FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from________ to________
Commission File Nos.:
33-99736-01
333-3526-01
333-39365-01
TANGER PROPERTIES LIMITED PARTNERSHIP
(Exact name of Registrant as specified in its Charter)
NORTH CAROLINA 56-1822494
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3200 Northline Avenue, Suite 360, Greensboro,North Carolina 27408
(Address of principal executive offices)
(Zip code)
(336) 292-3010
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
<PAGE>
TANGER PROPERTIES LIMITED PARTNERSHIP
Index
Part I. Financial Information
Page Number
Item 1. Financial Statements (Unaudited)
Statements of Operations
For the three and nine months ended September 30, 1999 and 1998 3
Balance Sheets
As of September 30, 1999 and December 31, 1998 4
Statements of Cash Flows
For the nine months ended September 30, 1999 and 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other Information
Item 1. Legal proceedings 18
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 18
2
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<TABLE>
TANGER PROPERTIES LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(In thousands, except per unit data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
REVENUES
<S> <C> <C> <C> <C>
Base rentals $17,151 $16,771 $51,314 $48,895
Percentage rentals 888 803 1,774 1,678
Expense reimbursements 7,107 6,957 20,316 20,442
Other income 1,759 536 2,803 1,208
- -------------------------------------------------------------------------------------------------------------------------
Total revenues 26,905 25,067 76,207 72,223
- -------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating 7,993 7,981 22,221 22,030
General and administrative 1,880 1,627 5,409 4,966
Interest 5,957 5,840 17,968 16,065
Depreciation and amortization 6,200 5,728 18,525 16,407
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 22,030 21,176 64,123 59,468
- -------------------------------------------------------------------------------------------------------------------------
Income before gain on disoposal or sale of real estate
and extraordinary item 4,875 3,891 12,084 12,755
Gain on disposal or sale of real estate 1,313 --- 1,313 994
- -------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 6,188 3,891 13,397 13,749
Extraordinary item - Loss on early estinguishment of debt --- --- (345) (460)
- -------------------------------------------------------------------------------------------------------------------------
Net income 6,188 3,891 13,052 13,289
Less preferred unit distributions (481) (481) (1,441) (1,433)
- -------------------------------------------------------------------------------------------------------------------------
Income available to partners 5,707 3,410 11,611 11,856
Income allocated to the limited partner (1,591) (946) (3,234) (3,296)
- -------------------------------------------------------------------------------------------------------------------------
Income available to the general partner $4,116 $2,464 $8,377 $8,560
=========================================================================================================================
Basic earnings per unit:
Income before extraordinary item $.52 $.31 $1.10 $1.13
Extraordinary item --- --- (.03) (.04)
- -------------------------------------------------------------------------------------------------------------------------
Net income $.52 $.31 $1.07 $1.09
=========================================================================================================================
Diluted earnings unit:
Income before extraordinary item $.52 $.31 $1.10 $1.11
Extraordinary item --- --- (.03) (.05)
- -------------------------------------------------------------------------------------------------------------------------
Net income $.52 $.31 $1.07 $1.06
=========================================================================================================================
Dividends paid per unit $.61 $.60 $1.81 $1.75
=========================================================================================================================
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TANGER PROPERTIES LIMITED PARTNERSHIP
BALANCE SHEETS
(In thousands)
September 30, December 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
Rental property
Land $53,632 $53,869
Buildings, improvements and fixtures 473,207 458,546
Developments under construction 16,655 16,832
- --------------------------------------------------------------------------------------------------------------------------------
543,494 529,247
Accumulated depreciation (98,745) (84,685)
- --------------------------------------------------------------------------------------------------------------------------------
Rental property, net 444,749 444,562
Cash and cash equivalents 198 6,334
Deferred charges, net 8,733 8,218
Other assets 13,831 12,454
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $467,511 $471,568
================================================================================================================================
LIABILITIES AND PARTNERS' EQUITY
Liabilites
Long-term debt
Senior, unsecured notes $150,000 $150,000
Mortgages payable 91,098 72,790
Lines of credit 65,493 79,695
- --------------------------------------------------------------------------------------------------------------------------------
306,591 302,485
Construction trade payables 6,692 9,224
Accounts payable and accrued expenses 13,923 10,496
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities 327,206 322,205
- --------------------------------------------------------------------------------------------------------------------------------
Commitments
Partners' equity
General partner 121,944 128,746
Limited partner 18,361 20,617
- --------------------------------------------------------------------------------------------------------------------------------
Total partners' equity 140,305 149,363
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities and partners' equity $467,511 $471,568
================================================================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
TANGER PROPERTIES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
1999 1998
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
OPERATING ACTIVITIES
Net income $13,052 $13,289
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 18,525 16,407
Amortization of deferred financing costs 758 810
Loss on early extinguishment of debt 345 460
Gain on disposal or sale of real estate (1,313) (994)
Gain on sale of outparcels of land (687)
Straight-line base rent adjustment (211) (573)
Compensation under Unit Option Plan --- 177
Increase (decrease) due to changes in:
Other assets (95) 931
Accounts payable and accrued expenses 3,427 (605)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activites 33,801 29,902
- --------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of rental properties --- (44,650)
Additions to rental properties (26,613) (26,267)
Additions to deferred lease costs (1,709) (1,891)
Net proceeds from sale of real estate 1,987 2,561
Advances to officer (2,436) ---
Insurance proceeds from casualty losses 7,853 ---
- --------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (20,918) (70,247)
- --------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Repurchase of partnership units (958) ---
Cash distributions paid (21,164) (20,502)
Proceeds from mortgages payable 66,500 ---
Repayments on mortgages payable (48,192) (934)
Proceeds from revolving lines of credit 74,448 112,945
Repayments on revolving lines of credit (88,650) (52,615)
Additions to deferred financing costs (1,015) (264)
Proceeds from exercise of unit options 12 762
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (19,019) 39,392
- --------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (6,136) (953)
Cash and cash equivalents, beginning of period 6,334 3,607
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $198 $2,654
==========================================================================================================================
Supplemental schedule of non-cash investing activities:
The Operating Partnership purchases capital equipment and incurs costs relating to construction of new facilities,
including tenant finishing allowances. Expenditures included in construction trade payables as of September 30, 1999
and 1998 amounted to $6,692 and $8,649, respectively.
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
1. Interim Financial Statements
The unaudited Financial Statements of Tanger Properties Limited
Partnership, a North Carolina limited partnership (the "Operating
Partnership"), have been prepared pursuant to generally accepted accounting
principles and should be read in conjunction with the Financial Statements
and Notes thereto of the Operating Partnership's Annual Report on Form 10-K
for the year ended December 31, 1998. Certain information and note
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange Commission's
("SEC") rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.
The accompanying Financial Statements reflect, in the opinion of
management, all adjustments necessary for a fair presentation of the
interim financial statements. All such adjustments are of a normal and
recurring nature.
2. Rental Properties
During the first nine months of 1999, the Operating Partnership opened
expansions in four of its centers totaling 139,000 square feet.
Additionally, approximately 154,000 square feet of expansions in four of
the Operating Partnership's centers are currently under construction and
are scheduled to begin opening by the end of 1999.
On September 14, 1999, the Operating Partnership announced that it had
signed definitive agreements to acquire a total of 27 acres of land from
Bass Pro Outdoor World, L.P., known as "Sportsman's Park", located on I-95
near Fort Lauderdale, Florida. The Operating Partnership expects to
complete the purchase of the initial 15 acre parcel of the development
project, which includes an existing 165,000 square foot Bass Pro Shops
Outdoor World store, by the end of the year. Bass Pro Outdoor World, L.P.
will in turn enter into a long term lease with the Operating Partnership
for the existing store.
On May 3, 1999, a tornado destroyed the Operating Partnership's outlet
center in Stroud, Oklahoma, rendering the center non-operational. The
Operating Partnership has filed claims with its insurance carrier for both
replacement cost and business interruption losses applicable to this
property and is currently in the process of negotiating a final settlement.
The Operating Partnership has received $7.9 million in insurance proceeds
for the replacement of the property as of September 30, 1999. As a result,
the Operating Partnership removed the costs and related accumulated
depreciation and amortization of the portion of the Stroud assets destroyed
by the tornado during the third quarter, recognizing a gain on disposal of
$1.3 million. Business interruption insurance is being recognized on a
straight-line basis over the expected period of business interruption.
Proceeds totaling $523,000 have been recognized as Other Income for the
second and third quarters.
Commitments to complete construction of the expansions to the existing
centers and other capital expenditure requirements amounted to
approximately $5.4 million at September 30, 1999. Commitments for
construction represent only those costs contractually required to be paid
by the Operating Partnership.
Interest costs capitalized during the three months ended September 30, 1999
and 1998 amounted to $293,000 and $113,000, respectively, and during the
nine months ended September 30, 1999 and 1998 amounted to $903,000 and
$512,000, respectively.
6
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3. Other Assets
Other assets include notes receivable totaling $2.4 million from Stanley K.
Tanger, Chairman of the Board and Chief Executive Officer of the Operating
Partnership's general partner. Mr. Tanger and the Operating Partnership
have entered into demand note agreements whereby he may borrow up to $3
million through various advances from the Operating Partnership for an
investment in a separate E-commerce outlet retail business venture. The
notes bear interest at a rate of 8% per annum and are secured by Mr.
Tanger's limited partnership interest in Tanger Investments Limited
Partnership. Mr. Tanger intends to fully repay the loan.
For the three and nine months ended September 30, 1999, Other Income
includes $687,000 in gains on sales of outparcels of land.
4. Long-Term Debt
On March 18, 1999, the Operating Partnership obtained a $66.5 million
non-recourse loan due April 1, 2009 with John Hancock Mutual Life Insurance
at a fixed interest rate of 7.875%. The new loan refinanced a prior loan,
also with John Hancock, which had a balance of approximately $47.3 million,
an interest rate of 8.92% and a scheduled maturity of January 1, 2002. The
additional proceeds were used to reduce amounts outstanding under the
revolving lines of credit. The unamortized deferred financing costs
associated with the prior loan were expensed during the first quarter and
are reflected as an extraordinary item, net of minority interest, in the
accompanying statements of operations.
The Operating Partnership has revolving unsecured lines of credit with a
borrowing capacity of $100 million, of which $34.5 million was available
for additional borrowings at September 30, 1999. During the first nine
months of 1999, the Operating Partnership extended the maturities of all of
its lines of credit by one year. The lines of credit now have maturity
dates in the years 2001 and 2002.
In June 1999, the Operating Partnership terminated its interest rate swap
agreement with a notional amount of $20 million and, based on its fair
value at that time, received cash proceeds of $146,000. The agreement was
scheduled to expire in October 2001. The proceeds have been recorded as
deferred income and are being amortized as a reduction to interest expense
over the remaining life of the original contract term.
At September 30, 1999 and December 31, 1998, the ownership interests of the
Operating Partnership consisted of the following:
<TABLE>
<CAPTION>
September 30, Decemer 31,
1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred units, held by the general partner 88,220 88,270
===========================================================================================================================
Partnership units:
General partner 7,850,256 7,897,606
Limited partner 3,033,305 3,033,305
- ---------------------------------------------------------------------------------------------------------------------------
Total 10,883,561 10,930,911
===========================================================================================================================
</TABLE>
5. Partners' Equity
In 1998, the Board of Directors of the general partner authorized the
repurchase of up to $6 million of its outstanding common shares. Proceeds
required to repurchase these common shares are funded by the Operating
Partnership in exchange for an equivalent number of partnership units in
the Operating Partnership held by the general partner. During the nine
months ended September 30, 1999, the general partner repurchased and
retired an additional 48,300 shares at an average price $19.83 per share
for approximately $958,000, leaving a balance of $4.8 million authorized
for future repurchases.
7
<PAGE>
6. Earnings Per Unit
The following table sets forth a reconciliation of the numerators and
denominators in computing earnings per unit in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share (in thousands,
except per unit amounts):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
Numerator:
<S> <C> <C> <C> <C>
Income before extraordinary item $6,188 $3,891 $13,397 $13,749
Less preferred unit distributions (481) (481) (1,441) (1,433)
- --------------------------------------------------------------------------------------------------------------------------
Income available to the general and limited partners-
numerator for basic and diluted earnings per unit 5,707 3,410 11,956 12,316
- --------------------------------------------------------------------------------------------------------------------------
Denominator:
Basic weighted average partnership units 10,883 10,934 10,895 10,914
Effect of outstanding unit options 68 116 21 160
- --------------------------------------------------------------------------------------------------------------------------
Diluted weighted average partnership units 10,951 11,050 10,916 11,074
- --------------------------------------------------------------------------------------------------------------------------
Basic earnings per unit before extraordinary item $.52 $.31 $1.10 $1.13
==========================================================================================================================
Diluted earnings per unit before extaordinary item $.52 $.31 $1.10 $1.11
==========================================================================================================================
</TABLE>
Options to purchase units which were excluded from the computation of
diluted earnings per unit because the exercise price was greater than the
average market price of the units, which is assumed to be equivalent to the
price of the common shares of the general partner, totaled 341,000 and
248,000 for the three months ended September 30, 1999 and 1998,
respectively, and 652,000 and 246,000 for the nine months ended September
30, 1999 and 1998, respectively. The assumed conversion of preferred units
to general partnership units as of the beginning of the year would have been
anti-dilutive.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion should be read in conjunction with the financial
statements appearing elsewhere in this report. Historical results and percentage
relationships set forth in the statements of operations, including trends which
might appear, are not necessarily indicative of future operations.
The discussion of the Operating Partnership's results of operations reported in
the statements of operations compares the three and nine months ended September
30, 1999 with the three and nine months ended September 30, 1998. Certain
comparisons between the periods are made on a percentage basis as well as on a
weighted average gross leasable area ("GLA") basis, a technique which adjusts
for certain increases or decreases in the number of centers and corresponding
square feet related to the development, acquisition, expansion or disposition of
rental properties. The computation of weighted average GLA, however, does not
adjust for fluctuations in occupancy which may occur subsequent to the original
opening date.
Cautionary Statements
Certain statements made below are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Operating Partnership intends
such forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995 and included this statement for purposes of complying with these safe
harbor provisions. Forward-looking statements, which are based on certain
assumptions and describe our future plans, strategies and expectations, are
generally identifiable by use of the words "believe", "expect", "intend",
"anticipate", "estimate", "project", or similar expressions. You should not rely
on forward-looking statements since they involve known and unknown risks,
8
<PAGE>
uncertainties and other factors which are, in some cases, beyond our control and
which could materially affect our actual results, performance or achievements.
Factors which may cause actual results to differ materially from current
expectations include, but are not limited to, the following:
- - general economic and local real estate conditions could change (for
example, our tenants' business may change if the economy changes, which
might effect (1) the amount of rent they pay us, (2) their ability to pay
rent to us, (3) their demand for new space, or (4) our ability to renew or
re-lease a significant amount of available space on favorable terms);
- - the laws and regulations that apply to us could change (for instance, a
change in the tax laws that apply to REITs could result in unfavorable tax
treatment for us);
- - capital availability (for instance, financing opportunities may not be
available to us, or may not be available to us on favorable terms);
- - our operating costs may increase or our costs to construct or acquire new
properties or expand our existing properties may increase or exceed our
original expectations.
General Overview
At September 30, 1999, the Operating Partnership owned 30 centers in 22 states
totaling 4,946,000 square feet of GLA compared to 31 centers in 23 states
totaling 4,954,000 square feet of GLA at September 30, 1998. GLA has decreased a
net amount of 8,000 square feet since September 30, 1998, comprised of an
increase of 190,000 square feet due to expansions in four of the Operating
Partnership's centers and a decrease of 198,000 square feet due to the tornado
destruction of the center in Stroud, Oklahoma.
During the first nine months of 1999, the Operating Partnership opened
expansions in four of its centers totaling 139,000 square feet. Additionally,
approximately 154,000 square feet of expansions in four of the Operating
Partnership's centers are currently under construction and are scheduled to
begin opening by the end of 1999.
On May 3, 1999, a tornado destroyed the Operating Partnership's outlet center in
Stroud, Oklahoma, rendering the center non-operational. The Operating
Partnership has filed claims with its insurance carrier for both replacement
cost and business interruption losses applicable to this property and is
currently in the process of negotiating a settlement. The Operating Partnership
has received $7.9 million in insurance proceeds for the replacement of the
property as of September 30, 1999. As a result, the Operating Partnership
removed the costs and related accumulated depreciation and amortization of the
portion of the Stroud assets destroyed by the tornado during the third quarter,
recognizing a gain on disposal of $1.3 million. Business interruption insurance
is being recognized on a straight-line basis over the expected period of
business interruption. Proceeds totaling $523,000 have been recognized as Other
Income for the second and third quarters.
A summary of the operating results for the three and nine months ended September
30, 1999 and 1998 is presented in the following table, expressed in amounts
calculated on a weighted average GLA basis.
9
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GLA open at end of period (000's) 4,946 4,954 4,946 4,954
Weighted average GLA (000's) (1) 4,939 4,869 4,976 4,700
Outlet centers in operation 30 31 30 31
New centers acquired --- 1 --- 2
Centers disposed of or sold 1 --- 1 1
Centers expanded 2 1 4 1
States operated in at end of period 22 23 22 23
Occupancy percentage at end of period 95 95 95 95
Per square foot
Revenues
Base rentals $3.47 $3.44 $10.31 $10.40
Percentage rentals .18 .16 .36 .36
Expense reimbursements 1.44 1.43 4.08 4.35
Other income .36 .11 .56 .26
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues 5.45 5.14 15.31 15.37
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating 1.62 1.64 4.47 4.69
General and administrative .38 .33 1.09 1.06
Interest 1.21 1.20 3.61 3.42
Depreciation and amortization 1.26 1.18 3.72 3.49
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses 4.47 4.35 12.89 12.66
- ----------------------------------------------------------------------------------------------------------------------------------
Income before gain on disposal or sale of real estate
and extraordinary item $.98 $.79 $2.42 $2.71
==================================================================================================================================
(1) GLA weighted by months of operations. GLA is not adjusted for fluctuations in occupancy which may occur subsequent to the
original opening date.
</TABLE>
RESULTS OF OPERATIONS
Comparison of the three months ended September 30, 1999 to the three months
ended September 30, 1998
Base rentals increased $380,000, or 2%, in the 1999 period when compared to the
same period in 1998. The increase is primarily due to the effect of a full three
months of rent in 1999 from a center acquired on July 31, 1998 and due to the
expansions as mentioned in the Overview above, offset by the loss of rent from
the destruction of the outlet center in Stroud, Oklahoma by a tornado on May 3,
1999. Base rent per weighted average GLA increased $.03 per foot in the three
months ended September 30, 1999 compared to the same period in 1998 due to the
loss of the Stroud center which had a lower average base rent per square foot
compared to the portfolio average.
Percentage rentals, which represent revenues based on a percentage of tenants'
sales volume above predetermined levels (the "breakpoint"), increased $85,000,
and on a weighted average GLA basis, increased $.02 per square foot in the 1999
period compared to the same period in 1998. The increase reflects higher sales
for certain tenants who normally achieve sales over their breakpoints in the
third quarter.
Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses generally fluctuates consistently with the
reimbursable property operating expenses to which it relates. Expense
reimbursements, expressed as a percentage of property operating expenses,
increased from 87% in the 1998 three month period to 89% in the 1999 three month
period primarily as a result of lower property operating expenses per square
foot in the 1999 period compared to the 1998 period.
10
<PAGE>
Other income has increased $1.2 million in the 1999 period as compared to the
1998 period. The increase is primarily due to gains on sale of out parcels of
land totaling $687,000 during the 1999 three month period as well as to the
recognition of $523,000 of business interruption insurance proceeds relating to
the Stroud, Oklahoma center.
Property operating expenses decreased by $12,000 in the 1999 period as compared
to the 1998 period reflecting increases due to expansions of existing properties
offset by the loss of the Stroud, Oklahoma center. On a weighted average GLA
basis, property operating expenses decreased $.02 per square foot from $1.64 to
$1.62. Higher real estate taxes per square foot were offset by considerable
decreases in advertising and promotion and common area maintenance expenses per
square foot.
General and administrative expenses increased $253,000, or 16%, in the 1999
quarter as compared to the 1998 quarter. As a percentage of revenues, general
and administrative expenses increased to 7% of revenues in the 1999 quarter
compared to 6.5% in the 1998 quarter. On a weighted average GLA basis, general
and administrative expenses increased $.05 per square foot from $.33 in 1998 to
$.38 in 1999. The increase in general and administrative expenses is primarily
due to rental and related expenses for the new corporate office space to which
the Operating Partnership relocated its corporate headquarters in April 1999.
Interest expense increased $117,000 during the 1999 period as compared to the
1998 period due to financing the July 1998 acquisition and the 1999 expansions.
However, interest expense was favorably impacted by the reduction in the
Operating Partnership's lines of credit with the insurance proceeds received
from the loss of the Stroud center. Depreciation and amortization per weighted
average GLA increased from $1.18 per square foot in the 1998 period to $1.26 per
square foot in the 1999 period due to a higher mix of tenant finishing
allowances included in buildings and improvements which are depreciated over
shorter lives (i.e., over lives generally ranging from 3 to 10 years as opposed
to other construction costs which are depreciated over lives ranging from 15 to
33 years.).
The gain on disposal of real estate during the three months ended September 30,
1999 represents the amount of insurance proceeds received to date from the loss
of the Stroud, Oklahoma center in excess of the carrying amount of the related
assets which were destroyed by a tornado on May 3, 1999.
Comparison of the nine months ended September 30, 1999 to the nine months ended
September 30, 1998
Base rentals increased $2.4 million, or 5%, in the 1999 period when compared to
the same period in 1998. The increase is primarily due to the effect of a full
nine months of rent in 1999 from centers acquired on March 31, 1998 and July 31,
1998 as well as the expansions mentioned in the Overview above, offset by the
loss of rent from the destruction of the outlet center in Stroud, Oklahoma by a
tornado on May 3, 1999. Base rent per weighted average GLA decreased $.09 per
foot due to the portfolio of properties having a lower overall average occupancy
rate in the first nine months of 1999 compared to the same period in 1998. Base
rent per square foot, however, was favorably impacted in the first nine months
of 1999 due to the loss of Stroud which had a lower average base rent per square
foot than the portfolio average.
Percentage rentals, which represent revenues based on a percentage of tenants'
sales volume above predetermined levels (the "breakpoint"), increased by
$96,000, and on a weighted average GLA basis, remained flat with the prior year
at $.36 per square foot. For the nine months ended September 30, 1999, reported
same-store sales, defined as the weighted average sales per square foot reported
by tenants for stores open since January 1, 1998, were down less than 1% with
that of the previous year, while same space sales for the rolling 12 months
ended September 30, 1999 have actually increased 6% to $263 per square foot due
to the Operating Partnership's efforts to re-merchandise selected centers by
replacing low volume tenants with high volume tenants.
Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses generally fluctuates consistently with the
reimbursable property operating expenses to which it relates. Expense
11
<PAGE>
reimbursements, expressed as a percentage of property operating expenses,
decreased from 93% in the 1998 nine month period to 91% in the 1999 nine month
period primarily as a result of a lower average occupancy rate in the 1999
period compared to the 1998 period.
Other income has increased $1.6 million in the 1999 period as compared to the
1998 period. The increase is primarily due to gains on sale of out parcels of
land totaling $687,000 during the 1999 nine month period as well as to the
recognition of $523,000 of business interruption insurance proceeds relating to
the Stroud, Oklahoma center.
Property operating expenses increased by $191,000, or 1%, in the 1999 period as
compared to the 1998. However, on a weighted average GLA basis, property
operating expenses decreased $.22 per square foot from $4.69 to $4.47. Higher
real estate taxes per square foot were offset by considerable decreases in
advertising and promotion and common area maintenance expenses per square foot.
General and administrative expenses increased $443,000, or 9%, in the 1999 nine
month period as compared to the 1998 period. As a percentage of revenues,
general and administrative expenses were approximately 7% of revenues in both
the 1999 and 1998 periods and, on a weighted average GLA basis, increased
$.03per square foot from $1.06 in 1998 to $1.09 in 1999. The increase in general
and administrative expenses per square foot reflects the rental and related
expenses for the new corporate office space to which the Operating Partnership
relocated its corporate headquarters in April 1999.
Interest expense increased $1.9 million during the 1999 period as compared to
the 1998 period due to financing the 1998 acquisitions and the 1998 and 1999
expansions. However, interest expense was favorably impacted by the insurance
proceeds received from the loss of the Stroud center which were used to
immediately reduce outstanding amounts under the Operating Partnership's lines
of credit. Depreciation and amortization per weighted average GLA increased from
$3.49 per square foot in the 1998 period to $3.72 per square foot in the 1999
period due to a higher mix of tenant finishing allowances included in buildings
and improvements which are depreciated over shorter lives (i.e., over lives
generally ranging from 3 to 10 years as opposed to other construction costs
which are depreciated over lives ranging from 15 to 33 years.)
The gain on disposal of real estate during the nine months ended September 30,
1999 represents the amount of insurance proceeds received to date from the loss
of the Stroud, Oklahoma center in excess of the carrying amount of the related
assets which were destroyed by a tornado on May 3, 1999. The gain on sale of
real estate for the nine months ended September 30, 1998 is due primarily to the
sale of an 8,000 square foot, single tenant property in Manchester, VT.
The extraordinary losses recognized in each nine month period represent the
write-off of unamortized deferred financing costs related to debt that was
extinguished during each period prior to its scheduled maturity.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $33.8 million and $29.9 million
for the nine months ended September 30, 1999 and 1998, respectively. The
increase in cash provided by operating activities is due to increases in
operating income from the 1998 acquisitions and 1999 expansions and in accounts
payable during 1999 when compared to the same period in 1998. Net cash used in
investing activities was $20.9 million and $70.2 million during the first nine
months of 1999 and 1998, respectively. Cash used was higher in 1998 primarily
due to the acquisitions of factory outlet centers in Dalton, Georgia and in Ft.
Myers, Florida in 1998. Cash used in investing activities also decreased due to
the $7.9 million in insurance proceeds from the loss of the Stroud, Oklahoma
center. Likewise, net cash provided by (used in) financing activities amounted
to $(19.0) million and $39.4 million during the first nine months of 1999 and
1998, respectively, decreasing consistently with the capital needs of the
current acquisition and expansion activity. Also attributing to the decrease in
cash from financing activities in the first nine months of 1999 compared to the
same period in 1998 was an increase in distributions paid of $662,000 and
amounts funded to the general partner for the repurchase and retirement of some
of its common shares totaling $958,000 in 1999.
12
<PAGE>
During the first nine months of 1999, the Company opened expansions in four of
its centers totaling 139,000 square feet. Additionally, approximately 154,000
square feet of expansions in four of the Company's centers are currently under
construction and are scheduled to begin opening by the end of 1999. Commitments
to complete construction of the expansions to the existing centers and other
capital expenditure requirements amounted to approximately $5.4 million at
September 30, 1999. Commitments for construction represent only those costs
contractually required to be paid by the Company.
On September 14, 1999, the Company announced that it had signed definitive
agreements to acquire a total of 27 acres of land from Bass Pro Outdoor World,
L.P., known as "Sportsman's Park", located on I-95 near Fort Lauderdale,
Florida. The Company expects to complete the purchase of the initial 15 acre
parcel of the development project which includes an existing 165,000 square foot
Bass Pro Shops Outdoor World store, by the end of the year. Bass Pro Outdoor
World, L.P. will in turn enter into a long term lease with the Company for the
existing store. The Company is in the preleasing stages to develop the remaining
12 acre parcel of land with outlet tenants which would bring the total shopping
center to approximately 300,000 square feet upon completion.
The Company also is in the process of developing plans for additional expansions
and new centers for completion in 2000 and beyond. Currently, the Company is in
the preleasing stages for a future center in Bourne, Massachusetts and for
further expansions of existing Centers. However, these anticipated or planned
developments or expansions may not be started or completed as scheduled, or may
not result in accretive funds from operations. In addition, the Company
regularly evaluates acquisition or disposition proposals, engages from time to
time in negotiations for acquisitions or dispositions and may from time to time
enter into letters of intent for the purchase or sale of properties. Any
prospective acquisition or disposition that is being evaluated or which is
subject to a letter of intent also may not be consummated, or if consummated,
may not result in accretive funds from operations.
Other assets include a receivable totaling $2.4 million from Stanley K. Tanger,
the Chairman of the Board and Chief Executive Officer of the general partner.
During the first nine months, Mr. Tanger and the Operating Partnership entered
into demand note agreements whereby he may borrow up to $3 million through
various advances from the Operating Partnership for an investment in a separate
E-commerce outlet retail business venture. The notes bear interest at a rate of
8% per annum and are secured by Mr. Tanger's limited partnership interest in
Tanger Investments Limited Partnership. Mr. Tanger intends to fully repay the
loans.
The Operating Partnership maintains revolving lines of credit which provide for
unsecured borrowings up to $100 million, of which $34.5 million was available
for additional borrowings at September 30, 1999. As a general matter, the
Operating Partnership anticipates utilizing its lines of credit as an interim
source of funds to acquire, develop and expand factory outlet centers and to
repay the credit lines with longer-term debt or equity when management
determines that market conditions are favorable. Under joint shelf registration,
the Operating Partnership together with its general partner could issue up to
$100 million in additional equity securities and $100 million in additional debt
securities. With the decline in the real estate debt and equity markets, the
Operating Partnership may not, in the short term, be able to access these
markets on favorable terms. Management believes the decline is temporary and may
utilize these funds as the markets improve to fund its continued growth. In the
interim, the Operating Partnership may consider the use of operational and
developmental joint ventures and other related strategies to generate additional
capital. Based on cash provided by operations, existing credit facilities,
ongoing negotiations with certain financial institutions and funds available
under the shelf registration, management believes that the Operating Partnership
has access to the necessary financing to fund the planned capital expenditures
during 1999.
On March 18, 1999, the Operating Partnership refinanced its 8.92% notes which
had a carrying amount of $47.3 million. The refinancing reduced the interest
rate to 7.875%, increased the loan amount to $66.5 million and extended the
maturity date to April 2009. The additional proceeds were used to reduce amounts
outstanding under the revolving lines of credit. As a result of this
refinancing, management expects to realize a savings in interest cost of
approximately $300,000 over the next twelve months. In addition, the Operating
13
<PAGE>
Partnership has extended the maturities of all of its revolving lines of credit
by one year. The lines of credit now have maturity dates in the years 2001 and
2002.
At September 30, 1999, approximately 70% of the outstanding long-term debt
represented unsecured borrowings and approximately 79% of the Operating
Partnership's real estate portfolio was unencumbered. The weighted average
interest rate on debt outstanding on September 30, 1999 was 8.0%.
The Operating Partnership anticipates that adequate cash will be available to
fund its operating and administrative expenses, regular debt service
obligations, and the payment of distributions in accordance with REIT
requirements in both the short and long term. Although the Operating Partnership
receives most of its rental payments on a monthly basis, distributions to
unitholders are made quarterly and interest payments on the senior, unsecured
notes are made semi-annually. Amounts accumulated for such payments will be used
in the interim to reduce the outstanding borrowings under the existing lines of
credit or invested in short-term money market or other suitable instruments.
Certain of the Operating Partnership's debt agreements limit the payment of
distributions such that distributions will not exceed funds from operations
("FFO"), as defined in the agreements, for the prior fiscal year on an annual
basis or 95% of FFO on a cumulative basis from the date of the agreement.
On October 7, 1999, the Board of Directors of the general partner declared a
$.605 cash distribution per partnership unit payable on November 15, 1999 to
each unitholder of record on October 29. The Board of Directors of the general
partner also declared a cash distribution of $.5451 per preferred partnership
unit payable on November 15, 1999 to each preferred unitholder of record on
October 29, 1999.
Market Risk
The Operating Partnership is exposed to various market risks, including changes
in interest rates. Market risk is the potential loss arising from adverse
changes in market rates and prices, such as interest rates. The Operating
Partnership does not enter into derivatives or other financial instruments for
trading or speculative purposes.
The Operating Partnership enters into interest rate swap agreements to manage
its exposure to interest rate changes. The swaps involve the exchange of fixed
and variable interest rate payments based on a contractual principal amount and
time period. Payments or receipts on the agreements are recorded as adjustments
to interest expense. In June 1999, the Operating Partnership terminated its only
interest rate swap agreement effective through October 2001 with a notional
amount of $20 million. Under this agreement, the Operating Partnership received
a floating interest rate based on the 30 day LIBOR index and paid a fixed
interest rate of 5.47%. Upon termination of the agreement, the Operating
Partnership received $146,000 in cash proceeds. The proceeds have been recorded
as deferred income and are being amortized as a reduction to interest expense
over the remaining life of the original contract term.
The fair market value of long-term fixed interest rate debt is subject to market
risk. Generally, the fair market value of fixed interest rate debt will increase
as interest rates fall and decrease as interest rates rise. The estimated fair
value of the Operating Partnership's total long-term debt at September 30, 1999
was $301.5 million. A 1% increase from prevailing interest rates at September
30, 1999 would result in a decrease in fair value of total long-term debt by
approximately $5.2 million. Fair values were determined from quoted market
prices, where available, using current interest rates considering credit ratings
and the remaining terms to maturity.
New Accounting Pronouncements
On June 15, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). SFAS 133, as amended by SFAS 137, is
effective for the first quarter of fiscal 2001. SFAS 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, the type of hedge
transaction. Management of the Operating Partnership anticipates that, due to
14
<PAGE>
its limited use of derivative instruments, the adoption of SFAS 133 will not
have a significant effect on the Operating Partnership's results of operations
or its financial position.
Funds from Operations
Management believes that for a clear understanding of the historical operating
results of the Operating Partnership, FFO should be considered along with net
income as presented in the unaudited financial statements included 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 real estate investment trust ("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 of real estate, plus depreciation
and amortization uniquely significant to real estate. The Operating Partnership
cautions that the calculation of FFO may vary from entity to entity and as such
the presentation of FFO by the Operating Partnership 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 generally
accepted accounting principles and should not be considered an alternative to
net income as an indication of operating performance or to cash from operations
as a measure of liquidity. FFO is not necessarily indicative of cash flows
available to fund distributions to unitholders and other cash needs.
Below is a calculation of funds from operations for the three and nine months
ended September 30, 1999 and 1998 as well as actual cash flow and other data for
those respective periods (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
Funds from Operations:
<S> <C> <C> <C> <C>
Net income $6,188 $3,891 $13,052 $13,289
Adjusted for:
Extraordinary item - loss on early extinguishment of debt --- --- 345 460
Depreciation and amortization uniquely significant to real estate 6,149 5,661 18,363 16,250
Gain on disposal or sale of real estate (1,313) --- (1,313) (994)
- -----------------------------------------------------------------------------------------------------------------------------
Funds from operations (1) $11,024 $9,552 $30,447 $29,005
=============================================================================================================================
Weighted average units outstanding (2) 11,746 11,852 11,711 11,882
=============================================================================================================================
Cash flows provided by (used in):
Operating activities $33,801 $29,902
Investing activities (20,918) (70,247)
Financing activities (19,019) 39,392
__________________
(1) For the three and nine months ended September 30, 1999, includes $687 in gains on sales of outparcels of land.
(2) Assumes the preferred partnership units and unit options are converted to general partnership units
</TABLE>
Economic Conditions and Outlook
The majority of the Operating Partnership's leases contain provisions designed
to mitigate the impact of inflation. Such provisions include clauses for the
escalation of base rent and clauses enabling the Operating Partnership to
receive percentage rentals based on tenants' gross sales (above predetermined
levels, which the Operating Partnership believes often are lower than
traditional retail industry standards) which generally increase as prices rise.
Most of the leases require the tenant to pay their share of property operating
expenses, including common area maintenance, real estate taxes, insurance and
advertising and promotion, thereby reducing exposure to increases in costs and
operating expenses resulting from inflation.
While factory outlet stores continue to be a profitable and fundamental
distribution channel for brand name manufacturers, some retail formats are more
15
<PAGE>
successful than others. As typical in the retail industry, certain tenants have
closed, or will close, certain stores by terminating their lease prior to its
natural expiration or as a result of filing for protection under bankruptcy
laws.
As part of its strategy of aggressively managing its assets, the Operating
Partnership is strengthening the tenant base in several of its centers by adding
strong new anchor tenants, such as Nike, GAP and Nautica. To accomplish this
strategy, stores may remain vacant for a longer period of time in order to
recapture enough space to meet the size requirement of these upscale, high
volume tenants. Consequently, the Operating Partnership anticipates that its
average occupancy level will remain strong, but may be more in line with the
industry average.
As of September 30, 1999, the Operating Partnership has renewed approximately
588,000 square feet, or 79% of the square feet scheduled to expire in 1999.
Approximately 633,000 square feet will come up for renewal in 2000. If the
Operating Partnership were unable to successfully renew or release a significant
amount of this space on favorable economic terms, the loss in rent could have a
material adverse effect on its results of operations. However, existing tenants'
sales have remained stable and renewals by existing tenants have remained
strong. In addition, the Operating Partnership continues to attract and retain
additional tenants. The Operating Partnership's factory outlet centers typically
include well known, national, brand name companies. By maintaining a broad base
of creditworthy tenants and a geographically diverse portfolio of properties
located across the United States, the Operating Partnership reduces its
operating and leasing risks. No one tenant (including affiliates) accounts for
more than 8% of the Operating Partnership's combined base and percentage rental
revenues. Accordingly, management currently does not expect any material adverse
impact on the Operating Partnership's results of operation and financial
condition as a result of leases to be renewed or stores to be released.
Year 2000 Compliance
The year 2000 ("Y2K") issue refers generally to computer applications using only
the last two digits to refer to a year rather than all four digits. As a result,
these applications could fail or create erroneous results if they recognize "00"
as the year 1900 rather than the year 2000. The Operating Partnership has taken
Y2K initiatives in three general areas which represent the areas that could have
an impact on the Operating Partnership - information technology systems,
non-information technology systems and third-party issues. The following is a
summary of these initiatives:
INFORMATION TECHNOLOGY SYSTEMS. The Operating Partnership has focused its
efforts on the high-risk areas of the computer hardware and operating systems
and software applications at the corporate office. The Operating Partnership's
assessment and testing of existing equipment and software revealed that certain
older desktop personal computers, the network operating system and the DOS-based
accounting system were not Y2K compliant The Operating Partnership has replaced
all critical non-compliant equipment and also has installed current upgrades for
the DOS-based accounting software and the network operating systems which has
made these systems compliant with Y2K.
NON-INFORMATION TECHNOLOGY SYSTEMS. Non-information technology consists mainly
of facilities management systems such as telephone, utility and security systems
for the corporate office and the outlet centers. The Operating Partnership has
reviewed the corporate facility management systems and made inquiry of the
building owner/manager and concluded that the corporate office building systems
including telephone, utilities, fire and security systems are Y2K compliant. The
Operating Partnership has also identified date sensitive systems and equipment
including HVAC units, telephones, security systems and alarms, fire warning
systems and general office systems at each of its outlet centers. The Operating
Partnership has replaced, or will have replaced by the end of 1999, all critical
non-compliant systems. Based on our current assessment, the cost of replacement
is not expected to be significant.
THIRD PARTIES. The Operating Partnership has third-party relationships with
approximately 260 tenants and over 8,000 suppliers and contractors. Many of
these third party tenants are publicly-traded corporations and subject to
disclosure requirements. The Operating Partnership has begun assessment of major
third parties' Y2K readiness including tenants, key suppliers of outsourced
services including stock transfer, debt servicing, banking collection and
disbursement, payroll and benefits, while simultaneously responding to their
16
<PAGE>
inquiries regarding the Operating Partnership's readiness. The majority of the
Operating Partnership's vendors are small suppliers that the Operating
Partnership believes can manually execute their business and are readily
replaceable. Management also believes there is no material risk of being unable
to procure necessary supplies and services from third parties who have not
already indicated that they are currently Y2K compliant. The Operating
Partnership is diligently working to substantially complete its third party
assessment. The Operating Partnership has received responses to approximately
73% of the surveys sent to tenants, banks and key suppliers and intends to
contact the remaining companies for a response. Of the companies who responded,
99% have indicated they are presently, or will be by December 31, 1999, Y2K
compliant. The Operating Partnership also intends to monitor Y2K disclosures in
SEC filings of publicly-owned third parties commencing with the current quarter
filings.
COSTS. The accounting software and network operating system upgrades were
executed under existing maintenance and support agreements with software
vendors, and thus the Operating Partnership did not incur incremental costs to
bring those systems in compliance. Approximately $220,000 has been spent to
upgrade or replace equipment or systems specifically to bring them in compliance
with Y2K. The total cost of Y2K compliance activities, expected to be less than
$400,000, has not been, and is not expected to be material to the operating
results or financial position of the Operating Partnership.
The identification and remediation of systems at the outlet centers is being
accomplished by in-house business systems personnel and outlet center general
managers whose costs are recorded as normal operating expenses. The assessment
of third-party readiness is also being conducted by in-house personnel whose
costs are recorded as normal operating expenses. The Operating Partnership is
not yet in a position to estimate the cost of third-party compliance issues, but
has no reason to believe, based upon its evaluations to date, that such costs
will exceed $100,000.
RISKS. The principal risks to the Operating Partnership relating to the
completion of its accounting software conversion is failure to correctly bill
tenants by December 31, 1999 and to pay invoices when due. Management believes
it has adequate resources, or could obtain the needed resources, to manually
bill tenants and pay bills until the systems became operational.
The principal risks to the Operating Partnership relating to non-information
systems at the outlet centers are failure to identify time-sensitive systems and
inability to find a suitable replacement system. The Operating Partnership
believes that adequate replacement components or new systems are available at
reasonable prices and are in good supply. The Operating Partnership also
believes that adequate time and resources are available to remediate these areas
as needed.
The principal risks to the Operating Partnership in its relationships with third
parties are the failure of third-party systems used to conduct business such as
tenants being unable to stock stores with merchandise, use cash registers and
pay invoices; banks being unable to process receipts and disbursements; vendors
being unable to supply needed materials and services to the centers; and
processing of outsourced employee payroll. Based on Y2K compliance work done to
date, the Operating Partnership has no reason to believe that key tenants, banks
and suppliers will not be Y2K compliant in all material respects or can not be
replaced within an acceptable time frame. The Operating Partnership will attempt
to obtain compliance certification from suppliers of key services as soon as
such certifications are available.
CONTINGENCY PLANS. Contingency plans generally involve the development and
testing of manual procedures or the use of alternate systems. Viable contingency
plans are difficult to develop for potential third party Y2K failures. The
Operating Partnership continues to explore and research alternate systems or
uses which may be necessary in the event that a critical third party is not Y2K
compliant by December 31, 1999 and will update its contingency plans as
additional information becomes available.
The Operating Partnership description of its Y2K compliance issues are based
upon information obtained by management through evaluations of internal business
systems and from tenant and vendor compliance efforts. No assurance can be given
that the Operating Partnership will be able to address the Y2K issues for all
its systems in a timely manner or that it will not encounter unexpected
difficulties or significant expenses relating to adequately addressing the Y2K
issue. If the Operating Partnership or the major tenants or vendors with whom
17
<PAGE>
the Operating Partnership does business fail to address their major Y2K issues,
the Operating Partnership's operating results or financial position could be
materially adversely affected. The most likely worst case scenario would be that
certain tenants would not be able to pay their rent and that certain accounting
functions would have to be processed manually.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Neither the Operating Partnership nor its general partner is presently involved
in any material litigation nor, to their knowledge, is any material litigation
threatened against the Operating Partnership or its general partner or its
properties, other than routine litigation arising in the ordinary course of
business and which is expected to be covered by the liability insurance.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Promissory Notes by and between Tanger Properties Limited
Partnership and John Hancock Mutual Life Insurance
aggregating $66,500,000 incorporated herein by reference to
the exhibits to Tanger Factory Outlet Centers, Inc.'s
Quarterly Report of Form 10-Q for the period ended March 31,
1999.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
TANGER PROPERTIES LIMITED PARTNERSHIP
By: Tanger Factory Outlet Centers, Inc, its general partner
By: /s/ FRANK C. MARCHISELLO, JR.
------------------------------
Frank C. Marchisello, Jr.
Senior Vice President, Chief Financial Officer
DATE: November 11, 1999
18
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
financial statements as of and for the nine months ended September 30, 1999
included herein and is qualified in its entirety by reference to such
statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Sep-30-1999
<CASH> 198
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 543,494
<DEPRECIATION> 98,745
<TOTAL-ASSETS> 467,511
<CURRENT-LIABILITIES> 0
<BONDS> 306,591
0
0
<COMMON> 0
<OTHER-SE> 140,305
<TOTAL-LIABILITY-AND-EQUITY> 467,511
<SALES> 0
<TOTAL-REVENUES> 76,207
<CGS> 0
<TOTAL-COSTS> 22,221
<OTHER-EXPENSES> 18,525 <F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,968
<INCOME-PRETAX> 13,397
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,397
<DISCONTINUED> 0
<EXTRAORDINARY> (345)
<CHANGES> 0
<NET-INCOME> 13,052
<EPS-BASIC> 1.07
<EPS-DILUTED> 1.07
<FN>
<F1> Depreciation and amortization
</FN>
</TABLE>
