-----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, K8gaSVXytoP7tbVYcRunW9EwGzSrR6PutpQpCFuWDYFsAjujYyzP81vImKVzL9fn kC/R1nCz4/hTpczXFp6Uog== 0000899715-09-000178.txt : 20091027 0000899715-09-000178.hdr.sgml : 20091027 20091027163330 ACCESSION NUMBER: 0000899715-09-000178 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20091027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20091027 DATE AS OF CHANGE: 20091027 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: 091139587 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 tfoc8k10272009.htm TFOC 8-K tfoc8k10272009.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 27, 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 October 27, 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 September 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 October 27, 2009, the Company made publicly available certain supplemental operating and financial information for the quarter ended September 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 September 30, 2009.

 
Exhibit 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended September 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:  October 27, 2009

TANGER FACTORY OUTLET CENTERS, INC.

By:           /s/ Frank C. Marchisello, Jr.
Frank C. Marchisello, Jr.
Executive Vice President, Chief Executive 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, 2009.

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


 EX-99.1 2 tfoc8k10272009ex99-1.htm EXHIBIT 99.1 tfoc8k10272009ex99-1.htm

Tanger Factory Outlet Centers, Inc.

News Release

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

TANGER REPORTS THIRD QUARTER 2009 RESULTS
Adjusted Funds From Operations Increase 4.5%

Greensboro, NC, October 27, 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 September 30, 2009 was $0.54 per share, or $24.0 million, as compared to FFO of $0.67 per share, or $25.4 million, for the three months ended September 30, 2008.  For the nine months ended September 30, 2009, FFO was $81.2 million, or $1.99 per share, as compared to FFO of $61.6 million, or $1.63 per share, for the nine months ended September 30, 2008.  

FFO for all periods shown was impacted by a number of non-recurring charges as described in the summary below ($’s in thousands):

   
             Three Months Ended
          Nine Months Ended
   
              September 30,
             September 30,
   
2009
2008
2009
2008
FFO as reported
 
$   23,983
$  25,442
$   81,174
$  61,620
As adjusted for:
          
 
US Treasury lock settlements
  
---
---
---
8,910
 
Prepayment premium
  
---
---
---
406
 
Impairment charge
  
---
---
5,200
---
 
Gain on early extinguishment of debt
  
---
---
(10,467)
---
 
Executive severance
  
10,296
---
10,296
---
 
Gain on sale of outparcel
  
(3,292)
---
(3,292)
---
 
Impact of above adjustments to the allocation
          
   
of earnings to participating securities
  
(85)
---
(23)
(121)
FFO as adjusted
  
$  30,902
$ 25,442
$   82,888
$ 70,815
FFO per share as adjusted
  
$        .70
$       .67
$       2.04
$     1.88

Excluding these charges, adjusted FFO for the third quarter and nine months ended September 30, 2009 would have been $0.70 and $2.04 per share respectively, while FFO for the third quarter and nine months ended September 30, 2008 would have been $0.67 and $1.88 per share respectively; representing an increase of 4.5% for the three months ended September 30, 2009 and an increase of 8.5% for the nine months ended September 30, 2009.

For the three months ended September 30, 2009, net income available to common shareholders was $2.3 million or $0.06 per share, as compared to $8.1 million, or $0.26 per share for the third quarter of 2008.  Net income available to common shareholders for the nine months ended September 30, 2009 was $41.6 million, or $1.20 per share compared to $12.1 million, or $0.38 per share, for the first nine months of 2008.  Net income available to common shareholders for certain periods in 2008 and 2009 were also impacted by the non-recurring charges described above.  Net income available to common shareholders for the nine months ended September 30, 2009 also includes a non-recurring gain of $31.5 million related to the acquisition of our partner’s interest in a shopping center previously held in a joint venture.

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

 
·  
Successfully completed 3,450,000 common share offering at a price of $35.50 per share, with net proceeds amounting to approximately $116.8 million
 
·  
Received an upgrade from Moody’s Investor Service from Baa3 stable to Baa3 positive
 
·  
24.3% debt-to-total market capitalization ratio, compared to 31.2% last year
 
·  
4.63 times interest coverage ratio for the three months ended September 30, 2009 compared to 3.66 times last year
 
·  
10.1% average increase in base rental rates on 1,113,000 square feet of signed renewals during the first nine months of 2009, compared to 17.6% year to date in 2008
 
·  
37.4% average increase in base rental rates on 319,000 square feet of re-leased space during the first nine months of 2009, compared to 43.8% year to date in 2008
 
·  
1.8% increase in same center net operating income for the first nine months, compared to 4.7% year to date last year
 
·  
95.6% occupancy rate for wholly-owned properties, up 0.9% from June 30, 2009
 
·  
$335 per square foot in reported same-space tenant sales for the rolling twelve months ended September 30, 2009

Steven B. Tanger, President and Chief Executive Officer, commented, “We are pleased with our operating results for the third quarter of 2009.  Overall, we have remained on plan during these difficult economic times.  Our third quarter adjusted funds from operations per share increased 4.5%; and, as planned, same center net operating income increased almost 2% during the first nine months of 2009.  In addition, we are excited to report that we have closed on our development site in Mebane, North Carolina and will begin construction immediately, with a targeted opening date in time for the 2010 holiday season.”

Balance Sheet Summary

On August 14, 2009, Tanger announced the successful completion of a public offering of 3,450,000 common shares at a price of $35.50 per share, including 450,000 common shares issued and sold upon the full exercise of the underwriters' overallotment option. BofA Merrill Lynch and Goldman, Sachs & Co. served as the joint book-running managers.  The net proceeds to the company from the offering, after deducting underwriting commissions and discounts and estimated offering expenses, were approximately $116.8 million.  The Company used the net proceeds from the offering to repay borrowings under its unsecured lines of credit and for general corporate purposes.

On September 22, 2009, Moody's Investors Service affirmed its Baa3 senior unsecured rating for Tanger Properties Limited Partnership, the operating partnership of Tanger Factory Outlet Centers, Inc, and revised the rating outlook for Tanger to positive from stable.  This rating action incorporates Tanger's stable performance throughout the economic downturn to date, overall defensive nature of outlet retailing, as well as the REIT's strong credit metrics in its rating category.  

As of September 30, 2009, Tanger had a total market capitalization of approximately $2.4 billion including $580.5 million of debt outstanding, equating to a 24.3% debt-to-total market capitalization ratio.  As of September 30, 2009, 90.6% of Tanger’s debt was at fixed interest rates and the company had $54.0 million outstanding on its $325.0 million in available unsecured lines of credit.  During the third quarter of 2009, Tanger continued to maintain a strong interest coverage ratio of 4.63 times, compared to 3.66 times during the third quarter of last year.  

 
2
 
Portfolio Operating Results

During the first nine months of 2009, Tanger executed 319 leases, totaling 1,432,000 square feet within its wholly-owned properties.  Lease renewals during the first nine months of 2009 accounted for 1,113,000 square feet, which represented approximately 74% of the square feet originally scheduled to expire during 2009, and generated a 10.1% increase in average base rental rates. Base rental increases on re-tenanted space during the first nine months averaged 37.4% and accounted for the remaining 319,000 square feet.    

Same center net operating income increased 0.3% for the third quarter of 2009, and increased 1.8% for the first nine months of 2009, compared to 4.7% for the first nine months of 2008.  Reported tenant comparable sales for our wholly owned properties for the rolling twelve months ended September 30, 2009 decreased 2.0% to $335 per square foot.  However, reported tenant comparable sales for the three months ended September 30, 2009 increased 5.1%.  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.

New Development

On October 14, 2009, Tanger closed on its development site in Mebane, North Carolina.  The company will begin construction of its center, totaling approximately 317,000 square foot immediately.  Currently, Tanger has signed leases, or leases out for signature for approximately 66% of the total gross leasable area.  With an estimated total cost of approximately $61.5 million, and an anticipated return on cost of between 10.5% and 11.0%, the company expects the center to be open in time for the 2010 holiday season.

2009 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 $1.39 and $1.45 per share and its FFO available to common shareholders for 2009 will be between $2.62 and $2.68 per share.  This represents an increase of approximately 7% from the company's previous FFO guidance.  The company’s earnings estimates do not include the impact of any potential future 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
$1.39
$1.45
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
  1.23
  1.23
Estimated diluted FFO per share
$2.62
$2.68


 
3
 

Third Quarter Conference Call

Tanger will host a conference call to discuss its second quarter results for analysts, investors and other interested parties on Wednesday, October 28, 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 Third 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 October 28, 2009 starting at 11:00 A.M. Eastern Time through November 6, 2009, by dialing 1-800-642-1687 (conference ID # 35216518).  Additionally, an online archive of the broadcast will also be available through November 6, 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 September 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, the development of new centers, 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.

 
4
 

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,
   
             2009
  
            2008
  
          2009
  
        2008
REVENUES
                                  
 
Base rentals (a)
  
$
44,160
    
$
40,519
    
$
130,512
    
$
116,374
    
 
Percentage rentals
    
1,442
      
1,811
      
3,690
      
4,109
    
 
Expense reimbursements
    
19,069
      
18,277
      
56,662
      
51,447
    
 
Other income (b)
    
5,646
      
2,166
      
9,278
      
5,124
    
   
Total revenues
    
70,317
      
62,773
      
200,142
      
177,054
    
EXPENSES
                                  
 
Property operating
    
21,353
      
20,091
      
63,895
      
56,835
    
 
General and administrative
   
5,467
      
6,217
      
17,222
      
17,165
    
 
Executive severance (c)
    
10,296
      
---
      
10,296
      
---
    
 
Depreciation and amortization
    
20,213
      
15,320
      
60,262
      
45,593
    
 
Abandoned due diligence costs
    
---
      
587
      
---
      
587
    
 
Impairment charge (d)
    
---
      
---
      
5,200
      
---
    
   
Total expenses
    
57,329
      
42,215
      
156,875
      
120,180
    
Operating income
    
12,988
      
20,558
      
43,267
      
56,874
    
 
Interest expense (e)
    
(8,692
)
    
(9,811
)
    
(29,466
)
    
(30,153
)
  
 
Gain on early extinguishment of debt (f)
    
---
      
---
      
10,467
      
---
    
 
Gain on fair value measurement of previously
                                  
   
held interest in acquired joint venture (g)
    
---
      
---
      
31,497
      
---
    
   
Loss on settlement of US treasury rate locks
   
---
      
---
      
---
      
(8,910
)
  
Income before equity in earnings (losses) of
                                 
 
unconsolidated joint ventures
    
4,296
      
10,747
      
55,765
      
17,811
    
Equity in earnings (losses) of unconsolidated
                                 
 
joint ventures
    
68
      
596
      
(1,346
)
    
1,548
    
Net income
    
4,364
      
11,343
      
54,419
      
19,359
    
Noncontrolling interest in Operating Partnership
    
(407
)
    
(1,621
)
    
(7,938
)
    
(2,473
)
  
Net income attributable to
                                 
 
Tanger Factory Outlet Centers, Inc.
    
3,957
      
9,722
      
46,481
      
16,886
    
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(4,219
)
    
(4,219
)
  
Allocation of earnings to participating securities
    
(207
)
    
(195
)
    
(639
)
    
(529
)
  
Net income available to common shareholders
                                  
 
of Tanger Factory Outlet Centers, Inc.
  
$
2,344
    
$
8,121
    
$
41,623
    
$
12,138
    
                                   
Basic earnings per common share:
                                  
 
Income from continuing operations
  
$
.06
    
$
.26
    
$
1.20
    
$
.39
    
 
Net income
 
$
.06
    
$
.26
    
$
1.20
    
$
.39
    
                                   
Diluted earnings per common share:
                                  
 
Income from continuing operations
  
$
.06
    
$
.26
    
$
1.20
    
$
.38
    
 
Net income
 
$
.06
    
$
.26
    
$
1.20
    
$
.38
    
                                   
Funds from operations available to
                                  
 
common shareholders (FFO)
  
$
23,983
    
$
25,442
    
$
81,174
    
$
61,620
    
FFO per common share – diluted
  
$
.54
    
$
.67
    
$
1.99
    
$
1.63
    
                                   

 
5
 


 
(a) Includes straight-line rent and market rent adjustments of $644 and $957 for the three months ended and $2,221 and $2,924 for the nine months ended September 30, 2009 and 2008, respectively.
 
(b) Includes gain on sale of outparcel of land of $3,292 for the three and nine months ended September 30, 2009.
 
(c) Represents accelerated vesting of restricted shares and accrual of cash severance payment to Stanley K. Tanger who retired from the Company during September 2009.
 
(d) 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.
 
(e) 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 nine months ended September 30, 2008 related to the repayment of a mortgage which had a principal balance of $170.7 million.
 
(f) 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.
 
(g) 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.

 
6
 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
                         
   
September 30,
  
December 31,
  
   
2009
  
2008
  
   
(Unaudited)
  
(Unaudited)
  
ASSETS:
                  
 
Rental property
                  
   
Land
  
$
135,605
    
$
135,689
    
   
Buildings, improvements and fixtures
    
1,349,310
      
1,260,243
    
   
Construction in progress
    
---
      
3,823
    
     
1,484,915
      
1,399,755
    
   
Accumulated depreciation
    
(396,508
)
    
(359,301
)
  
   
Rental property, net
    
1,088,407
      
1,040,454
    
 
Cash and cash equivalents
    
4,401
      
4,977
    
 
Investments in unconsolidated joint ventures
    
9,569
      
9,496
    
 
Deferred charges, net
    
41,572
      
37,750
    
 
Other assets
    
32,646
      
29,248
    
 
Total assets
  
 $
1,176,595
    
 $
1,121,925
    
 
LIABILITIES AND EQUITY:
Liabilities
                  
 
Debt
                  
 
Senior, unsecured notes (net of discount of $917 and $9,137 respectively)
  
$
256,293
    
$
390,363
    
 
Mortgages payable (net of discount of $554 and $0, respectively)
    
35,246
      
---
    
 
Unsecured term loan
    
235,000
      
235,000
    
 
Unsecured lines of credit
    
54,000
      
161,500
    
 
Total debt
    
580,539
      
786,863
    
Construction trade payables
    
7,957
      
11,968
    
Accounts payable and accrued expenses
    
34,235
      
26,277
    
Other liabilities
    
28,864
      
30,914
    
 
Total liabilities
    
651,595
      
856,022
    
                   
Commitments
                  
                   
Equity
                  
Tanger Factory Outlet Centers, Inc. 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, 2009
                  
 
and December 31, 2008
    
75,000
      
75,000
    
 
Common shares, $.01 par value, 150,000,000 shares authorized,
                  
 
40,278,284 and 31,667,501 shares issued and outstanding
                  
 
at September 30, 2009 and December 31, 2008, respectively
    
403
      
317
    
 
Paid in capital
    
595,240
      
371,190
    
 
Distributions in excess of earnings
    
(197,725
)
    
(201,679
)
  
 
Accumulated other comprehensive loss
    
(6,824
)
    
(9,617
)
  
 
Equity attributable to Tanger Factory Outlet Centers, Inc.
  
466,094
      
235,211
    
Equity attributable to noncontrolling interest in Operating Partnership
  
58,906
      
30,692
    
 
Total equity
  
525,000
      
265,903
    
 
Total liabilities and equity
  
$
1,176,595
    
$
1,121,925
    
                   


 
7
 

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,
   
                2009
  
                  2008
  
             2009
  
                   2008
FUNDS FROM OPERATIONS (a)
                                  
 
Net income
 
$
4,364
    
$
11,343
    
$
54,419
    
$
19,359
    
 
Adjusted for:
                                  
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – consolidated
    
20,088
      
15,219
      
59,896
      
45,335
    
 
Depreciation and amortization uniquely significant to
                                  
 
real estate – unconsolidated joint ventures
    
1,239
      
635
      
3,628
      
1,938
    
 
Gain on fair value measurement of previously held
                                  
 
interest in acquired joint venture
    
---
      
---
      
(31,497
)
    
---
    
 
Funds from operations (FFO)
    
25,691
      
27,197
      
86,446
      
66,632
    
 
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(4,219
)
    
(4,219
)
  
 
Allocation of earnings to participating securities
    
(302
)
    
(349
)
    
(1,053
)
    
(793
)
  
 
Funds from operations available to common
                                 
 
shareholders
  
$
23,983
    
$
25,442
    
$
81,174
    
$
61,620
    
 
Funds from operations available to common
                                 
 
shareholders per share – diluted
  
$
.54
    
$
.67
    
$
1.99
    
$
1.63
    
                                   
WEIGHTED AVERAGE SHARES
                                  
 
Basic weighted average common shares
    
38,063
      
31,129
      
34,552
      
31,059
    
 
Effect of exchangeable notes
    
7
      
487
      
7
      
487
    
 
Effect of outstanding options
    
75
      
123
      
79
      
149
    
 
Diluted weighted average common shares (for earnings
                                  
 
per share computations)
    
38,145
      
31,739
      
34,638
      
31,695
    
 
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)
    
44,212
      
37,806
      
40,705
      
37,762
    
                                   
OTHER INFORMATION
                                  
Gross leasable area open at end of period -
                                  
 
Wholly owned
    
9,222
      
8,823
      
9,222
      
8,823
    
 
Partially owned – unconsolidated
   
950
      
667
      
950
      
667
    
                                   
Outlet centers in operation -
                                 
 
Wholly owned
    
31
      
30
      
31
      
30
    
 
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)
    
95.6
%
    
96.7
%
    
95.6
%
    
96.7
%
  
                                   


 
8
 


(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 periods 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.

 
 
 
 
 
 
9
 EX-99.2 3 tfoc8k10272009ex99-2.htm EXHIBIT 99.2 tfoc8k10272009ex99-2.htm


Tanger Factory Outlet Centers, Inc.


Supplemental Operating and Financial Data

September 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 September 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 September 30, 2009
 
State
 
# of Centers
 
GLA
 
% of GLA
South Carolina
4
1,549,800
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
557,235
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
9,221,963
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
9/30/09
%     
Occupied
9/30/09
%    
Occupied
6/30/09
%     
Occupied
3/31/09
%     
Occupied
12/31/08
%      
Occupied
9/30/008
Riverhead, NY
729,315
99%
98%
97%
98%
99%
Rehoboth, DE
568,868
99%
99%
97%
100%
100%
Foley, AL
557,235
91%
91%
91%
93%
94%
San Marcos, TX
442,006
100%
99%
97%
99%
99%
Myrtle Beach Hwy 501, SC
426,417
90%
88%
86%
92%
92%
Sevierville, TN
419,038
100%
100%
98%
100%
100%
Myrtle Beach Hwy 17, SC (2)
402,442
100%
99%
97%
100%
100%
Washington, PA
370,525
88%
86%
82%
85%
86%
Commerce II, GA
370,512
96%
95%
93%
96%
98%
Hilton Head, SC
368,626
90%
85%
85%
88%
88%
Charleston, SC
352,315
96%
95%
91%
97%
95%
Howell, MI
324,631
95%
94%
94%
98%
97%
Branson, MO
302,992
100%
100%
98%
100%
100%
Park City, UT
298,379
100%
99%
99%
100%
98%
Locust Grove, GA
293,868
100%
97%
95%
99%
100%
Westbrook, CT
291,051
97%
91%
94%
99%
99%
Gonzales, LA
282,403
99%
100%
99%
100%
100%
Williamsburg, IA
277,230
94%
96%
91%
99%
100%
Lincoln City, OR
270,280
100%
99%
94%
98%
100%
Tuscola, IL
256,469
81%
79%
78%
83%
80%
Lancaster, PA
255,152
99%
97%
97%
100%
100%
Tilton, NH
245,563
99%
97%
96%
100%
100%
Fort Myers, FL
198,950
89%
92%
95%
96%
92%
Commerce I, GA
185,750
58%
63%
58%
74%
72%
Terrell, TX
177,800
94%
94%
94%
100%
100%
Barstow, CA
171,300
100%
100%
100%
100%
100%
West Branch, MI
112,120
96%
96%
96%
100%
100%
Blowing Rock, NC
104,235
100%
100%
100%
100%
100%
Nags Head, NC
82,178
97%
97%
97%
97%
100%
Kittery I, ME
59,694
100%
100%
100%
100%
100%
Kittery II, ME
24,619
100%
100%
100%
100%
100%
Total
9,221,963
   96% (1)
   95% (1)
   94% (1)
   97% (1) (2)
   97% (1) (2)

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


(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)


 
 96%    95%    94%     97%    97%    96%     98%    97%
09/09    06/09    03/09    12/08    09/08    03/08    12/07    09/07   





 
(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 September 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%
Dress Barn, Inc.
57
343,106
3.7%
Nike
27
313,660
3.4%
VF Outlet, Inc
32
304,957
3.3%
Adidas
34
290,124
3.1%
Liz Claiborne
34
269,390
2.9%
Carter’s
47
229,505
2.5%
Jones Retail Corporation
73
203,071
2.2%
Polo Ralph Lauren
23
197,669
2.2%
Total of All Listed Above
490
3,359,610
36.4%


 
(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 September 30, 2009

 

Percentage of Total Gross Leasable Area (1)
 


2009     2010     2011     2012     2013     2014     2015     2016     2017       2018    2019+
2.00%    16.00%    19.00%    18.00%    17.00%    11.00%        3.00%      3.00%      3.00%    3.00%          5.00%


Percentage of Total Annualized Base Rent (1)



2009     2010     2011     2012     2013     2014     2015     2016     2017       2018    2019+
2.00%    14.00%    17.00%    17.00%    18.00%    11.00%        3.00%      3.00%      4.00%    5.00%          6.00%




 
(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
48
25
16
  
89
119
    Gross leasable area
179,661
73,361
65,847
  
318,869
480,694
    New initial base rent per square foot
$24.98
$29.12
$20.11
  
$24.93
$24.35
    Prior expiring base rent per square foot
$18.95
$21.10
$18.13
  
$19.27
$18.32
    Percent increase
31.8%
38.0%
10.9%
  
29.3%
32.9%
             
    New straight line base rent per square foot
$26.33
$30.35
$20.90
  
$26.13
$25.83
    Prior straight line base rent per square foot
$18.51
$21.40
$17.76
  
$19.02
$17.96
    Percent increase
42.2%
41.8%
17.6%
  
37.4%
43.8%
             
Renewed Space:
            
    Number of leases
162
50
18
  
230
232
    Gross leasable area
806,051
226,250
81,078
  
1,113,379
1,039,846
    New initial base rent per square foot
$18.05
$17.16
$15.89
  
$17.71
$19.62
    Prior expiring base rent per square foot
$16.20
$17.26
$17.27
  
$16.49
$17.24
    Percent increase
11.4%
-0.6%
-8.0%
  
7.4%
13.8%
             
   New straight line base rent per square foot
$18.42
$17.39
$15.89
  
$18.02
$20.24
    Prior straight line base rent per square foot
$16.08
$17.09
$17.22
  
$16.37
$17.20
    Percent increase
14.5%
1.8%
-7.7%
  
10.1%
17.6%
             
Total Re-tenanted and Renewed Space:
            
    Number of leases
210
75
34
  
319
351
    Gross leasable area
985,712
299,611
146,925
  
1,432,248
1,520,540
    New initial base rent per square foot
$19.31
$20.09
$17.78
  
$19.32
$21.11
    Prior expiring base rent per square foot
$16.70
$18.20
$17.66
  
$17.11
$17.58
    Percent increase
15.6%
10.4%
0.7%
  
12.9%
20.1%
             
    New straight line base rent per square foot
$19.86
$20.56
$18.14
  
$19.83
$22.00
    Prior straight line base rent per square foot
$16.52
$18.15
$17.46
  
$16.96
$17.44
    Percent increase
20.2%
13.3%
3.9%
  
16.9%
26.2%

(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)
 
 
 
        9/30/09 
6/30/09
3/31/09
12/31/08
9/30/08
Assets
          
   Rental property
          
       Land
$135,605
$135,708
$135,710
$135,689
$135,688
       Buildings
1,349,310
1,343,854
1,348,211
1,260,243
1,233,906
       Construction in progress
---
---
4,805
3,823
16,377
   Total rental property
1,484,915
1,479,562
1,488,726
1,399,755
1,385,971
       Accumulated depreciation
(396,508)
(379,412)
(374,541)
(359,301)
(345,577)
   Total rental property – net
1,088,407
1,100,150
1,114,185
1,040,454
1,040,394
   Cash & cash equivalents
4,401
5,150
3,101
4,977
3,753
   Investments in unconsolidated jointventures
9,569
9,808
9,773
9,496
12,184
   Deferred charges – net
41,572
43,746
48,294
37,750
39,644
   Other assets
32,646
31,771
34,010
29,248
28,811
Total assets
$1,176,595
$1,190,625
$1,209,363
$1,121,925
$1,124,786
Liabilities & equity
      
  Liabilities
          
    Debt
          
       Senior, unsecured notes, net of discount
$256,293
$256,235
$391,133
$390,363
$389,605
       Unsecured term loan
235,000
235,000
235,000
235,000
235,000
       Mortgages payable, net of discount
35,246
34,938
34,634
---
---
       Unsecured lines of credit
      54,000
      188,250
      188,400
      161,500
      149,500
    Total debt
580,539
714,423
849,167
786,863
774,105
    Construction trade payables
7,957
6,327
9,070
11,968
22,840
    Accounts payable & accruals
34,235
25,103
27,777
26,277
30,789
   Other liabilities
28,864
32,152
33,868
30,914
15,784
  Total liabilities
651,595
778,005
919,882
856,022
843,518
Equity
          
  Tanger Factory Outlet Centers, Inc. equity
          
    Preferred shares
75,000
75,000
75,000
75,000
75,000
    Common shares
403
368
319
317
317
    Paid in capital
595,240
482,532
372,762
371,190
369,999
    Distributions in excess of net income
(197,725)
(186,202)
(184,349)
(201,679)
(197,140)
    Accum. other comprehensive loss
(6,824)
(6,879)
(8,533)
(9,617)
(73)
  Total Tanger Factory Outlet Centers, Inc. equity
466,094
364,819
255,199
235,211
248,103
  Noncontrolling interest
       58,906
       47,801
       34,282
       30,692
       33,165
Total equity
525,000
412,620
289,481
265,903
281,268
Total liabilities and equity
$1,176,595
$1,190,625
$1,209,363
$1,121,925
$1,124,786
 
 
 
10
 
Consolidated Statements of Operations (dollars and shares in thousands)

   
Three Months Ended
    
YTD
  
      09/09       06/09       03/09       12/08       09/08       09/09       09/08  
Revenues
                                                        
   Base rentals
   $ 44,160     $ 43,425     $ 42,927     $ 42,694     $ 40,519     $ 130,512     $ 116,374  
   Percentage rentals
     1,442       940       1,308       2,949       1,811       3,690       4,109  
   Expense reimbursements
     19,069       18,374       19,219       20,557       18,277       56,662       51,447  
   Other income
     5,646       1,928       1,704       2,137       2,166       9,278       5,124  
      Total revenues
     70,317       64,667       65,158       68,337       62,773       200,142       177,054  
Expenses
                                                        
   Property operating
     21,353       20,794       21,748       21,139       20,091       63,895       56,835  
   General & administrative
     5,467       5,820       5,935       5,099       6,217       17,222       17,165  
   Executive severance
     10,296       ---       ---       ---       ---       10,296       ---  
   Depreciation & amortization
     20,213       19,652       20,397       16,736       15,320       60,262       45,593  
   Impairment charge
     ---       5,200       ---       ---       ---       5,200       ---  
   Abandoned due diligence costs
     ---       ---       ---       3,336       587       ---       587  
      Total expenses
     57,329       51,466       48,080       46,310       42,215       156,875       120,180  
Operating income
     12,988       13,201       17,078       22,027       20,558       43,267       56,874  
   Interest expense
     (8,692 )     (9,564 )     (11,210 )     (10,972 )     (9,811 )     (29,466 )     (30,153 )
   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 )
Income before equity in earnings (losses) of
   unconsolidated joint ventures
      4,296        14,104        37,365        11,055        10,747        55,765        17,811  
Equity in earnings (losses) of unconsolidated
   joint ventures
      68       (517 )     (897 )     (696 )      596       (1,346 )      1,548  
Net income
     4,364       13,587       36,468       10,359       11,343       54,419       19,359  
Non-controlling interest
     (407 )     (1,833 )     (5,698 )     (1,459 )     (1,621 )     (7,938 )     (2,473 )
Net income attributable to
                                                        
   the Company
     3,957       11,754       30,770       8,900       9,722       46,481       16,886  
Less applicable preferred share dividends
     (1,406 )     (1,407 )     (1,406 )     (1,406 )     (1,406 )     (4,219 )     (4,219 )
Allocation to participating securities
     (207 )     (179 )     (437 )     (195 )     (195 )     (639 )     (529 )
Net income available to common
   shareholders
   $ 2,344     $ 10,168     $ 28,927     $ 7,299     $ 8,121     $ 41,623     $ 12,138  
Basic earnings per common share:
                                                        
   Income from continuing operations
   $ .06     $ .30     $ .93     $ .23     $ .26     $ 1.20     $ .39  
   Net income
   $ .06     $ .30     $ .93     $ .23     $ .26     $ 1.20     $ .39  
Diluted earnings per common share:
                                                        
   Income from continuing operations
   $ .06     $ .30     $ .92     $ .23     $ .26     $ 1.20     $ .38  
   Net income
   $ .06     $ .30     $ .92     $ .23     $ .26     $ 1.20     $ .38  
Weighted average common shares:
                                                        
   Basic
     38,063       34,249       31,269       31,160       31,129       34,552       31,059  
   Diluted
     38,145       34,327       31,350       31,258       31,739       34,638       31,695  
 


 
11
 

FFO and FAD Analysis (dollars and shares in thousands)
   
Three Months Ended
    
YTD
  
      09/09       06/09       03/09       12/08       09/08       09/09       09/08  
Funds from operations:
                                                        
   Net income
   $ 4,364     $ 13,587     $ 36,468     $ 10,359     $ 11,343     $ 54,419     $ 19,359  
   Adjusted for -
                                                        
      Depreciation and amortization
        uniquely significant to real estate –
       wholly-owned
       20,088         19,530         20,278         16,630         15,219         59,896         45,335  
      Depreciation and amortization
        uniquely significant to real estate –
        joint ventures
        1,239          1,223          1,166          1,227          635          3,628          1,938  
      (Gain) on fair value measurement of
        previously held interest in
        acquired joint venture
        --          --       (31,497 )        --          --         (31,497 )        --  
Funds from operations
     25,691       34,340       26,415       28,216       27,197       86,446       66,632  
Preferred share dividends
     (1,406 )     (1,407 )     (1,406 )     (1,406 )     (1,406 )     (4,219 )     (4,219 )
Allocation to participating securities
     (302 )     (452 )     (306 )     (361 )     (349 )     (1,053 )     (793 )
Funds from operations available to
       common shareholders
   $ 23,983     $ 32,481     $ 24,703     $ 26,449     $ 25,442     $ 81,174     $ 61,620  
Funds from operations per share
   $ .54     $ .80     $ .66     $ .71     $ .67     $ 1.99     $ 1.63  
Funds available for distribution to
   common shareholders:
                                                        
   Funds from operations
   $ 23,983     $ 32,481     $ 24,703     $ 26,449     $ 25,442     $ 81,174     $ 61,620  
   Adjusted for -
                                                        
      Corporate depreciation
          excluded above
      125        122        119        106        101        366        258  
      Amortization of finance costs
     348       357       465       474       444       1,170       1,157  
      Amortization of net debt discount
           premium
     (21 )     (76 )      1,070        758        747        972        1,161  
     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  
      Amortization of share compensation
     8,080       1,592       1,297       1,368       1,404       10,969       4,024  
      Straight line rent adjustment
     (421 )     (757 )     (777 )     (499 )     (822 )     (1,955 )     (2,696 )
      Market rent adjustment
     (223 )     (121 )     78       (128 )     (135 )     (266 )     (228 )
      2nd generation tenant allowances
     (807 )     (2,834 )     (2,371 )     (3,042 )     (3,088 )     (6,012 )     (9,966 )
      Capital improvements
     (2,008 )     (3,107 )     (2,761 )     (6,736 )     (12,062 )     (7,876 )     (24,111 )
Funds available for distribution
   $ 29,056     $ 22,390     $ 21,823     $ 18,750     $ 12,031     $ 73,275     $ 40,129  
Funds available for distribution
   per share
   $ .66     $ .55     $ .58     $ .50     $ .32     $ 1.80     $ 1.06  
Dividends paid per share
   $ .3825     $ .3825     $ .38     $ .38     $ .38     $ 1.145     $ 1.12  
FFO payout ratio
     71 %     48 %     58 %     54 %     57 %     58 %     69 %
FAD payout ratio
     58 %     70 %     66 %     76 %     119 %     64 %     106 %
Diluted weighted average common shs.
     44,212       40,394       37,417       37,324       37,806       40,705       37,762  

 
12
 
Unconsolidated Joint Venture Information – All
Summary Balance Sheets (dollars in thousands)
 
 
 
9/30/09
 
 
6/30/09
 
 
3/31/09
 
 
12/31/08
 
 
9/30/08
  
Tanger’s
Share as of
9/30/09
Assets
              
   Investment properties at cost – net
$294,220
$291,166
$288,951
$323,546
$72,118
  
$103,531
   Construction in progress
---
---
---
---
226,031
  
---
   Cash and cash equivalents
8,151
5,880
13,195
5,359
4,104
  
3,363
   Deferred charges – net
5,438
5,685
6,307
7,025
6,041
  
1,878
   Other assets
5,302
4,549
4,399
6,324
7,853
  
1,854
Total assets
$313,111
$307,280
$312,852
$342,254
$316,147
  
$110,626
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$292,468
$288,169
$288,169
$303,419
$259,789
  
$101,698
    Construction trade payables
2,523
1,651
3,356
13,641
26,750
  
848
    Accounts payable & other liabilities
2,841
1,825
6,998
9,479
6,845
  
1,062
Total liabilities
297,832
291,645
298,523
326,539
293,384
  
103,608
Owners’ equity
15,279
15,635
14,329
15,715
22,763
  
7,018
Total liabilities & owners’ equity
$313,111
$307,280
$312,852
$342,254
$316,147
  
$110,626

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
09/09
06/09
03/09
12/08
09/08
09/09
09/08
Revenues
$    9,152
$  8,431
$  8,524
$ 10,573
$5,582
$26,107
$15,370
Expenses
              
   Property operating
4,103
3,611
4,247
6,679
2,128
11,961
5,650
   General & administrative
111
117
189
403
90
417
188
   Depreciation & amortization
3,427
3,358
3,174
3,022
1,302
9,959
3,991
     Total expenses
7,641
7,086
7,610
10,104
3,520
22,337
9,829
Operating income
1,511
1,345
914
469
2,062
3,770
5,541
   Interest expense
1,553
3,079
3,731
3,414
932
8,363
2,592
Net income (loss)
$      (42)
$(1,734)
$(2,817)
$(2,945)
$1,130
$(4,593)
$ 2,949
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,845
 
 
$   1,751
 
 
$   1,534
 
 
$ 1,808
 
 
$1,692
 
 
$   5,130
 
 
$ 4,775
       Net income
$        68
$   (517)
$   (897)
$ (696)
$  596
$(1,346)
$ 1,548
       Depreciation (real estate related)
$   1,239
$   1,223
$   1,166
$ 1,227
$  635
$   3,628
$ 1,938

 
13
 

 Unconsolidated Joint Venture Information – Wisconsin Dells
Summary Balance Sheets (dollars in thousands)
 
 
 
09/30/09
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
 
 
09/30/08
  
Tanger’s
Share as of
09/30/09
Assets
              
   Investment properties at cost - net
$32,598
$33,165
$33,718
$34,068
$34,426
  
$16,299
   Cash and cash equivalents
3,846
3,312
2,436
2,352
1,210
  
1,923
   Deferred charges – net
390
444
493
528
575
  
195
   Other assets
522
527
589
533
582
  
261
Total assets
$37,356
$37,448
$37,236
$37,481
$36,793
  
$18,678
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$25,250
$25,250
$25,250
$25,250
$25,250
  
$12,625
    Construction trade payables
39
199
199
199
--
  
20
    Accounts payable & other liabilities
696
787
654
816
725
  
347
Total liabilities
25,985
26,236
26,103
26,265
25,975
  
12,992
Owners’ equity
11,371
11,212
11,133
11,216
10,818
  
5,686
Total liabilities & owners’ equity
$37,356
$37,448
$37,236
$37,481
$36,793
  
$18,678

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
09/09
06/09
03/09
12/08
09/08
09/09
09/08
Revenues
$1,780
$1,785
$1,771
$2,644
$1,903
$5,336
$5,546
Expenses
              
   Property operating
590
661
685
694
582
1,936
1,909
   General & administrative
4
13
3
6
2
20
11
   Depreciation & amortization
615
613
613
615
610
1,841
1,823
     Total expenses
1,209
1,287
1,301
1,315
1,194
3,797
3,743
Operating income
571
498
470
1,329
709
1,539
1,803
   Interest expense
112
118
134
272
266
364
876
Net income
$  459
$  380
$  336
$1,057
$  443
$  1,175
$  927
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$  593
 
 
$  556
 
 
$  541
 
 
$  971
 
 
$  659
 
 
$1,690
 
 
$1,813
       Net income
$  238
$  201
$  177
$  538
$  232
$  616
$  495
       Depreciation (real estate related)
      $  299
      $  296
      $  297
      $  296
      $  295
    $  892
      $  881

 
14
 

Unconsolidated Joint Venture Information – Deer Park
Summary Balance Sheets (dollars in thousands)
 
 
 
09/30/09
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
 
 
09/30/08
  
Tanger’s
Share as of
09/30/09
Assets
              
   Investment properties at cost - net
$   261,474
$   257,868
 $255,174
$ 255,885
$   3,443
  
$  87,158
   Construction in progress
---
---
---
---
226,031
  
---
   Cash and cash equivalents
4,273
2,526
10,645
2,093
1,141
  
1,424
   Deferred charges – net
5,048
5,241
5,814
5,895
4,822
  
1,683
   Other assets
4,780
4,022
3,810
3,632
5,039
  
1,593
Total assets
$275,575
$269,657
$275,443
$267,505
$240,476
  
 $ 91,858
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$267,218
$262,919
$262,919
$242,369
$198,739
  
$ 89,073
    Construction trade payables
2,484
1,452
3,157
13,182
25,859
  
828
    Accounts payable & other liabilities
2,136
1,034
6,344
6,414
4,343
  
711
Total liabilities
271,838
265,405
272,420
261,965
228,941
  
90,612
Owners’ equity
3,737
4,252
3,023
5,540
11,535
  
1,246
Total liabilities & owners’ equity
$275,575
$269,657
$275,443
$267,505
$240,476
  
$  91,858

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
09/09
06/09
03/09
12/08
09/08
09/09
09/08
Revenues
$7,372
$6,646
$6,753
$4,855
$ 450
$20,771
$  513
Expenses
              
   Property operating
3,513
2,950
3,562
4,852
424
10,025
428
   General & administrative
107
104
186
376
84
397
139
   Depreciation & amortization
2,807
2,727
2,539
1,652
20
8,073
24
     Total expenses
6,427
5,781
6,287
6,880
528
18,495
591
Operating income
945
865
466
(2,025)
(78)
2,276
(78)
   Interest expense
1,441
2,961
3,597
2,588
30
7,999
36
Net income (loss)
$(496)
$(2,096)
$(3,131)
$(4,613)
$(108)
$(5,723)
$(114)
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,252
 
 
$   1,196
 
 
$   1,002
 
 
$   (123)
 
 
$  (18)
 
 
$   3,450
 
 
$  (18)
       Net income (loss)
$   (169)
$   (718)
$(1,065)
$(1,540)
$  (36)
$(1,952)
$  (38)
       Depreciation (real estate related)
$      941
$      927
$     869
$     554
       $      7
$   2,736
$       8

 
15
 

Debt Outstanding Summary (dollars in thousands)

As of September 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)
54,000
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
(1,471)
    
Total consolidated debt
$580,539
    
Tanger’s share of unconsolidated JV debt:
      
   Wisconsin Dells
12,625
Libor + 1.30%
02/24/10
Deer Park (5)
89,073
Libor + 1.375 – 3.50%
5/17/11
Total Tanger’s share of unconsolidated JV debt
$101,698
    
 
(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 five lines of credit with a borrowing capacity totaling $325.0 million, of which $285.0 million expires on June 30, 2011 and $40.0 million expires on August 30, 2011.
(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 September 30, 2009, the unamortized discount on the remaining $7.2 million in exchangeable notes totaled $298,000.
(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 September 30, 2009, the outstanding principle balances of the senior and mezzanine loans were $249.9 million and $15.0 million, respectively, and $19.1 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 September 30, 2009, the outstanding principle balance under this mortgage was $2.3 million.

 
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Future Scheduled Principal Payments (dollars in thousands)

As of September 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
289,000
89,073
378,073
2012
--
--
--
2013
--
--
--
2014
--
--
--
2015
250,000
--
250,000
2016
--
--
--
2017
--
--
--
2018 & thereafter
(1) 7,210
--
7,210
 
$582,010
$101,698
$683,708
Net Discount on Debt
 (1,471)
--
(1,471)
 
$580,539
$101,698
$682,237
 
Senior Unsecured Notes Financial Covenants (2)

As of September 30, 2009
 
Required
Actual
Compliance
Total Consolidated Debt to Adjusted Total Assets
60%
  36%
Yes
Total Secured Debt to Adjusted Total Assets
40%
  2%
Yes
Total Unencumbered Assets to Unsecured Debt
135%
277%
Yes
Consolidated Income Available for Debt Service to      
                  Annual Debt Service Charge
 
2.00
 
3.88
 
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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