Tanger Factory Outlet Centers (SKT) filed Quarterly Report for the period ended 2009-11-06.
Tanger Factory Outlet Centers Inc. is a fully-integrated self-administered and self-managed real estate investment trust which focuses exclusively on developing acquiring owning and operating factory outlet centers. Since entering the factory outlet center business they have become one of the largest owners and operators of factory outlet centers in the United States. Tanger Factory Outlet Centers has a market cap of $1.51 billion; its shares were traded at around $38.04 with and P/S ratio of 6.1. The dividend yield of Tanger Factory Outlet Centers stocks is 4%. Tanger Factory Outlet Centers had an annual average earning growth of 0.8% over the past 10 years.
Highlight of Business Operations:
Also, included in base rentals is the amortization from the value of the above and below market leases recorded as a result of our property acquisitions as either an increase (in the case of below market leases) or a decrease (in the case of above market leases) to rental income over the remaining term of the associated lease. The net amortization of above and below market leases for the 2009 period was an increase to base rentals of approximately $222,000. This represents an increase of approximately $87,000, or 64%, over the 2008 period amount of approximately $135,000. The increase is due to the addition of the net below market amortization from the acquired leases related to the January 2009 Myrtle Beach Hwy 17 acquisition mentioned above. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related above or below market lease value will be written off and could materially impact our net income positively or negatively. At September 30, 2009, the net liability representing the amount of unrecognized below market lease values totaled approximately $2.7 million.
Depreciation and amortization increased $4.9 million, or 32%, in the 2009 period compared to the 2008 period. During the first quarter of 2009, we obtained approval from Beaufort County, South Carolina to implement a redevelopment plan at the Hilton Head I, SC outlet center. Based on our current redevelopment timeline, we determined that the estimated remaining useful life of the existing outlet center is approximately three years. As a result of this change in useful lives, additional depreciation and amortization of approximately $2.0 million was recognized during the three months ended September 30, 2009. The accelerated depreciation and amortization reduced income from continuing operations and net income by approximately $.05 per share for the three months ended September 30, 2009. The majority of the remaining increase is due the addition of the Washington, PA and Myrtle Beach Hwy 17, SC centers to the wholly-owned portfolio, representing $2.7 million of depreciation and amortization.
General and administrative expenses increased $10.4 million, or 60%, in the 2009 period as compared to the 2008 period. The increase is due to approximately $10.3 million in executive severance consisting of a cash payment of $3.4 million and $6.9 million of share-based compensation from the accelerated vesting of restricted common shares. Excluding this charge, as a percentage of total revenues, general and administrative expenses were 9% and 10% in the 2009 and 2008 periods, respectively. Decreases in corporate overhead partially offset the increase for the 2009 period.
Depreciation and amortization increased $14.7 million, or 32%, in the 2009 period compared to the 2008 period. During the first quarter of 2009, we obtained approval from Beaufort County, South Carolina to implement a redevelopment plan at the Hilton Head I, SC outlet center. Based on our current redevelopment timeline, we determined that the estimated remaining useful life of the existing outlet center is approximately three years. As a result of this change in useful lives, additional depreciation and amortization of approximately $4.5 million was recognized during the nine months ended September 30, 2009. The accelerated depreciation and amortization reduced income from continuing operations and net income by approximately $.11 per share for the nine months ended September 30, 2009. The majority of the remaining increase is due the addition of the Washington, PA and Myrtle Beach Hwy 17, SC centers to the wholly-owned portfolio, representing $9.3 million of depreciation and amortization.
In May 2009, Exchangeable Notes of the Operating Partnership in the principal amount of $142.3 million and a carrying amount of $135.3 million were exchanged for Company common shares, representing approximately 95.2% of the total Exchangeable Notes outstanding prior to the exchange offer. In the aggregate, the exchange offer resulted in the issuance of approximately 4.9 million Company common shares and the payment of approximately $1.2 million in cash for accrued and unpaid interest and in lieu of fractional shares. Following settlement of the exchange offer, Exchangeable Notes in the principal amount of approximately $7.2 million remained outstanding. In connection with the exchange offering, we recognized in income from continuing operations and net income a gain on early extinguishment of debt in the amount of $10.5 million.
In May 2009, Exchangeable Notes of the Operating Partnership in the principal amount of $142.3 million and a carrying amount of $135.3 million were exchanged for Company common shares, representing approximately 95.2% of the total Exchangeable Notes outstanding prior to the exchange offer. In the aggregate, the exchange offer resulted in the issuance of approximately 4.9 million Company common shares and the payment of approximately $1.2 million in cash for accrued and unpaid interest and in lieu of fractional shares. Following settlement of the exchange offer, Exchangeable Notes in the principal amount of approximately $7.2 million remained outstanding. In connection with the exchange offering, we recognized in income from continuing operations and net income a gain on early extinguishment of debt in the amount of $10.5 million.
SKT is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP.
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