SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: June 30, 2004
Commission File No. 1-11530

Taubman Centers, Inc.
(Exact name of registrant as specified in its charter)


Michigan		38-2033632

(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)



200 East Long Lake Road, Suite 300, P.O. Box 200, Bloomfield Hills, Michigan	48303-0200

(Address of principal executive offices)	(Zip Code)

(248) 258-6800

(Registrant’s telephone number, including area code)

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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


	Yes X.		No .

Indicate by a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).


	Yes X.		No .

As of August 4, 2004, there were outstanding 48,008,562 shares of the Company’s common stock, par value $0.01 per share.

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements.

The following consolidated financial statements of Taubman Centers, Inc. (the Company) are provided pursuant to the requirements of this item.


Consolidated Balance Sheet as of June 30, 2004 and December 31, 2003		2
Consolidated Statement of Operations and Comprehensive Income for the three months ended June 30, 2004 and 2003		3
Consolidated Statement of Operations and Comprehensive Income for the six months ended June 30, 2004 and 2003		4
Consolidated Statement of Cash Flows for the six months ended June 30, 2004 and 2003		5
Notes to Consolidated Financial Statements		6

1

TAUBMAN CENTERS, INC.

CONSOLIDATED BALANCE SHEET
(in thousands, except share data)


	June 30 2004			December 31 2003
Assets:
Properties	$	2,556,980		$	2,519,922
Accumulated depreciation and amortization		(486,194	)		(450,515	)

	$	2,070,786		$	2,069,407
Investment in Unconsolidated Joint Ventures (Note 5)		26,583			6,093
Cash and cash equivalents (Note 6)		25,772			30,403
Accounts and notes receivable, less allowance for doubtful accounts of
$7,865 and $7,403 in 2004 and December 31, 2003		24,789			32,592
Accounts and notes receivable from related parties		1,878			1,679
Deferred charges and other assets		54,705			46,796

	$	2,204,513		$	2,186,970

Liabilities:
Notes payable (Note 6)	$	1,601,224		$	1,495,777
Accounts payable and accrued liabilities		207,924			258,938
Dividends and distributions payable		12,962			13,481

	$	1,822,110		$	1,768,196
Commitments and Contingencies (Notes 6 and 9)

Preferred Equity of TRG (Notes 1 and 7)	$	126,505		$	97,275

Partners' Equity of TRG allocable to minority partners (Note 1)

Shareowners' Equity:
Series A Cumulative Redeemable Preferred Stock, $0.01 par value,
8,000,000 shares authorized, $200 million liquidation preference,
8,000,000 shares issued and outstanding at June 30, 2004 and
December 31, 2003	$	80		$	80
Series B Non-Participating Convertible Preferred Stock, $0.001 par
and liquidation value, 40,000,000 shares authorized, 29,855,737
and 29,819,738 shares issued and outstanding at June 30, 2004 and
December 31, 2003		30			30
Series C Cumulative Redeemable Preferred Stock, $0.01 par
value, 2,000,000 shares authorized, $75 million liquidation preference,
none issued
Series D Cumulative Redeemable Preferred Stock, $0.01 par value,
250,000 shares authorized, $25 million liquidation preference, none issued
Series F Cumulative Redeemable Preferred Stock, $0.01 par value,
300,000 shares authorized, $30 million liquidation preference, none issued
Common Stock, $0.01 par value, 250,000,000 shares authorized,
48,008,562 and 49,936,786 shares issued and outstanding at June 30,
2004 and December 31, 2003		480			499
Additional paid-in capital		626,218			664,362
Accumulated other comprehensive income (loss)		(13,329	)		(12,593	)
Dividends in excess of net income		(357,581	)		(330,879	)

	$	255,898		$	321,499

	$	2,204,513		$	2,186,970

See notes to consolidated financial statements.

2

TAUBMAN CENTERS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except share data)


	Three Months Ended June 30

		2004			2003
Income:
Minimum rents		$	54,009		$	49,294
Percentage rents			70			335
Expense recoveries			32,990			32,739
Revenues from management, leasing, and development services			5,245			5,571
Other			6,623			5,732

		$	98,937		$	93,671

Operating Expenses:
Recoverable expenses		$	30,673		$	28,391
Other operating			8,683			9,037
Costs related to unsolicited tender offer, net of recoveries (Note 4)			(44	)		9,163
Management, leasing, and development services			4,985			5,513
General and administrative			5,322			6,297
Interest expense			23,153			20,532
Depreciation and amortization			23,512			21,029

		$	96,284		$	99,962

Income (loss) before equity in income of Unconsolidated Joint Ventures,
discontinued operations, and minority and preferred interests		$	2,653		$	(6,291	)
Equity in income of Unconsolidated Joint Ventures (Note 5)			8,779			8,282

Income before discontinued operations and minority and preferred interests		$	11,432		$	1,991
Discontinued operations:
Net gain on disposition of interest in center			153
Income (loss) from operations (Note 1)						(122	)

Income before minority and preferred interests		$	11,585		$	1,869
Minority interest in consolidated joint ventures			(7	)		242
Minority interest in TRG:
TRG income allocable to minority partners			(2,664	)		965
Distributions in excess of income allocable to minority partners			(6,192	)		(9,794	)
TRG Series C, D, and F preferred distributions (Note 1)			(2,489	)		(2,250	)

Net income (loss)		$	233		$	(8,968	)
Series A preferred stock dividends			(4,150	)		(4,150	)

Net income (loss) allocable to common shareowners		$	(3,917	)	$	(13,118	)

Net income (loss)		$	233		$	(8,968	)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate instruments			2,828			(392	)
Reclassification adjustment for amounts recognized in net income			315			164

Comprehensive income (loss)		$	3,376		$	(9,196	)

Basic and diluted earnings per common share (Note 10):
Income (loss) from continuing operations		$	(0.08	)	$	(0.26	)

Net income (loss)		$	(0.08	)	$	(0.26	)

Cash dividends declared per common share		$	0.27		$	0.26

Weighted average number of common shares outstanding			49,089,844			50,142,939

See notes to consolidated financial statements.

3

TAUBMAN CENTERS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except share data)


	Six Months Ended June 30

		2004			2003
Income:
Minimum rents		$	107,646		$	99,393
Percentage rents			1,103			1,489
Expense recoveries			63,990			63,501
Revenues from management, leasing, and development services			10,229			10,363
Other			17,301			16,474

		$	200,269		$	191,220

Operating Expenses:
Recoverable expenses		$	58,459		$	55,705
Other operating			16,835			18,385
Costs related to unsolicited tender offer, net of recoveries (Note 4)			(1,044	)		19,012
Management, leasing, and development services			9,781			10,061
General and administrative			11,780			12,237
Interest expense			45,725			41,521
Depreciation and amortization			46,471			43,345

		$	188,007		$	200,266

Income (loss) before equity in income of Unconsolidated Joint Ventures,
discontinued operations, and minority and preferred interests		$	12,262		$	(9,046	)
Equity in income of Unconsolidated Joint Ventures (Note 5)			18,372			18,685

Income before discontinued operations and minority and preferred interests		$	30,634		$	9,639
Discontinued operations:
Net gain on disposition of interest in center			153
Income from operations (Note 1)						118

Income before minority and preferred interests		$	30,787		$	9,757
Minority interest in consolidated joint ventures			(185	)		90
Minority interest in TRG:
TRG income allocable to minority partners			(8,283	)		(242	)
Distributions in excess of income allocable to minority partners			(9,416	)		(17,054	)
TRG Series C, D, and F preferred distributions (Note 1)			(4,739	)		(4,500	)

Net income (loss)		$	8,164		$	(11,949	)
Series A preferred stock dividends			(8,300	)		(8,300	)

Net income (loss) allocable to common shareowners		$	(136	)	$	(20,249	)

Net income (loss)		$	8,164		$	(11,949	)
Other comprehensive income (loss):
Change in fair value of available-for-sale securities						(50	)
Realized loss on interest rate instruments			(6,054	)
Unrealized gain on interest rate instruments			4,688			645
Reclassification adjustment for amounts recognized in net income			630			328

Comprehensive income (loss)		$	7,428		$	(11,026	)

Basic and diluted earnings per common share (Note 10):
Income (loss) from continuing operations		$	0.00		$	(0.40	)

Net income (loss)		$	0.00		$	(0.40	)

Cash dividends declared per common share		$	0.54		$	0.52

Weighted average number of common shares outstanding			49,643,212			51,180,513

See notes to consolidated financial statements.

4

TAUBMAN CENTERS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)


	Six Months Ended June 30

		2004			2003
Cash Flows From Operating Activities:
Income before minority and preferred interests		$	30,787		$	9,757
Adjustments to reconcile income before minority and preferred interests
to net cash provided by operating activities:
Depreciation and amortization of continuing operations			46,471			43,345
Depreciation and amortization of discontinued operations						2,423
Provision for losses on accounts receivable			1,788			2,536
Gains on sales of land			(4,850	)		(957	)
Settlement of swap agreement (Note 6)			(6,054	)
Other			2,197			2,202
Increase (decrease) in cash attributable to changes in assets and liabilities:
Receivables, deferred charges and other assets			(3,084	)		(2,909	)
Accounts payable and other liabilities			(20,129	)		(822	)

Net Cash Provided by Operating Activities		$	47,126		$	55,575


Cash Flows From Investing Activities:
Additions to properties		$	(58,073	)	$	(82,398	)
Proceeds from sales of land			7,064			1,344
Acquisition of interests in centers (Note 3)			(3,288	)		(3,223	)
Contributions to Unconsolidated Joint Venture (Note 6)			(33,000	)
Distributions from Unconsolidated Joint Ventures in excess of income			12,698			37,167

Net Cash Used In Investing Activities		$	(74,599	)	$	(47,110	)


Cash Flows From Financing Activities:
Debt proceeds		$	783,376		$	379,398
Debt payments			(677,929	)		(330,101	)
Debt issuance costs			(7,644	)		(2,651	)
Issuance of common stock pursuant to Continuing Offer (Note 8)			1,187			1,529
Issuance of partnership units (Note 8)			2,644			50,000
Issuance of preferred equity (Note 7)			29,230
Repurchase of common stock (Note 7)			(50,178	)		(52,762	)
Distributions to minority and preferred interests			(22,438	)		(21,796	)
Cash dividends to Series A preferred shareowners			(8,300	)		(8,300	)
Cash dividends to common shareowners			(27,106	)		(27,164	)

Net Cash Provided By (Used In) Financing Activities		$	22,842		$	(11,847	)


Net Decrease In Cash and Cash Equivalents		$	(4,631	)	$	(3,382	)

Cash and Cash Equivalents at Beginning of Period			30,403			32,470


Cash and Cash Equivalents at End of Period		$	25,772		$	29,088

See notes to consolidated financial statements.

5

TAUBMAN CENTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Interim Financial Statements

Taubman Centers, Inc. (the Company or TCO), a real estate investment trust, or REIT, is the managing general partner of The Taubman Realty Group Limited Partnership (the Operating Partnership or TRG). The Operating Partnership is an operating subsidiary that engages in the ownership, management, leasing, acquisition, development, and expansion of regional retail shopping centers and interests therein. The Operating Partnership’s owned portfolio as of June 30, 2004 included 21 urban and suburban shopping centers in nine states. Another center is currently under construction in North Carolina.

The consolidated financial statements of the Company include all accounts of the Company, TRG, and its consolidated subsidiaries, including The Taubman Company LLC (the Manager). The Company also consolidates the accounts of the owner of the Oyster Bay project (Note 6), which qualifies as a variable interest entity under FASB Interpretation No. 46 “Consolidation of Variable Interest Entities” (FIN 46) and in which the Operating Partnership holds the majority variable interest. All intercompany transactions have been eliminated. Investments in entities not controlled but over which the Company has significant influence (Unconsolidated Joint Ventures) are accounted for under the equity method. The Company has evaluated its investments in the Unconsolidated Joint Ventures and has concluded that the ventures are not variable interest entities as defined in FIN 46, as revised. Accordingly, the Company continues to account for its interests in these ventures under the guidance in Statement of Position 78-9 (SOP 78-9). The Company’s partners or other owners in these Unconsolidated Joint Ventures have important rights, as contemplated by paragraphs .09 and .10 of SOP 78-9, including approval rights over annual operating budgets, capital spending, financing, admission of new partners/members, or sale of the properties and the Company has concluded that the equity method of accounting is appropriate for these interests. Specifically, the Company’s 79% investment in Westfarms is through a general partnership in which the other general partners have approval rights over annual operating budgets, capital spending, refinancing, or sale of the property. Under the equity method of accounting, the investments in Joint Ventures are initially recorded at cost, and subsequently increased for additional contributions and allocations of income and reduced for distributions received.

At June 30, 2004, the Operating Partnership’s equity included four classes of preferred equity (Series A, C, D, and F) and the net equity of the partnership unitholders. Net income and distributions of the Operating Partnership are allocable first to the preferred equity interests, and the remaining amounts to the general and limited partners in the Operating Partnership in accordance with their percentage ownership. The Series A Preferred Equity is owned by the Company and is eliminated in consolidation. The Series C, D, and F Preferred Equity are owned by institutional investors and have no stated maturity, sinking fund, or mandatory redemption requirements. The Series C and D Preferred Equity have a fixed 9% coupon rate and the Series F Preferred Equity has a fixed 8.2% coupon rate. The Company can redeem the Series C, D, and F Preferred Equity beginning in September 2004, November 2004, and May 2009, respectively. The Series C, D, and F Preferred Equity are convertible into Taubman Centers Preferred Stock beginning 10 years from the initial dates of issuance, having substantially similar terms as the related classes of preferred equity. The Series B Preferred Stock is currently held by partners in TRG other than the Company. The Series B Preferred Stock entitles its holders to one vote per share on all matters submitted to the Company’s shareholders and votes together with the common stock on all matters as a single class.

Because the net equity of the Operating Partnership unitholders is less than zero, the interest of the noncontrolling unitholders is presented as a zero balance in the consolidated balance sheet as of June 30, 2004 and December 31, 2003. The income allocated to the noncontrolling unitholders is equal to their share of distributions. The net equity of the Operating Partnership is less than zero because of accumulated distributions in excess of net income and not as a result of operating losses. Distributions to partners are usually greater than net income because net income includes non-cash charges for depreciation and amortization.

6

TAUBMAN CENTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The Company’s ownership in the Operating Partnership at June 30, 2004 consisted of a 60% managing general partnership interest, as well as the Series A Preferred Equity interest. The Company’s average ownership percentage in the Operating Partnership for both the six months ended June 30, 2004 and 2003 was 61%. At June 30, 2004, the Operating Partnership had 79,980,841 units of partnership interest outstanding, of which the Company owned 48,008,562. Included in the total units outstanding are 43,514 units issued in connection with the 1999 acquisition of Lord Associates that currently do not receive allocations of income or distributions, and 2,083,333 non-voting units issued in May 2003.

Biltmore Fashion Park was sold in December 2003. The Company has separately presented the results of Biltmore Fashion Park as discontinued operations through the date of the sale. In 2004, the Company recognized a $0.2 million adjustment to the gain on the disposition of the center.

The unaudited interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods have been made. The results of interim periods are not necessarily indicative of the results for a full year.

Dollar amounts presented in tables within the notes to the financial statements are stated in thousands, except share data or as otherwise noted.

Certain prior year amounts have been reclassified to conform to 2004 classifications.

Note 2 – Income Taxes

The Company’s Taxable REIT Subsidiaries are subject to corporate level income taxes, which are provided for in the Company’s financial statements. The Company’s deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced, if necessary, by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence. The Company’s temporary differences primarily relate to deferred compensation and depreciation. During the three and six months ended June 30, 2004, the Company’s federal income tax expense was zero as a result of a net operating loss incurred from its Taxable REIT Subsidiaries. As of June 30, 2004, the Company had a net deferred tax asset of $3.4 million, after a valuation allowance of $10.3 million.

Note 3 – Acquisitions

In January 2004, the Company purchased the additional 30% ownership of Beverly Center from Sheldon Gordon and the estate of E. Phi