United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q10-Q/A
(Amendment No. 1)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20172022
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________


Commission file numbernumber: 1-11986 (Tanger Factory Outlet Centers, Inc.)
Commission file numbernumber: 333-3526-01 (Tanger Properties Limited Partnership)


TANGER FACTORY OUTLET CENTERS, INC.
TANGER PROPERTIES LIMITED PARTNERSHIP
(Exact name of Registrantregistrant as specified in its charter)
North Carolina (Tanger(Tanger Factory Outlet Centers, Inc.)56-1815473
North Carolina (Tanger(Tanger Properties Limited Partnership)56-1822494
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
3200 Northline Avenue, Suite 360, Greensboro, NC 27408
(Address of principal executive offices) (Zip Code)
(336) 292-3010
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Tanger Factory Outlet Centers, Inc.:
3200 Northline Avenue, Suite 360, Greensboro, NC 27408Title of each classTrading Symbol(s)Name of each exchange on which registered
(Address of principal executive offices)
Common Shares,
$0.01 par value		SKT
(336) 292-3010
(Registrant's telephone number, including area code)New York Stock Exchange
Tanger Properties Limited Partnership:
None

Indicate by check mark whether the Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Tanger Factory Outlet Centers, Inc.
Yesx
☒Noo☐
Tanger Properties Limited Partnership
Yesx
☒Noo☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Tanger Factory Outlet Centers, Inc.
Yesx
☒Noo☐
Tanger Properties Limited Partnership
Yesx
☒Noo☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer",filer,” “smaller reporting company” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Tanger Factory Outlet Centers, Inc.
Large Accelerated Filer☒Accelerated Filer☐
Non-accelerated Filer☐Smaller Reporting Company☐
Tanger Factory Outlet Centers, Inc.
Large accelerated filer x
Emerging Growth Company
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
(Do not check if a smaller reporting company)
Emerging growth company o
☐
Tanger Properties Limited Partnership
Large Accelerated Filer☐Accelerated Filer☐
Non-accelerated Filer☒Smaller Reporting Company☐
Tanger Properties Limited Partnership
Large accelerated filer o
Emerging Growth Company
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
(Do not check if a smaller reporting company)
Emerging growth company o
☐



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Tanger Factory Outlet Centers, Inc.o☐
Tanger Properties Limited Partnershipo☐

Indicate by check mark whether the registrant is a shell company (as defined byin Rule 12b-2 of the Exchange Act).
Tanger Factory Outlet Centers, Inc.
Yeso
☐Nox☒
Tanger Properties Limited Partnership
Yeso
☐Nox☒



As of November 3, 2017,August 1, 2022, there were 94,528,188104,371,479 common shares of Tanger Factory Outlet Centers, Inc. outstanding, $.01 par value.



EXPLANATORY NOTE TO FORM 10-Q/A

We are filing this Amendment No. 1 (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Form 10-Q”), as filed with the Securities and Exchange Commission, or the SEC, on August 8, 2022, to amend the certification of the Principal Financial Officer of Tanger Factory Outlet Centers, Inc. originally filed as Exhibit 32.2 to the Form 10-Q, which contained a clerical error. This Form 10-Q/A also includes all parts of the Form 10-Q, as well as updated certifications of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Sections 906 and 302 of the Sarbanes-Oxley Act of 2002. This Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update those disclosures affected by subsequent events and all information other than the cover page, this explanatory note to Form 10-Q/A, Part II, Item 6, the certifications and the signature page is unchanged.


EXPLANATORY NOTE
This report combines the unaudited quarterly reports on Form 10-Q for the quarter ended SeptemberJune 30, 20172022 of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership. Unless the context indicates otherwise, the term "Company"“Company” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating Partnership"“Operating Partnership” refers to Tanger Properties Limited Partnership and subsidiaries. The terms “we”, “our” and “us” refer to the Company or the Company and the Operating Partnership together, as the text requires.


Tanger Factory Outlet Centers, Inc. and subsidiaries is one of the largest owners and operators of outlet centers in the United States and Canada. The Company is a fully-integrated, self-administered and self-managed real estate investment trust ("REIT"(“REIT”), which, through its controlling interest in the Operating Partnership, focuses exclusively on developing, acquiring, owning, operating and managing outlet shopping centers. The outlet centers and other assets are held by, and all of the operations are conducted by, the Operating Partnership and its subsidiaries.Partnership. Accordingly, the descriptions of the business, employees and properties of the Company are also descriptions of the business, employees and properties of the Operating Partnership. As the Operating Partnership is the issuer of our registered debt securities, we are required to present a separate set of financial statements for this entity.


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 throughas its two wholly-owned subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust is the sole general partner of the Operating Partnership.partner. Tanger LP Trust holds a limited partnership interest. As of SeptemberJune 30, 2017,2022, the Company throughand its ownership of Tanger GP Trust and Tanger LP Trust,wholly owned 94,528,188subsidiaries owned 104,394,792 units of the Operating Partnership and other limited partners (the "Non-Company LPs"“Non-Company LPs”) collectively owned 5,027,7814,761,559 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'sCompany’s common shares, subject to certain limitations to preserve the Company'sCompany’s status as a REIT. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.


Management operates the Company and the Operating Partnership as one enterprise. The management of the Company consists of the same members as the management of the Operating Partnership. These individuals are officers of the Company and employees of the Operating Partnership. The individuals that comprise the Company's Board of Directors are also the same individuals that make up Tanger GP Trust's Board of Trustees.


We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:


•enhancing investors'investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;


•eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and


•creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.


There are only a few differences between the Company and the Operating Partnership, which are reflected in the disclosure in this report. We believe it is important, however, to understand these differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated consolidated company.


As stated above, the Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership, including through its wholly-owned subsidiaries, the Tanger GP Trust andsubsidiary, Tanger LP Trust. As a result, the Company does not conduct business itself, other than issuing public equity from time to time and incurring expenses required to operate as a public company. However, all operating expenses incurred by the Company are reimbursed by the Operating Partnership, thus the only material item on the Company'sCompany’s income statement is its equity in the earnings of the Operating Partnership. Therefore, the assets and liabilities and the revenues and expenses of the Company and the Operating Partnership are the same on their respective financial statements, except for immaterial differences related to cash, other assets and accrued liabilities that arise from public company expenses paid by the Company. The Company itself does not hold any indebtedness but does guarantee certain debt of the Operating Partnership, as disclosed in this report.


2


The Operating Partnership holds all of the outlet centers and other assets, including the ownership interests in consolidated and unconsolidated joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by the Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required through its operations, its incurrence of indebtedness or through the issuance of partnership units.


Noncontrolling interests, shareholder'sshareholders’ equity and partner'spartners’ capital are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partnership interests in the Operating Partnership held by the Non-Company LPs are accounted for as partner'spartners’ capital in the Operating Partnership'sPartnership’s financial statements and as noncontrolling interests in the Company'sCompany’s financial statements.


To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections, as applicable, for each of the Company and the Operating Partnership:


•Consolidated financial statements;


•The following notes to the consolidated financial statements:


•Debt of the Company and the Operating Partnership;


Shareholders'•Shareholders’ Equity if applicable, and Partners'Partners’ Equity;


•Earnings Per Share and Earnings Per Unit;


•Accumulated Other Comprehensive Income of the Company and the Operating Partnership; and


•Liquidity and Capital Resources in the Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations.


This report also includes separate Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the ChiefPrincipal Executive Officer and the ChiefPrincipal Financial Officer of each entity have made the requisite certifications and that the Company and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.


The separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company operates the business through the Operating Partnership.


The Company currently consolidates the Operating Partnership because it has (1) the power to direct the activities of the Operating Partnership that most significantly impact the Operating Partnership’s economic performance and (2) the obligation to absorb losses and the right to receive the residual returns of the Operating Partnership that could be potentially significant. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

3


TANGER FACTORY OUTLET CENTERS, INC. AND TANGER PROPERTIES LIMITED PARTNERSHIP
Index
Page Number
Part I. Financial Information
Item 1.
FINANCIAL STATEMENTS OF TANGER FACTORY OUTLET CENTERS, INC. (Unaudited)
Consolidated Balance Sheets - as of SeptemberJune 30, 20172022 and December 31, 20162021
5
Consolidated Statements of Operations - for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021
6
Consolidated Statements of Comprehensive Income - for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021
7
Consolidated Statements of Shareholders'Shareholders’ Equity - for the ninethree and six months ended SeptemberJune 30, 20172022 and 20162021
8
Consolidated Statements of Cash Flows - for the ninesix months ended SeptemberJune 30, 20172022 and 20162021
10
FINANCIAL STATEMENTS OF TANGER PROPERTIES LIMITED PARTNERSHIP (Unaudited)
Consolidated Balance Sheets - as of SeptemberJune 30, 20172022 and December 31, 20162021
11
Consolidated Statements of Operations - for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021
12
Consolidated Statements of Comprehensive Income - for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021
13
Consolidated Statements of Equity - for the ninethree and six months ended SeptemberJune 30, 20172022 and 20162021
14
Consolidated Statements of Cash Flows - for the ninesix months ended SeptemberJune 30, 20172022 and 20162021
1516
Condensed Notes to Consolidated Financial Statements of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership
1617
Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
3739
Item 3. Quantitative and Qualitative Disclosures about Market Risk
6064
Item 4. Controls and Procedures (Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership)
6165
Part II. Other Information
Item 1. Legal Proceedings
6265
Item 1A. Risk Factors
6265
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds6. Exhibits
6267
Item 4. Mine Safety DisclosureSignatures
6268
Item 6. Exhibits
63
Signatures
64

4


PART I. - FINANCIAL INFORMATION


Item 1 - Financial Statements of Tanger Factory Outlet Centers, Inc.


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data, unaudited)
 September 30, 2017 December 31, 2016June 30, 2022December 31, 2021
Assets  
  
Assets  
Rental property:  
  
Rental property:  
Land $268,821
 $272,153
Land$277,041 $268,269 
Buildings, improvements and fixtures 2,694,549
 2,647,477
Buildings, improvements and fixtures2,537,507 2,532,489 
Construction in progress 87,762
 46,277
Construction in progress13,346 — 
 3,051,132
 2,965,907
 2,827,894 2,800,758 
Accumulated depreciation (875,121) (814,583)Accumulated depreciation(1,189,576)(1,145,388)
Total rental property, net 2,176,011
 2,151,324
Total rental property, net1,638,318 1,655,370 
Cash and cash equivalents 8,773
 12,222
Cash and cash equivalents194,190 161,255 
Investments in unconsolidated joint ventures 125,819
 128,104
Investments in unconsolidated joint ventures80,041 82,647 
Deferred lease costs and other intangibles, net 135,768
 151,579
Deferred lease costs and other intangibles, net67,482 73,720 
Operating lease right-of-use assetsOperating lease right-of-use assets79,228 79,807 
Prepaids and other assets 95,075
 82,985
Prepaids and other assets95,986 104,585 
Total assets $2,541,446
 $2,526,214
Total assets$2,155,245 $2,157,384 
Liabilities and Equity    Liabilities and Equity  
Liabilities  
  
Liabilities  
Debt:  
  
Debt:  
Senior, unsecured notes, net $1,134,181
 $1,135,309
Senior, unsecured notes, net$1,037,086 $1,036,181 
Unsecured term loan, net 323,011
 322,410
Unsecured term loan, net298,783 298,421 
Mortgages payable, net 170,776
 172,145
Mortgages payable, net60,146 62,474 
Unsecured lines of credit, net 146,013
 58,002
Unsecured lines of creditUnsecured lines of credit— — 
Total debt 1,773,981
 1,687,866
Total debt1,396,015 1,397,076 
Accounts payable and accrued expenses 84,091
 78,143
Accounts payable and accrued expenses76,512 92,995 
Operating lease liabilitiesOperating lease liabilities88,330 88,874 
Other liabilities 74,339
 54,764
Other liabilities81,813 78,650 
Total liabilities 1,932,411
 1,820,773
Total liabilities1,642,670 1,657,595 
Commitments and contingencies 

 

Commitments and contingencies
Equity  
  
Equity  
Tanger Factory Outlet Centers, Inc.:  
  
Tanger Factory Outlet Centers, Inc.:  
Common shares, $.01 par value, 300,000,000 shares authorized, 94,528,188 and 96,095,891 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively 945
 961
Common shares, $0.01 par value, 300,000,000 shares authorized, 104,394,792 and 104,084,734 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectivelyCommon shares, $0.01 par value, 300,000,000 shares authorized, 104,394,792 and 104,084,734 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively1,044 1,041 
Paid in capital 781,020
 820,251
Paid in capital981,833 978,054 
Accumulated distributions in excess of net income  (183,975) (122,701)Accumulated distributions in excess of net income (483,241)(483,409)
Accumulated other comprehensive loss (19,713) (28,295)Accumulated other comprehensive loss(9,420)(17,761)
Equity attributable to Tanger Factory Outlet Centers, Inc. 578,277
 670,216
Equity attributable to Tanger Factory Outlet Centers, Inc.490,216 477,925 
Equity attributable to noncontrolling interests:    Equity attributable to noncontrolling interests:
Noncontrolling interests in Operating Partnership 30,758
 35,066
Noncontrolling interests in Operating Partnership22,359 21,864 
Noncontrolling interests in other consolidated partnerships —
 159
Noncontrolling interests in other consolidated partnerships— — 
Total equity 609,035
 705,441
Total equity512,575 499,789 
Total liabilities and equity $2,541,446
 $2,526,214
Total liabilities and equity$2,155,245 $2,157,384 


The accompanying notes are an integral part of these consolidated financial statements.

5


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data, unaudited)
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Revenues:      
  
Base rentals $80,349
 $79,569
 $241,467
 $227,195
Percentage rentals 3,138
 2,995
 6,798
 7,471
Expense reimbursements 34,180
 33,125
 104,801
 97,121
Management, leasing and other services 588
 806
 1,776
 3,259
Other income 2,510
 2,642
 6,905
 6,229
Total revenues 120,765
 119,137
 361,747
 341,275
Expenses:   

    
Property operating 37,571
 37,442
 115,074
 110,328
General and administrative 10,934
 12,128
 33,846
 35,368
Acquisition costs —
 487
 —
 487
Abandoned pre-development costs (99) —
 528
 —
Depreciation and amortization 30,976
 29,205
 95,175
 82,078
Total expenses 79,382
 79,262
 244,623
 228,261
Operating income 41,383
 39,875

117,124

113,014
Other income (expense):        
Interest expense (16,489) (15,516) (49,496) (44,200)
Loss on early extinguishment of debt (35,626) —
 (35,626) —
Gain on sale of assets —
 1,418
 6,943
 6,305
Gain on previously held interest in acquired joint venture —
 46,258
 —
 95,516
Other non-operating income (expense) 591
 24
 683
 378
Income (loss) before equity in earnings (losses) of unconsolidated joint ventures (10,141) 72,059
 39,628
 171,013
Equity in earnings (losses) of unconsolidated joint ventures (5,893) 715
 (1,201) 7,680
Net income (loss) (16,034) 72,774

38,427

178,693
Noncontrolling interests in Operating Partnership 815
 (3,668) (1,920) (9,009)
Noncontrolling interests in other consolidated partnerships —
 (2) —
 (13)
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(15,219) $69,104

$36,507

$169,671
         
Basic earnings per common share:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.77
Diluted earnings per common share:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.76
         
Dividends declared per common share $0.3425
 $0.3250
 $1.01
 $0.9350
Three months ended June 30,Six months ended June 30,
 2022202120222021
Revenues:  
Rental revenues$101,409 $96,824 $206,018 $194,291 
Management, leasing and other services1,436 1,359 2,963 2,731 
Other revenues2,993 3,090 5,725 4,945 
Total revenues105,838 101,273 214,706 201,967 
Expenses: 
Property operating32,697 31,250 69,455 66,561 
General and administrative19,329 15,700 34,796 32,493 
Depreciation and amortization26,220 27,732 52,463 55,882 
Total expenses78,246 74,682 156,714 154,936 
Other income (expense):
Interest expense(11,576)(13,338)(23,210)(27,700)
Loss on early extinguishment of debt— (14,039)— (14,039)
Other income (expense)2,576 654 2,759 (2,851)
Total other income (expense)(9,000)(26,723)(20,451)(44,590)
Income (loss) before equity in earnings of unconsolidated joint ventures18,592 (132)37,541 2,441 
Equity in earnings of unconsolidated joint ventures2,227 2,728 4,740 4,497 
Net income20,819 2,596 42,281 6,938 
Noncontrolling interests in Operating Partnership(914)(118)(1,858)(327)
Noncontrolling interests in other consolidated partnerships— — — — 
Net income attributable to Tanger Factory Outlet Centers, Inc.$19,905 $2,478 $40,423 $6,611 
Basic earnings per common share:
Net income$0.19 $0.02 $0.39 $0.06 
Diluted earnings per common share:
Net income$0.19 $0.02 $0.38 $0.06 
The accompanying notes are an integral part of these consolidated financial statements.

6


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Net income (loss) $(16,034) $72,774
 $38,427
 $178,693
Other comprehensive income:        
Foreign currency translation adjustments 4,737
 (1,731) 8,821
 6,970
Change in fair value of cash flow hedges 39
 2,228
 217
 (1,601)
Other comprehensive income 4,776
 497
 9,038
 5,369
Comprehensive income (loss) (11,258) 73,271
 47,465
 184,062
Comprehensive (income) loss attributable to noncontrolling interests 573
 (3,695) (2,376) (9,294)
Comprehensive income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(10,685) $69,576
 $45,089
 $174,768
Three months ended June 30,Six months ended June 30,
 2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Other comprehensive income:
Foreign currency translation adjustments(2,441)1,365 (1,215)6,004 
Change in fair value of cash flow hedges2,265 237 9,939 2,235 
Other comprehensive income (loss)(176)1,602 8,724 8,239 
Comprehensive income20,643 4,198 51,005 15,177 
Comprehensive (income) attributable to noncontrolling interests(906)(195)(2,241)(724)
Comprehensive income attributable to Tanger Factory Outlet Centers, Inc.$19,737 $4,003 $48,764 $14,453 
The accompanying notes are an integral part of these consolidated financial statements.




7

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'SHAREHOLDERS’ EQUITY
(In thousands, except share and per share data, unaudited)

  Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
 equity
Balance,
December 31, 2015
 $959
$806,379
$(195,486)$(36,715)$575,137
$30,309
$586
$606,032
Net income —
—
169,671
—
169,671
9,009
13
178,693
Other comprehensive income —
—
—
5,097
5,097
272
—
5,369
Compensation under Incentive Award Plan —
12,556
—
—
12,556
—
—
12,556
Issuance of 57,700 common shares upon exercise of options —
1,693
—
—
1,693
—
—
1,693
Grant of 173,124 restricted common share awards, net of forfeitures 2
(2)—
—
—
—
—
—
Issuance of 24,040 deferred shares —
—
—
—
—
—
—
—
Withholding of 66,427 common shares for employee income taxes —
(2,164)—
—
(2,164)—
—
(2,164)
Contributions from noncontrolling interests —
—
—
—
—
—
35
35
Adjustment for noncontrolling interests in Operating Partnership —
(385)—
—
(385)385
—
—
Adjustment for noncontrolling interests in other consolidated partnerships —
4
—
—
4
—
(4)—
Acquisition of noncontrolling interest in other consolidated partnership —
(1,617)—
—
(1,617)—
(325)(1,942)
Common dividends ($.935 per share) —
—
(89,750)—
(89,750)—
—
(89,750)
Distributions to noncontrolling interests —
—
—
—
—
(4,725)(145)(4,870)
Balance,
September 30, 2016
 $961
$816,464
$(115,565)$(31,618)$670,242
$35,250
$160
$705,652
          
The accompanying notes are an integral part of these consolidated financial statements.
          
  










  







          
          
          


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share and per share data, unaudited)
  Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
 equity
Balance, December 31, 2016 $961
$820,251
$(122,701)$(28,295)$670,216
$35,066
$159
$705,441
Net income —
—
36,507
—
36,507
1,920
—
38,427
Other comprehensive income —
—
—
8,582
8,582
456
—
9,038
Compensation under Incentive Award Plan —
10,891
—
—
10,891
—
—
10,891
Issuance of 1,800 common shares upon exercise of options —
54
—
—
54
—
—
54
Grant of 411,968 restricted common share awards, net of forfeitures 4
(4)—
—
—
—
—
—
Repurchase of 1,911,585 common shares, including transaction costs

 (19)(49,343)—
—
(49,362)—
—
(49,362)
Withholding of
69,886 common shares for employee income taxes		 (1)(2,435)—
—
(2,436)—
—
(2,436)
Adjustment for noncontrolling interests in Operating Partnership —
1,606
—
—
1,606
(1,606)—
—
Acquisition of noncontrolling interest in other consolidated partnership —
—
—
—
—
—
(159)(159)
Common dividends ($1.01 per share) —
—
(97,781)—
(97,781)—
—
(97,781)
Distributions to noncontrolling interests —
—
—
—
—
(5,078)—
(5,078)
Balance,
September 30, 2017
 $945
$781,020
$(183,975)$(19,713)$578,277
$30,758
$—
$609,035

Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
 equity
Balance,
March 31, 2021		$1,008 $913,236 $(432,895)$(20,268)$461,081 $21,933 $— $483,014 
Net income— — 2,478 — 2,478 118 — 2,596 
Other comprehensive income— — — 1,525 1,525 77 — 1,602 
Compensation under Incentive Award Plan— 2,765 — — 2,765 — — 2,765 
Issuance of 15,500 common shares upon exercise of options— 89 — — 89 — — 89 
Issuance of 2,810,503 common shares28 52,193 — — 52,221 — — 52,221 
Adjustment for noncontrolling interests in Operating Partnership— (1,874)— — (1,874)1,874 — — 
Common dividends ($0.1775 per share)— — (17,951)— (17,951)— — (17,951)
Distributions to noncontrolling interests— — — — — (851)— (851)
Balance, June 30, 2021$1,036 $966,409 $(448,368)$(18,743)$500,334 $23,151 $— $523,485 
Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
 equity
Balance,
December 31, 2020		$936 $787,143 $(420,104)$(26,585)$341,390 $17,493 $— $358,883 
Net income— — 6,611 — 6,611 327 — 6,938 
Other comprehensive income— — — 7,842 7,842 397 — 8,239 
Compensation under Incentive Award Plan— 6,674 — — 6,674 — — 6,674 
Issuance of 15,500 common shares upon exercise of options— 89 — — 89 — — 89 
Grant of 469,675 restricted common share awards, net of forfeitures5 (5)— — — — — — 
Issuance of 9,677,581 common shares96 180,780 — — 180,876 — — 180,876 
Withholding of 111,977 common shares for employee income taxes(1)(1,636)— — (1,637)— — (1,637)
Adjustment for noncontrolling interests in Operating Partnership— (6,636)— — (6,636)6,636 — — 
Common dividends
($0.3550 per share)
— — (34,875)— (34,875)— — (34,875)
Distributions to noncontrolling interests— — — — — (1,702)— (1,702)
Balance,
June 30, 2021
$1,036 $966,409 $(448,368)$(18,743)$500,334 $23,151 $— $523,485 
The accompanying notes are an integral part of these consolidated financial statements.



8



TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share and per share data, unaudited)
Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
 equity
Balance,
March 31, 2022		$1,044 $978,734 $(482,206)$(9,252)$488,320 $22,257 $— $510,577 
Net income— — 19,905 — 19,905 914 — 20,819 
Other comprehensive loss— — — (168)(168)(8)— (176)
Compensation under Incentive Award Plan— 4,299 — — 4,299 — — 4,299 
Issuance of 800 common shares upon exercise of options— 5 — — 5 — — 5 
Forfeiture of 13,062 restricted common share awards— — — — — — — — 
Withholding of 62,007 common shares for employee income taxes— (1,057)— — (1,057)— — (1,057)
Adjustment for noncontrolling interests in Operating Partnership— (148)— — (148)148 — — 
Common dividends ($0.20 per share)— — (20,940)— (20,940)— — (20,940)
Distributions to noncontrolling interests— — — — — (952)— (952)
Balance,
June 30, 2022
$1,044 $981,833 $(483,241)$(9,420)$490,216 $22,359 $— $512,575 
Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
 equity
Balance,
December 31, 2021		$1,041 $978,054 $(483,409)$(17,761)$477,925 $21,864 $— $499,789 
Net income— — 40,423 — 40,423 1,858 — 42,281 
Other comprehensive income— — — 8,341 8,341 383 — 8,724 
Compensation under Incentive Award Plan— 7,045 — — 7,045 — — 7,045 
Issuance of 2,700 common shares upon exercise of options— 15 — — 15 — — 15 
Grant of 499,336 restricted common share awards, net of forfeitures4 (4)— — — — — — 
Withholding of 191,978 common shares for employee income taxes(1)(3,202)— — (3,203)— — (3,203)
Adjustment for noncontrolling interests in Operating Partnership— (75)— — (75)75 — — 
Common dividends
($0.3825 per share)
— — (40,255)— (40,255)— — (40,255)
Distributions to noncontrolling interests— — — — — (1,821)— (1,821)
Balance,
June 30, 2022
$1,044 $981,833 $(483,241)$(9,420)$490,216 $22,359 $— $512,575 

The accompanying notes are an integral part of these consolidated financial statements.
9

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 Nine months ended September 30,Six months ended June 30,
 2017 2016 20222021
OPERATING ACTIVITIES    
OPERATING ACTIVITIES  
Net income $38,427
 $178,693
Net income$42,281 $6,938 
Adjustments to reconcile net income to net cash provided by operating activities:    Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 95,175
 82,078
Depreciation and amortization52,463 55,882 
Amortization of deferred financing costs 2,640
 2,350
Amortization of deferred financing costs1,541 2,320 
Gain on sale of assets (6,943) (6,305)
Gain on previously held interest in acquired joint venture —
 (95,516)
Loss on early extinguishment of debt 35,626
 —
Loss on early extinguishment of debt— 14,039 
Equity in (earnings) losses of unconsolidated joint ventures 1,201
 (7,680)
Equity in earnings of unconsolidated joint venturesEquity in earnings of unconsolidated joint ventures(4,740)(4,497)
Equity-based compensation expense 10,114
 11,815
Equity-based compensation expense6,959 6,608 
Amortization of debt (premiums) and discounts, net 363
 1,160
Amortization of debt (premiums) and discounts, net241 210 
Amortization (accretion) of market rent rate adjustments, net 2,107
 2,087
Amortization (accretion) of market rent rate adjustments, net314 25 
Straight-line rent adjustments (4,749) (5,092)Straight-line rent adjustments1,035 1,521 
Distributions of cumulative earnings from unconsolidated joint ventures 8,128
 10,571
Distributions of cumulative earnings from unconsolidated joint ventures4,775 4,774 
Other non-cashOther non-cash(2,418)3,638 
Changes in other assets and liabilities:    Changes in other assets and liabilities:
Other assets (1,131) 1,093
Other assets7,072 12,619 
Accounts payable and accrued expenses 653
 2,512
Accounts payable and accrued expenses(20,448)(12,472)
Net cash provided by operating activities 181,611
 177,766
Net cash provided by operating activities89,075 91,605 
INVESTING ACTIVITIES    INVESTING ACTIVITIES
Additions to rental property (132,612) (112,213)Additions to rental property(25,717)(11,836)
Acquisitions of interests in unconsolidated joint ventures, net of cash acquired —
 (45,219)
Additions to investments in unconsolidated joint ventures (4,033) (27,851)Additions to investments in unconsolidated joint ventures— (7,000)
Net proceeds from sale of assets 39,213
 28,706
Change in restricted cash —
 118,370
Net proceeds from sale of real estate assetsNet proceeds from sale of real estate assets— 8,129 
Net proceeds on sale of non-real estate assetsNet proceeds on sale of non-real estate assets14,610 — 
Additions to non-real estate assets (8,384) (8,982)Additions to non-real estate assets(4,176)(781)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 16,019
 14,193
Distributions in excess of cumulative earnings from unconsolidated joint ventures6,536 13,364 
Additions to deferred lease costs (4,218) (5,273)Additions to deferred lease costs(1,076)(4,562)
Other investing activities 4,963
 (1,221)Other investing activities1,728 6,695 
Net cash used in investing activities (89,052) (39,490)
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities(8,095)4,009 
FINANCING ACTIVITIES    FINANCING ACTIVITIES
Cash dividends paid (97,781) (109,879)Cash dividends paid(40,255)(34,875)
Distributions to noncontrolling interests in Operating Partnership (5,078) (5,786)Distributions to noncontrolling interests in Operating Partnership(1,821)(1,702)
Proceeds from revolving credit facility 543,866
 733,450
Repayments of revolving credit facility (456,666) (727,750)
Proceeds from notes, mortgages and loans 299,460
 338,270
Proceeds from notes, mortgages and loans— — 
Repayments of notes, mortgages and loans (302,240) (329,603)Repayments of notes, mortgages and loans(2,180)(201,861)
Payment of make-whole premium related to early extinguishment of debt (34,143) —
Payment of make-whole premium related to early extinguishment of debt— (12,954)
Repayment of deferred financing obligation —
 (28,388)
Repurchase of common shares, including transaction costs (49,362) —
Employee income taxes paid related to shares withheld upon vesting of equity awards (2,436) (2,164)Employee income taxes paid related to shares withheld upon vesting of equity awards(3,203)(1,637)
Additions to deferred financing costs (2,900) (4,243)Additions to deferred financing costs— (123)
Proceeds from exercise of options 54
 1,693
Proceeds from exercise of options15 89 
Proceeds from other financing activities 12,054
 35
Proceeds from common share offeringProceeds from common share offering— 180,876 
Payment for other financing activities (782) (99)Payment for other financing activities(574)(574)
Net cash used in financing activities (95,954) (134,464)
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(48,018)(72,761)
Effect of foreign currency rate changes on cash and cash equivalents (54) 532
Effect of foreign currency rate changes on cash and cash equivalents(27)(73)
Net increase (decrease) in cash and cash equivalents (3,449) 4,344
Net increase (decrease) in cash and cash equivalents32,935 22,780 
Cash and cash equivalents, beginning of period 12,222
 21,558
Cash and cash equivalents, beginning of period161,255 84,832 
Cash and cash equivalents, end of period $8,773
 $25,902
Cash and cash equivalents, end of period$194,190 $107,612 
The accompanying notes are an integral part of these consolidated financial statements.

10


Item 1 - Financial Statements of Tanger Properties Limited Partnership


TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data, unaudited)
 September 30, 2017 December 31, 2016June 30, 2022December 31, 2021
Assets  
  
Assets  
Rental property:  
  
Rental property:  
Land $268,821
 $272,153
Land$277,041 $268,269 
Buildings, improvements and fixtures 2,694,549
 2,647,477
Buildings, improvements and fixtures2,537,507 2,532,489 
Construction in progress 87,762
 46,277
Construction in progress13,346 — 
 3,051,132
 2,965,907
2,827,894 2,800,758 
Accumulated depreciation (875,121) (814,583)Accumulated depreciation(1,189,576)(1,145,388)
Total rental property, net 2,176,011
 2,151,324
Total rental property, net1,638,318 1,655,370 
Cash and cash equivalents 8,669
 12,199
Cash and cash equivalents194,208 161,152 
Investments in unconsolidated joint ventures 125,819
 128,104
Investments in unconsolidated joint ventures80,041 82,647 
Deferred lease costs and other intangibles, net 135,768
 151,579
Deferred lease costs and other intangibles, net67,482 73,720 
Operating lease right-of-use assetsOperating lease right-of-use assets79,228 79,807 
Prepaids and other assets 94,550
 82,481
Prepaids and other assets95,641 104,362 
Total assets $2,540,817
 $2,525,687
Total assets$2,154,918 $2,157,058 
Liabilities and Equity 
  Liabilities and Equity
Liabilities    Liabilities
Debt:    Debt:
Senior, unsecured notes, net $1,134,181
 $1,135,309
Senior, unsecured notes, net$1,037,086 $1,036,181 
Unsecured term loan, net 323,011
 322,410
Unsecured term loan, net298,783 298,421 
Mortgages payable, net 170,776
 172,145
Mortgages payable, net60,146 62,474 
Unsecured lines of credit, net 146,013
 58,002
Unsecured lines of creditUnsecured lines of credit— — 
Total debt 1,773,981
 1,687,866
Total debt1,396,015 1,397,076 
Accounts payable and accrued expenses 83,462
 77,616
Accounts payable and accrued expenses76,185 92,669 
Operating lease liabilitiesOperating lease liabilities88,330 88,874 
Other liabilities 74,339
 54,764
Other liabilities81,813 78,650 
Total liabilities 1,931,782
 1,820,246
Total liabilities1,642,343 1,657,269 
Commitments and contingencies 

 

Commitments and contingencies
Equity    Equity
Partners' Equity:    
General partner, 1,000,000 units outstanding at September 30, 2017 and December 31, 2016 5,854
 6,485
Limited partners, 5,027,781 and 5,027,781 Class A common units, and 93,528,188 and 95,095,891 Class B common units outstanding at September 30, 2017 and December 31, 2016, respectively 623,977
 728,631
Partners’ Equity:Partners’ Equity:
General partner, 1,100,000 units outstanding at June 30, 2022 and 1,100,000 units at December 31, 2021, respectivelyGeneral partner, 1,100,000 units outstanding at June 30, 2022 and 1,100,000 units at December 31, 2021, respectively4,543 4,539 
Limited partners, 4,761,559 and 4,761,559 Class A common units, and 103,294,792 and 102,984,734 Class B common units outstanding at June 30, 2022 and December 31, 2021, respectivelyLimited partners, 4,761,559 and 4,761,559 Class A common units, and 103,294,792 and 102,984,734 Class B common units outstanding at June 30, 2022 and December 31, 2021, respectively518,081 514,023 
Accumulated other comprehensive loss (20,796) (29,834)Accumulated other comprehensive loss(10,049)(18,773)
Total partners' equity 609,035
 705,282
Total partners’ equityTotal partners’ equity512,575 499,789 
Noncontrolling interests in consolidated partnerships —
 159
Noncontrolling interests in consolidated partnerships— — 
Total equity 609,035
 705,441
Total equity512,575 499,789 
Total liabilities and equity $2,540,817
 $2,525,687
Total liabilities and equity$2,154,918 $2,157,058 
The accompanying notes are an integral part of these consolidated financial statements.

11


TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit data, unaudited)
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Revenues:      
  
Base rentals $80,349
 $79,569
 $241,467
 $227,195
Percentage rentals 3,138
 2,995
 6,798
 7,471
Expense reimbursements 34,180
 33,125
 104,801
 97,121
Management, leasing and other services 588
 806
 1,776
 3,259
Other income 2,510
 2,642
 6,905
 6,229
Total revenues 120,765
 119,137

361,747

341,275
Expenses:        
Property operating 37,571
 37,442
 115,074
 110,328
General and administrative 10,934
 12,128
 33,846
 35,368
Acquisition costs —
 487
 —
 487
Abandoned pre-development costs (99) —
 528
 —
Depreciation and amortization 30,976
 29,205
 95,175
 82,078
Total expenses 79,382
 79,262

244,623

228,261
Operating income 41,383
 39,875

117,124

113,014
Other income (expense):        
Interest expense (16,489) (15,516) (49,496) (44,200)
Loss on early extinguishment of debt (35,626) —
 (35,626) —
Gain on sale of assets —
 1,418
 6,943
 6,305
Gain on previously held interest in acquired joint venture —
 46,258
 —
 95,516
Other non-operating income (expense) 591
 24
 683
 378
Income (loss) before equity in earnings (losses) of unconsolidated joint ventures (10,141) 72,059

39,628

171,013
Equity in earnings (losses) of unconsolidated joint ventures (5,893) 715
 (1,201) 7,680
Net income (loss) (16,034) 72,774

38,427

178,693
Noncontrolling interests in consolidated partnerships —
 (2) —
 (13)
Net income (loss) available to partners (16,034) 72,772

38,427

178,680
Net income (loss) available to limited partners (15,874) 72,052
 38,048
 176,912
Net income (loss) available to general partner $(160) $720

$379

$1,768
         
Basic earnings per common unit:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.77
Diluted earnings per common unit:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.76
         
Distribution declared per common unit $0.3425
 $0.3250
 $1.01
 $0.9350
Three months ended June 30,Six months ended June 30,
 2022202120222021
Revenues:  
Rental revenues$101,409 $96,824 $206,018 $194,291 
Management, leasing and other services1,436 1,359 2,963 2,731 
Other revenues2,993 3,090 5,725 4,945 
Total revenues105,838 101,273 214,706 201,967 
Expenses:
Property operating32,697 31,250 69,455 66,561 
General and administrative19,329 15,700 34,796 32,493 
Depreciation and amortization26,220 27,732 52,463 55,882 
Total expenses78,246 74,682 156,714 154,936 
Other income (expense):
Interest expense(11,576)(13,338)(23,210)(27,700)
Loss on early extinguishment of debt— (14,039)— (14,039)
Other income (expense)2,576 654 2,759 (2,851)
Total other income (expense)(9,000)(26,723)(20,451)(44,590)
Income (loss) before equity in earnings of unconsolidated joint ventures18,592 (132)37,541 2,441 
Equity in earnings of unconsolidated joint ventures2,227 2,728 4,740 4,497 
Net income20,819 2,596 42,281 6,938 
Noncontrolling interests in consolidated partnerships— — — — 
Net income available to partners20,819 2,596 42,281 6,938 
Net income available to limited partners24,706 2,569 41,856 6,864 
Net income available to general partner$(3,887)$27 $425 $74 
Basic earnings per common unit: 
Net income$0.19 $0.02 $0.39 $0.06 
Diluted earnings per common unit:
Net income$0.19 $0.02 $0.38 $0.06 
The accompanying notes are an integral part of these consolidated financial statements.

12


TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)

  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Net income (loss) $(16,034) $72,774
 $38,427
 $178,693
Other comprehensive income:        
Foreign currency translation adjustments 4,737
 (1,731) 8,821
 6,970
Changes in fair value of cash flow hedges 39
 2,228
 217
 (1,601)
Other comprehensive income 4,776
 497
 9,038
 5,369
Comprehensive income (loss) (11,258) 73,271
 47,465
 184,062
Comprehensive income attributable to noncontrolling interests in consolidated partnerships —
 (2) —
 (13)
Comprehensive income (loss) attributable to the Operating Partnership $(11,258) $73,269
 $47,465
 $184,049
Three months ended June 30,Six months ended June 30,
 2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Other comprehensive income:
Foreign currency translation adjustments(2,441)1,365 (1,215)6,004 
Changes in fair value of cash flow hedges2,265 237 9,939 2,235 
Other comprehensive income (loss)(176)1,602 8,724 8,239 
Comprehensive income20,643 4,198 51,005 15,177 
Comprehensive (income) attributable to noncontrolling interests in consolidated partnerships— — — — 
Comprehensive income attributable to the Operating Partnership$20,643 $4,198 $51,005 $15,177 
The accompanying notes are an integral part of these consolidated financial statements.




13

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except unit and per unit data, unaudited)
General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, March 31, 2021$5,077 $499,339 $(21,402)$483,014 $— $483,014 
Net income27 2,569 — 2,596 — 2,596 
Other comprehensive income— — 1,602 1,602 — 1,602 
Compensation under Incentive Award Plan— 2,765 — 2,765 — 2,765 
Issuance of 15,500 common units upon exercise of options— 89 — 89 — 89 
Issuance of 2,810,503 common units— 52,221 — 52,221 — 52,221 
Common distributions ($0.1775 per unit)(195)(18,607)— (18,802)— (18,802)
Balance, June 30, 2021$4,909 $538,376 $(19,800)$523,485 $— $523,485 
General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2020$3,334 $383,588 $(28,039)$358,883 $— $358,883 
Net income74 6,864 — 6,938 — 6,938 
Other comprehensive income— — 8,239 8,239 — 8,239 
Compensation under Incentive Award Plan— 6,674 — 6,674 — 6,674 
Issuance of 15,500 common units upon exercise of options— 89 — 89 — 89 
Grant of 469,675 restricted common share awards by the Company— — — — — — 
Issuance of 9,677,581 common units1,874 179,002 — 180,876 — 180,876 
Withholding of 111,977 common units for employee income taxes— (1,637)— (1,637)— (1,637)
Common distributions ($0.3550 per unit)
(373)(36,204)— (36,577)— (36,577)
Balance, June 30, 2021$4,909 $538,376 $(19,800)$523,485 $— $523,485 

14

  General partnerLimited partnersAccumulated other comprehensive lossTotal partners' equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2015 $5,726
$638,422
$(38,702)$605,446
$586
$606,032
Net income 1,768
176,912
—
178,680
13
178,693
Other comprehensive income —
—
5,369
5,369
—
5,369
Compensation under Incentive Award Plan —
12,556
—
12,556
—
12,556
Issuance of 57,700 common units upon exercise of options —
1,693
—
1,693
—
1,693
Grant of 173,124 restricted common share awards by the Company, net of forfeitures —
—
—
—
—
—
Issuance of 24,040 deferred units —
—
—
—
—
—
Withholding of 66,427 common units for employee income taxes —
(2,164)—
(2,164)—
(2,164)
Contributions from noncontrolling interests —
—
—
—
35
35
Adjustments for noncontrolling interests in consolidated partnerships —
4
—
4
(4)—
Acquisition of noncontrolling interest in other consolidated partnership —
(1,617)—
(1,617)(325)(1,942)
Common distributions ($.935 per common unit) (935)(93,540)—
(94,475)—
(94,475)
Distributions to noncontrolling interests —
—
—
—
(145)(145)
Balance, September 30, 2016 $6,559
$732,266
$(33,333)$705,492
$160
$705,652
        
  General partnerLimited partnersAccumulated other comprehensive lossTotal partners' equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2016 $6,485
$728,631
$(29,834)$705,282
$159
$705,441
Net income 379
38,048
—
38,427
—
38,427
Other comprehensive income —
—
9,038
9,038
—
9,038
Compensation under Incentive Award Plan —
10,891
—
10,891
—
10,891
Issuance of 1,800 common units upon exercise of options —
54
—
54
—
54
Grant of 411,968 restricted common share awards by the Company —
—
—
—
—
—
Repurchase of 1,911,585 units, including transaction costs —
(49,362)—
(49,362)—
(49,362)
Withholding of 69,886 common units for employee income taxes —
(2,436)—
(2,436)—
(2,436)
Acquisition of noncontrolling interest in other consolidated partnership —
—
—
—
(159)(159)
Common distributions ($1.01 per common unit) (1,010)(101,849)—
(102,859)—
(102,859)
Balance, September 30, 2017 $5,854
$623,977
$(20,796)$609,035
$—
$609,035
        
TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except unit and per unit data, unaudited)

General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, March 31, 2022$8,650 $511,800 $(9,873)$510,577 $— $510,577 
Net loss(3,887)24,706 — 20,819 — 20,819 
Other comprehensive loss— — (176)(176)— (176)
Compensation under Incentive Award Plan— 4,299 — 4,299 — 4,299 
Grant of 800 restricted common share awards by the Company— 5 — 5 — 5 
Forfeiture of 13,062 common units— — — — — — 
Withholding of 62,007 common units for employee income taxes— (1,057)— (1,057)— (1,057)
Common distributions ($0.20 per unit)(220)(21,672)— (21,892)— (21,892)
Balance, June 30, 2022$4,543 $518,081 $(10,049)$512,575 $— $512,575 
General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2021$4,539 $514,023 $(18,773)$499,789 $— $499,789 
Net income425 41,856 — 42,281 — 42,281 
Other comprehensive income— — 8,724 8,724 — 8,724 
Compensation under Incentive Award Plan— 7,045 — 7,045 — 7,045 
Issuance of 2,700 common units upon exercise of options— 15 — 15 — 15 
Withholding of 191,978 common units for employee income taxes— (3,203)— (3,203)— (3,203)
Grant of 499,336 restricted common share awards by the Company— — — — — — 
Common distributions ($0.3825 per unit)(421)(41,655)— (42,076)— (42,076)
Balance, June 30, 2022$4,543 $518,081 $(10,049)$512,575 $— $512,575 
The accompanying notes are an integral part of these consolidated financial statements.

15


TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
  Nine months ended September 30,
  2017 2016
OPERATING ACTIVITIES  
  
Net income $38,427
 $178,693
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 95,175
 82,078
Amortization of deferred financing costs 2,640
 2,350
Gain on sale of assets (6,943) (6,305)
Gain on previously held interest in acquired joint venture —
 (95,516)
Loss on early extinguishment of debt 35,626
 —
Equity in (earnings) losses of unconsolidated joint ventures 1,201
 (7,680)
Equity-based compensation expense 10,114
 11,815
Amortization of debt (premiums) and discounts, net 363
 1,160
Amortization (accretion) of market rent rate adjustments, net 2,107
 2,087
Straight-line rent adjustments (4,749) (5,092)
Distributions of cumulative earnings from unconsolidated joint ventures 8,128
 10,571
Changes in other assets and liabilities:    
Other assets (1,110) 780
Accounts payable and accrued expenses 551
 2,782
Net cash provided by operating activities 181,530
 177,723
INVESTING ACTIVITIES    
Additions to rental property (132,612) (112,213)
Acquisitions of interests in unconsolidated joint ventures, net of cash acquired —
 (45,219)
Additions to investments in unconsolidated joint ventures (4,033) (27,851)
Net proceeds from sale of assets 39,213
 28,706
Change in restricted cash —
 118,370
Additions to non-real estate assets (8,384) (8,982)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 16,019
 14,193
Additions to deferred lease costs (4,218) (5,273)
Other investing activities 4,963
 (1,221)
Net cash used in investing activities (89,052) (39,490)
FINANCING ACTIVITIES    
Cash distributions paid (102,859) (115,665)
Proceeds from revolving credit facility 543,866
 733,450
Repayments of revolving credit facility (456,666) (727,750)
Proceeds from notes, mortgages and loans 299,460
 338,270
Repayments of notes, mortgages and loans (302,240) (329,603)
Payment of make-whole premium related to early extinguishment of debt (34,143) —
Repayment of deferred financing obligation —
 (28,388)
Repurchase of units, including transaction costs (49,362) —
Employee income taxes paid related to shares withheld upon vesting of equity awards (2,436) (2,164)
Additions to deferred financing costs (2,900) (4,243)
Proceeds from exercise of options 54
 1,693
Proceeds from other financing activities 12,054
 35
Payment for other financing activities (782) (99)
Net cash used in financing activities (95,954) (134,464)
Effect of foreign currency on cash and cash equivalents (54) 532
Net increase (decrease) in cash and cash equivalents (3,530) 4,301
Cash and cash equivalents, beginning of period 12,199
 21,552
Cash and cash equivalents, end of period $8,669
 $25,853
Six months ended June 30,
 20222021
OPERATING ACTIVITIES  
Net income$42,281 $6,938 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization52,463 55,882 
Amortization of deferred financing costs1,541 2,320 
Loss on early extinguishment of debt— 14,039 
Equity in earnings of unconsolidated joint ventures(4,740)(4,497)
Equity-based compensation expense6,959 6,608 
Amortization of debt (premiums) and discounts, net241 210 
Amortization (accretion) of market rent rate adjustments, net314 25 
Straight-line rent adjustments1,035 1,521 
Distributions of cumulative earnings from unconsolidated joint ventures4,775 4,774 
Other non-cash(2,418)3,638 
Changes in other assets and liabilities:
Other assets7,194 12,454 
Accounts payable and accrued expenses(20,449)(12,633)
Net cash provided by operating activities89,196 91,279 
INVESTING ACTIVITIES
Additions to rental property(25,717)(11,836)
Additions to investments in unconsolidated joint ventures— (7,000)
Net proceeds from sale of real estate assets— 8,129 
Net proceeds on sale of non-real estate assets14,610 — 
Additions to non-real estate assets(4,176)(781)
Distributions in excess of cumulative earnings from unconsolidated joint ventures6,536 13,364 
Additions to deferred lease costs(1,076)(4,562)
Other investing activities1,728 6,695 
Net cash provided by (used in) investing activities(8,095)4,009 
FINANCING ACTIVITIES
Cash distributions paid(42,076)(36,577)
Proceeds from notes, mortgages and loans— — 
Repayments of notes, mortgages and loans(2,180)(201,861)
Payment of make-whole premium related to early extinguishment of debt— (12,954)
Employee income taxes paid related to shares withheld upon vesting of equity awards(3,203)(1,637)
Additions to deferred financing costs— (123)
Proceeds from exercise of options15 89 
Proceeds from the Company’s common share offering— 180,876 
Payment for other financing activities(574)(574)
Net cash provided by (used in) financing activities(48,018)(72,761)
Effect of foreign currency on cash and cash equivalents(27)(73)
Net increase (decrease) in cash and cash equivalents33,056 22,454 
Cash and cash equivalents, beginning of period161,152 84,750 
Cash and cash equivalents, end of period$194,208 $107,204 
The accompanying notes are an integral part of these consolidated financial statements.


16

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. Business

Tanger Factory Outlet Centers, Inc. and subsidiaries is one of the largest owners and operators of outlet centers in the United States and Canada. We are a fully-integrated, self-administered and self-managed real estate investment trust ("REIT"(“REIT”) which, through our controlling interest in the Operating Partnership, focuses exclusively on developing, acquiring, owning, operating and managing outlet shopping centers. As of SeptemberJune 30, 2017,2022, we owned and operated 3530 consolidated outlet centers, with a total gross leasable area of approximately 12.611.5 million square feet. We also had partial ownership interests in 86 unconsolidated outlet centers totaling approximately 2.42.1 million square feet, including 42 outlet centers in Canada.


Our outlet centers and other assets are held by, and all of our operations are conducted by, Tanger Properties Limited Partnership and subsidiaries. Accordingly, the descriptions of our business, employees and properties are also descriptions of the business, employees and properties of the Operating Partnership. Unless the context indicates otherwise, the term "Company"“Company” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating Partnership",“Operating Partnership” refers to Tanger Properties Limited Partnership and subsidiaries. The terms "we"“we”, "our"“our” and "us"“us” refer to the Company or the Company and the Operating Partnership together, as the text requires.


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 throughas its two wholly-owned subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust is the sole general partner of the Operating Partnership.partner. Tanger LP Trust holds a limited partnership interest. As of SeptemberJune 30, 2017,2022, the Company throughand its ownership of Tanger GP Trust and Tanger LP Trust,wholly-owned subsidiaries owned 94,528,188104,394,792 units of the Operating Partnership and other limited partners (the "Non-Company LPs"“Non-Company LPs”) collectively owned 5,027,7814,761,559 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'sCompany’s common shares, subject to certain limitations to preserve the Company'sCompany’s REIT status. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.


2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited consolidated financial statements included herein have been prepared pursuant to accounting principles generally accepted in the United States of America (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto of the Company'sCompany’s and the Operating Partnership'sPartnership’s combined Annual Report on Form 10-K for the year ended December 31, 2016.2021. The December 31, 20162021 balance sheet data in this Form 10-Q was derived from audited financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of AmericaU.S. GAAP have been condensed or omitted pursuant to the SEC's rules and regulations of the Securities and Exchange Commission (the “SEC”), although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods have been made. The results of interim periods are not necessarily indicative of the results for a full year.


The Company currently consolidates the Operating Partnership because it has (1) the power to direct the activities of the Operating Partnership that most significantly impact the Operating Partnership’s economic performance and (2) the obligation to absorb losses and the right to receive the residual returns of the Operating Partnership that could be potentially significant.





17

We consolidate properties that are wholly ownedwholly-owned and properties where we own less than 100% but we control.control such properties. Control is determined using an evaluation based on accounting standards related to the consolidation of voting interest entities and variable interest entities ("VIE"(“VIE”). For joint ventures that are determined to be a VIE, we consolidate the entity where we are deemed to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct the activities of the VIE that most significantly impact the entity'sentity’s economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Our determination of the primary beneficiary considers all relationships between us and the VIE, including management agreements and other contractual arrangements.


Investments in real estate joint ventures that we do not control but may exercise significant influence on are accounted for using the equity method of accounting. These investments are recorded initially at cost and subsequently adjusted for our equity in the joint venture'sventure’s net income or loss, cash contributions, distributions and other adjustments required under the equity method of accounting.


For certain investments in real estate joint ventures, we record our equity in the venture'sventure’s net income or loss under the hypothetical liquidation at book value (“HLBV”) method of accounting due to the structures and the preferences we receive on the distributions from our joint ventures pursuant to the respective joint venture agreements for those joint ventures. Under this method, we recognize income and loss in each period based on the change in liquidation proceeds we would receive from a hypothetical liquidation of our investment based on depreciated book value. Therefore, income or loss may be allocated disproportionately as compared to the ownership percentages due to specified preferred return rate thresholds and may be more or less than actual cash distributions received and more or less than what we may receive in the event of an actual liquidation.


We separately report investments in joint ventures for which accumulated distributions have exceeded investments in, and our share of net income or loss of, the joint ventures within other liabilities in the consolidated balance sheets because we are committed to provide further financial support to these joint ventures. The carrying amount of our investments in the Charlotte, Columbus, Galveston/Houston, and Galveston/HoustonNational Harbor joint ventures are less than zero because of financing or operating distributions that were greater than net income, as net income includes non-cash charges for depreciation and amortization.


"“Noncontrolling interests in the Operating Partnership"Partnership” reflects the Non-Company LP'sLPs’ percentage ownership of the Operating Partnership'sPartnership’s units. "Noncontrolling“Noncontrolling interests in other consolidated partnerships"partnerships” consist of outside equity interests in partnerships or joint ventures not wholly ownedwholly-owned by the Company or the Operating Partnership that are consolidated with the financial results of the Company and Operating Partnership because the Operating Partnership exercises control over the entities that own the properties. Noncontrolling interests are initially recorded in the consolidated balance sheets at fair value based upon purchase price allocations. Income is allocated to the noncontrolling interests based on the allocation provisions within the partnership or joint venture agreements.




Accounts Receivable

Individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are written-off as an adjustment to rental revenue. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further we assess whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends including discussions with tenants for potential lease amendments. Our estimate of the collectability of accrued rents and accounts receivable is based on the best information available to us at the time of preparing the financial statements. Straight-line rent adjustments recorded as a receivable in prepaids and other assets on the consolidated balance sheets was approximately $51.9 million as of June 30, 2022.

Impairment of Long-Lived Assets

Rental property held and used by us is reviewed for impairment in the event that facts and circumstances indicate that the carrying amount of an asset may not be recoverable. In such an event, we compare the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount, and if less, recognize an impairment loss in an amount by which the carrying amount exceeds its fair value.

18

If economic and market conditions deteriorate beyond our current expectations, as a result of the ongoing COVID-19 pandemic (“COVID-19”) or other macroeconomic factors, or if our expected holding periods for assets change, subsequent tests for impairment could result in additional impairment charges in the future. For example, the Foxwoods outlet center, which is part of a casino property, continues to face leasing challenges that could lead to further declines in occupancy, rental revenues and cash flows in the future. Such challenges, or a change in our expected holding period, could result in additional impairment charges recognized for the Foxwoods property. We can provide no assurance that material impairment charges with respect to our properties will not occur in future periods.

3. Disposition of PropertyProperties


The following table sets forth certain summarized information regarding the propertyproperties sold during the ninesix months ended SeptemberJune 30, 2017:2022 and June 30, 2021:
Property (1)
LocationDate SoldSquare Feet
(in 000’s)		Net Sales Proceeds
(in 000’s)		Gain on Sale
(in 000’s)
2021 Disposition:
JeffersonvilleJeffersonville, OhioJanuary 2021412 $8,100 $— 
Property Location Date Sold 
Square Feet
(in 000's)
 
Net Sales Proceeds
(in 000's)
 Gain on Sale(in 000's)
Westbrook Westbrook, CT May 2017 290
 $39,212
 $6,943

(1)The rental propertyproperties sold did not meet the criteria for reportingto be reported as discontinued operations, thus its results of operations have remained in continuing operations.



4. Developments of Consolidated Outlet Centers


The table below sets forth our consolidated outlet centers under development as of SeptemberJune 30, 2017:2022:
ProjectApproximate Square Feet
(in 000’s)		Costs Incurred to Date
(in millions)		Projected Opening
New Development:
Nashville290 $18.3 Fall 2023
Project Approximate square feet
(in 000's)		 Costs Incurred to Date
(in millions)		 Projected Opening
New development:      
Fort Worth 352
 $74.7
 October 2017


Lancaster Expansion

In September 2017,During the second quarter of 2022, we opened a 123,000 square foot expansionpurchased land in the Nashville, Tennessee area for approximately $8.8 million and began construction on the development of our outlet center in Lancaster, Pennsylvania.

Fort Worth

In October 2017, we opened a 352,000 square foot wholly-owned outlet center center in the greater Fort Worth, Texas area. The outlet center is located within the 279-acre Champions Circle mixed-use development adjacent to Texas Motor Speedway.center.

19
Interest Costs Capitalized


Interest costs capitalized for development activities, including development in our unconsolidated joint ventures, was $798,000 and $2.0 million for the three and nine months ended September 30, 2017, respectively, and $574,000 and $1.7 million for the three and nine months ended September 30, 2016, respectively.



5. Investments in Unconsolidated Real Estate Joint Ventures

The equity method of accounting is used to account for each of the individual joint ventures. We have an ownership interest in the following unconsolidated real estate joint ventures:

As of June 30, 2022
Joint VentureOutlet Center LocationOwnership %Square Feet
(in 000’s)		Carrying Value of Investment (in millions)
Total Joint Venture Debt, Net
(in millions)(1)
Investments included in investments in unconsolidated joint ventures:
RioCan CanadaVarious50.0 %665 $80.0 — 
$80.0 
Investments included in other liabilities:
Columbus(2)
Columbus, OH50.0 %355 $(1.2)$70.9 
Charlotte(2)
Charlotte, NC50.0 %399 (17.7)99.6 
National Harbor(2)
National Harbor, MD50.0 %341 (12.3)94.6 
Galveston/Houston (2)
Texas City, TX50.0 %353 (15.0)64.4 
$(46.2)
As of December 31, 2021
Joint VentureOutlet Center LocationOwnership %Square Feet
(in 000’s)		Carrying Value of Investment (in millions)
Total Joint Venture Debt, Net
(in millions)(1)
Investments included in investments in unconsolidated joint ventures:
ColumbusColumbus, OH50.0 %355 $0.2 $70.9 
RioCan CanadaVarious50.0 %665 82.4 — 
$82.6 
Investments included in other liabilities:
Charlotte(2)
Charlotte, NC50.0 %399 $(16.2)$99.6 
National Harbor(2)
National Harbor, MD50.0 %341 (11.2)94.5 
Galveston/Houston (2)
Texas City, TX50.0 %353 (14.0)64.4 
$(41.4)
As of September 30, 2017
Joint Venture Outlet Center Location Ownership % 
Square Feet
(in 000's)
 Carrying Value of Investment (in millions) 
Total Joint Venture Debt, Net
(in millions)(1)
Columbus Columbus, OH 50.0% 355
 $6.8
 $84.4
National Harbor National Harbor, MD 50.0% 341
 2.4
 86.4
RioCan Canada Various 50.0% 924
 116.6
 11.4
Investments included in total assets     $125.8
 

           
Charlotte(3)
 Charlotte, NC 50.0% 398
 $(3.6) $89.8
Galveston/Houston (2)(3)
 Texas City, TX 50.0% 353
 (12.5) 79.4
Investments included in other liabilities

     $(16.1) 

(1)Net of debt origination costs of $1.0 million as of June 30, 2022 and $1.0 million as of December 31, 2021.

(2)The negative carrying value is due to distributions exceeding contributions and increases or decreases from our equity in earnings of the joint venture.
As of December 31, 2016
Joint Venture Outlet Center Location Ownership % 
Square Feet
(in 000's)
 Carrying Value of Investment (in millions) 
Total Joint Venture Debt, Net
(in millions)(1)
Columbus Columbus, OH 50.0% 355
 $6.7
 $84.2
National Harbor National Harbor, MD 50.0% 341
 4.1
 86.1
RioCan Canada Various 50.0% 901
 117.3
 11.1
Investments included in total assets     $128.1
 

           
Charlotte(3)
 Charlotte, NC 50.0% 398
 $(2.5) $89.7
Galveston/Houston (2)(3)
 Texas City, TX 50.0% 353
 (3.8) 64.9
Investments included in other liabilities     $(6.3) 

(1)Net of debt origination costs and including premiums of $1.6 million and $1.6 million as of September 30, 2017 and December 31, 2016, respectively.
(2)In July 2017, the joint venture amended and restated the initial construction loan to increase the amount available to borrow from $70.0 million to $80.0 million and extended the maturity date until July 2020 with two one-year options. The amended and restated loan also changed the interest rate from LIBOR + 1.50% to an interest rate of LIBOR + 1.65%. At the closing of the amendment, the joint venture distributed approximately $14.5 million equally between the partners.
(3)The negative carrying value is due to the distributions of proceeds from mortgage loans and quarterly distributions of excess cash flow exceeding the original contributions from the partners.




Fees we received for various services provided to our unconsolidated joint ventures were recognized in management, leasing and other services as follows (in thousands):
Three months endedSix months ended
June 30,June 30,
 2022202120222021
Fee:  
Management and marketing$552 $537 $1,088 $1,045 
Leasing and other fees— 103 35 159 
Expense reimbursements from unconsolidated joint ventures884 719 1,840 1,527 
Total Fees$1,436 $1,359 $2,963 $2,731 


20
  Three months ended
Nine months ended
  September 30,
September 30,
  2017 2016
2017
2016
Fee:      
  
Management and marketing $564
 $656
 1,676
 2,199
Development and leasing 20
 65
 $87
 $611
Loan guarantee 4
 85
 13
 449
Total Fees $588
 $806
 $1,776
 $3,259


Our investments in real estate joint ventures are reduced by the percentage of the profits earned for leasing and development services associated with our ownership interest in each joint venture. Our carrying value of investments in unconsolidated joint ventures differs from our share of the assets reported in the "Summary“Condensed Combined Balance Sheets - Unconsolidated Joint Ventures"Ventures” shown below due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis (totaling $3.7$3.3 million for both the period ended Septemberand $3.4 million as of June 30, 20172022 and the period ended December 31, 2016)2021, respectively) are amortized over the various useful lives of the related assets.


RioCan Canada


Rental property held and used by ourIn March 2021, the RioCan joint venture is reviewedclosed on the sale of its outlet center in Saint-Sauveur, for impairment in the event that facts and circumstances indicate the carrying amountnet proceeds of an asset may not be recoverable. In such an event, the estimated future undiscounted cash flows associated with the asset is compared to the asset's carrying amount, and if less, we recognize an impairment loss in an amount by which the carrying amount exceeds its fair value.

During the third quarter 2017, the joint venture determined for its Bromont and Saint Sauveur, Quebec outlet centers that the estimated future undiscounted cash flows of that property did not exceed the property's carrying value based on our expectations of the future performance of the centers. Therefore, the joint venture recorded a $18.0 million non-cash impairment charge in its statement of operations, which equaled the excess of the properties carrying value over its fair value. The fair value was determined using a market approach considering the prevailing market income capitalization rates for similar assets.approximately $9.4 million. Our share of the proceeds was approximately $4.7 million. As a result of this impairmenttransaction, we recorded a loss on the sale of $3.7 million. This includes a $3.6 million charge $9.0 million, wasrelated to the foreign currency effect of the sale recorded in equityother income (expense), which had been previously recorded in earnings of unconsolidated joint ventures in our consolidated statement of operations.other comprehensive income.





Condensed combined summary financial information of unconsolidated joint ventures accounted for using the equity method is as follows (in thousands):

Condensed Combined Balance Sheets - Unconsolidated Joint VenturesJune 30, 2022December 31, 2021
Assets  
Land$83,641 $83,568 
Buildings, improvements and fixtures465,644 467,918 
Construction in progress231 744 
549,516 552,230 
Accumulated depreciation(175,431)(166,096)
Total rental property, net374,085 386,134 
Cash and cash equivalents14,856 19,030 
Deferred lease costs and other intangibles, net3,190 3,517 
Prepaids and other assets10,432 13,109 
Total assets$402,563 $421,790 
Liabilities and Owners’ Equity  
Mortgages payable, net$329,535 $329,460 
Accounts payable and other liabilities13,128 15,231 
Total liabilities342,663 344,691 
Owners’ equity59,900 77,099 
Total liabilities and owners’ equity$402,563 $421,790 
21

Condensed Combined Balance Sheets - Unconsolidated Joint Ventures September 30, 2017 December 31, 2016
Assets  
  
Land $95,998
 $88,015
Buildings, improvements and fixtures 514,865
 503,548
Construction in progress, including land under development 2,849
 13,037
  613,712
 604,600
Accumulated depreciation (88,163) (67,431)
Total rental property, net 525,549
 537,169
Cash and cash equivalents 23,769
 27,271
Deferred lease costs and other intangibles, net 11,436
 13,612
Prepaids and other assets 16,262
 12,567
Total assets $577,016
 $590,619
Liabilities and Owners' Equity  
  
Mortgages payable, net $351,322
 $335,971
Accounts payable and other liabilities 13,463
 20,011
Total liabilities 364,785
 355,982
Owners' equity 212,231
 234,637
Total liabilities and owners' equity $577,016
 $590,619
 Three months endedSix months ended
Condensed Combined Statements of Operations - Unconsolidated Joint VenturesJune 30,June 30,
2022202120222021
Revenues$21,666 $22,601 $43,507 $43,594 
Expenses: 
Property operating8,435 8,448 16,738 16,862 
General and administrative40 58 133 86 
Depreciation and amortization5,540 5,763 11,021 11,664 
Total expenses14,015 14,269 27,892 28,612 
Other income (expense):
Interest expense(3,158)(2,910)(6,073)(5,855)
Gain on sale of assets— — — 503 
Other income3 96 6 154 
Total other expense(3,155)(2,814)(6,067)(5,198)
Net income$4,496 $5,518 $9,548 $9,784 
The Company and Operating Partnership’s share of:  
Net income$2,227 $2,728 $4,740 $4,497 
Depreciation and amortization (real estate related)$2,791 $2,913 $5,545 $5,909 





  Three months ended Nine months ended
Condensed Combined Statements of Operations September 30, September 30,
 - Unconsolidated Joint Ventures 2017 2016 2017 2016
Revenues $25,241
 $25,654
 $72,588
 $82,693
Expenses:      
  
Property operating 8,987
 9,103
 27,242
 30,499
General and administrative 72
 95
 289
 390
Asset impairment 18,042
 5,838
 18,042
 5,838
Depreciation and amortization 6,998
 8,001
 21,453
 26,208
Total expenses 34,099
 23,037
 67,026
 62,935
Operating income (loss) (8,858) 2,617
 5,562
 19,758
Interest expense (2,776) (1,925) (7,497) (7,161)
Other non-operating income 20
 2
 23
 5
Net income (loss) $(11,614) $694
 $(1,912) $12,602
         
The Company and Operating Partnership's share of:  
  
Net income (loss) $(5,893) $715
 $(1,201) $7,680
Depreciation and amortization expense (real estate related) $3,583
 $4,325
 $10,971
 $15,472




6. Debt Guaranteed by the Company


All of the Company'sCompany’s debt is held by the Operating Partnership and its consolidated subsidiaries.


The Company guarantees the Operating Partnership'sPartnership’s obligations with respect to its unsecured lines of credit which have a total borrowing capacity of $520.0 million.million as of June 30, 2022. The Company also guarantees the Operating Partnership'sPartnership’s unsecured term loan.


The Operating Partnership had the following principal amounts outstanding on the debt guaranteed by the Company (in thousands):
As of
June 30, 2022December 31, 2021
Unsecured lines of credit$— $— 
Unsecured term loan$300,000 $300,000 

22
  September 30, 2017 December 31, 2016
Unsecured lines of credit $148,200
 $61,000
Unsecured term loan $325,000
 $325,000



7. Debt of the Operating Partnership


The debt of the Operating Partnership consisted of the following (in thousands):
As ofAs of
June 30, 2022December 31, 2021
Stated Interest Rate(s)Maturity DatePrincipal
Book Value(1)
Principal
Book Value(1)
Senior, unsecured notes: 
Senior notes3.125 %September 2026$350,000 $347,611 $350,000 $347,329 
Senior notes3.875 %July 2027300,000 297,941 300,000 297,742 
Senior notes2.750 %September 2031400,000 391,534 400,000 391,110 
Mortgages payable:
Atlantic City (2) (3)
6.44 %-7.65%December 2024- December 202619,369 20,034 21,550 22,387 
     SouthavenLIBOR+1.80%April 202340,144 40,112 40,144 40,087 
Unsecured term loanLIBOR+1.25%April 2024300,000 298,783 300,000 298,421 
Unsecured lines of creditLIBOR+1.20%July 2025— — — — 
 $1,409,513 $1,396,015 $1,411,694 $1,397,076 
      As of As of
      September 30, 2017 December 31, 2016
  Stated Interest Rate(s) Maturity Date Principal 
Book Value(1)
 Principal 
Book Value(1)
Senior, unsecured notes:    
      
Senior notes 6.125% June 2020 $—
 $—
 $300,000
 $298,226
Senior notes 3.875% December 2023 250,000
 245,882
 250,000
 245,425
Senior notes 3.750% December 2024 250,000
 247,321
 250,000
 247,058
Senior notes 3.125% September 2026 350,000
 344,993
 350,000
 344,600
Senior notes 3.875% July 2027 300,000
 295,985
 —
 —
             
Mortgages payable:            
Atlantic City (2)
 5.14%-7.65%
 November 2021- December 2026 38,230
 40,747
 40,471
 43,286
     Foxwoods LIBOR + 1.55%
 December 2017 70,250
 70,174
 70,250
 69,902
     Southaven LIBOR + 1.75%
 April 2018 60,000
 59,855
 59,277
 58,957
Unsecured term loan LIBOR + 0.95%
 April 2021 325,000
 323,011
 325,000
 322,410
Unsecured lines of credit LIBOR + 0.90%
 October 2019 148,200
 146,013
 61,000
 58,002
      $1,791,680
 $1,773,981
 $1,705,998
 $1,687,866
(1)Including premiums and net of debt discount and debt origination costs.
(1)Including premiums and net of debt discount and debt origination costs.
(2)The effective interest rate assigned during the purchase price allocation to the Atlantic City mortgages assumed during the acquisition in 2011 was 5.05%.

(2)The effective interest rate assigned during the purchase price allocation to the Atlantic City mortgages assumed during the acquisition in 2011 was 5.05%.
(3)Principal and interest due monthly with remaining principal due at maturity.

Certain of our properties, which had a net book value of approximately $314.5$147.5 million at SeptemberJune 30, 2017,2022, serve as collateral for mortgages payable. We maintainAs of June 30, 2022, we maintained unsecured lines of credit that provideprovided for borrowings of up to $520.0 million. The unsecured lines of credit includeas of June 30, 2022 included a $20.0 million liquidity line and a $500.0 million syndicated line. The syndicated line may be increased up to $1.0$1.2 billion through an accordion feature in certain circumstances. As of September 30, 2017, letters of credit totaling approximately $5.5 million were issued under the lines of credit.




We provide guarantees to lenders for our joint ventures, which include standard non-recourse carve out indemnifications for losses arising from items such as but not limited to fraud, physical waste, payment of taxes, environmental indemnities, misapplication of insurance proceeds or security deposits and failure to maintain required insurance. For construction and term loans, we may include a guaranty of completion as well as a principal guaranty ranging from 5%0% to 100%17% of principal. The principal guarantees include terms for release or reduction based upon satisfactory completion of construction and performance targets including occupancy thresholds and minimum debt service coverage tests. As of SeptemberJune 30, 2017,2022, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $32.8$21.9 million.


The unsecured lines of credit and senior unsecured notes include covenants that 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% of funds from operations on a cumulative basis. As of SeptemberJune 30, 2017,2022, we believe we were in compliance with all of our debt covenants.


$300.0 Million Unsecured Senior Notes due 2027

23
In July 2017, we completed an underwritten public offering of $300.0 million of 3.875% senior notes due 2027 (the "2027 Notes"). The 2027 Notes priced at 99.579% of the principal amount to yield 3.926% to maturity. The 2027 Notes pay interest semi-annually at a rate of 3.875% per annum and mature on July 15, 2027. The estimated net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $295.9 million. In August 2017, we used the net proceeds from the sale of the 2027 Notes, together with borrowings under our unsecured lines of credit, to redeem all of our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par plus a “make-whole” premium of approximately $34.1 million. In addition, we wrote off approximately $1.5 million of unamortized debt discount and debt origination costs related to the 2020 Notes.


Debt Maturities


Maturities of the existing long-term debt as of SeptemberJune 30, 20172022 for the next five years and thereafter are as follows (in thousands):
Calendar YearAmount
For the remainder of 2022$2,260 
202344,917 
2024305,130 
20251,501 
2026355,705 
Thereafter700,000 
Subtotal1,409,513 
Net discount and debt origination costs(13,498)
Total$1,396,015 
Calendar Year Amount
2017 $71,017
2018 63,183
2019 151,569
2020 3,566
2021 330,793
Thereafter 1,171,552
Subtotal 1,791,680
Net discount and debt origination costs (17,699)
Total $1,773,981
We have considered our short-term (one year or less from the date of filing these financial statements) liquidity needs and the adequacy of our estimated cash flows from operating activities and other financing sources to meet these needs. These other sources include but are not limited to: existing cash, ongoing relationships with certain financial institutions, our ability to sell debt or issue equity subject to market conditions and proceeds from the potential sale of non-core assets. We believe that we have access to the necessary financing to fund our short-term liquidity needs.
 

24



8. Derivative Financial Instruments


The following table summarizes the terms and fair values of our derivative financial instruments, as well as their classifications within the consolidated balance sheets (notional amounts and fair values in thousands):

Fair Value
Effective DateMaturity DateNotional AmountBank Pay RateCompany Fixed Pay RateJune 30, 2022December 31, 2021
Assets (Liabilities)(1):
Interest rate swaps:
July 1, 2019February 1, 2024$25,000 1 month LIBOR1.75 %$525 $(459)
January 1, 2021February 1, 2024150,000 1 month LIBOR0.60 %5,847 828 
January 1, 2021February 1, 2024100,000 1 month LIBOR0.22 %4,476 1,331 
March 1, 2021February 1, 202425,000 1 month LIBOR0.24 %1,117 326 
Total$11,965 $2,026 
(1)Asset balances are recorded in prepaids and other assets on the consolidated balance sheets and liabilities are recorded in other liabilities on the consolidated balance sheets. 
          Fair Value
Effective Date Maturity Date Notional Amount Bank Pay Rate Company Fixed Pay Rate September 30, 2017 December 31, 2016
Assets (Liabilities):            
November 14, 2013 August 14, 2018 $50,000
 1 month LIBOR 1.3075% $52
 $(119)
November 14, 2013 August 14, 2018 50,000
 1 month LIBOR 1.2970% 56
 (110)
November 14, 2013 August 14, 2018 50,000
 1 month LIBOR 1.3025% 54
 (115)
April 13, 2016 January 1, 2021 50,000
 1 month LIBOR 1.0390% 1,147
 1,227
April 13, 2016 January 1, 2021 50,000
 1 month LIBOR 1.0395% 1,146
 1,226
April 13, 2016 January 1, 2021 50,000
 1 month LIBOR 1.0400% 1,145
 1,222
April 13, 2016 January 1, 2021 25,000
 1 month LIBOR 0.9915% 611
 662
Total   $325,000
     $4,211
 $3,993


The derivative financial instruments are comprised of interest rate swaps, which are designated and qualify as cash flow hedges, each with a separate counterparty. We do not use derivatives for trading or speculative purposes and currently do not have any derivatives that are not designated as hedges.


The effective portion of changesChanges in the fair value of derivatives designated and qualifying as cash flow hedges isare recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivative, if significant, is recognized directly in earnings. For the three and nine months ended September 30, 2017 and 2016, the ineffective portion was not significant.


The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements (in thousands):
Three months ended June 30,Six months ended June 30,
2022202120222021
Interest Rate Swaps:
Amount of gain (loss) recognized in other comprehensive income (loss)$2,265 $237 $9,939 $2,235 

25
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Interest Rate Swaps (Effective Portion): 
 
    
Amount of gain (loss) recognized in OCI on derivative $39
 $2,228
 $217
 $(1,601)


9. Fair Value Measurements


Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
TierDescription
Level 1Observable inputs such as quoted prices in active markets
Level 2Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions



Fair Value Measurements on a Recurring Basis


The following table sets forth our assets and liabilities that are measured at fair value within the fair value hierarchy (in thousands):
Level 1Level 2Level 3
Quoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Observable InputsSignificant Unobservable Inputs
Total
Fair value as of June 30, 2022:
Assets:
Short-term government securities (cash and cash equivalents)
$185,803 $185,803 $— $— 
Interest rate swaps (prepaids and other assets)11,965 — 11,965 — 
Total assets$197,768 $185,803 $11,965 $— 
Level 1Level 2Level 3
Quoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Observable InputsSignificant Unobservable Inputs
Total
Fair value as of December 31, 2021:
Asset:
Short-term government securities (cash and cash equivalents)
$158,197 $158,197 $— $— 
Interest rate swaps (prepaids and other assets)$2,485 $— $2,485 $— 
Total assets$160,682 $158,197 $2,485 $— 
Liabilities:
Interest rate swaps (other liabilities)$459 $— $459 $— 
Total liabilities$459 $— $459 $— 

Short-term government securities

Short-term government securities are highly liquid investments, which are classified as Level 1 in the fair value hierarchy because they are valued using quoted market prices in an active market.


26

    Level 1 Level 2 Level 3
    Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Observable Inputs Significant Unobservable Inputs
  Total   
Fair value as of September 30, 2017:        
Asset:        
Interest rate swaps (prepaids and other assets) $4,211
 $—
 $4,211
 $—
Total assets $4,211
 $—
 $4,211
 $—
Interest rate swaps

    Level 1 Level 2 Level 3
    Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Observable Inputs Significant Unobservable Inputs
  Total   
Fair value as of December 31, 2016:        
Asset:        
Interest rate swaps (prepaids and other assets) $3,993
 $—
 $3,993
 $—
Total assets $3,993
 $—
 $3,993
 $—


Fair values of interest rate swaps are approximatedestimated using Level 2 inputs based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well recognized financial principles including counterparty risks, credit spreads and interest rate projections, as well as reasonable estimates about relevant future market conditions.


Other Fair Value Disclosures

The estimated fair value within the fair value hierarchy and recorded value of our debt consisting of senior unsecured notes, unsecured term loans, secured mortgages and unsecured lines of credit were as follows (in thousands):

June 30, 2022December 31, 2021
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities$— $— 
Level 2 Significant Observable Inputs911,714 1,079,234 
Level 3 Significant Unobservable Inputs360,442 366,103 
Total fair value of debt$1,272,156 $1,445,337 
Recorded value of debt$1,396,015 $1,397,076 
  September 30, 2017 December 31, 2016
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities $—
 $—
Level 2 Significant Observable Inputs 1,153,778
 1,137,976
Level 3 Significant Unobservable Inputs 647,877
 566,668
Total fair value of debt $1,801,655
 $1,704,644
     
Recorded value of debt $1,773,981
 $1,687,866


Our senior unsecured notes are publicly-traded which provides quoted market rates. However, due to the limited trading volume of these notes, we have classified these instruments as Level 2 in the hierarchy. Our other debt is classified as Level 3 given the unobservable inputs utilized in the valuation. Our unsecured term loan, unsecured lines of credit and variable interest rate mortgages are all LIBOR based instruments. When selecting the discount rates for purposes of estimating the fair value of these instruments, we evaluated the original credit spreads and do not believe that the use of them differs materially from current credit spreads for similar instruments and therefore the recorded values of these debt instruments is considered their fair value.


The carrying values of cash and cash equivalents, receivables, accounts payable, accrued expenses and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments.


























27

10. Shareholders’ Equity of the Company

Dividend Declaration

In April 2022, the Company's Board of Directors declared a $0.20 cash dividend per common share payable on May 13, 2022 to each shareholder of record on April 29, 2022, and in its capacity as General Partner of the Operating Partnership a $0.20 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

At-the-Market Offering

Under our at-the-market share offering program (“ATM Offering”), which commenced February 2021, we may offer and sell our common shares, $0.01 par value per share, 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. 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 funding. We currently intend to use the net proceeds from the sale of shares pursuant to the ATM Offering for working capital and general corporate purposes. As of June 30, 2022, we had approximately $60.1 million remaining available for sale under the ATM Offering program.

The following table sets forth information regarding settlements under our ATM offering program:
Three months ended June 30,Six months ended June 30,
2022202120222021
Number of common shares settled during the period (1)
— 2,810,503 — 9,677,581 
Average price per share (1)
$— $18.85 $— $18.97 
Aggregate gross proceeds (in thousands)$— $52,977 $— $183,615 
Aggregate net proceeds after commissions and fees (in thousands) (1)
$— $52,221 $— $180,876 
(1)In July 2021, we had an additional 331,682 shares settle at an average price per share of $18.85 with aggregate net proceeds after commissions and fees of $6.2 million.

Share Repurchase Program


In May 2017, we announced that our2021, the Company’s Board of Directors authorized the repurchase of up to $125.0$80.0 million of the Company’s outstanding shares through May 31, 2023. This authorization replaced a previous repurchase authorization for approximately $80.0 million that expired in May 2021. In June 2020, we amended our outstanding common shares as market conditions warrant overdebt agreements primarily to improve future covenant flexibility and such amendments included a period commencingprohibition on May 19, 2017share repurchases for twelve months starting July 1, 2020 (the “Repurchase Covenant”). The Company temporarily suspended share repurchases for the twelve months starting July 1, 2020 and expiringending on May 18, 2019.  June 30, 2021 in light of a repurchase covenant. On July 1, 2021, the Repurchase Covenant expired.

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. 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. Between May 19, 2017The Company did not repurchase any shares for both the three and August 25, 2017 we repurchased approximately 1.9 million common shares on the open market at an average price of $25.80, totaling approximately $49.3 million, exclusive of commissionssix months ended June 30, 2022 and related fees.2021. The remaining amount authorized to be repurchased under the program as of SeptemberJune 30, 20172022 was approximately $75.7$80.0 million.


28

11. Partners'Partners’ Equity of the Operating Partnership


All units of partnership interest issued by the Operating Partnership have equal rights with respect to earnings, dividends and net assets. When the Company issues common shares upon the exercise of options, the grant of restricted common share awards, or the exchange of Class A common limited partnership units, the Operating Partnership issues a corresponding Class B common limited partnership unit to Tanger LP trust,Trust, a wholly-owned subsidiary of the Company. Likewise, when the Company repurchases its outstanding common shares, the Operating Partnership repurchases an equivalent number ofa corresponding Class B common limited partnership unitsunit held by Tanger LP Trust.


The following table sets forth the changes in outstanding partnership units for the ninethree and six months ended SeptemberJune 30, 20172022 and SeptemberJune 30, 2016:2021:
Limited Partnership Units
General Partnership UnitsClass AClass BTotal
Balance March 31, 20211,100,000 4,794,643 99,694,577 104,489,220 
Options exercised— — 15,500 15,500 
Issuance of units— — 2,810,503 2,810,503 
Balance June 30, 20211,100,000 4,794,643 102,520,580 107,315,223 
Balance December 31, 20201,000,000 4,794,643 92,569,801 97,364,444 
Options exercised— — 15,500 15,500 
Grant of restricted common share awards by the Company, net of forfeitures— — 469,675 469,675 
Issuance of units100,000 — 9,577,581 9,577,581 
Units withheld for employee income taxes— — (111,977)(111,977)
Balance June 30, 20211,100,000 4,794,643 102,520,580 107,315,223 
Balance March 31, 20221,100,000 4,761,559 103,369,061 108,130,620 
Options exercised— — 800 800 
Forfeitures of restricted common share awards by the Company— — (13,062)(13,062)
Units withheld for employee income taxes— — (62,007)(62,007)
Balance June 30, 20221,100,000 4,761,559 103,294,792 108,056,351 
Balance December 31, 20211,100,000 4,761,559 102,984,734 107,746,293 
Grant of restricted common share awards by the Company, net of forfeitures— — 499,336 499,336 
Options exercised— — 2,700 2,700 
Units withheld for employee income taxes— — (191,978)(191,978)
Balance June 30, 20221,100,000 4,761,559 103,294,792 108,056,351 


29
    Limited Partnership Units
  General Partnership Units Class A Class B Total
Balance December 31, 2015 1,000,000
 5,052,743
 94,880,825
 99,933,568
Grant of restricted common share awards by the Company, net of forfeitures —
 —
 173,124
 173,124
Issuance of deferred units —
 —
 24,040
 24,040
Units issued upon exercise of options —
 —
 57,700
 57,700
Units withheld for employee income taxes —
 —
 (66,427) (66,427)
Balance September 30, 2016 1,000,000
 5,052,743
 95,069,262
 100,122,005
         
Balance December 31, 2016 1,000,000
 5,027,781
 95,095,891
 100,123,672
Grant of restricted common share awards by the Company, net of forfeitures —
 —
 411,968
 411,968
Repurchase of units —
 —
 (1,911,585) (1,911,585)
Units issued upon exercise of options —
 —
 1,800
 1,800
Units withheld for employee income taxes —
 —
 (69,886) (69,886)
Balance September 30, 2017 1,000,000
 5,027,781
 93,528,188
 98,555,969




12. Earnings Per Share of the Company


The following table sets forth a reconciliation of the numerators and denominators in computing the Company'sCompany’s earnings per share (in thousands, except per share amounts):
Three months ended June 30,Six months ended June 30,
 2022202120222021
Numerator:
Net income attributable to Tanger Factory Outlet Centers, Inc.$19,905 $2,478 $40,423 $6,611 
Less allocation of earnings to participating securities(222)(196)(437)(403)
Net income available to common shareholders of Tanger Factory Outlet Centers, Inc.$19,683 $2,282 $39,986 $6,208 
Denominator:
Basic weighted average common shares103,630 100,409 103,607 97,504 
Effect of notional units421 818 413 685 
Effect of outstanding options703 771 720 728 
Diluted weighted average common shares104,754 101,998 104,740 98,917 
Basic earnings per common share:
Net income$0.19 $0.02 $0.39 $0.06 
Diluted earnings per common share:
Net income$0.19 $0.02 $0.38 $0.06 
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Numerator:        
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(15,219) $69,104
 $36,507
 $169,671
Less allocation of earnings to participating securities (306) (627) (907) (1,649)
Net income (loss) available to common shareholders of Tanger Factory Outlet Centers, Inc. $(15,525) $68,477
 $35,600
 $168,022
Denominator:        
Basic weighted average common shares 93,923
 95,156
 94,781
 95,075
Effect of notional units —
 426
 —
 393
Effect of outstanding options and certain restricted common shares —
 90
 23
 69
Diluted weighted average common shares 93,923
 95,672
 94,804
 95,537
Basic earnings per common share:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.77
Diluted earnings per common share:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.76


We determine diluted earnings per share based on the weighted average number of common shares outstanding combined with the incremental weighted average shares that would have been outstanding assuming all potentially dilutive securities were converted into common shares at the earliest date possible.


The notionalNotional units granted under our equity compensation plan are considered contingently issuable common shares and are included in earnings per share if the effect is dilutive using the treasury stock method and the common shares would be issuable if the end of the reporting period were the end of the contingency period. For the both the three and ninesix months ended SeptemberJune 30, 2017, 858,1162022, approximately 961,000 notional units were excluded from the computation respectively, and for both the three and ninesix months ended SeptemberJune 30, 2016, 531,746 and 564,8492021, approximately 140,000 notional units were excluded from the computation respectively, because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or as they were anti-dilutive.


TheWith respect to outstanding options, the effect of dilutive common shares is determined using the treasury stock method, whereby outstanding options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such options and the average measured but unrecognized compensation cost during the period are assumed to be used to repurchase our common shares at the average market price during the period. For both the three and six months ended SeptemberJune 30, 2017,235,7002022, approximately 282,000 options were excluded from the computation and for both the ninethree and six months ended SeptemberJune 30, 2017, 173,500 options were excluded from the computation. For the three months ended September 30, 2016, there were no options excluded from the computation. For the nine months ended September 30, 2016, 145,3002021, approximately 360,000 options were excluded from the computation, respectively, as they were anti-dilutive.

The assumed exchange of the partnership units held by the Non-Company LPs as of the beginning of the year, which would result in the elimination of earnings allocated to the noncontrolling interest in the Operating Partnership, would have no impact on earnings per share since the allocation of earnings to a common limited partnership unit, as if exchanged, is equivalent to earnings allocated to a common share.


Certain of the Company'sCompany’s unvested restricted common share awards contain non-forfeitable rights to dividends or dividend equivalents. The impact of these unvested restricted common share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted common share awards based on dividends declared and the unvested restricted common shares'shares’ participation rights in undistributed earnings. Unvested restricted common shares that do not contain non-forfeitable rights to dividends or dividend equivalents are included in the diluted earnings per share computation if the effect is dilutive, using the treasury stock method.

30



13. Earnings Per Unit of the Operating Partnership


The following table sets forth a reconciliation of the numerators and denominators in computing earnings per unit (in thousands, except per unit amounts):
Three months ended June 30,Six months ended June 30,
 2022202120222021
Numerator:   
Net income attributable to partners of the Operating Partnership$20,819 $2,596 $42,281 $6,938 
Less allocation of earnings to participating securities(222)(196)(437)(403)
Net income available to common unitholders of the Operating Partnership$20,597 $2,400 $41,844 $6,535 
Denominator:
Basic weighted average common units108,391 105,204 108,369 102,299 
Effect of notional units421 818 413 685 
Effect of outstanding options703 771 720 728 
Diluted weighted average common units109,515 106,793 109,502 103,712 
Basic earnings per common unit:
Net income$0.19 $0.02 $0.39 $0.06 
Diluted earnings per common unit:
Net income$0.19 $0.02 $0.38 $0.06 
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Numerator:  
    
  
Net income (loss) attributable to partners of the Operating Partnership $(16,034) $72,772
 $38,427
 $178,680
Less allocation of earnings to participating securities (306) (629) (907) (1,651)
Net income (loss) available to common unitholders of the Operating Partnership $(16,340) $72,143
 $37,520
 $177,029
Denominator:        
Basic weighted average common units 98,951
 100,209
 99,809
 100,127
Effect of notional units —
 426
 —
 393
Effect of outstanding options and certain restricted common units —
 90
 23
 69
Diluted weighted average common units 98,951
 100,725
 99,832
 100,589
Basic earnings per common unit:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.77
Diluted earnings per common unit:        
Net income (loss) $(0.17) $0.72
 $0.38
 $1.76


We determine diluted earnings per unit based on the weighted average number of common units outstanding combined with the incremental weighted average units that would have been outstanding assuming all potentially dilutive securities were converted into common units at the earliest date possible.


The notionalNotional units granted under our equity compensation plan are considered contingently issuable common units and are included in earnings per unit if the effect is dilutive using the treasury stock method and the common sharesunits would be issuable if the end of the reporting period were the end of the contingency period. For both the three and ninesix months ended SeptemberJune 30, 2017, 858,1162022, approximately 961,000 notional units were excluded from the computation and for both the three and ninesix months ended SeptemberJune 30, 2016, 531,746 and 546,8492021, approximately 140,000 notional units were excluded from the computation respectively, because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or as they were anti-dilutive.


TheWith respect to outstanding options, the effect of dilutive common units is determined using the treasury stock method, whereby outstanding options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such options and the average measured but unrecognized compensation cost during the period are assumed to be used to repurchase our common units at the average market price during the period. The market price of a common unit is considered to be equivalent to the market price of a Company common share. For both the three and six months ended SeptemberJune 30, 2017, 235,7002022, approximately 282,000 options were excluded from the computation and for both the ninethree and six months ended SeptemberJune 30, 2017, 173,500 options were excluded from the computation. For the three months ended September 30, 2016, there were no options excluded from the computation. For the nine months ended September 30, 2016, 145,3002021, approximately 360,000 options were excluded from the computation, as they were anti-dilutive.


Certain of the Company'sCompany’s unvested restricted common share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the corresponding unvested restricted unit awards on earnings per unit has been calculated using the two-class method whereby earnings are allocated to the unvested restricted unit awards based on distributions declared and the unvested restricted units'units’ participation rights in undistributed earnings. Unvested restricted common units that do not contain non-forfeitable rights to dividends or dividend equivalents are included in the diluted earnings per unit computation if the effect is dilutive, using the treasury stock method.









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14. Equity-Based Compensation of the Company


We have a shareholder approved equity-based compensation plan, the Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership (Amended(as amended and Restated as ofrestated on April 4, 2014), as amended (the "Plan"“Plan”), which covers our independentnon-employee directors, officers, employees and consultants. For eachPer the Operating Partnership agreement, when a common share is issued by the Company, the Operating Partnership issues one corresponding unit of partnership interest to the Company's wholly owned subsidiaries.Company’s wholly-owned subsidiary, the Tanger LP Trust. Therefore, when the Company grants an equity-based award, the Operating Partnership treats each award as having been granted by the Operating Partnership. In the discussion below, the term "we"“we” refers to the Company and the Operating Partnership together and the term "shares"“shares” is meant to also include corresponding units of the Operating Partnership.


We recorded equity-based compensation expense in general and administrative expenses in our consolidated statements of operations as follows (in thousands):
Three months endedSix months ended
June 30,June 30,
 2022202120222021
Restricted common shares (1)
$2,644 $1,539 $4,213 $4,112 
Notional unit performance awards (1)
1,529 1,147 2,574 2,296 
Options78 77 172 200 
Total equity-based compensation$4,251 $2,763 $6,959 $6,608 
  Three months ended Nine months ended
  September 30, September 30,
  2017 2016 2017 2016
Restricted common shares $2,302
 $3,020
 $7,039
 $8,527
Notional unit performance awards 939
 1,057
 2,870
 2,967
Options 77
 83
 205
 321
Total equity-based compensation $3,318
 $4,160
 $10,114
 $11,815
(1)    Each of the three and six months ended June 30, 2022 and three and six months ended June 30, 2021, include the accelerated recognition of compensation cost.


Equity-based compensation expense capitalized as a part of rental property and deferred lease costs were as follows (in thousands):
Three months endedSix months ended
June 30,June 30,
 2022202120222021
Equity-based compensation expense capitalized$47 $2 $86 $66 
  Three months ended Nine months ended
  September 30, September 30,
  2017 2016 2017 2016
Equity-based compensation expense capitalized $267
 $244
 $777
 $741


Restricted Common Share and Restricted Share Unit Awards


During February 2017,2022, the Company granted 253,431approximately 383,000 restricted common shares and restricted share units to the Company's independentCompany’s non-employee directors and the Company's seniorCompany’s executive officers. The grant date fair value of the awards ranged from $30.16 to $34.47was $16.62 per share. The independent directors' restricted common shares vest ratably over a three year period on January 4th of each year for non-employee directors and the senioron February 15th of each year for executive officers' restricted shares vest ratably over a three or five year period. For the restricted shares issued to our chief executive officer, the restricted share agreement requires him to hold the shares for a minimum of three years following each vesting date.officers. Compensation expense related to the amortization of the deferred compensation is being recognized in accordance with the vesting schedule of the restricted shares.


For certain shares that vest during the period, we withhold shares with value equivalent up to the employees' minimumemployees’ maximum statutory obligation for the applicable income and other employment taxes, and remit cash to the appropriate taxing authorities. The total number of shares withheld upon vesting was 69,886were approximately 192,000 and 112,000 for the ninesix months ended SeptemberJune 30, 2017. No shares were withheld for the three months ended September 30, 2017. The total number of shares withheld upon vesting was 6,0452022 and 66,427 for the three and nine months ended September 30, 2016,2021, respectively. The total number of shares withheld was based on the value of the restricted common shares on the vesting date as determined by our closing share price on the day prior to the vesting date. Total amounts paid for the employees'employees’ tax obligation to taxing authorities was $2.4were $3.2 million and $1.6 million for the ninesix months ended SeptemberJune 30, 20172022 and was $244,000 and $2.2 million for the three and nine months ended September 30, 2016,2021, respectively. These amounts are reflected as financing activities within the consolidated statements of cash flows.




2017 Outperformance2022 Performance Share Plan


InDuring February 2017,2022, the Compensation Committee of Tanger Factory Outlet Centers, Inc.the Company approved the general terms of the Tanger Factory Outlet Centers, Inc. 2017 Outperformance2022 Performance Share Plan (the “2017 OPP"“2022 PSP”), covering the Company's executive officers whereby a maximum of approximately 555,000 restricted common shares may be earned if certain share price appreciation goals are achieved over a three year measurement period.
32

The 2022 PSP is a long-term incentive compensation plan. Recipients receive notionalmay earn units which may convert subject to the achievement of the goals described below, into restricted common shares of the Company based on the Company’s absolute share price appreciation (or absolute total shareholder return) and its share price appreciation relative to its peer group (or relative total shareholder return) over a three-year measurement period. Any shares earned at the end of the three-year measurement period are subject to a time-based vesting schedule, with 50% of the shares vesting immediately following issuance,the measurement period, and the remaining 50% vesting one year thereafter, contingent upon continued employment with the Company through the vesting datesdate (unless terminated prior thereto (a) by the Company without cause, (b) by participant for good reason or, (c) due to death or disability).


The following table sets forth 2017 OPP2022 PSP performance targets and other relevant information about the 2017 OPP:2022 PSP:
Performance targets (1)
Absolute portion of award:
Percent of total award33.3%
Absolute total shareholder return range26.0 %-40.5%
Percentage of units to be earned20 %-100%
Relative portion of award:
Percent of total award66.7%
Percentile rank of peer group range(2)
30 th-80th
Percentage of units to be earned20 %-100%
Maximum number of restricted common shares that may be earned555,349 
February grant date fair value per share$11.68 
Performance targets (1)
  
Absolute portion of award:  
Percent of total award 50%
Absolute share price appreciation range 18% - 35%
Percentage of units to be earned 20%-100%
   
Relative portion of award:  
Percent of total award 50%
Percentile rank of peer group range(2)
 40th - 70th
Percentage of units to be earned 20%-100%
   
Maximum number of restricted common shares that may be earned 296,400
Grant date fair value per share $16.60
(1)The number of restricted common shares received under the 2022 PSP will be determined on a pro-rata basis by linear interpolation between total shareholder return thresholds, both for absolute total shareholder return and for relative total shareholder return amongst the Company’s peer group.
(1)The number of restricted common shares received under the 2017 OPP will be determined on a pro-rata basis by linear interpolation between share price appreciation thresholds, both for absolute share price appreciation and for relative share price appreciation amongst the Company's peer group. The share price for the purposes of calculation of share price appreciation will be adjusted on a penny-for-penny basis with respect to any dividend payments made during the measurement period.
(2)The peer group is based on companies included in the SNL Equity REIT index.

(2)The peer group is based on companies included in the FTSE NAREIT Retail Index.

The fair values of the 2017 OPP2022 PSP awards granted during the ninesix months ended SeptemberJune 30, 20172022 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:
Risk free interest rate (1)
1.521.7 %
Expected dividend yield (2)
3.45.7 %
Expected volatility (3)
1965 %
(1)Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the restricted unit grants.
(2)The dividend yield is calculated utilizing the dividends paid for the previous five-year period.
(3)Based on a mix of historical and implied volatility for our common shares and the common shares of our peer index companies over the measurement period.

(1)Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the restricted unit grants.
2014 Outperformance(2)The dividend yield is calculated utilizing the average dividend yield over the previous three-year period and the current dividend yield as of the valuation date.
(3)Based on a mix of historical and implied volatility for our common shares and the common shares of our peer index companies over the measurement period.

2019 Performance Share Plan


On December 31, 2016,February 17, 2022, the measurement period for the 2014 Outperformance2019 Performance Share Plan ('the 2014 OPP"(the “2019 PSP") expired. Based on the Company’s absolute share price appreciation (orrelative total shareholder return)return over the three year measurement period, we issued 184,45596,592 restricted common shares in January 2017,February 2022, with 94,66358,569 vesting immediately and the remaining to vest38,023 vesting in JanuaryFebruary one year thereafter, contingent upon continued employment with the Company through the vesting date. Our relativeabsolute share price appreciation (or total shareholder returnreturn) for the 20142019 OPP did not meet the minimum share price appreciation and no shares were earned under this component of the 20142019 OPP.



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15. Accumulated Other Comprehensive Income (Loss) of the Company


The following table presents changes in the balances of each component of accumulated other comprehensive income (loss) for the three and ninesix months ended SeptemberJune 30, 20172022 (in thousands):
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
Balance March 31, 2022$(18,541)$9,289 $(9,252)$(1,030)$409 $(621)
Other comprehensive income (loss) before reclassifications(2,334)1,885 (449)(107)86 (21)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 281 281 — 13 13 
Balance June 30, 2022$(20,875)$11,455 $(9,420)$(1,137)$508 $(629)
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
Balance December 31, 2021$(19,713)$1,952 $(17,761)$(1,084)$72 $(1,012)
Other comprehensive income (loss) before reclassifications(1,162)8,941 7,779 (53)410 357 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 562 562 — 26 26 
Balance June 30, 2022$(20,875)$11,455 $(9,420)$(1,137)$508 $(629)

34
  
  Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
  Foreign Currency Cash flow hedges Total Foreign Currency Cash flow hedges Total
Balance June 30, 2017 $(28,209) $3,962
 $(24,247) $(1,534) $209
 $(1,325)
Other comprehensive income before reclassifications 4,497
 89
 4,586
 240
 5
 245
Reclassification out of accumulated other comprehensive income into interest expense —
 (52) (52) —
 (3) (3)
Balance September 30, 2017 $(23,712) $3,999
 $(19,713) $(1,294) $211
 $(1,083)
             
   
  Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
  Foreign Currency Cash flow hedges Total Foreign Currency Cash flow hedges Total
Balance December 31, 2016 $(32,087) $3,792
 $(28,295) $(1,740) $201
 $(1,539)
Other comprehensive income (loss) before reclassifications 8,375
 (154) 8,221
 446
 (9) 437
Reclassification out of accumulated other comprehensive income into interest expense —
 361
 361
 —
 19
 19
Balance September 30, 2017 $(23,712) $3,999
 $(19,713) $(1,294) $211
 $(1,083)




The following table presents changes in the balances of each component of accumulated other comprehensive loss for the three and ninesix months ended SeptemberJune 30, 20162021 (in thousands):
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
Balance March 31, 2021$(18,984)$(1,284)$(20,268)$(1,057)$(77)$(1,134)
Other comprehensive income (loss) before reclassifications1,299 (86)1,213 66 (5)61 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 312 312 — 16 16 
Balance June 30, 2021$(17,685)$(1,058)$(18,743)$(991)$(66)$(1,057)
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
Balance December 31, 2020$(23,399)$(3,186)$(26,585)$(1,281)$(173)$(1,454)
Other comprehensive income before reclassifications2,251 1,422 3,673 123 71 194 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges3,463 706 4,169 167 36 203 
Balance June 30, 2021$(17,685)$(1,058)$(18,743)$(991)$(66)$(1,057)
  
  Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
  Foreign Currency Cash flow hedges Total Foreign Currency Cash flow hedges Total
Balance June 30, 2016 $(27,869) $(4,221) $(32,090) $(1,516) $(224) $(1,740)
Other comprehensive income (loss) before reclassifications (1,644) 1,596
 (48) (87) 84
 (3)
Reclassification out of accumulated other comprehensive income into interest expense —
 520
 520
 —
 28
 28
Balance September 30, 2016 $(29,513) $(2,105) $(31,618) $(1,603) $(112) $(1,715)
             
   
  Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
  Foreign Currency Cash flow hedges Total Foreign Currency Cash flow hedges Total
Balance December 31, 2015 $(36,130) $(585) $(36,715) $(1,956) $(31) $(1,987)
Other comprehensive income (loss) before reclassifications 6,617
 (2,885) 3,732
 353
 (154) 199
Reclassification out of accumulated other comprehensive income into interest expense —
 1,365
 1,365
 —
 73
 73
Balance September 30, 2016 $(29,513) $(2,105) $(31,618) $(1,603) $(112) $(1,715)


We expect within the next twelve months to reclassify into earnings as a decrease to interest expense approximately $444,000$7.0 million of the amounts recorded within accumulated other comprehensive incomeloss related to the interest rate swap agreements in effect and as of SeptemberJune 30, 2017.2022.




35

16. Accumulated Other Comprehensive Income (Loss) of the Operating Partnership


The following table presents changes in the balances of each component of accumulated other comprehensive income (loss) for the three and ninesix months ended SeptemberJune 30, 20172022 (in thousands):
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance March 31, 2022$(19,571)$9,698 $(9,873)
Other comprehensive income (loss) before reclassifications(2,441)1,971 (470)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 294 294 
Balance June 30, 2022$(22,012)$11,963 $(10,049)
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance December 31, 2021$(20,797)$2,024 $(18,773)
Other comprehensive income (loss)before reclassifications(1,215)9,351 8,136 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 588 588 
Balance June 30, 2022$(22,012)$11,963 $(10,049)
  Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance June 30, 2017 $(29,743) $4,171
 $(25,572)
Other comprehensive income before reclassifications 4,737
 94
 4,831
Reclassification out of accumulated other comprehensive income into interest expense —
 (55) (55)
Balance September 30, 2017 $(25,006) $4,210
 $(20,796)
       
  Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2016 $(33,827) $3,993
 $(29,834)
Other comprehensive income (loss) before reclassifications 8,821
 (163) 8,658
Reclassification out of accumulated other comprehensive income into interest expense —
 380
 380
Balance September 30, 2017 $(25,006) $4,210
 $(20,796)


The following table presents changes in the balances of each component of accumulated other comprehensive loss for the three and ninesix months ended SeptemberJune 30, 20162021 (in thousands):
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance March 31, 2021$(20,041)$(1,361)$(21,402)
Other comprehensive income (loss) before reclassifications1,365 (91)1,274 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges— 328 328 
Balance June 30, 2021$(18,676)$(1,124)$(19,800)
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance December 31, 2020$(24,680)$(3,359)$(28,039)
Other comprehensive income before reclassifications2,374 1,493 3,867 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges3,630 742 4,372 
Balance June 30, 2021$(18,676)$(1,124)$(19,800)
  Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance June 30, 2016 $(29,385) $(4,445) $(33,830)
Other comprehensive income (loss) before reclassifications (1,731) 1,680
 (51)
Reclassification out of accumulated other comprehensive income into interest expense —
 548
 548
Balance September 30, 2016 $(31,116) $(2,217) $(33,333)
       
  Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2015 $(38,086) $(616) $(38,702)
Other comprehensive income (loss) before reclassifications 6,970
 (3,039) 3,931
Reclassification out of accumulated other comprehensive income into interest expense —
 1,438
 1,438
Balance September 30, 2016 $(31,116) $(2,217) $(33,333)


We expect within the next twelve months to reclassify into earnings as a decrease to interest expense approximately $444,000$7.0 million of the amounts recorded within accumulated other comprehensive incomeloss related to the interest rate swap agreements in effect and as of SeptemberJune 30, 2017.2022.

36




17.    Non-Cash ActivitiesLease Agreements


As of June 30, 2022, we were the lessor to approximately 2,200 stores in our 30 consolidated outlet centers, under operating leases with initial terms that expire from 2022 to 2039, with certain agreements containing extension options. We also have certain agreements that require tenants to pay their portion of reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.

The components of rental revenues are as follows (in thousands):
Three months endedSix months ended
June 30,June 30,
2022202120222021
Rental revenues - fixed$78,682 $71,847 $159,991 $146,766 
Rental revenues - variable (1)
22,727 24,977 46,027 47,525 
Rental revenues$101,409 $96,824 $206,018 $194,291 
(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.


18. Supplemental Cash Flow Information

We purchase capital equipment and incur costs relating to construction of facilities, including tenant finishing allowances. Expenditures included in accounts payable and accrued expenses were as follows (in thousands):
As ofAs of
 June 30, 2022June 30, 2021
Costs relating to construction included in accounts payable and accrued expenses$15,223 $16,790 

Interest paid, net of interest capitalized was as follows (in thousands):
Six months ended June 30,
20222021
Interest paid$21,586 $25,559 


  September 30, 2017 September 30, 2016
Costs relating to construction included in accounts payable and accrued expenses $27,090
 $20,340


18.19. New Accounting Pronouncements

Recently adopted accounting standards

In August 2016, the FASB issued ASU 2016-15, the Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), which finalizes Proposed ASU No. EITF-15F of the same name, and addresses stakeholders’ concerns regarding diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle.  This ASU is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years, with early adoption permitted. The ASU should be adopted using a retrospective transition approach. We early adopted ASU 2016-15 during the third quarter of 2017, with retrospective application to our consolidated statements of cash flows. For distributions received from equity method investees, we have chosen the cumulative-earnings approach, which is also our current policy for these distributions. ASU 2016-15 requires debt prepayment or debt extinguishment costs to be classified as cash outflows for financing activities. As such, the make-whole premium related to the 2020 notes has been classified as a financing activity. The retrospective application of ASU 2016-15 had no impact on any of the prior periods presented.


Recently issued accounting standards to be adopted


In August 2017,On March 12, 2020, the Financial Accounting Standards Board ("FASB")FASB issued Accounting Standards Update ("ASU"(“ASU”) 2017-12, Derivatives2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and Hedging (Topic 815), Targeted Improvementsexceptions for applying GAAP to Accounting for Hedging Activities. The new guidance will make more financialcontracts, hedging relationships and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. Itother transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform. This ASU is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the applicationeffective as of hedge accounting, and increase transparency as to the scope and results of hedging programs. The amendments can be adopted immediately in any interim or annual period (including the current period). The mandatory effective date for calendar year-end public companies isMarch 12, 2020 through December 31, 2022. In January 1, 2019. We are currently evaluating the impact of adopting the new guidance, but we do not expect the adoption to have a material impact on our consolidated financial statements.

In May 2017,2021, the FASB issued ASU 2017-09, Compensation-Stock Compensation2021-01, Reference Rate Reform (Topic 718): Scope of Modification Accounting. ASU 2017-09 amends848), which refines the scope of modification accountingTopic 848 and clarifies some of its guidance. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for share-based payment arrangements, and provides guidance on the typesmargining, discounting, or contract price alignment that is modified as a result of changesreference rate reform. Amendments to the terms or conditionsexpedients and exceptions in Topic 848 capture the incremental consequences of share-based payment awardsthe scope clarification and tailor the existing guidance to which anderivative instruments affected by the discounting transition. The amendments are effective immediately for all entities. An entity would be requiredmay elect to apply modification accounting under ASC 718. ASU 2017-07 is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact of adopting the new guidance, but we do not expect the adoption to have a material impactamendments on our consolidated financial statements.



In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." ASU 2017-05 clarifies the definition of an in-substance nonfinancial asset and changes the accounting for partial sales of nonfinancial assets to be more consistent with the accounting for a sale of a business pursuant to ASU 2017-01. This update is effective for interim and annual periods beginning after December 15, 2017 using a full retrospective basis. We have not adopted any of the optional expedients or modified retrospective method and is requiredexceptions through June 30, 2022, but will continue to be adopted in conjunction with ASU 2014-09, "Revenue from Contracts with Customers" discussed below. We will adopt ASU 2017-05 effective January 1, 2018, along with ourevaluate the possible adoption of ASU 2014-09, using the modified retrospective approach. We do not actively sell operating properties as part of our core business strategy and, accordingly, the sale of properties does not generally constitute a significant part of our revenue and cash flows. Subsequent to adoption, we believe most of our future contributions of nonfinancial assets to our joint ventures where we cease to have a controlling financial interest, if any will result in the recognition of a full gainsuch expedients or loss as if we sold 100% of the nonfinancial asset and we will also measure our retained interest at fair value.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business (Topic 805). ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The update should be applied prospectively. We early adopted this standard on January 1, 2017. We believe most of our future acquisitions of operating properties will qualify as asset acquisitions and certain transaction costs associated with these acquisitions will be capitalized.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the changeexceptions during the effective period in cash, cash equivalents, and amounts generally described as restricted cash. Amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The update should be applied retrospectively to each period presented.  The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We plan to adopt this pronouncement for our fiscal year beginning January 1, 2018, and the pronouncement will result in changes to our consolidated statements of cash flows such that restricted cash amounts will be included in the beginning-of-period and end-of-period cash and cash equivalents totals.circumstances evolve.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected versus incurred credit losses for financial assets held. This ASU will be applied on a prospective basis for fiscal years and interim periods beginning after December 15, 2019, with early adoption permitted for fiscal years beginning and interim periods beginning after December 15, 2018. We are currently evaluating the impact of adopting the new guidance, but we do not expect the adoption to have a material impact on our consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02, codified in ASC 842, amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 as of its issuance is permitted. We will adopt ASU 2016-02 effective January 1, 2019. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Based on a preliminary assessment, we expect our significant operating lease commitments, primarily ground leases, will be required to be recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in an increase in the assets and liabilities on our consolidated balance sheets. Upon adoption, we anticipate separating lease components from nonlease components, which will be evaluated under ASU 2014-09, as described below. We are continuing our evaluation, which may identify additional impacts this standard will have on our consolidated financial statements and related disclosures.
37




In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all contracts with customers, except those that are within the scope of other topics in the FASB's Accounting Standards Codification, including real estate lease contracts, which the majority of our revenue is derived.  The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property, including real estate. We are required to adopt the new pronouncement in the first quarter of fiscal 2018 using one of two retrospective application methods. In March 2016, April 2016, and May 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients.

We will adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective approach. Our revenues that will be impacted by this standard primarily include revenue from management, marketing, development, and leasing fees for services performed related to various joint ventures that we manage and other ancillary income earned at our properties. While the total revenue recognized over time would not differ under the new guidance, the recognition pattern may be different under the new guidance. Through the nine months ended September 30, 2017 and for the year ended December 31, 2016, these revenues were approximately 3% of consolidated revenue, for both periods. As a result, we currently do not expect the adoption of ASU 2014-09 or related amendments and modifications by the FASB to have a material impact on the amount of revenue we recognize in our consolidated financial statements but we do expect to have additional disclosure and reclassification of amounts with in our revenue section of the consolidated income statement as required by the adoption of ASU 2014-09. In addition, we currently expect our cumulative catch-up upon the adoption of this standard, if any, will not be material.


19.20. Subsequent Events


Dividend Declaration
In October 2017,July 2022, the Company's Board of Directors declared a $0.3425$0.20 cash dividend per common share payable on NovemberAugust 15, 20172022 to each shareholder of record on October 31, 2017,July 29, 2022, and in its capacity as General Partner of the Trustees of Tanger GP Trust declaredOperating Partnership, a $0.3425$0.20 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.


Subsequent to quarter end, we successfully settled litigation with the estate of our former partner in the Foxwoods, Connecticut joint venture.  In return for mutual releases and no cash consideration, the estate tendered its partnership interest to the Company. Prior to this settlement, we had a 100% economic interest in the consolidated joint venture as a result of our preferred equity interest and the capital and distribution provisions in the joint venture agreement.  On November 3, 2017, Tanger repaid the $70.3 million floating rate mortgage loan secured by the property with borrowings under its unsecured floating rate lines of credit.








38


Item 2. Management'sManagement’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 ninesix months ended SeptemberJune 30, 20172022 with the three and ninesix months endedSeptember June 30, 2016.2021. The results of operations discussion is combined for Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership because the results are virtually the same for both entities. The following discussion should be read in conjunction with the unaudited consolidated financial statements appearing elsewhere in this report. 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"“Company” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating Partnership"“Operating Partnership” refers to Tanger Properties Limited Partnership and subsidiaries. The terms "we"“we”, "our"“our” and "us"“us” refer to the Company or the Company and the Operating Partnership together, as the text requires.


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.amended, or the Exchange Act. We intend for 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 have 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 "believe", "expect", "intend", "anticipate", "estimate", "project", or similar expressions. Such forward-looking statements include, but are not limited to, statements regarding our:regarding: the expected impact of the novel coronavirus (“COVID-19”) pandemic, rising inflation, 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 expected use of proceeds from such issuances; our results of operations and financial condition; capital expenditure and working capital needs and the funding thereof; the repurchase of the Company's common shares, including the potential salesuse of a 10b5-1 plan to facilitate repurchases; future dividend payments; the possibility of future asset impairments; potential developments, expansions, renovations, acquisitions or purchasesdispositions of outlet centers; anticipated results of operations, liquidity and working capital; new outlet center developments, market and industry trends and consumer behavior;compliance with debt covenants; renewal and re-leasere-lease of leased space; expansionsthe outlook for the retail environment, potential bankruptcies, and renovations;other store closings; consumer shopping trends and preferences; the outcome of legal proceedings arising in the normal course of business; 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. Important

Other important factors which may cause actual results to differ materially from current expectations include, but are not limited to: risks related to the economic performance and market value of our outlet centers, including changes in the national, regional and local economic climate, inflation and rising interest rates; 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; 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; 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 related to the COVID-19 pandemic; risks associated with supply chain disruptions and labor shortages; our dependence on rental income from real property; our dependence on the results of operations of our retailers; 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; investor and regulatory focus on environmental, sustainability and social initiatives; risks related to uninsured losses; the risk that consumer, travel, shopping and spending habits may change; risks associated with our Canadian investments; risks associated with attracting and retaining key personnel; risks associated with debt financing; risk 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; uncertainty relating to the phasing out of LIBOR; 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 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"“Risk Factors” in the Company'sCompany’s and the Operating Partnership'sPartnership’s Annual Report on Form 10-K for the year ended December 31, 2016.2021.

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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. Our MD&A is presented in the following sections:

•General Overview
•Leasing Activity
•Results of Operations
•Liquidity and Capital Resources of the Company
•Liquidity and Capital Resources of the Operating Partnership
•Critical Accounting Estimates
•Recent Accounting Pronouncements
•Non-GAAP Supplemental Measures
•Economic Conditions and Outlook

General Overview


As of SeptemberJune 30, 2017,2022, we had 3530 consolidated outlet centers in 2218 states totaling 12.611.5 million square feet. We also had 86 unconsolidated outlet centers in 6 states or provinces totaling 2.42.1 million square feet. 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, 20162021 to SeptemberJune 30, 20172022 (square feet in thousands):
Consolidated Outlet CentersUnconsolidated Joint Venture Outlet Centers
Outlet CenterQuarter Opened/DisposedSquare FeetNumber of Outlet CentersSquare FeetNumber of Outlet Centers
As of January 1, 202111,873 31 2,212 7 
Dispositions:
JeffersonvilleFirst Quarter(412)(1)— — 
Saint-SaveurFirst Quarter— — (99)(1)
Other(8)— — — 
As of December 31, 202111,453 30 2,113 6 
Other1 — — — 
As of June 30, 202211,454 30 2,113 6 

40
    Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers
Outlet Center Quarter Acquired/Opened/Disposed Square Feet Outlet Centers Square Feet 

Outlet Centers
As of January 1, 2016   11,746
 34
 2,747
 9
New Developments:          
Columbus Second Quarter —
 —
 355
 1
Daytona Beach Fourth Quarter 349
 1
 —
 —
Acquisitions:          
Westgate Second Quarter 408
 1
 (408) (1)
Savannah Third Quarter 419
 1
 (419) (1)
Expansions:          
    Ottawa First Quarter —
 —
 32
 —
  Savannah Second Quarter —
 —
 42
 —
Dispositions:          
Fort Myers First Quarter (199) (1) —
 —
Demolition:          
Lancaster Various (25) —
 —
 —
Other   12
 —
 (1) —
As of December 31, 2016   12,710
 36
 2,348
 8
Expansion:          
Ottawa Second Quarter —
 —
 39
 —
Lancaster Third Quarter 148
 —
 —
 —
Dispositions:          
Westbrook Second Quarter (290) (1) —
 —
Other   7
 —
 (16) —
As of September 30, 2017   12,575
 35
 2,371
 8


Our Westgate and Savannah outlet centers were previously held in unconsolidated joint ventures prior to acquiring our partners' interest in each venture in June 2016 and August 2016, respectively.


The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of SeptemberJune 30, 2017.2022. Except as noted, all properties are fee owned.
Consolidated Outlet CentersLegalSquare%
LocationOwnership %FeetOccupied
Deer Park, New York100 739,148 95.6 
Riverhead, New York (1)
100 729,281 91.8 
Foley, Alabama100 554,649 92.3 
Rehoboth Beach, Delaware (1)
100 549,890 94.1 
Atlantic City, New Jersey (1) (3)
100 487,718 78.6 
San Marcos, Texas100 471,816 96.1 
Sevierville, Tennessee (1)
100 447,810 100.0 
Savannah, Georgia100 429,089 99.5 
Myrtle Beach Hwy 501, South Carolina100 426,523 95.8 
Glendale, Arizona (Westgate)100 410,753 99.1 
Myrtle Beach Hwy 17, South Carolina (1)
100 404,710 100.0 
Charleston, South Carolina100 386,328 100.0 
Lancaster, Pennsylvania100 375,883 100.0 
Pittsburgh, Pennsylvania100 373,863 95.9 
Commerce, Georgia100 371,408 99.5 
Grand Rapids, Michigan100 357,133 88.7 
Fort Worth, Texas100 351,741 95.0 
Daytona Beach, Florida100 351,721 99.4 
Branson, Missouri100 329,861 98.5 
Southaven, Mississippi (2) (3)
50 324,801 98.8 
Locust Grove, Georgia100 321,082 99.3 
Gonzales, Louisiana100 321,066 95.4 
Mebane, North Carolina100 319,762 96.9 
Howell, Michigan100 314,438 78.6 
Mashantucket, Connecticut (Foxwoods) (1)
100 311,229 79.5 
Tilton, New Hampshire100 250,558 88.4 
Hershey, Pennsylvania100 249,696 97.6 
Hilton Head II, South Carolina100 206,564 97.1 
Hilton Head I, South Carolina100 181,68799.4 
Blowing Rock, North Carolina100 104,009 100.0 
Totals11,454,217 94.8 
(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. We currently receive substantially all the economic interest of the property.
(3)Property encumbered by mortgage. See Notes 6 and 7 to the consolidated financial statements for further details of our debt obligations.
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Consolidated Outlet Centers Legal Square %
Location Ownership % Feet Occupied
Deer Park, New York 100 749,074
 95 
Riverhead, New York (1)
 100 729,706
 98 
Rehoboth Beach, Delaware (1)
 100 557,404
 99 
Foley, Alabama 100 556,677
 99 
Atlantic City, New Jersey (1) (4)
 99 489,706
 87 
San Marcos, Texas 100 471,816
 97 
Sevierville, Tennessee (1)
 100 448,355
 100 
Savannah, Georgia 100 429,089
 97 
Myrtle Beach Hwy 501, South Carolina 100 425,334
 94 
Jeffersonville, Ohio 100 411,849
 95 
Glendale, Arizona (Westgate) 100 407,673
 97 
Myrtle Beach Hwy 17, South Carolina (1)
 100 403,339
 100 
Charleston, South Carolina 100 382,117
 97 
Lancaster, Pennsylvania 100 377,299
 93 
Pittsburgh, Pennsylvania 100 372,958
 100 
Commerce, Georgia 100 371,408
 97 
Grand Rapids, Michigan 100 357,080
 97 
Daytona Beach, Florida 100 351,704
 97 
Branson, Missouri 100 329,861
 100 
Locust Grove, Georgia 100 321,070
 97 
Gonzales, Louisiana 100 321,066
 99 
Southaven, Mississippi (2) (4)
 50 320,341
 97 
Park City, Utah 100 319,661
 97 
Mebane, North Carolina 100 318,910
 100 
Howell, Michigan 100 314,459
 98 
Mashantucket, Connecticut (Foxwoods) (1) (2) (4)
 67 311,614
 94 
Williamsburg, Iowa 100 276,331
 97 
Tilton, New Hampshire 100 250,107
 93 
Hershey, Pennsylvania 100 247,500
 100 
Hilton Head II, South Carolina 100 206,564
 96 
Ocean City, Maryland (1)
 100 198,800
 98 
Hilton Head I, South Carolina 100 181,670
 99 
Terrell, Texas 100 177,800
 96 
Blowing Rock, North Carolina 100 104,009
 98 
Nags Head, North Carolina 100 82,161
 100 
Totals   12,574,512
 97
(3) 
(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. We currently receive substantially all the economic interest of the property.
(3)Excludes the occupancy rate at our Daytona Beach outlet center which opened during the fourth quarter of 2016 and has not yet stabilized.
(4)Property encumbered by mortgage. See notes 6 and 7 to the consolidated financial statements for further details of our debt obligations.

Unconsolidated joint venture propertiesLegalSquare%
LocationOwnership %FeetOccupied
Charlotte, North Carolina (1)
50 398,698 98.9 
Ottawa, Ontario50 357,209 95.4 
Columbus, Ohio (1)
50 355,245 96.0 
Texas City, Texas (Galveston/Houston) (1)
50 352,705 95.1 
National Harbor, Maryland (1)
50 341,156 100.0 
Cookstown, Ontario50 307,883 89.8 
Total2,112,896 96.0 

(1)Property encumbered by mortgage. See Note 5 to the consolidated financial statements for further details of the joint venture debt obligations.

Unconsolidated joint venture properties Legal Square % 
Location Ownership % Feet Occupied 
Charlotte, North Carolina (1)
 50 397,844
 99 
Ottawa, Ontario 50 355,497
 93 
Columbus, Ohio (1)
 50 355,220
 96 
Texas City, Texas (Galveston/Houston) (1)
 50 352,705
 99 
National Harbor, Maryland (1)
 50 341,156
 98 
Cookstown, Ontario 50 307,779
 98 
Bromont, Quebec 50 161,307
 72 
Saint-Sauveur, Quebec (1)
 50 99,405
 96 
Total   2,370,913
 95
(2) 
(1)Property encumbered by mortgage. See note 5 to the consolidated financial statements for further details of our debt obligations.
(2)Excludes the occupancy rate at our Columbus outlet center which opened during the second quarter of 2016 and has not yet stabilized.


Leasing Activity


In the fourth quarter of 2021, we revised our rent spread presentation from a commenced basis to an executed basis and we are presenting it for comparable and non-comparable space. Comparable space excludes leases for space that was vacant for more than 12 months (non-comparable space). We believe that this presentation provides additional information and improves comparability to other retail REITs. Prior period results have been revised to conform with the current period presentation.

The following table provides information for our consolidated outlet centers regardingrelated to leases for new stores that opened or renewals that were executed during the respective trailing twelve month periods ended June 30, 2022 and 2021:
Comparable Space for Executed Leases (1) (2)
Leasing TransactionsSquare Feet
(in 000’s)
New
Initial Rent
(psf) (3)
Rent
Spread
% (4)
Tenant
Allowance
(psf) (5)
Average
Initial Term
(in years)
Total space
2022267 1,455 $30.62 4.0 %$4.24 3.76 
2021296 1,390 $26.09 (5.7)%$4.58 2.71 
Comparable and Non-Comparable Space for Executed Leases (1) (2)
Leasing TransactionsSquare Feet
(in 000’s)
New
Initial Rent
(psf) (3)
Tenant
Allowance
(psf) (5)
Average
Initial Term
(in years)
Total space
2022318 1,653 $31.35 $13.30 4.31 
2021334 1,529 $25.99 $5.72 2.95 
(1)For consolidated properties owned as of the period-end date. Represents leases for new stores or renewals that were executed during the respective trailing 12-month periods and excludes license agreements, seasonal tenants, month-to-month leases and new developments.
(2)Comparable space re-leased or renewed:excludes leases for space that was vacant for more than 12 months (non-comparable space).
(3)Represents average initial cash rent (base rent and common area maintenance (“CAM”)).
(4)Represents change in average initial and expiring cash rent (base rent and CAM).
(5)Includes other landlord costs.




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Trailing twelve months ended September 30, 2017(1)
 # of Leases
Square Feet
(in 000's)
Average
Annual
Straight-line Rent (psf)(2)
Average
Tenant
Allowance (psf)
Average Initial Term
 (in years)
Net Average
Annual
Straight-line Rent (psf) (3)
Re-tenant87
380
$34.76
$55.47
8.94
$28.56
Renewal253
1,126
$32.56
$0.24
4.50
$32.51
       
 
Trailing twelve months ended September 30, 2016(1)
 # of Leases
Square Feet
(in 000's)
Average
Annual
Straight-line Rent (psf)(2)
Average
Tenant
Allowance (psf)
Average Initial Term
 (in years)
Net Average
Annual
Straight-line Rent (psf) (3)
Re-tenant103
401
$41.47
$57.04
8.54
$34.79
Renewal290
1,337
$32.22
$0.41
4.71
$32.13
(1)Includes information for consolidated portfolio outlet centers owned as of period end date.
(2)Includes both minimum base rent and common area maintenance rents.
(3)Net average straight-line rent is calculated by dividing the average tenant allowance costs per square foot by the average initial term and subtracting this calculated number from the average straight-line rent per year amount. The average annual straight-line rent disclosed in the table above includes all concessions, abatements and reimbursements of rent to tenants. The average tenant allowance disclosed in the table above includes landlord costs.








RESULTS OF OPERATIONS

Comparison of the three months ended SeptemberJune 30, 20172022 to the three months ended SeptemberJune 30, 20162021


NET INCOME (LOSS)
Net income (loss) decreased $88.8increased $18.2 million in the 20172022 period to a loss of $16.0$20.8 million as compared to net income of $72.8$2.6 million for the 20162021 period. The majoritySignificant items impacting the comparability for the two periods include the following:

•the current period had a higher average occupancy rate,
•the current period includes $2.4 million of this decrease was dueexecutive severance costs,
•the current period includes a gain of $2.4 million related to the sale of a non-real estate asset,
•the prior year period included a loss on the early extinguishment of debt of $35.6$14.0 million, and
•we sold one operating property in the 2017 period and a $46.3 million gain on the acquisitionfirst quarter of our partners' equity interests in the Savannah joint venture in the 2016 period. This decrease was partially offset by improved operating income.2021, as discussed below.


In the tables below, information set forth for new development representsproperties disposed includes our Daytona BeachJeffersonville, Ohio outlet center which opened in November 2016. Acquisitions include our Westgate and Savannah outlet centers, which were previously held in unconsolidated joint ventures prior to acquiring our partners' interest in each venture in June 2016 and August 2016, respectively. Properties disposed include our Westbrook and Fort Myers outlet centers sold in May 2017 and January 2016, respectively.2021.


BASE RENTALSRENTAL REVENUES
Base rentalsRental revenues increased $780,000, or 1%,$4.6 million in the 20172022 period compared to the 20162021 period. The following table sets forth the changes in various components of base rentalsrental revenues (in thousands):
 20222021Increase/(Decrease)
Rental revenues from existing properties$101,058 $97,405 $3,653 
Rental revenues from properties disposed59 (85)144 
Straight-line rent adjustments302 (478)780 
Lease termination fees35 127 (92)
Amortization of above and below market rent adjustments, net(45)(145)100 
 $101,409 $96,824 $4,585 
  2017 2016 Increase/(Decrease)
Base rentals from existing properties $73,217
 $73,523
 $(306)
Base rentals from new development 1,978
 —
 1,978
Base rentals from acquisitions 5,294
��4,131
 1,163
Base rentals from property disposed —
 1,134
 (1,134)
Termination fees 162
 1,450
 (1,288)
Amortization of above and below market rent adjustments, net (302) (669) 367
  $80,349
 $79,569
 $780


Base rentals from existing properties decreasedRental revenues increased primarily due primarily to a slight decreasean increase in averageoccupancy rate for the consolidated portfolio occupancy.

PERCENTAGE RENTALS
Percentage rentals increased $143,000, or 5%, in the 2017 periodto 94.8% as of June 30, 2022 compared to the 2016 period. Percentage rentals represents revenues based on a percentage93.0% as of tenants' sales volume above predetermined levels (contractual breakpoints") (in thousands):June 30, 2021.
  2017 2016 Increase/(Decrease)
Percentage rentals from existing properties $2,738
 $2,698
 $40
Percentage rentals from new development 99
 —
 99
Percentage rentals from acquisitions 301
 285
 16
Percentage rentals from property disposed —
 12
 (12)
  $3,138
 $2,995
 $143





EXPENSE REIMBURSEMENTS
Expense reimbursements increased $1.1 million, or 3%, in the 2017 period compared to the 2016 period. The following table sets forth the changes in various components of expense reimbursements (in thousands):
  2017 2016 Increase/(Decrease)
Expense reimbursements from existing properties $30,504
 $30,538
 $(34)
Expense reimbursements from new development 825
 49
 776
Expense reimbursements from acquisitions 2,851
 1,952
 899
Expense reimbursements from property disposed —
 586
 (586)
  $34,180
 $33,125
 $1,055

Expense reimbursements represent the contractual recovery from tenants of certain common area maintenance ("CAM"), insurance, property tax, promotional, advertising and management expenses. Certain expense reimbursements are based on the tenant's proportionate share of the allocable operating expenses for the property. and thus generally fluctuate consistently with the related expenses. Other expense reimbursements, such as promotional, advertising and certain CAM payments, represent contractual fixed rents and may escalate each year. See "Property Operating Expenses" below for a discussion of the decrease in operating expenses from our existing properties.


MANAGEMENT, LEASING AND OTHER SERVICES
Management, leasing and other services decreased $218,000, or 27%,increased $77,000 in the 20172022 period compared to the 20162021 period. The following table sets forth the changes in various components of management, leasing and other services (in thousands):
 20222021Increase/(Decrease)
Management and marketing$552 $537 $15 
Leasing and other fees— 103 (103)
Expense reimbursements from unconsolidated joint ventures884 719 165 
$1,436 $1,359 $77 
  2017 2016 Increase/(Decrease)
Management and marketing $564
 $656
 $(92)
Development and leasing 20
 65
 (45)
Loan guarantee 4
 85
 (81)
  $588
 $806
 $(218)


OTHER REVENUES
The decrease in management, leasing and other services is primarily due to having one fewer outlet center in our unconsolidated joint venturesOther revenues decreased $97,000 in the 2017 period compared to the 2016 period. During August 2016, we acquired our venture partners' equity interests in the Savannah outlet center and received no fees subsequent to the acquisition date.

OTHER INCOME
Other income decreased $132,000, or 5% in the 20172022 period as compared to the 20162021 period. The following table sets forth the changes in various components of other revenues (in thousands):
 20222021Increase/(Decrease)
Other revenues from existing properties$2,993 $3,088 $(95)
Other revenues from properties disposed— 2 (2)
 $2,993 $3,090 $(97)


43

PROPERTY OPERATING EXPENSES
Property operating expenses increased $1.4 million in the 2022 period compared to the 2021 period. The following table sets forth the changes in various components of property operating expenses (in thousands):

 20222021Increase/(Decrease)
Property operating expenses from existing properties$31,255 $31,562 $(307)
Properties operating expenses from properties disposed— (1,726)1,726 
Expenses related to unconsolidated joint ventures884 719 165 
Other property operating expenses558 695 (137)
 $32,697 $31,250 $1,447 

  2017 2016 Change
Other income from existing properties $2,283
 $2,434
 $(151)
Other income from new developments 34
 62
 (28)
Other income from acquisitions 193
 146
 47
  $2,510
 $2,642
 $(132)




PROPERTY OPERATING EXPENSES
The following table sets forthProperty operating expenses increased in the changes in various components of2022 period primarily because property operating expenses (in thousands):
for the 2021 included $1.7 million in net proceeds received from the successful appeal of property taxes for tax years prior to disposition. The 2022 period included no such refunds.
  2017 2016 Increase/(Decrease)
Property operating expenses from existing properties $34,315
 $34,932
 $(617)
Property operating expenses from new development 846
 55
 791
Property operating expenses from acquisitions 2,410
 1,673
 737
Property operating expenses from property disposed —
 782
 (782)
  $37,571
 $37,442
 $129

The decrease in property operating expenses from existing properties was due to lower spending in the 2017 period for certain CAM and marketing expenses.


GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased $1.2increased $3.6 million or 10% in the 20172022 period compared to the 2016 period, due2021 period. The increase was primarily due to $2.4 million of compensation costs related to executive severance that occurred in the 2016 period including executive severance.2022 period. In addition, expenses increased on a comparative basis from the hiring of certain executives and other key employees during the second half of 2021 to drive operational and growth initiatives.


DEPRECIATION AND AMORTIZATION
Depreciation and amortization costs increased $1.8decreased $1.5 million or 6%, in the 20172022 period compared to the 20162021 period, primarily due to certain construction and development related assets, as well as lease related intangibles recorded as part of the acquisition price of acquired properties, which are amortized over shorter lives, became fully depreciated during the reporting periods.

INTEREST EXPENSE
Interest expense decreased $1.8 million in the 2022 period compared to the 2021 period for the following reasons:

•During August and September 2021, we completed a public offering of $400.0 million 2.750% of senior notes and completed the early redemption of $100.0 million of 3.875% senior notes and $250.0 million of 3.75% senior notes.
•During April 2021, we completed the redemption of $150.0 million of 3.875% senior notes.
•During 2021, we paid down approximately $50.0 million of borrowings under our unsecured term loan.

LOSS ON EARLY EXTINGUISHMENT OF DEBT
In April 2021, we completed a partial redemption of $150.0 million of 3.875% senior notes. As part of completing the redemption, we paid a make-whole premium of $13.0 million and expensed approximately $1.0 million of unamortized debt origination costs and debt discount related to the senior notes.

OTHER INCOME (EXPENSE)
Other income (expense) increased approximately $1.9 million in the 2022 period, primarily due to the gain on sale of a non-real estate asset for $2.4 million.


44

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES
Equity in earnings of unconsolidated joint ventures decreased approximately $501,000 in the 2022 period compared to the 2021 period. The decrease is primarily due to the 2021 period including the recognition of termination rents at two joint venture centers and the increase in variable interest rates in 2022 that has negatively impacted two of our joint ventures that have variable rate mortgages.

Comparison of the six months ended June 30, 2022 to the six months ended June 30, 2021

NET INCOME
Net income increased $35.3 million in the 2022 period to $42.3 million as compared to net income of $6.9 million for the 2021 period. Significant items impacting the comparability for the two periods include the following:

•the current period had a higher average occupancy rate and an increase in lease termination fees,
•the 2021 period included a loss on the early extinguishment of debt of $14.0 million,
•the 2021 period included a foreign currency loss of approximately $3.6 million in other income (expense), which had been previously recorded in other comprehensive income associated with the sale of our RioCan joint venture outlet center in Saint-Sauveur,
•the current period includes a gain of $2.4 million related to the sale of a non-real estate asset,
•the 2022 period included $2.4 million of executive severance costs and the 2021 period included $2.4 million of compensation cost related to a voluntary retirement plan offer which required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021 and other executive severance, and
•we sold one operating property in the first quarter of 2021, as discussed below.

In the tables below, information set forth for properties disposed includes the Jeffersonville outlet center sold in January 2021.

RENTAL REVENUES
Rental revenues increased $11.7 million in the 2022 period compared to the 2021 period. The following table sets forth the changes in various components of depreciation and amortization costs from the 2017 period to the 2016 periodrental revenues (in thousands):
 20222021Increase/(Decrease)
Rental revenues from existing properties$204,548 $194,476 $10,072 
Rental revenues from properties disposed2 375 (373)
Straight-line rent adjustments(1,035)(1,521)486 
Lease termination fees2,631 800 1,831 
Amortization of above and below market rent adjustments, net(128)161 (289)
 $206,018 $194,291 $11,727 
  2017 2016 Increase/(Decrease)
Depreciation and amortization from existing properties $25,912
 $26,514
 $(602)
Depreciation and amortization from new development 1,236
 —
 1,236
Depreciation and amortization from acquisitions 3,828
 2,340
 1,488
Depreciation and amortization from properties disposed —
 351
 (351)
  $30,976
 $29,205
 $1,771


INTEREST EXPENSE AND LOSS ON EARLY EXTINGUISHMENT OF DEBT
In July 2017, we completedRental revenues increased primarily due to an underwritten public offeringincrease in occupancy rate for the consolidated portfolio to 94.8% as of $300.0 millionJune 30, 2022 compared to 93.0% as of 3.875% senior notes due 2027 (the "2027 Notes"). In August 2017, we usedJune 30, 2021. Termination fees were recognized for several tenants in the net proceeds from2022 period. The 2021 period had fewer tenants with termination fees. Additionally, rental revenues were also impacted by the salereversal of revenue reserves in the 2027 Notes, together with borrowings under our unsecured lines of credit, to redeem all of our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par plus a make-whole premium2022 period of approximately $34.1 million. The loss on early extinguishment of debt includes the make-whole premium and approximately $1.5$3.7 million, of costs written off related to a debt discount and the remaining net book value of deferred 2020 Notes origination costs.

Interest expense increased $1.0 million, or 6%, in the 2017 period compared to the 2016 period, due primarily to the completed public offerings in August 2016 and October 2016, of an aggregate $350.0 million of 3.125% notes, the net proceeds of which were used to repay amounts outstanding under our unsecured lines of credit that had an approximate interest rate of 1.20%. Interest expense also increased due to the 30-day LIBOR interest rate, which impacts the interest rate associated with our floating rate debt, increasing in the 2017 period compared with the 2016 period and due to incremental interest paid during the redemption notice period when both the 2020 Notes and the 2027 Notes were outstanding. The overall increase was partially offset by a decrease in interest expense related to the July 2017 bond refinancing, which effectively lowered the interest rate from 6.125% to 3.875% on $300.0 million of senior notes.






GAIN ON PREVIOUSLY HELD INTEREST IN ACQUIRED JOINT VENTURE
In August 2016, the Savannah joint venture, which owned the outlet center in Pooler, Georgia distributed all outparcels along with $15.0 million in cash consideration to the other partner in exchange for the partner's ownership interest. We contributed the $15.0 million in cash consideration to the joint venture, which we funded with borrowings under our unsecured lines of credit. The joint venture is now wholly-owned by us and has been consolidated in our financial results since the acquisition date. As a result of acquiring the remaining interest in the Savannah joint venture, we recorded a gain of $46.3 million, which represented the difference between the carrying book value and the fair value of our previously held equity method investment in the Savannah joint venture, as a result of the significant appreciation in the property's value since the completion of its original development and opening in April 2015.

EQUITY IN EARNINGS (LOSSES) OF UNCONSOLIDATED JOINT VENTURES
Equity in earnings (losses) of unconsolidated joint ventures decreased approximately $6.6 million or 924% in the 2017 period compared to the 2016 period. The following table sets forth the changes in various components of equity in earnings (losses) of unconsolidated joint ventures (in thousands):
  2017 2016 Increase/(Decrease)
Equity in earnings (losses) from existing properties $(5,893) $(3) $(5,890)
Equity in earnings from properties previously held in unconsolidated joint ventures —
 718
 (718)
  $(5,893) $715
 $(6,608)

Equity in earnings (losses) from existing properties includes our share of impairment charges totaling $9.0$2.4 million in the 2017same period related to the Bromont and Saint-Sauveur outlet centers in Canada, and totaling $2.9 million in the 2016 period related to the Bromont outlet center. The decrease in equity in earnings from properties previously held in unconsolidated joint ventures in 2016 is related to the Savannah joint venture. We acquired our venture partner's interest in the joint venture in August 2016 and have consolidated the results of operations of the center since the acquisition date.prior year.


Comparison of the nine months ended September 30, 2017 to the nine months ended September 30, 2016

NET INCOME
Net income decreased $140.3 million in the 2017 period to $38.4 million as compared to $178.7 million for the 2016 period. The majority of this decrease was due to a loss on the early extinguishment of debt of $35.6 million in the 2017 period, a $95.5 million gain on the acquisition of our partners' equity interests in the Westgate and Savannah joint ventures in the 2016 period.

In the tables below, information set forth for new development represents our Daytona Beach outlet center, which opened in November 2016. Acquisitions include our Westgate and Savannah outlet centers, which were previously held in unconsolidated joint ventures prior to acquiring our partners' interest in each venture in June 2016 and August 2016, respectively. Properties disposed include our Westbrook outlet center and Fort Myers outlet center sold in May 2017 and January 2016, respectively.
BASE RENTALS
Base rentals increased $14.3 million, or 6%, in the 2017 period compared to the 2016 period. The following table sets forth the changes in various components of base rentals (in thousands):
45
  2017 2016 Change
Base rentals from existing properties $216,954
 $217,861
 $(907)
Base rentals from new development 5,836
 —
 5,836
Base rentals from acquisitions 16,042
 4,131
 11,911
Base rentals from properties disposed 1,605
 3,457
 (1,852)
Termination fees 2,796
 3,492
 (696)
Amortization of above and below market rent adjustments, net (1,766) (1,746) (20)
  $241,467
 $227,195
 $14,272



Base rentals from existing properties decreased primarily due to a slight decrease in average portfolio occupancy.

PERCENTAGE RENTALS
Percentage rentals decreased $673,000, or 9%, in the 2017 period compared to the 2016 period. Percentage rentals represents revenues based on a percentage of tenants' sales volume above predetermined levels ("contractual breakpoints") (in thousands):

  2017 2016 Increase/(Decrease)
Percentage rentals from existing properties $5,998
 $7,129
 $(1,131)
Percentage rentals from new development 106
 —
 106
Percentage rentals from acquisitions 629
 285
 344
Percentage rentals from properties disposed 65
 57
 8
  $6,798
 $7,471
 $(673)

Decrease in percentage rentals is primarily due to a decrease in average sales per square foot for certain tenants for the rolling twelve months ended September 30, 2017, compared to the rolling twelve months ended September 30, 2016 and due to annual increases in contractual breakpoints in certain leases.

EXPENSE REIMBURSEMENTS
Expense reimbursements increased $7.7 million, or 8%, in the 2017 period compared to the 2016 period. The following table sets forth the changes in various components of expense reimbursements (in thousands):
  2017 2016 Change
Expense reimbursements from existing properties $93,141
 $93,296
 $(155)
Expense reimbursements from new development 2,856
 156
 2,700
Expense reimbursements from acquisitions 8,052
 1,952
 6,100
Expense reimbursements from properties disposed 752
 1,717
 (965)
  $104,801
 $97,121
 $7,680

Expense reimbursements represent the contractual recovery from tenants of certain common area maintenance, insurance, property tax, promotional, advertising and management expenses. Certain expense reimbursements are based on the tenant's proportionate share of the allocable operating expenses for the property, and thus generally fluctuate consistently with the related expenses. Other expense reimbursements, such as promotional, advertising and certain CAM payments, represent contractual fixed rents and may escalate each year. See "Property Operating Expenses" below for a discussion of the decrease in operating expenses from our existing properties.

MANAGEMENT, LEASING AND OTHER SERVICES
Management, leasing and other services decreased $1.5 million, or 46%,increased $232,000 in the 20172022 period compared to the 20162021 period. The following table sets forth the changes in various components of management, leasing and other services (in thousands):
 20222021Increase/(Decrease)
Management and marketing$1,088 $1,045 $43 
Leasing and other fees35 159 (124)
Expense reimbursements from unconsolidated joint ventures1,840 1,527 313 
Total Fees$2,963 $2,731 $232 
  2017 2016 Change
Management and marketing $1,676
 $2,199
 $(523)
Development and leasing 87
 611
 (524)
Loan guarantee 13
 449
 (436)
  $1,776
 $3,259
 $(1,483)


OTHER REVENUES
The decrease in management, leasing and other services is primarily due to having two fewer outlet centers in our unconsolidated joint venturesOther revenues increased $780,000 in the 2017 period compared to the 2016 period. During 2016, we acquired our venture partners' equity interests in the Westgate and Savannah outlet centers and received no fees subsequent to the acquisition dates. Offsetting the impact of the acquisitions was the addition of one new center in an unconsolidated joint venture, the Columbus outlet center, which opened in June 2016.



OTHER INCOME
Other income increased 676,000, or 11% in the 20172022 period as compared to the 20162021 period. The following table sets forth the changes in various components of other incomerevenues (in thousands):
 20222021Increase/(Decrease)
Other revenues from existing properties$5,725 $4,929 $796 
Other revenues from property disposed— 16 (16)
 $5,725 $4,945 $780 
  2017 2016 Change
Other income from existing properties $6,043
 $6,004
 $39
Other income from new development 148
 —
 148
Other income from acquisitions 613
 162
 451
Other income from properties disposed 101
 63
 38
  $6,905
 $6,229
 $676


Other revenues from existing properties increased in the 2022 period due to an increase in other revenue streams, such as paid media, sponsorships and on-site signage, on a local and national level.

PROPERTY OPERATING EXPENSES
Property operating expenses increased $4.7$2.9 million or 4% in the 20172022 period as compared to the 20162021 period. The following table sets forth the changes in various components of property operating expenses (in thousands):
 20222021Increase/(Decrease)
Property operating expenses from existing properties$66,396 $65,506 $890 
Property operating expenses from property disposed— (1,155)1,155 
Expenses related to unconsolidated joint ventures1,840 1,527 313 
Other property operating expense1,219 683 536 
 $69,455 $66,561 $2,894 
  2017 2016 Change
Property operating expenses from existing properties $104,135
 $106,147
 $(2,012)
Property operating expenses from new development 3,139
 163
 2,976
Property operating expenses from acquisitions 6,801
 1,689
 5,112
Property operating expenses from properties disposed 999
 2,329
 (1,330)
  $115,074
 $110,328
 $4,746


The decrease in propertyProperty operating expenses from existing properties wasincreased in the 2022 period compared to the 2021 period, primarily due to lower spending in the 2017timing of certain advertising and promotional costs and higher property insurance costs. The 2021 period for certain CAM and marketing expenses.properties disposed includes net proceeds received from the successful appeal of property taxes for tax years prior to disposition.The 2022 period included no such refunds.


GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased $1.5increased $2.3 million or 4%, in the 20172022 period compared to the 20162021 period. The increase is primarily driven by the hiring of certain executives and other key employees throughout 2021 to drive operational and growth initiatives. The 2022 period due primarily dueincluded $2.4 million of executive severance costs and the 2021 period included $2.4 million of compensation cost related to the 2016 period includingemployees that accepted a voluntary retirement plan with an effective retirement date of March 31, 2021 and other executive severance. In addition, travel costs have increased compared to 2021 with the decrease in restrictions from COVID-19 and other corporate employee benefit costs have increased as well.


ABANDONED PRE-DEVELOPMENT COSTS
During the 2017 period, we decided to terminate a purchase option for a pre-development stage project near Detroit, Michigan and as a result, recorded a $528,000 charge, representing the cumulative related pre-development costs.
46


DEPRECIATION AND AMORTIZATION
Depreciation and amortization costs increased $13.1decreased $3.4 million or 16%, in the 20172022 period compared to the 20162021 period. The following table sets forth the changes in various components of depreciation and amortization costs from the 20172021 period to the 20162022 period (in thousands):
 20222021Increase/(Decrease)
Depreciation and amortization expenses from existing properties$52,463 $55,844 $(3,381)
Depreciation and amortization from property disposed— 38 (38)
 $52,463 $55,882 $(3,419)
  2017 2016 Change
Depreciation and amortization expenses from existing properties $79,537
 $78,690
 $847
Depreciation and amortization expenses from new development 3,524
 —
 3,524
Depreciation and amortization expenses from acquisitions 11,437
 2,340
 9,097
Depreciation and amortization from properties disposed 677
 1,048
 (371)
  $95,175
 $82,078
 $13,097


Depreciation and amortization increasedcosts decreased at our existing properties due to the accelerated amortization ofas certain construction and development related assets, as well as lease related intangibles upon store closures and demolition activities at onerecorded as part of our centers.the acquisition price of acquired properties, which are amortized over shorter lives, became fully depreciated during the reporting periods.




INTEREST EXPENSE AND
Interest expense decreased $4.5 million in the 2022 period compared to the 2021 period for the following reasons:

•During August and September 2021, we completed a public offering of $400.0 million 2.750% of senior notes and completed the early redemption of $250.0 million of 3.875% senior notes and $250.0 million of 3.75% senior notes.
•During April 2021, we completed the redemption of $150.0 million of 3.875% senior notes.
•During 2021, we paid down approximately $50.0 million of borrowings under our unsecured term loan.

LOSS ON EARLY EXTINGUISHMENT OF DEBT
In July 2017,April 2021, we completed an underwritten public offeringa partial redemption of $300.0$150.0 million of 3.875% senior notes due 2027 (the "2027 Notes"). In August 2017,notes. As part of completing the redemption, we used the net proceeds from the sale of the 2027 Notes, together with borrowings under our unsecured lines of credit, to redeem all of our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par pluspaid a make-whole premium of $13.0 million and expensed approximately $34.1 million. The loss on early extinguishment of debt includes the make-whole premium and approximately $1.5$1.0 million of unamortized debt origination costs written offand debt discount related to a debt discount and the remaining net book value of deferred 2020 Notes origination costs.senior notes.


Interest expenseOTHER INCOME (EXPENSE)
Other income (expense) increased $5.3approximately $5.6 million, or 12%, in the 20172022 period compared to the 2016 period,2021 period. The increase was primarily due to (1) the impacta $2.4 million gain on sale of converting throughout 2016 $525.0 million of debt with floating interest rates to higher fixed interest rates, (2) the 30-day LIBOR, which impacts the interest rate associated with our floating rate debt, increasing relative to its level in the 2016 period, (3)a non-real estate asset and the additional debt incurred related to2021 period including a $3.6 million foreign currency loss from the 2016 acquisitions of Westgate and Savannah.

GAIN ON SALE OF ASSETS
In May 2017, we sold our Westbrook outlet center for approximately $40.0 million, which resulted in a gain of $6.9 million.

GAIN ON PREVIOUSLY HELD INTEREST IN ACQUIRED JOINT VENTURE
On June 30, 2016, we completedsale by the purchase of our venture partner's interest in the WestgateRioCan joint venture which owned theof its outlet center in Glendale, Arizona, for a total cash price of approximately $40.9 million. The purchase was funded with borrowings under our unsecured lines of credit. Prior to the transaction, we owned a 58% interestSaint-Sauveur, Quebec in the Westgate joint venture since its formation in 2012 and accounted for it under the equity method of accounting. The joint venture is now wholly-owned and is consolidated in our financial results as of June 30, 2016. As a result of acquiring the remaining interest in the Westgate joint venture, we recorded a gain of $49.3 million, which represented the difference between the carrying book value and the fair value of our previously held equity method investment in the joint venture, as a result of the significant appreciation in the property's value since the completion of its original development and opening.

In August 2016, the Savannah joint venture, which owned the outlet center in Pooler, Georgia distributed all outparcels along with $15.0 million in cash consideration to the other partner in exchange for the partner's ownership interest. We contributed the $15.0 million in cash consideration to the joint venture, which we funded with borrowings under our unsecured lines of credit. The joint venture is now wholly-owned by us and has been consolidated in our financial results since the acquisition date. Ashad a result of acquiring the remaining interest in the Savannah joint venture, we recorded a gain of $46.3 million, which represented the difference between the carrying book value and the fair value of our previously held equity method investment in the Savannah joint venture, as a result of the significant appreciation in the property's value since the completion of its original development and opening in April 2015.50% ownership interest.


EQUITY IN EARNINGS (LOSSES) OF UNCONSOLIDATED JOINT VENTURES
Equity in earnings (losses) of unconsolidated joint ventures decreasedincreased approximately $8.9 million or 116%$243,000 in the 20172022 period compared to the 20162021 period. The followingIn the table setsbelow, information set forth for properties disposed includes the changesSaint-Sauveur, Quebec outlet center in various components of equityour Canadian joint venture, which was sold in earnings (losses) of unconsolidated joint ventures (in thousands):March 2021.
 20222021Increase/(Decrease)
Equity in earnings from existing properties$4,740 $4,307 $433 
Equity in earnings from property disposed— 190 (190)
 $4,740 $4,497 $243 
  2017 2016 Change
Equity in earnings (losses) from existing properties $(2,293) $3,671
 $(5,964)
Equity in earnings from new development 1,092
 366
 726
Equity in earnings from properties previously held in unconsolidated joint ventures —
 3,643
 (3,643)
  $(1,201) $7,680
 $(8,881)


Equity in earnings (losses) from existing properties includes our share of impairment charges totaling $9.0 million in the 2017 period related to the Bromont and Saint-Sauveur outlet centers in Canada, and totaling $2.9 million in the 2016 period related to the Bromont outlet center. . The increase in equity in earnings of unconsolidated joint ventures from new developmentexisting properties is primarily due to the incremental earnings from the Columbus outlet center, which opened in June 2016. The decrease in equity in earnings (losses) from properties previously held in unconsolidatedstrong variable rent performance at certain joint ventures in 2016 is related to2022 partially offset by the Westgate2021 period including the recognition of termination rents at two joint venture centers and Savannah joint ventures. We acquiredthe increase in variable interest rates in 2022 that has negatively impacted two of our venture partners' interest in each of these joint ventures in June 2016 and August 2016, respectively, andthat have consolidated the results of operations of these centers since the respective acquisition date.variable rate mortgages.






47


LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY


In this "Liquidity“Liquidity and Capital Resources of the Company"Company” section, the term "the Company"“the Company” refers only to Tanger Factory Outlet Centers, Inc. on an unconsolidated basis, excluding the Operating Partnership.


The Company'sCompany’s business is operated primarily through the Operating Partnership. The Company issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company, which are fully reimbursed by the Operating Partnership. The Company does not hold any indebtedness, and its only material asset is its ownership of partnership interests of the Operating Partnership. The Company'sCompany’s principal funding requirement is the payment of dividends on its common shares. The Company'sCompany’s principal source of funding for its dividend payments is distributions it receives from the Operating Partnership.


Through its ownership ofstatus as the sole general partner of the Operating Partnership, the Company has the full, exclusive and complete responsibility for the Operating Partnership'sPartnership’s day-to-day management and control. The Company causes the Operating Partnership to distribute all, or such portion as the Company may in its discretion determine, of its available cash in the manner provided in the Operating Partnership'sPartnership’s partnership agreement. The Company receives proceeds from equity issuances from time to time, but is required by the Operating Partnership'sPartnership’s partnership agreement to contribute the proceeds from its equity issuances to the Operating Partnership in exchange for partnership units of the Operating Partnership.


The Company isWe are a well-known seasoned issuer (as defined in the Securities Act) with a shelf registration that expires in June 2018February 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. As circumstances warrant, the Company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing. The Operating Partnership may use the proceeds to repay debt, including borrowings under its lines of credit, to develop new or existing properties, to make acquisitions of properties or portfolios of properties, to invest in existing or newly created joint ventures or for general corporate purposes.


The liquidity of the Company is dependent on the Operating Partnership'sPartnership’s ability to make sufficient distributions to the Company. The Operating Partnership is a party to loan agreements with various bank lenders that require the Operating Partnership to comply with various financial and other covenants before it may make distributions to the Company. The Company also guarantees some of the Operating Partnership'sPartnership’s debt. If the Operating Partnership fails to fulfill its debt requirements, which trigger the Company'sCompany’s guarantee obligations, then the Company may be required to fulfill its cash payment commitments under such guarantees. However, the Company'sCompany’s only material asset is its investment in the Operating Partnership.


The Company believes the Operating Partnership'sPartnership’s sources of working capital, specifically its cash flow from operations and borrowings available under its unsecured lines of credit,cash on hand, are adequate for it to make its distribution payments to the Company and, in turn, for the Company to make itsany minimum dividend payments to its shareholders.shareholders and to finance its continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. However, there can be no assurance that the Operating Partnership'sPartnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including its ability to make distribution payments to the Company. The unavailability of capital could adversely affect the Operating Partnership'sPartnership’s ability to pay its distributions to the Company which will, in turn, adversely affect the Company'sCompany’s ability to pay cash dividends to its shareholders. Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted, 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, and other risks detailed in “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021.


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 (excluding capital gains). While historically the Company has satisfied this distribution requirement by making cash distributions to its shareholders, it may choose to satisfy this requirement by making distributions of cash or other property, including, in limited circumstances, the Company'sCompany’s own shares.


48

As a result of this distribution requirement, the Operating Partnership cannot rely on retained earnings to fund its on-going operations to the same extent that other companies whose parent companies are not real estate investment trusts can. The Company may need to continue to raise capital in the equity markets to fund the Operating Partnership'sPartnership’s working capital needs, as well as potential new developments, expansions and renovations of existing properties, acquisitions, or investments in existing or newly created joint ventures.




The Company currently consolidates the Operating Partnership because it has (1) the power to direct the activities of the Operating Partnership that most significantly impact the Operating Partnership’s economic performance and (2) the obligation to absorb losses and the right to receive the residual returns of the Operating Partnership that could be potentially significant. The Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities and the revenues and expenses of the Company and the Operating Partnership are the same on their respective financial statements, except for immaterial differences related to cash, other assets and accrued liabilities that arise from public company expenses paid by the Company. However, all debt is held directly or indirectly at the Operating Partnership level, and the Company has guaranteed some of the Operating Partnership'sPartnership’s unsecured debt as discussed below. Because the Company consolidates the Operating Partnership, the section entitled "Liquidity“Liquidity and Capital Resources of the Operating Partnership"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.


In February 2021, we established an at-the-market share offering program (“ATM Offering”) under our shelf registration statement on Form S-3. 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. 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. The Operating Partnership currently intends to use the net proceeds from the sale of shares pursuant to the ATM Offering for working capital and general corporate purposes. As of June 30, 2022, we had approximately $60.1 million remaining available for sale under the ATM Offering program.

The following table sets forth information regarding settlements under our ATM Offering program:
Three months ended June 30,Six months ended June 30,
2022202120222021
Number of common shares settled during the period (1)
— 2,810,503 — 9,677,581 
Average price per share (1)
$— $18.85 $— $18.97 
Aggregate gross proceeds (in thousands)$— $52,977 $— $183,615 
Aggregate net proceeds after selling commissions and fees (in thousands) (1)
$— $52,221 $— $180,876 
(1)In July 2021, we had an additional 331,682 shares settle at an average price per share of $18.85 with aggregate net proceeds after commissions and fees of $6.2 million.

In May 2017, we announced that our2021, the Company’s Board of Directors authorized the repurchase of up to $125.0$80.0 million of ourthe Company’s outstanding common shares as market conditions warrant overthrough May 31, 2023. This authorization replaced a period commencingprevious repurchase authorization for approximately $80 million that expired in May 2021. The Company temporarily suspended share repurchases for the twelve months starting July 1, 2020 and ending on May 19, 2017 and expiring on May 18, 2019.June 30, 2021 in light of a repurchase covenant. On July 1, 2021, a covenant in the Company’s debt agreements (the “repurchase covenant”) prohibiting share repurchases expired. 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. 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. Between May 19, 2017The Company did not repurchase any shares for both the three and August 25, 2017 we repurchased approximately 1.9 million common shares on the open market at an average price of $25.80, totaling approximately $49.3 million exclusive of commissionssix months ended June 30, 2022 and related fees.2021. The remaining amount authorized to be repurchased under the program as of SeptemberJune 30, 20172022 was approximately $75.7$80.0 million.


In October 2017,April 2022, the Company's Board of Directors declared a $0.3425$0.20 cash dividend per common share payable on November 15, 2017May 13, 2022 to each shareholder of record on October 31, 2017,April 29, 2022, and in its capacity as General Partner of the Trustees of Tanger GP Trust declaredOperating Partnership a $0.3425$0.20 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.


49


LIQUIDITY AND CAPITAL RESOURCES OF THE OPERATING PARTNERSHIP

General Overview


In this "Liquidity“Liquidity and Capital Resources of the Operating Partnership"Partnership” section, the terms "we"“we”, "our"“our” and "us"“us” refer to the Operating Partnership or the Operating Partnership and the Company together, as the text requires.


Summary of Our Major Sources and Uses of Cash and Cash Equivalents

General Overview
Property rental income represents our primary source to pay property operating expenses, debt service, distributions and capital expenditures needed to maintain our properties.and distributions, excluding non-recurring capital expenditures and acquisitions. To the extent that our cash flow from operating activities is insufficient to cover oursuch non-recurring capital needs, including new developments, expansions of existing outlet centers,expenditures and acquisitions, and investments in unconsolidated joint ventures, we finance such activities from borrowings under our unsecured lines of credit, to the extent available, or from the proceeds from the Operating Partnership'sPartnership’s debt offerings and the Company'sCompany’s equity offerings.


We believe we achieve a strong and flexible financial position by attempting to: (1) maintain a conservativeprudent 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 unsecured lines of credit in a conservative manner and (5) preserve internally generated sources of capital by strategically divesting of underperforming 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.




The following table sets forthOur ability to access capital on favorable terms as well as to use cash from operations to continue to meet our changes in cash flows (in thousands):
  Nine months ended September 30,  
  2017 2016 Change
Net cash provided by operating activities $181,530
 $177,723
 $3,807
Net cash used in investing activities (89,052) (39,490) (49,562)
Net cash used in financing activities (95,954) (134,464) 38,510
Effect of foreign currency rate changes on cash and equivalents (54) 532
 (586)
Net increase (decrease) in cash and cash equivalents $(3,530) $4,301
 $(7,831)

Operating Activities

The increase in net cash providedliquidity needs, all of which are highly uncertain and cannot be predicted, could be affected by operating activitiesvarious risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, macroeconomic conditions, including rising interest rates and inflation, and other risks detailed in the 2017 period compared to the 2016 period was primarily due to incremental operating income as a result of the acquisition“Risk Factors” section of our venture partners' interest in our Westgate and Savannah outlet centers, previously held in unconsolidated joint ventures, in June 2016 and August 2016, respectively, and the opening of our newest wholly owned outlet center in Daytona Beach, FL, which opened in November 2016.

Investing Activities

The primary causeAnnual Report on Form 10-K for the increase in net cash used in investing activities was due to the change in restricted cash of $118.4 million. In the 2016 period, we used restricted cash, which represented a portion of the proceeds received from certain assets sales in 2015, to pay a portion of our $150.0 million floating rate mortgage loan, which had an original maturity date in August 2018, and our $28.4 million deferred financing obligation, both of which related to our Deer Park outlet center. Partially offsetting the increase in cash used in the 2017 period compared to the 2016 period was the cash used to acquire our venture partners' interest in our Westgate joint venture and Savannah joint venture in the 2016 period.year ended December 31, 2021.

Financing Activities

The primary cause for the decrease in net cash used in financing activities is due to the incremental borrowings required to fund the Company's development needs, net of asset sales proceeds, in the 2017 period compared to the 2016 period. A significant portion of the 2016 development needs was funded with the $118.4 million held in restricted cash during that period. In addition, cash used was higher in the 2016 period compared to the 2017 period due to a special dividend of approximately $21.0 million that was paid during 2016.




Capital Expenditures

The following table details our capital expenditures for consolidated outlet centers for the six months ended June 30, 2022 and 2021 (in thousands):
Six months ended June 30,
 20222021Change
Capital expenditures analysis:
New outlet center developments and expansions (1)
$18,596 $174 $18,422 
Renovations— 75 (75)
Second generation tenant allowances3,160 2,194 966 
Other capital expenditures (2)
9,158 6,446 2,712 
30,914 8,889 22,025 
Conversion from accrual to cash basis(5,197)2,947 (8,144)
Additions to rental property-cash basis$25,717 $11,836 $13,881 
  Nine months ended September 30,  
  2017 2016 Change
Capital expenditures analysis:      
New center developments $87,376
 $74,441
 $12,935
Major center renovations 13,813
 13,908
 (95)
Second generation tenant allowances 15,815
 6,963
 8,852
Other capital expenditures 19,791
 8,576
 11,215
  136,795
 103,888
 32,907
Conversion from accrual to cash basis (4,183) 8,325
 (12,508)
Additions to rental property-cash basis $132,612
 $112,213
 $20,399
New(1)The increase in new outlet center development expenditures, which include first generation tenant allowances, relatedevelopments and expansions is primarily due to construction expenditures for our Fort Worth, Daytona Beach, Lancaster and Tilton outlet centers in the 2017 period. The 2016 period included new center development expenditures for our Daytona Beach, Fort Worth, Southaven, and San Marcos outlet centers.
Major center renovations in both the 2017 and 2016 periods included construction activitiespre-development costs at our Riverheadsite in Nashville, TN and our Rehoboth Beach outlet centers. The 2016 period also included renovations at our Howell outlet center while the 2017 period also included renovations at our Myrtle Beach 17 outlet center. We expect to spend approximately $7.7 million for the remainder of 2017 to complete our current renovationother projects.
(2)The increase in other capital expenditures in the 2017 period is2022 was primarily due to timing of projects and our decision in 2020 to defer all capital projects except essential and life-safety projects to 2021 due to the installationimpact on cash flows caused by the COVID-19 pandemic.

New Development of solar panels at severalConsolidated Outlet Centers
During the second quarter of 2022, we purchased land in the Nashville, Tennessee area for approximately $8.8 million and began construction on the development of our wholly-owned outlet centerscenter. The center, which will be approximately 290,000 square feet, is expected to be completed in the fall of 2023.



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Potential Future Developments, Acquisitions and tenant interior build outs.Dispositions
Current DevelopmentsAs of the date of the filing of this report, we are in the pre-development period for other potential new developments. We may also use a joint venture arrangement to develop other potential sites. However, there can be no assurance that these potential future projects will ultimately be developed.


In the case of projects to be wholly-owned by us, we would expect to fund these projects from amounts available under our unsecured lines of credit, 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.

We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet centers. In the section below, we describe the new developments that are either currently planned, underway or recently completed. However, you should note that any developments or expansions that we, or a joint venture that we have an ownership interest in, have planned or anticipated may not be started or completed as scheduled, or may not result in accretive net income or funds from operations ("FFO"(“FFO”). See the section "Non-GAAP“Non-GAAP Supplemental Earnings Measures"Measures - "FundsFunds From Operations"Operations” below for further discussion of FFO.

In addition, we regularly evaluate acquisition or disposition proposals and engage from time to time in negotiations for acquisitions or dispositions of properties. We may also enter into letters of intent for the purchase or sale of properties. Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated, or if consummated, may not result in an increase in earnings or liquidity.


New Development of Consolidated Outlet CentersUnconsolidated Real Estate Joint Ventures

The following table summarizes our projects under development as of September 30, 2017:

Project 
Approximate square feet
(in 000's)
 Projected Total Net Cost per Square Foot
(in dollars)		 Projected Total Net Cost
(in millions)		 Costs Incurred to Date
(in millions)		 Projected Opening
New development:          
Fort Worth 352
 $256
 $90.2
 $74.7
 October 2017




Lancaster Expansion

In September 2017,From time to time, we opened a 123,000 square foot expansion of our outlet center in Lancaster, Pennsylvania.

Fort Worth

In October 2017, we opened a 352,000 square foot wholly-owned outlet center center in the greater Fort Worth, Texas area. The outlet center is located within the 279-acre Champions Circle mixed-use development adjacent to Texas Motor Speedway.

Other Potential Future Developments

As of the date of this filing, we are in the initial study period for potential new developments. We may also useform joint venture arrangements to develop other potential sites. There can be no assurance, however, that these potential future projects will ultimately be developed.outlet centers. As of June 30, 2022 we have partial ownership interests in six unconsolidated outlet centers totaling approximately 2.1 million square feet, including two outlet centers in Canada. See Note 5 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.


In the case of projects to be wholly-owned by us, we expectWe may elect to fund these projects from amounts available under our unsecured linescash needs of credit, but may also fund them with capital from additional public debt and equity offerings. For projects to be developed througha joint venture arrangements, we may use collateralized constructionthrough equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans, to fund a portion of the project, withalthough such funding is not typically required contractually or otherwise. We separately report investments in joint ventures for which accumulated distributions have exceeded investments in, and our share of the equity requirements funded from sources described above. See “Off-Balance Sheet Arrangements” for a discussion of unconsolidated joint venture development activities.

Financing Arrangements

As of September 30, 2017, unsecured borrowings represented 91% of our outstanding debt and 89%net income or loss of, the gross book value of our real estate portfolio was unencumbered. We maintain unsecured lines of credit that provide for borrowings of up to $520.0 million. The unsecured lines of credit include a $20.0 million liquidity line and a $500.0 million syndicated line. Our unsecured lines of credit bear interest at a rate of LIBOR + 0.90% and the syndicated line may be increased up to $1.0 billion through an accordion feature in certain circumstances. The unsecured lines of credit have an expiration date of October 24, 2019 with an option for a one year extension. The Company guarantees the Operating Partnership's obligations under these lines. As of September 30, 2017, we had $366.3 million available under our unsecured lines of credit after taking into account outstanding letters of credit of $5.5 million.

In July 2017, we completed an underwritten public offering of $300.0 million of our 3.875% senior notes due 2027 (the "2027 Notes"). The 2027 Notes priced at 99.579% of the principal amount to yield 3.926% to maturity. The 2027 Notes pay interest semi-annually at a rate of 3.875% per annum and mature on July 15, 2027. The estimated net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $295.9 million. In August 2017, we used the net proceeds from the sale of the 2027 Notes, together with borrowings under our unsecured lines of credit, to redeem all of our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par plus a “make-whole” premium of approximately $34.1 million.

Subsequent to quarter end, we successfully settled litigation with the estate of our former partner in the Foxwoods, Connecticut joint venture.  In return for mutual releases and no cash consideration, the estate tendered its partnership interest to the Company. Prior to this settlement, we had a 100% economic interestventures within other liabilities in the consolidated balance sheets because we are committed and intend to provide further financial support to these joint ventures. We believe our joint ventures will be able to fund their operating and capital needs for the next twelve months based on their sources of working capital, specifically cash flow from operations, access to contributions from partners, and ability to refinance debt obligations, including the ability to exercise upcoming extensions of near term maturities.

Our joint ventures are typically encumbered by a mortgage on the joint venture property. We provide guarantees to lenders for our joint ventures which include standard non-recourse carve out indemnifications for losses arising from items such as but not limited to fraud, physical waste, payment of taxes, environmental indemnities, misapplication of insurance proceeds or security deposits and failure to maintain required insurance. A default by a joint venture under its debt obligations may expose us to liability under the guaranty. For construction and mortgage loans, we may include a guaranty of completion as well as a resultprincipal guaranty ranging from 0% to 17% of our preferred equity interestprincipal. The principal guarantees include terms for release based upon satisfactory completion of construction and the capitalperformance targets including occupancy thresholds and distributionminimum debt service coverage tests. Our joint ventures may contain make whole provisions in the joint venture agreement.  On November 3, 2017, Tanger repaid the $70.3 million floating rate mortgage loan secured by the property with borrowings under its unsecured floating rate lines of credit.

We intend to retain the ability to raise additional capital, including public debt or equity, to pursue attractive investment opportunitiesevent 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 is a well-known seasoned issuer with a joint shelf registration with the Operating Partnership, expiring in June 2018, that allows us to register unspecified amounts of different classes of securities on Form S-3. To generate capital to reinvest into other attractive investment opportunities, we may also consider the use of additional operational and developmental joint ventures, 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. Based on cash provided by operations, existing lines of credit, ongoing relationships with certain financial institutions and our ability to sell debt or issue equity subject to market conditions, we believe that we have access to the necessary financing to fund the planned capital expenditures through the end of 2018.



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 unitholdersdemands are 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 ourany existing unsecured lines of credit or invested in short-term money market or other suitable instruments.guarantees.

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 are our unsecured line of credit facilities, occurs in 2020 assuming the extension option is exercised.
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 currently are in compliance with all of our debt covenants. We expect to remain in compliance with all of our existing debt covenants; however, should circumstances arise that would cause us to be in default, the various lenders would have the ability to accelerate the maturity on our outstanding debt.

We believe our most restrictive covenants are contained in our senior, unsecured notes. Key financial covenants and their covenant levels, which are calculated based on contractual terms, include the following:
Senior unsecured notes financial covenantsRequiredActual
Total consolidated debt to adjusted total assets<60%52%
Total secured debt to adjusted total assets<40%5%
Total unencumbered assets to unsecured debt>150%184%


OFF-BALANCE SHEET ARRANGEMENTS

The following table details certain information as of September 30, 2017 about various unconsolidated real estate joint ventures in which we have an ownership interest:
Joint Venture Outlet Center Location Ownership % 
Square Feet
(in 000's)
 Carrying Value of Investment (in millions)
Columbus Columbus, OH 50.0% 355
 $6.8
National Harbor National Harbor, MD 50.0% 341
 2.4
RioCan Canada Various 50.0% 924
 116.6
Investments included in total assets     $125.8
         
Charlotte(1)
 Charlotte, NC 50.0% 398
 $(3.6)
Galveston/Houston(1)
 Texas City, TX 50.0% 353
 (12.5)
Investments included in other liabilities     $(16.1)
(1)The negative carrying value is due to the distributions of proceeds from mortgage loans and quarterly distributions of excess cash flow exceeding the original contributions from the partners.


Our joint ventures are generally subject to buy-sell provisions which 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. Under these provisions, one partner sets a price for the property, then the other partner has the option to either (1) purchase their partner's interest based on that price or (2) sell its interest to the other partner based on that price. Since the partner other than the partner who triggers the provision has the option to be the buyer or seller, we don'tdo not consider this arrangement to be a mandatory redeemable obligation.





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Contractual Obligations

There were no material changes in our commitments during the six months ended June 30, 2022 under contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, other than the following updates to our contractual obligations for future debt and interest payments over the next five years and thereafter as of June 30, 2022.

Future Debt Obligations
As described further in Note 7 of the notes to the consolidated financial statements, as of June 30, 2022, scheduled maturities of our existing long-term debt for the remainder of 2022, 2023, 2024, 2025 and 2026 are $2.3 million, $44.9 million, $305.1 million, $1.5 million and $355.7 million, respectively. As of June 30, 2022, scheduled maturities after 2026 aggregate to $700.0 million.

Future Interest Payments
We provide guaranteesare obligated to lenders formake 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 June 30, 2022, these interest obligations total approximately $198.3 million and range from approximately $17.3 million to $40.4 million on an annual basis over the next five years. If prevailing interest rates continue to rise, then future interest payments related to our variable debt outstanding would increase.

Cash Flows

The following table sets forth our changes in cash flows from June 30, 2022 and 2021 (in thousands):
Six months ended June 30,
 20222021Change
Net cash provided by operating activities$89,196 $91,279 $(2,083)
Net cash provided by (used in) investing activities(8,095)4,009 (12,104)
Net cash used in financing activities(48,018)(72,761)24,743 
Effect of foreign currency rate changes on cash and equivalents(27)(73)46 
Net increase (decrease) in cash and cash equivalents$33,056 $22,454 $10,602 

Operating Activities
In 2022, our net cash provided by operating activities decreased year over year primarily due to changes in working capital. The decrease was partially offset by an increase in rental revenues primarily due an increase in occupancy rates, variable rental revenues and reversals of revenue reserves.

Investing Activities
The decrease in net cash provided by (used in) investing activities was primarily due to the purchase of land at our new center in Nashville, Tennessee, paired with increased additions to rental properties in the 2022 period. The 2021 period included net proceeds of approximately $8.1 million received in 2021 from the sale of our Jeffersonville outlet center, while the 2022 period included lower distributions in excess of cumulative earnings from unconsolidated joint ventures and lower other investing activities. In addition, we made a $7.0 million contribution to the Galveston/Houston joint venture in 2021 to reduce the principal balance of the mortgage loan. No property sales or contributions to joint ventures occurred in 2022. The above changes were all partially offset by net proceeds on the sale of non-real estate assets of $14.6 million that occurred in 2022.









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Financing Activities
Net cash used in financing activities decreased during the first six months of 2022 primarily due to 2021 activity that included 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 include standard non-recourse carve out indemnificationsincluded a make-whole premium of $13.0 million. In addition, in March 2021 and June 2021, we paid down a total of $50.0 million of borrowings under our unsecured term loan with cash on hand. These decreases were partially offset by the proceeds from our common share offering of $180.9 million in 2021 under our ATM offering program. Additionally, for losses arising from items suchthe six months ended June 30, 2022, there was an increase in dividends paid.

Financing Arrangements

As of June 30, 2022, unsecured borrowings represented 96% of our outstanding debt and 92% 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.

As of June 30, 2022, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million. The unsecured lines of credit as butof June 30, 2022 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.

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 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, the sale or lease of outparcels on our existing properties and the sale of certain properties that do not limitedmeet our long-term investment criteria. Based on cash provided by operations, existing lines of credit, ongoing relationships with certain financial institutions and our ability to fraud, physical waste,sell debt or issue equity subject to market conditions, we believe that we have access to the necessary financing to fund the planned capital expenditures for at least the next twelve months.

We anticipate that adequate cash will be available to fund our operating and administrative expenses, regular debt service obligations, and the payment of taxes, environmental indemnities, misapplicationdividends in accordance with REIT requirements in both the short and long-term. Although we receive most of insuranceour 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. 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.

The extent to which the COVID-19 pandemic continues to impact our financial condition, results of operations and cash flows will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, the timing or effectiveness of any vaccines or treatments, and the direct and indirect economic effects of the pandemic and containment measures, among others.

As of June 30, 2022, the Company’s total liquidity was approximately $714.2 million, including cash and cash equivalents on the Company’s balance sheet and the full undrawn capacity under its $520 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 COVID-19 pandemic, 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 unsecured term loan due April 2024.

Equity Offerings under the ATM Offering Program
In February 2021, the Company established the ATM Offering program whereby it may offer and sell the Company's 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 or security depositsof $187.1 million and failureleaving a remaining authorization of $60.1 million. The proceeds were contributed to maintain required insurance. For constructionthe Operating Partnership and term loans, we may include a guarantythen used primarily to reduce indebtedness as described in the sections immediately below. There were no shares sold under the ATM program for the three and six months ended June 30, 2022.
53


Debt Covenants

The Operating Partnership’s debt agreements require the maintenance of completion as well as a principal guaranty ranging from 5% to 100% of principal.  The principal guarantees include terms for release based upon satisfactory completion of construction and performance targetscertain ratios, including occupancy thresholds and minimum debt service coverage tests.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 June 30, 2022 are, in compliance with all of our debt covenants. Our joint ventures may contain make whole provisionscontinued compliance with these covenants depends on many factors and could be impacted by current or future economic conditions, including those associated with the COVID-19 pandemic. Failure to comply with these covenants would result in a default which, if we were unable to cure or obtain a waiver from the lenders, could accelerate the repayment obligations. Further, in the event of default, the Company may be restricted from paying dividends to its shareholders in excess of dividends required to maintain its REIT qualification. Accordingly, an event of default could have a material and adverse impact on us. As a result, we have considered our short-term (one year or less from the date of filing these financial statements) liquidity needs and the adequacy of our estimated cash flows from operating activities and other financing sources to meet these needs. These other sources include but are not limited to: existing cash, ongoing relationships with certain financial institutions, our ability to sell debt or issue equity subject to market conditions and proceeds from the potential sale of non-core assets. We believe that demandswe have access to the necessary financing to fund our short-term liquidity needs.

As of June 30, 2022, we believe our most restrictive covenants are madecontained in our senior, unsecured notes. Key financial covenants and their covenant levels, which are calculated based on any existing guarantees.contractual terms, include the following:

Senior unsecured notes financial covenantsRequiredActual
Total consolidated debt to adjusted total assets< 60%41 %
Total secured debt to adjusted total assets< 40%2 %
Total unencumbered assets to unsecured debt> 150%236 %
Consolidated Income Available for Debt Service to Annual Debt Service Charge> 1.5 x5.7 

In addition, key financial covenants for our lines of credit and term loan, include the following as of June 30, 2022:

RequiredActual
Total Liabilities to Total Adjusted Asset Value<60%37 %
Secured Indebtedness to Adjusted Unencumbered Asset Value< 35%5 %
EBITDA to Fixed Charges> 1.5 x4.5 
Total Unsecured Indebtedness to Adjusted Unencumbered Asset Value<60%33 %
Unencumbered Interest Coverage Ratio> 1.5 x5.5 

Depending on the future economic impact of COVID-19, other covenants related to credit facilities, term loans, and other debt obligations could become one of our most restrictive covenants.

54

Debt of unconsolidated joint ventures


The following table details information regarding the outstanding debt of the unconsolidated joint ventures and principal guarantees of such debt provided by us as of SeptemberJune 30, 20172022 (dollars in millions):
Joint VentureTotal Joint
Venture Debt		Maturity DateInterest RatePercent Guaranteed by the Operating PartnershipMaximum Guaranteed Amount by the Company
Charlotte$100.0 July 20284.27%— %$— 
Columbus71.0 November 2022LIBOR + 1.85%16.8 %11.9 
Galveston/Houston64.5 July 2023LIBOR + 1.85%15.5 %10.0 
National Harbor95.0 January 20304.63 %— %— 
Debt origination costs(1.0)
$329.5 $21.9 


Critical Accounting Estimates
Joint Venture Total Joint
Venture Debt		 Maturity Date Interest Rate Percent Guaranteed by the Operating Partnership Maximum Guaranteed Amount by the Company
Charlotte $90.0
 November 2018 LIBOR + 1.45% 5.0% $4.5
Columbus 85.0
 November 2019 LIBOR + 1.65% 7.5% 6.4
Galveston/Houston(1)
 80.0
 July 2020 LIBOR + 1.65% 12.5% 10.0
National Harbor(2)
 87.0
 November 2019 LIBOR + 1.65% 10.0% 8.7
RioCan Canada(3)
 11.4
 May 2020 5.75% 28.1% 3.2
Debt origination costs (2.0)        
  $351.4
       $32.8
(1)In July, the joint venture amended and restated the initial construction loan to increase the amount available to borrow from $70.0 million to $80.0 million and extended the maturity date until July 2020 with two one-year options. The amended and restated loan also changed the interest rate from LIBOR + 1.50% to an interest rate of LIBOR + 1.65%. At the closing of the amendment, the joint venture distributed approximately $14.5 million equally between the partners.
(2)100% completion guaranty; 10% principal guaranty.
(3)The joint venture debt amount includes premium of approximately $405,000.


FeesThe preparation of financial statements and related disclosures in conformity with U.S. 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. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from unconsolidated joint venturesthese estimates, and such differences may be material. Management believes the Company’s critical accounting estimates are those related to impairment of long-lived assets, impairment of investments, revenue recognition and collectibility of operating lease receivables. Management considers these estimates critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The Company’s senior management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of the Company’s Board of Directors.


Fees we received for various services provided to our unconsolidated joint ventures were recognized in other income as follows (in thousands):
  Three months ended Nine months ended
  September 30, September 30,
  2017 2016 2017 2016
Fee:      
  
Management and marketing $564
 $656
 1,676
 2,199
Development and leasing 20
 65
 $87
 $611
Loan Guarantee 4
 85
 13
 449
Total Fees $588
 $806
 $1,776
 $3,259

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to our 2016Our Annual Report on Form 10-K offor the Company and the Operating Partnership foryear ended December 31, 2021 contains a discussion of our critical accounting policies which include principlesestimates in the Management's Discussion and Analysis of consolidation, acquisitionFinancial Condition and Results of real estate, cost capitalization, impairment of long-lived assets and revenue recognition.Operations section. There have been no material changes to these policiesestimates during the three months and six months ended June 30, 2022, other than discussed below.

Revenue recognition and collectibility of operating lease receivables

We, as a lessor, retain substantially all of the risks and benefits of ownership of our outlet centers and account for our leases as operating leases. We accrue fixed lease income on a straight-line basis over the terms of the leases, when we believe substantially all lease income, including the related straight-line rent receivable, is probable of collection. Our assessment of collectability requires the exercise of considerable judgment and incorporates available operational performance measures such as sales and the aging of billed amounts as well as other publicly available information with respect to our tenant’s financial condition, liquidity and capital resources, including declines in 2017.such conditions due to, or amplified by, the COVID-19 pandemic. When a tenant seeks to reorganize its operations through bankruptcy proceedings, we assess the collectability of receivable balances including, among other things, the timing of a tenant’s bankruptcy filing and our expectations of the assumption by the tenant in bankruptcy proceeding of leases at the Company’s properties on substantially similar terms. In the event that we determine accrued receivables are not probable of collection, lease income will be recorded on a cash basis, with the corresponding tenant receivable and straight-line rent receivable charged as a direct write-off against lease income in the period of the change in our collectability determination.


Recent Accounting Pronouncements



See Note 19 to the consolidated financial statements for information on recently adopted accounting standards and new accounting pronouncements issued.


55

NON-GAAP SUPPLEMENTAL MEASURES


Funds From Operations


Funds From Operations ("FFO"(“FFO”) is a widely used measure of the operating performance for real estate companies that supplements net income (loss) determined in accordance with GAAP. We determine FFO based on the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"(“NAREIT”), of which we are a member. In December 2018, NAREIT issued “NAREIT Funds From Operations White Paper - 2018 Restatement” which clarifies, where necessary, existing guidance and consolidates alerts and policy bulletins into a single document for ease of use. NAREIT defines FFO representsas net income (loss) (computedavailable to the Company’s common shareholders computed in accordance with GAAP) before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plusGAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains or losses from sales of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment losses onwrite-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate of consolidated real estateheld by the entity and (v) after adjustments for unconsolidated partnerships and joint ventures including depreciation and amortization, and impairment lossescalculated to reflect FFO on investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures.same basis.


FFO is intended to exclude historical cost depreciation of real estate as required by GAAP which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization of real estate assets, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.income (loss).


We present FFO because we consider it an important supplemental measure of our operating performance. In addition, a portion of cash bonus compensation to certain members of management is based on our FFO or Adjusted Funds From Operations ("AFFO"),Core FFO, which is described in the section below. We believe it is useful for investors to have enhanced transparency into how we evaluate our performance and that of our management. In addition, FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is also widely used by us and others in our industry to evaluate and price potential acquisition candidates. We believe that FFO payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FFO, is useful to investors because it facilitates the comparison of dividend coverage between REITs. NAREIT has encouraged its member companies to report their FFO as a supplemental, industry-wide standard measure of REIT operating performance.


FFO has significant limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:


•FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;


•FFO does not reflect changes in, or cash requirements for, our working capital needs;


•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and FFO does not reflect any cash requirements for such replacements; and


FFO, which includes discontinued operations, may not be indicative of our ongoing operations; and

•Other companies in our industry may calculate FFO differently than we do, limiting its usefulness as a comparative measure.


Because of these limitations, FFO should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or our dividend paying capacity. We compensate for these limitations by relying primarily on our GAAP results and using FFO only as a supplemental measure.






Adjusted

56

Core FFO

If applicable, we present Core Funds From Operations

We present AFFO (“Core FFO”) as a supplemental measure of our performance. We define AFFOCore FFO as FFO further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. These further adjustments are itemized in the table below.below, if applicable. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating AFFOCore FFO you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of AFFOCore FFO should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.


We present AFFOCore FFO because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we believe it is useful for investors to have enhanced transparency into how we evaluate management’s performance and the effectiveness of our business strategies. We use AFFOCore FFO when certain material, unplanned transactions occur as a factor in evaluating management'smanagement’s performance and to evaluate the effectiveness of our business strategies, and may use AFFOCore FFO when determining incentive compensation.


AFFOCore FFO has limitations as an analytical tool. Some of these limitations are:


AFFO•Core FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;


AFFO•Core FFO does not reflect changes in, or cash requirements for, our working capital needs;


•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and AFFOCore FFO does not reflect any cash requirements for such replacements;


AFFO•Core FFO does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and


•Other companies in our industry may calculate AFFOCore FFO differently than we do, limiting its usefulness as a comparative measure.


Because of these limitations, AFFOCore FFO should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using AFFOCore FFO only as a supplemental measure.






57

Below is a reconciliation of net income to FFO available to common shareholders and AFFOCore FFO available to common shareholders (in thousands, except per share amounts):
 Three months endedSix months ended
 June 30,June 30,
 2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Adjusted for:
Depreciation and amortization of real estate assets - consolidated25,615 27,185 51,276 54,739 
Depreciation and amortization of real estate assets - unconsolidated joint ventures2,791 2,913 5,545 5,909 
Loss on sale of joint venture property, including foreign currency effect (1)
— — — 3,704 
FFO49,225 32,694 99,102 71,290 
Allocation of earnings to participating securities(424)(302)(858)(694)
FFO available to common shareholders (2)
$48,801 $32,392 $98,244 $70,596 
As further adjusted for:
Compensation related to voluntary retirement plan and other executive severance (3)
2,447 — 2,447 2,418 
Gain on sale of non-real estate asset (4)
(2,418)— (2,418)— 
Loss on early extinguishment of debt (5)
— 14,039 — 14,039 
Impact of above adjustment to the allocation of earnings to participating securities— (106)— (128)
Core FFO available to common shareholders (2)
$48,830 $46,325 $98,273 $86,925 
FFO available to common shareholders per share - diluted (2)
$0.45 $0.30 $0.90 $0.68 
Core FFO available to common shareholders per share - diluted (2)
$0.45 $0.43 $0.90 $0.84 
 
Weighted Average Shares:
Basic weighted average common shares103,630 100,409 103,607 97,504 
Effect of notional units421 818 413 685 
Effect of outstanding options and restricted common shares703 771 720 728 
Diluted weighted average common shares (for earnings per share computations)104,754 101,998 104,740 98,917 
Exchangeable operating partnership units4,762 4,795 4,762 4,795 
Diluted weighted average common shares (for FFO per share computations) (2)
109,516 106,793 109,502 103,712 
(1)Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.
(2)Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. 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.
(3)For the 2022 period, represents executive severance costs. For the 2021 period, includes compensation costs related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021 and other executive severance costs.
(4)Represents gain on sale of the corporate aircraft.
(5)In April 2021, the Company completed a partial redemption of $150.0 million aggregate principal amount of its $250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash. The loss on extinguishment of debt includes a make-whole premium of $13.0 million.

58
  Three months ended Nine months ended
  September 30, September 30,
  2017 2016 2017 2016
Net income (loss) $(16,034) $72,774
 $38,427
 $178,693
Adjusted for:        
Depreciation and amortization of real estate assets - consolidated 30,396
 28,850
 93,634
 80,992
Depreciation and amortization of real estate assets - unconsolidated joint ventures 3,583
 4,325
 10,971
 15,472
Impairment charges - unconsolidated joint ventures 9,021
 2,919
 9,021
 2,919
Gain on sale of assets —
 —
 (6,943) (4,887)
Gain on previously held interests in acquired joint ventures —
 (46,258) —
 (95,516)
FFO 26,966
 62,610
 145,110
 177,673
FFO attributable to noncontrolling interests in other consolidated partnerships —
 (3) —
 (62)
Allocation of earnings to participating securities (306) (539) (1,346) (1,675)
FFO available to common shareholders  (1)
 $26,660
 $62,068
 $143,764
 $175,936
As further adjusted for:        
Compensation related to director and executive officer terminations(2)
 —
 887
 —
 1,180
Acquisition costs —
 487
 —
 487
Demolition costs —
 259
 —
 441
Gain on sale of outparcel —
 (1,418) —
 (1,418)
Abandoned pre-development costs (99) —
 528
 —
Make-whole premium due to early extinguishment of debt (3)
 34,143
 —
 34,143
 —
Write-off of debt discount and debt origination costs due to early extinguishment of debt (3)
 1,483
 —
 1,483
 882
Impact of above adjustments to the allocation of earnings to participating securities (249) (2) (254) (15)
AFFO available to common shareholders (1)
 $61,938
 $62,281
 $179,664
 $177,493
FFO available to common shareholders per share - diluted (1)
 $0.27
 $0.62
 $1.44
 $1.75
AFFO available to common shareholders per share - diluted (1)
 $0.63
 $0.62
 $1.80
 $1.76
         
Weighted Average Shares:        
Basic weighted average common shares 93,923
 95,156
 94,781
 95,075
Effect of notional units —
 426
 —
 393
Effect of outstanding options and restricted common shares —
 90
 23
 68
Diluted weighted average common shares (for earnings per share computations) 93,923
 95,672
 94,804
 95,536
Exchangeable operating partnership units 5,028
 5,053
 5,028
 5,053
Diluted weighted average common shares (for FFO and AFFO per share computations) (1)
 98,951
 100,725
 99,832
 100,589

(1)Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. 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)Represents cash severance and accelerated vesting of restricted shares associated with the departure of an officer in August 2016 and the accelerated vesting of restricted shares due to the death of a director in February 2016.
(3)Due to charges related to the redemption of our $300.0 million 6.125% senior notes due 2020 and the January 28, 2016 early repayment of the $150.0 million mortgage secured by the Deer Park property, which was scheduled to mature August 30, 2018.





Portfolio Net Operating Income and Same Center NOINet Operating Income


We present portfolio net operating income ("(“Portfolio NOI"NOI”) and same center net operating income ("(“Same Center NOI"NOI”) as supplemental measures of our operating performance. Portfolio NOI represents our property level net operating income which is defined as total operating revenues less property operating expenses and excludes termination fees and non-cash adjustments including straight-line rent, net above and below market rent amortization, impairment charges, loss on early extinguishment of debt and gains or losses on the sale of outparcelsassets recognized during the periods presented. We define Same Center NOI as Portfolio NOI for the properties that were operational for the entire portion of both comparable reporting periods and which were not acquired, or subject to a material expansion or non-recurring event, such as a natural disaster, during the comparable reporting periods. We present Portfolio NOI and Same Center NOI on both a consolidated and total portfolio, including pro rata share of unconsolidated joint ventures, basis.


We believe Portfolio NOI and Same Center NOI are non-GAAP metrics used by industry analysts, investors and management to measure the operating performance of our properties because they provide performance measures directly related to the revenues and expenses involved in owning and operating real estate assets and provide a perspective not immediately apparent from net income (loss), FFO or AFFO.Core FFO. Because Same Center NOI excludes properties developed, redeveloped, acquired and sold; as well as non-cash adjustments, gains or losses on the sale of outparcels and termination rents; it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for both comparable periods. Other REITs may use different methodologies for calculating Portfolio NOI and Same Center NOI, and accordingly, our Portfolio NOI and Same Center NOI may not be comparable to other REITs.


Portfolio NOI and Same Center NOI should not be considered alternatives to net income (loss) or as an indicator of our financial performance since they do not reflect the entire operations of our portfolio, nor do they reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other non-property income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. Because of these limitations, Portfolio NOI and Same Center NOI should not be viewed in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Portfolio NOI and Same Center NOI only as supplemental measures.





59


Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio and total portfolio at pro rata share (in thousands):
Three months endedSix months ended
June 30,June 30,
2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Adjusted to exclude:
Equity in earnings of unconsolidated joint ventures(2,227)(2,728)(4,740)(4,497)
Interest expense11,576 13,338 23,210 27,700 
Loss on early extinguishment of debt (1)
— 14,039 — 14,039 
Other (income) expense(2,576)(654)(2,759)2,851 
Depreciation and amortization26,220 27,732 52,463 55,882 
Other non-property (income) expense63 307 234 (93)
Corporate general and administrative expenses19,328 15,746 34,813 32,517 
Non-cash adjustments (2)
(157)728 1,363 1,571 
Lease termination fees(35)(127)(2,631)(800)
Portfolio NOI - Consolidated73,011 70,977 144,234 136,108 
Non-same center NOI - Consolidated20 (1,562)83 (1,645)
Same Center NOI - Consolidated (3)
$73,031 $69,415 $144,317 $134,463 
Portfolio NOI - Consolidated$73,011 $70,977 $144,234 $136,108 
Pro rata share of unconsolidated joint ventures6,804 6,871 13,707 12,952 
Portfolio NOI - total portfolio at pro rata share79,815 77,848 157,941 149,060 
Non-same center NOI - total portfolio at pro rata share20 (1,900)83 (1,985)
Same Center NOI - total portfolio at pro rata share (3)
$79,835 $75,948 $158,024 $147,075 
  Three months ended Nine months ended
  September 30, September 30,
  2017 2016 2017 2016
Net income (loss) $(16,034) $72,774
 $38,427
 $178,693
Adjusted to exclude:        
Equity in (earnings) losses of unconsolidated joint ventures 5,893
 (715) 1,201
 (7,680)
Interest expense 16,489
 15,516
 49,496
 44,200
Gain on sale of assets —
 (1,418) (6,943) (6,305)
Gain on previously held interests in acquired joint ventures —
 (46,258) —
 (95,516)
Loss on early extinguishment of debt 35,626
 —
 35,626
 —
Other non-operating (income) expense (591) (24) (683) (378)
Depreciation and amortization 30,976
 29,205
 95,175
 82,078
Other non-property (income) expenses 372
 (47) 993
 (437)
Abandoned pre-development costs (99) —
 528
 —
Acquisition costs —
 487
 —
 487
Demolition Costs —
 259
 —
 441
Corporate general and administrative expenses 11,020
 12,076
 33,499
 34,989
Non-cash adjustments(1)
 (1,020) (967) (2,580) (2,938)
Termination rents (162) (1,450) (2,796) (3,491)
Portfolio NOI 82,470
 79,438
 241,943
 224,143
Non-same center NOI(2)
 (9,813) (7,320) (29,643) (13,514)
Same Center NOI $72,657
 $72,118
 $212,300
 $210,629
(1)In April 2021, the Company completed a partial redemption of $150.0 million aggregate principal amount of its $250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash. The loss on extinguishment of debt includes a make-whole premium of $13.0 million.
(1)Non-cash items include straight-line rent, net above and below market rent amortization and gains or losses on outparcel sales, as applicable.
(2)Excluded from Same Center NOI:
(2)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.
(3)Sold outlet centers excluded from Same Center NOI:
Outlet centers opened:Outlet centers sold:Outlet centers acquired:Outlet center expansions:
Daytona BeachNovember 2016Fort MyersJanuary 2016Glendale (Westgate)June 2016LancasterSeptember 2017
JeffersonvilleJanuary 2021ConsolidatedWestbrook
Saint-Sauveur, QuebecMay 2017March 2021Unconsolidated JVSavannahAugust 2016





60


Adjusted EBITDA, EBITDAre and Adjusted EBITDAre



We present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as adjusted for items described below (“Adjusted EBITDA”), EBITDA for Real Estate (“EBITDAre”) and Adjusted EBITDAre, all non-GAAP measures, as supplemental measures of our operating performance. 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 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, 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 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.
Adjusted EBITDAre is defined as EBITDAre excluding gains and losses on early extinguishment of debt, net, casualty gains and losses, compensation related to voluntary retirement plan and other executive officer severance, gain on sale of non-real estate asset, casualty gains and losses, gains and losses on sale of outparcels, and other items that that we do not consider indicative of the Company's ongoing operating performance.
We present Adjusted EBITDA, EBITDAre and Adjusted EBITDAre as we believe they are useful for investors, creditors and rating agencies as they provide additional performance measures that are independent of a Company’s existing capital structure to facilitate the evaluation and comparison of the Company’s operating performance to other REITs and provide a more consistent metric for comparing the operating performance of the Company’s real estate between periods.
Adjusted EBITDA, EBITDAre and Adjusted EBITDAre have significant limitations as analytical tools, including:
•They do not reflect our interest expense;

•They do not reflect gains or losses on sales of operating properties or 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;

•Adjusted EBITDA and Adjusted EBITDAre do not reflect gains and losses on extinguishment of debt and other items that may affect operations; and

•Other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA, EBITDAre and Adjusted EBITDAre should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, EBITDAre and Adjusted EBITDAre only as supplemental measures.
61

Below is a reconciliation of Net Income to Adjusted EBITDA (in thousands):
Three months endedSix months ended
June 30,June 30,
2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Adjusted to exclude:
Interest expense11,576 13,338 23,210 27,700 
Depreciation and amortization26,220 27,732 52,463 55,882 
Loss on sale of joint venture property, including foreign currency effect (1)
— — — 3,704 
Compensation related to voluntary retirement plan and other executive severance (2)
2,447 — 2,447 2,418 
Gain on sale of non-real estate asset (3)
(2,418)— (2,418)— 
Loss on early extinguishment of debt (4)
— 14,039 — 14,039 
Adjusted EBITDA$58,644 $57,705 $117,983 $110,681 

Below is a reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands):
Three months endedSix months ended
June 30,June 30,
2022202120222021
Net income$20,819 $2,596 $42,281 $6,938 
Adjusted to exclude:
Interest expense11,576 13,338 23,210 27,700 
Depreciation and amortization26,220 27,732 52,463 55,882 
Loss on sale of joint venture property, including foreign currency effect (1)
— — — 3,704 
Pro-rata share of interest expense - unconsolidated joint ventures1,579 1,455 3,037 2,928 
Pro-rata share of depreciation and amortization - unconsolidated joint ventures2,791 2,913 5,545 5,909 
EBITDAre$62,985 $48,034 $126,536 $103,061 
Compensation related to voluntary retirement plan and other executive officer severance (2)
2,447 — 2,447 2,418 
Gain on sale of non-real estate asset (3)
(2,418)— (2,418)— 
Loss on early extinguishment of debt (4)
— 14,039 — 14,039 
Adjusted EBITDAre$63,014 $62,073 $126,565 $119,518 
(1)Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.
(2)For the 2022 period, represents executive severance costs. For the 2021 period, includes compensation costs related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021 and other executive severance costs.
(3)Represents gain on sale of the corporate aircraft.
(4)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. The loss on extinguishment of debt includes a make-whole premium of $13.0 million.



62

ECONOMIC CONDITIONS AND OUTLOOK


We are closely monitoring the impact of the COVID-19 pandemic, along with rising inflation, supply chain and labor issues, and rising interest rates on all aspects of our business and geographies, including how it will impact our tenants and business partners.
The majority of our leases contain provisions designed to mitigate the impact of inflation. Such provisions include clauses for the escalation of base rent and clauses enabling us to receive percentage rentals based on tenants'tenants’ gross sales (above predetermined levels) which generally increase as prices rise. 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.

The current challenging retail environment could impact our business in the short-term as our operations are subject to the results of operations of our retail tenants. A portion of our rental revenues are derived from percentage rents that directly depend on the sales volume of certain tenants. Accordingly, declines in these tenants' results of operationstenants’ sales would reduce the income produced by our properties. If the sales or profitability of our retail tenants decline sufficiently, whether due to a change in consumer preferences, health concerns, legislative changes that increase the cost of their operations or otherwise, such tenants maybemay be unable to pay their existing rents as such rents would represent a higher percentage of their sales. While we believe outlet stores will continue
In addition, certain of our lease agreements include co-tenancy and/or sales-based provisions that may allow a tenant to bepay reduced rent and/or terminate a profitable and fundamental distribution channel for many brand name manufacturers, some retail formats are more successful than others. As typical in the retail industry, certain tenants have closed, or will close, certain stores by terminating their lease prior to its natural expiration or as a result of filing for protection under bankruptcy laws, or may request modifications to their existing lease terms.

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. As of January 1, 2017, excluding the Westbrook outlet center, which was sold in the second quarter of 2017, we had approximately 1.5 million square feet, or 12% of our consolidated portfolio at that time, coming up for renewal during 2017. As of September 30, 2017, we had renewed approximately 78% of this space. In addition, for the rolling twelve months ended September 30, 2017, we completed renewals and re-tenanted space totaling 1.5 million square feet at a blended 11.8% increase in average base rental rates compared to the expiring rates. While we continue to attract and retain additional tenants, there can be no assurance that we can achieve similar base rental rates. In addition, if we were unablefail to successfully renewmaintain certain occupancy levels or re-lease a significant amount of this space on favorable economic terms,retain specified named tenants, or if the losstenant 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 rent could have a material adverse effect onturn may negatively impact our results of operations.

Our outlet 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. NoAs of June 30, 2022 no one tenant (including affiliates) accounts for more than 8% of our square feet or 7%6% of our combined baserental revenues.

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 2022, approximately 2.1 million square feet, or 17% 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 July 31, 2022, we had lease renewals executed or in process for 66.4% of the space scheduled to expire during 2022 compared to 59.8% of the space scheduled to expire during 2021 that was executed or in process as of July 31, 2021.

The current challenging retail environment has impacted our business as our operations are subject to the operating results and percentage rental revenues. Accordingly, althoughoperating decisions of our retail tenants. We are encouraged by the recent improvement in traffic and sales trends, which in many cases are exceeding 2019 levels. However, many retailers across the country are currently facing, or expect to face, potential impact of rising inflation, logistics and staffing issues. While we can give no assurance, we do not expect any material adversebelieve many of these retailers are proactively navigating this situation, the ultimate impact on our results of operationsinflation, labor and financial conditionsupply chain issues is unknown.

We may continue to experience pressure from current vacancies, potential additional store closures and potential rent modifications. As is typical in the retail industry, certain tenants have closed, or will close, certain stores by terminating their lease prior to its contractual expiration or as a result of leasesfiling for protection under bankruptcy laws, or may request modifications to their existing lease terms.

We believe outlet stores will continue to be reneweda profitable and fundamental distribution channel for many brand name manufacturers. While we continue to attract and retain additional tenants, if we were unable to successfully renew or stores tore-lease a significant amount of this space on favorable economic terms or in a timely manner, our Same Center NOI could be re-leased.negatively impacted. As a result of COVID-19, inflation, rising interest rates, and other current or future economic conditions, occupancy could be negatively impacted. Occupancy atfor our consolidated centerstotal portfolio, including our share of unconsolidated joint ventures, was 97%94.9% and 93.2% as of SeptemberJune 30, 20172022 and 2016.2021, respectively.


63

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk


We are exposed to various market risks, including changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates.

Interest Rate Risk

We may periodically enter into certain interest rate protection and interest rate swap agreements to effectively convert existing floating rate debt to a fixed rate basis. We do not enter into derivatives or other financial instruments for trading or speculative purposes. We currently have interest rate swap agreements to fix the interest rates on outstanding debt with notional amounts totaling $300.0 million. See Note 8 to the consolidated financial statements for additional details related to our outstanding derivatives.

As of June 30, 2022, 3% of our outstanding consolidated debt, excluding the amount of variable rate debt with interest rate protection agreements in place, had variable interest rates and therefore was subject to market fluctuations. A change in the LIBOR index of 100 basis points would result in an increase or decrease of approximately $401,000 in interest expense on an annual basis. The phase-out of LIBOR may result in additional interest rate risk and we have not yet determined an alternative benchmark rate.

The interest rate spreads associated with our unsecured lines of credit and our unsecured term loan are based on the higher of our two investment grade credit ratings. If decreases to our credit ratings occur, interest expense could increase depending upon the level of downgrade.

The information presented herein is merely an estimate and has limited predictive value. As a result, the ultimate effect upon our operating results of interest rate fluctuations will depend on the interest rate exposures that arise during the period, our hedging strategies at that time and future changes in the level of interest rates.

The estimated fair value and recorded value of our debt consisting of senior unsecured notes, unsecured term loans, secured mortgages and unsecured lines of credit were as follows (in thousands):
June 30, 2022December 31, 2021
Fair value of debt$1,272,156 $1,445,337 
Recorded value of debt$1,396,015 $1,397,076 

A 100 basis point increase from prevailing interest rates at June 30, 2022 and December 31, 2021 would result in a decrease in fair value of total consolidated debt of approximately $50.0 million and $66.0 million, respectively. Refer to Note 9 to the consolidated financial statements for a description of our methodology in calculating the estimated fair value of debt. Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on the disposition of the financial instruments. In addition, the COVID-19 pandemic may impact markets, rates, behavior and other estimates used in the above scenarios.

Foreign Currency Risk

We are also exposed to foreign currency risk on investments in outlet centers that are located in Canada. Our currency exposure is concentrated in the Canadian Dollar. To mitigate some of the risk related to changes in foreign currency, cash flows received from our Canadian joint ventures are either reinvested to fund ongoing Canadian development activities, if applicable, or converted to US dollars and utilized to repay amounts outstanding under our unsecured lines of credit.credit, if any. Accordingly, cash held in Canadian Dollars at any point in time is insignificant. We generally do not hedge currency translation exposures.






In April 2016, we entered into four separate interest rate swap agreements, effective April 13, 2016 that fix the base LIBOR rate at an average of 1.03% on notional amounts totaling $175.0 million through January 1, 2021. In addition, in October 2013, we entered into interest rate swap agreements with notional amounts totaling $150.0 million to reduce our floating rate debt exposure. The interest rate swap agreements fix the base LIBOR rate at an average of 1.30% and mature in August 2018. The fair value of the interest rate swap agreements represents the estimated receipts or payments that would be made to terminate the agreement. As of September 30, 2017, the fair value of these contracts is an asset of $4.2 million. The fair value is based on dealer quotes, considering current interest rates, remaining term to maturity and our credit standing.


As of September 30, 2017, 16% of our outstanding debt, excluding variable rate debt with interest rate protection agreements in place, had variable interest rates and therefore were subject to market fluctuations. An increase in the LIBOR index of 100 basis points would result in an increase of approximately $2.8 million in interest expense on an annual basis. The information presented herein is merely an estimate and has limited predictive value.  As a result, the ultimate effect upon our operating results of interest rate fluctuations will depend on the interest rate exposures that arise during the period, our hedging strategies at that time and future changes in the level of interest rates.

The estimated fair value and recorded value of our debt consisting of senior unsecured notes, unsecured term loans, secured mortgages and unsecured lines of credit were as follows (in thousands):
64
  September 30, 2017
 December 31, 2016
Fair value of debt $1,801,655
 $1,704,644
Recorded value of debt $1,773,981
 $1,687,866


A 100 basis point increase from prevailing interest rates at September 30, 2017 and December 31, 2016 would result in a decrease in fair value of total debt of approximately $80.9 million and $69.1 million, respectively. Refer to Note 9 to the consolidated financial statements for a description of our methodology in calculating the estimated fair value of debt. Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on the disposition of the financial instruments.

Item 4. Controls and Procedures


Tanger Factory Outlet Centers, Inc. Controls and Procedures


The Company'sCompany’s management carried out an evaluation, with the participation of the Company's ChiefCompany’s Principal Executive Officer and ChiefPrincipal Financial Officer, of the effectiveness of the Company'sCompany’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of SeptemberJune 30, 2017.2022. Based on this evaluation, the Company's ChiefCompany’s Principal Executive Officer and ChiefPrincipal Financial Officer have concluded that the Company'sCompany’s disclosure controls and procedures were effective as of SeptemberJune 30, 2017. There2022.

The Company is in the process of implementing new technology for its accounting systems. The Company has updated and continues to update its processes related to internal control over financial reporting, as necessary, to accommodate applicable changes in its business processes resulting from the implementation of the new technology for its accounting systems. Other than the changes described above, there were no changes to the Company'sCompany’s internal controlscontrol over financial reporting during the quarter ended SeptemberJune 30, 2017,2022, that materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.


Tanger Properties Limited Partnership Controls and Procedures


The managementPrincipal Executive Officer, Stephen J. Yalof, and Principal Financial Officer, Thomas J. Guerrieri Jr. of Tanger Factory Outlet Centers, Inc., sole general partner of the Operating Partnership's general partner carried out an evaluation, with the participation of the Chief Executive Officer and the Vice-President and Treasurer (Principal Financial and Accounting Officer) of the Operating Partnership's general partner ofPartnership, evaluated the effectiveness of the Operating Partnership's disclosure controls and procedures (asas defined in Exchange Act RulesRule 13a-15(e) and 15d-15(e)) and concluded that, as of SeptemberJune 30, 2017. Based on this evaluation, the Chief Executive Officer of the Operating Partnership's general partner, and the Vice-President and Treasurer of the Operating Partnership's general partner, have concluded2022, the Operating Partnership's disclosure controls and procedures were effectiveeffective.

The Operating Partnership is in the process of implementing new technology for its accounting systems. The Operating Partnership has updated and continues to update its processes related to internal control over financial reporting, as necessary, to accommodate applicable changes in its business processes resulting from the implementation of September 30, 2017. Therethe new technology for its accounting systems. Other than the changes described above, there were no changes to the Operating Partnership'sPartnership’s internal controlscontrol over financial reporting during the quarter ended SeptemberJune 30, 2017,2022, that materially affected, or are reasonably likely to materially affect, the Operating Partnership'sPartnership’s internal control over financial reporting.




PART II. OTHER INFORMATION


Item 1. Legal Proceedings


The Company and the Operating Partnership are, from time to time, engaged in a variety of legal proceedings arising in the normal course of business. Although the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of such proceedings will not have a material adverse effect on our results of operations or financial condition.


Item 1A. Risk Factors


There have been no material changes from the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2016.2021.

65

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


(c) Issuer Purchases of Equity Securities


OnIn May 19, 2017, we announced that our2021, the Company’s Board of Directors authorized the repurchase of up to $125$80.0 million of the Company’s outstanding shares through May 31, 2023. This authorization replaced a previous repurchase authorization for approximately $80.0 million that expired in May 2021. In June 2020, we amended our outstanding common shares as market conditions warrant overdebt agreements primarily to improve future covenant flexibility and such amendments included a period commencingprohibition on May 19, 2017share repurchases for twelve months starting July 1, 2020 (the “Repurchase Covenant”). The Company temporarily suspended share repurchases for the twelve months starting July 1, 2020 and expiringending on May 18, 2019.  June 30, 2021 in light of the repurchase covenant. On July 1, 2021, the Repurchase Covenant expired.

Repurchases may be made from time to time through open market, privately-negotiated, structured or derivative transactions (including accelerated stockshare repurchase transactions), or other methods of acquiring shares. 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 both the three months ended June 30, 2022. The remaining amount authorized to be repurchased under the program as of June 30, 2022 was approximately $80.0 million.


The following table summarizes ourFor certain restricted common share repurchasesshares that vested during the three months ended June 30, 2022, we withheld shares with value equivalent to the employees’ minimum statutory obligation for the fiscal quarterapplicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total number of shares withheld upon vesting was 62,000 for the three months ended SeptemberJune 30, 2017:2022. The total number of shares withheld was based on the value of the restricted common shares on the vesting date as determined by our closing share price on the day prior to the vesting date.




66
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs 
Approximate dollar value of shares that may yet be purchased under the plans or programs
(in millions)
July 1, 2017 to July 31, 2017 —
 $—
 —
 $85.7
August 1, 2017 to August 31, 2017 413,604
 24.18
 413,604
 75.7
September 1, 2017 to September 30, 2017 —
 —
 —
 75.7
Total 413,604
 $24.18
 413,604
 $75.7



Item 4.Mine Safety Disclosures

Not applicable




Item 6. Exhibits
Exhibit NumberExhibit Descriptions
4.1
22.1 
31.1*
12.1*
12.2*
Operating Partnership's Ratio of Earnings to Fixed Charges.
31.1*
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 ofRules 13a-14(a)/15d-14(a) under the Sarbanes - OxleySecurities Exchange Act of 20021934, as amended, for Tanger Factory Outlet Centers, Inc.
31.2*
31.2*
31.3*
31.3*
31.4*
32.1**
32.2**
32.2**
32.3**
32.3**
32.4**
32.4**
101.INS*Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101*101.SCH*
The following financial statements from Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership's dual Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Other Comprehensive Income (unaudited), (iv) Consolidated Statements of Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited).Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
** Furnished herewith.

67



SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrantregistrant has duly caused this Reportreport to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: November 8, 2017
28, 2022
TANGER FACTORY OUTLET CENTERS, INC.
By:/s/ James F. WilliamsThomas J. Guerrieri Jr.
James F. WilliamsThomas J. Guerrieri Jr.
Senior Vice President and Chief Accounting Officer (Principal Financial OfficerOfficer)
TANGER PROPERTIES LIMITED PARTNERSHIP
By: TANGER GP TRUST,FACTORY OUTLET CENTERS, INC., its sole general partner
By:/s/ James F. WilliamsThomas J. Guerrieri Jr.
James F. WilliamsThomas J. Guerrieri Jr.
Senior Vice President and TreasurerChief Accounting Officer (Principal Financial and Accounting Officer)







64
68