Rouse earnings rose 28% in 1996 Developer reports fourth straight record year

February 21, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Rouse Co. reported yesterday a fourth consecutive year of record earnings, shattering its previous high marks with a 28 percent increase over its 1995 performance.

The Columbia-based real estate concern attributed its $139.4 million in earnings before depreciation and deferred taxes to strong gains in its malls, office and mixed-use projects, and its land sales.

Rouse also said its earnings were "favorably impacted" by its $520 million acquisition of the Howard Hughes Corp. in June 1996, which gave Rouse 59 office buildings, a 22,000-acre planned community and thousands of acres of land in Las Vegas and Los Angeles for future development.

"Every segment of the company's operations produced record earnings," said Anthony W. Deering, Rouse's president and chief executive. "Looking forward, we expect to see strong growth in 1997, which will also benefit from a full year's results from the Hughes acquisition."

In the fourth quarter, which ended Dec. 31, Rouse generated earnings before depreciation and deferred taxes of $45.8 million, a 46 percent increase from the comparable period in 1995.

"Their results were in line with our expectations," said Barry C. Curtis, who tracks Rouse for Alex. Brown & Sons Inc. "Obviously it was a very solid year for them."

Revenues for the final quarter of last year were up 42 percent, to $252.04 million, while revenues for the year totaled $832 million, a 23.6 percent increase.

"The only soft spot we had was that our retail results were only up 3 percent over last year," said David L. Tripp, a Rouse vice president and its director of investor relations. "The retail environment is pretty heavily oversold. While we ended the year with a 95 percent occupancy rate that's still better than the rest of the industry, it's slightly behind what we had a year ago. But our belief is that we're improving the quality of our retail portfolio."

Rouse also announced it had sold $200 million in convertible preferred stock to pay off high-interest-rate debt and to finance development. The shares, priced at $50 each, will pay a $3 dividend annually.

"We have 14 malls under various forms of development," Tripp VTC said. "We're either adding department stores, expanding malls or building new projects, such as office buildings in Las Vegas. The stock sale is a recognition that we need additional capital."

Rouse's common shares dipped 50 cents a share to close at $30 in trading yesterday.

Pub Date: 2/21/97

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