BLOOMFIELD HILLS, Mich., April 29 /PRNewswire-FirstCall/ -- Taubman Centers, Inc. today reported its financial results for the first quarter of 2009.
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Net income allocable to common shareholders per diluted common share (EPS) for the quarter ended March 31, 2009 was $0.22, versus $0.09 per diluted common share for the quarter ended March 31, 2008.
For the quarter ended March 31, 2009, Funds from Operations (FFO) per diluted share was $0.70, an increase of 2.9 percent from $0.68 for the quarter ended March 31, 2008. The first quarter 2009 results include a $2.5 million restructuring charge. Excluding this charge, Adjusted FFO per diluted share was $0.73 for the quarter, an increase of 7.4 percent from the quarter ended March 31, 2008. There were no adjustments in the first quarter of 2008.
"Our results are generally in line with our expectations," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. "They were positively impacted by an increase in lease cancellation income and reduced general administrative and predevelopment expenses. In this difficult environment, we are managing our costs, focusing on our core properties, and staying alert for opportunities that may be created by this period of uncertainty and upheaval."
Operating Statistics
Ending occupancy for the portfolio was 88.6 percent on March 31, 2009 versus 89.9 percent on March 31, 2008, a decline primarily due to the closing in late 2008 of three big box store locations at the company's value centers, which were part of national bankruptcies. Average rent per square foot in the company's 16 consolidated properties for the first quarter of 2009 was $43.96, up 0.7 percent from the $43.64 for the first quarter of 2008. In the unconsolidated properties, average rent was $45.08, up 1.9 percent from the first quarter of 2008.
Mall tenant sales per square foot declined 13.5 percent from the first quarter of 2008 and were down for nearly all categories. Categories that have been more moderately impacted include junior apparel, family shoes and food. Theaters - which are excluded from the company's sales per square foot numbers because of their size - reported strong increases.
"To be comparable to our peers, we have begun reporting 12-month trailing sales per square foot," said Mr. Taubman. "For the twelve month period ended March 31, our mall tenant sales per square foot were down 6.6 percent - to $522 per square foot."
Solid Balance Sheet
"In this unprecedented time, it's clear a solid balance sheet has never been a more important corporate asset," said Lisa A. Payne, vice chairman and chief financial officer of Taubman Centers. "The company has excellent liquidity and solid balance sheet ratios. We have no debt maturities until the fall of 2010 and collectively through 2011, only about 13 percent of our share of total debt matures." The company's secured credit lines total $590 million and mature in 2011 with a one year extension option to 2012 on $550 million of the lines. As of March 31, $334 million was available for use.
Guidance
The company is maintaining its guidance on 2009 FFO per diluted share in a range of $2.69 to $2.94. Excluding the restructuring charge that was recognized in the first quarter of 2009, the company expects 2009 Adjusted FFO per diluted share to be in the range of $2.72 to $2.97. The company anticipates its 2009 Net income allocable to common shareholders (EPS) will be in the range of $0.69 to $0.99 per diluted common share.
Supplemental Investor Information Available
The company provides supplemental investor information along with its earnings announcements, available online at http://www.taubman.com/ under "Investor Relations." This includes the following:
-- Income Statement -- Earnings Reconciliations -- Changes in Funds from Operations and Earnings Per Share -- Components of Other Income, Other Operating Expense, and Gains on Land Sales and Other Nonoperating Income -- Recoveries Ratio Analysis -- Balance Sheets -- Debt Summary -- Other Debt, Equity and Certain Balance Sheet Information -- Construction -- Capital Spending -- Operational Statistics -- Owned Centers -- Major Tenants in Owned Portfolio -- Anchors in Owned Portfolio Investor Conference Call
The company will host a conference call at 12:00 p.m. (EDT) on April 30 to discuss these results, business conditions and the company's outlook for 2009. The conference call will be simulcast at http://www.taubman.com/ under "Investor Relations" as well as http://www.earnings.com/ and http://www.streetevents.com/. An online replay will follow shortly after the call and continue for 90 days. In addition, the conference call will be available as a podcast at http://www.reitcafe.com/.
Taubman Centers is a real estate investment trust engaged in the development and management of regional and super regional shopping centers. Taubman's 24 U.S. owned and/or managed properties, the most productive in the industry, serve major markets from coast to coast. The company's Taubman Asia subsidiary is working on retail projects in Macao, China and Incheon, South Korea. Taubman Centers is headquartered in Bloomfield Hills, Michigan. For more information about Taubman, visit http://www.taubman.com/.
For ease of use, references in this press release to "Taubman Centers" or "Taubman" mean Taubman Centers, Inc. or one or more of a number of separate, affiliated entities. Business is actually conducted by an affiliated entity rather than Taubman Centers, Inc. itself.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management's current views with respect to future events and financial performance. Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to the ongoing U.S. recession, the existing global credit and financial crisis and other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, and adverse changes in the retail industry. Other risks and uncertainties are discussed in the company's filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.
TAUBMAN CENTERS, INC. Table 1 - Summary of Results For the Periods Ended March 31, 2009 and 2008 --------------------------------------------- (in thousands of dollars, except as indicated) Three Months Ended ------------------ 2009 2008 (1) ---- ---- Net income (1), (2) 24,526 23,516 Noncontrolling share of income of consolidated joint ventures (1) (1,693) (1,176) Distributions in excess of noncontrolling share of income of consolidated joint ventures (1) (2,137) Noncontrolling share of income of TRG (1) (6,586) (5,916) Distributions in excess of noncontrolling share of income of TRG (1) (5,105) TRG preferred distributions (615) (615) Preferred dividends (3,658) (3,658) Distributions to participating securities of TRG (475) (362) Net income attributable to Taubman Centers, Inc. common shareowners (1) 11,499 4,547 Net income per common share - basic and diluted (1) 0.22 0.09 Beneficial interest in EBITDA - Consolidated Businesses (2), (3) 77,689 77,217 Beneficial interest in EBITDA - Unconsolidated Joint Ventures (3) 23,948 23,114 Funds from Operations (2), (3) 56,570 54,756 Funds from Operations attributable to TCO (2), (3) 37,758 36,403 Funds from Operations per common share - basic (2), (3) 0.71 0.69 Funds from Operations per common share - diluted (2), (3) 0.70 0.68 Weighted average number of common shares outstanding - basic 53,066,910 52,675,207 Weighted average number of common shares outstanding - diluted 53,265,959 53,264,489 Common shares outstanding at end of period 53,120,036 52,808,293 Weighted average units - Operating Partnership - basic 79,507,119 79,232,651 Weighted average units - Operating Partnership - diluted 80,577,430 80,693,195 Units outstanding at end of period - Operating Partnership 79,557,721 79,365,737 Ownership percentage of the Operating Partnership at end of period 66.8% 66.5% Number of owned shopping centers at end of period 23 23 Operating Statistics: Mall tenant sales (4) 941,469 1,083,608 Ending occupancy 88.6% 89.9% Average occupancy 88.8% 90.0% Leased space at end of period 90.5% 93.1% Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses (4) 18.4% 15.8% Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures (4) 16.1% 13.8% Rent per square foot - Consolidated Businesses (5) 43.96 43.64 Rent per square foot - Unconsolidated Joint Ventures 45.08 44.24 (1) In January of 2009, the Company adopted Statement No. 160 "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51" (SFAS 160). Consequently, noncontrolling interests in consolidated subsidiaries with equity balances of less than zero are now allocated income equal to their ownership interests in the subsidiaries. Under previous accounting, because the net equity balances of the Operating Partnership and the outside partners in certain consolidated joint ventures were less than zero, the income attributable to the noncontrolling partners was equal to their share of distributions. The net equity of these noncontrolling partners is less than zero due to accumulated distributions in excess of net income and not as a result of operating losses. Net income attributable to Taubman Centers, Inc. common shareowners for the period ended March 31, 2009 would have been $4.5 million or $0.08 per common share if accounted for under the previous method of accounting for noncontrolling interests prior to SFAS 160. Certain 2008 amounts within tables 1 to 5 of this press release have been reclassified to conform with 2009 classifications. (2) Includes a $2.5 million restructuring charge for the quarter ended March 31, 2009. No similar charge was incurred in 2008. (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 National Association of Real Estate Investment Trusts (NAREIT) defines Funds from Operations (FFO) as net income (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains from extraordinary items and sales of properties, 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. FFO is primarily used by the Company in measuring performance and in formulating corporate goals and compensation. These non-GAAP measures as presented by the Company are not necessarily comparable to similarly titled measures used by other REITs due to the fact that not all REITs use common definitions. None of these non-GAAP measures should be considered alternatives to net income as an indicator of the Company's operating performance, and they do not represent cash flows from operating, investing, or financing activities as defined by GAAP. (4) Based on reports of sales furnished by mall tenants. (5) Average rent per square foot excludes a positive prior year adjustment. TAUBMAN CENTERS, INC. Table 2 - Income Statement For the Three Months Ended March 31, 2009 and 2008 ---------------------------------------------------- (in thousands of dollars) 2009 2008 (1) -------------------------- ------------------------ UNCON- UNCON- SOLIDATED SOLIDATED CONSOLIDATED JOINT CONSOLIDATED JOINT BUSINESSES VENTURES (2) BUSINESSES VENTURES (2) ------------ -------------- ----------- ------------- REVENUES: Minimum rents 87,436 38,967 86,570 38,411 Percentage rents 2,160 1,108 2,575 1,461 Expense recoveries 56,758 23,826 57,464 22,414 Management, leasing, and development services 3,556 3,694 Other 7,780 2,189 7,114 1,788 ----- ----- ----- ----- Total revenues 157,690 66,090 157,417 64,074 EXPENSES: Maintenance, taxes, and utilities 44,541 16,037 43,540 15,348 Other operating 14,965 6,388 18,301 6,547 Restructuring charge (3) 2,461 Management, leasing, and development services 1,906 2,257 General and administrative 6,888 8,333 Interest expense 36,233 15,950 36,982 15,875 Depreciation and amortization 36,293 9,437 35,335 9,623 ------ ----- ------ ----- Total expenses 143,287 47,812 144,748 47,393 Gains on land sales and other nonoperating income 235 54 1,803 319 --- -- ----- --- 14,638 18,332 14,472 17,000 ====== ====== Income tax expense (270) (190) Equity in income of Unconsolidated Joint Ventures 10,158 9,234 ------ ----- Net income 24,526 23,516 Noncontrolling interests: Noncontrolling share of income of consolidated joint ventures (1,693) (1,176) Distributions in excess of noncontrolling share of income of consolidated joint ventures (2,137) TRG preferred distributions (615) (615) Noncontrolling share of income of TRG (6,586) (5,916) Distributions in excess of noncontrolling share of income of TRG (5,105) Distributions to participating securities of TRG (475) (362) Preferred dividends (3,658) (3,658) ------ ------ Net income attributable to Taubman Centers, Inc. common shareowners 11,499 4,547 ====== ===== SUPPLEMENTAL INFORMATION (3): EBITDA - 100% (3) 87,164 43,719 86,789 42,498 EBITDA - outside partners' share(3) (9,475) (19,771) (9,572) (19,384) ------ ------- ------ ------- Beneficial interest in EBITDA (3) 77,689 23,948 77,217 23,114 Beneficial interest expense (31,360) (8,284) (32,154) (8,262) Beneficial income tax expense (270) (190) Non-real estate depreciation (880) (696) Preferred dividends and distributions (4,273) (4,273) ------ ------ ------ ------ Funds from Operations contribution (3) 40,906 15,664 39,904 14,852 ====== ====== ====== ====== Net straightline adjustments to rental revenue, recoveries, and ground rent expense at TRG% 80 55 593 61 == == === == (1) Certain amounts have been reclassified to conform to 2009 classifications. (2) 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. The Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method. (3) In the first quarter of 2009, the Company recognized a restructuring charge which primarily represents the costs of terminations of personnel. TAUBMAN CENTERS, INC. Table 3 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations and Adjusted Funds from Operations For the Periods Ended March 31, 2009 and 2008 ------------------------------------------------------------------------- (in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) Three Months Ended ------------------ 2009 2008 (1) ---- ---- Net income attributable to TCO common shareowners 11,499 4,547 Add (less) depreciation and amortization: Consolidated businesses at 100% 36,293 35,335 Noncontrolling partners in consolidated joint ventures (2,909) (3,568) Share of unconsolidated joint ventures 5,506 5,618 Non-real estate depreciation (880) (696) Add noncontrolling interests: Noncontrolling share of income of TRG 6,586 5,916 Distributions in excess of noncontrolling share of income of TRG 5,105 Distributions in excess of noncontrolling share of income of consolidated joint ventures 2,137 Add distributions to participating securities of TRG 475 362 --- --- Funds from Operations 56,570 54,756 TCO's average ownership percentage of TRG 66.7% 66.5% ---- ---- Funds from Operations attributable to TCO 37,758 36,403 ====== ====== Funds from Operations 56,570 54,756 Restructuring charge 2,461 ----- ----- Adjusted Funds from Operations (2) 59,031 54,756 TCO's average ownership percentage of TRG 66.7% 66.5% ---- ---- Adjusted Funds from Operations attributable to TCO (2) 39,401 36,403 ====== ====== (1) Certain amounts have been reclassified to conform to 2009 classifications. (2) FFO in 2009 includes, and Adjusted FFO excludes, the restructuring charge which primarily represents the costs of terminations of personnel. The Company discloses this Adjusted FFO due to the significance and infrequent nature of the charges. Given the significance of the charges, the Company believes it is essential to a reader's understanding of the Company's results of operations to emphasize the impact on the Company's earnings measures. The adjusted measures are not and should not be considered alternatives to net income or cash flows from operating, investing, or financing activities as defined by GAAP. TAUBMAN CENTERS, INC. Table 4 - Reconciliation of Net Income to Beneficial Interest in EBITDA For the Periods Ended March 31, 2009 and 2008 ----------------------------------------------------------------------- (in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) Three Months Ended ------------------ 2009 2008 (1) ---- ---- Net income 24,526 23,516 Add (less) depreciation and amortization: Consolidated businesses at 100% 36,293 35,335 Noncontrolling partners in consolidated joint ventures (2,909) (3,568) Share of unconsolidated joint ventures 5,506 5,618 Add (less) interest expense and income tax expense: Interest expense: Consolidated businesses at 100% 36,233 36,982 Noncontrolling partners in consolidated joint ventures (4,873) (4,828) Share of unconsolidated joint ventures 8,284 8,262 Income tax expense 270 190 Less noncontrolling share of income of consolidated joint ventures (1,693) (1,176) ------ ------ Beneficial Interest in EBITDA 101,637 100,331 TCO's average ownership percentage of TRG 66.7% 66.5% ---- ---- Beneficial Interest in EBITDA attributable to TCO 67,792 66,702 ====== ====== (1)Certain amounts have been reclassified to conform to 2009 classifications. TAUBMAN CENTERS, INC. Table 5 - Balance Sheets As of March 31, 2009 and December 31, 2008 ------------------------------------------ (in thousands of dollars) As of --------------------------------- March 31, 2009 December 31, 2008 -------------- ----------------- Consolidated Balance Sheet of Taubman Centers, Inc. (1): Assets: Properties 3,703,630 3,699,480 Accumulated depreciation and amortization (1,077,936) (1,049,626) ---------- ---------- 2,625,694 2,649,854 Investment in Unconsolidated Joint Ventures 89,052 89,933 Cash and cash equivalents 41,731 62,126 Accounts and notes receivable, net 44,347 46,732 Accounts receivable from related parties 2,145 1,850 Deferred charges and other assets 119,156 124,487 ------- ------- 2,922,125 2,974,982 ========= ========= Liabilities: Notes payable 2,809,631 2,796,821 Accounts payable and accrued liabilities 235,180 262,226 Dividends and distributions payable 22,002 Distributions in excess of investments in and net income of Unconsolidated Joint Ventures 154,091 154,141 ------- ------- 3,198,902 3,235,190 Equity: Taubman Centers, Inc. Shareowners' Equity: Series B Non- Participating Convertible Preferred Stock 26 26 Series G Cumulative Redeemable Preferred Stock Series H Cumulative Redeemable Preferred Stock Common Stock 531 530 Additional paid-in capital 557,338 556,145 Accumulated other comprehensive income (loss) (29,673) (29,778) Dividends in excess of net income (736,715) (726,097) -------- -------- (208,493) (199,174) Noncontrolling interests: Noncontrolling interests in consolidated joint ventures (89,727) (90,251) Noncontrolling interests in TRG (7,774) Preferred Equity of TRG 29,217 29,217 ------ ------ (68,284) (61,034) ------- ------- (276,777) (260,208) -------- -------- 2,922,125 2,974,982 ========= ========= (1) Certain 2008 amounts have been reclassified to conform to 2009 classifications. Combined Balance Sheet of Unconsolidated Joint Ventures: Assets: Properties 1,087,872 1,087,341 Accumulated depreciation and amortization (373,266) (366,168) -------- -------- 714,606 721,173 Cash and cash equivalents 17,884 28,946 Accounts and notes receivable 22,775 26,603 Deferred charges and other assets 19,835 20,098 ------ ------ 775,100 796,820 ======= ======= Liabilities: Notes payable 1,101,046 1,103,903 Accounts payable and other liabilities 45,989 61,570 ------ ------ 1,147,035 1,165,473 Accumulated Deficiency in Assets: Accumulated deficiency in assets - TRG (195,186) (194,178) Accumulated deficiency in assets - Joint Venture Partners (163,182) (160,862) Accumulated other comprehensive income (loss) - TRG (7,231) (7,288) Accumulated other comprehensive income (loss) - Joint Venture Partners (6,336) (6,325) ------ ------ (371,935) (368,653) -------- -------- 775,100 796,820 ======= ======= TAUBMAN CENTERS, INC. Table 6 - Annual Outlook ----------------------------------------------------------------- (all dollar amounts per common share on a diluted basis; amounts may not add due to rounding) Range for Year Ended December 31, Range for 2009 Before Year Ended Restructuring Restructuring December Charge Charge (1) 31, 2009 ------------- ---------- --------- Funds from Operations per common share 2.72 2.97 (0.03) 2.69 2.94 Real estate depreciation - TRG (1.85) (1.80) (1.85) (1.80) Distributions on participating securities of TRG (0.02) (0.02) (0.02) (0.02) Depreciation of TCO's additional basis in TRG (0.13) (0.13) (0.13) (0.13) ----- ----- ----- ----- Net income attributable to common shareowners, per common share 0.72 1.02 (0.03) 0.69 0.99 ==== ==== ===== ==== ==== (1) During the first quarter of 2009, the Company recognized a restructuring charge of $2.5 million, which represents primarily the cost of terminations of personnel.
Taubman Centers, Inc.
CONTACT: Barbara Baker of Taubman, Vice President, Investor Relations,
+1-248-258-7367, bbaker@taubman.com
Web Site: http://www.taubman.com/
