Tanger Factory Outlet Centers Second Quarter 2010 Results

On Tuesday Tanger Factory Outlet Centers released its 2nd quarter results. Here are some excerpts from the report.

Net income available to common shareholders for the three months ended June 30, 2010 was $3.3 million or $0.08 per share, as compared to net income of $10.2 million, or $0.30 per share for the second quarter of 2009. For the six months ended June 30, 2010 net income available to common shareholders was $4.5 million or $0.11 per share, as compared to net income of $39.1 million, or $1.19 per share for the six months ended June 30, 2009. Net income available to common shareholders for the six months ended June 30, 2009 also includes a gain of $31.5 million related to the acquisition of our partner's interest in a shopping center previously held in a joint venture.

Portfolio Operating Results

During the first six months of 2010, Tanger executed 294 leases, totaling 1,222,000 square feet throughout its wholly-owned portfolio. Lease renewals during the first six months accounted for 899,000 square feet, generated an 8.7% increase in average base rental rates and represented 60.5% of the square feet originally scheduled to expire during 2010. Base rental increases on re-tenanted space during the first six months averaged 22.4% and accounted for the remaining 323,000 square feet.

Same center net operating income increased 2.4% for the second quarter of 2010 and 1.7% for the first six months of 2010, while reported tenant comparable sales for Tanger's wholly owned properties for the rolling twelve months ended June 30, 2010 increased 4.6% to $345 per square foot. Tenant comparable sales for the three months ended June 30, 2010 increased 4.8%. Tenant comparable sales exclude the Company's Commerce I center, which was held for sale as of June 30, 2010 as well as its Hilton Head I center currently under redevelopment.

Development Update

Scheduled to open on November 5, 2010, the company's 317,000 square foot outlet center in Mebane, North Carolina now has leases signed or out for signature on 90.5% of the leasable square feet. Tanger field personnel are already in place in a temporary headquarters trailer as construction crews work towards completion of this $65 million outlet shopping center. This new addition to the company's portfolio is located on Interstate 85/40 between the major North Carolina metropolitan markets of Raleigh/Durham/Chapel Hill and Greensboro/High Point/ Winston-Salem.

Demolition is now complete and a redevelopment is in process on the company's Hilton Head I center in Bluffton, South Carolina. Currently, this center has leases signed or out for signature on 53.6% of the leasable square feet. When completed, the new 176,000 square foot center, with an additional four outparcel pads, will be the first LEED certified green shopping center in Beaufort County. The company's $50 million redevelopment in Hilton Head is projected to open during the second half of 2011. The company's other property on Highway 278, Hilton Head II, remains open during the construction and redevelopment of Hilton Head I.

$300 Million Offering of 6.125% Senior Notes Due 2020 Successfully Closed

On June 7, 2010, Tanger announced that its operating partnership, Tanger Properties Limited Partnership, had completed a $300 million public offering of 6.125% senior notes due 2020 in an underwritten public offering with Banc of America Securities LLC, Wells Fargo Securities, LLC and BB&T Capital Markets, a division of Scott & Stringfellow, LLC, as joint book-running managers.

The notes were priced at 99.310% of the principal amount to yield 6.219% to maturity. The notes will pay interest semi-annually at a rate of 6.125% per annum and mature on June 1, 2020. The net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $295.5 million. Tanger used the net proceeds from the sale of the notes to repay its $235 million unsecured term loan due in June 2011, to pay approximately $6.1 million to terminate two interest rate swap agreements associated with the term loan and to repay borrowings under its unsecured lines of credit and for general working capital purposes.

Second Quarter Conference Call

Tanger will host a conference call to discuss its second quarter results for analysts, investors and other interested parties on Wednesday, July 28, 2010, 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 2010 Financial Results call. Alternatively, the call will be web cast by Thomson Reuters and can be accessed at Tanger Factory Outlet Centers, Inc.'s web site under the News Releases section at http://www.tangeroutlet.com/investorrelations/news. A telephone replay of the call will be available from July 28, 2010 starting at 1:00 P.M. Eastern Time through August 6, 2010, by dialing 1-800-642-1687 (conference ID #86718953). Additionally, an online archive of the broadcast will also be available through August 6, 2010.

The full report is available on Tangers Investors Relations page.



Mark Libell