-----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, ExUeFpoR3Sl4nqvLMLt/Azyk9xBzljX8ZBxPJs+5pMvyhlQwRQfYyYoqv3eXEtuj R66Gujt+dScQCLdATowD4A== 0000899715-09-000162.txt : 20090728 0000899715-09-000162.hdr.sgml : 20090728 20090728162500 ACCESSION NUMBER: 0000899715-09-000162 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090728 DATE AS OF CHANGE: 20090728 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: 0101 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11986 FILM NUMBER: 09967548 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 tfoc8k07282009.htm TFOC 8-K tfoc8k07282009.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):  July 28, 2009


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 July 28, 2009, 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 June 30, 2009.  A copy of the Company’s press release is hereby 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 July 28, 2009, the Company made publicly available certain supplemental operating and financial information for the quarter ended June 30, 2009.  This supplemental operating and financial information is hereby 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 June 30, 2009.

 
Exhibit 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended June 30, 2009.


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:  July 28, 2009

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 June 30, 2009.

  99.2 
Supplemental operating and financial information of the Company as of and for the quarter ended June 30, 2009.

 EX-99.1 2 tfoc8k07282009ex99-1.htm EXHIBIT 99.1 tfoc8k07282009ex99-1.htm

Tanger Factory Outlet Centers, Inc.

News Release

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

TANGER REPORTS SECOND QUARTER 2009 RESULTS
Adjusted Funds From Operations Increase 11.5%

Greensboro, NC, July 28, 2009, 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 June 30, 2009 of $32.5 million, or $0.80 per share, as compared to FFO of $14.3 million, or $0.38 per share, for the three months ended June 30, 2008.  For the six months ended June 30, 2009, FFO was $57.2 million, or $1.47 per share, as compared to FFO of $36.2 million, or $0.97 per share, for the six months ended June 30, 2008.  

FFO for the three and six months ended June 30, 2009 included a $10.5 million gain on the early extinguishment of debt as well as a $5.2 million impairment charge associated with the company’s Commerce I property located in Commerce, Georgia.  FFO for the three and six months ended June 30, 2008 was negatively impacted by an $8.9 million charge relating to the settlement of $200 million in 10 year US Treasury locks.  Excluding these charges, adjusted FFO for the second quarter and six months ended June 30, 2009 would have been $0.68 and $1.34 per share respectively, while FFO for the second quarter and six months ended June 30, 2008 would have been $0.61 and $1.20 per share respectively; representing an increase of 11.5% for the three months ended June 30, 2009 and an increase of 11.7% for the six months ended June 30, 2009.  

For the three months ended June 30, 2009, the company reported net income available to common shareholders of $0.30 per share, compared to a net loss available to common shareholders of $0.03 per share for the three months ended June 30, 2008.  Net income available to common shareholders for the six months ended June 30, 2009 was $1.19 per share, as compared to net income available to common shareholders of $0.13 per share for the six months ended June 30, 2008.  Net income available to common shareholders for the three months and six months ended June 30, 2009 and June 30, 2008 was also impacted by the 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.

Second Quarter Highlights

 
·  
Successfully completed exchange offer related to 3.75% Exchangeable Senior Notes, which reduced outstanding debt by $142.3 million, in exchange for approximately 4.9 million common shares
 
·  
32.8% debt-to-total market capitalization ratio, compared to 34.8% last year
 
·  
3.98 times interest coverage ratio for the three months ended June 30, 2009 compared to 3.33 times last year
 
·  
11.6% average increase in base rental rates on 1,032,000 square feet of signed renewals during the first six months of 2009, compared to 18.3% year to date in 2008
 
 
 
 
·  
47.1% average increase in base rental rates on 224,000 square feet of re-leased space during the first six months of 2009, compared to 43.1% year to date in 2008
 
·  
1.8% increase in same center net operating income, 2.1% increase year to date
 
·  
94.7% occupancy rate for wholly-owned properties, up 1.2% from March 31, 2009
 
·  
$335 per square foot in reported same-space tenant sales for the rolling twelve months ended June 30, 2009
 

Steven B. Tanger, President and Chief Executive Officer, commented, “We are pleased with our operating results for the second quarter of 2009.  Overall, we have remained on plan during these difficult economic times.  Our adjusted funds from operations per share increased 11.5%, while same center net operating income increased almost 2% during the second quarter and year to date”.

Portfolio Operating Results

During the first six months of 2009, Tanger executed 285 leases, totaling 1,256,000 square feet within its wholly-owned properties.  Lease renewals during the first six months of 2009 accounted for 1,032,000 square feet, which represented approximately 69% of the square feet originally scheduled to expire during 2009, and generated an 11.6% increase in average base rental rates. Base rental increases on re-tenanted space during the first six months averaged 47.1% and accounted for the remaining 224,000 square feet.    

Same center net operating income increased 1.8% for the second quarter of 2009 compared to an increase of 3.9% during the second quarter of 2008 and increased 2.1% for the first six months of 2009 compared to 4.8% for the first six months of 2008.  Reported tenant comparable sales for our wholly owned properties for the rolling twelve months ended June 30, 2009 decreased 2.7% to $335 per square foot.  However, reported tenant comparable sales for the three months ended June 30, 2009 increased 1.8%.  Reported tenant comparable sales numbers exclude our centers in Foley, Alabama and on Highway 501 in Myrtle Beach, South Carolina, both of which underwent major renovations during last year.

Exchange Offer Completed

On May 11, 2009, Tanger announced the successful closing of the offer to exchange common shares of the company for any and all of the outstanding 3.75% Exchangeable Senior Notes of Tanger Properties Limited Partnership due 2026.  In the aggregate, the exchange offer resulted in the retirement of approximately $142.3 million principal amount of the notes and the issuance of approximately 4.9 million common shares of the company.  For each $1,000 principal amount of exchangeable notes validly tendered, note holders received 34.21 common shares, or $987.58, a 1.2% discount to par, based on Tanger’s May 7, 2009 closing share price.  This offer represented one of the most successful convertible debt for equity exchanges in recent market history based on its 95% success rate.

Balance Sheet Summary

As of June 30, 2009, Tanger had a total market capitalization of approximately $2.2 billion including $714.4 million of debt outstanding, equating to a 32.8% debt-to-total market capitalization ratio.  As of June 30, 2009, 73.5% of Tanger’s debt was at fixed interest rates and the company had $188.3 million outstanding on its $325.0 million in available unsecured lines of credit.  During the second quarter of 2009, Tanger continued to maintain a strong interest coverage ratio of 3.98 times, compared to 3.33 times during the second quarter of last year.  

 
 
2
 

2009 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 available to common shareholders for 2009 will be between $1.52 and $1.58 per share and its FFO available to common shareholders for 2009 will be between $2.79 and $2.85 per share.  The company’s earnings estimates 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 available to common shareholders per share:

For the twelve months ended December 31, 2009:
    
 
Low Range
High Range
Estimated diluted net income per share
$1.52
$1.58
Non-controlling interest, gain/loss on acquisition of real
   
 
estate, depreciation and amortization uniquely
    
 
significant to real estate including non-controlling
   
 
interest share and our share of joint ventures
 1.27
 1.27
Estimated diluted FFO per share
$2.79
$2.85

Second Quarter Conference Call

Tanger will host a conference call to discuss its second quarter results for analysts, investors and other interested parties on Wednesday, July 29, 2009, 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 Second Quarter 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 http://www.tangeroutlet.com/investorrelations/news/ under the News Releases section.

A telephone replay of the call will be available from July 29, 2009 starting at 1:00 P.M. Eastern Time through August 7, 2009, by dialing 1-800-642-1687 (conference ID # 17089763).  Additionally, an online archive of the broadcast will also be available through August 7, 2009.

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 and operates 31 outlet centers in 21 states coast to coast, totaling approximately 9.2 million square feet of gross leasable area.  Tanger also operates two outlet centers containing approximately 950,000 square feet.  Tanger is filing a Form 8-K with the Securities and Exchange Commission that furnishes a supplemental information package for the quarter ended June 30, 2009. For more information on Tanger Outlet Centers, visit the company’s 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 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 company’s ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, 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, 2008.

 
3
 

TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
         
   
Three months ended
  
Six months ended
   
June 30,
  
June 30,
   
        2009
  
        2008
  
       2009
  
    2008
   
       (unaudited)
  
        (unaudited)
  
      (unaudited)
  
    (unaudited)
  
REVENUES
                                  
 
Base rentals (a)
  
$
43,425
    
$
38,623
    
$
86,352
    
$
75,855
    
 
Percentage rentals
    
940
      
1,120
      
2,248
      
2,298
    
 
Expense reimbursements
    
18,374
      
15,692
      
37,593
      
33,170
    
 
Other income
    
1,928
      
1,570
      
3,632
      
2,958
    
   
Total revenues
    
64,667
      
57,005
      
129,825
      
114,281
    
                                   
EXPENSES
                                  
 
Property operating
    
20,794
      
17,525
      
42,542
      
36,744
    
 
General and administrative
    
5,820
      
5,677
      
11,755
      
10,948
    
 
Depreciation and amortization
    
19,652
      
14,690
      
40,049
      
30,273
    
 
Impairment charge (b)
    
5,200
      
---
      
5,200
      
---
    
   
Total expenses
    
51,466
      
37,892
      
99,546
      
77,965
    
Operating income
    
13,201
      
19,113
      
30,279
      
36,316
    
Interest expense (c)
    
(9,564
)
    
(10,143
)
    
(20,774
)
    
(20,342
)
  
Gain on early extinguishment of debt (d)
    
10,467
      
---
      
10,467
      
---
    
Gain on fair value measurement of previously held
                                 
 
interest in acquired joint venture (e)
    
---
      
---
      
31,497
      
---
    
Loss on settlement of US treasury rate locks
   
---
      
(8,910
)
    
---
      
(8,910
)
  
Income before equity in earnings (losses) of
                                 
 
unconsolidated joint ventures
   
14,104
      
60
      
51,469
      
7,064
    
Equity in earnings (losses)  of unconsolidated joint
                                  
 
ventures
    
(517
)
    
558
      
(1,414
)
    
952
    
Net income
   
13,587
      
618
      
50,055
      
8,016
    
Noncontrolling interest in Operating Partnership
    
(1,833
)
    
129
      
(7,531
)
    
(852
)
  
Net income attributable to shareholders of
                                 
 
Tanger Factory Outlet Centers, Inc.
  
$
11,754
    
$
747
    
$
42,524
    
$
7,164
    
Preferred share dividends
    
(1,407
)
    
(1,407
)
    
(2,813
)
    
(2,813
)
  
Allocation of earnings to participating securities
    
(179
)
    
(195
)
    
(616
)
    
(334
)
  
Net income (loss) available to common shareholders of
                                 
 
Tanger Factory Outlet Centers, Inc.
    
10,168
      
(855
)
    
39,095
      
4,017
    
                                   
Basic earnings per common share:
                                  
 
Income (loss) from continuing operations
  
$
.30
    
$
(.03
)
  
$
1.19
    
$
.13
    
 
Net income (loss)
  
$
.30
    
$
(.03
)
  
$
1.19
    
$
.13
    
                                   
Diluted earnings per common share:
                                  
 
Income (loss) from continuing operations
  
$
.30
    
$
(.03
)
  
$
1.19
    
$
.13
    
 
Net income (loss)
  
$
.30
    
$
(.03
)
  
$
1.19
    
$
.13
    
                                   
Funds from operations available to
                                  
 
common shareholders (FFO)
  
$
32,481
    
$
14,273
    
$
57,184
    
$
36,174
    
FFO per common share – diluted
  
$
.80
    
$
.38
    
$
1.47
    
$
.97
    
                                   
   
(a) Includes straight-line rent and market rent adjustments of $878 and $1,283 for the three months ended and $1,577 and $1,967 for the six months ended June 30, 2009 and 2008, respectively.
  
(b) Represents FAS 144 “Accounting for the Impairment or Disposal of Long Lived Assets” charge for impairment of our Commerce I, Georgia center of approximately $5.2 million.
  
(c) In accordance with FSP APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, the results of operations for all prior periods presented for which such instruments were outstanding have been restated.  Also, includes prepayment premium of $406 for the three and six months ended June 30, 2008 related to the repayment of a mortgage which had a principal balance of $170.7 million.
  
(d) Represents gain on early extinguishment of $142.3 million of exchangeable notes which were retired through an exchange offering for approximately 4.9 million common shares in May 2009.
 
(e) Represents FAS 141R “Business Combinations”, gain on fair value measurement of our previously held interest in the Myrtle Beach Hwy 17 joint venture upon acquisition on January 5, 2009.
  
   

 
4
 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
                         
   
     June 30,
  
     December 31,
  
   
     2009
  
     2008
  
   
     (Unaudited)
  
    (Unaudited)
  
ASSETS:
                  
 
Rental property
                  
   
Land
  
$
135,708
    
$
135,689
    
   
Buildings, improvements and fixtures
    
1,343,854
      
1,260,243
    
   
Construction in progress
    
---
      
3,823
    
     
1,479,562
      
1,399,755
    
   
Accumulated depreciation
    
(379,412
)
    
(359,301
)
  
   
Rental property, net
    
1,100,150
      
1,040,454
    
 
Cash and cash equivalents
    
5,150
      
4,977
    
 
Investments in unconsolidated joint ventures
    
9,808
      
9,496
    
 
Deferred charges, net
    
43,746
      
37,750
    
 
Other assets
    
31,771
      
29,248
    
 
Total assets
  
 $
1,190,625
    
 $
1,121,925
    
 
LIABILITIES AND EQUITY:
Liabilities
                  
 
Debt
                  
 
Senior, unsecured notes (net of discount of $975 and $9,137 respectively)
  
$
256,235
    
$
390,363
    
 
Mortgages payable (net of discount of $862 and $0, respectively)
    
34,938
      
---
    
 
Unsecured term loan
    
235,000
      
235,000
    
 
Unsecured lines of credit
    
188,250
      
161,500
    
 
Total debt
    
714,423
      
786,863
    
Construction trade payables
    
6,327
      
11,968
    
Accounts payable and accrued expenses
    
25,103
      
26,277
    
Other liabilities
    
32,152
      
30,914
    
 
Total liabilities
    
778,005
      
856,022
    
                   
Commitments
                  
                   
Equity
                  
Tanger Factory Outlet Centers, Inc. 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 June 30, 2009
                  
 
and December 31, 2008
    
75,000
      
75,000
    
 
Common shares, $.01 par value, 150,000,000 shares authorized,
                  
 
36,782,179 and 31,667,501 shares issued and outstanding
                  
 
at June 30, 2009 and December 31, 2008, respectively
    
368
      
317
    
 
Paid in capital
    
482,532
      
371,190
    
 
Distributions in excess of earnings
    
(186,202
)
    
(201,679
)
  
 
Accumulated other comprehensive loss
    
(6,879
)
    
(9,617
)
  
 
Equity attributable to shareholders of Tanger Factory Outlet Centers, Inc.
  
364,819
      
235,211
    
Equity attributable to noncontrolling interest in Operating Partnership
  
47,801
      
30,692
    
 
Total equity
  
412,620
      
265,903
    
 
Total liabilities and equity
  
$
1,190,625
    
$
1,121,925
    
                   

 
5
 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(in thousands, except per share, state and center information)
         
   
Three months ended
  
Six months ended
   
June 30,
  
June 30,
   
2009
  
2008
  
2009
  
2008
   
(unaudited)
  
(unaudited)
  
(unaudited)
  
(unaudited)
  
FUNDS FROM OPERATIONS (a)
                                  
 
Net income
 
$
13,587
    
$
618
    
$
50,055
    
$
8,016
    
 
Adjusted for:
                                  
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – consolidated
    
19,530
      
14,608
      
39,808
      
30,116
    
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – unconsolidated joint ventures
    
1,223
      
651
      
2,389
      
1,303
    
 
Gain on fair value measurement of previously held  
                                  
 
interest in acquired joint venture
    
---
      
---
      
(31,497
)
    
---
    
 
Funds from operations (FFO)
    
34,340
      
15,877
      
60,755
      
39,435
    
 
Preferred share dividends
    
(1,407
)
    
(1,407
)
    
(2,813
)
    
(2,813
)
  
 
Allocation of earnings to participating securities
    
(452
)
    
(197
)
    
(758
)
    
(448
)
  
 
Funds from operations available to common
                                 
 
shareholders
  
$
32,481
    
$
14,273
    
$
57,184
    
$
36,174
    
 
Funds from operations available to common
                                 
 
shareholders per share - diluted
  
$
.80
    
$
.38
    
$
1.47
    
$
.97
    
                                   
WEIGHTED AVERAGE SHARES
                                  
 
Basic weighted average common shares
    
34,249
      
31,068
      
32,767
      
31,024
    
 
Effect of exchangeable notes
    
---
      
223
      
---
      
223
    
 
Effect of outstanding options
    
78
      
155
      
80
      
162
    
 
Diluted weighted average common shares (for earnings
                                  
 
per share computations)
    
34,327
      
31,446
      
32,847
      
31,409
    
 
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)
    
40,394
      
37,513
      
38,914
      
37,476
    
                                   
OTHER INFORMATION
                                  
Gross leasable area open at end of period -
                                  
Wholly owned
    
9,241
      
8,453
      
9,241
      
8,453
    
Partially owned – unconsolidated
   
950
      
667
      
950
      
667
    
                                   
Outlet centers in operation -
                                 
Wholly owned
    
31
      
29
      
31
      
29
    
Partially owned – unconsolidated
    
2
      
2
      
2
      
2
    
                                   
States operated in at end of period (c)
   
21
      
21
      
21
      
21
    
Occupancy at end of period (c) (d)
    
94.7
%
    
96.2
%
    
94.7
%
    
96.2
%
  
                                   


 
6
 


(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 (noncontrolling interest in operating partnership) are not dilutive on earnings per share computed in accordance with generally accepted accounting principles.
 
(c) Excludes Wisconsin Dells, Wisconsin property for the 2009 and 2008 periods which is operated by us through 50% ownership joint venture.  Excludes Myrtle Beach, South Carolina Hwy 17 property for the 2008 period during which period it was operated by us through a 50% ownership joint venture.  We acquired the remaining 50% interest in January 2009.  Excludes Deer Park, New York property for the 2009 period which is operated by us through a 33.3% ownership joint venture.  The Deer Park property opened during October 2008.
 
(d) Excludes our wholly-owned, non-stabilized center in Washington, Pennsylvania for the 2009 period.
 
 
 
7
 EX-99.2 3 tfoc8k07282009ex99-2.htm EXHIBIT 99.2 tfoc8k07282009ex99-2.htm

 

Tanger Factory Outlet Centers, Inc.


Supplemental Operating and Financial Data

June 30, 2009







 
1
 

Notice





For a more detailed discussion of the factors that affect our operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and the Current Report on Form 8-K dated July 2, 2009 filed to show the effects of the retrospective application of certain accounting pronouncements that became effective January 1, 2009.


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
      
5
 
Portfolio Occupancy at the End of Each Period
      
6
 
Major Tenants
      
7
 
Lease Expirations as of June 30, 2009
      
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
      
16
 
Future Scheduled Principal Payments
      
17
 
Senior Unsecured Notes Financial Covenants
      
17
         
Investor Information
      
18

 


 
3
 

Geographic Diversification


As of June 30, 2009
 
State
 
# of Centers
 
GLA
 
% of GLA
South Carolina
4
1,569,268
17%
Georgia
3
850,130
9%
New York
1
729,315
8%
Pennsylvania
2
625,677
7%
Texas
2
619,806
7%
Delaware
1
568,868
6%
Alabama
1
557,185
6%
Michigan
2
436,751
5%
Tennessee
1
419,038
4%
Missouri
1
302,992
3%
Utah
1
298,379
3%
Connecticut
1
291,051
3%
Louisiana
1
282,403
3%
Iowa
1
277,230
3%
Oregon
1
270,280
3%
Illinois
1
256,469
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)
31
9,241,381
100%

 
(1)  
Excludes one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements.  Also, excludes one 655,598 square foot shopping center and one 29,253 square foot warehouse in Deer Park, NY of which Tanger owns a 33.3% interest through a joint venture arrangement.
 
 
4
 
Property Summary – Occupancy at End of Each Period Shown

Wholly-owned properties
 
 
Location
 
Total GLA
6/30/09
%
Occupied
6/30/09
%
 Occupied
3/31/09
%
Occupied
12/31/08
%
Occupied
9/30/008
%
Occupied
6/30/08
Riverhead, NY
729,315
98%
97%
98%
99%
99%
Rehoboth, DE
568,868
99%
97%
100%
100%
99%
Foley, AL
557,185
91%
91%
93%
94%
93%
San Marcos, TX
442,006
99%
97%
99%
99%
97%
Myrtle Beach Hwy 501, SC
426,417
88%
86%
92%
92%
96%
Sevierville, TN
419,038
100%
98%
100%
100%
100%
Myrtle Beach Hwy 17, SC (2)
402,442
99%
97%
100%
100%
99%
Hilton Head, SC
388,094
85%
85%
88%
88%
88%
Washington, PA
370,525
86%
82%
85%
86%
n/a
Charleston, SC
352,315
95%
91%
97%
95%
95%
Commerce II, GA
370,512
95%
93%
96%
98%
98%
Howell, MI
324,631
94%
94%
98%
97%
97%
Branson, MO
302,992
100%
98%
100%
100%
98%
Park City, UT
298,379
99%
99%
100%
98%
92%
Locust Grove, GA
293,868
97%
95%
99%
100%
100%
Westbrook, CT
291,051
91%
94%
99%
99%
99%
Gonzales, LA
282,403
100%
99%
100%
100%
100%
Williamsburg, IA
277,230
96%
91%
99%
100%
99%
Lincoln City, OR
270,280
99%
94%
98%
100%
99%
Tuscola, IL
256,469
79%
78%
83%
80%
82%
Lancaster, PA
255,152
97%
97%
100%
100%
98%
Tilton, NH
245,563
97%
96%
100%
100%
100%
Fort Myers, FL
198,950
92%
95%
96%
92%
93%
Commerce I, GA
185,750
63%
58%
74%
72%
72%
Terrell, TX
177,800
94%
94%
100%
100%
100%
Barstow, CA
171,300
100%
100%
100%
100%
99%
West Branch, MI
112,120
96%
96%
100%
100%
100%
Blowing Rock, NC
104,235
100%
100%
100%
100%
100%
Nags Head, NC
82,178
97%
97%
97%
100%
100%
Kittery I, ME
59,694
100%
100%
100%
100%
100%
Kittery II, ME
24,619
100%
100%
100%
100%
100%
Total
9,241,381
   95% (1)
   94% (1)
   97% (1) (2)
   97% (1) (2)
   96% (2)

Unconsolidated joint ventures
Deer Park, NY (3)
684,851
80%
78%
78%
n/a
n/a
Wisconsin Dells, WI
264,929
98%
97%
100%
99%
100%


(1)  
Excludes the occupancy rate at our Washington, Pennsylvania center which opened during the third quarter of 2008 and had not yet stabilized.
(2)  
Excludes the occupancy rate at our Myrtle Beach Hwy 17, South Carolina center which was owned by an unconsolidated joint venture during those periods.  On January 5, 2009, we acquired the remaining 50% interest in the joint venture and the property became wholly-owned.
(3)  
Includes a 29,253 square foot warehouse adjacent to the shopping center.

 
5
 

Portfolio Occupancy at the End of Each Period (1)


06/09(4)    03/09(4)    12/08(4)    09/08(2)(4)    06/08(2)    03/08(2)    12/07(2)    09/07(2)(3)    06/07(2)(3)   
95%       94%     97%      97%     96%     95%     98%     97%      97%




 

(1)  
Excludes one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements. Also, excludes one 655,598 square foot shopping center and one 29,253 square foot warehouse in Deer Park, NY of which Tanger owns a 33.3% interest through a joint venture arrangement.

(2)  
Excludes the occupancy rate at our Myrtle Beach Hwy 17, South Carolina center which was owned by an unconsolidated joint venture during those periods.  On January 5, 2009, we acquired the remaining 50% interest in the joint venture and the property became wholly-owned

(3)  
Excludes the occupancy rate at our Charleston, South Carolina center which opened during the third quarter of 2006 and had not yet stabilized.

(4)  
Excludes the occupancy rate at our Washington, Pennsylvania center which opened during the third quarter of 2008 and had not yet stabilized.

 
6
 
Major Tenants (1)


Ten Largest Tenants As of June 30, 2009
 
Tenant
# of
Stores
 
GLA
% of
Total GLA
The Gap, Inc.
73
776,530
8.4%
Phillips-Van Heusen
90
431,598
4.7%
Nike
25
308,060
3.3%
VF Outlet, Inc
32
304,957
3.3%
Adidas
34
291,124
3.2%
Liz Claiborne
35
272,210
2.9%
Dress Barn, Inc.
38
259,851
2.8%
Carter’s
47
229,505
2.5%
Jones Retail Corporation
74
205,621
2.2%
Polo Ralph Lauren
23
197,669
2.2%
Total of All Listed Above
471
3,277,125
35.5%


 
(1)  
Excludes one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements.  Also, excludes one 655,598 square foot shopping center and one 29,253 square foot warehouse in Deer Park, NY of which Tanger owns a 33.3% interest through a joint venture arrangement.


 
7
 
Lease Expirations as of June 30, 2009

 

Percentage of Total Gross Leasable Area (1)
 


2009     2010     2011     2012     2013     2014    2015    2016      2017       2018      2019+
4.00%    16.00%    18.00%    18.00%    17.00%    10.00%       3.00%    2.00%    4.00%    4.00%    4.00%



Percentage of Total Annualized Base Rent (1)
 


2009     2010     2011     2012     2013     2014    2015    2016      2017       2018      2019+
3.00%    16.00%    17.00%    16.00%    18.00%    10.00%       3.00%    3.00%    4.00%    5.00%    5.00%


 


 
(1)
Excludes one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements. Also, excludes one 655,598 square foot shopping center and one 29,253 square foot warehouse in Deer Park, NY of which Tanger owns a 33.3% interest through a joint venture arrangement.
 

 
 
8
 
Leasing Activity (1)
 
 
 
03/31/09
 
 
06/30/09
 
 
09/30/09
 
 
12/31/09
 
Year to
 Date  
Prior
Year to
Date
Re-tenanted Space:
            
    Number of leases
51
22
    
73
102
    Gross leasable area
188,153
35,460
    
223,613
403,268
    New initial base rent per square foot
$24.75
$45.40
    
$28.02
$24.01
    Prior expiring base rent per square foot
$18.74
$28.49
    
$20.29
$18.12
    Percent increase
32.0%
59.3%
    
38.1%
32.5%
             
    New straight line base rent per square foot
$26.09
$47.42
    
$29.47
$25.40
    Prior straight line base rent per square foot
$18.31
$29.14
    
$20.03
$17.75
    Percent increase
42.4%
62.8%
    
47.1%
43.1%
             
Renewed Space:
            
    Number of leases
162
50
    
212
216
    Gross leasable area
806,051
226,250
    
1,032,301
984,204
    New initial base rent per square foot
$18.05
$17.16
    
$17.85
$19.50
    Prior expiring base rent per square foot
$16.20
$17.26
    
$16.43
$17.05
    Percent increase
11.4%
-0.6%
    
8.6%
14.4%
             
   New straight line base rent per square foot
$18.42
$17.39
    
$18.19
$20.14
    Prior straight line base rent per square foot
$16.08
$17.09
    
$16.30
$17.03
    Percent increase
14.5%
1.8%
    
11.6%
18.3%
             
Total Re-tenanted and Renewed Space:
            
    Number of leases
213
72
    
285
318
    Gross leasable area
994,204
261,710
    
1,255,914
1,387,472
    New initial base rent per square foot
$19.32
$20.99
    
$19.66
$20.81
    Prior expiring base rent per square foot
$16.68
$18.78
    
$17.12
$17.36
    Percent increase
15.8%
11.7%
    
14.9%
19.9%
             
    New straight line base rent per square foot
$19.87
$21.46
    
$20.20
$21.67
    Prior straight line base rent per square foot
$16.50
$18.72
    
$16.96
$17.24
    Percent increase
20.4%
14.6%
    
19.1%
25.7%



(1)  
  
Excludes one 264,929 square foot center in Wisconsin Dells, WI, of which Tanger owns 50% interest in through joint venture arrangements. Also, excludes one 655,598 square foot shopping center and one 29,253 square foot warehouse in Deer Park, NY of which Tanger owns a 33.3% interest through a joint venture arrangement.
 
 
 
 
9
Consolidated Balance Sheets (dollars in thousands)
         
 
6/30/09
3/31/09
9/30/08
6/30/08
Assets
        
   Rental property
        
       Land
$135,708
$135,710
$135,688
$130,077
       Buildings
1,343,854
1,348,211
1,233,906
1,130,536
       Construction in progress
---
4,805
16,377
90,614
   Total rental property
1,479,562
1,488,726
1,385,971
1,351,227
       Accumulated depreciation
(379,412)
(374,541)
(345,577)
(333,995)
   Total rental property – net
1,100,150
1,114,185
1,040,394
1,017,232
   Cash & cash equivalents
5,150
3,101
3,753
1,088
   Investments in unconsolidated jointventures
9,808
9,773
12,184
11,703
   Deferred charges – net
43,746
48,294
39,644
41,593
   Other assets
31,771
34,010
28,811
28,097
Total assets
$1,190,625
$1,209,363
$1,124,786
$1,099,713
Liabilities & equity
      
  Liabilities
        
    Debt
        
       Senior, unsecured notes, net of discount
$256,235
$391,133
$389,605
$388,858
       Unsecured term loan
235,000
235,000
235,000
235,000
       Mortgages payable, net of discount
34,938
34,634
---
---
       Unsecured lines of credit
      188,250
      188,400
      149,500
      128,300
    Total debt
714,423
849,167
774,105
752,158
    Construction trade payables
6,327
9,070
22,840
28,393
    Accounts payable & accruals
25,103
27,777
30,789
22,453
   Other liabilities
32,152
33,868
15,784
12,378
  Total liabilities
778,005
919,882
843,518
815,382
Equity
        
  Shareholders’ equity
        
    Preferred shares
75,000
75,000
75,000
75,000
    Common shares
368
319
317
316
    Paid in capital
482,532
372,762
369,999
368,034
    Distributions in excess of net income
(186,202)
(184,349)
(197,140)
(193,441)
    Accum. other comprehensive income (loss)
(6,879)
(8,533)
(73)
725
  Total shareholders’ equity
364,819
255,199
248,103
250,634
  Noncontrolling interest
       47,801
       34,282
       33,165
       33,697
Total equity
412,620
289,481
281,268
284,331
Total liabilities and equity
$1,190,625
$1,209,363
$1,124,786
$1,099,713
 
 
 
10
 
Consolidated Statements of Operations (dollars and shares in thousands)

 
Three Months Ended
YTD
 
06/09
03/09
12/08
09/08
06/08
06/09
06/08
Revenues
              
   Base rentals
  $  43,425
  $  42,927
  $   42,694
  $  40,519
  $    38,623
  $  86,352
  $    75,855
   Percentage rentals
             940
          1,308
          2,949
          1,811
          1,120
        2,248
          2,298
   Expense reimbursements
        18,374
        19,219
        20,557
        18,277
        15,692
      37,593
        33,170
   Other income
          1,928
          1,704
          2,137
          2,166
          1,570
        3,632
          2,958
      Total revenues
        64,667
        65,158
        68,337
        62,773
        57,005
      129,825
        114,281
Expenses
              
   Property operating
        20,794
        21,748
        21,139
        20,091
        17,525
      42,542
      $36,744
   General & administrative
          5,820
          5,935
          5,099
          6,217
          5,677
      11,755
       10,948
   Depreciation & amortization
        19,652
        20,397
        16,736
        15,320
        14,690
      40,049
        30,273
   Impairment charge
5,200
---
---
---
---
        5,200
---
   Abandoned due diligence costs
              ---
              ---
          3,336
            587
              ---
             ---
              ---
      Total expenses
        51,466
        48,080
        46,310
        42,215
        37,892
      99,546
        77,965
Operating income
  13,201
  17,078
  22,027
  20,558
  19,113
      30,279
 36,316
   Interest expense
       (9,564)
        (11,210)
       (10,972)
         (9,811)
(10,143)
    (20,774)
       (20,342)
   Gain on early extinguishment of debt
10,467
---
---
---
---
      10,467
---
   Gain on fair value measurement of
              
     previously held interest in acquired
              
     joint venture
---
31,497
---
---
---
       31,497
---
   Loss on settlement of US treasury rate locks
---
---
---
---
(8,910)
             ---
(8,910)
Income before equity in earnings (losses) of
   unconsolidated joint ventures
 
        14,104
 
        37,365
 
        11,055
 
        10,747
 
60
 
      51,469
 
         7,064
Equity in earnings (losses) of unconsolidated
   joint ventures
 
           (517)
 
            (897)
 
           (696)
 
             596
 
             558
 
      (1,414)
 
            952
Net income
        13,587
        36,468
        10,359
        11,343
             618
      50,055
         8,016
Non-controlling interest
        (1,833)
        (5,698)
        (1,459)
        (1,621)
             129
      (7,531)
           (852)
Net income attributable to shareholders
              
   of the Company
       11,754
       30,770
         8,900
          9,722
             747
     42,524
         7,164
Less applicable preferred share dividends
        (1,407)
        (1,406)
        (1,406)
        (1,406)
        (1,407)
      (2,813)
        (2,813)
Allocation to participating securities
           (179)
           (437)
           (195)
           (195)
           (195)
         (616)
           (334)
Net income (loss) available to common
   shareholders
 
$  10,168
 
$  28,927
 
$    7,299
 
$     8,121
 
$       (855)
 
$    39,095
 
$        4,017
Basic earnings per common share:
              
   Income (loss) from continuing operations
$        .30
$        .93
$        .23
$        .26
$        (.03)
$        1.19
$           .13
   Net income (loss)
$        .30
$        .93
$        .23
$        .26
$        (.03)
$        1.19
$           .13
Diluted earnings per common share:
              
   Income (loss) from continuing operations
$        .30
$        .92
$        .23
$        .26
$        (.03)
$        1.19
$           .13
   Net income (loss)
$        .30
$        .92
$        .23
$        .26
$        (.03)
$        1.19
$           .13
Weighted average common shares:
              
   Basic
      34,249
      31,269
      31,160
      31,129
      31,068
      32,767
       31,024
   Diluted
      34,327
      31,350
      31,258
      31,739
      31,446
      32,847
       31,409
 


 
11
 

FFO and FAD Analysis (dollars and shares in thousands)
 
Three Months Ended
YTD
 
 06/09
 03/09
 12/08
 09/08
 06/08
06/09
06/08
Funds from operations:
              
   Net income
$  13,587
$  36,468
$  10,359
$  11,343
$     618
$  50,055
$    8,016
   Adjusted for -
              
      Depreciation and amortization
        uniquely significant to real estate –
       wholly-owned
 
 
    19,530
 
 
    20,278
 
 
    16,630
 
 
    15,219
 
 
    14,608
 
 
    39,808
 
 
    30,116
      Depreciation and amortization
        uniquely significant to real estate –
        joint ventures
 
 
      1,223
 
 
      1,166
 
 
      1,227
 
 
         635
 
 
         651
 
 
   2,389
 
 
      1,303
      (Gain) on fair value measurement of
        previously held interest in
        acquired joint venture
 
 
           --
 
 
   (31,497)
 
 
           --
 
 
           --
 
 
           --
 
 
   (31,497)
 
 
           --
Funds from operations
    34,340
    26,415
    28,216
    27,197
    15,877
    60,755
    39,435
Preferred share dividends
     (1,407)
     (1,406)
     (1,406)
     (1,406)
     (1,407)
     (2,813)
     (2,813)
Allocation to participating securities
        (452)
        (306)
        (361)
        (349)
        (197)
        (758)
        (448)
Funds from operations available to
       common shareholders
 
$  32,481
 
$  24,703
 
$  26,449
 
$  25,442
 
$  14,273
 
$  57,184
 
$  36,174
Funds from operations per share
    $.80
    $.66
    $.71
    $.67
    $.38
   $1.47
   $.97
Funds available for distribution to
   common shareholders:
              
   Funds from operations
$  32,481
$  24,703
$  26,449
$  25,442
$  14,273
$  57,184
$  36,174
   Adjusted for -
              
      Corporate depreciation
          excluded above
 
     122
 
     119
 
     106
 
     101
 
       82
 
      241
 
     157
      Amortization of finance costs
     357
     465
     474
     444
     352
      822
     713
      Amortization of net debt discount
           premium
 
         (76)
 
      1,070
 
        758
 
        747
 
         297
 
        994
 
        414
     Gain on early extinguishment of debt
(10,467)
--
--
--
--
(10,467)
--
     Impairment charge
5,200
--
--
--
--
5,200
--
      Loss on termination of US treasury
           lock derivatives
 
--
 
--
 
--
 
--
 
8,910
 
--
 
8,910
      Amortization of share compensation
      1,592
      1,297
      1,368
      1,404
      1,396
     2,889
      2,620
      Straight line rent adjustment
       (757)
       (777)
       (499)
       (822)
    (1,085)
   (1,534)
  (1,874)
      Market rent adjustment
     (121)
     78
     (128)
     (135)
     (198)
         (43)
    (93)
      2nd generation tenant allowances
     (2,834)
     (2,371)
     (3,042)
     (3,088)
    (2,701)
   (5,205)
  (6,878)
      Capital improvements
     (3,107)
     (2,761)
     (6,736)
   (12,062)
    (9,500)
   (5,868)
(12,049)
Funds available for distribution
 $ 22,390
 $ 21,823
 $ 18,750
 $ 12,031
 $ 11,826
 $ 44,213
 $ 28,094
Funds available for distribution
   per share
 
    $.55
 
    $.58
 
    $.50
 
    $.32
 
    $.31
 
    $1.14
 
    $.75
Dividends paid per share
    $.3825
    $.38
    $.38
    $.38
    $.38
    $.7625
    $.74
FFO payout ratio
    48%
    58%
    54%
    57%
    100%
    52%
    76%
FAD payout ratio
    70%
    66%
    76%
  119%
  123%
    67%
    99%
Diluted weighted average common shs.
   40,394
   37,417
   37,324
   37,806
   37,513
   38,914
   37,476

 
 
12
 
Unconsolidated Joint Venture Information – All
Summary Balance Sheets (dollars in thousands)
 
 
 
6/30/09
 
 
3/31/09
 
 
12/31/08
 
 
9/30/08
 
 
6/30/08
  
Tanger’s
Share as of
6/30/09
Assets
              
   Investment properties at cost – net
$291,166
$288,951
$323,546
$72,118
$73,033
  
$102,606
   Construction in progress
---
---
---
226,031
181,246
  
---
   Cash and cash equivalents
5,880
13,195
5,359
4,104
3,896
  
2,519
   Deferred charges – net
5,685
6,307
7,025
6,041
6,184
  
1,969
   Other assets
4,549
4,399
6,324
7,853
7,894
  
1,605
Total assets
$307,280
$312,852
$342,254
$316,147
$272,253
  
$108,699
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$288,169
$288,169
$303,419
$259,789
$215,028
  
$100,265
    Construction trade payables
1,651
3,356
13,641
26,750
28,129
  
584
    Accounts payable & other liabilities
1,825
6,998
9,479
6,845
7,117
  
741
Total liabilities
291,645
298,523
326,539
293,384
250,274
  
101,590
Owners’ equity
15,635
14,329
15,715
22,763
21,979
  
7,109
Total liabilities & owners’ equity
$307,280
$312,852
$342,254
$316,147
$272,253
  
$108,699

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
06/09
03/09
12/08
09/08
06/08
06/09
06/08
Revenues
$8,431
$8,524
$10,573
$5,582
$5,031
$16,955
$9,788
Expenses
              
   Property operating
3,611
4,247
6,679
2,128
1,720
7,858
3,522
   General & administrative
117
189
403
90
79
306
98
   Depreciation & amortization
3,358
3,174
3,022
1,302
1,344
6,532
2,689
     Total expenses
7,086
7,610
10,104
3,520
3,143
14,696
6,309
Operating income
1,345
914
469
2,062
1,888
2,259
3,479
   Interest expense
3,079
3,731
3,414
932
820
6,810
1,660
Net income (loss)
$(1,734)
$(2,817)
$(2,945)
$1,130
$1,068
$(4,551)
$1,819
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,751
 
 
$   1,534
 
 
$1,808
 
 
$1,692
 
 
$1,617
 
 
$   3,285
 
 
$3,083
       Net income
$   (517)
$   (897)
$(696)
$596
$558
$(1,414)
$952
       Depreciation (real estate related)
$   1,223
$   1,166
$1,227
$635
$651
$   2,389
$1,303

 
13
 

 Unconsolidated Joint Venture Information – Wisconsin Dells
Summary Balance Sheets (dollars in thousands)
 
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
 
 
09/30/08
 
 
06/30/08
  
Tanger’s
 Share as of
06/30/09
Assets
              
   Investment properties at cost - net
$33,165
$33,718
$34,068
$34,426
$34,965
  
$16,583
   Cash and cash equivalents
3,312
2,436
2,352
1,210
676
  
1,656
   Deferred charges – net
444
493
528
575
640
  
222
   Other assets
527
589
533
582
731
  
264
Total assets
$37,448
$37,236
$37,481
$36,793
$37,012
  
$18,725
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$25,250
$25,250
$25,250
$25,250
$25,250
  
$12,625
    Construction trade payables
199
199
199
--
--
  
100
    Accounts payable & other liabilities
787
654
816
725
727
  
394
Total liabilities
26,236
26,103
26,265
25,975
25,977
  
13,119
Owners’ equity
11,212
11,133
11,216
10,818
11,035
  
5,606
Total liabilities & owners’ equity
$37,448
$37,236
$37,481
$36,793
$37,012
  
$18,725

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
06/09
03/09
12/08
09/08
06/08
06/09
06/08
Revenues
$1,785
$1,771
$2,644
$1,903
$1,795
$3,556
$3,643
Expenses
              
   Property operating
661
685
694
582
615
1,346
1,327
   General & administrative
13
3
6
2
6
16
9
   Depreciation & amortization
613
613
615
610
607
1,226
1,213
     Total expenses
1,287
1,301
1,315
1,194
1,228
2,588
2,549
Operating income
498
470
1,329
709
567
968
1,094
   Interest expense
118
134
272
266
271
252
610
Net income
$  380
$  336
$1,057
$443
$296
$  716
$484
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$556
 
 
$541
 
 
$971
 
 
$659
 
 
$587
 
 
$1,097
 
 
$1,154
       Net income
$201
$177
$538
$232
$158
$378
$263
       Depreciation (real estate related)
      $296
      $297
      $296
      $295
      $294
    $593
      $586

 
14
 

Unconsolidated Joint Venture Information – Deer Park
Summary Balance Sheets (dollars in thousands)
 
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
 
 
09/30/08
 
 
06/30/08
  
Tanger’s
Share as of
06/30/09
Assets
              
   Investment properties at cost - net
$   257,868
$   255,174
$ 255,885
$   3,443
$   3,424
  
$  85,956
   Construction in progress
---
---
---
226,031
181,246
  
---
   Cash and cash equivalents
2,526
10,645
2,093
1,141
1,851
  
842
   Deferred charges – net
5,241
5,814
5,895
4,822
4,900
  
1,747
   Other assets
4,022
3,810
3,632
5,039
4,828
  
1,341
Total assets
$269,657
$275,443
$267,505
$240,476
$196,249
  
 $ 89,886
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$262,919
$262,919
$242,369
$198,739
$153,978
  
$ 87,640
    Construction trade payables
1,452
3,157
13,182
25,859
27,185
  
484
    Accounts payable & other liabilities
1,034
6,344
6,414
4,343
4,764
  
345
Total liabilities
265,405
272,420
261,965
228,941
185,927
  
88,469
Owners’ equity
4,252
3,023
5,540
11,535
10,322
  
1,417
Total liabilities & owners’ equity
$269,657
$275,443
$267,505
$240,476
$196,249
  
$  89,886

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
06/09
03/09
12/08
09/08
06/08
06/09
06/08
Revenues
$6,646
$6,753
$4,855
$450
$42
$13,399
$63
Expenses
              
   Property operating
2,950
3,562
4,852
424
4
6,512
4
   General & administrative
104
186
376
84
46
290
55
   Depreciation & amortization
2,727
2,539
1,652
20
4
5,266
4
     Total expenses
5,781
6,287
6,880
528
54
12,068
63
Operating income
865
466
(2,025)
(78)
(12)
1,331
--
   Interest expense
2,961
3,597
2,588
30
6
6,558
6
Net income (loss)
$(2,096)
$(3,131)
$(4,613)
$(108)
$(18)
$(5,227)
$(6)
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,196
 
 
$   1,002
 
 
$   (123)
 
 
$(18)
 
 
$(2)
 
 
$   2,198
 
 
$   2
       Net income (loss)
$   (718)
$(1,065)
$(1,540)
$(36)
$(6)
$(1,783)
$(2)
       Depreciation (real estate related)
$      927
$     869
$     554
       $   7
       $   1
$   1,796
$   1

 
15
 

Debt Outstanding Summary (dollars in thousands)

As of June 30, 2009
 
Principal
Balance
Interest
Rate
Maturity
Date
Secured debt:
      
   Myrtle Beach Hwy 17 mortgage (1)
$  35,800
Libor + 1.40%
4/7/10
Unsecured debt:
      
   Unsecured term loan credit facility (2)
235,000
Libor + 1.60%
6/10/11
           Unsecured credit facilities (3)
188,250
Libor + 0.60 – 0.75%
06/30/11
   2015 Senior unsecured notes
250,000
6.15%
11/15/15
   2026 Senior unsecured exchangeable notes (4)
7,210
3.75%
8/15/26
Net debt discounts
(1,837)
    
Total consolidated debt
$714,423
    
Tanger’s share of unconsolidated JV debt:
      
   Wisconsin Dells
12,625
Libor + 1.30%
02/24/10
Deer Park (5)
87,640
Libor + 1.375 – 3.50%
5/17/11
Total Tanger’s share of unconsolidated JV debt
$100,265
    
(1)  
In January 2009, we acquired the remaining 50% interest in the Myrtle Beach Hwy 17 joint venture, assuming an existing $35.8 million mortgage on the property and an existing interest rate swap agreement for a notional amount of $35.0 million.  The purpose of the swap was to fix the interest rate on a portion of the $35.8 million outstanding mortgage completed in April 2005.  The swap fixed the one month LIBOR rate at 4.59%.  This swap, combined with the current spread of 140 basis points on the mortgage, fixes the interest on $35.0 million of variable rate debt at 5.99% until March 15, 2010.  The debt assumed was recorded at fair value, resulting in the recognition of a debt discount of $1.5 million at acquisition based on a market interest rate of 5.3%.  The fair value of the swap at acquisition was recorded in other liabilities totaling $1.7 million.  Both the debt discount and the fair value of the swap are being amortized to interest expense over the remaining term of the loan and are expected to have offsetting effects on interest expense.
(2)  
In July and September 2008, we entered into LIBOR based interest rate swap agreements on notional amounts of $118.0 million and $117.0 million, respectively.  The purpose of the swaps 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 swaps fixed the one month LIBOR rate at 3.605 and 3.70%, respectively.  When combined with the current spread of 160 basis points on the term loan facility, which can vary based on our credit rating, these swap agreements fix our interest rate on $235.0 million of variable rate debt at 5.25% until April 1, 2011.
(3)  
The company has six lines of credit with a borrowing capacity totaling $325.0 million, of which $25.0 million expired June 30, 2009, $260.0 million expires on June 30, 2011 and $40.0 million expires on August 30, 2011.  The company has received a commitment from Wells Fargo Bank to increase the size of their unsecured line of credit from $100 million to $125 million, thus absorbing the $25 million line that expired on June 30, 2009.
(4)  
On January 1, 2009, we adopted the provisions of FSP APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, which require us to bifurcate the notes into debt and equity components based on the fair value of the notes independent of the conversion feature as of the date of issuance in August 2006.  As a result of this adoption we recorded an initial debt discount of $15.0 million based on a market interest rate of 6.11%.  FSP APB 14-1 was applied using retrospective treatment which means that prior periods have been restated.  On May 8, 2009, we closed on an offer to exchange common shares for any and all the outstanding exchangeable notes, resulting in the retirement of $142.3 million principal amount of the notes for approximately 4.9 million common shares of the company.  At June 30, 2009, the unamortized discount on the remaining $7.2 million in exchangeable notes totaled $335,000.
(5)  
In May 2007, the joint venture entered into a four-year, interest-only construction loan facility with a one-year maturity extension option.  The facility includes a senior loan, with an interest rate of LIBOR plus 137.5 basis points, and a mezzanine loan, with an interest rate of LIBOR plus 350 basis points.   As of June 30, 2009, the outstanding principle balances of the senior and mezzanine loans were $245.6 million and $15.0 million, respectively, and $23.4 million was available for funding of additional construction draw requests under the senior loan facility.  In February 2009, the joint venture entered into an interest rate cap agreement on a nominal amount of $240.0 million which became effective June 1, 2009.  The derivative contract puts a cap of 4% on LIBOR and expires on April 1, 2011.  In June 2008, the joint venture entered into an interest-only mortgage loan agreement with an interest rate of LIBOR plus 185 basis points and a maturity of May 17, 2011.  As of June 30, 2009, the outstanding principle balance under this mortgage was $2.3 million.

 
16
 

Future Scheduled Principal Payments (dollars in thousands)

As of June 30, 2009
 
 
Year
Tanger
Consolidated
Payments
Tanger’s Share
of Unconsolidated
JV Payments
Total
Scheduled
Payments
2009
$          --
$          --
$           --
2010
35,800
12,625
48,425
2011
423,250
87,640
510,890
2012
--
--
--
2013
--
--
--
2014
--
--
--
2015
250,000
--
250,000
2016
--
--
--
2017
--
--
--
2018 & thereafter
(1) 7,210
--
7,210
 
$716,260
$100,265
$816,525
Net Discount on Debt
 (1,837)
--
(1,837)
 
$714,423
$100,265
$814,688

 
Senior Unsecured Notes Financial Covenants (2)

As of June 30, 2009
 
Required
Actual
Compliance
Total Consolidated Debt to Adjusted Total Assets
60%
  45%
Yes
Total Secured Debt to Adjusted Total Assets
40%
  2%
Yes
Total Unencumbered Assets to Unsecured Debt
135%
221%
Yes
Consolidated Income Available for Debt Service to             
           Annual Debt Service Charge
 
2.00
 
3.84
 
Yes
(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.
(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
 
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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