Tanger Inc.

Good morning. I'm Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to Tanger, Inc.' 's fourth quarter and full year 2025 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 IR website, investors.tanger.com. Please note this call may contain 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. 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 25th, 2026. At this time, all participants are in listen-only mode. Following management's prepared remarks, the call will be open for your questions. We request that everyone ask only one question and one follow-up question. If time permits, we are happy for you to recue for additional questions. On the call today will be Stephen 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 Yaloff. Please go ahead.

Thank you, Ashley, and good morning. I'm pleased to report that Tanger delivered another strong quarter, capping off a productive year and positioning us for continued growth. These results demonstrate how our differentiated platform is powering our ability to drive sustained growth across our portfolio, supported by limited new retail development, consolidating department store business, and favorable demographic and economic trends in the markets and communities we serve. Fourth quarter core FFO is 63 cents per share, growing 17% over the prior year period, 9% for the full year, and ahead of our guidance. We attribute this strong performance to our focused execution across all facets of our business, including record-breaking leasing production, the accretive integration of our recent acquisitions, and disciplined expense management across our enterprise, which contributed to a robust core FFO and same center NOI growth. Turning to leasing, we achieved leasing volume over 3 million square feet, our highest annual production on record. Occupancy at year end was 98.1%, a 70 basis point sequential increase, and we delivered another quarter of positive rent spreads and extended lease terms for both renewals and new deals. Tenant sales productivity remained high at $473 per square foot, up 7% from the prior year, and OCR remains at 9.7%, providing additional runway for growth. We have proactively addressed our 2026 lease role. And as of the end of January, we've addressed over 40% of the space scheduled to expire this year, providing an opportunity to focus on the tenanting opportunities and center merchandising initiatives. These metrics demonstrate the sustained retailer demand for our open air outlet and lifestyle centers. We remain laser focused on our core strategy of adding new uses and categories and replacing were performing tenants, allowing for continuous refreshment of our merchandising and offer. This strategy has served to deliver improved retailer sales performance and has been a significant driver of traffic growth, increased customer visit frequency at our centers, and NOI growth. Favorable market conditions supported by both a lack of new retail center development and a consolidation in the department store business has contributed to strong leasing demand across our portfolio, which we expect will continue. Growing local populations, robust retailer open buys, and our focus on diversifying our tenant mix to meet our growing customer base create a flywheel for sustained long-term growth across our portfolio. During the holiday season, we saw positive traffic performance as we leveraged print and digital channels to communicate retailer messaging compelling value and offers, and community events. We anniversaried our successful proactive holiday selling season marketing campaigns highlighted by our Every Day is Black Friday promotion starting the first week of November. Our holiday social media marketing initiatives furthered our engagement with younger shoppers seeking everyday value pricing at their favorite brands across our platform. Additionally, this important cohort are increasingly discovering and engaging with our growing Tanger Club and loyalty platform to enjoy even better deals during their shopping visits. Our ability to grow NOI through multiple avenues is key to Tanger's sustained success. 2025 was a notable year for intensifying and upgrading our real estate through peripheral land activation, center renovations, and the strategic addition of food, beverage, and entertainment uses. These initiatives contribute to the elevated dining and entertainment experience that our customers enjoy when they visit our centers. Better on-center experiences have proven to support our ability to attract more elevated brands that today's consumers demand. Across our portfolio, we are experiencing substantial population growth as families and businesses relocate to our growing market. This is fundamentally changing the customer base, which creates sustained demand and drives traffic throughout the week across all seasons and will continue to be a positive tailwind for our business. The strong population and domestic tourism growth in many of our markets has been widely recognized as major attractions and economic drivers plant flags in our communities. Recent examples include the announced sphere development adjacent to our National Harbor Center, in the Washington DC MSA, the Kansas City Chiefs stadium relocation to the Village West Entertainment District, home of our newly acquired Tanger Kansas City at Legends, and the announced relocation and development of Space Force on the Redstone Arsenal Campus in Huntsville, Alabama at the interchange shared by our Bridge Street Town Center. These announcements only reinforce our center's positioning as the center of the thriving, dynamic communities and offer long-term opportunities to invest additional capital, grow NOI, and increase value for stakeholders. We are making significant advancements in our tech initiatives, leveraging AI across our enterprise, enhancing operational efficiency, communicating with our shoppers and Tanger Club members, and supporting our customer service programs. For example, our multilingual AI chatbot successfully handled more than half of our customer service interactions last year. Tanger's enhanced technology platform positions us to unlock even greater opportunities for innovation, transformation, and actionable insights for the future. We strengthened our balance sheet by completing several post-year-end transactions which addressed upcoming bond maturities, strengthened our liquidity position, and mitigated refinancing costs. Our well-positioned balance sheet provides us the flexibility to reinvest in retenanting our existing portfolio and align our assets with the growing opportunities in our markets while pursuing selective external growth opportunities. As the retail landscape continues to evolve, Tanger's value proposition remains highly relevant, combining desirable shopping and valued brands and experiences in thriving communities. We're creating the shopping destinations that resonate with the consumers of the future while delivering consistent value to our retailers, shoppers, and shareholders. Finally, I'm very proud that Tanger was recently named by Newsweek as one of America's greatest workplaces for culture, belonging, and community in 2026. as well as one of America's greatest workplaces for women, which recognize companies that have made an inclusive workplace environment the foundation of their organizational success. I want to thank our dedicated Tanger team members, retail partners, loyal shoppers, and shareholders for your continued support as we build on this momentum in 2026. I'll now turn the call over to Michael to discuss our financial results.

recent capital markets activity and 2026 guidance in more detail thank you steve we delivered core ffo of 63 cents per share in the fourth quarter representing a 16.7 increase compared to the 54 cents per share in the prior year period and we ended 2025 delivering core ffo of 2.33 cents per share up 9.4% from the $2.13 we produced in 2024. This growth was driven by solid same center NOI growth of 4.3% for the year, which reflects the success of our leasing, operating and marketing strategies, along with contributions from our creative external growth activity. Our full year results came in just above the high end of our recent guidance on modestly higher same-center NOI growth and better performance from our acquisitions. Leasing activity across our portfolio continues to be positive, allowing us to capture total rent growth through a combination of improved base rents and increased tenant reimbursements. We also continue to grow the contribution from other revenues while remaining disciplined with cost management. Our tenant watch list remains at manageable levels, and we weren't surprised by the recently announced tenant bankruptcies, which we believe provide attractive opportunities for re-merchandising over time. Turning to our balance sheet, we completed a number of significant capital markets transactions in early January, raising and refinancing $800 million of debt, which improved an already strong balance sheet by enhancing our liquidity, increasing our flexibility, extending our debt duration, lowering our pricing, expanding our bank group, and importantly, reducing risk. We thank our lenders and investors for their support. Let me just spend a couple of minutes detailing these transactions and how they fit into our overall capital structure and forward liquidity. Now, at the end of 2025, we had $1.8 billion of prorated debt, with $350 million of unsecured debt coming due this September at 3.125%. We also had $44 million drawn on our 620 million lines of credit, and we had an overall debt duration of under three years. Pro forma for the upsized term loans and the exchangeable that we completed in January, the company now has over $1 billion of immediate liquidity, which includes $270 million of cash, another $150 million available to us under delayed draws on the new term loans, and the full availability on our 620 million lines of credit. This capacity provides us with significant financial flexibility to invest in our portfolio, explore external growth opportunities, and have the capital to repay the unsecured notes that mature in September. Through these transactions, and assuming we pay off the September bonds and the Kansas City mortgage in 27, we will have extended our debt duration by two years locked in forward rates for the next five to seven years, and lowered our weighted average interest rate by approximately 10 basis points. Now, in terms of the deals, we first closed on $550 million of unsecured term loans due in 2030 and 2033. which increased our total term loan capacity by $225 million, with $150 million of that increased capacity on delayed draw features over the next four to seven months. Blended, these new term loans are priced at just over 100 basis points over SOFR at our current ratings grid, and we have swaps in place to fix this debt attractively. We were also able to remove the 10 basis point credit spread adjustment on the term loans and our lines of credit. At the closing in early January, we borrowed $400 million of the $550 million, which increased our term loan borrowings by $75 million from year end. Second, we issued $250 million of five-year exchangeable senior notes, which carry a coupon of 2.375%. While the conversion price was set at $41.55 per share, which was up 22.5% from the close on January 7th, the company entered into capped call transactions, which raised the effective conversion price to $47.49 per share, or up 40% from the January 7th close. If we amortize the cost of the capped call and the transaction expenses into the coupon, the effective yield on the notes rises to the mid-3% range over the next five years. The $250 million of par value notes are to be settled in cash, with the premium above par paid in shares or cash at our option. Overall, these refinancing moves underscore our long-term focus, positioning the balance sheet with conservative leverage metrics, that provide the company with significant financial flexibility to support both our operational needs and our strategic growth initiatives to drive value for stakeholders. our leverage remains below peers and our targets, providing additional capacity with net debt to adjusted EBITDA at pro rata share of only 4.7 times at year end, which is benefiting from our continued strong EBITDA growth and the retention of free cash flow after dividends with our growing dividend only representing 61% of our funds available for distribution. Pro forma for the financing transactions, 100% of our debt is at fixed rates, inclusive of our swaps. And our pro forma weighted average interest rate stands at about 4%, with a weighted average term to maturity of four years, rising to five years, assuming the payoff of the September bonds in Kansas City Mortgage. Note that we've added a pro forma debt chart to our supplemental on page 18. and one in our investor presentation on page 15 to provide additional details. Now, turning to our inaugural guidance for 2026, we expect core FFO per share in the range of $2.41 to $2.49 a share, which is up over 5% at the midpoint, reflecting the continued organic growth and the contribution of our external growth activity. We expect strong same-center NOI growth in the range of 2.25% to 4.25%, with only Pinecrest and Kansas City remaining in the non-same-center pool. In addition, as we've discussed, our quarterly same-center NOI can vary given the timing of our operating expenses throughout the year against fixed-CAM recoveries, which are more evenly distributed throughout the year. also following usual seasonal patterns. Our occupancy peaks at year end and then rebuilds throughout the year. We expect recurring CapEx in the range of $65 to $75 million, which reflects the growing size of our portfolio, our focus on re-tenanting and reinvestment, with CapEx overall remaining in the mid-teens as a percentage of NOI. For additional details on our key assumptions, please see our release issued last night. One housekeeping note, we do plan to file our 10K tomorrow after the close, which will also be filed by the filing of an updated shelf, which reaches its three-year term in 2026, the resale agreement for our convert, and we'll also be refiling our ATM, where no issuances have occurred since late 2024. We are greatly looking forward to seeing many of you at upcoming events over the next few months. Please reach out to the respective firms if you'd like to join and meet with us. And with that, operator, I'd now like to open the call up for questions.