Tanger Inc.

Good morning. This is Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to the Tanger Factory Outlet Center's second quarter 2022 conference call. Yesterday evening, we issued our earnings release as well as our supplemental information package and investor presentation. This information is available on our Investor Relations website, investors.tangeroutlets.com. Please note that during this conference call, some of management's comments will be forward-looking statements that are subject to numerous risks and uncertainties, and actual results could differ materially from those projected. We direct you to our filings with the Securities and Exchange Commission for a detailed discussion of these risks and uncertainties. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G, including funds from operations, or FFO, core FFO, same-center net operating income, adjusted EBITDA REG and net debt. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information. This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management's comments include time-sensitive information that may only be accurate as of today's date, August 9, 2022. At this time, all participants are in listen-only mode. Following management's prepared comments, the call will be opened for your questions. We request that everyone ask only one question and one follow-up to allow as many of you as possible to ask questions. If time permits, we are happy for you to re-queue for additional questions. On the call today will be Stephen Tanger, our Executive Chair, Stephen Yaloff, President and Chief Executive Officer, and Doug McDonald, Senior Vice President, Finance and Capital Markets. In addition, other members of our leadership team will be available for Q&A. I will now turn the call over to Steven Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us for our second quarter 2022 earnings call. The Tanger team delivered another strong quarter as we executed on each of our strategic initiatives and as shoppers and retailers continue to recognize the value that Tanger Open Air Centers offer. I am pleased with our continued momentum and our positioning to drive long-term growth. Thank you to all of our stakeholders for your ongoing support. I'm happy now to turn the call over to Steve Yala to provide additional details. Thanks, Steve.

We delivered another quarter of solid operational performance and earnings growth as reflected in the 5% year-over-year increase in both Same Center NOI and Core FFO per share. This performance is the direct result of the successful execution of our three key priorities, accelerating leasing, commercializing marketing, and reshaping operations at our open-air shopping destinations. We continue to extend our Same Center platform and are also investing in additional growth with our 37th center in Nashville, which broke ground in May, and our 38th center in Palm Beach, Florida. Retailer demand for Tanger Outlet Centers is robust and occupancy continues to grow, currently at 94.9% of 170 basis points year over year and of 60 basis points sequentially. We have continued to drive increased rents and longer lease terms during the trailing 12-month period, executing renewed or re-tenanted leases on more than 1.7 million square feet with blended rent spreads of 4.1% for all comparable leases. This represents a 280 basis point sequential improvement and the fifth consecutive quarter of rent spread growth. Our re-tenanting spreads exceeded 10% as demand grows and our pricing power returns. Additionally, we've increased the stability of our cash flows through the conversion of variable to permanent base rent, while in many cases, maintaining or driving higher than previous percentage rates, providing for additional long-term upside. We continue to accelerate lease renewal activity. And as of today, we have nearly 68% of 2022 renewals executed or in process. 780 basis points ahead of roughly the same time last year. We anticipate higher than average tenant retention, which will result in lower downtime and retenanting costs. Additionally, a number of our brands continue to convert short-term leases to long-term permanent deals. Our productive leasing execution is one of our key highlights, and we continue to diversify and elevate our portfolio attracting new-to-platform brands to Tanger centers. In addition to high-quality apparel and footwear brands, we have added direct-to-consumer, home goods, entertainment, and food and beverage destinations. Our dynamic leasing results deliver quality shopper visits, attract higher-income shoppers, and introduce Tanger to a younger customer base. Tenant quality continues to improve as our watch list is at the lowest level in four years with no meaningful exposure or bankruptcy risk. Our performance marketing is delivering measurable results in the face of headwinds such as inflation and higher gas prices. Traffic remains above pre-pandemic levels and was stable in the quarter compared to last year, a quarter with many tailwinds that included lower gas, stimulus checks, vaccinations, and a lower interest rate environment. Our centers are well located and easily accessible, and we continue to be the go-to shopping experience for local, regional, and tourist shoppers in the markets we serve seeking the brands they want. When customers come to a Tanner Center, they come to shop. Sales per square foot for the trailing 12-month period was $450 per square foot, up 6.4% from the prior comparable period. Although sales are down slightly from the prior quarter, we attribute this mainly to increased promotional activity due to excess inventory in the channel, which is driving incrementally bigger baskets at lower cost to our shoppers. By prioritizing our Tanger Loyalty Club, which provides numerous benefits to our members, we are promoting elevated engagements with our customers. During the second quarter, unique engagements by our Tanger Loyalty Club members increased by 80% year over year, and new loyalty club membership grew by 25%. Our marketing partnership business continues to build as brands seek access to the higher value Tanger Center shoppers. We saw new sponsorships with global brands, including Procter & Gamble and Mondelez, while brands such as Coca-Cola, Unilever, and T-Mobile have made incremental media buys for on-center activations at our centers. We are continuing to increase digital and media inventory across our platforms as we generate additional demand. We're focused on enhancing efficiencies at our centers, which is particularly important in a broad inflationary environment. In response, we are actively managing our energy and water usage, which are also tied to our sustainability efforts, a key strategic priority. In addition, we released our sixth annual environmental, social, and governance report yesterday. Our newly appointed sustainability lead has already identified opportunities to improve efficiencies, advance our corporate sustainability goals, and contribute to our bottom line. We are actively working on a science-based plan to achieve net zero emissions by 2050 in a matter that aligns with our business strategy. This year, we will double both our solar and EV charging infrastructure, which will provide our centers with the capability to operate more sustainably and engage with our shoppers while driving additional revenue streams and managing our expense structure. Now turning to our external growth. In May, we broke ground on our 37th center in Nashville and our leasing activity continues to be brisk with some of the best brands, including new to industry retailers. We're excited to deliver this quality center in the rapidly growing Nashville market with grand opening scheduled for fall of 2023. Last week, we announced a strategic partnership to rebrand, operate, lease, and market an existing outlet center in Palm Beach. This center will be renamed Tanger Outlets Palm Beach, and we have already assumed the marketing, leasing, and property management responsibilities. This arrangement will also provide the potential opportunity to acquire equity ownership over time. Tanger has a balance sheet that provides for financial flexibility and support. We remain optimistic for our business, which is well-positioned and provides consumers with great value in light of broader macroeconomic uncertainty and is reflected in the increase in the midpoint of our guidance. Additionally, with minimal new supply in the market, our well-located Tanger centers should continue to maintain occupancy gains. Our entire team is focused on elevating our centers, drawing compelling retailers, and signing high-quality leases, which will allow us to continue to deliver solid NOI growth. The core value proposition of Tanger resonates throughout economic cycles, and with our expanded uses and new revenue streams across our entire portfolio, we continue to offer consumers the opportunity to shop, dine, and be entertained in an open-air environment. The value proposition of our open-air centers is continually being validated by shoppers, tenants, and the communities we serve. Thank you to the entire tenor team, our retailers, shoppers, and stakeholders. I would now like to turn the call over to Doug McDonald to take you through our financial results, balance sheet, and increase guidance for 2022. Thank you, Steve.