Tanger Inc. · NYSE:SKT
Tanger — Tanger Factory Outlet Centers — NAREIT Investor Forum 2009
43 slides from Tanger's conference presentation, Jun 2, 2009
Slide 1: NAREIT Investor Forum
NAREIT Investor Forum Wednesday, June 3, 2009 and Thursday, June 4, 2009
Slide 2: Agenda
• Business Overview • Summary of 1 st Quarter • Summary of 2008 Financial Results • Development Update • Financial Strategies • 2009 Challenges • History of Consistent Success & Investor Reward
Slide 3: Business Overview
Business Overview
Slide 4: State of the Industry
State of the Industry Tanger - Myrtle Beach - Hwy 17, SC
Slide 5: Growth Prospects
Tanger - Myrtle Beach - Hwy 501, NC Growth Prospects
Slide 6: 1st Quarter 2009 Highlights
1 st Quarter 2009 Highlights
Slide 7: 1st Quarter 2009 Highlights
§ 11.9% increase in FFO per share to $0.66 from $0.59 for 1Q08. § 2.4% increase in same center NOI. § Quarter end occupancy of 93.5% for stabilized, wholly-owned properties. § Comparable tenant sales decreased 3.2% to $338 per square foot. § Completed an exchange offer on May 8, 2009 resulting in th
Slide 8: Impact of Exchange Offer
Impact of Exchange Offer (Debt to Equity Conversion) Key Financial Ratios as of March 31, 2009: Actual Pro-forma* Limit Key Bond Covenants (based on GAAP consolidation) Total debt to adjusted total assets 53% 44% 60% Secured debt to adjusted total assets 2% 2% 40% Unencumbered assets to unsecured de
Slide 9: Portfolio Diversification
8.4% 4.7% 3.3% 3.3% 3.2% 2.9% 2.8% 2.5% 2.3% 64.4% The Gap PVH Nike Adidas VF Liz Dress Barn Carters Polo Other Retailers Note: As of March 31, 2009 Portfolio Diversification 2.2% Jones Retail Corp
Slide 10: 5.6% Increase
5.6% Increase (1) After FSP 14-1 restatement of interest expense related to 2026 Exchangeable Notes. (2) Excludes $2.2 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. Reduced to reflect accou
Slide 11: 4.1% Increase
4.1% Increase (1) After FSP 14-1 restatement of interest expense related to 2026 Exchangeable Notes. (2) Excludes $2.2 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. Reduced to reflect accou
Slide 12: Capitalization after exchange offer
34% 63% 3% * Reflects the reduction in debt and additional shares that resulted from the exchange offer completed May 8, 2009.
Slide 13: Summary of 2008 Financial Results
Summary of 2008 Financial Results
Slide 14: Total Enterprise Value
TangerOvtleis Total Enterprise Value (in billions) 25% Annual Compound Increase $2.20 $2.20 $2.50 2002 2003 2004 2005 2006 2007 2008
Slide 15: Growth in Same Center NOI
TangerOvtleis Growth in Same Center NOI 5.30% 2005 2006 2007 2008
Slide 16: Re-leasing and renewal spreads
Straight-line releasing spreads = 44.1% in 2008 (39.7% in 2007) Straight-line renewal spreads = 17.5% in 2008 (13.9% in 2007)
Slide 17: Average Tenant Sales Per Square Foot
TangerOvtleis Average Tenant Sales Per Square Foot (3.1% compound annual increase) $336 $281 $226 1995 2000 2008
Slide 18: Tenant Average Occupancy Cost
TangerOvtleis Tenant Average Occupancy Cost 8.20% 2004 2005 2006 2007 2008
Slide 19: Development Update - New Properties
Development Update - New Properties
Slide 20: Washington, PA
Washington, PA (south of Pittsburgh) 82% leased at March 31, 2009 Construction financed through use of lines of credit and tax increment financing Estimated stabilized return on cost of 10.0 to 10.5%
Slide 21: Unconsolidated JV property, 78% leased
78% leased at March 31, 2009 Unconsolidated JV Construction financed through $284.0 million mortgage loan maturing May 2012 and partner equity Estimated stabilized return on cost of 8.5% to 9.0%
Slide 22: Development Update - Pipeline
Development Update - Pipeline
Slide 23: Mebane, North Carolina
Tanger Mebane, North Carolina ... MEBANE, NORTH CAROLINA
Slide 24: Irving, Texas
TangerOvitlets Irving, Texas Tanger Outlet Center at ving, Texas
Slide 25: Internal Criteria for Development
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 5
Slide 26: Financial Strategies
Financial Strategies
Slide 27: Summary of Financial Strategies
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
Slide 28: Limited Exposure to Rising Interest Rates
Limited Exposure to Rising Interest Rates * Reflects the reduction in debt that resulted from the exchange offer completed 05/08/09.
Slide 29: Financial Capacity
Financial Capacity Current capacity of $325 million under lines of credit Bank of America, $100 million, 06/30/2011 maturity Wells Fargo, $100 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 Wac
Slide 30: Debt maturities
1. Represents convertible debt remaining after completion of exchange offer on 05/08/09. Matures August 2026, but puttable at the holders’ option in August 2011. 2. Debt assumed as part of acquisition of Myrtle Beach 17 on 01/05/2009.
Slide 31: Dividends and Excess Cash Flow
$56.4 Million Dividends Reinvesting in the Company $35.5 Million Excess Cash Flow
Slide 32: 2009 Challenges
2009 Challenges
Slide 33: Lease Terminations 3Q07 through 1Q09
Lease Terminations 3Q07 through 1Q09 • Tenants 19 • Stores 131 • GLA 558,794 sf • Average base rent $17.31 psf • Base rental revenue $9.7 million
Slide 34: GLA Terminated by Tenant (sf)
GLA Terminated by Tenant (sf)
Slide 35: Retenanted vs. vacant GLA
TangerOvilets GLA (sf) Suites 211,619 48 38% 37% 83 347,175 63% 63% @Retenanted @ Vacant @Retenanted gg Vacant
Slide 36: Average Base Rent psf and loss of revenue
TangerOvilets Average Base Rent psf $30.00 $20.00 $17.31 $10.00 $0.00 Terminated leases $26.80 New leases Loss of Base Rental Revenue (in millions) $5.6 58% $4.1 42% Base rental revenue for retenanted space gw Net loss of base rental revenue after retenanting activity
Slide 37: Liquidity and access to capital
Liquidity and access to capital Line of credit capacity Near term debt maturities Rating agency ratings Tenant’s performance in the Tanger portfolio Analysis of Landlord Risk Top Ten Tenants (in terms of Tanger revenues) Tanger analyzes the following information for each of our top ten tenants:
Slide 38: History of Consistent Results and Investor Reward
History of Consistent Results and Investor Reward
Slide 39: Total Return to Shareholders and Ranking Among Equity REITs
TangerOvtleis Total Return to Shareholders and Ranking Among all Equity REIT's (as of December 31, 2008) 131.47% 43.87% 1 Year 3 Years 5 Years (Top 6%) (Top 4%) (Top 2%)
Slide 40: Total Return To Shareholders
TangerOvilets 350 300 250 200 150 100 50 Total Return To Shareholders 2003 2004 2005 2006 2007 2008 “Tanger -@-NAREIT All Equity REIT Index SNL Shopping Center REIT Index 40
Slide 41: TangerOvtleis
TangerOvtleis
Slide 42: Strength and stability of core operating portfolio
The strength and stability of our core operating portfolio, as well as the strength of our balance sheet, leaves us poised to weather the current economic conditions. Low cost of occupancy helps the outlet channel continue to be a viable and profitable means of distribution for retailers and manufac
Slide 43: Summary
In these difficult economic times, our financial projections are both conservative and achievable. In spite of increased projected vacancy, we will be able to: Continue earnings growth Increase average rental rates on renewals and re- tenanting Satisfy our cash requirements using net operating incom
Tanger Factory Outlet Centers — NAREIT Investor Forum 2009 on 6ix