Tanger Factory Outlet Centers, Inc.

News Release          

For Release: IMMEDIATE RELEASE        

Contact: Frank C. Marchisello, Jr.  

FFO and net income available to common shareholders for the year ended December 31, 2006 were reduced by a $1.5 million charge, $944,000 of which occurred in the fourth quarter, for the abandonment of acquisition due diligence costs, as the company has decided it is no longer in a position to pursue the potential acquisition opportunity. The abandoned acquisitions due diligence costs were incurred in connection with structuring, diligencing and submitting a proposal to acquire a significant portfolio from a public REIT that was exploring its strategic alternatives. The bid was requested, but ultimately not accepted, by the public REIT.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

During the third quarter of 2006, the company opened two new centers located in Wisconsin Dells, Wisconsin and Charleston, South Carolina. The 264,900 square foot center in Wisconsin Dells, Wisconsin is currently 100% leased. Tanger held a grand opening celebration for the center on August 18, 2006. Tenants in the center include Polo Ralph Lauren, Abercrombie & Fitch, Hollister, Gap, Banana Republic, Old Navy, Liz Claiborne, Nike, Adidas, Tommy Hilfiger and many others. The Wisconsin Dells property, which was developed and is managed and leased by Tanger for a fee, is owned through a joint venture of which Tanger owns a 50% interest.

Tanger will host a conference call to discuss its year end 2006 results for analysts, investors and other interested parties on Wednesday, February 21, 2007, at 10:00 A.M. eastern time. To access the conference call, listeners should dial 1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers fourth quarter and year end 2006 financial results call. Alternatively, the call will be web cast by CCBN and can be accessed at Tanger Factory Outlet Centers, Inc.'s web site at www.tangeroutlet.com/corporate under the News Releases section.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a fully integrated, self-administered and self-managed publicly traded REIT. As of December 31, 2006, the company owned 30 centers in 21 states coast to coast, totaling approximately 8.4 million square feet of gross leasable area. Tanger also owned a 50% interest in two center containing approximately 667,000 square feet and managed for a fee three centers totaling approximately 293,000 square feet. Tanger is filing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended December 31, 2006. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com.

						Three months ended								Year ended
						December 31,								December 31,
						2006				2005				2006				2005
REVENUES
	Base rentals (a)				$		36,449			$	33,855			$	138,696			$	131,227
	Percentage rentals						2,896				2,418				7,188				6,346
	Expense reimbursements						17,165				15,255				58,522				55,415
	Other income (b)						2,039				2,098				7,305				5,773
		Total revenues					58,549				53,626				211,711				198,761
EXPENSES
	Property operating						19,285				17,347				67,184				62,744
	General and administrative						4,402				3,509				16,707				13,841
	Depreciation and amortization						14,082				12,246				57,203				48,165
	Abandoned acquisition due diligence costs						944				---				1,518				---
		Total expenses					38,713				33,102				142,612				124,750
Operating income							19,836				20,524				69,099				74,011
	Interest expense (c)						9,919				18,600				40,775				42,927
Income before equity in earnings of
	unconsolidated joint ventures, minority
	interests, discontinued operations and loss
	on sale of real estate						9,917				1,924				28,324				31,084
Equity in earnings of unconsolidated joint ventures							297				165				1,268				879
Minority interests
	Consolidated joint venture						---				(3,832	)			---				(24,043	)
	Operating partnership						(1,455	)			379				(3,996	)			(1,348	)
Income (loss) from continuing operations							8,759				(1,364	)			25,596				6,572
Discontinued operations, net of minority interest (d)							---				1,489				11,713				2,360
Income before loss on sale of real estate							8,759				125				37,309				8,932
Loss on sale of real estate, net of minority interest							---				---				---				(3,843	)
Net income							8,759				125				37,309				5,089
Less applicable preferred share dividends							(1,406	)			(538	)			(5,433	)			(538	)
Net income (loss) available to common shareholders					$		7,353			$	(413	)		$	31,876			$	4,551
Basic earnings per common share:
	Income (loss) from continuing operations				$		.24			$	(.06	)		$	.66			$	.08
	Net income (loss)				$		.24			$	(.01	)		$	1.04			$	.16
Diluted earnings per common share:
	Income (loss) from continuing operations				$		.23			$	(.06	)		$	.65			$	.08
	Net income (loss)				$		.23			$	(.01	)		$	1.03			$	.16
Summary of discontinued operations (d)
	Operating income from discontinued operations				$		---			$	1,786			$	208			$	2,847
	Gain on sale of real estate						---				---				13,833				---
	Income from discontinued operations						---				1,786				14,041				2,847
	Minority interest in discontinued operations						---				(297	)			(2,328	)			(487	)
Discontinued operations, net of minority interest					$		---			$	1,489			$	11,713			$	2,360
(a) Includes straight-line rent and market rent adjustments of $852 and $548 for the three months ended and $3,674 and $2,489 for the years ended December 31, 2006 and 2005, respectively.
(b) Includes gains on sale of outparcels of land of $402 and $127 for the years ended December 31, 2006 and 2005, respectively.
(c) Includes prepayment premium and deferred loan cost write offs of $917 for the year ended December 31, 2006 and $9,866 for the three months and year ended December 31, 2005, respectively.
(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 or classified as held for sale as of the end of the year in which we have no significant continuing involvement have been reported above as discontinued operations for the periods presented.

								December 31,				December 31,
								2006				2005
ASSETS:
Rental property
	Land							$	130,137			$	120,715
	Buildings, improvements and fixtures								1,068,070				1,004,545
	Construction in progress								18,640				27,606
									1,216,847				1,152,866
	Accumulated depreciation								(275,372	)			(253,765	)
	Rental property, net								941,475				899,101
Cash and cash equivalents									8,453				2,930
Assets held for sale (1)									---				2,637
Investments in unconsolidated joint ventures									14,451				13,020
Deferred charges, net									55,089				64,555
Other assets									21,409				18,362
					Total assets			$	1,040,877			$	1,000,605
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY:
Liabilities
Debt
	Senior, unsecured notes (net of discount of $832 and $901,
		respectively)						$	498,668			$	349,099
	Mortgages payable (including premium of $3,441 and $5,771,
		respectively)							179,911				201,233
	Unsecured note								---				53,500
	Unsecured lines of credit								---				59,775
	Total debt								678,579				663,607
Construction trade payables									23,504				13,464
Accounts payable and accrued expenses									25,094				23,954
		Total liabilities							727,177				701,025
Commitments
Minority interest in operating partnership									39,024				49,366
Shareholders’ equity
Preferred shares, 7.5% Class C, liquidation preference $25 per
	share, 8,000,000 authorized, 3,000,000 and 2,200,000 shares
	issued and outstanding at December 31, 2006 and 2005,
	respectively								75,000				55,000
Common shares, $.01 par value, 50,000,000 authorized, at
	31,041,336 and 30,748,716 shares issued and outstanding
	December 31, 2006 and 2005, respectively								310				307
Paid in capital									346,361				338,688
Distributions in excess of earnings									(150,223	)			(140,738	)
Deferred compensation									---				(5,501	)
Accumulated other comprehensive income									3,228				2,458
		Total shareholders’ equity							274,676				250,214
					Total liabilities, minority interests and shareholders’
						equity		$	1,040,877			$	1,000,605

						Three months ended												Year ended
						December 31,												December 31,
						2006						2005						2006				2005
FUNDS FROM OPERATIONS (a)
Net income					$		8,759				$		125				$		37,309			$	5,089
Adjusted for:
	Minority interest in operating partnership						1,455						(379	)					3,996				1,348
	Minority interest adjustment - consolidated joint venture						---						234						---				(315	)
	Minority interest, depreciation and amortization
		attributable to discontinued operations					---						480						2,444				1,210
	Depreciation and amortization uniquely significant to
		real estate - consolidated					14,015						12,181						56,938				47,916
	Depreciation and amortization uniquely significant to
		real estate - unconsolidated joint ventures					623						379						1,825				1,493
	(Gain) loss on sale of real estate						---						---						(13,833	)			3,843
Funds from operations (FFO)							24,852						13,020						88,679				60,584
Preferred share dividends							(1,406	)					(538	)					(5,433	)			(538	)
Funds from operations available to common  shareholders					$		23,446				$		12,482				$		83,246			$	60,046
Funds from operations available to common
	shareholders per share - diluted				$		.63				$		.34				$		2.24			$	1.73
WEIGHTED AVERAGE SHARES
Basic weighted average common shares							30,651						30,452						30,599				28,380
Effect of exchangeable notes							310						---						117				---
Effect of outstanding share and unit options							247						195						240				193
Effect of unvested restricted share awards							172						106						125				73
Diluted weighted average common shares (for earnings							31,380						30,753						31,081				28,646
	per share computations)
Convertible operating partnership units (b)							6,067						6,067						6,067				6,067
Diluted weighted average common shares (for funds
	from operations per share computations)						37,447						36,820						37,148				34,713
OTHER INFORMATION
Gross leasable area open at end of period -
	Wholly owned						8,388						8,261						8,388				8,261
	Partially owned - unconsolidated						667						402						667				402
	Managed						293						64						293				64
Outlet centers in operation -
	Wholly owned						30						31						30				31
	Partially owned - unconsolidated						2						1						2				1
	Managed						3						1						3				1
States operated in at end of period (c)							21						22						21				22
Occupancy percentage at end of period (c) (d)							97.5	%					97.0	%					97.5	%			97.0	%

(a) FFO is a non-GAAP financial measure. The most directly comparable GAAP measure is net income (loss), to which it is reconciled. We believe that for a clear understanding of our operating results, FFO should be considered along with net income as presented elsewhere in this report. FFO is presented because it is a widely accepted financial indicator used by certain investors and analysts to analyze and compare one equity REIT with another on the basis of operating performance. FFO is generally defined as net income (loss), computed in accordance with generally accepted accounting principles, before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plus depreciation and amortization uniquely significant to real estate and after adjustments for unconsolidated partnerships and joint ventures. We caution that the calculation of FFO may vary from entity to entity and as such the presentation of FFO by us may not be comparable to other similarly titled measures of other reporting companies. FFO does not represent net income or cash flow from operations as defined by accounting principles generally accepted in the United States of America and should not be considered an alternative to net income as an indication of operating performance or to cash flows from operations as a measure of liquidity. FFO is not necessarily indicative of cash flows available to fund dividends to shareholders and other cash needs.

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

(c) Excludes Myrtle Beach, South Carolina Hwy 17 and Wisconsin Dells, Wisconsin properties which are operated by us through 50% ownership joint ventures and three centers for which we only have management responsibilities.

(d) Excludes our wholly-owned, non-stabilized center in Charleston, South Carolina.