EX-99.2 3 skt8kex992march312020.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2
tangerlargea01a03a07.jpg
Tanger Factory Outlet Centers, Inc.
  
Supplemental Operating and Financial Data
March 31, 2020



Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020

tangeroutlet-small93015a06.jpg


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 year ended December 31, 2019. 
 
This Supplemental Portfolio 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 03/31/2020
tangeroutlet-small93015a06.jpg


Table of Contents
Section
 
 
 
Portfolio Data:
 
 
 
Summary Operating Metrics
Geographic Diversification
Property Summary - Occupancy at End of Each Period Shown
Portfolio Occupancy at the End of Each Period
Average Tenant Sales Per Square Foot by Outlet Center Ranking
Top 25 Tenants Based on Percentage of Total Annualized Base Rent
Lease Expirations as of March 31, 2020
Capital expenditures
Leasing Activity
 
 
Financial Data:
 
 
 
Consolidated Balance Sheets
Consolidated Statements of Operations
Components of Rental Revenues
Unconsolidated Joint Venture Information
Debt Outstanding Summary
Future Scheduled Principal Payments
Senior Unsecured Notes Financial Covenants
Enterprise Value, Net Debt, Liquidity, Debt Ratios and Credit Ratings
 
 
Non-GAAP and Supplemental Measures:
 
 
 
Non-GAAP Definitions
FFO and FAD Analysis
Portfolio NOI and Same Center NOI
Adjusted EBITDA and EBITDAre Analysis
Pro Rata Balance Sheet Information
 
 
Pro Rata Statement of Operations Information
 
 
Investor Information


3
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Summary Operating Metrics
 
 
March 31,
 
 
2020
 
2019
Outlet centers in operation at end of period:
 
 
 
 
Consolidated
 
32

 
32

Partially owned - unconsolidated
 
7

 
8

Total Number of Properties
 
39

 
40

 
 
 
 
 
Gross leasable area open at end of period (in thousands):
 
 
 
 
Consolidated
 
12,044

 
12,047

Partially owned - unconsolidated
 
2,212

 
2,371

Total (1)

14,257

 
14,418

 
 
 
 
 
Ending Occupancy:
 
 
 
 
Consolidated properties
 
94.3
%
 
95.4
%
Partially owned - unconsolidated
 
96.0
%
 
94.6
%
Total properties
 
94.6
%
 
95.3
%
 
 
 
 
 
Average Tenant Sales Per Square Foot (2):
 
 
 
 
Consolidated properties
 
$
387

 
$
391

Partially owned - domestic unconsolidated
 
$
443

 
$
443

Total domestic properties
 
$
393

 
$
397

 
 
 
 
 
Occupancy Cost Ratio (3)
 
10.3
%
 
10.0
%
(1)
Due to rounding, numbers may not add up precisely to the totals provided.
(2)
Sales are based on reports for the trailing 12 months by retailers which have occupied outlet center stores for a minimum of 12 months.
(3)
Occupancy cost ratio represents occupancy costs as a percentage of tenant sales for the trailing 12-month period for consolidated properties.


4
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Geographic Diversification
As of March 31, 2020
Consolidated Properties
State
# of Centers
 
GLA
 
% of GLA
South Carolina
5

 
1,597,510

 
13
%
New York
2

 
1,468,888

 
12
%
Georgia
3

 
1,121,579

 
9
%
Texas
3

 
1,001,357

 
8
%
Pennsylvania
3

 
999,416

 
8
%
Michigan
2

 
671,557

 
6
%
Delaware
1

 
557,353

 
5
%
Alabama
1

 
554,587

 
5
%
New Jersey
1

 
489,718

 
4
%
Tennessee
1

 
447,815

 
4
%
North Carolina
2

 
422,895

 
3
%
Ohio
1

 
411,904

 
3
%
Arizona
1

 
410,751

 
3
%
Florida
1

 
351,721

 
3
%
Missouri
1

 
329,861

 
3
%
Mississippi
1

 
324,717

 
3
%
Louisiana
1

 
321,066

 
3
%
Connecticut
1

 
311,507

 
3
%
New Hampshire
1

 
250,107

 
2
%
Total
32

 
12,044,309

 
100
%
 
 
 
 
 
 
Unconsolidated Joint Venture Properties
 
 
 
 
 
 
 
 
 
 
 
 
# of Centers
 
GLA
 
Ownership %
Charlotte, NC
1

 
398,676

 
50.00
%
Ottawa, ON
1

 
357,218

 
50.00
%
Columbus, OH
1

 
355,245

 
50.00
%
Texas City, TX
1

 
352,705

 
50.00
%
National Harbor, MD
1

 
341,156

 
50.00
%
Cookstown, ON
1

 
307,895

 
50.00
%
Saint-Sauveur, QC
1

 
99,405

 
50.00
%
Total
7

 
2,212,300

 
 
 
 
 
 
 
 
Grand Total
39

 
14,256,609

 
 



5
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Property Summary - Occupancy at End of Each Period Shown
Consolidated properties
Location
Total GLA
03/31/20
 
% Occupied
03/31/20
 
% Occupied
12/31/19
 
% Occupied
03/31/19
 
Deer Park, NY
739,110

 
98
%
 
99
%
 
98
%
 
Riverhead, NY
729,778

 
92
%
 
97
%
 
95
%
 
Rehoboth Beach, DE
557,353

 
95
%
 
99
%
 
97
%
 
Foley, AL
554,587

 
88
%
 
94
%
 
94
%
 
Atlantic City, NJ
489,718

 
79
%
 
80
%
 
80
%
 
San Marcos, TX
471,816

 
95
%
 
96
%
 
95
%
 
Sevierville, TN
447,815

 
99
%
 
100
%
 
99
%
 
Savannah, GA
429,089

 
96
%
 
98
%
 
97
%
 
Myrtle Beach Hwy 501, SC
426,523

 
96
%
 
98
%
 
98
%
 
Jeffersonville, OH
411,904

 
84
%
 
92
%
 
94
%
 
Glendale, AZ (Westgate)
410,751

 
97
%
 
100
%
 
97
%
 
Myrtle Beach Hwy 17, SC
403,425

 
99
%
 
100
%
 
100
%
 
Charleston, SC
379,328

 
100
%
 
100
%
 
99
%
 
Lancaster, PA
375,857

 
91
%
 
95
%
 
92
%
 
Pittsburgh, PA
373,863

 
95
%
 
97
%
 
97
%
 
Commerce, GA
371,408

 
96
%
 
97
%
 
94
%
 
Grand Rapids, MI
357,119

 
90
%
 
97
%
 
96
%
 
Fort Worth, TX
351,741

 
99
%
 
100
%
 
97
%
 
Daytona Beach, FL
351,721

 
98
%
 
99
%
 
98
%
 
Branson, MO
329,861

 
99
%
 
100
%
 
98
%
 
Southaven, MS
324,717

 
99
%
 
100
%
 
94
%
 
Locust Grove, GA
321,082

 
95
%
 
100
%
 
97
%
 
Gonzales, LA
321,066

 
96
%
 
99
%
 
96
%
 
Mebane, NC
318,886

 
100
%
 
100
%
 
99
%
 
Howell, MI
314,438

 
88
%
 
94
%
 
92
%
 
Mashantucket, CT (Foxwoods)
311,507

 
93
%
 
95
%
 
93
%
 
Tilton, NH
250,107

 
93
%
 
96
%
 
96
%
 
Hershey, PA
249,696

 
99
%
 
100
%
 
99
%
 
Hilton Head II, SC
206,564

 
98
%
 
92
%
 
88
%
 
Hilton Head I, SC
181,670

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

 
87
%
 
97
%
 
97
%
 
Blowing Rock, NC
104,009

 
85
%
 
89
%
 
95
%
 
Total
12,044,309

 
94
%
 
97
%
 
95
%
 






6
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Unconsolidated joint venture properties
Location
Total GLA
03/31/20
 
% Occupied
03/31/20
 
% Occupied
12/31/19
 
% Occupied
03/31/19
 
Charlotte, NC
398,676

 
97
%
 
99
%
 
97
%
 
Ottawa, ON
357,218

 
96
%
 
97
%
 
94
%
 
Columbus, OH
355,245

 
97
%
 
98
%
 
95
%
 
Texas City, TX (Galveston/Houston)
352,705

 
92
%
 
98
%
 
97
%
 
National Harbor, MD
341,156

 
96
%
 
99
%
 
96
%
 
Cookstown, ON
307,895

 
100
%
 
100
%
 
97
%
 
Saint-Sauveur, QC
99,405

 
92
%
 
92
%
 
94
%
 
Bromont, QC (1)
N/A

 
N/A

 
N/A

 
77
%
 
Total
2,212,300

 
96
%
 
98
%
 
95
%
 
(1)
Outlet center sold in May 2019.


7
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Portfolio Occupancy at the End of Each Period (1) 
chart-8b664beddbea5233947.jpg
(1) Excludes unconsolidated outlet centers. See table on page 4.




8
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Average Tenant Sales Per Square Foot by Outlet Center Ranking As of March 31, 2020 (1) 
 Ranking (2)
12 Months
 SPSF
 Period End
 Occupancy
  Sq Ft
(thousands)
% of
 Square Feet
% of
Portfolio
NOI (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
520

96
%
2,884

23
%
34
%
Centers 6 - 10
$
438

97
%
1,749

15
%
18
%
Centers 11 - 15
$
391

91
%
1,658

14
%
13
%
Centers 16 - 20
$
347

96
%
1,948

16
%
16
%
Centers 21 - 26
$
308

93
%
2,138

18
%
12
%
Centers 27 - 32
$
256

91
%
1,667

14
%
7
%
 
 
 
 
 
 
 Ranking (2)
Cumulative 12 Months
 SPSF
 Cumulative Period End
 Occupancy
  Cumulative Sq Ft
(thousands)
Cumulative % of
 Square Feet
Cumulative % of
Portfolio
NOI (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
520

96
%
2,884

23
%
34
%
Centers 1 - 10
$
486

96
%
4,633

38
%
52
%
Centers 1 - 15
$
461

95
%
6,291

52
%
65
%
Centers 1 - 20
$
433

95
%
8,239

68
%
81
%
Centers 1 - 26
$
407

95
%
10,377

86
%
93
%
Centers 1 - 32
$
387

94
%
12,044

100
%
100
%
 
 
 
 
 
 
Unconsolidated centers (4)
$
443

95
%
1,448

n/a

n/a

Domestic centers (5)
$
393

94
%
13,492

n/a

n/a

 
 
(1)
Sales are based on reports for the trailing 12 months by retailers which have occupied outlet center stores for a minimum of 12 months. Sales per square foot are based on all stores less than 20,000 square feet in size. Centers are ranked by sales per square foot for the trailing twelve months ended March 31, 2020.
 
 
 
 
 
 
 
 
(2)
Outlet centers included in each ranking group above are as follows (in alphabetical order):
 
Centers 1 - 5:
Deer Park, NY
Glendale, AZ (Westgate)
Rehoboth Beach, DE
Riverhead, NY
Sevierville, TN
 
 
Centers 6 - 10:
Branson, MO
Lancaster, PA
Locust Grove, GA
Mebane, NC
Myrtle Beach Hwy 17, SC
 
 
Centers 11 - 15:
Atlantic City, NJ
Charleston, SC
Grand Rapids, MI
Hershey, PA
Hilton Head I, SC
 
 
Centers 16 - 20:
Fort Worth, TX
Gonzales, LA
Pittsburgh, PA
San Marcos, TX
Savannah, GA
 
 
Centers 21 - 26:
Foley, AL
Hilton Head II, SC
Howell, MI
Mashantucket, CT (Foxwoods)
Myrtle Beach Hwy 501, SC
Southaven, MS
 
Centers 27 - 32:
Blowing Rock, NC
Commerce, GA
Daytona Beach, FL
Jeffersonville, OH
Terrell, TX
Tilton, NH
 
 
 
 
 
 
 
 
(3)
Based on the Company’s forecast of 2020 Portfolio NOI (see non-GAAP definitions), excluding centers not yet stabilized (none). The Company’s forecast is based on management’s estimates as of March 31, 2020 and may be considered a forward-looking statement which is subject to risks and uncertainties. Actual results could differ materially from those projected due to various factors including, but not limited to, the risks associated with general economic and real estate conditions. For a more detailed discussion of the factors that affect operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the three months ended March 31, 2020.
 
 
(4)
Includes domestic outlet centers open 12 full calendar months (in alphabetical order):
 
Unconsolidated:
Charlotte, NC
Columbus, OH
National Harbor, MD
Texas City, TX (Galveston/Houston)
 
(5)
Includes consolidated portfolio and domestic unconsolidated joint ventures.

9
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Top 25 Tenants Based on Percentage of Total Annualized Base Rent
As of March 31, 2020 (1) 

Consolidated
 
Unconsolidated
Tenant
Brands
# of
Stores
 
GLA
 
% of
Total GLA
 
% of Total Annualized Base Rent (2)
 
# of
Stores
The Gap, Inc.
Gap, Banana Republic, Janie & Jack, Old Navy
96

 
947,819

 
7.9
%
 
6.0
%
 
19

Ascena Retail Group, Inc.
LOFT, Ann Taylor, Justice, Lane Bryant
96

 
534,084

 
4.4
%
 
4.7
%
 
13

PVH Corp.
Tommy Hilfiger, Van Heusen, Calvin Klein
63

 
395,121

 
3.3
%
 
4.1
%
 
14

Tapestry, Inc.
Coach, Kate Spade, Stuart Weitzman
49

 
229,022

 
1.9
%
 
2.9
%
 
11

Under Armour, Inc.
Under Armour, Under Armour Kids
30

 
233,877

 
1.9
%
 
2.8
%
 
6

Nike, Inc.
Nike, Converse, Hurley
37

 
417,435

 
3.5
%
 
2.6
%
 
11

American Eagle Outfitters, Inc.
American Eagle Outfitters, Aerie
39

 
272,104

 
2.3
%
 
2.6
%
 
7

G-III Apparel Group, Ltd.
Bass, Wilsons Leather, DKNY, Karl Lagerfeld Paris
43

 
201,234

 
1.7
%
 
2.4
%
 
5

Carter’s, Inc.
Carters, OshKosh B Gosh
51

 
224,227

 
1.9
%
 
2.3
%
 
10

Capri Holdings Limited
Michael Kors, Michael Kors Men’s
28

 
136,816

 
1.1
%
 
2.0
%
 
5

Signet Jewelers Limited
Kay Jewelers, Zales, Jared Vault
51

 
117,204

 
1.0
%
 
2.0
%
 
8

Hanesbrands Inc.
Hanesbrands, Maidenform, Champion
36

 
176,907

 
1.5
%
 
1.9
%
 
2

Columbia Sportswear Company
Columbia Sportswear
20

 
154,145

 
1.3
%
 
1.9
%
 
6

Ralph Lauren Corporation
Polo Ralph Lauren, Polo Children, Polo Ralph Lauren Big & Tall, Club Monaco
33

 
358,736

 
3.0
%
 
1.8
%
 
6

Chico’s, FAS Inc.
Chicos, White House/Black Market, Soma Intimates
41

 
119,031

 
1.0
%
 
1.8
%
 
5

Adidas AG
Adidas, Reebok
28

 
169,388

 
1.4
%
 
1.7
%
 
9

Skechers USA, Inc.
Skechers
30

 
149,167

 
1.2
%
 
1.7
%
 
6

V. F. Corporation
The North Face, Vans, Timberland, Dickies
26

 
138,846

 
1.2
%
 
1.6
%
 
2

Caleres Inc.
Famous Footwear, Naturalizer, Allen Edmonds
32

 
166,018

 
1.4
%
 
1.6
%
 
11

Express Inc.
Express Factory
23

 
160,730

 
1.3
%
 
1.6
%
 
4

H&M Hennes & Mauritz L.P.
H&M
19

 
407,342

 
3.3
%
 
1.5
%
 
2

Levis
Levis
29

 
121,486

 
1.0
%
 
1.5
%
 
5

Rack Room Shoes, Inc.
Rack Room Shoes
22

 
129,699

 
1.0
%
 
1.4
%
 
2

Brooks Brothers Group, Inc.
Brooks Brothers
23

 
134,725

 
1.1
%
 
1.4
%
 
4

Luxottica Group S.p.A
Sunglass Hut, Oakley, Lenscrafters
51

 
75,389

 
0.6
%
 
1.4
%
 
10

Total of Top 25 tenants
 
996

 
6,170,552

 
51.2
%
 
57.2
%
 
183

(1)
Excludes leases that have been entered into but which tenant has not yet taken possession, temporary leases and month-to-month leases.
(2)
Annualized base rent is defined as the minimum monthly payments due as of the end of the reporting period annualized, excluding periodic contractual fixed increases. Include rents which are based on a percentage of sales in lieu of fixed contractual rents.




10
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Lease Expirations as of March 31, 2020

Percentage of Total Gross Leasable Area (1) 
chart-dc19ec0779595a62bfe.jpg

Percentage of Total Annualized Base Rent (1) 
chart-b8ee20125825504a95e.jpg

(1) Excludes unconsolidated outlet centers. See table on page 5.


11
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Capital expenditures (in thousands)
 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Value-enhancing:
 
 
 
 
New center developments and expansions
 
$
843

 
$
939

Other
 
—

 
55

 
 
843

 
994

Recurring capital expenditures:
 
 
 
 
Second generation tenant allowances
 
908

 
2,974

Operational capital expenditures
 
2,976

 
2,852

Renovations
 
2,170

 
197

 
 
6,054


6,023

Total additions to rental property-accrual basis
 
6,897

 
7,017

Conversion from accrual to cash basis
 
3,654

 
2,889

Total additions to rental property-cash basis
 
$
10,551

 
$
9,906


Leasing Activity

Re-tenant(1)
 
Trailing twelve months ended:
# of Leases
Square Feet
(in 000’s)
Average
Annual
Straight-line Rent (psf)
Average
Tenant
Allowance (psf)(2)
Average Initial Term
 (in years)
Net Average
Annual
Straight-line Rent (psf) (3)
3/31/2020
118

504

$
36.13

$
47.70

7.75

$
29.98

3/31/2019
81

388

$
33.32

$
45.13

7.83

$
27.56

 
 
 
 
 
 
 
Renewal(1)
 
Trailing twelve months ended:
# of Leases
Square Feet
(in 000’s)
Average
Annual
Straight-line Rent (psf)
Average
Tenant
Allowance (psf)(2)
Average Initial Term
 (in years)
Net Average
Annual
Straight-line Rent (psf) (3)

3/31/2020
178

839

$
28.20

$
0.90

3.90

$
27.97

3/31/2019
280

1,404

$
34.37

$
0.49

3.82

$
34.24

 
 
 
 
 
 
 
Total(1)
 
Trailing twelve months ended:
# of Leases
Square Feet
(in 000’s)
Average
Annual
Straight-line Rent (psf)
Average
Tenant
Allowance (psf)(2)
Average Initial Term
 (in years)
Net Average
Annual
Straight-line Rent (psf) (3)
3/31/2020
296

1,342

$
31.17

$
18.46

5.34

$
27.71

3/31/2019
361

1,792

$
34.14

$
10.16

4.69

$
31.97

(1)
Represents change in rent (base rent and common area maintenance (“CAM”)) for all leases for new stores that opened or renewals that started during the respective trailing twelve month periods within the consolidated portfolio, except for license agreements, seasonal tenants, and month-to-month leases.
(2)
Includes other landlord costs.
(3)
Net average straight-line base rent is calculated by dividing the average tenant allowance costs per square foot by the average initial term and subtracting this calculated number from the average straight-line base rent per year amount. The average annual straight-line base rent disclosed in the table above includes all concessions, abatements and reimbursements of rent to tenants. The average tenant allowance disclosed in the table above includes other landlord costs.

12
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Leasing Activity(1) 

 
TTM ended

TTM ended

All Lease Terms
3/31/2020

3/31/2019

Re-tenanted Space:
 
 
Number of leases
118

81

Gross leasable area
503,584

388,192

New initial rent per square foot
$
32.76

$
30.71

Prior expiring rent per square foot
$
36.21

$
30.02

Percent decrease
(9.5
)%
2.3
%
 
 
 
New straight-line rent per square foot
$
36.13

$
33.32

Prior straight-line rent per square foot
$
35.50

$
30.02

Percent increase
1.8
 %
11.0
%
 
 
 
Renewed Space:
 
 
Number of leases
178

280

Gross leasable area
838,574

1,404,053

New initial rent per square foot
$
27.38

$
33.27

Prior expiring rent per square foot
$
28.66

$
33.19

Percent decrease
(4.5
)%
0.2
%
 
 
 
New straight-line rent per square foot
$
28.20

$
34.37

Prior straight-line rent per square foot
$
29.32

$
33.31

Percent increase (decrease)
(3.8
)%
3.2
%
 
 
 
Total Re-tenanted and Renewed Space:
 
 
Number of leases
296

361

Gross leasable area
1,342,158

1,792,245

New initial rent per square foot
$
29.40

$
32.71

Prior expiring rent per square foot
$
31.49

$
32.50

Percent decrease
(6.7
)%
0.6
%
 
 
 
New straight-line rent per square foot
$
31.17

$
34.14

Prior straight-line rent per square foot
$
31.64

$
32.60

Percent increase
(1.5
)%
4.7
%
(1)
For consolidated properties owned as of the period-end date. Represents change in rent (base rent and CAM) for all leases for new stores that opened or renewals that started during the respective trailing twelve month periods, except for license agreements, seasonal tenants, and month-to-month leases.





13
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Leasing Activity(1) 
 
TTM ended

TTM ended

Terms of More Than 12 Months
3/31/2020

3/31/2019

Re-tenanted Space:
 
 
Number of leases
117

79

Gross leasable area
500,834

365,345

New initial rent per square foot
$
32.78

$
32.03

Prior expiring rent per square foot
$
36.14

$
30.04

Percent increase (decrease)
(9.3
)%
6.6
%
 
 
 
New straight-line rent per square foot
$
36.17

$
34.81

Prior straight-line rent per square foot
$
35.44

$
30.21

Percent increase
2.1
 %
15.2
%
 
 
 
Renewed Space:
 
 
Number of leases
144

244

Gross leasable area
703,611

1,236,668

New initial rent per square foot
$
28.55

$
34.48

Prior expiring rent per square foot
$
29.31

$
33.59

Percent increase
(2.6
)%
2.6
%
 
 
 
New straight-line rent per square foot
$
29.52

$
35.72

Prior straight-line rent per square foot
$
30.15

$
33.82

Percent increase
(2.1
)%
5.6
%
 
 
 
Total Re-tenanted and Renewed Space:
 
 
Number of leases
261

323

Gross leasable area
1,204,445

1,602,013

New initial rent per square foot
$
30.31

$
33.92

Prior expiring rent per square foot
$
32.15

$
32.78

Percent increase (decrease)
(5.7
)%
3.5
%
 
 
 
New straight-line rent per square foot
$
32.29

$
35.52

Prior straight-line rent per square foot
$
32.35

$
32.99

Percent increase
(0.2
)%
7.7
%
(1)
For consolidated properties owned as of the period-end date. Represents change in rent (base rent and CAM) for leases for a term of more than 12 months for new stores that opened or renewals that started during the respective trailing twelve month periods.






14
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg

Consolidated Balance Sheets (dollars in thousands)
 
March 31,
 
December 31,
 
2020
 
2019
Assets
 
 
 
   Rental property:
 
 
 
   Land
$
266,537

 
$
266,537

   Buildings, improvements and fixtures
2,564,224

 
2,630,357

 
2,830,761

 
2,896,894

   Accumulated depreciation
(1,007,922
)
 
(1,009,951
)
      Total rental property, net
1,822,839

 
1,886,943

   Cash and cash equivalents
600,454

 
16,672

   Investments in unconsolidated joint ventures
86,478

 
94,691

   Deferred lease costs and other intangibles, net
97,560

 
96,712

   Operating lease right-of-use assets
83,764

 
86,575

   Prepaids and other assets
100,674

 
103,618

         Total assets
$
2,791,769

 
$
2,285,211

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities
 
 
 
   Debt:
 
 
 
Senior, unsecured notes, net
$
1,139,093

 
$
1,138,603

Unsecured term loan, net
347,531

 
347,367

Mortgages payable, net
82,856

 
83,803

Unsecured lines of credit, net
598,074

 
—

Total debt
2,167,554

 
1,569,773

Accounts payable and accrued expenses
90,659

 
79,562

Operating lease liabilities (1)
91,017

 
91,237

Other liabilities
94,881

 
88,530

         Total liabilities
2,444,111

 
1,829,102

Commitments and contingencies
 
 
 
Equity
 
 
 
Tanger Factory Outlet Centers, Inc.:
 
 
 
Common shares, $.01 par value, 300,000,000 shares authorized, 93,076,701 and 92,892,260 shares issued and outstanding at March 31, 2020 and December 31 2019, respectively
931

 
929

   Paid in capital
778,062

 
775,035

   Accumulated distributions in excess of net income
(410,532
)
 
(317,263
)
   Accumulated other comprehensive loss
(38,228
)
 
(25,495
)
         Equity attributable to Tanger Factory Outlet Centers, Inc.
330,233

 
433,206

Equity attributable to noncontrolling interests:
 
 
 
Noncontrolling interests in Operating Partnership
17,425

 
22,903

Noncontrolling interests in other consolidated partnerships
—

 
—

         Total equity
347,658

 
456,109

            Total liabilities and equity
$
2,791,769

 
$
2,285,211




15
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Consolidated Statements of Operations (in thousands, except per share data)
 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Revenues:
 
 
 
 
Rental revenues
 
$
108,558

 
$
119,954

Management, leasing and other services
 
1,443

 
1,342

Other revenues
 
1,632

 
1,859

Total revenues
 
111,633

 
123,155

Expenses:
 
 
 
 
Property operating
 
38,627

 
42,377

General and administrative
 
12,584

 
12,145

Impairment charge
 
45,675

 
—

Depreciation and amortization
 
29,417

 
31,760

Total expenses
 
126,303

 
86,282

Other income (expense):
 
 
 
 
Interest expense
 
(15,196
)
 
(16,307
)
Gain on sale of assets
 
—

 
43,422

Other income
 
220

 
224

Total other income (expense)
 
(14,976
)
 
27,339

Income (loss) before equity in earnings of unconsolidated joint ventures
 
(29,646
)
 
64,212

Equity in earnings of unconsolidated joint ventures
 
1,527

 
1,629

Net income (loss)
 
(28,119
)
 
65,841

Noncontrolling interests in Operating Partnership
 
1,427

 
(3,315
)
Noncontrolling interests in other consolidated partnerships
 
(190
)
 
(195
)
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc.
 
(26,882
)
 
62,331

Allocation of earnings to participating securities
 
(516
)
 
(611
)
Net income (loss) available to common shareholders of
Tanger Factory Outlet Centers, Inc.
 
$
(27,398
)
 
$
61,720

 
 
 
 
 
Basic earnings per common share:
 
 
 
 
Net income (loss)
 
$
(0.30
)
 
$
0.66

 
 
 
 
 
Diluted earnings per common share:
 
 
 
 
Net income (loss)
 
$
(0.30
)
 
$
0.66



16
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Components of Rental Revenues (in thousands)

As a lessor, substantially all of our revenues are earned from arrangements that are within the scope of Accounting Standards Codification Topic 842 “Leases” (“ASC 842”). We utilized the practical expedient in ASU 2018-11 to account for lease and non-lease components as a single component which resulted in all of our revenues associated with leases being recorded as rental revenues on the consolidated statements of operations.

The table below provides details of the components included in rental revenues:
 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Rental revenues:
 
 
 
 
Base rentals 
 
$
72,571

 
$
79,100

Percentage rentals
 
1,674

 
1,565

Tenant expense reimbursements
 
33,379

 
37,168

Lease termination fees
 
164

 
1,130

Market rent adjustments
 
(269
)
 
(370
)
Straight-line rent adjustments
 
1,873

 
1,970

Uncollectible tenant revenues
 
(834
)
 
(609
)
Rental revenues
 
$
108,558

 
$
119,954







17
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Unconsolidated Joint Venture Information  

The following table details certain information as of March 31, 2020, except for Net Operating Income (“NOI”) which is for the three months ended March 31, 2020, about various unconsolidated real estate joint ventures in which we have an ownership interest
(dollars in millions):
Joint Venture
 
Center Location
 
Tanger’s Ownership %
 
Square Feet
 
Tanger’s Share of Total Assets
 
Tanger’s Share of NOI
 
Tanger’s Share of Net Debt (1)
Charlotte
 
Charlotte, NC
 
50.0
%
 
398,676

 
$
38.1

 
$
1.6

 
$
49.8

Columbus
 
Columbus, OH
 
50.0
%
 
355,245

 
38.9

 
1.2

 
42.5

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

 
20.3

 
1.0

 
40.0

National Harbor
 
National Harbor, MD
 
50.0
%
 
341,156

 
40.4

 
1.2

 
47.2

RioCan Canada (2)
 
Various
 
50.0
%
 
764,518

 
90.6

 
1.4

 
4.1

Total
 
 
 
 
 
2,212,300

 
$
228.3

 
$
6.4

 
$
183.6

(1)
Net of debt origination costs and premiums.
(2)
Includes a 307,895 square foot outlet center in Cookstown, Ontario; a 357,218 square foot outlet center in Ottawa, Ontario; and a 99,405 square foot outlet center in Saint-Sauveur, Quebec.



18
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Debt Outstanding Summary
As of March 31, 2020
(dollars in thousands)
 
Total Debt Outstanding
 
Our Share of Debt
 
Stated
Interest Rate
 
End of Period Effective Interest Rate(1) 
 
Maturity
Date (2)
 
Weighted Average Years to Maturity (2)
Consolidated Debt:
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt:
 

 
 
 
 
 
 
 
 
 
 
Unsecured lines of credit(3)
$
599,830

 
$
599,830

 
LIBOR + 1.0%

 
1.7
%
 
10/28/2022
 
2.6

2023 Senior unsecured notes
250,000

 
250,000

 
3.875%

 
4.1
%
 
12/1/2023
 
3.7

2024 Senior unsecured notes
250,000

 
250,000

 
3.75
%
 
3.8
%
 
12/1/2024
 
4.7

2026 Senior unsecured notes
350,000

 
350,000

 
3.125
%
 
3.2
%
 
9/1/2026
 
6.4

2027 Senior unsecured notes
300,000

 
300,000

 
3.875
%
 
3.9
%
 
7/15/2027
 
7.3

Unsecured term loan
350,000

 
350,000

 
LIBOR + 1.0%

 
2.6
%
 
4/22/2024
 
4.1

Net debt discounts and debt origination costs
(15,132
)
 
(15,132
)
 
 

 
 
 
 
 
 
Total net unsecured debt
2,084,698

 
2,084,698

 
 

 
3.0
%
 
 
 
4.5

Secured mortgage debt:
 
 
 
 
 
 
 
 
 
 
 
Atlantic City, NJ
30,037

 
30,037

 
5.14% - 7.65%

 
5.1
%
 
11/15/2021 - 12/8/2026
 
4.9

Southaven, MS
51,400

 
51,400

 
LIBOR + 1.80%

 
3.9
%
 
4/29/2023
 
3.1

Debt premium and debt origination costs
1,419

 
1,419

 
 
 
 
 
 
 
 
Total net secured mortgage debt
82,856

 
82,856

 
 
 
4.4
%
 
 
 
3.8

Total consolidated debt
2,167,554

 
2,167,554

 
 
 
3.1
%
 
 
 
4.5

Unconsolidated JV debt:
 

 
 
 
 

 
 
 
 
 
 
Charlotte
100,000

 
50,000

 
4.27
%
 
4.3
%
 
7/1/2028
 
8.3

Columbus
85,000

 
42,500

 
LIBOR + 1.65%

 
2.6
%
 
11/28/2021
 
1.7

Galveston/Houston
80,000

 
40,000

 
LIBOR + 1.65%

 
2.6
%
 
7/1/2022
 
2.3

National Harbor
94,998

 
47,499

 
4.63
%
 
4.6
%
 
1/5/2030
 
9.8

RioCan Canada
8,253

 
4,126

 
5.75
%
 
4.2
%
 
5/10/2020
 
0.1

Debt premium and debt origination costs
(1,079
)
 
(539
)
 
 
 
 
 
 
 
 
Total unconsolidated JV net debt
367,172

 
183,586

 
 

 
3.6
%
 
 
 
5.6

Total
$
2,534,726

 
$
2,351,140

 
 
 
3.1
%
 
 
 
4.7

(1)
The effective interest rate includes the impact of discounts and premiums and interest rate swap agreements, as applicable. See page 20 for additional details.
(2)
Includes applicable extensions available at our option.
(3)
The Company has unsecured lines of credit that provide for borrowings of up to $600.0 million. The unsecured lines of credit include a $20.0 million liquidity line and a $580.0 million syndicated line. A 20 basis point facility fee is due annually on the entire committed amount of each facility. The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances.

 



19
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Summary of Our Share of Fixed and Variable Rate Debt
As of March 31, 2020
(dollars in thousands)
 
Total Debt %
 
Our Share of Debt
 
End of Period Effective Interest Rate
 
Average Years to Maturity (1)
 
 

 
 
 
 
 
 
Consolidated:
 
 
 
 
 
 
 
Fixed (2)
72
%
 
$
1,558,183

 
3.6
%
 
5.2

Variable
28
%
 
609,371

 
1.7
%
 
2.6

 
100
%
 
2,167,554

 
3.1
%
 
4.5

Unconsolidated Joint ventures:
 
 


 
 
 
 
Fixed
55
%
 
$
101,143

 
4.4
%
 
8.6

Variable
45
%
 
82,443

 
2.6
%
 
2.0

 
100
%
 
183,586

 
3.6
%
 
5.6

Total:
 
 
 
 
 
 
 
Fixed
71
%
 
$
1,659,326

 
3.7
%
 
5.6

Variable
29
%
 
691,814

 
1.9
%
 
2.5

Total share of debt
100
%
 
$
2,351,140

 
3.1
%
 
4.7

(1)
Includes applicable extensions available at our option.
(2)
The effective interest rate includes interest rate swap agreements that fix the base LIBOR rate at a weighted average of 1.7% on notional amounts aggregating $390.0 million as follows:
Effective Date
 
Maturity Date
 
Notional Amount
 
Bank Pay Rate
 
Company Fixed Pay Rate
Interest rate swaps:
 
 
 
 
 
 
 
 
 
April 13, 2016
 
January 1, 2021
 
$
175,000

 
1
 month LIBOR
 
1.03
%
March 1, 2018
 
January 31, 2021
 
40,000

 
1
 month LIBOR
 
2.47
%
August 14, 2018
 
January 1, 2021
 
150,000

 
1
 month LIBOR
 
2.20
%
July 1, 2019
 
February 1, 2024
 
25,000

 
1
 month LIBOR
 
1.75
%
Total
 
 
 
$
390,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Forward starting interest rate swap agreements:
January 1, 2021
 
February 1, 2024
 
150,000

 
1
 month LIBOR
 
0.60
%







20
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Future Scheduled Principal Payments (dollars in thousands)(1)
As of March 31, 2020
Year
Tanger
Consolidated
Payments
 
Tanger’s Share
of Unconsolidated
JV Payments
 
Total
Scheduled
Payments
2020
$
2,694

 
$
4,126

 
$
6,820

2021
5,793

 
42,500

 
48,293

2022(2)
604,266

 
40,000

 
644,266

2023
306,168

 
1,031

 
307,199

2024
605,140

 
1,636

 
606,776

2025
1,501

 
1,710

 
3,211

2026
355,705

 
1,788

 
357,493

2027
300,000

 
1,869

 
301,869

2028
—

 
46,944

 
46,944

2029
—

 
984

 
984

2030 & thereafter
—

 
41,537

 
41,537

 
$
2,181,267

 
$
184,125

 
$
2,365,392

Net debt discounts and debt origination costs
(13,713
)
 
(539
)
 
(14,252
)
 
$
2,167,554

 
$
183,586

 
$
2,351,140

(1)
Includes applicable extensions available at our option.
(2)
Includes principal balance of $599.8 million outstanding under the Company’s unsecured lines of credit.

Senior Unsecured Notes Financial Covenants (1) 
As of March 31, 2020
 
Required
 
Actual
 
Compliance
Total Consolidated Debt to Adjusted Total Assets
<60%
 
55
%
 
Yes
Total Secured Debt to Adjusted Total Assets
<40%
 
2
%
 
Yes
Total Unencumbered Assets to Unsecured Debt
>150%
 
175
%
 
Yes
Consolidated Income Available for Debt Service to Annual Debt Service Charge
>1.5
 
5.0

 
Yes
(1)
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.





21
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Enterprise Value, Net Debt, Liquidity, Debt Ratios and Credit Ratings (in thousands, except per share data)
 
 
March 31,
 
December 31,
 
 
2020
 
2019
Enterprise Value:
 
 
 
 
Market value:
 
 
 
 
Common shares outstanding
 
93,077

 
92,892

Exchangeable operating partnership units
 
4,911

 
4,911

Total shares
 
97,988

 
97,803

Common share price
 
$
5.00

 
$
14.73

Total market value (1)
 
$
489,939

 
$
1,440,645

 
 
 
 
 
Debt:
 
 
 
 
Senior, unsecured notes
 
$
1,150,000

 
$
1,150,000

Unsecured term loans
 
350,000

 
350,000

Mortgages payable
 
81,437

 
82,309

Unsecured lines of credit
 
599,830

 
—

Total principal debt
 
2,181,267

 
1,582,309

Less: Net debt discounts
 
(3,217
)
 
(3,334
)
Less: Debt origination costs
 
(10,496
)
 
(9,202
)
Total debt
 
2,167,554

 
1,569,773

Total enterprise value
 
$
2,657,493

 
$
3,010,418

 
 
 
 
 
Net Debt:
 
 
 
 
Total debt
 
$
2,167,554

 
$
1,569,773

Less: Cash and cash equivalents
 
(600,454
)
 
(16,672
)
Net debt
 
$
1,567,100

 
$
1,553,101

 
 
 
 
 
Liquidity:
 
 
 
 
Cash and cash equivalents
 
$
600,454

 
$
16,672

Unused capacity under unsecured lines of credit (2)
 
—

 
599,830

Total liquidity
 
$
600,454

 
$
616,502

 
 
 
 
 
Ratios (3):
 
 
 
 
Net debt to Adjusted EBITDA (4)
 
5.8
x
 
5.5
x
Interest coverage (Adjusted EBITDA / interest expense) (4)
 
4.5
x
 
4.5
x
(1)
Amounts may not recalculate due to the effect of rounding.
(2)
Unused capacity under the Company’s $600.0 million unsecured lines of credit is reduced by $170,000 at both March 31, 2020 and December 31, 2019 related to outstanding letters of credit.
(3)
Ratios are presented for the trailing twelve-month period.
(4)
Adjusted EBITDA is a non-GAAP measure. Refer to page 28 for a reconciliation of net income to Adjusted EBITDA.

Credit Ratings and Outlook:
 
 
 
Moody’s Investors Services
Baa2
Negative
 
Standard & Poor’s Ratings Services
BBB
Negative
 


22
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


NON-GAAP SUPPLEMENTAL MEASURES

Beginning with the three months ended March 31, 2020, we have elected to supplement our disclosure with three additional non-GAAP measures, Adjusted EBITDA, EBITDAre and Adjusted EBITDAre (each as defined below), that are commonly provided in the REIT industry. See “Adjusted EBITDA, EBITDAre and Adjusted EBITDAre” below for more information. We also now refer to Adjusted Funds from Operations (“AFFO”) as Core Funds From Operations (“Core FFO”), but there has been no change to the definition of this measure.

Funds From Operations

Funds From Operations (“FFO”) is a widely used measure of the operating performance for real estate companies that supplements net income (loss) determined in accordance with generally accepted accounting principles in the United States (“GAAP”). We determine FFO based on the definition set forth by the National Association of Real Estate Investment Trusts (“NAREIT”), of which we are a member. In December 2018, NAREIT issued “NAREIT Funds From Operations White Paper - 2018 Restatement” which clarifies, where necessary, existing guidance and consolidates alerts and policy bulletins into a single document for ease of use. NAREIT defines FFO as net income/(loss) available to the Company’s common shareholders computed in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains or losses from sales of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis.

FFO is intended to exclude historical cost depreciation of real estate as required by GAAP which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization of real estate assets, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

We present FFO because we consider it an important supplemental measure of our operating performance. In addition, a portion of cash bonus compensation to certain members of management is based on our FFO or Core FFO, which is described in the section below. We believe it is useful for investors to have enhanced transparency into how we evaluate our performance and that of our management. In addition, FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is also widely used by us and others in our industry to evaluate and price potential acquisition candidates. We believe that FFO payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FFO, is useful to investors because it facilitates the comparison of dividend coverage between REITs. NAREIT has encouraged its member companies to report their FFO as a supplemental, industry-wide standard measure of REIT operating performance.

FFO has significant limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•
FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•
FFO does not reflect changes in, or cash requirements for, our working capital needs;

•
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and FFO does not reflect any cash requirements for such replacements; and

•
Other companies in our industry may calculate FFO differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, FFO should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or our dividend paying capacity. We compensate for these limitations by relying primarily on our GAAP results and using FFO only as a supplemental measure.

Core FFO

If applicable, we present Core FFO (formerly referred to as AFFO) as a supplemental measure of our performance. We define Core FFO as FFO further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. These further adjustments are itemized in the table below, if applicable. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Core FFO you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Core FFO should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

We present Core FFO because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we believe it is useful for investors to have enhanced transparency into how we evaluate management’s performance and the effectiveness of our business strategies. We use Core FFO when certain material, unplanned transactions occur as a factor in evaluating management’s performance and to evaluate the effectiveness of our business strategies, and may use Core FFO when determining incentive compensation.


23
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Core FFO has limitations as an analytical tool. Some of these limitations are:

•
Core FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•
Core FFO does not reflect changes in, or cash requirements for, our working capital needs;

•
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Core FFO does not reflect any cash requirements for such replacements;

•
Core FFO does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

•
Other companies in our industry may calculate Core FFO differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Core FFO should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Core FFO only as a supplemental measure.

Funds Available for Distribution

Funds Available for Distribution (“FAD”) is a non-GAAP financial measure that we define as FFO, excluding corporate depreciation, amortization of finance costs, amortization of net debt discount (premium), amortization of equity-based compensation, straight-line rent amounts, market rent amounts, second generation tenant allowances, capital improvement expenditures, and our share of the items listed above for our unconsolidated joint ventures. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.

We believe that net income (loss) is the most directly comparable GAAP financial measure to FAD. FAD does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Other companies in our industry may calculate FAD differently than we do, limiting its usefulness as a comparative measure.

Portfolio Net Operating Income and Same Center Net Operating Income

We present portfolio net operating income (“Portfolio NOI”) and same center net operating income (“Same Center NOI”) as supplemental measures of our operating performance. Portfolio NOI represents our property level net operating income which is defined as total operating revenues less property operating expenses and excludes termination fees and non-cash adjustments including straight-line rent, net above and below market rent amortization, impairment charges and gains or losses on the sale of assets recognized during the periods presented. We define Same Center NOI as Portfolio NOI for the properties that were operational for the entire portion of both comparable reporting periods and which were not acquired, or subject to a material expansion or non-recurring event, such as a natural disaster, during the comparable reporting periods.

We believe Portfolio NOI and Same Center NOI are non-GAAP metrics used by industry analysts, investors and management to measure the operating performance of our properties because they provide performance measures directly related to the revenues and expenses involved in owning and operating real estate assets and provide a perspective not immediately apparent from net income, FFO or Core FFO. Because Same Center NOI excludes properties developed, redeveloped, acquired and sold; as well as non-cash adjustments, gains or losses on the sale of outparcels and termination rents; it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for both comparable periods. Other REITs may use different methodologies for calculating Portfolio NOI and Same Center NOI, and accordingly, our Portfolio NOI and Same Center NOI may not be comparable to other REITs.

Portfolio NOI and Same Center NOI should not be considered alternatives to net income (loss) or as an indicator of our financial performance since they do not reflect the entire operations of our portfolio, nor do they reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other non-property income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. Because of these limitations, Portfolio NOI and Same Center NOI should not be viewed in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Portfolio NOI and Same Center NOI only as supplemental measures.

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre

We present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as adjusted for items described below (“Adjusted EBITDA”), EBITDA for Real Estate (“EBITDAre”) and Adjusted EBITDAre, all non-GAAP measures, as supplemental measures of our operating performance. Each of these measures is defined as follows:
We define Adjusted EBITDA as net income/(loss) available to the Company’s common shareholders computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization, gains and losses on sale of operating properties, gains and losses on change of control, impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of

24
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


depreciated property in the affiliate, gains and losses on extinguishment of debt, net and other items that we do not consider indicative of the Company's ongoing operating performance.
We determine EBITDAre based on the definition set forth by NAREIT, which is defined as net income/(loss) available to the Company’s common shareholders computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization, gains and losses on sale of operating properties, gains and losses on change of control and impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate and after adjustments to reflect our share of the EBITDAre of unconsolidated joint ventures.
If applicable, Adjusted EBITDAre is defined as EBITDAre excluding gains and losses on extinguishment of debt, net and other items that that we do not consider indicative of the Company's ongoing operating performance.
We present Adjusted EBITDA, EBITDAre and, if applicable, Adjusted EBITDAre as we believe they are useful for investors, creditors and rating agencies as they provide additional performance measures that are independent of a Company’s existing capital structure to facilitate the evaluation and comparison of the Company’s operating performance to other REITs and provide a more consistent metric for comparing the operating performance of the Company’s real estate between periods.
Adjusted EBITDA, EBITDAre and Adjusted EBITDAre have significant limitations as analytical tools, including:
•
They do not reflect our interest expense;

•
They do not reflect gains or losses on sales of operating properties or impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate;

•
Adjusted EBITDA and Adjusted EBITDAre do not reflect gains and losses on extinguishment of debt and other items that may affect operations; and

•
Other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA, EBITDAre and Adjusted EBITDAre should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, EBITDAre and Adjusted EBITDAre only as supplemental measures.

Non-GAAP Pro Rata Balance Sheet and Income Statement Information

The pro rata balance sheet and pro rata income statement information is not, and is not intended to be, a presentation in accordance with GAAP. The pro rata balance sheet and pro rata income statement information reflect our proportionate economic ownership of each asset in our portfolio that we do not wholly own. These assets may be found in the table earlier in this report entitled, “Unconsolidated Joint Venture Information.” The amounts in the column labeled “Pro Rata Portion Unconsolidated Joint Ventures” were derived on a property-by-property basis by applying to each financial statement line item the ownership percentage interest used to arrive at our share of net income or loss during the period when applying the equity method of accounting. A similar calculation was performed for the amounts in the column labeled “Pro Rata Portion Noncontrolling interests.”

We do not control the unconsolidated joint ventures and the presentations of the assets and liabilities and revenues and expenses do not represent our legal claim to such items. The operating agreements of the unconsolidated joint ventures generally provide that partners may receive cash distributions (1) quarterly, to the extent there is available cash from operations, (2) upon a capital event, such as a refinancing or sale or (3) upon liquidation of the venture. The amount of cash each partner receives is based upon specific provisions of each operating agreement and vary depending on factors including the amount of capital contributed by each partner and whether any contributions are entitled to priority distributions. Upon liquidation of the joint venture and after all liabilities, priority distributions and initial equity contributions have been repaid, the partners generally would be entitled to any residual cash remaining based on the legal ownership percentage shown in the table found earlier in this report entitled “Unconsolidated Joint Venture Information”.

We provide pro rata balance sheet and income statement information because we believe it assists investors and analysts in estimating our economic interest in our unconsolidated joint ventures when read in conjunction with the Company’s reported results under GAAP. The presentation of pro rata financial information has limitations as an analytical tool. Some of these limitations include:

•
The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
•
Other companies in our industry may calculate their pro rata interest differently than we do, limiting the usefulness as a comparative measure.

Because of these limitations, the pro rata balance sheet and income statement information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using the pro rata balance sheet and income statement information only supplementally.



25
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Reconciliation of Net Income to FFO (dollars and shares in thousands)

 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Net income (loss)
 
$
(28,119
)
 
$
65,841

Adjusted for:
 
 
 
 
Depreciation and amortization of real estate assets - consolidated
 
28,801

 
31,148

Depreciation and amortization of real estate assets - unconsolidated joint ventures
 
3,018

 
3,130

Impairment charge - consolidated
 
45,675

 
—

Gain on sale of assets
 
—

 
(43,422
)
FFO
 
49,375

 
56,697

FFO attributable to noncontrolling interests in other consolidated partnerships
 
(190
)
 
(195
)
Allocation of earnings to participating securities
 
(516
)
 
(611
)
FFO available to common shareholders  (1)
 
$
48,669

 
$
55,891

FFO available to common shareholders per share - diluted (1)
 
$
0.50

 
$
0.57

 
 
 
 
 
Weighted Average Shares:
 
 
 
 
Basic weighted average common shares
 
92,500

 
93,303

Diluted weighted average common shares (for earnings per share computations)
 
92,500

 
93,303

Exchangeable operating partnership units
 
4,911

 
4,961

Diluted weighted average common shares (for FFO per share computations) (1)
 
97,411

 
98,264

(1)
Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.

Reconciliation of FFO to FAD (dollars and shares in thousands)
 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
FFO available to common shareholders
 
$
48,669

 
$
55,891

Adjusted for:
 
 
 
 
Corporate depreciation excluded above
 
616

 
612

Amortization of finance costs
 
757

 
747

Amortization of net debt discount (premium)
 
118

 
109

Amortization of equity-based compensation
 
3,789

 
3,818

Straight-line rent adjustments
 
(1,872
)
 
(1,970
)
Market rent adjustments
 
362

 
480

Second generation tenant allowances and lease incentives
 
(5,729
)
 
(2,974
)
Capital improvements
 
(5,146
)
 
(3,049
)
Adjustments from unconsolidated joint ventures
 
(32
)
 
(406
)
FAD available to common shareholders (1)
 
$
41,532

 
$
53,258

Dividends per share
 
$
0.3550

 
$
0.3500

FFO payout ratio
 
71
%
 
61
%
FAD payout ratio
 
83
%
 
65
%
Diluted weighted average common shares (1)
 
97,411

 
98,264

(1)
Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.

26
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Reconciliation of Net Income to Portfolio NOI and Same Center NOI for the consolidated portfolio (in thousands)

 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Net income (loss)
 
$
(28,119
)
 
$
65,841

Adjusted to exclude:
 
 
 
 
Equity in earnings of unconsolidated joint ventures
 
(1,527
)
 
(1,629
)
Interest expense
 
15,196

 
16,307

Gain on sale of assets
 
—

 
(43,422
)
Other non-operating income
 
(220
)
 
(224
)
Impairment charge
 
45,675

 
—

Depreciation and amortization
 
29,417

 
31,760

Other non-property expenses
 
139

 
150

Corporate general and administrative expenses
 
12,579

 
12,132

Non-cash adjustments (1)
 
(1,502
)
 
(1,472
)
Lease termination fees
 
(164
)
 
(1,130
)
Portfolio NOI
 
71,474

 
78,313

Non-same center NOI (2)
 
—

 
(4,081
)
Same Center NOI
 
$
71,474

 
$
74,232

(1)
Non-cash items include straight-line rent, above and below market rent amortization, straight-line rent expense on land leases and gains or losses on outparcel sales, as applicable.
(2)
Excluded from Same Center NOI:
Outlet centers sold:
Nags Head, Ocean City, Park City, and Williamsburg
March 2019

Same Center NOI for the consolidated portfolio (in thousands)

 
 
Three months ended
 
 
 
March 31,
%
 
 
2020
 
2019
Change
Same Center Revenues:
 
 
 
 
 
Rental revenues
 
$
106,791

 
$
110,619

(3.5
)%
Other revenues
 
1,796

 
1,892

(5.1
)
Total same center revenues
 
108,587

 
112,511

(3.5
)
Same Center Expenses:
 
 
 
 


Property operating
 
37,108

 
38,256

(3.0
)
General and administrative
 
5

 
23

(78.3
)
Total same center expenses
 
37,113

 
38,279

(3.0
)
Same Center NOI
 
$
71,474

 
$
74,232

(3.7
)%





27
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Reconciliation of Net Income to Adjusted EBITDA (in thousands)
 
 
Three months ended
 
 
March 31,
 
March 31,
 
 
2020
 
2019
Net income (loss)
 
$
(28,119
)
 
$
65,841

Adjusted to exclude:
 
 
 
 
Interest expense
 
15,196

 
16,307

Depreciation and amortization
 
29,417

 
31,760

Impairment charge - consolidated
 
45,675

 
—

Gain on sale of assets
 
—

 
(43,422
)
Adjusted EBITDA
 
$
62,169

 
$
70,486


Reconciliation of Net Income to EBITDAre (in thousands)

 
 
Three months ended
 
 
March 31,
 
March 31,
 
 
2020
 
2019
 
 
 
 
 
Net income (loss)
 
$
(28,119
)
 
$
65,841

Adjusted to exclude:
 
 
 
 
Interest expense
 
15,196

 
16,307

Depreciation and amortization
 
29,417

 
31,760

Impairment charge - consolidated
 
45,675

 
—

Gain on sale of assets
 
—

 
(43,422
)
Pro-rata share of interest expense - unconsolidated joint ventures
 
1,867

 
2,067

Pro-rata share of depreciation and amortization - unconsolidated joint ventures
 
3,018

 
3,129

EBITDAre
 
$
67,054

 
$
75,682




28
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Non-GAAP Pro Rata Balance Sheet Information as of March 31, 2020 (in thousands)


Non-GAAP
 
Pro Rata Portion Unconsolidated Joint Ventures (1)
Assets
 
Rental property:
 
Land
$
43,508

Buildings, improvements and fixtures
231,828

Construction in progress
2,143

 
277,479

Accumulated depreciation
(66,974
)
Total rental property, net
210,505

Cash and cash equivalents
6,327

Deferred lease costs and other intangibles, net
3,165

Prepaids and other assets
8,324

Total assets
$
228,321

Liabilities and Owners’ Equity
 
Liabilities
 
Mortgages payable, net
$
183,586

Accounts payable and accruals
6,626

Total liabilities
190,212

Owners’ equity
38,109

Total liabilities and owners’ equity
$
228,321

(1)
The carrying value of our investments in unconsolidated joint ventures as reported in our Consolidated Balance Sheet differs from our pro rata share of the net assets shown above due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis totaled $3.8 million as of March 31, 2020 and are being amortized over the various useful lives of the related assets.


29
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


Non-GAAP Pro Rata Statement of Operations Information for the three months ended March 31, 2020 (in thousands)
 
Non-GAAP Pro Rata Portion
 
Noncontrolling Interests
 
Unconsolidated Joint Ventures
Revenues:
 
 
 
Rental revenues 
$
—

 
$
10,929

Other revenues
—

 
89

Total revenues
—

 
11,018

Expense:
 
 
 
Property operating
—

 
4,564

General and administrative
—

 
69

Depreciation and amortization
—

 
3,018

Total expenses
—

 
7,651

Other income (expense):
 
 
 
Interest expense
—

 
(1,867
)
Other income (expenses)
(190
)
 
27

Total other income (expense)
$
(190
)
 
$
(1,840
)
Net income (loss)
$
(190
)
 
$
1,527


The table below provides details of the components included in our share of rental revenues for the three months ended March 31, 2020 (in thousands)

 
Non-GAAP Pro Rata Portion
 
Noncontrolling Interests
 
Unconsolidated Joint Ventures
Rental revenues:
 
 
 
Base rentals 
$
—

 
$
6,385

Percentage rentals
—

 
276

Tenant expense reimbursements
—

 
4,257

Lease termination fees
—

 
36

Market rent adjustments
—

 
(18
)
Straight-line rent adjustments
—

 
(7
)
Uncollectible tenant revenues
—

 
—

Rental revenues
$
—

 
$
10,929




30
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg


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:
tangerir@tangeroutlet.com
Mail:
Tanger Factory Outlet Centers, Inc.
 
3200 Northline Avenue
 
Suite 360
 
Greensboro, NC 27408


31
Supplemental Operating and Financial Data for the
Quarter Ended 03/31/2020
tangeroutlet-small93015a06.jpg