Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2020.
September 30, 2020
|
September 30, 2019
| September 30, 2020
|
September 30, 2019
| |
Net income (loss) attributable to common shareowners, diluted (in thousands) | ($30,072)(1) | $216,873 | ($44,269)(1) | $239,223 |
Net income (loss) attributable to common shareowners (EPS) per diluted common share | ($0.49)(1) | $3.48 | ($0.72)(1) | $3.84 |
Funds from Operations (FFO) per diluted common share | $0.39 | $0.88 | $1.47 | $2.59 |
Growth rate | (55.7)% | (43.2)% | ||
Adjusted FFO (AFFO) per diluted common share | $0.60(2) | $0.86 (3) | $1.90(2) | $2.74(3) |
Growth rate | (30.2)% | (30.7)% | ||
(1) Net income (loss) and EPS for the three and nine-month periods ended September 30, 2020 were lower primarily due to the sale of 50 percent of our interest in Starfield Hanam (Hanam, South Korea) and a litigation settlement related to The Mall of San Juan that resulted in the recognition of gains totaling approximately $3.30 per diluted common share in the third quarter of 2019, as well as the disruption associated with the COVID-19 pandemic in 2020. EPS for the three-month period ended September 30, 2020 included an impairment charge related to Stamford Town Center of $0.23 per diluted common share, partially offset by a gain on the transfer of building and improvements of an anchor space of $0.06 per diluted common share. EPS for the nine-month period ended September 30, 2020 also included gains totaling approximately $0.28 per diluted common share related to the sale of 50 percent of our interest in CityOn.Xi’an (Xi’an, China), as well as accelerated amortization of an allowance related to the closing of an anchor space at a U.S. property.
(2) AFFO for the three and nine-month periods ended September 30, 2020 excluded costs related to the Simon Property Group, Inc. transaction, restructuring charges, fluctuations in the fair value of equity securities and adjustments to the previously recognized promote fee (net of tax) related to Starfield Hanam recorded last year. AFFO for the nine-month period ended September 30, 2020 also excluded deferred income tax expense incurred related to the sale of CityOn.Xi’an and costs associated with the Taubman Asia President transition.
(3) AFFO for the three and nine-month periods ended September 30, 2019 excluded restructuring charges, a promote fee (net of tax) related to Starfield Hanam and costs associated with shareholder activism. AFFO for the nine-month period ended September 30, 2019 also excluded pre-closing costs related to the sale of our interest in three Taubman Asia properties to Blackstone and the fluctuation in the fair value of equity securities. | ||||
For the quarter ended September 30, 2020, AFFO per diluted share was $0.60. Disruption related to the COVID-19 pandemic, including mall closures, tenant bankruptcies and nonpayments, significantly impacted third quarter results. Accordingly, the company recognized uncollectible tenant revenues of $28 million at our beneficial interest, or $0.32 per diluted share of AFFO during the quarter. In addition, the company received lease termination income of $19.3 million, at our beneficial interest, or $0.22 per diluted share of AFFO, in the third quarter.
“Operations across our portfolio are steadily improving, despite the continuing impact of the pandemic,” said the company’s Chairman, President and CEO Robert S. Taubman. “All of our properties are open and operating and nearly 94 percent of our U.S. tenants have reopened. Since May, traffic, sales and collections have consistently improved.”
Operating Statistics
Comparable center NOI (comp center NOI) at our beneficial interest, including lease cancellation income, was down 18.3 percent in the third quarter and 14.4 percent year-to-date, using constant currency exchange rates. Excluding lease cancellation income, comp center NOI was down 29 percent in the quarter and down 18.5 percent year-to-date, using constant currency exchange rates. Higher year-over-year uncollectible tenant revenues impacted comp center NOI excluding lease cancellation income by 16.5 percent in the quarter and 12.6 percent year-to-date.
In the U.S., total mall tenant sales have improved every month since May. In addition, tenant sales per square foot in comparable centers improved throughout the third quarter. Excluding Apple and Tesla (two tenants that create volatility in quarterly reporting) sales per square foot were down 16.4 percent in the third quarter, sequentially improving each month, with September down 5.7 percent. In Asia, sales per square foot were up modestly in the third quarter and year-to-date.
Average rent per square foot for the quarter in U.S. comparable centers was $59.28, down 6.4 percent. Year-to-date average rent per square foot in U.S. comparable centers was $60.52, down 4.7 percent. Lower sales-based rents and rent relief (including abatements) related to the COVID-19 pandemic together impacted average rent per square foot by 5.6 percent in the third quarter and 2.4 percent year-to-date.
Ending occupancy in U.S. comparable centers was 89.9 percent on September 30, 2020, down 2.7 percent from September 30, 2019 largely due to tenant bankruptcies related to the COVID-19 pandemic.
Leased space in U.S. comparable centers was 92.6 percent on September 30, 2020, down 3 percent from September 30, 2019.
Financing and Portfolio Activity
The joint venture that owns Starfield Hanam (17.15 percent owned by the company) has fully refinanced its two construction loans that together had a balance of approximately $319 million U.S. dollars (using September 30 exchange rates) and a weighted average effective rate of 2.67 percent.
In September, the joint venture first repaid the $52 million U.S. dollar construction loan using the property’s available cash.
In October, the joint venture completed two new loans that replace the original construction facilities. The primary new loan is a five-year, non-recourse Korean Won denominated facility with a capacity of approximately $535 million U.S. dollars at current exchange rates. The facility is fully drawn and bears interest at fixed rate of 2.38 percent. This loan is interest-only, until the final year when principal payments are required. The additional facility is a one-year, interest-only, Korean Won denominated loan with a capacity of approximately $9 million U.S. dollars at current exchange rates. This facility is expected to be fully drawn in the fourth quarter and the interest rate will be fixed at that time. These financings have resulted in excess proceeds of approximately $34 million, at our beneficial interest. Together with additional reserves at the property this refinancing is expected to result in the repatriation of $58 million later this year.
In October, the company also completed the sale of Stamford Town Center (Stamford, Conn.), a 50 percent owned joint venture. As a result of the sale, an impairment charge of $19.8 million at our beneficial interest was recognized during the third quarter.
Starfield Anseong Grand Opening
On October 7, the company opened Starfield Anseong (Gyeonggi Province, South Korea) to tremendous enthusiasm from the local community. The one million square foot, modern shopping, entertainment and dining destination, featuring 280 tenants, opened over 90 percent occupied and nearly 100 percent leased. We expect to have 99 percent occupancy by year-end.
Starfield Anseong’s collection of prominent international brands includes Zara, Nike, Uniqlo, H&M, Vans, COS, Guess, Adidas, BMW, Patagonia, Camper, Polo Ralph Lauren, Lacoste, West Elm and Under Armour. The mall is anchored by Shinsegae Factory Store, E-Mart, Toy Kingdom and successful entertainment concepts, including Aquafield, Sports Monster and Megabox, an upscale cinema. Starfield Anseong will serve as the primary shopping destination for Anseong, Asan, Jincheon and Pyeongtaek, four high-growth cities in Greater Seoul.
Early sales and traffic results have been very strong. Starfield Anseong welcomed over one million customers and generated tenant sales of nearly $32 million U.S. dollars within the first ten days following its grand opening. Starfield Anseong is Taubman Asia’s fourth successful development project and its second joint venture with Shinsegae Property.
See Taubman Asia and Shinsegae Group Celebrate the Opening of Starfield Anseong in South Korea Today – Oct. 7, 2020.
COVID-19 Update
Most of Taubman’s U.S. operating properties closed on March 19th, in response to the COVID-19 pandemic, and have reopened gradually with enhanced safety protocols. All U.S. properties and nearly 85 percent of stores had reopened by June 30, 2020. Three of our properties were closed intermittently in the third quarter as a result of state regulations but are once again open. Nearly 94 percent of our tenants have now reopened with traffic, sales, and tenant collections improving each month since May.
In Asia, CityOn.Xi’an, CityOn.Zhengzhou (Zhengzhou, Henan, China) and Starfield Hanam experienced varying levels of disruption from the pandemic but have largely recovered. In the third quarter NOI at our beneficial interest was essentially flat compared to last year and tenant sales per square foot were up modestly. Over 98 percent of tenants are open throughout the three properties.
The company has taken several actions to enhance liquidity due to the disruption caused by the COVID-19 pandemic. U.S. planned capital expenditures for the year have been lowered by approximately $135 million, at our beneficial interest, which represents a reduction of nearly 65 percent from the original budget. In Asia, the only material capital spending this year has been related to the completion of Starfield Anseong, which has been funded by the construction loan.
Operating expenses for the year are expected to be reduced by about $17 million at our beneficial interest. In addition, the company did not pay a dividend on its common stock in the second or third quarter, preserving approximately $120 million of cash.
These initiatives, coupled with improving operations, have significantly enhanced the company’s liquidity position. Total liquidity, which includes cash on hand and borrowing capacity under our lines of credit, was $455 million at the end of the third quarter, up about $90 million from June 30, 2020.
Investor Conference Call
Due to the pending transaction with Simon Property Group, which is currently the subject of litigation, the company will not host a conference call to review the third quarter 2020 financial results.
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 malls in the U.S. and Asia. Taubman’s U.S.-owned properties are the most productive in the publicly held U.S. 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,” “we,” “us,” “our,” “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 contains certain “forward-looking” statements as that term is defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are predictive in nature, that depend on or relate to future events or conditions, or that include words such as “believes”, “anticipates”, “expects”, “may”, “will”, “would,” “should”, “estimates”, “could”, “intends”, “plans” or other similar expressions are forward-looking statements.
Forward-looking statements involve significant known and unknown risks and uncertainties that may cause actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements as a result of, but not limited to, the following factors: the COVID-19 pandemic and related challenges, risks and uncertainties which have had, and may continue to have, direct and indirect adverse impacts on the general economy, mall environment, tenants, customers, and employees, as well as mall and tenant operations (including the ability to remain open) and operating procedures, occupancy, anchor and mall tenant sales, sales-based rent, rent collection, leasing and negotiated rents, mall development and redevelopment activities and the fair value of assets (increasing the likelihood of future impairment charges); future economic performance, including stabilization and recovery from the impact of the COVID-19 pandemic; savings due to cost-cutting measures; payments of dividends and the sufficiency of cash to meet operational needs; changes in market rental rates; unscheduled closings or bankruptcies of tenants; relationships with anchor tenants; trends in the mall industry; challenges with department stores; changes in consumer shopping behavior, including accelerated trends resulting from the COVID-19 pandemic; the liquidity of real estate investments; Taubman’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; the ability to hedge interest rate and currency risk; risks related to acquiring, developing, expanding, leasing and managing properties; competitors gaining economies of scale through M&A and consolidation activity; changes in value of investments in foreign entities; risks related to joint venture properties; insurance costs and coverage; security breaches that could impact Taubman’s information technology, infrastructure or personal data; costs associated with response to technology breaches; the loss of key management personnel; shareholder activism costs and related diversion of management time; terrorist activities; maintaining Taubman’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; changes in global, national, regional and/or local economic and geopolitical climates; the outcome of any litigation between Taubman and Simon Property Group, Inc. (“Simon”) related to the proposed transactions between Taubman and Simon, including the litigation in the State of Michigan Circuit Court for the Sixth Judicial Circuit (Oakland County); the outcome of any shareholder litigation related to the proposed transactions, and insurance coverage for liabilities of Taubman or its directors, if any, thereunder; the inability to complete the proposed transactions due to the failure to satisfy any conditions to completion of the proposed transactions; the risk that a condition to closing of the transaction may not be satisfied; Simon’s and Taubman’s ability to consummate the transaction; the possibility that the anticipated benefits from the transaction will not be fully realized; the ability of Taubman to retain key personnel and maintain relationships with business partners pending the consummation of the transaction; and the impact of legislative, regulatory and competitive changes and other risk factors relating to the industry in which Taubman operates, as detailed from time to time in Taubman’s reports filed with the SEC. There can be no assurance that the transaction will in fact be consummated.
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1.A in Taubman’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as amended, and subsequent reports filed with the Securities and Exchange Commission. Taubman cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions with respect to the proposed transaction, shareholders and others should carefully consider the foregoing factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters attributable to Taubman or any other person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. The forward-looking statements contained herein speak only as of the date of this communication or the date otherwise specified herein. Taubman does not undertake any obligation to update or revise any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as may be required by law.
| TAUBMAN CENTERS, INC. | |||||||||||
Table 1 - Summary of Results | |||||||||||
For the Periods Ended September 30, 2020 and 2019 | |||||||||||
(in thousands of dollars, except as indicated) | Three Months Ended | Year to Date | |||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net income (loss) | (36,648 | ) | 316,390 | (41,959 | ) | 363,005 | |||||
Noncontrolling share of income (loss) of consolidated joint ventures | 308 | (958 | ) | (1,015 | ) | (3,219 | ) | ||||
Noncontrolling share of (income) loss of TRG | 12,052 | (93,690 | ) | 16,653 | (103,899 | ) | |||||
Distributions to participating securities of TRG | (597 | ) | (595 | ) | (1,817 | ) | |||||
Preferred stock dividends | (5,784 | ) | (5,784 | ) | (17,353 | ) | (17,353 | ) | |||
Net income (loss) attributable to Taubman Centers, Inc. common shareholders | (30,072 | ) | 215,361 | (44,269 | ) | 236,717 | |||||
Net income (loss) per common share - basic | (0.49 | ) | 3.52 | (0.72 | ) | 3.87 | |||||
Net income (loss) per common share - diluted | (0.49 | ) | 3.48 | (0.72 | ) | 3.84 | |||||
Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 34,458 | 78,387 | 130,379 | 228,470 | |||||||
Funds from Operations attributable to TCO's common shareholders (1) | 24,226 | 54,747 | 91,316 | 160,544 | |||||||
Funds from Operations per common share - basic (1) | 0.39 | 0.89 | 1.48 | 2.62 | |||||||
Funds from Operations per common share - diluted (1) | 0.39 | 0.88 | 1.47 | 2.59 | |||||||
Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG (1) | 53,640 | 75,977 | 168,542 | 241,489 | |||||||
Adjusted Funds from Operations attributable to TCO's common shareholders (1) | 37,719 | 53,064 | 118,108 | 169,648 | |||||||
Adjusted Funds from Operations per common share - basic (1) | 0.61 | 0.87 | 1.92 | 2.77 | |||||||
Adjusted Funds from Operations per common share - diluted (1) | 0.60 | 0.86 | 1.90 | 2.74 | |||||||
Weighted average number of common shares outstanding - basic | 61,696,565 | 61,211,249 | 61,512,816 | 61,169,279 | |||||||
Weighted average number of common shares outstanding - diluted | 61,696,565 | 62,245,414 | 61,512,816 | 62,232,496 | |||||||
Common shares outstanding at end of period | 61,723,103 | 61,213,170 | |||||||||
Weighted average units - Operating Partnership - basic | 87,713,880 | 87,641,965 | 87,696,394 | 87,097,595 | |||||||
Weighted average units - Operating Partnership - diluted | 88,874,258 | 88,676,130 | 88,807,212 | 88,160,812 | |||||||
Units outstanding at end of period - Operating Partnership | 87,719,766 | 87,643,886 | |||||||||
Ownership percentage of the Operating Partnership at end of period | 70.4 | % | 69.8 | % | |||||||
Number of owned shopping centers at end of period | 24 | 24 | |||||||||
Operating Statistics: | |||||||||||
NOI at 100% - comparable centers - growth % (1)(2) | (16.9 | )% | (2.5 | )% | (14.4 | )% | (1.3 | )% | |||
NOI at 100% - comparable centers including lease cancellation income at constant
| (16.9 | )% | (14.0 | )% | |||||||
NOI at 100% - comparable centers excluding lease cancellation income - growth % (1)(2) | (27.2 | )% | (1.5 | )% | (18.3 | )% | 0.3 | % | |||
NOI at 100% - comparable centers excluding lease cancellation income at constant
| (27.2 | )% | (0.9 | )% | (17.9 | )% | 1.1 | % | |||
Beneficial interest in NOI - comparable centers including lease cancellation income - growth % (1) | (18.3 | )% | (14.5 | )% | |||||||
Beneficial interest in NOI - comparable centers including lease cancellation income
| (18.3 | )% | (14.4 | )% | |||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income - growth % (1) | (29.0 | )% | (18.7 | )% | |||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income
| (29.0 | )% | (18.5 | )% | |||||||
Beneficial interest in NOI - total portfolio excluding lease cancellation income - growth % (1)(2) | (33.9 | )% | 0.7 | % | (22.8 | )% | 3.6 | % | |||
Average rent per square foot - U.S. Consolidated Businesses (3) | 65.24 | 70.52 | 68.45 | 70.97 | |||||||
Average rent per square foot - U.S. UJVs (3) | 53.23 | 56.03 | 52.44 | 55.91 | |||||||
Average rent per square foot - Combined U.S. centers (3) | 59.28 | 63.36 | 60.52 | 63.48 | |||||||
Average rent per square foot growth % - U.S. comparable centers (3) | (6.4 | )% | (4.7 | )% | |||||||
Ending occupancy - all U.S. centers | 88.5 | % | 91.7 | % | |||||||
Ending occupancy - U.S. comparable centers (3) | 89.9 | % | 92.6 | % | |||||||
Leased space - all U.S. centers | 91.1 | % | 94.7 | % | |||||||
Leased space - U.S. comparable centers (3) | 92.6 | % | 95.6 | % | |||||||
Mall tenant sales - all U.S. centers (4) | 938,843 | 1,570,828 | 2,690,070 | 4,776,719 | |||||||
Mall tenant sales - U.S. comparable centers (3)(4) | 836,342 | 1,376,324 | 2,366,916 | 4,263,932 | |||||||
12-Months Trailing | |||||||||||
Operating Statistics: | 2020 | 2019 | |||||||||
Mall tenant sales - all U.S. centers (4) | 4,828,525 | 6,741,322 | |||||||||
Mall tenant sales - U.S. comparable centers (3)(4) | 4,233,859 | 6,063,124 | |||||||||
Sales per square foot - U.S. comparable centers (3)(4) | 790 | 980 | |||||||||
All U.S. centers (4): | |||||||||||
Mall tenant occupancy costs as a percentage of tenant sales - U.S. Consolidated Businesses | 19.0 | % | 13.2 | % | |||||||
Mall tenant occupancy costs as a percentage of tenant sales - U.S. UJVs | 15.6 | % | 11.7 | % | |||||||
Mall tenant occupancy costs as a percentage of tenant sales - Combined U.S. centers | 17.3 | % | 12.5 | % | |||||||
U.S. comparable centers (3)(4): | |||||||||||
Mall tenant occupancy costs as a percentage of tenant sales - U.S. Consolidated Businesses | 18.4 | % | 12.8 | % | |||||||
Mall tenant occupancy costs as a percentage of tenant sales - U.S. UJVs | 15.4 | % | 11.5 | % | |||||||
Mall tenant occupancy costs as a percentage of tenant sales - Combined U.S. centers | 17.0 | % | 12.2 | % | |||||||
(1) See 'Use of Non-GAAP Financial Measures' for the definition and use of EBITDA, NOI, and FFO. | |||||||||||
(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 September 30, 2019 statistics have been restated to include comparable centers to 2020. | |||||||||||
(4) Based on reports of sales furnished by mall tenants. Sales per square foot exclude spaces greater than or equal to 10,000 square feet. | |||||||||||
TAUBMAN CENTERS, INC. | ||||||||||||
Table 2 - Income Statement | ||||||||||||
For the Three Months Ended September 30, 2020 and 2019 | ||||||||||||
(in thousands of dollars) | ||||||||||||
2020 | 2019 | |||||||||||
CONSOLIDATED | UNCONSOLIDATED | CONSOLIDATED | UNCONSOLIDATED | |||||||||
BUSINESSES | JOINT VENTURES (1) | BUSINESSES | JOINT VENTURES (1) | |||||||||
REVENUES: | ||||||||||||
Rental revenues | 122,817 | 125,744 | 141,213 | 138,960 | ||||||||
Overage rents | 540 | 3,219 | 3,865 | 6,736 | ||||||||
Management, leasing, and development services | 440 | 1,927 | ||||||||||
Other | 7,201 | 4,334 | 15,501 | 7,413 | ||||||||
Total revenues | 130,998 | 133,297 | 162,506 | 153,109 | ||||||||
EXPENSES: | ||||||||||||
Maintenance, taxes, utilities, and promotion | 37,053 | 44,558 | 40,786 | 45,274 | ||||||||
Other operating | 13,289 | 5,147 | 19,753 | 6,412 | ||||||||
Management, leasing, and development services | 435 | 1,895 | ||||||||||
General and administrative | 7,048 | 9,632 | ||||||||||
Restructuring charges | 2,395 | 876 | ||||||||||
Simon Property Group, Inc. transaction costs | 17,060 | |||||||||||
Impairment charge | 39,668 | |||||||||||
Costs associated with shareholder activism | 675 | |||||||||||
Interest expense | 33,052 | 34,927 | 37,695 | 35,398 | ||||||||
Depreciation and amortization | 49,235 | 34,983 | 47,849 | 33,865 | ||||||||
Total expenses | 159,567 | 159,283 | 159,161 | 120,949 | ||||||||
Nonoperating income, net | 1,694 | 11,804 | 11,108 | 5,657 | ||||||||
(26,875 | ) | (14,182 | ) | 14,453 | 37,817 | |||||||
Income tax expense | (37 | ) | (3,425 | ) | (2,021 | ) | (2,266 | ) | ||||
Equity in income (loss) of UJVs | (9,736 | ) | 20,252 | |||||||||
Gains on partial dispositions of ownership interests in UJVs, net of tax | 138,696 | |||||||||||
Gains on remeasurements of ownership interests in UJVs | 145,010 | |||||||||||
Net income (loss) | (36,648 | ) | (17,607 | ) | 316,390 | 35,551 | ||||||
Net income/loss attributable to noncontrolling interests: | ||||||||||||
Noncontrolling share of income (loss) of consolidated joint ventures | 308 | (958 | ) | |||||||||
Noncontrolling share of (income) loss of TRG | 12,052 | (93,690 | ) | |||||||||
Distributions to participating securities of TRG | (597 | ) | ||||||||||
Preferred stock dividends | (5,784 | ) | (5,784 | ) | ||||||||
Net income (loss) attributable to Taubman Centers, Inc. common shareholders | (30,072 | ) | 215,361 | |||||||||
SUPPLEMENTAL INFORMATION: | ||||||||||||
EBITDA - 100% | 55,412 | 55,728 | 383,703 | 107,080 | ||||||||
EBITDA - outside partners' share | (4,404 | ) | (32,180 | ) | (5,623 | ) | (50,377 | ) | ||||
Beneficial interest in EBITDA | 51,008 | 23,548 | 378,080 | 56,703 | ||||||||
Gain on transfer of building and improvements | (5,600 | ) | (10,095 | ) | ||||||||
Beneficial share of impairment charge | 19,834 | |||||||||||
Gains on partial dispositions of ownership interests in UJVs | (138,696 | ) | ||||||||||
Gains on remeasurements of ownership interests in UJVs | (145,010 | ) | ||||||||||
Beneficial interest expense | (30,319 | ) | (16,127 | ) | (34,851 | ) | (17,798 | ) | ||||
Beneficial income tax expense - TRG and TCO | (37 | ) | (933 | ) | (2,021 | ) | (991 | ) | ||||
Beneficial income tax expense - TCO | 11 | |||||||||||
Non-real estate depreciation | (1,143 | ) | (1,150 | ) | ||||||||
Preferred dividends and distributions | (5,784 | ) | (5,784 | ) | ||||||||
Funds from Operations attributable to partnership unitholders and participating securities of TRG | 13,736 | 20,722 | 40,473 | 37,914 | ||||||||
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | ||||||||||||
Net straight-line adjustments to rental revenues, recoveries, and ground rent expense at TRG% | 441 | (1,543 | ) | 1,712 | (422 | ) | ||||||
The Mall at Green Hills purchase accounting adjustments - rental revenues | 24 | 13 | ||||||||||
Country Club Plaza purchase accounting adjustments - rental revenues at TRG% | 235 | 61 | ||||||||||
The Gardens Mall purchase accounting adjustments - rental revenues at TRG% | (377 | ) | (639 | ) | ||||||||
The Gardens Mall purchase accounting adjustments - interest expense at TRG% | (528 | ) | (528 | ) | ||||||||
(1) With the exception of the Supplemental Information, amounts include 100% of the UJVs. Amounts are net of intercompany transactions. The UJVs are presented at 100% in order to allow for measurement of their performance as a whole, without regard to our ownership interest. | ||||||||||||
TAUBMAN CENTERS, INC. | ||||||||||||
Table 3 - Income Statement | ||||||||||||
For the Nine Months Ended September 30, 2020 and 2019 | ||||||||||||
(in thousands of dollars) | ||||||||||||
2020 | 2019 | |||||||||||
CONSOLIDATED | UNCONSOLIDATED | CONSOLIDATED | UNCONSOLIDATED | |||||||||
BUSINESSES | JOINT VENTURES (1) | BUSINESSES | JOINT VENTURES (1) | |||||||||
REVENUES: | ||||||||||||
Rental revenues | 377,693 | 371,282 | 432,508 | 410,613 | ||||||||
Overage rents | 5,506 | 11,965 | 8,719 | 18,279 | ||||||||
Management, leasing, and development services | 1,830 | 4,035 | ||||||||||
Other | 23,963 | 17,697 | 39,056 | 20,779 | ||||||||
Total revenues | 408,992 | 400,944 | 484,318 | 449,671 | ||||||||
EXPENSES: | ||||||||||||
Maintenance, taxes, utilities, and promotion | 110,315 | 133,524 | 118,506 | 132,413 | ||||||||
Other operating | 44,223 | 18,448 | 60,210 | 18,786 | ||||||||
Management, leasing, and development services | 1,587 | 2,917 | ||||||||||
General and administrative | 22,587 | 26,762 | ||||||||||
Restructuring charges | 2,757 | 1,585 | ||||||||||
Simon Property Group, Inc. transaction costs | 32,505 | |||||||||||
Impairment charge | 39,668 | |||||||||||
Costs associated with shareholder activism | 16,675 | |||||||||||
Interest expense | 101,254 | 104,101 | 112,590 | 103,581 | ||||||||
Depreciation and amortization | 162,769 | 102,846 | 137,064 | 103,177 | ||||||||
Total expenses | 477,997 | 398,587 | 476,309 | 357,957 | ||||||||
Nonoperating income, net | 1,332 | 12,628 | 26,468 | 6,981 | ||||||||
(67,673 | ) | 14,985 | 34,477 | 98,695 | ||||||||
Income tax expense | (545 | ) | (6,653 | ) | (4,924 | ) | (6,635 | ) | ||||
Equity in income of UJVs | 836 | 49,746 | ||||||||||
Gains on partial dispositions of ownership interests in UJVs, net of tax | 11,277 | 138,696 | ||||||||||
Gains on remeasurements of ownership interests in UJVs | 14,146 | 145,010 | ||||||||||
Net income (loss) | (41,959 | ) | 8,332 | 363,005 | 92,060 | |||||||
Net income/loss attributable to noncontrolling interests: | ||||||||||||
Noncontrolling share of income of consolidated joint ventures | (1,015 | ) | (3,219 | ) | ||||||||
Noncontrolling share of (income) loss of TRG | 16,653 | (103,899 | ) | |||||||||
Distributions to participating securities of TRG | (595 | ) | (1,817 | ) | ||||||||
Preferred stock dividends | (17,353 | ) | (17,353 | ) | ||||||||
Net income (loss) attributable to Taubman Centers, Inc. common shareholders | (44,269 | ) | 236,717 | |||||||||
SUPPLEMENTAL INFORMATION: | ||||||||||||
EBITDA - 100% | 223,255 | 221,932 | 567,837 | 305,453 | ||||||||
EBITDA - outside partners' share | (15,126 | ) | (122,990 | ) | (18,475 | ) | (146,640 | ) | ||||
Beneficial interest in EBITDA | 208,129 | 98,942 | 549,362 | 158,813 | ||||||||
Gain on insurance recoveries - The Mall of San Juan | (1,418 | ) | ||||||||||
Gain on transfer of building and improvements | (5,600 | ) | (10,095 | ) | ||||||||
Beneficial share of impairment charge | 19,834 | |||||||||||
Gains on partial dispositions of ownership interests in UJVs | (12,759 | ) | (138,696 | ) | ||||||||
Gains on remeasurements of ownership interests in UJVs | (14,146 | ) | (145,010 | ) | ||||||||
Beneficial interest expense | (92,977 | ) | (48,487 | ) | (103,692 | ) | (52,579 | ) | ||||
Beneficial income tax expense - TRG and TCO | (545 | ) | (1,362 | ) | (4,735 | ) | (2,680 | ) | ||||
Beneficial income tax expense - TCO | 30 | |||||||||||
Non-real estate depreciation | (3,327 | ) | (3,447 | ) | ||||||||
Preferred dividends and distributions | (17,353 | ) | (17,353 | ) | ||||||||
Funds from Operations attributable to partnership unitholders and participating securities of TRG | 67,052 | 63,327 | 124,916 | 103,554 | ||||||||
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS: | ||||||||||||
Net straight-line adjustments to rental revenues, recoveries, and ground rent expense at TRG% | (2,487 | ) | (2,097 | ) | 4,427 | 181 | ||||||
The Mall at Green Hills purchase accounting adjustments - rental revenues | 43 | 61 | ||||||||||
Country Club Plaza purchase accounting adjustments - rental revenues at TRG% | 346 | 257 | ||||||||||
The Gardens Mall purchase accounting adjustments - rental revenues at TRG% | (1,018 | ) | (816 | ) | ||||||||
The Gardens Mall purchase accounting adjustments - interest expense at TRG% | (1,584 | ) | (1,056 | ) | ||||||||
(1) With the exception of the Supplemental Information, amounts include 100% of the UJVs. Amounts are net of intercompany transactions. The UJVs are presented at 100% in order to allow for measurement of their performance as a whole, without regard to our ownership interest. | ||||||||||||
TAUBMAN CENTERS, INC. |
Use of Non-GAAP Financial Measures |
In this press release, the terms "we", "us", and "our" refer to Taubman Centers, Inc. (TCO), The Taubman Realty Group Limited Partnership (TRG), and/or TRG's subsidiaries as the context may require.
We use certain non-GAAP operating measures, including EBITDA, beneficial interest in EBITDA, Net Operating Income (NOI), beneficial interest in NOI, and Funds from Operations (FFO). These measures are reconciled to the most comparable GAAP measures. Additional information as to the use of these measures are as follows.
EBITDA represents earnings (loss) before interest, income taxes, and depreciation and amortization of our consolidated and unconsolidated businesses. Beneficial interest in EBITDA represents our share of the earnings (loss) before interest, income taxes, and depreciation and amortization of our consolidated and unconsolidated businesses. We believe EBITDA and beneficial interest in EBITDA provide useful indicators 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.
We use NOI as an alternative measure to evaluate the operating performance of centers, both on individual and stabilized portfolio bases, and in formulating corporate goals and compensation. We define NOI as property-level operating revenues (includes rental income excluding straight-line adjustments of minimum rent) less maintenance, property taxes, utilities, promotion, ground rent (including straight-line adjustments), and other property operating expenses. Beneficial interest in NOI represents our share of NOI (as previously defined) of our consolidated and unconsolidated businesses. 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. We also use 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. We generally provide 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. In addition, The Mall of San Juan has been excluded from comparable center statistics as a result of Hurricane Maria given that the center's performance has been and is expected to continue to be materially impacted for the foreseeable future. Stamford Town Center has also been excluded from comparable center statistics as the center was being marketed for sale until it was ultimately sold in October 2020. We also use NOI excluding lease cancellation income using constant currency exchange rates as an alternative measure because exchange rates may vary significantly from period to period, which can affect comparability and trend analysis.
The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (loss) (calculated in accordance with Generally Accepted Accounting Principles (GAAP)), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We believe 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, we 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. We primarily use FFO in measuring performance and in formulating corporate goals and compensation.
We 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. We believe 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. The following table summarizes adjustments to FFO and EBITDA for the three and nine months ended September 30, 2020 and 2019:
FFO | EBITDA | ||||||||||||||
Three Months Ended | Year to Date | Three Months Ended | Year to Date | ||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||
Simon Property Group, Inc. transaction costs | • | • | • | • | |||||||||||
Costs associated with shareholder activism | • | • | • | • | |||||||||||
Restructuring charges | • | • | • | • | • | • | • | • | |||||||
Costs related to Blackstone transactions | • | • | • | ||||||||||||
Taubman Asia President transition costs | • | • | |||||||||||||
Promote fee - Starfield Hanam | • | • | • | • | • | • | • | • | |||||||
Fluctuation in fair value of equity securities | • | • | • | • | • | • | |||||||||
Gains on partial dispositions of ownership interests in UJVs | • | • | • | ||||||||||||
Gains on remeasurements of ownership interests in UJVs | • | • | • | ||||||||||||
Gain on insurance recoveries - The Mall of San Juan | • | ||||||||||||||
Gain on transfer of building and improvements | • | • | • | • | |||||||||||
Beneficial share of impairment charge | • | • | |||||||||||||
These non-GAAP measures as presented by us 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 (loss) or as an indicator of our operating performance. Additionally, these measures do not represent cash flows from operating, investing, or financing activities as defined by GAAP.
We also provide our beneficial interest in certain financial information of our UJVs. This beneficial information is derived as our ownership interest in the investee multiplied by the specific financial statement item being presented. Investors are cautioned that deriving our beneficial interest in this manner may not accurately depict the legal and economic implications of holding a noncontrolling interest in the investee.
TAUBMAN CENTERS, INC. | |||||||||||||||||
Table 4 - Reconciliation of Net Income (Loss) Attributable to Taubman Centers, Inc. Common Shareholders to Funds From Operations and Adjusted Funds From Operations | |||||||||||||||||
For the Three Months Ended September 30, 2020 and 2019 | |||||||||||||||||
(in thousands of dollars except as noted; may not add or recalculate due to rounding) | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
Shares | Per Share | Shares | Per Share | ||||||||||||||
Dollars | /Units | /Unit | Dollars | /Units | /Unit | ||||||||||||
Net income (loss) attributable to TCO common shareholders - basic | (30,072 | ) | 61,696,565 | (0.49 | ) | 215,361 | 61,211,249 | 3.52 | |||||||||
Add distributions to participating securities of TRG | 597 | 871,262 | |||||||||||||||
Add impact of share-based compensation | 915 | 162,903 | |||||||||||||||
Net income (loss) attributable to TCO common shareholders - diluted | (30,072 | ) | 61,696,565 | (0.49 | ) | 216,873 | 62,245,414 | 3.48 | |||||||||
Add TCO's additional income tax expense | 11 | — | |||||||||||||||
Add depreciation of TCO's additional basis | 1,482 | 0.02 | 1,617 | 0.03 | |||||||||||||
Net income (loss) attributable to TCO common shareholders,
| (28,579 | ) | 61,696,565 | (0.46 | ) | 218,490 | 62,245,414 | 3.51 | |||||||||
Add noncontrolling share of income (loss) of TRG | (12,052 | ) | 26,306,431 | 93,690 | 26,430,716 | ||||||||||||
Add distributions to participating securities of TRG | 871,262 | ||||||||||||||||
Net income (loss) attributable to partnership unitholders and
| (40,631 | ) | 88,874,258 | (0.46 | ) | 312,180 | 88,676,130 | 3.52 | |||||||||
Add (less) depreciation and amortization: | |||||||||||||||||
Consolidated businesses at 100% | 49,235 | 0.55 | 47,849 | 0.54 | |||||||||||||
Depreciation of TCO's additional basis | (1,482 | ) | (0.02 | ) | (1,617 | ) | (0.02 | ) | |||||||||
Noncontrolling partners in consolidated joint ventures | (1,979 | ) | (0.02 | ) | (1,821 | ) | (0.02 | ) | |||||||||
Share of UJVs | 16,224 | 0.18 | 17,662 | 0.20 | |||||||||||||
Non-real estate depreciation | (1,143 | ) | (0.01 | ) | (1,150 | ) | (0.01 | ) | |||||||||
Less gain on transfer of building and improvements | (5,600 | ) | (0.06 | ) | (10,095 | ) | (0.11 | ) | |||||||||
Add beneficial share of impairment charge | 19,834 | 0.22 | |||||||||||||||
Less gain on partial disposition of ownership interest in UJV | (138,696 | ) | (1.56 | ) | |||||||||||||
Less gain on remeasurement of ownership interest in UJV | (145,010 | ) | (1.64 | ) | |||||||||||||
Less impact of share-based compensation | (915 | ) | (0.01 | ) | |||||||||||||
Funds from Operations attributable to partnership unitholders
| 34,458 | 88,874,258 | 0.39 | 78,387 | 88,676,130 | 0.88 | |||||||||||
TCO's average ownership percentage of TRG - basic (1) | 70.3 | % | 69.8 | % | |||||||||||||
Funds from Operations attributable to TCO's common shareholders, excluding additional income tax expense | 24,237 | 0.39 | 54,747 | 0.88 | |||||||||||||
Less TCO's additional income tax expense | (11 | ) | — | ||||||||||||||
Funds from Operations attributable to TCO's common shareholders (1) | 24,226 | 0.39 | 54,747 | 0.88 | |||||||||||||
Funds from Operations attributable to partnership unitholders
| 34,458 | 88,874,258 | 0.39 | 78,387 | 88,676,130 | 0.88 | |||||||||||
Simon Property Group, Inc. transaction costs | 17,060 | 0.19 | |||||||||||||||
Costs associated with shareholder activism | 675 | 0.01 | |||||||||||||||
Restructuring charges | 2,395 | 0.03 | 876 | 0.01 | |||||||||||||
Promote fee, net of tax - Starfield Hanam (2) | 329 | — | (3,961 | ) | (0.04 | ) | |||||||||||
Fluctuation in fair value of equity securities | (602 | ) | (0.01 | ) | |||||||||||||
Adjusted Funds from Operations attributable to partnership unitholders
| 53,640 | 88,874,258 | 0.60 | 75,977 | 88,676,130 | 0.86 | |||||||||||
TCO's average ownership percentage of TRG - basic (3) | 70.3 | % | 69.8 | % | |||||||||||||
Adjusted Funds from Operations attributable to TCO's common shareholders, excluding additional income tax expense | 37,730 | 0.60 | 53,064 | 0.86 | |||||||||||||
Less TCO's additional income tax expense | (11 | ) | — | ||||||||||||||
Adjusted Funds from Operations attributable to TCO's common shareholders (3) | 37,719 | 0.60 | 53,064 | 0.86 | |||||||||||||
(1) For the three months ended September 30, 2020, Funds from Operations attributable to TCO's common shareholders was $23,910 using TCO's diluted average ownership percentage of TRG of 69.4%. For the three months ended September 30, 2019, Funds from Operations attributable to TCO's common shareholders was $54,109 using TCO's diluted average ownership percentage of TRG of 69.0%. | |||||||||||||||||
(2) For the nine months ended September 30, 2020, includes a reduction of $0.3 million of promote fee income related to the previously recognized promote fee, net of tax, for Starfield Hanam, which was recorded within Equity in Income (Loss) of UJVs in our Statement of Operations and Comprehensive Income (Loss). For the three months ended September 30, 2019, includes $4.8 million of promote fee income related to Starfield Hanam less $0.9 million of income tax expense, which have been recorded within Equity in Income (Loss) of UJVs and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss). | |||||||||||||||||
(3) For the three months ended September 30, 2020, Adjusted Funds from Operations attributable to TCO's common shareholders was $37,226 using TCO's diluted average ownership percentage of TRG of 69.4%. For the three months ended September 30, 2019, Adjusted Funds from Operations attributable to TCO's common shareholders was $52,445 using TCO's diluted average ownership percentage of TRG of 69.0%. | |||||||||||||||||
TAUBMAN CENTERS, INC. | |||||||||||||||||
Table 5 - Reconciliation of Net Income (Loss) Attributable to Taubman Centers, Inc. Common Shareholders to Funds from Operations and Adjusted Funds from Operations | |||||||||||||||||
For the Nine Months Ended September 30, 2020 and 2019 | |||||||||||||||||
(in thousands of dollars except as noted; may not add or recalculate due to rounding) | 2020 | 2019 | |||||||||||||||
Shares | Per Share | Shares | Per Share | ||||||||||||||
Dollars | /Units | /Unit | Dollars | /Units | /Unit | ||||||||||||
Net income (loss) attributable to TCO common shareholders - basic | (44,269 | ) | 61,512,816 | (0.72 | ) | 236,717 | 61,169,279 | 3.87 | |||||||||
Add distributions to participating securities of TRG | 1,817 | 871,262 | |||||||||||||||
Add impact of share-based compensation | 689 | 191,955 | |||||||||||||||
Net income (loss) attributable to TCO common shareholders - diluted | (44,269 | ) | 61,512,816 | (0.72 | ) | 239,223 | 62,232,496 | 3.84 | |||||||||
Add TCO's additional income tax expense | 30 | — | |||||||||||||||
Add depreciation of TCO's additional basis | 4,444 | 0.07 | 4,851 | 0.08 | |||||||||||||
Net income (loss) attributable to TCO common shareholders,
| (39,795 | ) | 61,512,816 | (0.65 | ) | 244,074 | 62,232,496 | 3.92 | |||||||||
Add noncontrolling share of income (loss) of TRG | (16,653 | ) | 26,423,134 | 103,899 | 25,928,316 | ||||||||||||
Add distributions to participating securities of TRG | 595 | 871,262 | |||||||||||||||
Net income (loss) attributable to partnership unitholders and
| (55,853 | ) | 88,807,212 | (0.63 | ) | 347,973 | 88,160,812 | 3.95 | |||||||||
Add (less) depreciation and amortization: | |||||||||||||||||
Consolidated businesses at 100% | 162,769 | 1.83 | 137,064 | 1.55 | |||||||||||||
Depreciation of TCO's additional basis | (4,444 | ) | (0.05 | ) | (4,851 | ) | (0.06 | ) | |||||||||
Noncontrolling partners in consolidated joint ventures | (5,834 | ) | (0.07 | ) | (6,169 | ) | (0.07 | ) | |||||||||
Share of UJVs | 48,257 | 0.54 | 53,808 | 0.61 | |||||||||||||
Non-real estate depreciation | (3,327 | ) | (0.03 | ) | (3,447 | ) | (0.04 | ) | |||||||||
Less gain on insurance recoveries - The Mall of San Juan | (1,418 | ) | (0.02 | ) | |||||||||||||
Less gain on transfer of building and improvements | (5,600 | ) | (0.06 | ) | (10,095 | ) | (0.11 | ) | |||||||||
Add beneficial share of impairment charge | 19,834 | 0.22 | |||||||||||||||
Less gains on partial dispositions of ownership interests in UJVs, net of tax | (11,277 | ) | (0.13 | ) | (138,696 | ) | (1.57 | ) | |||||||||
Less gains on remeasurements of ownership interests in UJVs | (14,146 | ) | (0.16 | ) | (145,010 | ) | (1.64 | ) | |||||||||
Less impact of share-based compensation | (689 | ) | (0.01 | ) | |||||||||||||
Funds from Operations attributable to partnership unitholders
| 130,379 | 88,807,212 | 1.47 | 228,470 | 88,160,812 | 2.59 | |||||||||||
TCO's average ownership percentage of TRG - basic (1) | 70.1 | % | 70.2 | % | |||||||||||||
Funds from Operations attributable to TCO's common shareholders, excluding additional income tax expense | 91,346 | 1.47 | 160,544 | 2.59 | |||||||||||||
Less TCO's additional income tax expense | (30 | ) | — | ||||||||||||||
Funds from Operations attributable to TCO's common shareholders (1) | 91,316 | 1.47 | 160,544 | 2.59 | |||||||||||||
Funds from Operations attributable to partnership unitholders and
| 130,379 | 88,807,212 | 1.47 | 228,470 | 88,160,812 | 2.59 | |||||||||||
Simon Property Group, Inc. transaction costs | 32,505 | 0.37 | |||||||||||||||
Costs associated with shareholder activism | 16,675 | 0.19 | |||||||||||||||
Restructuring charges | 2,757 | 0.03 | 1,585 | 0.02 | |||||||||||||
Costs related to Blackstone transactions (2) | 1,113 | 0.01 | 2,066 | 0.02 | |||||||||||||
Taubman Asia President transition costs | 244 | — | |||||||||||||||
Promote fee, net of tax - Starfield Hanam (3) | 611 | 0.01 | (3,961 | ) | (0.04 | ) | |||||||||||
Fluctuation in fair value of equity securities | 933 | 0.01 | (3,346 | ) | (0.04 | ) | |||||||||||
Adjusted Funds from Operations attributable to partnership unitholders
| 168,542 | 88,807,212 | 1.90 | 241,489 | 88,160,812 | 2.74 | |||||||||||
TCO's average ownership percentage of TRG - basic (4) | 70.1 | % | 70.2 | % | |||||||||||||
Adjusted Funds from Operations attributable to TCO's common shareholders, excluding additional income tax expense | 118,138 | 1.90 | 169,648 | 2.74 | |||||||||||||
Less TCO's additional income tax expense | (30 | ) | — | ||||||||||||||
Adjusted Funds from Operations attributable to TCO's common shareholders (1) | 118,108 | 1.90 | 169,648 | 2.74 | |||||||||||||
(1) For the nine months ended September 30, 2020, Funds from Operations attributable to TCO's common shareholders was $90,175 using TCO's diluted average ownership percentage of TRG of 69.3%. For the nine months ended September 30, 2019, Funds from Operations attributable to TCO's common shareholders was $158,583 using TCO's diluted average ownership percentage of TRG of 69.4%. | |||||||||||||||||
(2) For the nine months ended September 30, 2020, includes $1.1 million of deferred income tax expense related to the Blackstone transactions, which has been recorded within Income Tax Expense in our Statement of Operations and Comprehensive Income (Loss). For the nine months ended September 30, 2019, includes $0.5 million of disposition costs and $1.6 million of deferred income tax expense related to the Blackstone transactions, which have been recorded within Nonoperating Income (Expense) and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss). | |||||||||||||||||
(3) For the nine months ended September 30, 2020, includes a reduction of $0.6 million of promote fee income related to the previously recognized promote fee, net of tax, for Starfield Hanam, which have been recorded within Equity in Income (Loss) of UJVs in our Statement of Operations and Comprehensive Income (Loss). For the nine months ended September 30, 2019, includes $4.8 million of promote fee income related to Starfield Hanam less $0.9 million of income tax expense, which have been recorded within Equity in Income (Loss) of UJVs and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss). | |||||||||||||||||
(4) For the nine months ended September 30, 2020, Adjusted Funds from Operations attributable to TCO's common shareholders was $116,628 using TCO's diluted average ownership percentage of TRG of 69.3%. For the nine months ended September 30, 2019, Adjusted Funds from Operations attributable to TCO's common shareholders was $167,578 using TCO's diluted average ownership percentage of TRG of 69.4%. | |||||||||||||||||
TAUBMAN CENTERS, INC. | |||||||||||
Table 6 - Reconciliation of Net Income (Loss) to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA | |||||||||||
For the Periods Ended September 30, 2020 and 2019 | |||||||||||
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding) | |||||||||||
Three Months Ended | Year to Date | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net income (loss) | (36,648 | ) | 316,390 | (41,959 | ) | 363,005 | |||||
Add (less) depreciation and amortization: | |||||||||||
Consolidated businesses at 100% | 49,235 | 47,849 | 162,769 | 137,064 | |||||||
Noncontrolling partners in consolidated joint ventures | (1,979 | ) | (1,821 | ) | (5,834 | ) | (6,169 | ) | |||
Share of UJVs | 16,224 | 17,662 | 48,257 | 53,808 | |||||||
Add (less) interest expense and income tax expense: | |||||||||||
Interest expense: | |||||||||||
Consolidated businesses at 100% | 33,052 | 37,695 | 101,254 | 112,590 | |||||||
Noncontrolling partners in consolidated joint ventures | (2,733 | ) | (2,844 | ) | (8,277 | ) | (8,898 | ) | |||
Share of UJVs | 16,127 | 17,798 | 48,487 | 52,579 | |||||||
Income tax expense: | |||||||||||
Consolidated businesses at 100% | 37 | 2,021 | 545 | 4,924 | |||||||
Noncontrolling partners in consolidated joint ventures | (189 | ) | |||||||||
Share of UJVs | 933 | 991 | 1,362 | 2,680 | |||||||
Share of income tax expense on dispositions of ownership interests | 1,482 | ||||||||||
Less noncontrolling share of (income) loss of consolidated joint ventures | 308 | (958 | ) | (1,015 | ) | (3,219 | ) | ||||
Beneficial interest in EBITDA | 74,556 | 434,783 | 307,071 | 708,175 | |||||||
TCO's average ownership percentage of TRG - basic | 70.3 | % | 69.8 | % | 70.1 | % | 70.2 | % | |||
Beneficial interest in EBITDA attributable to TCO | 52,472 | 303,663 | 215,257 | 496,283 | |||||||
Beneficial interest in EBITDA | 74,556 | 434,783 | 307,071 | 708,175 | |||||||
Add (less): | |||||||||||
Simon Property Group, Inc. transaction costs | 17,060 | 32,505 | |||||||||
Costs associated with shareholder activism | 675 | 16,675 | |||||||||
Restructuring charges | 2,395 | 876 | 2,757 | 1,585 | |||||||
Disposition costs related to Blackstone transactions | 487 | ||||||||||
Taubman Asia President transition costs | 244 | ||||||||||
Promote fee - Starfield Hanam | 329 | (4,820 | ) | 638 | (4,820 | ) | |||||
Fluctuation in fair value of equity securities | (602 | ) | 933 | (3,346 | ) | ||||||
Gains on partial dispositions of ownership interests in UJVs | (138,696 | ) | (12,759 | ) | (138,696 | ) | |||||
Gains on remeasurements of ownership interests in UJVs | (145,010 | ) | (14,146 | ) | (145,010 | ) | |||||
Gain on insurance recoveries - The Mall of San Juan | (1,418 | ) | |||||||||
Gain on transfer of building and improvements | (5,600 | ) | (10,095 | ) | (5,600 | ) | (10,095 | ) | |||
Beneficial share of impairment charge | 19,834 | 19,834 | |||||||||
Adjusted Beneficial interest in EBITDA | 107,972 | 137,713 | 331,477 | 423,537 | |||||||
TCO's average ownership percentage of TRG - basic | 70.3 | % | 69.8 | % | 70.1 | % | 70.2 | % | |||
Adjusted Beneficial interest in EBITDA attributable to TCO | 75,846 | 96,182 | 232,365 | 297,496 | |||||||
TAUBMAN CENTERS, INC. | |||||||||||||||
Table 7 - Reconciliation of Net Income (Loss) to Net Operating Income (NOI) | |||||||||||||||
For the Periods Ended September 30, 2020, 2019, and 2018 | |||||||||||||||
(in thousands of dollars) | Three Months Ended | Three Months Ended | |||||||||||||
2020 | 2019 | Growth % | 2019 | 2018 | Growth % | ||||||||||
Net income (loss) | (36,648 | ) | 316,390 | 316,390 | 38,115 | ||||||||||
Add (less) depreciation and amortization: | |||||||||||||||
Consolidated businesses at 100% | 49,235 | 47,849 | 47,849 | 46,307 | |||||||||||
Noncontrolling partners in consolidated joint ventures | (1,979 | ) | (1,821 | ) | (1,821 | ) | (1,911 | ) | |||||||
Share of UJVs | 16,224 | 17,662 | 17,662 | 17,190 | |||||||||||
Add (less) interest expense and income tax expense: | |||||||||||||||
Interest expense: | |||||||||||||||
Consolidated businesses at 100% | 33,052 | 37,695 | 37,695 | 33,396 | |||||||||||
Noncontrolling partners in consolidated joint ventures | (2,733 | ) | (2,844 | ) | (2,844 | ) | (2,984 | ) | |||||||
Share of UJVs | 16,127 | 17,798 | 17,798 | 17,093 | |||||||||||
Income tax expense: | |||||||||||||||
Consolidated businesses at 100% | 37 | 2,021 | 2,021 | (996 | ) | ||||||||||
Noncontrolling partners in consolidated joint ventures | (51 | ) | |||||||||||||
Share of UJVs | 933 | 991 | 991 | 1,023 | |||||||||||
Less noncontrolling share of loss (income) of consolidated joint ventures | 308 | (958 | ) | (958 | ) | (1,564 | ) | ||||||||
Add EBITDA attributable to outside partners: | |||||||||||||||
EBITDA attributable to noncontrolling partners in consolidated joint ventures | 4,404 | 5,623 | 5,623 | 6,510 | |||||||||||
EBITDA attributable to outside partners in UJVs | 32,180 | 50,377 | 50,377 | 48,438 | |||||||||||
EBITDA at 100% | 111,140 | 490,783 | 490,783 | 200,566 | |||||||||||
Add (less) items excluded from shopping center NOI: | |||||||||||||||
General and administrative expenses | 7,048 | 9,632 | 9,632 | 8,530 | |||||||||||
Management, leasing, and development services, net | (5 | ) | (32 | ) | (32 | ) | (384 | ) | |||||||
Simon Property Group, Inc. transaction costs | 17,060 | ||||||||||||||
Restructuring charges | 2,395 | 876 | 876 | ||||||||||||
Costs associated with shareholder activism | 675 | 675 | 1,500 | ||||||||||||
Straight-line of rents | 1,661 | (809 | ) | (809 | ) | (2,292 | ) | ||||||||
Nonoperating income, net | (13,498 | ) | (16,765 | ) | (16,765 | ) | (9,263 | ) | |||||||
Gain on partial disposition of ownership interest in UJV | (138,696 | ) | (138,696 | ) | |||||||||||
Gain on remeasurement of ownership interest in UJV | (145,010 | ) | (145,010 | ) | |||||||||||
Impairment charge | 39,668 | ||||||||||||||
Unallocated operating expenses and other | 3,850 | 6,749 | 6,749 | 8,131 | |||||||||||
NOI at 100% - total portfolio | 169,319 | 207,403 | 207,403 | 206,788 | |||||||||||
Less - NOI of non-comparable centers | (14,677 | ) | (1) | (21,295 | ) | (1) | (18,731 | ) | (2) | (13,187 | ) | (3) | |||
NOI at 100% - comparable centers | 154,642 | 186,108 | (16.9)% | 188,672 | 193,601 | (2.5)% | |||||||||
Foreign currency exchange rate fluctuation adjustment | (77 | ) | |||||||||||||
NOI at 100% - comparable centers including lease cancellation income at constant currency | 154,565 | 186,108 | (16.9)% | ||||||||||||
NOI at 100% - comparable centers | 154,642 | 186,108 | 188,672 | 193,601 | |||||||||||
Less lease cancellation income - comparable centers | (19,843 | ) | (1,045 | ) | (1,045 | ) | (3,041 | ) | |||||||
NOI at 100% - comparable centers excluding lease cancellation income | 134,799 | 185,063 | (27.2)% | 187,627 | 190,560 | (1.5)% | |||||||||
Foreign currency exchange rate fluctuation adjustment | (77 | ) | 1,202 | ||||||||||||
NOI at 100% - comparable centers excluding lease cancellation income at constant currency | 134,722 | 185,063 | (27.2)% | 188,829 | 190,560 | (0.9)% | |||||||||
NOI at 100% - comparable centers | 154,642 | 186,108 | |||||||||||||
Less NOI of comparable centers attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs | (48,832 | ) | (56,577 | ) | |||||||||||
Beneficial interest in NOI - comparable centers including lease cancellation income | 105,810 | 129,531 | (18.3)% | ||||||||||||
Beneficial interest in foreign currency exchange rate fluctuation adjustment | (15 | ) | |||||||||||||
Beneficial interest in NOI - comparable centers including lease cancellation income at constant currency | 105,795 | 129,531 | (18.3)% | ||||||||||||
NOI at 100% - comparable centers excluding lease cancellation income | 134,799 | 185,063 | |||||||||||||
Less NOI of comparable centers excluding lease cancellation income attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs | (43,401 | ) | (56,271 | ) | |||||||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income | 91,398 | 128,792 | (29.0)% | ||||||||||||
Beneficial interest in foreign currency exchange rate fluctuation adjustment | (15 | ) | |||||||||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income at constant currency | 91,383 | 128,792 | (29.0)% | ||||||||||||
NOI at 100% - total portfolio | 169,319 | 207,403 | 207,403 | 206,788 | |||||||||||
Less lease cancellation income - total portfolio | (25,953 | ) | (2,407 | ) | (2,407 | ) | (3,822 | ) | |||||||
Less NOI attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs excluding lease cancellation income - total portfolio | (45,202 | ) | (56,393 | ) | (56,393 | ) | (55,345 | ) | |||||||
Beneficial interest in NOI - total portfolio excluding lease cancellation income | 98,164 | 148,603 | (33.9)% | 148,603 | 147,621 | 0.7% | |||||||||
(1) Includes Beverly Center, The Gardens Mall, The Mall of San Juan, Stamford Town Center, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
(2) Includes Beverly Center, The Gardens Mall, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
(3) Includes Beverly Center, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
TAUBMAN CENTERS, INC. | |||||||||||||||
Table 8 - Reconciliation of Net Income (Loss) to Net Operating Income (NOI) | |||||||||||||||
For the Periods Ended September 30, 2020, 2019, and 2018 | |||||||||||||||
(in thousands of dollars) | Year to Date | Year to Date | |||||||||||||
2020 | 2019 | Growth % | 2019 | 2018 | Growth % | ||||||||||
Net income (loss) | (41,959 | ) | 363,005 | 363,005 | 102,804 | ||||||||||
Add (less) depreciation and amortization: | |||||||||||||||
Consolidated businesses at 100% | 162,769 | 137,064 | 137,064 | 124,325 | |||||||||||
Noncontrolling partners in consolidated joint ventures | (5,834 | ) | (6,169 | ) | (6,169 | ) | (5,480 | ) | |||||||
Share of UJVs | 48,257 | 53,808 | 53,808 | 51,570 | |||||||||||
Add (less) interest expense and income tax expense: | |||||||||||||||
Interest expense: | |||||||||||||||
Consolidated businesses at 100% | 101,254 | 112,590 | 112,590 | 97,242 | |||||||||||
Noncontrolling partners in consolidated joint ventures | (8,277 | ) | (8,898 | ) | (8,898 | ) | (9,023 | ) | |||||||
Share of UJVs | 48,487 | 52,579 | 52,579 | 51,107 | |||||||||||
Income tax expense: | |||||||||||||||
Consolidated businesses at 100% | 545 | 4,924 | 4,924 | (784 | ) | ||||||||||
Noncontrolling partners in consolidated joint ventures | (189 | ) | (189 | ) | (134 | ) | |||||||||
Share of UJVs | 1,362 | 2,680 | 2,680 | 2,387 | |||||||||||
Share of income tax expense on disposition of ownership interests | 1,482 | ||||||||||||||
Less noncontrolling share of income of consolidated joint ventures | (1,015 | ) | (3,219 | ) | (3,219 | ) | (4,388 | ) | |||||||
Add EBITDA attributable to outside partners: | |||||||||||||||
EBITDA attributable to noncontrolling partners in consolidated joint ventures | 15,126 | 18,475 | 18,475 | 19,025 | |||||||||||
EBITDA attributable to outside partners in UJVs | 122,990 | 146,640 | 146,640 | 145,671 | |||||||||||
EBITDA at 100% | 445,187 | 873,290 | 873,290 | 574,322 | |||||||||||
Add (less) items excluded from shopping center NOI: | |||||||||||||||
General and administrative expenses | 22,587 | 26,762 | 26,762 | 25,545 | |||||||||||
Management, leasing, and development services, net | (243 | ) | (1,118 | ) | (1,118 | ) | (1,294 | ) | |||||||
Simon Property Group, Inc. transaction costs | 32,505 | ||||||||||||||
Restructuring charges | 2,757 | 1,585 | 1,585 | (423 | ) | ||||||||||
Costs associated with shareholder activism | 16,675 | 16,675 | 10,000 | ||||||||||||
Straight-line of rents | 4,729 | (5,993 | ) | (5,993 | ) | (9,706 | ) | ||||||||
Nonoperating income, net | (13,960 | ) | (33,449 | ) | (33,449 | ) | (15,349 | ) | |||||||
Gains on partial dispositions of ownership interests in UJVs | (12,759 | ) | (138,696 | ) | (138,696 | ) | |||||||||
Gains on remeasurements of ownership interests in UJVs | (14,146 | ) | (145,010 | ) | (145,010 | ) | |||||||||
Impairment charge | 39,668 | ||||||||||||||
Unallocated operating expenses and other | 13,826 | 22,871 | 22,871 | 24,654 | |||||||||||
NOI at 100% - total portfolio | 520,151 | 616,917 | 616,917 | 607,749 | |||||||||||
Less - NOI of non-comparable centers | (41,434 | ) | (1) | (57,636 | ) | (1) | (48,662 | ) | (2) | (32,015 | ) | (3) | |||
NOI at 100% - comparable centers | 478,717 | 559,281 | (14.4)% | 568,255 | 575,734 | (1.3)% | |||||||||
Foreign currency exchange rate fluctuation adjustment | 2,075 | ||||||||||||||
NOI at 100% - comparable centers including lease cancellation income at constant currency | 480,792 | 559,281 | (14.0)% | ||||||||||||
NOI at 100% - comparable centers | 478,717 | 559,281 | 568,255 | 575,734 | |||||||||||
Less lease cancellation income - comparable centers | (26,938 | ) | (6,488 | ) | (7,480 | ) | (16,785 | ) | |||||||
NOI at 100% - comparable centers excluding lease cancellation income | 451,779 | 552,793 | (18.3)% | 560,775 | 558,949 | 0.3% | |||||||||
Foreign currency exchange rate fluctuation adjustment | 2,075 | 4,572 | |||||||||||||
NOI at 100% - comparable centers excluding lease cancellation income at constant currency | 453,854 | 552,793 | (17.9)% | 565,347 | 558,949 | 1.1% | |||||||||
NOI at 100% - comparable centers | 478,717 | 559,281 | |||||||||||||
Less NOI of comparable centers attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs | (145,357 | ) | (169,181 | ) | |||||||||||
Beneficial interest in NOI - comparable centers including lease cancellation income | 333,360 | 390,100 | (14.5)% | ||||||||||||
Beneficial interest in foreign currency exchange rate fluctuation adjustment | 436 | ||||||||||||||
Beneficial interest in NOI - comparable centers including lease cancellation income at constant currency | 333,796 | 390,100 | (14.4)% | ||||||||||||
NOI at 100% - comparable centers excluding lease cancellation income | 451,779 | (1) | 552,793 | (1) | |||||||||||
Less NOI of comparable centers excluding lease cancellation income attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs | (138,580 | ) | (167,770 | ) | |||||||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income | 313,199 | 385,023 | (18.7)% | ||||||||||||
Beneficial interest in foreign currency exchange rate fluctuation adjustment | 436 | ||||||||||||||
Beneficial interest in NOI - comparable centers excluding lease cancellation income at constant currency | 313,635 | 385,023 | (18.5)% | ||||||||||||
NOI at 100% - total portfolio | 520,151 | 616,917 | 616,917 | 607,749 | |||||||||||
Less lease cancellation income - total portfolio | (33,695 | ) | (10,407 | ) | (10,407 | ) | (19,667 | ) | |||||||
Less NOI attributable to noncontrolling partners in consolidated joint ventures and outside partners in UJVs excluding lease cancellation income - total portfolio | (145,973 | ) | (165,307 | ) | (165,307 | ) | (162,184 | ) | |||||||
Beneficial interest in NOI - total portfolio excluding lease cancellation income | 340,483 | 441,203 | (22.8)% | 441,203 | 425,898 | 3.6% | |||||||||
(1) Includes Beverly Center, The Gardens Mall, The Mall of San Juan, Stamford Town Center, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
(2) Includes Beverly Center, The Gardens Mall, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
(3) Includes Beverly Center, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield. | |||||||||||||||
TAUBMAN CENTERS, INC. | |||||||||||||||||||
Table 9 - Debt Summary | |||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||
(in millions of dollars, amounts may not add due to rounding) | |||||||||||||||||||
Ownership % | Amortizing (A)/ | Maturity | 100% | Beneficial Interest | Effective Rate | LIBOR Rate | |||||||||||||
Consolidated Fixed Rate Debt: | (if not 100%) | Interest Only (I) | Date | 9/30/2020 | 9/30/2020 | (a) | 9/30/2020 | (b) | Spread | ||||||||||
Cherry Creek Shopping Center | 50.00 | % | I | 6/1/2028 | 550.0 | 275.0 | 3.85 | % | |||||||||||
City Creek Center | A | 8/1/2023 | 74.0 | 74.0 | 4.37 | % | |||||||||||||
Great Lakes Crossing Outlets | A | 1/6/2023 | 189.6 | 189.6 | 3.60 | % | |||||||||||||
The Mall at Short Hills | I | 10/1/2027 | 1,000.0 | 1,000.0 | 3.48 | % | |||||||||||||
Twelve Oaks Mall | A | 3/6/2028 | 288.8 | 288.8 | 4.85 | % | |||||||||||||
2,102.5 | 1,827.5 | ||||||||||||||||||
3.81 | % | 3.80 | % | ||||||||||||||||
Consolidated Floating Rate Debt: | |||||||||||||||||||
The Mall at Green Hills | I | 12/1/2021 | 150.0 | 150.0 | 1.61 | % | (c) | 1.45% | (c) | ||||||||||
International Market Place | 93.50 | % | I | 8/9/2021 | (d) | 250.0 | 233.8 | 2.31 | % | 2.15% | (d) | ||||||||
TRG $65M Revolving Credit Facility | I | 4/24/2021 | 0.0 | (e) | 0.0 | 1.55 | % | (e) | 1.40% | ||||||||||
TRG $1.1B Revolving Credit Facility | I | 2/1/2024 | (f) | 845.0 | 845.0 | 2.10 | % | (f)(i) | 1.60% | (f)(i) | |||||||||
1,245.0 | 1,228.8 | ||||||||||||||||||
2.08 | % | 2.08 | % | ||||||||||||||||
Consolidated Floating Rate Debt Swapped to Fixed: | |||||||||||||||||||
TRG $275M Term Loan | I | 2/1/2025 | 275.0 | 275.0 | 3.94 | % | (g) | 1.80% | (g)(i) | ||||||||||
TRG $250M Term Loan | I | 3/31/2023 | 250.0 | 250.0 | 4.92 | % | (h) | 1.90% | (h)(i) | ||||||||||
TRG $1.1B Revolving Credit Facility (portion swapped) | I | 2/1/2024 | (f) | 25.0 | 25.0 | 3.74 | % | (f) | 1.60% | (f)(i) | |||||||||
U.S. Headquarters | I | 3/1/2024 | 12.0 | 12.0 | 3.49 | % | (j) | ||||||||||||
562.0 | 562.0 | ||||||||||||||||||
4.35 | % | 4.35 | % | ||||||||||||||||
Total Consolidated Deferred Financing Costs, Net | (11.9 | ) | (11.5 | ) | |||||||||||||||
Total Consolidated | 3,897.5 | 3,606.7 | |||||||||||||||||
Weighted Rate (excluding deferred financing costs) | 3.34 | % | 3.30 | % | |||||||||||||||
Joint Ventures Fixed Rate Debt: | |||||||||||||||||||
CityOn.Xi'an | 25.00 | % | A | 3/14/2029 | 156.1 | (k) | 39.0 | 6.00 | % | ||||||||||
CityOn.Zhengzhou | 24.50 | % | A | 3/22/2032 | 76.9 | (l) | 18.8 | 5.60 | % | (l) | |||||||||
Country Club Plaza | 50.00 | % | A | (m) | 4/1/2026 | 312.9 | 156.5 | 3.85 | % | ||||||||||
Fair Oaks Mall | 50.00 | % | A | 5/10/2023 | 251.8 | 125.9 | 5.32 | % | |||||||||||
The Gardens Mall | 48.50 | % | I - until 8/15/2021 | (n) | 7/15/2025 | (n) | 195.0 | 104.8 | (n) | 4.13 | % | (n) | |||||||
International Plaza | 50.10 | % | A | 12/1/2021 | 293.1 | 146.9 | 4.85 | % | |||||||||||
The Mall at Millenia | 50.00 | % | I | 10/15/2024 | 350.0 | 175.0 | 4.00 | % | |||||||||||
The Mall at Millenia | 50.00 | % | I | 10/15/2024 | 100.0 | 50.0 | 3.75 | % | |||||||||||
Starfield Anseong | 49.00 | % | I | 2/28/2025 | 239.7 | (o) | 117.5 | 2.16 | % | (o) | |||||||||
Starfield Hanam | 17.15 | % | I | 11/25/2020 | 266.6 | (p) | 45.7 | 2.58 | % | (p) | |||||||||
Sunvalley | 50.00 | % | A | 9/1/2022 | 162.0 | 81.0 | 4.44 | % | |||||||||||
Taubman Land Associates | 50.00 | % | A | 11/1/2022 | 20.2 | 10.1 | 3.84 | % | |||||||||||
The Mall at University Town Center | 50.00 | % | I - until 12/1/2022 | 11/1/2026 | 280.0 | 140.0 | 3.40 | % | |||||||||||
Waterside Shops | 50.00 | % | I | (q) | 4/15/2026 | 165.0 | 82.5 | 3.86 | % | ||||||||||
Westfarms | 78.94 | % | A | 7/1/2022 | 270.2 | 213.3 | 4.50 | % | |||||||||||
3,139.7 | 1,507.0 | ||||||||||||||||||
4.05 | % | 4.09 | % | ||||||||||||||||
Joint Venture Floating Rate Debt Swapped to Fixed: | |||||||||||||||||||
International Plaza | 50.10 | % | A | 12/1/2021 | 155.8 | 78.1 | 3.58 | % | (r) | ||||||||||
155.8 | 78.1 | ||||||||||||||||||
3.58 | % | 3.58 | % | ||||||||||||||||
Total Joint Venture Deferred Financing Costs, Net | (7.0 | ) | (3.4 | ) | |||||||||||||||
Total Joint Venture | 3,288.4 | 1,581.6 | |||||||||||||||||
Weighted Rate (excluding deferred financing costs) | 4.03 | % | 4.07 | % | |||||||||||||||
TRG Beneficial Interest Totals: | |||||||||||||||||||
Fixed Rate Debt | 5,242.1 | 3,334.4 | |||||||||||||||||
3.95 | % | 3.93 | % | ||||||||||||||||
Floating Rate Debt | 1,245.0 | 1,228.8 | |||||||||||||||||
2.08 | % | 2.08 | % | ||||||||||||||||
Floating Rate Debt Swapped to Fixed | 717.8 | 640.1 | |||||||||||||||||
4.19 | % | 4.26 | % | ||||||||||||||||
Total Deferred Financing Costs, Net | (19.0 | ) | (14.9 | ) | |||||||||||||||
Total | 7,185.9 | 5,188.3 | |||||||||||||||||
Weighted Rate (excluding deferred financing costs) | 3.65 | % | 3.54 | % | |||||||||||||||
Weighted Average Maturity Fixed Debt | 5.6 | ||||||||||||||||||
Weighted Average Maturity Total Debt | 4.8 | ||||||||||||||||||
TAUBMAN CENTERS, INC. | |||||||||||||||||||||||
Table 9 - Debt Summary (continued) | |||||||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||
(in millions of dollars, amounts may not add due to rounding) | |||||||||||||||||||||||
Beneficial Share of Principal Amortization and Debt Maturities | |||||||||||||||||||||||
Year | Fixed Rate Debt (s) | Weighted Rate | Floating Rate Debt | Weighted Rate | Floating Swapped
| Weighted
| Total Deferred
| Total Debt | Weighted Rate | ||||||||||||||
2020 | 54.3 | 2.86 | % | 0.5 | 3.58 | % | (1.1 | ) | 53.7 | 2.87 | % | ||||||||||||
2021 | 176.6 | 4.78 | % | 383.8 | 2.03 | % | 77.6 | 3.58 | % | (3.8 | ) | 634.1 | 2.98 | % | |||||||||
2022 | 318.2 | 4.46 | % | (2.9 | ) | 315.3 | 4.46 | % | |||||||||||||||
2023 | 386.7 | 4.32 | % | 250.0 | 4.92 | % | (2.2 | ) | 634.5 | 4.56 | % | ||||||||||||
2024 | 245.7 | 4.00 | % | 845.0 | 2.10 | % | 37.0 | 3.66 | % | (2.0 | ) | 1,125.7 | 2.57 | % | |||||||||
2025 | 228.9 | 3.18 | % | 275.0 | 3.94 | % | (1.2 | ) | 502.8 | 3.59 | % | ||||||||||||
2026 | 366.4 | 3.75 | % | (1.0 | ) | 365.4 | 3.75 | % | |||||||||||||||
2027 | 1,015.3 | 3.51 | % | (0.7 | ) | 1,014.6 | 3.51 | % | |||||||||||||||
2028 | 531.0 | 4.35 | % | 531.0 | 4.35 | % | |||||||||||||||||
2029 | 5.4 | 5.84 | % | 5.4 | 5.84 | % | |||||||||||||||||
2030 | 2.3 | 5.60 | % | 2.3 | 5.60 | % | |||||||||||||||||
2031 | 2.4 | 5.60 | % | 2.4 | 5.60 | % | |||||||||||||||||
2032 | 1.2 | 5.60 | % | 1.2 | 5.60 | % | |||||||||||||||||
3,334.4 | 3.93 | % | 1,228.8 | 2.08 | % | 640.1 | 4.26 | % | (14.9 | ) | 5,188.3 | 3.54 | % | ||||||||||
Unencumbered Assets | |||||||||||||||||||||||
Center | Location | Ownership % | |||||||||||||||||||||
Consolidated Businesses: | |||||||||||||||||||||||
Beverly Center | Los Angeles, CA | 100% | |||||||||||||||||||||
Dolphin Mall | Miami, FL | 100% | |||||||||||||||||||||
The Gardens on El Paseo | Palm Desert, CA | 100% | |||||||||||||||||||||
The Mall of San Juan | San Juan, PR | 95% | |||||||||||||||||||||
Unconsolidated Joint Ventures: | |||||||||||||||||||||||
Stamford Town Center | Stamford, CT | 50% | (u) | ||||||||||||||||||||
(a) | All debt is secured and non-recourse to TRG unless otherwise indicated. | ||||||||||||||||||||||
(b) | Includes the impact of interest rate swaps that qualify for hedge accounting, if any, but does not include effect of amortization of debt issuance costs, losses on settlement of derivatives used to hedge the refinancing of certain fixed rate debt or interest rate cap premiums, if any. | ||||||||||||||||||||||
(c) | Through November 2020, the LIBOR rate is capped at 3.00%, resulting in a maximum interest rate of 4.45%. In August 2020, we extended the loan to December 2021 and commencing in December 2020, the interest rate will be a variable rate equal to the greater of LIBOR + 2.75% or 3.25%. From December 2020 to December 2021, the LIBOR rate is capped at 2.00%, resulting in a maximum interest rate of 4.75%. | ||||||||||||||||||||||
(d) | The $250 million loan bears interest at LIBOR + 2.15% and decreases to LIBOR + 1.85% upon achieving certain performance measures. Two, one-year extension options are available. TRG has provided an unconditional guarantee of 100% of the principal balance and all accrued but unpaid interest during the term of the loan. | ||||||||||||||||||||||
(e) | Rate floats daily at LIBOR plus spread. Letters of credit totaling $9.8 million are also outstanding on facility. The facility is recourse to TRG and secured by an indirect interest in 40% of The Mall at Short Hills. | ||||||||||||||||||||||
(f) | The unsecured facility bears interest at a range of LIBOR + 1.05% to 1.60% with a facility fee ranging from 0.20% to 0.25% based on our total leverage ratio. Two, six-month extension options are available. The LIBOR rate is swapped to a fixed rate of 2.14% until February 2022 on $25 million of the $1.1 billion TRG revolving credit facility. This results in an effective interest rate in the range of 3.19% to 3.74% until February 2022 on $25 million of the credit facility balance. | ||||||||||||||||||||||
(g) | The $275 million unsecured term loan bears interest at a range of LIBOR + 1.15% to 1.80% based on our total leverage ratio. The LIBOR rate is swapped to a fixed rate of 2.14% until February 2022, which results in an effective interest rate in the range of 3.29% to 3.94% until February 2022. | ||||||||||||||||||||||
(h) | The $250 million unsecured term loan bears interest at a range of LIBOR + 1.25% to 1.90% based on our total leverage ratio. Through the term of the loan, the LIBOR rate is swapped to a fixed rate of 3.02% which results in an effective interest rate in the range of 4.27% to 4.92%. | ||||||||||||||||||||||
(i) | In August 2020, we entered into amendments to waive all of our existing financial covenants related to our primary unsecured revolving line of credit, $275 million unsecured term loan, and $250 million unsecured term loan for the quarter ending September 30, 2020 through and including the quarter ending June 30, 2021. Through the covenant compliance date, our primary unsecured revolving line of credit will bear interest at the maximum total leverage ratio level of LIBOR, subject to a 0.5% floor on the unhedged balance, plus 1.60% with a 0.25% facility fee; our $275 million unsecured term loan will bear interest at the maximum total leverage ratio level of LIBOR plus 1.80%; and our $250 million unsecured term loan will bear interest at the maximum total leverage ratio level of LIBOR plus 1.90%. | ||||||||||||||||||||||
(j) | Debt is swapped to an effective rate of 3.49% until maturity. | ||||||||||||||||||||||
(k) | 1.2 billion Renminbi (RMB) ($176.7 million USD equivalent at September 30, 2020) non-recourse facility. Scheduled principal payments have been paid on the facility since September 2019. Approximately $1.5 million USD remains available for future borrowings using the September 30, 2020 exchange rate. | ||||||||||||||||||||||
(l) | 1.2 billion RMB ($176.7 million USD equivalent at September 30, 2020) non-recourse facility. The loan bears interest at the 5 year China RMB Loan Prime Rate plus 0.85% and is fixed upon each draw. | ||||||||||||||||||||||
(m) | In May 2020, Country Club Plaza entered into a forbearance agreement which deferred principal amortization for the period June through August 2020. This deferred amortization will be repaid September through December 2020. | ||||||||||||||||||||||
(n) | Beneficial interest in debt includes $10.2 million of purchase accounting premium from acquisition of The Gardens Mall which reduces the stated rate on the debt of 6.8% to an average effective rate of 4.2% on total beneficial interest in debt over the remaining term of the loan. The effective rate for the current quarter differs from the average over the remaining term of the loan due to differences in amortization methods. The lender has the option to declare the loan due and payable if the net income available for debt service as defined in the loan agreement is less than a certain amount for calendar years 2020 through 2022. In June 2020, The Gardens Mall entered into a loan modification agreement which deferred interest payments for the period June through September 2020. This deferred interest will be repaid October 2020 through May 2021. In addition, the principal amortization that was originally scheduled to begin in August 2020 has been deferred to August 2021. | ||||||||||||||||||||||
(o) | 300 billion Korean Won (KRW) ($257.6 million USD equivalent at September 30, 2020) non-recourse construction facility which bears interest at the Korea Financial Investment Association (KOFIA) Five Year AAA Financial (Bank) Yield plus 0.76% and is fixed upon each draw. No draws are allowed after February 26, 2021. | ||||||||||||||||||||||
(p) | 520 billion KRW ($446.4 million USD equivalent at September 30, 2020) non-recourse construction facility which bears interest at the KOFIA Five Year Industrial Financial Debentures Yield plus 1.06% and was fixed upon each draw. In October 2020, this loan was refinanced with a 600 billion KRW (approximately $530 million USD equivalent using current exchange rates), non-recourse five-year, 2.38% fixed rate loan. | ||||||||||||||||||||||
(q) | The Waterside Shops loan is interest-only for the term of the loan. However, if net operating income available for debt service as defined in the loan agreement is less than a certain amount for calendar year 2020, the lender may require the loan to amortize based on a 30-year amortization period beginning May 2021. In May 2020, Waterside Shops entered into a loan modification agreement which deferred interest payments for the period May through September 2020. This deferred interest will be repaid October 2020 through May 2021. | ||||||||||||||||||||||
(r) | Debt is swapped to an effective rate of 3.58% until maturity. TRG has provided a several guarantee of 50.1% of the swap obligations. | ||||||||||||||||||||||
(s) | Principal amortization includes amortization of purchase accounting adjustments. | ||||||||||||||||||||||
(t) | Represents principal amortization of floating rate debt swapped to fixed rate debt as of September 30, 2020. Note that not all of this debt may be swapped at these rates through maturity. See footnote (f), (g) and (h) above. | ||||||||||||||||||||||
(u) | Stamford Town Center was sold in October 2020. | ||||||||||||||||||||||
TAUBMAN CENTERS, INC. | ||||||||
Table 10 - Owned Centers | ||||||||
As of September 30, 2020 | ||||||||
Sq. Ft. of GLA/ | Year Opened/ | Year | Ownership | |||||
Center | Anchors | Mall GLA | Expanded | Acquired | % | |||
Consolidated Businesses: | ||||||||
Beverly Center | Bloomingdale's, Macy's | 846,000 | 1982 | 100% | ||||
Los Angeles, CA | 522,000 | |||||||
Cherry Creek Shopping Center | Macy's, Neiman Marcus, Nordstrom | 1,037,000 | 1990/1998/ | 50% | ||||
Denver, CO | 634,000 | 2015 | ||||||
City Creek Center | Macy's, Nordstrom | 623,000 | 2012 | 100% | ||||
Salt Lake City, UT | 342,000 | |||||||
Dolphin Mall | Bass Pro Shops Outdoor World, Bloomingdale's Outlet, Burlington | 1,434,000 | 2001/2007/ | 100% | ||||
Miami, FL | Coat Factory, Cobb Theatres, Dave & Buster's, Marshalls, Polo Ralph | 707,000 | 2015 | |||||
Lauren Factory Store, Saks Off 5th | ||||||||
The Gardens on El Paseo | Saks Fifth Avenue | 238,000 | 1998/2010 | 2011 | 100% | |||
Palm Desert, CA | 187,000 | |||||||
Great Lakes Crossing Outlets | AMC Theatres, Bass Pro Shops Outdoor World, Burlington Coat Factory, | 1,355,000 | 1998 | 100% | ||||
Auburn Hills, MI | Legoland, Nordstrom Rack, Planet Fitness, | 533,000 | ||||||
(Detroit Metropolitan Area) | Round 1 Bowling and Amusement, Sea Life | |||||||
The Mall at Green Hills | Dillard's, Macy's, Nordstrom | 998,000 | (1) | 1955/2011/ | 2011 | 100% | ||
Nashville, TN | 493,000 | 2019 | ||||||
International Market Place | Saks Fifth Avenue | 340,000 | 2016 | 93.5% | ||||
Waikiki, Honolulu, HI | 261,000 | |||||||
The Mall of San Juan | 627,000 | (2) | 2015 | 95% | ||||
San Juan, PR | 389,000 | |||||||
The Mall at Short Hills | Bloomingdale's, Macy's, | 1,344,000 | 1980/1994/ | 100% | ||||
Short Hills, NJ | Neiman Marcus, Nordstrom | 605,000 | 1995 /2011 | |||||
Twelve Oaks Mall | JCPenney, Lord & Taylor (3), Macy's, | 1,520,000 | (4) | 1977/1978/ | 100% | |||
Novi, MI (Detroit Metropolitan Area) | Nordstrom | 550,000 | 2007/2008 | |||||
Total GLA | 10,362,000 | |||||||
Total Mall GLA | 5,223,000 | |||||||
TRG % of Total GLA | 9,790,000 | |||||||
TRG % of Total Mall GLA | 4,870,000 | |||||||
Unconsolidated Joint Ventures: | ||||||||
CityOn.Xi'an | Wangfujing | 995,000 | 2016 | 25% | ||||
Xi'an, China | 693,000 | |||||||
CityOn.Zhengzhou | G-Super, Wangfujing | 919,000 | 2017 | 24.5% | ||||
Zhengzhou, China | 621,000 | |||||||
Country Club Plaza | (5) | 947,000 | (6) | 1922/1977/ | 2016 | 50% | ||
Kansas City, MO | 729,000 | 2000/2015 | ||||||
Fair Oaks Mall | JCPenney, Lord & Taylor (3), Macy's (two locations) | 1,558,000 | (7) | 1980/1987/ | 50% | |||
Fairfax, VA (Washington, DC Metropolitan Area) | 562,000 | 1988/2000 | ||||||
The Gardens Mall | Bloomingdale's, Macy's, Nordstrom, | 1,385,000 | 1988 / 2005 | 2019 | 48.5% | |||
Palm Beach Gardens, FL | Saks Fifth Avenue, Sears | 450,000 | ||||||
International Plaza | Dillard's, Life Time Athletic, Neiman Marcus, Nordstrom | 1,252,000 | 2001/2015 | 50.1% | ||||
Tampa, FL | 615,000 | |||||||
The Mall at Millenia | Bloomingdale’s, Macy's, Neiman Marcus | 1,114,000 | 2002 | 50% | ||||
Orlando, FL | 514,000 | |||||||
Stamford Town Center | Macy's, Saks Off 5th | 761,000 | 1982/2007 | 50% | ||||
Stamford, CT | 438,000 | |||||||
Starfield Hanam | PK Market, Shinsegae, Traders | 1,709,000 | 2016 | 17.15% | ||||
Hanam, South Korea | 978,000 | |||||||
Sunvalley | JCPenney, Macy's (two locations), Sears | 1,324,000 | 1967/1981 | 2002 | 50% | |||
Concord, CA (San Francisco Metropolitan Area) | 485,000 | |||||||
The Mall at University Town Center | Dillard's, Macy's, Saks Fifth Avenue | 863,000 | 2014 | 50% | ||||
Sarasota, FL | 441,000 | |||||||
Waterside Shops | Saks Fifth Avenue | 342,000 | 1992/2006/ | 2003 | 50% | |||
Naples, FL | 202,000 | 2008 | ||||||
Westfarms | JCPenney, Lord & Taylor (3), Macy's (two locations), Nordstrom | 1,266,000 | 1974/1983/ | 79% | ||||
West Hartford, CT | 497,000 | 1997 | ||||||
Total GLA | 14,435,000 | |||||||
Total Mall GLA | 7,225,000 | |||||||
TRG % of Total GLA | 6,521,000 | |||||||
TRG % of Total Mall GLA | 3,098,000 | |||||||
Grand Total GLA | 24,797,000 | |||||||
Grand Total Mall GLA | 12,448,000 | |||||||
TRG % of Total GLA | 16,311,000 | |||||||
TRG % of Total Mall GLA | 7,968,000 | |||||||
(1) GLA does not reflect the full total incremental GLA to be added in connection with the redevelopment project at the center. | ||||||||
(2) GLA includes approximately 100,000 square feet of GLA related to the former Saks Fifth Avenue space, which closed in September 2017 and terminated its lease in August 2019. | ||||||||
(3) GLA includes the former Saks Fifth Avenue store, which closed in September 2016. A portion of this space opened as Mall GLA in 2018, while the remaining 31,000 square feet of GLA of the space is currently under redevelopment as coworking office space. | ||||||||
(4) GLA includes approximately 228,000 square feet of GLA related to the former Sears space, which closed in March 2019. | ||||||||
(5) In 2018, Nordstrom announced plans to relocate a store to the center. The new, approximately 116,000-square-foot store is expected to open in Fall 2022. | ||||||||
(6) GLA includes 218,000 square feet of office property. | ||||||||
(7) GLA includes approximately 210,000 square feet of GLA related to the former Sears space, which closed in November 2018 and is now partially occupied. | ||||||||
TAUBMAN CENTERS, INC. | |||||||||||||
Table 11 - Anchors in Owned Portfolio | |||||||||||||
As of September 30, 2020 | |||||||||||||
Number | |||||||||||||
Name | of Stores | GLA | % of GLA | ||||||||||
Macy's | |||||||||||||
Bloomingdale's (1) | 4 | 850 | |||||||||||
Macy's | 13 | 2,803 | |||||||||||
Macy's Men's Store/Furniture Gallery | 3 | 489 | |||||||||||
20 | 4,142 | 18.8 | % | ||||||||||
Nordstrom (2) | 8 | 1,233 | 5.6 | % | |||||||||
Hudson's Bay Company | |||||||||||||
Lord & Taylor (3) | 3 | 392 | |||||||||||
Saks Fifth Avenue | 5 | 381 | |||||||||||
Saks Off 5th (4) | 1 | 78 | |||||||||||
9 | 851 | 3.9 | % | ||||||||||
JCPenney | 4 | 745 | 3.4 | % | |||||||||
Dillard's | 3 | 596 | 2.7 | % | |||||||||
Wangfujing | 2 | 565 | 2.6 | % | |||||||||
Shinsegae | |||||||||||||
PK Market | 1 | 63 | |||||||||||
Shinsegae | 1 | 484 | |||||||||||
2 | 547 | 2.5 | % | ||||||||||
Neiman Marcus | 4 | 402 | 1.8 | % | |||||||||
Sears | 2 | 390 | 1.8 | % | |||||||||
Traders | 1 | 183 | 0.8 | % | |||||||||
Life Time Athletic | 1 | 56 | 0.3 | % | |||||||||
G-Super | 1 | 36 | 0.2 | % | |||||||||
Total | 57 | 9,746 | 44.3 | % | (5) | ||||||||
(1) | Excludes one Bloomingdale's Outlet store at a value center. | ||||||||||||
(2) | Excludes one Nordstrom Rack at an outlet center. | ||||||||||||
(3) | In August 2020, Lord & Taylor filed for bankruptcy and announced plans to close its three stores in our portfolio at Twelve Oaks Mall, Fair Oaks Mall, and Westfarms following liquidation sales. | ||||||||||||
(4) | Excludes one Saks Off 5th store at a value center. | ||||||||||||
(5) | Percentages may not add due to rounding. | ||||||||||||
TAUBMAN CENTERS, INC. | ||||||||
Table 12 - Major Tenants in Owned Portfolio | ||||||||
As of September 30, 2020 | ||||||||
Tenant | Number
| Square
| % Mall
| |||||
Forever 21 (Forever 21, XXI Forever) | 16 | 448,690 | 3.6 | % | ||||
H&M | 19 | 416,991 | 3.3 | % | ||||
The Gap (Gap, Gap Kids, Baby Gap, Banana Republic, Janie and Jack, Old Navy, Athleta, and others) | 56 | 413,155 | 3.3 | % | ||||
Limited Brands (Bath & Body Works/White Barn Candle, Pink, Victoria's Secret, and others) | 39 | 277,348 | 2.2 | % | ||||
Inditex (Zara, Zara Home, Massimo Dutti, Bershka, and others) | 20 | 235,063 | 1.9 | % | ||||
Urban Outfitters (Anthropologie, Free People, Urban Outfitters) | 29 | 230,486 | 1.9 | % | ||||
Williams-Sonoma (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, and others) | 27 | 222,918 | 1.8 | % | ||||
Abercrombie & Fitch (Abercrombie & Fitch, Hollister, and others) | 30 | 199,372 | 1.6 | % | ||||
LVMH (Sephora, Louis Vuitton, Dior, Fendi, Loro Piana, Bvlgari, Kenzo, and others) | 43 | 184,815 | 1.5 | % | ||||
Restoration Hardware | 5 | 179,954 | 1.4 | % | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006048/en/
Contacts:
ewright@taubman.com
