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

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8-K - 8-K - TAUBMAN CENTERS INC	a2013q38k.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,

Corporate Affairs & Investor Relations

248-258-7367

bbaker@taubman.com

FOR IMMEDIATE RELEASE

TAUBMAN CENTERS ISSUES THIRD QUARTER RESULTS


•	Funds From Operations, Average Rents, Occupancy, and Leased Space Up


•	Net Operating Income (NOI) Excluding Lease Cancellation Income Up 3.2%


•	Share Repurchase Program Commences

BLOOMFIELD HILLS, Mich., October 24, 2013 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2013.



	September 30, 2013 Three Months Ended	September 30, 2012 Three Months Ended	September 30, 2013 Nine Months Ended	September 30, 2012 Nine Months Ended
Net income allocable to common shareholders (EPS) per diluted share Growth rate	$0.38 8.6%	$0.35	$1.09 18.5%	$0.92
Funds from Operations (FFO) per diluted share Growth rate	$0.89 12.7%	$0.79	$2.53 11.9%	$2.26
Adjusted Funds from Operations (Adjusted FFO) per diluted share⁽¹⁾ Growth rate	$0.89 3.5%	$0.86	$2.53 8.6%	$2.33
(1) Adjusted FFO for the three and nine months ended September 30, 2012 excludes charges related to the redemption of the Series G and H Preferred Stock.

“This quarter our results were driven by strong rents, increased occupancy, and the late 2012 acquisitions of additional interests in International Plaza (Tampa, Fla.) and Waterside Shops (Naples, Fla.),” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “We also received the final installment of the incentive fee for our very successful leasing of IFC Mall in Seoul, South Korea.”

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Rents, Occupancy, Leased Space, and NOI Up

Average rent per square foot for the third quarter of 2013 was $48.66, up 4.6 percent from $46.52 in the comparable period last year. Year-to-date, average rent per square foot is up 4.7 percent.

Ending occupancy in comparable centers was 91.3 percent on September 30, 2013, up 0.8 percent from 90.5 percent on September 30, 2012. Leased space in comparable centers was 93.1 percent on September 30, 2013, up 0.6 percent from 92.5 percent on September 30, 2012.

For the quarter, NOI excluding lease cancellation income was up 3.2 percent, bringing year-to-date growth to 4 percent.

Sales

Mall tenant sales per square foot at Taubman properties were up 0.4 percent from the third quarter of 2012. This brings the company’s 12-month trailing mall tenant sales per square foot to $699, an increase of 2.6 percent from the 12-months ended September 30, 2012. Year-to-date, sales are up 2 percent.

Taubman Prestige Outlets Chesterfield Opens

In August, Taubman Prestige Outlets Chesterfield opened on schedule in Chesterfield, Missouri. “We were very pleased with the strong attendance at our grand opening and we look forward to building upon that momentum,” said Mr. Taubman. “There’s clear synergy with existing retail on one of the most well-known retail interchanges in the St. Louis metropolitan area”. See Taubman Prestige Outlets Chesterfield Opened Today In St. Louis - August 2, 2013.

Revitalization of International Market Place Announced

In August, Taubman announced its plans to redevelop the International Market Place (Waikiki, Honolulu, Hawaii). This iconic project will include 360,000 square feet of retail, dining, and entertainment, and will feature luxury-focused merchandising with the only full-line Saks Fifth Avenue in Hawaii. Taubman will fund the total project cost, which is expected to be approximately $400 million, and will have a 93.5% ownership interest in the project. The center is scheduled to open in spring 2016. See Taubman Centers And Queen Emma Land Company Announce Plans To Move Forward With The Revitalization Of The International Market Place In Waikiki - August 9, 2013.

Share Repurchase Program Announced

In August, the company announced a $200 million share repurchase program. During the third quarter, the company repurchased 313,042 shares of its common stock at an average price of $67.68 per share. At September 30, the company had $179 million available under its share repurchase authorization. See Taubman Centers Announces $200 Million Share Repurchase Program - August 26, 2013.

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2013 Guidance

“We are in-line with our expectations and continue to expect NOI growth of about three percent for the year. As a result, our 2013 FFO guidance range remains at $3.57 to $3.67 per diluted share,” said Mr. Taubman. 2013 EPS is expected to be in the range of $1.64 to $1.76.

Supplemental Investor Information Available

The company provides supplemental investor information along with its earnings announcements, available online at www.taubman.com under “Investing.” 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 (Expense)


•	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

Investor Conference Call

The company will host a conference call at 10:00 AM Eastern Daylight Time on Friday, October 25 to discuss these results, business conditions and the company’s outlook for the remainder of 2013. The conference call will be simulcast at www.taubman.com under “Investing” 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 28 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 The Mall at University Town Center in Sarasota, Fla.; The Mall of San Juan in San Juan, Puerto Rico; International Market Place in Waikiki, Honolulu, Hawaii 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.

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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/5



TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended September 30, 2013 and 2012
(in thousands of dollars, except as indicated)

	Three Months Ended				Year to Date
	2013		2012		2013		2012

Net income	43,243		45,061		123,202		108,686
Noncontrolling share of income of consolidated joint ventures	(2,198)		(2,079)		(6,752)		(6,788)
Noncontrolling share of income of TRG	(10,338)		(10,216)		(29,915)		(27,105)
Preferred stock dividends (1)	(5,784)		(10,663)		(15,148)		(17,980)
Distributions to participating securities of TRG	(435)		(403)		(1,313)		(1,209)
Net income attributable to Taubman Centers, Inc. common shareowners	24,488		21,700		70,074		55,604
Net income per common share - basic	0.38		0.36		1.10		0.94
Net income per common share - diluted	0.38		0.35		1.09		0.92
Beneficial interest in EBITDA - Combined (2)	128,320		121,969		371,430		342,106
Funds from Operations (2)	80,500		70,477		230,222		199,149
Funds from Operations attributable to TCO (2)	57,737		49,071		164,692		137,676
Funds from Operations per common share - basic (2)	0.91		0.81		2.59		2.33
Funds from Operations per common share - diluted (2)	0.89		0.79		2.53		2.26
Adjusted Funds from Operations (3)	80,500		76,889		230,222		205,561
Adjusted Funds from Operations attributable to TCO (3)	57,737		53,535		164,692		142,108
Adjusted Funds from Operations per common share- basic (3)	0.91		0.88		2.59		2.40
Adjusted Funds from Operations per common share- diluted (3)	0.89		0.86		2.53		2.33
Weighted average number of common shares outstanding - basic	63,753,748		60,571,612		63,653,155		59,207,828
Weighted average number of common shares outstanding - diluted	64,690,909		62,025,322		64,702,648		60,716,518
Common shares outstanding at end of period	63,524,788		61,698,618
Weighted average units - Operating Partnership - basic	88,933,226		86,994,524		88,903,234		85,655,085
Weighted average units - Operating Partnership - diluted	90,741,649		89,319,495		90,823,989		88,035,037
Units outstanding at end of period - Operating Partnership	88,702,310		88,120,226
Ownership percentage of the Operating Partnership at end of period	71.6	%	70.0	%
Number of owned shopping centers at end of period	25		24		25		24

Operating Statistics:
Net Operating Income excluding lease cancellation income - growth % (4)	3.2	%			4.0	%
Mall tenant sales - all centers (5)	1,405,246		1,378,384		4,266,230		4,128,924
Mall tenant sales - comparable (4)(5)	1,356,765		1,352,763		4,149,366		4,067,048
Ending occupancy - all centers	90.9	%	90.4	%	90.9	%	90.4	%
Ending occupancy - comparable (4)	91.3	%	90.5	%	91.3	%	90.5	%
Average occupancy - all centers	90.8	%	90.1	%	90.7	%	89.9	%
Average occupancy - comparable (4)	91.1	%	90.3	%	90.7	%	90.1	%
Leased space - all centers	92.6	%	92.6	%	92.6	%	92.6	%
Leased space - comparable (4)	93.1	%	92.5	%	93.1	%	92.5	%
All centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (5)	14.2	%	14.0	%	13.9	%	13.4	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (5)	14.1	%	13.5	%	13.2	%	12.8	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (5)	14.2	%	13.9	%	13.7	%	13.2	%
Comparable centers:
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (4)(5)	14.4	%	13.9	%	13.9	%	13.4	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (5)	14.1	%	13.5	%	13.2	%	12.8	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined (4)(5)	14.3	%	13.8	%	13.7	%	13.2	%
Average rent per square foot - Consolidated Businesses (4)	48.58		46.91		48.50		46.71
Average rent per square foot - Unconsolidated Joint Ventures	48.85		45.61		48.30		45.27
Average rent per square foot - Combined (4)	48.66		46.52		48.44		46.27

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(1)	Preferred dividends for the three and nine months ended September 30, 2012 include charges of $3.3 million and $3.1 million incurred in connection with the $100 million redemption of the Series G Preferred Stock and the $87 million redemption of the Series H Preferred Stock, respectively.
(2)	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.
	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.
	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.
(3)	FFO for the three and nine months ended September 30, 2012 includes, and Adjusted FFO excludes, charges related to the redemption of Series G and H Preferred Stock.
(4)	Statistics exclude non-comparable centers. The 2012 statistics, other than sales per square foot growth, have been restated to include comparable centers to 2013.
(5)	Based on reports of sales furnished by mall tenants.

Taubman Centers/7



TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended September 30, 2013 and 2012
(in thousands of dollars)
				2013				2012
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		103,501		42,532		99,564		40,016
		Percentage rents		7,021		2,137		6,315		2,366
		Expense recoveries		67,943		25,738		66,633		26,224
		Management, leasing, and development services		8,753				10,234
		Other		6,720		1,452		6,793		1,829
			Total revenues	193,938		71,859		189,539		70,435

EXPENSES:
		Maintenance, taxes, utilities, and promotion		55,375		18,807		53,253		18,588
		Other operating		19,295		3,372		16,128		3,581
		Management, leasing, and development services		1,027				6,165
		General and administrative		11,812				9,571
		Interest expense		32,515		17,048		34,943		16,617
		Depreciation and amortization		40,982		10,068		36,414		9,095
			Total expenses	161,006		49,295		156,474		47,881

Nonoperating income (expense)				(456	)	(1	)	56		18
				32,476		22,563		33,121		22,572
Income tax expense				(1,453	)			(732	)
Equity in income of Unconsolidated Joint Ventures				12,220				12,672

Net income				43,243				45,061
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(2,198	)			(2,079	)
		Noncontrolling share of income of TRG		(10,338	)			(10,216	)
Distributions to participating securities of TRG				(435	)			(403	)
Preferred stock dividends (2)				(5,784	)			(10,663	)
Net income attributable to Taubman Centers, Inc. common shareowners				24,488				21,700

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		105,973		49,679		104,478		48,284
		EBITDA - outside partners' share		(5,653	)	(21,679	)	(9,257	)	(21,536	)
		Beneficial interest in EBITDA		100,320		28,000		95,221		26,748
		Beneficial interest expense		(30,352	)	(9,415	)	(30,718	)	(8,765	)
		Beneficial income tax expense - TRG and TCO		(1,453	)			(667	)
		Beneficial income tax benefit - TCO		(29	)
		Non-real estate depreciation		(787	)			(679	)
		Preferred dividends and distributions		(5,784	)			(10,663	)
		Funds from Operations contribution		61,915		18,585		52,494		17,983

STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	1,081		226		1,194		187
		Green Hills purchase accounting adjustments - minimum rents increase		186				212
		Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	858				858
		Waterside Shops purchase accounting adjustments - interest expense reduction				263

(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	)	Preferred dividends for the three months ended September 30, 2012 include charges of $3.3 million and $3.1 million incurred in connection with the $100 million redemption of the Series G Preferred Stock and the $87 million redemption of the Series H Preferred Stock, respectively.

Taubman Centers/8



TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Nine Months Ended September 30, 2013 and 2012
(in thousands of dollars)
				2013				2012
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		309,043		124,679		292,248		119,213
		Percentage rents		13,732		5,763		12,767		5,797
		Expense recoveries		197,549		73,922		185,325		72,561
		Management, leasing, and development services		13,954				27,441
		Other		21,104		4,820		20,487		4,945
			Total revenues	555,382		209,184		538,268		202,516

EXPENSES:
		Maintenance, taxes, utilities, and promotion		154,694		53,993		143,854		52,202
		Other operating		53,950		11,643		52,360		11,461
		Management, leasing, and development services		4,172				21,674
		General and administrative		36,676				28,021
		Interest expense		99,589		50,976		109,146		48,107
		Depreciation and amortization		116,262		29,326		109,083		26,690
			Total expenses	465,343		145,938		464,138		138,460

Nonoperating income (expense)				1,831		(1	)	251		19
				91,870		63,245		74,381		64,075
Income tax expense				(2,715	)			(1,438	)
Equity in income of Unconsolidated Joint Ventures				34,047				35,743

Net income				123,202				108,686
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(6,752	)			(6,788	)
		Noncontrolling share of income of TRG		(29,915	)			(27,105	)
Distributions to participating securities of TRG				(1,313	)			(1,209	)
Preferred stock dividends (2)				(15,148	)			(17,980	)
Net income attributable to Taubman Centers, Inc. common shareowners				70,074				55,604

SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		307,721		143,547		292,610		138,872
		EBITDA - outside partners' share		(17,068	)	(62,770	)	(27,117	)	(62,259	)
		Beneficial interest in EBITDA		290,653		80,777		265,493		76,613
		Beneficial interest expense		(93,049	)	(28,192	)	(96,512	)	(25,084	)
		Beneficial income tax expense - TRG and TCO		(2,715	)			(1,393	)
		Beneficial income tax expense - TCO		132
		Non-real estate depreciation		(2,236	)			(1,988	)
		Preferred dividends and distributions		(15,148	)			(17,980	)
		Funds from Operations contribution		177,637		52,585		147,620		51,529

STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	2,881		451		2,544		360
		Green Hills purchase accounting adjustments - minimum rents increase		590				610
		Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	2,573				2,573
		Waterside Shops purchase accounting adjustments - interest expense reduction				788

(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	)	Preferred dividends for the nine months ended September 30, 2012 include charges of $3.3 million and $3.1 million incurred in connection with the $100 million redemption of the Series G Preferred Stock and the $87 million redemption of the Series H Preferred Stock, respectively.

Taubman Centers/9



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 September 30, 2013 and 2012
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2013					2012
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		24,488		63,753,748	0.38		21,700		60,571,612	0.36

Add impact of share-based compensation		107		937,161			168		1,453,710

Net income attributable to TCO common shareowners - Diluted		24,595		64,690,909	0.38		21,868		62,025,322	0.35

Add depreciation of TCO's additional basis		1,720			0.03		1,720			0.03
Less TCO's additional income tax benefit		(29	)		(0.00)

Net income attributable to TCO common shareowners,
	excluding step-up depreciation and additional income tax benefit	26,286		64,690,909	0.41		23,588		62,025,322	0.38

Add:
	Noncontrolling share of income of TRG	10,338		25,179,478			10,216		26,422,911
	Distributions to participating securities of TRG	435		871,262			403		871,262

Net income attributable to partnership unitholders
	and participating securities	37,059		90,741,649	0.41		34,207		89,319,495	0.38

Add (less) depreciation and amortization:
	Consolidated businesses at 100%	40,982			0.45		36,414			0.41
	Depreciation of TCO's additional basis	(1,720	)		(0.02	)	(1,720	)		(0.02	)
	Noncontrolling partners in consolidated joint ventures	(1,292	)		(0.01	)	(2,888	)		(0.03	)
	Share of Unconsolidated Joint Ventures	6,365			0.07		5,311			0.06
	Non-real estate depreciation	(787	)		(0.01	)	(679	)		(0.01	)

Less impact of share-based compensation		(107	)		(0.00)		(168	)		(0.00)

Funds from Operations		80,500		90,741,649	0.89		70,477		89,319,495	0.79

TCO's average ownership percentage of TRG		71.7	%				69.6	%

Funds from Operations attributable to TCO,
	excluding additional income tax expense	57,708			0.89		49,071			0.79

Add TCO's additional income tax benefit		29			0.00

Funds from Operations attributable to TCO		57,737			0.89		49,071			0.79



Funds from Operations		80,500		90,741,649	0.89		70,477		89,319,495	0.79

Charge upon redemption of Series G and H Preferred Stock							6,412			0.07

Adjusted Funds from Operations		80,500		90,741,649	0.89		76,889		89,319,495	0.86

TCO's average ownership percentage of TRG		71.7	%				69.6	%

Adjusted Funds from Operations attributable to TCO,
	excluding additional income tax expense	57,708			0.89		53,535			0.86

Add TCO's additional income tax benefit		29			0.00

Adjusted Funds from Operations attributable to TCO		57,737			0.89		53,535			0.86

Taubman Centers/10



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 Nine Months Ended September 30, 2013 and 2012
(in thousands of dollars except as noted; may not add or recalculate due to rounding)


		2013					2012
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit

Net income attributable to TCO common shareowners - Basic		70,074		63,653,155	1.10		55,604		59,207,828	0.94

Add impact of share-based compensation		352		1,049,493			470		1,508,690

Net income attributable to TCO common shareowners - Diluted		70,426		64,702,648	1.09		56,074		60,716,518	0.92

Add depreciation of TCO's additional basis		5,160			0.08		5,159			0.08
Add TCO's additional income tax expense		132			0.00

Net income attributable to TCO common shareowners,
	excluding step-up depreciation and additional income tax expense	75,718		64,702,648	1.17		61,233		60,716,518	1.01

Add:
	Noncontrolling share of income of TRG	29,915		25,250,079			27,105		26,447,257
	Distributions to participating securities of TRG	1,313		871,262			1,209		871,262

Net income attributable to partnership unitholders
	and participating securities	106,946		90,823,989	1.18		89,547		88,035,037	1.02

Add (less) depreciation and amortization:
	Consolidated businesses at 100%	116,262			1.28		109,083			1.24
	Depreciation of TCO's additional basis	(5,160	)		(0.06	)	(5,159	)		(0.06	)
	Noncontrolling partners in consolidated joint ventures	(3,776	)		(0.04	)	(7,650	)		(0.09	)
	Share of Unconsolidated Joint Ventures	18,538			0.20		15,786			0.18
	Non-real estate depreciation	(2,236	)		(0.02	)	(1,988	)		(0.02	)

Less impact of share-based compensation		(352	)		(0.00)		(470	)		(0.01	)

Funds from Operations		230,222		90,823,989	2.53		199,149		88,035,037	2.26

TCO's average ownership percentage of TRG		71.6	%				69.1	%

Funds from Operations attributable to TCO,
	excluding additional income tax expense	164,824			2.53		137,676			2.26

Less TCO's additional income tax expense		(132	)		(0.00)

Funds from Operations attributable to TCO		164,692			2.53		137,676			2.26



Funds from Operations		230,222		90,823,989	2.53		199,149		88,035,037	2.26

Charge upon redemption of Series G and H Preferred Stock							6,412			0.07

Adjusted Funds from Operations		230,222		90,823,989	2.53		205,561		88,035,037	2.33

TCO's average ownership percentage of TRG		71.6	%				69.1	%

Adjusted Funds from Operations attributable to TCO,
	excluding additional income tax expense	164,824			2.53		142,108			2.33

Less TCO's additional income tax expense		(132	)		(0.00)

Adjusted Funds from Operations attributable to TCO		164,692			2.53		142,108			2.33

Taubman Centers/11



TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA
For the Periods Ended September 30, 2013 and 2012
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)

			Three Months Ended				Year to Date
			2013		2012		2013		2012

Net income			43,243		45,061		123,202		108,686

Add (less) depreciation and amortization:
	Consolidated businesses at 100%		40,982		36,414		116,262		109,083
	Noncontrolling partners in consolidated joint ventures		(1,292	)	(2,888	)	(3,776	)	(7,650	)
	Share of Unconsolidated Joint Ventures		6,365		5,311		18,538		15,786

Add (less) interest expense and income tax expense:
	Interest expense:
		Consolidated businesses at 100%	32,515		34,943		99,589		109,146
		Noncontrolling partners in consolidated joint ventures	(2,163	)	(4,225	)	(6,540	)	(12,634	)
		Share of Unconsolidated Joint Ventures	9,415		8,765		28,192		25,084
	Share of income tax expense		1,453		667		2,715		1,393

Less noncontrolling share of income of consolidated joint ventures			(2,198	)	(2,079	)	(6,752	)	(6,788	)

Beneficial Interest in EBITDA			128,320		121,969		371,430		342,106

TCO's average ownership percentage of TRG			71.7	%	69.6	%	71.6	%	69.1	%

Beneficial Interest in EBITDA attributable to TCO			91,989		84,923		265,925		236,516

Taubman Centers/12



TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended September 30, 2013 and 2012
(in thousands of dollars)
			Three Months Ended						Three Months Ended						Year to Date						Year to Date
			2013			2012			2012			2011			2013			2012			2012			2011

Net income			43,243			45,061			45,061			21,868			123,202			108,686			108,686			66,602

Add (less) depreciation and amortization:
		Consolidated businesses at 100% - continuing operations	40,982			36,414			36,414			33,054			116,262			109,083			109,083			99,503
		Consolidated businesses at 100% - discontinued operations										5,361												9,030
		Noncontrolling partners in consolidated joint ventures	(1,292	)		(2,888	)		(2,888	)		(2,404	)		(3,776	)		(7,650	)		(7,650	)		(8,111	)
		Share of Unconsolidated Joint Ventures	6,365			5,311			5,311			5,486			18,538			15,786			15,786			16,350

Add (less) interest expense and income tax expense:
		Interest expense:
		Consolidated businesses at 100% - continuing operations	32,515			34,943			34,943			30,064			99,589			109,146			109,146			89,529
		Consolidated businesses at 100% - discontinued operations										6,354												17,374
		Noncontrolling partners in consolidated joint ventures	(2,163	)		(4,225	)		(4,225	)		(2,767	)		(6,540	)		(12,634	)		(12,634	)		(8,409	)
		Share of Unconsolidated Joint Ventures	9,415			8,765			8,765			8,082			28,192			25,084			25,084			23,406
		Share of income tax expense	1,453			667			667			208			2,715			1,393			1,393			413

Less noncontrolling share of income of consolidated joint ventures			(2,198	)		(2,079	)		(2,079	)		(4,327	)		(6,752	)		(6,788	)		(6,788	)		(10,497	)

Add EBITDA attributable to outside partners:
		EBITDA attributable to noncontrolling partners in consolidated joint ventures	5,653			9,257			9,257			9,498			17,068			27,117			27,117			27,017
		EBITDA attributable to outside partners in Unconsolidated Joint Ventures	21,679			21,536			21,536			20,326			62,770			62,259			62,259			59,524

EBITDA at 100%			155,652			152,762			152,762			130,803			451,268			431,482			431,482			381,731

Add (less) items excluded from shopping center NOI:
		General and administrative expenses	11,812			9,571			9,571			7,709			36,676			28,021			28,021			22,998
		Management, leasing, and development services, net	(7,726	)		(4,069	)		(4,069	)		(2,194	)		(9,782	)		(5,767	)		(5,767	)		(7,931	)
		Gains on sales of peripheral land													(863	)								(519	)
		Interest income	(43	)		(74	)		(74	)		(225	)		(144	)		(270	)		(270	)		(528	)
		Nonoperating expense	500												500
		Gain on sale of marketable securities													(1,323	)
		Straight-line of rents	(1,706	)		(2,055	)		(2,055	)		(836	)		(4,320	)		(4,535	)		(4,535	)		(1,379	)
		Acquisition costs										1,681												1,681
		Non-center specific operating expenses and other	7,995			6,357			6,357			7,244			18,781			21,773			21,773			22,057

NOI - all centers at 100%			166,484			162,492			162,492			144,182			490,793			470,704			470,704			418,110

Less - NOI of non-comparable centers			(1,781	)	(1)	(2,487	)	(1)	(7,459	)	(2)	(33	)	(3)	(7,306	)	(1)	(5,842	)	(1)	(20,230	)	(2)	(1,909	)	(3)

NOI at 100% - comparable centers			164,703			160,005			155,033			144,149			483,487			464,862			450,474			416,201

NOI - growth %			2.9	%					7.6	%					4.0	%					8.2	%

NOI at 100% - comparable centers			164,703			160,005			155,033			144,149			483,487			464,862			450,474			416,201

Lease cancellation income			(741	)		(1,076	)		(1,076	)		(787	)		(3,007	)		(3,015	)		(3,015	)		(2,987	)

NOI at 100% - comparable centers excluding lease cancellation income			163,962			158,929			153,957			143,362			480,480			461,847			447,459			413,214

NOI excluding lease cancellation income - growth %			3.2	%					7.4	%					4.0	%					8.3	%

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

Taubman Centers/13



TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of September 30, 2013 and December 31, 2012
(in thousands of dollars)
			As of
			September 30, 2013		December 31, 2012
Consolidated Balance Sheet of Taubman Centers, Inc. :

Assets:
	Properties		4,397,434		4,246,000
	Accumulated depreciation and amortization		(1,484,052	)	(1,395,876	)
			2,913,382		2,850,124
	Investment in Unconsolidated Joint Ventures		335,393		214,152
	Cash and cash equivalents		32,377		32,057
	Restricted cash		7,164		6,138
	Accounts and notes receivable, net		61,103		69,033
	Accounts receivable from related parties		1,900		2,009
	Deferred charges and other assets		87,520		94,982
			3,438,839		3,268,495

Liabilities:
	Notes payable		2,985,952		2,952,030
	Accounts payable and accrued liabilities		285,763		278,098
	Distributions in excess of investments in and net income of
		Unconsolidated Joint Ventures	378,650		383,293
			3,650,365		3,613,421

Equity:
	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	635		633
		Additional paid-in capital	813,139		657,071
		Accumulated other comprehensive income (loss)	(14,274	)	(22,064	)
		Dividends in excess of net income	(916,977	)	(891,283	)
			(117,452	)	(255,618	)
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(38,757	)	(45,066	)
		Noncontrolling interests in partnership equity of TRG	(55,317	)	(44,242	)
			(94,074	)	(89,308	)
			(211,526	)	(344,926	)
			3,438,839		3,268,495

Combined Balance Sheet of Unconsolidated Joint Ventures (1) :

Assets:
	Properties		1,142,770		1,129,647
	Accumulated depreciation and amortization		(489,626	)	(473,101	)
			653,144		656,546
	Cash and cash equivalents		22,954		30,070
	Accounts and notes receivable, net		24,067		26,032
	Deferred charges and other assets		26,039		31,282
			726,204		743,930

Liabilities:
	Mortgage notes payable		1,482,584		1,490,857
	Accounts payable and other liabilities		53,629		68,282
			1,536,213		1,559,139

Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(459,409	)	(459,390	)
	Accumulated deficiency in assets - Joint Venture Partners		(336,636	)	(333,752	)
	Accumulated other comprehensive income (loss) - TRG		(6,982	)	(11,021	)
	Accumulated other comprehensive income (loss) - Joint Venture Partners		(6,982	)	(11,046	)
			(810,009	)	(815,209	)
			726,204		743,930

(1)	Unconsolidated Joint Venture amounts exclude the balances of entities that own interests in projects that are currently under development.

Taubman Centers/14



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		3.67

Real estate depreciation - TRG	(1.81	)	(1.79	)

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)	1.64		1.76

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