United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20202021
OR
☐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: 1-11986 (Tanger Factory Outlet Centers, Inc.)
Commission file number: 333-3526-01 (Tanger Properties Limited Partnership)


TANGER FACTORY OUTLET CENTERS, INC.INC.
TANGER PROPERTIES LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
North Carolina(Tanger Factory Outlet Centers, Inc.)56-1815473
North Carolina(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,, NC27408
(Address of principal executive offices) (Zip Code)
(336) (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 registrant (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 registrant 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.Yes☒No☐
Tanger Properties Limited PartnershipYes☒No☐

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.Yes☒No☐
Tanger Properties Limited PartnershipYes☒No☐

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,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Tanger Factory Outlet Centers, Inc.
Large Accelerated Filer☒Accelerated Filer☐
Non-accelerated Filer☐Smaller Reporting Company☐
Emerging Growth Company☐
Tanger Properties Limited Partnership
Large Accelerated Filer☐Accelerated Filer☐
Non-accelerated Filer☒��Smaller Reporting Company☐
Emerging Growth 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.☐
Tanger Properties Limited Partnership☐

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

Tanger Factory Outlet Centers, Inc.Yes☐No☒
Tanger Properties Limited PartnershipYes☐No☒


As of May 6, 2020,April 30, 2021, there were 93,466,009100,804,077 common shares of Tanger Factory Outlet Centers,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, 20202021 of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership. Unless the context indicates otherwise, the term “Company” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term “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”) 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, 2020,2021, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned 93,076,701100,794,577 units of the Operating Partnership and other limited partners (the “Non-Company LPs”) collectively owned 4,911,1734,794,643 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s status as a REIT. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.

Management operates the Company and the Operating Partnership as one enterprise. The management of the Company consists of the same members as the management of the Operating Partnership. These individuals are officers of the Company and employees of the Operating Partnership. The individuals that comprise the Company’s Board of Directors are also the same individuals that make up Tanger GP Trust’s Board of Trustees.

We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:

•enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

•creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

There are only a few differences between the Company and the Operating Partnership, which are reflected in the disclosure in this report. We believe it is important, however, to understand these differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated consolidated company.

As stated above, the Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership through its wholly-owned subsidiaries, the Tanger GP Trust and Tanger LP Trust. As a result, the Company does not conduct business itself, other than issuing public equity from time to time and incurring expenses required to operate as a public company. However, all operating expenses incurred by the Company are reimbursed by the Operating Partnership, thus the only material item on the Company’s 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.
2



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, shareholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partnership interests in the Operating Partnership held by the Non-Company LPs are accounted for as partners’ capital in the Operating Partnership’s financial statements and as noncontrolling interests in the Company’s financial statements.

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

•Consolidated financial statements;

•The following notes to the consolidated financial statements:

•Debt of the Company and the Operating Partnership;

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

•Earnings Per Share and Earnings Per Unit;

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

•Liquidity and Capital Resources in the Management’s 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.

3

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, 20202021 and December 31, 20192020
56
Consolidated Statements of Operations - for the three months ended March 31, 20202021 and 20192020
67
Consolidated Statements of Comprehensive Income - for the three months ended March 31, 20202021 and 20192020
78
Consolidated Statements of Shareholders’ Equity - for the three months ended March 31, 20202021 and 20192020
89
Consolidated Statements of Cash Flows - for the three months ended March 31, 20202021 and 20192020
1011
FINANCIAL STATEMENTS OF TANGER PROPERTIES LIMITED PARTNERSHIP (Unaudited)
Consolidated Balance Sheets - as of March 31, 20202021 and December 31, 20192020
1112
Consolidated Statements of Operations - for the three months ended March 31, 20202021 and 20192020
1213
Consolidated Statements of Comprehensive Income - for the three months ended March 31, 20202021 and 20192020
1314
Consolidated Statements of Equity - for the three months ended March 31, 20202021 and 20192020
1415
Consolidated Statements of Cash Flows - for the three months ended March 31, 20202021 and 20192020
1516
Condensed Notes to Consolidated Financial Statements of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership
1617
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
3638
Item 3. Quantitative and Qualitative Disclosures about Market Risk
6061
Item 4. Controls and Procedures (Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership)
62
Part II. Other Information
Item 1. Legal Proceedings
63
Item 1A. Risk Factors
63
Item 6. Exhibits
65
Signatures
66

4

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, 2020 December 31, 2019March 31, 2021December 31, 2020
Assets  
  
Assets  
Rental property:  
  
Rental property:  
Land $266,537
 $266,537
Land$265,714 $265,968 
Buildings, improvements and fixtures 2,564,224
 2,630,357
Buildings, improvements and fixtures2,519,214 2,527,404 
 2,830,761
 2,896,894
2,784,928 2,793,372 
Accumulated depreciation (1,007,922) (1,009,951)Accumulated depreciation(1,078,999)(1,054,993)
Total rental property, net 1,822,839
 1,886,943
Total rental property, net1,705,929 1,738,379 
Cash and cash equivalents 600,454
 16,672
Cash and cash equivalents201,721 84,832 
Investments in unconsolidated joint ventures 86,478
 94,691
Investments in unconsolidated joint ventures89,482 94,579 
Deferred lease costs and other intangibles, net 97,560
 96,712
Deferred lease costs and other intangibles, net81,807 84,960 
Operating lease right-of-use assets 83,764
 86,575
Operating lease right-of-use assets81,222 81,499 
Prepaids and other assets 100,674
 103,618
Prepaids and other assets99,260 105,282 
Total assets $2,791,769
 $2,285,211
Total assets$2,259,421 $2,189,531 
Liabilities and Equity    Liabilities and Equity  
Liabilities  
  
Liabilities  
Debt:  
  
Debt:  
Senior, unsecured notes, net $1,139,093
 $1,138,603
Senior, unsecured notes, net$1,141,074 $1,140,576 
Unsecured term loan, net 347,531
 347,367
Unsecured term loan, net322,753 347,370 
Mortgages payable, net 82,856
 83,803
Mortgages payable, net78,933 79,940 
Unsecured lines of credit, net 598,074
 —
Unsecured lines of creditUnsecured lines of credit0 0 
Total debt 2,167,554
 1,569,773
Total debt1,542,760 1,567,886 
Accounts payable and accrued expenses 90,659
 79,562
Accounts payable and accrued expenses68,084 88,253 
Operating lease liabilities 91,017
 91,237
Operating lease liabilities89,870 90,105 
Other liabilities 94,881
 88,530
Other liabilities75,693 84,404 
Total liabilities 2,444,111
 1,829,102
Total liabilities1,776,407 1,830,648 
Commitments and contingencies 


 


Commitments and contingencies00
Equity  
  
Equity  
Tanger Factory Outlet Centers, Inc.:  
  
Tanger Factory Outlet Centers, Inc.:  
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
Common shares, $0.01 par value, 300,000,000 shares authorized, 100,794,577 and 93,569,801 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectivelyCommon shares, $0.01 par value, 300,000,000 shares authorized, 100,794,577 and 93,569,801 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively1,008 936 
Paid in capital 778,062
 775,035
Paid in capital913,236 787,143 
Accumulated distributions in excess of net income  (410,532) (317,263)Accumulated distributions in excess of net income (432,895)(420,104)
Accumulated other comprehensive loss (38,228) (25,495)Accumulated other comprehensive loss(20,268)(26,585)
Equity attributable to Tanger Factory Outlet Centers, Inc. 330,233
 433,206
Equity attributable to Tanger Factory Outlet Centers, Inc.461,081 341,390 
Equity attributable to noncontrolling interests:    Equity attributable to noncontrolling interests:
Noncontrolling interests in Operating Partnership 17,425
 22,903
Noncontrolling interests in Operating Partnership21,933 17,493 
Noncontrolling interests in other consolidated partnerships —
 —
Noncontrolling interests in other consolidated partnerships0 0 
Total equity 347,658
 456,109
Total equity483,014 358,883 
Total liabilities and equity $2,791,769
 $2,285,211
Total liabilities and equity$2,259,421 $2,189,531 

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

5

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,
 2020 2019 20212020
Revenues:  
  Revenues:  
Rental revenues $108,558
 $119,954
Rental revenues$97,467 $108,558 
Management, leasing and other services 1,443
 1,342
Management, leasing and other services1,372 1,443 
Other revenues 1,632
 1,859
Other revenues1,855 1,632 
Total revenues 111,633
 123,155
Total revenues100,694 111,633 
Expenses:    
Expenses: 
Property operating 38,627
 42,377
Property operating35,311 38,627 
General and administrative 12,584
 12,145
General and administrative16,793 12,584 
Impairment charge 45,675
 —
Impairment charge0 45,675 
Depreciation and amortization 29,417
 31,760
Depreciation and amortization28,150 29,417 
Total expenses 126,303
 86,282
Total expenses80,254 126,303 
Other income (expense):    Other income (expense):
Interest expense (15,196) (16,307)Interest expense(14,362)(15,196)
Gain on sale of assets —
 43,422
Other income 220
 224
Other income (expense)Other income (expense)(3,505)220 
Total other income (expense) (14,976) 27,339
Total other income (expense)(17,867)(14,976)
Income (loss) before equity in earnings of unconsolidated joint ventures (29,646) 64,212
Income (loss) before equity in earnings of unconsolidated joint ventures2,573 (29,646)
Equity in earnings of unconsolidated joint ventures 1,527
 1,629
Equity in earnings of unconsolidated joint ventures1,769 1,527 
Net income (loss) (28,119)
65,841
Net income (loss)4,342 (28,119)
Noncontrolling interests in Operating Partnership 1,427
 (3,315)Noncontrolling interests in Operating Partnership(209)1,427 
Noncontrolling interests in other consolidated partnerships (190) (195)Noncontrolling interests in other consolidated partnerships0 (190)
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(26,882)
$62,331
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc.$4,133 $(26,882)
    
Basic earnings per common share:    Basic earnings per common share:
Net income (loss) $(0.30) $0.66
Net income (loss)$0.04 $(0.30)
Diluted earnings per common share:    Diluted earnings per common share:
Net income (loss) $(0.30) $0.66
Net income (loss)$0.04 $(0.30)
    
The accompanying notes are an integral part of these consolidated financial statements.

6

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)
 Three months ended March 31,Three months ended March 31,
 2020 2019 20212020
Net income (loss) $(28,119) $65,841
Net income (loss)$4,342 $(28,119)
Other comprehensive income (loss):    Other comprehensive income (loss):
Foreign currency translation adjustments (7,733) 1,949
Foreign currency translation adjustments4,639 (7,733)
Change in fair value of cash flow hedges (5,676) (1,952)Change in fair value of cash flow hedges1,998 (5,676)
Other comprehensive income (loss) (13,409) (3)Other comprehensive income (loss)6,637 (13,409)
Comprehensive income (loss) (41,528) 65,838
Comprehensive income (loss)10,979 (41,528)
Comprehensive (income) loss attributable to noncontrolling interests 1,913
 (3,509)Comprehensive (income) loss attributable to noncontrolling interests(529)1,913 
Comprehensive income (loss) attributable to Tanger Factory Outlet Centers, Inc. $(39,615) $62,329
Comprehensive income (loss) attributable to Tanger Factory Outlet Centers, Inc.$10,450 $(39,615)
The accompanying notes are an integral part of these consolidated financial statements.


7

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 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
Net income —
—
62,331
—
62,331
3,315
195
65,841
Other comprehensive loss —
—
—
(2)(2)(1)—
(3)
Compensation under Incentive Award Plan —
3,910
—
—
3,910
—
—
3,910
Grant of 242,167 restricted common share awards, net of forfeitures 3
(3)—
—
—
—
—
—
Withholding of 81,284 common shares for employee income taxes (1)(1,780)—
—
(1,781)—
—
(1,781)
Contributions from noncontrolling interests —
—
—
—
—
—
18
18
Adjustment for noncontrolling interests in Operating Partnership —
(36)—
—
(36)36
—
—
Common dividends
($0.705 per share) (1)
 —
—
(66,368)—
(66,368)—
—
(66,368)
Distributions to noncontrolling interests —
—
—
—
—
(3,496)(213)(3,709)
Balance, March 31, 2019 $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.



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, 2019		$929 $775,035 $(317,263)$(25,495)$433,206 $22,903 $0 $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 forfeitures2 (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)
— — (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 $0 $347,658 
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

8

(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.


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 PartnershipNoncontrolling
interests in
other consolidated partnerships		Total
 equity
Balance,
December 31, 2020		$936 $787,143 $(420,104)$(26,585)$341,390 $17,493 $0 $358,883 
Net income— — 4,133 — 4,133 209 — 4,342 
Other comprehensive income— — — 6,317 6,317 320 — 6,637 
Compensation under Incentive Award Plan— 3,909 — — 3,909 — — 3,909 
Grant of 469,675 restricted common share awards, net of forfeitures5 (5)— — — — — — 
Issuance of 6,867,078 common shares68 128,587 — — 128,655 — — 128,655 
Withholding of 111,977 common shares for employee income taxes(1)(1,636)— — (1,637)— — (1,637)
Contributions from noncontrolling interests— — — — — — 0 0 
Adjustment for noncontrolling interests in Operating Partnership— (4,762)— — (4,762)4,762 — — 
Common dividends
($0.1775 per share)
— — (16,924)— (16,924)— — (16,924)
Distributions to noncontrolling interests— — — — — (851)— (851)
Balance,
March 31, 2021
$1,008 $913,236 $(432,895)$(20,268)$461,081 $21,933 $0 $483,014 


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

9

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,
 2020 2019 20212020
OPERATING ACTIVITIES    
OPERATING ACTIVITIES  
Net income (loss) $(28,119) $65,841
Net income (loss)$4,342 $(28,119)
Adjustments to reconcile net income to net cash provided by operating activities:    Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 29,417
 31,760
Depreciation and amortization28,150 29,417 
Impairment charge 45,675
 —
Impairment charge0 45,675 
Amortization of deferred financing costs 757
 747
Amortization of deferred financing costs1,173 757 
Gain on sale of assets —
 (43,422)
Equity in earnings of unconsolidated joint ventures (1,527) (1,629)Equity in earnings of unconsolidated joint ventures(1,769)(1,527)
Equity-based compensation expense 3,789
 3,818
Equity-based compensation expense3,845 3,789 
Amortization of debt (premiums) and discounts, net 118
 109
Amortization of debt (premiums) and discounts, net127 118 
Amortization (accretion) of market rent rate adjustments, net 362
 480
Amortization (accretion) of market rent rate adjustments, net(213)362 
Straight-line rent adjustments (1,872) (1,970)Straight-line rent adjustments1,043 (1,872)
Distributions of cumulative earnings from unconsolidated joint ventures 1,517
 1,455
Distributions of cumulative earnings from unconsolidated joint ventures890 1,517 
Other non-cashOther non-cash3,638 0 
Changes in other assets and liabilities:    Changes in other assets and liabilities:
Other assets 2,210
 873
Other assets2,981 2,210 
Accounts payable and accrued expenses (25,045) (24,894)Accounts payable and accrued expenses(12,931)(25,045)
Net cash provided by operating activities 27,282
 33,168
Net cash provided by operating activities31,276 27,282 
INVESTING ACTIVITIES    INVESTING ACTIVITIES
Additions to rental property (10,551) (9,906)Additions to rental property(7,357)(10,551)
Additions to investments in unconsolidated joint ventures (261) (779)Additions to investments in unconsolidated joint ventures(7,000)(261)
Net proceeds from sale of assets —
 128,248
Net proceeds from sale of assets8,129 0 
Additions to non-real estate assets (677) (174)Additions to non-real estate assets(414)(677)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 3,488
 8,157
Distributions in excess of cumulative earnings from unconsolidated joint ventures7,631 3,488 
Additions to deferred lease costs (1,220) (1,209)Additions to deferred lease costs(3,668)(1,220)
Other investing activities 2,844
 2,936
Other investing activities5,396 2,844 
Net cash provided by (used) in investing activities (6,377) 127,273
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities2,717 (6,377)
FINANCING ACTIVITIES    FINANCING ACTIVITIES
Cash dividends paid (33,034) (32,910)Cash dividends paid(16,924)(33,034)
Distributions to noncontrolling interests in Operating Partnership (1,744) (1,735)Distributions to noncontrolling interests in Operating Partnership(851)(1,744)
Proceeds from revolving credit facility 634,030
 135,200
Proceeds from revolving credit facility0 634,030 
Repayments of revolving credit facility (34,200) (265,300)Repayments of revolving credit facility0 (34,200)
Repayments of notes, mortgages and loans (873) (825)Repayments of notes, mortgages and loans(25,924)(873)
Employee income taxes paid related to shares withheld upon vesting of equity awards (736) (1,781)Employee income taxes paid related to shares withheld upon vesting of equity awards(1,637)(736)
Additions to deferred financing costs (65) (65)Additions to deferred financing costs(76)(65)
Proceeds from common share offeringProceeds from common share offering128,655 0 
Proceeds from other financing activities 72
 18
Proceeds from other financing activities0 72 
Payment for other financing activities (549) (500)Payment for other financing activities(287)(549)
Net cash provided by (used) in financing activities 562,901
 (167,898)
Net cash provided by financing activitiesNet cash provided by financing activities82,956 562,901 
Effect of foreign currency rate changes on cash and cash equivalents (24) (10)Effect of foreign currency rate changes on cash and cash equivalents(60)(24)
Net increase (decrease) in cash and cash equivalents 583,782
 (7,467)
Net increase in cash and cash equivalentsNet increase in cash and cash equivalents116,889 583,782 
Cash and cash equivalents, beginning of period 16,672
 9,083
Cash and cash equivalents, beginning of period84,832 16,672 
Cash and cash equivalents, end of period $600,454
 $1,616
Cash and cash equivalents, end of period$201,721 $600,454 
The accompanying notes are an integral part of these consolidated financial statements.

10

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, 2020 December 31, 2019March 31, 2021December 31, 2020
Assets  
  
Assets  
Rental property:  
  
Rental property:  
Land $266,537
 $266,537
Land$265,714 $265,968 
Buildings, improvements and fixtures 2,564,224
 2,630,357
Buildings, improvements and fixtures2,519,214 2,527,404 
 2,830,761
 2,896,894
2,784,928 2,793,372 
Accumulated depreciation (1,007,922) (1,009,951)Accumulated depreciation(1,078,999)(1,054,993)
Total rental property, net 1,822,839
 1,886,943
Total rental property, net1,705,929 1,738,379 
Cash and cash equivalents 600,359
 16,519
Cash and cash equivalents201,564 84,750 
Investments in unconsolidated joint ventures 86,478
 94,691
Investments in unconsolidated joint ventures89,482 94,579 
Deferred lease costs and other intangibles, net 97,560
 96,712
Deferred lease costs and other intangibles, net81,807 84,960 
Operating lease right-of-use assets 83,764
 86,575
Operating lease right-of-use assets81,222 81,499 
Prepaids and other assets 100,088
 103,374
Prepaids and other assets98,891 104,800 
Total assets $2,791,088
 $2,284,814
Total assets$2,258,895 $2,188,967 
Liabilities and Equity 
  Liabilities and Equity
Liabilities    Liabilities
Debt:    Debt:
Senior, unsecured notes, net $1,139,093
 $1,138,603
Senior, unsecured notes, net$1,141,074 $1,140,576 
Unsecured term loan, net 347,531
 347,367
Unsecured term loan, net322,753 347,370 
Mortgages payable, net 82,856
 83,803
Mortgages payable, net78,933 79,940 
Unsecured lines of credit, net 598,074
 —
Unsecured lines of creditUnsecured lines of credit0 0 
Total debt 2,167,554
 1,569,773
Total debt1,542,760 1,567,886 
Accounts payable and accrued expenses 89,978
 79,165
Accounts payable and accrued expenses67,558 87,689 
Operating lease liabilities 91,017
 91,237
Operating lease liabilities89,870 90,105 
Other liabilities 94,881
 88,530
Other liabilities75,693 84,404 
Total liabilities 2,443,430
 1,828,705
Total liabilities1,775,881 1,830,084 
Commitments and contingencies 


 


Commitments and contingencies00
Equity    Equity
Partners’ Equity:    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
General partner, 1,100,000 units outstanding at March 31, 2021 and 1,000,000 at December 31, 2020, respectivelyGeneral partner, 1,100,000 units outstanding at March 31, 2021 and 1,000,000 at December 31, 2020, respectively5,077 3,334 
Limited partners, 4,794,643 and 4,794,643 Class A common units, and 99,694,577 and 92,569,801 Class B common units outstanding at March 31, 2021 and December 31, 2020, respectivelyLimited partners, 4,794,643 and 4,794,643 Class A common units, and 99,694,577 and 92,569,801 Class B common units outstanding at March 31, 2021 and December 31, 2020, respectively499,339 383,588 
Accumulated other comprehensive loss (40,297) (26,888)Accumulated other comprehensive loss(21,402)(28,039)
Total partners’ equity 347,658
 456,109
Total partners’ equity483,014 358,883 
Noncontrolling interests in consolidated partnerships —
 —
Noncontrolling interests in consolidated partnerships0 0 
Total equity 347,658
 456,109
Total equity483,014 358,883 
Total liabilities and equity $2,791,088
 $2,284,814
Total liabilities and equity$2,258,895 $2,188,967 
The accompanying notes are an integral part of these consolidated financial statements.

11

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,
 2020 2019 20212020
Revenues:  
  Revenues:  
Rental revenues $108,558
 $119,954
Rental revenues$97,467 $108,558 
Management, leasing and other services 1,443
 1,342
Management, leasing and other services1,372 1,443 
Other revenues 1,632
 1,859
Other revenues1,855 1,632 
Total revenues
111,633

123,155
Total revenues100,694 111,633 
Expenses:    Expenses:
Property operating 38,627
 42,377
Property operating35,311 38,627 
General and administrative 12,584
 12,145
General and administrative16,793 12,584 
Impairment charge 45,675
 —
Impairment charge0 45,675 
Depreciation and amortization 29,417
 31,760
Depreciation and amortization28,150 29,417 
Total expenses
126,303

86,282
Total expenses80,254 126,303 
Other income (expense):    Other income (expense):
Interest expense (15,196) (16,307)Interest expense(14,362)(15,196)
Gain on sale of assets —
 43,422
Other income 220
 224
Other income (expense)Other income (expense)(3,505)220 
Total other income (expense) (14,976) 27,339
Total other income (expense)(17,867)(14,976)
Income (loss) before equity in earnings of unconsolidated joint ventures
(29,646)
64,212
Income (loss) before equity in earnings of unconsolidated joint ventures2,573 (29,646)
Equity in earnings of unconsolidated joint ventures 1,527
 1,629
Equity in earnings of unconsolidated joint ventures1,769 1,527 
Net income (loss)
(28,119)
65,841
Net income (loss)4,342 (28,119)
Noncontrolling interests in consolidated partnerships (190) (195)Noncontrolling interests in consolidated partnerships0 (190)
Net income (loss) available to partners
(28,309)
65,646
Net income (loss) available to partners4,342 (28,309)
Net income (loss) available to limited partners (28,020) 64,983
Net income (loss) available to limited partners4,295 (28,020)
Net income (loss) available to general partner
$(289)
$663
Net income (loss) available to general partner$47 $(289)
    
Basic earnings per common unit:    
Basic earnings per common unit: 
Net income (loss) $(0.30) $0.66
Net income (loss)$0.04 $(0.30)
Diluted earnings per common unit:    Diluted earnings per common unit:
Net income (loss) $(0.30) $0.66
Net income (loss)$0.04 $(0.30)
    
The accompanying notes are an integral part of these consolidated financial statements.

12

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)

 Three months ended March 31,Three months ended March 31,
 2020 2019 20212020
Net income (loss) $(28,119) $65,841
Net income (loss)$4,342 $(28,119)
Other comprehensive income (loss):    Other comprehensive income (loss):
Foreign currency translation adjustments (7,733) 1,949
Foreign currency translation adjustments4,639 (7,733)
Changes in fair value of cash flow hedges (5,676) (1,952)Changes in fair value of cash flow hedges1,998 (5,676)
Other comprehensive income (loss) (13,409) (3)Other comprehensive income (loss)6,637 (13,409)
Comprehensive income (loss) (41,528) 65,838
Comprehensive income (loss)10,979 (41,528)
Comprehensive (income) loss attributable to noncontrolling interests in consolidated partnerships (190) (195)Comprehensive (income) loss attributable to noncontrolling interests in consolidated partnerships0 (190)
Comprehensive income (loss) attributable to the Operating Partnership $(41,718) $65,643
Comprehensive income (loss) attributable to the Operating Partnership$10,979 $(41,718)
The accompanying notes are an integral part of these consolidated financial statements.


13

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 $0 $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)
(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 $0 $347,658 
  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
Net income 663
64,983
—
65,646
195
65,841
Other comprehensive loss —
—
(3)(3)—
(3)
Compensation under Incentive Award Plan —
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)
Contributions from noncontrolling interests —
—
—
—
18
18
Common distributions ($0.705 per common unit) (1)
 (350)(69,514)—
(69,864)—
(69,864)
Distributions to noncontrolling interests —
—
—
—
(213)(213)
Balance, March 31, 2019 $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 0.355 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

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, 2020$3,334 $383,588 $(28,039)$358,883 $0 $358,883 
Net income47 4,295 — 4,342 — 4,342 
Other comprehensive income— — 6,637 6,637 — 6,637 
Compensation under Incentive Award Plan— 3,909 — 3,909 — 3,909 
Grant of 469,675 restricted common share awards by the Company— — — — — — 
Issuance of 100,000 general partner units and 6,767,078 limited partner units1,874 126,781 — 128,655 — 128,655 
Withholding of 111,977 common units for employee income taxes— (1,637)— (1,637)— (1,637)
Contributions from noncontrolling interests— — — — 0 0 
Common distributions ($0.1775
 per common unit)
(178)(17,597)— (17,775)— (17,775)
Distributions to noncontrolling interests— — — — — — 
Balance, March 31, 2021$5,077 $499,339 $(21,402)$483,014 $0 $483,014 

(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.

14

TANGER PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 Three months ended March 31,Three months ended March 31,
 2020 2019 20212020
OPERATING ACTIVITIES  
  
OPERATING ACTIVITIES  
Net income (loss) $(28,119) $65,841
Net income (loss)$4,342 $(28,119)
Adjustments to reconcile net income to net cash provided by operating activities:    Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 29,417
 31,760
Depreciation and amortization28,150 29,417 
Impairment charge 45,675
 —
Impairment charge0 45,675 
Amortization of deferred financing costs 757
 747
Amortization of deferred financing costs1,173 757 
Gain on sale of assets —
 (43,422)
Equity in earnings of unconsolidated joint ventures (1,527) (1,629)Equity in earnings of unconsolidated joint ventures(1,769)(1,527)
Equity-based compensation expense 3,789
 3,818
Equity-based compensation expense3,845 3,789 
Amortization of debt (premiums) and discounts, net 118
 109
Amortization of debt (premiums) and discounts, net127 118 
Amortization (accretion) of market rent rate adjustments, net 362
 480
Amortization (accretion) of market rent rate adjustments, net(213)362 
Straight-line rent adjustments (1,872) (1,970)Straight-line rent adjustments1,043 (1,872)
Distributions of cumulative earnings from unconsolidated joint ventures 1,517
 1,455
Distributions of cumulative earnings from unconsolidated joint ventures890 1,517 
Other non-cashOther non-cash3,638 0 
Changes in other assets and liabilities:    Changes in other assets and liabilities:
Other assets 2,552
 1,001
Other assets2,868 2,552 
Accounts payable and accrued expenses (25,329) (24,976)Accounts payable and accrued expenses(12,893)(25,329)
Net cash provided by operating activities 27,340
 33,214
Net cash provided by operating activities31,201 27,340 
INVESTING ACTIVITIES    INVESTING ACTIVITIES
Additions to rental property (10,551) (9,906)Additions to rental property(7,357)(10,551)
Additions to investments in unconsolidated joint ventures (261) (779)Additions to investments in unconsolidated joint ventures(7,000)(261)
Net proceeds from sale of assets —
 128,248
Net proceeds from sale of assets8,129 0 
Additions to non-real estate assets (677) (174)Additions to non-real estate assets(414)(677)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 3,488
 8,157
Distributions in excess of cumulative earnings from unconsolidated joint ventures7,631 3,488 
Additions to deferred lease costs (1,220) (1,209)Additions to deferred lease costs(3,668)(1,220)
Other investing activities 2,844
 2,936
Other investing activities5,396 2,844 
Net cash provided by (used) in investing activities (6,377) 127,273
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities2,717 (6,377)
FINANCING ACTIVITIES    FINANCING ACTIVITIES
Cash distributions paid (34,778) (34,645)Cash distributions paid(17,775)(34,778)
Proceeds from revolving credit facility 634,030
 135,200
Proceeds from revolving credit facility0 634,030 
Repayments of revolving credit facility (34,200) (265,300)Repayments of revolving credit facility0 (34,200)
Repayments of notes, mortgages and loans (873) (825)Repayments of notes, mortgages and loans(25,924)(873)
Employee income taxes paid related to shares withheld upon vesting of equity awards (736) (1,781)Employee income taxes paid related to shares withheld upon vesting of equity awards(1,637)(736)
Additions to deferred financing costs (65) (65)Additions to deferred financing costs(76)(65)
Proceeds from common share offeringProceeds from common share offering128,655 0 
Proceeds from other financing activities 72
 18
Proceeds from other financing activities0 72 
Payment for other financing activities (549) (500)Payment for other financing activities(287)(549)
Net cash provided by (used) in financing activities 562,901
 (167,898)
Net cash provided by financing activitiesNet cash provided by financing activities82,956 562,901 
Effect of foreign currency on cash and cash equivalents (24) (10)Effect of foreign currency on cash and cash equivalents(60)(24)
Net increase (decrease) in cash and cash equivalents 583,840
 (7,421)
Net increase in cash and cash equivalentsNet increase in cash and cash equivalents116,814 583,840 
Cash and cash equivalents, beginning of period 16,519
 8,991
Cash and cash equivalents, beginning of period84,750 16,519 
Cash and cash equivalents, end of period $600,359
 $1,570
Cash and cash equivalents, end of period$201,564 $600,359 
The accompanying notes are an integral part of these consolidated financial statements.

15

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”) 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, 2020,2021, we owned and operated 3230 consolidated outlet centers, with a total gross leasable area of approximately 12.011.5 million square feet. We also had partial ownership interests in 76 unconsolidated outlet centers totaling approximately 2.22.1 million square feet, including 32 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” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term, “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.

The Company owns the majority of the units of partnership interest issued by the Operating Partnership through its 2 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, 2020,2021, the Company, through its ownership of Tanger GP Trust and Tanger LP Trust, owned 93,076,701100,794,577 units of the Operating Partnership and other limited partners (the “Non-Company LPs”) collectively owned 4,911,1734,794,643 Class A common limited partnership units. Each Class A common limited partnership unit held by the Non-Company LPs is exchangeable for 1 of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status. Class B common limited partnership units, which are held by Tanger LP Trust, are not exchangeable for common shares of the Company.

2. 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’s and the Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2019.2020. The December 31, 20192020 balance sheet data in this Form 10-Q was derived from audited financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the SEC’s 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.

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.


16

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”). For joint ventures that are determined to be a VIE, we consolidate the entity where we are deemed to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Our determination of the primary beneficiary considers all relationships between us and the VIE, including management agreements and other contractual arrangements.

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

For certain investments in real estate joint ventures, we record our equity in the venture’s 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 National Harbor joint ventures are less than zero because of financing or operating distributions that were greater than net income, as net income includes non-cash charges for depreciation and amortization.

“Noncontrolling interests in the Operating Partnership” reflects the Non-Company LP’s percentage ownership of the Operating Partnership’s units. “Noncontrolling interests in other consolidated 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 AssetsAccounts Receivable

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 coronavirusCOVID-19 pandemic (“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 collect rent under our existing leases, our ability to renew and re-lease our leased space, the outlook for the retail environment, bankruptcies and potential further 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 couldhave been and may continue to be in the future 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 ofDue to the stores in our portfolio were closed asCOVID-19 pandemic, 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.
17

Historically, our accounts receivable from tenants has not been material; however, given the impacts from the COVID-19 pandemic discussed above, our net accounts receivable balance, which is recorded in prepaids and other assets on the consolidated balance sheet, had increased to approximately $18.8 million at December 31, 2020, but decreased to approximately $12.8 million at March 31, 2021, primarily due to deferred rent collections. Straight-line rent adjustments recorded as a receivable in prepaids and other assets on the consolidated balance sheets was approximately $54.4 million as of March 31, 2021.

Individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are written-off as an adjustment to rental revenue. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further we assess whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends including discussions with tenants for potential lease amendments. Our estimate of the collectability of accrued rents and accounts receivable is based on the best information available to us at the time of preparing the financial statements.

The extentduration of the COVID-19 pandemic, recent tenant requestsbankruptcies and actionsother significant uncertainties with the economy required significant judgment to be used when estimating the collection of rents through March 31, 2021. As a result of the actual collections of 2020 deferred rents due to be repaid during the first quarter of 2021, the Company recorded a $1.6 million reversal of rental revenue reserves during the first quarter of 2021 related to prior period rents that were previously deferred. As of March 31, 2021, remaining rental revenue reserves totaled $2.6 million, or 39% of the total remaining 2020 rents deferred or under negotiation.

Based on rents received through April 30, 2021, collections of contractual fixed rents billed of $85.6 million in the first quarter of 2021 for the consolidated portfolio were approximately 95%.

Impairment of Long-Lived Assets

Rental property held and used by us is reviewed for impairment in the impactevent 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 and fourth quarter of 2020, we recorded $45.7 million and $19.2 million in impairment charges, respectively, related to our resultsFoxwoods outlet center in our consolidated statement 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 regardingwhich equaled the impactexcess of the pandemic, we drew down substantially allcarrying value over its estimated fair value.

If the effects of the available capacity underCOVID-19 pandemic cause economic and market conditions to deteriorate beyond our $600.0 million unsecured lines of credit.current expectations or if our expected holding periods for assets change, subsequent tests for impairment could result in additional impairment charges in the future. We have also taken stepscan provide no assurance that material impairment charges with respect to reduceour properties will not occur during 2021 or 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.periods.

4.
18

3. Disposition of Properties

Disposition of Properties

During the three months ended March 31, 2019,2021, we closed on the sale of 4a non-core outlet centers for total gross proceeds of $130.5 million.center in Jeffersonville, Ohio.

The following table sets forth certain summarized information regarding properties and land outparcels sold during the three months ended March 31, 2019:2021:
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 (1)
LocationDate SoldSquare Feet
(in 000’s)		Net Sales Proceeds
(in 000’s)		Gain on Sale
(in 000’s)
2021 Disposition:
JeffersonvilleJeffersonville, OhioJanuary 2021412 $8,100 0 

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



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

As of March 31, 2021
Joint VentureOutlet Center LocationOwnership %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:
ColumbusColumbus, OH50.0 %355 $1.6 $70.8 
RioCan CanadaVarious50.0 %665 87.9 0 
$89.5 
Investments included in other liabilities:
Charlotte(2)
Charlotte, NC50.0 %399 $(12.4)$99.6 
National Harbor(2)
National Harbor, MD50.0 %341 (9.8)94.5 
Galveston/Houston (2)
Texas City, TX50.0 %353 (12.2)64.3 
$(34.4)
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) 



19

As of December 31, 2019
As of December 31, 2020As of December 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)
Joint VentureOutlet Center LocationOwnership %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:
ColumbusColumbusColumbus, OH50.0 %355 $2.0 $70.8 
RioCan Canada Various 50.0% 764
 $94.7
 $9.2
RioCan CanadaVarious50.0 %765 92.6 $0 
     $94.7
  $94.6 
Investments included in other liabilities:Investments included in other liabilities:      Investments included in other liabilities:
Columbus(2)
 Columbus, OH 50.0% 355
 $(3.5) $85.0
Charlotte(2)
 Charlotte, NC 50.0% 399
 (13.0) 99.5
Charlotte(2)
Charlotte, NC50.0 %399 (12.8)99.6 
National Harbor(2)
 National Harbor, MD 50.0% 341
 (5.9) 94.4
National Harbor(2)
National Harbor, MD50.0 %341 (8.4)94.5 
Galveston/Houston (2)
 Texas City, TX 50.0% 353
 (19.7) 79.9
Galveston/Houston (2)
Texas City, TX50.0 %353 (19.5)80.0 
     $(42.1) 

$(40.7)

(1)Net of debt origination costs and including premiums of $1.1 million for both periods ended March 31, 2020 and December 31, 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.

(1)Net of debt origination costs of $1.3 million as of March 31, 2021 and $1.1 million as of December 31, 2020.

(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,
 20212020
Fee:  
Management and marketing$509 $541 
Leasing and other fees56 20 
Expense reimbursements from unconsolidated joint ventures807 882 
Total Fees$1,372 $1,443 
 
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


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 Balance Sheets - Unconsolidated Joint 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 $3.8$3.4 million and $3.6 million as of both March 31, 20202021 and December 31, 2019)2020, respectively) are amortized over the various useful lives of the related assets.


Galveston/Houston

In February 2021, the Galveston/Houston joint venture amended its mortgage loan to extend the maturity to July 2023, which required a reduction in principal balance from $80.0 million to $64.5 million. The amendment also changed the interest rate from LIBOR + 1.65% to LIBOR + 1.85%. We are providing property management, marketing and leasing services to the outlet center.

RioCan Canada

In March 2021, the RioCan joint venture closed on the sale of its outlet center in Saint-Sauveur, for net proceeds of approximately $9.4 million. Our share of the proceeds was approximately $4.7 million. As a result of this transaction, we recorded a loss on the sale of $3.7 million. This includes a $3.6 million charge related to the foreign currency effect of the sale recorded in other income (expense), which had been previously recorded in other comprehensive income.


20

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 VenturesMarch 31, 2021December 31, 2020
Assets  
Land$83,486 $86,861 
Buildings, improvements and fixtures467,316 471,798 
Construction in progress3,059 2,976 
553,861 561,635 
Accumulated depreciation(151,140)(145,810)
Total rental property, net402,721 415,825 
Cash and cash equivalents20,459 21,471 
Deferred lease costs and other intangibles, net4,475 4,849 
Prepaids and other assets18,567 20,478 
Total assets$446,222 $462,623 
Liabilities and Owners’ Equity  
Mortgages payable, net$329,249 $344,856 
Accounts payable and other liabilities14,188 17,427 
Total liabilities343,437 362,283 
Owners’ equity102,785 100,340 
Total liabilities and owners’ equity$446,222 $462,623 
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


 Three months ended
Condensed Combined Statements of OperationsMarch 31,
 - Unconsolidated Joint Ventures20212020
Revenues$20,992 $22,036 
Expenses: 
Property operating8,413 9,129 
General and administrative29 139 
Depreciation and amortization5,901 5,906 
Total expenses14,343 15,174 
Other income (expense):
Interest expense(2,945)(3,735)
Gain on sale of assets503 0 
Other income59 56 
Total other expense$(2,383)$(3,679)
Net income$4,266 $3,183 
The Company and Operating Partnership’s share of:  
Net income$1,769 $1,527 
Depreciation and amortization (real estate related)$2,996 $3,018 



  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



6.
21

5. Debt Guaranteed by the Company

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

The Company guarantees the Operating Partnership’s obligations with respect to its unsecured lines of credit which have a total borrowing capacity of $600.0 million. The Company also guarantees the Operating Partnership’s 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, 2021December 31, 2020
Unsecured lines of credit$0 $0 
Unsecured term loan$325,000 $350,000 
  As of
  March 31, 2020 December 31, 2019
Unsecured lines of credit $599,830
 $—
Unsecured term loan $350,000
 $350,000




7.6. Debt of the Operating Partnership

The debt of the Operating Partnership consisted of the following (in thousands):
As ofAs of
March 31, 2021December 31, 2020
Stated Interest Rate(s)Maturity DatePrincipal
Book Value(1)
Principal
Book Value(1)
Senior, unsecured notes: 
Senior notes3.875 %December 2023$250,000 $248,136 $250,000 $247,967 
Senior notes3.750 %December 2024250,000 248,585 250,000 248,493 
Senior notes3.125 %September 2026350,000 346,909 350,000 346,770 
Senior notes3.875 %July 2027300,000 297,444 300,000 297,346 
Mortgages payable:
Atlantic City (2)(3)
5.14 %-7.65%November 2021- December 202626,420 27,547 27,343 28,569 
     Southaven (4)
LIBOR+1.80%April 202151,400 51,386 51,400 51,371 
Unsecured term loan
LIBOR(5)
+1.00%April 2024325,000 322,753 350,000 347,370 
Unsecured lines of credit
LIBOR(5)
+1.00%
October 2021 (6)
0 0 0 0 
 $1,552,820 $1,542,760 $1,578,743 $1,567,886 
        As of As of
        March 31, 2020 December 31, 2019
  Stated Interest Rate(s) Maturity Date Principal 
Book Value(1)
 Principal 
Book Value(1)
Senior, unsecured notes:      
      
Senior notes 3.875%   December 2023 $250,000
 $247,471
 $250,000
 $247,308
Senior notes 3.750%   December 2024 250,000
 248,218
 250,000
 248,127
Senior notes 3.125%   September 2026 350,000
 346,354
 350,000
 346,215
Senior notes 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 30,037
 31,559
 30,909
 32,531
     Southaven LIBOR
+1.80% April 2021 51,400
 51,297
 51,400
 51,272
Unsecured term loan LIBOR
+1.00% April 2024 350,000
 347,531
 350,000
 347,367
Unsecured lines of credit LIBOR
+1.00% October 2021 599,830
 598,074
 —
 —
        $2,181,267
 $2,167,554
 $1,582,309
 $1,569,773
(1)Including premiums and net of debt discount and debt origination costs.
(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.
(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.
(4)In April 2021 we extended the maturity date 90 days to explore other financing options however, we may extend the loan using our two-year extension option to April 2023, which could require reductions in principal or additional guarantees to comply with extension requirements.
(5)Beginning in June 2020, if LIBOR is less than 0.25% per annum, the rate will be deemed to be 0.25% for the portions of the lines of credit and bank term loan that are not fixed with an interest rate swap.
(6)Unsecured lines of credit have a one-year extension option to extend maturity to October 2022.

Certain of our properties, which had a net book value of approximately $171.7$161.7 million at March 31, 2020,2021, 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, 2020, letters of credit totaling approximately $170,000 were issued under the lines of credit.




22

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, 2020,2021, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $19.2$21.9 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, 2020,2021, we believe we were in compliance with all of our debt covenants.

Unsecured Lines of Creditterm loan
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,2021, we drewpaid down approximately $599.8$25.0 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 onborrowings under our $350.0 million unsecured term loan increased from 0.90% to 1.0%.with cash on hand.

Debt Maturities

Maturities of the existing long-term debt as of March 31, 20202021 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 YearAmount
For the remainder of 2021$56,270 
20224,436 
2023254,768 
2024580,140 
20251,501 
Thereafter655,705 
Subtotal1,552,820 
Net discount and debt origination costs(10,060)
Total$1,542,760 
Given the financial implications of the COVID-19 and potential defaults on our debt covenants associated with our line of credit and term loan,pandemic, 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.
 

23

8.7. Derivative Financial Instruments

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

Fair Value
Effective DateMaturity DateNotional AmountBank Pay RateCompany Fixed Pay RateMarch 31, 2021December 31, 2020
Assets (Liabilities)(1):
Interest rate swaps:
April 13, 2016January 1, 2021175,000 1 month LIBOR1.03 %$0 $(17)
March 1, 2018January 31, 202140,000 1 month LIBOR2.47 %0 (75)
August 14, 2018January 1, 2021150,000 1 month LIBOR2.20 %0 (34)
July 1, 2019February 1, 202425,000 1 month LIBOR1.75 %(956)(1,192)
January 1, 2021February 1, 2024150,000 1 month LIBOR0.60 %(936)(1,901)
January 1, 2021February 1, 2024100,000 1 month LIBOR0.22 %434 (139)
March 1, 2021February 1, 202425,000 1 month LIBOR0.24 %99 0 
Total$(1,359)$(3,358)
(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. 
           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)

(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,
20212020
Interest Rate Swaps:
Amount of gain (loss) recognized in other comprehensive income (loss)$1,998 $(5,676)
  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)



24

9.8. Fair Value Measurements

Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
TierDescription
Level 1Observable inputs such as quoted prices in active markets
Level 2Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3Unobservable 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 1Level 2Level 3
Quoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Observable InputsSignificant Unobservable Inputs
Total
Fair value as of March 31, 2021:
Assets:
Short-term government securities (cash and cash equivalents)
$194,518 $194,518 $0 $0 
Interest rate swaps (prepaids and other assets)533 0 533 0 
Total assets$195,051 $194,518 $533 $0 
Liabilities:
Interest rate swaps (other liabilities)$1,893 $0 $1,893 $0 
Total liabilities$1,893 $0 $1,893 $0 
Level 1Level 2Level 3
   Level 1 Level 2 Level 3Quoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Observable InputsSignificant Unobservable Inputs
   Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Observable Inputs Significant Unobservable InputsTotal
Fair value as of December 31, 2020:Fair value as of December 31, 2020:
Asset:Asset:
Short-term government securities (cash and cash equivalents)
Short-term government securities (cash and cash equivalents)
$87,081 $87,081 $0 $0 
 Total Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Observable Inputs Significant Unobservable Inputs
Fair value as of March 31, 2020:   
Assets:        
Short-term government securities (cash and cash equivalents)
 $597,140
 $597,140
 $—
 $—
Total assets $597,140
 $597,140
 $—
 $—
Total assets$87,081 $87,081 $0 $0 
        
Liabilities:        Liabilities:
Interest rate swaps (other liabilities) $6,100
 $—
 $6,100
 $—
Interest rate swaps (other liabilities)$3,358 $0 $3,358 $0 
Total liabilities $6,100
 $—
 $6,100
 $—
Total liabilities$3,358 $0 $3,358 $0 

    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
 $—








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.
25

Interest rate swaps

Fair values of interest rate swaps are estimated 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 1Level 2Level 3
Quoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Observable InputsSignificant Unobservable Inputs
Total
Fair value as of March 31,2020:
Asset:
Long-lived assets$60,000 $0 $0 $60,000 
    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. In the fourth quarter of 2020, we recorded an additional impairment of $19.2 million. 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, 2021December 31, 2020
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities$0 $0 
Level 2 Significant Observable Inputs1,226,528 1,207,531 
Level 3 Significant Unobservable Inputs406,051 432,272 
Total fair value of debt$1,632,579 $1,639,803 
Recorded value of debt$1,542,760 $1,567,886 
  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







26

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.

10.9. Shareholders’ Equity of the Company

Dividend Declaration

In January 2021, the Company's Board of Directors declared a $0.1775 cash dividend per common share payable on February 12, 2021 to each shareholder of record on January 29, 2021, and the Trustees of Tanger GP Trust declared a $0.1775 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

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

At-the-Market Offering

Under our at-the-market stock offering program (“ATM Offering”), which commenced February 2021, we may offer and sell our common shares, $0.01 par value per share (“Common Shares”), having an aggregate gross sales price of up to $250.0 million (the “Shares”). We may sell the Shares in amounts and at times to be determined by us but we have no obligation to sell any of the amountShares. Actual sales, if any, will depend on a variety of approximately $35.1 million was recorded in accounts payablefactors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Common Shares, capital needs and accrued expenses indeterminations by us of the consolidated balance sheet asappropriate sources of March 31, 2020.

In January 2019,its funding. We currently intend to use the Company's Boardnet proceeds from the sale 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 unitshares pursuant to the Operating Partnership's unitholders.ATM Offering for working capital and general corporate purposes.

In February 2019, the Company's Board of Directors declared a $$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.The following table sets forth information regarding settlements under our ATM offering program:
Three months ended March 31,
20212020
Number of common shares settled during the period6,867,078 0 
Average price per share$19.02 $0 
Aggregate gross proceeds (in thousands)$130,638 $0 
Aggregate net proceeds after commissions and fees (in thousands)$128,655 $0 










27

Share Repurchase Program

In February 2019, the Company’s Board of Directors authorized the repurchase of an additional $44.3 million of our outstanding common shares for an aggregate authorization of $169.3 million until May 18, 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. WeThe Company did not repurchase any shares for the periodsquarters ended March 31, 2021 and 2020. The remaining amount authorized to be repurchased under the program as of March 31, 20202021 was approximately $80.0 million. Due to near and potential long term impacts from COVID-19, theThe Company intends tohas temporarily suspendsuspended share repurchases in orderfor at least the twelve months starting July 1, 2020 as the June 2020 amendments to preserve our liquidity position.debt agreements for our lines of credit and bank term loan prohibit share repurchases during such time.

11.10. 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, 20202021 and March 31, 2019:2020:
Limited Partnership Units
General Partnership UnitsClass AClass BTotal
Balance December 31, 20191,000,000 4,911,173 91,892,260 96,803,433 
Grant of restricted common share awards by the Company, net of forfeitures0 0 241,038 241,038 
Units withheld for employee income taxes0 0 (56,597)(56,597)
Balance March 31, 20201,000,000 4,911,173 92,076,701 96,987,874 
Balance December 31, 20201,000,000 4,794,643 92,569,801 97,364,444 
Grant of restricted common share awards by the Company, net of forfeitures0 0 469,675 469,675 
Issuance of units100,000 0 6,767,078 6,767,078 
Units withheld for employee income taxes0 0 (111,977)(111,977)
Balance March 31, 20211,100,000 4,794,643 99,694,577 104,489,220 
    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



28

12.11. Earnings Per Share of the Company

The following table sets forth a reconciliation of the numerators and denominators in computing the Company’s earnings per share (in thousands, except per share amounts):
Three months ended March 31,
 20212020
Numerator:
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc.$4,133 $(26,882)
Less allocation of earnings to participating securities(207)(516)
Net income (loss) available to common shareholders of Tanger Factory Outlet Centers, Inc.$3,926 $(27,398)
Denominator:
Basic weighted average common shares94,812 92,500 
Effect of notional units288 0 
Effect of outstanding options717 0 
Diluted weighted average common shares95,817 92,500 
Basic earnings per common share:
Net income (loss)$0.04 $(0.30)
Diluted earnings per common share:
Net income (loss)$0.04 $(0.30)
  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


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, 2020 and 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 2019,2021, approximately 1.5 million and 1.21.1 million notional units were excludedfrom the computation respectively,and for the three months ended March 31, 2020, approximately 1.5 million notional units were excluded from the computation because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or as they were anti-dilutive.



With respect to outstanding options, the effect of dilutive common shares is determined using the treasury stock method, whereby outstanding options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such options and the average measured but unrecognized compensation cost during the period are assumed to be used to repurchase our common shares at the average market price during the period. For the three months ended March 31, 2020,and 2019,2021, approximately 521,000 and 528,000403,000 options were excluded from the computation, respectively,as they were anti-dilutive. For the three months ended March 31, 2020, approximately 521,000 options were excluded from the computation, as they were anti-dilutive.

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

Certain of the Company’s 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’ 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.
29


13.
12. Earnings Per Unit of the Operating Partnership

The following table sets forth a reconciliation of the numerators and denominators in computing earnings per unit (in thousands, except per unit amounts):
Three months ended March 31,
 20212020
Numerator:  
Net income (loss) attributable to partners of the Operating Partnership$4,342 $(28,309)
Less allocation of earnings to participating securities(207)(516)
Net income (loss) available to common unitholders of the Operating Partnership$4,135 $(28,825)
Denominator:
Basic weighted average common units99,606 97,411 
Effect of notional units288 0 
Effect of outstanding options717 0 
Diluted weighted average common units100,611 97,411 
Basic earnings per common unit:
Net income (loss)$0.04 $(0.30)
Diluted earnings per common unit:
Net income (loss)$0.04 $(0.30)
  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


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, 20202021 and 2019.2020.
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 20192021 approximately 1.5 million and 1.21.1 million notional units were excluded from the computation respectively,and for the three months endedMarch 31, 2020 approximately 1.5 million notional units were excludedfrom the computation because these notional units either would not have been issuable if the end of the reporting period were the end of the contingency period or as they were anti-dilutive.



With respect to outstanding options, the effect of dilutive common 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, 2020,2021, approximately 521,000403,000 options were excluded from the computation, and forcomputation. For the three months ended March 31, 2019,2020, approximately 528,000521,000 options were excluded from the computation as they were anti-dilutive.

Certain of the Company’s unvested restricted common share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the corresponding unvested restricted unit awards on earnings per unit has been calculated using the two-class method whereby earnings are allocated to the unvested restricted unit awards based on distributions declared and the unvested restricted units’ 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.

30
14.

13. Equity-Based Compensation of the Company

We have a shareholder approved equity-based compensation plan, the Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership (as amended and restated on April 4, 2014), as amended (the “Plan”), which covers our non-employee directors, officers, employees and consultants. Per 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’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” refers to the Company and the Operating Partnership together and the term “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,
 20212020
Restricted common shares (1)
$2,573 $2,227 
Notional unit performance awards (1)
1,149 1,520 
Options123 41 
Total equity-based compensation$3,845 $3,788 
  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
(1) The three months ended March 31, 2021 includes the accelerated recognition of compensation cost.


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,
 20212020
Equity-based compensation expense capitalized$64 $101 
  Three months ended
  March 31,
  2020 2019
Equity-based compensation expense capitalized $101
 $92


Restricted Common Share and Restricted Share Unit Awards

During February 2020,2021, the Company granted approximately 399,000385,000 restricted common shares and restricted share units to the Company’s non-employee directors and the Company’s senior executive officers. The grant date fair value of the awards ranged from $12.03 to $13.75was $14.60 per share. The restricted common shares vest ratably over a three year period on January 4th of each year for non-employee directors and on February 15th of each year for senior executive officers. For the restricted shares 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’ 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 57,000112,000 and 81,00057,000 for the three months ended March 31, 20202021 and 2019,2020, 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’ tax obligation to taxing authorities were $736,000$1.6 million and $1.8 million$736,000 for the three months ended March 31, 20202021 and 2019,2020, respectively. These amounts are reflected as financing activities within the consolidated statements of cash flows.

2020 Outperformance






31

2021 Performance Share Plan

During February 2020,2021, the Compensation Committee of the Company approved the general terms of the Tanger Factory Outlet Centers, Inc. 2020 Outperformance2021 Performance Share Plan (the “2020 OPP”“2021 PSP”) covering the Company's senior executive officers whereby a maximum of approximately 697,000642,000 restricted common shares may be earned if certain share price appreciation goals are achieved over a three year measurement period. The 2020 OPP2021 PSP 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 2020 OPP2021 PSP performance targets and other relevant information about the 2020 OPP:2021 PSP:
Performance targets (1)
Absolute portion of award:
Percent of total award33.3%
Absolute total shareholder return range26.0 %-40.5%
Percentage of units to be earned20 %-100%
Relative portion of award:
Percent of total award66.7%
Percentile rank of peer group range(2)
30 th-80th
Percentage of units to be earned20 %-100%
Maximum number of restricted common shares that may be earned (3)
642,423 
February grant date fair value per share$9.65 
Performance targets (1)
    
Absolute portion of award:    
Percent of total award 33.3%
Absolute total shareholder return range 36.8%-52.1%
Percentage of units to be earned 20%-100%
     
Relative portion of award:    
Percent of total award 66.7%
Percentile rank of peer group range(2)
 30th-80th
Percentage of units to be earned 20%-100%
     
Maximum number of restricted common shares that may be earned 696,687 
Grant date fair value per share $7.30 
(1)The number of restricted common shares received under the 2020 OPP will be determined on a pro-rata basis by linear interpolation between total shareholder return thresholds, both for absolute total shareholder return and for relative total shareholder return amongst the Company’s peer group.
(2)The peer group is based on companies included in the FTSE NAREIT Retail Index.

(1)The number of restricted common shares received under the 2021 PSP will be determined on a pro-rata basis by linear interpolation between total shareholder return thresholds, both for absolute total shareholder return and for relative total shareholder return amongst the Company’s peer group.
(2)The peer group is based on companies included in the FTSE NAREIT Retail Index.

The fair values of the 2020 OPP2021 PSP awards granted during the three months ended March 31, 20202021 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:
Risk free interest rate (1)
1.40.2 %
Expected dividend yield (2)
8.46.5 %
Expected volatility (3)
2961 %
(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.
(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.

2018 Outperformance Plan

On February 15, 2021, the measurement period for the 2018 Outperformance Plan ('the 2018 OPP") expired. Based on the Company’s relative total shareholder return over the three year measurement period, we issued 76,478 restricted common shares in February 2021, with 43,127 vesting immediately and the remaining 33,351 vesting in February one year thereafter, contingent upon continued employment with the Company through the vesting date. Our absolute share price appreciation (or total shareholder return) for the 2018 OPP did not meet the minimum share price appreciation and 0 shares were earned under this component of the 2018 OPP.

32

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

The following table presents changes in the balances of each component of accumulated other comprehensive loss for the three months ended March 31, 20202021 (in thousands):
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
Balance December 31, 2020$(23,399)$(3,186)$(26,585)$(1,281)$(173)$(1,454)
Other comprehensive income before reclassifications952 1,508 2,460 57 76 133 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges3,463 394 3,857 167 20 187 
Balance March 31, 2021$(18,984)$(1,284)$(20,268)$(1,057)$(77)$(1,134)
  
  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 other comprehensive income (loss)loss for the three months ended March 31, 20192020 (in thousands):
Tanger Factory Outlet Centers, Inc. Accumulated Other Comprehensive Income (Loss)Noncontrolling Interest in Operating Partnership Accumulated Other Comprehensive Income (Loss)
Foreign CurrencyCash flow hedgesTotalForeign CurrencyCash flow hedgesTotal
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 for interest expense for cash flow hedges0 (2)(2)0 0 0 
Balance March 31, 2020$(32,437)$(5,791)$(38,228)$(1,759)$(310)$(2,069)
  
  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$905,000 of the amounts recorded within accumulated other comprehensive loss related to the interest rate swap agreements in effect as of March 31, 2020.2021.


33

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

The following table presents changes in the balances of each component of accumulated other comprehensive loss for the three months ended March 31, 20202021 (in thousands):
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance December 31, 2020$(24,680)$(3,359)$(28,039)
Other comprehensive income before reclassifications1,009 1,584 2,593 
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for foreign currency and interest expense for cash flow hedges3,630 414 4,044 
Balance March 31, 2021$(20,041)$(1,361)$(21,402)
  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)

The following table presents changes in the balances of each component of accumulated other comprehensive income (loss)loss for the three months ended March 31, 20192020 (in thousands):
Foreign CurrencyCash flow hedgesAccumulated Other Comprehensive Income (Loss)
Balance December 31, 2019$(26,463)$(425)$(26,888)
Other comprehensive loss before reclassifications(7,733)(5,674)(13,407)
Reclassification out of accumulated other comprehensive income (loss) into other income (expense) for interest expense for cash flow hedges— (2)(2)
Balance March 31, 2020$(34,196)$(6,101)$(40,297)
  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)


We expect within the next twelve months to reclassify into earnings as an increase to interest expense approximately $3.2 million$905,000 of the amounts recorded within accumulated other comprehensive loss related to the interest rate swap agreements in effect as of March 31, 2020.

2021.

34

17.16.    Lease Agreements

As of March 31, 2020,2021, we were the lessor to over 2,3002,100 stores in our 3230 consolidated outlet centers, under operating leases with initial terms that expire from 20202021 to 2035, with certain agreements containing extension options. We also have certain agreements that 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, 2020, theThe components of rental revenues are as follows (in thousands):
Three months ended
March 31,
20212020
Rental revenues - fixed$74,919 $86,933 
Rental revenues - variable (1)
22,548 21,625 
Rental revenues$97,467 $108,558 
  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
(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.

(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.

18.17. 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 ofAs of
 March 31, 2021March 31, 2020
Costs relating to construction included in accounts payable and accrued expenses$15,849 $18,168 
  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):
As ofAs of
 March 31, 2021March 31, 2020
Dividends payable$0 $35,108 
  As of As of
  March 31, 2020 March 31, 2019
Dividends payable $35,108
 $35,199


Interest paid, net of interest capitalized was as follows (in thousands):
Three months ended March 31,
20212020
Interest paid$14,125 $14,811 
  Three months ended March 31,
  2020 2019
Interest paid $14,811
 $16,022




35

19.
18. New Accounting Pronouncements

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 a 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 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 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 the election to avoid performing a lease by lease analysis. The Lease Modification Q&A has no material impact on the Company’s consolidated financial statements as of and for the three months ended March 31, 2020, however, its future impact to the Company is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering into such concessions.

On March 12, 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform 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 of March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which refines the scope of Topic 848 and clarifies some of its guidance. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments are effective immediately for all entities. An entity may elect to apply the amendments on a full retrospective basis. We have not adopted any of the optional expedients or exceptions through March 31, 2020,2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

Recently adopted accounting standards

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 did 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. The adoption of this new guidance did not have a material impact on our consolidated financial statements.






20.19. Subsequent Events

Dividend Declaration
In April 2020, Stephen Yalof became2021, the PresidentCompany's Board of Directors declared a $0.1775 cash dividend per common share payable on May 14, 2021 to each shareholder of record on March 31, 2021, and Chiefthe Trustees of Tanger GP Trust declared a $0.1775 cash distribution per Operating OfficerPartnership unit to the Operating Partnership's unitholders.

Senior Notes 3.875%
In April 2021, we completed a partial redemption of $150.0 million aggregate principal amount of our $250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash, which includes a make-whole premium of $13.0 million. Subsequent to the redemption, $100.0 million aggregate principal amount of the Company, the Operating Partnership and the General Partner.Notes remains outstanding.

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.
36

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’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, 20202021 with the three months ended March 31, 2019.2020. 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” refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term “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.



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, or the Exchange Act. We intend 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 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: 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 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.

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 Companyus and itsour 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, the timing or effectiveness of any vaccines or treatments, 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.

37

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 climate change; risks related to uninsured losses; risks related to changes in consumer spending 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; 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” in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated in Part II, Item 1A- “Risk Factors” in this Quarterly Report on Form 10-Q.2020.




General Overview

As of March 31, 2020,2021, we had 3230 consolidated outlet centers in 1918 states totaling 12.011.5 million square feet. We also had 76 unconsolidated outlet centers in 65 states or provinces totaling 2.22.1 million square feet.

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, 20192020 to March 31, 20202021 (square feet in thousands):
Consolidated Outlet CentersUnconsolidated Joint Venture Outlet Centers
Outlet CenterQuarter Opened/DisposedSquare FeetNumber of Outlet CentersSquare FeetNumber of Outlet Centers
As of January 1, 202012,048 32 2,212 7 
Dispositions:
TerrellThird Quarter(178)(1)— — 
Other3 — — — 
As of December 31, 202011,873 31 2,212 7 
Disposition:
JeffersonvilleFirst Quarter(412)(1)
Saint-SaveurFirst Quarter(99)(1)
Other(5)
As of March 31, 202111,456 30 2,113 6 
    Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers
Outlet Center Quarter Opened/Disposed Square Feet Number of Outlet Centers Square Feet Number of Outlet Centers
As of January 1, 2019   12,923
 36
 2,371
 8
Dispositions:          
Nags Head First Quarter (82) (1) —
 —
Ocean City First Quarter (200) (1) —
 —
Park City First Quarter (320) (1) —
 —
Williamsburg First Quarter (276) (1) —
 —
Bromont Second Quarter —
 —
 (161) (1)
Other   3
 —
 2
 —
As of December 31, 2019   12,048
 32
 2,212
 7
Other   (4) —
 —
 —
As of March 31, 2020   12,044
 32
 2,212
 7


38

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of March 31, 2020.2021. Except as noted, all properties are fee owned.
Consolidated Outlet CentersLegalSquare%
LocationOwnership %FeetOccupied
Deer Park, New York100 739,112 93 
Riverhead, New York (1)
100 729,558 88 
Rehoboth Beach, Delaware (1)
100 552,841 91 
Foley, Alabama100 554,649 87 
Atlantic City, New Jersey (1) (3)
100 487,718 79 
San Marcos, Texas100 471,816 89 
Sevierville, Tennessee (1)
100 447,810 97 
Savannah, Georgia100 429,089 98 
Myrtle Beach Hwy 501, South Carolina100 426,523 97 
Glendale, Arizona (Westgate)100 410,753 94 
Myrtle Beach Hwy 17, South Carolina (1)
100 404,710 100 
Charleston, South Carolina100 386,328 97 
Lancaster, Pennsylvania100 375,857 99 
Pittsburgh, Pennsylvania100 373,863 89 
Commerce, Georgia100 371,408 90 
Grand Rapids, Michigan100 357,122 86 
Fort Worth, Texas100 351,741 98 
Daytona Beach, Florida100 351,721 99 
Branson, Missouri100 329,861 98 
Southaven, Mississippi (2) (3)
50 324,717 96 
Locust Grove, Georgia100 321,082 95 
Gonzales, Louisiana100 321,066 89 
Mebane, North Carolina100 318,886 99 
Howell, Michigan100 314,438 74 
Mashantucket, Connecticut (Foxwoods) (1)
100 311,283 76 
Tilton, New Hampshire100 250,139 79 
Hershey, Pennsylvania100 249,696 98 
Hilton Head II, South Carolina100 206,564 96 
Hilton Head I, South Carolina100 181,67095 
Blowing Rock, North Carolina100 104,009 88 
Totals11,456,030 92 
(1)These properties or a portion thereof are subject to a ground lease.
(2)Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture’s 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 5 and 6 to the consolidated financial statements for further details of our debt obligations.
39

Consolidated Outlet Centers Legal Square %
Location Ownership % Feet Occupied
Deer Park, New York 100 739,110
 98 
Riverhead, New York (1)
 100 729,778
 92 
Rehoboth Beach, Delaware (1)
 100 557,353
 95 
Foley, Alabama 100 554,587
 88 
Atlantic City, New Jersey (1) (3)
 100 489,718
 79 
San Marcos, Texas 100 471,816
 95 
Sevierville, Tennessee (1)
 100 447,815
 99 
Savannah, Georgia 100 429,089
 96 
Myrtle Beach Hwy 501, South Carolina 100 426,523
 96 
Jeffersonville, Ohio 100 411,904
 84 
Glendale, Arizona (Westgate) 100 410,751
 97 
Myrtle Beach Hwy 17, South Carolina (1)
 100 403,425
 99 
Charleston, South Carolina 100 379,328
 100 
Lancaster, Pennsylvania 100 375,857
 91 
Pittsburgh, Pennsylvania 100 373,863
 95 
Commerce, Georgia 100 371,408
 96 
Grand Rapids, Michigan 100 357,119
 90 
Fort Worth, Texas 100 351,741
 99 
Daytona Beach, Florida 100 351,721
 98 
Branson, Missouri 100 329,861
 99 
Southaven, Mississippi (2) (3)
 50 324,717
 99 
Locust Grove, Georgia 100 321,082
 95 
Gonzales, Louisiana 100 321,066
 96 
Mebane, North Carolina 100 318,886
 100 
Howell, Michigan 100 314,438
 88 
Mashantucket, Connecticut (Foxwoods) (1)
 100 311,507
 93 
Tilton, New Hampshire 100 250,107
 93 
Hershey, Pennsylvania 100 249,696
 99 
Hilton Head II, South Carolina 100 206,564
 98 
Hilton Head I, South Carolina 100 181,670
 97 
Terrell, Texas 100 177,800
 87 
Blowing Rock, North Carolina 100 104,009
 85 
Totals   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’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 6 and 7 to the consolidated financial statements for further details of our debt obligations.

Unconsolidated joint venture propertiesLegalSquare%
LocationOwnership %FeetOccupied
Charlotte, North Carolina (1)
50 398,644 98 
Ottawa, Ontario50 357,217 95 
Columbus, Ohio (1)
50 355,245 94 
Texas City, Texas (Galveston/Houston) (1)
50 352,705 92 
National Harbor, Maryland (1)
50 341,156 100 
Cookstown, Ontario50 307,883 92 
Total2,112,850 95 

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

Unconsolidated joint venture properties Legal Square % 
Location Ownership % Feet Occupied 
Charlotte, North Carolina (1)
 50 398,676
 97 
Ottawa, Ontario 50 357,218
 96 
Columbus, Ohio (1)
 50 355,245
 97 
Texas City, Texas (Galveston/Houston) (1)
 50 352,705
 92 
National Harbor, Maryland (1)
 50 341,156
 96 
Cookstown, Ontario 50 307,895
 100 
Saint-Sauveur, Quebec (1)
 50 99,405
 92 
Total   2,212,300
 96 
(1)Property encumbered by mortgage. See Note 5 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”)) for leases for new stores that opened or renewals that started during the respective trailing twelve month periods ended March 31, 20202021 and 2019:2020:
Trailing twelve months ended March 31, 2021(1),(2), (3)
# of LeasesSquare 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) (4)
Re-tenant64 304 $31.56 $64.21 6.63 $21.88 
Renewal216 1,129 $26.49 $0.69 3.30 $26.28 
Trailing twelve months ended March 31, 2020(1),(2)
# of LeasesSquare 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) (4)
Re-tenant118 504 $36.13 $47.70 7.75 $29.98 
Renewal178 839 $33.32 $0.90 3.90 $33.09 
(1)Excludes license agreements, seasonal tenants, and month-to-month leases.
(2)Excludes the Terrell outlet center sold in August 2020.
(3)Excludes the Jeffersonville outlet center sold in January 2021.
(4)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.

 
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
40

(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 novel 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 collect rent under our existing leases, our ability to renew and re-lease our leased space, the outlook for the retail environment, bankruptcies and potential further 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.

Many of our tenants operate in industries that depend on in-person interactions with their customershave been and may continue to be profitable andin the future materially affected.

Due to fund their obligations under lease agreements with us. Measures taken to prevent or remediatethe 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,pandemic, 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 expectedof April 30, 2021, contractual fixed rents billed during 2020 that were deferred or under negotiation as a direct result of the COVID-19 pandemic and remain outstanding totaled $3.7 million and $2.9 million, respectively. Through April 30, 2021, the Company had collected 83% of 2020 rents deferred until 2021 and had collected 96% of the 2020 deferred rents due to be repaid in the deferment offer, April rent receipts represented approximately 12%first quarter of 2021, and as a result, the Company recorded a $1.6 million reversal of rental revenue reserves during the first quarter related to prior period rents that were previously deferred. As of March 31, 2021, remaining rental revenue reserves totaled $2.6 million, or 39% of the amount billed. Due to the potential impacttotal remaining 2020 rents deferred or under negotiation.

Based on rents received through April 30, 2021, collections of COVID-19, our revenues may be significantly lowercontractual fixed rents billed of $85.6 million in the first quarter ended June 30, 2020 thanof 2021 for the comparable period in 2019. consolidated portfolio were approximately 95%.

The extent of future tenant requests and actionsfor rent relief and the impact toon 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 majoritynone of our rentdomestic outlets centers are in advance, estimated uncollectible rents and impacts on straight–line rent receivables was not material formarkets subject to mandatory closures as April 30, 2021, our two Canadian centers held in the quarter ended March 31, 2020. However, the impact of the COVID–RioCan unconsolidated joint venture are currently under mandated closure with stay at home orders in place through May 19, pandemic on2021. If store closures were to occur again in our tenants' ability to pay rentdomestic markets, this could have a significantmaterial adverse 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.”operations.


41

RESULTS OF OPERATIONS
Comparison of the three months ended March 31, 20202021 to the three months ended March 31, 20192020

NET INCOME (LOSS)
Net income decreased $94.0 million in the 20202021 period increased $32.5 million to net loss of $28.1$4.3 million as compared to net income of $65.8a $28.1 million loss for the 20192020 period. The decreaseincrease in net income is primarily due to:to the following:
the $43.4 million gain recorded on the sale of the four outlet centers in March 2019;
the loss of revenues from the four outlet centers sold in March 2019; and
the•The $45.7 million impairment charge recognized in March 2020 on theat our outlet center in Mashantucket, Connecticut.
•Lower property operating expense due to decreased advertising and promotion expense.

Partially offsetting the impact of the items above were the following items:
•We recorded a foreign currency loss of approximately $3.6 million in other income (expense), which had been previously recorded in other comprehensive income associated with the sale of our RioCan joint venture outlet center in Saint-Sauveur.
•We recorded $2.4 million of compensation cost related to a voluntary retirement plan offer which required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021 and other executive severance.
•The sale of two operating properties since the first quarter of last year, as discussed below, and
•Lower rental revenues primarily due to lower occupancy, as discussed below.

In the tables below, information set forth for properties disposed includes the fourTerrell outlet centerscenter sold in late March 2019.August 2020 and the Jeffersonville outlet center sold in January 2021.

RENTAL REVENUES
Rental revenues decreased $11.4$11.1 million in the 20202021 period compared to the 20192020 period. The following table sets forth the changes in various components of rental revenues (in thousands):
 20212020Increase/(Decrease)
Rental revenues from existing properties$97,073 $104,296 $(7,223)
Rental revenues from properties disposed459 2,494 (2,035)
Straight-line rent adjustments(1,043)1,873 (2,916)
Lease termination fees673 164 509 
Amortization of above and below market rent adjustments, net305 (269)574 
 $97,467 $108,558 $(11,091)
  2020 2019 Increase/(Decrease)
Rental revenues from existing properties $106,778
 $110,822
 $(4,044)
Rental revenues from properties disposed 12
 6,402
 (6,390)
Straight-line rent adjustments 1,873
 1,970
 (97)
Lease termination fees 164
 1,130
 (966)
Amortization of above and below market rent adjustments, net (269) (370) 101
  $108,558
 $119,954
 $(11,396)

Rental revenues from existing properties decreased primarily due to lower average occupancy, rent modifications for certain tenants, in large partand store closings as a result of a number of bankruptcy filings, and other tenant closures during 2019 and 2020. We recaptured approximately 332,000 square feet within our consolidated portfolio during the three months ended March 31, 2020 from the early termination of leases related torecent retailer bankruptcies and brand-wide restructurings, by retailers,most of which occurred during 2020. Our overall portfolio occupancy rate declined to 91.7% as of the end of the current period 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 202094.3% as a result of the COVID-19 pandemic.end of the prior year period.

MANAGEMENT, LEASING AND OTHER REVENUESSERVICES
Management, leasing and other services decreased $71,000 in the 2021 period compared to the 2020 period. The following table sets forth the changes in various components of management, leasing and other services (in thousands):
 20212020Increase/(Decrease)
Management and marketing$509 $541 $(32)
Leasing and other fees56 20 36 
Expense reimbursements from unconsolidated joint ventures807 882 (75)
$1,372 $1,443 $(71)




42



OTHER REVENUES
Other revenues increased $223,000 in the 2021 period as compared to the 2020 period. The following table sets forth the changes in various components of other revenues (in thousands):
 20212020Increase/(Decrease)
Other revenues from existing properties$1,842 $1,595 $247 
Other revenues from properties disposed13 37 (24)
 $1,855 $1,632 $223 
  2020 2019 Increase/(Decrease)
Other revenues from existing properties $1,632
 $1,805
 $(173)
Other revenues from property disposed —
 54
 (54)
  $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 decreased $3.8$3.3 million in the 20202021 period as compared to the 20192020 period. The following table sets forth the changes in various components of property operating expenses (in thousands):
 20212020Increase/(Decrease)
Property operating expenses from existing properties$33,685 $35,502 $(1,817)
Properties operating expenses from properties disposed571 1,791 (1,220)
Expenses related to unconsolidated joint ventures808 882 (74)
Other property operating expenses247 452 (205)
 $35,311 $38,627 $(3,316)
  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)


PropertyThe decrease in property operating expenses incurred at existing properties during the 2020 period decreasedwas primarily due to lower snow removal costs.decreased advertising and promotion expense.

GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased $439,000$4.2 million in the 20202021 period compared to the 20192020 period, primarily dueas a result of $2.4 million of compensation cost related to higheremployees that accepted a voluntary retirement plan with an effective retirement date of March 31, 2021 and other executive severance. Additionally, the 2021 period included incremental compensation following the 2020 period related to executives hired after March 31, 2020, including our current President and Chief Executive Officer, hired in April 2020, and our Executive Vice President of Operations, hired in October 2020. Also, the 2021 period included increases in other professional and legal fees, partially offset by lower employeesome of which are related costs.to collection of rents during the COVID-19 mandated shut downs.

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 decline 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 property's carrying value over its estimated fair value.

DEPRECIATION AND AMORTIZATION
Depreciation and amortization costs decreased $2.3$1.3 million in the 20202021 period compared to the 20192020 period. The following table sets forth the changes in various components of depreciation and amortization costs from the 20192020 period to the 20202021 period (in thousands):
 20212020Increase/(Decrease)
Depreciation and amortization from existing properties$28,112 $29,136 $(1,024)
Depreciation and amortization from properties disposed38 281 (243)
 $28,150 $29,417 $(1,267)
  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 JeffersonvilleFoxwoods property due to the impairmentimpairments recorded in the first and fourth quarterquarters of 2019.2020.







43

OTHER INCOME (EXPENSE)
Other income (expense) decreased approximately $3.7 million in the 2021 period compared to the 2020 period. In March 2021, the RioCan joint venture closed on the sale of its outlet center in Saint-Sauveur, for net proceeds of approximately $9.4 million. Our share of the proceeds was approximately $4.7 million. As a result of this transaction, we recorded a foreign currency loss of approximately $3.6 million in other income (expense), which had been previously recorded in other comprehensive income.

INTEREST EXPENSE
Interest expense decreased $1.1 million$834,000 in the 20202021 period compared to the 2019 period primarily2020 period. Since March 31, 2020, we lowered the average interest rate on $300 million of variable rate debt by approximately 100 basis points by entering into several interest rate protection agreements. This decrease was partially offset by higher loan cost amortization from the usecost of amending our debt covenants during the net proceeds from the salesecond quarter of four properties in March 2019, as well as other general operating cash flows2020 related to reduce amounts outstanding on our unsecured lines of credit throughout 2019. During the 2020 period, we had minimal borrowings outstanding onand 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.term loan.

GAIN ON SALE OF ASSETS
In March 2019, we sold four 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 decreasedincreased approximately $102,000$242,000 in the 20202021 period compared to the 20192020 period. In the table below, information set forth for properties disposed includes the RioCanSaint-Sauveur outlet center in our Canadian joint venture’s Bromont outlet center,venture, which was sold in May 2019.March 2021.

 20212020Increase/(Decrease)
Equity in earnings (losses) from existing properties$1,579 $1,458 $121 
Equity in earnings from properties disposed190 69 121 
 $1,769 $1,527 $242 

  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 decreased primarily due to a 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 related to the two mortgages decreased approximately 1.1% in the comparable periods.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

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

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

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

We are a well-known seasoned issuer with a shelf registration that expires in March 2021February 2024 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.



44

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



The Company believes the Operating Partnership’s sources of working capital, specifically its cash flow from operations and cash on hand, are adequate for it to make its distribution payments to the Company and, in turn, for the Company to make itsany 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’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including its ability to make distribution payments to the Company. The unavailability of capital could adversely affect the Operating Partnership’s ability to pay its distributions to the Company which will, in turn, adversely affect the Company’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.”Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2020.

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

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

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

In February 2021, we commenced an at-the-market share offering program (“ATM Offering”) under our shelf registration statement on Form S-3. We may offer and sell our common shares, $0.01 par value per share (“Common Shares”), having an aggregate gross sales price of up to $250.0 million (the “Shares”). We may sell the Shares in amounts and at times to be determined by us but we have no obligation to sell any of the Shares. Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Common Shares, capital needs and determinations by us of the appropriate sources of its funding. The Operating Partnership currently intends to use the net proceeds from the sale of shares pursuant to the ATM Offering for working capital and general corporate purposes.

45

The following table sets forth information regarding settlements under our ATM offering program:
Three months ended March 31,
20212020
Number of common shares settled during the period6,867,078 — 
Average price per share$19.02 $— 
Aggregate gross proceeds (in thousands)$130,638 $— 
Aggregate net proceeds after selling commissions (in thousands)$128,655 $— 

In February 2019, the Company’s Board of Directors authorized the repurchase of an additional $44.3 million of our outstanding common shares for an aggregate authorization of $169.3 million until May 18, 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. WeThe Company did not repurchase any shares for the periods ended March 31, 20202021 and March 31, 2019.2020. The remaining amount authorized to be repurchased under the program as of March 31, 20202021 was approximately $80.0 million. For more information, see “Item 2. Unregistered SalesThe Company has temporarily suspended share repurchases for at least the twelve months starting July 1, 2020 as the June 2020 amendments to our debt agreements for our lines of Equity Securitiescredit and Use of Proceeds” in Part II of this Quarterly Report on Form 10-Q.bank term loan prohibit share repurchases during such time.

In January 2020,2021, the Company's Board of Directors declared a $0.355$0.1775 cash dividend per common share payable on February 14, 202012, 2021 to each shareholder of record on January 31, 2020,29, 2021, and the Trustees of Tanger GP Trust declared a $0.355$0.1775 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

Additionally in January 2020,In April 2021, the Company's Board of Directors declared a quarterly dividend of $0.3575$0.1775 cash dividend per common share payable on May 15, 202014, 2021 to holderseach shareholder of record on April 30, 2020,March 31, 2021, and the Trustees of Tanger GP Trust declared $0.3575 a $0.1775 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 and Capital Resources of the Operating Partnership” section, the terms “we”, “our” and “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’s debt offerings and the Company’s equity offerings.

We believe we achieve a strong and flexible financial position by attempting to: (1) maintain a conservativeprudent 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 titledthe “Risk Factors.” Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2020.

46

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. AsFor details of our expected due to the deferment offer, April rent receipts represented approximately12%collection of the amount billed. Due to the potential impact of COVID-19, our revenues may be significantly lowerrents billed in the quarter ended June 30,second through fourth quarters of 2020, than the comparable period in 2019. The extentsee “Management’s Discussion and Analysis of tenant requestsFinancial Condition and actions and the impact to the Company’s resultsResults 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.Operations-COVID-19 Pandemic.”

Cash Flows

The following table sets forth our changes in cash flows (in thousands):
Three months ended March 31,
 20212020Change
Net cash provided by operating activities$31,201 $27,340 $3,861 
Net cash provided by (used in) investing activities2,717 (6,377)9,094 
Net cash provided by financing activities82,956 562,901 (479,945)
Effect of foreign currency rate changes on cash and equivalents(60)(24)(36)
Net increase in cash and cash equivalents$116,814 $583,840 $(467,026)
  Three months ended March 31,  
  2020 2019 Change
Net cash provided by operating activities $27,340
 $33,214
 $(5,874)
Net cash provided by (used in) investing activities (6,377) 127,273
 (133,650)
Net cash provided by (used) in financing activities 562,901
 (167,898) 730,799
Effect of foreign currency rate changes on cash and equivalents (24) (10) (14)
Net increase (decrease) in cash and cash equivalents $583,840
 $(7,421) $591,261



Operating Activities

The decreaseincrease in net cash provided by operating activities in the 2019 period was primarily due to the salecollection of rent deferred from April and May of 2020 during the beginning of the four outlet centers in March 2019 in addition to lower average occupancy and rent modifications for certain tenants.COVID-19 pandemic. These rents were payable during the first quarter of 2021.

Investing Activities

The primary cause for the decreaseincrease in net cash provided by investing activities was due to the net proceeds of approximately $128.2 million$8.1 from the sale of the fourour Jeffersonville outlet centerscenter in the 20192021 period and increased distributions in excess of cumulative earnings from unconsolidated joint ventures. These increases were partially offset by the $7.0 million contribution made to the Galveston/Houston joint venture to reduce the principal balance of the mortgage loan. In addition, we had lower additions to rental properties in the 2021 period.

Financing Activities

The primary cause for the increasedecrease in net cash provided by financing activities was due to the $599.8 millionour draw down of substantially all of the available capacity under our $600.0 million unsecured lines of credit in responseMarch 2020, due to the COVID-19 pandemic. In addition, inAlso impacting the prior year we useddecrease was mortgage repayments during the 2021 period being higher than the 2020 period. These decrease was partially offset by the proceeds from the saleour common share offering of our Nags Head, Ocean City, Park City$128.7 million in March 2021 and, Williamsburg outlet centersin addition, and lower dividend payments in 2021 compared to pay down our unsecured lines of credit.2020.

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Capital Expenditures

The following table details our capital expenditures (in thousands):
Three months ended March 31,
 20212020Change
Capital expenditures analysis:
New outlet center developments and expansions$131 $843 $(712)
Major outlet center renovations23 2,170 (2,147)
Second generation tenant allowances778 908 (130)
Other capital expenditures2,634 2,976 (342)
3,566 6,897 (3,331)
Conversion from accrual to cash basis3,791 3,654 137 
Additions to rental property-cash basis$7,357 $10,551 $(3,194)
  Three months ended March 31,  
  2020 2019 Change
Capital expenditures analysis:      
New outlet center developments and expansions $843
 $939
 $(96)
Major outlet center renovations 2,170
 197
 1,973
Second generation tenant allowances 908
 2,974
 (2,066)
Other capital expenditures 2,976
 2,907
 69
  6,897
 7,017
 (120)
Conversion from accrual to cash basis 3,654
 2,889
 765
Additions to rental property-cash basis $10,551
 $9,906
 $645
•New developments and expansions decreased due to a suspension of major development projects because of the uncertainty caused by the COVID-19 pandemic.

•Major outlet center renovations in the 2020 period included costs related to bringing two magnet tenants to our Lancaster outlet center.

Potential Future Developments, Acquisitions and Dispositions

We are in the initial study period for potential new developments, including a potential site in Nashville, Tennessee. We may also use joint venture arrangementsarrangement to develop other potential sites. GivenWhile temporarily deferred during the uncertainties of the COVID-19 Pandemic,pandemic crisis, we have temporarily deferredrecently restarted our marketing efforts for the planned Nashville projectdevelopment, and certain other planned capital expenditures. Accordingly,as restrictions are lifted potential tenants are making site visits. However, there can be no assurance that these potential future projects will ultimately be developed.

In the case of projects to be wholly-owned by us, we would expect to fund these projects from amounts available under our unsecured lines of credit, but may also fund them with capital from additional public debt and equity offerings. For projects to be developed through joint venture arrangements, we may use collateralized construction loans to fund a portion of the project, with our share of the equity requirements funded from sources described above. See “Off-Balance Sheet Arrangements” for a discussion of unconsolidated joint venture development activities.



We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet centers. However, you should note that any developments or expansions that we, or a joint venture that we have an ownership interest in, have planned or anticipated may not be started or completed as scheduled, or may not result in accretive net income or funds from operations (“FFO”). See the section “Non-GAAP Supplemental Earnings Measures - Funds From Operations” below for further discussion of FFO. In addition, we regularly evaluate acquisition or disposition proposals and engage from time to time in negotiations for acquisitions or dispositions of properties. We may also enter into letters of intent for the purchase or sale of properties. Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated, or if consummated, may not result in an increase in earnings or liquidity.

Financing Arrangements

As of 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, 2020,2021, unsecured borrowings represented 96%95% of our outstanding debt and 92% of the gross book value of our real estate portfolio was unencumbered. The Company guarantees the Operating Partnership’s obligations under our lines of credit.

48

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 aand Operating Partnership are well-known seasoned issuerissuers with a joint shelf registration statement on Form S-3, with the Operating Partnership, expiring in March 2021,February 2024, 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 fromThe extent to which the COVID-19 pandemic we are unablecontinues 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 forwill depend on future developments which are highly uncertain and cannot be predicted with confidence, including the second quarterscope, severity and duration of 2020the pandemic, the actions taken to contain the pandemic or mitigate its impact, the timing or effectiveness of any vaccines or treatments, and thereafter due to numerous uncertainties. At the enddirect and indirect economic effects of April 2020, we had $594.0the pandemic and containment measures, among others. As of March 31, 2021, the Company’s total liquidity was approximately $802 million, including cash and cash equivalents on the Company’s balance sheet and the full undrawn capacity under its $600 million unsecured lines of cash on our balance sheet.credit. Based on pre-COVID-19 estimated monthly cash expenditures of approximately $25$26.3 million per month,(excluding dividends and debt maturities) for the remainder of 2021, 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).at least the next 12 months. 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.credit to the extent there are amounts outstanding. The unsecured lines of credit expire in October 2021, with a one-year extension option whereby we may extend the maturity to October 2022.
The interest rate spreads associated with our unsecuredIn April 2021, Moody’s lowered the company’s credit rating to Baa3, stable. As the Company no longer has a split rating between the rating agencies the pricing over LIBOR for the lines of credit, and our unsecured term loan are based on the higherand facility fee will increase to 1.20%, 1.25% and .25%, respectively, effective May 1, 2021.

Also, in April 2021, we completed a partial redemption of $150.0 million aggregate principal amount of our two investment grade credit ratings.  Changes$250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash, which includes a make-whole premium of $13.0 million. Subsequent to our credit ratings could cause our interest rate spread to adjust accordingly. In February 2020, due to a change in our credit rating, our interest rate spread over LIBOR on our $600.0the redemption, $100.0 million unsecured lineaggregate principal amount 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 Notes remains outstanding.

The Operating Partnership’s debt agreements require the maintenance of certain ratios, including debt service coverage and leverage, and limit the payment of dividends such that dividends and distributions will not exceed funds from operations, as defined in the agreements, for the prior fiscal year on an annual basis or 95% on a cumulative basis.





49

In June 2020, we amended the debt agreements for our lines of credit and bank term loan, primarily to improve future covenant flexibility. The amendments, among other things, allow us to access the existing surge leverage provision, which provides for an increase to the maximum thresholds to 65% from 60% for total leverage and unsecured leverage, for twelve months starting July 1, 2020, during which time share repurchases are prohibited. Additionally, the leverage covenants are determined based on the calculation period which is modified to be based on the immediately preceding three calendar month period annualized for the calculation date occurring on December 31, 2020; the immediately preceding six calendar month period annualized for the calculation date occurring on March 31, 2021; the immediately preceding nine calendar month period annualized for the calculation date occurring on June 30, 2021; and for all other calculation dates occurring during the term on the agreement, the immediately preceding twelve calendar month period. Some definitional modifications related to the calculation of certain covenants are permanent, including the netting of cash balances in excess of $30.0 million (or debt maturing in the next 24 months, if less) as well as using adjusted EBITDA, which adds back general and administrative expenses not attributable to the subsidiaries or properties and deducts a management fee of 3% of rental revenues in liability and asset calculations for certain covenants. The amendments revised the interest rate to provide a LIBOR floor of 0.25% for the portions of the lines of credit and bank term loan that are not fixed with an interest rate swap. Although the amended covenants provide additional flexibility and we expect to remain in compliance with such covenants, the potential impacts from COVID-19 are highly uncertain and therefore could impact covenant compliance in the future.

We have historically been and currently are in compliance with all of our debt covenants. TheWhile the amendments discussed above will provide additional covenant flexibility, the financial impact of the COVID-19 pandemic could potentially negatively impact our future compliance with financial covenants of our credit facilities, term loan and other debt agreements 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 result in a default which, if we were unable to cure or obtain a waiver from the lenders, could accelerate the repayment obligations. Further, in the event of default, the Company 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 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.

As of March 31, 2020,2021, 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%5545 %
Total secured debt to adjusted total assets<40%23 %
Total unencumbered assets to unsecured debt>150%175212 %

In addition, key financial covenants for our lines of credit and term loan, include the following:
RequiredActual
Total Liabilities to Total Adjusted Asset Value
<65% (1)
37 %
Secured Indebtedness to Adjusted Unencumbered Asset Value<35%5 %
EBITDA to Fixed Charges>1.53.3 
Total Unsecured Indebtedness to Adjusted Unencumbered Asset Value
<65% (1)
33 %
Unencumbered Interest Coverage Ratio>1.53.7 
(1)In June 2020, we amended the debt agreements for our lines of credit and bank term loan which, among other things, allow us to access the existing surge leverage provision, which provides for an increase to the maximum thresholds to 65% from 60% for total leverage and unsecured leverage, for twelve months starting July 1, 2020.

50

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

ThereSee Note 6 to the consolidated financial statements for additional information on our $25.0 million pay down of our unsecured term loan in March 2021. Other than the foregoing, there were no material changes in our commitments during the three months ended March 31, 20202021 under contractual obligations from those disclosed in our 2020 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):2020.

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 sevensix unconsolidated outlet centers totaling approximately 2.22.1 million square feet, including threetwo outlet centers in Canada. See Note 54 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 for 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, 20202021 (dollars in millions):
Joint VentureTotal Joint
Venture Debt		Maturity DateInterest RatePercent Guaranteed by the Operating PartnershipMaximum Guaranteed Amount by the Company
Charlotte$100.0 July 20284.27%— %$— 
Columbus71.0 November 2022LIBOR + 1.85%16.8 %11.9 
Galveston/Houston (1)
64.5 July 2023LIBOR + 1.85%15.5 %10.0 
National Harbor95.0 January 20304.63 %— %— 
Debt origination costs(1.3)
$329.2 $21.9 
(1)In February 2021, the Galveston/Houston joint venture amended the mortgage loan to extend the maturity to July 2023, which required a reduction in principal balance from $80.0 million to $64.5 million. The amendment also changed the interest rate from LIBOR + 1.65% to LIBOR + 1.85%.

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Joint Venture 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%
 —% $—
Columbus 85.0
 November 2020 LIBOR + 1.65%
 7.5% 6.4
Galveston/Houston 80.0
 July 2020 LIBOR + 1.65%
 12.5% 10.0
National Harbor 95.0
 January 2030 4.63% —% —
RioCan Canada 8.3
 May 2020 5.75% 33.7% 2.8
Debt premium and debt origination costs (1.1)        
  $367.2
       $19.2



CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to our 2019 Annual Report on Form 10-K for the year ended December 31, 2020 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,rental property, impairment of long-lived assets, impairment of investments, revenue recognition and revenue recognition. Other than noted below, there have beencollectibility of operating lease receivables. There were no material changes to these policies in 2020.

If the effects 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.2021.

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 a result of the COVID-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 future periods and the elections made by us at the time of entering into such concessions.




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

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

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

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

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

•FFO does not reflect changes in, or cash requirements for, our working capital needs;

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and FFO does not reflect any cash requirements for such replacements; and

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

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




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Core Funds From Operations

If applicable, weWe 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.




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Below is a reconciliation of net income to FFO and Core FFO available to common shareholders (in thousands, except per share amounts):
 Three months ended
 March 31,
 20212020
Net income (loss)$4,342 $(28,119)
Adjusted for:
Depreciation and amortization of real estate assets - consolidated27,554 28,801 
Depreciation and amortization of real estate assets - unconsolidated joint ventures2,996 3,018 
Impairment charge - consolidated— 45,675 
Loss on sale of joint venture property, including foreign currency effect(1)
3,704 — 
FFO38,596 49,375 
FFO attributable to noncontrolling interests in other consolidated partnerships— (190)
Allocation of earnings to participating securities(392)(516)
FFO available to common shareholders (2)
$38,204 $48,669 
As further adjusted for:
Compensation related to voluntary retirement plan and other executive severance (3)
2,418 — 
Impact of above adjustment to the allocation of earnings to participating securities(22)— 
Core FFO available to common shareholders (2)
$40,600 $48,669 
FFO available to common shareholders per share - diluted (2)
$0.38 $0.50 
Core FFO available to common shareholders per share - diluted (2)
$0.40 $0.50 
 
Weighted Average Shares:
Basic weighted average common shares94,812 92,500 
Effect of notional units288 — 
Effect of outstanding options and restricted common shares717 — 
Diluted weighted average common shares (for earnings per share computations)95,817 92,500 
Exchangeable operating partnership units4,794 4,911 
Diluted weighted average common shares (for FFO per share computations) (2)
100,611 97,411 
  Three months ended
  March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Adjusted for:    
Depreciation and amortization of real estate assets - consolidated 28,801
 31,148
Depreciation and amortization of real estate assets - unconsolidated joint ventures 3,018
 3,130
Impairment charge - consolidated 45,675
 —
Gain on sale of assets —
 (43,422)
FFO 49,375
 56,697
FFO attributable to noncontrolling interests in other consolidated partnerships (190) (195)
Allocation of earnings to participating securities (516) (611)
FFO available to common shareholders  (1)
 $48,669
 $55,891
FFO available to common shareholders per share - diluted (1)
 $0.50
 $0.57
     
Weighted Average Shares:    
Basic weighted average common shares 92,500
 93,303
Diluted weighted average common shares (for earnings per share computations) 92,500
 93,303
Exchangeable operating partnership units 4,911
 4,961
Diluted weighted average common shares (for FFO per share computations) (1)
 97,411
 98,264
(1)The three months ended March 31, 2021 includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.
(1)Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.
(2)Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.
(3)Represents compensation cost related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021.

Portfolio Net Operating Income and Same Center NOI

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

55

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

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


Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio (in thousands):
Three months ended
March 31,
20212020
Net income (loss)$4,342 $(28,119)
Adjusted to exclude:
Equity in earnings of unconsolidated joint ventures(1,769)(1,527)
Interest expense14,362 15,196 
Other (income) expense3,505 (220)
Impairment charge— 45,675 
Depreciation and amortization28,150 29,417 
Other non-property (income) expense(400)139 
Corporate general and administrative expenses16,770 12,579 
Non-cash adjustments(1)
844 (1,502)
Lease termination fees(673)(164)
Portfolio NOI65,131 71,474 
Non-same center NOI(2)
(83)(741)
Same Center NOI$65,048 $70,733 
  Three months ended
  March 31,
  2020 2019
Net income (loss) $(28,119) $65,841
Adjusted to exclude:    
Equity in earnings of unconsolidated joint ventures (1,527) (1,629)
Interest expense 15,196
 16,307
Gain on sale of assets —
 (43,422)
Other non-operating income (220) (224)
Impairment charge 45,675
 —
Depreciation and amortization 29,417
 31,760
Other non-property expense 139
 150
Corporate general and administrative expenses 12,579
 12,132
Non-cash adjustments(1)
 (1,502) (1,472)
Lease termination fees (164) (1,130)
Portfolio NOI 71,474
 78,313
Non-same center NOI(2)
 —
 (4,081)
Same Center NOI $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:
(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.
Outlet centers sold:
(2)TerrellExcluded from Same Center NOI:
August 2020
Outlet centers sold:
Nags Head, Ocean City, Park City, and WilliamsburgJeffersonvilleMarch 2019January 2021































56


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/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, joint venture properties and other assets, 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, compensation related to voluntary retirement plan and other executive severance, 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/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, compensation related to voluntary retirement plan and other executive severance 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.
57



Below is a reconciliation of Net Income to Adjusted EBITDA (in thousands):
Three months ended
March 31,
20212020
Net income (loss)$4,342 $(28,119)
Adjusted to exclude:
Interest expense14,362 15,196 
Depreciation and amortization28,150 29,417 
Impairment charge - consolidated— 45,675 
Loss on sale of joint venture property, including foreign currency effect (1)
3,704 — 
Compensation related to voluntary retirement plan and other executive severance (2)
2,418 — 
Adjusted EBITDA$52,976 $62,169 
  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 and Adjusted EBITDAre (in thousands):
Three months ended
March 31,
20212020
Net income (loss)$4,342 $(28,119)
Adjusted to exclude:
Interest expense14,362 15,196 
Depreciation and amortization28,150 29,417 
Impairment charge - consolidated— 45,675 
Loss on sale of joint venture property, including foreign currency effect (1)
3,704 — 
Pro-rata share of interest expense - unconsolidated joint ventures1,472 1,867 
Pro-rata share of depreciation and amortization - unconsolidated joint ventures2,996 3,018 
EBITDAre$55,026 $67,054 
Compensation related to executive officer retirement (2)
2,418 — 
Adjusted EBITDAre$57,444 $67,054 
(1)Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.
(2)Represents compensation cost related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021.




58
  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

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 current operations, the steps we have taken to increase liquidity and preserve financial flexibility 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 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’ 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 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’ 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. As a result of the COVID-19 pandemic, we have seen reductions in rental revenues as a result of declines in the sales volumes of 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 6%7% of our rental revenues.
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, 2020,2021, we had approximately 1.7 million square feet, or 14%15% of our consolidated portfolio at that time coming up for renewal during 2020.2021. As of March 31, 2020,2021, we had renewed approximately 52%40% of this space. In addition, for the rolling twelve months ended March 31, 2020,2021, we completed renewals and re-tenanted space totaling 1.31.4 million square feet at a blended 1.5%2.8% 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 current 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. Our outlook for 2021 remains unchanged. While we are encouraged by the pace of our progress, we continue to anticipate pressure from current vacancies, potential additional store closures and potential rent modifications. 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 filing for protection under bankruptcy laws, or may request modifications to their existing lease terms. We have recaptured approximately 332,00061,000 square feet within our consolidated portfolio during the three months ended March 31, 20202021 related to bankruptcies and brand-wide restructurings by retailers, compared to 82,000332,000 square feet for the three months ended March 31, 2019.2020.

Collections of contractual fixed rents billed in the first quarter of 2021 was approximately 95%. We expect other store closings or rent modificationsalso continued to impactcollect rents billed for prior periods, including amounts related to 2020 we allowed 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. Duetenants 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 compareddefer to 2019 to be adversely impacted.2021.

We believe outlet stores will continue to be 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 94.3%91.7% and 95.4%94.3% as of March 31, 20202021 and 2019,2020, respectively. As a result of COVID-19 and current economic conditions, occupancy could be negatively impacted in 2020the remainder of 2021 and 2021.future periods.



59

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 $540.0$300.0 million. See Note 87 to the consolidated financial statements for additional details related to our outstanding derivatives.

As of March 31, 2020, 28%2021, 5% 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 was subject to market fluctuations. A change in the LIBOR index of 100 basis points would result in an increase or decrease of approximately $6.1 million$764,000 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 interest rate spreads associated with our unsecured lines of credit and our unsecured term loan are based on the higher of our two investment grade credit ratings. Changes to our credit ratings could cause our interest rate spread to adjust accordingly. In April 2021, Moody’s lowered the company’s credit rating to Baa3, stable. As the Company no longer has a split rating between the rating agencies the pricing over LIBOR for the lines of credit, term loan and facility fee will increase to 1.20%, 1.25% and .25%, respectively, effective May 1, 2021. As of March 31, 2021, there were no outstanding balances under our unsecured lines of credit. If additional decreases to our credit ratings occurs, interest expense could increase depending upon the level of downgrade.

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, 2021December 31, 2020
Fair value of debt$1,632,579 $1,639,803 
Recorded value of debt$1,542,760 $1,567,886 

60
  March 31, 2020 December 31, 2019
Fair value of debt $2,181,170
 $1,603,814
Recorded value of debt $2,167,554
 $1,569,773


A 100 basis point increase from prevailing interest rates at March 31, 20202021 and December 31, 20192020 would result in a decrease in fair value of total consolidated debt of approximately $58.6$54.1 million and $62.9$55.8 million, respectively. Refer to Note 98 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 we 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’s management carried out an evaluation, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2020.2021. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2020.2021. There were no changes to the Company’s internal control over financial reporting during the quarter ended March 31, 2020,2021, that materially affected, or are reasonably likely to materially affect, the Company’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’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’s general partner, of the effectiveness of the Operating Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2020.2021. Based on this evaluation, the Chief Executive Officer of the Operating Partnership’s general partner, and the Vice-President and Treasurer of the Operating Partnership’s general partner, have concluded that the Operating Partnership’s disclosure controls and procedures were effective as of March 31, 2020.2021. There were no changes to the Operating Partnership’s internal control over financial reporting during the quarter ended March 31, 2020,2021, that materially affected, or are reasonably likely to materially affect, the Operating Partnership’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.


61

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

The following information updatesThere have been no material changes from 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, 2019. Except2020.
62

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

(c) Issuer Purchases of Equity Securities

In February 2019, the Company’s Board of Directors authorized the repurchase of an additional $44.3 million of our outstanding common shares for an aggregate authorization of $169.3 million until May 18, 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. The Company did not repurchase any shares for the additional risk factor provided below, there have been no material changes inquarters ended March 31, 2021 and 2020. The remaining amount authorized to be repurchased under the Company's risk factors from those disclosed inprogram as of March 31, 2021 was approximately $80.0 million. The Company has temporarily suspended share repurchases for at least the 2019 Form 10-K.twelve months starting July 1, 2020 as the June 2020 amendments to our debt agreements for our lines of credit and bank term loan prohibit share repurchases during such time.

The current COVID-19 Pandemic has negatively affected and will likely continue to negatively affectfollowing table summarizes our business, financial condition, liquidity and results of operations and those of our tenants.

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, 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 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. 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 remediescommon share repurchases for the failure 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 thefiscal 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. 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.



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
2021:
Exhibit NumberPeriodExhibit DescriptionsTotal number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of publicly announced plans or programsApproximate dollar value of shares that may yet be purchased under the plans or programs
(in millions)
January 1, 2021 to January 31, 2021— $— — $80.0 
10.1February 1, 2021 to February 29, 2021
— — — 80.0 
March 1, 2021 to March 31, 2021— — — 80.0 
Total— $— — $80.0 

For certain restricted common shares that vested during the three months ended March 31, 2021, we withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total number of shares withheld upon vesting was 112,000 for the three months ended March 31, 2021. 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.




63

Item 6. Exhibits
Exhibit NumberExhibit Descriptions
10.1 
31.1*
10.2
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*
31.2*
31.3*
31.3*
31.4*
32.1**
32.2**
32.2**
32.3**
32.3**
32.4**
32.4**
101.INS*
101.INS*
Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
104*
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
** Furnished herewith.


64

SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrantregistrant has duly caused this Reportreport to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: May 11, 2020
7, 2021
TANGER FACTORY OUTLET CENTERS, INC.
By:/s/ James F. Williams
James F. Williams
Executive Vice President, and Chief Financial Officer and Treasurer
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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