Tanger Factory Outlet Centers, Inc reported its financial results for the quarter and year ended December 31, 2013.
Funds from operations ("FFO") available to common shareholders, a widely accepted supplemental measure of REIT performance, increased 16.8% to $52.3 million, or $0.53 per share, for the three months ended December 31, 2013, compared to FFO of $44.7 million, or $0.45 per share for the three months ended December 31, 2012. For the year ended December 31, 2013, FFO increased 19.4% to $192.0 million, or $1.94 per share, as compared to FFO of $160.9 million, or $1.63 per share, for the year ended December 31, 2012.
"Strong tenant demand for space was the key driver for our growth in 2013, both internally and externally, which resulted in another year of solid financial performance for Tanger," commented Steven B. Tanger, President & Chief Executive Officer.
"Retailers are attracted to the outlet industry by its low relative cost of occupancy and a desire to connect with an increasing value-driven consumer. They partner with Tanger as an industry leader with a 33 year track record of developing, operating, and marketing high-quality outlet centers," he added.
Excluding these charges, adjusted funds from operations ("AFFO") increased 15.2% to $0.53 per share for the three months ended December 31, 2013, compared to $0.46 per share for the three months ended December 31, 2012. For the year ended December 31, 2013, AFFO per share increased 13.9% to $1.88 per share, compared to $1.65 per share for the year ended December 31, 2012.
Net income available to common shareholders for the three months ended December 31, 2013 increased 21.6% to $21.7 million, or $0.23 per share, as compared to net income of $17.8 million, or $0.19 per share for the three months ended December 31, 2012.
For the year ended December 31, 2013, net income available to common shareholders increased 102.9% to $106.4 million, or $1.13 per share, as compared to net income available to common shareholders of $52.4 million, or $0.57 per share, for the year ended December 31, 2012.
In addition to the charges described above, net income available to common shareholders for the year ended December 31, 2013 was also impacted by a $26.0 million gain on fair value measurement related to the acquisition of an additional one-third interest in the Deer Park property, and the consolidation of Deer Park into Tanger's financial statements as of August 30, 2013.
Net income, FFO and AFFO per share are on a diluted basis. FFO and AFFO are supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estatecompanies. Complete reconciliations containing adjustments from GAAP net income to FFO and to AFFO are included in this release.
Highlights for 2013
-Same center net operating income increased 3.5% during the quarter, and 4.3% for the year, marking the 36th consecutive quarter of same center net operating income growth
-Blended increase in average base rental rates on space renewed and released throughout the consolidated portfolio of 24.1%
-Period-end consolidated portfolio occupancy rate of 98.9% at December 31, 2013, marking the 33rd consecutive year with occupancy of 95% or greater at year end
-Comparable tenant sales for the consolidated portfolio increased 3.2% for the three months ended December 31, 2013, and 2.6% to $387 per square foot for the year ended December 31, 2013
-Debt-to-total market capitalization ratio of 29.4% as of December 31, 2013
-Interest coverage ratio of 4.36 times
-Total market capitalization increased to $4.5 billion at December 31, 2013
-Raised quarterly common share cash dividend by 7.1% on April 4, 2013, marking the 20th consecutive year of increased cash dividends
-Completed an expansion on Tanger Outlets Gonzales in Gonzales, Louisiana in April 2013
-Credit ratings upgraded by both Moody's and Standard & Poor's in May 2013
-Commenced construction of Tanger Outlets Ottawa on May 15, 2013
-Commenced construction to expand Tanger Outlets Cookstown on May 16, 2013
-Completed mortgage financing of Tanger Outlets Texas City on July 1, 2013
-Acquired a controlling interest in Tanger Outlets Deer Park, located in New York on Long Island on August 30, 2013
-Commenced construction in Charlotte, North Carolina on September 20, 2013
-Commenced construction of Tanger Outlets at Foxwoods in Mashantucket, Connecticut on September 26, 2013
-Completed recast of unsecured lines of credit on October 24, 2013, extending the maturity, reducing the overall borrowing costs, and improving the related debt covenants
-Completed a 10-year, 3.875% coupon, $250 million Senior Notes offering on November 25, 2013
