EX-99 3 tfocform8k1202sup.txt EXHIBIT 99.1 SUPPLEMENTAL OPERATING FINANCIALS Tanger Factory Outlet Centers, Inc. Supplemental Operating and Financial Data for the Quarter Ended 12/31/02 Tanger Factory Outlet Centers, Inc. Supplemental Operating and Financial Data December 31, 2002 1 Notice This Supplemental Operating and Financial Data may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect management's current views with respect to future events and financial performance relating to our re-merchandising strategy, the renewal and re-tenanting of space, tenant sales and sales trends, interest rates, funds from operations, the development of new centers, the opening of ongoing expansions, coverage of the current dividend and the impact of sales of land parcels. These forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those projected due to various factors including, but not limited to, the risks associated with general economic and local real estate conditions, the availability and cost of capital, our ability to lease our properties, our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition. For a more detailed discussion of the factors that affect our operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and December 31, 2002 (when available). This Supplemental Operating and Financial Data is not an offer to sell or a solicitation to buy any securities of the Company. Any offers to sell or solicitations to buy any securities of the Company shall be made only by means of a prospectus. 2 Table of Contents Section Page Quarterly Highlights from Press Release Dated February 25, 2002 4 Portfolio Data Geographic Diversification 8 Property Summary - Occupancy 9 Major Tenants 10 Lease Expirations 11 Leasing Activity 12 Financial Data Consolidated Balance Sheets 13 Consolidated Statements of Operations 14 FFO and FAD Analysis 15 Per Weighted Average Gross Leasable Area (GLA) Analysis 16 Debt Outstanding Summary 17 Future Scheduled Principal Payments 18 Investor Information 19 3 Quarterly Highlights from Press Release dated February 26, 2003 Greensboro, NC, February 26, 2003, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported funds from operations (FFO) for the year ended December 31, 2002 of $41.7 million, or $3.40 per share, as compared to FFO of $37.8 million, or $3.23 per share for 2001, representing a 5.3% per share increase. FFO for the fourth quarter of 2002 was $13.1 million, or $1.01 per share, as compared to FFO of $11.5 million, or $0.98 per share for the fourth quarter of 2001, representing a 3.1% per share increase. Net income for the year ended December 31, 2002 was $11.0 million, or $1.08 per share, as compared to $7.1 million, or $0.67 per share, for 2001, representing a 61.2% per share increase. Net income for the fourth quarter of 2002 was $5.2 million, or $0.51 per share, as compared to $3.1 million, or $0.34 per share, for the fourth quarter of 2001, representing a 50.0% per share increase. All FFO and net income per share amounts are on a diluted basis. A reconciliation of net income to FFO is presented on the supplemental information page of this press release. Tanger achieved the following results for the year ended December 31, 2002: o 98% year-end portfolio occupancy rate (a 200 basis point increase over 2001) o 280 leases signed, totaling over one million square feet, achieving an 87.6 % renewal rate and a 1.7% increase in base rent, on a cash basis, for re-tenanted and renewed space o Average initial base rent for new stores opened during 2002 was $16.54, an increase of $1.47 or 9.8% over the tenants who closed during 2002 o $1.5 billion in total tenant sales, equating to $294 per sq. ft. and a 1.4% increase on a same-space basis o Occupancy cost per square foot remained at an industry-leading low 7.2% o $42.2 million in 100% leased, quality factory outlet shopping center acquisitions o Completed 260,000 square foot factory outlet development in Myrtle Beach (opened 100% leased) o $21.6 million in non-core property dispositions o 1.0 million common shares issued in September 2002, generating approximately $28 million in net proceeds o Lowered debt level by $13.2 million and lowered weighted average borrowing cost by 70 basis points o Additional equity and lower debt significantly improved coverage ratios o $2.45 per share in common dividends paid (the 9th consecutive year of increased dividends) o 72.0% FFO pay out ratio provides adequate coverage of the dividend o 62.9% total return to shareholders (highest among all REITs included in the RMS Index) 4 Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, stated, "In 2002 we achieved a number of important milestones for the company. Through our disciplined investment activity, we continued to strategically expand our portfolio and further our national platform. Additionally, we continued to generate solid results with our core portfolio, achieving one of our highest occupancy rates on record, while maintaining high tenant sales per square foot and our renowned low tenant occupancy cost. We also enhanced our franchise name within the outlet industry by rolling out a number of innovative marketing initiatives throughout the year." Mr. Tanger continued, "The fundamentals of the outlet industry today are sound. Total tenant sales continue to increase each year and the supply/demand characteristics remain in balance. Looking ahead, with our strong operating platform and portfolio, we are well-positioned for continued growth in 2003 and beyond." National Platform Continues to Drive Solid Operating Results and Higher Same-Space Sales As of December 31, 2002, Tanger's portfolio totaled 34 factory outlet shopping centers diversified across 21 states, totaling 6.2 million square feet. The company's broad geographic representation and established brand name within the factory outlet industry continues to generate solid operating results. At December 31, 2002, the company's portfolio was 98% leased, representing a 200 basis point increase over its year-end 2001 occupancy rate of 96%. Tanger's 98% portfolio occupancy rate also represents the 22nd consecutive year since the company commenced operations in 1981 that it has achieved a year-end portfolio occupancy rate at or above 95%. During 2002, the company executed 280 leases totaling approximately 1,048,000 square feet. The company achieved a retention rate of 87.6% with existing tenants for the year and achieved a 1.7% increase in base rental revenue per square foot, on a cash basis, for re-tenanted and renewed space. The average initial base rent for new stores opened during 2002 was $16.54, an increase of $1.47 or 9.8% over the tenants who closed. As a result, the company's average base rental income per square foot increased to $14.44 per foot as of December 31, 2002 compared to $14.33 per foot at year-end 2001. The company continues to derive its rental income from a diverse group of retailers with no single tenant representing more than 6.7% of its gross leasable area as of December 31, 2002. During 2002, total reported sales reached a new record high for Tanger of approximately $1.5 billion. Additionally, same-space sales increased by 1.4% for the year ended December 31, 2002 and increased by 0.4% for the three months ended December 31, 2002 over the same-space sales for the comparable periods in 2001. Reported 2002 same-space sales equated to $294 per square foot, matching Tanger's 2001 per square foot record high. For the year ended December 31, 2002 reported same-store sales for tenants in operation since January 1, 2001, were down 0.8% compared to 2001. Fourth quarter 2002 reported same-store sales were down 1.9%. Average tenant occupancy costs across Tanger's portfolio remained at an industry-leading low level during 2002, averaging 7.2%, approximately in-line with the company's record 2001 low of 7.1%. 2002 Investment Activities Increase Portfolio by 13.8% & Provide Growth Opportunities During 2002, Tanger increased its portfolio under management by approximately 749,000 square feet through a balance of development and acquisition activities. In July 2002, Tanger celebrated the grand opening of its newly developed factory outlet shopping center in Myrtle Beach, South Carolina. The first phase of the property totals approximately 260,000 square feet and opened 100% leased. The property, which was developed and is managed and leased by Tanger, is owned through a joint venture of which Tanger owns a 50% interest. Total cost for the first phase were $34.6 million, of which Tanger's capital investment totaled $4.3 million and is currently yielding a return in excess of 20%. In November of 2002, Tanger commenced construction on a 64,000 square foot second phase, which 5 is currently scheduled for completion in the summer of 2003. Tanger's capital investment in the second phase is expected to be approximately $1.1 million with an expected return in excess of 20%. In September 2002, Tanger acquired a 325,000 square foot, 100% leased factory outlet shopping center located in Howell, Michigan, within the greater Detroit metropolitan region. The purchase price was $37.5 million, representing an approximate 12% capitalization rate on existing net operating income. In January 2003, Tanger acquired a 29,000 square foot, 100% leased expansion located contiguous with its existing factory outlet center in Sevierville, Tennessee. The purchase price was $4.7 million with an expected return of 10%. Tanger is also underway with the development of another 35,000 square foot expansion of the center. Tanger expects to complete the expansion during 2003 at a cost of $4 million with an expected return in excess of 13%. Upon completion of the expansion, the Sevierville center will total approximately 418,000 square feet. In addition to its development and acquisition activity, during 2002 Tanger sold two non-core assets. In June 2002, Tanger sold a non-core single tenant, 165,000 square foot property located in Ft. Lauderdale, Florida. The property was sold for $18.2 million, representing a capitalization rate of 8.8% on existing net operating income. In November 2002, Tanger sold a 23,417 square foot, non-core property located in Bourne, Massachusetts. The property was sold for $3.4 million, representing a capitalization rate of 9.6% on existing net operating income. 2002 Financing Activities Improve Balance Sheet and Extend Debt Maturities In September 2002, Tanger raised approximately $28 million in net equity proceeds through the sale of 1.0 million newly issued common shares. The company utilized the proceeds to fund its acquisition of the factory outlet center in Howell, Michigan. Additionally, during 2002 Tanger increased its credit line capacity to $85 million and extended its credit lines' maturities to June 2004. During the fourth quarter of 2002, Tanger repurchased $5.5 million of its outstanding 7 7/8% public senior unsecured notes that mature in October 2004. To date, during 2001 and 2002, Tanger has purchased $24.9 million of its higher coupon senior notes at par or below. During 2002, Tanger reduced its debt outstanding, lowered its overall borrowing costs and increased its unencumbered pool of assets. As of December 31, 2002, the company had approximately $345.0 million of debt outstanding, as compared to $358.2 million outstanding at year-end 2001. Of the $345.0 million outstanding as of December 31, 2002, $296.0 million, or 85.8% of its total debt, was fixed rate, long-term debt. At December 31, 2002, Tanger had $20.5 million outstanding on its lines of credit. In total, Tanger's weighted average borrowing cost during 2002 was 8.09%, as compared to 8.79% during 2001. Additionally, as of December 31, 2002, 61% of Tanger's real estate assets were unencumbered as compared to 59% as of year-end 2001. In 2003 Tanger Expects to Continue Growing FFO Per Share Based on current market conditions, the strength and stability of its core portfolio and the company's development and acquisition pipeline, Tanger currently believes its FFO for 2003 will be between $3.43 and $3.51 per share. Due to the seasonal nature of the factory outlet industry, which typically experiences a greater demand for space from seasonal tenants in the second half of each year and high volume tenants that pay rent based on a percentage of their monthly sales, which are higher during the later months of the year, Tanger currently expects 2003 FFO to range between $.77 and $.79 per share for the first quarter, $.81 to $.83 per share for the second quarter, $.87 to $.89 per share for the third quarter and $.98 to $1.00 per share for the fourth quarter. 6 Year-End Conference Call to Held on February 26, 2002 at 3:00 P.M. (EST) Tanger will host a conference call to discuss its 2002 results for analysts, investors and other interested parties on Wednesday, February 26, 2003, at 3:00 P.M. eastern time. To access the conference call, listeners should dial 1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers Fourth Quarter and Year End Financial Results call. Alternatively, this call is being webcast by CCBN and can be accessed at Tanger Factory Outlet Centers, Inc.'s web site at www.tangeroutlet.com, and click on Corporate News. A telephone replay of the call will be available from February 26, 2003 at 5:00 P.M eastern time through March 5, 2003 at 11:59 A.M. by dialing 1-800-642-1687, conference ID # 7978733. An online archive of the broadcast will also be available through March 5, 2003. About Tanger Factory Outlet Centers Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated, self-administered and self-managed publicly-traded REIT, presently has ownership interests in or management responsibilities for 34 centers in 21 states coast to coast, totaling approximately 6.2 million square feet of gross leasable area. We are filing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended December 31, 2002. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com. This press release may contain forward-looking statements regarding our re-merchandising strategy, the renewal and re-tenanting of space, tenant sales and sales trends, interest rates, fund from operations, the development of new centers, the opening of ongoing expansions, coverage of the current dividend and the impact of sales of land parcels. These forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those projected due to various factors including, but not limited to, the risks associated with general economic and local real estate conditions, the availability and cost of capital, our ability to lease our properties, our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition. For a more detailed discussion of the factors that affect our operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2001. 7
Geographic Diversification ----------------------------------------------------------------------------------------------------- As of December 31, 2002 ----------------------------------------------------------------------------------------------------- State # of Centers GLA % of GLA ----------------------------- ----------------------- ------------------- --------------------------- Georgia 4 950,590 17% New York 1 729,238 13% Texas 2 619,426 11% Tennessee 2 448,535 8% Michigan 2 437,651 8% Missouri 1 277,494 5% Iowa 1 277,230 5% South Carolina (1) 1 260,033 5% Pennsylvania 1 255,059 4% Louisiana 1 245,199 4% Florida 1 198,789 3% North Carolina 2 187,702 3% Arizona 1 184,768 3% Indiana 1 141,051 3% Minnesota 1 134,480 2% California 1 105,950 2% Maine 2 84,397 1% Alabama 1 80,775 1% New Hampshire 2 61,745 1% West Virginia 1 49,252 1% ----------------------------- ----------------------- ------------------- --------------------------- Total 29 5,729,364 100% ----------------------------- ----------------------- ------------------- --------------------------- (1) Includes one center totaling 260,033 sq. ft. of which Tanger owns a 50% interest through a joint venture arrangement.
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Property Summary - Occupancy ----------------------------- --------------- -------------- -------------- --------------- -------------- -------------- % % % % % Total GLA Occupied Occupied Occupied Occupied Occupied Location 12/31/02 12/31/02 09/30/02 06/30/02 03/31/02 12/31/01 ----------------------------- --------------- -------------- -------------- --------------- -------------- -------------- Riverhead, NY 729,238 100% 99% 99% 98% 100% San Marcos, TX 441,936 100% 98% 98% 97% 98% Sevierville, TN 353,977 100% 100% 100% 100% 100% Commerce II, GA 342,556 99% 96% 97% 95% 99% Howell, MI 325,231 100% 100% n/a N/a n/a Branson, MO 277,494 99% 100% 98% 94% 100% Williamsburg, IA 277,230 100% 99% 98% 97% 96% Myrtle Beach, SC (1) 260,033 100% 100% 100% N/a n/a Lancaster, PA 255,059 98% 96% 96% 94% 100% Locust Grove, GA 248,854 100% 100% 98% 100% 98% Gonzales, LA 245,199 99% 98% 96% 97% 97% Fort Myers, FL 198,789 99% 97% 93% 96% 97% Commerce I, GA 185,750 90% 87% 90% 84% 79% Casa Grande, AZ 184,768 96% 90% 89% 89% 94% Terrell, TX 177,490 100% 100% 95% 96% 94% Dalton, GA 173,430 98% 98% 96% 90% 94% Seymour, IN 141,051 80% 80% 76% 73% 76% North Branch, MN 134,480 100% 100% 100% 100% 100% West Branch, MI 112,420 100% 100% 98% 100% 95% Barstow, CA 105,950 62% 57% 57% 59% 76% Blowing Rock, NC 105,448 100% 100% 100% 100% 100% Pigeon Forge, TN 94,558 97% 94% 100% 100% 96% Nags Head, NC 82,254 100% 100% 100% 100% 100% Boaz, AL 80,775 97% 91% 93% 93% 93% Kittery I, ME 59,694 100% 100% 100% 100% 100% LL Bean, NH 50,745 100% 100% 100% 100% 100% Martinsburg, WV 49,252 69% 51% 57% 73% 93% Kittery II, ME 24,703 94% 94% 94% 94% 100% Clover, NH 11,000 100% 100% 100% 100% 100% Bourne, MA n/a n/a 100% 100% 100% 100% Ft Lauderdale, FL n/a n/a n/a n/a 100% 100% ----------------------------- --------------- -------------- -------------- --------------- -------------- -------------- Total 5,729,364 98% 96% 96% 95% 96% ----------------------------- --------------- -------------- -------------- --------------- -------------- --------------
[GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS] Portfolio Weighted Average Occupancy at the End of Each Period -------------------------------------------------------------- 12/02 09/02 06/02 03/02 12/01 09/01 06/01 03/01 12/00 98% 96% 96% 95% 96% 95% 94% 95% 96% (1) Includes one center totaling 260,033 sq. ft. of which Tanger owns a 50% interest through a joint venture arrangement. 9
Major Tenants ---------------------------------------------------------------------------------------- Ten Largest Tenants As of December 31, 2002 ------------------------------------------- ----------- -------------- ----------------- # of % of Tenant Stores GLA Total GLA ------------------------------------------- ----------- -------------- ----------------- The Gap, Inc. 37 386,111 6.7% Phillips-Van Heusen 72 322,964 5.6% Liz Claiborne 38 312,655 5.5% Reebok International 26 186,561 3.3% Dress Barn, Inc. 20 143,512 2.5% Sara Lee Corporation 32 123,040 2.1% Mikasa 15 120,086 2.1% Brown Group Retail 24 118,246 2.1% Polo Ralph Lauren 15 106,566 1.9% VF Factory Outlet 4 105,697 1.8% ------------------------------------------- ----------- -------------- ----------------- Total of All Listed Above 283 1,925,438 33.6% ------------------------------------------- ----------- -------------- ----------------- (1) Includes one center totaling 260,033 sq. ft. of which Tanger owns a 50% interest through a joint venture arrangement.
10 Lease Expirations as of December 31, 2002 [GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS] Percentage of Total Gross Leasable Area (1) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 15 22 15 15 16 7 2 2 1 3 2 [GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS] Percentage of Total Annualized Base Rent (1) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 11 22 16 16 20 7 2 1 1 3 1 (1) Includes one center totaling 260,033 sq. ft. of which Tanger owns a 50% interest through a joint venture arrangement. 11
Leasing Activity ---------------------------------------------------- ------------- -------------- ------------- ------------ ------------ Year to 03/31/02 06/30/02 09/30/02 12/31/02 Date ---------------------------------------------------- ------------- -------------- ------------- ------------ ------------ Re-tenanted Space: Number of leases 24 10 18 10 62 Gross leasable area 93,943 37,653 59,821 37,690 229,107 New base rent per square foot $13.93 $18.20 $16.62 $16.39 $15.74 Prior base rent per square foot $12.75 $18.34 $16.79 $15.31 $15.14 Percent increase in rent per square foot 9.2% (0.8%) (1.0%) 7.1% 3.9% Renewed Space: Number of leases 115 33 52 18 218 Gross leasable area 403,956 129,040 211,221 74,331 818,548 New base rent per square foot $16.24 $18.22 $12.09 $11.07 $15.02 Prior base rent per square foot $15.49 $17.44 $13.34 $11.24 $14.86 Percent increase in rent per square foot 4.8% 4.5% (9.4%) (1.5%) 1.1% Total Re-tenanted and Renewed Space: Number of leases 139 43 70 28 280 Gross leasable area 497,899 166,693 271,042 112,021 1,047,655 New base rent per square foot $15.81 $18.22 $13.09 $12.86 $15.18 Prior base rent per square foot $14.97 $17.64 $14.08 $12.61 $14.92 Percent increase in rent per square foot 5.6% 3.3% (7.0%) 2.0% 1.7%
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Consolidated Balance Sheets (dollars in thousands) ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- 12/31/02 09/30/02 06/30/02 03/31/02 12/31/01 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Assets Rental Property Land $51,274 $52,345 $50,176 $60,196 $60,158 Buildings 571,125 571,826 535,438 541,010 539,108 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total rental property 622,399 624,171 585,614 601,206 599,266 Accumulated depreciation (174,199) (168,327) (161,612) (155,614) (148,950) ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total rental property - net 448,200 455,844 424,002 445,592 450,316 Cash 1,072 209 204 210 515 Deferred charges - net 10,104 10,494 10,465 11,084 11,413 Other assets 18,299 13,543 30,783 12,183 14,028 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total assets 477,675 $480,090 $465,454 $469,069 $476,272 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Liabilities & Shareholders' Equity Liabilities Debt Senior, unsecured notes $150,109 $155,609 $155,609 $155,609 $160,509 Mortgages payable 174,421 175,018 175,603 176,176 176,736 Lines of credit 20,475 16,269 26,625 27,786 20,950 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total debt 345,005 346,896 357,837 359,571 358,195 Construction trade payables 3,310 4,041 4,141 3,934 3,722 Accounts payable & accruals 15,095 14,743 12,943 11,278 16,478 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total liabilities 363,410 365,680 374,921 374,783 378,395 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Minority interest 23,630 23,727 19,326 20,386 21,506 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Shareholders' equity Preferred shares 1 1 1 1 1 Common shares 90 90 80 80 79 Paid in capital 161,192 160,589 138,177 137,684 136,529 Distributions in excess of net income (70,485) (69,672) (66,619) (63,370) (59,534) Accum. other comprehensive (loss) (163) (325) (432) (495) (704) ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total shareholders' equity 90,635 90,683 71,207 73,900 76,371 ---------------------------------------------------- ------------- ------------ ------------- ------------- -------------- Total liabilities & shareholders' equity $477,675 $480,090 $465,454 $469,069 $476,272 ---------------------------------------------------- ------------- ------------ ------------- ------------- --------------
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Consolidated Statements of Operations (dollars and shares in thousands) -------------------------------------------------------------------------------------------------------- ------------------------ Three Months Ended YTD -------------------------------------------------------------------------------------------------------- ------------------------ 12/02 09/02 06/02 03/02 12/01 12/02 12/01 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Revenues Base rentals $20,545 $18,724 $18,417 $18,066 $19,188 $75,755 $73,263 Percentage rentals 1,602 778 581 597 1,287 3,558 2,735 Expense reimbursements 8,618 7,375 7,297 7,260 7,497 30,550 29,498 Other income 1,116 1,044 583 564 849 3,304 2,770 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Total revenues 31,881 27,921 26,878 26,487 28,821 113,167 108,266 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Expenses Property operating 10,217 8,616 8,639 8,611 8,348 36,083 33,970 General & administrative 2,237 2,623 2,092 2,275 2,130 9,228 8,227 Interest 7,042 7,171 7,118 7,129 7,297 28,460 30,134 Depreciation & amortization 7,406 7,184 7,099 7,066 7,126 28,754 28,145 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Total expenses 26,902 25,594 24,948 25,081 24,901 102,525 100,476 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Income before equity in earnings of unconsolidated joint ventures, minority interest, discontinued operations and extraordinary item 4,979 2,327 1,930 1,406 3,920 10,642 7,790 Equity in earnings of unconsolidated joint ventures 142 317 (75) 8 -- 392 -- Minority interest (1,175) (591) (388) (252) (962) (2,406) (1,665) -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Income from continuing operations 3,946 2,053 1,467 1,162 2,958 8,628 6,125 Discontinued operations (1) 1,214 255 627 283 305 2,379 1,231 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Income before extraordinary item 5,160 2,308 2,094 1,445 3,263 11,007 7,356 Extraordinary item - loss on early extinguishments of debt -- -- -- -- (114) -- (244) -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Net income 5,160 2,308 2,094 1,445 3,149 11,007 7,112 Less applicable preferred share dividends (442) (443) (442) (444) (443) (1,771) (1,771) -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Net income available to common shareholders $4,718 $1,865 $1,652 $1,001 $2,706 $9,236 $5,341 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Basic earnings per common share: -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Income from continuing operations $.39 $.19 $.13 $.09 $.32 $.82 $.55 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Net income $.52 $.22 $.21 $.13 $.34 $1.11 $.67 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Diluted earnings per common share: -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Income from continuing operations $.38 $.19 $.12 $.09 $.32 $.80 $.55 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Net income $.51 $.22 $.20 $.12 $.34 $1.08 $.67 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- Weighted average common shares: Basic 9,047 8,269 8,015 7,948 7,930 8,322 7,926 Diluted 9,279 8,490 8,229 8,028 7,946 8,514 7,948 -------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ----------- (1) In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets", the results of operations for property disposed of during the year have been reported above as discontinued operations for both the current and prior periods presented. Includes gains on the sale of two previously leased outparcels of land of $318 for the three months ended and $561for the year ended December 31, 2002 and gains on the sale of two real estate properties of $1,242 for the three months ended and $1,702 for the year ended December 31, 2002.
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FFO and FAD Analysis (dollars and shares in thousands) ---------------------------------------- ---------------------------------------------------------------- ------------------------ Three Months Ended YTD ---------------------------------------- ---------------------------------------------------------------- ------------------------ 12/02 09/02 06/02 03/02 12/01 12/02 12/01 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds from operations: Net income $5,160 $2,308 $2,094 $1,445 $3,149 $11,007 $7,112 Adjusted for - Extraordinary item -- -- -- 114 -- 244 Minority interest 1,175 591 388 252 962 2,406 1,665 Minority interest, depreciation and amortization in discontinued operations 417 110 336 237 224 1,102 898 Depreciation and amortization uniquely significant to real estate - wholly owned 7,336 7,107 7,025 6,993 7,054 28,460 27,849 Depreciation and amortization uniquely significant to real estate - joint ventures 255 168 -- -- -- 422 -- Gain on sale of real estate (1,242) -- (460) -- -- (1,702) -- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds from operations $13,101 $10,284 $9,383 $8,927 $11,503 $41,695 $37,768 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds from operations per share $1.01 $.84 $.78 $.76 $.98 $3.40 $3.23 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds available for distribution: Funds from operations $13,101 $10,284 $9,383 $8,927 $11,503 $41,695 $37,768 Plus - Corporate depreciation excluded above 71 77 75 73 72 295 296 Amortization of finance costs 312 313 289 303 330 1,217 1,660 Straight line rent adjustment 55 91 60 41 73 248 342 Less - 2nd generation tenant allowances (455) (136) (429) (1,206) (1,337) (2,226) (6,005) Capital improvements (737) (899) (578) (370) (803) (2,584) (3,401) ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds available for distribution $12,347 $9,730 $8,800 $7,768 $9,838 $38,645 $30,660 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Funds available for distribution per share $.95 $.79 $.73 $.66 $.84 $3.15 $2.62 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- Dividends paid per share $.6125 $.6125 $.6125 $.61 $.61 $2.4475 $2.4375 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- FFO payout ratio 61% 73% 79% 80% 62% 72% 75% ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ---------- FAD payout ratio 64% 78% 84% 92% 73% 78% 93% Diluted weighted average common shares 13,035 12,245 11,984 11,787 11,705 12,271 11,707 ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- ----------
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Per Weighted Average Gross Leasable Area (GLA) Analysis ----------------------------------------- ----------------------------------------------------------------- ----------------------- Three Months Ended YTD ----------------------------------------- ----------------------------------------------------------------- ----------------------- 12/02 09/02 06/02 03/02 12/01 12/02 12/01 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- GLA open at end of period - Wholly owned (000's) 5,469 5,493 5,167 5,332 5,332 5,469 5,332 Partially owned (000's) (1) 260 260 260 -- -- 260 -- Managed properties (000's) 457 434 105 105 105 457 105 Total GLA open at end of period 6,186 6,187 5,532 5,437 5,437 6,186 5,437 Weighted average GLA (000's) (2) 5,469 5,222 5,144 5,144 5,142 5,245 5,111 End of period occupancy (1) 98% 96% 96% 95% 96% 98% 96% PER SQUARE FOOT --------------- Revenues Base rentals $3.76 $3.59 $3.58 $3.51 $3.73 $14.44 $14.33 Percentage rentals .29 .15 .11 .12 .25 .68 .54 Expense reimbursements 1.58 1.42 1.41 1.46 5.82 5.77 1.41 Other income .20 .20 .11 .11 .17 .63 .54 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Total revenues 5.83 5.35 5.22 5.15 5.61 21.57 21.18 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Expenses Property operating 1.87 1.65 1.68 1.67 1.62 6.88 6.65 General & administrative .41 .50 .41 .44 .41 1.76 1.61 Interest 1.29 1.37 1.38 1.39 1.42 5.43 5.90 Depreciation & amortization 1.35 1.38 1.38 1.38 1.39 5.48 5.51 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Total expenses 4.92 4.90 4.85 4.88 4.84 19.55 19.67 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Income before equity in earnings of unconsolidated joint ventures, minority interest, discontinued operations and extraordinary item $.91 $.45 $.37 $.27 $.77 $2.02 $1.51 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Net operating income $3.55 $3.19 $3.12 $3.03 $3.57 $12.94 $12.93 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- Funds from operations $2.40 $1.97 $1.82 $1.74 $2.24 $7.95 $7.39 ----------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ---------- (1) Includes one center totaling 260,033 sq. ft. of which Tanger owns a 50% interest through a joint venture arrangement. (2) Represents GLA of wholly owned operating properties weighted by months of operation. GLA is not adjusted for fluctuations in occupancy that may occur subsequent to the original opening date. Excludes GLA of properties for which their results are included in discontinued operations.
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Debt Outstanding Summary (dollars in thousands) -------------------------------------------------------------------------------------------------------- As of December 31, 2002 -------------------------------------------------------------------------------------------------------- Principal Interest Maturity Balance Rate Date ----------------------------------------- -------------- ------------------------------ ---------------- Mortgage debt Lancaster, PA $14,516 9.770% 04/10/05 Commerce I, GA 8,288 9.125% 09/10/05 Branson, MO 24,000 Libor + 1.75% 03/26/06 Commerce II, GA (1) 29,500 Libor + 1.75% 03/26/06 Dalton, GA 11,133 7.875% 04/01/09 Kittery I, ME 6,335 7.875% 04/01/09 San Marcos I, TX 18,910 7.875% 04/01/09 San Marcos II, TX 19,036 7.980% 04/01/09 West Branch, MI 7,067 7.875% 04/01/09 Williamsburg, IA 19,429 7.875% 04/01/09 Blowing Rock, NC 9,655 8.860% 09/01/10 Nags Head, NC 6,552 8.860% 09/01/10 ----------------------------------------- -------------- ------------------------------ ---------------- Total mortgage debt 174,421 ----------------------------------------- -------------- ------------------------------ ---------------- Corporate debt Unsecured credit facilities 20,475 Libor + (1.60% to 1.75%) 06/30/04 1997 Senior unsecured notes 50,109 7.875% 10/24/04 2001 Senior unsecured notes 100,000 9.125% 02/15/08 ----------------------------------------- -------------- ------------------------------ ---------------- Total corporate debt 170,584 ----------------------------------------- -------------- ------------------------------ ---------------- Total debt $345,005 ----------------------------------------- -------------- ------------------------------ ---------------- (1) $25 million of this loan has been fixed until 01/27/03 at 7.72% through the use of an interest rate swap agreement.
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Future Scheduled Principal Payments (dollars in thousands) ------------------------------------------------------------------------------------------- As of December 31/2002 ------------------------------------------------------------------------------------------- Scheduled Total Amortized Balloon Schedule Year Payments Payments Payments ------------------------- -------------------- --------------------- ---------------------- 2003 $2,519 -- $2,519 2004 (1) 2,740 70,584 73,324 2005 2,524 20,576 23,100 2006 2,168 53,500 55,668 2007 2,349 -- 2,349 2008 2,545 100,000 102,545 2009 967 70,474 71,441 2010 181 13,878 14,059 2011 -- -- -- 2012 -- -- -- 2013 & thereafter -- -- -- ------------------------- -------------------- --------------------- ---------------------- $15,993 $329,012 $345,005 ------------------------- -------------------- --------------------- ---------------------- (1) Balloon payments in 2004 include $20,475 relating to amounts outstanding under the unsecured credit facilities.
18 Investor Information Tanger Outlet Centers welcomes any questions or comments from shareholders, analysts, investment managers, media and prospective investors. Please address all inquiries to our Investor Relations Department. Tanger Factory Outlet Centers, Inc. Investor Relations Phone: (336) 292-3010 ext 6865 Fax: (336) 297-0931 e-mail: tangermail@tangeroutlet.com --------------------------- Mail: Tanger Factory Outlet Centers, Inc. 3200 Northline Avenue Suite 360 Greensboro, NC 27408 19