Taubman Centers (TCO) 8-K Taubman Centers Announces Strong Third Quarter Results

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 ANNOUNCES STRONG THIRD QUARTER RESULTS

• Net Operating Income (NOI) Excluding Lease Cancellation Income Up 7.4%

• Three New U.S. Shopping Centers Under Construction

• First Asia Projects Underway

• 2012 Guidance Increased on Strong NOI and Operating Results

BLOOMFIELD HILLS, Mich., Oct. 24, 2012 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2012.

“We attribute our strong performance to increased rents, recoveries, and occupancy in our centers,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “Core growth is outstanding. In addition, this quarter we benefitted from a third party leasing success fee and continued solid performance from our newest center, City Creek Center (Salt Lake City, Utah). We're delivering tremendous results.”

		September 30, 2012 Three Months Ended	September 30, 2011 Three Months Ended	September 30, 2012 Six Months Ended	September 30, 2011 Six Months Ended
Net income allocable to common shareholders per diluted share (EPS)		$0.35	$0.14	$0.92	$0.48
Funds from Operations (FFO) per diluted share Growth rate		$0.79 25.4%	$0.63	$2.26 20.2%	$1.88
Adjusted Funds from Operations (Adjusted FFO) per diluted share(1) Growth rate		$0.86 32.3%	$0.65	$2.33 22.6%	$1.90
Adjusted FFO per diluted share (excluding The Pier Shops and Regency Square)(1) Growth rate		$0.86 17.8%	$0.73	$2.33 12.0%	$2.08
(1)	Adjusted FFO for the three and nine months ended September 30, 2012 excludes charges related to the redemption of the Series G and H Preferred Stock. Adjusted FFO for the three and nine months ended September 30, 2011 excludes costs related to the acquisitions of The Mall at Green Hills (Nashville, Tenn.), The Gardens on El Paseo/El Paseo Village (Palm Desert, Calif.), and Taubman TCBL (Beijing, China).

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Sales, Leased Space, Occupancy, Rent, and NOI Up

The company's 12-month trailing mall tenant sales per square foot reached $681, another record for the company and up 10.7 percent from September 30, 2011. Mall tenant sales per square foot increased 6.2 percent for the three months ended September 30, 2012 and 9.3 percent for the nine months ended September 30, 2012.

Leased space in comparable centers for Taubman's portfolio was 92.4 percent on September 30, 2012, up 1 percent from 91.4 percent on September 30, 2011. Ending occupancy in comparable centers was 90.4 percent on September 30, 2012, up 1.9 percent from 88.5 percent on September 30, 2011.

Average rent per square foot for the third quarter of 2012 was $46.85, up 3.5 percent from $45.28 in the third quarter of 2011. For the nine months ended September 30, 2012, average rent per square foot was $46.57, up from $45.29 for the nine months ended September 30, 2011.

NOI excluding lease cancellation income was up 7.4 percent for the three months ended September 30, 2012, bringing 2012 year-to-date growth to 8.3 percent.

External Growth Update

The company continues to make significant progress on its multi-pronged growth strategy, including the following:

• Outlet Center Development

In July, Taubman held an official groundbreaking on Taubman Prestige Outlets Chesterfield (Chesterfield, Mo.). The company announced in September that construction is being accelerated to meet Missouri's 2013 tax-free back-to-school holiday weekend by opening on Friday, August 2, 2013. Site improvements began in April and building walls have been raised throughout the site. Leasing continues to make good progress.

• Asia Development

In August, the company concluded due diligence and made an additional investment in a joint venture with Shinsegae Group, South Korea's largest retailer. The joint venture will build, lease, and manage a western-style 1.7 million square foot shopping mall in Hanam, Gyeonggi Province, South Korea, an eastern suburb of Seoul. This world class project will be the largest center in Korea. Taubman's total investment including capitalized interest is expected to be about $330 million, representing a 30% interest in the center, which is expected to cost about $1 billion. The center will be anchored by a 525,000 square foot Shinsegae department store and will feature a luxury wing and in-line stores that will be dominated by international flagships, many of which will be the largest in Korea. Hanam Union Square is expected to open in 2015.

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Also in August, Taubman Asia announced its first retail development in China, a joint venture with Beijing Wangfujing Department Store (Group) Co., Ltd (Wangfujing). The joint venture will own a controlling interest in and will lease and manage a shopping center to be located at Xi'an Saigao City Plaza, a large-scale mixed-use development in Xi'an, China. The remaining ownership of the shopping center will be held by Shaanxi Fuli Real Estate Development Co. Ltd, that is constructing the broader project. Anchored by a Wangfujing department store, the seven-level Xi'an shopping center will be part of a 5.9 million square feet (gross building area) mixed-use project and is expected to feature a cinema, restaurants, and approximately 300 international and local specialty stores. The center is scheduled to open in the third quarter of 2015.

• U.S. Traditional Center Development

In September, the company broke ground on The Mall of San Juan (San Juan, Puerto Rico). Taubman will develop, lease and manage the 650,000 square-foot two-level upscale shopping center that will feature the first Saks Fifth Avenue and Nordstrom in the Caribbean and approximately 100 stores and restaurants. The Mall of San Juan is anticipated to open in late 2014.

On October 15, Taubman held an official groundbreaking on The Mall at University Town Center (Sarasota, Fla.) and announced the center will open on October 16, 2014. The shopping center will be a state-of-the-art, two-level, enclosed mall, anchored by Saks Fifth Avenue, Dillard's, and Macy's, and will include more than 100 specialty stores and restaurants.

Balance Sheet Strengthened

In August, Taubman Centers issued 2,875,000 common shares, including the exercise of the underwriter's option, in an underwritten public offering. The net proceeds of $209 million were used to reduce outstanding borrowings under the company's $715 million revolving lines of credit. This was just the third secondary common equity raise for the company since its initial public offering in November 1992.

In August, the company issued $192.5 million of perpetual 6.5% Series J Cumulative Redeemable Preferred Stock (NYSE: TCO PR J) at a price of $25.00 per share. Proceeds were used to redeem the company's $100 million 8% Series G Cumulative Redeemable Preferred Stock (NYSE: TCO PR G) and its $87 million 7.625% Series H Cumulative Redeemable Preferred Stock (NYSE: TCO PR H). Upon redemption, the company recognized a $6.4 million charge representing the difference between the face value and the book value of the preferred stock redeemed.

Also in August, the company completed a $190 million, 10-year, non-recourse financing on its 50 percent owned Sunvalley (Concord, Calif.) shopping center. The loan bears interest at an all-in fixed rate of 4.47%. The new loan replaces an amortizing loan with a rate of 5.67% and a balance of $115 million at the time of refinancing.

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As a result of these transactions, on September 30, 2012, the company's ratio of debt to total market capitalization was 30.5%, an all-time low for the company.

In early October, the refinancing of The Mall at Millenia (Orlando, Fla.) was completed. The new$350 million, 12-year, non-recourse financing bears interest at an all-in fixed rate of 4.05%. This replaces an amortizing loan with a rate of 5.46% and a balance of $197 million at the time of refinancing.

2012 Guidance Increased on Strong NOI

The company is increasing its guidance on 2012 FFO per diluted share to $3.18 to $3.23 and 2012 Adjusted FFO per diluted share to the range of $3.27 to $3.32. 2012 Adjusted FFO guidance excludes charges related to the redemption of preferred stock and the 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 $1.30 to $1.37 per diluted share. This guidance now assumes comparable center NOI growth, excluding lease cancellation income, of about 6 percent for the year, up from a range of 5 to 6 percent previously.

The company's previous guidance on 2012 FFO per diluted share was a range of $3.13 to $3.18, its previous guidance on 2012 Adjusted FFO per diluted share was a range of $3.22 to $3.27, and its previous guidance on 2012 EPS was a range of $1.20 to $1.30 per diluted share.

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

• 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

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Investor Conference Call

The company will host a conference call at 10:00 AM Eastern Daylight Time on Thursday, October 25 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 an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 28 regional, super regional and outlet shopping centers in the U.S. and Asia.  Taubman is currently developing Taubman Prestige Outlets Chesterfield in Chesterfield, Missouri; The Mall at University Town Center in Sarasota, Florida; The Mall of San Juan in San Juan, Puerto Rico; andshopping malls in Xi'an, China and Hanam, South Korea.  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, fluctuations of foreign currency, 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 September 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	45,061		33,549		108,686		90,977
Income (loss) from discontinued operations			(11,681)				(24,375)
Net income	45,061		21,868		108,686		66,602
Noncontrolling share of income of consolidated joint ventures	(2,079)		(4,327)		(6,788)		(10,497)
Noncontrolling share of income of TRG - continuing operations	(10,216)		(7,964)		(27,105)		(22,113)
Noncontrolling share of loss of TRG - discontinued operations			3,539				7,493
TRG series F preferred distributions			(615)				(1,845)
Preferred stock dividends	(10,663)		(3,658)		(17,980)		(10,975)
Distributions to participating securities of TRG	(403)		(382)		(1,209)		(1,144)
Net income attributable to Taubman Centers, Inc. common shareowners	21,700		8,461		55,604		27,521
Net income per common share - basic	0.36		0.15		0.94		0.49
Net income per common share - diluted	0.35		0.14		0.92		0.48
Beneficial interest in EBITDA - Combined (1)	121,969		100,979		342,106		295,190
Adjusted Beneficial interest in EBITDA - Combined (1)	121,969		102,660		342,106		296,871
Funds from Operations (1)	70,477		54,126		199,149		158,081
Funds from Operations attributable to TCO (1)	49,071		37,729		137,676		109,292
Funds from Operations per common share - basic (1)	0.81		0.65		2.33		1.93
Funds from Operations per common share - diluted (1)	0.79		0.63		2.26		1.88
Adjusted Funds from Operations (1)	76,889		55,807		205,561		159,762
Adjusted Funds from Operations attributable to TCO (1)	53,535		38,901		142,108		110,464
Adjusted Funds from Operations per common share - basic (1)	0.88		0.67		2.40		1.95
Adjusted Funds from Operations per common share - diluted (1)	0.86		0.65		2.33		1.90
Weighted average number of common shares outstanding - basic	60,571,612		57,890,006		59,207,828		56,554,268
Weighted average number of common shares outstanding - diluted	62,025,322		59,635,557		60,716,518		58,137,149
Common shares outstanding at end of period	61,698,618		57,891,337
Weighted average units - Operating Partnership - basic	86,994,524		83,048,892		85,655,085		81,797,910
Weighted average units - Operating Partnership - diluted	89,319,495		85,665,704		88,035,037		84,252,063
Units outstanding at end of period - Operating Partnership	88,120,226		83,050,223
Ownership percentage of the Operating Partnership at end of period	70.0	%	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)	7.4	%			8.3	%
Mall tenant sales - all centers (4)	1,378,384		1,197,351		4,128,642		3,494,538
Mall tenant sales - comparable (3)(4)	1,289,569		1,197,351		3,845,903		3,494,538
Ending occupancy - all centers	90.4	%	88.5	%	90.4	%	88.5	%
Ending occupancy - comparable (3)	90.4	%	88.5	%	90.4	%	88.5	%
Average occupancy - all centers	90.1	%	88.6	%	89.9	%	88.4	%
Average occupancy - comparable (3)	90.2	%	88.6	%	89.9	%	88.4	%
Leased space - all centers	92.6	%	91.4	%	92.6	%	91.4	%
Leased space - comparable (3)	92.4	%	91.4	%	92.4	%	91.4	%
All centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (4)	14.0	%	14.1	%	13.4	%	14.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (4)	13.5	%	13.0	%	12.8	%	12.9	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (4)	13.9	%	13.7	%	13.2	%	13.8	%
Comparable centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (3)(4)	14.1	%	14.1	%	13.7	%	14.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (4)	13.5	%	13.0	%	12.8	%	12.9	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (3)(4)	13.9	%	13.7	%	13.4	%	13.8	%
Average rent per square foot - Consolidated Businesses (3)	47.43		45.72		47.18		45.48
Average rent per square foot - Unconsolidated Joint Ventures	45.61		44.36		45.27		44.91
Average rent per square foot - Combined (3)	46.85		45.28		46.57		45.29

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(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. The Company believes the disclosure of the adjusted items is similarly useful to investors and others to understand management's view on comparability of such measures between periods. For the three and nine month period ended September 30, 2012, FFO was adjusted for charges related to the redemption of Series G and H Preferred Stock. For the three and nine month period ended September 30, 2011, EBITDA and FFO were adjusted for costs related to the acquisitions of The Mall at Green Hills, The Gardens on El Paseo and El Paseo Village, and Taubman TCBL. 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.

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TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended September 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		99,564		40,016		84,929		38,211
		Percentage rents		6,315		2,366		4,737		1,815
		Expense recoveries		66,633		26,224		57,231		23,387
		Management, leasing, and development services		10,234				5,083
		Other		6,793		1,829		6,575		1,473
			Total revenues	189,539		70,435		158,555		64,886
EXPENSES:
		Maintenance, taxes, utilities, and promotion		53,253		18,588		45,200		16,448
		Other operating		16,128		3,581		15,255		3,697
		Management, leasing, and development services		6,165				2,889
		General and administrative		9,571				7,709
		Acquisition costs						1,681
		Interest expense		34,943		16,617		30,064		15,619
		Depreciation and amortization		36,414		9,095		33,054		9,281
			Total expenses	156,474		47,881		135,852		45,045
Nonoperating income				56		18		96		111
				33,121		22,572		22,799		19,952
Income tax expense				(732	)			(208	)
Equity in income of Unconsolidated Joint Ventures				12,672				10,958
Income from continuing operations				45,061				33,549
Discontinued operations (2):
		EBITDA						34
		Interest expense						(6,354	)
		Depreciation and amortization						(5,361	)
Income (loss) from discontinued operations								(11,681	)
Net income				45,061				21,868
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(2,079	)			(4,327	)
		TRG series F preferred distributions						(615	)
		Noncontrolling share of income of TRG - continuing operations		(10,216	)			(7,964	)
		Noncontrolling share of loss of TRG - discontinued operations						3,539
Distributions to participating securities of TRG				(403	)			(382	)
Preferred stock dividends (3)				(10,663	)			(3,658	)
Net income attributable to Taubman Centers, Inc. common shareowners				21,700				8,461
SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		104,478		48,284		85,951		44,852
		EBITDA - outside partners' share		(9,257	)	(21,536	)	(9,498	)	(20,326	)
		Beneficial interest in EBITDA		95,221		26,748		76,453		24,526
		Beneficial interest expense		(30,718	)	(8,765	)	(33,651	)	(8,082	)
		Beneficial income tax expense		(667	)			(208	)
		Non-real estate depreciation		(679	)			(639	)
		Preferred dividends and distributions		(10,663	)			(4,273	)
		Funds from Operations contribution		52,494		17,983		37,682		16,444
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	1,194		187		329		86
		Purchase accounting adjustments - minimum rents		212
		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.
(3	)	Preferred dividends for the three months ended September 30, 2012 include charges of $3.3 million and $3.1 million incurred in connection with the $100 million redemption of the Series G Preferred Stock and the $87 million redemption of the Series H Preferred Stock, respectively.

Taubman Centers/9

TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Nine Months Ended September 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		292,248		119,213		251,569		115,566
		Percentage rents		12,767		5,797		9,591		4,108
		Expense recoveries		185,325		72,561		162,936		67,583
		Management, leasing, and development services		27,441				15,423
		Other		20,487		4,945		18,077		3,906
			Total revenues	538,268		202,516		457,596		191,163
EXPENSES:
		Maintenance, taxes, utilities, and promotion		143,854		52,202		129,712		48,921
		Other operating		52,360		11,461		48,138		11,093
		Management, leasing, and development services		21,674				7,492
		General and administrative		28,021				22,998
		Acquisition costs						1,681
		Interest expense		109,146		48,107		89,529		45,164
		Depreciation and amortization		109,083		26,690		99,503		27,859
			Total expenses	464,138		138,460		399,053		133,037
Nonoperating income				251		19		857		121
				74,381		64,075		59,400		58,247
Income tax expense				(1,438	)			(413	)
Equity in income of Unconsolidated Joint Ventures				35,743				31,990
Income from continuing operations				108,686				90,977
Discontinued operations (2):
		EBITDA						2,029
		Interest expense						(17,374	)
		Depreciation and amortization						(9,030	)
Income (loss) from discontinued operations								(24,375	)
Net income				108,686				66,602
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(6,788	)			(10,497	)
		TRG series F preferred distributions						(1,845	)
		Noncontrolling share of income of TRG - continuing operations		(27,105	)			(22,113	)
		Noncontrolling share of loss of TRG - discontinued operations						7,493
Distributions to participating securities of TRG				(1,209	)			(1,144	)
Preferred stock dividends (3)				(17,980	)			(10,975	)
Net income attributable to Taubman Centers, Inc. common shareowners				55,604				27,521
SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		292,610		138,872		250,461		131,270
		EBITDA - outside partners' share		(27,117	)	(62,259	)	(27,017	)	(59,524	)
		Beneficial interest in EBITDA		265,493		76,613		223,444		71,746
		Beneficial interest expense		(96,512	)	(25,084	)	(98,494	)	(23,406	)
		Beneficial income tax expense		(1,393	)			(413	)
		Non-real estate depreciation		(1,988	)			(1,976	)
		Preferred dividends and distributions		(17,980	)			(12,820	)
		Funds from Operations contribution		147,620		51,529		109,741		48,340
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	2,544		360		173		142
		Purchase accounting adjustments - minimum rents		610
		Purchase accounting adjustments - interest expense reduction		(2,573	)
(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.
(3	)	Preferred dividends for the nine months ended September 30, 2012 include charges of $3.3 million and $3.1 million incurred in connection with the $100 million redemption of the Series G Preferred Stock and the $87 million redemption of the Series H Preferred Stock, respectively.

Taubman Centers/10

TAUBMAN CENTERS, INC.
Table 4 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
and Adjusted Funds from Operations
For the Three Months Ended September 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		21,700		60,571,612	0.36		8,461		57,890,006	0.15
Add impact of share-based compensation		168		1,453,710			91		1,745,551
Net income attributable to TCO common shareowners - Diluted		21,868		62,025,322	0.35		8,552		59,635,557	0.14
Add depreciation of TCO's additional basis		1,720			0.03		1,720			0.03
Net income attributable to TCO common shareowners,
	excluding step-up depreciation	23,588		62,025,322	0.38		10,272		59,635,557	0.17
Add:
	Noncontrolling share of income of TRG - continuing operations	10,216		26,422,911			7,964		25,158,885
	Noncontrolling share of loss of TRG - discontinued operations						(3,539	)
	Distributions to participating securities	403		871,262			382		871,262
Net income attributable to partnership unitholders
	and participating securities	34,207		89,319,495	0.38		15,079		85,665,704	0.18
Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	36,414			0.41		33,054			0.39
	Consolidated businesses at 100% - discontinued operations						5,361			0.06
	Depreciation of TCO's additional basis	(1,720	)		(0.02	)	(1,720	)		(0.02	)
	Noncontrolling partners in consolidated joint ventures	(2,888	)		(0.03	)	(2,404	)		(0.03	)
	Share of Unconsolidated Joint Ventures	5,311			0.06		5,486			0.06
	Non-real estate depreciation	(679	)		(0.01	)	(639	)		(0.01	)
Less impact of share-based compensation		(168	)		(0.00)		(91	)		(0.00)
Funds from Operations		70,477		89,319,495	0.79		54,126		85,665,704	0.63
TCO's average ownership percentage of TRG		69.6	%				69.7	%
Funds from Operations attributable to TCO		49,071			0.79		37,729			0.63
Funds from Operations		70,477		89,319,495	0.79		54,126		85,665,704	0.63
Charge upon redemption of Series G and H Preferred Stock		6,412			0.07
Acquisition costs							1,681			0.02
Adjusted Funds from Operations		76,889		89,319,495	0.86		55,807		85,665,704	0.65
TCO's average ownership percentage of TRG		69.6	%				69.7	%
Adjusted Funds from Operations attributable to TCO		53,535			0.86		38,901			0.65
Adjusted Funds from Operations							55,807		85,665,704	0.65
The Pier Shops' and Regency Square's negative FFO							6,316			0.07
Adjusted Funds from Operations,
	excluding The Pier Shops and Regency Square						62,123		85,665,704	0.73
TCO's average ownership percentage of TRG							69.7	%
Adjusted Funds from Operations attributable to TCO,
	excluding The Pier Shops and Regency Square						43,303			0.73

Taubman Centers/11

TAUBMAN CENTERS, INC.
Table 5 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
and Adjusted Funds from Operations
For the Nine Months Ended September 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		55,604			59,207,828	0.94		27,521		56,554,268	0.49
Add impact of share-based compensation		470			1,508,690			275		1,582,881
Net income attributable to TCO common shareowners - Diluted		56,074			60,716,518	0.92		27,796		58,137,149	0.48
Add depreciation of TCO's additional basis		5,159				0.08		5,160			0.09
Net income attributable to TCO common shareowners,
	excluding step-up depreciation	61,233			60,716,518	1.01		32,956		58,137,149	0.57
Add:
	Noncontrolling share of income of TRG - continuing operations	27,105			26,447,257			22,113		25,243,652
	Noncontrolling share of loss of TRG - discontinued operations			��				(7,493	)
	Distributions to participating securities	1,209			871,262			1,144		871,262
Net income attributable to partnership unitholders
	and participating securities	89,547			88,035,037	1.02		48,720		84,252,063	0.58
Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	109,083				1.24		99,503			1.18
	Consolidated businesses at 100% - discontinued operations							9,030			0.11
	Depreciation of TCO's additional basis	(5,159	)			(0.06	)	(5,160	)		(0.06	)
	Noncontrolling partners in consolidated joint ventures	(7,650	)			(0.09	)	(8,111	)		(0.10	)
	Share of Unconsolidated Joint Ventures	15,786				0.18		16,350			0.19
	Non-real estate depreciation	(1,988	)			(0.02	)	(1,976	)		(0.02	)
Less impact of share-based compensation		(470	)			(0.01	)	(275	)		(0.00)
Funds from Operations		199,149			88,035,037	2.26		158,081		84,252,063	1.88
TCO's average ownership percentage of TRG		69.1	%					69.1	%
Funds from Operations attributable to TCO		137,676				2.26		109,292			1.88
Funds from Operations		199,149			88,035,037	2.26		158,081		84,252,063	1.88
Charge upon redemption of Series G and H Preferred Stock		6,412				0.07
Acquisition costs								1,681			0.02
Adjusted Funds from Operations		205,561			88,035,037	2.33		159,762		84,252,063	1.90
TCO's average ownership percentage of TRG		69.1	%					69.1	%
Adjusted Funds from Operations attributable to TCO		142,108				2.33		110,464			1.90
Adjusted Funds from Operations								159,762		84,252,063	1.90
The Pier Shops' and Regency Square's negative FFO								15,340			0.18
Adjusted Funds from Operations,
	excluding The Pier Shops and Regency Square							175,102		84,252,063	2.08
TCO's average ownership percentage of TRG								69.1	%
Adjusted Funds from Operations attributable to TCO,
	excluding The Pier Shops and Regency Square							121,064			2.08

Taubman Centers/12

TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended September 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			45,061		21,868		108,686		66,602
Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations		36,414		33,054		109,083		99,503
	Consolidated businesses at 100% - discontinued operations				5,361				9,030
	Noncontrolling partners in consolidated joint ventures		(2,888	)	(2,404	)	(7,650	)	(8,111	)
	Share of Unconsolidated Joint Ventures		5,311		5,486		15,786		16,350
Add (less) interest expense and income tax expense (benefit):
	Interest expense:
		Consolidated businesses at 100% - continuing operations	34,943		30,064		109,146		89,529
		Consolidated businesses at 100% - discontinued operations			6,354				17,374
		Noncontrolling partners in consolidated joint ventures	(4,225	)	(2,767	)	(12,634	)	(8,409	)
		Share of Unconsolidated Joint Ventures	8,765		8,082		25,084		23,406
	Share of income tax expense (benefit)		667		208		1,393		413
Less noncontrolling share of income of consolidated joint ventures			(2,079	)	(4,327	)	(6,788	)	(10,497	)
Beneficial Interest in EBITDA			121,969		100,979		342,106		295,190
TCO's average ownership percentage of TRG			69.6	%	69.7	%	69.1	%	69.1	%
Beneficial Interest in EBITDA attributable to TCO			84,923		70,388		236,516		204,082
Beneficial Interest in EBITDA			121,969		100,979		342,106		295,190
	Acquisition costs				1,681				1,681
Adjusted Beneficial Interest in EBITDA			121,969		102,660		342,106		296,871
TCO's average ownership percentage of TRG			69.6	%	69.7	%	69.1	%	69.1	%
Adjusted Beneficial Interest in EBITDA attributable to TCO			84,923		71,560		236,516		205,254

Taubman Centers/13

TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended September 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		45,061			21,868			21,868			8,458			108,686			66,602			66,602			43,755
Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	36,414			33,054			33,054			41,585			109,083			99,503			99,503			110,629
	Consolidated businesses at 100% - discontinued operations				5,361			5,361			2,915						9,030			9,030			6,873
	Noncontrolling partners in consolidated joint ventures	(2,888	)		(2,404	)		(2,404	)		(2,501	)		(7,650	)		(8,111	)		(8,111	)		(7,519	)
	Share of Unconsolidated Joint Ventures	5,311			5,486			5,486			5,731			15,786			16,350			16,350			16,532
Add (less) interest expense and income tax expense:
	Interest expense:
	Consolidated businesses at 100% - continuing operations	34,943			30,064			30,064			33,743			109,146			89,529			89,529			99,157
	Consolidated businesses at 100% - discontinued operations				6,354			6,354			5,163						17,374			17,374			15,089
	Noncontrolling partners in consolidated joint ventures	(4,225	)		(2,767	)		(2,767	)		(5,356	)		(12,634	)		(8,409	)		(8,409	)		(15,869	)
	Share of Unconsolidated Joint Ventures	8,765			8,082			8,082			8,360			25,084			23,406			23,406			24,810
	Share of income tax expense	667			208			208			238			1,393			413			413			548
Less noncontrolling share of income of consolidated joint ventures		(2,079	)		(4,327	)		(4,327	)		(1,920	)		(6,788	)		(10,497	)		(10,497	)		(5,901	)
Add EBITDA attributable to outside partners:
	EBITDA attributable to noncontrolling partners in consolidated joint ventures	9,257			9,498			9,498			9,777			27,117			27,017			27,017			29,289
	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	21,536			20,326			20,326			19,764			62,259			59,524			59,524			57,902
EBITDA at 100%		152,762			130,803			130,803			125,957			431,482			381,731			381,731			375,295
Add (less) items excluded from shopping center NOI:
	General and administrative expenses	9,571			7,709			7,709			7,168			28,021			22,998			22,998			21,593
	Management, leasing, and development services, net	(4,069	)		(2,194	)		(2,194	)		(2,155	)		(5,767	)		(7,931	)		(7,931	)		(5,440	)
	Gains on sales of peripheral land																(519	)		(519	)		(1,040	)
	Interest income	(74	)		(225	)		(225	)		(193	)		(270	)		(528	)		(528	)		(453	)
	Straight-line of rents	(2,055	)		(836	)		(836	)		(1,045	)		(4,535	)		(1,379	)		(1,379	)		(1,570	)
	Acquisition costs				1,681			1,681									1,681			1,681
	Non-center specific operating expenses and other	6,357			7,244			7,244			4,802			21,773			22,057			22,057			16,607
NOI - all centers at 100%		162,492			144,182			144,182			134,534			470,704			418,110			418,110			404,992
Less - NOI of non-comparable centers		(7,459	)	(1)	(33	)	(2)	(33	)	(2)	(1,524	)	(2)	(20,230	)	(1)	(1,909	)	(2)	(1,909	)	(2)	(5,659	)	(2)
NOI at 100% - comparable centers		155,033			144,149			144,149			133,010			450,474			416,201			416,201			399,333
NOI - growth %		7.6	%					8.4	%					8.2	%					4.2	%
NOI at 100% - comparable centers		155,033			144,149			144,149			133,010			450,474			416,201			416,201			399,333
Lease cancellation income		(1,076	)		(787	)		(787	)		(948	)		(3,015	)		(2,987	)		(2,987	)		(10,129	)
NOI at 100% - comparable centers excluding lease cancellation income		153,957			143,362			143,362			132,062			447,459			413,214			413,214			389,204
NOI excluding lease cancellation income - growth %		7.4	%					8.6	%					8.3	%					6.2	%
(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/14

TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of September 30, 2012 and December 31, 2011
(in thousands of dollars)
			As of
			September 30, 2012		December 31, 2011
Consolidated Balance Sheet of Taubman Centers, Inc. :
Assets:
	Properties		4,202,022		4,020,954
	Accumulated depreciation and amortization		(1,361,527	)	(1,271,943	)
			2,840,495		2,749,011
	Investment in Unconsolidated Joint Ventures		122,151		75,582
	Cash and cash equivalents		29,296		24,033
	Restricted cash (1)		4,611		295,318
	Accounts and notes receivable, net		42,135		59,990
	Accounts receivable from related parties		1,817		1,418
	Deferred charges and other assets		112,234		131,440
			3,152,739		3,336,792
Liabilities:
	Mortgage notes payable		2,654,687		2,864,135
	Installment notes (1)				281,467
	Accounts payable and accrued liabilities		267,147		255,146
	Distributions in excess of investments in and net income of
		Unconsolidated Joint Ventures	317,031		192,257
			3,238,865		3,593,005
Redeemable noncontrolling interests			81,434		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
		Series J Cumulative Redeemable Preferred Stock
		Common stock	617		580
		Additional paid-in capital	826,594		673,923
		Accumulated other comprehensive loss	(31,407	)	(27,613	)
		Dividends in excess of net income	(890,426	)	(863,040	)
			(94,596	)	(216,124	)
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(101,108	)	(101,872	)
		Noncontrolling interests in partnership equity of TRG	28,144		(22,452	)
			(72,964	)	(124,324	)
			(167,560	)	(340,448	)
			3,152,739		3,336,792
Combined Balance Sheet of Unconsolidated Joint Ventures (2) :
Assets:
	Properties		1,119,287		1,107,314
	Accumulated depreciation and amortization		(466,621	)	(446,059	)
			652,666		661,255
	Cash and cash equivalents		20,597		22,042
	Accounts and notes receivable, net		17,404		24,628
	Deferred charges and other assets		41,489		21,289
			732,156		729,214
Liabilities:
	Mortgage notes payable		1,346,485		1,138,808
	Accounts payable and other liabilities, net		59,081		55,737
			1,405,566		1,194,545
Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(375,530	)	(235,525	)
	Accumulated deficiency in assets - Joint Venture Partners		(274,186	)	(211,478	)
	Accumulated other comprehensive income (loss) - TRG		(11,847	)	(9,233	)
	Accumulated other comprehensive income (loss) - Joint Venture Partners		(11,847	)	(9,095	)
			(673,410	)	(465,331	)
			732,156		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.
(2)	The September 30, 2012 amounts exclude the balances of Hanam Union Square and the retail component of Xi'an Saigao City Plaza, which are currently under development.

Taubman Centers/15

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			3.27		3.32
		Charge upon redemption of Series G and H Preferred Stock	(0.07	)	(0.07	)
		Early extinguishment of debt charge (1)	(0.02	)	(0.02	)
Funds from Operations per common share			3.18		3.23
Real estate depreciation - TRG			(1.75	)	(1.73	)
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)			1.30		1.37
(1	)	In October 2012, the existing $197 million, 5.46% loan on The Mall at Millenia, a 50 percent owned joint venture, was refinanced. Since this was earlier than allowed under the loan, the partnership incurred approximately $3.2 million in defeasance charges, of which $1.6 million was our share.