            Net gain on operating properties....................................   $15,879 
                            Other, net..........................................................       (23)
                                                                                                   ------- 
                               Total............................................................   $15,856 
                                                                                                   ======== 
                                                                                 
                               The net gain on operating properties relates primarily to sales of a hotel
                            property and two office/industrial buildings.
 
(8)  Series A Preferred     Howard Hughes Properties, Inc. (HHPI) has issued 25,000 shares of Series A
     Stock                  Preferred stock to the Company.  The shares have a liquidation preference of
                            $2,000 per share and earn dividends at an annual rate of 9.9% of the liquidation
                            preference.  Dividends are cumulative, however, no dividends were paid during 1998
                            because HHPI incurred a tax loss.  Dividends in arrears at December 31, 1998
                            aggregated $4,450,000.  At the option of the Company, the shares are redeemable at
                            any time to December 31, 2017 at a price of $2,000 per share.

(9)    Leases               The Ventures, as lessee, have entered into operating leases expiring at various
                            dates through 2076.  Rents under such leases aggregated $448,600 in 1998.  In
                            addition, real estate taxes, insurance and maintenance expenses are obligations of
                            the Ventures.  Minimum rent payments due under operating leases in effect at
                            December 31, 1998 are summarized as follows (in thousands):
 
                            1999................................................................      $     449
                            2000................................................................            449
                            2001................................................................            449
                            2002................................................................            449
                            2003................................................................            278
                            Subsequent to 2003..................................................         16,326
                                                                                                       --------
                               Total............................................................       $ 18,400
                                                                                                       ========
 
                               Space in the Ventures' operating properties is leased to approximately 700
                            tenants.  In addition to minimum rents, the majority of the retail center leases
                            provide for percentage rents when the tenants' sales volumes exceed stated
                            amounts, and the majority of the retail center and office leases provide for other
                            rents which reimburse the Ventures for certain of their operating expenses.  Rents
                            from tenants are summarized as follows (in thousands):
 
                            Minimum rents.......................................................       $ 47,977
                            Percentage rents....................................................            996
                            Other rents.........................................................         24,838
                                                                                                   ------------ 
                               Total............................................................       $ 73,811
                                                                                                   ============ 
</TABLE> 
 

                                     IV-16
<PAGE>
 
<TABLE>
<S>                         <C>                                                                                   
                                    The minimum rents to be received from tenants under operating leases in effect at
                                 December 31, 1998 are summarized as follows (in thousands):
 
                                 1999...........................................................   $ 44,419
                                 2000...........................................................     39,630
                                 2001...........................................................     34,477
                                 2002...........................................................     26,663
                                 2003...........................................................     20,235
                                 Subsequent to 2003.............................................     63,877
                                                                                                   --------
                                    Total.......................................................   $229,301 
                                                                                                   ========

(10)  Other transactions with    Under an informal agreement, the Company provides various services to the Ventures, including
      The Rouse Company          accounting, data processing, legal, leasing, finance, and other administrative and support
                                 functions.  The Ventures reimburse the Company for the cost of these services, determined in
                                 accordance with the Company's established cost accounting practices.  Under terms of a
                                 license agreement, the Ventures paid the Company a fee of $1,000,000 in 1998 in consideration
                                 for the right to use the Company's name in their property management operations.  The fee
                                 under the license agreement is determined annually based on various operating factors.
                                 Operating expenses for 1998 include license fees and service cost reimbursements to the
                                 Company of approximately $8,305,000.  The Ventures also reimburse the Company for costs of
                                 any services it provides with respect to development of operating properties.  These costs
                                 were approximately $2,198,000 in 1998 and related primarily to development of an expansion of
                                 a regional shopping center and new office buildings in Columbia and Summerlin.
 
 
(11)  Other commitments          Commitments for the construction and development of properties in the ordinary course of
      and contingencies          business and other commitments not set forth elsewhere amount to approximately $60,000,000 at
                                 December 31, 1998.
                                    Certain of the Ventures have guaranteed payment of the Company's obligations under its credit
                                 facilities with a group of lenders, subject to various terms and conditions.  At December 31,
                                 1998, outstanding borrowings under the facilities were $602,000,000.
                                    The Ventures 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 litigation matters, where appropriate, and
                                 the ultimate resolution of such litigation matters is not likely to have a material effect on
                                 the combined financial position of the Ventures.  Due to the Ventures' 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 Ventures' combined net earnings (loss) and it is,
                                 therefore, possible that the resolution of these matters could have such an effect in a
                                 future period.
 
(12)   Year 2000 issue           The year 2000 issue relates to whether computer systems will properly recognize
                                 date-sensitive information to allow accurate processing of transactions and data relating to
                                 the year 2000 and beyond.  In addition, the year 2000 issue relates to whether
                                 non-Information Technology (IT) systems that depend on embedded computer technology will
                                 recognize the year 2000.  Systems that do not properly recognize such information could
                                 generate erroneous information or fail.
                                    As described above, the Company provides the Ventures with various services.  The Venture is
                                 dependent on the Company's IT systems being year 2000 compliant.  The Company has adopted a
                                 plan to replace virtually all of its management information systems and accounting systems.
                                 In accordance with this plan, all mission critical IT systems have been or are being replaced
                                 with systems that are year 2000 compliant.  For non-IT systems, the Company has completed a
                                 comprehensive review of computer hardware and software in mechanical systems and has
                                 developed a program to repair or replace and test non-IT systems that are not year 2000
                                 compliant by the third quarter of 1999.  In addition, the Company is developing contingency
                                 plans in the event that any critical non-IT system fails as a result of a year 2000 issue.
                                 Costs to 

</TABLE> 

                                     IV-17
<PAGE>
 
<TABLE>
<S>                         <C>                                                                                   
                                 specifically remediate non-IT systems (e.g., escalators, elevators, security, heating, ventilating
                                 and cooling systems, etc.) are not expected to be material. Management of the Company and the
                                 Ventures do not believe that the year 2000 issue will pose significant problems in IT and non-IT
                                 systems, or that resolution of any potential problems with respect to these systems will have a
                                 material effect on the Ventures' financial condition or results of operations.
                                   The Company and management of the Ventures believe that the Ventures' exposure to the year
                                 2000 issue is widespread with no known major direct exposure.  The Company and management of
                                 the Ventures believe that their most likely worst-case exposure is at the indirect level,
                                 involving vendors, suppliers and tenants.  While it is not possible at this time to determine
                                 the likely impact of these potential problems, the Company and management of the Ventures
                                 will continue to evaluate these areas and develop contingency plans, as appropriate.

(13)  New accounting             In March 1998, the American Institute of Certified Public Accountants issued Statement of  
      standards not yet          Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for       
      adopted                    Internal Use" (SOP 98-1) which is required to be adopted by the Ventures no later than        
                                 January 1, 1999.  SOP 98-1 provides guidance as to whether costs incurred relating to         
                                 internal-use software should be expensed or capitalized.  The guidance in SOP 98-1 is         
                                 required to be applied to costs incurred subsequent to adoption and may not be applied to     
                                 costs incurred prior to initial application.  The Ventures intend to adopt SOP 98-1 effective 
                                 January 1, 1999, and do not believe that adoption will have a material effect on their results  
                                 of operations.                                                                                
                                      In April 1998, the American Institute of Certified Public Accountants issued Statement of     
                                 Position 98-5, "Reporting on the Costs of Start-up Activities" (SOP 98-5) which is required   
                                 to be adopted by the Ventures no later than January 1, 1999.  SOP 98-5 requires that start-up 
                                 costs and organization costs, not otherwise addressed in existing authoritative literature,   
                                 be expensed as incurred.  The Ventures intend to adopt SOP 98-5 effective January 1, 1999,    
                                 and the initial application will be reported as the cumulative effect of a change in          
                                 accounting principle.  The Ventures do not believe that adoption will have a material effect  
                                 on their results of operations in future periods.                                                
</TABLE>                         
                                 
                                     IV-18
<PAGE>
 
                                                                     Schedule II
                                                                     -----------
                      THE ROUSE COMPANY AND SUBSIDIARIES

                       Valuation and Qualifying Accounts
                 Years ended December 31, 1998, 1997 and 1996
                                (in thousands)

<TABLE>
<CAPTION>
                                                                            Additions                       
                                                                   -------------------------                
                                                     Balance at    Charged to    Charged to                        Balance at    
                                                     beginning     Costs and       other                             end of     
             Descriptions                             of year       expenses      accounts     Deductions             year      
             ------------                            ----------    ----------    ----------    ----------          ----------   
<S>                                                  <C>           <C>           <C>           <C>                 <C>          
Year ended December 31, 1998:                                                                                                   
   Allowance for doubtful receivables                 $  21,311     $   7,735    $    ---      $   9,218  /(1)/     $  19,828   
                                                      =========     =========    =========     =========            =========    
   Valuation allowance - properties held for sale     $  37,952     $     ---    $    ---      $  37,952  /(2)/     $     ---   
                                                      =========     =========    =========     =========            =========    
   Preconstruction reserve                            $  17,351     $   1,700    $    ---      $   3,143  /(3)/     $  15,908   
                                                      =========     =========    =========     =========            =========    
Year ended December 31, 1997:                                                                                                   
   Allowance for doubtful receivables                 $  28,153     $   5,766    $    ---      $  12,608  /(1)/     $  21,311
                                                      =========     =========    =========     =========            =========    
   Valuation allowance - properties held for sale     $  35,671     $  26,249    $    ---      $  23,968  /(2)/     $  37,952   
                                                      =========     =========    =========     =========            =========    
   Preconstruction reserve                            $  16,317     $   2,800    $    ---      $   1,766  /(3)/     $  17,351   
                                                      =========     =========    =========     =========            =========    
Year ended December 31, 1996:                                                                                                   
   Allowance for doubtful receivables                 $  24,468     $   3,688    $  1,161      $   1,164  /(1)/     $  28,153
                                                      =========     =========    =========     =========            =========    
   Valuation allowance - properties held for sale     $  15,589     $  25,825    $    ---      $   5,743  /(2)/     $  35,671   
                                                      =========     =========    =========     =========            =========    
   Preconstruction reserve                            $  15,379     $   2,700    $    ---      $   1,762  /(3)/     $  16,317   
                                                      =========     =========    =========     =========            =========    
</TABLE> 

Notes:
(1)  Balances written off as uncollectible.

(2)  Allowance related to properties sold.

(3)  Costs of unsuccessful projects written off.

                                    IV-19
<PAGE>
 
                                                                    Schedule III
                                                                    ------------

                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                      Costs capitalized subsequent  
                                           Initial cost to Company          to acquisition          
                                         ---------------------------  ----------------------------  
                                                        Buildings                                   
                                                           and                                      
                                 Encum-                  Improve        Improve      Carrying        
           Description           brances      Land     ments(Note 3)     ments    costs (note 2)     
           -----------          ---------  ----------  -------------  ---------  ---------------    
<S>                             <C>        <C>         <C>            <C>        <C>                
Operating Properties:                                                                               
                                                                                                    
Park Meadows                     $175,337     $35,812     $265,031     $     55   $           --    
Retail Center                                                                                       
Denver, CO                                                                                          
                                                                                                     
Bridgewater Commons               150,000      24,715      242,660           --               --     
Retail Center                                                                                       
Bridgewater, NJ                                                                                     
                                                                                                     
Towson Town Center                140,000      45,391      207,723          255               --     
Retail Center                                                                                       
Towson, MD                                                                                          
                                                                                                     
Arizona Center                    107,550       4,137           --      151,391               --     
Mixed-Use project                                                                                   
Phoenix, AZ                                                                                         
                                                                                                     
The Fashion Show                   75,232      33,179      120,347        1,212               --     
Retail Center                                                                                       
Las Vegas, NV                                                                                       
                                                                                                     
South Street Seaport               58,337          --           --      146,274               --     
Retail Center                                                                                       
New York, NY                                                                                        
                                                                                                     
Woodbridge Center                 132,504      26,301           --      119,126               --     
Retail Center                                                                                      
Woodbridge, NJ                                                                                     
                                                                                                    
Beachwood Place                   119,568      10,673           --      129,893               --    
Retail Center                                                                                      
Beachwood, OH                                                                                      
                                                                                                    
Fashion Place Mall                 76,649      19,379      119,715           --               --    
Retail Center                                                                                      
Salt Lake City, UT.                                                                                
                                                                                                    
Owings Mills                       61,000      17,006           --      113,557               --    
Retail Center
Baltimore County, MD
<CAPTION> 
                                         Gross amount at which carried
                                               at close of period
                                
                                                                                                            Life on
                                            Buildings             Accumulated     Date of                 which depre-
                                               and                depreciation   completion                ciation in
                                                                                                             latest
                                             Improve                  and            of         Date     income state-
           Description              Land      ments      Total    amortization  construction  acquired  ment is computed
           -----------            --------  ---------  ---------  ------------  ------------  --------  ----------------
<S>                               <C>       <C>        <C>        <C>           <C>           <C>       <C>
Operating Properties:           
                                                                              
Park Meadows                       $35,812   $265,086   $300,898       $ 1,890         06/96     07/98       Note 9
Retail Center                   
Denver, CO                      
                                                                               
Bridgewater Commons                 24,715    242,660    267,375         1,981         06/88     12/98       Note 9
Retail Center                   
Bridgewater, NJ                 
                                                                               
Towson Town Center                  45,391    207,978    253,369           856         06/59     10/98       Note 9
Retail Center                   
Towson, MD                      
                                                                               
Arizona Center                       4,137    151,391    155,528        31,081         07/83      N/A        Note 9 
Mixed-Use project               
Phoenix, AZ                     
                                    33,179    121,559    154,738         6,870         03/81     06/96       Note 9 
The Fashion Show                
Retail Center                   
Las Vegas, NV                   
                                              
South Street Seaport                    --    146,274    146,274        29,924         07/83      N/A        Note 9
Retail Center                   
New York, NY                    
                                                                              
Woodbridge Center                   26,301    119,126    145,427        27,680         03/71      N/A        Note 9 
Retail Center                   
Woodbridge, NJ                  
                                    10,673    129,893    140,566        11,562         08/78      N/A        Note 9 
Beachwood Place                 
Retail Center                   
Beachwood, OH                   
                                    19,379    119,715    139,094           490         03/72     10/98       Note 9
Fashion Place Mall              
Retail Center                   
Salt Lake City, UT.             
                                                                              
Owings Mills                        17,006    113,557    130,563        13,691         07/86      N/A        Note 9
Retail Center
Baltimore County, MD
</TABLE>

                                     IV-20
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                      Costs capitalized subsequent 
                                           Initial cost to Company          to acquisition         
                                         ---------------------------  -----------------------------
                                                                                                   
                                                       Buildings                                   
                                                          and                                      
                                 Encum-                 Improve          Improve      Carrying     
            Description          brances     Land     ments(Note 3)       ments        costs      
            -----------         ---------  ---------  -------------   -------------  -----------   
<S>                             <C>        <C>        <C>             <C>            <C>           
Pioneer Place                    $102,475    $    --       $    --         $122,687    $      --   
Mixed-Use project                                                                                  
Portland, OR                                                                                       
                                                                                                   
Oviedo Marketplace                 69,485     11,676            --          108,374           --   
Retail Center                                                                                      
Orlando, FL.                                                                                       
                                                                                                   
Westlake Center                    93,175     10,582            --          104,807           --   
Mixed-Use project                                                                                  
Seattle, WA                                                                                        
                                                                                                   
The Gallery at Harborplace        106,562      6,648            --          106,820           --   
Mixed-Use project                                                                                  
Baltimore, MD                                                                                      
                                                                                                   
Mall St. Matthews                  71,223         --            --          102,124           --   
Retail Center                                                                                      
Louisville, KY                                                                                     
                                                                                                   
Bayside Marketplace                76,838         --            --           97,408           --   
Retail Center                                                                                      
Miami, FL                                                                                          
                                                                                                   
Governor's Square                  54,077         --            --           85,379           --   
Retail Center                                                                                      
Tallahassee, FL                                                                                    
                                                                                                   
Paramus Park                       70,353     13,475            --           82,935           --   
Retail Center                                                                                      
Paramus, NJ                                                                                        
                                                                                                   
Moorestown Mall                    42,000     13,577        65,596               --           --   
Retail Center                                                                                      
Burlington County, NJ                                                                              
                                                                                                   
Faneuil Hall Marketplace           53,362         --            --           74,858           --   
Retail Center                                                                                      
Boston, MA                                                                                         
                                                                                                   
Santa Monica Place                     --      5,088            --           69,762           --
Retail Center
Santa Monica, CA
<CAPTION>
                                       Gross amount at which carried
                                            at close of period
                                     ----------------------------------                                           Life on
                                           Buildings                    Accumulated     Date of                 which depre-
                                              and                       depreciation   completion            ciation in latest
                                            Improve                         and            of         Date     income state-
         Description               Land      ments       Total          amortization  construction  acquired  ment is computed
         -----------              -------  ---------     -----          ------------  ------------  --------  ----------------
<S>                               <C>      <C>        <C>               <C>           <C>           <C>       <C>
Pioneer Place                     $    --   $122,687  $   122,687        $  26,253        03/90       N/A        Note 9 
Mixed-Use project               
Portland, OR                    
                                                                  
Oviedo Marketplace                 11,676    108,374      120,050            2,183        03/98       N/A        Note 9 
Retail Center                   
Orlando, FL.                    
                                                                  
Westlake Center                    10,582    104,807      115,389           28,911        10/88       N/A        Note 9 
Mixed-Use project               
Seattle, WA                     
                                                                  
The Gallery at Harborplace          6,648    106,820      113,468           26,622        09/87       N/A        Note 9 
Mixed-Use project               
Baltimore, MD                   
                                                                  
Mall St. Matthews                      --    102,124      102,124           17,853        03/62       N/A        Note 9 
Retail Center                   
Louisville, KY                  
                                                                  
Bayside Marketplace                    --     97,408       97,408           17,925        04/87       N/A        Note 9 
Retail Center                   
Miami, FL                       
                                                                  
Governor's Square                      --     85,379       85,379            7,509        08/79       N/A        Note 9 
Retail Center                   
Tallahassee, FL                 
                                                                  
Paramus Park                       13,475     82,935       96,410           10,714        03/74       N/A        Note 9 
Retail Center                   
Paramus, NJ                     
                                                                  
Moorestown Mall                    13,577     65,596       79,173            2,189        03/63      12/97       Note 9 
Retail Center                   
Burlington County, NJ           
                                                                  
Faneuil Hall Marketplace               --     74,858       74,858           13,105        08/76       N/A        Note 9 
Retail Center                   
Boston, MA                      
                                                                  
Santa Monica Place                  5,088     69,762       74,850           11,787        10/80       N/A        Note 9 
Retail Center
Santa Monica, CA
</TABLE>

                                     IV-21
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                     Costs capitalized subsequent  
                                          Initial cost to Company          to acquisition          
                                        ---------------------------  -----------------------------

                                                       Buildings                                   
                                                          and                                      
                                 Encum-                 Improve        Improve       Carrying      
           Description          brances      Land     ments(Note 3)     ments         costs        
           -----------          --------  ----------  -------------  ------------  ------------    
<S>                             <C>       <C>         <C>            <C>           <C>             
                                                                                                   
Cherry Hill Mall                 $78,280     $14,767    $      --         $58,210     $      --    
Retail Center                                                                                      
Cherry Hill, NJ                                                                                    
                                                                                                   
Riverwalk                         10,833          --           --          72,495            --    
Retail Center                                                                                      
New Orleans, LA                                                                                    
                                                                                                   
Oakwood Center                    53,615      14,750           --          57,395            --    
Retail Center                                                                                      
Gretna, LA                                                                                         
                                                                                                   
Augusta Mall                      61,347       5,398           --          66,130            --    
Retail Center                                                                                      
Augusta, GA                                                                                        
                                                                                                   
Hulen Mall                        64,102       5,064           --          65,624            --    
Retail Center                                                                                      
Ft. Worth, TX                                                                                      
                                                                                                   
Plymouth Meeting                  34,785         702           --          69,386            --    
Retail Center                                                                                      
Montgomery County, PA                                                                              
                                                                                                   
Echelon Mall                      59,334       6,160           --          63,317            --    
Retail Center                                                                                      
Voorhees, NJ                                                                                       
                                                                                                   
Harborplace                       36,611          --           --          58,147            --    
Retail Center                                                                                      
Baltimore, MD                                                                                      
                                                                                                   
Perimeter Mall                        --          --           --          50,051            --    
Retail Center                                                                                      
Atlanta, GA                                                                                        
                                                                                                   
Blue Cross & Blue Shield          31,400       1,000           --          44,756            --
Building I
Office Building
Baltimore, MD
<CAPTION>
                                      Gross amount at which carried
                                            at close of period
                                
                                                                                                               Life on
                                           Buildings                Accumulated     Date of                 which depre-
                                              and                   depreciation   completion            ciation in latest
                                            Improve                     and            of         Date     income state-
           Description             Land      ments       Total      amortization  construction  acquired  ment is computed
           -----------           --------  ---------     -----      ------------  ------------  --------  ----------------
<S>                              <C>       <C>        <C>           <C>           <C>           <C>       <C>
Cherry Hill Mall                  $14,767    $58,210  $   72,977      $ 18,187       10/61        N/A          Note 9 
Retail Center                   
Cherry Hill, NJ                 
                                                             
Riverwalk                              --     72,495      72,495        11,648       08/86        N/A          Note 9 
Retail Center                   
New Orleans, LA                 
                                                                          
Oakwood Center                     14,750     57,395      72,145         9,887       10/82        N/A          Note 9 
Retail Center                                                             
Gretna, LA                                                                
                                                                          
Augusta Mall                        5,398     66,130      71,528         5,879       08/78        N/A          Note 9 
Retail Center                                                             
Augusta, GA                                                               
                                                                          
Hulen Mall                          5,064     65,624      70,688        12,055       08/77        N/A          Note 9 
Retail Center                                                             
Ft. Worth, TX                                                             
                                                                          
Plymouth Meeting                      702     69,386      70,088        13,474       02/66        N/A          Note 9 
Retail Center                                                             
Montgomery County, PA                                                     
                                                                          
Echelon Mall                        6,160     63,317      69,477        12,888       09/70        N/A          Note 9 
Retail Center                                                            
Voorhees, NJ                                                             
                                                                          
Harborplace                            --     58,147      58,147        12,456       07/80        N/A          Note 9 
Retail Center                                                            
Baltimore, MD                                                            
                                                                          
Perimeter Mall                         --     50,051      50,051         7,597       08/71        N/A          Note 9 
Retail Center                                                            
Atlanta, GA                                                              
                                                                          
Blue Cross & Blue Shield            1,000     44,756      45,756        10,142       07/89        N/A          Note 9 
Building I
Office Building
Baltimore, MD
</TABLE>

                                     IV-22
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                     Costs capitalized subsequent  
                                          Initial cost to Company          to acquisition          
                                        ---------------------------  ----------------------------  
                                                                                                   
                                                       Buildings                                   
                                                          and                                      
                                 Encum-                 Improve        Improve       Carrying      
           Description          brances      Land     ments(Note 3)     ments         costs        
           -----------          --------  ----------  -------------  ------------  ------------    
<S>                             <C>       <C>         <C>            <C>           <C>             
3800 Howard Hughes Parkway       $39,222      $3,622      $38,438         $ 1,806    $       --    
Office Building                                                                                    
Las Vegas, NV                                                                                      
                                                                                                   
White Marsh                       41,147       4,390           --          33,549            --    
Retail Center                                                                                      
Baltimore, MD                                                                                      
                                                                                                   
Exton Square                      14,762       1,408           --          34,220            --    
Retail Center                                                                                      
Exton, PA                                                                                          
                                                                                                   
The Jacksonville Landing          12,911          --           --          33,609            --    
Retail Center                                                                                      
Jacksonville, FL                                                                                   
                                                                                                   
Tampa Bay Center                  35,714         920           --          31,391            --    
Retail Center                                                                                      
Tampa, FL                                                                                          
                                                                                                   
Village of Cross Keys                 --         925           --          31,319            --    
Mixed-Use project                                                                                  
Baltimore, MD                                                                                      
                                                                                                   
North Star                            --         168           --          30,629            --    
Retail Center                                                                                      
San Antonio, TX                                                                                    
                                                                                                   
Willowbrook                       38,435         853           --          29,302            --    
Retail Center                                                                                      
Wayne, NJ                                                                                          
                                                                                                   
3773 Howard Hughes Parkway        22,406       1,738       22,625           3,338            --    
Office Building                                                                                    
Las Vegas, NV                                                                                      
                                                                                                   
Two Owings Mills                  18,174       1,000           --          25,865            --
Corporate Center
Office Building
Baltimore, MD
<CAPTION>
                                        Gross amount at which carried
                                             at close of period
                                      ----------------------------------
                                                                                                              Life on
                                            Buildings               Accumulated     Date of                 which depre-
                                               and                  depreciation   completion            ciation in latest 
                                             Improve                    and            of         Date     income state-
           Description              Land      ments       Total     amortization  construction  acquired  ment is computed
           -----------             -------  ---------     -----     ------------  ------------  --------  ----------------
<S>                                <C>      <C>           <C>       <C>           <C>           <C>       <C>
3800 Howard Hughes Parkway          $3,622    $40,244   $  43,866    $   3,795       11/86        06/96        Note 9
Office Building                                                     
Las Vegas, NV                                                       
                                                                          
White Marsh                          4,390     33,549      37,939        9,062       08/81         N/A         Note 9
Retail Center                                                                                                        
Baltimore, MD                                                                                                        
                                                                                                                     
Exton Square                         1,408     34,220      35,628        9,850       03/73         N/A         Note 9
Retail Center                                                                                                        
Exton, PA                                                                                                            
                                                                                                                     
The Jacksonville Landing                --     33,609      33,609       11,663       06/87         N/A         Note 9
Retail Center                                                                                                        
Jacksonville, FL                                                                                                     
                                                                                                                     
Tampa Bay Center                       920     31,391      32,311       10,534       08/79         N/A         Note 9
Retail Center                                                                                                        
Tampa, FL                                                                                                            
                                                                                                                     
Village of Cross Keys                  925     31,319      32,244       10,786       09/65         N/A         Note 9
Mixed-Use project                                                                                                    
Baltimore, MD                                                                                                        
                                                                                                                     
North Star                             168     30,629      30,797        8,740       09/60         N/A         Note 9
Retail Center                                                                                                        
San Antonio, TX                                                                                                      
                                                                                                                     
Willowbrook                            853     29,302      30,155        7,301       09/69         N/A         Note 9
Retail Center                                                                                                                       

Wayne, NJ                                                                                                                           

                                                                                                                                    

3773 Howard Hughes Parkway           1,738     25,963      27,701        1,669       11/95        6/96         Note 9               

Office Building                                                                                                                     

Las Vegas, NV                                                                                                                       

                                                                                                                                    

Two Owings Mills                     1,000     25,865      26,865        6,466       09/87         N/A         Note 9
Corporate Center
Office Building
Baltimore, MD
</TABLE>

                                     IV-23
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                    Costs capitalized subsequent  
                                         Initial cost to Company          to acquisition          
                                       --------------------------- ------------------------------ 
                                                                                                  
                                                     Buildings                                    
                                                        and                                       
                                Encum-                Improve         Improve       Carrying      
           Description          brances    Land     ments(Note 3)      ments         costs        
           -----------          -------  ---------  -------------   ------------  ------------    
<S>                             <C>      <C>        <C>             <C>           <C>             
The Gallery at Market East      $    --     $   --       $    --         $24,166     $      --    
Retail Center                                                                                     
Philadelphia, PA                                                                                  
                                                                                                  
Senate Plaza                     16,067      3,488        20,379              --            --    
Office Building                                                                                   
Camp Hill, PA.                                                                                    
                                                                                                  
3960 Howard Hughes Parkway           --        800            --          22,364            --    
Office Building                                                                                   
Las Vegas, NV                                                                                     
                                                                                                  
Franklin Park                    25,498        653            --          21,097            --    
Retail Center                                                                                     
Toledo, OH                                                                                        
                                                                                                  
Hunt Valley 75                   17,265      6,659        14,187             410            --    
Office Building                                                                                   
Hunt Valley, MD.                                                                                  
                                                                                                  
The Grand Avenue                     --         --            --          21,218            --    
Retail Center                                                                                     
Milwaukee, WI                                                                                     
                                                                                                  
Mondawmin Mall                    4,151      2,251            --          18,327            --    
Retail Center                                                                                     
Baltimore, MD                                                                                     
                                                                                                  
Highland Mall                     5,426         13            --          18,238            --    
Retail Center                                                                                     
Austin, TX                                                                                        
                                                                                                  
One Owings Mills                 11,385        650            --          17,045            --    
Corporate Center                                                                                  
Office Building                                                                                   
Baltimore, MD                                                                                     
                                                                                                  
Blue Cross & Blue Shield         11,453      1,000            --          16,591            --
Building II
Office Building
Baltimore, MD
<CAPTION>
                                       Gross amount at which carried
                                             at close of period
                                    -----------------------------------
                                                                                                                Life on
                                           Buildings                  Accumulated     Date of                 which depre-
                                              and                     depreciation   completion            ciation in latest
                                            Improve                       and            of         Date     income state-
           Description              Land     ments        Total       amortization  construction  acquired  ment is computed
           -----------             ------  ---------      -----       ------------  ------------  --------  ----------------
<S>                                <C>     <C>            <C>         <C>           <C>           <C>       <C>
The Gallery at Market East         $   --    $24,166    $    24,166     $   7,393      08/77         N/A         Note 9
Retail Center                                                                                                                  
Philadelphia, PA                                                                                                               
                                                                                                                               
Senate Plaza                        3,488     20,379         23,867            42      07/72        12/98        Note 9
Office Building                                                                                                                
Camp Hill, PA.                                                                                                                 
                                                                                                                               
3960 Howard Hughes Parkway            800     22,364         23,164           354      4/98         6/96         Note 9            
Office Building                                                                                                                    
Las Vegas, NV                                                                                                                      
                                                                                                                                   
Franklin Park                         653     21,097         21,750         5,306      07/71         N/A         Note 9            
Retail Center                                                                                                                      
Toledo, OH                                                                                                                         
                                                                                                                                   
Hunt Valley 75                      6,659     14,597         21,256            54      07/84        12/98        Note 9            
Office Building                                                                                                                    
Hunt Valley, MD.                                                                                                                   
                                                                                                                                   
The Grand Avenue                       --     21,218         21,218        10,824      08/82         N/A         Note 9            
Retail Center                                                                                                                      
Milwaukee, WI                                                                                                                      
                                                                                                                                   
Mondawmin Mall                      2,251     18,327         20,578         7,425      01/78         N/A         Note 9            
Retail Center                                                                                                                      
Baltimore, MD                                                                                                                      
                                                                                                                                   
Highland Mall                          13     18,238         18,251         6,236      08/71         N/A         Note 9            
Retail Center                                                                                                                      
Austin, TX                                                                                                                         
                                                                                                                                   
One Owings Mills                      650     17,045         17,695         6,232      11/88         N/A         Note 9            
Corporate Center                                                                                                                   
Office Building                                                                                                                    
Baltimore, MD                                                                                                                      
                                                                                                                                   
Blue Cross & Blue Shield            1,000     16,591         17,591         3,379      08/90         N/A         Note 9             

Building II
Office Building
Baltimore, MD
</TABLE>

                                     IV-24
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES 

              Real Estate and Accumulated Depreciation (note 1) 


                               December 31, 1998

                                (in thousands) 

<TABLE>
<CAPTION>
                                                                  Costs capitalized subsequent   Gross amount at which carried
                                        Initial cost to Company          to acquisition                at close of period
                                        -----------------------   ----------------------------   -----------------------------
                                                                                                                               
                                                    Buildings                                              Buildings           
                                                       and                                                    and              
                               Encum-                Improve        Improve        Carrying                 Improve            
     Description              brances     Land    ments(Note 3)      ments          costs         Land       ments    Total    
     -----------              -------     ----    -------------      -----          -----         ----       -----    -----
<S>                           <C>        <C>        <C>            <C>           <C>             <C>       <C>       <C> 
3753 / 3763 Howard Hughes                                                                                                     
 Parkway                      $10,985    $3,844      $12,018       $   687       $      --       $3,844    $12,705   $ 16,549  
Office Building                                                                                                                
Las Vegas, NV                                                                                                                  
                                                                                                                               
Centerpointe                    7,006     4,012       11,302            --              --        4,012     11,302     15,314  
Office Building                                                                                                                
Hunt Valley, MD                                                                                                                
                                                                                                                               
Canyon Center                  12,597     2,081        7,161         5,391              --        2,081     12,552     14,633  
Office Building                                                                                                                
Las Vegas, NV                                                                                                                  
                                                                                                                               
Midtown Square                     --        --           --        14,620              --           --     14,620     14,620  
Retail Center                                                                                                                  
Charlotte, NC                                                                                                                  
                                                                                                                               
3930 Howard Hughes Parkway      6,750     3,108       11,279            27              --        3,108     11,306     14,414  
Office Building                                                                                                                
Las Vegas, NV                                                                                                                  
                                                                                                                               
Shilling Plaza South            6,206     5,437        7,402            14              --        5,437      7,416     12,853  
Office Building                                                                                                                
Hunt Valley, MD                                                                                                                
                                                                                                                               
3980 Howard Hughes             10,586       879        5,583         6,113              --          879     11,696     12,575  
Office Building                                                                                                                
Las Vegas, NV                                                                                                                  
                                                                                                                               
Crossing Business               8,509     2,842        1,416         8,287              --        2,842      9,703     12,545  
Center Phase III                                                                                                               
Office Building                                                                                                                
Las Vegas,  NV                                                                                                                 
                                                                                                                               
Shilling Plaza North            7,932     4,024        8,059            --              --        4,024      8,059     12,083  
Office Building                                                                                
Hunt Valley, MD                                                                                
                                   
Canyon Center                      --     1,723           --        10,129              --        1,723     10,129     11,852 
Office Building
Las Vegas, NV

<CAPTION> 
                                                                                              Life on       
                                          Accumulated        Date of                        which depre-     
                                         depreciation      completion                     ciation in latest  
                                              and             of               Date         income state-          
     Description                         amortization     construction      acquired      ment is computed     
     -----------                         ------------     ------------      --------      ----------------
<S>                                      <C>              <C>               <C>           <C>    
3753 / 3763 Howard Hughes             
 Parkway                                  $ 1,003            10/91            6/96             Note 9
Office Building              
Las Vegas, NV                
                             
Centerpointe                                   24            07/87           12/98             Note 9                
Office Building              
Hunt Valley, MD              
                             
Canyon Center                                 638            03/98           06/96             Note 9
Office Building              
Las Vegas, NV                
                             
Midtown Square                             10,396            10/59             N/A             Note 9 
Retail Center                
Charlotte, NC                
                             
3930 Howard Hughes Parkway                  1,196            12/94           06/96             Note 9               
Office Building              
Las Vegas, NV                
                             
Shilling Plaza South                           15            07/87           12/98             Note 9                
Office Building              
Hunt Valley, MD              
                             
3980 Howard Hughes                            526            04/97           06/96             Note 9
Office Building              
Las Vegas, NV                
                             
Crossing Business                             798            09/96           06/96             Note 9
Center Phase III             
Office Building              
Las Vegas,  NV               
                             
Shilling Plaza North                           17            02/80           12/98             Note 9
Office Building              
Hunt Valley, MD              
                             
Canyon Center                                 133            06/98           06/96             Note 9          
Office Building
Las Vegas, NV
</TABLE>

                                     IV-25
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                   Costs capitalized subsequent  Gross amount at which carried
                                          Initial cost to Company          to acquisition               at close of period
                                          -----------------------  ----------------------------  -----------------------------
                                                      Buildings                                            Buildings       
                                                         and                                                  and          
                                                                                                                           
                                Encum-                 Improve        Improve       Carrying                Improve        
         Description            brances     Land     ments(Note 3)     ments         costs         Land      ments      Total 
         -----------            -------     ----     -------------    -------       --------      -----     -------     -----  
<S>                             <C>       <C>       <C>            <C>           <C>             <C>      <C>        <C> 
Riverspark 2/Building 2         $ 1,504   $ 3,358   $     7,955    $         --  $        --     $ 3,358  $   7,955  $ 11,313
Office Building/Industrial                          
Columbia, MD                                        
                                                    
Trails Village Center             9,948     3,082            --           6,804           --       3,082      6,804     9,886
Community Retail Center                                                                  
Las Vegas, NV                                       

Crossing Business                 7,679     1,326         7,951             507           --       1,326      8,458     9,784
Center Phase I                                                                            
Office Building                                     
Las Vegas, NV                                       
                                 
Inglewood Office II               6,279     2,261         7,304              --            --      2,261      7,304     9,565
Office Building                                         
Landover, MD                                            
                                 
3770 Howard Hughes Parkway        5,530       691         8,010             484            --        691      8,494     9,185
Office Building                                     
Las Vegas, NV                                       
                                 
201 International Circle          4,097     5,168         3,763             172            --      5,168      3,935     9,103
Office Building                                     
Hunt Valley, MD                                     
                                 
Metro Plaza                         423       202            --           8,240            --        202      8,240     8,442     
Retail Center                                           
Baltimore, MD                                       
                                 
Equinox @ CBC                     7,052     1,257           398           6,631            --      1,257      7,029     8,286
Office Building                                     
Las Vegas, NV                                       
                                 
Montgomery Ward                   7,679       607         7,213              37            --        607      7,250     7,857
Office Building / Industrial                        
Las Vegas, NV                                       
                                 
Inglewood Office Center I         5,145     1,940         5,867              --            --      1,940      5,867     7,807 
Office Building
Landover, MD

<CAPTION> 

                                                                                            Life on     
                                     Accumulated         Date of                        which depre-  
                                     depreciation       completion                    ciation in latest     
                                         and                of             Date         income state-  
       Description                   amortization      construction      acquired      ment is computed
       -----------                   ------------      ------------      --------      ---------------- 
<S>                                  <C>               <C>               <C>           <C> 
Riverspark 2/Building 2              $         17         07/87            12/98            Note 9
Office Building/Industrial       
Columbia, MD                   
                               
Trails Village Center                         108         05/98            06/96            Note 9
Community Retail Center        
Las Vegas, NV                  
                               
Crossing Business                             591         12/94            06/96            Note 9
Center Phase I                 
Office Building                
Las Vegas, NV                  
                               
Inglewood Office II                            15         07/26            12/98            Note 9
Office Building                
Landover, MD                   
                               
3770 Howard Hughes Parkway                    901         10/90            06/96            Note 9
Office Building                
Las Vegas, NV                  
                               
201 International Circle                       20         07/82            12/98            Note 9     
Office Building                
Hunt Valley, MD                
                               
Metro Plaza                                 3,696          N/A             12/82            Note 9
Retail Center                  
Baltimore, MD                  
                               
Equinox @ CBC                                 233         12/97            06/96            Note 9
Office Building                
Las Vegas, NV                  
                               
Montgomery Ward                               519         10/95            06/96            Note 9
Office Building / Industrial   
Las Vegas, NV                  
                               
Inglewood Office Center I                      12         07/82            12/98            Note 9
Office Building
Landover, MD
</TABLE>

                                     IV-26
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                         Costs capitalized      Gross amount at which carried
                                         Initial cost to Company     subsequent to acquisition        at close of period
                                         -----------------------     --------------------------   -------------------------
                                                     Buildings                                             Buildings       
                                                        and                                                   and          
                                Encum-                Improve          Improve       Carrying               Improve        
        Description             brances    Land     ments(Note 3)       ments         costs         Land     ments    Total
        -----------             -------  ---------  -------------    ------------  ------------    ------  ---------  -----
<S>                             <C>      <C>        <C>              <C>           <C>             <C>     <C>        <C> 
Crossing Business                $5,583     $  357        $7,097           $   --   $        --    $  357     $7,097  $7,454
Center Phase II                                                                              
Office Building   
Las Vegas, NV     
                  
840 Grier                         6,096        963         1,430            4,854            --       963      6,284   7,247 
Office Building / Industrial
Las Vegas, NV
                                                                                                                             
Ambassador Center                 4,377      1,385         5,282               --            --     1,385      5,282   6,667 
Office Building
Woodlawn, MD
                                                                                                                             
Raytheon                             --        422         6,133               --            --       422      6,133   6,555 
Office Building / Industrial
Las Vegas, NV
                                                                                                                             
Inglewood Tech V                  4,295      2,889         3,654               --            --     2,889      3,654   6,543 
Industrial Building
Landover, MD
                                                                                                                             
First National Bank Plaza         5,117         --            --            6,330            --        --      6,330   6,330 
Office Building
Mt. Prospect, IL
                                                                                                                             
Plaza East                        4,604        911         5,299               --            --       911      5,299   6,210 
Office Building / Industrial
Las Vegas, NV
                                  
420 Pilot                         4,102      1,066          (140)           5,242            --     1,066      5,102   6,168  
Office Building / Industrial
Las Vegas, NV
                                 
USA Group                         7,000      1,196         4,880               --            --     1,196      4,880   6,076
Office Building / Industrial
Las Vegas, NV
                                                                                                                             
Pulaski 11                        3,909      1,099         4,708               --            --     1,099      4,708   5,807 
Industrial Building
Baltimore, MD
<CAPTION> 
          
                                                                                     Life on
                                 Accumulated        Date of                        which depre-
                                 depreciation      completion                   ciation in latest
                                    and               of             Date        income state-
        Description              amortization     construction      acquired     ment is computed
        -----------              -----------     ------------     ---------     -----------------
<S>                              <C>             <C>              <C>           <C> 
Crossing Business                $       456            12/95         06/96     Note 9   
Center Phase II                            
Office Building                            
Las Vegas, NV                              
                                           
840 Grier                                300            03/97         06/96     Note 9
Office Building / Industrial               
Las Vegas, NV                              
                                           
Ambassador Center                         11            07/85         12/98     Note 9 
Office Building                            
Woodlawn, MD    

Raytheon                                 398            11/92         06/96     Note 9
Office Building / Industrial                                                      
Las Vegas, NV                                                                     
                                                                                  
Inglewood Tech V                           8            07/86         12/98     Note 9
Industrial Building                                                               
Landover, MD                                                                    
                                                                                  
First National Bank Plaza              1,913            07/81          N/A      Note 9
Office Building                                                                   
Mt. Prospect, IL                                                                
                                                                                  
Plaza East                               395            12/93         06/96     Note 9
Office Building / Industrial                                                    
Las Vegas, NV                                                                     

420 Pilot                                403            09/96         06/96     Note 9
Office Building / Industrial                                                      
Las Vegas, NV                                                                     
                                                                                  
USA Group                                  8            11/98         06/96     Note 9
Office Building / Industrial                                                      
Las Vegas, NV                                                                     
                                                                                  
Pulaski 11                                10            07/69         12/98     Note 9
Industrial Building
Baltimore, MD
</TABLE> 

                                    IV-27 
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                       Costs capitalized            Gross amount at which 
                                         Initial cost to Company    subsequent to acquisition     carried at close of period
                                         -----------------------    -------------------------     --------------------------
                                                     Buildings                                            Buildings       
                                                        and                                                  and          
                                Encum-                Improve         Improve       Carrying               Improve        
Description                     brances    Land     ments(Note 3)      ments         costs         Land     ments    Total
----------------------------    -------  ---------  -------------   ------------  ------------    ------  ---------  ------  
<S>                             <C>      <C>        <C>             <C>           <C>             <C>     <C>        <C> 
Rutherford 5                    $ 2,280  $     614  $      5,123    $         --   $        --    $  614  $   5,123  $5,737
Industrial Building 
Woodlawn, MD         

                                
Rutherford 60                     3,834      1,250         4,445              --            --     1,250      4,445   5,695 
Industrial Building
Woodlawn, MD
                                  
Plaza West                        4,395        195         5,360             103                     195      5,463   5,658   
Office Building / Industrial
Las Vegas, NV
                                
980 Kelley Johnson                3,278        815         4,772              --            --       815      4,772   5,587
Office Building / Industrial
Las Vegas, NV
                                                                                                                            
Canyon Business Center               --      1,188            --           4,432            --     1,188      4,432   5,620 
 Phase V
Office Building / Industrial
Las Vegas, NV
                                                                                                                            
975 Kelley Johnson                3,458        378         5,211              --            --       378      5,211   5,589 
Office Building / Industrial
Las Vegas, NV
                                  
Inglewood Tech IV                 1,618      2,222         3,365              --            --     2,222      3,365   5,587 
Industrial Building                                                                                                         
Landover, MD                                                                                                                
                                                                                                                            
Riverspark Building  A            3,620      1,461         4,053              --            --     1,461      4,053   5,514 
Industrial Building                                                                                                         
Columbia, MD                                                                                                                
                                                                                                                            
Hunt Valley 49                    3,589      1,575         3,892              --            --     1,575      3,892   5,467 
Industrial Building                                                                                                         
Hunt Valley, MD                                                                                                             
                                                                                                                            
3960/3980 Parking Garage             --        576            --           4,678            --       576      4,678   5,254  
Parking Garage
Las Vegas, NV

<CAPTION> 

                                                                                         Life on
                                   Accumulated         Date of                         which depre-
                                   depreciation       completion                    ciation in latest
                                       and                of             Date         income state-
Description                        amortization      construction      acquired      ment is computed
----------------------------       ------------      ------------      --------      ----------------
<S>                                <C>                <C>              <C>            <C> 
Rutherford 5                             11             07/72             12/98           Note 9
Industrial Building           
Woodlawn, MD                  
                              
Rutherford 60                             9             07/72              12/98          Note 9
Industrial Building           
Woodlawn, MD                  
                              
Plaza West                              388             11/95              06/96          Note 9
Office Building / Industrial  
Las Vegas, NV                 
                              
980 Kelley Johnson                      358             05/92              06/96          Note 9
Office Building / Industrial  
Las Vegas, NV                 
                              
Canyon Business Center                   79             05/98              06/96          Note 9
 Phase V                      
Office Building / Industrial  
Las Vegas, NV                 
                              
975 Kelley Johnson                      399             11/90              06/96          Note 9
Office Building / Industrial  
Las Vegas, NV                 
                              
Inglewood Tech IV                         7             07/86              12/98          Note 9
Industrial Building           
Landover, MD                  
                              
Riverspark Building  A                    8             09/85              12/98          Note 9
Industrial Building           
Columbia, MD                  
                              
Hunt Valley 49                            8             02/82              12/98          Note 9
Industrial Building           
Hunt Valley, MD               
                              
3960/3980 Parking Garage                198             05/97              06/97          Note 9
Parking Garage
Las Vegas, NV
</TABLE>

                                     IV-28
<PAGE>
 





                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)
<TABLE>
<CAPTION>
                                                                       Costs capitalized subsequent          
                                            Initial cost to Company          to acquisition                  
                                         ----------------------------- -----------------------------
                                                         Buildings                       
                                                            and                               
                                  Encum-                  Improve         Improve      Carrying              
          Description            brances       Land     ments(Note 3)      ments         costs               Land  
          -----------            -------       ----     -------------      -----         -----               ----
<S>                            <C>            <C>        <C>              <C>          <C>                <C> 
Hunt Valley 36                  $    3,409    $  1,239   $    3,954       $       --           --          $  1,239 
Industrial Building                                                                                          
Hunt Valley, MD                                                                                              
                                
950 Pilot                            2,167         769           --            4,185           --               769 
OfficeBuilding/Industrial                                                                                    
Las Vegas, NV                                                                                                
                                
731 Pilot                            4,016         862           --            3,999           --               862 
OfficeBuilding/Industrial                                                                                    
Las Vegas, NV                                                                                                
                                
711 Pilot                            3,192         463           --            4,362           --               463 
OfficeBuilding/Industrial                                                                                    
Las Vegas, NV                                                                                                
                                     
Rutherford 46                        3,215       1,079        3,697               --           --             1,079
Industrial Building                                                                                          
Woodlawn, MD                                                                                                 
                                                                                                             
Other properties and related                                                                                 
investments less than              
5% of total                        112,229      59,280       76,778           98,998           --            59,280        
                             ----------------------------------------------------------------------------------------
                                                                                                             
Total Operating Properties       2,905,340     488,114    1,388,375        2,842,238           --           488,114
                            ----------------------------------------------------------------------------------------

<CAPTION> 

                           Gross amount at which carried
                                 at close of period
                           ----------------------------
                                                                                                                 Life on
                                   Buildings               Accumulated       Date of                           which depre-
                                     and                   depreciation     completion                       ciation in
                                   Improve                    and              of               Date          income state-
          Description              ments       Total       amortization    construction       acquired      ment is computed
----------------------------        -----      -----       ------------    ------------       --------      ---------------- 
<S>                          <C>             <C>             <C>           <C>              <C>                <C>      
Hunt Valley 36               $    3,954      $ 5,193          $      8         02/76         12/98              Note 9
Industrial Building                                                                                 
Hunt Valley, MD              
                                  
950 Pilot                         4,185        4,954               364         08/90         06/96              Note 9
OfficeBuilding/Industrial    
Las Vegas, NV                
                                  
731 Pilot                         3,999        4,861               245         10/95         06/96              Note 9
OfficeBuilding/Industrial    
Las Vegas, NV                
                                
711 Pilot                         4,362        4,825               229         11/95         06/96              Note 9
OfficeBuilding/Industrial          
Las Vegas, NV                
                                 
Rutherford 46                     3,697        4,776                 8         02/88         12/98              Note 9
Industrial Building          
Woodlawn, MD                 
                             
Other properties and related 
investments less than          
5% of total                     175,776      235,056            18,832          
                             ---------------------------------------------             
                             
Total Operating Properties    4,230,613    4,718,727           578,309
                            -----------------------------------------------                    
</TABLE> 

                                     IV-29
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                       Costs capitalized subsequent  Gross amount at which carried
                                          Initial cost to Company       to acquisition                    at close of period
                                          --------------------------  ------------------------------    ---------------------------
                                                              Buildings          
                                                                 and
                                Encum-                         Improve        Improve       Carrying        
          Description           Brances           Land       ments(Note 3)     ments          costs         Land
          -----------           -------           ----       -------------     -----          -----         -----
<S>                           <C>             <C>             <C>             <C>           <C>            <C> 
Properties in Development:
 
                                                                                                                         
                                                  
Exton Square Expansion        $      --       $  3,340       $     --        $    42,643   $     --         $   3, 340
Expansion of retail center
Exton, PA
 
                                                                                                                             
The Fashion Show Expansion           --         24,796             --                 --         --             24,796 
Expansion of retail center
Las Vegas, NV
 
                                                                                                                         
Pioneer Place Expansion              --          2,813             --             15,971         --              2,813
Expansion of mixed-use project
Portland, OR
 
                                                                                                               
Arizona Center                       --             --             --             12,992         --                 --
Developed/developable land                                  
under master lease
Phoenix, AZ
 
                                         
Rouse Commercial Properties, Inc     --          6,955             --                 --         --              6,955          
Developed/developable land                 
Primarily Baltimore and Landover, MD       
 
                                                                                                                         
Owings Mills Expansion               --          4,665             --              1,890         --              4,665   
Expansion of retail center
Baltimore County, MD
 
                                                                                                                             
Plymouth Meeting Expansion           --             --             --              6,225         --                 --    
Expansion of retail center
Montgomery County, PA         

<CAPTION> 

                                     Gross amount at which carried
                                           at close of period
                                     ----------------------------
                                                                                                                      Life on
                                   Buildings                    Accumulated       Date of                           which depre-
                                      and                       depreciation     completion                       ciation in late
                                   Improve                           and              of             Date          income state-
          Description               ments          Total       amortization      construction       acquired    ment is computed
          -----------               -----          -----       ------------     ------------        --------    ---------------- 
<S>                             <C>                <C>         <C>              <C>                 <C>         <C> 
Properties in Development:       
 
                                         
                                         
Exton Square Expansion          $   42, 643        $   45,983  $      --         N/A                N/A            N/A            
Expansion of retail center
Exton, PAN                    
 
                              
The Fashion Show Expansion               --            24,796            --      N/A                N/A            N/A  
Expansion of retail center
Las Vegas, NV
 
                                      
Pioneer Place Expansion              15,971            18,784            --      N/A                N/A            N/A   
Expansion of mixed-use project
Portland, OR
 
                                         
Arizona Center                       12,992            12,992            --      N/A                N/A            N/A   
Developed/developable land
under master lease
Phoenix, AZ
 
                                      
Rouse Commercial Properties,             --             6,955            --      N/A                N/A            N/A   
 Inc
Developed/developable land
Primarily Baltimore and Landover, MD
 
                                         
Owings Mills Expansion                1,890             6,555            --      N/A                N/A            N/A   
Expansion of retail center
Baltimore County, MD
 
                                                       
Plymouth Meeting Expansion            6,225             6,225            --      N/A                N/A            N/A   
Expansion of retail center
Montgomery County, PA                    
</TABLE> 

                                     IV-30
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                              Costs capitalized        Gross amount   
                                           Initial cost           subsequent          at which carried             
                                            to Company          to acquisition       at close of period 
                                     -----------------------  --------------------  ------------------------
                                                   Buildings                              Buildings           Accumulated 
                                                      and                                    and              Depreciation
                                 Encum-             Improve   Improve    Carrying          Improve                and     
        Description              brances   Land      ments     ments      costs      Land   ments     Total   amortization
        -----------              -------   ------   ---------  ------   ----------  ------ --------- -------  ------------
<S>                              <C>      <C>      <C>        <C>       <C>         <C>    <C>       <C>      <C>  
Moorestown Mall Expansion        $   --    $  --   $     --  $  4,861    $      --  $   --  $  4,861 $ 4,861  $         --
Expansion of retail center                                                                                                
Morrestown, NJ                                                                                                            
                                                                                                                          
Perimeter Mall Expansion             --       --         --     4,857           --      --     4,857   4,857            --
Expansion of retail center                                                                                                
Atlanta, GA                                                                                                               
                                                                                                                          
Oviedo Marketplace Expansion         --       --         --     3,974           --      --     3,974   3,974            --
Expansion of retail center                                                                                                
Orlando, FL                                                                                                               
                                                                                                                          
Oakwood Center Expansion             --    1,188         --     2,620           --   1,188     2,620   3,808            --
Expansion of retail center                                                                                                
Gretna, LA                                                                                                                
                                                                                                                          
                                                                                                                          
Mall St. Matthews Expansion          --       --         --     2,969           --      --     2,969   2,969            --
Expansion of retail center                                                                                                
Louisville, KY                                                                                                            
                                                                                                                          
                                                                                                                          
Airport Center Bldgs 40 & 51         --       --         --       816           --      --       816     816            --
Office Building in development                                                                                             
Las Vegas, NV                                                                                                              
                                                                                                                           
                                                                                                                           
Airport Center Bldg 50               --       --         --       480           --      --       480     480            -- 
Office Building in development                                                                                             
Las Vegas, NV                                                                                                              
                                                                                                                           
                                                                                                                           
3993 Howard Hughes Parkway           --       --         --       776           --      --       776     776            -- 
Office Building in development                                                                                            
Las Vegas, NV                                                                                                             

<CAPTION> 
                                                               Life on          
                                  Date of                 which depreciation    
                                completion                    in latest                                  
                                   of            Date       income state-        
        Description            construction    acquired    ment is computed     
        -----------            ------------    --------   ------------------     
<S>                            <C>             <C>        <C> 
Moorestown Mall Expansion          N/A           N/A            N/A                                       
Expansion of retail center    
Morrestown, NJ                                                                                      
                                   
Perimeter Mall Expansion           N/A           N/A            N/A                         
Expansion of retail center                                                                          
Atlanta, GA                                                                                         
                                   
Oviedo Marketplace Expansion       N/A           N/A            N/A           
Expansion of retail center                                                                          
Orlando, FL                                                                                         
                                   
Oakwood Center Expansion           N/A           N/A            N/A                                               
Expansion of retail center                                                                          
Gretna, LA                                                                                          
                                                                                                    
Mall St. Matthews Expansion        N/A           N/A            N/A                                                 
Expansion of retail center                                                                          
Louisville, KY                                                                                      
                                                                                                    
Airport Center Bldgs 40 & 51       N/A          06/96            N/A                                                          
Office Building in development                                                                      
Las Vegas, NV                                                                                       
                                             
Airport Center Bldg 50             N/A          06/96            N/A 
Office Building in development                        
Las Vegas, NV                                         
                                                      
3993 Howard Hughes Parkway         N/A          06/96            N/A  
Office Building in development                                   
Las Vegas, NV                                                    
</TABLE> 
                                            
                                    IV - 31
<PAGE>
 
                      THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)


                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                   Costs capitalized                                          
                                                                       subsequent           Gross amount at which carried     
                                      Initial cost to Company        to acquisition              at close of period           
                                      --------------------------  -----------------------   -----------------------------     
                                                        Buildings                                      Buildings               
                                                          and                                             and                  
                                    Encum-              Improve      Improve    Carrying                Improve                
        Description                 brances    Land      ments        ments      costs        Land       ments        Total    
        -----------                --------  --------  ----------  ----------- ----------   --------- ----------  -----------
<S>                                <C>       <C>       <C>         <C>         <C>          <C>       <C>         <C> 
Pre-construction costs -            $    -- $      -- $       --   $    30,098 $       --    $     -- $   30,098  $   30,098  
various projects                                                                                                              
                                                                                                                              

Pre-construction reserve                 --        --         --       (15,908)        --          --    (15,908)    (15,908) 

                                                                                                                              
Other projects less than 5%              --     6,987         --         1,352         --       6,987      1,352       8,339  
 of total                                                                                                                     
                                   ------------------------------  ----------------------   --------------------------------- 
                                                                                                                              
Total Properties                                                                                                              
in Development                           --    50,744         --       116,616         --      50,744    116,616     167,360  
                                   ------------------------------  ----------------------   ---------------------------------
                                                                                                                              
Properties held for sale :                                                                                                    
                                                                                                                              
Valley Fair Mall                     40,000    39,504    109,888           (55)        --      39,504    109,833     149,337   
Retail Center
San Jose, CA
                                       
Westdale Mall                            --        --     13,664           306         --          --     13,970      13,970
Investment in unconsolidated real 
 estate venture
Cedar Rapids, IO
 
Other properties held for
 sale,
less than 5% of total                 2,984     1,003      1,608         (24)          --       1,003      1,584       2,587 
                            -------------------------------------  ----------------------   ---------------------------------
                                                                                                                             
                                     42,984    40,507    125,160         227           --      40,507    125,387     165,894 
                            -------------------------------------  ----------------------   ---------------------------------
                                                                                                                             
Total Property                   $2,948,324  $579,365 $1,513,535  $2,959,081   $       --  $  579,365 $4,472,616  $5,051,981 
                            =====================================  ======================   =================================

<CAPTION> 
                                                                                                           Life on              
                                                      Accumulated                                     which depreciation        
                                                     depreciation        Date of                          in latest             
                                                         and          completion of         Date       income statement         
      Description                                    amortization     construction        acquired       is computed            
      -----------                                  ---------------   --------------    -------------  -------------------       
<S>                                                <C>               <C>               <C>            <C>   
Pre-construction costs -                                 N/A              N/A              N/A               N/A                
various projects                                                                                                                
                                                                                                                                
                                                                                                                                
Pre-construction reserve                                 N/A              N/A              N/A               N/A                
                                                                                                                                
                                                                                                                                
Other projects less than 5%                              N/A              N/A              N/A               N/A                
 of total                                                                                                                       
                                                                                                                                
                                                                                                                                
Total Properties                                                                                                                
in Development                                                                                                                  
                                                                                                                                
                                                                                                                                
Properties held for sale :                                                                                                      
                                                                                                                                
                                                                                                                                
Valley Fair Mall                                          --             06/86            07/98              N/A                 
Retail Center                   
San Jose, CA                    
                                
Westdale Mall                                             --             07/79            10/98              N/A
Investment in unconsolidated real estate                                                                    
 venture                                                                                                    
Cedar Rapids, IO                                                                                            
                                                                                                            
Other properties held for                                                                                   
 sale,                                                                                                      
less than 5% of total                                     --                                                  
                                                   ---------------
                                                          --                                                             
                                                   ===============  
Total Property                                      $578,311                                                    
                                                   ===============
</TABLE> 
                                                 
                                    IV - 32
<PAGE>
 
                                                          Schedule III continued
                                                          ----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

Notes:
 
   (1)   Reference is made to notes 1, 4 and 7 to the consolidated financial
         statements.         

   (2)   The determination of these amounts is not practicable and, accordingly,
         they are included in improvements.
         
   (3)   Buildings and improvements include deferred costs of $106,388,000 at
         December 31, 1998.
         
   (4)   The changes in total cost of properties for the years ended December
         31, 1998, 1997 and 1996 are as follows (in thousands):
 
<TABLE> 
<CAPTION> 
                                                                   1998          1997          1996             
                                                             ----------    ----------    ----------             
         <S>                                                 <C>           <C>           <C>                    
         Balance at beginning of year                        $3,332,363    $3,691,600    $3,052,873             
         Additions, at cost                                     336,002       317,705       158,205             
         Cost of properties acquired                          1,593,062        84,743       602,944             
         Additions to land held for                                                                             
           development and sale                                     ---       134,447        48,474             
         Cost of land sales                                     (21,885)     (131,310)      (57,204)            
         Retirements, sales and other                                                                           
           dispositions                                        (185,861)     (114,435)      (85,167)            
         Property of subsidiaries in which a                                                                    
           majority voting interest was sold                                                                    
            to an affiliate                                         ---      (621,338)          ---             
            Additions to preconstruction reserve                 (1,700)       (2,800)       (2,700)            
            Provision for loss on operating properties              ---       (26,249)      (25,825)            
                                                             ----------    ----------    ----------             
         Balance at end of year                              $5,051,981    $3,332,363    $3,691,600             
                                                             ==========    ==========    ==========              
</TABLE> 

    (5)  Reference is made to the consolidated statements of cash flows for
         explanation of noncash consideration included in property additions.
         
    (6)  Reference is made to note 3 to the consolidated financial statements
         for explanation of transactions with affiliates.

                                     IV-33
<PAGE>
 
                                                          Schedule III continued
                                                          ----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998


Notes:
 
    (7)  The changes in accumulated depreciation and amortization for the years
         ended December 31, 1998, 1997 and 1996 are as follows (in thousands):
         
<TABLE> 
<CAPTION> 
                                                            1998        1997        1996    
                                                         ----------  ----------  ---------- 
         <S>                                             <C>         <C>         <C>        
         Balance at beginning of year                    $ 515,229   $ 552,201   $ 519,319  
           Depreciation and amortization                                                    
         charged to operations                              84,068      86,009      79,990  
           Retirements, sales and other, net               (20,986)    (50,814)    (47,108) 
           Accumulated depreciation on properties                                           
              of subsidiaries in which a majority                                           
              voting interest was sold to an                                                
              affiliate                                        ---     (72,167)        ---  
                                                         ---------   ---------   ---------  
         Balance at end of year                          $ 578,311   $ 515,229   $ 552,201  
                                                         =========   =========   =========   
</TABLE> 
 
    (8)  The aggregate cost of properties for Federal income tax purposes is
         approximately $4,579,728,000 at December 31, 1998.
         
    (9)  Reference is made to note 1(c) to the consolidated financial statements
         for information related to depreciation.
         
    (10) Reference is made to note 11 to the consolidated financial statements
         for information related to provisions for losses on real estate assets.

    (11) Certain amounts for prior years have been reclassified to conform to
         the presentation for 1998.

                                     IV-34
<PAGE>
 
                                                                     Schedule IV
 
                       THE ROUSE COMPANY AND SUBSIDIARIES

                         Mortgage Loans On Real Estate

                               December 31, 1998

                                 (in thousands)


<TABLE>
<CAPTION>
                                                                                                                    Principal amount
                                                                                                                        of loans
                                                                                                                       subject to
                                              Final                                                    Carrying        delinquent
                                          maturity date     Periodic                  Face amount     amount of       principal or
   Description (Note 1)    Interest rate     (Note 1)     payment terms  Prior leins  of mortgages    mortgages         interest
-------------------------  -------------  --------------  -------------  -----------  ------------  --------------  ---------------
<S>                        <C>            <C>             <C>            <C>          <C>           <C>             <C> 
Howard Research
   And Development
   Corporation and
   Subsidiaries               Note 2      Dec. 31, 2012      Note 1          N/A      $ 179,422     $ 179,422          None
 
Howard Hughes
   Properties, Inc.           Note 2      Dec. 31, 2012      Note 1          N/A        168,690       168,690          None
 
HRD Properties, Inc.
   and Subsidiaries           Note 3      Dec. 31, 2012      Note 1          N/A         14,055        14,055          None
                                                                                       --------      --------
 
                                                                                      $ 362,167     $ 362,167
                                                                                       ========      ========
</TABLE>

                                     IV-35
<PAGE>
 
                                                           Schedule IV continued


                       THE ROUSE COMPANY AND SUBSIDIARIES

                         MORTGAGE LOANS ON REAL ESTATE

                               December 31, 1998


Notes:
 
   (1)  The deed of trust notes receivable of the Company are secured by certain
        land and operating properties and general assignments of rents of the
        Real Estate Ventures owned by The Rouse Company Incentive Compensation
        Statutory Trust and The Rouse Company. These notes are due December 31,
        2012 and minimum principal payments, based on a thirty-year amortization
        schedule, are due quarterly. Specified principal payments are also
        required when land is released from the deed of trust; however, payments
        made due to partial releases reduce or offset the required quarterly
        payments.
        
   (2)  The notes bear interest at 12.25% through December 2000, and at the
        greater of the prime rate plus 3.75% or 10% thereafter to maturity or
        repayment.
        
   (3)  The note bears interest at 12.25% throughout the term.
       
   (4)  Balance at beginning of year                 $ 380,232,000
        Collections of principal                       (18,065,000)
                                                     -------------
        Balance at end of year                       $ 362,167,000
                                                     =============

   (5)  The deed of trust notes are carried in investments in and advances to
        unconsolidated real estate ventures on the Company's balance sheets
        at December 31, 1998 and 1997.  See note 3 to the consolidated financial
        statements regarding the transactions that gave rise to the deed of
        trust notes.

                                     IV-36
<PAGE>
 
                                                                     Schedule II
                                                                     -----------

                         REAL ESTATE VENTURES OWNED BY

 THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST AND THE ROUSE COMPANY

                       Valuation and Qualifying Accounts

                          Year ended December 31, 1998

                                 (in thousands)


<TABLE>
<CAPTION>
                                                                           Additions
                                                                    ----------------------
                                                        Balance at  Charged to  Charged to                Balance at
                                                        beginning   Costs and     other                     end of
               Descriptions                              of year     expenses    accounts   Deductions       year
               ------------                             ----------  ----------  ----------  ----------   ------------
<S>                                                     <C>         <C>         <C>         <C>          <C>
Year ended December 31, 1998:
   Allowance for doubtful receivables                   $      830  $      359  $      ---  $      355(1) $      834
                                                        ==========  ==========  ==========  ==========    ==========
</TABLE> 
 
Note:

 (1)  Balances written off as uncollectible.

                                     IV-37
<PAGE>
 
                                                                    Schedule III
                                                                    ------------

                         REAL ESTATE VENTURES OWNED BY
            THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST
                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                 (in thousands)

<TABLE>
<CAPTION>
                                                                       Costs capitalized subsequent     Gross amount at which
                                           Initial cost to Company           to acquisition           carried at close of period
                                         ----------------------------  ----------------------------  ---------------------------
                                                                                                            Buildings
                                                           Buildings                                           and
                                                             and                    Carrying                 Improve
                               Emcum-                      Improve      Improve       costs                   ments
Description                    brances        Land          ments        ments      (notes 2)        Land    (note 3)      Total
-------------------------      -------        ----          -----      --------     ---------        ----    --------      -----
<S>                            <C>            <C>           <C>        <C>          <C>            <C>       <C>           <C> 
Operating Properties:                                                                                       
                                                                                                            
The Mall in Columbia           $204,185       $4,788        $ -        $ 69,946     $    -         $ 4,788    $ 69,946     $74,734
Retail center                                                                                               
Columbia, MD                                                                                                
                                                                                                            
White Marsh                      41,147        6,392          -          43,020          -           6,392      43,020      49,412
Retail center                                                                                               
Baltimore, MD                                                                                               
                                                                                                            
Seventy Columbia Corp Ctr        28,677          856          -          24,246          -             856      24,246      25,102
Office building                                                                                             
Columbia, MD                                                                                                
                                                                                                            
Forty Columbia Corp Ctr           3,919          636          -          15,606          -             636      15,606      16,242
Office building                                                                                             
Columbia, MD                                                                                                
                                                                                                            
Fifty Columbia Corp Ctr           3,522          463          -          15,280          -             463      15,280      15,743
Office building                                                                                             
Columbia, MD                                                                                                
                                                                                                            
Thirty Columbia Corp Ctr          3,421        1,160          -          10,988          -           1,160      10,988      12,148
Office building                                                                                             
Columbia, MD                                                                                                
                                                                                                            
Hickory Ridge Village Ctr        13,754          907          -          10,186          -             907      10,186      11,093
Community retail center                                                                                     
Columbia, MD                                                                                                
                                                                                                            
Dorsey Search Village Ctr        14,881          911          -           9,752          -             911       9,752      10,663
Community retail center
Columbia, MD                   

<CAPTION> 
                                    Accumulated                                            Life on
                                    depreciation           Date of                       which depreciation
                                         and            completion of         Date        in latest income
Description                         amortization         construction       acquired     statement is computed
-------------------------           ------------         ------------       --------     ---------------------
<S>                                 <C>                  <C>                <C>          <C>  
Operating Properties:    
                         
The Mall in Columbia                $ 13,026                 8/71           12/97               Note 7
Retail center                                                                                        
Columbia, MD                                                                                         
                                                                                                     
White Marsh                            5,208                 8/81           12/97               Note 7
Retail center                                                                                        
Baltimore, MD                                                                                        
                                                                                                     
Seventy Columbia Corp Ctr              5,244                 6/92           12/97               Note 7
Office building                                                                                      
Columbia, MD                                                                                         
                                                                                                     
Forty Columbia Corp Ctr                5,274                 6/87           12/97               Note 7
Office building                                                                                      
Columbia, MD                                                                                         
                                                                                                     
Fifty Columbia Corp Ctr                4,185                11/89           12/97               Note 7
Office building                                                                                      
Columbia, MD                                                                                         
                                                                                                     
Thirty Columbia Corp Ctr               4,438                 4/86           12/97               Note 7
Office building                                                                                      
Columbia, MD                                                                                         
                                                                                                     
Hickory Ridge Village Ctr              1,817                 6/92           12/97               Note 7
Community retail center                                                                              
Columbia, MD                                                                                         
                                                                                                     
Dorsey Search Village Ctr              2,264                 9/89           12/97               Note 7
Community retail center
Columbia, MD                   
</TABLE> 

                                     IV-38
<PAGE>
 
                         REAL ESTATE VENTURES OWNED BY
           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST
                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                (in thousands)

<TABLE>
<CAPTION>
                                                                      Costs capitalized                                    
                                                                         subsequent                    Gross amount at which     
                                      Initial cost to Company           to acquisition               carried at close of period 
                                      ------------------------     ------------------------     ----------------------------------
                                                                                                           Buildings     
                                                       Builidngs                                             and                 
                                                         and                      Carrying                  Improve              
                                Encum-                 Improve       Improve        costs                    ments               
   Description                  brances       Land      ments         ments        (note 2)       Land      (note 3)       Total 
   -----------                  -------       ----     --------      -------      ---------       ----     ---------       ----- 
<S>                           <C>           <C>        <C>           <C>          <C>           <C>        <C>          <C>      
Twenty Columbia Corp Ctr      $   2,405     $   927    $      --     $ 9,619      $     --      $  927     $  9,619     $ 10,546 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Harper's Choice                   9,233         546           --       9,323            --         546        9,323        9,869 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
American City Building            2,812          --           --       9,346            --          --        9,346        9,346 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Kings Contrivance                22,724       1,072           --       7,187            --       1,072        7,187        8,259 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     

Ten Columbia Corp Ctr             2,732         733           --       7,440            --         733        7,440        8,173 
Office building                                                                                                                  
Columbia, MD                                                                                                                     

Wilde Lake                       20,252       1,486           --       6,525            --       1,486        6,525        8,011 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
Oakland Mills                     1,141         447           --       5,842            --         447        5,842        6,289 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
Long Reach Village Ctr            4,693       1,009           --       5,167            --       1,009        5,167        6,176 
Community retail center
Columbia, MD                

<CAPTION> 
                              Accumulated                                                          Life on 
                              depreciation              Date of                               which depreciation
                                  and                completion of            Date              in latest income
   Description                amoritization          construction           required          statement is computed
   -----------                -------------          -------------          --------          ---------------------
<S>                           <C>                    <C>                    <C>               <C> 
Twenty Columbia Corp Ctr      $       3,912              6/81                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Harper's Choice                      2,512               6/71                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
American City Building               7,802               6/69                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Kings Contrivance                    2,435               6/86                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
Ten Columbia Corp Ctr               2,797                9/81                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Wilde Lake                          3,294                7/67                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
Oakland Mills                       1,510                6/69                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
Long Reach Village Ctr              1,090                6/74                12/97                   Note 7 
Community retail center
Columbia, MD                
</TABLE>

                                     IV-39
<PAGE>
 
                         REAL ESTATE VENTURES OWNED BY
           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST
                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                (in thousands)

<TABLE> 
<CAPTION> 
                                                                      Costs capitalized                                    
                                                                         subsequent                    Gross amount at which     
                                      Initial cost to Company           to acquisition               carried at close of period 
                                      ------------------------     ------------------------     ----------------------------------
                                                                                                           Buildings     
                                                       Builidngs                                             and                 
                                                         and                      Carrying                  Improve              
                                Encum-                 Improve       Improve        costs                    ments               
   Description                  brances       Land      ments         ments        (note 2)       Land      (note 3)       Total 
   -----------                  -------       ----     --------      -------      ---------       ----     ---------       ----- 
<S>                           <C>           <C>        <C>           <C>          <C>           <C>        <C>          <C>      
Dobbin Road                   $   3,724     $   426    $      --    $  4,848      $     --     $   426     $  4,848     $  5,274 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
Columbia Crossing                 5,973         945           --       3,794            --         945        3,794        4,739 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
Ridgley Building                 11,334         670           --       3,881            --         670        3,881        4,551 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Oakland Building                    695          --           --       4,150            --          --        4,150        4,150 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Sterrett Building                 1,212         308           --       3,689            --         308        3,689        3,997 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Teachers Building                 8,679          --           --       3,100            --          --        3,100        3,100 
Office building                                                                                                                  
Columbia, MD                                                                                                                     
                                                                                                                                 
Lynx Lane                         8,123         150           --       2,827            --         150        2,827        2,977 
Community retail center                                                                                                          
Columbia, MD                                                                                                                     
                                                                                                                                 
Other properties and related                                                                                                      
investments less than  
5% of total                       2,582       1,191           --      15,075            --       1,191       15,075       16,266 
                              ----------------------------------    ----------------------     ---------------------------------- 

Total Operating Properties      421,820      26,023           --     300,837            --      26,023      300,837      326,860 
                              ----------------------------------    ----------------------     ----------------------------------

<CAPTION> 
                              Accumulated                                                           Life on 
                              depreciation              Date of                                which depreciation
                                  and                completion of            Date              in latest income
   Description                amoritization          construction           required          statement is computed
   -----------                -------------          -------------          --------          ---------------------
<S>                           <C>                    <C>                    <C>               <C> 
Dobbin Road                   $       1,545              6/83                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
Columbia Crossing                       235             11/98                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                            
Ridgley Building                      2,296              6/72                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Oakland Building                      2,359              6/71                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Sterrett Building                     2,172              6/72                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Teachers Building                     1,021              6/69                12/97                   Note 7 
Office building                             
Columbia, MD                                
                                            
Lynx Lane                             1,199              6/73                12/97                   Note 7 
Community retail center                     
Columbia, MD                                
                                          
Other properties and related                 
investments less than                       
5% of total                           4,755 
                              --------------

Total Operating Properties           82,390  
                              --------------
</TABLE> 

                                     IV-40
<PAGE>
 
                         REAL ESTATE VENTURES OWNED BY
           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST
                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                (in thousands)
<TABLE>
<CAPTION>
                                                                Costs capitalized subsequent       Gross amount at which  
                                   Initial cost to Company             to acquisition            carried at close of period
                                   -----------------------      -----------------------------    --------------------------
                                                                                                           Buildings
                                                 Buildings                                                    and                  
                                                    and                         Carrying                    Improve                
                            Encum-                Improve        Improve         costs                       ments                 
    Description             brances      Land      ments          ments         (note 2)       Land         (note 3)    Total       
    -----------             -------      ----      -----         -------        --------       ----         --------    -----       
<S>                         <C>          <C>     <C>             <C>            <C>            <C>          <C>         <C>         
Properties in Development:                                                                                                     
                                                                                                                               
                                                                                                                               
Columbia Mall                 $      --  $ 2,000     $ --        $ 38,352      $   --          $  2,000      $ 38,352  $ 40,352  
Expansion of retail center                                                                                                     
Columbia, MD                                                                                                                   
                                                                                                                               
60 Columbia Corporate Center      4,641    1,050       --           8,356          --             1,050         8,356     9,406   
                                                                                                                    
New Office Building                                                                                                            
Columbia, MD                                                                                                                   
                                                                                                                               
3993 Howard Hughes Parkway           --      332       --           4,862          --               332         4,862     5,194  
New Office Building                                                                                                            
Las Vegas, NV                                                                                                                  
                                                                                                                               
Village 12 Arbors East           1 ,451      535       --           4,068          --               535         4,068     4,603  
New Office Building                                                                                                            
Las Vegas, NV                                                                                                                  
                                                                                                                               
Airport Center 40/51                 --      547       --           1,944          --               547         1,944     2,491  
New Office Building                                                                                                            
Las Vegas, NV                                                                                                                  
                                                                                                                               
Airport Center 50                    --      754       --           1,504          --               754         1,504     2,258  
New Office Building                                                                                                            
Las Vegas, NV                                                                                                                  
                                                                                                                               
Other properties less than 5%  
 of total                            --                --           2,138          --                --         2,138     2,138  
                               --------------------------        --------------------          ---------------------------------  
                                                                                                                               
Total Properties                                                                                                           
in Development                    6,092    5,218       --          61,224          --             5,218        61,224    66,442  
                               --------------------------        --------------------          ---------------------------------   
<CAPTION> 
                                      Accumulated                                           Life on           
                                      depreciation         Date of                     which depreciation  
                                          and            completion of       Date       in latest income    
    Description                       amortization       construction      acquired    statement is computed 
    -----------                      --------------      ------------     ---------   ---------------------- 
<S>                                  <C>                 <C>              <C>         <C> 
Properties in Development:            $        --              N/A           12/97             N/A 
                                
Columbia Mall                                  --              N/A           12/97             N/A 
Expansion of retail center      
Columbia, MD                    
                                 
60 Columbia Corporate Center                   --              N/A           12/97             N/A 
New Office Building             
Columbia, MD                    
                                
3993 Howard Hughes Parkway                     --              N/A           12/97             N/A 
New Office Building             
Las Vegas, NV                   
                                
Village 12 Arbors East                         --              N/A           12/97             N/A 
New Office Building             
Las Vegas, NV                   
                                
Airport Center 40/51                           --              N/A           12/97             N/A 
New Office Building             
Las Vegas, NV                   
                                
Airport Center 50                              --              N/A           12/97             N/A 
New Office Building             
Las Vegas, NV                   
                                
Other projects less than 5%     
 of total                                      --              N/A           12/97             N/A 
</TABLE>                                                                 
                                     IV-41
<PAGE>
 
                         REAL ESTATE VENTURES OWNED BY
           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST
                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1998

                                (in thousands)



<TABLE>
<CAPTION>
                                                                Costs capitalized subsequent         Gross amount at which  
                                  Initial cost to Company              to acquisition              carried at close of period
                                  -----------------------       -----------------------------      --------------------------
                                                                                                             Buildings            
                                                 Buildings                                                     and                
                                                    and                     Carrying                         Improve              
                            Encum-                Improve       Improve       costs                           ments               
    Description             brances     Land       ments         ments      (note 2)            Land         (note 3)      Total  
    -----------            ---------    ----       -----         -----      --------            ----         --------      -----  
<S>                        <C>          <C>      <C>            <C>         <C>                 <C>          <C>           <C> 
Investment land and land
held for development  
and sale:

Columbia                    $ 33,369     $ 53,000   $  --          $ 53,564    $     --          $106,564    $     --      $106,564
Land in various stages of
development
Columbia, MD
                                               
Summerlin                    174,422       89,076      --             6,421          --            95,497          --        95,497
Land in various stages of
development
Las Vegas, NV
                                     
Nevada Investment Land        38,149       20,631      --            20,525          --            41,156          --        41,156 

 
                                                
Canyon Springs                14,959       12,872      --            11,898          --            24,770          --        24,770
Land held for development
Riverside County, CA
                                         
Bridgewater Commons               --       10,054      --                59          --            10,113          --        10,113 
Land held for sale
Bridgewater, NJ
 
Other less than 5% of total       --           55                        --          --                55          --            55 
                                                                                                                                   
                             ----------------------------------    ---------------------------  ------------------------------------
Total investment land and
land held for development
and sale                     260,899      185,688      --             92,467         --           278,155          --       278,155
                            -----------------------------------    ---------------------------  ------------------------------------

 
Total Property              $688,811     $216,929   $  --          $ 454,528      $    --        $309,396    $362,061      $671,457
                            ===================================    ===========================  ====================================



<CAPTION> 
                                      Accumulated                                           Life on           
                                      depreciation         Date of                     which depreciation  
                                         and            completion of      Date         in latest income    
   Description                        amortization      construction     acquired    statement is computed 
   -----------                        ------------      ------------     ---------   ---------------------- 
<S>                                 <C>                 <C>              <C>         <C> 
Land held for development  
and sale:


Columbia                                     N/A               N/A           12/97             N/A            
Land in various stages of                                                                                     
development                                                                                                   
Columbia, MD                                                                                                    
                                                                                                                
Summerlin                                    N/A               N/A           12/97             N/A              
Land in various stages of                                                                                       
development                                                                                                     
Las Vegas, NV                                                                                                   
                                                                                                                 
Nevada Investment Land                       N/A               N/A           12/97             N/A               
                                                                                                                 
                                                                                                                 
Canyon Springs                               N/A               N/A           12/97             N/A               
Land held for development                                                                                         
Riverside County, CA                                                                                              
                                                                                                                  
Bridgewater Commons                          N/A               N/A           12/97             N/A                
Land held for sale                                                                                                
Bridgewater, NJ                 
 
Other properties held for   
sale, less than 5% of total                   --                                                   
                                       ----------                                                  
                                                                                                   
                                              --                                                   
                                       ----------                                                  
                                                                                                   
Total Property                         $  82,390                                                                    
                                       ==========                                                  
</TABLE>                                                            

                                     IV-42
<PAGE>
 
                                                          Schedule III continued
 
                         REAL ESTATE VENTURES OWNED BY

           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST

                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)
                               December 31, 1998

Notes:
 
   (1)  Reference is made to notes 1, 2 and 5 to the combined consolidated
        financial statements.  As indicated in note 1, the Ventures retained
        The Rouse Company's historical cost basis in the assets acquired and
        liabilities assumed on December 31, 1997.  Accordingly, historical
        data have been presented with respect to the allocation of the gross
        historical cost of properties at December 31, 1998 between initial cost 
        and costs capitalized subsequent to acquisition.
 
   (2)  The determination of these amounts is not practicable and, accordingly,
        they are included in improvements.
 
   (3)  Buildings and improvements include deferred costs of $10,472,000 at
        December 31, 1998.

   (4)  The changes in total cost of properties for the years ended December 31,
        1998 is as follows (in thousands):
 
<TABLE> 
       <S>                                                      <C>  
       Balance at beginning of year                             $  619,295
       Additions, at cost                                           82,289
       Cost of properties acquired                                  10,054
       Additions to land held for                             
         development and sale                                       82,656
       Cost of land sales                                          (77,771)
       Retirements, sales and other                           
       dispositions                                                (45,066)
                                                                ----------
       Balance at end of year                                   $  671,457
                                                                ==========
</TABLE>

                                     IV-43
<PAGE>
 
                                                          Schedule III continued
                                                          ----------------------

                         REAL ESTATE VENTURES OWNED BY

           THE ROUSE COMPANY INCENTIVE COMPENSATION STATUTORY TRUST

                             AND THE ROUSE COMPANY

               Real Estate and Accumulated Depreciation (note 1)
                               December 31, 1998

Notes:
 
     (5)  The changes in accumulated depreciation and amortization for the year
          ended December 31, 1998 is as follows (in thousands):
 
<TABLE> 
<CAPTION>  
         <S>                                                                           <C>
         Balance at beginning of year                                                  $   72,000
         Depreciation and amortization
            charged to operations                                                          10,585
         Retirements, sales and other, net                                                   (195)
                                                                                       ----------
         Balance at end of year                                                        $   82,390
                                                                                       ==========
</TABLE> 
 
     (6)  The aggregate cost of properties for Federal income tax purposes is
          approximately $1,071,814,000 at December 31, 1998.
 
     (7)  Reference is made to note 1(c) to the combined consolidated financial
          statements for information related to depreciation.

                                     IV-44
<PAGE>
 
                                  SIGNATURES
                                  ----------


   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


The Rouse Company



By: /s/Anthony W. Deering
   ---------------------------------------
   Anthony W. Deering                                            March 30, 1999
   Chairman of the Board, President
     and Chief Executive Officer



   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Principal Executive Officer:



    /s/Anthony W. Deering
   ---------------------------------------
  Anthony W. Deering                                             March 30, 1999
  Chairman of the Board, President
     and Chief Executive Officer



Principal Financial Officer:



    /s/Jeffrey H. Donahue
   ---------------------------------------
  Jeffrey H. Donahue                                             March 30, 1999
  Executive Vice President and
     Chief Financial Officer



Principal Accounting Officer:



    /s/George L. Yungmann
   ---------------------------------------
  George L. Yungmann                                             March 30, 1999
  Senior Vice President and Controller


                                     IV-45

<PAGE>
 
  Board of Directors:


   David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
Mathias J. DeVito, Juanita T. James, William R. Lummis, Thomas J. McHugh, Hanne
M. Merriman, Roger W. Schipke, Alexander B. Trowbridge and Gerard J. M. Vlak.



By: /s/Anthony W. Deering
   ---------------------------------------
   Anthony W. Deering                                            March 30, 1999
   For himself and as
   Attorney-in-fact for
   the above-named persons


                                     IV-46