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Item 2. Management’s Discussion and Analysis

2024-05-01 compared with 2023-11-07 · 252 added, 320 removed, 399 unchanged (59% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three and nine months ended September 30, 2023 with the three and nine months ended September 30, 2022.

The results of operations discussion is combined for Tanger Factory Outlet Centers, Inc.

The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three months ended March 31, 2024 with the three months ended March 31, 2023.

The results of operations discussion is combined for Tanger Inc.

and Tanger Properties Limited Partnership because the results are virtually the same for both entities.

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Historical results and percentage relationships set forth in the unaudited, consolidated statements of operations, including trends which might appear, are not necessarily indicative of future operations.

Unless the context indicates otherwise, the term “Company” refers to Tanger Factory Outlet Centers, Inc.

Unless the context indicates otherwise, the term “Company” refers to Tanger Inc.

and subsidiaries and the term “Operating Partnership” refers to Tanger Properties Limited Partnership and subsidiaries.

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Cautionary Statements

Certain statements made in this Management's Discussion and Analysis of Financial Condition and Results of Operations below are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and included this statement for purposes of complying with these safe harbor provisions.

Certain statements made in this Quarterly Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and included this statement for purposes of complying with these safe harbor provisions.

Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies, beliefs and expectations, are generally identifiable by use of the words “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or similar expressions.

Such forward-looking statements include, but are not limited to, statements regarding:

the expected impact of rising inflation, supply chain and labor issues and rising interest rates on our business, financial results and financial condition;

Such forward-looking statements include, but are not limited to, risks related to pandemics, supply chain and labor issues and rising interest rates on our business, financial results and financial condition;

our ability to raise additional capital, including via future issuances of equity and debt, and the use of proceeds from such issuances;

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future dividend payments;

the possibility of future asset impairments;

potential developments, expansions, renovations, acquisitions or dispositions of outlet centers;

anticipated impacts from our newly-opened Nashville outlet center;

compliance with debt covenants;

interest rates, the possibility of future asset impairments, development initiatives and strategic partnerships, the anticipated impact of the Company’s newly acquired assets in Huntsville and Asheville, as well as its newly opened Nashville development, compliance with debt covenants;

renewal and re-lease of leased space;

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and real estate joint ventures.

You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements.

Other important factors which may cause actual results to differ materially from current expectations include, but are not limited to:

our inability to develop new outlet centers or expand existing outlet centers successfully;

risks related to the economic performance and market value of our outlet centers, including due to changes in the national, regional and local economic climate, inflation and rising interest rates;

You should exercise caution in relying on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements.

Other important factors that may cause actual results to differ materially from current expectations include, but are not limited to:

our inability to develop new retail centers or expand existing retail centers successfully;

risks related to the economic performance and market value of our retail centers;

the relative illiquidity of real property investments;

impairment charges affecting our properties;

our dispositions of assets may not achieve anticipated results;

competition for the acquisition and development of outlet centers, and our inability to complete outlet centers we have identified;

our acquisitions or dispositions of assets may not achieve anticipated results;

competition for the acquisition and development of retail centers, and our inability to complete the acquisitions of retail centers we may identify;

competition for tenants with competing retail centers;

the diversification of our tenant mix and our entry into the operation of full price retail may not achieve our expected results;

environmental regulations affecting our business;

risk associated with a possible terrorist activity or other acts or threats of violence, public health crises and threats to public safety;

risks associated with supply chain disruptions and labor shortages;

risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety;

risks related to the impact of macroeconomic conditions, including rising interest rates and inflation, on our tenants and on our business, financial condition, liquidity, results of operations and compliance with debt covenants;

our dependence on rental income from real property;

our dependence on the results of operations of our retailers;

the fact certain of our lease agreements include co-tenancy and/or sales-based provisions that may allow a tenant to pay reduced rent and/or terminate a lease prior to its natural expiration;

the fact that certain of our leases include co-tenancy and/or sales-based provisions that may allow a tenant to pay reduced rent and/or terminate a lease prior to its natural expiration;

our dependence on the results of operations of our retailers and their bankruptcy, early termination or closing could adversely affect us;

the impact of geopolitical conflicts;

the immediate and long-term impact of the outbreak of a highly infectious or contagious disease on our tenants and on our business (including the impact of actions taken to contain the outbreak or mitigate its impact);

the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours;

risks related to climate change;

increased costs and reputational harm associated with the increased focus on environmental, sustainability and social initiatives;

risks related to uninsured losses;

risks related to changes in consumer spending habits;

investor and regulatory focus on environmental, sustainability and social initiatives;

the risk that consumer, travel, shopping and spending habits may change;

risks associated with our Canadian investments;

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risks associated with debt financing;

risk associated with our guarantees of debt for, or other support we may provide to, joint venture properties;

risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties;

the effectiveness of our interest rate hedging arrangements;

risk associated with our interest rate hedging arrangements;

our potential failure to qualify as a REIT;

our legal obligation to make distributions to our shareholders;

legislative or regulatory actions that could adversely affect our shareholders;

our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends;

the risk of a cyber-attack or an act of cyber-terrorism;

our legal obligation to pay dividends to our shareholders;

legislative or regulatory actions that could adversely affect our shareholders, our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends;

the risk of a cyber-attack or an act of cyber-terrorism on our systems;

the uncertainties of costs to comply with regulatory changes (including potential costs to comply with proposed rules of the SEC to standardize climate-related disclosures);

and other important factors which may cause actual results to differ materially from current expectations include, but are not limited to, those set forth under Item 1A - “Risk Factors” in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.

We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements in this Quarterly Report are only predictions.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events.

The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

The following discussion should be read in conjunction with the consolidated financial statements appearing elsewhere in this report.

Historical results and percentage relationships set forth in the consolidated statements of operations, including trends which might appear, are not necessarily indicative of future operations.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management regarding our financial condition and results of operations, liquidity and certain other factors that may affect our future results.

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General Overview

As of September 30, 2023, we had 29 consolidated outlet centers in 18 states totaling 11.3 million square feet, two managed centers and one center under construction, which subsequently opened in October 2023.

We also had 6 unconsolidated outlet centers totaling 2.1 million square feet, including 2 outlet centers in Canada.

The table below details our new developments, expansions and dispositions of consolidated and unconsolidated outlet centers that significantly impacted our results of operations and liquidity from January 1, 2022 to September 30, 2023 (square feet in thousands):

Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers Managed Centers

Outlet Center Quarter Opened/Disposed Square Feet Number of Outlet Centers Square Feet Number of Outlet Centers Square Feet Number of Outlet Centers

As of March 31, 2024, we owned and operated 31 consolidated outlet centers and one open-air lifestyle center, with a total gross leasable area of approximately 12.7 million square feet.

We also had partial ownership interests in 6 unconsolidated centers totaling approximately 2.1 million square feet, including 2 centers in Canada.

Our portfolio also includes two managed centers totaling approximately 760,000 square feet.

The table below details our acquisitions, new developments, expansions and dispositions of consolidated and unconsolidated centers that significantly impacted our results of operations and liquidity from January 1, 2023 to March 31, 2024 (square feet in thousands):

Consolidated Centers Unconsolidated Joint Venture Centers Managed Centers

Center Quarter Acquired/Developed/Disposed Square Feet Number of Centers Square Feet Number of Centers Square Feet Number of Centers

As of January 1, 2023 11,353 29 2,113 6 457 1

Palm Beach, Florida Third Quarter — — — — 301 1

Dispositions:

Blowing Rock, North Carolina Fourth Quarter (104) (1)

Nashville, Tennessee Fourth Quarter 291 1 — — — —

Asheville, North Carolina Fourth Quarter 382 1 — — — —

Huntsville, Alabama Fourth Quarter 651 1 — — — —

Other — — — — — —

As of December 31, 2023 12,690 32 2,113 6 758 2

Palm Beach, Florida Third Quarter 300 1

Other 2 — — — — —

As of September 30, 2023

As of March 31, 2024

12,692 32 2,113 6 758 2

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of September 30, 2023.

Except as noted, all properties are fee owned.

Consolidated Outlet Centers Legal Square %

Location Ownership % Feet Occupied

Deer Park, New York 100 739,148 100.0

Riverhead, New York (1)

The following table summarizes certain information for our existing consolidated centers in which we have an ownership interest as of March 31, 2024.

Except as noted, all properties are owned in fee simple.

Consolidated Centers Legal Square %

Property Name Location Ownership % Feet (4)

Tanger Outlets Deer Park

Deer Park, NY

100 739,148 99.7

Foley, Alabama 100 554,736 97.0

Rehoboth Beach, Delaware (1)

Tanger Outlets Riverhead

Riverhead, NY (1)

100 729,280 93.3

Atlantic City, New Jersey (1) (3)

Bridge Street Town Centre, a Tanger Property

Huntsville, AL

100 650,942 88.2

San Marcos, Texas 100 471,816 99.8

Sevierville, Tennessee (1)

Tanger Outlets Foley

100 554,736 93.4

Savannah, Georgia 100 429,089 100.0

Myrtle Beach Hwy 501, South Carolina 100 426,523 99.4

Glendale, Arizona (Westgate) 100 410,753 99.0

Myrtle Beach Hwy 17, South Carolina (1)

Tanger Outlets Rehoboth Beach

Rehoboth Beach, DE (1)

100 547,937 99.4

Charleston, South Carolina 100 386,328 99.3

Lancaster, Pennsylvania 100 376,203 100.0

Pittsburgh, Pennsylvania 100 373,863 99.1

Commerce, Georgia 100 371,408 100.0

Grand Rapids, Michigan 100 357,133 98.8

Fort Worth, Texas 100 351,834 100.0

Daytona Beach, Florida 100 351,691 100.0

Branson, Missouri 100 329,861 100.0

Southaven, Mississippi (2) (3)

Tanger Outlets Atlantic City

Atlantic City, NJ (1) (3)

100 484,748 90.6

Locust Grove, Georgia 100 321,082 99.2

Gonzales, Louisiana 100 321,066 99.1

Mebane, North Carolina 100 319,762 100.0

Howell, Michigan 100 314,438 84.6

Mashantucket, Connecticut (Foxwoods) (1)

Tanger Outlets San Marcos

San Marcos, TX

100 471,816 100.0

Tilton, New Hampshire 100 250,558 95.6

Hershey, Pennsylvania 100 249,696 100.0

Hilton Head II, South Carolina 100 207,422 100.0

Hilton Head I, South Carolina 100 181,687 100.0

Tanger Outlets Sevierville

Sevierville, TN (1)

100 449,968 97.5

Tanger Outlets Savannah

100 449,583 100.0

Tanger Outlets Myrtle Beach Hwy 501

Myrtle Beach, SC

100 426,523 96.7

Tanger Outlets Phoenix

100 410,753 98.1

Tanger Outlets Myrtle Beach Hwy 17

Myrtle Beach, SC (1)

100 404,710 97.8

Tanger Outlets Charleston

Charleston, SC

100 386,328 98.3

Tanger Outlets Asheville

Asheville, NC

100 381,600 94.0

Tanger Outlets Lancaster

Lancaster, PA

100 376,203 100.0

Tanger Outlets Pittsburgh

Pittsburgh, PA

100 373,863 100.0

Tanger Outlets Commerce

100 371,408 97.2

Tanger Outlets Grand Rapids

Grand Rapids, MI

100 357,133 96.3

Tanger Outlets Fort Worth

Fort Worth, TX

100 351,834 100.0

Tanger Outlets Daytona Beach

Daytona Beach, FL

100 351,691 100.0

Tanger Outlets Branson

100 329,861 99.1

Tanger Outlets Memphis

Southaven, MS (2) (3)

50 324,801 100.0

Tanger Outlets Atlanta

Locust Grove, GA

100 321,082 98.1

Tanger Outlets Gonzales

100 321,066 99.1

Tanger Outlets Mebane

100 319,762 97.6

Tanger Outlets Howell

100 314,438 83.9

Tanger Outlets Foxwoods

Mashantucket, CT (1)

100 311,229 88.8

Tanger Outlets Nashville

Nashville, TN

100 290,651 95.3

Tanger Outlets Tilton

100 250,558 93.7

Tanger Outlets Hershey

100 249,696 100.0

Tanger Outlets Hilton Head II

Hilton Head, SC

100 206,564 97.2

Tanger Outlets Hilton Head I

Hilton Head, SC

100 181,687 98.6

Totals 12,691,599 96.5 (5)

(1) These properties or a portion thereof are subject to a ground lease.

(2) Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture’s cash flow to be greater than our legal ownership percentage.

(2) Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in this venture’s cash flow to exceed our legal ownership percentage.

We currently receive substantially all the economic interest of the property.

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See Notes 4 and 5 to the consolidated financial statements for further details of our debt obligations.

(4) Excludes square footage and occupancy associated with ground leases to tenants.

(5) Total excludes the Nashville, TN center which opened in October 2023 and has yet to stabilize.

Unconsolidated joint venture properties Legal Square %

Location Ownership % Feet Occupied

Location Ownership % Feet (4)

Charlotte, North Carolina (1)

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Total 2,112,570 97

(1) Property encumbered by mortgage.

(1) Property encumbered by a mortgage.

See Note 3 to the consolidated financial statements for further details of the joint venture debt obligations.

Location Square Feet

Managed Properties

Palm Beach, Florida 758,156

Leasing Activity

The following table provides information for our consolidated outlet centers related to leases for new stores that opened or renewals that were executed during the respective trailing twelve month periods ended September 30, 2023 and 2022:

The following table provides information for our consolidated centers related to leases for new stores that opened or renewals that were executed during the respective trailing twelve-month periods ended March 31, 2024 and 2023:

Comparable Space for Executed Leases (1) (2)

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RESULTS OF OPERATIONS

Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022

Net income increased $4.5 million in the 2023 period to $28.9 million as compared to net income of $24.3 million for the 2022 period.

Comparison of the three months ended March 31, 2024 to the three months ended March 31, 2023

Net income decreased $1.6 million in the 2024 period to $23.3 million as compared to net income of $24.9 million for the 2023 period.

Significant items impacting the comparability of the two periods include the following:

• a higher average portfolio occupancy rate in the current period,

• positive leasing spreads upon renewal and re-tenanting since the previous period, and

• higher interest income

partially offset by

• higher general and administrative expenses

In the tables below, information set forth for properties disposed includes the Blowing Rock outlet center sold in December 2022.

• higher depreciation and amortization from the opening of our center in Nashville, TN and the acquisition of centers in Huntsville, AL and Asheville, NC during the fourth quarter of 2024

• higher general and administrative expenses primarily due to executive departure adjustments, and

• lower investment income during 2024 due to much lower cash balances compared to the 2023 period.

These amounts were partially offset by the incremental net operating income from the fourth quarter opening and acquisitions in 2023.

In the tables below, information set forth for new developments and acquired properties includes our center in Nashville, TN that o pened in October of 2023 and our centers in Asheville, NC and Huntsville, AL that were acquired in November of 2023.

RENTAL REVENUES

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Rental revenues from existing properties $ 107,434 $ 104,245 $ 3,189

Revenues from new developments and acquired properties 10,634 — 10,634

Rental revenues from properties disposed (8) (125) 117

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$ 117,809 $ 103,582 $ 14,227

Rental revenues at existing properties was positively impacted by higher occupancy between the peri ods, 97.9% c ompared to 96.4% and positive leasing spreads upon renewal and re-tenanting since the previous period.

Rental revenues at existing properties were positively impacted by higher average occupancy betwee n the periods and higher rents on new and existing tenants during 2024.

These increases were partially offset by lower variable revenues, which are derived from tenant sales.

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$ 2,278 $ 1,914 $ 365

Management and leasing fee income increased due to our addition of property management responsibilities during the third quarter of 2022 for a center in West Palm Beach, Florida.

OTHER REVENUES

Other revenues increased $393,000 in the 2023 period as compared to the 2022 period.

The following table sets forth the changes in various components of other revenues (in thousands):

2023 2022 Increase/(Decrease)

Other revenues from existing properties $ 4,373 $ 3,932 $ 441

Other revenues from properties disposed — 48 (48)

$ 4,373 $ 3,980 $ 393

Other revenues from existing properties increased in the 2023 period due to an increase in other revenue streams, such as EV charging, paid media, sponsorships and onsite signage, on a local and national level.

PROPERTY OPERATING EXPENSES

Property operating expenses increased $682,000 in the 2023 period compared to the 2022 period.

The following table sets forth the changes in various components of property operating expenses (in thousands):

2023 2022 Increase/(Decrease)

Property operating expenses from existing properties $ 35,342 $ 34,407 $ 935

Property operating expenses from sold properties — 213 (213)

Expenses related to unconsolidated joint ventures 1,197 1,174 23

Other property operating expenses 219 282 (63)

$ 36,758 $ 36,076 $ 682

Property operating expenses from existing properties increased in the 2023 period primarily due to timing of advertising costs compared to the prior period, higher common area maintenance expenses in the 2023 period compared to the 2022 period and higher property tax costs at certain centers.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $1.6 million in the 2023 period compared to the 2022 period.

The increase in expenses is primarily from the hiring of key employees since the 2022 period to drive operational and growth initiatives.

In addition we experienced higher health care benefit costs and executive placement fees during the 2023 period.

OTHER INCOME (EXPENSE)

Other income (expense) increased approximately $504,000 in the 2023 period.

The 2023 period had higher investment income from short-term investments of cash at higher interest rates than were available in the 2022 period.

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsoli dated joint ventures increased approximately $334,000 in the 2023 period compared to the 2022 period.

The increase is primarily related to one joint venture that experienced an increase in leasing revenue.

Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022

Net income increased $12.4 million in the 2023 period to $79.0 million as compared to net income of $66.6 million for the 2022 period.

Significant items impacting the comparability of the two periods include the following:

• a higher average portfolio occupancy rate in the current period,

• positive leasing spreads upon renewal and re-tenanting since the previous period

• higher management, leasing and other services income from the addition of management responsibilities for a center during the third quarter of 2022,

• lower common area maintenance snow removal costs in the current period as a result of a comparatively mild 2023 winter, and

• higher investment income from investments of cash available at significantly higher rates.

partially offset by

• higher general and administrative expenses, and

• the current period did not contain lease termination fees and the prior year period included significant termination rents from several tenants.

In the tables below, information set forth for properties disposed includes the Blowing Rock outlet center sold in December 2022.

RENTAL REVENUES

Rental revenues increased $7.4 million in the 2023 period compared to the 2022 period.

The following table sets forth the changes in various components of rental revenues (in thousands):

2023 2022 Increase/(Decrease)

Rental revenues from existing properties $ 320,281 $ 308,577 $ 11,704

Rental revenues from properties disposed — 1,562 (1,562)

Straight-line rent adjustments (1,409) (1,190) (219)

Lease termination fees 400 2,859 (2,459)

Amortization of above and below market rent adjustments, net (267) (221) (46)

$ 319,005 $ 311,587 $ 7,418

Rental revenues at existing properties were positively impacted by higher occupancy between the perio ds, 97.9% compared to 96.4% and positive leasing spreads upon renewal and re-tenanting since the previous period.

These increases were partially offset by lower variable revenues, which are derived from tenant sales.

Lease termination fees decreased primarily because the 2022 period included isolated terminations of certain leases with multiple years of remaining term.

MANAGEMENT, LEASING AND OTHER SERVICES

Management, leasing and other services increased $1.3 million in the 2023 period compared to the 2022 period.

The following table sets forth the changes in various components of management, leasing and other services (in thousands):

2023 2022 Increase/(Decrease)

Management and marketing $ 2,351 $ 1,749 $ 602

Leasing and other fees 441 96 345

Expense reimbursements from unconsolidated joint ventures 3,382 3,015 367

$ 6,174 $ 4,860 $ 1,314

Management and leasing fee income increased due to our addition of property management responsibilities during the third quarter of 2022 for a center in West Palm Beach, Florida.

Management and leasing fee income increased in the 2024 period due to our addition of property management responsibilities for centers in West Palm Beach, Florida.

OTHER REVENUES

Other revenues increased $2.0 million in the 2023 period as compared to the 2022 period.

Other revenues decreased $163,000 in the 2024 period as compared to the 2023 period.

The following table sets forth the changes in various components of other revenues (in thousands):

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Other revenues from existing properties $ 2,857 $ 3,447 $ (590)

Other revenues from properties disposed — 94 (94)

Other revenues from new developments and acquired properties 427 — 427

$ 3,284 $ 3,447 $ (163)

Other revenues from existing properties decreased in the 2024 period due to the timing of certain marketing events.

PROPERTY OPERATING EXPENSES

Property operating expenses decreased $1.9 million in the 2023 period compared to the 2022 period.

Property operating expenses increased $2.3 million in the 2024 period compared to the 2023 period.

The following table sets forth the changes in various components of property operating expenses (in thousands):

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Property operating expenses from existing properties $ 29,794 $ 31,467 $ (1,673)

Property operating expenses from sold properties — 694 (694)

Properties operating expenses from new developments and acquired properties 3,802 — 3,802

Expenses related to unconsolidated joint ventures 1,119 1,076 43

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$ 35,465 $ 33,148 $ 2,317

Property operating expenses from existing properties decreased in the 2023 period primarily due to the mild winter in the 2023 period compared to the 2022 period, resulting in lower snow removal costs.

Property operating expenses from existing properties decreased in the 2024 period in part due to certain expense refunds and the timing of certain operating expenses versus the comparative period.

This decrease was partially offset by an increase in snow removal costs on a comparative period basis.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $2.1 million in the 2024 period compared to the 2023 period.

The 2023 period included an $806,000 reversal of previously expensed compensation related to a voluntary executive departure and the 2022 period included $2.4 million of compensation costs related to executive severance.

Excluding the impact of executive departures, expenses increased from the hiring of key employees since the 2022 period to drive operational and growth initiatives.

We recorded executive separation amounts totaling $1.6 million and ($806,000) in the 2024 period and the 2023 period, respectively.

Exclusive of those adjustments, general and administrative expenses decreased due to reductions in professional fees related to consulting and legal fees.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization costs decreased $1.3 million in the 2023 period compared to the 2022 period.

Depreciation and amortization costs increased $8.0 million in the 2024 period compared to the 2023 period.

2024 2023 Increase/(Decrease)

Depreciation and amortization expenses from existing properties $ 76,656 $ 77,228 $ (572)

Depreciation and amortization from property disposed — 680 (680)

Depreciation and amortization from existing properties $ 25,220 $ 25,893 $ (673)

Depreciation and amortization from new developments and acquired properties 8,640 — 8,640

$ 33,860 $ 25,893 $ 7,967

INTEREST EXPENSE

Interest expense increased $1.1 million in the 2023 period compared to the 2022 period due to the combination of higher interest rates and higher amounts of variable rate debt.

During the fourth quarter of 2022 we refinanced the variable rate mortgage in our Memphis consolidated joint venture, increasing the outstanding balance to $51.7 million from $40.1 million.

In addition, also during the fourth quarter of 2022, we amended and restated our unsecured term loan and increased the outstanding balance from $300.0 million to $325.0 million.

These factors were partially offset by higher capitalized interest on our Nashville, TN development project.

Interest expense increased $2.0 million in the 2024 period compared to the 2023 period primarily due to the $325.0 million of Daily SOFR interest rate swaps which we entered into throughout 2023 becoming effective on February 1, 2024 at average fixed pay rate of 3.90%.

These swaps replaced $300.0 million of existing swaps that expired on February 1, 2024 which had an average fixed pay rate of 0.40%.

In addition, we had outstanding balances on our lines of credit in the 2024 period and none in the 2023 period.

OTHER INCOME (EXPENSE)

Other income (expense) increased approximately $2.9 million in the 2023 period, primarily due to higher investment income from short-term investments of cash at higher interest rates partially offset by a $2.4 million gain on sale of a non-real estate asset in the 2022 period.

Other income (expense) decreased approximately $2.2 million in the 2024 period.

The 2023 period had higher investment income due to higher cash balances than were available in the 2024 period.

The majority of the cash balances were utilized during the fourth quarter of 2023 for the acquisitions of the Asheville, NC and Huntsville, AL centers.

In addition, cash was utilized throughout 2023 to complete the construction of our Nashville, TN center which opened in October 2023.

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsolidated joint ventures decreased approximately $765,000 in the 2023 period compared to the 2022 period.

The decrease is primarily due to the increase in interest rates during the second half of 2022 and continuing into 2023 that has negatively impacted two of our joint ventures.

The Columbus joint venture variable interest rate mortgage was refinanced in September 2022 and now has a fixed interest rate of 6.25%.

The Galveston/Houston joint venture was floating rate during the majority of both periods.

Interest rates rose approximately 4% during the comparable periods.

The Galveston mortgage was refinanced during June 2023 and is now SOFR +3.00%.

In conjunction with the refinance, the joint venture entered into a $29.0 million interest rate swap that fixes Daily SOFR at 4.44% until December 2025.

Equity in earnings of unconsolidated joint ventures increased approximately $581,000 in the 2024 period compared to the 2023 period.

The increase is primarily related to improved performance year over year at one of our joint ventures.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

In this “Liquidity and Capital Resources of the Company” section, the term “the Company” refers only to Tanger Factory Outlet Centers, Inc.

In this “Liquidity and Capital Resources of the Company” section, the term “the Company” refers only to Tanger Inc.

on an unconsolidated basis, excluding the Operating Partnership.

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The Company receives proceeds from equity issuances from time to time, but is required by the Operating Partnership’s partnership agreement to contribute the proceeds from its equity issuances to the Operating Partnership in exchange for partnership units of the Operating Partnership.

We are a well-known seasoned issuer (as defined in the Securities Act) with a shelf registration that expires in February 2024 that allows the Company to register unspecified, various classes of equity securities and the Operating Partnership to register unspecified, various classes of debt securities.

We are a well-known seasoned issuer (as defined in the Securities Act) with a shelf registration that expires in December 2026 that allows the Company to register unspecified, various classes of equity securities and the Operating Partnership to register unspecified, various classes of debt securities.

We expect to file a new joint shelf registration statement on Form S-3 prior to the expiration of the current registration statement.

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Risks are detailed in “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023.

We operate in a manner intended to enable us to qualify as a REIT under the Internal Revenue Code, or the Code.

We operate in a manner intended to enable us to qualify as a REIT under the Internal Revenue Code of 1986, or the Code.

For the Company to maintain its qualification as a REIT, it must pay dividends to its shareholders aggregating annually at least 90% of its taxable income.

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Because the Company consolidates the Operating Partnership, the section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of the Company on a consolidated basis and how the Company is operated as a whole.

Under our at-the-market share offering (“ATM Offering”) program, which commenced in February 2021, 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 (the “Shares”).

We may sell the Shares in amounts and at times to be determined by us but we have no obligation to sell any of the Shares.

Under our ATM Offering, which commenced in February 2021, and was replaced with a new program in December 2023, we may offer and sell our common shares, having an aggregate gross sales price of up to $250.0 million.

We may sell the common shares in amounts and at times to be determined by us but we have no obligation to sell any of the common shares.

Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the common shares, capital needs and determinations by us of the appropriate sources of its funding.

We currently intend to use the net proceeds from any sale of shares pursuant to the ATM Offering for working capital and general corporate purposes.

As of September 30, 2023, we had approximately $57.4 million remaining available for sale under the ATM Offering program.

We recorded $2.7 million of proceeds from shares issued during the first nine months of 2023 and none for the full year 2022.

The following table sets forth information regarding settlements under our ATM Offering program:

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Number of common shares settled during the period 106,615 — 106,615 —

Average price per share $ 24.89 $ — $ 24.89 $ —

Aggregate gross proceeds (in thousands) $ 2,654 $ — $ 2,654 $ —

Aggregate net proceeds after commissions and fees (in thousands) $ 2,621 $ — $ 2,621 $ —

Share Repurchase Program

In May 2023, the Company’s Board of Directors authorized the repurchase of up to $100.0 million of the Company’s outstanding shares through May 31, 2025.

This authorization replaced a previous repurchase authorization for approximately $80 million that was set to expire in May 2023.

Repurchases may be made from time to time through open market, privately-negotiated, structured or derivative transactions (including accelerated share repurchase transactions), or other methods of acquiring shares.

We currently intend to use the net proceeds from any sale of common shares pursuant to the ATM Offering for working capital and general corporate purposes.

As of March 31, 2024, we had approximately $220.1 million remaining available for sale under our ATM Offering program.

In May 2023, the Board authorized the repurchase of up to $100.0 million of the Company’s outstanding shares through May 31, 2025.

The Company intends to structure open market purchases to occur within pricing and volume requirements of Rule 10b-18.

The Company may, from time to time, enter into Rule 10b5-1 plans to facilitate the repurchase of its shares under this authorization.

The Company did not repurchase any shares for the three months ended September 30, 2023 or 2022.

The remaining amount authorized to be repurchased under the program as of September 30, 2023 was approximately $100 million.

In January 2023, the Company's Board of Directors declared a $0.22 cash dividend per common share payable on February 15, 2023 to each shareholder of record on January 31, 2023, and in its capacity as General Partner of the Operating Partnership, a $0.22 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

In April 2023, the Company's Board of Directors declared a $0.245 cash dividend per common share payable on May 15, 2023 to each shareholder of record on April 28, 2023, and in its capacity as General Partner of the Operating Partnership a $0.245 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

In July 2023, the Company’s Board of Directo rs declared a $0.245 cash dividend per common share payable on August 15, 2023 to each shareholder on record on July 31, 2023, and in its capacity as General Partner of the Operating Partnership a $0.245 cash distribution per Operating P artnership unit to the Operating Partnership’s unitholders.

In October 2023, the Company’s Board of Directors declared a $0.26 cash dividend per common share payable on November 15, 2023 to each shareholder on record on October 31, 2023, and in its capacity as General Partner of the Operating Partnership a $0.26 cash distribution per Operating Partnership unit to the Operating Partnership’s unitholders.

The Company may, from time to time, enter into Rule 10b5-1 plans to facilitate the repurchase of its common shares under this authorization.

The Company did not repurchase any shares for the three months ended March 31, 2024 or 2023.

The remaining amount of common shares authorized to be repurchased under the program as of March 31, 2024 was approximately $100 million.

In January 2024, the Board declared a $0.26 cash dividend per common share payable on February 15, 2024 to each shareholder of record on January 31, 2023, and in its capacity as General Partner of the Operating Partnership, authorized a $0.26 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

In April 2024, the Board declared a $0.275 cash dividend per common share payable on May 15, 2024 to each shareholder of record on April 30, 2024, and in its capacity as General Partner of the Operating Partnership, authorized a $0.275 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

LIQUIDITY AND CAPITAL RESOURCES OF THE OPERATING PARTNERSHIP

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General Overview

Property rental income represents our primary source to pay property operating expenses, debt service, capital expenditures and distributions, excluding non-recurring capital expenditures and acquisitions.

To the extent that our cash flow from operating activities is insufficient to cover such non-recurring capital expenditures and acquisitions, we finance such activities from cash on hand, borrowings under our unsecured lines of credit, to the extent available, or from the proceeds from the Operating Partnership’s debt offerings and the Company’s equity offerings.

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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, cash on hand, retained cash flow from operations and debt and equity issuances.

Our ability to access capital on favorable terms could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, macroeconomic conditions, including rising interest rates and inflation, geopolitical conflict and other risks detailed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Our ability to access capital on favorable terms could be affected by various risks and uncertainties, including, but not limited to, macroeconomic conditions, including rising interest rates and inflation, geopolitical conflict and other risks detailed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023.

Capital Expenditures

The following table details our capital expenditures for consolidated outlet centers for the nine months ended September 30, 2023 and 2022 (in thousands):

Nine months ended September 30,

The following table details our capital expenditures for consolidated centers for the three months ended March 31, 2024 and 2023 (in thousands):

Three months ended March 31,

2024 2023 Change

Capital expenditures analysis:

New outlet center developments and expansions (1)

New developments and expansions (1)

$ 9,755 $ 27,483 $ (17,728)

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Additions to rental property-cash basis $ 24,816 $ 25,940 $ (1,124)

(1) The increase in new outlet center developments and expansions is primarily due to development costs at our site in Nashville, TN and other projects.

(2) Other capital expenditures in 2023 increased over the 2022 period due to a higher number of major capital expenditure projects within our existing portfolio.

New Development of Consolidated Outlet Centers

In October 2023, we opened our Nashville, Tennessee center of approximately 291,000 square feet with 96.5% occupancy.

Potential Future Developments, Acquisitions and Dispositions

As of the date of this filing, we are not in the pre-development period for any other new developments.

We may use joint venture arrangements to develop potential sites.

We expect to maintain sufficient liquidity to fund existing capital expenditures.

In the case of projects to be wholly-owned by us, we expect to fund these projects with cash on hand, borrowings under our unsecured lines of credit and cash flows from operations, but may also fund them with capital from additional public debt and equity offerings.

For projects to be developed through joint venture arrangements, we may use collateralized construction loans to fund a portion of the project, with our share of the equity requirements funded from sources described above.

(1) The decrease in new center developments and expansions is primarily due to development costs at our site in Nashville, TN and other projects in the prior year.

(2) Other capital expenditures in 2024 decreased over the 2023 period due to a lower number of major capital expenditure projects within our existing portfolio.

Potential Future Developments and Acquisitions

We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet and retail real estate assets.

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Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated.

As of the date of this filing, we are not in the pre-development period for any other new developments.

We may use joint venture arrangements to develop potential sites.

Unconsolidated Real Estate Joint Ventures

From time to time, we form joint venture arrangements to develop outlet centers.

As of September 30, 2023 we have partial ownership interests in six unconsolidated outlet centers totaling approximately 2.1 million square feet, including two outlet centers in Canada.

From time to time, we form joint venture arrangements to develop centers.

As of March 31, 2024 we have partial ownership interests in six unconsolidated centers totaling approximately 2.1 million square feet, including two centers in Canada.

See Note 3 to the consolidated financial statements for details of our individual joint ventures, including, but not limited to, carrying values of our investments, fees we receive for services provided to the joint ventures, recent development and financing transactions and condensed combined summary financial information.

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A default by a joint venture under its debt obligations may expose us to liability under the guaranty.

For secured term loans, we may include a guaranty of completion as well as a principal guaranty ranging from 0% to 17% of principal.

For secured term loans, we may include a guaranty of completion as well as principal.

Our joint ventures may contain make whole provisions in the event that demands are made on any existing guarantees.

Our joint ventures are generally subject to buy-sell provisions which are customary for joint venture agreements in the real estate industry.

Our joint ventures are generally subject to buy-sell provisions that are customary for joint venture agreements in the real estate industry.

Either partner may initiate these provisions (subject to any applicable lock up period), which could result in either the sale of our interest or the use of available cash or additional borrowings to acquire the other party's interest.

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Contractual Obligations

There were no material changes in our contractual commitments during the nine months ended September 30, 2023 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, other than the following updates to our contractual obligations for future debt and interest payments over the next five years and thereafter as of September 30, 2023.

There were no material changes in our contractual commitments during the three months ended March 31, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, other than the following updates to our contractual obligations for future debt and interest payments over the next five years and thereafter as of March 31, 2024.

Future Debt Obligations

As described further in Note 6 of the notes to the consolidated financial statements, as of September 30, 2023, scheduled maturities of our existing long-term debt for the remainder 2023 and for 2024, 2025, 2026 and 2027 are $1.2 million, $5.1 million, $1.5 million, $407.4 million and $625.0 million, respectively.

As of September 30, 2023, scheduled maturities after 2027 aggregate to $400.0 million.

As described further in Note 5 of the notes to the consolidated financial statements, as of March 31, 2024, scheduled maturities of our existing long-term debt for the remainder 2024 and for 2025, 2026, 2027 and 2028 are $3.9 million, $47.5 million, $407.4 million, $625.0 million and $0.0 million, respectively.

As of March 31, 2024, scheduled maturities after 2028 aggregate to $400.0 million.

Future Interest Payments

We are obligated to make periodic interest payments at fixed and variable rates, depending on the terms of the applicable debt agreements.

Based on applicable interest rates and scheduled debt maturities as of September 30, 2023, these interest obligations total approximately $51.5 million over the next twelve months.

The effective interest rate includes interest rate swap agreements that currently fix the base Adjusted SOFR rate at a weighted average of 0.5% on notional amounts aggregating $300 million.

Additional details on the Company’s interest rate strategy are as follows:

Effective Date Maturity Date Notional Amount Bank Pay Rate

Company Fixed Pay Rate

Interest rate swaps:

Current February 1, 2024 $300,000 Adjusted SOFR 0.5 %

Forward-starting:

February 1, 2024 February 1, 2026 $60,000 Adjusted SOFR 3.4 %

February 1, 2024 August 1, 2026 $65,000 Adjusted SOFR 3.8 %

February 1, 2024 January 1, 2027 $75,000 Adjusted SOFR 4.3 %

$200,000 Adjusted SOFR 3.9 %

The following table sets forth our changes in cash flows from September 30, 2023 and 2022 (in thousands):

Nine months ended September 30,

Based on applicable interest rates and scheduled debt maturities as of March 31, 2024, these interest obligations total approximately $56.9 million over the next twelve months.

The following table sets forth our changes in cash flows from March 31, 2024 and 2023 (in thousands):

Three months ended March 31,

2024 2023 Change

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Effect of foreign currency rate changes on cash and equivalents (87) 7 (94)

Net increase (decrease) in cash and cash equivalents

$ (23,908) $ 19,398 $ (43,306)

Net decrease in cash and cash equivalents $ (4,814) $ (9,382) $ 4,568

Operating Activities

In the first nine months of 2023, our net cash provided by operating activities increased year over year primarily due to changes in working capital and lower property operating expenses.

In the first quarter of 2024, our net cash provided by operating activities increased period over period primarily due to our new dev elopment and acquired properties including our center in Nashville, TN that o pened in October of 2023 and our centers in Asheville, NC and Huntsville, AL that were acquired in November of 2023.

Investing Activities

The increase in net cash used in investing activities was primarily due to increased capital expenditures related to new development at existing centers and the investment in our Nashville location, offset by proceeds from short-term investments.

The increase in net cash used in investing activities was primarily due to lower cash balances and related short-term investing activities.

Financing Activities

Net cash used in financing activities increased during the first nine months of 2023 primarily due to an increase in dividends paid and a higher amount of net share settlements related to vesting of equity awards, offset by proceeds from our common share offering under our ATM program.

Net cash used in financing activities decreased during the first quarter of 2024 primarily due to borrowings on our revolving credit facility, partially offset by higher dividends paid.

Financing Arrangements

As of September 30, 2023, unsecured borrowings represented 95% of our outstanding debt and 93% of the gross book value of our real estate portfolio was unencumbered.

The Company guarantees the Operating Partnership’s obligations under our lines of credit and our term loan.

As of September 30, 2023, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million.

The unsecured lines of credit as of September 30, 2023 included a $20.0 million liquidity line and a $500.0 million syndicated line.

As of March 31, 2024, unsecured borrowings represented 96% of our outstanding debt and 93% of the gross book value of our real estate portfolio was unencumbered.

The Company guarantees the Operating Partnership’s obligations under our unsecured lines of credit and our term loan.

As of March 31, 2024, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million.

The unsecured lines of credit as of March 31, 2024 included a $20.0 million liquidity line and a $500.0 million syndicated line.

The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances.

In May 2023, Fitch Ratings assigned a first-time ‘BBB’ long-term issuer default rating to the Company and the Operating Partnership, along with a Stable rating outlook.

Fitch also assigned a ‘BBB’ rating to Operating Partnership’s senior unsecured debt, which includes our lines of credit, a term loan and senior notes.

As a result, the applicable pricing margin on each of our unsecured lines of credit and our term loan was reduced by 25 basis points (including a 5 basis point reduction in the facility fee on the unsecured lines of credit).

Credit Ratings:

Agency Rating Outlook Latest Action

Fitch BBB Stable May 25, 2023

Moody’s Investors Services Baa3 Stable April 14, 2021

Standard & Poor’s Ratings Services BBB- Stable February 19, 2021

In April 2024, the Operating Partnership entered into amendments to its unsecured lines of credit, which, among other things, increased the borrowing capacity from $520 million to $620 million, with an accordion feature to increase total borrowing capacity to $1.2 billion, extended the maturity date from July 14, 2025 to April 12, 2028 (which may be extended by one additional year by exercising extension options), and reduced the applicable pricing margin from Adjusted SOFR plus 100 basis points to Adjusted SOFR plus 85 basis points based on the Company's current credit rating.

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.

The Company and Operating Partnership are well-known seasoned issuers with a joint shelf registration statement on Form S-3, expiring in February 2024, that allows us to register various, unspecified amounts of different classes of securities.

The Company and Operating Partnership are well-known seasoned issuers with a joint shelf registration statement on Form S-3, expiring in December 2026, that allows us to offer and sell unspecified amounts of different classes of securities.

To generate capital to reinvest into other attractive investment opportunities, we may also consider the use of additional operational and developmental joint ventures, property management opportunities, the sale or lease of outparcels on our existing properties and the sale of certain properties that do not meet our long-term investment criteria.

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We anticipate that adequate cash will be available to fund our operating and administrative expenses, regular debt service obligations, and the payment of dividends in accordance with REIT requirements in both the short- and long-term.

Although we receive most of our rental payments on a monthly basis, distributions to shareholders and unitholders are typically made quarterly and interest payments on the senior, unsecured notes are made semi-annually.

Although we receive most of our rental payments on a monthly basis, dividends and distributions to shareholders and unitholders, respectively, are typically made quarterly and interest payments on the senior, unsecured notes are made semi-annually.

Amounts accumulated for such payments will be used in the interim to reduce the outstanding borrowings under our existing unsecured lines of credit or invested in short-term money market or other suitable instruments.

As of September 30, 2023, the Company’s total liquidity was approximately $721.6 million, including cash and cash equivalents on the Company’s balance sheet, short-term investments and the full undrawn capacity under its $520.0 million unsecured lines of credit.

We expect to have sufficient liquidity to meet our obligations for at least the next twelve months.

We believe our current balance sheet position is financially sound;

however, due to the economic uncertainty caused by the current macroeconomic environment, including rising interest rates and inflation, geopolitical conflict and the inherent 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 matures, which is our senior notes due September 2026.

however, due to the economic uncertainty caused by the current macroeconomic environment, including rising interest rates and inflation, and the inherent 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 matures, which is our $350.0 million senior notes due September 2026.

Equity Offerings under the ATM Offering Program

In February 2021, we established the ATM Offering program whereby we may offer and sell the Company's common shares having an aggregate gross sales price of up to $250.0 million.

During 2022 we did not sell any shares under the ATM Offering program and for the first nine months of 2023, we settled Common Shares for an aggregate sales price of $2.7 million under the ATM Offering program and $57.4 million remains available for sale under the ATM Offering program.

We did not sell any common shares during the first quarter of 2024 and as of March 31, 2024, we have a remaining authorization of $220.1 million of common shares under the ATM Offering program.

Our ATM Offering program also provides that we may sell common shares through forward sale contracts.

Actual sales under the ATM Offering program will depend on a variety of factors including market conditions, the trading price of our common shares, our capital needs, and our determination of the appropriate sources of funding to meet such needs.

Throughout 2023, we entered into $325.0 million of forward-starting Daily SOFR interest rate swaps at average fixed pay rate of 3.90%.

The swaps were effective February 1, 2024, and end at various dates from February 1, 2026 to January 1, 2027.

These swaps replaced $300.0 million of existing swaps that expired on February 1, 2024 as part of our interest rate risk management strategy.

Debt Covenants

The Operating Partnership’s debt agreements require the maintenance of certain ratios, including debt service coverage and leverage, and limit the payment of dividends such that dividends and distributions will not exceed funds from operations, as defined in the agreements, for the prior fiscal year on an annual basis or 95% on a cumulative basis.

We have historically been, and at September 30, 2023 are, in compliance with all of our debt covenants.

We have historically been, and at March 31, 2024 are, in compliance with all of our debt covenants.

Our continued compliance with these covenants depends on many factors and could be impacted by current or future economic conditions.

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We believe that we have access to the necessary financing to fund our short-term liquidity needs.

As of September 30, 2023, we were in compliance with all financial and non-financial covenants related to our debt obligations.

As of March 31, 2024, we were in compliance with all financial and non-financial covenants related to our debt obligations.

Senior unsecured notes financial covenants Required Actual

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Debt of unconsolidated joint ventures

The following table details information regarding the outstanding debt of the unconsolidated joint ventures and guarantees of such debt provided by us as of September 30, 2023 (dollars in millions):

Joint Venture Total Joint

The following table details information regarding the outstanding debt of the unconsolidated joint ventures and guarantees of such debt provided by us as of March 31, 2024 (dollars in millions):

Joint Venture Ownership %

Venture Debt Maturity Date Interest Rate Percent Guaranteed by the Operating Partnership Maximum Guaranteed Amount by the Company

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50% $ 319.2 $ 10.0

Galveston/Houston

In June 2023, the Galveston/Houston joint venture completed the refinance of its mortgage.

The new $58.0 million loan has a maturity date of June 2026 and an interest rate of Daily SOFR + 3.00%.

In conjunction with this refinance, the joint venture entered into a $29.0 million interest rate swap that fixes Daily SOFR at 4.44% until December 2025.

The Company’s share of the outstanding debt is $29.0 million.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S.

generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.

GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.

Our Annual Report on Form 10-K for the year ended December 31, 2023 contains a discussion of our critical accounting estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section.

There have been no material changes to these estimates during the nine months ended September 30, 2023.

There have been no material changes to these estimates during the three months ended March 31, 2024.

Recent Accounting Pronouncements

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Below is a reconciliation of net income to FFO and Core FFO available to common shareholders (in thousands, except per share amounts):

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three months ended

Net income $ 23,306 $ 24,860

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As further adjusted for:

Compensation-related adjustments (2)

— — (806) 2,447

Gain on sale of non-real estate asset (3)

— — — (2,418)

Executive departure-related adjustments (2)

Impact of above adjustment to the allocation of earnings to participating securities (10) 6

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Exchangeable operating partnership units 4,708 4,738

Diluted weighted average common shares (for FFO per share computations) (1)

Diluted weighted average common shares (for FFO and Core FFO per share computations) (1)

114,731 110,260

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Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.

(2) For the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

For the 2022 period, represents executive severance costs.

(3) Represents gain on sale of the corporate aircraft.

(2) For the 2024 period, represents executive severance costs and for the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

Portfolio Net Operating Income and Same Center Net Operating Income

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Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio (in thousands):

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three months ended

Net income $ 23,306 $ 24,860

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Depreciation and amortization 33,860 25,893

Other non-property (income) expense (306) (279) (1,327) (45)

Other non-property income

Corporate general and administrative expenses 19,489 17,426

Non-cash adjustments (1)

670 348 1,971 1,711

Lease termination fees (262) (6)

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Non-same center NOI - Consolidated

(90) (479) (50) (950)

Same Center NOI - Consolidated (2)

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(1) Non-cash items include straight-line rent, above and below market rent amortization, straight-line rent expense on land leases and gains or losses on outparcel sales, as applicable.

(2) Sold outlet centers excluded from Same Center NOI:

Outlet centers sold:

Blowing Rock December 2022 Consolidated

(2) Centers excluded from Same Center NOI Cash Basis:

Center Date Event

Nashville, TN October 2023 New Development

Asheville, NC November 2023 Acquired

Huntsville, AL November 2023 Acquired

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre

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Each of these measures is defined as follows:

We define Adjusted EBITDA as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP before net interest expense, income taxes (if applicable), depreciation and amortization, gains and losses on sale of operating properties, joint venture properties, outparcels and other assets, impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate, compensation related to voluntary retirement plan and other executive officer severance, certain compensation-related adjustments, gain on sale of non-real estate asset, casualty gains and losses, gains and losses on early extinguishment of debt, net and other items that we do not consider indicative of the Company's ongoing operating performance.

We define Adjusted EBITDA as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP before net interest expense, income taxes (if applicable), depreciation and amortization, gains and losses on sale of operating properties, joint venture properties, outparcels and other assets, impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate, compensation related to voluntary retirement plan and other executive officer severance, certain executive departure-related adjustments, gain on sale of non-real estate asset, casualty gains and losses, gains and losses on early extinguishment of debt, net and other items that we do not consider indicative of the Company's ongoing operating performance.

We determine EBITDAre based on the definition set forth by NAREIT, which is defined as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP before net interest expense, income taxes (if applicable), depreciation and amortization, gains and losses on sale of operating properties, gains and losses on change of control and impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate and after adjustments to reflect our share of the EBITDAre of unconsolidated joint ventures.

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Below is a reconciliation of Net Income to Adjusted EBITDA (in thousands):

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three months ended

Net income $ 23,306 $ 24,860

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Interest expense, net 14,151 9,779

9,283 10,297 28,584 33,260

Income tax expense (benefit) (335) (200)

Depreciation and amortization 33,860 25,893

Compensation-related adjustments (2)

— — (806) 2,447

Gain on sale of non-real estate asset (3)

— — — (2,418)

Executive departure-related adjustments (1)

Adjusted EBITDA $ 72,536 $ 59,526

Below is a reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands):

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three months ended

Net income $ 23,306 $ 24,860

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Interest expense, net 14,151 9,779

9,283 10,297 28,584 33,260

Income tax expense (benefit) (335) (200)

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Pro-rata share of interest expense, net - unconsolidated joint ventures 2,169 2,131

2,224 1,804 6,550 4,838

Pro-rata share of depreciation and amortization - unconsolidated joint ventures 2,540 2,670

EBITDAre $ 75,691 $ 65,133

Compensation-related adjustments (2)

— 2,447 (806) 2,447

Gain on sale of non-real estate asset (3)

— — — (2,418)

Executive departure-related adjustments (1)

Adjusted EBITDAre $ 77,245 $ 64,327

(1) In 2022, we revised our presentation of interest expense to show this net of interest income.

Prior period results have been revised to conform with the current period presentation.

(2) For the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

For the 2022 period, represents executive severance costs.

(3) Represents gain on sale of the corporate aircraft.

(1) For the 2024 period, represents executive severance costs and for the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

ECONOMIC CONDITIONS AND OUTLOOK

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In addition, certain of our lease agreements include co-tenancy and/or sales-based provisions that may allow a tenant to pay reduced rent and/or terminate a lease prior to its natural expiration if we fail to maintain certain occupancy levels or retain specified named tenants, or if the tenant does not achieve certain specified sales targets.

If our occupancy declines, certain outlet centers may fall below the minimum co-tenancy thresholds and could trigger many tenants' contractual ability to pay reduced rents, which in turn may negatively impact our results of operations.

If our occupancy declines, certain centers may fall below the minimum co-tenancy thresholds and could trigger many tenants' contractual ability to pay reduced rents, which in turn may negatively impact our results of operations.

Due to the relatively short-term nature of our tenants’ leases, a significant portion of the leases in our portfolio come up for renewal each year.

During 2024, approximately 2.6 million square feet, or 19% of the total portfolio, including our share of unconsolidated joint ventures, will come up for renewal.

For the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, as of September 30, 2023, we had lease renewals executed or in process for 88.0% of the space scheduled to expire during 2023 compared to 75.6% of the space scheduled to expire during 2022 that was executed or in process as of September 30, 2022.

For the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, as of April 30, 2024, we had lease renewals executed or in process for 46.6% of the space scheduled to expire during 2024 compared to 58.0% of the space scheduled to expire during 2023 that was executed or in process as of March 31, 2023.

The majority of our leases contain provisions designed to mitigate the impact of inflation.

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A component of most leases includes a pro-rata share or escalating fixed contributions by the tenant for property operating expenses, including common area maintenance, real estate taxes, insurance and advertising and promotion, thereby reducing exposure to increases in costs and operating expenses resulting from inflation.

Our outlet centers typically include well-known, national, brand name companies.

Our centers typically include well-known, national, brand name companies.

By maintaining a broad base of well-known tenants and a geographically diverse portfolio of properties located across the United States, we believe we reduce our operating and leasing risks.

As of September 30, 2023 no one tenant (including affiliates) accounted for more than 8% of our square feet or 6% of our rental revenues.

As of March 31, 2024 no one tenant (including affiliates) accounted for more than 8% of our aggregate square feet or 6% of our aggregate rental revenues.

We believe retail real estate will continue to be a profitable and fundamental distribution channel for many brands and retailers.

While we continue to attract and retain additional tenants, if we were unable to successfully renew or re-lease a significant amount of this space on favorable economic terms or in a timely manner, the loss in rent and our Same Center NOI could be negatively impacted in future periods.

Occupancy for our total portfolio, including our share of unconsolidated joint ventures, was 98% and 96.5% as of September 30, 2023 and 2022, respectively.

Management and Board of Directors

As previously disclosed, the term of Steven B.

Tanger as Executive Chair of the Board ends January 1, 2024.

Following such date, Mr.

Tanger will serve as Non-Executive Chair of the Company’s Board of Directors.

Occupancy for our total portfolio, including our share of unconsolidated joint ventures, was 96.6% and 96.5% as of March 31, 2024 and 2023, respectively.

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-Q

Item 2. Management’s Discussion and Analysis