EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER AND SIX MONTHS
ENDED JUNE 30, 2004
JERICHO, NY, AUGUST 2, 2004 --- Getty Realty Corp. (NYSE-GTY) today
reported its financial results for the quarter and six months ended June 30,
2004.
Net earnings were $9.4 million and $18.5 million for the quarter and six
months ended June 30, 2004, respectively, as compared with $9.4 million and
$18.0 million for the comparable prior year periods. Net earnings for the
quarter ended June 30, 2004 were comparable to the prior year period. Net
earnings for the six months ended June 30, 2004 increased by $0.5 million, or
3.0%, over the comparable period in 2003 due to, among other items, the impact
of a $0.6 million one-time accounting charge recorded in the first quarter of
last year. FFO increased $0.9 million and $2.0 million to $11.0 million and
$22.0 million, respectively, for the quarter and six months ended June 30, 2004,
principally due to the elimination of $1.3 million and $2.5 million,
respectively, of preferred stock dividends recorded in the quarter and six
months ended June 30, 2003, as a result of the conversion of 98% of our
convertible preferred stock into common stock and the redemption of the
remaining 2% outstanding in September 2003. AFFO increased $1.2 million and $2.6
million to $9.9 million and $19.8 million, respectively, for the quarter and six
months ended June 30, 2004. AFFO increased more than FFO on both a dollar and
percentage basis due to lower deferred rental revenues (which are included in
FFO, but excluded from AFFO) of $0.3 million and $0.6 million, respectively,
recorded for the quarter and six months ended June 30, 2004 as compared to the
prior year periods.
Diluted earnings per common share of $0.38 for the quarter ended June 30,
2004 were comparable to the prior year period. Diluted earnings per common share
for the six months ended June 30, 2004 increased to $0.75 per share as compared
to $0.72 per share for the six months ended June 30, 2003. Diluted FFO per
common share for the quarter and six months ended June 30, 2004 decreased to
$0.45 per share and $0.89 per share, respectively, as compared to $0.46 per
share and $0.91 per share for the respective prior year periods. Diluted AFFO
per common share for the quarter ended June 30, 2004 decreased to $0.40 per
share as compared to $0.41 per share for the quarter ended June 30, 2003, while
diluted AFFO of $0.80 per common share for the six months ended June 30, 2004
was comparable to the prior year period. All diluted per common share amounts
for the quarter and six months ended 2003 reflect the impact of the assumed
conversion of our outstanding convertible preferred stock, except for diluted
earnings per common share for the quarter and six months ended June 30, 2003,
where the impact of the assumed conversion would have been anti-dilutive. 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.
Revenues from rental properties for the quarter and six months ended June
30, 2004 were $16.4 million and $33.0 million, respectively, as compared to
$16.7 million and $33.3 million for the respective prior year periods. Rent
received for the quarter and six months ended June 30, 2004 was $15.3 million
and $30.8 million, respectively, as compared with $15.3 million and $30.5
million for the respective prior year periods. In addition to rent received,
revenues from rental properties include deferred rental revenue accrued due to
recognition of rental income on a straight-line basis of $1.1 million and $2.2
million for the quarter and six months ended June 30, 2004, respectively, and
$1.4 million and $2.8 million for the respective prior year periods. Deferred
rental revenue is included in net earnings and FFO but is excluded from AFFO.
Rental property expenses, which include rent expense, were $2.5 million
and $5.0 million for the quarter and six months ended June 30, 2004,
respectively, a decrease of $0.2 million and $0.6 million from the respective
prior year periods. The decrease for both periods was primarily due to a
reduction in rent expense as a result of the exercise of lease purchase options,
including the purchase of 41 leased properties in May 2003.
Environmental expenses, net of estimated recoveries, for the quarter and
six months ended June 30, 2004 were $1.8 million and $3.5 million, respectively,
as compared to $2.2 million and $3.7 million for the respective prior year
periods. Decreases in the net change in estimated environmental costs of $0.4
million and $0.6 million for the quarter and six months end June 30, 2004
compared to the respective prior year periods were partially offset by $0.1
million and $0.4 million, respectively, of increased litigation expenses
incurred in the current year periods. We adopted Statement of Financial Standard
No. 143 and changed our method used to account for estimated environmental costs
effective January 1, 2003, which resulted in a one-time charge of $0.6 million
that was recorded during the first quarter of 2003, and is included in
cumulative effect of accounting change in the consolidated statements of
operations for the six months ended June 30, 2003.
General and administrative expenses for the quarter and six months ended
June 30, 2004 were $1.3 million and $2.6 million, respectively, as compared to
$0.6 million and $1.9 million for the comparable prior year periods. The
increase in general and administrative expenses was primarily due to a $0.5
million credit recorded in the quarter ended June 30, 2003 to reduce insurance
loss reserves that were established under the Company's self-funded insurance
program that was terminated in 1997.
Depreciation and amortization for the quarter and six months ended June
30, 2004 was $1.8 million and $3.7 million, respectively, a decrease of $0.3
million and $0.6 million as compared to the respective prior periods, as a
result of certain assets becoming fully depreciated and dispositions of
properties.
Getty Realty's Second Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, August 3, 2004 at 9:00 a.m. Eastern Time. To participate in
the conference call, please dial 1-719-457-2649 five to ten minutes before the
scheduled start time and reference pass code
290058. If you cannot participate in the live event, a replay will be available
beginning on August 3, 2004 at noon though midnight, August 6, 2004. To access
the replay, please dial 1-719-457-0820 and reference passcode 290058.
Getty Realty Corp. is a real estate investment trust specializing in the
ownership and leasing of retail motor fuel and convenience store properties and
petroleum distribution terminals. The Company owns and leases approximately
1,000 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 BALANCE SHEETS
(in thousands, except share data)
(unaudited)
June 30, December 31,
2004 2003
---- ----
Assets:
Real Estate:
Land $ 144,357 $ 142,724
Buildings and improvements 176,312 175,498
--------- ---------
320,669 318,222
Less - accumulated depreciation (103,200) (100,488)
--------- ---------
Real estate, net 217,469 217,734
Cash and equivalents 17,333 19,905
Deferred rent receivable 22,884 20,653
Recoveries from state underground storage tank funds, net 6,205 7,454
Mortgages and accounts receivable, net 4,039 5,565
Prepaid expenses and other assets 590 692
--------- ---------
Total assets $ 268,520 $ 272,003
========= =========
Liabilities and Shareholders' Equity:
Environmental remediation costs $ 22,588 $ 23,551
Dividends payable 10,489 10,483
Accounts payable and accrued expenses 8,946 9,100
Mortgages payable 864 844
--------- ---------
Total liabilities 42,887 43,978
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 24,679,662 at June 30, 2004
and 24,664,384 at December 31, 2003 247 247
Paid-in capital 257,268 257,206
Dividends paid in excess of earnings (31,882) (29,428)
--------- ---------
Total shareholders' equity 225,633 228,025
--------- ---------
Total liabilities and shareholders' equity $ 268,520 $ 272,003
========= =========
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,
------------------------------- --------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenues:
Revenues from rental properties $ 16,443 $ 16,672 $ 32,954 $ 33,349
Other income, net 296 409 429 763
-------- -------- -------- --------
Total revenues 16,739 17,081 33,383 34,112
-------- -------- -------- --------
Expenses:
Rental property expenses 2,487 2,672 5,008 5,584
Environmental expenses, net 1,783 2,166 3,515 3,713
General and administrative expenses 1,255 607 2,632 1,900
Depreciation expense 1,828 2,172 3,664 4,311
Interest expense 19 33 40 66
-------- -------- -------- --------
Total expenses 7,372 7,650 14,859 15,574
-------- -------- -------- --------
Net earnings before cumulative effect of
accounting change 9,367 9,431 18,524 18,538
Cumulative effect of accounting change - - - (550)
-------- -------- -------- --------
Net earnings 9,367 9,431 18,524 17,988
Less preferred stock dividends - 1,253 - 2,525
-------- -------- -------- --------
Net earnings applicable to common
shareholders $ 9,367 $ 8,178 $ 18,524 $ 15,463
======== ======== ======== ========
Net earnings per common share:
Basic $ .38 $ .38 $ .75 $ .72
Diluted $ .38 $ .38 $ .75 $ .72
Weighted average common shares
outstanding:
Basic 24,680 21,498 24,675 21,470
Diluted 24,692 21,508 24,690 21,482
Dividends declared per share:
Common $ .42500 $ .41250 $ .85000 $ .82500
Preferred - $ .44375 - $ .88750
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,
--------------------------- -------------------------
2004 2003 2004 2003
---- ---- ---- ----
Net earnings $ 9,367 $ 9,431 $ 18,524 $ 17,988
Preferred stock dividends - (1,253) - (2,525)
-------- -------- -------- --------
Net earnings applicable to common
shareholders 9,367 8,178 18,524 15,463
Depreciation expense 1,828 2,172 3,664 4,311
Gains on sales of real estate (146) (168) (146) (294)
Cumulative effect of accounting change - - - 550
-------- -------- -------- --------
Funds from operations 11,049 10,182 22,042 20,030
Straight-line rent (1,115) (1,408) (2,231) (2,816)
-------- -------- -------- --------
Adjusted funds from operations $ 9,934 $ 8,774 $ 19,811 $ 17,214
======== ======== ======== ========
Diluted per common share amounts (a):
Earnings per share $ .38 $ .38 $ .75 $ .72
FFO per share $ .45 $ .46 $ .89 $ .91
AFFO per share $ .40 $ .41 $ .80 $ .80
Diluted weighted average number of common
share equivalents outstanding:
Used to calculate net earnings per share 24,692 21,508 24,690 21,482
Assumed conversion of preferred shares - 3,194 - 3,218
-------- -------- -------- --------
Used to calculate FFO and AFFO per
share 24,692 24,702 24,690 24,700
======== ======== ======== ========
(a) Diluted earnings, funds from operations ("FFO") and adjusted funds from
operations ("AFFO") per common share are computed by dividing net earnings
applicable to common shareholders, FFO and AFFO, respectively, by the diluted
weighted average number of common share equivalents outstanding during the
period. Diluted FFO and AFFO per share give effect, for the quarter and six
months ended June 30, 2003, to the dilution from the assumed conversion of
the outstanding Series A Participating Convertible Redeemable Preferred Stock
into common stock utilizing the two class method. Accordingly, for the
quarter and six months ended June 30, 2003, preferred stock dividends are
added back to FFO and AFFO, which sums are then divided by the diluted
weighted average number of common share equivalents outstanding for the
period. There were no preferred shares outstanding during the quarter and six
months ended June 30, 2004.
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. WE BELIEVE THAT
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