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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

OR

TAUBMAN CENTERS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such report(s)) and (2) has been subject to such filing requirements for the past 90 days.

     Yes X    No

As of March 20, 2003, the aggregate market value of the 51,557,179 shares of Common Stock held by non-affiliates of the registrant was $902 million, based upon the closing price $17.49 on the New York Stock Exchange composite tape on such date. (For this computation, the registrant has excluded the market value of all shares of its Common Stock reported as beneficially owned by executive officers and directors of the registrant and certain other shareholders; such exclusion shall not be deemed to constitute an admission that any such person is an “affiliate” of the registrant.) As of March 20, 2003, there were outstanding 52,270,965 shares of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual shareholders meeting to be held in 2003 are incorporated by reference into Part III.

PART I

Item 1. BUSINESS.

The Company

        Taubman Centers, Inc. (the “Company” or “TCO”) was incorporated in Michigan in 1973 and had its initial public offering (“IPO”) in 1992. The Company owns a 62% managing general partner’s interest in The Taubman Realty Group Limited Partnership (the “Operating Partnership” or “TRG”), through which the Company conducts all its operations. The Company owns, develops, acquires, and operates regional shopping centers and interests therein. The Company’s portfolio, as of December 31, 2002, included 20 urban and suburban centers located in nine states. One new center is under construction in Virginia and will open in September 2003. Construction is scheduled to begin on a second new center in 2003. The center is located in North Carolina and will open in August 2005. The Operating Partnership also owns certain regional retail shopping center development projects and more than 99% of The Taubman Company LLC (the “Manager”), which manages the shopping centers and provides other services to the Operating Partnership and the Company. See the table on pages 12 and 13 of this report for information regarding the centers.

        The Company is a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended (the “Code”). In order to satisfy the provisions of the Code applicable to REITs, the Company must distribute to its shareholders at least 90% of its REIT taxable income and meet certain other requirements. The Operating Partnership’s partnership agreement provides that the Operating Partnership will distribute, at a minimum, sufficient amounts to its partners such that the Company’s pro rata share will enable the Company to pay shareholder dividends (including capital gains dividends that may be required upon the Operating Partnership’s sale of an asset) that will satisfy the REIT provisions of the Code.

Recent Developments

        For a discussion of business developments that occurred in 2002, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A).

The Shopping Center Business

        There are several types of retail shopping centers, varying primarily by size and marketing strategy. Retail shopping centers range from neighborhood centers of less than 100,000 square feet of GLA to regional and super-regional shopping centers. Retail shopping centers in excess of 400,000 square feet of GLA are generally referred to as “regional” shopping centers, while those centers having in excess of 800,000 square feet of GLA are generally referred to as “super-regional” shopping centers. Nineteen of the centers are “super-regional” centers. In this annual report on Form 10-K, the term “regional shopping centers” refers to both regional and super-regional shopping centers. The term “GLA” refers to gross retail space, including anchors and mall tenant areas, and the term “Mall GLA” refers to gross retail space, excluding anchors. The term “anchor” refers to a department store or other large retail store. The term “mall tenants” refers to stores (other than anchors) that are typically specialty retailers and lease space in shopping centers.

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Business of the Company

        The Company, as managing general partner of the Operating Partnership, is engaged in the ownership, management, leasing, acquisition, development, and expansion of regional shopping centers.

      The centers:

        The most important factor affecting the revenues generated by the centers is leasing to mall tenants (primarily specialty retailers), which represents approximately 90% of revenues. Anchors account for less than 10% of revenues because many own their stores and, in general, those that lease their stores do so at rates substantially lower than those in effect for mall tenants.

        The Company’s portfolio is concentrated in highly productive super-regional shopping centers. All 20 centers had annual rent rolls at December 31, 2002 of over $10 million. The Company believes that this level of productivity is indicative of the centers’ strong competitive position and is, in significant part, attributable to the Company’s business strategy and philosophy. The Company believes that large shopping centers (including regional and especially super-regional shopping centers) are the least susceptible to direct competition because (among other reasons) anchors and large specialty retail stores do not find it economically attractive to open additional stores in the immediate vicinity of an existing location for fear of competing with themselves. In addition to the advantage of size, the Company believes that the centers’ success can be attributed in part to their other physical characteristics, such as design, layout, and amenities.

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Business Strategy And Philosophy

        The Company believes that the regional shopping center business is not simply a real estate development business, but rather an operating business in which a retailing approach to the on-going management and leasing of the centers is essential. Thus the Company:

        The centers compete for retail consumer spending through diverse, in-depth presentations of predominantly fashion merchandise in an environment intended to facilitate customer shopping. While some centers include stores that target high-end, upscale customers, each center is individually merchandised in light of the demographics of its potential customers within convenient driving distance.

        The Company’s leasing strategy involves assembling a diverse mix of mall tenants in each of the centers in order to attract customers, thereby generating higher sales by mall tenants. High sales by mall tenants make the centers attractive to prospective tenants, thereby increasing the rental rates that prospective tenants are willing to pay. The Company implements an active leasing strategy to increase the centers’ productivity and to set minimum rents at higher levels. Elements of this strategy include terminating leases of under-performing tenants, renegotiating existing leases, and not leasing space to prospective tenants that (though viable or attractive in certain ways) would not enhance a center’s retail mix.

Potential For Growth

        The Company’s principal objective is to enhance shareholder value. The Company seeks to maximize the financial results of its assets, while pursuing a growth strategy that concentrates primarily on an active new center development program.

Internal Growth

        In mid-2001, the Company underwent a major review of its business strategies, which highlighted that 90% of the Company’s future growth will come from its existing core portfolio and business. Although the Company has always had a culture of intensively managing its assets and maximizing the rents from tenants, the Company committed to review all of the processes that impact the core portfolio in order to drive even better performance.

        First, the Company agreed upon the core business strategy, which is to maintain a portfolio of properties that deliver above-market profitable growth by providing targeted retailers with the best opportunity to do business in each market and targeted shoppers with the best local shopping experience for their needs.

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        The Company decided upon three endeavors that would lead to achievement of the key mission to “deliver above market profitable growth”. The Company’s first endeavor is to become an even more customer centric company than it is today, which will enable the Company to make better decisions driven by fact-based understanding of what retailers and shoppers want. The second endeavor is to become more operationally excellent, which will enable the Company to achieve competitive cost efficiencies, greater discipline, and more timely processes and decision making. This is especially important as the Company’s competitors search for economies of scale in increasingly larger operations. The third endeavor is to achieve profitable growth, which the Company has defined as maintaining the highest tenant sales and sales growth in the industry, and accelerating core Net Operating Income (NOI) growth over time. The Company believes further integrating these basic strategic themes throughout the organization will serve to coordinate and prioritize all of the Company’s efforts to achieve its strategy.

        The Company has identified the key drivers to achieve its core business strategy. These drivers fall into four categories: people drivers, organizational drivers, customer drivers and financial drivers. The Company identified 40 drivers of the core business that served as a basis for seven companywide initiatives to be completed in 2003 that will establish a strong foundation for improved core performance. These initiatives are each being led by teams of approximately 7 to 8 people from all areas of the organization.

        The Company strongly believes that focusing management attention on these initiatives will improve its performance on these drivers and by establishing specific benchmarks and goals for these drivers, which the Company can measure year after year, the Company will have set the stage for strong NOI growth over the near to midterm.

Development of New Centers

        The Company is pursuing an active program of regional shopping center development. The Company believes that it has the expertise to develop economically attractive regional shopping centers through intensive analysis of local retail opportunities. The Company believes that the development of new centers is an important use of its capital and an area in which the Company excels. At any time, the Company has numerous potential development projects in various stages.

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        The Mall at Millenia, a 1.1 million square foot super-regional center located in Orlando, Florida opened on October 18, 2002. The center is anchored by Neiman Marcus, Bloomingdale’s, and Macy’s. Additionally, one new center is currently under construction; Stony Point Fashion Park, a 690 thousand square foot center in Richmond, Virginia, is scheduled to open in September 2003. Construction is scheduled to begin in 2003 on NorthLake Mall, a 1.2 million square foot center in Charlotte, North Carolina. The center is scheduled to open in August 2005.

        The Company’s policies with respect to development activities are designed to reduce the risks associated with development. For instance, the Company previously entered into an agreement to lease a center while the Company investigated the redevelopment opportunities of the center. Also, the Company generally does not intend to acquire land early in the development process. Instead, the Company generally acquires options on land or forms partnerships with landholders holding potentially attractive development sites. The Company typically exercises the options only once it is prepared to begin construction. The pre-construction phase for a regional center typically extends over several years and the time to obtain anchor commitments, zoning and regulatory approvals, and public financing arrangements can vary significantly from project to project. In addition, the Company does not intend to begin construction until a sufficient number of anchor stores have agreed to operate in the shopping center, such that the Company is confident that the projected sales and rents from Mall GLA are sufficient to earn a return on invested capital in excess of the Company’s cost of capital. Having historically followed these principles, the Company’s experience indicates that, on average, less than 10% of the costs of the development of a regional shopping center will be incurred prior to the construction period. However, no assurance can be given that the Company will continue to be able to so limit pre-construction costs. Unexpected costs due to extended zoning and regulatory processes may cause the Company’s investment in a project to exceed this historic experience.

        While the Company will continue to evaluate development projects using criteria, including financial criteria for rates of return, similar to those employed in the past, no assurances can be given that the adherence to these policies will produce comparable results in the future. In addition, the costs of shopping center development opportunities that are explored but ultimately abandoned will, to some extent, diminish the overall return on development projects (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital Spending” for further discussion of the Company’s development activities).

Strategic Acquisitions

        The Company’s objective is to acquire existing centers only when they are compatible with the quality of the Company’s portfolio (or can be redeveloped to that level) and that satisfy the Company’s strategic plans and pricing requirements.

        In March 2003, the Company acquired the 15% minority interest in Great Lakes Crossing, bringing its ownership in the shopping center to 100%.

        In October 2002, the Company acquired Swerdlow Real Estate Group’s (Swerdlow’s) 50% interest in Dolphin Mall, bringing its ownership in the shopping center to 100%.

        In May 2002, the Operating Partnership acquired a 50% general partnership interest in SunValley Associates, a California general partnership that owns the Sunvalley shopping center located in Concord, California.

        Also in May 2002, the Company purchased an additional interest in Arizona Mills. The Company has a 50% interest in the center as of the purchase date.

Expansions of the Centers

        Another potential element of growth is the strategic expansion of existing properties to update and enhance their market positions, by replacing or adding new anchor stores or increasing mall tenant space. Most of the centers have been designed to accommodate expansions. Expansion projects can be as significant as new shopping center construction in terms of scope and cost, requiring governmental and existing anchor store approvals, design and engineering activities, including rerouting utilities, providing additional parking areas or decking, acquiring additional land, and relocating anchors and mall tenants (all of which must take place with a minimum of disruption to existing tenants and customers).

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        The following table includes information regarding recent development, acquisition, and expansion activities.

Developments:

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Rental Rates

        As leases have expired in the centers, the Company has generally been able to rent the available space, either to the existing tenant or a new tenant, at rental rates that are higher than those of the expired leases. In a period of increasing sales, rents on new leases will tend to rise as tenants’ expectations of future growth become more optimistic. In periods of slower growth or declining sales, rents on new leases will grow more slowly or will decline for the opposite reason. However, center revenues nevertheless increase as older leases roll over or are terminated early and replaced with new leases negotiated at current rental rates that are usually higher than the average rates for existing leases.

        The following tables contain certain information regarding per square foot minimum rent at centers that have been owned and open for at least two years.

        Excluding tenant spaces greater than 10,000 square feet opened in 2002 or 2001:

Lease Expirations

        The following table shows lease expirations based on information available as of December 31, 2002 for the next ten years for the centers in operation at that date:

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        The Company believes that the information in the table is not necessarily indicative of what will occur in the future because of several factors, but principally because of early lease terminations at the centers. For example, the average remaining term of the leases that were terminated during the period 1997 to 2002 was approximately two years. The average term of leases signed during 2002 and 2001 was approximately eight years.

        In addition, mall tenants at the centers may seek the protection of the bankruptcy laws, which could result in the termination of such tenants’ leases and thus cause a reduction in cash flow. In 2002, approximately 1.7% of leases were so affected compared to 4.5% in 2001. This statistic has ranged from 1.2% to 4.5% since the Company went public in 1992. Since 1991, the annual provision for losses on accounts receivable has been less than 2% of annual revenues.

Occupancy

        For centers owned and open for all of 2002 and 2001, leased space, ending occupancy, and average occupancy were 93.4%, 90.2%, and 88.3%, respectively, in 2002, and 91.6%, 88.6%, and 87.9%, respectively, in 2001. Mall tenant average occupancy, ending occupancy, and leased space rates of all centers are as follows:

Major Tenants

        No single retail company represents 10% or more of the Company’s revenues. The combined operations of The Limited, Inc. accounted for approximately 5.3% of Mall GLA as of December 31, 2002 and of 2002 minimum rent. No other single retail company accounted for more than 3% of Mall GLA or 4% of 2002 minimum rent. The following table shows the ten largest tenants and their square footage as of December 31, 2002.

8

General Risks of the Company

Economic Performance and Value of Shopping Centers Dependent on Many Factors

        The economic performance and value of the Company’s shopping centers are dependent on various factors. Additionally, these same factors will influence the Company’s decision whether to go forward on the development of new centers and may affect the ultimate economic performance and value of projects under construction (see other risks associated with the development of new centers under “Business of the Company — Development of New Centers”). Such factors include:

In addition, the value of shopping centers may be adversely affected by:

        Adverse changes in the economic performance and value of shopping centers would adversely affect the Company’s income and cash available to pay dividends.

Third Party Interests in the Centers

        Some of the shopping centers which the Company develops and leases are partially owned by non-affiliated partners through joint venture arrangements. As a result, the Company may not be able to control all decisions regarding those shopping centers and may be required to take actions that are in the interest of the joint venture partners but not the Company’s best interests.

Bankruptcy of Mall Tenants or Joint Venture Partners

        The Company could be adversely affected by the bankruptcy of third parties. The bankruptcy of a mall tenant could result in the termination of its lease which would lower the amount of cash generated by that mall. In addition, if a department store operating an anchor at one of our shopping centers were to go into bankruptcy and cease operating, its closing may lead to reduced customer traffic and lower mall tenant sales which would, in turn, affect the amount of rent our tenants pay the Company. The profitability of shopping centers held in a joint venture could also be adversely affected by the bankruptcy of one of the joint venture partners if, because of certain provisions of the bankruptcy laws, the Company was unable to make important decisions in a timely fashion or became subject to additional liabilities.

9

Investments in and Loans to Third Parties

        The Company occasionally extends credit to third parties in connection with the sales of land or other transactions. The Company has occasionally made investments in marketable and other equity securities. The Company is exposed to risk in the event the values of its investments and/or its loans decrease due to overall market conditions, business failure, and/or other nonperformance by the investees or counterparties.

Third Party Contracts

        The Company provides property management, leasing, development, and other administrative services to centers transferred to General Motors pension trusts, other third parties and to certain Taubman affiliates. The contracts under which these services are provided may be canceled or not renewed or may be renegotiated on terms less favorable to the Company. Certain overhead costs allocated to these contracts would not be eliminated if the contracts were to be canceled or not renewed.

Inability to Maintain Status as a REIT

Environmental Matters

        All of the centers presently owned by the Company (not including option interests in certain pre- development projects or any of the real estate managed but not included in the Company’s portfolio) have been subject to environmental assessments. The Company is not aware of any environmental liability relating to the centers or any other property, in which they have or had an interest (whether as an owner or operator) that the Company believes, would have a material adverse effect on the Company’s business, assets, or results of operations. No assurances can be given, however, that all environmental liabilities have been identified or that no prior owner, operator, or current occupant has created an environmental condition not known to the Company. Moreover, no assurances can be given that (1) future laws, ordinances, or regulations will not impose any material environmental liability or that (2) the current environmental condition of the centers will not be affected by tenants and occupants of the centers, by the condition of properties in the vicinity of the centers (such as the presence of underground storage tanks), or by third parties unrelated to the Company.

        There are asbestos containing materials (“ACMs”) at some of the older centers, primarily in the form of floor tiles, roof coatings, and mastics. The floor tiles, roof coatings, and mastics are generally in good condition. The Manager has an operations and maintenance program that details operating procedures with respect to ACMs prior to any renovation and that requires periodic inspection for any change in condition of existing ACMs.

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Personnel

        The Company has engaged the Manager to provide real estate management, acquisition, development, and administrative services required by the Company and its properties.

        As of December 31, 2002, the Manager had 1,045 full-time employees. The following table provides a breakdown of employees by operational areas as of December 31, 2002:

        As of January 1, 2002, certain employees, who previously had been employees of affiliates of the Manager, became direct employees of the Manager. The Manager considers its relations with its employees to be good.

Item 2. PROPERTIES.

Ownership

        The following table sets forth certain information about each of the centers. The table includes only centers in operation at December 31, 2002. Excluded from this table are Stony Point Fashion Park which will open in 2003, and NorthLake Mall which will open in 2005. Centers are owned in fee other than Beverly Center, Cherry Creek, International Plaza, MacArthur Center, and Sunvalley, which are held under ground leases expiring between 2049 and 2083.

        Certain of the centers are partially owned through joint ventures. Generally, the Operating Partnership’s joint venture partners have ongoing rights with regard to the disposition of the Operating Partnership’s interest in the joint ventures, as well as the approval of certain major matters.

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Anchors

        The following table summarizes certain information regarding the anchors at the operating centers (excluding the value centers) as of December 31, 2002.