TAUBMAN CENTERS INC - FORM 8-K - EX-99 - PRESS RELEASE, FEBRUARY 8, 2012

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8-K - FORM 8-K, FEBRUARY 8, 2012 - TAUBMAN CENTERS INC	form8-k.htm

Taubman Centers, Inc.

200 East Long Lake Road

Suite 300

Bloomfield Hills, Michigan

48304-2324

T 248.258.6800

www.taubman.com

CONTACT:

Barbara Baker

Taubman, Vice President, Investor Relations

248-258-7367

bbaker@taubman.com

FOR IMMEDIATE RELEASE

TAUBMAN CENTERS ANNOUNCES STRONG 2011 RESULTS AND INTRODUCES 2012 GUIDANCE

·	Record Mall Tenant Sales of $641 Per Square Foot, Up 13.7%

·	Net Operating Income (NOI) Excluding Lease Cancellation Income Up 4.9%

·	Strategic Acquisitions Completed in U.S. and China

·	The Pier Shops at Caesars and Regency Square Transferred to Mortgage Lenders

BLOOMFIELD HILLS, Mich., Feb. 8, 2012 -- Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the quarter and full year periods ended December 31, 2011.

	December 31, 2011 Three Months Ended	December 31, 2010 Three Months Ended	December 31, 2011 Year Ended	December 31, 2010 Year Ended
Net income allocable to common shareholders per diluted share (EPS)	$2.50	$0.60	$3.02	$0.86
Funds from Operations (FFO) per diluted share	$2.95	$1.06	$4.86	$2.86
Adjusted Funds from Operations (Adjusted FFO) per diluted share(1) Growth rate	$0.93 (12.3)%	$1.06	$2.84 (0.7)%	$2.86
Adjusted FFO per diluted share, excluding The Pier Shops and Regency Square Operations (1) Growth rate	$0.96 (11.9)%	$1.09	$3.05 1.7%	$3.00

(1)

Adjusted FFO excludes acquisitions costs related to the acquisitions of The Mall at Green Hills (Nashville, Tenn.), The Gardens on El Paseo/El Paseo Village (Palm Desert, Calif.), and TCBL (Beijing, China), gains on the extinguishment of debt obligations at The Pier Shops at Caesars (Atlantic City, N.J.) and Regency Square (Richmond, Va.), and the excess of the book value over the redemption amount of the Series F Preferred Equity.

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“We’re thrilled with our year,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “Our results benefited from our record tenant sales, increased rents, and our continued focus on expense control at our centers. These were partially offset by a significant reduction in lease cancellation income.”

Record Tenant Sales; Occupancy, Rents, and NOI Up

Mall tenant sales per square foot at Taubman properties were up 14.2 percent during the quarter and 13.7 percent for the year ended December 31, 2011. The resulting sales per square foot of $641 is another record for the company and for the publicly held U.S. regional mall industry. This follows a record-setting 2010 sales per square foot of $564. “We’ve now reported an unprecedented eight quarters of double-digit tenant sales increases,” said Mr. Taubman.

Leased space for Taubman’s portfolio was 92.4 percent at December 31, 2011, up from 92.0 percent on December 31, 2010. Ending occupancy was 90.7 percent on December 31, 2011, up from 90.1 percent on December 31, 2010.

Average rent per square foot for the year ended December 31, 2011 was $45.22, up 3.6 percent from $43.66 for the year ended December 31, 2010. Opening rents per square foot for the year were $56.20, up 13.1 percent from opening rents per square foot of $49.69 in 2010.

NOI excluding lease cancellation income was up 4.9 percent for the year and 2.1 percent over fourth quarter 2010. “The fundamentals of our business are outstanding,” added Mr. Taubman. “We’re firing on all cylinders. The high quality regional mall is alive and well.”

Strategic Acquisitions Completed

In December 2011, the company completed the purchase of The Mall at Green Hills (Nashville, Tenn.) and The Gardens on El Paseo and El Paseo Village (Palm Desert, Calif.). “The addition of these assets both enhance the quality of the company’s portfolio and affirm our commitment to acquisitions as a part of our external growth strategy,” said Mr. Taubman. See Taubman Completes Purchase of Davis Street Assets – December 28, 2011.

Also in December 2011, the company completed the acquisition of a 90 percent controlling interest in a leading China-based retail real estate consultancy headquartered in Beijing. The new company, Taubman TCBL, will combine the local insights and network of TCBL with Taubman’s global industry expertise and reputation and will serve as the platform for Taubman’s future investments in mainland China. See Taubman to Acquire Chinese Retail Property Consultancy, TCBL – August 8, 2011.

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City Creek Center On Pace for March 22, 2012 Opening

The grand opening of City Creek Center (Salt Lake City, Utah), the centerpiece of a 20-acre mixed-use development in downtown Salt Lake City, is scheduled for 10:00 a.m. on March 22, 2012. This is the only regional mall slated to open in the U.S. this year. The center will be anchored by Macy’s and Nordstrom. Leasing is now 92 percent committed featuring stores such as Tiffany & Co., Rolex, Hugo Boss, BCBGMAXAZRIA, Cheesecake Factory, Michael Kors, Coach and Brooks Brothers. “This is an extraordinary project, one of the most complex we’ve ever developed, and it is at the core of revitalizing the city. We believe both the design and merchandising will create a unique customer experience,” said Mr. Taubman.

International Plaza Refinancing Completed

In November 2011, the company completed a $325 million 10-year, non-recourse financing on its 50.1 percent owned International Plaza (Tampa, Fla.). The loan bears interest at an all-in fixed rate of 4.89%. The company received $25.2 million as its share of the excess proceeds, which it used to pay down its lines of credit.

Series F Preferred Equity Redeemed

In October 2011, the company successfully redeemed the Series F 8.2% Preferred Equity for $27 million, a $2.2 million discount from book value. As a result, there was a positive impact to the company’s share of earnings in the fourth quarter of 2011, due to the reduction in distributions, partially offset by a modest increase in interest expense on borrowings used for the redemption.

Dividend and Stock Performance

In December 2011, the company increased its regular quarterly dividend by 2.9 percent. Since its public offering in 1992, Taubman Centers’ dividend has been increased 14 times, achieving a 3.9 percent compounded annual growth rate.

During 2011, the company enjoyed a 27 percent total shareholder return. This compares to the MSCI US REIT Index of 8.7 percent and the S&P 500 Index of 2.1 percent. Over the 10 years ending December 31, 2011, the company's compounded annual shareholder return has been 20.5 percent. This compares to the MSCI US REIT Index of 10.2 percent and the S&P 500 Index of 2.9 percent.

The Pier Shops at Caesars and Regency Square Transferred to Mortgage Lenders

The company recently announced that titles to The Pier Shops and Regency Square have been transferred to the mortgage lenders and management of the centers has been fully transitioned. Taubman was relieved of debt obligations totaling $207.2 million plus accrued interest associated with the properties. As a result, non-cash accounting gains totaling $174.2 million were recognized in the fourth quarter of 2011 on extinguishment of the debt obligations. See The Pier Shops at Caesars Transferred to the Mortgage Lender – November 14, 2011 and Regency Square Transferred to the Mortgage Lender – January 5, 2012.

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2012 Guidance

The company is introducing guidance for 2012. The company expects FFO per diluted share to be in the range of $3.14 to $3.24 in 2012. Net income allocable to common shareholders for the year is expected to be in the range of $1.14 to $1.29.

Supplemental Investor Information Available

The company provides supplemental investor information along with its earnings announcements, available online at www.taubman.com under “Investor Relations.” This includes the following:

·	Income Statements

·	Earnings Reconciliations

·	Changes in Funds from Operations and Earnings Per Share

·	Components of Other Income, Other Operating Expense, and Nonoperating Income

·	Recoveries Ratio Analysis

·	Balance Sheets

·	Debt Summary

·	Other Debt, Equity and Certain Balance Sheet Information

·	Construction and Dispositions

·	Acquisitions

·	Capital Spending

·	Operational Statistics

·	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 12:00 p.m. (EST) on February 9 to discuss these results, business conditions, external growth prospects and the company’s outlook for 2012. The conference call will be simulcast at www.taubman.com under “Investor Relations” as well as www.earnings.com and www.streetevents.com. An online replay will follow shortly after the call and continue for approximately 90 days.

Taubman Centers is a real estate investment trust engaged in the development, leasing and management of regional and super regional shopping centers. Taubman's 26 U.S. owned, leased and/or managed properties, the most productive in the industry, serve major markets from coast to coast. Taubman Centers is headquartered in Bloomfield Hills, Michigan, and its Taubman Asia subsidiary is headquartered in Hong Kong. For more information about Taubman, visit www.taubman.com.

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References in this press release to “Taubman Centers,” “company” or “Taubman” 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.

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. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, we assume 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, but not limited to the global credit environment and the continuing impacts of the recent U.S. recession, other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, adverse changes in the retail industry and integration and other acquisition risks. Other risks and uncertainties are discussed in the company's filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.

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TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December 31, 2011 and 2010
(in thousands of dollars, except as indicated)

	Three Months Ended (5)				Year Ended (5)
	2011		2010		2011		2010

Income from continuing operations	50,422		62,760		141,399		122,606
Income (loss) from discontinued operations	170,374		(4,188	)	145,999		(20,279	)
Net income	220,796		58,572		287,398		102,327
Noncontrolling share of income of consolidated joint ventures	(3,855	)	(3,879	)	(14,352	)	(9,780	)
Noncontrolling share of income of TRG - continuing operations	(14,125	)	(15,379	)	(36,238	)	(32,813	)
Noncontrolling share of income of TRG - discontinued operations	(51,802	)	(1,358	)	(44,309	)	6,594
TRG series F preferred distributions (6)	2,217		(615	)	372		(2,460	)
Preferred stock dividends	(3,659	)	(3,659	)	(14,634	)	(14,634	)
Distributions to participating securities of TRG	(392	)	(541	)	(1,536	)	(1,635	)
Net income attributable to Taubman Centers, Inc. common shareowners	149,180		33,141		176,701		47,599
Net income per common share - basic	2.58		0.61		3.11		0.87
Net income per common share - diluted	2.50		0.60		3.02		0.86
Beneficial interest in EBITDA - Consolidated Businesses (1)	93,392		105,154		316,836		322,703
Beneficial interest in EBITDA - Unconsolidated Joint Ventures (1)	29,027		30,127		100,773		100,682
Funds from Operations (1)	253,047		88,246		411,128		237,275
Funds from Operations attributable to TCO (1)	176,108		59,624		285,400		160,138
Funds from Operations per common share - basic (1)	3.04		1.09		5.00		2.93
Funds from Operations per common share - diluted (1)	2.95		1.06		4.86		2.86
Adjusted Funds from Operations (1)	80,273		88,246		240,035		237,275
Adjusted Funds from Operations attributable to TCO (1)	55,866		59,624		166,909		160,138
Adjusted Funds from Operations per common share - basic (1)	0.96		1.09		2.92		2.93
Adjusted Funds from Operations per common share - diluted (1)	0.93		1.06		2.84		2.86
Weighted average number of common shares outstanding - basic	57,925,789		54,685,686		56,899,966		54,569,618
Weighted average number of common shares outstanding - diluted	60,564,901		56,008,080		59,400,351		55,702,813
Common shares outstanding at end of period	58,022,475		54,696,054
Weighted average units - Operating Partnership - basic	83,232,879		80,937,262		82,159,601		80,870,969
Weighted average units - Operating Partnership - diluted	85,871,990		83,130,919		84,659,994		82,875,424
Units outstanding at end of period - Operating Partnership	84,502,883		80,947,630
Ownership percentage of the Operating Partnership at end of period	68.7	%	67.6	%
Number of owned shopping centers at end of period	23		23		23		23

Operating Statistics (2):
Net Operating Income excluding lease cancellation income - growth % (3)	2.1	%			4.9	%
Mall tenant sales (3)(4)	1,670,378		1,487,634		5,164,916		4,619,896
Ending occupancy	90.7	%	90.1	%	90.7	%	90.1	%
Ending occupancy - comparable (3)	90.6	%	90.1	%	90.6	%	90.1	%
Average occupancy (3)	90.0	%	89.9	%	88.8	%	88.8	%
Leased space at end of period	92.4	%	92.0	%	92.4	%	92.0	%
Leased space at end of period - comparable (3)	92.3	%	92.0	%	92.3	%	92.0	%
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (3)(4)	11.7	%	13.1	%	13.4	%	14.5	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (3)(4)	10.7	%	11.8	%	12.2	%	13.5	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (3)(4)	11.4	%	12.7	%	13.0	%	14.1	%
Average rent per square foot - Consolidated Businesses (3)	45.60		43.64		45.53		43.63
Average rent per square foot - Unconsolidated Joint Ventures (3)	43.68		43.76		44.58		43.73
Average rent per square foot - Combined (3)	44.96		43.68		45.22		43.66

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(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 straightline adjustments of minimum rent) less maintenance, taxes, utilities, promotion, ground rent (including straightline 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 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, for its stabilized portfolio bases, separate projections for expected NOI growth and lease cancellation income.
	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 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 operating 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. For the three month period and year ended December 31, 2011, FFO was adjusted for the gains on extinguishment of debt related to the dispositions of Regency Square and The Pier Shops, acquisition costs related to The Mall at Green Hills, The Gardens on El Paseo, El Paseo Village, and TCBL, and the redemption of the Company's Series F Preferred Equity. In addition, in Tables 4 and 5 of this Press Release, the Company has also presented Adjusted FFO excluding the discontinued operations of The Pier Shops and Regency Square.
	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 common definitions. None of these non-GAAP measures should be considered alternatives to net income as an indicator of the Company's operating performance, and they do not represent cash flows from operating, investing, or financing activities as defined by GAAP.

(2)	Statistics exclude The Pier Shops and Regency Square.

(3)	Statistics exclude the 2011 acquisitions of The Mall at Green Hills, The Gardens on El Paseo, and El Paseo Village.

(4)	Based on reports of sales furnished by mall tenants.

(5)	Certain amounts for 2010 have been reclassified to conform with 2011 classification and presentation of discontinued operations of The Pier Shops and Regency Square.

(6)	In October 2011, the Company redeemed the Operating Partnership's 8.2% Series F Preferred Equity for $27 million, which represented a $2.2 million discount from the book value.

Taubman Centers/8

TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended December 31, 2011 and 2010
(in thousands of dollars)
		2011				2010
		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)

REVENUES:
	Minimum rents	91,043		40,145		86,281		40,644
	Percentage rents	10,767		4,893		6,610		3,696
	Expense recoveries	66,377		28,318		68,309		30,346
	Management, leasing, and development services	10,128				4,687
	Other	9,007		1,936		20,552		2,868
	Total revenues	187,322		75,292		186,439		77,554

EXPENSES (2):
	Maintenance, taxes, utilities, and promotion	49,380		18,993		46,334		19,701
	Other operating	19,163		3,272		15,888		3,573
	Management, leasing, and development services	4,463				2,276
	General and administrative	8,600				8,641
	Acquisition costs	3,614
	Interest expense	32,748		15,870		33,205		15,960
	Depreciation and amortization	33,204		11,406		34,641		9,743
	Total expenses	151,172		49,541		140,985		48,977

Nonoperating income		395		41		1,293		(1	)
		36,545		25,792		46,747		28,576
Income tax expense		(197	)			(186	)
Equity in income of Unconsolidated Joint Ventures		14,074				16,199

Income from continuing operations		50,422				62,760
Discontinued operations (3):
	Gains on extinguishment of debt	174,171
	EBITDA	1,535				2,802
	Interest expense	(4,053	)			(5,257	)
	Depreciation and amortization	(1,279	)			(1,733	)
Income (loss) from discontinued operations		170,374				(4,188	)

Net income		220,796				58,572
Net income attributable to noncontrolling interests:
	Noncontrolling share of income of consolidated joint ventures	(3,855	)			(3,879	)
	TRG series F preferred distributions	2,217				(615	)
	Noncontrolling share of income of TRG - continuing operations	(14,125	)			(15,379	)
	Noncontrolling share of income of TRG - discontinued operations	(51,802	)			(1,358	)
Distributions to participating securities of TRG		(392	)			(541	)
Preferred stock dividends		(3,659	)			(3,659	)
Net income attributable to Taubman Centers, Inc. common shareowners		149,180				33,141

SUPPLEMENTAL INFORMATION:
	EBITDA - 100%	104,032		53,068		117,395		54,279
	EBITDA - outside partners' share	(10,640	)	(24,041	)	(12,241	)	(24,152	)
	Beneficial interest in EBITDA	93,392		29,027		105,154		30,127
	Gains on extinguishment of debt	174,171
	Beneficial interest expense	(33,081	)	(8,201	)	(33,107	)	(8,266	)
	Beneficial income tax expense	(173	)			(186	)
	Non-real estate depreciation	(646	)			(1,202	)
	Preferred dividends and distributions (4)	(1,442	)			(4,274	)
	Fund from Operations contribution	232,221		20,826		66,385		21,861

	Net straightline adjustments to rental revenue, recoveries,
	and ground rent expense at TRG %	822		7		413		160

(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. In its consolidated financial statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.

(2)	Promotion expenses, which were previously classified in "Other operating", are now included in "Maintenance, taxes, utilities and promotion" expense. Amounts for 2010 have been reclassified to conform to the 2011 classification.

(3)	Includes the operations of Regency Square and The Pier Shops.

(4)	In October 2011, the Company redeemed the Operating Partnership's 8.2% Series F Preferred Equity for $27 million, which represented a $2.2 million discount from the book value.

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TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Year Ended December 31, 2011 and 2010
(in thousands of dollars)

		2011				2010
		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)

REVENUES:
	Minimum rents	342,612		155,711		327,580		155,382
	Percentage rents	20,358		9,001		13,063		6,567
	Expense recoveries	229,313		95,901		225,079		100,635
	Management, leasing, and development services	25,551				16,109
	Other	27,084		5,842		44,596		7,807
	Total revenues	644,918		266,455		626,427		270,391

EXPENSES (2):
	Maintenance, taxes, utilities, and promotion	179,092		67,914		177,703		73,210
	Other operating	67,301		14,365		57,354		14,447
	Management, leasing, and development services	11,955				8,258
	General and administrative	31,598				30,234
	Acquisition costs	5,295
	Interest expense	122,277		61,034		132,362		63,835
	Depreciation and amortization	132,707		39,265		145,271		38,179
	Total expenses	550,225		182,578		551,182		189,671

Nonoperating Income		1,252		162		2,683		2
		95,945		84,039		77,928		80,722
Income tax expense		(610	)			(734	)
Equity in income of Unconsolidated Joint Ventures		46,064				45,412

Income from continuing operations		141,399				122,606
Discontinued operations (3):
	Gains on extinguishment of debt	174,171
	EBITDA	3,564				8,672
	Interest expense	(21,427	)			(20,346	)
	Depreciation and amortization	(10,309	)			(8,605	)
Income (loss) from discontinued operations		145,999				(20,279	)

Net income		287,398				102,327
Net income attributable to noncontrolling interests:
	Noncontrolling share of income of consolidated joint ventures	(14,352	)			(9,780	)
	TRG series F preferred distributions	372				(2,460	)
	Noncontrolling share of income of TRG - continuing operations	(36,238	)			(32,813	)
	Noncontrolling share of income of TRG - discontinued operations	(44,309	)			6,594
Distributions to participating securities of TRG		(1,536	)			(1,635	)
Preferred stock dividends		(14,634	)			(14,634	)
Net income attributable to Taubman Centers, Inc. common shareowners		176,701				47,599


SUPPLEMENTAL INFORMATION:
	EBITDA - 100%	354,493		184,338		364,233		182,736
	EBITDA - outside partners' share	(37,657	)	(83,565	)	(41,530	)	(82,054	)
	Beneficial interest in EBITDA	316,836		100,773		322,703		100,682
	Gains on extinguishment of debt	174,171
	Beneficial interest expense	(131,575	)	(31,607	)	(131,484	)	(33,076	)
	Beneficial income tax expense	(586	)			(734	)
	Non-real estate depreciation	(2,622	)			(3,722	)
	Preferred dividends and distributions (4)	(14,262	)			(17,094	)
	Fund from Operations contribution	341,962		69,166		169,669		67,606

	Net straightline adjustments to rental revenue, recoveries,
	and ground rent expense at TRG %	994		149		627		162


(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. In its consolidated financial statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.

(2)	Promotion expenses, which were previously classified in "Other operating", are now included in "Maintenance, taxes, utilities and promotion" expense. Amounts for 2010 have been reclassified to conform to the 2011 classification.

(3)	Includes the operations of Regency Square and The Pier Shops.

(4)	In October 2011, the Company redeemed the Operating Partnership's 8.2% Series F Preferred Equity for $27 million, which represented a $2.2 million discount from the book value.

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TAUBMAN CENTERS, INC.
Table 4 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
and Adjusted Funds from Operations
For the Three Months Ended December 31, 2011 and 2010
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


	2011					2010
			Shares	Per Share				Shares	Per Share
	Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic	149,180		57,925,789	2.58		33,141		54,685,686	0.61

Distributions of participating securities	392		871,262
Add impact of share-based compensation	1,911		1,767,850			270		1,322,394

Net income attributable to TCO common shareowners - Diluted	151,483		60,564,901	2.50		33,411		56,008,080	0.60

Add depreciation of TCO's additional basis	1,720			0.03		1,720			0.03

Net income attributable to TCO common shareowners,
excluding step-up depreciation	153,203		60,564,901	2.53		35,131		56,008,080	0.63

Add:
Noncontrolling share of income of TRG - continuing operations	14,125		25,307,089			15,379		26,251,577
Noncontrolling share of income of TRG - discontinued operations	51,802					1,358
Distributions to participating securities						541		871,262

Net income attributable to partnership unitholders
and participating securities	219,130		85,871,990	2.55		52,409		83,130,919	0.63

Add (less) depreciation and amortization:
Consolidated businesses at 100% - continuing operations	33,204			0.39		34,641			0.42
Consolidated businesses at 100% - discontinued operations	1,279			0.01		1,733			0.02
Depreciation of TCO's additional basis	(1,720	)		(0.02	)	(1,720	)		(0.02	)
Noncontrolling partners in consolidated joint ventures	(3,041	)		(0.04	)	(3,007	)		(0.04	)
Share of Unconsolidated Joint Ventures	6,752			0.08		5,662			0.07
Non-real estate depreciation	(646	)		(0.01	)	(1,202	)		(0.01	)

Less impact of share-based compensation	(1,911	)		(0.02	)	(270	)

Funds from Operations	253,047		85,871,990	2.95		88,246		83,130,919	1.06

TCO's average ownership percentage of TRG	69.6	%				67.6	%

Funds from Operations attributable to TCO	176,108			2.95		59,624			1.06

Funds from Operations	253,047		85,871,990	2.95		88,246		83,130,919	1.06

Acquisition costs	3,614			0.04
Series F redemption	(2,217	)		(0.03	)
Gains on extinguishment of debt	(174,171	)		(2.03	)

Adjusted Funds from Operations	80,273		85,871,990	0.93		88,246		83,130,919	1.06

TCO's average ownership percentage of TRG	69.6	%				67.6	%

Adjusted Funds from Operations attributable to TCO	55,866			0.93		59,624			1.06




Adjusted Funds from Operations	80,273		85,871,990	0.93		88,246		83,130,919	1.06

The Pier Shops' negative Adjusted FFO	1,878			0.02		2,679			0.03
Regency Square's Adjusted FFO	640			0.01		(224	)

Adjusted Funds from Operations,
excluding The Pier Shops and Regency Square	82,791		85,871,990	0.96		90,701		83,130,919	1.09

TCO's average ownership percentage of TRG	69.6	%				67.6	%

Adjusted Funds from Operations attributable to TCO,
excluding The Pier Shops and Regency Square	57,618			0.96		61,283			1.09

Taubman Centers/11

TAUBMAN CENTERS, INC.
Table 5 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations
and Adjusted Funds from Operations
For the Year Ended December 31, 2011 and 2010
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


	2011					2010
			Shares	Per Share				Shares	Per Share
	Dollars		/Units	/Unit		Dollars		/Units (1)	/Unit

Net income attributable to TCO common shareowners - Basic	176,701		56,899,966	3.11		47,599		54,569,618	0.87

Distributions of participating securities	1,536		871,262
Add impact of share-based compensation	1,282		1,629,123			337		1,133,195

Net income attributable to TCO common shareowners - Diluted	179,519		59,400,351	3.02		47,936		55,702,813	0.86

Add depreciation of TCO's additional basis	6,880			0.12		6,880			0.12

Net income attributable to TCO common shareowners,
excluding step-up depreciation	186,399		59,400,351	3.14		54,816		55,702,813	0.98

Add:
Noncontrolling share of income of TRG - continuing operations	36,238		25,259,643			32,813		26,301,349
Noncontrolling share of income of TRG - discontinued operations	44,309					(6,594	)
Distributions to participating securities						1,635		871,262

Net income attributable to partnership unit holders
and participating securities	266,946		84,659,994	3.15		82,670		82,875,424	1.00

Add (less) depreciation and amortization:
Consolidated businesses at 100% - continuing operations	132,707			1.57		145,271			1.75
Consolidated businesses at 100% - discontinued operations	10,309			0.12		8,605			0.10
Depreciation of TCO's additional basis	(6,880	)		(0.08	)	(6,880	)		(0.08	)
Noncontrolling partners in consolidated joint ventures	(11,152	)		(0.13	)	(10,526	)		(0.13	)
Share of Unconsolidated Joint Ventures	23,102			0.27		22,194			0.27
Non-real estate depreciation	(2,622	)		(0.03	)	(3,722	)		(0.04	)

Less impact of share-based compensation	(1,282	)		(0.02	)	(337	)

Funds from Operations	411,128		84,659,994	4.86		237,275		82,875,424	2.86

TCO's average ownership percentage of TRG	69.3	%				67.5	%

Funds from Operations attributable to TCO	285,400			4.86		160,138			2.86

Funds from Operations	411,128		84,659,994	4.86		237,275		82,875,424	2.86

Acquisition costs	5,295			0.06
Series F redemption	(2,217	)		(0.03	)
Gains on extinguishment of debt	(174,171	)		(2.06	)

Adjusted Funds from Operations	240,035		84,659,994	2.84		237,275		82,875,424	2.86

TCO's average ownership percentage of TRG	69.3	%				67.5	%

Adjusted Funds from Operations attributable to TCO	166,909			2.84		160,138			2.86




Adjusted Funds from Operations	240,035		84,659,994	2.84		237,275		82,875,424	2.86

The Pier Shops' negative Adjusted FFO	14,970			0.18		10,740			0.13
Regency Square's negative Adjusted FFO	2,893			0.03		934			0.01

Adjusted Funds from Operations,
excluding The Pier Shops and Regency Square	257,898		84,659,994	3.05		248,949		82,875,424	3.00

TCO's average ownership percentage of TRG	69.3	%				67.5	%

Adjusted Funds from Operations attributable to TCO,
excluding The Pier Shops and Regency Square	178,608			3.05		167,984			3.00

Taubman Centers/12

TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended December 31, 2011 and 2010
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)

			Three Months Ended				Year Ended
			2011		2010		2011		2010

Net income			220,796		58,572		287,398		102,327

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations		33,204		34,641		132,707		145,271
	Consolidated businesses at 100% - discontinued operations		1,279		1,733		10,309		8,605
	Noncontrolling partners in consolidated joint ventures		(3,041	)	(3,007	)	(11,152	)	(10,526	)
	Share of Unconsolidated Joint Ventures		6,752		5,662		23,102		22,194

Add (less) interest expense and income tax expense:
	Interest expense:
		Consolidated businesses at 100% - continuing operations	32,748		33,205		122,277		132,362
		Consolidated businesses at 100% - discontinued operations	4,053		5,257		21,427		20,346
		Noncontrolling partners in consolidated joint ventures	(3,744	)	(5,355	)	(12,153	)	(21,224	)
		Share of Unconsolidated Joint Ventures	8,201		8,266		31,607		33,076
	Gains on extinguishment of debt		(174,171	)			(174,171	)
	Income tax expense		197		186		610		734

Less noncontrolling share of income of consolidated joint ventures			(3,855	)	(3,879	)	(14,352	)	(9,780	)

Beneficial Interest in EBITDA			122,419		135,281		417,609		423,385

TCO's average ownership percentage of TRG			69.6	%	67.6	%	69.3	%	67.5	%

Beneficial Interest in EBITDA attributable to TCO			85,197		91,403		289,217		285,685

Taubman Centers/13

TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended December 31, 2011 and 2010
(in thousands of dollars)

		Three Months Ended								Year Ended
		2011				2010				2011				2010

Net income		220,796				58,572				287,398				102,327

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	33,204				34,641				132,707				145,271
	Consolidated businesses at 100% - discontinued operations	1,279				1,733				10,309				8,605
	Noncontrolling partners in consolidated joint ventures	(3,041	)			(3,007	)			(11,152	)			(10,526	)
	Share of Unconsolidated Joint Ventures	6,752				5,662				23,102				22,194

Add (less) interest expense and income tax expense:
	Interest expense:
	Consolidated businesses at 100% - continuing operations	32,748				33,205				122,277				132,362
	Consolidated businesses at 100% - discontinued operations	4,053				5,257				21,427				20,346
	Noncontrolling partners in consolidated joint ventures	(3,744	)			(5,355	)			(12,153	)			(21,224	)
	Share of Unconsolidated Joint Ventures	8,201				8,266				31,607				33,076
	Gains on extinguishment of debt	(174,171	)							(174,171	)
	Income tax expense	197				186				610				734

Less noncontrolling share of income of consolidated joint ventures		(3,855	)			(3,879	)			(14,352	)			(9,780	)

Add EBITDA attributable to outside partners:
	EBITDA attributable to noncontrolling partners in consolidated joint ventures	10,640				12,241				37,657				41,530
	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	24,041				24,152				83,565				82,054

EBITDA at 100%		157,100				171,674				538,831				546,969

Add (less) items excluded from shopping center NOI:
	General and administrative expenses	8,600				8,641				31,598				30,234
	Management, leasing, and development services, net	(5,665	)			(2,411	)			(13,596	)			(7,851	)
	Acquisition costs	3,614								5,295
	Gains on sales of peripheral land					(1,178	)			(519	)			(2,218	)
	Interest income	(436	)			(133	)			(895	)			(586	)
	Straight-line of rents	(1,152	)			(1,131	)			(2,531	)			(2,701	)
	Non-center specific operating expenses and other	11,026				7,726				33,004				24,337

Net Operating Income - all centers at 100%		173,087				183,188				591,187				588,184

Less - Net Operating Income of non-comparable centers		(2,209	)	(1	)	(2,735	)	(2	)	(4,120	)	(1	)	(8,396	)	(2	)

NOI at 100% - comparable centers		170,878				180,453				587,067				579,788

NOI - growth %		-5.3	%							1.3	%

NOI at 100% - comparable centers		170,878				180,453				587,067				579,788

Lease cancellation income		(244	)			(13,335	)			(3,230	)			(23,464	)

NOI at 100% - comparable centers excluding lease cancellation income		170,634				167,118				583,837				556,324

NOI excluding lease cancellation income - growth %		2.1	%							4.9	%


(1)	Includes The Pier Shops, Regency Square, The Mall at Green Hills, The Gardens on El Paseo, and El Paseo Village.
(2)	Includes The Pier Shops and Regency Square.

Taubman Centers/14

TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of December 31, 2011 and December 31, 2010
(in thousands of dollars)
		As of
		December 31, 2011		December 31, 2010
Consolidated Balance Sheet of Taubman Centers, Inc. :

Assets:
	Properties	4,020,954		3,528,297
	Accumulated depreciation and amortization	(1,271,943	)	(1,199,247	)
		2,749,011		2,329,050
	Investment in Unconsolidated Joint Ventures	75,582		77,122
	Cash and cash equivalents	24,033		19,291
	Restricted cash (1)	295,318		7,599
	Accounts and notes receivable, net	59,990		49,906
	Accounts receivable from related parties	1,418		1,414
	Deferred charges and other assets	131,440		62,491
		3,336,792		2,546,873

Liabilities:
	Notes payable	2,864,135		2,656,560
	Installment notes (1)	281,467
	Accounts payable and accrued liabilities	255,146		247,895
	Distributions in excess of investments in and net income of
	Unconsolidated Joint Ventures	192,257		170,329
		3,593,005		3,074,784

Redeemable noncontrolling interests (2)		84,235

Equity:
	Taubman Centers, Inc. Shareowners' Equity:
	Series B Non-Participating Convertible Preferred Stock	26		26
	Series G Cumulative Redeemable Preferred Stock
	Series H Cumulative Redeemable Preferred Stock
	Common stock	580		547
	Additional paid-in capital	673,923		589,881
	Accumulated other comprehensive income (loss)	(27,613	)	(14,925	)
	Dividends in excess of net income	(863,040	)	(939,290	)
		(216,124	)	(363,761	)
	Noncontrolling interests:
	Noncontrolling interests in consolidated joint ventures	(101,872	)	(100,355	)
	Noncontrolling interests in partnership equity of TRG	(22,452	)	(93,012	)
	Preferred Equity of TRG	-		29,217
		(124,324	)	(164,150	)
		(340,448	)	(527,911	)
		3,336,792		2,546,873



Combined Balance Sheet of Unconsolidated Joint Ventures :

Assets:
	Properties	1,107,314		1,092,916
	Accumulated depreciation and amortization	(446,059	)	(417,712	)
		661,255		675,204
	Cash and cash equivalents	22,042		21,339
	Accounts and notes receivable, net	24,628		26,288
	Deferred charges and other assets	21,289		18,891
		729,214		741,722

Liabilities:
	Notes payable	1,138,808		1,125,618
	Accounts payable and other liabilities, net	55,737		37,292
		1,194,545		1,162,910

Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG	(235,525	)	(222,109	)
	Accumulated deficiency in assets - Joint Venture Partners	(211,478	)	(194,438	)
	Accumulated other comprehensive income (loss) - TRG	(9,233	)	(2,527	)
	Accumulated other comprehensive income (loss) - Joint Venture Partners	(9,095	)	(2,114	)
		(465,331	)	(421,188	)
		729,214		741,722

(1)	Installment notes will be paid on February 21, 2012 with restricted cash drawn on Company's line of credit as of December 31, 2011.

(2)	Includes $72.7 million of equity issued relating to the acquisitions of The Mall at Green Hills, The Gardens on El Paseo, and El Paseo Village as well as $11.5 million relating to the ownership interest in Taubman TCBL.

Taubman Centers/15

TAUBMAN CENTERS, INC.
Table 9 - Annual Guidance
(all dollar amounts per common share on a diluted basis; amounts may not add due to rounding)

	Guidance for 2012
	Range for Year Ended
	December 31, 2012


Funds from Operations per common share	3.14		3.24

Real estate depreciation - TRG	(1.87	)	(1.82	)

Distributions on participating securities of TRG	(0.02	)	(0.02	)

Depreciation of TCO's additional basis in TRG	(0.12	)	(0.12	)

Net income attributable to common shareowners, per common share (EPS)	1.14		1.29

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