Drives Blended Rent Spreads of 4.1%
Grows Occupancy by 170 Basis Points to
94.9%
Raises Midpoint of Guidance
GREENSBORO, N.C., Aug. 8, 2022
/PRNewswire/ -- Tanger Factory Outlet Centers, Inc.
(NYSE:SKT), a leading owner and operator of upscale open-air outlet
centers, today reported financial results and operating metrics for
the three and six months ended June 30, 2022.
"Our results for the first half of 2022 demonstrate the
continued achievement of our strategic priorities: accelerating
leasing, commercializing marketing and reshaping operations at
Tanger's open-air shopping destinations," said Stephen Yalof, President and Chief Executive
Officer. "With a focus on delivering continued NOI growth, we are
executing permanent leases with solid rent spreads, growing our
occupancy and lengthening lease terms. This leasing momentum and
sustained traffic levels reflect retailers' enthusiasm to be
located in our centers and consumers recognizing the value that can
be found at Tanger."
Mr. Yalof continued, "We continue to pursue opportunities to
generate new revenue streams and unlock additional value in our
portfolio. In May, we broke ground on our 37th shopping
center in Nashville, and we
recently announced our strategic partnership at Tanger Outlets Palm
Beach, which is the 38th center in our portfolio. We are
committed to delivering long-term growth for Tanger shareholders
and are well-positioned to do so supported by our strong balance
sheet and liquidity."
Second Quarter Results
- Net income available to common shareholders was $0.19 per share, or $19.7
million, compared to $0.02 per
share, or $2.3 million, for the prior
year period. The prior year period included a loss on the early
extinguishment of debt of $14.0
million, or $0.13 per
share.
- Funds From Operations ("FFO") available to common shareholders
was $0.45 per share, or $48.8 million, compared to $0.30 per share, or $32.4
million, for the prior year period.
- Core Funds From Operations ("Core FFO") available to common
shareholders was $0.45 per share, or
$48.8 million, compared to
$0.43 per share, or $46.3 million, for the prior year period. Core
FFO for the second quarter of 2022 excludes general and
administrative expense of $2.4
million, or approximately $0.02 per share, related to certain executive
severance costs, offset by a gain on sale of the corporate aircraft
of $2.4 million, or approximately
$0.02 per share. Core FFO in the
second quarter of 2021 excludes the loss on the early
extinguishment of debt discussed above. The Company does not
consider these items indicative of its ongoing operating
performance.
Year-to-Date Results
- Net income available to common shareholders was $0.38 per share, or $40.0
million, compared to $0.06 per
share, or $6.2 million, for the prior
year period. The prior year period included the loss on the early
extinguishment of debt discussed above.
- FFO available to common shareholders was $0.90 per share, or $98.2
million, compared to $0.68 per
share, or $70.6 million, for the
prior year period.
- Core FFO available to common shareholders was $0.90 per share, or $98.3
million, compared to $0.84 per
share, or $86.9 million, for the
prior year period. Core FFO for the first half of 2022 excludes the
general and administrative expense and gain on sale of the
corporate aircraft discussed above. Core FFO for the first half of
2021 excludes the loss on the early extinguishment of debt
discussed above and general and administrative expense of
$2.4 million, or $0.02 per share, for compensation costs related
to a voluntary retirement plan and other executive severance costs.
The Company does not consider these items indicative of its ongoing
operating performance.
FFO and Core FFO 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 Core FFO, if applicable, are included in this
release. Per share amounts for net income, FFO and Core FFO are on
a diluted basis.
Operating Metrics
Key portfolio results for the total portfolio, including the
Company's pro rata share of unconsolidated joint ventures, were as
follows:
- Occupancy was 94.9% on June 30,
2022, compared to 94.3% on March 31,
2022 and 93.2% on June 30,
2021
- Average tenant sales productivity grew to $450 per square foot for the twelve months ended
June 30, 2022 from $423 per square foot for the twelve months ended
June 30, 2021, an increase of 6.4%
for both the total portfolio and on a same center basis
- Lease termination fees totaled $35,000 for the second quarter of 2022 and
$2.7 million for the first half of
2022, compared to $0.7 million for
the second quarter of 2021 and $1.4
million for the first half of 2021
- Same center net operating income ("Same Center NOI") increased
5.1% to $79.8 million for the second
quarter of 2022 from $75.9 million
for the second quarter of 2021 and increased 7.4% to $158.0 million for the first half of 2022 from
$147.1 million for the first half of
2021, driven by growth in occupancy and rental rates in 2022. Same
Center NOI for the second quarter and first half of 2022 was also
impacted by the reversal of revenue reserves (excluding
straight-line rents) of approximately $0.6
million and $3.7 million,
respectively, compared to $0.7
million and $2.4 million in
the second quarter and first half of 2021, respectively. In
addition, during the second quarter and first half of 2022, the
Company recognized a straight-line rent reserve reversal (which
does not impact Same Center NOI) of approximately $1.3 million
Same Center NOI is a supplemental non-GAAP financial measure of
operating performance. A complete definition of Same Center NOI and
a reconciliation to the nearest comparable GAAP measure is included
in this release.
Development and Management Activity
In May 2022, Tanger broke ground
on its 37th center in Nashville, TN. The center, which will be
approximately 290,000 square feet, is expected to be completed in
the fall of 2023 at an estimated total cost of $135 million to $145
million with a projected stabilized yield of 7.0% to 7.5%.
Through June 30, 2022, Tanger had incurred costs of
$18.3 million associated with this
development.
In August 2022, Tanger announced a
strategic partnership with Clarion Partners at Palm Beach Outlets
in West Palm Beach, Florida.
Effective July 28, 2022, Tanger
assumed marketing, leasing and property management responsibilities
at the 455,000 square foot property, which has been rebranded as
Tanger Outlets Palm Beach and is the 38th center in
Tanger's portfolio.
Leasing Activity
As of July 31, 2022, Tanger had
renewals executed or in process for 66.4% of total portfolio space
(including the Company's pro rata share of unconsolidated joint
ventures) scheduled to expire during 2022 compared to 59.8% of
expiring 2021 space as of July 31,
2021.
The following key leasing metrics are presented for the total
domestic portfolio, including the Company's pro rata share of
domestic unconsolidated joint ventures.
- Total renewed or re-tenanted leases (including leases for both
comparable and non-comparable space) executed during the twelve
months ended June 30, 2022 included
345 leases, totaling over 1.7 million square feet
- Blended average rental rates increased 4.1% on a cash basis for
all comparable renewals and re-tenanted leases that were executed
during the twelve months ended June 30,
2022, representing a sequential improvement of 280 basis
points. Comparable space excludes leases for space that was vacant
for more than 12 months (non-comparable space)
Dividend
In July 2022, the Company's Board
of Directors declared a quarterly cash dividend of $0.20 per share, payable on August 15, 2022 to holders of record on
July 29, 2022.
Balance Sheet and Liquidity
The following balance sheet and liquidity metrics are presented
for the total portfolio, including the Company's pro rata share of
unconsolidated joint ventures. As of June 30, 2022:
- Weighted average interest rate was 3.2% and weighted average
term to maturity of outstanding debt, including extension options,
was approximately 5.1 years
- Approximately 88% of the total portfolio's square footage was
unencumbered by mortgages
- Interest coverage ratio (calculated as Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization for Real Estate
("Adjusted EBITDAre") divided by interest expense) was 4.8x times
for the first half of 2022 and 4.7x for the twelve months ended
June 30, 2022
- Net debt to Adjusted EBITDAre (calculated as net debt divided
by Adjusted EBITDAre) improved to 5.3x for the twelve months ended
June 30, 2022 from 5.5x for the year
ended December 31, 2021
- Total outstanding floating rate debt was approximately
$107.9 million (principal),
representing approximately 7% of total debt outstanding and 4% of
total enterprise value
- Funds Available for Distribution ("FAD") payout ratio was 42%
for the first half of 2022
Adjusted EBITDAre, Net debt and FAD are supplemental non-GAAP
financial measures of operating performance. Definitions of
Adjusted EBITDAre, Net debt and FAD and reconciliations to the
nearest comparable GAAP measures are included in this release.
Guidance for 2022
Based on the Company's internal budgeting process and its view
on current market conditions, management currently believes the
Company's net income and FFO per share for 2022 will be as
follows:
For the year ending
December 31, 2022:
|
Revised
|
Previous
|
|
Low
Range
|
High
Range
|
Low
Range
|
High
Range
|
Estimated diluted
net income per share
|
$
0.71
|
$
0.77
|
$
0.69
|
$
0.77
|
Depreciation and
amortization of real estate assets - consolidated and the
Company's share of unconsolidated joint ventures
|
1.02
|
1.02
|
1.02
|
1.02
|
Estimated diluted
FFO per share
|
$
1.73
|
$
1.79
|
$
1.71
|
$
1.79
|
Compensation related
to executive severance
|
0.02
|
0.02
|
—
|
—
|
Gain on sale of
non-real estate asset
|
(0.02)
|
(0.02)
|
—
|
—
|
Estimated diluted
Core FFO per share
|
$
1.73
|
$
1.79
|
$
1.71
|
$
1.79
|
Tanger's estimates reflect the following key assumptions:
- Same Center NOI growth for total portfolio (including the
Company's pro rata share of unconsolidated joint ventures) between
3.0% and 4.5%
- General and administrative expense, excluding executive
severance costs, of between $69
million and $72 million. The
year-over-year growth in general and administrative expense
reflects Tanger's continued investments in building the team and
technology critical to executing its core strategies of reshaping
operations, accelerating leasing and growing commercial strategy
through digital transformation
- 2022 weighted average diluted common shares of approximately
105.0 million for earnings per share and 110.0 million for FFO and
Core FFO per share
- Combined annual recurring capital expenditures and second
generation tenant allowances of approximately $45 million to $55
million
- Does not include the impact of the acquisition or sale of any
outparcels, properties or joint venture interests, or any
additional financing activity
Second Quarter 2022 Conference Call
Tanger will host a conference call to discuss its second quarter
2022 results for analysts, investors and other interested parties
on Tuesday, August 9, 2022, at 8:30
a.m. Eastern Time. To access the conference call, listeners
should dial 1-877-605-1702. Alternatively, a live audio webcast of
this call will be available to the public on Tanger's Investor
Relations website, investors.tangeroutlets.com. A telephone replay
of the call will be available from August 9, 2022 at
approximately 11:30 a.m. through
August 23, 2022 at 11:59 p.m. by
dialing 1-877-660-6853, replay access code #13730784. An online
archive of the webcast will also be available through
August 23, 2022.
About Tanger Factory Outlet Centers, Inc.
Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a leading
operator of upscale open-air outlet centers that owns (or has an
ownership interest in) and/or manages a portfolio of 37 centers
with an additional center currently under development. Tanger's
operating properties are located in 20 states and in Canada, totaling approximately 14.0 million
square feet, leased to over 2,700 stores operated by more than 600
different brand name companies. The Company has more than 41 years
of experience in the outlet industry and is a publicly-traded REIT.
Tanger is furnishing a Form 8-K with the Securities and Exchange
Commission ("SEC") that includes a supplemental information package
for the quarter ended June 30, 2022. For more information on
Tanger Outlet Centers, call 1-800-4TANGER or visit the Company's
website at www.tangeroutlets.com.
Safe Harbor Statement
This news release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The Company intends such forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995 and includes this statement for purposes of complying
with the safe harbor provisions. Forward-looking statements, which
are based on certain assumptions and describe the Company's future
plans, strategies and expectations, are generally identifiable by
use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project," "will," "forecast" or similar expressions,
and include the Company's expectations regarding future financial
results and assumptions underlying that guidance, long-term growth,
trends in retail traffic and tenant revenues, development
initiatives and strategic partnerships, renewal trends, new revenue
streams, its strategy and value proposition to retailers, uses of
capital, liquidity, dividend payments and cash flows.
You should not rely on forward-looking statements since they
involve known and unknown risks, uncertainties and other important
factors which are, in some cases, beyond our control and which
could materially affect our actual results, performance or
achievements. Important factors which may cause actual results to
differ materially from current expectations include, but are not
limited to: risks related to the impact of the COVID-19 pandemic
and macroeconomic conditions, including rising interest rates and
inflation, on our tenants and on our business, financial condition,
liquidity, results of operations and compliance with debt
covenants; our inability to develop new outlet centers or expand
existing outlet centers successfully; risks related to the economic
performance and market value of our outlet centers; the relative
illiquidity of real property investments; impairment charges
affecting our properties; our dispositions of assets may not
achieve anticipated results; competition for the acquisition and
development of outlet centers, and our inability to complete outlet
centers we have identified; environmental regulations affecting our
business; risks associated with possible terrorist activity or
other acts or threats of violence and threats to public safety; our
dependence on rental income from real property; our dependence on
the results of operations of our retailers and their bankruptcy,
early termination or closing could adversely affect us; the fact
that certain of our properties are subject to ownership interests
held by third parties, whose interests may conflict with ours;
risks related to climate change; costs associated with the
increased focus on environmental, sustainability and social
initiatives; risks related to uninsured losses; the risk that
consumer, travel, shopping and spending habits may change; risks
associated with our Canadian investments; risks associated with
attracting and retaining key personnel; risks associated with debt
financing; risks associated with our guarantees of debt for, or
other support we may provide to, joint venture properties; the
effectiveness of our interest rate hedging arrangements;
uncertainty relating to the potential phasing out of LIBOR; our
potential failure to qualify as a REIT; our legal obligation to
make distributions to our shareholders; legislative or regulatory
actions that could adversely affect our shareholders, including the
recent changes in the U.S. federal income taxation of U.S.
businesses; our dependence on distributions from the Operating
Partnership to meet our financial obligations, including dividends;
the risk of a cyber-attack or an act of cyber-terrorism and other
important factors set forth under Item 1A - "Risk Factors" in the
Company's and the Operating Partnership's Annual Report on Form
10-K for the year ended December 31,
2021, as may be updated or supplemented in the Company's
Quarterly Reports on Form 10-Q and the Company's other filings with
the SEC. Accordingly, there is no assurance that the Company's
expectations will be realized. The Company disclaims any intention
or obligation to update the forward-looking statements, whether as
a result of new information, future events or otherwise. You are
advised to refer to any further disclosures the Company makes or
related subjects in the Company's Current Reports on Form 8-K that
the Company files with the SEC.
|
|
|
|
|
Investor Contact
Information
|
|
|
Media Contact
Information
|
|
|
|
|
|
Doug
McDonald
|
|
|
|
KWT Global
|
SVP, Finance and
Capital Markets
|
|
|
|
Tanger@kwtglobal.com
|
336-856-6066
|
|
|
|
|
tangerir@tangeroutlets.com
|
|
|
|
|
TANGER FACTORY
OUTLET CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
|
|
|
Rental
revenues
|
$
101,409
|
|
$ 96,824
|
|
$
206,018
|
|
$
194,291
|
Management, leasing
and other services
|
1,436
|
|
1,359
|
|
2,963
|
|
2,731
|
Other
revenues
|
2,993
|
|
3,090
|
|
5,725
|
|
4,945
|
Total
revenues
|
105,838
|
|
101,273
|
|
214,706
|
|
201,967
|
Expenses:
|
|
|
|
|
|
|
|
Property
operating
|
32,697
|
|
31,250
|
|
69,455
|
|
66,561
|
General and
administrative
|
19,329
|
|
15,700
|
|
34,796
|
|
32,493
|
Depreciation and
amortization
|
26,220
|
|
27,732
|
|
52,463
|
|
55,882
|
Total
expenses
|
78,246
|
|
74,682
|
|
156,714
|
|
154,936
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(11,576)
|
|
(13,338)
|
|
(23,210)
|
|
(27,700)
|
Loss on early
extinguishment of debt
|
—
|
|
(14,039)
|
|
—
|
|
(14,039)
|
Other income (expense)
(1)
|
2,576
|
|
654
|
|
2,759
|
|
(2,851)
|
Total other income
(expense)
|
(9,000)
|
|
(26,723)
|
|
(20,451)
|
|
(44,590)
|
Income (loss) before
equity in earnings of unconsolidated joint
ventures
|
18,592
|
|
(132)
|
|
37,541
|
|
2,441
|
Equity in earnings of
unconsolidated joint ventures
|
2,227
|
|
2,728
|
|
4,740
|
|
4,497
|
Net
income
|
20,819
|
|
2,596
|
|
42,281
|
|
6,938
|
Noncontrolling
interests in Operating Partnership
|
(914)
|
|
(118)
|
|
(1,858)
|
|
(327)
|
Noncontrolling
interests in other consolidated partnerships
|
—
|
|
—
|
|
—
|
|
—
|
Net income
attributable to Tanger Factory Outlet Centers, Inc.
|
19,905
|
|
2,478
|
|
40,423
|
|
6,611
|
Allocation of earnings
to participating securities
|
(222)
|
|
(196)
|
|
(437)
|
|
(403)
|
Net income available
to common shareholders of
Tanger Factory
Outlet Centers, Inc.
|
$ 19,683
|
|
$
2,282
|
|
$ 39,986
|
|
$
6,208
|
|
|
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
|
|
|
Net income
|
$
0.19
|
|
$
0.02
|
|
$
0.39
|
|
$
0.06
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share:
|
|
|
|
|
|
|
|
Net income
|
$
0.19
|
|
$
0.02
|
|
$
0.38
|
|
$
0.06
|
|
|
(1)
|
The three and six
months ended June 30, 2022 includes a $2.4 million gain on the sale
of the corporate aircraft. The six months ended June 30, 2021
includes a $3.6 million charge related to the foreign currency
effect of the sale of the Saint-Sauveur, Quebec property by the
RioCan joint venture in March 2021.
|
TANGER FACTORY
OUTLET CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(in thousands,
except share data)
|
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2022
|
|
2021
|
Assets
|
|
|
|
Rental
property:
|
|
|
|
Land
|
$
277,041
|
|
$
268,269
|
Buildings, improvements and fixtures
|
2,537,507
|
|
2,532,489
|
Construction in progress
|
13,346
|
|
—
|
|
2,827,894
|
|
2,800,758
|
Accumulated depreciation
|
(1,189,576)
|
|
(1,145,388)
|
Total rental property,
net
|
1,638,318
|
|
1,655,370
|
Cash and
cash equivalents
|
194,190
|
|
161,255
|
Investments in unconsolidated joint ventures
|
80,041
|
|
82,647
|
Deferred
lease costs and other intangibles, net
|
67,482
|
|
73,720
|
Operating
lease right-of-use assets
|
79,228
|
|
79,807
|
Prepaids
and other assets
|
95,986
|
|
104,585
|
Total assets
|
$
2,155,245
|
|
$
2,157,384
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Liabilities
|
|
|
|
Debt:
|
|
|
|
Senior, unsecured
notes, net
|
$
1,037,086
|
|
$
1,036,181
|
Unsecured term loan,
net
|
298,783
|
|
298,421
|
Mortgages payable,
net
|
60,146
|
|
62,474
|
Unsecured lines of
credit
|
—
|
|
—
|
Total debt
|
1,396,015
|
|
1,397,076
|
Accounts payable and
accrued expenses
|
76,512
|
|
92,995
|
Operating lease
liabilities
|
88,330
|
|
88,874
|
Other
liabilities
|
81,813
|
|
78,650
|
Total liabilities
|
1,642,670
|
|
1,657,595
|
Commitments and
contingencies
|
|
|
|
Equity
|
|
|
|
Tanger Factory
Outlet Centers, Inc.:
|
|
|
|
Common shares, $0.01
par value, 300,000,000 shares authorized, 104,394,792 and
104,084,734 shares issued and outstanding at June 30, 2022 and
December 31,
2021, respectively
|
1,044
|
|
1,041
|
Paid in
capital
|
981,833
|
|
978,054
|
Accumulated distributions in excess of net income
|
(483,241)
|
|
(483,409)
|
Accumulated other comprehensive loss
|
(9,420)
|
|
(17,761)
|
Equity attributable to Tanger Factory Outlet Centers,
Inc.
|
490,216
|
|
477,925
|
Equity attributable
to noncontrolling interests:
|
|
|
|
Noncontrolling
interests in Operating Partnership
|
22,359
|
|
21,864
|
Noncontrolling
interests in other consolidated partnerships
|
—
|
|
—
|
Total equity
|
512,575
|
|
499,789
|
Total liabilities and equity
|
$
2,155,245
|
|
$
2,157,384
|
TANGER FACTORY
OUTLET CENTERS, INC. AND SUBSIDIARIES
|
CENTER
INFORMATION
|
(Unaudited)
|
|
|
|
June
30,
|
|
|
2022
|
|
2021
|
Gross Leasable Area
Open at End of Period (in thousands):
|
|
|
|
|
Consolidated
|
|
11,454
|
|
11,456
|
Partially owned -
unconsolidated
|
|
2,113
|
|
2,113
|
Total
Properties
|
|
13,567
|
|
13,569
|
Total Properties
including pro rata share of unconsolidated JVs
(1)
|
|
12,511
|
|
12,512
|
|
|
|
|
|
Outlet Centers in
Operation at End of Period:
|
|
|
|
|
Consolidated
|
|
30
|
|
30
|
Partially owned -
unconsolidated
|
|
6
|
|
6
|
Total
Properties
|
|
36
|
|
36
|
|
|
|
|
|
Ending
Occupancy:
|
|
|
|
|
Consolidated
|
|
94.8 %
|
|
93.0 %
|
Partially owned -
unconsolidated
|
|
96.0 %
|
|
95.8 %
|
Total Properties
including pro rata share of unconsolidated JVs
|
|
94.9 %
|
|
93.2 %
|
|
|
|
|
|
Total States
Operated in at End of Period
|
|
20
|
|
20
|
|
|
(1)
|
Amounts may not
recalculate due to the effect of rounding.
|
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 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 (loss).
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 Funds From Operations ("Core
FFO") 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.
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 and lease incentives, recurring 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, loss on early extinguishment of debt 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
present Portfolio NOI and Same Center NOI on both a consolidated
and total portfolio, including pro rata share of unconsolidated
joint ventures, basis.
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
(loss), 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 (if applicable), depreciation
and amortization, gains and losses on sale of operating properties,
joint venture properties, outparcels and other assets, 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, compensation related to
voluntary retirement plan and other executive severance, gain on
sale of non-real estate asset, casualty gains and losses, 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 (if applicable), 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.
Adjusted EBITDAre is defined as EBITDAre excluding gains
and losses on extinguishment of debt, net, compensation related to
voluntary retirement plan and other executive severance, gain on
sale of non-real estate asset, casualty gains and losses, gains and
losses on sale of outparcels, and other items that that we do not
consider indicative of the Company's ongoing operating
performance.
We present Adjusted EBITDA, EBITDAre and 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.
Net Debt
We define Net Debt as Total Debt less Cash and Cash Equivalents
and present this metric for both the consolidated portfolio and for
the total portfolio, including the consolidated portfolio and the
Company's pro rata share of unconsolidated joint ventures. Net debt
is a component of the Net debt to Adjusted EBITDA ratio, which is
defined as Net debt for the respective portfolio divided by
Adjusted EBITDA (consolidated portfolio) or Adjusted EBITDAre
(total portfolio at pro rata share). We use the Net debt to
Adjusted EBITDA and the Net debt to Adjusted EBITDAre ratios to
evaluate the Company's leverage. We believe this measure is an
important indicator of the Company's ability to service its
long-term debt obligations.
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 Core FFO:
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
income
|
|
$ 20,819
|
|
$
2,596
|
|
$ 42,281
|
|
$
6,938
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of real estate assets - consolidated
|
|
25,615
|
|
27,185
|
|
51,276
|
|
54,739
|
Depreciation and
amortization of real estate assets - unconsolidated
joint ventures
|
|
2,791
|
|
2,913
|
|
5,545
|
|
5,909
|
Loss on sale of joint
venture property, including foreign currency
effect (1)
|
|
—
|
|
—
|
|
—
|
|
3,704
|
FFO
|
|
49,225
|
|
32,694
|
|
99,102
|
|
71,290
|
Allocation of earnings
to participating securities
|
|
(424)
|
|
(302)
|
|
(858)
|
|
(694)
|
FFO available to
common shareholders (2)
|
|
$ 48,801
|
|
$ 32,392
|
|
$ 98,244
|
|
$ 70,596
|
As further adjusted
for:
|
|
|
|
|
|
|
|
|
Compensation related
to voluntary retirement plan and other
executive severance (3)
|
|
2,447
|
|
—
|
|
2,447
|
|
2,418
|
Gain on sale of
non-real estate asset (4)
|
|
(2,418)
|
|
—
|
|
(2,418)
|
|
—
|
Loss on early
extinguishment of debt (5)
|
|
—
|
|
14,039
|
|
—
|
|
14,039
|
Impact of above
adjustments to the allocation of earnings to
participating securities
|
|
—
|
|
(106)
|
|
—
|
|
(128)
|
Core FFO available
to common shareholders (2)
|
|
$ 48,830
|
|
$ 46,325
|
|
$ 98,273
|
|
$ 86,925
|
FFO available to
common shareholders per share - diluted
(2)
|
|
$
0.45
|
|
$
0.30
|
|
$
0.90
|
|
$
0.68
|
Core FFO available
to common shareholders per share -
diluted
(2)
|
|
$
0.45
|
|
$
0.43
|
|
$
0.90
|
|
$
0.84
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
Basic weighted average
common shares
|
|
103,630
|
|
100,409
|
|
103,607
|
|
97,504
|
Effect of notional
units
|
|
421
|
|
818
|
|
413
|
|
685
|
Effect of outstanding
options
|
|
703
|
|
771
|
|
720
|
|
728
|
Diluted weighted
average common shares (for earnings per
share computations)
|
|
104,754
|
|
101,998
|
|
104,740
|
|
98,917
|
Exchangeable operating
partnership units
|
|
4,762
|
|
4,795
|
|
4,762
|
|
4,795
|
Diluted weighted
average common shares (for FFO and Core FFO
per share computations) (2)
|
|
109,516
|
|
106,793
|
|
109,502
|
|
103,712
|
|
|
(1)
|
Includes a $3.6 million
charge related to the foreign currency effect of the sale of the
Saint-Sauveur, Quebec property by the RioCan joint venture in March
2021.
|
(2)
|
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.
|
(3)
|
For the 2022 period,
represents executive severance costs. For the 2021 period, includes
compensation costs related to a voluntary retirement plan offer
that required eligible participants to give notice of acceptance by
December 1, 2020 for an effective retirement date of March 31, 2021
and other executive severance costs.
|
(4)
|
Represents gain on sale
of the corporate aircraft.
|
(5)
|
In April 2021, the
Company completed a partial redemption of $150.0 million aggregate
principal amount of its $250.0 million 3.875% senior notes due
December 2023, for $163.0 million in cash. The loss on
extinguishment of debt includes a make-whole premium of $13.0
million.
|
Below is a
reconciliation of FFO to FAD:
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
FFO available to
common shareholders
|
|
$
48,801
|
|
$
32,392
|
|
$
98,244
|
|
$
70,596
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Corporate depreciation
excluded above
|
|
605
|
|
547
|
|
1,187
|
|
1,143
|
Amortization of
finance costs
|
|
782
|
|
1,494
|
|
1,541
|
|
2,667
|
Amortization of net
debt discount
|
|
124
|
|
821
|
|
241
|
|
948
|
Amortization of
equity-based compensation
|
|
4,251
|
|
2,763
|
|
6,959
|
|
6,608
|
Straight-line rent
adjustments
|
|
(302)
|
|
478
|
|
1,035
|
|
1,521
|
Market rent
adjustments
|
|
138
|
|
238
|
|
314
|
|
25
|
Second generation
tenant allowances and lease incentives
|
|
(1,908)
|
|
(1,516)
|
|
(3,160)
|
|
(2,294)
|
Capital
improvements
|
|
(5,216)
|
|
(2,686)
|
|
(6,625)
|
|
(3,642)
|
Adjustments from
unconsolidated joint ventures
|
|
(265)
|
|
5
|
|
(38)
|
|
(538)
|
FAD available to
common shareholders (1)
|
|
$
47,010
|
|
$
34,536
|
|
$
99,698
|
|
$
77,034
|
Dividends per
share
|
|
$
0.2000
|
|
$
0.1775
|
|
$
0.3825
|
|
$
0.3550
|
FFO payout
ratio
|
|
44 %
|
|
59 %
|
|
43 %
|
|
52 %
|
FAD payout
ratio
|
|
47 %
|
|
55 %
|
|
42 %
|
|
48 %
|
Diluted weighted
average common shares (1)
|
|
109,516
|
|
106,793
|
|
109,502
|
|
103,712
|
|
|
(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.
|
Below is a
reconciliation of Net Income to Portfolio NOI and Same Center NOI
for the consolidated portfolio and total
portfolio at pro rata share:
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
income
|
|
$ 20,819
|
|
$
2,596
|
|
$ 42,281
|
|
$
6,938
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated joint ventures
|
|
(2,227)
|
|
(2,728)
|
|
(4,740)
|
|
(4,497)
|
Interest
expense
|
|
11,576
|
|
13,338
|
|
23,210
|
|
27,700
|
Loss on early
extinguishment of debt (1)
|
|
—
|
|
14,039
|
|
—
|
|
14,039
|
Other (income)
expense
|
|
(2,576)
|
|
(654)
|
|
(2,759)
|
|
2,851
|
Depreciation and
amortization
|
|
26,220
|
|
27,732
|
|
52,463
|
|
55,882
|
Other non-property
(income) expenses
|
|
63
|
|
307
|
|
234
|
|
(93)
|
Corporate general and
administrative expenses
|
|
19,328
|
|
15,746
|
|
34,813
|
|
32,517
|
Non-cash adjustments
(2)
|
|
(157)
|
|
728
|
|
1,363
|
|
1,571
|
Lease termination
fees
|
|
(35)
|
|
(127)
|
|
(2,631)
|
|
(800)
|
Portfolio NOI -
Consolidated
|
|
73,011
|
|
70,977
|
|
144,234
|
|
136,108
|
Non-same center NOI -
Consolidated
|
|
20
|
|
(1,562)
|
|
83
|
|
(1,645)
|
Same Center NOI -
Consolidated (3)
|
|
$ 73,031
|
|
$ 69,415
|
|
$
144,317
|
|
$
134,463
|
|
|
|
|
|
|
|
|
|
Portfolio NOI -
Consolidated
|
|
$ 73,011
|
|
$ 70,977
|
|
$
144,234
|
|
$
136,108
|
Pro rata share of
unconsolidated joint ventures
|
|
6,804
|
|
6,871
|
|
13,707
|
|
12,952
|
Portfolio NOI -
Total portfolio at pro rata share
|
|
79,815
|
|
77,848
|
|
157,941
|
|
149,060
|
Non-same center NOI -
Total portfolio at pro rata share
|
|
20
|
|
(1900)
|
|
83
|
|
(1,985)
|
Same Center NOI -
Total portfolio at pro rata share (3)
|
|
$ 79,835
|
|
$ 75,948
|
|
$
158,024
|
|
$
147,075
|
|
|
(1)
|
In April 2021, the
Company completed a partial redemption of $150.0 million aggregate
principal amount of its $250.0 million 3.875% senior notes due
December 2023, for $163.0 million in cash. The loss on
extinguishment of debt includes a make-whole premium of $13.0
million.
|
(2)
|
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.
|
(3)
|
Sold outlet centers
excluded from Same Center NOI:
|
|
|
Outlet centers
sold:
|
Jeffersonville
|
January 2021
|
Consolidated
|
Saint-Sauveur,
Quebec
|
March 2021
|
Unconsolidated
JV
|
Below are
reconciliations of Net Income to Adjusted EBITDA:
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
income
|
|
$ 20,819
|
|
$
2,596
|
|
$ 42,281
|
|
$
6,938
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
11,576
|
|
13,338
|
|
23,210
|
|
27,700
|
Depreciation and
amortization
|
|
26,220
|
|
27,732
|
|
52,463
|
|
55,882
|
Loss on sale of joint
venture property, including foreign currency
effect (1)
|
|
—
|
|
—
|
|
—
|
|
3,704
|
Compensation related
to voluntary retirement plan and other
executive severance (2)
|
|
2,447
|
|
—
|
|
2,447
|
|
2,418
|
Gain on sale of
non-real estate asset (3)
|
|
(2,418)
|
|
—
|
|
(2,418)
|
|
—
|
Loss on early
extinguishment of debt (4)
|
|
—
|
|
14,039
|
|
—
|
|
14,039
|
Adjusted
EBITDA
|
|
$ 58,644
|
|
$ 57,705
|
|
$
117,983
|
|
$
110,681
|
|
|
|
Twelve months
ended
|
|
|
June
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
Net
income
|
|
$
44,901
|
|
$
9,558
|
Adjusted to
exclude:
|
|
|
|
|
Interest
expense
|
|
48,376
|
|
52,866
|
Depreciation and
amortization
|
|
106,589
|
|
110,008
|
Impairment charges -
consolidated (5)
|
|
6,989
|
|
6,989
|
Loss on sale of joint
venture property, including foreign currency effect
(1)
|
|
—
|
|
3,704
|
Compensation related
to voluntary retirement plan and other executive severance
(2)
|
|
3,608
|
|
3,579
|
Gain on sale of
non-real estate asset (3)
|
|
(2,418)
|
|
—
|
Casualty
gain
|
|
(969)
|
|
(969)
|
Loss on early
extinguishment of debt (4)
|
|
33,821
|
|
47,860
|
Adjusted
EBITDA
|
|
$
240,897
|
|
$
233,595
|
|
|
(1)
|
Includes a $3.6 million
charge related to the foreign currency effect of the sale of the
Saint-Sauveur, Quebec property by the RioCan joint venture in March
2021.
|
(2)
|
For the 2022 period,
represents executive severance costs. For the 2021 period, includes
compensation costs related to a voluntary retirement plan offer
that required eligible participants to give notice of acceptance by
December 1, 2020 for an effective retirement date of March 31, 2021
and other executive severance costs.
|
(3)
|
Represents gain on sale
of the corporate aircraft.
|
(4)
|
In April 2021, the
Company completed a partial redemption of $150.0 million aggregate
principal amount of its $250.0 million 3.875% senior notes due
December 2023, for $163.0 million in cash. In September 2021, the
Company completed a redemption of the remaining 2023 Notes, $100.0
million in aggregate principal amount outstanding, and all of its
3.750% senior notes due 2024, $250.0 million in aggregate principal
outstanding, for $381.9 million in cash. The loss on extinguishment
of debt includes make-whole premiums of $44.9 million for both of
these redemptions.
|
(5)
|
Includes $563,000 for
the twelve months ended December 31, 2021 of impairment loss
attributable to the right-of-use asset associated with the ground
lease at the Mashantucket (Foxwoods), Connecticut outlet
center.
|
Below are
reconciliations of Net Income to EBITDAre and Adjusted
EBITDAre:
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
income
|
|
$ 20,819
|
|
$
2,596
|
|
$ 42,281
|
|
$
6,938
|
Adjusted to
exclude:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
11,576
|
|
13,338
|
|
23,210
|
|
27,700
|
Depreciation and
amortization
|
|
26,220
|
|
27,732
|
|
52,463
|
|
55,882
|
Loss on sale of joint
venture property, including foreign currency
effect (1)
|
|
—
|
|
—
|
|
—
|
|
3,704
|
Pro rata share of
interest expense - unconsolidated joint ventures
|
|
1,579
|
|
1,455
|
|
3,037
|
|
2,928
|
Pro rata share of
depreciation and amortization - unconsolidated
joint ventures
|
|
2,791
|
|
2,913
|
|
5,545
|
|
5,909
|
EBITDAre
|
|
$ 62,985
|
|
$ 48,034
|
|
$
126,536
|
|
$
103,061
|
Compensation related
to voluntary retirement plan and other
executive severance (2)
|
|
2,447
|
|
—
|
|
2,447
|
|
2,418
|
Gain on sale of
non-real estate asset (3)
|
|
(2,418)
|
|
—
|
|
(2,418)
|
|
—
|
Loss on early
extinguishment of debt (4)
|
|
—
|
|
14,039
|
|
—
|
|
14,039
|
Adjusted
EBITDAre
|
|
$ 63,014
|
|
$ 62,073
|
|
$
126,565
|
|
$
119,518
|
|
|
|
Twelve months
ended
|
|
|
June
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
Net
income
|
|
$
44,901
|
|
$
9,558
|
Adjusted to
exclude:
|
|
|
|
|
Interest
expense
|
|
48,376
|
|
52,866
|
Depreciation and
amortization
|
|
106,589
|
|
110,008
|
Impairment charges -
consolidated (5)
|
|
6,989
|
|
6,989
|
Loss on sale of joint
venture property, including foreign currency effect
(1)
|
|
—
|
|
3,704
|
Pro-rata share of
interest expense - unconsolidated joint ventures
|
|
5,967
|
|
5,858
|
Pro-rata share of
depreciation and amortization - unconsolidated joint
ventures
|
|
11,254
|
|
11,618
|
EBITDAre
|
|
$
224,076
|
|
$
200,601
|
Compensation related
to voluntary retirement plan and other executive severance
(2)
|
|
3,608
|
|
3,579
|
Gain on sale of
non-real estate asset (3)
|
|
(2,418)
|
|
—
|
Casualty
gain
|
|
(969)
|
|
(969)
|
Loss on early
extinguishment of debt (4)
|
|
33,821
|
|
47,860
|
Adjusted
EBITDAre
|
|
$
258,118
|
|
$
251,071
|
|
|
(1)
|
Includes a $3.6 million
charge related to the foreign currency effect of the sale of the
Saint-Sauveur, Quebec property by the RioCan joint venture in March
2021.
|
(2)
|
For the 2022 period,
represents executive severance costs. For the 2021 periods,
includes compensation costs related to a voluntary retirement plan
offer that required eligible participants to give notice of
acceptance by December 1, 2020 for an effective retirement date of
March 31, 2021 and other executive severance costs.
|
(3)
|
Represents gain on sale
of the corporate aircraft.
|
(4)
|
In April 2021, the
Company completed a partial redemption of $150.0 million aggregate
principal amount of its $250.0 million 3.875% senior notes due
December 2023 (the "2023 Notes") for $163.0 million in cash. In
September 2021, the Company completed a redemption of the remaining
2023 Notes, $100.0 million in aggregate principal amount
outstanding, and all of its 3.750% senior notes due 2024, $250.0
million in aggregate principal outstanding, for $381.9 million in
cash. The loss on extinguishment of debt includes make-whole
premiums of $44.9 million for both of these redemptions.
|
(5)
|
Includes $563,000 for
the twelve months ended December 31, 2021 of impairment loss
attributable to the right-of-use asset associated with the ground
lease at the Mashantucket (Foxwoods), Connecticut outlet
center.
|
Below is a
reconciliation of Total Debt to Net Debt for the consolidated
portfolio and total portfolio at pro rata share:
|
|
|
|
June 30,
2022
|
|
|
Consolidated
|
|
Pro
Rata Share of
Unconsolidated
JVs
|
|
Total
at Pro Rata
Share
|
|
|
|
|
Total
debt
|
|
$
1,396,015
|
|
$
164,768
|
|
$
1,560,783
|
Less: Cash and cash
equivalents
|
|
(194,190)
|
|
(7,428)
|
|
(201,618)
|
Net
debt
|
|
$
1,201,825
|
|
$
157,340
|
|
$
1,359,165
|
|
|
|
December 31,
2021
|
|
|
Consolidated
|
|
Pro
Rata Share of
Unconsolidated
JVs
|
|
Total
at Pro Rata
Share
|
|
|
|
|
Total
debt
|
|
$
1,397,076
|
|
$
164,730
|
|
$
1,561,806
|
Less: Cash and cash
equivalents
|
|
(161,255)
|
|
(9,515)
|
|
(170,770)
|
Net
debt
|
|
$
1,235,821
|
|
$
155,215
|
|
$
1,391,036
|
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SOURCE Tanger Factory Outlet Centers, Inc.