TAUBMAN CENTERS INC - FORM 8-K - EX-99

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8-K - TAUBMAN CENTERS INC	a2012q28k.htm



Taubman Centers, Inc.	T 248.258.6800
200 East Long Lake Road	www.taubman.com
Suite 300
Bloomfield Hills, Michigan
48304-2324

CONTACT:

Barbara Baker

Taubman, Vice President, Investor Relations

248-258-7367

bbaker@taubman.com

FOR IMMEDIATE RELEASE

TAUBMAN CENTERS ISSUES STRONG SECOND QUARTER RESULTS


•	Funds from Operations (FFO) Per Share Up 19.7%


•	Net Operating Income (NOI) Excluding Lease Cancellation Income Up 8.2%


•	Sales Per Square Foot and Occupancy Up Substantially


•	Company Increases Guidance

BLOOMFIELD HILLS, Mich., July 26, 2012 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the second quarter of 2012.



	June 30, 2012 Three Months Ended	June 30, 2011 Three Months Ended	June 30, 2012 Six Months Ended	June 30, 2011 Six Months Ended
Net income allocable to common shareholders per diluted share (EPS)	$0.27	$0.15	$0.57	$0.34
Funds from Operations (FFO) per diluted share Growth rate	$0.73 19.7%	$0.61	$1.47 18.5%	$1.24
FFO per diluted share (excluding The Pier Shops and Regency Square) Growth rate	$0.73 9.0%	$0.67	$1.47 8.9%	$1.35

“These strong results were propelled by increases in rents and recoveries at our centers,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “The organic core growth we experienced was augmented by the solid performance of our newest center, City Creek Center (Salt Lake City, Utah), which opened in March 2012.”

Healthy Sales, Leased Space, Occupancy, Rent, and NOI Increases

Mall tenant sales per square foot increased 8.4 percent for the three months ended June 30, 2012 and 10.8 percent for the six months ended June 30, 2012. The company's 12-month trailing mall tenant sales per square foot reached a record $672, up 12 percent from June 30, 2011.

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Leased space in comparable centers for Taubman's portfolio was 92.2 percent on June 30, 2012, up 1.3 percent from 90.9 percent on June 30, 2011. Ending occupancy in comparable centers was 90.2 percent on June 30, 2012, up 2 percent from 88.2 percent on June 30, 2011.

Average rent per square foot for the second quarter of 2012 was $47.07, up a healthy 3.8 percent from $45.36 in the second quarter of 2011. For the six months ended June 30, 2012, average rent per square foot was $46.52, up from $45.30 in the six months ended June 30, 2011.

NOI excluding lease cancellation income was up 8.2 percent for the three months ended June 30, 2012, bringing 2012 year-to-date growth to 8.8 percent. "Occupancy and rental rate increases continue to drive robust NOI growth," said Mr. Taubman. "While increases in sales per square foot moderated from the double-digit sales increases we saw for the previous nine quarters, retailer sentiment remains very positive. Leasing activity continues to be strong and retail bankruptcies remain at historic lows."

Favorable Financings

In mid-June, the company completed a $320 million, 10-year, non-recourse financing on its 79 percent owned Westfarms mall (West Hartford, Conn.). The loan bears interest at an all-in fixed rate of 4.53 percent. The company received approximately $110 million as its share of the excess proceeds, which it used to pay down its revolving credit facilities.

The company is also finalizing attractive refinancings at The Mall at Millenia (Orlando, Fla.) and Sunvalley (Concord, Calif.), with both refinancings anticipated to close by year end.

2012 Guidance Increased

The company is increasing its guidance on 2012 FFO per diluted share to $3.22 to $3.27 and 2012 Adjusted FFO per share to the range of $3.24 to $3.29. 2012 Adjusted FFO guidance excludes a charge relating to the early refinancing of the loan on The Mall at Millenia. The company is also increasing its guidance on 2012 EPS to $1.27 to $1.37. This guidance now assumes comparable center NOI growth, excluding lease cancellation income, in the range of 5 to 6 percent for the year, up from about 4 percent previously.

The company's previous guidance on 2012 FFO per diluted share was a range of $3.18 to $3.25 and its previous guidance on 2012 EPS was a range of $1.20 to $1.32.

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 Nonoperating Income

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•	Recoveries Ratio Analysis


•	Balance Sheets


•	Debt Summary


•	Other Debt, Equity and Certain Balance Sheet Information


•	Construction


•	Acquisitions


•	Capital Spending


•	Operational Statistics


•	Owned Centers


•	Major Tenants in Owned Portfolio


•	Anchors in Owned Portfolio


•	Operating Statistics Glossary

Investor Conference Call

The company will host a conference call at 10:00 AM Eastern Daylight Time on Friday, July 27 to discuss these results, business conditions and the company's outlook for the remainder of 2012. 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 27 U.S. owned, leased and/or managed properties, the most productive in the publicly held U.S. regional mall 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. For more information about Taubman, visit www.taubman.com.

For ease of use, references in this press release to “Taubman Centers,” “company,” “Taubman” or an operating platform mean Taubman Centers, Inc. and/or one or more of a number of separate, affiliated entities. Business is actually conducted by an affiliated entity rather than Taubman Centers, Inc. itself or the named operating platform.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management's current views with respect to future events and financial performance. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future. Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to the global credit environment and the continuing impacts of the recent U.S. recession, other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, adverse changes in the retail industry, general development risks, and integration and other acquisition risks. 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.

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TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended June 30, 2012 and 2011
(in thousands of dollars, except as indicated)

	Three Months Ended				Year to Date
	2012		2011		2012		2011

Income from continuing operations	31,448		26,859		63,625		57,428
Income (loss) from discontinued operations			(6,569)				(12,694)
Net income	31,448		20,290		63,625		44,734
Noncontrolling share of income of consolidated joint ventures	(2,875)		(2,785)		(4,709)		(6,170)
Noncontrolling share of income of TRG - continuing operations	(8,138)		(6,538)		(16,889)		(14,149)
Noncontrolling share of loss of TRG - discontinued operations			2,032				3,954
TRG series F preferred distributions			(615)				(1,230)
Preferred stock dividends	(3,659)		(3,659)		(7,317)		(7,317)
Distributions to participating securities of TRG	(403)		(381)		(806)		(762)
Net income attributable to Taubman Centers, Inc. common shareowners	16,373		8,344		33,904		19,060
Net income per common share - basic	0.28		0.15		0.58		0.34
Net income per common share - diluted	0.27		0.15		0.57		0.34
Beneficial interest in EBITDA - Consolidated Businesses (1)	84,288		72,528		170,272		146,991
Beneficial interest in EBITDA - Unconsolidated Joint Ventures (1)	24,759		23,511		49,865		47,220
Funds from Operations (1)	63,520		51,226		128,672		103,955
Funds from Operations attributable to TCO (1)	43,815		35,383		88,605		71,563
Funds from Operations per common share - basic (1)	0.75		0.63		1.51		1.28
Funds from Operations per common share - diluted (1)	0.73		0.61		1.47		1.24
Weighted average number of common shares outstanding - basic	58,789,737		56,186,216		58,518,442		55,875,329
Weighted average number of common shares outstanding - diluted	60,201,385		57,769,465		60,054,622		57,376,876
Common shares outstanding at end of period	58,812,588		57,889,530
Weighted average units - Operating Partnership - basic	85,229,124		81,345,102		84,978,006		81,162,051
Weighted average units - Operating Partnership - diluted	87,512,034		83,799,613		87,385,448		83,534,859
Units outstanding at end of period - Operating Partnership	85,244,196		83,048,416
Ownership percentage of the Operating Partnership at end of period	69.0	%	69.7	%
Number of owned shopping centers at end of period	24		23		24		23

Operating Statistics (2):
Net Operating Income excluding lease cancellation income - growth % (3)	8.2	%			8.8	%
Mall tenant sales - all centers (4)	1,396,440		1,182,236		2,750,258		2,297,187
Mall tenant sales - comparable (3)(4)	1,291,277		1,182,236		2,556,334		2,297,187
Ending occupancy - all centers	90.1	%	88.2	%	90.1	%	88.2	%
Ending occupancy - comparable (3)	90.2	%	88.2	%	90.2	%	88.2	%
Average occupancy - all centers	89.9	%	88.2	%	89.8	%	88.2	%
Average occupancy - comparable (3)	90.0	%	88.2	%	89.8	%	88.2	%
Leased space - all centers	92.3	%	90.9	%	92.3	%	90.9	%
Leased space - comparable (3)	92.2	%	90.9	%	92.2	%	90.9	%
All centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (4)	13.1	%	13.8	%	13.2	%	14.3	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (4)	12.8	%	12.6	%	12.4	%	12.9	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (4)	13.0	%	13.4	%	12.9	%	13.8	%
Comparable centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (3)(4)	13.4	%	13.8	%	13.5	%	14.3	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (4)	12.8	%	12.6	%	12.4	%	12.9	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (3)(4)	13.2	%	13.4	%	13.2	%	13.8	%
Average rent per square foot - Consolidated Businesses (3)	47.60		45.44		47.18		45.36
Average rent per square foot - Unconsolidated Joint Ventures	45.94		45.20		45.13		45.14
Average rent per square foot - Combined (3)	47.07		45.36		46.52		45.30

Taubman Centers/5



(1)	Beneficial Interest in EBITDA represents the Operating Partnership’s share of the earnings before interest, income taxes, and depreciation and amortization of its consolidated and unconsolidated businesses. The Company believes Beneficial Interest in EBITDA provides a useful indicator of operating performance, as it is customary in the real estate and shopping center business to evaluate the performance of properties on a basis unaffected by capital structure.
	The Company uses Net Operating Income (NOI), as an alternative measure to evaluate the operating performance of centers, both on individual and stabilized portfolio bases. The Company defines NOI as property-level operating revenues (includes rental income excluding straight-line adjustments of minimum rent) less maintenance, taxes, utilities, promotion, ground rent (including straight-line adjustments), and other property operating expenses. Since NOI excludes general and administrative expenses, pre-development charges, interest income and expense, depreciation and amortization, impairment charges, restructuring charges, and gains from land and property dispositions, it provides a performance measure that, when compared period over period, reflects the revenues and expenses most directly associated with owning and operating rental properties, as well as the impact on their operations from trends in tenant sales, occupancy and rental rates, and operating costs. The Company also uses NOI excluding lease cancellation income as an alternative measure because this income may vary significantly from period to period, which can affect comparability and trend analysis. The Company generally provides separate projections for expected comparable center NOI growth and lease cancellation income. Comparable centers are generally defined as centers that were owned and open for the entire current and preceding period presented.
	The National Association of Real Estate Investment Trusts (NAREIT) defines Funds from Operations (FFO) as net income (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains (or losses) from extraordinary items and sales of properties and impairment write-downs of depreciable real estate, plus real estate related depreciation and after adjustments for unconsolidated partnerships and joint ventures. The Company believes that FFO is a useful supplemental measure of operating performance for REITs. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, the Company and most industry investors and analysts have considered presentations of operating results that exclude historical cost depreciation to be useful in evaluating the operating performance of REITs.
	The Company primarily uses FFO in measuring operating performance and in formulating corporate goals and compensation. The Company may also present adjusted versions of NOI, Beneficial Interest in EBITDA, and FFO when used by management to evaluate operating performance when certain significant items have impacted results that affect comparability with prior or future periods due to the nature or amounts of these items. In the reconciliations in Tables 4 and 5 of this Press Release, the Company has separately presented the prior year impacts of The Pier Shops and Regency Square, as the titles for these centers were transferred to the lenders and operations of these centers have been reclassified to discontinued operations.
	These non-GAAP measures as presented by the Company are not necessarily comparable to similarly titled measures used by other REITs due to the fact that not all REITs use the same definitions. These measures should not be considered alternatives to net income or as an indicator of the Company's operating performance. Additionally, these measures do not represent cash flows from operating, investing or financing activities as defined by GAAP.

(2)	Statistics exclude The Pier Shops and Regency Square.

(3)	Statistics exclude non-comparable centers.

(4)	Based on reports of sales furnished by mall tenants.

Taubman Centers/6



TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended June 30, 2012 and 2011
(in thousands of dollars)
				2012				2011
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		98,940		40,570		83,759		38,564
		Percentage rents		2,049		1,228		1,550		936
		Expense recoveries		62,215		23,573		54,268		21,966
		Management, leasing, and development services		8,559				4,480
		Other		7,702		1,400		5,350		1,452
			Total revenues	179,465		66,771		149,407		62,918

EXPENSES:
		Maintenance, taxes, utilities, and promotion		48,903		17,505		43,848		16,293
		Other operating		19,922		4,258		15,804		3,632
		Management, leasing, and development services		6,987				2,323
		General and administrative		10,043				8,005
		Interest expense		36,676		15,823		29,691		13,949
		Depreciation and amortization		36,235		9,019		34,424		9,203
			Total expenses	158,766		46,605		134,095		43,077

Nonoperating income				71		(7	)	656		5
				20,770		20,159		15,968		19,846
Income tax (expense) benefit				(492	)			5
Equity in income of Unconsolidated Joint Ventures				11,170				10,886

Income from continuing operations				31,448				26,859
Discontinued operations (2):
		EBITDA						1,115
		Interest expense						(5,779	)
		Depreciation and amortization						(1,905	)
Income (loss) from discontinued operations								(6,569	)

Net income				31,448				20,290
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(2,875	)			(2,785	)
		TRG series F preferred distributions						(615	)
		Noncontrolling share of income of TRG - continuing operations		(8,138	)			(6,538	)
		Noncontrolling share of loss of TRG - discontinued operations						2,032
Distributions to participating securities of TRG				(403	)			(381	)
Preferred stock dividends				(3,659	)			(3,659	)
Net income attributable to Taubman Centers, Inc. common shareowners				16,373				8,344

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		93,681		45,001		81,198		42,998
		EBITDA - outside partners' share		(9,393	)	(20,242	)	(8,670	)	(19,487	)
		Beneficial interest in EBITDA		84,288		24,759		72,528		23,511
		Beneficial interest expense		(32,473	)	(8,225	)	(32,727	)	(7,247	)
		Beneficial income tax (expense) benefit		(515	)			5
		Non-real estate depreciation		(655	)			(570	)
		Preferred dividends and distributions		(3,659	)			(4,274	)
		Funds from Operations contribution		46,986		16,534		34,962		16,264

		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	1,014		115		38		28

		Purchase accounting adjustments - minimum rents		186

		Purchase accounting adjustments - interest expense reduction		(858	)

(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	)	Includes the operations of Regency Square and The Pier Shops.

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TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Six Months Ended June 30, 2012 and 2011
(in thousands of dollars)
				2012				2011
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		192,684		79,197		166,640		77,355
		Percentage rents		6,452		3,431		4,854		2,293
		Expense recoveries		118,692		46,337		105,705		44,196
		Management, leasing, and development services		17,207				10,340
		Other		13,694		3,116		11,502		2,433
			Total revenues	348,729		132,081		299,041		126,277

EXPENSES:
		Maintenance, taxes, utilities, and promotion		90,601		33,614		84,512		32,473
		Other operating		36,232		7,880		32,883		7,396
		Management, leasing, and development services		15,509				4,603
		General and administrative		18,450				15,289
		Interest expense		74,203		31,490		59,465		29,545
		Depreciation and amortization		72,669		17,595		66,449		18,578
			Total expenses	307,664		90,579		263,201		87,992

Nonoperating income				195		1		761		10
				41,260		41,503		36,601		38,295
Income tax expense				(706	)			(205	)
Equity in income of Unconsolidated Joint Ventures				23,071				21,032

Income from continuing operations				63,625				57,428
Discontinued operations (2):
		EBITDA						1,995
		Interest expense						(11,020	)
		Depreciation and amortization						(3,669	)
Income (loss) from discontinued operations								(12,694	)

Net income				63,625				44,734
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(4,709	)			(6,170	)
		TRG series F preferred distributions						(1,230	)
		Noncontrolling share of income of TRG - continuing operations		(16,889	)			(14,149	)
		Noncontrolling share of loss of TRG - discontinued operations						3,954
Distributions to participating securities of TRG				(806	)			(762	)
Preferred stock dividends				(7,317	)			(7,317	)
Net income attributable to Taubman Centers, Inc. common shareowners				33,904				19,060

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		188,132		90,588		164,510		86,418
		EBITDA - outside partners' share		(17,860	)	(40,723	)	(17,519	)	(39,198	)
		Beneficial interest in EBITDA		170,272		49,865		146,991		47,220
		Beneficial interest expense		(65,794	)	(16,319	)	(64,843	)	(15,324	)
		Beneficial income tax expense		(726	)			(205	)
		Non-real estate depreciation		(1,309	)			(1,337	)
		Preferred dividends and distributions		(7,317	)			(8,547	)
		Funds from Operations contribution		95,126		33,546		72,059		31,896

		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	1,266		173		(157	)	56

		Purchase accounting adjustments - minimum rents		399

		Purchase accounting adjustments - interest expense reduction		(1,715	)

(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	)	Includes the operations of Regency Square and The Pier Shops.

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TAUBMAN CENTERS, INC.
Table 4 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
For the Three Months Ended June 30, 2012 and 2011
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2012					2011
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		16,373		58,789,737	0.28		8,344		56,186,216	0.15

Add impact of share-based compensation		134		1,411,648			86		1,583,249

Net income attributable to TCO common shareowners - Diluted		16,507		60,201,385	0.27		8,430		57,769,465	0.15

Add depreciation of TCO's additional basis		1,721			0.03		1,720			0.03

Net income attributable to TCO common shareowners,
	excluding step-up depreciation	18,228		60,201,385	0.30		10,150		57,769,465	0.18

Add:
	Noncontrolling share of income of TRG - continuing operations	8,138		26,439,387			6,538		25,158,886
	Noncontrolling share of loss of TRG - discontinued operations						(2,032	)
	Distributions to participating securities	403		871,262			381		871,262

Net income attributable to partnership unitholders
	and participating securities	26,769		87,512,034	0.31		15,037		83,799,613	0.18

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	36,235			0.41		34,424			0.41
	Consolidated businesses at 100% - discontinued operations						1,905			0.02
	Depreciation of TCO's additional basis	(1,721	)		(0.02	)	(1,720	)		(0.02	)
	Noncontrolling partners in consolidated joint ventures	(2,338	)		(0.03	)	(3,142	)		(0.04	)
	Share of Unconsolidated Joint Ventures	5,364			0.06		5,378			0.06
	Non-real estate depreciation	(655	)		(0.01	)	(570	)		(0.01	)

Less impact of share-based compensation		(134	)		(0.00)		(86	)		(0.00)

Funds from Operations		63,520		87,512,034	0.73		51,226		83,799,613	0.61

TCO's average ownership percentage of TRG		69.0	%				69.1	%

Funds from Operations attributable to TCO		43,815			0.73		35,383			0.61




Funds from Operations							51,226		83,799,613	0.61

The Pier Shops' and Regency Square's negative FFO							4,664			0.06

Funds from Operations,
	excluding The Pier Shops and Regency Square						55,890		83,799,613	0.67

TCO's average ownership percentage of TRG							69.1	%

Funds from Operations attributable to TCO,
	excluding The Pier Shops and Regency Square						38,604			0.67

Taubman Centers/9



TAUBMAN CENTERS, INC.
Table 5 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
For the Six Months Ended June 30, 2012 and 2011
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2012					2011
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		33,904		58,518,442	0.58		19,060		55,875,329	0.34

Add impact of share-based compensation		302		1,536,180			184		1,501,547

Net income attributable to TCO common shareowners - Diluted		34,206		60,054,622	0.57		19,244		57,376,876	0.34

Add depreciation of TCO's additional basis		3,440			0.06		3,440			0.06

Net income attributable to TCO common shareowners,
	excluding step-up depreciation	37,646		60,054,622	0.63		22,684		57,376,876	0.40

Add:
	Noncontrolling share of income of TRG - continuing operations	16,889		26,459,564			14,149		25,286,721
	Noncontrolling share of loss of TRG - discontinued operations						(3,954	)
	Distributions to participating securities	806		871,262			762		871,262

Net income attributable to partnership unitholders
	and participating securities	55,341		87,385,448	0.63		33,641		83,534,859	0.40

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	72,669			0.83		66,449			0.80
	Consolidated businesses at 100% - discontinued operations						3,669			0.04
	Depreciation of TCO's additional basis	(3,440	)		(0.04	)	(3,440	)		(0.04	)
	Noncontrolling partners in consolidated joint ventures	(4,762	)		(0.05	)	(5,707	)		(0.07	)
	Share of Unconsolidated Joint Ventures	10,475			0.12		10,864			0.13
	Non-real estate depreciation	(1,309	)		(0.01	)	(1,337	)		(0.02	)

Less impact of share-based compensation		(302	)		(0.00)		(184	)		(0.00)

Funds from Operations		128,672		87,385,448	1.47		103,955		83,534,859	1.24

TCO's average ownership percentage of TRG		68.9	%				68.8	%

Funds from Operations attributable to TCO		88,605			1.47		71,563			1.24




Funds from Operations							103,955		83,534,859	1.24

The Pier Shops' and Regency Square's negative FFO							9,024			0.11

Funds from Operations,
	excluding The Pier Shops and Regency Square						112,979		83,534,859	1.35

TCO's average ownership percentage of TRG							68.8	%

Funds from Operations attributable to TCO,
	excluding The Pier Shops and Regency Square						77,779			1.35

Taubman Centers/10



TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended June 30, 2012 and 2011
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)

			Three Months Ended				Year to Date
			2012		2011		2012		2011

Net income			31,448		20,290		63,625		44,734

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations		36,235		34,424		72,669		66,449
	Consolidated businesses at 100% - discontinued operations				1,905				3,669
	Noncontrolling partners in consolidated joint ventures		(2,338	)	(3,142	)	(4,762	)	(5,707	)
	Share of Unconsolidated Joint Ventures		5,364		5,378		10,475		10,864

Add (less) interest expense and income tax expense (benefit):
	Interest expense:
		Consolidated businesses at 100% - continuing operations	36,676		29,691		74,203		59,465
		Consolidated businesses at 100% - discontinued operations			5,779				11,020
		Noncontrolling partners in consolidated joint ventures	(4,203	)	(2,743	)	(8,409	)	(5,642	)
		Share of Unconsolidated Joint Ventures	8,225		7,247		16,319		15,324
	Share of income tax expense (benefit)		515		(5	)	726		205

Less noncontrolling share of income of consolidated joint ventures			(2,875	)	(2,785	)	(4,709	)	(6,170	)

Beneficial Interest in EBITDA			109,047		96,039		220,137		194,211

TCO's average ownership percentage of TRG			69.0	%	69.1	%	68.9	%	68.8	%

Beneficial Interest in EBITDA attributable to TCO			75,219		66,335		151,593		133,694

Taubman Centers/11



TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended June 30, 2012 and 2011
(in thousands of dollars)

		Three Months Ended						Three Months Ended						Year to Date						Year to Date
		2012			2011			2011			2010			2012			2011			2011			2010

Net income		31,448			20,290			20,290			18,484			63,625			44,734			44,734			35,297

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	36,235			34,424			34,424			33,976			72,669			66,449			66,449			69,044
	Consolidated businesses at 100% - discontinued operations				1,905			1,905			1,942						3,669			3,669			3,958
	Noncontrolling partners in consolidated joint ventures	(2,338	)		(3,142	)		(3,142	)		(2,503	)		(4,762	)		(5,707	)		(5,707	)		(5,018	)
	Share of Unconsolidated Joint Ventures	5,364			5,378			5,378			5,323			10,475			10,864			10,864			10,801

Add (less) interest expense and income tax expense:
	Interest expense:
	Consolidated businesses at 100% - continuing operations	36,676			29,691			29,691			32,904			74,203			59,465			59,465			65,414
	Consolidated businesses at 100% - discontinued operations				5,779			5,779			5,019						11,020			11,020			9,926
	Noncontrolling partners in consolidated joint ventures	(4,203	)		(2,743	)		(2,743	)		(5,293	)		(8,409	)		(5,642	)		(5,642	)		(10,513	)
	Share of Unconsolidated Joint Ventures	8,225			7,247			7,247			8,248			16,319			15,324			15,324			16,450
	Share of income tax expense (benefit)	515			(5	)		(5	)		114			726			205			205			310

Less noncontrolling share of income of consolidated joint ventures		(2,875	)		(2,785	)		(2,785	)		(1,968	)		(4,709	)		(6,170	)		(6,170	)		(3,981	)

Add EBITDA attributable to outside partners:
	EBITDA attributable to noncontrolling partners in consolidated joint ventures	9,393			8,670			8,670			9,764			17,860			17,519			17,519			19,512
	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	20,242			19,487			19,487			18,656			40,723			39,198			39,198			38,138

EBITDA at 100%		138,682			124,196			124,196			124,666			278,720			250,928			250,928			249,338

Add (less) items excluded from shopping center NOI:
	General and administrative expenses	10,043			8,005			8,005			7,036			18,450			15,289			15,289			14,425
	Management, leasing, and development services, net	(1,572	)		(2,157	)		(2,157	)		(1,822	)		(1,698	)		(5,737	)		(5,737	)		(3,285	)
	Gains on sales of peripheral land				(519	)		(519	)		(1,040	)					(519	)		(519	)		(1,040	)
	Interest income	(64	)		(170	)		(170	)		(99	)		(196	)		(303	)		(303	)		(260	)
	Straight-line of rents	(1,831	)		(334	)		(334	)		(552	)		(2,480	)		(543	)		(543	)		(524	)
	Non-center specific operating expenses and other	8,520			7,547			7,547			5,633			15,416			14,812			14,812			11,815

NOI - all centers at 100%		153,778			136,568			136,568			133,822			308,212			273,927			273,927			270,469

Less - NOI of non-comparable centers		(7,032	)	(1)	(1,057	)	(2)	(1,057	)	(2)	(2,093	)	(2)	(12,771	)	(1)	(1,876	)	(2)	(1,876	)	(2)	(4,137	)	(2)

NOI at 100% - comparable centers		146,746			135,511			135,511			131,729			295,441			272,051			272,051			266,332

NOI - growth %		8.3	%					2.9	%					8.6	%					2.1	%

NOI at 100% - comparable centers		146,746			135,511			135,511			131,729			295,441			272,051			272,051			266,332

Lease cancellation income		(950	)		(816	)		(816	)		(3,235	)		(1,939	)		(2,199	)		(2,199	)		(9,182	)

NOI at 100% - comparable centers excluding lease cancellation income		145,796			134,695			134,695			128,494			293,502			269,852			269,852			257,150

NOI excluding lease cancellation income - growth %		8.2	%					4.8	%					8.8	%					4.9	%

(1)	Includes City Creek Center, The Mall at Green Hills, The Gardens on El Paseo and El Paseo Village.
(2)	Includes The Pier Shops and Regency Square.

Taubman Centers/12



TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of June 30, 2012 and December 31, 2011
(in thousands of dollars)

			As of
			June 30, 2012		December 31, 2011
Consolidated Balance Sheet of Taubman Centers, Inc. :

Assets:
	Properties		4,125,093		4,020,954
	Accumulated depreciation and amortization		(1,330,341	)	(1,271,943	)
			2,794,752		2,749,011
	Investment in Unconsolidated Joint Ventures		76,303		75,582
	Cash and cash equivalents		45,227		24,033
	Restricted cash (1)		4,485		295,318
	Accounts and notes receivable, net		39,964		59,990
	Accounts receivable from related parties		2,282		1,418
	Deferred charges and other assets		133,059		131,440
			3,096,072		3,336,792
Liabilities:
	Mortgage notes payable		2,836,148		2,864,135
	Installment notes (1)				281,467
	Accounts payable and accrued liabilities		248,642		255,146
	Distributions in excess of investments in and net income of
		Unconsolidated Joint Ventures	306,599		192,257
			3,391,389		3,593,005

Redeemable noncontrolling interests			82,337		84,235

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	588		580
		Additional paid-in capital	670,662		673,923
		Accumulated other comprehensive loss	(30,231	)	(27,613	)
		Dividends in excess of net income	(883,591	)	(863,040	)
			(242,546	)	(216,124	)
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(104,374	)	(101,872	)
		Noncontrolling interests in partnership equity of TRG	(30,734	)	(22,452	)
			(135,108	)	(124,324	)
			(377,654	)	(340,448	)
			3,096,072		3,336,792

Combined Balance Sheet of Unconsolidated Joint Ventures :

Assets:
	Properties		1,109,732		1,107,314
	Accumulated depreciation and amortization		(459,040	)	(446,059	)
			650,692		661,255
	Cash and cash equivalents		27,022		22,042
	Accounts and notes receivable, net		15,914		24,628
	Deferred charges and other assets		26,144		21,289
			719,772		729,214
Liabilities:
	Mortgage notes payable		1,273,666		1,138,808
	Accounts payable and other liabilities, net		55,639		55,737
			1,329,305		1,194,545

Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(345,311	)	(235,525	)
	Accumulated deficiency in assets - Joint Venture Partners		(242,314	)	(211,478	)
	Accumulated other comprehensive income (loss) - TRG		(10,954	)	(9,233	)
	Accumulated other comprehensive income (loss) - Joint Venture Partners		(10,954	)	(9,095	)
			(609,533	)	(465,331	)
			719,772		729,214

(1)	Installment notes were paid in full in February 2012 with restricted cash drawn on the Company's line of credit as of December 31, 2011.

Taubman Centers/13



TAUBMAN CENTERS, INC.
Table 9 - Annual Guidance
(all dollar amounts per common share on a diluted basis; amounts may not add due to rounding)


			Range for Year Ended
			December 31, 2012

Adjusted Funds from Operations per common share			3.24		3.29

		Early extinguishment of debt charge (1)	(0.02	)	(0.02	)

Funds from Operations per common share			3.22		3.27

Real estate depreciation - TRG			(1.82	)	(1.78	)

Distributions on participating securities of TRG			(0.02	)	(0.02	)

Depreciation of TCO's additional basis in TRG			(0.11	)	(0.11	)

Net income attributable to common shareowners, per common share (EPS)			1.27		1.37


(1	)	In October 2012, we expect to refinance the existing $197.8 million, 5.46% loan on The Mall at Millenia, a 50 percent owned joint venture. Since this is earlier than allowed under the current loan, the partnership is expected to incur approximately $3.2 million in defeasance charges, of which $1.6 million is our share. The new 12 year, non-recourse $350 million loan will bear interest at a fixed rate of 4%.

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