x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
North Carolina (Tanger Factory Outlet Centers, Inc.) | 56-1815473 |
North Carolina (Tanger Properties Limited Partnership) | 56-1822494 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3200 Northline Avenue, Suite 360, Greensboro, NC 27408 | |
(Address of principal executive offices) | |
(336) 292-3010 | |
(Registrant's telephone number, including area code) |
Tanger Factory Outlet Centers, Inc. | Yes x No o |
Tanger Properties Limited Partnership | Yes x No o |
Tanger Factory Outlet Centers, Inc. | Yes x No o |
Tanger Properties Limited Partnership | Yes x No o |
Tanger Factory Outlet Centers, Inc. | ||
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) | Emerging growth company o |
Tanger Properties Limited Partnership | ||
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer x | Smaller reporting company o | |
(Do not check if a smaller reporting company) | Emerging growth company o |
Tanger Factory Outlet Centers, Inc. | o |
Tanger Properties Limited Partnership | o |
Tanger Factory Outlet Centers, Inc. | Yes o No x |
Tanger Properties Limited Partnership | Yes o No x |
• | enhancing investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and |
• | creating time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | Debt of the Company and the Operating Partnership; |
• | Shareholders' Equity, if applicable, and Partners' Equity; |
• | Earnings Per Share and Earnings Per Unit; |
• | Accumulated Other Comprehensive Income of the Company and the Operating Partnership; |
• | Liquidity and Capital Resources in the Management's Discussion and Analysis of Financial Condition and Results of Operations. |
Page Number | |
Part I. Financial Information | |
Item 1. | |
FINANCIAL STATEMENTS OF TANGER FACTORY OUTLET CENTERS, INC. (Unaudited) | |
Consolidated Balance Sheets - as of June 30, 2018 and December 31, 2017 | |
Consolidated Statements of Operations - for the three and six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Comprehensive Income - for the three and six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Shareholders' Equity - for the six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Cash Flows - for the six months ended June 30, 2018 and 2017 | |
FINANCIAL STATEMENTS OF TANGER PROPERTIES LIMITED PARTNERSHIP (Unaudited) | |
Consolidated Balance Sheets - as of June 30, 2018 and December 31, 2017 | |
Consolidated Statements of Operations - for the three and six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Comprehensive Income - for the three and six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Equity - for the six months ended June 30, 2018 and 2017 | |
Consolidated Statements of Cash Flows - for the six months ended June 30, 2018 and 2017 | |
Condensed Notes to Consolidated Financial Statements of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. Controls and Procedures (Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership) | |
Part II. Other Information | |
Item 1. Legal Proceedings | |
Item 1A. Risk Factors | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 4. Mine Safety Disclosure | |
Item 6. Exhibits | |
Signatures |
June 30, 2018 | December 31, 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 |
Three months ended June 30, | Six months ended 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 (expense) | 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 | ||||||||
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 | ||||||||
Dividends declared per common share | $ | 0.3500 | $ | 0.3425 | $ | 0.6925 | $ | 0.6675 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 24,290 | $ | 30,947 | $ | 47,975 | $ | 54,461 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustments | (2,002 | ) | 3,074 | (5,097 | ) | 4,084 | ||||||||||
Change in fair value of cash flow hedges | 844 | (544 | ) | 3,583 | 178 | |||||||||||
Other comprehensive income (loss) | (1,158 | ) | 2,530 | (1,514 | ) | 4,262 | ||||||||||
Comprehensive income | 23,132 | 33,477 | 46,461 | 58,723 | ||||||||||||
Comprehensive income attributable to noncontrolling interests | (1,262 | ) | (1,702 | ) | (2,091 | ) | (2,949 | ) | ||||||||
Comprehensive income attributable to Tanger Factory Outlet Centers, Inc. | $ | 21,870 | $ | 31,775 | $ | 44,370 | $ | 55,774 |
Common shares | Paid in capital | Accumulated distributions in excess of earnings | Accumulated other comprehensive loss | Equity attributable to Tanger Factory Outlet Centers, Inc. | Noncontrolling interests in Operating Partnership | Noncontrolling interests in other consolidated partnerships | Total equity | ||||||||||||||||||
Balance, December 31, 2016 | $ | 961 | $ | 820,251 | $ | (122,701 | ) | $ | (28,295 | ) | $ | 670,216 | $ | 35,066 | $ | 159 | $ | 705,441 | |||||||
Net income | — | — | 51,726 | — | 51,726 | 2,735 | — | 54,461 | |||||||||||||||||
Other comprehensive income | — | — | — | 4,048 | 4,048 | 214 | — | 4,262 | |||||||||||||||||
Compensation under Incentive Award Plan | — | 7,306 | — | — | 7,306 | — | — | 7,306 | |||||||||||||||||
Issuance of 1,800 common shares upon exercise of options | — | 54 | — | — | 54 | — | — | 54 | |||||||||||||||||
Grant of 428,312 restricted common share awards, net of forfeitures | 4 | (4 | ) | — | — | — | — | — | — | ||||||||||||||||
Repurchase of 1,497,981 common shares, including transaction costs | (15 | ) | (39,339 | ) | — | — | (39,354 | ) | — | — | (39,354 | ) | |||||||||||||
Withholding of 69,886 common shares for employee income taxes | — | (2,435 | ) | — | — | (2,435 | ) | — | — | (2,435 | ) | ||||||||||||||
Adjustment for noncontrolling interests in Operating Partnership | — | 1,422 | — | — | 1,422 | (1,422 | ) | — | — | ||||||||||||||||
Common dividends ($.6675 per share) | — | — | (65,250 | ) | — | (65,250 | ) | — | — | (65,250 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | (3,356 | ) | — | (3,356 | ) | |||||||||||||||
Balance, June 30, 2017 | $ | 950 | $ | 787,255 | $ | (136,225 | ) | $ | (24,247 | ) | $ | 627,733 | $ | 33,237 | $ | 159 | $ | 661,129 | |||||||
The accompanying notes are an integral part of these consolidated financial statements. | |||||||||||||||||||||||||
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands, except share and per share data, unaudited) | |||||||||||||||||||||||||
Common shares | Paid in capital | Accumulated distributions in excess of earnings | Accumulated other comprehensive loss | Equity attributable to Tanger Factory Outlet Centers, Inc. | Noncontrolling interests in Operating Partnership | Noncontrolling interests in other consolidated partnerships | Total equity | ||||||||||||||||||
Balance, December 31, 2017 | $ | 946 | $ | 784,782 | $ | (184,865 | ) | $ | (19,285 | ) | $ | 581,578 | $ | 30,724 | $ | — | $ | 612,302 | |||||||
Net income | — | — | 45,807 | — | 45,807 | 2,446 | (278 | ) | 47,975 | ||||||||||||||||
Other comprehensive loss | — | — | — | (1,437 | ) | (1,437 | ) | (77 | ) | — | (1,514 | ) | |||||||||||||
Compensation under Incentive Award Plan | — | 7,596 | — | — | 7,596 | — | — | 7,596 | |||||||||||||||||
Grant of 355,184 restricted common share awards, net of forfeitures | 3 | (3 | ) | — | — | — | — | — | — | ||||||||||||||||
Repurchase of 919,249 common shares, including transaction costs | (9 | ) | (19,989 | ) | — | — | (19,998 | ) | — | — | (19,998 | ) | |||||||||||||
Withholding of 89,437 common shares for employee income taxes | (1 | ) | (2,067 | ) | — | — | (2,068 | ) | — | — | (2,068 | ) | |||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | 445 | 445 | |||||||||||||||||
Adjustment for noncontrolling interests in Operating Partnership | — | 558 | — | — | 558 | (558 | ) | — | — | ||||||||||||||||
Common dividends ($.6925 per share) | — | — | (65,448 | ) | — | (65,448 | ) | — | — | (65,448 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | (3,459 | ) | (167 | ) | (3,626 | ) | ||||||||||||||
Balance, June 30, 2018 | $ | 939 | $ | 770,877 | $ | (204,506 | ) | $ | (20,722 | ) | $ | 546,588 | $ | 29,076 | $ | — | $ | 575,664 |
Six months ended June 30, | ||||||||
2018 | 2017 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 47,975 | $ | 54,461 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 65,817 | 64,199 | ||||||
Amortization of deferred financing costs | 1,532 | 1,749 | ||||||
Gain on sale of assets | — | (6,943 | ) | |||||
Equity in earnings of unconsolidated joint ventures | (4,400 | ) | (4,692 | ) | ||||
Equity-based compensation expense | 7,045 | 6,796 | ||||||
Amortization of debt (premiums) and discounts, net | 204 | 245 | ||||||
Amortization (accretion) of market rent rate adjustments, net | 1,251 | 1,691 | ||||||
Straight-line rent adjustments | (3,294 | ) | (3,293 | ) | ||||
Distributions of cumulative earnings from unconsolidated joint ventures | 4,332 | 4,952 | ||||||
Changes in other assets and liabilities: | ||||||||
Other assets | 3,738 | 787 | ||||||
Accounts payable and accrued expenses | (8,833 | ) | (9,198 | ) | ||||
Net cash provided by operating activities | 115,367 | 110,754 | ||||||
INVESTING ACTIVITIES | ||||||||
Additions to rental property | (41,212 | ) | (88,761 | ) | ||||
Additions to investments in unconsolidated joint ventures | (1,497 | ) | (3,617 | ) | ||||
Net proceeds from sale of assets | — | 39,213 | ||||||
Additions to non-real estate assets | (1,114 | ) | (7,959 | ) | ||||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | 13,911 | 6,330 | ||||||
Additions to deferred lease costs | (2,821 | ) | (2,845 | ) | ||||
Other investing activities | 4,032 | 2,591 | ||||||
Net cash used in investing activities | (28,701 | ) | (55,048 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Cash dividends paid | (65,448 | ) | (65,250 | ) | ||||
Distributions to noncontrolling interests in Operating Partnership | (3,459 | ) | (3,356 | ) | ||||
Proceeds from revolving credit facility | 295,600 | 326,254 | ||||||
Repayments of revolving credit facility | (280,000 | ) | (286,127 | ) | ||||
Proceeds from notes, mortgages and loans | — | 454 | ||||||
Repayments of notes, mortgages and loans | (10,169 | ) | (1,483 | ) | ||||
Repurchase of common shares, including transaction costs | (19,998 | ) | (39,354 | ) | ||||
Employee income taxes paid related to shares withheld upon vesting of equity awards | (2,068 | ) | (2,435 | ) | ||||
Additions to deferred financing costs | (2,615 | ) | (50 | ) | ||||
Proceeds from exercise of options | — | 54 | ||||||
Proceeds from other financing activities | 445 | 11,718 | ||||||
Payment for other financing activities | (741 | ) | — | |||||
Net cash used in financing activities | (88,453 | ) | (59,575 | ) | ||||
Effect of foreign currency rate changes on cash and cash equivalents | (53 | ) | 9 | |||||
Net decrease in cash and cash equivalents | (1,840 | ) | (3,860 | ) | ||||
Cash and cash equivalents, beginning of period | 6,101 | 12,222 | ||||||
Cash and cash equivalents, end of period | $ | 4,261 | $ | 8,362 |
June 30, 2018 | December 31, 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 | 4,135 | 6,050 | ||||||
Investments in unconsolidated joint ventures | 110,502 | 119,436 | ||||||
Deferred lease costs and other intangibles, net | 124,234 | 132,061 | ||||||
Prepaids and other assets | 98,428 | 95,384 | ||||||
Total assets | $ | 2,487,917 | $ | 2,539,434 | ||||
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 | 64,765 | 89,745 | ||||||
Other liabilities | 79,281 | 73,736 | ||||||
Total liabilities | 1,912,253 | 1,927,132 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Partners' Equity: | ||||||||
General partner, 1,000,000 units outstanding at June 30, 2018 and December 31, 2017 | 5,637 | 5,844 | ||||||
Limited partners, 4,995,433 and 4,995,433 Class A common units, and 92,907,034 and 93,560,536 Class B common units outstanding at June 30, 2018 and December 31, 2017, respectively | 591,886 | 626,803 | ||||||
Accumulated other comprehensive loss | (21,859 | ) | (20,345 | ) | ||||
Total partners' equity | 575,664 | 612,302 | ||||||
Noncontrolling interests in consolidated partnerships | — | — | ||||||
Total equity | 575,664 | 612,302 | ||||||
Total liabilities and equity | $ | 2,487,917 | $ | 2,539,434 |
Three months ended June 30, | Six months ended 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 (expense) | 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 consolidated partnerships | (92 | ) | — | 278 | — | |||||||||||
Net income available to partners | 24,198 | 30,947 | 48,253 | 54,461 | ||||||||||||
Net income available to limited partners | 23,954 | 30,641 | 47,768 | 53,922 | ||||||||||||
Net income available to general partner | $ | 244 | $ | 306 | $ | 485 | $ | 539 | ||||||||
Basic earnings per common unit: | ||||||||||||||||
Net income | $ | 0.24 | $ | 0.31 | $ | 0.48 | $ | 0.54 | ||||||||
Diluted earnings per common unit: | ||||||||||||||||
Net income | $ | 0.24 | $ | 0.31 | $ | 0.48 | $ | 0.54 | ||||||||
Distribution declared per common unit | $ | 0.3500 | $ | 0.3425 | $ | 0.6925 | $ | 0.6675 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 24,290 | $ | 30,947 | $ | 47,975 | $ | 54,461 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustments | (2,002 | ) | 3,074 | (5,097 | ) | 4,084 | ||||||||||
Changes in fair value of cash flow hedges | 844 | (544 | ) | 3,583 | 178 | |||||||||||
Other comprehensive income (loss) | (1,158 | ) | 2,530 | (1,514 | ) | 4,262 | ||||||||||
Comprehensive income | 23,132 | 33,477 | 46,461 | 58,723 | ||||||||||||
Comprehensive income attributable to noncontrolling interests in consolidated partnerships | (92 | ) | — | 278 | — | |||||||||||
Comprehensive income attributable to the Operating Partnership | $ | 23,040 | $ | 33,477 | $ | 46,739 | $ | 58,723 |
General partner | Limited partners | Accumulated other comprehensive loss | Total partners' equity | Noncontrolling interests in consolidated partnerships | Total equity | ||||||||||||||
Balance, December 31, 2016 | $ | 6,485 | $ | 728,631 | $ | (29,834 | ) | $ | 705,282 | $ | 159 | $ | 705,441 | ||||||
Net income | 539 | 53,922 | — | 54,461 | — | 54,461 | |||||||||||||
Other comprehensive income | — | — | 4,262 | 4,262 | — | 4,262 | |||||||||||||
Compensation under Incentive Award Plan | — | 7,306 | — | 7,306 | — | 7,306 | |||||||||||||
Issuance of 1,800 common units upon exercise of options | — | 54 | — | 54 | — | 54 | |||||||||||||
Grant of 428,312 restricted common share awards by the Company, net of forfeitures | — | — | — | — | — | — | |||||||||||||
Repurchase of 1,497,981 units, including transaction costs | — | (39,354 | ) | — | (39,354 | ) | — | (39,354 | ) | ||||||||||
Withholding of 69,886 common units for employee income taxes | — | (2,435 | ) | — | (2,435 | ) | — | (2,435 | ) | ||||||||||
Common distributions ($.6675 per common unit) | (668 | ) | (67,938 | ) | — | (68,606 | ) | — | (68,606 | ) | |||||||||
Balance, June 30, 2017 | $ | 6,356 | $ | 680,186 | $ | (25,572 | ) | $ | 660,970 | $ | 159 | $ | 661,129 | ||||||
General partner | Limited partners | Accumulated other comprehensive loss | Total partners' equity | Noncontrolling interests in consolidated partnerships | Total equity | ||||||||||||||
Balance, December 31, 2017 | $ | 5,844 | $ | 626,803 | $ | (20,345 | ) | $ | 612,302 | $ | — | $ | 612,302 | ||||||
Net income | 485 | 47,768 | — | 48,253 | (278 | ) | 47,975 | ||||||||||||
Other comprehensive loss | — | — | (1,514 | ) | (1,514 | ) | — | (1,514 | ) | ||||||||||
Compensation under Incentive Award Plan | — | 7,596 | — | 7,596 | — | 7,596 | |||||||||||||
Grant of 355,184 restricted common share awards by the Company | — | — | — | — | — | — | |||||||||||||
Repurchase of 919,249 units, including transaction costs | — | (19,998 | ) | — | (19,998 | ) | — | (19,998 | ) | ||||||||||
Withholding of 89,437 common units for employee income taxes | — | (2,068 | ) | — | (2,068 | ) | — | (2,068 | ) | ||||||||||
Contributions from noncontrolling interests | — | — | — | — | 445 | 445 | |||||||||||||
Common distributions ($.6925 per common unit) | (692 | ) | (68,215 | ) | — | (68,907 | ) | — | (68,907 | ) | |||||||||
Distributions to noncontrolling interests | — | — | — | — | (167 | ) | (167 | ) | |||||||||||
Balance, June 30, 2018 | $ | 5,637 | $ | 591,886 | $ | (21,859 | ) | $ | 575,664 | $ | — | $ | 575,664 | ||||||
Six months ended June 30, | ||||||||
2018 | 2017 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 47,975 | $ | 54,461 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 65,817 | 64,199 | ||||||
Amortization of deferred financing costs | 1,532 | 1,749 | ||||||
Gain on sale of assets | — | (6,943 | ) | |||||
Equity in earnings of unconsolidated joint ventures | (4,400 | ) | (4,692 | ) | ||||
Equity-based compensation expense | 7,045 | 6,796 | ||||||
Amortization of debt (premiums) and discounts, net | 204 | 245 | ||||||
Amortization (accretion) of market rent rate adjustments, net | 1,251 | 1,691 | ||||||
Straight-line rent adjustments | (3,294 | ) | (3,293 | ) | ||||
Distributions of cumulative earnings from unconsolidated joint ventures | 4,332 | 4,952 | ||||||
Changes in other assets and liabilities: | ||||||||
Other assets | 3,672 | 487 | ||||||
Accounts payable and accrued expenses | (8,842 | ) | (8,986 | ) | ||||
Net cash provided by operating activities | 115,292 | 110,666 | ||||||
INVESTING ACTIVITIES | ||||||||
Additions to rental property | (41,212 | ) | (88,761 | ) | ||||
Additions to investments in unconsolidated joint ventures | (1,497 | ) | (3,617 | ) | ||||
Net proceeds from sale of assets | — | 39,213 | ||||||
Additions to non-real estate assets | (1,114 | ) | (7,959 | ) | ||||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | 13,911 | 6,330 | ||||||
Additions to deferred lease costs | (2,821 | ) | (2,845 | ) | ||||
Other investing activities | 4,032 | 2,591 | ||||||
Net cash used in investing activities | (28,701 | ) | (55,048 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Cash distributions paid | (68,907 | ) | (68,606 | ) | ||||
Proceeds from revolving credit facility | 295,600 | 326,254 | ||||||
Repayments of revolving credit facility | (280,000 | ) | (286,127 | ) | ||||
Proceeds from notes, mortgages and loans | — | 454 | ||||||
Repayments of notes, mortgages and loans | (10,169 | ) | (1,483 | ) | ||||
Repurchase of units, including transaction costs | (19,998 | ) | (39,354 | ) | ||||
Employee income taxes paid related to shares withheld upon vesting of equity awards | (2,068 | ) | (2,435 | ) | ||||
Additions to deferred financing costs | (2,615 | ) | (50 | ) | ||||
Proceeds from exercise of options | — | 54 | ||||||
Proceeds from other financing activities | 445 | 11,718 | ||||||
Payment for other financing activities | (741 | ) | — | |||||
Net cash used in financing activities | (88,453 | ) | (59,575 | ) | ||||
Effect of foreign currency on cash and cash equivalents | (53 | ) | 9 | |||||
Net decrease in cash and cash equivalents | (1,915 | ) | (3,948 | ) | ||||
Cash and cash equivalents, beginning of period | 6,050 | 12,199 | ||||||
Cash and cash equivalents, end of period | $ | 4,135 | $ | 8,251 |
Property | Location | Date Sold | Square Feet (in 000's) | Net Sales Proceeds (in 000's) | Gain on Sale(in 000's) | ||||||||||
Westbrook | Westbrook, CT | May 2017 | 290 | $ | 39,212 | $ | 6,943 |
As of June 30, 2018 | ||||||||||||||||
Joint Venture | Outlet Center Location | Ownership % | Square Feet (in 000's) | Carrying Value of Investment (in millions) | Total Joint Venture Debt, Net (in millions)(1) | |||||||||||
National Harbor | National Harbor, MD | 50.0 | % | 341 | $ | 1.2 | $ | 86.6 | ||||||||
RioCan Canada | Various | 50.0 | % | 923 | 109.3 | 10.2 | ||||||||||
Investments included in investments in unconsolidated joint ventures | $ | 110.5 | ||||||||||||||
Columbus(2) | Columbus, OH | 50.0 | % | 355 | $ | (0.3 | ) | $ | 84.6 | |||||||
Charlotte(2) | Charlotte, NC | 50.0 | % | 398 | (9.8 | ) | 99.6 | |||||||||
Galveston/Houston (2) | Texas City, TX | 50.0 | % | 353 | (15.5 | ) | 79.5 | |||||||||
Investments included in other liabilities | $ | (25.6 | ) |
As of December 31, 2017 | ||||||||||||||||
Joint Venture | Outlet Center Location | Ownership % | Square Feet (in 000's) | Carrying Value of Investment (in millions) | Total Joint Venture Debt, Net (in millions)(1) | |||||||||||
Columbus | Columbus, OH | 50.0 | % | 355 | $ | 1.1 | $ | 84.4 | ||||||||
National Harbor | National Harbor, MD | 50.0 | % | 341 | 2.5 | 86.4 | ||||||||||
RioCan Canada | Various | 50.0 | % | 923 | 115.8 | 11.1 | ||||||||||
Investments included in investments in unconsolidated joint ventures | $ | 119.4 | ||||||||||||||
Charlotte(2) | Charlotte, NC | 50.0 | % | 398 | $ | (4.1 | ) | $ | 89.8 | |||||||
Galveston/Houston (2) | Texas City, TX | 50.0 | % | 353 | (13.0 | ) | 79.4 | |||||||||
Investments included in other liabilities | $ | (17.1 | ) |
(1) | Net of debt origination costs and including premiums of $1.4 million as of June 30, 2018 and December 31, 2017. |
(2) | The negative carrying value is due to distributions exceeding contributions and increases or decreases from the equity in earnings of the joint venture. |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Fee: | ||||||||||||||||
Management and marketing | $ | 565 | $ | 570 | $ | 1,133 | $ | 1,112 | ||||||||
Leasing and other fees | 65 | 39 | 110 | 76 | ||||||||||||
Total Fees | $ | 630 | $ | 609 | $ | 1,243 | $ | 1,188 |
Condensed Combined Balance Sheets - Unconsolidated Joint Ventures | June 30, 2018 | December 31, 2017 | ||||||
Assets | ||||||||
Land | $ | 93,222 | $ | 95,686 | ||||
Buildings, improvements and fixtures | 497,518 | 505,618 | ||||||
Construction in progress | 2,994 | 3,005 | ||||||
593,734 | 604,309 | |||||||
Accumulated depreciation | (103,662 | ) | (93,837 | ) | ||||
Total rental property, net | 490,072 | 510,472 | ||||||
Cash and cash equivalents | 18,352 | 25,061 | ||||||
Deferred lease costs and other intangibles, net | 10,057 | 10,985 | ||||||
Prepaids and other assets | 16,944 | 15,073 | ||||||
Total assets | $ | 535,425 | $ | 561,591 | ||||
Liabilities and Owners' Equity | ||||||||
Mortgages payable, net | $ | 360,529 | $ | 351,259 | ||||
Accounts payable and other liabilities | 12,253 | 14,680 | ||||||
Total liabilities | 372,782 | 365,939 | ||||||
Owners' equity | 162,643 | 195,652 | ||||||
Total liabilities and owners' equity | $ | 535,425 | $ | 561,591 |
Three months ended | Six months ended | |||||||||||||||
Condensed Combined Statements of Operations | June 30, | June 30, | ||||||||||||||
- Unconsolidated Joint Ventures | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | $ | 23,406 | $ | 23,285 | $ | 47,403 | $ | 47,347 | ||||||||
Expenses: | ||||||||||||||||
Property operating | 8,958 | 8,877 | 18,886 | 18,255 | ||||||||||||
General and administrative | 54 | 96 | 253 | 216 | ||||||||||||
Depreciation and amortization | 6,545 | 6,943 | 12,907 | 14,456 | ||||||||||||
Total expenses | 15,557 | 15,916 | 32,046 | 32,927 | ||||||||||||
Operating income | 7,849 | 7,369 | 15,357 | 14,420 | ||||||||||||
Interest expense | (3,388 | ) | (2,460 | ) | (6,465 | ) | (4,720 | ) | ||||||||
Other non-operating income | 55 | 1 | 107 | 3 | ||||||||||||
Net income | $ | 4,516 | $ | 4,910 | $ | 8,999 | $ | 9,703 | ||||||||
The Company and Operating Partnership's share of: | ||||||||||||||||
Net income | $ | 2,206 | $ | 2,374 | $ | 4,400 | $ | 4,692 | ||||||||
Depreciation and amortization expense (real estate related) | $ | 3,325 | $ | 3,550 | $ | 6,554 | $ | 7,388 |
As of | ||||||||
June 30, 2018 | December 31, 2017 | |||||||
Unsecured lines of credit | $ | 223,700 | $ | 208,100 | ||||
Unsecured term loan | $ | 325,000 | $ | 325,000 |
As of | As of | ||||||||||||||||||||
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||
Stated Interest Rate(s) | Maturity Date | Principal | Book Value(1) | Principal | Book Value(1) | ||||||||||||||||
Senior, unsecured notes: | |||||||||||||||||||||
Senior notes | 3.875 | % | December 2023 | $ | 250,000 | $ | 246,348 | $ | 250,000 | $ | 246,036 | ||||||||||
Senior notes | 3.750 | % | December 2024 | 250,000 | 247,587 | 250,000 | 247,410 | ||||||||||||||
Senior notes | 3.125 | % | September 2026 | 350,000 | 345,397 | 350,000 | 345,128 | ||||||||||||||
Senior notes | 3.875 | % | July 2027 | 300,000 | 296,373 | 300,000 | 296,182 | ||||||||||||||
Mortgages payable: | |||||||||||||||||||||
Atlantic City (2)(3) | 5.14%-7.65% | November 2021- December 2026 | 35,892 | 38,111 | 37,462 | 39,879 | |||||||||||||||
Southaven | LIBOR + 1.80% | April 2021 | 51,400 | 51,124 | 60,000 | 59,881 | |||||||||||||||
Unsecured term loan | LIBOR + 0.95% | April 2021 | 325,000 | 323,249 | 325,000 | 322,975 | |||||||||||||||
Unsecured lines of credit | LIBOR + 0.875% | October 2021 | 223,700 | 220,018 |