- Mall Tenant Sales Per Square Foot Up
1.2 Percent in the Quarter
- Trailing 12-Month Releasing Spreads Of
16.3 Percent
- Average Rent Per Square Foot Up 1
Percent
- CityOn.Zhengzhou Opened 100 Percent
Leased
- Country Club Plaza Office Tower
Sold
- Quarterly Common Stock Dividend
Increased 5 Percent to $0.625 Per Share
Taubman Centers, Inc. (NYSE: TCO) today reported financial
results for the first quarter of 2017.
March 31, 2017
March 31, 2016
Three Months Three Months
Ended Ended
Net income attributable to
common shareowners, diluted (in thousands) $17,215
$24,679
Growth rate
(30.2)%
Net income attributable to common shareowners
(EPS) per diluted share $0.28 $0.41
Growth rate
(31.7)%
Funds from Operations (FFO) per diluted common
share $0.85 $0.84
Growth rate
1.2%
Adjusted Funds from Operations (Adjusted FFO) per
diluted common share
$0.92(1)
$0.84
Growth rate
9.5%
(1) Adjusted FFO for the three months
ended March 31, 2017 excludes a total of seven cents per diluted
share of adjustments, including a restructuring charge, costs
associated with shareowner activism, and 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.
“Our first quarter results were strong with Adjusted FFO up
nearly 10 percent. This growth was primarily driven by increased
rents and recoveries from our tenants,” said Robert S. Taubman,
chairman, president and chief executive officer of Taubman Centers.
“We also successfully marked the opening of CityOn.Zhengzhou, our
third asset in Asia, which opened 100 percent leased.”
Operating Statistics
For the quarter, comparable center net operating income (NOI),
excluding lease cancellation revenue, was up 2.8 percent.
“Comparable center NOI met our expectations,” said Mr. Taubman.
“Additionally, lease cancellation income was greater than we had
anticipated.” Including lease cancellation income, comparable
center NOI growth was 3.9 percent.
Comparable center mall tenant sales per square foot rose 1.2
percent from the first quarter of 2016. Trailing 12-month mall
tenant sales per square foot increased 0.9 percent to $776 at March
31, 2017. “Despite the challenging retail environment, we were
pleased to see sales per square foot growth for the third
consecutive quarter,” said Mr. Taubman.
Average rent per square foot for the quarter was $60.60, up 1
percent from $60.00 in the comparable period last year. Trailing
12-month releasing spreads per square foot for the period ended
March 31, 2017 were 16.3 percent.
Ending occupancy in comparable centers was 92.3 percent on March
31, 2017, unchanged from March 31, 2016. Leased space in comparable
centers was 93.9 percent on March 31, 2017, down 1.5 percent from
March 31, 2016 primarily due to the bankruptcies and closures of
Sports Authority and The Limited.
CityOn.Zhengzhou Opened 100 Percent Leased
On March 16, the company opened a new ground-up development in
Asia, CityOn.Zhengzhou (Zhengzhou, China). The approximately one
million square foot shopping center opened 100 percent leased and
is now 100 percent occupied. The center is anchored by a four-level
Wangfujing Department Store and includes nearly 200 of today’s most
in-demand retailers, restaurants and entertainment venues. One of
China’s fastest growing cities, Zhengzhou is a major finance,
business and transportation hub in Central China. See The New
CityOn.Zhengzhou Shopping Center Opened to Capacity Crowds Today in
Henan Province – March 16, 2017.
Financing Activity
In February, the company amended and restated its primary
revolving line of credit which included a new, $300 million
unsecured term loan and an extension of the $1.1 billion revolving
credit facility. The revolving line of credit was extended to
February 2021, with two six-month extension options.
Both loans bear interest at a range based on the company’s total
leverage ratio. For the revolver, as of March 31, the leverage
ratio resulted in an interest rate of LIBOR plus 1.45 percent plus
an annual facility fee of 0.225 percent. On the $300 million term
loan, as of March 31, the leverage ratio resulted in an interest
rate of LIBOR plus 1.6 percent. To reduce its exposure to interest
rate fluctuations, the company has entered into forward starting
swap agreements which are effective January 2018 through the term
loan’s maturity in February 2022. The term loan bears interest at a
range of LIBOR plus 1.25 to 1.9 percent. From January 2018 through
its maturity date, the LIBOR rate on the $300 million term loan is
swapped to a fixed rate of 2.14 percent, which will result in an
effective interest rate in the range of 3.39 to 4.04 percent.
In March, the company repaid in full the $302 million
construction loan on The Mall of San Juan (San Juan, Puerto Rico),
which was scheduled to mature in April 2017. The asset is now
unencumbered. The company’s lines of credit were used to repay the
loan.
Country Club Plaza Office Tower Sold
In March, the company’s 50 percent owned Valencia Place office
tower located within the Country Club Plaza (Kansas City, Mo.) was
sold for $75.2 million. The company’s share of the net proceeds,
after transaction costs, was approximately $37 million.
Dividend Increased
In March, the company declared a regular quarterly dividend of
$0.625 per share of common stock, an increase of 5 percent. Since
the company went public in 1992 it has never reduced its common
dividend and has increased it 20 times, achieving a 4.4 percent
compounded annual growth rate over the period. See Taubman Centers
Increases Quarterly Common Dividend 5 Percent to $0.625 Per Share –
March 2, 2017.
2017 Guidance
The company is updating its guidance for 2017. 2017 EPS is now
expected to be in the range of $1.16 to $1.41 per diluted common
share, revised from the previous range of $1.20 to $1.45.
2017 Adjusted FFO, which excludes $0.07 per diluted common share
of first quarter adjustments, is expected to be in the range of
$3.67 to $3.82 per diluted common share.
2017 FFO, which includes $0.07 per diluted common share of first
quarter adjustments, is now expected to be in the range of $3.60 to
$3.75 per diluted common share, revised from the previous range of
$3.67 to $3.82.
This guidance assumes comparable center NOI growth, including
lease cancellation income, of about 3 ½ percent for the year. The
company’s previous comparable center NOI growth guidance of about 3
½ percent excluded lease cancellation income. This guidance assumes
the company’s beneficial share of lease cancellation income to be
$10 to $12 million, up from the previous estimate of $5 to $6
million. This guidance does not include an assumption for future
costs associated with shareowner activism.
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:
- Company Information
- Income Statement
- Earnings Reconciliations
- Changes in Funds from Operations and
Earnings Per Common Share
- Components of Other Income, Other
Operating Expense, and Nonoperating Income, Net
- Balance Sheets
- Debt Summary
- Other Debt, Equity and Certain Balance
Sheet Information
- Redevelopments and Disposition
- Capital Spending
- Operational Statistics
- Summary of Key Guidance Measures
- Owned Centers
- Major Tenants in Owned Portfolio
- Anchors in Owned Portfolio
- Operating Statistics Glossary
Investor Conference Call
The company will host a conference call at 11:00 a.m. EDT on
Friday, April 28 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.
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.
TAUBMAN CENTERS, INC. Table 1
- Summary of Results For the Periods Ended March 31, 2017
and 2016 (in thousands of
dollars, except as indicated) Three Months Ended
2017 2016 Net income
32,759 44,329
Noncontrolling share of income of consolidated joint ventures
(1,444 ) (2,521 ) Noncontrolling share of income of
TRG
(7,790 ) (10,899 ) Distributions to participating
securities of TRG
(571 ) (512 ) Preferred stock
dividends
(5,784 ) (5,784 ) Net income attributable
to Taubman Centers, Inc. common shareowners
17,170 24,613
Net income per common share - basic
0.28 0.41 Net income per
common share - diluted
0.28 0.41 Beneficial interest in
EBITDA - Combined (1)
123,775 108,476 Adjusted Beneficial
interest in EBITDA - Combined (1)
126,357 108,476 Funds from
Operations attributable to partnership unitholders and
participating securities of TRG (1)
74,426 73,024 Funds from
Operations attributable to TCO's common shareowners (1)
52,592 51,597 Funds from Operations per common share - basic
(1)
0.87 0.86 Funds from Operations per common share -
diluted (1)
0.85 0.84 Adjusted Funds from Operations
attributable to partnership unitholders and participating
securities of TRG (1)
80,235 73,024 Adjusted Funds from
Operations attributable to TCO's common shareowners (1)
56,805 51,597 Adjusted Funds from Operations per common
share - basic (1)
0.94 0.86 Adjusted Funds from Operations
per common share - diluted (1)
0.92 0.84 Weighted average
number of common shares outstanding - basic
60,555,466
60,275,004 Weighted average number of common shares outstanding -
diluted
61,053,756 60,791,001 Common shares outstanding at
end of period
60,685,420 60,342,914 Weighted average units -
Operating Partnership - basic
85,533,412 85,337,163 Weighted
average units - Operating Partnership - diluted
86,902,964
86,724,422 Units outstanding at end of period - Operating
Partnership
85,656,699 85,405,073 Ownership percentage of
the Operating Partnership at end of period
70.8 %
70.7 % Number of owned shopping centers at end of period
24
20
Operating Statistics: Net Operating Income
excluding lease cancellation income - growth % (1)(2)
2.8
% 5.8 % Net Operating Income including lease cancellation
income - growth % (1)(2)
3.9 % 4.2 % Average rent per
square foot - Consolidated Businesses (3)
62.47 61.83
Average rent per square foot - Unconsolidated Joint Ventures (3)
58.44 57.85 Average rent per square foot - Combined (3)
60.60 60.00 Average rent per square foot growth (3)
1.0 % Ending occupancy - all centers
92.1
% 92.5 % Ending occupancy - comparable (3)
92.3
% 92.3 % Leased space - all centers
94.5 %
95.1 % Leased space - comparable (3)
93.9 % 95.4 %
Mall tenant sales - all centers (4)
1,388,677 1,202,268 Mall
tenant sales - comparable (3)(4)
1,132,245 1,116,329
12-Months Trailing 2017 2016
Operating Statistics: Mall tenant sales - all centers (4)
5,960,023 5,204,499 Mall tenant sales - comparable (3)(4)
5,037,408 4,886,778 Sales per square foot (3)(4)
776
769 All centers (4): Mall tenant occupancy costs as a percentage of
tenant sales - Consolidated Businesses
14.7 % 14.4 %
Mall tenant occupancy costs as a percentage of tenant sales -
Unconsolidated Joint Ventures
14.4 % 13.9 % Mall
tenant occupancy costs as a percentage of tenant sales - Combined
14.5 % 14.2 % Comparable centers (3)(4): Mall tenant
occupancy costs as a percentage of tenant sales - Consolidated
Businesses
14.2 % 14.0 % Mall tenant occupancy costs
as a percentage of tenant sales - Unconsolidated Joint Ventures
14.0 % 14.0 % Mall tenant occupancy costs as a
percentage of tenant sales - Combined
14.1 % 14.0 %
(1) Beneficial interest in EBITDA represents the Operating
Partnership’s share of the earnings before interest, income taxes,
and depreciation and amortization of its consolidated and
unconsolidated businesses. The Company believes beneficial interest
in EBITDA provides a useful indicator of operating performance, as
it is customary in the real estate and shopping center business to
evaluate the performance of properties on a basis unaffected by
capital structure. The Company uses Net Operating Income (NOI) as
an alternative measure to evaluate the operating performance of
centers, both on individual and stabilized portfolio bases. The
Company defines NOI as property-level operating revenues (includes
rental income excluding straight-line adjustments of minimum rent)
less maintenance, taxes, utilities, promotion, ground rent
(including straight-line adjustments), and other property operating
expenses. Since NOI excludes general and administrative expenses,
pre-development charges, interest income and expense, depreciation
and amortization, impairment charges, restructuring charges, and
gains from peripheral land and property dispositions, it provides a
performance measure that, when compared period over period,
reflects the revenues and expenses most directly associated with
owning and operating rental properties, as well as the impact on
their operations from trends in tenant sales, occupancy and rental
rates, and operating costs. The Company also uses NOI excluding
lease cancellation income as an alternative measure because this
income may vary significantly from period to period, which can
affect comparability and trend analysis. The Company generally
provides separate projections for expected comparable center NOI
growth and lease cancellation income. Comparable centers are
generally defined as centers that were owned and open for the
entire current and preceding period presented, excluding centers
impacted by significant redevelopment activity. The National
Association of Real Estate Investment Trusts (NAREIT) defines Funds
from Operations (FFO) as net income (computed in accordance with
Generally Accepted Accounting Principles (GAAP)), excluding gains
(or losses) from extraordinary items and sales of properties and
impairment write-downs of depreciable real estate, plus real estate
related depreciation and after adjustments for unconsolidated
partnerships and joint ventures. The Company believes that FFO is a
useful supplemental measure of operating performance for REITs.
Historical cost accounting for real estate assets implicitly
assumes that the value of real estate assets diminishes predictably
over time. Since real estate values instead have historically risen
or fallen with market conditions, the Company and most industry
investors and analysts have considered presentations of operating
results that exclude historical cost depreciation to be useful in
evaluating the operating performance of REITs. The Company
primarily uses FFO in measuring performance and in formulating
corporate goals and compensation. The Company may also present
adjusted versions of NOI, beneficial interest in EBITDA, and FFO
when used by management to evaluate operating performance when
certain significant items have impacted results that affect
comparability with prior or future periods due to the nature or
amounts of these items. The Company believes the disclosure of the
adjusted items is similarly useful to investors and others to
understand management's view on comparability of such measures
between periods. For the three months ended March 31, 2017, FFO and
EBITDA were adjusted to exclude a restructuring charge and costs
incurred associated with shareowner activism. In addition, for the
three months ended March 31, 2017, FFO was 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
line of credit in February 2017. For the three months ended March
31, 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. 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. (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 March 31, 2016 statistics
have been restated to include comparable centers to 2017.
(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.
TAUBMAN CENTERS, INC.
Table 2 - Income Statement For the Three Months Ended
March 31, 2017 and 2016 (in thousands of dollars)
2017 2016 CONSOLIDATED UNCONSOLIDATED
CONSOLIDATED UNCONSOLIDATED BUSINESSES
JOINT VENTURES (1) BUSINESSES JOINT
VENTURES (1) REVENUES: Minimum rents 84,303 83,525
81,977 57,563 Percentage rents 2,575 5,062 2,772 2,032 Expense
recoveries 53,012 45,748 47,760 34,372 Management, leasing, and
development services 917 1,728 Other 8,276 6,265
5,218 2,796 Total revenues 149,083 140,600 139,455
96,763
EXPENSES: Maintenance, taxes, utilities, and
promotion 39,711 33,714 34,938 23,356 Other operating 19,319 11,403
18,708 3,404 Management, leasing, and development services 579 872
General and administrative 10,751 11,380 Restructuring charge 1,896
Costs associated with shareowner activism 3,500 Interest expense
25,546 30,369 19,128 21,333 Depreciation and amortization 37,711
30,508 29,746 16,006 Total expenses
139,013 105,994 114,772 64,099 Nonoperating income, net
2,779 1,851 1,470 246 12,849 36,457
26,153 32,910 Income tax expense (208 ) (2,943 ) (302 ) 33,514 Gain
on disposition, net of tax (2) 3,713 37,227
32,910 Equity in income of Unconsolidated Joint Ventures
20,118 18,478 Net income 32,759 44,329 Net
income attributable to noncontrolling interests: Noncontrolling
share of income of consolidated joint ventures (1,444 ) (2,521 )
Noncontrolling share of income of TRG (7,790 ) (10,899 )
Distributions to participating securities of TRG (571 ) (512 )
Preferred stock dividends (5,784 ) (5,784 ) Net income attributable
to Taubman Centers, Inc. common shareowners 17,170 24,613
SUPPLEMENTAL INFORMATION: EBITDA - 100% 76,106
101,778 75,027 70,249 EBITDA - outside partners' share (6,246 )
(47,863 ) (5,892 ) (30,908 ) Beneficial interest in EBITDA 69,860
53,915 69,135 39,341 Beneficial share of gain on disposition (2)
(2,814 ) Beneficial interest expense (22,571 ) (15,781 ) (17,176 )
(11,528 ) Beneficial income tax expense - TRG and TCO (177 ) (1,633
) (302 ) Beneficial income tax expense (benefit) - TCO 100 (19 )
Non-real estate depreciation (689 ) (643 ) Preferred dividends and
distributions (5,784 ) (5,784 ) Funds from Operations
attributable to partnership unitholders and participating
securities of TRG 40,739 33,687 45,211 27,813
STRAIGHTLINE AND PURCHASE ACCOUNTING
ADJUSTMENTS: Net straight-line adjustments to rental revenue,
recoveries, and ground rent expense at TRG% (48 ) 453 13 457
Country Club Plaza purchase accounting adjustments - minimum rents
increase at TRG% 52 The Mall at Green Hills purchase accounting
adjustments - minimum rents increase 49 60 (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) During the three months ended March 31, 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 ($0.7 million at TRG's share) of income tax expense in
connection with the sale of the office tower.
TAUBMAN CENTERS, INC.
Table 3 - 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 March 31, 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
17,170 60,555,466 0.28 24,613
60,275,004 0.41 Add impact of share-based
compensation 45 498,290 66 515,997
Net income attributable to TCO common
shareowners - diluted 17,215 61,053,756
0.28 24,679 60,791,001 0.41 Add
depreciation of TCO's additional basis 1,617 0.03 1,617 0.03 Add
(less) TCO's additional income tax expense (benefit) 100
0.00 (19 ) (0.00 )
Net income
attributable to TCO common shareowners, excluding step-up
depreciation and additional income tax expense (benefit)
18,932 61,053,756 0.31 26,277
60,791,001 0.43 Add noncontrolling share of
income of TRG 7,790 24,977,946 10,899 25,062,159 Add distributions
to participating securities of TRG 571 871,262
512 871,262
Net income attributable
to partnership unitholders and participating securities of
TRG 27,293 86,902,964 0.31 37,688
86,724,422 0.43 Add (less) depreciation and
amortization: Consolidated businesses at 100% 37,711 0.43 29,746
0.34 Depreciation of TCO's additional basis (1,617 ) (0.02 ) (1,617
) (0.02 ) Noncontrolling partners in consolidated joint ventures
(1,796 ) (0.02 ) (1,419 ) (0.02 ) Share of Unconsolidated Joint
Ventures 15,652 0.18 9,335 0.11 Non-real estate depreciation (689 )
(0.01 ) (643 ) (0.01 ) Less beneficial share of gain on
disposition, net of tax (2,083 ) (0.02 ) Less impact of share-based
compensation (45 ) (0.00 ) (66 ) (0.00 )
Funds from Operations attributable to partnership
unitholders and participating securities of TRG
74,426 86,902,964 0.86 73,024
86,724,422 0.84 TCO's average ownership
percentage of TRG - basic (1) 70.8 % 70.6 %
Funds
from Operations attributable to TCO's common shareowners,
excluding additional income tax benefit (expense) (1)
52,692 0.86 51,578 0.84 Add
(less) TCO's additional income tax benefit (expense) (100 ) (0.00 )
19 0.00
Funds from Operations attributable
to TCO's common shareowners (1) 52,592
0.85 51,597 0.84
Funds from Operations attributable to partnership unitholders and
participating securities of TRG 74,426 86,902,964 0.86 73,024
86,724,422 0.84 Restructuring charge 1,896 0.02 Costs
associated with shareowner activism 3,500 0.04 Partial write-off of
deferred financing costs 413 0.00
Adjusted Funds from Operations attributable
to partnership unitholders and participating securities of
TRG 80,235 86,902,964 0.92 73,024
86,724,422 0.84 TCO's average ownership
percentage of TRG - basic (2) 70.8 % 70.6 %
Adjusted
Funds from Operations attributable to TCO's common shareowners,
excluding additional income tax benefit (expense) (2)
56,805 0.92 51,578 0.84 Add
(less) TCO's additional income tax benefit (expense)
19 0.00
Adjusted Funds from Operations
attributable to TCO's common shareowners (2) 56,805
0.92 51,597 0.84
(1)
For the three months ended March 31, 2017, Funds from Operations
attributable to TCO's common shareowners was $51,761 using TCO's
diluted average ownership percentage of TRG of 69.7%. For the three
months ended March 31, 2016, Funds from Operations attributable to
TCO's common shareowners was $50,772 using TCO's diluted average
ownership percentage of TRG of 69.5%.
(2)
For the three months ended March 31, 2017, Adjusted Funds from
Operations attributable to TCO's common shareowners was $55,909
using TCO's diluted average ownership percentage of TRG of 69.7%.
For the three months ended March 31, 2016, Adjusted Funds from
Operations attributable to TCO's common shareowners was $50,772
using TCO's diluted average ownership percentage of TRG of 69.5%.
TAUBMAN CENTERS, INC. Table 4 -
Reconciliation of Net Income to Beneficial Interest in EBITDA and
Adjusted Beneficial Interest in EBITDA For the Periods Ended
March 31, 2017 and 2016 (in thousands of dollars; amounts
attributable to TCO may not recalculate due to rounding)
Three Months Ended 2017 2016 Net
income 32,759 44,329 Add (less)
depreciation and amortization: Consolidated businesses at 100%
37,711 29,746 Noncontrolling partners in consolidated joint
ventures (1,796 ) (1,419 ) Share of Unconsolidated Joint Ventures
15,652 9,335 Add (less) interest expense and income tax
expense: Interest expense: Consolidated businesses at 100% 25,546
19,128 Noncontrolling partners in consolidated joint ventures
(2,975 ) (1,952 ) Share of Unconsolidated Joint Ventures 15,781
11,528 Income tax expense: Consolidated businesses at 100% 208 302
Noncontrolling partners in consolidated joint ventures (31 ) Share
of Unconsolidated Joint Ventures 1,633 Share of income tax expense
on disposition 731 Less noncontrolling share of income of
consolidated joint ventures (1,444 ) (2,521 )
Beneficial
interest in EBITDA 123,775 108,476 TCO's
average ownership percentage of TRG - basic 70.8 % 70.6 %
Beneficial interest in EBITDA attributable to TCO
87,630 76,618 Beneficial
interest in EBITDA 123,775 108,476 Add (less): Restructuring
charge 1,896 Costs associated with shareowner activism 3,500
Beneficial share of gain on disposition (2,814 )
Adjusted Beneficial interest in EBITDA 126,357
108,476 TCO's average ownership percentage of TRG -
basic 70.8 % 70.6 %
Adjusted Beneficial interest in
EBITDA attributable to TCO 89,458 76,618
TAUBMAN CENTERS, INC. Table 5 -
Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended March 31, 2017, 2016, and 2015 (in
thousands of dollars) Three Months Ended
Three Months Ended 2017 2016 2016
2015 Net income 32,759 44,329
44,329 51,000 Add (less) depreciation and
amortization: Consolidated businesses at 100% 37,711 29,746 29,746
24,041 Noncontrolling partners in consolidated joint ventures
(1,796 ) (1,419 ) (1,419 ) (1,084 ) Share of Unconsolidated Joint
Ventures 15,652 9,335 9,335 8,068 Add (less) interest
expense and income tax expense: Interest expense: Consolidated
businesses at 100% 25,546 19,128 19,128 13,525 Noncontrolling
partners in consolidated joint ventures (2,975 ) (1,952 ) (1,952 )
(1,654 ) Share of Unconsolidated Joint Ventures 15,781 11,528
11,528 11,363 Share of income tax expense: Consolidated businesses
at 100% 208 302 302 838 Noncontrolling partners in consolidated
joint ventures (31 ) Share of Unconsolidated Joint Ventures 1,633
Share of income tax expense on disposition 731 Less
noncontrolling share of income of consolidated joint ventures
(1,444 ) (2,521 ) (2,521 ) (2,591 ) Add EBITDA attributable
to outside partners: EBITDA attributable to noncontrolling partners
in consolidated joint ventures 6,246 5,892 5,892 5,329 EBITDA
attributable to outside partners in Unconsolidated Joint Ventures
47,863 30,908 30,908 28,487
EBITDA at 100% 177,884 145,276 145,276
137,322 Add (less) items excluded from shopping
center NOI: General and administrative expenses 10,751 11,380
11,380 11,925 Management, leasing, and development services, net
(338 ) (856 ) (856 ) (1,827 ) Restructuring charge 1,896 Costs
associated with shareowner activism 3,500 Straight-line of rents
(1,470 ) (1,114 ) (1,114 ) (720 ) Gain on disposition (4,445 )
Gains on sales of peripheral land (1,668 ) (403 ) (403 ) Dividend
income (1,033 ) (944 ) (944 ) (826 ) Interest income (2,032 ) (512
) (512 ) (666 ) Other nonoperating expense 103 143 143 238
Unallocated operating expenses and other 7,322 10,028
10,028 8,558
NOI - all centers at 100%
190,470 162,998 162,998 154,004
Less NOI of non-comparable centers (34,310 ) (1) (12,650 ) (2)
(13,881 ) (3) (10,929 ) (4)
NOI at 100% - comparable
centers 156,160 150,348
149,117 143,075 NOI - growth
% 3.9 % 4.2 % NOI at 100% -
comparable centers 156,160 150,348 149,117 143,075 Lease
cancellation income (3,608 ) (1,975 ) (1,975 ) (3,945 )
NOI at 100% - comparable centers excluding lease cancellation
income 152,552 148,373
147,142 139,130 NOI at 100%
excluding lease cancellation income - growth % 2.8
% 5.8 % (1) Includes Beverly Center,
CityOn.Xi'an, CityOn.Zhengzhou, Country Club Plaza, International
Market Place, and Starfield Hanam. (2) Includes Beverly Center and
Country Club Plaza. (3) Includes Beverly Center, Country Club
Plaza, and The Mall of San Juan. (4) Includes Beverly Center and
The Mall of San Juan.
TAUBMAN CENTERS, INC. Table
6 - Balance Sheets
As of March 31, 2017 and December 31,
2016
(in thousands of dollars) As of
March 31, 2017 December 31, 2016 Consolidated
Balance Sheet of Taubman Centers, Inc.: Assets:
Properties 4,231,943 4,173,954 Accumulated depreciation and
amortization (1,179,741 ) (1,147,390 ) 3,052,202 3,026,564
Investment in Unconsolidated Joint Ventures 572,982 604,808 Cash
and cash equivalents 51,129 40,603 Restricted cash 12,410 932
Accounts and notes receivable, net 62,137 60,174 Accounts
receivable from related parties 2,748 2,103 Deferred charges and
other assets 291,249 275,728 4,044,857
4,010,912 Liabilities: Notes payable, net 3,287,968
3,255,512 Accounts payable and accrued liabilities 327,384 336,536
Distributions in excess of investments in and net income of
Unconsolidated Joint Ventures 504,903 480,863
4,120,255 4,072,911 Redeemable noncontrolling interest 8,970
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 662,506 657,281 Accumulated other
comprehensive income (loss) (28,930 ) (35,916 ) Dividends in excess
of net income (570,535 ) (549,914 ) 63,673 72,080 Noncontrolling
interests: Noncontrolling interests in consolidated joint ventures
(155,960 ) (155,919 ) Noncontrolling interests in partnership
equity of TRG 7,919 13,136 (148,041 ) (142,783 )
(84,368 ) (70,703 ) 4,044,857 4,010,912
Combined Balance Sheet of Unconsolidated Joint Ventures
(1): Assets: Properties 3,356,646 3,371,216 Accumulated
depreciation and amortization (680,435 ) (661,611 ) 2,676,211
2,709,605 Cash and cash equivalents 75,178 83,882 Accounts and
notes receivable, net 109,788 87,612 Deferred charges and other
assets 54,225 67,167 2,915,402 2,948,266
Liabilities: Notes payable, net (2) 2,772,089 2,706,628
Accounts payable and other liabilities 362,092 359,814
3,134,181 3,066,442 Accumulated deficiency in assets:
Accumulated deficiency in assets - TRG (209,094 ) (145,679 )
Accumulated deficiency in assets - Joint Venture Partners 18,308
81,217 Accumulated other comprehensive loss - TRG (11,310 ) (20,547
) Accumulated other comprehensive loss - Joint Venture Partners
(16,683 ) (33,167 ) (218,779 ) (118,176 ) 2,915,402
2,948,266 (1) Unconsolidated Joint Venture amounts
exclude the balances of CityOn.Zhengzhou as of March 31, 2017 and
December 31, 2016. (2) The balances presented exclude the
construction financing outstanding for CityOn.Zhengzhou of $71.2
million ($34.9 million at TRG's share) and $70.5 million ($34.5
million at TRG's share) as of March 31, 2017 and December 31, 2016,
respectively.
TAUBMAN CENTERS, INC. Table 7 -
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 3.82 Restructuring charge (0.02
) (0.03 ) Costs associated with shareowner activism (1)
(0.04 ) (0.04 ) Partial write-off of deferred financing
costs (0.00 ) (0.00 )
Funds from Operations per
common share 3.60 3.75 Gain on
disposition, net of tax 0.02 0.02 Real estate depreciation -
TRG (2.34 ) (2.23 ) 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)
1.16 1.41
(1)
Amount represents actual expense
recognized through the first quarter of 2017. Amount does not
include future assumptions of costs to be incurred.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170427006674/en/
Ryan Hurren, Taubman, Director, Investor Relations,
248-258-7232rhurren@taubman.comorMaria Mainville, Taubman,
Director, Strategic Communications,
248-258-7469mmainville@taubman.com
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