|
|
|
|
|
|
|
|
|
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Federal current | $ | 1,092 | $ | 313 | $ | 1,848 | $ | 7,851 | |||||||
Federal deferred | 134 | (26 | ) | 29 | 1,139 | ||||||||||
Foreign current | (178 | ) | 399 | 588 | 980 | ||||||||||
Foreign deferred | (24 | ) | (180 | ) | (48 | ) | |||||||||
State current | (856 | ) | 1 | (601 | ) | 1,520 | |||||||||
State deferred | (21 | ) | (4 | ) | (11 | ) | (16 | ) | |||||||
Total income tax expense | $ | 147 | $ | 683 | $ | 1,673 | $ | 11,426 | |||||||
Less income tax (expense) benefit allocated to Gain on Dispositions (1) | 437 | 437 | (9,733 | ) | |||||||||||
Income tax expense as reported on the Consolidated Statement of Operations and Comprehensive Income | $ | 584 | $ | 683 | $ | 2,110 | $ | 1,693 |
(1) | Amount represents the income taxes incurred as part of the Company's sale of interests in International Plaza in January 2014. The tax on the sale is classified within Gain on Dispositions, Net of Tax on the Consolidated Statement of Operations and Comprehensive Income. During the three months ended September 30, 2015, an adjustment of $0.4 million was made to reduce the tax recognized as a result of the sale. |
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Federal | $ | 1,371 | $ | 1,382 | |||
Foreign | 1,847 | 1,806 | |||||
State | 994 | 471 | |||||
Total deferred tax assets | $ | 4,212 | $ | 3,659 | |||
Valuation allowances | (2,112 | ) | (1,703 | ) | |||
Net deferred tax assets | $ | 2,100 | $ | 1,956 | |||
Deferred tax liabilities: | |||||||
Federal | $ | 609 | $ | 592 | |||
Foreign | 476 | 473 | |||||
State | 109 | 89 | |||||
Total deferred tax liabilities | $ | 1,194 | $ | 1,154 |
|
Shopping Center | Ownership as of September 30, 2015 and December 31, 2014 | |
CityOn.Xi'an (under construction) | Note 2 | |
CityOn.Zhengzhou (under construction) | Note 2 | |
Fair Oaks | 50% | |
Hanam Union Square (under construction) | Note 2 | |
International Plaza | 50.1 | |
The Mall at Millenia | 50 | |
Stamford Town Center | 50 | |
Sunvalley | 50 | |
The Mall at University Town Center | 50 | |
Waterside Shops | 50 | |
Westfarms | 79 |
September 30 2015 | December 31 2014 | ||||||
Assets: | |||||||
Properties | $ | 1,619,256 | $ | 1,580,926 | |||
Accumulated depreciation and amortization | (581,144 | ) | (548,646 | ) | |||
$ | 1,038,112 | $ | 1,032,280 | ||||
Cash and cash equivalents | 33,738 | 49,765 | |||||
Accounts and notes receivable, less allowance for doubtful accounts of $2,528 and $1,590 in 2015 and 2014 | 33,616 | 38,788 | |||||
Deferred charges and other assets | 38,462 | 33,200 | |||||
$ | 1,143,928 | $ | 1,154,033 | ||||
Liabilities and accumulated deficiency in assets: | |||||||
Notes payable (1) | $ | 2,004,712 | $ | 1,989,546 | |||
Accounts payable and other liabilities | 73,789 | 103,161 | |||||
TRG's accumulated deficiency in assets | (522,627 | ) | (525,759 | ) | |||
Unconsolidated Joint Venture Partners' accumulated deficiency in assets | (411,946 | ) | (412,915 | ) | |||
$ | 1,143,928 | $ | 1,154,033 | ||||
TRG's accumulated deficiency in assets (above) | $ | (522,627 | ) | $ | (525,759 | ) | |
TRG's investment in properties under construction (Note 2) | 289,372 | 232,091 | |||||
TRG basis adjustments, including elimination of intercompany profit | 129,511 | 132,058 | |||||
TCO's additional basis | 53,504 | 54,963 | |||||
Net investment in Unconsolidated Joint Ventures | $ | (50,240 | ) | $ | (106,647 | ) | |
Distributions in excess of investments in and net income of Unconsolidated Joint Ventures | 471,129 | 476,651 | |||||
Investment in Unconsolidated Joint Ventures | $ | 420,889 | $ | 370,004 |
(1) | As the balances presented exclude those of centers under development, the Notes Payable amount excludes the construction loan outstanding for Hanam Union Square of $52.1 million ($17.9 million at TRG's share) at September 30, 2015. See Note 5 regarding this loan. |
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | $ | 91,000 | $ | 80,671 | $ | 271,332 | $ | 238,190 | |||||||
Maintenance, taxes, utilities, promotion, and other operating expenses | $ | 28,922 | $ | 25,040 | $ | 85,203 | $ | 75,486 | |||||||
Interest expense | 21,390 | 18,518 | 63,937 | 55,065 | |||||||||||
Depreciation and amortization | 13,899 | 11,417 | 40,305 | 32,613 | |||||||||||
Total operating costs | $ | 64,211 | $ | 54,975 | $ | 189,445 | $ | 163,164 | |||||||
Nonoperating income (expense) | (1 | ) | (22 | ) | 4 | (25 | ) | ||||||||
Net income | $ | 26,788 | $ | 25,674 | $ | 81,891 | $ | 75,001 | |||||||
Net income attributable to TRG | $ | 14,636 | $ | 14,258 | $ | 45,124 | $ | 41,319 | |||||||
Realized intercompany profit, net of depreciation on TRG’s basis adjustments | 1,071 | 707 | 2,634 | 1,363 | |||||||||||
Depreciation of TCO's additional basis | (488 | ) | (486 | ) | (1,460 | ) | (1,460 | ) | |||||||
Equity in income of Unconsolidated Joint Ventures | $ | 15,219 | $ | 14,479 | $ | 46,298 | $ | 41,222 | |||||||
Beneficial interest in Unconsolidated Joint Ventures’ operations: | |||||||||||||||
Revenues less maintenance, taxes, utilities, promotion, and other operating expenses | $ | 35,308 | $ | 31,762 | $ | 105,725 | $ | 92,336 | |||||||
Interest expense | (11,431 | ) | (10,006 | ) | (34,199 | ) | (29,805 | ) | |||||||
Depreciation and amortization | (8,658 | ) | (7,277 | ) | (25,228 | ) | (21,309 | ) | |||||||
Equity in income of Unconsolidated Joint Ventures | $ | 15,219 | $ | 14,479 | $ | 46,298 | $ | 41,222 |
|
At 100% | At Beneficial Interest | ||||||||||||||
Consolidated Subsidiaries | Unconsolidated Joint Ventures | Consolidated Subsidiaries | Unconsolidated Joint Ventures | ||||||||||||
Debt as of: | |||||||||||||||
September 30, 2015 | $ | 2,594,073 | $ | 2,056,778 | $ | 2,439,329 | $ | 1,109,397 | |||||||
December 31, 2014 | 2,025,505 | 1,989,546 | 1,852,749 | 1,085,991 | |||||||||||
Capitalized interest: | |||||||||||||||
Nine Months Ended September 30, 2015 | $ | 24,569 | (1) | $ | 289 | $ | 23,693 | $ | 145 | ||||||
Nine Months Ended September 30, 2014 | 18,844 | (1) | 2,836 | 18,136 | 1,430 | ||||||||||
Interest expense: | |||||||||||||||
Nine Months Ended September 30, 2015 | $ | 44,451 | $ | 63,937 | $ | 39,357 | $ | 34,199 | |||||||
Nine Months Ended September 30, 2014 | 74,946 | 55,065 | 68,687 | 29,805 |
(1) | The Company capitalizes interest costs incurred in funding its equity contributions to development projects accounted for as Unconsolidated Joint Ventures. The capitalized interest cost is included in the Company's basis in its investment in Unconsolidated Joint Ventures. Such capitalized interest reduces interest expense in the Company's Consolidated Statement of Operations and Comprehensive Income and in the table above is included within Consolidated Subsidiaries. |
|
|
2015 | 2014 | ||||||
Non-redeemable noncontrolling interests: | |||||||
Noncontrolling interests in consolidated joint ventures | $ | (23,277 | ) | $ | (14,796 | ) | |
Noncontrolling interests in partnership equity of TRG | 32,529 | 116,376 | |||||
$ | 9,252 | $ | 101,580 |
2015 | 2014 | ||||||
Net income attributable to non-redeemable noncontrolling interests: | |||||||
Noncontrolling share of income of consolidated joint ventures | $ | 2,780 | $ | 2,643 | |||
Noncontrolling share of income of TRG | 13,151 | 14,057 | |||||
$ | 15,931 | $ | 16,700 |
2015 | 2014 | ||||||
Net income attributable to non-redeemable noncontrolling interests: | |||||||
Noncontrolling share of income of consolidated joint ventures | $ | 8,043 | $ | 8,013 | |||
Noncontrolling share of income of TRG | 35,815 | 170,922 | |||||
$ | 43,858 | $ | 178,935 |
2015 | 2014 | ||||||
Net income attributable to Taubman Centers, Inc. common shareowners | $ | 83,274 | $ | 424,151 | |||
Transfers from the noncontrolling interest: | |||||||
Increase in Taubman Centers, Inc.’s paid-in capital for adjustments of noncontrolling interest (1) | 68,993 | 54 | |||||
Net transfers from noncontrolling interests | 68,993 | 54 | |||||
Change from net income attributable to Taubman Centers, Inc. and transfers from noncontrolling interests | $ | 152,267 | $ | 424,205 |
(1) | In 2015 and 2014 adjustments of the noncontrolling interest were made as a result of changes in the Company's ownership of the Operating Partnership in connection with the Company's share-based compensation under employee and director benefit plans (Note 9), issuances of stock pursuant to the Continuing Offer (Note 10), and stock repurchases (Note 6). |
|
Instrument Type | Ownership | Notional Amount | Swap Rate | Credit Spread on Loan | Total Swapped Rate on Loan | Maturity Date | ||||||||||||
Consolidated Subsidiaries: | ||||||||||||||||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | $ | 200,000 | 1.64 | % | 1.35 | % | (1) | 2.99 | % | (1) | February 2019 | |||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | 175,000 | 1.65 | % | 1.35 | % | (1) | 3.00 | % | (1) | February 2019 | ||||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | 100,000 | 1.64 | % | 1.35 | % | (1) | 2.99 | % | (1) | February 2019 | ||||||
Receive variable (LIBOR) /pay-fixed swap (2) | 100 | % | 12,000 | 2.09 | % | 1.40 | % | 3.49 | % | March 2024 | ||||||||
Unconsolidated Joint Ventures: | ||||||||||||||||||
Receive variable (LIBOR) /pay-fixed swap (3) | 50 | % | 135,214 | 2.40 | % | 1.70 | % | 4.10 | % | April 2018 | ||||||||
Receive variable (LIBOR) /pay-fixed swap (3) | 50 | % | 135,214 | 2.40 | % | 1.70 | % | 4.10 | % | April 2018 | ||||||||
Receive variable (LIBOR) /pay-fixed swap (4) | 50.1 | % | 172,959 | 1.83 | % | 1.75 | % | 3.58 | % | December 2021 | ||||||||
Receive variable (LIBOR) USD/pay-fixed KRW cross-currency interest rate swap (5) | 34.3 | % | 52,065 USD / 60,500,000 KRW | 1.52 | % | 1.60 | % | 3.12 | % | September 2020 |
(1) | The hedged forecasted transaction for each of these swaps is the first previously unhedged one-month LIBOR-indexed interest payments accrued and made each month on a debt principal amount equal to the swap notional amount, regardless of the specific debt agreement from which they may flow. The Company is currently using these swaps to manage interest rate risk on the $475 million TRG Term Loan. The credit spread on this loan can also vary within a range of 1.35% to 1.90%, depending on the Company's leverage ratio at the measurement date. |
(2) | The notional amount on this swap is equal to the outstanding principal balance of the floating rate loan on the U.S. headquarters building. |
(3) | The notional amount on each of these swaps is equal to 50% of the outstanding principal balance of the loan on Fair Oaks. |
(4) | The notional amount on this swap is equal to the outstanding principal balance of the floating rate loan on International Plaza. |
(5) | In August 2015, in connection with the closing of the $52.1 million U.S. dollar loan for Hanam Union Square, the Company's joint venture with Shinsegae Group entered into a cross-currency interest rate swap to fix the interest rate on the loan and swap the related principal and interest payments from U.S. dollars to Korean Won in order to reduce the impact of fluctuations in interest rates and exchange rates on the cash flows of the joint venture. The currency swap exchange rate is 1,162.0. |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||
Three Months Ended September 30 | Three Months Ended September 30 | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Interest rate contracts – consolidated subsidiaries | $ | (5,108 | ) | $ | 3,692 | Interest Expense | $ | (1,825 | ) | $ | (1,810 | ) | |||||
Interest rate contracts – UJVs | (2,434 | ) | 1,266 | Equity in Income of UJVs | (1,128 | ) | (789 | ) | |||||||||
Cross-currency interest rate swap – UJV | (170 | ) | Equity in Income of UJVs | (131 | ) | ||||||||||||
Total derivatives in cash flow hedging relationships | $ | (7,712 | ) | $ | 4,958 | $ | (3,084 | ) | $ | (2,599 | ) |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||
Nine Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Interest rate contract – consolidated subsidiary (1) | Nonoperating Income (Expense) (1) | $ | (4,880 | ) | |||||||||||||
Interest rate contracts – consolidated subsidiaries (1) | $ | (6,900 | ) | $ | (4,043 | ) | Interest Expense (1) | $ | (5,412 | ) | (6,853 | ) | |||||
Interest rate contracts – UJVs | (2,352 | ) | 1,008 | Equity in Income of UJVs | (3,376 | ) | (2,340 | ) | |||||||||
Cross-currency interest rate swap – UJV | (170 | ) | Equity in Income of UJVs | (131 | ) | ||||||||||||
Total derivatives in cash flow hedging relationships | $ | (9,422 | ) | $ | (3,035 | ) | $ | (8,919 | ) | $ | (14,073 | ) |
Fair Value | |||||||||
Consolidated Balance Sheet Location | September 30 2015 | December 31 2014 | |||||||
Derivatives designated as hedging instruments: | |||||||||
Asset derivative: | |||||||||
Interest rate contract – UJV | Investment in UJVs | $ | 109 | ||||||
Total assets designated as hedging instruments | $ | — | $ | 109 | |||||
Liability derivatives: | |||||||||
Interest rate contracts – consolidated subsidiaries | Accounts Payable and Accrued Liabilities | $ | (11,439 | ) | $ | (4,044 | ) | ||
Interest rate contracts – UJVs | Investment in UJVs | (7,397 | ) | (5,154 | ) | ||||
Cross-currency interest rate swap – UJV | Investment in UJVs | (53 | ) | ||||||
Total liabilities designated as hedging instruments | $ | (18,889 | ) | $ | (9,198 | ) |
|
|
Fair Value Measurements as of September 30, 2015 Using | Fair Value Measurements as of December 31, 2014 Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||
Insurance deposit | $ | 14,359 | $ | 13,059 | ||||||||||||
Total assets | $ | 14,359 | $ | — | $ | 13,059 | $ | — | ||||||||
Derivative interest rate contracts (Note 8) | $ | (11,439 | ) | $ | (4,044 | ) | ||||||||||
Total liabilities | $ | (11,439 | ) | $ | (4,044 | ) |
2015 | 2014 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Notes payable | $ | 2,594,073 | $ | 2,587,905 | $ | 2,025,505 | $ | 2,056,474 |
|
Taubman Centers, Inc. AOCI | Noncontrolling Interests AOCI | ||||||||||||||||||||||
Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | ||||||||||||||||||
January 1, 2015 | $ | (101 | ) | $ | (14,967 | ) | $ | (15,068 | ) | $ | (41 | ) | $ | 5,879 | $ | 5,838 | |||||||
Other comprehensive income (loss) before reclassifications | (10,917 | ) | (12,953 | ) | (23,870 | ) | (4,541 | ) | (5,388 | ) | (9,929 | ) | |||||||||||
Amounts reclassified from AOCI | 6,299 | 6,299 | 2,620 | 2,620 | |||||||||||||||||||
Net current period other comprehensive income (loss) | $ | (10,917 | ) | $ | (6,654 | ) | $ | (17,571 | ) | $ | (4,541 | ) | $ | (2,768 | ) | $ | (7,309 | ) | |||||
Adjustments due to changes in ownership | 1 | (199 | ) | (198 | ) | (1 | ) | 199 | 198 | ||||||||||||||
September 30, 2015 | $ | (11,017 | ) | $ | (21,820 | ) | $ | (32,837 | ) | $ | (4,583 | ) | $ | 3,310 | $ | (1,273 | ) |
Taubman Centers, Inc. AOCI | Noncontrolling Interests AOCI | ||||||||||||||||||||||
Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | ||||||||||||||||||
January 1, 2014 | $ | 5,040 | $ | (13,954 | ) | $ | (8,914 | ) | $ | 2,011 | $ | 6,141 | $ | 8,152 | |||||||||
Other comprehensive income (loss) before reclassifications | (1,741 | ) | (8,478 | ) | (10,219 | ) | (691 | ) | (3,516 | ) | (4,207 | ) | |||||||||||
Amounts reclassified from AOCI | 9,846 | 9,846 | 4,227 | 4,227 | |||||||||||||||||||
Net current period other comprehensive income (loss) | $ | (1,741 | ) | $ | 1,368 | $ | (373 | ) | $ | (691 | ) | $ | 711 | $ | 20 | ||||||||
Adjustments due to changes in ownership | 7 | 22 | 29 | (7 | ) | (22 | ) | (29 | ) | ||||||||||||||
September 30, 2014 | $ | 3,306 | $ | (12,564 | ) | $ | (9,258 | ) | $ | 1,313 | $ | 6,830 | $ | 8,143 |
Details about AOCI Components | Amounts reclassified from AOCI | Affected line item in Consolidated Statement of Operations | ||||
Losses on interest rate instruments and other: | ||||||
Realized loss on interest rate contracts - consolidated subsidiaries | $ | 5,412 | Interest Expense | |||
Realized loss on interest rate contracts - UJVs | 3,376 | Equity in Income of UJVs | ||||
Realized loss on cross-currency interest rate contract - UJV | 131 | Equity in Income of UJVs | ||||
Total reclassifications for the period | $ | 8,919 |
Details about AOCI Components | Amounts reclassified from AOCI | Affected line item in Consolidated Statement of Operations | ||||
Losses on interest rate instruments and other: | ||||||
Discontinuation of hedge accounting - consolidated subsidiary | $ | 4,880 | Nonoperating Income (Expense) | |||
Realized loss on interest rate contracts - consolidated subsidiaries | 6,853 | Interest Expense | ||||
Realized loss on interest rate contracts - UJVs | 2,340 | Equity in Income of UJVs | ||||
Total reclassifications for the period | $ | 14,073 |
|
Nine Months Ended September 30 | |||||||
2015 | 2014 | ||||||
Recapitalization of The Mall of San Juan joint venture (Note 2) | $ | 9,296 | |||||
Receipt of Simon Property Group Limited Partnership units in connection with the sale of Arizona Mills (Note 2) | $ | 77,711 | |||||
Issuance of TRG partnership units in connection with the purchase of the U.S. headquarters building (Note 2) | 91 | ||||||
Assumption of debt in connection with the purchase of the U.S. headquarters building (Note 2) | 18,215 | ||||||
Other non-cash additions to properties | 75,880 | 53,018 |
|
|
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Federal current | $ | 1,092 | $ | 313 | $ | 1,848 | $ | 7,851 | |||||||
Federal deferred | 134 | (26 | ) | 29 | 1,139 | ||||||||||
Foreign current | (178 | ) | 399 | 588 | 980 | ||||||||||
Foreign deferred | (24 | ) | (180 | ) | (48 | ) | |||||||||
State current | (856 | ) | 1 | (601 | ) | 1,520 | |||||||||
State deferred | (21 | ) | (4 | ) | (11 | ) | (16 | ) | |||||||
Total income tax expense | $ | 147 | $ | 683 | $ | 1,673 | $ | 11,426 | |||||||
Less income tax (expense) benefit allocated to Gain on Dispositions (1) | 437 | 437 | (9,733 | ) | |||||||||||
Income tax expense as reported on the Consolidated Statement of Operations and Comprehensive Income | $ | 584 | $ | 683 | $ | 2,110 | $ | 1,693 |
(1) | Amount represents the income taxes incurred as part of the Company's sale of interests in International Plaza in January 2014. The tax on the sale is classified within Gain on Dispositions, Net of Tax on the Consolidated Statement of Operations and Comprehensive Income. During the three months ended September 30, 2015, an adjustment of $0.4 million was made to reduce the tax recognized as a result of the sale. |
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Federal | $ | 1,371 | $ | 1,382 | |||
Foreign | 1,847 | 1,806 | |||||
State | 994 | 471 | |||||
Total deferred tax assets | $ | 4,212 | $ | 3,659 | |||
Valuation allowances | (2,112 | ) | (1,703 | ) | |||
Net deferred tax assets | $ | 2,100 | $ | 1,956 | |||
Deferred tax liabilities: | |||||||
Federal | $ | 609 | $ | 592 | |||
Foreign | 476 | 473 | |||||
State | 109 | 89 | |||||
Total deferred tax liabilities | $ | 1,194 | $ | 1,154 |
|
Shopping Center | Ownership as of September 30, 2015 and December 31, 2014 | |
CityOn.Xi'an (under construction) | Note 2 | |
CityOn.Zhengzhou (under construction) | Note 2 | |
Fair Oaks | 50% | |
Hanam Union Square (under construction) | Note 2 | |
International Plaza | 50.1 | |
The Mall at Millenia | 50 | |
Stamford Town Center | 50 | |
Sunvalley | 50 | |
The Mall at University Town Center | 50 | |
Waterside Shops | 50 | |
Westfarms | 79 |
September 30 2015 | December 31 2014 | ||||||
Assets: | |||||||
Properties | $ | 1,619,256 | $ | 1,580,926 | |||
Accumulated depreciation and amortization | (581,144 | ) | (548,646 | ) | |||
$ | 1,038,112 | $ | 1,032,280 | ||||
Cash and cash equivalents | 33,738 | 49,765 | |||||
Accounts and notes receivable, less allowance for doubtful accounts of $2,528 and $1,590 in 2015 and 2014 | 33,616 | 38,788 | |||||
Deferred charges and other assets | 38,462 | 33,200 | |||||
$ | 1,143,928 | $ | 1,154,033 | ||||
Liabilities and accumulated deficiency in assets: | |||||||
Notes payable (1) | $ | 2,004,712 | $ | 1,989,546 | |||
Accounts payable and other liabilities | 73,789 | 103,161 | |||||
TRG's accumulated deficiency in assets | (522,627 | ) | (525,759 | ) | |||
Unconsolidated Joint Venture Partners' accumulated deficiency in assets | (411,946 | ) | (412,915 | ) | |||
$ | 1,143,928 | $ | 1,154,033 | ||||
TRG's accumulated deficiency in assets (above) | $ | (522,627 | ) | $ | (525,759 | ) | |
TRG's investment in properties under construction (Note 2) | 289,372 | 232,091 | |||||
TRG basis adjustments, including elimination of intercompany profit | 129,511 | 132,058 | |||||
TCO's additional basis | 53,504 | 54,963 | |||||
Net investment in Unconsolidated Joint Ventures | $ | (50,240 | ) | $ | (106,647 | ) | |
Distributions in excess of investments in and net income of Unconsolidated Joint Ventures | 471,129 | 476,651 | |||||
Investment in Unconsolidated Joint Ventures | $ | 420,889 | $ | 370,004 |
(1) | As the balances presented exclude those of centers under development, the Notes Payable amount excludes the construction loan outstanding for Hanam Union Square of $52.1 million ($17.9 million at TRG's share) at September 30, 2015. See Note 5 regarding this loan. |
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | $ | 91,000 | $ | 80,671 | $ | 271,332 | $ | 238,190 | |||||||
Maintenance, taxes, utilities, promotion, and other operating expenses | $ | 28,922 | $ | 25,040 | $ | 85,203 | $ | 75,486 | |||||||
Interest expense | 21,390 | 18,518 | 63,937 | 55,065 | |||||||||||
Depreciation and amortization | 13,899 | 11,417 | 40,305 | 32,613 | |||||||||||
Total operating costs | $ | 64,211 | $ | 54,975 | $ | 189,445 | $ | 163,164 | |||||||
Nonoperating income (expense) | (1 | ) | (22 | ) | 4 | (25 | ) | ||||||||
Net income | $ | 26,788 | $ | 25,674 | $ | 81,891 | $ | 75,001 | |||||||
Net income attributable to TRG | $ | 14,636 | $ | 14,258 | $ | 45,124 | $ | 41,319 | |||||||
Realized intercompany profit, net of depreciation on TRG’s basis adjustments | 1,071 | 707 | 2,634 | 1,363 | |||||||||||
Depreciation of TCO's additional basis | (488 | ) | (486 | ) | (1,460 | ) | (1,460 | ) | |||||||
Equity in income of Unconsolidated Joint Ventures | $ | 15,219 | $ | 14,479 | $ | 46,298 | $ | 41,222 | |||||||
Beneficial interest in Unconsolidated Joint Ventures’ operations: | |||||||||||||||
Revenues less maintenance, taxes, utilities, promotion, and other operating expenses | $ | 35,308 | $ | 31,762 | $ | 105,725 | $ | 92,336 | |||||||
Interest expense | (11,431 | ) | (10,006 | ) | (34,199 | ) | (29,805 | ) | |||||||
Depreciation and amortization | (8,658 | ) | (7,277 | ) | (25,228 | ) | (21,309 | ) | |||||||
Equity in income of Unconsolidated Joint Ventures | $ | 15,219 | $ | 14,479 | $ | 46,298 | $ | 41,222 |
|
At 100% | At Beneficial Interest | ||||||||||||||
Consolidated Subsidiaries | Unconsolidated Joint Ventures | Consolidated Subsidiaries | Unconsolidated Joint Ventures | ||||||||||||
Debt as of: | |||||||||||||||
September 30, 2015 | $ | 2,594,073 | $ | 2,056,778 | $ | 2,439,329 | $ | 1,109,397 | |||||||
December 31, 2014 | 2,025,505 | 1,989,546 | 1,852,749 | 1,085,991 | |||||||||||
Capitalized interest: | |||||||||||||||
Nine Months Ended September 30, 2015 | $ | 24,569 | (1) | $ | 289 | $ | 23,693 | $ | 145 | ||||||
Nine Months Ended September 30, 2014 | 18,844 | (1) | 2,836 | 18,136 | 1,430 | ||||||||||
Interest expense: | |||||||||||||||
Nine Months Ended September 30, 2015 | $ | 44,451 | $ | 63,937 | $ | 39,357 | $ | 34,199 | |||||||
Nine Months Ended September 30, 2014 | 74,946 | 55,065 | 68,687 | 29,805 |
(1) | The Company capitalizes interest costs incurred in funding its equity contributions to development projects accounted for as Unconsolidated Joint Ventures. The capitalized interest cost is included in the Company's basis in its investment in Unconsolidated Joint Ventures. Such capitalized interest reduces interest expense in the Company's Consolidated Statement of Operations and Comprehensive Income and in the table above is included within Consolidated Subsidiaries. |
|
2015 | 2014 | ||||||
Non-redeemable noncontrolling interests: | |||||||
Noncontrolling interests in consolidated joint ventures | $ | (23,277 | ) | $ | (14,796 | ) | |
Noncontrolling interests in partnership equity of TRG | 32,529 | 116,376 | |||||
$ | 9,252 | $ | 101,580 |
2015 | 2014 | ||||||
Net income attributable to non-redeemable noncontrolling interests: | |||||||
Noncontrolling share of income of consolidated joint ventures | $ | 2,780 | $ | 2,643 | |||
Noncontrolling share of income of TRG | 13,151 | 14,057 | |||||
$ | 15,931 | $ | 16,700 |
2015 | 2014 | ||||||
Net income attributable to non-redeemable noncontrolling interests: | |||||||
Noncontrolling share of income of consolidated joint ventures | $ | 8,043 | $ | 8,013 | |||
Noncontrolling share of income of TRG | 35,815 | 170,922 | |||||
$ | 43,858 | $ | 178,935 |
2015 | 2014 | ||||||
Net income attributable to Taubman Centers, Inc. common shareowners | $ | 83,274 | $ | 424,151 | |||
Transfers from the noncontrolling interest: | |||||||
Increase in Taubman Centers, Inc.’s paid-in capital for adjustments of noncontrolling interest (1) | 68,993 | 54 | |||||
Net transfers from noncontrolling interests | 68,993 | 54 | |||||
Change from net income attributable to Taubman Centers, Inc. and transfers from noncontrolling interests | $ | 152,267 | $ | 424,205 |
(1) | In 2015 and 2014 adjustments of the noncontrolling interest were made as a result of changes in the Company's ownership of the Operating Partnership in connection with the Company's share-based compensation under employee and director benefit plans (Note 9), issuances of stock pursuant to the Continuing Offer (Note 10), and stock repurchases (Note 6). |
|
Instrument Type | Ownership | Notional Amount | Swap Rate | Credit Spread on Loan | Total Swapped Rate on Loan | Maturity Date | ||||||||||||
Consolidated Subsidiaries: | ||||||||||||||||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | $ | 200,000 | 1.64 | % | 1.35 | % | (1) | 2.99 | % | (1) | February 2019 | |||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | 175,000 | 1.65 | % | 1.35 | % | (1) | 3.00 | % | (1) | February 2019 | ||||||
Receive variable (LIBOR) /pay-fixed swap (1) | 100 | % | 100,000 | 1.64 | % | 1.35 | % | (1) | 2.99 | % | (1) | February 2019 | ||||||
Receive variable (LIBOR) /pay-fixed swap (2) | 100 | % | 12,000 | 2.09 | % | 1.40 | % | 3.49 | % | March 2024 | ||||||||
Unconsolidated Joint Ventures: | ||||||||||||||||||
Receive variable (LIBOR) /pay-fixed swap (3) | 50 | % | 135,214 | 2.40 | % | 1.70 | % | 4.10 | % | April 2018 | ||||||||
Receive variable (LIBOR) /pay-fixed swap (3) | 50 | % | 135,214 | 2.40 | % | 1.70 | % | 4.10 | % | April 2018 | ||||||||
Receive variable (LIBOR) /pay-fixed swap (4) | 50.1 | % | 172,959 | 1.83 | % | 1.75 | % | 3.58 | % | December 2021 | ||||||||
Receive variable (LIBOR) USD/pay-fixed KRW cross-currency interest rate swap (5) | 34.3 | % | 52,065 USD / 60,500,000 KRW | 1.52 | % | 1.60 | % | 3.12 | % | September 2020 |
(1) | The hedged forecasted transaction for each of these swaps is the first previously unhedged one-month LIBOR-indexed interest payments accrued and made each month on a debt principal amount equal to the swap notional amount, regardless of the specific debt agreement from which they may flow. The Company is currently using these swaps to manage interest rate risk on the $475 million TRG Term Loan. The credit spread on this loan can also vary within a range of 1.35% to 1.90%, depending on the Company's leverage ratio at the measurement date. |
(2) | The notional amount on this swap is equal to the outstanding principal balance of the floating rate loan on the U.S. headquarters building. |
(3) | The notional amount on each of these swaps is equal to 50% of the outstanding principal balance of the loan on Fair Oaks. |
(4) | The notional amount on this swap is equal to the outstanding principal balance of the floating rate loan on International Plaza. |
(5) | In August 2015, in connection with the closing of the $52.1 million U.S. dollar loan for Hanam Union Square, the Company's joint venture with Shinsegae Group entered into a cross-currency interest rate swap to fix the interest rate on the loan and swap the related principal and interest payments from U.S. dollars to Korean Won in order to reduce the impact of fluctuations in interest rates and exchange rates on the cash flows of the joint venture. The currency swap exchange rate is 1,162.0. |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||
Three Months Ended September 30 | Three Months Ended September 30 | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Interest rate contracts – consolidated subsidiaries | $ | (5,108 | ) | $ | 3,692 | Interest Expense | $ | (1,825 | ) | $ | (1,810 | ) | |||||
Interest rate contracts – UJVs | (2,434 | ) | 1,266 | Equity in Income of UJVs | (1,128 | ) | (789 | ) | |||||||||
Cross-currency interest rate swap – UJV | (170 | ) | Equity in Income of UJVs | (131 | ) | ||||||||||||
Total derivatives in cash flow hedging relationships | $ | (7,712 | ) | $ | 4,958 | $ | (3,084 | ) | $ | (2,599 | ) |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||
Nine Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Interest rate contract – consolidated subsidiary (1) | Nonoperating Income (Expense) (1) | $ | (4,880 | ) | |||||||||||||
Interest rate contracts – consolidated subsidiaries (1) | $ | (6,900 | ) | $ | (4,043 | ) | Interest Expense (1) | $ | (5,412 | ) | (6,853 | ) | |||||
Interest rate contracts – UJVs | (2,352 | ) | 1,008 | Equity in Income of UJVs | (3,376 | ) | (2,340 | ) | |||||||||
Cross-currency interest rate swap – UJV | (170 | ) | Equity in Income of UJVs | (131 | ) | ||||||||||||
Total derivatives in cash flow hedging relationships | $ | (9,422 | ) | $ | (3,035 | ) | $ | (8,919 | ) | $ | (14,073 | ) |
Fair Value | |||||||||
Consolidated Balance Sheet Location | September 30 2015 | December 31 2014 | |||||||
Derivatives designated as hedging instruments: | |||||||||
Asset derivative: | |||||||||
Interest rate contract – UJV | Investment in UJVs | $ | 109 | ||||||
Total assets designated as hedging instruments | $ | — | $ | 109 | |||||
Liability derivatives: | |||||||||
Interest rate contracts – consolidated subsidiaries | Accounts Payable and Accrued Liabilities | $ | (11,439 | ) | $ | (4,044 | ) | ||
Interest rate contracts – UJVs | Investment in UJVs | (7,397 | ) | (5,154 | ) | ||||
Cross-currency interest rate swap – UJV | Investment in UJVs | (53 | ) | ||||||
Total liabilities designated as hedging instruments | $ | (18,889 | ) | $ | (9,198 | ) |
|
Fair Value Measurements as of September 30, 2015 Using | Fair Value Measurements as of December 31, 2014 Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||
Insurance deposit | $ | 14,359 | $ | 13,059 | ||||||||||||
Total assets | $ | 14,359 | $ | — | $ | 13,059 | $ | — | ||||||||
Derivative interest rate contracts (Note 8) | $ | (11,439 | ) | $ | (4,044 | ) | ||||||||||
Total liabilities | $ | (11,439 | ) | $ | (4,044 | ) |
2015 | 2014 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Notes payable | $ | 2,594,073 | $ | 2,587,905 | $ | 2,025,505 | $ | 2,056,474 |
|
Taubman Centers, Inc. AOCI | Noncontrolling Interests AOCI | ||||||||||||||||||||||
Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | ||||||||||||||||||
January 1, 2015 | $ | (101 | ) | $ | (14,967 | ) | $ | (15,068 | ) | $ | (41 | ) | $ | 5,879 | $ | 5,838 | |||||||
Other comprehensive income (loss) before reclassifications | (10,917 | ) | (12,953 | ) | (23,870 | ) | (4,541 | ) | (5,388 | ) | (9,929 | ) | |||||||||||
Amounts reclassified from AOCI | 6,299 | 6,299 | 2,620 | 2,620 | |||||||||||||||||||
Net current period other comprehensive income (loss) | $ | (10,917 | ) | $ | (6,654 | ) | $ | (17,571 | ) | $ | (4,541 | ) | $ | (2,768 | ) | $ | (7,309 | ) | |||||
Adjustments due to changes in ownership | 1 | (199 | ) | (198 | ) | (1 | ) | 199 | 198 | ||||||||||||||
September 30, 2015 | $ | (11,017 | ) | $ | (21,820 | ) | $ | (32,837 | ) | $ | (4,583 | ) | $ | 3,310 | $ | (1,273 | ) |
Taubman Centers, Inc. AOCI | Noncontrolling Interests AOCI | ||||||||||||||||||||||
Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | Cumulative translation adjustment | Unrealized gains (losses) on interest rate instruments and other | Total | ||||||||||||||||||
January 1, 2014 | $ | 5,040 | $ | (13,954 | ) | $ | (8,914 | ) | $ | 2,011 | $ | 6,141 | $ | 8,152 | |||||||||
Other comprehensive income (loss) before reclassifications | (1,741 | ) | (8,478 | ) | (10,219 | ) | (691 | ) | (3,516 | ) | (4,207 | ) | |||||||||||
Amounts reclassified from AOCI | 9,846 | 9,846 | 4,227 | 4,227 | |||||||||||||||||||
Net current period other comprehensive income (loss) | $ | (1,741 | ) | $ | 1,368 | $ | (373 | ) | $ | (691 | ) | $ | 711 | $ | 20 | ||||||||
Adjustments due to changes in ownership | 7 | 22 | 29 | (7 | ) | (22 | ) | (29 | ) | ||||||||||||||
September 30, 2014 | $ | 3,306 | $ | (12,564 | ) | $ | (9,258 | ) | $ | 1,313 | $ | 6,830 | $ | 8,143 |
Details about AOCI Components | Amounts reclassified from AOCI | Affected line item in Consolidated Statement of Operations | ||||
Losses on interest rate instruments and other: | ||||||
Realized loss on interest rate contracts - consolidated subsidiaries | $ | 5,412 | Interest Expense | |||
Realized loss on interest rate contracts - UJVs | 3,376 | Equity in Income of UJVs | ||||
Realized loss on cross-currency interest rate contract - UJV | 131 | Equity in Income of UJVs | ||||
Total reclassifications for the period | $ | 8,919 |
Details about AOCI Components | Amounts reclassified from AOCI | Affected line item in Consolidated Statement of Operations | ||||
Losses on interest rate instruments and other: | ||||||
Discontinuation of hedge accounting - consolidated subsidiary | $ | 4,880 | Nonoperating Income (Expense) | |||
Realized loss on interest rate contracts - consolidated subsidiaries | 6,853 | Interest Expense | ||||
Realized loss on interest rate contracts - UJVs | 2,340 | Equity in Income of UJVs | ||||
Total reclassifications for the period | $ | 14,073 |
|
Nine Months Ended September 30 | |||||||
2015 | 2014 | ||||||
Recapitalization of The Mall of San Juan joint venture (Note 2) | $ | 9,296 | |||||
Receipt of Simon Property Group Limited Partnership units in connection with the sale of Arizona Mills (Note 2) | $ | 77,711 | |||||
Issuance of TRG partnership units in connection with the purchase of the U.S. headquarters building (Note 2) | 91 | ||||||
Assumption of debt in connection with the purchase of the U.S. headquarters building (Note 2) | 18,215 | ||||||
Other non-cash additions to properties | 75,880 | 53,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|