EXHIBIT 99.2
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Maryland
(State or other jurisdiction of incorporation)
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001-33749
(Commission
File Number)
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26-0500600
(I.R.S. Employer
Identification No.)
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Delaware
(State or other jurisdiction of incorporation)
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333-189057-01
(Commission File Number)
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94-2969738
(LR.S. Employer Identification No.)
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8905 Towne Centre Drive, Suite 108 San Diego, California
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92122
(Zip Code)
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(858) 677-0900
(Registrants' Telephone Number, Including Area Code)
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Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit No.
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Description
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99.1
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Earnings Release, dated February 24, 2015
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99.2
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Supplemental Information for the quarter ended December 31, 2014
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RETAIL OPPORTUNITY INVESTMENTS CORP.
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Dated: February 24, 2015
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By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
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RETAIL OPPORTUNITY INVESTMENTS
PARTNERSHIP, LP
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By: RETAIL OPPORTUNITY INVESTMENTS GP, LLC, its general partner
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By: /s/ Michael B. Haines
Name: Michael B. Haines
Title: Chief Financial Officer
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EXHIBIT 99.1
Company Increases Dividend 6.3% & Establishes 2015 FFO Guidance
$99.2MM of Shopping Center Acquisitions Year-to-Date in 2015
SAN DIEGO, Feb. 24, 2015 (GLOBE NEWSWIRE) -- Retail Opportunity Investments Corp. (Nasdaq:ROIC) announced today financial and operating results for the fourth quarter and year ended December 31, 2014.
4TH QUARTER 2014 HIGHLIGHTS
YEAR 2014 HIGHLIGHTS
_________________________
(1) A reconciliation of GAAP net income to FFO is provided at the end of this press release.
Stuart A. Tanz, President and Chief Executive Officer of Retail Opportunity Investments Corp. stated, "Capitalizing on the strong fundamentals across our portfolio and markets, we posted another exceptional year, in which we met or exceeded our 2014 objectives in each key aspect of our business. We acquired $414 million of shopping centers, encompassing 1.6 million square feet, expanding our portfolio by 27% and strategically enhancing our presence in each of our core West Coast metropolitan markets. For the fifth consecutive year, we increased occupancy, ending 2014 at a new record high for the company of 97.6%. Additionally, during 2014 we continued to further our financial strength and flexibility. We raised $580 million of new capital through a balance of sources, retired $220 million of short-term debt, and for the fourth year in a row, enhanced the terms of our unsecured credit facility, lowering the borrowing cost, expanding the capacity and extending the maturity." Tanz also added, "Building on our strong finish to 2014, we are already in full swing in 2015 and anticipate another strong, productive year of continuing to expand our portfolio and platform on the West Coast and delivering solid results."
FINANCIAL SUMMARY
For the three months ended December 31, 2014, net income was $4.8 million, or $0.05 per diluted share. FFO for the fourth quarter 2014 was $20.2 million, or $0.21 per diluted share. For the twelve months ended December 31, 2014, net income attributable to common stockholders was $21.0 million, or $0.24 per diluted share. FFO for the year 2014 was $74.6 million, or $0.85 per diluted share. ROIC reports FFO as a supplemental performance measure. A reconciliation of GAAP net income to FFO is provided at the end of this press release.
In December 2014, ROIC issued, through its operating partnership, $250 million of senior unsecured notes. The notes bear interest at 4.0% and mature in December 2024. Additionally, in December 2014, ROIC retired its $200 million unsecured term loan and amended its unsecured revolving credit facility, modifying certain key terms, including: (1) increasing the borrowing capacity from $350 million to $500 million; (2) increasing the accordion feature, enabling the company to expand the borrowing capacity of the facility to $1 billion, subject to commitments and other conditions; (3) extending the maturity date to January 2019; and (4) lowering the interest rate spread to 100 basis points over LIBOR.
At December 31, 2014, ROIC had a total market capitalization of approximately $2.4 billion with $743.4 million of debt outstanding, equating to a 31.6% debt-to-total market capitalization ratio. ROIC's debt outstanding was comprised of $94.2 million of mortgage debt and $649.2 million of unsecured debt, including $156.5 million outstanding on its unsecured credit facility. For the fourth quarter 2014, ROIC's interest coverage was 4.0 times.
2014 ACQUISITION ACTIVITY
During 2014, ROIC acquired eight shopping centers for a total of $414.1 million, including the following three grocery-anchored shopping centers acquired during the fourth quarter 2014, totaling $91.4 million.
Moorpark Town Center
In December 2014, ROIC acquired Moorpark Town Center for $27.3 million. The shopping center is approximately 134,000 square feet and is anchored by Kroger (Ralph's) Supermarket and CVS Pharmacy. The property is located in Moorpark, California, within the Los Angeles metropolitan area and is currently 88.2% leased.
Mission Foothill Marketplace
In December 2014, ROIC acquired Mission Foothill Marketplace for $29.0 million. The shopping center is approximately 111,000 square feet and is anchored by Haggen Supermarket and CVS Pharmacy. The property is located in Mission Viejo, California, in the heart of Orange County and is currently 92.9% leased.
Wilsonville Town Center
In December 2014, ROIC acquired Wilsonville Town Center for $35.1 million. The shopping center is approximately 168,000 square feet and is anchored by Thriftway Supermarket and Rite Aid Pharmacy. The property is located in Wilsonville, Oregon, within the Portland metropolitan area and is currently 94.1% leased. ROIC funded the acquisition in part with the issuance of approximately $15.7 million in ROIC common equity in the form of operating partnership units.
2015 ACQUISITION ACTIVITY
Year-to-date in 2015, ROIC has acquired the following three grocery-anchored shopping centers, totaling $99.2 million.
Ontario Plaza
In January 2015, ROIC acquired Ontario Plaza for $31.0 million. The shopping center is approximately 150,000 square feet and is anchored by El Super Supermarket, a Southern California-based grocer, and Rite Aid Pharmacy. The property is located in Ontario, California, within the Los Angeles metropolitan area, and is currently 94.3% leased.
Park Oaks Shopping Center
In January 2015, ROIC acquired Park Oaks Shopping Center for $47.7 million. The shopping center is approximately 110,000 square feet and is anchored by Safeway (Von's) Supermarket. The property is located in Thousand Oaks, California, within the Los Angeles metropolitan area and is currently 96.3% leased.
Winston Manor
In January 2015, ROIC acquired Winston Manor for $20.5 million. The shopping center is approximately 50,000 square feet and is anchored by Grocery Outlet Supermarket, a Northern California-based grocer. The property is located in South San Francisco, California and is currently 100% leased.
LEASING SUMMARY
During the fourth quarter 2014, ROIC executed 66 leases, totaling 258,515 square feet, achieving a 17.9% increase in same space comparative base rent, on a cash basis, including 41 new leases, totaling 100,996 square feet, achieving a 16.7% increase in same-space comparative base rent, on a cash basis, and 25 renewed leases, totaling 157,519 square feet, achieving an 18.5% increase in base rent, on a cash basis. For the full year 2014, ROIC executed 266 leases, totaling 865,304 square feet, achieving an 11.2% increase in same-space comparative base rent, on a cash basis, including 139 new leases, totaling 441,888 square feet, achieving a 15.3% increase in same-space comparative base rent, on a cash basis, and 127 renewed leases, totaling 423,416 square feet, achieving a 9.0% increase in base rent, on a cash basis.
CASH DIVIDEND
On December 29, 2014, ROIC distributed a $0.16 per share cash dividend. During 2014, ROIC distributed quarterly cash dividends totaling $0.64 per share for the year, representing a 6.7% increase as compared to dividends paid during 2013.
On February 24, 2015, ROIC's board of directors declared a cash dividend of $0.17 per share, payable on March 30, 2015 to stockholders of record on March 16, 2015. The $0.17 per share dividend represents a 6.3% increase as compared to ROIC's previous dividend.
2015 FFO GUIDANCE
ROIC is establishing FFO guidance for 2015 to be within the range of $0.88 to $0.93 per diluted share, and net income to be within the range of $0.24 to $0.25 per diluted share. The following table provides a reconciliation of GAAP net income to FFO.
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For the year ending December 31, 2015 |
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| Low End | High End | |
| Net Income for period | $24,553 | $25,948 |
| Plus: | ||
| Depreciation & Amortization | $66,703 | $70,493 |
| Funds From Operations (FFO) | $91,256 | $96,441 |
| Weighted Average Diluted Shares | 103,700 | 103,700 |
| Earnings per share (diluted) | $0.24 | $0.25 |
| FFO per share (diluted) | $0.88 | $0.93 |
ROIC's estimates are based on numerous underlying assumptions. ROIC's management will discuss the company's guidance and underlying assumptions on its February 25, 2015 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 quarterly results on Wednesday, February 25, 2015 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: 38914118. 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 25, 2015 and will be available until 11:59 p.m. Eastern Time on March 4, 2015. To access the conference call recording, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and use the Conference ID: 38914118. 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), a member of the S&P SmallCap 600 Index, is a fully integrated, self-managed real estate investment trust. ROIC specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers, anchored by national or regional supermarkets and drugstores. As of December 31, 2014, ROIC owned 61 shopping centers encompassing approximately 7.3 million square feet. 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 | ||
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December 31, 2014 |
December 31, 2013 |
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| ASSETS | ||
| Real Estate Investments: | ||
| Land | $ 550,078,150 | $ 458,252,028 |
| Building and improvements | 1,235,820,156 | 914,181,620 |
| 1,785,898,306 | 1,372,433,648 | |
| Less: accumulated depreciation | 88,173,334 | 57,499,980 |
| Real Estate Investments, net | 1,697,724,972 | 1,314,933,668 |
| Cash and cash equivalents | 10,773,406 | 7,919,697 |
| Restricted cash | 513,918 | 1,298,666 |
| Tenant and other receivables, net | 23,024,678 | 20,389,068 |
| Deposits | 4,500,100 | 775,000 |
| Acquired lease intangible assets, net of accumulated amortization | 71,432,664 | 55,887,471 |
| Prepaid expenses | 2,454,341 | 1,371,296 |
| Deferred charges, net of accumulated amortization | 39,730,973 | 33,121,980 |
| Other | 1,541,333 | 3,392,997 |
| Total assets | $ 1,851,696,385 | $ 1,439,089,843 |
| LIABILITIES AND EQUITY | ||
| Liabilities: | ||
| Term loan | $ — | $ 200,000,000 |
| Credit facility | 156,500,000 | 56,950,000 |
| Senior Notes Due 2023 | 246,173,927 | 245,845,320 |
| Senior Notes Due 2024 | 246,521,114 | — |
| Mortgage notes payable | 94,183,258 | 118,903,258 |
| Acquired lease intangible liabilities, net of accumulated amortization | 118,358,661 | 85,283,882 |
| Accounts payable and accrued expenses | 12,173,382 | 11,923,998 |
| Tenants' security deposits | 3,960,699 | 3,422,910 |
| Other liabilities | 11,043,126 | 11,350,409 |
| Total liabilities | 888,914,167 | 733,679,777 |
| — | — | |
| Commitments and contingencies | ||
| 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 92,991,333 and 72,445,767 shares issued and outstanding at December 31, 2014 and 2013, respectively | 9,293 | 7,238 |
| Additional paid-in-capital | 1,013,561,443 | 732,701,858 |
| Dividends in excess of earnings | (80,975,650) | (47,616,570) |
| Accumulated other comprehensive loss | (8,882,417) | (8,969,137) |
| Total Retail Opportunity Investments Corp. stockholders' equity | 923,712,669 | 676,123,389 |
| Non-controlling interests | 39,069,549 | 29,286,677 |
| Total equity | 962,782,218 | 705,410,066 |
| Total liabilities and equity | $ 1,851,696,385 | $ 1,439,089,843 |
| RETAIL OPPORTUNITY INVESTMENTS CORP. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues | ||||
| Base rents | $ 32,611,875 | $ 25,996,921 | $ 119,841,623 | $ 86,194,511 |
| Recoveries from tenants | 8,807,822 | 6,948,029 | 32,945,321 | 22,497,745 |
| Mortgage interest income | — | — | — | 623,793 |
| Other income | 322,973 | 691,535 | 3,076,567 | 1,915,982 |
| Total revenues | 41,742,670 | 33,636,485 | 155,863,511 | 111,232,031 |
| Operating expenses | ||||
| Property operating | 6,973,941 | 6,545,656 | 25,035,765 | 19,749,972 |
| Property taxes | 4,387,678 | 3,353,515 | 15,953,210 | 11,246,967 |
| Depreciation and amortization | 15,448,833 | 12,584,738 | 58,434,981 | 40,397,895 |
| General and administrative expenses | 2,875,335 | 2,080,566 | 11,199,632 | 10,058,669 |
| Acquisition transaction costs | 307,486 | 118,929 | 961,167 | 1,688,521 |
| Other expenses | 99,289 | 116,942 | 504,828 | 314,833 |
| Total operating expenses | 30,092,562 | 24,800,346 | 112,089,583 | 83,456,857 |
| Operating income | 11,650,108 | 8,836,139 | 43,773,928 | 27,775,174 |
| Non-operating income (expenses) | ||||
| Interest expense and other finance expenses | (6,898,587) | (4,880,875) | (27,593,259) | (15,854,978) |
| Gain on consolidation of joint venture | — | — | — | 20,381,849 |
| Equity in earnings from unconsolidated joint ventures | — | — | — | 2,389,937 |
| Gain on sale of real estate | — | — | 4,868,553 | — |
| Income from continuing operations | 4,751,521 | 3,955,264 | 21,049,222 | 34,691,982 |
| Loss from discontinued operations | — | — | — | (713,529) |
| Net income | 4,751,521 | 3,955,264 | 21,049,222 | 33,978,453 |
| Net income attributable to non-controlling interest | (164,758) | (164,892) | (748,177) | (164,892) |
| Net Income Attributable to Retail Opportunity Investments Corp. | $ 4,586,763 | $ 3,790,372 | $ 20,301,045 | $ 33,813,561 |
| Net income per share - basic: | ||||
| Income from continuing operations | $ 0.05 | $ 0.05 | $ 0.24 | $ 0.51 |
| Loss from discontinued operations | — | — | — | (0.01) |
| Net income per share | $ 0.05 | $ 0.05 | $ 0.24 | $ 0.50 |
| Net income per share - diluted: | ||||
| Income from continuing operations | $ 0.05 | $ 0.05 | $ 0.24 | $ 0.49 |
| Loss from discontinued operations | — | — | — | (0.01) |
| Net income per share | $ 0.05 | $ 0.05 | $ 0.24 | $ 0.48 |
| Dividends per common share | $ 0.16 | $ 0.15 | $ 0.64 | $ 0.60 |
| CALCULATION OF FUNDS FROM OPERATIONS | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net income attributable to ROIC | $ 4,586,763 | $ 3,790,372 | $ 20,301,045 | $ 33,813,561 |
| Plus: Depreciation and amortization | 15,448,833 | 12,584,738 | 58,434,981 | 40,397,895 |
| Depreciation and amortization attributable to unconsolidated joint ventures | — | — | — | 1,059,761 |
| Gain on sale of real estate | — | — | (4,868,553) | — |
| Loss from discontinued operations | — | — | — | 713,529 |
| Funds from operations - basic | 20,035,596 | 16,375,110 | 73,867,473 | 75,984,746 |
| Net income attributable to non-controlling interests | 164,758 | 164,892 | 748,177 | 165,892 |
| Funds from operations - diluted | $ 20,200,354 | $ 16,540,002 | $ 74,615,650 | $ 76,150,638 |
CONTACT: Ashley Bulot, Investor Relations
858-255-4913
abulot@roireit.net
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