- Net Income Down 18.8 Percent, Primarily
Due to Higher Depreciation Expense
- Comparable Center Net Operating Income
(NOI), Excluding Lease Cancellation Income, Up 2.3 Percent
- Beneficial Interest in Total Portfolio
NOI, Excluding Lease Cancellation Income Up 5.7 Percent
- Sales per Square Foot, Occupancy,
Leased Space and Average Rents All Up in Comparable Centers
- Acquired 48.5 Percent Interest in The
Gardens Mall, Palm Beach Gardens, Florida
Taubman Centers, Inc. (NYSE: TCO) today reported financial
results for the first quarter of 2019.
March 31, 2019
March 31, 2018
Three Months Three Months
Ended Ended
Net income attributable to
common shareowners, diluted (in thousands) $15,118
$18,618
Growth rate
(18.8)%
Net income attributable to common shareowners
(EPS) per diluted common share $0.25 $0.30
Growth rate
(16.7)%
Funds from Operations (FFO) per diluted common
share $0.93 $0.88
Growth rate
5.7%
Adjusted FFO per diluted common share
$0.95(1)
$1.04(2)
Growth rate
(8.7)%
(1) Adjusted FFO for the three months
ended March 31, 2019 excludes a restructuring charge, costs
associated with shareholder activism and the fluctuation in the
fair value of equity securities. (2) Adjusted FFO for the
three months ended March 31, 2018 excludes a reduction of a
previously expensed restructuring charge, costs associated with
shareholder activism, the fluctuation in the fair value of equity
securities, and a charge recognized in connection with the
write-off of deferred financing costs related to the early payoff
of our $475 million unsecured term loan.
“Our portfolio of high-quality assets achieved solid NOI growth
again this quarter, driven by better rents and lower expenses.
Adjusted FFO was in line with our expectations, but year-over-year
was impacted by significant lease termination income received in
the first quarter of last year,” said Robert S. Taubman, chairman,
president and chief executive officer of Taubman Centers.
“We were delighted to strengthen our portfolio by completing the
acquisition of a 48.5 percent interest in The Gardens Mall at an
excellent value in an off-market, non-cash transaction.”
Operating Statistics
For the quarter, comparable center NOI, excluding lease
cancellation income, was up 2.3 percent. “Our comparable centers
grew as expected in the U.S. We also produced very strong growth in
Asia, despite unfavorable foreign currency rates,” said Mr.
Taubman. Comparable center NOI growth, excluding lease cancellation
income, would have been 3 percent without the negative currency
impact.
Total portfolio NOI growth at our beneficial interest was up 5.7
percent for the quarter, excluding lease cancellation income.
“This is our first quarter reporting our share of NOI growth.
The combination of better post-hurricane operations at The Mall of
San Juan and outsized growth from our best assets, many of which
are wholly-owned, were the primary factors,” said Simon J. Leopold,
executive vice president and chief financial officer.
Comparable center tenant sales per square foot increased 18.6
percent from the first quarter of 2018. This brings the company's
12-month trailing sales per square foot to $832, an increase of
10.3 percent over the 12-months ended March 31, 2018.
Tenant sales per square foot in U.S. comparable centers were up
21.7 percent in the quarter, bringing 12-month trailing U.S. sales
per square foot to $919, an increase of 10.9 percent over the
12-months ended March 31, 2018.
“There were several factors that impacted the significant sales
increases this quarter. First, deliveries of Tesla’s Model 3
substantially benefitted the quarter’s results. Offsetting, was a
late Easter, unfavorable exchange rates and a very tough comp, as
sales were up over 12 percent a year ago.” said Mr. Taubman. “Many
of our most important categories including apparel, shoes and
electronics were up this quarter.”
Average rent per square foot for the quarter was $56.15, up 1.3
percent from $55.42 in the comparable period last year.
Trailing 12-month releasing spread per square foot for the
period ended March 31, 2019 was 7.1 percent.
Ending occupancy in comparable centers was 93.5 percent on March
31, 2019, up 0.3 percent from March 31, 2018. Leased space in
comparable centers was 95.9 percent on March 31, 2019, up 0.7
percent from March 31, 2018.
“Notwithstanding the continued significant volatility in the
retail landscape, demand for space in our centers remains solid,”
said Mr. Taubman.
The Gardens Mall Acquisition
In April, Taubman acquired a 48.5 percent interest in The
Gardens Mall (Palm Beach Gardens, Fla.) from members of the Cohen
Family, who together with members of the Forbes family have jointly
owned the center since its opening in 1988.
“The Gardens Mall is the premier retail asset in the affluent
and growing Palm Beach market. We believe the quality of the center
is above the median of our portfolio. Opportunities to acquire
assets like this, one of the very best in the country, are
extremely rare.” said Mr. Taubman. “This acquisition is consistent
with our strategy of owning superior assets in the strongest
markets.”
The 48.5 percent interest was acquired in an off-market,
non-cash transaction for 1.5 million Taubman Realty Group Limited
Partnership (TRG) units and the assumption of its pro rata share of
debt. This transaction is expected to be neutral to slightly
accretive to FFO and Adjusted FFO in 2019.
This represents Taubman’s third investment in partnership with
The Forbes Company, following The Mall of Millennia in Orlando and
Waterside Shops in Naples. “Forbes is a valuable partner and a
best-in-class retail operator. They will continue to lease and
manage the center. Forbes was instrumental in presenting this
opportunity to us and we look forward to another productive
partnership,” said Mr. Taubman.
Financing Activity
In March, we completed a 1.2 billion Chinese Yuan Renminbi (RMB)
(approximately $179 million using the March 31, 2019 exchange rate)
10-year, fully-amortizing, non-recourse financing at our
CityOn.Xi’an (Xi’an, China) joint venture. The loan bears interest
at an all-in fixed rate of 6 percent. As of March 31, 2019, about
$49 million had been drawn.
Dividend Increased
In March, we declared a regular quarterly dividend of $0.675 per
share of common stock, an increase of 3.1 percent. Since going
public in 1992, Taubman has never reduced its dividend and has
increased its dividend 22 times. See Taubman Centers Increases
Quarterly Common Dividend 3.1 Percent to $0.675 Per Share – March
4, 2019.
2019 Guidance
Taubman is updating certain guidance measures for 2019. Our
guidance now includes the impact of The Gardens Mall acquisition
that closed in April.
2019 EPS is now expected to be in the range of $0.68 to $0.92
per diluted share, revised from the previous range of $0.84 to
$1.08.
2019 FFO is now expected to be in the range of $3.60 to $3.72
per diluted common share, revised from the previous range of $3.62
to $3.74. This change represents the $0.02 net impact of the first
quarter restructuring charge, costs associated with shareholder
activism and fluctuation in the fair value of equity
securities.
2019 Adjusted FFO, which excludes $0.02 per diluted
common share of first quarter adjustments, remains unchanged and is
expected to be in the range of $3.62 to $3.74 per diluted
common share.
We continue to expect comparable center NOI growth of about 2
percent for the year.
This guidance range includes the adoption of the new lease
accounting standard, resulting in an additional $5 to $7 million of
operating expenses. This guidance does not include the impact of
the agreement to sell 50 percent of Taubman Asia’s interests in
three Asia-based shopping centers to Blackstone or assumptions for
future costs associated with shareowner activism.
Supplemental Investor Information Available
Taubman provides supplemental investor information along with
its earnings announcements, available online at www.taubman.com
under “Investors.” This includes the following:
- Earnings Press Release
- Company Overview
- Operational Statistics
- Summary of Key Guidance Measures
- Income Statements
- Changes in Funds from Operations and
Earnings Per Common Share
- Balance Sheets
- Debt Summary
- Capital Spending and Balance Sheet
Information
- Owned Centers
- Redevelopment, New Development, &
Acquisition
- Anchors & Major Tenants in Owned
Portfolio
- Components of Rental Revenues
- Components of Other Income, Other
Operating Expense, and Nonoperating Income (Expense)
- Earnings Reconciliations
- Operating Statistics Glossary
Investor Conference Call
Taubman will host a conference call at 10:00 a.m. EDT on
Wednesday May 1, 2019 to discuss these results, business conditions
and the outlook for the remainder of 2019. 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 The Gardens Mall
The Gardens Mall was originally developed by Forbes-Cohen
Properties and opened in 1988. It is considered the top regional
mall in Northern Palm Beach County and is home to more than 150
tenants, many of which are among the world’s most iconic brands
including Apple, Chanel, Louis Vuitton, David Yurman, Jimmy Choo,
Tiffany & Co., lululemon athletica, Salvatore Ferragamo and
many others. The 1,400,000 square foot property is anchored by
Bloomingdale’s, Macy’s, Nordstrom, Saks and Sears and features
460,000 square feet of mall tenant space.
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.
About The Forbes Company
Based in Southfield, Michigan, The Forbes Company is a
nationally recognized owner, developer and manager of iconic
regional shopping centers, recognized throughout their respective
markets for their retail innovation, fashion leadership,
distinctive architecture and luxury appointments. In addition to
The Gardens Mall, these properties include: The Mall at Millenia in
Orlando, Florida; Somerset Collection in Troy, Michigan; and
Waterside Shops in Naples, Florida. www.theforbescompany.com
For ease of use, references in this press release to “Taubman
Centers,”, “we”, “us”, “our”, “company,” “Taubman” or an operating
platform mean Taubman Centers, Inc. and/or one or more of a number
of separate, affiliated entities. Business is actually conducted by
an affiliated entity rather than Taubman Centers, Inc. itself or
the named operating platform.
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements reflect management's current views with
respect to future events and financial performance. Forward-looking
statements can be identified by words such as “will”, “may”,
“could”, “expect”, “anticipate”, “believes”, “intends”, “should”,
“plans”, “estimates”, “approximate”, “guidance” and similar
expressions in this press release that predict or indicate future
events and trends and that do not report historical matters. The
forward-looking statements included in this release are made as of
the date hereof. Except as required by law, the company assumes no
obligation to update these forward-looking statements, even if new
information becomes available in the future. Actual results may
differ materially from those expected because of various risks and
uncertainties, including that the conditions to one or more
transaction closings may not be satisfied, the potential impact on
the company due to the announcement of the disposition of ownership
interests, the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transactions, general economic conditions, 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;
challenges with department stores; changes in consumer shopping
behavior; 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; competitors gaining
economies of scale through M&A and consolidation activity;
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; costs associated with response to
technology breaches; 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.
TAUBMAN CENTERS, INC. Table 1
- Income Statement For the Three Months Ended March 31, 2019
and 2018
(in thousands of dollars) 2019 2018
CONSOLIDATED UNCONSOLIDATED CONSOLIDATED
UNCONSOLIDATED BUSINESSES JOINT VENTURES
(1) BUSINESSES JOINT VENTURES (1)
REVENUES: Rental revenues (2) 144,289 129,556 Minimum rents
(2) 86,825 92,041 Overage rents 3,141 6,379 2,625 5,881 Expense
recoveries (2) 51,528 45,870 Management, leasing, and development
services 1,216 794 Other (2) 11,562 6,706 19,720
11,496 Total revenues 160,208 142,641 161,492 155,288
EXPENSES: Maintenance, taxes, utilities, and
promotion 38,538 40,960 37,637 40,378 Other operating (2) 19,225
5,521 23,866 9,986 Management, leasing, and development services
531 302 General and administrative 8,576 8,493 Restructuring charge
625 (346 ) Costs associated with shareholder activism 4,000 3,500
Interest expense 36,885 32,498 30,823 32,467 Depreciation and
amortization 44,956 33,690 35,022 33,469
Total expenses 153,336 112,669 139,297 116,300
Nonoperating income (expense) 8,733 401 (7,143 ) 347
15,605 30,373 15,052 39,335 Income tax expense (539 ) (1,908
) (184 ) (1,737 ) 28,465 37,598 Equity in income of
Unconsolidated Joint Ventures 14,672 19,728 Net
income 29,738 34,596 Net income attributable to noncontrolling
interests: Noncontrolling share of income of consolidated joint
ventures (1,429 ) (1,344 ) Noncontrolling share of income of TRG
(6,801 ) (8,279 ) Distributions to participating securities of TRG
(627 ) (599 ) Preferred stock dividends (5,784 ) (5,784 ) Net
income attributable to Taubman Centers, Inc. common shareholders
15,097 18,590
SUPPLEMENTAL INFORMATION:
EBITDA - 100% 97,446 96,561 80,897 105,271 EBITDA - outside
partners' share (6,739 ) (47,144 ) (6,257 ) (51,027 ) Beneficial
interest in EBITDA 90,707 49,417 74,640 54,244 Beneficial interest
expense (33,860 ) (16,776 ) (27,812 ) (16,751 ) Beneficial income
tax expense - TRG and TCO (489 ) (777 ) (134 ) (710 ) Beneficial
income tax expense - TCO 3 Non-real estate depreciation (1,145 )
(1,136 ) Preferred dividends and distributions (5,784 )
(5,784 ) Funds from Operations attributable to partnership
unitholders and participating securities of TRG 49,429
31,864 39,777 36,783
STRAIGHTLINE
AND PURCHASE ACCOUNTING ADJUSTMENTS: Net straight-line
adjustments to rental revenues, recoveries, and ground rent expense
at TRG% 1,798 166 656 711 Country Club Plaza purchase accounting
adjustments - rental revenues increase at TRG% 112 1,487 The Mall
at Green Hills purchase accounting adjustments - rental revenues
increase 35 31 (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 our ownership interest. (2) Upon adoption of ASC
Topic 842, minimum rents and expense recoveries are now presented
within a single revenue line item, Rental Revenues; the
presentation of lease cancellation income has changed from Other
income to Rental Revenues; the presentation of uncollectible tenant
revenues has changed from Other Operating expense to Rental
Revenues as a contra-revenue; and Other Operating expense includes
certain indirect leasing costs, which were capitalizable under the
previous lease accounting standard. As a result of the accounting
change, an additional $1.4 million of leasing costs were expensed
during the three months ended March 31, 2019. Comparative periods
presented were not adjusted to reflect the change in accounting.
TAUBMAN CENTERS, INC.
Use of Non-GAAP Financial Measures
In this press release, the terms "we", "us", and "our" refer to
Taubman Centers, Inc. (TCO), The Taubman Realty Group Limited
Partnership (TRG), and/or TRG's subsidiaries as the context may
require.
We use certain non-GAAP operating measures, including EBITDA,
beneficial interest in EBITDA, Net Operating Income, and Funds from
Operations. These measures are reconciled to the most comparable
GAAP measures. Additional information as to the use of these
measures are as follows.
EBITDA represents earnings before interest, income taxes, and
depreciation and amortization of our consolidated and
unconsolidated businesses. Beneficial interest in EBITDA represents
our share of the earnings before interest, income taxes, and
depreciation and amortization of our consolidated and
unconsolidated businesses. We believe 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.
We use Net Operating Income (NOI) as an alternative measure to
evaluate the operating performance of centers, both on individual
and stabilized portfolio bases, and in formulating corporate goals
and compensation. We define NOI as property-level operating
revenues (includes rental income excluding straight-line
adjustments of minimum rent) less maintenance, property taxes,
utilities, promotion, ground rent (including straight-line
adjustments), and other property operating expenses. Beneficial
interest in NOI represents our share of NOI (as previously defined)
of our consolidated and unconsolidated businesses. 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. We also use 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. We generally provide 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 materially impacted for the foreseeable
future.
The National Association of Real Estate Investment Trusts
(NAREIT) defines Funds from Operations (FFO) as net income
(calculated in accordance with Generally Accepted Accounting
Principles (GAAP)), excluding depreciation and amortization related
to real estate, gains and losses from the sale of certain real
estate assets, gains and losses from change in control, and
impairment write-downs of certain real estate assets and
investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity. We believe 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, we 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. We primarily use FFO in measuring
performance and in formulating corporate goals and
compensation.
We 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. We believe 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 months ended March 31, 2019, FFO and
EBITDA were adjusted to exclude a restructuring charge, costs
incurred associated with shareholder activism, and the fluctuation
in the fair value of equity securities. For the three months ended
March 31, 2018, FFO and EBITDA were adjusted to exclude a reduction
of a previously expensed restructuring charge, costs incurred
associated with shareholder activism, and the fluctuation in the
fair value of equity securities. For the three months ended March
31, 2018, FFO was also adjusted for a charge recognized in
connection with the write-off of deferred financing costs related
to the early payoff of our $475 million unsecured term loan.
These non-GAAP measures as presented by us 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 our operating performance. Additionally, these
measures do not represent cash flows from operating, investing, or
financing activities as defined by GAAP.
We also provide our beneficial interest in certain financial
information of our Unconsolidated Joint Ventures. This beneficial
information is derived as our ownership interest in the investee
multiplied by the specific financial statement item being
presented. Investors are cautioned that deriving our beneficial
interest in this manner may not accurately depict the legal and
economic implications of holding a noncontrolling interest in the
investee.
TAUBMAN CENTERS, INC.
Table 2 - Reconciliation of Net Income Attributable to
Taubman Centers, Inc. Common Shareholders to Funds From Operations
and Adjusted Funds From Operations For the Three Months
Ended March 31, 2019 and 2018 (in thousands of dollars
except as noted; may not add or recalculate due to rounding)
2019 2018 Shares Per Share Shares Per Share
Dollars /Units /Unit Dollars /Units /Unit
Net income
attributable to TCO common shareholders - basic 15,097
61,124,016 0.25 18,590 60,917,235
0.31 Add impact of share-based compensation 21
275,092 28 289,142
Net income
attributable to TCO common shareholders - diluted 15,118
61,399,108 0.25 18,618 61,206,377
0.30 Add depreciation of TCO's additional basis 1,617 0.03
1,617 0.03 Add TCO's additional income tax expense
3 0.00
Net income attributable to
TCO common shareholders,excluding step-up depreciation and
additional income tax expense 16,735 61,399,108
0.27 20,238 61,206,377 0.33 Add
noncontrolling share of income of TRG 6,801 24,875,564 8,279
24,954,658 Add distributions to participating securities of TRG 627
871,262 599 871,262
Net income attributable to partnership unitholders
and participating securities of
TRG
24,163 87,145,934 0.28 29,116
87,032,297 0.33 Add (less) depreciation and
amortization: Consolidated businesses at 100% 44,956 0.52 35,022
0.40 Depreciation of TCO's additional basis (1,617 ) (0.02 ) (1,617
) (0.02 ) Noncontrolling partners in consolidated joint ventures
(2,235 ) (0.03 ) (1,852 ) (0.02 ) Share of Unconsolidated Joint
Ventures 17,192 0.20 17,055 0.20 Non-real estate depreciation
(1,145 ) (0.01 ) (1,136 ) (0.01 ) Less impact of share-based
compensation (21 ) (0.00 ) (28 ) (0.00 )
Funds
from Operations attributable to partnership unitholders
and participating securities of
TRG
81,293 87,145,934 0.93 76,560
87,032,297 0.88 TCO's average ownership percentage of
TRG - basic (1) 71.1 % 70.9 %
Funds from Operations attributable
to TCO's common shareholders,excluding additional income tax
expense (1) 57,779 0.93 54,311 0.88
Less TCO's additional income tax expense (3 ) (0.00 )
Funds from Operations attributable to TCO's common shareholders
(1) 57,779 0.93 54,308
0.88 Funds from Operations
attributable to partnership unitholders
and participating securities of TRG
81,293 87,145,934 0.93 76,560 87,032,297 0.88 Restructuring charge
625 0.01 (346 ) (0.00 ) Costs associated with shareholder activism
4,000 0.05 3,500 0.04 Fluctuation in fair value of equity
securities (3,346 ) (0.04 ) 10,262 0.12 Write-off of deferred
financing costs 382 0.00
Adjusted Funds from Operations attributable to partnership
unitholders
and participating securities of
TRG
82,572 87,145,934 0.95 90,358
87,032,297 1.04 TCO's average ownership percentage of
TRG - basic (2) 71.1 % 70.9 %
Adjusted Funds from
Operations attributable to TCO's common shareholders (2)
58,688 0.95 64,100
1.04 (1) For the three months ended March 31, 2019,
Funds from Operations attributable to TCO's common shareholders was
$57,019 using TCO's diluted average ownership percentage of TRG of
70.1%. For the three months ended March 31, 2018, Funds from
Operations attributable to TCO's common shareholders was $53,585
using TCO's diluted average ownership percentage of TRG of 70.0%.
(2) For the three months ended March 31, 2019, Adjusted
Funds from Operations attributable to TCO's common shareholders was
$57,916 using TCO's diluted average ownership percentage of TRG of
70.1%. For the three months ended March 31, 2018, Adjusted Funds
from Operations attributable to TCO's common shareholders was
$63,245 using TCO's diluted average ownership percentage of TRG of
70.0%.
TAUBMAN CENTERS, INC. Table 3 -
Reconciliation of Net Income to Beneficial Interest in EBITDA and
Adjusted Beneficial Interest in EBITDA For the Periods Ended
March 31, 2019 and 2018 (in thousands of dollars; amounts
attributable to TCO may not recalculate due to rounding)
Three Months Ended 2019 2018 Net
income 29,738 34,596 Add (less) depreciation and
amortization: Consolidated businesses at 100% 44,956 35,022
Noncontrolling partners in consolidated joint ventures (2,235 )
(1,852 ) Share of Unconsolidated Joint Ventures 17,192 17,055 Add
(less) interest expense and income tax expense: Interest expense:
Consolidated businesses at 100% 36,885 30,823 Noncontrolling
partners in consolidated joint ventures (3,025 ) (3,011 ) Share of
Unconsolidated Joint Ventures 16,776 16,751 Income tax expense:
Consolidated businesses at 100% 539 184 Noncontrolling partners in
consolidated joint ventures (50 ) (50 ) Share of Unconsolidated
Joint Ventures 777 710 Less noncontrolling share of income of
consolidated joint ventures (1,429 ) (1,344 )
Beneficial
interest in EBITDA 140,124 128,884 TCO's average
ownership percentage of TRG - basic 71.1 % 70.9 %
Beneficial
interest in EBITDA attributable to TCO 99,593
91,430 Beneficial interest in EBITDA
140,124 128,884 Add (less): Restructuring charge 625 (346 ) Costs
associated with shareholder activism 4,000 3,500 Fluctuation in
fair value of equity securities (3,346 ) 10,262
Adjusted
Beneficial interest in EBITDA 141,403 142,300
TCO's average ownership percentage of TRG - basic 71.1 % 70.9 %
Adjusted Beneficial interest in EBITDA attributable to TCO
100,502 100,947 TAUBMAN CENTERS,
INC. Table 4 - Reconciliation of Net Income to Net Operating
Income (NOI) For the Three Months Ended March 31, 2019,
2018, and 2017 (in thousands of dollars)
Three Months Ended Three Months Ended
2019 2018 2018 2017 Net income
29,738 34,596 34,596 32,759 Add (less)
depreciation and amortization: Consolidated businesses at 100%
44,956 35,022 35,022 37,711 Noncontrolling partners in consolidated
joint ventures (2,235 ) (1,852 ) (1,852 ) (1,796 ) Share of
Unconsolidated Joint Ventures 17,192 17,055 17,055 15,652 Add
(less) interest expense and income tax expense: Interest expense:
Consolidated businesses at 100% 36,885 30,823 30,823 25,546
Noncontrolling partners in consolidated joint ventures (3,025 )
(3,011 ) (3,011 ) (2,975 ) Share of Unconsolidated Joint Ventures
16,776 16,751 16,751 15,781 Income tax expense: Consolidated
businesses at 100% 539 184 184 208 Noncontrolling partners in
consolidated joint ventures (50 ) (50 ) (50 ) (31 ) Share of
Unconsolidated Joint Ventures 777 710 710 1,633 Share of income tax
expense on disposition 731 Less noncontrolling share of income of
consolidated joint ventures (1,429 ) (1,344 ) (1,344 ) (1,444 ) Add
EBITDA attributable to outside partners: EBITDA attributable to
noncontrolling partners in consolidated joint ventures 6,739 6,257
6,257 6,246 EBITDA attributable to outside partners in
Unconsolidated Joint Ventures 47,144 51,027 51,027
47,863
EBITDA at 100% 194,007
186,168 186,168 177,884 Add (less) items
excluded from shopping center NOI: General and administrative
expenses 8,576 8,493 8,493 10,751 Management, leasing, and
development services, net (685 ) (492 ) (492 ) (338 ) Restructuring
charge 625 (346 ) (346 ) 1,896 Costs associated with shareholder
activism 4,000 3,500 3,500 3,500 Straight-line of rents (2,907 )
(5,487 ) (5,487 ) (1,855 ) Fluctuation in fair value of equity
securities (3,346 ) 10,262 10,262 Insurance recoveries - The Mall
of San Juan (4,046 ) (670 ) (670 ) Gain on disposition (4,445 )
Gain on sale of peripheral land (1,668 ) Dividend income (1,151 )
(1,151 ) (1,033 ) Interest income (1,742 ) (1,620 ) (1,620 ) (2,032
) Other nonoperating expense (income) (25 ) (25 ) 103 Unallocated
operating expenses and other (1) 7,740 8,121 8,121
7,322
NOI at 100% - total portfolio
202,222 206,753 206,753 190,085 Less
NOI of non-comparable centers (11,738 ) (2 ) (9,261 ) (2 ) (12,800
) (3 ) (12,411 ) (3 )
NOI at 100% - comparable centers
190,484 197,492 193,953
177,674 NOI at 100% - comparable centers growth
% (3.5 )% 9.2 % NOI at 100%
- comparable centers 190,484 197,492 193,953 177,674 Less lease
cancellation income - comparable centers (489 ) (11,687 ) (11,687 )
(3,608 )
NOI at 100% - comparable centers excluding lease
cancellation income 189,995 185,805
182,266 174,066 NOI at 100% -
comparable centers excluding lease cancellation income growth %
2.3 % (4 )
4.7 % NOI at 100% -
total portfolio 202,222 206,753 206,753 190,085 Less lease
cancellation income - total portfolio (569 ) (13,785 ) (13,785 )
(3,706 ) Less NOI attributable to noncontrolling partners in
consolidated joint ventures and outside partners in Unconsolidated
Joint Ventures excluding lease cancellation income - total
portfolio (54,573 ) (53,877 ) (53,877 ) (51,230 )
Beneficial
interest in NOI - total portfolio excluding lease cancellation
income 147,080 139,091
139,091 135,149 Beneficial interest
in NOI - total portfolio excluding lease cancellation income growth
% 5.7 % 2.9 % (1) Upon
adoption of ASC Topic 842, Other Operating expense includes certain
indirect leasing costs, which were capitalizable under the previous
lease accounting standard. As a result of the accounting change, an
additional $1.4 million of leasing costs were expensed during the
three months ended March 31, 2019. Comparative periods presented
were not adjusted to reflect the change in accounting. (2)
Includes Beverly Center, The Mall of San Juan, and Taubman Prestige
Outlets Chesterfield. (3) Includes Beverly Center,
CityOn.Zhengzhou, The Mall of San Juan, and Taubman Prestige
Outlets Chesterfield. (4) The NOI of our centers in China
and South Korea have been translated using their respective average
exchange rates for the periods presented. Using constant currency
exchange rates, the growth in NOI at 100%, excluding lease
cancellation income, presented would have been 3.0% for the three
months ended March 31, 2019.
TAUBMAN CENTERS, INC. Table
5 - 2019 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, 2019 (1) Adjusted Funds from Operations
per common share 3.62 3.74 Restructuring charge
(2) (0.005 ) (0.005 ) Costs associated with shareholder activism
(2) (0.045 ) (0.045 ) Fluctuation in fair value of equity
securities (2) 0.040 0.040
Funds from Operations
per common share $ 3.60 $ 3.72 Real
estate depreciation - TRG (2.78 ) (2.67 ) 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 shareholders, per common share (EPS)
$ 0.68 $ 0.92 (1)
Guidance is current as of April 30, 2019, see "Taubman Centers,
Inc. Issues Solid First Quarter Results." On February 14, 2019, we
announced agreements to sell 50 percent of our ownership interests
in Starfield Hanam, CityOn.Xi’an, and CityOn.Zhengzhou to funds
managed by The Blackstone Group L.P.(Blackstone). The transactions
are subject to customary closing conditions and are expected to
close throughout 2019. The 2019 annual guidance and related
guidance assumptions exclude the impact of the Blackstone
transactions. In April 2019, we acquired a 48.5% interest in The
Gardens Mall. The 2019 annual guidance and related guidance
assumptions now include the impact of The Gardens Mall acquisition.
(2) Amount represents actual amounts recognized through the
first quarter of 2019. Amount does not include future assumptions
of amounts to be incurred during 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190430006174/en/
Erik Wright, Taubman, Manager, Investor Relations,
248-258-7390ewright@taubman.com
Maria Mainville, Taubman, Director, Strategic Communications,
248-258-7469mmainville@taubman.com
Taubman Centers (NYSE:TCO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Taubman Centers (NYSE:TCO)
Historical Stock Chart
From Apr 2023 to Apr 2024