TAUBMAN CENTERS INC - FORM 8-K - EX-99 - EXHIBIT

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8-K - 8-K - TAUBMAN CENTERS INC	a2012q48k.htm



Taubman Centers, Inc.	T 248.258.6800
200 East Long Lake Road	www.taubman.com
Suite 300
Bloomfield Hills, Michigan
48304-2324

CONTACT:

Barbara Baker

Taubman, Vice President, Investor Relations

248-258-7367

bbaker@taubman.com

FOR IMMEDIATE RELEASE

TAUBMAN CENTERS ANNOUNCES STRONG 2012 RESULTS AND INTRODUCES 2013 GUIDANCE


•	Net Operating Income (NOI) Excluding Lease Cancellation Income Up 7.2%


•	Record Tenant Sales Per Square Foot of $688, Up 7.3%


•	Leased Space, Ending Occupancy, Average Rent Up


•	Third Taubman Asia Development Announced

BLOOMFIELD HILLS, Mich., Feb. 13, 2013 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the quarter and full year periods ended December 31, 2012.

“2012 was a very productive and successful year for our company,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “The core produced tremendous results, and we established a development pipeline that will fuel growth for years to come.”



		December 31, 2012 Three Months Ended	December 31, 2011 Three Months Ended	December 31, 2012 Year Ended	December 31, 2011 Year Ended
Net income allocable to common shareholders per diluted share (EPS)		$0.44	$2.50	$1.37	$3.03
Funds from Operations (FFO) per diluted share Growth rate		$0.94 (68.1)%	$2.95	$3.21 (34.0)%	$4.86
Adjusted Funds from Operations (Adjusted FFO) per diluted share Growth rate		$1.00 ⁽¹⁾ 7.5%	$0.93 ⁽³⁾	$3.34 ⁽¹⁾⁽²⁾ 17.6%	$2.84 ⁽³⁾
Adjusted FFO per diluted share (excluding The Pier Shops and Regency Square) Growth rate		$1.00 ⁽¹⁾ 4.2%	$0.96 ⁽³⁾	$3.34 ⁽¹⁾⁽²⁾ 9.5%	$3.05 ⁽³⁾
(1)	Excludes a charge related to the early extinguishment of debt at The Mall at Millenia (Orlando, Fla.) and PRC taxes on sale of Taubman TCBL assets.
(2)	Excludes charges related to the redemption of the Series G and H Preferred Stock.
(3)	Excludes gain on extinguishment of debt related to the dispositions of Regency Square (Richmond, Va.) and The Pier Shops (Atlantic City, N.J.) and a gain on the redemption of the Company's Series F Preferred Equity. Also excludes certain acquisition costs.

See notes to Table I of this press release for further information.

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Taubman Centers /2

Sales, Leased Space, Occupancy, Rent, and NOI Up

During 2012 the company's properties achieved average tenant sales per square foot of $688, another record for the company and the publicly held U.S. regional mall industry. This is an increase of 7.3 percent from the comparable portfolio in 2011. For the fourth quarter of 2012, mall tenant sales per square foot were up 3.5 percent.

Leased space in comparable centers for Taubman's portfolio was 93.2 percent on December 31, 2012, up 0.9 percent from 92.3 percent on December 31, 2011. Ending occupancy in comparable centers was 91.6 percent on December 31, 2012, up a solid 1 percent from 90.6 percent on December 31, 2011. Including tenants with leases of one year or less (temporary in-line tenants), ending occupancy was 96.6 percent.

Average rent per square foot for the fourth quarter of 2012 was $47.30, up 5.2 percent from $44.96 in the fourth quarter of 2011. For the year, average rent per square foot was $46.69, up 3.3 percent from average rent per square foot of $45.22 in 2011.

“NOI excluding lease cancellation income was up 7.2 percent in 2012. This is the highest growth rate we've had in 10 years,” added Mr. Taubman. “We've really capitalized on our remarkable tenant sales performance over the last several years. This result also reflects the aggressive management of our costs.”

Development and Acquisitions

The company continues to build on its successful history of growth with acquisitions and progress on developments both in the U.S. and in Asia. During 2012 the company:

•

Celebrated the opening of City Creek Center in Salt Lake City, Utah, the first enclosed regional shopping center to open in the United States in six years. City Creek Center is the retail component of City Creek, the 23-acre, mixed-use development on three blocks in the heart of downtown Salt Lake City. See Taubman's City Creek Center Opens to Thousands, Many From Around the World - March 22, 2012.


•	Broke ground on Taubman Prestige Outlets Chesterfield, located in the western St. Louis suburban city of Chesterfield, Missouri, a 49-acre open-air shopping center that will feature 450,000 square feet of retail space with more than 100 stores. See Taubman Breaks Ground on High-end Outlet Mall in Suburban St. Louis - April 5, 2012.

•

Announced a joint venture with Beijing Wangfujing Department Store (Group) Co., Ltd (Wangfujing), one of China's largest department store chains. The joint venture will own a controlling interest in and manage an approximately 1 million square foot shopping center to be located at Xi'an Saigao City Plaza. See Taubman Asia and Beijing Wangfujing Department Store (Group) Co., Ltd Announce Joint Venture to Invest in and Manage an Over One Million Square Foot Shopping Center in Xi'an, China - August 29, 2012.

•

Broke ground on The Mall of San Juan, the island of Puerto Rico's first luxury development. The two-level upscale shopping center will feature the first Saks Fifth Avenue and Nordstrom in the Caribbean and approximately 100 stores and restaurants, 60 percent of which are expected to be new to the island. See Taubman And New Century Development Break Ground On The Mall Of San Juan - September 20, 2012.

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Taubman Centers /3


•	Broke ground on The Mall at University Town Center, a two-level enclosed mall in Sarasota, Florida anchored by Saks Fifth Avenue, Dillard's and Macy's. See Taubman And Benderson Development Company Begin Construction On The Mall At University Town Center In Sarasota, Fla. - October 15, 2012


•	Invested in a joint venture with Shinsegae Group, South Korea's largest retailer. The joint venture will build, lease, and manage a western-style 1.7 million square foot shopping mall in Hanam, Gyeonggi Province, South Korea, an eastern suburb of Seoul. This will be the largest shopping center in Korea. See Taubman Centers Announces Strong Third Quarter Results - October 24, 2012.


•	Acquired an additional 49.9 percent interest in International Plaza (Tampa, Fla.) for $437 million, bringing the company's ownership in the center to 100%. See Taubman Announces Acquisitions Of Additional Interests In International Plaza And Waterside Shops - December 19, 2012.


•	Acquired an additional 25 percent interest in Waterside Shops (Naples, Fla.) for $78 million, bringing the company's ownership in the center to 50 percent. See Taubman Announces Acquisitions Of Additional Interests In International Plaza And Waterside Shops - December 19, 2012.

Last week, the company confirmed its third Taubman Asia investment and its second joint venture with Wangfujing in China. The joint venture will own a majority interest in and manage an approximately one million square foot multi-level shopping center to be located in Zhengzhou. The center is scheduled to open in 2015. See Taubman Asia and Beijing Wangfujing Department Store (Group) Co., Ltd Announce Second Joint Venture to Co-Own and Manage an Over One Million Square Foot Shopping Center in Zhengzhou, China - February 7, 2013.

Financing Activity

“This year we issued over $400 million in attractively priced common and preferred stock and completed a number of refinancings with very favorable terms,” said Lisa A. Payne, vice chairman and chief financial officer. “These transactions enabled us to reduce our average interest rate and further strengthen our balance sheet.” In 2012, the company:


•	Completed a $320 million, 10-year, non-recourse financing bearing interest at an all-in fixed rate of 4.53 percent on its 79 percent owned Westfarms mall (West Hartford, Conn.) - June 11, 2012.


•	Issued 2,875,000 common shares, including the exercise of the underwriter's option, in an underwritten public offering; net proceeds totaled $209 million - August 6, 2012.


•	Issued $192.5 million of perpetual 6.5% Series J Cumulative Redeemable Preferred Stock (NYSE: TCO PR J) at a price of $25.00 per share - August 14, 2012.


•	Completed a $190 million, 10-year, non-recourse financing bearing interest at an all-in fixed rate of 4.47% on the company's 50 percent owned Sunvalley (Concord, Calif.) shopping center - August 31, 2012.


•	Redeemed the company's $100 million 8% Series G Cumulative Redeemable Preferred Stock (NYSE: TCO PR G) and its $87 million 7.625% Series H Cumulative Redeemable Preferred Stock (NYSE: TCO PR H) - September 4, 2012.


•	Completed a $350 million, 12-year, non-recourse financing bearing interest at an all-in fixed rate of 4.05% on the company's 50 percent owned Mall at Millenia - October 2, 2012.

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Taubman Centers /4

On January 11, 2013, the company completed a $225 million, 10-year, non-recourse financing on Great Lakes Crossing Outlets (Auburn Hills, Mich.). The loan bears interest at an all-in fixed rate of 3.63%. The company received approximately $100 million of excess proceeds after the repayment of the previously outstanding $126 million, 5.25% fixed rate loan. Excess proceeds were used to reduce outstanding borrowings under the company's revolving lines of credit.

Stock Performance

During 2012, the company enjoyed a 29.7 percent total shareholder return. This compares to the MSCI US REIT Index of 17.7 percent and the S&P 500 Index of 15.9 percent. Over the 10 years ended December 31, 2012, the company's compounded annual shareholder return was 21.8 percent. The company's 10 year total return was the highest in the publicly held U.S. regional mall industry and placed the company fourth of the 85 U.S. REIT's that have operated during this period. This compares very favorably to the 10 year total returns of the MSCI US REIT Index and the S&P 500 Index which were 11.6 percent and 7.1 percent, respectively.

2013 Guidance

The company is introducing guidance for 2013. The company expects FFO per diluted share to be in the range of $3.57 to $3.70 in 2013. Net income allocable to common shareholders for the year is expected to be in the range of $1.67 to $1.85.

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


•	Acquisitions


•	Capital Spending


•	Operational Statistics


•	Owned Centers


•	Major Tenants in Owned Portfolio


•	Anchors in Owned Portfolio


•	Operating Statistics Glossary

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Taubman Centers /5

Investor Conference Call

The company will host a conference call at 11:00 AM Eastern Standard Time on Thursday, February 14 to discuss these results, business conditions and the company's outlook for 2013. 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 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. Taubman is currently developing Taubman Prestige Outlets Chesterfield in Chesterfield, Mo.; The Mall at University Town Center in Sarasota, Fla.; The Mall of San Juan in San Juan, Puerto Rico; and shopping malls in Xi'an and Zhengzhou, China and Hanam, South Korea. Taubman Centers is headquartered in Bloomfield Hills, Mich. and Taubman Asia, the platform for Taubman Centers' expansion into China and South Korea, is headquartered in Hong Kong. Founded in 1950, Taubman has more than 60 years of experience in the shopping center industry. For more information about Taubman, visit 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. 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. 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.

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Taubman Centers/6



TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December 31, 2012 and 2011
(in thousands of dollars, except as indicated)

	Three Months Ended				Year Ended
	2012		2011		2012		2011

Income from continuing operations	49,131		50,422		157,817		141,399
Income from discontinued operations			170,374				145,999
Net income	49,131		220,796		157,817		287,398
Noncontrolling share of income of consolidated joint ventures	(5,142)		(3,855)		(11,930)		(14,352)
Noncontrolling share of income of TRG - continuing operations	(12,608)		(14,125)		(39,713)		(36,238)
Noncontrolling share of income of TRG - discontinued operations			(51,802)				(44,309)
TRG series F preferred distributions (1)			2,217				372
Preferred stock dividends (2)	(3,071)		(3,659)		(21,051)		(14,634)
Distributions to participating securities of TRG	(403)		(392)		(1,612)		(1,536)
Net income attributable to Taubman Centers, Inc. common shareowners	27,907		149,180		83,511		176,701
Net income per common share - basic	0.45		2.58		1.39		3.11
Net income per common share - diluted	0.44		2.50		1.37		3.03
Beneficial interest in EBITDA - Combined (3)	133,108		296,590		475,214		591,780
Adjusted Beneficial interest in EBITDA - Combined (3)	133,108		126,033		475,214		422,904
Funds from Operations (3)	85,531		253,047		284,680		411,128
Funds from Operations attributable to TCO (3)	59,995		176,108		197,671		285,400
Funds from Operations per common share - basic (3)	0.97		3.04		3.30		5.00
Funds from Operations per common share - diluted (3)	0.94		2.95		3.21		4.86
Adjusted Funds from Operations (3)	90,275		80,273		295,836		240,035
Adjusted Funds from Operations attributable to TCO (3)	63,322		55,866		205,430		166,909
Adjusted Funds from Operations per common share - basic (3)	1.02		0.96		3.43		2.92
Adjusted Funds from Operations per common share - diluted (3)	1.00		0.93		3.34		2.84
Weighted average number of common shares outstanding - basic	61,899,628		57,925,789		59,884,455		56,899,966
Weighted average number of common shares outstanding - diluted	63,341,516		60,564,901		61,376,444		58,529,089
Common shares outstanding at end of period	63,310,148		58,022,475
Weighted average units - Operating Partnership - basic	88,245,612		83,232,879		86,306,256		82,159,601
Weighted average units - Operating Partnership - diluted	90,558,761		85,871,990		88,669,507		84,659,994
Units outstanding at end of period - Operating Partnership	88,656,297		84,502,883
Ownership percentage of the Operating Partnership at end of period	71.4	%	68.7	%
Number of owned shopping centers at end of period	24		23		24		23

Operating Statistics (4):
Net Operating Income excluding lease cancellation income - growth % (5)	4.6	%			7.2	%
Mall tenant sales - all centers (6)	1,879,341		1,670,378		6,008,265		5,164,916
Mall tenant sales - comparable (5)(6)	1,741,660		1,670,378		5,587,505		5,164,916
Ending occupancy - all centers	91.8	%	90.7	%	91.8	%	90.7	%
Ending occupancy - comparable (5)	91.6	%	90.6	%	91.6	%	90.6	%
Average occupancy - all centers	91.4	%	90.1	%	90.3	%	88.8	%
Average occupancy - comparable (5)	91.3	%	90.0	%	90.3	%	88.8	%
Leased space - all centers	93.4	%	92.4	%	93.4	%	92.4	%
Leased space - comparable (5)	93.2	%	92.3	%	93.2	%	92.3	%
All centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (6)	11.6	%	11.7	%	12.8	%	13.4	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (6)	11.0	%	10.7	%	12.2	%	12.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (6)	11.3	%	11.4	%	12.7	%	13.0	%
Comparable centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (5)(6)	11.6	%	11.7	%	13.1	%	13.4	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (6)	11.0	%	10.7	%	12.2	%	12.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (5)(6)	11.3	%	11.4	%	12.8	%	13.0	%
Average rent per square foot - Consolidated Businesses (5)	47.80		45.60		47.28		45.53
Average rent per square foot - Unconsolidated Joint Ventures	46.25		43.68		45.44		44.58
Average rent per square foot - Combined (5)	47.30		44.96		46.69		45.22

Taubman Centers/7



(1)	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.
(2)	In September 2012, the Company redeemed the Series G and H Preferred Stock with the proceeds from the issuance of the Series J Preferred Stock. The Company redeemed the 8.0% Series G Preferred Stock for $100 million and the 7.625% Series H Preferred Stock for $87 million, which represented a $3.3 million and $3.1 million premium, respectively, above the book value.
(3)	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 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.
	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 month period and year ended December 31, 2012, FFO was adjusted for a charge related to the early extinguishment of debt at The Mall at Millenia and PRC taxes on sale of Taubman TCBL assets. In addition, for the year ended December 31, 2012, FFO was also adjusted for charges related to the redemption of the Series G and H Preferred Stock. 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 and El Paseo Village, and Taubman TCBL, and the redemption of the Company's Series F Preferred Equity. In the reconciliations in Tables 4 and 5 of this Press Release, the Company has separately presented the prior year impacts of The Pier Shops and Regency Square, as the titles for these centers were transferred to the lenders and operations of these centers have been reclassified to discontinued operations. For the three month period and year ended December 31, 2011, EBITDA was adjusted for the gains on extinguishment of debt related to the dispositions of Regency Square and The Pier Shops and acquisition costs related to The Mall at Green Hills, The Gardens on El Paseo and El Paseo Village, and Taubman TCBL.
	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.
(4)	Statistics exclude The Pier Shops and Regency Square.
(5)	Statistics exclude non-comparable centers.
(6)	Based on reports of sales furnished by mall tenants.

Taubman Centers/8



TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended December 31, 2012 and 2011
(in thousands of dollars)
				2012				2011
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		106,058		42,611		91,043		40,145
		Percentage rents		15,259		4,897		10,767		4,893
		Expense recoveries		72,927		29,945		66,377		28,318
		Management, leasing, and development services		4,370				10,128
		Other		11,092		2,167		9,007		1,936
			Total revenues	209,706		79,620		187,322		75,292

EXPENSES:
		Maintenance, taxes, utilities, and promotion		57,698		20,802		49,380		18,993
		Other operating		20,843		3,429		19,163		3,272
		Management, leasing, and development services		5,743				4,463
		General and administrative		11,638				8,600
		Acquisition costs						3,614
		Interest expense (2)		33,470		20,653		32,748		15,870
		Depreciation and amortization		40,434		11,643		33,204		11,406
			Total expenses	169,826		56,527		151,172		49,541

Nonoperating income				26		(1	)	395		41
				39,906		23,092		36,545		25,792
Income tax expense (3)				(3,526	)			(197	)
Equity in income of Unconsolidated Joint Ventures				12,751				14,074

Income from continuing operations				49,131				50,422
Discontinued operations (4):
		Gains on extinguishment of debt						174,171
		EBITDA						1,535
		Interest expense						(4,053	)
		Depreciation and amortization						(1,279	)
Income from discontinued operations								170,374

Net income				49,131				220,796
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(5,142	)			(3,855	)
		TRG series F preferred distributions (5)						2,217
		Noncontrolling share of income of TRG - continuing operations		(12,608	)			(14,125	)
		Noncontrolling share of income of TRG - discontinued operations						(51,802	)
Distributions to participating securities of TRG				(403	)			(392	)
Preferred stock dividends				(3,071	)			(3,659	)
Net income attributable to Taubman Centers, Inc. common shareowners				27,907				149,180

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		113,810		55,388		278,203		53,068
		EBITDA - outside partners' share		(11,133	)	(24,957	)	(10,640	)	(24,041	)
		Beneficial interest in EBITDA		102,677		30,431		267,563		29,027
		Beneficial interest expense (2)		(29,519	)	(10,778	)	(33,081	)	(8,201	)
		Beneficial income tax expense		(3,526	)			(173	)
		Non-real estate depreciation		(683	)			(646	)
		Preferred dividends and distributions		(3,071	)			(1,442	)
		Funds from Operations contribution		65,878		19,653		232,221		20,826

		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	983		201		822		7

		Purchase accounting adjustments - minimum rents		212

		Purchase accounting adjustments - interest expense reduction		(858	)

(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	)	Includes a charge related to the early extinguishment of debt at The Mall of Millenia in October 2012 of $3.2 million, of which TRG's share is $1.6 million.
(3	)	Includes PRC taxes of $3.2 million on the sale of Taubman TCBL assets.
(4	)	Includes the operations of Regency Square and The Pier Shops.
(5	)	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/9



TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For Year Ended December 31, 2012 and 2011
(in thousands of dollars)
				2012				2011
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		398,306		161,824		342,612		155,711
		Percentage rents		28,026		10,694		20,358		9,001
		Expense recoveries		258,252		102,506		229,313		95,901
		Management, leasing, and development services		31,811				25,551
		Other		31,579		7,112		27,084		5,842
			Total revenues	747,974		282,136		644,918		266,455

EXPENSES:
		Maintenance, taxes, utilities, and promotion		201,552		73,004		179,092		67,914
		Other operating		73,203		14,890		67,301		14,365
		Management, leasing, and development services		27,417				11,955
		General and administrative		39,659				31,598
		Acquisition costs						5,295
		Interest expense (2)		142,616		68,760		122,277		61,034
		Depreciation and amortization		149,517		38,333		132,707		39,265
			Total expenses	633,964		194,987		550,225		182,578

Nonoperating income				277		18		1,252		162
				114,287		87,167		95,945		84,039
Income tax expense (3)				(4,964	)			(610	)
Equity in income of Unconsolidated Joint Ventures				48,494				46,064

Income from continuing operations				157,817				141,399
Discontinued operations (4):
		Gains on extinguishment of debt						174,171
		EBITDA						3,564
		Interest expense						(21,427	)
		Depreciation and amortization						(10,309	)
Income from discontinued operations								145,999

Net income				157,817				287,398
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(11,930	)			(14,352	)
		TRG series F preferred distributions (5)						372
		Noncontrolling share of income of TRG - continuing operations		(39,713	)			(36,238	)
		Noncontrolling share of income of TRG - discontinued operations						(44,309	)
Distributions to participating securities of TRG				(1,612	)			(1,536	)
Preferred stock dividends (6)				(21,051	)			(14,634	)
Net income attributable to Taubman Centers, Inc. common shareowners				83,511				176,701

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		406,420		194,260		528,664		184,338
		EBITDA - outside partners' share		(38,250	)	(87,216	)	(37,657	)	(83,565	)
		Beneficial interest in EBITDA		368,170		107,044		491,007		100,773
		Beneficial interest expense (2)		(126,031	)	(35,862	)	(131,575	)	(31,607	)
		Beneficial income tax expense		(4,919	)			(586	)
		Non-real estate depreciation		(2,671	)			(2,622	)
		Preferred dividends and distributions		(21,051	)			(14,262	)
		Funds from Operations contribution		213,498		71,182		341,962		69,166

		Net straightline adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	3,527		561		994		149

		Purchase accounting adjustments - minimum rents		822

		Purchase accounting adjustments - interest expense reduction		(3,431	)

(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	)	Includes a charge related to the early extinguishment of debt at The Mall of Millenia in October 2012 of $3.2 million, of which TRG's share is $1.6 million.
(3	)	Includes PRC taxes of $3.2 million on the sale of Taubman TCBL assets.
(4	)	Includes the operations of Regency Square and The Pier Shops.
(5	)	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.
(6	)	In September 2012, the Company redeemed the Series G and H Preferred Stock with the proceeds from the issuance of the 6.5% Series J Preferred Stock (par value $192.5 million). The Company redeemed the 8.0% Series G Preferred Stock for $100 million and the 7.625% Series H Preferred Stock for $87 million, which represented a $3.3 million and $3.1 million premium, respectively, above the book value.

Taubman Centers/10



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, 2012 and 2011
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2012					2011
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		27,907		61,899,628	0.45		149,180		57,925,789	2.58

Distributions of participating securities							392		871,262
Add impact of share-based compensation		202		1,441,888			1,911		1,767,850

Net income attributable to TCO common shareowners - Diluted		28,109		63,341,516	0.44		151,483		60,564,901	2.50

Add depreciation of TCO's additional basis		1,717			0.03		1,720			0.03

Net income attributable to TCO common shareowners,
	excluding step-up depreciation	29,826		63,341,516	0.47		153,203		60,564,901	2.53

Add:
	Noncontrolling share of income of TRG - continuing operations	12,608		26,345,983			14,125		25,307,089
	Noncontrolling share of loss of TRG - discontinued operations						51,802
	Distributions to participating securities	403		871,262

Net income attributable to partnership unitholders
	and participating securities	42,837		90,558,761	0.47		219,130		85,871,990	2.55

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	40,434			0.45		33,204			0.39
	Consolidated businesses at 100% - discontinued operations						1,279			0.01
	Depreciation of TCO's additional basis	(1,717	)		(0.02	)	(1,720	)		(0.02	)
	Noncontrolling partners in consolidated joint ventures	(2,040	)		(0.02	)	(3,041	)		(0.04	)
	Share of Unconsolidated Joint Ventures	6,902			0.08		6,752			0.08
	Non-real estate depreciation	(683	)		(0.01	)	(646	)		(0.01	)

Less impact of share-based compensation		(202	)		(0.00)		(1,911	)		(0.02	)

Funds from Operations		85,531		90,558,761	0.94		253,047		85,871,990	2.95

TCO's average ownership percentage of TRG		70.1	%				69.6	%

Funds from Operations attributable to TCO		59,995			0.94		176,108			2.95

Funds from Operations		85,531		90,558,761	0.94		253,047		85,871,990	2.95

Early extinguishment of debt on The Mall at Millenia		1,586			0.02
PRC taxes on sale of Taubman TCBL assets		3,158			0.03
Acquisition costs							3,614			0.04
Series F Preferred Equity redemption							(2,217	)		(0.03	)
Gains on extinguishment of debt							(174,171	)		(2.03	)

Adjusted Funds from Operations		90,275		90,558,761	1.00		80,273		85,871,990	0.93

TCO's average ownership percentage of TRG		70.1	%				69.6	%

Adjusted Funds from Operations attributable to TCO		63,322			1.00		55,866			0.93





Adjusted Funds from Operations							80,273		85,871,990	0.93

The Pier Shops' and Regency Square's negative FFO							2,518			0.03

Adjusted Funds from Operations,
	excluding The Pier Shops and Regency Square						82,791		85,871,990	0.96

TCO's average ownership percentage of TRG							69.6	%

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

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, 2012 and 2011
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2012					2011
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		83,511		59,884,455	1.39		176,701		56,899,966	3.11

Add impact of share-based compensation		672		1,491,989			921		1,629,123

Net income attributable to TCO common shareowners - Diluted		84,183		61,376,444	1.37		177,622		58,529,089	3.03

Add depreciation of TCO's additional basis		6,876			0.11		6,880			0.12

Net income attributable to TCO common shareowners,
	excluding step-up depreciation	91,059		61,376,444	1.48		184,502		58,529,089	3.15

Add:
	Noncontrolling share of income of TRG - continuing operations	39,713		26,421,801			36,238		25,259,643
	Noncontrolling share of income of TRG - discontinued operations						44,309
	Distributions to participating securities of TRG	1,612		871,262			1,536		871,262

Net income attributable to partnership unitholders
	and participating securities	132,384		88,669,507	1.49		266,585		84,659,994	3.15

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	149,517			1.69		132,707			1.57
	Consolidated businesses at 100% - discontinued operations						10,309			0.12
	Depreciation of TCO's additional basis	(6,876	)		(0.08	)	(6,880	)		(0.08	)
	Noncontrolling partners in consolidated joint ventures	(9,690	)		(0.11	)	(11,152	)		(0.13	)
	Share of Unconsolidated Joint Ventures	22,688			0.26		23,102			0.27
	Non-real estate depreciation	(2,671	)		(0.03	)	(2,622	)		(0.03	)

Less impact of share-based compensation		(672	)		(0.01	)	(921	)		(0.01	)

Funds from Operations		284,680		88,669,507	3.21		411,128		84,659,994	4.86

TCO's average ownership percentage of TRG		69.4	%				69.3	%

Funds from Operations attributable to TCO		197,671			3.21		285,400			4.86

Funds from Operations		284,680		88,669,507	3.21		411,128		84,659,994	4.86

Series G and H Preferred Stock redemption charges		6,412			0.07
Early extinguishment of debt on The Mall at Millenia		1,586			0.02
PRC taxes on sale of Taubman TCBL assets		3,158			0.04
Acquisition costs							5,295			0.06
Series F Preferred Equity redemption							(2,217	)		(0.03	)
Gains on extinguishment of debt							(174,171	)		(2.06	)

Adjusted Funds from Operations		295,836		88,669,507	3.34		240,035		84,659,994	2.84

TCO's average ownership percentage of TRG		69.4	%				69.3	%

Adjusted Funds from Operations attributable to TCO		205,430			3.34		166,909			2.84





Adjusted Funds from Operations							240,035		84,659,994	2.84

The Pier Shops' and Regency Square's negative FFO							17,863			0.21

Adjusted Funds from Operations,
	excluding The Pier Shops and Regency Square						257,898		84,659,994	3.05

TCO's average ownership percentage of TRG							69.3	%

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

Taubman Centers/12



TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended December 31, 2012 and 2011
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)

			Three Months Ended				Year Ended
			2012		2011		2012		2011

Net income			49,131		220,796		157,817		287,398

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations		40,434		33,204		149,517		132,707
	Consolidated businesses at 100% - discontinued operations				1,279				10,309
	Noncontrolling partners in consolidated joint ventures		(2,040	)	(3,041	)	(9,690	)	(11,152	)
	Share of Unconsolidated Joint Ventures		6,902		6,752		22,688		23,102

Add (less) interest expense and income tax expense:
	Interest expense:
		Consolidated businesses at 100% - continuing operations	33,470		32,748		142,616		122,277
		Consolidated businesses at 100% - discontinued operations			4,053				21,427
		Noncontrolling partners in consolidated joint ventures	(3,951	)	(3,744	)	(16,585	)	(12,153	)
		Share of Unconsolidated Joint Ventures	10,778		8,201		35,862		31,607
	Share of income tax expense		3,526		197		4,919		610

Less noncontrolling share of income of consolidated joint ventures			(5,142	)	(3,855	)	(11,930	)	(14,352	)

Beneficial Interest in EBITDA			133,108		296,590		475,214		591,780

TCO's average ownership percentage of TRG			70.1	%	69.6	%	69.4	%	69.3	%

Beneficial Interest in EBITDA attributable to TCO			93,368		206,411		329,884		410,493



Beneficial Interest in EBITDA			133,108		296,590		475,214		591,780

	Acquisition costs				3,614				5,295
	Gains on extinguishment of debt				(174,171	)			(174,171	)

Adjusted Beneficial Interest in EBITDA			133,108		126,033		475,214		422,904

TCO's average ownership percentage of TRG			70.1	%	69.6	%	69.4	%	69.3	%

Adjusted Beneficial Interest in EBITDA attributable to TCO			93,368		87,712		329,884		292,966

Taubman Centers/13



TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended December 31, 2012, 2011, and 2010
(in thousands of dollars)

		Three Months Ended						Three Months Ended						Year Ended						Year Ended
		2012			2011			2011			2010			2012			2011			2011			2010

Net income		49,131			220,796			220,796			58,572			157,817			287,398			287,398			102,327

Add (less) depreciation and amortization:
	Consolidated businesses at 100% - continuing operations	40,434			33,204			33,204			34,641			149,517			132,707			132,707			145,271
	Consolidated businesses at 100% - discontinued operations				1,279			1,279			1,733						10,309			10,309			8,605
	Noncontrolling partners in consolidated joint ventures	(2,040	)		(3,041	)		(3,041	)		(3,007	)		(9,690	)		(11,152	)		(11,152	)		(10,526	)
	Share of Unconsolidated Joint Ventures	6,902			6,752			6,752			5,662			22,688			23,102			23,102			22,194

Add (less) interest expense and income tax expense:
	Interest expense:
	Consolidated businesses at 100% - continuing operations	33,470			32,748			32,748			33,205			142,616			122,277			122,277			132,362
	Consolidated businesses at 100% - discontinued operations				4,053			4,053			5,257						21,427			21,427			20,346
	Noncontrolling partners in consolidated joint ventures	(3,951	)		(3,744	)		(3,744	)		(5,355	)		(16,585	)		(12,153	)		(12,153	)		(21,224	)
	Share of Unconsolidated Joint Ventures	10,778			8,201			8,201			8,266			35,862			31,607			31,607			33,076
	Share of income tax expense	3,526			197			197			186			4,919			610			610			734

Less noncontrolling share of income of consolidated joint ventures		(5,142	)		(3,855	)		(3,855	)		(3,879	)		(11,930	)		(14,352	)		(14,352	)		(9,780	)

Add EBITDA attributable to outside partners:
	EBITDA attributable to noncontrolling partners in consolidated joint ventures	11,133			10,640			10,640			12,241			38,250			37,657			37,657			41,530
	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	24,957			24,041			24,041			24,152			87,216			83,565			83,565			82,054

EBITDA at 100%		169,198			331,271			331,271			171,674			600,680			713,002			713,002			546,969

Add (less) items excluded from shopping center NOI:
	General and administrative expenses	11,638			8,600			8,600			8,641			39,659			31,598			31,598			30,234
	Management, leasing, and development services, net	1,373			(5,665	)		(5,665	)		(2,411	)		(4,394	)		(13,596	)		(13,596	)		(7,851	)
	Gains on extinguishment of debt				(174,171	)		(174,171	)								(174,171	)		(174,171	)
	Acquisition costs				3,614			3,614									5,295			5,295
	Gains on sales of peripheral land										(1,178	)					(519	)		(519	)		(2,218	)
	Interest income	(25	)		(436	)		(436	)		(133	)		(295	)		(960	)		(960	)		(586	)
	Straight-line of rents	(1,981	)		(1,152	)		(1,152	)		(1,131	)		(6,516	)		(2,531	)		(2,531	)		(2,701	)
	Non-center specific operating expenses and other	9,640			11,026			11,026			7,726			31,413			33,069			33,069			24,337

NOI - all centers at 100%		189,843			173,087			173,087			183,188			660,547			591,187			591,187			588,184

Less - NOI of non-comparable centers		(9,475	)	(1)	(2,209	)	(2)	(2,209	)	(2)	(2,735	)	(3)	(29,705	)	(1)	(4,120	)	(2)	(4,120	)	(2)	(8,396	)	(3)

NOI at 100% - comparable centers		180,368			170,878			170,878			180,453			630,842			587,067			587,067			579,788

NOI - growth %		5.6	%					-5.3%						7.5	%					1.3	%

NOI at 100% - comparable centers		180,368			170,878			170,878			180,453			630,842			587,067			587,067			579,788

Lease cancellation income		(1,913	)		(244	)		(244	)		(13,335	)		(4,928	)		(3,230	)		(3,230	)		(23,464	)

NOI at 100% - comparable centers excluding lease cancellation income		178,455			170,634			170,634			167,118			625,914			583,837			583,837			556,324

NOI excluding lease cancellation income - growth %		4.6	%					2.1	%					7.2	%					4.9	%

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

Taubman Centers/14



TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of December 31, 2012 and December 31, 2011
(in thousands of dollars)
			As of
			December 31, 2012		December 31, 2011
Consolidated Balance Sheet of Taubman Centers, Inc. :

Assets:
	Properties		4,246,000		4,020,954
	Accumulated depreciation and amortization		(1,395,876	)	(1,271,943	)
			2,850,124		2,749,011
	Investment in Unconsolidated Joint Ventures		214,152		75,582
	Cash and cash equivalents		32,057		24,033
	Restricted cash (1)		6,138		295,318
	Accounts and notes receivable, net		69,033		59,990
	Accounts receivable from related parties		2,009		1,418
	Deferred charges and other assets		94,982		131,440
			3,268,495		3,336,792
Liabilities:
	Mortgage notes payable		2,952,030		2,864,135
	Installment notes (1)				281,467
	Accounts payable and accrued liabilities		278,098		255,146
	Distributions in excess of investments in and net income of
		Unconsolidated Joint Ventures	383,293		192,257
			3,613,421		3,593,005

Redeemable noncontrolling interests					84,235

Equity:
	Taubman Centers, Inc. Shareowners' Equity:
		Series B Non-Participating Convertible Preferred Stock	25		26
		Series G Cumulative Redeemable Preferred Stock
		Series H Cumulative Redeemable Preferred Stock
		Series J Cumulative Redeemable Preferred Stock
		Common stock	633		580
		Additional paid-in capital	657,071		673,923
		Accumulated other comprehensive loss	(22,064	)	(27,613	)
		Dividends in excess of net income	(891,283	)	(863,040	)
			(255,618	)	(216,124	)
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(45,066	)	(101,872	)
		Noncontrolling interests in partnership equity of TRG	(44,242	)	(22,452	)
			(89,308	)	(124,324	)
			(344,926	)	(340,448	)
			3,268,495		3,336,792

Combined Balance Sheet of Unconsolidated Joint Ventures (2) :

Assets:
	Properties		1,129,647		1,107,314
	Accumulated depreciation and amortization		(473,101	)	(446,059	)
			656,546		661,255
	Cash and cash equivalents		30,070		22,042
	Accounts and notes receivable, net		26,032		24,628
	Deferred charges and other assets		31,282		21,289
			743,930		729,214
Liabilities:
	Mortgage notes payable		1,490,857		1,138,808
	Accounts payable and other liabilities, net		68,282		55,737
			1,559,139		1,194,545

Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(459,390	)	(235,525	)
	Accumulated deficiency in assets - Joint Venture Partners		(333,752	)	(211,478	)
	Accumulated other comprehensive income (loss) - TRG		(11,021	)	(9,233	)
	Accumulated other comprehensive income (loss) - Joint Venture Partners		(11,046	)	(9,095	)
			(815,209	)	(465,331	)
			743,930		729,214

(1)	Installment notes were paid in full in February 2012 with restricted cash drawn on the Company's revolving lines of credit as of December 31, 2011.
(2)	The December 31, 2012 Unconsolidated Joint Venture amounts exclude the balances of entities that own interests in projects that are currently under development.

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)


	Range for Year Ended
	December 31, 2013

Funds from Operations per common share	3.57		3.70

Real estate depreciation - TRG	(1.79	)	(1.73	)

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

Depreciation of TCO's additional basis in TRG	(0.11	)	(0.11	)

Net income attributable to common shareowners, per common share (EPS)	1.67		1.85

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