Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 06, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GTY | |
Entity Registrant Name | GETTY REALTY CORP /MD/ | |
Entity Central Index Key | 1,052,752 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,421,802 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Real Estate: | ||
Land | $ 477,123 | $ 344,324 |
Buildings and improvements | 306,440 | 246,112 |
Construction in progress | 242 | |
Total real estate held for use, gross | 783,805 | 590,436 |
Less - accumulated depreciation and amortization | (103,839) | (99,510) |
Real estate held for use, net | 679,966 | 490,926 |
Real estate held for sale, net | 1,305 | 4,343 |
Real estate, net | 681,271 | 495,269 |
Net investment in direct financing leases | 94,549 | 95,764 |
Deferred rent receivable (net of allowance of $6,101 as of September 30, 2015 and $7,009 as of December 31, 2014) | 24,427 | 21,049 |
Cash and cash equivalents | 3,756 | 3,111 |
Restricted cash | 409 | 713 |
Notes and mortgages receivable | 48,446 | 34,226 |
Accounts receivable (net of allowance of $4,489 at September 30, 2015 and $4,160 at December 31, 2014) | 4,043 | 4,395 |
Prepaid expenses and other assets | 49,980 | 32,974 |
Total assets | 906,881 | 687,501 |
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||
Borrowings under credit lines | 156,000 | 25,000 |
Term loans | 175,000 | 100,000 |
Mortgage payable, net | 301 | 344 |
Environmental remediation obligations | 91,252 | 91,566 |
Dividends payable | 8,117 | 12,150 |
Accounts payable and accrued liabilities | 73,958 | 51,417 |
Total liabilities | $ 504,628 | $ 280,477 |
Commitments and contingencies (notes 2, 3, 4 and 5) | ||
Shareholders' equity: | ||
Common stock, par value $.01 per share; authorized 50,000,000 shares; issued 33,421,802 at September 30, 2015 and 33,417,203 at December 31, 2014 | $ 334 | $ 334 |
Paid-in capital | 464,026 | 463,314 |
Dividends paid in excess of earnings | (62,107) | (56,624) |
Total shareholders' equity | 402,253 | 407,024 |
Total liabilities and shareholders' equity | $ 906,881 | $ 687,501 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance on deferred rent receivable | $ 6,101 | $ 7,009 |
Allowance on accounts receivable | $ 4,489 | $ 4,160 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 33,421,802 | 33,417,203 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Revenues from rental properties | $ 29,077 | $ 24,078 | $ 78,471 | $ 72,198 |
Interest on notes and mortgages receivable | 910 | 817 | 2,472 | 2,287 |
Total revenues | 29,987 | 24,895 | 80,943 | 74,485 |
Operating expenses: | ||||
Rental property expenses | 6,319 | 5,559 | 18,002 | 17,541 |
Impairment charges | 1,700 | 921 | 10,682 | 1,565 |
Environmental expenses | 1,647 | 1,171 | 5,259 | 3,752 |
General and administrative expenses | 4,244 | 3,732 | 12,867 | 11,984 |
Allowance for uncollectible accounts | 263 | 156 | 684 | 2,259 |
Depreciation and amortization expense | 4,629 | 3,372 | 12,192 | 8,034 |
Total operating expenses | 18,802 | 14,911 | 59,686 | 45,135 |
Operating income | 11,185 | 9,984 | 21,257 | 29,350 |
Gains on dispositions of real estate | 1,696 | 1,389 | 1,437 | 1,389 |
Other income | 121 | 48 | 7,505 | 216 |
Interest expense | (4,479) | (2,416) | (10,214) | (7,430) |
Earnings from continuing operations | 8,523 | 9,005 | 19,985 | 23,525 |
Discontinued operations: | ||||
Loss from operating activities | (1,716) | (1,527) | (2,820) | (4,142) |
Gains on dispositions of real estate | 228 | 2,757 | 352 | 7,127 |
(Loss) earnings from discontinued operations | (1,488) | 1,230 | (2,468) | 2,985 |
Net earnings | $ 7,035 | $ 10,235 | $ 17,517 | $ 26,510 |
Basic and diluted earnings per common share: | ||||
Earnings from continuing operations | $ 0.25 | $ 0.27 | $ 0.59 | $ 0.70 |
(Loss)/earnings from discontinued operations | (0.04) | 0.03 | (0.07) | 0.09 |
Net earnings | $ 0.21 | $ 0.30 | $ 0.52 | $ 0.79 |
Weighted average shares outstanding: | ||||
Basic | 33,422 | 33,417 | 33,420 | 33,406 |
Diluted | 33,422 | 33,417 | 33,420 | 33,406 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 17,517 | $ 26,510 |
Adjustments to reconcile net earnings to net cash flow provided by operating activities: | ||
Depreciation and amortization expense | 12,192 | 8,034 |
Impairment charges | 15,256 | 6,583 |
Gains on dispositions of real estate - discontinued operations | (352) | (7,127) |
Gains on dispositions of real estate - continuing operations | (1,437) | (1,389) |
Deferred rent receivable, net of allowance | (3,378) | (3,712) |
Bad debt expense | 720 | 840 |
Accretion expense | 3,519 | 2,032 |
Other | 1,434 | 1,350 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,028) | (338) |
Prepaid expenses and other assets | (252) | 3,566 |
Environmental remediation obligations | (12,336) | (9,953) |
Accounts payable and accrued liabilities | 3,500 | (3,995) |
Net cash flow provided by operating activities | 34,355 | 22,401 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property acquisitions and capital expenditures | (218,618) | (6,437) |
Proceeds from dispositions of real estate - discontinued operations | 1,375 | 12,705 |
Proceeds from dispositions of real estate - continuing operations | 4,456 | 4,380 |
Change in cash held for property acquisitions | (376) | 12,956 |
Change in restricted cash | 304 | 537 |
Addition to construction in progress | (242) | |
Collection of notes and mortgages receivable | 2,230 | 1,743 |
Amortization of investment in direct financing leases | 1,215 | 1,004 |
Net cash flow (used in) provided by investing activities | (209,656) | 26,888 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under prior credit agreement | 14,000 | 3,000 |
Repayment under prior credit agreement | (39,000) | (34,000) |
Borrowing under new credit agreement | 166,000 | |
Borrowing under term loan | 75,000 | |
Repayments under new credit agreement | (10,000) | |
Credit agreement origination costs | (2,432) | |
Payments of cash dividends | (27,035) | (21,925) |
Other | (587) | (3) |
Net cash flow provided by (used in) financing activities | 175,946 | (52,928) |
Change in cash and cash equivalents | 645 | (3,639) |
Cash and cash equivalents at beginning of period | 3,111 | 12,035 |
Cash and cash equivalents at end of period | 3,756 | 8,396 |
Supplemental disclosures of cash flow information Cash paid during the period for: | ||
Interest paid | 8,628 | 6,686 |
Income taxes | 339 | 370 |
Environmental remediation obligations | 10,568 | 9,366 |
Non-cash transactions: | ||
Issuance of mortgages receivable related to property dispositions | $ 16,450 | 5,851 |
Mortgage payable, net related to property acquisition | $ 390 |
General
General | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | 1. GENERAL Basis of Presentation: Unaudited, Interim Consolidated Financial Statements: Use of Estimates, Judgments and Assumptions: Subsequent Events: New Accounting Pronouncement: In August 2014, the FASB issued guidance ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance requires management to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. This guidance is effective for annual periods ending after December 15, 2016, including interim reporting periods thereafter. The new guidance affects disclosures only and is not expected to have a material impact on our consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued guidance ASU 2015-03, which amends Topic 835, Other Presentation Matters In August 2015, the FASB issued guidance ASU 2015-15: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements (“ASU 2015-15”) providing guidance regarding the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance on this matter, the SEC staff has indicated that it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on that line-of-credit arrangement. We do not expect the adoption of ASU 2015-15 to have a material impact on our consolidated financial statements. In September 2015, the FASB issued guidance ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”) to simplify the accounting for business combinations, specifically as it relates to measurement-period adjustments. ASU 2015-16 requires acquiring entities in a business combination to recognize measurement-period adjustments in the reporting period in which the adjustment amounts are determined. Also, ASU 2015-16 requires entities to present separately on the face of the income statement (or disclose in the notes to the financial statements) the portion of the amount recorded in the current period earnings, by line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective beginning on January 1, 2016 and is to be applied prospectively to measurement-period adjustments that occur after the effective date. We do not expect the adoption of ASU 2015-16 to have a significant impact on our consolidated financial statements. Fair Value Hierarchy: We have mutual fund assets that are measured at fair value on a recurring basis using Level 1 inputs. We have a Supplemental Retirement Plan for executives and other senior management employees. The amounts held in trust under the Supplemental Retirement Plan using Level 2 inputs may be used to satisfy claims of general creditors in the event of our or any of our subsidiaries’ bankruptcy. We have liability to the employees participating in the Supplemental Retirement Plan for the participant account balances equal to the aggregate of the amount invested at the employees’ direction and the income earned in such mutual funds. We have certain real estate assets that are measured at fair value on a non-recurring basis using Level 3 inputs as of September 30, 2015 and December 31, 2014 of $2,496,000 and $9,266,000, respectively, where impairment charges have been recorded. Due to the subjectivity inherent in the internal valuation techniques used in estimating fair value, the amounts realized from the sale of such assets may vary significantly from these estimates. The following summarizes as of September 30, 2015 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 853 $ — $ — $ 853 Liabilities Deferred compensation $ — $ 853 $ — $ 853 The following summarizes as of December 31, 2014 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 785 $ — $ — $ 785 Liabilities Deferred compensation $ — $ 785 $ — $ 785 Fair Value Disclosure of Financial Instruments: Discontinued Operations and Assets Held-for-Sale: For the nine months ended September 30, 2015, we sold 11 properties resulting in a gain of $352,000 that were previously classified as held for sale as of June 30, 2014. In addition, for the nine months ended September 30, 2015, we sold 61 properties resulting in a recognized gain of $498,000 that previously did not meet the criteria to be classified as held for sale. We also sold a leasehold interest and recognized a gain of $998,000, received funds from three partial property condemnations resulting in a loss of $51,000 and recognized a loss on capital lease terminations of $8,000. We determined that the 61 properties sold did not represent a strategic shift in our operations as defined in ASU 2014-08 and, as a result, the gains on dispositions of real estate for the 61 properties were reflected in our earnings from continuing operations. As a result of a change in circumstances that was previously considered unlikely, we reclassified one property from held for sale to held and used as the property no longer met the criteria to be held for sale during the third quarter of 2015. A property that is reclassified to held and used is measured and recorded at the lower of (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used, or (ii) the fair value at the date of the subsequent decision not to sell. Real estate held for sale consisted of the following at September 30, 2015 and December 31, 2014: September 30, December 31, (in thousands) 2015 2014 Land $ 698 $ 2,383 Buildings and improvements 874 3,140 1,572 5,523 Accumulated depreciation and amortization (267 ) (1,180 ) Real estate held for sale, net $ 1,305 $ 4,343 The revenue from rental properties, impairment charges, other operating expenses and gains on dispositions of real estate related to these properties are as follows: Three months ended Nine months ended (in thousands) 2015 2014 2015 2014 Revenues from rental properties $ 5 $ 622 $ 166 $ 2,163 Impairment charges (2,760 ) (1,985 ) (4,574 ) (5,018 ) Other operating income (expenses) 1,039 (164 ) 1,588 (1,287 ) Loss from operating activities (1,716 ) (1,527 ) (2,820 ) (4,142 ) Gains on dispositions of real estate 228 2,757 352 7,127 (Loss) earnings from discontinued operations $ (1,488 ) $ 1,230 $ (2,468 ) $ 2,985 Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of: We recorded non-cash impairment charges aggregating $4,460,000 and $15,256,000 for the three and nine months ended September 30, 2015, respectively, and $2,906,000 and $6,583,000 for the three and nine months ended September 30, 2014, respectively, in continuing operations and in discontinued operations. Our estimated fair values, as it relates to property carrying values, were primarily based upon (i) estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bid and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence (this method was used to determine $8,043,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015), for which we do not have access to the unobservable inputs used to determine these estimated fair values, (ii) discounted cash flow models (this method was used to determine $641,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015) and (iii) the accumulation of asset retirement costs as a result of increases in estimated environmental liabilities which increased the carrying value of certain properties in excess of their fair value (this method was used to determine $6,572,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015). The non-cash impairment charges recorded during the three and nine months ended September 30, 2015 and 2014 were attributable to reductions in estimated undiscounted cash flows expected to be received during the assumed holding period, reductions in our estimates of value for properties held for sale and the accumulation of asset retirement costs as a result of increases in estimated environmental liabilities which increased the carrying value of certain properties in excess of their fair value. The estimated fair value of real estate is based on the price that would be received from the sale of the property in an orderly transaction between market participants at the measurement date. In general, we consider multiple internal valuation techniques when measuring the fair value of a property, all of which are based on unobservable inputs and assumptions that are classified within Level 3 of the Fair Value Hierarchy. These unobservable inputs include assumed holding periods ranging up to 15 years, assumed average rent increases of 2.0% annually, income capitalized at a rate of 8.0% and cash flows discounted at a rate of 7.0%. These assessments have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future rental rates and operating expenses that could differ materially from actual results in future periods. Where properties held for use have been identified as having a potential for sale, additional judgments are required related to the determination as to the appropriate period over which the projected undiscounted cash flows should include the operating cash flows and the amount included as the estimated residual value. This requires significant judgment. In some cases, the results of whether impairment is indicated are sensitive to changes in assumptions input into the estimates, including the holding period until expected sale. Deferred Gain : 360-20, Property, Plant and Equipment, Real Estate Sales Deferred Rent Receivable and Revenue Recognition: recognized under this method and the contractual lease payment terms is recorded as deferred rent receivable on our consolidated balance sheets. We provide reserves for a portion of the recorded deferred rent receivable if circumstances indicate that it is not reasonable to assume that the tenant will make all of its contractual lease payments when due during the current term of the lease. We make estimates of the collectability of our accounts receivable related to revenue from rental properties. We analyze accounts receivable and historical bad debt levels, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Additionally, with respect to tenants in bankruptcy, we estimate the expected recovery through bankruptcy claims and increase the allowance for amounts deemed uncollectible. If our assumptions regarding the collectability of accounts receivable prove incorrect, we could experience write-offs of the accounts receivable or deferred rent receivable in excess of our allowance for doubtful accounts. Lease termination fees are recognized as rental income when earned upon the termination of a tenant’s lease and relinquishment of space in which we have no further obligation to the tenant. The present value of the difference between the fair market rent and the contractual rent for above-market and below-market leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. Direct Financing Leases: Income under direct financing leases is included in revenues from rental properties and is recognized over the lease terms using the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties. The investments in direct financing leases are increased for interest income earned and amortized over the life of the leases and reduced by the receipt of lease payments. We consider direct financing leases to be past-due or delinquent when a contractually required payment is not remitted in accordance with the provisions of the underlying agreement. We evaluate each account individually and set up an allowance when, based upon current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms, and the amount can be reasonably estimated. We review our direct financing leases at least annually to determine whether there has been an-other-than-temporary decline in the current estimate of residual value of the property. The residual value is our estimate of what we could realize upon the sale of the property at the end of the lease term, based on market information and third-party estimates where available. If this review indicates that a decline in residual value has occurred that is other-than-temporary, we recognize an impairment charge. There were no impairments of any of our direct financing leases during the three and nine months ended September 30, 2015 and 2014. When we enter into a contract to sell properties that are recorded as direct financing leases, we evaluate whether we believe it is probable that the disposition will occur. If we determine that the disposition is probable and therefore the property’s holding period is reduced, we record an allowance for credit losses to reflect the change in the estimate of the undiscounted future rents. Accordingly, the net investment balance is written down to fair value. Notes and Mortgages Receivable: accrued as earned. Interest income on impaired loans is recognized on a cash basis. We do not provide for an additional allowance for loan losses based on the grouping of loans as we believe the characteristics of the loans are not sufficiently similar to allow an evaluation of these loans as a group for a possible loan loss allowance. As such, all of our loans are evaluated individually for impairment purposes. Environmental Remediation Obligations: We record the fair value of a liability for an environmental remediation obligation as an asset and liability when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. Environmental remediation obligations are estimated based on the level and impact of contamination at each property. The accrued liability is the aggregate of the best estimate of the fair value of cost for each component of the liability. The accrued liability is net of recoveries of environmental costs from state underground storage tank (“UST” or “USTs”) remediation funds with respect to both past and future environmental spending based on estimated recovery rates developed from prior experience with the funds. Net environmental liabilities are currently measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. We accrue for environmental liabilities that we believe are allocable to other potentially responsible parties if it becomes probable that the other parties will not pay their environmental remediation obligations. Income Taxes: Earnings per Common Share: Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Earnings from continuing operations $ 8,523 $ 9,005 $ 19,985 $ 23,525 Less dividend equivalents attributable to RSUs outstanding (96 ) (89 ) (273 ) (240 ) Earnings from continuing operations attributable to common 8,427 8,916 19,712 23,285 (Loss) earnings from discontinued operations (1,488 ) 1,230 (2,468 ) 2,985 Less dividend equivalents attributable to RSUs outstanding — (12 ) — (31 ) (Loss) earnings from discontinued operations attributable to common shareholders (1,488 ) 1,218 (2,468 ) 2,954 Net earnings attributable to common shareholders used for basic $ 6,939 $ 10,134 $ 17,244 $ 26,239 Weighted-average number of common shares outstanding: Basic 33,422 33,417 33,420 33,406 Diluted 33,422 33,417 33,420 33,406 RSUs outstanding at the end of the period 401 333 401 333 Dividends: Out-of-Period Adjustment: |
Leases
Leases | 9 Months Ended |
Sep. 30, 2015 | |
Leases [Abstract] | |
Leases | 2. LEASES As of September 30, 2015, we owned 764 properties and leased 102 properties from third-party landlords. Our 866 properties are located in 23 states across the United States and Washington, D.C., with concentrations in the Northeast and Mid-Atlantic regions. Substantially all of our properties are leased on a triple-net basis primarily to petroleum distributors and, to a lesser extent, individual operators. Generally our tenants supply fuel and either operate our properties directly or sublet our properties to operators who operate their gas stations, convenience stores, automotive repair service facilities or other businesses at our properties. Our triple-net tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental contamination that existed before their leases commenced. (See note 5 for additional information regarding environmental obligations.) Substantially all of our tenants’ financial results depend on the sale of refined petroleum products and rental income from their subtenants. As a result, our tenants’ financial results are highly dependent on the performance of the petroleum marketing industry, which is highly competitive and subject to volatility. During the terms of our leases, we monitor the credit quality of our triple-net tenants by reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases. Revenues from rental properties included in continuing operations for the three and nine months ended September 30, 2015 were $29,077,000 and $78,471,000, respectively. Revenues from rental properties included in continuing operations for the three and nine months ended September 30, 2014 were $24,078,000 and $72,198,000, respectively. Rental income contractually due or received from our tenants included in revenues from rental properties in continuing operations was $23,513,000 and $64,695,000 for the three and nine months ended September 30, 2015, respectively, and $19,528,000 and $57,810,000 for the three and nine months ended September 30, 2014, respectively. “Pass-through” real estate taxes and other municipal charges paid by us which were reimbursable by our tenants pursuant to the terms of triple-net lease agreements included in revenues from rental properties and rental property expenses in continuing operations totaled $4,237,000 and $11,095,000 for the three and nine months ended September 30, 2015, respectively, and $3,743,000 and $9,860,000 for the three and nine months ended September 30, 2014, respectively. In accordance with GAAP, we recognize rental revenue in amounts which vary from the amount of rent contractually due or received during the periods presented. As a result, revenues from rental properties include non-cash adjustments recorded for deferred rental revenue due to the recognition of rental income on a straight-line (or average) basis over the current lease term, the net amortization of above-market and below-market leases, recognition of rental income recorded under direct financing leases using the effective interest method which produces a constant periodic rate of return on the net investments in the leased properties and the amortization of deferred lease incentives (the “Revenue Recognition Adjustments”). Revenue Recognition Adjustments included in revenues from rental properties in continuing operations were $1,327,000 and $2,681,000 for the three and nine months ended September 30, 2015, respectively, and $807,000 and $4,531,000 for the three and nine months ended September 30, 2014, respectively. We provide reserves for a portion of the recorded deferred rent receivable if circumstances indicate that a tenant will not make all of its contractual lease payments during the current lease term. Our assessments and assumptions regarding the recoverability of the deferred rent receivable are reviewed on an ongoing basis and such assessments and assumptions are subject to change. The components of the $94,549,000 net investment in direct financing leases as of September 30, 2015 are minimum lease payments receivable of $182,424,000 plus unguaranteed estimated residual value of $13,979,000 less unearned income of $101,854,000. The components of the $95,764,000 net investment in direct financing leases as of December 31, 2014 were minimum lease payments receivable of $191,491,000 plus unguaranteed estimated residual value of $13,979,000 less unearned income of $109,706,000. Marketing and the Master Lease Approximately 415 of the properties we own or lease as of September 30, 2015 were previously leased to Getty Petroleum Marketing Inc. (“Marketing”) pursuant to a master lease (the “Master Lease”). In December 2011, Marketing filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court. The Master Lease was terminated effective April 30, 2012, and in July 2012, the Bankruptcy Court approved Marketing’s Plan of Liquidation and appointed a trustee (the “Liquidating Trustee”) to oversee liquidation of the Marketing estate (the “Marketing Estate”). As part of Marketing’s bankruptcy proceeding, we maintained significant pre-petition and post-petition unsecured claims against Marketing. On March 3, 2015, we entered into a settlement agreement with the Liquidating Trustee of the Marketing Estate to resolve claims asserted by us in Marketing’s bankruptcy case (the “Settlement Agreement”). The Settlement Agreement was approved by an order of the U.S. Bankruptcy Court, and, on April 22, 2015, we received a distribution from the Marketing Estate of $6,800,000 on account of our general unsecured claims. The Settlement Agreement also resolved a dispute relating to the balance of payment due to us pursuant to our agreement to fund the lawsuit that was brought by the Liquidating Trustee against Lukoil Americas Corporation and related entities and individuals for the benefit of Marketing’s creditors. As a result, on April 22, 2015, we also received an additional distribution of $550,000 from the Marketing Estate in full resolution of the funding agreement dispute. On October 19, 2015, the U.S. Bankruptcy Court entered a final decree closing the bankruptcy case of the Marketing Estate. As a result, on November 3, 2015, we received a final distribution from the Marketing Estate of approximately $10,800,000 on account of our general unsecured claims. We do not expect to receive any further distributions from the Marketing Estate. The funds received from the Marketing Estate for the nine months ended September 30, 2015 are included in other income on our consolidated statements of operations. Leasing Activities As of September 30, 2015, we have entered into long-term triple-net leases with petroleum distributors for 14 separate property portfolios comprising approximately 370 properties in the aggregate that were previously leased to Marketing. We have also entered into month-to-month license agreements with occupants of 18 properties previously leased to Marketing (substantially all of whom were former tenants of Marketing) allowing such occupants to continue to occupy and use these properties as gas stations, convenience stores, automotive repair service facilities or other businesses. These month-to-month license agreements are intended as interim occupancy arrangements until these properties are sold or leased on a triple-net basis. Under our month-to-month license agreements, we receive monthly licensing fees and are responsible for the payment of operating expenses such as maintenance, repairs and real estate taxes (“Property Expenditures”), certain environmental compliance costs and costs associated with any environmental remediation. The long-term triple-net leases with petroleum distributors are unitary triple-net lease agreements generally with an initial term of 15 to 20 years, and options for successive renewal terms of up to 20 years. Rent is scheduled to increase at varying intervals during both the initial and renewal terms of our leases. Several of the leases provide for additional rent based on the aggregate volume of fuel sold. In addition, the majority of the leases require the tenants to make capital expenditures at our properties substantially all of which are related to the replacement of USTs that are owned by our tenants. As of September 30, 2015, we have a remaining commitment to co-invest as much as $12,235,000 in the aggregate with our tenants for a portion of such capital expenditures within the next approximately five years. Our commitment provides us with the option to either reimburse our tenants, or to offset rent when these capital expenditures are made. This deferred expense is recognized on a straight-line basis as a reduction of rental revenue in our consolidated statements of operations over the terms of the various leases. As part of the triple-net leases for properties previously leased to Marketing, we transferred title of the USTs to our tenants, and the obligation to pay for the retirement and decommissioning or removal of USTs at the end of their useful life or earlier if circumstances warranted was fully or partially transferred to our new tenants. We remain contingently liable for this obligation in the event that our tenants do not satisfy their responsibilities. Accordingly, through September 30, 2015, we removed $13,033,000 of asset retirement obligations and $10,555,000 of net asset retirement costs related to USTs from our balance sheet. The cumulative net amount of $2,478,000 is recorded as deferred rental revenue and will be recognized on a straight-line basis as additional revenues from rental properties over the terms of the various leases. We incurred $90,000 and $60,000 of lease origination costs for the nine months ended September 30, 2015 and 2014, respectively, which deferred expense is recognized on a straight-line basis as amortization expense in our consolidated statements of operations over the terms of the various leases. Major Tenants As of September 30, 2015, we had three significant tenants by revenue: • We lease 152 gasoline station and convenience store properties in three separate unitary leases to subsidiaries of Global Partners, LP (NYSE: GLP). In aggregate, subsidiaries of Global Partners represented 21% and 10% of our rental revenues for the nine months ended September 30, 2015 and 2014, respectively. These rental revenue percentages include the impact of two leases, which were assigned by our former tenants, White Oak Petroleum, LLC and Big Apple Petroleum Realty, LLC (both affiliates of Capitol Petroleum Group) to subsidiaries of Global Partners in June 2015. The foregoing assigned leases and our current lease with subsidiaries of Global Partners are all guaranteed by the parent company. • We lease 110 gasoline station and convenience store properties in two separate unitary leases to subsidiaries of Chestnut Petroleum Dist. Inc. In aggregate, subsidiaries of Chestnut Petroleum represented 17% and 20% of our rental revenues for the nine months ended September 30, 2015 and 2014, respectively. Our leases with Chestnut Petroleum are separate, non-cross defaulted leases with different subsidiaries of Chestnut Petroleum, since the subsidiaries are affiliated with one another and under common control, a material adverse impact on one subsidiary, or failure of one subsidiary to perform its rental and other obligations to us, may contribute to a material adverse impact on the other subsidiary and/or failure of the other subsidiary to perform its rental and other obligations to us. • We lease 77 gasoline station and convenience store properties under three separate, cross-defaulted unitary leases to Apro, LLC (d/b/a “United Oil”). In aggregate, United Oil represented 7% of our rental revenues for the nine months ended September 30, 2015. (See below for more information regarding the United Oil Transaction.) United Oil Transaction On June 3, 2015, we acquired fee simple interests in 77 convenience store and retail motor fuel stations from affiliates of Pacific Convenience and Fuels LLC and simultaneously leased the properties to Apro, LLC (d/b/a “United Oil”), a leading regional convenience store and gas station operator, under three separate cross-defaulted long-term triple-net unitary leases (the “United Oil Transaction”). The properties are located in Northern California, Southern California, Colorado, Washington, Nevada and Oregon. The acquired properties operate under several well recognized brands including 76, Conoco, Circle K, 7-11 and My Goods Market. The total purchase price for the acquisition was approximately $214,500,000, which was funded with proceeds from the Credit Agreement and Restated Prudential Note Purchase Agreement. The leases governing the properties are unitary triple-net lease agreements with initial terms of 20 years and options for up to three successive five year renewal options. The unitary leases require United Oil to pay a fixed annual rent plus all amounts pertaining to the properties including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is contractually scheduled to increase at various intervals over the course of the initial and renewal terms of the leases. NECG Lease Restructuring Eviction proceedings against a holdover group of former Marketing subtenants who continued to occupy properties in the State of Connecticut which are subject to our unitary lease with NECG (the “NECG Lease”) had a material adverse impact on NECG’s operations and profitability. In June 2013, the Connecticut Superior Court ruled in our favor with respect to all 24 locations involved in these proceedings. However, in July 2013, a majority of the operators against whom these Superior Court rulings were made appealed the decisions. Following the Superior Court ruling, 16 of the 24 former operators against whom eviction proceedings were brought either reached agreements with NECG to remain at their properties or voluntarily vacated them, and in either case their appeals were withdrawn. Eight of the operators remained in contested occupancy of the subject sites during the pendency of their appeal. On January 27, 2015, the Connecticut Supreme Court, in a written opinion, affirmed the Superior Court rulings in favor of NECG and us. As a result, we or NECG have regained possession of all of the locations that were still subject to appeal. In August 2013, we entered into an agreement to modify the NECG Lease and, as part of such agreement, we deferred portions of the scheduled rent payments due from NECG. This lease modification agreement also included provisions under which we can recapture and sever properties from the NECG Lease and, as of September 30, 2015, we have removed 31 of the original 84 properties from the NECG Lease. As a result of the disruption and costs associated with the holdover litigation, NECG was not current in its rent and certain other obligations to us under the NECG Lease. As of September 30, 2015, we have a total accounts receivable bad debt reserve related to the NECG Lease of $2,035,000 for amounts which we do not believe we will collect from NECG. As a result of the developments with NECG described above, we concluded that it was probable that we would not receive from NECG the entire amount of the contractual lease payments owed to us under the NECG Lease. Accordingly, as of September 30, 2015, we have fully reserved for the outstanding deferred rent receivable balance of $6,101,000. Allowances for deferred rent receivable reduce our net earnings, but do not impact our cash flow from operating activities. We continue to be engaged in discussions with NECG about additional modifications to the NECG Lease, which will likely include the removal of additional properties from the NECG Lease. Our discussions with NECG are ongoing and we cannot predict the ultimate outcome of these discussions and their impact on the final size of the portfolio or future rental income associated with the NECG Lease. As of September 30, 2015, and the date of this Quarterly Report on Form 10-Q, NECG is current in its rent payments to us under the NECG Lease, as amended. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 3. COMMITMENTS AND CONTINGENCIES Credit Risk In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments, if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit with JPMorgan Chase Bank, N.A. and these balances, at times, exceed federally insurable limits. Legal Proceedings We are subject to various legal proceedings and claims which arise in the ordinary course of our business. As of September 30, 2015 and December 31, 2014, we had accrued $11,380,000 and $11,040,000, respectively, for certain of these matters which we believe were appropriate based on information then currently available. We have recorded provisions for litigation losses aggregating $349,000 and $130,000 for certain of these matters during the nine months ended September 30, 2015 and 2014, respectively. We are unable to estimate ranges in excess of the amount accrued with any certainty for these matters. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River and MTBE litigations in the states of New Jersey and Pennsylvania, in particular, could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River In September 2003, we received a directive (the “Directive”) issued by the New Jersey Department of Environmental Protection (“NJDEP”) under the New Jersey Spill Compensation and Control Act. The Directive indicated that we are one of approximately 66 potentially responsible parties for alleged natural resource damages (“NRD” or “NRDs”) resulting from the discharges of hazardous substances along the lower Passaic River (the “Lower Passaic River”). The Directive provided, among other things, that the recipients thereof must conduct an assessment of the natural resources that have been injured by the discharges into the Lower Passaic River and must implement interim compensatory restoration for the injured natural resources. The NJDEP alleges that our liability arises from alleged discharges originating from our former Newark, New Jersey Terminal site (which was sold in October 2013). We responded to the Directive by asserting that we were not liable. There has been no material activity and/or communications by the NJDEP with respect to the Directive since early after its issuance in 2003. In May 2007, the United States Environmental Protection Agency (“EPA”) entered into an Administrative Settlement Agreement and Order on Consent (“AOC”) with over 70 parties, most of which are also members of a Cooperating Parties Group (“CPG”) who have collectively agreed to perform a Remedial Investigation and Feasibility Study (“RI/FS”) for a 17 mile stretch of the Lower Passaic River in New Jersey. We are a party to the AOC and are a member of the CPG. The RI/FS is intended to address the investigation and evaluation of alternative remedial actions with respect to alleged damages to the Lower Passaic River, which is currently scheduled to be completed in 2015. Subsequently, certain members of the CPG entered into an Administrative Settlement Agreement and Order on Consent (“10.9 AOC”) effective June 18, 2012 to perform certain remediation activities, including removal and capping of sediments at the river mile 10.9 area and certain testing. The EPA also issued a Unilateral Order to Occidental Chemical Corporation (“Occidental”) directing Occidental to participate and contribute to the cost of the river mile 10.9 work. On April 11, 2014, the EPA issued a Focused Feasibility Study (“FFS”) with proposed remedial alternatives to address cleanup of the lower 8-mile stretch of the Lower Passaic River. While the EPA’s preferred approach would involve bank-to-bank dredging and installing an engineered cap, the FFS is subject to public comments and/or objections that must be considered by the EPA before a final remedial approach is selected and thus many uncertainties remain with respect to the final proposed remedy for the lower 8-miles of the Lower Passaic River. The FFS, RI/FS, AOC and 10.9 AOC do not resolve liability issues for remedial work or the restoration of or compensation for alleged natural resource damages to the Lower Passaic River, which are not known at this time. Our ultimate liability, if any, in the pending and possible future proceedings pertaining to the Lower Passaic River is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. MTBE Litigation – State of New Jersey We are defending against a lawsuit brought by various governmental agencies of the State of New Jersey, including the NJDEP alleging various theories of liability due to contamination of groundwater with methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as “MTBE”) involving multiple locations throughout the State of New Jersey (the “New Jersey MDL Proceedings”). The complaint names as defendants approximately 50 petroleum refiners, manufacturers, distributors and retailers of MTBE or gasoline containing MTBE. The State of New Jersey is seeking reimbursement of significant clean-up and remediation costs arising out of the alleged release of MTBE containing gasoline in the State of New Jersey and is asserting various natural resource damage claims as well as liability against the owners and operators of gas station properties from which the releases occurred. Although the ultimate outcome of the New Jersey MDL Proceedings cannot be ascertained at this time, we believe it is probable that this litigation will be resolved in a manner that is unfavorable to us. Preliminary settlement communications from the plaintiffs indicated that they were seeking $88,000,000 collectively from us, Marketing and Lukoil. Subsequent communications from the plaintiffs indicate that they are seeking approximately $24,000,000 from us. We have countered with a settlement offer on behalf of the Company only, which was rejected. We do not believe that plaintiffs’ settlement proposal is realistic given the legal theories and facts applicable to our activities and gas stations, and affirmative defenses available to us, all of which we believe have not been sufficiently developed in the proceedings. We continue to engage in a settlement negotiation and a dialogue to educate the plaintiff’s counsel on the unique nature of the Company and our business as compared to the other defendants in the litigation. In addition, we are pursuing claims for reimbursement of monies expended in the defense and settlement of certain MTBE cases under pollution insurance policies previously obtained by Marketing and under which we believe we are entitled to coverage; however, we have not yet confirmed whether and to what extent such coverage may actually be available. We are unable to estimate with certainty the amount of possible loss in excess of the amount accrued for the New Jersey MDL Proceedings as we do not believe that plaintiffs’ settlement proposal is realistic and there remains uncertainty as to the allegations in this case as they relate to us, our defenses to the claims, our rights to indemnification or contribution from other parties and the aggregate possible amount of damages for which we may be held liable. Our best estimate of the loss within a range of loss has been accrued for; however, it is possible that losses related to the New Jersey MDL Proceedings could result in a loss in excess of the amount accrued as of September 30, 2015 and such additional losses could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. MTBE Litigation – State of Pennsylvania On June 19, 2014, the Commonwealth of Pennsylvania filed a complaint in the Court of Common Pleas, Philadelphia County alleging various theories of liability due to alleged statewide MTBE contamination in Pennsylvania (the “Complaint”). The Complaint names us and more than 50 other defendants, including but not limited to Exxon Mobil, various BP entities, Chevron, Citgo, Gulf, Lukoil Americas, Getty Petroleum Marketing Inc., Marathon, Hess, Shell Oil, Texaco, Valero, as well as other smaller petroleum refiners, manufacturers, distributors and retailers of MTBE or gasoline containing MTBE. The Complaint seeks compensation, among other asserted causes of action, for NRDs and for injuries sustained as a result of “defendants’ unfair and deceptive trade practices and acts in the marketing of MTBE and gasoline containing MTBE.” Plaintiffs also seek to recover costs paid or incurred by the State of Pennsylvania to detect, treat and remediate MTBE from public and private water wells and groundwater. Plaintiffs have recently filed an amended Complaint asserting additional causes of action against the defendants. We have joined with other defendants in filing motions to dismiss the claims against us, which remain pending with the Court. We intend to defend vigorously against the Complaint. Our ultimate liability, if any, in this proceeding is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. |
Credit Agreement and Prudential
Credit Agreement and Prudential Loan Agreement | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Credit Agreement and Prudential Loan Agreement | 4. CREDIT AGREEMENT AND PRUDENTIAL LOAN AGREEMENT Debt Refinancing As of December 31, 2014, we were a party to a $175,000,000 senior secured revolving credit agreement with a group of commercial banks led by JPMorgan Chase Bank, N.A. which was scheduled to mature in August 2015. As of December 31, 2014, borrowings under the credit agreement were $25,000,000 bearing interest at a rate of approximately 2.7%. On June 2, 2015, the borrowings then outstanding under such credit agreement were repaid with proceeds of the Credit Agreement (as defined below) and the prior credit agreement was terminated. In addition, as a result of entering into the Credit Agreement, mortgage liens and other security interests on certain of our properties and assets held by the prior bank group under our prior credit agreement were released. Credit Agreement On June 2, 2015, we entered into a $225,000,000 senior unsecured credit agreement (the “Credit Agreement”) with a group of banks led by Bank of America, N.A. (the “Bank Syndicate”). The Credit Agreement consists of a $175,000,000 revolving facility (the “Revolving Facility”), which is scheduled to mature in June 2018 and a $50,000,000 term loan (the “Term Loan”), which is scheduled to mature in June 2020. Subject to the terms of the Credit Agreement and our continued compliance with its provisions, we have the option to (a) extend the term of the Revolving Facility for one additional year to June 2019 and (b) increase by $75,000,000 the amount of the Revolving Facility to $250,000,000. The Credit Agreement incurs interest and fees at various rates based on our net debt to EBITDA ratio (as defined in the Credit Agreement) at the end of each quarterly reporting period. The Revolving Facility permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.95% to 2.25% or a LIBOR rate plus a margin of 1.95% to 3.25%. The annual commitment fee on the undrawn funds under the Revolving Facility is 0.25% to 0.30%. The Term Loan bears interest at a rate equal to the sum of a base rate plus a margin of 0.90% to 2.20% or a LIBOR rate plus a margin of 1.90% to 3.20%. The Credit Agreement does not provide for scheduled reductions in the principal balance prior to its maturity. As of September 30, 2015, borrowings under the Revolving Facility were $106,000,000 and borrowings under the Term Loan were $50,000,000 and, as of December 31, 2014, borrowings under our prior credit agreement were $25,000,000. The interest rate on Credit Agreement borrowings at September 30, 2015 was approximately 3.4% per annum. The Credit Agreement contains customary financial covenants such as availability, leverage and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. The Credit Agreement contains customary events of default, including cross default provisions under the Restated Prudential Note Purchase Agreement (as defined below), change of control and failure to maintain REIT status. Any event of default, if not cured or waived in a timely manner, would increase by 200 basis points (2.00%) the interest rate we pay under the Credit Agreement and prohibit us from drawing funds against the Credit Agreement and could result in the acceleration of our indebtedness under the Credit Agreement and could also give rise to an event of default and could result in the acceleration of our indebtedness under the Restated Prudential Note Purchase Agreement. We may be prohibited from drawing funds against the Revolving Facility if there is a material adverse effect on our business, assets, prospects or condition. Prudential Loan Agreement On June 2, 2015, we entered into an amended and restated note purchase agreement (the “Restated Prudential Note Purchase Agreement”) amending and restating our existing senior secured note purchase agreement with The Prudential Insurance Company of America (“Prudential”) and an affiliate of Prudential. Pursuant to the Restated Prudential Note Purchase Agreement, Prudential and its affiliate released the mortgage liens and other security interests held by Prudential and its affiliate on certain of our properties and assets, redenominated the existing notes in the aggregate amount of $100,000,000 issued under the existing note purchase agreement as Series A Notes, and issued $75,000,000 of Series B Notes bearing interest at 5.35% and maturing in June 2023 to Prudential and certain affiliates of Prudential. The Series A Notes will continue to bear interest at 6.0% and will mature in February 2021. The Restated Prudential Note Purchase Agreement does not provide for scheduled reductions in the principal balance of either the Series A Notes or the Series B Notes prior to their respective maturities. As of September 30, 2015, borrowings under the Restated Prudential Note Purchase Agreement were $175,000,000 and, as of December 31, 2014, borrowings under the prior senior secured note purchase agreement were $100,000,000. The Restated Prudential Note Purchase Agreement contains customary financial covenants such as leverage and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. The Restated Prudential Note Purchase Agreement contains customary events of default, including default under the Credit Agreement and failure to maintain REIT status. Any event of default, if not cured or waived, would increase by 200 basis points (2.00%) the interest rate we pay under the Restated Prudential Note Purchase Agreement and could result in the acceleration of our indebtedness under the Restated Prudential Note Purchase Agreement and could also give rise to an event of default and could result in the acceleration of our indebtedness under our Credit Agreement. As of September 30, 2015, we are in compliance with all of the material terms of the Credit Agreement and Restated Prudential Note Purchase Agreement, including the various financial covenants described above. The maturity date and amounts outstanding under the Credit Agreement and the Restated Prudential Note Purchase Agreement are as follows: Maturity Date Amount Borrowing under credit lines - Revolving Facility June 2018 $ 106,000,000 Borrowing under credit lines - Term Loan June 2020 $ 50,000,000 Series A Note under the Restated Prudential Note February 2021 $ 100,000,000 Series B Note under the Restated Prudential Note June 2023 $ 75,000,000 As of September 30, 2015, the carrying value of the borrowings outstanding under the Credit Agreement approximated fair value, and the fair value of the borrowings under the Prudential Series A Notes and Series B Notes were $107,700,000 and $77,900,000, respectively. As of December 31, 2014, the carrying value of our prior credit agreement approximated fair value, and the fair value of borrowings outstanding under the Prudential Series A Notes was $106,527,000. The fair value of the borrowings outstanding as of September 30, 2015 and December 31, 2014 was determined using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, risk profile and projected average borrowings outstanding or borrowings outstanding, which are based on unobservable inputs within Level 3 of the Fair Value Hierarchy. |
Environmental Obligations
Environmental Obligations | 9 Months Ended |
Sep. 30, 2015 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Obligations | 5. ENVIRONMENTAL OBLIGATIONS We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to remediation costs which include removing USTs, excavation of contaminated soil and water, installing, operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance reporting incurred in connection with contaminated properties. We seek reimbursement from state UST remediation funds related to these environmental costs where available. In July 2012, we purchased a ten-year pollution legal liability insurance policy covering all of our properties for preexisting unknown environmental liabilities and new environmental events. The policy has a $50,000,000 aggregate limit and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy is to obtain protection predominantly for significant events. No assurances can be given that we will obtain a net financial benefit from this investment. The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of the best estimate of the fair value of cost for each component of the liability net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental obligations in the event that the counterparty to the lease or other agreement does not satisfy them. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We are required to accrue for environmental liabilities that we believe are allocable to others under leases and other agreements if we determine that it is probable that the counterparty will not meet its environmental obligations. We may ultimately be responsible to pay for environmental liabilities as the property owner if the counterparty fails to pay them. As a result of Marketing’s bankruptcy filing, we accrued for significant additional environmental liabilities because we concluded that Marketing would not be able to perform them. A liability has not been accrued for environmental obligations that are the responsibility of any other current tenants based on those tenant’s history of paying such obligations and/or our assessment of their financial ability and intent to pay such costs. However, there can be no assurance that our assessments are correct or that our tenants who have paid their obligations in the past will continue to do so. The ultimate resolution of these matters could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term and remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties previously leased to Marketing, we have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and that existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the first ten years of the lease term. After expiration of such ten year period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant. We anticipate that a majority of the USTs at properties previously leased to Marketing will be replaced over the next decade because these USTs are either at or near the end of their useful lives. For long-term, triple-net leases covering sites previously leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of contamination found during such UST removal and replacement, unless such contamination was found during the first ten years of the lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the remediation of such contamination. For our transitional properties occupied under month-to-month license agreements, or which are vacant, we are responsible for costs associated with UST removals and for the cost of remediation of contamination found during the removal of USTs. We have also agreed to be responsible for environmental contamination that existed prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation) during the first five years after the sale of the properties. After the termination of the Master Lease, we commenced a process to take control of our properties and to reposition them. A substantial portion of these properties had USTs which were either at or near the end of their useful lives. For properties that we sold, we elected to remove certain of these USTs and in the course of re-letting properties, we made lease concessions to reimburse our tenants at operating gas stations for certain capital expenditures including UST replacements. In the course of these UST removals and replacements, previously unknown environmental contamination has been and continues to be discovered. As a result of these developments, we began to assess our prospective future environmental liability resulting from preexisting unknown environmental contamination which we believe may be discovered during removal and replacement of USTs at properties previously leased to Marketing in the future. At December 31, 2014, we developed a reasonable estimate of fair value for the prospective future environmental liability resulting from preexisting unknown environmental contamination and accrued for these estimated costs. These estimates are based primarily upon quantifiable trends, which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents the best estimate of the fair value of cost for each component of the liability net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages of USTs at properties where we would be responsible for preexisting contamination found within ten years after commencement of a lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to closure for new environmental contamination. Based on these estimates, along with relevant economic and risk factors, at September 30, 2015, we have $45,932,000 accrued for these future environmental liabilities related to preexisting unknown contamination. Our estimates are based upon facts that are known to us at this time and an assessment of the possible ultimate remedial action outcomes. It is possible that our assumptions, which form the basis of our estimates, regarding our ultimate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts recorded, for environmental remediation liabilities. Among the many uncertainties that impact the estimates are our assumptions, the necessary regulatory approvals for, and potential modifications of remediation plans, the amount of data available upon initial assessment of contamination, changes in costs associated with environmental remediation services and equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to additional claims. Additional environmental liabilities could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Environmental exposures are difficult to assess and estimate for numerous reasons, including the extent of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our liability for estimated environmental remediation obligations on a property by property basis, we consider among other things, enacted laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates which are subject to significant change, and are adjusted as the remediation treatment progresses, as circumstances change and as environmental contingencies become more clearly defined and reasonably estimable. We expect to adjust the accrued liabilities for environmental remediation obligations reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value can be made. We measure our environmental remediation liability at fair value based on expected future net cash flows, adjusted for inflation (using a range of 2.0% to 2.75%), and then discount them to present value (using a range of 4.0% to 7.0%). We adjust our environmental remediation liability quarterly to reflect changes in projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of September 30, 2015, we had accrued a total of $91,252,000 for our prospective environmental remediation liability. This accrual includes (a) $45,320,000, which was our best estimate of reasonably estimable environmental remediation obligations and obligations to remove USTs for which we are the title owner, net of estimated recoveries and (b) $45,932,000 for future environmental liabilities related to preexisting unknown contamination. As of December 31, 2014, we had accrued a total of $91,566,000 for our prospective environmental remediation liability. This accrual includes (a) $41,866,000, which was our best estimate of reasonably estimable environmental remediation obligations and obligations to remove USTs for which we are the title owner, net of estimated recoveries and (b) $49,700,000 for future environmental liabilities related to preexisting unknown contamination. Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $3,519,000 and $2,032,000 of net accretion expense was recorded for the nine months ended September 30, 2015 and 2014, respectively, which is included in environmental expenses. In addition, during the nine months ended September 30, 2015 and 2014, we recorded credits to environmental expenses included in continuing operations and to earnings from operating activities in discontinued operations in our consolidated statements of operations aggregating $2,035,000 and $423,000, respectively, where decreases in estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental expenses also include project management fees, legal fees and provisions for environmental litigation losses. During the nine months ended September 30, 2015 and 2014, we increased the carrying value of certain of our properties by $8,892,000 and $7,801,000, respectively, due to increases in estimated environmental remediation costs. The recognition and subsequent changes in estimates in environmental liabilities and the increase or decrease in carrying value of the properties are non-cash transactions which do not appear on the face of the consolidated statements of cash flows. We recorded non-cash impairment charges aggregating $10,598,000 and $4,961,000 for the nine months ended September 30, 2015 and 2014, respectively, in continuing operations and in discontinued operations for capitalized asset retirement costs. Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a ten year period if the increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as the remaining lease term for properties we lease from others. Depreciation and amortization expense included in continuing operations and earnings from discontinued operations in our consolidated statements of operations for the nine months ended September 30, 2015 and 2014 included $4,646,000 and $1,078,000, respectively, of depreciation related to capitalized asset retirement costs. Capitalized asset retirement costs were $51,501,000 and $59,809,000 as of September 30, 2015 and December 31, 2014, respectively. As part of the triple-net leases for properties previously leased to Marketing, we transferred title of the USTs to our tenants, and the obligation to pay for the retirement and decommissioning or removal of USTs at the end of their useful life or earlier if circumstances warranted was fully or partially transferred to our new tenants. We remain contingently liable for this obligation in the event that our tenants do not satisfy their responsibilities. Accordingly, through September 30, 2015, we removed $13,033,000 of asset retirement obligations and $10,555,000 of net asset retirement costs related to USTs from our balance sheet. The cumulative net amount of $2,478,000 is recorded as deferred rental revenue and will be recognized on a straight-line basis as additional revenues from rental properties over the terms of the various leases. (See note 2 for additional information.) We cannot predict what environmental legislation or regulations may be enacted in the future or how existing laws or regulations will be administered or interpreted with respect to products or activities to which they have not previously been applied. We cannot predict if state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices and if future environmental spending will continue to be eligible for reimbursement at historical recovery rates under these programs. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretation of existing laws, which may develop in the future, could have an adverse effect on our financial position, or that of our tenants, and could require substantial additional expenditures for future remediation. In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess of the amount accrued with any certainty; however, we believe it is possible that the fair value of future actual net expenditures could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation obligations will be reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value can be made. Future environmental expenses could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | 6. SHAREHOLDERS’ EQUITY A summary of the changes in shareholders’ equity for the nine months ended September 30, 2015 is as follows (in thousands, except share amounts): COMMON STOCK PAID-IN DIVIDENDS IN EXCESS SHARES AMOUNT CAPITAL OF EARNINGS TOTAL Balance, December 31, 2014 33,417,203 $ 334 $ 463,314 $ (56,624 ) $ 407,024 Net earnings 17,517 17,517 Dividends (23,000 ) (23,000 ) Stock-based employee compensation expense 4,599 — 712 — 712 Balance, September 30, 2015 33,421,802 $ 334 $ 464,026 $ (62,107 ) $ 402,253 On March 2, 2015, our Board of Directors granted 79,250 restricted stock units to our employees under our 2004 Omnibus Incentive Compensation Plan. We are authorized to issue 20,000,000 shares of preferred stock, par value $.01 per share, of which none were issued as of September 30, 2015 or December 31, 2014. |
Property Acquisitions
Property Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Property Acquisitions | 7. PROPERTY ACQUISITIONS During nine months ended September 30, 2015, we acquired fee title to 79 gasoline stations and convenience store properties for an aggregate purchase price of $218,300,000. On June 3, 2015, we acquired fee simple interests in 77 convenience store and retail motor fuel stations from affiliates of Pacific Convenience and Fuels LLC and simultaneously leased the properties to Apro, LLC (d/b/a “United Oil”), a leading regional convenience store and gas station operator, under three separate cross-defaulted long-term triple-net unitary leases (the “United Oil Transaction”). The properties are located in Northern California, Southern California, Colorado, Washington, Nevada and Oregon. The acquired properties operate under several well recognized brands including 76, Conoco, Circle K, 7-11 and My Goods Market. The total purchase price for the acquisition was approximately $214,500,000, which was funded with proceeds from the Credit Agreement and Restated Prudential Note Purchase Agreement. The leases governing the properties are unitary triple-net lease agreements with initial terms of 20 years and options for up to three successive five year renewal options. The unitary leases require United Oil to pay a fixed annual rent plus all amounts pertaining to the properties including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is contractually scheduled to increase at various intervals over the course of the initial and renewal terms of the leases. We accounted for the United Oil Transaction as a business combination. We estimated the fair value of acquired tangible assets (consisting of land, buildings and equipment) “as if vacant.” Based on these estimates, we allocated $142,357,000 of the purchase price to land, $75,664,000 to buildings and equipment, $112,000 to above market leases, $19,775,000 to below market leases, which is accounted for as a deferred liability and $16,136,000 to in-place leases and other intangible assets. We incurred transaction costs of $413,000 directly related to the acquisition which are included in general and administrative expenses in our consolidated statements of operations. As of September 30, 2015, the purchase price was allocated to the assets acquired and liabilities assumed based upon their preliminary fair values. Unaudited Pro Forma Condensed Consolidated Financial Information The following unaudited pro forma condensed consolidated financial information has been prepared utilizing our historical financial statements and the combined effect of additional revenue and expenses from the properties acquired assuming that the acquisitions had occurred on January 1, 2014, after giving effect to certain adjustments resulting from the straight-lining of scheduled rent increases. The following information also gives effect to the additional interest expense resulting from the assumed increase in borrowings outstanding under the Credit Agreement and the Restated Prudential Note Purchase Agreement to fund the acquisition. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisition reflected herein been consummated on the dates indicated or that will be achieved in the future. (in thousands, except per share data) Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Revenues from continuing operations $ 29,987 $ 29,304 $ 88,389 $ 87,710 Earnings from continuing operations $ 8,523 $ 9,818 $ 21,820 $ 25,552 Basic and diluted earnings from continuing operations per common share $ 0.25 $ 0.29 $ 0.64 $ 0.76 |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation: |
Unaudited, Interim Consolidated Financial Statements | Unaudited, Interim Consolidated Financial Statements: |
Use of Estimates, Judgments and Assumptions | Use of Estimates, Judgments and Assumptions: |
Subsequent Events | Subsequent Events: |
New Accounting Pronouncement | New Accounting Pronouncement: In August 2014, the FASB issued guidance ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance requires management to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. This guidance is effective for annual periods ending after December 15, 2016, including interim reporting periods thereafter. The new guidance affects disclosures only and is not expected to have a material impact on our consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued guidance ASU 2015-03, which amends Topic 835, Other Presentation Matters In August 2015, the FASB issued guidance ASU 2015-15: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements (“ASU 2015-15”) providing guidance regarding the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance on this matter, the SEC staff has indicated that it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on that line-of-credit arrangement. We do not expect the adoption of ASU 2015-15 to have a material impact on our consolidated financial statements. In September 2015, the FASB issued guidance ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”) to simplify the accounting for business combinations, specifically as it relates to measurement-period adjustments. ASU 2015-16 requires acquiring entities in a business combination to recognize measurement-period adjustments in the reporting period in which the adjustment amounts are determined. Also, ASU 2015-16 requires entities to present separately on the face of the income statement (or disclose in the notes to the financial statements) the portion of the amount recorded in the current period earnings, by line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective beginning on January 1, 2016 and is to be applied prospectively to measurement-period adjustments that occur after the effective date. We do not expect the adoption of ASU 2015-16 to have a significant impact on our consolidated financial statements. |
Fair Value Hierarchy | Fair Value Hierarchy: We have mutual fund assets that are measured at fair value on a recurring basis using Level 1 inputs. We have a Supplemental Retirement Plan for executives and other senior management employees. The amounts held in trust under the Supplemental Retirement Plan using Level 2 inputs may be used to satisfy claims of general creditors in the event of our or any of our subsidiaries’ bankruptcy. We have liability to the employees participating in the Supplemental Retirement Plan for the participant account balances equal to the aggregate of the amount invested at the employees’ direction and the income earned in such mutual funds. We have certain real estate assets that are measured at fair value on a non-recurring basis using Level 3 inputs as of September 30, 2015 and December 31, 2014 of $2,496,000 and $9,266,000, respectively, where impairment charges have been recorded. Due to the subjectivity inherent in the internal valuation techniques used in estimating fair value, the amounts realized from the sale of such assets may vary significantly from these estimates. The following summarizes as of September 30, 2015 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 853 $ — $ — $ 853 Liabilities Deferred compensation $ — $ 853 $ — $ 853 The following summarizes as of December 31, 2014 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 785 $ — $ — $ 785 Liabilities Deferred compensation $ — $ 785 $ — $ 785 |
Fair Value Disclosure of Financial Instruments | Fair Value Disclosure of Financial Instruments: |
Discontinued Operations and Assets Held-for-Sale | Discontinued Operations and Assets Held-for-Sale: For the nine months ended September 30, 2015, we sold 11 properties resulting in a gain of $352,000 that were previously classified as held for sale as of June 30, 2014. In addition, for the nine months ended September 30, 2015, we sold 61 properties resulting in a recognized gain of $498,000 that previously did not meet the criteria to be classified as held for sale. We also sold a leasehold interest and recognized a gain of $998,000, received funds from three partial property condemnations resulting in a loss of $51,000 and recognized a loss on capital lease terminations of $8,000. We determined that the 61 properties sold did not represent a strategic shift in our operations as defined in ASU 2014-08 and, as a result, the gains on dispositions of real estate for the 61 properties were reflected in our earnings from continuing operations. As a result of a change in circumstances that was previously considered unlikely, we reclassified one property from held for sale to held and used as the property no longer met the criteria to be held for sale during the third quarter of 2015. A property that is reclassified to held and used is measured and recorded at the lower of (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used, or (ii) the fair value at the date of the subsequent decision not to sell. Real estate held for sale consisted of the following at September 30, 2015 and December 31, 2014: September 30, December 31, (in thousands) 2015 2014 Land $ 698 $ 2,383 Buildings and improvements 874 3,140 1,572 5,523 Accumulated depreciation and amortization (267 ) (1,180 ) Real estate held for sale, net $ 1,305 $ 4,343 The revenue from rental properties, impairment charges, other operating expenses and gains on dispositions of real estate related to these properties are as follows: Three months ended Nine months ended (in thousands) 2015 2014 2015 2014 Revenues from rental properties $ 5 $ 622 $ 166 $ 2,163 Impairment charges (2,760 ) (1,985 ) (4,574 ) (5,018 ) Other operating income (expenses) 1,039 (164 ) 1,588 (1,287 ) Loss from operating activities (1,716 ) (1,527 ) (2,820 ) (4,142 ) Gains on dispositions of real estate 228 2,757 352 7,127 (Loss) earnings from discontinued operations $ (1,488 ) $ 1,230 $ (2,468 ) $ 2,985 |
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of | Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of: We recorded non-cash impairment charges aggregating $4,460,000 and $15,256,000 for the three and nine months ended September 30, 2015, respectively, and $2,906,000 and $6,583,000 for the three and nine months ended September 30, 2014, respectively, in continuing operations and in discontinued operations. Our estimated fair values, as it relates to property carrying values were primarily based upon (i) estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bid and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence (this method was used to determine $8,043,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015), for which we do not have access to the unobservable inputs used to determine these estimated fair values, (ii) discounted cash flow models (this method was used to determine $641,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015) and (iii) the accumulation of asset retirement costs as a result of increases in estimated environmental liabilities which increased the carrying value of certain properties in excess of their fair value (this method was used to determine $6,572,000 of the $15,256,000 in impairments recognized during the nine months ended September 30, 2015). The non-cash impairment charges recorded during the three and nine months ended September 30, 2015 and 2014 were attributable to reductions in estimated undiscounted cash flows expected to be received during the assumed holding period, reductions in our estimates of value for properties held for sale and the accumulation of asset retirement costs as a result of increases in estimated environmental liabilities which increased the carrying value of certain properties in excess of their fair value. The estimated fair value of real estate is based on the price that would be received from the sale of the property in an orderly transaction between market participants at the measurement date. In general, we consider multiple internal valuation techniques when measuring the fair value of a property, all of which are based on unobservable inputs and assumptions that are classified within Level 3 of the Fair Value Hierarchy. These unobservable inputs include assumed holding periods ranging up to 15 years, assumed average rent increases of 2.0% annually, income capitalized at a rate of 8.0% and cash flows discounted at a rate of 7.0%. These assessments have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future rental rates and operating expenses that could differ materially from actual results in future periods. Where properties held for use have been identified as having a potential for sale, additional judgments are required related to the determination as to the appropriate period over which the projected undiscounted cash flows should include the operating cash flows and the amount included as the estimated residual value. This requires significant judgment. In some cases, the results of whether impairment is indicated are sensitive to changes in assumptions input into the estimates, including the holding period until expected sale. |
Deferred Gain | Deferred Gain On August 3, 2015, we terminated our unitary triple-net lease (the “Ramoco Lease”) with Hanuman Business, Inc. (d/b/a “Ramoco”), and sold to Ramoco affiliates 48 of the properties that had been subject to the Ramoco Lease. The total consideration for the 48 properties we sold to Ramoco affiliates, including seller financing, was $15,000,000. In accordance with ASC 360-20, Property, Plant and Equipment, Real Estate Sales |
Deferred Rent Receivable and Revenue Recognition | Deferred Rent Receivable and Revenue Recognition: |
Direct Financing Leases | Direct Financing Leases: We review our direct financing leases at least annually to determine whether there has been an-other-than-temporary decline in the current estimate of residual value of the property. The residual value is our estimate of what we could realize upon the sale of the property at the end of the lease term, based on market information and third-party estimates where available. If this review indicates that a decline in residual value has occurred that is other-than-temporary, we recognize an impairment charge. There were no impairments of any of our direct financing leases during the three and nine months ended September 30, 2015 and 2014. When we enter into a contract to sell properties that are recorded as direct financing leases, we evaluate whether we believe it is probable that the disposition will occur. If we determine that the disposition is probable and therefore the property’s holding period is reduced, we record an allowance for credit losses to reflect the change in the estimate of the undiscounted future rents. Accordingly, the net investment balance is written down to fair value. |
Notes and Mortgages Receivable | Notes and Mortgages Receivable: |
Environmental Remediation Obligations | Environmental Remediation Obligations: |
Income Taxes | Income Taxes: |
Earnings per Common Share | Earnings per Common Share: Basic earnings per common share gives effect, utilizing the two-class method, to the potential dilution from the issuance of common shares in settlement of restricted stock units (“RSU” or “RSUs”) which provide for non-forfeitable dividend equivalents equal to the dividends declared per common share. Basic earnings per common share is computed by dividing net earnings less dividend equivalents attributable to RSUs by the weighted-average number of common shares outstanding during the year. Diluted earnings per common share, also gives effect to the potential dilution from the exercise of stock options utilizing the treasury stock method. There were 5,000 stock options excluded from the earnings per share calculations below as they were anti-dilutive as of September 30, 2015 and 2014, respectively. Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Earnings from continuing operations $ 8,523 $ 9,005 $ 19,985 $ 23,525 Less dividend equivalents attributable to RSUs outstanding (96 ) (89 ) (273 ) (240 ) Earnings from continuing operations attributable to common 8,427 8,916 19,712 23,285 (Loss) earnings from discontinued operations (1,488 ) 1,230 (2,468 ) 2,985 Less dividend equivalents attributable to RSUs outstanding — (12 ) — (31 ) (Loss) earnings from discontinued operations attributable to common shareholders (1,488 ) 1,218 (2,468 ) 2,954 Net earnings attributable to common shareholders used for basic $ 6,939 $ 10,134 $ 17,244 $ 26,239 Weighted-average number of common shares outstanding: Basic 33,422 33,417 33,420 33,406 Diluted 33,422 33,417 33,420 33,406 RSUs outstanding at the end of the period 401 333 401 333 |
Dividends | Dividends: For the nine months ended September 30, 2015 and 2014, we paid cash dividends of $27,035,000 or $0.80 per share (which consisted of $22,310,000 or $0.66 per share from regular quarterly cash dividends and a $4,725,000 or $0.14 per share special cash dividend) and $21,925,000 or $0.65 per share (which consisted of $20,240,000 or $0.60 per share from regular quarterly cash dividends and a $1,685,000 or $0.05 per share special cash dividend), respectively. |
Out-of-Period Adjustment | Out-of-Period Adjustment: |
General (Tables)
General (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following summarizes as of September 30, 2015 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 853 $ — $ — $ 853 Liabilities Deferred compensation $ — $ 853 $ — $ 853 The following summarizes as of December 31, 2014 our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy: (in thousands) Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 785 $ — $ — $ 785 Liabilities Deferred compensation $ — $ 785 $ — $ 785 |
Schedule of Real Estate Held for Sale | Real estate held for sale consisted of the following at September 30, 2015 and December 31, 2014: September 30, December 31, (in thousands) 2015 2014 Land $ 698 $ 2,383 Buildings and improvements 874 3,140 1,572 5,523 Accumulated depreciation and amortization (267 ) (1,180 ) Real estate held for sale, net $ 1,305 $ 4,343 |
Schedule of Earnings (Loss) from Discontinued Operations | The revenue from rental properties, impairment charges, other operating expenses and gains on dispositions of real estate related to these properties are as follows: Three months ended Nine months ended (in thousands) 2015 2014 2015 2014 Revenues from rental properties $ 5 $ 622 $ 166 $ 2,163 Impairment charges (2,760 ) (1,985 ) (4,574 ) (5,018 ) Other operating income (expenses) 1,039 (164 ) 1,588 (1,287 ) Loss from operating activities (1,716 ) (1,527 ) (2,820 ) (4,142 ) Gains on dispositions of real estate 228 2,757 352 7,127 (Loss) earnings from discontinued operations $ (1,488 ) $ 1,230 $ (2,468 ) $ 2,985 |
Schedule of Earnings Per Share | Diluted earnings per common share, also gives effect to the potential dilution from the exercise of stock options utilizing the treasury stock method. There were 5,000 stock options excluded from the earnings per share calculations below as they were anti-dilutive as of September 30, 2015 and 2014, respectively. Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Earnings from continuing operations $ 8,523 $ 9,005 $ 19,985 $ 23,525 Less dividend equivalents attributable to RSUs outstanding (96 ) (89 ) (273 ) (240 ) Earnings from continuing operations attributable to common 8,427 8,916 19,712 23,285 (Loss) earnings from discontinued operations (1,488 ) 1,230 (2,468 ) 2,985 Less dividend equivalents attributable to RSUs outstanding — (12 ) — (31 ) (Loss) earnings from discontinued operations attributable to common shareholders (1,488 ) 1,218 (2,468 ) 2,954 Net earnings attributable to common shareholders used for basic $ 6,939 $ 10,134 $ 17,244 $ 26,239 Weighted-average number of common shares outstanding: Basic 33,422 33,417 33,420 33,406 Diluted 33,422 33,417 33,420 33,406 RSUs outstanding at the end of the period 401 333 401 333 |
Credit Agreement and Prudenti15
Credit Agreement and Prudential Loan Agreement (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Maturity Date and Amounts Outstanding Under Credit Agreement and Restated Prudential Note Purchase Agreement | The maturity date and amounts outstanding under the Credit Agreement and the Restated Prudential Note Purchase Agreement are as follows: Maturity Date Amount Borrowing under credit lines - Revolving Facility June 2018 $ 106,000,000 Borrowing under credit lines - Term Loan June 2020 $ 50,000,000 Series A Note under the Restated Prudential Note February 2021 $ 100,000,000 Series B Note under the Restated Prudential Note June 2023 $ 75,000,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Summary of Changes in Shareholders' Equity | A summary of the changes in shareholders’ equity for the nine months ended September 30, 2015 is as follows (in thousands, except share amounts): COMMON STOCK PAID-IN DIVIDENDS IN EXCESS SHARES AMOUNT CAPITAL OF EARNINGS TOTAL Balance, December 31, 2014 33,417,203 $ 334 $ 463,314 $ (56,624 ) $ 407,024 Net earnings 17,517 17,517 Dividends (23,000 ) (23,000 ) Stock-based employee compensation expense 4,599 — 712 — 712 Balance, September 30, 2015 33,421,802 $ 334 $ 464,026 $ (62,107 ) $ 402,253 On March 2, 2015, our Board of Directors granted 79,250 restricted stock units to our employees under our 2004 Omnibus Incentive Compensation Plan. We are authorized to issue 20,000,000 shares of preferred stock, par value $.01 per share, of which none were issued as of September 30, 2015 or December 31, 2014. |
Property Acquisitions (Tables)
Property Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Pro Forma Condensed Financial Information | The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisition reflected herein been consummated on the dates indicated or that will be achieved in the future. (in thousands, except per share data) Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Revenues from continuing operations $ 29,987 $ 29,304 $ 88,389 $ 87,710 Earnings from continuing operations $ 8,523 $ 9,818 $ 21,820 $ 25,552 Basic and diluted earnings from continuing operations per common share $ 0.25 $ 0.29 $ 0.64 $ 0.76 |
General - Additional Informatio
General - Additional Information (Detail) | Nov. 03, 2015USD ($) | Aug. 03, 2015USD ($)Property | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Sep. 30, 2015USD ($)Property$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Jun. 30, 2014Property |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of real estate properties held for sale | Property | 8 | ||||||||
Number of properties sold previously held for sale | Property | 11 | ||||||||
Gain from sale of properties | $ 498,000 | ||||||||
Loss on partial condemnation | 51,000 | ||||||||
Loss on capital lease termination | $ 8,000 | ||||||||
Number of properties sold | Property | 61 | ||||||||
Impairment charges | $ 4,460,000 | $ 2,906,000 | $ 15,256,000 | $ 6,583,000 | |||||
Total consideration for properties sold including seller financing | $ 15,000,000 | ||||||||
Cash dividends | $ 27,035,000 | $ 21,925,000 | |||||||
Cash dividends per share | $ / shares | $ 0.80 | $ 0.65 | |||||||
Payment of regular quarterly cash dividend | $ 22,310,000 | $ 20,240,000 | |||||||
Payment of special cash dividend | $ 4,725,000 | $ 1,685,000 | |||||||
Regular quarterly cash dividends paid per share | $ / shares | $ 0.66 | $ 0.60 | |||||||
Special cash dividends paid per share | $ / shares | $ 0.14 | $ 0.05 | |||||||
Adjustment which decreased net earnings | $ 420,000 | ||||||||
Subsequent Event [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Legal settlements received | $ 10,800,000 | ||||||||
Leaseholds and Leasehold Improvements [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Sale of leasehold improvement and recognized a gain | $ 998,000 | ||||||||
Estimated Sale Price Method [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Impairment charges | 15,256,000 | ||||||||
Estimated fair value | 8,043,000 | 8,043,000 | |||||||
Discounted Cash Flow Method [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Impairment charges | 15,256,000 | ||||||||
Estimated fair value | 641,000 | 641,000 | |||||||
Accumulation of Asset Retirement Cost Method [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Impairment charges | 15,256,000 | ||||||||
Estimated fair value | 6,572,000 | 6,572,000 | |||||||
Properties Previously Classified Held for Sale [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Gain from sale of properties | $ 352,000 | ||||||||
Stock Options [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Anti-dilutive securities Excluded from calculation of EPS | shares | 5,000 | 5,000 | |||||||
Ramoco Affiliates [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Number of properties sold to Ramoco affiliates that were previously included in the Ramoco lease | Property | 48 | ||||||||
Accounts Payable and Accrued Liabilities [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Deferred gain on sale of property | 3,900,000 | $ 3,900,000 | |||||||
Direct Financing Leases Financing Receivable [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Impairment charges | 0 | $ 0 | $ 0 | $ 0 | |||||
Level 3 [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Assumed holding periods for unobservable inputs | 15 years | ||||||||
Assumed annual average rent increases for unobservable inputs | 2.00% | ||||||||
Rate of income capitalization for unobservable inputs | 8.00% | ||||||||
Cash flows discounted rate for unobservable inputs | 7.00% | ||||||||
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||
Impaired real estate assets measured at fair value | $ 2,496,000 | $ 2,496,000 | $ 9,266,000 |
General - Schedule of Assets an
General - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | $ 853 | $ 785 |
Deferred Compensation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | 853 | 785 |
Level 1 [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 853 | 785 |
Level 2 [Member] | Deferred Compensation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | $ 853 | $ 785 |
General - Schedule of Real Esta
General - Schedule of Real Estate Held for Sale (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Real Estate Held For Sale [Line Items] | ||
Accumulated depreciation and amortization | $ (103,839) | $ (99,510) |
Real estate, net | 681,271 | 495,269 |
Real Estate Held for Sale [Member] | ||
Real Estate Held For Sale [Line Items] | ||
Land | 698 | 2,383 |
Buildings and improvements | 874 | 3,140 |
Real estate held for sale, gross | 1,572 | 5,523 |
Accumulated depreciation and amortization | (267) | (1,180) |
Real estate, net | $ 1,305 | $ 4,343 |
General - Schedule of Earnings
General - Schedule of Earnings (Loss) from Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenues from rental properties | $ 5 | $ 622 | $ 166 | $ 2,163 |
Impairment charges | (2,760) | (1,985) | (4,574) | (5,018) |
Other operating income (expenses) | 1,039 | (164) | 1,588 | (1,287) |
Loss from operating activities | (1,716) | (1,527) | (2,820) | (4,142) |
Gains on dispositions of real estate | 228 | 2,757 | 352 | 7,127 |
(Loss) earnings from discontinued operations | $ (1,488) | $ 1,230 | $ (2,468) | $ 2,985 |
General - Schedule of Earning22
General - Schedule of Earnings Per Share (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Earnings from continuing operations | $ 8,523 | $ 9,005 | $ 19,985 | $ 23,525 |
Less dividend equivalents attributable to RSUs outstanding | (96) | (89) | (273) | (240) |
Earnings from continuing operations attributable to common shareholders | 8,427 | 8,916 | 19,712 | 23,285 |
(Loss) earnings from discontinued operations | (1,488) | 1,230 | (2,468) | 2,985 |
Less dividend equivalents attributable to RSUs outstanding | (12) | (31) | ||
(Loss) earnings from discontinued operations attributable to common shareholders | (1,488) | 1,218 | (2,468) | 2,954 |
Net earnings attributable to common shareholders used for basic and diluted earnings per share calculation | $ 6,939 | $ 10,134 | $ 17,244 | $ 26,239 |
Basic | 33,422 | 33,417 | 33,420 | 33,406 |
Diluted | 33,422 | 33,417 | 33,420 | 33,406 |
RSUs outstanding at the end of the period | 401 | 333 | 401 | 333 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)PropertyState | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)PropertyState | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Leases [Line Items] | |||||
Number of properties in portfolio | Property | 866 | 866 | |||
Number of states in which our properties are located | State | 23 | 23 | |||
Revenues from rental properties included in continuing operations | $ 29,077 | $ 24,078 | $ 78,471 | $ 72,198 | |
Revenues from rental properties | 23,513 | 19,528 | 64,695 | 57,810 | |
Real Estate Taxes and other municipal charges paid then reimbursed by tenants included in revenues and expenses from continuing operations | 4,237 | 3,743 | 11,095 | 9,860 | |
Rental revenue increase due to revenue recognition adjustments included in continuing operations | 1,327 | $ 807 | 2,681 | $ 4,531 | |
Net investment in direct financing leases | 94,549 | 94,549 | $ 95,764 | ||
Net Investments in direct financing lease, minimum lease payments receivable | 182,424 | 182,424 | 191,491 | ||
Net Investment in direct financing lease, unguaranteed estimated residual value | 13,979 | 13,979 | 13,979 | ||
Net Investment in direct financing lease, deferred income | $ 101,854 | $ 101,854 | $ 109,706 | ||
Third Parties [Member] | |||||
Leases [Line Items] | |||||
Number of properties leased | Property | 102 | 102 | |||
Owned Properties [Member] | |||||
Leases [Line Items] | |||||
Number of properties | Property | 764 | 764 |
Leases - Marketing and the Mast
Leases - Marketing and the Master Lease - Additional Information (Detail) | Nov. 03, 2015USD ($) | Apr. 22, 2015USD ($) | Sep. 30, 2015Property |
Subsequent Event [Member] | |||
Leases [Line Items] | |||
Legal settlements received | $ 10,800,000 | ||
Getty Petroleum Marketing Inc [Member] | |||
Leases [Line Items] | |||
Number of properties previously leased | Property | 415 | ||
Marketing Estate Liquidating Trustee [Member] | |||
Leases [Line Items] | |||
Interim distribution amount | $ 6,800,000 | ||
Marketing Estate Liquidating Trustee [Member] | Settlement Agreement [Member] | |||
Leases [Line Items] | |||
Settlement agreement hearing date | Apr. 22, 2015 | ||
Additional distribution amount | $ 550,000 |
Leases - Leasing Activities - A
Leases - Leasing Activities - Additional Information (Detail) | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2015USD ($)Property | Sep. 30, 2015USD ($)PropertyPortfolios | Sep. 30, 2014USD ($) | |
Leases [Line Items] | |||
Number of new triple net leases entered into during the period | Portfolios | 14 | ||
Number of leased properties with new tenants | Property | 370 | ||
Properties under license agreements | Property | 18 | 18 | |
Maximum lease commitment for capital expenditure | $ 12,235,000 | ||
Asset retirement obligations removed from balance sheet | $ 13,033,000 | ||
Deferred rental revenue | 2,478,000 | 2,478,000 | |
Lease origination costs | 90,000 | 90,000 | $ 60,000 |
USTs [Member] | |||
Leases [Line Items] | |||
Asset retirement obligations removed from balance sheet | 13,033,000 | ||
Net asset retirement cost related to USTs removed from the balance sheet | 10,555,000 | 10,555,000 | |
Deferred rental revenue | $ 2,478,000 | $ 2,478,000 | |
Minimum [Member] | |||
Leases [Line Items] | |||
Unitary triple-net lease agreements initial terms | 15 years | ||
Maximum [Member] | |||
Leases [Line Items] | |||
Unitary triple-net lease agreements initial terms | 20 years | ||
Unitary triple-net lease agreements successive terms | 20 years |
Leases - Major Tenants - Additi
Leases - Major Tenants - Additional Information (Detail) $ in Thousands | Jun. 03, 2015USD ($)OptionsLeaseSimpleInterests | Sep. 30, 2015USD ($)PropertyLeaseTenants | Sep. 30, 2014 |
Leases [Line Items] | |||
Number of significant tenants | Tenants | 3 | ||
Apro, LLC (d/b/a United Oil) [Member] | |||
Leases [Line Items] | |||
Number of leased properties | Property | 77 | ||
Number of unitary leases | 3 | ||
Lease revenue percentage | 7.00% | ||
Number of Triple-Net Unitary Leases | 3 | ||
Lease agreements description | Initial terms of 20 years and options for up to three successive five year renewal options. | ||
Unitary triple-net lease agreements initial terms | 20 years | ||
Unitary triple-net lease agreements successive terms | 5 years | ||
Number of lease renewal options | Options | 3 | ||
Subsidiaries of Chestnut Petroleum Dist. Inc.[Member] | |||
Leases [Line Items] | |||
Number of leased properties | Property | 110 | ||
Number of unitary leases | 2 | ||
Lease revenue percentage | 17.00% | 20.00% | |
Subsidiaries of Global Partners LP (NYSE GLP) [Member] | |||
Leases [Line Items] | |||
Number of leased properties | Property | 152 | ||
Number of unitary leases | 3 | ||
Lease revenue percentage | 21.00% | 10.00% | |
Pacific Convenience and Fuels LLC [Member] | |||
Leases [Line Items] | |||
Purchase price for acquisition | $ | $ 218,300 | ||
Pacific Convenience and Fuels LLC [Member] | Apro, LLC (d/b/a United Oil) [Member] | |||
Leases [Line Items] | |||
Number of fee simple interests acquired in convenience store and retail motor fuel stations from affiliates | SimpleInterests | 77 | ||
Purchase price for acquisition | $ | $ 214,500 |
Leases - NECG Lease Restructuri
Leases - NECG Lease Restructuring - Additional Information (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2013Operator | Sep. 30, 2015USD ($)Property | Dec. 31, 2014USD ($) | Aug. 31, 2013Property | |
Leases [Line Items] | ||||
Number of locations (operators) involved in the proceedings | Operator | 24 | |||
Number of former operators have withdrawn their appeals | Operator | 16 | |||
Number of operators remain in the site during their court appeal | Operator | 8 | |||
Bad debt reserve on accounts receivable | $ 4,489 | $ 4,160 | ||
Reserved deferred rent receivable | $ 6,101 | |||
NECG Holdings Corp [Member] | ||||
Leases [Line Items] | ||||
Number of leased properties removed | Property | 31 | |||
Number of properties previously leased | Property | 84 | |||
Bad debt reserve on accounts receivable | $ 2,035 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Jun. 19, 2014Defendant | May. 31, 2007Defendant | Sep. 30, 2015USD ($)Defendant | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2003Parties |
Loss Contingencies [Line Items] | ||||||
Accrued legal matters | $ 11,380,000 | $ 11,040,000 | ||||
Provisions for litigation losses | 349,000 | $ 130,000 | ||||
New Jersey MTBE Claim Against the Company, Marketing and Lukoil [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amounts sought by the plaintiffs | 88,000,000 | |||||
New Jersey MTBE Claim Against the Company [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amounts sought by the plaintiffs | $ 24,000,000 | |||||
Lower Passaic River [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of potentially responsible parties for Lower Passaic River damages | Parties | 66 | |||||
Parties to perform a remedial investigation and feasibility study | Defendant | 70 | |||||
New Jersey [Member] | MTBE [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of defendants in the MTBE complaint | Defendant | 50 | |||||
Pennsylvania [Member] | MTBE [Member] | Minimum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of defendants in the MTBE complaint | Defendant | 50 |
Credit Agreement and Prudenti29
Credit Agreement and Prudential Loan Agreement - Additional Information (Detail) - USD ($) | Jun. 02, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Credit and Loan Agreement [Line Items] | |||
Borrowings under credit agreement | $ 156,000,000 | $ 25,000,000 | |
Credit agreement initiation date | Jun. 2, 2015 | ||
Senior unsecured revolving credit agreement | $ 225,000,000 | ||
Term loan under credit agreement | 50,000,000 | $ 175,000,000 | 100,000,000 |
Extension of credit agreement | 1 year | ||
Amount of rate increase in case of default | 2.00% | ||
Debt Refinancing [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Senior secured revolving credit agreement | $ 175,000,000 | ||
Credit facility agreement, maturity date | Aug. 31, 2015 | ||
Minimum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Annual commitment fee on undrawn funds | 0.25% | ||
Maximum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Borrowings under credit agreement | $ 106,000,000 | $ 25,000,000 | |
Interest rate | 3.40% | ||
Annual commitment fee on undrawn funds | 0.30% | ||
Maximum [Member] | Debt Refinancing [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Borrowings under credit agreement | $ 25,000,000 | ||
Interest rate | 2.70% | ||
Restated Prudential Note Purchase Agreement [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Borrowings under credit agreement | $ 175,000,000 | ||
Amount of rate increase in case of default | 2.00% | ||
Senior secured note, issuance date | Jun. 2, 2015 | ||
Restated Prudential Note Purchase Agreement [Member] | Series A Note [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Fair value of borrowings outstanding | $ 107,700,000 | ||
Restated Prudential Note Purchase Agreement [Member] | Series B Notes [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Fair value of borrowings outstanding | 77,900,000 | ||
Prudential Loan Agreement [Member] | Series A Note [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Senior secured note, aggregate amount issued | $ 100,000,000 | ||
Senior secured note purchase agreement, maturity date | Feb. 28, 2021 | ||
Interest rate on agreement | 6.00% | ||
Fair value of borrowings outstanding | $ 106,527,000 | ||
Prudential Loan Agreement [Member] | Series B Notes [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Senior secured note, aggregate amount issued | $ 75,000,000 | ||
Senior secured note purchase agreement, maturity date | Jun. 30, 2023 | ||
Interest rate on agreement | 5.35% | ||
Prior Senior Secured Note Purchase Agreement [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Borrowings under credit agreement | $ 100,000,000 | ||
Borrowing under Credit Lines - Revolving Credit Facility [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit facility agreement, maturity date | Jun. 30, 2018 | ||
Borrowings under credit agreement | $ 106,000,000 | ||
Revolving facility under credit agreement | 175,000,000 | ||
Option to increase credit facility | 75,000,000 | ||
Credit facility amount | $ 250,000,000 | ||
Senior secured note purchase agreement, maturity date | Jun. 30, 2018 | ||
Borrowing under Credit Lines - Revolving Credit Facility [Member] | Minimum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 0.95% | ||
Borrowing under Credit Lines - Revolving Credit Facility [Member] | Maximum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 2.25% | ||
Borrowing under Credit Lines - Term Loan [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit facility agreement, maturity date | Jun. 30, 2020 | ||
Borrowings under credit agreement | $ 50,000,000 | ||
Term loan under credit agreement | $ 50,000,000 | ||
Senior secured note purchase agreement, maturity date | Jun. 30, 2020 | ||
Borrowing under Credit Lines - Term Loan [Member] | Minimum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 0.90% | ||
Borrowing under Credit Lines - Term Loan [Member] | Maximum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 2.20% | ||
LIBOR [Member] | Borrowing under Credit Lines - Revolving Credit Facility [Member] | Minimum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 1.95% | ||
LIBOR [Member] | Borrowing under Credit Lines - Revolving Credit Facility [Member] | Maximum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 3.25% | ||
LIBOR [Member] | Borrowing under Credit Lines - Term Loan [Member] | Minimum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 1.90% | ||
LIBOR [Member] | Borrowing under Credit Lines - Term Loan [Member] | Maximum [Member] | |||
Credit and Loan Agreement [Line Items] | |||
Credit agreement margin on borrowing base rate | 3.20% |
Credit Agreement and Prudenti30
Credit Agreement and Prudential Loan Agreement - Schedule of Maturity Date and Amounts Outstanding Under Credit Agreement and Restated Prudential Note Purchase Agreement (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, outstanding amount | $ 156,000 | $ 25,000 |
Borrowing under Credit Lines - Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, maturity date | Jun. 30, 2018 | |
Borrowings under credit agreement, outstanding amount | $ 106,000 | |
Borrowing under Credit Lines - Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, maturity date | Jun. 30, 2020 | |
Borrowings under credit agreement, outstanding amount | $ 50,000 | |
Restated Prudential Note Purchase Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, outstanding amount | $ 175,000 | |
Restated Prudential Note Purchase Agreement [Member] | Series A Note Maturing on February 2021 [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, maturity date | Feb. 28, 2021 | |
Borrowings under credit agreement, outstanding amount | $ 100,000 | |
Restated Prudential Note Purchase Agreement [Member] | Series B Note Maturing on June 2023 [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under credit agreement, maturity date | Jun. 30, 2023 | |
Borrowings under credit agreement, outstanding amount | $ 75,000 |
Environmental Obligations - Add
Environmental Obligations - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Jul. 31, 2012 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Other Commitments [Line Items] | |||||
Pollution legal liability insurance policy duration | 10 years | ||||
Pollution legal liability insurance policy aggregate limit | $ 50,000,000 | ||||
Remediation agreement of lease | We have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and that existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the first ten years of the lease term. | ||||
Environmental remediation obligations | $ 91,252,000 | $ 91,252,000 | $ 91,566,000 | ||
Environmental remediation liability | 91,252,000 | 91,252,000 | 91,566,000 | ||
Accretion expense | 3,519,000 | $ 2,032,000 | |||
The amounts of credits to environmental expenses included in continuing operations and to earnings from operating activities in discontinued operations | 2,035,000 | 423,000 | |||
Increase in carrying value of property | 8,892,000 | 7,801,000 | |||
Non-cash impairment charges | $ 10,598,000 | 4,961,000 | |||
Estimated remaining useful life of underground storage tank for capitalized asset retirement costs | 10 years | ||||
Depreciation and amortization expense for capitalized asset retirement costs | $ 4,646,000 | $ 1,078,000 | |||
Capitalized asset retirement costs | 51,501,000 | 51,501,000 | 59,809,000 | ||
Asset retirement obligations removed from balance sheet | 13,033,000 | ||||
Deferred rental revenue | $ 2,478,000 | $ 2,478,000 | |||
Minimum [Member] | |||||
Other Commitments [Line Items] | |||||
Environmental remediation liability discount range | 4.00% | 4.00% | |||
Environmental remediation liability fair value, expected future net cash flows | 2.00% | ||||
Maximum [Member] | |||||
Other Commitments [Line Items] | |||||
Environmental remediation liability discount range | 7.00% | 7.00% | |||
Environmental remediation liability fair value, expected future net cash flows | 2.75% | ||||
USTs [Member] | |||||
Other Commitments [Line Items] | |||||
Asset retirement obligations removed from balance sheet | $ 13,033,000 | ||||
Net asset cost related to USTs removed from the balance sheet | $ 10,555,000 | 10,555,000 | |||
Deferred rental revenue | 2,478,000 | 2,478,000 | |||
Future Environmental Liabilities [Member] | |||||
Other Commitments [Line Items] | |||||
Environmental remediation obligations | 45,932,000 | 45,932,000 | |||
Environmental remediation liability | 45,932,000 | 45,932,000 | 49,700,000 | ||
Reasonably Estimable Environmental Remediation Obligation [Member] | |||||
Other Commitments [Line Items] | |||||
Environmental remediation liability | $ 45,320,000 | $ 45,320,000 | $ 41,866,000 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Changes in Shareholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Shareholders Equity [Line Items] | ||||
Beginning balance, value | $ 407,024 | |||
Net earnings | $ 7,035 | $ 10,235 | 17,517 | $ 26,510 |
Dividends | (23,000) | |||
Stock-based employee compensation expense, Value | 712 | |||
Ending balance, value | 402,253 | 402,253 | ||
Common Stock [Member] | ||||
Shareholders Equity [Line Items] | ||||
Beginning balance, value | $ 334 | |||
Beginning balance, shares | 33,417,203 | |||
Stock-based employee compensation expense, Shares | 4,599 | |||
Ending balance, value | $ 334 | $ 334 | ||
Ending balance, shares | 33,421,802 | 33,421,802 | ||
Paid-in-Capital [Member] | ||||
Shareholders Equity [Line Items] | ||||
Beginning balance, value | $ 463,314 | |||
Stock-based employee compensation expense, Value | 712 | |||
Ending balance, value | $ 464,026 | 464,026 | ||
Dividends Paid in Excess of Earnings [Member] | ||||
Shareholders Equity [Line Items] | ||||
Beginning balance, value | (56,624) | |||
Net earnings | 17,517 | |||
Dividends | (23,000) | |||
Ending balance, value | $ (62,107) | $ (62,107) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - $ / shares | Mar. 02, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Shareholders Equity [Line Items] | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Preferred stock, shares issued | 0 | 0 | |
2004 Omnibus Incentive Compensation Plan [Member] | Restricted Stock Units [Member] | |||
Shareholders Equity [Line Items] | |||
Restricted stock units, granted | 79,250 |
Property Acquisitions - Additio
Property Acquisitions - Additional Information (Detail) $ in Thousands | Jun. 03, 2015USD ($)LeaseOptionsSimpleInterests | Sep. 30, 2015USD ($)Property |
Business Acquisition [Line Items] | ||
Number of gasoline stations and convenience stores acquired during the period | Property | 79 | |
Maximum [Member] | ||
Business Acquisition [Line Items] | ||
Unitary triple-net lease agreements initial terms | 20 years | |
Unitary triple-net lease agreements successive terms | 20 years | |
Apro, LLC (d/b/a United Oil) [Member] | ||
Business Acquisition [Line Items] | ||
Number of Triple-Net Unitary Leases | Lease | 3 | |
Lease agreements description | Initial terms of 20 years and options for up to three successive five year renewal options. | |
Unitary triple-net lease agreements initial terms | 20 years | |
Unitary triple-net lease agreements successive terms | 5 years | |
Number of lease renewal options | Options | 3 | |
Apro, LLC (d/b/a United Oil) [Member] | Maximum [Member] | ||
Business Acquisition [Line Items] | ||
Number of lease renewal options | Lease | 3 | |
Pacific Convenience and Fuels LLC [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate purchase price of the gasoline stations and convenience stores acquired during the period | $ 218,300 | |
Pacific Convenience and Fuels LLC [Member] | Apro, LLC (d/b/a United Oil) [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate purchase price of the gasoline stations and convenience stores acquired during the period | $ 214,500 | |
Number of fee simple interests acquired in convenience store and retail motor fuel stations from affiliates | SimpleInterests | 77 | |
Land [Member] | Gasoline Stations and Convenience Store Properties [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price allocation, assets acquired | $ 142,357 | |
Buildings and Equipment [Member] | Gasoline Stations and Convenience Store Properties [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price allocation, assets acquired | 75,664 | |
Land Building and Equipment [Member] | Gasoline Stations and Convenience Store Properties [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price allocated to above market leases | 112 | |
Purchase price allocated to below market leases | 19,775 | |
Purchase price allocated to in-place lease and other intangible assets | 16,136 | |
Transaction cost related to acquisition | $ 413 |
Property Acquisitions - Pro For
Property Acquisitions - Pro Forma Condensed Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Combinations [Abstract] | ||||
Revenues from continuing operations | $ 29,987 | $ 29,304 | $ 88,389 | $ 87,710 |
Earnings from continuing operations | $ 8,523 | $ 9,818 | $ 21,820 | $ 25,552 |
Basic and diluted earnings from continuing operations per common share | $ 0.25 | $ 0.29 | $ 0.64 | $ 0.76 |