EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER
AND SIX MONTHS ENDED JUNE 30, 2003
JERICHO, NY, AUGUST 11, 2003 --- Getty Realty Corp. (NYSE-GTY) today
reported the Company's financial results for the quarter and six months ended
June 30, 2003.
Net earnings for the quarter and six months ended June 30, 2003, were
$9.4 million and $18.0 million, respectively, as compared with $9.3 million and
$18.6 million for the comparable prior year periods. Net earnings for the six
months ended June 30, 2003 was negatively affected by the one-time cumulative
effect of an accounting change of $0.6 million recorded in the first quarter of
2003. Diluted earnings per common share for the quarter and six months ended
June 30, 2003 were $.38 and $.72, respectively, as compared with $.37 and $.75
for the comparable prior year periods.
Funds from operations ("FFO") for the quarter and six months ended June
30, 2003 were $10.2 million and $20.0 million, respectively, compared with $9.9
million and $19.8 million for the comparable prior year periods. FFO per diluted
common share for the quarter and six months ended June 30, 2003 were $.46 and
$.91, respectively, as compared with $.45 and $.91 for the comparable prior year
periods. Adjusted funds from operations ("AFFO") for the quarter and six months
ended June 30, 2003 were $8.8 million and $17.2 million, respectively, as
compared with $8.2 million and $16.5 million for the comparable prior year
periods. FFO and AFFO are generally considered to be appropriate supplemental
non-GAAP measures of the performance of real estate investment trusts and are
defined and reconciled to net earnings in the financial tables at the end of
this release.
Revenues from rental properties for the quarter and six months ended
June 30, 2003 were $16.7 million and $33.3 million, respectively, as compared to
$16.8 million and $33.7 million for the comparable prior year periods. Rental
income received for the quarter and six months ended June 30, 2003 was $15.3
million and $30.5 million, respectively, as compared with $15.1 million and
$30.3 million for the comparable prior year periods. Revenues include deferred
rental revenue accrued due to recognition of rental revenue on a straight-line
basis of $1.4 million and $2.8 million for the quarter and six months ended June
30, 2003, respectively, and $1.7 million and $3.4 million for the comparable
prior year periods. Deferred rental revenue is included in net earnings and FFO
but is excluded from AFFO.
Rental property expenses for the quarter and six months ended June 30,
2003 were $2.7 million and $5.6 million, respectively, as compared to $3.1
million and $6.2 million for the comparable prior year periods. The decrease was
primarily due to a reduction in rent expense as a result of the exercise of
lease purchase options, including the purchase of 41 properties in May 2003.
Environmental expenses, net of estimated recoveries for the quarter and
six months ended June 30, 2003 were $2.2 million and $3.7 million, respectively,
as compared to $1.7 million and $3.3 million for the comparable prior year
periods. Environmental expenses include a net change in estimated environmental
costs of $1.1 million and $2.0 million, respectively, for the quarter
and six months ended June 30, 2003, and $1.4 million and $2.8 million for the
comparable prior year periods. The decrease in the change in estimated
environmental costs was partially offset by accretion expense of $0.2 million
and $0.5 million recorded for the quarter and six months ended June 30, 2003,
respectively, due to the increase in present value resulting from the passage of
time of the net environmental liability recorded as of January 1, 2003. In
addition, the increase in environmental expenses resulted primarily from
approximately $0.6 million of higher legal fees and environmental litigation
expenses recorded during the quarter ended June 30, 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, recorded in the first quarter of 2003.
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.
General and administrative expenses for the quarter and six months
ended June 30, 2003 were $0.6 million and $1.9 million, respectively, as
compared to $1.2 million and $2.3 million for the comparable prior year periods.
The decrease in general and administrative expenses primarily resulted from a
$0.5 million reduction in insurance loss reserves, recorded in the quarter ended
June 30, 2003, that were established under the company's self-funded insurance
program that was terminated in 1997.
Getty Realty's Second Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, August 12, 2003 at 9:00 a.m. Eastern Time. To participate in
the conference call, please dial 1-719-457-2600 five to ten minutes before the
scheduled start time and reference pass code 139944. If you cannot participate
in the live event, a replay will be available beginning immediately after the
end of the call though midnight, August 15, 2003. To access the replay, please
dial 1-719-457-0820 and reference passcode 139944.
Getty Realty Corp. is a real estate investment trust specializing in
the ownership and leasing of retail motor fuel and convenience store properties
as well as petroleum distribution 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 June 30, Six months ended June 30,
- --------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------------
Revenues:
Revenues from rental properties $ 16,672 $ 16,802 $ 33,349 $ 33,679
Other income, net 409 792 763 1,352
-------- -------- -------- --------
Total revenues 17,081 17,594 34,112 35,031
-------- -------- -------- --------
Expenses:
Rental property expenses 2,672 3,061 5,584 6,166
Environmental expenses, net 2,166 1,657 3,713 3,306
General and administrative expenses 607 1,211 1,900 2,289
Depreciation expense 2,172 2,327 4,311 4,641
Interest expense 33 32 66 65
-------- -------- -------- --------
Total expenses 7,650 8,288 15,574 16,467
-------- -------- -------- --------
Net earnings before cumulative effect of 9,431 9,306 18,538 18,564
accounting change
Cumulative effect of accounting change - - (550) -
-------- -------- -------- --------
Net earnings 9,431 9,306 17,988 18,564
Preferred stock dividends 1,253 1,272 2,525 2,544
-------- -------- -------- --------
Net earnings applicable to common shareholders $ 8,178 $ 8,034 $ 15,463 $ 16,020
======== ======== ======== ========
Net earnings per common share:
Basic $ .38 $ .37 $ .72 $ .75
Diluted $ .38 $ .37 $ .72 $ .75
Weighted average common shares outstanding:
Basic 21,498 21,434 21,470 21,429
Diluted 21,508 21,443 21,482 21,439
Dividends declared per share:
Preferred $ .44375 $ .44375 $ .88750 $ .88750
Common $ .41250 $ .41250 $ .82500 $ .82500
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
- ----------------------------------------------------------------------------------------------------------------
June 30, December 31,
- ----------------------------------------------------------------------------------------------------------------
Assets: 2003 2002
- ----------------------------------------------------------------------------------------------------------------
Real Estate:
Land $ 143,869 $ 135,372
Buildings and improvements 176,824 172,682
--------- ---------
320,693 308,054
Less - accumulated depreciation (97,726) (93,986)
--------- ---------
Real estate, net 222,967 214,068
Cash and equivalents 21,886 33,726
Deferred rent receivable 17,932 15,116
Recoveries from state underground storage tank funds, net 12,122 13,396
Mortgages and accounts receivable, net 3,870 5,193
Prepaid expenses and other assets 642 992
--------- ---------
Total assets $ 279,419 $ 282,491
========= =========
- -------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
- -------------------------------------------------------------------------------------------------------------
Mortgages payable $ 886 $ 923
Dividends payable 10,127 10,379
Accounts payable and accrued expenses 9,332 9,839
Environmental remediation costs 27,619 27,924
--------- ---------
Total liabilities 47,964 49,065
--------- ---------
Shareholders' 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 2,822,976 at
June 30, 2003 and 2,865,768 at December 31, 2002 70,574 71,644
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 21,512,795 at June 30, 2003
and 21,442,299 at December 31, 2002 215 214
Paid-in capital 188,018 186,664
Dividends paid in excess of earnings (27,352) (25,096)
--------- ---------
Total shareholders' equity 231,455 233,426
--------- ---------
Total liabilities and shareholders' equity $ 279,419 $ 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 June 30, Six months ended June 30,
- ----------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------
Net earnings $ 9,431 $ 9,306 $ 17,988 $ 18,564
Preferred stock dividends (1,253) (1,272) (2,525) (2,544)
-------- -------- -------- --------
Net earnings applicable to common
shareholders 8,178 8,034 15,463 16,020
Depreciation expense 2,172 2,327 4,311 4,641
Gains on sales of real estate (168) (470) (294) (816)
Cumulative effect of accounting change - - 550 -
-------- -------- -------- --------
Funds from operations 10,182 9,891 20,030 19,845
Straight-line rent (1,408) (1,689) (2,816) (3,378)
-------- -------- -------- --------
Adjusted funds from operations $ 8,774 $ 8,202 $ 17,214 $ 16,467
======== ======== ======== ========
Diluted funds from operations per common
share (a) $ .46 $ .45 $ .91 $ .91
Diluted weighted average number of common shares outstanding:
Used to calculate net earnings per share 21,508 21,443 21,482 21,439
Assumed conversion of preferred shares 3,194 3,242 3,218 3,242
-------- -------- -------- --------
Used to calculate funds from operations per share 24,702 24,685 24,700 24,681
======== ======== ======== ========
(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 and six months
ended June 30, 2003 and June 30, 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 to funds from operations, which
equates to $11,435 and $22,555 for the quarter and six months ended June 30,
2003, respectively, and $11,163 and $22,389 for the comparable prior year
periods which sums are then divided by the diluted weighted average number of
common share equivalents outstanding for the respective periods.
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 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 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