Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today
financial and operating results for the twelve and three months
ended December 31, 2016.
YEAR 2016 HIGHLIGHTS
- $32.8mm of net income attributable to common
stockholders ($0.31 per diluted share)
- 12.5% increase in Funds From Operations
(FFO)(1) per diluted share to $1.08 (’16 vs.
’15)
- $332.6 million of grocery-anchored shopping center
acquisitions completed in 2016
- 5.3% increase in same-center cash net operating income
(2016 vs. 2015)
- 97.6% portfolio lease rate at year-end 2016 (4th
consecutive year above 96%)
- 1.3 million square feet of leases executed (new and
renewed)
- 29.3% increase in same-space cash rents on new leases
(12.2% increase on renewals)
- $424.1 million of capital raised (stock, operating
partnership units and unsecured debt)
- 31.4% debt-to-total market cap ratio at year-end 2016
(lowest year-end level since 2011)
4TH QUARTER 2016
HIGHLIGHTS
- $9.6mm of net income attributable to common
stockholders ($0.09 per diluted share)
- 8.0% increase in FFO per diluted share to $0.27 (4Q’16
vs 4Q’15)
- $61.9 million of grocery-anchored shopping center
acquisitions completed in 4Q’16
- 5.5% increase in same-center cash net operating income
(4Q’16 vs. 4Q’15)
- 33.1% increase in same-space cash rents on new leases
(16.7% increase on renewals)
- 4.0x interest coverage (4th consecutive year-end at or
above 4.0x)
- $0.18 quarterly cash dividend paid
- 4.2% increase in quarterly cash dividend ($0.1875
quarterly cash dividend declared)
_____________________
(1) A reconciliation of GAAP net income to
Funds From Operations (FFO) is provided at the end of this press
release.
Stuart A. Tanz, President and Chief Executive
Officer of Retail Opportunity Investments Corp. stated, “2016
proved to be another stellar year of growth and performance for the
company. We continued to enhance our presence across the West
Coast, through our disciplined acquisition program, adding $332.6
million of grocery-anchored shopping centers to our
portfolio. For the fourth consecutive year we achieved a
portfolio lease rate above 96%, finishing 2016 at a strong
97.6%. We again posted solid rent growth, including a 29.3%
increase in base rents on new leases, which helped to drive
same-center net operating income to new heights, achieving a 5.3%
increase for the year. Additionally, we continued to maintain
our financial strength and flexibility raising a balance of new
capital, totaling $424.1 million, to prudently fund our
growth.” Tanz concluded, “Looking ahead at 2017 and beyond,
we intend to remain steadfast to the core principals that have
driven our success thus far and are confident in our ability to
continue to build value and deliver strong results.”
FINANCIAL SUMMARY
For the twelve months ended December 31, 2016,
GAAP net income attributable to common stockholders was $32.8
million, or $0.31 per diluted share, as compared to GAAP net income
of $23.9 million, or $0.25 per diluted share for the twelve months
ended December 31, 2015. For the three months ended December
31, 2016, GAAP net income attributable to common stockholders was
$9.6 million, or $0.09 per diluted share, as compared to GAAP net
income of $6.9 million, or $0.07 per diluted share for the three
months ended December 31, 2015.
FFO for the full year 2016 was $124.8 million,
or $1.08 per diluted share, as compared to $96.0 million in FFO, or
$0.96 per diluted share for the full year 2015, representing a
12.5% increase on a per diluted share basis. FFO for the
fourth quarter of 2016 was $33.2 million, or $0.27 per diluted
share, as compared to $25.9 million in FFO, or $0.25 per diluted
share for the fourth quarter of 2015, representing an 8.0% increase
on a per diluted share basis. ROIC reports FFO as a
supplemental performance measure in accordance with the definition
set forth by the National Association of Real Estate Investment
Trusts. A reconciliation of GAAP net income to FFO is
provided at the end of this press release.
At December 31, 2016, ROIC had a total market
capitalization of approximately $3.7 billion with approximately
$1.2 billion of principal debt outstanding, equating to a 31.4%
debt-to-total market capitalization ratio. ROIC’s debt
outstanding was comprised of $70.7 million of mortgage debt and
approximately $1.1 billion of unsecured debt, including $98.0
million outstanding on its unsecured revolving credit facility at
December 31, 2016. For the fourth quarter of 2016, ROIC’s
interest coverage was 4.0 times and 94.5% of its portfolio was
unencumbered (based on gross leasable area) at year-end 2016.
2016 ACQUISITION SUMMARY
During 2016, ROIC acquired eight
grocery-anchored shopping centers totaling $332.6 million,
encompassing approximately 752,000 square feet. Included in
the $332.6 million, during the fourth quarter ROIC acquired the
following grocery-anchored shopping centers for a total of $61.9
million.
Trader Joe’s At The Knolls
In October 2016, ROIC acquired Trader Joe’s At
The Knolls for $29.1 million. The shopping center is
approximately 52,000 square feet and is anchored by Trader
Joe’s. The property is located in Long Beach, California and
is currently 100% leased.
Bridle Trails Shopping
Center
In October 2016, ROIC acquired Bridle Trails
Shopping Center for $32.8 million. The shopping center is
approximately 104,000 square feet and is anchored by Unified (Red
Apple) Supermarket and Bartell Drugs, a Seattle-based regional
pharmacy. The property is located in Kirkland, Washington,
within the Seattle metropolitan area, and is currently 100%
leased.
2017 YEAR-TO-DATE ACQUISITION
ACTIVITY
Year-to-date in 2017, ROIC has $91.8 million of
grocery-anchored acquisitions committed, including one shopping
center acquired thus far in the first quarter.
PCC Natural Markets Plaza
In January 2017, ROIC acquired PCC Natural
Markets Plaza for $8.6 million. The shopping center is
approximately 34,000 square feet and is anchored by PCC Natural
Markets and Walgreens Pharmacy (NAP). The property is located
in Edmonds, Washington, within the Seattle metropolitan area, and
is currently 100% leased.
ROIC currently has binding contracts to acquire
the following two shopping centers, in separate transactions.
The Terraces
ROIC has a binding contract to acquire The
Terraces for $54.1 million. The shopping center is
approximately 173,000 square feet and is anchored by Trader
Joe’s. The property is located in Rancho Palos Verdes,
California, within the Los Angeles metropolitan area, and is
currently 89.0% leased.
Santa Rosa Southside Shopping
Center
ROIC has a binding contract to acquire Santa
Rosa Southside Shopping Center for $29.1 million. The
shopping center is approximately 124,000 square feet and is
anchored by Cost Plus World Market, REI and Toys R Us. The
property is located in Santa Rosa, California and is currently 100%
leased. ROIC expects to fund the acquisition in part with the
issuance of approximately $3.9 million of ROIC common equity in the
form of operating partnership units, based on a value of $23.00 per
unit.
PROPERTY OPERATIONS SUMMARY
At December 31, 2016, ROIC’s portfolio was 97.6%
leased. For the full year 2016, same-center net operating
income (NOI) was $125.7 million, as compared to $119.3 million in
same-center NOI for the full year 2015, representing a 5.3%
increase. The full year comparative same-center NOI includes
all of the properties owned by ROIC as of January 1, 2015, totaling
61 shopping centers. For the fourth quarter of 2016,
same-center NOI was $35.8 million, as compared to $33.9 million in
same-center NOI for the fourth quarter of 2015, representing a 5.5%
increase. The fourth quarter comparative same-center NOI
includes all of the properties owned by ROIC as of October 1, 2015,
totaling 68 shopping centers. ROIC reports same-center NOI on
a cash basis. A reconciliation of GAAP operating income to
same-center NOI is provided at the end of this press release.
For the full year 2016, ROIC executed 386
leases, totaling approximately 1.3 million square feet, achieving
an 18.3% increase in same-space comparative base rent, including
168 new leases, totaling 585,414 square feet, achieving a 29.3%
increase in same-space comparative base rent, and 218 renewed
leases, totaling 763,069 square feet, achieving a 12.2% increase in
base rent. During the fourth quarter of 2016, ROIC executed
107 leases, totaling 446,661 square feet, achieving a 24.3%
increase in same-space comparative base rent, including 49 new
leases, totaling 240,542 square feet, achieving a 33.1% increase in
same-space comparative base rent, and 58 renewed leases, totaling
206,119 square feet, achieving a 16.7% increase in base
rent. ROIC reports same-space comparative base rent on
a cash basis.
CAPITAL MARKETS SUMMARY
During 2016, ROIC raised a total of $424.1
million in capital. In March 2016, ROIC issued $46.1 million
of ROIC common equity in the form of operating partnership units in
connection with shopping center acquisitions. Additionally,
in 2016 ROIC issued approximately 2.2 million shares of common
stock through its ATM program, raising $45.0 million in net
proceeds. Furthermore, in July 2016, ROIC issued
approximately 6.6 million shares of common stock through an
underwritten public offering, raising $133.0 million in net
proceeds. In September 2016, ROIC sold, through a direct
private placement, $200 million principal amount of 3.95% senior
unsecured notes due 2026.
CASH DIVIDEND
On December 29, 2016, ROIC distributed an $0.18
per share cash dividend. On February 22, 2017, ROIC’s board
of directors declared a cash dividend of $0.1875 per share, payable
on March 30, 2017 to stockholders of record on March 16,
2017. The $0.1875 per share dividend represents a 4.2%
increase as compared to ROIC’s previous dividend.
2017 FFO GUIDANCE
ROIC currently estimates that FFO for the full
year 2017 will be within the range of $1.10 to $1.14 per diluted
share, and net income to be within the range of $0.38 to $0.40 per
diluted share. The following table provides a reconciliation
of GAAP net income to FFO.
|
Year Ended December 31, 2017 |
|
Low End |
|
High End |
GAAP net income
applicable to stockholders |
$ |
47,400 |
|
|
$ |
49,124 |
|
Plus: Depreciation and
amortization |
89,000 |
|
|
92,266 |
|
Funds From Operations
(FFO) applicable to common stockholders
|
$ |
136,400 |
|
|
$ |
141,390 |
|
|
|
|
|
Diluted Shares |
124,000 |
|
|
124,000 |
|
|
|
|
|
Earnings per share
(diluted) |
$ |
0.38 |
|
|
$ |
0.40 |
|
FFO per share
(diluted) |
$ |
1.10 |
|
|
$ |
1.14 |
|
ROIC’s estimates are based on numerous
underlying assumptions. ROIC’s management will discuss the
company’s guidance and underlying assumptions on its February 23,
2017 conference call. ROIC’s guidance is a forward-looking
statement and is subject to risks and other factors described
elsewhere in this press release.
CONFERENCE CALL
ROIC will conduct a conference call and audio
webcast to discuss its results on Thursday, February 23, 2017 at
12:00 p.m. Eastern Time / 9:00 a.m. Pacific Time. Those
interested in participating in the conference call should dial
(877) 312-8783 (domestic), or (408) 940-3874 (international) at
least ten minutes prior to the scheduled start of the call. When
prompted, provide the Conference ID: 47933196. A live webcast will
also be available in listen-only mode at
http://www.roireit.net/. The conference call
will be recorded and available for replay beginning at 3:00 p.m.
Eastern Time on February 23, 2017 and will be available until 11:59
p.m. Eastern Time on March 2, 2017. To access the conference call
recording, dial (855) 859-2056 (domestic) or (404) 537-3406
(international) and use the Conference ID: 47933196. The conference
call will also be archived on
http://www.roireit.net/ for approximately 90
days.
ABOUT RETAIL OPPORTUNITY INVESTMENTS
CORP.
Retail Opportunity Investments Corp.
(NASDAQ:ROIC), is a fully-integrated, self-managed real estate
investment trust (REIT) that specializes in the acquisition,
ownership and management of grocery-anchored shopping centers
located in densely-populated, metropolitan markets across
the West Coast. As of December 31, 2016, ROIC owned 81
shopping centers encompassing approximately 9.4 million square
feet. ROIC is the
largest publicly-traded, grocery-anchored shopping
center REIT focused exclusively on the West Coast. ROIC
is a member of the S&P SmallCap 600 Index and has
investment-grade corporate debt ratings from Moody's Investor
Services and Standard & Poor's. Additional information is
available at: www.roireit.net.
When used herein, the words "believes,"
"anticipates," "projects," "should," "estimates," "expects,"
“guidance” and similar expressions are intended to identify
forward-looking statements within the meaning of that term in
Section 27A of the Securities Act of 1933, as amended, and in
Section 21F of the Securities and Exchange Act of 1934, as amended.
Certain statements contained herein may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results of ROIC to differ materially from future
results expressed or implied by such forward-looking
statements. Information regarding such risks and
factors is described in ROIC's filings with the SEC, including its
most recent Annual Report on Form 10-K, which is available
at: www.roireit.net
RETAIL OPPORTUNITY INVESTMENTS CORP. |
Consolidated Balance Sheets |
(In thousands, except share data) |
|
|
December 31, |
|
2016 |
|
2015 |
ASSETS |
|
|
|
Real Estate
Investments: |
|
|
|
Land |
$ |
766,199 |
|
|
$ |
669,307 |
|
Building and
improvements |
1,920,819 |
|
|
1,627,310 |
|
|
2,687,018 |
|
|
2,296,617 |
|
Less: accumulated
depreciation |
193,021 |
|
|
134,311 |
|
Real Estate
Investments, net |
2,493,997 |
|
|
2,162,306 |
|
Cash and cash
equivalents |
13,125 |
|
|
8,844 |
|
Restricted cash |
125 |
|
|
227 |
|
Tenant and other
receivables, net |
35,820 |
|
|
28,652 |
|
Deposits |
— |
|
|
500 |
|
Acquired lease
intangible assets, net |
79,205 |
|
|
66,942 |
|
Prepaid expenses |
3,317 |
|
|
1,953 |
|
Deferred charges,
net |
34,753 |
|
|
30,129 |
|
Other |
2,627 |
|
|
1,895 |
|
Total
assets |
$ |
2,662,969 |
|
|
$ |
2,301,448 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Liabilities: |
|
|
|
Term loan |
$ |
299,191 |
|
|
$ |
298,802 |
|
Credit facility |
95,654 |
|
|
132,028 |
|
Senior Notes Due
2026 |
199,727 |
|
|
— |
|
Senior Notes Due
2024 |
245,354 |
|
|
244,833 |
|
Senior Notes Due
2023 |
245,051 |
|
|
244,426 |
|
Mortgage notes
payable |
71,303 |
|
|
62,156 |
|
Acquired lease
intangible liabilities, net |
154,958 |
|
|
124,861 |
|
Accounts payable and
accrued expenses |
18,294 |
|
|
13,205 |
|
Tenants’ security
deposits |
5,950 |
|
|
5,085 |
|
Other liabilities |
11,922 |
|
|
11,036 |
|
Total
liabilities |
1,347,404 |
|
|
1,136,432 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Non-controlling
interests – redeemable OP Units |
— |
|
|
33,674 |
|
|
|
|
|
Equity: |
|
|
|
Preferred stock, $.0001
par value 50,000,000 shares authorized; none issued and
outstanding |
— |
|
|
— |
|
Common stock, $.0001
par value 500,000,000 shares authorized; and 109,301,762
and 99,531,034 shares issued and outstanding at December 31,
2016 and 2015, respectively |
11 |
|
|
10 |
|
Additional paid-in
capital |
1,357,910 |
|
|
1,166,395 |
|
Dividends in excess of
earnings |
(165,951 |
) |
|
(122,991 |
) |
Accumulated other
comprehensive loss |
(3,729 |
) |
|
(6,743 |
) |
Total Retail
Opportunity Investments Corp. stockholders’ equity |
1,188,241 |
|
|
1,036,671 |
|
Non-controlling
interests |
127,324 |
|
|
94,671 |
|
Total
equity |
1,315,565 |
|
|
1,131,342 |
|
Total
liabilities and equity |
$ |
2,662,969 |
|
|
$ |
2,301,448 |
|
|
|
|
|
RETAIL OPPORTUNITY INVESTMENTS CORP. |
Consolidated Statements of Operations |
(In thousands, except per share data) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Base rents |
$ |
48,401 |
|
|
$ |
39,738 |
|
|
$ |
183,330 |
|
|
$ |
148,622 |
|
Recoveries from
tenants |
13,812 |
|
|
10,753 |
|
|
51,454 |
|
|
40,562 |
|
Other income |
857 |
|
|
794 |
|
|
2,405 |
|
|
3,515 |
|
Total
revenues |
63,070 |
|
|
51,285 |
|
|
237,189 |
|
|
192,699 |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
Property operating |
8,440 |
|
|
7,411 |
|
|
32,201 |
|
|
28,475 |
|
Property taxes |
6,756 |
|
|
5,339 |
|
|
25,058 |
|
|
19,690 |
|
Depreciation and
amortization |
22,503 |
|
|
18,390 |
|
|
88,359 |
|
|
70,957 |
|
General and
administrative expenses |
3,065 |
|
|
3,263 |
|
|
13,120 |
|
|
12,650 |
|
Acquisition transaction
costs |
211 |
|
|
458 |
|
|
824 |
|
|
965 |
|
Other expense |
95 |
|
|
120 |
|
|
456 |
|
|
627 |
|
Total operating
expenses |
41,070 |
|
|
34,981 |
|
|
160,018 |
|
|
133,364 |
|
|
|
|
|
|
|
|
|
Operating
income |
22,000 |
|
|
16,304 |
|
|
77,171 |
|
|
59,335 |
|
|
|
|
|
|
|
|
|
Non-operating
expenses |
|
|
|
|
|
|
|
Interest expense and
other finance expenses |
(11,348 |
) |
|
(8,836 |
) |
|
(40,741 |
) |
|
(34,243 |
) |
Net income |
10,652 |
|
|
7,468 |
|
|
36,430 |
|
|
25,092 |
|
Net income attributable
to non-controlling interests |
(1,031 |
) |
|
(547 |
) |
|
(3,676 |
) |
|
(1,228 |
) |
Net Income
Attributable to Retail Opportunity Investments Corp.
|
$ |
9,621 |
|
|
$ |
6,921 |
|
|
$ |
32,754 |
|
|
$ |
23,864 |
|
|
|
|
|
|
|
|
|
Earnings per
share – basic and diluted |
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.31 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
Dividends per
common share |
$ |
0.18 |
|
|
$ |
0.17 |
|
|
$ |
0.72 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
CALCULATION OF FUNDS FROM OPERATIONS |
(Unaudited) |
(In thousands) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net income attributable
to ROIC |
$ |
9,621 |
|
|
$ |
6,921 |
|
|
$ |
32,754 |
|
|
$ |
23,864 |
|
Plus: Depreciation
and amortization |
22,503 |
|
|
18,390 |
|
|
88,359 |
|
|
70,957 |
|
Funds from operations –
basic |
32,124 |
|
|
25,311 |
|
|
121,113 |
|
|
94,821 |
|
Net income attributable
to non-controlling interests |
1,031 |
|
|
547 |
|
|
3,676 |
|
|
1,228 |
|
Funds from operations –
diluted |
$ |
33,155 |
|
|
$ |
25,858 |
|
|
$ |
124,789 |
|
|
$ |
96,049 |
|
|
|
|
|
|
|
|
|
SAME-CENTER CASH NET OPERATING INCOME
ANALYSIS |
(Unaudited) |
(In thousands, except number of shopping centers and
percentages) |
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2016 |
|
2015 |
|
$ Change |
|
% Change |
|
2016 |
|
2015 |
|
$ Change |
|
% Change |
Number of
shopping centers included in same-center analysis
|
68 |
|
|
68 |
|
|
|
|
|
|
61 |
|
|
61 |
|
|
|
|
|
Same-center
occupancy |
97.4 |
% |
|
97.3 |
% |
|
|
|
0.1 |
% |
|
97.3 |
% |
|
97.2 |
% |
|
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base rents |
$ |
35,993 |
|
|
$ |
34,883 |
|
|
$ |
1,110 |
|
|
3.2 |
% |
|
$ |
128,703 |
|
|
$ |
123,998 |
|
|
$ |
4,705 |
|
|
3.8 |
% |
|
Percentage rent |
975 |
|
|
755 |
|
|
220 |
|
|
29.1 |
% |
|
1,423 |
|
|
1,096 |
|
|
327 |
|
|
29.8 |
% |
|
Recoveries from
tenants |
11,506 |
|
|
10,679 |
|
|
827 |
|
|
7.7 |
% |
|
41,107 |
|
|
38,188 |
|
|
2,919 |
|
|
7.6 |
% |
|
Other property
income |
321 |
|
|
477 |
|
|
(156 |
) |
|
(32.7 |
)% |
|
1,273 |
|
|
1,253 |
|
|
20 |
|
|
1.6 |
% |
Total
Revenues |
48,795 |
|
|
46,794 |
|
|
2,001 |
|
|
4.3 |
% |
|
172,506 |
|
|
164,535 |
|
|
7,971 |
|
|
4.8 |
% |
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses |
$ |
7,612 |
|
|
$ |
7,384 |
|
|
$ |
228 |
|
|
3.1 |
% |
|
$ |
26,983 |
|
|
$ |
25,833 |
|
|
$ |
1,150 |
|
|
4.5 |
% |
|
Bad debt expense |
138 |
|
|
227 |
|
|
(89 |
) |
|
(39.2 |
)% |
|
972 |
|
|
1,128 |
|
|
(156 |
) |
|
(13.8 |
)% |
|
Property taxes |
5,282 |
|
|
5,293 |
|
|
(11 |
) |
|
(0.2 |
)% |
|
18,893 |
|
|
18,264 |
|
|
629 |
|
|
3.4 |
% |
Total
Operating Expenses |
13,032 |
|
|
12,904 |
|
|
128 |
|
|
1.0 |
% |
|
46,848 |
|
|
45,225 |
|
|
1,623 |
|
|
3.6 |
% |
Same-Center
Cash Net Operating Income |
$ |
35,763 |
|
|
$ |
33,890 |
|
|
$ |
1,873 |
|
|
5.5 |
% |
|
$ |
125,658 |
|
|
$ |
119,310 |
|
|
$ |
6,348 |
|
|
5.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SAME-CENTER CASH NET OPERATING INCOME
RECONCILIATION |
(Unaudited) |
(In thousands) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Same-center cash
NOI |
$ |
35,763 |
|
|
$ |
33,890 |
|
|
$ |
125,658 |
|
|
$ |
119,310 |
|
Adjustments |
|
|
|
|
|
|
|
Depreciation and
amortization |
(22,503 |
) |
|
(18,390 |
) |
|
(88,359 |
) |
|
(70,957 |
) |
General and
administrative expenses |
(3,065 |
) |
|
(3,263 |
) |
|
(13,120 |
) |
|
(12,650 |
) |
Acquisition transaction
costs |
(211 |
) |
|
(458 |
) |
|
(824 |
) |
|
(965 |
) |
Other expense |
(95 |
) |
|
(120 |
) |
|
(456 |
) |
|
(627 |
) |
Property revenues and
expenses (1) |
4,117 |
|
|
3,530 |
|
|
18,775 |
|
|
16,223 |
|
Non same-center cash
NOI |
7,994 |
|
|
1,115 |
|
|
35,497 |
|
|
9,001 |
|
GAAP operating
income |
$ |
22,000 |
|
|
$ |
16,304 |
|
|
$ |
77,171 |
|
|
$ |
59,335 |
|
|
|
|
|
|
|
|
|
_____________________________ |
(1)
Includes straight-line rents, amortization of above and
below-market lease intangibles, anchor lease termination fees, net
of contractual amounts, and expense and recovery adjustments
related to prior periods. |
NON-GAAP DISCLOSURES
Funds from operations (“FFO”), is a widely
recognized non-GAAP financial measure for REITs that the Company
believes when considered with financial statements presented in
accordance with GAAP, provides additional and useful means to
assess its financial performance. FFO is frequently used by
securities analysts, investors and other interested parties to
evaluate the performance of REITs, most of which present FFO along
with net income as calculated in accordance with GAAP. The
Company computes FFO in accordance with the “White Paper” on FFO
published by the National Association of Real Estate Investment
Trusts (“NAREIT”), which defines FFO as net income attributable to
common stockholders (determined in accordance with GAAP) excluding
gains or losses from debt restructuring, sales of depreciable
property and impairments, plus real estate related depreciation and
amortization, and after adjustments for partnerships and
unconsolidated joint ventures.
The Company uses cash net operating income
(“NOI”) internally to evaluate and compare the operating
performance of the Company’s properties. The Company believes
cash NOI provides useful information to investors regarding the
Company’s financial condition and results of operations because it
reflects only those income and expense items that are incurred at
the property level, and when compared across periods, can be used
to determine trends in earnings of the Company’s properties as this
measure is not affected by the non-cash revenue and expense
recognition items, the cost of the Company’s funding, the impact of
depreciation and amortization expenses, gains or losses from the
acquisition and sale of operating real estate assets, general and
administrative expenses or other gains and losses that relate to
the Company’s ownership of properties. The Company believes
the exclusion of these items from operating income is useful
because the resulting measure captures the actual revenue generated
and actual expenses incurred in operating the Company’s properties
as well as trends in occupancy rates, rental rates and operating
costs. Cash NOI is a measure of the operating performance of
the Company’s properties but does not measure the Company’s
performance as a whole and is therefore not a substitute for net
income or operating income as computed in accordance with
GAAP. The Company defines cash NOI as operating revenues
(base rent and recoveries from tenants), less property and related
expenses (property operating expenses and property taxes), adjusted
for non-cash revenue and operating expense items such as
straight-line rent and amortization of lease intangibles,
debt-related expenses and other adjustments. Cash NOI also excludes
general and administrative expenses, depreciation and amortization,
acquisition transaction costs, other expense, interest expense,
gains and losses from property acquisitions and dispositions,
extraordinary items, tenant improvements and leasing
commissions. Other REITs may use different methodologies for
calculating cash NOI, and accordingly, the Company’s cash NOI may
not be comparable to other REITs.
Contact:
Ashley Rubino, Investor Relations
858-255-4913
arubino@roireit.net
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