Tanger Outlets Myrtle Beach, SC Hwy 17

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1 Tanger Outlets Myrtle Beach, SC Hwy 17 Management Presentation October 26, 2010

2 Disclaimer 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 retenanting 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 2010 YTD Highlights Summary Financial Results Summary Operating Results Development Update Financial Strategies History of Consistent Results & Investor Reward Summary 3

4 Business Overview 4

State of the Industry Industry consolidation continues to benefit owners of larger centers. Tanger and Simon combined own approximately 60% of the total outlet gross leasable area.

5 State of the Industry Industry consolidation continues to benefit owners of larger centers. Tanger and Simon combined own approximately 60% of the total outlet gross leasable area. New supply continues to be limited. Each year new brand name manufacturers are opening stores and existing manufacturers are opening new concepts. Outlet center occupancy levels have not been impacted to the same extent as other retail properties by recent bankruptcy and store closing announcements among retailers. In a challenging retail environment, 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 Tilton, NH 5

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 still tenant demand for outlet space. Acquisition opportunities still exist but are limited and timing is unknown. Tanger divests itself of under-performing, smaller assets and reinvests the proceeds in new developments and expansions or reduces debt. Tanger Park City, UT 6

7 Portfolio Diversification 61.2% 8.5% 6.4% 3.8% 3.5% 3.3% 3.2% 2.9% 2.7% 2.3% 2.2% The Gap PVH Dress Nike VF Adidas Liz Carters Hanesbrands Polo Other Barn Retailers Note: In terms of GLA As of September 30, 2010 Includes all retail concepts of each tenant group. Liz Claiborne branded stores totaled 2.6% 7

8 Geographic Diversification Well positioned portfolio of 30 wholly-owned properties throughout 21 states, plus ownership interests in 2 joint venture properties. 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 Current development F:\Jobs\DTP-NY\60000\63900\63982\Artwork\63982-Tanger Outlets\63982-Tanger Outlets.wor Note: As of September 30,

9 2010 YTD Highlights 9

10 September 30 YTD Highlights 2.4% increase in same center net operating income. 10.1% increase in average base rent on leases renewed. 25.0% increase in average base rent on released space. 98.1% occupancy rate for wholly-owned portfolio as of June 30, Tenant comparable sales increased 6.3% to $349 per square foot for the rolling 12 months ended September 30, Increase in common share cash dividend to $1.55 per share annualized from $1.53 per share. Moody s upgrade to Baa2 from Baa3 on May 20, 2010 Successfully closed a $300 million 10 year bond offering with a 6.125% coupon (priced at 99.3% of par to yield 6.219%) on June 7, Proceeds used to repay $235 million unsecured term loan, terminate underlying interest rate swaps, and pay down outstanding balances under unsecured revolving lines of credit. 10

11 Summary Financial Results 11

FFO (in millions) $114.95 $121.58 $98.26 17% Increase 3% Increase 2008 Adj. (1) 2009 Adj. (2) 2010E Adj. (3) 1) Excludes $2.9 million termination rents, $3.

12 FFO (in millions) $ $ $ % Increase 3% Increase 2008 Adj. (1) 2009 Adj. (2) 2010E Adj. (3) 1) Excludes $2.9 million termination rents, $3.3 million abandonment of due diligence costs, $8.9 million charge for settlement of T-locks, $406,000 debt prepayment premium. 2) Excludes $1.5 million lease termination fees, $800,000 abandonment of due diligence costs, $10.3 million charge for executive severance, $5.2 million impairment charge for Commerce I, and $3.3 million gain on sale of Washington, PA outparcel. 3) Represents the midpoint of $2.42 to $2.48 revised guidance range (See Appendix), adjusted to exclude $6.7 million charge for write-off of unamortized loan costs and settlement of interest rate swaps associated with prepayment of $235 million term loan and $1.6 million in other charges related to impairment, demolition, and abandoned due diligence charges we believe are not indicative of our ongoing operations. 12

13 $2.64 FFO per share $2.73 $ ,429,000 42,079,000 Shares Shares 46,227,000 Shares 2008 Adj. (1) 2009 Adj. (2) 2010E Adj. (3) 1) Excludes $0.11/share termination rents, $.08/share abandonment of due diligence costs, $0.24/share charge for settlement of T-locks & debt prepayment premium. 2) Excludes $0.04/share lease termination fees, $0.02/share abandonment of due diligence costs, $0.25/share charge for executive severance, $0.12/share impairment charge for Commerce I, and $0.08/share gain on sale of Washington, PA outparcel. 3) Represents the midpoint of $2.42 to $2.48 revised guidance range (see Appendix), adjusted to exclude $0.14 charge for write-off of unamortized loan costs and settlement of interest rate swaps associated with prepayment of $235 million term loan and $0.04 in other charges related to impairment, demolition, and abandoned due diligence charges we believe are not indicative of our ongoing operations. 13

14 Total Enterprise Value (in billions) 11% Annual Compound Increase $2.90 $2.50 $2.30 $2.20 $2.20 $1.78 $ Q10 14

15 Total Enterprise Value (as of September 30, 2010) $609,315,000 21% 3% 76% $75,000,000 $2,194,529,000 Common Equity Preferred Equity Debt 15

16 Summary Operating Results 16

17 Growth in Same Center NOI 5.30% 3.10% 4.10% 1.40% 2.40% Q10 YTD 17

18 Rental Rate Increases on Renewals and Releasing (On a cash basis) Straight-line releasing spreads = 25.0% 3Q10 YTD, 37.4% in 2009, 43.8% in 2008 Straight-line renewal spreads = 10.1% 3Q10 YTD, 10.1% in 2009, 17.6% in % 19.9% 5.5% 6.3% 10.3% 9.8% 8.6% Q10 YTD 18

19 Average Tenant Sales Per Square Foot (2.9% compound annual increase) $339 $349 $281 $ mos. ended 9/30/10 19

20 Tenant Average Occupancy Cost 7.50% 7.40% 7.70% 8.20% 8.50%

21 Development Update 21

signed or out for signature for 100% of GLA as of October 26, 2010

22 22 Mebane, NC 317,000 sf development $64.9 million budget Grand opening scheduled for November 5, 2010 Leases signed or out for signature for 100% of GLA as of October 26, 2010 Tenants include Saks Off Fifth, Coach, J Crew, GAP, Banana Republic, Nike, Tommy Hilfiger, & more

23 Hilton Head I, SC Redevelopment Former Formerly 162,000 sf of GLA Shopper unfriendly design 23

Hilton Head I, SC Redevelopment Redeveloped 176,000 sf GLA plus 4 outparcel pads when redeveloped Shopper-friendly redevelopment will be 1 st LEED certified green shopping center in

24 Hilton Head I, SC Redevelopment Redeveloped 176,000 sf GLA plus 4 outparcel pads when redeveloped Shopper-friendly redevelopment will be 1 st LEED certified green shopping center in Beaufort County $50 million incremental investment Projected opening in second half of 2011 Leases signed or out for signature for approximately 73.4% of GLA as of Oct. 26,

25 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 25

26 Financial Strategies 26

27 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 relatively low usage on 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) 27

28 Limited Exposure to Rising Interest Rates $54,800,000 As of September 30, 2010, only 9% of total debt at variable rates Fixed Rate Variable Rate $554,515,000 28

29 Financial Capacity Current capacity of $325 million under lines of credit Bank of America, $100 million, 06/30/2011 maturity Wells Fargo, $125 million, 06/30/2011 maturity SunTrust, $40 million, 08/31/2011 maturity BB&T, $35 million, 06/30/2011 maturity Citicorp, $25 million, 06/30/2011 maturity As of September 30, 2010, Tanger s usage was only 16.9% of total available capacity under lines of credit. 29

30 $7.2 $54.8 $250.0 $ Maturities of Debt Outstanding as of 9/30/ Exchangeable Notes (1) Lines of Credit ($325 commitment) 2015 Notes 2020 Notes 1) Represents convertible debt, which is puttable at holders option beginning 08/15/2011.

acquisitions or to pay down debt 2009 payout ratio of 56% $56.

31 Reinvesting in the Company Excess cash flow over the dividend is reinvested in existing centers, new expansions, new developments, acquisitions or to pay down debt 2009 payout ratio of 56% $56.4 Million Dividends $56.4 Million Dividends Excess cash flow $54.6 million Dividends $59.3 million 31

32 Financial Profile Key Financial Ratios as of September 30, 2010: Key Bond Covenants (based on GAAP consolidation): Calculation Limit Total debt to adjusted total assets 36% < 60% Secured debt to adjusted total assets 0% < 40% Unencumbered assets to unsecured debt 274% > 135% Interest coverage 5.11 x > 1.50 x 32

33 History of Consistent Results and Investor Reward 33

34 Total Return to Shareholders Tanger NAREIT All Equity REIT Index SNL REIT Retail Shopping Ctr Index 34

35 Summary 35

36 Why? Investment Diversification Only public REIT with pure outlet portfolio Conservatively Structured Balance Sheet 21% debt to market cap at September 30, % unencumbered portfolio Brand Recognition Recognized & respected by tenants and shoppers alike Tenured Management Team Executives average 17 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 36

37 Appendix 37

38 Reconciliation of Guidance (1) : Net income to FFO Low Range High Range Estimated diluted net income per common share $0.65 $0.71 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 $2.42 $2.48 1) Includes $0.14 charge for the settlement of interest rate swaps and the write-off of unamortized loan costs associated with prepayment of $235 million term loan and $1.6 million in other charges related to impairment, demolition, and abandoned due diligence charges we believe are not indicative of our ongoing operations.. 38

Tanger Outlets Hilton Head I, SC

Tanger Outlets Hilton Head I, SC Management Presentation April 26, 2011 Disclaimer This presentation includes time-sensitive information that may be accurate only as of today s date, April 26, 2011. Estimates