Tanger Outlets(US:SKT)2021-02-23 22:00Portfolio Overview - As of December 31, 2020, the consolidated portfolio consisted of 31 outlet centers with a total gross leasable area of approximately 11.9 million square feet, 92% occupied, containing over 2,200 stores representing approximately 400 store brands[27] - As of December 31, 2020, the consolidated portfolio consisted of 31 outlet centers totaling 11.9 million square feet located in 19 states[142] - The company operated 31 consolidated outlet centers as of December 31, 2020, down from 32 in 2019[201] - The company had a total of 12,923 thousand square feet in consolidated outlet centers as of December 31, 2018, which decreased to 11,873 thousand square feet by December 31, 2020[223] Financial Performance - Total revenues for 2020 were $389.99 million, a decrease of 18.5% from $478.35 million in 2019[201] - Net loss for 2020 was $38.01 million, compared to a net income of $92.73 million in 2019[201] - Cash flows from operating activities were $164.75 million in 2020, a decline from $220.45 million in 2019[201] - Real estate assets before depreciation decreased to $2.79 billion in 2020 from $2.90 billion in 2019[201] - Total equity fell to $358.88 million in 2020, down from $456.11 million in 2019[201] - The company had a total debt of $1.57 billion as of December 31, 2020, which was relatively stable compared to $1.57 billion in 2019[209] Rent Collection and Tenant Operations - Rent collection rates improved significantly, with approximately 63% of second quarter billed rents collected, 91% in the third quarter, and 95% in the fourth quarter of 2020[33] - The company experienced a negative impact of approximately $47.3 million on earnings due to write-offs related to bankruptcies and uncollectible accounts during the pandemic[35] - A significant number of tenants have either closed their businesses or operated with limited operations due to COVID-19, adversely affecting their ability to maintain profitability and make rental payments[106] - The company is closely monitoring changes in the collectability of tenant receivables due to adverse financial consequences from COVID-19, which could lead to material modifications in future revenues[106] Impairment and Asset Management - The company recorded a $45.7 million impairment charge in March 2020 and an additional $19.2 million in December 2020 related to the Foxwoods outlet center[41] - The company recorded impairment charges of $67.2 million on outlet centers in Mashantucket, Connecticut, and Jeffersonville, Ohio, for the year ended December 31, 2020[210] - The carrying value of one outlet center is approximately $122.5 million, with an estimated fair value significantly less than this amount, but no impairment charge was recorded as the carrying amount is believed to be recoverable[96] Leasing Activity - The company renewed 209 leases in 2020, covering 1.1 million square feet, with an average annual straight-line rent of $25.01 per square foot[224] - In 2020, the company executed 70 re-tenant leases averaging 350,000 square feet with a net average annual straight-line rent of $20.90 per square foot[224] - The average annual base rent per square foot decreased from $26.10 in 2016 to $21.10 in 2020, reflecting a decline in occupancy and rent modifications due to tenant bankruptcies[157][158] - The average rental rate for renewed leases in 2020 was $27.23 per square foot, reflecting a 7% decrease compared to previous years[161] Strategic Plans and Market Expansion - The company aims to build shareholder value through a conservative plan focused on increasing rents, renovating existing centers, and expanding into new markets via developments or acquisitions[61] - The company plans to continue its strategy of market expansion through the development of new outlet centers and acquisitions[144] - New outlet centers are targeted in markets with at least one million residents and an average household income of $65,000, with centers typically designed to accommodate 60 to 90 stores totaling 250,000 to 350,000 square feet[64] Employee and Diversity Initiatives - As of December 31, 2020, the company employed 262 full-time and 265 part-time employees, with a turnover rate of 28%, significantly below the industry average of 39%[84] - The company is committed to diversity, with 72% of field employees being female and 22% of the workforce being ethnic minorities as of December 31, 2020[83] Risks and Challenges - The COVID-19 pandemic has negatively impacted tenant operations, leading to requests for rent deferrals and potential bankruptcies, which could reduce cash flows and affect dividend payments[105] - The company faces competition for the acquisition and development of outlet centers, which may increase prices and reduce profitability[99] - The company is dependent on rental income from real property, and any decrease in rental rates or tenant defaults could adversely affect income and funds for distribution[110] - The company faces risks associated with climate change, which could lead to volatile demand for retail space at certain properties[116] Debt and Financial Covenants - The company had $401.4 million of debt and nine interest rate swaps with an aggregate notional value of $390.0 million outstanding that were indexed to LIBOR as of December 31, 2020[128] - The financial impact of the COVID-19 pandemic could negatively affect compliance with financial covenants and result in defaults on debt agreements[108] - The company is required to distribute at least 90% of its net taxable income each year to maintain its REIT status[133] Future Outlook - The company expects continued challenges due to the COVID-19 pandemic affecting financial results and operations[218] - Future plans include potential developments, expansions, and acquisitions of outlet centers, contingent on market conditions[219]