Greensboro, NC, February 21, 2023, Tanger Factory Outlet Centers, Inc. (NYSE:SKT), a leading owner and operator of upscale open-air outlet centers, today reported financial results and operating metrics for the three months and year ended December 31, 2022.

“I am pleased to report another quarter of strong results led by robust NOI growth,” said Stephen Yalof, President and Chief Executive Officer. “Leasing momentum continues to accelerate as we grew our occupancy 170 basis points year over year. Rent spreads exceeded 10% for comparable leases executed in 2022, marking our seventh-consecutive quarter of improvement. Traffic remained steady and total gross sales were in line with last year’s levels in spite of a far more promotional retail environment this holiday selling season. We have entered into 2023 with an attractive growth outlook along with a well-positioned balance sheet and cash flows to execute on our strategy. We continue to elevate our tenancy, diversify our portfolio, grow incremental revenue sources and look forward to opening our 37th center in Nashville this fall.”

•Net income available to common shareholders was $0.17 per share, or $18.1 million, compared to $0.12 per share, or $13.0 million, for the 2021 period. The 2022 period includes a $0.03 per share, or $3.2 million, gain on the sale of a non-core outlet center located in Blowing Rock, North Carolina. The 2021 period included a non-cash impairment charge of $0.06 per share, or $7.0 million, related to the Mashantucket (Foxwoods), Connecticut asset.

•Funds From Operations (“FFO”) available to common shareholders was $0.47 per share, or $51.6 million, compared to $0.45 per share, or $49.7 million, for the 2021 period.

•Core Funds From Operations (“Core FFO”) available to common shareholders was $0.47 per share, or $51.8 million, compared to $0.45 per share, or $49.6 million, for the 2021 period. Core FFO in the fourth quarter of 2021 excluded a casualty gain associated with insurance proceeds of $0.01 per share, or $1.0 million, which was offset by general and administrative expense of $0.01 per share, or $0.9 million, related to certain executive severance costs. The Company does not consider these items to be indicative of its ongoing operating performance.

•Net income available to common shareholders was $0.77 per share, or $81.2 million, compared to $0.08 per share, or $8.3 million, for 2021. Net income available to common shareholders for 2022 includes the gain on the sale of an outlet center discussed above. Net income available to common shareholders for 2021 included losses on the early extinguishment of debt totaling $0.47 per share, or $47.9 million, and the impairment charge discussed above.

•FFO available to common shareholders was $1.83 per share, or $201.5 million, compared to $1.29 per share, or $138.1 million, for 2021.

•Core FFO available to common shareholders was $1.83 per share, or $201.8 million, compared to $1.76 per share, or $188.4 million, for 2021. Core FFO for 2022 excludes $0.02 per share, or $2.4 million, related to certain executive severance costs, offset by a gain on sale of the corporate aircraft of $0.02 per share, or $2.4 million. Core FFO for 2021 excluded the losses on the early extinguishment of debt, the casualty gain discussed above and general and administrative expense of $0.03 per share, or $3.6 million, for compensation costs related to a voluntary retirement plan and other executive severance costs. The Company does not consider these items indicative of its ongoing operating performance.

FFO and Core FFO are widely accepted supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. Complete reconciliations containing adjustments from GAAP net income to FFO and Core FFO, if applicable, are included in this release. Per share amounts for net income, FFO and Core FFO are on a diluted basis.

Key portfolio results for the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, were as follows:

•Occupancy was 97.0% on December 31, 2022, compared to 96.5% on September 30, 2022 and 95.3% on December 31, 2021

•Same center net operating income (“Same Center NOI”) increased 5.1% to $86.5 million for the fourth quarter of 2022 from $82.2 million for the fourth quarter of 2021 and increased 5.5% to $325.7 million for 2022 from $308.7 million for 2021, driven by growth in occupancy and rental rates in 2022. Same Center NOI for 2022 benefited from the net reversal of revenue reserves (excluding straight-line rents) of approximately $4.5 million compared to approximately $1.6 million of net reserves recorded in 2021. In addition, during 2022, the Company recognized net reversals of straight-line rent reserves (which do not impact Same Center NOI) of $627,000 compared to straight-line rent net reserves of $209,000 in 2021

•Total gross sales remained flat in 2022 as compared to 2021, while average tenant sales productivity of $445 per square foot for the twelve months ended December 31, 2022 was flat compared to $446 per square foot for the twelve months ended September 30, 2022 and down 4.7% from $467 per square foot for the twelve months ended December 31, 2021. Average tenant sales per square foot in 2022 was impacted by the change in mix of retailers included in the comparable pool as well as retailer expansions that occurred during the year. Compared to the twelve months ended December 31, 2019, average tenant sales increased 11.8% from $398 per square foot

•On a same center basis, average tenant sales per square foot decreased 0.7% compared to the twelve months ended September 30, 2022 and 5.1% compared to the twelve months ended December 31, 2021. Compared to the twelve months ended December 31, 2019, average tenant sales per square foot increased 9.1% on a same center basis

•Lease termination fees for the total portfolio totaled $2.9 million for 2022, including $23,000 for the fourth quarter of 2022, compared to $3.6 million for 2021, including $0.3 million for the fourth quarter of 2021

Same Center NOI is a supplemental non-GAAP financial measure of operating performance. A complete definition of Same Center NOI and a reconciliation to the nearest comparable GAAP measure is included in this release.

In May 2022, Tanger broke ground on its new center in Nashville, Tennessee. The center, which will be approximately 290,000 square feet, is expected to open in September of 2023 at an estimated total cost of $142 million to $150 million with a projected stabilized yield of 7.0% to 7.5%. Through December 31, 2022, Tanger had incurred costs of $36.0 million associated with this development.

In December 2022, Tanger sold a non-core center in Blowing Rock, North Carolina for $13.0 million, which resulted in a gain on sale of assets of $3.2 million.

For the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, as of January 31, 2023, Tanger has renewals executed or in process for 41.0% of the space scheduled to expire during 2023 compared to 29.8% of expiring 2022 space as of January 31, 2022.

The following key leasing metrics are presented for the total domestic portfolio, including the Company’s pro rata share of domestic unconsolidated joint ventures.

•Total renewed or re-tenanted leases (including leases for both comparable and non-comparable space) executed during the twelve months ended December 31, 2022 included 447 leases, totaling over 2.1 million square feet

•Blended average rental rates increased 10.1% on a cash basis for leases executed for comparable space during the twelve months ended December 31, 2022, a sequential improvement of 440 basis points. This increase is comprised of re-tenanted rent spreads of 27.9% and renewal rent spreads of 8.6%

In January 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.22 per share, which was paid on February 15, 2023 to holders of record on January 31, 2023.

The following balance sheet and liquidity metrics are presented for the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures. As of December 31, 2022:

•Net debt to Adjusted EBITDAre (calculated as net debt divided by Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Adjusted EBITDAre”)) improved to 5.1x for 2022 from 5.5x for 2021

•Interest coverage ratio (calculated as Adjusted EBITDAre divided by interest expense) improved to 4.7x for 2022 from 4.3x for 2021

•Cash and cash equivalents and short-term investments totaled $273.3 million with full availability on the Company’s $520 million unsecured lines of credit

•Total outstanding debt aggregated $1.6 billion with $109.0 million (principal) of floating rate debt, representing approximately 7% of total debt outstanding and 3% of total enterprise value

•Weighted average interest rate was 3.4% and weighted average term to maturity of outstanding debt, including extension options, was approximately 5.6 years

•Approximately 88% of the total portfolio’s square footage was unencumbered by mortgages

•Funds Available for Distribution (“FAD”) payout ratio was 46% for 2022

Adjusted EBITDAre, Net debt and FAD are supplemental non-GAAP financial measures of operating performance. Definitions of Adjusted EBITDAre, Net debt and FAD and reconciliations to the nearest comparable GAAP measures are included in this release.

Tanger’s estimates reflect the following key assumptions (dollars in millions):

Tanger will host a conference call to discuss its fourth quarter and year end 2022 results for analysts, investors and other interested parties on Wednesday, February 22, 2023, at 8:00 a.m. Eastern Time. To access the conference call, listeners should dial 1-877-605-1702. Alternatively, a live audio webcast of this call will be available to the public on Tanger’s Investor Relations website, investors.tangeroutlets.com. A telephone replay of the call will be available from February 22, 2023 at approximately 11:00 a.m. through March 8, 2023 at 11:59 p.m. by dialing 1-877-660-6853, replay access code #13735349. An online archive of the webcast will also be available through March 8, 2023.

The Company is scheduled to participate in the following upcoming events:

•Wells Fargo’s Real Estate Securities Conference held at the InterContinental New York Barclay on February 23, 2023

•Citi’s 2023 Global Property CEO Conference held at the Diplomat Resort & Spa in Hollywood, FL from March 5 through March 8, 2023, including a tour of Tanger Outlets Palm Beach center on March 5 and a CEO Round Table Presentation. Additional details about the presentation, including a live audio webcast, will be available to the public on Tanger’s Investor Relations website, investors.tangeroutlets.com

•BofA’s NYC Retail REIT Headquarter Tour on March 29, 2023

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a leading operator of upscale open-air outlet centers that owns (or has an ownership interest in) and/or manages a portfolio of 36 centers with an additional center currently under development. Tanger’s operating properties are located in 20 states and in Canada, totaling approximately 13.9 million square feet, leased to over 2,700 stores operated by more than 600 different brand name companies. The Company has more than 42 years of experience in the outlet industry and is a publicly-traded REIT. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission (“SEC”) that includes a supplemental information package for the quarter ended December 31, 2022. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the Company’s website at www.tangeroutlets.com.

This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “forecast” or similar expressions, and include the Company’s expectations regarding future financial results and assumptions underlying that guidance, long-term growth, trends in retail traffic and tenant revenues, development initiatives and strategic partnerships, improvement in operational metrics, renewal trends, new revenue streams, its strategy and value proposition to retailers, uses of capital, liquidity, dividend payments and cash flows.

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 factors which may cause actual results to differ materially from current expectations include, but are not limited to: our inability to develop new outlet centers or expand existing outlet centers successfully; risks related to the economic performance and market value of our outlet centers; 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; risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety; risks related to the impact of the COVID-19 pandemic and macroeconomic conditions, including rising interest rates and inflation, on our tenants and on our business, financial condition, liquidity, results of operations and compliance with debt covenants; our dependence on rental income from real property; our dependence on the results of operations of our retailers and their bankruptcy, early termination or closing could adversely affect us; the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours; risks related to climate change; increased costs and reputational harm associated with the increased focus on environmental, sustainability and social initiatives; risks related to uninsured losses; 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; risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties; the effectiveness of our interest rate hedging arrangements; uncertainty relating to the potential 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, including the recent changes in the U.S. federal income taxation of U.S.

businesses; 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 set forth under Item 1A - “Risk Factors” in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022, as may be updated or supplemented in the Company’s Quarterly Reports on Form 10-Q and the Company’s other filings with the SEC. Accordingly, there is no assurance that the Company’s expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes or related subjects in the Company’s Current Reports on Form 8-K that the Company files with the SEC.

Investor Contact Information

Media Contact Information

Doug McDonald

KWT Global

SVP, Finance and Capital Markets

Tanger@kwtglobal.com

336-856-6066

tangerir@tangeroutlets.com

    

(1)The year ended December 31, 2022 includes a $2.4 million gain on the sale of the corporate aircraft. The year ended December 31, 2021 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.

(1)Amounts may not recalculate due to the effect of rounding.

RECONCILIATION OF GAAP TO NON-GAAP SUPPLEMENTAL MEASURES (1)

(1)Refer to Non-GAAP Definitions beginning on page 14 for definitions of the non-GAAP supplemental measures used in this release.

(2)Includes $563,000 for the three months and year ended December 31, 2021 of impairment loss attributable to the right-of-use asset associated with the ground lease at the Mashantucket (Foxwoods), Connecticut outlet center.

(3)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.

(4)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.

(5)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.

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

(7)In 2021, the Company completed the redemption of its 3.875% senior notes due December 2023 ($250.0 million in aggregate principal amount outstanding) and its 3.750% senior notes due 2024 ($250.0 million in aggregate principal outstanding) for a total of $544.9 million in cash. The loss on early extinguishment of debt in 2021 includes make-whole premiums of $44.9 million for the redemptions.

Below is a reconciliation of FFO to FAD (1):

(1)Refer to page 9 for a reconciliation of net income to FFO available to common shareholders.

(2)In the 2021 periods, second generation tenant allowances are presented net of $3.3 million tenant allowance reversals, which were the result of a lease modification.

(3)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.

(1)In 2021, the Company completed the redemption of its 3.875% senior notes due December 2023 ($250.0 million in aggregate principal amount outstanding) and its 3.750% senior notes due 2024 ($250.0 million in aggregate principal outstanding) for a total of $544.9 million in cash. The loss on early extinguishment of debt in 2021 includes make-whole premiums of $44.9 million for the redemptions.

(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:

(1)Includes $563,000 for the three months and year ended December 31, 2021 of impairment loss attributable to the right-of-use asset associated with the ground lease at the Mashantucket (Foxwoods), Connecticut outlet center.

(2)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.

(3)For the 2022 period, represents executive severance costs. For the 2021 periods, 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 2021, the Company completed the redemption of its 3.875% senior notes due December 2023 ($250.0 million in aggregate principal amount outstanding) and its 3.750% senior notes due 2024 ($250.0 million in aggregate principal outstanding) for a total of $544.9 million in cash. The loss on early extinguishment of debt in 2021 includes make-whole premiums of $44.9 million for the redemptions.

(1)     Represents short-term bank deposits with initial maturities greater than three months and less than or equal to one year

•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

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

We present Core 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 Core FFO when certain material, unplanned transactions occur as a factor in evaluating management’s performance and to evaluate the effectiveness of our business strategies, and may use Core FFO when determining incentive compensation.

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

•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 Core FFO does not reflect any cash requirements for such replacements;

•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 Core FFO differently than we do, limiting its usefulness as a comparative measure.

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

•They do not reflect our net 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.

  

 

This supplement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “forecast” or similar expressions, and include the Company’s expectations regarding future financial results and assumptions underlying that guidance.

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 factors which may cause actual results to differ materially from current expectations include, but are not limited to: our inability to develop new outlet centers or expand existing outlet centers successfully; risks related to the economic performance and market value of our outlet centers; 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; risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety; risks related to the impact of the COVID-19 pandemic and macroeconomic conditions, including rising interest rates and inflation, on our tenants and on our business, financial condition, liquidity, results of operations and compliance with debt covenants; our dependence on rental income from real property; our dependence on the results of operations of our retailers and their bankruptcy, early termination or closing could adversely affect us; the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours; risks related to climate change; increased costs and reputational harm associated with the increased focus on environmental, sustainability and social initiatives; risks related to uninsured losses; 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; risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties; the effectiveness of our interest rate hedging arrangements; uncertainty relating to the potential 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, including the recent changes in the U.S. federal income taxation of U.S. businesses; 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 set forth under Item 1A - “Risk Factors” in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022, as may be updated or supplemented in the Company’s Quarterly Reports on Form 10-Q and the Company’s other filings with the SEC. Accordingly, there is no assurance that the Company’s expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes or related subjects in the Company’s Current Reports on Form 8-K that the Company files with the SEC.

(1)Amounts may not recalculate due to the effect of rounding.

(2)Average tenant sales per square foot is presented on a constant currency basis for the trailing twelve-month periods and include stores that have been occupied a minimum of twelve months and are less than 20,000 square feet. Constant currency is a non-GAAP measure, calculated by applying the average foreign exchange rate for the current period to all periods presented.

(3)Occupancy cost ratio represents annualized occupancy costs as of the end of the reporting period as a percentage of tenant sales for the trailing twelve-month periods for consolidated properties and the Company’s pro rata share of unconsolidated joint ventures.

Portfolio Occupancy at the End of Each Period (1)

Outlet Center Ranking as of December 31, 2022 (1)

As of December 31, 2022 (1)

(1)Excludes leases that have been entered into but which tenant has not yet taken possession, temporary leases and month-to-month leases. Includes all retail concepts of each tenant group; tenant groups are determined based on leasing relationships.

(2)Includes the Company’s pro rata share of unconsolidated joint ventures.

(3)Annualized base rent is defined as the minimum monthly payments due as of the end of the reporting period annualized, excluding periodic contractual fixed increases. Includes rents which are based on a percentage of sales in lieu of fixed contractual rents.

Percentage of Total Gross Leasable Area (1)

Percentage of Total Annualized Base Rent (1)

Leasing Activity for the Trailing Twelve Months Ended December 31 - Comparable Space for Executed Leases (1) (2)

Refer to footnotes below the following table.

Leasing Activity for the Trailing Twelve Months Ended December 31 - Comparable and Non-Comparable Space for Executed Leases (1) (2)