Taubman Centers Issues 2009 Results and 2010 Guidance
-- Tenant Sales Turned Positive in the Fourth Quarter
-- Quarter's Results Impacted by Litigation Charges
-- Annual Adjusted FFO Per Share Down Less than 1% in Difficult Economic Environment
-- 2010 Outlook Reflects Continued Challenges
BLOOMFIELD HILLS, Mich., Feb. 9 /PRNewswire-FirstCall/ -- Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the quarter and full year periods ended December 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080428/CLM116LOGO )
Net income allocable to common shareholders for the quarter ended December 31, 2009 was $0.07 per diluted common share (EPS), versus a loss of $1.90 per diluted share for the fourth quarter of 2008. EPS for the year ended December 31, 2009 was a $1.31 loss versus a $1.64 loss for the year ended December 2008. Results for the fourth quarter of 2009 included $38.5 million of litigation charges related to Westfarms (West Hartford, Conn.), of which the company's share was $30.4 million. In addition, the 2009 annual results were impacted by the previously announced $2.5 million restructuring charges and $166.7 million impairment charges (or $160.8 million at the company's share) relating to The Pier Shops at Caesars (Atlantic City, N.J.) and Regency Square (Richmond, Va.). The 2008 amounts were impacted by impairment charges totaling $126.3 million for development projects in Sarasota, Fla. and Oyster Bay, N.Y.
For the quarter ended December 31, 2009 Funds from Operations (FFO) per diluted share was $0.56, compared to a loss of $0.57 per diluted share for the quarter ended December 31, 2008. For the year ended December 31, 2009, FFO per diluted share was $0.68 compared to $1.51 for the year ended December 31, 2008.
For the quarter ended December 31, 2009 Adjusted FFO per diluted share (which excludes litigation, restructuring and impairment charges) was $0.93 versus $1.00 per diluted share for the quarter ended December 31, 2008. For the year ended December 31, 2009, Adjusted FFO per diluted share was $3.06, down 0.6 percent from $3.08 per diluted share for the year ended December 31, 2008.
"We are delighted to see a positive 3.8 percent tenant sales gain in the fourth quarter even against an easy comparison from the prior year," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. "This is the first positive tenant sales performance since the third quarter of 2008. While rents across the portfolio are modestly down, we benefited from the collection of Macao Studio City development fees, improvements in tenant recoveries and operational cost savings."
Sales Increase in Quarter; Occupancy and Rents as Expected
With the positive fourth quarter sales gain, the company ended the year down 6.7 percent to average $498 per square foot in 2009. "As we've said many times, tenant sales are the most important driver of our business," said Mr. Taubman. "This result is in line with our sales guidance from the beginning of the year."
Ending occupancy for the portfolio was 89.6 percent on December 31, 2009 versus 90.5 percent on December 31, 2008.
Rents per square foot in Taubman's consolidated portfolio averaged $42.56 for the quarter versus $43.96 for the fourth quarter of 2008. Rents per square foot in Taubman's consolidated portfolio averaged $43.31 for full year 2009 versus $43.95 for 2008.
Balance Sheet Strength
"The company continues to benefit from a strong balance sheet, with modest debt maturities in 2010," said Lisa A. Payne, vice chairman and chief financial officer of Taubman Centers. "We are pleased to have come through 2009 as one of the few REITs that maintained its cash dividend and did not raise any common equity." Taubman Centers finished the ten year period ending December 31, 2009 among the top ten total shareholder returns of all REITs.
2010 Guidance
The company is introducing guidance for 2010. For the full year 2010, the company expects FFO per diluted share excluding The Pier Shops to be in the range of $2.55 to $2.75. Net income allocable to common shareholders excluding The Pier Shops for the year is expected to be in the range of $0.64 to $0.89 per share.
The holding period of The Pier Shops remains uncertain and the noncash impact of owning The Pier Shops (including default interest) results in an incremental FFO charge of approximately a penny per share per month. Including the impact of depreciation and amortization, the impact on EPS is expected to be a negative penny and a half per share per month. A noncash accounting gain is expected to be recognized when the loan obligation is extinguished upon transfer of title of The Pier Shops. This gain has also been excluded from EPS and FFO per share estimates.
Supplemental Investor Information Available
The company provides supplemental investor information along with its earnings announcements, available online at www.taubman.com under "Investor Relations." This includes the following:
- Income Statements
- Earnings Reconciliations
- Changes in Funds from Operations and Earnings (Loss) Per Share
- Components of Other Income, Other Operating Expense, and Gains on Land Sales and Other Nonoperating Income
- Recoveries Ratio Analysis
- Balance Sheets
- Debt Summary
- Other Debt, Equity and Certain Balance Sheet Information
- Construction
- Capital Spending
- Operational Statistics
- Owned Centers
- Major Tenants in Owned Portfolio
- Anchors in Owned Portfolio
Investor Conference Call
The company will host a conference call at 11:00 AM Eastern Standard Time on February 10 to discuss these results, business conditions and the company's outlook for 2010. The conference call will be simulcast at www.taubman.com under "Investor Relations" 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 a real estate investment trust engaged in the development, leasing and management of regional and super regional shopping centers. Taubman's 26 U.S. owned, leased and/or managed properties, the most productive in the industry, serve major markets from coast to coast. Taubman Centers is headquartered in Bloomfield Hills, Michigan and its Taubman Asia subsidiary is headquartered in Hong Kong. Founded in 1950, Taubman celebrates its 60th anniversary in 2010. For more information about Taubman, visit www.taubman.com.
For ease of use, references in this press release to "Taubman Centers", "company" or "Taubman" mean Taubman Centers, Inc. 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.
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. Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to the continuing impacts of the U.S. recession and global credit environment, other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, and adverse changes in the retail industry. Other risks and uncertainties are discussed in the company's filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.
TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December 31, 2009 and 2008
------------------------------------------------
(in thousands of dollars, except as indicated)
Three Months Ended Year Ended
------------------ ----------
2009 2008 (2) 2009 2008 (2)
---- -------- ---- --------
Net income
(loss) (1), (2) 14,235 (80,818) (79,161) (8,052)
Noncontrolling
share of income of
consolidated
joint ventures (2) (2,845) (3,719) (3,115) (7,441)
Distributions
in excess of
noncontrolling
share of income
of consolidated
joint ventures (2) (621) (8,594)
Noncontrolling
share of (income)
loss of TRG (2) (2,794) 29,204 31,224 11,338
Distributions
in excess of
noncontrolling
share of loss
of TRG (2) (40,187) (55,370)
TRG series F
preferred
distributions (615) (615) (2,460) (2,460)
Preferred stock
dividends (3,659) (3,659) (14,634) (14,634)
Distributions
to participating
securities of TRG (362) (361) (1,560) (1,446)
Net income (loss)
attributable
to Taubman
Centers, Inc.
common shareowners
-basic (2) 3,960 (100,776) (69,706) (86,659)
Net income (loss)
attributable to
Taubman Centers,
Inc. common
shareowners
-diluted (2) 4,008 (100,776) (69,706) (86,659)
Net income (loss)
per common share
-basic (2) 0.07 (1.90) (1.31) (1.64)
Net income (loss)
per common share
-diluted (2) 0.07 (1.90) (1.31) (1.64)
Beneficial interest
in EBITDA -
Consolidated
Businesses (1), (3) 95,860 (27,360) 168,651 204,190
Beneficial interest
in EBITDA -
Unconsolidated
Joint Ventures (3) (3,082) 29,695 67,815 101,089
Funds from
Operations (1), (3) 46,389 (45,445) 55,026 122,236
Funds from
Operations
attributable
to TCO (1), (3) 31,092 (30,314) 36,799 81,274
Funds from
Operations
per common
share - basic
(1), (3) 0.58 (0.57) 0.69 1.54
Funds from
Operations
per common
share - diluted
(1), (3) 0.56 (0.57) 0.68 1.51
Adjusted Funds
from Operations
(1), (3) 76,663 80,821 248,732 248,502
Adjusted Funds
from Operations
attributable
to TCO (1), (3) 51,383 53,911 166,267 165,499
Adjusted Funds
from Operations
per common
share - basic
(1), (3) 0.96 1.02 3.12 3.13
Adjusted Funds
from Operations
per common
share - diluted
(1), (3) 0.93 1.00 3.06 3.08
Weighted average
number of common
shares
outstanding
-basic 53,616,534 53,017,357 53,239,279 52,866,050
Weighted average
number of
common shares
outstanding
-diluted 55,013,454 53,017,357 53,239,279 52,866,050
Common shares
outstanding
at end of
period 54,321,586 53,018,987
Weighted
average units -
Operating
Partnership
-basic 79,996,610 79,481,431 79,656,353 79,394,805
Weighted
average units -
Operating
Partnership
-diluted 82,264,792 80,604,458 81,269,311 80,745,237
Units outstanding
at end of
period -
Operating
Partnership 80,699,271 79,481,431
Ownership
percentage
of the
Operating
Partnership
at end of period 67.3% 66.7%
Number of owned
shopping centers
at end of period 23 23 23 23
Operating
Statistics (4):
Mall tenant
sales (5) 1,350,806 1,316,726 4,227,936 4,536,500
Ending occupancy 89.6% 90.5% 89.6% 90.5%
Average occupancy 89.5% 90.9% 89.0% 90.5%
Leased space at
end of period 91.6% 92.0% 91.6% 92.0%
Mall tenant
occupancy
costs as a
percentage of
tenant sales -
Consolidated
Businesses (5) 14.4% 14.8% 16.2% 15.4%
Mall tenant
occupancy
costs as a
percentage
of tenant sales -
Unconsolidated
Joint Ventures (5) 13.0% 13.4% 14.9% 13.9%
Rent per square
foot - Consolidated
Businesses 42.56 43.96 43.31 43.95
Rent per square
foot - Unconsolidated
Joint Ventures 44.20 44.24 44.49 44.61
(1) FFO for the three month period and the year ended December 31, 2009
includes, and Adjusted FFO excludes, litigation charges related to
Westfarms. Also, FFO for the year ended December 31, 2009 includes,
and Adjusted FFO excludes, a restructuring charge, which primarily
represents the costs of termination of personnel, and impairment
charges related to the write down of The Pier Shops and Regency
Square to their fair values. FFO for the three month period and year
ended December 31, 2008 includes, and Adjusted FFO excludes,
impairment charges on its 100% owned Oyster Bay project and Sarasota
project, which is accounted for under the equity method. The Company
discloses this Adjusted FFO due to the significance of these charges.
Given their significance, the Company believes it is essential to a
reader's understanding of the Company's results of operations to
emphasize the impact on the Company's earnings measures. The adjusted
measures are not and should not be considered alternatives to net
income or cash flows from operating, investing, or financing
activities as defined by GAAP.
(2) Prior to adoption of the new requirements for noncontrolling
interests on January 1, 2009, the net equity of the Operating
Partnership noncontrolling unitholders was less than zero. The net
equity balances of the noncontrolling partners in certain of the
consolidated joint ventures were also less than zero. Therefore,
under previous accounting standards for noncontrolling interests, the
interests of the noncontrolling unitholders of the Operating
Partnership and outside partners with net equity balances in the
consolidated joint ventures of less than zero were recognized as zero
balances within the Company’s Consolidated Balance Sheet. As a result
of the need to present these noncontrolling interests as zero
balances, it was previously required that income be allocated to
these interests equal, at a minimum, to their share of distributions.
The net equity balances of the Operating Partnership and certain of
the consolidated joint ventures were less than zero because of
accumulated operating distributions in excess of net income and not
as a result of operating losses. Operating distributions to partners
are usually greater than net income because net income includes
non-cash charges for depreciation and amortization.
Upon adoption of the new requirements for noncontrolling interests,
the interests of the noncontrolling unitholders of the Operating
Partnership and the outside partners with net equity balances in the
consolidated joint ventures of less than zero generally no longer
need to be carried at zero balances in the Company’s Consolidated
Balance Sheet and this previous income allocation methodology
described above is generally no longer applicable. However, as the
new measurement provisions are applicable beginning with the January
1, 2009 adoption date, the interests of these noncontrolling
interests for prior periods have not been remeasured. Net loss
attributable to Taubman Centers, Inc. common shareowners for the
three month period and year ended December 31, 2009 would have been
$(6.6) million and $(153.5) million, respectively or $(0.12) and
$(2.88) per common share, respectively if accounted for under the
previous method of accounting for noncontrolling interests prior to
the new accounting requirements. Certain 2008 amounts have been
reclassified to conform with 2009 classifications.
(3) 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 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 from extraordinary items and sales of properties,
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. FFO is
primarily used by the Company in measuring performance and in
formulating corporate goals and compensation.
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 common definitions. None
of these non-GAAP measures should be considered alternatives to net
income as an indicator of the Company's operating performance, and
they do not represent cash flows from operating, investing, or
financing activities as defined by GAAP.
(4) Statistics exclude The Pier Shops.
(5) Based on reports of sales furnished by mall tenants.
TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended December 31, 2009 and 2008
-----------------------------------------------------
(in thousands of dollars)
2009 2008
--------------------------- --------------------------
UNCONSOLIDATED UNCONSOLIDATED
CONSOLIDATED JOINT CONSOLIDATED JOINT
BUSINESSES VENTURES (1) BUSINESSES VENTURES (1)
------------------------- -------------------------
REVENUES:
Minimum rents 87,059 40,505 91,646 40,675
Percentage rents 5,476 2,862 6,602 3,017
Expense recoveries 74,374 29,632 69,869 29,418
Management, leasing,
and development
services 10,990 5,010
Other 8,376 2,506 16,829 4,078
------- ------ ------- ------
Total revenues 186,275 75,505 189,956 77,188
EXPENSES:
Maintenance, taxes,
and utilities 51,288 18,959 50,396 18,132
Other operating 19,359 6,156 23,117 6,468
Restructuring charge (118)
Management, leasing,
and development
services 1,886 2,189
General and
administrative 6,968 5,044
Litigation
charges (2) 38,500
Impairment
charges (3) 117,943
Interest expense 36,557 16,118 38,404 16,380
Depreciation and
amortization 37,239 10,435 40,463 11,327
------- ------ ------- ------
Total expenses 153,179 90,168 277,556 52,307
Gains on land sales
and other
nonoperating income 31 (1) 899 89
--- --- --- ---
33,127 (14,664) (86,701) 24,970
======= ======
Income tax expense (1,400) (459)
Equity in income
(loss) of
Unconsolidated Joint
Ventures (4) (17,492) 14,665
Impairment charge on
Sarasota joint
venture (3) (8,323)
------ ------
Net income (loss) 14,235 (80,818)
Net (income) loss
attributable to
noncontrolling interests:
Noncontrolling share
of income of
consolidated joint
ventures (2,845) (3,719)
Distributions in
excess of
noncontrolling share
of income of
consolidated joint
ventures (621)
TRG series F preferred
distributions (615) (615)
Noncontrolling share
of (income) loss
of TRG (2,794) 29,204
Distributions in
excess of
noncontrolling share
of loss of TRG (40,187)
Distributions to
participating
securities of TRG (362) (361)
Preferred stock
dividends (3,659) (3,659)
------ ------
Net income (loss)
attributable to
Taubman Centers,
Inc. common
shareowners 3,960 (100,776)
===== ========
SUPPLEMENTAL
INFORMATION:
EBITDA - 100%
(2), (3) 106,923 11,889 (16,157) 52,677
EBITDA - outside
partners' share (11,063) (14,971) (11,203) (22,982)
------- ------- ------- -------
Beneficial interest
in EBITDA (2), (3) 95,860 (3,082) (27,360) 29,695
Beneficial interest
expense (31,505) (8,358) (33,462) (8,488)
Beneficial income
tax expense (1,400) (459)
Non-real estate
depreciation (852) (1,097)
Preferred dividends
and distributions (4,274) (4,274)
------- ------- ------- ------
Fund from Operations
contribution(2),(3) 57,829 (11,440) (66,652) 21,207
====== ======= ======= ======
Net straightline
adjustments to
rental revenue,
recoveries, and
ground rent
expense at TRG % (410) (53) 213 (32)
==== === === ===
(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. The Company accounts for its investments in the
Unconsolidated Joint Ventures under the equity method.
(2) In the fourth quarter of 2009, the Company recognized litigation
charges related to Westfarms. TRG's share of the charges was $30.4
million.
(3) In the fourth quarter of 2008, the Company recognized impairment
charges on its 100% owned Oyster Bay project and Sarasota project,
which is accounted for under the equity method.
(4) Excludes impairment charge for Sarasota project, which is separately
presented.
TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Years Ended December 31, 2009 and 2008
-----------------------------------------------
(in thousands of dollars)
2009 2008
-------------------------- ---------------------------
UNCONSOLIDATED UNCONSOLIDATED
CONSOLIDATED JOINT CONSOLIDATED JOINT
BUSINESSES VENTURES (1) BUSINESSES VENTURES (1)
-------------------------- ---------------------------
REVENUES:
Minimum rents 341,914 157,099 353,200 157,070
Percentage rents 10,818 5,039 13,764 6,617
Expense recoveries 246,377 101,692 248,555 98,507
Management, leasing,
and development
services 21,179 15,911
Other 45,816 8,705 40,068 9,619
------- ------- ------- -------
Total revenues 666,104 272,535 671,498 271,813
EXPENSES:
Maintenance, taxes,
and utilities 189,061 68,094 189,162 66,761
Other operating 67,182 24,024 79,595 22,494
Restructuring
charge (2) 2,512
Management, leasing,
and development
services 7,862 8,710
General and
administrative 27,858 28,110
Litigation
charges (3) 38,500
Impairment
charges (4) 166,680 117,943
Interest expense 145,670 64,407 147,397 65,004
Depreciation and
amortization 147,316 39,274 147,441 40,712
------- ------- ------- -------
Total expenses 754,141 234,299 718,358 194,971
Gains on land sales
and other nonoperating
income 711 87 4,569 683
Impairment loss on
marketable securities (1,666)
------ ------ ------ ------
(88,992) 38,323 (42,291) 77,525
====== ======
Income tax expense (1,657) (1,117)
Equity in income of
Unconsolidated Joint
Ventures (5) 11,488 43,679
Impairment charge on
Sarasota joint
venture (4) (8,323)
------ -----
Net loss (79,161) (8,052)
Net (income) loss
attributable to
noncontrolling interests:
Noncontrolling share of
income of consolidated
joint ventures (3,115) (7,441)
Distributions in
excess of
noncontrolling share
of income of
consolidated joint
ventures (8,594)
TRG series F
preferred
distributions (2,460) (2,460)
Noncontrolling share
of loss of TRG 31,224 11,338
Distributions in
excess of
noncontrolling share
of loss of TRG (55,370)
Distributions to
participating
securities of TRG (1,560) (1,446)
Preferred stock
dividends (14,634) (14,634)
------ ------
Net loss attributable
to Taubman Centers, Inc.
common shareowners (69,706) (86,659)
====== ======
SUPPLEMENTAL INFORMATION:
EBITDA - 100%
(2), (3) 203,994 142,004 244,224 183,241
EBITDA -outside
partners' share (35,343) (74,189) (40,034) (82,152)
------ ------ ------ ------
Beneficial interest
in EBITDA (2), (3) 168,651 67,815 204,190 101,089
Beneficial interest
expense (125,823) (33,427) (127,769) (33,777)
Beneficial income
tax expense (1,657) (1,117)
Non-real estate
depreciation (3,439) (3,286)
Preferred dividends
and distributions (17,094) (17,094)
------ ------ ------ -------
Funds from Operations
contribution (2),(3) 20,638 34,388 54,924 67,312
====== ====== ====== ======
Net straightline
adjustments to
rental revenue,
recoveries, and
ground rent expense
at TRG % 83 263 1,532 243
=== === ===== ===
(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) In 2009, the Company recognized a restructuring charge, which
primarily represents the costs of termination of personnel.
(3) In the fourth quarter of 2009, the Company recognized litigation
charges related to Westfarms. TRG's share of the charges was $30.4
million.
(4) In the third quarter of 2009, the Company wrote down the book values
of The Pier Shops and Regency Square to their fair values. The
impairment charges were $160.8 million at TRG's share. In the fourth
quarter of 2008, the Company recognized impairment charges on its
100% owned Oyster Bay project and Sarasota project, which is
accounted for under the equity method.
(5) Excludes impairment charge for Sarasota project, which is separately
presented.
TAUBMAN CENTERS, INC.
Table 4 -Reconciliation of Net Income (Loss) Attributable to Taubman
Centers, Inc. Common Shareowners to Funds from Operations and Adjusted
Funds from Operations
For the Periods Ended December 31, 2009 and 2008
------------------------------------------------
(in thousands of dollars; amounts attributable to TCO may not recalculate
due to rounding)
Three Months Ended Year Ended
------------------ ----------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss)
attributable to
TCO common
shareowners 3,960 (100,776) (69,706) (86,659)
Add (less)
depreciation and
amortization:
Consolidated
businesses
at 100% 37,239 40,463 147,316 147,441
Noncontrolling
partners in
consolidated
joint ventures (3,166) (2,542) (12,381) (12,965)
Share of
Unconsolidated
Joint Ventures 6,052 6,542 22,900 23,633
Non-real estate
depreciation (852) (1,097) (3,439) (3,286)
Add noncontrolling
interests:
Noncontrolling
share of income
(loss) of TRG 2,794 (29,204) (31,224) (11,338)
Distributions in
excess of
noncontrolling
share of loss of
TRG 40,187 55,370
Distributions in
excess of
noncontrolling
share of income
of consolidated
joint ventures 621 8,594
Add distributions
to participating
securities of TRG 362 361 1,560 1,446
--- --- ----- -----
Funds from
Operations (1) 46,389 (45,445) 55,026 122,236
TCO's average
ownership
percentage of TRG 67.0% 66.7% 66.8% 66.6%
---- ---- ---- ----
Funds from
Operations
attributable to
TCO (1) 31,092 (30,314) 36,799 81,274
====== ======= ====== ======
Funds from
Operations 46,389 (45,445) 55,026 122,236
TRG's share of
impairment
charges (1) 126,266 160,802 126,266
TRG's share of
litigation
charges (1) 30,392 30,392
Restructuring
charge (1) (118) 2,512
---- ------ ----- -------
Adjusted Funds from
Operations (1) 76,663 80,821 248,732 248,502
TCO's average
ownership
percentage of TRG 67.0% 66.7% 66.8% 66.6%
---- ---- ---- ----
Adjusted Funds
from Operations
attributable to
TCO (1) 51,383 53,911 166,267 165,499
====== ====== ======= =======
(1) FFO for the three month period and the year ended December 31, 2009
includes, and Adjusted FFO excludes, litigation charges related to
Westfarms. Also, FFO for the year ended December 31, 2009 includes,
and Adjusted FFO excludes, a restructuring charge, which primarily
represents the costs of termination of personnel, and impairment
charges related to the write down of The Pier Shops and Regency
Square to their fair values. FFO for the three month period and year
ended December 31, 2008 includes, and Adjusted FFO excludes,
impairment charges on its 100% owned Oyster Bay project and Sarasota
project, which is accounted for under the equity method. The Company
discloses this Adjusted FFO due to the significance of these charges.
Given their significance, the Company believes it is essential to a
reader's understanding of the Company's results of operations to
emphasize the impact on the Company's earnings measures. The adjusted
measures are not and should not be considered alternatives to net
income or cash flows from operating, investing, or financing
activities as defined by GAAP.
TAUBMAN CENTERS, INC.
Table 5 -Reconciliation of Net Income (Loss) to Beneficial Interest in
EBITDA
For the Periods Ended December 31, 2009 and 2008
------------------------------------------------
(in thousands of dollars; amounts attributable to TCO may not recalculate
due to rounding)
Three Months Ended Year Ended
------------------ ----------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss) 14,235 (80,818) (79,161) (8,052)
Add (less)
depreciation and
amortization:
Consolidated
businesses at
100% 37,239 40,463 147,316 147,441
Noncontrolling
partners in
consolidated
joint ventures (3,166) (2,542) (12,381) (12,965)
Share of
Unconsolidated
Joint Ventures 6,052 6,542 22,900 23,633
Add (less)
interest expense
and income tax
expense:
Interest expense:
Consolidated
businesses at
100% 36,557 38,404 145,670 147,397
Noncontrolling
partners in
consolidated
joint
ventures (5,052) (4,942) (19,847) (19,628)
Share of
Unconsolidated
Joint Ventures 8,358 8,488 33,427 33,777
Income tax
expense 1,400 459 1,657 1,117
Less noncontrolling
share of income
of consolidated
joint ventures (2,845) (3,719) (3,115) (7,441)
------ ------ ------ ------
Beneficial Interest
in EBITDA 92,778 2,335 236,466 305,279
TCO's average
ownership
percentage of TRG 67.0% 66.7% 66.8% 66.6%
---- ---- ---- ----
Beneficial Interest
in EBITDA
attributable to
TCO 62,183 1,557 158,063 203,164
====== ===== ======= =======
TAUBMAN CENTERS, INC.
Table 6 - Balance Sheets
As of December 31, 2009 and December 31, 2008
---------------------------------------------
(in thousands of dollars)
As of
--------------------------------
December 31, December 31,
2009 2008
------------- -------------
Consolidated Balance Sheet of
Taubman Centers, Inc.:
Assets:
Properties 3,496,853 3,699,480
Accumulated depreciation and
amortization (1,100,610) (1,049,626)
---------- ----------
2,396,243 2,649,854
Investment in Unconsolidated
Joint Ventures 89,804 89,933
Cash and cash equivalents 19,640 62,126
Accounts and notes
receivable, net 44,503 46,732
Accounts receivable from
related parties 1,558 1,850
Deferred charges and other
assets 55,105 124,487
------ -------
2,606,853 2,974,982
========= =========
Liabilities:
Notes payable 2,691,019 2,796,821
Accounts payable and accrued
liabilities 230,276 262,226
Dividends payable 22,002
Distributions in excess of
investments in and net
income of Unconsolidated
Joint Ventures 160,305 154,141
------- -------
3,081,600 3,235,190
Equity:
Taubman Centers, Inc.
Shareowners' Equity:
Series B Non-Participating
Convertible Preferred Stock 26 26
Series G Cumulative
Redeemable Preferred Stock
Series H Cumulative
Redeemable Preferred Stock
Common Stock 543 530
Additional paid-in capital 579,983 556,145
Accumulated other
comprehensive income (loss) (24,443) (29,778)
Dividends in excess of net
income (884,666) (726,097)
-------- --------
(328,557) (199,174)
Noncontrolling interests:
Noncontrolling interests in
consolidated joint ventures (100,014) (90,251)
Noncontrolling interests in
partnership equity of TRG (75,393)
Preferred Equity of TRG 29,217 29,217
------ ------
(146,190) (61,034)
-------- -------
(474,747) (260,208)
-------- --------
2,606,853 2,974,982
========= =========
Combined Balance Sheet of
Unconsolidated Joint Ventures:
Assets:
Properties 1,094,963 1,087,341
Accumulated depreciation and
amortization (396,518) (366,168)
-------- --------
698,445 721,173
Cash and cash equivalents 23,117 28,946
Accounts and notes receivable 26,982 26,603
Deferred charges and other assets 17,737 20,098
------ ------
766,281 796,820
======= =======
Liabilities:
Notes payable 1,092,806 1,103,903
Accounts payable and other
liabilities, net 50,615 61,570
------ ------
1,143,421 1,165,473
Accumulated Deficiency in Assets:
Accumulated deficiency in
assets -TRG (200,169) (194,178)
Accumulated deficiency in
assets - Joint Venture Partners (166,866) (160,862)
Accumulated other comprehensive
income (loss) - TRG (5,397) (7,288)
Accumulated other comprehensive
income (loss) - Joint
Venture Partners (4,708) (6,325)
------ ------
(377,140) (368,653)
-------- --------
766,281 796,820
======= =======
TAUBMAN CENTERS, INC.
Table 7 - Annual Outlook
-------------------------
(all dollar amounts per common share on a diluted basis; amounts may
not add due to rounding)
Range for Year Ended
December 31, 2010
(Excluding The Pier Shops)
------------------------
Funds from Operations per common share (1) 2.55 2.75
Real estate depreciation - TRG (1.77) (1.72)
Distributions on participating securities of TRG (0.02) (0.02)
Depreciation of TCO's additional basis in TRG (0.12) (0.12)
----- -----
Net income attributable to common shareowners,
per common share (EPS) (1) 0.64 0.89
==== ====
(1) Guidance on Funds from Operations and EPS excludes The Pier Shops'
operations due to the uncertainty regarding the timing of transfer of
title. The loan on the center is in default and accrues interest at
10.01%. The Company expects a non-cash incremental impact on FFO per
share of ($0.010) for each month the Company continues to own the
center. Including the impact of depreciation and amortization, the
impact on EPS is expected to be ($0.015) per month. A non-cash
accounting gain is expected to be recognized when the loan obligation
is extinguished upon transfer of title of The Pier Shops. This gain
has also been excluded from EPS and FFO per share estimates.
SOURCE Taubman Centers, Inc.
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