EXHIBIT 99.l
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER
AND YEAR ENDED DECEMBER 31, 2004
JERICHO, NY, February 14, 2005 --- Getty Realty Corp. (NYSE-GTY) today
reported its financial results for the quarter and year ended December 31, 2004.
Net earnings were $10.9 million and $39.4 million for the quarter and year
ended December 31, 2004, respectively, as compared with $9.4 million and $36.9
million for the comparable prior year periods. The increases in net earnings of
$1.5 million, or 15.1%, and $2.5 million, or 6.7%, for the quarter and year
ended December 31, 2004, respectively, over the comparable prior year periods
are primarily due to net decreases in expenses. The decrease in expenses for the
year end period includes the impact of a $0.6 million one-time accounting charge
recorded in the first quarter of 2003.
Funds from operations available to common shareholders, or FFO, increased
$1.5 million and $3.8 million to $12.6 million and $46.2 million, respectively,
for the quarter and year ended December 31, 2004. FFO increased more than net
earnings for the year end period principally due to the elimination of $2.5
million of preferred stock dividends in 2004 partially offset by the impact of
lower depreciation expense recorded in 2004 and the one-time accounting charge
recorded in 2003. The preferred stock dividends were eliminated as a result of
the conversion of 98% of the Company's convertible preferred stock into common
stock and the redemption of the remaining 2% outstanding in September 2003.
Adjusted funds from operations available to common shareholders, or AFFO,
increased $1.7 million and $4.9 million to $11.5 million and $41.8 million,
respectively, for the quarter and year ended December 31, 2004. AFFO increased
more than FFO due to lower deferred rental revenues (which are included in FFO,
but excluded from AFFO) of $0.2 million and $1.1 million, respectively, recorded
for the quarter and year ended December 31, 2004 as compared to the 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.
Earnings per common share for the quarter and year ended December 31, 2004
increased to $0.44 per share and $1.59 per share, respectively, as compared to
$0.38 per share and $1.49 per share, respectively, for the prior year periods.
FFO per common share for the quarter and year ended December 31, 2004 increased
to $0.51 per share and $1.87 per share as compared to $0.45 per share and $1.82
per share for the prior year periods. AFFO per common share for the quarter and
year ended December 31, 2004 increased to $0.47 per share and $1.69 per share as
compared to $0.40 per share and $1.59 per share for the prior year periods.
The calculations of FFO and AFFO per share give effect, for the year ended
December 31, 2003, to the conversion of the Company's outstanding convertible
preferred stock into
common stock as if the conversion had occurred at the beginning of the year. The
effect of the potential dilution from the assumed conversion utilizing the two
class method in computing diluted earnings per share for the year ended December
31, 2003 would have been antidilutive and was not assumed. Accordingly, in
calculating the per share amounts for the year ended December 31, 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. The Company had no preferred shares outstanding
during the quarter and year ended December 31, 2004.
Revenues from rental properties for the quarter and year ended December 31,
2004 were $17.0 million and $66.3 million, respectively, as compared to $16.6
million and $66.6 million for the respective prior year periods. The increase in
rent received for the current quarter includes $0.5 million of rental income
from properties acquired in November 2004. Rent received for the quarter and
year ended December 31, 2004 was $15.8 million and $61.9 million, respectively,
as compared with $15.3 million and $61.1 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 $4.5 million for the quarter and year
ended December 31, 2004, respectively, and $1.3 million and $5.5 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 were $2.3 million and $9.8 million for the quarter
and year ended December 31, 2004, respectively, a decrease of $0.2 million and
$0.8 million from the respective prior year periods. The decreases were
primarily due to a reduction in rent expense resulting from the full year impact
of 43 lease purchase options exercised in 2003 and an additional 8 lease
purchase options exercised in 2004, partially offset in the current quarter by
$0.1 million of rent expense from leasehold interests acquired in November 2004.
Environmental expenses, net of estimated recoveries, for the quarter and
year ended December 31, 2004 were $1.5 million and $6.0 million, respectively,
as compared to $2.0 million and $7.6 million for the respective prior year
periods. The net change in estimated environmental costs decreased by $0.5
million and $2.1 million for the quarter and year ended December 31, 2004,
respectively. The decrease in the net change in estimated environmental costs
for the year ended December 31, 2004 was partially offset by $0.5 million of
increased litigation expenses. The Company adopted Statement of Financial
Standard No. 143 which required it to change its method used to account for
estimated environmental costs effective January 1, 2003. The change in
accounting 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 statement of operations for the year ended
December 31, 2003.
General and administrative expenses for the quarter and year ended December
31, 2004 were $0.9 million and $5.0 million, respectively, as compared to $1.0
million and $4.1 million for the comparable prior year periods. General and
administrative expenses include approximately $0.4 million of higher legal and
audit expenses, including internal controls review costs, incurred in 2004
primarily due to compliance with various requirements of the Sarbanes-Oxley Act
of 2002. The increase for the year end period was also due to a smaller credit
to insurance loss reserves recorded in 2004 as compared to 2003 slightly offset
by higher insurance premiums. A credit of $0.5
million was recorded in the second quarter of 2003 and a smaller credit of $0.3
million was recorded in the fourth quarter of 2004. The insurance loss reserves
were established under our self funded insurance program that was terminated in
1997. Increased audit expense recorded in the fourth quarter of 2004 was
entirely offset by the insurance credit resulting in a net decrease in expenses.
Depreciation and amortization expense for the quarter and year ended
December 31, 2004 was $2.1 million and $7.5 million, respectively, as compared
to $2.0 million and $8.4 million for the comparable prior year periods.
Depreciation and amortization expense increased by $0.1 million for the quarter
and decreased by $0.9 million for the year, as compared to the respective prior
periods, due to certain assets becoming fully depreciated and dispositions of
properties, which were entirely offset in the quarter ended December 31, 2004 by
$0.2 million of additional depreciation and amortization from assets acquired in
November 2004.
Getty Realty's Fourth Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, February 15, 2005 at 9:00 a.m. Eastern Time. To participate
in the conference call, please dial 719-457-2657 five to ten minutes before the
scheduled start time and reference pass code 6165324. If you cannot participate
in the live event, a replay will be available beginning on February 15, 2005 at
noon though midnight, February 18, 2005. To access the replay, please dial
719-457-0820 and reference pass code 6165324.
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 over 1,000
properties in the Eastern United States.
CERTAIN STATEMENTS IN THIS NEWS RELEASE 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)
- --------------------------------------------------------------------------------------------------------------------
December 31, December 31,
- --------------------------------------------------------------------------------------------------------------------
2004 2003
- --------------------------------------------------------------------------------------------------------------------
Assets:
- --------------------------------------------------------------------------------------------------------------------
Real Estate:
Land $ 156,571 $ 142,724
Buildings and improvements 190,019 175,498
---------------- ----------------
346,590 318,222
Less -- accumulated depreciation and amortization (106,463) (100,488)
---------------- ----------------
Real estate, net 240,127 217,734
Deferred rent receivable 25,117 20,653
Cash and equivalents 15,700 19,905
Recoveries from state underground storage tank funds, net 5,437 7,454
Mortgages and accounts receivable, net 3,961 5,565
Prepaid expenses and other assets 386 692
---------------- ----------------
Total assets $ 290,728 $ 272,003
================ ================
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Liabilities and Shareholders' Equity:
- --------------------------------------------------------------------------------------------------------------------
Environmental remediation costs $ 20,626 $ 23,551
Borrowings under credit lines 24,000 -
Dividends payable 10,495 10,483
Accounts payable and accrued expenses 9,595 9,100
Mortgages payable 509 844
---------------- ----------------
Total liabilities 65,225 43,978
---------------- ----------------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 24,694,071 at December 31, 2004
and 24,664,384 at December 31, 2003 247 247
Paid-in capital 257,295 257,206
Dividends paid in excess of earnings (32,039) (29,428)
---------------- ----------------
Total shareholders' equity 225,503 228,025
---------------- ----------------
Total liabilities and shareholders' equity $ 290,728 $ 272,003
================ ================
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
- -------------------------------------------------------------------------------------------------------------------
Three months ended December 31, Year ended December 31,
- -------------------------------------------------------------------------------------------------------------------
2004 2003 2004 2003
- -------------------------------------------------------------------------------------------------------------------
Revenues from rental properties $16,952 $16,576 $ 66,331 $ 66,601
Operating Expenses:
Rental property expenses 2,344 2,505 9,814 10,662
Environmental expenses, net 1,463 2,013 6,027 7,594
General and administrative expenses 882 1,046 5,006 4,074
Depreciation and amortization expense 2,062 2,017 7,490 8,411
--------------- -------------- -------------- ---------------
Total operating expenses 6,751 7,581 28,337 30,741
--------------- -------------- -------------- ---------------
Income from operations 10,201 8,995 37,994 35,860
Other income, net 733 467 1,485 1,705
Interest expense (75) (30) (127) (128)
--------------- -------------- -------------- ---------------
Net earnings before cumulative effect of
accounting change 10,859 9,432 39,352 37,437
Cumulative effect of accounting change - - - (550)
--------------- -------------- -------------- ---------------
Net earnings 10,859 9,432 39,352 36,887
Less preferred stock dividends - - - 2,538
--------------- -------------- -------------- ---------------
Net earnings applicable to common
shareholders $10,859 $ 9,432 $ 39,352 $ 34,349
=============== ============== ============== ===============
Net earnings per common share:
Basic $.44 $.38 $1.59 $1.49
Diluted $.44 $.38 $1.59 $1.49
Weighted average common shares outstanding:
Basic 24,687 24,660 24,679 23,063
Diluted 24,735 24,690 24,721 23,082
Dividends declared per share:
Common $.42500 $.42500 $1.70000 $1.67500
Preferred - - - $1.15868
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 Year ended
December 31, December 31,
- ------------------------------------------------------------------------------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------
Net earnings $10,859 $9,432 $39,352 $36,887
Preferred stock dividends - - - (2,538)
------------ ----------- ---------- ------------
Net earnings applicable to common
shareholders 10,859 9,432 39,352 34,349
Depreciation and amortization expense 2,062 2,017 7,490 8,411
Gains on sales of real estate (284) (303) (618) (928)
Cumulative effect of accounting change - - - 550
------------ ----------- ---------- ------------
Funds from operations available to common
shareholders 12,637 11,146 46,224 42,382
Straight-line rent (1,120) (1,312) (4,464) (5,537)
------------ ----------- ---------- ------------
Adjusted funds from operations available to
common shareholders $11,517 $9,834 $41,760 $36,845
============ =========== ========== ============
Diluted per common share amounts (a):
Earnings per share $.44 $.38 $1.59 $1.49
FFO per share $.51 $.45 $1.87 $1.82
AFFO per share $.47 $.40 $1.69 $1.59
Diluted weighted average number of common
share equivalents outstanding:
Used to calculate net earnings per common 24,735 24,690 24,721 23,082
share
Assumed conversion of preferred shares - - - 1,622
------------ ----------- ---------- ------------
Used to calculate FFO and AFFO per
common share 24,735 24,690 24,721 24,704
============ =========== ========== ============
(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. FFO and AFFO per share give effect, for the year ended December 31,
2003, to the conversion of the outstanding Series A Participating Convertible
Redeemable Preferred Stock into common stock as if the conversion had occurred
at the beginning of the year. The effect of the potential dilution from the
assumed conversion utilizing the two class method in computing diluted earnings
per share for the year ended December 31, 2003 would have been antidilutive and
was not assumed. Accordingly, for the year ended December 31, 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
year ended December 31, 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 BEFORE DEPRECIATION AND
AMORTIZATION, GAINS OR LOSSES ON SALES OF REAL ESTATE, NON-FFO ITEMS REPORTED IN
DISCONTINUED OPERATIONS, EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF ACCOUNTING
CHANGE. GETTY'S MANAGEMENT BELIEVES THAT FFO IS HELPFUL TO INVESTORS IN
MEASURING GETTY'S PERFORMANCE BECAUSE FFO EXCLUDES VARIOUS ITEMS INCLUDED IN
GAAP NET EARNINGS THAT DO NOT RELATE TO, OR ARE NOT INDICATIVE OF, GETTY'S
FUNDAMENTAL OPERATING PERFORMANCE SUCH AS GAINS OR LOSSES FROM PROPERTY SALES
AND DEPRECIATION AND AMORTIZATION. IN GETTY'S CASE, HOWEVER, NET EARNINGS AND
FFO INCLUDE THE SIGNIFICANT IMPACT OF STRAIGHT-LINE RENT ON ITS RECOGNITION OF
REVENUES FROM RENTAL PROPERTIES, WHICH LARGELY RESULTS FROM 2% ANNUAL RENTAL
INCREASES SCHEDULED UNDER A MASTER LEASE. IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, 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. AS A RESULT, GETTY'S MANAGEMENT PAYS PARTICULAR ATTENTION TO ADJUSTED FUNDS
FROM OPERATIONS ("AFFO"), A SUPPLEMENTAL NON-GAAP PERFORMANCE MEASURE THAT IT
DEFINES AS FFO LESS STRAIGHT LINE RENT. IN MANAGEMENT'S VIEW, AFFO PROVIDES A
MORE ACCURATE DEPICTION OF THE IMPACT OF THE SCHEDULED RENT INCREASES UNDER THE
MASTER LEASE THAN FFO. NEITHER FFO NOR AFFO REPRESENTS CASH GENERATED FROM
OPERATING ACTIVITIES CALCULATED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AND THEREFORE SHOULD NOT BE CONSIDERED AN ALTERNATIVE FOR GAAP NET
EARNINGS OR AS A MEASURE OF LIQUIDITY.
GETTY REALTY CORP. AND SUBSIDIARIES
SUPPLEMENTAL TAX REPORTING INFORMATION FOR
COMMON DIVIDENDS PAID
YEAR ENDED DECEMBER 31, 2004
Box 1a Box 2a Box 3
------ ------ -----
Total Total Total
Record Payable Dividends Ordinary Capital Gain Nontaxable
Date Date Per Share Dividends Distributions Distributions
---- ---- --------- --------- ------------- -------------
01/02/2004 01/15/2004 $0.425000 $0.320078 $0.003274 $0.101648
03/25/2004 04/08/2004 0.425000 0.320078 0.003274 0.101648
06/24/2004 08/08/2004 0.425000 0.320078 0.003274 0.101648
09/30/2004 10/15/2004 0.425000 0.320078 0.003274 0.101648
-------- -------- -------- --------
Totals $1.700000 $1.280312 $0.013096 $0.406592
========= ========= ========= =========
Contact: Thomas J. Stirnweis
(516) 478-5403