Exhibit 99.2
tangerlargea01a03a05.jpg
Tanger Factory Outlet Centers, Inc.
  
Supplemental Operating and Financial Data
June 30, 2018



Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018

tangeroutlet-small93015a04.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, 2017.
 
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 6/30/2018
tangeroutlet-small93015a04.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
Top 25 Tenants Based on Percentage of Total Annualized Base Rent
Lease Expirations as of June 30, 2018
Capital expenditures
Leasing Activity
 
 
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 6/30/2018
tangeroutlet-small93015a04.jpg



Geographic Diversification
As of June 30, 2018
Consolidated Properties
State
# of Centers
 
GLA
 
% of GLA
South Carolina
5

 
1,599,094

 
12
%
New York
2

 
1,468,815

 
11
%
Georgia
3

 
1,121,579

 
9
%
Texas
3

 
1,001,357

 
8
%
Pennsylvania
3

 
997,441

 
8
%
Michigan
2

 
671,562

 
5
%
Delaware
1

 
557,353

 
4
%
Alabama
1

 
556,673

 
4
%
North Carolina
3

 
505,056

 
4
%
New Jersey
1

 
489,706

 
4
%
Tennessee
1

 
448,150

 
3
%
Ohio
1

 
411,785

 
3
%
Arizona
1

 
410,734

 
3
%
Florida
1

 
351,721

 
3
%
Missouri
1

 
329,861

 
3
%
Louisiana
1

 
321,066

 
3
%
Mississippi
1

 
320,348

 
3
%
Utah
1

 
319,661

 
2
%
Connecticut
1

 
311,516

 
2
%
Iowa
1

 
276,331

 
2
%
New Hampshire
1

 
250,107

 
2
%
Maryland
1

 
199,425

 
2
%
Total
36

 
12,919,341

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

 
397,857

 
50.00
%
Columbus, OH
1

 
355,245

 
50.00
%
Ottawa, ON
1

 
354,978

 
50.00
%
Texas City, TX
1

 
352,705

 
50.00
%
National Harbor, MD
1

 
341,156

 
50.00
%
Cookstown, ON
1

 
307,779

 
50.00
%
Bromont, QC
1

 
161,307

 
50.00
%
Saint-Sauveur, QC
1

 
99,405

 
50.00
%
Total
8

 
2,370,432

 
 
 
 
 
 
 
 
Grand Total
44

 
15,289,773

 
 



4
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Property Summary - Occupancy at End of Each Period Shown
Consolidated properties
Location
Total GLA
6/30/18
 
% Occupied
6/30/18
 
% Occupied
12/31/17
 
% Occupied
6/30/17
 
Deer Park, NY
739,109

 
97
%
 
95
%
 
94
%
 
Riverhead, NY
729,706

 
92
%
 
99
%
 
97
%
 
Rehoboth Beach, DE
557,353

 
98
%
 
98
%
 
99
%
 
Foley, AL
556,673

 
95
%
 
99
%
 
99
%
 
Atlantic City, NJ
489,706

 
87
%
 
88
%
 
87
%
 
San Marcos, TX
471,816

 
96
%
 
99
%
 
95
%
 
Sevierville, TN
448,150

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

 
96
%
 
98
%
 
97
%
 
Myrtle Beach Hwy 501, SC
425,334

 
88
%
 
94
%
 
93
%
 
Jeffersonville, OH
411,785

 
96
%
 
95
%
 
94
%
 
Glendale, AZ (Westgate)
410,734

 
97
%
 
99
%
 
96
%
 
Myrtle Beach Hwy 17, SC
403,346

 
100
%
 
100
%
 
93
%
 
Charleston, SC
382,180

 
97
%
 
98
%
 
95
%
 
Lancaster, PA
376,997

 
92
%
 
95
%
 
97
%
 
Pittsburgh, PA
372,944

 
98
%
 
99
%
 
97
%
 
Commerce, GA
371,408

 
96
%
 
98
%
 
98
%
 
Grand Rapids, MI
357,103

 
95
%
 
96
%
 
94
%
 
Fort Worth, TX
351,741

 
97
%
 
94
%
 
N/A

 
Daytona Beach, FL
351,721

 
99
%
 
100
%
 
96
%
 
Branson, MO
329,861

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

 
100
%
 
99
%
 
98
%
 
Gonzales, LA
321,066

 
98
%
 
99
%
 
100
%
 
Southaven, MS
320,348

 
94
%
 
99
%
 
96
%
 
Park City, UT
319,661

 
94
%
 
98
%
 
98
%
 
Mebane, NC
318,886

 
99
%
 
100
%
 
99
%
 
Howell, MI
314,459

 
94
%
 
98
%
 
97
%
 
Mashantucket, CT (Foxwoods)
311,516

 
95
%
 
94
%
 
94
%
 
Williamsburg, IA
276,331

 
93
%
 
96
%
 
97
%
 
Tilton, NH
250,107

 
94
%
 
93
%
 
96
%
 
Hershey, PA
247,500

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

 
92
%
 
94
%
 
97
%
 
Ocean City, MD
199,425

 
96
%
 
98
%
 
82
%
 
Hilton Head I, SC
181,670

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

 
96
%
 
96
%
 
96
%
 
Blowing Rock, NC
104,009

 
96
%
 
98
%
 
98
%
 
Nags Head, NC
82,161

 
100
%
 
97
%
 
100
%
 
Total
12,919,341

 
96
%
(1) 
97
%
(2) 
96
%
(3) 
(1)
Excludes the occupancy rate at our Fort Worth outlet center which opened during the fourth quarter of 2017 and has not yet stabilized.
(2)
Excludes the occupancy rate at our Fort Worth and Daytona Beach outlet centers which opened during the fourth quarter of 2017 and 2016, respectively, and have not yet stabilized.
(3)
Excludes the occupancy rate at our Daytona Beach outlet center which opened during the fourth quarter of 2016 and had not yet stabilized.



5
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Unconsolidated joint venture properties
Location
Total GLA
6/30/18
 
% Occupied
6/30/18
 
% Occupied
12/31/17
 
% Occupied
6/30/17
 
Charlotte, NC
397,857

 
99
%
 
99
%
 
98
%
 
Columbus, OH
355,245

 
95
%
 
97
%
 
93
%
 
Ottawa, ON
354,978

 
94
%
 
95
%
 
90
%
 
Texas City, TX (Galveston/Houston)
352,705

 
95
%
 
99
%
 
99
%
 
National Harbor, MD
341,156

 
95
%
 
99
%
 
96
%
 
Cookstown, ON
307,779

 
99
%
 
99
%
 
96
%
 
Bromont, QC
161,307

 
73
%
 
72
%
 
69
%
 
Saint-Sauveur, QC
99,405

 
89
%
 
96
%
 
96
%
 
Total
2,370,432

 
94
%
 
96
%
 
94
%
(1) 
(1)
Excludes the occupancy rate at our Columbus outlet center which opened in June 2016 and had not yet stabilized.


6
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Portfolio Occupancy at the End of Each Period (1) 
chart-69d5163a55e55db3ab2a01.jpg
(1) Excludes unconsolidated outlet centers. See table on page 4.




7
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Average Tenant Sales Per Square Foot by Outlet Center Ranking As of June 30, 2018 (1) 
 Ranking (2)
12 Months
 SPSF
 Period End
 Occupancy
  Sq Ft
(thousands)
% of
 Square Feet
% of
Portfolio
NOI (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
523

96
%
2,794

23
%
30
%
Centers 6 - 10
$
437

98
%
1,842

15
%
17
%
Centers 11 - 15
$
392

98
%
1,541

12
%
12
%
Centers 16 - 20
$
358

94
%
1,914

15
%
15
%
Centers 21 - 25
$
316

94
%
1,814

14
%
12
%
Centers 26 - 30
$
287

96
%
1,494

12
%
9
%
Centers 31 - 35
$
250

95
%
1,169

9
%
5
%
 
 
 
 
 
 
 Ranking (2)
Cumulative 12 Months
 SPSF
 Cumulative Period End
 Occupancy
  Cumulative Sq Ft
(thousands)
Cumulative % of
 Square Feet
Cumulative % of
Portfolio
NOI (3)
Consolidated Centers
 
 
 
 
Centers 1 - 5
$
523

96
%
2,794

23
%
30
%
Centers 1 - 10
$
487

97
%
4,636

38
%
47
%
Centers 1 - 15
$
462

97
%
6,177

50
%
59
%
Centers 1 - 20
$
436

96
%
8,091

65
%
74
%
Centers 1 - 25
$
414

96
%
9,905

79
%
86
%
Centers 1 - 30
$
396

96
%
11,399

91
%
95
%
Centers 1 - 35
$
383

96
%
12,568

100
%
100
%
 
 
 
 
 
 
Unconsolidated centers (4)
$
451

96
%
1,447

n/a

n/a

Domestic centers (5)
$
391

96
%
14,015

n/a

n/a

 
 
(1)
Sales are based on reports for the trailing 12 months by retailers which have occupied outlet center stores for a minimum of 12 months. Sales per square foot are based on all stores less than 20,000 square feet in size. Centers are ranked by sales per square foot for the trailing twelve months ended June 30, 2018. Excludes outlet centers open less than 12 full calendar months and centers which have not yet stabilized (Fort Worth, Texas opened in October 2017).
 
 
 
 
 
 
 
 
(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
Lancaster, PA
Locust Grove, GA
Myrtle Beach 17, SC
Westgate (Glendale), AZ
 
 
Centers 11 - 15:
Charleston, SC
Grand Rapids, MI
Hershey, PA
Hilton Head I, SC
Pittsburgh, PA
 
 
Centers 16 - 20:
Atlantic City, NJ
Foxwoods (Mashantucket), CT
Gonzales, LA
Park City, UT
San Marcos, TX
 
 
Centers 21 - 25:
Foley, AL
Myrtle Beach 501, SC
Nags Head, NC
Savannah, GA
Southaven (Memphis), MS
 
 
Centers 26 - 30:
Commerce, GA
Daytona Beach, FL
Hilton Head II, SC
Howell, MI
Tilton, NH
 
 
Centers 31 - 34:
Blowing Rock, NC
Jeffersonville, OH
Ocean City, MD
Terrell, TX
Williamsburg, IA
 
 
 
 
 
 
 
 
 
(3)
Based on the Company's forecast of Portfolio NOI (see non-GAAP definitions). The Company's forecast is based on management's estimates as of March 31, 2018 and may be considered a forward-looking statement which is subject to risks and uncertainties. Actual results could differ materially from those projected due to various factors including, but not limited to, the risks associated with general economic and real estate conditions. For a more detailed discussion of the factors that affect operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2017.
 
 
(4)
Includes domestic outlet centers open 12 full calendar months (in alphabetical order):
 
Unconsolidated:
Charlotte, NC
Columbus, OH
National Harbor, MD
Texas City (Houston), TX
 
 
(5)
Includes consolidated portfolio and domestic unconsolidated joint ventures

8
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Top 25 Tenants Based on Percentage to Total Annualized Base Rent
As of June 30, 2018 (1) 

Consolidated
 
Unconsolidated
Tenant
Brands
# of
Stores
 
GLA
 
% of
Total GLA
 
% of Total Annualized Base Rent (2)
 
# of
Stores
Ascena Retail Group, Inc.
Dress Barn, Loft, Ann Taylor, Justice, Lane Bryant, Maurices
145

 
876,450

 
6.8
%
 
6.9
%
 
18

The Gap, Inc.
Gap, Banana Republic, Old Navy
98

 
1,034,948

 
8.0
%
 
5.8
%
 
16

PVH Corp.
Tommy Hilfiger, Van Heusen, Calvin Klein
67

 
410,108

 
3.2
%
 
3.8
%
 
15

Under Armour, Inc.
Under Armour, Under Armour Kids
33

 
257,375

 
2.0
%
 
2.7
%
 
6

Nike, Inc.
Nike, Converse, Hurley
44

 
468,184

 
3.6
%
 
2.6
%
 
11

G-III Apparel Group, Ltd.
Bass, Wilson's Leather, Donna Karan
59

 
273,742

 
2.1
%
 
2.6
%
 
6

Tapestry, Inc.
Coach, Kate Spade
47

 
225,215

 
1.7
%
 
2.5
%
 
10

Carter's, Inc.
Carters, OshKosh B Gosh
60

 
259,051

 
2.0
%
 
2.3
%
 
11

American Eagle Outfitters, Inc.
American Eagle Outfitters, Aerie
37

 
260,807

 
2.0
%
 
2.3
%
 
7

V. F. Corporation
VF Outlet, The North Face, Vans, Timberland, Lee/Wrangler
33

 
289,948

 
2.2
%
 
2.2
%
 
4

Signet Jewelers Limited
Kay Jewelers, Zales, Jared Vault
57

 
129,776

 
1.0
%
 
2.0
%
 
8

Hanesbrands Inc.
Hanesbrands, Maidenform, Champion
41

 
200,056

 
1.5
%
 
1.8
%
 
2

Michael Kors Holdings Limited
Michael Kors, Michael Kors Men's
27

 
125,891

 
1.0
%
 
1.8
%
 
5

Ralph Lauren Corporation
Polo Ralph Lauren, Polo Children, Polo Ralph Lauren Big & Tall, Lauren Ralph Lauren
38

 
380,955

 
2.9
%
 
1.8
%
 
5

Chico's, FAS Inc.
Chicos, White House/Black Market, Soma Intimates
48

 
137,966

 
1.1
%
 
1.8
%
 
6

Adidas AG
Adidas, Reebok
30

 
187,275

 
1.4
%
 
1.7
%
 
11

Caleres Inc.
Famous Footwear, Naturalizer, Allen Edmonds
39

 
190,140

 
1.5
%
 
1.6
%
 
11

Columbia Sportswear Company
Columbia Sportswear
19

 
148,892

 
1.2
%
 
1.6
%
 
3

J. Crew Group, Inc.
J. Crew, J. Crew Men's
29

 
155,376

 
1.2
%
 
1.5
%
 
4

Brooks Brothers Group, Inc.
Brooks Brothers
28

 
165,469

 
1.3
%
 
1.5
%
 
5

Skechers USA, Inc
Skechers
32

 
144,313

 
1.1
%
 
1.5
%
 
6

Express Inc.
Express Factory
24

 
167,418

 
1.3
%
 
1.4
%
 
4

Children's Place, Inc.
Children's Place
25

 
149,930

 
1.2
%
 
1.4
%
 
5

Rack Room Shoes, Inc.
Rack Room Shoes
24

 
139,559

 
1.1
%
 
1.3
%
 
2

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

 
407,342

 
3.2
%
 
1.3
%
 
2

Total of Top 25 tenants
 
1,103


7,186,186


55.6
%

57.7
%
 
183

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






9
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Lease Expirations as of June 30, 2018

Percentage of Total Gross Leasable Area (1) 
chart-69b156abdd4f5d17a7aa01.jpg

Percentage of Total Annualized Base Rent (1) 
chart-5eb39359f6c2503eba5a01.jpg

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


10
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Capital expenditures (in thousands)
 
 
Six months ended
 
 
June 30,
 
 
2018
 
2017
Value-enhancing:
 
 
 
 
New center developments and expansions
 
$
5,285

 
$
56,306

Other
 

 
3,093

 
 
5,285

 
59,399

Recurring capital expenditures:
 
 
 
 
Second generation tenant allowances
 
8,326

 
10,034

Operational capital expenditures
 
9,134

 
11,097

Major outlet center renovations
 
1,786

 
10,243

 
 
19,246

 
31,374

Total additions to rental property-accrual basis
 
24,531

 
90,773

Conversion from accrual to cash basis
 
16,681

 
(2,012
)
Total additions to rental property-cash basis
 
$
41,212

 
$
88,761




11
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Leasing Activity (1) 
TTM ended
06/30/2018
 
06/30/2017
Re-tenanted Space (terms greater than 12 months)(1):
 

 
 

Number of leases
96

 
85

Gross leasable area
327,409

 
307,029

New initial rent per square foot
$
38.15

 
$
38.56

Prior expiring rent per square foot
$
35.32

 
$
34.68

Percent increase  (2)
8.0
%
 
11.2
%
 
 
 
 
New straight line rent per square foot
$
41.29

 
$
43.96

Prior straight line rent per square foot
$
34.73

 
$
33.52

Percent increase (2)
18.9
%
 
31.1
%
 
 
 
 
Renewed Space (terms greater than 12 months)(1):
 
 
 
Number of leases
200

 
219

Gross leasable area
1,090,055

 
991,434

New initial rent per square foot
$
30.41

 
$
31.64

Prior expiring rent per square foot
$
28.95

 
$
28.98

Percent increase
5.0
%
 
9.2
%
 
 
 
 
New straight line rent per square foot
$
31.73

 
$
33.59

Prior straight line rent per square foot
$
28.27

 
$
28.56

Percent increase
12.3
%
 
17.6
%
 
 
 
 
Total Re-tenanted and Renewed Space (terms greater than 12 months)(1):
 
 
 
Number of leases
296

 
304

Gross leasable area
1,417,464

 
1,298,463

New initial rent per square foot
$
32.20

 
$
33.28

Prior expiring rent per square foot
$
30.42

 
$
30.33

Percent increase (2)
5.8
%
 
9.7
%
 
 
 
 
New straight line rent per square foot
$
33.94

 
$
36.04

Prior straight line rent per square foot
$
29.76

 
$
29.74

Percent increase (2)
14.0
%
 
21.2
%
 
 
 
 
Total Re-tenanted and Renewed Space (all terms)(3):
 
 
 
Number of leases
358

 
349

Gross leasable area
1,684,690

 
1,487,369

New initial rent per square foot
$
30.55

 
$
31.98

Prior expiring rent per square foot
$
30.27

 
$
29.75

Percent increase (2)
0.9
%
 
7.5
%
 
 
 
 
New straight line rent per square foot
$
32.01

 
$
34.40

Prior straight line rent per square foot
$
29.54

 
$
29.17

Percent increase (2)
8.4
%
 
17.9
%
(1)
Represents change in rent (base rent and common area maintenance) for leases for a term of more than 12 months for new stores that opened or renewals that started during the respective trailing twelve month periods within the consolidated portfolio
(2)
Excludes leases related to re-merchandising projects (see rent spreads including these leases on the following page)
(3)
Represents change in rent (base rent and common area maintenance) for all leases for new stores that opened or renewals that started during the respective trailing twelve month periods within the consolidated portfolio, expect for license agreements, seasonal tenants, and month-to-month leases

12
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg




Leasing Activity Including Re-merchandising Projects
TTM ended
06/30/2018
06/30/2017
 
 
 
Number of leases related to re-merchandising projects
6

3

Gross leasable area of these leases
121,340

43,873

 
 
 
 
 
 
Re-tenanted Space (terms greater than 12 months)(1):
 
 

Cash basis percent increase
0.1
 %
5.7
%
Straight-line basis percent increase
9.2
 %
23.5
%
 
 
 
Total Re-tenanted and Renewed Space (terms greater than 12 months)(1):
 
 

Cash basis percent increase
3.5
 %
8.2
%
Straight-line basis percent increase
11.3
 %
19.3
%
 
 
 
 
 
 
Re-tenanted Space (all terms)(2):
 
 

Cash basis percent (decrease) increase
(0.4
)%
5.7
%
Straight-line basis percent increase
8.7
 %
23.5
%
 
 
 
Total Re-tenanted and Renewed Space (all terms)(2):
 
 

Number of leases
364

352

Gross leasable area
1,806,030

1,531,242

Cash basis percent (decrease) increase
(0.8
)%
6.2
%
Straight-line basis percent increase
6.3
 %
16.3
%

(1)
Represents change in rent (base rent and common area maintenance) for leases for a term of more than 12 months for new stores that opened or renewals that started during the respective trailing twelve month periods within the consolidated portfolio
(2)
Represents change in rent (base rent and common area maintenance) for all leases for new stores that opened or renewals that started during the respective trailing twelve month periods within the consolidated portfolio, except for license agreements, seasonal tenants, and month-to-month leases



13
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg


Consolidated Balance Sheets (dollars in thousands)
 
June 30,
 
December 31,
 
2018
 
2017
Assets
 
 
 
   Rental property:
 
 
 
   Land
$
279,978

 
$
279,978

   Buildings, improvements and fixtures
2,825,729

 
2,793,638

   Construction in progress
1,329

 
14,854

 
3,107,036

 
3,088,470

   Accumulated depreciation
(956,418
)
 
(901,967
)
      Total rental property, net
2,150,618

 
2,186,503

   Cash and cash equivalents
4,261

 
6,101

   Investments in unconsolidated joint ventures
110,502

 
119,436

   Deferred lease costs and other intangibles, net
124,234

 
132,061

   Prepaids and other assets
98,982

 
96,004

         Total assets
$
2,488,597

 
$
2,540,105

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities
 
 
 
   Debt:
 
 
 
Senior, unsecured notes, net
$
1,135,705

 
$
1,134,755

Unsecured term loan, net
323,249

 
322,975

Mortgages payable, net
89,235

 
99,761

Unsecured lines of credit, net
220,018

 
206,160

Total debt
1,768,207

 
1,763,651

Accounts payable and accrued expenses
65,445

 
90,416

Other liabilities
79,281

 
73,736

         Total liabilities
1,912,933

 
1,927,803

Commitments and contingencies
 
 
 
Equity
 
 
 
Tanger Factory Outlet Centers, Inc.:
 
 
 
Common shares, $.01 par value, 300,000,000 shares authorized, 93,907,034 and 94,560,536 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
939

 
946

   Paid in capital
770,877

 
784,782

   Accumulated distributions in excess of net income
(204,506
)
 
(184,865
)
   Accumulated other comprehensive loss
(20,722
)
 
(19,285
)
         Equity attributable to Tanger Factory Outlet Centers, Inc.
546,588

 
581,578

Equity attributable to noncontrolling interests:
 
 
 
Noncontrolling interests in Operating Partnership
29,076

 
30,724

Noncontrolling interests in other consolidated partnerships

 

         Total equity
575,664

 
612,302

            Total liabilities and equity
$
2,488,597

 
$
2,540,105




14
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Consolidated Statements of Operations (in thousands, except per share data)
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Base rentals
$
80,925

 
$
80,788

 
$
162,458

 
$
161,118

Percentage rentals
2,027

 
1,805

 
3,456

 
3,660

Expense reimbursements
34,128

 
34,023

 
72,408

 
70,621

Management, leasing and other services
630

 
609

 
1,243

 
1,188

Other income
2,001

 
2,389

 
3,681

 
4,395

Total revenues
119,711

 
119,614

 
243,246

 
240,982

Expenses:
 
 
 
 
 
 
 
Property operating
37,946

 
37,116

 
80,164

 
77,503

General and administrative
10,997

 
11,500

 
22,109

 
22,912

Abandoned pre-development costs

 

 

 
627

Depreciation and amortization
32,694

 
32,905

 
65,817

 
64,199

Total expenses
81,637

 
81,521

 
168,090

 
165,241

Operating income
38,074

 
38,093

 
75,156

 
75,741

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(16,181
)
 
(16,520
)
 
(31,981
)
 
(33,007
)
Gain on sale of assets

 
6,943

 

 
6,943

Other non-operating income
191

 
57

 
400

 
92

Income before equity in earnings of unconsolidated joint ventures
22,084

 
28,573

 
43,575

 
49,769

Equity in earnings of unconsolidated joint ventures
2,206

 
2,374

 
4,400

 
4,692

Net income
24,290

 
30,947

 
47,975

 
54,461

Noncontrolling interests in Operating Partnership
(1,229
)
 
(1,557
)
 
(2,446
)
 
(2,735
)
Noncontrolling interests in other consolidated partnerships
(92
)
 

 
278

 

Net income attributable to Tanger Factory Outlet Centers, Inc.
22,969

 
29,390

 
45,807

 
51,726

Allocation of earnings to participating securities
(313
)
 
(306
)
 
(576
)
 
(601
)
Net income available to common shareholders of
Tanger Factory Outlet Centers, Inc.
$
22,656

 
$
29,084

 
$
45,231

 
$
51,125

 
 
 
 
 
 
 
 
Basic earnings per common share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.31

 
$
0.48

 
$
0.54

 
 
 
 
 
 
 
 
Diluted earnings per common share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.31

 
$
0.48

 
$
0.54



15
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Unconsolidated Joint Venture Information  

The following table details certain information as of June 30, 2018, except for Net Operating Income ("NOI") which is for the six months ended June 30, 2018, about various unconsolidated real estate joint ventures in which we have an ownership interest (dollars in millions):
Joint Venture
 
Center Location
 
Tanger's Ownership %
 
Square Feet
 
Tanger's Share of Total Assets
 
Tanger's Share of NOI
 
Tanger's Share of Net Debt (1)
Charlotte
 
Charlotte, NC
 
50.0
%
 
397,857

 
$
40.7

 
$
3.6

 
$
49.8

Columbus
 
Columbus, OH
 
50.0
%
 
355,245

 
43.0

 
2.5

 
42.3

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

 
24.7

 
2.1

 
39.8

National Harbor
 
National Harbor, MD
 
50.0
%
 
341,156

 
45.2

 
2.5

 
43.3

RioCan Canada (2)
 
Various
 
50.0
%
 
923,469

 
113.7

 
3.4

 
5.1

Total
 
 
 
 
 
2,370,432

 
$
267.3

 
$
14.1

 
$
180.3

(1)
Net of debt origination costs and premiums.
(2)
Includes a 161,307 square foot center in Bromont, Quebec; a 307,779 square foot center in Cookstown, Ontario; a 354,978 square foot center in Ottawa, Ontario; and a 99,405 square foot center in Saint-Sauveur, Quebec.



16
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Debt Outstanding Summary
As of June 30, 2018
(dollars in thousands)
 
Total Debt Outstanding
 
Our Share of Debt
 
Stated
Interest Rate
 
End of Period Effective Interest Rate(1) 
 
Maturity
Date (2)
 
Weighted Average Years to Maturity (2)
Consolidated Debt:
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt:
 

 
 
 
 
 
 
 
 
 
 
Unsecured lines of credit(3)
$
223,700

 
$
223,700

 
LIBOR + 0.875%

 
3.0
%
 
10/28/2022
 
4.3

2023 Senior unsecured notes
250,000

 
250,000

 
3.875%

 
4.1
%
 
12/1/2023
 
5.4

2024 Senior unsecured notes
250,000

 
250,000

 
3.75
%
 
3.8
%
 
12/1/2024
 
6.4

2026 Senior unsecured notes
350,000

 
350,000

 
3.125
%
 
3.2
%
 
9/1/2026
 
8.2

2027 Senior unsecured notes
300,000

 
300,000

 
3.875
%
 
3.9
%
 
7/15/2027
 
9.0

Unsecured term loan
325,000

 
325,000

 
LIBOR + 0.95%

 
2.1
%
 
4/13/2021
 
2.8

Net debt discounts and debt origination costs
(19,728
)
 
(19,728
)
 
 

 
 
 
 
 
 
Total net unsecured debt
1,678,972

 
1,678,972

 
 

 
3.4
%
 
 
 
6.1

Secured mortgage debt:
 
 
 
 
 
 
 
 
 
 
 
Atlantic City, NJ
35,892

 
35,892

 
5.14% - 7.65%

 
5.1
%
 
11/15/2021 - 12/8/2026
 
6.4

Southaven, MS
51,400

 
51,400

 
LIBOR + 1.80%

 
4.2
%
 
4/29/2023
 
4.8

Debt premium and debt origination costs
1,943

 
1,943

 
 
 
 
 
 
 
 
Total net secured mortgage debt
89,235

 
89,235

 
 
 
4.5
%
 
 
 
5.5

Total consolidated debt
1,768,207

 
1,768,207

 
 
 
3.4
%
 
 
 
6.1

Unconsolidated JV debt:
 

 
 
 
 

 
 
 
 
 
 
Charlotte(4)
100,000

 
50,000

 
4.27
%
 
4.3
%
 
7/1/2028
 
10.0

Columbus
85,000

 
42,500

 
LIBOR + 1.65%

 
3.7
%
 
11/28/2021
 
3.4

Galveston/Houston
80,000

 
40,000

 
LIBOR + 1.65%

 
3.7
%
 
7/1/2022
 
4.0

National Harbor
87,000

 
43,500

 
LIBOR + 1.65%

 
3.7
%
 
11/13/2019
 
1.4

RioCan Canada
9,967

 
4,983

 
5.75
%
 
4.2
%
 
5/10/2020
 
1.9

Debt premium and debt origination costs
(1,438
)
 
(718
)
 
 
 
 
 
 
 
 
Total unconsolidated JV net debt
360,529

 
180,265

 
 

 
3.9
%
 
 
 
4.8

Total
$
2,128,736

 
$
1,948,472

 
 
 
3.5
%
 
 
 
5.9

(1)
The effective interest rate includes the impact of discounts and premiums and interest rate swap agreements, as applicable. See page 18 for additional details.
(2)
Includes applicable extensions available at our option.
(3)
The Company has unsecured lines of credit that provide for borrowings of up to $600.0 million. The unsecured lines of credit include a $20.0 million liquidity line and a $580.0 million syndicated line. A 15 basis point facility fee is due annually on the entire committed amount of each facility. The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances.
(4)
In June 2018, the joint venture closed on a $100.0 million mortgage loan with a fixed interest rate of 4.27% and a maturity date of July 2028. The proceeds from the loan were used to pay off the $90.0 million mortgage loan with an interest rate of LIBOR + 1.45% that had an original maturity date of November 2018. The joint venture distributed the incremental net loan proceeds of $9.3 million equally to the partners.


17
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Summary of Our Share of Fixed and Variable Rate Debt
As of June 30, 2018
(dollars in thousands)
 
Total Debt %
 
Our Share of Debt
 
End of Period Effective Interest Rate
 
Average Years to Maturity (1)
 
 

 
 
 
 
 
 
Consolidated:
 
 
 
 
 
 
 
Fixed (2)
87
%
 
$
1,537,065

 
3.4
%
 
6.4
Variable
13
%
 
231,142

 
3.3
%
 
4.4
 
100
%
 
1,768,207

 
3.4
%
 
6.1
Unconsolidated Joint ventures:
 
 


 
 
 
 
Fixed
30
%
 
$
54,912

 
4.3
%
 
9.3
Variable
70
%
 
125,353

 
3.7
%
 
2.9
 
100
%
 
180,265

 
3.9
%
 
4.8
Total:
 
 
 
 
 
 
 
Fixed
82
%
 
1,591,977

 
3.5
%
 
6.6
Variable
18
%
 
356,495

 
3.6
%
 
3.6
Total share of debt
100
%
 
$
1,948,472

 
3.5
%
 
5.9
(1)
Includes applicable extensions available at our option.
(2)
The effective interest rate includes interest rate swap agreements that fix the base LIBOR rate at a weighted average of 1.30% on notional amounts aggregating $365.0 million as follows:
(a)
Interest rate swaps entered into in October 2013 to hedge our variable interest rate exposure on notional amounts aggregating $150.0 million. These interest rate swap agreements fix the base LIBOR rate at an average of 1.30% through August 14, 2018. In December 2017, we entered into three separate forward starting interest rate swap agreements, effective August 14, 2018 through January 1, 2021 on notional amounts aggregating $150.0 million, which will fix the base LIBOR rate at an average of 2.20%, and
(b)
Interest rate swaps entered into in April 2016 to hedge our variable interest rate exposure on notional amounts aggregating $175.0 million. These interest rate swap agreements fix the base LIBOR rate at an average of 1.03% through January 1, 2021,
(c)
In March 2018, the consolidated joint venture that owns the Tanger outlet center in Southaven, Mississippi, entered into an interest rate swap, effective March 1, 2018, that fixed the base LIBOR rate at 2.47% on a notional amount of $40.0 million through January 31, 2021.




18
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Future Scheduled Principal Payments (dollars in thousands)(1)
As of June 30, 2018
Year
Tanger
Consolidated
Payments
 
Tanger's Share
of Unconsolidated
JV Payments
 
Total
Scheduled
Payments
2018
$
1,614

 
$
147

 
$
1,761

2019
3,369

 
43,807

 
47,176

2020
3,566

 
4,529

 
8,095

2021
330,793

 
42,500

 
373,293

2022(2)
228,136

 
40,000

 
268,136

2023
306,168

 
346

 
306,514

2024
255,140

 
855

 
255,995

2025
1,501

 
892

 
2,393

2026
355,705

 
931

 
356,636

2027
300,000

 
972

 
300,972

2028 & thereafter

 
46,004

 
46,004

 
$
1,785,992

 
$
180,983

 
$
1,966,975

Net debt discounts and debt origination costs
(17,785
)
 
(718
)
 
(18,503
)
 
$
1,768,207

 
$
180,265

 
$
1,948,472

(1)
Includes applicable extensions available at our option.
(2)
Includes principal balance of $223.7 million outstanding under the Company's unsecured lines of credit.
Senior Unsecured Notes Financial Covenants (1) 
As of June 30, 2018
 
Required
 
Actual
 
Compliance
Total Consolidated Debt to Adjusted Total Assets
<60%
 
51
%
 
Yes
Total Secured Debt to Adjusted Total Assets
<40%
 
3
%
 
Yes
Total Unencumbered Assets to Unsecured Debt
>150%
 
187
%
 
Yes
Consolidated Income Available for Debt Service to Annual Debt Service Charge
>1.5
 
5.18

 
Yes
(1)
For a complete listing of all debt covenants related to the Company's Senior Unsecured Notes, as well as definitions of the above terms, please refer to the Company's filings with the Securities and Exchange Commission.


19
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



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.

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.


20
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



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.

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.

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 share-based compensation, straight line rent amounts, market rent amounts, less 2nd generation tenant allowances, capital improvement expenditures, and our share of the items listed above for our unconsolidated joint ventures. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.

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

Portfolio Net Operating Income and Same Center Net Operating Income

We present portfolio net operating income ("Portfolio NOI") and same center net operating income ("Same Center NOI") as supplemental measures of our operating performance. Portfolio NOI represents our property level net operating income which is defined as total operating revenues less property operating expenses and excludes termination fees and non-cash adjustments including straight-line rent, net above and below market rent amortization 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.


21
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Non-GAAP Pro Rata Balance Sheet and Income Statement Information

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

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

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

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

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



22
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



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

 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
Net income
 
$
24,290

 
$
30,947

 
$
47,975

 
$
54,461

Adjusted for:
 
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets - consolidated
 
32,062

 
32,383

 
64,604

 
63,238

Depreciation and amortization of real estate assets - unconsolidated joint ventures
 
3,325

 
3,550

 
6,554

 
7,388

Gain on sale of assets
 

 
(6,943
)
 

 
(6,943
)
FFO
 
59,677

 
59,937

 
119,133

 
118,144

FFO attributable to noncontrolling interests in other consolidated partnerships
 
(92
)
 

 
278

 

Allocation of earnings to participating securities
 
(534
)
 
(528
)
 
(1,011
)
 
(1,040
)
FFO available to common shareholders  (1)
 
$
59,051

 
$
59,409

 
$
118,400

 
$
117,104

As further adjusted for:
 
 
 
 
 
 
 
 
Abandoned pre-development costs
 

 

 

 
627

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

 

 

 
(5
)
AFFO available to common shareholders (1)
 
$
59,051

 
$
59,409

 
$
118,400

 
$
117,726

FFO available to common shareholders per share - diluted (1)
 
$
0.60

 
$
0.59

 
$
1.20

 
$
1.17

AFFO available to common shareholders per share - diluted (1)
 
$
0.60

 
$
0.59

 
$
1.20

 
$
1.17

 
 
 
 
 
 
 
 
 
Weighted Average Shares:
 
 
 
 
 
 
 
 
Basic weighted average common shares
 
93,298

 
95,025

 
93,470

 
95,217

Effect of outstanding options and restricted common shares
 

 
5

 

 
35

Diluted weighted average common shares (for earnings per share computations)
 
93,298

 
95,030

 
93,470

 
95,252

Exchangeable operating partnership units
 
4,996

 
5,028

 
4,996

 
5,028

Diluted weighted average common shares (for FFO and AFFO per share computations) (1)
 
98,294

 
100,058

 
98,466

 
100,280

(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.




23
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Reconciliation of FFO to FAD (dollars and shares in thousands)
 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
FFO available to common shareholders
 
$
59,051

 
$
59,409

 
$
118,400

 
$
117,104

Adjusted for:
 
 
 
 
 
 
 
 
Corporate depreciation excluded above
 
632

 
522

 
1,213

 
961

Amortization of finance costs
 
749

 
871

 
1,532

 
1,749

Amortization of net debt discount (premium)
 
103

 
120

 
204

 
245

Amortization of equity-based compensation
 
3,653

 
3,504

 
7,045

 
6,796

Straight line rent adjustment
 
(1,346
)
 
(1,588
)
 
(3,294
)
 
(3,293
)
Market rent adjustment
 
689

 
969

 
1,251

 
1,691

2nd generation tenant allowances
 
(5,400
)
 
(5,836
)
 
(8,326
)
 
(9,215
)
Capital improvements
 
(8,198
)
 
(15,430
)
 
(10,920
)
 
(21,340
)
Adjustments from unconsolidated joint ventures
 
(148
)
 
(619
)
 
(419
)
 
(1,143
)
FAD available to common shareholders (1)
 
$
49,785

 
$
41,922

 
$
106,686

 
$
93,555

Dividends per share
 
$
0.3500

 
$
0.3425

 
$
0.6925

 
$
0.6680

FFO payout ratio
 
58
%
 
58
%
 
58
%
 
57
%
FAD payout ratio
 
69
%
 
82
%
 
64
%
 
72
%
Diluted weighted average common shares (1)
 
98,294

 
100,058

 
98,466

 
100,280

(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.




24
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg





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

 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
Net income
 
$
24,290

 
$
30,947

 
$
47,975

 
$
54,461

Adjusted to exclude:
 
 
 
 
 
 
 
 
Equity in earnings of unconsolidated joint ventures
 
(2,206
)
 
(2,374
)
 
(4,400
)
 
(4,692
)
Interest expense
 
16,181

 
16,520

 
31,981

 
33,007

Gain on sale of assets
 

 
(6,943
)
 

 
(6,943
)
Other non-operating income
 
(191
)
 
(57
)
 
(400
)
 
(92
)
Depreciation and amortization
 
32,694

 
32,905

 
65,817

 
64,199

Other non-property expenses
 
209

 
309

 
640

 
621

Abandoned pre-development costs
 

 

 

 
627

Corporate general and administrative expenses
 
10,784

 
11,202

 
21,807

 
22,479

Non-cash adjustments (1)
 
(638
)
 
(597
)
 
(2,004
)
 
(1,561
)
Termination rents
 
(13
)
 
(1,450
)
 
(1,064
)
 
(2,633
)
Portfolio NOI
 
81,110

 
80,462

 
160,352

 
159,473

Non-same center NOI (2)
 
(4,226
)
 
(2,081
)
 
(8,441
)
 
(4,937
)
Same Center NOI
 
$
76,884

 
$
78,381

 
$
151,911

 
$
154,536

(1)
Non-cash items include straight-line rent, above and below market rent amortization and gains or losses on outparcel sales.
(2)
Excluded from Same Center NOI:
Outlet centers opened:
 
Outlet centers sold:
 
Outlet center expansions:
Fort Worth
October 2017
 
Westbrook
May 2017
 
Lancaster
September 2017




25
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Non-GAAP Pro Rata Balance Sheet Information as of June 30, 2018 (in thousands)


Non-GAAP
 
Pro Rata Portion Unconsolidated Joint Ventures (1)
Assets
 
Rental property:
 
Land
$
46,611

Buildings, improvements and fixtures
248,759

Construction in progress
1,497

 
296,867

Accumulated depreciation
(51,831
)
Total rental property, net
245,036

Cash and cash equivalents
9,176

Deferred lease costs and other intangibles, net
5,028

Prepaids and other assets
8,027

Total assets
$
267,267

Liabilities and Owners' Equity
 
Liabilities
 
Mortgages payable, net
$
180,264

Accounts payable and accruals
6,127

Total liabilities
186,391

Owners' equity
80,876

Total liabilities and owners' equity
$
267,267

(1)
The carrying value of our investments in unconsolidated joint ventures as reported in our Consolidated Balance Sheet differs from our pro rata share of the net assets shown above due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis totaled $4.1 million as of June 30, 2018 and are being amortized over the various useful lives of the related assets.


26
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



Non-GAAP Pro Rata Statement of Operations Information year to date June 30, 2018 (in thousands)
 
Non-GAAP Pro Rata Portion
 
Noncontrolling Interests
 
Unconsolidated Joint Ventures
Revenues:
 
 
 
Base rentals
$

 
$
13,666

Percentage rentals

 
1,150

Expense reimbursements

 
8,680

Other income

 
205

Total revenues

 
23,701

Expense:
 
 
 
Property operating

 
9,443

General and administrative

 
126

Depreciation and amortization

 
6,553

Total expenses

 
16,122

Operating income

 
7,579

Other income (expense):
 
 
 
Interest expense

 
(3,232
)
Other nonoperating income
278

 
53

Net income
$
278

 
$
4,400



27
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg



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


28
Supplemental Operating and Financial Data for the
Quarter Ended 6/30/2018
tangeroutlet-small93015a04.jpg