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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark one)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For quarter ended SEPTEMBER 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 001-13777
GETTY REALTY CORP.
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(Exact name of registrant as specified in its charter)
MARYLAND 11-2412575
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 JERICHO TURNPIKE, SUITE 103, JERICHO, NEW YORK 11753
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(Address of principal executive offices) (Zip code)
(516) 478-5400
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
Registrant had outstanding 21,420,120 shares of Common Stock, par value $.01 per
share, and 2,865,768 shares of Series A Participating Convertible Redeemable
Preferred Stock, par value $.01 per share, as of November 5, 2001.
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GETTY REALTY CORP.
INDEX
Part I. FINANCIAL INFORMATION Page Number
- ------- --------------------- -----------
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2001 and
December 31, 2000 1
Consolidated Statements of Operations for the three and nine
months ended September 30, 2001 and 2000 2
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2001 and 2000 3
Notes to Consolidated Financial Statements 4 - 5
Item 2. Management's Discussion and Analysis of Financial 6 - 9
Condition and Results of Operations
Part II. OTHER INFORMATION
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Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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September 30, December 31,
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Assets: 2001 2000
- -------------------------------------------------------------------------------
(unaudited)
Real Estate:
Land $ 134,840 $ 135,349
Buildings and improvements 176,892 177,688
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311,732 313,037
Less - accumulated depreciation
and amortization 87,277 80,971
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Real estate, net 224,455 232,066
Cash and equivalents 37,477 723
Mortgages and accounts receivable, net 4,730 5,472
Deferred rent receivable 6,291 -
Recoveries from state underground
storage tank funds 11,495 11,957
Prepaid expenses and other assets 5,220 5,507
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Total assets $ 289,668 $ 255,725
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Liabilities and Stockholders' Equity:
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Borrowings under credit lines $ - $ 27,000
Mortgages payable 1,829 22,969
Accounts payable and accrued expenses 13,591 14,629
Dividends payable 10,107 3,178
Environmental remediation costs 22,943 23,371
Deferred income taxes - 36,479
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Total liabilities 48,470 127,626
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Stockholders' equity:
Preferred stock, par value
$.01 per share; authorized
20,000,000 shares for issuance
in series of which 3,000,000
shares are classified as
Series A Participating
Convertible Redeemable
Preferred; issued 2,888,798 at
September 30, 2001 and
December 31, 2000 72,220 72,220
Common stock, par value
$.01 per share; authorized
50,000,000 shares; issued
22,434,581 at September
30, 2001 and 13,567,335 at
December 31, 2000 224 136
Paid-in capital 198,560 67,036
Retained earnings (deficit) (17,094) 1,419
Preferred stock held in
treasury, at cost (23,030
shares at September 30, 2001
and December 31, 2000) (430) (430)
Common stock held in treasury,
at cost (1,019,048 shares at
September 30, 2001 and
December 31, 2000) (12,282) (12,282)
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Total stockholders' equity 241,198 128,099
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Total liabilities and
stockholders' equity $ 289,668 $ 255,725
============= ============
See accompanying notes.
- 1 -
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Three months ended September 30, Nine months ended September 30,
- ------------------------------------------------------------------------------------------------------------------
2001 2000 2001 2000
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Revenues:
Revenues from rental properties $ 16,971 $ 14,639 $ 51,209 $ 44,069
Other income 623 315 1,530 1,056
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17,594 14,954 52,739 45,125
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Rental property expenses 2,881 2,953 8,578 9,091
Environmental expenses 1,953 1,582 5,966 6,375
General and administrative expenses 1,660 954 3,896 2,632
Depreciation and amortization 2,264 2,465 6,997 7,459
Interest expense 243 996 1,885 2,686
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9,001 8,950 27,322 28,243
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Earnings before for income taxes 8,593 6,004 25,417 16,882
(Benefit) provision for income taxes (43,679) 2,641 (36,648) 7,212
-------------------- --------------------
Net earnings 52,272 3,363 62,065 9,670
Preferred stock dividends 13,308 1,270 15,852 3,827
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Net earnings applicable to common stockholders $ 38,964 $ 2,093 $ 46,213 $ 5,843
==================== ====================
Net earnings per common share:
Basic $ 2.11 $ 0.16 $ 3.19 $ 0.45
Diluted $ 2.11 $ 0.16 $ 3.18 $ 0.45
Weighted average common shares outstanding:
Basic 18,430 12,696 14,509 12,987
Diluted 18,437 12,697 14,517 12,988
See accompanying notes.
- 2 -
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Nine months ended September 30,
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2001 2000
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Cash flows from operating activities:
Net earnings $ 62,065 $ 9,670
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 6,997 7,459
Deferred income taxes (36,479) 2,470
Gain on dispositions of real estate (710) (553)
Deferred rent receivable (6,291) --
Changes in assets and liabilities:
Mortgages and accounts receivable 742 500
Recoveries from state underground storage tank funds 462 (1,906)
Prepaid expenses and other assets 287 191
Accounts payable and accrued expenses (1,038) 495
Environmental remediation costs (428) (1,443)
Income taxes payable -- (1,825)
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Net cash provided by operating activities 25,607 15,058
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Cash flows from investing activities:
Capital expenditures (460) (711)
Property acquisitions -- (155)
Proceeds from dispositions of real estate 1,784 1,892
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Net cash provided by investing activities 1,324 1,026
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Cash flows from financing activities:
Borrowings (repayments) under credit lines, net (27,000) 13,000
Repayment of mortgages payable (21,140) (3,964)
Cash dividends paid (73,649) (9,097)
Net proceeds from common stock offering 131,531 --
Stock options, common and treasury stock, net 81 (11,734)
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Net cash provided by (used in) financing activities 9,823 (11,795)
----------------------
Net increase in cash and equivalents 36,754 4,289
Cash and equivalents at beginning of period 723 (4,162)
----------------------
Cash and equivalents at end of period $ 37,477 $ 127
======================
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 2,054 $ 2,838
Income taxes, net 333 4,506
See accompanying notes.
- 3 -
GETTY REALTY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General:
The accompanying consolidated financial statements include the accounts of
Getty Realty Corp. and its wholly-owned subsidiaries (the "Company"). The
consolidated financial statements have been prepared in conformity with
generally accepted accounting principles and include amounts that are based on
management's best estimates and judgments. While all available information has
been considered, actual amounts could differ from those estimates. The
consolidated financial statements are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation. These statements should be read in
conjunction with the consolidated financial statements and related notes which
appear in the Company's Transition Report on Form 10-K for the transition period
February 1, 2000 to December 31, 2000.
The Consolidated Statements of Operations and Cash Flows for 2000 have been
recast to include the three and nine month periods ended September 30, 2000 as a
result of the change in the Company's year-end to December 31 from January 31.
Certain reclassifications have been made in the prior period financial
statements to conform to the current presentation.
2. Revenue recognition:
Rental revenue under the Amended and Restated Master Lease ("Master Lease")
with Getty Petroleum Marketing Inc. ("Marketing"), which became effective
December 9, 2000, is recognized on a straight-line basis over the initial
fifteen-year lease term. The cumulative difference between lease revenue
recognized under this method and contractual lease payment terms is recorded as
deferred rent receivable.
3. Earnings per common share:
Basic earnings per common share is computed by dividing net earnings less
preferred dividends by the weighted average number of common shares outstanding
during the period. Diluted earnings per common share also gives effect to the
potential dilution from the exercise of stock options in the amount of 7,000
shares and 1,000 shares for the quarters ended September 30, 2001 and 2000,
respectively, and 8,000 shares and 1,000 shares for the nine months ended
September 30, 2001 and 2000, respectively.
For the quarters and nine months ended September 30, 2001 and 2000,
conversion of Series A Participating Convertible Redeemable Preferred stock into
common stock utilizing the if-converted method would have been anitdilutive and
therefore conversion was not assumed for the purposes of computing diluted
earnings per common share.
4. Contingency:
On November 2, 2000, the Company entered into the Master Lease, which
became effective upon the acquisition of a controlling interest in Marketing by
a subsidiary of OAO Lukoil. The amendment of the Master Lease and a related
amendment of a lease between two of the Company's subsidiaries was alleged by
Fleet National Bank ("Fleet" or the "Lenders") to have caused a non-monetary
default under a loan agreement between one of those subsidiaries, Power Test
Realty Company Limited Partnership, and Fleet (the "Loan Agreement").
On July 20, 2001, The Chase Manhattan Bank purchased the Lenders' interests
under the Loan Agreement. The Company and Chase restated the then outstanding
loan of approximately $20.0 million to bear interest at the lower of the prime
rate or 2.5% over 30-day LIBOR and to mature on August 31, 2002. As a result,
the non-monetary default alleged by Fleet was cured. On August 1, 2001, the
Company retired the entire outstanding loan with a portion of the net proceeds
of its 8.9 million share common stock offering (see Note 6).
-4-
5. Stockholders' equity:
A summary of the changes in stockholders' equity for the nine months ended
September 30, 2001 is as follows (in thousands, except per share amounts):
Preferred Common
Stock Held Stock Held
Preferred Common Paid-in Retained in Treasury, in Treasury,
Stock Stock Capital Earnings at Cost at Cost Total
- -------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $72,220 $136 $ 67,036 $ 1,419 ($430) ($12,282) $128,099
Net earnings 62,065 62,065
Issuance of common stock 88 131,443 131,531
Stock options exercised 81 81
Cash dividends:
Preferred -- $5.53125 per share (15,852) (15,852)
Common -- $4.8625 per share (64,726) (64,726)
- -------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 2001 $72,220 $224 $198,560 ($17,094) ($430) ($12,282) $241,198
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</Table>
6. Stock offering:
On August 1, 2001, the Company closed a public offering of 8,855,000 shares
of its common stock (including exercise of the underwriters' over-allotment
option) at a price of $16.00 per share. A portion of the $131.5 million net
proceeds of the offering was used to pay the $64.1 million special one-time
"earnings and profits" cash distribution to stockholders. The special
distribution was paid on August 2, 2001 to holders of record of Getty common
stock and Series A Preferred stock as of the close of business on July 25, 2001.
Common stockholders received $4.15 per share and Series A Preferred stockholders
received $4.20 per share. Purchasers of Getty common stock in the public
offering did not receive any portion of the special distribution on any of the
shares of common stock they purchased. The Company used $17.5 million of the net
proceeds from the offering to repay all amounts then outstanding under the lines
of credit and $19.9 million to retire the loan with Chase Manhattan Bank (which
had been previously purchased from Fleet National Bank). The remaining $30.0
million of the net proceeds will be used for general corporate purposes.
7. Income taxes:
At a special meeting of stockholders held on August 1, 2001, the Company's
stockholders approved a charter amendment containing ownership limitations
typical for real estate investment trusts (REITs). The Company elected to be
taxed as a REIT under the federal income tax laws beginning with the year ending
December 31, 2001. As a REIT, the Company will be required, among other tests,
to distribute at least 90% of its taxable income to stockholders each year and
will be taxed on the portion of taxable income not distributed to stockholders.
It is the Company's intention to distribute 100% of its taxable income each
year. While the REIT election is effective for tax purposes as of the beginning
of the year, the ability to make such election was contingent upon the
completion of the offering to finance the required distribution of "earnings and
profits". Accordingly, the effects of the change in tax status from a C-corp to
a REIT were reflected in the current quarter and the Company recorded a
nonrecurring tax benefit to reverse the tax provision recorded for the six
months ended June 30, 2001 of $7,031,000 and other accrued income tax
liabilities that it would no longer be required to pay as a REIT.
-5-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
We are a real estate company specializing in the ownership and leasing of
service stations, convenience stores and petroleum marketing terminals. We lease
most of our properties on a long-term net basis to Getty Petroleum Marketing
Inc. ("Marketing"), which was spun-off to our stockholders on March 21, 1997 and
acquired by a subsidiary of OAO Lukoil, Russia's largest vertically integrated
oil company, in December 2000.
On December 12, 2000, our Board of Directors approved a change in our
fiscal year end to December 31 from January 31. We elected to be taxed as a REIT
under the federal income tax laws beginning with the year ending December 31,
2001. As a REIT, we will be required, among other tests, to distribute at least
90% of our taxable income to stockholders each year.
Our financial results largely depend on rental income from Marketing and
other tenants and are materially dependent upon the ability of Marketing to meet
its obligations under the master lease entered into on February 1, 1997 and
amended and restated effective December 9, 2000 (the "Master Lease"). Based on
the information currently available to us, we do not anticipate that Marketing
will have difficulty in making required rental payments under the Master Lease
in the foreseeable future.
During the current quarter, the Company closed a public offering of
8,855,000 shares of its common stock. A portion of the $131.5 million net
proceeds of the offering was used to pay a $64.1 million special one-time
"earnings and profits" cash distribution to preferred and common stockholders
and $37.4 million was used to repay substantially all of the Company's mortgage
debt and outstanding lines of credit. In addition, the Company's stockholders
approved a charter amendment to include ownership limitations typical for real
estate investment trusts (REITs) and accordingly, the Company elected to be
taxed as a REIT under the federal income tax laws beginning with the year ending
December 31, 2001. As a result, during the current quarter the Company recorded
a nonrecurring tax benefit to reverse accrued income tax liabilities that it
would no longer be required to pay as a REIT.
The financial results for 2000 have been recast to include the three and
nine month periods ended September 30, 2000 as a result of the change in our
year-end to December 31 from January 31.
Results of Operations - Quarter ended September 30, 2001 compared with Quarter
ended September 30, 2000
Revenues from rental properties for the quarter ended September 30, 2001
were $17.0 million, compared to $14.6 million for the quarter ended September
30, 2000. Approximately $16.4 million and $14.0 million of these rentals for the
quarters ended September 30, 2001 and 2000, respectively, were from properties
leased to Marketing under the Master Lease. The increase in rental income is
primarily due to $2.1 million of deferred rent receivable recognized in the
current period, as required by generally accepted accounting principles, related
to the 2% future annual rent increases due from Marketing under the terms of the
Master Lease. The aggregate minimum rent due over the initial 15-year term of
the Master Lease is recognized on a straight-line basis rather than when due.
Previously, rent increases were based on the Consumer Price Index and would have
been recognized when such increases were due. Rental income from Marketing also
increased during the current quarter by $0.3 million due to a 4% rent increase
effective December 9, 2000, net of a rent reduction due to a decrease in the
number of properties leased compared to the prior period.
Other income was $0.6 million for the quarter ended September 30, 2001 as
compared with $0.3 million for the quarter ended September 30, 2000. The quarter
ended September 30, 2001 included $0.2 million of higher interest income from
short term investments resulting from investing the $30.0 million balance of the
net proceeds of the common stock offering.
Rental property expenses, which are principally comprised of rent expense
and real estate taxes, were $2.9 million for the quarter ended September 30,
2001 compared to $3.0 million for the quarter ended September 30, 2000. The
decrease was due to a reduction in rent paid for leased properties due to
termination of leases with third party landlords.
-6-
Environmental expenses for the quarter ended September 30, 2001 were $2.0
million as compared with $1.6 million for the quarter ended September 30, 2000.
The current quarter included a change in estimated remediation costs of $1.6
million as compared to $1.5 million during the prior year quarter. These charges
are the result of changes in estimated remediation costs associated with
contamination discovered at sites where we retain responsibility for
environmental remediation and revisions to estimates at other sites where
remediation is ongoing. As of September 30, 2001, we had accrued $22.9 million
as management's best estimate for probable and reasonably estimable
environmental remediation costs and had recorded $11.5 million as management's
best estimate for recoveries from state underground storage tank remediation
funds related to environmental obligations and liabilities. Such accruals are
reviewed on a regular basis and any changes will be reflected in our financial
statements as they become known.
General and administrative expenses for the quarter ended September 30,
2001 were $1.7 million, compared to $1.0 million for the quarter ended September
30, 2000. The increase is attributable to nonrecurring expenses relating to the
amendment of the Company's charter and debt repayment as well as higher legal
fees and increased employee related expenses, partially offset by reduced
service fees. Such service fees for the quarters ended September 30, 2001 and
2000 amounted to $30,000 and $158,000, respectively, for certain administrative
services and technical services performed under a services agreement.
Substantially all of these services were discontinued as of April 1, 2001.
Depreciation and amortization was $2.3 million and $2.5 million,
respectively, for the quarters ended September 30, 2001 and 2000. The decrease
was primarily the result of assets becoming fully depreciated and real estate
dispositions.
Interest expense for the three months ended September 30, 2001 was $0.2
million as compared with $1.0 million for the quarter ended September 30, 2000.
Interest expense decreased from the comparable prior year period due to lower
average borrowings outstanding and the repayment of substantially all of the
Company's mortgage debt and outstanding lines of credit during the quarter.
Income taxes was a benefit of $43.7 million for the quarter ended September
30, 2001 compared to a provision of $2.6 million for the prior three month
period. The benefit was a result of the Company's election to be taxed as a REIT
under the federal income tax laws beginning with the year ending December 31,
2001 and the reversal in the current quarter of accrued income tax liabilities
that it would no longer be required to pay as a REIT.
Net earnings for the current quarter were $52.3 million, or $2.11 per
diluted common share, as compared with $3.4 million, or $.16 per diluted common
share, for the quarter ended September 30, 2000. Earnings before income taxes
for the current quarter were $8.6 million as compared with $6.0 million for the
quarter ended September 30, 2000.
Results of Operations - Nine Months ended September 30, 2001 compared with Nine
Months ended September 30, 2000
Revenues from rental properties for the nine months ended September 30,
2001 were $51.2 million as compared with $44.1 million for the comparable prior
year period. Rentals from properties leased to Marketing under the Master Lease
for the nine months ended September 30, 2001 were $49.3 million as compared with
$42.1 million for the prior year period. The increase in rental income is
primarily due to $6.3 million of deferred rent receivable accrued in the current
year. Rental income from Marketing also increased during the current period by
$0.9 million due to a 4% rent increase effective December 9, 2000, net of a rent
reduction due to a decrease in the number of properties leased compared to the
prior period.
Other income was $1.5 million for the nine months ended September 30, 2001
as compared with $1.1 million for the nine months ended September 30, 2000. The
nine month period ended September 30, 2001 included $0.2 million of higher gains
on real estate dispositions and $0.2 million of interest income on short term
investments.
Rental property expenses were $8.6 million for the nine months ended
September 30, 2001, compared to $9.1 million for the comparable prior year
period. The decrease was due to a reduction in rent paid for leased properties
due to
- 7 -
termination of leases with third party landlords and real estate tax refunds
received in the nine months ended September 30, 2001.
Environmental expenses for the nine months ended September 30, 2001 were
$6.0 million which decreased by $0.4 million from the prior year period. The
decrease was due to reduced changes in estimated remediation costs associated
with contamination discovered at sites where we retain responsibility for
environmental remediation and revisions to estimates at other sites where
remediation is ongoing of $0.3 million for the nine month period, partially
offset by fees paid for environmental management services. The prior nine month
period also included $0.7 million of higher charges related to environmental
litigation.
General and administrative expenses were $3.9 million for the nine months
ended September 30, 2001 as compared with $2.6 million for the nine months ended
September 30, 2000. The increase of $1.3 million was primarily due to
nonrecurring expenses relating to the amendment of the Company's charter and
debt repayment as well as higher legal fees and increased employee related
expenses, partially offset by reduced service fees. The service fees for the
nine months ended September 30, 2001 and 2000 are $263,000 and $476,000,
respectively, for certain administrative and technical services performed under
a services agreement. Substantially all of these services were discontinued as
of April 1, 2001.
Depreciation and amortization was $7.0 million for the nine months ended
September 30, 2001, a decrease of $0.5 million as compared with the nine months
ended September 30, 2000, due to assets becoming fully depreciated and real
estate dispositions.
Interest expense for the nine months ended September 30, 2001 was $1.9
million as compared with $2.7 million for the nine months ended September 30,
2000. Interest expense decreased from the comparable prior year period due to
lower average borrowings outstanding and the repayment of substantially all of
the Company's mortgage debt and outstanding lines of credit in the third quarter
of 2001.
Income taxes was a benefit of $36.6 million for the nine months ended
September 30, 2001 compared to a provision of $7.2 million for the prior nine
month period. The benefit was a result of the Company's election to be taxed as
a REIT under the federal income tax laws beginning with the year ending December
31, 2001 and the reversal in the current period of accrued income tax
liabilities that it would no longer be required to pay as a REIT.
Net earnings for the nine months ended September 30, 2001 were $62.1
million, or $3.18 per diluted common share, as compared with $9.7 million, or
$.45 per diluted common share, for the nine months ended September 30, 2000.
Earnings before income taxes for the current period were $25.4 million as
compared with $16.9 million for the period ended September 30, 2000.
Liquidity and Capital Resources
Our principal sources of liquidity are available cash and equivalents, the
cash flows from our business and a short-term uncommitted line of credit with a
bank. Management believes that cash requirements for our business, including
capital expenditures and debt service, can be met by cash flows from operations,
available cash and equivalents and the credit line. As of September 30, 2001, we
had a line of credit amounting to $25.0 million, of which $3.3 million was
utilized for outstanding letters of credit. Borrowings under the line of credit
are unsecured and bear interest at the prime rate or, at our option, LIBOR plus
1.25%. The line of credit is subject to renewal at the discretion of the bank.
Capital expenditures for the nine months ended September 30, 2001 were $0.5
million.
During the nine months ended September 30, 2001, the Company declared
quarterly preferred stock dividends aggregating $1.33125 per share and quarterly
cash common stock dividends aggregating $.7125 per share. In addition, a special
distribution was paid on August 2, 2001 to holders of Getty common stock and
Series A Preferred stock. Common stockholders received $4.15 per share and
Series A Preferred stockholders received $4.20 per share. During the nine months
ended September 30, 2000, the Company declared quarterly preferred stock
dividends aggregating $1.33125 per
- 8 -
share and quarterly cash common stock dividends aggregating $.45 per share.
Dividends aggregated $80.6 million and $9.6 million for the nine months ended
September 30, 2001 and 2000, respectively.
On August 1, 2000, we closed a public offering of 8,855,000 shares of our
common stock (including exercise of the underwriters' over-allotment option) at
a price of $16.00 per share. We used a portion of the $131.5 million net
proceeds of the offering to pay the $64.1 million special one-time cash
distribution to stockholders. The special distribution was paid on August 2,
2001 to holders of record of Getty common stock and Series A Preferred stock as
of the close of business on July 25, 2001. Purchasers of Getty common stock in
the public offering did not receive any portion of the special distribution on
any of the shares of common stock they purchased. We used $17.5 million of the
net proceeds from the offering to repay all amounts then outstanding under our
lines of credit and $19.9 million to retire a loan from Chase Manhattan Bank
(which had been previously purchased from Fleet National Bank). The remaining
$30.0 million of the net proceeds will be used for general corporate purposes.
At a special meeting of stockholders held on August 1, 2001, our
stockholders approved a charter amendment containing ownership limitations
typical for REITs. We elected to be taxed as a REIT under the federal income tax
laws beginning with the year ending December 31, 2001. As a REIT, we will be
required, among other tests, to distribute at least 90% of our taxable income to
stockholders each year. We intend to pay common stock dividends of $0.4125 per
quarter ($1.65 per share on an annual basis), and commenced doing so with the
quarterly dividends declared in September 2001. We presently intend to pay
quarterly dividends of $0.44375 per share of preferred stock ($1.775 per share
on an annual basis) until dividends declared per share of common stock in any
calendar year exceed $1.5691, at which time preferred stockholders will
participate in the common stock dividends declared for the calendar year on an
as-converted basis. Payment of dividends is subject to market conditions, our
financial condition, the distribution preferences of our preferred stock and
other factors, and therefore cannot be assured.
Although we expect that the existing sources of liquidity will be
sufficient to meet our expected business and debt service requirements, we may
be required to obtain additional sources of capital in the future, which we
believe are available.
Special Factors Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. When we use the words "believes", "expects",
"plans", "estimates" and similar expressions, we intend to identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance and achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, but are not limited to: risks
associated with owning and leasing real estate generally; dependence on
Marketing as a tenant and on rentals from companies engaged in the petroleum
marketing and convenience store businesses; competition for locations and
tenants; the effects of regulation; our expectations as to the cost of
completing environmental remediation; and the impact of our electing to be taxed
as a REIT, including subsequent failure to qualify as a REIT and future
dependence on external sources of capital.
As a result of these and other factors, we may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect our business, financial condition,
operating results, ability to pay dividends at expected levels, and stock
prices. An investment in our stock involves various risks, including those
mentioned above and elsewhere in this report and those that are detailed from
time to time in filings with the Securities and Exchange Commission.
You should not place undue reliance on forward-looking statements, which
reflect our view only as of the date hereof. We undertake no obligation to
publicly release revisions to these forward-looking statements that reflect
future events or circumstances or reflect the occurrence of unanticipated
events.
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Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The information set forth in Item 4 of the registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2001 is
incorporated by reference herein.
Item 5. Other Information.
Proposals of security holders intended to be presented at our next
annual meeting, currently scheduled for May 16, 2002, must be
received no earlier than February 15, 2002 and no later than March
15, 2002 in accordance with our bylaws. Stockholder proposals to be
considered for inclusion in our proxy statement for such meeting must
be received by December 28, 2001.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
The exhibits filed with the registrants Quarterly Report on Form 10-Q
for the quarter ended June 30, 2001 are incorporated by reference
herein.
(b) Reports filed on Form 8-K:
The filings listed in Item 6(b) of the registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2001 are incorporated by
reference herein.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GETTY REALTY CORP.
------------------
(Registrant)
Dated: November 13, 2001 BY: /s/ Thomas J. Stirnweis
----------------------------------
(Signature)
THOMAS J. STIRNWEIS
Corporate Controller and
Treasurer
(Principal Financial and
Accounting Officer)
Dated: November 13, 2001 BY: /s/ Leo Liebowitz
----------------------------------
(Signature)
LEO LIEBOWITZ
President and Chief Executive
Officer
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