On Friday, Taubman Centers, Inc. (NYSE:TCO) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite revealed.
Craig Schmidt – Bank of America Merrill Lynch: The Sarasota project, will you be clubbing fees for the responsibilities you have in terms of management and leasing?
Robert S. Taubman – Chairman, President and CEO: Yes, Craig.
Craig Schmidt – Bank of America Merrill Lynch: Then the second thing, you touched on this but maybe a little bit more about your caution to guiding to the 4%, I mean, given your 9% in the first quarter that suggests about a 3% same-store NOI for the next three?
Lisa A. Payne – Vice Chairman and CFO: Yes, Craig. What I said on the call I want to emphasize that this was very much driven, the 9% by the recoveries and we look significantly better in the first quarter than frankly we’ve expected. There is a lot of volatility in CAM expenses and we would say that when you look at the fact that we’re expecting CAM recovery to be flat for the year, I think it will show you why we are really at a 4% level.
Christine McElroy – UBS: With regard to percentage rents, can you talk about what’s been driving the meaningful year-over-year increases that you continue to see in that line? Can it be attributed to any specific tenant segments, and do you have any percentage rent deals with Apple.
Robert S. Taubman – Chairman, President and CEO: I don’t think we can comment on one tenant, and what our deal is with them. I would say that historically all of our small tenant shops pay percentage rent. Percentage rent typically is always a small group of tenants that end up making up the balance of the majority of that percentage rent line item. Our sales have been unbelievable, and that group of tenants is doing very, very well. And I would say that over half of our categories of merchandise continue to perform at double-digit, and we’ve been saying that sort of quarter by quarter that we have a lot of categories of merchandise, not just one, is performing well. So, you’re getting different tenants beginning to pop their head up above the fixed rent lines and get into percentage rent. But percentage rent as a whole line item has always been modest. It’s always been about 4% – between, say, 3%, 4%, 5% at most over in our history, all percentage rent. So, one of the things we always try to do is especially with our shorter lease terms is to try to have the highest possible base rents so that in essence that guarantee puts the pressure on the tenant and puts less risk on the landlord, given volatility or time over the economy and individual retailer performances.
Christine McElroy – UBS: Then just with regard with Puerto Rico, just wondering if you could provide a little additional color on how the economics could potentially work with the landowner. If they elect to own up to 20% of the project, how would that work in terms of equity contribution to the construction cost and ultimately the cash flow distribution from the center, and will this be on a ground lease or does the $405 million cost include any expectation to buy out the land?
Robert S. Taubman – Chairman, President and CEO: No, it’s a CDO. We will own the land regardless of the 80% or 100% and the election to any of their interest will be on a pari passu basis. Their equity will have requirement for – their ownership will have requirement for equity and they’ll take their beneficial interest in debt as well.
Lisa A. Payne – Vice Chairman and CFO: There is a provision though that we may fund a portion of their investment, which we do in many of our deals, but if we do that we get a preference on that – a very good preference, and get our capital back on a priority basis, but that’s yet to be determined.