-----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, EUHuIy18Wp1m/qxejG3rbZsTDsLqHnefbMGa4YCWAZ+V/6wXMxFwdQvHXfTvrE4H H7D8Dd3JaOpsA1G2mAsGLA== 0000899715-10-000009.txt : 20100223 0000899715-10-000009.hdr.sgml : 20100223 20100223162051 ACCESSION NUMBER: 0000899715-10-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20091231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100223 DATE AS OF CHANGE: 20100223 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: 10626200 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 tfoc8k12312009.htm TFOC 8-K tfoc8k12312009.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):  February 23, 2010


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


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


             3200 Northline Avenue, Greensboro, North Carolina 27408             
(Address of principal executive offices) (Zip Code)
 
                           (336) 292-3010                                
(Registrants’ telephone number, including area code)
 
                           N/A                                
(former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange
 
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 


 
Item 2.02                 Results of Operations and Financial Condition
 
On February 23, 2010, Tanger Factory Outlet Centers, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition as of and for the quarter ended December 31, 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 February 23, 2010, the Company made publicly available certain supplemental operating and financial information for the quarter ended December 31, 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 December 31, 2009.

 
Exhibit 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 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:  February 23, 2010

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 December 31, 2009.

 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 2009.


 EX-99.1 2 tfoc8k12312009ex99-1.htm EXHIBIT 99.1 tfoc8k12312009ex99-1.htm

Tanger Factory Outlet Centers, Inc.

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

TANGER REPORTS YEAR END RESULTS FOR 2009
17.0% Increase in Adjusted Total FFO
3.4% Increase in Adjusted FFO per share

Greensboro, NC, February 23, 2010, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported its financial results for the quarter and year ended December 31, 2009.  Funds from operations available to common shareholders (“FFO”), a widely accepted supplemental measure of REIT performance, for the three months ended December 31, 2009, was $32.8 million, or $0.71 per share, as compared to FFO of $26.4 million, or $0.71 per share, for the three months ended December 31, 2008.  For the year ended December 31, 2009, FFO was $114.0 million, or $2.71 per share, as compared to FFO of $88.1 million, or $2.36 per share, for the year ended December 31, 2008.

Steven B. Tanger, President and Chief Executive Officer, commented, “2009 was a challenging year in the retail real estate industry.  Fortunately the majority of our tenants have remained financially strong during these difficult economic times and are showing increased profits and improved sales.  We are pleased with the strides that we made during the year.  Our balance sheet remains conservatively positioned and our dividend is well covered by our operating cash flow.”

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

   
                           Three Months Ended
                                Years Ended
   
                           December 31,
                                  December 31,
   
2009
2008
2009
2008
FFO as reported
 
$   32,788
$  26,449
$  113,958
$  88,066
As adjusted for:
          
 
US Treasury lock settlements
  
---
---
---
8,910
 
Prepayment premium
  
---
---
---
406
 
Abandoned due diligence costs
  
797
3,336
797
3,923
 
Impairment charge
  
---
---
5,200
---
 
Gain on early extinguishment of debt
  
---
---
 (10,467)
---
 
Executive severance
  
---
---
10,296
---
 
Gain on sale of outparcel
  
---
---
(3,292)
---
 
Termination fees
  
(99)
(1,747)
(1,529)
(2,904)
 
Impact of above adjustments to the allocation
          
   
of earnings to participating securities
  
(5)
(22)
(11)
(137)
FFO as adjusted
  
$  33,481
$ 28,016
$ 114,952
$ 98,264
Diluted weighted average common shares
  
46,110
37,324
42,079
37,287
FFO per share as adjusted
  
$        .73
$       .75
$       2.73
$     2.64

Excluding these charges, adjusted FFO for the fourth quarter and year ended December 31, 2009 would have been $0.73 and $2.73 per share respectively, while FFO for the fourth quarter and year ended December 31, 2008 would have been $0.75 and $2.64 per share respectively.

 
 
 
Net income available to common shareholders for the three months ended December 31, 2009 was $10.0 million, or $0.25 per share, compared to $7.3 million, or $0.23 per share for the three months ended December 31, 2008.  Net income available to common shareholders for the year ended December 31, 2009 was $51.7 million, or $1.44 per share, compared to $19.4 million, or $0.62 per share for the year ended December 31, 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 year ended December 31, 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 release.

Highlights of Achievements for 2009

 
·  
Dividend increase approved by Board of Directors to raise the quarterly common share cash dividend from $0.38 to $0.3825 per share, $1.53 per share annualized, representing the 16th consecutive year of increased dividends
 
·  
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
 
·  
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
 
·  
23.7% debt-to-total market capitalization ratio, compared to 34.5% last year
 
·  
5.17 times interest coverage ratio for the three months ended December 31, 2009 compared to 3.84 times last year
 
·  
9.7% average increase in base rental rates on 1,218,000 square feet of signed renewals
 
·  
30.9% average increase in base rental rates on 305,000 square feet of re-leased space
 
·  
1.4% increase in same center net operating income for the year
 
·  
96.0% occupancy rate for wholly-owned properties, up 0.4% from September 30, 2009
 
·  
$339 per square foot in reported same-space tenant sales for the rolling twelve months ended December 31, 2009

Successful Financing Activities in 2009 Provide Additional Liquidity

On April 9, 2009, Tanger’s Board of Directors approved an increase in the annual cash dividend on its common shares from $1.52 per share to $1.53 per share.  Tanger has increased its dividend each year since becoming a public company in May of 1993.

On May 11, 2009, Tanger successfully closed 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.

 
 
 
On August 14, 2009, Tanger successfully completed 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.  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 December 31, 2009, Tanger had a total market capitalization of approximately $2.5 billion including $584.6 million of debt outstanding, equating to a 23.7% debt-to-total market capitalization ratio.  As of December 31, 2009, 90.0% of Tanger’s debt was at fixed interest rates and the company had $57.7 million outstanding on its $325.0 million in available unsecured lines of credit.  During the fourth quarter of 2009, Tanger continued to maintain a strong interest coverage ratio of 5.17 times, compared to 3.84 times during the fourth quarter of last year.

National Platform Continues to Drive Operating Results

Tanger’s broad geographic representation and established brand name within the factory outlet industry continues to generate solid operating results.  The company’s portfolio of properties had a year-end occupancy rate of 96.0%, representing the 29th consecutive year since the company commenced operations in 1981 that it has achieved a year-end portfolio occupancy rate at or above 95%.  

During 2009, Tanger executed 359 leases, totaling 1,523,000 square feet relating to its existing, wholly-owned properties.  For the year, 1,218,000 square feet of renewals generated a 9.7% increase in average base rental rates, and represented 81.1% of the square feet originally scheduled to expire during 2009.  Average base rental rates on re-tenanted space during the year increased 30.9% and accounted for the remaining 305,000 square feet.

Tanger continues to derive its rental income from a diverse group of national brand name manufacturers and retailers with no single tenant accounting for more than 8.4% of its gross leasable area and 5.3% of its total base and percentage rentals.

Same center net operating income increased 0.3% for the fourth quarter and 1.4% for the year ended December 31, 2009 compared to the same periods in 2008.  This follows same center annual net operating income increases of 4.1% in 2008, 5.3% in 2007, 3.1% in 2006, 3.8% in 2005 and 1.2% in 2004.

Reported tenant comparable sales for the company’s wholly owned properties for the rolling twelve months ended December 31, 2009 increased 0.6% to $339 per square foot.  Reported tenant comparable sales for the three months ended December 31, 2009 increased 4.1%.  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.  Tanger’s average tenant occupancy cost as a percentage of average sales was 8.5% for 2009 compared to 8.2% in 2008, 7.7% in 2007, 7.4% in 2006, 7.5% in 2005 and 7.3% in 2004.  


 
 
 
Investment Activities Provide Potential Future Earnings Growth

On October 14, 2009, Tanger closed on its development site in Mebane, North Carolina and immediately began construction of the center which will total approximately 317,000 square feet.  Currently, Tanger has signed leases, or leases out for signature for approximately 73% of the total gross leasable area.  With an estimated total cost of approximately $64.9 million, and an anticipated return on cost of between 10.0% and 10.5%, the company expects the center to be open in time for the 2010 holiday season.

During the fourth quarter of 2009, Tanger engaged in due diligence activities associated with a potential acquisition, which ultimately did not come to fruition.  As a result, the company recorded a $797,000 charge relating to the net costs incurred associated with these due diligence activities.

Tanger Expects Solid FFO Per Share In 2010

Based on Tanger’s internal budgeting process, the company’s view 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 2010 will be between $0.82 and $0.92 per share and its FFO available to common shareholders for 2010 will be between $2.57 and $2.67 per share.  The company’s earnings estimates reflect $2.0 million in lost net operating income and demolition costs associated with its plans to redevelop one of its two properties located in Hilton Head, South Carolina beginning in April of 2010.  The earnings estimates also assume general and administrative expenses will average $6.0 million per quarter and include incremental expenses associated with a number of long-term strategic initiatives which the company will be announcing throughout the year, as well as the estimated compensation expense associated with the company’s new multi-year performance plan.  As a result of the common equity transactions during 2009, Tanger’s earnings estimates for 2010 assume there will be 46.2 million diluted weighted average common shares outstanding.  The company’s estimates do not include the impact of any rent termination fees, potential refinancing transactions, the sale of any out parcels of land, or the sale or acquisition of any properties.  The following table provides the reconciliation of estimated diluted net income per share to estimated diluted FFO per share:
    Low RangeHigh Range
Estimated diluted net income per common share               $  0.82 $  0.92
Noncontrolling interest, gain/loss on the sale of real estate,
depreciation and amortization uniquely
significant to real estate including noncontrolling interest
share and our share of joint ventures                  1.75               1.75
Estimated diluted FFO per share                         $    2.57           $  2.67

Year End Conference Call

Tanger will host a conference call to discuss its year end 2009 results for analysts, investors and other interested parties on Wednesday, February 24, 2010, at 10:00 A.M. eastern time.  To access the conference call, listeners should dial 1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers fourth quarter and year end 2009 financial results call.  Alternatively, the call will be web cast by Thomson Reuters 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 February 24, 2010 starting at 11:00 A.M. Eastern Time through 11:59 P.M., March 9, 2010, by dialing 1-800-642-1687 (conference ID # 51774519).  Additionally, an online archive of the broadcast will also be available through March 9, 2010.



 
 
 
 


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 manages for a fee and owns an interest in 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 December 31, 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 and redevelopment of existing 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 (and December 31, 2009, when available).

 
 
 


TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
         
   
              Three months ended
  
                  Year ended
   
                  December 31,
  
                   December 31,
   
               2009
  
              2008
  
          2009
  
        2008
REVENUES
                                  
 
Base rentals (a)
  
$
44,405
    
$
42,694
    
$
174,917
    
$
159,068
    
 
Percentage rentals
    
3,111
      
2,949
      
6,801
      
7,058
    
 
Expense reimbursements
    
22,027
      
20,557
      
78,689
      
72,004
    
 
Other income (b)
    
2,000
      
2,137
      
11,278
      
7,261
    
   
Total revenues
    
71,543
      
68,337
      
271,685
      
245,391
    
EXPENSES
                                  
 
Property operating
    
23,982
      
21,139
      
87,877
      
77,974
    
 
General and administrative
   
5,066
      
5,099
      
22,288
      
22,264
    
 
Executive severance (c)
    
---
      
---
      
10,296
      
---
    
 
Depreciation and amortization
    
20,239
      
16,736
      
80,501
      
62,329
    
 
Abandoned due diligence costs
    
797
      
3,336
      
797
      
3,923
    
 
Impairment charge (d)
    
---
      
---
      
5,200
      
---
    
   
Total expenses
    
50,084
      
46,310
      
206,959
      
166,490
    
Operating income
    
21,459
      
22,027
      
64,726
      
78,901
    
 
Interest expense (e)
    
(8,217
)
    
(10,972
)
    
(37,683
)
    
(41,125
)
  
 
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
    
13,242
      
11,055
      
69,007
      
28,866
    
Equity in earnings (losses) of unconsolidated
                                 
 
joint ventures
    
(166
)
    
(696
)
    
(1,512
)
    
852
    
Net income
    
13,076
      
10,359
      
67,495
      
29,718
    
Noncontrolling interest in Operating Partnership
    
(1,538
)
    
(1,459
)
    
(9,476
)
    
(3,932
)
  
Net income attributable to
                                 
 
Tanger Factory Outlet Centers, Inc.
    
11,538
      
8,900
      
58,019
      
25,786
    
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(5,625
)
    
(5,625
)
  
Allocation of earnings to participating securities
    
(121
)
    
(195
)
    
(701
)
    
(724
)
  
Net income available to common shareholders
                                  
 
of Tanger Factory Outlet Centers, Inc.
  
$
10,011
    
$
7,299
    
$
51,693
    
$
19,437
    
                                   
Basic earnings per common share:
                                  
 
Income from continuing operations
  
$
.25
    
$
.23
    
$
1.44
    
$
.63
    
 
Net income
 
$
.25
    
$
.23
    
$
1.44
    
$
.63
    
                                   
Diluted earnings per common share:
                                  
 
Income from continuing operations
  
$
.25
    
$
.23
    
$
1.44
    
$
.62
    
 
Net income
 
$
.25
    
$
.23
    
$
1.44
    
$
.62
    
                                   
Funds from operations available to
                                  
 
common shareholders (FFO)
  
$
32,788
    
$
26,449
    
$
113,958
    
$
88,066
    
FFO per common share – diluted
  
$
.71
    
$
.71
    
$
2.71
    
$
2.36
    
                                   


 
 
 


 
(a) Includes straight-line rent and market rent adjustments of $513 and $627 for the three months ended and $2,734 and $3,551 for the years ended December 31, 2009 and 2008, respectively.
 
(b) Includes gain on sale of outparcel of land of $3,292 which occurred in the third quarter of 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 charge for impairment of our Commerce I, Georgia center of approximately $5.2 million.
 
(e) In accordance with recent accounting guidance addressing “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 year ended December 31, 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 offer for approximately 4.9 million common shares in May 2009.
 
(g) Represents gain on fair value measurement of our previously held interest in the Myrtle Beach Hwy 17 joint venture upon acquisition on January 5, 2009.

 
 
 


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)

                         
   
             December 31,
  
                December 31,
  
   
           2009
  
                2008
  
   
           (Unaudited)
  
                (Unaudited)
  
ASSETS:
                  
 
Rental property
                  
   
Land
  
$
143,933
    
$
135,689
    
   
Buildings, improvements and fixtures
    
1,352,568
      
1,260,243
    
   
Construction in progress
    
11,369
      
3,823
    
     
1,507,870
      
1,399,755
    
   
Accumulated depreciation
    
(412,530
)
    
(359,301
)
  
   
Rental property, net
    
1,095,340
      
1,040,454
    
 
Cash and cash equivalents
    
3,267
      
4,977
    
 
Investments in unconsolidated joint ventures
    
9,054
      
9,496
    
 
Deferred charges, net
    
38,867
      
37,750
    
 
Other assets
    
32,333
      
29,248
    
 
Total assets
  
 $
1,178,861
    
 $
1,121,925
    
 
LIABILITIES AND EQUITY:
Liabilities
                  
 
Debt
                  
 
Senior, unsecured notes (net of discount of $858 and $9,137 respectively)
  
$
256,352
    
$
390,363
    
 
Mortgages payable (net of discount of $241 and $0, respectively)
    
35,559
      
---
    
 
Unsecured term loan
    
235,000
      
235,000
    
 
Unsecured lines of credit
    
57,700
      
161,500
    
 
Total debt
    
584,611
      
786,863
    
Construction trade payables
    
14,194
      
11,968
    
Accounts payable and accrued expenses
    
31,916
      
26,277
    
Other liabilities
    
27,077
      
30,914
    
 
Total liabilities
    
657,798
      
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 December 31, 2009
                  
 
and December 31, 2008
    
75,000
      
75,000
    
 
Common shares, $.01 par value, 150,000,000 shares authorized,
                  
 
40,277,124 and 31,667,501 shares issued and outstanding
                  
 
at December 31, 2009 and December 31, 2008, respectively
    
403
      
317
    
 
Paid in capital
    
596,074
      
371,190
    
 
Distributions in excess of earnings
    
(202,997
)
    
(201,679
)
  
 
Accumulated other comprehensive loss
    
(5,809
)
    
(9,617
)
  
 
Equity attributable to Tanger Factory Outlet Centers, Inc.
  
462,671
      
235,211
    
Equity attributable to noncontrolling interest in Operating Partnership
  
58,392
      
30,692
    
 
Total equity
  
521,063
      
265,903
    
 
Total liabilities and equity
  
$
1,178,861
    
$
1,121,925
    
                   

 
 
 


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(in thousands, except per share, state and center information)
(Unaudited)
         
   
                      Three months ended
  
              Year ended
   
                       December 31,
  
               December 31,
   
               2009
  
         2008
  
           2009
  
        2008
                   
FUNDS FROM OPERATIONS (a)
                                  
Net income
 
$
13,076
    
$
10,359
    
$
67,495
    
$
29,718
    
Adjusted for:
                                  
 
Depreciation and amortization uniquely significant to
                                  
   
real estate – consolidated
    
20,112
      
16,630
      
80,008
      
61,965
    
 
Depreciation and amortization uniquely significant to
                                  
   
real estate – unconsolidated joint ventures
    
1,231
      
1,227
      
4,859
      
3,165
    
 
Gain on fair value measurement of previously held
                                  
   
interest in acquired joint venture
                    
(31,497
)
    
---
    
Funds from operations (FFO)
    
34,419
      
28,216
      
120,865
      
94,848
    
Preferred share dividends
    
(1,406
)
    
(1,406
)
    
(5,625
)
    
(5,625
)
  
Allocation of earnings to participating securities
    
(225
)
    
(361
)
    
(1,282
)
    
(1,157
)
  
Funds from operations available to common shareholders
  
$
32,788
    
$
26,449
    
$
113,958
    
$
88,066
    
Funds from operations available to common
                                 
 
shareholders per share – diluted
  
$
.71
    
$
.71
    
$
2.71
    
$
2.36
    
                                   
WEIGHTED AVERAGE SHARES
                                  
Basic weighted average common shares
    
39,958
      
31,160
      
35,916
      
31,084
    
Effect of exchangeable notes
    
19
      
---
      
19
      
---
    
Effect of outstanding options
    
66
      
97
      
77
      
136
    
Diluted weighted average common shares (for earnings
   
40,043
      
31,257
      
36,012
      
31,220
    
 
per share computations)
                                  
Convertible operating partnership units (b)
    
6,067
      
6,067
      
6,067
      
6,067
    
Diluted weighted average common shares (for funds
                                 
 
from operations per share computations)
    
46,110
      
37,324
      
42,079
      
37,287
    
                                   
OTHER INFORMATION
                                  
Gross leasable area open at end of period -
                                  
 
Wholly owned
    
9,216
      
8,820
      
9,216
      
8,820
    
 
Partially owned – unconsolidated
   
950
      
1,352
      
950
      
1,352
    
                                   
Outlet centers in operation -
                                 
 
Wholly owned
    
31
      
30
      
31
      
30
    
 
Partially owned – unconsolidated
   
2
      
3
      
2
      
3
    
                                   
States operated in at end of period (c)
    
21
      
21
      
21
      
21
    
Occupancy percentage at end of period (c) (d)
    
96.0
%
    
96.6
%
    
96.0
%
    
96.6
%
  


 
 
 


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

                                 
(a) FFO is a non-GAAP financial measure.  The most directly comparable GAAP measure is net income (loss), to which it is reconciled.  We believe that for a clear understanding of our operating results, FFO should be considered along with net income as presented elsewhere in this report.  FFO is presented because it is a widely accepted financial indicator used by certain investors and analysts to analyze and compare one equity REIT with another on the basis of operating performance.  FFO is generally defined as net income (loss), computed in accordance with generally accepted accounting principles, before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plus depreciation and amortization uniquely significant to real estate and after adjustments for unconsolidated partnerships and joint ventures.  We caution that the calculation of FFO may vary from entity to entity and as such the presentation of FFO by us may not be comparable to other similarly titled measures of other reporting companies.  FFO does not represent net income or cash flow from operations as defined by accounting principles generally accepted in the United States of America and should not be considered an alternative to net income as an indication of operating performance or to cash flows from operations as a measure of liquidity.  FFO is not necessarily indicative of cash flows available to fund dividends to shareholders and other cash needs.
 
(b) The convertible operating partnership units (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 and Deer Park, New York properties for the 2009 and 2008 periods which were operated by us through 50% and 33.3% ownership joint ventures, respectively.  Excludes Myrtle Beach Hwy 17, South Carolina property for the 2008 period during which it was operated by us through a 50% ownership joint venture.  We acquired the remaining 50% interest in January 2009.
 
(d) Excludes our wholly-owned, non-stabilized center in Washington, Pennsylvania for the 2009 and 2008 periods.
 


 EX-99.2 3 tfoc8k12312009ex99-2.htm EXHIBIT 99.2 tfoc8k12312009ex99-2.htm


Tanger Factory Outlet Centers, Inc.


Supplemental Operating and Financial Data

December 31, 2009







 
 
 

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 December 31, 2009 when available) 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 December 31, 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
      
18
 
Senior Unsecured Notes Financial Covenants
      
18
         
Investor Information
      
19

 


 
3
 

Geographic Diversification


As of December 31, 2009
 
State
 
# of Centers
 
GLA
 
% of GLA
South Carolina
4
1,549,824
17%
Georgia
3
850,130
9%
New York
1
729,315
8%
Pennsylvania
2
625,678
7%
Texas
2
619,729
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
250,439
3%
New Hampshire
1
245,698
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
9,216,016
100%



 
(1)  
Excludes one 265,061 square foot center in Wisconsin Dells, WI, of which Tanger owns a 50% interest through a joint venture arrangement.  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
12/31/09
    
            %
           Occupied
           12/31/09
    
     %
          Occupied
            9/30/09
    
           %
           Occupied
            6/30/09
    
             %
            Occupied
              3/31/09
    
            %
            Occupied
            12/31/08
  
Riverhead, NY
     729,315       99 %     99 %     98 %     97 %     98 %
Rehoboth, DE
     568,868       99 %     99 %     99 %     97 %     100 %
Foley, AL
     557,235       91 %     91 %     91 %     91 %     93 %
San Marcos, TX
     441,929       100 %     100 %     99 %     97 %     99 %
Myrtle Beach Hwy 501, SC
     426,417       90 %     90 %     88 %     86 %     92 %
Sevierville, TN
     419,038       100 %     100 %     100 %     98 %     100 %
Myrtle Beach Hwy 17, SC (2)
     402,466       100 %     100 %     99 %     97 %     100 %
Washington, PA
     370,526       88 %     88 %     86 %     82 %     85 %
Commerce II, GA
     370,512       97 %     96 %     95 %     93 %     96 %
Hilton Head, SC
     368,626       89 %     90 %     85 %     85 %     88 %
Charleston, SC
     352,315       98 %     96 %     95 %     91 %     97 %
Howell, MI
     324,631       95 %     95 %     94 %     94 %     98 %
Branson, MO
     302,992       100 %     100 %     100 %     98 %     100 %
Park City, UT
     298,379       100 %     100 %     99 %     99 %     100 %
Locust Grove, GA
     293,868       100 %     100 %     97 %     95 %     99 %
Westbrook, CT
     291,051       95 %     97 %     91 %     94 %     99 %
Gonzales, LA
     282,403       100 %     99 %     100 %     99 %     100 %
Williamsburg, IA
     277,230       95 %     94 %     96 %     91 %     99 %
Lincoln City, OR
     270,280       99 %     100 %     99 %     94 %     98 %
Lancaster, PA
     255,152       100 %     99 %     97 %     97 %     100 %
Tuscola, IL
     250,439       82 %     81 %     79 %     78 %     83 %
Tilton, NH
     245,698       100 %     99 %     97 %     96 %     100 %
Fort Myers, FL
     198,950       92 %     89 %     92 %     95 %     96 %
Commerce I, GA
     185,750       61 %     58 %     63 %     58 %     74 %
Terrell, TX
     177,800       98 %     94 %     94 %     94 %     100 %
Barstow, CA
     171,300       100 %     100 %     100 %     100 %     100 %
West Branch, MI
     112,120       96 %     96 %     96 %     96 %     100 %
Blowing Rock, NC
     104,235       100 %     100 %     100 %     100 %     100 %
Nags Head, NC
     82,178       97 %     97 %     97 %     97 %     97 %
Kittery I, ME
     59,694       100 %     100 %     100 %     100 %     100 %
Kittery II, ME
     24,619       100 %     100 %     100 %     100 %     100 %
Total
     9,216,016       96 % (1)     96 % (1)     95 % (1)     94 % (1)     97 % (1) (2)

Unconsolidated joint ventures
Deer Park, NY (3)
684,851
81%
80%
80%
78%
              78%
Wisconsin Dells, WI
265,061
97%
98%
98%
97%
            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)


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



 



(1)  
Excludes one 265,061 square foot center in Wisconsin Dells, WI, of which Tanger owns a 50% interest through a joint venture arrangement. 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 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 December 31, 2009
 
Tenant
# of  
Stores
 
GLA
% of      
Total GLA
The Gap, Inc.
73
776,530
8.4%
Phillips-Van Heusen
89
426,398
4.6%
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
3.2%
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
489
3,354,410
36.4%

 

(1)  
Excludes one 265,061 square foot center in Wisconsin Dells, WI, of which Tanger owns a 50% interest through a joint venture arrangement. 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 December 31, 2009

 

Percentage of Total Gross Leasable Area (1)


  2010     2011      2012     2013     2014     2015     2016     2017     2018     2019       2020+
14.00%    18.00%          18.00%    18.00%    12.00%      5.00%       3.00%      4.00%      3.00%       3.00%    2.00%



Percentage of Total Annualized Base Rent (1)
 



  2010     2011      2012     2013     2014     2015     2016     2017     2018     2019       2020+
12.00%    16.00%          17.00%    19.00%    12.00%      5.00%       4.00%      4.00%      5.00%       4.00%    2.00%




 
(1)
Excludes one 265,061 square foot center in Wisconsin Dells, WI, of which Tanger owns a 50% interest through a joint venture arrangement. 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       18       15       7       88       124  
    Gross leasable area
     179,661       47,725       60,671       17,177       305,234       492,234  
    New initial base rent per square foot
   $ 25.04     $ 24.60     $ 18.13     $ 19.99     $ 23.31     $ 24.48  
    Prior expiring base rent per square foot
   $ 18.95     $ 22.90     $ 17.00     $ 19.82     $ 19.23     $ 18.39  
    Percent increase
     32.1 %     7.4 %     6.6 %     0.9 %     21.2 %     33.1 %
                                                 
    New straight line base rent per square foot
   $ 26.38     $ 26.47     $ 19.00     $ 21.63     $ 24.66     $ 25.97  
    Prior straight line base rent per square foot
   $ 18.51     $ 22.80     $ 16.72     $ 18.71     $ 18.83     $ 18.03  
    Percent increase
     42.5 %     16.1 %     13.6 %     15.6 %     30.9 %     44.1 %
                                                 
Renewed Space:
                                                
    Number of leases
     162       50       18       41       271       253  
    Gross leasable area
     806,051       226,250       81,078       104,840       1,218,219       1,102,954  
    New initial base rent per square foot
   $ 18.05     $ 17.16     $ 15.89     $ 21.91     $ 18.07     $ 19.69  
    Prior expiring base rent per square foot
   $ 16.20     $ 17.26     $ 17.27     $ 21.84     $ 16.96     $ 17.33  
    Percent increase
     11.4 %     -0.6 %     -8.0 %     0.3 %     6.6 %     13.6 %
                                                 
   New straight line base rent per square foot
   $ 18.42     $ 17.39     $ 15.89     $ 22.71     $ 18.43     $ 20.31  
    Prior straight line base rent per square foot
   $ 16.08     $ 17.09     $ 17.22     $ 21.39     $ 16.80     $ 17.29  
    Percent increase
     14.5 %     1.8 %     -7.7 %     6.2 %     9.7 %     17.5 %
                                                 
Total Re-tenanted and Renewed Space:
                                                
    Number of leases
     210       68       33       48       359       377  
    Gross leasable area
     985,712       273,975       141,749       122,017       1,523,453       1,595,188  
    New initial base rent per square foot
   $ 19.32     $ 18.46     $ 16.85     $ 21.64     $ 19.12     $ 21.17  
    Prior expiring base rent per square foot
   $ 16.70     $ 18.24     $ 17.16     $ 21.56     $ 17.41     $ 17.66  
    Percent increase
     15.7 %     1.2 %     -1.8 %     0.4 %     9.8 %     19.9 %
                                                 
    New straight line base rent per square foot
   $ 19.87     $ 18.97     $ 17.22     $ 22.56     $ 19.68     $ 22.06  
    Prior straight line base rent per square foot
   $ 16.52     $ 18.08     $ 17.00     $ 21.01     $ 17.21     $ 17.52  
    Percent increase
     20.3 %     4.9 %     1.3 %     7.3 %     14.3 %     25.9 %

(1)  
Excludes one 265,061 square foot center in Wisconsin Dells, WI, of which Tanger owns a 50% interest through a joint venture arrangement.  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)
 
 
12/31/09
9/30/09
6/30/09
3/31/09
12/31/08
Assets
          
   Rental property
          
       Land
$143,933
$135,605
$135,708
$135,710
$135,689
       Buildings
1,352,568
1,349,310
1,343,854
1,348,211
1,260,243
       Construction in progress
11,369
---
---
4,805
3,823
   Total rental property
1,507,870
1,484,915
1,479,562
1,488,726
1,399,755
       Accumulated depreciation
(412,530)
(396,508)
(379,412)
(374,541)
(359,301)
   Total rental property – net
1,095,340
1,088,407
1,100,150
1,114,185
1,040,454
   Cash & cash equivalents
3,267
4,401
5,150
3,101
4,977
   Investments in unconsolidated joint ventures
9,054
9,569
9,808
9,773
9,496
   Deferred charges – net
38,867
41,572
43,746
48,294
37,750
   Other assets
32,333
32,646
31,771
34,010
29,248
Total assets
$1,178,861
$1,176,595
$1,190,625
$1,209,363
$1,121,925
Liabilities & equity
      
  Liabilities
          
    Debt
          
       Senior, unsecured notes, net of discount
$256,352
$256,293
$256,235
$391,133
$390,363
       Unsecured term loan
235,000
235,000
235,000
235,000
235,000
       Mortgages payable, net of discount
35,559
35,246
34,938
34,634
---
       Unsecured lines of credit
      57,700
      54,000
      188,250
      188,400
      161,500
    Total debt
584,611
580,539
714,423
849,167
786,863
    Construction trade payables
14,194
7,957
6,327
9,070
11,968
    Accounts payable & accruals
31,916
34,235
25,103
27,777
26,277
   Other liabilities
27,077
28,864
32,152
33,868
30,914
  Total liabilities
657,798
651,595
778,005
919,882
856,022
Equity
          
  Tanger Factory Outlet Centers, Inc. equity
          
    Preferred shares
75,000
75,000
75,000
75,000
75,000
    Common shares
403
403
368
319
317
    Paid in capital
596,074
595,240
482,532
372,762
371,190
    Distributions in excess of net income
(202,997)
(197,725)
(186,202)
(184,349)
(201,679)
    Accum. other comprehensive loss
(5,809)
(6,824)
(6,879)
(8,533)
(9,617)
  Total Tanger Factory Outlet Centers, Inc. equity
462,671
466,094
364,819
255,199
235,211
  Noncontrolling interest
       58,392
       58,906
       47,801
       34,282
       30,692
Total equity
521,063
525,000
412,620
289,481
265,903
Total liabilities and equity
$1,178,861
$1,176,595
$1,190,625
$1,209,363
$1,121,925
 
 
 
10
 
Consolidated Statements of Operations (dollars and shares in thousands)

 
Three Months Ended
YTD
 
12/09
09/09
06/09
03/09
12/08
12/09
12/08
Revenues
              
   Base rentals
  $    44,405
  $    44,160
  $    43,425
  $    42,927
  $    42,694
  $  174,917
  $  159,068
   Percentage rentals
          3,111
          1,442
             940
          1,308
          2,949
        6,801
          7,058
   Expense reimbursements
        22,027
        19,069
        18,374
        19,219
        20,557
      78,689
        72,004
   Other income
          2,000
          5,646
          1,928
          1,704
          2,137
      11,278
          7,261
      Total revenues
        71,543
        70,317
        64,667
        65,158
        68,337
    271,685
      245,391
Expenses
              
   Property operating
        23,982
        21,353
        20,794
        21,748
        21,139
      87,877
        77,974
   General & administrative
          5,066
          5,467
          5,820
          5,935
          5,099
      22,288
        22,264
   Executive severance
              ---
        10,296
              ---
              ---
               ---
      10,296
               ---
   Depreciation & amortization
        20,239
        20,213
        19,652
        20,397
        16,736
      80,501
        62,329
   Impairment charge
              ---
              ---
5,200
---
---
        5,200
               ---
   Abandoned due diligence costs
            797
              ---
              ---
              ---
          3,336
           797
          3,923
      Total expenses
        50,084
        57,329
        51,466
        48,080
        46,310
      206,959
      166,490
Operating income
  21,459
  12,988
  13,201
  17,078
  22,027
      64,726
 78,901
   Interest expense
       (8,217)
       (8,692)
       (9,564)
       (11,210)
       (10,972)
    (37,683)
       (41,125)
   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
 
        13,242
 
        4,296
 
        14,104
 
        37,365
 
        11,055
 
      69,007
 
        28,866
Equity in earnings (losses) of unconsolidated
   joint ventures
 
          (166)
 
           68
 
           (517)
 
            (897)
 
           (696)
 
      (1,512)
 
             852
Net income
       13,076
        4,364
        13,587
        36,468
        10,359
      67,495
         29,718
Non-controlling interest
        (1,538)
        (407)
        (1,833)
        (5,698)
        (1,459)
      (9,476)
          (3,932)
Net income attributable to the Company
      11,538
       3,957
       11,754
       30,770
         8,900
     58,019
         25,786
Less applicable preferred share dividends
        (1,406)
        (1,406)
        (1,407)
        (1,406)
        (1,406)
      (5,625)
        (5,625)
Allocation to participating securities
           (121)
           (207)
           (179)
           (437)
           (195)
         (701)
           (724)
Net income available to common
   shareholders
 
$  10,011
 
$    2,344
 
$   10,168
 
$  28,927
 
$    7,299
 
$    51,693
 
$     19,437
Basic earnings per common share:
              
   Income from continuing operations
$        .25
$        .06
$        .30
$        .93
$        .23
$        1.44
$           .63
   Net income
$        .25
$        .06
$        .30
$        .93
$        .23
$        1.44
$           .63
Diluted earnings per common share:
              
   Income from continuing operations
$        .25
$        .06
$        .30
$        .92
$        .23
$        1.44
$           .62
   Net income
$        .25
$        .06
$        .30
$        .92
$        .23
$        1.44
$           .62
Weighted average common shares:
              
   Basic
      39,958
      38,063
      34,249
      31,269
      31,160
      35,916
       31,084
   Diluted
      40,043
      38,145
      34,327
      31,350
      31,257
      36,012
       31,220
 


 
11
 

FFO and FAD Analysis (dollars and shares in thousands)
 
Three Months Ended
YTD
 
12/09
 09/09
 06/09
 03/09
 12/08
12/09
12/08
Funds from operations:
              
   Net income
$  13,076
$  4,364
$  13,587
$  36,468
$  10,359
$  67,495
$  29,718
   Adjusted for -
              
      Depreciation and amortization
        uniquely significant to real estate –
       wholly-owned
 
 
    20,112
 
 
    20,088
 
 
    19,530
 
 
    20,278
 
 
    16,630
 
 
   80,008
 
 
    61,965
      Depreciation and amortization
        uniquely significant to real estate –
        joint ventures
 
 
      1,231
 
 
      1,239
 
 
      1,223
 
 
      1,166
 
 
      1,227
 
 
   4,859
 
 
      3,165
      (Gain) on fair value measurement of
        previously held interest in
        acquired joint venture
 
 
           --
 
 
           --
 
 
           --
 
 
   (31,497)
 
 
           --
 
 
   (31,497)
 
 
            --
Funds from operations
    34,419
    25,691
    34,340
    26,415
    28,216
  120,865
    94,848
Preferred share dividends
     (1,406)
     (1,406)
     (1,407)
     (1,406)
     (1,406)
     (5,625)
    (5,625)
Allocation to participating securities
        (225)
        (302)
        (452)
        (306)
        (361)
    (1,282)
    (1,157)
Funds from operations available to
       common shareholders
 
$  32,788
 
$  23,983
 
$  32,481
 
$  24,703
 
$  26,449
 
$113,958
 
$  88,066
Funds from operations per share
    $.71
    $.54
    $.80
    $.66
    $.71
   $2.71
   $2.36
Funds available for distribution to
   common shareholders:
              
   Funds from operations
$  32,788
$  23,983
$  32,481
$  24,703
$  26,449
$113,958
$  88,066
   Adjusted for -
              
      Corporate depreciation
          excluded above
 
     127
 
     125
 
     122
 
     119
 
     106
 
      493
 
     364
      Amortization of finance costs
     341
     348
     357
     465
     474
   1,511
  1,632
      Amortization of net debt discount
           premium
 
         (79)
 
         (21)
 
         (76)
 
      1,070
 
        758
 
        894
 
     1,919
     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
         829
      8,080
      1,592
      1,297
      1,368
  11,798
      5,392
      Straight line rent adjustment
       (287)
       (421)
       (757)
       (777)
       (499)
   (2,242)
  (3,195)
      Market rent adjustment
     (226)
     (223)
     (121)
     78
     (128)
      (492)
    (356)
      2nd generation tenant allowances
    (1,652)
       (807)
     (2,834)
     (2,371)
     (3,042)
   (7,664)
  (13,008)
      Capital improvements
     (1,011)
     (2,008)
     (3,107)
     (2,761)
     (6,736)
   (8,887)
(30,847)
Funds available for distribution
 $ 30,830
 $ 29,056
 $ 22,390
 $ 21,823
 $ 18,750
$104,102
 $ 58,877
Funds available for distribution
   per share
 
    $     .67
 
    $     .66
 
    $     .55
 
    $     .58
 
    $     .50
 
  $    2.47
 
    $    1.58
Dividends paid per share
    $ .3825
    $. 3825
    $ .3825
    $     .38
    $      38
 $1.5275
    $    1.50
FFO payout ratio
    54%
    71%
    48%
    58%
    54%
    56%
    64%
FAD payout ratio
    57%
    58%
    70%
    66%
    76%
    62%
    95%
Diluted weighted average common shs.
   46,110
   44,212
   40,394
   37,417
   37,324
   42,079
   37,287

 
12
 
Unconsolidated Joint Venture Information – All
Summary Balance Sheets (dollars in thousands)
 
 
 
12/31/09
 
 
9/30/09
 
 
6/30/09
 
 
3/31/09
 
 
12/31/08
  
Tanger’s
Share as of
12/31/09
Assets
              
   Investment properties at cost – net
$294,857
$294,220
$291,166
$288,951
$323,546
  
$103,662
   Cash and cash equivalents
8,070
8,151
5,880
13,195
5,359
  
3,453
   Deferred charges – net
5,450
5,438
5,685
6,307
7,025
  
1,905
   Other assets
5,610
5,302
4,549
4,399
6,324
  
1,956
Total assets
$313,987
$313,111
$307,280
$312,852
$342,254
  
$110,976
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$292,468
$292,468
$288,169
$288,169
$303,419
  
$101,698
    Construction trade payables
3,647
2,523
1,651
3,356
13,641
  
1,235
    Accounts payable & other liabilities
3,826
2,841
1,825
6,998
9,479
  
1,422
Total liabilities
299,941
297,832
291,645
298,523
326,539
  
104,355
Owners’ equity
14,046
15,279
15,635
14,329
15,715
  
6,621
Total liabilities & owners’ equity
$313,987
$313,111
$307,280
$312,852
$342,254
  
$110,976

Summary Statements of Operations (dollars in thousands)

 
         Three Months Ended
            YTD
 
12/09
09/09
06/09
03/09
12/08
12/09
12/08
Revenues
$9,374
$9,152
$8,431
$8,524
$10,573
$35,481
$25,943
Expenses
              
   Property operating
4,682
4,103
3,611
4,247
6,679
16,643
12,329
   General & administrative
444
111
117
189
403
861
591
   Depreciation & amortization
3,460
3,427
3,358
3,174
3,022
13,419
7,013
     Total expenses
8,586
7,641
7,086
7,610
10,104
30,923
19,933
Operating income
788
1,511
1,345
914
469
4,558
6,010
   Interest expense
1,550
1,553
3,079
3,731
3,414
9,913
6,006
Net income (loss)
$   (762)
  $   (42)
$(1,734)
$(2,817)
$(2,945)
$(5,355)
$         4
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,603
 
 
$   1,845
 
 
$   1,751
 
 
$   1,534
 
 
$ 1,808
 
 
$   6,733
 
 
$6,583
       Net income
$   (166)
$   68
$   (517)
$   (897)
$ (696)
$(1,512)
$   852
       Depreciation (real estate related)
$   1,231
$   1,239
$   1,223
$   1,166
$ 1,227
$   4,859
$3,165

 
13
 

 Unconsolidated Joint Venture Information – Wisconsin Dells
Summary Balance Sheets (dollars in thousands)
 
 
 
12/31/09
 
 
09/30/09
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
  
Tanger’s
Share as of
12/31/09
Assets
              
   Investment properties at cost - net
$32,108
$32,598
$33,165
$33,718
$34,068
  
$16,054
   Cash and cash equivalents
4,549
3,846
3,312
2,436
2,352
  
2,275
   Deferred charges – net
529
390
444
493
528
  
265
   Other assets
514
522
527
589
533
  
257
Total assets
$37,700
$37,356
$37,448
$37,236
$37,481
  
$18,851
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$25,250
$25,250
$25,250
$25,250
$25,250
  
$12,625
    Construction trade payables
116
39
199
199
199
  
58
    Accounts payable & other liabilities
876
696
787
654
816
  
439
Total liabilities
26,242
25,985
26,236
26,103
26,265
  
13,122
Owners’ equity
11,458
11,371
11,212
11,133
11,216
  
5,729
Total liabilities & owners’ equity
$37,700
$37,356
$37,448
$37,236
$37,481
  
$18,851

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
12/09
09/09
06/09
03/09
12/08
12/09
12/08
Revenues
$1,757
$1,780
$1,785
$1,771
$2,644
$7,093
$8,190
Expenses
              
   Property operating
629
590
661
685
694
2,565
2,603
   General & administrative
1
4
13
3
6
21
17
   Depreciation & amortization
612
615
613
613
615
2,453
2,438
     Total expenses
1,242
1,209
1,287
1,301
1,315
5,039
5,058
Operating income
515
571
498
470
1,329
2,054
3,132
   Interest expense
128
112
118
134
272
492
1,148
Net income
$  387
$  459
$  380
$  336
$1,057
$  1,562
$1,984
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$  563
 
 
$  593
 
 
$  556
 
 
$  541
 
 
$  971
 
 
$2,253
 
 
$2,784
       Net income
$  203
$  238
$  201
$  177
$  538
$819
$1,033
       Depreciation (real estate related)
      $  296
      $  299
      $  296
      $  297
      $  296
    $1,188
    $1,177

 
14
 

Unconsolidated Joint Venture Information – Deer Park
Summary Balance Sheets (dollars in thousands)
 
 
 
12/31/09
 
 
09/30/09
 
 
06/30/09
 
 
03/31/09
 
 
12/31/08
  
Tanger’s
Share as of
12/31/09
Assets
              
   Investment properties at cost - net
$   262,601
$   261,474
$   257,868
 $255,174
$ 255,885
  
$  87,534
   Cash and cash equivalents
3,498
4,273
2,526
10,645
2,093
  
1,166
   Deferred charges – net
4,921
5,048
5,241
5,814
5,895
  
1,640
   Other assets
5,096
4,780
4,022
3,810
3,632
  
1,699
Total assets
$276,116
$275,575
$269,657
$275,443
$267,505
  
 $ 92,039
               
Liabilities & Owners’ Equity
              
    Mortgage payable
$267,218
$267,218
$262,919
$262,919
$242,369
  
$ 89,073
    Construction trade payables
3,531
2,484
1,452
3,157
13,182
  
1,177
    Accounts payable & other liabilities
2,950
2,136
1,034
6,344
6,414
  
983
Total liabilities
273,699
271,838
265,405
272,420
261,965
  
91,233
Owners’ equity
2,417
3,737
4,252
3,023
5,540
  
806
Total liabilities & owners’ equity
$276,116
$275,575
$269,657
$275,443
$267,505
  
$  92,039

Summary Statements of Operations (dollars in thousands)

 
Three Months Ended
YTD
 
12/09
09/09
06/09
03/09
12/08
12/09
12/08
Revenues
$7,617
$7,372
$6,646
$6,753
$4,855
$28,388
$  5,368
Expenses
              
   Property operating
4,053
3,513
2,950
3,562
4,852
14,078
5,280
   General & administrative
443
107
104
186
376
840
515
   Depreciation & amortization
2,868
2,807
2,727
2,539
1,652
10,941
1,676
     Total expenses
7,364
6,427
5,781
6,287
6,880
25,859
7,471
Operating income
253
945
865
466
(2,025)
2,529
(2,103)
   Interest expense
1,422
1,441
2,961
3,597
2,588
9,421
2,624
Net income (loss)
$(1,169)
$(496)
$(2,096)
$(3,131)
$(4,613)
$(6,892)
$(4,727)
Tanger’s share of:
              
       Total revenues less property
       operating and general &
       administrative expenses (“NOI”)
 
 
$   1,040
 
 
$   1,252
 
 
$   1,196
 
 
$   1,002
 
 
$   (123)
 
 
$   4,490
 
 
$     (141)
       Net income (loss)
$   (370)
$   (169)
$   (718)
$(1,065)
$(1,540)
$(2,322)
$  (1,578)
       Depreciation (real estate related)
$      936
$      941
$      927
$     869
$     554
$   3,672
$       562

 
15
 

Debt Outstanding Summary (dollars in thousands)

As of December 31, 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)
57,700
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%
8/18/11
Net debt discounts
(1,099)
    
Total consolidated debt
$584,611
    
Tanger’s share of unconsolidated JV debt:
      
   Wisconsin Dells (5)
12,625
Libor + 3.00%
12/18/12
Deer Park (6)
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.

 
16
 


(4)  
On January 1, 2009, we retrospectively adopted new guidance related to the accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement).  This new guidance required 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%.  Retrospective treatment 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 December 31, 2009, the unamortized discount on the remaining $7.2 million in exchangeable notes totaled $260,000.  Our exchangeable notes issued during 2006 mature in 2026.  They are displayed in the above table with a 2011 maturity date as this is the first date that the noteholders can require us to repurchase the notes without the occurrence of specified events.

(5)  
In December 2009, we closed on the refinancing of the Tanger Wisconsin Dells mortgage loan.  The new loan has a term of three years with an interest rate of LIBOR plus 300 basis points.

(6)  
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 December 31, 2009, the outstanding principle balances of the senior and mezzanine loans were $252.2 million and $15.0 million, respectively, and $16.8 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 the LIBOR index 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 December 31, 2009, the outstanding principle balance under this mortgage was $2.3 million.

 
17
 

Future Scheduled Principal Payments (dollars in thousands)

As of December 31, 2009
 
 
Year
Tanger
Consolidated
Payments
Tanger’s Share
of Unconsolidated
JV Payments
Total
Scheduled
Payments
2010
$  35,800
$          ---
$          35,800
2011 (1)
299,910
89,073
388,983
2012
---
12,625
12,625
2013
---
---
--
2014
---
---
--
2015
250,000
---
250,000
2016
---
---
---
2017
---
---
---
2018
---
---
---
2019 & thereafter
---
---
---
 
$585,710
$101,698
$687,408
Net Discount on Debt
 (1,099)
---
(1,099)
 
$584,611
$101,698
$686,309


Senior Unsecured Notes Financial Covenants (2)

As of December 31, 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%
278%
Yes
Consolidated Income Available for Debt Service to                        
Annual Debt Service Charge
 
2.00
 
4.28
 
Yes
(1)  
Included in this amount is $7.2 million which 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.  The notes are shown with a 2011 maturity as this is the first date that the noteholders can require us to repurchase the notes without the occurrence of specified events.
(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.
 
 
18
 
 
Investor Information


Tanger Outlet Centers welcomes any questions or comments from shareholders, analysts, investment managers, media and prospective investors.  Please address all inquiries to our Investor Relations Department.


Tanger Factory Outlet Centers, Inc.
Investor Relations
Phone:  (336) 292-6825
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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