SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(X) Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended December 31, 1999
Commission File Number 333-81577
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: The Taubman Company and Related
Entities Employee Retirement Savings Plan.
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office: Taubman Centers, Inc.,
200 East Long Lake Road, Suite 300, P. O. Box 200, Bloomfield Hills,
Michigan 48303-0200.
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
Financial Statements for the
Years Ended December 31, 1999 and 1998,
Supplemental Schedules for the Year Ended December 31, 1999, and
Independent Auditors' Report
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998:
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-10
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED
DECEMBER 31, 1999:
Item 27a - Schedule of Assets Held for Investment Purposes 11
Item 27d - Schedule of Reportable Transactions 12
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
INDEPENDENT AUDITORS' REPORT
Plan Administrator
The Taubman Company and
Related Entities Employee
Retirement Savings Plan
Bloomfield Hills, Michigan
We have audited the accompanying statement of net assets available for benefits
of The Taubman Company and Related Entities Employee Retirement Savings Plan
(the "Plan") as of December 31, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1999, and (2) reportable
transactions for the year ended December 31, 1999, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. Such supplemental schedules have been
subjected to the auditing procedures applied in our audit of the basic 1999
financial statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ Deloitte & Touche LLP
-----------------------------------
Detroit, Michigan
April 28, 2000
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
December 31
--------------------
1999 1998
---- ----
ASSETS:
Investments (Note 3):
Fixed income contracts $ 22,866,924 $ 22,621,751
Equity funds 1,146,252 1,508,615
Registered Investment Companies 96,275,645 80,426,140
Participant loans 3,084,808 3,219,327
------------ ------------
Total $123,373,629 $107,775,833
Receivables from employer 655,752 647,969
------------ ------------
NET ASSETS AVAILABLE
FOR BENEFITS $124,029,381 $108,423,802
============ ============
See notes to financial statements.
2
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
Years Ended December 31
-----------------------
1999 1998
---- ----
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT THE
BEGINNING OF THE YEAR $108,423,802 $ 92,231,721
------------ ------------
ADDITIONS (Note 4):
Basic employee contributions $ 3,598,790 $ 3,664,369
Employer contributions 2,546,225 2,682,204
Investment income 5,686,703 5,714,263
Net appreciation in fair value
of investments 10,650,761 10,526,720
Loan interest income 257,093 278,514
------------ ------------
Total additions $ 22,739,572 $ 22,866,070
DEDUCTIONS -
Benefit payments and withdrawals $ 7,133,993 $ 6,673,989
------------ ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT THE
END OF THE YEAR $124,029,381 $108,423,802
============ ============
See notes to financial statements.
3
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1. THE PLAN
The Taubman Company (Company) and Related Entities Employee Retirement
Savings Plan (Plan) is designed to enable certain employees of the
participating companies to systematically save funds to supplement their
retirement incomes through a salary reduction agreement. The Plan has been
amended and restated several times, the latest amendment being October 1,
1997, to comply with tax regulations and enhance benefits.
Related Entities - These are affiliated companies which have approved the
-----------------
Plan and are accepted for participation by the Board of Directors of the
Company's managing partner, Taub-Co.
Participants - Employees of the Company and Related Entities become
------------
participants if they are not covered by a collective bargaining agreement,
are 21 years old, and have completed their probationary period. Entry is
permitted monthly on the first day of the month following the one year
probationary period. An individual who is employed as an on-call or
temporary employee shall be eligible to participate in the Plan if the
individual completes 1,000 hours of service in a Plan year. As of December
31, 1999 and 1998, there were 1,482 and 1,414 participants, respectively,
in the Plan.
Basic Employee Contributions - A participant who elects to contribute to
-----------------------------
the Plan may make basic contributions from 3% to 14% of compensation,
subject to the limitations specified in the Plan and by tax regulations.
The maximum contribution of 14% is subject to the results of the actual
deferral percentage test as defined in the Plan and, therefore, can vary
from year to year. Voluntary participant contributions in excess of the
basic contribution are not permitted. In addition, contributions may be
rolled over from other qualified pension or profit-sharing plans at the
discretion of the Plan's administrative committee. No after-tax
contributions are permitted except to recharacterize employee contributions
in order to satisfy the nondiscrimination tests.
Employer Contributions - A monthly employer contribution, subject to the
-----------------------
limitations specified in the Plan and by tax regulations, is made by the
applicable participating company. The amount contributed is the following
percentage of compensation:
Basic Employer
Contribution Contribution
Percentage Percentage
0% 2%
3 3
4 4
5 5
6 6
7 or more 7
The Company also makes a supplemental employer contribution subject to
limitations specified in the Plan and by tax regulations.
4
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
Vesting - Other than company contributions, participant account balances
-------
are 100% vested. Company contributions are vested as follows:
Full Years
of Vesting
Service Percentage
1 10%
2 30
3 50
4 70
5 or more 100
Participants receive a year of vesting service as of each anniversary of
their hire date. The employee becomes fully vested at retirement age,
defined by the Plan as 65, or upon death or disability while employed.
Forfeitures - Nonvested contributions become forfeitures at the point the
-----------
participant terminates employment. Forfeitures reduce the cash required by
the participating companies to fund their contributions.
Allocations - Participants' accounts are valued daily.
-----------
Participant Loans - A participant may have a maximum of two loans, one
------------------
obtained during any 12 month period, at rates so stipulated by the Plan's
administrative committee. The sum of all loans to a participant cannot
exceed the lesser of 50 percent of the total vested accrued benefits of the
participant or $50,000 reduced by the highest outstanding balance of loans
during the one-year period ending on the day before the loan is granted.
Plan earnings are not allocated to the portion of the participant's account
balance borrowed. However, interest paid by the participant is credited to
the individual participant's account balances.
Withdrawals - Once during any 12 month period, a participant may withdraw
-----------
an amount from his rollover or prior Trust balance. Once during any 12
month period, a participant may request a hardship withdrawal from his
basic contribution account or, if fully vested, his employer contribution
accounts as defined in the Plan. The hardship withdrawal must be approved
by the administrative committee and, once permitted, the participant cannot
contribute to the Plan during the following 12 months.
Benefit Payments - A participant's account becomes payable as soon as the
-----------------
paperwork is submitted to the record keeper. Retirement benefits are
payable in a lump-sum, fixed periodic payments, or an annuity, as selected
by the participant. Other benefit payments are made in lump-sum
distributions. All vested benefits transfer to beneficiaries upon death of
the participant.
For a complete description of vesting and benefit provisions, reference
should be made to the Plan document, which is available to all
participants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
--------------------
prepared on the accrual basis of accounting.
Investments - The investments of the Plan are stated at fair value, as
-----------
determined by quoted market prices.
5
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
Net Appreciation/Depreciation on Investments includes net unrealized gains
---------------------------------------------
and losses in accordance with the policy of stating investments at fair
values.
Payment of Benefits - Benefits are recorded when paid.
-------------------
Security Transactions - Purchases and sales are accounted for on the trade
----------------------
date. Interest and dividend income are reported as earned on an accrual
basis. Net gains and losses are computed using the average cost.
Administrative Expenses - All administrative expenses of the Plan are
------------------------
currently being paid by the participating companies.
3. INVESTMENTS
Vanguard Fiduciary Trust Company is the Plan Trustee. Vanguard Group of
Investment Companies, as agent for the Plan Trustee, is the recordkeeper
and provider of investment funds for the Plan. The Plan enters into
transactions with parties-in-interest such as trustees or fund managers.
With the exception of the investment in Taubman Centers, Inc. - a company
stock fund and the Participant Loans, the following Plan investments are
held by Vanguard, the fund manager and trustee. Investments are summarized
by category below, with investments representing 5% or more of the Plan's
net assets at the beginning of the year separately identified.
December 31
---------------
1999 1998
---- ----
Investment Contract Fund -
Retirement Savings Trust $ 22,866,924 $ 22,621,751
Company Stock Fund -Taubman Centers, Inc. $ 1,146,252 $ 1,508,615
Registered Investment Companies:
Money Market Fund -
Prime Portfolio $ 2,787,541 $ 3,011,093
Bond Fund -
Long-Term Corporate Portfolio 1,274,046 1,582,941
Balanced Fund -
Wellington 11,504,997 12,062,174
Domestic Equity Funds -
Explorer 5,631,967 4,126,634
500 Portfolio Index Trust 52,184,977 43,805,122
Growth Index 6,584,846 3,428,064
U.S. Growth 8,376,845 6,306,121
Other 3,027,430 2,119,671
Foreign Equity Fund -
International Growth 3,791,004 2,809,113
REIT Index Portfolio 1,111,992 1,175,207
-------------- ------------
Total Registered Investment Companies $ 96,275,645 $ 80,426,140
Participant Loans 3,084,808 3,219,327
-------------- -----------
$ 123,373,629 $107,775,833
============== ============
6
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
4. FUND INFORMATION
Contributions, distributions to participants and investment income by fund
were as follows for the years ended December 31, 1999 and 1998. Investment
options which comprise less than 5% of the Plan's total net assets
available for benefits have been combined with funds having similar
investment objectives.
Years Ended December 31
-----------------------
1999 1998
---- ----
Basic Employee Contributions:
Fixed Income Contracts $ 511,982 $ 582,679
Money Market Fund -
Prime Portfolio 131,477 153,965
Bond Fund -
Long-Term Corporate Portfolio 74,537 89,169
Balanced Fund -
Wellington 395,814 464,763
Domestic Equity Funds -
Explorer 160,198 206,143
500 Portfolio Index Trust 1,265,520 1,234,631
Growth Index 352,827 144,298
U. S. Growth 351,945 323,205
Other 131,108 147,301
Foreign Equity Fund -
International Growth 112,768 133,158
REIT Index Portfolio 34,104 72,771
Company Stock Fund 76,510 112,286
---------- ----------
Total $3,598,790 $3,664,369
========== ==========
Employer Contributions:
Fixed Income Contracts $ 402,709 $ 475,056
Money Market Fund -
Prime Portfolio 116,917 135,481
Bond Fund -
Long-Term Corporate Portfolio 58,516 71,826
Balanced Fund -
Wellington 283,222 325,525
Domestic Equity Funds -
Explorer 118,155 156,811
Growth Index 201,885 84,622
500 Portfolio Index Trust 863,154 908,352
U. S. Growth 235,557 220,117
Other 102,550 100,039
Foreign Equity Fund -
International Growth 79,534 98,750
REIT Index Portfolio 25,391 37,288
Company Stock Fund 58,635 68,337
---------- ----------
Total $2,546,225 $2,682,204
========== ==========
7
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
4. FUND INFORMATION - CONTINUED
Years Ended December 31
-----------------------
1999 1998
---- ----
Investment Income:
Fixed Income Contracts $1,264,910 $1,211,172
Money Market Fund -
Prime Portfolio 132,766 115,228
Bond Fund -
Long-Term Corporate Portfolio 72,012 121,198
Balanced Fund -
Wellington 1,062,087 1,452,877
Domestic Equity Funds -
Explorer 568,838 47,918
500 Portfolio Index Trust 1,233,914 1,652,712
Growth Index 317,558 51,860
U. S. Growth 431,026 733,635
Other 284,639 119,683
Foreign Equity Fund -
International Growth 176,512 105,124
REIT Index Portfolio 73,582 1,980
Company Stock Fund 68,859 100,876
Participant Loans 257,093 278,514
------------ -----------
Total $ 5,943,796 $ 5,992,777
============ ===========
Net Appreciation (depreciation) in
fair value of Investments:
Bond Fund -
Long-Term Corporate Portfolio $ (164,491) $ 3,670
Balanced Fund -
Wellington (563,500) (93,879)
Domestic Equity Funds -
Explorer 890,675 118,415
500 Portfolio Index Trust 7,865,598 8,647,790
Growth Index 1,087,905 681,276
U. S. Growth 1,042,698 1,181,193
Other 314,342 (158,240)
Foreign Equity Fund -
International Growth 574,905 309,598
REIT Index Portfolio (120,678) (229,927)
Company Stock Fund (276,693) 66,824
----------- -----------
Total $10,650,761 $10,526,720
=========== ===========
8
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
4. FUND INFORMATION - CONTINUED
Deductions:
Fixed Income Contracts $ 2,491,761 $ 1,075,509
Money Market Fund -
Prime Portfolio 517,937 514,828
Bond Fund -
Long-Term Corporate Portfolio 47,426 116,469
Balanced Fund -
Wellington 641,793 878,610
Domestic Equity Funds -
Explorer 104,139 347,039
500 Portfolio Index Trust 1,977,738 2,422,376
Growth Index 170,784 45,498
U. S. Growth 409,791 621,224
Other 129,576 154,621
Foreign Equity Fund -
International Growth 169,189 149,122
REIT Index Portfolio 61,874 149,362
Company Stock Fund 46,872 82,475
Participant Loans 365,113 116,856
----------- -----------
Total $ 7,133,993 $ 6,673,989
=========== ===========
In accordance with the Plan, participants investing in Taubman Centers,
Inc. receive units of the stock rather than shares. The following is
information regarding value per unit:
1999 1998
---- ----
Participant Unit Data
Taubman Centers, Inc. -
Quarter ended March 31
Plan number of units outstanding 123,291 107,691
Net asset value per unit 10.46 11.17
Quarter ended June 30
Plan Number of units outstanding 122,067 116,030
Net asset value per unit 11.23 12.17
Quarter ended September 30
Plan number of units outstanding 117,906 127,237
Net asset value per unit 9.80 11.95
Quarter ended December 31
Plan number of units outstanding 125,137 128,393
Net asset value per unit 9.16 11.75
9
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
5. TERMINATION OF THE PLAN
In accordance with the Plan, if a participating company withdraws from or
terminates the Plan, all employees of such company will become fully vested
in their contribution account balances. In the event of termination, the
administrative committee, in its sole discretion, may direct payment of
such amounts in cash, in assets of the Plan, or in the form of immediate or
deferred payment annuity contracts.
6. INTERNAL REVENUE SERVICE STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated February 16, 1995, that the Plan, as amended and restated on
January 1, 1994, meets the requirements of Sections 401(a) and 401(k) of
the Internal Revenue Code and is exempt from federal income tax under
Section 501(a) of the Code. In management's opinion, the Plan continues to
be administered in accordance with the requirements of such sections.
10
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
<TABLE>
SCHEDULE H, Part 4, 4i Employer Number 38-3081510
AS OF DECEMBER 31, 1999 Plan Number 001
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NAME OF ISSUER DESCRIPTION OF INVESTMENTS COST CURRENT VALUE
<S> <C> <C> <C>
* Vanguard 500 Portfolio Index Trust
Stock Fund $25,322,805 $52,184,977
* Vanguard Retirement Savings Trust 22,866,924 22,866,924
* Vanguard Wellington, Stock and Bond
Balanced Fund 10,519,245 11,504,997
* Vanguard Explorer, Stock Fund 4,348,926 5,631,967
* Vanguard Extended Market Index Trust,
Stock Fund 852,410 988,255
* Vanguard Growth Index Trust, Stock Fund 4,897,605 6,584,846
* Vanguard Prime Portfolio, Money
Market Fund 2,787,541 2,787,541
* Vanguard Long-Term Corporate Portfolio
Bond Fund 1,402,107 1,274,046
* Taubman Centers, Inc. Company Stock Fund 1,264,761 1,146,252
* Vanguard International Growth, Stock Fund 2,948,055 3,791,004
* Vanguard U.S. Growth, Stock Fund 6,097,594 8,376,845
* Vanguard Small Cap, Stock Fund 1,662,830 1,755,016
* Vanguard REIT Index Portfolio, Real Estate Fund 1,348,332 1,111,992
* Vanguard Value Index Trust Stock Fund 292,907 284,159
* Loans to 367 participants Participant borrowings against their
individual account balances,
interest rates from 7.0% to
10.0% and maturing through
July 2009 3,084,808 3,084,808
----------- ------------
Total $89,696,850 $123,373,629
=========== ============
</TABLE>
Note - Cost includes accrued interest
* Denotes party-in-interest
11
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
<TABLE>
SCHEDULE H, Part 4, 4j Employer Number 38-3081510
YEAR ENDED DECEMBER 31, 1999 Plan Number 001
-----------------------------------------------------------------------------------------------------------------------------------
Security transactions which individually or in the aggregate exceed 5% of plan assets at the beginning of the year:
<CAPTION>
Name of Description No. of Purchase Selling Cost of Net Gain
Issuer of Asset Transactions Price** Price** Asset * (Loss)
<S> <C> <C> <C> <C> <C> <C>
Vanguard Retirement Savings 141 $5,356,615
Vanguard Retirement Savings 162 $5,111,441 $5,111,441 $ -0-
Vanguard 500 Index Fund 111 5,811,198
Vanguard 500 Index Fund 173 5,610,769 7,766,964 2,156,195
Vanguard Prime Money Market 150 7,409,458
Vanguard Prime Money Market 113 7,633,011 7,633,011 -0-
Vanguard Growth Index Fund 104 7,481,513
Vanguard Growth Index Fund 79 5,529,414 5,736,210 206,796
</TABLE>
* Cost includes accrued interest.
** Current value of asset on transaction date.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized on the 15th day of June, 2000.
THE TAUBMAN COMPANY AND RELATED
ENTITIES EMPLOYEE RETIREMENT
SAVINGS PLAN
By: Vanguard Fiduciary Trust Company,
as Trustee:
By: /s/ Dennis Simmons
----------------------------------
Its: Secretary
-----------------------------------
13
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
23 -- Consent of Deloitte & Touche LLP
14
