Tanger Inc. · NYSE:SKT
Tanger — Q1 2024 Earnings Presentation
54 slides from Tanger's earnings presentation, May 1, 2024
Slide 1: Management Presentation
APRIL 30, 2024 Management Presentation
Slide 2: Safe Harbor Statements
FIRST QUARTER 2024 Certain statements made in this presentation contain forward-looking or mitigate its impact); the fact that certain of our properties are subject to statements within the meaning of Section 27A of the Securities Act of 1933, ownership interests held by third parties, whose interes
Slide 3: Table of Contents
FIRST QUARTER 2024 Our Mission and Vision 4 Tanger at a Glance 5 Foundations of Corporate Growth 6 Table of Contents Our Portfolio 8 The Outlet Channel 9 Operating Metrics 13 Core Strategies 16 External Growth 24 Our Executive Team and Board 38 Non-GAAP Supplemental Measures 41 Notes and Additional
Slide 4: Our Mission and Vision
FIRST QUARTER 2024 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 4
Slide 5: Tanger at a Glance
FIRST QUARTER 2024 Tanger at a Glance Long-Term Foundation Positioned for Growth • 43-year history and 31 years publicly traded on the • Open-air portfolio provides brands and retailers an NYSE (SKT) attractive and integral sales channel • $3.4B market capitalization (1) • Centers sought out by cons
Slide 6: Foundations of Tanger's Corporate Growth
FIRST QUARTER 2024 Foundations of Tanger’s Corporate Growth Internal Growth + Real Estate Intensification + External Growth Deliver strong Enhance and Grow Tanger through Same Center create value from selective and disciplined NOI growth existing real estate acquisition and asset base development Al
Slide 7: Key Initiatives Supporting Growth
FIRST QUARTER 2024 Key Initiatives Supporting Growth Strategic, Disciplined & Data-Driven ACTIVE LEASING EFFICIENT OPERATIONS TARGETED MARKETING STRATEGIC FINANCE • Grow Total Rent - Base Rent • Grow Ancillary Revenues • Drive Sales Growth • Prudent Balance Sheet and Expense Recoveries • Drive Opera
Slide 8: 40 Well-Positioned Properties
FIRST QUARTER 2024 40 Well-Positioned Properties Open-air portfolio with locations in high-frequency tourist destinations and suburbs of vibrant and fast-growing markets Consolidated or Joint Venture Outlet Center New Acquisition, Bridge Street Town Centre New Acquisition, Tanger Outlets Asheville N
Slide 9: Retailer Value Proposition
FIRST QUARTER 2024 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 10: Retailers' Outlet Strategy
FIRST QUARTER 2024 Clear excess inventory and maintain brand integrity THE OUTLET CHANNEL Use excess materials with made-for-outlet inventory Retailers’ Outlet Strategy Hybrid and full price offerings Retailers use the channel in a variety of ways that best align with their business model "Try befor
Slide 11: Consumer Value Proposition
FIRST QUARTER 2024 Brand Names at Consistent Value THE OUTLET CHANNEL Consumer Value Social, Experiential Shopping Proposition Tactile Interaction with Products Instant Gratification of In-Person Shopping 11
Slide 12: Strong, Dynamic & Diverse Tenant Mix
FIRST QUARTER 2024 Strong, Dynamic & Diverse Tenant Mix Ann Taylor; Aéropostale; Banter by Columbia 66.6% Top 10 Athleta; Chicos; Boardriders Coach; Under Armour; Aerie; Calvin Klein; Converse; Piercing Banana Kate Spade Under Armour American Eagle Tommy Nike Pagoda; Tenant Republic; Lane Bryant; Ou
Slide 13: Operating Metrics
FIRST QUARTER 2024 9 CONSECUTIVE QUARTERS OF Operating Metrics POSITIVE RENT SPREADS (Total Portfolio at Pro Rata Share Except Where Noted) 40.0% 96.5% 36.0% Occupancy (1) 32.0% 28.0% +12.9% Blended Cash Rent Spreads for Executed Comparable Leases (2)(3)(4) 24.0% 20.0% 14.5% 5.2% YOY Change in Same
Slide 14: Solid Performance With Sustained Occupancy
FIRST QUARTER 2024 Solid Performance With Sustained Occupancy 98.7% 98.8% 97.9% 97.5% 97.5% 97.2% 96.8% 97.1% 97.0% 97.3% 96.5% 96.5% 95.3% 92.2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q23 1Q24 Represents period-end occupancy for stabilized consolidated centers and pro rata sha
Slide 15: Upcoming Expirations Provide Opportunity
FIRST QUARTER 2024 Upcoming Expirations Provide Opportunity PERCENTAGE OF ANNUAL BASE RENT PERCENTAGE OF TOTAL GLA 2024 16% 2024 17% 2025 19% 2025 20% 2026 16% 2026 16% 2027 14% 2027 14% 2028 14% 2028 14% 2029 5% 2029 4% 2030 4% 2030 4% 2031 2% 2031 2% 2032 4% 2032 4% 2033 3% 2033 3% 2034+ 3% 2034+
Slide 16: Core Strategies
FIRST QUARTER 2024 Core Strategies 16
Slide 17: Leasing
FIRST QUARTER 2024 STRATEGIC, DISCIPLINED & DATA-DRIVEN Leasing Drive Rents Diversify the Assortment Increase Occupancy Activate Peripheral Land • Driving rents with higher rent spreads, strong renewal rates, shifting variable rent to fixed and converting temp tenants to permanent • Introducing non-
Slide 18: Operations
FIRST QUARTER 2024 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
FIRST QUARTER 2024 STRATEGIC, DISCIPLINED & DATA-DRIVEN Marketing Data & Insights Led Digital First Platform Modern Approach to Loyalty ROI-Focused Spend • Leveraging data to unlock greater value for our guests and retail partners to drive topline sales • Connecting guests to the brands and value th
Slide 20: Financial Drivers and External Growth
FIRST QUARTER 2024 • Strong Same Center NOI growth potential ◦ Amplified by growing & new sources of income and significant real estate value creating opportunities • Investment grade, low-leveraged and flexible balance STRATEGIC, DISCIPLINED & DATA-DRIVEN sheet provides capacity to grow ◦ Limited f
Slide 21: Strong Balance Sheet
FIRST QUARTER 2024 LIMITED USE OF SECURED FINANCING (1) Strong Balance Sheet 14% $0.2B $1.4B 86% $1.6 Secured financing Unsecured financing BILLION DEBT $5.0 32% BILLION TOTAL (1) LIMITED FLOATING RATE EXPOSURE ENTERPRISE VALUE $3.4 BILLION 7% $0.1B 68% EQUITY $1.5B 93% (1) CAPITAL STRUCTURE (% of T
Slide 22: Manageable Debt Maturities
FIRST QUARTER 2024 Manageable Debt Maturities $404.3 $403.5 $400.0 $351.7 Effective Interest Rate (1) 4.1% Years to Maturity (2) 4.4 • Amended, Increased and Extended Unsecured Lines of Credit in April 2024 ◦ Borrowing capacity increased by $100 million to $620 million $46.0 $46.6 $35.5 ◦ Term exten
Slide 23: Solid Debt Ratios
FIRST QUARTER 2024 Solid Debt Ratios IN COMPLIANCE WITH ALL DEBT COVENANTS Key Bond Covenants Actual Limit Total consolidated debt to adjusted total assets 39% < 60% Total secured debt to adjusted total assets 2% < 40% Total unencumbered assets to unsecured debt 246% > 150% Consolidated income avail
Slide 24: External Growth
FIRST QUARTER 2024 External Growth 24
Slide 25: External Growth Initiatives
FIRST QUARTER 2024 External Growth Initiatives 3-Pronged Growth Strategy Recent Portfolio Expansions 1. Outlets: Acquisitions, Development, Joint Ventures, Strategic Management Agreements (management) (development) (acquisition, previously Asheville Outlets) 2. Adjacent to Tanger’s Outlets: Retail a
Slide 26: Tanger's Newest Markets
TANGER'S NEWEST MARKETS Nashville, TN Asheville, NC Huntsville, AL Tanger's Bridge Street Town Centre 26
Slide 27: Nashville, TN Key Facts
FIRST QUARTER 2024 KEY FACTS Opened October 27, 2023 Growing Nashville Market One of the fastest growing metropolitan areas in the U.S. Dynamic Retail Mix I-24 60 stores including acclaimed food and Downtown Nashville beverage and new to portfolio brands NASHVILLE, TN Transformational Design Incorpo
Slide 28: Nashville Rapidly Growing Market
Rapidly Growing Market Nashville, TN 2.1M Population +29% Growth (2010-2023) #2 Fastest Growing MSA in the U.S. among markets STRONG MARKET with at least 2M residents DEMOGRAPHICS (Nashville MSA) Record Breaking Tourism to Nashville-Davidson County in 2022 2.1M 14.9M visitors, +17% YoY $9.2B total v
Slide 29: Grand Opening Weekend October 2023
GRAND OPENING WEEKEND OCTOBER 2023 29
Slide 30: Asheville, NC Key Facts
KEY FACTS Acquired November 13, 2023 for $70M All-cash, off-market transaction Popular and Growing Asheville Market Dynamic market with strong tourism and world renowned food and music scene Center to Benefit from Tanger Platform and Geographical Footprint 13 Tanger Outlet centers in nearby states w
Slide 31: Asheville, NC Market Insights
Asheville, NC TRADE AREA Market Insights STRONG TRADE AREA DEMOGRAPHICS Thriving Tourism Industry Attracts more than 12.5M annual visitors spending $2.9B (2022) 2.2M Asheville, NC MSA Vibrant Culture & Food Scene 2023 Population Located in the heart of the Blue Ridge I-40 Mountains +2.2% Home to Bil
Slide 32: Asheville, NC
Blue Ridge Mountains Aerial View of Downtown Asheville Tanger Asheville Rendering of $400M Airport Expansion Credit: Gresham Smith The Omni Grove Park Inn ASHEVILLE, NC Biltmore Estate River Arts District $500M+ I-26 Expansion 32
Slide 33: Huntsville, AL Key Facts
KEY FACTS Acquired November 30, 2023 for $193.5M Funded using cash on hand and available liquidity First Acquisition of Open-Air Lifestyle Center Dominant shopping destination in the region An Attractive and Growing Market A tech and military hub experiencing outsized investment, employment, residen
Slide 34: Largest City in Alabama: Huntsville
Largest City in Alabama Huntsville, AL • 10+ years of rapid population growth, ranking in the top places to live in the U.S. for 3 years STRONG DEMOGRAPHICS • 3.9M visitors creating a $2.1B economic impact • 135K+ employees within 5 miles of the center 518K The Rocket City Important location for spa
Slide 35: Bridge Street Town Centre
BRIDGE STREET TOWN CENTRE A TANGER PROPERTY 35 35
Slide 36: Huntsville, Alabama "The Rocket City"
HUNTSVILLE, ALABAMA "THE ROCKET CITY" Government, Defense and Advanced Tech Hub Manufacturing Hub Home to 80+ federal organizations and contractors, and 300+ companies, representing 70k+ employees $2.3B Automotive Manufacturing Facility Redstone Arsenal (38K acres): • Dominant federal R&D, testing,
Slide 37: Investment Targets Bridge Street Town Centre
BRIDGE STREET TOWN CENTRE BSTC Acquisition Well Aligned with External Growth Strategy and Core Competencies to Add Value • Leveraging strength of retail operating, leasing, and marketing platform • Team of professionals with experience across the retail spectrum • Dynamic and diversified tenant rost
Slide 38: Experienced and Engaged Executive Team and Board
FIRST QUARTER 2024 EXECUTIVE TEAM Stephen Yalof Michael Bilerman Leslie Swanson Jessica Norman Justin Stein Experienced Director, President and Executive Vice Executive Vice Executive Vice Executive Vice Chief Executive Officer President, Chief President, Chief President, General President, Leasing
Slide 39: ESG at Tanger
FIRST QUARTER 2024 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 v
Slide 40: Earnings & 2024 Guidance
FIRST QUARTER 2024 $ PER SHARE $2.11 $2.00 $1.96 $1.83 $2.03 $1.50 $1.00 $0.92 $0.92 $0.77 $0.84 $0.52 $0.46 Earnings & $0.50 $0.22 $0.20 2024 Guidance $— 2022 (1) 2023 (2) 2024 Guidance 1Q23 (2) 1Q24 (3) Net Income Core FFO Low High GUIDANCE FOR 2024 Range Range Net income per diluted share $0.84 $
Slide 41: Non-GAAP Supplemental Measures
FIRST QUARTER 2024 Non-GAAP Supplemental Measures 41
Slide 42: Non-GAAP Reconciliations
FIRST QUARTER 2024 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): 2023 2022 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 97,965 $ 81,194 Noncon
Slide 43: Non-GAAP Reconciliations
FIRST QUARTER 2024 Below is a reconciliation of net income available to common shareholders to FFO and Core THREE MONTHS ENDED MARCH 31, FFO available to common shareholders (in thousands, except per share information): 2024 2023 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 22,182 $ 23,342 Noncontr
Slide 44: Non-GAAP Reconciliations
FIRST QUARTER 2024 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): 2023 2022 % Change NET INCOME $ 103,882
Slide 45: Non-GAAP Reconciliations
FIRST QUARTER 2024 Below is a reconciliation of net income to Portfolio NOI for the consolidated THREE MONTHS ENDED MARCH 31, portfolio and Same Center NOI for the consolidated portfolio and including unconsolidated joint ventures at pro rata share (in thousands): 2024 2023 % Change NET INCOME $ 23,
Slide 46: Non-GAAP Reconciliations
FIRST QUARTER 2024 THREE MONTHS ENDED MARCH 31, Below is a reconciliation of net income to EBITDAre and Adjusted EBITDAre (in thousands): 2024 2023 NET INCOME $ 23,306 $ 24,860 Adjusted to exclude: Interest expense, net 14,151 9,779 Income tax expense (benefit) (335) (200) Depreciation and amortizat
Slide 47: Non-GAAP Definitions
FIRST QUARTER 2024 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 48: Core FFO and Portfolio NOI Definitions
FIRST QUARTER 2024 Core FFO Portfolio Net Operating Income and Same Center Net Core FFO has limitations as an analytical tool. Some of these Operating Income We present Core Funds From Operations ("Core FFO") as a supplemental measure of our performance. We define Core FFO limitations are: We presen
Slide 49: EBITDAre and Same Center NOI Definitions
FIRST QUARTER 2024 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 50: Notes and Additional Information
FIRST QUARTER 2024 Notes and Additional Information 50
Slide 51: Notes
FIRST QUARTER 2024 Page 5 (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 March 31, 2
Slide 52: Notes (continued)
FIRST QUARTER 2024 Page 40 (1) Net income available to common shareholders in 2022 was impacted by a $0.03 per share gain on the sale of a non-core outlet center located in Blowing Rock, North Carolina; a $0.02 per share gain on sale of the corporate aircraft; and general and administrative expense
Slide 53: Tanger's ESG Approach
FIRST QUARTER 2024 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 54: About
About Tanger Inc. (NYSE: SKT) is a leading owner and operator of outlet and open-air retail shopping destinations, with over 43 years of expertise in the retail and outlet shopping industries. Tanger’s portfolio of 38 outlet centers, one adjacent managed center and one open-air lifestyle center comp