What changed in this filing

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Item 1. Business

2022-02-22 compared with 2021-02-23 · 116 added, 79 removed, 148 unchanged (57% of the section changed)

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Our outlet centers and other assets are held by, and all of our operations are conducted by, Tanger Properties Limited Partnership and subsidiaries, which we refer to as the Operating Partnership.

The Company owns the majority of the units of partnership interest issued by the Operating Partnership through its two wholly-owned subsidiaries, Tanger GP Trust and Tanger LP Trust.

Tanger GP Trust controls the Operating Partnership as its sole general partner.

The Company, including its wholly-owned subsidiary, Tanger LP Trust, owns the majority of the units of partnership interest issued by the Operating Partnership.

The Company controls the Operating Partnership as its sole general partner.

Tanger LP Trust holds a limited partnership interest.

As of December 31, 2020, the Company, through its ownership of the Tanger GP Trust and Tanger LP Trust, owned 93,569,801 units of the Operating Partnership and the Non-Company LPs collectively owned 4,794,643 Class A common limited partnership units.

As of December 31, 2021, the Company and its wholly-owned subsidiaries owned 104,084,734 units of the Operating Partnership and the Non-Company LPs collectively owned 4,761,559 Class A common limited partnership units.

Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one of the Company's common shares, subject to certain limitations to preserve the Company's status as a REIT.

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Recent Developments

COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of the Coronavirus Disease 2019 ("COVID-19") to be a pandemic, which continues to be a serious challenge throughout the United States.

The current COVID-19 pandemic has had, and will continue to have, repercussions across local, national and global economies and financial markets.

Although our outlet centers remained open, retailers began closing their stores in our outlet centers in mid-March and by April 6, 2020, substantially all of the stores in our portfolio were closed as a result of mandates by order of local and state authorities.

Reopened stores as a percentage of total leased stores improved over time as mandates were lifted, from 1% on April 6, 2020 to 56% on June 3, 2020 to 72% on June 14, 2020.

By June 15, 2020, in-store shopping for non-essential retail was allowed in every market in which our centers are located.

As of December 31, 2020, 99.9% of total occupied stores in our consolidated portfolio had reopened, representing 99.9% of leased square footage and 99.9% of annualized base rent.

Our outlet centers may experience additional short-term store closures as retailers implement additional safety protocols at specific locations impacted by increased exposure to COVID-19.

A number of our tenants have requested rent deferrals, rent abatements or other types of rent relief during this pandemic.

As a response, in late March 2020, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021.

Our rent collection rates on contractually billed fixed rents were significantly impacted during the second quarter but steadily improved during the second half of the year, as the Company collected approximately 63% of second quarter billed rents, 91% of third quarter billed rents, and 95% of fourth quarter billed rents.

In addition, traffic during the fourth quarter represented approximately 90% of prior year levels and increased to approximately 96% in January.

Governmental mandates effective between late December and early-to-mid-February impacted traffic at the Tanger Outlet Centers in Canada, and excluding those centers, domestic traffic was over 99% in January compared to prior year levels.

Given the economic environment as a result of COVID-19, a select number of our tenants underwent liquidity hardships and filed for Chapter 11 bankruptcy protection.

During the year ended December 31, 2020, we recaptured approximately 903,000 square feet within the consolidated portfolio related to bankruptcies and brand-wide restructurings by retailers, compared to 198,000 square feet during the year ended December 31, 2019.

As a direct result of the pandemic, bankruptcies and restructurings discussed above, the Company's earnings were negatively impacted by approximately $47.3 million due to (1) write-offs related to bankruptcies and other uncollectible accounts due to financial weakness, (2) one-time concessions in exchange for landlord-favorable amendments to lease structure, (3) reserves for a portion of deferred and under negotiation billings that we expect to become uncollectible in future periods, (4) and write-offs of straight-line rents associated with the bankruptcies and uncollectible accounts.

Please see "COVID-19 Pandemic" in the Management's Discussion and Analysis of Financial Condition and Results of Operations/Overview of this report for a more complete discussion.

Organizational Changes

In April 2020, Stephen Yalof, a successful and proven retail real estate executive, joined the Company as President and Chief Operating Officer, as part of an executive succession plan for the role of Chief Executive Officer ("CEO").

Effective January 1, 2021, Steven B.

Tanger, the Company's CEO, transitioned to the position of Executive Chair of the Company's Board of Directors, effective through January 1, 2024, and Mr.

Yalof assumed the role of CEO of the Company.

Henry, previously Non-Executive Chair of the Board, was appointed to Lead Director of the Board .

In October 2020, Leslie Swanson joined the Company as Executive Vice President of Operations.

In this role, she will be responsible for overseeing the operations of Tanger's outlet portfolio, including planning and execution of operational strategies, driving center occupancy and developing new revenue opportunities.

In June 2021 and upon recommendation of the Board's Nominating and Corporate Governance Committee, the board of directors voted to expand the number of positions on the Company's board of directors from eight to nine and elected Sandeep Mathrani as a director to fill the vacancy for a term ending at the Company’s 2022 Annual Meeting of Shareholders.

Effective December 1, 2021, Leslie Swanson was named Executive Vice President – Chief Operating Officer.

She joined the Company in October 2020 as Executive Vice President of Operations, bringing over 25 years of experience in shopping center operations, management and marketing and a reputation as a proven team leader, revenue generator, and thought leader.

Financing Transactions

Lines of credit and Term Loan Covenant Modifications

In June 2020, we amended the debt agreements for our lines of credit and bank term loan, primarily to improve future covenant flexibility.

The amendments, among other things, allow us to access the existing surge leverage provision, which provides for an increase to the maximum thresholds to 65% from 60% for total leverage and unsecured leverage, for twelve months starting July 1, 2020, during which time share repurchases are prohibited.

Additionally, the leverage covenants are determined based on the calculation period which is modified to be based on the immediately preceding three calendar month period annualized for the calculation date occurring on December 31, 2020;

the immediately preceding six calendar month period annualized for the calculation date occurring on March 31, 2021;

the immediately preceding nine calendar month period annualized for the calculation date occurring on June 30, 2021;

and for all other calculation dates occurring during the term on the agreement, the immediately preceding twelve calendar month period.

In March 2020, we recorded a $45.7 million impairment charge in our consolidated statement of operations which equaled the excess of the carrying value of our Mashantucket (Foxwoods), Connecticut outlet center over its estimated fair value.

In December 2020, in anticipation of further store closings and declining operating results, we recorded an additional impairment charge of $19.2 million in our consolidated statement of operations which equaled the excess of the carrying value of our Foxwoods outlet center over its estimated fair value.

In December 2020, due to the pending sale in January 2021 of the Jeffersonville, Ohio outlet center we recorded an additional impairment charge of $2.4 million in our consolidated statement of operations which equaled the excess of the carrying value over its estimated fair value.

Equity Offerings

In February 2021, we implemented an at-the-market share offering program (“ATM Offering”), whereby we may offer and sell our common shares, $0.01 par value per share (“Common Shares”), having an aggregate gross sales price of up to $250.0 million.

During 2021, under this program, the Company sold 10.0 million shares at a weighted average price of $18.97 per share, generating net proceeds of $187.1 million and leaving a remaining authorization of $60.1 million.

The proceeds were used primarily to reduce indebtedness as described in the sections immediately below.

Unsecured term loan

In March 2021 and June 2021, we paid down a total of $50.0 million of borrowings under our $350.0 million unsecured term loan with cash on hand, reducing the outstanding balance to $300.0 million as of December 31, 2021.

Unsecured Lines of Credit Extension

In July 2021, we amended our unsecured lines of credit and extended the maturity date from October 2021 to July 2025, which may be extended by an additional year by exercising two six-month extension options.

The amendment eliminated the LIBOR floor, which was previously 0.25%, and entitles us to a one basis point annual reduction in the interest rate if we meet certain sustainability thresholds.

Other pricing terms remained the same.

The lines provide for borrowings of up to $520.0 million, including a $20.0 million liquidity line and a $500.0 million syndicated line.

A 0.25% facility fee is due annually on the entire committed amount of each facility.

In certain circumstances, total line capacity may be increased to $1.2 billion through an accordion feature in the syndicated line.

Redemption of the 2023 and 2024 Senior Notes and public offering of aggregate $400.0 Million Unsecured Senior Notes due 2031

In April 2021, we completed a partial redemption of $150.0 million aggregate principal amount of our $250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash, which included a make-whole premium of $13.0 million and the write-off of approximately $1.0 million of debt discount and debt origination costs.

The make-whole premium and the write-off of debt discount and debt origination costs was recorded as a loss on early extinguishment of debt within the consolidated statements of operations.

Subsequent to this redemption, $100.0 million aggregate principal amount of the notes remained outstanding, until the redemption in August 2021, described below.

In August 2021, we completed a public offering of $400.0 million in senior notes due 2031.

The notes were priced at 98.552% of the principal amount to yield 2.917% to maturity.

The notes pay interest semi-annually at a rate of 2.750% per annum and mature on September 1, 2031.

The aggregate net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $390.7 million.

We used the net proceeds from the sale of the notes to redeem all remaining 3.875% senior notes due 2023, $100.0 million in aggregate principal amount outstanding, and all 3.750% senior notes due 2024, $250.0 million in aggregate principal outstanding.

The redemptions occurred in September 2021 and included a make-whole premium of $31.9 million and the write-off of approximately $1.9 million of debt discount and debt origination costs.

The make-whole premium and the write-off of debt discount and debt origination costs was recorded as a loss on early extinguishment of debt within the consolidated statement of operations.

The remaining proceeds were used for general corporate purposes.

Southaven, MS mortgage

In October 2021, the joint venture that owns the Southaven, MS outlet center exercised its option to extend the maturity of the Southaven, MS mortgage to April 2023 and paid down the principal balance by $11.3 million to $40.1 million.

The interest rate remains LIBOR + 1.80%.

The outlet center is consolidated for financial reporting purposes and we funded the entire $11.3 million.

In December 2021, due to a decrease in the estimated hold period and declining operating results we recorded in our consolidated statement of operations a $7.0 million impairment charge, which equaled the excess of the carrying value of our Mashantucket (Foxwoods), Connecticut outlet center over its estimated fair value.

Property Sales

In August 2020, we sold a non-core outlet center in Terrell, Texas for net proceeds of $7.6 million, which resulted in a gain on sale of assets of $2.3 million.

The proceeds from the sale of this unencumbered asset were used to pay down balances outstanding under our unsecured lines of credit.

In January 2021, we sold a non-core outlet center in Jeffersonville, Ohio for net proceeds of $8.1 million.

In January 2021, we sold a non-core outlet center in Jeffersonville, Ohio for net proceeds of $8.1 million, which resulted in no gain or loss on sale of assets.

Unconsolidated Real Estate Joint Ventures Financing Transactions

RioCan Canada

In May 2020, the joint venture’s mortgage loan for the outlet center in Saint-Sauveur matured and the joint venture repaid the approximately $8.3 million owed in full.

Columbus, Ohio

In December 2020, the Columbus joint venture amended the mortgage loan to extend the maturity to November 2022, which required a reduction in principal balance from $85.0 million to $71.0 million.

The amendment increased the interest rate from LIBOR + 1.65% to LIBOR + 1.85% and the mortgage loan guarantee by each partner was increased from $6.4 million to $11.9 million.

In March 2021, the RioCan joint venture closed on the sale of its outlet center in Saint-Sauveur, for net proceeds of approximately $9.4 million.

Our share of the proceeds was approximately $4.7 million.

As a result of this transaction, we recorded a loss on the sale of $3.7 million.

This includes a $3.6 million charge related to the foreign currency effect of the sale recorded in other income (expense), which had been previously recorded in other comprehensive income.

Galveston/Houston, Texas

In February 2021, the Galveston/Houston joint venture amended the mortgage loan to extend the maturity to July 2023, which required a reduction in principal balance from $80.0 million to $64.5 million.

In February 2021, the Galveston/Houston joint venture amended its mortgage loan to extend the maturity to July 2023, which required a reduction in principal balance from $80.0 million to $64.5 million.

The amendment also changed the interest rate from LIBOR + 1.65% to LIBOR + 1.85%.

Each partner made capital contributions of $7.0 million to fund the reduction in principal balance.

The Outlet Concept

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Outlet centers enable retailers to optimize the size of production runs while continuing to maintain control of their distribution channels.

Outlet centers also enable manufacturers and brand name retailers to establish a direct relationship with their customers.

Outlet centers also enable manufacturers and brand name retailers to establish a direct relationship with their customers and maintain brand integrity through control of product placement and pricing.

We believe that outlet centers present an attractive opportunity for capital investment as many retailers view the outlet concept as a profitable distribution channel.

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Each of our outlet centers, except one joint venture property, carries the Tanger brand name.

We believe that our tenants and consumers recognize the Tanger brand as one that provides outlet shopping centers where consumers can trust the brand, quality and price of the merchandise they purchase directly from the manufacturers and brand name retailers.

As one of the original participants in this industry, we have established long-standing relationships with many of our tenants that we believe is critical in developing and operating successful outlet centers.

We believe that our tenants and consumers recognize the Tanger brand as one that provides outlet shopping centers where consumers can trust the brand, value and experience.

As one of the original participants in this industry, we have established long-standing relationships with many of our tenants that we believe are critical in developing and operating successful outlet centers.

Our consolidated outlet centers range in size from 104,009 to 739,148 square feet and are typically located at least 10 miles from major department stores and manufacturer-owned, full-price retail stores.

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Additionally, our centers are often situated in close proximity to interstate highways that provide accessibility and visibility to potential customers.

We have a diverse tenant base throughout our consolidated portfolio, comprised of approximately 400 manufacturers, brand name and discount apparel and home retailers such as American Eagle Outfitters, Banana Republic Factory Store, Calvin Klein, Coach, Gap Outlet, Hugo Boss Factory Store, Kate Spade New York, Lululemon Athletica, Nike Factory Store, North Face, Saks Fifth Avenue Off 5th, T.J.

We have a diverse tenant base throughout our consolidated portfolio, comprised of approximately 500 manufacturers, brand name and discount apparel and home retailers such as American Eagle Outfitters, Banana Republic Factory, Calvin Klein, Coach, Cole Haan Outlet, Gap Outlet, Kate Spade New York, Lululemon, Michael Kors, Nike Factory Store, Restoration Hardware, Saks Off 5th, The North Face, T.J.

Maxx, Tory Burch, Under Armour, Vineyard Vines, West Elm Outlet, Williams-Sonoma Outlet and many more.

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Rental revenues $ 407,766

(1) Primarily includes rents based on a percentage of tenant sales volume and reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.

(1) Primarily includes rents based on a percentage of tenant sales volume and reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes, which are paid on a pro rata basis.

Business History

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Our goal is to build shareholder value through a comprehensive, conservative plan for sustained, long-term growth.

We focus our efforts on increasing rents in our existing outlet centers, renovating and expanding selected outlet centers and reaching new markets through ground-up developments or acquisitions of existing outlet centers.

We focus our efforts on increasing net operating income at our existing outlet centers, renovating and expanding selected outlet centers and reaching new markets through ground-up developments or acquisitions of existing outlet centers.

We expect new development to continue to be important to the growth of our portfolio in the long-term.

However, the number of new development opportunities may be limited or completed at a slower pace than historically given the current disruption in the retail environment caused in part by Internet competition and numerous store closings as a result of bankruptcy filings or brand wide restructuring of certain retailers.

However, the number of new development opportunities may be limited or completed at a slower pace than our historical experience given the current disruption in the retail environment caused in part by Internet competition and numerous store closings as a result of bankruptcy filings or brand wide restructuring of certain retailers.

Future outlet centers may be wholly-owned by us or developed through joint venture arrangements.

Increasing rents at existing outlet centers

Increasing net operating income at existing outlet centers

Our leasing team focuses on the marketing of available space to maintain our standard for high occupancy levels.

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We have historically been able to renew many leases at higher base rents per square-foot and replace underperforming tenants with new or existing tenants in our portfolio.

Given the current retail environment as discussed above, we may choose to renew certain tenants or execute leases with new tenants at lower rental rates to maintain a high portfolio occupancy rate.

Given the current retail environment as discussed above, we may choose to execute leases with new tenants or renew certain tenants to enhance our tenant mix or maintain a high portfolio occupancy rate.

In addition, we are focused on generating non-store revenues (other revenues) and actively managing property operating expenses as a means of growing net operating income.

Developing new outlet centers

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Through targeted marketing and operational efficiencies, we strive to improve sales and profitability of our tenants and our outlet centers as a whole.

Achieving higher base and percentage rents and generating additional income from temporary leasing, vending and other sources also remains an important focus and goal.

Achieving higher base and percentage rents and generating additional income from temporary leasing, vending and other non-store sources also remains an important focus and goal.

Our long-standing retailer relationships and our focus on identifying emerging retailers allow us the ability to provide our shoppers with a collection of the world's most popular outlet stores.

Tanger customers shop and save on their favorite brand name merchandise including men's, women's and children's ready-to-wear, lifestyle apparel, footwear, jewelry and accessories, tableware, housewares, luggage and home goods.

In addition, we are focused on adding non-traditional uses to our tenant mix, including experiential and food and beverage tenants.

In order for our outlet centers to perform at a high level, our leasing professionals continually monitor and evaluate tenant mix, store size, store location and sales performance.

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Our plans are based on a basic measure of success - increase sales and traffic for our retail partners and we will create successful outlet centers.

Utilizing a strategic mix of print, radio, television, direct mail, our consumer website, Internet advertising, social networks, mobile applications and public relations, we consistently reinforce the Tanger brand.

Utilizing a strategic mix of traditional (print, radio, television, direct mail and public relations) and digital (our consumer website, Internet advertising, social networks, and mobile applications) channels, we consistently reinforce the Tanger brand.

Our marketing efforts are also designed to build loyalty with current Tanger shoppers and create awareness with potential customers.

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(1) maintain a conservative leverage position relative to our portfolio when pursuing new development, expansion and acquisition opportunities, (2) extend and sequence debt maturities, (3) manage our interest rate risk through a proper mix of fixed and variable rate debt, (4) maintain access to liquidity by using our lines of credit in a conservative manner and (5) preserve internally generated sources of capital by strategically divesting of our non-core assets and maintaining a conservative distribution payout ratio.

We manage our capital structure to reflect a long-term investment approach and utilize multiple sources of capital to meet our requirements.

We manage our capital structure to reflect a long-term investment approach and utilize multiple sources of capital to meet our requirements, including without limitation issuances of equity under our ATM program.

We intend to retain the ability to raise additional capital, including public debt or equity, to pursue attractive investment opportunities that may arise and to otherwise act in a manner that we believe to be in the best interests of our shareholders and unitholders.

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We believe our current balance sheet position is financially sound;

however, due to the uncertainty and unpredictability of the capital and credit markets, we can give no assurance that affordable access to capital will exist between now and when our next significant debt maturity, which is our unsecured lines of credit.

The unsecured lines of credit expire in 2021, with a one-year extension option that may extend the maturity to 2022.

As a result, our current primary focus is to continually strengthen our capital and liquidity position by controlling and reducing construction and overhead costs, generating positive cash flows from operations to cover our distributions and reducing outstanding debt.

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Traditional full-and off-price retailers and e-commerce retailers are often unable to provide such a variety and depth of name-brand products at attractive prices.

Because our revenues are ultimately linked to our tenants' success, we are affected by the same competitive factors, such as consumer spending habits and on-line shopping, as our tenants.

Because our revenues are ultimately linked to our tenants' success, we are affected by the same competitive factors, such as consumer spending habits and online shopping, as our tenants.

Tenants of outlet centers are generally adverse to direct competition with major brick and mortar retailers and their own specialty stores.

For this reason, our outlet centers generally compete only to a limited extent with traditional malls in or near metropolitan areas as our centers are typically located at least 10 miles from major department stores and manufacturer-owned, full-price retail stores.

In recent years, some of our tenants have been adversely impacted by changes in consumer spending habits and the convenience of on-line shopping.

In recent years, some of our tenants have been adversely impacted by changes in consumer spending habits and the convenience of online shopping.

We compete with institutional pension funds, private equity investors, other REITs, individual owners of outlet centers, specialty stores and others who are engaged in the acquisition, development or ownership of outlet centers and stores.

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Corporate and Regional Headquarters

We rent space in an office building in Greensboro, North Carolina where our corporate headquarters is located as well as a regional office in Miami, Florida.

We rent space in an office building in Greensboro, North Carolina where our corporate headquarters is located.

As of December 31, 2021, we maintain offices and employ on-site management at 33 consolidated and unconsolidated outlet centers.

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An uninsured loss could result in a loss to us of both our capital investment and anticipated profits from the affected property.

Our Core Values

Our Core Values are to consider community first, seek the success of others, act fairly and with integrity and make it happen.

Consider Community First - Our diverse communities are the heartbeat of our business.

Our decision-making must reflect the varied perspectives that contribute to making our Company a welcoming environment for all.

We work to embrace these differences which strengthen Our Tanger.

Our philanthropic and sustainable commitments exist to better all the communities we serve.

Seek the Success of Others - We are all in this together, and we believe true success can only be achieved when it is experienced by our shoppers, retailers, and team members alike.

We strive to create a culture of inclusion, where we can all be better – together.

Act Fairly and with Integrity - Our bond is strongest when we act with integrity and fairness in everything we do.

Tanger’s commitment to ethics lives throughout every level, interaction, and function of the organization, and is what we are known for.

Make it Happen - This is the Tanger state of mind, and it is deeply rooted in our heritage.

We are empowered to take smart risks, innovate and to use our voices to advocate for our ideas and for others within our communities.

Human Capital Resources

As of December 31, 2020, we had 262 full-time employees, located at our corporate headquarters in North Carolina, our regional office in Miami and 33 business offices.

As of December 31, 2021, we had 310 full-time employees, located at our corporate headquarters in North Carolina and 33 business offices.

At that date, we also employed 263 part-time employees at various locations.

We are committed to a diverse, collaborative, and entrepreneurial workplace.

As of December 31, 2020, female employees made up 72% of field employees and 45% of our Executive Leadership Team.

Ethnic minorities made up 22% of our workforce in 2020.

The Company's Board gender composition was 25% female, with 13% ethnic diversity.

Additionally, we performed an internal gender pay gap analysis in 2020, comparing positions with similar roles and responsibilities, that considered tenure, education, work experience and performance.

Also, in 2020 we formed a Diversity and Inclusion Council with representation from across the Company.

The Diversity, Equity and Inclusion Council will focus on making diversity, equity and inclusion a top-level focus in our Company and with our people, our places and our partners.

We are deeply committed to representing and reflecting the unique experiences, perspectives and viewpoints of our people, partners, and the communities we serve.

We strive to champion diversity, equity and inclusion for all.

This empowers us to reach our full potential, fueling innovation and connection with our employees and the customers and communities we serve.

Our success is highly dependent on part-time employees and the institutional knowledge that comes with high retention rates.

Our part-time workforce is 50% of our 527-person workforce.

At 28%, turnover is significantly below industry averages of 39%, according to the Bureau of Labor Statistics.

48% of our team members have been with us for five years or longer, and the average tenure for full time employees in 2020 was 9.3 years.

Our part-time workforce is 46% of our 573-person workforce and 28% of them have been with us for 5 years or longer.

In 2021, 51% of our full-time workforce has been with us for five years or longer.

Our company has a Diversity, Equity, and Inclusion Council with representation from across the Company.

The Diversity, Equity and Inclusion Council is deeply committed to creating and sustaining an organizational culture reflective of the collective mixture of unique experiences, perspectives, and viewpoints of our people, partners, and communities that contribute to making Tanger an environment where everyone is welcomed, respected, heard, supported, and able to thrive.

Embracing a diverse, equitable, and inclusive workplace is part of our Core Values, strengthening Our Tanger, supporting our efforts to better the communities we serve, and allowing us to be transformative in delivering compelling customer experiences.

One of our DEI Strategic Priorities is to Nurture a Diverse Tanger Community, including but not limited to driving equal access, opportunity, and advancement for customers, partners, stakeholders, board of directors, and all current and future team members, growing the diverse representation of our shoppers and communities within our workforce.

As of December 31, 2021, team members who identify as females made up 84% of field employees, 45% of our executive leadership team, and 77% of our total 573-person workforce.

Ethnic minorities made up 26% of our total workforce in 2021.

The Company's Board gender composition consisted of 22% members who identify as female and 22% of members with ethnic diversity.

We focus on developing strategies that enhance an environment where high performance, training and expression of our core competencies are rewarded and publicly recognized.

We provide numerous training programs which included topics related to, among other things, operational training, leadership development, customer service and technology training.

We provide numerous training programs which include topics related to, among other things, operational training, leadership development, customer service and technology training.

We recognize that motivation and rewards are different for individuals at various times in their careers, and a balanced blend of monetary and non-monetary rewards can generate valuable business results.

We provide employee benefits on par or above industry standards.

In addition, we support employees with 40 hours per year of paid volunteer time off to encourage volunteering for worthwhile activities in their local communities.

Part-time employees are included in our 401(k) plans, which offer immediate vesting and dollar-for-dollar matches for employee contributions up to 3%, and $0.50 for every dollar contributed on the next 2% deferred.

Part-time employees also participate in paid time off (PTO) after five years of service.

In addition, employees are allowed, and encouraged by us to spend, 40 hours per year of paid time off to volunteer for worthwhile activities in their local communities.

Part-time employees also participate in paid time off (PTO) after five years of service and are eligible to participate in our accident and critical Illness voluntary benefits.

Environment, Social and Governance ("ESG") Programs

We work to create long-term value for our shareholders, retail partners and employee team members while we support strong communities and work towards protecting the future of our planet.

We integrate ESG into our business practices and seek to address the issues most important to our stakeholders.

Our Core Values of Consider Community First, Seek the Success of Others, Act Fairly and with Integrity and Make it Happen form the foundation of our approach as we set goals to create positive social and economic impact while reducing our environmental footprint.

Reporting frameworks

Our goal is to utilize best practices in every aspect of our business, including our disclosures and ESG reporting.

We have utilized the standards of the Global Reporting Initiative (GRI) since 2016 and began integrating certain disclosures from the Sustainability Accounting Standards Board (SASB, now the Value Reporting Foundation) in 2019.

In 2020 and 2021, we disclosed to Global Real Estate Sustainability Benchmark (GRESB) and CDP (formerly, the Carbon Disclosure Project).

We are also currently assessing our climate-related governance and strategy to report in line with the Task Force on Climate-related Financial Disclosures (TCFD) and aim to become a signatory to the United Nations Global Compact (UNGC).

ESG governance

Our ESG Executive Committee leads the governance of ESG matters at our Company and is chaired by our General Counsel.

Consisting of executives from various functional areas of our Company, including, without limitation, Operations, Finance and People and Culture, the Executive Committee advises on the Company's approach to ESG.

The Executive Committee monitors progress toward achievement of goals and communicates priority ESG issues to senior leadership.

Our full Board of Directors provides oversight for the ESG function, and, as appropriate, certain matters are considered by a specific committee of the Board of Directors.

Material ESG issues – priorities and impacts

Our ESG materiality process drives strategy on environmental, social, economic and governance topics.

We begin by identifying opportunities and risks, and leverage external frameworks and engage stakeholders, executives and our Board members to help identify key ESG issues.

These key issues are translated into operational priorities and processes across our Company.

As a result of a robust materiality assessment conducted by a third party in 2021, we have identified the following priority material issues that are of greatest relevance to the Company and our stakeholders:

Diversity, Equity and Inclusion;

Energy Use and Efficiency;

Community Involvement;

Climate Change and Tenants' Environmental and Social Footprint.

For the avoidance of doubt, while certain matters discussed in our ESG Report, ESG Policies and other ESG-related disclosures may be significant, any significance should not be read as necessarily rising to the level of materiality as that concept is used for the purposes of our compliance and reporting pursuant to the U.S.

federal securities laws and regulations.

The concept of materiality used in our ESG disclosures, including as it is used above, is based on other definitions of materiality, some of which may require that we use a level of estimation and assumption that may make the resulting disclosures inherently uncertain.

This is the case even where we use the word “material” or “materiality” in our ESG disclosures.

Therefore, issues that we identify as “material” from an ESG perspective are not necessarily material to the Company under the U.S.

federal securities laws and regulations.

The contents of our ESG Report, ESG Policies and other ESG-related disclosures are not incorporated by reference into this Form 10-K, and do not form a part of this Form 10-K.

Government Regulations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business