SAN DIEGO, Feb. 19, 2019 (GLOBE NEWSWIRE) -- Retail Opportunity Investments Corp. (NASDAQ:ROIC) announced today
financial and operating results for the twelve and three months ended December 31, 2018.
YEAR 2018 HIGHLIGHTS
- $42.7mm of net income attributable to common stockholders ($0.38 per diluted share)
- $142.1mm in Funds From Operations(1) ($1.14 per diluted
share)
- 97.7% portfolio lease rate at year-end 2018 (5th consecutive year above 97%)
- 1.5 million square feet of leases executed (new and renewed)
- 21.7% increase in same-space cash rents on new leases (9.1% increase on renewals)
- 2.5% increase in same-center cash net operating income (2018 vs. 2017)
- $43.6 million of shopping center acquisitions
- $28.0 million of property dispositions
- $25.4 million of common equity raised through ATM program
- 89.5% of total debt effectively fixed-rate at year-end
- 94.7% of portfolio’s gross leasable area unencumbered at year-end
- 4.0% increase in total cash dividends paid (2018 vs. 2017)
4TH QUARTER 2018 HIGHLIGHTS
- $10.5mm of net income attributable to common stockholders ($0.09 per diluted share)
- $36.5 million in Funds From Operations(1) ($0.29 per diluted
share)
- 2.5% increase in same-center cash net operating income (4Q’18 vs. 4Q’17)
- 26.8% increase in same-space cash rents on new leases (12.0% increase on renewals)
- $0.1950 quarterly cash dividend paid in 4Q’18
- $0.1970 quarterly cash dividend declared in 1Q’19
_______________________________________
(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, “During
2018, we again achieved strong, record-setting results with property operations. We leased a record 1.5 million square feet during
the year, more than double the amount of space originally scheduled to expire. For the fifth consecutive year we achieved a
portfolio lease rate above 97%, ending 2018 at a new record high year-end rate of 97.7%. Additionally, for the seventh
consecutive year, we achieved same-center NOI growth, along with again achieving strong, double-digit growth in our releasing
spreads, specifically a 21.7% increase on new leases.” Tanz also commented, “During 2018, we embarked on several key
initiatives aimed at enhancing the long-term intrinsic value and competitive strength of the company’s portfolio, most notably
focusing on disposing non-core properties and identifying densification opportunities. Additionally, in terms of balance sheet
initiatives, during 2018 we raised equity, reduced secured debt and enhanced our debt maturity schedule.”
FINANCIAL SUMMARY
For the twelve months ended December 31, 2018, GAAP net income attributable to common stockholders was $42.7
million, or $0.38 per diluted share, as compared to GAAP net income of $38.5 million, or $0.35 per diluted share for the twelve
months ended December 31, 2017. For the three months ended December 31, 2018, GAAP net income attributable to common
stockholders was $10.5 million, or $0.09 per diluted share, as compared to GAAP net income of $10.8 million, or $0.10 per diluted
share for the three months ended December 31, 2017.
FFO for the full year 2018 was $142.1 million, or $1.14 per diluted share, as compared to $138.9 million in FFO,
or $1.14 per diluted share, for the full year 2017. FFO for the fourth quarter of 2018 was $36.5 million, or $0.29 per
diluted share, as compared to $37.0 million in FFO, or $0.30 per diluted share for the fourth quarter of 2017. 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, 2018, ROIC had a total market capitalization of approximately $3.5 billion, including
approximately $1.5 billion of principal debt outstanding and an equity market capitalization of approximately $2.0 billion.
ROIC’s principal debt outstanding was comprised of $86.7 million of mortgage debt and approximately $1.4 billion of unsecured debt,
including $156.0 million outstanding on its unsecured revolving credit facility at December 31, 2018. During 2018, ROIC
retired two mortgage loans, totaling $18.9 million. Additionally, during the fourth quarter ROIC entered into additional
interest rate swap agreements regarding its $300 million floating-rate unsecured term loan. Taking into account the new swap
agreements, together with the existing agreements, the interest rate on the term loan is fixed through it’s maturity in 2022 at a
blended annual rate of 3.1%. For the fourth quarter of 2018, ROIC’s interest coverage was 3.4 times and 94.7% of its
portfolio was unencumbered (based on gross leasable area) at year-end 2018. Additionally, at December 31, 2018, 89.5% of
ROIC’s total debt was effectively fixed-rate with a remaining weighted average maturity of 6.7 years. ROIC currently has no
scheduled debt maturities in 2019 or 2020.
ACQUISITION & DISPOSITION SUMMARY
During 2018, ROIC completed a total of $43.6 million of acquisitions, including two grocery-anchored shopping
centers totaling $34.6 million, one freestanding pad for $4.0 million at an existing ROIC grocery-anchored shopping center, and one
redevelopment site for $5.0 million adjacent to an existing ROIC grocery-anchored shopping center. Additionally, during 2018
ROIC sold one property for $28.0 million.
2019 DISPOSITION ACTIVITY
In February 2019, ROIC sold Vancouver Market Center for $17.0 million. Additionally, ROIC currently has a contract to sell a
property for approximately $13.5 million.
PROPERTY OPERATIONS SUMMARY
At December 31, 2018, ROIC’s portfolio was 97.7% leased. For the full year 2018, same-center net operating
income (NOI) was $172.5 million, as compared to $168.3 million in same-center NOI for the full year 2017, representing a 2.5%
increase. For the fourth quarter of 2018, same-center NOI was $47.4 million, as compared to $46.2 million in same-center NOI
for the fourth quarter of 2017, representing a 2.5% increase. 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 2018, ROIC executed 406 leases, totaling approximately 1.5 million square feet, including 156
new leases, totaling approximately 440,939 square feet, achieving a 21.7% increase in same-space comparative base rent, and 250
renewed leases, totaling approximately 1.1 million square feet, achieving a 9.1% increase in base rent. During the fourth
quarter of 2018, ROIC executed 109 leases, totaling 402,008 square feet, including 40 new leases, totaling 117,649 square feet,
achieving a 26.8% increase in same-space comparative base rent, and 69 renewed leases, totaling 284,359 square feet, achieving a
12.0% increase in base rent. ROIC reports same-space comparative base rent on a cash basis.
CAPITAL MARKETS SUMMARY
During 2018, ROIC issued approximately 1.3 million shares of common stock through its ATM program, raising
approximately $25.4 million in net proceeds. During the fourth quarter of 2018, ROIC did not issue any shares of common stock.
CASH DIVIDEND
On December 28, 2018, ROIC distributed a $0.1950 per share cash dividend. For the year 2018, ROIC
distributed cash dividends totaling $0.78 per share, representing a 4.0% increase over dividends paid during 2017. On
February 19, 2019, ROIC’s board of directors declared a cash dividend of $0.1970 per share, payable on March 28, 2019 to
stockholders of record on March 14, 2019.
2019 FFO GUIDANCE
ROIC currently estimates that FFO for the full year 2019 to be within the range of $1.11 to $1.15 per diluted
share, and net income to be within the range of $0.40 to $0.44 per diluted share. The following table provides a
reconciliation of GAAP net income to FFO (in thousands, except per share data and percentages).
|
Year Ended December 31, 2019 (1) |
|
Low End |
|
High End |
GAAP net income applicable to stockholders |
$ |
45,886 |
|
|
$ |
50,926 |
|
Plus: Depreciation and amortization |
100,838 |
|
|
102,653 |
|
Less: Gain on sale of real estate |
(12,000 |
) |
|
(14,000 |
) |
Funds from operations (FFO) – basic |
134,724 |
|
|
139,579 |
|
Net income attributable to non-controlling interests |
4,581 |
|
|
4,746 |
|
Funds from operations (FFO) – diluted |
$ |
139,305 |
|
|
$ |
144,325 |
|
|
|
|
|
Diluted Shares |
125,500 |
|
|
125,500 |
|
|
|
|
|
Earnings per share (diluted) |
$ |
0.40 |
|
|
$ |
0.44 |
|
FFO per share (diluted) |
$ |
1.11 |
|
|
$ |
1.15 |
|
|
|
|
|
Key Assumptions |
|
|
|
Acquisitions |
$ |
— |
|
|
$ |
50,000 |
|
Dispositions |
$ |
50,000 |
|
|
$ |
50,000 |
|
Debt retired |
$ |
50,000 |
|
|
$ |
— |
|
|
|
|
|
Same-center cash NOI growth (vs 2018) |
2 |
% |
|
3 |
% |
_______________________________________
(1) Included in ROIC’s 2019 FFO Guidance is $0.02 to
$0.03 per diluted share of projected expenses attributable to: i) additional interest expense in connection with swap agreements
entered into in December 2018 locking in the interest rate on the company’s $300 million unsecured term loan through its maturity
in 2022; and ii) additional general and administrative expenses as a result of the FASB accounting rule change requiring certain
costs associated with leasing activities to be expensed rather than capitalized starting in January 2019.
ROIC’s management will discuss the company’s guidance and underlying assumptions on its February 20, 2019
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 Wednesday, February 20, 2019 at
9:00a.m. Eastern Time / 6:00 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: 8872579. 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 12:00 p.m. Eastern Time on February 20, 2019 and will be available until 12:00 a.m. Eastern
Time on February 27, 2019. To access the conference call recording, dial (855) 859-2056 (domestic) or (404) 537-3406
(international) and use the Conference ID: 8872579. 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, 2018, ROIC owned 91 shopping
centers encompassing approximately 10.5 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 with 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, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Real Estate Investments: |
|
|
|
Land |
$ |
894,240 |
|
|
$ |
878,797 |
|
Building and improvements |
2,266,232 |
|
|
2,230,600 |
|
|
3,160,472 |
|
|
3,109,397 |
|
Less: accumulated depreciation |
329,207 |
|
|
260,115 |
|
Real Estate Investments, net |
2,831,265 |
|
|
2,849,282 |
|
Cash and cash equivalents |
6,076 |
|
|
11,553 |
|
Restricted cash |
1,373 |
|
|
5,412 |
|
Tenant and other receivables, net |
46,832 |
|
|
43,257 |
|
Deposits |
— |
|
|
500 |
|
Acquired lease intangible assets, net |
72,109 |
|
|
82,778 |
|
Prepaid expenses |
4,194 |
|
|
2,853 |
|
Deferred charges, net |
33,857 |
|
|
37,167 |
|
Other |
7,365 |
|
|
6,396 |
|
Total assets |
$ |
3,003,071 |
|
|
$ |
3,039,198 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Liabilities: |
|
|
|
Term loan |
$ |
299,076 |
|
|
$ |
298,816 |
|
Credit facility |
153,689 |
|
|
140,329 |
|
Senior Notes |
941,449 |
|
|
940,086 |
|
Mortgage notes payable |
88,511 |
|
|
107,915 |
|
Acquired lease intangible liabilities, net |
166,146 |
|
|
178,984 |
|
Accounts payable and accrued expenses |
15,488 |
|
|
18,638 |
|
Tenants’ security deposits |
7,065 |
|
|
6,771 |
|
Other liabilities |
23,219 |
|
|
18,018 |
|
Total liabilities |
1,694,643 |
|
|
1,709,557 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity: |
|
|
|
Preferred stock, $0.0001 par value 50,000,000 shares authorized; none issued and outstanding |
— |
|
|
— |
|
Common stock, $0.0001 par value, 500,000,000 shares authorized; 113,992,837 and 112,347,451 shares issued and
outstanding at December 31, 2018 and December 31, 2017, respectively |
11 |
|
|
11 |
|
Additional paid-in capital |
1,441,080 |
|
|
1,412,590 |
|
Dividends in excess of earnings |
(256,438 |
) |
|
(210,490 |
) |
Accumulated other comprehensive income |
3,561 |
|
|
1,856 |
|
Total Retail Opportunity Investments Corp. stockholders’ equity |
1,188,214 |
|
|
1,203,967 |
|
Non-controlling interests |
120,214 |
|
|
125,674 |
|
Total equity |
1,308,428 |
|
|
1,329,641 |
|
Total liabilities and equity |
$ |
3,003,071 |
|
|
$ |
3,039,198 |
|
|
|
|
|
RETAIL OPPORTUNITY INVESTMENTS CORP.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
Base rents |
$ |
56,797 |
|
|
$ |
55,686 |
|
|
$ |
223,797 |
|
|
$ |
210,564 |
|
Recoveries from tenants |
16,717 |
|
|
15,718 |
|
|
65,804 |
|
|
58,818 |
|
Other income |
1,644 |
|
|
1,350 |
|
|
6,197 |
|
|
3,878 |
|
Total revenues |
75,158 |
|
|
72,754 |
|
|
295,798 |
|
|
273,260 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Property operating |
11,206 |
|
|
10,521 |
|
|
43,851 |
|
|
39,151 |
|
Property taxes |
8,361 |
|
|
7,862 |
|
|
32,349 |
|
|
29,663 |
|
Depreciation and amortization |
24,955 |
|
|
24,926 |
|
|
100,838 |
|
|
96,256 |
|
General and administrative expenses |
3,627 |
|
|
3,312 |
|
|
14,918 |
|
|
14,103 |
|
Acquisition transaction costs |
— |
|
|
— |
|
|
— |
|
|
4 |
|
Other expense |
89 |
|
|
103 |
|
|
478 |
|
|
418 |
|
Total operating expenses |
48,238 |
|
|
46,724 |
|
|
192,434 |
|
|
179,595 |
|
|
|
|
|
|
|
|
|
Gain on sale of real estate |
— |
|
|
— |
|
|
5,890 |
|
|
— |
|
|
|
|
|
|
|
|
|
Operating income |
26,920 |
|
|
26,030 |
|
|
109,254 |
|
|
93,665 |
|
Non-operating expenses |
|
|
|
|
|
|
|
Interest expense and other finance expenses |
(15,352 |
) |
|
(13,917 |
) |
|
(62,113 |
) |
|
(50,977 |
) |
Net income |
11,568 |
|
|
12,113 |
|
|
47,141 |
|
|
42,688 |
|
Net income attributable to non-controlling interests |
(1,067 |
) |
|
(1,264 |
) |
|
(4,405 |
) |
|
(4,211 |
) |
Net Income Attributable to Retail Opportunity Investments Corp. |
$ |
10,501 |
|
|
$ |
10,849 |
|
|
$ |
42,736 |
|
|
$ |
38,477 |
|
|
|
|
|
|
|
|
|
Earnings per share – basic and diluted |
$ |
0.09 |
|
|
$ |
0.10 |
|
|
$ |
0.38 |
|
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
Dividends per common share |
$ |
0.1950 |
|
|
$ |
0.1875 |
|
|
$ |
0.7800 |
|
|
$ |
0.7500 |
|
|
|
|
|
|
|
|
|
CALCULATION OF FUNDS FROM OPERATIONS
(Unaudited)
(In thousands) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income attributable to ROIC |
$ |
10,501 |
|
|
$ |
10,849 |
|
|
$ |
42,736 |
|
|
$ |
38,477 |
|
Plus: Depreciation and amortization |
24,955 |
|
|
24,926 |
|
|
100,838 |
|
|
96,256 |
|
Less: Gain on sale of real estate |
— |
|
|
— |
|
|
(5,890 |
) |
|
— |
|
Funds from operations – basic |
35,456 |
|
|
35,775 |
|
|
137,684 |
|
|
134,733 |
|
Net income attributable to non-controlling interests |
1,067 |
|
|
1,264 |
|
|
4,405 |
|
|
4,211 |
|
Funds from operations – diluted |
$ |
36,523 |
|
|
$ |
37,039 |
|
|
$ |
142,089 |
|
|
$ |
138,944 |
|
|
|
|
|
|
|
|
|
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, |
|
|
2018 |
|
2017 |
|
$
Change |
|
%
Change |
|
2018 |
|
2017 |
|
$
Change |
|
%
Change |
Number of shopping centers included in same-center analysis |
84 |
|
|
84 |
|
|
|
|
|
|
78 |
|
|
78 |
|
|
|
|
|
Same-center occupancy |
97.7 |
% |
|
97.5 |
% |
|
|
|
0.2 |
% |
|
97.6 |
% |
|
97.5 |
% |
|
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base rents |
$ |
48,229 |
|
|
$ |
46,666 |
|
|
$ |
1,563 |
|
|
3.3 |
% |
|
$ |
178,508 |
|
|
$ |
173,340 |
|
|
$ |
5,168 |
|
|
3.0 |
% |
|
Percentage rent |
1,263 |
|
|
1,117 |
|
|
146 |
|
|
13.1 |
% |
|
1,402 |
|
|
1,428 |
|
|
(26 |
) |
|
(1.8 |
)% |
|
Recoveries from tenants |
15,797 |
|
|
14,953 |
|
|
844 |
|
|
5.6 |
% |
|
57,579 |
|
|
54,963 |
|
|
2,616 |
|
|
4.8 |
% |
|
Other property income |
543 |
|
|
1,277 |
|
|
(734 |
) |
|
(57.5 |
)% |
|
2,425 |
|
|
3,711 |
|
|
(1,286 |
) |
|
(34.7 |
)% |
Total Revenues |
65,832 |
|
|
64,013 |
|
|
1,819 |
|
|
2.8 |
% |
|
239,914 |
|
|
233,442 |
|
|
6,472 |
|
|
2.8 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
10,616 |
|
|
9,919 |
|
|
697 |
|
|
7.0 |
% |
|
38,832 |
|
|
36,003 |
|
|
2,829 |
|
|
7.9 |
% |
|
Bad debt expense |
152 |
|
|
411 |
|
|
(259 |
) |
|
(63.0 |
)% |
|
863 |
|
|
1,597 |
|
|
(734 |
) |
|
(46.0 |
)% |
|
Property taxes |
7,651 |
|
|
7,436 |
|
|
215 |
|
|
2.9 |
% |
|
27,691 |
|
|
27,530 |
|
|
161 |
|
|
0.6 |
% |
Total Operating Expenses |
18,419 |
|
|
17,766 |
|
|
653 |
|
|
3.7 |
% |
|
67,386 |
|
|
65,130 |
|
|
2,256 |
|
|
3.5 |
% |
Same-Center Cash Net Operating Income |
$ |
47,413 |
|
|
$ |
46,247 |
|
|
$ |
1,166 |
|
|
2.5 |
% |
|
$ |
172,528 |
|
|
$ |
168,312 |
|
|
$ |
4,216 |
|
|
2.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SAME-CENTER CASH NET OPERATING INCOME RECONCILIATION
(Unaudited)
(In thousands) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
GAAP operating income |
$ |
26,920 |
|
|
$ |
26,030 |
|
|
$ |
109,254 |
|
|
$ |
93,665 |
|
Depreciation and amortization |
24,955 |
|
|
24,926 |
|
|
100,838 |
|
|
96,256 |
|
General and administrative expenses |
3,627 |
|
|
3,312 |
|
|
14,918 |
|
|
14,103 |
|
Acquisition transaction costs |
— |
|
|
— |
|
|
— |
|
|
4 |
|
Other expense |
89 |
|
|
103 |
|
|
478 |
|
|
418 |
|
Gain on sale of real estate |
— |
|
|
— |
|
|
(5,890 |
) |
|
— |
|
Property revenues and other expenses (1) |
(4,741 |
) |
|
(5,421 |
) |
|
(18,907 |
) |
|
(22,492 |
) |
Total Company cash NOI |
50,850 |
|
|
48,950 |
|
|
200,691 |
|
|
181,954 |
|
Non same-center cash NOI |
(3,437 |
) |
|
(2,703 |
) |
|
(28,163 |
) |
|
(13,642 |
) |
Same-center cash NOI |
$ |
47,413 |
|
|
$ |
46,247 |
|
|
$ |
172,528 |
|
|
$ |
168,312 |
|
|
|
|
|
|
|
|
|
____________________
(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
![Primary Logo](https://resource.globenewswire.com/media/7e0e4ee1-febf-489a-87ab-bf74d49c73d7/small/retail-opportunity-investments-corp-logo.gif)