TAUBMAN CENTERS INC FORM 8-K. (Current report filing) Filed 10/21/04 for the Period Ending 10/21/04

Transcription

1 TAUBMAN CENTERS INC FORM 8-K (Current reprt filing) Filed 10/21/04 fr the Perid Ending 10/21/04 Address 200 E LONG LAKE RD SUITE 300 P O BOX 200 BLOOMFIELD HILLS, MI Telephne CIK Symbl TCO SIC Cde Real Estate Investment Trusts Industry Real Estate Operatins Sectr Services Fiscal Year 12/31 Cpyright 2013, EDGAR Online, Inc. All Rights Reserved. Distributin and use f this dcument restricted under EDGAR Online, Inc. Terms f Use.

2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date f reprt (earliest event reprted): Octber 21, 2004 (Exact Name f Registrant as Specified in its Charter) Michigan (State f Other Jurisdictin (Cmmissin (I.R.S. Emplyer f Incrpratin) File Number) Identificatin N.) 200 East Lng Lake Rad, Suite 300, Blmfield Hills, Michigan (Address f Principal Executive Office) (Zip Cde) Registrant's Telephne Number, Including Area Cde: (248) Nne (Frmer Name r Frmer Address, if Changed Since Last Reprt) Check the apprpriate bx belw if the Frm 8-K filing is intended t simultaneusly satisfy the filing bligatin f the registrant under any f the fllwing prvisins (See General Instructin A.2. belw): Written cmmunicatins pursuant t Rule 425 under the Securities Act (17 CFR ) Sliciting material pursuant t Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-cmmencement cmmunicatins pursuant t Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-cmmencement cmmunicatins pursuant t Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c)) Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The infrmatin under this captin is furnished by Taubman Centers, Inc. (the "Cmpany") in accrdance with Securities and Exchange Cmmissin Release N This infrmatin shall nt be deemed filed fr purpses f Sectin 18 f the Securities Exchange Act f 1934, as amended (the Exchange Act ), r incrprated by reference in any filing under the Securities Act f 1933, as amended, r the Exchange Act, except as shall be expressly set frth by specific reference in such a filing. On Octber 21, 2004, the Cmpany issued a press release annuncing its results f peratins fr the third quarter ended September 30, A cpy f the press release is attached as Exhibit 99 t this reprt. Item (a) (b) FINANCIAL STATEMENTS AND EXHIBITS. Financial Statements f Businesses Acquired. Nt applicable. Pr Frma applicable infrmatin. Nt applicable.

3 (c) Exhibits Exhibit Exhibit 99 Press Release, dated Octber 21, 2004, entitled Taubman Centers Issues Third Quarter Results. SIGNATURES Pursuant t the requirements f the Securities Exchange Act f 1934, the Registrant has duly caused this reprt t be signed n its behalf by the undersigned hereunt duly authrized. Date: Octber 21, 2004 By: /s/ Lisa A. Payne Lisa A. Payne Executive Vice President and Chief Financial and Administrative Officer EXHIBIT INDEX Exhibit 99 Press Release, dated Octber 21, 2004, entitled Taubman Centers Issues Third Quarter Results.

4 Taubman Centers, Inc. 200 East Lng Lake Rad Blmfield Hills, MI (248) CONTACT: Barbara K. Baker (248) FOR IMMEDIATE RELEASE TAUBMAN CENTERS ISSUES THIRD QUARTER RESULTS EPS up $0.15 versus third quarter 2003 FFO per share up 35.3% Strng Occupancy and Sales Increases Adjusted FFO Per Share Guidance Increases BLOOMFIELD HILLS, Mich., Oct. 21, Taubman Centers, Inc. (NYSE:TCO) tday issued its financial results fr the quarter and year-t-date perids ended September 30, Net Incme (lss) allcable t cmmn sharehlders per diluted cmmn share (EPS) fr the quarter ended September 30, 2004 was $(0.06), up frm $(0.21) during the third quarter f EPS fr the nine mnth perid ended September 30, 2004 was $(0.06) versus $(0.60) fr the nine mnth perid ended September 30, Fr the quarter ended September 30, 2004, diluted Funds frm Operatins (FFO) per share was $0.46, up 35.3 percent frm $0.34 per share fr the quarter ended September 30, Excluding the impact f csts related t the unslicited tender ffer incurred during the third quarter f 2003, FFO per share fr the third quarter was up 12.2 percent. Fr the nine mnths ended September 30, 2004, FFO per diluted share was $1.41, up 38.2 percent frm $1.02 fr the first nine mnths f Excluding the impact f csts incurred during the first nine mnths f 2003 and recveries recrded during the first quarter f 2004 related t the unslicited tender ffer, FFO per diluted share was $1.39 fr the nine mnth perid ended September 30, 2004, up 5.3 percent frm $1.32 fr the first nine mnths f We were pleased with ur results this quarter, which reflected increases in cre rents, cntinued cntributin frm Stny Pint (Richmnd, Va.), and the psitive impact f the recently cmpleted Internatinal Plaza (Tampa, Fla.) acquisitin, said Rbert S. Taubman, chairman, president and chief executive fficer f Taubman Centers. (mre) Taubman Centers/2 Strng Occupancy and Sales Increases Ttal ccupancy fr the prtfli was 86.9 percent at September 30, 2004, up 1.7 percent sequentially frm the secnd quarter and 1.7 percent frm September 30, Leased space at September 30, 2004 was 89.2 percent, up 0.8 percent frm September 30, Including temprary tenants, ccupancy was 90.0 percent at September 30, 2004, up frm 87.7 percent n September 30, Our fcus n getting stres pen has prduced results, said Mr. Taubman. We are clearly n track t exceed ur ccupancy gals by year end. Average rent per square ft was $41.48 fr the quarter in the cnslidated prtfli versus $40.88 fr the third quarter f Average rent fr the quarter in the uncnslidated jint ventures was $42.52 versus $42.40 fr the third quarter f Sales increases at Taubman prperties cntinue t lead the industry. Mall tenant sales per square ft increased 6.0 percent fr the quarter and 8.9 percent fr the nine mnth perid ended September 30. Sales grwth cntinued t be strng ntwithstanding the impact f the fur hurricanes that hit Flrida during the quarter, said Mr. Taubman. This bdes well fr a slid hliday perfrmance. Saks Opens at Willw Bend; Waterside Expansin Annunced

5 On September 16, Saks Fifth Avenue pened as planned at The Shps at Willw Bend (Plan, Texas), putting this center in the exclusive grup f nly 13 ther prperties in the natin with the pwerful anchr cmbinatin f Saks and Neiman Marcus. Sales grwth at Willw Bend has been strng all year, and the pening f Saks will further benefit the center, said Mr. Taubman. An expansin and renvatin will begin sn at Waterside Shps at Pelican Bay (Naples, Fla.), a center in which the cmpany purchased a jint venture interest in December We expect t add abut 30 new upscale retail shps and restaurants, said Mr. Taubman. With the additin f stres like Tiffany, this renvatin will psitin Waterside Shps as the exclusive Naples destinatin fr luxury gds. The prject will be cmpleted in Octber (mre) Taubman Centers/3 Revlving Credit Facility Increased, Brrwing Rate Reduced The cmpany cntinues t take advantage f the favrable financing envirnment fr high quality real estate, said Lisa A. Payne, Taubman executive vice president, chief financial and administrative fficer. We recently entered int a new $350 millin 40-mnth secured credit facility, which carries a rate f LIBOR plus 80 basis pints. This was an increase f $75 millin f brrwing capacity and a reductin f 10 basis pints frm ur previus revlving credit. Twelve banks participated and it was versubscribed. This facility cntinues t prvide Taubman with a cst-effective financing vehicle cmpetitive with any f ur peers t help fund future grwth initiatives. Transitin Date Annunced fr Nine Third-party Managed Centers As previusly annunced, n Octber 15 The Mills Crpratin (NYSE:MLS) finalized its acquisitin f 50 percent interests in nine f General Mtrs Pensin Trusts (GMPT) shpping centers. This cmpletes the recapitalizatin f GMPT s mall prtfli, annunced in April f this year. As a result Taubman Centers annunced that it had reached an agreement with GMPT t cease management f these centers. The transitin will ccur n Nvember 1, The cmpany expects t take a ne-time rganizatinal charge f $6 millin during the furth quarter f 2004 relating t the terminatin f these cntracts. Excluding the ne time rganizatinal charge, the impact n 2004 FFO and Net Incme is nt expected t be material. The transitin will reduce 2005 FFO and Net Incme by apprximately $4 millin. Adjusted FFO Guidance Increases The cmpany is increasing its 2004 Adjusted FFO per diluted share utlk t be in the range f $1.93 t $1.94. Adjusted FFO excludes ne-time rganizatinal csts. Including these csts, 2004 FFO per diluted share is expected t be in the range f $1.86 t $1.87. Net Incme (lss) allcable t cmmn sharehlders fr the year is expected t be in the range f $(0.03) t $0.04 per share excluding ne-time rganizatinal charges. Including these csts Net Incme (lss) allcable t cmmn sharehlders is expected t be in the range f $(0.15) t $(0.08) per share. (mre) Taubman Centers/4 Supplemental Investr Infrmatin Available The cmpany prvides supplemental investr infrmatin cincident with its earnings annuncements. It is available nline at under Investr Relatins. This packet includes the fllwing infrmatin: Incme Statements Recnciliatins f Earnings Measures t Net Incme Changes in Funds frm Operatins and Earnings Per Share Cmpnents f Other Incme Balance Sheets Debt Summary Other Debt Infrmatin Cnstructin and Recent Center Openings

6 Capital Spending Recent Acquisitins and Divestitures Operatinal Statistics Owned Centers Majr Tenants in Owned Prtfli Anchrs in Owned Prtfli Investr Cnference Call The cmpany will prvide an nline Web simulcast and rebradcast f its 2004 third quarter earnings release cnference call in which the cmpany will review the results fr the quarter, prgress n its develpment and financing plans. The live bradcast f the cnference call will be available nline at under Investr Relatins, and n Octber 22 beginning at 11:00 a.m. EST. The nline replay will fllw shrtly after the call and cntinue fr 90 days. Taubman Centers, Inc., a real estate investment trust, wns, develps, acquires and perates reginal shpping centers natinally. Taubman Centers currently wns and/r manages 31 urban and suburban reginal and super reginal shpping centers in 13 states. In additin, Nrthlake Mall (Charltte, N.C.) is under cnstructin and will pen September 15, Taubman Centers is headquartered in Blmfield Hills, Mich. This press release cntains frward-lking statements within the meaning f the Securities Act f 1933 as amended. These statements reflect management s current views with respect t future events and financial perfrmance. Actual results may differ materially frm thse expected because f varius risks and uncertainties, including, but nt limited t changes in general ecnmic and real estate cnditins, changes in accunting rules, changes in the interest rate envirnment and availability f financing, and adverse changes in the retail industry. Other risks and uncertainties are discussed in the Cmpany s filings with the Securities and Exchange Cmmissin including its mst recent Annual Reprt n Frm 10-K. Taubman Centers/5 Fr the Three and Nine Mnths Ended September 30, 2004 and 2003 (in thusands f dllars, except as indicated) Three Mnths Ended September 30 Nine Mnths Ended September Incme befre discntinued peratins and minrity and preferred interests 12,623 5,148 43,257 14,787 Discntinued peratins (1) Minrity interest in cnslidated jint ventures Minrity share f incme f TRG (2) (3,103) (287) (11,386) (529) Distributins in excess f earnings allcable t minrity partners (2) (5,752) (8,773) (15,168) (25,827) TRG preferred distributins (2,865) (2,250) (7,604) (6,750) Net incme (lss) 1,260 (6,054) 9,424 (18,003) Preferred dividends (4,150) (4,150) (12,450) (12,450) Net incme (lss) allcable t cmmn sharewners (2,890) (10,204) (3,026) (30,453) Incme (lss) frm cntinuing peratins per cmmn share - basic and diluted (0.06) (0.21) (0.07) (0.60) Net incme (lss) per cmmn share - basic and diluted (0.06) (0.21) (0.06) (0.60) Beneficial interest in EBITDA - cnslidated businesses (3) 53,289 41, , ,026 Beneficial interest in EBITDA - uncnslidated jint ventures (3) 24,769 26,923 79,913 84,352 Funds frm Operatins - Operating Partnership (3) 37,381 28, ,129 86,715 Funds frm Operatins allcable t TCO (3) 22,478 17,156 70,410 52,595

7 Funds frm Operatins per cmmn share - basic (3) Funds frm Operatins per cmmn share - diluted (3) Weighted average number f cmmn shares utstanding 48,159,799 49,348,000 49,145,132 50,562,963 Cmmn shares utstanding at end f perid 48,538,366 49,363,273 48,538,366 49,363,273 Weighted average units - Operating Partnership - basic 80,088,564 83,300,619 81,084,439 83,474,802 Weighted average units - Operating Partnership - diluted 81,479,087 84,756,882 82,524,845 84,877,978 Units utstanding at end f perid - Operating Partnership 80,510,645 83,412,357 80,510,645 83,412,357 Ownership percentage f the Operating Partnership at end f perid 60.3 % 59.2 % 60.3 % 59.2 % Number f wned shpping centers at end f perid Operating Statistics: Mall tenant sales 829, ,154 2,459,866 2,245,785 Mall tenant sales - cmparable centers (4) 800, ,160 2,351,525 2,169,362 Ending ccupancy 86.9 % 85.2 % 86.9 % 85.2 % Ending ccupancy - cmparable centers (4) 86.5 % 85.2 % 86.5 % 85.2 % Average ccupancy 86.2 % 85.4 % 85.4 % 85.5 % Average ccupancy - cmparable centers (4) 85.8 % 85.3 % 85.0 % 85.4 % Leased space at end f perid (5) 89.2 % 88.4 % 89.2 % 88.4 % Leased space at end f perid - cmparable centers (4)(5) 88.8 % 88.1 % 88.8 % 88.1 % Mall tenant ccupancy csts as a percentage f tenant sales-cnslidated businesses (6) 16.5 % 17.0 % 16.9 % 17.8 % Mall tenant ccupancy csts as a percentage f tenant salesuncnslidated jint ventures (6) 15.5 % 16.2 % 15.6 % 17.2 % Rent per square ft - cnslidated businesses (4) $41.48 $40.88 $41.15 $40.11 Rent per square ft - uncnslidated jint ventures (4) $42.52 $42.40 $42.73 $42.56 Taubman Centers/6 (1) In December 2003, the Cmpany sld its interest in Biltmre Fashin Park t The Macerich Cmpany. The results f Biltmre are presented as discntinued peratins in During 2004, a $0.3 millin adjustment t the gain n the dispsitin f the center was recgnized. (2) Because the Operating Partnership s balance f net equity allcable t partnership unithlders is less than zer, the incme allcated t minrity partners during the three and nine mnths ended September 30, 2004 and 2003 is equal t the minrity partners share f distributins. The Cmpany s net equity allcable t partnership unithlders is less than zer due t accumulated distributins in excess f net incme and nt as a result f perating lsses. (3) Beneficial Interest in EBITDA represents the Operating Partnership s share f the earnings befre interest and depreciatin and amrtizatin, excluding gains n sales f depreciated perating prperties f its cnslidated and uncnslidated businesses. The Cmpany believes Beneficial Interest in EBITDA prvides a useful indicatr f perating perfrmance, as it is custmary in the real estate and shpping center business t evaluate the perfrmance f prperties n a basis unaffected by capital structure. In additin, the Cmpany uses a cmparable measure t EBITDA, net perating incme (revenues less perating expenses, excluding depreciatin and amrtizatin, NOI ), as an alternative measure t evaluate the perating perfrmance f centers, bth n an individual and stabilized prtfli basis. The Natinal Assciatin f Real Estate Investment Trusts (NAREIT) defines Funds frm Operatins (FFO) as net incme (lss) (cmputed in accrdance with Generally Accepted Accunting Principles (GAAP)), excluding gains (r lsses) frm extrardinary items and sales f prperties, plus real estate related depreciatin and after adjustments fr uncnslidated partnerships and jint ventures. The Cmpany believes that FFO is a useful supplemental measure f perating perfrmance fr REITs. Histrical cst accunting fr real estate assets implicitly assumes that the value f real estate assets diminishes predictably ver time. Since real estate values instead have histrically risen r fallen with market cnditins, the Cmpany and mst industry investrs and analysts have cnsidered presentatins f perating results that exclude histrical cst depreciatin t be useful in evaluating the perating perfrmance f REITs. FFO is primarily used by the Cmpany in measuring perfrmance and in frmulating crprate gals and cmpensatin. FFO as presented by the Cmpany is nt necessarily cmparable t the FFO f ther REITs due t the fact that nt all REITs use the NAREIT definitin. FFO shuld nt be cnsidered an alternative t net incme as an indicatr f the Cmpany s perating perfrmance. Additinally, FFO des nt represent cash flws frm perating, investing r financing activities as defined by GAAP. Supplementally, the Cmpany als disclses FFO per diluted share fr all perids presented excluding csts related t the unslicited tender ffer because f the significance and singular nature f these csts. This was the nly hstile takever attempt against the Cmpany in its histry and the csts t resist this attempt were clearly nt a part f the Cmpany s nrmal perating results. The Cmpany believes that given the significance f the csts (the charge reduced FFO per diluted share fr the three and nine mnths ended September 30, 2003 by 17% and 23%, respectively) it is essential t a reader s

8 understanding f the Cmpany s results f peratins t emphasize the impact n the Cmpany s earnings measures. TRG s Beneficial Interest in EBITDA and FFO fr the nine mnths ended September 30, 2004 include insurance recveries related t the unslicited tender ffer f $1.0 millin. Fr the three and nine mnths ended September 30, 2003, csts related t the unslicited tender ffer were $6.0 millin and $25.1 millin, respectively. (4) Excludes Biltmre Fashin Park, Stny Pint Fashin Park, and Waterside Shps at Pelican Bay. Waterside Shps at Pelican Bay is managed by the Frbes Cmpany, the Cmpany s jint venture partner in the prject. (5) Leased space cmprises bth ccupied space and space that is leased but nt yet ccupied. (6) Mall tenant ccupancy csts are defined as the sum f minimum rents, percentage rents and expense recveries, excluding utilities. Taubman Centers/7 Incme Statement Fr the Quarters Ended September 30, 2004 and 2003 (in thusands f dllars) UNCONSOLIDATED UNCONSOLIDATED CONSOLIDATED BUSINESSES JOINT VENTURES (1) CONSOLIDATED BUSINESSES JOINT VENTURES (1) REVENUES: Minimum rents 61,865 45,722 51,371 49,345 Percentage rents 1, Expense recveries 35,006 21,277 29,939 23,694 Management, leasing and develpment 6,110 5,087 Other 6,741 2,041 5,318 2,102 Ttal revenues 110,901 69,446 92,666 75,714 OPERATING EXPENSES: Recverable expenses 32,845 18,686 28,409 20,921 Other perating 9,509 5,678 8,231 5,154 Csts related t unslicited tender ffer, net f recveries 6,046 Management, leasing and develpment 4,890 4,326 General and administrative 7,604 5,837 Interest expense 24,652 17,351 20,562 21,077 Depreciatin and amrtizatin 27,069 10,816 22,251 13,027 Ttal perating expenses 106,569 52,531 95,662 60,179 4,332 16,915 (2,996 ) 15,535 Equity in incme f Uncnslidated Jint Ventures 8,291 8,144 Incme befre discntinued peratins and minrity and preferred interests 12,623 5,148 Discntinued peratins (2) : Net gain n dispsitin f interest in center 136 EBITDA 2,399 Interest expense (1,540) Depreciatin and amrtizatin (804)

9 Minrity and preferred interests: TRG preferred distributins (2,865) (2,250) Minrity share f cnslidated jint ventures Minrity share f incme f TRG (3,103) (287) Distributins in excess f minrity share f incme (5,752) (8,773) Net incme (lss) 1,260 (6,054) Series A preferred dividends (4,150) (4,150) Net incme (lss) allcable t cmmn sharewners (2,890 ) (10,204 ) SUPPLEMENTAL INFORMATION: EBITDA - 100% 56,053 45,082 42,216 49,639 EBITDA - utside partners' share (2,764) (20,313) (362) (22,716) Beneficial interest in EBITDA 53,289 24,769 41,854 26,923 Beneficial interest expense (23,386) (9,641) (21,788) (11,032) Nn-real estate depreciatin (635) (598) Preferred dividends and distributins (7,015) (6,400) Funds frm Operatins cntributin 22,253 15,128 13,068 15,891 Net straightline adjustments t rental revenue and grund rent expense at TRG % 1, (1) With the exceptin f the Supplemental Infrmatin, amunts include 100% f the Uncnslidated Jint Ventures. Amunts are net f intercmpany transactins. The Uncnslidated Jint Ventures are presented at 100% in rder t allw fr measurement f their perfrmance as a whle, withut regard t the Cmpany s wnership interest. In its cnslidated financial statements, the Cmpany accunts fr its investments in the Uncnslidated Jint Ventures under the equity methd. The results f Internatinal Plaza are presented within the Cnslidated Businesses fr perids beginning July 1, 2004, as a result f the Cmpany s acquisitin f a cntrlling interest in the center. Results f Internatinal Plaza prir t the acquisitin date are included within the Uncnslidated Jint Ventures. (2) Discntinued peratins includes the results f Biltmre Fashin Park. During the three mnths ended September 30, 2004, a $0.1 millin adjustment t the gain n dispsitin f Biltmre was recgnized. Taubman Centers/8 Incme Statement Fr the Year t Date Perids Ended September 30, 2004 and 2003 (in thusands f dllars) UNCONSOLIDATED UNCONSOLIDATED CONSOLIDATED BUSINESSES JOINT VENTURES (1) CONSOLIDATED BUSINESSES JOINT VENTURES (1) REVENUES: Minimum rents 169, , , ,381 Percentage rents 2,282 2,690 2,440 1,875 Expense recveries 98,996 73,663 93,440 76,248 Management, leasing and develpment 16,339 15,450 Other 24,042 6,260 21,792 10,431 Ttal revenues 311, , , ,935 OPERATING EXPENSES: Recverable expenses 91,304 62,788 84,114 64,477

10 Other perating 26,344 16,099 26,616 15,331 Csts related t unslicited tender ffer, net f recveries (1,044) 25,058 Management, leasing and develpment 14,671 14,387 General and administrative 19,384 18,074 Interest expense 70,377 56,937 62,083 61,733 Depreciatin and amrtizatin 73,540 39,334 65,596 41,266 Ttal perating expenses 294, , , ,807 16,594 53,943 (12,042 ) 52,128 Equity in incme f Uncnslidated Jint Ventures 26,663 26,829 Incme befre discntinued peratins and minrity and preferred interests 43,257 14,787 Discntinued peratins (2) : Net gain n dispsitin f interest in center 289 EBITDA 7,998 Interest expense (4,598) Depreciatin and amrtizatin (3,227) Minrity and preferred interests: TRG preferred distributins (7,604) (6,750) Minrity share f cnslidated jint ventures Minrity share f incme f TRG (11,386) (529) Distributins in excess f minrity share f incme (15,168) (25,827) Net incme (lss) 9,424 (18,003) Series A preferred dividends (12,450) (12,450) Net incme (lss) allcable t cmmn sharewners (3,026 ) (30,453 ) SUPPLEMENTAL INFORMATION: EBITDA - 100% 160, , , ,127 EBITDA - utside partners' share (3,377) (70,301) (3,609) (70,775) Beneficial interest in EBITDA 157,134 79, ,026 84,352 Beneficial interest expense (68,598) (30,402) (64,261) (32,325) Nn-real estate depreciatin (1,864) (1,877) Preferred dividends and distributins (20,054) (19,200) Funds frm Operatins cntributin 66,618 49,511 34,688 52,027 Net straightline adjustments t rental revenue and grund rent expense at TRG % 1, , (1) With the exceptin f the Supplemental Infrmatin, amunts include 100% f the Uncnslidated Jint Ventures. Amunts are net f intercmpany transactins. The Uncnslidated Jint Ventures are presented at 100% in rder t allw fr measurement f their perfrmance as a whle, withut regard t the Cmpany s wnership interest. In its cnslidated financial statements, the Cmpany accunts fr its investments in the Uncnslidated Jint Ventures under the equity methd. The results f Internatinal Plaza are presented within the Cnslidated Businesses fr perids beginning July 1, 2004, as a result f the Cmpany s acquisitin f a cntrlling interest in the center. Results f Internatinal Plaza prir t the acquisitin date are included within the Uncnslidated Jint Ventures. (2) Discntinued peratins includes the results f Biltmre Fashin Park. During the nine mnths ended September 30, 2004, a $0.3 millin adjustment t the gain n dispsitin f Biltmre was recgnized. Taubman Centers/9 Recnciliatin f Net Incme (Lss) t Funds frm Operatins Fr the Perids Ended September 30, 2004 and 2003

11 (in thusands f dllars) Three Mnths Ended Year t Date Net incme (lss) allcable t cmmn sharewners (2,890 ) (10,204 ) (3,026 ) (30,453 ) Add (less) depreciatin and gain n dispsitin f prperty: Gain n dispsitin f interest in center (136) (289) Depreciatin and amrtizatin: Cnslidated businesses at 100% 27,069 22,251 73,540 65,596 Minrity partners in cnslidated jint ventures (1,719) (101) (1,634) (1,332) Discntinued peratins 804 3,227 Share f uncnslidated jint ventures 6,837 7,747 22,848 25,198 Nn-real estate depreciatin (635) (598) (1,864) (1,877) Add minrity interests in TRG: Minrity share f incme f TRG 3, , Distributins in excess f minrity share f incme f TRG 5,752 8,773 15,168 25,827 Funds frm Operatins - TRG (1) 37,381 28, ,129 86,715 Funds frm Operatins - TCO (1) 22,478 17,156 70,410 52,595 (1) TRG s FFO fr the nine mnths ended September 30, 2004 includes insurance recveries related t the unslicited tender ffer f $1.0 millin. TRG s FFO fr the three and nine mnths ended September 30, 2003 includes csts f $6.0 millin and $25.1 millin, respectively, incurred in cnnectin with the unslicited tender ffer. TCO s share f TRG s FFO is based n an average wnership f 60% and 59% during the three mnths ended September 30, 2004 and 2003, respectively, and 61% during the nine mnths ended September 30, 2004 and Taubman Centers/10 Recnciliatin f Net Incme (Lss) t Beneficial Interest in EBITDA Fr the Perids Ended September 30, 2004 and 2003 (in thusands f dllars) Three Mnths Ended Year t Date Net incme (lss) allcable t cmmn sharewners (2,890 ) (10,204 ) (3,026 ) (30,453 ) Add (less) depreciatin and gain n dispsitin f prperty: Gain n dispsitin f interest in center (136) (289) Depreciatin and amrtizatin: Cnslidated businesses at 100% 27,069 22,251 73,540 65,596 Minrity partners in cnslidated jint ventures (1,719) (101) (1,634) (1,332) Discntinued peratins 804 3,227 Share f uncnslidated jint ventures 6,837 7,747 22,848 25,198 Add minrity interests in TRG: Minrity share f incme f TRG 3, , Distributins in excess f minrity share f incme f TRG 5,752 8,773 15,168 25,827 Add (less) preferred interests and interest expense: Preferred dividends and distributins 7,015 6,400 20,054 19,200 Interest expense fr all businesses in cntinuing peratins 42,003 41, , ,816 Interest expense allcable t minrity partners in cnslidated

12 jint ventures (1,266) (314) (1,779) (2,420) Interest expense f discntinued peratins 1,540 4,598 Interest expense allcable t utside partners in uncnslidated jint ventures (7,710) (10,045) (26,535) (29,408) Beneficial Interest in EBITDA - TRG (1) 78,058 68, , ,378 (1) TRG s Beneficial Interest in EBITDA fr the nine mnths ended September 30, 2004 includes insurance recveries related t the unslicited tender ffer f $1.0 millin. TRG s Beneficial Interest in EBITDA fr the three and nine mnths ended September 30, 2003 includes csts f $6.0 millin and $25.1 millin, respectively, incurred in cnnectin with the unslicited tender ffer. Taubman Centers/11 Balance Sheets As f September 30, 2004 and December 31, 2003 (in thusands f dllars) As f Cnslidated Balance Sheet f Taubman Centers, Inc.: September 30, 2004 December 31, 2003 Assets: Prperties 2,906,363 2,519,922 Accumulated depreciatin and amrtizatin (539,720) (450,515) 2,366,643 2,069,407 Investment in Uncnslidated Jint Ventures 22,629 6,093 Cash and cash equivalents 27,288 30,403 Accunts and ntes receivable, net 29,979 32,592 Accunts and ntes receivable frm related parties 1,784 1,679 Deferred charges and ther assets 55,513 46,796 2,503,836 2,186,970 Liabilities: Ntes payable 1,892,925 1,495,777 Accunts payable and accrued liabilities 224, ,938 Dividends and distributins payable 13,105 13,481 2,130,276 1,768,196 Preferred Equity f TRG 126,492 97,275 Sharewners' Equity: Series A Cumulative Redeemable Preferred Stck Series B Nn-Participating Cnvertible Preferred Stck Cmmn Stck Additinal paid-in capital 632, ,362 Accumulated ther cmprehensive incme (lss) (12,648) (12,593) Dividends in excess f net incme (373,595) (330,879) 247, ,499 2,503,836 2,186,970

13 Cmbined Balance Sheet f Uncnslidated Jint Ventures (1) : Assets: Prperties 1,072,956 1,250,964 Accumulated depreciatin and amrtizatin (354,578) (331,321) 718, ,643 Cash and cash equivalents 15,835 28,448 Accunts and ntes receivable 13,328 16,504 Deferred charges and ther assets 30,279 29, , ,121 Liabilities: Ntes payable 1,008,624 1,345,824 Accunts payable and ther liabilities 45,784 61,614 1,054,408 1,407,438 Accumulated Deficiency in Assets: Accumulated deficiency in assets - TRG (176,215) (228,264) Accumulated deficiency in assets - Jint Venture Partners (96,686) (181,009) Accumulated ther cmprehensive incme (lss) - TRG (2,911) (3,192) Accumulated ther cmprehensive incme (lss) - Jint Venture Partners (776) (852) (276,588 ) (413,317 ) 777, ,121 (1) 2003 amunts exclude Waterside Shps at Pelican Bay, in which TRG acquired a 25% interest in December Effective July 1, 2004, amunts exclude Internatinal Plaza, which the Cmpany began cnslidating upn the acquisitin f a cntrlling interest in the center. Taubman Centers/ Annual Outlk (all dllar amunts per cmmn share n a diluted basis; amunts may nt add due t runding) Range fr Year Ended December 31, 2004 Organizatinal (excluding rganizatinal charge) Charge Range fr Year Ended December 31, 2004 (including rganizatinal charge) Guidance fr Funds frm Operatins per cmmn share $ 1.93 $ 1.94 $ (0.07) $ 1.86 $ 1.87 Real estate depreciatin - TRG (1.43 ) (1.39 ) (1.43 ) (1.39 ) Depreciatin f TCO's additinal basis in TRG (0.15 ) (0.15 ) (0.15 ) (0.15 ) Distributins in excess f earnings allcable t minrity interest (0.39) (0.35) (0.04) (0.43) (0.40) Guidance fr net incme (lss) allcable t cmmn sharehlders, per cmmn share $ (0.03) $ 0.04 $ (0.12) $ (0.15) $ (0.08)

14 The Cmpany is prviding earnings related guidance that includes Funds frm Operatins and Earnings per Share amunts adjusted fr an anticipated restructuring charge. The Cmpany believes that these adjusted measures are useful supplemental infrmatin abut future perating perfrmance because f the significance and singular nature f the restructuring csts. The Cmpany believes that given the significance f the csts (the charge is anticipated t reduce EPS and FFO per diluted share fr the year by a clearly material amunt), it is essential t a reader s understanding f the Cmpany s earnings guidance t emphasize the impact f the restructuring. The supplemental measures are nly being prvided in the cntext f frward-lking statements that update previus earnings guidance that is nw clearly impacted by the restructuring charge. The adjusted measures are nt and shuld nt be cnsidered alternatives t net incme r cash flws frm perating, investing r financing activities as defined by GAAP.