Rouse Co. chairman foresees good year after big stock sale

8 newly acquired malls expected to lift earnings

May 10, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

Fresh off closing the company's largest deal ever, Anthony W. Deering, chairman and chief executive of Columbia-based Rouse Co., told more than 600 shareholders yesterday that 2002 would be a good year.

Last Friday's closing came just in time for Deering, whose company sold 16.7 million shares of stock to help pay for an interest in eight premier shopping malls, thereby diluting the value of the stock. He was able to report to shareholders yesterday that, although the acquisitions took longer than expected, income from them will immediately begin to offset the slight loss they had felt.

As a result, questions fielded by Deering centered on mostly friendly topics, such as earnings from the new malls bought from Rodamco North America NV for $1.5 billion. The malls should produce an additional 5 to10 cents a share by 2003, according to analysts.

During the meeting, Deering also highlighted first-quarter results, which were released May 1, and shopping malls under development.

Deering said funds from operations, a key gauge of real estate investment trusts, were 80 cents a share in the first quarter of 2002, down from 96 cents in the first quarter last year. He attributed the drop to the January stock sale. He also said that the company, given the state of the economy, did not prepare enough of its land for sale to meet demand. By the end of the year, he said, land sales should meet or exceed those of 2001, which was a banner year.

On the development front, an expansion of Fashion Show mall in Las Vegas and the grand opening of the Village of Merrick Park in Coral Gables, Fla., should be unveiled by the end of the year. Rouse settled a major lawsuit in Florida this year, lifting a competing mall's ban on retailers' locating in more than one place.

"The excellent result from last year should continue producing strong growth for 2002," Deering said. "The acquisition of interest in eight premier regional retail centers from Rodamco North America NV and the exciting array of new development projects currently under way should produce additional growth in earnings and value over the next several years."

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