Tanger Inc. · NYSE:SKT
Tanger — Q2 2023 Earnings Presentation
41 slides from Tanger's earnings presentation, Aug 4, 2023
Slide 1: Management Presentation
AUGUST 3, 2023 Management Presentation
Slide 2: Safe Harbor Statements
SECOND QUARTER 2023 This presentation contains certain forward-looking statements dependence on the results of operations of our retailers and their within the meaning of Section 27A of the Securities Act of 1933, as bankruptcy, early termination or closing could adversely affect us; amended, and Se
Slide 3: Table of Contents
SECOND QUARTER 2023 Tanger at a Glance 4 Our Board and Executive Team 6 Our Mission and Vision 7 Table of Contents The Outlet Channel 8 Positioned for Growth 10 Operating Metrics 12 Core Strategies 16 Non-GAAP Supplemental Measures 28 Notes and Additional Information 37 3
Slide 4: Tanger at a Glance: Long-Term Foundation Positioned for Growth
SECOND QUARTER 2023 TANGER AT A GLANCE Long-Term Foundation Positioned for Growth • 42-year history and 30 years publicly traded on the • Open-air portfolio provides brands and retailers an NYSE (SKT) attractive and integral sales channel • $2.4B market capitalization (1) • Centers sought out by con
Slide 5: 37 Well-Positioned Properties
SECOND QUARTER 2023 37 Well-Positioned Properties* Open-Air Portfolio with Locations in High-Frequency Tourist Destinations and Suburbs of Vibrant & Fast-Growing Markets CONSOLIDATED OR JOINT VENTURE PROPERTY NEW DEVELOPMENT STRATEGIC PARTNERSHIP CORPORATE HEADQUARTERS * Includes 1 center under deve
Slide 6: Experienced and Engaged Board and Executive Team
SECOND QUARTER 2023 BOARD OF DIRECTORS Steven B. Tanger Stephen Yalof Bridget M. Ryan-Berman Jeffrey B. Citrin David B. Henry Experienced Executive Chair of Director, President and Lead Director Director Director the Board Chief Executive Officer and Engaged Board and Sandeep L. Mathrani Director Th
Slide 7: Our Mission and Our Vision
SECOND QUARTER 2023 Our Mission To deliver the best value, experience and opportunity for our communities, stakeholders and partners Our Vision Using customer insights and experience to inform the future of shopping 7
Slide 8: Retailer Value Proposition
SECOND QUARTER 2023 Productive Sales Model and Clearance Channel Lower Cost of Occupancy THE OUTLET CHANNEL Retailer Value Proposition Higher Margins One of the most profitable channels for retailers and an Lower Customer Acquisition Costs important component of the omnichannel retail strategy Direc
Slide 9: Consumer Value Proposition
SECOND QUARTER 2023 Brand Names at Consistent Value THE OUTLET CHANNEL Consumer Value Social, Experiential Shopping Proposition Tactile Interaction with Products Instant Gratification of In-Person Shopping 9
Slide 10: Positioned for Growth: Strategic, Disciplined, Data-Driven
SECOND QUARTER 2023 POSITIONED FOR GROWTH Strategic • Disciplined • Data-Driven LEASING OPERATIONS MARKETING FINANCE • Grow Total Rent • Grow Ancillary Revenues • Drive Sales Growth • Prudent Balance Sheet • Increase Occupancy • Drive Operational Efficiencies • Performance Marketing with Management
Slide 11: Strong and Dynamic Tenant Mix
SECOND QUARTER 2023 Strong and Dynamic Tenant Mix “Tanger is a great partner. They value long-term relationships and they make it their business to understand our needs and how best to serve the consumer.” Todd Kahn, Tapestry President Brands: 65.2% Gap; Aéropostale; Loft: Coach; Under Tommy America
Slide 12: Operating Metrics
SECOND QUARTER 2023 Operating Metrics 12
Slide 13: Operating Metrics
SECOND QUARTER 2023 Operating Metrics 6 CONSECUTIVE QUARTERS OF POSITIVE RENT SPREADS (Total Portfolio at Pro Rata Share Except Where Noted) 40.0% 36.0% 97.2% Occupancy (1) 32.0% 28.0% 24.0% +13.2% Blended Cash Rent Spreads for Executed Comparable Leases (2)(3)(4) 20.0% 16.0% 13.8% 13.2% 12.0% 10.1%
Slide 14: Solid Performance With Sustained Occupancy
SECOND QUARTER 2023 Solid Performance With Sustained Occupancy 98.7% 98.8% 97.9% 97.5% 97.5% 97.2% 96.8% 97.1% 97.0% 92.2% 95.3% 94.9% 97.2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q22 2Q23 Represents period-end occupancy for consolidated outlet centers and pro rata share of unconsol
Slide 15: Upcoming Expirations Provide Opportunity
SECOND QUARTER 2023 Upcoming Expirations Provide Opportunity PERCENTAGE OF PERCENTAGE OF ANNUAL BASE RENT TOTAL GLA 2023 10% 2023 10% 2024 21% 2024 21% 2025 18% 2025 18% 2026 14% 2026 14% 2027 12% 2027 11% 2028 11% 2028 12% 2029 4% 2029 3% 2030 4% 2030 4% 2031 1% 2031 2% 2032 4% 2032 4% 1% 1% 2033+
Slide 16: Core Strategies
SECOND QUARTER 2023 Core Strategies 16
Slide 17: Leasing
SECOND QUARTER 2023 STRATEGIC • DISCIPLINED • DATA-DRIVEN Leasing Drive Rents Diversify the Assortment Increase Occupancy • Driving rents with higher rent spreads, strong renewal rates, shifting variable rent to fixed and converting temp tenants to permanent • Introducing non-retail uses including f
Slide 18: Operations
SECOND QUARTER 2023 STRATEGIC • DISCIPLINED • DATA-DRIVEN Operations Drive Operational Efficiencies Grow Ancillary Revenue Expand ESG Initiatives Maximize Asset Value • Decentralized to empower field managers to drive the performance of their asset • Participating in revenue generation ◦ Focus on bu
Slide 19: Marketing
SECOND QUARTER 2023 STRATEGIC • DISCIPLINED • DATA-DRIVEN Marketing Data & Insights Led Digital First Platform Modern Approach to Loyalty ROI-Focused Spend • Optimizing marketing spend with an ROI focus • All-new TangerClub broadens addressable audience with new free offering while subscription unlo
Slide 20: Financial Drivers and External Growth
SECOND QUARTER 2023 • Strong Same Center NOI growth potential ◦ Amplified by growing & new sources of income and significant real estate value creating opportunities STRATEGIC • DISCIPLINED • DATA-DRIVEN • Investment grade, low-leveraged and flexible balance sheet provides Financial Drivers capacity
Slide 21: Strong Balance Sheet
SECOND QUARTER 2023 LIMITED USE OF SECURED FINANCING (1) Strong Balance Sheet 12% $1.6 $2.4 88% BILLION BILLION DEBT EQUITY Square feet encumbered Square feet unencumbered Net Debt of $1.4B 36% $3.8 BILLION TOTAL LIMITED FLOATING RATE EXPOSURE (3) ENTERPRISE VALUE $0.2 64% 6% $0.1B BILLION CASH (2)
Slide 22: Manageable Maturities
SECOND QUARTER 2023 Manageable Maturities Effective Interest Rate (1) 3.4% Years to Maturity (2) 5.2 $404.0 $400.0 $359.3 $351.7 $47.2 $35.5 $0.0 $5.5 $0.0 $0.0 $0.0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Lines of Credit Mortgage Debt Term Loans Bond Debt JV Mortgage Debt (at pro rata sha
Slide 23: Quality Ratios
SECOND QUARTER 2023 Quality Ratios IN COMPLIANCE WITH ALL DEBT COVENANTS Key Bond Covenants Actual Limit Total consolidated debt to adjusted total assets 40% < 60% Total secured debt to adjusted total assets 2% < 40% Total unencumbered assets to unsecured debt 242% > 150% Consolidated income availab
Slide 24: Nashville Development
SECOND QUARTER 2023 MAY 2022 Groundbreaking OCTOBER 27, 2023 Planned Opening 290K SF Approximate Size $143M – $147M Estimated Total Development Cost 7.5% – 8.0% Projected Stabilized Yield 95% Leased 24
Slide 25: ESG at Tanger
SECOND QUARTER 2023 STRATEGIC PILLARS OUR PEOPLE OUR COMMUNITY Creating a Positive Workplace Contributing to Strong, Vibrant Communities We aim to create an engaging, equitable We actively serve our communities through workplace where all people are welcomed, partnerships with nonprofits, community
Slide 26: 2022 Progress Towards Long-Term Sustainability Goals
SECOND QUARTER 2023 ESG AT TANGER 2022 Progress Towards Long-Term Sustainability Goals • Announced our intent to achieve net zero Scope 1 and 2 • Strategically Invested in Sustainability emissions by 2050 ◦ Procured 6.2 MW of photovoltaic panels for four new solar • Signed on to the United Nations G
Slide 27: Earnings and 2023 Guidance
SECOND QUARTER 2023 $ PER SHARE $2.00 $1.83 $1.92 $1.76 $1.85 $1.50 $0.97 $0.90 $0.94 $1.00 $0.77 $0.90 $0.38 $0.45 Earnings $0.50 $0.08 and 2023 $— 2021 (1) 2022 (2) 2023 Guidance 2Q22 YTD (3) 2Q23 YTD (4) Guidance Net Income Core FFO GUIDANCE FOR 2023 Low Range High Range Net income per diluted sh
Slide 28: Non-GAAP Supplemental Measures
SECOND QUARTER 2023 Non-GAAP Supplemental Measures 28
Slide 29: Non-GAAP Reconciliations
SECOND QUARTER 2023 Below is a reconciliation of net income (loss) available to common shareholders to FFO and YEAR ENDED DECEMBER 31, Core FFO available to common shareholders (in thousands, except per share information): 2022 2021 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 81,194 $ 8,314 Noncon
Slide 30: Non-GAAP Reconciliations
SECOND QUARTER 2023 Below is a reconciliation of net income available to common shareholders to FFO available SIX MONTHS ENDED JUNE 30, to common shareholders (in thousands, except per share information): 2023 2022 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 47,287 $ 39,986 Noncontrolling interest
Slide 31: Non-GAAP Reconciliations
SECOND QUARTER 2023 Below is a reconciliation of net income to Portfolio NOI for the consolidated portfolio and YEAR ENDED DECEMBER 31, Same Center NOI for the consolidated portfolio and including unconsolidated joint ventures at pro rata share (in thousands): 2022 2021 % Change NET INCOME $ 85,831
Slide 32: Non-GAAP Reconciliations
SECOND QUARTER 2023 Below is a reconciliation of net income to Portfolio NOI for the consolidated SIX MONTHS ENDED JUNE 30, portfolio and Same Center NOI for the consolidated portfolio and including unconsolidated joint ventures at pro rata share (in thousands): 2023 2022 % Change NET INCOME $ 50,16
Slide 33: Non-GAAP Reconciliations
SECOND QUARTER 2023 SIX MONTHS ENDED JUNE 30, Below is a reconciliation of net income to EBITDAre and Adjusted EBITDAre (in thousands): 2023 2022 NET INCOME $ 50,160 $ 42,281 Adjusted to exclude: Interest expense, net 19,301 22,963 Income tax expense (36) 152 Depreciation and amortization 51,282 52,
Slide 34: Non-GAAP Definitions
SECOND QUARTER 2023 Funds From Operations (“FFO”) is a widely used measure of the based on our FFO or Core FFO, which is described in the section operating performance for real estate companies that supplements below. We believe it is useful for investors to have enhanced net income (loss) determine
Slide 35: Core FFO and Portfolio NOI Definitions
SECOND QUARTER 2023 Core FFO Portfolio Net Operating Income and Same Center Net Operating Core FFO has limitations as an analytical tool. Some of these Income If applicable, we present Core FFO as a supplemental measure of our performance. We define Core FFO as FFO further adjusted to limitations ar
Slide 36: EBITDAre and Adjusted EBITDAre Definitions
SECOND QUARTER 2023 expenses involved in owning and operating real estate assets and EBITDAre and Adjusted EBITDAre EBITDAre and Adjusted EBITDAre have significant limitations as provide a perspective not immediately apparent from net income analytical tools, including: We present Earnings Before In
Slide 37: Notes and Additional Information
SECOND QUARTER 2023 Notes and Additional Information 37
Slide 38: Notes
SECOND QUARTER 2023 Page 4 (1) Includes Tanger's pro rata share of unconsolidated joint ventures (2) Metropolitan Statistical Area as defined by the U.S. Census Bureau; Includes Ottawa, ON center located in a top 5 census metropolitan area as defined by Statistics Canada (3) Number of properties inc
Slide 39: Notes (continued)
Page 27 SECOND QUARTER 2023 (1) Net income available to common shareholders in 2021 was impacted by $47.9 million ($0.47 per share) of losses on the early extinguishment of debt; a non-cash impairment charge of $7.0 million ($0.06 per share) related to the Mashantucket (Foxwoods), Connecticut asset;
Slide 40: Tanger's ESG Approach
SECOND QUARTER 2023 At Tanger, we work to create long-term value for our stakeholders, retail partners and employee team members while we build strong communities and consider the future of our planet. Through our environmental, social, and governance (ESG) practices and programs, we aim to create p
Slide 41: About Tanger Outlets Investor Relations
About Tanger® Outlets Investor Relations Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a leading operator of upscale open-air outlet Doug McDonald centers, fully or partially owns and/or manages a portfolio of 37 centers, including one center SVP, Finance and Capital Markets under development. Ta