News Release     

 

For Release: IMMEDIATE RELEASE    

Contact:  Frank C. Marchisello, Jr.   

 

For the three months ended September 30, 2006, net income available to common shareholders increased 36.1% to $6.0 million or $0.19 per share, as compared to $4.4 million, or $0.15 per share for the third quarter of 2005. For the nine months ended September 30, 2006, net income available to common shareholders was $24.5 million, or $0.79 per share, compared to $5.0 million, or $0.18 per share for the first nine months of 2005, representing a per share increase of 338.9%. Net income for the nine months ended September 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 nine months ended September 30, 2005 included a $4.7 million loss on sale of real estate incurred during the first quarter of 2005.

 

·	Equity market capital up 49.8% as of September 30, 2006 compared to last year

 

·	Total market capital up 51.9% to $2.1 billion as of September 30, 2006 compared to last year

 

·	32.8% debt-to-total market capitalization ratio, 3.25 times interest coverage ratio

 

·	11.6% average increase in base rental rates on signed renewals with the existing tenants for 1.4 million square feet, or 78.4% of the square feet scheduled to expire during 2006

 

·	96.0% occupancy rate for wholly-owned stabilized properties, compared to 96.4% as of September 30, 2005

 

·	$336 per square foot in reported same-space tenant sales for the rolling twelve months ended September 30, 2006, up 6.1% compared to the twelve months ended September 30, 2005

 

·	Opened newly constructed 264,900 square foot center in Wisconsin Dells, Wisconsin in August 2006

 

·	Opened newly constructed 352,300 square foot center in Charleston, South Carolina in August 2006

 

·	Issued $149.5 million of 3.75% exchangeable senior notes due 2026

 

·	Repaid approximately $15.3 million in mortgage debt with an average interest rate of 8.86%

 

·	Repaid all amounts outstanding under the company’s unsecured lines of credit and other variable rate debt totaling approximately $103.3 million in the aggregate with a weighted average interest rate of 6.3%

 

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’s 352,300 square foot center in Charleston, South Carolina is currently 83% leased with tenant commitments for an additional 12% of the leasable space. The company held a grand opening celebration for the center on August 31, 2006. Tenants in the center include Gap, Banana Republic, Liz Claiborne, Nike, Adidas, Tommy Hilfiger, Guess, Reebok and many others. The Charleston property is wholly owned by Tanger.

Low Range  High Range

Estimated diluted net income per share               $ 1.01   $ 1.05

significant to real estate including minority interest

share and our share of joint ventures              1.21          1.21

Estimated diluted FFO per share                   $ 2.22    $ 2.26

Tanger will host a conference call to discuss its second quarter results for analysts, investors and other interested parties on Wednesday, October 25, 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 Third 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 Releases section.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated, self-administered and self-managed publicly traded REIT, presently owns 30 centers in 21 states coast to coast, totaling approximately 8.4 million square feet of gross leasable area. Tanger also manages for a fee and owns a 50% interest in two centers containing approximately 667,000 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 September 30, 2006. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com.

					Three months ended								Nine months ended
					September 30,								September 30,
					2006				2005				2006				2005
REVENUES
	Base rentals (a)				$	35,403			$	33,311			$	102,247			$	97,372
	Percentage rentals					1,736				1,794				4,292				3,928
	Expense reimbursements					14,890				13,925				41,357				40,160
	Other income (b)					2,407				1,563				5,266				3,675
			Total revenues			54,436				50,593				153,162				145,135
EXPENSES
	Property operating					17,713				15,554				48,473				45,397
	General and administrative					4,147				3,578				12,305				10,332
	Depreciation and amortization					13,578				11,923				43,121				35,919
			Total expenses			35,438				31,055				103,899				91,648
Operating income						18,998				19,538				49,263				53,487
	Interest expense (including prepayment premium
			and deferred loan cost write off of $917 in 2006)			10,932				7,932				30,856				24,327
Income before equity in earnings of
	unconsolidated joint ventures, minority
	interests, discontinued operations
	and loss on sale of real estate					8,066				11,606				18,407				29,160
Equity in earnings of unconsolidated joint ventures						539				255				971				714
Minority interests
		Consolidated joint venture				---				(6,860	)			---				(20,211	)
		Operating partnership				(1,191	)			(881	)			(2,541	)			(1,727	)
Income from continuing operations						7,414				4,120				16,837				7,936
Discontinued operations, net of minority interest (c)						---				293				11,713				871
Income before loss on sale of real estate						7,414				4,413				28,550				8,807
Loss on sale of real estate excluded from
		discontinued operations, net of minority interest				---				---				---				(3,843	)
Net income						7,414				4,413				28,550				4,964
Preferred share dividends						(1,406	)			---				(4,027	)			---
Net income available to common shareholders					$	6,008			$	4,413			$	24,523			$	4,964
Basic earnings per common share:
Income from continuing operations					$	.20			$	.15			$	.42			$	.15
Net income					$	.20			$	.16			$	.80			$	.18
Diluted earnings per common share:
Income from continuing operations					$	.19			$	.14			$	.41			$	.15
Net income					$	.19			$	.15			$	.79			$	.18
Funds from Operations Available to
			Common Shareholders (FFO)		$	21,155			$	17,331			$	59,800			$	47,564
FFO per common share - diluted					$	.57			$	.50			$	1.62			$	1.40
Summary of discontinued operations (c)
Operating income from discontinued operations					$	---			$	355			$	208			$	1,061
Gain on sale of real estate						---				---				13,833				---
Income from discontinued operations						---				355				14,041				1,061
Minority interest in discontinued operations						---				(62	)			(2,328	)			(190	)
Discontinued operations, net of minority interest					$	---			$	293			$	11,713			$	871
(a) Includes straight-line rent and market rent adjustments of $959 and $630 for the three months ended and $2,822 and $1,941 for the nine months ended September 30, 2006 and 2005, respectively.
(b) Includes gains on sale of outparcels of land of $177 for the three months ended September 30, 2006 and $402 and $127 for the nine months ended September 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.

										September 30,				December 31,
										2006				2005
ASSETS:
Rental property
	Land									$	130,250			$	120,715
	Buildings, improvements and fixtures										1,059,725				1,004,545
	Construction in progress										---				27,606
											1,189,975				1,152,866
	Accumulated depreciation										(266,054	)			(253,765	)
		Rental property, net									923,921				899,101
Cash and cash equivalents											20,197				2,930
Assets held for sale											---				2,637
Investments in unconsolidated joint ventures											14,581				13,020
Deferred charges, net											57,915				64,555
Other assets											26,819				18,362
Total assets										$	1,043,433			$	1,000,605
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY:
Liabilities
Debt
	Senior, unsecured notes (net of discount of $850 and
	$901, respectively)									$	498,650			$	349,099
	Mortgages payable (including a debt premium of $4,033 and
	$5,771, respectively)										181,420				201,233
	Unsecured note										---				53,500
	Unsecured lines of credit										---				59,775
	Total debt										680,070				663,607
Construction trade payables											21,049				13,464
Accounts payable and accrued expenses											27,254				23,954
Total liabilities											728,373				701,025
Commitments
Minority interest in operating partnership											39,270				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 September 30, 2006
	and December 31, 2005, respectively										75,000				55,000
Common shares, $.01 par value, 50,000,000 shares authorized,
	31,018,536 and 30,748,716 shares issued and outstanding
	at September 30, 2006 and December 31, 2005, respectively										310				307
Paid in capital											345,411				338,688
Distributions in excess of earnings											(147,030	)			(140,738	)
Deferred compensation											---				(5,501	)
Accumulated other comprehensive income											2,099				2,458
Total shareholders’ equity											275,790				250,214
Total liabilities, minority interest and shareholders’ equity										$	1,043,433			$	1,000,605

					Three months ended								Nine months ended
					September 30,								September 30,
					2006				2005				2006				2005
FUNDS FROM OPERATIONS (a)
	Net income				$	7,414			$	4,413			$	28,550			$	4,964
		Adjusted for:
		Minority interest in operating partnership				1,191				881				2,541				1,727
		Minority interest adjustment - consolidated joint venture				---				(441	)			---				(549	)
		Minority interest, depreciation and amortization
			attributable to discontinued operations			---				247				2,444				729
		Depreciation and amortization uniquely significant to
			real estate - consolidated			13,512				11,856				42,923				35,736
		Depreciation and amortization uniquely significant to
			real estate - unconsolidated joint ventures			444				375				1,202				1,114
		(Gain) loss on sale of real estate				---				---				(13,833	)			3,843
		Funds from operations (FFO)				22,561				17,331				63,827				47,564
		Preferred share dividends				(1,406	)			---				(4,027	)			---
		Funds from operations available to common
			shareholders		$	21,155			$	17,331			$	59,800			$	47,564
		Funds from operations available to common
			shareholders per share - diluted		$	.57			$	.50			$	1.62			$	1.40
WEIGHTED AVERAGE SHARES
	Basic weighted average common shares					30,619				28,374				30,582				27,682
	Effect of outstanding share and unit options					229				209				234				191
	Effect of unvested restricted share awards					135				97				107				61
	Diluted weighted average common shares (for earnings
		per share computations)				30,983				28,680				30,923				27,934
	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)				37,050				34,747				36,990				34,001
OTHER INFORMATION
Gross leasable area open at end of period -
Wholly owned						8,389				4,956				8,389				4,956
Partially owned - consolidated (c)						---				3,271				---				3,271
Partially owned - unconsolidated						667				402				667				402
Managed						293				65				293				65
Outlet centers in operation -
Wholly owned						30				22				30				22
Partially owned - consolidated (c)						---				9				---				9
Partially owned - unconsolidated						2				1				2				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) (e)						96.0	%			96.4	%			96.0	%			96.4	%

(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 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.

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