-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KDzj5NQcYh3FTG7e0Fmh9lU57rQZ3OHq88fVFCIEjrkNtauEITWjvtFrSii4HuCv j+3f8cz23uPodiZjtKTGAg== 0000899715-04-000181.txt : 20041026 0000899715-04-000181.hdr.sgml : 20041026 20041026164821 ACCESSION NUMBER: 0000899715-04-000181 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040904 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041026 DATE AS OF CHANGE: 20041026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANGER FACTORY OUTLET CENTERS INC CENTRAL INDEX KEY: 0000899715 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 561815473 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11986 FILM NUMBER: 041097153 BUSINESS ADDRESS: STREET 1: 3200 NORTHLINE AVENUE SUITE 360 CITY: GREENSBORO STATE: NC ZIP: 27408 BUSINESS PHONE: 3362923010 MAIL ADDRESS: STREET 1: 3200 NORTHLINE AVENUE SUITE 360 CITY: GREENSBORO STATE: NC ZIP: 27408 8-K 1 tfocform8k0904.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (date of earliest event reported): October 26, 2004 TANGER FACTORY OUTLET CENTERS, INC. ----------------------------------------- (Exact name of registrant as specified in its charter) North Carolina 1-11986 56-1815473 - ---------------------- --------------- ------------------------ (State or other jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification Number) 3200 Northline Avenue, Greensboro, North Carolina 27408 (Address of principal executive offices) (Zip Code) (336) 292-3010 (Registrants' telephone number, including area code) N/A (former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 Item 2.02 Results of Operations and Financial Condition On October 26, 2004, Tanger Factory Outlet Centers, Inc. (the "Company") issued a press release announcing its results of operations and financial condition as of and for the quarter ended September 30, 2004. A copy of the Company's press release is furnished as Exhibit 99.1 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise. Item 7.01 Regulation FD Disclosure On October 26, 2004, the Company made publicly available certain supplemental operating and financial information for the quarter ended September 30, 2004. This supplemental operating and financial information is attached to this current report as exhibit 99.2. The information contained in this report on Form 8-K, including Exhibit 99.2, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise. Item 9.01 Financial Statements and Exhibits (c) Exhibits The following exhibits are included with this Report: Exhibit 99.1 Press release announcing the results of operations and financial condition of the Company as of and for the quarter ended September 30, 2004. Exhibit 99.2 Supplemental operating and financial information of the Company as of and for the quarter ended September 30, 2004. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 26, 2004 TANGER FACTORY OUTLET CENTERS, INC. By: /s/ Frank C. Marchisello, Jr. ----------------------------- Frank C. Marchisello, Jr. Executive Vice President, Chief Financial Officer 2 - ------------------------------------------------------------------------- EXHIBIT INDEX Exhibit No. 99.1 Press release announcing the results of operations and financial condition of the Company as of and for the quarter ended September 30, 2004. 99.2 Supplemental operating and financial information of the Company as of and for the quarter ended September 30, 2004. EX-99 2 tfocform8k0904ex.txt EXHIBIT 99.1 EARNING RLS TANGER REPORTS THIRD QUARTER 2004 RESULTS 3200 Northline Avenue, Suite 360 Greensboro, NC 27408 336-292-3010 FAX 336-297-0931 3200 Northline Avenue, Suite 360 Greensboro, NC 27408 336-292-3010 FAX 336-297-0931 NEWS RELEASE FOR RELEASE: IMMEDIATE RELEASE CONTACT: Frank C. Marchisello, Jr. (336) 834-6834 TANGER REPORTS THIRD QUARTER 2004 RESULTS 33.6% Increase in Total FFO, 9.2% Increase in FFO per Share Greensboro, NC, October 26, 2004, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported funds from operations ("FFO"), a widely accepted measure of REIT performance, for the three months ended September 30, 2004, was $15.8 million, or $0.95 per share, as compared to FFO of $11.9 million, or $0.87 per share, for the three months ended September 30, 2003, representing a 33.6% increase in total FFO and a 9.2% increase in FFO per share. For the nine months ended September 30, 2004, FFO was $45.3 million, or $2.73 per share, as compared to FFO of $33.1 million, or $2.47 per share, for the nine months ended September 30, 2003, representing a 36.9% increase in total FFO and a 10.5% increase in FFO per share. Tanger's FFO included $172,000 and $1.4 million in gains on the sale of land parcels for the three months and nine months ended September 30, 2004, respectively, compared to no land parcel sales in the previous year. Excluding these gains, which are a component of our strategic plan, but unpredictable in their occurrence, FFO for the third quarter and nine months ended September 30, 2004 would have been $0.94 and $2.64 per share respectively, resulting in an 8.0% increase in FFO per share for the third quarter and a 6.9% increase in FFO per share for the nine months. During the third quarter of 2004 Tanger recognized a $3.5 million loss associated with the sale of an outlet center in Dalton, Georgia, resulting in a net loss for the third quarter of 2004 of $2.0 million, or $0.15 per share, as compared to net income of $3.5 million, or $0.33 per share for the third quarter of 2003. For the nine months ended September 30, 2004, net income was $2.7 million, or $0.20 per share, compared to $7.2 million, or $0.72 per share for the first nine months of 2003. Net income and FFO per share amounts above are on a diluted basis. A reconciliation of net income to FFO is presented on the supplemental information page of this press release. Third Quarter Highlights o Comparative sales increased 3.7% to $309 per square foot in reported same-space tenant sales for the rolling twelve months ended September 30, 2004 o 96% period-end portfolio occupancy rate, up from 95% in June 30, 2004 and September 30, 2003 o 40.1% debt-to-total market capitalization ratio, 3.45 times interest coverage ratio compared to 2.64 times last year o General and administrative expenses as a percentage of total revenues decreased from 8.6% to 6.8% o Year to date 1.45 million square feet, or 81.0% of the square feet scheduled to expire during 2004 has been renewed with the existing tenants at an average increase in base rental rates of 6.0% 1 o Generated approximately $11.0 million in net proceeds in conjunction with the sale of one non-core property o Expanded Board of Directors from five to six members o Received an increase in corporate rating from Standard and Poor's Ratings Service to BBB- o Completed the release of two properties which had been securing $53.5 million in mortgage loans Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, "This marks the third full quarter that we have been operating the Charter Oak portfolio of nine centers. We have completely integrated these assets into all of our systems including accounting, marketing, leasing and operations. It is important to note that sales at our outlet centers along the east coast and the Gulf of Mexico were adversely affected by the hurricanes in September. Fortunately, no one was injured on our properties and the majority of stores are now open. Traffic at these centers, particularly our center in Foley, Alabama, continues to be down significantly. However, we do not expect this to have a material impact on our financial results." Portfolio Operating Results During the third quarter of 2004, Tanger executed 122 new leases, totaling 549,000 square feet. Lease renewals for the third quarter of 2004 accounted for 411,500 square feet and generated a 2.1% increase in average base rental rates on a cash basis. For the first nine months of 2004, 1,452,000 square feet of renewals generated a 6.0% increase in average base rental rates, and represented approximately 81.0% of the 1,790,000 square feet originally scheduled to expire during 2004. The average initial base rent for new stores opened during the first nine months of 2004 was $17.37, which was 6.7% above the average base rent for stores that closed during the same period. Same center net operating income increased 1.7% for the third quarter of 2004 compared to the same period in 2003. Reported same-space sales per square foot for the rolling twelve months ended September 30, 2004 was $309 per square foot. This represents a 3.7% increase compared to the rolling twelve months ended September 30, 2003. For the third quarter of 2004, same-space sales increased by 1.5%, as compared to the same period in 2003. Same-space sales are defined as the weighted average sales per square foot reported in space open for the full duration of the comparative periods. Reported same-store sales for the nine months ended September 30, 2004 increased 1.3% compared to the same period in 2003, while same-store sales for the third quarter of 2004 decreased 1.6% compared to the third quarter of 2003. Same-store sales are defined as sales for tenants whose stores have been open from January 1, 2003 through the duration of the comparison period. Sales were adversely affected by the hurricanes in September at a number of our centers located along the east coast and the Gulf of Mexico where sales were down 14.9% for the month of September 2004. Excluding these centers, same-space sales increased 5.3% for the quarter and 6.2 % for the rolling twelve months ended September 30, 2004 and same-store sales increased 0.1% for the quarter and 3.0% for the nine months ended September 30, 2004. Investment and Other Activities On August 23, 2004, Tanger announced that its Board of Directors had approved an expansion of its Board from five to six members and had elected Allan L. Schuman to become a member of Tanger's Board of Directors. Mr. Schuman, Chairman of the Board of Ecolab, Inc. (NYSE:ECL), brings 45 years of executive and management experience, having helped to build an international company with approximately $3.9 billion in annual sales and $8.5 billion in market capital. Ecolab currently does business in over 170 countries around the world. 2 As a continuation of our long-term strategy to dispose of non-core assets and to upgrade our portfolio, on September 8, 2004, Tanger sold its 173,430 square foot outlet center located in Dalton, Georgia for a total cash sales price of $11.5 million. After the deduction of all closing costs, Tanger received net proceeds of approximately $11.0 million and recognized a net loss on the sale of the property of $3.5 million. Tanger originally purchased this property in March 1998. Tanger continues its pre-development and leasing of four previously announced sites located in Pittsburgh, Pennsylvania; Deer Park, New York; Charleston, South Carolina; and Wisconsin Dells, Wisconsin, with expected deliveries during 2006 and 2007. Financing Activities and Balance Sheet Summary During the third quarter of 2004, Tanger was successful in obtaining an additional $25 million unsecured line of credit from Citicorp North America, Inc., a subsidiary of Citigroup; bringing the total committed unsecured lines of credit to $125 million. In addition, the Company has completed the extension of the maturity dates on all of its lines of credit until June of 2007. Tanger also completed the release of two properties which had been securing $53.5 million in mortgage loans with Wells Fargo Bank, thus creating an unsecured note with Wells Fargo Bank for the same face amount. As of September 30, 2004, Tanger had a total market capitalization of approximately $1.3 billion, with $501.5 million of debt outstanding (excluding a debt premium of $10.0 million), equating to a 40.1% debt-to-total market capitalization ratio. This represents a 51.8% increase in total market capitalization since September 30, 2003. As of September 30, 2004, $448.0 million, or 89.3% of Tanger's total debt, was at fixed interest rates and the Company did not have any amounts borrowed on its unsecured lines of credit. During the third quarter Tanger continued to improve its interest coverage ratio, which was 3.45 times for the third quarter of 2004, as compared to 2.64 times interest coverage in the same period last year. On October 25, 2004, Tanger repaid $47.5 million, 7.875% unsecured notes at maturity, using approximately $20.2 million in net proceeds from the sale of the three properties and four parcels of land during the first nine months of 2004, plus other funds available under its lines of credit. Following the repayment of these notes, Tanger had $26.0 million outstanding on its $125 million in lines of credit. 2004 FFO Per Share Guidance Based on current market conditions, the strength and stability of its core portfolio and the Company's development, acquisition and disposition strategy, Tanger currently believes its net income available to common shareholders for 2004 will be between $0.70 and $0.72 per share and its FFO for 2004 will be between $3.76 and $3.78 per share, representing an increase in FFO over the prior year of approximately 9%. The following table provides the reconciliation of estimated diluted FFO per share to estimated diluted net income available to common shareholders per share: For the twelve months ended December 31, 2004: Low Range High Range Estimated diluted net income available to common shareholders per share $ 0.37 $ 0.39 Minority interest, depreciation and amortization uniquely significant to real estate including minority interest share, gain or loss on sale of real estate assets, and our share of joint ventures 3.39 3.39 Estimated diluted FFO per share $ 3.76 $ 3.78 3 Third Quarter Conference Call Tanger will host a conference call to discuss its third quarter results for analysts, investors and other interested parties on Wednesday, October 27, 2004, at 10:00 A.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 Third Quarter Financial Results call. Alternatively, the call will be web cast by CCBN and can be accessed at the "Tanger News" section of Tanger Factory Outlet Centers, Inc.'s web site at www.tangeroutlet.com. A telephone replay of the call will be available from October 27, 2004 starting at 12:00 P.M. Eastern Time through 11:59 P.M., October 29, 2004, by dialing 1-800-642-1687 (conference ID # 242617). Additionally, an online archive of the broadcast will also be available through October 29, 2004. 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 37 centers in 23 states coast to coast, totaling approximately 9.2 million square feet of gross leasable area. Tanger is filing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended September 30, 2004. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com. Estimates of future net income per share and FFO per share are by definition, and certain other matters discussed in this press release 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 may be, forward-looking statements within the meaning of the federal securities laws. 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, 2003. 4
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) (unaudited) REVENUES Base rentals (a) $ 32,879 $ 19,124 $ 96,380 $ 56,534 Percentage rentals 1,289 774 2,958 1,717 Expense reimbursements 13,060 8,028 37,956 24,081 Other income (b) 1,816 1,040 5,054 2,478 - -------------------------------------------------------------------------------------------------------------------------------- Total revenues 49,044 28,966 142,348 84,810 - -------------------------------------------------------------------------------------------------------------------------------- EXPENSES Property operating 14,953 9,527 43,095 28,472 General and administrative 3,346 2,489 9,757 7,367 Depreciation and amortization 14,042 6,734 39,154 20,361 - -------------------------------------------------------------------------------------------------------------------------------- Total expenses 32,341 18,750 92,006 56,200 - -------------------------------------------------------------------------------------------------------------------------------- Operating income 16,703 10,216 50,342 28,610 Interest expense 8,919 6,427 26,684 19,707 - -------------------------------------------------------------------------------------------------------------------------------- Income before equity in earnings of unconsolidated joint ventures, minority interests and discontinued operations 7,784 3,789 23,658 8,903 Equity in earnings of unconsolidated joint ventures (c) 359 267 799 639 Minority interests Consolidated joint venture (7,198) - (20,410) - Operating partnership (175) (916) (743) (2,054) - -------------------------------------------------------------------------------------------------------------------------------- Income from continuing operations 770 3,140 3,304 7,488 Discontinued operations, net of minority interests (d) (2,785) 380 (562) 530 - -------------------------------------------------------------------------------------------------------------------------------- Net income (loss) (2,015) 3,520 2,742 8,018 Less applicable preferred share dividends - - - (806) - -------------------------------------------------------------------------------------------------------------------------------- Net income (loss) available to common shareholders $ (2,015) $ 3,520 $ 2,742 $ 7,212 - -------------------------------------------------------------------------------------------------------------------------------- Basic earnings per common share: Income from continuing operations $ 0.06 $ 0.30 $ 0.25 $ 0.70 Net income (loss) $ (0.15) $ 0.34 $ 0.20 $ 0.74 - -------------------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share: Income from continuing operations $ 0.06 $ 0.30 $ 0.24 $ 0.69 Net income (loss) $ (0.15) $ 0.33 $ 0.20 $ 0.72 - -------------------------------------------------------------------------------------------------------------------------------- Funds from operations (FFO) $ 15,837 $ 11,854 $ 45,336 $ 33,121 FFO per common share - diluted $ 0.95 $ 0.87 $ 2.73 $ 2.47 - -------------------------------------------------------------------------------------------------------------------------------- Summary of discontinued operations (d) Operating income from discontinued operations $ 135 $ 491 $ 777 $ 1,430 Loss on sale of real estate (3,544) - (1,460) (735) - -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from discontinued operations (3,409) 491 (683) 695 Minority interest in discontinued operations 624 (111) 121 (165) - -------------------------------------------------------------------------------------------------------------------------------- Discontinued operations, net of minority interest $ (2,785) $ 380 $ (562) $ 530 - -------------------------------------------------------------------------------------------------------------------------------- (a) Includes straight-line rent and market rent adjustments of $358 and $(35) for the three months ended and $946 and $(147) for the nine months ended September 30, 2004 and 2003, respectively. (b) Includes gains on sales of four outparcels of land of $172 and $1,391 for the three and nine months ended September 30, 2004. (c) Includes Myrtle Beach, South Carolina Hwy 17 property which is operated by us through a 50% ownership joint venture. (d) In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets", the results of operations for properties disposed of during the year have been reported above as discontinued operations for both the current and prior periods presented.
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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30, December 31, 2004 2003 - ------------------------------------------------------------------------------------------------------------------- (unaudited) ASSETS Rental property Land $ 113,869 $ 119,833 Buildings, improvements and fixtures 956,109 958,720 - ------------------------------------------------------------------------------------------------------------------- 1,069,978 1,078,553 Accumulated depreciation (215,172) (192,698) - ------------------------------------------------------------------------------------------------------------------- Rental property, net 854,806 885,855 Cash and cash equivalents 27,135 9,836 Deferred charges, net 60,958 68,568 Other assets 19,595 23,178 - ------------------------------------------------------------------------------------------------------------------- Total assets $ 962,494 $ 987,437 - ------------------------------------------------------------------------------------------------------------------- LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY Liabilities Long-term debt Senior, unsecured notes $ 147,509 $ 147,509 Mortgages payable (including a premium of $9,976 and $11,852 respectively) 310,483 370,160 Unsecured note 53,500 - Lines of credit - 22,650 - ------------------------------------------------------------------------------------------------------------------- 511,492 540,319 Construction trade payables 10,361 4,345 Accounts payable and accrued expenses 17,488 18,025 - ------------------------------------------------------------------------------------------------------------------- Total liabilities 539,341 562,689 - ------------------------------------------------------------------------------------------------------------------- Commitments Minority interests Consolidated joint venture 221,400 218,148 Operating partnership 36,533 39,182 - ------------------------------------------------------------------------------------------------------------------- Total minority interests 257,933 257,330 - ------------------------------------------------------------------------------------------------------------------- Shareholders' equity Common shares, $.01 par value, 50,000,000 shares authorized, 13,718,208 and 12,960,643 shares issued and outstanding at September 30, 2004 and December 31, 2003 137 130 Paid in capital 274,423 250,070 Distributions in excess of net income (105,116) (82,737) Deferred compensation (4,224) - Accumulated other comprehensive loss - (45) - ------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 165,220 167,418 - ------------------------------------------------------------------------------------------------------------------- Total liabilities, minority interests and shareholders' equity $ 962,494 $ 987,437 - -------------------------------------------------------------------------------------------------------------------
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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (In thousands, except per share, state and center information) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 - ----------------------------------------------------------------------------------------------------------------------- Funds From Operations: Net income (loss) $ (2,015) $ 3,520 $ 2,742 $ 8,018 Adjusted for: Minority interest in operating partnership 175 916 743 2,054 Minority interest adjustment - consolidated joint venture 314 - 18 - Minority interest, depreciation and amortization attributable to discontinued operations (518) 461 433 1,356 Depreciation and amortization uniquely significant to real estate - consolidated 3,986 6,670 38,985 20,150 Depreciation and amortization uniquely significant to real estate - unconsolidated joint venture 351 287 955 808 Net loss on sales of real estate 3,544 - 1,460 735 - ----------------------------------------------------------------------------------------------------------------------- Funds from operations $ 15,837 $ 11,854 $ 45,336 $ 33,121 - ----------------------------------------------------------------------------------------------------------------------- Funds from operations per share - diluted $ 0.95 $ 0.87 $ 2.73 $ 2.47 - ----------------------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE SHARES Basic weighted average common shares 13,612 10,404 13,485 9,729 Effect of outstanding share and unit options 60 195 98 227 Effect of unvested restricted share awards 11 - 9 - - ----------------------------------------------------------------------------------------------------------------------- Diluted weighted average common shares (for earnings per share computations) 13,683 10,599 13,592 9,956 Convertible preferred shares (a) - - - 435 Convertible operating partnership units (a) 3,033 3,033 3,033 3,033 - ----------------------------------------------------------------------------------------------------------------------- Diluted weighted average common shares (for funds from operations per share computations) 16,716 13,632 16,625 13,424 - ----------------------------------------------------------------------------------------------------------------------- OTHER INFORMATION Gross leasable area open at end of period - Wholly owned 5,066 5,483 5,066 5,483 Partially owned - consolidated (b) 3,271 - 3,271 - Partially owned - unconsolidated (c) 391 318 391 318 Managed 432 457 432 457 - ----------------------------------------------------------------------------------------------------------------------- Total gross leasable area open at end of period 9,160 6,258 9,160 6,258 Outlet centers in operation - Wholly owned 23 27 23 27 Partially owned - consolidated (b) 9 - 9 - Partially owned - unconsolidated (c) 1 1 1 1 Managed 4 5 4 5 - ----------------------------------------------------------------------------------------------------------------------- Total outlet centers in operation 37 33 37 33 States operated in at end of period (b) (c) 23 20 23 20 Occupancy percentage at end of period (b) (c) 96% 95% 96% 95% - ---------------------------------------------------------------------------------------------------------------------- (a) The convertible preferred shares and operating partnership units (minority interest) are not dilutive on earnings per share computed in accordance with generally accepted accounting principles. (b) Includes the Charter Oak portfolio which is operated by us through a 33% ownership joint venture. However, these properties are consolidated for financial reporting under FIN 46. (c) Includes Myrtle Beach, South Carolina Hwy 17 property which is operated by us through a 50% ownership joint venture.
We believe that for a clear understanding of our operating results, FFO should be considered along with net income as presented elsewhere in this report. FFO is presented because it is a widely accepted financial indicator used by certain investors and analysts to analyze and compare one equity REIT with another on the basis of operating performance. FFO is generally defined as net income (loss), computed in accordance with generally accepted accounting principles, before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plus depreciation and amortization uniquely significant to real estate and after adjustments for unconsolidated partnerships and joint ventures. We caution that the calculation of FFO may vary from entity to entity and as such the presentation of FFO by us may not be comparable to other similarly titled measures of other reporting companies. FFO does not represent net income or cash flow from operations as defined by accounting principles generally accepted in the United States of America and should not be considered an alternative to net income as an indication of operating performance or to cash flows from operations as a measure of liquidity. FFO is not necessarily indicative of cash flows available to fund dividends to shareholders and other cash needs. 7 EX-99 3 tfocform8k0904sup.txt EXHIBIT 99.2 SUPPLEMENTAL OPERATION FINANCIALS 1 Tanger Factory Outlet Centers, Inc. Supplemental Operating and Financial Data for the Quarter Ended 09/30/04 Tanger Factory Outlet Centers, Inc. Supplemental Operating and Financial Data September 30, 2004 1 Notice 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, 2003. 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 Portfolio Data: Geographic Diversification.............................................4 Property Summary ......................................................5 Portfolio Occupancy at the End of Each Period..........................6 Major Tenants .........................................................7 Lease Expirations as of September 30, 2004.............................8 Leasing Activity.......................................................9 Financial Data: Consolidated Balance Sheets...........................................10 Consolidated Statements of Operations.................................11 FFO and FAD Analysis..................................................12 Per Weighted Average Gross Leasable Area (GLA) Analysis...............13 Unconsolidated Joint Venture Information..............................14 Debt Outstanding Summary..............................................15 Future Scheduled Principal Payments...................................16 Investor Information.......................................................17 3 Geographic Diversification - -------------------------------------------------------------------------------- As of September 30, 2004 - -------------------------------------------------------------------------------- State # of Centers GLA % of GLA - --------------------------- ---------------- ------------------ --------------- South Carolina (1) (2) 3 1,211,029 14% Georgia 3 775,760 9% New York 1 729,238 8% Texas 2 619,976 7% Alabama (2) 2 615,250 7% Delaware (2) 1 568,873 7% Tennessee 2 513,717 6% Michigan 2 437,051 5% Utah (2) 1 300,602 3% Connecticut (2) 1 291,051 3% Missouri 1 277,883 3% Iowa 1 277,230 3% Oregon (2) 1 270,280 3% Illinois (2) 1 256,514 3% Pennsylvania 1 255,152 3% Louisiana 1 245,199 3% New Hampshire (2) 1 227,966 3% Florida 1 198,789 2% North Carolina 2 187,510 2% Indiana 1 141,051 2% Minnesota 1 134,480 2% California 1 108,950 1% Maine 2 84,313 1% - ------------------------- ----------------- ------------------- --------------- Total 33 8,727,864 100% - ------------------------- ----------------- ------------------- --------------- (1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement. (2) Includes nine centers from the Charter Oak portfolio acquired on December 19, 2003 of which Tanger owns a one-third interest through a joint venture arrangement. 4
Property Summary - Occupancy at End of Each Period Shown % Occupied % Occupied % Occupied % Occupied % Occupied Total GLA 09/30/04 06/30/04 3/31/04 12/31/03 09/30/03 Location 09/30/04 - ----------------------------- --------------- -------------- -------------- --------------- -------------- -------------- Riverhead, NY 729,238 99% 99% 99% 100% 99% Rehoboth, DE (2) 568,873 99% 99% 99% 99% n/a Foley, AL (2) 535,675 99% 99% 97% 99% n/a San Marcos, TX 442,486 97% 96% 92% 100% 98% Myrtle Beach, SC (2) 427,388 96% 97% 96% 96% n/a Sevierville, TN 419,023 100% 100% 100% 100% 99% Hilton Head, SC (2) 393,094 91% 89% 88% 89% n/a Myrtle Beach, SC (1) 390,547 100% 100% 100% 100% 100% Commerce II, GA 342,556 98% 97% 92% 96% 94% Howell, MI 324,631 100% 100% 100% 100% 99% Park City, UT (2) 300,602 97% 97% 95% 96% n/a Westbrook, CT (2) 291,051 93% 90% 89% 93% n/a Branson, MO 277,883 100% 100% 97% 100% 100% Williamsburg, IA 277,230 97% 96% 96% 96% 96% Lincoln City, OR (2) 270,280 95% 93% 93% 92% n/a Tuscola, IL (2) 256,514 76% 77% 78% 78% n/a Lancaster, PA 255,152 99% 96% 95% 100% 98% Locust Grove, GA 247,454 98% 99% 98% 100% 100% Gonzales, LA 245,199 97% 93% 93% 99% 95% Tilton, NH (2) 227,966 98% 98% 96% 96% n/a Fort Myers, FL 198,789 87% 82% 86% 94% 86% Commerce I, GA 185,750 68% 68% 69% 77% 74% Terrell, TX 177,490 97% 97% 96% 100% 97% Seymour, IN 141,051 85% 82% 80% 77% 75% North Branch, MN 134,480 100% 99% 100% 100% 100% West Branch, MI 112,420 100% 100% 100% 100% 100% Barstow, CA 108,950 100% 95% 88% 87% 87% Blowing Rock, NC 105,332 100% 100% 93% 100% 100% Pigeon Forge, TN 94,694 96% 93% 88% 93% 97% Nags Head, NC 82,178 100% 100% 100% 100% 100% Boaz, AL 79,575 95% 97% 97% 97% 97% Kittery I, ME 59,694 100% 100% 100% 100% 100% Kittery II, ME 24,619 100% 100% 100% 100% 100% Dalton, GA n/a n/a 79% 79% 100% 82% LL Bean, NH n/a n/a n/a 100% 100% 91% Clover, NH n/a n/a n/a 100% 100% 100% Casa Grande, AZ n/a n/a n/a n/a n/a 79% - ----------------------------- --------------- -------------- -------------- --------------- -------------- -------------- Total 8,727,864 96% 95% 94% 96% 95% - ----------------------------- --------------- -------------- -------------- --------------- -------------- --------------
(1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement. (2) Includes nine centers from the Charter Oak portfolio acquired on December 19, 2003 of which Tanger owns a one-third interest through a joint venture arrangement. 5 Portfolio Occupancy at the End of Each Period (1) 09/04 06/04 03/04 12/03 09/03 06/03 03/03 12/02 09/02 96% 95% 94% 96% 95% 96% 95% 98% 96% (1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement and the nine centers in the Charter Oak portfolio of which Tanger owns a one-third interest through a joint venture arrangement. 6 Major Tenants (1) - ------------------------------------------------------------------------------- Ten Largest Tenants As of September 30, 2004 (1) - ------------------------------------------------------------------------------- # of % of Tenant Stores GLA Total GLA - -------------------------------- ----------- -------------- ------------------ The Gap, Inc. 57 576,050 6.6% Phillips-Van Heusen 95 448,209 5.1% Liz Claiborne 44 366,629 4.2% VF Factory Outlet 33 285,125 3.3% Reebok International 32 245,802 2.7% Dress Barn, Inc. 30 220,119 2.5% Polo Ralph Lauren 23 184,254 2.1% Jones Retail Corporation 63 180,694 2.1% Brown Group Retail, Inc. 38 173,353 2.0% Nike 11 160,078 1.8% - -------------------------------- ----------- -------------- ------------------ Total of All Listed Above 426 2,840,313 32.4% - -------------------------------- ----------- -------------- ------------------ (1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement and the nine centers in the Charter Oak portfolio of which Tanger owns a one-third interest through a joint venture arrangement. 7 Lease Expirations as of September 30, 2004 Percentage of Total Gross Leasable Area (1) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014+ 3.00% 22.00% 18.00% 18.00% 14.00% 13.00% 4.00% 2.00% 3.00% 1.00% 2.00% Percentage of Total Annualized Base Rent (1) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014+ 2.00% 18.00% 20.00% 19.00% 16.00% 13.00% 5.00% 2.00% 2.00% 1.00% 2.00% (1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement and the nine centers in the Charter Oak portfolio of which Tanger owns a one-third interest through a joint venture arrangement. 8
Leasing Activity (1) - ----------------------------------------------------------- -------------- ------------- ------------ ------------ ------------- Prior Year to Year to 03/31/04 06/30/04 09/30/04 12/31/04 Date Date - ----------------------------------------------------------- -------------- ------------- ------------ ------------ ------------- Re-tenanted Space: Number of leases 31 39 34 104 75 Gross leasable area 130,808 151,154 137,762 419,724 251,033 New base rent per square foot $17.09 $15.95 $18.44 $17.12 $17.47 Prior base rent per square foot $16.42 $15.91 $17.28 $16.52 $16.73 Percent increase in rent per square foot 4.1% 0.3% 6.7% 3.6% 4.4% Renewed Space: Number of leases 169 71 88 328 190 Gross leasable area 755,832 284,953 411,483 1,452,268 831,232 New base rent per square foot $14.96 $15.02 $13.07 $14.61 $13.40 Prior base rent per square foot $13.86 $14.10 $13.42 $13.78 $13.40 Percent increase in rent per square foot 7.9% 6.5% 2.1% 6.0% 0.0% Total Re-tenanted and Renewed Space: Number of leases 200 110 122 432 265 Gross leasable area 886,640 436,107 549,245 1,871,992 1,082,265 New base rent per square foot $15.27 $15.34 $14.89 $15.18 $14.34 Prior base rent per square foot $14.24 $14.73 $14.39 $14.39 $14.17 Percent increase in rent per square foot 7.2% 4.1% 3.5% 5.5% 1.2% - -------------------------------------------- ------------- -------------- ------------- ------------ ----------- -------------- Prior Year to Year to 03/31/04 06/30/04 09/30/04 12/31/04 Date Date - -------------------------------------------- ------------- -------------- ------------- ------------ ------------ ------------- Stores Opening: Number of stores 23 43 28 94 94 Gross leasable area 84,162 148,549 90,760 323,471 308,845 Base rent per square foot $17.26 $18.12 $16.24 $17.37 $18.85 Stores Closing: Number of stores 52 19 25 96 87 Gross leasable area 170,909 58,131 107,210 336,250 286,739 Base rent per square foot $16.43 $14.91 $16.76 $16.27 $16.62 Percent increase in rent per square foot 5.1% 21.5% (3.1%) 6.7% 13.4% - -------------------------------------------- ------------- -------------- ------------- ------------ ------------ -------------
(1) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement and the nine centers in the Charter Oak portfolio of which Tanger owns a one-third interest through a joint venture arrangement. 9
Consolidated Balance Sheets (dollars in thousands) - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- 09/30/04 06/30/04 3/31/04 12/31/03 09/30/03 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Assets Rental property Land $113,869 $115,541 $118,933 $119,833 $50,474 Buildings 956,109 965,394 965,948 958,720 583,269 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total rental property 1,069,978 1,080,935 1,084,881 1,078,553 633,743 Accumulated depreciation (215,172) (209,359) (202,454) (192,698) (191,628) - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total rental property - net 854,806 871,576 882,427 885,855 442,115 Cash 27,135 8,694 10,781 9,836 209 Deferred charges - net 60,958 64,747 67,114 68,568 9,398 Other assets 19,595 26,963 19,565 23,178 13,666 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total assets $962,494 $971,980 $979,887 $987,437 $465,388 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Liabilities, minority interest & shareholders' equity Liabilities Debt Senior, unsecured notes $147,509 $147,509 $147,509 $147,509 $147,509 Mortgages payable 310,483 366,065 368,087 370,160 172,552 Unsecured note 53,500 -- -- -- -- Lines of credit -- -- 4,825 22,650 7,272 - ------------------------------------------- -------------- --------------- -------------- -------------- ---------------- Total debt 511,492 513,574 520,421 540,319 327,333 Construction trade payables 10,361 6,300 5,816 4,345 7,188 Accounts payable & accruals 17,488 18,579 18,507 18,025 13,949 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total liabilities 539,341 538,453 544,744 562,689 348,470 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Minority interest Consolidated joint venture 221,400 220,225 220,337 218,148 -- Operating partnership 36,533 38,731 39,524 39,182 26,202 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total minority interests 257,933 258,956 259,861 257,330 26,202 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Shareholders' equity Common shares 137 137 135 130 105 Paid in capital 274,423 272,459 265,087 250,070 171,747 Distributions in excess of net income (105,116) (94,603) (89,916) (82,737) (81,063) Deferred compensation (4,224) (3,406) -- -- -- Accum. other comprehensive loss -- (16) (24) (45) (73) - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total shareholders' equity 165,220 174,571 175,282 167,418 90,716 - -------------------------------------------- -------------- --------------- -------------- -------------- --------------- Total liabilities, minority interest & shareholders' equity $962,494 $971,980 $979,887 $987,437 $465,388 - -------------------------------------------- -------------- --------------- -------------- -------------- ---------------
10
Consolidated Statements of Operations (dollars and shares in thousands) - --------------------------------------- ----------------------------------------------------------------- -------------------------- Three Months Ended YTD 09/04 06/04 03/04 12/03 09/03 09/04 09/03 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Revenues Base rentals $32,879 $32,041 $31,460 $21,783 $19,124 $96,380 $56,534 Percentage rentals 1,289 958 711 1,462 774 2,958 1,717 Expense reimbursements 13,060 13,010 11,886 8,972 8,028 37,956 24,081 Other income 1,816 2,388 850 1,033 1,040 5,054 2,478 - ----------------------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- Total revenues 49,044 48,397 44,907 33,250 28,966 142,348 84,810 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Expenses Property operating 14,953 14,719 13,423 10,496 9,527 43,095 28,472 General & administrative 3,346 3,254 3,157 2,186 2,489 9,757 7,367 Depreciation & amortization 14,042 12,955 12,157 7,870 6,734 39,154 20,361 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Total expenses 32,341 30,928 28,737 20,552 18,750 92,006 56,200 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Operating income 16,703 17,469 16,170 12,698 10,216 50,342 28,610 Interest expense 8,919 8,901 8,864 6,779 6,427 26,684 19,707 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Income before equity in earnings of unconsolidated joint ventures, minority interests and discontinued operations 7,784 8,568 7,306 5,919 3,789 23,658 8,903 Equity in earnings of unconsolidated joint ventures 359 274 166 180 267 799 639 Minority interests: Consolidated joint venture (7,198) (6,619) (6,593) (941) -- (20,410) -- Operating partnership (175) (408) (160) (1,114) (916) (743) (2,054) - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Income from continuing operations 770 1,815 719 4,044 3,140 3,304 7,488 Discontinued operations (1) (2,785) 1,930 293 787 380 (562) 530 - ----------------------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------- Net income (2,015) 3,745 1,012 4,831 3,520 2,742 8,018 Less applicable preferred share dividends -- -- -- -- -- -- (806) - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Net income available to common shareholders $ (2,015) $ 3,745 $ 1,012 $ 4,831 $ 3,520 $ 2,742 $ 7,212 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Basic earnings per common share: - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Income from continuing operations $ .06 $.13 $.06 $.37 $.30 $.25 $.70 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Net income $(.15) $.28 $.08 $.44 $.34 $.20 $.74 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Diluted earnings per common share: - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Income from continuing operations $ .06 $.13 $.06 $.36 $.30 $.24 $.69 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Net income $(.15) $.28 $.08 $.43 $.33 $.20 $.72 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Weighted average common shares: Basic 13,612 13,504 13,337 11,008 10,404 13,485 9,729 Diluted 13,683 13,594 13,488 11,183 10,599 13,592 9,956 - ------------------------------------------ ------------- ------------ ------------ ------------ ------------ ------------ ----------
(1) In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets", the results of operations for properties sold, including any gain or loss on such sales have been reported above as discontinued operations for both the current and prior periods presented. 11
FFO and FAD Analysis (dollars and shares in thousands) - ----------------------------------------- --------------------------------------------------------------- -------------------------- Three Months Ended YTD 09/04 06/04 03/04 12/03 09/03 09/04 09/03 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------ ------------ ------------- Funds from operations: Net income $(2,015) $3,745 $1,012 $4,831 $3,520 $2,742 $8,018 Adjusted for - Minority interest in operating Partnership 175 408 160 1,114 916 743 2,054 Minority interest adjustment consolidated joint venture 314 (329) 33 (33) --- 18 -- Minority interest, depreciation and amortization in discontinued operations (518) 662 289 492 461 433 1,356 Depreciation and amortization uniquely significant to real estate - wholly owned 13,986 12,900 12,099 7,808 6,670 38,985 20,150 Depreciation and amortization uniquely significant to real estate - joint ventures 351 304 300 294 287 955 808 (Gain) loss on sale of real estate 3,544 (2,084) -- (588) -- 1,460 735 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Funds from operations $15,837 $15,606 $13,893 $13,918 $11,854 $45,336 $33,121 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Funds from operations per share $.95 $.94 $.84 $.98 $.87 $2.73 $2.47 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Funds available for distribution: Funds from operations $15,837 $15,606 $13,893 $13,918 $11,854 $45,336 $33,121 Adjusted For - Corporate depreciation excluded above 56 55 58 60 64 169 211 Amortization of finance costs 383 365 367 354 332 1,115 958 Straight line rent adjustment (81) (134) (84) 2 35 (299) 147 Below market rent adjustment (277) (310) (60) (37) -- (647) -- Market rate interest adjustment (634) (635) (610) (149) -- (1,879) -- 2nd generation tenant allowances (1,413) (1,595) (1,521) (1,457) (1,860) (4,529) (3,664) Capital improvements (1,583) (2,047) (1,335) (1,796) (241) (4,965) (2,854) - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Funds available for distribution $12,288 $11,305 $10,708 $10,895 $10,184 $34,301 $27,919 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Funds available for distribution per share $.74 $.68 $.65 $.77 $.75 $2.06 $2.08 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Dividends paid per share $.625 $.625 $.615 $.615 $.615 $1.865 $1.8425 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ FFO payout ratio 66% 66% 73% 63% 71% 68% 75% - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ FAD payout ratio 84% 92% 95% 80% 82% 91% 89% Diluted weighted average common shares 16,716 16,627 16,521 14,216 13,656 16,625 13,426 - ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
12
Per Weighted Average Gross Leasable Area (GLA) Analysis - --------------------------------------- ----------------------------------------------------------------- -------------------------- Three Months Ended YTD 09/04 06/04 03/04 12/03 09/03 09/04 09/03 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- GLA open at end of period - (000's) Wholly owned 5,066 5,240 5,302 5,299 5,483 5,066 5,483 Partially owned consolidated (1) 3,271 3,273 3,273 3,273 --- 3,271 --- Partially owned unconsolidated (2) 391 374 324 324 318 391 318 Managed properties 432 434 434 434 457 432 457 Total GLA open at end of period 9,160 9,321 9,333 9,330 6,258 9,160 6,258 Weighted average GLA (000's) (3) 8,338 8,339 8,339 5,526 5,051 8,338 5,034 End of period occupancy (1) (2) 96% 95% 94% 96% 95% 96% 95% PER SQUARE FOOT =============== Revenues Base rentals $3.95 $3.84 $3.77 $3.94 $3.79 $11.56 $11.23 Percentage rentals .15 .11 .09 .27 .15 .35 .34 Expense reimbursements 1.56 1.56 1.43 1.62 1.59 4.55 4.78 Other income .22 .29 .10 .19 .20 .61 .49 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Total revenues 5.88 5.80 5.39 6.02 5.73 17.07 16.84 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Expenses Property operating 1.79 1.77 1.61 1.90 1.89 5.17 5.66 General & administrative .40 .39 .38 .40 .49 1.17 1.46 Depreciation & amortization 1.69 1.55 1.46 1.42 1.33 4.70 4.04 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Total expenses 3.88 3.71 3.45 3.72 3.71 11.04 11.16 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Operating income 2.00 2.09 1.94 2.30 2.02 6.03 5.68 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Interest expense 1.07 1.07 1.06 1.23 1.27 3.20 3.91 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Income before equity in earnings of unconsolidated joint ventures, minority interest and discontinued operations $.93 $1.02 $.88 $1.07 $.75 $2.83 $1.77 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------- Total revenues less property operating and general & administrative expenses ("NOI") $3.69 $3.64 $3.40 $3.72 $3.36 $10.73 $9.73 - --------------------------------------- ------------- ------------ ------------ ------------ ------------ ------------ -------------
(1) Includes the nine centers from the Charter Oak portfolio acquired on December 19, 2003 of which Tanger owns a one-third interest through a joint venture arrangement. (2) Includes one center in Myrtle Beach, SC of which Tanger owns a 50% interest through a joint venture arrangement. (3) Represents GLA of wholly owned and partially owned consolidated 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. 13 Unconsolidated Joint Venture Information -
Summary Balance Sheets (dollars in thousands) - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Tanger's Share as of 9/30/04 6/30/04 3/31/04 12/31/03 09/30/03 09/30/04 (1) - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Assets Investment properties at cost - net $68,615 $69,955 $67,051 $63,899 $35,200 $29,845 Cash and cash equivalents 2,184 1,381 2,078 4,145 1,377 921 Deferred charges - net 2,076 1,535 1,596 1,652 1,767 936 Other assets 3,168 3,879 3,334 3,277 2,900 1,354 - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Total assets $76,043 $76,750 $74,059 $72,973 $41,244 $33,056 - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Liabilities & Owners' Equity Mortgage payable $59,233 $57,156 $54,811 $54,683 $29,248 $25,418 Construction trade payables 1,328 3,090 2,501 1,164 751 664 Accounts payable & other liabilities 730 508 603 564 743 344 - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Total liabilities 61,291 60,754 57,915 56,411 30,742 26,426 Owners' equity 14,752 15,996 16,144 16,562 10,502 6,630 - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ ----------------- Total liabilities & owners' equity $76,043 $76,750 $74,059 $72,973 $41,244 $33,056 - ---------------------------------------------- -------------- ------------ ------------ ------------ ------------ -----------------
(1) Tanger's portion of investment properties at cost - net, includes $9 million associated with a development property that generates net income considered incidental to its intended future operation as an outlet center. As such, the net income generated from this property is recorded as a reduction to the carrying value of the property and is therefore not included in the summary statement of operations below.
Summary Statements of Operations (dollars in thousands) - ----------------------------------------- --------------------------------------------------------------- ------------------------- Three Months Ended YTD 09/04 06/04 03/04 12/03 09/03 09/04 09/03 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Revenues $2,682 $2,507 $2,075 $2,098 $2,195 $7,264 $6,080 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Expenses Property operating 918 946 775 760 725 2,639 2,211 General & administrative 8 12 1 26 1 21 20 Depreciation & amortization 723 631 623 613 599 1,977 1,679 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Total expenses 1,649 1,589 1,399 1,399 1,325 4,637 3,911 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Operating income 1,033 918 676 699 870 2,627 2,169 Interest expense 346 405 380 380 372 1,131 991 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Net income $687 $513 $296 $319 $498 $1,496 $1,178 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Tanger's share of: - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------ Total revenues less property operating and general & administrative expenses ("NOI") $878 $774 $650 $656 $735 $2,302 $1,925 Net income $360 $274 $165 $180 $267 $799 $639 Depreciation (real estate related) $351 $304 $300 $293 $287 $955 $808 - ----------------------------------------- ----------- ------------ ------------ ------------ ------------- ------------ ------------
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Debt Outstanding Summary (dollars in thousands) As of September 30, 2004 - ------------------------------------------------------------------------------------------------------------ Principal Interest Maturity Balance Rate Date - --------------------------------------------- -------------- ------------------------------ ---------------- Mortgage debt Lancaster, PA $13,903 9.770% 04/10/05 Commerce I, GA 7,426 9.125% 09/10/05 Kittery I, ME 60,739 7.875% 04/01/09 San Marcos I, TX West Branch, MI Williamsburg, IA San Marcos II, TX 18,513 7.980% 04/01/09 Blowing Rock, NC 9,405 8.860% 09/01/10 Nags Head, NC 6,382 8.860% 09/01/10 Consolidated JV Debt 184,139 6.590% 07/10/08 Premium on Consolidated JV Debt (1) 9,976 - ------------------------------------------- -------------- ------------------------------ ---------------- Total mortgage debt 310,483 - ------------------------------------------- -------------- ------------------------------ ---------------- Corporate debt 1997 Senior unsecured notes 47,509 7.875% 10/24/04 Unsecured term loan 53,500 Libor + 1.60% 03/26/06 Unsecured credit facilities --- Libor + 1.60% 06/30/07 2001 Senior unsecured notes 100,000 9.125% 02/15/08 - ------------------------------------------- -------------- ------------------------------ ---------------- Total corporate debt 201,009 - ------------------------------------------- -------------- ------------------------------ ---------------- Total debt $511,492 - ------------------------------------------- -------------- ------------------------------ ----------------
(1) Represents a premium on mortgage debt with an imputed interest rate of 4.97% assumed in the Charter Oak acquisition joint venture, which is consolidated on Tanger's balance sheet. 15
Future Scheduled Principal Payments (dollars in thousands) As of September 30, 2004 - ------------------------------------------------------------------------------------------------------- Scheduled Total Amortization Balloon Scheduled Year Payments Payments Payments - ----------------------------- ---------------------- ----------------------- -------------------------- 2004 $1,511 $47,509 $49,020 2005 5,842 20,576 26,418 2006 5,715 53,500 59,215 2007 6,140 -- 6,140 2008 4,872 270,351 275,223 2009 967 70,474 71,441 2010 181 13,878 14,059 2011 -- -- -- 2012 -- -- -- 2013 -- -- -- 2014 & thereafter -- -- -- - ----------------------------- ---------------------- ----------------------- -------------------------- $25,228 $476,288 $501,516 Premium on Consolidated JV Debt (1) 9,976 - ---------------------------------------------------- ----------------------- -------------------------- $511,492 - ----------------------------- ---------------------- ----------------------- --------------------------
(1) Represents a premium on mortgage debt assumed in the Charter Oak acquisition joint venture, which is consolidated on Tanger's balance sheet. 16 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 6825 Fax: (336) 297-0931 e-mail: tangermail@tangeroutlet.com Mail: Tanger Factory Outlet Centers, Inc. 3200 Northline Avenue Suite 360 Greensboro, NC 27408 17 -----END PRIVACY-ENHANCED MESSAGE-----