Form: 8-K

Current report filing

July 26, 2005

Documents

EXHIBIT 99.1 PRESS RELEASE

Published on July 26, 2005



NEWS RELEASE

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

TANGER REPORTS SECOND QUARTER 2005 RESULTS
Moody's Raises Rating to Investment Grade
4.3% Increase in Same Center Net Operating Income

Greensboro, NC, July 26, 2005, Tanger Factory Outlet Centers, Inc. (NYSE:SKT)
today reported funds from operations ("FFO"), a widely accepted measure of REIT
performance, for the three months ended June 30, 2005, was $15.7 million, or
$0.47 per share, as compared to FFO of $15.6 million, or $0.47 per share, for
the three months ended June 30, 2004. For the six months ended June 30, 2005,
FFO was $30.2 million, or $0.90 per share, as compared to FFO of $29.5 million,
or $0.89 per share, for the six months ended June 30, 2004.

Tanger's FFO for the three months and six months ended June 30, 2004 included
$1.2 million in gains on the sale of land parcels, which are included in other
income. These land parcel gains represent $0.03 per share for the three months
and six months ended June 30, 2004. Excluding these gains, which are a component
of Tanger's strategic plan, but unpredictable in their occurrence, FFO for the
second quarter and six months ended June 30, 2004 would have been $0.44 and
$0.86 per share respectively. Excluding the gains on the sale of land parcels in
the comparable period in 2004, FFO per share increased by 6.8% in the second
quarter of 2005, and 4.7% in the six months ended June 30, 2005.

For the three months ended June 30, 2005, net income was $3.5 million or $0.13
per share, as compared to net income of $3.7 million, or $0.14 per share for the
second quarter of 2004. For the six months ended June 30, 2005, net income was
$551,000, or $0.02 per share, compared to $4.8 million, or $0.18 per share for
the first six months of 2004. Net income for the six months ended June 30, 2005
included a $3.8 million loss on sale of real estate incurred during the first
quarter of 2005, while net income for the six months ended June 30, 2004
included a $2.1 million gain on the sale of real estate incurred during the
second quarter of 2004.

Net income and FFO per share amounts above 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 Moody's raises rating to investment grade on outstanding senior unsecured
debt

o 4.3% increase in same center net operating income o Year to date leases for
1,073,851 square feet, or 59% of the square feet scheduled to expire during
2005 have been renewed with the existing tenants at an average increase in
base rental rates of 7.9%

o 97% period-end portfolio occupancy rate compared to 95% as of June 30, 2004
and 95% as of March 31, 2005

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o Comparative sales increased 3% to $316 per square foot in reported
same-space tenant sales for the rolling twelve months ended June 30, 2005

o 46,400 square foot expansion underway in Locust Grove, Georgia opening in
the fall of 2005

o 21,000 square foot expansion underway in Foley, Alabama opening in the
fourth quarter of 2005

o Debt-to-total market capitalization ratio improved to 34.6% compared to
43.5% as of June 30, 2004

o Interest coverage ratio improved to 3.71 compared to 3.42 times last year


Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented,
"Our second quarter results came in as expected. Same center net operating
income increased 4.3% during the second quarter of 2005, improving on the
positive momentum experienced in the first quarter. We were pleased to see the
leasing spreads obtained during the first three months continued into the second
quarter of the year."

Portfolio Operating Results

Same center net operating income increased 4.3% for the second quarter of 2005
compared to the same period in 2004.

During the second quarter of 2005, Tanger executed 106 leases, totaling 451,713
square feet. Lease renewals for the second quarter of 2005 accounted for 334,357
square feet and generated a 6.2% increase in average base rental rates on a cash
basis. Base rental increases on re-tenanted space during the second quarter
averaged 4.4% on a cash basis and accounted for the remaining 117,356 square
feet. For the first six months of 2005, 1,073,851 square feet of renewals
generated a 7.9% increase in average base rental rates, and represented 59% of
the 1,821,000 square feet originally scheduled to expire during 2005.

Reported same-space sales per square foot for the rolling twelve months ended
June 30, 2005 were $316 per square foot. This represents a 3% increase compared
to the rolling twelve months ended June 30, 2004. For the second quarter of
2005, same-space sales increased by 2%, as compared to the same period in 2004.
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.
Reported same-store sales decreased 1% for the three months ended June 30, 2005
due to the shift in Easter from April 2004 to March 2005 resulting in an
increase of 1% for the six months ended June 30, 2005. Same-store sales are
defined as sales for tenants whose stores have been open from January 1, 2004
through the duration of the comparison period.

Investment and Other Activities

Construction of a 46,400 square foot expansion is currently underway at Tanger's
center located in Locust Grove, Georgia. The estimated cost of the expansion is
$6.6 million with an estimated return on cost of approximately 11%. The company
currently expects to complete the expansion with stores commencing operations
during the fall of 2005. Leases have been executed with Polo/Ralph Lauren,
Sketchers, Children's Place and others. Upon completion of the expansion, the
company's Locust Grove center will total approximately 294,000 square feet.

The company is also constructing a 21,000 square foot expansion at its center
located in Foley, Alabama. The estimated cost of the expansion is $3.8 million
with an estimated return on cost of approximately 14%. The company currently
expects to complete the expansion with stores commencing operations during the
fourth quarter of 2005. Leases have been executed with Ann Taylor, Skechers,
Tommy Hilfiger and others. Upon completion of the expansion, the company's Foley
center will total approximately 557,000 square feet.

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Tanger continues the pre-development and leasing of four previously announced
sites located in Pittsburgh, Pennsylvania; Deer Park, New York; Charleston,
South Carolina; and Wisconsin Dells, Wisconsin, with expected deliveries in the
fourth quarter of 2006 and 2007.

Financing Activities and Balance Sheet Summary

On April 10, 2005 the company repaid at maturity a $13.7 million, 9.77% mortgage
with New York Life with amounts available under its unsecured lines of credit.
The repayment of this loan unencumbered the company's Lancaster, PA property. On
September 10, 2005 a $7.0 million, 9.125% mortgage with New York Life matures
and the company currently expects to repay this loan with amounts available on
its unsecured lines of credit. The repayment of this loan will unencumber the
company's Commerce I, GA property.

On June 27, 2005 Moody's Investors Service announced an upgrade of Tanger's
senior unsecured debt rating to an investment grade rating of Baa3, citing
Tanger's success in integrating the Charter Oak properties, improved performance
and progress in unencumbering a number of its properties. The rating also
considers Tanger's laddered debt maturity schedule and adequate liquidity.

Tanger's total market capital as of June 30, 2005 increased over 20% from the
same period in 2004 to approximately $1.4 billion, with $481.1 million of debt
outstanding (excluding a debt premium of $7.9 million). The company's debt to
total market capital improved to 34.6% as of June 30, 2005 from 43.5% as of June
30, 2004.

As of June 30, 2005, $382.3 million, or 79% of Tanger's total debt, was at fixed
interest rates and the company had $45.3 million outstanding with $79.7 million
available on its unsecured lines of credit. During the second quarter Tanger
continued to improve its interest coverage ratio, which was 3.71 times for the
second quarter of 2005, as compared to 3.42 times interest coverage in the same
period last year.

2005 FFO Per Share Guidance

Based on current market conditions, the strength and stability of its core
portfolio, Tanger currently believes its net income for 2005 will be between
$0.56 and $0.60 per share and its FFO for 2005 will be between $1.93 and $1.97
per share. The company's earnings estimates do not include the impact of any
potential gains on the sale of land parcels or the impact of any potential sales
or acquisitions of properties. The following table provides the reconciliation
of estimated diluted FFO per share to estimated diluted net income per share:

For the twelve months ended December 31, 2005
Low Range High Range
Estimated diluted net income per share, excluding
gain/loss on the sale of real estate $ 0.56 $ 0.60
Minority interest, depreciation and amortization uniquely
significant to real estate including minority interest
share and our share of joint ventures (1.37) (1.37)
Estimated diluted FFO per share $ 1.93 $ 1.97

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Second Quarter Conference Call

Tanger will host a conference call to discuss its second quarter results for
analysts, investors and other interested parties on Wednesday, July 27, 2005, at
10:00 A.M. eastern time. To access the conference call, listeners should dial
1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers
Second Quarter Financial Results call. Alternatively, the call will be web cast
by CCBN and can be accessed at the "Tanger News" section of Tanger Factory
Outlet Centers, Inc.'s web site at www.tangeroutlet.com.

A telephone replay of the call will be available from July 27, 2005 starting at
12:00 P.M. Eastern Time through 11:59 P.M., August 5, 2005, by dialing
1-800-642-1687 (conference ID # 7347099). Additionally, an online archive of the
broadcast will also be available through August 5, 2005.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated,
self-administered and self-managed publicly traded REIT, presently has ownership
interests in or management responsibilities for 33 centers in 22 states coast to
coast, totaling approximately 8.7 million square feet of gross leasable area.
Tanger is filing a Form 8-K with the Securities and Exchange Commission that
includes a supplemental information package for the quarter ended June 30, 2005.
For more information on Tanger Outlet Centers, visit our web site at
www.tangeroutlet.com.

Estimates of future net income per share and FFO per share are by definition,
and certain other matters discussed in this press release regarding our
re-merchandising strategy, the renewal and re-tenanting of space, tenant sales
and sales trends, interest rates, fund from operations, the development of new
centers, the opening of ongoing expansions, coverage of the current dividend and
the impact of sales of land parcels may be, forward-looking statements within
the meaning of the federal securities laws. These forward-looking statements are
subject to risks and uncertainties. Actual results could differ materially from
those projected due to various factors including, but not limited to, the risks
associated with general economic and local real estate conditions, the
availability and cost of capital, 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, 2004.

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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,
2005 2004 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)

REVENUES
Base rentals (a) $ 33,528 $ 32,041 $ 65,389 $ 63,501
Percentage rentals 1,267 958 2,153 1,669
Expense reimbursements 12,620 13,010 26,917 24,896
Other income (b) 1,205 2,388 2,152 3,238
- ----------------------------------------------------------------------------------------------------------------------------
Total revenues 48,620 48,397 96,611 93,304
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating 14,611 14,719 30,851 28,142
General and administrative 3,711 3,254 6,755 6,411
Depreciation and amortization 11,420 12,955 24,350 25,112
- ----------------------------------------------------------------------------------------------------------------------------
Total expenses 29,742 30,928 61,956 59,665
- ----------------------------------------------------------------------------------------------------------------------------
Operating income 18,878 17,469 34,655 33,639
Interest expense 8,167 8,901 16,395 17,765
- ----------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of unconsolidated joint ventures,
minority interest and discontinued operations 10,711 8,568 18,260 15,874
Equity in earnings of unconsolidated joint ventures (c) 268 275 459 440
Minority interest
Consolidated joint venture (6,727) (6,619) (13,351) (13,212)
Operating partnership (772) (409) (974) (568)
- ----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 3,480 1,815 4,394 2,534
Discontinued operations, net of minority interest (d) - 1,930 - 2,223
- ----------------------------------------------------------------------------------------------------------------------------
Income before loss on sale of real estate 3,480 3,745 4,394 4,757
Loss on sale of real estate, net of minority interest - - (3,843) -
- ----------------------------------------------------------------------------------------------------------------------------
Net income $ 3,480 $ 3,745 $ 551 $ 4,757
- ----------------------------------------------------------------------------------------------------------------------------

Basic earnings per common share:
Income from continuing operations $ .13 $ .07 $ .02 $ .09
Net income $ .13 $ .14 $ .02 $ .18
- ----------------------------------------------------------------------------------------------------------------------------

Diluted earnings per common share:
Income from continuing operations $ .13 $ .07 $ .02 $ .09
Net income $ .13 $ .14 $ .02 $ .18
- ----------------------------------------------------------------------------------------------------------------------------

Funds from operations (FFO) $ 15,703 $ 15,606 $ 30,233 $ 29,499
FFO per common share - diluted $ 0.47 $ 0.47 $ 0.90 $ 0.89
- ----------------------------------------------------------------------------------------------------------------------------

Summary of discontinued operations (d)
Operating income (loss) from discontinued operations $ - $ 278 $ - $ 642
Gain on sale of real estate - 2,084 - 2,084
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from discontinued operations - 2,362 - 2,726
Minority interest in discontinued operations - (432) - (503)
- ----------------------------------------------------------------------------------------------------------------------------
Discontinued operations, net of minority interest $ - $ 1,930 $ - $ 2,223
- ----------------------------------------------------------------------------------------------------------------------------


(a) Includes straight-line rent and market rent adjustments of $1,151 and $444
for the three months ended and $1,310 and $588 for the six months ended
June 30, 2005 and 2004, respectively.
(b) Includes gains on sales of outparcels of land of $127 and $1,219 for the
three and six months ended June 30, 2005 and 2004, respectively.
(c) Includes Myrtle Beach, South Carolina Hwy 17 property which is operated by
us through a 50% ownership joint venture.
(d) In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal
of Long Lived Assets", the results of operations for properties disposed of
during the year in which we have no significant continuing involvement have
been reported above as discontinued operations for both the current and
prior periods presented.

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

June 30, December 31,
2005 2004
- ---------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
Rental property

Land $ 113,284 $ 113,830
Buildings, improvements and fixtures 956,440 963,563
Construction in progress 6,044 -
- ---------------------------------------------------------------------------------------------------------------------------
1,075,768 1,077,393
Accumulated depreciation (237,688) (224,622)
- ---------------------------------------------------------------------------------------------------------------------------
Rental property, net 838,080 852,771
Cash and cash equivalents 3,543 4,103
Deferred charges, net 54,818 58,851
Other assets 21,785 20,653
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 918,226 $ 936,378
- ---------------------------------------------------------------------------------------------------------------------------

LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Liabilities
Long-term debt
Senior, unsecured notes $ 100,000 $ 100,000
Mortgages payable (including a premium of $7,916 and $9,346 respectively) 290,197 308,342
Unsecured note 53,500 53,500
Unsecured lines of credit 45,330 26,165
- ---------------------------------------------------------------------------------------------------------------------------
489,027 488,007
Construction trade payables 9,231 11,918
Accounts payable and accrued expenses 16,984 17,026
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 515,242 516,951
- ---------------------------------------------------------------------------------------------------------------------------
Commitments
Minority interests
Consolidated joint venture 225,103 222,673
Operating partnership 31,963 35,621
- ---------------------------------------------------------------------------------------------------------------------------
Total minority interests 257,066 258,294
- ---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common shares, $.01 par value, 50,000,000 shares authorized,
27,695,016 and 27,443,016 shares issued and outstanding
at June 30, 2005 and December 31, 2004 277 274
Paid in capital 278,811 274,340
Distributions in excess of net income (126,436) (109,506)
Deferred compensation (6,372) (3,975)
Accumulated other comprehensive loss (362) -
- ---------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 145,918 161,133
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interests and shareholders' equity $ 918,226 $ 936,378
- ---------------------------------------------------------------------------------------------------------------------------


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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,
2005 2004 2005 2004
- ---------------------------------------------------------------------------------------------------------------------------
Funds From Operations:

Net income $ 3,480 $ 3,745 $ 551 $ 4,757
Adjusted for:
Minority interest in operating partnership 772 408 974 568
Minority interest adjustment - consolidated joint venture (277) (329) (108) (296)
Minority interest, depreciation and amortization
attributable to discontinued operations - 662 - 951
Depreciation and amortization uniquely significant to
real estate - consolidated 11,358 12,900 24,234 24,999
Depreciation and amortization uniquely significant to
real estate - unconsolidated joint venture 370 304 739 604
(Gain)/loss on sale of real estate - (2,084) 3,843 (2,084)
- ---------------------------------------------------------------------------------------------------------------------------
Funds from operations $ 15,703 $ 15,606 $ 30,233 $ 29,499
- ---------------------------------------------------------------------------------------------------------------------------
Funds from operations per share - diluted $ 0.47 $ 0.47 $ 0.90 $ 0.89
- ---------------------------------------------------------------------------------------------------------------------------


WEIGHTED AVERAGE SHARES
Basic weighted average common shares 27,357 27,008 27,330 26,840
Effect of outstanding share and unit options 165 168 173 232
Effect of unvested restricted share awards 54 12 43 10
- ---------------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
earnings per share computations) 27,576 27,188 27,546 27,082
Convertible operating partnership units (a) 6,067 6,067 6,067 6,067
- ---------------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
funds from operations per share computations) 33,643 33,255 33,613 33,149
- ---------------------------------------------------------------------------------------------------------------------------

OTHER INFORMATION
Gross leasable area open at end of period -
Wholly owned 4,923 5,240 4,923 5,240
Partially owned - consolidated (b) 3,271 3,273 3,271 3,273
Partially owned - unconsolidated (c) 402 374 402 374
Managed 65 434 65 434
- ---------------------------------------------------------------------------------------------------------------------------
Total gross leasable area open at end of period 8,661 9,321 8,661 9,321

Outlet centers in operation -
Wholly owned 22 24 22 24
Partially owned - consolidated (b) 9 9 9 9
Partially owned - unconsolidated (c) 1 1 1 1
Managed 1 4 1 4
- ---------------------------------------------------------------------------------------------------------------------------
Total outlet centers in operation 33 38 33 38

States operated in at end of period (b) (c) 22 23 22 23
Occupancy percentage at end of period (b) (c) 97% 95% 97% 95%
- ---------------------------------------------------------------------------------------------------------------------------

(a) The convertible operating partnership units (minority interest in operating
partnership) are not dilutive on earnings per share computed in accordance
with generally accepted accounting principles.
(b) Includes the Charter Oak portfolio which is operated by us through a 33%
ownership joint venture. However, these properties are consolidated for
financial reporting under FIN 46R.
(c) Includes Myrtle Beach, South Carolina Hwy 17 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 tocash
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.
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