10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on August 5, 2005
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-11986
TANGER FACTORY OUTLET CENTERS, INC.
(Exact name of Registrant as specified in its Charter)
NORTH CAROLINA 56-1815473
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3200 Northline Avenue, Suite 360, Greensboro, North Carolina 27408
(Address of principal executive offices)
(Zip code)
(336) 292-3010
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities and Exchange Act of 1934). Yes X No -
27,695,016 shares of Common Stock,
$.01 par value, outstanding as of July 22, 2005
1
TANGER FACTORY OUTLET CENTERS, INC.
Index
Part I. Financial Information
Page Number
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Operations
For the three and six months ended June 30, 2005 and 2004 3
Consolidated Balance Sheets
As of June 30, 2005 and December 31, 2004 4
Consolidated Statements of Cash Flows
For the six months ended June 30, 2005 and 2004 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk 26
Item 4. Controls and Procedures 26
Part II. Other Information
Item 1. Legal proceedings 27
Item 4. Submission of Matters to a Vote of Security Holders 27
Item 6. Exhibits and Reports on Form 8-K 27
Signatures 28
2
The accompanying notes are an integral part of these consolidated financial
statements.
3
The accompanying notes are an integral part of these consolidated financial
statements.
4
The accompanying notes are an integral part of these consolidated financial
statements.
5
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
1. Business
Tanger Factory Outlet Centers, Inc., a fully-integrated, self-administered,
self-managed real estate investment trust ("REIT"), develops, owns and operates
factory outlet centers. We are recognized as one of the largest owners and
operators of factory outlet centers in the United States of America with
ownership interests in or management responsibilities for 33 centers in 22
states totaling 8.7 million square feet of gross leasble area ("GLA") as of June
30, 2005. We provide all development, leasing and management services for our
centers. Unless the context indicates otherwise, the term the "Company" refers
to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating
Partnership" refers to Tanger Properties Limited Partnership and subsidiaries.
The terms "we", "our" and "us" refer to the Company or the Company and the
Operating Partnership together, as the context requires.
Our factory outlet centers and other assets are held by and all of our
operations are conducted by the Operating Partnership. The majority of the units
of partnership interest issued by the Operating Partnership (the "Units") are
held by two wholly owned subsidiaries, the Tanger GP and the Tanger LP Trust.
The Tanger GP Trust controls the Operating Partnership as its sole general
partner. The Tanger LP Trust holds a limited partnership interest. All of the
remaining units are owned by the Tanger Family through the Tanger Family Limited
Partnership ("TFLP").
As of June 30, 2005, our wholly owned subsidiaries owned 13,847,508 Units and
TFLP owned 3,033,305 Units. The Operating Partnership and TFLP's Units are
exchangeable, subject to certain limitations to preserve our status as a REIT,
on a two-for-one basis for our common shares.
2. Basis of Presentation
Our unaudited consolidated financial statements have been prepared pursuant to
accounting principles generally accepted in the United States of America and
should be read in conjunction with the consolidated financial statements and
notes thereto of our Annual Report on Form 10-K for the year ended December 31,
2004. Certain information and note disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to the
Securities and Exchange Commission's ("SEC") rules and regulations, although
management believes that the disclosures are adequate to make the information
presented not misleading.
The accompanying unaudited consolidated financial statements include our
accounts, our wholly-owned subsidiaries, as well as the Operating Partnership
and its subsidiaries including accounts of joint ventures required to be
consolidated under the provisions of Financial Accounting Standards Board
Interpretation No. 46 (Revised 2003): "Consolidation of Variable Interest
Entities: An Interpretation of ARB No. 51 ("FIN 46R") and reflect, in the
opinion of management, all adjustments necessary for a fair presentation of the
interim consolidated financial statements. All such adjustments are of a normal
and recurring nature. Intercompany balances and transactions have been
eliminated in consolidation.
6
Investments in real estate joint ventures that represent non-controlling
ownership interests are accounted for using the equity method of accounting.
These investments are recorded initially at cost and subsequently adjusted for
our net equity in the venture's income (loss) and cash contributions and
distributions. Our investments are included in other assets in our consolidated
balance sheets.
3. Development of Rental Properties
Locust Grove, Georgia
We are currently underway with construction of a 46,400 square foot expansion at
our center located in Locust Grove, Georgia. The estimated cost of the expansion
is approximately $6.6 million. We currently expect to complete the expansion
with stores commencing operations during the fall of 2005. Tenants will include
Polo/Ralph Lauren, Sketchers, Children's Place and others. Upon completion of
the expansion, our Locust Grove center will total approximately 294,000 square
feet.
Foley, Alabama
We are currently underway with construction of a 21,000 square foot expansion at
our center located in Foley, Alabama. The estimated cost of the expansion is
approximately $3.8 million. We currently expect 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.
Commitments to complete construction of the expansions to the existing
properties and other capital expenditure requirements amounted to approximately
$3.0 million at June 30, 2005. Commitments for construction represent only those
costs contractually required to be paid by us.
Interest costs capitalized during the three months ended June 30, 2005 and 2004
amounted to $80,000 and $63,000, respectively, and for the six months ended June
30, 2005 and 2004 amounted to $113,000 and $124,000, respectively.
4. Investments in Unconsolidated Real Estate Joint Ventures
Our investments in unconsolidated real estate joint ventures aggregated $6.8 and
$6.7 million as of June 30, 2005 and December 31, 2004, respectively. We are
members of the following unconsolidated real estate joint ventures:
Our
Joint Venture Ownership % Project Location
------------- ------------ -----------------
TWMB Associates, LLC 50% Myrtle Beach, South Carolina
Tanger Wisconsin Dells, LLC 50% Wisconsin Dells, Wisconsin
Deer Park Enterprise, LLC 33% Deer Park, New York
7
These investments are recorded initially at cost and subsequently adjusted for
our net equity in the venture's income (loss) and cash contributions and
distributions. Our investments in real estate joint ventures are included in
other assets and are also reduced by 50% of the profits earned for leasing and
development services we provide to TWMB Associates, LLC ("TWMB"), a joint
venture in which we have a 50% ownership interest. The following management,
leasing and development fees were recognized from services provided to TWMB
during the three and six month periods ended June 30, 2005 and 2004 (in
thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---------------------- ------------- ----------- ------------ -------------
Fee:
Management $ 78 $ 69 $ 156 $ 137
Leasing --- 78 5 139
Development --- 17 --- 22
---------------------- ------------- ----------- ------------ -------------
Total Fees $ 78 $ 164 $ 161 $ 298
---------------------- ------------- ----------- ------------ -------------
Our carrying value of investments in unconsolidated joint ventures differs from
our share of the assets reported in the "Summary Balance Sheets - Unconsolidated
Joint Ventures" shown below due to adjustments to the book basis, including
intercompany profits on sales of services that are capitalized by the
unconsolidated joint ventures. The differences in basis are amortized over the
various useful lives of the related assets.
TWMB Associates, LLC
During March 2005,TWMB, entered into an interest rate swap agreement with Bank
of America for a notional amount of $35 million for five years. Under this
agreement, TWMB receives a floating interest rate based on the 30 day LIBOR
index and pays a fixed interest rate of 4.59%. This swap effectively changes the
payment of interest on $35 million of variable rate mortgage debt to fixed rate
debt for the contract period at a rate of 5.99%.
In April 2005, TWMB obtained permanent financing to replace the construction
loan debt that was utilized to build the outlet center in Myrtle Beach, South
Carolina. The new mortgage amount is $35.8 million with a rate of LIBOR + 1.40%.
The note is for a term of five years with payments of interest only. In April
2010, TWMB has the option to extend the maturity date of the loan two more years
until 2012. All debt incurred by this unconsolidated joint venture is
collateralized by its property.
Tanger Wisconsin Dells, LLC
In March 2005, we established Tanger Wisconsin Dells, LLC ("Wisconsin Dells"), a
joint venture in which we have a 50% ownership interest with Tall Pines
Development of Wisconsin Dells, LLC ("Tall Pines") as our venture partner, to
construct and operate a Tanger Outlet center in Wisconsin Dells, Wisconsin. We
have begun the early development and leasing of the site and we and our partner
each made a capital contribution of $50,000 to the joint venture in June 2005.
We currently expect the center to be approximately 250,000 square feet upon
total build out with the initial phase scheduled to open in 2006. We have
evaluated the accounting treatment for the joint venture under the guidance of
FIN 46R and have concluded based on the current facts and circumstances that the
equity method of accounting should be used to account for the joint venture.
8
Deer Park Enterprise, LLC
In October 2003, Deer Park Enterprise, LLC ("Deer Park"), a joint venture in
which we have a one-third ownership interest, entered into a sale-leaseback
transaction for the location on which it ultimately will develop a shopping
center that will contain both outlet and big box retail tenants in Deer Park,
New York. The agreement consisted of the sale of the property to Deer Park for
$29 million which was being leased back to the seller under an operating lease
agreement. In November 2004, the tenant gave notice (within the terms of the
lease) that they intended to, and subsequently did, vacate the facility in May
2005. Annual rents received from the tenant were $3.4 million. During the first
six months of 2005, we made additional equity contributions totaling $900,000 to
Deer Park. Both of the other members made equity contributions equal to ours
during the period.
Condensed combined summary unaudited financial information of joint ventures
accounted for using the equity method is as follows (in thousands):
As of As of
Summary Balance Sheets June 30, December 31,
- Unconsolidated Joint Ventures: 2005 2004
- ---------------------------------------------- ------------ ------------------
Assets:
Investment properties at cost, net $67,446 $69,865
Cash and cash equivalents 4,253 2,449
Deferred charges, net 1,433 1,973
Other assets 4,245 2,826
- ---------------------------------------------- ------------ ------------------
Total assets $77,377 $77,113
- ---------------------------------------------- ------------ ------------------
Liabilities and Owners' Equity:
Mortgages payable $61,024 $59,708
Construction trade payables 477 578
Accounts payable and other liabilities 1,956 702
- ---------------------------------------------- ------------ ------------------
Total liabilities 63,457 60,988
Owners' equity 13,920 16,125
- ---------------------------------------------- ------------ ------------------
Total liabilities and owners' equity $77,377 $77,113
- ---------------------------------------------- ------------ ------------------
9
5. Disposition of Properties
In February 2005, we completed the sale of the outlet center on a portion of our
property located in Seymour, Indiana and recognized a loss of $3.8 million, net
of minority interest of $847,000. Net proceeds received from the sale of the
center were approximately $2.0 million. We continue to have a significant
involvement in this location by retaining several outparcels and significant
excess land adjacent to the disposed property. As such, the results of
operations from the property continue to be recorded as a component of income
from continuing operations and the loss on sale of real estate is reflected
outside the caption discontinued operations under the guidance of Regulation S-X
210.3-15.
In June 2004, we completed the sale of two non-core properties located in North
Conway, New Hampshire. Net proceeds received from the sales of these properties
were approximately $6.5 million. We recorded a gain on sale of real estate of
approximately $2.1 million which is included in discontinued operations for the
three and six months ended June 30, 2004.
Below is a summary of the results of operations for the North Conway, New
Hampshire and Dalton, Georgia properties sold during the second and third
quarters of 2004, which are accounted for under the provisions of Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("FAS 144") which requires that all current and
prior periods presented reflect the discontinued operations (in thousands):
6. Debt
In April 2005, we paid in full at maturity a $13.7 million, 9.77% mortgage with
New York Life with amounts available under our unsecured lines of credit. The
collateral securing the mortgage, our Lancaster, Pennsylvania property, was
released upon satisfaction of the loan.
10
7. Other Comprehensive Income - Derivative Financial Instruments
During the first quarter of 2005, TWMB entered into an interest rate swap.
TWMB's interest rate swap agreement has been designated as a cash flow hedge and
is carried on TWMB's balance sheet at fair value. At June 30, 2005, our portion
of the fair value of TWMB's hedge is recorded as a reduction to investment in
joint ventures of approximately $442,000.
8. Earnings Per Share
The following table sets forth a reconciliation of the numerators and
denominators in computing earnings per share in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share (in thousands, except
per share amounts):
11
The computation of diluted earnings per share excludes options to purchase
common shares when the exercise price is greater than the average market price
of the common shares for the period. Options excluded from the computation of
diluted earnings per share were 7,000 and 214,000 for the three months ended
June 30, 2005 and 2004, respectively. For the six months ended June 30, 2005 and
2004, 6,000 and 107,000 options were excluded from the computation,
respectively. The assumed conversion of the partnership units held by the
minority interest limited partner as of the beginning of the year, which would
result in the elimination of earnings allocated to the minority interest in the
Operating Partnership, would have no impact on earnings per share since the
allocation of earnings to a partnership unit is equivalent to earnings allocated
to a common share.
9. Deferred Compensation
In March 2005, the Board of Directors approved the grant of 138,000 restricted
common shares to the independent directors and certain executive officers. As a
result of the granting of the restricted common shares, we recorded a charge to
deferred compensation of $3.1 million in the shareholders' equity section of the
consolidated balance sheet. Compensation expense related to the amortization of
the deferred compensation amount is being recognized in accordance with the
vesting schedule of the restricted shares. The independent directors' restricted
common shares vest ratably over a three year period. The executive officer's
restricted common shares vest over a five year period with 50% of the award
vesting ratably over that period and 50% vesting based on the attainment of
certain market performance criteria.
10. Non-Cash Investing and Financing Activities
We purchase capital equipment and incur costs relating to construction of
facilities, including tenant finishing allowances. Capitalized costs included in
construction trade payables as of June 30, 2005 and 2004 amounted to $9.2
million and $6.3 million, respectively. We recognized charges to deferred
compensation related to the issuance of restricted common shares and share and
unit options of $3.1 and $4.4 million during the six month periods ended June
30, 2005 and 2004, respectively.
11. New Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment"
("FAS 123R"), which replaces FAS 123 which we adopted effective January 1, 2003.
We expect to adopt FAS 123R on January 1, 2006. We are currently evaluating the
effect of the adoption of FAS 123R on our consolidated financial statements.
In June 2005, the FASB ratified the EITF's consensus on Issue No. 04-5
"Determining Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the Limited Partners Have
Certain Rights". This consensus establishes the presumption that general
partners in a limited partnership control that limited partnership regardless of
the extent of the general partners ownership interest in the limited
partnership. The consensus further establishes that the rights of the limited
partners can overcome the presumption of control by the general partners, if the
limited partners have either (a) the substantive ability to dissolve (liquidate)
the limited partnership or otherwise remove the general partners without cause
or (b) substantive participating rights. Whether the presumption of control is
overcome is a matter of judgment based on the facts and circumstances, for which
the consensus provides additional guidance. This consensus is currently
applicable to us for new or modified partnerships, and will otherwise be
applicable to existing partnerships in 2006. This consensus applies to limited
partnerships or similar entities, such as limited liability companies that have
governing provisions that are the functional equivalent of a limited
partnership. We believe this consensus will have no impact on the accounting
treatment currently applied to our joint ventures.
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion should be read in conjunction with the unaudited
consolidated financial statements appearing elsewhere in this report. Historical
results and percentage relationships set forth in the unaudited, consolidated
statements of operations, including trends which might appear, are not
necessarily indicative of future operations. Unless the context indicates
otherwise, the term "Company" refers to Tanger Factory Outlet Centers, Inc. and
subsidiaries and the term "Operating Partnership" refers to Tanger Properties
Limited Partnership and subsidiaries. The terms "we", "our" and "us" refer to
the Company or the Company and the Operating Partnership together, as the text
requires.
The discussion of our results of operations reported in the unaudited,
consolidated statements of operations compares the three and six months ended
June 30, 2005 with the three and six months ended June 30, 2004. Certain
comparisons between the periods are made on a percentage basis as well as on a
weighted average gross leasable area ("GLA") basis, a technique which adjusts
for certain increases or decreases in the number of centers and corresponding
square feet related to the development, acquisition, expansion or disposition of
rental properties. The computation of weighted average GLA, however, does not
adjust for fluctuations in occupancy which may occur subsequent to the original
opening date.
Cautionary Statements
Certain statements made below are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We intend for such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Reform Act of 1995 and included
this statement for purposes of complying with these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
our future plans, strategies and expectations, are generally identifiable by use
of the words "believe", "expect", "intend", "anticipate", "estimate", "project",
or similar expressions. You should not rely on forward-looking statements since
they involve known and unknown risks, uncertainties and other factors which are,
in some cases, beyond our control and which could materially affect our actual
results, performance or achievements. Factors which may cause actual results to
differ materially from current expectations include, but are not limited to, the
following:
- - national and local general economic and market conditions;
- - demographic changes; our ability to sustain, manage or forecast our growth;
existing government regulations and changes in, or the failure to comply
with, government regulations;
- - adverse publicity; liability and other claims asserted against us;
- - competition;
- - the risk that we may not be able to finance our planned development
activities;
- - risks related to the retail real estate industry in which we compete,
including the potential adverse impact of external factors such as
inflation, tenant demand for space, consumer confidence, unemployment rates
and consumer tastes and preferences;
- - the risk that historically high fuel prices may impact consumer travel and
spending habits;
13
- - risks associated with our development activities, such as the potential for
cost overruns, delays and lack of predictability with respect to the
financial returns associated with these development activities;
- - risks associated with real estate ownership, such as the potential adverse
impact of changes in the local economic climate on the revenues and the
value of our properties;
- - risks that we incur a material, uninsurable loss of our capital investment
and anticipated profits from one of our properties, such as those results
from wars, earthquakes or hurricanes;
- - risks that a significant number of tenants may become unable to meet their
lease obligations or that we may be unable to renew or re-lease a
significant amount of available space on economically favorable terms;
- - fluctuations and difficulty in forecasting operating results; changes in
business strategy or development plans;
- - business disruptions;
- - the ability to attract and retain qualified personnel;
- - the ability to realize planned costs savings in acquisitions; and
- - retention of earnings.
General Overview
At June 30, 2005, we had ownership interests in or management responsibilities
for 33 centers in 22 states totaling 8.7 million square feet compared to 38
centers in 23 states totaling 9.3 million square feet at June 30, 2004. The
activity in our portfolio of properties since June 30, 2004 is summarized below:
14
A summary of the operating results for the three and six months ended June 30,
2005 and 2004 is presented in the following table, expressed in amounts
calculated on a weighted average GLA basis.
(1) Represents properties that are currently held through a consolidated joint
venture in which we own a one-third interest.
(2) Represents property that is currently held through an unconsolidated joint
venture in which we own a 50% interest.
(3) Represents GLA of wholly-owned and partially owned consolidated operating
properties weighted by months of operation. GLA is not adjusted for fluctuations
in occupancy that may occur subsequent to the original opening date. Excludes
GLA of properties for which their results are included in discontinued
operations.
(4) Represents occupancy only at centers in which we have an ownership interest.
15
The table set forth below summarizes certain information with respect to our
existing centers in which we have an ownership interest as of June 30, 2005.
GLA %
Location (sq. ft.) Occupied
- ------------------------------------------- --------------- --------------
Riverhead, NY (1) 729,497 99
Rehoboth, DE (1) (2) 568,873 100
Foley, AL (2) 535,494 99
San Marcos, TX 442,510 99
Myrtle Beach Hwy 501, SC (2) 427,417 93
Sevierville, TN (1) 419,038 100
Myrtle Beach Hwy 17, SC (1) (3) 401,992 100
Hilton Head, SC (2) 393,094 90
Commerce II, GA 340,656 99
Howell, MI 324,631 96
Park City, UT (2) 300,602 99
Westbrook, CT (2) 291,051 92
Branson, MO 277,883 100
Williamsburg, IA 277,230 96
Lincoln City, OR (2) 270,280 92
Tuscola, IL (2) 256,514 76
Lancaster, PA 255,152 99
Locust Grove, GA 247,454 98
Gonzales, LA 245,199 100
Tilton, NH (2) 227,998 96
Fort Meyers, FL 198,924 91
Commerce I, GA 185,750 86
Terrell, TX 177,490 99
North Branch, MN 134,480 100
West Branch, MI 112,120 97
Barstow, CA 108,950 98
Blowing Rock, NC 105,332 100
Pigeon Forge, TN (1) 94,694 96
Nags Head, NC 82,178 100
Boaz, AL 79,575 95
Kittery I, ME 59,694 100
Kittery II, ME 24,619 100
- ------------------------------------------- --------------- --------
8,596,371 97
- ------------------------------------------ ---------------- --------
(1) These properties or a portion thereof are subject to a ground lease.
(2) Represents properties that are currently held through a consolidated joint
venture in which we own a one-third interest.
(3) Represents property that is currently held through an unconsolidated joint
venture in which we own a 50% interest.
16
The table set forth below summarizes certain information as of June 30, 2005
related to GLA and debt with respect to our existing centers in which we have an
ownership interest and which serve as collateral for existing mortgage loans.
17
RESULTS OF OPERATIONS
Comparison of the three months ended June 30, 2005 to the three months ended
June 30, 2004
Base rentals increased $1.5 million, or 5%, in the 2005 period when compared to
the same period in 2004. The increase is primarily due to an increase in the
overall occupancy rate and increasing rental rates on renewals. Base rent per
weighted average GLA increased by $.25 per square foot from $3.84 per square
foot in the 2004 period to $4.09 per square foot in the 2005 period. The overall
portfolio occupancy at June 30, 2005 increased 2% compared to June 30, 2004 from
95% to 97%, while the average increase in base rental rates on lease renewals
and re-tenanting of vacant space during the 2005 period was 6%. Also, base rent
is impacted by the amortization of above/below market rate lease values recorded
as a part of the required purchase price allocation associated with the
acquisition of the Charter Oaks Partners' portfolio of nine factory outlet
centers totaling 3.3 million square feet in December 2003. We and an affiliate
of Blackstone Real Estate Advisors ("Blackstone") acquired the portfolio through
a consolidated joint venture in the form of a limited liability company, COROC
Holdings, LLC ("COROC"). The values of the above and below market leases are
amortized and recorded as either an increase (in the case of below market
leases) or a decrease (in the case of above market leases) to rental income over
the remaining term of the associated lease. For the 2005 period, we recorded an
increase of $613,000 to rental income for the net amortization of market leases
compared with an increase of $310,000 for the 2004 period. If a tenant vacates
its space prior to the contractual termination of the lease and no rental
payments are being made on the lease, any unamortized balance of the related
above/below market lease value will be written off and could materially impact
our net income positively or negatively. For the period from June 30, 2004 to
June 30, 2005, none of our centers experienced a negative occupancy trend of
more than 10%.
Percentage rentals, which represent revenues based on a percentage of tenants'
sales volume above predetermined levels (the "breakpoint"), increased $309,000
or 32%, and on a weighted average GLA basis, increased $.04 per square foot in
2005 compared to 2004. The percentage rents in 2004 were reduced by an
allocation to the previous owner of the COROC portfolio for their pro-rata share
of percentage rents associated with tenants whose sales lease year began prior
to December 19, 2003, the date of COROC's acquisition of the portfolio. 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
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 each comparison
period.
Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses, generally fluctuate consistently with the
related reimbursable property operating expenses. Expense reimbursements,
expressed as a percentage of property operating expenses, decreased from 88% in
the 2004 period to 86% in the 2005 period primarily as a result of higher
non-reimbursable expenses.
Other income decreased $1.2 million, or 50%, in 2005 compared to 2004 and on a
weighted average GLA basis, decreased $.14 per square foot from $.29 to $.15.
Other income in the 2004 period includes gains from the sale of outparcels of
land of $1.2 million compared to one outparcel sale in the 2005 period with a
related gain of approximately $127,000.
18
General and administrative expenses increased $457,000, or 14%, in the 2005
period as compared to the 2004 period and on a weighted average GLA basis,
increased $.06 from $.39 to $.45. The increase is primarily due to compensation
expense related to employee share options in the second quarter of 2004 and
restricted shares granted in 2004 and 2005 all of which are accounted for under
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"). As a percentage of total revenues, general and
administrative expenses increased from 7% in the 2004 to 8% in 2005.
Depreciation and amortization per weighted average GLA decreased from $1.55 per
square foot in the 2004 period to $1.39 per square foot in the 2005 period. This
was due principally to the accelerated depreciation and amortization of certain
assets in the acquisition of the COROC properties in December 2003 accounted for
under Statement of Financial Accounting Standards No. 141 "Business
Combinations" ("FAS 141") for tenants that terminated their leases during the
2004 period.
Interest expense decreased $734,000, or 8%, during the 2005 period as compared
to 2004 period due primarily to the decrease in overall debt outstanding in the
2005 period versus the 2004 period. Outstanding debt has been reduced through
proceeds from property sales during 2004 and 2005 and proceeds from the exercise
of employee share options.
During the second and third quarters of 2004, we sold properties in North
Conway, New Hampshire and Dalton, Georgia that qualified for treatment as
discontinued operations based on the guidance of Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("FAS 144"). For these properties, the results of operations
from the first quarter of 2004 are recorded in discontinued operations.
Comparison of the six months ended June 30, 2005 to the six months ended June
30, 2004
Base rentals increased $1.9 million, or 3%, in the 2005 period when compared to
the same period in 2004. The increase is primarily due to an increase in the
overall occupancy rate and increasing rental rates on renewals. Base rent per
weighted average GLA increased by $.33 per square foot from $7.61 per square
foot in the 2004 period to $7.94 per square foot in the 2005 period. The overall
portfolio occupancy at June 30, 2005 increased 2% compared to June 30, 2004 from
95% to 97%, while the average increase in base rental rates on lease renewals
and re-tenanting of vacant space during the 2005 period was 7%. Also, base rent
is impacted by the amortization of above/below market rate lease values recorded
as part of the required purchase price allocation associated with the
acquisition of the COROC portfolio. The values of the above and below market
leases are amortized and recorded as either an increase (in the case of below
market leases) or a decrease (in the case of above market leases) to rental
income over the remaining term of the associated lease. For the 2005 period, we
recorded an increase of $659,000 to rental income for the net amortization of
market leases compared with an increase of $370,000 for the 2004 period. If a
tenant vacates its space prior to the contractual termination of the lease and
no rental payments are being made on the lease, any unamortized balance of the
related above/below market lease value will be written off and could materially
impact our net income positively or negatively. For the period from June 30,
2004 to June 30, 2005, none of our centers experienced a negative occupancy
trend of more than 10%.
19
Percentage rentals, which represent revenues based on a percentage of tenants'
sales volume above predetermined levels (the "breakpoint"), increased $484,000
or 29%, and on a weighted average GLA basis, increased $.06 per square foot to
$.26 in 2005 compared to $.20 in 2004. The percentage rents in 2004 were reduced
by an allocation to the previous owner of the COROC portfolio for their pro-rata
share of percentage rents associated with tenants whose sales lease year began
prior to December 19, 2003, the date of COROC's acquisition of the portfolio.
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 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 each
comparison period.
Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses, generally fluctuate consistently with the
related reimbursable property operating expenses. Expense reimbursements,
expressed as a percentage of property operating expenses, decreased from 88% in
the 2004 period to 87% in the 2005 period primarily as a result of higher
non-reimbursable expenses.
Other income decreased $1.1 million, or 34%, in 2005 compared to 2004 and on a
weighted average GLA basis, decreased $.13 per square foot from $.39 to $.26.
Other income in the 2004 period includes gains from the sale of outparcels of
land of $1.2 million compared to one outparcel sale in the 2005 period with a
related gain of approximately $127,000.
Property operating expenses increased by $2.7 million, or 10%, in the 2005
period as compared to the 2004 period and, on a weighted average GLA basis,
increased $.36 per square foot from $3.38 to $3.74. The increase is due
primarily to higher snow removal costs in our northeastern properties in 2005
versus 2004 and other increases in advertising and common area maintenance
expenses.
General and administrative expenses increased $344,000, or 5%, in the 2005
period as compared to the 2004 period. The increase is primarily due to
compensation expense related to employee share options in the second quarter of
2004 and restricted shares granted in 2004 and 2005 all of which are accounted
for under FAS 123. As a percentage of total revenues, general and administrative
expenses were 7% in both the 2004 and 2005 periods.
Depreciation and amortization per weighted average GLA decreased from $3.01 per
square foot in the 2004 period to $2.96 per square foot in the 2005 period. This
was due principally to the accelerated depreciation and amortization of certain
assets in the acquisition of the COROC properties in December 2003 accounted for
under FAS 141 for tenants that terminated their leases during the 2004 period.
Interest expense decreased $1.4 million or 8%, during the 2005 period as
compared to 2004 period due primarily to the decrease in overall debt
outstanding in the 2005 period versus the 2004 period. Outstanding debt has been
reduced through proceeds from property sales during 2004 and 2005 and proceeds
from the exercise of employee share options.
During the first quarter of 2005 we sold our center in Seymour, Indiana.
However, under the provisions of FAS 144, the sale did not qualify for treatment
as discontinued operations. During the second and third quarters of 2004, we
sold properties in North Conway, New Hampshire and Dalton, Georgia that
qualified for treatment as discontinued operations based on the guidance of FAS
144. For these properties, the results of operations from the first quarter of
2004 are recorded in discontinued operations.
20
We recorded a loss on sale of real estate of $3.8 million, net of minority
interest of $847,000, for the sale of the outlet center at our property in
Seymour, Indiana in February 2005. Net proceeds received for the center were
$2.0 million.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $41.3 million and $41.1 million
for the six months ended June 30, 2005 and 2004, respectively. Net cash used in
investing activities was $13.6 million and $5.5 million during the first six
months of 2005 and 2004, respectively. The increase was due primarily to cash
used in the 2005 period for the expansions at our Locust Grove, Georgia and
Foley, Alabama centers and significant tenant allowances paid. Net cash used in
financing activities was $28.3 million and $36.8 million during the first six
months of 2005 and 2004, respectively. Cash used was lower in 2005 due to a
change of $28 million in cash provided by net proceeds from debt from 2004 to
2005, offset by the sale of common shares for net proceeds of $13.2 million and
proceeds from the exercise of share options of $7.0 million in 2004.
Developments, Dispositions and Joint Ventures
Any developments or expansions that we, or a joint venture that we are involved
in, have planned or anticipated may not be started or completed as scheduled, or
may not result in accretive net income. In addition, we regularly evaluate
acquisition or disposition proposals and engage from time to time in
negotiations for acquisitions or dispositions of properties. We may also enter
into letters of intent for the purchase or sale of properties. Any prospective
acquisition or disposition that is being evaluated or which is subject to a
letter of intent may not be consummated, or if consummated, may not result in an
increase in net income.
DEVELOPMENTS
We are currently underway with the construction of a 46,400 square foot
expansion at our center located in Locust Grove, Georgia. The estimated cost of
the expansion is approximately $6.6 million. We currently expect to complete the
expansion with stores commencing operations during the fall of 2005. Tenants
will include Polo/Ralph Lauren, Sketchers, Children's Place and others. Upon
completion of the expansion, our Locust Grove center will total approximately
294,000 square feet.
We are currently underway with construction of a 21,000 square foot expansion at
our center located in Foley, Alabama. The estimated cost of the expansion is
approximately $3.8 million. We currently expect 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.
We have an option to purchase land and have begun the early development and
leasing of a site located near Charleston, South Carolina. We currently expect
the center to be approximately 350,000 square feet upon total build out with the
initial phase scheduled to open in 2006.
We have an option to purchase land and have begun the early development and
leasing of a site located approximately 30 miles south of Pittsburgh,
Pennsylvania. We currently expect the center to be approximately 420,000 square
feet upon total build out with the initial phase scheduled to open in 2007.
21
DISPOSITIONS
In February 2005, we completed the sale of the outlet center on a portion of our
property located in Seymour, Indiana. Net proceeds received from the sale of the
center were approximately $2.0 million. We recorded a loss on sale of real
estate of $3.8 million, net of minority interest of $847,000, during the first
quarter of 2005. We continue to have a significant involvement in this location
by retaining several outparcels and significant excess land adjacent to the
disposed property. Management is considering various alternatives, including the
potential sale of the remaining property.
JOINT VENTURES
TWMB Associates, LLC
During March 2005, TWMB Associates, LLC ("TWMB"), a joint venture in which we
have a 50% ownership interest, entered into an interest rate swap agreement with
Bank of America for a notional amount of $35 million for five years. Under this
agreement, TWMB receives a floating interest rate based on the 30 day LIBOR
index and pays a fixed interest rate of 4.59%. This swap effectively changes the
payment of interest on $35 million of variable rate mortgage debt to fixed rate
debt for the contract period at a rate of 5.99%.
In April 2005, TWMB obtained permanent financing to replace the construction
loan debt that was utilized to build the outlet center in Myrtle Beach, South
Carolina. The new mortgage amount is $35.8 million with a rate of LIBOR + 1.40%.
The note is for a term of five years with payments of interest only. In April
2010, TWMB has the option to extend the maturity date of the loan two more years
until 2012. All debt incurred by this unconsolidated joint venture is
collateralized by its property.
Either member in TWMB has the right to initiate the sale or purchase of the
other party's interest at certain times. If such action is initiated, one member
would determine the fair market value purchase price of the venture and the
other would determine whether they would take the role of seller or purchaser.
The members' roles in this transaction would be determined by the tossing of a
coin, commonly known as a Russian roulette provision. If either partner enacts
this provision and depending on our role in the transaction as either seller or
purchaser, we could potentially incur a cash outflow for the purchase of our
member's interest. However, we do not expect this event to occur in the near
future based on the positive results and operating performance of this outlet
center located in the Myrtle Beach, South Carolina area.
Tanger Wisconsin Dells, LLC
In March 2005, we established Tanger Wisconsin Dells, LLC ("Wisconsin Dells"), a
joint venture in which we have a 50% ownership interest with Tall Pines
Development of Wisconsin Dells, LLC ("Tall Pines") as our venture partner, to
construct and operate a Tanger Outlet center in Wisconsin Dells, Wisconsin. In
June 2005, we and our partner each made a capital contribution of $50,000 to the
joint venture. We have begun the early development and leasing of the site. We
currently expect the center to be approximately 250,000 square feet upon total
build out with the initial phase scheduled to open in 2006.
22
Deer Park Enterprise, LLC
In October 2003, Deer Park Enterprise, LLC ("Deer Park"), a joint venture in
which we have a one-third ownership interest, entered into a sale-leaseback
transaction for the location on which it ultimately will develop a shopping
center that will contain both outlet and big box retail tenants in Deer Park,
New York. The agreement consisted of the sale of the property to Deer Park for
$29 million which was being leased back to the seller under an operating lease
agreement. In November 2004, the tenant gave notice (within the terms of the
lease) that they intended to, and subsequently did, vacate the facility in May
2005. Annual rents received from the tenant were $3.4 million. During the first
six months of 2005, we made additional equity contributions totaling $900,000 to
Deer Park. Both of the other members made equity contributions equal to ours
during the period.
Financing Arrangements
In April 2005, we paid in full at maturity a $13.7 million, 9.77% mortgage with
New York Life with amounts available under our unsecured lines of credit. The
collateral securing the mortgage, our Lancaster, Pennsylvania property, was
released upon satisfaction of the loan. In September 2005, a $7.0 million,
9.125% mortgage with New York Life matures and we currently expect to pay off
the mortgage with amounts available under our unsecured lines of credit. The
collateral securing the mortgage, our Commerce I, Georgia property, will be
released upon satisfaction of the loan.
During June 2005, Moody's Investors Service announced an upgrade to our senior
unsecured debt rating to an investment grade rating of Baa3, citing our success
in integrating the Charter Oak portfolio of properties purchased in December
2003, improved performance and progress in unencumbering several of our
properties. The upgrade also considered our laddered debt maturity schedule and
adequate liquidity.
At June 30, 2005, approximately 41% of our outstanding long-term debt, excluding
debt premium, was unsecured and approximately 44% of the gross book value of our
real estate portfolio was unencumbered. The weighted average interest rate,
including loan cost amortization, on average debt outstanding for the three
months ended June 30, 2005 and 2004 was 7.35% and 7.54%, respectively.
We intend to retain the ability to raise additional capital, including public
debt or equity, to pursue attractive investment opportunities that may arise and
to otherwise act in a manner that we believe to be in our shareholders' best
interests. During the third quarter of 2005, we expect to replenish our shelf
registration to allow us to issue up to $600 million in either all debt or all
equity or any combination thereof. To generate capital for reinvestment into
other attractive investment opportunities, we may also consider the use of
additional operational and developmental joint ventures, selling certain
properties that do not meet our long-term investment criteria as well as
outparcels on existing properties.
We maintain unsecured, revolving lines of credit that provided for unsecured
borrowings of up to $125 million at June 30, 2005. All of our lines of credit
have maturity dates of June 30, 2007. Based on cash provided by operations,
existing credit facilities, ongoing negotiations with certain financial
institutions and our ability to sell debt or equity subject to market
conditions, we believe that we have access to the necessary financing to fund
the planned capital expenditures during 2005.
23
We anticipate that adequate cash will be available to fund our operating and
administrative expenses, regular debt service obligations, and the payment of
dividends in accordance with Real Estate Investment Trust ("REIT") requirements
in both the short and long term. Although we receive most of our rental payments
on a monthly basis, distributions to shareholders are made quarterly and
interest payments on the senior, unsecured notes are made semi-annually. Amounts
accumulated for such payments will be used in the interim to reduce the
outstanding borrowings under the existing lines of credit or invested in
short-term money market or other suitable instruments.
On July 14, 2005, our Board of Directors declared a $.3225 cash dividend per
common share payable on August 15, 2005 to each shareholder of record on July
29, 2005, and caused a $.6450 per Operating Partnership unit cash distribution
to be paid to the Operating Partnership's minority interest.
Off-Balance Sheet Arrangements
As of April 2005, upon obtaining permanent financing, we are no longer a party
to a joint and several guarantee with respect to the original $36.2 million
construction loan of the TWMB property. We are a party to a joint and several
guarantee with respect to the $19 million loan obtained by Deer Park related to
its potential site in Deer Park, New York.
New Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment"
("FAS 123R"), which replaces FAS 123 which we adopted effective January 1, 2003.
We expect to adopt FAS 123R on January 1, 2006. We are currently evaluating the
effect of the adoption of FAS 123R on our consolidated financial statements.
In June 2005, the FASB ratified the EITF s consensus on Issue No. 04-5
"Determining Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the Limited Partners Have
Certain Rights". This consensus establishes the presumption that general
partners in a limited partnership control that limited partnership regardless of
the extent of the general partners ownership interest in the limited
partnership. The consensus further establishes that the rights of the limited
partners can overcome the presumption of control by the general partners, if the
limited partners have either (a) the substantive ability to dissolve (liquidate)
the limited partnership or otherwise remove the general partners without cause
or (b) substantive participating rights. Whether the presumption of control is
overcome is a matter of judgment based on the facts and circumstances, for which
the consensus provides additional guidance. This consensus is currently
applicable to us for new or modified partnerships, and will otherwise be
applicable to existing partnerships in 2006. This consensus applies to limited
partnerships or similar entities, such as limited liability companies that have
governing provisions that are the functional equivalent of a limited
partnership. We believe this consensus will have no impact on the accounting
treatment currently applied to our joint ventures.
Critical Accounting Policies and Estimates
Refer to our 2004 Annual Report on Form 10-K for a discussion of our critical
accounting policies which include principles of consolidation, acquisition of
real estate, cost capitalization, impairment of long-lived assets and revenue
recognition. There have been no material changes to these policies in 2005.
24
Economic Conditions and Outlook
The majority of our leases contain provisions designed to mitigate the impact of
inflation. Such provisions include clauses for the escalation of base rent and
clauses enabling us to receive percentage rentals based on tenants' gross sales
(above predetermined levels, which we believe often are lower than traditional
retail industry standards) that generally increase as prices rise. Most of the
leases require the tenant to pay their share of property operating expenses,
including common area maintenance, real estate taxes, insurance and advertising
and promotion, thereby reducing exposure to increases in costs and operating
expenses resulting from inflation.
While factory outlet stores continue to be a profitable and fundamental
distribution channel for brand name manufacturers, some retail formats are more
successful than others. As typical in the retail industry, certain tenants have
closed, or will close certain stores by terminating their lease prior to its
natural expiration or as a result of filing for protection under bankruptcy
laws.
During 2005, we have approximately 1,821,000 square feet, or 21% of our
portfolio, coming up for renewal. If we were unable to successfully renew or
re-lease a significant amount of this space on favorable economic terms, the
loss in rent could have a material adverse effect on our results of operations.
As of June 30, 2005, we have renewed approximately 1,074,000 square feet, or 59%
of the square feet scheduled to expire in 2005. The existing tenants have
renewed at an average base rental rate approximately 8% higher than the expiring
rate. We also re-tenanted approximately 322,000 square feet of vacant space
during the first six months of 2005 at a 4% increase in the average base rental
rate from that which was previously charged. Our factory outlet centers
typically include well-known, national, brand name companies. By maintaining a
broad base of creditworthy tenants and a geographically diverse portfolio of
properties located across the United States, we reduce our operating and leasing
risks. No one tenant (including affiliates) accounted for more than 5.5% of our
combined base and percentage rental revenues for the three months ended June 30,
2005. Accordingly, we do not expect any material adverse impact on our results
of operations and financial condition as a result of leases to be renewed or
stores to be re-leased.
As of June 30, 2005 and 2004, our centers were 97% and 95% occupied,
respectively. Consistent with our long-term strategy of re-merchandising
centers, we will continue to hold space off the market until an appropriate
tenant is identified. While we believe this strategy will add value to our
centers in the long-term, it may reduce our average occupancy rates in the near
term.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to various market risks, including changes in interest rates.
Market risk is the potential loss arising from adverse changes in market rates
and prices, such as interest rates. We do not enter into derivatives or other
financial instruments for trading or speculative purposes.
We negotiate long-term fixed rate debt instruments and enter into interest rate
swap agreements to manage our exposure to interest rate changes. The swaps
involve the exchange of fixed and variable interest rate payments based on a
contractual principal amount and time period. Payments or receipts on the
agreements are recorded as adjustments to interest expense. At June 30, 2005,
TWMB had an interest rate swap agreement effective through March 2010 with a
notional amount of $35 million. Under this agreement, TWMB receives a floating
interest rate based on the 30 day LIBOR index and pays a fixed interest rate of
4.59%. This swap effectively changes the payment of interest on $35 million of
variable rate construction debt to fixed rate debt for the contract period at a
rate of 5.99%.
The fair value of the interest rate swap agreement represents the estimated
receipts or payments that would be made to terminate the agreement. At June 30,
2005, TWMB would have paid approximately $883,000 to terminate the agreement. A
1% decrease in the 30 day LIBOR index would increase the amount paid by TWMB by
$154,000 to approximately $1.0 million. The fair value is based on dealer
quotes, considering current interest rates and remaining term to maturity. TWMB
does not intend to terminate the interest rate swap agreement prior to its
maturity. The fair value of this derivative is currently recorded as a liability
in TWMB's balance sheet; however, if held to maturity, the value of the swap
will be zero at that time.
The fair market value of long-term fixed interest rate debt is subject to market
risk. Generally, the fair market value of fixed interest rate debt will increase
as interest rates fall and decrease as interest rates rise. The estimated fair
value of our total long-term debt at June 30, 2005 was $506.2 million and its
recorded value was $489.0 million. A 1% increase from prevailing interest rates
at June 30, 2005 would result in a decrease in fair value of total long-term
debt by approximately $11.7 million. Fair values were determined from quoted
market prices, where available, using current interest rates considering credit
ratings and the remaining terms to maturity.
Item 4. Controls and Procedures
The Chief Executive Officer, Stanley K. Tanger, and Chief Financial Officer,
Frank C. Marchisello, Jr., evaluated the effectiveness of the registrant's
disclosure controls and procedures on June 30, 2005 (Evaluation Date), and
concluded that, as of the Evaluation Date, the registrant's disclosure controls
and procedures were effective to ensure that information the registrant is
required to disclose in its filings with the Securities and Exchange Commission
under the Securities and Exchange Act of 1934 is recorded, processed, summarized
and reported, within the time periods specified in the Commission's rules and
forms, and to ensure that information required to be disclosed by the registrant
in the reports that it files under the Exchange Act is accumulated and
communicated to the registrant's management, including its principal executive
officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure.
There were no significant changes in the registrant's internal controls or in
other factors that could significantly affect these controls subsequent to the
Evaluation Date.
26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Neither the Company nor the Operating Partnership is presently involved in any
material litigation nor, to their knowledge, is any material litigation
threatened against the Company or the Operating Partnership or its properties,
other than routine litigation arising in the ordinary course of business and
which is expected to be covered by liability insurance.
Item 4. Submission of Matters to a Vote of Security Holders
On May 13, 2005, we held our Annual Meeting of Shareholders. The matter on which
common shareholders voted was the election of six directors to serve until the
next Annual Meeting of Shareholders. The results of the voting are as shown
below:
Nominees Votes For Votes Withheld
-------- --------- --------------
Stanley K. Tanger 25,851,089 193,420
Steven B. Tanger 25,861,264 183,245
Jack Africk 24,870,922 1,173,587
William G. Benton 25,753,625 290,884
Thomas E. Robinson 25,753,225 291,284
Allan L. Schuman 25,841,748 202,761
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.8 Amended and Restated Employment Agreement of Wilard A. Chafin.
(Note 1)
10.18 Form of Restricted Share Agreement between the Company and
certain Officers. (Note 1)
10.19 Form of Restricted Share Agreement between the Company and
certain Officers with certain performance criteria vesting.
(Note 1)
10.20 Form of Restricted Share Agreement between the Company and
certain Directors. (Note 1)
31.1 Principal Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes - Oxley Act of 2002.
31.2 Principal Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes - Oxley Act of 2002.
32.1 Principal Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes - Oxley Act of 2002.
32.2 Principal Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes - Oxley Act of 2002.
27
Notes to Exhibits:
1. Incorporated by reference to the exhibits to the Company's Quarterly
Report of Form 10-Q for the quarter ended March 31, 2005.
(b) Reports on Form 8-K
April 26, 2005 - We furnished a Current Report on Form 8-K containing under
Item 2.02, Results of Operations and Financial Condition, our press release
for the quarter ended March 31, 2005 and under Item 7.01, Regulation FD
Disclosure, the March 31, 2005 Supplemental Operating and Financial Data.
April 27, 2005 - We furnished a Current Report on Form 8-K/A, amending the
press release furnished on April 26, 2005 for the quarter ended March 31,
2005.
May 13, 2005 - We filed a Current Report on Form 8-K containing under Item
8.01, Other Events, our press release announcing the election of directors
and officers to serve for the ensuing year and the retirement of Rochelle
G. Simpson, Executive Vice President of Administration and Secretary,
effective May 31, 2005.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
TANGER FACTORY OUTLET CENTERS, INC.
By: /s/ Frank C. Marchisello, Jr.
-----------------------------
Frank C. Marchisello, Jr.
Executive Vice President, Chief Financial Officer
DATE: August 5, 2005
Exhibit Index
Exhibit No. Description
- --------------------------------------------------------------------------------
10.8 Amended and Restated Employment Agreement of Wilard A. Chafin. (Note 1)
10.21 Form of Restricted Share Agreement between the Company and certain
Officers. (Note 1)
10.22 Form of Restricted Share Agreement between the Company and certain
Officers with certain performance criteria vesting. (Note 1)
10.23 Form of Restricted Share Agreement between the Company and certain
Directors. (Note 1)
31.1 Principal Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 302 of the Sarbanes - Oxley Act of
2002.
31.2 Principal Financial Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 302 of the Sarbanes - Oxley Act of
2002.
32.1 Principal Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of
2002.
32.2 Principal Financial Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of
2002.
28