Taubman Centers Announces Strong Second Quarter Results

BLOOMFIELD HILLS, Mich., July 27 /PRNewswire-FirstCall/ -- Taubman Centers, Inc. today announced strong financial results for the second quarter 2006 and increased guidance for the year.

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Net income (loss) allocable to common shareholders per diluted share (EPS) was $(0.05) for the quarter ended June 30, 2006 versus $(0.09) for the quarter ended June 30, 2005. EPS for the six months ended June 30, 2006 was $0.05 per diluted common share, versus $(0.04) per diluted common share for the first six months of 2005.

Taubman Centers' Adjusted Funds from Operations (FFO) per diluted share was $0.61 for the quarter ended June 30, 2006, an increase of 17.3 percent from $0.52 per diluted share for the same period last year. For the six months ended June 30, 2006, Adjusted FFO per diluted share was $1.23, up 12.8 percent from $1.09 for the first six months of 2005. Adjusted FFO excludes financing-related charges that were incurred during the first and second quarters of 2006.

Taubman Centers' FFO per diluted share was $0.55 for the quarter ended June 30, 2006, an increase of 5.8 percent from $0.52 per diluted share for the second quarter of 2005. For the six months ended June 30, 2006, FFO per diluted share was $1.15, up 5.5 percent from $1.09 for the first six months of 2005.

"This strong performance was due to growth in rents and recoveries at our centers, the continuing contribution from last year's opening of Northlake Mall (Charlotte, N.C.), increased land sale gains during the quarter and interest income from the cash on our balance sheet," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers.

Robust Tenant Sales

Mall tenant sales per square foot gained momentum during the second quarter, increasing 8.5 percent for the quarter and 6.9 percent for the year- to-date period. "We've now experienced strong sales performance at our centers for over three years," said Mr. Taubman. "Clearly consumers are continuing to favor our regional malls. During this quarter, the categories of women's apparel and accessories, children's apparel, jewelry, electronics and sit down restaurants showed double-digit sales per square foot growth across our portfolio. This sales strength continues to drive retailer confidence and leasing in our centers."

Leased space at June 30, 2006 was 91.8 percent, up 0.9 percent from June 30, 2005. Total occupancy for the portfolio was 89.0 percent at June 30, 2006, up 0.3 percent from June 30, 2005.

Strong Balance Sheet

During May, the company refinanced Cherry Creek Shopping Center (Denver, Colo.). The new $280 million, 10-year non-recourse, interest-only loan carries an interest rate of 5.24 percent and was used to pay off the existing $173 million 7.68 percent loan.

Also during the quarter, the company redeemed its $113 million 8.30% Series A Preferred Stock with Series I Preferred Stock and at the end of the quarter, redeemed that issue with available cash. The company incurred a charge of $4.7 million (or $0.055 FFO per share) during the second quarter representing the difference between the carrying values and redemption prices of each issue. In future periods, these transactions are expected to increase FFO per share by $0.03 to $0.04 per annum, as the preferred stock has been replaced with lower cost debt. The company continues to have $217 million of other classes of preferred equity outstanding.

"At June 30, we reported $79 million of cash on our balance sheet," said Lisa A. Payne, vice chairman and chief financial officer of Taubman Centers. "In August, we plan to repay the existing $140 million floating rate loan on Dolphin Mall (Miami, Fla.) with available cash and a portion of our currently unused $390 million credit facilities. This culminates our efforts to reduce floating rate debt, which subsequent to the Dolphin Mall payoff will be approximately 4 percent of our total debt. Our average fixed interest rate is currently 5.67 percent and we have a laddered maturity schedule that extends to 2016. These transactions clearly demonstrate how strong real estate with growing cash flows generates capital."

The Pier at Caesars Opens

The Pier at Caesars (Atlantic City, N.J.) opened its doors in late June. This center, built on a pier 900 feet into the Atlantic Ocean is steadily rolling out additional stores and restaurants throughout the summer and into the fall. At its completion, The Pier at Caesars will be home to over 100 mid to high-end luxury retailers and restaurants. The center has 35 stores open to date including Gucci, Coach, Louis Vuitton, Bottega Veneta, Salvatore Ferragamo and Tourneau. Openings next week include Tiffany & Co., Apple, Armani Exchange and several others. The Pier will also offer an exciting restaurant lineup including Stephen Starr's Buddakan and The Continental, Jeffrey Chodorow's rumjungle, and Patrick Lyon's Game On, Sonsie and The Trinity Pub. The center is over 95 percent leased and committed and is anticipated to be about 80 percent occupied by year end. Taubman Centers will have a 30 percent interest in The Pier, a project that will transform Atlantic City's retail and dining experience.

Increased Guidance

The company is increasing its guidance for 2006 FFO per share to the range of $2.43 to $2.48 and Adjusted FFO per share to the range of $2.52 to $2.57. Adjusted FFO excludes financing-related charges for the paydown of The Shops at Willow Bend (Plano, Texas) loans in the first quarter, the refinancing of the 8.30% Series A Preferred Stock and the payoff of the Series I Preferred Stock in the second quarter, and a previously announced $1 million charge relating to the payoff of the loan on Dolphin Mall anticipated in the third quarter.

Net Income (loss) allocable to common shareholders for the year is expected to be in the range of $0.36 to $0.57 per share.

Supplemental Investor Information Available

The company provides supplemental investor information along with its earnings announcements, available online at http://www.taubman.com/ under "Investor Relations." This includes the following:

* Income Statements * Earnings Reconciliations * Changes in Funds from Operations and Earnings Per Share * Components of Other Income, Other Operating Expense and Gains on Land Sales and Interest Income * Balance Sheets * Debt Summary * Other Debt and Equity Information * Construction and Center Openings * Capital Spending * Divestitures * Operational Statistics * Owned Centers * Major Tenants in Owned Portfolio * Anchors in Owned Portfolio Investor Conference Call

The company will host a conference call on July 28 at 10:00 a.m. (EDT) to discuss these results and will simulcast the conference call at http://www.taubman.com/ under "Investor Relations" as well as http://www.earnings.com/ and http://www.streetevents.com/ . The online replay will follow shortly after the call and continue for approximately 90 days. In addition, the conference call will be available as a podcast at http://www.reitcafe.com/ .

Taubman Centers, Inc., a real estate investment trust, owns and/or manages 23 urban and suburban regional and super regional shopping centers in 11 states. In addition, The Mall at Partridge Creek is under construction and scheduled to open in October 2007. Taubman Centers is headquartered in Bloomfield Hills, Mich.

This press release contains forward-looking statements within the meaning of the Securities Act of 1933 as amended. These statements reflect management's current views with respect to future events and financial performance. Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to changes in general economic and real estate conditions, changes in the interest rate environment and availability of financing, and adverse changes in the retail industry. Other risks and uncertainties are discussed in the company's filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.

TAUBMAN CENTERS, INC. Table 1 - Summary of Results For the Three and Six Months Ended June 30, 2006 and 2005 (in thousands of dollars, except as indicated) Three Months Six Months Ended June 30 Ended June 30 2006 2005 2006 2005 Income before minority and preferred interests (1) 20,972 11,227 42,380 29,443 Minority share of consolidated joint ventures (2) (3,671) (10) (4,132) (16) Minority share of income of TRG (2) (2,780) (2,364) (8,497) (7,529) Distributions in excess of minority share of income of TRG (6,115) (6,602) (9,296) (10,612) TRG preferred distributions (615) (615) (1,230) (1,230) Net income 7,791 1,636 19,225 10,056 Preferred dividends (3) (10,403) (6,150) (16,406) (12,300) Net income (loss) allocable to common shareowners (2,612) (4,514) 2,819 (2,244) Net income (loss) per common share - basic and diluted (0.05) (0.09) 0.05 (0.04) Beneficial interest in EBITDA - consolidated businesses (4) (5) 71,926 57,970 144,629 118,838 Beneficial interest in EBITDA - unconsolidated joint ventures (4) (5) 21,389 26,278 43,757 52,946 Funds from Operations (4) 45,410 42,562 94,530 89,134 Funds from Operations allocable to TCO (4) 29,563 26,522 61,145 55,053 Funds from Operations per common share - basic (4) 0.56 0.52 1.17 1.10 Funds from Operations per common share - diluted (4) 0.55 0.52 1.15 1.09 Weighted average number of common shares outstanding-basic 52,782,144 50,520,169 52,456,890 50,084,438 Weighted average number of common shares outstanding -diluted 52,782,144 50,520,169 52,701,933 50,084,438 Common shares outstanding at end of period 52,786,236 50,697,418 Weighted average units - Operating Partnership - basic 81,076,833 81,074,086 81,076,598 81,054,654 Weighted average units - Operating Partnership - diluted 82,215,216 81,956,693 82,192,903 82,005,515 Units outstanding at end of period - Operating Partnership 81,078,342 81,074,098 Ownership percentage of the Operating Partnership at end of period 65.1% 62.5% Number of owned shopping centers at end of period 22 21 22 21 Operating Statistics (6): Mall tenant sales 989,275 913,408 1,916,414 1,799,299 Mall tenant sales - comparable (7) 943,352 878,807 1,824,544 1,721,213 Ending occupancy (8) 89.0% 88.7% 89.0% 88.7% Ending occupancy - comparable (7) (8) 88.7% 88.7% 88.7% 88.7% Average occupancy (8) 88.7% 88.5% 88.5% 88.5% Average occupancy - comparable (7) (8) 88.6% 88.6% 88.5% 88.6% Leased space at end of period (8) 91.8% 90.9% 91.8% 90.9% Leased space at end of period - comparable (7) (8) 91.6% 91.0% 91.6% 91.0% Mall tenant occupancy costs as a percentage of tenant sales-consolidated businesses (5) 15.6% 15.9% 15.6% 15.9% Mall tenant occupancy costs as a percentage of tenant sales- unconsolidated joint ventures (5) 13.4% 14.3% 13.6% 14.4% Rent per square foot - consolidated businesses (5) (7) 43.28 41.72 43.22 41.60 Rent per square foot - unconsolidated joint ventures (5) (7) 41.12 42.64 41.48 42.62

(1) Income before minority and preferred interests for the six months ended June 30, 2006 includes a $2.1 million charge incurred in connection with the write-off of financing costs related to the pay-off of the loans on The Shops at Willow Bend prior to their maturity date.

(2) Because the net equity balances of the Operating Partnership and the outside partners in certain consolidated joint ventures are less than zero, the income allocated to the minority and outside partners during the three months and six months ended June 30, 2006 and 2005 is equal to their share of distributions. The net equity of these minority partners is less than zero due to accumulated distributions in excess of net income and not as a result of operating losses.

(3) Preferred dividends for the three and six months ended June 30, 2006 include charges of $4.0 million and $0.6 million incurred in connection with the redemption of the remaining $113 million of the Series A Preferred Stock and the redemption of the Series I Preferred Stock, respectively.

(4) Beneficial Interest in EBITDA represents the Operating Partnership's share of the earnings before interest 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 National Association of Real Estate Investment Trusts (NAREIT) defines Funds from Operations (FFO) as net income (loss) (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains (or losses) from extraordinary items and sales of properties, 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. FFO is primarily used by the Company in measuring performance and in formulating corporate goals and compensation.

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 common definitions. None of these non-GAAP measures should be considered alternatives to net income as an indicator of the Company's operating performance, and they do not represent cash flows from operating, investing, or financing activities as defined by GAAP.

As previously reported for 2005, because of a change in the Company's business practice to offer its tenants the option to pay a fixed charge or pay their share of common area maintenance (CAM) costs and related change to contractual terms of leases, the Company began adding back in the fourth quarter of 2005 all depreciation on CAM assets to calculate EBITDA and FFO, including depreciation on CAM assets that were recovered from tenants in the period of acquisition and depreciated over the recovery period. The Company has restated previously reported amounts in order to be comparable with 2006 amounts. For the three months ended June 30, 2006 and 2005, TRG's beneficial interest in the depreciation of center replacement assets that were reimbursed in the period of acquisition for its Consolidated Businesses and Unconsolidated Joint Ventures was $1.4 million and $0.6 million, respectively (in total, $0.025 per share) and $1.8 million and $0.3 million, respectively (in total, $0.025 per share). For the six months ended June 30, 2006 and 2005, TRG's beneficial interest in the depreciation of center replacement assets that were reimbursed in the period of acquisition for its Consolidated Businesses and Unconsolidated Joint Ventures was $1.5 million and $0.7 million, respectively (in total, $0.025 per share) and $2.0 million and $0.6 million, respectively (in total, $0.030 per share). The Company's share of depreciation on all CAM capital expenditures, which were previously included as a component of recoverable expenses, was $3.8 million and $4.0 million for the three months ended June 30, 2006 and 2005, respectively, and $5.7 million and $6.4 million for the six months ended June 30, 2006 and 2005, respectively.

(5) The results of Cherry Creek Shopping Center are presented within the Consolidated Businesses for periods beginning January 1, 2006, as a result of the Company's adoption of EITF 04-5. Results of Cherry Creek prior to 2006 are included within the Unconsolidated Joint Ventures.

(6) All operating statistics exclude The Pier at Caesars, which opened in late June 2006.

(7) Statistics exclude Northlake Mall, Waterside Shops at Pelican Bay, and Woodland. 2005 statistics have been restated to include comparable centers to 2006.

(8) Statistics include anchor spaces at value centers (Arizona Mills, Dolphin Mall, and Great Lakes Crossing).

TAUBMAN CENTERS, INC. Table 2 - Income Statement (1) For the Quarters Ended June 30, 2006 and 2005 (in thousands of dollars) 2006 UNCONSOLIDATED CONSOLIDATED JOINT BUSINESSES VENTURES(2) REVENUES: Minimum rents 76,587 35,896 Percentage rents 709 786 Expense recoveries 52,152 20,427 Management, leasing and development services 3,160 Other 6,668 1,175 Total revenues 139,276 58,284 EXPENSES: Maintenance, taxes and utilities 40,485 14,237 Other operating 16,476 5,919 Management, leasing and development services 1,527 General and administrative 7,546 Interest expense 31,871 13,353 Depreciation and amortization (3) 33,315 10,242 Total expenses 131,220 43,751 Gains on land sales and interest income 5,504 270 13,560 14,803 Equity in income of Unconsolidated Joint Ventures 7,412 Income before minority and preferred interests 20,972 Minority and preferred interests: TRG preferred distributions (615) Minority share of consolidated joint ventures (3,671) Minority share of income of TRG (2,780) Distributions in excess of minority share of income of TRG (6,115) Net income 7,791 Preferred dividends (4) (10,403) Net income (loss) allocable to common shareowners (2,612) SUPPLEMENTAL INFORMATION (5): EBITDA - 100% 78,746 38,398 EBITDA - outside partners' share (6,820) (17,009) Beneficial interest in EBITDA 71,926 21,389 Beneficial interest expense (28,658) (7,617) Non-real estate depreciation (612) Preferred dividends and distributions (11,018) Funds from Operations contribution 31,638 13,772 Net straightline adjustments to rental revenue, recoveries, and ground rent expense at TRG % 197 298 TAUBMAN CENTERS, INC. Table 2 - Income Statement (1) For the Quarters Ended June 30, 2006 and 2005 (in thousands of dollars) 2005 UNCONSOLIDATED CONSOLIDATED JOINT BUSINESSES VENTURES(2) REVENUES: Minimum rents 63,300 46,024 Percentage rents 721 343 Expense recoveries 41,222 24,239 Management, leasing and development services 3,334 Other 8,629 1,786 Total revenues 117,206 72,392 EXPENSES: Maintenance, taxes and utilities 32,161 17,704 Other operating 16,164 7,192 Management, leasing and development services 2,125 General and administrative 7,786 Interest expense 26,492 16,742 Depreciation and amortization (3) 33,570 12,312 Total expenses 118,298 53,950 Gains on land sales and interest income 2,947 162 1,855 18,604 Equity in income of Unconsolidated Joint Ventures 9,372 Income before minority and preferred interests 11,227 Minority and preferred interests: TRG preferred distributions (615) Minority share of consolidated joint ventures (10) Minority share of income of TRG (2,364) Distributions in excess of minority share of income of TRG (6,602) Net income 1,636 Preferred dividends (4) (6,150) Net income (loss) allocable to common shareowners (4,514) SUPPLEMENTAL INFORMATION (5): EBITDA - 100% 61,917 47,658 EBITDA - outside partners' share (3,947) (21,380) Beneficial interest in EBITDA 57,970 26,278 Beneficial interest expense (25,108) (9,318) Non-real estate depreciation (495) Preferred dividends and distributions (6,765) Funds from Operations contribution 25,602 16,960 Net straightline adjustments to rental revenue, recoveries, and ground rent expense at TRG % 307 206

(1) The results of Cherry Creek Shopping Center are presented within the Consolidated Businesses for periods beginning January 1, 2006, as a result of the Company's adoption of EITF 04-5. Results of Cherry Creek prior to 2006 are included within the Unconsolidated Joint Ventures. In addition, in 2006 the Company modified its income statement presentation for depreciation of center replacement assets, revenues and expense related to marketing and promotion services, and gains on land sales and interest income. As a result, certain reclassifications have been made to prior year amounts to conform to current year classifications.

(2) 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. In its consolidated financial statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.

(3) Included in depreciation and amortization of the Consolidated Businesses and Unconsolidated Joint Ventures (both at 100%) are $3.0 million and $1.4 million, respectively, of depreciation of center replacement assets for the three months ended June 30, 2006, and $3.3 million and $1.5 million, respectively, for the three months ended June 30, 2005.

(4) Preferred dividends for the three months ended June 30, 2006 include charges of $4.0 million and $0.6 million incurred in connection with the redemption of the remaining $113 million of the Series A Preferred Stock and the redemption of the Series I Preferred Stock, respectively.

(5) In order to be comparable to 2006 amounts, EBITDA and FFO for the three months ended June 30, 2005 have been restated from amounts previously reported to include an add-back of depreciation of center replacement assets reimbursed in the period of acquisition. See Note 4 to Table 1 of this release.

TAUBMAN CENTERS, INC. Table 3 - Income Statement (1) For the Year to Date Periods Ended June 30, 2006 and 2005 (in thousands of dollars) 2006 UNCONSOLIDATED CONSOLIDATED JOINT BUSINESSES VENTURES(2) REVENUES: Minimum rents 152,582 70,430 Percentage rents 3,599 1,714 Expense recoveries 97,045 38,499 Management, leasing and development services 6,083 Other 17,988 5,965 Total revenues 277,297 116,608 EXPENSES: Maintenance, taxes and utilities 75,283 27,619 Other operating 33,071 11,161 Management, leasing and development services 3,045 General and administrative 14,470 Interest expense (3) 66,154 26,595 Depreciation and amortization (4) 66,704 20,424 Total expenses 258,727 85,799 Gains on land sales and interest income 7,927 522 26,497 31,331 Equity in income of Unconsolidated Joint Ventures 15,883 Income before minority and preferred interests 42,380 Minority and preferred interests: TRG preferred distributions (1,230) Minority share of consolidated joint ventures (4,132) Minority share of income of TRG (8,497) Distributions in excess of minority share of income of TRG (9,296) Net income 19,225 Preferred dividends (5) (16,406) Net income (loss) allocable to common shareowners 2,819 SUPPLEMENTAL INFORMATION (6): EBITDA - 100% 159,355 78,350 EBITDA - outside partners' share (14,726) (34,593) Beneficial interest in EBITDA 144,629 43,757 Beneficial interest expense (59,864) (15,173) Non-real estate depreciation (1,183) Preferred dividends and distributions (17,636) Funds from Operations contribution 65,946 28,584 Net straightline adjustments to rental revenue, recoveries, and ground rent expense at TRG % 171 223 TAUBMAN CENTERS, INC. Table 3 - Income Statement (1) For the Year to Date Periods Ended June 30, 2006 and 2005 (in thousands of dollars) 2005 UNCONSOLIDATED CONSOLIDATED JOINT BUSINESSES VENTURES(2) REVENUES: Minimum rents 126,378 91,265 Percentage rents 2,417 1,662 Expense recoveries 78,782 47,111 Management, leasing and development services 5,534 Other 16,252 4,825 Total revenues 229,363 144,863 EXPENSES: Maintenance, taxes and utilities 62,159 33,737 Other operating 29,589 14,866 Management, leasing and development services 3,320 General and administrative 13,745 Interest expense (3) 52,032 33,517 Depreciation and amortization (4) 63,069 25,892 Total expenses 223,914 108,012 Gains on land sales and interest income 5,552 274 11,001 37,125 Equity in income of Unconsolidated Joint Ventures 18,442 Income before minority and preferred interests 29,443 Minority and preferred interests: TRG preferred distributions (1,230) Minority share of consolidated joint ventures (16) Minority share of income of TRG (7,529) Distributions in excess of minority share of income of TRG (10,612) Net income 10,056 Preferred dividends (5) (12,300) Net income (loss) allocable to common shareowners (2,244) SUPPLEMENTAL INFORMATION (6): EBITDA - 100% 126,102 96,534 EBITDA - outside partners' share (7,264) (43,588) Beneficial interest in EBITDA 118,838 52,946 Beneficial interest expense (49,382) (18,647) Non-real estate depreciation (1,091) Preferred dividends and distributions (13,530) Funds from Operations contribution 54,835 34,299 Net straightline adjustments to rental revenue, recoveries, and ground rent expense at TRG % 796 124

(1) The results of Cherry Creek Shopping Center are presented within the Consolidated Businesses for periods beginning January 1, 2006, as a result of the Company's adoption of EITF 04-5. Results of Cherry Creek prior to 2006 are included within the Unconsolidated Joint Ventures. In addition, in 2006 the Company modified its income statement presentation for depreciation of center replacement assets, revenues and expense related to marketing and promotion services, and gains on land sales and interest income. As a result, certain reclassifications have been made to prior year amounts to conform to current year classifications.

(2) 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. In its consolidated financial statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.

(3) Interest expense for the six months ended June 30, 2006 includes a $2.1 million charge representing the write-off of financing costs related to the pay-off of the loans on The Shops at Willow Bend prior to their maturity date.

(4) Included in depreciation and amortization of the Consolidated Businesses and Unconsolidated Joint Ventures (both at 100%) are $4.7 million and $2.1 million, respectively, of depreciation of center replacement assets for the six months ended June 30, 2006, and $5.0 million and $3.0 million, respectively, for the six months ended June 30, 2005.

(5) Preferred dividends for the six months ended June 30, 2006 include charges of $4.0 million and $0.6 million incurred in connection with the redemption of the remaining $113 million of the Series A Preferred Stock and the redemption of the Series I Preferred Stock, respectively.

(6) In order to be comparable to 2006 amounts, EBITDA and FFO for the six months ended June 30, 2005 have been restated from amounts previously reported to include an add-back of depreciation of center replacement assets reimbursed in the period of acquisition. See Note 4 to Table 1 of this release.

TAUBMAN CENTERS, INC. Table 4 - Reconciliation of Net Income (Loss) Allocable to Common Shareowners to Funds from Operations and Adjusted Funds from Operations For the Periods Ended June 30, 2006 and 2005 (in thousands of dollars; amounts allocable to TCO may not recalculate due to rounding) Three Months Ended Year to Date 2006 2005 2006 2005 Net income (loss) allocable to common shareowners (2,612) (4,514) 2,819 (2,244) Add (less) depreciation and amortization (1): Consolidated businesses at 100% 33,315 33,570 66,704 63,069 Minority partners in consolidated joint ventures (2,874) (2,594) (5,997) (4,678) Share of unconsolidated joint ventures 6,360 7,588 12,701 15,857 Non-real estate depreciation (612) (495) (1,183) (1,091) Add minority interests: Minority share of income of TRG 2,780 2,364 8,497 7,529 Distributions in excess of minority share of income of TRG 6,115 6,602 9,296 10,612 Distributions in excess of minority share of income of consolidated joint ventures 2,938 41 1,693 80 Funds from Operations 45,410 42,562 94,530 89,134 TCO's average ownership percentage of TRG 65.1% 62.3% 64.7% 61.8% Funds from Operations allocable to TCO 29,563 26,522 61,145 55,053 Funds from Operations (1) (2) 45,410 42,562 94,530 89,134 Charge upon redemption of Series A Preferred Stock 4,045 4,045 Charge upon redemption of Series I Preferred Stock 607 607 Write-off of financing costs 2,065 Adjusted Funds from Operations (2) 50,062 42,562 101,247 89,134 TCO's average ownership percentage of TRG 65.1% 62.3% 64.7% 61.8% Adjusted Funds from Operations allocable to TCO (2) 32,591 26,522 65,500 55,053

(1) Depreciation and amortization includes depreciation of center replacement assets recoverable from tenants, which were previously classified as recoverable expenses in the Company's financial statements. TRG's beneficial interest in these amounts are $3.8 million and $4.0 million for the three months ended June 30, 2006 and 2005, respectively, and $5.7 million and $6.4 million for the six months ended June 30, 2006 and 2005, respectively. In order to be comparable to 2006 amounts, 2005 amounts have been restated to include depreciation of center replacement assets that were reimbursed in the period of acquisition. See Note 4 to Table 1 of this release.

(2) Adjusted FFO excludes the following unusual and/or nonrecurring items: charges of $4.0 million ($0.050 per share) and $0.6 million ($0.005 per share) incurred during the second quarter of 2006 in connection with the redemption of the remaining $113 million of the Series A Preferred Stock and the redemption of the Series I Preferred Stock, respectively, and a $2.1 million ($0.025 per share) charge during the first quarter of 2006 in connection with the write-off of financing costs related to the pay-off of the loans on The Shops at Willow Bend prior to their maturity date. The Company discloses this Adjusted FFO due to the significance and infrequent nature of the charges. Given the significance of the charges, the Company believes it is essential to a reader's understanding of the Company's results of operations to emphasize the impact on the Company's earnings measures. The adjusted measures are not and should not be considered alternatives to net income or cash flows from operating, investing, or financing activities as defined by GAAP.

TAUBMAN CENTERS, INC. Table 5 - Reconciliation of Net Income to Beneficial Interest in EBITDA For the Periods Ended June 30, 2006 and 2005 (in thousands of dollars; amounts allocable to TCO may not recalculate due to rounding) Three Months Ended Year to Date 2006 2005 2006 2005 Net income 7,791 1,636 19,225 10,056 Add (less) depreciation and amortization (1): Consolidated businesses at 100% 33,315 33,570 66,704 63,069 Minority partners in consolidated joint ventures (2,874) (2,594) (5,997) (4,678) Share of unconsolidated joint ventures 6,360 7,588 12,701 15,857 Add (less) preferred interests and interest expense: Preferred distributions 615 615 1,230 1,230 Interest expense: Consolidated businesses at 100% 31,871 26,492 66,154 52,032 Minority partners in consolidated joint ventures (3,213) (1,384) (6,290) (2,650) Share of unconsolidated joint ventures 7,617 9,318 15,173 18,647 Add minority interests: Minority share of income of TRG 2,780 2,364 8,497 7,529 Distributions in excess of minority share of income of TRG 6,115 6,602 9,296 10,612 Distributions in excess of minority share of income of consolidated joint ventures 2,938 41 1,693 80 Beneficial Interest in EBITDA 93,315 84,248 188,386 171,784 TCO's average ownership percentage of TRG 65.1% 62.3% 64.7% 61.8% Beneficial Interest in EBITDA allocable to TCO 60,749 52,498 121,875 106,125

(1) Depreciation and amortization includes depreciation of center replacement assets recoverable from tenants, which were previously classified as recoverable expenses in the Company's financial statements. In order to be comparable to 2006 amounts, 2005 amounts have been restated to include depreciation of center replacement assets that were reimbursed in the period of acquisition. See Note 4 to Table 1 of this release.

TAUBMAN CENTERS, INC. Table 6 - Balance Sheets As of June 30, 2006 and December 31, 2005 (in thousands of dollars) As of June 30, 2006 December 31, 2005 Consolidated Balance Sheet of Taubman Centers, Inc. (1): Assets: Properties 3,311,749 3,081,324 Accumulated depreciation and amortization (766,109) (651,665) 2,545,640 2,429,659 Investment in Unconsolidated Joint Ventures 109,316 106,117 Cash and cash equivalents 79,091 163,577 Accounts and notes receivable, net 32,821 41,717 Accounts and notes receivable from related parties 3,782 2,400 Deferred charges and other assets 101,910 54,110 2,872,560 2,797,580 Liabilities: Notes payable 2,377,494 2,089,948 Accounts payable and accrued liabilities 213,952 235,410 Dividends and distributions payable 16,099 15,819 Distributions in excess of investments in and net income of Unconsolidated Joint Ventures 94,078 101,028 2,701,623 2,442,205 Preferred Equity of TRG 29,217 29,217 Shareowners' Equity: Series A Cumulative Redeemable Preferred Stock 45 Series B Non-Participating Convertible Preferred Stock 28 29 Series G Cumulative Redeemable Preferred Stock Series H Cumulative Redeemable Preferred Stock Common Stock 528 519 Additional paid-in capital 580,326 739,090 Accumulated other comprehensive income (loss) (5,144) (9,051) Dividends in excess of net income (434,018) (404,474) 141,720 326,158 2,872,560 2,797,580 Combined Balance Sheet of Unconsolidated Joint Ventures (2): Assets: Properties 922,456 1,076,743 Accumulated depreciation and amortization (303,915) (363,394) 618,541 713,349 Cash and cash equivalents 28,283 33,498 Accounts and notes receivable 14,615 23,189 Deferred charges and other assets 17,189 24,458 678,628 794,494 Liabilities: Notes payable 820,420 999,545 Accounts payable and other liabilities 39,535 59,322 859,955 1,058,867 Accumulated Deficiency in Assets: Accumulated deficiency in assets - TRG (138,269) (170,124) Accumulated deficiency in assets - Joint Venture Partners (40,226) (91,179) Accumulated other comprehensive income (loss) - TRG (2,242) (2,430) Accumulated other comprehensive income (loss) - Joint Venture Partners (590) (640) (181,327) (264,373) 678,628 794,494

(1) The June 30, 2006 balance sheet amounts include Cherry Creek Shopping Center, which the Company began consolidating upon the adoption of EITF 04-5 on January 1, 2006. The effect of adopting EITF 04-5 on the January 1, 2006 balance sheet was an increase in assets of approximately $128 million and liabilities of approximately $180 million, and a $52 million reduction of additional paid-in capital, representing the cumulative effect of change in accounting principle.

(2) Amounts exclude The Pier at Caesars, which TRG made a $4 million contribution to in January 2005. Amounts as of June 30, 2006 also exclude Cherry Creek Shopping Center, which the Company began consolidating upon the adoption of EITF 04-5.

TAUBMAN CENTERS, INC. Table 7 - 2006 Earnings Guidance (all Dollar amounts per common share on a diluted basis; amounts may not add due to rounding) Range for Year Ended December 31, Range 2006 Before for Year Equity and Equity and Ended Financing Financing December 31, Costs Costs(1) 2006 Guidance for Funds from Operations per common share 2.52 2.57 (0.09) 2.43 2.48 Real estate depreciation - TRG (1.68) (1.59) (1.68) (1.59) Depreciation of TCO's additional basis in TRG (0.13) (0.13) (0.13) (0.13) Distributions in excess of earnings allocable to minority interest (0.21) (0.13) (0.05) (0.26) (0.19) Guidance for net income (loss) allocable to common shareholders, per common share 0.51 0.72 (0.15) 0.36 0.57

(1) The Company recognized a charge of $2.1 million during the first quarter of 2006 in connection with the write-off of financing costs related to the pay-off of the loans on The Shops at Willow Bend. The Company also recognized charges of $4.7 million during the second quarter of 2006 in connection with the redemption of the Series A and Series I Preferred Stock. The Company expects to recognize a charge of $1.0 million during the third quarter of 2006 in connection with the write-off of financing costs related to the pay-off of the loan on Dolphin Mall, when it becomes prepayable in August 2006.