April 24, 2009 - 8-K: Current report filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 23, 2009

TANGER FACTORY OUTLET CENTERS, INC.

_________________________________________

(Exact name of registrant as specified in its charter)

North Carolina

(State or other jurisdiction of Incorporation)

1-11986

(Commission File Number)

56-1815473

(I.R.S. Employer Identification Number)

3200 Northline Avenue, Greensboro, North Carolina 27408

(Address of principal executive offices) (Zip Code)

(336) 292-3010

(Registrants’ telephone number, including area code)

N/A

(former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

ýWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⁭ Soliciting material pursuant to Rule 14a-12 under the Exchange

⁭Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⁭Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Matters

On April 23, 2009, we issued a press release entitled "Tanger Reports First Quarter 2009 Results", which included the following disclosure regarding our results of operations for the quarter ended March 31, 2009, which disclosure is hereby filed:

TANGER REPORTS FIRST QUARTER 2009 RESULTS

Funds From Operation Increases 12.8%, Same Center Net Operating Income Up 2.4%

Greensboro, NC, April 23, 2009, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported funds from operations (“FFO”) available to common shareholders, a widely accepted supplemental measure of REIT performance, for the three months ended March 31, 2009 was $24.7 million, or $0.66 per share, as compared to FFO of $21.9 million, or $0.59 per share, for the three months ended March 31, 2008, representing a 12.8% increase in total FFO and a 11.9% increase in FFO per share. Net income available to common shareholders for the three months ended March 31, 2009 was $28.9 million, or $0.92 per share, as compared to net income of $4.9 million, or $0.16 per share, for the first quarter of 2008.

Net income and FFO per share amounts above are on a diluted basis. FFO is a supplemental non-GAAP financial measure used as a standard in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO is included in this release.

First Quarter Highlights

·	Dividend increase approved by Board of Directors to raise the quarterly common share cash dividend from $0.38 to $0.3825 per share, $1.53 per share annualized, representing the 16th consecutive year of increased dividends

·	Announced exchange offer for 3.75% Exchangeable Senior Notes

·	2.4% increase in same center net operating income

·	14.5% increase in average base rental rates on leases renewed during the quarter, compared to 17.9% last year

·	42.4% increase in average base rental rates on released space during the quarter, compared to 41.7% last year

·	93.5% period-end wholly-owned portfolio occupancy rate, compared to 95.3% last year

·	$338 per square foot in reported tenant comparable sales for the rolling twelve months ended March 31, 2009

Portfolio Operating Results

During the first quarter of 2009, Tanger executed 213 leases, totaling 994,000 square feet throughout its wholly-owned portfolio. Lease renewals during the first quarter accounted for 806,000 square feet, generated a 14.5% increase in average base rental rates and represented 53.8% of the square feet originally scheduled to expire during 2009. Average base rental increases on re-tenanted space during the first quarter averaged 42.4% and accounted for the remaining 188,000 square feet.

Same center net operating income increased 2.4% for the first quarter of 2009 compared to 2.5% in the fourth quarter of 2008 and 5.7% in the first quarter of 2008. Reported tenant comparable sales for our wholly owned properties for the rolling twelve months ended March 31, 2009 decreased 3.2% to $338 per square foot due to the current downturn in the economy. Reported tenant comparable sales numbers exclude our centers in Foley, Alabama and on Highway 501 in Myrtle Beach, South Carolina, both of which underwent major renovations during last year.

Balance Sheet Summary

As of March 31, 2009, Tanger had a total market capitalization of approximately $2.1 billion including $849.2 million of debt outstanding, equating to a 40.5% debt-to-total market capitalization ratio. As of March 31, 2009, 77.8% of Tanger’s debt was at fixed interest rates and the company had $188.4 million outstanding on its $325.0 million in available unsecured lines of credit. During the first quarter of 2009, Tanger continued to maintain a strong interest coverage ratio of 3.34 times, compared to 3.22 times during the first quarter of last year.

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

			Three Months Ended
			March 31,
			2009			2008
Revenues
	Base rentals (a)		$	42,927		$	37,232
	Percentage rentals			1,308			1,178
	Expense reimbursements			19,219			17,478
	Other income			1,704			1,388
		Total revenues		65,158			57,276
Expenses
	Property operating			21,748			19,219
	General and administrative			5,935			5,271
	Depreciation and amortization (b)			20,397			15,583
		Total expenses		48,080			40,073
Operating income				17,078			17,203
	Interest expense (c)			11,210			10,199
Income before equity in earnings (loss) of unconsolidated joint
	ventures and gain on fair value measurement of previously held
	interest in acquired joint venture			5,868			7,004
Equity in earnings (loss) of unconsolidated joint ventures (d)				(897	)		394
Income from continuing operations				4,971			7,398
Gain on fair value measurement of previously held interest in acquired
	joint venture (e)			31,497			---
Net income				36,468			7,398
Preferred share dividends				(1,406	)		(1,406	)
Non-controlling interest in operating partnership				(5,698	)		(981	)
Allocation to participating securities (f)				(437	)		(139	)
Net income available to common shareholders			$	28,927		$	4,872

Basic earnings per common share available to common shareholders:
	Income from continuing operations		$	.93		$	.16
	Net income			.93			.16

Diluted earnings per common share available to common shareholders:
	Income from continuing operations		$	.92		$	.16
	Net income			.92			.16

(a)	Includes straight-line rent and market rent adjustments of $699 and $683 for the three months ended March 31, 2009 and 2008, respectively.

(b)

Includes accelerated deprecation and amortization of approximately $1.2 million for the three months ended March 31, 2009 as a result of the change in estimated useful life of the Hilton Head I, South Carolina center to three years based on our redevelopment plan for the center. The accelerated depreciation and amortization reduced income from continuing operations and net income by approximately $.03 per share for the three months ended March 31, 2009.

(c)	In accordance with FSP APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, the results of operations for all prior periods presented for which such instruments were outstanding have been restated.

(d)

Includes Wisconsin Dells, Wisconsin property for the 2009 and 2008 periods which is operated by us through 50% ownership joint venture. Includes Myrtle Beach, South Carolina Hwy 17 property for the 2008 period during which period it was operated by us through a 50% ownership joint venture. We acquired the remaining 50% interest in January 2009. Includes Deer Park, New York property for the 2009 period which is operated by us through a 33.3% ownership joint venture. Includes our share of losses incurred by the Deer Park property, which opened during October 2008, totaling $1.1 million due to depreciation charges and leverage on the project. However, we expect results to improve during the stabilization of the property in its first year of operation.

(e)	Represents FAS 141R “Business Combinations”, gain on fair value measurement of our previously held interest in the Myrtle Beach Hwy 17 joint venture upon acquisition on January 5, 2009.

(f)	In accordance with EITF 03-06-1 “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”, represents earnings allocated to unvested restricted share awards that contain non-forfeitable rights to dividends or dividend equivalents.

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


									March 31,			December 31,
									2009			2008
ASSETS:
	Rental property
		Land							$	135,710		$	135,689
		Building, improvement and fixtures								1,348,211			1,260,243
		Construction in progress								4,805			3,823
										1,488,726			1,399,755
		Accumulated depreciation								(374,541	)		(359,301	)
		Rental property, net								1,114,185			1,040,454
	Cash and cash equivalents									3,101			4,977
	Investments in unconsolidated joint ventures									9,773			9,496
	Deferred charges, net									48,294			37,750
	Other assets									34,010			29,248
		Total assets							$	1,209,363		$	1,121,925

LIABILITIES AND EQUITY
Liabilities
			Debt
		Senior, unsecured notes (net of discounts of $8,367 and $9,136, respectively)							$	391,133		$	390,363
		Mortgage loan, net of discount of $1,166 and $0, respectively)								34,634			---
		Unsecured term loan								235,000			235,000
		Unsecured lines of credit								188,400			161,500
						Total debt				849,167			786,863
	Construction trade payables									9,070			11,968
	Accounts payable and accrued expenses									27,777			26,277
		Other liabilities								33,868			30,914
							Total liabilities			919,882			856,022

Commitments
Equity
Shareholder’s equity
		Preferred shares, 7.5% Class C, liquidation preference $25 per share,
					8,000,000 shares authorized, 3,000,000 shares issued and
					outstanding at March 31, 2009 and December 31, 2008					75,000			75,000
		Common shares, $.01 par value, 150,000,000 shares authorized,
				31,888,401 and 31,667,501 shares issued and outstanding at
				March 31, 2009 and December 31, 2008, respectively						319			317
		Paid in capital								372,762			371,190
		Distributions in excess of net income (a)								(184,349	)		(201,679	)
		Accumulated other comprehensive loss								(8,533	)		(9,617	)
							Total shareholders’ equity			255,199			235,211
Non-controlling interest in operating partnership (b)										34,282			30,692
							Total equity			289,481			265,903
								Total liabilities and equity	$	1,209,363		$	1,121,925

(a)

Distributions in excess of net income as of December 31, 2008 includes a reduction of earnings of $5,144 that represents the cumulative effect adjustment of the implementation of FSP APB 14-1, ”Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”.

(b)	Represents a reclassification of non-controlling interest from prior presentation upon adoption of FAS 160 “Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”.

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

(in thousands, except per share, state and center information)

(Unaudited)

			Three Months Ended
			March 31,
			2009			2008
FUNDS FROM OPERATIONS (a)
Net income			$	36,468		$	7,398
Adjusted for:
	Depreciation and amortization uniquely significant to
		real estate – wholly-owned		20,278			15,508
	Depreciation and amortization uniquely significant to
		real estate – unconsolidated joint ventures		1,166			652
	Gain on fair value measurement of previously held interest in acquired
		joint venture		(31,497	)		---
Funds from operations (FFO)				26,415			23,558
Preferred share dividends				(1,406	)		(1,406	)
Allocation to participating securities				(306	)		(246	)
Funds from operations available to common shareholders				24,703			21,906
Funds from operations available to common shareholders per share – diluted			$	.66		$	.59

WEIGHTED AVERAGE SHARES
Basic weighted average common shares				31,269			30,979
Effect of exchangeable notes				---			92
Effect of outstanding options				81			169
Diluted weighted average common shares
	(for earnings per share computations)			31,350			31,240
Convertible operating partnership units (b)				6,067			6,067
Diluted weighted average common share (for funds from operations per
	share computations)			37,417			37,307

OTHER INFORMATION
Gross leasable are open at end of period -
	Wholly-owned			9,218			8,434
	Partially-owned - unconsolidated			950			667

Outlet centers in operations -
	Wholly-owned			31			29
	Partially-owned - unconsolidated			2			2

States operated in at end of period (c)				21			21
Occupancy percentage at end of period (c) (d)				93.5%			95.2%

(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 (non-controlling interest in operating partnership) are not dilutive on earnings per share computed in accordance with generally accepted accounting principles.

(c) Excludes Wisconsin Dells, Wisconsin property for the 2009 and 2008 periods which is operated by us through 50% ownership joint venture. Excludes Myrtle Beach, South Carolina Hwy 17 property for the 2008 period during which period it was operated by us through a 50% ownership joint venture. We acquired the remaining 50% interest in January 2009. Excludes Deer Park, New York property for the 2009 period which is operated by us through a 33.3% ownership joint venture. The Deer Park property opened during October 2008.

(d) Excludes our wholly-owned, non-stabilized center in Washington, Pennsylvania for the 2009 period.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 23, 2009

TANGER FACTORY OUTLET CENTERS, INC.

By: /s/ Steven B. Tanger

Steven B. Tanger

President and Chief Executive Officer