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

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8-K - 8-K - TAUBMAN CENTERS INC	a2014q48-k.htm



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

TAUBMAN CENTERS ISSUES FOURTH QUARTER AND FULL YEAR 2014 RESULTS AND INTRODUCES 2015 GUIDANCE


•	Comparable Center Net Operating Income (NOI) Including Lease Cancellation Income Up 4 Percent for the Year


•	Average Rent Per Square Foot Up 5.7 Percent for the Year


•	Portfolio Releasing Spreads 32 Percent for the Year

BLOOMFIELD HILLS, Mich., Feb. 12, 2015 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the quarter and full year periods ended December 31, 2014.



	December 31, 2014 Three Months Ended	December 31, 2013 Three Months Ended	December 31, 2014 Year Ended	December 31, 2013 Year Ended
Net income attributable to common shareholders (EPS) per diluted share	$6.86	$0.62	$13.47	$1.71
Funds from Operations (FFO) per diluted share Growth rate	$0.54 (51.4)%	$1.11	$3.11 (14.8)%	$3.65
Adjusted Funds from Operations (Adjusted FFO) per diluted share⁽¹⁾ Growth rate	$1.00 (9.9)%	$1.11	$3.67 0.5%	$3.65
(1) Adjusted FFO for the three months and year ended December 31, 2014 excludes charges related to the October 2014 sale of seven centers to Starwood.

“2014 was a very productive year for our company,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “We enjoyed the extremely successful opening of The Mall at University Town Center in Sarasota, Florida, we made significant progress on developments both in the U.S. and Asia, and we completed a series of strategic transactions that position the company for increased future growth.

“Our centers delivered solid growth,” added Mr. Taubman. Adjusted FFO per share grew despite the loss of two-and-a-half months of results from the seven centers that were sold to Starwood Capital Group in October, which reduced 2014 adjusted FFO by about approximately 14 cents.

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Operating Statistics

Including lease cancellation income, comparable center NOI growth was 4 percent and 3.7 percent for the year and the quarter, respectively. Comparable center NOI excluding lease cancellation income was up 2.7 percent for the year and 1.9 percent over fourth quarter 2013. “Our results this quarter and for the full year benefited from increased minimum rent and recoveries,” said Mr. Taubman.

For the year, average rent per square foot in comparable centers was $60.58, up 5.7 percent from average rent per square foot of $57.33 in 2013. For the fourth quarter, average rent per square foot in comparable centers was $61.19, up 5.6 percent from $57.94 in the comparable period last year.

Trailing 12-month releasing spreads per square foot for the period ended December 31, 2014 were 32.1 percent.

Comparable mall tenant sales per square foot were $809 for 2014, a 1.2 percent decline from 2013. For the fourth quarter of 2014, mall tenant sales per square foot were up 0.7 percent. “The electronics category, while modestly positive to the quarter, negatively impacted our year-over-year growth rate by about 1 percent. We were also impacted by softness in South American tourism in both the quarter and the year.”

Leased space in comparable centers for Taubman’s portfolio was 96.7 percent on December 31, 2014, down 0.8 percent. Ending occupancy in comparable centers was 95.4 percent on December 31, 2014, down 0.9 percent. Leased space and ending occupancy include temporary tenants.

Portfolio Activity

During 2014, the company:


•	Sold a 49.9 percent interest in International Plaza (Tampa, Fla.) for $499 million. See Taubman, TIAA-CREF and APG Announce Sale of Interest in International Plaza - Jan. 30, 2014.


•	Sold Long Island land and the company’s 50 percent interest in Arizona Mills (Tempe, Ariz.) for $230 million. See Taubman Centers Sells Long Island Land and Interest in Arizona Mills to Simon Property Group - Jan. 31, 2014.

•

Announced six major redevelopments totaling $275 million. Renovations and/or expansions began at The Mall at Green Hills (Nashville, Tenn.), Cherry Creek Shopping Center (Denver, Colo.), Dolphin Mall (Miami, Fla.), Beverly Center (Los Angeles, Calif.), Sunvalley (Concord, Calif.), and International Plaza. See Taubman Centers Announces Solid 2013 Results and Introduces 2014 Guidance - Feb. 12, 2014.

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•	Broke ground on the new International Market Place (Waikiki, Honolulu, Hawaii). The center will include approximately 75 retailers, seven restaurants, and the island's first full-line Saks Fifth Avenue. See Construction Begins on the Revitalization of International Market Place in Waikiki, Hawaii - March 3, 2014.


•	Announced an additional partner and an increased ownership in the Hanam Union Square project (Hanam City, Gyeonggi Province, South Korea). The transaction increased Taubman Asia's effective ownership from 30 percent to 34.3 percent. See Taubman Asia Announces Additional Partner and Ownership Increase in Hanam Union Square, South Korea - Aug. 26, 2014.

•

Celebrated the opening of The Mall at University Town Center (UTC) in Sarasota, Florida. The Mall at UTC was the only newly built enclosed regional shopping center to open in the United States during 2014. The center opened over 90 percent leased with over half of the 100 stores and restaurants unique to the Sarasota-Manatee market. See Shoppers Welcome Sarasota’s Premier Shopping Destination - Oct. 16, 2014.

•

Sold seven malls to Starwood for total consideration of $1.4 billion, excluding transaction costs. MacArthur Center (Norfolk, Va.), Stony Point Fashion Park (Richmond, Va.), Northlake Mall (Charlotte, N.C.), The Mall at Wellington Green (Wellington, Fla.), The Shops at Willow Bend (Plano, Tex.), The Mall at Partridge Creek (Clinton Township, Mich.), and Fairlane Town Center (Dearborn, Mich.) were sold. See Taubman Completes Sale of Seven Malls to Starwood Capital Group - Oct. 17, 2014. As a result, in December, the company declared and paid a special cash dividend of $4.75 per common share. See Taubman Centers Declares Regular Common and Preferred Dividends and Special Cash Dividend of $4.75 Per Share - Dec. 2, 2014.

Financing Activity

During 2014 the company completed a number of transactions that further strengthened its balance sheet. The company:


•	In April, closed on a $320 million, interest only construction loan financing for The Mall of San Juan (San Juan, Puerto Rico) that bears interest at LIBOR plus 2 percent through its maturity, including extension options, in April 2019.


•	In November, completed an amendment to its $1.1 billion primary line of credit, extending the maturity two years to February 2019, with a one-year extension option, and reducing the credit spread range. The company’s current pricing is LIBOR plus 1.15 percent.


•	In December, completed an additional $175 million, non-recourse financing on International Plaza. The additional financing matures in December 2021 and was swapped to an all-in fixed rate of 3.78%. The company’s 50.1 percent share of the proceeds will be used for general corporate purposes.

“We remain committed to preserving our strong balance sheet,” said Lisa A. Payne, vice chairman and chief financial officer. “These transactions allowed us to lower our average borrowing rate to below 4 percent, while also improving our fixed charges and interest coverage ratios.”

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Stock Performance

During 2014, the company enjoyed a 30.7 percent total shareholder return. This compares to the MSCI US REIT Index return of 30.4 percent and the S&P 500 Index return of 13.7 percent. Over the 10 years ended December 31, 2014, the company's compounded annual shareholder return was 14.4 percent. This compares very favorably to the 10 year total returns of the MSCI US REIT Index and the S&P 500 Index, which were 8.3 percent and 7.7 percent, respectively. The company’s 10 year total return was eleventh highest of the 98 U.S. REITs that have operated during this period.

2015 Guidance

The company is introducing guidance for 2015. The company expects FFO per diluted share to be in the range of $3.18 to $3.28. This includes the year-over-year negative impact of the company’s October 2014 sale of seven centers to Starwood. In 2014, during the company’s 9.5 months of ownership, the seven centers contributed $0.46 to adjusted FFO per share.

This guidance assumes comparable center NOI growth, excluding lease cancellation income, of about 3 percent for the year.

Net income attributable to common shareholders (EPS) for the year is expected to be in the range of $1.59 to $1.74.

Supplemental Investor Information Available

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


•	Company Information


•	Income 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


•	2014 Pro Forma Income Statement - Adjusted for Starwood and Related Transactions


•	Debt Summary


•	Other Debt, Equity and Certain Balance Sheet Information


•	Construction and Redevelopment


•	Dispositions


•	Capital Spending


•	Operational Statistics


•	Operational Statistics - Quarterly Center Statistics - Comparable Centers Only

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•	Owned Centers


•	Major Tenants in Owned Portfolio


•	Anchors in Owned Portfolio


•	Operating Statistics Glossary

Investor Conference Call

The company will host a conference call at 11:00 a.m. EST on Friday, February 13 to discuss these results, business conditions and the company’s outlook for 2015. The conference call will be simulcast at www.taubman.com. An online replay will follow shortly after the call and continue for approximately 90 days.

About Taubman

Taubman Centers, Inc. is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 21 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 five properties in the U.S. and Asia totaling 4.7 million square feet. Taubman, with more than 60 years of experience in the shopping center industry, is headquartered in Bloomfield Hills, Mich., and Taubman Asia is headquartered in Hong Kong. www.taubman.com.

For ease of use, references in this press release to “Taubman Centers,” “company,” “Taubman” or an operating platform mean Taubman Centers, Inc. and/or one or more of a number of separate, affiliated entities. Business is actually conducted by an affiliated entity rather than Taubman Centers, Inc. itself or the named operating platform.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management's current views with respect to future events and financial performance. 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.

CONTACTS:

Barbara Baker, Taubman, Vice President, Corporate Affairs & Investor Relations, 248-258-7367

bbaker@taubman.com

Maria Mainville, Taubman, Director, Strategic Communications, 248-258-7469

mmainville@taubman.com

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TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December 31, 2014 and 2013
(in thousands of dollars, except as indicated)
	Three Months Ended				Year Ended
	2014		2013		2014		2013
Net income	656,274		66,166		1,278,122		189,368
Noncontrolling share of income of consolidated joint ventures	(26,226)		(3,592)		(34,239)		(10,344)
Noncontrolling share of income of TRG	(179,948)		(16,519)		(350,870)		(46,434)
Distributions to participating securities of TRG	(4,609)		(436)		(6,018)		(1,749)
Preferred stock dividends	(5,785)		(5,785)		(23,138)		(20,933)
Net income attributable to Taubman Centers, Inc. common shareowners	439,706		39,834		863,857		109,908
Net income per common share - basic	6.94		0.63		13.65		1.73
Net income per common share - diluted	6.86		0.62		13.47		1.71
Beneficial interest in EBITDA - Combined (1)	686,998		145,512		1,525,013		516,942
Adjusted Beneficial interest in EBITDA - Combined (1)	121,879		145,512		482,492		516,942
Funds from Operations (1)	48,967		100,614		280,504		330,836
Funds from Operations attributable to TCO (1)	34,938		71,970		200,356		236,662
Funds from Operations per common share - basic (1)	0.55		1.14		3.17		3.72
Funds from Operations per common share - diluted (1)	0.54		1.11		3.11		3.65
Adjusted Funds from Operations (1)	90,087		100,614		330,842		330,836
Adjusted Funds from Operations attributable to TCO (1)	64,374		71,970		236,389		236,662
Adjusted Funds from Operations per common share - basic (1)	1.02		1.14		3.74		3.72
Adjusted Funds from Operations per common share - diluted (1)	1.00		1.11		3.67		3.65
Weighted average number of common shares outstanding - basic	63,322,399		63,408,637		63,267,800		63,591,523
Weighted average number of common shares outstanding - diluted	65,055,502		65,066,977		64,921,064		64,575,412
Common shares outstanding at end of period	63,324,409		63,101,614
Weighted average units - Operating Partnership - basic	88,457,849		88,584,937		88,408,842		88,823,006
Weighted average units - Operating Partnership - diluted	90,190,952		90,243,277		90,062,106		90,678,157
Units outstanding at end of period - Operating Partnership	88,459,859		88,271,133
Ownership percentage of the Operating Partnership at end of period	71.6	%	71.5	%
Number of owned shopping centers at end of period	18		25

Operating Statistics:
Net Operating Income excluding lease cancellation income - growth % (1)(2)	1.9	%	1.9	%	2.7	%	3.4	%
Net Operating Income including lease cancellation income - growth % (1)(2)	3.7	%	2.3	%	4.0	%	3.5	%
Mall tenant sales - all centers (3)	1,601,162		1,913,865		4,969,462		6,180,095
Mall tenant sales - comparable (2)(3)	1,527,103		1,543,894		4,871,423		4,991,010
Ending occupancy - all centers	94.1	%	95.8	%
Ending occupancy - comparable (2)	95.4	%	96.3	%
Leased space - all centers	96.0	%	96.7	%
Leased space - comparable (2)	96.7	%	97.5	%
All centers (3):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses	11.4	%	11.6	%	13.8	%	13.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures	12.3	%	11.4	%	13.3	%	12.6	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined	11.7	%	11.6	%	13.6	%	13.0	%
Comparable centers (2)(3):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses	12.3	%	11.7	%	14.1	%	13.3	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures	11.6	%	11.3	%	13.3	%	12.5	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined	12.0	%	11.6	%	13.7	%	13.0	%
Average rent per square foot - Consolidated Businesses (2)	63.05		60.02		61.96		59.88
Average rent per square foot - Unconsolidated Joint Ventures (2)	58.69		54.19		58.65		52.68
Average rent per square foot - Combined (2)	61.19		57.94		60.58		57.33

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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 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. For the three months and year ended December 31, 2014, FFO and EBITDA were adjusted for expenses related to the sale of seven centers to an affiliate of Starwood Capital Group (Starwood) completed in October 2014. Specifically, these measures were adjusted for charges related to the loss on extinguishment of debt at MacArthur Center (MacArthur), Northlake Mall, The Mall at Partridge Creek, and The Mall at Wellington Green; charges related to the discontinuation of hedge accounting on the interest rate swap previously designated to hedge the MacArthur note payable; and a restructuring charge and disposition costs incurred related to the sale. In addition, for the three months and year ended December 31, 2014, EBITDA was adjusted for the gain on dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project.
	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.


(2)	Statistics exclude non-comparable centers. In 2014 and 2013, non-comparable centers are Taubman Prestige Outlets Chesterfield, The Mall at University Town Center, Arizona Mills, and the portfolio of centers sold to Starwood.

(3)	Based on reports of sales furnished by mall tenants. The 2014 sales statistics have been adjusted to exclude the portfolio of seven centers included in the sale to Starwood Capital Group in October 2014. "All centers" statistics as of December 31, 2013 include sales for the Starwood sale portfolio.

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TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended December 31, 2014 and 2013
(in thousands of dollars)
				2014				2013
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		80,341		54,860		108,686		47,626
		Percentage rents		11,910		5,571		14,780		4,517
		Expense recoveries		52,343		34,961		74,945		30,242
		Management, leasing, and development services		3,744				2,188
		Other		9,984		4,435		11,173		3,151
			Total revenues	158,322		99,827		211,772		85,536

EXPENSES:
		Maintenance, taxes, utilities, and promotion		41,164		23,577		61,131		20,973
		Other operating		15,560		6,048		17,285		3,798
		Management, leasing, and development services		1,700				1,149
		General and administrative		13,799				13,338
		Restructuring charge		675
		Interest expense		15,857		19,465		30,434		16,972
		Depreciation and amortization		23,686		15,119		39,510		10,010
			Total expenses	112,441		64,209		162,847		51,753

Nonoperating income (expense) (2)				(39,480	)	3		(483	)	(5	)
				6,401		35,621		48,442		33,778
Income tax expense				(574	)			(694	)
Equity in income of Unconsolidated Joint Ventures				20,780				18,418
				26,607				66,166
Gain on dispositions (3)				629,667
Net income				656,274				66,166
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(26,226	)			(3,592	)
		Noncontrolling share of income of TRG		(179,948	)			(16,519	)
Distributions to participating securities of TRG (4)				(4,609	)			(436	)
Preferred stock dividends				(5,785	)			(5,785	)
Net income attributable to Taubman Centers, Inc. common shareowners				439,706				39,834

SUPPLEMENTAL INFORMATION:
		EBITDA - 100% (5)		675,611		70,205		118,386		60,760
		EBITDA - outside partners' share		(28,929	)	(29,889	)	(7,036	)	(26,598	)
		Beneficial interest in EBITDA (5)		646,682		40,316		111,350		34,162
		Beneficial share of the gain on dispositions		(606,239	)
		Beneficial interest expense		(14,015	)	(10,611	)	(28,304	)	(9,362	)
		Beneficial income tax expense - TRG and TCO		(574	)			(694	)
		Beneficial income tax expense - TCO		115				49
		Non-real estate depreciation		(922	)			(802	)
		Preferred dividends and distributions		(5,785	)			(5,785	)
		Funds from Operations contribution		19,262		29,705		75,814		24,800

STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	556		575		1,118		845
		Green Hills purchase accounting adjustments - minimum rents increase		105				197
		Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	306				607
		Waterside Shops purchase accounting adjustments - interest expense reduction				263				263
		Taubman BHO headquarters purchase accounting adjustment -
			interest expense reduction	183

(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. International Plaza's operations were consolidated through the disposition date. Subsequent to the disposition, the Company's remaining 50.1% interest is accounted for under the equity method of accounting within Unconsolidated Joint Ventures. In addition, Arizona Mills' operations were accounted for under equity method accounting through the disposition in January 2014.
(2	)	Nonoperating expense for the three months ended December 31, 2014 includes $36.4 million for the loss on the early extinguishment of debt, $2.3 million of disposition costs related to the sale of centers to Starwood, and $2.3 million in connection with the discontinuation of hedge accounting related to the MacArthur interest rate swap.
(3	)	Amount represents the gain on dispositions related to the sale of centers to Starwood.
(4	)	During the three months ended December 31, 2014, the distributions to participating securities of TRG include the special dividend of $4.75 per deferred unit.
(5	)	For the three months ended December 31, 2014, EBITDA includes $629.7 million, $606.2 million at beneficial share, related to the gain from the sale of centers to Starwood.

Taubman Centers/9



TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Year Ended December 31, 2014 and 2013
(in thousands of dollars)
				2014				2013
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		371,454		197,958		417,729		172,305
		Percentage rents		22,929		10,998		28,512		10,280
		Expense recoveries		239,782		118,105		272,494		104,164
		Management, leasing, and development services		12,349				16,142
		Other		32,615		10,956		32,277		7,971
			Total revenues	679,129		338,017		767,154		294,720

EXPENSES:
		Maintenance, taxes, utilities, and promotion		190,119		84,026		215,825		74,966
		Other operating		65,142		19,083		71,235		15,441
		Management, leasing, and development services		6,220				5,321
		General and administrative		48,292				50,014
		Restructuring charge		3,706
		Interest expense		90,803		73,749		130,023		67,948
		Depreciation and amortization		120,207		49,850		155,772		39,336
			Total expenses	524,489		226,708		628,190		197,691

Nonoperating income (expense) (2)				(42,807	)	(22	)	1,348		(6	)
				111,833		111,287		140,312		97,023
Income tax expense				(2,267	)			(3,409	)
Equity in income of Unconsolidated Joint Ventures				62,002				52,465
				171,568				189,368
Gain on dispositions, net of tax (3)				1,106,554
Net income				1,278,122				189,368
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(34,239	)			(10,344	)
		Noncontrolling share of income of TRG		(350,870	)			(46,434	)
Distributions to participating securities of TRG (4)				(6,018	)			(1,749	)
Preferred stock dividends				(23,138	)			(20,933	)
Net income attributable to Taubman Centers, Inc. common shareowners				863,857				109,908

SUPPLEMENTAL INFORMATION:
		EBITDA - 100% (5)		1,439,130		234,886		426,107		204,307
		EBITDA - outside partners' share		(46,769	)	(102,234	)	(24,104	)	(89,368	)
		Beneficial interest in EBITDA (5)		1,392,361		132,652		402,003		114,939
		Beneficial share of the gain on dispositions		(1,092,859	)
		Beneficial interest expense		(82,702	)	(40,416	)	(121,353	)	(37,554	)
		Beneficial income tax expense - TRG and TCO		(2,267	)			(3,409	)
		Beneficial income tax expense - TCO		373				181
		Non-real estate depreciation		(3,500	)			(3,038	)
		Preferred dividends and distributions		(23,138	)			(20,933	)
		Funds from Operations contribution		188,268		92,236		253,451		77,385

STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries,
			and ground rent expense at TRG %	1,785		1,418		3,999		1,296
		Green Hills purchase accounting adjustments - minimum rents increase		725				787
		Green Hills, El Paseo Village, and Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	1,223				3,180
		Waterside Shops purchase accounting adjustments - interest expense reduction				1,051				1,051
		Taubman BHO headquarters purchase accounting adjustment
			interest expense reduction	607

(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. International Plaza's operations were consolidated through the disposition date. Subsequent to the disposition, the Company's remaining 50.1% interest is accounted for under the equity method of accounting within Unconsolidated Joint Ventures. In addition, Arizona Mills' operations were accounted for under equity method accounting through the disposition in January 2014.
(2	)	Nonoperating expense for the year ended December 31, 2014 includes $36.4 million for the loss on the early extinguishment of debt, $3.3 million of disposition costs related to the sale of centers to Starwood, and $7.8 million in connection with the discontinuation of hedge accounting related to the MacArthur interest rate swap.
(3	)	Amount represents the gain on dispositions of interests in International Plaza, Arizona Mills, land in Syosset, New York related to the former Oyster Bay project, and the sale of centers to Starwood. The gain reported is net of income tax expense of $9.7 million.
(4	)	During the year ended December 31, 2014, the distributions to participating securities of TRG include the special dividend of $4.75 per deferred unit.
(5	)	For the year ended December 31, 2014, EBITDA includes the Company's $486.6 million (before tax) gain from the dispositions of interests in International Plaza, Arizona Mills, and land in Syosset, New York related to the former Oyster Bay project and $629.7 million, $606.2 million at beneficial share, related to the gain from the sale of centers to Starwood.

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, 2014 and 2013
(in thousands of dollars except as noted; may not add or recalculate due to rounding)

		2014					2013
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit
Net income attributable to TCO common shareowners - Basic		439,706		63,322,399	6.94		39,834		63,408,637	0.63

Add distributions to participating securities of TRG		4,609		871,262			436		871,262
Add impact of share-based compensation		2,173		861,841			182		787,078

Net income attributable to TCO common shareowners - Diluted		446,488		65,055,502	6.86		40,452		65,066,977	0.62

Add depreciation of TCO's additional basis		1,617			0.02		1,720			0.03
Add TCO's additional basis in assets disposed		11,895			0.18
Add TCO's additional income tax expense		115			0.00		49			0.00

Net income attributable to TCO common shareowners,
	excluding TCO additional basis items and income tax expense	460,115		65,055,502	7.07		42,221		65,066,977	0.65

Add:
	Noncontrolling share of income of TRG	179,948		25,135,450			16,519		25,176,300

Net income attributable to partnership unitholders
	and participating securities	640,063		90,190,952	7.10		58,740		90,243,277	0.65

Add (less) depreciation and amortization:
	Consolidated businesses at 100%	23,686			0.26		39,510			0.44
	Depreciation of TCO's additional basis	(1,617	)		(0.02	)	(1,720	)		(0.02	)
	Noncontrolling partners in consolidated joint ventures	(861	)		(0.01	)	(1,314	)		(0.01	)
	Share of Unconsolidated Joint Ventures	8,925			0.10		6,382			0.07
	Non-real estate depreciation	(922	)		(0.01	)	(802	)		(0.01	)

Less TCO's additional basis in assets disposed		(11,895	)		(0.13)
Less beneficial share of gain on dispositions		(606,239	)		(6.72)
Less impact of share-based compensation		(2,173	)		(0.02)		(182	)		(0.00)

Funds from Operations		48,967		90,190,952	0.54		100,614		90,243,277	1.11

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

Funds from Operations attributable to TCO,
	excluding additional income tax expense	35,053			0.54		72,019			1.11

Less TCO's additional income tax expense		(115	)		(0.00	)	(49	)		(0.00)

Funds from Operations attributable to TCO		34,938			0.54		71,970			1.11

Funds from Operations		48,967		90,190,952	0.54		100,614		90,243,277	1.11

Beneficial share of early extinguishment of debt charge		35,993			0.40
Beneficial share of disposition costs related to the Starwood sale		2,309			0.03
Beneficial share of discontinuation of hedge accounting - MacArthur		2,143			0.02
Restructuring charge		675			0.01

Adjusted Funds from Operations		90,087		90,190,952	1.00		100,614		90,243,277	1.11

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

Adjusted Funds from Operations attributable to TCO,
	excluding additional income tax expense	64,489			1.00		72,019			1.11

Less TCO's additional income tax expense		(115	)		(0.00)		(49	)		(0.00)

Adjusted Funds from Operations attributable to TCO		64,374			1.00		71,970			1.11

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, 2014 and 2013
(in thousands of dollars except as noted; may not add or recalculate due to rounding)

		2014					2013
				Shares	Per Share				Shares	Per Share
		Dollars		/Units	/Unit		Dollars		/Units	/Unit
Net income attributable to TCO common shareowners - Basic		863,857		63,267,800	13.65		109,908		63,591,523	1.73

Add distributions to participating securities of TRG		6,018		871,262
Add impact of share-based compensation		4,915		782,002			497		983,889

Net income attributable to TCO common shareowners - Diluted		874,790		64,921,064	13.47		110,405		64,575,412	1.71

Add depreciation of TCO's additional basis		6,674			0.10		6,880			0.11
Add TCO's additional basis in assets disposed		11,895			0.18
Add TCO's additional income tax expense		373			0.01		181			0.00

Net income attributable to TCO common shareowners,
	excluding TCO additional basis items and income tax expense	893,732		64,921,064	13.77		117,466		64,575,412	1.82

Add:
	Noncontrolling share of income of TRG	350,870		25,141,042			46,434		25,231,483
	Distributions to participating securities of TRG						1,749		871,262

Net income attributable to partnership unitholders
	and participating securities	1,244,602		90,062,106	13.82		165,649		90,678,157	1.83

Add (less) depreciation and amortization:
	Consolidated businesses at 100%	120,207			1.33		155,772			1.72
	Depreciation of TCO's additional basis	(6,674	)		(0.07	)	(6,880	)		(0.08	)
	Noncontrolling partners in consolidated joint ventures	(4,429	)		(0.05	)	(5,090	)		(0.06	)
	Share of Unconsolidated Joint Ventures	30,234			0.34		24,920			0.27
	Non-real estate depreciation	(3,500	)		(0.04	)	(3,038	)		(0.03	)

Less TCO's additional basis in assets disposed		(11,895	)		(0.13	)
Less beneficial share of gain on dispositions		(1,083,126	)		(12.03	)
Less impact of share-based compensation		(4,915	)		(0.05	)	(497	)		(0.01	)

Funds from Operations		280,504		90,062,106	3.11		330,836		90,678,157	3.65

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

Funds from Operations attributable to TCO,
	excluding additional income tax expense	200,729			3.11		236,843			3.65

Less TCO's additional income tax expense		(373	)		(0.00)		(181	)		(0.00)

Funds from Operations attributable to TCO		200,356			3.11		236,662			3.65

Funds from Operations		280,504		90,062,106	3.11		330,836		90,678,157	3.65

Beneficial share of early extinguishment of debt charge		35,993			0.40
Beneficial share of disposition costs related to the Starwood sale		3,263			0.04
Beneficial share of discontinuation of hedge accounting - MacArthur		7,376			0.08
Restructuring charge		3,706			0.04

Adjusted Funds from Operations		330,842		90,062,106	3.67		330,836		90,678,157	3.65

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

Adjusted Funds from Operations attributable to TCO,
	excluding additional income tax expense	236,762			3.67		236,843			3.65

Less TCO's additional income tax expense		(373	)		(0.00)		(181	)		(0.00)

Adjusted Funds from Operations attributable to TCO		236,389			3.67		236,662			3.65

Taubman Centers/12



TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA
For the Periods Ended December 31, 2014 and 2013
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)

			Three Months Ended				Year Ended
			2014		2013		2014		2013

Net income			656,274		66,166		1,278,122		189,368

Add (less) depreciation and amortization:
	Consolidated businesses at 100%		23,686		39,510		120,207		155,772
	Noncontrolling partners in consolidated joint ventures		(861	)	(1,314	)	(4,429	)	(5,090	)
	Share of Unconsolidated Joint Ventures		8,925		6,382		30,234		24,920

Add (less) interest expense and income tax expense:
	Interest expense:
		Consolidated businesses at 100%	15,857		30,434		90,803		130,023
		Noncontrolling partners in consolidated joint ventures	(1,842	)	(2,130	)	(8,101	)	(8,670	)
		Share of Unconsolidated Joint Ventures	10,611		9,362		40,416		37,554
	Income tax expense:
		Income tax expense on dispositions of International Plaza, Arizona Mills, and Oyster Bay					9,733
		Other income tax expense	574		694		2,267		3,409

Less noncontrolling share of income of consolidated joint ventures			(26,226	)	(3,592	)	(34,239	)	(10,344	)

Beneficial Interest in EBITDA			686,998		145,512		1,525,013		516,942

Add TCO's additional basis in assets disposed			11,895				11,895

Beneficial Interest in EBITDA, before additional basis in assets disposed			698,893		145,512		1,536,908		516,942

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

Beneficial Interest in EBITDA attributable to TCO, before additional basis in assets disposed			500,301		104,157		1,099,794		370,094

Less TCO's additional basis in assets disposed			(11,895	)			(11,895	)

Beneficial Interest in EBITDA attributable to TCO			488,406		104,157		1,087,899		370,094

Beneficial Interest in EBITDA			686,998		145,512		1,525,013		516,942

	Beneficial share of the gain on dispositions		(606,239	)			(1,092,859	)
	Beneficial share of early extinguishment of debt charge		35,993				35,993
	Beneficial share of disposition costs related to the Starwood sale		2,309				3,263
	Beneficial share of discontinuation of hedge accounting - MacArthur		2,143				7,376
	Restructuring charge		675				3,706

Adjusted Beneficial Interest in EBITDA			121,879		145,512		482,492		516,942

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

Adjusted Beneficial Interest in EBITDA attributable to TCO			87,247		104,157		345,283		370,094

Taubman Centers/13



TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended December 31, 2014, 2013, and 2012
(in thousands of dollars)
				Three Months Ended						Three Months Ended						Year Ended						Year Ended
				2014			2013			2013			2012			2014			2013			2013			2012
Net income				656,274			66,166			66,166			49,131			1,278,122			189,368			189,368			157,817

Add (less) depreciation and amortization:
		Consolidated businesses at 100%		23,686			39,510			39,510			40,434			120,207			155,772			155,772			149,517
		Noncontrolling partners in consolidated joint ventures		(861	)		(1,314	)		(1,314	)		(2,040	)		(4,429	)		(5,090	)		(5,090	)		(9,690	)
		Share of Unconsolidated Joint Ventures		8,925			6,382			6,382			6,902			30,234			24,920			24,920			22,688
Add (less) interest expense and income tax expense:
		Interest expense:
			Consolidated businesses at 100%	15,857			30,434			30,434			33,470			90,803			130,023			130,023			142,616
			Noncontrolling partners in consolidated joint ventures	(1,842	)		(2,130	)		(2,130	)		(3,951	)		(8,101	)		(8,670	)		(8,670	)		(16,585	)
			Share of Unconsolidated Joint Ventures	10,611			9,362			9,362			10,778			40,416			37,554			37,554			35,862
		Share of income tax expense:
			Income tax expense on dispositions of International Plaza, Arizona Mills, and Oyster Bay													9,733
			Other income tax expense	574			694			694			3,526			2,267			3,409			3,409			4,919
Less noncontrolling share of income of consolidated joint ventures				(26,226	)		(3,592	)		(3,592	)		(5,142	)		(34,239	)		(10,344	)		(10,344	)		(11,930	)

Add EBITDA attributable to outside partners:
		EBITDA attributable to noncontrolling partners in consolidated joint ventures		28,929			7,036			7,036			11,133			46,769			24,104			24,104			38,250
		EBITDA attributable to outside partners in Unconsolidated Joint Ventures		29,889			26,598			26,598			24,957			102,234			89,368			89,368			87,216

EBITDA at 100%				745,816			179,146			179,146			169,198			1,674,016			630,414			630,414			600,680

Add (less) items excluded from shopping center NOI:
		General and administrative expenses		13,799			13,338			13,338			11,638			48,292			50,014			50,014			39,659
		Management, leasing, and development services, net		(2,044	)		(1,039	)		(1,039	)		1,373			(6,129	)		(10,821	)		(10,821	)		(4,394	)
		Straight-line of rents		(1,937	)		(3,015	)		(3,015	)		(1,981	)		(5,419	)		(7,335	)		(7,335	)		(6,516	)
		Gain on dispositions		(629,667	)											(1,116,287	)
		Early extinguishment of debt charge		36,372												36,372
		Discontinuation of hedge accounting - MacArthur		2,256												7,763
		Restructuring charge		675												3,706
		Disposition costs related to the Starwood sale		2,309												3,269
		Gain on sale of peripheral land																	(863	)		(863	)
		Gain on sale of marketable securities																	(1,323	)		(1,323	)
		Dividend income		(767	)											(2,364	)
		Interest income		(636	)		(31	)		(31	)		(25	)		(1,400	)		(175	)		(175	)		(295	)
		Other nonoperating expense (income)		(57	)											(811	)		1,019			1,019
		Non-center specific operating expenses and other		5,346			6,374			6,449			9,640			19,933			24,358			24,700			31,413

NOI - all centers at 100%				171,465			194,773			194,848			189,843			660,941			685,288			685,630			660,547
Less - NOI of non-comparable centers				(4,731	)	(1)	(33,940	)	(2)	(2,900	)	(3)	(2,198	)	(4)	(72,320	)	(5)	(119,293	)	(2)	(10,195	)	(3)	(8,010	)	(4)
NOI at 100% - comparable centers				166,734			160,833			191,948			187,645			588,621			565,995			675,435			652,537

NOI - growth %				3.7	%					2.3	%					4.0	%					3.5	%

NOI at 100% - comparable centers				166,734			160,833			191,948			187,645			588,621			565,995			675,435			652,537
Lease cancellation income				(5,514	)		(2,640	)		(2,760	)		(1,913	)		(12,569	)		(5,344	)		(5,767	)		(4,928	)
NOI at 100% - comparable centers excluding lease cancellation income				161,220			158,193			189,188			185,732			576,052			560,651			669,668			647,609

NOI excluding lease cancellation income - growth %				1.9	%					1.9	%					2.7	%					3.4	%

(1	)	Includes Taubman Prestige Outlets Chesterfield, The Mall at University Town Center, and the portfolio of centers sold to Starwood.
(2	)	Includes Arizona Mills, Taubman Prestige Outlets Chesterfield and the portfolio of centers sold to Starwood.
(3	)	Includes City Creek Center and Taubman Prestige Outlets Chesterfield.
(4	)	Includes City Creek Center.
(5	)	Includes Taubman Prestige Outlets Chesterfield, Arizona Mills, The Mall at University Town Center, and the portfolio of centers sold to Starwood.

Taubman Centers/14



TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of December 31, 2014 and December 31, 2013
(in thousands of dollars)
			As of
			December 31, 2014		December 31, 2013
Consolidated Balance Sheet of Taubman Centers, Inc. (1) :

Assets:
	Properties		3,262,505		4,485,090
	Accumulated depreciation and amortization		(970,045	)	(1,516,982	)
			2,292,460		2,968,108
	Investment in Unconsolidated Joint Ventures		370,004		327,692
	Cash and cash equivalents		276,423		40,993
	Restricted cash		37,502		5,046
	Accounts and notes receivable, net		49,245		73,193
	Accounts receivable from related parties		832		1,804
	Deferred charges and other assets		188,435		89,386
			3,214,901		3,506,222
Liabilities:
	Notes payable		2,025,505		3,058,053
	Accounts payable and accrued liabilities		292,802		292,280
	Distributions in excess of investments in and net income of
	Unconsolidated Joint Ventures		476,651		371,549
			2,794,958		3,721,882
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	633		631
		Additional paid-in capital	815,961		796,787
		Accumulated other comprehensive income (loss)	(15,068	)	(8,914	)
		Dividends in excess of net income	(483,188	)	(908,656	)
			318,363		(120,127	)
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(14,796	)	(37,191	)
		Noncontrolling interests in partnership equity of TRG	116,376		(58,342	)
			101,580		(95,533	)
			419,943		(215,660	)
			3,214,901		3,506,222
Combined Balance Sheet of Unconsolidated Joint Ventures (1)(2):
Assets:
	Properties		1,580,926		1,305,658
	Accumulated depreciation and amortization		(548,646	)	(478,820	)
			1,032,280		826,838
	Cash and cash equivalents		49,765		28,782
	Accounts and notes receivable, net		38,788		33,626
	Deferred charges and other assets		33,200		28,095
			1,154,033		917,341
Liabilities:
	Notes payable		1,989,546		1,551,161
	Accounts payable and other liabilities		103,161		70,226
			2,092,707		1,621,387
Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(520,715	)	(406,266	)
	Accumulated deficiency in assets - Joint Venture Partners		(407,869	)	(285,904	)
	Accumulated other comprehensive loss - TRG		(5,045	)	(5,938	)
	Accumulated other comprehensive loss - Joint Venture Partners		(5,045	)	(5,938	)
			(938,674	)	(704,046	)
			1,154,033		917,341

(1)	International Plaza was consolidated in the Company's balance sheet as of December 31, 2013 but is an Unconsolidated Joint Venture as of December 31, 2014 as a result of the January 2014 disposition of interests.

(2)	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, 2015

Funds from Operations per common share	3.18		3.28

Real estate depreciation - TRG	(1.46	)	(1.41	)

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

Depreciation of TCO's additional basis in TRG	(0.10	)	(0.10	)

Net income attributable to common shareowners, per common share (EPS)	1.59		1.74

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