Taubman Centers, Inc. (TCO), a real estate investment trust (REIT), reported first quarter 2010 FFO (funds from operations) of 60 cents per share compared to 70 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income, while adjusted FFO excludes the impairment and restructuring charges.
The quarterly FFO per share included a non-cash charge of 3 cents relating to the ownership of The Pier Shops at Atlantic City, New Jersey. Although first quarter FFO decreased year-over-year, it was well within the guidance of the company.
Occupancy of the entire portfolio decreased marginally to 88.2% at quarter end from 88.8% in the year-earlier period. Taubman leased 91.2% of its overall portfolio during the quarter compared to 90.7% in the year-earlier quarter. Average rents in the overall portfolio were $43.20 per square foot, compared to $44.48 in the year-ago quarter. Mall tenant sales per square foot increased 10.8% year-over-year during the quarter. On a trailing 12-month basis, mall tenant sales were $509 per square foot.
Taubman has one of the strongest balance sheets in its sector. The company has moderate debt maturities in 2010. Furthermore, Taubman had $13.7 million of cash and cash equivalents at quarter end, providing it with additional flexibility to tide over the storm.
Taubman reiterated its earlier FFO guidance for full year 2010 in the range of $2.55 to $2.75 per share. We think Taubman is better positioned than many of its competitors due to its clean balance sheet and minimal debt maturity. In addition, the current dividend at 42 cents per share appears safe and the company is covering the payout with operating cash.
Read the full analyst report on “TCO”
Zacks Investment Research
