UNITED STATES	
SECURITIES AND EXCHANGE COMMISSION	
Washington, D.C. 20549	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	FORM	8-K	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Current Report Pursuant	
to Section 13 or 15(d) of the	
Securities Exchange Act of 1934	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Date of report (date of earliest event reported):	 	October 29, 2019	 	 	
 	
TAUBMAN CENTERS, INC.	
(Exact Name of Registrant as Specified in its Charter)	
 	 	 	 	 	 	 	 	 	 	 	 	
Michigan	
(State of Other Jurisdiction of Incorporation)	
 	 	
 	1-11530	 	 	 	 	38-2033632	
 	(Commission File Number)	 	 	 	 	(I.R.S. Employer Identification No.)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	200 East Long Lake Road	 	 	 	 	 	 	 	 	
 	Suite 300	 	 	 	 	 	 	 	 	
 	Bloomfield Hills,	Michigan	 	 	 	 	48304-2324	
 	(Address of Principal Executive Office)	 	 	 	 	(Zip Code)	
 	 	
 	Registrant’s Telephone Number, Including Area Code:	 	(248)	 258-6800	 	
 	 	
 	None	
 	(Former Name or Former Address, if Changed Since Last Report)	
 	 	
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):	
 	 	
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	 	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	 	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	 	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Securities registered pursuant to Section 12(b) of the Act:

			
 	Trading	Name of each exchange	
Title of each class	Symbol	on which registered	
Common Stock,
$0.01 Par Value	TCO	New York Stock Exchange	

6.5% Series J Cumulative
Redeemable Preferred Stock,
No Par Value	TCO PR J	New York Stock Exchange	

 	 	 	
6.25% Series K Cumulative
Redeemable Preferred Stock,
No Par Value	TCO PR K	New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

The information under this caption is furnished by Taubman Centers, Inc. (the "Company") in accordance with Securities and Exchange Commission Release No. 33-8216. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On October 29, 2019, the Company issued a press release announcing its results of operations for the quarter ended September 30, 2019. A copy of the press release is attached as Exhibit 99 to this report.

Item 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.

(d)    Exhibits

	
		
Exhibit	Description	
 	 	
99	Press Release, dated October 29, 2019, entitled “Taubman Centers, Inc. Issues Third Quarter Results”	
104	104 Cover Page Interactive Data File (embedded within the Inline XBRL document)	

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
				
Date:	October 29, 2019	TAUBMAN CENTERS, INC.	
 	 	 	 	
 	 	By:	/s/ Simon J. Leopold	
 	 	 	Simon J. Leopold	
 	 	 	Executive Vice President, Chief Financial Officer, and Treasurer	

Exhibit 99

					
Taubman Centers, Inc.	T 248.258.6800	 	 	 	
		 	 		
200 East Long Lake Road	www.taubman.com	 	 		
Suite 300	 	 	 		
Bloomfield Hills, Michigan	 	 	 		
48304-2324	 	 	 		
 
TAUBMAN CENTERS, INC. ISSUES THIRD QUARTER RESULTS

–	Net Income and Earnings Per Diluted Common Share (EPS) Higher Due to Sale of Interest in Starfield Hanam	
		
–	Pro Rata Total Portfolio NOI, Excluding Lease Cancellation Income, Up 0.7 Percent for the Quarter and 3.6 Percent Year-to-Date	
		
–	Average Rent Per Square Foot Up 2.3 Percent	
		
–	Trailing 12-Month Tenant Sales Per Square Foot $868, Up 12 Percent	
		
–	Sales Per Square Foot Up 11.2 Percent, 13th Consecutive Quarter of Growth	

BLOOMFIELD HILLS, Mich., October 29, 2019 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the third quarter of 2019.

	
					
 	September 30, 2019
Three Months Ended	September 30, 2018
Three Months Ended	September 30, 2019
Nine Months Ended	September 30, 2019
Nine Months Ended	
Net income attributable to common shareowners, diluted (in thousands)	$216,873	$21,007	$239,223	$54,950	
Net income attributable to common shareowners (EPS) per diluted common share	$3.48(1)	$0.34	$3.84(1)	$0.90	
Funds from Operations (FFO) per diluted common share
Growth rate	
$0.88
(16.2)%	$1.05	
$2.59
(9.1)%	$2.85	
Adjusted Funds from Operations (Adjusted FFO) per diluted common share
Growth rate	
$0.86(2)
(14.9)%	$1.01(3)	
$2.74(2)
(6.2)%	
$2.92(3)	
(1) EPS for the three and nine-month periods ended September 30, 2019 were higher primarily due to the sale of 50 percent of our interest in Starfield Hanam and a litigation settlement related to The Mall of San Juan, resulting in the recognition of gains totaling approximately $3.30 per diluted common share.
(2) Adjusted FFO for the three and nine-month periods ended September 30, 2019 excludes restructuring charges, a promote fee (net of tax) related to Starfield Hanam, and costs associated with shareholder activism. Adjusted FFO for the nine-month period ended September 30, 2019 also excludes costs incurred related to the Blackstone transactions prior to closing and the fluctuation in the fair value of equity securities.
(3) Adjusted FFO for the three and nine-month periods ended September 30, 2018 excludes costs associated with shareholder activism and the fluctuation in the fair value of equity securities.	

“We were pleased to meet our earnings expectations this quarter,” said Robert S. Taubman, chairman, president and chief executive officer.

Year-over-year, this quarter’s results were lower due to higher interest expense, lower lease cancellation income and a gain on a land sale in 2018. In addition, the company’s results were impacted by the Forever 21 bankruptcy filing by about three cents. Taken together, these items affected third quarter FFO and Adjusted FFO per share by about 12 cents.

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Operating Statistics

Total portfolio NOI growth at our beneficial interest, excluding lease cancellation income, was up 0.7 percent for the quarter, bringing year-to-date growth to 3.6 percent.

Comparable center NOI, excluding lease cancellation income and using constant currency exchange rates, was down 0.9 percent in the quarter, bringing year-to-date growth to 1.1 percent. Comparable center NOI, excluding lease cancellation income, was down 1.5 percent in the quarter, bringing year-to-date growth to 0.3 percent. “Foreign currency exchange rates and Forever 21’s bankruptcy reduced NOI this quarter as compared to last year,” said Simon J. Leopold, executive vice president, chief financial officer. “Putting aside these two items, our third quarter NOI was essentially flat to last year,” said Mr. Leopold.

Tenant sales per square foot in U.S. comparable centers were up 12.3 percent in the quarter, bringing 12-month trailing U.S. sales per square foot to $964, an increase of 13.7 percent over the 12-months ended September 30, 2018. Year-to-date, U.S. sales per square foot were up 15 percent.

Including Asia, comparable tenant sales per square foot increased 11.2 percent from the third quarter of 2018. This brings the company’s 12-month trailing sales per square foot to $868, up 12 percent over the 12-months ended September 30, 2018. Year-to-date, tenant sales per square foot were up 12.9 percent.

“While Tesla continues to positively impact our growth, sales for the quarter were otherwise solid,” said Mr. Taubman.

Average rent per square foot for the quarter was $56.03, up 2.3 percent, bringing year-to-date growth to 1.7 percent. Average rent per square foot in U.S. comparable centers was up 0.9 percent in both the third quarter and year-to-date.

Trailing 12-month releasing spread per square foot for the period ended September 30, 2019 was negative 1 percent. The spread was impacted by a small number of deals that have an average lease term of less than two years. Without these leases, the spread was 3.3 percent.

Ending occupancy in comparable centers was 93.4 percent on September 30, 2019, up 0.1 percent from September 30, 2018.

Leased space in comparable centers was 95.9 percent on September 30, 2019, up 0.1 percent from September 30, 2018.

“In a year when the retail landscape continues to evolve, we have maintained healthy occupancy levels, while growing rent and portfolio NOI,” said Mr. Taubman.

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Financing Activity

In October, the company amended and extended its primary revolving line of credit and one of its two unsecured term loans. The revolving line of credit, which had a maturity date of February 2021, has been extended to February 2024, with two six-month extension options. It has a maximum capacity of $1.1 billion. The term loan, which had a maturity date of February 2022, has been extended to February 2025, with a principal balance of $275 million.

The revolving line of credit and term loan 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 1.375 percent, with an annual facility fee of 0.225 percent for the revolver and a rate of LIBOR plus 1.55 percent for the term loan.

“We have successfully extended the maturities of our line of credit and term loan, at slightly lower borrowing rates, which is indicative of the quality of our assets,” said Mr. Leopold.

In October, the company also exercised the final one-year extension option for the $150 million loan for The Mall at Green Hills (Nashville, Tenn.), extending the maturity date to December 1, 2020. Beginning December 1, 2019, the loan will bear interest at LIBOR plus 1.45 percent.

Starfield Hanam

In September, the company completed the sale of 50 percent of Taubman Asia’s interest in Starfield Hanam (Hanam, South Korea) to real estate funds managed by The Blackstone Group Inc. (Blackstone) for $300 million. The company now has a 17.15 percent ownership interest in the center. See Taubman Completes Sale of Interest in Starfield Haman to Blackstone -September 19, 2019. The company received net proceeds of about $240 million, following the allocation of property-level debt and transaction costs, which were used to pay down debt. During the quarter, the company recognized a gain on disposition of $139 million and a gain on remeasurement of $145 million.

In September, Blackstone also purchased the 14.7 percent interest in Starfield Hanam that was owned by the company’s institutional joint venture partner. Taubman recognized a $4 million promote fee (net of tax), as a result of the sale. This nonrecurring item has been excluded from Adjusted FFO.

Litigation Resolved at The Mall of San Juan

The ongoing litigation with Hudson’s Bay Company (HBC), regarding the former Saks Fifth Avenue location at The Mall of San Juan (San Juan, Puerto Rico) has been resolved. Accordingly, HBC agreed to pay the company $26 million as a partial reimbursement of their previously received anchor allowance, in exchange for the termination of their obligations under their agreements. Taubman now has full control of the location.

The allowance reimbursement and value of the former Saks Fifth Avenue building and improvements exceeded the write-off of the book value of the anchor allowance and legal costs incurred in the third quarter, resulting in a $10.1 million net gain, which was included in non-operating income.
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Taubman Centers/4

2019 Guidance

Taubman is updating certain key guidance measures for 2019.

EPS is now expected to be in the range of $4.00 to $4.15 per diluted share, revised from the previous range of $0.60 to $0.80 per diluted share, primarily due to gains recognized related to the Starfield Hanam transaction.

FFO is now expected to be in the range of $3.49 to $3.59 per diluted common share, revised from the previous range of $3.47 to $3.57 per diluted share.

Adjusted FFO guidance, which excludes $0.15 per diluted common share of year-to-date adjustments, remains unchanged and is expected to be in the range of $3.64 to $3.74 per diluted common share.

Comparable center NOI growth is now expected to be flat to 1 percent for the year, reduced from the previous guidance of about 2 percent. Lower NOI growth is expected primarily due to unfavorable foreign currency exchange rates (which have negatively impacted growth by 0.8 percent year-to-date) and elevated tenant bankruptcies, including Forever 21.

The company’s share of consolidated and unconsolidated interest expense is now expected to be $205 to $210 million, down from the previous range of $215 to $221 million. The company expects lower interest expense as a result of lower rates and a lower balance on its line of credit due to the paydown from the Starfield Hanam transaction proceeds.

The company’s share of lease cancellation income is now expected to be approximately $10 million, compared to our previous guidance of approximately $12 million.

All other key guidance measures remain unchanged. This guidance does not include the impact of the remaining Blackstone transactions. We anticipate these transactions will close around year-end 2019. The guidance also does not include an assumption for future costs associated with shareholder activism.

Supplemental Investor Information Available

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

•	Earnings Press Release	
		
•	Company Overview	
		
•	Operational Statistics	
		
•	Summary of Key Guidance Measures	
		
•	Income Statements	
		
•	Changes in Funds from Operations and Earnings Per Common Share	
		
•	Balance Sheets	

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Taubman Centers/5

•	Debt Summary	
		
•	Capital Spending and Certain Balance Sheet Information	
		
•	Owned Centers	
		
•	New Development, Acquisition and Partial Disposition of Interest	
		
•	Components of Rental Revenues	
		
•	Components of Other Income, Other Operating Expense, and Nonoperating Income, Net	
		
•	Earnings Reconciliations	
		
•	Glossary	

Investor Conference Call

Taubman will host a conference call at 10:00 a.m. EDT on Wednesday October 30, 2019 to discuss these results, business conditions and the outlook for the remainder of 2019. 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. 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,”, “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 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 and uncertainties, including that the conditions to one or more transaction closings may not be satisfied, the potential impact on the company due to the announcement of the disposition of ownership interests, the occurrence of any event, change or other circumstances that could give rise to the delay or termination of the transactions, general economic conditions, 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; challenges with department stores; changes in consumer shopping behavior; the liquidity of real estate investments; the company’s ability to comply with debt covenants;
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Taubman Centers/6

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; 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 the company’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 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.

CONTACTS:    
Erik Wright, Taubman, Manager, Investor Relations, 248-258-7390
ewright@taubman.com

Maria Mainville, Taubman, Director, Strategic Communications, 248-258-7469
mmainville@taubman.com

# # #

Taubman Centers/7

	
												
TAUBMAN CENTERS, INC.	 	 	 	 	 	 	 	
Table 1 - Income Statement	 	 	 	 	 	 	 	
For the Three Months Ended September 30, 2019 and 2018	 	 	 	 	 	 	 	
(in thousands of dollars)	 	 	 	 	 	 	 	
 	2019	 	2018	
 	CONSOLIDATED	 	UNCONSOLIDATED	 	CONSOLIDATED	 	UNCONSOLIDATED	
 	BUSINESSES	 	JOINT VENTURES (1)	 	BUSINESSES	 	JOINT VENTURES (1)	
REVENUES:	 	 	 	 	 	 	 	
Rental revenues (2)	141,213		 	138,960		 			 			
Minimum rents (2)			 			 	87,306		 	87,505		
Overage rents	3,865		 	6,736		 	3,263		 	7,086		
Expense recoveries (2)			 			 	52,096		 	44,587		
Management, leasing, and development services	1,927		 	 	 	860		 	 	
Other (2)	15,501		 	7,413		 	15,595		 	7,796		
Total revenues	162,506		 	153,109		 	159,120			146,974		
 	 	 	 	 	 	 	 	
EXPENSES:	 	 	 	 	 	 	 	
Maintenance, taxes, utilities, and promotion	40,786		 	45,274		 	38,149		 	41,375		
Other operating (2)	19,753		 	6,412		 	19,253		 	5,508		
Management, leasing, and development services	1,895		 	 	 	476		 	 	
General and administrative	9,632		 	 	 	8,530		 	 	
Restructuring charges	876		 	 	 			 	 	
Costs associated with shareholder activism	675		 	 	 	1,500		 	 	
Interest expense	37,695		 	35,398		 	33,396		 	33,199		
Depreciation and amortization	47,849		 	33,865		 	46,307		 	33,544		
Total expenses	159,161		 	120,949		 	147,611		 	113,626		
 	 	 	 	 	 	 	 	
Nonoperating income, net	11,108		 	5,657		 	8,700		 	563		
 	14,453		 	37,817		 	20,209		 	33,911		
Income tax (expense) benefit	(2,021	)	 	(2,266	)	 	996		 	(2,210	)	
 	 	 	 	 	 	 	 	
Equity in income of Unconsolidated Joint Ventures	20,252		 	 	 	16,910		 	 	
Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	138,696		 	 	 	 	 	 	
Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	145,010		 	 	 	 	 	 	
Net income	316,390		 	35,551		 	38,115		 	31,701		
Net income attributable to noncontrolling interests:	 	 	 	 	 	 	 	
Noncontrolling share of income of consolidated joint ventures	(958	)	 	 	 	(1,564	)	 	 	
Noncontrolling share of income of TRG	(93,690	)	 	 	 	(9,192	)	 	 	
Distributions to participating securities of TRG	(597	)	 	 	 	(599	)	 	 	
Preferred stock dividends	(5,784	)	 	 	 	(5,784	)	 	 	
Net income attributable to Taubman Centers, Inc. common shareholders	215,361		 	 	 	20,976		 	 	
 	 	 	 	 	 	 	 	
SUPPLEMENTAL INFORMATION:	 	 	 	 	 	 	 	
EBITDA - 100%	383,703		 	107,080		 	99,912		 	100,654		
EBITDA - outside partners' share	(5,623	)	 	(50,377	)	 	(6,510	)	 	(48,438	)	
Beneficial interest in EBITDA	378,080		 	56,703		 	93,402		 	52,216		
Gain on Saks settlement - The Mall of San Juan	(10,095	)	 	 	 	 	 	 	
Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	 	 	 	
Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	 	 	 	
Beneficial interest expense	(34,851	)	 	(17,798	)	 	(30,412	)	 	(17,093	)	
Beneficial income tax expense - TRG and TCO	(2,021	)	 	(991	)	 	1,047		 	(1,023	)	
Beneficial income tax expense - TCO			 	 	 	(113	)	 	 	
Non-real estate depreciation	(1,150	)	 	 	 	(1,138	)	 	 	
Preferred dividends and distributions	(5,784	)	 	 	 	(5,784	)	 	 	
Funds from Operations attributable to partnership unitholders and participating securities of TRG	40,473		 	37,914		 	57,002		 	34,100		
 	 	 	 	 	 	 	 	
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:	 	 	 	 	 	 	 	
Net straight-line adjustments to rental revenues, recoveries, and ground rent expense at TRG%	1,712		 	(422	)	 	727		 	445		
Country Club Plaza purchase accounting adjustments - rental revenues at TRG%	 	 	61		 	 	 	22		
The Mall at Green Hills purchase accounting adjustments - rental revenues	13		 	 	 	30		 	 	
The Gardens Mall purchase accounting adjustments - rental revenues at TRG%	 	 	(639	)	 	 	 	 	
The Gardens Mall purchase accounting adjustments - interest expense at TRG%	 	 	(528	)	 	 	 	 	
 	 	 	 	 	 	 	 	
(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 our ownership interest.	
(2) Upon adoption of ASC Topic 842, minimum rents and expense recoveries are now presented within a single revenue line item, Rental Revenues; the presentation of lease cancellation income has changed from Other income to Rental Revenues; the presentation of uncollectible tenant revenues has changed from Other Operating expense to Rental Revenues as a contra-revenue; and Other Operating expense includes certain indirect leasing costs, which were capitalizable under the previous lease accounting standard. As a result of the accounting change, an additional $1.3 million of leasing costs were expensed during the three months ended September 30, 2019. Comparative periods presented were not adjusted to reflect the change in accounting.	

Taubman Centers/8

	
												
TAUBMAN CENTERS, INC.	 	 	 	 	 	 	
Table 2 - Income Statement	 	 	 	 	 	 	
For the Nine Months Ended September 30, 2019 and 2018	 	 	 	 	 	 	
 (in thousands of dollars)	 	 	 	 	 	 	
 	2019	 	2018	
 	CONSOLIDATED BUSINESSES	 	 UNCONSOLIDATED JOINT VENTURES (1)	 	CONSOLIDATED BUSINESSES	 	 UNCONSOLIDATED JOINT VENTURES (1)	
REVENUES:	 	 	 	 	 	 	 	
Rental revenues (2)	432,508		 	410,613		 			 			
Minimum rents (2)			 			 	261,711		 	267,280		
Overage rents	8,719		 	18,279		 	7,453		 	18,756		
Expense recoveries (2)			 			 	154,177		 	133,983		
Management, leasing, and development services	4,035		 		 	2,480		 		
Other (2)	39,056		 	20,779		 	47,560		 	26,034		
Total revenues	484,318		 	449,671		 	473,381		 	446,053		
 	 	 	 	 	 	 	 	
EXPENSES:	 	 	 	 	 	 	 	
Maintenance, taxes, utilities, and promotion	118,506		 	132,413		 	113,871		 	125,510		
Other operating (2)	60,210		 	18,786		 	64,153		 	20,619		
Management, leasing, and development services	2,917		 		 	1,186		 		
General and administrative	26,762		 		 	25,545		 		
Restructuring charges	1,585		 	 	 	(423	)	 	 	
Costs associated with shareholder activism	16,675		 		 	10,000		 		
Interest expense	112,590		 	103,581		 	97,242		 	99,316		
Depreciation and amortization	137,064		 	103,177		 	124,325		 	100,962		
Total expenses	476,309		 	357,957		 	435,899		 	346,407		
 	 	 	 	 	 	 	 	
Nonoperating income, net	26,468		 	6,981		 	13,858		 	1,491		
 	34,477		 	98,695		 	51,340		 	101,137		
Income tax (expense) benefit	(4,924	)	 	(6,635	)	 	784		 	(5,474	)	
 	 	 	 	 	 	 	 	
Equity in income of Unconsolidated Joint Ventures	49,746		 	 	 	50,680		 	 	
Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	138,696		 	 	 	 	 	 	
Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	145,010		 	 	 	 	 	 	
Net income	363,005		 	92,060		 	102,804		 	95,663		
Net income attributable to noncontrolling interests:	 	 	 	 	 	 	 	
Noncontrolling share of income of consolidated joint ventures	(3,219	)	 	 	 	(4,388	)	 	 	
Noncontrolling share of income of TRG	(103,899	)	 	 	 	(24,393	)	 	 	
Distributions to participating securities of TRG	(1,817	)	 	 	 	(1,797	)	 	 	
Preferred stock dividends	(17,353	)	 	 	 	(17,353	)	 	 	
Net income attributable to Taubman Centers, Inc. common shareholders	236,717		 	 	 	54,873		 	 	
 	 	 	 	 	 	 	 	
SUPPLEMENTAL INFORMATION:	 	 	 	 	 	 	 	
EBITDA - 100%	567,837		 	305,453		 	272,907		 	301,415		
EBITDA - outside partners' share	(18,475	)	 	(146,640	)	 	(19,025	)	 	(145,671	)	
Beneficial interest in EBITDA	549,362		 	158,813		 	253,882		 	155,744		
Gain on insurance recoveries - The Mall of San Juan	(1,418	)	 			 			 			
Gain on Saks settlement - The Mall of San Juan	(10,095	)	 	 	 	 	 	 	
Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	 	 	 	
Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	 	 	 	
Beneficial interest expense	(103,692	)	 	(52,579	)	 	(88,219	)	 	(51,107	)	
Beneficial income tax expense - TRG and TCO	(4,735	)	 	(2,680	)	 	918		 	(2,387	)	
Beneficial income tax expense - TCO		 		 	(110	)	 		
Non-real estate depreciation	(3,447	)	 		 	(3,402	)	 		
Preferred dividends and distributions	(17,353	)	 		 	(17,353	)	 		
Funds from Operations attributable to partnership unitholders and participating securities of TRG	124,916		 	103,554		 	145,716		 	102,250		
 	 	 	 	 	 	 	 	
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:	 	 	 	 	 	 	 	
Net straight-line adjustments to rental revenues, recoveries, and ground rent expense at TRG%	4,427		 	181		 	2,082		 	1,597		
Country Club Plaza purchase accounting adjustments - rental revenues at TRG%	 	 	257		 	 	 	1,409		
The Mall at Green Hills purchase accounting adjustments - rental revenues	61		 	 	 	88		 	 	
The Gardens Mall purchase accounting adjustments - rental revenues at TRG%	 	 	(816	)	 	 	 	 	
The Gardens Mall purchase accounting adjustments - interest expense at TRG%	 	 	(1,056	)	 	 	 	 	
 	 	 	 	 	 	 	 	
(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 our ownership interest.	
(2) Upon adoption of ASC Topic 842, minimum rents and expense recoveries are now presented within a single revenue line item, Rental Revenues; the presentation of lease cancellation income has changed from Other income to Rental Revenues; the presentation of uncollectible tenant revenues has changed from Other Operating expense to Rental Revenues as a contra-revenue; and Other Operating expense includes certain indirect leasing costs, which were capitalizable under the previous lease accounting standard. As a result of the accounting change, an additional $4.2 million of leasing costs were expensed during the nine months ended September 30, 2019. Comparative periods presented were not adjusted to reflect the change in accounting.	

Taubman Centers/9

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. 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 before interest, income taxes, and depreciation and amortization of our consolidated and unconsolidated businesses. Beneficial interest in EBITDA represents our share of the earnings 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 Net Operating Income 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. 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 Funds from Operations (FFO) as net income (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. For the three and nine months ended September 30, 2019 FFO and EBITDA were adjusted to exclude restructuring charges, a promote fee, net of tax recognized related to Starfield Hanam, and costs incurred associated with shareholder activism. For the three and nine months ended September 30, 2019, EBITDA was also adjusted to exclude a gain on Saks settlement at The Mall of San Juan, gain on partial disposition of ownership interest in Unconsolidated Joint Venture, and a gain on remeasurement of ownership interest in Unconsolidated Joint Venture. In addition, for the nine months ended September 30, 2019, FFO and EBITDA were adjusted to exclude the fluctuation in the fair value of equity securities and costs incurred related to the pending Blackstone transactions, and EBITDA was adjusted to exclude a gain on insurance recoveries for The Mall of San Juan. For the three and nine months ended September 30, 2018, FFO and EBITDA were adjusted to exclude costs incurred associated with shareholder activism and the fluctuation in the fair value of equity securities. For the nine months ended September 30, 2018, FFO and EBITDA were also adjusted to exclude a reduction of previously expensed restructuring charges and FFO was also adjusted to exclude a charge recognized in connection with the write-off of deferred financing costs related to the early payoff of our $475 million unsecured term loan.
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 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 Unconsolidated Joint Ventures. 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/10

	
																		
TAUBMAN CENTERS, INC.	 	 	 	 	 	 	 	 	 	 	 	
Table 3 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareholders to Funds From Operations and Adjusted Funds From Operations	
For the Three Months Ended September 30, 2019 and 2018	
(in thousands of dollars except as noted; may not add or recalculate due to rounding)	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	2019	 	2018	
 	 	 	Shares	 	Per Share	 	 	 	Shares	 	Per Share	
 	Dollars	 	/Units	 	/Unit	 	Dollars	 	/Units	 	/Unit	
Net income attributable to TCO common shareholders - basic	215,361		 	61,211,249		 	3.52		 	20,976		 	61,001,357		 	0.34		
Add distributions to participating securities of TRG	597		 	871,262		 		 			 			 		
Add impact of share-based compensation	915		 	162,903		 		 	31		 	294,710		 		
Net income attributable to TCO common shareholders - diluted	216,873		 	62,245,414		 	3.48		 	21,007		 	61,296,067		 	0.34		
Add depreciation of TCO's additional basis	1,617		 		 	0.03		 	1,617		 		 	0.03		
Less TCO's additional income tax benefit			 		 			 	(113	)	 		 	(0.00	)	
Net income attributable to TCO common shareholders,
excluding step-up depreciation and additional income tax benefit	218,490		 	62,245,414		 	3.51		 	22,511		 	61,296,067		 	0.37		
Add noncontrolling share of income of TRG	93,690		 	26,430,716		 		 	9,192		 	24,943,960		 		
Add distributions to participating securities of TRG			 			 		 	599		 	871,262		 		
Net income attributable to partnership unitholders
and participating securities of TRG	312,180		 	88,676,130		 	3.52		 	32,302		 	87,111,289		 	0.37		
Add (less) depreciation and amortization:	 	 	 	 	 	 	 	 	 	 	 	
Consolidated businesses at 100%	47,849		 		 	0.54		 	46,307		 		 	0.53		
Depreciation of TCO's additional basis	(1,617	)	 		 	(0.02	)	 	(1,617	)	 		 	(0.02	)	
Noncontrolling partners in consolidated joint ventures	(1,821	)	 		 	(0.02	)	 	(1,911	)	 		 	(0.02	)	
Share of Unconsolidated Joint Ventures	17,662		 		 	0.20		 	17,190		 		 	0.20		
Non-real estate depreciation	(1,150	)	 		 	(0.01	)	 	(1,138	)	 		 	(0.01	)	
Less gain on Saks settlement - The Mall of San Juan	(10,095	)	 	 	 	(0.11	)	 	 	 	 	 	 	
Less gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	(1.56	)	 	 	 	 	 	 	
Less gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	(1.64	)	 	 	 	 	 	 	
Less impact of share-based compensation	(915	)	 			 	(0.01	)	 	(31	)	 			 	(0.00	)	
Funds from Operations attributable to partnership unitholders
and participating securities of TRG	78,387		 	88,676,130		 	0.88		 	91,102		 	87,111,289		 	1.05		
TCO's average ownership percentage of TRG - basic (1)	69.8	%	 	 	 	 	 	71.0	%	 	 	 	 	
Funds from Operations attributable to TCO's common shareholders,
excluding additional income tax benefit (1)	54,747		 	 	 	0.88		 	64,661		 	 	 	1.05		
Add TCO's additional income tax benefit		 	 	 			 	113		 	 	 	0.00		
Funds from Operations attributable to TCO's common shareholders (1)	54,747		 	 	 	0.88		 	64,774		 	 	 	1.05		

Funds from Operations attributable to partnership unitholders
and participating securities of TRG	78,387		 	88,676,130		 	0.88		 	91,102		 	87,111,289		 	1.05		
Restructuring charges	876		 	 	 	0.01		 			 	 	 			
Promote fee, net of tax - Starfield Hanam (2)	(3,961	)	 	 	 	(0.04	)	 	 	 	 	 	 	
Costs associated with shareholder activism	675		 	 	 	0.01		 	1,500		 	 	 	0.02		
Fluctuation in fair value of equity securities	 	 	 	 			 	(4,987	)	 	 	 	(0.06	)	
Adjusted Funds from Operations attributable to partnership unitholders
and participating securities of TRG	75,977		 	88,676,130		 	0.86		 	87,615		 	87,111,289		 	1.01		
TCO's average ownership percentage of TRG - basic (3)	69.8	%	 	 	 	 	 	71.0	%	 	 	 	 	
Adjusted Funds from Operations attributable to TCO's common shareholders (3)	53,064		 	 	 	0.86		 	62,186		 	 	 	1.01		
 	 	 	 	 	 	 	 	 	 	 	 	
(1) 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%. For the three months ended September 30, 2018, Funds from Operations attributable to TCO's common shareholders was $63,909 using TCO's diluted average ownership percentage of TRG of 70.0%.	
(2) 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 of Unconsolidated Joint Ventures and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss).	
(3) 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%. For the three months ended September 30, 2018, Adjusted Funds from Operations attributable to TCO's common shareholders was $61,354 using TCO's diluted average ownership percentage of TRG of 70.0%.	

Taubman Centers/11

	
																		
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 Nine Months Ended September 30, 2019 and 2018	
(in thousands of dollars except as noted; may not add or recalculate due to rounding)	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	2019	 	2018	
 	 	 	Shares	 	Per Share	 	 	 	Shares	 	Per Share	
 	Dollars	 	/Units	 	/Unit	 	Dollars	 	/Units	 	/Unit	
Net income attributable to TCO common shareowners - basic	236,717		 	61,169,279		 	3.87		 	54,873		 	60,970,572		 	0.90		
Add distributions to participating securities of TRG	1,817		 	871,262		 		 			 			 		
Add impact of share-based compensation	689		 	191,955		 		 	77		 	274,729		 		
Net income attributable to TCO common shareowners - diluted	239,223		 	62,232,496		 	3.84		 	54,950		 	61,245,301		 	0.90		
Add depreciation of TCO's additional basis	4,851		 		 	0.08		 	4,851		 		 	0.08		
Less TCO's additional income tax benefit			 		 			 	(110	)	 		 	(0.00	)	
Net income attributable to TCO common shareholders,
excluding step-up depreciation and additional income tax benefit	244,074		 	62,232,496		 	3.92		 	59,691		 	61,245,301		 	0.97		
Add noncontrolling share of income of TRG	103,899		 	25,928,316		 			 	24,393		 	24,950,161		 			
Add distributions to participating securities of TRG			 			 		 	1,797		 	871,262		 		
Net income attributable to partnership unitholders
and participating securities of TRG	347,973		 	88,160,812		 	3.95		 	85,881		 	87,066,724		 	0.98		
Add (less) depreciation and amortization:	 	 	 	 	 	 	 	 	 	 	 	
Consolidated businesses at 100%	137,064		 		 	1.55		 	124,325		 		 	1.43		
Depreciation of TCO's additional basis	(4,851	)	 		 	(0.06	)	 	(4,851	)	 		 	(0.06	)	
Noncontrolling partners in consolidated joint ventures	(6,169	)	 		 	(0.07	)	 	(5,480	)	 		 	(0.06	)	
Share of Unconsolidated Joint Ventures	53,808		 		 	0.61		 	51,570		 		 	0.59		
Non-real estate depreciation	(3,447	)	 		 	(0.04	)	 	(3,402	)	 		 	(0.04	)	
Less gain on insurance recoveries - The Mall of San Juan	(1,418	)	 	 	 	(0.02	)	 	 	 	 	 	 	
Less gain on Saks settlement - The Mall of San Juan	(10,095	)	 	 	 	(0.11	)	 	 	 	 	 	 	
Less gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	(1.57	)	 	 	 	 	 	 	
Less gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	(1.64	)	 	 	 	 	 	 	
Less impact of share-based compensation	(689	)	 		 	(0.01	)	 	(77	)	 		 	(0.00	)	
Funds from Operations attributable to partnership unitholders
and participating securities of TRG	228,470		 	88,160,812		 	2.59		 	247,966		 	87,066,724		 	2.85		
TCO's average ownership percentage of TRG - basic (1)	70.2	%	 	 	 	 	 	71.0	%	 	 	 	 	
Funds from Operations attributable to TCO's common shareholders,
excluding additional income tax benefit (1)	160,544		 	 	 	2.59		 	175,960		 		 	2.85		
Add TCO's additional income tax benefit			 	 	 			 	110		 		 	0.00		
Funds from Operations attributable to TCO's common shareowners (1)	160,544		 	 	 	2.59		 	176,072		 	 	 	2.85		

Funds from Operations attributable to partnership unitholders
and participating securities of TRG	228,470		 	88,160,812		 	2.59		 	247,966		 	87,066,724		 	2.85		
Restructuring charges	1,585		 	 	 	0.02		 	(423	)	 	 	 	(0.00	)	
Costs related to pending Blackstone transactions (2)	2,066		 	 	 	0.02		 	 	 	 	 	 	
Promote fee, net of tax - Starfield Hanam (3)	(3,961	)	 	 	 	(0.04	)	 	 	 	 	 	 	
Costs associated with shareholder activism	16,675		 	 	 	0.19		 	10,000		 	 	 	0.11		
Fluctuation in fair value of equity securities	(3,346	)	 	 	 	(0.04	)	 	(4,073	)	 	 	 	(0.05	)	
Write-off of deferred financing costs		 	 	 	 	 	382		 	 	 	0.00		
Adjusted Funds from Operations attributable to partnership unitholders
and participating securities of TRG	241,489		 	88,160,812		 	2.74		 	253,852		 	87,066,724		 	2.92		
TCO's average ownership percentage of TRG - basic (4)	70.2	%	 	 	 	 	 	71.0	%	 	 	 	 	
Adjusted Funds from Operations attributable to TCO's common shareowners (4)	169,648		 		 	2.74		 	180,135		 		 	2.92		
 	 	 	 	 	 	 	 	 	 	 	 	
(1) 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%. For the nine months ended September 30, 2018, Funds from Operations attributable to TCO's common shareholders was $173,756 using TCO's diluted average ownership percentage of TRG of 70.0%.	
(2) Includes $0.5 million of disposition costs and $1.6 million of income tax expense related to the pending Blackstone transactions, which have been recorded within Nonoperating Income, Net and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss).	
(3) 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 of Unconsolidated Joint Ventures and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss).	
(4) 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%. For the nine months ended September 30, 2018, Adjusted Funds from Operations attributable to TCO's common shareholders was $177,761 using TCO's diluted average ownership percentage of TRG of 70.0%.	

Taubman Centers/12

	
															
TAUBMAN CENTERS, INC.	 	 	 	 	 	 	 	 	
Table 5 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA	 	 	 	 	
For the Periods Ended September 30, 2019 and 2018	 	 	 	 	
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Three Months Ended	 	Year to Date	
 	 	 	 	2019	 	2018	 	2019	 	2018	
Net income	 	316,390		 	38,115		 	363,005		 	102,804		
Add (less) depreciation and amortization:	 	 	 	 	 	 	 	 	
 	Consolidated businesses at 100%	 	47,849		 	46,307		 	137,064		 	124,325		
 	Noncontrolling partners in consolidated joint ventures	 	(1,821	)	 	(1,911	)	 	(6,169	)	 	(5,480	)	
 	Share of Unconsolidated Joint Ventures	 	17,662		 	17,190		 	53,808		 	51,570		
Add (less) interest expense and income tax expense:	 	 	 	 	 	 	 	 	
 	Interest expense:	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	 	37,695		 	33,396		 	112,590		 	97,242		
 	 	Noncontrolling partners in consolidated joint ventures	 	(2,844	)	 	(2,984	)	 	(8,898	)	 	(9,023	)	
 	 	Share of Unconsolidated Joint Ventures	 	17,798		 	17,093		 	52,579		 	51,107		
 	Income tax expense:	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	 	2,021		 	(996	)	 	4,924		 	(784	)	
 	 	Noncontrolling partners in consolidated joint ventures	 	—		 	(51	)	 	(189	)	 	(134	)	
 	 	Share of Unconsolidated Joint Ventures	 	991		 	1,023		 	2,680		 	2,387		
Less noncontrolling share of income of consolidated joint ventures	 	(958	)	 	(1,564	)	 	(3,219	)	 	(4,388	)	
Beneficial interest in EBITDA	 	434,783		 	145,618		 	708,175		 	409,626		
TCO's average ownership percentage of TRG - basic	 	69.8	%	 	71.0	%	 	70.2	%	 	71.0	%	
Beneficial interest in EBITDA attributable to TCO	 	303,663		 	103,355		 	496,283		 	290,679		

Beneficial interest in EBITDA	 	434,783		 	145,618		 	708,175		 	409,626		
Add (less):	 	 	 	 	 	 	 	 	
 	Restructuring charges	 	876		 		 	1,585		 	(423	)	
 	Disposition costs related to pending Blackstone transactions	 		 		 	487		 		
 	Costs associated with shareholder activism	 	675		 	1,500		 	16,675		 	10,000		
 	Gain on insurance recoveries - The Mall of San Juan	 		 		 	(1,418	)	 		
 	Promote fee - Starfield Hanam	 	(4,820	)	 	 	 	(4,820	)	 	 	
 	Gain on Saks settlement - The Mall of San Juan	 	(10,095	)	 	 	 	(10,095	)	 	 	
 	Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	 	(138,696	)	 	 	 	(138,696	)	 	 	
 	Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	 	(145,010	)	 	 	 	(145,010	)	 	 	
 	Fluctuation in fair value of equity securities	 	 	 	(4,987	)	 	(3,346	)	 	(4,073	)	
Adjusted Beneficial interest in EBITDA	 	137,713		 	142,131		 	423,537		 	415,130		
TCO's average ownership percentage of TRG - basic	 	69.8	%	 	71.0	%	 	70.2	%	 	71.0	%	
Adjusted Beneficial interest in EBITDA attributable to TCO	 	96,182		 	100,880		 	297,496		 	294,580		

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TAUBMAN CENTERS, INC.	 	 	 	 	 	 	 	 	
Table 6 - Reconciliation of Net Income to Net Operating Income (NOI)	 	 	 	 	 	
For the Three Months Ended September 30, 2019, 2018, and 2017	 	 	 	 	 	
(in thousands of dollars)	 	 	 	 	 	 	 	 	
 	 	 	Three Months Ended	 	Three Months Ended	 	
 	 	 	2019	 	2018	 	2018	 	2017	 	
Net income	316,390		 	38,115		 	38,115		 	14,251		 	
Add (less) depreciation and amortization:	 	 	 	 	 	 	 	 	
 	Consolidated businesses at 100%	47,849		 	46,307		 	46,307		 	45,805		 	
 	Noncontrolling partners in consolidated joint ventures	(1,821	)	 	(1,911	)	 	(1,911	)	 	(1,969	)	 	
 	Share of Unconsolidated Joint Ventures	17,662		 	17,190		 	17,190		 	16,646		 	
Add (less) interest expense and income tax expense (benefit):	 	 	 	 	 	 	 	 	
 	Interest expense:	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	37,695		 	33,396		 	33,396		 	27,782		 	
 	 	Noncontrolling partners in consolidated joint ventures	(2,844	)	 	(2,984	)	 	(2,984	)	 	(2,966	)	 	
 	 	Share of Unconsolidated Joint Ventures	17,798		 	17,093		 	17,093		 	16,574		 	
 	Income tax expense (benefit):	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	2,021		 	(996	)	 	(996	)	 	54		 	
 	 	Noncontrolling partners in consolidated joint ventures	—		 	(51	)	 	(51	)	 	(13	)	 	
 	 	Share of Unconsolidated Joint Ventures	991		 	1,023		 	1,023		 	120		 	
Less noncontrolling share of income of consolidated joint ventures	(958	)	 	(1,564	)	 	(1,564	)	 	(1,230	)	 	
Add EBITDA attributable to outside partners:	 	 	 	 	 	 	 	 	
 	EBITDA attributable to noncontrolling partners in consolidated joint ventures	5,623		 	6,510		 	6,510		 	6,178		 	
 	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	50,377		 	48,438		 	48,438		 	42,361		 	
EBITDA at 100%	490,783		 	200,566		 	200,566		 	163,593		 	
Add (less) items excluded from shopping center NOI:	 	 	 	 	 	 	 	 	
 	General and administrative expenses	9,632		 	8,530		 	8,530		 	9,482		 	
 	Management, leasing, and development services, net	(32	)	 	(384	)	 	(384	)	 	(623	)	 	
 	Restructuring charges	876		 			 			 	1,751		 	
 	Costs associated with shareholder activism	675		 	1,500		 	1,500		 	3,500		 	
 	Straight-line of rents	(809	)	 	(2,292	)	 	(2,292	)	 	(2,393	)	 	
 	Nonoperating income, net	(16,765	)	 	(9,263	)	 	(9,263	)	 	(2,834	)	 	
 	Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	 	 	 	 	
 	Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	 	 	 	 	
 	Unallocated operating expenses and other (1)	6,749		 	8,131		 	8,131		 	10,437		 	
NOI at 100% - total portfolio	207,403		 	206,788		 	206,788		 	182,913		 	
Less NOI of non-comparable centers	(18,731	)	(2)	(13,187	)	(3)	(17,661	)	(4)	(11,376	)	(4)	
NOI at 100% - comparable centers	188,672		 	193,601		 	189,127		 	171,537		 	
NOI at 100% - comparable centers growth %	(2.5	)%	 	 	 	10.3	%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
NOI at 100% - comparable centers	188,672		 	193,601		 	189,127		 	171,537		 	
Less lease cancellation income - comparable centers	(1,045	)	 	(3,041	)	 	(3,041	)	 	(1,202	)	 	
NOI at 100% - comparable centers excluding lease cancellation income	187,627		 	190,560		 	186,086		 	170,335		 	
NOI at 100% - comparable centers excluding lease cancellation income growth %	(1.5	)%	 	 	 	9.2	%	 	 	 	
 	 	 	 	 	 	 	 	 	
NOI at 100% - comparable centers excluding lease cancellation income	187,627		 	190,560		 	186,086		 	170,335		 	
Foreign currency exchange rate fluctuation adjustment	1,202		 	 	 	(72	)	 	 	 	
NOI at 100% - comparable centers excluding lease cancellation income using constant currency exchange rates	188,829		 	190,560		 	186,014		 	170,335		 	
NOI at 100% - comparable centers excluding lease cancellation income using constant currency exchange rates growth %	(0.9	)%	 	 	 	9.2	%	 	 	 	
 	 	 	 	 	 	 	 	 	
NOI at 100% - total portfolio	207,403		 	206,788		 	206,788		 	182,913		 	
Less lease cancellation income - total portfolio	(2,407	)	 	(3,822	)	 	(3,822	)	 	(1,234	)	 	
Less NOI attributable to noncontrolling partners in consolidated joint ventures and outside partners in Unconsolidated Joint Ventures excluding lease cancellation income - total portfolio	(56,393	)	 	(55,345	)	 	(55,345	)	 	(48,999	)	 	
Beneficial interest in NOI - total portfolio excluding lease cancellation income	148,603		 	147,621		 	147,621		 	132,680		 	
Beneficial interest in NOI - total portfolio excluding lease cancellation income growth %	0.7	 %	 	 	 	11.3	%	 	 	 	
 	 	
(1	)	Upon adoption of ASC Topic 842, Other Operating expense includes certain indirect leasing costs, which were capitalizable under the previous lease accounting standard. As a result of the accounting change, an additional $1.3 million of leasing costs were expensed during the three months ended September 30, 2019. Comparative periods presented were not adjusted to reflect the change in accounting.	
(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.	
(4	)	Includes Beverly Center, CityOn.Zhengzhou, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield.	

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TAUBMAN CENTERS, INC.	 	 	 	 	 	 	 	 	
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)	 	 	 	 	 	 	 	 	
For the Nine Months Ended September 30, 2019, 2018, and 2017	 	 	 	 	 	 	 	 	
(in thousands of dollars)	 	 	 	 	 	 	 	 	
 	 	 	Year to Date	 	Year to Date	 	
 	 	 	2019	 	2018	 	2018	 	2017	 	
Net income	363,005		 	102,804		 	102,804		 	74,673		 	
Add (less) depreciation and amortization:	 	 	 	 	 	 	 	 	
 	Consolidated businesses at 100%	137,064		 	124,325		 	124,325		 	122,958		 	
 	Noncontrolling partners in consolidated joint ventures	(6,169	)	 	(5,480	)	 	(5,480	)	 	(5,576	)	 	
 	Share of Unconsolidated Joint Ventures	53,808		 	51,570		 	51,570		 	49,819		 	
Add (less) interest expense and income tax expense (benefit):	 	 	 	 	 	 	 	 	
 	Interest expense:	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	112,590		 	97,242		 	97,242		 	80,074		 	
 	 	Noncontrolling partners in consolidated joint ventures	(8,898	)	 	(9,023	)	 	(9,023	)	 	(8,938	)	 	
 	 	Share of Unconsolidated Joint Ventures	52,579		 	51,107		 	51,107		 	50,204		 	
 	Income tax expense (benefit):	 	 	 	 	 	 	 	 	
 	 	Consolidated businesses at 100%	4,924		 	(784	)	 	(784	)	 	375		 	
 	 	Noncontrolling partners in consolidated joint ventures	(189	)	 	(134	)	 	(134	)	 	(87	)	 	
 	 	Share of Unconsolidated Joint Ventures	2,680		 	2,387		 	2,387		 	2,271		 	
 	 	Share of income tax expense on disposition	 	 	 	 			 	731		 	
Less noncontrolling share of income of consolidated joint ventures	(3,219	)	 	(4,388	)	 	(4,388	)	 	(4,279	)	 	
Add EBITDA attributable to outside partners:	 	 	 	 	 	 	 	 	
 	EBITDA attributable to noncontrolling partners in consolidated joint ventures	18,475		 	19,025		 	19,025		 	18,880		 	
 	EBITDA attributable to outside partners in Unconsolidated Joint Ventures	146,640		 	145,671		 	145,671		 	135,265		 	
EBITDA at 100%	873,290		 	574,322		 	574,322		 	516,370		 	
Add (less) items excluded from shopping center NOI:	 	 	 	 	 	 	 	 	
 	General and administrative expenses	26,762		 	25,545		 	25,545		 	29,649		 	
 	Management, leasing, and development services, net	(1,118	)	 	(1,294	)	 	(1,294	)	 	(1,741	)	 	
 	Restructuring charges	1,585		 	(423	)	 	(423	)	 	4,063		 	
 	Costs associated with shareholder activism	16,675		 	10,000		 	10,000		 	12,000		 	
 	Straight-line of rents	(5,993	)	 	(9,706	)	 	(9,706	)	 	(7,118	)	 	
 	Nonoperating income, net	(33,449	)	 	(15,349	)	 	(15,349	)	 	(10,898	)	 	
 	Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	(138,696	)	 	 	 	 	 	 	 	
 	Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	(145,010	)	 	 	 	 	 	 	 	
 	Gain on disposition			 	 	 			 	(4,445	)	 	
 	Unallocated operating expenses and other (1)	22,871		 	24,654		 	24,654		 	26,813		 	
NOI at 100% - total portfolio	616,917		 	607,749		 	607,749		 	564,693		 	
Less NOI of non-comparable centers	(48,662	)	(2)	(32,015	)	(3)	(44,263	)	(4)	(38,101	)	(4)	
NOI at 100% - comparable centers	568,255		 	575,734		 	563,486		 	526,592		 	
NOI at 100% - comparable centers growth %	(1.3	)%	 	 	 	7.0	%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
NOI at 100% - comparable centers	568,255		 	575,734		 	563,486		 	526,592		 	
Less lease cancellation income - comparable centers	(7,480	)	 	(16,785	)	 	(16,785	)	 	(9,948	)	 	
NOI at 100% - comparable centers excluding lease cancellation income	560,775		 	558,949		 	546,701		 	516,644		 	
NOI at 100% - comparable centers excluding lease cancellation income growth %	0.3	 %	 	 	 	5.8	%	 	 	 	
 	 	 	 	 	 	 	 	 	
NOI at 100% - comparable centers excluding lease cancellation income	560,775		 	558,949		 	546,701		 	516,644		 	
Foreign currency exchange rate fluctuation adjustment	4,572		 	 	 	(2,972	)	 	 	 	
NOI at 100% - comparable centers excluding lease cancellation income using constant currency exchange rates	565,347		 	558,949		 	543,729		 	516,644		 	
NOI at 100% - comparable centers excluding lease cancellation income using constant currency exchange rates growth %	1.1	 %	 	 	 	5.2	%	 	 	 	
 	 	 	 	 	 	 	 	 	
NOI at 100% - total portfolio	616,917		 	607,749		 	607,749		 	564,693		 	
Less lease cancellation income - total portfolio	(10,407	)	 	(19,667	)	 	(19,667	)	 	(11,833	)	 	
Less NOI attributable to noncontrolling partners in consolidated joint ventures and outside partners in Unconsolidated Joint Ventures excluding lease cancellation income - total portfolio	(165,307	)	 	(162,184	)	 	(162,184	)	 	(150,804	)	 	
Beneficial interest in NOI - total portfolio excluding lease cancellation income	441,203		 	425,898		 	425,898		 	402,056		 	
Beneficial interest in NOI - total portfolio excluding lease cancellation income growth %	3.6	 %	 	 	 	5.9	%	 	 	 	
 	 	 	 	 	 	 	 	 	
(1	)	Upon adoption of ASC Topic 842, Other Operating expense includes certain indirect leasing costs, which were capitalizable under the previous lease accounting standard. As a result of the accounting change, an additional $4.2 million of leasing costs were expensed during the nine months ended September 30, 2019. Comparative periods presented were not adjusted to reflect the change in accounting.	
(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.	
(4	)	Includes Beverly Center, CityOn.Zhengzhou, The Mall of San Juan, and Taubman Prestige Outlets Chesterfield.	

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TAUBMAN CENTERS, INC.	
Table 8 - 2019 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, 2019 (1)	
 	 	 	 	 	
Adjusted Funds from Operations per common share	3.64		 	3.74		
Restructuring charges	(0.020	)	 	(0.020	)	
Costs related to pending Blackstone transactions (2)	(0.025	)	 	(0.025	)	
Promote fee, net of tax - Starfield Hanam (3)	0.045		 	0.045		
Costs associated with shareholder activism	(0.190	)	 	(0.190	)	
Fluctuation in fair value of equity securities	0.040		 	0.040		
Funds from Operations per common share	$	3.49		 	$	3.59		
Gain on insurance recoveries - The Mall of San Juan	0.02		 	0.02		
Gain on partial disposition of ownership interest in Unconsolidated Joint Venture	1.57		 	1.57		
Gain on remeasurement of ownership interest in Unconsolidated Joint Venture	1.64		 	1.64		
Gain on Saks settlement - The Mall of San Juan	0.11		 	0.11		
Real estate depreciation - TRG	(2.70	)	 	(2.65	)	
Distributions to participating securities of TRG	(0.03	)	 	(0.03	)	
Depreciation of TCO's additional basis in TRG	(0.10	)	 	(0.10	)	
Net income attributable to common shareholders, per common share (EPS)	$	4.00		 	$	4.15		
 	 	 	 	 	
(1) Guidance is current as of October 30, 2019, see "Taubman Centers, Inc. Issues Third Quarter Results." On February 14, 2019, we announced agreements to sell 50 percent of our ownership interests in Starfield Hanam, CityOn.Xi’an, and CityOn.Zhengzhou to funds managed by The Blackstone Group L.P.(Blackstone). In September 2019, we completed the sale of 50% of our interest in Starfield Hanam, with the impacts of the transaction reflected in 2019 annual guidance measures above. The CityOn.Xi'an and CityOn.Zhengzhou transactions are expected to close around year-end 2019 subject to customary closing conditions; but have been excluded from 2019 annual guidance measures above. The adjustments for the restructuring charges, costs incurred associated with shareholder activism, costs related to pending Blackstone transactions, promote fee, net of tax, and the fluctuation in fair value of equity securities represent actual amounts recognized through the third quarter of 2019, but does not include future assumptions of amounts to be incurred during the remainder of 2019.	
(2) Includes $0.5 million of disposition costs and $1.6 million of income tax expense related to the pending Blackstone transactions, which have been recorded within Nonoperating Income, Net and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss) during the nine months ended September 30, 2019.	
(3) 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 of Unconsolidated Joint Ventures and Income Tax Expense, respectively, in our Statement of Operations and Comprehensive Income (Loss).