Taubman Centers (TCO) 8-K Results of Operations and Financial Condition

Taubman Centers, Inc.

200 East Long Lake Road

Bloomfield Hills, MI 48304

(248) 258-6800

CONTACT:	Barbara Baker
	(248) 258-7367
	www.taubman.com

FOR IMMEDIATE RELEASE

TAUBMAN CENTERS REPORTS SOLID SECOND QUARTER RESULTS EXCEEDING CONSENSUS

o FFO per share up 6.5%

o Sales psf increases 6.3%

o Occupancy increases 2.2%

        BLOOMFIELD HILLS, Mich., July 21, 2005 - Taubman Centers, Inc. (NYSE:TCO) today announced its financial results for the second quarter 2005.

        Net income (loss) allocable to common shareholders per diluted share (EPS) was $(0.09) for the quarter ended June 30, 2005, versus $(0.08) for the quarter ended June 30, 2004. EPS for the six months ended June 30, 2005 was $(0.04) per diluted common share, versus $0.00 per diluted common share for the first six months of 2004.

        For the quarter ended June 30, 2005, Funds from Operations (FFO) per diluted share was $0.49, up 6.5 percent from $0.46 per share for the quarter ended June 30, 2004. For the six months ended June 30, 2005 FFO per diluted share was $1.05, up 6.1 percent from $0.99 for the first six months of 2004.

        “These results were driven by strong rents and recoveries at our centers,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “The retail real estate environment continues to be very positive and our centers are clearly benefiting.”

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Strong Tenant Sales, Occupancy

        Mall tenant sales per square foot increased 6.3 percent for the quarter and 7.0 percent for the six month period ended June 30. “Our growth continues to be driven by strong sales at our Florida properties and at Willow Bend,” said Mr. Taubman. “Our strongest categories of merchandising have been women’s accessories, electronics, food and unisex apparel.”

        Leased space at June 30 was 90.9 percent, up 1.5 percent from June 30, 2004. Total occupancy for the portfolio was 88.7 percent at June 30, up 2.2 percent from June 30, 2004. Including temporary tenants, occupancy was 91.1 percent at June 30, up 2.6 percent from 88.5 percent on June 30, 2004.

        Average rent per square foot was $41.72 for the quarter in the consolidated portfolio, up 3.0 percent from the second quarter of 2004. Average rent for the quarter in the unconsolidated joint ventures was $42.52, similar to the second quarter of 2004.

        “We have now experienced strong sales momentum at our centers for over two years,” said Mr. Taubman. “This is resulting in solid occupancy increases across our portfolio as retailers continue to be optimistic about their future prospects.”

Financings

        In June the company entered into an agreement to issue $87 million of 7.625 percent Series H Cumulative Redeemable Preferred Stock. The shares were issued on July 1, 2005 and trade on the New York Stock Exchange under the symbol TCO Pr H. Proceeds were used to redeem $87 million of the company’s 8.3 percent Series A Cumulative Redeemable Preferred Stock (NYSE: TCO Pr A). As a result the company will record in the third quarter a $3.1 million charge representing original issuance costs of the Series A preferred shares.

        In May the company completed a $200 million 10-year non-recourse financing with an all-in rate of 5.49 percent on The Mall at Wellington Green(Wellington, Fla.). Proceeds were used to pay off the existing $140 million loan and to pay down the company’s line of credit.

        “We have taken advantage of a very favorable rate environment to reduce both our long-term financing costs and our exposure to floating interest rates,” said Lisa A. Payne, Taubman Centers vice chairman and chief financial officer. “As of June 30, our share of floating rate debt represents 9.2 percent of our total market capitalization and our interest coverage is 2.4 times.”

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Strong Development Pipeline

        The company’s announced development activities are continuing on track. “We have several exciting projects under construction and a strong development pipeline. We also have other projects that are in the early stages and not yet announced. We are very confident that we will be able to sustain our development goal of profitably investing at least $100-$150 million on average annually over the foreseeable future,” said Mr. Taubman. The company’s current projects follow:

Project	Description	Status*	Anticipated Opening Date
Northlake Mall	Traditional Regional Mall	Under Construction	September 15, 2005
(Charlotte, NC)
The Mall at Wellington Green	New City Furniture Store	Under Construction	October 2005
(Wellington, Fla.)
Waterside Shops at Pelican Bay	Expansion, including new Nordstrom	Under Construction	November 2005
(Naples, Fla.)			(Nordstrom in Fall 2007
			or Spring 2008)
Woodland	New Cinemark theatre, restaurants	Under Construction	Fall 2005
(Grand Rapids, Mich.)
The Pier at Caesars	Casino-Related Retail	Under Construction	Early 2006
(Atlantic City, NJ)
Cherry Creek Shopping Center	New Nordstrom	Pre-development	Fall 2006
(Denver, Col.)
Dolphin Mall	New Bass Pro Store	Pre-development	Late 2006
(Miami, Fla.)
Partridge Creek Fashion Park	Fashion Park Development	Pre-development	2007
(Clinton Twp., Mich.)
The Mall at Oyster Bay	Traditional Regional Mall	Pre-development	2007
(Town of Oyster Bay, N.Y.)
Twelve Oaks Mall	Expansion, including new Nordstrom	Pre-development	Fall 2007
(Novi, Mich.)
Stamford Town Center	Expansion	Pre-development	TBD
(Stamford, Conn.)
The Shops at City Square	Traditional Regional Mall	Pre-development	TBD
(Salt Lake City, Utah)	- part of mixed use project
New Songdo City retail	Retail Component of project	Letter of Interest	TBD
(New Songdo City, Korea)

        *For more information about the status and ownership structure of these projects, see the company's SEC filings

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Financial Outlook

        The company is adjusting its previous FFO per share guidance of $2.10 to $2.15 for the $0.04 anticipated third quarter financing-related accounting charge relating to the original issuance costs of the redeemed Series A preferred shares. The new range is $2.06 to $2.11 per share.

        Net Income (loss) allocable to common shareholders for the year is expected to be in the range of $(0.15) to $0.05 per share.

Supplemental Investor Information Available

        The company provides supplemental investor information along with its earnings announcements, available online atwww.taubman.comunder “Investor Relations.” This includes the following:

o Income Statements

o Earnings Reconciliations

o Changes in Funds from Operations and Earnings Per Share

o Components of Other Income

o Balance Sheets

o Debt Summary

o Other Debt and Equity Information

o Construction and Center Openings

o Capital Spending

o Acquisitions

o Operational Statistics

o Owned Centers

o Major Tenants in Owned Portfolio

o Anchors in Owned Portfolio

Investor Conference Call

        The company will host a conference call on July 22 at 10:00 a.m. (EDT) to discuss these results and will simulcast the conference call atwww.taubman.comunder “Investor Relations” as well aswww.fulldisclosure.comandwww.streetevents.com. The online replay will follow shortly after the call and continue for approximately 90 days.

        Taubman Centers, Inc., a real estate investment trust, owns and/or manages 22 urban and suburban regional and super regional shopping centers in 10 states. In addition, two centers are under construction. Northlake Mall is scheduled to open September 15, 2005 and The Pier at Caesars is scheduled to open in early 2006. Taubman Centers is headquartered in Bloomfield Hills, Mich.

        This press release contains forward-looking statements within the meaning of the Securities Act of 1933 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 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.

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Taubman Centers/5

TAUBMAN CENTERS, INC.
Table 1 — Summary of Results
For the Three and Six Months Ended June 30, 2005 and 2004

(in thousands of dollars, except as indicated)

	Three Months Ended June 30				Six Months Ended June 30
	2005		2004		2005		2004
Income before discontinued operations and minority and preferred interests	11,227		11,432		29,443		30,634
Minority interest in consolidated joint ventures	(10	)	(7	)	(16	)	(185	)
Minority share of income of TRG(1)	(2,364	)	(2,664	)	(7,529	)	(8,283	)
Distributions in excess of earnings allocable to minority partners(1)	(6,602	)	(6,192	)	(10,612	)	(9,416	)
TRG preferred distributions	(615	)	(2,489	)	(1,230	)	(4,739	)
Net income	1,636		233		10,056		8,164
Preferred dividends	(6,150	)	(4,150	)	(12,300	)	(8,300	)
Net income (loss) allocable to common shareowners	(4,514	)	(3,917	)	(2,244	)	(136	)
Net income per common share - basic and diluted	(0.09	)	(0.08	)	(0.04	)	(0.00	)
Beneficial interest in EBITDA - consolidated businesses(2)	56,170		50,055		116,816		105,899
Beneficial interest in EBITDA - unconsolidated joint ventures(2)	25,989		27,916		52,324		56,641
Funds from Operations - Operating Partnership(2)	40,473		37,634		86,490		82,299
Funds from Operations allocable to TCO(2)	25,220		22,803		53,411		50,093
Funds from Operations per common share - basic(2)	0.50		0.46		1.07		1.01
Funds from Operations per common share - diluted(2)	0.49		0.46		1.05		0.99
Weighted average number of common shares outstanding	50,520,169		49,089,844		50,084,438		49,643,212
Common shares outstanding at end of period	50,697,418		48,008,562
Weighted average units - Operating Partnership - basic	81,074,086		81,018,609		81,054,654		81,584,703
Weighted average units - Operating Partnership - diluted	81,956,693		82,412,523		82,005,515		83,050,050
Units outstanding at end of period - Operating Partnership	81,074,098		79,980,841
Ownership percentage of the Operating Partnership at end of period	62.5	%	60.1	%
Number of owned shopping centers at end of period	21		21		21		21
Operating Statistics:
Mall tenant sales	913,408		833,223		1,799,299		1,630,091
Ending occupancy(3)	88.7	%	86.5	%	88.7	%	86.5	%
Average occupancy(3)	88.5	%	86.3	%	88.5	%	86.4	%
Leased space at end of period(3)(4)	90.9	%	89.4	%	90.9	%	89.4	%
Mall tenant occupancy costs as a percentage of tenant sales-consolidated businesses(5)(6)	15.9	%	16.9	%	15.9	%	17.1	%
Mall tenant occupancy costs as a percentage of tenant sales-unconsolidated joint ventures(5)(6)	14.3	%	15.1	%	14.4	%	15.7	%
Rent per square foot - consolidated businesses(6)	41.72		40.52		41.60		40.56
Rent per square foot - unconsolidated joint ventures(6)	42.52		42.48		42.54		42.56

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(1) Because the Operating Partnership’s balance of net equity allocable to partnership unitholders is less than zero, the income allocated to minority partners during the three and six months ended June 30, 2005 and 2004 is equal to the minority partners’ share of distributions. The Company’s net equity allocable to partnership unitholders 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 and depreciation and amortization, excluding gains on sales of depreciated operating properties 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. In addition, the Company uses a comparable measure to EBITDA, net operating income (revenues less operating expenses, excluding depreciation and amortization, “NOI”), as an alternative measure to evaluate the operating performance of centers, both on an individual and stabilized portfolio basis.

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. FFO as presented by the Company is not necessarily comparable to the FFO of other REITs due to the fact that not all REITs use the NAREIT definition. FFO should not be considered an alternative to net income as an indicator of the Company’s operating performance. Additionally, FFO does not represent cash flows from operating, investing or financing activities as defined by GAAP.

Prior to the fourth quarter of 2004, the Company did not include an add-back for depreciation of center replacement assets when computing its Beneficial Interest in EBITDA or FFO. As of the fourth quarter of 2004, the Company began to include such an add-back and restated previously reported EBITDA and FFO amounts.

(3) 2004 statistics have been restated to include anchor spaces at value centers (Arizona Mills, Dolphin Mall, and Great Lakes Crossing).

(4) Leased space comprises both occupied space and space that is leased but not yet occupied.

(5) Mall tenant occupancy costs are defined as the sum of minimum rents, percentage rents and expense recoveries, excluding utilities.

(6) The results of International Plaza are presented within the Consolidated Businesses for periods beginning July 1, 2004, as a result of the Company’s acquisition of a controlling interest in the center. Results of International Plaza prior to the acquisition date are included within the Unconsolidated Joint Ventures.

Taubman Centers/7

TAUBMAN CENTERS, INC.
Table 2 — Income Statement
For the Quarters Ended June 30, 2005 and 2004

(in thousands of dollars)

	2005				2004
	CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES(1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES(1)
REVENUES:
Minimum rents	63,300		46,024		54,009		50,274
Percentage rents	721		343		70		400
Expense recoveries	38,658		22,427		32,990		26,470
Management, leasing and development services	3,334				5,245
Other	11,576		1,948		6,623		2,479
Total revenues	117,589		70,742		98,937		79,623
OPERATING EXPENSES:
Recoverable expenses(2)	35,491		19,251		30,673		22,713
Other operating	13,600		5,380		8,683		5,087
Costs related to unsolicited tender offer, net of recoveries					(44	)
Management, leasing and development services	2,125				4,985
General and administrative	7,786				5,322
Interest expense	26,492		16,742		23,153		19,405
Depreciation and amortization	30,240		10,765		23,512		14,999
Total operating expenses	115,734		52,138		96,284		62,204
	1,855		18,604		2,653		17,419
Equity in income of Unconsolidated Joint Ventures	9,372				8,779
Income before discontinued operations and minority
and preferred interests	11,227				11,432
Discontinued operations(3)-
Net gain on disposition of interest in center					153
Minority and preferred interests:
TRG preferred distributions	(615	)			(2,489	)
Minority share of consolidated joint ventures	(10	)			(7	)
Minority share of income of TRG	(2,364	)			(2,664	)
Distributions in excess of minority share of income	(6,602	)			(6,192	)
Net income	1,636				233
Preferred dividends	(6,150	)			(4,150	)
Net income (loss) allocable to common shareowners	(4,514	)			(3,917	)
SUPPLEMENTAL INFORMATION(4):
EBITDA - 100%	60,070		47,090		50,357		53,122
EBITDA - outside partners' share	(3,900	)	(21,101	)	(302	)	(25,206	)
Beneficial interest in EBITDA	56,170		25,989		50,055		27,916
Beneficial interest expense	(25,108	)	(9,318	)	(22,904	)	(10,187	)
Non-real estate depreciation	(495	)			(607	)
Preferred dividends and distributions	(6,765	)			(6,639	)
Funds from Operations contribution	23,802		16,671		19,905		17,729
Net straightline adjustments to rental revenue and
ground rent expense at TRG %	307		206		215		101

(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. The results of International Plaza are presented within the Consolidated Businesses for periods beginning July 1, 2004, as a result of the Company’s acquisition of a controlling interest in the center. Results of International Plaza prior to the acquisition date are included within the Unconsolidated Joint Ventures.

(2) Included in recoverable expenses of the Consolidated Businesses and Unconsolidated Joint Ventures (both at 100%) are $1.5 million and $1.0 million, respectively, of depreciation of center replacement assets for the three months ended June 30, 2005, and $1.0 million and $1.3 million, respectively, for the three months ended June 30, 2004.

(3) During the three months ended June 30, 2004, a $0.2 million adjustment to the gain on disposition of Biltmore Fashion Park was recognized.

(4) EBITDA and FFO for the three months ended June 30, 2004 have been restated from amounts previously reported to include an add-back of depreciation of center replacement assets recoverable from tenants.

Taubman Centers/8

TAUBMAN CENTERS, INC.
Table 3 — Income Statement
For the Year to Date Periods Ended June 30, 2005 and 2004

(in thousands of dollars)

	2005				2004
	CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES(1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES(1)
REVENUES:
Minimum rents	126,378		91,265		107,646		100,766
Percentage rents	2,417		1,662		1,103		2,284
Expense recoveries	73,295		43,585		63,990		52,386
Management, leasing and development services	5,534				10,229
Other	21,804		5,099		17,301		4,219
Total revenues	229,428		141,611		200,269		159,655
OPERATING EXPENSES:
Recoverable expenses(2)	67,188		36,754		58,459		44,102
Other operating	24,102		11,340		16,835		10,421
Costs related to unsolicited tender offer, net of recoveries					(1,044	)
Management, leasing and development services	3,320				9,781
General and administrative	13,745				11,780
Interest expense	52,032		33,517		45,725		39,586
Depreciation and amortization	58,040		22,875		46,471		28,518
Total operating expenses	218,427		104,486		188,007		122,627
	11,001		37,125		12,262		37,028
Equity in income of Unconsolidated Joint Ventures	18,442				18,372
Income before discontinued operations and minority
and preferred interests	29,443				30,634
Discontinued operations(3)-
Net gain on disposition of interest in center					153
Minority and preferred interests:
TRG preferred distributions	(1,230	)			(4,739	)
Minority share of consolidated joint ventures	(16	)			(185	)
Minority share of income of TRG	(7,529	)			(8,283	)
Distributions in excess of minority share of income	(10,612	)			(9,416	)
Net income	10,056				8,164
Preferred dividends	(12,300	)			(8,300	)
Net income (loss) allocable to common shareowners	(2,244	)			(136	)
SUPPLEMENTAL INFORMATION(4):
EBITDA - 100%	124,027		95,330		106,523		108,052
EBITDA - outside partners' share	(7,211	)	(43,006	)	(624	)	(51,411	)
Beneficial interest in EBITDA	116,816		52,324		105,899		56,641
Beneficial interest expense	(49,382	)	(18,647	)	(45,212	)	(20,761	)
Non-real estate depreciation	(1,091	)			(1,229	)
Preferred dividends and distributions	(13,530	)			(13,039	)
Funds from Operations contribution	52,813		33,677		46,419		35,880
Net straightline adjustments to rental revenue and
ground rent expense at TRG %	796		124		596		188

(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. The results of International Plaza are presented within the Consolidated Businesses for periods beginning July 1, 2004, as a result of the Company’s acquisition of a controlling interest in the center. Results of International Plaza prior to the acquisition date are included within the Unconsolidated Joint Ventures.

(2) Included in recoverable expenses of the Consolidated Businesses and Unconsolidated Joint Ventures (both at 100%) are $3.0 million and $1.8 million, respectively, of depreciation of center replacement assets for the six months ended June 30, 2005, and $2.1 million and $2.9 million, respectively, for the six months ended June 30, 2004.

(3) During the six months ended June 30, 2004, a $0.2 million adjustment to the gain on disposition of Biltmore Fashion Park was recognized.

(4) EBITDA and FFO for the six months ended June 30, 2004 have been restated from amounts previously reported to include an add-back of depreciation of center replacement assets recoverable from tenants.

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TAUBMAN CENTERS, INC.
Table 4 — Reconciliation of Net Income (Loss) to Funds from Operations
For the Periods Ended June 30, 2005 and 2004

(in thousands of dollars)

	Three Months Ended				Year to Date
	2005		2004		2005		2004
Net income (loss) allocable to common shareowners	(4,514	)	(3,917	)	(2,244	)	(136	)
Add (less) depreciation and gain on disposition of property:
Gain on disposition of interest in center			(153	)			(153	)
Depreciation and amortization(1):
Consolidated businesses at 100%	31,723		24,551		60,994		48,536
Minority partners in consolidated joint ventures	(2,506	)	(46	)	(4,545	)	74
Share of unconsolidated joint ventures	7,299		8,950		15,235		17,508
Non-real estate depreciation	(495	)	(607	)	(1,091	)	(1,229	)
Add minority interests in TRG:
Minority share of income of TRG	2,364		2,664		7,529		8,283
Distributions in excess of minority share of income of TRG	6,602		6,192		10,612		9,416
Funds from Operations - TRG	40,473		37,634		86,490		82,299
Funds from Operations - TCO(2)	25,220		22,803		53,411		50,093

(1) Depreciation and amortization includes depreciation of center replacement assets recoverable from tenants, classified as recoverable expenses in the Company’s financial statements. TRG’s beneficial interest in these amounts are $1.9 million and $1.7 million for the three months ended June 30, 2005 and 2004, respectively, and $3.7 million and $3.6 million for the six months ended June 30, 2005 and 2004, respectively. 2004 amounts have been restated to include such depreciation.

(2) TCO ’s share of TRG’s FFO is based on an average ownership of 62% and 61% during the three months ended June 30, 2005 and 2004, respectively, and 62% and 61% during the six months ended June 30, 2005 and 2004, respectively.

Taubman Centers/10

TAUBMAN CENTERS, INC.
Table 5 — Reconciliation of Net Income (Loss) to Beneficial Interest in EBITDA
For the Periods Ended June 30, 2005 and 2004

(in thousands of dollars)

	Three Months Ended				Year to Date
	2005		2004		2005		2004
Net income (loss) allocable to common shareowners	(4,514	)	(3,917	)	(2,244	)	(136	)
Add (less) depreciation and gain on disposition of property:
Gain on disposition of interest in center			(153	)			(153	)
Depreciation and amortization(1):
Consolidated businesses at 100%	31,723		24,551		60,994		48,536
Minority partners in consolidated joint ventures	(2,506	)	(46	)	(4,545	)	74
Share of unconsolidated joint ventures	7,299		8,950		15,235		17,508
Add minority interests in TRG:
Minority share of income of TRG	2,364		2,664		7,529		8,283
Distributions in excess of minority share of income of TRG	6,602		6,192		10,612		9,416
Add (less) preferred interests and interest expense:
Preferred dividends and distributions	6,765		6,639		13,530		13,039
Interest expense for all businesses in continuing operations	43,234		42,558		85,549		85,311
Interest expense allocable to minority partners in consolidated joint ventures	(1,384	)	(249	)	(2,650	)	(513	)
Interest expense allocable to outside partners in unconsolidated joint ventures	(7,424	)	(9,218	)	(14,870	)	(18,825	)
Beneficial Interest in EBITDA - TRG	82,159		77,971		169,140		162,540

(1) Depreciation and amortization includes depreciation of center replacement assets recoverable from tenants, classified as recoverable expenses in the Company’s financial statements. 2004 amounts have been restated to include such depreciation.

Taubman Centers/11

TAUBMAN CENTERS, INC.
Table 6 — Balance Sheets
As of June 30, 2005 and December 31, 2004

(in thousands of dollars)

	As of
	June 30, 2005		December 31, 2004
Consolidated Balance Sheet of Taubman Centers, Inc.(1):
Assets:
Properties	2,980,583		2,936,964
Accumulated depreciation and amortization	(603,932	)	(558,891	)
	2,376,651		2,378,073
Investment in Unconsolidated Joint Ventures	134,878		129,934
Cash and cash equivalents	37,045		29,081
Accounts and notes receivable, net	32,307		32,124
Accounts and notes receivable from related parties	1,858		1,636
Deferred charges and other assets	60,222		61,586
	2,642,961		2,632,434
Liabilities:
Notes payable	1,979,072		1,930,439
Accounts payable and accrued liabilities	212,079		223,331
Dividends and distributions payable	14,487		13,892
Distributions in excess of investments in and net income of
Unconsolidated Joint Ventures	99,879		106,367
	2,305,517		2,274,029
Preferred Equity of TRG	29,217		29,217
Shareowners' Equity:
Series A Cumulative Redeemable Preferred Stock	80		80
Series B Non-Participating Convertible Preferred Stock	30		30
Series G Cumulative Redeemable Preferred Stock
Common Stock	507		487
Additional paid-in capital	737,826		729,481
Accumulated other comprehensive income (loss)	(9,893	)	(11,387	)
Dividends in excess of net income	(420,323	)	(389,503	)
	308,227		329,188
	2,642,961		2,632,434
Combined Balance Sheet of Unconsolidated Joint Ventures(2):
Assets:
Properties	1,109,625		1,080,482
Accumulated depreciation and amortization	(376,232	)	(360,830	)
	733,393		719,652
Cash and cash equivalents	24,252		25,173
Accounts and notes receivable	15,942		22,866
Deferred charges and other assets	26,453		26,213
	800,040		793,904
Liabilities:
Notes payable	1,003,509		1,008,604
Accounts payable and other liabilities	54,765		53,706
	1,058,274		1,062,310
Accumulated Deficiency in Assets:
Accumulated deficiency in assets - TRG	(163,033	)	(173,579	)
Accumulated deficiency in assets - Joint Venture Partners	(91,871	)	(91,259	)
Accumulated other comprehensive income (loss) - TRG	(2,629	)	(2,817	)
Accumulated other comprehensive income (loss) - Joint Venture Partners	(701	)	(751	)
	(258,234	)	(268,406	)
	800,040		793,904

(1) Certain reclassifications have been made to prior year information to conform to current year classifications.

(2) Amounts exclude The Pier at Caesars, a center under construction, which TRG made a $4 million contribution to in January 2005.

Taubman Centers/12

TAUBMAN CENTERS, INC.
Table 7 — 2005 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, 2005 Before Redemption Charge				Redemption Charge(1)		Range for Year Ended December 31, 2005
Funds from Operations
per common share	2.10		2.15		(0.04	)	2.06		2.11
Real estate depreciation - TRG	(1.62	)	(1.54	)			(1.62	)	(1.54	)
Depreciation of TCO's additional basis
in TRG	(0.15	)	(0.15	)			(0.15	)	(0.15	)
Distributions in excess of earnings allocable
to minority interest	(0.43	)	(0.35	)	(0.02	)	(0.45	)	(0.37	)
Net income (loss) allocable
to common shareholders, per common share	(0.09	)	0.11		(0.06	)	(0.15	)	0.05

(1) During July 2005, the Company redeemed 3.48 million shares of Series A preferred stock with the proceeds of the issuance of Series H preferred stock. Emerging Issues Task Force Topic D-42, "The Effect on the Calculation of Earnings Per Share for the Redemption or Induced Conversion of Preferred Stock," provides that any excess of the fair value of the consideration transferred to the holders of preferred stock redeemed over the carrying amount of the preferred stock should be subtracted from net earnings to determine net earnings available to common stockholders. As a result of application of Topic D-42, estimated 2005 Funds from Operations and net income (loss) allocable to common shareholders will be reduced by $3.1 million, representing the difference between the carrying value and the redemption price of the shares of Series A preferred stock redeemed.