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, 1996
Commission File Number 33-80650
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, 1996 and 1995,
Supplemental Schedules for the Year Ended December 31, 1996, 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, 1996 AND 1995:
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED
DECEMBER 31, 1996:
Item 27a - Schedule of Assets Held for Investment Purposes 9
Item 27d - Schedule of Reportable Transactions 10
<PAGE>
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, 1996 and 1995, 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 generally accepted auditing
standards. 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, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
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, 1996, and (2) reportable
transactions for the year ended December 31, 1996, 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 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
- -------------------------
May 2, 1997
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- -------------------------------------------------------------------------------
December 31
------------------------
1996 1995
---- ----
ASSETS:
Investments (Note 3):
Fixed income contracts $21,382,881 $25,181,060
Equity funds 1,187,107 860,589
Registered Investment Companies 51,280,852 40,534,028
Participant loans 3,068,453 3,351,078
----------- -----------
Total $76,919,293 $69,926,755
Receivables from employer 443,123 568,364
----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $77,362,416 $70,495,119
=========== ===========
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
-------------------------
1996 1995
---- ----
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT THE
BEGINNING OF THE YEAR $70,495,119 $57,254,200
----------- -----------
ADDITIONS (Note 4):
Basic employee contributions $ 3,010,834 $ 3,127,358
Employer contributions 2,291,598 2,523,451
Investment income 3,936,170 3,965,632
Net appreciation in fair value
of investments 5,619,780 7,283,554
Loan interest income 230,753 255,275
----------- -----------
Total additions $15,089,135 $17,155,270
DEDUCTIONS -
Benefit payments and withdrawals 8,221,838 3,914,351
----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT THE
END OF THE YEAR $77,362,416 $70,495,119
=========== ===========
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, 1996 AND 1995
- --------------------------------------------------------------------------------
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 is an
amendment and restatement (initially effective January 1, 1983) of The
Taubman Company Profit- Sharing Trust (Trust) which was established on
December 1, 1957. The Plan has been amended and restated several times, the
latest of which was January 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. Effective January 1, 1996, 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, 1996 and 1995, there were 1,193 and 1,380 participants,
respectively, in the Plan.
Basic Employee Contributions - A participant who elects to contribute to the
Plan may make basic contributions from 3% to potentially 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 - Participant's accounts become payable as soon as the
paperwork is submitted to the recordkeeper. 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, the
majority of which are calculated by reference to published market quotations.
The Plan's investments in fixed income contracts are stated at contract value
which is cost plus accrued interest and approximates fair value. For the
years ended December 31, 1996 and 1995, the Plan's investment contracts have
average yields and crediting interest rates, fixed at 6.65% for Ohio National
Life and variable of 6.50% for Bankers Trust.
- 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. 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
-------------------
1996 1995
---- ----
Investment Contract Funds:
Vanguard Investment Contract Trust $17,671,100 $18,463,921
Other 3,711,781 6,717,139
----------- -----------
Total Fixed Income Contracts $21,382,881 $25,181,060
Company Stock Fund $ 1,187,107 $ 860,589
Registered Investment Companies:
Money Market Fund $ 1,777,178 $ 2,192,964
Bond Fund 908,330 1,112,929
Balanced Fund -
Vanguard Wellington Fund 9,092,704 8,592,842
Domestic Equity Funds:
Vanguard Explorer Fund 5,247,097 4,828,129
Vanguard 500 Portfolio Index Trust 29,668,895 23,281,638
Other 2,246,078 268,786
International Equity Fund 1,949,913 256,740
REIT Index Portfolio 390,657
------------ -----------
Total Registered Investment
Companies $51,280,852 $40,534,028
Participant Loans 3,068,453 3,351,078
----------- -----------
$76,919,293 $69,926,755
=========== ===========
The Plan enters into transactions with parties in interest such as trustees or
fund managers. As of and for the years ended December 31, 1996 and 1995, the
Plan had the following investments held by Vanguard, a fund manager and trustee:
Prime Portfolio Money Market Reserves, 500 Portfolio Index Trust -Stock Fund,
Investment Contract Trust, Explorer - Stock Fund, U.S. Growth Portfolio - Stock
Fund, Small Cap Stock Portfolio - Stock Fund, International Growth Portfolio -
Stock Fund, Wellington - Balanced Fund, Long-Term Corporate Bond Fund and the
REIT Index Portfolio - Real Estate Fund. The Plan also holds shares in Taubman
Centers, Inc., a company stock fund.
- 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, 1996 and 1995. 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
-----------------------
1996 1995
---- ----
Basic Employee Contributions:
Fixed Income Contracts $ 828,881 $1,240,058
Money Market Funds 163,561 169,026
Bond Fund 91,435 112,863
Balanced Fund -
Vanguard Wellington Fund 346,236 308,738
Domestic Equity Funds:
Vanguard Explorer Fund 249,494 283,331
Vanguard 500 Portfolio Index Trust 1,076,781 962,428
Other 124,060 7,935
International Equity Fund 80,204 4,241
REIT Index Portfolio 1,962
Company Stock Fund 48,220 38,738
---------- ----------
Total $3,010,834 $3,127,358
========== ==========
Employer Contributions:
Fixed Income Contracts $ 647,210 $1,068,017
Money Market Funds 121,804 11,805
Bond Fund 70,647 77,635
Balanced Fund -
Vanguard Wellington Fund 272,241 257,926
Domestic Equity Funds:
Vanguard Explorer Fund 205,586 248,113
Vanguard 500 Portfolio Index Trust 795,809 812,575
Other 73,924 8,310
International Equity Fund 64,198 4,535
REIT Index Portfolio 2,370
Company Stock Fund 37,809 34,535
---------- ----------
Total $2,291,598 $2,523,451
========== ==========
Investment Income:
Fixed Income Contracts $1,281,268 $1,809,476
Money Market Funds 93,803 100,936
Bond Fund 51,708 74,565
Balanced Fund -
Vanguard Wellington Fund 807,491 467,818
Domestic Equity Funds:
Vanguard Explorer Fund 362,403 520,707
Vanguard 500 Portfolio Index Trust 991,027 909,367
Other 183,979 9,227
International Equity Fund 77,992 5,666
REIT Index Portfolio 3,494
Company Stock Fund 83,005 67,870
Participant Loans 230,753 255,275
---------- -----------
Total $4,166,923 $4,220,907
========== ==========
- 7 -
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
4. FUND INFORMATION cont'd.
Years Ended December 31
-----------------------
1996 1995
---- ----
Net Appreciation (depreciation) in fair
value of Investments:
Bond Fund $ (48,991) $ 140,206
Balanced Fund -
Vanguard Wellington Fund 500,770 1,428,281
Domestic Equity Funds:
Vanguard Explorer Fund 264,350 534,919
Vanguard 500 Portfolio Index Trust 4,498,322 5,161,164
Other 76,751 (3,875)
International Equity Fund 56,517 3,004
REIT Index Portfolio 28,370
Company Stock Fund 243,691 19,855
---------- ----------
Total $5,619,780 $7,283,554
========== ==========
Distributions to Participants:
Fixed Income Contracts $4,079,810 $2,384,825
Money Market Funds 413,463 116,351
Bond Fund 78,264 18,393
Balanced Fund -
Vanguard Wellington Fund 855,758 133,978
Domestic Equity Funds:
Vanguard Explorer Fund 402,024 115,742
Vanguard 500 Portfolio Index Trust 1,607,294 741,711
Other 28,989 227
International Equity Fund 4,029
Company Stock 63,906 73,717
Participant Loans 688,301 329,407
---------- ----------
Total $8,221,838 $3,914,351
========== ==========
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 for Plan
operation.
- 8 -
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
<TABLE>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES Employer Number 38-3081510
AS OF DECEMBER 31, 1996 Plan Number 333
- ---------------------------------------------------------------------------------------------
<CAPTION>
NAME OF ISSUER DESCRIPTION OF INVESTMENTS COST CURRENT VALUE
<S> <C> <C>
* Vanguard 500 Portfolio Index Trust
Stock Fund $20,950,152 $29,668,895
* Vanguard Investment Contract Trust 17,671,100 17,671,100
* Vanguard Wellington, a Stock and Bond
Balanced Fund 7,603,591 9,092,704
* Vanguard Explorer, a Stock Fund 4,703,427 5,247,097
Ohio National Life 6.65% investment contract,
maturing September 15, 1997 2,592,027 2,592,027
* Vanguard Prime Portfolio, a Money
Market fund 1,777,178 1,777,178
Bankers Trust Variable rate investment contract,
(currently 6.50%), secured by
6.50% Federal Home Loan Mortgage
CMO maturing
July 15, 2016 1,119,754 1,119,754
* Vanguard Long-Term Corporate Portfolio,
a Bond Fund 903,242 908,330
* Taubman Centers, Inc. Company Stock Fund 976,056 1,187,107
* Vanguard International Growth Stock Fund 1,890,435 1,949,913
* Vanguard U.S. Growth Stock Fund 1,921,919 1,992,973
* Vanguard Small Cap Stock Fund 250,137 253,105
* Vanguard REIT Index Portfolio, a Real
Estate Fund 362,287 390,657
* Loans to 388
participants Participant borrowings against
their individual account
balances, interest rates from
6.75% to 12.0% and maturing
through November, 2006 3,068,453 3,068,453
----------- -----------
Total $65,789,758 $76,919,293
=========== ===========
</TABLE>
Note - Cost includes accrued interest
* Denotes party-in-interest
- 9 -
<PAGE>
THE TAUBMAN COMPANY AND RELATED ENTITIES
EMPLOYEE RETIREMENT SAVINGS PLAN
<TABLE>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS Employer Number 38-3081510
YEAR ENDED DECEMBER 31, 1996 Plan Number 333
- ----------------------------------------------------------------------------------------------------------------
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>
Vanguard Investment Contract Trust 161 $4,420,152
Vanguard Investment Contract Trust 192 $8,218,332 $8,218,332 $ -0-
Vanguard Index Trust 500 144 5,829,274
Vanguard Index Trust 500 158 4,282,479 3,376,202 906,277
Vanguard Wellington Fund 98 2,605,560
Vanguard Wellington Fund 122 2,677,536 2,298,949 378,587
Vanguard Explorer Fund 107 2,396,997
Vanguard Explorer Fund 118 2,301,625 2,150,435 151,190
</TABLE>
* Cost includes accrued interest.
- 10 -
<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 23rd date of June, 1997.
THE TAUBMAN COMPANY AND RELATED
ENTITIES EMPLOYEE RETIREMENT
SAVINGS PLAN
By: Vanguard Fiduciary Trust Company,
as Trustee:
By: /s/ R. Gregory Barton
-----------------------------------
Its: Vice President
-----------------------------------
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
23 -- Consent of Deloitte & Touche
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-80650 of the Taubman Realty Group Limited Partnership on Form S-8, of our
report dated May 2, 1997, appearing in this Annual Report on
Form 11-K of the Taubman Company and Related Entities Employee Retirement
Savings Plan for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
- -------------------------
June 23, 1997
