8-K

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): July 28, 2016
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):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 July 28, 2016, the Company issued a press release announcing its results of operations for the quarter ended June 30, 2016. 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 July 28, 2016, entitled “Taubman Centers, Inc. Issues Second Quarter Results.”

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: July 28, 2016	TAUBMAN CENTERS, INC.
	By:	/s/ Simon J. Leopold
		Simon J. Leopold
		Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description
99	Press Release, dated July 28, 2016, entitled “Taubman Centers, Inc. Issues Second Quarter Results.”

EX-99

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 Second Quarter Results

• Net Income and Earnings Per Share Up

• Comparable Center Net Operating Income (NOI) Up 6.2 Percent

• Funds from Operations and Adjusted Funds from Operations Per Share Up

• Average Rent Per Square Foot Up 5.4 Percent

• Trailing 12-Month Releasing Spreads 24.2 Percent

BLOOMFIELD HILLS, Mich., July 28, 2016 - - Taubman Centers, Inc. (NYSE: TCO) today reported financial results for the second quarter of 2016.

		June 30, 2016 Three Months Ended	June 30, 2015 Three Months Ended	June 30, 2016 Six Months Ended	June 30, 2015 Six Months Ended
Net income attributable to common shareowners (EPS) per diluted common share Growth rate		$0.57 54.1%	$0.37	$0.98 16.7%	$0.84
Funds from Operations (FFO) per diluted common share Growth rate		$1.04 36.8%	$0.76	$1.88 19.7%	$1.57
Adjusted Funds from Operations (Adjusted FFO) per diluted common share Growth rate		$0.79 (1) 3.9%	$0.76	$1.63 (1) 3.8%	$1.57
(1)	Adjusted FFO for the three and six months ended June 30, 2016 excludes a one-time $21.7 million payment the company received in the second quarter due to the termination of the company’s leasing services agreement at The Shops at Crystals (Las Vegas, Nev.).

“We had a solid quarter,” said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. “FFO was consistent with our expectations despite a two cent legal charge.

Our NOI growth was strong. Driven by increased rents, recoveries, and occupancy, we produced our best quarter of growth in nearly four years. We also posted impressive releasing spreads that for the eighth consecutive quarter were greater than 20 percent.”

Operating Statistics

Diluted net income attributable to common shareowners was up 49.1 percent for the quarter, bringing year-to-date growth to 12.1 percent. Comparable center NOI, excluding lease cancellation income, was up 6.2 percent for the quarter, bringing year-to-date growth to 6 percent.

Average rent per square foot for the quarter was $62.61, up 5.4 percent from $59.41 in the comparable period last year. Year-to-date, average rent per square foot was up 4 percent.

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Trailing 12-month releasing spreads per square foot for the period ended June 30, 2016 were a robust 24.2 percent.

Ending occupancy in comparable centers was 93.8 percent on June 30, 2016, up 0.8 percent from June 30, 2015. Leased space in comparable centers was 96.2 percent on June 30, 2016, down 0.8 percent from June 30, 2015.

Comparable center mall tenant sales per square foot decreased 0.7 percent from the second quarter of 2015. This brings the company's 12-month trailing mall tenant sales per square foot to $789, a decrease of 1 percent from the 12-months ended June 30, 2015. Year-to-date, mall tenant sales per square foot were down 1.8 percent.

“Most of our centers reported sales increases during the quarter,” said Mr. Taubman. “Unfortunately, softness in our South Florida centers continued.”

Ownership in CityOn.Zhengzhou Increased; Planned Opening Date Changed

In July, Taubman and Wangfujing Group Co. acquired Maple Real Estate’s (the land developer) 35 percent interest in CityOn.Zhengzhou. As a result, Taubman and Wangfujing now own 49 percent and 51 percent of the center, respectively. The company expects its share of the additional investment to be approximately $60 million. “We have made tremendous progress in leasing and construction. We are confident in the future success of the center and are pleased to have the opportunity at this time to increase our ownership,”said Rene Tremblay, president of Taubman Asia.

The opening of the center is now expected to occur in March 2017. The completion of a new main power station being built by the government, which is required for the center’s opening, has been delayed. The change in opening date will not impact the company's anticipated $175 million share of total project cost or after-tax stabilized return of 6 to 6.5 percent.

Financing Activity

In May, Cherry Creek Shopping Center (Denver, Colo.), the company’s 50 percent owned joint venture, completed a $550 million, 12-year, non-recourse refinancing. The loan is interest only during the entire term at a fixed all-in rate of 3.87 percent. Proceeds were used to pay off the previous $280 million, 5.24 percent loan. The company’s share of excess proceeds, net of fees, of approximately $135 million was used to pay down the company’s lines of credit.

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2016 Guidance

The company is updating its guidance for 2016. 2016 EPS is now expected to be in the range of $1.73 to $1.93 per diluted common share, revised from the previous range of $1.85 to $2.10. 2016 FFO is now expected to be in the range of $3.75 to $3.90 per diluted common share, revised from the previous range of $3.75 to $3.95. 2016 Adjusted FFO, which excludes the one-time $21.7 million payment the company received in the second quarter due to the termination of the company’s leasing services agreement at The Shops at Crystals, is now expected to be in the range of $3.50 to $3.65 per diluted common share, revised from the previous range of $3.50 to $3.70.

The changes in the company’s guidance are primarily due to lower lease cancellation income, which the company now expects its beneficial share to be about $3 million, down from the previous estimate of about $6 million. In addition, the company incurred an unanticipated two cent legal charge in the second quarter.

Supplemental Investor Information Available

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

• Company Information

• Income Statements

• Earnings Reconciliations

• Changes in Funds from Operations and Earnings Per Common Share

• Components of Other Income, Other Operating Expense and Nonoperating Income, Net

• Recoveries Ratio Analysis

• Balance Sheets

• Debt Summary

• Other Debt, Equity and Certain Balance Sheet Information

• Construction and Redevelopments

• Capital Spending

• Operational Statistics

• Summary of Key Guidance Measures

• Owned Centers

• Major Tenants in Owned Portfolio

• Anchors in Owned Portfolio

• Operating Statistics Glossary

Investor Conference Call

The company will host a conference call at 10:00 a.m. EDT on Friday, July 29 to discuss its results, business conditions and the company’s outlook for the remainder of 2016. The conference call will be simulcast at www.taubman.com.  An online replay will be available shortly after the call and will continue for approximately 90 days.

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About Taubman

Taubman Centers is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management and/or leasing of 24 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. Taubman is currently developing three properties in the U.S. and Asia totaling 3.1 million square feet. Founded in 1950, Taubman is headquartered in Bloomfield Hills, Mich. Taubman Asia, founded in 2005, is headquartered in Hong Kong. www.taubman.com.

For ease of use, references in this press release to “Taubman Centers,” “company,” “Taubman” or an operating platform mean Taubman Centers, Inc. and/or one or more of a number of separate, affiliated entities. Business is actually conducted by an affiliated entity rather than Taubman Centers, Inc. itself or the named operating platform.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management's current views with respect to future events and financial performance. Forward-looking statements can be identified by words such as “will”, “may”, “could”, “expect”, “anticipate”, “believes”, “intends”, “should”, “plans”, “estimates”, “approximate”, “guidance” and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, the company assumes no obligation to update these forward-looking statements, even if new information becomes available in the future. Actual results may differ materially from those expected because of various risks, uncertainties and other factors. Such factors include, but are not limited to: changes in market rental rates; unscheduled closings or bankruptcies of tenants; relationships with anchor tenants; trends in the retail industry; the liquidity of real estate investments; the company’s ability to comply with debt covenants; the availability and terms of financings; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in value of investments in foreign entities; the ability to hedge interest rate and currency risk; risks related to acquiring, developing, expanding, leasing and managing properties; changes in value of investments in foreign entities; risks related to joint venture properties; insurance costs and coverage; security breaches that could impact the company’s information technology, infrastructure or personal data; the loss of key management personnel; 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:

Ryan Hurren, Taubman, Director, Investor Relations, 248-258-7232

rhurren@taubman.com

Maria Mainville, Taubman, Director, Strategic Communications, 248-258-7469

mmainville@taubman.com

# # #

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TAUBMAN CENTERS, INC.
Table 1 - Summary of Results
For the Periods Ended June 30, 2016 and 2015
(in thousands of dollars, except as indicated)
	Three Months Ended				Year to Date
	2016		2015		2016		2015
Net income	57,744		42,333		102,073		93,333
Noncontrolling share of income of consolidated joint ventures	(1,630	)	(2,672	)	(4,151	)	(5,263	)
Noncontrolling share of income of TRG	(15,087	)	(10,153	)	(25,986	)	(22,664	)
Distributions to participating securities of TRG	(524	)	(493	)	(1,036	)	(985	)
Preferred stock dividends	(5,785	)	(5,785	)	(11,569	)	(11,569	)
Net income attributable to Taubman Centers, Inc. common shareowners	34,718		23,230		59,331		52,852
Net income per common share - basic	0.58		0.38		0.98		0.85
Net income per common share - diluted	0.57		0.37		0.98		0.84
Beneficial interest in EBITDA - Combined (1)	127,895		99,134		236,371		202,640
Adjusted Beneficial interest in EBITDA - Combined (1)	106,193		99,134		214,669		202,640
Funds from Operations attributable to partnership unitholders and participating securities of TRG (1)	89,816		67,596		162,840		140,512
Funds from Operations attributable to TCO's common shareowners (1)	63,464		47,939		115,061		99,909
Funds from Operations per common share - basic (1)	1.05		0.78		1.91		1.60
Funds from Operations per common share - diluted (1)	1.04		0.76		1.88		1.57
Adjusted Funds from Operations attributable to partnership unitholders and participating securities of TRG (1)	68,114		67,596		141,138		140,512
Adjusted Funds from Operations attributable to TCO's common shareowners (1)	48,129		47,939		99,726		99,909
Adjusted Funds from Operations per common share - basic (1)	0.80		0.78		1.65		1.60
Adjusted Funds from Operations per common share - diluted (1)	0.79		0.76		1.63		1.57
Weighted average number of common shares outstanding - basic	60,353,080		61,606,563		60,314,042		62,319,211
Weighted average number of common shares outstanding - diluted	60,701,702		62,386,042		60,746,351		63,156,702
Common shares outstanding at end of period	60,390,149		60,886,865
Weighted average units - Operating Partnership - basic	85,413,911		86,669,952		85,375,537		87,402,848
Weighted average units - Operating Partnership - diluted	86,633,794		88,320,693		86,679,108		89,111,601
Units outstanding at end of period - Operating Partnership	85,449,499		85,950,254
Ownership percentage of the Operating Partnership at end of period	70.7	%	70.8	%
Number of owned shopping centers at end of period	21		19
Operating Statistics:
Net Operating Income excluding lease cancellation income - growth % (1)(2)	6.2	%	2.5	%	6.0	%	3.1	%
Net Operating Income including lease cancellation income - growth % (1)(2)	6.2	%	-0.4	%	5.2	%	2.4	%
Average rent per square foot - Consolidated Businesses (2)	66.00		61.27		64.73		60.86
Average rent per square foot - Unconsolidated Joint Ventures (2)	58.95		57.38		58.36		57.58
Average rent per square foot - Combined (2)	62.61		59.41		61.68		59.30
Average rent per square foot growth (2)	5.4	%			4.0	%
Ending occupancy - all centers	92.5	%	90.6	%	92.5	%	90.6	%
Ending occupancy - comparable (2)	93.8	%	93.0	%	93.8	%	93.0	%
Leased space - all centers	95.6	%	95.7	%	95.6	%	95.7	%
Leased space - comparable (2)	96.2	%	97.0	%	96.2	%	97.0	%
Mall tenant sales - all centers (3)	1,293,120		1,203,516		2,495,388		2,379,273
Mall tenant sales - comparable (2)(3)	1,123,375		1,117,744		2,219,858		2,218,319
	12-Months Trailing
	2016		2015
Operating Statistics:
Mall tenant sales - all centers (3)	5,294,103		5,102,054
Mall tenant sales - comparable (2)(3)	4,604,678		4,616,742
Sales per square foot (2)(3)	789		797
All centers (3):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses	14.6	%	14.1	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures	14.1	%	13.2	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined	14.4	%	13.7	%
Comparable centers (2)(3):
Mall tenant occupancy costs as a percentage of tenant sales - Consolidated Businesses	14.1	%	13.6	%
Mall tenant occupancy costs as a percentage of tenant sales - Unconsolidated Joint Ventures	14.3	%	13.3	%
Mall tenant occupancy costs as a percentage of tenant sales - Combined	14.2	%	13.5	%

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(1)	Beneficial interest in EBITDA represents the Operating Partnership’s share of the earnings before interest, income taxes, and depreciation and amortization of its consolidated and unconsolidated businesses. The Company believes beneficial interest in EBITDA provides a useful indicator of operating performance, as it is customary in the real estate and shopping center business to evaluate the performance of properties on a basis unaffected by capital structure.
	The Company uses Net Operating Income (NOI) as an alternative measure to evaluate the operating performance of centers, both on individual and stabilized portfolio bases. The Company defines NOI as property-level operating revenues (includes rental income excluding straight-line adjustments of minimum rent) less maintenance, taxes, utilities, promotion, ground rent (including straight-line adjustments), and other property operating expenses. Since NOI excludes general and administrative expenses, pre-development charges, interest income and expense, depreciation and amortization, impairment charges, restructuring charges, and gains from peripheral land and property dispositions, it provides a performance measure that, when compared period over period, reflects the revenues and expenses most directly associated with owning and operating rental properties, as well as the impact on their operations from trends in tenant sales, occupancy and rental rates, and operating costs. The Company also uses NOI excluding lease cancellation income as an alternative measure because this income may vary significantly from period to period, which can affect comparability and trend analysis. The Company generally provides separate projections for expected comparable center NOI growth and lease cancellation income. Comparable centers are generally defined as centers that were owned and open for the entire current and preceding period presented, excluding centers impacted by significant redevelopment activity.
	The National Association of Real Estate Investment Trusts (NAREIT) defines Funds from Operations (FFO) as net income (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains (or losses) from extraordinary items and sales of properties and impairment write-downs of depreciable real estate, plus real estate related depreciation and after adjustments for unconsolidated partnerships and joint ventures. The Company believes that FFO is a useful supplemental measure of operating performance for REITs. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, the Company and most industry investors and analysts have considered presentations of operating results that exclude historical cost depreciation to be useful in evaluating the operating performance of REITs. The Company primarily uses FFO in measuring performance and in formulating corporate goals and compensation.
	The Company may also present adjusted versions of NOI, beneficial interest in EBITDA, and FFO when used by management to evaluate operating performance when certain significant items have impacted results that affect comparability with prior or future periods due to the nature or amounts of these items. The Company believes the disclosure of the adjusted items is similarly useful to investors and others to understand management's view on comparability of such measures between periods. For the three and six month periods ended June 30, 2016, FFO and EBITDA were adjusted to exclude the lump sum payment of $21.7 million received in May 2016 in connection with the termination of the Company's third party leasing agreement at The Shops at Crystals (Crystals) due to a change in ownership of the center.
	These non-GAAP measures as presented by the Company are not necessarily comparable to similarly titled measures used by other REITs due to the fact that not all REITs use the same definitions. These measures should not be considered alternatives to net income or as an indicator of the Company's operating performance. Additionally, these measures do not represent cash flows from operating, investing, or financing activities as defined by GAAP.
(2)	Statistics exclude non-comparable centers for all periods presented. The June 30, 2015 statistics have been restated to include comparable centers to 2016. The Mall at University Town Center has been excluded from comparable 12-month trailing statistics reported for 2016 and 2015 as the center was not open for the entire 12 months ended June 30, 2015. Sales per square foot exclude spaces greater than or equal to 10,000 square feet.
(3)	Based on reports of sales furnished by mall tenants.

Taubman Centers/7

TAUBMAN CENTERS, INC.
Table 2 - Income Statement
For the Three Months Ended June 30, 2016 and 2015
(in thousands of dollars)
				2016				2015
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		82,694		66,452		76,869		52,865
		Percentage rents		924		1,188		1,077		1,203
		Expense recoveries		47,380		38,340		46,020		31,694
		Management, leasing, and development services (2)		23,196				3,341
		Other		4,696		2,668		4,666		2,112
			Total revenues	158,890		108,648		131,973		87,874
EXPENSES:
		Maintenance, taxes, utilities, and promotion		35,917		31,429		35,107		22,772
		Other operating (3)		20,482		5,424		14,680		4,647
		Management, leasing, and development services		894				1,411
		General and administrative		11,693				12,055
		Interest expense		20,588		24,965		14,781		21,056
		Depreciation and amortization		29,716		20,612		26,378		14,370
			Total expenses	119,290		82,430		104,412		62,845
Nonoperating income, net				2,676		860		1,456		(3	)
				42,276		27,078		29,017		25,026
Income tax expense				(442	)			(688	)
Equity in income of Unconsolidated Joint Ventures				15,910				14,004
Net income				57,744				42,333
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(1,630	)			(2,672	)
		Noncontrolling share of income of TRG		(15,087	)			(10,153	)
Distributions to participating securities of TRG				(524	)			(493	)
Preferred stock dividends				(5,785	)			(5,785	)
Net income attributable to Taubman Centers, Inc. common shareowners				34,718				23,230
SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		92,580		72,655		70,176		60,452
		EBITDA - outside partners' share		(5,471	)	(31,869	)	(4,953	)	(26,541	)
		Beneficial interest in EBITDA		87,109		40,786		65,223		33,911
		Beneficial interest expense		(18,022	)	(13,207	)	(13,047	)	(11,405	)
		Beneficial income tax expense - TRG and TCO		(434	)			(688	)
		Beneficial income tax expense - TCO						109
		Non-real estate depreciation		(631	)			(722	)
		Preferred dividends and distributions		(5,785	)			(5,785	)
		Funds from Operations attributable to partnership unitholders and participating securities of TRG		62,237		27,579		45,090		22,506
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG%		440		707		(116	)	496
		The Mall at Green Hills purchase accounting adjustments - minimum rents increase		56				87
		El Paseo Village and The Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	155				305
		Waterside Shops purchase accounting adjustments - interest expense reduction				525				262
(1	)	With the exception of the Supplemental Information, amounts include 100% of the Unconsolidated Joint Ventures. Amounts are net of intercompany transactions. The Unconsolidated Joint Ventures are presented at 100% in order to allow for measurement of their performance as a whole, without regard to the Company's ownership interest.
(2	)	Amount includes the $21.7 million lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at Crystals due to a change in ownership in the center.
(3	)	In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $0.8 million for the three months ended June 30, 2015.

Taubman Centers/8

TAUBMAN CENTERS, INC.
Table 3 - Income Statement
For the Six Months Ended June 30, 2016 and 2015
(in thousands of dollars)
				2016				2015
				CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)		CONSOLIDATED BUSINESSES		UNCONSOLIDATED JOINT VENTURES (1)
REVENUES:
		Minimum rents		164,671		124,015		151,436		105,574
		Percentage rents		3,696		3,220		4,007		3,450
		Expense recoveries		95,140		72,712		89,932		63,251
		Management, leasing, and development services (2)		24,924				6,298
		Other		9,914		5,464		9,289		7,513
			Total revenues	298,345		205,411		260,962		179,788
EXPENSES:
		Maintenance, taxes, utilities, and promotion		70,855		54,785		66,740		44,271
		Other operating (3)		39,190		8,828		27,898		10,077
		Management, leasing, and development services		1,766				2,541
		General and administrative		23,073				23,980
		Interest expense		39,716		46,298		28,306		42,022
		Depreciation and amortization		59,462		36,618		50,419		27,869
			Total expenses	234,062		146,529		199,884		124,239
Nonoperating income, net				4,146		1,106		2,702		5
				68,429		59,988		63,780		55,554
Income tax expense				(744	)			(1,526	)
Equity in income of Unconsolidated Joint Ventures				34,388				31,079
Net income				102,073				93,333
Net income attributable to noncontrolling interests:
		Noncontrolling share of income of consolidated joint ventures		(4,151	)			(5,263	)
		Noncontrolling share of income of TRG		(25,986	)			(22,664	)
Distributions to participating securities of TRG				(1,036	)			(985	)
Preferred stock dividends				(11,569	)			(11,569	)
Net income attributable to Taubman Centers, Inc. common shareowners				59,331				52,852
SUPPLEMENTAL INFORMATION:
		EBITDA - 100%		167,607		142,904		142,505		125,445
		EBITDA - outside partners' share		(11,363	)	(62,777	)	(10,282	)	(55,028	)
		Beneficial interest in EBITDA		156,244		80,127		132,223		70,417
		Beneficial interest expense		(35,198	)	(24,735	)	(24,918	)	(22,768	)
		Beneficial income tax expense - TRG and TCO		(736	)			(1,526	)
		Beneficial income tax expense (benefit) - TCO		(19	)			288
		Non-real estate depreciation		(1,274	)			(1,635	)
		Preferred dividends and distributions		(11,569	)			(11,569	)
		Funds from Operations attributable to partnership unitholders and participating securities of TRG		107,448		55,392		92,863		47,649
STRAIGHTLINE AND PURCHASE ACCOUNTING ADJUSTMENTS:
		Net straight-line adjustments to rental revenue, recoveries, and ground rent expense at TRG%		453		1,164		(373	)	889
		The Mall at Green Hills purchase accounting adjustments - minimum rents increase		116				180
		El Paseo Village and The Gardens on El Paseo purchase accounting
			adjustments - interest expense reduction	440				611
		Waterside Shops purchase accounting adjustments - interest expense reduction				788				525
(1	)	With the exception of the Supplemental Information, amounts include 100% of the Unconsolidated Joint Ventures. Amounts are net of intercompany transactions. The Unconsolidated Joint Ventures are presented at 100% in order to allow for measurement of their performance as a whole, without regard to the Company's ownership interest.
(2	)	Amount includes the $21.7 million lump sum payment received in May 2016 for the termination of the Company's third party leasing agreement at Crystals due to a change in ownership in the center.
(3	)	In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in both the Other Operating Expenses for the Company’s Consolidated Businesses and the Unconsolidated Joint Ventures, are now recognized entirely in the Other Operating Expenses for the Company's Consolidated Businesses in 2016. The comparative amount of Other Operating Expenses allocated to Unconsolidated Joint Ventures was $2.5 million for the six months ended June 30, 2015.

Taubman Centers/9

TAUBMAN CENTERS, INC.
Table 4 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations and Adjusted Funds From Operations
For the Three Months Ended June 30, 2016 and 2015
(in thousands of dollars except as noted; may not add or recalculate due to rounding)
			2016					2015
					Shares	Per Share				Shares	Per Share
			Dollars		/Units	/Unit		Dollars		/Units	/Unit
Net income attributable to TCO common shareowners - basic			34,718		60,353,080	0.58		23,230		61,606,563	0.38
Add impact of share-based compensation			61		348,622			91		779,479
Net income attributable to TCO common shareowners - diluted			34,779		60,701,702	0.57		23,321		62,386,042	0.37
Add depreciation of TCO's additional basis			1,617			0.03		1,617			0.03
Add TCO's additional income tax expense								109			0.00
Net income attributable to TCO common shareowners,
		excluding step-up depreciation and additional income tax expense	36,396		60,701,702	0.60		25,047		62,386,042	0.40
Add noncontrolling share of income of TRG			15,087		25,060,830			10,153		25,063,389
Add distributions to participating securities of TRG			524		871,262			493		871,262
Net income attributable to partnership unitholders
		and participating securities of TRG	52,007		86,633,794	0.60		35,693		88,320,693	0.40
Add (less) depreciation and amortization:
		Consolidated businesses at 100%	29,716			0.34		26,378			0.30
		Depreciation of TCO's additional basis	(1,617	)		(0.02	)	(1,617	)		(0.02	)
		Noncontrolling partners in consolidated joint ventures	(1,267	)		(0.01	)	(547	)		(0.01	)
		Share of Unconsolidated Joint Ventures	11,669			0.13		8,502			0.10
		Non-real estate depreciation	(631	)		(0.01	)	(722	)		(0.01	)
Less impact of share-based compensation			(61	)		(0.00	)	(91	)		(0.00	)
Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	89,816		86,633,794	1.04		67,596		88,320,693	0.77
TCO's average ownership percentage of TRG - basic (1)			70.7	%				71.1	%
Funds from Operations attributable to TCO's common shareowners,
		excluding additional income tax expense (1)	63,464			1.04		48,048			0.77
Less TCO's additional income tax expense								(109	)		(0.00	)
Funds from Operations attributable to TCO's common shareowners (1)			63,464			1.04		47,939			0.76
Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	89,816		86,633,794	1.04		67,596		88,320,693	0.77
Crystals lump sum payment received for termination of leasing agreement			(21,702	)		(0.25	)
Adjusted Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	68,114		86,633,794	0.79		67,596		88,320,693	0.77
TCO's average ownership percentage of TRG - basic (2)			70.7	%				71.1	%
Adjusted Funds from Operations attributable to TCO's common shareowners,
		excluding additional income tax expense (2)	48,129			0.79		48,048			0.77
Less TCO's additional income tax expense								(109	)		(0.00	)
Adjusted Funds from Operations attributable to TCO's common shareowners (2)			48,129			0.79		47,939			0.76
(1	)	For the three months ended June 30, 2016, Funds from Operations attributable to TCO's common shareowners was $62,570 using TCO's diluted average ownership percentage of TRG of 69.7%. For the three months ended June 30, 2015, Funds from Operations attributable to TCO's common shareowners was $47,041 using TCO's diluted average ownership percentage of TRG of 69.8%.
(2	)	For the three months ended June 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $47,451 using TCO's diluted average ownership percentage of TRG of 69.7%. For the three months ended June 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $47,041 using TCO's diluted average ownership percentage of TRG of 69.8%.

Taubman Centers/10

TAUBMAN CENTERS, INC.
Table 5 - Reconciliation of Net Income Attributable to Taubman Centers, Inc. Common Shareowners to Funds from Operations and Adjusted Funds from Operations
For the Six Months Ended June 30, 2016 and 2015
(in thousands of dollars except as noted; may not add or recalculate due to rounding)
			2016					2015
					Shares	Per Share				Shares	Per Share
			Dollars		/Units	/Unit		Dollars		/Units	/Unit
Net income attributable to TCO common shareowners - basic			59,331		60,314,042	0.98		52,852		62,319,211	0.85
Add impact of share-based compensation			129		432,309			196		837,491
Net income attributable to TCO common shareowners - diluted			59,460		60,746,351	0.98		53,048		63,156,702	0.84
Add depreciation of TCO's additional basis			3,234			0.05		3,234			0.05
Add (less) TCO's additional income tax expense (benefit)			(19	)		(0.00	)	288			0.00
Net income attributable to TCO common shareowners,
		excluding step-up depreciation and additional income tax expense (benefit)	62,675		60,746,351	1.03		56,570		63,156,702	0.90
Add noncontrolling share of income of TRG			25,986		25,061,495			22,664		25,083,637
Add distributions to participating securities of TRG			1,036		871,262			985		871,262
Net income attributable to partnership unitholders
		and participating securities of TRG	89,697		86,679,108	1.03		80,219		89,111,601	0.90
Add (less) depreciation and amortization:
		Consolidated businesses at 100%	59,462			0.69		50,419			0.57
		Depreciation of TCO's additional basis	(3,234	)		(0.04	)	(3,234	)		(0.04	)
		Noncontrolling partners in consolidated joint ventures	(2,686	)		(0.03	)	(1,631	)		(0.02	)
		Share of Unconsolidated Joint Ventures	21,004			0.24		16,570			0.19
		Non-real estate depreciation	(1,274	)		(0.01	)	(1,635	)		(0.02	)
Less impact of share-based compensation			(129	)		(0.00	)	(196	)		(0.00	)
Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	162,840		86,679,108	1.88		140,512		89,111,601	1.58
TCO's average ownership percentage of TRG - basic (1)			70.6	%				71.3	%
Funds from Operations attributable to TCO's common shareowners,
		excluding additional income tax benefit (expense) (1)	115,042			1.88		100,197			1.58
Add (less) TCO's additional income tax benefit (expense)			19			0.00		(288	)		(0.00	)
Funds from Operations attributable to TCO's common shareowners (1)			115,061			1.88		99,909			1.57
Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	162,840		86,679,108	1.88		140,512		89,111,601	1.58
Crystals lump sum payment received for termination of leasing agreement			(21,702	)		(0.25	)
Adjusted Funds from Operations attributable to partnership unitholders
		and participating securities of TRG	141,138		86,679,108	1.63		140,512		89,111,601	1.58
TCO's average ownership percentage of TRG - basic (2)			70.6	%				71.3	%
Adjusted Funds from Operations attributable to TCO's common shareowners,
		excluding additional income tax benefit (expense) (2)	99,707			1.63		100,197			1.58
Add (less) TCO's additional income tax benefit (expense)			19			0.00		(288	)		(0.00	)
Adjusted Funds from Operations attributable to TCO's common shareowners (2)			99,726			1.63		99,909			1.57
(1	)	For the six months ended June 30, 2016, Funds from Operations attributable to TCO's common shareowners was $113,342 using TCO's diluted average ownership percentage of TRG of 69.6%. For the six months ended June 30, 2015, Funds from Operations attributable to TCO's common shareowners was $97,986 using TCO's diluted average ownership percentage of TRG of 69.9%.
(2	)	For the six months ended June 30, 2016, Adjusted Funds from Operations attributable to TCO's common shareowners was $98,223 using TCO's diluted average ownership percentage of TRG of 69.6%. For the six months ended June 30, 2015, Adjusted Funds from Operations attributable to TCO's common shareowners was $97,986 using TCO's diluted average ownership percentage of TRG of 69.9%.

Taubman Centers/11

TAUBMAN CENTERS, INC.
Table 6 - Reconciliation of Net Income to Beneficial Interest in EBITDA and Adjusted Beneficial Interest in EBITDA
For the Periods Ended June 30, 2016 and 2015
(in thousands of dollars; amounts attributable to TCO may not recalculate due to rounding)
			Three Months Ended				Year to Date
			2016		2015		2016		2015
Net income			57,744		42,333		102,073		93,333
Add (less) depreciation and amortization:
	Consolidated businesses at 100%		29,716		26,378		59,462		50,419
	Noncontrolling partners in consolidated joint ventures		(1,267	)	(547	)	(2,686	)	(1,631	)
	Share of Unconsolidated Joint Ventures		11,669		8,502		21,004		16,570
Add (less) interest expense and income tax expense:
	Interest expense:
		Consolidated businesses at 100%	20,588		14,781		39,716		28,306
		Noncontrolling partners in consolidated joint ventures	(2,566	)	(1,734	)	(4,518	)	(3,388	)
		Share of Unconsolidated Joint Ventures	13,207		11,405		24,735		22,768
	Share of income tax expense		434		688		736		1,526
Less noncontrolling share of income of consolidated joint ventures			(1,630	)	(2,672	)	(4,151	)	(5,263	)
Beneficial interest in EBITDA			127,895		99,134		236,371		202,640
TCO's average ownership percentage of TRG - basic			70.7	%	71.1	%	70.6	%	71.3	%
Beneficial interest in EBITDA attributable to TCO			90,368		70,466		166,986		144,493
Beneficial interest in EBITDA			127,895		99,134		236,371		202,640
Less:
	Crystals lump sum payment received for termination of leasing agreement		(21,702	)			(21,702	)
Adjusted Beneficial interest in EBITDA			106,193		99,134		214,669		202,640
TCO's average ownership percentage of TRG - basic			70.7	%	71.1	%	70.6	%	71.3	%
Adjusted Beneficial interest in EBITDA attributable to TCO			75,035		70,466		151,653		144,493

Taubman Centers/12

TAUBMAN CENTERS, INC.
Table 7 - Reconciliation of Net Income to Net Operating Income (NOI)
For the Periods Ended June 30, 2016, 2015, and 2014
(in thousands of dollars)
				Three Months Ended						Three Months Ended						Year to Date						Year to Date
				2016			2015			2015			2014			2016			2015			2015			2014
Net income				57,744			42,333			42,333			39,054			102,073			93,333			93,333			565,211
Add (less) depreciation and amortization:
		Consolidated businesses at 100%		29,716			26,378			26,378			36,850			59,462			50,419			50,419			71,968
		Noncontrolling partners in consolidated joint ventures		(1,267	)		(547	)		(547	)		(1,593	)		(2,686	)		(1,631	)		(1,631	)		(2,754	)
		Share of Unconsolidated Joint Ventures		11,669			8,502			8,502			6,854			21,004			16,570			16,570			14,032
Add (less) interest expense and income tax expense:
		Interest expense:
			Consolidated businesses at 100%	20,588			14,781			14,781			25,434			39,716			28,306			28,306			51,564
			Noncontrolling partners in consolidated joint ventures	(2,566	)		(1,734	)		(1,734	)		(2,086	)		(4,518	)		(3,388	)		(3,388	)		(4,150	)
			Share of Unconsolidated Joint Ventures	13,207			11,405			11,405			9,955			24,735			22,768			22,768			19,799
		Share of income tax expense:
			Income tax expense on dispositions of International Plaza, Arizona Mills, and Oyster Bay										(473	)											9,733
			Share of other income tax expense	434			688			688			311			736			1,526			1,526			1,010
Less noncontrolling share of income of consolidated joint ventures				(1,630	)		(2,672	)		(2,672	)		(2,252	)		(4,151	)		(5,263	)		(5,263	)		(5,370	)
Add EBITDA attributable to outside partners:
		EBITDA attributable to noncontrolling partners in consolidated joint ventures		5,471			4,953			4,953			5,931			11,363			10,282			10,282			12,274
		EBITDA attributable to outside partners in Unconsolidated Joint Ventures		31,869			26,541			26,541			24,319			62,777			55,028			55,028			47,526
EBITDA at 100%				165,235			130,628			130,628			142,304			310,511			267,950			267,950			780,843
Add (less) items excluded from shopping center NOI:
		General and administrative expenses		11,693			12,055			12,055			11,587			23,073			23,980			23,980			23,124
		Management, leasing, and development services, net		(22,302	)	(1)	(1,930	)		(1,930	)		(1,269	)		(23,158	)	(1)	(3,757	)		(3,757	)		(2,489	)
		Straight-line of rents		(2,024	)		(1,378	)		(1,378	)		(1,243	)		(3,138	)		(2,098	)		(2,098	)		(2,287	)
		Gain on dispositions																							(486,620	)
		Disposition costs related to the Starwood sale											441												441
		Discontinuation of hedge accounting - MacArthur Center											5,678												5,678
		Gain on sale of peripheral land														(403	)
		Dividend income		(944	)		(885	)		(885	)		(612	)		(1,888	)		(1,711	)		(1,711	)		(836	)
		Interest income		(1,760	)		(553	)		(553	)		(181	)		(2,272	)		(1,219	)		(1,219	)		(308	)
		Other nonoperating expense (income)		(832	)		(15	)		(15	)					(689	)		223			223			(754	)
		Unallocated operating expenses and other		12,148			8,505		(2)	5,961			5,211			22,176			17,063			10,309			8,959
NOI - all centers at 100%				161,214			146,427			143,883			161,916			324,212			300,431			293,677			325,751
Less - NOI of non-comparable centers				(16,371	)	(3)	(10,026	)	(4)	(5,997	)	(5)	(23,505	)	(6)	(30,252	)	(3)	(20,955	)	(4)	(11,152	)	(5)	(49,976	)	(7)
NOI at 100% - comparable centers				144,843			136,401			137,886			138,411			293,960			279,476			282,525			275,775
NOI - growth %				6.2	%					-0.4	%					5.2	%					2.4	%
NOI at 100% - comparable centers				144,843			136,401			137,886			138,411			293,960			279,476			282,525			275,775
Lease cancellation income				(251	)		(310	)		(321	)		(4,146	)		(2,226	)		(4,255	)		(4,403	)		(5,999	)
NOI at 100% - comparable centers excluding lease cancellation income				144,592			136,091			137,565			134,265			291,734			275,221			278,122			269,776
NOI at 100% excluding lease cancellation income - growth %				6.2	%					2.5	%					6.0	%					3.1	%
(1	)	Amount includes the lump sum payment of $21.7 million received in May 2016 in connection with the termination of the Company's third party leasing agreement for Crystals due to a change in ownership of the center.
(2	)	In 2016, the Company stopped allocating certain corporate-level operating expenses to the centers to better reflect the performance of the centers without regard to corporate infrastructure. These expenses, which were previously recognized in other operating expenses of the centers, are now recognized in unallocated operating expenses. For the three and six month periods ended June 30, 2015, the comparative amount of other operating expenses allocated to the centers was $2.5 million and $6.8 million, respectively at 100%.
(3	)	Includes Beverly Center, CityOn.Xi'an, Country Club Plaza, and The Mall of San Juan.
(4	)	Includes Beverly Center and The Mall of San Juan.
(5	)	Includes The Mall of San Juan and The Mall at University Town Center.
(6	)	Includes the portfolio of centers sold to Starwood and an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio.
(7	)	Includes the portfolio of centers sold to Starwood and Arizona Mills for the approximately one-month period prior to its disposition. Includes an adjustment to reflect the allocation of costs to Starwood centers that are now being allocated to the remainder of the portfolio.

Taubman Centers/13

TAUBMAN CENTERS, INC.
Table 8 - Balance Sheets
As of June 30, 2016 and December 31, 2015
(in thousands of dollars)
			As of
			June 30, 2016		December 31, 2015
Consolidated Balance Sheet of Taubman Centers, Inc.:
Assets:
	Properties		3,880,067		3,713,215
	Accumulated depreciation and amortization		(1,102,503	)	(1,052,027	)
			2,777,564		2,661,188
	Investment in Unconsolidated Joint Ventures		585,273		433,911
	Cash and cash equivalents		83,928		206,635
	Restricted cash		987		6,447
	Accounts and notes receivable, net		45,835		54,547
	Accounts receivable from related parties		1,938		2,478
	Deferred charges and other assets (1)		291,293		181,304
			3,786,818		3,546,510
Liabilities:
	Notes payable, net (1)		3,039,120		2,627,088
	Accounts payable and accrued liabilities		315,701		334,525
	Distributions in excess of investments in and net income of
	Unconsolidated Joint Ventures		468,508		464,086
			3,823,329		3,425,699
Redeemable noncontrolling interest			8,160
Equity:
	Taubman Centers, Inc. Shareowners' Equity:
		Series B Non-Participating Convertible Preferred Stock	25		25
		Series J Cumulative Redeemable Preferred Stock
		Series K Cumulative Redeemable Preferred Stock
		Common Stock	604		602
		Additional paid-in capital	650,306		652,146
		Accumulated other comprehensive income (loss)	(34,896	)	(27,220	)
		Dividends in excess of net income	(525,601	)	(512,746	)
			90,438		112,807
	Noncontrolling interests:
		Noncontrolling interests in consolidated joint ventures	(157,418	)	(23,569	)
		Noncontrolling interests in partnership equity of TRG	22,309		31,573
			(135,109	)	8,004
			(44,671	)	120,811
			3,786,818		3,546,510
(1)	The December 31, 2015 balance has been restated in connection with the Company's adoption of Accounting Standards Update (ASU) No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs" which changed the presentation of debt issuance costs on the Consolidated Balance Sheet. In connection with the adoption of ASU No. 2015-03 on January 1, 2016, the Company retrospectively reclassified the December 31, 2015 Consolidated Balance Sheet to move $16.9 million of debt issuance costs out of Deferred Charges and Other Assets and into Notes Payable, Net as a direct deduction of the related debt liabilities.
Combined Balance Sheet of Unconsolidated Joint Ventures (1):
Assets:
	Properties		2,556,015		1,628,492
	Accumulated depreciation and amortization		(618,829	)	(589,145	)
			1,937,186		1,039,347
	Cash and cash equivalents		32,626		36,047
	Accounts and notes receivable, net		52,617		42,361
	Deferred charges and other assets (2)		34,710		32,660
			2,057,139		1,150,415
Liabilities:
	Notes payable, net (2)(3)		2,303,763		1,994,298
	Accounts payable and other liabilities		272,342		70,539
			2,576,105		2,064,837
Accumulated Deficiency in Assets:
	Accumulated deficiency in assets - TRG		(303,749	)	(507,282	)
	Accumulated deficiency in assets - Joint Venture Partners		(194,185	)	(397,196	)
	Accumulated other comprehensive loss - TRG		(10,524	)	(4,974	)
	Accumulated other comprehensive loss - Joint Venture Partners		(10,508	)	(4,970	)
			(518,966	)	(914,422	)
			2,057,139		1,150,415
(1)	Unconsolidated Joint Venture amounts exclude the balances of CityOn.Zhengzhou and Starfield Hanam, which were under construction as of June 30, 2016 and December 31, 2015. In addition, the balances as of December 31, 2015 exclude the balances of CityOn.Xi'an, which was still under construction as of December 31, 2015.
(2)	The December 31, 2015 balance has been adjusted in connection with the Company's adoption of ASU No. 2015-03 "Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs."
(3)	The balances presented exclude centers under construction, therefore the Notes Payable, Net amounts exclude the construction financings outstanding for Starfield Hanam of $151.8 million ($52.1 million at TRG's share) and $52.9 million ($18.1 million at TRG's share) as of June 30, 2016 and December 31, 2015, respectively, and CityOn.Zhengzhou of $43.7 million ($13.9 million at TRG's share) and $44.7 million ($14.2 million at TRG's share) as of June 30, 2016 and December 31, 2015, respectively, and the related debt issuance costs.

Taubman Centers/14

TAUBMAN CENTERS, INC.
Table 9 - Annual Guidance
(all dollar amounts per common share on a diluted basis; amounts may not add due to rounding)
	Range for the Year Ended
	December 31, 2016
Adjusted Funds from Operations per common share	3.50		3.65
Crystals lump sum fee for termination of leasing agreement	0.25		0.25
Funds from Operations per common share	3.75		3.90
Real estate depreciation - TRG	(1.90	)	(1.84	)
Distributions to participating securities of TRG	(0.02	)	(0.02	)
Depreciation of TCO's additional basis in TRG	(0.11	)	(0.11	)
Net income attributable to common shareowners, per common share (EPS)	1.73		1.93