Taubman Centers Issues Third Quarter Results -- Funds From Operations, Average Rents, Occupancy, and Leased Space Up

-- Net Operating Income (NOI) Excluding Lease Cancellation Income Up 3.2%

-- Share Repurchase Program Commences

BLOOMFIELD HILLS, Mich., Oct. 24, 2013 /PRNewswire/ -- Taubman Centers, Inc. (NYSE:   TCO) today reported financial results for the third quarter of 2013.

 


September 30,

2013

Three Months

Ended

September 30,

2012

Three Months

Ended

September 30,

2013

Nine Months

Ended

September 30,

2012

Nine Months

Ended

Net income allocable to common

shareholders (EPS) per diluted share

Growth rate 

 

$0.38

8.6%

 

$0.35

 

$1.09

18.5%

 

$0.92

Funds from Operations (FFO) per diluted

share

Growth rate

 

$0.89

12.7%

 

$0.79

 

$2.53

11.9%

 

$2.26

Adjusted Funds from Operations (Adjusted

FFO) per diluted share(1)

Growth rate

 

$0.89

3.5%

 

$0.86

 

$2.53

8.6%

 

$2.33

(1)   Adjusted FFO for the three and nine months ended September 30, 2012 excludes charges related

        to the redemption of the Series G and H Preferred Stock. 

 

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

"This quarter our results were driven by strong rents, increased occupancy, and the late 2012 acquisitions of additional interests in International Plaza (Tampa, Fla.) and Waterside Shops (Naples, Fla.)," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. "We also received the final installment of the incentive fee for our very successful leasing of IFC Mall in Seoul, South Korea."

Rents, Occupancy, Leased Space, and NOI Up

Average rent per square foot for the third quarter of 2013 was $48.66, up 4.6 percent from $46.52 in the comparable period last year. Year-to-date, average rent per square foot is up 4.7 percent.

Ending occupancy in comparable centers was 91.3 percent on September 30, 2013, up 0.8 percent from 90.5 percent on September 30, 2012. Leased space in comparable centers was 93.1 percent on September 30, 2013, up 0.6 percent from 92.5 percent on September 30, 2012. 

For the quarter, NOI excluding lease cancellation income was up 3.2 percent, bringing year-to-date growth to 4 percent. 

Sales

Mall tenant sales per square foot at Taubman properties were up 0.4 percent from the third quarter of 2012. This brings the company's 12-month trailing mall tenant sales per square foot to $699, an increase of 2.6 percent from the 12-months ended September 30, 2012. Year-to-date, sales are up 2 percent.

Taubman Prestige Outlets Chesterfield Opens

In August, Taubman Prestige Outlets Chesterfield opened on schedule in Chesterfield, Missouri. "We were very pleased with the strong attendance at our grand opening and we look forward to building upon that momentum," said Mr. Taubman. "There's clear synergy with existing retail on one of the most well-known retail interchanges in the St. Louis metropolitan area". See Taubman Prestige Outlets Chesterfield Opened Today In St. LouisAugust 2, 2013.

Revitalization of International Market Place Announced

In August, Taubman announced its plans to redevelop the International Market Place (Waikiki, Honolulu, Hawaii). This iconic project will include 360,000 square feet of retail, dining, and entertainment, and will feature luxury-focused merchandising with the only full-line Saks Fifth Avenue in Hawaii. Taubman will fund the total project cost, which is expected to be approximately $400 million, and will have a 93.5% ownership interest in the project. The center is scheduled to open in spring 2016. See Taubman Centers And Queen Emma Land Company Announce Plans To Move Forward With The Revitalization Of The International Market Place In WaikikiAugust 9, 2013.

Share Repurchase Program Announced

In August, the company announced a $200 million share repurchase program. During the third quarter, the company repurchased 313,042 shares of its common stock at an average price of $67.68 per share. At September 30, the company had $179 million available under its share repurchase authorization. See Taubman Centers Announces $200 Million Share Repurchase ProgramAugust 26, 2013.

2013 Guidance

"We are in-line with our expectations and continue to expect NOI growth of about three percent for the year. As a result, our 2013 FFO guidance range remains at $3.57 to $3.67 per diluted share," said Mr. Taubman. 2013 EPS is expected to be in the range of $1.64 to $1.76.

Supplemental Investor Information Available

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

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

Investor Conference Call 

The company will host a conference call at 10:00 AM Eastern Daylight Time on Friday, October 25 to discuss these results, business conditions and the company's outlook for the remainder of 2013. The conference call will be simulcast at www.taubman.com under "Investing" as well as www.earnings.com and www.streetevents.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 28 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 September 30, 2013 and 2012

(in thousands of dollars, except as indicated)










Three Months Ended 


Year to Date


2013


2012


2013


2012









Net income

43,243


45,061


123,202


108,686

Noncontrolling share of income of consolidated joint ventures

(2,198)


(2,079)


(6,752)


(6,788)

Noncontrolling share of income of TRG 

(10,338)


(10,216)


(29,915)


(27,105)

Preferred stock dividends (1)

(5,784)


(10,663)


(15,148)


(17,980)

Distributions to participating securities of TRG

(435)


(403)


(1,313)


(1,209)

Net income attributable to Taubman Centers, Inc. common shareowners

24,488


21,700


70,074


55,604

Net income per common share - basic 

0.38


0.36


1.10


0.94

Net income per common share - diluted

0.38


0.35


1.09


0.92

Beneficial interest in EBITDA - Combined (2)

128,320


121,969


371,430


342,106

Funds from Operations(2)

80,500


70,477


230,222


199,149

Funds from Operations attributable to TCO (2)

57,737


49,071


164,692


137,676

Funds from Operations per common share - basic(2)

0.91


0.81


2.59


2.33

Funds from Operations per common share - diluted (2)

0.89


0.79


2.53


2.26

Adjusted Funds from Operations (3)

80,500


76,889


230,222


205,561

Adjusted Funds from Operations attributable to TCO (3)

57,737


53,535


164,692


142,108

Adjusted Funds from Operations per common share- basic (3)

0.91


0.88


2.59


2.40

Adjusted Funds from Operations per common share- diluted (3)

0.89


0.86


2.53


2.33

Weighted average number of common shares outstanding - basic

63,753,748


60,571,612


63,653,155


59,207,828

Weighted average number of common shares outstanding - diluted

64,690,909


62,025,322


64,702,648


60,716,518

Common shares outstanding at end of period

63,524,788


61,698,618





Weighted average units - Operating Partnership - basic

88,933,226


86,994,524


88,903,234


85,655,085

Weighted average units - Operating Partnership - diluted

90,741,649


89,319,495


90,823,989


88,035,037

Units outstanding at end of period - Operating Partnership

88,702,310


88,120,226





Ownership percentage of the Operating Partnership at end of period

71.6%


70.0%





Number of owned shopping centers at end of period

25


24


25


24









Operating Statistics:








Net Operating Income excluding lease cancellation income - growth % (4)

3.2%




4.0%



Mall tenant sales - all centers (5)

1,405,246


1,378,384


4,266,230


4,128,924

Mall tenant sales - comparable (4)(5)

1,356,765


1,352,763


4,149,366


4,067,048

Ending occupancy - all centers

90.9%


90.4%


90.9%


90.4%

Ending occupancy - comparable(4)

91.3%


90.5%


91.3%


90.5%

Average occupancy - all centers 

90.8%


90.1%


90.7%


89.9%

Average occupancy - comparable (4)

91.1%


90.3%


90.7%


90.1%

Leased space - all centers

92.6%


92.6%


92.6%


92.6%

Leased space - comparable(4)

93.1%


92.5%


93.1%


92.5%

All centers:








Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (5)

14.2%


14.0%


13.9%


13.4%

Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (5)

14.1%


13.5%


13.2%


12.8%

Mall tenant occupancy costs as a percentage of tenant sales - Combined (5)

14.2%


13.9%


13.7%


13.2%

Comparable centers:








Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (4)(5)

14.4%


13.9%


13.9%


13.4%

Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (5)

14.1%


13.5%


13.2%


12.8%

Mall tenant occupancy costs as a percentage of tenant sales - Combined (4)(5)

14.3%


13.8%


13.7%


13.2%

Average rent per square foot - Consolidated Businesses (4)

48.58


46.91


48.50


46.71

Average rent per square foot - Unconsolidated Joint Ventures 

48.85


45.61


48.30


45.27

Average rent per square foot - Combined (4)

48.66


46.52


48.44


46.27

 

 

(1)

Preferred dividends for the three and nine months ended September 30, 2012 include charges 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.





(2)

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 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.





(3)

FFO for the three and nine months ended September 30, 2012 includes, and Adjusted FFO excludes, charges related to the redemption of Series G and H Preferred Stock.  





(4)

Statistics exclude non-comparable centers.  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. 

 

 

 TAUBMAN CENTERS, INC. 

 Table 2 - Income Statement 

 For the Three Months Ended September 30, 2013 and 2012 

 (in thousands of dollars) 














2013


2012




CONSOLIDATED

BUSINESSES


 UNCONSOLIDATED
JOINT
VENTURES (1) 


CONSOLIDATED

 BUSINESSES


 UNCONSOLIDATED
JOINT VENTURES (1) 











REVENUES:









Minimum rents

103,501


42,532


99,564


40,016


Percentage rents

7,021


2,137


6,315


2,366


Expense recoveries

67,943


25,738


66,633


26,224


Management, leasing, and development services

8,753




10,234




Other

6,720


1,452


6,793


1,829



Total revenues

193,938


71,859


189,539


70,435











EXPENSES:









Maintenance, taxes, utilities, and promotion

55,375


18,807


53,253


18,588


Other operating

19,295


3,372


16,128


3,581


Management, leasing, and development services

1,027




6,165




General and administrative

11,812




9,571




Interest expense 

32,515


17,048


34,943


16,617


Depreciation and amortization 

40,982


10,068


36,414


9,095



Total expenses

161,006


49,295


156,474


47,881











Nonoperating income (expense)

(456)


(1)


56


18




32,476


22,563


33,121


22,572

Income tax expense

(1,453)




(732)



Equity in income of Unconsolidated Joint Ventures

12,220




12,672













Net income 

43,243




45,061



Net income attributable to noncontrolling interests:









Noncontrolling share of income of consolidated joint ventures 

(2,198)




(2,079)




Noncontrolling share of income of TRG

(10,338)




(10,216)



Distributions to participating securities of TRG

(435)




(403)



Preferred stock dividends (2)

(5,784)




(10,663)



Net income attributable to Taubman Centers, Inc. common shareowners

24,488




21,700























SUPPLEMENTAL INFORMATION:









EBITDA - 100% 

105,973


49,679


104,478


48,284


EBITDA - outside partners' share 

(5,653)


(21,679)


(9,257)


(21,536)


Beneficial interest in EBITDA

100,320


28,000


95,221


26,748


Beneficial interest expense 

(30,352)


(9,415)


(30,718)


(8,765)


Beneficial income tax expense - TRG and TCO

(1,453)




(667)




Beneficial income tax benefit - TCO

(29)








Non-real estate depreciation

(787)




(679)




Preferred dividends and distributions 

(5,784)




(10,663)




Funds from Operations contribution

61,915


18,585


52,494


17,983











STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:









Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG % 









1,081


226


1,194


187


Green Hills purchase accounting adjustments - minimum rents increase

186




212




Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting adjustments - interest expense reduction









858




858




Waterside Shops purchase accounting adjustments - interest expense reduction



263















(1)

With the exception of the Supplemental Information, amounts include 100% of 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. 

(2)

Preferred dividends for the three months ended September 30, 2012 include charges 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.


 

 

 TAUBMAN CENTERS, INC. 

 Table 3 - Income Statement 

 For the Nine Months Ended September 30, 2013 and 2012 

 (in thousands of dollars) 














2013


2012




CONSOLIDATED

 BUSINESSES


 UNCONSOLIDATED
JOINT
VENTURES (1) 


CONSOLIDATED

 BUSINESSES


 UNCONSOLIDATED
JOINT
VENTURES (1) 











REVENUES:









Minimum rents

309,043


124,679


292,248


119,213


Percentage rents

13,732


5,763


12,767


5,797


Expense recoveries

197,549


73,922


185,325


72,561


Management, leasing, and development services

13,954




27,441




Other

21,104


4,820


20,487


4,945



Total revenues

555,382


209,184


538,268


202,516











EXPENSES:









Maintenance, taxes, utilities, and promotion

154,694


53,993


143,854


52,202


Other operating

53,950


11,643


52,360


11,461


Management, leasing, and development services

4,172




21,674




General and administrative

36,676




28,021




Interest expense 

99,589


50,976


109,146


48,107


Depreciation and amortization 

116,262


29,326


109,083


26,690



Total expenses

465,343


145,938


464,138


138,460











Nonoperating income (expense)

1,831


(1)


251


19




91,870


63,245


74,381


64,075

Income tax expense 

(2,715)




(1,438)



Equity in income of Unconsolidated Joint Ventures 

34,047




35,743













Net income

123,202




108,686



Net income attributable to noncontrolling interests:









Noncontrolling share of income of consolidated joint ventures 

(6,752)




(6,788)




Noncontrolling share of income of TRG

(29,915)




(27,105)



Distributions to participating securities of TRG

(1,313)




(1,209)



Preferred stock dividends (2)

(15,148)




(17,980)



Net income attributable to Taubman Centers, Inc. common shareowners

70,074




55,604























SUPPLEMENTAL INFORMATION:









EBITDA - 100% 

307,721


143,547


292,610


138,872


EBITDA - outside partners' share 

(17,068)


(62,770)


(27,117)


(62,259)


Beneficial interest in EBITDA

290,653


80,777


265,493


76,613


Beneficial interest expense 

(93,049)


(28,192)


(96,512)


(25,084)


Beneficial income tax expense - TRG and TCO

(2,715)




(1,393)




Beneficial income tax expense - TCO

132








Non-real estate depreciation

(2,236)




(1,988)




Preferred dividends and distributions

(15,148)




(17,980)




Funds from Operations contribution

177,637


52,585


147,620


51,529











STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:









Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG % 









2,881


451


2,544


360


Green Hills purchase accounting adjustments - minimum rents increase

590




610




Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting adjustments - interest expense reduction









2,573




2,573




Waterside Shops purchase accounting adjustments - interest expense reduction


788















(1)

With the exception of the Supplemental Information, amounts include 100% of 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. 

(2)

Preferred dividends for the nine months ended September 30, 2012 include charges 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.


 

 

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 September 30, 2013 and 2012

(in thousands of dollars except as noted; may not add or recalculate due to rounding)































2013






2012







Shares 


Per Share




Shares 


Per Share 



Dollars


/Units


/Unit


Dollars


/Units


/Unit














Net income attributable to TCO common shareowners - Basic

24,488


63,753,748


0.38


21,700


60,571,612


0.36














Add impact of share-based compensation

107


937,161




168


1,453,710
















Net income attributable to TCO common shareowners - Diluted

24,595


64,690,909


0.38


21,868


62,025,322


0.35














Add depreciation of TCO's additional basis

1,720




0.03


1,720




0.03

Less TCO's additional income tax benefit

(29)




(0.00)




















Net income attributable to TCO common shareowners, excluding step-up depreciation and additional income tax benefit












26,286


64,690,909


0.41


23,588


62,025,322


0.38














Add:













Noncontrolling share of income of TRG 

10,338


25,179,478




10,216


26,422,911




Distributions to participating securities of TRG

435


871,262




403


871,262
















Net income attributable to partnership unitholders 













and participating securities

37,059


90,741,649


0.41


34,207


89,319,495


0.38














Add (less) depreciation and amortization:













Consolidated businesses at 100%

40,982




0.45


36,414




0.41


Depreciation of TCO's additional basis

(1,720)




(0.02)


(1,720)




(0.02)


Noncontrolling partners in consolidated joint ventures

(1,292)




(0.01)


(2,888)




(0.03)


Share of Unconsolidated Joint Ventures

6,365




0.07


5,311




0.06


Non-real estate depreciation

(787)




(0.01)


(679)




(0.01)














Less impact of share-based compensation

(107)




(0.00)


(168)




(0.00)














Funds from Operations

80,500


90,741,649


0.89


70,477


89,319,495


0.79














TCO's average ownership percentage of TRG

71.7%






69.6%


















Funds from Operations attributable to TCO, excluding additional income tax benefit












57,708




0.89


49,071




0.79














Add TCO's additional income tax benefit

29




0.00




















Funds from Operations attributable to TCO

57,737




0.89


49,071




0.79














Funds from Operations

80,500


90,741,649


0.89


70,477


89,319,495


0.79














Charge upon redemption of Series G and H Preferred Stock







6,412




0.07














Adjusted Funds from Operations

80,500


90,741,649


0.89


76,889


89,319,495


0.86














TCO's average ownership percentage of TRG

71.7%






69.6%


















Adjusted Funds from Operations attributable to TCO, excluding additional income tax benefit












57,708




0.89


53,535




0.86














Add TCO's additional income tax benefit

29




0.00




















Adjusted Funds from Operations attributable to TCO

57,737




0.89


53,535




0.86














 

 

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 Nine Months Ended September 30, 2013 and 2012

(in thousands of dollars except as noted; may not add or recalculate due to rounding)































2013






2012







Shares 


Per Share




Shares 


Per Share 



Dollars


/Units


/Unit


Dollars


/Units 


/Unit














Net income attributable to TCO common shareowners - Basic

70,074


63,653,155


1.10


55,604


59,207,828


0.94














Add impact of share-based compensation

352


1,049,493




470


1,508,690
















Net income attributable to TCO common shareowners - Diluted

70,426


64,702,648


1.09


56,074


60,716,518


0.92














Add depreciation of TCO's additional basis

5,160




0.08


5,159




0.08

Add TCO's additional income tax expense

132




0.00




















Net income attributable to TCO common shareowners, excluding step-up depreciation and additional income tax expense












75,718


64,702,648


1.17


61,233


60,716,518


1.01














Add:













Noncontrolling share of income of TRG 

29,915


25,250,079




27,105


26,447,257




Distributions to participating securities of TRG

1,313


871,262




1,209


871,262
















Net income attributable to partnership unitholders 













and participating securities

106,946


90,823,989


1.18


89,547


88,035,037


1.02














Add (less) depreciation and amortization:













Consolidated businesses at 100% 

116,262




1.28


109,083




1.24


Depreciation of TCO's additional basis

(5,160)




(0.06)


(5,159)




(0.06)


Noncontrolling partners in consolidated joint ventures

(3,776)




(0.04)


(7,650)




(0.09)


Share of Unconsolidated Joint Ventures

18,538




0.20


15,786




0.18


Non-real estate depreciation

(2,236)




(0.02)


(1,988)




(0.02)














Less impact of share-based compensation

(352)




(0.00)


(470)




(0.01)














Funds from Operations

230,222


90,823,989


2.53


199,149


88,035,037


2.26














TCO's average ownership percentage of TRG

71.6%






69.1%


















Funds from Operations attributable to TCO, excluding additional income tax expense












164,824




2.53


137,676




2.26














Less TCO's additional income tax expense

(132)




(0.00)




















Funds from Operations attributable to TCO

164,692




2.53


137,676




2.26














Funds from Operations

230,222


90,823,989


2.53


199,149


88,035,037


2.26














Charge upon redemption of Series G and H Preferred Stock







6,412




0.07














Adjusted Funds from Operations

230,222


90,823,989


2.53


205,561


88,035,037


2.33














TCO's average ownership percentage of TRG

71.6%






69.1%


















Adjusted Funds from Operations attributable to TCO, excluding additional income tax expense












164,824




2.53


142,108




2.33














Less TCO's additional income tax expense

(132)




(0.00)




















Adjusted Funds from Operations attributable to TCO

164,692




2.53


142,108




2.33














 

 

TAUBMAN CENTERS, INC.

Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA

For the Periods Ended September 30, 2013 and 2012

(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)














Three Months Ended


Year to Date




2013


2012


2013


2012











Net income

43,243


45,061


123,202


108,686











Add (less) depreciation and amortization:









Consolidated businesses at 100%

40,982


36,414


116,262


109,083


Noncontrolling partners in consolidated joint ventures

(1,292)


(2,888)


(3,776)


(7,650)


Share of Unconsolidated Joint Ventures

6,365


5,311


18,538


15,786











Add (less) interest expense and income tax expense:









Interest expense:










Consolidated businesses at 100% 

32,515


34,943


99,589


109,146



Noncontrolling partners in consolidated joint ventures

(2,163)


(4,225)


(6,540)


(12,634)



Share of Unconsolidated Joint Ventures

9,415


8,765


28,192


25,084


Share of income tax expense

1,453


667


2,715


1,393











Less noncontrolling share of income of consolidated joint ventures

(2,198)


(2,079)


(6,752)


(6,788)











Beneficial Interest in EBITDA

128,320


121,969


371,430


342,106











TCO's average ownership percentage of TRG

71.7%


69.6%


71.6%


69.1%











Beneficial Interest in EBITDA attributable to TCO

91,989


84,923


265,925


236,516











 

 

TAUBMAN CENTERS, INC.





Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)



For the Periods Ended September 30, 2013 and 2012



(in thousands of dollars)




























Three Months Ended


Three Months Ended


Year to Date


Year to Date





2013


2012


2012


2011


2013


2012


2012


2011





















Net income


43,243


45,061


45,061


21,868


123,202


108,686


108,686


66,602





















Add (less) depreciation and amortization:


















Consolidated businesses at 100% - continuing operations

40,982


36,414


36,414


33,054


116,262


109,083


109,083


99,503



Consolidated businesses at 100% - discontinued operations







5,361








9,030



Noncontrolling partners in consolidated joint ventures

(1,292)


(2,888)


(2,888)


(2,404)


(3,776)


(7,650)


(7,650)


(8,111)



Share of Unconsolidated Joint Ventures

6,365


5,311


5,311


5,486


18,538


15,786


15,786


16,350





















Add (less) interest expense and income tax expense:


















Interest expense:



















Consolidated businesses at 100% - continuing operations

32,515


34,943


34,943


30,064


99,589


109,146


109,146


89,529




Consolidated businesses at 100% - discontinued operations







6,354








17,374




Noncontrolling partners in consolidated joint ventures

(2,163)


(4,225)


(4,225)


(2,767)


(6,540)


(12,634)


(12,634)


(8,409)




Share of Unconsolidated Joint Ventures

9,415


8,765


8,765


8,082


28,192


25,084


25,084


23,406



Share of income tax expense

1,453


667


667


208


2,715


1,393


1,393


413





















Less noncontrolling share of income of consolidated joint ventures

(2,198)


(2,079)


(2,079)


(4,327)


(6,752)


(6,788)


(6,788)


(10,497)





















Add EBITDA attributable to outside partners:


















EBITDA attributable to noncontrolling partners in consolidated joint ventures

5,653


9,257


9,257


9,498


17,068


27,117


27,117


27,017



EBITDA attributable to outside partners in Unconsolidated Joint Ventures

21,679


21,536


21,536


20,326


62,770


62,259


62,259


59,524





















EBITDA at 100%

155,652


152,762


152,762


130,803


451,268


431,482


431,482


381,731





















Add (less) items excluded from shopping center NOI:


















General and administrative expenses

11,812


9,571


9,571


7,709


36,676


28,021


28,021


22,998



Management, leasing, and development services, net

(7,726)


(4,069)


(4,069)


(2,194)


(9,782)


(5,767)


(5,767)


(7,931)



Gains on sales of peripheral land









(863)






(519)



Interest income

(43)


(74)


(74)


(225)


(144)


(270)


(270)


(528)



Nonoperating expense

500








500









Gain on sale of marketable securities









(1,323)









Straight-line of rents

(1,706)


(2,055)


(2,055)


(836)


(4,320)


(4,535)


(4,535)


(1,379)



Acquisition costs







1,681








1,681



Non-center specific operating expenses and other

7,995


6,357


6,357


7,244


18,781


21,773


21,773


22,057





















NOI - all centers at 100%

166,484


162,492


162,492


144,182


490,793


470,704


470,704


418,110





















Less - NOI of non-comparable centers

(1,781)

(1)

(2,487)

(1)

(7,459)

(2)

(33)

(3)

(7,306)

(1)

(5,842)

(1)

(20,230)

(2)

(1,909)

(3)




















NOI at 100% - comparable centers

164,703


160,005


155,033


144,149


483,487


464,862


450,474


416,201





















NOI - growth %

2.9%




7.6%




4.0%




8.2%










































NOI at 100% - comparable centers

164,703


160,005


155,033


144,149


483,487


464,862


450,474


416,201





















Lease cancellation income

(741)


(1,076)


(1,076)


(787)


(3,007)


(3,015)


(3,015)


(2,987)





















NOI at 100% - comparable centers excluding lease cancellation income

163,962


158,929


153,957


143,362


480,480


461,847


447,459


413,214





















NOI excluding lease cancellation income - growth %

3.2%




7.4%




4.0%




8.3%





























































(1)

Includes City Creek Center and Taubman Prestige Outlets Chesterfield.







(2)

Includes City Creek Center, The Mall at Green Hills, The Gardens on El Paseo and El Paseo Village.

(3)

Includes The Pier Shops and Regency Square.








 

 

TAUBMAN CENTERS, INC.

Table 8 - Balance Sheets

As of September 30, 2013 and December 31, 2012

 (in thousands of dollars) 




As of




September 30, 2013


December 31, 2012

Consolidated Balance Sheet of Taubman Centers, Inc. :










Assets:





Properties

4,397,434


4,246,000


Accumulated depreciation and amortization

(1,484,052)


(1,395,876)




2,913,382


2,850,124


Investment in Unconsolidated Joint Ventures

335,393


214,152


Cash and cash equivalents

32,377


32,057


Restricted cash 

7,164


6,138


Accounts and notes receivable, net

61,103


69,033


Accounts receivable from related parties

1,900


2,009


Deferred charges and other assets

87,520


94,982




3,438,839


3,268,495







Liabilities:





Notes payable

2,985,952


2,952,030


Accounts payable and accrued liabilities

285,763


278,098


Distributions in excess of investments in and net income of






Unconsolidated Joint Ventures

378,650


383,293




3,650,365


3,613,421







Equity:





Taubman Centers, Inc. Shareowners' Equity:






Series B Non-Participating Convertible Preferred Stock

25


25



Series J Cumulative Redeemable Preferred Stock






Series K Cumulative Redeemable Preferred Stock






Common stock

635


633



Additional paid-in capital

813,139


657,071



Accumulated other comprehensive income (loss)

(14,274)


(22,064)



Dividends in excess of net income

(916,977)


(891,283)




(117,452)


(255,618)


Noncontrolling interests:






Noncontrolling interests in consolidated joint ventures

(38,757)


(45,066)



Noncontrolling interests in partnership equity of TRG 

(55,317)


(44,242)




(94,074)


(89,308)




(211,526)


(344,926)




3,438,839


3,268,495



















Combined Balance Sheet of Unconsolidated Joint Ventures (1):







Assets:





Properties

1,142,770


1,129,647


Accumulated depreciation and amortization

(489,626)


(473,101)




653,144


656,546


Cash and cash equivalents

22,954


30,070


Accounts and notes receivable, net

24,067


26,032


Deferred charges and other assets  

26,039


31,282




726,204


743,930







Liabilities:





Mortgage notes payable

1,482,584


1,490,857


Accounts payable and other liabilities

53,629


68,282




1,536,213


1,559,139







Accumulated Deficiency in Assets:





Accumulated deficiency in assets - TRG

(459,409)


(459,390)


Accumulated deficiency in assets - Joint Venture Partners

(336,636)


(333,752)


Accumulated other comprehensive income (loss) - TRG

(6,982)


(11,021)


Accumulated other comprehensive income (loss) - Joint Venture Partners

(6,982)


(11,046)




(810,009)


(815,209)




726,204


743,930







(1)

Unconsolidated Joint Venture amounts exclude the balances of entities that own interests in 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, 2013






Funds from Operations per common share

3.57


3.67






Real estate depreciation - TRG

(1.81)


(1.79)






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 common share (EPS)

1.64


1.76






 

SOURCE Taubman Centers, Inc.



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