Sep. 22, 2009 (PR Newswire) --

BLOOMFIELD HILLS, Mich., Sept. 22 /PRNewswire-FirstCall/ --Taubman Centers, Inc. (NYSE: TCO) today announced the write down of the book values of The Pier Shops at Caesars (Atlantic City, N.J.) and Regency Square (Richmond, Va.) to fair value in the third quarter of 2009. This is expected to result in a reduction of earnings of $161 to $169 million, representing earnings and Funds from Operations of $1.95 to $2.05 per share.

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"It's disappointing to announce these impairment charges," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. "We've invested a significant amount of time and capital in these two properties. Unfortunately, the current economic environment has worked against our best efforts. It's important to note that these properties generate less than two percent of our net operating income and are estimated to be dilutive to 2009 Funds from Operations by $0.06 per share (before the impairment charges). The rest of our portfolio is performing well, our balance sheet is strong, our overall business is sound and our company is well positioned to move forward."

Under Generally Accepted Accounting Principles (GAAP), an impairment charge must be recognized whenever the book value of a long-lived asset is not considered to be recoverable and exceeds its fair value. The company's assessment is based on a center's expected future cash flows after all capital expenditures.

The Pier Shops at Caesars

Net Operating Income (NOI) generated from The Pier Shops at Caesars, although positive, is insufficient to cover debt service on the asset's $135 million non-recourse mortgage. Given long term prospects for the property, Taubman Centers' Board of Directors concluded that it is in the best interest of the company to discontinue its financial support of the center. The company intends to immediately begin discussions with the lender and, subject to the lender's future decisions, will continue management and leasing of the center.

As a result, the book value of The Pier will be written down by $106 to $111 million (the company's share of which is $100 to $105 million) to approximately $52 million. The company's entire cash investment to date is approximately $35 million.

The 282,000 square foot shopping center, which opened in 2006, sits at the midpoint of the Atlantic City Boardwalk on a pier over the Atlantic Ocean. Taubman acquired a minority interest in the development of The Pier in January 2005. In early 2007, management and leasing of the property was assumed and the company's interest was increased to 77.5 percent.