Tanger Reports Third Quarter 2008 Results

10.6% Increase in Total FFO, 9.4% Increase in FFO Per Share

4.7% Increase in Same Center Net Operating Income

Adds Bridget Ryan Berman to Board of Directors

GREENSBORO, N.C., Oct. 28 /PRNewswire-FirstCall/ -- Tanger Factory Outlet Centers, Inc. (NYSE: SKT) today reported funds from operations available to common shareholders ("FFO"), a widely accepted measure of REIT performance, for the three months ended September 30, 2008 increased 9.4% to $0.70 per share, or $26.5 million, as compared to FFO of $0.64 per share, or $23.9 million, for the three months ended September 30, 2007. For the nine months ended September 30, 2008, FFO was $64.4 million, or $1.70 per share, as compared to FFO of $67.4 million, or $1.80 per share, for the nine months ended September 30, 2007.

FFO for the nine months ended September 30, 2008 was impacted by a previously announced $8.9 million charge relating to the settlement of $200.0 million in 10 year US Treasury locks, as well as a $406,000 prepayment premium associated with the early extinguishment of debt. Excluding these two non-recurring charges, FFO for the nine months ended September 30, 2008 would have been $1.94 per share, representing an increase of 7.8% compared to the nine months ended September 30, 2007.

For the three months ended September 30, 2008, net income available to common shareholders increased 26.9% to $8.9 million or $0.28 per share, as compared to $7.0 million, or $0.22 per share for the third quarter of 2007. Net income available to common shareholders for the nine months ended September 30, 2008 was $14.3 million, or $0.45 per share compared $13.9 million, or $0.44 per share for the first nine months of 2007. Net income available to common shareholders for the nine months ended September 30, 2008 was also impacted by the non-recurring 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 press release.

Third Quarter Highlights

-- Received an upgrade from BBB- to BBB from Standard and Poor's Ratings Services on October 23, 2008

-- 31.2% debt-to-total market capitalization ratio, compared to 30.5% as of September 30, 2007

-- 3.92 times interest coverage ratio compared to 3.40 times last year

-- 4.7% increase in same center net operating income for the third quarter and year to date

-- 47.0% average increase in base rental rates on 77,000 square feet of re-leased space during the third quarter of 2008, 43.8% increase year to date, compared to a 37.6% increase year to date in 2007

-- 8.3% average increase in base rental rates on 56,000 square feet of signed renewals during the third quarter of 2008, 17.6% increase year to date, compared to a 13.2% increase year to date in 2007

-- 96.7% occupancy rate for wholly-owned properties, up 0.5% from June 30, 2008

-- Same-space tenant sales for the rolling twelve months ended September 30, 2008 increased 0.3% to $341 per square foot excluding two properties undergoing major renovations

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, "Our third quarter results were very positive. Same center net operating income increased 4.7% for the quarter as a result of our continuing efforts to drive rental rates on the renewal and releasing of space. Our balance sheet is conservatively positioned given current financial and economic conditions."

Financing Activities and Balance Sheet Summary

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 this year. The company also currently maintains an investment grade rating with Moody's Investors Service of Baa3.

On June 11, 2008, Tanger closed on a $235.0 million unsecured three year term loan facility. 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.

On June 26, 2008, the company used proceeds from the term loan to repay its only remaining mortgage 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 is now unencumbered. The remaining proceeds of approximately $62.8 million, net of closing costs, were applied against amounts outstanding on the company's unsecured lines of credit and to settle two treasury based interest rate lock protection agreements.

On July 9, 2008, Tanger entered into a LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on $118.0 million of the unsecured three year term loan facility to a fixed rate of 5.21%. The interest rate swap agreement expires on April 1, 2011. Subsequently, on September 25, 2008, the company entered into an additional LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on the remaining $117.0 million of the unsecured three year term loan facility to a fixed rate of 5.30%. This interest rate swap agreement also expires on April 1, 2011.

As of September 30, 2008, Tanger had $783.3 million of debt outstanding, equating to a 31.2% debt-to-total market capitalization ratio. The company had $149.5 million outstanding on its $325.0 million in available unsecured lines of credit, and approximately 81% of Tanger's debt was at fixed interest rates as of September 30, 2008. During the third quarter of 2008, Tanger continued to maintain a strong interest coverage ratio of 3.92 times, compared to 3.40 times during the third quarter of last year.

Portfolio Operating Results

During the first nine months of 2008, Tanger executed 351 lease documents, totaling 1,521,000 square feet within its wholly-owned properties. Lease renewals accounted for 1,040,000 square feet, or 77.0% of the square feet which was scheduled to expire during 2008, and generated a 17.6% increase in average base rental rates on a straight-line basis. Base rental increases on re-tenanted space during the first nine months of 2008 averaged 43.8% on a straight-line basis and accounted for the remaining 481,000 square feet.

Same center net operating income increased 4.7% for the third quarter of 2008 and the first nine months of 2008 compared to the same period in 2007. Excluding two properties undergoing major renovations, reported tenant comparable sales per square foot for the rolling twelve months ended September 30, 2008 were up 0.3% to $341 per square foot, compared to $340 per square foot for the twelve months ended September 30, 2007. Sales were impacted by the general weakness in the U.S. economy, as well as severe weather and hurricanes during the third quarter of the year.

Investment and Other Activities

In Washington County, south of Pittsburgh, Pennsylvania, Tanger held a very successful grand opening celebration of its second center in the state on August 29, 2008. The first phase, totaling 370,000 square feet, was approximately 86% leased upon opening. The Washington County center is wholly owned by Tanger.

On October 23, 2008, Tanger held the grand opening of its center in Deer Park (Long Island), NY. The initial phase which contains approximately 656,000 square feet of retail space and 26,000 square feet of office space, opened to huge crowds and parking lots filled beyond their capacity. The retail space at the Deer Park center was approximately 77% leased upon opening. 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 confident additional tenant interest in the remaining available space will remain high and additional signed leases for both properties will be completed during the first year stabilization period.

Tanger has entered into purchase options on new development sites located in Mebane, North Carolina and Irving, Texas. Tanger is continuing with its predevelopment work at these locations. However in October, 2008, Tanger made the decision to terminate its purchase options with respect to its potential sites in Port St. Lucie, Florida and Phoenix, Arizona. As a result, Tanger will be taking a charge of approximately $1.8 million relating to its predevelopment costs on these projects during the fourth quarter of 2008.

Tanger Elects New Board Member

At its meeting on October 28, 2008, the Nominating and Corporate Governance Committee of the company's Board of Directors recommended, and the Board of Directors approved, that the number of directors be expanded from six members to seven members, and that Ms. Bridget Ryan Berman shall serve as independent director of the company effective January 1, 2009 until the next Annual Shareholders Meeting.

Ms. Berman was formerly the Chief Executive Officer of Giorgio Armani Corp., the wholly-owned US subsidiary of Giorgio Armani S.p.A., one of the leading fashion and luxury goods groups in the world, from 2006 to 2007. Previously, she was Vice President/Chief Operating Officer of Apple Computer Retail from 2004 to 2005 and held various executive positions with Polo Ralph Lauren Corporation, including Group President of Polo Ralph Lauren Global Retail, from 1992 to 2004. Ms. Berman also served in various capacities at May Department Stores, Federated Department Stores, and Allied Stores Corp. from 1982 to 1992. In addition, Ms. Berman was a member of the board of directors, and served on the audit committee for J. Crew Group, Inc. from 2005 to 2006.

"We are pleased to add to our Board of Directors someone with Ms. Berman's credentials," said Steven B. Tanger, President and Chief Operating Officer. "Ms. Berman's extensive experience and impressive background in the retail industry will add value and perspective to our board."

2008 FFO Per Share Guidance

Based on current market conditions and the strength and stability of its core portfolio, the company currently believes its net income for 2008, excluding gains or losses on the sale of real estate, will be between $0.63 and $0.69 per share and its FFO for 2008 will be between $2.35 and $2.41 per share. The company's earnings estimates include the impact of the expected write-off of predevelopment costs mentioned above totaling approximately $1.8 million, but do not include the impact of any potential gains on the sale of land parcels or the impact of any potential sales or acquisitions of properties. The following table provides the reconciliation of estimated diluted net income available to common shareholders per share to estimated diluted FFO per share:



    For the twelve months ended December 31, 2008:
                                                     Low Range     High Range
    Estimated diluted net income per share             $0.63          $0.69
    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                            1.72           1.72
    Estimated diluted FFO per share                    $2.35          $2.41


Third Quarter Conference Call

Tanger will host a conference call to discuss its third quarter results for analysts, investors and other interested parties on Wednesday, October 29, 2008, 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 2008 Financial Results call. Alternatively, the call will be web cast by CCBN and can be accessed at the company's web site at http://www.tangeroutlet.com/investorrelations/news .

A telephone replay of the call will be available from October 29, 2008 starting at 1:00 P.M. Eastern Time through 11:59 P.M., November 7, 2008, by dialing 1-800-642-1687 (conference ID # 65292786). Additionally, an online archive of the broadcast will also be available through November 7, 2008.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated, self-administered and self-managed publicly traded REIT, presently owns 30 outlet centers in 21 states coast to coast, totaling approximately 8.8 million square feet of gross leasable area. Tanger also manages for a fee and owns an interest in three outlet centers containing approximately 1.3 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 September 30, 2008. For more information on Tanger Outlet Centers, visit our web site at 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 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.



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

                                   Three months ended    Nine months ended
                                      September 30,       September 30,
                                    2008        2007      2008       2007
    REVENUES
      Base rentals (a)            $40,519     $37,207   $116,374  $108,614
      Percentage rentals            1,811       2,305      4,109     5,434
      Expense reimbursements       18,277      16,719     51,447    47,496
      Other income                  2,166       2,155      5,124     5,243
        Total revenues             62,773      58,386    177,054   166,787
    EXPENSES
      Property operating           20,678      19,158     57,422    53,893
      General and administrative    6,217       4,916     17,165    14,096
      Depreciation and
       amortization                15,320      14,941     45,593    48,870
        Total expenses             42,215      39,015    120,180   116,859
    Operating income               20,558      19,371     56,874    49,928
      Interest expense (b)          9,147      10,087     28,191    30,215
      Loss on settlement of US
       treasury rate locks            ---         ---      8,910       ---
    Income before equity in
     earnings of unconsolidated
     joint ventures, minority
     interest and discontinued
     operations                    11,411       9,284     19,773    19,713
    Equity in earnings of
     unconsolidated joint ventures    596         461      1,548     1,030
    Minority interests in operating
     partnership                   (1,729)     (1,370)    (2,794)   (2,716)
    Income from continuing
     operations                    10,278       8,375     18,527    18,027
    Discontinued operations, net
     of minority interest (c)         ---          22        ---        76
    Net income                     10,278       8,397     18,527    18,103
    Preferred share dividends      (1,406)     (1,406)    (4,219)   (4,219)
    Net income available to
     common shareholders           $8,872      $6,991    $14,308   $13,884

    Basic earnings per common
     share:
      Income from continuing
       operations                    $.29        $.23       $.46      $.45
      Net income                     $.29        $.23       $.46      $.45

    Diluted earnings per common
     share:
      Income from continuing
       operations                    $.28        $.22       $.45      $.44
      Net income                     $.28        $.22       $.45      $.44

    Funds from operations
     available to common
     shareholders (FFO)           $26,455     $23,929    $64,375   $67,386
    FFO per common share - diluted   $.70        $.64      $1.70     $1.80

    Summary of discontinued
     operations (c)
      Operating income from
       discontinued operations       $---         $26       $---       $91
      Gain on sale of real estate     ---         ---        ---       ---
      Income from discontinued
       operations                     ---          26        ---        91
      Minority interest in
       discontinued operations        ---          (4)       ---       (15)
    Discontinued operations, net
     of minority interest            $---         $22       $---       $76



(a) Includes straight-line rent and market rent adjustments of $957 and $1,033 for the three months ended and $2,924 and $3,192 for the nine months ended September 30, 2008 and 2007, respectively.

(b) Includes prepayment premium of $406 for the nine months ended September 30, 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 all periods presented.



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

                                                 September 30,  December 31,
                                                      2008         2007
    ASSETS:
    Rental property
      Land                                          $135,688       $130,075
      Buildings, improvements and fixtures         1,233,680      1,104,459
      Construction in progress                        16,377         52,603
                                                   1,385,745      1,287,137
      Accumulated depreciation                      (345,577)      (312,638)
      Rental property, net                         1,040,168        974,499
    Cash and cash equivalents                          3,753          2,412
    Investments in unconsolidated joint ventures      12,145         10,695
    Deferred charges, net                             39,854         44,804
    Other assets                                      28,811         27,870
        Total assets                              $1,124,731     $1,060,280

    LIABILITIES, MINORITY INTEREST AND
     SHAREHOLDERS' EQUITY:
    Liabilities
    Debt
      Senior, unsecured notes (net of discount
       of $701 and $759, respectively)              $398,799       $498,741
      Unsecured term loan                            235,000            ---
      Mortgages payable (including a debt
       premium of $0 and $1,046, respectively)           ---        173,724
      Unsecured lines of credit                      149,500         33,880
      Total debt                                     783,299        706,345
    Construction trade payables                       22,840         23,813
    Accounts payable and accrued expenses             46,573         47,185
        Total liabilities                            852,712        777,343

    Commitments
    Minority interest in operating partnership        31,678         33,733

    Shareholders' equity
    Preferred shares, 7.5% Class C, liquidation
     preference $25 per share, 8,000,000 shares
     authorized, 3,000,000 shares issued and
     outstanding at September 30, 2008 and
     December 31, 2007                                75,000         75,000
    Common shares, $.01 par value, 150,000,000
     shares authorized, 31,664,401 and 31,329,241
     shares issued and outstanding at September 30,
     2008 and December 31, 2007, respectively            317            313
    Paid in capital                                  357,698        351,817
    Distributions in excess of earnings             (192,601)      (171,625)
    Accumulated other comprehensive loss                 (73)        (6,301)
      Total shareholders' equity                     240,341        249,204
        Total liabilities, minority interest
         and shareholders' equity                 $1,124,731     $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    Nine months ended
                                       September 30,        September 30,
                                     2008       2007       2008      2007
    FUNDS FROM OPERATIONS (a)
      Net income                   $10,278     $8,397    $18,527   $18,103
        Adjusted for:
        Minority interest in
         operating partnership       1,729      1,370      2,794     2,716
        Minority interest,
         depreciation and
         amortization attributable
         to discontinued operations    ---         52        ---       160
        Depreciation and
         amortization uniquely
         significant to real
         estate - consolidated      15,219     14,865     45,335    48,641
        Depreciation and
         amortization uniquely
         significant to real
         estate - unconsolidated
         joint ventures                635        651      1,938     1,985
        Funds from operations
         (FFO)                      27,861     25,335     68,594    71,605
        Preferred share dividends   (1,406)    (1,406)    (4,219)   (4,219)
        Funds from operations
         available to common
         shareholders              $26,455    $23,929    $64,375   $67,386
        Funds from operations
         available to common
         shareholders per share
         - diluted                    $.70       $.64      $1.70     $1.80

    WEIGHTED AVERAGE SHARES
      Basic weighted average
       common shares                31,129     30,847     31,059    30,805
      Effect of exchangeable notes     487        235        487       235
      Effect of outstanding options    123        188        149       217
      Effect of unvested restricted
       share awards                    132        130        138       144
      Diluted weighted average
       common shares (for earnings
       per share computations)      31,871     31,400     31,833    31,401
      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)                37,938     37,467     37,900    37,468

    OTHER INFORMATION
    Gross leasable area open at
     end of period -
      Wholly owned                   8,823      8,363      8,823     8,363
      Partially owned -
       unconsolidated                  667        667        667       667
      Managed                          ---        229        ---       229

    Outlet centers in operation -
      Wholly owned                      30         30         30        30
      Partially owned - unconsolidated   2          2          2         2
      Managed                          ---          2        ---         2

    States operated in at end of
     period (c)                         21         21         21        21
    Occupancy at end of
     period (c) (d)                   96.7%      97.3%      96.7%     97.3%

(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 which are operated by us through 50% ownership joint ventures.

(d) Excludes our wholly-owned, non-stabilized center in Washington, Pennsylvania for the 2008 periods and excludes our wholly-owned, non- stabilized center in Charleston, South Carolina for the 2007 periods.

SOURCE Tanger Factory Outlet Centers, Inc.