Tanger Outlets Hilton Head I, SC

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1 Tanger Outlets Hilton Head I, SC Management Presentation April 26, 2011

2 Disclaimer This presentation includes time-sensitive information that may be accurate only as of today s date, April 26, Estimates of future net income per share and FFO per share are by definition, and certain other matters discussed in this presentation regarding the state of the industry, our growth prospects, our remerchandising and financial strategies, the renewal and re-tenanting of space, the development of new centers, redevelopment and acquisition of existing centers, tenant sales and sales trends, occupancy rates, interest rates, funds from operations 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 company s ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, 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,

3 Business Overview First Quarter 2011 Highlights 2010 Highlights Summary Financial Results Summary Operating Results External Growth Update Financial Strategies History of Consistent Results & Investor Rewards Summary 3

4 Business Overview 4

5 State of the Industry Economies of scale benefit owners of large portfolios Tanger and Simon combined own approximately 60% of the total outlet gross leasable area Each year new brand name manufacturers are opening outlet stores and existing manufacturers are opening new outlet concepts Outlet center occupancy levels have not been impacted to the same extent as other retail properties by bankruptcy and store closing announcements among retailers During challenging retail environments, outlet stores continue to be a viable and profitable channel of distribution for retailers and manufacturers Landlord revenues are protected by the relatively long-term nature of tenant leases Tanger Myrtle Beach, SC Hwy 17 5

Growth Prospects Tanger continues to be successful in obtaining increases in rental rates on renewals and releasing of space New development opportunities exist as there is increased tenant demand

6 Growth Prospects Tanger continues to be successful in obtaining increases in rental rates on renewals and releasing of space New development opportunities exist as there is increased tenant demand for outlet space Tanger currently has signed definitive agreements for the potential acquisition of a number of existing outlet centers, pending satisfactory completion of due diligence Tanger has divested itself of many under-performing, smaller assets and reinvested the proceeds in new developments and expansions or to reduce debt Tanger Mebane, NC 6

7 Portfolio Diversification 61.8% 8.2% 6.3% 3.6% 3.5% 3.1% 3.1% 2.8% 2.7% 2.6% 2.3% The Gap PVH Dress Nike Adidas VF Barn Note: In terms of GLA as of March 31, 2011 Includes all retail concepts of each tenant group Ann Taylor Polo Carter s Hanesbrands Other Retailers 7

8 Geographic Diversification Well positioned portfolio of 34 outlet centers in 22 states coast-to-coast, totaling approximately 10.3 million square feet. DO NOT DELETE this nonprinting tracker. Without it your map cannot be edited. F:\Jobs\DTP-NY\60000\63900\63982\Artwork\63982-Tanger Outlets\63982-Tanger Outlets.wor Corporate HQ Wholly-owned Unconsolidated JV F:\Jobs\DTP-NY\60000\63900\63982\Artwork\63982-Tanger Outlets\63982-Tanger Outlets.wor Note: As of April 26,

9 First Quarter 2011 Highlights 9

10 First Quarter 2011 Highlights 6.0% increase in same center net operating income 25.3% increase in average base rents on combined renewal & released space 16.0% increase in average base rent on leases renewed 49.9% increase in average base rent on released space 96.7% occupancy rate for wholly-owned portfolio as of March 31, 2011 Tenant comparable sales increased 5.9% to $359 per square foot for the rolling 12 months ended March 31, 2011 Increased common share cash dividend to $0.80 per share annualized from $0.775 per share Announced a joint venture with Riocan Real Estate Development Trust for the development of Tanger Outlet Centers in Canada over the next 5 7 years, naming Halton Hills in the greater Toronto market as its first potential development site Announced the signing of definitive agreements for the potential acquisition of a number of existing outlet centers, pending satisfactory completion of due diligence 10

11 2010 Highlights 11

12 2010 Highlights 2.6% increase in same center net operating income 13.2% increase in average base rent on combined renewed & released space 9.2% increase in average base rent on leases renewed 25.9% increase in average base rent on released space 98.4% occupancy rate for wholly-owned portfolio as of December 31, 2010 Tenant comparable sales increased 6.6% to $354 per square foot for the rolling 12 months ended December 31, 2010 Increased common share cash dividend to $0.775 per share annualized from $0.765 per share, on a split-adjusted basis Moody s upgrade to Baa2 from Baa3 on May 20,

13 2010 Capital Transactions November 29, 2010 Closed on $400 million in unsecured lines of credit that mature November 29, 2013 and include options that can extend maturity for an additional year Replaced former lines of credit with total commitments of $325 million that were terminated simultaneously with closing of new facilities Currently bear interest on outstanding balances at LIBOR plus facility fee of 40 bps on total commitment and include financial covenants that do not differ materially from those of our former facilities $385 million syndicated line with a total of nine lenders led by Bank of America and Wells Fargo $15 million cash management line with Bank of America as lender December 9, 2010 Completed the redemption of all 3 million outstanding 7.5% Class C Preferred shares for $ per share including accrued dividends with the total cost of $75.6 million funded under our lines of credit June 7, 2010 Closed a $300 million 10 year bond offering (6.125% coupon, priced at 99.3% of par to yield 6.219%) with proceeds used to repay $235 million unsecured term loan, terminate underlying interest rate swaps, and pay down outstanding balances under unsecured lines of credit 13

14 Summary Financial Results 14

$115.68 FFO (in millions) $122.78 6% Increase $129.50 5.0% Increase 2009 Adj. (1) 2010 Adj. (2) 2011E Adj. (3) 1) Excludes $10.3 million charge for executive severance, $5.

7 million charge for write-off of unamortized loan costs and settlement of interest rate swaps associated with the prepayment of a $235 million term loan, $2.

15 $ FFO (in millions) $ % Increase $ % Increase 2009 Adj. (1) 2010 Adj. (2) 2011E Adj. (3) 1) Excludes $10.3 million charge for executive severance, $5.2 million impairment charge for Commerce I, $3.3 million gain on sale of Washington, PA outparcel, and a $10.5 million gain on early extinguishment of debt. 2) Excludes $6.7 million charge for write-off of unamortized loan costs and settlement of interest rate swaps associated with the prepayment of a $235 million term loan, $2.5 million reduction in net income related to the redemption of preferred shares and $1.4 million in other charges related to impairment, demolition, and gain or sale of outparcels we believe are not indicative of our ongoing operations. 3) Represents midpoint of guidance multiplied by the weighted average budgeted common shares outstanding for 2011, adjusted to exclude $567,000 in acquisition costs and $158,000 in abandoned development costs. 15

FFO per share $1.37 $1.33 $1.40 84,157,000 Shares 92,523,000 Shares 92,627,000 Shares 2009 Adj. (1) 2010 Adj. (2) 2011E Adj. (3) 1) Excludes $0.125/share charge for executive severance, $0.

16 FFO per share $1.37 $1.33 $ ,157,000 Shares 92,523,000 Shares 92,627,000 Shares 2009 Adj. (1) 2010 Adj. (2) 2011E Adj. (3) 1) Excludes $0.125/share charge for executive severance, $0.06/share impairment charge for Commerce I, $0.04/share gain on sale of Washington, PA outparcel, and a $0.124/share gain on early extinguishment of debt. 2) Excludes $0.07/share charge for write-off of unamortized loan costs and settlement of interest rate swaps associated with the prepayment of a $235 million term loan, $0.025/share reduction in net income related to the redemption of preferred shares and $0.01/share in other charges related to impairment, demolition, and gain or sale of outparcels we believe are not indicative of our ongoing operations. 3) Represents midpoint of FFO guidance, adjusted to exclude $0.01 in acquisition and abandoned development costs. 16

17 Total Enterprise Value (in billions) $2.20 $2.20 $ % Annual Compound Increase $3.08 $3.17 $2.50 $ Q

18 Total Enterprise Value (as of March 31, 2011) $720,970,000 23% 77% Common Equity Debt $2,452,106,000 18

19 Summary Operating Results 19

20 Growth in Same Center NOI 5.3% 6.0% 3.1% 4.1% 1.4% 2.60% Q

21 Rental Rate Increases on Renewals and Releasing (On a cash basis) Straight-line releasing spreads = 49.9% Q1 2011, 25.9% 2010, 30.9% in 2009 Straight-line renewal spreads = 16.0% Q1 2011, 9.2% 2010, 9.7% in % 19.9% 16.1% 10.3% 9.8% 8.6% Q

22 Average Tenant Sales Per Square Foot (3% compound annual increase) $339 $354 $359 $281 $ Q

23 Tenant Average Occupancy Cost 7.40% 7.70% 8.20% 8.50% 8.30%

Occupancy (1) 98% 98% 97% 96% 98% 97% 2006 2007 2008 2009

24 Occupancy (1) 98% 98% 97% 96% 98% 97% Q ) For stabilized, wholly-owned properties 24

25 External Growth Update 25

26 External Growth Strategy US Development Canadian Development Acquisitions 26

27 Development Update 27

Hilton Head I, SC Redevelopment 177,000 sf GLA plus 4 outparcel pads $43 million investment Shopper-friendly redevelopment is the 1 st LEED certified green shopping center in Beaufort County, SC

28 Hilton Head I, SC Redevelopment 177,000 sf GLA plus 4 outparcel pads $43 million investment Shopper-friendly redevelopment is the 1 st LEED certified green shopping center in Beaufort County, SC Grand opening March 31, 2011 Signed leases for 91% of GLA plus 3 of the 4 outparcel pads as of March 31, 2011 Tenants include Adidas, BCBG, Brooks Brothers, J. Crew, Joe s Jeans, Kenneth Cole, New Balance, Saks Off Fifth, Talbots, Theory, Under Armour, & more 28

29 29 Mebane, NC 319,000 sf development $64.9 million investment Grand opening November 5, 2010 Opened fully leased Tenants include Saks Off Fifth, Coach, Polo, J Crew, GAP, Banana Republic, Nike, Tommy Hilfiger, & more

30 Pre-development Update 30

RioCan Joint Venture Halton Hills site 50/50 joint venture for outlet development in Canada Properties will be branded as Tanger Outlet Centers Potential development of 10 15 outlet centers over the

31 RioCan Joint Venture Halton Hills site 50/50 joint venture for outlet development in Canada Properties will be branded as Tanger Outlet Centers Potential development of outlet centers over the next 5 7 years Tanger will be responsible for leasing Riocan will be responsible for development & management First potential development site identified in the greater Toronto market in Halton Hills, located on Highway 401 at the James Snow Parkway interchange Excellent access to Brampton, Mississauga, and Metro Toronto Development expected to begin in 2011 with opening targeted for

32 US Development Sites Currently have sites in the following markets: Houston, Texas West Phoenix, Arizona Scottsdale, Arizona Tenant interest is strong for these sites as pre-leasing continues Have identified approximately 14 other domestic markets that are either not served or are underserved by the outlet industry and site selection is ongoing in these markets 32

33 Internal Criteria for Development Predevelopment costs are limited to those associated with: Costs to control the land (option contract costs) Pre-leasing costs Due diligence costs Criteria required to purchase land and begin development Positive results of the due diligence process Pre-leasing of 50% or greater with an acceptable tenant mix and visibility of leasing of the remaining leasable space to 75% Receipt of all non-appealable permits required to obtain a building permit Acceptable return on cost analysis 33

34 Acquisition Update 34

35 Potential Acquisitions Signed definitive agreements for a number of existing outlet centers in the U.S. Closing pending satisfactory completion of due diligence Should they close, we anticipate that each acquisition will be accretive in the first year of ownership Objective is to be able to announce one or more closings by year end 35

36 Financial Strategies 36

37 Summary of Financial Strategies The following are strategic objectives of Tanger s financial decision making process: Focus on improving investment grade rating Maintain quality coverage and leverage ratios Continue the use of unsecured financing Maintain significant unused capacity under our lines of credit Use off balance sheet joint ventures only when necessary Maintain manageable levels of debt maturities Recycle capital through the sale of non-core assets and land parcels Generate capital internally (cash flow in excess of dividends paid) 37

38 Limited Exposure to Rising Interest Rates $166,300,000 As of March 31, 2011, only 23% of total debt at variable rates $554,670,000 Fixed Rate Variable Rate 38

39 Financial Capacity Current capacity of $400 million under new unsecured lines of credit $385 million syndicated line with a total of 9 lenders led by Bank of America and Wells Fargo $15 million cash management line with Bank of America As of March 31, 2011, Tanger s unused capacity was 76.2% of total available capacity 39

40 $7.2 $166.3 $250.0 $300.0 Maturities of Debt Outstanding as of 12/31/ Exchangeable Notes (1) Lines of Credit 2015 Notes 2020 Notes 1) Represents exchangeable debt, which is puttable at holders option beginning 08/18/2011, or earlier under certain conditions. 40

to pay down debt 2010 payout ratio of 64% $56.

41 Reinvesting in the Company (in millions) Excess cash flow over the dividend is reinvested in existing centers, new expansions, new developments, acquisitions or to pay down debt 2010 payout ratio of 64% $56.4 Million Dividends Excess Cash Flow, $56.4 $42.9 Million Dividends Common Dividends, $71.9 Preferred Dividends, $6.2 41

42 Financial Profile Key Financial Ratios as of March 31, 2011: Key Bond Covenants (based on GAAP consolidation): Calculation Limit Total debt to adjusted total assets 42% < 60% Secured debt to adjusted total assets 0% < 40% Unencumbered assets to unsecured debt 238% > 135% Interest coverage 4.60 x > 1.50 x 42

43 History of Consistent Results and Investor Rewards 43

44 Total Return to Shareholders Tanger NAREIT All Equity REIT Index SNL REIT Retail Shopping Ctr Index 44

45 Summary 45

46 Why? Investment Diversification Only public REIT with pure outlet portfolio Conservatively Structured Balance Sheet 23% debt to market cap at March 31, % unencumbered portfolio Brand Recognition Recognized & respected by tenants and shoppers alike Tenured Management Team Executives average 15 years of Tanger service Disciplined Development Approach Will not build on speculation Strong Portfolio of Operating Properties Geographic diversification Tenant diversification High credit quality tenants Stable annual lease rollover Properties built to easily reconfigure No big boxes 46

47 Appendix 47

48 Reconciliation of Guidance: Net income to FFO (1) Low Range High Range Estimated diluted net income per common share $0.54 $0.58 Noncontrolling interest, gain/loss on the sale of real estate, depreciation and amortization uniquely significant to real estate including noncontrolling interest share, and our share of joint ventures Estimated diluted FFO per share $1.37 $1.41 1) Includes $725,000 ($0.01 per share) in acquisition costs & abandoned development costs 48

49 Tanger Factory Outlet Centers, Inc., (NYSE:SKT) is a publicly traded REIT headquartered in Greensboro, North Carolina that operates and owns or has ownership interests in, a portfolio of 34 outlet centers in 22 states coast-to-coast, totaling approximately 10.3 million square feet, leased to over 2,100 stores that are operated by more than 370 different brand name companies. More than 160 million shoppers visit Tanger Outlet Centers annually. For more information on Tanger Outlet Centers, call TANGER or visit the company s web site at CORPORATE HEADQUARTERS 3200 Northline Avenue, Suite 360 Greensboro, NC A New York Stock Exchange Listed Company: SKT

Tanger Outlets Myrtle Beach, SC Hwy 17

Tanger Outlets Myrtle Beach, SC Hwy 17 Management Presentation October 26, 2010 Disclaimer Estimates of future net income per share and FFO per share are by definition, and certain other matters discussed