EXHIBIT INDEX
Sequentially
Exhibit No. Numbered Page
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99.1 Press release of the Company and the Operating
Partnership, issued January 29, 2001 4
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EXHIBIT 99.1
NEWS RELEASE
FOR RELEASE: IMMEDIATE RELEASE
CONTACT: Frank C. Marchisello, Jr.
(336) 292-3010
TANGER REPORTS YEAR END 2000 RESULTS
Same-Space Sales Up 7% for the Year to a Record $281 per Square Foot
Greensboro, NC, January 29, 2001, Tanger Factory Outlet Centers,
Inc. (NYSE:SKT) today reported funds from operations (FFO) for the fourth
quarter of 2000 of $.87 per share, or $10.1 million, before a non-cash,
non-recurring charge for costs written-off associated with abandoned development
projects, compared to $.96 per share, or $11.2 million, in the same quarter of
1999. For the year ended December 31, 2000, FFO was $3.42 per share, or $40.0
million, before a non-cash, non-recurring charge stated above, compared to $3.56
per share, or $41.7 million in the same period of 1999. The results for the
fourth quarter and the year ended December 31, 2000 were negatively impacted by
higher average interest rates and dilution associated with the sale of two
properties in June of 2000. Including the non-cash, non-recurring charge for
costs written-off associated with abandoned development projects of $1.8 million
FFO was $.71 and $3.26 per share for the fourth quarter and year ended December
31, 2000, respectively. All FFO calculations are on a fully diluted basis,
assume full conversion of the minority interest in the operating partnership,
and are consistent with the new NAREIT clarification of FFO effective on January
1, 2000. The adoption of the new clarification had no impact on the 1999 amounts
previously reported.
Tanger posted the following results during the year ended December 31, 2000:
o Base rental income increased 3% to $71.5 million from $69.2 million
o Percentage rental income increased 4% to $3.3 million from $3.1 million
o Total revenues increased 5% to $108.8 million from $104.0 million
o Payout ratio was 71% providing additional coverage of the current dividend
o Reported same-space sales increased 7% to $281 per square foot
o Renewed 75% of the 520,000 square feet of space that came up for renewal
with a 4% average increase in base rental rates
o Released 305,000 square feet of space with an 8% average increase in base
rental rates
o Added 235,000 square feet of expansions throughout five existing successful
centers
o Sold centers in Lawrence, KS and McMinnville, OR for net cash proceeds of
$7.1 million
o Generated $1.5 million in additional capital through the sale of four
outparcels of land
o Closed on over $75 million in long-term financings with nationally
recognized institutions
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Re-merchandising Strategy Produces Record Same-Space Sales
Reported same-space sales increased by 7% for the twelve months ended December
31, 2000 to a record $281 per square foot and by 6% for the three months ended
December 31, 2000. The increase in same space sales reflects the ongoing
execution of the Company's strategy to re-merchandise selected centers by
replacing low volume tenants with high volume tenants like Gap, Old Navy,
Nautica, Polo Ralph Lauren and Tommy Hilfiger.
The blizzards and extremely cold weather in December caused the closing of the
Company's centers for the equivalent of more than 17 shopping days throughout
the portfolio. Even though the Company's tenants had no sales while their stores
were closed during the highest volume month of the year, the same-store sales
trends for the year ended December 31, 2000 improved over the previous year.
Same-store sales were up 0.4% for the twelve months ended December 31, 2000
compared to a decrease of 1% for the twelve months ended December 31, 1999.
Reported tenant sales in 2000 for all Tanger Outlet Centers increased 8% to $1.3
billion compared to $1.2 billion in 1999.
Sales Growth Produces Increase in Average Rental Rates
The Company renewed 75% of the 520,000 square feet that came up for renewal in
2000 with the existing tenants at an average base rental rate approximately 4%
higher than the expiring rate. This compares with 85% of the 715,000 square feet
that were renewed with the existing tenants at an average base rental rate equal
to the expiring rate in 1999. The Company also released 305,000 square feet
during 2000 at an 8% increase in the average base rental rate. This compares
favorably with the 241,000 square feet that were released in 1999 at an average
increase of 7%. During 2001, the Company has approximately 536,000 square feet
coming up for renewal.
In addition, the average tenant occupancy costs decreased from 7.8% in 1999 to
7.4% in 2000. The Company ended the year with approximately 5.2 million square
feet of gross leasable area in operation. The portfolio is comprised of a highly
diversified group of tenants with no single tenant representing more than 5.9%
of the Company's gross leasable area. At December 31, 2000, the Company's
operating properties were 96% occupied.
Overall Growth Continues
During 2000, the Company added approximately 235,000 square feet of expansions
throughout five existing centers. In addition, the Company currently has
approximately 57,000 square feet of expansion space under construction at our
center in San Marcos, TX, which is scheduled to open the second half of 2001.
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In the second quarter of 2000 the Company sold centers in Lawrence, KS and
McMinnville, OR totaling approximately 186,000 square feet for net cash proceeds
of $7.1 million. Proceeds from the sale were used to reduce amounts outstanding
under existing lines of credit. The combined net operating income of these two
centers represented approximately 1% of our total portfolio's estimated net
operating income. As was previously reported, the Company recognized a $5.9
million loss on the sale of these properties in the second quarter of 2000.
The Company also closed on the sale of its land and site improvements in Stroud,
OK for net proceeds of approximately $723,500. As a result of this sale the
Company recognized a loss of $1 million on the sale of the property in the
fourth quarter of 2000. This was property remaining after the Stroud center was
completely destroyed by a tornado in May of 1999. The Company maintains full
replacement cost insurance on all of our properties and as a result, had
previously recognized a gain on disposal of the Stroud center of $4.1 million
during the year ended December 31, 1999.
As was previously announced, on November 9, 2000 the Company terminated its
contract to purchase twelve acres of land in Dania Beach/Ft. Lauderdale,
Florida. Because of this event, the Company has written off all development
costs associated with the site in Ft. Lauderdale, as well as additional costs
associated with various other non-recurring development activities at other
sites. The total non-cash, non-recurring charge for abandoned development costs
in the fourth quarter of 2000 was $1.8 million.
The Company continues to have an option to purchase the retail portion of a site
at the Bourne Bridge Rotary in Cape Cod, MA. Based on tenant demand, the Company
plans to develop a new 250,000 square foot outlet center at this location. The
entire site will contain more than 750,000 square feet of mixed-use
entertainment, retail, office and residential community built in the style of a
Cape Cod Village. The local and state planning authorities are currently
reviewing the project, and anticipate final approvals this year. Due to the
extensive amount of site work and road construction, stores are not expected to
open until mid 2003.
Strong Balance Sheet Maintained
The Company continued its strong relationships with multiple sources of capital.
During 2000, the Company obtained over $75 million in long-term financings with
nationally recognized financial institutions. The Company remains committed to
its long standing strategy of keeping the majority of its assets unencumbered.
As of December 31, 2000, the Company had unencumbered properties totaling $408
million in gross book value, or 70% of its real estate assets. The Company also
had a payout ratio of 71%. The retained cash flow after the dividend payments
provides the Company with capital and additional coverage of the current
dividend.
Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, said, "Our
management team has done an outstanding job in continuing our successful
remerchandising and growth strategy. Above all, the Tanger Team remains highly
focused on our core competency of increasing the cash flows and value of our
portfolio."
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Tanger Factory Outlet Centers, Inc., a fully-integrated, self-administered and
self-managed publicly-traded REIT, presently owns and operates 29 centers in 20
states coast to coast, totaling approximately 5.2 million square feet of gross
leasable area. For more information on Tanger Outlet Centers, visit our web site
at www.tangeroutlet.com.
This press release contains forward-looking statements regarding the Company's
re-merchandising strategy, the renewal and releasing of space, sales trends, the
development of new centers, the opening of ongoing expansions, coverage of the
current dividend and the impact of sales of the Company's outparcels. These
forward-looking statements are subject to risks and uncertainties and actual
results could differ materially from these projections due to various factors
including, but not limited to, the risks associated with general economic and
local real estate conditions, the availability and cost of capital, the
Company's ability to lease its properties, and competition. The factory outlet
centers and other assets of the Company's business are owned by, and all of its
operations are conducted by Tanger Properties Limited Partnership (the
"Operating Partnership"). Accordingly, the financial and other operating results
of the Operating Partnership are substantially similar to those of the Company,
except for those items that reflect the Operating Partnership's status as a
partnership. For a more detailed discussion of the factors that affect the
Company and the Operating Partnership's operating results, interested parties
should review the Company and the Operating Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1999.
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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
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(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES
Base rentals (a) $18,545 $17,866 $71,457 $69,180
Percentage rentals 1,351 1,367 3,253 3,141
Expense reimbursements 7,908 7,594 30,046 27,910
Other income (b) 564 982 4,065 3,785
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Total revenues 28,368 27,809 108,821 104,016
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EXPENSES
Property operating 9,165 8,364 33,623 30,585
General and administrative 1,877 1,889 7,366 7,298
Interest 7,114 6,271 27,565 24,239
Depreciation and amortization 6,706 6,299 26,218 24,824
Asset write-down (c) 1,800 --- 1,800 ---
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Total expenses 26,662 22,823 96,572 86,946
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Income before loss on sale or disposal of real estate,
minority interest and extraordinary item 1,706 4,986 12,249 17,070
(Loss)/gain on sale or disposal of real estate (1,046) 2,828 (6,981) 4,141
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Income before minority interest and extraordinary item 660 7,814 5,268 21,211
Minority interest (61) (2,044) (956) (5,374)
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Income before extraordinary item 599 5,770 4,312 15,837
Extraordinary item - Loss on early extinguishment of debt,
net of minority interest of $96 --- --- --- (249)
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Net income 599 5,770 4,312 15,588
Less applicable preferred share dividends (441) (476) (1,823) (1,917)
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Net income available to common shareholders $158 $5,294 $2,489 $13,671
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Basic earnings per common share:
Income before extraordinary item $.02 $.67 $.32 $1.77
Extraordinary item --- --- --- (.03)
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Net income $.02 $.67 $.32 $1.74
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Diluted earnings per common share:
Income before extraordinary item $.02 $.67 $.31 $1.77
Extraordinary item --- --- --- (.03)
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Net income $.02 $.67 $.31 $1.74
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Funds from operations (FFO) $8,337 $11,226 $38,203 $41,673
FFO per common share - diluted $.71 $.96 $3.26 $3.56
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(a) Includes straight-line rent adjustment of $(92) and $2 for the three months ended, and $(261) and $214 for the years
ended December 31, 2000 and 1999.
(b) Includes $908 and $687 in gains on sales of outparcels of land for the years ended December 31, 2000 and 1999.
(c) Represents pre-development costs associated with projects no longer feasible to develop.
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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
2000 1999
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(unaudited) (unaudited)
ASSETS
Rental Property
Land $59,858 $63,045
Buildings, improvements and fixtures 505,554 484,277
Developments under construction 19,516 18,894
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584,928 566,216
Accumulated depreciation (122,365) (104,511)
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Rental property, net 462,563 461,705
Cash and cash equivalents 634 503
Deferred charges, net 8,566 8,176
Other assets 15,645 19,685
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Total assets $487,408 $490,069
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilites
Long-term debt
Senior, unsecured notes $150,000 $150,000
Mortgages payable 135,313 90,652
Unsecured term loan 20,000 ---
Unsecured bank debt 41,530 88,995
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346,843 329,647
Construction trade payables 9,784 6,287
Accounts payable and accrued expenses 12,807 13,081
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Total liabilities 369,434 349,015
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Commitments
Minority interest 27,097 33,290
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Shareholders' equity
Preferred shares, $.01 par value, 1,000,000 shares authorized,
80,600 and 85,270 shares issued and outstanding at
December 31, 2000 and 1999 1 1
Common shares, $.01 par value, 50,000,000 shares authorized,
7,918,911 and 7,876,835 shares issued and outstanding at
December 31, 2000 and 1999 79 79
Paid in capital 136,358 136,571
Distributions in excess of net income (45,561) (28,887)
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Total shareholders' equity 90,877 107,764
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Total liabilities and shareholders' equity $487,408 $490,069
================================================================================================================================
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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(In thousands, except per share, state and center information)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
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Funds from Operations:
Net income $599 $5,770 $4,312 $15,588
Adjusted for:
Extraordinary item - loss on early extinguishment of debt --- --- --- 249
Minority interest 61 2,044 956 5,374
Depreciation and amortization uniquely significant to real estate 6,631 6,240 25,954 24,603
Loss/(gain) on sale or disposal of real estate 1,046 (2,828) 6,981 (4,141)
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Funds from operations before minority interest $8,337 $11,226 $38,203 $41,673
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Funds from operations per share - diluted $.71 $.96 $3.26 $3.56
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WEIGHTED AVERAGE SHARES
Basic weighted average common shares 7,919 7,858 7,894 7,861
Effect of outstanding share and unit options 27 --- 28 11
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Diluted weighted average common shares (for
earnings per share computations) 7,946 7,858 7,922 7,872
Convertible preferred shares (a) 726 787 751 793
Convertible operating partnership units (a) 3,033 3,033 3,033 3,033
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Diluted weighted average common shares (for
funds from operations per share computations) 11,705 11,678 11,706 11,698
============================================================================================================================
EBITDA
EBITDA (b) $17,326 $17,556 $67,832 $66,133
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OTHER INFORMATION
Gross leasable area open at end of period 5,179 5,149 5,179 5,149
Weighted average gross leasable area 5,117 5,054 5,115 4,996
Outlet centers in operation 29 31 29 31
New centers acquired --- 1 --- 1
Centers sold --- --- 2 1
Centers expanded 3 1 5 5
States operated in at end of period 20 22 20 22
Occupancy percentage at end of period 96 97 96 97
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(a) The convertible preferred shares and operating partnership units (minority interest) are not dilutive on earnings
per share computed in accordance with generally accepted accounting principles.
(b) EBITDA represents earnings before gain/(loss) on sale or disposal of real estate, extraordinary item, asset
write-down, interest expense, income taxes, depreciation and amortization.
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