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## To Our Fellow Shareholders: 

We started as a small outlet shopping center real estate company back in 1981, hoping to build and lease enough space to keep us busy and to have fun while pursuing this new venture. Little did we know that we were breaking ground on a new retail format and building the foundation for a company that would become a leader in the outlet retail real estate industry. By 1993, we had developed 17 outlet centers containing over 1.5 million square feet of retail space and had became the first outlet shopping center company to be listed on the New York Stock Exchange. On May 28, 1993, the day we completed our initial public offering, our total enterprise value was approximately $198 million. Almost eleven years later, through the commitment and hard work of the Tanger Team, we are now operating 40 outlet shopping centers totaling 9.3 million square feet across 23 different states, coast to coast, and Tanger’s total enterprise value has grown to approximately $1.2 billion as of December 31, 2003. 

Much has changed since those early days as a private company, and even more has changed since going public almost 11 years ago. Over the years we have seen many economic, cultural and business cycles. We have seen good economic times and recessionary times, historically high and historically low interest rates, and more recently the numerous corporate scandals and the resulting imple- mentation of the Sarbanes-Oxley Act. The one fact that has remained constant is the ability of our company to prosper during all the ups and downs of the past 23 years. Our consistency is evidenced in part by the fact that we have never ended the year with an occupancy rate less than 95% since we stared the business in 1981. This is a direct result of our corporate culture, our entrepreneurial spirit, and the core foundation of ethics and integrity that we have maintained and cultivated throughout our company. 

We are pleased to report to you that 2003 was another year of growth and productivity for our company. During 2003, Tanger produced a total return to shareholders of 41.1% compared to 37.1% for the NAREIT All Equity REIT index and 28.6% for the S&P 500 Total Return Index. As shareholders of Tanger, you will be pleased to know that during 2003 your company accomplished the following: 

• Increased the portfolio square footage over 50% from 6.2 million to 9.3 million. 

• Raised $101.2 million in common equity and invested the proceeds in a joint venture that acquired nine outlet cen- ters totaling 3.3 million square feet. 

• Increased total funds from operations (FFO) for 2003 to $47.0 million, representing a 12.8% increase over 2002. 

• Increased fully diluted FFO per share for 2003 to $3.45, representing an increase of 1.5% over 2002. 

• Increased fully diluted net income per share to $1.17, rep- resenting an 8.3% increase over 2002. 

• Increased same-space tenant sales to $307 per square foot in the original Tanger portfolio. 

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