EXPLANATORY NOTE

This report combines the unaudited quarterly reports on Form 10-Q for the quarter ended ~~September~~June 30, ~~2018~~2019 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. 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 owns the majority of the units of partnership interest issued by the Operating Partnership through its two wholly-owned subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust controls the Operating Partnership as its sole general partner. Tanger LP Trust holds a limited partnership interest. As of ~~September~~June 30, ~~2018,~~2019, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned ~~93,907,034~~93,544,267 units of the Operating Partnership and other limited partners (the ~~"Non-Company LPs"~~“Non-Company LPs”) collectively owned ~~4,995,433~~4,960,684 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one of the ~~Company's~~Company’s common shares, subject to certain limitations to preserve the ~~Company's~~Company’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~~Company’s Board of Directors are also the same individuals that make up Tanger GP ~~Trust's~~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 through its wholly-owned subsidiaries, the Tanger GP Trust and 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's~~Company’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.

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's~~shareholders’ equity and ~~partner's~~partners’ 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's~~partners’ capital in the Operating ~~Partnership's~~Partnership’s financial statements and as noncontrolling interests in the ~~Company's~~Company’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;

Liquidity and Capital Resources in the ~~Management's~~Management’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 Chief Executive Officer and the Chief 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.

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 ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	5
Consolidated Statements of Operations - for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	6
Consolidated Statements of Comprehensive Income - for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	7
Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity - for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	8
Consolidated Statements of Cash Flows - for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	10

FINANCIAL STATEMENTS OF TANGER PROPERTIES LIMITED PARTNERSHIP (Unaudited)
Consolidated Balance Sheets - as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	11
Consolidated Statements of Operations - for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	12
Consolidated Statements of Comprehensive Income - for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	13
Consolidated Statements of Equity - for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	14
Consolidated Statements of Cash Flows - for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	1516

Condensed Notes to Consolidated Financial Statements of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership	1617

Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	3941

Item 3. Quantitative and Qualitative Disclosures about Market Risk	6160

Item 4. Controls and Procedures (Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership)	6362

Part II. Other Information

Item 1. Legal Proceedings	6463

Item 1A. Risk Factors	6463

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6463

~~Item 4. Mine Safety Disclosure~~	64

Item 6. Exhibits	6564

Signatures	6665

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, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Assets
Rental property:
Land	$	278,632		$	279,978		$	267,966		$	278,428
Buildings, improvements and fixtures	2,755,698			2,793,638			2,651,300			2,764,649
Construction in progress	762			14,854			—			3,102
	3,035,092			3,088,470			2,919,266			3,046,179
Accumulated depreciation	(953,158		)	(901,967		)	(966,805		)	(981,305		)
Total rental property, net	2,081,934			2,186,503			1,952,461			2,064,874
Cash and cash equivalents	4,404			6,101			7,379			9,083
Investments in unconsolidated joint ventures	111,305			119,436			96,299			95,969
Deferred lease costs and other intangibles, net	120,064			132,061			104,286			116,874
Operating lease right-of-use assets							87,430			—
Prepaids and other assets	103,910			96,004			95,913			98,102
Total assets	$	2,421,617		$	2,540,105		$	2,343,768		$	2,384,902
Liabilities and Equity
Liabilities
Debt:
Senior, unsecured notes, net	$	1,136,184		$	1,134,755		$	1,137,629		$	1,136,663
Unsecured term loan, net	323,416			322,975			347,102			346,799
Mortgages payable, net	88,359			99,761			85,661			87,471
Unsecured lines of credit, net	199,701			206,160			15,917			141,985
Total debt	1,747,660			1,763,651			1,586,309			1,712,918
Accounts payable and accrued expenses	70,132			90,416			60,324			82,676
Operating lease liabilities							92,092			—
Other liabilities	79,342			73,736			88,235			83,773
Total liabilities	1,897,134			1,927,803			1,826,960			1,879,367
Commitments and contingencies
Equity
Tanger Factory Outlet Centers, Inc.:
Common shares, $.01 par value, 300,000,000 shares authorized, 93,907,034 and 94,560,536 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	939			946
Common shares, $.01 par value, 300,000,000 shares authorized, 93,544,267 and 93,941,783 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively							935			939
Paid in capital	774,724			784,782			778,026			778,845
Accumulated distributions in excess of net income	(259,258		)	(184,865		)	(262,764		)	(272,454		)
Accumulated other comprehensive loss	(18,413		)	(19,285		)	(25,415		)	(27,151		)
Equity attributable to Tanger Factory Outlet Centers, Inc.	497,992			581,578			490,782			480,179
Equity attributable to noncontrolling interests:
Noncontrolling interests in Operating Partnership	26,491			30,724			26,026			25,356
Noncontrolling interests in other consolidated partnerships	—			—			—			—
Total equity	524,483			612,302			516,808			505,535
Total liabilities and equity	$	2,421,617		$	2,540,105		$	2,343,768		$	2,384,902

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

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,
2018 2017 2018 2017
Revenues:

Base rentals $ 82,323
$ 80,349
$ 244,781
$ 241,467
Percentage rentals 3,210
3,138
6,666
6,798
Expense reimbursements 35,468
34,180
107,876
104,801
Management, leasing and other services 583
588
1,826
1,776
Other income 2,652
2,510
6,333
6,905
Total revenues 124,236
120,765
367,482
361,747
Expenses:

Property operating 39,653
37,571
119,817
115,074
General and administrative 10,752
10,934
32,861
33,846
Abandoned pre-development costs —
(99 ) —
528
Impairment charge 49,739
—
49,739
—
Depreciation and amortization 32,850
30,976
98,667
95,175
Total expenses 132,994
79,382
301,084
244,623
Operating income (loss) (8,758 ) 41,383

66,398

117,124
Other income (expense):
Interest expense (16,367 ) (16,489 ) (48,348 ) (49,496 )
Loss on early extinguishment of debt —
(35,626 ) —
(35,626 )
Gain on sale of assets —
—
—
6,943
Other non-operating income (expense) 261
591
661
683
Income (loss) before equity in earnings (losses) of unconsolidated joint ventures (24,864 ) (10,141 ) 18,711
39,628
Equity in earnings (losses) of unconsolidated joint ventures 1,833
(5,893 ) 6,233
(1,201 )
Net income (loss) (23,031 ) (16,034 )
24,944

38,427
Noncontrolling interests in Operating Partnership 1,172
815
(1,274 ) (1,920 )
Noncontrolling interests in other consolidated partnerships —
—
278
—
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $ (21,859 ) $ (15,219 )
$ 23,948

$ 36,507

Basic earnings per common share:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38
Diluted earnings per common share:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38

Dividends declared per common share $ 0.3500
$ 0.3425
$ 1.0425
$ 1.0100



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Revenues:
Rental revenues	$	112,385		$	116,518		$	232,339		$	237,174
Management, leasing and other services	1,245			1,142			2,587			2,340
Other revenues	2,077			2,051			3,936			3,732
Total revenues	115,707			119,711			238,862			243,246
Expenses:
Property operating	36,726			37,946			79,103			80,164
General and administrative	16,473			10,997			28,618			22,109
Depreciation and amortization	31,146			32,694			62,906			65,817
Total expenses	84,345			81,637			170,627			168,090
Other income (expense):
Interest expense	(15,134		)	(16,181		)	(31,441		)	(31,981		)
Gain on sale of assets	—			—			43,422			—
Other income (expense)	(3,417		)	191			(3,193		)	400
Total other income (expense)	(18,551		)	(15,990		)	8,788			(31,581		)
Income before equity in earnings of unconsolidated joint ventures	12,811			22,084			77,023			43,575
Equity in earnings of unconsolidated joint ventures	1,646			2,206			3,275			4,400
Net income	14,457			24,290			80,298			47,975
Noncontrolling interests in Operating Partnership	(730		)	(1,229		)	(4,045		)	(2,446		)
Noncontrolling interests in other consolidated partnerships	—			(92		)	(195		)	278
Net income attributable to Tanger Factory Outlet Centers, Inc.	$	13,727		$	22,969		$	76,058		$	45,807

Basic earnings per common share:
Net income	$	0.15		$	0.24		$	0.81		$	0.48
Diluted earnings per common share:
Net income	$	0.15		$	0.24		$	0.81		$	0.48

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

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,
2018 2017 2018 2017
Net income (loss) $ (23,031 ) $ (16,034 ) $ 24,944
$ 38,427
Other comprehensive income (loss):
Foreign currency translation adjustments 1,921
4,737
(3,176 ) 8,821
Change in fair value of cash flow hedges 512
39
4,095
217
Other comprehensive income 2,433
4,776
919
9,038
Comprehensive income (loss) (20,598 ) (11,258 ) 25,863
47,465
Comprehensive (income) loss attributable to noncontrolling interests 1,048
573
(1,043 ) (2,376 )
Comprehensive income (loss) attributable to Tanger Factory Outlet Centers, Inc. $ (19,550 ) $ (10,685 ) $ 24,820
$ 45,089



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	14,457		$	24,290		$	80,298		$	47,975
Other comprehensive income (loss):
Foreign currency translation adjustments	5,443			(2,002		)	7,392			(5,097		)
Change in fair value of cash flow hedges	(3,613		)	844			(5,565		)	3,583
Other comprehensive income (loss)	1,830			(1,158		)	1,827			(1,514		)
Comprehensive income	16,287			23,132			82,125			46,461
Comprehensive income attributable to noncontrolling interests	(822		)	(1,262		)	(4,331		)	(2,091		)
Comprehensive income attributable to Tanger Factory Outlet Centers, Inc.	$	15,465		$	21,870		$	77,794		$	44,370

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

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS'~~SHAREHOLDERS’ EQUITY

(In thousands, except share and per share data, unaudited)



	Common shares			Paid in capital			Accumulated distributions in excess of earnings			Accumulated other comprehensive loss			Equity attributable to Tanger Factory Outlet Centers, Inc.			Noncontrolling interests in Operating Partnership			Noncontrolling interests in other consolidated partnerships			Total equity
Balance, March 31, 2018	$	944		$	776,753		$	(194,416	)	$	(19,623	)	$	563,658		$	29,833		$	—		$	593,491
Net income	—			—			22,969			—			22,969			1,229			92			24,290
Other comprehensive loss	—			—			—			(1,099		)	(1,099		)	(59		)	—			(1,158		)
Compensation under Incentive Award Plan	—			3,940			—			—			3,940			—			—			3,940
Repurchase of 475,549 common shares, including transaction costs	(5		)	(9,995		)	—			—			(10,000		)	—			—			(10,000		)
Adjustment for noncontrolling interests in Operating Partnership	—			179			—			—			179			(179		)	—			—
Common dividends ($0.35 per share)	—			—			(33,059		)	—			(33,059		)	—			—			(33,059		)
Distributions to noncontrolling interests	—			—			—			—			—			(1,748		)	(92		)	(1,840		)
Balance, June 30, 2018	$	939		$	770,877		$	(204,506	)	$	(20,722	)	$	546,588		$	29,076		$	—		$	575,664

	Common shares			Paid in capital			Accumulated distributions in excess of earnings			Accumulated other comprehensive loss			Equity attributable to Tanger Factory Outlet Centers, Inc.			Noncontrolling interests in Operating Partnership			Noncontrolling interests in other consolidated partnerships			Total equity
Balance, December 31, 2017	$	946		$	784,782		$	(184,865	)	$	(19,285	)	$	581,578		$	30,724		$	—		$	612,302
Net income	—			—			45,807			—			45,807			2,446			(278		)	47,975
Other comprehensive loss	—			—			—			(1,437		)	(1,437		)	(77		)	—			(1,514		)
Compensation under Incentive Award Plan	—			7,596			—			—			7,596			—			—			7,596
Grant of 355,184 restricted common share awards, net of forfeitures	3			(3		)	—			—			—			—			—			—
Repurchase of 919,249 common shares, including transaction costs	(9		)	(19,989		)	—			—			(19,998		)	—			—			(19,998		)
Withholding of 89,437 common shares for employee income taxes	(1		)	(2,067		)	—			—			(2,068		)	—			—			(2,068		)
Contributions from noncontrolling interests	—			—			—			—			—			—			445			445
Adjustment for noncontrolling interests in Operating Partnership	—			558			—			—			558			(558		)	—			—
Common dividends ($0.6925 per share)	—			—			(65,448		)	—			(65,448		)	—			—			(65,448		)
Distributions to noncontrolling interests	—			—			—			—			—			(3,459		)	(167		)	(3,626		)
Balance, June 30, 2018	$	939		$	770,877		$	(204,506	)	$	(20,722	)	$	546,588		$	29,076		$	—		$	575,664

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

Common shares Paid in capital Accumulated distributions in excess of earnings Accumulated other comprehensive loss Equity attributable to Tanger Factory Outlet Centers, Inc. Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
equity
Balance,
December 31, 2016
$ 961
$ 820,251
$ (122,701 ) $ (28,295 ) $ 670,216
$ 35,066
$ 159
$ 705,441
Net income —
—
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

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



TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands, except share and per share data, unaudited)
	Common shares			Paid in capital			Accumulated distributions in excess of earnings			Accumulated other comprehensive loss			Equity attributable to Tanger Factory Outlet Centers, Inc.			Noncontrolling interests in Operating Partnership			Noncontrolling interests in other consolidated partnerships			Total equity
Balance, March 31, 2019	$	941		$	780,936		$	(276,491	)	$	(27,153	)	$	478,233		$	25,210		$	—		$	503,443
Net income	—			—			13,727			—			13,727			730			—			14,457
Other comprehensive income	—			—			—			1,738			1,738			92			—			1,830
Compensation under Incentive Award Plan	—			7,078			—			—			7,078			—			—			7,078
Repurchase of 558,399 common shares, including transaction costs	(6		)	(9,994		)	—			—			(10,000		)	—			—			(10,000		)
Contributions from noncontrolling interests	—			—			—			—			—			—			18			18
Adjustment for noncontrolling interests in Operating Partnership	—			6			—			—			6			(6		)	—			—
Distributions to noncontrolling interests	—			—			—			—			—			—			(18		)	(18		)
Balance, June 30, 2019	$	935		$	778,026		$	(262,764	)	$	(25,415	)	$	490,782		$	26,026		$	—		$	516,808

	Common shares			Paid in capital			Accumulated distributions in excess of earnings			Accumulated other comprehensive loss			Equity attributable to Tanger Factory Outlet Centers, Inc.			Noncontrolling interests in Operating Partnership			Noncontrolling interests in other consolidated partnerships			Total equity
Balance, December 31, 2018	$	939		$	778,845		$	(272,454	)	$	(27,151	)	$	480,179		$	25,356		$	—		$	505,535
Net income	—			—			76,058			—			76,058			4,045			195			80,298
Other comprehensive income	—			—			—			1,736			1,736			91			—			1,827
Compensation under Incentive Award Plan	—			10,988			—			—			10,988			—			—			10,988
Grant of 242,167 restricted common share awards, net of forfeitures	3			(3		)	—			—			—			—			—			—
Repurchase of 558,399 common shares, including transaction costs	(6		)	(9,994		)	—			—			(10,000		)	—			—			(10,000		)
Withholding of 81,284 common shares for employee income taxes	(1		)	(1,780		)	—			—			(1,781		)	—			—			(1,781		)
Contributions from noncontrolling interests	—			—			—			—			—			—			36			36
Adjustment for noncontrolling interests in Operating Partnership	—			(30		)	—			—			(30		)	30			—			—
Common dividends ($0.705 per share)	—			—			(66,368		)	—			(66,368		)	—			—			(66,368		)
Distributions to noncontrolling interests	—			—			—			—			—			(3,496		)	(231		)	(3,727		)
Balance, June 30, 2019	$	935		$	778,026		$	(262,764	)	$	(25,415	)	$	490,782		$	26,026		$	—		$	516,808

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share and per share data, unaudited)
Common shares Paid in capital Accumulated distributions in excess of earnings Accumulated other comprehensive loss Equity attributable to Tanger Factory Outlet Centers, Inc. Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
equity
Balance, December 31, 2017 $ 946
$ 784,782
$ (184,865 ) $ (19,285 ) $ 581,578
$ 30,724
$ —
$ 612,302
Net income —
—
23,948
—
23,948
1,274
(278 ) 24,944
Other comprehensive income —
—
—
872
872
47
—
919
Compensation under Incentive Award Plan —
11,654
—
—
11,654
—
—
11,654
Grant of 355,184 restricted common share awards, net of forfeitures 3
(3 ) —
—
—
—
—
—
Repurchase of 919,249 common shares, including transaction costs (9 ) (19,989 ) —
—
(19,998 ) —
—
(19,998 )
Withholding of
89,437 common shares for employee income taxes (1 ) (2,067 ) —
—
(2,068 ) —
—
(2,068 )
Contributions from noncontrolling interests —
—
—
—
—
—
445
445
Adjustment for noncontrolling interests in Operating Partnership —
347
—
—
347
(347 ) —
—
Common dividends
($1.0425 per share)
—
—
(98,341 ) —
(98,341 ) —
—
(98,341 )
Distributions to noncontrolling interests —
—
—
—
—
(5,207 ) (167 ) (5,374 )
Balance, September 30, 2018 $ 939
$ 774,724
$ (259,258 ) $ (18,413 ) $ 497,992
$ 26,491
$ —
$ 524,483

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

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,
	2018			2017			2019			2018
OPERATING ACTIVITIES
Net income	$	24,944		$	38,427		$	80,298		$	47,975
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	98,667			95,175			62,906			65,817
Impairment charge	49,739			—
Amortization of deferred financing costs	2,280			2,640			1,497			1,532
Gain on sale of assets	—			(6,943		)	(43,422		)	—
Loss on early extinguishment of debt	—			35,626
Equity in (earnings) losses of unconsolidated joint ventures	(6,233		)	1,201
Equity in earnings of unconsolidated joint ventures							(3,275		)	(4,400		)
Equity-based compensation expense	10,814			10,114			10,799			7,045
Amortization of debt (premiums) and discounts, net	309			363			220			204
Amortization (accretion) of market rent rate adjustments, net	1,980			2,107			753			1,251
Straight-line rent adjustments	(4,744		)	(4,749		)	(4,886		)	(3,294		)
Distributions of cumulative earnings from unconsolidated joint ventures	6,081			8,128			3,154			4,332
Other non-cash							3,638			—
Changes in other assets and liabilities:
Other assets	(406		)	(1,131		)	(577		)	3,738
Accounts payable and accrued expenses	(3,471		)	653			(18,384		)	(8,833		)
Net cash provided by operating activities	179,960			181,611			92,721			115,367
INVESTING ACTIVITIES
Additions to rental property	(53,349		)	(132,612		)	(22,402		)	(41,212		)
Additions to investments in unconsolidated joint ventures	(1,764		)	(4,033		)	(1,695		)	(1,497		)
Net proceeds from sale of assets	—			39,213			128,248			—
Additions to non-real estate assets	(1,203		)	(8,384		)	(480		)	(1,114		)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	16,656			16,019			12,303			13,911
Additions to deferred lease costs	(5,220		)	(4,218		)	(4,119		)	(2,821		)
Other investing activities	8,065			4,963			4,476			4,032
Net cash used in investing activities	(36,815		)	(89,052		)
Net cash provided by (used) in investing activities							116,331			(28,701		)
FINANCING ACTIVITIES
Cash dividends paid	(98,341		)	(97,781		)	(66,368		)	(65,448		)
Distributions to noncontrolling interests in Operating Partnership	(5,207		)	(5,078		)	(3,496		)	(3,459		)
Proceeds from revolving credit facility	391,900			543,866			207,500			295,600
Repayments of revolving credit facility	(396,900		)	(456,666		)	(334,100		)	(280,000		)
Proceeds from notes, mortgages and loans	—			299,460
Repayments of notes, mortgages and loans	(10,971		)	(302,240		)	(1,661		)	(10,169		)
Payment of make-whole premium related to early extinguishment of debt	—			(34,143		)
Repurchase of common shares, including transaction costs	(19,998		)	(49,362		)	(10,000		)	(19,998		)
Employee income taxes paid related to shares withheld upon vesting of equity awards	(2,068		)	(2,436		)	(1,781		)	(2,068		)
Additions to deferred financing costs	(2,615		)	(2,900		)	(65		)	(2,615		)
Proceeds from exercise of options	—			54
Proceeds from other financing activities	445			12,054			36			445
Payment for other financing activities	(1,027		)	(782		)	(805		)	(741		)
Net cash used in financing activities	(144,782		)	(95,954		)	(210,740		)	(88,453		)
Effect of foreign currency rate changes on cash and cash equivalents	(60		)	(54		)	(16		)	(53		)
Net decrease in cash and cash equivalents	(1,697		)	(3,449		)	(1,704		)	(1,840		)
Cash and cash equivalents, beginning of period	6,101			12,222			9,083			6,101
Cash and cash equivalents, end of period	$	4,404		$	8,773		$	7,379		$	4,261

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

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, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Assets
Rental property:
Land	$	278,632		$	279,978		$	267,966		$	278,428
Buildings, improvements and fixtures	2,755,698			2,793,638			2,651,300			2,764,649
Construction in progress	762			14,854			—			3,102
	3,035,092			3,088,470			2,919,266			3,046,179
Accumulated depreciation	(953,158		)	(901,967		)	(966,805		)	(981,305		)
Total rental property, net	2,081,934			2,186,503			1,952,461			2,064,874
Cash and cash equivalents	4,361			6,050			7,345			8,991
Investments in unconsolidated joint ventures	111,305			119,436			96,299			95,969
Deferred lease costs and other intangibles, net	120,064			132,061			104,286			116,874
Operating lease right-of-use assets							87,430			—
Prepaids and other assets	103,313			95,384			95,628			97,832
Total assets	$	2,420,977		$	2,539,434		$	2,343,449		$	2,384,540
Liabilities and Equity
Liabilities
Debt:
Senior, unsecured notes, net	$	1,136,184		$	1,134,755		$	1,137,629		$	1,136,663
Unsecured term loan, net	323,416			322,975			347,102			346,799
Mortgages payable, net	88,359			99,761			85,661			87,471
Unsecured lines of credit, net	199,701			206,160			15,917			141,985
Total debt	1,747,660			1,763,651			1,586,309			1,712,918
Accounts payable and accrued expenses	69,492			89,745			60,005			82,314
Operating lease liabilities							92,092			—
Other liabilities	79,342			73,736			88,235			83,773
Total liabilities	1,896,494			1,927,132			1,826,641			1,879,005
Commitments and contingencies
Equity
Partners' Equity:
General partner, 1,000,000 units outstanding at September 30, 2018 and December 31, 2017	5,054			5,844
Limited partners, 4,995,433 and 4,995,433 Class A common units, and 92,907,034 and 93,560,536 Class B common units outstanding at September 30, 2018 and December 31, 2017, respectively	538,855			626,803
Partners’ Equity:
General partner, 1,000,000 units outstanding at June 30, 2019 and December 31, 2018							5,018			4,914
Limited partners, 4,960,684 and 4,960,684 Class A common units, and 92,544,267 and 92,941,783 Class B common units outstanding at June 30, 2019 and December 31, 2018, respectively							538,594			529,252
Accumulated other comprehensive loss	(19,426		)	(20,345		)	(26,804		)	(28,631		)
Total partners' equity	524,483			612,302
Total partners’ equity							516,808			505,535
Noncontrolling interests in consolidated partnerships	—			—			—			—
Total equity	524,483			612,302			516,808			505,535
Total liabilities and equity	$	2,420,977		$	2,539,434		$	2,343,449		$	2,384,540

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

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,
2018 2017 2018 2017
Revenues:

Base rentals $ 82,323
$ 80,349
$ 244,781
$ 241,467
Percentage rentals 3,210
3,138
6,666
6,798
Expense reimbursements 35,468
34,180
107,876
104,801
Management, leasing and other services 583
588
1,826
1,776
Other income 2,652
2,510
6,333
6,905
Total revenues 124,236
120,765

367,482

361,747
Expenses:
Property operating 39,653
37,571
119,817
115,074
General and administrative 10,752
10,934
32,861
33,846
Abandoned pre-development costs —
(99 ) —
528
Impairment charge 49,739
—
49,739
—
Depreciation and amortization 32,850
30,976
98,667
95,175
Total expenses 132,994
79,382

301,084

244,623
Operating income (loss) (8,758 ) 41,383

66,398

117,124
Other income (expense):
Interest expense (16,367 ) (16,489 ) (48,348 ) (49,496 )
Loss on early extinguishment of debt —
(35,626 ) —
(35,626 )
Gain on sale of assets —
—
—
6,943
Other non-operating income (expense) 261
591
661
683
Income (loss) before equity in earnings (losses) of unconsolidated joint ventures (24,864 ) (10,141 )
18,711

39,628
Equity in earnings (losses) of unconsolidated joint ventures 1,833
(5,893 ) 6,233
(1,201 )
Net income (loss) (23,031 ) (16,034 )
24,944

38,427
Noncontrolling interests in consolidated partnerships —
—
278
—
Net income (loss) available to partners (23,031 ) (16,034 )
25,222

38,427
Net income (loss) available to limited partners (22,798 ) (15,874 ) 24,970
38,048
Net income (loss) available to general partner $ (233 ) $ (160 )
$ 252

$ 379

Basic earnings per common unit:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38
Diluted earnings per common unit:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38

Distribution declared per common unit $ 0.3500
$ 0.3425
$ 1.0425
$ 1.0100



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Revenues:
Rental revenues	$	112,385		$	117,080		$	232,339		$	238,322
Management, leasing and other services	1,245			630			2,587			1,243
Other revenues	2,077			2,001			3,936			3,681
Total revenues	115,707			119,711			238,862			243,246
Expenses:
Property operating	36,726			37,946			79,103			80,164
General and administrative	16,473			10,997			28,618			22,109
Depreciation and amortization	31,146			32,694			62,906			65,817
Total expenses	84,345			81,637			170,627			168,090
Other income (expense):
Interest expense	(15,134		)	(16,181		)	(31,441		)	(31,981		)
Gain on sale of assets	—			—			43,422			—
Other income (expense)	(3,417		)	191			(3,193		)	400
Total other income (expense)	(18,551		)	(15,990		)	8,788			(31,581		)
Income before equity in earnings of unconsolidated joint ventures	12,811			22,084			77,023			43,575
Equity in earnings of unconsolidated joint ventures	1,646			2,206			3,275			4,400
Net income	14,457			24,290			80,298			47,975
Noncontrolling interests in consolidated partnerships	—			(92		)	(195		)	278
Net income available to partners	14,457			24,198			80,103			48,253
Net income available to limited partners	14,311			23,954			79,294			47,768
Net income available to general partner	$	146		$	244		$	809		$	485

Basic earnings per common unit:
Net income	$	0.15		$	0.24		$	0.81		$	0.48
Diluted earnings per common unit:
Net income	$	0.15		$	0.24		$	0.81		$	0.48

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

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
Net income (loss) $ (23,031 ) $ (16,034 ) $ 24,944
$ 38,427
Other comprehensive income (loss):
Foreign currency translation adjustments 1,921
4,737
(3,176 ) 8,821
Changes in fair value of cash flow hedges 512
39
4,095
217
Other comprehensive income 2,433
4,776
919
9,038
Comprehensive income (loss) (20,598 ) (11,258 ) 25,863
47,465
Comprehensive loss attributable to noncontrolling interests in consolidated partnerships —
—
278
—
Comprehensive income (loss) attributable to the Operating Partnership $ (20,598 ) $ (11,258 ) $ 26,141
$ 47,465



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income	$	14,457		$	24,290		$	80,298		$	47,975
Other comprehensive income (loss):
Foreign currency translation adjustments	5,443			(2,002		)	7,392			(5,097		)
Changes in fair value of cash flow hedges	(3,613		)	844			(5,565		)	3,583
Other comprehensive income (loss)	1,830			(1,158		)	1,827			(1,514		)
Comprehensive income	16,287			23,132			82,125			46,461
Comprehensive income (loss) attributable to noncontrolling interests in consolidated partnerships	—			(92		)	(195		)	278
Comprehensive income attributable to the Operating Partnership	$	16,287		$	23,040		$	81,930		$	46,739

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

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except unit and per unit data, unaudited)

General partner Limited partners Accumulated other comprehensive loss Total partners' equity Noncontrolling interests in consolidated partnerships Total equity
Balance, December 31, 2016 $ 6,485
$ 728,631
$ (29,834 ) $ 705,282
$ 159
$ 705,441
Net income 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, net of forfeitures —
—
—
—
—
—
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

General partner Limited partners Accumulated other comprehensive loss Total partners' equity Noncontrolling interests in consolidated partnerships Total equity
Balance, December 31, 2017 $ 5,844
$ 626,803
$ (20,345 ) $ 612,302
$ —
$ 612,302
Net income 252
24,970
—
25,222
(278 ) 24,944
Other comprehensive income —
—
919
919
—
919
Compensation under Incentive Award Plan —
11,654
—
11,654
—
11,654
Grant of 355,184 restricted common share awards by the Company —
—
—
—
—
—
Repurchase of 919,249 units, including transaction costs —
(19,998 ) —
(19,998 ) —
(19,998 )
Withholding of 89,437 common units for employee income taxes —
(2,068 ) —
(2,068 ) —
(2,068 )
Contributions from noncontrolling interests —
—
—
—
445
445
Common distributions ($1.0425
per common unit)
(1,042 ) (102,506 ) —
(103,548 ) —
(103,548 )
Distributions to noncontrolling interests —
—
—
—
(167 ) (167 )
Balance, September 30, 2018 $ 5,054
$ 538,855
$ (19,426 ) $ 524,483
$ —
$ 524,483



	General partner			Limited partners			Accumulated other comprehensive loss			Total partners’ equity			Noncontrolling interests in consolidated partnerships			Total equity
Balance, March 31, 2018	$	5,743		$	608,449		$	(20,701	)	$	593,491		$	—		$	593,491
Net income	244			23,954			—			24,198			92			24,290
Other comprehensive loss	—			—			(1,158		)	(1,158		)	—			(1,158		)
Compensation under Incentive Award Plan	—			3,940			—			3,940			—			3,940
Repurchase of 475,549 units, including transaction costs	—			(10,000		)	—			(10,000		)	—			(10,000		)
Common distributions ($0.35 per common unit)	(350		)	(34,457		)	—			(34,807		)	—			(34,807		)
Distributions to noncontrolling interests	—			—			—			—			(92		)	(92		)
Balance, June 30, 2018	$	5,637		$	591,886		$	(21,859	)	$	575,664		$	—		$	575,664

	General partner			Limited partners			Accumulated other comprehensive loss			Total partners’ equity			Noncontrolling interests in consolidated partnerships			Total equity
Balance, December 31, 2017	$	5,844		$	626,803		$	(20,345	)	$	612,302		$	—		$	612,302
Net income	485			47,768			—			48,253			(278		)	47,975
Other comprehensive loss	—			—			(1,514		)	(1,514		)	—			(1,514		)
Compensation under Incentive Award Plan	—			7,596			—			7,596			—			7,596
Grant of 355,184 restricted common share awards by the Company, net of forfeitures	—			—			—			—			—			—
Repurchase of 919,249 units, including transaction costs	—			(19,998		)	—			(19,998		)	—			(19,998		)
Withholding of 89,437 common units for employee income taxes	—			(2,068		)	—			(2,068		)	—			(2,068		)
Contributions from noncontrolling interests	—			—			—			—			445			445
Common distributions ($0.6925 per common unit)	(692		)	(68,215		)	—			(68,907		)	—			(68,907		)
Distributions to noncontrolling interests	—			—			—			—			(167		)	(167		)
Balance, June 30, 2018	$	5,637		$	591,886		$	(21,859	)	$	575,664		$	—		$	575,664

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



TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except unit and per unit data, unaudited)
	General partner			Limited partners			Accumulated other comprehensive loss			Total partners’ equity			Noncontrolling interests in consolidated partnerships			Total equity
Balance, March 31, 2019	$	5,227		$	526,850		$	(28,634	)	$	503,443		$	—		$	503,443
Net income	146			14,311			—			14,457			—			14,457
Other comprehensive income	—			—			1,830			1,830			—			1,830
Compensation under Incentive Award Plan	—			7,078			—			7,078			—			7,078
Repurchase of 558,399 units, including transaction costs	—			(10,000		)	—			(10,000		)	—			(10,000		)
Reclassification of general and limited partner interest	(355		)	355			—			—			—			—
Contributions from noncontrolling interests	—			—			—			—			18			18
Distributions to noncontrolling interests	—			—			—			—			(18		)	(18		)
Balance, June 30, 2019	$	5,018		$	538,594		$	(26,804	)	$	516,808		$	—		$	516,808

	General partner			Limited partners			Accumulated other comprehensive loss			Total partners’ equity			Noncontrolling interests in consolidated partnerships			Total equity
Balance, December 31, 2018	$	4,914		$	529,252		$	(28,631	)	$	505,535		$	—		$	505,535
Net income	809			79,294			—			80,103			195			80,298
Other comprehensive income	—			—			1,827			1,827			—			1,827
Compensation under Incentive Award Plan	—			10,988			—			10,988			—			10,988
Grant of 242,167 restricted common share awards by the Company	—			—			—			—			—			—
Repurchase of 558,399 units, including transaction costs	—			(10,000		)	—			(10,000		)	—			(10,000		)
Withholding of 81,284 common units for employee income taxes	—			(1,781		)	—			(1,781		)	—			(1,781		)
Contributions from noncontrolling interests	—			—			—			—			36			36
Common distributions ($0.705 per common unit)	(705		)	(69,159		)	—			(69,864		)	—			(69,864		)
Distributions to noncontrolling interests	—			—			—			—			(231		)	(231		)
Balance, June 30, 2019	$	5,018		$	538,594		$	(26,804	)	$	516,808		$	—		$	516,808

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

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Nine months ended September 30,						Six months ended June 30,
	2018			2017			2019			2018
OPERATING ACTIVITIES
Net income	$	24,944		$	38,427		$	80,298		$	47,975
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	98,667			95,175			62,906			65,817
Impairment charge	49,739			—
Amortization of deferred financing costs	2,280			2,640			1,497			1,532
Gain on sale of assets	—			(6,943		)	(43,422		)	—
Loss on early extinguishment of debt	—			35,626
Equity in (earnings) losses of unconsolidated joint ventures	(6,233		)	1,201
Equity in earnings of unconsolidated joint ventures							(3,275		)	(4,400		)
Equity-based compensation expense	10,814			10,114			10,799			7,045
Amortization of debt (premiums) and discounts, net	309			363			220			204
Amortization (accretion) of market rent rate adjustments, net	1,980			2,107			753			1,251
Straight-line rent adjustments	(4,744		)	(4,749		)	(4,886		)	(3,294		)
Distributions of cumulative earnings from unconsolidated joint ventures	6,081			8,128			3,154			4,332
Other non-cash							3,638			—
Changes in other assets and liabilities:
Other assets	(429		)	(1,110		)	(562		)	3,672
Accounts payable and accrued expenses	(3,440		)	551			(18,341		)	(8,842		)
Net cash provided by operating activities	179,968			181,530			92,779			115,292
INVESTING ACTIVITIES
Additions to rental property	(53,349		)	(132,612		)	(22,402		)	(41,212		)
Additions to investments in unconsolidated joint ventures	(1,764		)	(4,033		)	(1,695		)	(1,497		)
Net proceeds from sale of assets	—			39,213			128,248			—
Additions to non-real estate assets	(1,203		)	(8,384		)	(480		)	(1,114		)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	16,656			16,019			12,303			13,911
Additions to deferred lease costs	(5,220		)	(4,218		)	(4,119		)	(2,821		)
Other investing activities	8,065			4,963			4,476			4,032
Net cash used in investing activities	(36,815		)	(89,052		)
Net cash provided by (used) in investing activities							116,331			(28,701		)
FINANCING ACTIVITIES
Cash distributions paid	(103,548		)	(102,859		)	(69,864		)	(68,907		)
Proceeds from revolving credit facility	391,900			543,866			207,500			295,600
Repayments of revolving credit facility	(396,900		)	(456,666		)	(334,100		)	(280,000		)
Proceeds from notes, mortgages and loans	—			299,460
Repayments of notes, mortgages and loans	(10,971		)	(302,240		)	(1,661		)	(10,169		)
Payment of make-whole premium related to early extinguishment of debt	—			(34,143		)
Repurchase of units, including transaction costs	(19,998		)	(49,362		)	(10,000		)	(19,998		)
Employee income taxes paid related to shares withheld upon vesting of equity awards	(2,068		)	(2,436		)	(1,781		)	(2,068		)
Additions to deferred financing costs	(2,615		)	(2,900		)	(65		)	(2,615		)
Proceeds from exercise of options	—			54
Proceeds from other financing activities	445			12,054			36			445
Payment for other financing activities	(1,027		)	(782		)	(805		)	(741		)
Net cash used in financing activities	(144,782		)	(95,954		)	(210,740		)	(88,453		)
Effect of foreign currency on cash and cash equivalents	(60		)	(54		)	(16		)	(53		)
Net decrease in cash and cash equivalents	(1,689		)	(3,530		)	(1,646		)	(1,915		)
Cash and cash equivalents, beginning of period	6,050			12,199			8,991			6,050
Cash and cash equivalents, end of period	$	4,361		$	8,669		$	7,345		$	4,135

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

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 ~~September~~June 30, ~~2018,~~2019, we owned and operated 3632 consolidated outlet centers, with a total gross leasable area of approximately ~~12.9~~12.0 million square feet. We also had partial ownership interests in 87 unconsolidated outlet centers totaling approximately ~~2.4~~2.2 million square feet, including 43 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 owns the majority of the units of partnership interest issued by the Operating Partnership through its two wholly-owned subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust is the sole general partner of the Operating Partnership. Tanger LP Trust holds a limited partnership interest. As of ~~September~~June 30, ~~2018,~~2019, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned ~~93,907,034~~93,544,267 units of the Operating Partnership and other limited partners (the ~~"Non-Company LPs"~~“Non-Company LPs”) collectively owned ~~4,995,433~~4,960,684 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one of the ~~Company's~~Company’s common shares, subject to certain limitations to preserve the ~~Company's~~Company’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. 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 and should be read in conjunction with the consolidated financial statements and notes thereto of the ~~Company's~~Company’s and the Operating ~~Partnership's~~Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018. The December 31, ~~2017~~2018 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 America have been condensed or omitted pursuant to the ~~SEC's~~SEC’s rules and regulations, 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.

Certain prior period balances in the accompanying unaudited consolidated statements of operations have been reclassified or combined to conform to the current period presentation.

We consolidate properties that are wholly-owned and properties where we own less than 100% but 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's~~entity’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's~~venture’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's~~venture’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 ~~Columbus~~National 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's~~LP’s percentage ownership of the Operating ~~Partnership's~~Partnership’s units. ~~"Noncontrolling~~“Noncontrolling interests in other consolidated ~~partnerships"~~partnerships” consist of outside equity interests in partnerships or joint ventures not wholly-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.

3. ~~Impairment Charge and~~ Disposition of ~~Property~~Properties

~~Impairment Charge~~

Rental property held and used by us is reviewed for impairment in the event that facts and circumstances indicate 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.

During the ~~third quarter 2018, we determined that~~six months ended June 30, 2019, the estimated future undiscounted cash flows of our Jeffersonville, OH outlet center did not exceed the property's carrying value due to a decline of operating results at the center likely resulting from increased competition from the Company's center in Columbus, OH and slower than expected improvement from remerchandising activities. Therefore, we recorded a $49.7 million non-cash impairment charge in our consolidated statement of operations which equaled the excess of the property's carrying value over its estimated fair value, see Note 8, for additional informationCompany closed on the ~~fair market value calculation.~~sale of four non-core outlet centers for total gross proceeds of $130.5 million.

~~Disposition of Property~~

The following table sets forth certain summarized information regarding the ~~property~~properties sold during the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2019:

Property

Location

Date Sold

Square Feet

(in 000’s)

Net Sales Proceeds

(in 000’s)

Gain on Sale (in 000’s)

Nags Head, Ocean City, Park City, and Williamsburg

Nags Head, NC, Ocean City, MD, Park City, UT, and Williamsburg, IA

March 2019

878

128,248

43,422

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
$ 39,213
$ 6,943

The rental ~~property~~properties sold did not meet the criteria to be reported as discontinued ~~operations, thus its results of operations have been reported as part of continuing~~ operations.

4. 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, 2019
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⁾
Investments included in investments in unconsolidated joint ventures:
RioCan Canada	Various	50.0	%	762	$	96.3		$	9.5
					$	96.3
Investments included in other liabilities:
Columbus⁽²⁾	Columbus, OH	50.0	%	355	$	(2.3	)	$	84.9
Charlotte⁽²⁾	Charlotte, NC	50.0	%	399	(11.5		)	99.5
National Harbor⁽²⁾	National Harbor, MD	50.0	%	341	(5.2		)	94.4
Galveston/Houston ⁽²⁾	Texas City, TX	50.0	%	353	(20.5		)	79.7
					$	(39.5	)


As of September 30, 2018
As of December 31, 2018											As of December 31, 2018
Joint Venture		Outlet Center Location	Ownership %		Square Feet (in 000's)	Carrying Value of Investment (in millions)			Total Joint Venture Debt, Net (in millions)⁽¹⁾			Outlet Center Location	Ownership %		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:	Investments included in investments in unconsolidated joint ventures:										Investments included in investments in unconsolidated joint ventures:
National Harbor		National Harbor, MD	50.0	%	341	$	0.6		$	86.7
RioCan Canada		Various	50.0	%	923	110.7			10.2			Various	50.0	%	924	$	96.0		$	9.3
						$	111.3									$	96.0
Investments included in other liabilities:	Investments included in other liabilities:										Investments included in other liabilities:
Columbus⁽²⁾		Columbus, OH	50.0	%	355	$	(1.1	)	$	84.7		Columbus, OH	50.0	%	355	$	(1.6	)	$	84.7
Charlotte⁽²⁾		Charlotte, NC	50.0	%	398	(10.3		)	99.5			Charlotte, NC	50.0	%	398	(10.8		)	99.5
National Harbor ⁽²⁾												National Harbor, MD	50.0	%	341	(5.1		)	94.5
Galveston/Houston ⁽²⁾		Texas City, TX	50.0	%	353	(15.3		)	79.5			Texas City, TX	50.0	%	353	(15.0		)	79.6
						$	(26.7	)								$	(32.5	)

As of December 31, 2017
Joint Venture Outlet Center Location Ownership %
Square Feet
(in 000's)
Carrying Value of Investment (in millions)
Total Joint Venture Debt, Net
(in millions)⁽¹⁾
Investments included in investments in unconsolidated joint ventures:
Columbus Columbus, OH 50.0 % 355
$ 1.1
$ 84.4
National Harbor National Harbor, MD 50.0 % 341
2.5
86.4
RioCan Canada Various 50.0 % 923
115.8
11.1
$ 119.4

Investments included in other liabilities:
Charlotte⁽²⁾
Charlotte, NC 50.0 % 398
$ (4.1 ) $ 89.8
Galveston/Houston ⁽²⁾
Texas City, TX 50.0 % 353
(13.0 ) 79.4
$ (17.1 )


(1)	Net of debt origination costs and including premiums of $1.3 million and $1.4 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018, respectively.


(2)	The negative carrying value is due to distributions exceeding contributions and increases or decreases from our equity in earnings of the joint venture.

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 ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Fee:
Management and marketing	$	561	$	565	$	1,128	$	1,133
Leasing and other fees	9		65		40		110
Expense reimbursements from unconsolidated joint ventures	675		512		1,419		1,097
Total Fees	$	1,245	$	1,142	$	2,587	$	2,340

Three months ended
Nine months ended
September 30,
September 30,
2018 2017
2018
2017
Fee:

Management and marketing $ 571
$ 564
$ 1,704
$ 1,676
Leasing and other fees 12
24
122
100
Total Fees $ 583
$ 588
$ 1,826
$ 1,776

Expense reimbursements from unconsolidated joint ventures were previously included in expense reimbursements in our June 30, 2018 Form 10-Q. As these revenues are not related to leases, the 2018 amounts have been reclassified to management, leasing and other services on the consolidated statements of operations to conform to the current year presentation. See Note 17 for discussion of adoption of Accounting Standards Codification Topic 842 “Leases”.

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~~“Summary 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 ~~$4.1~~$3.9 million and ~~$4.2~~$4.1 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively) are amortized over the various useful lives of the related assets.

~~Charlotte~~RioCan Canada

In ~~June 2018,~~May 2019, the ~~Charlotte~~RioCan joint venture closed on the sale of its outlet center in Bromont, for net proceeds of approximately $6.4 million. Our share of the proceeds was approximately $3.2 million. As a ~~$100.0~~result of this transaction, we recorded a foreign currency loss of approximately $3.6 million mortgage loan with a fixed interest rate of 4.3% and a maturity date of July 2028. The proceeds from the loan were used to pay off the $90.0 million mortgage loan with an interest rate of LIBOR + 1.45%in other income (expense), which had ~~an original maturity date of November 2018. The joint venture distributed the incremental net loan proceeds of $9.3 million equally to the partners.~~

~~RioCan Canada~~

During the third quarter of 2017, the joint venture determined for its Bromont and Saint Sauveur, Quebec outlet centers that the estimated future undiscounted cash flows of those properties did not exceed the properties' carrying values based on the joint venture's expectations of the future performance of the centers. Therefore, the joint venture recorded an $18.0 million non-cash impairment charge in its statement of operations, which equaled the excess of the properties' carrying values over their fair values. The fair values were determined using a market approach considering the prevailing market income capitalization rates for similar assets. Our share of this impairment charge, $9.0 million, wasbeen previously recorded in ~~equity 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 Ventures	June 30, 2019			December 31, 2018
Assets
Land	$	90,579		$	91,443
Buildings, improvements and fixtures	473,016			469,834
Construction in progress	4,207			2,841
	567,802			564,118
Accumulated depreciation	(121,741		)	(113,713		)
Total rental property, net	446,061			450,405
Cash and cash equivalents	15,345			16,216
Deferred lease costs and other intangibles, net	7,530			8,437
Prepaids and other assets	15,956			25,648
Total assets	$	484,892		$	500,706
Liabilities and Owners’ Equity
Mortgages payable, net	$	368,072		$	367,865
Accounts payable and other liabilities	12,932			13,414
Total liabilities	381,004			381,279
Owners’ equity	103,888			119,427
Total liabilities and owners’ equity	$	484,892		$	500,706



	Three months ended						Six months ended
Condensed Combined Statements of Operations	June 30,						June 30,
- Unconsolidated Joint Ventures	2019			2018			2019			2018
Revenues	$	23,575		$	23,406		$	47,038		$	47,403
Expenses:
Property operating	9,611			8,958			19,400			18,886
General and administrative	62			54			152			253
Depreciation and amortization	6,317			6,545			12,427			12,907
Total expenses	15,990			15,557			31,979			32,046
Other income (expense):
Interest expense	(4,138		)	(3,388		)	(8,272		)	(6,465		)
Other income	60			55			126			107
Total other income (expense)	(4,078		)	(3,333		)	$	(8,146	)	$	(6,358	)
Net income	$	3,507		$	4,516		$	6,913		$	8,999
The Company and Operating Partnership’s share of:
Net income	$	1,646		$	2,206		$	3,275		$	4,400
Depreciation and amortization (real estate related)	$	3,265		$	3,325		$	6,395		$	6,554

Condensed Combined Balance Sheets - Unconsolidated Joint Ventures September 30, 2018 December 31, 2017
Assets

Land $ 94,118
$ 95,686
Buildings, improvements and fixtures 503,430
505,618
Construction in progress 3,169
3,005
600,717
604,309
Accumulated depreciation (110,213 ) (93,837 )
Total rental property, net 490,504
510,472
Cash and cash equivalents 13,366
25,061
Deferred lease costs and other intangibles, net 9,387
10,985
Prepaids and other assets 18,142
15,073
Total assets $ 531,399
$ 561,591
Liabilities and Owners' Equity

Mortgages payable, net $ 360,600
$ 351,259
Accounts payable and other liabilities 11,114
14,680
Total liabilities 371,714
365,939
Owners' equity 159,685
195,652
Total liabilities and owners' equity $ 531,399
$ 561,591

Three months ended Nine months ended
Condensed Combined Statements of Operations September 30, September 30,
- Unconsolidated Joint Ventures 2018 2017 2018 2017
Revenues $ 23,538
$ 25,241
$ 70,940
$ 72,588
Expenses:

Property operating 9,147
8,987
28,032
27,242
General and administrative 49
72
301
289
Asset impairment —
18,042
—
18,042
Depreciation and amortization 6,860
6,998
19,768
21,453
Total expenses 16,056
34,099
48,101
67,026
Operating income (loss) 7,482
(8,858 ) 22,839
5,562
Interest expense (3,810 ) (2,776 ) (10,275 ) (7,497 )
Other non-operating income 68
20
175
23
Net income (loss) $ 3,740
$ (11,614 ) $ 12,739
$ (1,912 )

The Company and Operating Partnership's share of:

Net income (loss) $ 1,833
$ (5,893 ) $ 6,233
$ (1,201 )
Depreciation and amortization and asset impairments (real estate related) $ 3,466
$ 12,604
$ 10,020
$ 19,992

5. Debt Guaranteed by the Company

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

The Company guarantees the Operating ~~Partnership's~~Partnership’s obligations with respect to its unsecured lines of credit which have a total borrowing capacity of $600.0 million. The Company also guarantees the Operating ~~Partnership's~~Partnership’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, 2019		December 31, 2018
Unsecured lines of credit	$	18,500	$	145,100
Unsecured term loan	$	350,000	$	350,000

As of
September 30, 2018 December 31, 2017
Unsecured lines of credit $ 203,100
$ 208,100
Unsecured term loan $ 325,000
$ 325,000

6. Debt of the Operating Partnership

The debt of the Operating Partnership consisted of the following (in thousands):


					As of				As of										As of				As of
					September 30, 2018				December 31, 2017										June 30, 2019				December 31, 2018
		Stated Interest Rate(s)		Maturity Date	Principal		Book Value⁽¹⁾		Principal		Book Value⁽¹⁾			Stated Interest Rate(s)				Maturity Date	Principal		Book Value⁽¹⁾		Principal		Book Value⁽¹⁾
Senior, unsecured notes:	Senior, unsecured notes:												Senior, unsecured notes:
Senior notes		3.875	%	December 2023	$	250,000	$	246,505	$	250,000	$	246,036		3.875	%			December 2023	$	250,000	$	246,983	$	250,000	$	246,664
Senior notes		3.750	%	December 2024	250,000		247,677		250,000		247,410			3.750	%			December 2024	250,000		247,945		250,000		247,765
Senior notes		3.125	%	September 2026	350,000		345,533		350,000		345,128			3.125	%			September 2026	350,000		345,942		350,000		345,669
Senior notes		3.875	%	July 2027	300,000		296,469		300,000		296,182			3.875	%			July 2027	300,000		296,759		300,000		296,565

Mortgages payable:
Atlantic City ⁽²⁾⁽³⁾		5.14%-7.65%		November 2021- December 2026	35,091		37,211		37,462		39,879			5.14	%	-	7.65%	November 2021- December 2026	32,617		34,438		34,279		36,298
Southaven		LIBOR + 1.80%		April 2021	51,400		51,148		60,000		59,881			LIBOR		+	1.80%	April 2021	51,400		51,223		51,400		51,173
Unsecured term loan		LIBOR + 0.95%		April 2021	325,000		323,416		325,000		322,975			LIBOR		+	0.90%	April 2024	350,000		347,102		350,000		346,799
Unsecured lines of credit		LIBOR + 0.875%		October 2021	203,100		199,701		208,100		206,160			LIBOR		+	0.875%	October 2021	18,500		15,917		145,100		141,985
					$	1,764,591	$	1,747,660	$	1,780,562	$	1,763,651							$	1,602,517	$	1,586,309	$	1,730,779	$	1,712,918


(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%.


(3)	Principal and interest due monthly with remaining principal due at maturity.

Certain of our properties, which had a net book value of approximately ~~$183.3~~$176.8 million at ~~September~~June 30, ~~2018,~~2019, serve as collateral for mortgages payable. We maintain unsecured lines of credit that provide for borrowings of up to $600.0 million. The unsecured lines of credit include a $20.0 million liquidity line and a $580.0 million syndicated line. The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances. As of ~~September~~June 30, ~~2018,~~2019, letters of credit totaling approximately ~~$6.0 million~~$170,000 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% to 100% 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 ~~September~~June 30, ~~2018,~~2019, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was ~~$28.2~~$19.4 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 ~~September~~June 30, ~~2018,~~2019, we believe we were in compliance with all of our debt covenants.

~~Increased Borrowing Capacity and Extension of Unsecured Lines of Credit~~

In January 2018, we closed on amendments to our unsecured lines of credit, which increased the borrowing capacity from $520.0 million to $600.0 million and extended the maturity date from October 2019 to October 2021, with a one-year extension option. We also reduced the interest rate spread over LIBOR from 0.90% to 0.875%, and increased the incremental borrowing availability through an accordion feature on the syndicated line from $1.0 billion to $1.2 billion. Loan origination costs associated with the amendments totaled approximately $2.3 million.

~~Southaven Mortgage~~

In February 2018, the consolidated joint venture that owns the Tanger outlet center in Southaven, Mississippi amended and restated the $60.0 million mortgage loan secured by the property that was scheduled to mature in April 2018. The amended and restated loan reduced the principal balance to $51.4 million, increased the interest rate from LIBOR + 1.75% to LIBOR + 1.80% and extended the maturity to April 2021, with a two-year extension option. In March 2018, the consolidated joint venture entered into an interest rate swap, effective March 1, 2018, that fixed the base LIBOR rate at 2.47% on a notional amount of $40.0 million through January 31, 2021.

~~$300.0 Million Unsecured Senior Notes due 2027~~

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 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 ~~September~~June 30, ~~2018~~2019 for the next five years and thereafter are as follows (in thousands):



Calendar Year	Amount
For the remainder of 2019	$	1,708
2020	3,566
2021	75,693
2022	4,436
2023	254,768
Thereafter	1,262,346
Subtotal	1,602,517
Net discount and debt origination costs	(16,208		)
Total	$	1,586,309

Calendar Year Amount
2018 $ 813
2019 3,369
2020 3,566
2021 585,293
2022 4,436
Thereafter 1,167,114
Subtotal 1,764,591
Net discount and debt origination costs (16,931 )
Total $ 1,747,660

7. 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 Date	Maturity Date	Notional Amount		Bank Pay Rate		Company Fixed Pay Rate		June 30, 2019			December 31, 2018
Assets (Liabilities)⁽¹⁾:
April 13, 2016	January 1, 2021	175,000		1	month LIBOR	1.03	%	$	1,842		$	4,948
March 1, 2018	January 31, 2021	40,000		1	month LIBOR	2.47	%	(475		)	(6		)
August 14, 2018	January 1, 2021	150,000		1	month LIBOR	2.20	%	(1,054		)	807
July, 1, 2019 ⁽²⁾	February 1, 2024	25,000		1	month LIBOR	1.75	%	(129		)	—
Total		$	390,000					$	184		$	5,749

Fair Value
Effective Date Maturity Date Notional Amount Bank Pay Rate Company Fixed Pay Rate September 30, 2018 December 31, 2017
Assets (Liabilities)⁽¹⁾:

November 14, 2013 August 14, 2018 $ 150,000
1 month LIBOR 1.30 % $ —
$ 326
April 13, 2016 January 1, 2021 175,000
1 month LIBOR 1.03 % 6,988
5,207
March 1, 2018 January 31, 2021 40,000
1 month LIBOR 2.47 % 335
—
August 14, 2018 January 1, 2021 150,000
1 month LIBOR 2.20 % 2,117
(188 )
Total $ 515,000
$ 9,440
$ 5,345


(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.


(2)	In June 2019, we entered into a $25.0 million forward starting interest rate swap agreement, effective July 1, 2019.

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 changes~~Changes in the fair value of derivatives designated and qualifying as cash flow hedges is 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, 2018 and 2017, 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,
	2019			2018		2019			2018
Interest Rate Swaps:
Amount of gain (loss) recognized in Other comprehensive income on derivative	$	(3,613	)	$	844	$	(5,565	)	$	3,583

Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
Interest Rate Swaps (Effective Portion):

Amount of gain recognized in OCI on derivative $ 512
$ 39
$ 4,095
$ 217

8. 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:



Tier		Description
Level 1		Observable inputs such as quoted prices in active markets
Level 2		Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3		Unobservable 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 1		Level 2			Level 3				Level 1		Level 2		Level 3
			Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs			Significant Unobservable Inputs				Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
	Total				Significant Observable Inputs		Total							Significant Observable Inputs		Significant Unobservable Inputs
Fair value as of September 30, 2018:
Fair value as of June 30, 2019:
Asset:								Significant Unobservable Inputs
Interest rate swaps (prepaids and other assets)	$	9,440	$	—	$	9,440		$	—	$	1,842	$	—	$	1,842	$	—
Total assets	$	9,440	$	—	$	9,440		$	—	$	1,842	$	—	$	1,842	$	—

Liabilities:
Interest rate swaps (other liabilities)										$	1,658	$	—	$	1,658	$	—
Total liabilities										$	1,658	$	—	$	1,658	$	—



			Level 1		Level 2		Level 3
			Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
	Total				Significant Observable Inputs		Significant Unobservable Inputs
Fair value as of December 31, 2018:
Asset:
Interest rate swaps (prepaids and other assets)	$	5,755	$	—	$	5,755	$	—
Total assets	$	5,755	$	—	$	5,755	$	—

Liabilities:
Interest rate swaps (other liabilities)	$	6	$	—	$	6	$	—
Total liabilities	$	6	$	—	$	6	$	—

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, 2017:
Asset:
Interest rate swaps (prepaids and other assets) $ 5,533
$ —
$ 5,533
$ —
Total assets $ 5,533
$ —
$ 5,533
$ —

Liabilities:
Interest rate swaps (other liabilities) $ 188
$ —
$ 188
$ —
Total liabilities $ 188
$ —
$ 188
$ —

Fair values of interest rate swaps are approximated 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.

~~Fair Value Measurements on a Nonrecurring Basis~~

~~The following table sets forth our assets that are measured at fair value on a nonrecurring basis within the fair value hierarchy (in thousands):~~

During the third quarter 2018, we recorded a $49.7 million impairment charge in our consolidated statement of operations which equaled the excess of the our Jeffersonville outlet center carrying value over its estimated fair value. The estimated fair value is based on the income approach. The income approach involves discounting the estimated income stream and reversion (presumed sale) value of a property over an estimated holding period to a present value at a risk-adjusted rate. Discount rates and terminal capitalization rates utilized in this approach are derived from property-specific information, market transactions and other financial and industry data. The terminal capitalization rate and discount rate are significant unobservable inputs in determining the fair value. The terminal capitalization rate used in the calculation was 10% and the discount rate used was 10%. These inputs are classified under Level 3 in the fair value hierarchy above.

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, 2019		December 31, 2018
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities	$	—	$	—
Level 2 Significant Observable Inputs	1,139,946		1,085,138
Level 3 Significant Unobservable Inputs	454,808		583,337
Total fair value of debt	$	1,594,754	$	1,668,475

Recorded value of debt	$	1,586,309	$	1,712,918

September 30, 2018 December 31, 2017
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities $ —
$ —
Level 2 Significant Observable Inputs 1,086,988
1,139,064
Level 3 Significant Unobservable Inputs 617,824
636,476
Total fair value of debt $ 1,704,812
$ 1,775,540

Recorded value of debt $ 1,747,660
$ 1,763,651

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.

9. Shareholders’ Equity of the Company

Share Repurchase Program

In May 2017, wethe Company announced that our Board of Directors authorized the repurchase of up to $125.0 million of our outstanding common shares as market conditions warrant over a period commencing on May 19, 2017 and expiring on May 18, 2019. As of December 31, 2018, the remaining amount authorized to be repurchased under the program was approximately $55.7 million.

In February 2019, the Company’s Board of Directors authorized the repurchase of up to an additional $44.3 million of our outstanding common shares for a total authorized amount of $100.0 million. The Board of Directors also extended the expiration of the existing plan by two years to May 2021. 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.

Shares repurchased ~~for the three and nine months ended September 30, 2018~~ are as follows:



	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Total number of shares purchased	558,399		475,549		558,399		919,249
Average price paid per share	$	17.89	$	21.01	$	17.89	$	21.74
Total price paid exclusive of commissions and related fees (in thousands)	$	9,989	$	9,990	$	9,989	$	19,980

Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
Total number of shares purchased —
1,265,404
919,249
1,911,585
Average price paid per share $ —
$ 25.61
$ 21.74
$ 25.80
Total price paid exclusive of commissions and related fees (in thousands) $ —
$ 32,407
$ 19,980
$ 49,324

The remaining amount authorized to be repurchased under the program as of ~~September~~June 30, ~~2018~~2019 was approximately ~~$55.7~~$90.0 million.

10. ~~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, a wholly-owned subsidiary of the Company. Likewise, when the Company repurchases its outstanding common shares, the Operating Partnership repurchases a corresponding Class B common limited partnership unit held by Tanger LP Trust.

The following table sets forth the changes in outstanding partnership units for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2017:~~2018:



		Limited Partnership Units
	General Partnership Units	Class A	Class B		Total
March 31, 2018	1,000,000	4,995,433	93,382,583		98,378,016
Repurchase of units	—	—	(475,549	)	(475,549	)
Balance June 30, 2018	1,000,000	4,995,433	92,907,034		97,902,467

Balance December 31, 2017	1,000,000	4,995,433	93,560,536		98,555,969
Grant of restricted common share awards by the Company, net of forfeitures	—	—	355,184		355,184
Repurchase of units	—	—	(919,249	)	(919,249	)
Units withheld for employee income taxes	—	—	(89,437	)	(89,437	)
Balance June 30, 2018	1,000,000	4,995,433	92,907,034		97,902,467

March 31, 2019	1,000,000	4,960,684	93,102,666		98,063,350
Repurchase of units	—	—	(558,399	)	(558,399	)
Balance June 30, 2019	1,000,000	4,960,684	92,544,267		97,504,951

Balance December 31, 2018	1,000,000	4,960,684	92,941,783		97,902,467
Grant of restricted common share awards by the Company, net of forfeitures	—	—	242,167		242,167
Repurchase of units	—	—	(558,399	)	(558,399	)
Units withheld for employee income taxes	—	—	(81,284	)	(81,284	)
Balance June 30, 2019	1,000,000	4,960,684	92,544,267		97,504,951

Limited Partnership Units
General Partnership Units Class A Class B Total
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

Balance December 31, 2017 1,000,000
4,995,433
93,560,536
98,555,969
Grant of restricted common share awards by the Company, net of forfeitures —
—
355,184
355,184
Repurchase of units —
—
(919,249 ) (919,249 )
Units withheld for employee income taxes —
—
(89,437 ) (89,437 )
Balance September 30, 2018 1,000,000
4,995,433
92,907,034
97,902,467

11. Earnings Per Share of the Company

The following table sets forth a reconciliation of the numerators and denominators in computing the ~~Company's~~Company’s earnings per share (in thousands, except per share amounts):



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Numerator:
Net income attributable to Tanger Factory Outlet Centers, Inc.	$	13,727		$	22,969		$	76,058		$	45,807
Less allocation of earnings to participating securities	(114		)	(313		)	(725		)	(576		)
Net income available to common shareholders of Tanger Factory Outlet Centers, Inc.	$	13,613		$	22,656		$	75,333		$	45,231
Denominator:
Basic weighted average common shares	93,187			93,298			93,245			93,470
Diluted weighted average common shares	93,187			93,298			93,245			93,470
Basic earnings per common share:
Net income	$	0.15		$	0.24		$	0.81		$	0.48
Diluted earnings per common share:
Net income	$	0.15		$	0.24		$	0.81		$	0.48

Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
Numerator:
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $ (21,859 ) $ (15,219 ) $ 23,948
$ 36,507
Less allocation of earnings to participating securities (313 ) (306 ) (889 ) (907 )
Net income (loss) available to common shareholders of Tanger Factory Outlet Centers, Inc. $ (22,172 ) $ (15,525 ) $ 23,059
$ 35,600
Denominator:
Basic weighted average common shares 93,109
93,923
93,349
94,781
Effect of outstanding options and certain restricted common shares —
—
—
23
Diluted weighted average common shares 93,109
93,923
93,349
94,804
Basic earnings per common share:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38
Diluted earnings per common share:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38

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. There were no securities which had a dilutive effect on earnings per common share for the three months and six months ended June 30, 2019 and 2018.

Notional 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 both the three and ~~nine~~six months ended ~~September~~June 30, ~~2018, 1,013,383~~2019, approximately 1.1 million notional units were excluded from the computation and for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, 858,116~~2018 approximately 1.0 million notional units were excludedfrom the computation 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.

With 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 ~~nine~~six months ended ~~September~~June 30, 2019, 526,000 options were excluded from the computation, and for both the three and six months endedJune 30, 2018,~~547,000~~ approximately 558,000 options were excluded from the computation as they were anti-dilutive. ~~For the three months~~ended September 30, 2017, 235,700 options were excluded from the computation, and for the nine months ended September 30, 2017, 173,500 options were excluded from the computation 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's~~Company’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.

12. 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,
	2019			2018			2019			2018
Numerator:
Net income attributable to partners of the Operating Partnership	$	14,457		$	24,198		$	80,103		$	48,253
Less allocation of earnings to participating securities	(114		)	(313		)	(725		)	(576		)
Net income available to common unitholders of the Operating Partnership	$	14,343		$	23,885		$	79,378		$	47,677
Denominator:
Basic weighted average common units	98,147			98,294			98,205			98,466
Diluted weighted average common units	98,147			98,294			98,205			98,466
Basic earnings per common unit:
Net income	$	0.15		$	0.24		$	0.81		$	0.48
Diluted earnings per common unit:
Net income	$	0.15		$	0.24		$	0.81		$	0.48

Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
Numerator:

Net income (loss) attributable to partners of the Operating Partnership $ (23,031 ) $ (16,034 ) $ 25,222
$ 38,427
Less allocation of earnings to participating securities (313 ) (306 ) (889 ) (907 )
Net income (loss) available to common unitholders of the Operating Partnership $ (23,344 ) $ (16,340 ) $ 24,333
$ 37,520
Denominator:
Basic weighted average common units 98,104
98,951
98,344
99,809
Effect of outstanding options and certain restricted common units —
—
—
23
Diluted weighted average common units 98,104
98,951
98,344
99,832
Basic earnings per common unit:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38
Diluted earnings per common unit:
Net income (loss) $ (0.24 ) $ (0.17 ) $ 0.25
$ 0.38

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. There were no securities which had a dilutive effect on earnings per common unit for the three and six months ended June 30, 2019 and 2018.

Notional 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 ~~shares~~units would be issuable if the end of the reporting period were the end of the contingency period. For both the three and ~~nine~~six months ended ~~September~~June 30, ~~2018, 1,013,383~~2019, approximately 1.1 million notional units were excluded from the computation and for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, 858,116~~2018 approximately 1.0 million notional units were excludedfrom the computation 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 ~~because~~as they were anti-dilutive.

With 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 ~~nine~~six months ended ~~September~~June 30, 2019, approximately 526,000 options were excluded from the computation, and for the three and six months endedJune 30, 2018, ~~547,000~~approximately 558,000 options were excluded from the computation as they were anti-dilutive. For the three months ended September 30, 2017, 235,700 options were excluded from the computation and for the nine months ended September 30, 2017, 173,500 options were excluded from the computation, as they were anti-dilutive.

Certain of the ~~Company's~~Company’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.

13. 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 (as amended and restated on April 4, 2014, ~~(the "Plan"~~the “Plan”), which covers our non-employee directors, officers, employees and consultants. For each common share issued by the Company, the Operating Partnership issues one corresponding unit of partnership interest to the ~~Company's~~Company’s wholly-owned subsidiaries. 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 ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Restricted common shares ⁽¹⁾	$	4,627	$	2,366	$	7,140	$	4,855
Notional unit performance awards ⁽¹⁾	2,314		1,014		3,576		1,998
Options	41		99		84		192
Total equity-based compensation	$	6,982	$	3,479	$	10,800	$	7,045


(1)	Includes the accelerated recognition of compensation cost related to the planned retirement of an executive officer.

Three months ended Nine months ended
September 30, September 30,
2018 2017 2018 2017
Restricted common shares $ 2,275
$ 2,302
$ 7,359
$ 7,039
Notional unit performance awards 1,040
939
3,141
2,870
Options 92
77
314
205
Total equity-based compensation $ 3,407
$ 3,318
$ 10,814
$ 10,114

Equity-based compensation expense capitalized as a part of rental property and deferred lease costs were as follows (in thousands):



	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Equity-based compensation expense capitalized	$	96	$	461	$	188	$	552

Three months ended Nine months ended
September 30, September 30,
2018 2017 2018 2017
Equity-based compensation expense capitalized $ 652
$ 267
$ 840
$ 777

~~Option Awards~~

~~During February 2018, the Company granted 331,000~~options to non-executive employees of the Company. The exercise price of the options granted during the first quarter of 2018 is $21.94 per share which equaled the closing market price of the Company's common shares on the day prior to the grant date. The options expire 10 years from the date of grant and 20% of the options become exercisable in each of the first five years commencing one year from the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $3.62 and included the following weighted-average assumptions: expected dividend yield 6.24%; expected life of 7.1 years; expected volatility of 32.47%; a risk-free rate of 2.8%; and forfeiture rates of 3.0% to 10.0% dependent upon the employee's position within the Company.

Restricted Common Share and Restricted Share Unit Awards

During February ~~2018,~~2019, the Company granted ~~407,156~~approximately 309,000 in restricted common shares and restricted share units to the ~~Company's~~Company’s non-employee directors and the ~~Company's~~Company’s senior executive officers. The grant date fair value of the awards ranged from ~~$18.65~~$19.01 to ~~$21.94~~$21.73 per share. The non-employee ~~directors'~~directors’ restricted common shares ~~generally~~ vest ratably over a three year period and the senior executive ~~officers'~~officers’ restricted shares (other than our ~~chief executive officer's) generally~~Chief Executive Officer’s) vest ratably over a three or five year period. Our ~~chief executive officer’s~~Chief Executive Officer’s restricted shares ~~generally~~ vest ~~ratably over a two year period~~on the first anniversary of the grant date and his restricted share units ~~generally~~ vest in two equal installments on the second and third ~~anniversary~~anniversaries of the grant date. For the restricted shares and units issued to our ~~chief executive officer,~~Chief Executive Officer, the award agreements ~~generally~~ require him to hold shares or units issued to him for a minimum of three years following vesting or the share issuance date, as applicable. 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'~~employees’ maximum statutory obligation ~~(minimum obligation during 2017)~~ 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 89,437~~were approximately 81,000 and ~~69,886~~89,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019and~~2017, respectively. No shares were withheld for the three months ended September 30,~~ 2018, ~~and 2017.~~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~~were $1.8 million for the six months ended June 30, 2019 and $2.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018 and was $2.4 million for the nine months ended September 30, 2017.~~2018. These amounts are reflected as financing activities within the consolidated statements of cash flows.

~~2018~~2019 Outperformance Plan

In February ~~2018,~~2019, the Compensation Committee of ~~Tanger Factory Outlet Centers, Inc.~~the Company approved the general terms of the Tanger Factory Outlet Centers, Inc. ~~2018~~2019 Outperformance Plan (the ~~“2018 OPP"~~“2019 OPP”),. The 2019 OPP is a long-term incentive compensation plan. Recipients ~~receive notional~~may 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~~return) and its ~~total shareholder return~~share price appreciation relative to its peer group (or relative total shareholder return) over a three-year measurement period. ~~For all recipients (other than our chief executive officer), any~~Any shares earned at the end of the three-year measurement period are ~~issued immediately following such measurement period, but are restricted and remain~~ 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 ~~dates~~date (unless terminated prior thereto (a) by the Company without cause, (b) by participant for good reason or, ~~(c) due~~with respect to ~~death or disability). For~~ our chief executive officer, any shares earned at the end of the three-year measurement period remain subject to a time-based vesting schedule and are issued following vesting, with 50% of the shares vesting immediately following issuance, and the remaining 50% vesting one year thereafter, contingent upon continued employment with the Company through the vesting dates (unless terminated prior thereto (a) by the Company without cause, (b) by participant for good reason or due toChief Executive Officer, retirement or (c) due to death or disability).

The following table sets forth ~~2018~~2019 OPP performance targets and other relevant information about the ~~2018~~2019 OPP:


Performance targets ⁽¹⁾
Absolute portion of award:
Percent of total award	33.3%		33.3%
Absolute total shareholder return range	19.1% - 29.5%		19.1% - 29.5%
Percentage of units to be earned	20%-100%		20%-100%

Relative portion of award:
Percent of total award	66.7%		66.7%
Percentile rank of peer group range⁽²⁾	30th - 80th		30th - 80th
Percentage of units to be earned	20%-100%		20%-100%

Maximum number of restricted common shares that may be earned	409,972		531,827
Grant date fair value per share	$	12.42	$	12.09


(1)	The number of restricted common shares received under the ~~2018~~2019 OPP 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~~Company’s peer group.


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

The fair values of the ~~2018~~2019 OPP awards granted during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:



Risk free interest rate ⁽¹⁾	~~2.40~~2.6	%
Expected dividend yield ⁽²⁾	~~4.8~~5.3	%
Expected volatility ⁽³⁾	2724	%


(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.

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

The following table presents changes in the balances of each component of accumulated comprehensive income (loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 (in thousands):

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, 2018 $ (29,198 ) $ 8,476
$ (20,722 ) $ (1,588 ) $ 451
$ (1,137 )
Other comprehensive income before reclassifications 1,823
1,013
2,836
98
54
152
Reclassification out of accumulated other comprehensive income into interest expense —
(527 ) (527 ) —
(28 ) (28 )
Balance September 30, 2018 $ (27,375 ) $ 8,962
$ (18,413 ) $ (1,490 ) $ 477
$ (1,013 )

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, 2017 $ (24,360 ) $ 5,075
$ (19,285 ) $ (1,329 ) $ 269
$ (1,060 )
Other comprehensive income (loss) before reclassifications (3,015 ) 5,267
2,252
(161 ) 282
121
Reclassification out of accumulated other comprehensive income into interest expense —
(1,380 ) (1,380 ) —
(74 ) (74 )
Balance September 30, 2018 $ (27,375 ) $ 8,962
$ (18,413 ) $ (1,490 ) $ 477
$ (1,013 )




	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 March 31, 2019	$	(30,759	)	$	3,606		$	(27,153	)	$	(1,672	)	$	191		$	(1,481	)
Other comprehensive income (loss) before reclassifications	1,714			(2,683		)	(969		)	91			(143		)	(52		)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges	3,454			(747		)	2,707			184			(40		)	144
Balance June 30, 2019	$	(25,591	)	$	176		$	(25,415	)	$	(1,397	)	$	8		$	(1,389	)


	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, 2018	$	(32,610	)	$	5,459		$	(27,151	)	$	(1,770	)	$	290		$	(1,480	)
Other comprehensive income (loss) before reclassifications	3,565			(3,849		)	(284		)	189			(205		)	(16		)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges	3,454			(1,434		)	2,020			184			(77		)	107
Balance June 30, 2019	$	(25,591	)	$	176		$	(25,415	)	$	(1,397	)	$	8		$	(1,389	)




	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 March 31, 2018	$	(27,298	)	$	7,675		$	(19,623	)	$	(1,486	)	$	408		$	(1,078	)
Other comprehensive income (loss) before reclassifications	(1,900		)	1,340			(560		)	(102		)	72			(30		)
Reclassification out of accumulated other comprehensive income (loss) into interest expense	—			(539		)	(539		)	—			(29		)	(29		)
Balance June 30, 2018	$	(29,198	)	$	8,476		$	(20,722	)	$	(1,588	)	$	451		$	(1,137	)


	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, 2017	$	(24,360	)	$	5,075		$	(19,285	)	$	(1,329	)	$	269		$	(1,060	)
Other comprehensive income (loss) before reclassifications	(4,838		)	4,254			(584		)	(259		)	228			(31		)
Reclassification out of accumulated other comprehensive income (loss) into interest expense	—			(853		)	(853		)	—			(46		)	(46		)
Balance June 30, 2018	$	(29,198	)	$	8,476		$	(20,722	)	$	(1,588	)	$	451		$	(1,137	)

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 )

We expect within the next twelve months to reclassify into earnings as a decrease to interest expense approximately ~~$3.1 million~~$617,000 of the amounts recorded within accumulated other comprehensive income related to the interest rate swap agreements in effect as of ~~September~~June 30, ~~2018.~~2019.

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

Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance June 30, 2018 $ (30,786 ) $ 8,927
$ (21,859 )
Other comprehensive income before reclassifications 1,921
1,067
2,988
Reclassification out of accumulated other comprehensive income into interest expense —
(555 ) (555 )
Balance September 30, 2018 $ (28,865 ) $ 9,439
$ (19,426 )

Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2017 $ (25,689 ) $ 5,344
$ (20,345 )
Other comprehensive income (loss) before reclassifications (3,176 ) 5,549
2,373
Reclassification out of accumulated other comprehensive income into interest expense —
(1,454 ) (1,454 )
Balance September 30, 2018 $ (28,865 ) $ 9,439
$ (19,426 )



	Foreign Currency			Cash flow hedges			Accumulated Other Comprehensive Income (Loss)
Balance March 31, 2019	$	(32,431	)	$	3,797		$	(28,634	)
Other comprehensive income (loss) before reclassifications	1,805			(2,826		)	(1,021		)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges	3,638			(787		)	2,851
Balance June 30, 2019	$	(26,988	)	$	184		$	(26,804	)

	Foreign Currency			Cash flow hedges			Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2018	$	(34,380	)	$	5,749		$	(28,631	)
Other comprehensive income (loss) before reclassifications	3,754			(4,054		)	(300		)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges	3,638			(1,511		)	2,127
Balance June 30, 2019	$	(26,988	)	$	184		$	(26,804	)



	Foreign Currency			Cash flow hedges			Accumulated Other Comprehensive Income (Loss)
Balance March 31, 2018	$	(28,784	)	$	8,083		$	(20,701	)
Other comprehensive income (loss) before reclassifications	(2,002		)	1,412			(590		)
Reclassification out of accumulated other comprehensive income (loss) into interest expense	—			(568		)	(568		)
Balance June 30, 2018	$	(30,786	)	$	8,927		$	(21,859	)

	Foreign Currency			Cash flow hedges			Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2017	$	(25,689	)	$	5,344		$	(20,345	)
Other comprehensive income (loss) before reclassifications	(5,097		)	4,482			(615		)
Reclassification out of accumulated other comprehensive income (loss) into interest expense	—			(899		)	(899		)
Balance June 30, 2018	$	(30,786	)	$	8,927		$	(21,859	)

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 )

16. 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 of		As of
	June 30, 2019		June 30, 2018
Costs relating to construction included in accounts payable and accrued expenses	$	13,822	$	15,187

As of As of
September 30, 2018 September 30, 2017
Costs relating to construction included in accounts payable and accrued expenses $ 14,307
$ 27,090

Interest paid, net of interest capitalized was as follows (in thousands):



	Six months ended June 30,
	2019		2018
Interest paid	$	29,284	$	30,074

Nine months ended September 30,
2018 2017
Interest paid, net of interest capitalized $ 46,154
$ 43,102

Information related to non-cash assets and liabilities recorded as a result of the adoption of Accounting Standards Codification Topic 842 “Leases” (“ASC 842”) as of June 30, 2019 was as follows (in thousands):



	June 30, 2019
Non-Cash operating lease right-of-use assets exchanged for operating lease liabilities	$	87,679
Non-Cash operating lease liabilities exchanged for operating right-of-use assets	92,354

The difference between the recorded operating lease liabilities and operating right-of-use assets represents the accrued straight-line rent liability of $5.0 million and our prepaid rent balances of $307,000 previously recognized under Accounting Standards Codification Topic 840 “Leases” (“ASC 840”) that were reclassified to the operating leases right-of use assets under ASC 842.

17. ~~New Accounting Pronouncements~~Leases

~~Recently~~On January 1, 2019, we adopted ~~accounting standards~~

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 change during the 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.ASC 842, which supersedes ASC 840. We adopted this pronouncement on January 1, 2018, and the pronouncement did not result in changes to our consolidated statements of cash flows as there were no restricted cash amounts included in the beginning-of-period and end-of-period cash and cash equivalents totals.

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 or modified retrospective method and is required to be adopted in conjunction with ASU 2014-09, "Revenue from Contracts with Customers" discussed below. We adopted ASU 2017-05 effective January 1, 2018, along with our adoption of ASU 2014-09,ASC 842 using the modified retrospective approach, ~~only~~whereby there was no cumulative effect adjustments to ~~contracts~~retained earnings on adoption and prior periods were not restated. Accordingly, our leases and lease related costs, as both lessee and lessor, and lease related receivables, as lessor, are presented under ASC 842 as of and for the three and six months ended June 30, 2019 and under ASC 840 as of December 31, 2018 and for the three and six months ended June 30, 2018.

As a lessor, substantially all of our revenues are earned from arrangements that are within the scope of ASC 842. We utilized the practical expedient in ASU 2018-11 to account for lease and non-lease components as a single component which resulted in all of our revenues associated with leases being recorded as rental revenues in the consolidated statements of operations. As a result of the adoption of ASC 842, the amounts disclosed in our 2018 second quarter 10-Q as base rentals, percentage rentals and expense reimbursements have now been combined into rental revenues on the consolidated statements of operations to conform to the current year presentation. In addition, certain amounts previously included in expense reimbursements in our 2018 second quarter 10-Q, which are not ~~completed~~related to leases have been reclassified to management, leasing and other services on the consolidated statements of operations to conform to the current year presentation. See Note 4 for additional details.

ASC 842 requires certain other accounting changes effective January 1, 2019 where prior year amounts are not reclassified or restated. Uncollectible tenant revenues previously recorded in general and administrative expense are recorded in rental revenues as a contra-revenue account in 2019. As a result of combining all components of a lease, all fixed contractual payments, including consideration received from certain executory costs, are now recognized on a straight line basis. For the three and six months ended June 30, 2019, we recorded a straight-line rent adjustment of $1.7 million and $3.2 million, respectively, in rental revenues in our consolidated statements of operations to record revenues from executory costs on a straight-line basis. In addition, direct internal leasing costs are capitalized, however, indirect internal leasing costs previously capitalized are now expensed. We only capitalize the portion of these types of costs incurred that are a direct result of an executed lease. For the three and six months ended June 30, 2019, lease costs of approximately $1.1 million and $2.1 million, respectively, were expensed which would have been capitalized under ASC 840.

As a lessee, the new standard also provides a number of optional provisions, known as practical expedients, which companies may elect to adopt to facilitate implementation. We elected the package of practical expedients which, among other items, precludes us from needing to reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, and (3) initial direct costs for any existing leases.

Information as Lessor Under ASC 842

As of June 30, 2019, we were the lessor to over 2,300 stores in our 32 consolidated outlet centers, under operating leases with initial terms that expire from 2019 to 2032, with certain agreements containing extension options. We also have certain agreements which require tenants to pay their portion of reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.

For the three and six months ended June 30, 2019, the components of rental revenues are as follows (in thousands):



	Three months ended June 30, 2019		Six months ended June 30, 2019
Rental revenues - fixed	$	89,262	$	182,721
Rental revenues - variable ⁽¹⁾	23,123		49,618
Rental revenues	$	112,385	$	232,339


(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.

Future minimum lease receipts under non-cancelable operating leases as of June 30, 2019, excluding the effect of straight-line rent and variable rentals, are as follows (in thousands):



For the remainder of 2019	$	161,791
2020	315,266
2021	278,847
2022	243,310
2023	209,258
2024	173,803
Thereafter	325,913
	$	1,708,188

Information as Lessor Under ASC 840

As of December 31, 2018, we were the lessor to over 2,600 stores in our 36 consolidated outlet centers, under operating leases with initial terms that expire from 2019 to 2033. The majority of our leases contain provisions which provide additional rents based on tenants’ sales volume. Percentage rentals are recognized when specified targets that trigger the contingent rent are met.

Future minimum lease receipts under non-cancelable operating leases as of December 31, 2018, excluding the effect of straight-line rent and variable rentals, are as follows (in thousands):



2019	$	285,343
2020	265,361
2021	229,553
2022	195,808
2023	164,845
Thereafter	364,844
	$	1,505,754

Information as Lessee Under ASC 842

Adoption of the new standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities, of $90.4 million and $95.1 million, respectively, as of January 1, 2019 equal to the present value of the minimum lease payments required under each lease. The difference between the recorded operating lease liability and operating right-of-use assets represents the accrued straight-line rent liability and our prepaid rent balances previously recognized under ASC 840. In March 2019, we sold our Ocean City outlet center, which had an operating lease right-of-use asset and operating lease liability of approximately $2.5 million.

Our non-cancelable operating leases, with terms in excess of one year, have terms, including certain extension options, that expire from 2028 to 2101. Certain extension options, which are reasonably certain at inception, are used in the calculation of our operating lease right-of-use assets based on the economic life of the asset. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The majority of our operating lease expense is related to ground leases at the following outlet centers: Myrtle Beach Hwy 17, Atlantic City, Sevierville, Riverhead, Foxwoods and Rehoboth Beach and the lease of our corporate office in Greensboro, North Carolina.

For the three and six months ended June 30, 2019, the components of lease costs are as follows (in thousands):



	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease costs	$	1,372	$	2,776
Short-term lease costs	571		1,163
Variable lease costs ⁽¹⁾	53		131
Total lease costs	$	1,996	$	4,070


(1)	Our variable lease costs relate to our ground leases where increases in payments are based on center financial performance.

The discount rate applied to measure each operating lease right-of-use asset and operating lease liability is based on our incremental borrowing rate (“IBR”). We consider the general economic environment and our credit rating and factor in various financing and asset specific adjustments to ensure the IBR is appropriate based on the intended use of the underlying lease. The lease term and discount rates are as follows:



	June 30, 2019
Weighted - average remaining lease term (years)	50
Weighted - average discount rate	5.0	%

Cash flow information related to leases for the six months ended June 30, 2019 (in thousands):



	June 30, 2019
Operating cash outflows related to operating leases	$	2,788

Maturities of lease liabilities as of June 30, 2019 for the next five years and thereafter are as follows (in thousands):



For the remainder of 2019	$	2,782
2020	5,568
2021	5,613
2022	5,669
2023	5,709
2024	5,765
Thereafter	226,837
Total lease payments	$	257,943
Less imputed interest	165,851
Present value of lease liabilities	$	92,092

Information as Lessee Under ASC 840

As of December 31, 2018, our non-cancelable operating leases have terms, including certain extension options, that expire from 2019 to 2101. Rental payments for these leases totaled approximately $1.8 million and $3.6 million, respectively for the three and six months ended June 30, 2018. As of December 31, 2018, the majority of our rental payments are related to ground leases at the following outlet centers: Myrtle Beach Hwy 17, Atlantic City, Ocean City, Sevierville, Riverhead, Foxwoods and Rehoboth Beach and the lease of our corporate office in Greensboro, North Carolina. The contingent portion of our ground lease payments is based on center performance and/or changes in an index.

For operating leases as of December 31, 2018, minimum lease payments for the next five years and thereafter are as follows (in thousands):



2019	$	7,526
2020	7,311
2021	7,140
2022	7,127
2023	7,167
Thereafter	258,438
Total minimum payment	$	294,709

18. New Accounting Pronouncements

Recently adopted accounting standards (other than ASC 842 Leases)

In October 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-16, Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes to Accounting Standards Codification 815. ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. The mandatory effective date for calendar year-end public companies was January 1, 2019. The adoption of ~~this standard~~ASU 2018-16 as of January 1, 2019 did not have a material impact on our consolidated financial statements. 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 gain or loss as if we sold 100% of the nonfinancial asset and we will also measure our retained interest at fair value.

In ~~May 2014,~~June 2018, the FASB issued ASU ~~2014-09, Revenue from Contracts with Customers: Topic 606, as amended, (collectively, Topic 606). Topic 606 is based on~~2018-07, Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 amends prior employee share-based payment guidance to include nonemployee share-based payment transactions for acquiring services or property. This ASU now aligns the ~~principle that revenue is recognized to depict the transfer~~determination 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. Topic 606 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 date, the accounting for performance conditions, and ~~recognition~~the accounting for share-based payments after vesting in addition to other items. The provisions of ~~gains and losses on the sale~~ASU 2018-07 were effective for us as of ~~certain nonfinancial assets, such as property, including real estate.~~

~~We adopted Topic 606 effective~~ January 1, ~~2018~~2019 using ~~the~~a modified ~~retrospective approach. Results for reporting periods beginning after~~transition method upon adoption, and early adoption was permitted. The adoption of ASU 2018-07 as of January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Revenue Recognition (Topic 605). The new guidance provides a unified model to determine how revenue is recognized. To determine the proper amount of revenue to be recognized, the Company performs the following steps: (i) identify the contract with the customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) a performance obligation is satisfied. As of September 30, 2018, the Company has no outstanding contract assets or contract liabilities and we2019 did not have a ~~cumulative catch-up upon the adoption of this standard. The adoption of this standard did not result in any~~ material ~~changes to our revenue recognition as compared to the previous guidance.~~

The Company’s revenue-producing contracts are primarily leases that are not within the scope of this standard, except for the lease component relating to common area maintenance (“CAM”) reimbursement revenue, which will be within the scope of this standard upon the effective date of ASU 2016-02, Leases (Topic 842). The revenues which were impacted by the initial adoption of Topic 606 include revenues from management, leasing and other services provided to our unconsolidated joint ventures that we manage and other income earned at our properties. We receive management, leasing and other services revenue for services provided to our unconsolidated joint ventures that we manage and recognize this revenue as the services are transferred. Our other income earned at our properties consist primarily of revenues from vending and other on-site services or products provided to shoppers or tenants. The other income earned at our properties is recorded as the goods are transferred at a point in time or as the service is transferred over time. We have elected to disaggregate our revenue streams into the following line itemsimpact on our Consolidated Statements of Operations: base rentals; percentage rentals; expense reimbursements; management, leasing and other services; and other income. We believe that these are the proper disaggregated categories as they are the best depiction of our revenue streams both qualitatively and quantitatively.consolidated financial statements.

~~Recently issued accounting standards to be adopted~~

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance ~~will make~~made more financial and nonfinancial hedging strategies eligible for hedge accounting. It also ~~amends~~amended the presentation and disclosure requirements and ~~changes~~changed how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application 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 is~~adoption of ASU 2017-12 as of January 1, ~~2019. We are currently evaluating the impact of adopting the new guidance, but we do~~2019 did not ~~expect the adoption to~~ have a material impact on our consolidated financial statements.

Recently issued accounting standards to be adopted

In ~~February~~August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 is intended to improve the effectiveness of disclosures required by entities regarding recurring and nonrecurring fair value measurements. ASU 2018-13 is effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The adoption of ASU 2018-13 will not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU ~~2016-02, Leases (Topic 842), issued subsequent amendments~~No. 2016-13 to amend the ~~initial~~accounting for credit losses for certain financial instruments. Under the new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in ~~September 2017~~more timely recognition of such losses. In November 2018, the FASB released ASU No. 2018-19 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 “Financial Instruments - Credit Losses.” Instead, impairment of receivables arising from operating leases should be accounted for under Subtopic 842-30 “Leases - Lessor.” ASU ~~2017-13 and January 2018~~2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within ASU 2018-01 (collectively, Topic 842). Topic 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. Topic 842 will be effective beginning in the first quarter of 2019.those fiscal years. Early adoption ~~of Topic 842 as of its issuance~~ is ~~permitted. We will adopt Topic 842 effective January 1, 2019.~~permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 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 at seven of our outlet centers, 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. Information about our undiscounted future lease payments and the timing of those payments is in Note 23, Commitments and Contingencies of Consolidated Properties, in our Form 10-K for the year ended December 31, 2017.

In addition, direct internal leasing costs will continue to be capitalized, however, indirect internal leasing costs previously capitalized will be expensed. For the nine months ended September 30, 2018 and for the year ended December 31, 2017, based on existing accounting guidance, we capitalized approximately $4.3 million and $6.1 million, respectively, of internal leasing and legal payroll and related costs. Upon adoption of this ~~ASU in 2019, we~~new guidance will ~~only be able to capitalize the portion of these types of costs incurred that are~~not have a ~~direct result of an executed lease.~~

Within the terms of our leases where we are the lessor, we are entitled to receive reimbursement amounts from tenants for operating expenses such as real estate taxes, insurance and other CAM. Upon adoption of this ASU, CAM reimbursement revenue will be accounted for in accordance with ASU 2016-12 Revenue from Contracts with Customers (Topic 606). We are continuing our evaluation of the effect that this adoption will have on our CAM reimbursement revenue; however, we currently do not believe that the adoption will significantly affect the timing of our revenue recognition. We are continuing our evaluation of Topic 842, which may identify additional impacts this standard will havematerial impact on our consolidated financial ~~statements and related disclosures.~~statements.

~~18.~~

19. Subsequent Events

In ~~October 2018,~~July 2019, the Company's Board of Directors declared a ~~$0.35~~$0.355 cash dividend per common share payable on ~~November~~August 15, ~~2018~~2019 to each shareholder of record on ~~October~~July 31, ~~2018,~~2019, and the Trustees of Tanger GP Trust declared a ~~$0.35~~$0.355 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

In October 2018, we amended and restated our unsecured term loan, increasing the size of the loan from $325.0 million to $350.0 million, extending maturity from April 2021 to April 2024, and reducing the interest rate spread over LIBOR from 0.95% to 0.90%. The $25.0 million of proceeds were used to pay down the balances outstanding under our unsecured lines of credit.

Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 with the three and ~~nine~~six months ended~~September~~June 30, ~~2017.~~2018. 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 below are 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. 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"~~“believe”, ~~"expect"~~“expect”, ~~"intend"~~“intend”, ~~"anticipate"~~“anticipate”, ~~"estimate"~~“estimate”, ~~"project"~~“project”, or similar expressions. Such forward-looking statements include, but are not limited to, statements regarding our: ability to raise additional capital, including via future issuances of equity and debt, and the use of proceeds from such issuances; results of operations and financial condition; capital expenditure and working capital needs and the funding thereof; repurchase of the ~~Company's~~Company’s shares; potential developments, expansions, renovations, acquisitions or dispositions of outlet centers; compliance with debt covenants; renewal and re-lease of leased space; 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 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; risk associated with a possible terrorist activity or other acts or threats of violence and threats to public safety; 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 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 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"~~“Risk Factors” in the ~~Company's~~Company’s and the Operating ~~Partnership's~~Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

General Overview

As of ~~September~~June 30, ~~2018,~~2019, we had 3632 consolidated outlet centers in 2219 states totaling ~~12.9~~12.0 million square feet. We also had 87 unconsolidated outlet centers in 6 states or provinces totaling ~~2.4~~2.2 million square feet. During the three months ended March 31, 2019, we closed on the sale of four non-core consolidated outlet centers for total gross proceeds of $130.5 million, and total net proceeds of approximately $128.2 million. The four properties were located in Nags Head, North Carolina; Ocean City, Maryland; Park City, Utah; and Williamsburg, Iowa and represented 6.8% of the Company’s consolidated portfolio square footage. During the three months ended June 30, 2019, the RioCan joint venture closed on the sale of its outlet center in Bromont, Quebec for net proceeds of approximately $6.4 million. Our share of the proceeds was approximately $3.2 million.

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, ~~2017~~2018 to ~~September~~June 30, ~~2018~~2019 (square feet in thousands):

Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers
Outlet Center Quarter Opened/Disposed Square Feet Number of Outlet Centers Square Feet Number of Outlet Centers
As of January 1, 2017 12,710
36
2,348
8
New Developments:
Fort Worth Fourth Quarter 352
1
—
—
Expansion:
Ottawa First & Second Quarter —
—
39
—
Lancaster Third Quarter 148
—
—
—
Dispositions:
Westbrook Second Quarter (290 ) (1 ) —
—
Other 10
—
(17 ) —
As of December 31, 2017 12,930
36
2,370
8
Other (7 ) —
—
—
As of September 30, 2018 12,923
36
2,370
8



		Consolidated Outlet Centers				Unconsolidated Joint Venture Outlet Centers
Outlet Center	Quarter Opened/Disposed	Square Feet		Number of Outlet Centers		Square Feet		Number of Outlet Centers
As of January 1, 2018		12,930		36		2,370		8
Other		(7	)	—		1		—
As of December 31, 2018		12,923		36		2,371		8
Dispositions:
Nags Head	First Quarter	(82	)	(1	)	—		—
Ocean City	First Quarter	(200	)	(1	)	—		—
Park City	First Quarter	(320	)	(1	)	—		—
Williamsburg	First Quarter	(276	)	(1	)	—		—
Bromont	Second Quarter	—		—		(161	)	(1	)
Other		2		—		—		—
As of June 30, 2019		12,047		32		2,210		7

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of ~~September~~June 30, ~~2018.~~2019. Except as noted, all properties are fee owned.


Consolidated Outlet Centers	Legal	Square	%		Legal	Square	%
Location	Ownership %	Feet	Occupied		Ownership %	Feet	Occupied
Deer Park, New York	100	739,109	97		100	739,109	97
Riverhead, New York ⁽¹⁾	100	729,778	95		100	729,778	96
Rehoboth Beach, Delaware ⁽¹⁾	100	557,353	97		100	557,353	98
Foley, Alabama	100	556,673	94		100	554,583	92
Atlantic City, New Jersey ^{(1) (4)(3)}	100	489,706	86		100	489,706	78
San Marcos, Texas	100	471,816	97		100	471,816	92
Sevierville, Tennessee ⁽¹⁾	100	448,150	100		100	447,815	99
Savannah, Georgia	100	429,089	97		100	429,089	97
Myrtle Beach Hwy 501, South Carolina	100	426,523	99		100	426,523	99
Jeffersonville, Ohio	100	411,859	97		100	411,867	94
Glendale, Arizona (Westgate)	100	410,734	99		100	410,734	95
Myrtle Beach Hwy 17, South Carolina ⁽¹⁾	100	403,425	99		100	403,425	100
Charleston, South Carolina	100	382,180	98		100	382,180	99
Lancaster, Pennsylvania	100	376,997	92		100	376,997	95
Pittsburgh, Pennsylvania	100	372,944	99		100	372,856	98
Commerce, Georgia	100	371,408	99		100	371,408	99
Grand Rapids, Michigan	100	357,105	95		100	357,103	96
Fort Worth, Texas	100	351,741	98		100	351,741	96
Daytona Beach, Florida	100	351,721	100		100	351,721	99
Branson, Missouri	100	329,861	100		100	329,861	100
Southaven, Mississippi ^{(2) (3)}					50	324,716	97
Locust Grove, Georgia	100	321,082	99		100	321,082	97
Gonzales, Louisiana	100	321,066	96		100	321,066	94
Southaven, Mississippi ^{(2) (4)}	50	320,348	93
Park City, Utah	100	319,661	98
Mebane, North Carolina	100	318,886	99		100	318,886	100
Howell, Michigan	100	314,438	95		100	314,438	92
Mashantucket, Connecticut (Foxwoods) ⁽¹⁾	100	311,593	95		100	311,529	94
Williamsburg, Iowa	100	276,331	93
Tilton, New Hampshire	100	250,107	94		100	250,107	95
Hershey, Pennsylvania	100	249,696	99		100	249,696	100
Hilton Head II, South Carolina	100	206,564	92		100	206,564	97
Ocean City, Maryland ⁽¹⁾	100	199,425	96
Hilton Head I, South Carolina	100	181,670	97		100	181,670	100
Terrell, Texas	100	177,800	95		100	177,800	97
Blowing Rock, North Carolina	100	104,009	96		100	104,009	95
Nags Head, North Carolina	100	82,161	98
Totals		12,923,009	96	⁽³⁾		12,047,228	96


(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~~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 Fort Worth center which opened during the fourth quarter of 2017 and has not yet stabilized.~~


~~(4)~~	Property encumbered by mortgage. See ~~notes~~Notes 5 and 6 to the consolidated financial statements for further details of our debt obligations.


Unconsolidated joint venture properties	Legal	Square	%	Legal	Square	%
Location	Ownership %	Feet	Occupied	Ownership %	Feet	Occupied
Charlotte, North Carolina ⁽¹⁾	50	397,857	99	50	398,697	98
Columbus, Ohio ⁽¹⁾	50	355,245	96	50	355,245	94
Ottawa, Ontario	50	355,003	94	50	355,013	95
Texas City, Texas (Galveston/Houston) ⁽¹⁾	50	352,705	95	50	352,705	97
National Harbor, Maryland ⁽¹⁾	50	341,156	95	50	341,156	96
Cookstown, Ontario	50	307,779	100	50	307,779	97
Bromont, Quebec	50	161,307	80
Saint-Sauveur, Quebec ⁽¹⁾	50	99,405	96	50	99,405	94
Total		2,370,457	95		2,210,000	96


(1)	Property encumbered by mortgage. See ~~note~~Note 4 to the consolidated financial statements for further details of the joint venture debt obligations.

Leasing Activity

The tables below show changes in rent (base rent and common area maintenance ~~("CAM"~~(“CAM”)) for leases for new stores that opened or renewals that started during the respective trailing twelve month periods ended ~~September~~June 30, ~~2018~~2019 and ~~2017:~~2018:



	Trailing twelve months ended June 30, 2019^(1),(2)
	# of Leases	Square Feet (in 000’s)	Average Annual Straight-line Rent (psf)		Average Tenant Allowance (psf)		Average Initial Term (in years)	Net Average Annual Straight-line Rent (psf) ⁽³⁾
Re-tenant	83	420	$	33.93	$	43.37	8.65	$	28.92
Renewal	255	1,200	$	34.58	$	0.58	3.78	$	34.43

	Trailing twelve months ended June 30, 2018⁽¹⁾
	# of Leases	Square Feet (in 000’s)	Average Annual Straight-line Rent (psf)		Average Tenant Allowance (psf)		Average Initial Term (in years)	Net Average Annual Straight-line Rent (psf) ⁽³⁾
Re-tenant	103	457	$	33.54	$	69.41	7.75	$	24.58
Renewal	261	1,349	$	29.92	$	0.11	3.63	$	29.89

Trailing twelve months ended September 30, 2018⁽¹⁾
# of Leases
Square Feet
(in 000's)
Average
Annual
Straight-line Rent (psf)
Average
Tenant
Allowance (psf)
Average Initial Term
(in years)
Net Average
Annual
Straight-line Rent (psf) ⁽²⁾
Re-tenant 99
478
$ 32.92
$ 63.74
7.86
$ 24.81
Renewal 265
1,343
$ 29.79
$ 0.26
3.79
$ 29.72

Trailing twelve months ended September 30, 2017⁽¹⁾
# of Leases
Square Feet
(in 000's)
Average
Annual
Straight-line Rent (psf)
Average
Tenant
Allowance (psf)
Average Initial Term
(in years)
Net Average
Annual
Straight-line Rent (psf) ⁽²⁾
Re-tenant 87
380
$ 34.76
$ 55.47
8.94
$ 28.56
Renewal 253
1,126
$ 32.56
$ 0.24
4.50
$ 32.51


(1)	Excludes license agreements, seasonal tenants, and month-to-month leases.


(2)	Excludes outlet centers sold in March 2019 (Nags Head, Ocean City, Park City, and Williamsburg Outlets Centers).

(3)

Net average straight-line base 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 base rent per year amount. The average annual straight-line base 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 ~~September~~June 30, ~~2018~~2019 to the three months ended ~~September~~June 30, ~~2017~~2018

NET ~~LOSS~~INCOME

Net ~~loss~~income in the ~~2018~~2019 period was ~~$23.0~~$14.5 million as compared to a net ~~loss~~income of ~~$16.0~~$24.3 million for the ~~2017~~2018 period. The ~~2018 period included~~decrease in net income is due to the sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers in March 2019, a ~~$49.7~~$4.4 million ~~impairment~~ charge related to ~~our Jeffersonville outlet center. The 2017 period included~~the accelerated recognition of compensation cost entitled to be received by the Company’s President and Chief Operating Officer per the terms of a ~~loss on the early extinguishment of debt of $35.6~~transition agreement executed in connection with his planned retirement, and a $3.6 million ~~and equity in earnings (losses) includes our share of impairment charges totaling $9.0 million~~charge related to the foreign currency effect of the sale of the Bromont ~~and Saint-Sauveur outlet centers in Canada.~~property by the RioCan Canada joint venture.

In the tables below, information set forth for ~~new developments~~properties disposed includes the Nags Head, Ocean City, Park City and ~~expansions represent our Fort Worth~~Williamsburg outlet ~~center, which opened in October 2017 and our Lancaster outlet center, which had an expansion and opened in September 2017. Properties disposed include our Westbrook outlet center~~centers sold in ~~May 2017.~~late March 2019.

~~BASE RENTALS~~RENTAL REVENUES

~~Base rentals increased $2.0~~Rental revenues decreased $4.1 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of ~~base rentals~~rental revenues (in thousands):


	2018			2017			Increase/(Decrease)			2019			2018			Increase/(Decrease)
Base rentals from existing properties	$	77,218		$	77,121		$	97
Base rentals from new development and expansion	4,199			1,912			2,287
Rental revenues from existing properties										$	109,360		$	109,437		$	(77	)
Rental revenues from properties disposed										20			6,297			(6,277		)
Straight-line rent adjustments	1,451			1,456			(5		)	2,916			1,346			1,570
Lease termination fees	70			162			(92		)	269			13			256
Amortization of above and below market rent adjustments, net	(615		)	(302		)	(313		)	(180		)	(575		)	395
	$	82,323		$	80,349		$	1,974		$	112,385		$	116,518		$	(4,133	)

~~PERCENTAGE RENTALS~~

~~Percentage rentals increased $72,000 in the 2018 period compared~~As a result of combining all components of a lease due to the ~~2017 period. The following table sets forth the changes in various components~~adoption of ~~percentage rentals (in thousands):~~

2018 2017 Increase/(Decrease)
Percentage rentals from existing properties $ 3,055
$ 3,138
$ (83 )
Percentage rentals from new development and expansion 155
—
155
$ 3,210
$ 3,138
$ 72

~~Percentage rentals represents revenues based~~Accounting Standards Codification Topic 842 “Leases” (“ASC 842”), all fixed contractual payments, including consideration received from certain executory costs, are now recognized on a ~~percentage of tenants' sales volume above certain predetermined levels ("contractual breakpoints").~~

~~EXPENSE REIMBURSEMENTS~~

~~Expense reimbursements increased $1.3~~straight line basis. For the three months ended June 30, 2019, we recorded $1.7 million in ~~the 2018 period compared~~rental revenues in our consolidated statements of operations to ~~the 2017 period. The following table sets forth the changes in various components of expense reimbursements (in thousands):~~record executory costs on a straight-line basis.

2018 2017 Increase/(Decrease)
Expense reimbursements from existing properties $ 33,543
$ 33,223
$ 320
Expense reimbursements from new development and expansion 1,925
957
968
$ 35,468
$ 34,180
$ 1,288

Expense reimbursements represent the contractual recovery from tenants of certain 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, are contractually fixed and may escalate each year. See "Property Operating Expenses" below for a discussion of the decrease in operating expenses from our existing properties.

~~OTHER INCOME~~

~~Other income increased $142,000 in the 2018 period as compared to the 2017 period. The following table sets forth the changes in various components of other income (in thousands):~~

2018 2017 Increase/(Decrease)
Other income from existing properties $ 2,565
$ 2,455
$ 110
Other income from new development and expansion 87
55
32
$ 2,652
$ 2,510
$ 142

PROPERTY OPERATING EXPENSES

Property operating expenses ~~increased $2.1~~decreased $1.2 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of property operating expenses (in thousands):


	2018		2017		Increase/(Decrease)		2019		2018		Increase/(Decrease)
Property operating expenses from existing properties	$	36,470	$	36,226	$	244	$	35,382	$	35,069	$	313
Property operating expenses from new development and expansion	1,813		1,002		811
Properties operating expenses from properties disposed							5		1,834		(1,829		)
Other property operating expenses	1,370		343		1,027		1,339		1,043		296
	$	39,653	$	37,571	$	2,082	$	36,726	$	37,946	$	(1,220	)

Property operating expense from existing properties increased primarily due to higher property tax expense at a few select outlet centers. Other property operating expenses increased primarily due to expenses related to due diligence for potential new developments.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses ~~decreased $182,000~~increased $5.5 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period, primarily ~~due to lower payroll related expenses and lower expenses~~as a result of a $4.4 million charge related to the ~~allowance for doubtful accounts receivable.~~

~~IMPAIRMENT CHARGE~~

~~During~~accelerated recognition of compensation cost entitled to be received by the ~~third quarter 2018, we determined that~~Company’s President and Chief Operating Officer per the ~~estimated future undiscounted cash flows~~terms of ~~our Jeffersonville outlet center did not exceed the property's carrying value~~a transition agreement executed in connection with his planned retirement. In addition, general and administrative expenses increased by approximately $1.1 million due to ~~a decline of operating results at~~ the center likely resulting from increased competition from the Company's center in Columbus, OH and slower than expected improvement from remerchandising activities. Therefore, we recorded a $49.7 million non-cash impairment charge in our consolidated statement of operations which equaled the excessadoption of the ~~property's carrying value over its estimated fair value.~~lease accounting standard ASC 842 in 2019 which requires indirect internal leasing and legal costs to be expensed as incurred. In the 2018 period, a portion of these indirect costs were capitalized.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization costs ~~increased $1.9~~decreased $1.5 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of depreciation and amortization costs from the ~~2017~~2018 period to the ~~2018~~2019 period (in thousands):


	2018		2017		Increase/(Decrease)		2019		2018		Increase/(Decrease)
Depreciation and amortization from existing properties	$	30,752	$	30,547	$	205	$	31,146	$	31,339	$	(193	)
Depreciation and amortization from new development and expansion	2,098		429		1,669
Depreciation and amortization from properties disposed							—		1,355		(1,355		)
	$	32,850	$	30,976	$	1,874	$	31,146	$	32,694	$	(1,548	)

INTEREST EXPENSE ~~AND LOSS ON EARLY EXTINGUISHMENT OF DEBT~~

Interest expense decreased ~~$122,000~~$1.0 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period primarily ~~as a result~~from the use of the July 2017 bond refinancing where incremental interest incurred during the redemption notice period when both the 2020 Notes and the 2027 Notes were outstanding. This decrease was partially offset by higher debt levels and higher LIBOR interest rate levels on our outstanding variable rate debt. The approximate average 30 day LIBOR rate for the 2018 period was 2.10% compared to 1.23% for the 2017 period. In addition, the 2018 period had significantly less capitalized interest due to less construction activity compared to the 2017 period.

OTHER INCOME (EXPENSE)

In May 2019, the RioCan joint venture closed on the sale of ~~our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0~~its outlet center in Bromont for net proceeds of approximately $6.4 million. Our share of the proceeds was approximately $3.2 million. As a result of this transaction, we recorded a foreign currency loss of approximately $3.6 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par plus a make-whole premium of approximately $34.1 million. The loss on early extinguishment of debt includes the make-whole premium and approximately $1.5 million of costs written off related to a debt discount and the remaining net book value of deferred 2020 Notes origination costs.other income (expense), which had been previously recorded in other comprehensive income.

EQUITY IN EARNINGS ~~(LOSSES)~~ OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsolidated joint ventures ~~increased~~decreased approximately ~~$7.7 million~~$560,000 in the ~~2018~~2019 period compared to the ~~2017~~2018 period. ~~Equity~~In the table below, information set forth for properties disposed includes the RioCan joint venture’s Bromont outlet center, which was sold in ~~earnings (losses) 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.~~ May 2019.



	2019		2018		Increase/(Decrease)
Equity in earnings from existing properties	$	1,639	$	2,164	$	(525	)
Equity in earnings from property disposed	7		42		(35		)
	$	1,646	$	2,206	$	(560	)

The ~~increase~~decrease in equity in earnings of ~~unconolidated~~unconsolidated joint ventures from existing properties was ~~partially offset by~~primarily due to higher LIBOR interest rate levels on variable rate mortgages at our unconsolidated joint ventures. The approximate average 30 day LIBOR rate for the ~~2018~~2019 period was ~~2.10%~~approximately 2.4% compared to ~~1.23%~~approximately 2.0% for the ~~2017~~2018 period.

In addition, interest rates on the outstanding mortgages at both our Charlotte and National Harbor joint ventures were converted from variable to fixed due to debt refinancings in 2018. In June 2018, the Charlotte joint venture closed on a $100.0 million mortgage loan with a fixed interest rate of approximately 4.3% and a maturity date of July 2028. This loan replaced the $90.0 million mortgage loan with an interest rate of LIBOR + 1.45%. In December 2018, the National Harbor joint venture closed on a $95.0 million mortgage loan with a fixed interest rate of approximately 4.6% and a maturity date of January 2030. This loan replaced the $87.0 million construction loan with an interest rate of LIBOR + 1.65%.

Comparison of the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 to the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018

NET INCOME

Net income ~~decreased $13.5~~increased $32.3 million in the ~~2018~~2019 period to ~~$24.9~~$80.3 million as compared to ~~$38.4~~$48.0 million for the ~~2017~~2018 period. The ~~2018 period included~~increase in net income is primarily due to the $43.4 million gain recorded on the sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers in March 2019. The gain was partially offset by a ~~$49.7~~decrease in net income due to the sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers in March 2019, a $4.4 million ~~impairment~~ charge related to ~~our Jeffersonville outlet center. The 2017 period included~~the accelerated recognition of compensation cost entitled to be received by the Company’s President and Chief Operating Officer per the terms of a ~~loss on the early extinguishment of debt of $35.6~~transition agreement executed in connection with his planned retirement, and a $3.6 million ~~and equity in earnings (losses) includes our share of impairment charges totaling $9.0 million~~charge related to the foreign currency effect of the sale of the Bromont ~~and Saint-Sauveur outlet centers in Canada.~~property by the RioCan Canada joint venture.

RENTAL REVENUES

~~BASE RENTALS~~

~~Base rentals increased $3.3~~Rental revenues decreased $4.8 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of ~~base rentals~~rental revenues (in thousands):


	2018			2017			Increase/(Decrease)			2019			2018			Increase/(Decrease)
Base rentals from existing properties	$	228,130		$	228,810		$	(680	)
Base rentals from new development and expansion	12,412			5,282			7,130
Base rentals from property disposed	—			1,596			(1,596		)
Rental revenues from existing properties										$	220,182		$	221,001		$	(819	)
Rental revenues from properties disposed										6,422			12,838			(6,416		)
Straight-line rent adjustments	4,744			4,749			(5		)	4,886			3,294			1,592
Lease termination fees	1,134			2,796			(1,662		)	1,399			1,064			335
Amortization of above and below market rent adjustments, net	(1,639		)	(1,766		)	127			(550		)	(1,023		)	473
	$	244,781		$	241,467		$	3,314		$	232,339		$	237,174		$	(4,835	)

~~Base rentals~~Rental revenues from existing properties decreased primarily due to ~~a slight decrease in~~lower average ~~portfolio~~ occupancy and ~~lease~~rent modifications for certain ~~tenants. The decrease~~tenants, in large part as a result of a number of bankruptcy filings and other tenant closures during 2018 and 2019.

As a result of combining all components of a lease ~~termination fees is~~ due to ~~fewer store closings prior to natural expiration~~the adoption of the ~~lease.~~

~~PERCENTAGE RENTALS~~

~~Percentage rentals decreased $132,000 in the 2018 period compared to the 2017 period. The following table sets forth the changes in various components of percentage rentals (in thousands):~~

2018 2017 Increase/(Decrease)
Percentage rentals from existing properties $ 6,386
$ 6,731
$ (345 )
Percentage rentals from new development and expansion 280
2
278
Percentage rentals from property disposed —
65
(65 )
$ 6,666
$ 6,798
$ (132 )

~~Percentage rentals represents revenues based~~lease accounting standard ASC 842, all fixed contractual payments, including consideration received from certain executory costs, are now recognized on a percentage of tenants' sales volume above their contractual breakpoints. The decrease in percentage rentals is primarily due to annual increases in contractual breakpoints in certain leases without corresponding increases in sales volume.

~~EXPENSE REIMBURSEMENTS~~

~~Expense reimbursements increased $3.1~~straight line basis. For the six months ended June 30, 2019, we recorded $3.2 million in rental revenues in our consolidated statements of operations to record executory costs on a straight-line basis. These incremental straight-line rent adjustments were primarily offset by the ~~2018 period compared to the 2017 period. The following table sets forth the changes in various components~~write-off of ~~expense reimbursements (in thousands):~~

2018 2017 Increase/(Decrease)
Expense reimbursements from existing properties $ 101,546
$ 101,773
$ (227 )
Expense reimbursements from new development and expansions 6,330
2,276
4,054
Expense reimbursements from properties disposed —
752
(752 )
$ 107,876
$ 104,801
$ 3,075

~~OTHER INCOME~~

~~Other income decreased 572,000 in the 2018 period as compared to the 2017 period. The following table sets forth the changes in various components of other income (in thousands):~~

2018 2017 Increase/(Decrease)
Other income from existing properties $ 6,115
$ 6,724
$ (609 )
Other income from new development and expansions 218
126
92
Other income from property disposed —
55
(55 )
$ 6,333
$ 6,905
$ (572 )

~~The decrease in other income from existing properties was primarily~~straight-line rents related to ~~the expiration in July 2017 of a~~ certain ~~national sponsorship program that was not renewed.~~bankrupt tenants.

PROPERTY OPERATING EXPENSES

Property operating expenses ~~increased $4.7~~decreased $1.1 million in the ~~2018~~2019 period as compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of property operating expenses (in thousands):


	2018		2017		Increase/(Decrease)			2019		2018		Increase/(Decrease)
Property operating expenses from existing properties	$	109,742	$	109,382	$	360		$	73,863	$	73,685	$	178
Property operating expenses from new development and expansion	6,308		2,298		4,010
Property operating expenses from property disposed	—		1,061		(1,061		)	2,598		4,082		(1,484		)
Other property operating expense	3,767		2,333		1,434			2,642		2,397		245
	$	119,817	$	115,074	$	4,743		$	79,103	$	80,164	$	(1,061	)

Property operating expense from existing properties increased primarily due to higher snow removal costs partially offset by lower marketing expense in the 2018 period compared to the 2017 period. Other property operating expenses increased primarily due to expenses related to due diligence for potential new developments.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses ~~decreased $985,000~~increased $6.5 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period, primarily ~~due to lower payroll related expenses and lower expenses~~as a result of a $4.4 million charge related to the ~~allowance for doubtful accounts receivable.~~

~~ABANDONED PRE-DEVELOPMENT COSTS~~

~~During~~accelerated recognition of compensation cost entitled to be received by the ~~2017 period, we decided to terminate~~Company’s President and Chief Operating Officer per the terms of a ~~purchase option for a pre-development stage project near Detroit, Michigan~~transition agreement executed in connection with his planned retirement. In addition, general and ~~as a result, recorded a $528,000 charge, representing the cumulative related pre-development costs.~~

~~IMPAIRMENT CHARGE~~

~~During the third quarter 2018, we determined that the estimated future undiscounted cash flows of our Jeffersonville outlet center did not exceed the property's carrying value~~administrative expenses increased by approximately $2.1 million due to ~~a decline of operating results at~~ the center likely resulting from increased competition from the Company's center in Columbus, OH and slower than expected improvement from remerchandising activities. Therefore, we recorded a $49.7 million non-cash impairment charge in our consolidated statement of operations which equaled the excessadoption of the ~~property's carrying value over its estimated fair value.~~lease accounting standard ASC 842 in 2019 which requires indirect internal leasing and legal costs to be expensed as incurred. In the 2018 period, a portion of these indirect costs were capitalized.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization costs ~~increased $3.5~~decreased $2.9 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. The following table sets forth the changes in various components of depreciation and amortization costs from the ~~2018~~2019 period to the ~~2017~~2018 period (in thousands):


	2018		2017		Increase/(Decrease)			2019		2018		Increase/(Decrease)
Depreciation and amortization expenses from existing properties	$	92,387	$	93,472	$	(1,085	)	$	61,650	$	63,126	$	(1,476	)
Depreciation and amortization expenses from new development and expansion	6,280		1,026		5,254
Depreciation and amortization from property disposed	—		677		(677		)	1,256		2,691		(1,435		)
	$	98,667	$	95,175	$	3,492		$	62,906	$	65,817	$	(2,911	)

Depreciation and amortization decreased at our existing properties primarily due to the ~~accelerated amortization of lease related intangibles upon store closures and also~~lower basis in our Jeffersonville property due to ~~demolition activities at one of our centers~~the impairment recorded in the ~~2017 period.~~third quarter of 2018.

INTEREST EXPENSE ~~AND LOSS ON EARLY EXTINGUISHMENT OF DEBT~~

Interest expense decreased ~~$1.1 million~~$540,000 in the ~~2018~~2019 period compared to the ~~2017~~2018 period primarily ~~as a result~~from the use of the July 2017 bond refinancing, which effectively lowered the interest rate from 6.125% to 3.875% on $300.0 million of senior notes. This savings was partially offset by higher debt levels and higher LIBOR interest rate levels on our outstanding variable rate debt. The approximate average 30 day LIBOR rate for the 2018 period was 1.91% compared to 1.04% for the 2017 period.

~~In July 2017, we completed an underwritten public offering of $300.0 million of 3.875% senior notes due 2027 (the "2027 Notes"). In August 2017, we used~~ the net proceeds from the sale of four properties in March 2019 to reduce amounts outstanding on our unsecured lines of credit. The decrease was partially offset by higher interest rates related to $150.0 million of interest rate swap agreements. In August 2018, certain 30-day LIBOR interest rate swaps with a rate of 1.3% expired and were replaced with new interest rate swaps with a rate of 2.2%. In addition, the ~~2027 Notes, together with borrowings under~~average 30-day LIBOR interest rate for our unsecured lines of credit was approximately 2.5% in the 2019 period compared 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. The loss on early extinguishment of debt includes~~1.8% for the ~~make-whole premium and approximately $1.5 million of costs written off related to a debt discount and the remaining net book value of deferred 2020 Notes origination costs.~~2018 period.

GAIN ON SALE OF ASSETS

In ~~May 2017,~~March 2019, we sold our ~~Westbrook~~Nags Head, Ocean City, Park City and Williamsburg outlet ~~center~~centers for net proceeds of approximately ~~$40.0~~$128.2 million, which resulted in a gain on sale of ~~$6.9~~assets of $43.4 million. The proceeds from the sale of these unencumbered assets were used to pay down balances outstanding under our unsecured lines of credit.

OTHER INCOME (EXPENSE)

In May 2019, the RioCan joint venture closed on the sale of its outlet center in Bromont for net proceeds of approximately $6.4 million. Our share of the proceeds was approximately $3.2 million. As a result of this transaction, we recorded a foreign currency loss of approximately $3.6 million in other income (expense), which had been previously recorded in other comprehensive income.

EQUITY IN EARNINGS ~~(LOSSES)~~ OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsolidated joint ventures ~~increased~~decreased approximately ~~$7.4~~$1.1 million in the ~~2018~~2019 period compared to the ~~2017~~2018 period. ~~Equity~~In the table below, information set forth for properties disposed includes the RioCan joint venture’s Bromont outlet center, which was sold in ~~earnings (losses) 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.~~ May 2019.



	2019		2018		Increase/(Decrease)
Equity in earnings from existing properties	$	3,267	$	4,364	$	(1,097	)
Equity in earnings from property disposed	8		36		(28		)
	$	3,275	$	4,400	$	(1,125	)

The ~~increase~~decrease in equity in earnings of unconsolidated joint ventures from existing properties was ~~partially offset by~~primarily due to higher LIBOR interest rate levels on variable rate mortgages at our unconsolidated joint ventures. The ~~approximate~~ average 30 day LIBOR rate for the ~~2018~~2019 period was ~~1.91%~~approximately 2.5% compared to ~~1.04%~~approximately 1.8% for the ~~2017~~2018 period.

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's~~Company’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's~~Company’s principal funding requirement is the payment of dividends on its common shares. The ~~Company's~~Company’s principal source of funding for its dividend payments is distributions it receives from the Operating Partnership.

Through its ownership of the sole general partner of the Operating Partnership, the Company has the full, exclusive and complete responsibility for the Operating ~~Partnership's~~Partnership’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's~~Partnership’s partnership agreement. The Company receives proceeds from equity issuances from time to time, but is required by the Operating ~~Partnership's~~Partnership’s partnership agreement to contribute the proceeds from its equity issuances to the Operating Partnership in exchange for partnership units of the Operating Partnership.

We are a well-known seasoned issuer with a shelf registration that expires in March 2021 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's~~Partnership’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's~~Partnership’s debt. If the Operating Partnership fails to fulfill its debt requirements, which trigger the ~~Company's~~Company’s guarantee obligations, then the Company may be required to fulfill its cash payment commitments under such guarantees. However, the ~~Company's~~Company’s only material asset is its investment in the Operating Partnership.

The Company believes the Operating ~~Partnership's~~Partnership’s sources of working capital, specifically its cash flow from operations and borrowings available under its unsecured lines of credit, are adequate for it to make its distribution payments to the Company and, in turn, for the Company to make its dividend payments to its 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's~~Partnership’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's~~Partnership’s ability to pay its distributions to the Company which will, in turn, adversely affect the ~~Company's~~Company’s ability to pay cash dividends to its shareholders.

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's~~Company’s own shares.

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's~~Partnership’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's~~Partnership’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 2019, the Company’s Board of Directors authorized the repurchase of up to an additional $44.3 million of our outstanding common shares for a total remaining authorized amount of $100.0 million. The Board of Directors also extended the expiration of the existing plan by two years to May 2021. 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.

Shares repurchased ~~for the three and nine months ended September 30, 2018~~ were as follows:


	Three months ended September 30,		Nine months ended September 30,		Three months ended June 30,				Six months ended June 30,
	2018		2018		2019		2018		2019		2018
Total number of shares purchased	—		919,249		558,399		475,549		558,399		919,249
Average price paid per share	$	—	$	21.74	$	17.89	$	21.01	$	17.89	$	21.74
Total price paid exclusive of commissions and related fees (in thousands)	$	—	$	19,980	$	9,989	$	9,990	$	9,989	$	19,980

The remaining amount authorized to be repurchased under the program as of ~~September~~June 30, ~~2018~~2019 was approximately ~~$55.7~~$90.0 million. For more information, see “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in Part II of this Quarterly Report on Form 10-Q.

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.

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 ~~our~~such 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 or from the proceeds from the Operating ~~Partnership's~~Partnership’s debt offerings and the ~~Company's~~Company’s equity offerings.

We believe we achieve a strong and flexible financial position by attempting to: (1) maintain a conservative leverage position relative to our portfolio when pursuing new development, expansion and acquisition opportunities, (2) extend and sequence debt maturities, (3) manage our interest rate risk through a proper mix of fixed and variable rate debt, (4) maintain access to liquidity by using our 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 forth our changes in cash flows (in thousands):


	Nine months ended September 30,									Six months ended June 30,
	2018			2017			Change			2019			2018			Change
Net cash provided by operating activities	$	179,968		$	181,530		$	(1,562	)	$	92,779		$	115,292		$	(22,513	)
Net cash used in investing activities	(36,815		)	(89,052		)	52,237
Net cash provided by (used in) investing activities										116,331			(28,701		)	145,032
Net cash used in financing activities	(144,782		)	(95,954		)	(48,828		)	(210,740		)	(88,453		)	(122,287		)
Effect of foreign currency rate changes on cash and equivalents	(60		)	(54		)	(6		)	(16		)	(53		)	37
Net decrease in cash and cash equivalents	$	(1,689	)	$	(3,530	)	$	1,841		$	(1,646	)	$	(1,915	)	$	269

Operating Activities

The decrease in net cash provided by operating activities in the ~~2018~~2019 period iswas primarily due to ~~the increase~~reductions in ~~bond interest payments~~working capital and due to the ~~change~~sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers in the timing of the payments partially offset by the incremental cash flow provided by the addition of the Fort Worth outlet center and the expansion of the Lancaster outlet center during the second half of 2017.March 2019.

Investing Activities

The primary cause for the ~~decrease~~increase in net cash provided by investing activities was due to the net proceeds of approximately $128.2 million from the sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers in the 2019 period. In addition, the 2019 period had lower levels of development activity than the 2018 period.

Financing Activities

The primary cause for the increase in net cash used in ~~investing~~financing activities was due to ~~lower levels~~the use of ~~development activity in~~ the 2018 period compared to the 2017 period. In 2017, we had construction expenditures for our Fort Worth and Lancaster outlet centers. In the 2018 period, we had no new developments under construction. Partially offsetting the decrease in net cash used in investing activities was the net proceeds from the sale of our ~~Westbrook center in May 2017.~~

~~Financing Activities~~

~~Given~~Nags Head, Ocean City, Park City and Williamsburg outlet centers to pay down our unsecured lines of credit. In addition, during the ~~lower development activity~~2019 period, we repurchased approximately $10.0 million of our outstanding common shares as compared to repurchasing approximately $20.0 million of our outstanding common shares in the 2018 ~~period as discussed above, we borrowed less in the 2018 period compared to the 2017~~ period. In the 2017 period, we used cash to repurchase $49.4 million of the Company's common shares, compared to $20.0 million in the 2018 period. Also in 2017, we used cash to fund the payment of a make-whole premium totaling $34.1 million related to early extinguishment of debt.

Capital Expenditures

The following table details our capital expenditures (in thousands):


	Nine months ended September 30,								Six months ended June 30,
	2018		2017			Change			2019		2018		Change
Capital expenditures analysis:
New outlet center developments and expansions	$	6,398	$	87,486		$	(81,088	)	$	4,010	$	5,285	$	(1,275	)
Major outlet center renovations	1,973		13,813			(11,840		)	290		1,786		(1,496		)
Second generation tenant allowances	11,588		15,815			(4,227		)	6,050		8,326		(2,276		)
Other capital expenditures	15,929		20,056			(4,127		)	10,293		9,134		1,159
	35,888		137,170			(101,282		)	20,643		24,531		(3,888		)
Conversion from accrual to cash basis	17,461		(4,558		)	22,019			1,759		16,681		(14,922		)
Additions to rental property-cash basis	$	53,349	$	132,612		$	(79,263	)	$	22,402	$	41,212	$	(18,810	)

The decrease in new outlet center developments and expansions expenditures was primarily due to construction expenditures, including first generation tenant allowances, that occurred in the 2017 period for our Fort Worth and Lancaster outlet centers.

The decrease in major outlet center renovations in the 2018 period was primarily due to construction activities at our Myrtle Beach Hwy 17, Riverhead and Rehoboth Beach outlet centers that occurred in 2017.

~~The decrease in second generation tenant allowances was due to the re-merchandising efforts that occurred in the 2017 period to bring high volume tenants to 5 outlet centers.~~

The decrease in other capital expenditures in the 2018 period is primarily due to tenant interior build outs and the installation of solar panels at several of our outlet centers that occurred in 2017.

~~Current Developments~~

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.

Potential Future Developments, Acquisitions and Dispositions

As of the date of this filing, we are in the initial study period for potential new developments. We may also use joint venture arrangements to develop other potential sites. There can be no assurance, however, that these potential future projects will ultimately be developed.

In the case of projects to be wholly-owned by us, we 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. See “Off-Balance Sheet Arrangements” for a discussion of unconsolidated joint venture development activities.

We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet centers. 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”). See the section “Non-GAAP Supplemental Earnings Measures - Funds From 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.

Financing Arrangements

As of ~~September~~June 30, ~~2018,~~2019, unsecured borrowings represented 95% of our outstanding debt and ~~93%~~92% of the gross book value of our real estate portfolio was unencumbered. The Company guarantees the Operating ~~Partnership's~~Partnership’s obligations under our lines of credit. As of ~~September~~June 30, ~~2018,~~2019, we had ~~$390.9~~$581.3 million available under our unsecured lines of credit after taking into account outstanding letters of credit of ~~$6.0 million.~~$170,000.

~~Increased Borrowing Capacity and Extension of Unsecured Lines of Credit~~

In January 2018, we closed on amendments to our unsecured lines of credit, which increased the borrowing capacity from $520.0 million to $600.0 million and extended the maturity date from October 2019 to October 2021, with a one-year extension option. We also reduced the interest rate spread over LIBOR from 0.90% to 0.875% and increased the incremental borrowing availability through an accordion feature on the syndicated line from $1.0 billion to $1.2 billion. Loan origination costs associated with the amendments totaled approximately $2.3 million.

~~Southaven Mortgage~~

In February 2018, the consolidated joint venture that owns the Tanger outlet center in Southaven, Mississippi amended and restated the $60.0 million mortgage loan secured by the property that was scheduled to mature in April 2018. The amended and restated loan reduced the principal balance to $51.4 million, increased the interest rate from LIBOR + 1.75% to LIBOR + 1.80% and extended the maturity to April 2021, with a two-year extension option. In March 2018, the consolidated joint venture entered into an interest rate swap, effective March 1, 2018, which fixed the base LIBOR rate at 2.47% on a notional amount of $40.0 million through January 31, 2021.

~~Unsecured Term Loan~~

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 is a well-known seasoned issuer with a joint shelf registration on Form S-3 with the Operating Partnership, expiring in March 2021, that allows us to register unspecified amounts of different classes of ~~securities on Form S-3.~~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 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 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 dividends in accordance with REIT requirements in both the short and long-term. Although we receive most of our rental payments on a monthly basis, distributions to shareholders and unitholders are 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.

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 matures, which is our unsecured lines of credit. The unsecured lines of credit expire in 2021, with a one-year extension option that may extend the maturity to 2022. At June 30, 2019, amounts outstanding under our unsecured lines of credit, which provide for borrowings up to $600.0 million, totaled $18.5 million.

The interest rate spreads associated with our unsecured lines of credit and our unsecured term loan are based on our current investment grade credit rating. If our credit rating is downgraded or upgraded, our interest rate spread would adjust accordingly.

The Operating ~~Partnership's~~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 covenants	Required	Actual
Total consolidated debt to adjusted total assets	<60%	5149	%
Total secured debt to adjusted total assets	<40%	3	%
Total unencumbered assets to unsecured debt	>150%	~~184~~197	%

OFF-BALANCE SHEET ARRANGEMENTS

~~The following table~~We have partial ownership interests in 7 unconsolidated outlet centers totaling approximately 2.2 million square feet, including 3 outlet centers in Canada. See Note 4 to the consolidated financial statements for details ~~certain information as~~ of ~~September 30, 2018 about various unconsolidated real estate~~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.

We may elect to fund cash needs of a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans, although 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 net income or loss of, the joint ventures within other liabilities in the consolidated balance sheets because we ~~have an ownership interest:~~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 during 2019 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.

Joint Venture Outlet Center Location Ownership %
Square Feet
(in 000's)
Carrying Value of Investment (in millions)
Investments included in investments in unconsolidated joint ventures:
National Harbor National Harbor, MD 50.0 % 341
$ 0.6
RioCan Canada Various 50.0 % 923
110.7
$ 111.3

Investments included in other liabilities:
Columbus⁽¹⁾
Columbus, OH 50.0 % 355
$ (1.1 )
Charlotte⁽¹⁾
Charlotte, NC 50.0 % 398
(10.3 )
Galveston/Houston⁽¹⁾
Texas City, TX 50.0 % 353
(15.3 )
$ (26.7 )


~~(1)~~	~~The negative carrying value is due to distributions exceeding contributions and increases or decreases from the equity in earnings of the joint venture.~~

Our joint ventures are ~~generally subject to buy-sell provisions which are customary for~~typically encumbered by a mortgage on the 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 do not consider this arrangement to be a mandatory redeemable obligation.

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 ~~term~~mortgage loans, we may include a guaranty 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 ~~achievement of~~ performance targets including occupancy thresholds and minimum debt service coverage tests. Our joint ventures may contain ~~make-whole~~make whole provisions in the event that demands are made on any existing guarantees.

RioCan Canada

~~Charlotte~~

Debt of unconsolidated joint ventures

The following table details information regarding the outstanding debt of the unconsolidated joint ventures and guarantees of such debt provided by us as of ~~September~~June 30, ~~2018~~2019 (dollars in millions):


Joint Venture	Total Joint Venture Debt			Maturity Date	Interest Rate		Percent Guaranteed by the Operating Partnership		Maximum Guaranteed Amount by the Company		Total Joint Venture Debt			Maturity Date	Interest Rate		Percent Guaranteed by the Operating Partnership		Maximum Guaranteed Amount by the Company
Charlotte	$	100.0		July 2028	4.27%		—	%	$	—	$	100.0		July 2028	4.27%		—	%	$	—
Columbus	85.0			November 2019	LIBOR + 1.65%		7.5	%	6.4		85.0			November 2019	LIBOR + 1.65%		7.5	%	6.4
Galveston/Houston	80.0			July 2020	LIBOR + 1.65%		12.5	%	10.0		80.0			July 2020	LIBOR + 1.65%		12.5	%	10.0
National Harbor	87.0			November 2019	LIBOR + 1.65%		10.0	%	8.7		95.0			January 2030	4.63	%	—	%	—
RioCan Canada	10.0			May 2020	5.75	%	31.0	%	3.1		9.4			May 2020	5.75	%	31.9	%	3.0
Debt premium and debt origination costs	(1.4		)								(1.3		)
	$	360.6							$	28.2	$	368.1							$	19.4



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)~~
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
~~(336) 292-3010~~ Common Shares, $0.01 par value
~~(Registrant's telephone number, including area code)~~SKT	New York Stock Exchange



Tanger Factory Outlet Centers, Inc.	Yesx	☒	Noo	☐
Tanger Properties Limited Partnership	Yesx	☒	Noo	☐



Tanger Factory Outlet Centers, Inc.	Yesx	☒	Noo	☐
Tanger Properties Limited Partnership	Yesx	☒	Noo	☐



Tanger Factory Outlet Centers, Inc.
Large ~~accelerated filer~~ x Accelerated Filer	☒	Accelerated ~~filer~~ o Filer	☐
Non-accelerated ~~filer~~ o Filer	☐	Smaller ~~reporting company~~ o Reporting Company	☐
		Emerging ~~growth company~~ oGrowth Company	☐



	x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Tanger Properties Limited Partnership
Large ~~accelerated filer~~ o Accelerated Filer	☐	Accelerated ~~filer~~ o Filer	☐
Non-accelerated ~~filer~~ x Filer	☒	Smaller ~~reporting company~~ o Reporting Company	☐
		Emerging ~~growth company~~ oGrowth Company	☐



Tanger Factory Outlet Centers, Inc.	Yeso	☐	Nox	☒
Tanger Properties Limited Partnership	Yeso	☐	Nox	☒



As of December 31, 2017
Joint Venture	Outlet Center Location	Ownership %		Square Feet (in 000's)	Carrying Value of Investment (in millions)			Total Joint Venture Debt, Net (in millions)⁽¹⁾
Investments included in investments in unconsolidated joint ventures:
Columbus	Columbus, OH	50.0	%	355	$	1.1		$	84.4
National Harbor	National Harbor, MD	50.0	%	341	2.5			86.4
RioCan Canada	Various	50.0	%	923	115.8			11.1
					$	119.4

Investments included in other liabilities:
Charlotte⁽²⁾	Charlotte, NC	50.0	%	398	$	(4.1	)	$	89.8
Galveston/Houston ⁽²⁾	Texas City, TX	50.0	%	353	(13.0		)	79.4
					$	(17.1	)



	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Fee:
Management and marketing	$	571	$	564	$	1,704	$	1,676
Leasing and other fees	12		24		122		100
Total Fees	$	583	$	588	$	1,826	$	1,776


(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~~Company’s common shares, subject to certain limitations to preserve the ~~Company's~~Company’s REIT status.


(2)	Represents the accelerated recognition of compensation cost entitled to be received by the Company’s President and Chief Operating Officer per the terms of a transition agreement executed in connection with his planned retirement.


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



Outlet centers ~~opened:~~		~~Outlet centers~~ sold:		~~Outlet center expansions:~~
~~Fort Worth~~Nags Head, Ocean City, Park City, and Williamsburg	~~October 2017~~	~~Westbrook~~	~~May 2017~~	~~Lancaster~~	~~September 2017~~March 2019



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, 2018 to July 31, 2018	—	$	—	—	$	55.7
August 1, 2018 to August 31, 2018	—	—		—	55.7
September 1, 2018 to September 30, 2018	—	—		—	55.7
Total	—			—	$	55.7



Exhibit Number			Exhibit Descriptions


~~10.1~~10.1*			~~Second Amended~~2019 Declaration of Amendment to Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and ~~Restated Term Loan Agreement dated as of October 25, 2018, between~~ Tanger Properties Limited ~~Partnership~~Partnership.

10.2			Transition Agreement, by and ~~Wells Fargo Bank, National Association, as Administrative Agent,~~between Thomas E. McDonough and the ~~lenders party thereto~~Partnership, dated June 4, 2019 (incorporated by reference to Exhibit 10.1 of the Company’s and the Operating Partnership’s Current Report on Form 8-K dated ~~October 26, 2018)~~June 4, 2019).
~~10.2~~			Second Amended and Restated Continuing Guaranty dated October 25, 2018 by and between Tanger Factory Outlet Centers, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 of the Company’s and Operating Partnership’s Current Report on Form 8-K dated October 26, 2018).
12.1*			~~Company's Ratio of Earnings to Fixed Charges.~~

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 of the Sarbanes - Oxley Act of 2002 for Tanger Factory Outlet Centers, Inc.

31.2*			Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 for Tanger Factory Outlet Centers, Inc.

31.3*			Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 for Tanger Properties Limited Partnership.

31.4*			Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 for Tanger Properties Limited Partnership.

32.1**			Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 for Tanger Factory Outlet Centers, Inc.

32.2**			Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 for Tanger Factory Outlet Centers, Inc.

32.3**			Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 for Tanger Properties Limited Partnership.

32.4**			Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 for Tanger Properties Limited Partnership.

101101.INS**			~~The following financial statements from Tanger Factory Outlet Centers, Inc.~~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.SCH***			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 ~~Tanger Properties Limited Partnership's dual Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, formatted~~contained 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).Exhibit 101)


			* Filed herewith.
			** Furnished herewith.
			*** Submitted herewith.



TANGER FACTORY OUTLET CENTERS, INC.
By:	/s/ James F. Williams
	James F. Williams
	Executive Vice President and Chief Financial Officer

TANGER PROPERTIES LIMITED PARTNERSHIP
By: TANGER GP TRUST, its sole general partner
By:	/s/ James F. Williams
	James F. Williams
	Vice President and Treasurer (Principal Financial Officer)