Tanger Reports Third Quarter Results

Drives Positive Blended Rent Spreads of 5.7%

Grows Occupancy by 210 Basis Points to 96.5%

Raises Earnings Guidance

Increased Dividend by 10% in October

GREENSBORO, N.C., Nov. 2, 2022 /PRNewswire/ -- Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a leading owner and operator of upscale open-air outlet centers, today reported financial results and operating metrics for the three and nine months ended September 30, 2022.

"We are pleased to announce another quarter of strong results. As a result of our continued momentum and outlook for the remainder of 2022, we are raising our full-year 2022 earnings guidance, and we recently increased our dividend for the second time this year, bringing year-to-date growth to over 20%," said Stephen Yalof, President and Chief Executive Officer. "Tanger is driving success by delivering on our strategic priorities of accelerating leasing, commercializing marketing and reshaping operations, which has led to sustained NOI growth, improvement in rent spreads, longer lease terms and higher occupancy. Our open-air shopping destinations are gaining elevated and digitally native brands, iconic food and beverage, and entertainment uses that connect Tanger shoppers with the brands, value and experience they desire."

"We have continued to generate solid cash flows and have a well-positioned balance sheet that we have further strengthened with no significant debt maturities until 2026. We are committed to unlocking additional value and delivering long-term growth to our shareholders."

Third Quarter Results

• Net income available to common shareholders was $0.22 per share, or $23.0 million, compared to net loss available to common shareholders of $0.11 per share, or $11.0 million, for the prior year period. The prior year period included a loss on the early extinguishment of debt of $0.31 per share, or $33.8 million.
• Funds From Operations ("FFO") available to common shareholders was $0.47 per share, or $51.7 million, compared to $0.16 per share, or $17.8 million, for the prior year period.
• Core Funds From Operations ("Core FFO") available to common shareholders was $0.47 per share, or $51.7 million, compared to $0.47 per share, or $51.8 million, for the prior year period. Core FFO for the third quarter of 2021 excludes the loss on the early extinguishment of debt discussed above. The Company does not consider this item to be indicative of its ongoing operating performance.

Year-to-Date Results

• Net income available to common shareholders was $0.60 per share, or $63.0 million, compared to net loss available to common shareholders of $0.05 per share, or $4.8 million, for the prior year period. The prior year period included losses on the early extinguishment of debt totaling $0.46 per share, or $47.9 million.
• FFO available to common shareholders was $1.37 per share, or $149.9 million, compared to $0.84 per share, or $88.4 million, for the prior year period.
• Core FFO available to common shareholders was $1.37 per share, or $149.9 million, compared to $1.32 per share, or $138.7 million, for the prior year period. Core FFO for the first nine months of 2022 excludes $0.02 per share, or $2.4 million, related to certain executive severance costs, offset by a gain on sale of the corporate aircraft of $0.02 per share, or $2.4 million. Core FFO for the first nine months of 2021 excludes the losses on the early extinguishment of debt discussed above and general and administrative expense of $0.03 per share, or $2.7 million, for compensation costs related to a voluntary retirement plan and other executive severance costs. The Company does not consider these items indicative of its ongoing operating performance.

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

Operating Metrics

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

• Occupancy was 96.5% on September 30, 2022, compared to 94.9% on June 30, 2022 and 94.4% on September 30, 2021
• Average tenant sales productivity remained nearly flat at $446 per square foot for the twelve months ended September 30, 2022 compared to $448 per square foot for the twelve months ended September 30, 2021, a decrease of 0.4% for both the total portfolio and on a same center basis
• Lease termination fees totaled $0.2 million for the third quarter of 2022 and $2.9 million for the first nine months of 2022, compared to $1.8 million for the third quarter of 2021 and $3.2 million for the first nine months of 2021
• Same center net operating income ("Same Center NOI") increased 2.4% to $82.2 million for the third quarter of 2022 from $80.3 million for the third quarter of 2021 and increased 5.7% to $240.2 million for the first nine months of 2022 from $227.3 million for the first nine months of 2021, driven by growth in occupancy and rental rates in 2022. Same Center NOI for the first nine months of 2022 was impacted by the reversal of revenue reserves (excluding straight-line rents) of approximately $3.7 million compared to approximately $2.8 million in the comparable 2021 period (which included $0.4 million in the third quarter of 2021). In addition, during the first nine months of 2022, the Company recognized a straight-line rent reserve reversal (which does not impact Same Center NOI) of approximately $1.3 million

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

Development and Management Activity

In May 2022, Tanger broke ground on its 37th center in Nashville, TN. The center, which will be approximately 290,000 square feet, is expected to open in the fall of 2023 at an estimated total cost of $135 million to $145 million with a projected stabilized yield of 7.0% to 7.5%. Through September 30, 2022, Tanger had incurred costs of $21.8 million associated with this development.

In August 2022, Tanger announced a strategic partnership with Clarion Partners at Palm Beach Outlets in West Palm Beach, Florida. Effective July 28, 2022, Tanger assumed marketing, leasing and property management responsibilities at the 455,000 square foot property, which has been rebranded as Tanger Outlets Palm Beach and is the 38th center in Tanger's portfolio.

Leasing Activity

As of September 30, 2022, Tanger had renewals executed or in process for 75.6% of total portfolio space (including the Company's pro rata share of unconsolidated joint ventures) scheduled to expire during 2022 compared to 67.6% of expiring 2021 space as of September 30, 2021.

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

• Total renewed or re-tenanted leases (including leases for both comparable and non-comparable space) executed during the twelve months ended September 30, 2022 included 417 leases, totaling over 2.0 million square feet
  
  
• Blended average rental rates increased 5.7% on a cash basis for leases executed for comparable space during the twelve months ended September 30, 2022, a sequential improvement of 160 basis points. This increase is comprised of re-tenanted rent spreads of 18.6% and renewal rent spreads of 4.4%

Dividend

In October 2022, the Company's Board of Directors approved a 10.0% increase in the dividend on its common shares from $0.80 to $0.88 per share on an annualized basis. Simultaneously, the Board of Directors declared a quarterly cash dividend of $0.22 per share, payable on November 15, 2022 to holders of record on October 31, 2022.

Balance Sheet and Liquidity

In September 2022, the Company refinanced the mortgage at its Columbus, OH joint venture. The non-recourse loan has a maturity date of October 2032 and a fixed interest rate of 6.252%. Tanger's share of the outstanding debt remains at $35.5 million.

Subsequent to quarter end, in October 2022, the Company amended and restated the bank term loan, increasing the outstanding balance from $300 million to $325 million, extending maturity from April 2024 to January 2027 plus a one-year extension option, and reducing the applicable pricing margin from LIBOR plus 125 basis points to Adjusted SOFR (representing the Secured Overnight Financing Rate plus a 10-basis point credit adjustment spread) plus 120 basis points based on the Company's current credit rating. The amendment also incorporates a sustainability metric, reducing the applicable grid-based interest rate spread by one basis point annually, subject to meeting certain thresholds. Additionally, in October 2022, the Company refinanced the mortgage on its Southaven, MS (Memphis) center, increasing the outstanding balance from $40.1 million to $51.7 million and extending maturity from April 2023 to October 2026 plus a one-year extension, with an interest rate of Adjusted SOFR plus 200 basis points. Subsequent to these financing activities, the Company has no significant debt maturities until September 2026.

The following balance sheet and liquidity metrics are presented for the total portfolio, including the Company's pro rata share of unconsolidated joint ventures. As of September 30, 2022:

• Weighted average interest rate was 3.3% and weighted average term to maturity of outstanding debt, including extension options, was approximately 5.0 years. Including the October 2022 financing activities discussed above, the weighted average interest rate remained at 3.3% and weighted average term to maturity of outstanding debt, including extension options, was approximately 5.9 years
  
  
• Approximately 88% of the total portfolio's square footage was unencumbered by mortgages
  
  
• Interest coverage ratio (calculated as Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("Adjusted EBITDAre") divided by interest expense) was 4.8x times for both the first nine months of 2022 and the twelve months ended September 30, 2022
  
  
• Net debt to Adjusted EBITDAre (calculated as net debt divided by Adjusted EBITDAre) improved to 5.3x for the twelve months ended September 30, 2022 from 5.6x for the year ended December 31, 2021
  
  
• Total outstanding floating rate debt was approximately $72.4 million (principal), representing approximately 5% of total debt outstanding and 3% of total enterprise value
  
  
• Funds Available for Distribution ("FAD") payout ratio was 43% for the first nine months of 2022

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

Guidance for 2022

Based on the Company's results to date and its outlook for the remainder of 2022, management is increasing its its full-year 2022 guidance with its current expectations for net income, FFO and Core FFO per share for 2022 as follows:

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

Weighted average diluted common shares are expected to be approximately 105.0 million for earnings per share and 110.0 million for FFO and Core FFO per share. The estimates above do not include the impact of the acquisition or sale of any outparcels, properties or joint venture interests, or any additional financing activity.

Third Quarter 2022 Conference Call

Tanger will host a conference call to discuss its third quarter 2022 results for analysts, investors and other interested parties on Thursday, November 3, 2022, at 8:30 a.m. Eastern Time. To access the conference call, listeners should dial 1-877-605-1702. Alternatively, a live audio webcast of this call will be available to the public on Tanger's Investor Relations website, investors.tangeroutlets.com. A telephone replay of the call will be available from November 3, 2022 at approximately 11:30 a.m. through November 17, 2022 at 11:59 p.m. by dialing 1-877-660-6853, replay access code #13730784. An online archive of the webcast will also be available through November 17, 2022.

About Tanger Factory Outlet Centers, Inc.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a leading operator of upscale open-air outlet centers that owns (or has an ownership interest in) and/or manages a portfolio of 37 centers with an additional center currently under development. Tanger's operating properties are located in 20 states and in Canada, totaling approximately 14.0 million square feet, leased to over 2,700 stores operated by more than 600 different brand name companies. The Company has more than 41 years of experience in the outlet industry and is a publicly-traded REIT. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission ("SEC") that includes a supplemental information package for the quarter ended September 30, 2022. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the Company's website at www.tangeroutlets.com.

Safe Harbor Statement

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

You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements. Important factors which may cause actual results to differ materially from current expectations include, but are not limited to: risks related to the impact of the COVID-19 pandemic and macroeconomic conditions, including rising interest rates and inflation, on our tenants and on our business, financial condition, liquidity, results of operations and compliance with debt covenants; our inability to develop new outlet centers or expand existing outlet centers successfully; risks related to the economic performance and market value of our outlet centers; the relative illiquidity of real property investments; impairment charges affecting our properties; our dispositions of assets may not achieve anticipated results; competition for the acquisition and development of outlet centers, and our inability to complete outlet centers we have identified; environmental regulations affecting our business; risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety; our dependence on rental income from real property; our dependence on the results of operations of our retailers and their bankruptcy, early termination or closing could adversely affect us; the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours; risks related to climate change; costs associated with the increased focus on environmental, sustainability and social initiatives; risks related to uninsured losses; the risk that consumer, travel, shopping and spending habits may change; risks associated with our Canadian investments; risks associated with attracting and retaining key personnel; risks associated with debt financing; risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties; the effectiveness of our interest rate hedging arrangements; uncertainty relating to the potential phasing out of LIBOR; our potential failure to qualify as a REIT; our legal obligation to make distributions to our shareholders; legislative or regulatory actions that could adversely affect our shareholders, including the recent changes in the U.S. federal income taxation of U.S. businesses; our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends; the risk of a cyber-attack or an act of cyber-terrorism and other important factors set forth under Item 1A - "Risk Factors" in the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2021, as may be updated or supplemented in the Company's Quarterly Reports on Form 10-Q and the Company's other filings with the SEC. Accordingly, there is no assurance that the Company's expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes or related subjects in the Company's Current Reports on Form 8-K that the Company files with the SEC.

NON-GAAP SUPPLEMENTAL MEASURES

Funds From Operations

Funds From Operations ("FFO") is a widely used measure of the operating performance for real estate companies that supplements net income (loss) determined in accordance with generally accepted accounting principles in the United States ("GAAP"). We determine FFO based on the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"), of which we are a member. In December 2018, NAREIT issued "NAREIT Funds From Operations White Paper - 2018 Restatement" which clarifies, where necessary, existing guidance and consolidates alerts and policy bulletins into a single document for ease of use. NAREIT defines FFO as net income (loss) available to the Company's common shareholders computed in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains or losses from sales of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis.

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

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

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

• FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
  
  
• FFO does not reflect changes in, or cash requirements for, our working capital needs;
  
  
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and FFO does not reflect any cash requirements for such replacements; and
  
  
• Other companies in our industry may calculate FFO differently than we do, limiting its usefulness as a comparative measure.

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

Core FFO

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

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

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

• Core FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
  
  
• Core FFO does not reflect changes in, or cash requirements for, our working capital needs;
  
  
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Core FFO does not reflect any cash requirements for such replacements;
  
  
• Core FFO does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
  
  
• Other companies in our industry may calculate Core FFO differently than we do, limiting its usefulness as a comparative measure.

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

Funds Available for Distribution

Funds Available for Distribution ("FAD") is a non-GAAP financial measure that we define as FFO, excluding corporate depreciation, amortization of finance costs, amortization of net debt discount (premium), amortization of equity-based compensation, straight-line rent amounts, market rent amounts, second generation tenant allowances and lease incentives, recurring capital improvement expenditures, and our share of the items listed above for our unconsolidated joint ventures. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.

We believe that net income (loss) is the most directly comparable GAAP financial measure to FAD. FAD does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Other companies in our industry may calculate FAD differently than we do, limiting its usefulness as a comparative measure.

Portfolio Net Operating Income and Same Center Net Operating Income

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

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

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

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre

We present Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") as adjusted for items described below ("Adjusted EBITDA"), EBITDA for Real Estate ("EBITDAre") and Adjusted EBITDAre, all non-GAAP measures, as supplemental measures of our operating performance. Each of these measures is defined as follows:

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

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

Adjusted EBITDAre is defined as EBITDAre excluding gains and losses on extinguishment of debt, net, compensation related to voluntary retirement plan and other executive severance, gain on sale of non-real estate asset, casualty gains and losses, gains and losses on sale of outparcels, and other items that that we do not consider indicative of the Company's ongoing operating performance.

We present Adjusted EBITDA, EBITDAre and Adjusted EBITDAre as we believe they are useful for investors, creditors and rating agencies as they provide additional performance measures that are independent of a Company's existing capital structure to facilitate the evaluation and comparison of the Company's operating performance to other REITs and provide a more consistent metric for comparing the operating performance of the Company's real estate between periods.

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre have significant limitations as analytical tools, including:

• They do not reflect our net interest expense;
  
  
• They do not reflect gains or losses on sales of operating properties or impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate;
  
  
• Adjusted EBITDA and Adjusted EBITDAre do not reflect gains and losses on extinguishment of debt and other items that may affect operations; and
  
  
• Other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

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

Net Debt

We define Net Debt as Total Debt less Cash and Cash Equivalents and Short-Term Deposits and present this metric for both the consolidated portfolio and for the total portfolio, including the consolidated portfolio and the Company's pro rata share of unconsolidated joint ventures. Net debt is a component of the Net debt to Adjusted EBITDA ratio, which is defined as Net debt for the respective portfolio divided by Adjusted EBITDA (consolidated portfolio) or Adjusted EBITDAre (total portfolio at pro rata share). We use the Net debt to Adjusted EBITDA and the Net debt to Adjusted EBITDAre ratios to evaluate the Company's leverage. We believe this measure is an important indicator of the Company's ability to service its long-term debt obligations.

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SOURCE Tanger Factory Outlet Centers, Inc.