MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In December 2003 we completed the acquisition of the Charter Oak Partners’ portfolio of nine factory out- let centers totaling approximately 3.3 million square feet. We and an affiliate of Blackstone Real Estate Advisors (“Blackstone”) acquired the portfolio through a joint venture in the form of a limited liability com- pany, COROC Holdings, LLC (“COROC”). We own one-third and Blackstone owns two-thirds of the joint venture. We provide operating, management, leasing and marketing services to the properties for a fee. The purchase price for this transaction was $491.0 million, including the assumption of approximately $186.4 million of cross-collateralized debt which has a stated, fixed interest rate of 6.59% and matures in July 2008. We recorded the debt at its fair value of $198.3 million, with an effective interest rate of 4.97%. Accordingly, a debt premium of $11.9 million was recorded and is being amortized over the life of the debt. We financed the majority of our equity in the joint venture with proceeds from the issuance of 2.3 million common shares at $40.50 per share and expect that the transaction will be accretive to our operating results in 2004. The successful equity financing allows us to maintain a strong balance sheet and our current financial flexibility.  At December 31, 2003, we had ownership interests in or management responsibilities for 40 centers in 23 states totaling 9.3 million square feet of operating GLA compared to 34 centers in 21 states totaling 6.2 million square feet of operating GLA as of December 31, 2002. The increase is due to the following events: GENERAL OVERVIEW • changes in business strategy or development plans; • business disruptions; • the ability to attract and retain qualified personnel; • the ability to realize planned costs savings in acquisitions; and • retention of earnings. No. of GLA  Centers (000’s) States As of December 31, 2002 34 6,186 21 New development expansion Myrtle Beach Hwy 17, South Carolina - (unconsolidated joint venture) — 64 — Acquisitions/Expansions Sevierville, Tennessee (wholly-owned) — 64 — Charter Oak portfolio (consolidated joint venture) Rehoboth, Delaware 1 569 1 Foley, Alabama 1 536 — Myrtle Beach Hwy 501, South Carolina  1 427 — Hilton Head, South Carolina 1 393 — Park City, Utah 1 301 1 Westbrook, Connecticut  1 291 1 Lincoln City, Oregon 1 270 1 Tuscola, Illinois  1 258 1 Tilton, New Hampshire  1 228 — Dispositions Martinsburg, West Virginia (wholly-owned) (1) (49) (1) Casa Grande, Arizona (wholly-owned) (1) (185) (1) Bourne, Massachusetts (managed) (1) (23) (1) As of December 31, 2003 40 9,330 23 TANGER FACTORY OUTLET CENTERS, INC. 21