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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
___________

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 14, 2017

TANGER FACTORY OUTLET CENTERS, INC.
_________________________________________
(Exact name of registrant as specified in its charter)
 
North Carolina
 
 
 
1-11986
 
 
 
56-1815473
 
 
(State or other jurisdiction of Incorporation)
 
 
 
(Commission File Number)
 
 
 
(I.R.S. Employer Identification Number)
 
 
3200 Northline Avenue, Greensboro, North Carolina 27408
 
 
 
(Address of principal executive offices) (Zip Code)
 
 
 
 
(336) 292-3010
 
 
 
 
(Registrants' telephone number, including area code)
 
 
 
 
N/A
 
 
 
(former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02   Results of Operations and Financial Condition

On February 14, 2017, Tanger Factory Outlet Centers, Inc. (the "Company") issued a press release announcing its results of operations and financial condition as of and for the quarter ended December 31, 2016. A copy of the Company's press release is hereby furnished as Exhibit 99.1 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise.

Item 7.01   Regulation FD Disclosure

On February 14, 2017, the Company made publicly available on its website, www.tangeroutlet.com, certain supplemental operating and financial information for the quarter ended December 31, 2016. This supplemental operating and financial information is hereby attached to this current report as Exhibit 99.2. The information contained in this report on Form 8-K, including Exhibit 99.2, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise. The information found on, or otherwise accessible through, the Company's website is not incorporated into, and does not form a part of, this current report on Form 8-K or any other report or document the Company files with or furnishes to the United States Securities and Exchange Commission.

Item 9.01   Financial Statements and Exhibits

(d) Exhibits

The following exhibits are included with this Report:

Exhibit 99.1
Press release announcing the results of operations and financial condition of the Company as of and for the quarter ended December 31, 2016.

Exhibit 99.2
Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 2016.






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 14, 2017


TANGER FACTORY OUTLET CENTERS, INC.

By:    /s/ James F. Williams
James F. Williams
Senior Vice President, Chief Financial Officer





EXHIBIT INDEX

Exhibit No.
 
 
99.1
 
Press release announcing the results of operations and financial condition of the Company as of and for the quarter ended December 31, 2016.
 
 
 
99.2
 
Supplemental operating and financial information of the Company as of and for the quarter ended December 31, 2016.
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


EXHIBIT 99.1

News Release
TANGER REPORTS YEAR-END RESULTS FOR 2016
Reports Year-End Occupancy 97.7%

Greensboro, NC, February 14, 2017, Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported financial and operating results for the three months and year ended December 31, 2016 and provided initial earnings guidance for 2017.

For the year ended December 31, 2016, net income available to common shareholders was positively impacted by gains totaling $101.8 million, or $1.07 per share, related to the sale of an asset and the acquisition of interests in previously held joint ventures. Net income available to common shareholders for the three months and year ended December 31, 2015 were positively impacted by gains totaling $86.5 million, or $0.91 per share, and $120.4 million, or $1.27 per share, respectively, related to the sale of assets and interests in an unconsolidated joint venture.

Net income available to common shareholders for the three months ended December 31, 2016 was $0.25 per share, or $23.8 million, compared to $1.13 per share, or $106.9 million, for the three months ended December 31, 2015. Net income available to common shareholders for the year ended December 31, 2016 was $2.01 per share, or $191.8 million, compared to $2.20 per share, or $208.8 million, for the year ended December 31, 2015.

Adjusted funds from operations ("AFFO") available to common shareholders for the three months ended December 31, 2016 increased 5.2% to $0.61 per share, or $60.9 million, from $0.58 per share, or $58.1 million, for the three months ended December 31, 2015. For the year ended December 31, 2016, AFFO available to common shareholders increased 6.8% to $2.37 per share, or $238.4 million, from $2.22 per share, or $221.4 million, for the year ended December 31, 2015. Funds from operations ("FFO") and AFFO, which do not include the gains that positively impacted net income, are widely accepted supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. Complete reconciliations containing adjustments from GAAP net income to FFO and to AFFO are included in this release. Net income, FFO and AFFO per share are on a diluted basis.

"During 2016 we continued to deliver strong internal growth, with same center net operating income up 3.3% for the year, extending our record to 53 consecutive quarters of consolidated portfolio same center NOI growth. Our consolidated portfolio was 97.7% occupied at year-end despite having recaptured 262,000 square feet of space since the beginning of 2015. External growth was achieved by opening two new Tanger Outlet Centers during 2016 and commencing construction of another new outlet center that will open in time for the 2017 holiday shopping season. We are pleased with these achievements given the challenging retail environment," commented Steven B. Tanger, President & Chief Executive Officer. "We also strengthened our fortress balance sheet during 2016 by converting $525 million of debt from floating to fixed rates. In addition, we recycled $109 million in asset sales proceeds to repay floating rate debt." he added.



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2016 Highlights
Same Center NOI for the consolidated portfolio increased 3.3% during 2016 and 2.7% during the fourth quarter, compared to 3.5% and 2.1%, respectively for the same periods of 2015
Blended average base rental rates increased 20.2% on space renewed and released throughout the consolidated portfolio, compared to 22.4% for 2015
Consolidated portfolio occupancy rate was 97.7% on December 31, 2016, compared to 97.5% on December 31, 2015 and 97.4% on September 30, 2016
Excluding eight centers negatively impacted by severe weather events during the third and fourth quarters, average tenant sales were $394 per square foot for the twelve months ended December 31, 2016, and on a same center basis were stable compared to the twelve months ended December 31, 2015
Average tenant sales for the consolidated portfolio including these properties were $387 per square foot for the twelve months ended December 31, 2016, and on a same center basis, decreased 80 basis points compared to the twelve months ended December 31, 2015
Total enterprise value was $5.3 billion as of December 31, 2016, compared to $4.9 billion at December 31, 2015
Debt-to-total market capitalization ratio was 32% as of December 31, 2016 and December 31, 2015
Interest coverage ratio was 4.40 times for 2016, compared to 4.58 times for 2015
Raised regular quarterly common share cash dividend in April by 14% on an annualized basis to $1.30 per share, marking the 23rd consecutive year of increased dividends
Opened two new Tanger Outlet Centers
Commenced two construction projects expected to be completed in 2017, including a new outlet center and a major expansion of an existing outlet center
Increased ownership interest in three key assets to 100%
Sold one small, non-core outlet center
Unencumbered three outlet centers by repaying floating rate mortgage loans totaling $310 million
Expanded the unsecured term loan to $325 million from $250 million, extended the maturity to April 2021, and reduced the interest rate spread by 10 basis points
Entered into interest rate swap agreements that fix the base LIBOR rate at an average of 1.03% on $175 million in LIBOR denominated debt through January 1, 2021
Completed two offerings totaling $350 million of 3.125% unsecured senior notes due September 2026, with a blended yield of 3.193% netting proceeds of approximately $344.5 million

Core Portfolio Drives Operating Results
During 2016, Tanger executed 399 leases totaling 1,607,000 square feet throughout its consolidated portfolio with a 20.2% blended increase in average base rental rates, compared to a 22.4% increase for the year ended December 31, 2015. Lease renewals accounted for approximately 1,223,000 square feet, which generated a 17.7% increase in average base rental rates. Leases renewed represent 85% of the consolidated portfolio space scheduled to expire during 2016, compared to an 84% renewal rate achieved by the Company during 2015. Re-tenanted space accounted for the remaining 384,000 square feet, with an increase in average base rental rates of 27.4%.
    
Historically, most of the Company's leasing activity happens early in the year. Less than 14% of total annual renewal activity was completed during the fourth quarter of 2016, and only six leases were re-tenanted. Later quarters, where only a small portion of the annual leasing activity is executed, may not be representative of ongoing leasing performance, as the mix of leases can easily skew rent spreads when the base activity is small.

For the three months ended December 31, 2016, Same Center NOI for the consolidated portfolio increased for the 53rd consecutive quarter, by 2.7%, on top of a 2.1% increase for the three months ended December 31, 2015. For the twelve months ended December 31, 2016, Same Center NOI increased 3.3% for the consolidated portfolio, on top of a 3.5%

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increase for the twelve months ended December 31, 2015. Portfolio NOI for the consolidated portfolio increased 12.5% and 8.4% for the three and twelve months ended December 31, 2016, respectively, compared to the same periods of 2015. Same Center NOI and Portfolio NOI for the consolidated portfolio exclude lease termination fees, which for the three months ended December 31, 2016 and December 31, 2015 totaled $0.1 million and $0.2 million, respectively, and for the twelve months ended December 31, 2016 and December 31, 2015 totaled $3.6 million and $4.6 million, respectively. Tanger's share of lease termination fees in our unconsolidated joint ventures for the three months ended December 31, 2016 and December 31, 2015 totaled $0.3 million and $0.1 million, respectively, and for the twelve months ended December 31, 2016 and December 31, 2015 totaled $1.7 million and $0.6 million, respectively.
 
Same Center NOI and Portfolio NOI are supplemental non-GAAP financial measures of our operating performance. Complete definitions of Same Center NOI and Portfolio NOI and a reconciliation to the nearest comparable GAAP measure are included in this release.

Approximately 19% of Tanger's consolidated portfolio was affected by major weather events during the third and/or fourth quarters of 2016. In August, the Company's center in Gonzales, Louisiana was closed all or part of six consecutive days due to severe flooding in the region and mandatory curfews that were subsequently imposed. During the third and fourth quarters, severe weather and mandatory evacuations related to Hurricanes Hermine and Matthew, respectively, negatively impacted Tanger's centers in Charleston, South Carolina; Hilton Head, South Carolina (two centers); Myrtle Beach, South Carolina (two centers); Nags Head, North Carolina; and Savannah, Georgia. Consolidated portfolio average tenant sales excluding these eight centers were $394 per square foot for the trailing twelve months ended December 31, 2016, and on a same center basis were stable compared to the twelve months ended December 31, 2015, due in part to continued price deflation prevalent in the apparel industry. Including these centers, consolidated portfolio average tenant sales for the trailing twelve months ended December 31, 2016 were $387 per square foot, and on a same center basis, decreased 80 basis points compared to the twelve months ended December 31, 2015. Sales include stabilized outlet centers and are based on all reporting retailers leasing stores less than 20,000 square feet in size which have occupied such stores for a minimum of twelve months.
 
As of December 31, 2016, the Company's consolidated portfolio was 97.7% occupied, compared to 97.5% on December 31, 2015 and 97.4% on September 30, 2016. During the fourth quarter of 2016, 11 stores totaling approximately 45,000 square feet closed within Tanger's consolidated portfolio related to the bankruptcies of Aeropostale and The Limited. During 2016, the Company recaptured a total of 105,000 square feet within the consolidated portfolio related to bankruptcies (Aeropostale, PacSun, The Limited) and brand-wide store closures (Joseph A. Bank), compared to 157,000 square feet in 2015 and 38,000 square feet in 2014. Tanger has recaptured an additional 54,000 square feet during the first quarter of 2017 related to the bankruptcies of PacSun and The Limited and the closure of all of Kenneth Cole's stores.
Investment Activities Provide Potential Future Growth
During 2016, the Company delivered two new Tanger Outlet Centers totaling 705,000 square feet, an expansion of approximately 5% based on the Company's overall footprint at the beginning of the year. These projects represent a combined total investment of approximately $181.8 million, had a weighted average year-end occupancy rate of 96%, and are currently expected to generate a weighted average stabilized yield of approximately 10.3%. Tanger's net capital requirement for these projects was approximately $134.4 million, substantially all of which had been funded as of December 31, 2016.
During the fourth quarter of 2016, the Company opened the newest Tanger Outlet Center in Daytona Beach, Florida. This wholly-owned center includes 349,000 square feet and features over 80 brand name and designer outlet stores. The property opened 93% leased on November 18, 2016 and has generated positive feedback from shoppers and retailers. Located at the southeast quadrant of I-95 and LPGA Boulevard, the center is adjacent to the main entrance of the Ladies Professional Golf Association corporate headquarters and golf course, approximately 2.5 miles north of Daytona Speedway and approximately 6 miles from the beaches of Volusia County. Tanger's other 2016 new outlet center opening was a 355,000 square foot center in Columbus, Ohio, which opened in June through a 50/50 joint venture.

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Construction of two additional projects is ongoing, both of which are expected to open in 2017. Tanger expects to complete a 123,000 square foot expansion of its Lancaster, Pennsylvania outlet center during the third quarter. In addition, the Company expects a holiday grand opening for its new 352,000 square foot wholly-owned outlet center project in Fort Worth, Texas. Combined, these 2017 projects represent a total investment of approximately $137.9 million with an expected weighted average stabilized yield of approximately 9.3%. As of December 31, 2016, $105.5 million of the Company's expected net capital requirement remained to be funded.
Pre-development and pre-leasing efforts are ongoing for other projects in the Company's shadow pipeline of development opportunities. Land acquisition and commencement of construction for these projects is contingent on Tanger achieving its minimum pre-leasing threshold and securing the required entitlements.
Tanger also increased its legal ownership interest in three key assets to 100% during 2016. The Tanger Outlet Center in Deer Park, New York became a wholly-owned Tanger asset in January as a result of the Company repaying a deferred financing obligation to the noncontrolling interest. Prior to the transaction, Tanger's legal ownership interest in the center was two-thirds, but as the Company received substantially all of the center's economic benefits, the center was consolidated in Tanger's financial results.
In June and August 2016, respectively, the Tanger Outlet Centers in Glendale, Arizona (Westgate) and Savannah, Georgia, became wholly-owned assets as a result of Tanger acquiring its partners' ownership interests in these unconsolidated joint ventures, which were previously accounted for under the equity method of accounting. Prior to these transactions, Tanger's legal ownership interest in the Westgate center was 58% and in the Savannah center was 50%. However, due to preferred equity contributions Tanger made to the Savannah venture, and the returns earned on those contributions, Tanger's estimated economic interest in the book value of the Savannah venture's assets was approximately 98%. Therefore, substantially all of the earnings of the Savannah joint venture were recognized by Tanger as equity in earnings of unconsolidated joint ventures. Effective as of the dates of acquisition, these properties are consolidated in the Company's financial results.
In January 2016, the Company completed the sale of a small outlet center in Fort Myers, Florida near Sanibel Island. The $26.0 million transaction represented a capitalization rate of approximately 7.0% for this bottom-tier asset.
Balance Sheet Summary
During 2016, the Company successfully executed a financing strategy to convert $525 million of debt from floating to fixed interest rates, and further reduced its floating rate debt by an additional $109 million using proceeds from assets sold in 2015 and 2016. In addition to reducing the balance under its unsecured lines of credit with these financing and asset sales proceeds, Tanger repaid $310 million in mortgage loans secured by its outlet centers in Deer Park, New York; Glendale, Arizona (Westgate); and Savannah, Georgia, which unencumbered 12% of the Company's consolidated portfolio square footage.
In April, Tanger expanded its unsecured term loan to $325 million from $250 million, extended the maturity by two years to April 2021, and reduced the interest rate spread by 10 basis points. The Company also entered into interest rate swap agreements in April that fix the base LIBOR rate at an average of 1.03% on $175 million in LIBOR denominated debt through January 2021. These derivatives, combined with interest rate swap agreements in place since October 2013 that fix the base LIBOR rate at an average of 1.30% on $150 million in LIBOR denominated debt through August 2018, effectively lock $325 million of the Company's floating rate debt at an average of 2.11%. Through public offerings in August ($250 million) and October ($100 million), the Company issued $350 million of 3.125% unsecured senior notes due September 2026, at a blended yield of 3.193%, netting proceeds of approximately $344.5 million.
As of December 31, 2016, Tanger had a total enterprise value of approximately $5.3 billion including approximately $1.7 billion of debt outstanding, equating to a 32% debt-to-total market capitalization ratio. The Company had $61 million outstanding under its $520 million in available unsecured lines of credit and total outstanding floating rate debt of $191 million, representing 11% of total debt outstanding, or less than 4% of total enterprise value. Approximately 92% of the Company's consolidated square footage was unencumbered. Tanger's outstanding debt had a weighted average interest rate of 3.82% and a weighted average term to maturity of approximately 5.9 years as of

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December 31, 2016. For the year ended December 31, 2016, Tanger maintained an interest coverage ratio of 4.40 times.

Earnings Guidance for 2017
Based on the Company's internal budgeting process and the Company's view on current market conditions, management currently believes its net income and FFO for 2017 will be as follows:
For the year ended December 31, 2017:
 
 
 
Low Range
High Range
Estimated diluted net income per share
$1.02
$1.08
Noncontrolling interest, depreciation and amortization
 
 
 
of real estate assets including noncontrolling interest
 
 
 
share and our share of unconsolidated joint ventures
1.39
1.39
Estimated diluted FFO per share
$2.41
$2.47

Tanger's estimates reflect the following key assumptions:

The Company expects 2017 Same Center NOI growth between 2% and 3% for the consolidated portfolio, which reflects planned re-merchandising at a number of centers. While Tanger believes these re-merchandising projects will enhance the overall tenant mix and future growth profile of these properties, they are expected to negatively impact 2017 Same Center NOI growth by approximately 100 basis points. Compared to the high end of the range, the low end assumes greater impact from apparel price deflation, potential store closures and the related downtime.
Average general and administrative expense of between $11.2 million and $11.7 million per quarter
Tenant sales remain stable
2017 weighted average diluted common shares of approximately 95.7 million and 100.7 million for earnings per share and FFO per share, respectively
Does not include the impact of any financing activity, the sale of any outparcels, properties or joint ventures interests, or the acquisition of any properties or joint venture partner interests
Does not include any termination rents, which may at times be significant but are not consistent or predictable

Fourth Quarter and Year-End Conference Call

Tanger will host a conference call to discuss its fourth quarter results for analysts, investors and other interested parties on Wednesday, February 15, 2017, at 10:00 a.m. Eastern Time. To access the conference call, listeners should dial 1-877-277-5113 and provide conference ID # 46671271 to be connected to the Tanger Factory Outlet Centers Fourth Quarter 2016 Financial Results call. Alternatively, the call will be web cast by SNL IR Solutions and can be accessed at Tanger's web site, investors.tangeroutlets.com. A telephone replay of the call will be available from February 15, 2017 at 1:00 p.m. through February 22, 2017 at 11:59 p.m. by dialing 1-855-859-2056, conference ID # 46671271. An online archive of the web cast will also be available through February 22, 2017.

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About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. (NYSE:SKT), is a publicly-traded REIT headquartered in Greensboro, North Carolina that operates and owns, or has an ownership interest in, a portfolio of 44 upscale outlet shopping centers and one additional center currently under construction. Tanger's operating properties are located in 22 states coast to coast and in Canada, totaling approximately 15.1 million square feet leased to over 3,100 stores operated by more than 500 different brand name companies. The Company has more than 36 years experience in the outlet industry. Tanger Outlet Centers continue to attract more than 185 million shoppers annually. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter ended December 31, 2016. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the Company's web site at www.tangeroutlets.com.

This news release contains forward-looking statements within the meaning of federal securities laws. These statements include, but are not limited to, estimates of future net income, FFO and AFFO per share, Same Center NOI, general and administrative expenses, and the weighted average diluted common shares and units; the strength and stability of the Company's balance sheet and its portfolio; plans and expectations for new developments; projected openings of current developments; total costs and equity requirements to complete construction of outlet centers and the expected average stabilized yield; the impact of the Company's current re-merchandising plans; well as other statements regarding plans, estimates, intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. 

These forward-looking statements are 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 in the United States and Canada, the Company's ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, the availability and cost of capital, whether the Company's regular evaluation of acquisition and disposition opportunities results in any consummated transactions, and whether or not any such consummated transaction results in an increase or decrease in liquidity, net income or funds from operations, whether projects in our pipeline convert into successful developments, the Company's ability to lease its properties, the Company's ability to implement its plans and strategies for joint venture properties that it does not fully control, the Company's inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition. 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, 2015 and December 31, 2016, when available.

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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 
 
Three months ended
 
Year ended
 
 
December 31,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
Revenues:
 
 
 
 
 
 
 
 
Base rentals (a)
 
$
81,158

 
$
73,889

 
$
308,353

 
$
289,688

Percentage rentals
 
3,750

 
3,261

 
11,221

 
10,157

Expense reimbursements
 
36,697

 
32,653

 
133,818

 
126,468

Management, leasing and other services
 
588

 
1,163

 
3,847

 
5,426

Other income
 
2,366

 
1,835

 
8,595

 
7,630

Total revenues
 
124,559

 
112,801

 
465,834

 
439,369

Expenses:
 
 
 
 
 
 
 
 
Property operating
 
41,689

 
37,582

 
152,017

 
146,503

General and administrative
 
11,328

 
10,038

 
46,696

 
44,469

Acquisition costs
 

 

 
487

 

Depreciation and amortization
 
33,279

 
26,890

 
115,357

 
103,936

Total expenses
 
86,296

 
74,510

 
314,557

 
294,908

Operating income
 
38,263

 
38,291


151,277


144,461

Other income (expense):
 
 
 
 
 
 
 
 
Interest expense
 
(16,469
)
 
(14,078
)
 
(60,669
)
 
(54,188
)
Gain on sale of assets and interests in unconsolidated entities (b)
 

 
86,506

 
6,305

 
120,447

Gain on previously held interest in acquired joint ventures
 

 

 
95,516

 

Other non-operating income (expense)
 
650

 
62

 
1,028

 
(36
)
Income before equity in earnings of unconsolidated joint ventures
 
22,444

 
110,781

 
193,457

 
210,684

Equity in earnings of unconsolidated joint ventures
 
3,192

 
3,182

 
10,872

 
11,484

Net income
 
25,636

 
113,963

 
204,329

 
222,168

Noncontrolling interests in Operating Partnership
 
(1,278
)
 
(5,799
)
 
(10,287
)
 
(11,331
)
Noncontrolling interests in other consolidated partnerships
 
(285
)
 
(32
)
 
(298
)
 
363

Net income attributable to Tanger Factory Outlet Centers, Inc.
 
24,073

 
108,132

 
193,744

 
211,200

Allocation of earnings to participating securities
 
(280
)
 
(1,198
)
 
(1,926
)
 
(2,408
)
Net income available to common shareholders of
Tanger Factory Outlet Centers, Inc.
 
$
23,793

 
$
106,934

 
$
191,818

 
$
208,792

 
 
 
 
 
 
 
 
 
Basic earnings per common share:
 
 
 
 
 
 
 
 
Net income
 
$
0.25

 
$
1.13

 
$
2.02

 
$
2.20

 
 
 
 
 
 
 
 
 
Diluted earnings per common share:
 
 
 
 
 
 
 
 
Net income
 
$
0.25

 
$
1.13

 
$
2.01

 
$
2.20

a.
Includes straight-line rent and market rent adjustments of $809 and $1,382 for the three months ended and $4,155 and $4,341 for the years ended ended December 31, 2016 and 2015, respectively.
b.
Includes gain on the sale of an outparcel of $1.4 million for the year ended December 31, 2016.




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TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
 
December 31,
 
2016
 
2015
Assets
 
 
 
   Rental property:
 
 
 
   Land
$
272,153

 
$
240,267

   Buildings, improvements and fixtures
2,647,477

 
2,249,417

   Construction in progress
46,277

 
23,533

 
2,965,907

 
2,513,217

   Accumulated depreciation
(814,583
)
 
(748,341
)
      Total rental property, net
2,151,324

 
1,764,876

   Cash and cash equivalents
12,222

 
21,558

   Restricted cash (a)

 
121,306

   Investments in unconsolidated joint ventures
128,104

 
201,083

   Deferred lease costs and other intangibles, net
151,579

 
127,089

   Prepaids and other assets
82,985

 
78,913

         Total assets (b)
$
2,526,214

 
$
2,314,825

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities
 
 
 
   Debt:
 
 
 
Senior, unsecured notes, net
$
1,135,309

 
$
789,285

Unsecured term loans, net
322,410

 
265,832

Mortgages payable, net
172,145

 
310,587

Unsecured lines of credit, net
58,002

 
186,220

Total debt (b)
1,687,866

 
1,551,924

Accounts payable and accrued expenses
78,143

 
97,396

Deferred financing obligation

 
28,388

Other liabilities
54,764

 
31,085

         Total liabilities
1,820,773

 
1,708,793

Commitments and contingencies

 

Equity
 
 
 
Tanger Factory Outlet Centers, Inc.:
 
 
 
Common shares, $.01 par value, 300,000,000 shares authorized, 96,095,891 and 95,880,825 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively
961

 
959

   Paid in capital
820,251

 
806,379

   Accumulated distributions in excess of net income
(122,701
)
 
(195,486
)
   Accumulated other comprehensive loss
(28,295
)
 
(36,715
)
         Equity attributable to Tanger Factory Outlet Centers, Inc.
670,216

 
575,137

Equity attributable to noncontrolling interests:
 
 
 
Noncontrolling interests in Operating Partnership
35,066

 
30,309

Noncontrolling interests in other consolidated partnerships
159

 
586

         Total equity
705,441

 
606,032

            Total liabilities and equity
$
2,526,214

 
$
2,314,825

a.
Represents net proceeds from the sale of four properties held by a qualified intermediary.
b.
In accordance with recent accounting guidance, "Simplifying the Presentation of Debt Issuance Costs", our deferred debt origination costs and related accumulated amortization previously recorded in the line item “deferred debt origination costs, net” have been reclassified from assets to the respective debt line items within the liabilities section in the consolidated balance sheet as of December 31, 2015. The reclassification decreased previously reported total assets and total liabilities by $11.9 million.

8





TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CENTER INFORMATION
(Unaudited)

 
 
December 31,
 
 
 
2016
 
2015
 
Gross leasable area open at end of period (in thousands)-
 
 
 
 
 
Consolidated
 
12,710

 
11,746

 
Partially owned - unconsolidated
 
2,348

 
2,747

 
 
 
 
 
 
 
Outlet centers in operation at end of period -
 
 
 
 
 
Consolidated
 
36

 
34

 
Partially owned - unconsolidated
 
8

 
9

 
 
 
 
 
 
 
States operated in at end of period (1)
 
22

 
21

 
Occupancy at end of period (1), (2)
 
97.7
%
 
97.5
%
 

(1)
Excludes the centers in which we have ownership interests but are held in unconsolidated joint ventures.
(2)
Excludes the occupancy rate of centers not yet stabilized (our Foxwoods, Southaven, and Daytona centers, which opened during the second quarter of 2015, fourth quarter of 2015, and fourth quarter of 2016, respectively).

NON-GAAP SUPPLEMENTAL MEASURES

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 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. FFO represents net income (loss) (computed in accordance with GAAP) before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plus depreciation and amortization of real estate assets, impairment losses on depreciable real estate of consolidated real estate and after adjustments for unconsolidated partnerships and joint ventures, including depreciation and amortization, and impairment losses on investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures.

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 Adjusted Funds From Operations ("AFFO"), 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. NAREIT has encouraged its member companies to report their FFO as a supplemental, industry-wide standard measure of REIT operating performance.


9





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;

FFO, which includes discontinued operations, may not be indicative of our ongoing operations; 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.

Adjusted Funds From Operations

We present AFFO, as a supplemental measure of our performance. We define AFFO 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. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating AFFO 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 AFFO should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

We present AFFO 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 AFFO 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 AFFO when determining incentive compensation.

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

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

AFFO 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 AFFO does not reflect any cash requirements for such replacements;

AFFO 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 AFFO differently than we do, limiting its usefulness as a comparative measure.


10





Because of these limitations, AFFO 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 AFFO only as a supplemental measure.

Portfolio Net Operating Income and Same Center NOI

We present portfolio net operating income ("Portfolio NOI") and 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 and gains or losses on the sale of outparcels 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 AFFO. 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.



11





TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SUPPLEMENTAL MEASURES
(in thousands, except per share)
(Unaudited)

Below is a reconciliation of net income to FFO and AFFO:
 
 
Three months ended
 
Year ended
 
 
December 31,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
Net income
 
$
25,636

 
$
113,963

 
$
204,329

 
$
222,168

Adjusted for:
 
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets - consolidated
 
32,653

 
26,531

 
113,645

 
102,515

Depreciation and amortization of real estate assets - unconsolidated joint ventures
 
3,438

 
5,528

 
18,910

 
20,053

Impairment charges - unconsolidated joint ventures
 

 

 
2,919

 

Gain on sale of assets and interests in unconsolidated entities
 

 
(86,506
)
 
(4,887
)
 
(120,447
)
Gain on previously held interest in acquired joint ventures
 

 

 
(95,516
)
 

FFO
 
61,727

 
59,516

 
239,400

 
224,289

FFO attributable to noncontrolling interests in other consolidated partnerships
 
(286
)
 
(57
)
 
(348
)
 
268

Allocation of earnings to participating securities
 
(520
)
 
(625
)
 
(2,192
)
 
(2,408
)
FFO available to common shareholders  (1)
 
$
60,921

 
$
58,834

 
$
236,860

 
$
222,149

As further adjusted for:
 
 
 
 
 
 
 
 
Director and officer compensation upon termination of service  (2)
 

 
(731
)
 
1,180

 
(731
)
Acquisition costs
 

 

 
487

 

Demolition costs
 

 

 
441

 

Gain on sale of outparcel
 

 

 
(1,418
)
 

Write-off of debt discount due to repayment of debt prior to maturity  (3)
 

 

 
882

 

Impact of above adjustments to the allocation of earnings to participating securities
 

 
8

 
(15
)
 
8

AFFO available to common shareholders (1)
 
$
60,921

 
$
58,111

 
$
238,417

 
$
221,426

FFO available to common shareholders per share - diluted (1)
 
$
0.61

 
$
0.59

 
$
2.36

 
$
2.23

AFFO available to common shareholders per share - diluted (1)
 
$
0.61

 
$
0.58

 
$
2.37

 
$
2.22

 
 
 
 
 
 
 
 
 
Weighted Average Shares
 
 
 
 
 
 
 
 
Basic weighted average common shares
 
95,186

 
94,768

 
95,102

 
94,698

Effect of notional units
 
202

 

 
175

 

Effect of outstanding options and restricted common shares
 
67

 
59

 
68

 
61

Diluted weighted average common shares (for earnings per share computations)
 
95,455

 
94,827

 
95,345

 
94,759

Exchangeable operating partnership units
 
5,053

 
5,078

 
5,053

 
5,079

Diluted weighted average common shares (for FFO and AFFO per share computations) (1)
 
100,508

 
99,905

 
100,398

 
99,838


(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.
(2)
For the year ended December 31, 2016, represents cash severance and accelerated vesting of restricted shares associated with the departure of an officer in August 2016 and the accelerated vesting of restricted shares due to the death of a director in February 2016. For the three months and year ended December 31, 2015, represents the reversal of certain share-based compensation awards previously recognized on awards not expected to vest due to the announcement that the Company’s then Chief Financial Officer would retire in May 2016.
(3)
Due to the January 28, 2016 early repayment of the $150 million mortgage secured by the Deer Park, New York property, which was scheduled to mature August 30, 2018.

12








Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio:
 
 
Three months ended
 
Year ended
 
 
December 31,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
Net income
 
$
25,636

 
$
113,963

 
$
204,329

 
$
222,168

Adjusted to exclude:
 
 
 
 
 
 
 
 
Equity in earnings of unconsolidated joint ventures
 
(3,192
)
 
(3,182
)
 
(10,872
)
 
(11,484
)
Interest expense
 
16,469

 
14,078

 
60,669

 
54,188

Gain on sale of assets and interests in unconsolidated entities
 

 
(86,506
)
 
(6,305
)
 
(120,447
)
Gain on previously held interest in acquired joint venture
 

 

 
(95,516
)
 

Other non-operating (income) expense
 
(650
)
 
(62
)
 
(1,028
)
 
36

Depreciation and amortization
 
33,279

 
26,890

 
115,357

 
103,936

Other non-property (income) expenses
 
674

 
(319
)
 
(23
)
 
(1,317
)
Acquisition costs
 

 

 
487

 

Demolition Costs
 

 

 
441

 

Corporate general and administrative expenses
 
11,064

 
9,887

 
46,012

 
43,966

Non-cash adjustments (1)
 
(674
)
 
(1,245
)
 
(3,613
)
 
(3,792
)
Termination rents
 
(107
)
 
(155
)
 
(3,599
)
 
(4,576
)
Portfolio NOI
 
82,499

 
73,349

 
306,339

 
282,678

Non-same center NOI (2)
 
(11,970
)
 
(4,680
)
 
(33,152
)
 
(18,340
)
Same Center NOI
 
$
70,529

 
$
68,669

 
$
273,187

 
$
264,338


(1)
Non-cash items include straight-line rent, net above and below market rent amortization and gains or losses on outparcel sales.
(2)
Excluded from Same Center NOI: Daytona Beach outlet center, which opened in November 2016, Foxwoods outlet center, which opened in May of 2015; Grand Rapids outlet center, which opened in July of 2015; Southaven outlet center, which opened in November 2015; Kittery I & II, Tuscola and West Branch outlet centers, which were sold in September 2015; Barstow outlet center, which was sold in October 2015; Fort Myers outlet center, which was sold in January 2016; Glendale outlet center (Westgate), which was acquired in June 2016; and Savannah outlet center, which was acquired in August 2016.


13


(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit


Exhibit 99.2
38066180_tangerlargea01a03a01.jpg
Tanger Factory Outlet Centers, Inc.
  
Supplemental Operating and Financial Data
December 31, 2016


1
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.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 fiscal year ended December 31, 2015 and for the fiscal year ended December 31, 2016 (when available).
  
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 12/31/2016
38066180_tangeroutlet-small93015.jpg



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
Average Tenant Sales Per Square Foot by Outlet Center Ranking
Major Tenants
Lease Expirations as of December 31, 2016
Leasing Activity
Development Summary
 
 
Financial Data:
 
 
 
Consolidated Balance Sheets
Consolidated Statements of Operations
Unconsolidated Joint Venture Information
Debt Outstanding Summary
Future Scheduled Principal Payments
Senior Unsecured Notes Financial Covenants
 
 
Non-GAAP Supplemental Measures:
 
 
 
Non-GAAP Definitions
FFO and FAD Analysis
Portfolio NOI and Same Center NOI
Pro Rata Balance Sheet Information
Pro Rata Statement of Operations Information
 
 
Investor Information


3
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Geographic Diversification

Consolidated Properties
As of December 31, 2016
State
# of Centers
 
GLA
 
% of GLA
South Carolina
5

 
1,598,398

 
13
%
New York
2

 
1,478,780

 
12
%
Georgia
3

 
1,111,675

 
9
%
Pennsylvania
3

 
861,460

 
7
%
Michigan
2

 
671,539

 
5
%
Texas
2

 
649,556

 
5
%
Connecticut
2

 
601,512

 
5
%
Alabama
1

 
556,677

 
4
%
Delaware
1

 
556,409

 
4
%
North Carolina
3

 
505,123

 
4
%
New Jersey
1

 
489,706

 
4
%
Tennessee
1

 
448,335

 
3
%
Ohio
1

 
411,776

 
3
%
Arizona
1

 
407,673

 
3
%
Florida
1

 
349,402

 
3
%
Missouri
1

 
329,861

 
3
%
Louisiana
1

 
321,066

 
3
%
Mississippi
1

 
320,337

 
2
%
Utah
1

 
319,661

 
2
%
Iowa
1

 
276,331

 
2
%
New Hampshire
1

 
245,698

 
2
%
Maryland
1

 
198,800

 
2
%
Total
36

 
12,709,775

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

 
397,838

 
50.00
%
Columbus, OH
1

 
355,220

 
50.00
%
Texas City, TX
1

 
352,705

 
50.00
%
National Harbor, MD
1

 
341,156

 
50.00
%
Ottawa, ON
1

 
316,494

 
50.00
%
Cookstown, ON
1

 
307,789

 
50.00
%
Bromont, QC
1

 
161,307

 
50.00
%
Saint-Sauveur, QC
1

 
115,771

 
50.00
%
Total
8

 
2,348,280

 
 


4
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Property Summary - Occupancy at End of Each Period Shown
Consolidated properties
 
 
 
 
 
 
 
 
 
 
 
Location
Total GLA
12/31/16
 
% Occupied
12/31/16
 
% Occupied
9/30/16
 
% Occupied
6/30/16
 
% Occupied
3/31/16
 
% Occupied
12/31/15
 
Deer Park, NY
749,074

 
97
%
 
97
%
 
96
%
 
96
%
 
95
%
 
Riverhead, NY
729,706

 
99
%
 
99
%
 
99
%
 
99
%
 
99
%
 
Foley, AL
556,677

 
99
%
 
97
%
 
96
%
 
94
%
 
96
%
 
Rehoboth Beach, DE
556,409

 
99
%
 
99
%
 
100
%
 
99
%
 
100
%
 
Atlantic City, NJ
489,706

 
90
%
 
90
%
 
92
%
 
91
%
 
91
%
 
San Marcos, TX
471,756

 
98
%
 
97
%
 
98
%
 
98
%
 
98
%
 
Sevierville, TN
448,335

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

 
98
%
 
97
%
 
97
%
 
96
%
 
95
%
 
Savannah, GA
419,197

 
99
%
 
99
%
 
N/A

 
N/A

 
N/A

 
Jeffersonville, OH
411,776

 
96
%
 
96
%
 
98
%
 
98
%
 
100
%
 
Glendale, AZ (Westgate)
407,673

 
100
%
 
99
%
 
97
%
 
N/A

 
N/A

 
Myrtle Beach Hwy 17, SC
402,800

 
98
%
 
99
%
 
100
%
 
98
%
 
100
%
 
Charleston, SC
382,117

 
97
%
 
98
%
 
98
%
 
98
%
 
99
%
 
Pittsburgh, PA
372,958

 
99
%
 
100
%
 
100
%
 
100
%
 
100
%
 
Commerce, GA
371,408

 
100
%
 
99
%
 
99
%
 
94
%
 
97
%
 
Grand Rapids, MI
357,080

 
97
%
 
96
%
 
94
%
 
94
%
 
95
%
 
Daytona Beach, FL
349,402

 
94
%
 
N/A

 
N/A

 
N/A

 
N/A

 
Branson, MO
329,861

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

 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
Gonzales, LA
321,066

 
99
%
 
99
%
 
98
%
 
98
%
 
99
%
 
Southaven, MS
320,337

 
97
%
 
96
%
 
96
%
 
97
%
 
96
%
 
Park City, UT
319,661

 
100
%
 
98
%
 
97
%
 
98
%
 
100
%
 
Mebane, NC
318,910

 
100
%
 
100
%
 
97
%
 
98
%
 
100
%
 
Howell, MI
314,459

 
94
%
 
92
%
 
92
%
 
92
%
 
94
%
 
Mashantucket, CT (Foxwoods)
311,614

 
96
%
 
96
%
 
96
%
 
96
%
 
95
%
 
Westbrook, CT
289,898

 
86
%
 
87
%
 
87
%
 
92
%
 
94
%
 
Williamsburg, IA
276,331

 
99
%
 
99
%
 
97
%
 
95
%
 
99
%
 
Hershey, PA
247,500

 
100
%
 
100
%
 
100
%
 
99
%
 
100
%
 
Tilton, NH
245,698

 
99
%
 
100
%
 
97
%
 
97
%
 
98
%
 
Lancaster, PA
241,002

 
98
%
 
96
%
 
97
%
 
97
%
 
99
%
 
Hilton Head II, SC
206,564

 
100
%
 
98
%
 
94
%
 
95
%
 
97
%
 
Ocean City, MD
198,800

 
80
%
 
77
%
 
81
%
 
79
%
 
79
%
 
Hilton Head I, SC
181,670

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

 
98
%
 
98
%
 
98
%
 
98
%
 
98
%
 
Blowing Rock, NC
104,052

 
98
%
 
98
%
 
99
%
 
100
%
 
100
%
 
Nags Head, NC
82,161

 
96
%
 
100
%
 
100
%
 
97
%
 
97
%
 
Fort Myers, FL (1)
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
91
%
 
Total
12,709,775

 
98
%
(2) 
97
%
(3) 
97
%
(4) 
97
%
(4) 
98
%
(4)(5) 

(1)
Sold Fort Myers center in January 2016.
(2)
Excludes the occupancy rate of centers not yet stabilized (our Foxwoods, Southaven, and Daytona centers, which opened during the second quarter of 2015, fourth quarter of 2015, and fourth quarter of 2016, respectively).
(3)
Excludes the occupancy rate of centers not yet stabilized (our Foxwoods, and Southaven centers, which opened during the second quarter and fourth quarter of 2015, respectively).
(4)
Excludes the occupancy rate of centers not yet stabilized (Foxwoods, Grand Rapids and Southaven centers which opened during the second, third and fourth quarters of 2015, respectively).
(5)
Excludes the occupancy rate of the Fort Myers center which was sold in January 2016.


5
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Unconsolidated joint venture properties
 
 
 
 
 
 
 
 
 
 
 
Location
Total GLA
12/31/16
 
% Occupied
12/31/16
 
% Occupied
9/30/16
 
% Occupied
6/30/16
 
% Occupied
3/31/16
 
% Occupied
12/31/15
 
Charlotte, NC
397,838

 
98
%
 
97
%
 
97
%
 
98
%
 
99
%
 
Columbus, OH (1)
355,220

 
98
%
 
96
%
 
95
%
 
N/A

 
N/A

 
Texas City, TX (Galveston/Houston)
352,705

 
99
%
 
99
%
 
99
%
 
97
%
 
99
%
 
National Harbor, MD
341,156

 
99
%
 
99
%
 
98
%
 
99
%
 
99
%
 
Ottawa, ON
316,494

 
99
%
 
98
%
 
95
%
 
95
%
 
97
%
 
Cookstown, ON
307,789

 
99
%
 
99
%
 
99
%
 
99
%
 
100
%
 
Bromont, QC
161,307

 
69
%
 
72
%
 
72
%
 
74
%
 
75
%
 
Saint-Sauveur, QC
115,771

 
97
%
 
94
%
 
97
%
 
97
%
 
97
%
 
Savannah, GA (2)
N/A

 
N/A

 
N/A

 
99
%
 
99
%
 
99
%
 
Glendale, AZ (Westgate) (3)
N/A

 
N/A

 
N/A

 
N/A

 
96
%
 
100
%
 
Total
2,348,280

 
96
%
(4) 
96
%
(4) 
96
%
(4) 
96
%
 
98
%
 

(1)
Center opened in June 2016.
(2)
The Company acquired our partners' interest in the Savannah outlet center in August 2016. The center is now reported above in the section labeled consolidated properties.
(3)
The Company acquired our partners' interest in the Westgate outlet center in June 2016. The center is now reported above in the section labeled consolidated properties.
(4)
Excludes the occupancy rate at our Columbus center which opened in June 2016 and has not yet stabilized.






6
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Portfolio Occupancy at the End of Each Period (1) 
38066180_skt8kex99_chart-01249.jpg

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




7
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Average Tenant Sales Per Square Foot by Outlet Center Ranking As of December 31, 2016(1) 
 
 
 
 12 Months
 Period End
 Sq Ft
% of
% of
Portfolio
 Ranking (2)
 SPSF
 Occupancy
 (thousands)
 Square Feet
NOI (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
528

99
%
2,802

24
%
32
%
Centers 6 - 10
$
436

99
%
1,702

15
%
16
%
Centers 11 - 15
$
395

99
%
1,215

10
%
10
%
Centers 16 - 20
$
356

96
%
2,011

17
%
18
%
Centers 21 - 25
$
315

99
%
1,868

16
%
13
%
Centers 26 - 33
$
269

95
%
2,130

18
%
11
%
 
 
 
 
 
 
 
 
 
 
 
 Cumulative
 Cumulative
 Cumulative
 Cumulative
 Cumulative
% of
Portfolio
 
 
 
 12 Months
 Period End
 Sq Ft
% of
NOI, as
 Ranking (2)
 SPSF
 Occupancy
 (thousands)
 Square Feet
adjusted (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
528

99
%
2,802

24
%
32
%
Centers 1 - 10
$
490

99
%
4,504

39
%
48
%
Centers 1 - 15
$
469

99
%
5,719

49
%
58
%
Centers 1 - 20
$
437

98
%
7,730

66
%
76
%
Centers 1 - 25
$
414

98
%
9,598

82
%
89
%
Centers 1 - 33
$
387

98
%
11,728

100
%
100
%
 
 
 
 
 
 
 
 
Unconsolidated centers (4)
$
436

99
%
1,092

n/a

n/a

 
 
 
 
 
 
 
 
(1)
Sales are based on reports by retailers leasing outlet center stores for the trailing 12 months for tenants which have occupied such 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 twelve months ended December 31, 2016.
 
 
 
 
 
 
 
 
(2)
Outlet centers included in each ranking group above are as follows (in alphabetical order):
 
Centers 1 - 5:
Deer Park, NY
Mebane, NC
Rehoboth Beach, DE
Riverhead, NY
Sevierville, TN
 
 
Centers 6 - 10:
Branson, MO
Glendale, AZ
Lancaster, PA
Locust Grove, GA
Myrtle Beach 17, SC
 
 
Centers 11 - 15:
Charleston, SC
Gonzales, LA
Hershey, PA
Hilton Head I, SC
Nags Head, NC
 
 
Centers 16 - 20:
Atlantic City, NJ
Grand Rapids, NC
Park City, UT
Pittsburgh, PA
San Marcos, TX
 
 
Centers 21 - 25:
Commerce, GA
Foley, AL
Hilton Head II, SC
Howell, MI
Savannah, GA
 
 
Centers 26 - 33:
Blowing Rock, NC
Jeffersonville, OH
Myrtle Beach 501, SC
Ocean City, MD
Terrell, TX
 
 
 
Tilton, NH
Westbrook, CT
Williamsburg, OH
 
 
 
 
 
Excludes outlet centers not open for 12 full calendar months and the centers in Mashantucket, CT (Foxwoods) and Southaven, MS, which opened in the second and fourth quarters of 2015, respectively and have not yet stabilized.
 
 
 
 
 
 
 
 
(3)
Based on the Company’s forecast of 2017 Portfolio NOI (see Non-GAAP Definitions). The Company’s forecast is based on management’s estimates as of December 31, 2016 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 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, 2015 and December 31, 2016 when available.
 
 
 
 
 
 
 
 
(4)
Includes domestic outlet centers open 12 full calendar months (in alphabetical order):
 
Unconsolidated:
Charlotte, NC
National Harbor, MD
Texas City, TX
 
 
 

8
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Major Tenants (1) 
Ten Largest Tenants as of December 31, 2016
Tenant
# of
Stores

 
GLA

 
% of
Total GLA

The Gap, Inc.
92

 
970,454

 
7.6
%
Ascena Retail Group, Inc.
148

 
889,970

 
7.0
%
Nike, Inc.
42

 
440,037

 
3.5
%
PVH Corp.
67

 
407,192

 
3.2
%
V. F. Corporation
44

 
390,213

 
3.1
%
Ralph Lauren Corporation
38

 
365,246

 
2.9
%
G-III Apparel Group, Ltd.
69

 
320,611

 
2.5
%
Carter's, Inc.
63

 
276,606

 
2.2
%
H&M Group
13

 
271,854

 
2.1
%
Under Armour, Inc.
33

 
247,396

 
1.9
%
Total of All Listed Above
609

 
4,579,579

 
36.0
%
(1)
Excludes unconsolidated outlet centers. See table on page 4.


9
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Lease Expirations as of December 31, 2016
38066180_skt8kex99_chart-01135.jpg


38066180_skt8kex99_chart-03144.jpg

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


10
Supplemental Operating and Financial Data for the
Quarter Ended 12/31/2016
38066180_tangeroutlet-small93015.jpg



Leasing Activity (1) (2)  
 
3/31/2016
 
6/30/2016
 
9/30/2016
 
12/31/2016
 
Year to Date
 
Prior
Year to
Date(3)
Re-tenanted Space :
 
 
 

 
 

 
 

 
 

 
 

Number of leases
63

 
35

 
20

 
6

 
124

 
119

Gross leasable area
188,245

 
113,911

 
65,970

 
16,098

 
384,224

 
443,877

New initial base rent per square foot
$
29.80

 
$
27.62

 
$
32.25

 
$
26.34

 
$
29.43

 
$
28.13

Prior expiring base rent per square foot
$
25.95

 
$
25.87

 
$
28.47

 
$
30.00

 
$
26.53

 
$
24.81

Percent increase (4)
14.8
%
 
6.8
%
 
13.3
%
 
(12.2
)%
 
10.9
%
 
13.4
%
 
 
 
 
 
 
 
 
 
 
 


New straight line base rent per square foot
$
32.84

 
$
30.54

 
$
35.96

 
$
31.48

 
$
32.64

 
$
31.48

Prior straight line base rent per square foot
$
25.19

 
$
24.67

 
$
27.58

 
$
29.32

 
$
25.62

 
$
24.33

Percent increase (4)
30.4
%
 
23.8
%
 
30.4
%
 
7.4
 %
 
27.4
%
 
29.4
%
 
 
 
 
 
 
 
 
 
 
 


Renewed Space:
 
 
 
 
 
 
 
 
 
 


Number of leases
166

 
34

 
26

 
49

 
275

 
278

Gross leasable area
762,300

 
171,736

 
121,879

 
166,937

 
1,222,852

 
1,282,316

New initial base rent per square foot
$
24.69

 
$
24.86

 
$
25.57

 
$
29.13

 
$
25.41

 
$
24.73

Prior expiring base rent per square foot
$
22.78

 
$
23.50

 
$
24.04

 
$
24.48

 
$
23.24

 
$
22.35

Percent increase
8.4
%
 
5.8
%
 
6.4
%
 
19.0
 %
 
9.3
%
 
10.7
%
 
 
 
 
 
 
 
 
 
 
 


New straight line base rent per square foot
$
25.91

 
$
26.18

 
$
26.25

 
$
30.37

 
$
26.59

 
$
26.06

Prior straight line base rent per square foot
$
21.96

 
$
22.82

 
$
23.50

 
$
24.63

 
$
22.60

 
$
21.77

Percent increase
18.0
%
 
14.7
%
 
11.7
%
 
23.3
 %
 
17.7
%
 
19.7
%
 
 
 
 
 
 
 
 
 
 
 


Total Re-tenanted and Renewed Space:
 
 
 
 
 
 
 
 
 
 


Number of leases
229

 
69

 
46

 
55

 
399

 
397

Gross leasable area
950,545

 
285,647

 
187,849

 
183,035

 
1,607,076