Exhibit 99
|
| | | | |
| Taubman Centers, Inc. | T 248.258.6800 | | | |
| 200 East Long Lake Road | www.taubman.com | | |
| Suite 300 | | | |
| Bloomfield Hills, Michigan | | | |
| 48304-2324 | | | |
Taubman Centers, Inc. Issues Second Quarter Results
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| • | Net Income and Earnings Per Share Up |
| |
| • | Comparable Center Net Operating Income (NOI) Up 6.2 Percent |
| |
| • | Funds from Operations and Adjusted Funds from Operations Per Share Up |
| |
| • | Average Rent Per Square Foot Up 5.4 Percent |
| |
| • | Trailing 12-Month Releasing Spreads 24.2 Percent |
BLOOMFIELD HILLS, Mich., July 28, 2016 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the second quarter of 2016.
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| | | | | |
| | | June 30, 2016 Three Months Ended | June 30, 2015 Three Months Ended | June 30, 2016 Six Months Ended | June 30, 2015 Six Months Ended |
Net income attributable to common shareowners (EPS) per diluted common share Growth rate |
$0.57 54.1%
| $0.37 |
$0.98 16.7% | $0.84 |
Funds from Operations (FFO) per diluted common share Growth rate |
$1.04 36.8% | $0.76 |
$1.88 19.7% | $1.57 |
Adjusted Funds from Operations (Adjusted FFO) per diluted common share Growth rate |
$0.79 (1) 3.9% | $0.76 |
$1.63 (1) 3.8% | $1.57 |
| (1) | Adjusted FFO for the three and six months ended June 30, 2016 excludes a one-time $21.7 million payment the company received in the second quarter due to the termination of the company’s leasing services agreement at The Shops at Crystals (Las Vegas, Nev.). |
“We had a solid quarter,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “FFO was consistent with our expectations despite a two cent legal charge.
Our NOI growth was strong. Driven by increased rents, recoveries, and occupancy, we produced our best quarter of growth in nearly four years. We also posted impressive releasing spreads that for the eighth consecutive quarter were greater than 20 percent.”
Operating Statistics
Diluted net income attributable to common shareowners was up 49.1 percent for the quarter, bringing year-to-date growth to 12.1 percent. Comparable center NOI, excluding lease cancellation income, was up 6.2 percent for the quarter, bringing year-to-date growth to 6 percent.
Average rent per square foot for the quarter was $62.61, up 5.4 percent from $59.41 in the comparable period last year. Year-to-date, average rent per square foot was up 4 percent.
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Trailing 12-month releasing spreads per square foot for the period ended June 30, 2016 were a robust 24.2 percent.
Ending occupancy in comparable centers was 93.8 percent on June 30, 2016, up 0.8 percent from June 30, 2015. Leased space in comparable centers was 96.2 percent on June 30, 2016, down 0.8 percent from June 30, 2015.
Comparable center mall tenant sales per square foot decreased 0.7 percent from the second quarter of 2015. This brings the company's 12-month trailing mall tenant sales per square foot to $789, a decrease of 1 percent from the 12-months ended June 30, 2015. Year-to-date, mall tenant sales per square foot were down 1.8 percent.
“Most of our centers reported sales increases during the quarter,” said Mr. Taubman. “Unfortunately, softness in our South Florida centers continued.”
Ownership in CityOn.Zhengzhou Increased; Planned Opening Date Changed
In July, Taubman and Wangfujing Group Co. acquired Maple Real Estate’s (the land developer) 35 percent interest in CityOn.Zhengzhou. As a result, Taubman and Wangfujing now own 49 percent and 51 percent of the center, respectively. The company expects its share of the additional investment to be approximately $60 million. “We have made tremendous progress in leasing and construction. We are confident in the future success of the center and are pleased to have the opportunity at this time to increase our ownership,” said Rene Tremblay, president of Taubman Asia.
The opening of the center is now expected to occur in March 2017. The completion of a new main power station being built by the government, which is required for the center’s opening, has been delayed. The change in opening date will not impact the company's anticipated $175 million share of total project cost or after-tax stabilized return of 6 to 6.5 percent.
Financing Activity
In May, Cherry Creek Shopping Center (Denver, Colo.), the company’s 50 percent owned joint venture, completed a $550 million, 12-year, non-recourse refinancing. The loan is interest only during the entire term at a fixed all-in rate of 3.87 percent. Proceeds were used to pay off the previous $280 million, 5.24 percent loan. The company’s share of excess proceeds, net of fees, of approximately $135 million was used to pay down the company’s lines of credit.
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2016 Guidance
The company is updating its guidance for 2016. 2016 EPS is now expected to be in the range of $1.73 to $1.93 per diluted common share, revised from the previous range of $1.85 to $2.10. 2016 FFO is now expected to be in the range of $3.75 to $3.90 per diluted common share, revised from the previous range of $3.75 to $3.95. 2016 Adjusted FFO, which excludes the one-time $21.7 million payment the company received in the second quarter due to the termination of the company’s leasing services agreement at The Shops at Crystals, is now expected to be in the range of $3.50 to $3.65 per diluted common share, revised from the previous range of $3.50 to $3.70.
The changes in the company’s guidance are primarily due to lower lease cancellation income, which the company now expects its beneficial share to be about $3 million, down from the previous estimate of about $6 million. In addition, the company incurred an unanticipated two cent legal charge in the second quarter.
Supplemental Investor Information Available
The company provides supplemental investor information along with its earnings announcements, available online at www.taubman.com under “Investors.” This includes the following:
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| • | Earnings Reconciliations |
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| • | Changes in Funds from Operations and Earnings Per Common Share |
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| • | Components of Other Income, Other Operating Expense and Nonoperating Income, Net |
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| • | Recoveries Ratio Analysis |
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| • | Other Debt, Equity and Certain Balance Sheet Information |
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| • | Construction and Redevelopments |
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| • | Summary of Key Guidance Measures |
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| • | Major Tenants in Owned Portfolio |
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| • | Anchors in Owned Portfolio |
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| • | Operating Statistics Glossary |
Investor Conference Call
The company will host a conference call at 10:00 a.m. EDT on Friday, July 29 to discuss its results, business conditions and the company’s outlook for the remainder of 2016. The conference call will be simulcast at www.taubman.com. An online replay will be available shortly after the call and will continue for approximately 90 days.
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About Taubman
Taubman Centers is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 24 regional, super-regional and outlet shopping centers in the U.S. and Asia. Taubman’s U.S.-owned properties are the most productive in the publicly held U.S. regional mall industry. Taubman is currently developing three properties in the U.S. and Asia totaling 3.1 million square feet. Founded in 1950, Taubman is headquartered in Bloomfield Hills, Mich. Taubman Asia, founded in 2005, is headquartered in Hong Kong. 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. Forward-looking statements can be identified by words such as “will”, “may”, “could”, “expect”, “anticipate”, “believes”, “intends”, “should”, “plans”, “estimates”, “approximate”, “guidance” and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, the company assumes 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, uncertainties and other factors. Such factors include, but are not limited to: changes in market rental rates; unscheduled closings or bankruptcies of tenants; relationships with anchor tenants; trends in the retail industry; the liquidity of real estate investments; the company’s ability to comply with debt covenants; the availability and terms of financings; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in value of investments in foreign entities; the ability to hedge interest rate and currency risk; risks related to acquiring, developing, expanding, leasing and managing properties; changes in value of investments in foreign entities; risks related to joint venture properties; insurance costs and coverage; security breaches that could impact the company’s information technology, infrastructure or personal data; the loss of key management personnel; terrorist activities; maintaining the company’s status as a real estate investment trust; changes in the laws of states, localities, and foreign jurisdictions that may increase taxes on the company’s operations; and changes in global, national, regional and/or local economic and geopolitical climates. You should review the company's filings with the Securities and Exchange Commission, including “Risk Factors” in its most recent Annual Report on Form 10-K and subsequent quarterly reports, for a discussion of such risks and uncertainties.
CONTACTS:
Ryan Hurren, Taubman, Director, Investor Relations, 248-258-7232
rhurren@taubman.com
Maria Mainville, Taubman, Director, Strategic Communications, 248-258-7469
mmainville@taubman.com
# # #
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| | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | | |
| Table 1 - Summary of Results | | | | | | | |
| For the Periods Ended June 30, 2016 and 2015 | | | | | | | |
| (in thousands of dollars, except as indicated) | | | | | | |
| | Three Months Ended | | Year to Date |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Net income | 57,744 |
| | 42,333 |
| | 102,073 |
| | 93,333 |
|
| Noncontrolling share of income of consolidated joint ventures | (1,630 | ) | | (2,672 | ) | | (4,151 | ) | | (5,263 | ) |
| Noncontrolling share of income of TRG | (15,087 | ) | | (10,153 | ) | | (25,986 | ) | | (22,664 | ) |
| Distributions to participating securities of TRG | (524 | ) | | (493 | ) | | (1,036 | ) | | (985 | ) |
| Preferred stock dividends | (5,785 | ) | | (5,785 | ) | | (11,569 | ) | | (11,569 | ) |
| Net income attributable to Taubman Centers, Inc. common shareowners | 34,718 |
| | 23,230 |
| | 59,331 |
| | 52,852 |
|
| Net income per common share - basic | 0.58 |
| | 0.38 |
| | 0.98 |
| | 0.85 |
|
| Net income per common share - diluted | 0.57 |
| | 0.37 |
| | 0.98 |
| | 0.84 |
|
| Beneficial interest in EBITDA - Combined (1) | 127,895 |
| | 99,134 |
| | 236,371 |
| | 202,640 |
|
| Adjusted Beneficial interest in EBITDA - Combined (1) | 106,193 |
| | 99,134 |
| | 214,669 |
| | 202,640 |
|
| Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 89,816 |
| | 67,596 |
| | 162,840 |
| | 140,512 |
|
| Funds from Operations attributable to TCO's common shareowners (1) | 63,464 |
| | 47,939 |
| | 115,061 |
| | 99,909 |
|
| Funds from Operations per common share - basic (1) | 1.05 |
| | 0.78 |
| | 1.91 |
| | 1.60 |
|
| Funds from Operations per common share - diluted (1) | 1.04 |
| | 0.76 |
| | 1.88 |
| | 1.57 |
|
| Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 68,114 |
| | 67,596 |
| | 141,138 |
| | 140,512 |
|
| Adjusted Funds from Operations attributable to TCO's common shareowners (1) | 48,129 |
| | 47,939 |
| | 99,726 |
| | 99,909 |
|
| Adjusted Funds from Operations per common share - basic (1) | 0.80 |
| | 0.78 |
| | 1.65 |
| | 1.60 |
|
| Adjusted Funds from Operations per common share - diluted (1) | 0.79 |
| | 0.76 |
| | 1.63 |
| | 1.57 |
|
| Weighted average number of common shares outstanding - basic | 60,353,080 |
| | 61,606,563 |
| | 60,314,042 |
| | 62,319,211 |
|
| Weighted average number of common shares outstanding - diluted | 60,701,702 |
| | 62,386,042 |
| | 60,746,351 |
| | 63,156,702 |
|
| Common shares outstanding at end of period | 60,390,149 |
| | 60,886,865 |
| | | | |
| Weighted average units - Operating Partnership - basic | 85,413,911 |
| | 86,669,952 |
| | 85,375,537 |
| | 87,402,848 |
|
| Weighted average units - Operating Partnership - diluted | 86,633,794 |
| | 88,320,693 |
| | 86,679,108 |
| | 89,111,601 |
|
| Units outstanding at end of period - Operating Partnership | 85,449,499 |
| | 85,950,254 |
| | | | |
| Ownership percentage of the Operating Partnership at end of period | 70.7 | % | | 70.8 | % | | | | |
| Number of owned shopping centers at end of period | 21 |
| | 19 |
| | | | |
| | | | | | | | |
| Operating Statistics: | | | | | | | |
| Net Operating Income excluding lease cancellation income - growth % (1)(2) | 6.2 | % | | 2.5 | % | | 6.0 | % | | 3.1 | % |
| Net Operating Income including lease cancellation income - growth % (1)(2) | 6.2 | % | | -0.4 | % | | 5.2 | % | | 2.4 | % |
| Average rent per square foot - Consolidated Businesses (2) | 66.00 |
| | 61.27 |
| | 64.73 |
| | 60.86 |
|
| Average rent per square foot - Unconsolidated Joint Ventures (2) | 58.95 |
| | 57.38 |
| | 58.36 |
| | 57.58 |
|
| Average rent per square foot - Combined (2) | 62.61 |
| | 59.41 |
| | 61.68 |
| | 59.30 |
|
| Average rent per square foot growth (2) | 5.4 | % | | | | 4.0 | % | | |
| Ending occupancy - all centers | 92.5 | % | | 90.6 | % | | 92.5 | % | | 90.6 | % |
| Ending occupancy - comparable (2) | 93.8 | % | | 93.0 | % | | 93.8 | % | | 93.0 | % |
| Leased space - all centers | 95.6 | % | | 95.7 | % | | 95.6 | % | | 95.7 | % |
| Leased space - comparable (2) | 96.2 | % | | 97.0 | % | | 96.2 | % | | 97.0 | % |
| Mall tenant sales - all centers (3) | 1,293,120 |
| | 1,203,516 |
| | 2,495,388 |
| | 2,379,273 |
|
| Mall tenant sales - comparable (2)(3) | 1,123,375 |
| | 1,117,744 |
| | 2,219,858 |
| | 2,218,319 |
|
| | | | | | | | |
| | 12-Months Trailing | | | | |
| | 2016 | | 2015 | | | | |
| Operating Statistics: | | | | | | | |
| Mall tenant sales - all centers (3) | 5,294,103 |
| | 5,102,054 |
| | | | |
| Mall tenant sales - comparable (2)(3) | 4,604,678 |
| | 4,616,742 |
| | | | |
| Sales per square foot (2)(3) | 789 |
| | 797 |
| | | | |
| All centers (3): | | | | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 14.6 | % | | 14.1 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 14.1 | % | | 13.2 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 14.4 | % | | 13.7 | % | | | | |
| Comparable centers (2)(3): | | | | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 14.1 | % | | 13.6 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 14.3 | % | | 13.3 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 14.2 | % | | 13.5 | % | | | | |
|
| | | |
| (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 peripheral 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, excluding centers impacted by significant redevelopment activity. |
| | 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 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 six month periods ended June 30, 2016, FFO and EBITDA were adjusted to exclude the lump sum payment of $21.7 million received in May 2016 in connection with the termination of the Company's third party leasing agreement at The Shops at Crystals (Crystals) due to a change in ownership of the center. |
| | 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 non-comparable centers for all periods presented. The June 30, 2015 statistics have been restated to include comparable centers to 2016. The Mall at University Town Center has been excluded from comparable 12-month trailing statistics reported for 2016 and 2015 as the center was not open for the entire 12 months ended June 30, 2015. Sales per square foot exclude spaces greater than or equal to 10,000 square feet. |
| | | | |
| (3) | 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 June 30, 2016 and 2015 | | | | | | |
| (in thousands of dollars) | | | | | | |
| | | | 2016 | | 2015 |
| | | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) |
| REVENUES: | | | | | | | |
| | Minimum rents | 82,694 |
| | 66,452 |
| | 76,869 |
| | 52,865 |
|
| | Percentage rents | 924 |
| | 1,188 |
| | 1,077 |
| | 1,203 |
|
| | Expense recoveries | 47,380 |
| | 38,340 |
| | 46,020 |
| | 31,694 |
|
| | Management, leasing, and development services (2) | 23,196 |
| |
| | 3,341 |
| |
|
| | Other | 4,696 |
| | 2,668 |
| | 4,666 |
| | 2,112 |
|
| | | Total revenues | 158,890 |
| | 108,648 |
| | 131,973 |
| | 87,874 |
|
| | | | | | | | | | |
| EXPENSES: | | | | | | | |
| | Maintenance, taxes, utilities, and promotion | 35,917 |
| | 31,429 |
| | 35,107 |
| | 22,772 |
|
| | Other operating (3) | 20,482 |
| | 5,424 |
| | 14,680 |
| | 4,647 |
|
| | Management, leasing, and development services | 894 |
| |
| | 1,411 |
| |
|
| | General and administrative | 11,693 |
| |
| | 12,055 |
| |
|
| | Interest expense | 20,588 |
| | 24,965 |
| | 14,781 |
| | 21,056 |
|
| | Depreciation and amortization | 29,716 |
| | 20,612 |
| | 26,378 |
| | 14,370 |
|
| | | Total expenses | 119,290 |
| | 82,430 |
| | 104,412 |
| | 62,845 |
|
| | | | | | | | | | |
| Nonoperating income, net | 2,676 |
| | 860 |
| | 1,456 |
| | (3 | ) |
| | | | 42,276 |
| | 27,078 |
| | 29,017 |
|
| 25,026 |
|
| Income tax expense | (442 | ) | | | | (688 | ) | | |
| Equity in income of Unconsolidated Joint Ventures | 15,910 |
| | | | 14,004 |
| | |
| | | | | | | | | | |
| Net income | 57,744 |
| | | | 42,333 |
| | |
| Net income attributable to noncontrolling interests: | | | | | | | |
| | Noncontrolling share of income of consolidated joint ventures | (1,630 | ) | | | | (2,672 | ) | | |
| | Noncontrolling share of income of TRG | (15,087 | ) | | | | (10,153 | ) | | |
| Distributions to participating securities of TRG | (524 | ) | | | | (493 | ) | | |
| Preferred stock dividends | (5,785 | ) | | | | (5,785 | ) | | |
| Net income attributable to Taubman Centers, Inc. common shareowners | 34,718 |
| | | | 23,230 |
| | |
| | | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | |
| | EBITDA - 100% | 92,580 |
| | 72,655 |
| | 70,176 |
| | 60,452 |
|
| | EBITDA - outside partners' share | (5,471 | ) | | (31,869 | ) | | (4,953 | ) | | (26,541 | ) |
| | Beneficial interest in EBITDA | 87,109 |
| | 40,786 |
| | 65,223 |
| | 33,911 |
|
| | Beneficial interest expense | (18,022 | ) | | (13,207 | ) | | (13,047 | ) | | (11,405 | ) |
| | Beneficial income tax expense - TRG and TCO | (434 | ) | |
| | (688 | ) | |
|
| | Beneficial income tax expense - TCO | | |
| | 109 |
| |
|
| | Non-real estate depreciation | (631 | ) | |
| | (722 | ) | |
|
| | Preferred dividends and distributions | (5,785 | ) | |
|
| | (5,785 | ) | |
|
|
| | Funds from Operations attributable to partnership unitholders and participating securities of TRG | 62,237 |
| | 27,579 |
| | 45,090 |
| | 22,506 |
|
| | | | | | | | | | |
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | | | | | | | |
| | Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% | 440 |
| | 707 |
| | (116 | ) | | 496 |
|
| | The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 56 |
| | | | 87 |
| | |
| | El Paseo Village and The Gardens on El Paseo purchase accounting | | | | | | | |
| | | adjustments - interest expense reduction | 155 |
| | | | 305 |
| | |
| | Waterside Shops purchase accounting adjustments - interest expense reduction | | | 525 |
| | | | 262 |
|
| | | | | | | | | | |
| (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. |
| (2 | ) | Amount includes the $21.7 million lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at Crystals due to a change in ownership in the center. |
| (3 | ) | In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $0.8 million for the three months ended June 30, 2015. |
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| TAUBMAN CENTERS, INC. | | | | | | |
| Table 3 - Income Statement | | | | | | |
| For the Six Months Ended June 30, 2016 and 2015 | | | | | | |
| (in thousands of dollars) | | | | | | |
| | | | 2016 | | 2015 |
| | | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) |
| REVENUES: | | | | | | | |
| | Minimum rents | 164,671 |
| | 124,015 |
| | 151,436 |
| | 105,574 |
|
| | Percentage rents | 3,696 |
| | 3,220 |
| | 4,007 |
| | 3,450 |
|
| | Expense recoveries | 95,140 |
| | 72,712 |
| | 89,932 |
| | 63,251 |
|
| | Management, leasing, and development services (2) | 24,924 |
| |
| | 6,298 |
| |
|
| | Other | 9,914 |
| | 5,464 |
| | 9,289 |
| | 7,513 |
|
| | | Total revenues | 298,345 |
| | 205,411 |
| | 260,962 |
| | 179,788 |
|
| | | | | | | | | | |
| EXPENSES: | | | | | | | |
| | Maintenance, taxes, utilities, and promotion | 70,855 |
| | 54,785 |
| | 66,740 |
| | 44,271 |
|
| | Other operating (3) | 39,190 |
| | 8,828 |
| | 27,898 |
| | 10,077 |
|
| | Management, leasing, and development services | 1,766 |
| |
| | 2,541 |
| |
|
| | General and administrative | 23,073 |
| |
| | 23,980 |
| |
|
| | Interest expense | 39,716 |
| | 46,298 |
| | 28,306 |
| | 42,022 |
|
| | Depreciation and amortization | 59,462 |
| | 36,618 |
| | 50,419 |
| | 27,869 |
|
| | | Total expenses | 234,062 |
| | 146,529 |
| | 199,884 |
| | 124,239 |
|
| | | | | | | | | | |
| Nonoperating income, net | 4,146 |
| | 1,106 |
| | 2,702 |
| | 5 |
|
| | | | 68,429 |
| | 59,988 |
| | 63,780 |
| | 55,554 |
|
| Income tax expense | (744 | ) | | | | (1,526 | ) | | |
| Equity in income of Unconsolidated Joint Ventures | 34,388 |
| | | | 31,079 |
| | |
| | | |
|
| | | |
|
| | |
| Net income | 102,073 |
| | | | 93,333 |
| | |
| Net income attributable to noncontrolling interests: | | | | | | | |
| | Noncontrolling share of income of consolidated joint ventures | (4,151 | ) | | | | (5,263 | ) | | |
| | Noncontrolling share of income of TRG | (25,986 | ) | | | | (22,664 | ) | | |
| Distributions to participating securities of TRG | (1,036 | ) | | | | (985 | ) | | |
| Preferred stock dividends | (11,569 | ) | | | | (11,569 | ) | | |
| Net income attributable to Taubman Centers, Inc. common shareowners | 59,331 |
| | | | 52,852 |
| | |
| | | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | |
| | EBITDA - 100% | 167,607 |
| | 142,904 |
| | 142,505 |
| | 125,445 |
|
| | EBITDA - outside partners' share | (11,363 | ) | | (62,777 | ) | | (10,282 | ) | | (55,028 | ) |
| | Beneficial interest in EBITDA | 156,244 |
| | 80,127 |
| | 132,223 |
| | 70,417 |
|
| | Beneficial interest expense | (35,198 | ) | | (24,735 | ) | | (24,918 | ) | | (22,768 | ) |
| | Beneficial income tax expense - TRG and TCO | (736 | ) | |
| | (1,526 | ) | |
|
| | Beneficial income tax expense (benefit) - TCO | (19 | ) | |
| | 288 |
| |
|
| | Non-real estate depreciation | (1,274 | ) | |
| | (1,635 | ) | |
|
| | Preferred dividends and distributions | (11,569 | ) | |
| | (11,569 | ) | |
|
| | Funds from Operations attributable to partnership unitholders and participating securities of TRG | 107,448 |
| | 55,392 |
| | 92,863 |
| | 47,649 |
|
| | | | | | | | | | |
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | | | | | | | |
| | Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% | 453 |
| | 1,164 |
| | (373 | ) | | 889 |
|
| | The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 116 |
| | | | 180 |
| | |
| | El Paseo Village and The Gardens on El Paseo purchase accounting | | | | | | | |
| | | adjustments - interest expense reduction | 440 |
| | | | 611 |
| | |
| | Waterside Shops purchase accounting adjustments - interest expense reduction | | | 788 |
| | | | 525 |
|
| | | | | | | | | | |
| | | | | | | | | | |
| (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. |
| (2 | ) | Amount includes the $21.7 million lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at Crystals due to a change in ownership in the center.
|
| (3 | ) | In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $2.5 million for the six months ended June 30, 2015. |
|
| | | | | | | | | | | | | | | | | | | |
| 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 June 30, 2016 and 2015 |
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | | | | | | | | |
| | | | | | | | | | | | | |
| | | 2016 | | 2015 |
| | | | | Shares | | Per Share | | | | Shares | | Per Share |
| | | Dollars | | /Units | | /Unit | | Dollars | | /Units | | /Unit |
| Net income attributable to TCO common shareowners - basic | 34,718 |
| | 60,353,080 |
| | 0.58 |
| | 23,230 |
| | 61,606,563 |
| | 0.38 |
|
| | | | | | | | | | | | |
| Add impact of share-based compensation | 61 |
| | 348,622 |
| |
| | 91 |
| | 779,479 |
| |
|
| | | | | | | | | | | | |
| Net income attributable to TCO common shareowners - diluted | 34,779 |
| | 60,701,702 |
| | 0.57 |
| | 23,321 |
| | 62,386,042 |
| | 0.37 |
|
| | | | | | | | | | | | | |
| Add depreciation of TCO's additional basis | 1,617 |
| |
| | 0.03 |
| | 1,617 |
| |
| | 0.03 |
|
| Add TCO's additional income tax expense |
|
| |
| |
|
| | 109 |
| |
| | 0.00 |
|
| | | | | | | | | | | | | |
| Net income attributable to TCO common shareowners, | | | | | | | | | | | |
| | excluding step-up depreciation and additional income tax expense | 36,396 |
| | 60,701,702 |
| | 0.60 |
| | 25,047 |
| | 62,386,042 |
| | 0.40 |
|
| | | | | | | | | | | | | |
| Add noncontrolling share of income of TRG | 15,087 |
| | 25,060,830 |
| |
| | 10,153 |
| | 25,063,389 |
| |
|
| Add distributions to participating securities of TRG | 524 |
| | 871,262 |
| |
| | 493 |
| | 871,262 |
| |
|
| | | | | | | | | | | | | |
| Net income attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 52,007 |
| | 86,633,794 |
| | 0.60 |
| | 35,693 |
| | 88,320,693 |
| | 0.40 |
|
| | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | |
| | Consolidated businesses at 100% | 29,716 |
| |
| | 0.34 |
| | 26,378 |
| |
| | 0.30 |
|
| | Depreciation of TCO's additional basis | (1,617 | ) | |
| | (0.02 | ) | | (1,617 | ) | |
| | (0.02 | ) |
| | Noncontrolling partners in consolidated joint ventures | (1,267 | ) | |
| | (0.01 | ) | | (547 | ) | |
| | (0.01 | ) |
| | Share of Unconsolidated Joint Ventures | 11,669 |
| |
| | 0.13 |
| | 8,502 |
| |
| | 0.10 |
|
| | Non-real estate depreciation | (631 | ) | |
| | (0.01 | ) | | (722 | ) | |
| | (0.01 | ) |
| | | | | | | | | | | | | |
| Less impact of share-based compensation | (61 | ) | |
|
| | (0.00 | ) | | (91 | ) | |
|
| | (0.00 | ) |
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 89,816 |
| | 86,633,794 |
| | 1.04 |
| | 67,596 |
| | 88,320,693 |
| | 0.77 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (1) | 70.7 | % | | | | | | 71.1 | % | | | | |
| | | | | | | | | | | | | |
| Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax expense (1) | 63,464 |
| | | | 1.04 |
| | 48,048 |
| | | | 0.77 |
|
| | | | | | | | | | | | | |
| Less TCO's additional income tax expense |
| | | |
|
| | (109 | ) | | | | (0.00 | ) |
| | | | | | | | | | | | | |
Funds from Operations attributable to TCO's common shareowners (1) | 63,464 |
| | | | 1.04 |
| | 47,939 |
| | | | 0.76 |
|
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 89,816 |
| | 86,633,794 |
| | 1.04 |
| | 67,596 |
| | 88,320,693 |
| | 0.77 |
|
| | | | | | | | | | | | | |
| Crystals lump sum payment received for termination of leasing agreement | (21,702 | ) | |
|
| | (0.25 | ) | |
| |
| |
|
| | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 68,114 |
| | 86,633,794 |
| | 0.79 |
| | 67,596 |
| | 88,320,693 |
| | 0.77 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (2) | 70.7 | % | | | | | | 71.1 | % | | | | |
| | | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax expense (2) | 48,129 |
| | | | 0.79 |
| | 48,048 |
| | | | 0.77 |
|
| | | | | | | | | | | | | |
| Less TCO's additional income tax expense |
| | | |
|
| | (109 | ) | | | | (0.00 | ) |
| | | | | | | | | | | | | |
Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 48,129 |
| | | | 0.79 |
| | 47,939 |
| | | | 0.76 |
|
| | | | | | | | | | | | | |
| (1 | ) | For the three months ended June 30, 2016, Funds from Operations attributable to TCO's common shareowners was $62,570 using TCO's diluted average ownership percentage of TRG of 69.7%. For the three months ended June 30, 2015, Funds from Operations attributable to TCO's common shareowners was $47,041 using TCO's diluted average ownership percentage of TRG of 69.8%. |
| |
| (2 | ) | For the three months ended June 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $47,451 using TCO's diluted average ownership percentage of TRG of 69.7%. For the three months ended June 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $47,041 using TCO's diluted average ownership percentage of TRG of 69.8%. |
| |
|
| | | | | | | | | | | | | | | | | | | |
| 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 Six Months Ended June 30, 2016 and 2015 |
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | | | | | | | |
| | | | | | | | | | | | | |
| | | 2016 | | 2015 |
| | | | | Shares | | Per Share | | | | Shares | | Per Share |
| | | Dollars | | /Units | | /Unit | | Dollars | | /Units | | /Unit |
| Net income attributable to TCO common shareowners - basic | 59,331 |
| | 60,314,042 |
| | 0.98 |
| | 52,852 |
| | 62,319,211 |
| | 0.85 |
|
| | | | | | | | | | | | |
| Add impact of share-based compensation | 129 |
| | 432,309 |
| |
| | 196 |
| | 837,491 |
| |
|
| | | | | | | | | | | | |
| Net income attributable to TCO common shareowners - diluted | 59,460 |
| | 60,746,351 |
| | 0.98 |
| | 53,048 |
| | 63,156,702 |
| | 0.84 |
|
| | | | | | | | | | | | | |
| Add depreciation of TCO's additional basis | 3,234 |
| |
| | 0.05 |
| | 3,234 |
| |
| | 0.05 |
|
| Add (less) TCO's additional income tax expense (benefit) | (19 | ) | |
| | (0.00 | ) | | 288 |
| |
| | 0.00 |
|
| | | | | | | | | | | | | |
| Net income attributable to TCO common shareowners, | | | | | | | | | | | |
| | excluding step-up depreciation and additional income tax expense (benefit) | 62,675 |
| | 60,746,351 |
| | 1.03 |
| | 56,570 |
| | 63,156,702 |
| | 0.90 |
|
| | | | | | | | | | | | | |
| Add noncontrolling share of income of TRG | 25,986 |
| | 25,061,495 |
| |
|
| | 22,664 |
| | 25,083,637 |
| |
|
|
| Add distributions to participating securities of TRG | 1,036 |
| | 871,262 |
| |
| | 985 |
| | 871,262 |
| |
|
| | | | | | | | | | | | | |
| Net income attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 89,697 |
| | 86,679,108 |
| | 1.03 |
| | 80,219 |
| | 89,111,601 |
| | 0.90 |
|
| | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | |
| | Consolidated businesses at 100% | 59,462 |
| |
| | 0.69 |
| | 50,419 |
| |
| | 0.57 |
|
| | Depreciation of TCO's additional basis | (3,234 | ) | |
| | (0.04 | ) | | (3,234 | ) | |
| | (0.04 | ) |
| | Noncontrolling partners in consolidated joint ventures | (2,686 | ) | |
| | (0.03 | ) | | (1,631 | ) | |
| | (0.02 | ) |
| | Share of Unconsolidated Joint Ventures | 21,004 |
| |
| | 0.24 |
| | 16,570 |
| |
| | 0.19 |
|
| | Non-real estate depreciation | (1,274 | ) | |
| | (0.01 | ) | | (1,635 | ) | |
| | (0.02 | ) |
| | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Less impact of share-based compensation | (129 | ) | |
| | (0.00 | ) | | (196 | ) | |
| | (0.00 | ) |
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 162,840 |
| | 86,679,108 |
| | 1.88 |
| | 140,512 |
| | 89,111,601 |
| | 1.58 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (1) | 70.6 | % | | | | | | 71.3 | % | | | | |
| | | | | | | | | | | | | |
| Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax benefit (expense) (1) | 115,042 |
| | | | 1.88 |
| | 100,197 |
| |
| | 1.58 |
|
| | | | | | | | | | | | | |
| Add (less) TCO's additional income tax benefit (expense) | 19 |
| | | | 0.00 |
| | (288 | ) | |
| | (0.00 | ) |
| | | | | | | | | | | | | |
Funds from Operations attributable to TCO's common shareowners (1) | 115,061 |
| | | | 1.88 |
| | 99,909 |
| | | | 1.57 |
|
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 162,840 |
| | 86,679,108 |
| | 1.88 |
| | 140,512 |
| | 89,111,601 |
| | 1.58 |
|
| | | | | | | | | | | | | |
| Crystals lump sum payment received for termination of leasing agreement | (21,702 | ) | |
| | (0.25 | ) | |
| |
| |
|
| | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 141,138 |
| | 86,679,108 |
| | 1.63 |
| | 140,512 |
| | 89,111,601 |
| | 1.58 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (2) | 70.6 | % | | | | | | 71.3 | % | | | | |
| | | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax benefit (expense) (2) | 99,707 |
| |
| | 1.63 |
| | 100,197 |
| |
| | 1.58 |
|
| | | | | | | | | | | | | |
| Add (less) TCO's additional income tax benefit (expense) | 19 |
| |
| | 0.00 |
| | (288 | ) | |
| | (0.00 | ) |
| | | | | | | | | | | | | |
Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 99,726 |
| |
| | 1.63 |
| | 99,909 |
| |
| | 1.57 |
|
| | | | | | | | | | | | | |
| (1 | ) | For the six months ended June 30, 2016, Funds from Operations attributable to TCO's common shareowners was $113,342 using TCO's diluted average ownership percentage of TRG of 69.6%. For the six months ended June 30, 2015, Funds from Operations attributable to TCO's common shareowners was $97,986 using TCO's diluted average ownership percentage of TRG of 69.9%. |
| |
| (2 | ) | For the six months ended June 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $98,223 using TCO's diluted average ownership percentage of TRG of 69.6%. For the six months ended June 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $97,986 using TCO's diluted average ownership percentage of TRG of 69.9%. |
| |
|
| | | | | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | | | |
| Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA | | | | |
| For the Periods Ended June 30, 2016 and 2015 | | | | |
| (in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) | | | | | | | | |
| | | | | | | | | | | |
| | | | | Three Months Ended | | Year to Date |
| | | | | 2016 | | 2015 | | 2016 | | 2015 |
| Net income | | 57,744 |
| | 42,333 |
| | 102,073 |
| | 93,333 |
|
| | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | |
| | Consolidated businesses at 100% | | 29,716 |
| | 26,378 |
| | 59,462 |
| | 50,419 |
|
| | Noncontrolling partners in consolidated joint ventures | | (1,267 | ) | | (547 | ) | | (2,686 | ) | | (1,631 | ) |
| | Share of Unconsolidated Joint Ventures | | 11,669 |
| | 8,502 |
| | 21,004 |
| | 16,570 |
|
| | | | | | | | | | | |
| Add (less) interest expense and income tax expense: | | | | | | | | |
| | Interest expense: | | | | | | | | |
| | | Consolidated businesses at 100% | | 20,588 |
| | 14,781 |
| | 39,716 |
| | 28,306 |
|
| | | Noncontrolling partners in consolidated joint ventures | | (2,566 | ) | | (1,734 | ) | | (4,518 | ) | | (3,388 | ) |
| | | Share of Unconsolidated Joint Ventures | | 13,207 |
| | 11,405 |
| | 24,735 |
| | 22,768 |
|
| | Share of income tax expense | | 434 |
| | 688 |
| | 736 |
| | 1,526 |
|
| | | | | | | | | | | |
| Less noncontrolling share of income of consolidated joint ventures | | (1,630 | ) | | (2,672 | ) | | (4,151 | ) | | (5,263 | ) |
| | | | | | | | | | | |
| Beneficial interest in EBITDA | | 127,895 |
| | 99,134 |
| | 236,371 |
| | 202,640 |
|
| | | | | | | | | | | |
| TCO's average ownership percentage of TRG - basic | | 70.7 | % | | 71.1 | % | | 70.6 | % | | 71.3 | % |
| | | | | | | | | | | |
| Beneficial interest in EBITDA attributable to TCO | | 90,368 |
| | 70,466 |
| | 166,986 |
| | 144,493 |
|
| | | | | | | | | | | |
| Beneficial interest in EBITDA | | 127,895 |
| | 99,134 |
| | 236,371 |
| | 202,640 |
|
| | | | | | | | | | | |
| Less: | | | | | | | | |
| | Crystals lump sum payment received for termination of leasing agreement | | (21,702 | ) | |
| | (21,702 | ) | |
|
| | | | | | | | | | | |
| Adjusted Beneficial interest in EBITDA | | 106,193 |
| | 99,134 |
| | 214,669 |
| | 202,640 |
|
| | | | | | | | | | | |
| TCO's average ownership percentage of TRG - basic | | 70.7 | % | | 71.1 | % | | 70.6 | % | | 71.3 | % |
| | | | | | | | | | | |
| Adjusted Beneficial interest in EBITDA attributable to TCO | | 75,035 |
| | 70,466 |
| | 151,653 |
| | 144,493 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | | | | | | | | | | | |
| Table 7 - Reconciliation of Net Income to Net Operating Income (NOI) | | | | | | | | | | | | | |
| For the Periods Ended June 30, 2016, 2015, and 2014 | | | | | | | | | | | | | |
| (in thousands of dollars) | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | Three Months Ended | | Year to Date | | Year to Date | |
| | | | 2016 | | 2015 | | 2015 | | 2014 | | 2016 | | 2015 | | 2015 | | 2014 | |
| Net income | 57,744 |
| | 42,333 |
| | 42,333 |
| | 39,054 |
| | 102,073 |
| | 93,333 |
| | 93,333 |
| | 565,211 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | | | | | | |
| | Consolidated businesses at 100% | 29,716 |
| | 26,378 |
| | 26,378 |
| | 36,850 |
| | 59,462 |
| | 50,419 |
| | 50,419 |
| | 71,968 |
| |
| | Noncontrolling partners in consolidated joint ventures | (1,267 | ) | | (547 | ) | | (547 | ) | | (1,593 | ) | | (2,686 | ) | | (1,631 | ) | | (1,631 | ) | | (2,754 | ) | |
| | Share of Unconsolidated Joint Ventures | 11,669 |
| | 8,502 |
| | 8,502 |
| | 6,854 |
| | 21,004 |
| | 16,570 |
| | 16,570 |
| | 14,032 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) interest expense and income tax expense: | | | | | | | | | | | | | | | | |
| | Interest expense: | | | | | | | | | | | | | | | | |
| | | Consolidated businesses at 100% | 20,588 |
| | 14,781 |
| | 14,781 |
| | 25,434 |
| | 39,716 |
| | 28,306 |
| | 28,306 |
| | 51,564 |
| |
| | | Noncontrolling partners in consolidated joint ventures | (2,566 | ) | | (1,734 | ) | | (1,734 | ) | | (2,086 | ) | | (4,518 | ) | | (3,388 | ) | | (3,388 | ) | | (4,150 | ) | |
| | | Share of Unconsolidated Joint Ventures | 13,207 |
| | 11,405 |
| | 11,405 |
| | 9,955 |
| | 24,735 |
| | 22,768 |
| | 22,768 |
| | 19,799 |
| |
| | Share of income tax expense: | | | | | | | | | | | | | | | | |
| | | Income tax expense on dispositions of International Plaza, Arizona Mills, and Oyster Bay | | |
|
| |
|
| | (473 | ) | |
|
| |
|
| |
|
| | 9,733 |
| |
| | | Share of other income tax expense | 434 |
| | 688 |
| | 688 |
| | 311 |
| | 736 |
| | 1,526 |
| | 1,526 |
| | 1,010 |
| |
| | | | | | | | | | | | | |
|
| | | | | |
| Less noncontrolling share of income of consolidated joint ventures | (1,630 | ) | | (2,672 | ) | | (2,672 | ) | | (2,252 | ) | | (4,151 | ) | | (5,263 | ) | | (5,263 | ) | | (5,370 | ) | |
| | | | | | | | | | | | | | | | | | | |
| Add EBITDA attributable to outside partners: | | | | | | | | | | | | | | | | |
| | EBITDA attributable to noncontrolling partners in consolidated joint ventures | 5,471 |
| | 4,953 |
| | 4,953 |
| | 5,931 |
| | 11,363 |
| | 10,282 |
| | 10,282 |
| | 12,274 |
| |
| | EBITDA attributable to outside partners in Unconsolidated Joint Ventures | 31,869 |
| | 26,541 |
| | 26,541 |
| | 24,319 |
| | 62,777 |
| | 55,028 |
| | 55,028 |
| | 47,526 |
| |
| | | | | | | | | | | | | | | | | | | |
| EBITDA at 100% | 165,235 |
| | 130,628 |
| | 130,628 |
| | 142,304 |
| | 310,511 |
| | 267,950 |
| | 267,950 |
| | 780,843 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) items excluded from shopping center NOI: | | | | | | | | | | | | | | | | |
| | General and administrative expenses | 11,693 |
| | 12,055 |
| | 12,055 |
| | 11,587 |
| | 23,073 |
| | 23,980 |
| | 23,980 |
| | 23,124 |
| |
| | Management, leasing, and development services, net | (22,302 | ) | (1) | (1,930 | ) | | (1,930 | ) | | (1,269 | ) | | (23,158 | ) | (1) | (3,757 | ) | | (3,757 | ) | | (2,489 | ) | |
| | Straight-line of rents | (2,024 | ) | | (1,378 | ) | | (1,378 | ) | | (1,243 | ) | | (3,138 | ) | | (2,098 | ) | | (2,098 | ) | | (2,287 | ) | |
| | Gain on dispositions |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | (486,620 | ) | |
| | Disposition costs related to the Starwood sale |
| |
| |
| | 441 |
| |
| |
| |
| | 441 |
| |
| | Discontinuation of hedge accounting - MacArthur Center |
|
| |
|
| |
|
| | 5,678 |
| |
|
| |
|
| |
|
| | 5,678 |
| |
| | Gain on sale of peripheral land |
|
| |
|
| |
|
| |
|
| | (403 | ) | |
|
| |
|
| |
|
| |
| | Dividend income | (944 | ) | | (885 | ) | | (885 | ) | | (612 | ) | | (1,888 | ) | | (1,711 | ) | | (1,711 | ) | | (836 | ) | |
| | Interest income | (1,760 | ) | | (553 | ) | | (553 | ) | | (181 | ) | | (2,272 | ) | | (1,219 | ) | | (1,219 | ) | | (308 | ) | |
| | Other nonoperating expense (income) | (832 | ) | | (15 | ) | | (15 | ) | |
|
| | (689 | ) | | 223 |
| | 223 |
| | (754 | ) | |
| | Unallocated operating expenses and other | 12,148 |
| | 8,505 |
| (2) | 5,961 |
| | 5,211 |
| | 22,176 |
| | 17,063 |
| | 10,309 |
| | 8,959 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI - all centers at 100% | 161,214 |
| | 146,427 |
| | 143,883 |
| | 161,916 |
| | 324,212 |
| | 300,431 |
| | 293,677 |
| | 325,751 |
| |
| | | | | | | | | | | | | | | | | |
| Less - NOI of non-comparable centers | (16,371 | ) | (3) | (10,026 | ) | (4) | (5,997 | ) | (5) | (23,505 | ) | (6) | (30,252 | ) | (3) | (20,955 | ) | (4) | (11,152 | ) | (5) | (49,976 | ) | (7) |
| | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers | 144,843 |
| | 136,401 |
| | 137,886 |
| | 138,411 |
| | 293,960 |
| | 279,476 |
| | 282,525 |
| | 275,775 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI - growth % | 6.2 | % | | | | -0.4 | % | | | | 5.2 | % | | | | 2.4 | % | |
|
| |
| | | | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers | 144,843 |
| | 136,401 |
| | 137,886 |
| | 138,411 |
| | 293,960 |
| | 279,476 |
| | 282,525 |
| | 275,775 |
| |
| | | | | | | | | | | | | | | | | |
| Lease cancellation income | (251 | ) | | (310 | ) | | (321 | ) | | (4,146 | ) | | (2,226 | ) | | (4,255 | ) | | (4,403 | ) | | (5,999 | ) | |
| | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers excluding lease cancellation income | 144,592 |
| | 136,091 |
| | 137,565 |
| | 134,265 |
| | 291,734 |
| | 275,221 |
| | 278,122 |
| | 269,776 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI at 100% excluding lease cancellation income - growth % | 6.2 | % | | | | 2.5 | % | | | | 6.0 | % | | | | 3.1 | % | | | |
| | | | | | | | | | | | | | | | | |
| (1 | ) | Amount includes the lump sum payment of $21.7 million received in May 2016 in connection with the termination of the Company's third party leasing agreement for Crystals due to a change in ownership of the center. |
| (2 | ) | In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in other operating expenses of the centers, are now recognized in unallocated operating expenses. For the three and six month periods ended June 30, 2015, the comparative amount of other operating expenses allocated to the centers was $2.5 million and $6.8 million, respectively at 100%. |
| (3 | ) | Includes Beverly Center, CityOn.Xi'an, Country Club Plaza, and The Mall of San Juan. | | | | | | | | |
| (4 | ) | Includes Beverly Center and The Mall of San Juan. | | | | | | | | |
| (5 | ) | Includes The Mall of San Juan and The Mall at University Town Center. | | | | | | | | |
| (6 | ) | Includes the portfolio of centers sold to Starwood and an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio. | | | | | |
| (7 | ) | Includes the portfolio of centers sold to Starwood and Arizona Mills for the approximately one-month period prior to its disposition. Includes an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio. | | | | | |
|
| | | | | | | | | |
| TAUBMAN CENTERS, INC. | | |
| Table 8 - Balance Sheets | |
| As of June 30, 2016 and December 31, 2015 |
| (in thousands of dollars) | | |
| | | | | | As of |
| | | | | | June 30, 2016 | | December 31, 2015 |
| Consolidated Balance Sheet of Taubman Centers, Inc.: | | | | |
| | | | | | | | |
| Assets: | | | | |
| | Properties | | 3,880,067 |
| | 3,713,215 |
|
| | Accumulated depreciation and amortization | | (1,102,503 | ) | | (1,052,027 | ) |
| | | | | | 2,777,564 |
| | 2,661,188 |
|
| | Investment in Unconsolidated Joint Ventures | | 585,273 |
| | 433,911 |
|
| | Cash and cash equivalents | | 83,928 |
| | 206,635 |
|
| | Restricted cash | | 987 |
| | 6,447 |
|
| | Accounts and notes receivable, net | | 45,835 |
| | 54,547 |
|
| | Accounts receivable from related parties | | 1,938 |
| | 2,478 |
|
| | Deferred charges and other assets (1) | | 291,293 |
| | 181,304 |
|
| | | | | | 3,786,818 |
| | 3,546,510 |
|
| Liabilities: | | | | |
| | Notes payable, net (1) | | 3,039,120 |
| | 2,627,088 |
|
| | Accounts payable and accrued liabilities | | 315,701 |
| | 334,525 |
|
| | Distributions in excess of investments in and net income of | |
|
| |
|
|
| | Unconsolidated Joint Ventures | | 468,508 |
| | 464,086 |
|
| | | | 3,823,329 |
| | 3,425,699 |
|
| | | |
| Redeemable noncontrolling interest | | 8,160 |
| | |
| | | |
| Equity: | | | | |
| | Taubman Centers, Inc. Shareowners' Equity: | | | | |
| | | Series B Non-Participating Convertible Preferred Stock | | 25 |
| | 25 |
|
| | | Series J Cumulative Redeemable Preferred Stock | |
|
| |
|
|
| | | Series K Cumulative Redeemable Preferred Stock | |
| |
|
| | | Common Stock | | 604 |
| | 602 |
|
| | | Additional paid-in capital | | 650,306 |
| | 652,146 |
|
| | | Accumulated other comprehensive income (loss) | | (34,896 | ) | | (27,220 | ) |
| | | Dividends in excess of net income | | (525,601 | ) | | (512,746 | ) |
| | | | 90,438 |
| | 112,807 |
|
| | Noncontrolling interests: | | | | |
| | | Noncontrolling interests in consolidated joint ventures | | (157,418 | ) | | (23,569 | ) |
| | | Noncontrolling interests in partnership equity of TRG | | 22,309 |
| | 31,573 |
|
| | | | | (135,109 | ) | | 8,004 |
|
| | | | | (44,671 | ) | | 120,811 |
|
| | | | | 3,786,818 |
| | 3,546,510 |
|
| | | | | | | |
| (1) | The December 31, 2015 balance has been restated in connection with the Company's adoption of Accounting Standards Update (ASU) No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs" which changed the presentation of debt issuance costs on the Consolidated Balance Sheet. In connection with the adoption of ASU No. 2015-03 on January 1, 2016, the Company retrospectively reclassified the December 31, 2015 Consolidated Balance Sheet to move $16.9 million of debt issuance costs out of Deferred Charges and Other Assets and into Notes Payable, Net as a direct deduction of the related debt liabilities. |
| |
| |
| |
Combined Balance Sheet of Unconsolidated Joint Ventures (1): | | | | |
| Assets: | | | | |
| | Properties | | 2,556,015 |
| | 1,628,492 |
|
| | Accumulated depreciation and amortization | | (618,829 | ) | | (589,145 | ) |
| | | | | | 1,937,186 |
| | 1,039,347 |
|
| | Cash and cash equivalents | | 32,626 |
| | 36,047 |
|
| | Accounts and notes receivable, net | | 52,617 |
| | 42,361 |
|
| | Deferred charges and other assets (2) | | 34,710 |
| | 32,660 |
|
| | | | | | 2,057,139 |
| | 1,150,415 |
|
| Liabilities: | | | | |
| | Notes payable, net (2)(3) | | 2,303,763 |
| | 1,994,298 |
|
| | Accounts payable and other liabilities | | 272,342 |
| | 70,539 |
|
| | | | | | 2,576,105 |
| | 2,064,837 |
|
| Accumulated Deficiency in Assets: | | | | |
| | Accumulated deficiency in assets - TRG | | (303,749 | ) | | (507,282 | ) |
| | Accumulated deficiency in assets - Joint Venture Partners | | (194,185 | ) | | (397,196 | ) |
| | Accumulated other comprehensive loss - TRG | | (10,524 | ) | | (4,974 | ) |
| | Accumulated other comprehensive loss - Joint Venture Partners | | (10,508 | ) | | (4,970 | ) |
| | | | | | (518,966 | ) | | (914,422 | ) |
| | | | | | 2,057,139 |
| | 1,150,415 |
|
| | | | | | | | |
| (1) | Unconsolidated Joint Venture amounts exclude the balances of CityOn.Zhengzhou and Starfield Hanam, which were under construction as of June 30, 2016 and December 31, 2015. In addition, the balances as of December 31, 2015 exclude the balances of CityOn.Xi'an, which was still under construction as of December 31, 2015. |
| (2) | The December 31, 2015 balance has been adjusted in connection with the Company's adoption of ASU No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs." |
| (3) | The balances presented exclude centers under construction, therefore the Notes Payable, Net amounts exclude the construction financings outstanding for Starfield Hanam of $151.8 million ($52.1 million at TRG's share) and $52.9 million ($18.1 million at TRG's share) as of June 30, 2016 and December 31, 2015, respectively, and CityOn.Zhengzhou of $43.7 million ($13.9 million at TRG's share) and $44.7 million ($14.2 million at TRG's share) as of June 30, 2016 and December 31, 2015, respectively, and the related debt issuance costs. |
|
| | | | | | |
| 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 the Year Ended |
| | | December 31, 2016 |
| | | | | |
| Adjusted Funds from Operations per common share | 3.50 |
| | 3.65 |
|
| | | | | |
| Crystals lump sum fee for termination of leasing agreement | 0.25 |
| | 0.25 |
|
| | | | | |
| Funds from Operations per common share | 3.75 |
| | 3.90 |
|
| | | | | |
| Real estate depreciation - TRG | (1.90 | ) | | (1.84 | ) |
| | | | | |
| Distributions to 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) | 1.73 |
| | 1.93 |
|
