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Taubman's CEO Discusses Q2 2012 Results - Earnings Call Transcript

During this call we will also discuss non-GAAP financial measures as defined by SEC Regulation-G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release and in our supplemental information.

In addition, a replay of the call is provided through a link on the Investor Relations section of our website. When we get to questions, we ask that you limit them to two and then if you have more, queue up again. That way everyone has the opportunity to ask a question.

Now, let me turn the call over to Bobby.

Robert Taubman

Thanks Barbara and welcome everyone to our call. This was another strong quarter with outstanding fundamentals. NOI, up 8.2%, now up 8.8% for the first six months of the year. Sales per square foot up 8.4% for the quarter and 12 month trailing sales up 12% to a record $672. FFO, average rents per square foot and occupancy, all substantially up and we continue to make significant progress on our external growth initiatives.

First lets talk about sales. Sales per square foot climbed 8.4% for the quarter, a solid result. As we said all along, trees don’t grow to the sky and our streak of nine quarters of double-digit sales increases has come to an end. Nonetheless, we’ve always felt that the sales momentum, absent a significant external event would not fall off a cliff; 8% growth, while less than our nine-quarter trend is still a terrific number. We wouldn’t be surprised if over the next several quarters sales growth would continue to moderate.

Unisex apparel, shoes, beauty, electronics, gifts and home furnishings were particularly strong in the quarter. Fast food is increasing nicely, an indication of foot traffic. Harvard (ph) junior apparel and Fine Jewelry were little softer. We are seeing great performance at Louis Vuitton, Bath & Body, Victoria's Secret, Pink, American Eagle, H&M, Foot Locker, Oakley, Apple, Restoration Hardware, Z Gallerie and Zales; all up in the double digits. This is very positive for our leasing efforts.

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