News Release     

 

For Release: IMMEDIATE RELEASE    

Contact:       Frank C. Marchisello, Jr.   

                (336) 834-6834

 

For the three months ended June 30, 2006, net income available to common shareholders increased 40.3% to $4.9 million or $0.16 per share, as compared to $3.5 million, or $0.13 per share for the second quarter of 2005. For the six months ended June 30, 2006, net income available to common shareholders was $18.5 million, or $0.60 per share, compared to $551,000, or $0.02 per share for the first six months of 2005. Net income for the six months ended June 30, 2006 included a gain on the sale of real estate incurred during the first quarter of $13.8 million, while net income for the six months ended June 30, 2005 included a $4.7 million loss on sale of real estate incurred during the first quarter of 2005.

 

·	4.6% increase in same center net operating income

 

·	12.2% average increase in base rental rates on signed renewals with the existing tenants for 1,258,721 square feet, or 71.5% of the square feet scheduled to expire during 2006

 

·	96.2% occupancy rate for wholly-owned properties, compared to 96.5% as of June 30, 2005

 

·	$330 per square foot in reported same-space tenant sales for the rolling twelve months ended June 30, 2006, up 4.1% compared to the twelve months ended June 30, 2005

 

·	Newly constructed 264,900 square foot center in Wisconsin Dells, Wisconsin opening in August 2006

 

·	Newly constructed 352,500 square foot center in Charleston, South Carolina opening in August 2006

 

·	33.8% debt-to-total market capitalization ratio, 3.08 times interest coverage ratio

 

During the second quarter of 2006, construction neared completion on the company’s two new centers located in Wisconsin Dells, Wisconsin and Charleston, South Carolina. The 264,900 square foot center in Wisconsin Dells, Wisconsin is currently 97% leased with tenant commitments for an additional 2% of the leasable space. Tanger has scheduled a grand opening celebration for August 18, 2006. Tenants in the center will 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.

Low Range  High Range

gain/loss on the sale of real estate                   $ 0.74   $ 0.78

significant to real estate including minority interest

share and our share of joint ventures                 1.44        1.44

Estimated diluted FFO per share             $ 2.18              $ 2.22

Tanger will host a conference call to discuss its second quarter results for analysts, investors and other interested parties on Thursday, July 27, 2006, at 10:00 A.M. eastern time. To access the conference call, listeners should dial 1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers Second Quarter Financial Results call. Alternatively, the call will be web cast by CCBN and can be accessed at Tanger Factory Outlet Centers, Inc.'s web site at www.tangeroutlet.com/corporate under the News Release section.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated, self-administered and self-managed publicly traded REIT, presently owns 29 centers in 21 states coast to coast, totaling approximately 8.0 million square feet of gross leasable area. Tanger also manages for a fee and owns a 50% interest in one center containing approximately 402,000 square feet and manages for a fee three centers totaling approximately 293,000 square feet. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended June 30, 2006. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com.

					Three months ended								Six months ended
					June 30,								June 30,
					2006				2005				2006				2005
					(unaudited)				(unaudited)				(unaudited)				(unaudited)
REVENUES
	Base rentals (a)				$	33,879			$	32,845			$	66,844			$	64,061
	Percentage rentals					1,398				1,254				2,556				2,134
	Expense reimbursements					13,747				12,296				26,467				26,235
	Other income (b)					1,504				1,182				2,859				2,112
			Total revenues			50,528				47,577				98,726				94,542
EXPENSES
	Property operating					15,995				14,143				30,760				29,843
	General and administrative					4,077				3,711				8,158				6,754
	Depreciation and amortization					13,593				11,243				29,543				23,996
			Total expenses			33,665				29,097				68,461				60,593
Operating income						16,863				18,480				30,265				33,949
	Interest expense					9,890				8,167				19,924				16,395
Income before equity in earnings of
	unconsolidated joint ventures, minority
	interests, discontinued operations
	and loss on sale of real estate					6,973				10,313				10,341				17,554
Equity in earnings of unconsolidated joint ventures						285				268				432				459
Minority interests
		Consolidated joint venture				---				(6,727	)			---				(13,351	)
		Operating partnership				(969	)			(700	)			(1,350	)			(846	)
Income from continuing operations						6,289				3,154				9,423				3,816
Discontinued operations, net of minority interest (c)						---				326				11,713				578
Income before loss on sale of real estate						6,289				3,480				21,136				4,394
Loss on sale of real estate excluded from
		discontinued operations, net of minority interest				---				---				---				(3,843	)
Net income						6,289				3,480				21,136				551
Preferred share dividends						(1,406	)			---				(2,621	)			---
Net income available to common shareholders					$	4,883			$	3,480			$	18,515			$	551
Basic earnings per common share:
Income from continuing operations					$	.16			$	.12			$	.22			$	---
Net income					$	.16			$	.13			$	.61			$	.02
Diluted earnings per common share:
Income from continuing operations					$	.16			$	.11			$	.22			$	---
Net income					$	.16			$	.13			$	.60			$	.02
Funds from Operations Available to
			Common Shareholders (FFO)		$	19,757			$	15,703			$	38,645			$	30,233
FFO per common share - diluted					$	.53			$	.47			$	1.05			$	.90
Summary of discontinued operations (c)
Operating income from discontinued operations					$	---			$	398			$	208			$	706
Gain on sale of real estate						---				---				13,833				---
Income from discontinued operations						---				398				14,041				706
Minority interest in discontinued operations						---				(72	)			(2,328	)			(128	)
Discontinued operations, net of minority interest					$	---			$	326			$	11,713			$	578
(a) Includes straight-line rent and market rent adjustments of $948 and $1,152 for the three months ended and $1,863 and $1,311 for the six months ended June 30, 2006 and 2005, respectively.
(b) Includes gains on sale of outparcels of land of $115 and $128 for the three months ended and $225 and $128 for the six months ended June 30, 2006 and 2005, respectively.
(c) 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 above periods in which we have no significant continuing involvement have been reported above as discontinued operations for all periods presented.

										June 30,				December 31,
										2006				2005
										(Unaudited)				(Unaudited)
ASSETS:
Rental property
Land										$	119,876			$	120,715
Buildings, improvements and fixtures											1,017,245				1,004,545
Construction in progress											51,260				27,606
											1,188,381				1,152,866
Accumulated depreciation											(266,958	)			(253,765	)
Rental property, net											921,423				899,101
Cash and cash equivalents											1,785				2,930
Assets held for sale											---				2,637
Investments in unconsolidated joint ventures											15,130				13,020
Deferred charges, net											56,867				64,555
Other assets											27,008				18,362
Total assets										$	1,022,213			$	1,000,605
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY:
Liabilities
Debt
Senior, unsecured notes (net of discount of $867 and $901, respectively)										$	349,132			$	349,099
Mortgages payable (including a debt premium of $4,623 and $5,771, respectively)											198,177				201,233
Unsecured note											53,500				53,500
Unsecured lines of credit											49,800				59,775
Total debt											650,609				663,607
Construction trade payables											22,372				13,464
Accounts payable and accrued expenses											22,095				23,954
Total liabilities											695,076				701,025
Commitments
Minority interest in operating partnership											53,541				49,366
Shareholders’ equity
Preferred shares, 7.5% Class C, liquidation preference $25 per
share, 8,000,000 shares authorized, 3,000,000 and 2,200,000 shares issued
and outstanding at June 30, 2006  and December 31, 2005, respectively											75,000				55,000
Common shares, $.01 par value, 50,000,000 shares authorized,
31,000,536 and 30,748,716 shares issued and outstanding at June 30, 2006
and December 31, 2005, respectively											310				307
Paid in capital											332,103				338,688
Distributions in excess of earnings											(142,497	)			(140,738	)
Deferred compensation											---				(5,501	)
Accumulated other comprehensive income											8,680				2,458
Total shareholders’ equity											273,596				250,214
Total liabilities, minority interest and shareholders’ equity										$	1,022,213			$	1,000,605

					Three months ended								Six months ended
					June 30,								June 30,
					2006				2005				2006				2005
					(unaudited)				(unaudited)				(unaudited)				(unaudited)
FUNDS FROM OPERATIONS (a)
	Net income				$	6,289			$	3,480			$	21,136			$	551
		Adjusted for:
		Minority interest in operating partnership				969				700				1,350				846
		Minority interest adjustment - consolidated joint venture				---				(277	)			---				(108	)
		Minority interest, depreciation and amortization
			attributable to discontinued operations			---				249				2,444				482
		Depreciation and amortization uniquely significant to
			real estate - consolidated			13,526				11,181				29,411				23,880
		Depreciation and amortization uniquely significant to
			real estate - unconsolidated joint ventures			379				370				758				739
		(Gain) loss on sale of real estate				---				---				(13,833	)			3,843
		Funds from operations (FFO)				21,163				15,703				41,266				30,233
		Preferred share dividends				(1,406	)			---				(2,621	)			---
		Funds from operations available to common
			shareholders		$	19,757			$	15,703			$	38,645			$	30,233
		Funds from operations available to common
			shareholders per share - diluted		$	.53			$	.47			$	1.05			$	.90
WEIGHTED AVERAGE SHARES
	Basic weighted average common shares					30,593				27,357				30,562				27,330
	Effect of outstanding share and unit options					220				165				233				173
	Effect of unvested restricted share awards					102				54				94				43
	Diluted weighted average common shares (for earnings
		per share computations)				30,915				27,576				30,889				27,546
	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)				36,982				33,643				36,956				33,613
OTHER INFORMATION
Gross leasable area open at end of period -
Wholly owned						8,029				4,923				8,029				4,923
Partially owned - consolidated (c)						---				3,271				---				3,271
Partially owned - unconsolidated						402				402				402				402
Managed						293				65				293				65
Outlet centers in operation -
Wholly owned						29				22				29				22
Partially owned - consolidated (c)						---				9				---				9
Partially owned - unconsolidated						1				1				1				1
Managed						3				1				3				1
States operated in at end of period (c) (d)						21				22				21				22
Occupancy at end of period (c) (d)						96.2	%			96.5	%			96.2	%			96.5	%

(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)

Includes the Charter Oak portfolio which we originally acquired through a joint venture in 2003. At that time we had a 33.3% ownership interest in the joint venture. In November 2005, we acquired the remaining 66.7% interest in the joint venture, thus making the portfolio wholly-owned from that date forward. However, these properties have been consolidated for financial reporting purposes under the accounting guidance of FIN 46R since the initial formation of the joint venture in December 2003.

(d)	Excludes Myrtle Beach, South Carolina, Hwy 18 property which is operated by us through a 50% ownership joint venture and three centers for which we only have management responsibilities.