Tanger Inc. · NYSE:SKT
Tanger — Q3 2023 Earnings Presentation
42 slides from Tanger's earnings presentation, Nov 7, 2023
Slide 1: Management Presentation
NOVEMBER 6, 2023 Management Presentation
Slide 2: Safe Harbor Statements
THIRD QUARTER 2023 This presentation contains certain forward-looking statements within our dependence on rental income from real property; our the meaning of Section 27A of the Securities Act of 1933, as dependence on the results of operations of our retailers and their amended, and Section 21E of
Slide 3: Table of Contents
THIRD 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 29 Notes and Additional Information 38 3
Slide 4: Tanger at a Glance
THIRD QUARTER 2023 Tanger at a Glance Long-Term Foundation Positioned for Growth • 42-year history and 30 years publicly traded on • Open-air portfolio provides brands and retailers an the NYSE (SKT) attractive and integral sales channel • $2.5B market capitalization (1) • Centers sought out by cons
Slide 5: 37 Well-Positioned Properties
THIRD 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, NOW OPEN STRATEGIC PARTNERSHIP CORPORATE HEADQUARTERS 5
Slide 6: Experienced and Engaged Executive Team and Board
THIRD QUARTER 2023 EXECUTIVE TEAM Stephen Yalof Michael Bilerman Leslie Swanson Jessica Norman Justin Stein Andrew Wingrove Experienced Director, President and Executive Vice Executive Vice Executive Vice Executive Vice Executive Vice Chief Executive Officer President, Chief President, Chief Preside
Slide 7: Our Mission and Vision
THIRD 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
THIRD QUARTER 2023 Productive Sales Model & Clearance Channel Lower Cost of Occupancy THE OUTLET CHANNEL Retailer Value Higher Margins Proposition One of the most profitable channels for retailers and an Lower Customer Acquisition Costs important component of the omnichannel retail strategy Direct T
Slide 9: Consumer Value Proposition
THIRD 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
THIRD QUARTER 2023 Positioned for Growth Strategic, Disciplined & Data-Driven ACTIVE LEASING EFFICIENT OPERATIONS PERFORMANCE MARKETING STRATEGIC FINANCE • Grow Total Rent • Grow Ancillary Revenues • Drive Sales Growth • Prudent Balance Sheet • Increase Occupancy • Drive Operational Efficiencies • P
Slide 11: Strong & Dynamic Tenant Mix
THIRD QUARTER 2023 Strong & 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.” Brands: Todd Kahn, Tapestry President Athleta; Aéropostale; Ann Taylor; Coach; Under Aerie; Calvi
Slide 12: Operating Metrics
THIRD QUARTER 2023 Operating Metrics 12
Slide 13: Operating Metrics
THIRD QUARTER 2023 7 CONSECUTIVE QUARTERS OF Operating Metrics POSITIVE RENT SPREADS (Total Portfolio at Pro Rata Share Except Where Noted) 40.0% 98.0% 36.0% Occupancy (1) 32.0% 28.0% +14.5% Blended Cash Rent Spreads for Executed Comparable Leases (2)(3)(4) 24.0% 20.0% 14.5% 6.5% YOY Change in Same
Slide 14: Solid Performance With Sustained Occupancy
THIRD QUARTER 2023 Solid Performance With Sustained Occupancy 98.7% 98.8% 97.9% 97.5% 97.5% 98.0% 97.2% 96.8% 97.1% 97.0% 96.5% 95.3% 92.2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q22 3Q23 Represents period-end occupancy for consolidated outlet centers and pro rata share of unconsoli
Slide 15: Upcoming Expirations Provide Opportunity
THIRD QUARTER 2023 Upcoming Expirations Provide Opportunity PERCENTAGE OF ANNUAL BASE RENT PERCENTAGE OF TOTAL GLA 2023 5% 2023 6% 2024 21% 2024 21% 2025 18% 2025 19% 2026 15% 2026 15% 2027 13% 2027 11% 2028 13% 2028 13% 2029 4% 2029 4% 2030 4% 2030 4% 2031 1% 2031 2% 2032 4% 2032 4% 2033+ 2% 2033+
Slide 16: Core Strategies
THIRD QUARTER 2023 Core Strategies 16
Slide 17: Leasing
THIRD 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 foo
Slide 18: Operations
THIRD 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 busi
Slide 19: Marketing
THIRD 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 unlock
Slide 20: Financial Drivers and External Growth
THIRD 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 capacity to grow Financial D
Slide 21: Strong Balance Sheet
THIRD QUARTER 2023 LIMITED USE OF SECURED FINANCING (1) Strong Balance Sheet 14% $0.2B $1.4B 86% $1.6 $2.5 BILLION BILLION DEBT EQUITY Secured financing Unsecured financing Net Debt of $1.4B 36% $3.9 BILLION TOTAL (1) LIMITED FLOATING RATE EXPOSURE ENTERPRISE VALUE $0.2 64% 6% $0.1B BILLION CASH (2)
Slide 22: Manageable Debt Maturities
THIRD QUARTER 2023 Manageable Debt Maturities $403.9 $400.0 Effective Interest Rate (1) 3.4% $359.0 $351.7 Years to Maturity (2) 5.0 Term Loan Interest Rate Strategy*: Company Notional Effective Date Maturity Date Bank Pay Rate Fixed Pay Amount Rate Interest rate swaps: Current February 1, 2024 $300
Slide 23: Solid Debt Ratios
THIRD QUARTER 2023 Solid Debt 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 244% > 150% Consolidated income avail
Slide 24: Key Facts: Tanger Outlets Nashville
THIRD QUARTER 2023 KEY FACTS Opened October 27, 2023 Growing Nashville Market One of the fastest growing metropolitan areas in the U.S. Dynamic Retail Mix 60 stores including acclaimed food & beverage and new to portfolio brands Transformational Design Incorporating "The Green," a central community
Slide 25: Grand Opening Weekend October 2023
GRAND OPENING WEEKEND OCTOBER 2023 25
Slide 26: ESG at Tanger
THIRD QUARTER 2023 STRATEGIC PILLARS OUR PEOPLE OUR COMMUNITY Creating a Positive Workplace Contributing to Strong, Vibrant Communities We aim to create an engaging, equitable workplace where all people are welcomed, We actively serve our communities through valued, and have opportunities to thrive
Slide 27: Progress Towards Long-Term Sustainability Goals
THIRD QUARTER 2023 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 Global Compact system
Slide 28: Earnings & 2023 Guidance
THIRD QUARTER 2023 $ PER SHARE $2.00 $1.94 $1.76 $1.83 $1.90 $1.50 $1.37 $1.44 $0.97 $1.00 $0.77 $0.70 $0.93 $0.60 $0.50 Earnings & $0.08 2023 Guidance $— 2021 (1) 2022 (2) 2023 Guidance 3Q22 YTD (3) 3Q23 YTD (4) Net Income Core FFO Low High GUIDANCE FOR 2023 Range Range Net income per diluted share
Slide 29: Non-GAAP Supplemental Measures
THIRD QUARTER 2023 Non-GAAP Supplemental Measures 29
Slide 30: Non-GAAP Reconciliations
THIRD 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 Noncont
Slide 31: Non-GAAP Reconciliations
THIRD QUARTER 2023 Below is a reconciliation of net income available to common shareholders to FFO and Core NINE MONTHS ENDED SEPTEMBER 30, FFO available to common shareholders (in thousands, except per share information): 2023 2022 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 74,513 $ 63,030 Nonco
Slide 32: Non-GAAP Reconciliations
THIRD QUARTER 2023 Below is a reconciliation of net income to Portfolio NOI for the consolidated YEAR ENDED DECEMBER 31, portfolio and 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 33: Non-GAAP Reconciliations
THIRD QUARTER 2023 Below is a reconciliation of net income to Portfolio NOI for the consolidated NINE MONTHS ENDED SEPTEMBER 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 $
Slide 34: Non-GAAP Reconciliations
THIRD QUARTER 2023 NINE MONTHS ENDED SEPTEMBER 30, Below is a reconciliation of net income to EBITDAre and Adjusted EBITDAre (in thousands): 2023 2022 NET INCOME $ 79,037 $ 66,626 Adjusted to exclude: Interest expense, net 28,584 33,260 Income tax expense (benefit) (32) 186 Depreciation and amortiza
Slide 35: Non-GAAP Definitions
THIRD QUARTER 2023 Funds From Operations (“FFO”) is a widely used measure of the which is described in the section below. We believe it is useful operating performance for real estate companies that for investors to have enhanced transparency into how we supplements net income (loss) determined in a
Slide 36: Non-GAAP Definitions: Core FFO and NOI
THIRD QUARTER 2023 Core FFO Portfolio Net Operating Income and Same Center Net Core FFO has limitations as an analytical tool. Some of these Operating Income If applicable, we present Core FFO as a supplemental measure of our performance. We define Core FFO as FFO further limitations are: We present
Slide 37: Non-GAAP Definitions: EBITDAre
THIRD QUARTER 2023 revenues and expenses involved in owning and operating real EBITDAre and Adjusted EBITDAre EBITDAre and Adjusted EBITDAre have significant limitations as estate assets and provide a perspective not immediately analytical tools, including: We present Earnings Before Interest, Taxes
Slide 38: Notes and Additional Information
THIRD QUARTER 2023 Notes and Additional Information 38
Slide 39: Notes
THIRD 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 Page 13 (1) As of September 3
Slide 40: Notes (continued)
Page 28 THIRD 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 41: Tanger's ESG Approach
THIRD 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 po
Slide 42: About Tanger Investor Relations
About Tanger® Investor Relations Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a leading operator of upscale open-air Doug McDonald outlet centers, fully or partially owns and/or manages a portfolio of 37 centers, including SVP, Finance and Capital Markets the newly opened Tanger Outlets Nashvill