Tanger Factory Outlet Centers Inc. ( SKT)

Q3 2010 Earnings Conference Call

October 27, 2010 10:00 AM ET


Mona Walsh – Assistant VP, Corporate Communications

Steven Tanger – President and CEO

Frank Marchisello – CFO, EVP and Secretary


Christie McElroy – UBS

Quinton Falelli – Citi

Craig Schmidt – Bank of America/Merrill Lynch

Todd Thomas – Keybanc Capital Markets

Michael Mueller – J.P. Morgan

Carol Kemple – Hilliard Lyons

David Leibowitz – Horizon Asset Management

Ben Yang – Keefe Bruyette & Woods

Cedric Lachance – Greenstreet Advisors

Rich Moore – RBC Capital Markets

Nathan Isbee – Stifel Nicolaus



Good morning. My name is Andrea and I will be your conference operator today. At this time I would like to welcome everyone to the Tanger Factory Outlet Centers third quarter 2010 earnings conference call. All lines have been placed on mute to prevent noise. After the speakers’ remarks, there will be a question-and-answer session.

(Operator Instructions)

Thank you. I would now like to turn the call over to our presenters, Steven Tanger, President and Chief Executive Officer, Frank Marchisello, Executive Vice President and Chief Financial Officer and Mona Walsh, Assistant Vice President, Corporate Communications. Miss Walsh, you may begin your conference.

Mona Walsh

Thank you. Good morning. This is the Tanger Factory Outlet Centers third quarter 2010 conference call. Please note that during the call, some of management’s comments will be forward-looking statements regarding the company’s property operations, leasing, tenant sales trends, development, acquisition, expansion and disposition activities as well as their comments regarding the company’s funds from operations, funds available for distribution and dividends. These forward-looking statements are subject to numerous risks and uncertainties. Actual results could differ materially from those projected due to factors including but not limited to changes in economic and real estate conditions, the availability and cost of capital, the company’s ongoing ability to lease, develop and acquire properties as well as potential tenant bankruptcies and competition. We direct you to the company’s filings with the Securities and Exchange Commission for a details discussion of the risks and uncertainties. This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management’s comments include time sensitive information that may be accurate only as of today’s date, October 27, 2010.

At this time, all participants are in a listen only mode. Following management’s prepared comments, the call will be opened up for your questions. I’ll now turn the call over to Steven Tanger. Please go ahead Steve.

Steven Tanger

Thank you Mona and good morning everyone. Before we get started today, I would like to acknowledge the passing of our Founder, my father Stanley Tanger. Dad died last Saturday peacefully surrounded by our family including my mother, his wife of over 62 years, his three children and six grandchildren.

Stanley Tanger was a dedicated family man and an entrepreneur who will be remembered for his lifetime commitment to philanthropy. He was a visionary, but more than anything, he was my mentor and my friend. His legacy will be carried forward by everyone at Tanger Outlet Centers, of whom he was very proud.

As you can imagine, it is with mixed emotions that we conduct this call today. Stanley Tanger never sat still, and always moved forward, so it is in this spirit that we share our thoughts on our performance during the third quarter.

Our operating results were strong and above plan with same center NOI increasing by 3.6 % in the third quarter and 2.4 % in the first nine months of 2010. Our tenant comparable sales for the rolling 12 months ended September 30, 2010 increased 6.3 % to $349.00 per square foot. Comparable sales for the third quarter increased 4.9 % compared to the third quarter of 2009.

During the quarter, we expanded our senior management team with the appointment of Thomas E. McDonough to the newly created position of Executive Vice President of Operations. Tom brings to Tanger nearly 30 years of REIT management, leasing acquisition and development experience. He has served in senior management positions at several REIT’s. Tom joined the Tanger management team in August and we are very pleased to have him on board.

We also expanded and strengthened our Board of Directors with the addition of Thomas J. Reddin, a 30 year consumer marketing and e-commerce veteran. Appointed a Director in July, Tom has already brought value and perspective to our Board.

Each year, millions of shoppers across America look to Tanger Outlet Centers to receive value on all the brand name fashions and accessories they purchase for their family. Kicking off on September 15, Tanger added even more value to our consumer’s visits by giving them a chance to also fight breast cancer in their community.

For the 17 th year, the annual Tanger style of Pink Campaign is providing consumers in our 32 outlet centers across the country, the opportunity to purchase Tanger Pink cards for a dollar donation and receive a 25 % discount at participating stores.

The money raised is locally donated to nearly 20 different organizations across the country through the Stanley K. Tanger Breast Cancer Fund. Tanger’s 2010 Pink campaign, concluded on October 25, and raised approximately $1.2 million. Since 1994, Tanger Outlet Centers has contributed more than $8.7 million to this important cause, giving back and supporting the communities where we live and work.

I will now turn the call over to Frank who will take you through our financial results for the quarter, and then I will follow with a summary of our operating performance and our current expectations for the balance of 2010.

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