Form: 8-K

Current report filing

July 29, 2003

Documents

EXHIBIT 99.2

Published on July 29, 2003

NEWS RELEASE Exhibit 99.2

FOR RELEASE: IMMEDIATE RELEASE
CONTACT: Frank C. Marchisello, Jr.
(336) 834-6834

TANGER REPORTS SECOND QUARTER 2003 RESULTS
5.1% INCREASE IN FFO TO $0.82 PER SHARE Tenant Sales
Rebound During the Quarter Increasing 6.3%

Greensboro, NC, July 29, 2003, Tanger Factory Outlet Centers, Inc. (NYSE:SKT)
today reported funds from operations ("FFO"), a widely accepted performance
measure of a Real Estate Investment Trust ("REIT"), for the three months ended
June 30, 2003, was $11.0 million, or $0.82 per share, as compared to FFO of $9.4
million, or $0.78 per share, for the three months ended June 30, 2002,
representing a 17.0% increase in total FFO and a 5.1% per share increase. For
the six months ended June 30, 2003, FFO was $21.3 million, or $1.60 per share,
as compared to FFO of $18.3 million, or $1.54 per share, for the six months
ended June 30, 2002, representing a 16.1% increase in total FFO and a 3.9% per
share increase.

Net income for the three months ended June 30, 2003 was $2.3 million, or $0.20
per share, compared to $2.1 million, or $0.20 per share for the second quarter
of 2002. Included in net income for the second quarter of 2003 is a non-cash,
non-recurring, book loss on sale of $735,000 in connection with the sale of a
non-core asset completed in the second quarter. For the six months ended June
30, 2003, net income was $4.5 million, or $0.38 per share, compared to $3.5
million, or $0.33 per share for the first six months of 2002.

Net income and FFO per share amounts are on a diluted basis. A reconciliation of
net income to FFO is presented on the supplemental information page of this
press release.

Second Quarter Highlights

o 96% period-end portfolio occupancy rate

o Same-space sales increased 6.3% for the three months ended June 30, 2003

o 81 leases signed, totaling 308,000 square feet

o As of June 30, 2003, 72.6% of the square footage scheduled to expire during
2003 has renewed


o Rental rates on new stores opening were 13.9% higher than rental rates on
stores closing during the quarter

o $300 per square foot in reported same-space tenant sales for the rolling
twelve months ended June 30, 2003

o 49,000 square feet of development/expansion space completed and 100% leased

o Sold one non-core property, generating $2.3 million in proceeds

3200 Northline Avenue, Suite 360, Greensboro, NC 27408
336-292-3010 - FAX 336-297-0931

1

o Completed redemption/conversion of all outstanding convertible preferred
shares

o 43.0% debt-to-total market capitalization ratio, 2.8 times interest
coverage ratio

o $0.615 per share in quarterly common dividends declared ($2.46 annualized)

o Added to Standard & Poor's REIT Composite Index

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented,
"We remain fully on track with executing our planned strategies for 2003. During
the second quarter, we continued to generate positive leasing results;
increasing our portfolio occupancy to 96% and achieving a 13.9% rental rate
increase on new stores opened compared to stores closed during the second
quarter. Additionally, our tenants continued to perform well with same-space
sales increasing to $300 per square foot." Mr. Tanger continued, "Our ongoing
ability to generate solid results and deliver reliable dividends to our
shareholders was particularly gratifying for all of us at Tanger during the
second quarter, as we celebrated our tenth anniversary as a New York Stock
Exchange company and were recently added to the S&P REIT Composite Index."

Portfolio Operating Results

During the second quarter of 2003, the average initial base rental rate for new
stores opened was $17.85, representing an increase of $2.18 or 13.9% over the
rent paid by stores that closed during the same quarter. In addition, Tanger
executed 81 leases, totaling approximately 308,000 square feet, with a 1.4%
increase in base rental revenue per square foot on a cash basis as compared to
the previous base rental revenue associated with that space. Through the first
six months of 2003, the Company has renewed 72.6% of the square footage
originally scheduled to expire during 2003 as compared to 57.0% at this time
last year.

Reported same-space sales per square foot for the three months ended June 30,
2003, increased by 6.3%, as compared to the three months ended June 30, 2002.
For the rolling twelve months ended June 30, 2003 sales were $300 per square
foot, representing a 1.5% increase compared to $295 per square foot for the
rolling twelve months ended June 30, 2002. Same-space sales is defined as the
weighted average sales per square foot reported in space open for the full
duration of the comparative periods.

Investment Activities

During the second quarter of 2003, Tanger completed the 64,000 square foot
second phase of its center in Myrtle Beach, South Carolina. Stores, aggregating
49,000 square feet, commenced operations during May and June, approximately one
month ahead of schedule, with the remaining stores expected to open later this
year. The center, which now totals over 324,000 square feet, was developed and
is managed and leased by the Company, and is owned through a joint venture of
which the Company owns a 50% interest. Accordingly, the Company's total
investment for the second phase is approximately $1.1 million with an expected
return in excess of 20%.

Additionally, Tanger is currently underway with a 35,000 square foot, 100%
leased expansion at its outlet center in Sevierville, Tennessee. The company
expects to complete the expansion with stores commencing operations during the
third quarter of 2003. The estimated cost of the expansion is $4.0 million, with
an expected return in excess of 13%. Upon completion of the expansion, the
Sevierville center will total approximately 419,000 square feet.

3200 Northline Avenue, Suite 360 o Greensboro, NC 27408 o
336-292-3010 o FAX 336-297-0931

2

In May 2003, Tanger sold a 49,252 square foot non-core property located in West
Virginia for a total cash sales price of $2.3 million, resulting in a book loss
of $735,000. The loss is included in the Company's reported net income for the
second quarter and is excluded from FFO in accordance with the industry standard
definition for FFO as set forth by the National Association of Real Estate
Investment Trusts. Proceeds from the sale were used to pay down borrowings
outstanding under the Company's unsecured lines of credit.

Balance Sheet Summary

During the second quarter, Tanger called for redemption all of its 801,897
Series A convertible preferred shares, to be effected on June 20, 2003. Prior to
redemption, each Series A preferred share could have been converted to .901
common shares. In total, 787,008, or 98.1%, of the Series A preferred shares
were converted into 709,078 common shares and the Company redeemed the remaining
14,889 Series A preferred shares for $25 per share, plus accrued and unpaid
dividends. Tanger funded the redemption, totaling approximately $375,000 from
cash flow from operations. With the redemption of the Series A preferred shares
completed, the Company expects its fixed charge coverage ratio will increase.

As of June 30, 2003, Tanger had a total market capitalization of approximately
$773 million, with $333 million of debt outstanding, equating to a 43.0%
debt-to-total market capitalization ratio. This compares favorably to a total
market capitalization of approximately $706 million with $358 million of debt
outstanding on June 30, 2002. The Company had a 50.7% debt-to-total market
capitalization ratio as of June 30, 2002. During the second quarter of 2003,
Tanger reduced its debt outstanding by $8.6 million. As of June 30, 2003, the
Company had $11.9 million outstanding with $73.1 million available on its
unsecured lines of credit. The Company continues to improve its interest
coverage ratio, which was 2.8 times for the second quarter of 2003, as compared
to 2.3 times interest coverage in the same period last year.

2003 FFO Per Share Guidance

Based on current market conditions, the strength and stability of its core
portfolio and the Company's ongoing development, expansion and acquisition
pipeline, Tanger currently believes its FFO for 2003 will range between $3.45
and $3.49 per share. Tanger currently expects 2003 FFO to range between $0.87 to
$0.89 per share for the third quarter and $0.98 to $1.00 per share for the
fourth quarter.

Second Quarter Conference Call

Tanger will host a conference call to discuss its second quarter results for
analysts, investors and other interested parties on Tuesday, July 29, 2003, at
3:00 P.M. eastern time. The conference call can be accessed by dialing
1-877-277-5113 and requesting to be connected to the Tanger Factory Outlet
Centers Second Quarter Financial Results Conference call. Alternatively, the
call will be webcast by CCBN and can be accessed at Tanger Factory Outlet
Centers, Inc.'s web site at www.tangeroutlet.com, (click on "Corporate News").

A telephone replay of the call will be available from July 29, 2003 starting at
5:00 P.M eastern time through August 1, 2003, by dialing 1-800-642-1687
(conference ID # 1630709). Additionally, an online archive of the broadcast will
also be available through August 1, 2003.

3200 Northline Avenue, Suite 360 o Greensboro, NC 27408 o
336-292-3010 o FAX 336-297-0931

3
About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated,
self-administered and self-managed publicly traded REIT, presently operates 33
centers in 20 states coast to coast, totaling approximately 6.2 million square
feet of gross leasable area. We are filing a Form 8-K with the Securities and
Exchange Commission that includes a supplemental information package for the
quarter ended June 30, 2003. For more information on Tanger Outlet Centers,
visit our web site at www.tangeroutlet.com.

This press release may contain forward-looking statements regarding our
re-merchandising strategy, the renewal and re-tenanting of space, tenant sales
and sales trends, interest rates, funds from operations and the acquisition or
development of new centers. These forward-looking statements are subject to
risks and uncertainties. Actual results could differ materially from those
projected due to various factors including, but not limited to, the risks
associated with general economic and local real estate conditions, the
availability and cost of capital, our ability to lease our properties, our
inability to collect rent due to the bankruptcy or insolvency of tenants or
otherwise, and competition. For a more detailed discussion of the factors that
affect our operating results, interested parties should review the Tanger
Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year
ended December 31, 2002.

3200 Northline Avenue, Suite 360 o Greensboro, NC 27408 o
336-292-3010 o FAX 336-297-0931

4



TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
REVENUES

Base rentals (a) $19,806 $18,364 $39,428 $36,386
Percentage rentals 555 581 950 1,178
Expense reimbursements 8,456 7,275 16,886 14,515
Other income 803 583 1,474 1,145
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues 29,620 26,803 58,738 53,224
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating 10,109 8,585 20,062 17,146
General and administrative 2,453 2,092 4,883 4,367
Interest 6,556 7,118 13,280 14,247
Depreciation and amortization 7,099 7,048 14,379 14,064
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 26,217 24,843 52,604 49,824
- ---------------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of unconsolidated joint ventures,
minority interest and discontinued operations 3,403 1,960 6,134 3,400
Equity in earnings of unconsolidated joint ventures 280 (75) 372 (67)
Minority interest (798) (396) (1,389) (673)
- ---------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 2,885 1,489 5,117 2,660
Discontinued operations (including (loss)/gain on sale of real estate of
($735) and $460 in 2003 and 2002, net of minority interest) (b) (578) 605 (619) 879
- ---------------------------------------------------------------------------------------------------------------------------------
Net income 2,307 2,094 4,498 3,539
Less applicable preferred share dividends (363) (442) (806) (886)
- ---------------------------------------------------------------------------------------------------------------------------------
Net income available to common shareholders $1,944 $1,652 $3,692 $2,653
=================================================================================================================================

Basic earnings per common share (c):
Income from continuing operations $.26 $.13 $.46 $.22
Net income $.20 $.21 $.39 $.33
=================================================================================================================================

Diluted earnings per common share (c):
Income from continuing operations $.26 $.13 $.45 $.22
Net income $.20 $.20 $.38 $.33
=================================================================================================================================

Funds from operations (FFO) $10,989 $9,383 $21,267 $18,310
FFO per common share - diluted (c) $.82 $.78 $1.60 $1.54
=================================================================================================================================

(a) Includes straight-line rent adjustment of $(55) and $(54) for the three
months ended and $(112) and $(87) for the six months ended June 30, 2003
and 2002, respectively.

(b) In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal
of Long Lived Assets", the results of operations for property disposed of
during 2003 and 2002 have been reported above as Discontinued Operations
for both the current and prior periods presented.

(c) Relects the change in accounting policy with respect to stock options as
permitted by the modified prospective method of SFAS No. 148 "Accounting
for Stock-Based Compensation-Transition and Disclosure" whereby, effective
January 1, 2003, compensation expense is recognized based on the fair value
provisions of SFAS No. 123 "Accounting for Stock-Based Compensation" for
all options granted since 1995. Results for prior years have not been
restated.


3200 Northline Avenue, Suite 360, Greensboro, NC 27408
336-292-3010 FAX 336-297-0931



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

June 30, December 31,
2003 2002
- ------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
Rental Property

Land $50,474 $51,274
Buildings, improvements and fixtures 578,665 571,125
Developments under construction 2,490 ---
- ------------------------------------------------------------------------------------------------------
631,629 622,399
Accumulated depreciation (185,071) (174,199)
- ------------------------------------------------------------------------------------------------------
Rental property, net 446,558 448,200
Cash and cash equivalents 203 1,072
Deferred charges, net 9,389 10,104
Other assets 12,822 18,299
- ------------------------------------------------------------------------------------------------------
Total assets $468,972 $477,675
======================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Long-term debt
Senior, unsecured notes $147,509 $150,109
Mortgages payable 173,188 174,421
Lines of credit 11,890 20,475
- ------------------------------------------------------------------------------------------------------
332,587 345,005
Construction trade payables 8,010 3,310
Accounts payable and accrued expenses 13,328 15,095
- ------------------------------------------------------------------------------------------------------
Total liabilities 353,925 363,410
- ------------------------------------------------------------------------------------------------------
Commitments
Minority interest 26,231 23,630
- ------------------------------------------------------------------------------------------------------
Shareholders' equity
Preferred shares, $.01 par value, 1,000,000 shares authorized,
0 and 80,190 shares issued and outstanding
at June 30, 2003 and December 31, 2002 --- 1
Common shares, $.01 par value, 50,000,000 shares authorized,
10,270,443 and 9,061,025 shares issued and outstanding
at June 30, 2003 and December 31, 2002 103 90
Paid in capital 167,034 161,192
Distributions in excess of net income (78,224) (70,485)
Accumulated other comprehensive loss (97) (163)
- ------------------------------------------------------------------------------------------------------
Total shareholders' equity 88,816 90,635
- ------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $468,972 $477,675
======================================================================================================

3200 Northline Avenue, Suite 360, Greensboro, NC 27408
336-292-3010 FAX 336-297-0931


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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(In thousands, except per share, state and center information)

Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------
Funds from Operations:

Net income $2,307 $2,094 $4,498 $3,539
Adjusted for:
Minority interest 798 396 1,389 673
Minority interest, depreciation and amortization
attributable to discontinued operations (143) 379 (107) 641
Depreciation and amortization uniquely significant to real estate
- wholly owned 7,026 6,974 14,232 13,917
Depreciation and amortization uniquely significant to real estate
- unconsolidated joint ventures 266 --- 520 ---
(Loss)/gain on sale of real estate 735 (460) 735 (460)
- ---------------------------------------------------------------------------------------------------------------------------
Funds from operations before minority interest $10,989 $9,383 $21,267 $18,310
===========================================================================================================================
Funds from operations per share - diluted $.82 $.78 $1.60 $1.54
===========================================================================================================================

WEIGHTED AVERAGE SHARES
Basic weighted average common shares 9,590 8,015 9,387 7,982
Effect of outstanding share and unit options 219 214 228 153
- ---------------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
earnings per share computations) 9,809 8,229 9,615 8,135
Convertible preferred shares (a) 590 723 656 724
Convertible operating partnership units (a) 3,033 3,033 3,033 3,033
- ---------------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
funds from operations per share computations) 13,432 11,985 13,304 11,892
===========================================================================================================================

OTHER INFORMATION
Gross leasable area open at end of period -
Wholly owned 5,449 5,167 5,449 5,167
Partially owned (b) 309 260 309 260
Managed 457 105 457 105
- ---------------------------------------------------------------------------------------------------------------------------
Total gross leasable area open at end of period 6,215 5,532 6,215 5,532

Outlet centers in operation -
Wholly owned 27 28 27 28
Partially owned (b) 1 1 1 1
Managed 5 3 5 3
- ---------------------------------------------------------------------------------------------------------------------------
Total outlet centers in operation 33 32 33 32

States operated in at end of period (b) 20 21 20 21
Occupancy percentage at end of period (b) 96% 96% 96% 96%
- ---------------------------------------------------------------------------------------------------------------------------

(a) The convertible preferred shares and operating partnership units (minority
interest) are not dilutive on earnings per share computed in accordance
with generally accepted accounting principles.

(b) Includes Myrtle Beach, South Carolina property which is operated by us
through a 50% ownership joint venture.


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.

3200 Northline Avenue, Suite 360 Greensboro, NC 27408
336-292-3010 FAX 336-297-0931
7