Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2015.
| September 30, | September 30, | September 30, | September 30, | |||||||
| 2015 | 2014 | 2015 | 2014 | |||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||
Ended (1) | Ended | Ended (1) | Ended | |||||||
| Net income attributable to common | ||||||||||
| shareholders (EPS) per diluted common | $0.50 | $0.53 | $1.34 | $6.60 (3) | ||||||
| share | ||||||||||
Funds from Operations (FFO) per diluted | ||||||||||
| common share | $0.89 | $0.87 | $2.46 | $2.57 | ||||||
Growth rate | 2.3% | (4.3)% | ||||||||
| Adjusted Funds from Operations (Adjusted | ||||||||||
| FFO) per diluted common share | $0.86 (2) | $0.91 (4) | $2.44 (2) | $2.67 (4) | ||||||
Growth rate | (5.5)% | (8.6)% | ||||||||
(1) | Excludes the operations of the seven centers sold to Starwood Capital Group in October 2014 and Arizona Mills (Tempe, Ariz.), which was sold in January 2014. Includes the operations of The Mall at University Town Center (Sarasota, Fla.), which opened in October 2014, and The Mall of San Juan (San Juan, Puerto Rico), which opened in March 2015. | |||||||||
(2) | Adjusted FFO for the three and nine months ended September 30, 2015 excludes the reversal of certain prior period executive share-based compensation expense due to the announcement of an executive management transition. | |||||||||
(3) | Includes a net gain of $477 million ($5.30 per share) on the sale of a 49.9 percent interest in the entity that owns International Plaza (Tampa, Fla.), as well as investments in Arizona Mills and land in Syosset, New York (Oyster Bay). | |||||||||
(4) | Adjusted FFO for the three and nine months ended September 30, 2014 excludes charges related to the sale of seven centers to Starwood. | |||||||||
“This quarter our strong results were driven by lower operating expenses and increased rents and occupancy,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “Results were also positively impacted by the progress we’ve made on our share repurchase program.”
The October 2014 sale of seven centers to Starwood reduced FFO by 13.5 cents during the third quarter in comparison to the prior year.
Operating Statistics
Comparable center NOI, including lease cancellation income, was up 3.4 percent for the quarter, bringing year-to-date growth to 2.8 percent. Excluding lease cancellation income, comparable center NOI was up 2.8 percent for the quarter, bringing year-to-date growth to 3 percent.
Comparable center mall tenant sales per square foot rose 2.4 percent from the third quarter of 2014. This brings the company's 12-month trailing mall tenant sales per square foot to $805, an increase of 1.9 percent from the 12-months ended September 30, 2014. Year-to-date, sales per square foot were up 2.5 percent.
Average rent per square foot for the quarter was $60.53, up 1.4 percent from $59.68 in the comparable period last year. Year-to-date, average rent per square foot was up 2.3 percent.
Trailing 12-month releasing spreads per square foot for the period ended September 30, 2015 were a robust 21.4 percent.
Ending occupancy in comparable centers was 93.8 percent on September 30, 2015, up 0.7 percent from 93.1 percent on September 30, 2014. Leased space in comparable centers was 97.1 percent on September 30, 2015, up 1.3 percent from 95.8 percent on September 30, 2014.
“Our portfolio of high quality centers continue to produce solid increases in all of our key operating metrics,” added Mr. Taubman.
CFO Transition Announced
In September, the company announced that Lisa A. Payne, vice chairman and chief financial officer, will transition the CFO role to current Treasurer and Executive Vice President, Capital Markets, Simon J. Leopold. Mr. Leopold joined Taubman in 2012 and has since been responsible for Taubman’s capital markets and financing activities, corporate tax and treasury, and real estate acquisitions and dispositions. Ms. Payne will retain her role as vice chairman of the Board until leaving the company in March 2016. Concurrent with the announcement, certain prior period share-based compensation expense for Ms. Payne was reversed. The company has adjusted FFO for this reversal. See Taubman’s Lisa A. Payne to Transition CFO Role to Treasurer and Executive Vice President, Capital Markets, Simon J. Leopold, Effective January 1, 2016 – Sept. 15, 2015
Financing Activity
In August, the previously announced construction loan financing for International Market Place (Waikiki, Honolulu, Hawaii) closed. The $330.9 million loan has a three-year term with two one-year extension options and bears interest at LIBOR plus 1.75 percent. The loan is interest-only during the initial three-year term.
In September, the company completed the previously announced $1 billion, 12-year, non-recourse financing on The Mall at Short Hills (Short Hills, N.J.). The loan is interest-only for the entire term and bears interest at an all-in fixed rate of 3.56 percent. Proceeds were used to repay the previous $540 million, 5.47 percent fixed rate loan and to pay off the company’s revolving lines of credit. The remaining proceeds are reflected in the company’s cash balance and are being used for general corporate purposes.
Share Repurchase Program
During the quarter ended September 30, 2015, the company purchased 631,282 shares of its common stock at an average price of $68.63 per share. Since the program’s inception in August 2013, the company has purchased 4,221,774 shares of its common stock for $303 million, an average price of $71.80 per share. At September 30, 2015, the company had approximately $147 million available under its share repurchase authorization.
2015 Guidance Increased
The company is increasing its guidance for 2015 FFO per diluted common share to $3.38 to $3.46, up from the previous range of $3.28 to $3.36. The company’s guidance for 2015 Adjusted FFO per diluted share is $3.36 to $3.44. 2015 Adjusted FFO guidance excludes the reversal of certain prior period executive share-based compensation expense due to the announcement of an executive management change. The impact of share repurchases through September 30, 2015 are included in the company’s FFO and Adjusted FFO guidance, but assumptions for future repurchases are excluded.
The company is also increasing its guidance for 2015 EPS to $1.76 to $1.89, up from $1.65 to $1.78.
Supplemental Investor Information Available
The company provides supplemental investor information along with its earnings announcements, available online at www.taubman.com under “Investors.” This includes the following:
- Company Information
- Income Statements
- Earnings Reconciliations
- Changes in Funds from Operations and Earnings Per Common 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 and Redevelopment
- Capital Spending
- Operational Statistics
- Summary of Key Guidance Measures
- 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 a.m. EDT on Tuesday, October 27 to discuss its results, business conditions and the company’s outlook for the remainder of 2015. The conference call will be simulcast at www.taubman.com. An online replay will be available shortly after the call and will continue for approximately 90 days.
About Taubman
Taubman Centers is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 22 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 four properties in the U.S. and Asia totaling 4.1 million square feet. Founded in 1950, Taubman is headquartered in Bloomfield Hills, Mich. Taubman Asia, founded in 2005, is headquartered in Hong Kong. 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, 2015 and 2014 | ||||||||||||
| (in thousands of dollars, except as indicated) | ||||||||||||
| Three Months Ended | Year to Date | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Net income (1) | 52,629 | 56,637 | 145,962 | 621,848 | ||||||||
| Noncontrolling share of income of consolidated joint ventures | (2,780 | ) | (2,643 | ) | (8,043 | ) | (8,013 | ) | ||||
| Noncontrolling share of income of TRG | (13,151 | ) | (14,057 | ) | (35,815 | ) | (170,922 | ) | ||||
| Distributions to participating securities of TRG | (492 | ) | (471 | ) | (1,477 | ) | (1,409 | ) | ||||
| Preferred stock dividends | (5,784 | ) | (5,784 | ) | (17,353 | ) | (17,353 | ) | ||||
| Net income attributable to Taubman Centers, Inc. common shareowners (1) | 30,422 | 33,682 | 83,274 | 424,151 | ||||||||
| Net income per common share - basic (1) | 0.50 | 0.53 | 1.35 | 6.71 | ||||||||
| Net income per common share - diluted (1) | 0.50 | 0.53 | 1.34 | 6.60 | ||||||||
| Beneficial interest in EBITDA - Combined (2) | 110,715 | 116,972 | 313,355 | 838,015 | ||||||||
| Adjusted Beneficial interest in EBITDA - Combined (2) | 108,047 | 120,354 | 311,366 | 360,613 | ||||||||
| Funds from Operations attributable to partnership unitholders and participating securities of TRG (1)(2) | 77,614 | 78,450 | 218,126 | 231,537 | ||||||||
| Funds from Operations attributable to TCO's common shareowners (1)(2) | 55,120 | 56,045 | 155,029 | 165,418 | ||||||||
| Funds from Operations per common share - basic (1)(2) | 0.91 | 0.89 | 2.51 | 2.62 | ||||||||
| Funds from Operations per common share - diluted (1)(2) | 0.89 | 0.87 | 2.46 | 2.57 | ||||||||
Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG (1)(2) | 74,946 | 81,832 | 216,137 | 240,755 | ||||||||
| Adjusted Funds from Operations attributable to TCO's common shareowners (1)(2) | 53,232 | 58,466 | 153,614 | 172,015 | ||||||||
| Adjusted Funds from Operations per common share - basic (1)(2) | 0.88 | 0.92 | 2.49 | 2.72 | ||||||||
| Adjusted Funds from Operations per common share - diluted (1)(2) | 0.86 | 0.91 | 2.44 | 2.67 | ||||||||
| Weighted average number of common shares outstanding - basic | 60,713,379 | 63,317,680 | 61,778,051 | 63,249,400 | ||||||||
| Weighted average number of common shares outstanding - diluted | 61,426,115 | 64,087,742 | 62,573,957 | 64,876,051 | ||||||||
| Common shares outstanding at end of period | 60,258,750 | 63,319,539 | ||||||||||
| Weighted average units - Operating Partnership - basic | 85,776,728 | 88,453,782 | 86,854,852 | 88,392,327 | ||||||||
| Weighted average units - Operating Partnership - diluted | 87,360,726 | 90,095,106 | 88,522,020 | 90,018,978 | ||||||||
| Units outstanding at end of period - Operating Partnership | 85,320,909 | 88,454,989 | ||||||||||
| Ownership percentage of the Operating Partnership at end of period | 70.6 | % | 71.6 | % | ||||||||
| Number of owned shopping centers at end of period | 19 | 24 | ||||||||||
| Operating Statistics: | ||||||||||||
| Net Operating Income excluding lease cancellation income - growth % (2)(3) | 2.8 | % | 2.8 | % | 3.0 | % | 3.1 | % | ||||
| Net Operating Income including lease cancellation income - growth % (2)(3) | 3.4 | % | 3.0 | % | 2.8 | % | 4.1 | % | ||||
| Mall tenant sales - all centers (4) | 1,197,976 | 1,121,619 | 3,577,249 | 3,368,300 | ||||||||
| Mall tenant sales - comparable (3)(4) | 1,139,106 | 1,121,619 | 3,405,080 | 3,368,300 | ||||||||
| Ending occupancy - all centers | 92.2 | % | 93.0 | % | 92.2 | % | 93.0 | % | ||||
| Ending occupancy - comparable (3) | 93.8 | % | 93.1 | % | 93.8 | % | 93.1 | % | ||||
| Leased space - all centers | 96.3 | % | 95.3 | % | 96.3 | % | 95.3 | % | ||||
| Leased space - comparable (3) | 97.1 | % | 95.8 | % | 97.1 | % | 95.8 | % | ||||
| Average rent per square foot - Consolidated Businesses (3) | 62.04 | 60.75 | 61.42 | 58.35 | ||||||||
| Average rent per square foot - Unconsolidated Joint Ventures (3) | 58.43 | 58.20 | 58.76 | 59.90 | ||||||||
| Average rent per square foot - Combined (3) | 60.53 | 59.68 | 60.31 | 58.96 | ||||||||
| Twelve Months Trailing | ||||||||||||
| 2015 | 2014 | |||||||||||
| Operating Statistics: | ||||||||||||
| Mall tenant sales - all centers (4) | 5,178,411 | 4,923,444 | ||||||||||
| Mall tenant sales - comparable (3)(4) | 4,944,808 | 4,923,444 | ||||||||||
| Sales per square foot (3)(4) | 805 | 790 | ||||||||||
| All centers (4): | ||||||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 14.1 | % | 13.7 | % | ||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 13.3 | % | 13.3 | % | ||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 13.7 | % | 13.6 | % | ||||||||
| Comparable centers (3)(4): | ||||||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 14.1 | % | 13.7 | % | ||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 13.4 | % | 13.3 | % | ||||||||
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 13.8 | % | 13.6 | % | ||||||||
| (1) | Earnings no longer reflect the results of the centers sold to the Starwood Capital Group (Starwood) for periods after the October 2014 disposition date. During the nine month period ended September 30, 2014, the Company recognized a gain (net of tax) of $476.9 million from dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project. The effect of the gain on dispositions from the International Plaza, Arizona Mills, and Oyster Bay dispositions on diluted earnings per common share (EPS) was $5.30 per share. | |
| (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. During the three and nine month periods ended September 30, 2015, upon the announcement of an executive management transition, the Company reversed certain prior period share-based compensation expense, for which the Company adjusted FFO and EBITDA. For the three and nine month periods ended September 30, 2014, FFO and EBITDA were adjusted for expenses related to the sale of centers to Starwood Capital Group (Starwood). Specifically, these measures were adjusted for charges related to the discontinuation of hedge accounting on the interest rate swap previously designated to hedge the MacArthur Center (MacArthur) note payable, a restructuring charge, and disposition costs incurred related to the sale. In addition, for the nine month period ended September 30, 2014, EBITDA was adjusted for the gain on dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project. | ||
| 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) | Statistics exclude non-comparable centers for all periods presented. The September 30, 2014 statistics have been restated to include comparable centers to 2015. Sales per square foot exclude spaces greater than or equal to 10,000 square feet. | |
| (4) | Based on reports of sales furnished by mall tenants. |
| TAUBMAN CENTERS, INC. | ||||||||||||||
| Table 2 - Income Statement | ||||||||||||||
| For the Three Months Ended September 30, 2015 and 2014 | ||||||||||||||
| (in thousands of dollars) | ||||||||||||||
| 2015 | 2014 | |||||||||||||
| CONSOLIDATED | UNCONSOLIDATED JOINT | CONSOLIDATED | UNCONSOLIDATED JOINT | |||||||||||
| BUSINESSES | VENTURES (1) | BUSINESSES (1) | VENTURES (1) | |||||||||||
| REVENUES: | ||||||||||||||
| Minimum rents | 77,484 | 53,633 | 96,691 | 48,226 | ||||||||||
| Percentage rents | 5,032 | 2,060 | 5,263 | 2,270 | ||||||||||
| Expense recoveries | 47,206 | 32,908 | 63,527 | 28,517 | ||||||||||
| Management, leasing, and development services | 3,367 | 3,135 | ||||||||||||
| Other | 6,894 | 2,399 | 7,428 | 1,658 | ||||||||||
| Total revenues | 139,983 | 91,000 | 176,044 | 80,671 | ||||||||||
| EXPENSES: | ||||||||||||||
| Maintenance, taxes, utilities, and promotion | 37,230 | 22,960 | 52,184 | 20,457 | ||||||||||
| Other operating | 12,732 | 4,704 | 18,036 | 3,611 | ||||||||||
| Management, leasing, and development services | 1,558 | 1,539 | ||||||||||||
| General and administrative (2) | 8,615 | 11,369 | ||||||||||||
| Restructuring charge | 3,031 | |||||||||||||
| Interest expense | 16,145 | 21,126 | 23,382 | 18,255 | ||||||||||
| Depreciation and amortization | 27,156 | 14,667 | 24,553 | 11,939 | ||||||||||
| Total expenses | 103,436 | 63,457 | 134,094 | 54,262 | ||||||||||
| Nonoperating income (expense) | 1,010 | (1 | ) | 891 | (22 | ) | ||||||||
| 37,557 | 27,542 | 42,841 | 26,387 | |||||||||||
| Income tax expense | (584 | ) | (683 | ) | ||||||||||
| Equity in income of Unconsolidated Joint Ventures | 15,219 | 14,479 | ||||||||||||
| 52,192 | 56,637 | |||||||||||||
| Gain on dispositions, net of tax (3) | 437 | |||||||||||||
| Net income | 52,629 | 56,637 | ||||||||||||
| Net income attributable to noncontrolling interests: | ||||||||||||||
| Noncontrolling share of income of consolidated joint ventures | (2,780 | ) | (2,643 | ) | ||||||||||
| Noncontrolling share of income of TRG | (13,151 | ) | (14,057 | ) | ||||||||||
| Distributions to participating securities of TRG | (492 | ) | (471 | ) | ||||||||||
| Preferred stock dividends | (5,784 | ) | (5,784 | ) | ||||||||||
| Net income attributable to Taubman Centers, Inc. common shareowners | 30,422 | 33,682 | ||||||||||||
| SUPPLEMENTAL INFORMATION: | ||||||||||||||
| EBITDA - 100% | 80,858 | 63,335 | 90,776 | 56,581 | ||||||||||
| EBITDA - outside partners' share | (5,451 | ) | (28,027 | ) | (5,566 | ) | (24,819 | ) | ||||||
| Beneficial interest in EBITDA | 75,407 | 35,308 | 85,210 | 31,762 | ||||||||||
| Beneficial interest expense | (14,439 | ) | (11,431 | ) | (21,273 | ) | (10,006 | ) | ||||||
| Beneficial income tax expense - TRG and TCO | (584 | ) | (683 | ) | ||||||||||
| Beneficial income tax expense (benefit) - TCO | (184 | ) | 112 | |||||||||||
| Non-real estate depreciation | (679 | ) | (888 | ) | ||||||||||
| Preferred dividends and distributions | (5,784 | ) | (5,784 | ) | ||||||||||
| Funds from Operations attributable to partnership unitholders and participating securities of TRG | 53,737 | 23,877 | 56,694 | 21,756 | ||||||||||
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | ||||||||||||||
| Net straight-line adjustments to rental revenue, recoveries, | ||||||||||||||
| and ground rent expense at TRG % | 452 | 533 | 399 | 310 | ||||||||||
| The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 91 | 229 | ||||||||||||
| El Paseo Village and The Gardens on El Paseo purchase accounting | ||||||||||||||
| adjustments - interest expense reduction | 306 | 306 | ||||||||||||
| Waterside Shops purchase accounting adjustments - interest expense reduction | 263 | 263 | ||||||||||||
| U.S. headquarters purchase accounting adjustment - interest expense reduction | 183 | |||||||||||||
| (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. International Plaza's operations were consolidated through the January 2014 disposition date. Subsequent to the disposition, the Company's remaining 50.1% interest is accounted for under the equity method within Unconsolidated Joint Ventures. In addition, Arizona Mills' operations were accounted for under the equity method through the disposition in January 2014. The results of the centers sold to Starwood were consolidated through the October 2014 disposition. | |||||||||||||
| (2) | During the three months ended September 30, 2015, a reversal of $2.7 million of prior period share-based compensation expenses was recognized upon the announcement of an executive management transition. | |||||||||||||
| (3) | During the three months ended September 30, 2015, an adjustment to the tax on the gain on the disposition of interests in International Plaza was recognized, reducing the amount of the tax by $0.4 million. | |||||||||||||
| TAUBMAN CENTERS, INC. | ||||||||||||||
| Table 3 - Income Statement | ||||||||||||||
| For the Nine Months Ended September 30, 2015 and 2014 | ||||||||||||||
| (in thousands of dollars) | ||||||||||||||
| 2015 | 2014 | |||||||||||||
| CONSOLIDATED | UNCONSOLIDATED JOINT | CONSOLIDATED | UNCONSOLIDATED JOINT | |||||||||||
| BUSINESSES | VENTURES (1) | BUSINESSES (1) | VENTURES (1) | |||||||||||
| REVENUES: | ||||||||||||||
| Minimum rents | 228,920 | 159,207 | 291,113 | 143,098 | ||||||||||
| Percentage rents | 9,039 | 5,510 | 11,019 | 5,427 | ||||||||||
| Expense recoveries | 137,138 | 96,159 | 187,439 | 83,144 | ||||||||||
| Management, leasing, and development services | 9,665 | 8,605 | ||||||||||||
| Other | 16,183 | 9,912 | 22,631 | 6,521 | ||||||||||
| Total revenues | 400,945 | 270,788 | 520,807 | 238,190 | ||||||||||
| EXPENSES: | ||||||||||||||
| Maintenance, taxes, utilities, and promotion | 103,970 | 67,231 | 148,955 | 60,449 | ||||||||||
| Other operating | 40,630 | 14,781 | 49,582 | 13,035 | ||||||||||
| Management, leasing, and development services | 4,099 | 4,520 | ||||||||||||
| General and administrative (2) | 32,595 | 34,493 | ||||||||||||
| Restructuring charge | 3,031 | |||||||||||||
| Interest expense | 44,451 | 63,148 | 74,946 | 54,284 | ||||||||||
| Depreciation and amortization | 77,575 | 42,536 | 96,521 | 34,731 | ||||||||||
| Total expenses | 303,320 | 187,696 | 412,048 | 162,499 | ||||||||||
| Nonoperating income (expense) (3) | 3,712 | 4 | (3,327 | ) | (25 | ) | ||||||||
| 101,337 | 83,096 | 105,432 | 75,666 | |||||||||||
| Income tax expense | (2,110 | ) | (1,693 | ) | ||||||||||
| Equity in income of Unconsolidated Joint Ventures | 46,298 | 41,222 | ||||||||||||
| 145,525 | 144,961 | |||||||||||||
| Gain on dispositions, net of tax (4) | 437 | 476,887 | ||||||||||||
| Net income | 145,962 | 621,848 | ||||||||||||
| Net income attributable to noncontrolling interests: | ||||||||||||||
| Noncontrolling share of income of consolidated joint ventures | (8,043 | ) | (8,013 | ) | ||||||||||
| Noncontrolling share of income of TRG | (35,815 | ) | (170,922 | ) | ||||||||||
| Distributions to participating securities of TRG | (1,477 | ) | (1,409 | ) | ||||||||||
| Preferred stock dividends | (17,353 | ) | (17,353 | ) | ||||||||||
| Net income attributable to Taubman Centers, Inc. common shareowners | 83,274 | 424,151 | ||||||||||||
| SUPPLEMENTAL INFORMATION: | ||||||||||||||
| EBITDA - 100% (5) | 223,363 | 188,780 | 763,519 | 164,681 | ||||||||||
| EBITDA - outside partners' share | (15,733 | ) | (83,055 | ) | (17,840 | ) | (72,345 | ) | ||||||
| Beneficial interest in EBITDA (5) | 207,630 | 105,725 | 745,679 | 92,336 | ||||||||||
| Gain on dispositions | (486,620 | ) | ||||||||||||
| Beneficial interest expense | (39,357 | ) | (34,199 | ) | (68,687 | ) | (29,805 | ) | ||||||
| Beneficial income tax expense - TRG and TCO | (2,110 | ) | (1,693 | ) | ||||||||||
| Beneficial income tax expense - TCO | 104 | 258 | ||||||||||||
| Non-real estate depreciation | (2,314 | ) | (2,578 | ) | ||||||||||
| Preferred dividends and distributions | (17,353 | ) | (17,353 | ) | ||||||||||
| Funds from Operations attributable to partnership unitholders and participating securities of TRG | 146,600 | 71,526 | 169,006 | 62,531 | ||||||||||
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | ||||||||||||||
| Net straight-line adjustments to rental revenue, recoveries, | ||||||||||||||
| and ground rent expense at TRG % | 79 | 1,422 | 1,206 | 866 | ||||||||||
| The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 271 | 620 | ||||||||||||
| El Paseo Village and The Gardens on El Paseo purchase accounting | ||||||||||||||
| adjustments - interest expense reduction | 917 | 917 | ||||||||||||
| Waterside Shops purchase accounting adjustments - interest expense reduction | 788 | 788 | ||||||||||||
| U.S. headquarters purchase accounting adjustment - interest expense reduction | 182 | 425 | ||||||||||||
| (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. International Plaza's operations were consolidated through the January 2014 disposition date. Subsequent to the disposition, the Company's remaining 50.1% interest is accounted for under the equity method within Unconsolidated Joint Ventures. In addition, Arizona Mills' operations were accounted for under the equity method through the disposition in January 2014. The results of the centers sold to Starwood were consolidated through the October 2014 disposition. | |||||||||||||
| (2) | During the nine months ended September 30, 2015, a net reversal of $2.0 million of prior period share-based compensation expenses was recognized upon the announcement of an executive management transition. | |||||||||||||
| (3) | Nonoperating expense for the nine months ended September 30, 2014 includes $5.5 million in connection with the discontinuation of hedge accounting related to the MacArthur interest rate swap and $1 million of disposition costs related to the sale of centers to Starwood. | |||||||||||||
| (4) | During the nine months ended September 30, 2014, the gain on dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project is net of income tax expense of $9.7 million. During the nine months ended September 30, 2015, an adjustment to the tax on the gain on the disposition of interests in International Plaza was recognized, reducing the amount of the tax by $0.4 million. | |||||||||||||
| (5) | For the nine months ended September 30, 2014, EBITDA includes the Company's $486.6 million (before tax) gain from the dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project. | |||||||||||||
| 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, 2015 and 2014 | |||||||||||||||||
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | |||||||||||||||||
| 2015 | 2014 | ||||||||||||||||
| Shares | Per Share | Shares | Per Share | ||||||||||||||
| Dollars | /Units | /Unit | Dollars | /Units | /Unit | ||||||||||||
| Net income attributable to TCO common shareowners - Basic | 30,422 | 60,713,379 | 0.50 | 33,682 | 63,317,680 | 0.53 | |||||||||||
| Add impact of share-based compensation | 109 | 712,736 | 121 | 770,062 | |||||||||||||
| Net income attributable to TCO common shareowners - Diluted | 30,531 | 61,426,115 | 0.50 | 33,803 | 64,087,742 | 0.53 | |||||||||||
| Add depreciation of TCO's additional basis | 1,617 | 0.03 | 1,617 | 0.03 | |||||||||||||
| Add (less) TCO's additional income tax expense (benefit) | (184 | ) | (0.00 | ) | 112 | 0.00 | |||||||||||
| Net income attributable to TCO common shareowners, | |||||||||||||||||
| excluding step-up depreciation and additional income tax expense (benefit) | 31,964 | 61,426,115 | 0.52 | 35,532 | 64,087,742 | 0.55 | |||||||||||
| Add noncontrolling share of income of TRG | 13,151 | 25,063,349 | 14,057 | 25,136,102 | |||||||||||||
| Add distributions to participating securities of TRG | 492 | 871,262 | 471 | 871,262 | |||||||||||||
| Net income attributable to partnership unitholders | |||||||||||||||||
| and participating securities | 45,607 | 87,360,726 | 0.52 | 50,060 | 90,095,106 | 0.56 | |||||||||||
| Add (less) depreciation and amortization: | |||||||||||||||||
| Consolidated businesses at 100% | 27,156 | 0.31 | 24,553 | 0.27 | |||||||||||||
| Depreciation of TCO's additional basis | (1,617 | ) | (0.02 | ) | (1,617 | ) | (0.02 | ) | |||||||||
| Noncontrolling partners in consolidated joint ventures | (965 | ) | (0.01 | ) | (814 | ) | (0.01 | ) | |||||||||
| Share of Unconsolidated Joint Ventures | 8,658 | 0.10 | 7,277 | 0.08 | |||||||||||||
| Non-real estate depreciation | (679 | ) | (0.01 | ) | (888 | ) | (0.01 | ) | |||||||||
| Less gain on dispositions, net of tax | (437 | ) | (0.01 | ) | |||||||||||||
| Less impact of share-based compensation | (109 | ) | (0.00 | ) | (121 | ) | (0.00 | ) | |||||||||
| Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 77,614 | 87,360,726 | 0.89 | 78,450 | 90,095,106 | 0.87 | |||||||||||
| TCO's average ownership percentage of TRG - basic (1) | 70.8 | % | 71.6 | % | |||||||||||||
| Funds from Operations attributable to TCO's common shareowners, | |||||||||||||||||
| excluding additional income tax benefit (expense) (1) | 54,936 | 0.89 | 56,157 | 0.87 | |||||||||||||
| Add (less) TCO's additional income tax benefit (expense) | 184 | 0.00 | (112 | ) | (0.00 | ) | |||||||||||
| Funds from Operations attributable to TCO's common shareowners (1) | 55,120 | 0.89 | 56,045 | 0.87 | |||||||||||||
| Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 77,614 | 87,360,726 | 0.89 | 78,450 | 90,095,106 | 0.87 | |||||||||||
| Reversal of executive share-based compensation expense | (2,668 | ) | (0.03 | ) | |||||||||||||
| Beneficial share of disposition costs related to the Starwood sale | 513 | 0.01 | |||||||||||||||
| Restructuring charge | 3,031 | 0.03 | |||||||||||||||
| Beneficial share of discontinuation of hedge accounting - MacArthur | (162 | ) | (0.00 | ) | |||||||||||||
| Adjusted Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 74,946 | 87,360,726 | 0.86 | 81,832 | 90,095,106 | 0.91 | |||||||||||
| TCO's average ownership percentage of TRG - basic (2) | 70.8 | % | 71.6 | % | |||||||||||||
| Adjusted Funds from Operations attributable to TCO's common shareowners, | |||||||||||||||||
| excluding additional income tax benefit (expense) (2) | 53,048 | 0.86 | 58,578 | 0.91 | |||||||||||||
| Add (less) TCO's additional income tax benefit (expense) | 184 | 0.00 | (112 | ) | (0.00 | ) | |||||||||||
| Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 53,232 | 0.86 | 58,466 | 0.91 | |||||||||||||
| (1) | For the three months ended September 30, 2015, Funds from Operations attributable to TCO's common shareowners was $54,124 using TCO's diluted average ownership percentage of TRG of 69.5%. For the three months ended September 30, 2014, Funds from Operations attributable to TCO's common shareowners was $55,022 using TCO's diluted average ownership percentage of TRG of 70.3%. | ||||||||||||||||
| (2) | For the three months ended September 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $52,270 using TCO's diluted average ownership percentage of TRG of 69.5%. For the three months ended September 30, 2014, Adjusted Funds from Operations attributable to TCO's common shareowners was $57,398 using TCO's diluted average ownership percentage of TRG of 70.3%. | ||||||||||||||||
| 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, 2015 and 2014 | |||||||||||||||||
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | |||||||||||||||||
| 2015 | 2014 | ||||||||||||||||
| Shares | Per Share | Shares | Per Share | ||||||||||||||
| Dollars | /Units | /Unit | Dollars | /Units | /Unit | ||||||||||||
| Net income attributable to TCO common shareowners - Basic | 83,274 | 61,778,051 | 1.35 | 424,151 | 63,249,400 | 6.71 | |||||||||||
| Add distributions to participating securities of TRG | 1,409 | 871,262 | |||||||||||||||
| Add impact of share-based compensation | 305 | 795,906 | 2,742 | 755,389 | |||||||||||||
| Net income attributable to TCO common shareowners - Diluted | 83,579 | 62,573,957 | 1.34 | 428,302 | 64,876,051 | 6.60 | |||||||||||
| Add depreciation of TCO's additional basis | 4,851 | 0.08 | 5,057 | 0.08 | |||||||||||||
| Add TCO's additional income tax expense | 104 | 0.00 | 258 | 0.00 | |||||||||||||
| Net income attributable to TCO common shareowners, | |||||||||||||||||
| excluding step-up depreciation and additional income tax expense | 88,534 | 62,573,957 | 1.41 | 433,617 | 64,876,051 | 6.68 | |||||||||||
| Add noncontrolling share of income of TRG | 35,815 | 25,076,801 | 170,922 | 25,142,927 | |||||||||||||
| Add distributions to participating securities of TRG | 1,477 | 871,262 | |||||||||||||||
| Net income attributable to partnership unitholders | |||||||||||||||||
| and participating securities | 125,826 | 88,522,020 | 1.42 | 604,539 | 90,018,978 | 6.72 | |||||||||||
| Add (less) depreciation and amortization: | |||||||||||||||||
| Consolidated businesses at 100% | 77,575 | 0.88 | 96,521 | 1.07 | |||||||||||||
| Depreciation of TCO's additional basis | (4,851 | ) | (0.05 | ) | (5,057 | ) | (0.06 | ) | |||||||||
| Noncontrolling partners in consolidated joint ventures | (2,596 | ) | (0.03 | ) | (3,568 | ) | (0.04 | ) | |||||||||
| Share of Unconsolidated Joint Ventures | 25,228 | 0.28 | 21,309 | 0.24 | |||||||||||||
| Non-real estate depreciation | (2,314 | ) | (0.03 | ) | (2,578 | ) | (0.03 | ) | |||||||||
| Less gain on dispositions, net of tax | (437 | ) | (0.00 | ) | (476,887 | ) | (5.30 | ) | |||||||||
| Less impact of share-based compensation | (305 | ) | (0.00 | ) | (2,742 | ) | (0.03 | ) | |||||||||
| Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 218,126 | 88,522,020 | 2.46 | 231,537 | 90,018,978 | 2.57 | |||||||||||
| TCO's average ownership percentage of TRG - basic (1) | 71.1 | % | 71.6 | % | |||||||||||||
| Funds from Operations attributable to TCO's common shareowners, | |||||||||||||||||
| excluding additional income tax expense (1) | 155,133 | 2.46 | 165,676 | 2.57 | |||||||||||||
| Less TCO's additional income tax expense | (104 | ) | (0.00 | ) | (258 | ) | (0.00 | ) | |||||||||
| Funds from Operations attributable to TCO's common shareowners (1) | 155,029 | 2.46 | 165,418 | 2.57 | |||||||||||||
| Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 218,126 | 88,522,020 | 2.46 | 231,537 | 90,018,978 | 2.57 | |||||||||||
| Reversal of executive share-based compensation expense | (1,989 | ) | (0.02 | ) | |||||||||||||
| Beneficial share of disposition costs related to the Starwood sale | 954 | 0.01 | |||||||||||||||
| Restructuring charge | 3,031 | 0.03 | |||||||||||||||
| Beneficial share of discontinuation of hedge accounting - MacArthur | 5,233 | 0.06 | |||||||||||||||
| Adjusted Funds from Operations attributable to partnership unitholders | |||||||||||||||||
| and participating securities of TRG | 216,137 | 88,522,020 | 2.44 | 240,755 | 90,018,978 | 2.67 | |||||||||||
| TCO's average ownership percentage of TRG - basic (2) | 71.1 | % | 71.6 | % | |||||||||||||
| Adjusted Funds from Operations attributable to TCO's common shareowners, | |||||||||||||||||
| excluding additional income tax expense (2) | 153,718 | 2.44 | 172,273 | 2.67 | |||||||||||||
| Less TCO's additional income tax expense | (104 | ) | (0.00 | ) | (258 | ) | (0.00 | ) | |||||||||
| Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 153,614 | 2.44 | 172,015 | 2.67 | |||||||||||||
| (1) | For the nine months ended September 30, 2015, Funds from Operations attributable to TCO's common shareowners was $152,110 using TCO's diluted average ownership percentage of TRG of 69.8%. For the nine months ended September 30, 2014, Funds from Operations attributable to TCO's common shareowners was $162,421 using TCO's diluted average ownership percentage of TRG of 70.3%. | ||||||||||||||||
| (2) | For the nine months ended September 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $150,722 using TCO's diluted average ownership percentage of TRG of 69.8%. For the nine months ended September 30, 2014, Adjusted Funds from Operations attributable to TCO's common shareowners was $168,900 using TCO's diluted average ownership percentage of TRG of 70.3%. | ||||||||||||||||
| TAUBMAN CENTERS, INC. | ||||||||||||||
| Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA | ||||||||||||||
| For the Periods Ended September 30, 2015 and 2014 | ||||||||||||||
| (in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) | ||||||||||||||
| Three Months Ended | Year to Date | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||
| Net income | 52,629 | 56,637 | 145,962 | 621,848 | ||||||||||
| Add (less) depreciation and amortization: | ||||||||||||||
| Consolidated businesses at 100% | 27,156 | 24,553 | 77,575 | 96,521 | ||||||||||
| Noncontrolling partners in consolidated joint ventures | (965 | ) | (814 | ) | (2,596 | ) | (3,568 | ) | ||||||
| Share of Unconsolidated Joint Ventures | 8,658 | 7,277 | 25,228 | 21,309 | ||||||||||
| Add (less) interest expense and income tax expense (benefit): | ||||||||||||||
| Interest expense: | ||||||||||||||
| Consolidated businesses at 100% | 16,145 | 23,382 | 44,451 | 74,946 | ||||||||||
| Noncontrolling partners in consolidated joint ventures | (1,706 | ) | (2,109 | ) | (5,094 | ) | (6,259 | ) | ||||||
| Share of Unconsolidated Joint Ventures | 11,431 | 10,006 | 34,199 | 29,805 | ||||||||||
| Income tax expense (benefit): | ||||||||||||||
| Income tax expense (benefit) on dispositions of International Plaza, Arizona Mills, and Oyster Bay | (437 | ) | (437 | ) | 9,733 | |||||||||
| Other income tax expense | 584 | 683 | 2,110 | 1,693 | ||||||||||
| Less noncontrolling share of income of consolidated joint ventures | (2,780 | ) | (2,643 | ) | (8,043 | ) | (8,013 | ) | ||||||
| Beneficial interest in EBITDA | 110,715 | 116,972 | 313,355 | 838,015 | ||||||||||
| TCO's average ownership percentage of TRG | 70.8 | % | 71.6 | % | 71.1 | % | 71.6 | % | ||||||
| Beneficial interest in EBITDA attributable to TCO | 78,365 | 83,732 | 222,858 | 599,493 | ||||||||||
| Beneficial interest in EBITDA | 110,715 | 116,972 | 313,355 | 838,015 | ||||||||||
| Add (less): | ||||||||||||||
| Reversal of executive share-based compensation expense | (2,668 | ) | (1,989 | ) | ||||||||||
| Gain on dispositions | (486,620 | ) | ||||||||||||
| Restructuring charge | 3,031 | 3,031 | ||||||||||||
| Beneficial share of disposition costs related to the Starwood sale | 513 | 954 | ||||||||||||
| Beneficial share of discontinuation of hedge accounting - MacArthur | (162 | ) | 5,233 | |||||||||||
| Adjusted Beneficial interest in EBITDA | 108,047 | 120,354 | 311,366 | 360,613 | ||||||||||
| TCO's average ownership percentage of TRG | 70.8 | % | 71.6 | % | 71.1 | % | 71.6 | % | ||||||
| Adjusted Beneficial interest in EBITDA attributable to TCO | 76,476 | 86,153 | 221,468 | 258,036 | ||||||||||
| TAUBMAN CENTERS, INC. | ||||||||||||||||||||||||||||||||||
| Table 7 - Reconciliation of Net Income to Net Operating Income (NOI) | ||||||||||||||||||||||||||||||||||
| For the Periods Ended September 30, 2015, 2014, and 2013 | ||||||||||||||||||||||||||||||||||
| (in thousands of dollars) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Year to Date | Year to Date | |||||||||||||||||||||||||||||||
| 2015 | 2014 | 2014 | 2013 | 2015 | 2014 | 2014 | 2013 | |||||||||||||||||||||||||||
| Net income | 52,629 | 56,637 | 56,637 | 43,243 | 145,962 | 621,848 | 621,848 | 123,202 | ||||||||||||||||||||||||||
| Add (less) depreciation and amortization: | ||||||||||||||||||||||||||||||||||
| Consolidated businesses at 100% | 27,156 | 24,553 | 24,553 | 40,982 | 77,575 | 96,521 | 96,521 | 116,262 | ||||||||||||||||||||||||||
| Noncontrolling partners in consolidated joint ventures | (965 | ) | (814 | ) | (814 | ) | (1,292 | ) | (2,596 | ) | (3,568 | ) | (3,568 | ) | (3,776 | ) | ||||||||||||||||||
| Share of Unconsolidated Joint Ventures | 8,658 | 7,277 | 7,277 | 6,365 | 25,228 | 21,309 | 21,309 | 18,538 | ||||||||||||||||||||||||||
| Add (less) interest expense and income tax expense (benefit): | ||||||||||||||||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||||||||||
| Consolidated businesses at 100% | 16,145 | 23,382 | 23,382 | 32,515 | 44,451 | 74,946 | 74,946 | 99,589 | ||||||||||||||||||||||||||
| Noncontrolling partners in consolidated joint ventures | (1,706 | ) | (2,109 | ) | (2,109 | ) | (2,163 | ) | (5,094 | ) | (6,259 | ) | (6,259 | ) | (6,540 | ) | ||||||||||||||||||
| Share of Unconsolidated Joint Ventures | 11,431 | 10,006 | 10,006 | 9,415 | 34,199 | 29,805 | 29,805 | 28,192 | ||||||||||||||||||||||||||
| Income tax expense (benefit): | ||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) on dispositions of International Plaza, Arizona Mills, and Oyster Bay | (437 | ) | (437 | ) | 9,733 | 9,733 | ||||||||||||||||||||||||||||
| Other income tax expense | 584 | 683 | 683 | 1,453 | 2,110 | 1,693 | 1,693 | 2,715 | ||||||||||||||||||||||||||
| Less noncontrolling share of income of consolidated joint ventures | (2,780 | ) | (2,643 | ) | (2,643 | ) | (2,198 | ) | (8,043 | ) | (8,013 | ) | (8,013 | ) | (6,752 | ) | ||||||||||||||||||
| Add EBITDA attributable to outside partners: | ||||||||||||||||||||||||||||||||||
| EBITDA attributable to noncontrolling partners in consolidated joint ventures | 5,451 | 5,566 | 5,566 | 5,653 | 15,733 | 17,840 | 17,840 | 17,068 | ||||||||||||||||||||||||||
| EBITDA attributable to outside partners in Unconsolidated Joint Ventures | 28,027 | 24,819 | 24,819 | 21,679 | 83,055 | 72,345 | 72,345 | 62,770 | ||||||||||||||||||||||||||
| EBITDA at 100% | 144,193 | 147,357 | 147,357 | 155,652 | 412,143 | 928,200 | 928,200 | 451,268 | ||||||||||||||||||||||||||
| Add (less) items excluded from shopping center NOI: | ||||||||||||||||||||||||||||||||||
| General and administrative expenses | 8,615 | 11,369 | 11,369 | 11,812 | 32,595 | 34,493 | 34,493 | 36,676 | ||||||||||||||||||||||||||
| Management, leasing, and development services, net | (1,809 | ) | (1,596 | ) | (1,596 | ) | (7,726 | ) | (5,566 | ) | (4,085 | ) | (4,085 | ) | (9,782 | ) | ||||||||||||||||||
| Straight-line of rents | (1,696 | ) | (1,195 | ) | (1,195 | ) | (1,706 | ) | (3,794 | ) | (3,482 | ) | (3,482 | ) | (4,320 | ) | ||||||||||||||||||
| Gain on dispositions | (486,620 | ) | (486,620 | ) | ||||||||||||||||||||||||||||||
| Disposition costs related to the Starwood sale | 519 | 519 | 960 | 960 | ||||||||||||||||||||||||||||||
| Restructuring charge | 3,031 | 3,031 | 3,031 | 3,031 | ||||||||||||||||||||||||||||||
| Discontinuation of hedge accounting - MacArthur | (171 | ) | (171 | ) | 5,507 | 5,507 | ||||||||||||||||||||||||||||
| Gain on sale of peripheral land | (863 | ) | ||||||||||||||||||||||||||||||||
| Gain on sale of marketable securities | (1,323 | ) | ||||||||||||||||||||||||||||||||
| Dividend income | (915 | ) | (761 | ) | (761 | ) | (2,626 | ) | (1,597 | ) | (1,597 | ) | ||||||||||||||||||||||
| Interest income | (377 | ) | (456 | ) | (456 | ) | (43 | ) | (1,596 | ) | (764 | ) | (764 | ) | (144 | ) | ||||||||||||||||||
| Other nonoperating expense (income) | 283 | 500 | 506 | (754 | ) | (754 | ) | 500 | ||||||||||||||||||||||||||
| Non-center specific operating expenses and other | 3,934 | 5,628 | 5,628 | 7,987 | 14,243 | 14,587 | 14,587 | 18,503 | ||||||||||||||||||||||||||
| NOI - all centers at 100% | 152,228 | 163,725 | 163,725 | 166,476 | 445,905 | 489,476 | 489,476 | 490,515 | ||||||||||||||||||||||||||
| Less - NOI of non-comparable centers | (5,931 | ) | (1) | (22,206 | ) | (2) | (20,608 | ) | (3) | (27,571 | ) | (4) | (17,083 | ) | (1) | (72,182 | ) | (5) | (67,589 | ) | (6) | (85,353 | ) | (4) | ||||||||||
| NOI at 100% - comparable centers | 146,297 | 141,519 | 143,117 | 138,905 | 428,822 | 417,294 | 421,887 | 405,162 | ||||||||||||||||||||||||||
| NOI - growth % | 3.4 | % | 3.0 | % | 2.8 | % | 4.1 | % | ||||||||||||||||||||||||||
| NOI at 100% - comparable centers | 146,297 | 141,519 | 143,117 | 138,905 | 428,822 | 417,294 | 421,887 | 405,162 | ||||||||||||||||||||||||||
| Lease cancellation income | (1,954 | ) | (1,056 | ) | (1,056 | ) | (704 | ) | (6,357 | ) | (7,055 | ) | (7,055 | ) | (2,704 | ) | ||||||||||||||||||
| NOI at 100% - comparable centers excluding lease cancellation income | 144,343 | 140,463 | 142,061 | 138,201 | 422,465 | 410,239 | 414,832 | 402,458 | ||||||||||||||||||||||||||
| NOI at 100% excluding lease cancellation income - growth % | 2.8 | % | 2.8 | % | 3.0 | % | 3.1 | % | ||||||||||||||||||||||||||
| (1) | Includes The Mall of San Juan and The Mall at University Town Center. | |||||||||||||||||||||||||||||||||
| (2) | Includes the portfolio of centers sold to Starwood and an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio. | |||||||||||||||||||||||||||||||||
| (3) | Includes the portfolio of centers sold to Starwood and Taubman Prestige Outlets Chesterfield. | |||||||||||||||||||||||||||||||||
| (4) | Includes the portfolio of centers sold to Starwood, Taubman Prestige Outlets Chesterfield, and Arizona Mills. | |||||||||||||||||||||||||||||||||
| (5) | Includes the portfolio of centers sold to Starwood and Arizona Mills for the approximately one-month period prior to its disposition. Includes an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio. | |||||||||||||||||||||||||||||||||
| (6) | Includes the portfolio of centers sold to Starwood, Taubman Prestige Outlets Chesterfield, and Arizona Mills for the approximately one-month period prior to its disposition. | |||||||||||||||||||||||||||||||||
| TAUBMAN CENTERS, INC. | |||||||||
| Table 8 - Balance Sheets | |||||||||
| As of September 30, 2015 and December 31, 2014 | |||||||||
| (in thousands of dollars) | |||||||||
| As of | |||||||||
| September 30, 2015 | December 31, 2014 | ||||||||
| Consolidated Balance Sheet of Taubman Centers, Inc.: | |||||||||
| Assets: | |||||||||
| Properties | 3,585,896 | 3,262,505 | |||||||
| Accumulated depreciation and amortization | (1,033,056 | ) | (970,045 | ) | |||||
| 2,552,840 | 2,292,460 | ||||||||
| Investment in Unconsolidated Joint Ventures | 420,889 | 370,004 | |||||||
| Cash and cash equivalents | 263,911 | 276,423 | |||||||
| Restricted cash | 10,798 | 37,502 | |||||||
| Accounts and notes receivable, net | 44,364 | 49,245 | |||||||
| Accounts receivable from related parties | 3,161 | 832 | |||||||
| Deferred charges and other assets | 198,561 | 188,435 | |||||||
| 3,494,524 | 3,214,901 | ||||||||
| Liabilities: | |||||||||
| Notes payable | 2,594,073 | 2,025,505 | |||||||
| Accounts payable and accrued liabilities | 306,892 | 292,802 | |||||||
| Distributions in excess of investments in and net income of | |||||||||
| Unconsolidated Joint Ventures | 471,129 | 476,651 | |||||||
| 3,372,094 | 2,794,958 | ||||||||
| 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 | 603 | 633 | |||||||
| Additional paid-in capital | 649,550 | 815,961 | |||||||
| Accumulated other comprehensive income (loss) | (32,837 | ) | (15,068 | ) | |||||
| Dividends in excess of net income | (504,163 | ) | (483,188 | ) | |||||
| 113,178 | 318,363 | ||||||||
| Noncontrolling interests: | |||||||||
| Noncontrolling interests in consolidated joint ventures | (23,277 | ) | (14,796 | ) | |||||
| Noncontrolling interests in partnership equity of TRG | 32,529 | 116,376 | |||||||
| 9,252 | 101,580 | ||||||||
| 122,430 | 419,943 | ||||||||
| 3,494,524 | 3,214,901 | ||||||||
| Combined Balance Sheet of Unconsolidated Joint Ventures (1): | |||||||||
| Assets: | |||||||||
| Properties | 1,619,256 | 1,580,926 | |||||||
| Accumulated depreciation and amortization | (581,144 | ) | (548,646 | ) | |||||
| 1,038,112 | 1,032,280 | ||||||||
| Cash and cash equivalents | 33,738 | 49,765 | |||||||
| Accounts and notes receivable, net | 33,616 | 38,788 | |||||||
| Deferred charges and other assets | 38,462 | 33,200 | |||||||
| 1,143,928 | 1,154,033 | ||||||||
| Liabilities: | |||||||||
| Notes payable (2) | 2,004,712 | 1,989,546 | |||||||
| Accounts payable and other liabilities | 73,789 | 103,161 | |||||||
| 2,078,501 | 2,092,707 | ||||||||
| Accumulated Deficiency in Assets: | |||||||||
| Accumulated deficiency in assets - TRG | (515,231 | ) | (520,714 | ) | |||||
| Accumulated deficiency in assets - Joint Venture Partners | (404,557 | ) | (407,870 | ) | |||||
| Accumulated other comprehensive loss - TRG | (7,396 | ) | (5,045 | ) | |||||
| Accumulated other comprehensive loss - Joint Venture Partners | (7,389 | ) | (5,045 | ) | |||||
| (934,573 | ) | (938,674 | ) | ||||||
| 1,143,928 | 1,154,033 | ||||||||
| (1) | Unconsolidated Joint Venture amounts exclude the balances of entities that own interests in projects that are currently under development. | ||||||||
| (2) | As the balances presented exclude those of centers under development, the Notes Payable amount excludes the construction loan outstanding for Hanam Union Square of $52.1 million ($17.9 million at TRG's share) at September 30, 2015. | ||||||||
| 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, 2015 | |||||||
| Adjusted Funds from Operations per common share | 3.36 | 3.44 | |||||
| Reversal of executive share-based compensation expense | 0.02 | 0.02 | |||||
| Funds from Operations per common share | 3.38 | 3.46 | |||||
| Real estate depreciation - TRG | (1.50 | ) | (1.45 | ) | |||
| Distributions to participating securities of TRG | (0.02 | ) | (0.02 | ) | |||
| Depreciation of TCO's additional basis in TRG | (0.10 | ) | (0.10 | ) | |||
| Net income attributable to common shareowners, per common share (EPS) | 1.76 | 1.89 | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151026006501/en/
Contacts:
rhurren@taubman.com
Maria
Mainville, Taubman, Director, Strategic Communications, 248-258-7469
mmainville@taubman.com
