UPDATE 2-Taubman Centers posts Q4 loss, beats Street view

Wed Feb 11, 2009 11:08pm GMT

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* Q4 FFO loss of 55 cents/share

* Q4 FFO without impairment $1/share

* Sees full-year 2009 FFO $2.69 to $2.94/share (Adds analysts' expectations, company forecast, sales per square foot, CEO comment, stock activity)

NEW YORK, Feb 11 (Reuters) - Taubman Centers Inc (TCO.N), which builds and operates high-end malls, reported a loss in quarterly funds from operations (FFO) on Wednesday, due to a charge from a court battle to build a center in a New York suburb.

Taubman posted a fourth-quarter FFO loss of $43.4 million, or 55 cents per share, versus positive FFO of $70.3 million, or 87 cents per share per share, in the year-earlier quarter.

The results included a $115.9 million charge after a New York state appeals court reversed a favorable decision that had ordered the town of Oyster Bay to issue a special use permit for The Mall at Oyster Bay. The charge includes the costs of court-related procedures and previous development.

The quarterly FFO, a performance measure for a real estate investment trust, also includes an $8.3 million charge related to a Taubman project in Sarasota, Florida, put on hold.

Excluding the charges, Taubman posted positive FFO of $1 per share, easily beating the average analyst estimate of 81 cents per share.

The luxury retail market has been pummeled as the recession brought layoffs at banks and hedge funds. Sales at Taubman centers fell 13.7 percent in the quarter to average $539 per square foot.

"After 22 consecutive quarters of sales increases, we experienced a dramatic reversal that began in mid September and occurred nearly across the board," Robert Taubman, the chairman and chief executive, said in a statement.

Some luxury retailers have reduced demand for space at malls. The company also experienced a high level of lease cancellations during the quarter, Robert Taubman said in a statement.

At the end of the quarter, occupancy rate fell to 90.3 percent from 91.2 percent a year earlier due to bankruptcies of companies at three big-box stores in Taubman centers.

Taubman forecast full-year 2009 FFO in a range of $2.69 to $2.94 a share, including a first-quarter charge of $2.6 million from a workforce reduction. It also includes 3 cents a share for ongoing expenditures on the Oyster Bay project and 10 cents a share related to interest that will no longer be capitalized.

Excluding the job cuts charge, Taubman expects 2009 adjusted FFO to be in the range of $2.72 to $2.97 per diluted share.

Taubman has one of the strongest balance sheets among retail real estate investment trusts. It has no maturities until fall 2010, when $264 million in loans, its share of three property-specific loans, mature.

Taubman, which owns or manages 24 shopping centers, has secured credit lines totaling $590 million that mature in 2011. There is a one-year extension on $550 million of that sum. At the end of 2008, Taubman had $350 million available on its credit lines.

In after-hours activity, Taubman shares traded at $18.83, unchanged from their close on the New York Stock Exchange. (Reporting by Ilaina Jonas; editing by Jeffrey Benkoe)

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