Noncontrolling Interests

Redeemable Noncontrolling Interests

In 2010, the Company's president of Taubman Asia (the Asia President) obtained an ownership interest in Taubman Asia, a consolidated subsidiary. The Asia President is entitled to 10% of Taubman Asia's dividends, with 85% of his dividends being withheld as contributions to capital. Taubman Asia has the ability to call, and the Asia President has the ability to put, the Asia President’s ownership interest, subject to certain conditions including the termination of the Asia President’s employment and the expiration of certain required holding periods. The Company has determined that the Asia President's ownership interest in Taubman Asia qualifies as an equity award, considering its specific redemption provisions, and accounts for it as a contingently redeemable noncontrolling interest. At June 30, 2011, the interest had an immaterial redemption value. Adjustments to the redemption value are recorded through equity.

Also in 2010, the Company formed a joint venture that is focusing on developing and owning outlet shopping centers. The Company owns a 90% controlling interest and consolidates the venture, while the joint venture partner owns a 10% interest. At any time after June 2012, the Company will have the right to purchase the joint venture partner's entire interest and the joint venture partner will have the right to require the Company to purchase the joint venture partner's entire interest. Additionally, the parties each have a one-time put and/or call on the joint venture partner’s interest in any stabilized centers, while still maintaining the ongoing joint venture relationship. Considering the redemption provisions, the Company accounts for the joint venture partner’s interest as a contingently redeemable noncontrolling interest. At June 30, 2011, the interest had an immaterial redemption value. Adjustments to the redemption value are recorded through equity.



Reconciliation of redeemable noncontrolling interests:	2011
Balance January 1, 2011	$	—
Contributions	292
Allocation of net loss	(292		)
Balance June 30, 2011	$	—

Equity Balances and Income Allocable to Noncontrolling Interests

The net equity balance of the noncontrolling interests as of June 30, 2011 and December 31, 2010 includes the following:



	2011			2010
Non-redeemable noncontrolling interests:
Noncontrolling interests in consolidated joint ventures	$	(73,174	)	$	(100,355	)
Noncontrolling interests in partnership equity of TRG	(64,437		)	(93,012		)
Preferred equity of TRG	29,217			29,217
	$	(108,394	)	$	(164,150	)

Net income attributable to the noncontrolling interests for the three months ended June 30, 2011 and June 30, 2010 includes the following:



	2011			2010
Net income attributable to noncontrolling interests:
Non-redeemable noncontrolling interests:
Noncontrolling share of income of consolidated joint ventures	$	3,015		$	1,968
Noncontrolling share of income of TRG	4,506			4,428
TRG Series F preferred distributions	615			615
	$	8,136		$	7,011
Redeemable noncontrolling interests	(230		)
	$	7,906		$	7,011

Net income attributable to the noncontrolling interests for the six months ended June 30, 2011 and June 30, 2010 includes the following:



	2011			2010
Net income attributable to noncontrolling interests:
Non-redeemable noncontrolling interests:
Noncontrolling share of income of consolidated joint ventures	$	6,462		$	3,981
Noncontrolling share of income of TRG	10,195			8,310
TRG Series F preferred distributions	1,230			1,230
	17,887			13,521
Redeemable noncontrolling interests	(292		)
	$	17,595		$	13,521

Equity Transactions

The following schedule presents the effects of changes in Taubman Centers, Inc.’s ownership interest in consolidated subsidiaries on Taubman Centers, Inc.’s equity for the six months ended June 30, 2011 and June 30, 2010:



	2011			2010
Net income attributable to Taubman Centers, Inc. common shareowners	$	19,060		$	13,736
Transfers (to) from the noncontrolling interest –
Decrease in Taubman Centers, Inc.’s paid-in capital for the adjustments of noncontrolling interest ⁽¹⁾	(40,762		)	(623		)
Net transfers (to) from noncontrolling interests	(40,762		)	(623		)
Change from net income attributable to Taubman Centers, Inc. and transfers (to) from noncontrolling interests	$	(21,702	)	$	13,113


(1)	In 2011 and 2010, 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 issuance of common stock (Note 1), share-based compensation under employee and director benefit plans (Note 7), and issuances of stock pursuant to the Continuing Offer (Note 8).

Finite Life Entities

Accounting Standards Codification Topic 480, “Distinguishing Liabilities from Equity” establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. At June 30, 2011, the Company held controlling interests in consolidated entities with specified termination dates in 2081 and 2083. The noncontrolling owners’ interests in these entities are to be settled upon termination by distribution or transfer of either cash or specific assets of the underlying entity. The estimated fair value of these noncontrolling interests was approximately $208 million at June 30, 2011, compared to a book value of $(71.5) million that is classified in Noncontrolling Interests in the Company’s Consolidated Balance Sheet.