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Taubman Centers Announces Second Quarter Results
- Solid Core: Sales, Rents and Occupancy Up
- Strong Favorable Ruling on Oyster Bay
- Quarter Impacted by Lower Lease Cancellation Income and Higher
Predevelopment Costs
(Logo: http://www.newscom.com/cgi-bin/prnh/20080428/CLM116LOGO )
Net income allocable to common shareholders per diluted share (EPS) was
"Contributions from our existing centers and the new Mall at Partridge
Creek (
Occupancy, Rents and Sales Up
The company reported positive fundamentals for both the quarter and year
to date periods. Ending occupancy at
"Our core fundamentals are on track," said Mr. Taubman. "In light of general economic conditions, we are pleased to report increases in sales, occupancy and rents. This is a testament to our high quality mall portfolio."
Focused on Growth
"With our strong balance sheet and high performing centers, the company is
well positioned to continue to grow externally," said Mr. Taubman. "In the
U.S. we were delighted to announce this quarter our involvement in
In the quarter the company received a very favorable ruling from the
Supreme Court of the
In
Guidance
The company is reducing its guidance for 2008 FFO per share to the range
of
Net income allocable to common shareholders for the year is expected to be
in the range of
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 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 on
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 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 Three and Six Months Ended June 30, 2008 and 2007
(in thousands of dollars, except as indicated)
Three Months Ended Six Months Ended
2008 2007 2008 2007
Income before minority and
preferred interests 21,414 26,002 44,930 52,552
Minority share of
consolidated joint
ventures (1) (1,130) (621) (2,306) (2,534)
Distributions in excess of
minority share of income
of consolidated joint
ventures (4,258) (1,649) (6,395) (1,041)
Minority share of income
of TRG (1) (4,505) (7,187) (10,421) (14,928)
Distributions in excess of
minority share of income
of TRG (6,874) (3,437) (12,341) (6,270)
TRG preferred
distributions (615) (615) (1,230) (1,230)
Net income 4,032 12,493 12,237 26,549
Preferred dividends (3,659) (3,659) (7,317) (7,317)
Net income allocable to
common shareowners 373 8,834 4,920 19,232
Net income per common
share - basic 0.01 0.17 0.09 0.36
Net income per common
share - diluted 0.01 0.16 0.09 0.36
Beneficial interest in
EBITDA - consolidated
businesses (2) 75,360 74,247 152,577 146,010
Beneficial interest in
EBITDA - unconsolidated
joint ventures (2) 22,644 23,536 45,758 45,420
Funds from Operations (2) 53,213 55,954 107,969 109,873
Funds from Operations
allocable to TCO (2) 35,421 36,968 71,824 72,495
Funds from Operations per
common share - basic (2) 0.67 0.69 1.36 1.36
Funds from Operations per
common share - diluted (2) 0.66 0.68 1.34 1.33
Weighted average number of
common shares outstanding
- basic 52,859,653 53,412,542 52,767,430 53,418,055
Weighted average number of
common shares outstanding
- diluted 53,431,974 54,056,260 53,348,232 54,066,230
Common shares outstanding
at end of period 52,892,604 52,849,206
Weighted average units -
Operating Partnership -
basic 79,411,822 80,843,466 79,322,237 80,960,865
Weighted average units -
Operating Partnership -
diluted 80,855,405 82,358,446 80,774,301 82,480,301
Units outstanding at end
of period - Operating
Partnership 79,440,048 80,156,503
Ownership percentage of
the Operating Partnership
at end of period 66.6% 65.9%
Number of owned shopping
centers at end of period 23 22 23 22
Operating Statistics:
Mall tenant sales (3) 1,116,027 1,061,767 2,199,635 2,104,464
Ending occupancy 90.0% 89.9% 90.0% 89.9%
Ending occupancy -
comparable (4) 90.1% 90.1% 90.1% 90.1%
Average occupancy 89.9% 89.7% 89.9% 89.6%
Average occupancy -
comparable (4) 90.0% 90.0% 90.1% 89.9%
Leased space at end of
period 92.6% 92.4% 92.6% 92.4%
Leased space at end of
period - comparable (4) 92.7% 92.6% 92.7% 92.6%
Mall tenant occupancy
costs as a percentage of
tenant sales - consolidated
businesses (3) 15.4% 15.6% 15.6% 15.5%
Mall tenant occupancy
costs as a percentage of
tenant sales -
unconsolidated joint
ventures (3) 13.7% 13.6% 13.8% 13.3%
Rent per square foot -
consolidated businesses (4) 45.12 43.64 44.84 43.75
Rent per square foot -
unconsolidated joint
ventures (4) 45.04 42.00 44.48 41.87
(1) Because the net equity balances of the Operating Partnership and the
outside partners in certain consolidated joint ventures are less than
zero, the income allocated to the minority and outside partners during
the three and six months ended June 30, 2008 and 2007 is equal to
their share of distributions. The net equity of these minority
partners is less than zero due to accumulated distributions in excess
of net income and not as a result of operating losses.
(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 National Association of Real Estate Investment Trusts (NAREIT)
defines Funds from Operations (FFO) as net income (loss) (computed in
accordance with Generally Accepted Accounting Principles (GAAP)),
excluding gains (or losses) 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.
(3) Based on reports of sales furnished by mall tenants.
(4) Statistics exclude The Mall at Partridge Creek and The Pier Shops at
Caesars. The 2007 statistics have been restated to include comparable
centers to 2008.
TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended June 30, 2008 and 2007
(in thousands of dollars)
2008 2007
UNCONSOLI- UNCONSOLI
CONSOLI- DATED CONSOLI- DATED
DATED JOINT DATED JOINT
BUSINESSES VENTURES(1) BUSINESSES VENTURES(1)
REVENUES:
Minimum rents 87,583 38,797 79,507 37,135
Percentage rents 1,325 458 997 1,592
Expense recoveries 60,384 21,664 57,923 22,818
Management, leasing, and
development services 3,891 3,632
Other 7,229 2,578 10,215 2,321
Total revenues 160,412 63,497 152,274 63,866
EXPENSES:
Maintenance, taxes, and
utilities 46,485 16,080 45,587 15,953
Other operating 19,695 5,587 16,078 4,778
Management, leasing, and
development services 2,421 1,796
General and administrative 7,943 7,015
Interest expense 35,972 16,278 32,190 16,617
Depreciation and
amortization 36,179 9,839 33,568 9,789
Total expenses 148,695 47,784 136,234 47,137
Gains on land sales and
other nonoperating income 1,456 160 723 367
13,173 15,873 16,763 17,096
Income tax expense (250)
Equity in income of
Unconsolidated
Joint Ventures 8,491 9,239
Income before minority and
preferred interests 21,414 26,002
Minority and preferred
interests:
TRG preferred
distributions (615) (615)
Minority share of
consolidated
joint ventures (1,130) (621)
Distributions in excess
of minority share of
income of consolidated
joint ventures (4,258) (1,649)
Minority share of income
of TRG (4,505) (7,187)
Distributions in excess
of minority share of
income of TRG (6,874) (3,437)
Net income 4,032 12,493
Preferred dividends (3,659) (3,659)
Net income allocable to
common shareowners 373 8,834
SUPPLEMENTAL INFORMATION:
EBITDA - 100% 85,324 41,990 82,521 43,502
EBITDA - outside partners'
share (9,964) (19,346) (8,274) (19,966)
Beneficial interest in
EBITDA 75,360 22,644 74,247 23,536
Beneficial interest
expense (31,065) (8,457) (28,554) (8,325)
Beneficial income tax
expense (250)
Non-real estate depreciation (745) (676)
Preferred dividends and
distributions (4,274) (4,274)
Funds from Operations
contribution 39,026 14,187 40,743 15,211
Net straightline
adjustments to rental
revenue, recoveries,
and ground rent expense
at TRG % 475 52 344 135
(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.
TAUBMAN CENTERS, INC.
Table 3- Income Statement
For the Year to Date Periods Ended June 30, 2008 and 2007
(in thousands of dollars)
2008 2007
UNCONSOLI- UNCONSOLI
CONSOLI- DATED CONSOLI- DATED
DATED JOINT DATED JOINT
BUSINESSES VENTURES(1) BUSINESSES VENTURES(1)
REVENUES:
Minimum rents 174,153 77,208 158,162 75,571
Percentage rents 3,900 1,919 3,305 2,631
Expense recoveries 117,848 44,078 108,546 45,409
Management, leasing, and
development services 7,585 8,522
Other 14,343 4,366 18,765 4,083
Total revenues 317,829 127,571 297,300 127,694
EXPENSES:
Maintenance, taxes, and
utilities 90,025 31,428 83,506 33,698
Other operating 37,996 12,134 32,874 11,179
Management, leasing, and
development services 4,678 4,586
General and
administrative 16,276 14,336
Interest expense 72,954 32,153 61,884 34,421
Depreciation and
amortization 71,514 19,462 66,101 19,955
Total expenses 293,443 95,177 263,287 99,253
Gains on land sales and
other nonoperating income 3,259 479 1,114 814
27,645 32,873 35,127 29,255
Income tax expense (440)
Equity in income of
Unconsolidated Joint
Ventures 17,725 17,425
Income before minority and
preferred interests 44,930 52,552
Minority and preferred
interests:
TRG preferred
distributions (1,230) (1,230)
Minority share of
consolidated joint
ventures (2,306) (2,534)
Distributions in excess
of minority share of
income of consolidated
joint ventures (6,395) (1,041)
Minority share of income
of TRG (10,421) (14,928)
Distributions in excess
of minority share of
income of TRG (12,341) (6,270)
Net income 12,237 26,549
Preferred dividends (7,317) (7,317)
Net income allocable to
common shareowners 4,920 19,232
SUPPLEMENTAL INFORMATION:
EBITDA - 100% 172,113 84,488 163,112 83,631
EBITDA - outside
partners' share (19,536) (38,730) (17,102) (38,211)
Beneficial interest in
EBITDA 152,577 45,758 146,010 45,420
Beneficial interest
expense (63,219) (16,719) (55,046) (16,627)
Beneficial income tax
expense (440)
Non-real estate
depreciation (1,441) (1,337)
Preferred dividends and
distributions (8,547) (8,547)
Funds from Operations
contribution 78,930 29,039 81,080 28,793
Net straightline
adjustments to rental
revenue, recoveries,
and ground rent
expense at TRG % 1,068 113 715 239
(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.
Table 4- Reconciliation of Net Income Allocable to Common Shareowners to Funds from Operations
For the Periods Ended
(in thousands of dollars; amounts allocable to TCO may not recalculate due
to rounding)
Three Months Ended Year To Date
2008 2007 2008 2007
Net income allocable to common
shareowners 373 8,834 4,920 19,232
Add (less) depreciation and
amortization:
Consolidated businesses at 100% 36,179 33,568 71,514 66,101
Minority partners in consolidated
joint ventures (3,927) (4,017) (7,495) (7,730)
Share of unconsolidated joint
ventures 5,696 5,972 11,314 11,368
Non-real estate depreciation (745) (676) (1,441) (1,337)
Add minority interests:
Minority share of income of TRG 4,505 7,187 10,421 14,928
Distributions in excess of
minority share of income of
TRG 6,874 3,437 12,341 6,270
Distributions in excess of
minority share of income of
consolidated joint ventures 4,258 1,649 6,395 1,041
Funds from Operations 53,213 55,954 107,969 109,873
TCO's average ownership percentage
of TRG 66.6% 66.1% 66.5% 66.0%
Funds from Operations allocable to
TCO 35,421 36,968 71,824 72,495
TAUBMAN CENTERS, INC.
Table 5- Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended June 30, 2008 and 2007
(in thousands of dollars; amounts allocable to TCO may not recalculate
due to rounding)
Three Months Ended Year To Date
2008 2007 2008 2007
Net income 4,032 12,493 12,237 26,549
Add (less) depreciation and
amortization:
Consolidated businesses at 100% 36,179 33,568 71,514 66,101
Minority partners in consolidated
joint ventures (3,927) (4,017) (7,495) (7,730)
Share of unconsolidated joint
ventures 5,696 5,972 11,314 11,368
Add (less) preferred interests,
interest expense, and income tax
expense:
Preferred distributions 615 615 1,230 1,230
Interest expense:
Consolidated businesses at 100% 35,972 32,190 72,954 61,884
Minority partners in
consolidated joint ventures (4,907) (3,636) (9,735) (6,838)
Share of unconsolidated joint
ventures 8,457 8,325 16,719 16,627
Income tax expense 250 440
Add minority interests:
Minority share of income of TRG 4,505 7,187 10,421 14,928
Distributions in excess of
minority share
of income of TRG 6,874 3,437 12,341 6,270
Distributions in excess of
minority share of income of
consolidated joint ventures 4,258 1,649 6,395 1,041
Beneficial Interest in EBITDA 98,004 97,783 198,335 191,430
TCO's average ownership percentage
of TRG 66.6% 66.1% 66.5% 66.0%
Beneficial Interest in EBITDA
allocable to TCO 65,235 64,604 131,937 126,308
TAUBMAN CENTERS, INC.
Table 6- Balance Sheets
As of June 30, 2008 and December 31, 2007
(in thousands of dollars)
As of
June 30, December 31,
2008 2007
Consolidated Balance Sheet of Taubman
Centers, Inc.:
Assets:
Properties 3,785,814 3,781,136
Accumulated depreciation and
amortization (986,366) (933,275)
2,799,448 2,847,861
Investment in Unconsolidated Joint
Ventures 92,377 92,117
Cash and cash equivalents 33,575 47,166
Accounts and notes receivable, net 43,554 52,161
Accounts and notes receivable from
related parties 2,024 2,283
Deferred charges and other assets 226,633 109,719
3,197,611 3,151,307
Liabilities:
Notes payable 2,774,156 2,700,980
Accounts payable and accrued
liabilities 248,810 296,385
Dividends and distributions payable 21,950 21,839
Distributions in excess of
investments in and net income of
Unconsolidated Joint Ventures 153,344 100,234
3,198,260 3,119,438
Preferred Equity of TRG 29,217 29,217
Minority interests in TRG and
consolidated joint ventures 16,345 18,494
Shareowners' Equity:
Series B Non-Participating
Convertible Preferred Stock 27 27
Series G Cumulative Redeemable
Preferred Stock
Series H Cumulative Redeemable
Preferred Stock
Common Stock 529 526
Additional paid-in capital 550,917 543,333
Accumulated other comprehensive
income (loss) (7,384) (8,639)
Dividends in excess of net income (590,300) (551,089)
(46,211) (15,842)
3,197,611 3,151,307
Combined Balance Sheet of
Unconsolidated Joint Ventures (1):
Assets:
Properties 1,067,183 1,056,380
Accumulated depreciation and
amortization (350,487) (347,459)
716,696 708,921
Cash and cash equivalents 19,805 40,097
Accounts and notes receivable 18,779 26,271
Deferred charges and other assets 24,648 18,229
779,928 793,518
Liabilities:
Notes payable 1,111,158 1,003,463
Accounts payable and other liabilities 42,024 55,242
1,153,182 1,058,705
Accumulated Deficiency in Assets:
Accumulated deficiency in assets -
TRG (206,297) (149,009)
Accumulated deficiency in assets -
Joint Venture Partners (168,862) (112,709)
Accumulated other comprehensive
income (loss) - TRG 402 (2,354)
Accumulated other comprehensive
income (loss) - Joint Venture
Partners 1,503 (1,115)
(373,254) (265,187)
779,928 793,518
(1) Amounts exclude University Town Center.
TAUBMAN CENTERS, INC.
Table 7- 2008 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, 2008
Funds from Operations per common share 3.01 3.07
Real estate depreciation - TRG (1.94) (1.87)
Depreciation of TCO's additional
basis in TRG (0.13) (0.13)
Distributions in excess of earnings
allocable to minority interest (0.30) (0.23)
Net income allocable to common
shareowners, per common share 0.64 0.84
SOURCE
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