Good morning. This is Cyndi Holt, Vice President of Investor Relations, and I would like to welcome you to the Tanger Factory Outlet Centers' Third Quarter 2019 Conference Call.Yesterday we issued our earnings release as well as our supplemental information package and our investor presentation. This information is available on our Investor Relations website, investors.tangeroutlets.com. Please note that during this conference call some of management's comments will be forward-looking statements that are subject to numerous risks and uncertainties and actual results could differ materially from those projected. We direct you to our filings with the Securities and Exchange Commission for a detailed discussion of these risks and uncertainties.During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G, including funds from operations, or FFO, adjusted funds from operations, or AFFO, same-center net operating income and portfolio net operating income. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information. This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management's comments include time-sensitive information that may only be accurate as of today's date, October 31, 2019.At this time, all participants are in listen-only mode. Following managements prepared comments, the call will be open for your questions. We ask you to limit your questions to two, so that all callers will have the opportunity to ask questions.On the call today will be Steven Tanger, Chief Executive Officer and Jim Williams, Executive Vice President and Chief Financial Officer.I will now turn the call over to Steven Tanger. Please go ahead, Steve.

Good morning and thank you for joining us. I will provide you with our third quarter results and operational and strategic highlights. Jim will review our financials and outlook for the year. For the third quarter, we delivered results that exceeded our expectations. Despite facing a number of headwinds, we are encouraged by our improved outlook for 2019.Based upon our results so far and our expectations for the remainder of the year, we are raising our guidance. The value proposition and desirability of our centers continues to resonate with shoppers. Traffic was up 1.1% in the third quarter and 1.3% year-to-date from comparable periods. The favorable traffic momentum has continued into October. Year-to-date, same center NOI declined by 80 basis points and for the third quarter declined 180 basis points compared to the prior year periods.While ahead of our expectations, these results do reflect the challenges of today's retail environment. At quarter end, our consolidated portfolio maintained a high occupancy rate of 95.9%. Leasing continues to be a top priority as we curate our centers with quality retailers to provide an optimal customer experience. Commenced leases for the trailing 12 months included 345 leases, totaling approximately 1.7 million square feet.We had leases -- we have lease renewals executed or in process for 74% of the space and the consolidated portfolio is scheduled to expire during 2019 calendar year. Our blended average rental rates increased 2.5% on a straight-line basis and we're off 2% on a cash basis for all leases that commenced during the trailing 12 months ended September 30 2019. For the remainder of the year, we anticipate seeing ongoing pressure on cash spreads similar to what we have seen for the current trailing 12-month period.We continue to prioritize maintaining high occupancy despite the recent and anticipated store closings…

Thank you, Steve. Third quarter AFFO available to common shareholders was $0.58 per share compared to $0.63 per share in the third quarter of 2018. The current year period is inclusive of $0.04 diluted impact of the four assets which were sold earlier this year.Same-center NOI decreased 1.8% compared to the prior year quarter, driven primarily by tenant bankruptcies, lease modifications and store closures.In terms of our financial position, we continue to maintain our solid foundation. We have no significant debt maturities in our consolidated portfolio until December 2023, a low 3.5% weighted average interest rate and a largely undrawn line of credit. This provides us with both stability and optionality.As of September 30, approximately 94% of the square footage in our consolidated portfolio was not encumbered by mortgages. Our unsecured line of credit has 99% unused capacity or nearly $600 million. We maintained a substantial interest coverage ratio for the first nine months of the year of 4.3 times. A net consolidated debt to EBITDA was approximately 5.8 times for the trailing 12 months.Our floating rate exposure represented only 1% of total outstanding debt at September 30 and the average time to maturity was 5.7 years. Year-to-date, we have reduced our outstanding consolidated debt by $141 million. The strength of our balance sheet and the significant free cash flow we generate after payment of our dividend, which we expect to be nearly $95 million for 2019 allows us to take advantage of selective growth opportunities that may arise.During the third quarter, we were active in our share repurchase program by an approximately 651,000 shares for $10 million. Year-to-date, we have deployed $20 million of capital into share repurchases and have $80 million remaining in our authorization through May 2021.Regarding our 2019 outlook, we are pleased to refine our guidance…

[Operator Instructions] Your first question comes from the line of Christy McElroy from Citi. Please ask your question.

Hi, good morning, everyone. Thanks for all the detail on the pending store closures. I'm counting about 300,000 square feet already which compares to the 195,000 this year and about 270 basis points of AVR. It's a pretty big hit to 2020 and you mentioned that about half of the Dressbarn space is in active discussions. Can you kind of give us a sense or a reasonable timing for that space to get backfilled and what you know - what does that imply for potential average occupancy in 2020 given that all that space will come online earlier in the year?

Good morning, Christy. We are expecting and we have had very positive conversations with tenants to backfill the Dressbarn space and as we mentioned we have commitments for about half the space which we anticipate putting into occupancy in the first half of next year.I might mention that the Dressbarn sales were less than 50% of our portfolio average, so this gives us an opportunity to improve and curate the quality of our assets, which is one of our primary focus.If you take that space out, we do have some headwinds headed into next year. But we have time now to prepare for them. The Chapter 11, bankruptcies and the restructurings are not Chapter seven which vacates immediately.So we will -- as we have always in the past, aggressively work with our tenant partners, both new and prospective partners to fill the space. The space will be filled as in years past, with existing and new permanent tenants, and several pop-up and tenants that are testing the outlet space.It's -- we're doing just fine. It is tough out there, as you know. But we continue to perform. And we will be happy to give you guidance as to our progress at the end of February, when we announce our year-end results, in our 2020 guidance for the year.

And so as I think about the pressure that, this kind of space coming on creates for the leasing efforts, you know short-term leasing, in terms of what's commenced has started to come down as a percentage of space.And it's decreased in terms of the impact on the spreads. But with the pickup in closers over the next few months, would you expect that short-term leasing to have to pick up again. And sort of what impact does this create on a leasing CapEx as well.

The space that we are getting back is, easily re-tenanted. It's almost entirely the same depth 100 feet deep and it's entirely on grade one, level, retail. So we're not talking about significant CapEx, to re-tenant the space.We do as I mentioned, have significant interest in the space, by more high volume tenants that will create excitement. And we're -- I'm not going to give you next year's guidance. And today we will at the end of February.But if you look at our history, for 38 years we've never ended the year less than 95% occupied. This is not the first time we've been faced with potential new space coming on the market. And we've been successful. And we plan to continue to be successful and re-tenant in this space.

But we can reasonably expect that short-term leasing will pick up?

Again, I'm not going to guide you on that. I'll have more facts on 2020 and the makeup of the different leases when we visit again either at a conference or in a public forum at our next conference call.

Okay. Thank you, Steve.

Your next question comes from the line of Greg McGinniss from Deutsche Bank. Please ask your question.

Hey! good morning. We just got a couple of questions on Forever 21. So, first are they current on rent? What are the expectations on recovering any lost rent? And then how did that, -- how is the bankruptcy process impacting your accounting for their rent payments.

Good morning, Greg. We were sad to see Forever 21 file for bankruptcy. Consumers still like their product. And it's with regard to financial impact; we have not been paid for September rents and have taken have written that off in Q3.We have been paid in October. So we're working with Forever 21, on their ongoing strategy. As I'm sure you've seen, they have revised their potential store closing list significantly. We have two stores on that list. It remains a fluid situation. We expect those two stores to close in the fourth quarter, but not certain.

Okay, thanks. And then second and I've learned from other company earnings calls not to necessarily trust everything we've read in the Forever 21 bankruptcy documents, but I believe they originally listed 11 Tanger leases up for negotiation. So based on the expected closure of two stores, can we assume that there was roll-downs in the other locations? Just kind of curious. And what rent reduction may have been on those leases, when those leases would go into effect? So any details on the process and outcome would be appreciated Steve.

Greg, we'd be happy to give you guidance at the end of February with regard to the facts with regard to Forever 21. This filing occurred two weeks ago and it is and remains a complicated fluid situation, so I don't want to give you an answer that may not prove to be correct.

All right well I can appreciate that. Thanks, Steve.

Your next question comes from the line of Todd Thomas from KeyBanc Capital Markets. Please ask your question.

Hi, thanks. Good morning. First question so for the pop-up and temporary tenants in the portfolio, where did that stand at the end of September as a percent of the portfolios GLA? And then Steve, I realize the goal of the pop-up and temporary tenants you know in the portfolios to fill space and then try to convert some to permanent leases. Historically, what percent of pop-up and temp tenants convert to permanent lease deals if you kind of look back over time?

Good morning, Todd. Right now pop-up temporary seasonal tenants account for about 5% of our occupancy. This is slightly elevated from an average of 4% over the past many years. Our long-term strategy is to maintain occupancy and an exciting presentation to our consumers. As far as the conversion to permanent stores, some of them do convert like Vineyard Vines, which now is in a lot of our different centers. Some of them are local tenants, which provide local color and stay for long-term, but don't execute long-term leases. They stay at the temporary tenant for years, which gives us the opportunity to repossess the space if we have a different tenant we want to put in.

Okay. And then in terms of timing I guess to see some of those convert or potentially not renew or stay in occupancy I guess. Is the timing generally sort of a post holiday decision? Is that something that happens historically in January?

Todd, we're focused on a really small percentage of the portfolio. Again, I'd be happy to give you the facts when we get together again in the public forum the end of February and we'll know with certainty what the situation is with those tenants and we will be happy to give you guidance and our thoughts for 2020. I just want to reiterate, this is a long-standing important part of our strategy to present a compelling experience to customers when they come to our properties. There is no landlord contribution or expense. These valued temporary tenants and pop-up stores take vacant space and create value and excitement. So we will continue to have that as an important part of our strategy.

Okay. And then just a question for Jim. I think you said that in your comments, you made a comment about growth opportunities and I don't know if you were referring to Nashville or expansions or acquisitions, but I was just curious if you could provide some context around that comment. And also with regards to Nashville, maybe we could you could give us an update on that potential project?

Todd, I'll take that one. Nashville is progressing on schedule. We're working with the master developer as they do their mass grating and install a new interchange. I want to just point out that this is a large development. We will be the hub of this development, which is currently zoned for $3 million square feet of mixed use. It will include office, apartments and the outlet center as a very important hub and we're the first one to go in. So we are as far as I'm concerned on target and hopefully with the disciplines that we've maintained over many years, we will have the 60% pre-leased and all non-appealable permits by this time next year and be able to start construction.

Okay thank you.

Your next question comes from the line of Caitlin Burrows from Goldman Sachs. Please ask your question.

Hi. Good morning. Maybe just as part of the 2019 guidance you guys increased the SG&A part a little bit. So could you go through what's driving that and whether we should think about it being one time in nature or more permanent?

Caitlin, I had trouble hearing you. What were you -- Jim will take that he's got better ears than I do.

I'll take that question. Yeah there -- Caitlin in the fourth quarter the G&A increased from the -- from previous guidance. There are several small components not necessarily recurring. A part of that is including some additional expense related to the accelerated vesting of some share-base compensation related to the directors that are not going to stand for reelection next year.

Got it. And then on the dividends you guys have talked about your payout ratio in the past as being around 60% on an FFO basis; maybe mid to high 60s on FAD basis, but now we're getting above those levels. So just wondering as we go forward do you expect to moderate dividend increases until that gets lower or how should we think about dividend growth going forward?

Caitlin there's not much difference between the high 60's. 68, 69 and 71. So we are certainly -- our payout ratio with the exception of one of our valued competitors in our sector is the lowest in the sector as you know. Our dividend policy will be reviewed by our board based on managements outlook for 2020. We will provide that disclosure when we give you our 2020 guidance next February.The board takes seriously its dividend policy and management is responsible for the allocation of our free cash flow each year. The dividend is one of -- the dividend increases is only one of the many priorities that we have. So it will -- it's really premature to announce a dividend strategy at this time.

Okay, thanks.

Your next question comes from the line of Craig Schmidt from Bank of America. Please ask your question.

Thank you. Good morning. I wonder roughly in 2019 what percent of the drag same-store NOI is due to lease modifications versus store closings?

Craig, as we guided earlier in the year that's a complicated question, and I'm sure they're interrelated. We had expected and guided that we would receive back about 225,000 square feet of space through tenant restructurings and bankruptcies and with that of course is the associated NOI with that space being occupied. We gave you our best guidance in February of this year based on our view of the landscape at that time. And we will do it again next year. We are delighted, that we've been able to continue to exceed expectations with regard to our NOI, same-center NOI, and we've increased our guidance for the fourth quarter. I don't want to lessen the fact that it's tough out there. There are challenges, but we are -- we're doing pretty well compared to our expectations and are delighted to continue to raise guidance as we have -- as we did last quarter, going into the fourth quarter.

Okay. And then, just looking back at history, on average, how many months between a store closing and a space backfilled in rent paying?

That's tenant specific. If we get advanced notice, as we did with Dressbarn, who were honorable and Dave, the tenant gave us and other landlords six to seven months notice of their plan and paid rent and will pay rent through the closing date. It gives us time to install a new tenant. We have some tenants that will take occupancy weeks after Dressbarn departs. Some space could take nine to 12 months. So, it's very hard to give you one answer, but looking at the entire portfolio, we still -- we've just updated our guidance for year-end occupancy, which incorporates the space we get back and filling that space with new and exciting tenants. We will give you occupancy guidance next year, which will incorporate the ability to release and install new tenants. All of that will be in our guidance for -- the NOI guidance, same-center NOI guidance, FFO guidance and occupancy guidance. So, it's a complicated question Craig and I can't give you the simple answer other than the one I gave you.

Nope, I appreciate it. Thank you.

Your next question comes from the line of Michael Mueller from JPMorgan. Please ask your question.

Hi. I guess following up on one of the earlier questions about just store closures in 2020. I appreciate that you're going to give more detailed guidance in February or so, but is your expectation that at this point that 2020 from a closure, I guess lease amendment perspective could be worse than what we see this year; similar or better, just any high level color would be appreciated.

Good morning, Michael. Certainly, the announced closures in the past three weeks and Dressbarn give us a challenge for next year. As I mentioned previously, the situation is fluid. The original store closing list for Forever 21 and many stores closing and now the revised list is two. The other situations are fluid. So, I really -- I am reluctant to give you any sort of guidance for next year. We are totally focused right now on filling the space with exciting high-volume tenants to go into the holiday season and end our year. That's our focus. Our focus is on providing really a fabulous experience for our shoppers and maintaining a strong balance sheet. So, that -- if you'll bear with us, I'm happy -- we'd be happy to give you as much detail as appropriate, when we give you 2020 guidance.

Got it. Okay. And then, I guess going to the better guidance for the balance of this year, is it -- I mean, what exactly where the drivers of the better guidance? I mean, is it, you were -- you know you've laid out, you could have closures and bankruptcy closures of up to, I think, it was up to 225,000 square feet or so. So that you are now expecting less there or is it something else where you were -- something happening on the leasing side or percentage rents or just any other color there would be great?

Hi, Michael. This is Jim. Yeah, and the primary drivers were better expected occupancy as you pointed out, and so it somewhat is supported by a strong or temporary and pop-up store program is certainly making the contributions to that. And variable rents is also contributing to the improved outlook for same-center ROI guidance.

Okay. That's it. Thank you.

Your next question comes from the line of [indiscernible] from Green Street Advisors. Your line is open. Please ask your question.

Hi, good morning. Could you talk a little bit about the rational for the share buybacks over the past few quarters? I'm just -- like to get a sense of why share buybacks are a more attractive use of capital then maybe reducing debt just given debt to enterprise value is now in excess of 50%?

Good morning. We have four major capital allocation buckets. One is to invest in our assets. Two is to maintain and pay, and occasionally raise our dividend as we have for each of the 26 years we've been public. Buying back our stock on a measured selected basis and paying down debt. So far this year, we bought back $20 million worth of stock, and we paid down our debt by over $140 million.Our ratios are very attractive, I think that they're better than most of the mall REIT's, and we take great pride in our investment grade ratings, and we will continue to appropriately and conservatively allocate capital to maintain or attempt to maintain those ratings and selectively buy-back our stock.

That makes sense. Is there any criteria, you can share that like -- what made the buyback attractive? The discounts NAV or really the fact that you're comfortable with the balance sheet, you've done a lot of deleveraging this year and that was the best place to put the capital or is it your view that there's a sizable discount to fair value here and that's the arbitrage you're trying to capitalize on?

Well, I think it's probably all of the above. I mean let's put it into perspective. In the third quarter, we only bought back $10 million worth of stock. And at the end of the second quarter, we only bought back $10 million worth of stock. So at the same time, we paid down $140 million in debt. We -- it is a balanced approach, and I don't want to get into our internal calculations of asset value, but you can assume since we bought back our stock that we thought it was undervalued.

Fair enough. Thank you.

There are no further questions at this time. Presenters, please continue.

Okay. Well, I want to thank everybody for joining us this morning. We will see you either at NAREIT or I'm being hosted at an investor conference next week in New York, and I wish you all a very happy day and thank you again. Goodbye now.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.