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                                                                    Exhibit 99.2


                  FACTORS AFFECTING FUTURE OPERATING RESULTS

     This Form 10-K, the Company's Annual Report to Shareholders, any Form 10-Q
or any Form 8-K of the Company or any other written or oral statements made by
or on behalf of the Company include forward-looking statements that reflect the
Company's current views with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties,
including those discussed below that could cause actual results to differ
materially from historical results or anticipated results. The words "believe,"
"expect," "anticipate" and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of their dates. The Company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

     The following factors could cause actual results of The Rouse Company, its
subsidiaries, affiliates and Non-REIT Subsidiaries (collectively and
individually, the "Company") to differ materially from historical results or
anticipated results:

     REIT Risks. Failure to Qualify as a REIT. Although the Company believes
that it is organized and intends to operate in such a manner as to qualify as a
real estate investment trust ("REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"), no assurance can be given that the Company will remain
so qualified. Qualification as a REIT involves the application of highly
technical and complex Code provisions for which there are only limited judicial
or administrative interpretations. The complexity of these provisions and
applicable Treasury Regulations is also increased to the extent a REIT holds
some of its assets in partnership form. The determination of various factual
matters and circumstances not entirely within the Company's control may affect
its ability to qualify as a REIT. In addition, no assurance can be given that
legislation, new regulations, administrative interpretations or court decisions
will not significantly change the tax laws with respect to qualification as a
REIT or the Federal income tax consequences of such qualification. Currently,
there are proposals before Congress to make significant changes to the
requirements for qualifying as a REIT and to the operations REITs may conduct.

     If in any taxable year the Company fails to qualify as a REIT, the Company
would not be allowed a deduction for distributions to shareholders in computing
its taxable income and would be subject to Federal income tax (including
applicable alternative minimum tax) on its taxable income at regular corporate
rates. As a result, the amount available for distribution to the Company's
shareholders would be reduced for the year or years involved. In addition,
unless entitled to relief under certain statutory provisions, the Company would
be disqualified from treatment as a REIT for the four taxable years following
the year during which it lost its qualification.

     Notwithstanding that the Company currently operates in a manner designed to
qualify as a REIT, future economic, market, legal, tax or other considerations
may cause the Company to determine that it is in the best interest of the
Company and its shareholders to revoke its REIT election. The Company would then
be disqualified from electing treatment as a REIT for the four taxable years
following the year of such revocation.

     Inability to Comply With REIT Distribution Requirements. To obtain the
favorable tax treatment for REITs qualifying under the Code, the Company
generally will be required to distribute to its shareholders at least 95% of its
otherwise taxable income (after certain adjustments, including for the Company's
net operating loss carryover). Such distributions must be paid either (i) in the
taxable year to
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which they relate or (ii) in the following taxable year if declared before the
Company timely files its tax return for such year and if paid on or before the
first regular distribution payment after such declaration. In addition, the
Company will be subject to a 4% nondeductible excise tax on the amount, if any,
by which certain distributions paid by it with respect to any calendar year are
less than the sum of 85% of its ordinary income for the calendar year, 95% of
its capital gains net income for the calendar year and any undistributed taxable
income from prior periods. Failure to comply with the 95% distribution
requirement would result in the Company failing to qualify as a REIT and the
Company's income being subject to tax at regular corporate rates.

     The Company intends to make distributions to its shareholders to comply
with the 95% tax distribution provision of the Code and to avoid the
nondeductible excise tax discussed above.

     Real Estate Development and Investment Risks. General. Real property
investments are subject to varying degrees of risk. Revenues and property values
may be adversely affected by the general economic climate, the local economic
climate and local real estate conditions, including (i) the perceptions of
prospective tenants or purchasers as to the attractiveness of the property; (ii)
the ability to provide adequate management, maintenance and insurance; (iii) the
inability to collect rent due to bankruptcy or insolvency of tenants or
otherwise; and (iv) increased operating costs. Real estate values may also be
adversely affected by such factors as applicable laws, including tax laws,
interest rate levels and the availability of financing.

     Development Risks. New project development is subject to a number of risks,
including risks of availability of financing, construction delays or cost
overruns that may increase project costs, risks that the properties will not
achieve anticipated occupancy levels or sustain anticipated lease or sales
levels, and new project commencement risks such as receipt of zoning, occupancy
and other required governmental permits and authorizations and the incurrence of
development costs in connection with projects that are not pursued to
completion.
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     Lack of Geographical Diversification. A significant portion of the
properties held by the Company's subsidiaries and affiliates is geographically
concentrated. Land sales, for instance, relate primarily to land in and around
Columbia, Maryland and Las Vegas, Nevada. These sales are affected by the
economic climate in Howard County, Maryland, the Baltimore-Washington area and
the greater Las Vegas area, and by local real estate conditions and other
factors, including applicable zoning laws and the availability of financing for
residential development. Similarly, most of the office/industrial buildings that
are owned by the Company's subsidiaries and affiliates are located in the
Baltimore-Washington corridor, including Columbia, Maryland, and the greater Las
Vegas metropolitan area. Due to the geographic concentration of this portfolio,
the operating results from owning these buildings and selling property for
development depend especially on the local economic climate and real estate
conditions, including the availability of comparable, competing buildings and
properties.

     Illiquidity of Real Estate Investments. Real estate investments are
relatively illiquid and therefore may tend to limit the ability of the Company
to react promptly in response to changes in economic or other conditions.

     Dependence on Rental Income from Real Property. The Company's cash flow and
results of operations would be adversely affected if a significant number of
tenants were unable to meet their obligations or if the Company were unable to
lease a significant amount of space in its income-producing properties on
economically favorable lease terms. In the event of a default by a tenant, the
Company may experience delays in enforcing its rights as lessor and may incur
substantial costs in protecting its investment. The bankruptcy or insolvency of
a major tenant may have an adverse effect on an income-producing property.

     Effect of Uninsured Loss. The Company carries comprehensive liability,
fire, flood, extended coverage and rental loss insurance with respect to its
properties with insured limits and policy specifications that it believes are
customary for similar properties. There are, however, certain types of losses
(generally of a catastrophic nature, such as wars, floods or earthquakes) which
may be either uninsurable, or, in the Company's judgment, not economically
insurable. Should an uninsured loss occur, the Company could lose both its
invested capital in and anticipated profits from the affected property.

     Environmental Matters. Under various federal, state and local environmental
laws, ordinances and regulations, a current or previous owner or operator of
real property may become liable for the costs of the investigation, removal and
remediation of hazardous or toxic substances on, under, in or migrating from
such property. Such laws often impose liability without regard to whether the
owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances. The presence of hazardous or toxic substances, or
the failure to remediate properly such substances when present, may adversely
affect the owner's ability to sell or rent such real property or to borrow using
such real property as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic wastes may also be liable for the costs of the
investigation, removal and remediation of such wastes at the disposal or
treatment facility, regardless of whether such facility is owned or operated by
such person. Other federal, state and local laws, ordinances and regulations
require abatement or removal of certain asbestos-containing materials in the
event of demolition or certain renovations or remodeling, impose certain worker
protection and notification requirements and govern emissions of and exposure to
asbestos fibers in the air.

     Certain of the Company's properties contain underground storage tanks which
are subject to strict laws and regulations designed to prevent leakage or other
releases of hazardous substances into the environment. In connection with its
ownership, operation and management of such properties, the Company could be
held liable for the environmental response costs associated with the release of
such
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regulated substances or related claims. In addition to remediation actions
brought by federal, state and local agencies, the presence of hazardous
substances on a property could result in personal injury or similar claims by
private plaintiffs. Such claims could result in costs or liabilities which could
exceed the value of such property. The Company is not aware of any notification
by any private party or governmental authority of any non-compliance, liability
or other claim in connection with environmental conditions at any of its
properties that it believes will involve any expenditure which would be material
to the Company, nor is the Company aware of any environmental condition with
respect to any of its properties that it believes will involve any such material
expenditure. However, there can be no assurance that any such non-compliance,
liability, claim or expenditure will not arise in the future.

     Although the Company generally conducts environmental reviews with respect
to properties which it acquires and develops, there can be no assurance that the
review conducted by the Company will be adequate to identify environmental or
other problems prior to such acquisition.

     Americans with Disabilities Act Compliance. Under the Americans with
Disabilities Act (the "ADA"), all public accommodations and commercial
facilities are required to meet certain federal requirements related to access
and use by disabled persons. These requirements became effective in 1992. The
Company has surveyed each of its properties and believes that it is in
substantial compliance with the ADA and that it will not be required to make
substantial capital expenditures to address the requirements of the ADA. In
addition, the Company has developed an ADA Compliance Plan and has budgeted for
and moved forward with the removal of those barriers to access that are readily
achievable. The Company believes that implementation of its ADA Compliance Plan
will not have a material adverse effect on its financial condition.

     Competition. There are numerous other developers, managers and owners of
real estate that compete with the Company in seeking management and leasing
revenues, land for development, properties for acquisition and disposition and
tenants for properties, and there can be no assurance that the Company will
successfully respond to or manage competitive conditions.

     Changes in Economic Conditions. The Company's business and operating
results can be adversely affected by changes in the economic environment
generally. For example, an increase in interest rates will affect the interest
payable on the Company's outstanding floating rate debt and may result in
increased interest expense if debt is refinanced at higher interest rates.
Moreover, in a recessionary economy, credit conditions may be inflexible and
consumer spending conservative, which could adversely affect the Company's
revenues from its retail centers.

     Interest Rate Exchange Agreements. The Company makes limited use of
interest rate exchange agreements, including interest rate caps and swaps,
primarily to manage interest rate risk associated with variable rate debt. Under
interest rate cap agreements, the Company makes initial premium payments to the
counterparties in exchange for the right to receive payments from them if
interest rates on the related variable rate debt exceed specified levels during
the agreement period. Premiums paid are amortized to interest expense over the
terms of the agreements using the interest method, and payments receivable from
the counterparties are accrued as reductions of interest expense. Under interest
rate swap agreements, the Company and the counterparties agree to exchange the
difference between fixed rate and variable rate interest amounts calculated by
reference to specified notional principal amounts during the agreement period.
Notional principal amounts are used to express the volume of these transactions,
but the cash requirements and amounts subject to credit risk are substantially
less. Amounts receivable or payable under swap agreements are accounted for as
adjustments to interest expense on the related debt.

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     Parties to interest rate exchange agreements are subject to market risk for
changes in interest rates and risk of credit loss in the event of nonperformance
by the counterparties. Although the Company deals only with highly rated
financial institution counterparties (which, in certain cases, are also the
lenders on the related debt) and does not expect that any counterparties will
fail to meet their obligations, there can be no assurance that this will not
occur.

     Risks Relating to Nevada Properties. General. Affiliates of the Company own
approximately 4.2 million rentable square feet of office and industrial space
primarily around Las Vegas, Nevada, Fashion Show Mall, an 869,000 square foot
regional shopping center located on the "Strip" in Las Vegas, two Tournament
Players Club golf clubs in Summerlin and approximately 8,200 saleable acres of
development and investment land located in Summerlin, Nevada. These properties
could be adversely affected by the following risks.

     Water Availability in the Las Vegas Metropolitan Area. The Las Vegas
metropolitan area is a desert environment where the ability to develop real
estate is largely dependent on the continued availability of water. The Las
Vegas metropolitan area has a limited supply of water to service future
development, and it is uncertain whether the metropolitan area will be
successful in obtaining new sources of water. If the Las Vegas metropolitan area
does not obtain new sources of water, development activities could be materially
hindered.

     Air Quality. The Las Vegas Valley is classified as a moderate carbon
monoxide and a serious PM-10 nonattainment area by the U.S. Environmental
Protection Agency ("EPA"). The EPA is currently assessing whether the Las Vegas
Valley meets certain regulatory requirements with respect to levels of ozone.
Efforts are underway to develop air quality plans to achieve and maintain
applicable EPA standards. However, there are also ongoing efforts to relax
certain requirements under the Clean Air Act and to modify the EPA's authority
thereunder. The outcome of these efforts may significantly affect real estate
development activities in the Las Vegas Valley.

     Availability of Infrastructure. As with many rapidly growing communities,
the rate of growth in the Las Vegas metropolitan area is straining the capacity
of the community's infrastructure, particularly with respect to schools, water
delivery systems, transportation, flood control and sewage treatment. Certain
responsible federal, state and local government agencies finance the
construction of infrastructure improvements through a variety of means,
including general obligation bond issues, some of which are subject to voter
approval. The failure of these agencies to obtain financing for or to complete
such infrastructure improvements could materially delay development in the area
or materially increase development costs through the imposition of impact fees
and other fees and taxes, or require the construction or funding of portions of
such infrastructure. The availability of infrastructure or water has not had a
negative impact on the development or investment activities of the Company's
affiliates to date.

     Non-Nevada Gaming. Until this decade, the gaming industry was principally
limited to the traditional markets of Nevada and New Jersey. Several states,
however, have legalized casino gaming and other forms of gambling in recent
years. In addition, several states have negotiated compacts with Indian tribes
pursuant to the Indian Gaming Regulatory Act of 1988 that permit certain forms
of gaming on Indian lands. These additional gaming venues create alternative
destinations for gamblers and tourists who might otherwise have visited Las
Vegas. It is not possible to determine whether current or future legalized
gaming venues will have an adverse impact on the Las Vegas economy and thereby
adversely affect the properties held by Company affiliates in the Las Vegas
area.

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