Tanger Inc.

Good morning. This is Ashley Curtis, and I would like to welcome you to the Tanger Factory Outlet Center's fourth 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.tangeroutlet.com. Please note that during the 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, poor FFO, same center net operating income, adjusted EBIT dowry, 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 February 22nd, 2023. 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 Steven Tanger, our Executive Chair, Steven Yaloff, President and Chief Executive Officer and Michael Billerman, Chief Financial Officer and Chief Investment Officer. In addition, other members of our leadership team will be available for Q&A. I will now turn the call over to Stephen Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us for our fourth quarter and full year 2022 earnings call. The team delivered tremendous results, executing on all of our objectives, and positioning Tanger for continued growth. 2023 is a milestone year for Tanger and marks our 30th year as a public company traded on the New York Stock Exchange. I am very proud of what we have accomplished and even more excited about our future. I have the utmost confidence in the management team and the strategic direction of the company. I will now turn the call over to Steve Yaloff.

Thanks, Steve, and good morning. I'm pleased to announce another quarter of solid results, which reflects our strategy of providing curated, engaging, and value-filled experiences for our shoppers, offering a productive sales model as well as a clearance channel for our retailers, elevating and diversifying our tenancy, and delivering a platform which delivers both reliable earnings and attractive growth opportunities. We are pleased to introduce our guidance for 2023, which anticipates continued growth, taking into effect the leasing execution from last year and continued momentum, even in the face of broader macroeconomic uncertainty. And we look forward to the grand opening of our newest development in Nashville, Tennessee, expected in September. In 2022, we delivered a 5.5% increase in same center NOI, which was supported by robust leasing, strong occupancy gains, and attractive rent spreads. For the year, we executed 447 leases representing 2.1 million square feet, a 50% increase from the 1.4 million square feet executed last year. For the trailing 12 months, we realized a 10.1% blended rent spread on these leases. This includes a 28% re-tenanting and an 8.6% renewal spread, representing seven consecutive quarters of improvement for Tanger. This strong performance is the result of our ability to exercise pricing power and convert variable rent to fixed rent and is a clear demonstration of the importance that retailers place on the outlet retail distribution channel and our open-air shopping centers. Our occupancy increased by 170 basis points year over year, ending the year at 97%. But even at this high level, we have a meaningful growth opportunity as we continue to realize attractive rent spreads on both renewal and re-tenanted space and convert temporary space to long-term occupancy. Our temporary occupancy serves as an important and effective role in our overall strategy in both maintaining revenue-generating occupied space while introducing new tenants to the Tanger platform. With approximately 10% of our GLA currently occupied by short-term, pop-up, or other temporary tenancy, we have the ability to drive additional rent growth over time as a portion of these convert to longer-term leases. Beyond the numbers, the quality of our leasing activity is something I'd like to highlight. We have prioritized elevating and diversifying our brands, and since embarking on this objective two years ago, we have made tremendous progress adding new food and beverage, entertainment, home furnishing, and digitally native brands to our portfolio. With the goal of curating the best open-air environments with elevated brands, improved amenities, and best-in-class food and beverage, we are creating a more engaging experience for our shoppers who ultimately stay longer and spend more dollars at our centers. We are pleased with the quality of our tenants and the importance of the outlet channel to their operations. While we maintain a watch list, it is minimal. We proactively manage this list and work with tenants to mitigate our risk. Traffic for 2022 approached last year's levels as we anniversary strong comps for 2021. Traffic was down 50 basis points for the full year and 200 basis points for the fourth quarter, which reflects the historic winter storm that impacted much of the country in December. However, we are encouraged by current trends as we have seen an uptick in traffic post-Christmas and into the new year. Total gross sales reported by tenants in our centers remained steady to last year's levels as we faced a more promotional environment compared to last year, where we saw the benefits of a tight inventory for retailers and stimulus spending by shoppers. Our sales per square foot was roughly flat on a sequential basis at $445 per square foot. However, down slightly compared to the prior 12-month period, impacted by the change in the mix of retailers included in the comparable pool, as well as retailer expansions that occurred during the year. We are encouraged by our outlook as we start to see the benefit of our new leasing activity in the coming quarters. Our ability to help drive sales productivity is in part attributable to our enhanced performance marketing and which we continue to refine and achieve measurable results with increasingly relevant and compelling content. We continue to derive incremental value from our centers through our marketing partnerships, media platform, and sustainability efforts. Other revenues for 2022 grew 14% as local, regional, and national brands sought to gain visibility with Tanger Shoppers. We continue to build our media infrastructure and have proven its value to clients, evidenced by repeat campaigns from several national brands. We believe this is a unique revenue stream to Tanger given the scale and quality of our audience with additional runway in the years ahead. Through our sustainability initiatives, we seek to have a positive impact on the planet while driving positive returns on our investments. In August, we announced our goal to be carbon neutral by 2050 and have already achieved several milestones. These include our investment in renewable energy, recently doubling our solar infrastructure, and adding electric vehicle charging stations across our centers. We have also attained LEED Gold certification at an additional four centers. Now over 50% of our GLA is LEED certified. We continue to progress on our Nashville development, which is now over 80% lease committed. Construction is well underway and on track for grand opening in September of this year. Our anticipated stabilized yield of 7 to 7.5% remains unchanged. This center will add 290,000 square feet of GLA, tenanted with elevated national brands, best-in-class food and beverage, and entertainment concepts. Tanger Outlets Nashville will feature an updated design and layout which enables a sense of place for our shoppers, retailers, and community activations. We are encouraged by the success that we have achieved in Palm Beach, where we have rebranded the existing outlet center, Tanger Outlets Palm Beach. To date, we have realized strong tenant demand and executed robust leasing volume. We're looking forward to welcoming investors to this center during the upcoming city CEO conference in March. Looking ahead, we're well positioned for growth. Our occupancy cost ratio has increased by 50 basis points over the past year and at just 8.6% for 2022. We believe we still have significant runway to realize additional rent increases while providing tremendous value for our retailers and tenants. We have a model that generates strong free cash flow and a solid balance sheet, which provides us with the liquidity and flexibility to invest in our growth. We continue to return capital to shareholders through our well-covered and growing dividend. We are driving organic growth, unlocking additional value at our centers through redevelopments and activating other revenue opportunities while selectively pursuing external growth. Over the past two years, we have assembled an immensely talented and experienced senior management team. This team's capabilities are evident in our 2022 results, and I'm excited about the value we will continue to create in the quarters and years ahead. I'm pleased to now be turning this call over to our newest senior team member, Michael Billerman, Tanger's CFO and Chief Investment Officer. I want to thank our entire team, our shoppers, retailers, and all of our stakeholders for their continued support. I'd now like to turn the call over to Michael.