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Taubman Centers Announces Solid 2013 Results And Introduces 2014 Guidance



  Taubman Centers Announces Solid 2013 Results And Introduces 2014 Guidance

- Net Operating Income (NOI) Excluding Lease Cancellation Income Up 3.4%

- Leased Space, Ending Occupancy, and Average Rent All Up

- Mall Tenant Sales Exceed $700 Per Square Foot Milestone

PR Newswire

BLOOMFIELD HILLS, Mich., Feb. 12, 2014

BLOOMFIELD HILLS, Mich., Feb. 12, 2014 /PRNewswire/ -- Taubman Centers, Inc.
(NYSE: TCO) today reported financial results for the quarter and full year
periods ended December 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20080428/CLM116LOGO )

"In the fourth quarter we delivered solid results, concluding a strong year
for our company," said Robert S. Taubman, chairman, president and chief
executive officer of Taubman Centers. "This quarter we benefited from
increased rents, reduced interest expense, and the late 2012 acquisitions of
additional interests in International Plaza (Tampa, Fla.) and Waterside Shops
(Naples, Fla.).

"For the year, we achieved an increase of 9.3 percent over 2012 Adjusted FFO
per share.  Our core properties produced good results, and we made significant
progress on the execution of our development pipeline."

                       December 31,  December 31,  December 31,  December 31,
                       2013          2012          2013          2012

                       Three Months  Three Months  Year Ended    Year Ended
                       Ended         Ended
Net income allocable                                              
to common
shareholders (EPS) per $0.62         $0.44         $1.71         $1.37
diluted share 
Funds from Operations                               
(FFO) per diluted                    $0.94                       $3.21
share                  $1.11                       $3.65
                                                                  
Growth rate            18.1%                       13.7%
Adjusted Funds from                                               
Operations (Adjusted
FFO) per diluted share $1.11         $1.00 ^(1)    $3.65         $3.34 ^(1)(2)

Growth rate            11.0%                       9.3%           
(1)     Excludes a charge related to the early extinguishment of debt at The
Mall at Millenia (Orlando, Fla.) and PRC taxes on sale of Taubman TCBL assets.

(2)     Excludes charges related to the redemption of the Series G and H
Preferred Stock.

 

NOI, Leased Space, Occupancy, and Rent Up

NOI excluding lease cancellation income was up 3.4 percent for the year and
1.9 percent over fourth quarter 2012. "Our portfolio of high quality assets
continues to produce consistent, steady growth," added Mr. Taubman.

Leased space in comparable centers for Taubman's portfolio was 93.6 percent on
December 31, 2013, up 0.3 percent from 93.3 percent on December 31, 2012.
Ending occupancy in comparable centers was 92.1 percent on December 31, 2013,
up 0.3 percent from 91.8 percent on December 31, 2012. Including tenants with
leases of one year or less (temporary in-line tenants), ending occupancy was
96.3 percent.

Average rent per square foot for the fourth quarter of 2013 was $48.90, up 3.7
percent from $47.14 in the fourth quarter of 2012. For the year, average rent
per square foot was $48.52, up 4.5 percent from average rent per square foot
of $46.42 in 2012.

Record Tenant Sales Per Square Foot of $721

Comparable mall tenant sales per square foot were $721 for 2013, excluding the
company's interest in Arizona Mills (Tempe, Ariz.), which was sold in January
2014. "We're pleased that sales in our centers have now surpassed $700 per
square foot," said Mr. Taubman. "This is another record for our company and
for the U.S. publicly held regional mall industry."

Sales per square foot increased 1.8 percent from 2012. For the fourth quarter
of 2013, mall tenant sales per square foot were up 1.4 percent.

Renovations, Expansions, and Redevelopments Planned

The company is making progress on a number of renovations, expansions, and
redevelopments and expects to receive a weighted average return of 7.5 to 8
percent on its $265 million share of investment in the following centers.

  o At The Mall at Green Hills (Nashville, Tenn.), a relocation of the current
    Dillard's store and the addition of 170,000 square feet of mall tenant
    area is set to begin. The project is expected to be completed in 2018. 
  o At Cherry Creek Shopping Center (Denver, Colo.) a 53,000 square foot
    Restoration Hardware will occupy the former Saks Fifth Avenue site.
    Demolition of the existing building is set to begin soon and Restoration
    is expected to open in November 2015. The project will also include 38,000
    square feet of new mall tenant area. This expansion follows a substantial
    renovation of the center that will be completed in 2014.
  o Dolphin Mall (Miami, Fla.) will be expanded to include nearly 32,000
    square feet of new restaurant space. A vacant parcel on the property will
    be utilized for the expansion. The new restaurants are targeted to open by
    the third quarter of 2015. 
  o A renovation project is under way on the 8^th level of Beverly Center (Los
    Angeles, Calif.). The project will accommodate the flagship store of a
    mini-anchor new to the center and a new, contemporary dining court. The
    mini-anchor will open by late 2014 and the new dining court will open in
    2015.
  o At Sunvalley (Concord, Calif.) a new food court is being created by
    converting existing space. Construction is expected to begin in June and 
    will be completed by mid-2015.

Mall at Miami Worldcenter Announced

In December, the company announced its involvement in The Mall at Miami
Worldcenter (Miami, Fla.).  This will be the company's third partnership with
The Forbes Company, following the very successful joint ventures, Mall at
Millenia (Orlando, Fla) and Waterside Shops (Naples, Fla.). The Forbes Company
will oversee the development and management of the shopping center which will
contain approximately 750,000 square feet being built as part of the first
phase of the Miami Worldcenter's mixed-use project. The center will feature
Macy's and Bloomingdale's and current plans call for the retail center to open
late 2016. Spanning more than 25 acres at the northern end of the city's
Central Business District, directly across from the American Airlines Arena,
Miami Worldcenter is one of the largest and most exciting urban developments
in the United States – offering a diverse mix of retail, residential, office,
hospitality, and entertainment components. See Forbes and Taubman Announce the
Signing of Macy's and Bloomingdale's at the Mall at Miami Worldcenter –
December 5, 2013.

Dispositions and Financing Activity

In January 2014, the company announced the sale of a 49.9 percent interest in
International Plaza (Tampa, Fla.). The $499 million purchase price consisted
of $337 million of cash and approximately $162 million of beneficial interest
in debt. Proceeds were used to pay off Taubman's loan on Stony Point Fashion
Park (Richmond, Va.) and for general corporate purposes. See Taubman,
TIAA-CREF And APG Announce Sale Of Interest In International Plaza – January
30, 2014.

Last month, the company also announced the completion of the sale of land in
Syosset, New York, and the company's interest in Arizona Mills to Simon
Property Group (NYSE:  SPG). The consideration consisted of $60 million of
cash and 555,150 partnership units in Simon Property Group Limited
Partnership. As part of the sale, the company was relieved of its $84 million
share of the $167 million mortgage loan on Arizona Mills, bringing the
transaction's total value to $230 million. See Taubman Centers Sells Long
Island Land And Interest In Arizona Mills To Simon Property Group – January
31, 2014.

In November 2013, the company completed the previously announced $150 million,
5-year, non-recourse financing on The Mall at Green Hills (Nashville, Tenn.).
The loan, which is interest only until maturity, bears interest at an all-in
floating rate of 1 month LIBOR plus 1.75 percent. Proceeds were used to
extinguish the existing $105 million loan and to reduce outstanding borrowings
under the company's lines of credit.

The company also closed on a new $475 million unsecured term loan in the last
quarter of 2013. Proceeds were used to pay off the $305 million loan on
Beverly Center and to pay down the company's lines of credit. The loan, which
matures in February 2019, includes an accordion feature that would increase
the borrowing capacity to as much as $600 million, subject to specified
conditions. Separately, the company entered into a swap that effectively fixes
the current interest rate at 3 percent. See Taubman Announces The Closing Of
$475 Million Unsecured Term Loan – November 13, 2013.

"These transactions demonstrate our commitment to maintaining a strong balance
sheet," said Lisa A. Payne, vice chairman and chief financial officer. "It has
been our strategy to recycle capital for growth. We will be redeploying the
capital we raised by reinvesting in our assets, funding our development
pipeline, and repurchasing stock under our share repurchase program."

Share Repurchase Program

During the quarter ended December 31, the company purchased 473,763 shares of
its common stock at an average price of $65.65 per share. Since the program's
inception in August 2013, the company has purchased 786,805 shares of its
common stock at an average price of $66.45 per share. At December 31, 2013 the
company had $148 million available under its share repurchase authorization.  

2014 Guidance

The company is introducing guidance for 2014. For the full year 2014, the
company expects FFO per diluted share to be in the range of $3.72 to $3.82.
This includes the negative impact of about $0.12 per share due to the recent
sale of the company's 50 percent interest in Arizona Mills and the sale of a
49.9 percent interest in International Plaza.

Net income allocable to common shareholders (EPS) for the year is expected to
be in the range of $1.81 to $1.96. As a result of a reduction in depreciation
expense, the loss of operations from the disposed interests will not
significantly impact EPS. The EPS range provided excludes estimates for gains
on the sale of Arizona Mills; land in Syosset, New York; and interests
totaling a 49.9 percent ownership in International Plaza. As a result of these
transactions, the company expects to recognize gains in excess of $450 million
in the first quarter of 2014, or approximately $5.00 per diluted share.

Supplemental Investor Information Available

The company provides supplemental investor information along with its earnings
announcements, available online at www.taubman.com under "Investor
Relations."  This includes the following:

  o Company Information
  o Income Statements
  o Earnings Reconciliations
  o Changes in Funds from Operations and Earnings Per Share
  o Components of Other Income, Other Operating Expense, and Nonoperating
    Income (Expense)
  o Recoveries Ratio Analysis
  o Balance Sheets
  o Debt Summary
  o Other Debt, Equity and Certain Balance Sheet Information
  o Construction and Redevelopment
  o Acquisitions/Dispositions
  o Capital Spending
  o Operational Statistics
  o Owned Centers
  o Major Tenants in Owned Portfolio
  o Anchors in Owned Portfolio
  o Operating Statistics Glossary

Investor Conference Call

The company will host a conference call at 11:00 AM Eastern Standard Time on
Thursday, February 13 to discuss these results, business conditions and the
company's outlook for 2014. The conference call will be simulcast at
www.taubman.com.  An online replay will follow shortly after the call and
continue for approximately 90 days.

Taubman Centers is an S&P MidCap 400 Real Estate Investment Trust engaged in
the ownership, management and/or leasing of 27 regional, super-regional and
outlet shopping centers in the U.S. and Asia. Taubman's U.S.-owned properties
are the most productive in the publicly held U.S. regional mall industry.
Taubman is currently developing The Mall at University Town Center in
Sarasota, Fla.; The Mall of San Juan in San Juan, Puerto Rico; International
Market Place in Waikiki, Honolulu, Hawaii and shopping malls in Xi'an and
Zhengzhou, China and Hanam, South Korea.  Taubman Centers is headquartered in
Bloomfield Hills, Mich. and Taubman Asia, the platform for Taubman Centers'
expansion into China and South Korea, is headquartered in Hong Kong.  Founded
in 1950, Taubman has more than 60 years of experience in the shopping center
industry.  For more information about Taubman, visit www.taubman.com.

For ease of use, references in this press release to "Taubman Centers,"
"company," "Taubman" or an operating platform mean Taubman Centers, Inc.
and/or one or more of a number of separate, affiliated entities. Business is
actually conducted by an affiliated entity rather than Taubman Centers, Inc.
itself or the named operating platform.

This press release may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements reflect
management's current views with respect to future events and financial
performance. The forward-looking statements included in this release are made
as of the date hereof. Except as required by law, we assume no obligation to
update these forward-looking statements, even if new information becomes
available in the future. Actual results may differ materially from those
expected because of various risks and uncertainties. You should review the
company's filings with the Securities and Exchange Commission, including "Risk
Factors" in its most recent Annual Report on Form 10-K and subsequent
quarterly reports, for a discussion of such risks and uncertainties.

 

 

TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December
31, 2013 and 2012
(in thousands of dollars,
except as indicated)
                                Three Months Ended      Year Ended
                                2013        2012        2013        2012
Net income                      66,166      49,131      189,368     157,817
Noncontrolling share of income  (3,592)     (5,142)     (10,344)    (11,930)
of consolidated joint ventures
Noncontrolling share of income  (16,519)    (12,608)    (46,434)    (39,713)
of TRG 
Preferred stock dividends (1)   (5,785)     (3,071)     (20,933)    (21,051)
Distributions to participating  (436)       (403)       (1,749)     (1,612)
securities of TRG
Net income attributable to
Taubman Centers, Inc. common    39,834      27,907      109,908     83,511
shareowners
Net income per common share -   0.63        0.45        1.73        1.39
basic 
Net income per common share -   0.62        0.44        1.71        1.37
diluted
Beneficial interest in EBITDA - 145,512     133,108     516,942     475,214
Combined (2)
Funds from Operations(2)        100,614     85,531      330,836     284,680
Funds from Operations           71,970      59,995      236,662     197,671
attributable to TCO (2)
Funds from Operations per       1.14        0.97        3.72        3.30
common share - basic(2)
Funds from Operations per       1.11        0.94        3.65        3.21
common share - diluted (2)
Adjusted Funds from Operations  100,614     90,275      330,836     295,836
(2)(3)
Adjusted Funds from Operations  71,970      63,322      236,662     205,430
attributable to TCO (2)(3)
Adjusted Funds from Operations  1.14        1.02        3.72        3.43
per common share- basic(2)(3)
Adjusted Funds from Operations
per common share- diluted       1.11        1.00        3.65        3.34
(2)(3)
Weighted average number of
common shares outstanding -     63,408,637  61,899,628  63,591,523  59,884,455
basic
Weighted average number of
common shares outstanding -     65,066,977  63,341,516  64,575,412  61,376,444
diluted
Common shares outstanding at    63,101,614  63,310,148
end of period
Weighted average units -        88,584,937  88,245,612  88,823,006  86,306,256
Operating Partnership - basic
Weighted average units -        90,243,277  90,558,761  90,678,157  88,669,507
Operating Partnership - diluted
Units outstanding at end of     88,271,133  88,656,297
period - Operating Partnership
Ownership percentage of the
Operating Partnership at end of 71.5%       71.4%
period
Number of owned shopping        25          24          25          24
centers at end of period
Operating Statistics:
Net Operating Income excluding
lease cancellation income -     1.9%                    3.4%
growth % (2)(4)
Mall tenant sales - all centers 1,913,865   1,879,341   6,180,095   6,008,265
(5)
Mall tenant sales - comparable  1,810,157   1,789,244   5,837,965   5,726,743
(5)(6)
Ending occupancy - all centers  91.7%       91.8%       91.7%       91.8%
Ending occupancy -              92.1%       91.8%       92.1%       91.8%
comparable(4)
Average occupancy - all         91.6%       91.4%       90.9%       90.3%
centers 
Average occupancy - comparable  92.0%       91.4%       91.1%       90.4%
(4)
Leased space - all centers      93.1%       93.4%       93.1%       93.4%
Leased space - comparable(4)    93.6%       93.3%       93.6%       93.3%
All centers:
Mall tenant occupancy costs as
a percentage of tenant sales -  11.6%       11.6%       13.2%       12.8%
Consolidated Businesses (5)
Mall tenant occupancy costs as
a percentage of tenant sales -  11.4%       11.0%       12.6%       12.2%
Unconsolidated Joint Ventures
(5)
Mall tenant occupancy costs as
a percentage of tenant sales -  11.6%       11.4%       13.0%       12.7%
Combined (5)
Comparable centers:
Mall tenant occupancy costs as
a percentage of tenant sales -  11.5%       11.4%       13.2%       12.8%
Consolidated Businesses (4)(5)
Mall tenant occupancy costs as
a percentage of tenant sales -  11.3%       11.0%       12.5%       12.2%
Unconsolidated Joint Ventures
(5)(6)
Mall tenant occupancy costs as
a percentage of tenant sales -  11.5%       11.3%       13.0%       12.6%
Combined (5)(6)
Average rent per square foot -  48.39       47.53       48.45       46.86
Consolidated Businesses (4)
Average rent per square foot -  50.08       46.25       48.69       45.44
Unconsolidated Joint Ventures
Average rent per square foot -  48.90       47.14       48.52       46.42
Combined (4)

    Preferred dividends for the year ended December 31, 2012 include charges
(1) of $3.3 million and $3.1 million incurred in connection with the $100
    million redemption of the Series G Preferred Stock and the $87 million
    redemption of the Series H Preferred Stock, respectively.
    Beneficial Interest in EBITDA represents the Operating Partnership's share
    of the earnings before interest, income taxes, and depreciation and
    amortization of its consolidated and unconsolidated businesses. The
(2) Company believes Beneficial Interest in EBITDA provides a useful indicator
    of operating performance, as it is customary in the real estate and
    shopping center business to evaluate the performance of properties on a
    basis unaffected by capital structure.
    The Company uses Net Operating Income (NOI) as an alternative measure to
    evaluate the operating performance of centers, both on individual and
    stabilized portfolio bases. The Company defines NOI as property-level
    operating revenues (includes rental income excluding straight-line
    adjustments of minimum rent) less maintenance, taxes, utilities,
    promotion, ground rent (including straight-line adjustments), and other
    property operating expenses. Since NOI excludes general and administrative
    expenses, pre-development charges, interest income and expense,
    depreciation and amortization, impairment charges, restructuring charges,
    and gains from peripheral land and property dispositions, it provides a
    performance measure that, when compared period over period, reflects the
    revenues and expenses most directly associated with owning and operating
    rental properties, as well as the impact on their operations from trends
    in tenant sales, occupancy and rental rates, and operating costs. The
    Company also uses NOI excluding lease cancellation income as an
    alternative measure because this income may vary significantly from period
    to period, which can affect comparability and trend analysis. The Company
    generally provides separate projections for expected comparable center NOI
    growth and lease cancellation income. Comparable centers are generally
    defined as centers that were owned and open for the entire current and
    preceding period presented.
    The National Association of Real Estate Investment Trusts (NAREIT) defines
    Funds from Operations (FFO) as net income (computed in accordance with
    Generally Accepted Accounting Principles (GAAP)), excluding gains (or
    losses) from extraordinary items and sales of properties and impairment
    write-downs of depreciable real estate, plus real estate related
    depreciation and after adjustments for unconsolidated partnerships and
    joint ventures. The Company believes that FFO is a useful supplemental
    measure of operating performance for REITs. Historical cost accounting for
    real estate assets implicitly assumes that the value of real estate assets
    diminishes predictably over time. Since real estate values instead have
    historically risen or fallen with market conditions, the Company and most
    industry investors and analysts have considered presentations of operating
    results that exclude historical cost depreciation to be useful in
    evaluating the operating performance of REITs. The Company primarily uses
    FFO in measuring performance and in formulating corporate goals and
    compensation. 
    The Company may also present adjusted versions of NOI, Beneficial Interest
    in EBITDA, and FFO when used by management to evaluate operating
    performance when certain significant items have impacted results that
    affect comparability with prior or future periods due to the nature or
    amounts of these items. The Company believes the disclosure of the
    adjusted items is similarly useful to investors and others to understand
    management's view on comparability of such measures between periods. 
    These non-GAAP measures as presented by the Company are not necessarily
    comparable to similarly titled measures used by other REITs due to the
    fact that not all REITs use the same definitions. These measures should
    not be considered alternatives to net income or as an indicator of the
    Company's operating performance. Additionally, these measures do not
    represent cash flows from operating, investing or financing activities as
    defined by GAAP.
    FFO for the three month period and year ended December 31, 2012 includes,
    and Adjusted FFO excludes, a charge related to the early extinguishment of
(3) debt at The Mall at Millenia and PRC taxes on sale of Taubman TCBL assets.
    In addition, FFO for the year ended December 31, 2012 includes, and
    Adjusted FFO excludes, charges related to the redemption of the Series G
    and H Preferred Stock.  
    Statistics exclude non-comparable centers. In 2013 and 2012,
(4) non-comparable centers are Taubman Prestige Outlets Chesterfield and City
    Creek Center. The 2012 statistics, other than sales per square foot
    growth, have been restated to include comparable centers to 2013.  
(5) Based on reports of sales furnished by mall tenants. 
    Statistics exclude non-comparable centers and Arizona Mills. The 2012
(6) statistics, other than sales per square foot growth, have been restated to
    include comparable centers to 2013.  

 

 TAUBMAN CENTERS,
INC. 
 Table 2 - Income
Statement 
 For the Three
Months Ended
December 31, 2013
and 2012 
 (in thousands of
dollars) 
                   2013                           2012
                                  UNCONSOLIDATED                 UNCONSOLIDATED
                   CONSOLIDATED  JOINT            CONSOLIDATED  JOINT
                   BUSINESSES                     BUSINESSES
                                 VENTURES (1)                   VENTURES (1) 
REVENUES:
    Minimum rents  108,686       47,626           106,058       42,611
    Percentage     14,780        4,517            15,259        4,897
    rents
    Expense        74,945        30,242           72,927        29,945
    recoveries
    Management,
    leasing, and   2,188                          4,370
    development
    services
    Other          11,173        3,151            11,092        2,167
      Total        211,772       85,536           209,706       79,620
      revenues
EXPENSES:
    Maintenance,
    taxes,         61,131        20,973           57,698        20,802
    utilities, and
    promotion
    Other          17,285        3,798            20,843        3,429
    operating
    Management,
    leasing, and   1,149                          5,743
    development
    services
    General and    13,338                         11,638
    administrative
    Interest       30,434        16,972           33,470        20,653
    expense(2)
    Depreciation
    and            39,510        10,010           40,434        11,643
    amortization 
      Total        162,847       51,753           169,826       56,527
      expenses
Nonoperating       (483)         (5)              26            (1)
income (expense)
                   48,442        33,778           39,906        23,092
Income tax         (694)                          (3,526)
expense(3)
Equity in income
of Unconsolidated  18,418                         12,751
Joint Ventures
Net income         66,166                         49,131
Net income
attributable to
noncontrolling
interests:
    Noncontrolling
    share of
    income of      (3,592)                        (5,142)
    consolidated
    joint
    ventures 
    Noncontrolling
    share of       (16,519)                       (12,608)
    income of TRG
Distributions to
participating      (436)                          (403)
securities of TRG
Preferred stock    (5,785)                        (3,071)
dividends 
Net income
attributable to
Taubman Centers,   39,834                         27,907
Inc. common
shareowners 
SUPPLEMENTAL
INFORMATION:
    EBITDA - 100%  118,386       60,760           113,810       55,388
    EBITDA -
    outside        (7,036)       (26,598)         (11,133)      (24,957)
    partners'
    share 
    Beneficial
    interest in    111,350       34,162           102,677       30,431
    EBITDA
    Beneficial
    interest       (28,304)      (9,362)          (29,519)      (10,778)
    expense(2)
    Beneficial
    income tax     (694)                          (3,526)
    expense - TRG
    and TCO
    Beneficial
    income tax     49
    expense - TCO
    Non-real
    estate         (802)                          (683)
    depreciation
    Preferred
    dividends and  (5,785)                        (3,071)
    distributions 
    Funds from
    Operations     75,814        24,800           65,878        19,653
    contribution 
STRAIGHTLINE AND
PURCHASE
ACCOUNTING
ADJUSTMENTS:
    Net
    straight-line
    adjustments to
    rental
    revenue,
    recoveries,
      and ground
      rent expense 1,118         845              1,312         201
      at TRG % 
    Green Hills
    purchase
    accounting     197                            212
    adjustments -
    minimum rents
    increase
    Green Hills,
    El Paseo
    Village, and
    Gardens on El
    Paseo purchase
    accounting 
      adjustments
      - interest   607                            858
      expense
      reduction
    Waterside
    Shops purchase
    accounting
    adjustments -                263
    interest
    expense
    reduction
    With the exception of the Supplemental Information, amounts include 100% of
(1) the Unconsolidated Joint Ventures. Amounts are net of intercompany
    transactions. The Unconsolidated Joint Ventures are presented at 100% in
    order to allow for measurement of their performance as a whole, without
    regard to the Company's ownership interest. In its consolidated financial
    statements, the Company accounts for its investments in the Unconsolidated
    Joint Ventures under the equity method. 
    Includes a charge related to the early extinguishment of debt at The Mall
(2) of Millenia in October 2012 of $3.2 million, of which TRG's share is $1.6
    million.
(3) Income tax expense for the three months ended December 31, 2012 include PRC
    taxes of $3.2 million on the sale of Taubman TCBL assets.

 

 TAUBMAN CENTERS,
INC. 
 Table 3 - Income
Statement 
 For the Year
Ended December 31,
2013 and 2012 
 (in thousands of
dollars) 
                   2013                           2012
                                  UNCONSOLIDATED                 UNCONSOLIDATED
                   CONSOLIDATED  JOINT            CONSOLIDATED  JOINT
                   BUSINESSES                     BUSINESSES
                                 VENTURES (1)                   VENTURES (1) 
REVENUES:
    Minimum rents  417,729       172,305          398,306       161,824
    Percentage     28,512        10,280           28,026        10,694
    rents
    Expense        272,494       104,164          258,252       102,506
    recoveries
    Management,
    leasing, and   16,142                         31,811
    development
    services
    Other          32,277        7,971            31,579        7,112
      Total        767,154       294,720          747,974       282,136
      revenues
EXPENSES:
    Maintenance,
    taxes,         215,825       74,966           201,552       73,004
    utilities, and
    promotion
    Other          71,235        15,441           73,203        14,890
    operating
    Management,
    leasing, and   5,321                          27,417
    development
    services
    General and    50,014                         39,659
    administrative
    Interest       130,023       67,948           142,616       68,760
    expense(2)
    Depreciation
    and            155,772       39,336           149,517       38,333
    amortization 
      Total        628,190       197,691          633,964       194,987
      expenses
Nonoperating       1,348         (6)              277           18
income (expense)
                   140,312       97,023           114,287       87,167
Income tax         (3,409)                        (4,964)
expense(3)
Equity in income
of Unconsolidated  52,465                         48,494
Joint Ventures 
Net income         189,368                        157,817
Net income
attributable to
noncontrolling
interests:
    Noncontrolling
    share of
    income of      (10,344)                       (11,930)
    consolidated
    joint
    ventures 
    Noncontrolling
    share of       (46,434)                       (39,713)
    income of TRG
Distributions to
participating      (1,749)                        (1,612)
securities of TRG
Preferred stock    (20,933)                       (21,051)
dividends (4)
Net income
attributable to
Taubman Centers,   109,908                        83,511
Inc. common
shareowners
SUPPLEMENTAL
INFORMATION:
    EBITDA - 100%  426,107       204,307          406,420       194,260
    EBITDA -
    outside        (24,104)      (89,368)         (38,250)      (87,216)
    partners'
    share 
    Beneficial
    interest in    402,003       114,939          368,170       107,044
    EBITDA
    Beneficial
    interest       (121,353)     (37,554)         (126,031)     (35,862)
    expense (2)
    Beneficial
    income tax     (3,409)                        (4,919)
    expense - TRG
    and TCO
    Beneficial
    income tax     181
    expense - TCO
    Non-real
    estate         (3,038)                        (2,671)
    depreciation
    Preferred
    dividends and  (20,933)                       (21,051)
    distributions
    Funds from
    Operations     253,451       77,385           213,498       71,182
    contribution
STRAIGHTLINE AND
PURCHASE
ACCOUNTING
ADJUSTMENTS:
    Net
    straight-line
    adjustments to
    rental
    revenue,
    recoveries,
      and ground
      rent expense 3,999         1,296            4,323         561
      at TRG % 
    Green Hills
    purchase
    accounting     787                            822
    adjustments -
    minimum rents
    increase
    Green Hills,
    El Paseo
    Village, and
    Gardens on El
    Paseo purchase
    accounting 
      adjustments
      - interest   3,180                          3,431
      expense
      reduction
    Waterside
    Shops purchase
    accounting
    adjustments -                1,051
    interest
    expense
    reduction
    With the exception of the Supplemental Information, amounts include 100% of
(1) the Unconsolidated Joint Ventures. Amounts are net of intercompany
    transactions. The Unconsolidated Joint Ventures are presented at 100% in
    order to allow for measurement of their performance as a whole, without
    regard to the Company's ownership interest. In its consolidated financial
    statements, the Company accounts for its investments in the Unconsolidated
    Joint Ventures under the equity method. 
    Includes a charge related to the early extinguishment of debt at The Mall
(2) of Millenia in October 2012 of $3.2 million, of which TRG's share is $1.6
    million.
(3) Income tax expense for the year ended December 31, 2012 include PRC taxes
    of $3.2 million on the sale of Taubman TCBL assets.
    Preferred dividends for the year ended December 31, 2012 include charges of
(4) $3.3 million and $3.1 million incurred in connection with the $100 million
    redemption of the Series G Preferred Stock and the $87 million redemption
    of the Series H Preferred Stock, respectively.

TAUBMAN CENTERS,
INC.
Table 4 - Reconciliation of Net Income Attributable to
Taubman Centers, Inc. Common Shareowners to Funds from
Operations
   and Adjusted
Funds from
Operations
For the Three Months
Ended December 31,
2013 and 2012
(in thousands of dollars
except as noted; may not add
or recalculate due to
rounding)
                               2013                         2012
                               Shares      Per              Shares      Per
                                           Share                        Share 
                      Dollars  /Units      /Unit   Dollars  /Units      /Unit
Net income
attributable to TCO   39,834   63,408,637  0.63    27,907   61,899,628  0.45
common shareowners -
Basic
Add distributions of
participating         436      871,262
securities
Add impact of
share-based           182      787,078             202      1,441,888
compensation
Net income
attributable to TCO   40,452   65,066,977  0.62    28,109   63,341,516  0.44
common shareowners -
Diluted
Add depreciation of
TCO's additional      1,720                0.03    1,717                0.03
basis
Add TCO's additional  49                   0.00
income tax expense
Net income
attributable to TCO
common shareowners,
   excluding step-up
   depreciation and   42,221   65,066,977  0.65    29,826   63,341,516  0.47
   additional income
   tax expense
Add:
   Noncontrolling
   share of income    16,519   25,176,300          12,608   26,345,983
   of TRG 
   Distributions to
   participating                                   403      871,262
   securities of TRG
Net income
attributable to
partnership
unitholders 
   and participating  58,740   90,243,277  0.65    42,837   90,558,761  0.47
   securities
Add (less)
depreciation and
amortization:
   Consolidated
   businesses at      39,510               0.44    40,434               0.45
   100%
   Depreciation of
   TCO's additional   (1,720)              (0.02)  (1,717)              (0.02)
   basis
   Noncontrolling
   partners in        (1,314)              (0.01)  (2,040)              (0.02)
   consolidated
   joint ventures
   Share of
   Unconsolidated     6,382                0.07    6,902                0.08
   Joint Ventures
   Non-real estate    (802)                (0.01)  (683)                (0.01)
   depreciation
Less impact of
share-based           (182)                (0.00)  (202)                (0.00)
compensation
Funds from            100,614  90,243,277  1.11    85,531   90,558,761  0.94
Operations
TCO's average
ownership percentage  71.6%                        70.1%
of TRG
Funds from
Operations
attributable to TCO,
   excluding
   additional income  72,019               1.11    59,995               0.94
   tax expense
Less TCO's
additional income     (49)                 (0.00)
tax expense
Funds from
Operations            71,970               1.11    59,995               0.94
attributable to TCO 
Funds from            100,614  90,243,277  1.11    85,531   90,558,761  0.94
Operations
Early extinguishment
of debt on The Mall                                1,586                0.02
at Millenia
PRC taxes on sale of                               3,158                0.03
Taubman TCBL assets
Adjusted Funds from   100,614  90,243,277  1.11    90,275   90,558,761  1.00
Operations
TCO's average
ownership percentage  71.6%                        70.1%
of TRG
Adjusted Funds from
Operations
attributable to TCO,
   excluding
   additional income  72,019               1.11    63,322               1.00
   tax expense
Less TCO's
additional income     (49)                 (0.00)
tax expense
Adjusted Funds from
Operations            71,970               1.11    63,322               1.00
attributable to TCO 

 

 

TAUBMAN CENTERS,
INC.
Table 5 - Reconciliation of Net Income Attributable to
Taubman Centers, Inc. Common Shareowners to Funds from
Operations
   and Adjusted
Funds from
Operations
For the Year Ended
December 31, 2013
and 2012
(in thousands of dollars
except as noted; may not add
or recalculate due to
rounding)
                               2013                         2012
                               Shares      Per              Shares      Per
                                           Share                        Share 
                      Dollars  /Units      /Unit   Dollars  /Units      /Unit
Net income
attributable to TCO   109,908  63,591,523  1.73    83,511   59,884,455  1.39
common shareowners -
Basic
Add impact of
share-based           497      983,889             672      1,491,989
compensation
Net income
attributable to TCO   110,405  64,575,412  1.71    84,183   61,376,444  1.37
common shareowners -
Diluted
Add depreciation of
TCO's additional      6,880                0.11    6,876                0.11
basis
Add TCO's additional  181                  0.00
income tax expense
Net income
attributable to TCO
common shareowners,
   excluding step-up
   depreciation and   117,466  64,575,412  1.82    91,059   61,376,444  1.48
   additional income
   tax expense
Add:
   Noncontrolling
   share of income    46,434   25,231,483          39,713   26,421,801
   of TRG 
   Distributions to
   participating      1,749    871,262             1,612    871,262
   securities of TRG
Net income
attributable to
partnership
unitholders 
   and participating  165,649  90,678,157  1.83    132,384  88,669,507  1.49
   securities
Add (less)
depreciation and
amortization:
   Consolidated
   businesses at      155,772              1.72    149,517              1.69
   100% 
   Depreciation of
   TCO's additional   (6,880)              (0.08)  (6,876)              (0.08)
   basis
   Noncontrolling
   partners in        (5,090)              (0.06)  (9,690)              (0.11)
   consolidated
   joint ventures
   Share of
   Unconsolidated     24,920               0.27    22,688               0.26
   Joint Ventures
   Non-real estate    (3,038)              (0.03)  (2,671)              (0.03)
   depreciation
Less impact of
share-based           (497)                (0.01)  (672)                (0.01)
compensation
Funds from            330,836  90,678,157  3.65    284,680  88,669,507  3.21
Operations
TCO's average
ownership percentage  71.6%                        69.4%
of TRG
Funds from
Operations
attributable to TCO,
   excluding
   additional income  236,843              3.65    197,671              3.21
   tax expense
Less TCO's
additional income     (181)                (0.00)
tax expense
Funds from
Operations            236,662              3.65    197,671              3.21
attributable to TCO
Funds from            330,836  90,678,157  3.65    284,680  88,669,507  3.21
Operations
Series G and H
Preferred Stock                                    6,412                0.07
redemption charges
Early extinguishment
on debt on The Mall                                1,586                0.02
at Millenia
PRC taxes on sale of                               3,158                0.04
Taubman TCBL assets
Adjusted Funds from   330,836  90,678,157  3.65    295,836  88,669,507  3.34
Operations
TCO's average
ownership percentage  71.6%                        69.4%
of TRG
Adjusted Funds from
Operations
attributable to TCO,
   excluding
   additional income  236,843              3.65    205,430              3.34
   tax expense
Less TCO's
additional income     (181)                (0.00)
tax expense
Adjusted Funds from
Operations            236,662              3.65    205,430              3.34
attributable to TCO

TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to
Beneficial Interest in EBITDA
For the Periods Ended December 31,
2013 and 2012
(in thousands of dollars; amounts attributable to TCO may
not recalculate due to rounding)
                                        Three Months Ended  Year Ended
                                        2013       2012     2013      2012
Net income                              66,166     49,131   189,368   157,817
Add (less) depreciation and
amortization:
    Consolidated businesses at 100%     39,510     40,434   155,772   149,517
    Noncontrolling partners in          (1,314)    (2,040)  (5,090)   (9,690)
    consolidated joint ventures
    Share of Unconsolidated Joint       6,382      6,902    24,920    22,688
    Ventures
Add (less) interest expense and income
tax expense:
    Interest expense:
         Consolidated businesses at     30,434     33,470   130,023   142,616
         100% 
         Noncontrolling partners in     (2,130)    (3,951)  (8,670)   (16,585)
         consolidated joint ventures
         Share of Unconsolidated Joint  9,362      10,778   37,554    35,862
         Ventures
    Share of income tax expense         694        3,526    3,409     4,919
Less noncontrolling share of income of  (3,592)    (5,142)  (10,344)  (11,930)
consolidated joint ventures
Beneficial Interest in EBITDA           145,512    133,108  516,942   475,214
TCO's average ownership percentage of   71.6%      70.1%    71.6%     69.4%
TRG
Beneficial Interest in EBITDA           104,157    93,368   370,094   329,884
attributable to TCO

 

 

TAUBMAN CENTERS,
INC.
Table 7 -
Reconciliation of
Net Income to Net
Operating Income
(NOI)
For the Periods
Ended December 31,
2013, 2012, and
2011
(in thousands of
dollars)
                    Three Months Ended      Three Months Ended        Year Ended                Year Ended
                    2013        2012        2012        2011          2013         2012         2012         2011
Net income          66,166      49,131      49,131      220,796       189,368      157,817      157,817      287,398
Add (less)
depreciation and
amortization:
    Consolidated
    businesses at
    100% -          39,510      40,434      40,434      33,204        155,772      149,517      149,517      132,707
    continuing
    operations
    Consolidated
    businesses at
    100% -                                              1,279                                                10,309
    discontinued
    operations
    Noncontrolling
    partners in     (1,314)     (2,040)     (2,040)     (3,041)       (5,090)      (9,690)      (9,690)      (11,152)
    consolidated
    joint ventures
    Share of
    Unconsolidated  6,382       6,902       6,902       6,752         24,920       22,688       22,688       23,102
    Joint Ventures
Add (less) interest
expense and income
tax expense:
    Interest
    expense:
     Consolidated
     businesses at
     100% -         30,434      33,470      33,470      32,748        130,023      142,616      142,616      122,277
     continuing
     operations
     Consolidated
     businesses at
     100% -                                             4,053                                                21,427
     discontinued
     operations
     Noncontrolling
     partners in    (2,130)     (3,951)     (3,951)     (3,744)       (8,670)      (16,585)     (16,585)     (12,153)
     consolidated
     joint ventures
     Share of
     Unconsolidated 9,362       10,778      10,778      8,201         37,554       35,862       35,862       31,607
     Joint Ventures
    Share of income 694         3,526       3,526       197           3,409        4,919        4,919        610
    tax expense 
Less noncontrolling
share of income of  (3,592)     (5,142)     (5,142)     (3,855)       (10,344)     (11,930)     (11,930)     (14,352)
consolidated joint
ventures
Add EBITDA
attributable to
outside partners:
    EBITDA
    attributable to
    noncontrolling  7,036       11,133      11,133      10,640        24,104       38,250       38,250       37,657
    partners in
    consolidated
    joint ventures
    EBITDA
    attributable to
    outside         26,598      24,957      24,957      24,041        89,368       87,216       87,216       83,565
    partners in
    Unconsolidated
    Joint Ventures
EBITDA at 100%      179,146     169,198     169,198     331,271       630,414      600,680      600,680      713,002
Add (less) items
excluded from
shopping center
NOI:
    General and
    administrative  13,338      11,638      11,638      8,600         50,014       39,659       39,659       31,598
    expenses
    Management,
    leasing, and    (1,039)     1,373       1,373       (5,665)       (10,821)     (4,394)      (4,394)      (13,596)
    development
    services, net
    Gains on
    extinguishment                                      (174,171)                                            (174,171)
    of debt
    Gains on sales
    of peripheral                                                     (863)                                  (519)
    land
    Acquisition                                         3,614                                                5,295
    costs
    Nonoperating                                                      1,019
    expense
    Gain on sale of
    marketable                                                        (1,323)
    securities
    Interest income (31)        (25)        (25)        (436)         (175)        (295)        (295)        (960)
    Straight-line   (3,015)     (1,981)     (1,981)     (1,152)       (7,335)      (6,516)      (6,516)      (2,531)
    of rents
    Non-center
    specific
    operating       6,449       9,640       9,640       11,026        24,700       31,413       31,413       33,069
    expenses and
    other
NOI - all centers   194,848     189,843     189,843     173,087       685,630      660,547      660,547      591,187
at 100%
Less - NOI of
non-comparable      (2,900) (1) (2,198) (2) (9,475) (3) (2,209)   (4) (10,195) (1) (8,010)  (2) (29,705) (3) (4,120)   (4)
centers
NOI at 100% -       191,948     187,645     180,368     170,878       675,435      652,537      630,842      587,067
comparable centers
NOI - growth %      2.3%                    5.6%                      3.5%                      7.5%
NOI at 100% -       191,948     187,645     180,368     170,878       675,435      652,537      630,842      587,067
comparable centers 
Lease cancellation  (2,760)     (1,913)     (1,913)     (244)         (5,767)      (4,928)      (4,928)      (3,230)
income
NOI at 100% -
comparable centers  189,188     185,732     178,455     170,634       669,668      647,609      625,914      583,837
excluding lease
cancellation income
NOI at 100%
excluding lease     1.9%                    4.6%                      3.4%                      7.2%
cancellation income
- growth %
(1) Includes City Creek Center and Taubman Prestige Outlets Chesterfield.
(2) Includes City Creek Center.
(3) Includes City Creek Center, The Mall at Green Hills, The Gardens on El
    Paseo and El Paseo Village.
(4) Includes The Pier Shops, Regency Square, The Mall at Green Hills,
    The Gardens on El Paseo and El Paseo Village.

TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of December 31, 2013 and December 31, 2012
 (in thousands of dollars) 
                                            As of
                                            December 31,       December 31,
                                            2013               2012
Consolidated Balance Sheet of Taubman
Centers, Inc. :
Assets:
    Properties                              4,485,090          4,246,000
    Accumulated depreciation and            (1,516,982)        (1,395,876)
    amortization
                                            2,968,108          2,850,124
    Investment in Unconsolidated Joint      327,692            214,152
    Ventures
    Cash and cash equivalents               40,993             32,057
    Restricted cash                         5,046              6,138
    Accounts and notes receivable, net      73,193             69,033
    Accounts receivable from related        1,804              2,009
    parties
    Deferred charges and other assets       89,386             94,982
                                            3,506,222          3,268,495
Liabilities:
    Notes payable                           3,058,053          2,952,030
    Accounts payable and accrued            292,280            278,098
    liabilities
    Distributions in excess of
    investments in and net income of
         Unconsolidated Joint Ventures      371,549            383,293
                                            3,721,882          3,613,421
Equity:
    Taubman Centers, Inc. Shareowners'
    Equity:
         Series B Non-Participating         25                 25
         Convertible Preferred Stock
         Series J Cumulative Redeemable
         Preferred Stock
         Series K Cumulative Redeemable
         Preferred Stock
         Common stock                       631                633
         Additional paid-in capital         796,787            657,071
         Accumulated other comprehensive    (8,914)            (22,064)
         income (loss)
         Dividends in excess of net         (908,656)          (891,283)
         income
                                            (120,127)          (255,618)
    Noncontrolling interests:
         Noncontrolling interests in        (37,191)           (45,066)
         consolidated joint ventures
         Noncontrolling interests in        (58,342)           (44,242)
         partnership equity of TRG 
                                            (95,533)           (89,308)
                                            (215,660)          (344,926)
                                            3,506,222          3,268,495
Combined Balance Sheet of Unconsolidated
Joint Ventures (1):
Assets:
    Properties                              1,305,658          1,129,647
    Accumulated depreciation and            (478,820)          (473,101)
    amortization
                                            826,838            656,546
    Cash and cash equivalents               28,782             30,070
    Accounts and notes receivable, net      33,626             26,032
    Deferred charges and other assets       28,095             31,282
                                            917,341            743,930
Liabilities:
    Mortgage notes payable                  1,551,161          1,490,857
    Accounts payable and other              70,226             68,282
    liabilities
                                            1,621,387          1,559,139
Accumulated Deficiency in Assets:
    Accumulated deficiency in assets -      (406,266)          (459,390)
    TRG
    Accumulated deficiency in assets -      (285,904)          (333,752)
    Joint Venture Partners
    Accumulated other comprehensive         (5,938)            (11,021)
    income (loss) - TRG
    Accumulated other comprehensive
    income (loss) - Joint Venture           (5,938)            (11,046)
    Partners
                                            (704,046)          (815,209)
                                            917,341            743,930
(1) Unconsolidated Joint Venture amounts exclude the balances of entities that
    own interests in Asia projects that are currently under development.

 

TAUBMAN CENTERS, INC.
Table 9 -  Annual Guidance
(all dollar amounts per common share on a diluted basis; amounts may not add
due to rounding)
                                                       Range for Year Ended
                                                       December 31, 2014
Funds from Operations per common share                 3.72        3.82
Real estate depreciation - TRG                         (1.77)      (1.72)
Distributions on participating securities of TRG       (0.02)      (0.02)
Depreciation of TCO's additional basis in TRG          (0.11)      (0.11)
Net income attributable to common shareowners, per     1.81        1.96
common share (EPS) (1)

    The range provided excludes estimates for the gains on the sale of Arizona
(1) Mills; land in Syosset, New York; and interests totaling a 49.9% ownership
    in International Plaza. As a result of these transactions, the company
    expects to recognize gains in excess of $450 million, or approximately
    $5.00 per diluted share, in the first quarter of 2014.

 

SOURCE Taubman Centers, Inc.

Website: http://www.taubman.com
Contact: Barbara Baker, Taubman, Vice President, Corporate Affairs & Investor
Relations, 248-258-7367, bbaker@taubman.com
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