-----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, OggBK1uFhtENjUKrJiZbOLoISFYgBdD/vmpZGj/E2JPWO4pcLn/2MC7m3whszv4b bVNzorKyGnHsXB9dGW4xcw== 0000899715-08-000111.txt : 20081028 0000899715-08-000111.hdr.sgml : 20081028 20081028170206 ACCESSION NUMBER: 0000899715-08-000111 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080930 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20081028 DATE AS OF CHANGE: 20081028 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: 081145308 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 tfoc8k09302008.htm TFOC 8-K tfoc8k09302008.htm

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 28, 2008


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 October 28, 2008, 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, 2008.  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 under Item 2.02, 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 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
At it’s meeting on October 28, 2008, the Nominating and Corporate Goverance Committee of the Company’s Board of Directors recommended, and the Board of Directors approved, that the number of directors be expanded from six members to seven members, and that Ms. Bridget Ryan Berman shall serve as independent director of the Company effective January 1, 2009 until the next Annual Shareholders Meeting. Ms. Berman has not yet been named to any specific committees of the Board of Directors.  Ms. Berman will be paid an annual compensation fee and will earn per meeting and other fees consistent with other Board members as set annually based upon the recommendation of the Board’s Compensation Committee.
 
 Ms. Berman was formerly the Chief Executive Officer of Giorgio Armani Corp., the wholly-owned US subsidiary of Giorgio Armani S.p.A., one of the leading fashion and luxury goods groups in the world, from 2006 to 2007.  Previously, she was Vice President/Chief Operating Officer of Apple Computer Retail from 2004 to 2005 and held various executive positions with Polo Ralph Lauren Corporation, including Group President of Polo Ralph Lauren Global Retail, from 1992 to 2004.  Ms. Berman also served in various capacities at May Department Stores, Federated Department Stores, and Allied Stores Corp. from 1982 to 1992.  In addition, Ms. Berman was a member of the board of directors, and served on the audit committee for J. Crew Group, Inc. from 2005 to 2006.  The Company believes that Ms. Berman’s extensive experience and impressive background in the retail industry will add value and perspective to our Board.  
 
Item 7.01                      Regulation FD Disclosure
 
On October 28, 2008, the Company made publicly available certain supplemental operating and financial information for the quarter ended September 30, 2008.  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 under Item 7.01, 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, 2008.

Exhibit 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended September 30, 2008.


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 28, 2008

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 September 30, 2008.

 99.2  
Supplemental operating and financial information of the Company as of and for the quarter ended September 30, 2008.


EX-99.1 2 tfoc8k09302008ex99-1.htm EXHIBIT 99.1 PRESS RELEASE tfoc8k09302008ex99-1.htm
Tanger Factory Outlet Centers, Inc.

News Release

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

TANGER REPORTS THIRD QUARTER 2008 RESULTS
10.6% Increase in Total FFO, 9.4% Increase in FFO Per Share
4.7% Increase in Same Center Net Operating Income
Adds Bridget Ryan Berman to Board of Directors

Greensboro, NC, October 28, 2008, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported funds from operations available to common shareholders (“FFO”), a widely accepted measure of REIT performance, for the three months ended September 30, 2008 increased 9.4% to $0.70 per share, or $26.5 million, as compared to FFO of $0.64 per share, or $23.9 million, for the three months ended September 30, 2007.  For the nine months ended September 30, 2008, FFO was $64.4 million, or $1.70 per share, as compared to FFO of $67.4 million, or $1.80 per share, for the nine months ended September 30, 2007.  

FFO for the nine months ended September 30, 2008 was impacted by a previously announced $8.9 million charge relating to the settlement of $200.0 million in 10 year US Treasury locks, as well as a $406,000 prepayment premium associated with the early extinguishment of debt.  Excluding these two non-recurring charges, FFO for the nine months ended September 30, 2008 would have been $1.94 per share, representing an increase of 7.8% compared to the nine months ended September 30, 2007.

For the three months ended September 30, 2008, net income available to common shareholders increased 26.9% to $8.9 million or $0.28 per share, as compared to $7.0 million, or $0.22 per share for the third quarter of 2007.  Net income available to common shareholders for the nine months ended September 30, 2008 was $14.3 million, or $0.45 per share compared $13.9 million, or $0.44 per share for the first nine months of 2007.  Net income available to common shareholders for the nine months ended September 30, 2008 was also impacted by the non-recurring charges described above.

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 press release.

Third Quarter Highlights

 
·  
Received an upgrade from BBB- to BBB from Standard and Poor’s Ratings Services on October 23, 2008
 
·  
31.2% debt-to-total market capitalization ratio, compared to 30.5% as of September 30, 2007
 
·  
3.92 times interest coverage ratio compared to 3.40 times last year
 
·  
4.7% increase in same center net operating income for the third quarter and year to date
 
·  
47.0% average increase in base rental rates on 77,000 square feet of re-leased space during the third quarter of 2008, 43.8% increase year to date, compared to a 37.6% increase year to date in 2007
 
·  
8.3% average increase in base rental rates on 56,000 square feet of signed renewals during the third quarter of 2008, 17.6% increase year to date, compared to a 13.2% increase year to date in 2007
 
·  
96.7% occupancy rate for wholly-owned properties, up 0.5% from June 30, 2008
 
·  
Same-space tenant sales for the rolling twelve months ended September 30, 2008 increased 0.3% to $341 per square foot excluding two properties undergoing major renovations
 

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, “Our third quarter results were very positive.  Same center net operating income increased 4.7% for the quarter as a result of our continuing efforts to drive rental rates on the renewal and releasing of space.  Our balance sheet is conservatively positioned given current financial and economic conditions”.

Financing Activities and Balance Sheet Summary

On October 23, 2008, Tanger was upgraded by Standard and Poor’s Ratings Services from BBB- to BBB, making it one of only two REITs to receive a ratings upgrade this year.  The company also currently maintains an investment grade rating with Moody’s Investors Service of Baa3.

On June 11, 2008, Tanger closed on a $235.0 million unsecured three year term loan facility.  The facility bears interest at a spread over LIBOR of 160 basis points, with the spread adjusting over time, based upon the debt ratings of the company.  

On June 26, 2008, the company used proceeds from the term loan to repay its only remaining mortgage with a principal balance of approximately $170.7 million two weeks ahead of its optional prepayment date.  As a result of the repayment of this mortgage, Tanger’s entire portfolio of wholly-owned properties is now unencumbered.  The remaining proceeds of approximately $62.8 million, net of closing costs, were applied against amounts outstanding on the company’s unsecured lines of credit and to settle two treasury based interest rate lock protection agreements.

On July 9, 2008, Tanger entered into a LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on $118.0 million of the unsecured three year term loan facility to a fixed rate of 5.21%.  The interest rate swap agreement expires on April 1, 2011.  Subsequently, on September 25, 2008, the company entered into an additional LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on the remaining $117.0 million of the unsecured three year term loan facility to a fixed rate of 5.30%.  This interest rate swap agreement also expires on April 1, 2011.

As of September 30, 2008, Tanger had $783.3 million of debt outstanding, equating to a 31.2% debt-to-total market capitalization ratio.  The company had $149.5 million outstanding on its $325.0 million in available unsecured lines of credit, and approximately 81% of Tanger’s debt was at fixed interest rates as of September 30, 2008.  During the third quarter of 2008, Tanger continued to maintain a strong interest coverage ratio of 3.92 times, compared to 3.40 times during the third quarter of last year.

Portfolio Operating Results

During the first nine months of 2008, Tanger executed 351 lease documents, totaling 1,521,000 square feet within its wholly-owned properties.  Lease renewals accounted for 1,040,000 square feet, or 77.0% of the square feet which was scheduled to expire during 2008, and generated a 17.6% increase in average base rental rates on a straight-line basis. Base rental increases on re-tenanted space during the first nine months of 2008 averaged 43.8% on a straight-line basis and accounted for the remaining 481,000 square feet.

Same center net operating income increased 4.7% for the third quarter of 2008 and the first nine months of 2008 compared to the same period in 2007.  Excluding two properties undergoing major renovations, reported tenant comparable sales per square foot for the rolling twelve months ended September 30, 2008 were up 0.3% to $341 per square foot, compared to $340 per square foot for the twelve months ended September 30, 2007.  Sales were impacted by the general weakness in the U.S. economy, as well as severe weather and hurricanes during the third quarter of the year.

Investment and Other Activities

In Washington County, south of Pittsburgh, Pennsylvania, Tanger held a very successful grand opening celebration of its second center in the state on August 29, 2008.  The first phase, totaling 370,000 square feet, was approximately 86% leased upon opening.  The Washington County center is wholly owned by Tanger.

On October 23, 2008, Tanger held the grand opening of its center in Deer Park (Long Island), NY.  The initial phase which contains approximately 656,000 square feet of retail space and 26,000 square feet of office space, opened to huge crowds and parking lots filled beyond their capacity.  The retail space at the Deer Park center was approximately 77% leased upon opening.  The Deer Park property is owned through a joint venture of which Tanger and two venture partners each own a one-third interest.

Based upon the tremendous response by customers at both of these centers’ grand opening events, the company feels confident additional tenant interest in the remaining available space will remain high and additional signed leases for both properties will be completed during the first year stabilization period.

Tanger has entered into purchase options on new development sites located in Mebane, North Carolina and Irving, Texas.  Tanger is continuing with its predevelopment work at these locations.  However in October, 2008, Tanger made the decision to terminate its purchase options with respect to its potential sites in Port St. Lucie, Florida and Phoenix, Arizona.  As a result, Tanger will be taking a charge of approximately $1.8 million relating to its predevelopment costs on these projects during the fourth quarter of 2008.

Tanger Elects New Board Member

At its meeting on October 28, 2008, the Nominating and Corporate Governance Committee of the company’s Board of Directors recommended, and the Board of Directors approved, that the number of directors be expanded from six members to seven members, and that Ms. Bridget Ryan Berman shall serve as independent director of the company effective January 1, 2009 until the next Annual Shareholders Meeting.

Ms. Berman was formerly the Chief Executive Officer of Giorgio Armani Corp., the wholly-owned US subsidiary of Giorgio Armani S.p.A., one of the leading fashion and luxury goods groups in the world, from 2006 to 2007.  Previously, she was Vice President/Chief Operating Officer of Apple Computer Retail from 2004 to 2005 and held various executive positions with Polo Ralph Lauren Corporation, including Group President of Polo Ralph Lauren Global Retail, from 1992 to 2004.  Ms. Berman also served in various capacities at May Department Stores, Federated Department Stores, and Allied Stores Corp. from 1982 to 1992.  In addition, Ms. Berman was a member of the board of directors, and served on the audit committee for J. Crew Group, Inc. from 2005 to 2006.

“We are pleased to add to our Board of Directors someone with Ms. Berman’s credentials”, said Steven B. Tanger, President and Chief Operating Officer.  “Ms. Berman’s extensive experience and impressive background in the retail industry will add value and perspective to our board.”

 

2008 FFO Per Share Guidance

Based on current market conditions and the strength and stability of its core portfolio, the company currently believes its net income for 2008, excluding gains or losses on the sale of real estate, will be between $0.63 and $0.69 per share and its FFO for 2008 will be between $2.35 and $2.41 per share.  The company’s earnings estimates include the impact of the expected write-off of predevelopment costs mentioned above totaling approximately $1.8 million, but do not include the impact of any potential gains on the sale of land parcels or the impact of any potential sales or acquisitions of properties.  The following table provides the reconciliation of estimated diluted net income available to common shareholders per share to estimated diluted FFO per share:
For the twelve months ended December 31, 2008:
    
 
Low Range
High Range
Estimated diluted net income per share
$0.63
$0.69
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
  1.72
  1.72
Estimated diluted FFO per share
$2.35
$2.41


 
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 29, 2008, 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 2008 Financial Results call.  Alternatively, the call will be web cast by CCBN and can be accessed at the company’s web site at http://www.tangeroutlet.com/investorrelations/news.

A telephone replay of the call will be available from October 29, 2008 starting at 1:00 P.M. Eastern Time through 11:59 P.M., November 7, 2008, by dialing 1-800-642-1687 (conference ID # 65292786).  Additionally, an online archive of the broadcast will also be available through November 7, 2008.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc.(NYSE:SKT), a fully integrated, self-administered and self-managed publicly traded REIT, presently owns 30 outlet centers in 21 states coast to coast, totaling approximately 8.8 million square feet of gross leasable area.  Tanger also manages for a fee and owns an interest in three outlet centers containing approximately 1.3 million 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 September 30, 2008. 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, funds from operations, the development and opening of new centers, and coverage of the current dividend 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, the company’s ability to lease its properties, the company’s 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, 2007.

 
 
 

TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
         
   
          Three months ended
  
            Nine months ended
   
          September 30,
  
         September 30,
   
             2008
  
              2007
  
            2008
  
             2007
REVENUES
                                  
 
Base rentals (a)
  
$
40,519
    
$
37,207
    
$
116,374
    
$
108,614
    
 
Percentage rentals
    
1,811
      
2,305
      
4,109
      
5,434
    
 
Expense reimbursements
    
18,277
      
16,719
      
51,447
      
47,496
    
 
Other income
    
2,166
      
2,155
      
5,124
      
5,243
    
   
Total revenues
    
62,773
      
58,386
      
177,054
      
166,787
    
EXPENSES
                                  
 
Property operating
    
20,678
      
19,158
      
57,422
      
53,893
    
 
General and administrative
    
6,217
      
4,916
      
17,165
      
14,096
    
 
Depreciation and amortization
    
15,320
      
14,941
      
45,593
      
48,870
    
   
Total expenses
    
42,215
      
39,015
      
120,180
      
116,859
    
Operating income
    
20,558
      
19,371
      
56,874
      
49,928
    
 
Interest expense (b)
    
9,147
      
10,087
      
28,191
      
30,215
    
   
Loss on settlement of US treasury rate locks
   
---
      
---
      
8,910
      
---
    
Income before equity in earnings of
                                  
 
unconsolidated joint ventures, minority
                                  
 
interest and discontinued operations
    
11,411
      
9,284
      
19,773
      
19,713
    
Equity in earnings of unconsolidated joint ventures
    
596
      
461
      
1,548
      
1,030
    
Minority interests in operating partnership
    
(1,729
)
    
(1,370
)
    
(2,794
)
    
(2,716
)
  
Income from continuing operations
    
10,278
      
8,375
      
18,527
      
18,027
    
Discontinued operations, net of minority interest (c)
    
---
      
22
      
---
      
76
    
Net income
    
10,278
      
8,397
      
18,527
      
18,103
    
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(4,219
)
    
(4,219
)
  
Net income available to common shareholders
  
$
8,872
    
$
6,991
    
$
14,308
    
$
13,884
    
                                   
Basic earnings per common share:
                                  
 
Income from continuing operations
  
$
.29
    
$
.23
    
$
.46
    
$
.45
    
 
Net income
  
$
.29
    
$
.23
    
$
.46
    
$
.45
    
                                   
Diluted earnings per common share:
                                  
 
Income from continuing operations
  
$
.28
    
$
.22
    
$
.45
    
$
.44
    
 
Net income
  
$
.28
    
$
.22
    
$
.45
    
$
.44
    
                                   
Funds from operations available to
                                  
 
common shareholders (FFO)
  
$
26,455
    
$
23,929
    
$
64,375
    
$
67,386
    
FFO per common share – diluted
  
$
.70
    
$
.64
    
$
1.70
    
$
1.80
    
                                   
Summary of discontinued operations (c)
                                  
 
Operating income from discontinued operations
  
$
---
    
$
26
    
$
---
    
$
91
    
 
Gain on sale of real estate
    
---
      
---
      
---
      
---
    
 
Income from discontinued operations
    
---
      
26
      
---
      
91
    
 
Minority interest in discontinued operations
    
---
      
(4
)
    
---
      
(15
)
  
Discontinued operations, net of minority interest
  
$
---
    
$
22
    
$
---
    
$
76
    
   
(a) Includes straight-line rent and market rent adjustments of $957 and $1,033 for the three months ended and $2,924 and $3,192 for the nine months ended September 30, 2008 and 2007, respectively.
  
(b) Includes prepayment premium of $406 for the nine months ended September 30, 2008 related to the repayment of our only remaining mortgage which had a principal balance of $170.7 million.
  
(c) In accordance with SFAS No. 144”Accounting for the Impairment or Disposal of Long Lived Assets,” the results of operations for properties disposed of or classified as held for sale during the above periods in which we have no significant continuing involvement have been reported above as discontinued operations for all periods presented.
  

 
 
 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
                         
   
        September 30,
  
         December 31,
  
   
        2008
  
         2007
  
ASSETS:
                  
Rental property
                  
 
Land
  
$
135,688
    
$
130,075
    
 
Buildings, improvements and fixtures
    
1,233,680
      
1,104,459
    
 
Construction in progress
    
16,377
      
52,603
    
     
1,385,745
      
1,287,137
    
 
Accumulated depreciation
    
(345,577
)
    
(312,638
)
  
   
Rental property, net
    
1,040,168
      
974,499
    
Cash and cash equivalents
    
3,753
      
2,412
    
Investments in unconsolidated joint ventures
    
12,145
      
10,695
    
Deferred charges, net
    
39,854
      
44,804
    
Other assets
    
28,811
      
27,870
    
             Total assets  
 $
1,124,731
    
 $
1,060,280
    
 
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY:
Liabilities
                  
Debt
                  
 
Senior, unsecured notes (net of discount of $701 and $759, respectively)
  
  $
  398,799
    
  $
  498,741
    
 
Unsecured term loan
    
235,000
      
---
    
 
Mortgages payable (including a debt premium of $0 and $1,046, respectively)
    
  ---
      
  173,724
    
 
Unsecured lines of credit
    
149,500
      
33,880
    
 
Total debt
    
783,299
      
706,345
    
Construction trade payables
    
22,840
      
23,813
    
Accounts payable and accrued expenses
    
46,573
      
47,185
    
              Total liabilities    
852,712
      
777,343
    
                   
Commitments
                  
Minority interest in operating partnership
    
31,678
      
33,733
    
                   
Shareholders’ equity
                  
Preferred shares, 7.5% Class C, liquidation preference $25 per
                  
 
share, 8,000,000 shares authorized, 3,000,000 shares issued
                  
 
and outstanding at September 30, 2008 and December 31, 2007
    
75,000
      
75,000
    
Common shares, $.01 par value, 150,000,000 shares authorized,
                  
 
31,664,401 and 31,329,241 shares issued and outstanding
                  
 
at September 30, 2008 and December 31, 2007, respectively
    
317
      
313
    
Paid in capital
    
357,698
      
351,817
    
Distributions in excess of earnings
    
(192,601
)
    
(171,625
)
  
Accumulated other comprehensive loss
    
(73
)
    
(6,301
)
  
                 Total shareholders’ equity
240,341
      
249,204
    
                       Total liabilities, minority interest and shareholders’                  
                           equity  
$
1,124,731
    
$
1,060,280
    
                   

 
 
 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(in thousands, except per share, state and center information)
(Unaudited)
         
   
             Three months ended
  
             Nine months ended
   
                 September 30,
  
                 September 30,
   
               2008
  
                2007
  
            2008
  
                   2007
FUNDS FROM OPERATIONS (a)
                                  
 
Net income
  
$
10,278
    
$
8,397
    
$
18,527
    
$
18,103
    
 
Adjusted for:
                                  
 
Minority interest in operating partnership
    
1,729
      
1,370
      
2,794
      
2,716
    
 
Minority interest, depreciation and amortization
                                  
 
attributable to discontinued operations
    
---
      
52
      
---
      
160
    
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – consolidated
    
15,219
      
14,865
      
45,335
      
48,641
    
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – unconsolidated joint ventures
    
635
      
651
      
1,938
      
1,985
    
 
Funds from operations (FFO)
    
27,861
      
25,335
      
68,594
      
71,605
    
 
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(4,219
)
    
(4,219
)
  
 
Funds from operations available to common
                                  
 
shareholders
  
$
26,455
    
$
23,929
    
$
64,375
    
$
67,386
    
 
Funds from operations available to common
                                  
 
shareholders per share - diluted
  
$
.70
    
$
.64
    
$
1.70
    
$
1.80
    
                                   
WEIGHTED AVERAGE SHARES
                                  
 
Basic weighted average common shares
    
31,129
      
30,847
      
31,059
      
30,805
    
 
Effect of exchangeable notes
    
487
      
235
      
487
      
235
    
 
Effect of outstanding options
    
123
      
188
      
149
      
217
    
 
Effect of unvested restricted share awards
    
132
      
130
      
138
      
144
    
 
Diluted weighted average common shares (for earnings
                                  
 
per share computations)
    
31,871
      
31,400
      
31,833
      
31,401
    
 
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)
    
37,938
      
37,467
      
37,900
      
37,468
    
                                   
OTHER INFORMATION
                                  
Gross leasable area open at end of period -
                                  
 
Wholly owned
    
8,823
      
8,363
      
8,823
      
8,363
    
 
Partially owned – unconsolidated
    
667
      
667
      
667
      
667
    
 
Managed
    
---
      
229
      
---
      
229
    
                                   
Outlet centers in operation -
                                  
 
Wholly owned
    
30
      
30
      
30
      
30
    
 
Partially owned – unconsolidated
    
2
      
2
      
2
      
2
    
 
Managed
    
---
      
2
      
---
      
2
    
                                   
States operated in at end of period (c)
    
21
      
21
      
21
      
21
    
Occupancy at end of period (c) (d)
    
96.7
%
    
97.3
%
    
96.7
%
    
97.3
%
  
                                   


 
 
 


(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.

(d)  
Excludes our wholly-owned, non-stabilized center in Washington, Pennsylvania for the 2008 periods and excludes our wholly-owned, non-stabilized center in Charleston, South Carolina for the 2007 periods.
EX-99.2 3 tfoc8k09302008ex99-2.htm EXHIBIT 99.2 SUPPLEMENTAL tfoc8k09302008ex99-2.htm

 

Tanger Factory Outlet Centers, Inc.


Supplemental Operating and Financial Data

September 30, 2008







 
 
 

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, 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.



 
 
 

Table of Contents


Section

Portfolio Data:

 
Geographic Diversification
      
4
 
Property Summary – Occupancy at End of Each Period Shown
      
5
 
Portfolio Occupancy at the End of Each Period
      
6
 
Major Tenants
      
7
 
Lease Expirations as of September 30, 2008
      
8
 
Leasing Activity
      
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
     



 
 
 

Geographic Diversification


As of September 30, 2008
 
State
 
# of Centers
 
GLA
 
% of GLA
South Carolina
3
1,171,826
13%
Georgia
3
826,643
9%
New York
1
729,315
8%
Pennsylvania
2
625,678
7%
Texas
2
619,806
7%
Delaware
1
568,869
7%
Alabama
1
557,185
6%
Michigan
2
436,751
5%
Tennessee
1
419,038
5%
Missouri
1
302,992
4%
Utah
1
300,891
4%
Connecticut
1
291,051
3%
Louisiana
1
282,403
3%
Iowa
1
277,230
3%
Oregon
1
270,280
3%
Illinois
1
256,514
3%
New Hampshire
1
245,563
3%
Florida
1
198,950
2%
North Carolina
2
186,413
2%
California
1
171,300
2%
Maine
2
84,313
1%
Total (1)
30
8,823,011
100%
 
 
 
 
(1)  
Excludes one 402,442 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.
 
 
 
Property Summary – Occupancy at End of Each Period Shown

Wholly-owned properties
 
 
Location
 
Total GLA
9/30/08 
%    
Occupied
9/30/08
%    
Occupied
6/30/08
%     
 Occupied
3/31/008
%      
Occupied
12/31/07
 %     
Occupied
9/30/07
Riverhead, NY
729,315
99%
99%
94%
100%
98%
Rehoboth, DE
568,869
100%
99%
97%
99%
98%
Foley, AL
557,185
94%
93%
94%
97%
99%
San Marcos, TX
442,006
99%
97%
96%
99%
99%
Myrtle Beach Hwy 501, SC
426,417
92%
96%
94%
94%
96%
Sevierville, TN
419,038
100%
100%
99%
100%
99%
Hilton Head, SC
393,094
88%
88%
87%
89%
87%
Washington, PA
370,526
86%
n/a
n/a
n/a
n/a
Charleston, SC
352,315
95%
95%
94%
95%
94%
Commerce II, GA
347,025
98%
98%
98%
100%
98%
Howell, MI
324,631
97%
97%
93%
100%
99%
Branson, MO
302,992
100%
98%
93%
100%
100%
Park City, UT
300,891
98%
92%
93%
100%
100%
Locust Grove, GA
293,868
100%
100%
96%
99%
100%
Westbrook, CT
291,051
99%
99%
98%
100%
99%
Gonzales, LA
282,403
100%
100%
99%
100%
100%
Williamsburg, IA
277,230
100%
99%
99%
99%
99%
Lincoln City, OR
270,280
100%
99%
98%
100%
99%
Tuscola, IL
256,514
80%
82%
84%
80%
77%
Lancaster, PA
255,152
100%
98%
100%
100%
100%
Tilton, NH
245,563
100%
100%
100%
100%
100%
Fort Myers, FL
198,950
92%
93%
98%
94%
96%
Commerce I, GA
185,750
72%
72%
76%
91%
90%
Terrell, TX
177,800
100%
100%
100%
100%
100%
Barstow, CA
171,300
100%
99%
100%
97%
100%
West Branch, MI
112,120
100%
100%
100%
100%
100%
Blowing Rock, NC
104,235
100%
100%
98%
100%
98%
Nags Head, NC
82,178
100%
100%
100%
100%
100%
Kittery I, ME
59,694
100%
100%
100%
100%
95%
Kittery II, ME
24,619
100%
100%
94%
94%
94%
Boaz, AL
n/a
n/a
n/a
n/a
n/a
98%
Total
8,823,011
   97% (2)
   96%
   95%
   98%
   97% (1)

Unconsolidated joint ventures
Myrtle Beach Hwy 17, SC
402,442
100%
99%
100%
100%
99%
Wisconsin Dells, WI
264,929
99%
100%
100%
100%
100%




(1)  
Excludes the occupancy rate at our Charleston, South Carolina center which opened during the third quarter of 2006 and had not yet stabilized.
(2)  
Excludes the occupancy rate at our Washington, Pennsylvania center which opened during the third quarter of 2008 and had not yet stabilized.

 
 
 

Portfolio Occupancy at the End of Each Period (1)


09/08(3)       06/08      03/08    12/07      09/07(2)   06/07(2)     03/07(2)  12/06(2)   09/06(2)
  97%    96%      95%     98%    97%    97%    95%    98%      96%







 



(1)  
Excludes one 402,442 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.

(2)  
Excludes the occupancy rate at our Charleston, South Carolina center which opened during the third quarter of 2006 and had not yet stabilized.

(3)  
Excludes the occupancy rate at our Washington, Pennsylvania center which opened during the third quarter of 2008 and had not yet stabilized.

Major Tenants (1)


Ten Largest Tenants As of September 30, 2008
 
Tenant
# of   
Stores
 
GLA
% of     
Total GLA
The Gap, Inc.
68
731,308
8.3%
Phillips-Van Heusen
97
451,111
5.1%
Nike
25
290,105
3.3%
Adidas
33
283,732
3.2%
VF Factory Outlet
31
278,286
3.2%
Liz Claiborne
33
254,210
2.9%
Dress Barn, Inc.
38
251,222
2.8%
Carter’s
46
221,951
2.5%
Jones Retail Corporation
49
194,994
2.2%
Polo Ralph Lauren
22
188,728
2.2%
Total of All Listed Above
442
3,145,647
35.7%





 

 

(1)  
Excludes one 402,442 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.

 
Lease Expirations as of September 30, 2008

 

Percentage of Total Gross Leasable Area (1)


 
 
2008       2009       2010         2011     2012         2013     2014      2015        2016    2017    2018+
1.00%    15.00%     16.00%    18.00%    16.00%     17.00%     4.00%        2.00%     2.00%     3.00%      6.00%



Percentage of Total Annualized Base Rent (1)

 
2008       2009       2010         2011     2012         2013     2014      2015        2016    2017    2018+
1.00%    13.00%     16.00%    16.00%    16.00%     18.00%     4.00%        2.00%     2.00%     4.00%      8.00%






(1)
Excludes one 402,442 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.
 
 
 
Leasing Activity (1)
 
 
 
03/31/08
 
 
06/30/08
 
 
09/30/08
 
 
12/31/08
 
Year to
Date  
 
                   Prior
                Year to
                   Date
Re-tenanted Space:
            
    Number of leases
73
29
17
  
119
166
    Gross leasable area
279,014
124,254
77,426
  
480,694
598,717
    New initial base rent per square foot
$23.03
$26.20
$26.11
  
$24.35
$21.42
    Prior expiring base rent per square foot
$17.67
$19.13
$19.37
  
$18.32
$16.65
    Percent increase
30.4%
36.9%
34.8%
  
32.9%
28.7%
             
    New straight line base rent per square foot
$24.41
$27.62
$28.04
  
$25.83
$22.46
    Prior straight line base rent per square foot
$17.23
$18.90
$19.08
  
$17.96
$16.33
    Percent increase
41.7%
46.1%
47.0%
  
43.8%
37.6%
             
Renewed Space:
            
    Number of leases
166
50
16
  
232
248
    Gross leasable area
800,197
184,007
55,642
  
1,039,846
1,126,879
    New initial base rent per square foot
$19.37
$20.05
$21.66
  
$19.62
$17.76
    Prior expiring base rent per square foot
$16.94
$17.50
$20.56
  
$17.24
$16.11
    Percent increase
14.3%
14.6%
5.4%
  
13.8%
10.2%
             
   New straight line base rent per square foot
$20.04
$20.57
$21.98
  
$20.24
$18.03
    Prior straight line base rent per square foot
$16.99
$17.17
$20.30
  
$17.20
$15.93
    Percent increase
17.9%
19.8%
8.3%
  
17.6%
13.2%
             
Total Re-tenanted and Renewed Space:
            
    Number of leases
239
79
33
  
351
414
    Gross leasable area
1,079,211
308,261
133,068
  
1,520,540
1,725,596
    New initial base rent per square foot
$20.32
$22.53
$24.25
  
$21.11
$19.03
    Prior expiring base rent per square foot
$17.13
$18.16
$19.87
  
$17.58
$16.30
    Percent increase
18.6%
24.1%
22.1%
  
20.1%
16.8%
             
    New straight line base rent per square foot
$21.17
$23.41
$25.51
  
$22.00
$19.57
    Prior straight line base rent per square foot
$17.05
$17.87
$19.59
  
$17.44
$16.07
    Percent increase
24.1%
31.0%
30.2%
  
26.2%
21.8%

(1)  
Excludes one 402,442 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.
 
 

Consolidated  Balance Sheets (dollars in thousands)
 
 
9/30/08
6/30/08
3/31/08
12/31/07
9/30/07
Assets
          
   Rental property
          
       Land
$135,688
$130,077
$130,077
$130,075
$129,921
       Buildings
1,233,680
1,130,536
1,127,956
1,104,459
1,074,310
       Construction in progress
16,377
90,430
53,036
52,603
61,364
   Total rental property
1,385,745
1,351,043
1,311,069
1,287,137
1,265,595
       Accumulated depreciation
(345,577)
(333,995)
(323,520)
(312,638)
(302,411)
   Total rental property – net
1,040,168
1,017,048
987,549
974,499
963,184
   Cash & cash equivalents
3,753
1,088
2,302
2,412
2,434
   Assets held for sale
--
--
--
--
2,052
   Investments in unconsolidated jointventures
12,145
11,667
9,193
10,695
11,908
   Deferred charges – net
39,854
41,821
42,302
44,804
47,306
   Other assets
28,811
28,097
31,698
27,870
26,563
Total assets
$1,124,731
$1,099,721
$1,073,044
$1,060,280
$1,053,447
Liabilities, minority interest & shareholders’ equity
 
 
 
  Liabilities
 
       
    Debt
        
 
       Senior, unsecured notes, net of discount
$398,799
$398,779
$398,760
$498,741
$498,722
       Unsecured term loan
235,000
235,000
---
---
---
       Mortgages payable, including premium
---
---
172,121
173,724
175,312
       Unsecured lines of credit
      149,500
      128,300
      156,900
      33,880
      23,300
    Total debt
783,299
762,079
727,781
706,345
697,334
    Construction trade payables
22,840
28,393
23,780
23,813
27,943
    Accounts payable & accruals
46,573
34,831
54,203
47,185
35,237
  Total liabilities
852,712
825,303
805,764
777,343
760,514
  Minority interest in operating partnership
       31,678
       32,102
       31,019
       33,733
       35,366
  Shareholders’ equity
 
   
 
 
    Preferred shares
75,000
75,000
75,000
75,000
75,000
    Common shares
317
316
315
313
313
    Paid in capital
357,698
355,733
353,237
351,817
350,701
    Distributions in excess of net income
(192,601)
(189,458)
(177,353)
(171,625)
(169,419)
    Accum. other comprehensive income (loss)
(73)
725
(14,938)
(6,301)
972
  Total shareholders’ equity
240,341
242,316
236,261
249,204
257,567
Total liabilities, minority interest & shareholders’ equity
$1,124,731
$1,099,721
$1,073,044
$1,060,280
$1,053,447
 

Consolidated Statements of Operations (dollars and shares in thousands)

   
Three Months Ended
    
YTD
  
      09/08       06/08       03/08       12/07       09/07       09/08       09/07  
Revenues
                                                        
   Base rentals
   $ 40,519     $ 38,623     $ 37,232     $ 38,210     $ 37,207     $ 116,374     $ 108,614  
   Percentage rentals
     1,811       1,120       1,178       3,323       2,305       4,109       5,434  
   Expense reimbursements
     18,277       15,692       17,478       18,482       16,719       51,447       47,496  
   Other income
     2,166       1,570       1,388       1,963       2,155       5,124       5,243  
      Total revenues
     62,773       57,005       57,276       61,978       58,386       177,054       166,787  
Expenses
                                                        
   Property operating
     20,678       17,525       19,219       20,490       19,158       57,422       53,893  
   General & administrative
     6,217       5,677       5,271       4,911       4,916       17,165       14,096  
   Depreciation & amortization
     15,320       14,690       15,583       14,940       14,941       45,593       48,870  
      Total expenses
     42,215       37,892       40,073       40,341       39,015       120,180       116,859  
Operating income
     20,558       19,113       17,203       21,637       19,371       56,874       49,928  
   Interest expense
     9,147       9,496       9,548       9,851       10,087       28,191       30,215  
   Loss on settlement of US treasury rate locks
     ---       8,910       ---       ---       ---       8,910       ---  
Income before equity in earnings of
   unconsolidated joint ventures, minority
   interest and discontinued operations
        11,411          707          7,655          11,786          9,284          19,773          19,713  
Equity in earnings of unconsolidated
   joint ventures
      596        558        394        443        461        1,548        1,030  
Minority interest in operating partnership
     (1,729 )     23       (1,088 )     (1,778 )     (1,370 )     (2,794 )     (2,716 )
Income from continuing operations
     10,278       1,288       6,961       10,451       8,375       18,527       18,027  
Discontinued operations (1)
     ---       ---       ---       22       22       ---       76  
Net income
     10,278       1,288       6,961       10,473       8,397       18,527       18,103  
Less applicable preferred share dividends
     (1,406 )     (1,407 )     (1,406 )     (1,406 )     (1,406 )     (4,219 )     (4,219 )
Net income (loss) available to common
   shareholders
   $ 8,872     $ (119 )   $ 5,555     $ 9,067     $ 6,991     $ 14,308     $ 13,884  
Basic earnings per common share:
                                                        
   Income (loss) from continuing operations
   $ .29     $ ---     $ .18     $ .29     $ .23     $ .46     $ .45  
   Net income (loss)
   $ .29     $ ---     $ .18     $ .29     $ .23     $ .46     $ .45  
Diluted earnings per common share:
                                                        
   Income (loss) from continuing operations
   $ .28     $ ---     $ .18     $ .29     $ .22     $ .45     $ .44  
   Net income (loss)
   $ .28     $ ---     $ .18     $ .29     $ .22     $ .45     $ .44  
Weighted average common shares:
                                                        
   Basic
     31,129       31,068       30,979       30,867       30,847       31,059       30,805  
   Diluted
     31,871       31,548       31,336       31,725       31,400       31,833       31,401  
 

(1)  
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.

 
 
 

FFO and FAD Analysis (dollars and shares in thousands)
   
Three Months Ended
    
YTD
  
      09/08       06/08       03/08       12/07       09/07       09/08       09/07  
Funds from operations:
                                                        
   Net income
   $ 10,278     $ 1,288     $ 6,961     $ 10,473     $ 8,397     $ 18,527     $ 18,103  
   Adjusted for -
                                                        
      Minority interest in operating
        partnership
      1,729       (23 )      1,088        1,778        1,370        2,794        2,716  
      Minority interest, depreciation
        and amortization in
        discontinued operations
        --          --          --          5          52          --          160  
      Depreciation and amortization
        uniquely significant to real estate –
       wholly owned
        15,219          14,608          15,508          14,865          14,865          45,335          48,641  
      Depreciation and amortization
        uniquely significant to real estate –
        joint ventures
        635          651          652          626          651          1,938          1,985  
      (Gain) on sale of real estate
     --       --       --       (6 )     --       --       --  
      Preferred share dividends
     (1,406 )     (1,407 )     (1,406 )     (1,406 )     (1,406 )     (4,219 )     (4,219 )
Funds from operations
   $ 26,455     $ 15,117     $ 22,803     $ 26,335     $ 23,929     $ 64,375     $ 67,386  
                                                         
Funds from operations per share
   $ .70     $ .40     $ .61     $ .70     $ .64     $ 1.70     $ 1.80  
Funds available for distribution:
                                                        
   Funds from operations
   $ 26,455     $ 15,117     $ 22,803     $ 26,335     $ 23,929     $ 64,375     $ 67,386  
   Adjusted For -
                                                        
      Corporate depreciation
          excluded above
      101        82        75        75        76        258        229  
      Amortization of finance costs
     462       371       379       430       473       1,212       1,308  
      Loss on termination of US treasury
           lock derivatives
     --       8,910       --       --       --       8,910       --  
      Amortization of share compensation
     1,404       1,396       1,224       1,103       1,067       4,024       2,956  
      Straight line rent adjustment
     (822 )     (1,085 )     (789 )     (562 )     (753 )     (2,696 )     (2,306 )
      Market rent adjustment
     (135 )     (198 )     105       (270 )     (277 )     (228 )     (877 )
      Market rate interest adjustment
     --       (438 )     (608 )     (609 )     (605 )     (1,046 )     (1,787 )
      2nd generation tenant allowances
     (3,088 )     (2,701 )     (4,177 )     (4,247 )     (3,268 )     (9,966 )     (14,629 )
      Capital improvements
     (12,062 )     (9,500 )     (2,549 )     (3,076 )     (579 )     (24,111 )     (4,647 )
Funds available for distribution
   $ 12,315     $ 11,954     $ 16,463     $ 19,179     $ 20,063     $ 40,732     $ 47,633  
Funds available for distribution
   per share
   $ .32     $ .32     $ .44     $ .51     $ .54     $ 1.07     $ 1.27  
Dividends paid per share
   $ .38     $ .38     $ .36     $ .36     $ .36     $ 1.12     $ 1.06  
                                                         
FFO payout ratio
     54 %     95 %     59 %     51 %     56 %     100 %     59 %
FAD payout ratio
     119 %     119 %     82 %     71 %     67 %     104 %     83 %
Diluted weighted average common shs.
     37,938       37,615       37,403       37,792       37,467       37,900       37,468  


 
 
 

Unconsolidated Joint Venture Information – All
Summary Balance Sheets (dollars in thousands)
 
 
 
9/30/08
 
 
6/30/08
 
 
3/31/08
 
 
12/31/07
 
 
9/30/07
  
Tanger’s 
Share as of 
9/30/08   
Assets
              
   Investment properties at cost – net
$72,118
$73,033
$70,541
$71,022
$72,200
  
$35,486
   Construction in progress
226,031
181,246
134,756
103,568
81,638
  
75,344
   Cash and cash equivalents
4,104
3,896
2,708
2,282
4,109
  
1,862
   Deferred charges – net
6,041
6,184
2,157
2,092
2,746
  
$2,217
   Other assets
7,853
7,894
8,613
8,425
9,305
  
3,087
Total assets
$316,147
$272,253
$218,775
$187,389
$169,998
  
$117,996
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$259,789
$215,028
$173,249
$148,321
$128,886
  
$96,771
    Construction trade payables
26,750
28,129
20,736
13,052
14,128
  
9,066
    Accounts payable & other liabilities
6,845
7,117
9,281
6,377
3,915
  
2,700
Total liabilities
293,384
250,274
203,266
167,750
146,929
  
108,537
Owners’ equity
22,763
21,979
15,509
19,639
23,069
  
9,459
Total liabilities & owners’ equity
$316,147
$272,253
$218,775
$187,389
$169,998
  
$117,996

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
09/08
06/08
03/08
12/07
09/07
09/08
09/07
Revenues
$5,582
$5,031
$4,757
$5,049
$4,949
$15,370
$14,365
Expenses
              
   Property operating
2,128
1,720
1,802
1,891
1,643
5,650
5,003
   General & administrative
90
79
19
29
60
188
219
   Depreciation & amortization
1,302
1,344
1,345
1,354
1,353
3,991
4,119
     Total expenses
3,520
3,143
3,166
3,274
3,056
9,829
9,341
Operating income
2,062
1,888
1,591
1,775
1,893
5,541
5,024
   Interest expense
932
820
840
987
1,025
2,592
3,142
Net income
$1,130
$1,068
$751
$788
$868
$2,949
$1,882
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$1,692
 
 
$1,617
 
 
$1,466
 
 
$1,563
 
 
$1,625
 
 
$4,775
 
 
$4,586
       Net income
$  596
$  558
$  394
$  443
$  461
$1,548
$1,030
       Depreciation (real estate related)
$  635
$  651
$  652
$  626
$  651
$1,938
$1,985

 
 
 

Unconsolidated Joint Venture Information – Myrtle Beach Hwy 17
Summary Balance Sheets (dollars in thousands)
 
 
 
9/30/08
 
 
6/30/08
 
 
3/31/08
 
 
12/31/07
 
 
9/30/07
  
Tanger’s   
Share as of
9/30/08  
Assets
              
   Investment properties at cost – net
$34,249
$34,644
$34,985
$34,909
$35,541
  
$17,125
   Cash and cash equivalents
1,753
1,369
1,036
1,265
1,501
  
877
   Deferred charges – net
644
644
724
799
896
  
322
   Other assets
2,232
2,335
2,264
2,229
2,243
  
1,116
Total assets
$38,878
$38,992
$39,009
$39,202
$40,181
  
$19,440
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$35,800
$35,800
$35,800
$35,800
$35,800
  
$17,900
    Construction trade payables
891
944
732
277
426
  
446
    Accounts payable & other liabilities
1,777
1,626
2,272
1,491
841
  
889
Total liabilities
38,468
38,370
38,804
37,568
37,067
  
19,235
Owners’ equity
410
622
205
1,634
3,114
  
205
Total liabilities & owners’ equity
$38,878
$38,992
$39,009
$39,202
$40,181
  
$19,440

Summary Statements of Operations (dollars in thousands)

 
             Three Months Ended
          YTD
 
09/08
06/08
03/08
12/07
09/07
09/08
09/07
Revenues
$3,229
$3,194
$2,888
$3,033
$3,208
$9,311
$8,972
Expenses
              
   Property operating
1,122
1,101
1,090
1,135
1,174
3,313
3,297
   General & administrative
4
27
7
2
3
38
31
   Depreciation & amortization
672
733
739
751
753
2,144
2,377
     Total expenses
1,798
1,861
1,836
1,888
1,930
5,495
5,705
Operating income
1,431
1,333
1,052
1,145
1,278
3,816
3,267
   Interest expense
636
543
501
559
566
1,680
1,672
Net income
$795
$790
$551
$586
$712
$2,136
$1,595
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$1,051
 
 
$1,033
 
 
$896
 
 
$948
 
 
$1,014
 
 
$2,980
 
 
$2,821
       Net income
$  400
$  406
$285
$334
$  371
$1,091
$  841
       Depreciation (real estate related)
$  333
$  356
$360
$335
$  361
$1,049
$1,146

 
 
 

Unconsolidated Joint Venture Information – Wisconsin Dells
Summary Balance Sheets (dollars in thousands)
 
 
 
09/30/08
 
 
06/30/08
 
 
3/31/08
 
 
12/31/07
 
 
09/30/07
  
Tanger’s  
Share as of
09/30/08  
Assets
              
   Investment properties at cost - net
$34,426
$34,965
$35,556
$36,113
$36,659
  
$17,213
   Cash and cash equivalents
1,210
676
277
525
396
  
605
   Deferred charges – net
575
640
706
771
836
  
288
   Other assets
582
731
860
792
506
  
291
Total assets
$36,793
$37,012
$37,399
$38,201
$38,397
  
$18,397
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$25,250
$25,250
$25,250
$25,250
$25,250
  
$12,625
    Construction trade payables
--
--
158
186
206
  
--
    Accounts payable & other liabilities
725
727
591
874
517
  
363
Total liabilities
25,975
25,977
25,999
26,310
25,973
  
12,988
Owners’ equity
10,818
11,035
11,400
11,891
12,424
  
5,409
Total liabilities & owners’ equity
$36,793
$37,012
$37,399
$38,201
$38,397
  
$18,397

Summary Statements of Operations (dollars in thousands)

 
                         Three Months Ended
                    YTD
 
09/08
06/08
03/08
12/07
09/07
09/08
09/07
Revenues
$1,903
$1,795
$1,848
$1,977
$1,704
$5,546
$5,337
Expenses
              
   Property operating
582
615
712
756
469
1,909
1,706
   General & administrative
2
6
3
3
5
11
41
   Depreciation & amortization
610
607
606
603
600
1,823
1,742
     Total expenses
1,194
1,228
1,321
1,362
1,074
3,743
3,489
Operating income
709
567
527
615
630
1,803
1,848
   Interest expense
266
271
339
428
459
876
1,470
Net income
$443
$296
$188
$187
$171
$927
$378
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$659
 
 
$587
 
 
$567
 
 
$609
 
 
$614
 
 
$1,813
 
 
$1,795
       Net income
$232
$158
$105
$105
$95
$495
$220
       Depreciation (real estate related)
      $295
      $294
      $292
      $291
      $290
    $881
      $840

 
 
 

Unconsolidated Joint Venture Information – Deer Park
Summary Balance Sheets (dollars in thousands)
 
 
 
09/30/08
 
 
06/30/08
 
 
03/31/08
 
 
12/31/07
 
 
09/30/07
  
Tanger’s Share
as of        
09/30/08      
Assets
              
   Investment properties at cost - net
$   3,443
$   3,424
--
--
--
  
$  1,148
   Construction in progress
226,031
181,246
$134,756
$103,568
$81,638
  
75,344
   Cash and cash equivalents
1,141
1,851
1,395
492
2,212
  
380
   Deferred charges – net
4,822
4,900
727
522
1,014
  
1,607
   Other assets
5,039
4,828
5,489
5,404
6,556
  
1,680
Total assets
$240,476
$196,249
$142,367
$109,986
$91,420
  
 $80,159
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$198,739
$153,978
$112,199
$87,271
$67,836
  
$66,246
    Construction trade payables
25,859
27,185
19,846
12,589
13,496
  
8,620
    Accounts payable & other liabilities
4,343
4,764
6,418
4,012
2,557
  
1,448
Total liabilities
228,941
185,927
138,463
103,872
83,889
  
76,314
Owners’ equity
11,535
10,322
3,904
6,114
7,531
  
3,845
Total liabilities & owners’ equity
$240,476
$196,249
$142,367
$109,986
$91,420
  
$80,159

Summary Statements of Operations (dollars in thousands)

 
                          Three Months Ended
            YTD
 
09/08
06/08
03/08
12/07
09/07
09/08
09/07
Revenues
$450
$42
$21
$39
$37
$513
$  56
Expenses
              
   Property operating
424
4
--
--
--
428
--
   General & administrative
84
46
9
24
52
139
147
   Depreciation & amortization
20
4
--
--
--
24
--
     Total expenses
528
54
9
24
52
591
147
Operating income
(78)
(12)
12
15
(15)
(78)
(91)
   Interest expense
30
6
--
--
--
36
--
Net income (loss)
$(108)
$(18)
$12
$15
$(15)
$(114)
$(91)
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$(18)
 
 
$ (2)
 
 
$ 4
 
 
$ 5
 
 
$ (5)
 
 
$  (18)
 
 
$(30)
       Net income (loss)
$(36)
$ (6)
$ 4
$ 5
$ (5)
$  (38)
$(30)
       Depreciation (real estate related)
       $    7
       $    1
          $--
        $ --
       $   --
$      8
       $    --

 
 
 

Debt Outstanding Summary (dollars in thousands)
 

      As of September 30, 2008
 
Principal
Balance 
Interest
Rate
Maturity
Date
       
Unsecured debt
      
   Unsecured term loan credit facility (1)
$235,000
Libor + 1.60%
6/10/11
   Unsecured credit facilities
149,500
Libor + 0.75%
06/30/11
   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
(701)
    
Total debt
$783,299
    
Senior Unsecured Notes Financial Covenants (2)

As of September 30, 2008
 
Required
Actual
Compliance
Total Consolidated Debt to Adjusted Total Assets
60%
  53%
Yes
Total Secured Debt to Adjusted Total Assets
40%
  ---%
Yes
Total Unencumbered Assets to Unsecured Debt
135%
189%
Yes
Consolidated Income Available for Debt Service to      
Annual Debt Service Charge
 
2.00
 
3.76
 
Yes

(1)  
In July 2008, we entered into an interest rate swap agreement with for a notional amount of $118.0 million.  The purpose of the swap was to fix the interest rate on a portion of the $235.0 million outstanding under the term loan facility completed in June 2008.  The swap fixed the one month LIBOR rate at 3.605%.  This swap combined with the current spread of 160 basis points on the term loan facility fixes our interest rate on $118.0 million of variable rate debt at 5.205% until April 1, 2011.  In September 2008, we entered into an additional interest rate swap agreement for a notional amount of $117.0 million.  The purpose of the swap was to fix the interest rate on the remaining portion of the $235.0 million outstanding under the term loan facility completed in June 2008.  The swap fixed the one month LIBOR rate at 3.700%.  This swap combined with the current spread of 160 basis points on the term loan facility fixes our interest rate on $117.0 million of variable rate debt at 5.300% until April 1, 2011.

(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.

 
 
 

Future Scheduled Principal Payments (dollars in thousands)

As of September 30, 2008
 
 
Year
Scheduled  
Amortization
Payments  
 
Balloon  
Payments
Total    
Scheduled
Payments
2008
$  --
$          --
$          --
2009
--
--
--
2010
--
--
--
2011
--
384,500
384,500
2012
--
--
--
2013
--
--
--
2014
--
--
--
2015
--
250,000
250,000
2016
--
--
--
2017 & thereafter
--
(1) 149,500
149,500
 
$--
$784,000
$784,000
   Net Discount on Debt
  
(701)
     
$783,299



 
(1) 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.




 

 
 
 

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) 292-6825
Fax:      (336) 297-0931
e-mail:   tangermail@tangeroutlet.com
Mail:     Tanger Factory Outlet Centers, Inc.
              3200 Northline Avenue
              Suite 360
              Greensboro, NC  27408



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