United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended March 31, 20192020
OR
 o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from _________ to _________


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


TANGER FACTORY OUTLET CENTERS, INC.INC.
TANGER PROPERTIES LIMITED PARTNERSHIP
(Exact name of Registrantregistrant as specified in its charter)
North Carolina (Tanger(Tanger Factory Outlet Centers, Inc.)56-1815473
North Carolina (Tanger(Tanger Properties Limited Partnership)56-1822494
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
3200 Northline Avenue, Suite 360, Greensboro, NC 27408
(Address of principal executive offices)
 
(336) 292-3010
(Registrant's telephone number, including area code)
3200 Northline Avenue, Suite 360, Greensboro, NC27408
(Address of principal executive offices) (Zip Code)
(336) 292-3010
(Registrant’s telephone number, including area code)

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


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

Tanger Factory Outlet Centers, Inc.:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares,
$0.01 par value
SKTNew York Stock Exchange
Tanger Properties Limited Partnership:
None

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer",filer,” “smaller reporting company” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Tanger Factory Outlet Centers, Inc.
Large accelerated filer x
Accelerated Filer		☒ 
Accelerated filer o
Filer		☐
Non-accelerated filer o
Filer		☐ 
Smaller reporting company o
Reporting Company		☐
  
Emerging growth company oGrowth Company☐
Tanger Properties Limited Partnership
Large accelerated filer o
Accelerated Filer		☐ 
Accelerated filer o
Filer		☐
Non-accelerated filer x
Filer		☒
��
Smaller reporting company oReporting Company☐
  
Emerging growth company oGrowth Company☐

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

Indicate by check mark whether the registrant is a shell company (as defined byin Rule 12b-2 of the Exchange Act).

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


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

Tanger Factory Outlet Centers, Inc,:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares,
$0.01 par value
SKTNew York Stock Exchange
Tanger Properties Limited Partnership:
None


As of May 2, 2019,6, 2020, there were 94,102,66693,466,009 common shares of Tanger Factory Outlet Centers, Inc. outstanding, $.01 par value.





EXPLANATORY NOTE
This report combines the unaudited quarterly reports on Form 10-Q for the quarter ended March 31, 20192020 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 March 31, 2019,2020, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned 94,102,66693,076,701 units of the Operating Partnership and other limited partners (the "Non-Company LPs"“Non-Company LPs”) collectively owned 4,960,6844,911,173 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one of the Company'sCompany’s common shares, subject to certain limitations to preserve the Company'sCompany’s status as a REIT. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.


Management operates the Company and the Operating Partnership as one enterprise. The management of the Company consists of the same members as the management of the Operating Partnership. These individuals are officers of the Company and employees of the Operating Partnership. The individuals that comprise the Company'sCompany’s Board of Directors are also the same individuals that make up Tanger GP Trust'sTrust’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'sCompany’s income statement is its equity in the earnings of the Operating Partnership. Therefore, the assets and liabilities and the revenues and expenses of the Company and the Operating Partnership are the same on their respective financial statements, except for immaterial differences related to cash, other assets and accrued liabilities that arise from public company expenses paid by the Company. The Company itself does not hold any indebtedness but does guarantee certain debt of the Operating Partnership, as disclosed in this report.






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


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


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


•Consolidated financial statements;


•The following notes to the consolidated financial statements:


Debt of the Company and the Operating Partnership;


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


Earnings Per Share and Earnings Per Unit;


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


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


This report also includes separate Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the 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.


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




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 March 31, 20192020 and December 31, 20182019
5
Consolidated Statements of Operations - for the three months ended March 31, 20192020 and 20182019
6
Consolidated Statements of Comprehensive Income - for the three months ended March 31, 20192020 and 20182019
7
Consolidated Statements of Shareholders'Shareholders’ Equity - for the three months ended March 31, 20192020 and 20182019
8
Consolidated Statements of Cash Flows - for the three months ended March 31, 20192020 and 20182019
10
  
FINANCIAL STATEMENTS OF TANGER PROPERTIES LIMITED PARTNERSHIP (Unaudited)
 
Consolidated Balance Sheets - as of March 31, 20192020 and December 31, 20182019
11
Consolidated Statements of Operations - for the three months ended March 31, 20192020 and 20182019
12
Consolidated Statements of Comprehensive Income - for the three months ended March 31, 20192020 and 20182019
13
Consolidated Statements of Equity - for the three months ended March 31, 20192020 and 20182019
14
Consolidated Statements of Cash Flows - for the three months ended March 31, 20192020 and 20182019
15
  
Condensed Notes to Consolidated Financial Statements of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership
16
  
Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
3836
  
Item 3. Quantitative and Qualitative Disclosures about Market Risk
5360
  
Item 4. Controls and Procedures (Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership)
5562
 
Part II. Other Information
  
Item 1. Legal Proceedings
5663
  
Item 1A. Risk Factors
5663
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
56
  
Item 6. Exhibits
5765
  
Signatures
5866




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)
 March 31, 2019 December 31, 2018 March 31, 2020 December 31, 2019
Assets  
  
  
  
Rental property:  
  
  
  
Land $267,910
 $278,428
 $266,537
 $266,537
Buildings, improvements and fixtures 2,639,764
 2,764,649
 2,564,224
 2,630,357
Construction in progress —
 3,102
 2,907,674
 3,046,179
 2,830,761
 2,896,894
Accumulated depreciation (941,193) (981,305) (1,007,922) (1,009,951)
Total rental property, net 1,966,481
 2,064,874
 1,822,839
 1,886,943
Cash and cash equivalents 1,616
 9,083
 600,454
 16,672
Investments in unconsolidated joint ventures 97,654
 95,969
 86,478
 94,691
Deferred lease costs and other intangibles, net 106,170
 116,874
 97,560
 96,712
Operating lease right-of-use assets 87,679
 —
 83,764
 86,575
Prepaids and other assets 94,224
 98,102
 100,674
 103,618
Total assets $2,353,824
 $2,384,902
 $2,791,769
 $2,285,211
Liabilities and Equity        
Liabilities  
  
  
  
Debt:  
  
  
  
Senior, unsecured notes, net $1,137,145
 $1,136,663
 $1,139,093
 $1,138,603
Unsecured term loan, net 346,950
 346,799
 347,531
 347,367
Mortgages payable, net 86,572
 87,471
 82,856
 83,803
Unsecured lines of credit, net 12,117
 141,985
 598,074
 —
Total debt 1,582,784
 1,712,918
 2,167,554
 1,569,773
Accounts payable and accrued expenses 87,536
 82,676
 90,659
 79,562
Operating lease liabilities 92,354
 —
 91,017
 91,237
Other liabilities 87,707
 83,773
 94,881
 88,530
Total liabilities 1,850,381
 1,879,367
 2,444,111
 1,829,102
Commitments and contingencies 

 

 


 


Equity  
  
  
  
Tanger Factory Outlet Centers, Inc.:  
  
  
  
Common shares, $.01 par value, 300,000,000 shares authorized, 94,102,666 and 93,941,783 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively 941
 939
Common shares, $.01 par value, 300,000,000 shares authorized, 93,076,701 and 92,892,260 shares issued and outstanding at March 31, 2020 and December 31 2019, respectively 931
 929
Paid in capital 780,936
 778,845
 778,062
 775,035
Accumulated distributions in excess of net income  (276,491) (272,454) (410,532) (317,263)
Accumulated other comprehensive loss (27,153) (27,151) (38,228) (25,495)
Equity attributable to Tanger Factory Outlet Centers, Inc. 478,233
 480,179
 330,233
 433,206
Equity attributable to noncontrolling interests:        
Noncontrolling interests in Operating Partnership 25,210
 25,356
 17,425
 22,903
Noncontrolling interests in other consolidated partnerships —
 —
 —
 —
Total equity 503,443
 505,535
 347,658
 456,109
Total liabilities and equity $2,353,824
 $2,384,902
 $2,791,769
 $2,285,211


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 March 31, Three months ended March 31,
 2019 2018 2020 2019
Revenues:  
    
  
Rental revenues $119,954
 $120,656
 $108,558
 $119,954
Management, leasing and other services 1,342
 1,199
 1,443
 1,342
Other revenues 1,859
 1,680
 1,632
 1,859
Total revenues 123,155
 123,535
 111,633
 123,155
Expenses:    
    
Property operating 42,377
 42,218
 38,627
 42,377
General and administrative 12,145
 11,112
 12,584
 12,145
Impairment charge 45,675
 —
Depreciation and amortization 31,760
 33,123
 29,417
 31,760
Total expenses 86,282
 86,453
 126,303
 86,282
Other income (expense):        
Interest expense (16,307) (15,800) (15,196) (16,307)
Gain on sale of assets 43,422
 —
 —
 43,422
Other income 224
 209
 220
 224
Total other income (expense) 27,339
 (15,591) (14,976) 27,339
Income before equity in earnings of unconsolidated joint ventures 64,212
 21,491
Income (loss) before equity in earnings of unconsolidated joint ventures (29,646) 64,212
Equity in earnings of unconsolidated joint ventures 1,629
 2,194
 1,527
 1,629
Net income 65,841

23,685
Net income (loss) (28,119)
65,841
Noncontrolling interests in Operating Partnership (3,315) (1,217) 1,427
 (3,315)
Noncontrolling interests in other consolidated partnerships (195) 370
 (190) (195)
Net income attributable to Tanger Factory Outlet Centers, Inc. $62,331

$22,838
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(26,882)
$62,331
        
Basic earnings per common share:        
Net income $0.66
 $0.24
Net income (loss) $(0.30) $0.66
Diluted earnings per common share:        
Net income $0.66
 $0.24
Net income (loss) $(0.30) $0.66
        
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 March 31,
  2019 2018
Net income $65,841
 $23,685
Other comprehensive income (loss):    
Foreign currency translation adjustments 1,949
 (3,095)
Change in fair value of cash flow hedges (1,952) 2,739
Other comprehensive loss (3) (356)
Comprehensive income 65,838
 23,329
Comprehensive income attributable to noncontrolling interests (3,509) (829)
Comprehensive income attributable to Tanger Factory Outlet Centers, Inc. $62,329
 $22,500
  Three months ended March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Other comprehensive income (loss):    
Foreign currency translation adjustments (7,733) 1,949
Change in fair value of cash flow hedges (5,676) (1,952)
Other comprehensive income (loss) (13,409) (3)
Comprehensive income (loss) (41,528) 65,838
Comprehensive (income) loss attributable to noncontrolling interests 1,913
 (3,509)
Comprehensive income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(39,615) $62,329
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 sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
 equity
Balance,
December 31, 2017
 $946
$784,782
$(184,865)$(19,285)$581,578
$30,724
$—
$612,302
Net income —
—
22,838
—
22,838
1,217
(370)23,685
Other comprehensive loss —
—
—
(338)(338)(18)—
(356)
Compensation under Incentive Award Plan —
3,656
—
—
3,656
—
—
3,656
Grant of 355,184 restricted common share awards, net of forfeitures 3
(3)—
—
—
—
—
—
Repurchase of 443,700 common shares, including transaction costs (4)(9,994)—
—
(9,998)—
—
(9,998)
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 —
379
—
—
379
(379)—
—
Common dividends
($0.3425 per share)
 —
—
(32,389)—
(32,389)—
—
(32,389)
Distributions to noncontrolling interests —
—
—
—
—
(1,711)(75)(1,786)
Balance, March 31, 2018 $944
$776,753
$(194,416)$(19,623)$563,658
$29,833
$—
$593,491
          
The accompanying notes are an integral part of these consolidated financial statements.
          
  










  







          
          
          


TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share and per share data, unaudited)
 Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
 equity
 Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
equity
Balance, December 31, 2018 $939
$778,845
$(272,454)$(27,151)$480,179
$25,356
$—
$505,535
 $939
$778,845
$(272,454)$(27,151)$480,179
$25,356
$—
$505,535
Net income —
—
62,331
—
62,331
3,315
195
65,841
 —
—
62,331
—
62,331
3,315
195
65,841
Other comprehensive loss —
—
—
(2)(2)(1)—
(3) —
—
—
(2)(2)(1)—
(3)
Compensation under Incentive Award Plan —
3,910
—
—
3,910
—
—
3,910
 —
3,910
—
—
3,910
—
—
3,910
Grant of 242,167 restricted common share awards, net of forfeitures 3
(3)—
—
—
—
—
—
 3
(3)—
—
—
—
—
—
Withholding of
81,284 common shares for employee income taxes		 (1)(1,780)—
—
(1,781)—
—
(1,781) (1)(1,780)—
—
(1,781)—
—
(1,781)
Contributions from noncontrolling interests —
—
—
—
—
—
18
18
 —
—
—
—
—
—
18
18
Adjustment for noncontrolling interests in Operating Partnership —
(36)—
—
(36)36
—
—
 —
(36)—
—
(36)36
—
—
Common dividends
($0.705 per share) (1)
 —
—
(66,368)—
(66,368)—
—
(66,368) —
—
(66,368)—
(66,368)—
—
(66,368)
Distributions to noncontrolling interests —
—
—
—
—
(3,496)(213)(3,709) —
—
—
—
—
(3,496)(213)(3,709)
Balance, March 31, 2019 $941
$780,936
$(276,491)$(27,153)$478,233
$25,210
$—
$503,443
 $941
$780,936
$(276,491)$(27,153)$478,233
$25,210
$—
$503,443
  
(1)Includes both a $0.35 cash dividend per common share declared and paid during the first quarter of 2019 and a cash dividend declared in February 2019 payable in May 2019 of $0.355 per common share.




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








TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share and per share data, unaudited)
  Common sharesPaid in capitalAccumulated distributions in excess of earningsAccumulated other comprehensive lossEquity attributable to Tanger Factory Outlet Centers, Inc.Noncontrolling interests in Operating Partnership
Noncontrolling
interests in
other consolidated partnerships
Total
 equity
Balance, December 31, 2019 $929
$775,035
$(317,263)$(25,495)$433,206
$22,903
$—
$456,109
Net income (loss) —
—
(26,882)—
(26,882)(1,427)190
(28,119)
Other comprehensive loss —
—
—
(12,733)(12,733)(676)—
(13,409)
Compensation under Incentive Award Plan —
3,889
—
—
3,889
—
—
3,889
Grant of 241,038 restricted common share awards, net of forfeitures 2
(2)—
—
—
—
—
—
Withholding of
56,597 common shares for employee income taxes		 —
(736)—
—
(736)—
—
(736)
Contributions from noncontrolling interests —
—
—
—
—
—
72
72
Adjustment for noncontrolling interests in Operating Partnership —
(124)—
—
(124)124
—
—
Common dividends
($0.7125 per share) (1)
 —
—
(66,387)—
(66,387)—
—
(66,387)
Distributions to noncontrolling interests —
—
—
—
—
(3,499)(262)(3,761)
Balance, March 31, 2020 $931
$778,062
$(410,532)$(38,228)$330,233
$17,425
$—
$347,658


(1)Includes both a $0.355 cash dividend per common share declared and paid during the first quarter of 2020 and a cash dividend declared in January 2020 payable in May 2020 of $0.3575 per common share.




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)
 Three months ended March 31, Three months ended March 31,
 2019 2018 2020 2019
OPERATING ACTIVITIES    
    
Net income $65,841
 $23,685
Net income (loss) $(28,119) $65,841
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 31,760
 33,123
 29,417
 31,760
Impairment charge 45,675
 —
Amortization of deferred financing costs 747
 783
 757
 747
Gain on sale of assets (43,422) —
 —
 (43,422)
Equity in earnings of unconsolidated joint ventures (1,629) (2,194) (1,527) (1,629)
Equity-based compensation expense 3,818
 3,392
 3,789
 3,818
Amortization of debt (premiums) and discounts, net 109
 101
 118
 109
Amortization (accretion) of market rent rate adjustments, net 480
 562
 362
 480
Straight-line rent adjustments (1,970) (1,948) (1,872) (1,970)
Distributions of cumulative earnings from unconsolidated joint ventures 1,455
 2,198
 1,517
 1,455
Changes in other assets and liabilities:        
Other assets 873
 1,714
 2,210
 873
Accounts payable and accrued expenses (24,894) (11,412) (25,045) (24,894)
Net cash provided by operating activities 33,168
 50,004
 27,282
 33,168
INVESTING ACTIVITIES        
Additions to rental property (9,906) (19,714) (10,551) (9,906)
Additions to investments in unconsolidated joint ventures (779) (514) (261) (779)
Net proceeds from sale of assets 128,248
 —
 —
 128,248
Additions to non-real estate assets (174) (303) (677) (174)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 8,157
 4,494
 3,488
 8,157
Additions to deferred lease costs (1,209) (1,014) (1,220) (1,209)
Other investing activities 2,936
 2,969
 2,844
 2,936
Net cash provided by (used) in investing activities 127,273
 (14,082) (6,377) 127,273
FINANCING ACTIVITIES        
Cash dividends paid (32,910) (32,389) (33,034) (32,910)
Distributions to noncontrolling interests in Operating Partnership (1,735) (1,711) (1,744) (1,735)
Proceeds from revolving credit facility 135,200
 149,200
 634,030
 135,200
Repayments of revolving credit facility (265,300) (129,700) (34,200) (265,300)
Repayments of notes, mortgages and loans (825) (9,379) (873) (825)
Repurchase of common shares, including transaction costs —
 (9,998)
Employee income taxes paid related to shares withheld upon vesting of equity awards (1,781) (2,068) (736) (1,781)
Additions to deferred financing costs (65) (2,606) (65) (65)
Proceeds from other financing activities 18
 445
 72
 18
Payment for other financing activities (500) (362) (549) (500)
Net cash used in financing activities (167,898) (38,568)
Net cash provided by (used) in financing activities 562,901
 (167,898)
Effect of foreign currency rate changes on cash and cash equivalents (10) (28) (24) (10)
Net decrease in cash and cash equivalents (7,467) (2,674)
Net increase (decrease) in cash and cash equivalents 583,782
 (7,467)
Cash and cash equivalents, beginning of period 9,083
 6,101
 16,672
 9,083
Cash and cash equivalents, end of period $1,616
 $3,427
 $600,454
 $1,616
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)
 March 31, 2019 December 31, 2018 March 31, 2020 December 31, 2019
Assets  
  
  
  
Rental property:  
  
  
  
Land $267,910
 $278,428
 $266,537
 $266,537
Buildings, improvements and fixtures 2,639,764
 2,764,649
 2,564,224
 2,630,357
Construction in progress —
 3,102
 2,907,674
 3,046,179
 2,830,761
 2,896,894
Accumulated depreciation (941,193) (981,305) (1,007,922) (1,009,951)
Total rental property, net 1,966,481
 2,064,874
 1,822,839
 1,886,943
Cash and cash equivalents 1,570
 8,991
 600,359
 16,519
Investments in unconsolidated joint ventures 97,654
 95,969
 86,478
 94,691
Deferred lease costs and other intangibles, net 106,170
 116,874
 97,560
 96,712
Operating lease right-of-use assets 87,679
 —
 83,764
 86,575
Prepaids and other assets 93,826
 97,832
 100,088
 103,374
Total assets $2,353,380
 $2,384,540
 $2,791,088
 $2,284,814
Liabilities and Equity 
   
  
Liabilities        
Debt:        
Senior, unsecured notes, net $1,137,145
 $1,136,663
 $1,139,093
 $1,138,603
Unsecured term loan, net 346,950
 346,799
 347,531
 347,367
Mortgages payable, net 86,572
 87,471
 82,856
 83,803
Unsecured lines of credit, net 12,117
 141,985
 598,074
 —
Total debt 1,582,784
 1,712,918
 2,167,554
 1,569,773
Accounts payable and accrued expenses 87,092
 82,314
 89,978
 79,165
Operating lease liabilities 92,354
 —
 91,017
 91,237
Other liabilities 87,707
 83,773
 94,881
 88,530
Total liabilities 1,849,937
 1,879,005
 2,443,430
 1,828,705
Commitments and contingencies 

 

 


 


Equity        
Partners' Equity:    
General partner, 1,000,000 units outstanding at March 31, 2019 and December 31, 2018 5,227
 4,914
Limited partners, 4,960,684 and 4,960,684 Class A common units, and 93,102,666 and 92,941,783 Class B common units outstanding at March 31, 2019 and December 31, 2018, respectively 526,850
 529,252
Partners’ Equity:    
General partner, 1,000,000 units outstanding at March 31, 2020 and December 31, 2019 3,433
 4,435
Limited partners, 4,911,173 and 4,911,173 Class A common units, and 92,076,701 and 91,892,260 Class B common units outstanding at March 31, 2020 and December 31, 2019, respectively 384,522
 478,562
Accumulated other comprehensive loss (28,634) (28,631) (40,297) (26,888)
Total partners' equity 503,443
 505,535
Total partners’ equity 347,658
 456,109
Noncontrolling interests in consolidated partnerships —
 —
 —
 —
Total equity 503,443
 505,535
 347,658
 456,109
Total liabilities and equity $2,353,380
 $2,384,540
 $2,791,088
 $2,284,814
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 March 31, Three months ended March 31,
 2019 2018 2020 2019
Revenues:  
    
  
Rental revenues $119,954
 $120,656
 $108,558
 $119,954
Management, leasing and other services 1,342
 1,199
 1,443
 1,342
Other revenues 1,859
 1,680
 1,632
 1,859
Total revenues
123,155

123,535

111,633

123,155
Expenses:        
Property operating 42,377
 42,218
 38,627
 42,377
General and administrative 12,145
 11,112
 12,584
 12,145
Impairment charge 45,675
 —
Depreciation and amortization 31,760
 33,123
 29,417
 31,760
Total expenses
86,282

86,453

126,303

86,282
Other income (expense):        
Interest expense (16,307) (15,800) (15,196) (16,307)
Gain on sale of assets 43,422
 —
 —
 43,422
Other income 224
 209
 220
 224
Total other income (expense) 27,339
 (15,591) (14,976) 27,339
Income before equity in earnings of unconsolidated joint ventures
64,212

21,491
Income (loss) before equity in earnings of unconsolidated joint ventures
(29,646)
64,212
Equity in earnings of unconsolidated joint ventures 1,629
 2,194
 1,527
 1,629
Net income
65,841

23,685
Net income (loss)
(28,119)
65,841
Noncontrolling interests in consolidated partnerships (195) 370
 (190) (195)
Net income available to partners
65,646

24,055
Net income available to limited partners 64,983
 23,814
Net income available to general partner
$663

$241
Net income (loss) available to partners
(28,309)
65,646
Net income (loss) available to limited partners (28,020) 64,983
Net income (loss) available to general partner
$(289)
$663
        
Basic earnings per common unit:    
    
Net income $0.66
 $0.24
Net income (loss) $(0.30) $0.66
Diluted earnings per common unit:        
Net income $0.66
 $0.24
Net income (loss) $(0.30) $0.66
        
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 March 31,
  2019 2018
Net income $65,841
 $23,685
Other comprehensive income (loss):    
Foreign currency translation adjustments 1,949
 (3,095)
Changes in fair value of cash flow hedges (1,952) 2,739
Other comprehensive loss (3) (356)
Comprehensive income 65,838
 23,329
Comprehensive income (loss) attributable to noncontrolling interests in consolidated partnerships (195) 370
Comprehensive income attributable to the Operating Partnership $65,643
 $23,699
  Three months ended March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Other comprehensive income (loss):    
Foreign currency translation adjustments (7,733) 1,949
Changes in fair value of cash flow hedges (5,676) (1,952)
Other comprehensive income (loss) (13,409) (3)
Comprehensive income (loss) (41,528) 65,838
Comprehensive (income) loss attributable to noncontrolling interests in consolidated partnerships (190) (195)
Comprehensive income (loss) attributable to the Operating Partnership $(41,718) $65,643
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 partnerLimited partnersAccumulated other comprehensive lossTotal partners' equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2017 $5,844
$626,803
$(20,345)$612,302
$—
$612,302
Net income 241
23,814
—
24,055
(370)23,685
Other comprehensive loss —
—
(356)(356)—
(356)
Compensation under Incentive Award Plan —
3,656
—
3,656
—
3,656
Grant of 355,184 restricted common share awards by the Company, net of forfeitures —
—
—
—
—
—
Repurchase of 443,700 units, including transaction costs —
(9,998)—
(9,998)—
(9,998)
Withholding of 89,437 common units for employee income taxes —
(2,068)—
(2,068)—
(2,068)
Contributions from noncontrolling interests —
—
—
—
445
445
Common distributions ($0.3425 per common unit) (342)(33,758)—
(34,100)—
(34,100)
Distributions to noncontrolling interests —
—
—
—
(75)(75)
Balance, March 31, 2018 $5,743
$608,449
$(20,701)$593,491
$—
$593,491
  
 General partnerLimited partnersAccumulated other comprehensive lossTotal partners' equityNoncontrolling interests in consolidated partnershipsTotal equity General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2018 $4,914
$529,252
$(28,631)$505,535
$—
$505,535
 $4,914
$529,252
$(28,631)$505,535
$—
$505,535
Net income 663
64,983
—
65,646
195
65,841
 663
64,983
—
65,646
195
65,841
Other comprehensive loss —
—
(3)(3)—
(3) —
—
(3)(3)—
(3)
Compensation under Incentive Award Plan —
3,910
—
3,910
—
3,910
 —
3,910
—
3,910
—
3,910
Grant of 242,167 restricted common share awards by the Company —
—
—
—
—
—
 —
—
—
—
—
—
Withholding of 81,284 common units for employee income taxes —
(1,781)—
(1,781)—
(1,781) —
(1,781)—
(1,781)—
(1,781)
Contributions from noncontrolling interests —
—
—
—
18
18
 —
—
—
—
18
18
Common distributions ($0.705
per common unit) (1)
 (350)(69,514)—
(69,864)—
(69,864) (350)(69,514)—
(69,864)—
(69,864)
Distributions to noncontrolling interests —
—
—
—
(213)(213) —
—
—
—
(213)(213)
Balance, March 31, 2019 $5,227
$526,850
$(28,634)$503,443
$—
$503,443
 $5,227
$526,850
$(28,634)$503,443
$—
$503,443
    
(1)Includes both a $0.35 cash dividend per common unit declared and paid during the first quarter of 2019 and a cash dividend declared in February 2019 payable in May 2019 of $0.3550.355 per common unit.


TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except unit and per unit data, unaudited)

  General partnerLimited partnersAccumulated other comprehensive lossTotal partners’ equityNoncontrolling interests in consolidated partnershipsTotal equity
Balance, December 31, 2019 $4,435
$478,562
$(26,888)$456,109
$—
$456,109
Net income (loss) (289)(28,020)—
(28,309)190
(28,119)
Other comprehensive loss —
—
(13,409)(13,409)—
(13,409)
Compensation under Incentive Award Plan —
3,889
—
3,889
—
3,889
Grant of 241,038 restricted common share awards by the Company —
—
—
—
—
—
Withholding of 56,597 common units for employee income taxes —
(736)—
(736)—
(736)
Contributions from noncontrolling interests —
—
—
—
72
72
Common distributions ($0.7125
 per common unit) (1)
 (713)(69,173)—
(69,886)—
(69,886)
Distributions to noncontrolling interests —
—
—
—
(262)(262)
Balance, March 31, 2020 $3,433
$384,522
$(40,297)$347,658
$—
$347,658


(1)Includes both a $0.355 cash dividend per common unit declared and paid during the first quarter of 2020 and a cash dividend declared in January 2020 payable in May 2020 of $0.3575 per common unit.

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)
 Three months ended March 31, Three months ended March 31,
 2019 2018 2020 2019
OPERATING ACTIVITIES  
  
  
  
Net income $65,841
 $23,685
Net income (loss) $(28,119) $65,841
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 31,760
 33,123
 29,417
 31,760
Impairment charge 45,675
 —
Amortization of deferred financing costs 747
 783
 757
 747
Gain on sale of assets (43,422) —
 —
 (43,422)
Equity in earnings of unconsolidated joint ventures (1,629) (2,194) (1,527) (1,629)
Equity-based compensation expense 3,818
 3,392
 3,789
 3,818
Amortization of debt (premiums) and discounts, net 109
 101
 118
 109
Amortization (accretion) of market rent rate adjustments, net 480
 562
 362
 480
Straight-line rent adjustments (1,970) (1,948) (1,872) (1,970)
Distributions of cumulative earnings from unconsolidated joint ventures 1,455
 2,198
 1,517
 1,455
Changes in other assets and liabilities:        
Other assets 1,001
 1,903
 2,552
 1,001
Accounts payable and accrued expenses (24,976) (11,639) (25,329) (24,976)
Net cash provided by operating activities 33,214
 49,966
 27,340
 33,214
INVESTING ACTIVITIES        
Additions to rental property (9,906) (19,714) (10,551) (9,906)
Additions to investments in unconsolidated joint ventures (779) (514) (261) (779)
Net proceeds from sale of assets 128,248
 —
 —
 128,248
Additions to non-real estate assets (174) (303) (677) (174)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 8,157
 4,494
 3,488
 8,157
Additions to deferred lease costs (1,209) (1,014) (1,220) (1,209)
Other investing activities 2,936
 2,969
 2,844
 2,936
Net cash provided by (used) in investing activities 127,273
 (14,082) (6,377) 127,273
FINANCING ACTIVITIES        
Cash distributions paid (34,645) (34,100) (34,778) (34,645)
Proceeds from revolving credit facility 135,200
 149,200
 634,030
 135,200
Repayments of revolving credit facility (265,300) (129,700) (34,200) (265,300)
Repayments of notes, mortgages and loans (825) (9,379) (873) (825)
Repurchase of units, including transaction costs —
 (9,998)
Employee income taxes paid related to shares withheld upon vesting of equity awards (1,781) (2,068) (736) (1,781)
Additions to deferred financing costs (65) (2,606) (65) (65)
Proceeds from other financing activities 18
 445
 72
 18
Payment for other financing activities (500) (362) (549) (500)
Net cash used in financing activities (167,898) (38,568)
Net cash provided by (used) in financing activities 562,901
 (167,898)
Effect of foreign currency on cash and cash equivalents (10) (28) (24) (10)
Net decrease in cash and cash equivalents (7,421) (2,712)
Net increase (decrease) in cash and cash equivalents 583,840
 (7,421)
Cash and cash equivalents, beginning of period 8,991
 6,050
 16,519
 8,991
Cash and cash equivalents, end of period $1,570
 $3,338
 $600,359
 $1,570
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 March 31, 2019,2020, we owned and operated 32 consolidated outlet centers, with a total gross leasable area of approximately 12.0 million square feet. We also had partial ownership interests in 87 unconsolidated outlet centers totaling approximately 2.42.2 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 two2 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 March 31, 2019,2020, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned 94,102,66693,076,701 units of the Operating Partnership and other limited partners (the "Non-Company LPs"“Non-Company LPs”) collectively owned 4,960,6844,911,173 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one1 of the Company'sCompany’s common shares, subject to certain limitations to preserve the Company'sCompany’s REIT status. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.


2. Summary of Significant Accounting Policies
Basis of Presentation

The unaudited consolidated financial statements included herein have been prepared pursuant to accounting principles generally accepted in the United States of America and should be read in conjunction with the consolidated financial statements and notes thereto of the Company'sCompany’s and the Operating Partnership'sPartnership’s combined Annual Report on Form 10-K for the year ended December 31, 2018.2019. The December 31, 20182019 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'sSEC’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.


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.






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'sentity’s economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Our determination of the primary beneficiary considers all relationships between us and the VIE, including management agreements and other contractual arrangements.


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


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


We separately report investments in joint ventures for which accumulated distributions have exceeded investments in, and our share of net income or loss of, the joint ventures within other liabilities in the consolidated balance sheets because we are committed to provide further financial support to these joint ventures. The carrying amount of our investments in the Charlotte, Columbus, Galveston/Houston, and ColumbusNational 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'sLP’s percentage ownership of the Operating Partnership'sPartnership’s units. "Noncontrolling“Noncontrolling interests in other consolidated partnerships"partnerships” consist of outside equity interests in partnerships or joint ventures not wholly-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.



Impairment of Long-Lived Assets



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



During the first quarter of 2020, we determined that the estimated future undiscounted cash flows of our Foxwoods outlet center, Mashantucket, Connecticut did not exceed the property's carrying value due to a decline in forecasted operating results. Therefore, we recorded a $45.7 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.

If the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate or if our expected holding periods for assets change, subsequent tests for impairment could result in additional impairment charges in the future. We can provide no assurance that material impairment charges with respect to our investment properties will not occur during the remaining quarters in 2020 or future periods.





3. COVID-19 Pandemic

The current novel coronavirus (“COVID-19”) pandemic has had, and likely will continue to have, repercussions across local, national and global economies and financial markets. COVID-19 has impacted all states where our tenants operate their businesses or where our properties are located and measures taken to prevent or remediate COVID-19, including “shelter-in place” or “stay-at-home” orders or other quarantine mandates issued by local, state or federal authorities, have had an adverse effect on our business and the businesses of our tenants. The full extent of the adverse impact on, among other things, our results of operations, liquidity (including our ability to access capital markets), the possibility of future impairments of long-lived assets or our investments in unconsolidated joint ventures, our compliance with debt covenants, our ability to renew and re-lease our leased space, the outlook for the retail environment, potential bankruptcies or other store closings and our ability to develop, acquire, dispose or lease properties for our portfolio, is unknown and will depend on future developments, which are highly uncertain and cannot be predicted. Our results of operations, liquidity and cash flows could be materially affected.

While our outlet centers have remained open, retailers began closing their stores in our outlet centers in mid-March and by April 6, 2020, substantially all of the stores in our portfolio were closed as a result of mandates by order of local and state authorities. It remains unclear when mandates will be lifted completely or eased in additional locations.

A number of our tenants have requested rent deferrals, rent abatements or other types of rent relief during this pandemic. As a response, in late March 2020, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021. The extent of tenant requests and actions and the impact to our results of operations and cash flows is uncertain and cannot be predicted at this time.

Also in March 2020, to increase liquidity, preserve financial flexibility and help ensure that we are able to meet our obligations for a sustained period of time until there is more clarity regarding the impact of the pandemic, we drew down substantially all of the available capacity under our $600.0 million unsecured lines of credit. We have also taken steps to reduce future cash outflows, including the reduction or deferral of certain operating and general and administrative expenses, as well as the deferral of the Nashville project and certain other planned capital expenditures. We intend to pay the dividend that was declared in January as scheduled on May 15, 2020. Going forward, given the current uncertainty related to the pandemic’s near and potential long-term impact, the Company’s Board of Directors will temporarily suspend dividend distributions to conserve approximately $35.0 million in cash per quarter and preserve our balance sheet strength and flexibility. The Board will continue to evaluate the potential for future dividend distributions on a quarterly basis. We expect to remain in compliance with REIT taxable income distribution requirements for the 2020 tax year.

4. Disposition of Properties


Disposition of Properties

During the three months ended March 31, 2019, the Companywe closed on the sale of four4 non-core outlet centers for total gross proceeds of $130.5 million.


The following table sets forth certain summarized information regarding the properties and land outparcels sold during the three months ended March 31, 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)
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


The rental properties sold did not meet the criteria to be reported as discontinued operations.


4.


5. Investments in Unconsolidated Real Estate Joint Ventures
The equity method of accounting is used to account for each of the individual joint ventures. We have an ownership interest in the following unconsolidated real estate joint ventures:


As of March 31, 2020
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% 765
 $86.5
 $8.3
      $86.5
 

Investments included in other liabilities:    
Columbus(2)
 Columbus, OH 50.0% 355
 $(4.0) $85.0
Charlotte(2)
 Charlotte, NC 50.0% 399
 (13.5) 99.5
National Harbor(2)
 National Harbor, MD 50.0% 341
 (7.3) 94.5
Galveston/Houston (2)
 Texas City, TX 50.0% 353
 (19.8) 79.9
      $(44.6) 



As of March 31, 2019
As of December 31, 2019As of December 31, 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)
 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:    
RioCan Canada Various 50.0% 924
 $97.7
 $9.5
 Various 50.0% 764
 $94.7
 $9.2
     $97.7
 

      $94.7
  
Investments included in other liabilities:Investments included in other liabilities:    Investments included in other liabilities:      
Columbus(2)
 Columbus, OH 50.0% 355
 $(2.6) $84.8
 Columbus, OH 50.0% 355
 $(3.5) $85.0
Charlotte(2)
 Charlotte, NC 50.0% 399
 (11.2) 99.5
 Charlotte, NC 50.0% 399
 (13.0) 99.5
National Harbor(2)
 National Harbor, MD 50.0% 341
 (5.0) 94.4
 National Harbor, MD 50.0% 341
 (5.9) 94.4
Galveston/Houston (2)
 Texas City, TX 50.0% 353
 (20.6) 79.7
 Texas City, TX 50.0% 353
 (19.7) 79.9
     $(39.4) 

      $(42.1) 




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)
Investments included in investments in unconsolidated joint ventures:    
RioCan Canada Various 50.0% 924
 $96.0
 $9.3
      $96.0
  
Investments included in other liabilities:      
Columbus (2)
 Columbus, OH 50.0% 355
 $(1.6) $84.7
Charlotte(2)
 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
 (15.0) 79.6
      $(32.5) 



(1)Net of debt origination costs and including premiums of $1.4$1.1 million as offor both periods ended March 31, 20192020 and December 31, 2018.2019.
(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
 
March 31,
 
2020
2019
Fee:  
  
Management and marketing $541
 $566
Leasing and other fees 20
 31
Expense reimbursements from unconsolidated joint ventures 882
 745
Total Fees $1,443
 $1,342

 
Three months ended
 
March 31,
 
2019
2018
Fee:  
  
Management and marketing $566
 $567
Leasing and other fees 31
 46
Expense reimbursements from unconsolidated joint ventures 745

586
Total Fees $1,342
 $1,199

Expense reimbursements from unconsolidated joint ventures were previously included in expense reimbursements in our 2018 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 $4.0 million and $4.1$3.8 million as of both March 31, 20192020 and December 31, 2018, respectively)2019) are amortized over the various useful lives of the related assets.






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 March 31, 2020 December 31, 2019
Assets  
  
Land $87,015
 $90,859
Buildings, improvements and fixtures 463,656
 477,061
Construction in progress 4,286
 4,779
  554,957
 572,699
Accumulated depreciation (133,948) (132,860)
Total rental property, net 421,009
 439,839
Cash and cash equivalents 12,653
 19,750
Deferred lease costs and other intangibles, net 6,331
 6,772
Prepaids and other assets 15,947
 17,789
Total assets $455,940
 $484,150
Liabilities and Owners’ Equity  
  
Mortgages payable, net $367,171
 $368,032
Accounts payable and other liabilities 13,252
 17,173
Total liabilities 380,423
 385,205
Owners’ equity 75,517
 98,945
Total liabilities and owners’ equity $455,940
 $484,150




Condensed Combined Balance Sheets - Unconsolidated Joint Ventures March 31, 2019 December 31, 2018
Assets  
  
Land $92,440
 $91,443
Buildings, improvements and fixtures 474,981
 469,834
Construction in progress 3,455
 2,841
  570,876
 564,118
Accumulated depreciation (119,996) (113,713)
Total rental property, net 450,880
 450,405
Cash and cash equivalents 11,744
 16,216
Deferred lease costs and other intangibles, net 8,098
 8,437
Prepaids and other assets 15,963
 25,648
Total assets $486,685
 $500,706
Liabilities and Owners' Equity  
  
Mortgages payable, net $367,933
 $367,865
Accounts payable and other liabilities 11,933
 13,414
Total liabilities 379,866
 381,279
Owners' equity 106,819
 119,427
Total liabilities and owners' equity $486,685
 $500,706



  Three months ended
Condensed Combined Statements of Operations March 31,
 - Unconsolidated Joint Ventures 2020 2019
Revenues $22,036
 $23,463
Expenses:  
  
Property operating 9,129
 9,790
General and administrative 139
 90
Depreciation and amortization 5,906
 6,110
Total expenses 15,174
 15,990
Other income (expense): 

 

Interest expense (3,735) (4,134)
Other income 56
 66
Total other income (expense) $(3,679) $(4,068)
Net income $3,183
 $3,405
The Company and Operating Partnership’s share of:  
  
Net income $1,527
 $1,629
Depreciation and amortization (real estate related) $3,018
 $3,130

  Three months ended
Condensed Combined Statements of Operations March 31,
 - Unconsolidated Joint Ventures 2019 2018
Revenues $23,463
 $23,997
Expenses:  
  
Property operating 9,790
 9,928
General and administrative 90
 198
Depreciation and amortization 6,110
 6,363
Total expenses 15,990
 16,489
Other income (expense): 

 

Interest expense (4,134) (3,077)
Other income 66
 52
Total other income (expense) $(4,068) $(3,025)
Net income $3,405
 $4,483
The Company and Operating Partnership's share of: 
  
Net income $1,629
 $2,194
Depreciation and amortization (real estate related) $3,130
 $3,229



5.6. Debt Guaranteed by the Company


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


The Company guarantees the Operating Partnership'sPartnership’s obligations with respect to its unsecured lines of credit which have a total borrowing capacity of $600.0 million. The Company also guarantees the Operating Partnership'sPartnership’s unsecured term loan.


The Operating Partnership had the following principal amounts outstanding on the debt guaranteed by the Company (in thousands):
  As of
  March 31, 2020 December 31, 2019
Unsecured lines of credit $599,830
 $—
Unsecured term loan $350,000
 $350,000

  As of
  March 31, 2019 December 31, 2018
Unsecured lines of credit $15,000
 $145,100
Unsecured term loan $350,000
 $350,000


6.


7. 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
   March 31, 2019 December 31, 2018   March 31, 2020 December 31, 2019
 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
 $246,823
 $250,000
 $246,664
 3.875% December 2023 $250,000
 $247,471
 $250,000
 $247,308
Senior notes 3.750% December 2024 250,000
 247,855
 250,000
 247,765
 3.750% December 2024 250,000
 248,218
 250,000
 248,127
Senior notes 3.125% September 2026 350,000
 345,805
 350,000
 345,669
 3.125% September 2026 350,000
 346,354
 350,000
 346,215
Senior notes 3.875% July 2027 300,000
 296,662
 300,000
 296,565
 3.875% July 2027 300,000
 297,050
 300,000
 296,953
                    
Mortgages payable:                    
Atlantic City (2)(3)
 5.14%-7.65%
 November 2021- December 2026 33,454
 35,375
 34,279
 36,298
 5.14%-7.65% November 2021- December 2026 30,037
 31,559
 30,909
 32,531
Southaven LIBOR + 1.80%
 April 2021 51,400
 51,197
 51,400
 51,173
 LIBOR
+1.80% April 2021 51,400
 51,297
 51,400
 51,272
Unsecured term loan LIBOR + 0.90%
 April 2024 350,000
 346,950
 350,000
 346,799
 LIBOR
+1.00% April 2024 350,000
 347,531
 350,000
 347,367
Unsecured lines of credit LIBOR + 0.875%
 October 2021 15,000
 12,117
 145,100
 141,985
 LIBOR
+1.00% October 2021 599,830
 598,074
 —
 —
     $1,599,854
 $1,582,784
 $1,730,779
 $1,712,918
      $2,181,267
 $2,167,554
 $1,582,309
 $1,569,773
(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 $178.5$171.7 million at March 31, 2019,2020, 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 March 31, 2019,2020, letters of credit totaling approximately $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 March 31, 2019,2020, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $19.4$19.2 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 March 31, 2019,2020, we believe we were in compliance with all of our debt covenants.


Unsecured Lines of Credit
As of December 31, 2019, there were 0 outstanding balances under our unsecured lines of credit. In March 2020, in response to the COVID-19 pandemic, we drew down approximately $599.8 million under our unsecured lines of credit to increase liquidity and preserve financial flexibility to help ensure that the Company is able to meet its obligations for a sustained period of time until there is more clarity regarding the impact of the pandemic.
Interest rates

In February 2020, due to a change in our credit rating, our interest rate spread over LIBOR on our $600.0 million unsecured line of credit facility increased from 0.875% to 1.0% and our annual facility fee increased from 0.15% to 0.20%. In addition, our interest rate spread over LIBOR on our $350.0 million unsecured term loan increased from 0.90% to 1.0%.

Debt Maturities


Maturities of the existing long-term debt as of March 31, 20192020 for the next five years and thereafter are as follows (in thousands):
Calendar Year Amount
For the remainder of 2020 $2,694
2021 657,023
2022 4,436
2023 254,768
2024 605,140
Thereafter 657,206
Subtotal 2,181,267
Net discount and debt origination costs (13,713)
Total $2,167,554

Calendar Year Amount
For the remainder of 2019 $2,545
2020 3,566
2021 72,193
2022 4,436
2023 254,768
Thereafter 1,262,346
Subtotal 1,599,854
Net discount and debt origination costs (17,070)
Total $1,582,784
Given the financial implications of COVID-19 and potential defaults on our debt covenants associated with our line of credit and term loan, we have considered our short-term (one year or less from the date of filing these financial statements) liquidity needs and the adequacy of our estimated cash flows from operating activities and other financing sources to meet these needs. These other sources include but are not limited to: existing cash, ongoing relationships with certain financial institutions, our ability to sell debt or issue equity subject to market conditions and proceeds from the potential sale of non-core assets. We believe that we have access to the necessary financing to fund our short-term liquidity needs.
 



7.
8. Derivative Financial Instruments


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


           Fair Value
Effective Date Maturity Date Notional Amount Bank Pay Rate Company Fixed Pay Rate March 31, 2020 December 31, 2019
Assets (Liabilities)(1):
             
Interest rate swaps:             
April 13, 2016 January 1, 2021 175,000
 1 month LIBOR 1.03% $(890) $1,018
March 1, 2018 January 31, 2021 40,000
 1 month LIBOR 2.47% (708) (376)
August 14, 2018 January 1, 2021 150,000
 1 month LIBOR 2.20% (2,103) (896)
July 1, 2019 February 1, 2024 25,000
 1 month LIBOR 1.75% (1,301) (170)
January 1, 2021 February 1, 2024 150,000
 1 month LIBOR 0.60% (1,098) —
Total   $540,000
      $(6,100) $(424)
          Fair Value
Effective Date Maturity Date Notional Amount Bank Pay Rate Company Fixed Pay Rate March 31, 2019 December 31, 2018
Assets (Liabilities)(1):
            
April 13, 2016 January 1, 2021 175,000
 1 month LIBOR 1.03% $3,773
 $4,948
March 1, 2018 January 31, 2021 40,000
 1 month LIBOR 2.47% (156) (6)
August 14, 2018 January 1, 2021 150,000
 1 month LIBOR 2.20% 180
 807
Total   $365,000
     $3,797
 $5,749

(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.


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.


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 following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements (in thousands):
  Three months ended March 31,
  2020 2019
Interest Rate Swaps:    
Amount of gain (loss) recognized in other comprehensive income (loss) on derivative $(5,676) $(1,952)



  Three months ended March 31,
  2019 2018
Interest Rate Swaps (Effective Portion):    
Amount of gain (loss) recognized in OCI on derivative $(1,952) $2,739




8.9. Fair Value Measurements


Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
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  Total 
Fair value as of March 31, 2019:        
Asset:        
Interest rate swaps (prepaids and other assets) $3,953
 $—
 $3,953
 $—
Fair value as of March 31, 2020:        
Assets:        
Short-term government securities (cash and cash equivalents)
 $597,140
 $597,140
 $—
 $—
Total assets $3,953
 $—
 $3,953
 $—
 $597,140
 $597,140
 $—
 $—
                
Liabilities:                
Interest rate swaps (other liabilities) $156
 $—
 $156
 $—
 $6,100
 $—
 $6,100
 $—
Total liabilities $156
 $—
 $156
 $—
 $6,100
 $—
 $6,100
 $—


    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, 2019:        
Asset:        
Interest rate swaps (prepaids and other assets) $1,018
 $—
 $1,018
 $—
Total assets $1,018
 $—
 $1,018
 $—
         
Liabilities:        
Interest rate swaps (other liabilities) $1,442
 $—
 $1,442
 $—
Total liabilities $1,442
 $—
 $1,442
 $—







    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, 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
 $—


Short-term government securities

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

Interest rate swaps

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



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):
    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 March 31, 2020:        
Asset:        
Long-lived assets $60,000
 $—
 $—
 $60,000


During the first quarter 2020, we recorded a $45.7 million impairment charge in our consolidated statement of operations which equaled the excess of the carrying value of our Foxwoods outlet center over its estimated fair value. The estimated fair value was 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 were 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 7.8% and the discount rate used was 8.5%. These inputs are classified under Level 3 in the fair value hierarchy above. Should the significant assumptions utilized above to determine fair value continue to deteriorate, additional impairments in the future could be possible. 

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):
  March 31, 2020 December 31, 2019
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities $—
 $—
Level 2 Significant Observable Inputs 1,148,011
 1,169,481
Level 3 Significant Unobservable Inputs 1,033,159
 434,333
Total fair value of debt $2,181,170
 $1,603,814
     
Recorded value of debt $2,167,554
 $1,569,773



  March 31, 2019 December 31, 2018
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities $—
 $—
Level 2 Significant Observable Inputs 1,116,493
 1,085,138
Level 3 Significant Unobservable Inputs 452,278
 583,337
Total fair value of debt $1,568,771
 $1,668,475
     
Recorded value of debt $1,582,784
 $1,712,918


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'10. Shareholders’ Equity of the Company


Dividend Declaration


In January 2020, the Company's Board of Directors declared a $0.355 cash dividend per common which was paid during the first quarter of 2020 to each shareholder of record on January 31, 2020, and the Trustees of Tanger GP Trust declared a $0.355 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

Also in January 2020, the Company's Board of Directors declared a $0.3575 cash dividend per common share payable on May 15, 2020 to each shareholder of record on April 30, 2020, and the Trustees of Tanger GP Trust declared a $0.3575 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders. A liability in the amount of approximately $35.1 million was recorded in accounts payable and accrued expenses in the consolidated balance sheet as of March 31, 2020.

In January 2019, the Company's Board of Directors declared a $0.35 cash dividend per common which was paid during the first quarter of 2019, to each shareholder of record on January 31, 2019, and the Trustees of Tanger GP Trust declared a $0.35 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.


In February 2019, the Company's Board of Directors declared a $0.355$$0.355 cash dividend per common share payable on May 15, 2019 to each shareholder of record on April 30, 2019, and the Trustees of Tanger GP Trust declared a $0.355 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders. A liability in the amount of approximately $35.2 million was recorded in accounts payable and accrued expenses in the consolidated balance sheet as of March 31, 2019.


Share Repurchase Program


In May 2017,February 2019, the Company announced that ourCompany’s 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. During 2017 and 2018, we repurchased an aggregate of approximately 2.8 million common shares on the open market at an average price of $24.48, totaling approximately $69.3 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 amountan aggregate authorization of $100.0 million. The Board of Directors also extended the expiration of the existing plan by two years to$169.3 million until 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 are as follows:
  Three months ended March 31,
  2019 2018
Total number of shares purchased —
 443,700
Average price paid per share $—
 $22.52
Total price paid exclusive of commissions and related fees (in thousands) $—
 $9,990

We did not repurchase any shares for the periods ended March 31, 2020. The remaining amount authorized to be repurchased under the program as of March 31, 20192020 was approximately $100.0$80.0 million. Due to near and potential long term impacts from COVID-19, the Company intends to temporarily suspend share repurchases in order to preserve our liquidity position.


10. Partners'11. 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 three months ended March 31, 20192020 and March 31, 2018:2019:
    Limited Partnership Units
  General Partnership Units Class A Class B Total
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
Units withheld for employee income taxes —
 —
 (81,284) (81,284)
Balance March 31, 2019 1,000,000
 4,960,684
 93,102,666
 98,063,350
         
Balance December 31, 2019 1,000,000
 4,911,173
 91,892,260
 96,803,433
Grant of restricted common share awards by the Company, net of forfeitures —
 —
 241,038
 241,038
Units withheld for employee income taxes —
 —
 (56,597) (56,597)
Balance March 31, 2020 1,000,000
 4,911,173
 92,076,701
 96,987,874

    Limited Partnership Units
  General Partnership Units Class A Class B Total
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 —
 —
 (443,700) (443,700)
Units withheld for employee income taxes —
 —
 (89,437) (89,437)
Balance March 31, 2018 1,000,000
 4,995,433
 93,382,583
 98,378,016
         
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
Units withheld for employee income taxes —
 —
 (81,284) (81,284)
Balance March 31, 2019 1,000,000
 4,960,684
 93,102,666
 98,063,350



11.12. Earnings Per Share of the Company


The following table sets forth a reconciliation of the numerators and denominators in computing the Company'sCompany’s earnings per share (in thousands, except per share amounts):
  Three months ended March 31,
  2020 2019
Numerator:    
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(26,882) $62,331
Less allocation of earnings to participating securities (516) (611)
Net income (loss) available to common shareholders of Tanger Factory Outlet Centers, Inc. $(27,398) $61,720
Denominator:    
Basic weighted average common shares 92,500
 93,303
Diluted weighted average common shares 92,500
 93,303
Basic earnings per common share:    
Net income (loss) $(0.30) $0.66
Diluted earnings per common share:    
Net income (loss) $(0.30) $0.66

  Three months ended March 31,
  2019 2018
Numerator:    
Net income attributable to Tanger Factory Outlet Centers, Inc. $62,331
 $22,838
Less allocation of earnings to participating securities (611) (263)
Net income available to common shareholders of Tanger Factory Outlet Centers, Inc. $61,720
 $22,575
Denominator:    
Basic weighted average common shares 93,303
 93,644
Diluted weighted average common shares 93,303
 93,644
Basic earnings per common share:    
Net income $0.66
 $0.24
Diluted earnings per common share:    
Net income $0.66
 $0.24


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 ended March 31, 20192020 and 2018.2019.




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 the three months ended March 31, 2020 and 2019, and March 31, 2018 approximately 1.21.5 million and 1.01.2 million notional units were excludedfrom the computation, respectively, because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or as they were anti-dilutive.




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 the three months ended March 31, 2020,and 2019, approximately 521,000 and March 31, 2018, approximately 528,000 and 564,000 options were excluded from the computation, respectively, as they were anti-dilutive.


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


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


12.13. Earnings Per Unit of the Operating Partnership


The following table sets forth a reconciliation of the numerators and denominators in computing earnings per unit (in thousands, except per unit amounts):
  Three months ended March 31,
  2020 2019
Numerator:  
  
Net income (loss) attributable to partners of the Operating Partnership $(28,309) $65,646
Less allocation of earnings to participating securities (516) (611)
Net income (loss) available to common unitholders of the Operating Partnership $(28,825) $65,035
Denominator:    
Basic weighted average common units 97,411
 98,264
Diluted weighted average common units 97,411
 98,264
Basic earnings per common unit:    
Net income (loss) $(0.30) $0.66
Diluted earnings per common unit:    
Net income (loss) $(0.30) $0.66

  Three months ended March 31,
  2019 2018
Numerator:  
  
Net income attributable to partners of the Operating Partnership $65,646
 $24,055
Less allocation of earnings to participating securities (611) (263)
Net income available to common unitholders of the Operating Partnership $65,035
 $23,792
Denominator:    
Basic weighted average common units 98,264
 98,640
Diluted weighted average common units 98,264
 98,640
Basic earnings per common unit:    
Net income $0.66
 $0.24
Diluted earnings per common unit:    
Net income $0.66
 $0.24


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 three months ended March 31, 20192020 and 2018.2019.



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 units would be issuable if the end of the reporting period were the end of the contingency period. For the three months ended March 31, 2020 and 2019 approximately 1.5 million and March 31, 2018 approximately 1.2 million and 1.0 millionnotional units were excludedfrom the computation, respectively, because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or becauseas 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 the three months ended March 31, 2019,2020, approximately 528,000 and  564,000521,000 options were excluded from the computation, respectively,and for the three months endedMarch 31, 2019, approximately 528,000 options were excluded from the computation as they were anti-dilutive.


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


13.14. Equity-Based Compensation of the Company


We have a shareholder approved equity-based compensation plan, the Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership (as amended and restated on April 4, 2014, the "Plan"2014), as amended (the “Plan”), which covers our non-employee directors, officers, employees and consultants. For eachPer the Operating Partnership agreement, when a common share is issued by the Company, the Operating Partnership issues one corresponding unit of partnership interest to the Company'sCompany’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
  March 31,
  2020 2019
Restricted common shares $2,227
 $2,513
Notional unit performance awards 1,520
 1,262
Options 41
 43
Total equity-based compensation $3,788
 $3,818

  Three months ended
  March 31,
  2019 2018
Restricted common shares $2,513
 $2,376
Notional unit performance awards 1,262
 937
Options 43
 79
Total equity-based compensation $3,818
 $3,392


Equity-based compensation expense capitalized as a part of rental property and deferred lease costs were as follows (in thousands):
  Three months ended
  March 31,
  2020 2019
Equity-based compensation expense capitalized $101
 $92

  Three months ended
  March 31,
  2019 2018
Equity-based compensation expense capitalized $92
 $264




Restricted Common Share and Restricted Share Unit Awards


During February 2019,2020, the Company granted approximately 309,000 in399,000 restricted common shares and restricted share units to the Company'sCompany’s non-employee directors and the Company'sCompany’s senior executive officers. The grant date fair value of the awards ranged from $19.01$12.03 to $21.73$13.75 per share. The non-employee directors' restricted common shares vest ratably over a three year period on January 4th of each year for non-employee directors and theon February 15th of each year for senior executive officers' restricted shares (other than our Chief Executive Officer's) vest ratably over a three or five year period. Our Chief Executive Officer’s restricted shares vest on the first anniversary of the grant date and his restricted share units vest in two equal installments on the second and third anniversaries of the grant date.officers. For the restricted shares and units issued to our Chief Executive Officer, the award agreements 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 for the applicable income and other employment taxes, and remit cash to the appropriate taxing authorities. The total number of shares withheld upon vesting were approximately 81,00057,000 and 89,00081,000 for the three months ended March 31, 2020and2019,and2018, 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 were $736,000 and $1.8 million for the three months ended March 31, 2020 and 2019, and $2.1 million for the three months ended March 31, 2018.respectively. These amounts are reflected as financing activities within the consolidated statements of cash flows.


20192020 Outperformance Plan


InDuring February 2019,2020, the Compensation Committee of the Company approved the general terms of the Tanger Factory Outlet Centers, Inc. 20192020 Outperformance Plan (the “2019 OPP"“2020 OPP”). covering the Company's senior executive officers whereby a maximum of approximately 697,000 restricted common shares may be earned if certain share price appreciation goals are achieved over a three year measurement period. The 20192020 OPP is a long-term incentive compensation plan. Recipients may earn units which may convert into restricted common shares of the Company based on the Company’s absolute share price appreciation (or absolute total shareholder return) and its share price appreciation relative to its peer group (or relative total shareholder return) over a three-year measurement period. Any shares earned at the end of the three-year measurement period are subject to a time-based vesting schedule, with 50% of the shares vesting immediately following the measurement period, and the remaining 50% vesting one year thereafter, contingent upon continued employment with the Company through the vesting date (unless terminated prior thereto (a) by the Company without cause, (b) by participant for good reason or, with respect to our Chief Executive Officer, retirement or (c) due to death or disability).


The following table sets forth 20192020 OPP performance targets and other relevant information about the 20192020 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% 36.8%-52.1%
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 531,827
 696,687 
Grant date fair value per share $12.09
 $7.30 
(1)The number of restricted common shares received under the 20192020 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'sCompany’s peer group.
(2)The peer group is based on companies included in the FTSE NAREIT Retail Index.





The fair values of the 20192020 OPP awards granted during the three months ended March 31, 20192020 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:
Risk free interest rate (1)
 2.61.4%
Expected dividend yield (2)
 5.38.4%
Expected volatility (3)
 2429%
(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.


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


The following table presents changes in the balances of each component of accumulated comprehensive loss for the three months ended March 31, 2020 (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 December 31, 2019 $(25,094) $(401) $(25,495) $(1,369) $(24) $(1,393)
Other comprehensive loss before reclassifications (7,343) (5,388) (12,731) (390) (286) (676)
Reclassification out of accumulated other comprehensive income (loss) into interest expense —
 (2) (2) —
 —
 —
Balance March 31, 2020 $(32,437) $(5,791) $(38,228) $(1,759) $(310) $(2,069)

The following table presents changes in the balances of each component of accumulated comprehensive income (loss) for the three months ended March 31, 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 December 31, 2018 $(32,610) $5,459
 $(27,151) $(1,770) $290
 $(1,480)
Other comprehensive income (loss) before reclassifications 1,851
 (1,166) 685
 98
 (62) 36
Reclassification out of accumulated other comprehensive income (loss) into interest expense —
 (687) (687) —
 (37) (37)
Balance March 31, 2019 $(30,759) $3,606
 $(27,153) $(1,672) $191
 $(1,481)


We expect within the next twelve months to reclassify into earnings as an increase to interest expense approximately $3.2 million of the amounts recorded within accumulated other comprehensive loss related to the interest rate swap agreements in effect as of March 31, 2020.


  
  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 1,851
 (1,166) 685
 98
 (62) 36
Reclassification out of accumulated other comprehensive income into interest expense —
 (687) (687) —
 (37) (37)
Balance March 31, 2019 $(30,759) $3,606
 $(27,153) $(1,672) $191
 $(1,481)


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

The following table presents changes in the balances of each component of accumulated comprehensive income (loss)loss for the three months ended March 31, 20182020 (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 December 31, 2017 $(24,360) $5,075
 $(19,285) $(1,329) $269
 $(1,060)
Other comprehensive income (loss) before reclassifications (2,938) 2,914
 (24) (157) 156
 (1)
Reclassification out of accumulated other comprehensive income into interest expense —
 (314) (314) —
 (17) (17)
Balance March 31, 2018 $(27,298) $7,675
 $(19,623) $(1,486) $408
 $(1,078)
  Foreign Currency Cash flow hedges Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2019 $(26,463) $(425) $(26,888)
Other comprehensive loss before reclassifications (7,733) (5,674) (13,407)
Reclassification out of accumulated other comprehensive income (loss) into interest expense —
 (2) (2)
Balance March 31, 2020 $(34,196) $(6,101) $(40,297)

We expect within the next twelve months to reclassify into earnings as a decrease to interest expense approximately $2.4 million of the amounts recorded within accumulated other comprehensive income related to the interest rate swap agreements in effect as of March 31, 2019.



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


The following table presents changes in the balances of each component of accumulated comprehensive income (loss) for the three months ended March 31, 2019 (in thousands):
  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 1,949
 (1,228) 721
Reclassification out of accumulated other comprehensive income (loss) into interest expense —
 (724) (724)
Balance March 31, 2019 $(32,431) $3,797
 $(28,634)

  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 1,949
 (1,228) 721
Reclassification out of accumulated other comprehensive income into interest expense —
 (724) (724)
Balance March 31, 2019 $(32,431) $3,797
 $(28,634)

The following table presents changes in the balances of each component of accumulated comprehensive income (loss) for the three months ended March 31, 2018 (in thousands):
  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 (3,095) 3,070
 (25)
Reclassification out of accumulated other comprehensive income into interest expense —
 (331) (331)
Balance March 31, 2018 $(28,784) $8,083
 $(20,701)


We expect within the next twelve months to reclassify into earnings as a decreasean increase to interest expense approximately $2.4$3.2 million of the amounts recorded within accumulated other comprehensive incomeloss related to the interest rate swap agreements in effect as of March 31, 2019.2020.



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
  March 31, 2019 March 31, 2018
Costs relating to construction included in accounts payable and accrued expenses $12,791
 $18,978

Dividends payable were as follows (in thousands):

  As of As of
  March 31, 2019 March 31, 2018
Dividends payable $35,199
 $—

Interest paid, net of interest capitalized was as follows (in thousands):
  Three months ended March 31,
  2019 2018
Interest paid $16,022
 $15,903

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 March 31, 2019 was as follows (in thousands):
  March 31, 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.    LeasesLease Agreements

On January 1, 2019, we adopted ASC 842, which supersedes ASC 840. We adopted ASC 842 using the modified retrospective approach, whereby there was no cumulative effect adjustments on the adoption and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. 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 months ended March 31, 2019 and under ASC 840 as of December 31, 2018 and for the three months ended March 31, 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 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 10-Q, which are not 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 months ended March 31, 2019, we recorded a straight-line rent adjustment of $1.5 million 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 months ended March 31, 2019, lease costs of approximately $1.1 million 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 March 31, 2019,2020, we were the lessor to over 2,300 stores in our 32 consolidated outlet centers, under operating leases with initial terms that expire from 20192020 to 2032,2035, with certain agreements containing extension options. We also have certain agreements whichthat require tenants to pay their portion of reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.


For the three months ended March 31, 2019,2020, the components of rental revenues are as follows (in thousands):
  Three months ended
  March 31,
  2020 2019
Rental revenues - fixed $86,933
 $93,459
Rental revenues - variable (1)
 21,625
 26,495
Rental revenues $108,558
 $119,954
Rental revenues - fixed $93,459
Rental revenues - variable (1)
 26,495
Rental revenues $119,954

(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
18. Supplemental Cash Flow Information

We purchase capital equipment and incur costs relating to construction of facilities, including tenant finishing allowances. Expenditures included in accounts payable and accrued expenses were as of March 31, 2019, excluding the effect of straight-line rent and variable rentals, arefollows (in thousands):
  As of As of
  March 31, 2020 March 31, 2019
Costs relating to construction included in accounts payable and accrued expenses $18,168
 $12,791


Dividends payable were as follows (in thousands):
For the remainder of 2019 $241,203
2020 308,442
2021 270,437
2022 235,196
2023 200,954
2024 166,256
Thereafter 291,784
  $1,714,272
  As of As of
  March 31, 2020 March 31, 2019
Dividends payable $35,108
 $35,199




Information as Lessor Under ASC 840

AsInterest paid, net of December 31, 2018, we were the lessor to over 2600 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, areinterest capitalized was as follows (in thousands):
  Three months ended March 31,
  2020 2019
Interest paid $14,811
 $16,022




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


19. New Accounting Pronouncements
Information
Recently issued accounting standards

In April 2020, the Financial Accounting Standards Board (“FASB”) staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as Lessee Under ASC 842

Adoptiona result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new standard resulted inarrangement reached with the recordingtenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We have elected to apply such relief and will avail itself of operatingthe election to avoid performing a lease right-of-use assets and operatingby lease liabilities, of $90.4 million and $95.1 million, respectively,analysis. The Lease Modification Q&A has no material impact on the Company’s consolidated financial statements 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 months ended March 31, 2019, the components of lease costs are as follows (in thousands):
Operating lease costs $1,404
Short-term lease costs 591
Variable lease costs (1)
 78
Total lease costs $2,073
(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:
March 31, 2019
Weighted - average remaining lease term (years)51
Weighted - average discount rate5.0%



Cash flow information related to leases for the three months ended March 31, 2019 (in thousands):
  March 31, 2019
Operating cash outflows related to operating leases $1,403

Maturities2020, however, its future impact to the Company is dependent upon the extent of lease liabilitiesconcessions granted to tenants as a result of March 31, 2019 for the next five yearsCOVID-19 pandemic in future periods and thereafter are as follows (in thousands):
For the remainder of 2019 $4,168
2020 5,568
2021 5,613
2022 5,669
2023 5,709
2024 5,765
Thereafter 226,837
Total lease payments $259,329
Less imputed interest 166,975
Present value of lease liabilities $92,354


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 for the three months ended March 31, 2018. As of December 31, 2018,elections made by the majority of our rental payments are related to ground leasesCompany at the following outlet centers: Myrtle Beach Hwy 17, Atlantic City, Ocean City, Sevierville, Riverhead, Foxwoods and Rehoboth Beach and the leasetime 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.entering into such concessions.


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,On March 12, 2020, the FASB issued Accounting Standards Update ("ASU"(“ASU”) 2018-16, Inclusion2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Secured Overnight FinancingEffects of Reference Rate (SOFR) Overnight Index Swap (OIS) RateReform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform. This ASU is effective as a Benchmark Interest Rate for Hedge Accounting Purposesof March 12, 2020 through December 31, 2022. We have not adopted any of the optional expedients or exceptions through March 31, 2020, but will continue to Accounting Standards Codification 815. ASU 2018-16 expandsevaluate 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. Thepossible adoption of ASU 2018-16any such expedients or exceptions during the effective period as of January 1, 2019 did not have a material impact on our consolidated financial statements.circumstances evolve.



In June 2018, the FASB issued ASU 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 determination of the measurement date, the accounting for performance conditions, and the accounting for share-based payments after vesting in addition to other items. The provisions of ASU 2018-07 were effective for us as of January 1, 2019 using a modified transition method upon adoption, and early adoption was permitted. The adoption of ASU 2018-07 as of January 1, 2019 did not have a material impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance made more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amended the presentation and disclosure requirements and 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 adoption of ASU 2017-12 as of January 1, 2019 did not have a material impact on our consolidated financial statements.


Recently issuedadopted accounting standards to be adopted


In 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 willdid not have a material impact on our consolidated financial statements.


In June 2016, the FASB issued ASU No. 2016-13 to amend the 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 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 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this new guidance willdid not have a material impact on our consolidated financial statements.










20. Subsequent Events

In April 2020, Stephen Yalof became the President and Chief Operating Officer of the Company, the Operating Partnership and the General Partner.

As part of his employment, Mr. Yalof was granted 1.0 million options that have an exercise price of $7.15 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 25% of the options become exercisable on December 31, 2020 with the remaining options vesting ratably on each December 31st through 2023, in each case, contingent upon continued employment with the Company through the applicable vesting date (subject to acceleration upon certain terminations of employment). The fair value of each option grant was 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 $0.42 and included the following weighted-average assumptions: expected dividend yield 9.86%; expected life of 7.9 years; expected volatility of 30.44%; a risk-free rate of 0.60%; and forfeiture rate 0.0%.

In addition, Mr. Yalof was granted 389,308 restricted common shares with a grant date fair value of $7.15 per share. The restricted common shares vest ratably over a three year period, with one-third of the restricted common shares vesting on each anniversary of the grant date, beginning on April 10, 2021, contingent upon continued employment with the Company through the applicable vesting date (subject to acceleration upon certain terminations of employment).

Mr. Yalof was also awarded 205,480 notional units under the 2020 OPP, with a grant date fair value per share of $3.11. These awards have the same terms as the awards our executive officers received in February 2020. See Note 14 for the terms of this award.

Also in April 2020, the Company amended Steven Tanger’s, the Company’s current Chief Executive Officer, employment agreement to, among other items, extend it for three years through January 1, 2024. Per the terms of each executive’s employment contract, Mr. Yalof will become the President and Chief Executive Officer of the Company, the Operating Partnership and the General Partner effective January 1, 2021 and Mr. Tanger will become Executive Chair of the Company.

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


The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three months ended March 31, 20192020 with the three months endedMarch 31, 2018.2019. The results of operations discussion is combined for Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership because the results are virtually the same for both entities. The following discussion should be read in conjunction with the unaudited consolidated financial statements appearing elsewhere in this report. Historical results and percentage relationships set forth in the unaudited, consolidated statements of operations, including trends which might appear, are not necessarily indicative of future operations. Unless the context indicates otherwise, the term "Company"“Company” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating Partnership"“Operating Partnership” refers to Tanger Properties Limited Partnership and subsidiaries. The terms "we"“we”, "our"“our” and "us"“us” refer to the Company or the Company and the Operating Partnership together, as the text requires.




Cautionary Statements


Certain statements made in this Management's Discussion and Analysis of Financial Condition and Results of Operations below are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.amended, or the Exchange Act. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and have included this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies, beliefs and expectations, are generally identifiable by use of the words "believe", "expect", "intend", "anticipate", "estimate", "project", or similar expressions. Such forward-looking statements include, but are not limited to, statements regarding our:regarding: the expected impact of the novel coronavirus (“COVID-19”) pandemic on our business, financial results and financial condition; our ability to raise additional capital, including via future issuances of equity and debt, and the use of proceeds from such issuances; our results of operations and financial condition; capital expenditure and working capital needs and the funding thereof; the repurchase of the Company's shares;common shares, including the potential use of a 10b5-1 plan to facilitate repurchases; future dividend payments; the possibility of future asset impairments; potential developments, expansions, renovations, acquisitions or dispositions of outlet centers; compliance with debt covenants; renewal and re-lease of leased space; the outlook for the retail environment, potential bankruptcies, and other store closings; the outcome of legal proceedings arising in the normal course of business; and real estate joint ventures. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements. Important

Currently, one of the most significant factors, however, is the potential adverse effect of the COVID-19 pandemic, on the financial condition, results of operations, cash flows, compliance with debt covenants and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.

Other 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, public health crises 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 certain of our lease agreements include co-tenancy and/or sales-based provisions that may allow a tenant to pay reduced rent and/or terminate a lease prior to its natural expiration; 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 thatrisks related to changes in consumer travel, shopping and spending habits may change;habits; 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; risk associated with our interest rate hedging arrangements; risk associated to uncertainty related to determination 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;shareholders; our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends; the risk of a cyber-attack or an act of cyber-terrorism and other important factors which may cause actual results to differ materially from current expectations include, but are not limited to, those set forth under Item 1A - "Risk Factors"“Risk Factors” in the Company'sCompany’s and the Operating Partnership'sPartnership’s Annual Report on Form 10-K for the year ended December 31, 2018.2019, as updated in Part II, Item 1A- “Risk Factors” in this Quarterly Report on Form 10-Q.







General Overview


As of March 31, 2019,2020, we had 32 consolidated outlet centers in 19 states totaling 12.0 million square feet. We also had 87 unconsolidated outlet centers in 6 states or provinces totaling 2.42.2 million square feet. During the three months ended March 31, 2019, we closed on the sale of four non-core outlet centers for total gross proceeds of $130.5 million, and total net proceeds of approximately $128.2 million. The four properties are 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.


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, 20182019 to March 31, 20192020 (square feet in thousands):
   Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers   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 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
As of January 1, 2019   12,923
 36
 2,371
 8
Dispositions:                
Nags Head First Quarter (82) (1) —
 —
 First Quarter (82) (1) —
 —
Ocean City First Quarter (200) (1) —
 —
 First Quarter (200) (1) —
 —
Park City First Quarter (320) (1) —
 —
 First Quarter (320) (1) —
 —
Williamsburg First Quarter (276) (1) —
 —
 First Quarter (276) (1) —
 —
Bromont Second Quarter —
 —
 (161) (1)
Other   2
 —
 —
 —
 3
 —
 2
 —
As of March 31, 2019   12,047
 32
 2,371
 8
As of December 31, 2019   12,048
 32
 2,212
 7
Other   (4) —
 —
 —
As of March 31, 2020   12,044
 32
 2,212
 7






The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of March 31, 2019.2020. 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
 98  100 739,110
 98 
Riverhead, New York (1)
 100 729,778
 95  100 729,778
 92 
Rehoboth Beach, Delaware (1)
 100 557,353
 97  100 557,353
 95 
Foley, Alabama 100 554,673
 94  100 554,587
 88 
Atlantic City, New Jersey (1) (3)
 100 489,706
 80  100 489,718
 79 
San Marcos, Texas 100 471,816
 95  100 471,816
 95 
Sevierville, Tennessee (1)
 100 447,815
 99  100 447,815
 99 
Savannah, Georgia 100 429,089
 97  100 429,089
 96 
Myrtle Beach Hwy 501, South Carolina 100 426,523
 98  100 426,523
 96 
Jeffersonville, Ohio 100 411,866
 94  100 411,904
 84 
Glendale, Arizona (Westgate) 100 410,734
 97  100 410,751
 97 
Myrtle Beach Hwy 17, South Carolina (1)
 100 403,425
 100  100 403,425
 99 
Charleston, South Carolina 100 382,180
 99  100 379,328
 100 
Lancaster, Pennsylvania 100 376,997
 92  100 375,857
 91 
Pittsburgh, Pennsylvania 100 372,883
 97  100 373,863
 95 
Commerce, Georgia 100 371,408
 94  100 371,408
 96 
Grand Rapids, Michigan 100 357,103
 96  100 357,119
 90 
Fort Worth, Texas 100 351,741
 97  100 351,741
 99 
Daytona Beach, Florida 100 351,721
 98  100 351,721
 98 
Branson, Missouri 100 329,861
 98  100 329,861
 99 
Southaven, Mississippi (2) (3)
 50 324,703
 94  50 324,717
 99 
Locust Grove, Georgia 100 321,082
 97  100 321,082
 95 
Gonzales, Louisiana 100 321,066
 96  100 321,066
 96 
Mebane, North Carolina 100 318,886
 99  100 318,886
 100 
Howell, Michigan 100 314,438
 92  100 314,438
 88 
Mashantucket, Connecticut (Foxwoods) (1)
 100 311,539
 93  100 311,507
 93 
Tilton, New Hampshire 100 250,107
 96  100 250,107
 93 
Hershey, Pennsylvania 100 249,696
 99  100 249,696
 99 
Hilton Head II, South Carolina 100 206,564
 88  100 206,564
 98 
Hilton Head I, South Carolina 100 181,670
 100  100 181,670
 97 
Terrell, Texas 100 177,800
 97  100 177,800
 87 
Blowing Rock, North Carolina 100 104,009
 95  100 104,009
 85 
Totals   12,047,341
 95    12,044,309
 94 
(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'sventure’s cash flow to be greater than our legal ownership percentage. We currently receive substantially all the economic interest of the property.
(3)Property encumbered by mortgage. See Notes 56 and 67 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)
 50 398,697
 97  50 398,676
 97 
Ottawa, Ontario 50 357,218
 96 
Columbus, Ohio (1)
 50 355,245
 95  50 355,245
 97 
Ottawa, Ontario 50 355,013
 94 
Texas City, Texas (Galveston/Houston) (1)
 50 352,705
 97  50 352,705
 92 
National Harbor, Maryland (1)
 50 341,156
 96  50 341,156
 96 
Cookstown, Ontario 50 307,779
 97  50 307,895
 100 
Bromont, Quebec 50 161,449
 77 
Saint-Sauveur, Quebec (1)
 50 99,405
 94  50 99,405
 92 
Total   2,371,449
 95    2,212,300
 96 
(1)Property encumbered by mortgage. See Note 45 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 March 31, 20192020 and 2018:2019:
 
Trailing twelve months ended March 31, 2020(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-tenant118
504
$36.13
$47.70
7.75
$29.98
Renewal178
839
$28.20
$0.90
3.90
$27.97
       
 
Trailing twelve months ended March 31, 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-tenant81
388
$33.32
$45.13
7.83
$27.56
Renewal280
1,404
$34.37
$0.49
3.82
$34.24
 
Trailing twelve months ended March 31, 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-tenant81
388
$33.32
$45.13
7.83
$27.56
Renewal280
1,404
$34.37
$0.49
3.82
$34.24
       
 
Trailing twelve months ended March 31, 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-tenant84
415
$34.32
$70.88
8.55
$26.03
Renewal262
1,300
$29.25
$0.25
4.07
$29.19
(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 annual 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 other landlord costs.







COVID-19 Pandemic



The current COVID-19 pandemic has had, and likely will continue to have, repercussions across local, national and global economies and financial markets. COVID-19 has impacted all states where our tenants operate their businesses or where our properties are located and measures taken to prevent or remediate COVID-19, including “shelter-in-place” or “stay-at-home” orders or other quarantine mandates issued by local, state or federal authorities, have had an adverse effect on our business and the businesses of our tenants. The full extent of the adverse impact on our results of operations, liquidity (including our ability to access capital markets), and our ability to develop, acquire, dispose or lease properties for our portfolio, is unknown and will depend on future developments, which are highly uncertain and cannot be predicted. Our results of operations, liquidity and cash flows could be materially affected.

Many of our tenants operate in industries that depend on in-person interactions with their customers to be profitable and to fund their obligations under lease agreements with us. Measures taken to prevent or remediate COVID-19, including “shelter-in-place” or “stay-at-home” orders or other quarantine mandates have, with respect to some portion of our tenants, (i) prevented our tenants from being able to open their stores and conduct business or limited the hours in which they may conduct business, (ii) decreased or prevented our tenants’ customers’ willingness or ability to frequent their businesses, and/or (iii) impacted supply chains from local, national and international suppliers or otherwise delayed the delivery of inventory or other materials necessary for our tenants’ operations, all of which have adversely affected, and are likely to continue to adversely affect, their ability to maintain profitability and make rental payments to us under their leases. Tenants may also, as a result of such public health crisis, orders or mandates and the resulting economic downturn, request rent deferrals, rent abatement or early termination of their leases as well as may be forced to temporarily or permanently close or declare bankruptcy which could reduce our cash flows and negatively affect our ability to pay dividends. Specifically, as a result of COVID-19 and various governmental orders currently in place, a number of our tenants have either closed their business or are operating with limited operations and/or have submitted requests for rent relief or failed to pay rent. Certain other of our tenants have declared bankruptcy. In addition, state, local or industry-initiated efforts, such as tenant rent freezes or suspension of a landlord’s ability to enforce evictions, may also affect our ability to collect rent or enforce remedies for the failure to pay rent. We believe our tenants do not have a clear contractual right to cease paying rent due to government mandated closures and we intend to enforce our rights under the lease agreements. However, COVID-19 and the related governmental orders present fairly novel situations for which the ultimate legal outcome cannot be assured and it is possible future governmental action could impact our rights under the lease agreements. The extent of tenant requests and actions and the impact on our results of operations and cash flows is uncertain and cannot be predicted.

While our outlet centers have remained open, retailers began closing their stores in our outlet centers in mid-March and by April 6, 2020, operations at all 39 Tanger Outlet Centers were restricted by order of local and state authorities. At the lowest point, open stores represented 6% of the consolidated portfolio in terms of gross leasable area, or 2% in terms of annualized base rent. As of May 11, 2020, these percentages had improved to 16% and 12%, respectively, as mandates had eased or been lifted in 20, or 63%, of the locations where we operate. These totals include some stores that are open only for curb-side pickup or where maximum store occupancy is restricted by governmental mandates. It remains unclear when mandates will be lifted completely or eased in additional locations.

A number of our tenants have requested rent deferrals, rent abatements or other types of rent relief during this pandemic. As a response, in late March 2020, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021. As expected due to the deferment offer, April rent receipts represented approximately 12% of the amount billed. Due to the potential impact of COVID-19, our revenues may be significantly lower in the quarter ended June 30, 2020 than the comparable period in 2019. The extent of tenant requests and actions and the impact to our results of operations and cash flows is uncertain and cannot be predicted at this time. While our preference is to work with its tenant partners to reach a financial resolution that positions both parties for long-term growth, it reserves all rights under its lease agreements and will pursue legal remedies to collect rent as appropriate. As we have historically collected the majority of our rent in advance, estimated uncollectible rents and impacts on straight–line rent receivables was not material for the quarter ended March 31, 2020. However, the impact of the COVID–19 pandemic on our tenants' ability to pay rent could have a significant impact in future periods.



Also in March 2020, to increase liquidity, preserve financial flexibility and help ensure that we are able to meet our obligations for a sustained period of time until there is more clarity regarding the impact of the pandemic, we drew down substantially all of the available capacity under our $600.0 million unsecured lines of credit. We have also taken steps to reduce future cash outflows, including the reduction or deferral of certain operating and general and administrative expenses, as well as the deferral of the Nashville project and certain other planned capital expenditures. We intend to pay the dividend that was declared in January as scheduled on May 15, 2020. Going forward, given the current uncertainty related to the pandemic’s near and potential long-term impact, the Company’s Board of Directors will temporarily suspend dividend distributions to conserve approximately $35.0 million in cash per quarter and preserve our balance sheet strength and flexibility. The Board will continue to evaluate the potential for future dividend distributions on a quarterly basis.

While we did not incur significant disruptions during the three months ended March 31, 2020 from the COVID-19 pandemic, we are unable to predict the ultimate impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. The impact of the COVID-19 pandemic on our rental revenue for the second quarter of 2020 and thereafter cannot, however, be determined at present. The situation surrounding the COVID-19 pandemic remains fluid, and we are actively managing our response in collaboration with tenants, government officials and business partners and assessing potential impacts to our financial position and operating results, as well as potential adverse developments in our business. For further information regarding the impact of COVID-19 on us, see Part II, Item 1A titled “Risk Factors.”




RESULTS OF OPERATIONS
Comparison of the three months ended March 31, 20192020 to the three months ended March 31, 20182019


NET INCOME (LOSS)
Net income decreased $94.0 million in the 20192020 period was $65.8to net loss of $28.1 million as compared to net income of $23.7$65.8 million for the 20182019 period. The increasedecrease in net income is primarily due to to:
the $43.4 million gain recorded on the sale of our Nags Head, Ocean City, Park City and Williamsburgthe four outlet centers in March 2019.2019;

the loss of revenues from the four outlet centers sold in March 2019; and
the $45.7 million impairment charge recognized in March 2020 on the center in Mashantucket, Connecticut.

In the tables below, information set forth for properties disposed includes the Nags Head, Ocean City, Park City and Williamsburgfour outlet centers sold in late March 2019.


RENTAL REVENUES
Rental revenues decreased $702,000$11.4 million in the 20192020 period compared to the 20182019 period. The following table sets forth the changes in various components of leasingrental revenues (in thousands):
 2019 2018 Increase/(Decrease) 2020 2019 Increase/(Decrease)
Rental revenues from existing properties $110,822
 $111,564
 $(742) $106,778
 $110,822
 $(4,044)
Rental revenues from properties disposed 6,402
 6,541
 (139) 12
 6,402
 (6,390)
Straight-line rent adjustments 1,970
 1,948
 22
 1,873
 1,970
 (97)
Lease termination fees 1,130
 1,051
 79
 164
 1,130
 (966)
Amortization of above and below market rent adjustments, net (370) (448) 78
 (269) (370) 101
 $119,954
 $120,656
 $(702) $108,558
 $119,954
 $(11,396)


Rental revenues from existing properties decreased primarily due to lower average occupancy, and rent modifications for certain tenants, in large part as a result of a number of bankruptcy filings, and other tenant closures during 20182019 and 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. For2020. We recaptured approximately 332,000 square feet within our consolidated portfolio during the three months ended March 31, 2019, we recorded $1.5 million in rental revenues in our consolidated statements2020 from the early termination of operations to record executory costs on a straight-line basis. These incremental straight-line rent adjustments were primarily offset by the write-off of straight-line rentsleases related to certain bankrupt tenants.bankruptcies and brand-wide restructurings by retailers, compared to 82,000 square feet for the three months ended March 31, 2019. In addition, variable revenue which is derived from tenant sales were negatively impacted due to mandatory closures of several centers for the second half of March 2020 as a result of the COVID-19 pandemic.


OTHER REVENUES
Other revenues increased $179,000 in the 2019 period as compared to the 2018 period. The following table sets forth the changes in various components of other revenues (in thousands):

 2019 2018 Increase/(Decrease) 2020 2019 Increase/(Decrease)
Other revenues from existing properties $1,805
 $1,633
 $172
 $1,632
 $1,805
 $(173)
Other revenues from properties disposed 54
 47
 7
Other revenues from property disposed —
 54
 (54)
 $1,859
 $1,680
 $179
 $1,632
 $1,859
 $(227)


Other revenues from existing properties decreased primarily due to mandatory closures of several centers for the second half of March 2020 due to COVID-19 pandemic.



PROPERTY OPERATING EXPENSES
Property operating expenses increased $159,000decreased $3.8 million in the 20192020 period as compared to the 20182019 period. The following table sets forth the changes in various components of property operating expenses (in thousands):
  2019 2018 Increase/(Decrease)
Property operating expenses from existing properties $38,480
 $38,617
 $(137)
Properties operating expenses from properties disposed 2,592
 2,250
 342
Other property operating expenses 1,305
 1,351
 (46)
  $42,377
 $42,218
 $159
  2020 2019 Increase/(Decrease)
Property operating expenses from existing properties $37,293
 $38,480
 $(1,187)
Property operating expenses from property disposed —
 2,592
 (2,592)
Expenses related to unconsolidated joint ventures 882
 745
 137
Other property operating expense 452

560
 (108)
  $38,627
 $42,377
 $(3,750)



Property operating expenses incurred at existing properties during the 2020 period decreased primarily due to lower snow removal costs.


GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased $1.0 million$439,000 in the 20192020 period compared to the 20182019 period primarily asdue to higher professional fees partially offset by lower employee related costs.

IMPAIRMENT CHARGE

During the first quarter of 2020, we determined that the estimated future undiscounted cash flows of our Foxwoods outlet center in Mashantucket, Connecticut did not exceed the property's carrying value due to a resultdecline in operating results. Therefore, we recorded a $45.7 million non-cash impairment charge in our consolidated statement of operations which equaled the excess of the adoption of the 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.property's carrying value over its estimated fair value.


DEPRECIATION AND AMORTIZATION
Depreciation and amortization costs decreased $1.4$2.3 million in the 20192020 period compared to the 20182019 period. The following table sets forth the changes in various components of depreciation and amortization costs from the 20182019 period to the 20192020 period (in thousands):
  2019 2018 Increase/(Decrease)
Depreciation and amortization from existing properties $30,504
 $31,788
 $(1,284)
Depreciation and amortization from properties disposed 1,256
 1,335
 (79)
  $31,760
 $33,123
 $(1,363)
  2020 2019 Increase/(Decrease)
Depreciation and amortization expenses from existing properties $29,417
 $30,504
 $(1,087)
Depreciation and amortization from property disposed —
 1,256
 (1,256)
  $29,417
 $31,760
 $(2,343)


Depreciation and amortization decreased at our existing properties primarily due to the lower basis in our Jeffersonville property due to the impairment recorded in the thirdfourth quarter of 2018.2019.


INTEREST EXPENSE
Interest expense increased $507,000decreased $1.1 million in the 20192020 period compared to the 20182019 period primarily due to higher interest rates related to $150.0 millionfrom the use of interest rate swap agreements. In August 2018, certain 30-day LIBOR interest rate swaps with a ratethe net proceeds from the sale of 1.30% expired and were replaced with new interest rate swaps with a rate of 2.20%. In addition, the average 30-day LIBOR interest rate for our unsecured lines of credit was 2.50%four properties in theMarch 2019, period compared to 1.65% for the 2018 period. These two factors were partially offset by the utilization ofas well as other general operating cash flows to reduce amounts outstanding on our unsecured lines of credit duringthroughout 2019. During the past 12 months.2020 period, we had minimal borrowings outstanding on our unsecured lines of credit until March 2020 when in response to the COVID-19 pandemic, we borrowed approximately $599.8 million under our lines of credit to increase liquidity and preserve financial flexibility. Interest expense related to these borrowings partially offset the decrease in interest expense from having no amounts outstanding on our lines prior to the COVID-19 pandemic.


GAIN ON SALE OF ASSETS
In March 2019, we sold our Nags Head, Ocean City, Park City and Williamsburgfour outlet centers for net proceeds of approximately $128.2 million, which resulted in a gain on sale of 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.




EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES
Equity in earnings of unconsolidated joint ventures decreased approximately $565,000$102,000 in the 20192020 period compared to the 20182019 period. The decreaseIn the table below, information set forth for properties disposed includes the RioCan joint venture’s Bromont outlet center, which was sold in equityMay 2019.

  2020 2019 Increase/(Decrease)
Equity in earnings from existing properties $1,527
 $1,627
 $(100)
Equity in earnings from property disposed —
 2
 (2)
  $1,527
 $1,629
 $(102)

Equity in earnings of unconsolidated joint ventures wasdecreased primarily due to higher LIBORa decrease in average occupancy between the 2020 and 2019 periods partially offset by a decrease in interest expense related to the Galveston/Houston and Columbus outlet centers which have variable rate financing related to them. The average variable interest rate levels on variable raterelated to the two mortgages at our unconsolidated joint ventures. The approximate average 30 day LIBOR rate fordecreased approximately 1.1% in the 2019 period was 2.50% compared to 1.65% for the 2018 period.comparable periods.


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%.



LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY


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


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


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


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




The Company believes the Operating Partnership'sPartnership’s sources of working capital, specifically its cash flow from operations and borrowings available under its unsecured lines of credit,cash on hand, are adequate for it to make its distribution payments to the Company and, in turn, for the Company to make its minimum 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'sPartnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including its ability to make distribution payments to the Company. The unavailability of capital could adversely affect the Operating Partnership'sPartnership’s ability to pay its distributions to the Company which will, in turn, adversely affect the Company'sCompany’s ability to pay cash dividends to its shareholders. Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted, could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part II, Item 1A titled “Risk Factors.”


For the Company to maintain its qualification as a REIT, it must pay dividends to its shareholders aggregating annually at least 90% of its taxable income (excluding capital gains). While historically the Company has satisfied this distribution requirement by making cash distributions to its shareholders, it may choose to satisfy this requirement by making distributions of cash or other property, including, in limited circumstances, the Company'sCompany’s own shares.


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




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


In May 2017,February 2019, the Company announced that ourCompany’s 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. During 2017 and 2018, we repurchased an aggregate of approximately 2.8 million common shares on the open market at an average price of $24.48, totaling approximately $69.3 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 remaining authorized amountan aggregate authorization of $100.0 million. The Board of Directors also extended the expiration of the existing plan by two years to$169.3 million until 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 were as follows:
  Three months ended March 31, Three months ended March 31,
  2019 2018
Total number of shares purchased —
 443,700
Average price paid per share $—
 $22.52
Total price paid exclusive of commissions and related fees (in thousands) $—
 $9,990

We did not repurchase any shares for the periods ended March 31, 2020 and March 31, 2019. The remaining amount authorized to be repurchased under the program as of March 31, 20192020 was approximately $100.0$80.0 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.


In January 2019, the Company's Board of Directors declared a $0.35 cash dividend per common which was paid during the first quarter of 2019, to each shareholder of record on January 31, 2019, and the Trustees of Tanger GP Trust declared a $0.35 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders. In February 2019,2020, the Company's Board of Directors declared a $0.355 cash dividend per common share payable on May 15, 2019February 14, 2020 to each shareholder of record on April 30, 2019,January 31, 2020, and the Trustees of Tanger GP Trust declared a $0.355 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.


Additionally in January 2020, the Company's Board of Directors declared a quarterly dividend of $0.3575 cash dividend per common share payable on May 15, 2020 to holders of record on April 30, 2020, and the Trustees of Tanger GP Trust declared $0.3575 a cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.



As discussed above, given the current uncertainty related to the COVID-19 near and potential long term impact, the Company will temporarily suspend dividend distributions and share repurchases in order to preserve our liquidity position. The Board will continue to evaluate the potential for future dividend distributions on a quarterly basis. We expect to remain in compliance with REIT taxable income distribution requirements for the 2020 tax year.

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, capital expenditures and distributions, excluding non-recurring capital expenditures and acquisitions. To the extent that our cash flow from operating activities is insufficient to cover such non-recurring capital expenditures and acquisitions, we finance such activities from borrowings under our unsecured lines of credit, to the extent available, or from the proceeds from the Operating Partnership'sPartnership’s debt offerings and the Company'sCompany’s equity offerings.



We believe we achieve a strong and flexible financial position by attempting to: (1) maintain a 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.


Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted, could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part II, Item 1A titled “Risk Factors.” In late March, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021. As expected due to the deferment offer, April rent receipts represented approximately12% of the amount billed. Due to the potential impact of COVID-19, our revenues may be significantly lower in the quarter ended June 30, 2020 than the comparable period in 2019. The extent of tenant requests and actions and the impact to the Company’s results of operations and cash flows is uncertain and cannot be predicted at this time. While our preference is to work with its tenant partners to reach a financial resolution that positions both parties for long-term growth, it reserves all rights under its lease agreements and will pursue legal remedies to collect rent as appropriate. As we have historically collected the majority of our rent in advance, estimated uncollectible rents and impacts on straight–line rent receivables was not material for the quarter ended March 31, 2020. However, the impact of the COVID–19 pandemic on our tenants' ability to pay rent in could have a significant impact in future periods.

Cash Flows

The following table sets forth our changes in cash flows (in thousands):
 Three months ended March 31,   Three months ended March 31,  
 2019 2018 Change 2020 2019 Change
Net cash provided by operating activities $33,214
 $49,966
 $(16,752) $27,340
 $33,214
 $(5,874)
Net cash provided by (used in) investing activities 127,273
 (14,082) 141,355
 (6,377) 127,273
 (133,650)
Net cash used in financing activities (167,898) (38,568) (129,330)
Net cash provided by (used) in financing activities 562,901
 (167,898) 730,799
Effect of foreign currency rate changes on cash and equivalents (10) (28) 18
 (24) (10) (14)
Net decrease in cash and cash equivalents $(7,421) $(2,712) $(4,709)
Net increase (decrease) in cash and cash equivalents $583,840
 $(7,421) $591,261




Operating Activities


The decrease in net cash provided by operating activities in the 2019 period iswas primarily due to reductionsthe sale of the four outlet centers in working capital.March 2019 in addition to lower average occupancy and rent modifications for certain tenants.


Investing Activities


The primary cause for the decrease in net cash provided by investing activities was due to the net proceeds of approximately $128.2 million from the sale of the four outlet centers in the 2019 period.

Financing Activities

The primary cause for the increase in net cash provided by investingfinancing activities was due to the sale$599.8 million draw down under our unsecured lines of our Nags Head, Ocean City, Park City and Williamsburg outlet centers for net proceeds of approximately $128.2 millioncredit in response to the COVID-19 pandemic. In addition, in the 2019 period. In addition, the 2019 period had lower levels of development activity than the 2018 period and higher amounts of distributions received from joint ventures.

Financing Activities

The primary cause for the increase in net cashprior year we used in financing activities was due the use of the proceeds from the sale of our Nags Head, Ocean City, Park City and Williamsburg outlet centers to pay down our unsecured lines of credit. During the 2018 period, we repurchased a portion of our outstanding common shares with a value of approximately $10.0 million. No common share repurchases were made in the 2019 period.




Capital Expenditures


The following table details our capital expenditures (in thousands):
 Three months ended March 31,   Three months ended March 31,  
 2019 2018 Change 2020 2019 Change
Capital expenditures analysis:            
New outlet center developments and expansions $939
 $851
 $88
 $843
 $939
 $(96)
Major outlet center renovations 197
 900
 (703) 2,170
 197
 1,973
Second generation tenant allowances 2,974
 2,926
 48
 908
 2,974
 (2,066)
Other capital expenditures 2,907
 1,823
 1,084
 2,976
 2,907
 69
 7,017
 6,500
 517
 6,897
 7,017
 (120)
Conversion from accrual to cash basis 2,889
 13,214
 (10,325) 3,654
 2,889
 765
Additions to rental property-cash basis $9,906
 $19,714
 $(9,808) $10,551
 $9,906
 $645


Potential Future Developments, Acquisitions and Dispositions


As of the date of this filing, weWe are in the initial study period for potential new developments.developments, including a potential site in Nashville, Tennessee. We may also use joint venture arrangements to develop other potential sites. ThereGiven the uncertainties of the COVID-19 Pandemic, we have temporarily deferred the Nashville project and certain other planned capital expenditures. Accordingly, 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"(“FFO”). See the section "Non-GAAP“Non-GAAP Supplemental Earnings Measures - Funds From Operations"Operations” below for further discussion of FFO. In addition, we regularly evaluate acquisition or disposition proposals and engage from time to time in negotiations for acquisitions or dispositions of properties. We may also enter into letters of intent for the purchase or sale of properties. Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated, or if consummated, may not result in an increase in earnings or liquidity.


Financing Arrangements


As of December 31, 2019, there was no balance outstanding under our unsecured lines of credit. During the second half of March 2020 in response to the COVID-19 pandemic, we drew down approximately $599.8 million under our unsecured lines of credit, which has a maximum borrowing capacity of $600.0 million, and plan to hold as cash to increase liquidity, preserve financial flexibility and assist the Company and Operating Partnership in meeting their obligations for a sustained period of time until there is more clarity regarding the impact of the COVID-19 pandemic. Based on the Operating Partnership's current debt ratings, the interest rate for borrowings under our unsecured lines of credit is LIBOR plus 1.00%.

As of March 31, 2019,2020, unsecured borrowings represented 95%96% of our outstanding debt and 92% of the gross book value of our real estate portfolio was unencumbered. The Company guarantees the Operating Partnership'sPartnership’s obligations under our lines of credit. As of March 31, 2019, we had $584.8 million available under our unsecured lines of credit after taking into account outstanding letters of credit of $170,000.




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. 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 typically made quarterly and interest payments on the senior, unsecured notes are made semi-annually. Amounts accumulated for such payments will be used in the interim to reduce the outstanding borrowings under our existing unsecured lines of credit or invested in short-term money market or other suitable instruments.


While we did not incur significant disruptions during the three months ended March 31, 2020 from the COVID-19 pandemic, we are unable to predict at the present time the ultimate impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows for the second quarter of 2020 and thereafter due to numerous uncertainties. At the end of April 2020, we had $594.0 million of cash on our balance sheet. Based on pre-COVID-19 estimated monthly cash expenditures of approximately $25 million per month, we expect to have sufficient liquidity to meet our obligations, even under our most conservative rent collection scenario of not receiving any rent, for approximately two years (this scenario excludes common share dividends and debt maturities during that period and assumes we remain in compliance with all debt covenants). For further discussion of COVID-19, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-COVID-19 Pandemic”.




We believe our current balance sheet position is financially sound; however, due to the economic uncertainty caused by the COVID-19 pandemic and the inherent uncertainty and unpredictability of the capital and credit markets, we can give no assurance that affordable access to capital will exist between now and when our next significant debt matures, which is our unsecured lines of credit. The unsecured lines of credit expire in October 2021, with a one-year extension option thatwhereby we may extend the maturity to 2022. At March 31, 2019, amounts outstanding under our unsecured lines of credit, which provide for borrowings up to $600.0 million, totaled $15.0 million.
 
The interest rate spreads associated with our unsecured lines of credit and our unsecured term loan are based on the higher of our currenttwo investment grade credit rating.  Ifratings.  Changes to our credit rating is downgraded or upgraded,ratings could cause our interest rate spread wouldto adjust accordingly. In February 2020, due to a change in our credit rating, our interest rate spread over LIBOR on our $600.0 million unsecured line of credit facility increased from 0.875% to 1.0% and our annual facility fee increased from 0.15% to 0.20%. In addition, our interest rate spread over LIBOR on our $350.0 million unsecured term loan increased from 0.90% to 1.0%.


The Operating Partnership'sPartnership’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 inThe financial impact of the COVID-19 pandemic could negatively impact our future compliance with allfinancial covenants of our existingcredit facilities, term loan and other debt covenants; however, should circumstances arise thatagreements and result in a default and potentially an acceleration of indebtedness. Our continued compliance with these covenants depends on many factors and could be impacted by current or future economic conditions associated with the COVID-19 pandemic. Failure to comply with these covenants would cause usresult in a default which, if we were unable to becure or obtain a waiver from the lenders, could accelerate the repayment obligations. Further, in the event of default, the various lenders wouldCompany may be restricted from paying dividends to its shareholders in excess of dividends required to maintain its REIT qualification. Accordingly, an event of default could have a material and adverse impact on us. As a result, we have considered our short-term (one year or less from the date of filing these financial statements) liquidity needs and the adequacy of our estimated cash flows from operating activities and other financing sources to meet these needs. These other sources include but are not limited to: existing cash, ongoing relationships with certain financial institutions, our ability to acceleratesell debt or issue equity subject to market conditions and proceeds from the maturity onpotential sale of non-core assets. We believe that we have access to the necessary financing to fund our outstanding debt.short-term liquidity needs.


WeAs of March 31, 2020, we believe our most restrictive covenants are contained in our senior, unsecured notes. Key financial covenants and their covenant levels, which are calculated based on contractual terms, include the following:
Senior unsecured notes financial covenantsRequiredActual

Total consolidated debt to adjusted total assets<60%4955%
Total secured debt to adjusted total assets<40%32%
Total unencumbered assets to unsecured debt>150%196175%


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



CONTRACTUAL OBLIGATIONS

There were no material changes in our commitments during the three months ended March 31, 2020 under contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, other than the following table updates to our contractual obligations for debt and interest payments over the next five years and thereafter as of March 31, 2020 (in thousands):
Contractual Obligations Remainder of 2020 2021 2022 2023 2024 Thereafter Total
Debt (1)
 $2,694
 $657,023
 $4,436
 $254,768
 $605,140
 $657,206
 $2,181,267
Interest payments (2)
 $50,588
 $63,205
 $52,022
 $50,883
 $34,838
 $48,516
 $300,052

(1)These amounts represent total future cash payments related to debt obligations outstanding as of March 31, 2020.
(2)These amounts represent future interest payments related to our debt obligations based on the fixed and variable interest rates specified in the associated debt agreements, including the effects of our interest rate swaps. All of our variable rate debt agreements are based on the one month LIBOR rate, thus for purposes of calculating future interest amounts on variable interest rate debt, the one month LIBOR rate as of March 31, 2020 was used.



OFF-BALANCE SHEET ARRANGEMENTS


We have partial ownership interests in 8seven unconsolidated outlet centers totaling approximately 2.42.2 million square feet, including 4three outlet centers in Canada. See Note 45 to the consolidated financial statements for details of our individual joint ventures, including, but not limited to, carrying values of our investments, fees we receive for services provided to the joint ventures, recent development and financing transactions and condensed combined summary financial information.


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 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 2019for the next twelve months based on their sources of working capital, specifically cash flow from operations, access to contributions from partners, and ability to refinance debt obligations, including the ability to exercise upcoming extensions of near term maturities.


Our joint ventures are typically encumbered by a mortgage on the joint venture property. We provide guarantees to lenders for our joint ventures which include standard non-recourse carve out indemnifications for losses arising from items such as but not limited to fraud, physical waste, payment of taxes, environmental indemnities, misapplication of insurance proceeds or security deposits and failure to maintain required insurance. A default by a joint venture under its debt obligations may expose us to liability under the guaranty. For construction and mortgage loans, we may include a guaranty of completion as well as a principal guaranty ranging from 5% to 100% of principal.  The principal guarantees include terms for release based upon satisfactory completion of construction and performance targets including occupancy thresholds and minimum debt service coverage tests. Our joint ventures may contain make whole provisions in the event that demands are made on any existing guarantees.




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 March 31, 20192020 (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 2020 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 95.0
 January 2030 4.63% —% —
 95.0
 January 2030 4.63% —% —
RioCan Canada 9.4
 May 2020 5.75% 31.9% 3.0
 8.3
 May 2020 5.75% 33.7% 2.8
Debt premium and debt origination costs (1.4)         (1.1)        
 $368.0
       $19.4
 $367.2
       $19.2








CRITICAL ACCOUNTING POLICIES AND ESTIMATES


Refer to our 20182019 Annual Report on Form 10-K of the Company and the Operating Partnership for a discussion of our critical accounting policies which include principles of consolidation, acquisition of real estate, cost capitalization, impairment of long-lived assets and revenue recognition. ThereOther than noted below, there have been no material changes to these policies in 2019, other than2020.

If the adoptioneffects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate or if our expected holding period for assets change, subsequent tests for impairment could result in additional impairment charges in the future. We can provide no assurance that material impairment charges with respect to our investment properties will not occur during the remaining quarters in 2020 or future periods.

When assessing the collectability of future lease payments, one of the key factors we have considered during 2020 has been COVID-19. We generally assess collectability based on an analysis of creditworthiness, economic trends, and other facts and circumstances related to the applicable tenants. If the collection of substantially all of the future lease payments is less than probable, we will write-off the receivable balances associated with the lease and cease to recognize lease income, including straight-line rent, unless cash is received. As we have historically collected the majority of our rent in advance, estimated uncollectible rents and impacts on straight–line rent receivables were not material for the quarter ended March 31, 2020. However, the impact of the COVID–19 pandemic on our tenants' ability to pay rent could have a significant impact in future periods.

In April 2020, the Financial Accounting Standards Codification Topic 842, Leases, described in Note 17 -LeasesBoard (“FASB”) staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the unauditedCOVID-19 pandemic. Under existing lease guidance, we would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We have elected to apply such relief and will avail itself of the election to avoid performing a lease by lease analysis. The Lease Modification Q&A did not have a material impact on our consolidated financial statements as of and for the three months ended March 31, 2020, however, its future impact to us is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in Part I, Item Ifuture periods and the elections made by us at the time of this Quarterly Report on Form 10-Q.entering into such concessions.






NON-GAAP SUPPLEMENTAL MEASURES


Beginning with the three months ended March 31, 2020, we have elected to supplement our disclosure with three additional non-GAAP measures, Adjusted EBITDA, EBITDAre and Adjusted EBITDAre (each as defined below), that are commonly provided in the REIT industry. See “Adjusted EBITDA, EBITDAre and Adjusted EBITDAre” below for more information. We also now refer to Adjusted Funds from Operations (“AFFO”) as Core Funds From Operations (“Core FFO”), but there has been no change to the definition of this measure.

Funds From Operations


Funds From Operations ("FFO"(“FFO”) is a widely used measure of the operating performance for real estate companies that supplements net income (loss) determined in accordance with GAAP.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"(“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 generally accepted accounting principles in the United States (“GAAP”),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.


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 Funds From Operations


If applicable, we present Core FFO (formerly referred to as AFFO) 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.





Below is a reconciliation of net income to FFO available to common shareholders (in thousands, except per share amounts):
 Three months ended Three months ended
 March 31, March 31,
 2019 2018 2020 2019
Net income $65,841
 $23,685
Net income (loss) $(28,119) $65,841
Adjusted for:        
Depreciation and amortization of real estate assets - consolidated 31,148
 32,542
 28,801
 31,148
Depreciation and amortization of real estate assets - unconsolidated joint ventures 3,130
 3,229
 3,018
 3,130
Impairment charge - consolidated 45,675
 —
Gain on sale of assets (43,422) —
 —
 (43,422)
FFO 56,697
 59,456
 49,375
 56,697
FFO attributable to noncontrolling interests in other consolidated partnerships (195) 370
 (190) (195)
Allocation of earnings to participating securities (611) (477) (516) (611)
FFO available to common shareholders (1)
 $55,891
 $59,349
 $48,669
 $55,891
FFO available to common shareholders per share - diluted (1)
 $0.57
 $0.60
 $0.50
 $0.57
        
Weighted Average Shares:        
Basic weighted average common shares 93,303
 93,644
 92,500
 93,303
Diluted weighted average common shares (for earnings per share computations) 93,303
 93,644
 92,500
 93,303
Exchangeable operating partnership units 4,961
 4,996
 4,911
 4,961
Diluted weighted average common shares (for FFO per share computations) (1)
 98,264
 98,640
 97,411
 98,264
(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'sCompany’s common shares, subject to certain limitations to preserve the Company'sCompany’s REIT status.


Portfolio Net Operating Income and Same Center NOI


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


We 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, 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.





Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio (in thousands):
 Three months ended Three months ended
 March 31, March 31,
 2019 2018 2020 2019
Net income $65,841
 $23,685
Net income (loss) $(28,119) $65,841
Adjusted to exclude:        
Equity in earnings of unconsolidated joint ventures (1,629) (2,194) (1,527) (1,629)
Interest expense 16,307
 15,800
 15,196
 16,307
Gain on sale of assets (43,422) —
 —
 (43,422)
Other non-operating income (224) (209) (220) (224)
Impairment charge 45,675
 —
Depreciation and amortization 31,760
 33,123
 29,417
 31,760
Other non-property expense 161
 388
 139
 150
Corporate general and administrative expenses 12,118
 10,754
 12,579
 12,132
Non-cash adjustments(1)
 (1,472) (1,367) (1,502) (1,472)
Lease termination fees (1,130) (1,051) (164) (1,130)
Portfolio NOI 78,310
 78,929
 71,474
 78,313
Non-same center NOI(2)
 (4,084) (4,367) —
 (4,081)
Same Center NOI $74,226
 $74,562
 $71,474
 $74,232
(1)Non-cash items include straight-line rent, above and below market rent amortization, straight-line rent expense on land leases and gains or losses on outparcel sales, as applicable.
(2)Excluded from Same Center NOI:
Outlet centers sold:
Nags Head, Ocean City, Park City, and WilliamsburgMarch 2019






































Adjusted EBITDA, EBITDAre and Adjusted EBITDAre

We present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as adjusted for items described below (“Adjusted EBITDA”), EBITDA for Real Estate (“EBITDAre”) and Adjusted EBITDAre, all non-GAAP measures, as supplemental measures of our operating performance. Each of these measures is defined as follows:
We define Adjusted EBITDA as net income/(loss) available to the Company’s common shareholders computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization, gains and losses on sale of operating properties, gains and losses on change of control, 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, 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 interest expense, income taxes, 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.
If applicable, Adjusted EBITDAre is defined as EBITDAre excluding gains and losses on extinguishment of debt, net and other items that that we do not consider indicative of the Company's ongoing operating performance.
We present Adjusted EBITDA, EBITDAre and, if applicable, Adjusted EBITDAre as we believe they are useful for investors, creditors and rating agencies as they provide additional performance measures that are independent of a Company’s existing capital structure to facilitate the evaluation and comparison of the Company’s operating performance to other REITs and provide a more consistent metric for comparing the operating performance of the Company’s real estate between periods.
Adjusted EBITDA, EBITDAre and Adjusted EBITDAre have significant limitations as analytical tools, including:
They do not reflect our interest expense;

They do not reflect gains or losses on sales of operating properties or impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate;

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

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

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



Below is a reconciliation of Net Income to Adjusted EBITDA (in thousands):
  Three months ended
  March 31, March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Adjusted to exclude:    
Interest expense 15,196
 16,307
Depreciation and amortization 29,417
 31,760
Impairment charge - consolidated 45,675
 —
Gain on sale of assets —
 (43,422)
Adjusted EBITDA $62,169
 $70,486

Below is a reconciliation of Net Income to EBITDAre (in thousands):

  Three months ended
  March 31, March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Adjusted to exclude:    
Interest expense 15,196
 16,307
Depreciation and amortization 29,417
 31,760
Impairment charge - consolidated 45,675
 —
Gain on sale of assets —
 (43,422)
Pro-rata share of interest expense - unconsolidated joint ventures 1,867
 2,067
Pro-rata share of depreciation and amortization - unconsolidated joint ventures 3,018
 3,129
EBITDAre $67,054
 $75,682








ECONOMIC CONDITIONS AND OUTLOOK


The majority of our leases contain provisions designed to mitigate the impact of inflation. Such provisions include clauses for the escalation of base rent and clauses enabling us to receive percentage rentals based on tenants'tenants’ gross sales (above predetermined levels) which generally increase as prices rise. A component of most leases includes a pro-rata share or escalating fixed contributions by the tenant for property operating expenses, including CAM,common area maintenance, real estate taxes, insurance and advertising and promotion, thereby reducing exposure to increases in costs and operating expenses resulting from inflation.

A portion of our rental revenues are derived from rents that directly depend on the sales volume of certain tenants. Accordingly, declines in these tenants'tenants’ sales would reduce the income produced by our properties. If the sales or profitability of our retail tenants decline sufficiently, whether due to a change in consumer preferences, health concerns, legislative changes that increase the cost of their operations or otherwise, such tenants may be unable to pay their existing rents as such rents would represent a higher percentage of their sales.

The current challenging retail environment could impact our business As a result of the COVID-19 pandemic, we have seen reductions in the short-term as our operations are subject to the results of operations of our retail tenants. While we believe outlet stores will continue to be a profitable and fundamental distribution channel for many brand name manufacturers, some retail formats are more successful than others. As is typical in the retail industry, certain tenants have closed, or will close, certain stores by terminating their lease prior to its natural expiration orrental revenues as a result of filing for protection under bankruptcy laws, or may request modifications to their existing lease terms. During 2018, fivedeclines in the sales volumes of our tenants filed for bankruptcy protection and during the three months ended March 31, 2019, three of our tenants have filed for bankruptcy protection. Largely due to the number of bankruptcy filings, store closings and rent adjustments in 2018, along with the expectations of further bankruptcies, brand-wide restructurings by retailers and potential select rent adjustments in 2019, we currently expect our Same Center NOI for 2019 to decline compared to 2018. If the combined level of bankruptcy filings, store closings and rent adjustments during 2019 are a greater level than we currently anticipate, our 2019 results of operations and Same Center NOI could be further negatively impacted.

Due to the relatively short-term nature of our tenants' leases, a significant portion of the leases in our portfolio come up for renewal each year. As of January 1, 2019, we had approximately 1.3 million square feet, or 11% of our consolidated portfolio at that time coming up for renewal during 2019, excluding the outlet centers sold in March 2019. As of March 31, 2019, we had renewed approximately 58% of this space. In addition, for the rolling twelve months ended March 31, 2019, we completed renewals and re-tenanted space totaling 1.8 million square feet at a blended 4.7% increase in average base rental rates compared to the expiring rates. While we continue to attract and retain additional tenants, there can be no assurance that we can achieve similar base rental rates. In addition, if we were unable to successfully renew or re-lease a significant amount of this space on favorable economic terms, the loss in rent could have a material adverse effect on our results of operations.

certain tenants.
Our outlet centers typically include well-known, national, brand name companies. By maintaining a broad base of well-known tenants and a geographically diverse portfolio of properties located across the United States, we believe we reduce our operating and leasing risks. No one tenant (including affiliates) accounts for more than 8% of our square feet or 7%6% of our rental revenues. Accordingly, although
Due to the relatively short-term nature of our tenants’ leases, a significant portion of the leases in our portfolio come up for renewal each year. As of January 1, 2020, we can give no assurance,had approximately 1.7 million square feet, or 14% of our consolidated portfolio at that time coming up for renewal during 2020. As of March 31, 2020, we do not expect any material adversehad renewed approximately 52% of this space. In addition, for the rolling twelve months ended March 31, 2020, we completed renewals and re-tenanted space totaling 1.3 million square feet at a blended 1.5% decrease in average base rental rates compared to the expiring rates.

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our tenants and business partners. For a complete discussion of the impact the pandemic is having on our resultscurrent operations, the steps we have taken to increase liquidity and preserve financial flexibility to meet our obligations for a sustained period of time until there is more clarity about the impact of the pandemic and the uncertainties around our future operations and financial condition, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-COVID-19 Pandemic”.

The current challenging retail environment has impacted our business as our operations are subject to the operating results and operating decisions of our retail tenants. As is typical in the retail industry, certain tenants have closed, or will close, certain stores by terminating their lease prior to its contractual expiration or as a result of leasesfiling for protection under bankruptcy laws, or may request modifications to their existing lease terms. We have recaptured approximately 332,000 square feet within our consolidated portfolio during the three months ended March 31, 2020 related to bankruptcies and brand-wide restructurings by retailers, compared to 82,000 square feet for the three months ended March 31, 2019. We expect other store closings or rent modifications to impact our operating results in 2020. In addition, J. Crew Group, which has 26 stores comprising approximately 140,000 of square feet in our consolidated portfolio, has recently filed for bankruptcy and, at the time of this filing, the impact this may have on our revenues is unknown. Due to these store closures, as well as additional potential closures, tenant bankruptcies and rent adjustments that may result from the impact of the COVID-19 pandemic, we currently expect our Same Center NOI for 2020 compared to 2019 to be renewed oradversely impacted.
We believe outlet stores will continue to be re-leased.a profitable and fundamental distribution channel for many brand name manufacturers. While we continue to attract and retain additional tenants, if we were unable to successfully renew or re-lease a significant amount of this space on favorable economic terms or in a timely manner, the loss in rent and our Same Center NOI could be further negatively impacted in 2020 and 2021. Occupancy at our consolidated centers was 95.4%94.3% and 95.9%95.4% as of March 31, 2020 and 2019, respectively. As a result of COVID-19, occupancy could be negatively impacted in 2020 and 2018, respectively.2021.








Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk


We are exposed to various market risks, including changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. We may periodically enter into certain interest rate protection and interest rate swap agreements to effectively convert existing floating rate debt to a fixed rate basis. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk


We may periodically enter into certain interest rate protection and interest rate swap agreements to effectively convert existing floating rate debt to a fixed rate basis. We do not enter into derivatives or other financial instruments for trading or speculative purposes. We currently have interest rate swap agreements to fix the interest rates on outstanding debt with notional amounts totaling $365.0$540.0 million. See Note 78 to the consolidated financial statements for additional details related to our outstanding derivatives.


As of March 31, 2019, 3%2020, 28% of our outstanding consolidated debt, excluding the amount of variable rate debt with interest rate protection agreements in place, had variable interest rates and therefore werewas subject to market fluctuations. An increaseA change in the LIBOR index of 100 basis points would result in an increase or decrease of approximately $514,000$6.1 million in interest expense on an annual basis. The information presented herein is merely an estimate and has limited predictive value.  As a result, the ultimate effect upon our operating results of interest rate fluctuations will depend on the interest rate exposures that arise during the period, our hedging strategies at that time and future changes in the level of interest rates.


The estimated fair value and recorded value of our debt consisting of senior unsecured notes, unsecured term loans, secured mortgages and unsecured lines of credit were as follows (in thousands):
 March 31, 2019 December 31, 2018 March 31, 2020 December 31, 2019
Fair value of debt $1,568,771
 $1,668,475
 $2,181,170
 $1,603,814
Recorded value of debt $1,582,784
 $1,712,918
 $2,167,554
 $1,569,773


A 100 basis point increase from prevailing interest rates at March 31, 20192020 and December 31, 20182019 would result in a decrease in fair value of total consolidated debt of approximately $65.7$58.6 million and $65.6$62.9 million, respectively. Refer to Note 89 to the consolidated financial statements for a description of our methodology in calculating the estimated fair value of debt. Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Companywe could realize on the disposition of the financial instruments. In addition, the COVID-19 pandemic may impact markets, rates, behavior and other estimates used in the above scenarios.


Foreign Currency Risk


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






Item 4. Controls and Procedures


Tanger Factory Outlet Centers, Inc. Controls and Procedures


The Company'sCompany’s management carried out an evaluation, with the participation of the Company'sCompany’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company'sCompany’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2019.2020. Based on this evaluation, the Company'sCompany’s Chief Executive Officer and Chief Financial Officer have concluded that the Company'sCompany’s disclosure controls and procedures were effective as of March 31, 2019. During the three months ended March 31, 2019, the Company implemented changes to its internal controls related to the adoption of the lease accounting standard ASC 842.2020. There were no other changes to the Company'sCompany’s internal control over financial reporting during the quarter ended March 31, 2019,2020, that materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.We have not experienced any material impact to our internal control over financial reporting to date as a result of most of our employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact to their design and operating effectiveness.


Tanger Properties Limited Partnership Controls and Procedures


The management of the Operating Partnership'sPartnership’s general partner carried out an evaluation, with the participation of the Chief Executive Officer and the Vice-President and Treasurer (Principal Financial Officer) of the Operating Partnership'sPartnership’s general partner, of the effectiveness of the Operating Partnership'sPartnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2019.2020. Based on this evaluation, the Chief Executive Officer of the Operating Partnership'sPartnership’s general partner, and the Vice-President and Treasurer of the Operating Partnership'sPartnership’s general partner, have concluded that the Operating Partnership'sPartnership’s disclosure controls and procedures were effective as of March 31, 2019. During the three months ended March 31, 2019, the Operating Partnership implemented changes to its internal controls related to the adoption of the lease accounting standard ASC 842.There2020. There were no other changes to the Operating Partnership'sPartnership’s internal control over financial reporting during the quarter ended March 31, 2019,2020, that materially affected, or are reasonably likely to materially affect, the Operating Partnership'sPartnership’s internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting to date as a result of most of our employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact to their design and operating effectiveness.






PART II. OTHER INFORMATION


Item 1. Legal Proceedings


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


Item 1A. Risk Factors


There have been no material changes fromThe following information updates the risk factors disclosed in the "Risk Factors"“Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2018.2019. Except for the additional risk factor provided below, there have been no material changes in the Company's risk factors from those disclosed in the 2019 Form 10-K.

Item 2. Unregistered SalesThe current COVID-19 Pandemic has negatively affected and will likely continue to negatively affect our business, financial condition, liquidity and results of Equity Securitiesoperations and Use of Proceeds

(c) Issuer Purchases of Equity Securities

On May 19, 2017, we announced that our Board of Directors authorized the repurchase of up to $125.0 millionthose of our outstanding common shares as market conditions warrant over a period commencingtenants.

The current COVID-19 pandemic has had, and likely will continue to have, repercussions across local, national and global economies and financial markets. COVID-19 has impacted all states where our tenants operate their businesses or where our properties are located and measures taken to prevent or remediate COVID-19, including “shelter-in place” or “stay-at-home” orders or other quarantine mandates issued by local, state or federal authorities, have had an adverse effect on May 19, 2017our business and expiring on May 18, 2019.  In February 2019, the Company's Boardbusinesses of Directors authorized the repurchase of up to an additional $44.3 million of its outstanding common shares for a total remaining authorized amount of $100.0 million.our tenants. The Board of Directors also extended the expirationfull extent of the existing plan by two yearsadverse impact on our results of operations, liquidity (including our ability to May 2021. Repurchasesaccess capital markets), and our ability to develop, acquire, dispose or lease properties for our portfolio, is unknown and will depend on future developments, which are highly uncertain and cannot be predicted. Our results of operations, liquidity and cash flows could be materially affected.

Many of our tenants operate in industries that depend on in-person interactions with their customers to be profitable and to fund their obligations under lease agreements with us. Measures taken to prevent or remediate COVID-19, including “shelter-in-place” or “stay-at-home” orders or other quarantine mandates have, with respect to some portion of our tenants, (i) prevented our tenants from being able to open their stores and conduct business or limited the hours in which they may conduct business, and/or (ii) decreased or prevented our tenants’ customers’ willingness or ability to frequent their businesses. Tenants may also, as a result of such public health crisis, orders or mandates and any resulting economic downturn, request rent deferrals, rent abatement or early termination of their leases as well as may be made from timeforced to time through open market, privately-negotiated, structuredtemporarily or derivative transactions (including accelerated share repurchase transactions),permanently close or other methodsdeclare bankruptcy which could reduce our cash flows and negatively affect our ability to pay dividends. Specifically, as a result of acquiring shares. The Company intendsCOVID-19 and various governmental orders currently in place, a number of our tenants have either closed their business or are operating with limited operations and/or have submitted requests for rent relief or failed to structure open market purchasespay rent. In addition, state, local or industry-initiated efforts, such as tenant rent freezes or suspension of a landlord’s ability to occur within pricing and volume requirements of Rule 10b-18.  The Companyenforce evictions, may from timealso affect our ability to time, enter into Rule 10b5-1 plans to facilitate the repurchase of its shares under this authorization.

The following table summarizes our common share repurchasescollect rent or enforce remedies for the fiscalfailure to pay rent. In late March, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021. As we have historically collected the majority of our rent in advance, estimated uncollectible rents and impacts on straight–line rent receivables was not material for the quarter ended March 31, 2019:2020. However, the impact of the COVID–19 pandemic on our tenants' ability to pay rent could have a significant impact in future periods. We believe our tenants do not have a clear contractual right to cease paying rent due to government mandated closures and we intend to enforce our rights under the lease agreements. However, COVID-19 and the related governmental orders present fairly novel situations for which the ultimate legal outcome cannot be assured and it is possible future governmental action could impact our rights under the lease agreements. The extent of tenant requests and actions and the impact to the Company’s results of operations and cash flows is uncertain and cannot be predicted.


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)
January 1, 2019 to January 31, 2019 —
 $—
 —
 $55.7
February 1, 2019 to February 28, 2019 —
 —
 —
 100.0
March 1, 2019 to March 31, 2019 —
 —
 —
 100.0
Total —
 $—
 —
 $100.0


The COVID-19 pandemic, or a future pandemic, could also have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

the reduced economic activity that could result in a prolonged recession and may consequently negatively impact consumer discretionary spending;
difficulty accessing debt and equity capital on attractive terms, or at all, deteriorations in our credit ratings, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants' ability to fund their business operations and meet their obligations to us;
the financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our liquidity;
any impairment in value of our tangible or intangible assets which could be recorded as a result of a weaker economic conditions;
a general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties;
a deterioration in our or our tenants' ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants' efficient operations could adversely affect our operations and those of our tenants;
a significant increase in the number of tenants that file for Chapter 11 bankruptcy;
adverse impacts from requiring most employees to work remotely, such as reductions in productivity and heightened cybersecurity risks; and
the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.








Item 6. Exhibits
Exhibit Number Exhibit Descriptions
   
10.1
Employment Agreement of Stephen Yalof Dated April 6, 2020 (Incorporated by reference to Exhibit 10.1 to the Company’s and Operating Partnership’s Current Report on Form 8-K dated April 6, 2020.)
   
31.1*10.2
 
First Amendment to Employment Agreement of Stephen Yalof Dated April 9, 2020 (Incorporated by reference to Exhibit 10.2 to the Company’s and Operating Partnership’s Current Report on Form 8-K dated April 6, 2020.)
10.3
Amended and Restated Employment Agreement of Steven B. Tanger Dated April 28, 2020 (Incorporated by reference to Exhibit 10.1 to the Company’s and Operating Partnership’s Current Report on Form 8-K dated April 29, 2020.)
10.4
Form of Inducement Restricted Share Award Agreement between the Company and Stephen Yalof (Incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 dated April 10, 2020).
10.5*
Inducement Option Award Agreement between the Company and Stephen Yalof, dated April 10, 2020.
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.
   
101***101.INS*
 The following financial statements from Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership's dual Quarterly Report on Form 10-Q forInline XBRL Instance Document - the quarter ended March 31, 2019, formattedInstance Document does not appear 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).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 contained in Exhibit 101)
   
  * Filed herewith.
  ** Furnished herewith.
*** Submitted herewith.






SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: May 7, 201911, 2020
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)








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