-----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, NYQDaeO8qz/xS5YpbExqvYJHjqhFCmvkbq4j7FmckBMnK8d9ylz6VB6PEPuBTTbx tjeHp5Q84iOZupF5WSZDdA== 0000899715-07-000009.txt : 20070220 0000899715-07-000009.hdr.sgml : 20070219 20070220164128 ACCESSION NUMBER: 0000899715-07-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070220 DATE AS OF CHANGE: 20070220 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: 0105 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11986 FILM NUMBER: 07635984 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 tfoc8k02202007.htm TFOC 8-K TFOC 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): February 20, 2007


TANGER FACTORY OUTLET CENTERS, INC.
 
_________________________________________
(Exact name of registrant as specified in its charter)


                           
           North Carolina   
(State or other jurisdiction of Incorporation)
 
            1-11986  
(Commission File Number)
 
         56-1815473         
(I.R.S. Employer 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))




 
Item 2.02 Results of Operations and Financial Condition
 
On February 20, 2007, 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 December 31, 2006. 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 February 20, 2007, the Company made publicly available certain supplemental operating and financial information for the quarter ended December 31, 2006. 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 December 31, 2006.

Exhibit 99.2  Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 2006.


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: February 20, 2007

TANGER FACTORY OUTLET CENTERS, INC.

By: /s/ Frank C. Marchisello, Jr. 
             Frank C. Marchisello, Jr.
     Executive Vice President, Chief Financial Officer & Secretary



_____________________________________________________________________________________________

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 December 31, 2006.
99.2       Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 2006. 
            

 


 
 EX-99.1 2 tfoc8k02202007ex99-1.htm EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Press Release

Tanger Factory Outlet Centers, Inc.

News Release          
For Release: IMMEDIATE RELEASE  
Contact: Frank C. Marchisello, Jr.  
(336) 834-6834

TANGER REPORTS YEAR END RESULTS FOR 2006
FFO up 87.8% for the Fourth Quarter to $23.4 million
41.5% Total Return to Shareholders in 2006

Greensboro, NC, February 20, 2007, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported strong financial results for the quarter and year ended December 31, 2006. Funds from operations available to common shareholders (“FFO”), a widely accepted supplemental measure of REIT performance, for the three months ended December 31, 2006, increased 87.8% to $23.4 million, or $0.63 per share, as compared to FFO of $12.5 million, or $0.34 per share, for the three months ended December 31, 2005. For the year ended December 31, 2006, FFO increased 38.6% to $83.2 million, or $2.24 per share, as compared to FFO of $60.0 million, or $1.73 per share, for the year ended December 31, 2005.

Net income available to common shareholders for the three months ended December 31, 2006 was $7.4 million, or $0.23 per share, compared to a net loss of $0.4 million, or $0.01 per share for the fourth quarter of 2005. For the year ended December 31, 2006, the company reported net income available to common shareholders of $31.9 million, or $1.03 per share, as compared to net income available to common shareholders of $4.6 million, or $0.16 per share for 2005, representing a per share increase of 543.8%.

FFO and net income available to common shareholders for the fourth quarter and year ended December 31, 2006 were reduced by a $1.5 million charge for the abandonment of acquisition due diligence costs, as the company has decided it is no longer in a position to pursue the potential acquisition opportunity. The abandoned acquisitions due diligence costs were incurred in connection with structuring, diligencing and submitting a proposal to acquire a significant portfolio from a public REIT that was exploring its strategic alternatives. The bid was requested, but ultimately not accepted, by the public REIT.

Our comparative results for the fourth quarter and year end were also reduced by a charge for the early extinguishment of debt of $9.9 million in the fourth quarter of 2005 and a similar charge of $917,000 in the third quarter of 2006. Excluding these charges and the abandoned acquisition due diligence costs, FFO for the quarter ended December 31, 2006 would have increase 6.6%, from $0.61 in 2005 to $0.65 per share in 2006, and FFO for the year would have increased 14.9% from $2.01 per share to $2.31 per share.

Net income and FFO per share amounts above are on a diluted basis. FFO is a supplemental non-GAAP financial measure used as a standard in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO is included in this release.

Highlights of 2006 Achievements
 
·  
41.5% total return to shareholders in 2006
 
·  
4.0% increase in same center net operating income for the fourth quarter of 2006, 3.1% increase for the year
 
·  
11.4% increase in average base rental rates on signed renewals with the existing tenants for 1.4 million square feet, or 83.0% of the square feet scheduled to expire during 2006
 
·  
97.5% occupancy rate for wholly-owned stabilized properties, compared to 96.0% as of September 30, 2006 and 97.0% as of December 31, 2005
 
·  
$338 per square foot in reported tenant comparable sales for the rolling twelve months ended December 31, 2006, up 4.8% compared to the twelve months ended December 31, 2005
 
·  
Gift card sales in 2006 up 16% to $6.1 million
 
·  
Sold two non-core outlet centers, receiving net proceeds of $20.2 million, recognizing gains on sale of real estate totaling $13.8 million
 
·  
Opened newly constructed 264,900 square foot center in Wisconsin Dells, Wisconsin in August 2006, which is 100% leased as of December 31, 2006
 
·  
Opened newly constructed 352,300 square foot center in Charleston, South Carolina in August 2006, which is 89% leased as of December 31, 2006
 
·  
Issued $149.5 million of 3.75% exchangeable senior notes due 2026
 
·  
Equity market capital up 37.0% as of December 31, 2006 compared to last year
 
·  
Total market capital up 24.0% to $2.2 billion as of December 31, 2006 compared to last year
 
·  
30.8% debt-to-total market capitalization ratio, 3.13 times interest coverage ratio
 

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, “Our core business continues to produce very solid results as same center NOI for the year was up 3.1% and our tenants’ sales increased 4.8% to $338 per square foot for the calendar year 2006. Our management team is energized and looking forward to what should be a successful 2007.”

National Platform Continues to Drive Operating Results and Tenant Sales

Tanger’s broad geographic representation and established brand name within the factory outlet industry continues to generate solid operating results. The company’s portfolio of properties had a year-end occupancy rate of 97.5%, representing the 26th consecutive year since the company commenced operations in 1981 that it has achieved a year-end portfolio occupancy rate at or above 95%.

During 2006, Tanger executed 479 leases, totaling 1,931,000 square feet. For the year, 1,466,000 square feet of renewals generated an 11.4% increase in average base rental rates, and represented 83% of the 1,760,000 square feet originally scheduled to expire during 2006. Average base rental rates on re-tenanted space during the year increased 22.9% and accounted for the remaining 465,000 square feet.

Tanger continues to derive its rental income from a diverse group of national brand name manufacturers and retailers with no single tenant accounting for more than 7.1% of its gross leasable area and 6.0% of its total base and percentage rentals. Same center net operating income increased 4.0% for the fourth quarter and 3.1% for the year ended December 31, 2006 compared to the same periods in 2005. This follows same center net operating income increases of 3.8% in 2005 and 1.2% in 2004.

Reported tenant comparable sales per square foot for the rolling twelve months ended December 31, 2006 increased 4.8% to $338 per square foot, compared with a 3.4% increase the previous year.

Tanger’s average tenant occupancy cost as a percentage of average sales was 7.4% for 2006 compared to 7.5% in 2005 and 7.3% in 2004. The slight change in average occupancy costs was a result of a 5.3% increase in average total occupancy costs per square foot which was offset by an increase in average tenants’ sales per square foot during the year. Based on these statistics and other factors, Tanger continues to see upside potential in increasing rental rates in 2007.

Successful Investment Activities Provide Future Earnings Growth

During the first quarter of 2006, Tanger sold two non-core properties located in Pigeon Forge, Tennessee and North Branch, Minnesota. Net proceeds from the sales were approximately $20.2 million, which were used to reduce amounts outstanding on the company’s unsecured lines of credit.

During the third quarter of 2006, the company opened two new centers located in Wisconsin Dells, Wisconsin and Charleston, South Carolina. The 264,900 square foot center in Wisconsin Dells, Wisconsin is currently 100% leased. Tanger held a grand opening celebration for the center on August 18, 2006. Tenants in the center include Polo Ralph Lauren, Abercrombie & Fitch, Hollister, Gap, Banana Republic, Old Navy, Liz Claiborne, Nike, Adidas, Tommy Hilfiger and many others. The Wisconsin Dells property, which was developed and is managed and leased by Tanger for a fee, is owned through a joint venture of which Tanger owns a 50% interest.

Tanger’s 352,300 square foot center in Charleston, South Carolina is currently 89% leased. The company held a grand opening celebration for the center on August 31, 2006. Tenants in the center include Gap, Banana Republic, Liz Claiborne, Nike, Adidas, Tommy Hilfiger, Guess, Reebok and many others. The Charleston property is wholly owned by Tanger.

Tanger continues the pre-development and leasing of two previously announced sites located near Pittsburgh, Pennsylvania and in Deer Park (Long Island), New York. The company has contracted with Allegany Power to move certain power lines located on the Pittsburgh site and has closed on the acquisition of the Pittsburgh development site land. The company currently expects delivery of the 309,000 square foot initial phase in the first quarter of 2008. The Pittsburgh center will be wholly owned by Tanger.

Demolition of the buildings located at the Deer Park site began during the third quarter of 2006 and the company currently expects this center will contain over 800,000 square feet and will be delivered in the first quarter of 2008. The Deer Park property is owned through a joint venture of which Tanger and two venture partners each own a one-third interest.

Successful Capital Market Transaction Provides Additional Liquidity

In August 2006, the company issued $149.5 million of 3.75% exchangeable senior notes due 2026. Proceeds from the offering were used to repay in full two mortgage loans totaling approximately $15.3 million with interest rates of 8.86% and all amounts outstanding under the company’s unsecured lines of credit and other variable rate debt with a weighted average interest rate of approximately 6.3%. As a result of the early repayment of these loans, Tanger recognized a non-recurring charge for the early extinguishment of debt of approximately $917,000.

As of December 31, 2006, the company did not have any floating rate debt outstanding and the weighted average interest rate on the company’s outstanding debt was approximately 5.78%. Tanger has no significant debt maturities in 2007. On February 15, 2008, the company’s $100 million unsecured notes, with a 9 1/8% coupon rate mature. Based on current interest rates, Tanger expects to refinance these notes at maturity with a lower coupon rate instrument, generating substantially lower interest expense for the company.

Tanger’s total market capitalization as of December 31, 2006 increased 24.0% from the same period in 2005 to approximately $2.2 billion, with $678.6 million of debt outstanding. The company’s debt to total market capitalization was 30.8% as of December 31, 2006. During the year ended December 31, 2006, the company continued to maintain a strong interest coverage ratio of 3.13 times.



In 2007 Tanger Expects Significant Growth in FFO Per Share

Based on Tanger’s internal budgeting process, the company’s view on current market conditions, and the strength and stability of its core portfolio, Tanger currently believes its net income available to common shareholders for 2007 will be between $0.87 and $0.95 per share and its FFO available to common shareholders for 2007 will be between $2.40 and $2.48 per share. The company’s earnings estimates do not include the impact of any potential sales or acquisitions of properties. The following table provides the reconciliation of estimated diluted FFO per share to estimated diluted net income per share:

 
    
Low Range 
    
High Range
  
Estimated diluted net income per common share 
  
$
0.95
  
$
1.03
  
Minority interest, gain/loss on the sale of real estate,
depreciation and amortization uniquely
significant to real estate including minority interest
share and our share of joint ventures  
    
1.45
    
1.45
  
Estimated diluted FFO per share 
  
$
2.40
  
$
2.48
  
 
The mid point of the company’s guidance range represents an 8.9% growth in FFO for 2007. Tanger projects same center net operating income growth of between 4% to 5%.

Year End Conference Call

Tanger will host a conference call to discuss its year end 2006 results for analysts, investors and other interested parties on Wednesday, February 21, 2007, 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 fourth quarter and year end 2006 financial results call. Alternatively, the call will be web cast by CCBN and can be accessed at Tanger Factory Outlet Centers, Inc.'s web site at www.tangeroutlet.com/corporate under the News Releases section.

A telephone replay of the call will be available from February 21, 2007 starting at 12:00 P.M. Eastern Time through 11:59 P.M., March 02, 2007, by dialing 1-800-642-1687 (conference ID # 6094387). Additionally, an online archive of the broadcast will also be available through March 02, 2007.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a fully integrated, self-administered and self-managed publicly traded REIT. As of December 31, 2006, the company owned 30 centers in 21 states coast to coast, totaling approximately 8.4 million square feet of gross leasable area. Tanger also owned a 50% interest in two center containing approximately 667,000 square feet and managed for a fee three centers totaling approximately 293,000 square feet. Tanger is filing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended December 31, 2006. 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, 2005 (and December 31, 2006, when available).



TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three months ended
 
Year ended
 
 
December 31,
 
December 31,
 
 
2006
 
2005
 
2006
 
2005
REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base rentals (a)
  
$
36,449
    
$
33,855
    
$
138,696
    
$
131,227
  
 
Percentage rentals
    
2,896
      
2,418
      
7,188
      
6,346
  
 
Expense reimbursements
    
17,165
      
15,255
      
58,522
      
55,415
  
 
Other income (b)
    
2,039
      
2,098
      
7,305
      
5,773
  
   
Total revenues
    
58,549
      
53,626
      
211,711
      
198,761
  
                                 
EXPENSES
                                
 
Property operating
    
19,285
      
17,347
      
67,184
      
62,744
  
 
General and administrative
    
4,402
      
3,509
      
16,707
      
13,841
  
 
Depreciation and amortization
    
14,082
      
12,246
      
57,203
      
48,165
  
 
Abandoned acquisition due diligence costs
    
944
      
---
      
1,518
      
---
  
   
Total expenses
    
38,713
      
33,102
      
142,612
      
124,750
  
Operating income
    
19,836
      
20,524
      
69,099
      
74,011
  
 
Interest expense (c)
    
9,919
      
18,600
      
40,775
      
42,927
  
Income before equity in earnings of
                               
 
unconsolidated joint ventures, minority
                               
 
interests, discontinued operations and loss
                                
 
on sale of real estate
    
9,917
      
1,924
      
28,324
      
31,084
  
Equity in earnings of unconsolidated joint ventures
    
297
      
165
      
1,268
      
879
  
Minority interests
                                
 
Consolidated joint venture
    
---
      
(3,832
)
    
---
      
(24,043
)
 
Operating partnership
    
(1,455
)
    
379
      
(3,996
)
    
(1,348
)
Income (loss) from continuing operations
    
8,759
      
(1,364
)
    
25,596
      
6,572
  
Discontinued operations, net of minority interest (d)
    
---
      
1,489
      
11,713
      
2,360
  
Income before loss on sale of real estate
    
8,759
      
125
      
37,309
      
8,932
  
Loss on sale of real estate, net of minority interest
    
---
      
---
      
---
      
(3,843
)
Net income
   
8,759
      
125
      
37,309
      
5,089
  
Less applicable preferred share dividends
    
(1,406
)
    
(538
)
    
(5,433
)
    
(538
)
Net income (loss) available to common shareholders
  
$
7,353
    
$
(413
)
  
$
31,876
    
$
4,551
  
                                 
Basic earnings per common share:
                                
 
Income (loss) from continuing operations
  
$
.24
    
$
(.06
)
  
$
.66
    
$
.08
  
 
Net income (loss)
  
$
.24
    
$
(.01
)
  
$
1.04
    
$
.16
  
                                 
Diluted earnings per common share:
                                
 
Income (loss) from continuing operations
  
$
.23
    
$
(.06
)
  
$
.65
    
$
.08
  
 
Net income (loss)
  
$
.23
    
$
(.01
)
  
$
1.03
    
$
.16
  
                                 
Summary of discontinued operations (d)
                                
 
Operating income from discontinued operations
  
$
---
    
$
1,786
    
$
208
    
$
2,847
  
 
Gain on sale of real estate
    
---
      
---
      
13,833
      
---
  
 
Income from discontinued operations
    
---
      
1,786
      
14,041
      
2,847
  
 
Minority interest in discontinued operations
    
---
      
(297
)
    
(2,328
)
    
(487
)
Discontinued operations, net of minority interest
  
$
---
    
$
1,489
    
$
11,713
    
$
2,360
  
                                 
(a) Includes straight-line rent and market rent adjustments of $852 and $548 for the three months ended and $3,674 and $2,489 for the years ended December 31, 2006 and 2005, respectively.
(b) Includes gains on sale of outparcels of land of $402 and $127 for the years ended December 31, 2006 and 2005, respectively.
(c) Includes prepayment premium and deferred loan cost write offs of $917 for the year ended December 31, 2006 and $9,866 for the three months and year ended December 31, 2005, respectively.
(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 or classified as held for sale as of the end of the year in which we have no significant continuing involvement have been reported above as discontinued operations for the periods presented.



TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
December 31,
 
 
2006
 
2005
ASSETS:
 
 
 
 
 
 
 
 
Rental property
                
 
Land
 
$
130,137
 
 
$
120,715
 
 
Buildings, improvements and fixtures 
 
 
1,068,070
 
 
 
1,004,545
 
 
Construction in progress
 
 
18,640
 
 
 
27,606
 
     
1,216,847
      
1,152,866
  
 
Accumulated depreciation
    
(275,372
)
    
(253,765
)
 
Rental property, net
 
 
941,475
  
 
 
899,101
  
Cash and cash equivalents
 
 
8,453
 
 
 
2,930
 
Assets held for sale (1)
    
---
      
2,637
  
Investments in unconsolidated joint ventures
 
 
14,451
 
 
 
13,020
 
Deferred charges, net
 
 
55,089
 
 
 
64,555
 
Other assets
 
 
21,409
 
 
 
18,362
 
     
Total assets
 
 $
1,040,877
 
 
 $
1,000,605
 
 
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY:
Liabilities
 
 
 
 
 
 
 
 
Debt
                
 
Senior, unsecured notes (net of discount of $832 and $901,
               
   
respectively)
  
$
498,668
    
$
349,099
  
 
Mortgages payable (including premium of $3,441 and $5,771,
               
   
respectively)
    
179,911
      
201,233
  
 
Unsecured note
    
---
      
53,500
  
 
Unsecured lines of credit
    
---
      
59,775
  
 
Total debt
    
678,579
      
663,607
  
Construction trade payables
    
23,504
      
13,464
  
Accounts payable and accrued expenses
    
25,094
      
23,954
  
   
Total liabilities
    
727,177
      
701,025
  
Commitments
                
Minority interest in operating partnership
    
39,024
      
49,366
  
Shareholders’ equity
                
Preferred shares, 7.5% Class C, liquidation preference $25 per
                
 
share, 8,000,000 authorized, 3,000,000 and 2,200,000 shares
                
 
issued and outstanding at December 31, 2006 and 2005,
               
 
respectively
    
75,000
      
55,000
  
Common shares, $.01 par value, 50,000,000 authorized, at
               
 
31,041,336 and 30,748,716 shares issued and outstanding
                
 
December 31, 2006 and 2005, respectively
    
310
      
307
  
Paid in capital
    
346,361
      
338,688
  
Distributions in excess of earnings
    
(150,223
)
    
(140,738
)
Deferred compensation
    
---
      
(5,501
)
Accumulated other comprehensive income
    
3,228
      
2,458
  
   
Total shareholders’ equity
    
274,676
      
250,214
  
     
Total liabilities, minority interests and shareholders’
                
       
equity
  
$
1,040,877
    
$
1,000,605
  
                 

(1)  
Represents the Pigeon Forge, Tennessee property which was classified as “Assets held for sale” under the guidance of SFAS 144 as of December 31, 2005. This property was subsequently sold in January 2006 for net proceeds of $6.0 million with a gain on sale of approximately $3.6 million.



TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(in thousands, except per share, state and center information)
(Unaudited)
 
 
 
 
 
 
 
Three months ended
 
Year ended
 
 
December 31,
 
December 31,
 
 
2006
 
2005
 
2006
 
2005
                 
FUNDS FROM OPERATIONS (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
8,759
    
$
125
    
$
37,309
    
$
5,089
  
Adjusted for:
                                
 
Minority interest in operating partnership
    
1,455
      
(379
)
    
3,996
      
1,348
  
 
Minority interest adjustment - consolidated joint venture
    
---
      
234
      
---
      
(315
)
 
Minority interest, depreciation and amortization  
                                
   
attributable to discontinued operations
    
---
      
480
      
2,444
      
1,210
  
 
Depreciation and amortization uniquely significant to
                                
   
real estate - consolidated
    
14,015
      
12,181
      
56,938
      
47,916
  
 
Depreciation and amortization uniquely significant to
                                
   
real estate - unconsolidated joint ventures
    
623
      
379
      
1,825
      
1,493
  
 
(Gain) loss on sale of real estate
    
---
      
---
      
(13,833
)
    
3,843
  
Funds from operations (FFO)
    
24,852
      
13,020
      
88,679
      
60,584
  
Preferred share dividends
    
(1,406
)
    
(538
)
    
(5,433
)
    
(538
)
Funds from operations available to common  shareholders
  
$
23,446
    
$
12,482
    
$
83,246
    
$
60,046
  
Funds from operations available to common  
                                
 
shareholders per share - diluted
  
$
.63
    
$
.34
    
$
2.24
    
$
1.73
  
                                 
WEIGHTED AVERAGE SHARES
                                
Basic weighted average common shares
    
30,651
      
30,452
      
30,599
      
28,380
  
Effect of exchangeable notes
    
310
      
---
      
117
      
---
  
Effect of outstanding share and unit options
    
247
      
195
      
240
      
193
  
Effect of unvested restricted share awards
    
172
      
106
      
125
      
73
  
Diluted weighted average common shares (for earnings
   
31,380
      
30,753
      
31,081
      
28,646
  
 
per share computations)
                                
Convertible operating partnership units (b)
    
6,067
      
6,067
      
6,067
      
6,067
  
Diluted weighted average common shares (for funds
                               
 
from operations per share computations)
    
37,447
      
36,820
      
37,148
      
34,713
  
                                 
OTHER INFORMATION
                                
Gross leasable area open at end of period -
                                
 
Wholly owned
    
8,388
      
8,261
      
8,388
      
8,261
  
 
Partially owned - unconsolidated
   
667
      
402
      
667
      
402
  
 
Managed
    
293
      
64
      
293
      
64
  
                                 
Outlet centers in operation -
                               
 
Wholly owned
    
30
      
31
      
30
      
31
  
 
    Partially owned - unconsolidated
   
2
      
1
      
2
      
1
  
 
    Managed
    
3
      
1
      
3
      
1
  
                                 
States operated in at end of period (c)
    
21
      
22
      
21
      
22
  
Occupancy percentage at end of period (c) (d)
    
97.5
%
    
97.0
%
    
97.5
%
    
97.0
%




TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
FOOTNOTES TO SUPPLEMENTAL INFORMATION

                                 
(a) FFO is a non-GAAP financial measure. The most directly comparable GAAP measure is net income (loss), to which it is reconciled. 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.
 
(b) The convertible operating partnership units (minority interest in operating partnership) are not dilutive on earnings per share computed in accordance with generally accepted accounting principles.
 
(c) Excludes Myrtle Beach, South Carolina Hwy 17 and Wisconsin Dells, Wisconsin properties which are operated by us through 50% ownership joint ventures and three centers for which we only have management responsibilities.
 
(d) Excludes our wholly-owned, non-stabilized center in Charleston, South Carolina.

EX-99.2 3 tfoc8k02202007ex99-2.htm EXHIBIT 99.2 SUPPLEMENTAL Exhibit 99.2 Supplemental
 

 

Tanger Factory Outlet Centers, Inc.


Supplemental Operating and Financial Data

December 31, 2006








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, 2005 (and December 31, 2006 when available) and our Current Report on Form 8-K dated February 20, 2007.

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 - Occupancy at End of Each Period Shown (1)
      
5
 
Portfolio Occupancy at the End of Each Period (1)
      
6
 
Major Tenants (1)
      
7
 
Lease Expirations as of December 31, 2006
      
8
 
Leasing Activity (1)
      
9


Financial Data:

 
Consolidated Balance Sheets
      
10
 
Consolidated Statements of Operations
      
11
 
FFO and FAD Analysis
      
12
 
Unconsolidated Joint Venture Information
      
13
 
Debt Outstanding Summary
      
17
 
Senior Unsecured Notes Financial Covenants
     
17
 
Future Scheduled Principal Payments
      
18
         
Investor Information
     
19
 



3

Geographic Diversification


As of December 31, 2006
 
State
 
# of Centers
 
GLA   
 
% of GLA
South Carolina
3
1,171,771
14%
Georgia
3
825,862
10%
New York
1
729,315
9%
Alabama
2
636,668
8%
Texas
2
620,000
7%
Delaware
1
568,926
7%
Michigan
2
436,751
5%
Tennessee
1
419,038
5%
Utah
1
300,602
4%
Connecticut
1
291,051
4%
Missouri
1
277,883
3%
Iowa
1
277,230
3%
Oregon
1
270,280
3%
Illinois
1
256,514
3%
Pennsylvania
1
255,152
3%
Louisiana
1
243,499
3%
New Hampshire
1
227,998
3%
Florida
1
198,924
2%
North Carolina
2
186,458
2%
California
1
109,600
1%
Maine
2
84,313
1%
Total (1)
30
8,387,835
100%
 
(1)  
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.
 
4
 
Property Summary - Occupancy at End of Each Period Shown (1)

 
Location
Total GLA
12/31/06
% Occupied
12/31/06
% Occupied
9/30/06
% Occupied
6/30/06
% Occupied
3/31/06
% Occupied
12/31/05
Riverhead, NY
729,315
100%
98%
99%
98%
99%
Rehoboth, DE
568,926
99%
100%
99%
98%
99%
Foley, AL
557,093
98%
96%
96%
94%
97%
San Marcos, TX
442,510
99%
98%
99%
97%
100%
Myrtle Beach, SC
426,417
95%
94%
94%
91%
93%
Sevierville, TN
419,038
100%
100%
100%
100%
100%
Hilton Head, SC
393,094
88%
88%
84%
81%
88%
Charleston, SC
352,260
89%
81%
n/a
n/a
n/a
Commerce II, GA
346,244
99%
96%
99%
98%
97%
Howell, MI
324,631
100%
99%
100%
95%
99%
Park City, UT
300,602
100%
99%
100%
100%
100%
Locust Grove, GA
293,868
99%
93%
94%
95%
100%
Westbrook, CT
291,051
99%
96%
92%
90%
94%
Branson, MO
277,883
100%
99%
100%
99%
100%
Williamsburg, IA
277,230
99%
98%
97%
99%
100%
Lincoln City, OR
270,280
97%
96%
98%
99%
94%
Tuscola, IL
256,514
77%
70%
70%
70%
75%
Lancaster, PA
255,152
100%
100%
100%
99%
100%
Gonzales, LA
243,499
100%
100%
100%
100%
100%
Tilton, NH
227,998
100%
94%
99%
97%
100%
Fort Myers, FL
198,924
100%
100%
94%
91%
95%
Commerce I, GA
185,750
90%
87%
93%
87%
90%
Terrell, TX
177,490
99%
91%
99%
99%
100%
West Branch, MI
112,120
96%
100%
98%
98%
100%
Barstow, CA
109,600
100%
100%
95%
95%
95%
Blowing Rock, NC
104,280
100%
100%
100%
100%
100%
Nags Head, NC
82,178
100%
100%
100%
97%
100%
Boaz, AL
79,575
98%
98%
92%
92%
95%
Kittery I, ME
59,694
100%
100%
100%
100%
100%
Kittery II, ME
24,619
94%
94%
100%
100%
100%
Pigeon Forge, TN
n/a
n/a
n/a
n/a
n/a
99%
North Branch, MN
n/a
n/a
n/a
n/a
n/a
100%
Total 
8,387,835
98% (2)
96% (2)
96%
95%
97%

 
(1)  
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.
(2)  
Excludes the occupancy rate at our Charleston, South Carolina center which opened during the third quarter of 2006 and has not yet stabilized.

5

Portfolio Occupancy at the End of Each Period (1)


12/06 (2)        09/06 (2)        06/06        03/06        12/05      09/05       06/05        03/05        12/04    
 98%        96%       96%          95%          97%       96%      97%     95%       97%
 
 


(1)  
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.
 
(2)  
Excludes the occupancy rate at our Charleston, South Carolina center which opened during the third quarter of 2006 and has not yet stabilized.
 
 
 
6
Major Tenants (1)


Ten Largest Tenants As of December 31, 2006
 
Tenant
# of  
Stores
 
GLA  
% of     
Total GLA
The Gap, Inc.
60
595,187
7.1%
Phillips-Van Heusen
93
446,997
5.3%
Liz Claiborne
40
308,440
3.7%
Adidas
34
274,371
3.3%
VF Factory Outlet
30
269,609
3.2%
Dress Barn, Inc.
34
230,998
2.8%
Carter’s
43
213,191
2.5%
Nike
15
197,200
2.4%
Jones Retail Corporation
69
194,363
2.3%
Polo Ralph Lauren
23
188,628
2.2%
Total of All Listed Above
441
2,918,984
34.8%
 
(1)  
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.

7
Lease Expirations as of December 31, 2006

 

Percentage of Total Gross Leasable Area (1)



2007        2008        2009        2010        2011        2012        2013        2014        2015         2016        2017+
15.00%   16.00%    18.00%   16.00%    19.00%    7.00%      2.00%      1.00%     2.00%      2.00%      2.00% 
 
Percentage of Total Annualized Base Rent (1)

2007          2008                 2009             2010                 2011                2012                2013                2014                2015               2016                  2017+
13.00%             16.00%             17.00%         20.00%          19.00%              6.00%             2.00%              1.00%             2.00%              2.00%               2.00% 

 

 
(1)
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.
 
8
 
Leasing Activity (1)
 
 
 
03/31/06
 
 
06/30/06
 
 
09/30/06
 
 
12/31/06
 
 
Year to Date
 
Prior      
Year to Date
Re-tenanted Space:
            
   Number of leases
60
44
24
5
133
103
   Gross leasable area
220,484
150,083
78,044
16,889
465,500
419,250
   New base rent per square foot
$17.98
$21.32
$17.21
$24.31
$19.16
$17.74
   Prior base rent per square foot
$15.48
$16.47
$18.34
$19.78
$16.43
$16.56
   Percent increase
16.1%
29.5%
(6.1%)
22.9%
16.6%
7.1%
             
   New straight line base rent per square foot
$18.61
$22.15
$17.86
$26.05
$19.90
Not available
   Prior straight line base rent per square foot
$15.35
$16.21
$17.89
$19.24
$16.19
Not available
   Percent increase
21.2%
36.7%
(0.2%)
35.4%
22.9%
Not available
             
Renewed Space:
            
   Number of leases
220
69
31
26
346
357
   Gross leasable area
942,601
316,120
122,997
83,787
1,465,505
1,525,026
   New base rent per square foot
$17.71
$16.22
$15.87
$17.36
$17.22
$16.37
   Prior base rent per square foot
$16.37
$14.72
$14.93
$16.68
$15.91
$15.44
   Percent increase
8.2%
10.2%
6.3%
4.1%
8.2%
6.0%
             
   New straight line base rent per square foot
$17.91
$16.38
$16.34
$17.52
$17.43
Not available
   Prior straight line base rent per square foot
$16.03
$14.37
$15.54
$16.32
$15.65
Not available
   Percent increase
11.7%
14.0%
5.1%
7.4%
11.4%
Not available
             
Total Re-tenanted and Renewed Space:
            
   Number of leases
280
113
55
31
479
460
   Gross leasable area
1,163,085
466,203
201,041
100,676
1,931,005
1,944,276
   New base rent per square foot
$17.76
$17.86
$16.39
$18.53
$17.68
$16.66
   Prior base rent per square foot
$16.20
$15.28
$16.25
$17.20
$16.04
$15.68
   Percent increase
9.6%
16.9%
0.9%
7.7%
10.3%
6.3%
             
   New straight line base rent per square foot
$18.05
$18.24
$16.93
$18.95
$18.02
Not available
   Prior straight line base rent per square foot
$15.90
$14.96
$16.46
$16.81
$15.78
Not available
   Percent increase
13.5%
21.9%
2.9%
12.7%
14.2%
Not available
 
(1)  
Excludes one 401,992 square foot center in Myrtle Beach, SC and one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements and three centers totaling 293,462 square feet for which we only have management responsibilities.
 
 
9
Consolidated Balance Sheets (dollars in thousands)
 
 
    
12/31/06 
    
9/30/06
    
6/30/06
    
3/31/06
    
12/31/05
  
Assets
                                
  Rental property
                                
    Land
  
$
130,137
  
$
130,250
  
$
119,876
  
$
119,969
  
$
120,715
  
    Buildings
    
1,068,070
    
1,059,725
    
1,017,245
    
1,005,300
    
1,004,545
  
    Construction in progress
    
18,640
    
--
    
51,260
    
32,459
    
27,606
  
Total rental property
    
1,216,847
    
1,189,975
    
1,188,381
    
1,157,728
    
1,152,866
  
   Accumulated depreciation
    
(275,372
)
  
(266,054
)
  
(266,958
)
  
(257,256
)
  
(253,765
)
  Total rental property - net
   
941,475
    
923,921
    
921,423
    
900,472
    
899,101
  
  Cash & cash equivalents
    
8,453
    
20,197
    
1,785
    
2,153
    
2,930
  
  Assets held for sale
    
--
    
--
    
--
    
--
    
2,637
  
  Investments in unconsolidated joint  ventures
    
14,451
    
14,581
    
15,130
    
14,960
    
13,020
  
  Deferred charges - net
    
55,089
    
57,915
    
56,867
    
59,497
    
64,555
  
  Other assets
    
21,409
    
26,819
    
27,008
    
38,148
    
18,362
  
Total assets
  
$
1,040,877
  
$
1,043,433
  
$
1,022,213
  
$
1,015,230
  
$
1,000,605
  
Liabilities, minority interests & shareholders’ equity
                        
  Liabilities
                                
   Debt
                               
    Senior, unsecured notes, net of discount
  
$
498,668
  
$
498,650
  
$
349,132
  
$
349,115
  
$
349,099
  
    Mortgages payable, including premium
    
179,911
    
181,420
    
198,177
    
199,662
    
201,233
  
    Unsecured note
    
--
    
--
    
53,500
    
53,500
    
53,500
  
    Unsecured lines of credit
    
--
    
--
    
49,800
    
47,100
    
59,775
  
 Total debt
    
678,579
    
680,070
    
650,609
    
649,377
    
663,607
  
 Construction trade payables
    
23,504
    
21,049
    
22,372
    
14,247
    
13,464
  
 Accounts payable & accruals
    
25,094
    
27,254
    
22,095
    
21,434
    
23,954
  
Total liabilities
    
727,177
    
728,373
    
695,076
    
685,058
    
701,025
  
Minority interest in operating partnership
    
39,024
    
39,270
    
53,541
    
54,124
    
49,366
  
Shareholders’ equity
                                
   Preferred shares
    
75,000
    
75,000
    
75,000
    
75,000
    
55,000
  
   Common shares
    
310
    
310
    
310
    
309
    
307
  
   Paid in capital
    
346,361
    
345,411
    
332,103
    
330,545
    
338,688
  
   Distributions in excess of net income
    
(150,223
)
  
(147,030
)
  
(142,497
)
  
(136,853
)
  
(140,738
)
   Deferred compensation
    
--
    
--
    
--
    
--
    
(5,501
)
   Accum. other compreh. income
   
3,228
    
2,099
    
8,680
    
7,047
    
2,458
  
  Total shareholders’ equity
    
274,676
    
275,790
    
273,596
    
276,048
    
250,214
  
 Total liabilities, minority interest & shareholders’ equity
  
$
1,040,877
  
$
1,043,433
  
$
1,022,213
  
$
1,015,230
  
$
1,000,605
  
 
10
Consolidated Statements of Operations (dollars and shares in thousands)

 
  
Three Months Ended 
YTD
 
    
12/06 
    
09/06
    
06/06
    
03/06
    
12/05
    
12/06
    
12/05
  
Revenues
                                            
   Base rentals
  
$
36,449
  
$
35,403
  
$
33,879
  
$
32,965
  
$
33,855
  
$
138,696
  
$
131,227
  
   Percentage rentals
    
2,896
    
1,736
    
1,398
    
1,158
    
2,418
    
7,188
    
6,346
  
   Expense reimbursements
    
17,165
    
14,890
    
13,747
    
12,720
    
15,255
    
58,522
    
55,415
  
   Other income
    
2,039
    
2,407
    
1,504
    
1,355
    
2,098
    
7,305
    
5,773
  
     Total revenues
    
58,549
    
54,436
    
50,528
    
48,198
    
53,626
    
211,711
    
198,761
  
Expenses
                                            
   Property operating
    
19,285
    
17,139
    
15,995
    
14,765
    
17,347
    
67,184
    
62,744
  
   General & administrative
    
4,402
    
4,147
    
4,077
    
4,081
    
3,509
    
16,707
    
13,841
  
   Depreciation & amortization
    
14,082
    
13,578
    
13,593
    
15,950
    
12,246
    
57,203
    
48,165
  
   Abandoned acquisition due diligence costs
    
944
    
574
    
--
    
--
    
--
    
1,518
    
--
  
     Total expenses
    
38,713
    
35,438
    
33,665
    
34,796
    
33,102
    
142,612
    
124,750
  
Operating income
    
19,836
    
18,998
    
16,863
    
13,402
    
20,524
    
69,099
    
74,011
  
    Interest expense (1)
    
9,919
    
10,932
    
9,890
    
10,034
    
18,600
    
40,775
    
42,927
  
Income before equity in earnings of
  unconsolidated joint ventures, minority
  interests, discontinued operations and loss
  on sale of real estate excluded from
  discontinued operations
    
9,917
    
8,066
    
6,973
    
3,368
    
1,924
    
28,324
    
31,084
  
Equity in earnings of unconsolidated
  joint ventures
    
297
    
539
    
285
    
147
    
165
    
1,268
    
879
  
Minority interests:
                                            
   Consolidated joint venture
    
--
    
--
    
--
    
--
    
(3,832
)
  
--
    
(24,043
)
   Operating partnership
    
(1,455
)
  
(1,191
)
  
(969
)
  
(381
)
  
379
    
(3,996
)
  
(1,348
)
Income (loss) from continuing operations
    
8,759
    
7,414
    
6,289
    
3,134
    
(1,364
)
  
25,596
    
6,572
  
Discontinued operations (2)
    
--
    
--
    
--
    
11,713
    
1,489
    
11,713
    
2,360
  
Income before loss on sale of real
  estate
    
8,759
    
7,414
    
6,289
    
14,847
    
125
    
37,309
    
8,932
  
Loss on sale of real estate excluded from
  discontinued operations
    
--
    
--
    
--
    
--
    
--
    
--
    
(3,843
)
Net income
   
8,759
    
7,414
    
6,289
    
14,847
    
125
    
37,309
    
5,089
  
Less applicable preferred share dividends
    
(1,406
)
  
(1,406
)
  
(1,406
)
  
(1,215
)
  
(538
)
  
(5,433
)
  
(538
)
Net income (loss) available to common
  shareholders
  
$
7,353
  
$
6,008
  
$
4,883
  
$
13,632
  
$
(413
)
$
31,876
  
$
4,551
  
Basic earnings per common share:
                                            
  Income (loss) from continuing operations
  
$
.24
  
$
.20
  
$
.16
  
$
.06
  
$
(.06
)
$
.66
  
$
.08
  
  Net income (loss)
  
$
.24
  
$
.20
  
$
.16
  
$
.45
  
$
(.01
)
$
1.04
  
$
.16
  
Diluted earnings per common share:
                                            
  Income (loss) from continuing operations
  
$
.23
  
$
.19
  
$
.16
  
$
.06
  
$
(.06
)
$
.65
  
$
.08
  
  Net income (loss)
  
$
.23
  
$
.19
  
$
.16
  
$
.44
  
$
(.01
)
$
1.03
  
$
.16
  
Weighted average common shares:
                                            
  Basic
    
30,651
    
30,619
    
30,593
    
30,531
    
30,452
    
30,599
    
28,380
  
  Diluted
    
31,380
    
30,983
    
30,915
    
30,861
    
30,753
    
31,081
    
28,646
  
 

(1)  
Three months ended September 30, 2006 and year ended December 31, 2006 includes prepayment premium and deferred loan cost write off of $917,000. Three months and year ended December 31, 2005 includes prepayment premium and deferred loan cost write off of $9.9 million.
(2)  
In accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long Lived Assets”, the results of operations for properties sold for which we have no significant continuing involvement, including any gain or loss on such sales, and properties classified as assets held for sale, 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
 
    
12/06 
    
09/06
    
06/06
    
03/06
    
12/05
    
12/06
    
12/05
  
Funds from operations:
                                            
  Net income
 
$
8,759
  
$
7,414
  
$
6,289
  
$
14,847
  
$
125
  
$
37,309
  
$
5,089
  
  Adjusted for -
                                           
   Minority interest in operating
    Partnership
    
1,455
    
1,191
    
969
    
381
    
(379
)
  
3,996
    
1,348
  
   Minority interest adjustment
    consolidated joint venture
    
--
    
--
    
--
    
--
    
234
    
--
    
(315
)
   Minority interest, depreciation
    and amortization in
    discontinued operations
    
--
    
--
    
--
    
2,444
    
480
    
2,444
    
1,210
  
   Depreciation and amortization
    uniquely significant to real estate -
    wholly owned
    
14,015
    
13,512
    
13,526
    
15,885
    
12,181
    
56,938
    
47,916
  
   Depreciation and amortization
    uniquely significant to real estate -
    joint ventures
   
623
    
444
    
379
    
379
    
379
    
1,825
    
1,493
 
   (Gain) loss on sale of real estate
    
--
    
--
    
--
    
(13,833
)
  
--
    
(13,833
)
  
3,843
  
   Preferred share dividend
    
(1,406
)
  
(1,406
)
  
(1,406
)
  
(1,215
)
  
(538
)
  
(5,433
)
  
(538
)
Funds from operations
  
$
23,446
  
$
21,155
  
$
19,757
  
$
18,888
  
$
12,482
  
$
83,246
  
$
60,046
  
                                             
Funds from operations per share
  
$
.63
  
$
.57
  
$
.53
  
$
.51
  
$
.34
  
$
2.24
  
$
1.73
  
Funds available for distribution:
                                            
   Funds from operations
  
$
23,446
  
$
21,155
  
$
19,757
  
$
18,888
  
$
12,482
  
$
83,246
  
$
60,046
  
   Adjusted For - 
                                            
    Corporate depreciation
     excluded above
    
67
    
67
    
66
    
65
    
66
    
265
    
249
  
    Amortization of finance costs
    
413
    
386
    
298
    
298
    
276
    
1,395
    
1,295
  
    Early extinguishment of debt
    
--
    
917
    
--
    
--
    
9,866
    
917
    
9,866
  
    Amortization of share compensation
    
651
    
880
    
661
    
481
    
429
    
2,673
    
1,565
  
    Straight line rent adjustment
    
(521
)
  
(633
)
  
(601
)
  
(464
)
  
(393
)
  
(2,219
)
  
(1,750
)
    Market rent adjustment
    
(332
)
  
(326
)
  
(348
)
  
(458
)
  
(158
)
  
(1,464
)
  
(741
)
    Market rate interest adjustment
    
(592
)
  
(589
)
  
(581
)
  
(568
)
  
(609
)
  
(2,330
)
  
(2,533
)
    2nd generation tenant allowances
    
(3,351
)
  
(2,527
)
  
(2,017
)
  
(1,650
)
  
(2,130
)
  
(9,545
)
  
(10,228
)
    Capital improvements
    
(3,041
)
  
(2,911
)
  
(2,913
)
  
(2,424
)
  
(1,572
)
  
(11,289
)
  
(6,596
)
    Consolidated joint venture minority interest share of adjustments
   
--
    
--
    
--
    
--
    
(234
)
  
--
    
315
  
Funds available for distribution
  
$
16,740
  
$
16,419
  
$
14,322
  
$
14,168
  
$
18,023
  
$
61,649
  
$
51,488
  
Funds available for distribution
  per share
  
$
.45
  
$
.44
  
$
.39
  
$
.38
  
$
.49
  
$
1.66
  
$
1.48
  
Dividends paid per share
  
$
.34
  
$
.34
  
$
.34
  
$
.3225
  
$
.3225
  
$
1.3425
  
$
1.28
  
                                             
FFO payout ratio
    
54
%
  
60
%
  
64
%
  
63
%
  
95
%
  
60
%
  
74
%
FAD payout ratio
    
76
%
  
77
%
  
87
%
  
85
%
  
66
%
  
81
%
  
86
%
Diluted weighted average common shs.
    
37,447
    
37,050
    
36,982
    
36,928
    
36,820
    
37,148
    
34,713
  
 
 
12
Unconsolidated Joint Venture Information - All
Summary Balance Sheets (dollars in thousands)
 
 
 
    
12/31/06 
    
9/30/06
    
6/30/06
    
3/31/06
    
12/31/05
    
Tanger’s Share as of 12/31/06 
      (1)
 
Assets
                                      
   Investment properties at cost - net
  
$
74,253
  
$
74,913
  
$
37,474
  
$
64,463
  
$
64,915
  
$
37,127
  
   Construction in progress
    
38,449
    
29,776
    
65,298
    
26,562
    
15,734
    
12,816
  
   Cash and cash equivalents
    
6,539
    
14,173
    
2,926
    
5,284
    
6,355
    
2,617
  
   Deferred charges - net
    
2,824
    
2,122
    
1,805
    
1,729
    
1,548
    
1,284
  
   Other assets
    
15,239
    
21,141
    
13,220
    
10,647
    
6,690
    
6,638
  
Total assets
  
$
137,304
  
$
142,125
  
$
120,723
  
$
108,685
  
$
95,242
  
$
60,482
  
                                       
Liabilities & Owners’ Equity
                                      
   Mortgage payable
 
$
100,138
  
$
99,561
  
$
77,380
  
$
69,323
  
$
61,081
  
$
44,162
  
   Construction trade payables
    
2,734
    
6,162
    
9,665
    
6,646
    
6,588
    
1,367
  
   Accounts payable & other liabilities
    
2,767
    
2,904
    
858
    
1,035
    
1,177
    
1,351
  
Total liabilities
    
105,639
    
108,627
    
87,903
    
77,004
    
68,846
    
46,880
  
Owners’ equity
    
31,665
    
33,498
    
32,820
    
31,681
    
26,396
    
13,602
  
Total liabilities & owners’ equity
  
$
137,304
  
$
142,125
  
$
120,723
  
$
108,685
  
$
95,242
  
$
60,482
  

Summary Statements of Operations (dollars in thousands)

 
  
Three Months Ended 
YTD
 
    
12/06 
    
09/06
    
06/06
    
03/06
    
12/05
    
12/06
    
12/05
  
Revenues
  
$
4,434
  
$
4,441
  
$
3,171
  
$
2,657
  
$
2,730
  
$
14,703
  
$
10,909
  
Expenses
                                            
Property operating
    
1,457
    
1,726
    
1,202
    
1,030
    
1,050
    
5,415
    
3,979
  
General & administrative
    
82
    
58
    
66
    
7
    
5
    
213
    
24
  
Depreciation & amortization
    
1,283
    
924
    
788
    
786
    
789
    
3,781
    
3,102
  
Total expenses
    
2,822
    
2,708
    
2,056
    
1,823
    
1,844
    
9,409
    
7,105
  
Operating income
    
1,612
    
1,733
    
1,115
    
834
    
886
    
5,294
    
3,804
  
Interest expense
    
1,060
    
700
    
578
    
569
    
586
    
2,907
    
2,161
  
Net income
  
$
552
  
$
1,033
  
$
537
  
$
265
  
$
300
  
$
2,387
  
$
1,643
  
Tanger’s share of:
                                            
Total revenues less property
operating and general &
administrative expenses (“NOI”)
  
$
1,457
  
$
1,334
  
$
952
  
$
810
  
$
837
  
$
4,553
  
$
3,453
  
Net income
  
$
297
  
$
539
  
$
285
  
$
147
  
$
165
  
$
1,268
  
$
879
  
Depreciation (real estate related)
  
$
623
  
$
444
  
$
379
  
$
379
  
$
379
  
$
1,825
  
$
1,493
  

13

Unconsolidated Joint Venture Information - TWMB Associates, LLC (Myrtle Beach, SC)
Summary Balance Sheets (dollars in thousands)
 
 
    
12/31/06 
    
09/30/06
    
06/30/06
    
03/31/06
    
12/31/05
    
Tanger’s Share as of 12/31/06
 
Assets
                                      
   Investment properties at cost - net
  
$
36,476
  
$
36,842
  
$
37,474
  
$
38,137
  
$
38,817
  
$
18,238
  
   Cash and cash equivalents
    
1,941
    
2,067
    
1,761
    
2,093
    
1,993
    
971
  
   Deferred charges - net
    
1,043
    
1,095
    
1,119
    
1,159
    
1,257
    
522
  
   Other assets
    
1,888
    
1,928
    
3,020
    
2,473
    
1,760
    
944
  
Total assets
  
$
41,348
  
$
41,932
  
$
43,374
  
$
43,862
  
$
43,827
  
$
20,675
  
                                       
Liabilities & Owners’ Equity
                                      
   Mortgage payable
 
$
35,800
  
$
35,800
  
$
35,800
  
$
35,800
  
$
35,800
  
$
17,900
  
   Construction trade payables
    
321
    
155
    
174
    
174
    
184
    
161
  
   Accounts payable & other liabilities
    
119
    
256
    
541
    
491
    
176
    
60
  
Total liabilities
    
36,240
    
36,211
    
36,515
    
36,465
    
36,160
    
18,121
  
Owners’ equity
    
5,108
    
5,721
    
6,859
    
7,397
    
7,667
    
2,554
  
Total liabilities & owners’ equity
  
$
41,348
  
$
41,932
  
$
43,374
  
$
43,862
  
$
43,827
  
$
20,675
  

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
12/06
09/06
06/06
03/06
12/05
12/06
12/05
Revenues
$2,842
$3,016
$2,976
$2,657
$2,730
$11,491
$10,909
Expenses
              
   Property operating
1,050
1,068
1,035
1,030
1,050
4,183
3,979
   General & administrative
5
2
20
7
5
34
24
   Depreciation & amortization
807
797
788
786
789
3,178
3,102
     Total expenses
1,862
1,867
1,843
1,823
1,844
7,395
7,105
Operating income
980
1,149
1,133
834
886
4,096
3,804
   Interest expense
564
573
578
569
586
2,284
2,161
Net income
$416
$576
$555
$265
$300
$1,812
$1,643
Tanger’s share of:
              
     Total revenues less property
     operating and general &
     administrative expenses (“NOI”)
 
 
$893
 
 
$973
 
 
$961
 
 
$810
 
 
$837
 
 
$3,637
 
 
$3,453
     Net income
$216
$303
$292
$147
$165
$958
$879
     Depreciation (real estate related)
$395
$384
$379
$379
$379
$1,537
$1,493

14

Unconsolidated Joint Venture Information - Tanger Wisconsin Dells, LLC
Summary Balance Sheets (dollars in thousands)
 
 
 
    
12/31/06 
    
09/30/06
    
06/30/06
    
03/31/06
    
12/31/05
    
Tanger’s Share as of 12/31/06
 
Assets
                                      
   Investment properties at cost - net
  
$
37,777
  
$
38,071
  
$
--
  
$
--
  
$
--
  
$
18,889
  
   Construction in progress
    
--
    
--
    
37,582
    
26,562
    
15,734
    
--
  
   Cash and cash equivalents
    
681
    
668
    
220
    
18
    
2,305
    
341
  
   Deferred charges - net
    
1,011
    
1,026
    
685
    
569
    
290
    
506
  
   Other assets
    
7,463
    
7,834
    
148
    
18
    
12
    
3,732
  
Total assets
  
$
46,932
  
$
47,599
  
$
38,635
  
$
27,167
  
$
18,341
  
$
23,468
  
                                       
Liabilities & Owners’ Equity
                                      
   Mortgage payable
 
$
28,894
  
$
26,154
  
$
16,508
  
$
8,194
  
$
--
  
$
14,447
  
   Construction trade payables
    
2,413
    
6,007
    
9,491
    
6,472
    
6,404
    
1,207
  
   Accounts payable & other liabilities
    
2,454
    
2,454
    
147
    
1
    
458
    
1,228
  
Total liabilities
    
33,761
    
34,615
    
26,146
    
14,667
    
6,862
    
16,882
  
Owners’ equity
    
13,171
    
12,984
    
12,489
    
12,500
    
11,479
    
6,586
  
Total liabilities & owners’ equity
  
$
46,932
  
$
47,599
  
$
38,635
  
$
27,167
  
$
18,341
  
$
23,468
  

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended 
YTD
 
    
12/06 
    
09/06
    
06/06
    
03/06
    
12/05
    
12/06
    
12/05
  
Revenues
  
$
1,573
  
$
1,409
  
$
162
  
$
--
  
$
--
  
$
3,144
  
$
--
  
Expenses
                                            
   Property operating
    
407
    
658
    
167
    
--
    
--
    
1,232
    
--
  
   General & administrative
    
7
    
6
    
6
    
--
    
--
    
19
    
--
  
   Depreciation & amortization
    
476
    
127
    
--
    
--
    
--
    
603
    
--
  
     Total expenses
    
890
    
791
    
173
    
--
    
--
    
1,854
    
--
  
Operating income
    
683
    
618
    
(11
)
  
--
    
--
    
1,290
    
--
  
   Interest expense
    
496
    
127
    
--
    
--
    
--
    
623
    
--
  
Net income (loss)
  
$
187
  
$
491
  
$
(11
)
$
--
  
$
--
  
$
667
  
$
--
  
Tanger’s share of:
                                            
     Total revenues less property
      operating and general &
     administrative expenses (“NOI”)
  
$
580
  
$
372
  
$
(5
)
$
--
  
$
--
  
$
947
  
$
--
  
     Net income (loss)
  
$
105
  
$
248
  
$
(5
)
$
--
  
$
--
  
$
348
  
$
--
  
     Depreciation (real estate related)
  
$
228
  
$
60
  
$
--
  
$
--
  
$
--
  
$
288
  
$
--
  

15

Unconsolidated Joint Venture Information - Deer Park Enterprise, LLC
Summary Balance Sheets (dollars in thousands)
 
 
 
    
12/31/06 
    
09/30/06
    
06/30/06
    
03/31/06
    
12/31/05
    
Tanger’s Share as of 12/31/06
  
Assets
                                      
   Investment in properties at cost - net
  
$
--
  
$
--
  
$
--
  
$
26,326
  
$
26,098
  
$
--
  
   Construction in progress
    
38,449
    
29,776
    
27,716
    
--
    
--
    
12,816
  
   Cash and cash equivalents
    
3,917
    
11,438
    
945
    
3,173
    
2,057
    
1,306
  
   Deferred charges - net
    
770
    
1
    
1
    
1
    
1
    
257
  
   Other assets
    
5,888
    
11,379
    
10,052
    
8,156
    
4,918
    
1,963
  
Total assets
  
$
49,024
  
$
52,594
  
$
38,714
  
$
37,656
  
$
33,074
  
$
16,342
  
                                       
Liabilities & Owners’ Equity
                                      
   Mortgage payable
 
$
35,444
  
$
37,607
  
$
25,072
  
$
25,329
  
$
25,281
  
$
11,815
  
   Accounts payable & other liabilities
    
194
    
194
    
170
    
543
    
543
    
65
  
Total liabilities
    
35,638
    
37,801
    
25,242
    
25,872
    
25,824
    
11,880
  
Owners’ equity
    
13,386
    
14,793
    
13,472
    
11,784
    
7,250
    
4,462
  
Total liabilities & owners’ equity
  
$
49,024
  
$
52,594
  
$
38,714
  
$
37,656
  
$
33,074
  
$
16,342
  

Summary Statements of Operations (dollars in thousands)

   
Three Months Ended
  
YTD
  
 
    
12/06 
    
09/06
    
06/06
    
03/06
    
12/05
    
12/06
    
12/05
  
Revenues
  
$
19
  
$
16
  
$
33
  
$
--
  
$
--
  
$
68
  
$
--
  
Expenses
                                            
   Property operating
    
--
    
--
    
--
    
--
    
--
    
--
    
--
  
   General & administrative
    
70
    
50
    
40
    
--
    
--
    
160
    
--
  
   Depreciation & amortization
    
--
    
--
    
--
    
--
    
--
    
--
    
--
  
     Total expenses
    
70
    
50
    
40
    
--
    
--
    
160
    
--
  
Operating income
    
(51
)
  
(34
)
  
(7
)
  
--
    
--
    
(92
)
  
--
  
   Interest expense
    
--
    
--
    
--
    
--
    
--
    
--
    
--
  
Net loss
  
$
(51
)
$
(34
)
$
(7
)
$
--
  
$
--
  
$
(92
)
$
--
  
Tanger’s share of:
                                            
     Total revenues less property
     operating and general &
     administrative expenses (“NOI”)
  
$
(17
)
$
(12
)
$
(2
)
$
--
  
$
--
  
$
(31
)
$
--
  
     Net loss
  
$
(17
)
$
(12
)
$
(2
)
$
--
  
$
--
  
$
(31
)
$
--
  
     Depreciation (real estate related)
  
$
--
  
$
--
  
$
--
  
$
--
  
$
--
  
$
--
  
$
--
  

16

Debt Outstanding Summary (dollars in thousands)

 
As of December 31, 2006
  
 
    
Principal
    Balance 
 
 
Interest
Rate
 
 
Maturity
Date
  
Mortgage debt
                    
  COROC Holdings, LLC, including centers
     located in Rehoboth Beach, DE; Foley, AL;
      Myrtle Beach (Hwy 501), SC; Hilton Head,
     SC; Park City, UT; Westbrook, CT;
     Lincoln City, OR; Tuscola, IL; Tilton, NH
 
$
176,470
    
6.590
%
  
07/10/08
  
 
  Net debt premium, COROC Holdings, LLC (1)
   
3,441
              
Total mortgage debt
   
179,911
              
                     
Unsecured debt
                    
  Unsecured credit facilities
    
---
    
Libor + 0.85
%
  
06/30/09
  
   2008 Senior unsecured notes
    
100,000
    
9.125
%
  
02/15/08
  
   2015 Senior unsecured notes
   
250,000
    
6.15
%
  
11/15/15
  
   2026 Senior unsecured exchangeable notes
    
149,500
    
3.75
%
  
8/15/26
  
Net discount, senior unsecured notes
    
(832
)
            
 Total unsecured debt
    
498,668
              
Total debt
  
$
678,579
              
Senior Unsecured Notes Financial Covenants (2)

As of December 31, 2006
 
Required
Actual
Compliance
Total Consolidated Debt to Adjusted Total Assets
60%
51%
Yes
Total Secured Debt to Adjusted Total Assets
40%
13%
Yes
Total Unencumbered Assets to Unsecured Debt
135%
143%
Yes
Consolidated Income Available for Debt Service to Annual Debt Service Charge
 
2.00
 
3.19
 
Yes

(1)  
Represents a net premium on mortgage debt related to the Charter Oak acquisition.
(2)  
For a complete listing of all Debt Covenants related to the Company’s Senior Unsecured Notes, as well as definitions of the above terms, please refer to the Company’s filings with the Securities and Exchange Commission.

17

Future Scheduled Principal Payments (dollars in thousands)

As of December 31, 2006
  
 
 
Year
    
Scheduled 
Amortization
Payments 
   
Balloon  
Payments
    
Total    
Scheduled
Payments
  
2007
 
$
3,791
  
$
--
  
$
3,791
  
2008
    
2,328
    
270,351
    
272,679
  
2009
    
--
    
--
    
--
  
2010
    
--
    
--
    
--
  
2011
    
--
    
--
    
--
  
2012
    
--
    
--
    
--
  
2013
    
--
    
--
    
--
  
2014
    
--
    
--
    
--
  
2015
    
--
    
250,000
    
250,000
  
2016 & thereafter
    
--
    
149,500(1
)
  
149,500
  
   
$
6,119
  
$
669,851
  
$
675,970
  
Net Premium on Debt
       
2,609
  
               
$
678,579
  
 
(1) Of this amount, $149.5 million represents our exchangeable, senior unsecured notes issued in August 2006. On and after August 18, 2011, holders may exchange their notes for cash in an amount equal to the lesser of the exchange value and the aggregate principal amount of the notes to be exchanged, and, at our option, Company common shares, cash or a combination thereof for any excess. Note holders may exchange their notes prior to August 18, 2011 only upon the occurrence of specified events. In addition, on August 18, 2011, August 15, 2016 or August 15, 2021, note holders may require us to repurchase the notes for an amount equal to the principal amount of the notes plus any accrued and unpaid interest thereon.

 
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 6825
Fax: (336) 297-0931
e-mail: tangermail@tangeroutlet.com
Mail: Tanger Factory Outlet Centers, Inc.
3200 Northline Avenue
Suite 360
Greensboro, NC 27408
19


 
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