EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER
ENDED MARCH 31, 2003
JERICHO, NY, MAY 12, 2003 --- Getty Realty Corp. (NYSE-GTY) today
reported the Company's financial results for the quarter ended March 31, 2003.
Net earnings before cumulative effect of accounting change for the
quarter ended March 31, 2003 were $9.1 million as compared with $9.3 million for
the comparable prior year period. Net earnings for the quarter ended March 31,
2003, which were $8.6 million as compared with $9.3 million for the comparable
prior year period, decreased by $0.7 million principally due to the one-time
cumulative effect of an accounting change of $0.6 million. Diluted earnings per
common share for the quarter ended March 31, 2003 were $.34, as compared with
$.37 for the comparable prior year period.
Funds from operations ("FFO") for the quarter ended March 31, 2003 were
$9.8 million, or $.45 per diluted common share, which is comparable to $10.0
million, or $.45 per diluted common share, for the quarter ended March 31, 2002.
Adjusted funds from operations ("AFFO") for the quarter ended March 31, 2003
were $8.4 million which is comparable to $8.3 million for the quarter ended
March 31, 2002. Funds from operations ("FFO") is generally considered to be an
appropriate supplemental non-GAAP measure of the performance of real estate
investment trusts. FFO is defined as net earnings applicable to common
shareholders before depreciation and amortization, gains or losses on sales of
real estate, discontinued operations, extraordinary items and cumulative effect
of accounting change. AFFO is a supplemental non-GAAP measure that we define as
FFO less straight-line rent. AFFO is a meaningful supplemental measure of
performance due to the significant impact of straight-line rent accounting on
our net earnings and FFO. Neither FFO nor AFFO represents cash generated from
operating activities in accordance with generally accepted accounting principles
and therefore should not be considered an alternative for net income or as a
measure of liquidity. A reconciliation of net earnings to FFO and AFFO is
included in the financial tables at the end of this release.
Revenues from rental properties for the quarter ended March 31, 2003
were $16.7 million, which is comparable to $16.9 million for the quarter ended
March 31, 2002. Rental income received was $15.3 million for the quarter ended
March 31, 2003, which is comparable to $15.2 for the quarter ended March 31,
2002. Revenues from rental properties include $1.4 million and $1.7 million of
deferred rental revenue accrued in the current and prior period, respectively,
due to recognition of rental revenue on a straight-line basis. Deferred rental
revenue is included in net earnings and FFO but is excluded from AFFO as
discussed above.
General and administrative expenses for the quarter ended March 31,
2003 were $1.3 million which increased by $0.2 million compared to the quarter
ended March 31, 2002 primarily due to higher legal fees.
Environmental expenses, net of estimated recoveries for the quarter
ended March 31, 2003 were $1.5 million which is comparable to $1.6 million for
the quarter ended March 31, 2002. Environmental expenses for the quarter ended
March 31, 2003 include $1.0 million for the net change in estimated
environmental costs, a $0.4 million decrease from the prior period. The decrease
in the change in estimated environmental costs was partially offset by accretion
expense of $0.2 million recorded in the current quarter due to the increase in
present value resulting from the passage of time of the net environmental
liability recorded as of January 1, 2003.
Due to the adoption of Statement of Financial Standard No. 143
effective January 1, 2003, accrued environmental remediation costs and the
related recoveries from state underground storage tank funds were adjusted to
their estimated fair value resulting in a one-time cumulative effect of change
in accounting charge of $0.6 million. Environmental liabilities and the related
assets are currently measured based on their expected future cash flows which
have been adjusted for inflation and discounted to present value. The net
environmental liability was subsequently increased by a portion of the discount
initially recognized at January 1, 2003 and, as discussed above, accretion
expense was included in environmental expenses during the quarter ended March
31, 2003.
Leo Liebowitz, President and CEO stated, "I am pleased that the
Company's net earnings and funds from operations for the quarter ended March 31,
2003 remain on target with our expectations. As announced last week, we
completed the acquisition of 41 gas station / convenience stores we previously
leased in New England for approximately $13.0 million in cash. The purchase will
result in the elimination of over $1.3 million of current annual rent expense
and the elimination of future rent escalations, which will have a positive
impact on our cash flow and funds from operations."
Getty Realty's First Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, May 13, 2003 at 9:00 a.m. Eastern Time. To participate in the
conference call, please dial 1-913-981-5548 five to ten minutes before the
scheduled start time and reference pass code 602438. If you cannot participate
in the live event, a replay will be available beginning immediately after the
end of the call though midnight, May 16, 2003. To access the replay, please dial
(719) 457-0820 and reference passcode 602438.
Getty Realty Corp. is a real estate investment trust specializing in
service stations, convenience stores and petroleum marketing terminals. The
Company owns and leases approximately 1,100 properties in the Eastern United
States.
CERTAIN STATEMENTS IN THIS NEWS RELEASE MAY CONSTITUTE "FORWARD LOOKING
STATEMENTS" WITHIN THE MEANING OF PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. WHEN USED HEREIN, THE WORDS "BELIEVES", "EXPECTS", "PLANS", "PROJECTS",
"ESTIMATES" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE
AND ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS.
-more-
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
- --------------------------------------------------------------------------------
Three months ended March 31,
- --------------------------------------------------------------------------------
2003 2002
- --------------------------------------------------------------------------------
Revenues:
Revenues from rental properties $ 16,677 $ 16,877
Other income, net 354 560
--------------------------
Total revenues 17,031 17,437
--------------------------
Expenses:
Rental property expenses 2,912 3,105
Environmental expenses, net 1,547 1,649
General and administrative expenses 1,293 1,078
Depreciation expense 2,139 2,314
Interest expense 33 33
--------------------------
Total expenses 7,924 8,179
--------------------------
Net earnings before cumulative effect of accounting
change 9,107 9,258
Cumulative effect of accounting change (550) -
--------------------------
Net earnings 8,557 9,258
Preferred stock dividends 1,272 1,272
--------------------------
Net earnings applicable to common
shareholders $ 7,285 $ 7,986
==========================
Net earnings per common share:
Basic $.34 $.37
Diluted $.34 $.37
Weighted average common shares outstanding:
Basic 21,442 21,425
Diluted 21,456 21,435
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
- ------------------------------------------------------------------------------------------------------
March 31, December 31,
- ------------------------------------------------------------------------------------------------------
Assets: 2003 2002
- ------------------------------------------------------------------------------------------------------
Real Estate:
Land $ 135,719 $ 135,372
Buildings and improvements 172,573 172,682
------------- -------------
308,292 308,054
Less - accumulated depreciation (95,689) (93,986)
------------- -------------
Real estate, net 212,603 214,068
Cash and equivalents 32,948 33,726
Deferred rent receivable 16,524 15,116
Recoveries from state underground storage tank funds, net 12,988 13,396
Mortgages and accounts receivable, net 4,678 5,193
Prepaid expenses and other assets 924 992
------------- -------------
Total assets $ 280,665 $ 282,491
============= =============
- ------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
- ------------------------------------------------------------------------------------------------------
Mortgages payable $ 905 $ 923
Dividends payable 10,117 10,379
Accounts payable and accrued expenses 9,285 9,839
Environmental remediation costs 28,491 27,924
------------- -------------
Total liabilities 48,798 49,065
------------- -------------
Shareholders' equity:
Preferred share, 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 2,865,768
at March 31, 2003 and December 31, 2002 71,644 71,644
Common share, par value $.01 per share; authorized
50,000,000 shares; issued 21,442,801 at March 31, 2003
and 21,442,299 at December 31, 2002 214 214
Paid-in capital 186,665 186,664
Dividends paid in excess of earnings (26,656) (25,096)
------------- -------------
Total shareholders' equity 231,867 233,426
------------- -------------
Total liabilities and shareholders' equity $ 280,665 $ 282,491
============= =============
GETTY REALTY CORP. AND SUBSIDIARIES
RECONCILIATION OF NET EARNINGS
TO FUNDS FROM OPERATIONS AND ADJUSTED
FUNDS FROM OPERATIONS
(in thousands, except per share amounts)
(unaudited)
- ----------------------------------------------------------------------------------------
Three months ended March 31,
- ----------------------------------------------------------------------------------------
2003 2002
- ----------------------------------------------------------------------------------------
Net earnings $8,557 $9,258
Preferred stock dividends (1,272) (1,272)
---------------------------
Net earnings applicable to common 7,285 7,986
shareholders
Depreciation expense 2,139 2,314
Gains on sales of real estate (126) (346)
Cumulative effect of accounting change 550 -
---------------------------
Funds from operations 9,848 9,954
Straight-line rent (1,408) (1,689)
---------------------------
Adjusted funds from operations $8,440 $8,265
===========================
Diluted funds from operations per common
share (a) $.45 $.45
Diluted weighted average number of common shares outstanding:
Used to calculate net earnings per share 21,456 21,435
Assumed conversion of preferred shares 3,242 3,242
---------------------------
Used to calculate funds from operations per share 24,698 24,677
===========================
(a) Diluted funds from operations per common share is computed by dividing funds
from operations by the weighted average number of common share equivalents
outstanding during the period and gives effect, for the quarters ended March 31,
2003 and 2002, to the potential dilution from the assumed conversion of Series A
Participating Convertible Redeemable Preferred stock into common stock utilizing
the if-converted method. The if-converted method adds back the preferred stock
dividends of $1,272 to funds from operations, which equates to $11,120 and
$11,226 for the quarters ended March 31, 2003 and 2002, respectively, which sums
are then divided by the diluted weighted average number of common share
equivalents outstanding.
FUNDS FROM OPERATIONS ("FFO") IS GENERALLY CONSIDERED TO BE AN
APPROPRIATE SUPPLEMENTAL NON-GAAP MEASURE OF THE PERFORMANCE OF REAL ESTATE
INVESTMENT TRUSTS. FFO IS DEFINED AS NET EARNINGS APPLICABLE TO COMMON
SHAREHOLDERS BEFORE DEPRECIATION AND AMORTIZATION, GAINS OR LOSSES ON SALES OF
REAL ESTATE, DISCONTINUED OPERATIONS, EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE. ADJUSTED FUNDS FROM OPERATIONS ("AFFO") IS A SUPPLEMENTAL
NON-GAAP MEASURE AND WE DEFINE AFFO AS FFO LESS STRAIGHT-LINE RENT. AFFO IS A
MEANINGFUL SUPPLEMENTAL MEASURE OF PERFORMANCE DUE TO THE SIGNIFICANT IMPACT OF
STRAIGHT-LINE RENT ON OUR NET EARNINGS AND FFO. NEITHER FFO NOR AFFO REPRESENTS
CASH GENERATED FROM OPERATING ACTIVITIES IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND THEREFORE SHOULD NOT BE CONSIDERED AN ALTERNATIVE FOR
NET INCOME OR AS A MEASURE OF LIQUIDITY.
Contact: Thomas J. Stirnweis
(516) 478-5403
-30-