EX-99.2 3 skt8kex992june302014.htm EXHIBIT SKT 8K EX 99.2 June 30 2014


Exhibit 99.2
Tanger Factory Outlet Centers, Inc.
  
Supplemental Operating and Financial Data
June 30, 2014


1                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Notice
  
  
For a more detailed discussion of the factors that affect our operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
  
This Supplemental Operating and Financial Data is not an offer to sell or a solicitation to buy any securities of the Company. Any offers to sell or solicitations to buy any securities of the Company shall be made only by means of a prospectus.


2                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Table of Contents
Section
 
 
 
Portfolio Data:
 
 
 
Geographic Diversification
Property Summary - Occupancy at End of Each Period Shown
Portfolio Occupancy at the End of Each Period
Major Tenants
Lease Expirations as of June 30, 2014
Leasing Activity
 
 
 
 
Financial Data:
 
 
 
Consolidated Balance Sheets
Consolidated Statements of Operations
FFO and FAD Analysis
Unconsolidated Joint Venture Information
Pro Rata Balance Sheet
Pro Rata Statement of Operations
Development Summary
Debt Outstanding Summary
Future Scheduled Principal Payments
Senior Unsecured Notes Financial Covenants
 
 
Investor Information


3                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Geographic Diversification

Consolidated Properties
As of June 30, 2014
State
# of Centers
 
GLA
 
% of GLA
South Carolina
5

 
1,576,888

 
14
%
New York
2

 
1,478,808

 
13
%
Pennsylvania
3

 
874,460

 
8
%
Georgia
2

 
691,582

 
6
%
Texas
2

 
619,621

 
5
%
Delaware
1

 
564,593

 
5
%
Alabama
1

 
557,014

 
5
%
North Carolina
3

 
505,225

 
4
%
New Jersey
1

 
489,762

 
4
%
Tennessee
1

 
438,335

 
4
%
Michigan
2

 
437,222

 
4
%
Ohio
1

 
411,776

 
4
%
Louisiana
1

 
318,666

 
3
%
Missouri
1

 
302,922

 
3
%
Utah
1

 
298,391

 
2
%
Connecticut
1

 
289,898

 
2
%
Iowa
1

 
277,230

 
2
%
Oregon
1

 
270,212

 
2
%
Illinois
1

 
250,439

 
2
%
New Hampshire
1

 
245,698

 
2
%
Florida
1

 
198,877

 
2
%
Maryland
1

 
198,840

 
2
%
California
1

 
171,300

 
1
%
Maine
2

 
76,356

 
1
%
Total
37

 
11,544,115

 
100
%
Unconsolidated Joint Venture Properties
 
# of Centers
 
GLA
 
Ownership %
Texas City, TX
1

 
352,705

 
50.00
%
National Harbor, MD
1

 
338,786

 
50.00
%
Glendale, AZ
1

 
331,744

 
58.00
%
Wisconsin Dells, WI
1

 
265,086

 
50.00
%
Bromont, QC
1

 
161,449

 
50.00
%
Cookstown, ON
1

 
155,302

 
50.00
%
Saint-Sauveur, QC
1

 
115,697

 
50.00
%
Total
7

 
1,720,769

 
 

4                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Property Summary - Occupancy at End of Each Period Shown

Consolidated properties
 
 
 
 
 
 
 
 
 
 
Location
Total GLA
6/30/14
 
% Occupied
6/30/14
 
% Occupied
3/31/14
 
% Occupied
12/31/13
 
% Occupied
9/30/13
 
% Occupied
6/30/13
Deer Park, NY
749,074

 
94
%
 
92
%
 
95
%
 
95
%
 
N/A

Riverhead, NY
729,734

 
99
%
 
98
%
 
100
%
 
100
%
 
99
%
Rehoboth Beach, DE
564,593

 
100
%
 
98
%
 
100
%
 
100
%
 
97
%
Foley, AL
557,014

 
98
%
 
96
%
 
97
%
 
98
%
 
95
%
Atlantic City, NJ
489,762

 
93
%
 
93
%
 
96
%
 
95
%
 
94
%
San Marcos, TX
441,821

 
100
%
 
100
%
 
100
%
 
99
%
 
99
%
Sevierville, TN
438,335

 
100
%
 
99
%
 
99
%
 
99
%
 
99
%
Myrtle Beach Hwy 501, SC
425,247

 
98
%
 
98
%
 
99
%
 
100
%
 
100
%
Jeffersonville, OH
411,776

 
97
%
 
95
%
 
100
%
 
100
%
 
100
%
Myrtle Beach Hwy 17, SC
402,791

 
100
%
 
99
%
 
100
%
 
99
%
 
99
%
Pittsburgh, PA
372,958

 
100
%
 
96
%
 
100
%
 
100
%
 
100
%
Commerce II, GA
370,512

 
100
%
 
94
%
 
99
%
 
99
%
 
99
%
Charleston, SC
365,107

 
99
%
 
98
%
 
100
%
 
100
%
 
98
%
Howell, MI
324,652

 
98
%
 
98
%
 
99
%
 
99
%
 
100
%
Locust Grove, GA
321,070

 
99
%
 
99
%
 
100
%
 
99
%
 
100
%
Mebane, NC
318,910

 
100
%
 
99
%
 
100
%
 
100
%
 
100
%
Gonzales, LA
318,666

 
97
%
 
98
%
 
100
%
 
100
%
 
99
%
Branson, MO
302,922

 
100
%
 
99
%
 
100
%
 
100
%
 
100
%
Park City, UT
298,391

 
99
%
 
97
%
 
100
%
 
99
%
 
99
%
Westbrook, CT
289,898

 
97
%
 
99
%
 
100
%
 
99
%
 
98
%
Williamsburg, IA
277,230

 
100
%
 
100
%
 
100
%
 
99
%
 
99
%
Lincoln City, OR
270,212

 
100
%
 
99
%
 
100
%
 
99
%
 
98
%
Lancaster, PA
254,002

 
100
%
 
99
%
 
100
%
 
100
%
 
100
%
Tuscola, IL
250,439

 
90
%
 
90
%
 
92
%
 
95
%
 
95
%
Hershey, PA
247,500

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
Tilton, NH
245,698

 
96
%
 
98
%
 
100
%
 
100
%
 
100
%
Hilton Head II, SC
206,544

 
100
%
 
97
%
 
100
%
 
100
%
 
98
%
Fort Myers, FL
198,877

 
90
%
 
93
%
 
94
%
 
91
%
 
88
%
Ocean City, MD
198,840

 
99
%
 
97
%
 
100
%
 
100
%
 
97
%
Terrell, TX
177,800

 
93
%
 
97
%
 
99
%
 
99
%
 
97
%
Hilton Head I, SC
177,199

 
99
%
 
98
%
 
98
%
 
99
%
 
100
%
Barstow, CA
171,300

 
100
%
 
100
%
 
100
%
 
100
%
 
95
%
West Branch, MI
112,570

 
94
%
 
98
%
 
100
%
 
98
%
 
98
%
Blowing Rock, NC
104,154

 
100
%
 
100
%
 
100
%
 
100
%
 
99
%
Nags Head, NC
82,161

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
Kittery I, ME
51,737

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
Kittery II, ME
24,619

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
Total
11,544,115

 
98
%
 
97
%
 
99
%
 
99
%
 
98
%




5                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Unconsolidated joint venture properties
 
 
 
 
 
 
 
 
 
 
Location
Total GLA
6/30/14
 
% Occupied
6/30/14
 
% Occupied
3/31/14
 
% Occupied
12/31/13
 
% Occupied
9/30/13
 
% Occupied
6/30/13
Deer Park, NY (1)
749,074

 
N/A

 
N/A

 
N/A

 
N/A

 
94
%
Texas City, TX
352,705

 
99
%
 
99
%
 
100
%
 
100
%
 
97
%
National Harbor, MD
338,786

 
97
%
 
97
%
 
99
%
 
N/A

 
N/A

Glendale, AZ
331,744

 
99
%
 
99
%
 
100
%
 
100
%
 
97
%
Wisconsin Dells, WI
265,086

 
100
%
 
97
%
 
100
%
 
100
%
 
100
%
Bromont, QC
161,449

 
81
%
 
81
%
 
84
%
 
93
%
 
92
%
Cookstown, ON
155,302

 
98
%
 
98
%
 
100
%
 
95
%
 
99
%
Saint-Sauveur, QC
115,697

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
(1)
The Company acquired a controlling interest in the Deer Park, NY center on August 30, 2013. The center is now reported above in the section labeled consolidated properties.





6                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014



(1)
Excludes unconsolidated outlet centers. See table on page 4.




7                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Major Tenants (1) 
Ten Largest Tenants as of June 30, 2014
Tenant
# of
Stores

 
GLA

 
% of
Total GLA

The Gap, Inc.
84

 
903,879

 
7.8
%
Dress Barn, Inc.
89

 
517,352

 
4.5
%
Phillips-Van Heusen
94

 
471,376

 
4.1
%
Nike
37

 
392,570

 
3.4
%
VF Outlet, Inc.
45

 
392,278

 
3.4
%
G-III Apparel
68

 
340,397

 
2.9
%
Ann Taylor
49

 
334,229

 
2.9
%
Polo Ralph Lauren
30

 
308,549

 
2.7
%
Adidas
42

 
291,889

 
2.5
%
Carter's
61

 
286,554

 
2.5
%
Total of All Listed Above
599

 
4,239,073

 
36.7
%
(1)
Excludes unconsolidated outlet centers. See table on page 4.





8                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Lease Expirations as of June 30, 2014


(1)
Excludes unconsolidated outlet centers. See table on page 4.

9                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Leasing Activity (1) 
 
3/31/2014
 
6/30/2014
 
9/30/2014
 
12/31/2014
 
Year to Date
 
Prior
Year to
Date
Re-tenanted Space:
 
 
 

 
 
 
 
 
 

 
 

Number of leases
75

 
36

 

 

 
111

 
118

Gross leasable area
272,801

 
112,392

 

 

 
385,193

 
385,793

New initial base rent per square foot
$
29.43

 
$
28.84

 

 

 
$
29.26

 
$
26.56

Prior expiring base rent per square foot
$
23.96

 
$
23.92

 

 

 
$
23.95

 
$
22.86

Percent increase
22.8
%
 
20.6
%
 

 

 
22.2
%
 
16.2
%
 
 
 
 
 
 
 
 
 
 
 
 
New straight line base rent per square foot
$
32.14

 
$
32.21

 

 

 
$
32.16

 
$
29.28

Prior straight line base rent per square foot
$
23.66

 
$
23.74

 

 

 
$
23.68

 
$
22.03

Percent increase
35.9
%
 
35.8
%
 

 

 
35.8
%
 
32.9
%
 
 
 
 
 
 
 
 
 
 
 
 
Renewed Space:
 
 
 
 
 
 
 
 
 
 
 
Number of leases
177

 
32

 

 

 
209

 
263

Gross leasable area
848,238

 
162,316

 

 

 
1,010,554

 
1,288,451

New initial base rent per square foot
$
22.21

 
$
20.73

 

 

 
$
21.97

 
$
22.31

Prior expiring base rent per square foot
$
20.11

 
$
19.18

 

 

 
$
19.96

 
$
19.93

Percent increase
10.5
%
 
8.1
%
 

 

 
10.1
%
 
11.9
%
 
 
 
 
 
 
 
 
 
 
 
 
New straight line base rent per square foot
$
23.21

 
$
21.38

 

 

 
$
22.92

 
$
23.12

Prior straight line base rent per square foot
$
19.62

 
$
19.55

 

 

 
$
19.61

 
$
19.51

Percent increase
18.3
%
 
9.3
%
 

 

 
16.9
%
 
18.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Total Re-tenanted and Renewed Space:
 
 
 
 
 
 
 
 
 
 
 
Number of leases
252

 
68

 

 

 
320

 
381

Gross leasable area
1,121,039

 
274,708

 

 

 
1,395,747

 
1,674,244

New initial base rent per square foot
$
23.97

 
$
24.05

 

 

 
$
23.98

 
$
23.29

Prior expiring base rent per square foot
$
21.05

 
$
21.12

 

 

 
$
21.06

 
$
20.61

Percent increase
13.9
%
 
13.9
%
 

 

 
13.9
%
 
13.0
%
 
 
 
 
 
 
 
 
 
 
 
 
New straight line base rent per square foot
$
25.38

 
$
25.81

 

 

 
$
25.47

 
$
24.54

Prior straight line base rent per square foot
$
20.60

 
$
21.27

 

 

 
$
20.73

 
$
20.09

Percent increase
23.2
%
 
21.3
%
 

 

 
22.9
%
 
22.1
%
(1)
Excludes unconsolidated outlet centers. See table on page 4.

10                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Consolidated Balance Sheets (dollars in thousands)
 
6/30/2014
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
ASSETS
 
 
 
 
 
 
 
 
 
Rental property
 
 
 
 
 
 
 
 
 
Land
$
230,415

 
$
230,415

 
$
230,415

 
$
230,417

 
$
148,003

Buildings, improvements and fixtures
2,029,321

 
2,013,520

 
2,009,971

 
2,004,882

 
1,821,404

Construction in progress
37,553

 
20,848

 
9,433

 
4,375

 
2,531

 
2,297,289

 
2,264,783

 
2,249,819

 
2,239,674

 
1,971,938

Accumulated depreciation
(691,339
)
 
(671,807
)
 
(654,631
)
 
(636,035
)
 
(618,644
)
Total rental property, net
1,605,950

 
1,592,976

 
1,595,188

 
1,603,639

 
1,353,294

Cash and cash equivalents
13,240

 
16,906

 
15,241

 
10,482

 
5,450

Investments in unconsolidated joint ventures
210,131

 
171,040

 
140,214

 
136,922

 
162,094

Deferred lease costs and other intangibles, net
151,738

 
157,627

 
163,581

 
171,702

 
98,993

Deferred debt origination costs, net
9,652

 
10,276

 
10,818

 
7,275

 
7,921

Prepaids and other assets
77,905

 
81,068

 
81,414

 
71,943

 
69,205

Total assets
$
2,068,616

 
$
2,029,893

 
$
2,006,456

 
$
2,001,963

 
$
1,696,957

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
Senior, unsecured notes, net of discounts
$
794,567

 
$
794,407

 
$
794,248

 
$
548,247

 
$
548,174

Unsecured term loans, net of discounts
267,180

 
267,141

 
267,104

 
267,065

 
259,528

Mortgages payable, including premiums
248,336

 
249,418

 
250,497

 
251,533

 
104,237

Unsecured lines of credit
91,200

 
46,900

 
16,200

 
259,000

 
213,100

Total debt
1,401,283

 
1,357,866

 
1,328,049

 
1,325,845

 
1,125,039

Construction trade payables
15,352

 
13,471

 
9,776

 
5,272

 
5,595

Accounts payable and accruals
39,411

 
46,401

 
49,686

 
48,400

 
34,806

Deferred financing obligation
28,388

 
28,388

 
28,388

 
28,388

 
—

Other liabilities
30,024

 
31,942

 
32,962

 
33,101

 
21,223

Total liabilities
1,514,458

 
1,478,068

 
1,448,861

 
1,441,006

 
1,186,663

Commitments and contingencies
—

 
—

 
—

 
—

 
—

Equity
 
 
 
 
 
 
 
 
 
Tanger Factory Outlet Centers, Inc.
 
 
 
 
 
 
 
 
 
Common shares
959

 
958

 
945

 
945

 
944

Paid in capital
797,286

 
793,059

 
788,984

 
785,515

 
771,265

Accumulated distributions in excess of net income
(276,224
)
 
(272,085
)
 
(265,242
)
 
(262,173
)
 
(294,237
)
Accumulated other comprehensive income
(3,265
)
 
(5,515
)
 
(2,428
)
 
1,179

 
1,343

  Equity attributable to Tanger Factory Outlet
  Centers, Inc.
518,756

 
516,417

 
522,259

 
525,466

 
479,315

Equity attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
Noncontrolling interests in Operating Partnership
27,602

 
27,606

 
28,432

 
28,615

 
24,100

Noncontrolling interest in other consolidated partnerships
7,800

 
7,802

 
6,904

 
6,876

 
6,879

Total equity
554,158

 
551,825

 
557,595

 
560,957

 
510,294

Total liabilities and equity
$
2,068,616

 
$
2,029,893

 
$
2,006,456

 
$
2,001,963

 
$
1,696,957


11                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Consolidated Statements of Operations (dollars and shares in thousands)
 
 
 
Three Months Ended
 
YTD
 
6/30/14
 
3/31/14
 
12/31/13
 
9/30/13
 
6/30/13
 
 
6/30/14
 
6/30/13
REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base rentals
$
68,160

 
$
66,976

 
$
68,811

 
$
64,301

 
$
61,046

 
 
$
135,136

 
$
120,290

Percentage rentals
1,915

 
2,083

 
4,295

 
3,084

 
1,855

 
 
3,998

 
3,872

Expense reimbursements
29,452

 
31,542

 
31,110

 
27,414

 
25,824

 
 
60,994

 
51,130

Other income
2,749

 
2,241

 
3,186

 
3,104

 
2,290

 
 
4,990

 
4,412

Total revenues
102,276

 
102,842

 
107,402

 
97,903

 
91,015

 
 
205,118

 
179,704

EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operating
33,629

 
36,027

 
34,227

 
29,863

 
28,821

 
 
69,656

 
56,956

General and administrative
10,761

 
10,722

 
9,879

 
9,754

 
9,914

 
 
21,483

 
19,486

Acquisition costs
—

 
7

 
240

 
532

 
252

 
 
7

 
431

Abandoned pre-development costs
—

 
1,596

 
—

 
—

 
—

 
 
1,596

 
—

Depreciation and amortization
25,197

 
26,063

 
27,063

 
24,223

 
22,172

 
 
51,260

 
44,460

Total expenses
69,587

 
74,415

 
71,409

 
64,372

 
61,159

 
 
144,002

 
121,333

Operating income
32,689

 
28,427

 
35,993

 
33,531

 
29,856

 
 
61,116

 
58,371

Interest expense
(14,582
)
 
(14,920
)
 
(13,790
)
 
(12,367
)
 
(12,583
)
 
 
(29,502
)
 
(25,459
)
Gain on previously held interest in acquired joint venture
—

 
—

 
—

 
26,002

 
—

 
 
—

 
—

Income before equity in earnings of unconsolidated joint ventures
18,107

 
13,507

 
22,203

 
47,166

 
17,273

 
 
31,614

 
32,912

Equity in earnings of unconsolidated joint ventures
1,788

 
1,933

 
933

 
9,014

 
503

 
 
3,721

 
1,093

Net income
19,895

 
15,440

 
23,136

 
56,180

 
17,776

 
 
35,335

 
34,005

Noncontrolling interests in Operating Partnership
(1,028
)
 
(803
)
 
(1,208
)
 
(2,787
)
 
(859
)
 
 
(1,831
)
 
(1,648
)
Noncontrolling interests in other consolidated partnerships
(17
)
 
(21
)
 
8

 
(99
)
 
(29
)
 
 
(38
)
 
(30
)
Net income attributable to Tanger Factory Outlet Centers, Inc.
18,850

 
14,616

 
21,936

 
53,294

 
16,888

 
 
33,466

 
32,327

Allocation to participating securities
(481
)
 
(429
)
 
(230
)
 
(609
)
 
(231
)
 
 
(910
)
 
(425
)
Net income available to common shareholders
$
18,369

 
$
14,187

 
$
21,706

 
$
52,685

 
$
16,657

 
 
$
32,556

 
$
31,902

Basic earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
0.20

 
$
0.15

 
$
0.23

 
$
0.56

 
$
0.18

 
 
$
0.35

 
$
0.34

Diluted earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
0.20

 
$
0.15

 
$
0.23

 
$
0.56

 
$
0.18

 
 
$
0.35

 
$
0.34

Weighted average common shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
93,800

 
93,580

 
93,408

 
93,368

 
93,331

 
 
93,690

 
93,232

Diluted
93,874

 
93,649

 
94,354

 
94,300

 
94,207

 
 
93,762

 
94,108





12                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


FFO and FAD Analysis (dollars and shares in thousands)
 
 
 
Three Months Ended
 
YTD
 
6/30/14
 
3/31/14
 
12/31/13
 
9/30/13
 
6/30/13
 
 
6/30/14
 
6/30/13
Funds from operations:
 
 
 
 
 
 
 
 
 
 
 
 

 
 

Net income
$
19,895

 
$
15,440

 
$
23,136

 
$
56,180

 
$
17,776

 
 
$
35,335

 
$
34,005

Adjusted for -
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets - consolidated properties
24,782

 
25,702

 
26,717

 
23,888

 
21,867

 
 
50,484

 
43,910

Depreciation and amortization of real estate assets - unconsolidated joint ventures
2,403

 
2,605

 
2,954

 
2,861

 
3,431

 
 
5,008

 
6,604

Gain on previously held interest in acquired joint venture
—

 
—

 
—

 
(26,002
)
 
—

 
 
—

 
—

Funds from operations
47,080

 
43,747

 
52,807

 
56,927

 
43,074

 
 
90,827

 
84,519

FFO attributable to noncontrolling interests in other consolidated partnerships
(37
)
 
(40
)
 
(12
)
 
(117
)
 
(66
)
 
 
(77
)
 
(73
)
Allocation to participating securities
(949
)
 
(864
)
 
(524
)
 
(614
)
 
(461
)
 
 
(1,813
)
 
(887
)
Funds from operations available to
    common shareholders
$
46,094

 
$
42,843

 
$
52,271

 
$
56,196

 
$
42,547

 
 
$
88,937

 
$
83,559

Funds from operations per share
$
0.47

 
$
0.43

 
$
0.53

 
$
0.57

 
$
0.43

 
 
$
0.90

 
$
0.85

Funds available for distribution to common shareholders:
 
 

 
 

 
 
 
 
 

Funds from operations
$
46,094

 
$
42,843

 
$
52,271

 
$
56,196

 
$
42,547

 
 
$
88,937

 
$
83,559

Adjusted for -
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate depreciation excluded above
415

 
361

 
346

 
335

 
305

 
 
776

 
550

Amortization of finance costs
554

 
553

 
399

 
594

 
598

 
 
1,107

 
1,201

Amortization of net debt discount (premium)
(92
)
 
(89
)
 
(119
)
 
(254
)
 
(252
)
 
 
(181
)
 
(513
)
Amortization of share-based compensation
3,772

 
3,349

 
3,012

 
2,964

 
2,939

 
 
7,121

 
5,399

Straight line rent adjustment
(1,522
)
 
(1,838
)
 
(1,461
)
 
(1,587
)
 
(1,393
)
 
 
(3,361
)
 
(2,480
)
Market rent adjustment
845

 
669

 
752

 
235

 
181

 
 
1,514

 
154

2nd generation tenant allowances
(2,876
)
 
(3,378
)
 
(5,081
)
 
(4,435
)
 
(5,442
)
 
 
(6,254
)
 
(7,327
)
Capital improvements
(12,341
)
 
(4,209
)
 
(2,187
)
 
(3,404
)
 
(6,735
)
 
 
(16,550
)
 
(9,617
)
Adjustments from unconsolidated joint ventures
(39
)
 
(218
)
 
47

 
(4,711
)
 
(220
)
 
 
(257
)
 
(250
)
Funds available for distribution
$
34,810

 
$
38,043

 
$
47,979

 
$
45,933

 
$
32,528

 
 
$
72,852

 
$
70,676

Funds available for distribution
   per share
$
0.35

 
$
0.39

 
$
0.48

 
$
0.46

 
$
0.33

 
 
$
0.74

 
$
0.71

Dividends paid per share
$
0.240

 
$
0.225

 
$
0.225

 
$
0.225

 
$
0.225

 
 
$
0.465

 
$
0.435

FFO payout ratio
51
%
 
52
%
 
43
%
 
40
%
 
53
%
 
 
52
%
 
52
%
FAD payout ratio
69
%
 
58
%
 
48
%
 
50
%
 
70
%
 
 
63
%
 
62
%
Diluted weighted average common shs.
98,989

 
98,789

 
99,499

 
99,178

 
98,955

 
 
98,890

 
98,859


13                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014



Unconsolidated Joint Venture Information

The following table details certain information as of June 30, 2014, except for Net Operating Income ("NOI") which is for the six months ended June 30, 2014, about various unconsolidated real estate joint ventures in which we have an ownership interest (dollars in millions):
Joint Venture
 
Center Location
 
Ownership %
 
Square Feet
 
Tanger's Share of Total Assets
 
Tanger's Share of NOI
 
Tanger's Share of Debt
Charlotte (1)
 
Charlotte, NC
 
50.0
%
 
—

 
$
34.2

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Galveston/Houston
 
Texas City, TX
 
50.0
%
 
352,705

 
39.4

 
2.5

 
32.5

 
 
 
 
 
 
 
 
 
 
 
 
 
National Harbor
 
National Harbor, MD
 
50.0
%
 
338,786

 
52.1

 
2.6

 
31.0

 
 
 
 
 
 
 
 
 
 
 
 
 
RioCan Canada (2)
 
Various
 
50.0
%
 
432,448

 
112.4

 
1.5

 
8.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Savannah (1) (3)
 
Savannah, GA
 
50.0
%
 
—

 
37.3

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Westgate
 
Glendale, AZ
 
58.0
%
 
331,744

 
43.1

 
2.3

 
26.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Wisconsin Dells
 
Wisconsin Dells, WI
 
50.0
%
 
265,086

 
15.0

 
1.1

 
12.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
0.7

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
$
334.2

 
$
10.0

 
$
111.0

(1)
Center opened on July 31, 2014.
(2)
Includes a 155,302 square foot center in Cookstown, Ontario that was acquired in December of 2011, a 161,449 square foot center in Bromont, Quebec and a 115,697 square foot center in Saint-Sauveur, Quebec, both of which were acquired in November of 2012, as well as investments related to the construction and development of an outlet center in Ottawa, Ontario, an expansion of the outlet center in Cookstown, Ontario, and due diligence costs for additional potential sites in Canada.
(3)
Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture's cash flow to be greater than indicated in the Tanger Share column, which in this case, states our legal interest in this venture. Our economic interest may fluctuate based on a number of factors,including mortgage financing, partnership capital contributions and distributions, and proceeds from gains or losses of asset sales.







14                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Pro Rata Balance Sheet (dollars in thousands) as of June 30, 2014
 
Consolidated
 
Noncontrolling interests

Company

Prorata portion unconsolidated joint ventures

Prorata balance sheet
ASSETS
 
 
 
 
 
 
 
 
 
Rental property
 
 
 
 
 
 
 
 
 
Land
$
230,415

 
$
(603
)
 
$
229,812

 
$
34,020

 
$
263,832

Buildings, improvements and fixtures
2,029,321

 
(8,437
)
 
2,020,884

 
169,585

 
2,190,469

Construction in progress
37,553

 
(903
)
 
36,650

 
116,525

 
153,175

 
2,297,289

 
(9,943
)
 
2,287,346

 
320,130

 
2,607,476

Accumulated depreciation
(691,339
)
 
972

 
(690,367
)
 
(19,174
)
 
(709,541
)
Total rental property, net
1,605,950

 
(8,971
)
 
1,596,979

 
300,956

 
1,897,935

Cash and cash equivalents
13,240

 
(550
)
 
12,690

 
14,783

 
27,473

Investments in unconsolidated joint ventures
210,131

 
(533
)
 
209,598

 
(209,598
)
 
—

Deferred lease costs and other intangibles, net
151,738

 
(785
)
 
150,953

 
11,820

 
162,773

Deferred debt origination costs, net
9,652

 
—

 
9,652

 
1,761

 
11,413

Prepaids and other assets
77,905

 
3,039

 
80,944

 
12,226

 
93,170

Total assets
$
2,068,616

 
$
(7,800
)
 
$
2,060,816

 
$
131,948

 
$
2,192,764

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
Senior, unsecured notes, net of discounts
$
794,567

 
$
—

 
$
794,567

 
$
—

 
$
794,567

Unsecured term loans, net of discounts
267,180

 
—

 
267,180

 
—

 
267,180

Mortgages payable, including premiums
248,336

 
—

 
248,336

 
110,972

 
359,308

Unsecured lines of credit
91,200

 
—

 
91,200

 
—

 
91,200

Total debt
1,401,283

 
—

 
1,401,283

 
110,972

 
1,512,255

Construction trade payables
15,352

 
—

 
15,352

 
13,971

 
29,323

Accounts payable and accruals
39,411

 
—

 
39,411

 
7,005

 
46,416

Deferred financing obligation
28,388

 
—

 
28,388

 
—

 
28,388

Other liabilities
30,024

 
—

 
30,024

 
—

 
30,024

Total liabilities
1,514,458

 
—

 
1,514,458

 
131,948

 
1,646,406

Commitments and contingencies
—

 
—

 
—

 
—

 
—

Equity
 
 
 
 
 
 
 
 
 
Tanger Factory Outlet Centers, Inc.
 
 
 
 
 
 
 
 
 
Common shares
959

 
—

 
959

 
—

 
959

Paid in capital
797,286

 
 
 
797,286

 
—

 
797,286

Accumulated distributions in excess of net income
(276,224
)
 
—

 
(276,224
)
 
—

 
(276,224
)
Accumulated other comprehensive income
(3,265
)
 
—

 
(3,265
)
 
—

 
(3,265
)
Equity attributable to Tanger Factory Outlet Centers, Inc.
518,756

 
—

 
518,756

 
—

 
518,756

Equity attributable to noncontrolling interests
 
 
 
 


 
 
 


Noncontrolling interests in Operating Partnership
27,602

 
—

 
27,602

 
—

 
27,602

Noncontrolling interest in other consolidated partnerships
7,800

 
(7,800
)
 
—

 
—

 
—

Total equity
554,158

 
(7,800
)
 
546,358

 
—

 
546,358

Total liabilities and equity
$
2,068,616

 
$
(7,800
)
 
$
2,060,816

 
$
131,948

 
$
2,192,764


15                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014



Pro Rata Statement of Operations (dollars in thousands) year to date June 30, 2014
 
 
 
 
 
Consolidated
 
Noncontrolling interests

Company

Prorata portion unconsolidated joint ventures

Prorata statement of operations
REVENUES
 
 
 
 
 
 
 
 
 
Base rentals
$
135,136

 
$
(289
)
 
$
134,847

 
$
10,456

 
$
145,303

Percentage rentals
3,998

 
(4
)
 
3,994

 
430

 
4,424

Expense reimbursements
60,994

 
(107
)
 
60,887

 
5,328

 
66,215

Other income
4,990

 
(3
)
 
4,987

 
695

 
5,682

Total revenues
205,118

 
(403
)
 
204,715

 
16,909

 
221,624

EXPENSES
 
 
 
 
 
 
 
 
 
Property operating
69,656

 
(136
)
 
69,520

 
6,794

 
76,314

General and administrative
21,483

 
(3
)
 
21,480

 
87

 
21,567

Acquisition costs
7

 
—

 
7

 
—

 
7

Abandoned pre-development costs
1,596

 
—

 
1,596

 
—

 
1,596

Depreciation and amortization
51,260

 
(193
)
 
51,067

 
4,974

 
56,041

Total expenses
144,002

 
(332
)
 
143,670

 
11,855

 
155,525

Operating income
61,116

 
(71
)
 
61,045

 
5,054

 
66,099

Interest expense
(29,502
)
 
61

 
(29,441
)
 
(1,361
)
 
(30,802
)
Income before equity in earnings of unconsolidated joint ventures
31,614

 
(10
)
 
31,604

 
3,693

 
35,297

Equity in earnings of unconsolidated joint ventures
3,721

 
(28
)
 
3,693

 
(3,693
)
 
—

Net income
35,335

 
(38
)
 
35,297

 
—

 
35,297

Noncontrolling interests in Operating Partnership
(1,831
)
 
—

 
(1,831
)
 
—

 
(1,831
)
Noncontrolling interests in other consolidated partnerships
(38
)
 
38

 
—

 
—

 
—

Net income attributable to Tanger Factory Outlet Centers, Inc.
33,466

 
—

 
33,466

 
—

 
33,466

Allocation to participating securities
(910
)
 
—

 
(910
)
 
—

 
(910
)
Net income available to common shareholders
$
32,556

 
$
—

 
$
32,556

 
$
—

 
$
32,556



16                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


External Growth Pipeline Summary As of June 30, 2014
Project/Market
Approximate
Square Feet (000s)
Projected
Total Net Cost
(millions)
Cost Incurred to Date
(in millions)
Tanger Ownership Percentage
Projected
Return
Projected
Opening
 
 
 
 
 
 
 
 
UNITED STATES:
 
 
 
 
 
 
New development
 
 
 
 
 
 
Charlotte, NC
400
$
90.9

$
65.9

50%
10.5% - 11.5%
July 31, 2014
Foxwoods, Mashantucket, CT (1)
314
$
118.0

$
35.2

67%
(2)
2Q 2015
Savannah, GA (1)
385
$
110.0

$
39.8

50%
(2)
2Q 2015
Grand Rapids, MI
350
$
76.5

$
2.2

100%
(2)
2H 2015
Columbus, OH
350
$
87.6

$
1.3

50%
(2)
2H 2015
Expansions
 
 
 
 
 
 
Park City, UT
21
$
6.7

$
0.7

100%
8.5% - 9.5%
4Q 2014
Branson, MO
25
$
7.8

$
1.1

100%
10.5% - 11.5%
4Q 2014
Glendale, AZ (Westgate)
65
$
20.1

$
1.9

58%
6.5% - 7.5%
4Q 2014
CANADA:
 
 
 
 
 
 
New development
 
 
 
 
 
 
Kanata, ON (Ottawa)
316
$
117.4

$
64.3

50%
6.5% - 7.5%
4Q 2014
Expansions
 
 
 
 
 
 
Cookstown, ON (N. Toronto)
153
$
72.7

$
29.4

50%
5.5% - 6.5%
4Q 2014
 
 
(1)
Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture's cash flow to be greater than indicated in the Tanger Ownership Percentage column, which in this case, states the company's legal interest in this venture. The company's economic interest may fluctuate based on a number of factors, including mortgage financing, partnership capital contributions and distributions, and proceeds from gains or losses of asset sales.
(2)
While actual returns for individual projects may vary, the company's current targeted stabilized return on cost for development projects is 9% - 11% in the US.

The company's estimates, projections and judgments with respect to approximate size, projected total cost, Tanger ownership percentage, projected opening date, and projected return on cost for development and expansion projects are subject to adjustment prior to and during the development process. Projected total cost shown net of outparcel sales. There are risks inherent to real estate development, some of which are not under the direct control of the company. Please refer to the company's filings with the Securities and Exchange Commission on Form 10-K and Form 10-Q for a discussion of these risks.


17                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Debt Outstanding Summary (dollars in thousands)
As of June 30, 2014
 
Principal
Balance
 
Stated
Interest Rate
 
Effective Interest Rate
 
Maturity
Date
Unsecured debt:
 

 
 
 
 
 
 
Unsecured lines of credit (1)
$
91,200

 
LIBOR + 1.00%
 
 
 
10/24/2017
2015 Senior unsecured notes
250,000

 
6.150%
 
6.150%
 
11/15/2015
2020 Senior unsecured notes
300,000

 
6.125%
 
6.219%
 
6/1/2020
2023 Senior unsecured notes
250,000

 
3.875%
 
4.076%
 
12/1/2023
Unsecured term loan (2)
250,000

 
LIBOR + 1.05%
 
 
 
2/23/2019
Unsecured term note
7,500

 
LIBOR + 1.30%
 
 
 
8/28/2017
Unsecured note
10,000

 
1.50%
 
3.153%
 
6/30/2016
Net debt discounts
(5,753
)
 
 
 
 
 
 
Total unsecured debt
$
1,152,947

 
 
 
 
 
 
Secured mortgage debt:
 
 
 
 
 
 
 
Atlantic City, NJ (including premium of $3,893) (3)
$
51,177

 
5.14% - 7.65%
 
5.05%
 
11/15/2021 - 12/15/2026
Deer Park, NY (net of discount of $1,319) (4)
148,681

 
LIBOR + 1.50%
 
2.80%
 
8/30/2018
Hershey, PA (including premium of $698) (3)
30,321

 
5.17% - 8.00%
 
3.40%
 
8/1/2015
Ocean City, MD (including premium of $146) (3)
18,157

 
5.24%
 
4.68%
 
1/6/2016
Total secured mortgage debt
$
248,336

 
 
 
 
 
 
Tanger's share of unconsolidated JV debt:
 

 
 
 
 
 
 
Galveston/Houston (5)
$
32,500

 
LIBOR + 1.50%
 
 
 
7/01/2017
National Harbor (6)
31,000

 
LIBOR + 1.65%
 
 
 
5/16/2016
RioCan Canada (including premium of $533) (7)
8,788

 
5.10% - 5.75%
 
3.93% - 4.18%
 
6/22/2015 - 5/10/2020
Savannah (8)
—

 
LIBOR + 1.65%
 
 
 
5/21/2017
Westgate (9)
26,559

 
LIBOR + 1.75%
 
 
 
6/27/2015
Wisconsin Dells (10)
12,125

 
LIBOR + 2.25%
 
 
 
12/17/2022
Total Tanger's share of unconsolidated JV debt
$
110,972

 
 
 
 
 
 
(1)
The Company has an unsecured, syndicated credit line with a borrowing capacity totaling $500.0 million and a separate cash management line of credit with a borrowing capacity of $20.0 million with one of the participants in the syndication. Both lines expire on October 24, 2017 with the option to further extend the maturity for one additional year. Facility fees of 15 basis points annually are charged in arrears based on the full amount of the commitment.

(2)
On July 2, 2014, the credit agreement for the unsecured term loan due February 23, 2019 was amended and restated to change the interest rate from LIBOR + 1.60% to LIBOR + 1.05%, and the prepayment penalty was removed.

(3)
Represents mortgages assumed in the acquisitions of various properties owned by joint ventures which are consolidated for financial reporting purposes.

(4)
On August 30, 2013, as part of the acquisition of a controlling interest in Deer Park, we assumed an interest-only mortgage loan that has a 5 year term and carries an interest rate of LIBOR + 1.50%. In October 2013, we entered into interest rate swap agreements that fix the base LIBOR rate at an average of 1.30%, creating a contractual interest rate of 2.80%.

(5)
In July 2013, the joint venture closed on a $70.0 million mortgage loan with a maturity date of July 1, 2017, with the option to extend the maturity for one additional year. As of June 30, 2014, the balance on the loan was $65 million.


18                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


(6)
In May 2013, the joint venture closed on a construction loan with the ability to borrow up to $62.0 million. As of June 30, 2014, the balance on the loan was $62.0 million.

(7)
Represents the mortgages assumed related to the acquisition of the Saint-Sauveur, Quebec property by the RioCan co-owners in November 2012. The mortgages have a principle balance of $16.5 million and carry a weighted average interest rate of 5.7% and mature in 2015 and 2020, respectively.
 
(8)
In May 2014, the joint venture closed on a construction loan with the ability to borrow up to $97.7 million. As of June 30, 2014, there was no balance on the loan.

(9)
In May 2014 the joint venture amended and restated the original construction loan from June 2012. The amended and restated construction loan provides the joint venture with the ability to borrow up to $62.0 million. As of June 30, 2014, the balance on the loan was $45.8 million.

(10)
In December 2012, the joint venture closed on the refinance of its $24.3 million mortgage loan which had an initial maturity date of December 17, 2012. The refinanced interest-only, non-recourse mortgage loan has a 10 year term.

19                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Future Scheduled Principal Payments (dollars in thousands)
As of June 30, 2014
Year
Tanger
Consolidated
Payments
 
Tanger's Share
of Unconsolidated
JV Payments
 
Total
Scheduled
Payments
2014
$
1,823

 
$
165

 
$
1,988

2015
282,343

 
26,882

 
309,225

2016
30,283

 
32,114

 
62,397

2017 (1)
101,708

 
32,838

 
134,546

2018
153,183

 
357

 
153,540

2019
253,369

 
378

 
253,747

2020
303,566

 
5,580

 
309,146

2021
5,793

 
—

 
5,793

2022
4,436

 
12,125

 
16,561

2023
254,768

 
—

 
254,768

2024 & thereafter
12,346

 
—

 
12,346

 
$
1,403,618

 
$
110,439

 
$
1,514,057

Net Discount on Debt
(2,335
)
 
533

 
(1,802
)
 
$
1,401,283

 
$
110,972

 
$
1,512,255

Senior Unsecured Notes Financial Covenants (2) 
As of June 30, 2014
 
Required
 
Actual
 
Compliance
Total Consolidated Debt to Adjusted Total Assets
<60%
 
49
%
 
Yes
Total Secured Debt to Adjusted Total Assets
<40%
 
9
%
 
Yes
Total Unencumbered Assets to Unsecured Debt
>150%
 
179
%
 
Yes
Consolidated Income Available for Debt Service to Annual Debt Service Charge
>1.5
 
4.45

 
Yes
(1)
Includes balances of $91.2 million outstanding under the company's unsecured lines of credit.
(2)
For a complete listing of all Debt Covenants related to the Company's Senior Unsecured Notes, as well as definitions of the above terms, please refer to the Company's filings with the Securities and Exchange Commission.


20                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014


Investor Information
  
Tanger Outlet Centers welcomes any questions or comments from shareholders, analysts, investment managers, media and prospective investors. Please address all inquiries to our Investor Relations Department.
Tanger Factory Outlet Centers, Inc.
Investor Relations
Phone:
(336) 834-6892
Fax:
(336) 297-0931
e-mail:
tangermail@tangeroutlet.com
Mail:
Tanger Factory Outlet Centers, Inc.
 
3200 Northline Avenue
 
Suite 360
 
Greensboro, NC 27408


21                
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2014