Exhibit 99
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| | | | |
| 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 Third Quarter Results
- Trailing 12-month Mall Tenant Sales Per Square Foot $802, Up 2.8 Percent
- Fifth Consecutive Quarter of Positive Sales Growth
BLOOMFIELD HILLS, Mich., Nov. 1, 2017 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2017.
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| | | | |
| | September 30, 2017 Three Months Ended (1) | September 30, 2016 Three Months Ended | September 30, 2017 Nine Months Ended (1) | September 30, 2016 Nine Months Ended (2) |
Net income attributable to common shareowners, diluted (in thousands) Growth rate |
$4,370 (76.7)% | $18,794
|
$35,090 (55.2)% | $78,254
|
Net income attributable to common shareowners (EPS) per diluted common share Growth rate |
$0.07
(77.4)% |
$0.31
|
$0.58
(55.0)% | $1.29
|
Funds from Operations (FFO) per diluted common share Growth rate |
$0.77 (18.1)% | $0.94
|
$2.49 (11.7)% | $2.82
|
Adjusted Funds from Operations (Adjusted FFO) per diluted common share Growth rate |
$0.83 (11.7)% | $0.94
|
$2.67 3.9% | $2.57
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(1) Adjusted FFO for the three and nine month periods ended September 30, 2017 excludes a restructuring charge and costs associated with shareowner activism. In addition, Adjusted FFO for the nine months ended September 30, 2017 excludes a charge recognized in connection with the partial write-off of deferred financing costs related to an amendment of the company’s primary line of credit in February 2017. (2) Adjusted FFO for the nine month period ended September 30, 2016 excludes a $21.7 million ($0.25 per share) lump sum termination payment the company received in the second quarter of 2016 for the termination of the company’s leasing services agreement at The Shops at Crystals (Las Vegas, Nev.). |
“Earnings were generally in line with our expectations. Higher rent per square foot and lower general and administrative expenses contributed to our results,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers.
The company’s year-over-year results were impacted by two positive, one-time items that occurred in the third quarter last year, including a post-closing adjustment related to the sale of seven centers in 2014 and a one-time development success fee in Asia. These nonrecurring items contributed $0.08 to FFO and Adjusted FFO per share in the third quarter last year.
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Operating Statistics
Year-to-date total portfolio net operating income (NOI) was up 14.2 percent. For the quarter, total portfolio NOI was up 6.7 percent.
Year-to-date comparable center NOI was up 2.3 percent (up 0.7 percent excluding lease cancellation income). For the quarter, comparable center NOI was down 1.3 percent (down 1.7 percent excluding lease cancellation income). Bad debt expense in the quarter was higher than last year, and impacted the quarterly NOI by 1.4 percent.
The company's 12-month trailing comparable center mall tenant sales per square foot was $802, up 2.8 percent. Comparable center mall tenant sales per square foot increased 1.6 percent in the quarter. Year-to-date, mall tenant sales per square foot were up 2 percent.
The company continues to backfill space created by the elevated level of tenant bankruptcies and store closures that occurred across the industry in late 2016 and in 2017. Leased space in comparable centers was 96.3 percent on September 30, 2017, 2.7 percent greater than in-place occupancy. Leased space in all centers was 95.9 percent, 2.4 percent greater than in-place occupancy and up 1 percent from June 30, 2017.
Ending occupancy in comparable centers was 93.6 percent on September 30, 2017, down 1.4 percent from the prior year. The company expects ending occupancy in comparable centers to reach 96 percent by year-end. Ending occupancy in all centers was 93.5 percent on September 30, 2017, flat to last year, and up 0.8 percent from June 30, 2017.
Average rent per square foot was $60.61 in the quarter, up 0.6 percent from $60.23 in the comparable period last year. Year-to-date, average rent per square foot was up 1 percent.
Trailing 12-month releasing spreads per square foot for the period ended September 30, 2017 were 6.7 percent. As in the second quarter, a small number of leases with average lease terms of less than two-and-a-half years had a significant impact. Without these leases, spreads were over 15 percent.
“As a whole, these operating statistics are solid in an otherwise highly volatile retail environment,” said Mr. Taubman. “We are well positioned with best-in-class assets that continue to enjoy very good demand for space.”
Hurricane Irma
On September 6 and September 9, Hurricane Irma made landfall in Puerto Rico and Florida, respectively. The company’s property in San Juan and five centers in Florida were minimally impacted. Damage was primarily limited to fallen trees, uprooted landscaping and signage. The company’s six centers were closed between four and 11 days following the hurricane, primarily due to power outages. No significant financial impact occurred as a result of Hurricane Irma.
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Hurricane Maria
On September 20, Hurricane Maria made landfall in Puerto Rico. Due to the impact of the hurricane and resulting power outage, The Mall of San Juan was closed for approximately one month. The center has reopened with reduced hours and 55 of approximately 90 tenants are now operating. Restoration efforts for the tenant spaces that were impacted are ongoing, and the company expects more retailers to reopen by the Holiday season. Both Nordstrom and Saks Fifth Avenue sustained significant damage, and the timing of their reopenings is still uncertain. The company maintains substantial insurance to cover hurricane and flood damage, as well as business interruption, with a single deductible of $2 million.
As a result of Hurricane Maria and the substantial impact on the center’s performance for the foreseeable future, The Mall of San Juan has been excluded from the company’s comparable center guidance measures and operating statistics.
2017 Guidance
The company is updating its 2017 EPS and FFO guidance. 2017 EPS is now expected to be in the range of $0.80 to $1.00 per diluted common share, revised from the previous range of $1.03 to $1.23. 2017 FFO is now expected to be in the range of $3.49 to $3.59 per diluted common share, revised from the previous range of $3.53 to $3.63.
The company is reaffirming its previous 2017 Adjusted FFO guidance. Adjusted FFO, which excludes $0.18 per diluted common share of year-to-date adjustments, is expected to be in the range of $3.67 to $3.77 per diluted common share. The company’s 2017 Adjusted FFO is more likely to be in the lower end of the range, as the operations of The Mall of San Juan will be impacted by Hurricane Maria. The company previously assumed the NOI contribution from The Mall of San Juan would be about $3.5 million in the fourth quarter. Due to the substantial impact of the hurricane, the center’s fourth quarter performance will be lower. The Company anticipates that the adverse impact to the operations of the mall will be substantially mitigated by business interruption insurance. However, business interruption insurance proceeds are not likely to be received in the current year.
The company is also reaffirming its previous comparable center NOI guidance. Including lease cancellation income, comparable center NOI is expected to be in the range of 1 to 3 percent for the year. Excluding lease cancellation income, comparable center NOI growth is expected to be in the range of flat to 2 percent.
The company’s guidance does not reflect any future costs that may be incurred related to shareowner activism or certain ongoing restructuring activities.
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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 (Expense), Net |
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| • | Other Debt, Equity and Certain Balance Sheet Information |
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| • | Redevelopments and Disposition |
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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 Thursday, November 2 to discuss these results, business conditions and the company’s outlook for the remainder of 2017. The conference call will be simulcast at www.taubman.com. An online replay will follow shortly after the call and continue for approximately 90 days.
About Taubman
Taubman Centers is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 27 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. 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.
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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; shareholder activism costs and related diversion of management time; 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 September 30, 2017 and 2016 | | | | | | | |
| (in thousands of dollars, except as indicated) | | | | | | |
| | Three Months Ended | | Year to Date |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Net income | 14,251 |
| | 35,184 |
| | 74,673 |
| | 137,257 |
|
| Noncontrolling share of income of consolidated joint ventures | (1,230 | ) | | (1,662 | ) | | (4,279 | ) | | (5,813 | ) |
| Noncontrolling share of income of TRG | (2,298 | ) | | (8,449 | ) | | (16,302 | ) | | (34,435 | ) |
| Distributions to participating securities of TRG | (576 | ) | | (537 | ) | | (1,723 | ) | | (1,573 | ) |
| Preferred stock dividends | (5,784 | ) | | (5,784 | ) | | (17,353 | ) | | (17,353 | ) |
| Net income attributable to Taubman Centers, Inc. common shareowners | 4,363 |
| | 18,752 |
| | 35,016 |
| | 78,083 |
|
| Net income per common share - basic | 0.07 |
| | 0.31 |
| | 0.58 |
| | 1.29 |
|
| Net income per common share - diluted | 0.07 |
| | 0.31 |
| | 0.58 |
| | 1.29 |
|
Beneficial interest in EBITDA - Combined (1) | 115,054 |
| | 121,201 |
| | 362,225 |
| | 357,572 |
|
Adjusted beneficial interest in EBITDA - Combined (1) | 120,305 |
| | 121,201 |
| | 375,474 |
| | 335,870 |
|
Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 66,397 |
| | 81,431 |
| | 215,505 |
| | 244,271 |
|
Funds from Operations attributable to TCO's common shareowners (1) | 47,443 |
| | 57,556 |
| | 152,946 |
| | 172,617 |
|
Funds from Operations per common share - basic (1) | 0.78 |
| | 0.95 |
| | 2.52 |
| | 2.86 |
|
Funds from Operations per common share - diluted (1) | 0.77 |
| | 0.94 |
| | 2.49 |
| | 2.82 |
|
Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 71,648 |
| | 81,431 |
| | 231,981 |
| | 222,569 |
|
Adjusted Funds from Operations attributable to TCO's common shareowners (1) | 50,775 |
| | 57,556 |
| | 164,330 |
| | 157,282 |
|
Adjusted Funds from Operations per common share - basic (1) | 0.84 |
| | 0.95 |
| | 2.71 |
| | 2.61 |
|
Adjusted Funds from Operations per common share - diluted (1) | 0.83 |
| | 0.94 |
| | 2.67 |
| | 2.57 |
|
| Weighted average number of common shares outstanding - basic | 60,710,184 |
| | 60,396,902 |
| | 60,654,026 |
| | 60,341,863 |
|
| Weighted average number of common shares outstanding - diluted | 60,999,151 |
| | 60,831,063 |
| | 61,018,855 |
| | 60,774,789 |
|
| Common shares outstanding at end of period | 60,712,037 |
| | 60,405,097 |
| | | | |
| Weighted average units - Operating Partnership - basic | 85,667,417 |
| | 85,450,379 |
| | 85,622,460 |
| | 85,400,667 |
|
| Weighted average units - Operating Partnership - diluted | 86,827,646 |
| | 86,755,801 |
| | 86,858,551 |
| | 86,704,855 |
|
| Units outstanding at end of period - Operating Partnership | 85,667,471 |
| | 85,451,376 |
| | | | |
| Ownership percentage of the Operating Partnership at end of period | 70.9 | % | | 70.7 | % | | | | |
| Number of owned shopping centers at end of period | 24 |
| | 23 |
| | | | |
| | | | | | | | |
| Operating Statistics: | | | | | | | |
Net Operating Income - total portfolio growth % (1) | 6.7 | % | | 10.6 | % | | 14.2 | % | | 8.8 | % |
Net Operating Income excluding lease cancellation income - growth % (1)(2) | -1.7 | % | | 4.5 | % | | 0.7 | % | | 5.5 | % |
Net Operating Income including lease cancellation income - growth % (1)(2) | -1.3 | % | | 3.6 | % | | 2.3 | % | | 4.6 | % |
Average rent per square foot - Consolidated Businesses (3) | 63.78 |
| | 62.83 |
| | 65.02 |
| | 64.07 |
|
Average rent per square foot - Unconsolidated Joint Ventures (3) | 57.26 |
| | 57.46 |
| | 58.35 |
| | 58.02 |
|
Average rent per square foot - Combined (3) | 60.61 |
| | 60.23 |
| | 61.78 |
| | 61.16 |
|
Average rent per square foot growth (3) | 0.6 | % | | | | 1.0 | % | | |
| Ending occupancy - all centers | 93.5 | % | | 93.6 | % | | 93.5 | % | | 93.6 | % |
Ending occupancy - comparable (3) | 93.6 | % | | 95.0 | % | | 93.6 | % | | 95.0 | % |
| Leased space - all centers | 95.9 | % | | 95.9 | % | | 95.9 | % | | 95.9 | % |
Leased space - comparable (3) | 96.3 | % | | 96.7 | % | | 96.3 | % | | 96.7 | % |
Mall tenant sales - all centers (4) | 1,475,440 |
| | 1,319,794 |
| | 4,349,233 |
| | 3,815,182 |
|
Mall tenant sales - comparable (3)(4) | 1,110,111 |
| | 1,132,953 |
| | 3,368,564 |
| | 3,352,811 |
|
| | | | | | | | |
| | | | | | | | |
| | 12-Months Trailing | | | | |
| | 2017 | | 2016 | | | | |
| Operating Statistics: | | | | | | | |
Mall tenant sales - all centers (4) | 6,307,665 |
| | 5,415,921 |
| | | | |
Mall tenant sales - comparable (3)(4) | 4,936,785 |
| | 4,843,447 |
| | | | |
Sales per square foot (3)(4) | 802 |
| | 780 |
| | | | |
All centers (4): | | | | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 15.0 | % | | 14.6 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 14.2 | % | | 14.1 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 14.6 | % | | 14.4 | % | | | | |
Comparable centers (3)(4): | | | | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses | 14.2 | % | | 14.1 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures | 14.0 | % | | 14.3 | % | | | | |
| Mall tenant occupancy costs as a percentage of tenant sales - Combined | 14.1 | % | | 14.2 | % | | | | |
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| | | |
| (1) | EBITDA represents earnings before interest, income taxes, and depreciation and amortization of the Operating Partnership's consolidated and unconsolidated businesses. 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 EBITDA and beneficial interest in EBITDA provide useful indicators 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. In addition, The Mall of San Juan has been excluded from “comparable center” statistics as a result of Hurricane Maria and the expectation that the center’s performance will be impacted for the foreseeable future. |
| | 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 nine month periods ended September 30, 2017, FFO and EBITDA were adjusted to exclude a restructuring charge and costs incurred associated with shareowner activism. For the nine months ended September 30, 2017, FFO was also adjusted for a charge recognized in connection with the partial write-off of deferred financing costs related to an amendment of the Company's primary unsecured revolving line of credit in February 2017. For the nine months ended September 30, 2017, EBITDA was also adjusted to exclude a gain recognized in connection with the sale of the Valencia Place office tower at Country Club Plaza. For the nine months ended September 30, 2016, FFO and EBITDA were adjusted to exclude the lump sum payment received in May 2016 for 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. |
| | The Company provides its beneficial interest in certain financial information of its Unconsolidated Joint Ventures. This beneficial information is derived as the Company’s ownership interest in the investee multiplied by the specific financial statement item being presented. Investors are cautioned that deriving the Company’s beneficial interest in this manner may not accurately depict the legal and economic implications of holding a non-controlling interest in the investee. |
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| (2) | Statistics exclude non-comparable centers as defined in the respective periods and have not been subsequently restated for changes in the pools of comparable centers. |
| (3) | Statistics exclude non-comparable centers for all periods presented. The trailing 12-month September 30, 2016 statistics have been restated to include comparable centers to 2017. |
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| (4) | Based on reports of sales furnished by mall tenants. Sales per square foot exclude spaces greater than or equal to 10,000 square feet. |
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| TAUBMAN CENTERS, INC. | | | | | | | |
| Table 2 - Income Statement | | | | | | | |
| For the Three Months Ended September 30, 2017 and 2016 | | | | | | | |
| (in thousands of dollars) | | | | | | | |
| | | 2017 | | 2016 |
| | | CONSOLIDATED | | UNCONSOLIDATED | | CONSOLIDATED | | UNCONSOLIDATED |
| | | BUSINESSES | | JOINT VENTURES (1) | | BUSINESSES | | JOINT VENTURES (1) |
| REVENUES: | | | | | | | |
| | Minimum rents | 84,487 |
| | 83,337 |
| | 81,402 |
| | 67,297 |
|
| | Percentage rents | 3,600 |
| | 6,358 |
| | 6,264 |
| | 2,807 |
|
| | Expense recoveries | 51,960 |
| | 48,481 |
| | 52,151 |
| | 39,547 |
|
| | Management, leasing, and development services | 1,147 |
| | | | 1,399 |
| | |
| | Other | 12,028 |
| | 8,230 |
| | 6,805 |
| | 4,283 |
|
| | Total revenues | 153,222 |
| | 146,406 |
| | 148,021 |
|
| 113,934 |
|
| | | | | | | | | |
| EXPENSES: | | | | | | | |
| | Maintenance, taxes, utilities, and promotion | 42,351 |
| | 45,354 |
| | 39,053 |
| | 31,974 |
|
| | Other operating | 23,939 |
| | 11,968 |
| | 18,592 |
| | 6,098 |
|
| | Management, leasing, and development services | 524 |
| | | | 1,268 |
| | |
| | General and administrative | 9,482 |
| | | | 11,578 |
| | |
| | Restructuring charge | 1,751 |
| | | | | | |
| | Costs associated with shareowner activism | 3,500 |
| | | | | | |
| | Interest expense | 27,782 |
| | 32,108 |
| | 22,129 |
| | 26,583 |
|
| | Depreciation and amortization | 45,805 |
| | 32,609 |
| | 40,637 |
| | 27,219 |
|
| | Total expenses | 155,134 |
| | 122,039 |
| | 133,257 |
| | 91,874 |
|
| | | | | | | | | |
| Nonoperating income (expense) | 2,494 |
| | 340 |
| | 4,569 |
| | (594 | ) |
| | | 582 |
| | 24,707 |
| | 19,333 |
| | 21,466 |
|
| Income tax benefit (expense) | (54 | ) | | (336 | ) | | 460 |
| | (315 | ) |
| | | | 24,371 |
| | | | 21,151 |
|
| Equity in income of Unconsolidated Joint Ventures | 13,723 |
| | | | 15,391 |
| | |
| | | | | | | | | |
| Net income | 14,251 |
| | | | 35,184 |
| | |
| Net income attributable to noncontrolling interests: | | | | | | | |
| Noncontrolling share of income of consolidated joint ventures | (1,230 | ) | | | | (1,662 | ) | | |
| Noncontrolling share of income of TRG | (2,298 | ) | | | | (8,449 | ) | | |
| Distributions to participating securities of TRG | (576 | ) | | | | (537 | ) | | |
| Preferred stock dividends | (5,784 | ) | | | | (5,784 | ) | | |
Net income attributable to Taubman Centers, Inc. common
shareowners | 4,363 |
| | | | 18,752 |
| | |
| | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | |
| | EBITDA - 100% | 74,169 |
| | 89,424 |
| | 82,099 |
| | 75,268 |
|
| | EBITDA - outside partners' share | (6,178 | ) | | (42,361 | ) | | (5,873 | ) | | (30,293 | ) |
| | Beneficial interest in EBITDA | 67,991 |
| | 47,063 |
| | 76,226 |
| | 44,975 |
|
| | Beneficial interest expense | (24,816 | ) | | (16,574 | ) | | (19,261 | ) | | (14,274 | ) |
| | Beneficial income tax benefit (expense) - TRG and TCO | (41 | ) | | (120 | ) | | 471 |
| | (315 | ) |
| | Beneficial income tax benefit - TCO | (389 | ) | | | | | | |
| | Non-real estate depreciation | (933 | ) | | | | (607 | ) | | |
| | Preferred dividends and distributions | (5,784 | ) | | | | (5,784 | ) | | |
| | Funds from Operations attributable to partnership unitholders and participating securities of TRG | 36,028 |
| | 30,369 |
| | 51,045 |
| | 30,386 |
|
| | | | | | | | | |
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | | | | | | | |
| | Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% | (2 | ) | | 526 |
| | 438 |
| | 849 |
|
| | Country Club Plaza purchase accounting adjustments - minimum rents increase (decrease) at TRG% | | | (59 | ) | | | | 163 |
|
| | The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 48 |
| | | | 51 |
| | |
| | | | | | | | | |
| (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. |
|
| | | | | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | |
| Table 3 - Income Statement | | | | | | |
| For the Nine Months Ended September 30, 2017 and 2016 | | | | | | |
| (in thousands of dollars) | | | | | | |
| | | | 2017 | | 2016 |
| | | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) | | CONSOLIDATED BUSINESSES | | UNCONSOLIDATED JOINT VENTURES (1) |
| REVENUES: | | | | | | | |
| | Minimum rents | 255,577 |
| | 251,819 |
| | 246,073 |
| | 191,312 |
|
| | Percentage rents | 7,354 |
| | 16,635 |
| | 9,960 |
| | 6,027 |
|
| | Expense recoveries | 154,385 |
| | 137,921 |
| | 147,291 |
| | 112,259 |
|
| | Management, leasing, and development services (2) | 3,439 |
| |
| | 26,323 |
| |
|
| | Other | 36,226 |
| | 22,844 |
| | 16,719 |
| | 9,747 |
|
| | | Total revenues | 456,981 |
| | 429,219 |
| | 446,366 |
| | 319,345 |
|
| | | | | | | | | | |
| EXPENSES: | | | | | | | |
| | Maintenance, taxes, utilities, and promotion | 121,581 |
| | 115,958 |
| | 109,908 |
| | 86,759 |
|
| | Other operating | 65,356 |
| | 34,867 |
| | 57,782 |
| | 14,926 |
|
| | Management, leasing, and development services | 1,698 |
| |
| | 3,034 |
| |
|
| | General and administrative | 29,649 |
| |
| | 34,651 |
| |
|
| | Restructuring charge | 4,063 |
| | | | | | |
| | Costs associated with shareowner activism | 12,000 |
| |
| |
| |
|
| | Interest expense | 80,074 |
| | 97,198 |
| | 61,845 |
| | 72,881 |
|
| | Depreciation and amortization | 122,958 |
| | 97,263 |
| | 100,099 |
| | 63,837 |
|
| | | Total expenses | 437,379 |
| | 345,286 |
| | 367,319 |
| | 238,403 |
|
| | | | | | | | | | |
| Nonoperating income, net | 8,347 |
| | 2,551 |
| | 8,715 |
| | 512 |
|
| | | | 27,949 |
| | 86,484 |
| | 87,762 |
| | 81,454 |
|
| Income tax expense | (375 | ) | | (4,499 | ) | | (284 | ) | | (315 | ) |
| | | | 81,985 |
| | | | |
Gain on disposition, net of tax (3) | | | 3,713 |
| | | | |
| | | | 85,698 |
| | | | 81,139 |
|
| Equity in income of Unconsolidated Joint Ventures | 47,099 |
| | | | 49,779 |
| | |
| | | | | | | | |
| Net income | 74,673 |
| | | | 137,257 |
| | |
| Net income attributable to noncontrolling interests: | | | | | | | |
| | Noncontrolling share of income of consolidated joint ventures | (4,279 | ) | | | | (5,813 | ) | | |
| | Noncontrolling share of income of TRG | (16,302 | ) | | | | (34,435 | ) | | |
| Distributions to participating securities of TRG | (1,723 | ) | | | | (1,573 | ) | | |
| Preferred stock dividends | (17,353 | ) | | | | (17,353 | ) | | |
| Net income attributable to Taubman Centers, Inc. common shareowners | 35,016 |
| | | | 78,083 |
| | |
| | | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | |
| | EBITDA - 100% | 230,981 |
| | 285,389 |
| | 249,706 |
| | 218,172 |
|
| | EBITDA - outside partners' share | (18,880 | ) | | (135,265 | ) | | (17,236 | ) | | (93,070 | ) |
| | Beneficial interest in EBITDA | 212,101 |
| | 150,124 |
| | 232,470 |
| | 125,102 |
|
| | Beneficial share of gain on disposition (3) | | | (2,814 | ) | | | | |
| | Beneficial interest expense | (71,136 | ) | | (50,204 | ) | | (54,459 | ) | | (39,009 | ) |
| | Beneficial income tax expense - TRG and TCO | (288 | ) | | (2,271 | ) | | (265 | ) | | (315 | ) |
| | Beneficial income tax benefit - TCO | (287 | ) | |
| | (19 | ) | |
|
| | Non-real estate depreciation | (2,367 | ) | |
| | (1,881 | ) | |
|
| | Preferred dividends and distributions | (17,353 | ) | |
| | (17,353 | ) | |
|
| | Funds from Operations attributable to partnership unitholders and participating securities of TRG | 120,670 |
| | 94,835 |
| | 158,493 |
| | 85,778 |
|
| | | | | | | | | | |
| STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | | | | | | | |
| | Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% | 433 |
| | 1,227 |
| | 891 |
| | 2,013 |
|
| | Country Club Plaza purchase accounting adjustments - minimum rents increase (decrease) at TRG % | | | (5 | ) | | | | 163 |
|
| | The Mall at Green Hills purchase accounting adjustments - minimum rents increase | 130 |
| | | | 167 |
| | |
| | | | | | | | | | |
| (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 | ) | The 2016 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 | ) | During the nine months ended September 30, 2017, the joint venture that owns the Valencia Place office tower at Country Club Plaza recognized a $4.4 million gain ($2.8 million at TRG's share) and $0.7 million of income tax expense ($0.7 million at TRG's share) in connection with the sale of the office tower. |
|
| | | | | | | | | | | | | | | | | | | |
| 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, 2017 and 2016 |
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | | | | | | | | |
| | | | | | | | | | | | | |
| | | 2017 | | 2016 |
| | | | | Shares | | Per Share | | | | Shares | | Per Share |
| | | Dollars | | /Units | | /Unit | | Dollars | | /Units | | /Unit |
| Net income attributable to TCO common shareowners - basic | 4,363 |
| | 60,710,184 |
| | 0.07 |
| | 18,752 |
| | 60,396,902 |
| | 0.31 |
|
| | | | | | | | | | | | |
| Add impact of share-based compensation | 7 |
| | 288,967 |
| |
| | 42 |
| | 434,161 |
| |
|
| | | | | | | | | | | | |
| Net income attributable to TCO common shareowners - diluted | 4,370 |
| | 60,999,151 |
| | 0.07 |
| | 18,794 |
| | 60,831,063 |
| | 0.31 |
|
| | | | | | | | | | | | | |
| Add depreciation of TCO's additional basis | 1,617 |
| |
| | 0.03 |
| | 1,617 |
| |
| | 0.03 |
|
| Less TCO's additional income tax benefit | (389 | ) | |
| | (0.01 | ) | |
|
| |
| |
|
|
| | | | | | | | | | | | | |
| Net income attributable to TCO common shareowners, | | | | | | | | | | | |
| | excluding step-up depreciation and additional income tax benefit | 5,598 |
| | 60,999,151 |
| | 0.09 |
| | 20,411 |
| | 60,831,063 |
| | 0.34 |
|
| | | | | | | | | | | | | |
| Add noncontrolling share of income of TRG | 2,298 |
| | 24,957,233 |
| |
| | 8,449 |
| | 25,053,476 |
| |
|
| Add distributions to participating securities of TRG | 576 |
| | 871,262 |
| |
| | 537 |
| | 871,262 |
| |
|
| | | | | | | | | | | | | |
| Net income attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 8,472 |
| | 86,827,646 |
| | 0.09 |
| | 29,397 |
| | 86,755,801 |
| | 0.34 |
|
| | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | |
| | Consolidated businesses at 100% | 45,805 |
| |
| | 0.53 |
| | 40,637 |
| |
| | 0.47 |
|
| | Depreciation of TCO's additional basis | (1,617 | ) | |
| | (0.02 | ) | | (1,617 | ) | |
| | (0.02 | ) |
| | Noncontrolling partners in consolidated joint ventures | (1,969 | ) | |
| | (0.02 | ) | | (1,332 | ) | |
| | (0.02 | ) |
| | Share of Unconsolidated Joint Ventures | 16,646 |
| |
| | 0.19 |
| | 14,995 |
| |
| | 0.17 |
|
| | Non-real estate depreciation | (933 | ) | |
| | (0.01 | ) | | (607 | ) | |
| | (0.01 | ) |
| | | | | | | | | | | | | |
| Less impact of share-based compensation | (7 | ) | |
|
| | (0.00 | ) | | (42 | ) | |
|
| | (0.00 | ) |
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 66,397 |
| | 86,827,646 |
| | 0.76 |
| | 81,431 |
| | 86,755,801 |
| | 0.94 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (1) | 70.9 | % | | | | | | 70.7 | % | | | | |
| | | | | | | | | | | | | |
| Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax benefit (1) | 47,054 |
| | | | 0.76 |
| | 57,556 |
| | | | 0.94 |
|
| | | | | | | | | | | | | |
| Add TCO's additional income tax benefit | 389 |
| | | | 0.00 |
| |
| | | |
|
|
| | | | | | | | | | | | | |
Funds from Operations attributable to TCO's common shareowners (1) | 47,443 |
| | | | 0.77 |
| | 57,556 |
| | | | 0.94 |
|
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 66,397 |
| | 86,827,646 |
| | 0.76 |
| | 81,431 |
| | 86,755,801 |
| | 0.94 |
|
| | | | | | | | | | | | | |
| Restructuring charge | 1,751 |
| | | | 0.02 |
| | | | | | |
| Costs associated with shareowner activism | 3,500 |
| | | | 0.04 |
| | | | | | |
| | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 71,648 |
| | 86,827,646 |
| | 0.83 |
| | 81,431 |
| | 86,755,801 |
| | 0.94 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (2) | 70.9 | % | | | | | | 70.7 | % | | | | |
| | | | | | | | | | | | | |
Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 50,775 |
| | | | 0.83 |
| | 57,556 |
| | | | 0.94 |
|
| | | | | | | | | | | | | |
| (1 | ) | For the three months ended September 30, 2017, Funds from Operations attributable to TCO's common shareowners was $46,815 using TCO's diluted average ownership percentage of TRG of 69.9%. For the three months ended September 30, 2016, Funds from Operations attributable to TCO's common shareowners was $56,690 using TCO's diluted average ownership percentage of TRG of 69.6%. |
| |
| (2 | ) | For the three months ended September 30, 2017, Adjusted Funds from Operations attributable to TCO's common shareowners was $50,097 using TCO's diluted average ownership percentage of TRG of 69.9%. For the three months ended September 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $56,690 using TCO's diluted average ownership percentage of TRG of 69.6%. |
|
| | | | | | | | | | | | | | | | | | | |
| 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, 2017 and 2016 |
| (in thousands of dollars except as noted; may not add or recalculate due to rounding) | | | | | | | |
| | | | | | | | | | | | | |
| | | 2017 | | 2016 |
| | | | | Shares | | Per Share | | | | Shares | | Per Share |
| | | Dollars | | /Units | | /Unit | | Dollars | | /Units | | /Unit |
| Net income attributable to TCO common shareowners - basic | 35,016 |
| | 60,654,026 |
| | 0.58 |
| | 78,083 |
| | 60,341,863 |
| | 1.29 |
|
| | | | | | | | | | | | |
| Add impact of share-based compensation | 74 |
| | 364,829 |
| |
| | 171 |
| | 432,926 |
| |
|
| | | | | | | | | | | | |
| Net income attributable to TCO common shareowners - diluted | 35,090 |
| | 61,018,855 |
| | 0.58 |
| | 78,254 |
| | 60,774,789 |
| | 1.29 |
|
| | | | | | | | | | | | | |
| Add depreciation of TCO's additional basis | 4,851 |
| |
| | 0.08 |
| | 4,851 |
| |
| | 0.08 |
|
| Less TCO's additional income tax benefit | (287 | ) | |
| | (0.00 | ) | | (19 | ) | |
| | (0.00 | ) |
| | | | | | | | | | | | | |
| Net income attributable to TCO common shareowners, | | | | | | | | | | | |
| | excluding step-up depreciation and additional income tax benefit | 39,654 |
| | 61,018,855 |
| | 0.65 |
| | 83,086 |
| | 60,774,789 |
| | 1.37 |
|
| | | | | | | | | | | | | |
| Add noncontrolling share of income of TRG | 16,302 |
| | 24,968,434 |
| |
|
| | 34,435 |
| | 25,058,804 |
| |
|
|
| Add distributions to participating securities of TRG | 1,723 |
| | 871,262 |
| |
| | 1,573 |
| | 871,262 |
| |
|
| | | | | | | | | | | | | |
| Net income attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 57,679 |
| | 86,858,551 |
| | 0.66 |
| | 119,094 |
| | 86,704,855 |
| | 1.37 |
|
| | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | |
| | Consolidated businesses at 100% | 122,958 |
| |
| | 1.42 |
| | 100,099 |
| |
| | 1.15 |
|
| | Depreciation of TCO's additional basis | (4,851 | ) | |
| | (0.06 | ) | | (4,851 | ) | |
| | (0.06 | ) |
| | Noncontrolling partners in consolidated joint ventures | (5,576 | ) | |
| | (0.06 | ) | | (4,018 | ) | |
| | (0.05 | ) |
| | Share of Unconsolidated Joint Ventures | 49,819 |
| |
| | 0.57 |
| | 35,999 |
| |
| | 0.42 |
|
| | Non-real estate depreciation | (2,367 | ) | |
| | (0.03 | ) | | (1,881 | ) | |
| | (0.02 | ) |
| | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Less beneficial gain on disposition, net of tax | (2,083 | ) | |
| | (0.00 | ) | |
| |
| |
|
|
| Less impact of share-based compensation | (74 | ) | |
| | (0.00 | ) | | (171 | ) | |
| | (0.00 | ) |
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 215,505 |
| | 86,858,551 |
| | 2.48 |
| | 244,271 |
| | 86,704,855 |
| | 2.82 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (1) | 70.8 | % | | | | | | 70.7 | % | | | | |
| | | | | | | | | | | | | |
| Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax benefit (1) | 152,659 |
| | | | 2.48 |
| | 172,598 |
| |
| | 2.82 |
|
| | | | | | | | | | | | | |
| Add TCO's additional income tax benefit | 287 |
| | | | 0.00 |
| | 19 |
| |
| | 0.00 |
|
| | | | | | | | | | | | | |
Funds from Operations attributable to TCO's common shareowners (1) | 152,946 |
| | | | 2.49 |
| | 172,617 |
| | | | 2.82 |
|
| | | | | | | | | | | | | |
| Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 215,505 |
| | 86,858,551 |
| | 2.48 |
| | 244,271 |
| | 86,704,855 |
| | 2.82 |
|
| | | | | | | | | | | | | |
| Restructuring charge | 4,063 |
| | | | 0.05 |
| | | | | | |
| Costs associated with shareowner activism | 12,000 |
| | | | 0.14 |
| | | | | | |
| Partial write-off of deferred financing costs | 413 |
| | | | 0.00 |
| | | | | | |
| Crystals lump sum payment for termination of leasing agreement | | | | | | | (21,702 | ) | | | | (0.25 | ) |
| | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to partnership unitholders | | | | | | | | | | | |
| | and participating securities of TRG | 231,981 |
| | 86,858,551 |
| | 2.67 |
| | 222,569 |
| | 86,704,855 |
| | 2.57 |
|
| | | | | | | | | | | | | |
TCO's average ownership percentage of TRG - basic (2) | 70.8 | % | | | | | | 70.7 | % | | | | |
| | | | | | | | | | | | | |
| Adjusted Funds from Operations attributable to TCO's common shareowners, | | | | | | | | | | | |
| | excluding additional income tax benefit (2) | 164,330 |
| |
| | 2.67 |
| | 157,263 |
| |
| | 2.57 |
|
| | | | | | | | | | | | | |
| Add TCO's additional income tax benefit |
|
| |
| | | | 19 |
| |
| | 0.00 |
|
| | | | | | | | | | | | | |
Adjusted Funds from Operations attributable to TCO's common shareowners (2) | 164,330 |
| |
| | 2.67 |
| | 157,282 |
| |
| | 2.57 |
|
| | | | | | | | | | | | | |
| (1 | ) | For the nine months ended September 30, 2017, Funds from Operations attributable to TCO's common shareowners was $150,769 using TCO's diluted average ownership percentage of TRG of 69.8%. For the nine months ended September 30, 2016, Funds from Operations attributable to TCO's common shareowners was $170,032 using TCO's diluted average ownership percentage of TRG of 69.6%. |
| |
| (2 | ) | For the nine months ended September 30, 2017, Adjusted Funds from Operations attributable to TCO's common shareowners was $161,987 using TCO's diluted average ownership percentage of TRG of 69.8%. For the nine months ended September 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $154,193 using TCO's diluted average ownership percentage of TRG of 69.6%. |
| |
|
| | | | | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | | | |
| Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA | | | | |
| For the Periods Ended September 30, 2017 and 2016 | | | | |
| (in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) | | | | | | | | |
| | | | | | | | | | | |
| | | | | Three Months Ended | | Year to Date |
| | | | | 2017 | | 2016 | | 2017 | | 2016 |
| Net income | | 14,251 |
| | 35,184 |
| | 74,673 |
| | 137,257 |
|
| | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | |
| | Consolidated businesses at 100% | | 45,805 |
| | 40,637 |
| | 122,958 |
| | 100,099 |
|
| | Noncontrolling partners in consolidated joint ventures | | (1,969 | ) | | (1,332 | ) | | (5,576 | ) | | (4,018 | ) |
| | Share of Unconsolidated Joint Ventures | | 16,646 |
| | 14,995 |
| | 49,819 |
| | 35,999 |
|
| | | | | | | | | | | |
| Add (less) interest expense and income tax expense (benefit): | | | | | | | | |
| | Interest expense: | | | | | | | | |
| | | Consolidated businesses at 100% | | 27,782 |
| | 22,129 |
| | 80,074 |
| | 61,845 |
|
| | | Noncontrolling partners in consolidated joint ventures | | (2,966 | ) | | (2,868 | ) | | (8,938 | ) | | (7,386 | ) |
| | | Share of Unconsolidated Joint Ventures | | 16,574 |
| | 14,274 |
| | 50,204 |
| | 39,009 |
|
| | Share of Income tax expense (benefit): | | | | | | | | |
| | | Consolidated businesses at 100% | | 54 |
| | (471 | ) | | 375 |
| | 265 |
|
| | | Noncontrolling partners in consolidated joint ventures | �� | (13 | ) | | | | (87 | ) | | |
| | | Share of Unconsolidated Joint Ventures | | 120 |
| | 315 |
| | 2,271 |
| | 315 |
|
| | | Share of income tax expense on disposition | |
| | | | 731 |
| | |
| | | | | | | | | | | |
| Less noncontrolling share of income of consolidated joint ventures | | (1,230 | ) | | (1,662 | ) | | (4,279 | ) | | (5,813 | ) |
| | | | | | | | | | | |
| Beneficial interest in EBITDA | | 115,054 |
| | 121,201 |
| | 362,225 |
| | 357,572 |
|
| | | | | | | | | | | |
| TCO's average ownership percentage of TRG - basic | | 70.9 | % | | 70.7 | % | | 70.8 | % | | 70.7 | % |
| | | | | | | | | | | |
| Beneficial interest in EBITDA attributable to TCO | | 81,536 |
| | 85,665 |
| | 256,594 |
| | 252,651 |
|
| | | | | | | | | | | |
| Beneficial interest in EBITDA | | 115,054 |
| | 121,201 |
| | 362,225 |
| | 357,572 |
|
| | | | | | | | | | | |
| Add (less): | | | | | | | | |
| | Restructuring charge | | 1,751 |
| | | | 4,063 |
| | |
| | Costs associated with shareowner activism | | 3,500 |
| | | | 12,000 |
| | |
| | Beneficial share of gain on disposition | | | | | | (2,814 | ) | | |
| | Crystals lump sum payment for termination of leasing agreement | | | |
| | | | (21,702 | ) |
| | | | | | | | | | | |
| Adjusted Beneficial interest in EBITDA | | 120,305 |
| | 121,201 |
| | 375,474 |
| | 335,870 |
|
| | | | | | | | | | | |
| TCO's average ownership percentage of TRG - basic | | 70.9 | % | | 70.7 | % | | 70.8 | % | | 70.7 | % |
| | | | | | | | | | | |
| Adjusted Beneficial interest in EBITDA attributable to TCO | | 85,257 |
| | 85,665 |
| | 265,980 |
| | 237,318 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| TAUBMAN CENTERS, INC. | | | | | | | | | | | | | | | | |
| Table 7 - Reconciliation of Net Income to Net Operating Income (NOI) | | | | | | | | | | | | | |
| For the Periods Ended September 30, 2017, 2016, and 2015 | | | | | | | | | | | | | |
| (in thousands of dollars) | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | Three Months Ended | | Year to Date | | Year to Date | |
| | | | 2017 | | 2016 | | 2016 | | 2015 | | 2017 | | 2016 | | 2016 | | 2015 | |
| Net income | 14,251 |
| | 35,184 |
| | 35,184 |
| | 52,629 |
| | 74,673 |
| | 137,257 |
| | 137,257 |
| | 145,962 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) depreciation and amortization: | | | | | | | | | | | | | | | | |
| | Consolidated businesses at 100% | 45,805 |
| | 40,637 |
| | 40,637 |
| | 27,156 |
| | 122,958 |
| | 100,099 |
| | 100,099 |
| | 77,575 |
| |
| | Noncontrolling partners in consolidated joint ventures | (1,969 | ) | | (1,332 | ) | | (1,332 | ) | | (965 | ) | | (5,576 | ) | | (4,018 | ) | | (4,018 | ) | | (2,596 | ) | |
| | Share of Unconsolidated Joint Ventures | 16,646 |
| | 14,995 |
| | 14,995 |
| | 8,658 |
| | 49,819 |
| | 35,999 |
| | 35,999 |
| | 25,228 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) interest expense (benefit) and income tax expense (benefit): | | | | | | | | | | | | | | | | |
| | Interest expense: | | | | | | | | | | | | | | | | |
| | | Consolidated businesses at 100% | 27,782 |
| | 22,129 |
| | 22,129 |
| | 16,145 |
| | 80,074 |
| | 61,845 |
| | 61,845 |
| | 44,451 |
| |
| | | Noncontrolling partners in consolidated joint ventures | (2,966 | ) | | (2,868 | ) | | (2,868 | ) | | (1,706 | ) | | (8,938 | ) | | (7,386 | ) | | (7,386 | ) | | (5,094 | ) | |
| | | Share of Unconsolidated Joint Ventures | 16,574 |
| | 14,274 |
| | 14,274 |
| | 11,431 |
| | 50,204 |
| | 39,009 |
| | 39,009 |
| | 34,199 |
| |
| | Share of income tax expense (benefit): | | | | | | | | | | | | | | | | |
| | | Consolidated businesses at 100% | 54 |
| | (471 | ) | | (471 | ) | | 584 |
| | 375 |
| | 265 |
| | 265 |
| | 2,110 |
| |
| | | Noncontrolling partners in consolidated joint ventures | (13 | ) | | | | | | | | (87 | ) | | | | | | | |
| | | Share of Unconsolidated Joint Ventures | 120 |
| | 315 |
| | 315 |
| | | | 2,271 |
| | 315 |
| | 315 |
| | | |
| | | Share of income tax expense on disposition | | | | | | | | | 731 |
| | | | | | | |
| | | Income tax benefit on dispositions of International Plaza, Arizona Mills, and Oyster Bay | | | | | | | (437 | ) | | | | | | | | (437 | ) | |
| | | | | | | | | | | | | | | | | | | |
| Less noncontrolling share of income of consolidated joint ventures | (1,230 | ) | | (1,662 | ) | | (1,662 | ) | | (2,780 | ) | | (4,279 | ) | | (5,813 | ) | | (5,813 | ) | | (8,043 | ) | |
| | | | | | | | | | | | | | | | | | | |
| Add EBITDA attributable to outside partners: | | | | | | | | | | | | | | | | |
| | EBITDA attributable to noncontrolling partners in consolidated joint ventures | 6,178 |
| | 5,873 |
| | 5,873 |
| | 5,451 |
| | 18,880 |
| | 17,236 |
| | 17,236 |
| | 15,733 |
| |
| | EBITDA attributable to outside partners in Unconsolidated Joint Ventures | 42,361 |
| | 30,293 |
| | 30,293 |
| | 28,027 |
| | 135,265 |
| | 93,070 |
| | 93,070 |
| | 83,055 |
| |
| | | | | | | | | | | | | | | | | | | |
| EBITDA at 100% | 163,593 |
| | 157,367 |
| | 157,367 |
| | 144,193 |
| | 516,370 |
| | 467,878 |
| | 467,878 |
| | 412,143 |
| |
| | | | | | | | | | | | | | | | | | | |
| Add (less) items excluded from shopping center NOI: | | | | | | | | | | | | | | | | |
| | General and administrative expenses | 9,482 |
| | 11,578 |
| | 11,578 |
| | 8,615 |
| | 29,649 |
| | 34,651 |
| | 34,651 |
| | 32,595 |
| |
| | Management, leasing, and development services, net | (623 | ) | | (131 | ) | | (131 | ) | | (1,809 | ) | | (1,741 | ) | | (23,289 | ) | (1) | (23,289 | ) | (1) | (5,566 | ) | |
| | Restructuring charge | 1,751 |
| | | | | | | | 4,063 |
| | | | | | | |
| | Costs associated with shareowner activism | 3,500 |
| | | | | | | | 12,000 |
| | | | | | | |
| | Straight-line of rents | (1,669 | ) | | (2,574 | ) | | (2,574 | ) | | (1,696 | ) | | (4,837 | ) | | (5,712 | ) | | (5,712 | ) | | (3,794 | ) | |
| | Gain on disposition | | | | | | | | | (4,445 | ) | | | | | | | |
| | Gains on sales of peripheral land | (945 | ) | | (1,425 | ) | | (1,425 | ) | |
|
| | (2,613 | ) | | (1,828 | ) | | (1,828 | ) | |
|
| |
| | Dividend income | (1,062 | ) | | (974 | ) | | (974 | ) | | (915 | ) | | (3,128 | ) | | (2,862 | ) | | (2,862 | ) | | (2,626 | ) | |
| | Interest income | (772 | ) | | (1,907 | ) | | (1,907 | ) | | (377 | ) | | (5,049 | ) | | (4,179 | ) | | (4,179 | ) | | (1,596 | ) | |
| | Other nonoperating expense (income) | (55 | ) | | 331 |
| | 331 |
| | 283 |
| | (108 | ) | | (358 | ) | | (358 | ) | | 506 |
| |
| | Unallocated operating expenses and other | 10,437 |
| | 9,826 |
| | 9,826 |
| | 7,269 |
| | 26,813 |
| | 32,002 |
| | 32,002 |
| | 24,332 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI at 100% - total portfolio | 183,637 |
| | 172,091 |
| | 172,091 |
| | 155,563 |
| | 566,974 |
| | 496,303 |
| | 496,303 |
| | 455,994 |
| |
| | | | | | | | | | | | | | | | | |
| Less NOI of non-comparable centers | (35,500 | ) | (2) | (21,993 | ) | (3) | (21,993 | ) | (3) | (10,669 | ) | (4) | (112,562 | ) | (2) | (52,245 | ) | (3) | (52,245 | ) | (3) | (31,624 | ) | (4) |
| | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers | 148,137 |
| | 150,098 |
| | 150,098 |
| | 144,894 |
| | 454,412 |
| | 444,058 |
| | 444,058 |
| | 424,370 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI - growth % | (1.3 | )% | | | | 3.6 | % | | | | 2.3 | % | | | | 4.6 | % | |
|
| |
| | | | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers | 148,137 |
| | 150,098 |
| | 150,098 |
| | 144,894 |
| | 454,412 |
| | 444,058 |
| | 444,058 |
| | 424,370 |
| |
| | | | | | | | | | | | | | | | | |
| Lease cancellation income | (1,204 | ) | | (649 | ) | | (649 | ) | | (1,943 | ) | | (9,970 | ) | | (2,875 | ) | | (2,875 | ) | | (6,198 | ) | |
| | | | | | | | | | | | | | | | | |
| NOI at 100% - comparable centers excluding lease cancellation income | 146,933 |
| | 149,449 |
| | 149,449 |
| | 142,951 |
| | 444,442 |
| | 441,183 |
| | 441,183 |
| | 418,172 |
| |
| | | | | | | | | | | | | | | | | | | |
| NOI at 100% excluding lease cancellation income - growth % | -1.7 | % | | | | 4.5 | % | | | | 0.7 | % | | | | 5.5 | % | | | |
| | | | | | | | | | | | | | | | | |
| (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 at Crystals due to a change in ownership of the center. |
| (2) | Includes Beverly Center, CityOn.Xi'an, CityOn.Zhengzhou, Country Club Plaza, International Market Place, The Mall of San Juan, and Starfield Hanam. |
| (3) | Includes Beverly Center, CityOn.Xi'an, Country Club Plaza, International Market Place, The Mall of San Juan, Starfield Hanam, and certain post-closing adjustments relating to the portfolio of centers sold to Starwood.
|
| (4) | Includes Beverly Center and The Mall of San Juan. |
| | |
| | |
|
| | | | | | | | | |
| TAUBMAN CENTERS, INC. | | |
| Table 8 - Balance Sheets | |
| As of September 30, 2017 and December 31, 2016 |
| (in thousands of dollars) | | |
| | | | | | As of |
| | | | | | September 30, 2017 | | December 31, 2016 |
| Consolidated Balance Sheet of Taubman Centers, Inc.: | | | | |
| | | | | | | | |
| Assets: | | | | |
| | Properties | | 4,384,058 |
| | 4,173,954 |
|
| | Accumulated depreciation and amortization | | (1,245,581 | ) | | (1,147,390 | ) |
| | | | | | 3,138,477 |
| | 3,026,564 |
|
| | Investment in Unconsolidated Joint Ventures | | 563,012 |
| | 604,808 |
|
| | Cash and cash equivalents | | 37,796 |
| | 40,603 |
|
| | Restricted cash | | 3,660 |
| | 932 |
|
| | Accounts and notes receivable, net | | 68,727 |
| | 60,174 |
|
| | Accounts receivable from related parties | | 2,591 |
| | 2,103 |
|
| | Deferred charges and other assets | | 293,695 |
| | 275,728 |
|
| | | | | | 4,107,958 |
| | 4,010,912 |
|
| Liabilities: | | | | |
| | Notes payable, net | | 3,438,307 |
| | 3,255,512 |
|
| | Accounts payable and accrued liabilities | | 315,136 |
| | 336,536 |
|
| | Distributions in excess of investments in and net income of | |
|
| |
|
|
| | Unconsolidated Joint Ventures | | 503,291 |
| | 480,863 |
|
| | | | 4,256,734 |
| | 4,072,911 |
|
| | | |
| Redeemable noncontrolling interest | | 9,150 |
| | 8,704 |
|
| | | |
| Equity (Deficit): | | | | |
| | 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 | | 607 |
| | 604 |
|
| | | Additional paid-in capital | | 666,836 |
| | 657,281 |
|
| | | Accumulated other comprehensive income (loss) | | (24,051 | ) | | (35,916 | ) |
| | | Dividends in excess of net income | | (628,965 | ) | | (549,914 | ) |
| | | | 14,452 |
| | 72,080 |
|
| | Noncontrolling interests: | | | | |
| | | Noncontrolling interests in consolidated joint ventures | | (159,561 | ) | | (155,919 | ) |
| | | Noncontrolling interests in partnership equity of TRG | | (12,817 | ) | | 13,136 |
|
| | | | | (172,378 | ) | | (142,783 | ) |
| | | | | (157,926 | ) | | (70,703 | ) |
| | | | | 4,107,958 |
| | 4,010,912 |
|
| | | | | | | |
| | | | | | | | |
| | | | | | | | |
Combined Balance Sheet of Unconsolidated Joint Ventures (1): | | | | |
| Assets: | | | | |
| | Properties | | 3,693,394 |
| | 3,371,216 |
|
| | Accumulated depreciation and amortization | | (733,742 | ) | | (661,611 | ) |
| | | | | | 2,959,652 |
| | 2,709,605 |
|
| | Cash and cash equivalents | | 120,860 |
| | 83,882 |
|
| | Accounts and notes receivable, net | | 115,665 |
| | 87,612 |
|
| | Deferred charges and other assets | | 120,857 |
| | 67,167 |
|
| | | | | | 3,317,034 |
| | 2,948,266 |
|
| Liabilities: | | | | |
| | Notes payable, net (2) | | 2,829,847 |
| | 2,706,628 |
|
| | Accounts payable and other liabilities | | 533,800 |
| | 359,814 |
|
| | | | | | 3,363,647 |
| | 3,066,442 |
|
| Accumulated deficiency in assets: | | | | |
| | Accumulated deficiency in assets - TRG | | (85,912 | ) | | (145,679 | ) |
| | Accumulated deficiency in assets - Joint Venture Partners | | 71,652 |
| | 81,217 |
|
| | Accumulated other comprehensive loss - TRG | | (12,490 | ) | | (20,547 | ) |
| | Accumulated other comprehensive loss - Joint Venture Partners | | (19,863 | ) | | (33,167 | ) |
| | | | | | (46,613 | ) | | (118,176 | ) |
| | | | | | 3,317,034 |
| | 2,948,266 |
|
| | | | | | | | |
| (1) | As of December 31, 2016, Unconsolidated Joint Venture amounts exclude the balances of CityOn.Zhengzhou, which opened in March 2017. |
| (2) | The December 31, 2016 balance excludes the construction financing outstanding for CityOn.Zhengzhou of $70.5 million ($34.5 million at TRG's share). |
|
| | | | | | | |
| 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, 2017 |
| | | | | |
| Adjusted Funds from Operations per common share | 3.67 |
| | 3.77 |
|
| | | | |
Restructuring charge (1) | (0.05 | ) | | (0.05 | ) |
| | | | |
Costs associated with shareowner activism (1) | (0.14 | ) | | (0.14 | ) |
| | | | |
| Partial write-off of deferred financing costs | (0.00 | ) | | (0.00 | ) |
| | | | | |
| Funds from Operations per common share | 3.49 |
| | 3.59 |
|
| | | | | |
| Gain on disposition, net of tax | 0.02 |
| | 0.02 |
|
| | | | | |
| Real estate depreciation - TRG | (2.57 | ) | | (2.46 | ) |
| | | | | |
| Distributions to participating securities of TRG | (0.03 | ) | | (0.03 | ) |
| | | | | |
| Depreciation of TCO's additional basis in TRG | (0.11 | ) | | (0.11 | ) |
| | | | | |
| Net income attributable to common shareowners, per common share (EPS) | 0.80 |
| | 1.00 |
|
| | | | | |
| (1 | ) | Amount represents actual expense recognized through the third quarter of 2017. Amount does not include future assumptions of costs to be incurred. |
