CORRESP: A correspondence can be sent as a document with another submission type or can be sent as a separate submission.
Published on February 3, 2009
Raymond
Y. Lin
Direct
Dial: (212) 906-1369
raymond.lin@lw.com
53rd at
Third
885 Third
Avenue
New York,
New York 10022-4834
Tel:
+1.212.906.1200 Fax: +1.212.751.4864
www.lw.com
File No.
020616-0020
LATHAM
& WATKINS LLP
February 3, 2009
VIA EDGAR AND
FACSIMILE
(202)
772-9209
Daniel
Gordon, Esq.
Accounting
Branch Chief
Office of
Real Estate and Business Services
Division
of Corporation Finance
Securities
and Exchange Commission
100 F
Street, NE
Washington,
DC 20549-3628
|
|
Re:
|
Tanger Factory Outlet Centers,
Inc.
|
|
|
Tanger
Properties Limited Partnership
|
|
|
Forms
10-K for the year ended December 31,
2007
|
|
|
Filed
02/28/08
|
|
|
Definitive
Proxy Statement
|
|
|
Filed
04/03/08
|
|
|
File
Nos. 001-11986 and 333-03526-01
|
Dear Mr.
Gordon:
On behalf
of our clients, Tanger Factory Outlet Centers, Inc. (the “Parent”) and Tanger
Properties Limited Partnership (the “Operating
Partnership” and together with the Parent, the “Company”) we are
responding to the comments of the staff of the Division of Corporation Finance
(the “Staff”)
of the U.S. Securities and Exchange Commission (the “Commission”) set
forth in your letter dated January 27, 2009.
For your
convenience, the Staff’s comment is set forth below in bold, followed by the
Company’s response to the comment.
February 3, 2009
Page 2
Form 10-K for the year ended
December 31, 2007
Exhibits 31.1 and
31.2
|
1.
|
We note your response to
comment 2; however, due to the nature of the improper wording of your
certifications, it is not appropriate to file abbreviated amendments to
correct the wording. Please file amendments, including the
entire periodic reports and new, corrected certifications, to your Forms
10-K for the year ended December 31, 2007 as well as your quarterly
reports on Forms 10-Q for the periods ended March 31, June 30 and
September 30, 2008.
|
Response:
In
response to the Staff’s comment, the Company will file amendments, including the
entire periodic reports and new, corrected certifications to its Forms 10-K for
the year ended December 31, 2007 (the “2007 Forms 10-K”) and
its Forms 10-Q for the periods ended March 31, June 30 and September 30, 2008
(the “2008 Forms
10-Q”).
During
the course of responding to this comment, management conducted a review of prior
filings and procedures and ascertained that the
same language was used in each periodic report filed since August 14, 2003, a
total of 42 periodic reports1. With respect to these other
filings, the Company proposes to file amendments which would include only
corrected certifications to the Forms 10-K for the years ended 2006, 2005 and
2004 and the Forms 10-Q for all quarterly periods in 2007, 2006, 2005 and 2004
and for the period ended September 30, 2003 (collectively, the “Prior Periodic
Reports”).
While the
Company understands the Staff’s position, the Company respectfully submits that
the time, effort and expense of refiling 42 periodic reports in their entirety
outweighs any benefit to investors in a situation where the only issue is the
form of certification, rather than the substance of compliance.2
The
refiling of 42 entire periodic reports would necessitate the Company preparing
the reports and obtaining additional consents from its independent accountants
for the reports, which would require significant time, effort and
expense. Also, re-filing entire periodic reports may delay the filing
of the Forms 10-K for the year ended December 31, 2008 (the “2008 Forms 10-K”),
due on March 2, 2009, because the Company and its independent public accountants
would be required to focus on the amendments to the periodic filings in addition
to the 2008 Forms 10-K. The Company respectfully submits that
preparing and filing 42 entire periodic reports would constitute an undue burden
to the Company, while providing no meaningful information.
|
1
|
Since both the Parent and the
Operating Partnership file periodic reports, the Company would have to
refile 42 periodic reports if it were to correct all of the periodic
reports filed after August 14,
2003.
|
|
2
|
The Company acknowledges
Compliance and Disclosure Interpretation 246.13 (“C&DI
246.13”) concerning
the omission of the internal control over financial reporting language
from the introductory portion of paragraph 4 of the Section 302
certification, as well as paragraph 4(b). While C&DI 246.13
can be read to require the refiling of entire periodic reports after one
year, the Company does not believe it should be imposed here because the
cost outweighs the
benefit.
|
February 3, 2009
Page 3
During
the course of management’s review, the Company determined that the Prior
Periodic Reports used the certification language provided in Release No. 33-8124
(August 29, 2002). Even though the form of Section 302 certification
required by Exchange Act Rules 13a-14(a) and 15d-14(a) was amended and became
effective August 14, 2003 (Release No. 33-8238 (June 5, 2003)), with respect to
paragraph 5 of the certification, the Company continued to use the proposing
language and did not update the language in the Forms 10-K and 10-Q from August
2003 through September 30, 2008. As is demonstrated in the table
below, which shows a comparison of the correct language and the language used by
the Company, the difference appears in paragraph 5 of the
certification:
|
Correct Section 302
Certification:
|
Language used by the Company:3
|
|
5. The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
(a)
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
5. The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant’s auditors and the audit
committee of registrant’s board of directors (or persons performing the
equivalent functions):
(a)
all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant’s ability to record,
process, summarize and report financial data and have identified for the
registrant’s auditors any material weaknesses in internal controls;
and
(b)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal
controls.
|
|
3
|
The
Company initially filed management's report on internal control over
financial reporting with the Forms 10-K for the year ended December 31,
2004 (the “2004
Forms 10-K”). In addition to paragraph 5 as shown in the
table, the Company inadvertently omitted the internal control over
financial reporting language from the introductory portion of paragraph 4
of the certification and paragraph 4(b) in the 2004 Forms 10-K as well as
the Forms 10-Q for 2005. The Company included such language
beginning with the Forms 10-K for the year ended December 31, 2005 and in
all subsequent periodic
filings.
|
February 3, 2009
Page 4
As shown
by the table above, the difference in the two paragraphs does not change the
substantive meaning. Paragraph 5 as filed is substantively similar to
paragraph 5 as it should have been filed.4 The Company respectfully submits
that this difference does not adversely affect past or current
investors. Indeed, the Company has received no inquiries on this
matter from analysts or investors over the past five and a half
years. The Company believes that, given the immaterial difference and
the burden of refiling 42 entire periodic reports, the Company should be allowed
to refile only the certifications for the Prior Periodic Reports.
The
Company’s position is supported by the Final Report of the Advisory Committee on
Improvements to Financial Reporting to the United States Securities and Exchange
Commission (August 1, 2008)(the “CIFiR
Report”). The CIFiR Report, which discussed the correction of
financial reporting errors, recommended that the determination of how
|
4
|
The Company respectfully submits
that the Staff has allowed other reporting companies to file amendments
containing only corrected certifications, rather than amendments of entire
periodic reports, in situations where far less periodic reports were at
issue. See, for example, Douglas Emmett, Inc. (Staff comment
letter dated July 30, 2008, Form 10/Q-A filed August 12, 2008 for the
period ended March 31, 2008), LaSalle Hotel Properties (Staff comment
letter dated March 3, 2006, Form 10-K/A filed March 24, 2006 for the year
ended December 31, 2005), Century Realty Trust (Staff comment letter dated
May 25, 2006, Forms 10-K/A and Forms 10-Q/A filed June 12, 2006 for the
years ended December 31, 2004 and 2005 and the periods ended March 31,
2005, June 30, 2005 and September 30, 2005 and March 31, 2006), Switch
& Data Facilities Company, Inc. (Staff comment letter dated
10/27/2008, Form 10-K/A filed November 10, 2008 for the year ended
December 31, 2007), Decorator Industries, Inc. (Staff comment letter dated
August 21, 2008, Form 10-K/A filed September 5, 2008 for the year ended
December 29, 2007), Inca Designs, Inc. (Staff comment letter dated October
21, 2008, Form 10-Q/A filed October 8, 2008 for the period ended June 30,
2008), California Steel Industries, Inc. (Staff comment letter dated July
23, 2008, Form 10-K/A and Forms 10-Q/A filed on September 22, 2008 for the
year ended December 31, 2007 and the periods ended March 31, 2008 and June
30, 2008). The Company understands that the above examples are
consistent with C&DI 246.13, which permits a reporting company to file
a Form 10-K/A that contains only an explanatory note and corrected
certification if the error occurs in the first Form 10-K that contains
management’s report on internal control over financial reporting due to
the transition period. As is noted in footnote 3, the Company
did this in 2005. While the Company understands that this is
different than the internal control over financial reporting scenario for
which the Staff has made exceptions, the Company respectfully submits that
the Staff has also allowed companies with certification errors other than
those related to the phase in of internal control over financial reporting
to also file amendments that include only corrected
certifications. (See, for example, Grubb & Ellis Healthcare
REIT, Inc. (Staff comment letter dated November 5, 2008, Form 10-K/A filed
November 23, 2008 for the period ended December 31, 2007) and Silver Pearl
Enterprises, Inc. (Staff comment letter dated August 6, 2008, Form 10-K/A
and Forms 10-Q/A filed September 30, 2008 for the year ended December 31,
2007 and the periods ended March 31, 2008 and June 30,
2008)). The Company respectfully submits that the Staff’s
allowance of refiling only certifications in other instances supports its
position concerning the Prior Periodic
Reports.
|
February 3, 2009
Page 5
to
correct a material error should be made based on the needs of current investors
making current investment decisions.5 While recognizing that the
Commission has not adopted the CIFiR Report, the Company believes this position
should be followed in this situation. Consistent with the CIFiR
Report, the Company respectfully submits that the correction of the
certification error in periodic reports prior to the 2007 Form 10-K would not be
important to current investors making current investment
decisions. In addition, requiring the amendment and refiling 42
complete periodic reports may delay prompt disclosure of current financial
information to current investors.
The
Company has consistently produced high quality periodic reports and holds itself
to a very high standard with respect to reporting and compliance. The
Company has never identified a material weakness with respect to internal
control over financial reporting. The Company received only five
comments from the Staff during its most recent review. In a November
2004 review of the 2003 Form 10-K, the Company received five comments, which
were followed up by two additional comments on the 2004 Form
10-K. All of these comments were resolved to the satisfaction of the
Staff. In addition, a Public Company Accounting Oversight Board
(“PCAOB”)
review in May 2008 of the Company’s 2007 audit by the Company’s independent
registered public accountants resulted in no comments from the PCAOB
inspector. Management has informed the Audit Committee of the Staff’s
comment letters dated December 18, 2008 and January 27, 2009 and the Company’s
responses dated January 16, 2009 and the date hereof, and the Audit Committee is
in agreement with the Company’s proposed course of action.
For the
above reasons, the Company proposes to file amendments containing the entire
periodic report with respect to the 2007 Forms 10-K and 2008 Forms 10-Q and
amendments containing only a corrected certification with respect to the Prior
Periodic Reports.
The
Company has authorized us to acknowledge on its behalf that, in connection with
this response:
|
·
|
the
Company is responsible for the adequacy and accuracy of the disclosure in
the filings;
|
|
|
“…a
prior period error that was material to that prior period, but that does
not affect the annual financial statements or financial information
included within a company’s most recent filing with the SEC, may not need
to be corrected through an amendment to prior period filings if the
financial statements that contain the error are determined not to be
important to investors making current investment
decisions. Such errors would be corrected in the period in
which they are discovered with appropriate disclosure about the error and
the periods impacted. This approach would provide investor
making current investment decisions with more timely financial reports and
avoid the costs to investors of delaying prompt disclosure of current
financial information in order for a company to correct multiple prior
filings.”
|
February 3, 2009
Page 6
|
·
|
Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the
filings; and
|
|
·
|
the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
|
We hope
the foregoing answers are responsive to your comments and look forward to
resolving any outstanding issues as quickly as possible. If you have
any questions in connection with our responses to your comments, please feel
free to call the undersigned at (212) 906-1369 or John Huber at (202)
637-2242.
Best
regards,
/s/ Raymond Y.
Lin
Raymond
Y. Lin
of LATHAM
& WATKINS LLP
cc: Frank
Marchisello, Executive Vice President, Chief Financial Officer &
Secretary/TangerFactory
Outlet Centers, Inc.
William Benton, Chairman of Audit
Committee/Tanger Factory Outlet Centers, Inc.
Jessica Barberich/Securities and
Exchange Commission
Tom Kluck/Securities and Exchange
Commission
Erin Martin/Securities and Exchange
Commission
|
|
Peter
Coode, Engagement Partner/PricewaterhouseCoopers
LLP
|