Tanger Reports Year End Results for 2008 10.1% Increase in Adjusted FFO

4.1% Increase in Same Center NOI

GREENSBORO, N.C., Feb. 17 /PRNewswire-FirstCall/ -- Tanger Factory Outlet Centers, Inc. (NYSE: SKT) today reported its financial results for the quarter and year ended December 31, 2008. Funds from operations available to common shareholders ("FFO"), a widely accepted supplemental measure of REIT performance, for the three months ended December 31, 2008, was $27.5 million, or $0.74 per share, as compared to FFO of $26.3 million, or $0.70 per share, for the three months ended December 31, 2007. For the year ended December 31, 2008, FFO was $91.9 million, or $2.46 per share, as compared to FFO of $93.7 million, or $2.48 per share, for the year ended December 31, 2007.

FFO for the fourth quarter ended December 31, 2008 included $1.7 million in lease termination fee income, as well as a $3.3 million charge relating to due diligence costs associated with opportunities the company deemed no longer probable.

FFO for the year ended December 31, 2008 was impacted by a $2.2 million increase in lease termination fees over the prior year, offset by a $3.3 million increase in abandoned due diligence costs, an $8.9 million charge relating to the settlement of two US Treasury locks and a $406,000 prepayment premium associated with the early extinguishment of debt. FFO as adjusted for these items would have been approximately $2.73 per share for 2008, representing a 10.1% increase over the prior year.

Net income available to common shareholders for the three months ended December 31, 2008 was $8.1 million, or $0.26 per share, compared to $9.1 million, or $0.29 per share for the fourth quarter of 2007. Net income available to common shareholders for the year ended December 31, 2008 was $22.4 million, or $0.71 per share, compared to $23.0 million, or $0.72 per share for the year ended December 31, 2007. Net income available to common shareholders for the year ended December 31, 2008 was also impacted by the charges described above.

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.

                          Highlights of Achievements
    -- Received an upgrade from BBB- to BBB from Standard and Poor's Ratings
       Services on October 23, 2008
    -- 34.7% debt-to-total market capitalization ratio, 3.67 times interest
       coverage ratio as of December 31, 2008
    -- 4.1% increase in same center net operating income during 2008
    -- 44.1% average increase in base rental rates on 492,000 square feet of
       re-leased space during 2008, compared to a 39.7% average increase in
       the prior year
    -- 17.5% increase in average base rental rates on 1.1 million square feet
       of signed renewals during 2008, compared to a 13.9% average increase in
       the prior year
    -- 96.6% occupancy rate for wholly-owned stabilized properties as of
       December 31, 2008
    -- $336 per square foot in reported tenant comparable sales for the
       rolling twelve months ended December 31, 2008

Steven B. Tanger, President and Chief Executive Officer, commented, "During these difficult economic times, we are fortunate that the majority of our tenants remain financially strong. Our low occupancy cost to our tenants, and our tenant and geographic diversification should allow us to remain profitable. In addition, our balance sheet is conservatively positioned, and our dividend is well covered by our operating cash flow."

Successful Financing Activity Provides Additional Liquidity

During the first quarter of 2008, Tanger successfully increased its unsecured line of credit capacity by over 60% from $200.0 million to $325.0 million. Tanger maintains separate lines of credit, ranging in size from $25.0 million to $100.0 million, with six different financial institutions. Of the company's lines of credit, five lines of credit, totaling $300.0 million, mature on or about June 30, 2011, and one line of credit, totaling $25.0 million, matures on June 30, 2009. The borrowing rates on the company's lines of credit range from LIBOR plus 60 basis points to LIBOR plus 85 basis points.

On June 11, 2008, the company closed on a $235.0 million unsecured three- year term loan, with a syndication of nine banks. The facility bears interest at a spread over LIBOR of 160 basis points, with the spread adjusting over time, based upon the debt ratings of the company. Subsequently, Tanger entered into two LIBOR based interest rate swap agreements, which effectively changes the floating rate of interest on the entire unsecured three-year term loan facility to a fixed rate of 5.25%.

On June 26, 2008 the company used proceeds from the term loan to repay its only remaining mortgage loan with a principal balance of approximately $170.7 million two weeks ahead of its optional prepayment date. As a result of the repayment of this mortgage, Tanger's entire portfolio of wholly-owned properties was unencumbered as of December 31, 2008.

On October 23, 2008, Tanger was upgraded by Standard and Poor's Ratings Services from BBB- to BBB, making it one of only two REITs to receive a ratings upgrade in 2008. The company has an investment grade rating with Moody's Investors Service of Baa3.

As of December 31, 2008, the company had $161.5 million in floating rate debt outstanding, all of which is associated with its lines of credit, representing 20.3% of its total debt. Tanger's total market capitalization as of December 31, 2008 was approximately $2.3 billion, with $795.3 million of debt outstanding, equating to a debt to total market capitalization of 34.7% as of December 31, 2008. During the year ended December 31, 2008, the company maintained an interest coverage ratio of 3.67 times. Tanger remains in compliance with all of its bond covenants, which are disclosed in the company's supplemental information package for the quarter ended December 31, 2008.

National Platform Continues to Drive Operating Results

Tanger's broad geographic representation and established brand name within the factory outlet industry continues to generate solid operating results. The company's portfolio of properties had a year-end occupancy rate of 96.6%, representing the 28th consecutive year since the company commenced operations in 1981 that it has achieved a year-end portfolio occupancy rate at or above 95%.

During 2008, Tanger executed 377 leases, totaling 1,595,000 square feet relating to its existing, wholly-owned properties. For the year, 1,103,000 square feet of renewals generated a 17.5% increase in average base rental rates, and represented 82.5% of the square feet originally scheduled to expire during 2008. Average base rental rates on re-tenanted space during the year increased 44.1% and accounted for the remaining 492,000 square feet.

Tanger continues to derive its rental income from a diverse group of national brand name manufacturers and retailers with no single tenant accounting for more than 8.4% of its gross leasable area and 5.3% of its total base and percentage rentals.

Same center net operating income increased 2.5% for the fourth quarter and 4.1% for the year ended December 31, 2008 compared to the same periods in 2007. This follows same center annual net operating income increases of 5.3% in 2007, 3.1% in 2006, 3.8% in 2005 and 1.2% in 2004.

Excluding two properties undergoing major renovations, reported tenant comparable sales per square foot for the rolling twelve months ended December 31, 2008 decreased 1.6% to $336 per square foot. Tanger's average tenant occupancy cost as a percentage of average sales was 8.2% for 2008 compared to 7.7% in 2007, 7.4% in 2006, 7.5% in 2005 and 7.3% in 2004.

Investment Activities Provide Future Earnings Growth

On August 29, 2008, Tanger held a very successful grand opening celebration at its new center in Washington, PA, south of Pittsburgh, PA. As of December 31, 2008, the property was 85% occupied. The Washington, PA center is wholly owned by Tanger.

On October 23, 2008, Tanger held the grand opening of its center in Deer Park (Long Island), NY. As of December 31, 2008, the property was 78% occupied. The Deer Park property is owned through a joint venture of which Tanger and two venture partners each own a one-third interest.

Based upon the tremendous response by customers at both of these centers' grand opening events, the company feels there will continue to be additional tenant interest in the remaining available space and additional signed leases for both properties may be completed during the first year stabilization period.

Tanger has purchase options on new development sites located in Mebane, NC and Irving, TX, and is continuing with its predevelopment work at these locations. In October, 2008, Tanger made the decision to terminate its purchase options in Port St. Lucie, Florida and Phoenix, Arizona. As a result, the company recorded a $3.3 million charge relating to its predevelopment costs on these and other projects deemed no longer probable during the fourth quarter of 2008.

On January 5, 2009, the company acquired the remaining 50% interest in the joint venture which owns the Tanger Outlet Center located on Highway 17 in Myrtle Beach, South Carolina, for a cash purchase price of $32.0 million plus the assumption of a $35.8 million mortgage.

In 2009 Tanger Expects Additional Growth in FFO Per Share

Based on Tanger's internal budgeting process, the company's view on current market conditions, and the strength and stability of its core portfolio, Tanger currently believes its net income available to common shareholders for 2009 will be between $0.87 and $0.97 per share and its FFO available to common shareholders for 2009 will be between $2.73 and $2.83 per share. The company's earnings estimates reflect the accounting change relating to the recording of additional non-cash interest expense associated with its $149.5 million of outstanding convertible debt, which will have a negative impact on earnings of approximately $0.07 per share. Tanger's earnings estimates do not include the impact of any potential sales or acquisitions of properties. The following table provides the reconciliation of estimated diluted FFO per share to estimated diluted net income per share:


                                                    Low Range      High Range
    Estimated diluted net income per common share    $  0.87        $  0.97
    Minority interest, gain/loss on the sale of
     real estate, depreciation and amortization
     uniquely significant to real estate including
     minority interest share and our share of
     joint ventures                                     1.86           1.86
    Estimated diluted FFO per share                  $  2.73        $  2.83

Year End Conference Call

Tanger will host a conference call to discuss its year end 2008 results for analysts, investors and other interested parties on Wednesday, February 18, 2009, 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 fourth quarter and year end 2008 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 http://www.tangeroutlet.com/investorrelations/news/ under the News Releases section. A telephone replay of the call will be available from February 18, 2009 starting at 1:00 P.M. Eastern Time through 11:59 P.M., February 27, 2009, by dialing 1-800-642-1687 (conference ID # 81080427). Additionally, an online archive of the broadcast will also be available through February 27, 2009.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), is a fully integrated, self-administered and self-managed publicly traded REIT. As of December 31, 2008, the company owned 30 outlet centers in 21 states coast to coast, totaling approximately 8.8 million square feet of gross leasable area. Tanger also managed for a fee and owned an interest in three outlet centers containing approximately 1.4 million square feet. Tanger is filing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended December 31, 2008. For more information on Tanger Outlet Centers, visit our web site at http://www.tangeroutlet.com .

Estimates of future net income per share and FFO per share are by definition, and certain other matters discussed in this press release regarding our re-merchandising strategy, the renewal and re-tenanting of space, tenant sales and sales trends, interest rates, funds from operations, the development and opening of new centers, and coverage of the current dividend may be forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those projected due to various factors including, but not limited to, the risks associated with general economic and local real estate conditions, the company's ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, the availability and cost of capital, the company's ability to lease its properties, the company's inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition. For a more detailed discussion of the factors that affect our operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (and December 31, 2008, when available).



             TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)
                                 (Unaudited)

                            Three months ended             Year ended
                               December 31,               December 31,
                             2008         2007         2008         2007
    REVENUES
      Base rentals (a)     $42,694      $38,210     $159,068     $146,824
      Percentage rentals     2,949        3,323        7,058        8,757
      Expense
       reimbursements       20,557       18,482       72,004       65,978
      Other income           2,137        1,963        7,261        7,206
        Total revenues      68,337       61,978      245,391      228,765

    EXPENSES
      Property operating    21,139       20,244       77,974       73,737
      General and
       administrative        5,099        4,911       22,264       19,007
      Depreciation and
       amortization         16,733       14,940       62,326       63,810
      Abandoned due
       diligence costs       3,336          246        3,923          646
        Total expenses      46,307       40,341      166,487      157,200
    Operating income        22,030       21,637       78,904       71,565
      Interest expense (b)  10,252        9,851       38,443       40,066
      Loss on settlement of
       US treasury rate
       locks                   ---          ---        8,910          ---
    Income before equity in
     earnings of
     unconsolidated
     joint ventures, minority
     interest and
     discontinued
     operations             11,778       11,786       31,551       31,499
    Equity in earnings
     (loss)of unconsolidated
     joint ventures           (696)         443          852        1,473
    Minority interest in
     operating partnership  (1,577)      (1,778)      (4,371)      (4,494)
    Income from continuing
     operations              9,505       10,451       28,032       28,478
    Discontinued operations,
     net of minority interest
     (c)                       ---           22          ---           98
    Net income               9,505       10,473       28,032       28,576
    Less applicable
     preferred share
     dividends              (1,406)      (1,406)      (5,625)      (5,625)
    Net income available
     to common
     shareholders           $8,099       $9,067      $22,407      $22,951

    Basic earnings per
     common share:
      Income from continuing
       operations             $.26         $.29         $.72         $.74
      Net income              $.26         $.29         $.72         $.74

    Diluted earnings per
     common share:
      Income from continuing
       operations             $.26         $.29         $.71         $.72
      Net income              $.26         $.29         $.71         $.72

    Summary of discontinued
     operations (c)
      Operating income from
       discontinued
       operations             $---          $21         $---         $112
      Gain on sale of real
       estate                  ---            6          ---            6
      Income from discontinued
       operations              ---           27          ---          118
      Minority interest in
       discontinued
       operations              ---          (5)          ---          (20)
    Discontinued operations,
     net of minority
     interest                 $---          $22         $---          $98


    (a)  Includes straight-line rent and market rent adjustments of $626 and
         $832 for the three months ended and $3,551 and $4,023 for the years
         ended December 31, 2008 and 2007, respectively.
    (b)  Includes prepayment premium of $406 for the year ended December 31,
         2008 related to the repayment of our only remaining mortgage which
         had a principal balance of $170.7 million.
    (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 or classified as held for sale during the
         above periods in which we have no significant continuing involvement
         have been reported above as discontinued operations for the periods
         presented.



             TANGER FACTORY OUTLET CENTERS, INC AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share data)
                                 (Unaudited)


                                               December 31,     December 31,
                                                  2008             2007
    ASSETS:
    Rental property
     Land                                       $135,689         $130,075
     Buildings, improvements and fixtures      1,260,017        1,104,459
     Construction in progress                      3,823           52,603
                                               1,399,529        1,287,137
     Accumulated depreciation                   (359,298)        (312,638)
     Rental property, net                      1,040,231          974,499
    Cash and cash equivalents                      4,977            2,412
    Investments in unconsolidated joint ventures   9,457           10,695
    Deferred charges, net                         37,942           44,804
    Other assets                                  29,248           27,870
        Total assets                          $1,121,855       $1,060,280


    LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY:
    Liabilities
    Debt
     Senior, unsecured notes (net of discount
      of $681 and $759, respectively)           $398,819         $498,741
     Unsecured term loan                         235,000              ---
     Mortgages payable (including premium of
     $0 and $1,046, respectively)                    ---          173,724
     Unsecured lines of credit                   161,500           33,880
     Total debt                                  795,319          706,345
    Construction trade payables                   11,968           23,813
    Accounts payable and accrued expenses         57,191           47,185
      Total liabilities                          864,478          777,343
    Commitments
    Minority interest in operating partnership    29,321           33,733
    Shareholders' equity
    Preferred shares, 7.5% Class C, liquidation
     preference $25 per share, 8,000,000
     authorized, 3,000,000 shares issued and
     outstanding at December 31, 2008 and 2007    75,000           75,000
    Common shares, $.01 par value, 150,000,000
     authorized, at 31,667,501 and 31,329,241
     shares issued and outstanding December 31,
     2008 and 2007, respectively                     317              313
    Paid in capital                              358,891          351,817
    Distributions in excess of earnings         (196,535)        (171,625)
    Accumulated other comprehensive loss          (9,617)          (6,301)
      Total shareholders' equity                 228,056          249,204
        Total liabilities, minority interest
         and shareholders' equity             $1,121,855       $1,060,280



               TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
                           SUPPLEMENTAL INFORMATION
        (in thousands, except per share, state and center information)
                                 (Unaudited)

                              Three months ended           Year ended
                                  December 31,             December 31,
                              2008         2007         2008         2007

    FUNDS FROM OPERATIONS (a)
    Net income              $9,505      $10,473      $28,032      $28,576
    Adjusted for:
      Minority interest in
       operating
       partnership           1,577        1,778        4,371        4,494
      Minority interest,
       depreciation and
       amortization
       attributable to
       discontinued
       operations              ---            5          ---          165
      Depreciation and
       amortization uniquely
       significant to
       real estate -
       consolidated         16,627       14,865       61,962       63,506
      Depreciation and
       amortization uniquely
       significant to real
       estate -
       unconsolidated
       joint ventures        1,227          626        3,165        2,611
      Gain on sale of real
       estate                  ---           (6)         ---           (6)
    Funds from operations
     (FFO)                  28,936       27,741       97,530       99,346
    Preferred share
     dividends              (1,406)      (1,406)      (5,625)      (5,625)
    Funds from operations
     available to common
     shareholders          $27,530      $26,335      $91,905      $93,721
    Funds from operations
     available to common
     shareholders per
     share - diluted          $.74         $.70        $2.46        $2.48

    WEIGHTED AVERAGE SHARES
    Basic weighted average
     common shares          31,160       30,867       31,084       30,821
    Effect of exchangeable
     notes                     ---          478          ---          478
    Effect of outstanding
     share and unit options     98          202          136          214
    Effect of unvested
     restricted share awards   112          178          142          155
    Diluted weighted average
     common shares
     (for earnings per share
     computations)          31,370       31,725       31,362       31,668
    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)    37,437       37,792       37,429       37,735

    OTHER INFORMATION
    Gross leasable area
    open at end of period -
      Wholly owned           8,820        8,398        8,820        8,398
      Partially owned -
       unconsolidated        1,352          667        1,352          667

    Outlet centers in
     operation -
      Wholly owned              30           29           30           29
      Partially owned -
       unconsolidated            3            2            3            2

    States operated in
     at end of period (c)       21           21           21           21
    Occupancy percentage
     at end of period (c) (d) 96.6%        97.6%        96.6%        97.6%


             TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
                    FOOTNOTES TO SUPPLEMENTAL INFORMATION

    (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)  Excludes Myrtle Beach, South Carolina Hwy 17 and Wisconsin Dells,
         Wisconsin properties for the 2008 and 2007 periods which were
         operated by us through 50% ownership joint ventures and excludes Deer
         Park, New York property for the 2008 period which is operated by us
         through a 33.3% ownership joint venture.

    (d)  Excludes our wholly-owned, non-stabilized center in Washington,
         Pennsylvania for the 2008 periods.

SOURCE Tanger Factory Outlet Centers, Inc.



RELATED LINKS
http://www.tangeroutlet.com
http://www.tangeroutlet.com/investorrelations/news/

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