Taubman Writes Down Value of Two Properties

BLOOMFIELD HILLS, MI-Taubman Centers Inc. announced it is writing down the book values of two of its properties to align with fair value this quarter. The REIT will write down the value of The Pier Shops at Caesars in Atlantic City, NJ and Regency Square in Richmond, VA. The action will produce a reduction of earnings between $161 million and $169 million, representing earnings and funds from operations of $1.95 to $2.05 per share.

“It’s disappointing to announce these impairment charges,” Robert S. Taubman, chairman, president and CEO of Taubman, says. “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.”

By Generally Accepted Accounting Principles (GAAP), an impairment charge must be noted in the case that the book value of a long-lived asset exceeds its fair value and is not believed to be recoverable. Taubman’s decision to write down the properties was based on their expected future cash flows after capital expenditures.