Taubman Centers, Inc. Issues Fourth Quarter and Full Year 2016 Results and Introduces 2017 Guidance

02/09/2017

- Mall Tenant Sales Per Square Foot Up 5 Percent for the Quarter and 0.9 Percent for the Year, Industry-leading at $792 per Square Foot

- Portfolio Releasing Spreads Nearly 19 Percent for the Year

- $1.1 Billion Revolving Line of Credit Facility Extended, New $300 Million Term Loan Added

BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)-- Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the quarter and full year periods ended December 31, 2016.

                 
  December 31, 2016   December 31, 2015   December 31, 2016   December 31, 2015
    Three Months Ended   Three Months Ended   Year Ended   Year Ended
Net income attributable to common $29,361 $25,839 $107,615 $109,418
shareowners, diluted (in thousands)

Growth rate

 

13.6%

     

(1.6)%

   
Net income attributable to common

 

 

shareowners (EPS) per diluted common $0.48

$0.42

$1.77

$1.76

share

Growth rate

 

14.3%

     

0.6%

   
Funds from Operations (FFO) per diluted
common share $1.10 $0.85 $3.91 $3.31

Growth rate

 

29.4%

     

18.1%

   
Adjusted Funds from Operations (Adjusted

 

 

FFO) per diluted common share

$1.01 (1)

$0.98 (2)

$3.58 (1)

$3.42 (2)

Growth rate

 

3.1%

     

4.7%

   

(1) Adjusted FFO for the three months and year ended December 31, 2016 excludes costs associated with shareowner activism and a gain, net of tax, recognized upon the conversion of a portion of the company’s investment in partnership units in Simon Property Group Limited Partnership to common shares of SPG. Adjusted FFO for the year ended December 31, 2016 also excludes a one-time payment the company received in the second quarter due to the termination of the company’s leasing services agreement at The Shops at Crystals (Las Vegas, Nev.).

(2) Adjusted FFO for the three months and year ended December 31, 2015 excludes an impairment charge related to the company’s predevelopment costs for Miami Worldcenter. Adjusted FFO for the year ended December 31, 2015 also excludes the reversal of certain prior period executive share-based compensation expense.

 

“We’re pleased with our results for the fourth quarter and full year 2016, which were in line with our expectations,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “In addition to solid results, this year we accomplished many goals, including opening three new centers, acquiring one of the most iconic shopping districts in the U.S., completing a number of key financings and raising our dividend, as we’ve done for 19 of the last 20 years. We are confident that through the continued execution of our strategy we will enhance our portfolio and drive value for our shareholders in 2017 and beyond.”

Operating Statistics

Comparable center NOI, excluding lease cancellation income, was up 3.9 percent for the year. For the fourth quarter, comparable center NOI, excluding lease cancellation income, was down 0.1 percent.

“Our NOI for the year benefited from increased minimum rent and recoveries,” said Mr. Taubman. “For the quarter, while minimum rent and other income were up, percentage rent was lower than we expected.”

Comparable mall tenant sales per square foot were $792 for 2016. “With strong growth in the fourth quarter, mall tenant sales per square foot for 2016 were up about one percent,” said Mr. Taubman. For the fourth quarter, mall tenant sales per square foot were up 5 percent. “Our results are reflective of a strong holiday season, as this was our best quarterly growth rate in more than three years. Sales growth was well-distributed across the portfolio, with all but two of our comparable centers posting increases during the fourth quarter.”

For the year, average rent per square foot in comparable centers was $61.07, up 2.8 percent from $59.41 in 2015. For the fourth quarter, average rent per square foot in comparable centers was $60.97, up 2 percent from average rent per square foot of $59.79 in 2015.

Trailing 12-month releasing spreads per square foot for the period ended December 31, 2016 were 18.8 percent.

Ending occupancy in comparable centers was 94.7 percent on December 31, 2016, down 0.5 percent from 95.2 percent on December 31, 2015. Leased space in comparable centers was 96.1 percent on December 31, 2016, down 0.8 percent from 96.9 percent on December 31, 2015. “Occupancy and leased space were impacted by the closing of three Sports Authority spaces that totaled 130,000 square feet, representing about 1.3 percent of comparable center space. All three spaces have very accretive redevelopment efforts underway,” said Mr. Taubman.

2016 Milestones

Financing Activity

During 2016, the company further strengthened its balance sheet by:

  • Completing a $320 million, 10-year, non-recourse financing on its 50 percent owned joint venture, Country Club Plaza. The loan bears interest at an all-in fixed rate of 3.88 percent and is interest-only for the first three years with 30-year principal amortization thereafter – March 28, 2016.
  • Completing a $165 million, 10-year, non-recourse refinancing on its 50 percent owned joint venture, Waterside Shops (Naples, Fla.). The loan bears interest at an all-in fixed rate of 3.89 percent – April 7, 2016.
  • Repaying the $82 million mortgage loan on The Gardens on El Paseo (Palm Desert, Calif.) April 11, 2016.
  • Completing a $550 million, 12-year, non-recourse refinancing on its 50 percent owned joint venture, Cherry Creek Shopping Center (Denver, Colo.). The loan is interest-only during the entire term at an all-in fixed rate of 3.87 percent – May 6, 2016.
  • Completing a $280 million, 10-year, non-recourse refinancing on its 50 percent owned joint venture, The Mall at University Town Center (Sarasota, Fla.). The loan is interest-only for the first six years and bears interest at an all-in fixed rate of 3.45 percent – Oct. 24, 2016.

In December, The Mall at Millenia (Orlando, Fla.), the company’s 50 percent owned joint venture, completed an incremental $100 million financing. The new, eight-year, non-recourse financing is secured by a second mortgage. The loan bears interest at an all-in fixed rate of 3.87 percent, and is interest only for the entire term of the loan, and is coterminous with the existing $350 million, 4 percent fixed rate loan. Proceeds will be received in two separate advances. The first $50 million was funded in December. The company’s $25 million share of excess proceeds was used to pay down the company’s lines of credit. The second advance will be received this month.

In February 2017, the company amended and restated its primary revolving line of credit, which included a new, unsecured, $300 million term loan and an extension of the $1.1 billion revolving credit facility. The new, five-year, term loan is interest-only. The revolving line of credit has been extended to February 2021, with two six-month extension options. The term loan and the revolving line of credit facility bear interest at a range based on the company’s total leverage ratio. As of today, the leverage ratio results in a rate of LIBOR plus 1.6 percent for the new term loan and a rate of LIBOR plus 1.45 percent with an annual facility fee of 0.225 percent for the revolver. Proceeds from the term loan were used to pay off the existing balances on the company’s lines of credit. The remaining net proceeds of approximately $21 million will be used for general business purposes.

2017 Guidance

The company is introducing guidance for 2017. The company expects FFO per diluted common share to be in the range of $3.67 to $3.82.

This guidance assumes comparable center NOI growth, excluding lease cancellation income, of about 3 ½ percent for the year.

Net income attributable to common shareholders (EPS) for the year is expected to be in the range of $1.20 to $1.45.

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 Common Share
  • Components of Other Income, Other Operating Expense, and Nonoperating Income, Net
  • Balance Sheets
  • Debt Summary
  • Other Debt, Equity and Certain Balance Sheet Information
  • Construction and Redevelopments
  • Capital Spending
  • Operational Statistics
  • Summary of Key Guidance Measures
  • 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 10 to discuss these results, business conditions and the company’s outlook for 2017. 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 is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 26 regional, super-regional and outlet shopping centers in the U.S. and Asia and one under development. Taubman’s U.S.-owned properties are the most productive in the publicly held U.S. regional mall industry. Founded in 1950, Taubman is headquartered in Bloomfield Hills, Mich. Taubman Asia, founded in 2005, 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. Forward-looking statements can be identified by words such as “will”, “may”, “could”, “expect”, “anticipate”, “believes”, “intends”, “should”, “plans”, “estimates”, “approximate”, “guidance” and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, the company assumes 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, uncertainties and other factors. Such factors include, but are not limited to: changes in market rental rates; unscheduled closings or bankruptcies of tenants; relationships with anchor tenants; trends in the retail industry; the liquidity of real estate investments; the company’s ability to comply with debt covenants; the availability and terms of financings; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in value of investments in foreign entities; the ability to hedge interest rate and currency risk; risks related to acquiring, developing, expanding, leasing and managing properties; changes in value of investments in foreign entities; risks related to joint venture properties; insurance costs and coverage; security breaches that could impact the company’s information technology, infrastructure or personal data; the loss of key management personnel; shareholder activism costs and related diversion of management time; terrorist activities; maintaining the company’s status as a real estate investment trust; changes in the laws of states, localities, and foreign jurisdictions that may increase taxes on the company’s operations; and changes in global, national, regional and/or local economic and geopolitical climates. 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.

       
TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended December 31, 2016 and 2015
(in thousands of dollars, except as indicated)
Three Months Ended Year Ended
2016 2015 2016 2015
Net income 50,894 46,595 188,151 192,557
Noncontrolling share of income of consolidated joint ventures (2,292 ) (3,179 ) (8,105 ) (11,222 )
Noncontrolling share of income of TRG (12,998 ) (11,393 ) (47,433 ) (47,208 )
Distributions to participating securities of TRG (544 ) (492 ) (2,117 ) (1,969 )
Preferred stock dividends (5,785 ) (5,785 ) (23,138 ) (23,138 )
Net income attributable to Taubman Centers, Inc. common shareowners 29,275 25,746 107,358 109,020
Net income per common share - basic 0.48 0.43 1.78 1.78
Net income per common share - diluted 0.48 0.42 1.77 1.76
Beneficial interest in EBITDA - Combined (1) 141,194 108,466 498,766 421,821
Adjusted Beneficial interest in EBITDA - Combined (1) 133,125 120,220 468,995 431,586
Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) 95,918 73,741 340,189 291,867
Funds from Operations attributable to TCO's common shareowners (1) 67,346 52,055 239,963 207,084
Funds from Operations per common share - basic (1) 1.11 0.86 3.98 3.37
Funds from Operations per common share - diluted (1) 1.10 0.85 3.91 3.31
Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG(1) 87,849 85,495 310,418 301,632
Adjusted Funds from Operations attributable to TCO's common shareowners (1) 62,108 60,355 219,390 213,969
Adjusted Funds from Operations per common share - basic (1) 1.03 1.00 3.63 3.49
Adjusted Funds from Operations per common share - diluted (1) 1.01 0.98 3.58 3.42
Weighted average number of common shares outstanding - basic 60,427,603 60,234,979 60,363,416 61,389,113
Weighted average number of common shares outstanding - diluted 60,993,380 60,936,147 60,829,555 62,161,334
Common shares outstanding at end of period 60,430,613 60,233,561
Weighted average units - Operating Partnership - basic 85,473,882 85,297,138 85,419,070 86,462,222
Weighted average units - Operating Partnership - diluted 86,910,920 86,869,568 86,756,471 88,105,705
Units outstanding at end of period - Operating Partnership 85,476,892 85,295,720
Ownership percentage of the Operating Partnership at end of period 70.7 % 70.6 %
Number of owned shopping centers at end of period 23 19
 
Operating Statistics:
Net Operating Income excluding lease cancellation income - growth % (1)(2) -0.1 % 3.4 % 3.9 % 3.1 %
Net Operating Income including lease cancellation income - growth % (1)(2) 0.3 % 1.2 % 3.4 % 2.3 %
Average rent per square foot - Consolidated Businesses (3) 63.27 62.09 63.83 61.37
Average rent per square foot - Unconsolidated Joint Ventures (3) 58.51 57.30 58.10 57.28
Average rent per square foot - Combined (3) 60.97 59.79 61.07 59.41
Average rent per square foot growth (3) 2.0 % 2.8 %
Ending occupancy - all centers 93.9 % 94.2 % 93.9 % 94.2 %
Ending occupancy - comparable (3) 94.7 % 95.2 % 94.7 % 95.2 %
Leased space - all centers 95.6 % 96.1 % 95.6 % 96.1 %
Leased space - comparable (3) 96.1 % 96.9 % 96.1 % 96.9 %
Mall tenant sales - all centers (4) 1,958,432 1,600,739 5,773,614 5,177,988
Mall tenant sales - comparable (3)(4) 1,568,221 1,490,636 4,921,032 4,821,329
Sales per square foot (3)(4) 792 785
All centers (4):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses 14.6 % 14.2 %
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures 14.2 % 13.8 %
Mall tenant occupancy costs as a percentage of tenant sales - Combined 14.4 % 14.0 %
Comparable centers (3)(4):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses 14.1 % 13.8 %
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures 13.9 % 13.8 %
Mall tenant occupancy costs as a percentage of tenant sales - Combined 14.0 % 13.8 %
 
(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, excluding centers impacted by significant redevelopment activity.
 
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, 2016, FFO and EBITDA were adjusted to exclude costs incurred associated with shareowner activism and a gain, net of tax recognized upon the conversion of a portion of the Company's investment in partnership units in Simon Property Group Limited Partnership to common shares of Simon Property Group, Inc. (SPG). In addition, for the year ended December 31, 2016, FFO and EBITDA were adjusted to exclude a lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at The Shops at Crystals (Crystals) due to a change in ownership of the center. For the three months and year ended December 31, 2015, FFO and EBITDA were adjusted to exclude an impairment charge for the write off of previously capitalized costs related to the pre-development of The Mall at Miami Worldcenter (Miami Worldcenter), a former development project in Miami, Florida. In addition, for the year ended December 31, 2015, FFO and EBITDA were adjusted to exclude the reversal of certain prior period share-based compensation expense upon the announcement of an executive management transition.
 
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.
 
The Company provides its beneficial interest in certain financial information of its Unconsolidated Joint Ventures. This beneficial information is derived as the Company’s ownership interest in the investee multiplied by the specific financial statement item being presented. Investors are cautioned that deriving the Company’s beneficial interest in this manner may not accurately depict the legal and economic implications of holding a non-controlling interest in the investee.
 
(2) Statistics exclude non-comparable centers as defined in the respective periods and have not been subsequently restated for changes in the pools of comparable centers.
 
(3) Statistics exclude non-comparable centers for all periods presented. The December 31, 2015 statistics have been restated to include comparable centers to 2016. Sales per square foot exclude spaces greater than or equal to 10,000 square feet.
 
(4) Based on reports of sales furnished by mall tenants.
 
TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended December 31, 2016 and 2015
(in thousands of dollars)      
      2016 2015
CONSOLIDATED

UNCONSOLIDATED

CONSOLIDATED

UNCONSOLIDATED

BUSINESSES  

JOINT VENTURES (1)

BUSINESSES  

JOINT VENTURES (1)

REVENUES:
Minimum rents 87,252 90,580 81,911 56,762
Percentage rents 10,060 7,193 11,194 5,282
Expense recoveries 55,176 50,393 50,885 40,551
Management, leasing, and development services 1,736 3,512
Other 11,967   9,405   8,725   4,355  
Total revenues 166,191 157,571 156,227 106,950
 
EXPENSES:
Maintenance, taxes, utilities, and promotion 46,598 44,212 41,148 27,406
Other operating (2) 21,012 13,458 17,501 4,390
Management, leasing, and development services 1,008 1,815
General and administrative 13,405 13,132
Costs associated with shareowner activism 3,000
Interest expense 24,440 30,304 18,590 21,000
Depreciation and amortization 38,040   34,022   28,780   15,633  
Total expenses 147,503 121,996 120,966 68,429
 
Nonoperating income, net (3) 14,212   144   1,544   (5 )
32,900 35,719 36,805 38,516
Income tax expense (3) (1,928 ) (413 ) (138 )  
35,306   38,516  
Equity in income of Unconsolidated Joint Ventures 19,922 21,682
Beneficial interest in UJV impairment charge - Miami Worldcenter (4)   (11,754 )
Net income 50,894 46,595
Net income attributable to noncontrolling interests:
Noncontrolling share of income of consolidated joint ventures (2,292 ) (3,179 )
Noncontrolling share of income of TRG (12,998 ) (11,393 )
Distributions to participating securities of TRG (544 ) (492 )
Preferred stock dividends (5,785 ) (5,785 )
Net income attributable to Taubman Centers, Inc. common shareowners 29,275   25,746  
 
SUPPLEMENTAL INFORMATION:
EBITDA - 100% 95,380 100,045 84,175 75,149
Beneficial interest in UJV impairment charge - Miami Worldcenter (4) (11,754 )
EBITDA - outside partners' share (7,093 ) (47,138 ) (6,135 ) (32,969 )
Beneficial interest in EBITDA 88,287 52,907 78,040 30,426
Beneficial interest expense (21,495 ) (15,665 ) (16,719 ) (11,365 )
Beneficial income tax expense - TRG and TCO (1,898 ) (307 ) (138 )
Beneficial income tax expense - TCO 465 19
Non-real estate depreciation (591 ) (737 )
Preferred dividends and distributions (5,785 )   (5,785 )  
Funds from Operations attributable to partnership unitholders and participating securities of TRG 58,983   36,935   54,680   19,061  
 
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% 1,420 303 549 572
Country Club Plaza purchase accounting adjustments - minimum rents increase at TRG % 27
The Mall at Green Hills purchase accounting adjustments - minimum rents increase 56 93
El Paseo Village and The Gardens on El Paseo purchase accounting
adjustments - interest expense reduction 297
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.
 
(2) In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $1.4 million for the three months ended December 31, 2015.
 
(3) During the three months ended December 31, 2016, the Company recognized an $11.1 million gain and $0.5 million of income tax expense upon the conversion of a portion of the Company's investment in partnership units in Simon Property Group Limited Partnership to common shares of SPG.
 
(4) During the three months ended December 31, 2015, the Company recognized an impairment charge of $11.8 million related to the pre-development of Miami Worldcenter.
 
TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Year Ended December 31, 2016 and 2015
(in thousands of dollars)      
      2016 2015
CONSOLIDATED

UNCONSOLIDATED

CONSOLIDATED UNCONSOLIDATED
BUSINESSES  

JOINT VENTURES (1)

BUSINESSES   JOINT VENTURES (1)
REVENUES:
Minimum rents 333,325 281,892 310,831 215,969
Percentage rents 20,020 13,220 20,233 10,792
Expense recoveries 202,467 162,652 188,023 136,710
Management, leasing, and development services (2) 28,059 13,177
Other 28,686   19,152   24,908   14,267  
Total revenues 612,557 476,916 557,172 377,738
 
EXPENSES:
Maintenance, taxes, utilities, and promotion 156,506 130,971 145,118 94,637
Other operating (3) 78,794 28,384 58,131 19,171
Management, leasing, and development services 4,042 5,914
General and administrative (4) 48,056 45,727
Costs associated with shareowner activism 3,000
Interest expense 86,285 103,185 63,041 84,148
Depreciation and amortization 138,139   97,859   106,355   58,169  
Total expenses 514,822 360,399 424,286 256,125
 
Nonoperating income, net (5) 22,927   656   5,256   (1 )
120,662 117,173 138,142 121,612
Income tax expense (5) (2,212 ) (728 ) (2,248 )  
116,445   121,612  
Equity in income of Unconsolidated Joint Ventures 69,701 67,980
Beneficial interest in UJV impairment charge - Miami Worldcenter (6)   (11,754 )
188,151 192,120
Gain on dispositions, net of tax (7)   437  
Net income 188,151 192,557
Net income attributable to noncontrolling interests:
Noncontrolling share of income of consolidated joint ventures (8,105 ) (11,222 )
Noncontrolling share of income of TRG (47,433 ) (47,208 )
Distributions to participating securities of TRG (2,117 ) (1,969 )
Preferred stock dividends (23,138 ) (23,138 )
Net income attributable to Taubman Centers, Inc. common shareowners 107,358   109,020  
 
SUPPLEMENTAL INFORMATION:
EBITDA - 100% 345,086 318,217 307,538 263,929
Beneficial interest in UJV impairment charge - Miami Worldcenter (6) (11,754 )
EBITDA - outside partners' share (24,329 ) (140,208 ) (21,868 ) (116,024 )
Beneficial interest in EBITDA 320,757 178,009 285,670 136,151
Beneficial interest expense (75,954 ) (54,674 ) (56,076 ) (45,564 )
Beneficial income tax expense - TRG and TCO (2,163 ) (622 ) (2,248 )
Beneficial income tax expense - TCO 446 123
Non-real estate depreciation (2,472 ) (3,051 )
Preferred dividends and distributions (23,138 )   (23,138 )  
Funds from Operations attributable to partnership unitholders and participating securities of TRG 217,476   122,713   201,280   90,587  
 
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG% 2,311 2,316 628 1,994
Country Club Plaza purchase accounting adjustments - minimum rents increase at TRG % 109
The Mall at Green Hills purchase accounting adjustments - minimum rents increase 223 364
El Paseo Village and The Gardens on El Paseo purchase accounting
adjustments - interest expense reduction 440 1,214
Waterside Shops purchase accounting adjustments - interest expense reduction 788 1,051
 
(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.
 
(2) Amount includes the $21.7 million lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at Crystals due to a change in ownership in the center.
 
(3) In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $5.0 million for the year ended December 31, 2015.
 
(4) During the year ended December 31, 2015, a net reversal of $2.0 million of prior period share-based compensation expenses was recognized upon the announcement of an executive management transition.
 
(5) During the year ended December 31, 2016, the Company recognized an $11.1 million gain and $0.5 million of income tax expense upon the conversion of a portion of the Company's investment in partnership units in Simon Property Group Limited Partnership to common shares of SPG.
 
(6) During the year ended December 31, 2015, the Company recognized an impairment charge of $11.8 million related to the pre-development of Miami Worldcenter.
 
(7) During the year ended December 31, 2015, an adjustment to the tax on the gain on the disposition of interests in International Plaza was recognized, reducing the amount of the tax by $0.4 million.
 
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, 2016 and 2015
(in thousands of dollars except as noted; may not add or recalculate due to rounding)
             
2016 2015
Shares Per Share Shares Per Share
Dollars /Units /Unit Dollars /Units /Unit
Net income attributable to TCO common shareowners - basic 29,275 60,427,603 0.48 25,746 60,234,979 0.43
 
Add impact of share-based compensation 86   565,777     93   701,168    
 
Net income attributable to TCO common shareowners - diluted 29,361 60,993,380 0.48 25,839 60,936,147 0.42
 
Add depreciation of TCO's additional basis 1,617 0.03 1,617 0.03
Add TCO's additional income tax expense 465     0.01   19     0.00  
 
Net income attributable to TCO common shareowners,
excluding step-up depreciation and additional income tax expense 31,443 60,993,380 0.52 27,475 60,936,147 0.45
 
Add noncontrolling share of income of TRG 12,998 25,046,278 11,393 25,062,159
Add distributions to participating securities of TRG 544   871,262     492   871,262    
 
Net income attributable to partnership unitholders
and participating securities of TRG 44,985 86,910,920 0.52 39,360 86,869,568 0.45
 
Add (less) depreciation and amortization:
Consolidated businesses at 100% 38,040 0.44 28,780 0.33
Depreciation of TCO's additional basis (1,617 ) (0.02 ) (1,617 ) (0.02 )
Noncontrolling partners in consolidated joint ventures (1,826 ) (0.02 ) (1,085 ) (0.01 )
Share of Unconsolidated Joint Ventures 17,013 0.20 9,133 0.11
Non-real estate depreciation (591 ) (0.01 ) (737 ) (0.01 )
 
Less impact of share-based compensation (86 )   (0.00 ) (93 )   (0.00 )
 
Funds from Operations attributable to partnership unitholders
and participating securities of TRG 95,918 86,910,920 1.10 73,741 86,869,568 0.85
 
TCO's average ownership percentage of TRG - basic (1) 70.7 %   70.6 %
 
Funds from Operations attributable to TCO's common shareowners,
excluding additional income tax expense (1) 67,811 1.10 52,074 0.85
 
Less TCO's additional income tax expense (465 ) (0.00 ) (19 ) (0.00 )
 
Funds from Operations attributable to TCO's common shareowners (1) 67,346   1.10   52,055   0.85  
 
Funds from Operations attributable to partnership unitholders
and participating securities of TRG 95,918 86,910,920 1.10 73,741 86,869,568 0.85
 
Gain on SPG common stock conversion (11,069 ) (0.13 )
Costs associated with shareowner activism 3,000 0.03
Beneficial interest in UJV impairment charge - Miami Worldcenter       11,754     0.14  
 
Adjusted Funds from Operations attributable to partnership unitholders
and participating securities of TRG 87,849 86,910,920 1.01 85,495 86,869,568 0.98
 
TCO's average ownership percentage of TRG - basic (2) 70.7 % 70.6 %
 
Adjusted Funds from Operations attributable to TCO's common shareowners,
excluding additional income tax benefit (expense) (2) 62,107 1.01 60,374 0.98
 
Add (less) TCO's additional income tax benefit (expense) 1   0.00   (19 ) (0.00 )
 
Adjusted Funds from Operations attributable to TCO's common shareowners (2) 62,108   1.01   60,355   0.98  
 
(1 ) For the three months ended December 31, 2016, Funds from Operations attributable to TCO's common shareowners was $66,225 using TCO's diluted average ownership percentage of TRG of 69.5%. For the three months ended December 31, 2015, Funds from Operations attributable to TCO's common shareowners was $51,113 using TCO's diluted average ownership percentage of TRG of 69.3%.
 
(2 ) For the three months ended December 31, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $61,081 using TCO's diluted average ownership percentage of TRG of 69.5%. For the three months ended December 31, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $59,263 using TCO's diluted average ownership percentage of TRG of 69.3%.
 
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, 2016 and 2015
(in thousands of dollars except as noted; may not add or recalculate due to rounding)
             
2016 2015
Shares Per Share Shares Per Share
Dollars /Units /Unit Dollars /Units /Unit
Net income attributable to TCO common shareowners - basic 107,358 60,363,416 1.78 109,020 61,389,113 1.78
 
Add impact of share-based compensation 257   466,139     398   772,221    
 
Net income attributable to TCO common shareowners - diluted 107,615 60,829,555 1.77 109,418 62,161,334 1.76
 
Add depreciation of TCO's additional basis 6,468 0.11 6,468 0.10
Add TCO's additional income tax expense 446     0.01   123     0.00  
 
Net income attributable to TCO common shareowners,
excluding step-up depreciation and additional income tax expense 114,529 60,829,555 1.88 116,009 62,161,334 1.87
 
Add noncontrolling share of income of TRG 47,433 25,055,654 47,208 25,073,109
Add distributions to participating securities of TRG 2,117   871,262     1,969   871,262    
 
Net income attributable to partnership unitholders
and participating securities of TRG 164,079 86,756,471 1.89 165,186 88,105,705 1.87
 
Add (less) depreciation and amortization:
Consolidated businesses at 100% 138,139 1.59 106,355 1.21
Depreciation of TCO's additional basis (6,468 ) (0.07 ) (6,468 ) (0.07 )
Noncontrolling partners in consolidated joint ventures (5,844 ) (0.07 ) (3,681 ) (0.04 )
Share of Unconsolidated Joint Ventures 53,012 0.61 34,361 0.39
Non-real estate depreciation (2,472 ) (0.03 ) (3,051 ) (0.03 )
 
Less gain on dispositions, net of tax (437 ) (0.00 )
Less impact of share-based compensation (257 )   (0.00 ) (398 )   (0.00 )
 
Funds from Operations attributable to partnership unitholders
and participating securities of TRG 340,189 86,756,471 3.92 291,867 88,105,705 3.31
 
TCO's average ownership percentage of TRG - basic (1) 70.7 % 71.0 %
 
Funds from Operations attributable to TCO's common shareowners,
excluding additional income tax expense (1) 240,409 3.92 207,207 3.31
 
Less TCO's additional income tax expense (446 ) (0.01 ) (123 ) (0.00 )
 
Funds from Operations attributable to TCO's common shareowners (1) 239,963   3.91   207,084   3.31  
 
Funds from Operations attributable to partnership unitholders
and participating securities of TRG 340,189 86,756,471 3.92 291,867 88,105,705 3.31
 
Gain on SPG common stock conversion (11,069 ) (0.13 )
Costs associated with shareowner activism 3,000 0.03
Crystals lump sum payment for termination of leasing agreement (21,702 ) (0.25 )
Beneficial interest in UJV impairment charge - Miami Worldcenter 11,754 0.13
Reversal of executive share-based compensation expense       (1,989 )   (0.02 )
 
Adjusted Funds from Operations attributable to partnership unitholders
and participating securities of TRG 310,418 86,756,471 3.58 301,632 88,105,705 3.42
 
TCO's average ownership percentage of TRG - basic (2) 70.7 % 71.0 %
 
Adjusted Funds from Operations attributable to TCO's common shareowners,
excluding additional income tax benefit (expense) (2) 219,370 3.58 214,092 3.42
 
Add (less) TCO's additional income tax benefit (expense) 20   0.00   (123 ) (0.00 )
 
Adjusted Funds from Operations attributable to TCO's common shareowners (2) 219,390   3.58   213,969   3.42  
 
(1 ) For the year ended December 31, 2016, Funds from Operations attributable to TCO's common shareowners was $236,257 using TCO's diluted average ownership percentage of TRG of 69.6%. For the year ended December 31, 2015, Funds from Operations attributable to TCO's common shareowners was $203,223 using TCO's diluted average ownership percentage of TRG of 69.7%.
 
(2 ) For the year ended December 31, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $215,994 using TCO's diluted average ownership percentage of TRG of 69.6%. For the year ended December 31, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $209,985 using TCO's diluted average ownership percentage of TRG of 69.7%.
 
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, 2016 and 2015
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)
           
Three Months Ended Year Ended
2016 2015 2016 2015
Net income 50,894 46,595 188,151 192,557
 
Add (less) depreciation and amortization:
Consolidated businesses at 100% 38,040 28,780 138,139 106,355
Noncontrolling partners in consolidated joint ventures (1,826 ) (1,085 ) (5,844 ) (3,681 )
Share of Unconsolidated Joint Ventures 17,013 9,133 53,012 34,361
 
Add (less) interest expense and income tax expense (benefit):
Interest expense:
Consolidated businesses at 100% 24,440 18,590 86,285 63,041
Noncontrolling partners in consolidated joint ventures (2,945 ) (1,871 ) (10,331 ) (6,965 )
Share of Unconsolidated Joint Ventures 15,665 11,365 54,674 45,564
Income tax expense (benefit):
Income tax benefit on disposition of International Plaza (437 )
Income tax expense on SPG common stock conversion 466 466
Consolidated businesses at 100% 1,462 138 1,746 2,248
Noncontrolling partners in consolidated joint ventures (30 ) (49 )
Share of Unconsolidated Joint Ventures 307 622
 
Less noncontrolling share of income of consolidated joint ventures (2,292 ) (3,179 ) (8,105 ) (11,222 )
 
Beneficial interest in EBITDA 141,194 108,466 498,766 421,821
 
TCO's average ownership percentage of TRG - basic 70.7 % 70.6 % 70.7 % 71.0 %
 
Beneficial interest in EBITDA attributable to TCO 99,814   76,596   352,465   299,454  
 
Beneficial interest in EBITDA 141,194 108,466 498,766 421,821
 
Add (less):
Gain on SPG common stock conversion (11,069 ) (11,069 )
Costs associated with shareowner activism 3,000 3,000
Crystals lump sum payment for termination of leasing agreement (21,702 )
Beneficial interest in UJV impairment charge - Miami Worldcenter 11,754 11,754
Reversal of executive share-based compensation expense       (1,989 )
 
Adjusted Beneficial interest in EBITDA 133,125 120,220 468,995 431,586
 
TCO's average ownership percentage of TRG - basic 70.7 % 70.6 % 70.7 % 71.0 %
 
Adjusted Beneficial interest in EBITDA attributable to TCO 94,116   84,897   331,434   306,365  
 
TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended December 31, 2016, 2015, and 2014
(in thousands of dollars)  
    Three Months Ended Three Months Ended Year Ended Year Ended
2016 2015 2015 2014 2016 2015 2015 2014
Net income 50,894 46,595 46,595 656,274 188,151 192,557 192,557 1,278,122
 
Add (less) depreciation and amortization:
Consolidated businesses at 100% 38,040 28,780 28,780 23,686 138,139 106,355 106,355 120,207
Noncontrolling partners in consolidated joint ventures (1,826 ) (1,085 ) (1,085 ) (861 ) (5,844 ) (3,681 ) (3,681 ) (4,429 )
Share of Unconsolidated Joint Ventures 17,013 9,133 9,133 8,925 53,012 34,361 34,361 30,234
 
Add (less) interest expense and income tax expense (benefit):
Interest expense:
Consolidated businesses at 100% 24,440 18,590 18,590 15,857 86,285 63,041 63,041 90,803
Noncontrolling partners in consolidated joint ventures (2,945 ) (1,871 ) (1,871 ) (1,842 ) (10,331 ) (6,965 ) (6,965 ) (8,101 )
Share of Unconsolidated Joint Ventures 15,665 11,365 11,365 10,611 54,674 45,564 45,564 40,416
Share of income tax expense (benefit):
Income tax expense (benefit) on dispositions of International Plaza, Arizona Mills, and Oyster Bay (437 ) (437 ) 9,733
Income tax expense on SPG common stock conversion 466 466
Consolidated businesses at 100% 1,462 138 138 574 1,746 2,248 2,248 2,267
Noncontrolling partners in consolidated joint ventures (30 ) (49 )
Share of Unconsolidated Joint Ventures 307 622
 
Less noncontrolling share of income of consolidated joint ventures (2,292 ) (3,179 ) (3,179 ) (26,226 ) (8,105 ) (11,222 ) (11,222 ) (34,239 )
 
Add EBITDA attributable to outside partners:
EBITDA attributable to noncontrolling partners in consolidated joint ventures 7,093 6,135 6,135 28,929 24,329 21,868 21,868 46,769
EBITDA attributable to outside partners in Unconsolidated Joint Ventures 47,138 32,969 32,969 29,889 140,208 116,024 116,024 102,234
 
Add beneficial interest in UJV impairment charge - Miami Worldcenter   11,754   11,754       11,754   11,754    
 
EBITDA at 100% 195,425 159,324 159,324 745,816 663,303 571,467 571,467 1,674,016
 
Add (less) items excluded from shopping center NOI:
General and administrative expenses 13,405 13,132 13,132 13,799 48,056 45,727 45,727 48,292
Costs associated with shareowner activism 3,000 3,000
Management, leasing, and development services, net (728 ) (1,697 ) (1,697 ) (2,044 ) (24,017 ) (1) (7,263 ) (7,263 ) (6,129 )
Straight-line of rents (1,908 ) (1,417 ) (1,417 ) (1,937 ) (7,620 ) (5,211 ) (5,211 ) (5,419 )
Gain on SPG common stock conversion (11,069 ) (11,069 )
Gain on dispositions (629,667 ) (1,116,287 )
Early extinguishment of debt charge 36,372 36,372
Disposition costs related to the Starwood sale 2,309 3,269
Discontinuation of hedge accounting - MacArthur Center 2,256 7,763
Restructuring charge 675 3,706
Gain on sales of peripheral land (1,828 )
Dividend income (974 ) (944 ) (944 ) (767 ) (3,836 ) (3,570 ) (3,570 ) (2,364 )
Interest income (2,309 ) (403 ) (403 ) (636 ) (6,488 ) (1,999 ) (1,999 ) (1,400 )
Other nonoperating (income) expense (4 ) (192 ) (192 ) (57 ) (362 ) 314 314 (811 )
Unallocated operating expenses and other 12,574   12,319   (2) 8,187   5,346   44,576   36,651   (2) 22,430   19,933  
 
NOI - all centers at 100% 207,412 180,122 175,990 171,465 703,715 636,116 621,895 660,941
 
Less - NOI of non-comparable centers (37,984 ) (3) (11,238 ) (4) (8,046 ) (5) (5,566 ) (6) (90,229 ) (3) (42,862 ) (4) (25,129 ) (5) (77,748 ) (7)
 
NOI at 100% - comparable centers 169,428   168,884   167,944   165,899   613,486   593,254   596,766   583,193  
 
NOI - growth % 0.3 % 1.2 % 3.4 % 2.3 %
 
NOI at 100% - comparable centers 169,428 168,884 167,944 165,899 613,486 593,254 596,766 583,193
 
Lease cancellation income (3,325 ) (2,667 ) (2,098 ) (5,514 ) (6,200 ) (8,865 ) (8,454 ) (12,569 )
 
NOI at 100% - comparable centers excluding lease cancellation income 166,103   166,217   165,846   160,385   607,286   584,389   588,312   570,624  
 
NOI at 100% excluding lease cancellation income - growth % -0.1 % 3.4 % 3.9 % 3.1 %
 
(1) Amount includes the lump sum payment of $21.7 million received in May 2016 for the termination of the Company's third party leasing agreement for Crystals due to a change in ownership of the center.
 
(2)

In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in other operating expenses of the centers, are now recognized in unallocated operating expenses. For the three months and the year ended December 31, 2015, the comparative amount of other operating expenses allocated to the centers were $4.1 million and $14.3 million, respectively at 100%.

 
(3) Includes Beverly Center, CityOn.Xi'an, Country Club Plaza, International Market Place, The Mall of San Juan, Starfield Hanam, and certain post-closing adjustments relating to the portfolio of centers sold to Starwood.
 
(4) Includes Beverly Center and The Mall of San Juan.
 
(5) Includes The Mall of San Juan and The Mall at University Town Center.
 
(6) Includes The Mall at University Town Center and the portfolio of centers sold to Starwood. Includes an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio.
 
(7) Includes The Mall at University Town Center, the portfolio of centers sold to Starwood, and Arizona Mills for the approximately one-month period prior to its disposition. Includes an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio.
 
TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of December 31, 2016 and December 31, 2015
(in thousands of dollars)  
        As of
December 31, 2016 December 31, 2015
Consolidated Balance Sheet of Taubman Centers, Inc.:
 
Assets:
Properties 4,173,954 3,713,215
Accumulated depreciation and amortization (1,147,390 ) (1,052,027 )
3,026,564 2,661,188
Investment in Unconsolidated Joint Ventures 604,808 433,911
Cash and cash equivalents 40,603 206,635
Restricted cash 932 6,447
Accounts and notes receivable, net 60,174 54,547
Accounts receivable from related parties 2,103 2,478
Deferred charges and other assets (1) 275,728   181,304  
4,010,912   3,546,510  
Liabilities:
Notes payable, net (1) 3,255,512 2,627,088
Accounts payable and accrued liabilities 336,536 334,525
Distributions in excess of investments in and net income of
Unconsolidated Joint Ventures 480,863   464,086  
4,072,911 3,425,699
 
Redeemable noncontrolling interest 8,704
 
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 604 602
Additional paid-in capital 657,281 652,146
Accumulated other comprehensive income (loss) (35,916 ) (27,220 )
Dividends in excess of net income (549,914 ) (512,746 )
72,080 112,807
Noncontrolling interests:
Noncontrolling interests in consolidated joint ventures (155,919 ) (23,569 )
Noncontrolling interests in partnership equity of TRG 13,136   31,573  
(142,783 ) 8,004  
(70,703 ) 120,811  
4,010,912   3,546,510  
 
(1) The December 31, 2015 balance has been restated in connection with the Company's adoption of Accounting Standards Update (ASU) No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs" which changed the presentation of debt issuance costs on the Consolidated Balance Sheet. In connection with the adoption of ASU No. 2015-03 on January 1, 2016, the Company retrospectively reclassified the December 31, 2015 Consolidated Balance Sheet to move $16.9 million of debt issuance costs out of Deferred Charges and Other Assets and into Notes Payable, Net as a direct deduction of the related debt liabilities.
 
Combined Balance Sheet of Unconsolidated Joint Ventures (1):
Assets:
Properties (2) 3,371,216 1,628,492
Accumulated depreciation and amortization (661,611 ) (589,145 )
2,709,605 1,039,347
Cash and cash equivalents 83,882 36,047
Accounts and notes receivable, net 87,612 42,361
Deferred charges and other assets (2) 67,167   32,660  
2,948,266   1,150,415  
Liabilities:
Notes payable, net (3)(4) 2,706,628 1,994,298
Accounts payable and other liabilities 359,814   70,539  
3,066,442 2,064,837
Accumulated Deficiency in Assets:
Accumulated deficiency in assets - TRG (145,679 ) (507,282 )
Accumulated deficiency in assets - Joint Venture Partners 81,217 (397,196 )
Accumulated other comprehensive loss - TRG (20,547 ) (4,974 )
Accumulated other comprehensive loss - Joint Venture Partners (33,167 ) (4,970 )
(118,176 ) (914,422 )
2,948,266   1,150,415  
 
(1) Unconsolidated Joint Venture amounts exclude the balances of CityOn.Zhengzhou as of December 31, 2016 and December 31, 2015. In addition, the amounts exclude the balances of CityOn.Xi'an and Starfield Hanam as of December 31, 2015.
 
(2) The December 31, 2016 amount includes $63.5 million related to an office tower, which is expected to be sold in the first quarter of 2017.
 
(3) The December 31, 2015 balance has been adjusted in connection with the Company's adoption of ASU No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs."
 
(4) The balances presented exclude the construction financing outstanding for CityOn.Zhengzhou of $70.5 million ($34.5 million at TRG's share) and $44.7 million ($14.2 million at TRG's share) as of December 31, 2016 and 2015, respectively. The balances presented also exclude the construction financing outstanding for Starfield Hanam of $52.9 million ($18.1 million at TRG's share) as of December 31, 2015, and the related debt issuance costs.
 
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 the Year Ended
December 31, 2017
 
Funds from Operations per common share 3.67 3.82
 
Real estate depreciation - TRG (2.34 ) (2.23 )
 
Distributions to participating securities of TRG (0.03 ) (0.03 )
 
Depreciation of TCO's additional basis in TRG (0.11 ) (0.11 )
 
Net income attributable to common shareowners, per common share (EPS) 1.20   1.45  
 

Source: Taubman Centers, Inc.

Taubman

Ryan Hurren, Director, Investor Relations

248-258-7232

rhurren@taubman.com

or

Taubman

Maria Mainville, Director, Strategic Communications

248-258-7469

mmainville@taubman.com

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TCO 38.02
Change-0.41(-1.07%) Volume: 447,766 July 2, 2020