EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER
AND NINE MONTHS ENDED SEPTEMBER 30, 2003
JERICHO, NY, NOVEMBER 3, 2003 --- Getty Realty Corp. (NYSE-GTY) today
reported the Company's financial results for the quarter and nine months ended
September 30, 2003.
Net earnings for the quarter and nine months ended September 30, 2003
were $9.5 million and $27.5 million, respectively, as compared with $9.0 million
and $27.5 million for the comparable prior year periods. Diluted earnings per
common share for the quarter and nine months ended September 30, 2003 were $0.38
and $1.11, respectively, as compared with $0.36 and $1.11 for the comparable
prior year periods.
Funds from operations ("FFO") for the quarter and nine months ended
September 30, 2003 were $11.2 million and $31.2 million, respectively, compared
with $9.5 million and $29.4 million for the comparable prior year periods. The
increase in FFO was principally due to the reduction in preferred stock
dividends as a result of the redemption and conversion of the Company's
outstanding Series A Participating Convertible Redeemable Preferred Stock
(NYSE-GTY PrA) in the quarter ended September 30, 2003. FFO per diluted common
share for the quarter and nine months ended September 30, 2003 was $0.45 and
$1.37, respectively, as compared with $0.44 and $1.34 for the comparable prior
year periods. The increase in FFO was offset by an increase in the weighted
number of common shares outstanding in calculating FFO per share. Adjusted funds
from operations ("AFFO") for the quarter and nine months ended September 30,
2003 were $9.8 million and $27.0 million, respectively, as compared with $7.8
million and $24.3 million for the comparable prior year periods. FFO and AFFO
are 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.
In August 2003, the Company notified holders of the Preferred Stock
that the Preferred Stock would be redeemed on September 24, 2003 for $25.00 per
share plus a mandatory redemption dividend of $0.27118 per share. Prior to the
redemption date, shareholders of 98% of the Preferred Stock exercised their
right to convert 2,816,919 shares of Preferred Stock into 3,186,355 shares of
Common Stock at the conversion rate of 1.1312 shares of Common Stock for each
share of Preferred Stock so converted, and received cash in lieu of fractional
shares of Common Stock. The remaining 48,849 shares of outstanding Preferred
Stock were redeemed for an aggregate amount, including accrued dividends through
the call date, of approximately $1,234,000. The Preferred Stock has ceased
accruing dividends and trading on the NYSE.
Revenues from rental properties for the quarter and nine months ended
September 30, 2003 were $16.7 million and $50.0 million, respectively, as
compared to $16.7 million and $50.4 million for the comparable prior year
periods. Rental income received for the quarter and nine months ended September
30, 2003 was $15.3 million and $45.8 million, respectively, as compared with
$15.1 million and $45.4 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 $4.2 million for the quarter and nine
months ended September 30, 2003, respectively, and $1.7 million and $5.1 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 nine months ended
September 30, 2003 were $2.6 million and $8.2 million, respectively, as compared
to $2.9 million and $9.1 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
nine months ended September 30, 2003 were $1.9 million and $5.6 million,
respectively, as compared to $2.4 million and $5.7 million for the comparable
prior year periods. Environmental expenses include a net change in estimated
environmental costs of $1.2 million and $3.2 million, respectively, for the
quarter and nine months ended September 30, 2003, which decreased by $0.7
million and $1.4 million, respectively, from the comparable prior year periods.
The net change in estimated environmental costs for 2003 is due primarily to
reductions in recoveries from state underground storage tank reimbursement
funds. The decreases in the change in estimated environmental costs were
partially offset by accretion expense of $0.2 million and $0.7 million recorded
for the quarter and nine months ended September 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 and $0.6 million of
higher legal fees and environmental litigation expenses recorded during the nine
months ended September 30, 2003.
Getty Realty's Third Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, November 4, 2003 at 9:00 a.m. Eastern Time. To participate in
the conference call, please dial 1-913-981-5507 five to ten minutes before the
scheduled start time and reference pass code 691822. If you cannot participate
in the live event, a replay will be available beginning on November 4, 2003 at
noon though midnight, November 7, 2003. To access the replay, please dial
1-719-457-0820 and reference passcode 691822.
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)
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Three months ended September 30, Nine months ended September 30,
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2003 2002 2003 2002
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Revenues:
Revenues from rental properties $ 16,676 $ 16,746 $ 50,025 $ 50,425
Other income, net 475 637 1,238 1,989
-------- -------- -------- --------
Total revenues 17,151 17,383 51,263 52,414
-------- -------- -------- --------
Expenses:
Rental property expenses 2,573 2,885 8,157 9,051
Environmental expenses, net 1,868 2,351 5,581 5,657
General and administrative expenses 1,128 965 3,028 3,254
Depreciation expense 2,083 2,174 6,394 6,815
Interest expense 32 35 98 100
-------- -------- -------- --------
Total expenses 7,684 8,410 23,258 24,877
-------- -------- -------- --------
Net earnings before cumulative effect of
accounting change 9,467 8,973 28,005 27,537
Cumulative effect of accounting change -- -- (550) --
-------- -------- -------- --------
Net earnings 9,467 8,973 27,455 27,537
Preferred stock dividends 13 1,272 2,538 3,816
-------- -------- -------- --------
Net earnings applicable to common shareholders $ 9,454 $ 7,701 $ 24,917 $ 23,721
======== ======== ======== ========
Net earnings per common share:
Basic $ .38 $ .36 $ 1.11 $ 1.11
Diluted $ .38 $ .36 $ 1.11 $ 1.11
Weighted average common shares outstanding:
Basic 24,703 21,441 22,530 21,433
Diluted 24,726 21,450 22,546 21,443
Dividends declared per share:
Preferred $ .27118 $ .44375 $1.15868 $1.33125
Common $ .42500 $ .41250 $1.25000 $1.23750
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
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September 30, December 31,
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Assets: 2003 2002
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Real Estate:
Land $ 143,865 $ 135,372
Buildings and improvements 176,591 172,682
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320,456 308,054
Less - accumulated depreciation (99,497) (93,986)
--------- ---------
Real estate, net 220,959 214,068
Cash and equivalents 21,310 33,726
Deferred rent receivable 19,341 15,116
Recoveries from state underground storage tank funds, net 10,613 13,396
Mortgages and accounts receivable, net 3,446 5,193
Prepaid expenses and other assets 703 992
--------- ---------
Total assets $ 276,372 $ 282,491
========= =========
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Liabilities and Shareholders' Equity:
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Environmental remediation costs $ 26,795 $ 27,924
Dividends payable 10,479 10,379
Accounts payable and accrued expenses 9,080 9,839
Mortgages payable 865 923
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Total liabilities 47,219 49,065
--------- ---------
Commitments and contingencies
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 2,865,768 at
December 31, 2002 -- 71,644
Common stock, par value $.01 per share; authorized 50,000,000 shares; issued
24,655,375 at September 30, 2003 and 21,442,299 at December 31, 2002 247 214
Paid-in capital 257,282 186,664
Dividends paid in excess of earnings (28,376) (25,096)
--------- ---------
Total shareholders' equity 229,153 233,426
--------- ---------
Total liabilities and shareholders' equity $ 276,372 $ 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)
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Three months ended September 30, Nine months ended September 30,
- ----------------------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002
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Net earnings $ 9,467 $ 8,973 $ 27,455 $ 27,537
Preferred stock dividends (13) (1,272) (2,538) (3,816)
-------- -------- -------- --------
Net earnings applicable to common shareholders 9,454 7,701 24,917 23,721
Depreciation expense 2,083 2,174 6,394 6,815
Gains on sales of real estate (331) (362) (625) (1,178)
Cumulative effect of accounting change -- -- 550 --
-------- -------- -------- --------
Funds from operations 11,206 9,513 31,236 29,358
Straight-line rent (1,409) (1,675) (4,225) (5,053)
-------- -------- -------- --------
Adjusted funds from operations $ 9,797 $ 7,838 $ 27,011 $ 24,305
======== ======== ======== ========
Diluted funds from operations per common share (a) $ .45 $ .44 $ 1.37 $ 1.34
Diluted weighted average number of common shares outstanding:
Used to calculate net earnings per share 24,726 21,450 22,546 21,443
Assumed conversion of preferred shares -- 3,241 2,162 3,241
-------- -------- -------- --------
Used to calculate funds from operations per share 24,726 24,691 24,708 24,684
======== ======== ======== ========
(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 three months ended
September 30, 2003, to the conversion of Series A Participating Convertible
Redeemable Preferred Stock into 3,186,000 shares of common stock as if the
conversion had occurred at the beginning of the period and, for the nine months
ended September 30, 2003 and the quarter and nine months ended September 30,
2002, to the potential dilution from the assumed conversion of preferred stock
into common stock utilizing the two class method. Accordingly, preferred stock
dividends are added back to funds from operations, which equates to $11,219,000
and $34,774,000 for the quarter and nine months ended September 30, 2003,
respectively, and $10,785,000 and $33,174,000 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. IN ACCORDANCE WITH THE NATIONAL ASSOCIATION OF REAL ESTATE
INVESTMENT TRUSTS' DEFINITION, 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