EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED
DECEMBER 31, 2005
JERICHO, NY, FEBRUARY 6, 2006 --- Getty Realty Corp. (NYSE-GTY) today
reported its financial results for the quarter and year ended December 31, 2005.
Earlier today, Getty announced that it has entered into a definitive Asset
Purchase Agreement to acquire 18 retail motor fuel and convenience store
properties located in Western New York for approximately $16.0 million.
Net earnings were $11.0 million for the quarter and $45.4 million for the
year ended December 31, 2005, as compared with $10.9 million and $39.4 million
for the respective prior year periods. Net earnings increased by $0.1 million,
or 1.6%, for the quarter and increased by $6.1 million, or 15.5%, for the year
ended December 31, 2005 over the comparable periods in 2004.
The increases in net earnings resulted from the acquisition of properties
in November 2004 and March 2005, reductions in environmental expenses and an
increase in gains from dispositions of assets. These increases were partially
offset by higher rental property expenses, interest expense and depreciation and
amortization expenses in addition to a decrease in income from mortgage notes
receivable. Net earnings for the year also increased due to an income tax
benefit of $1.5 million recorded in the third quarter of 2005 due to a net
reduction in the amount accrued for uncertain tax positions to the extent that
the uncertainties regarding these positions have been resolved.
The properties acquired in November 2004 and March 2005 generated
additional revenues from rental properties that was partially offset by
additional rental property expenses, depreciation and amortization expense and
interest expense. Environmental expenses, net of estimated recoveries, declined
by $0.8 million for the quarter and $3.6 million for the year ended December 31,
2005 as compared to the prior year periods. Rental property expenses increased
due to the properties acquired in 2004 and a $1.5 million non-recurring charge
recorded in the fourth quarter of 2005 for the change to the straight-line
method of accounting for rent expense as more fully discussed below.
Funds from operations, or FFO, decreased $0.7 million to $12.0 million for
the quarter and increased by $6.0 million to $52.3 million for the year ended
December 31, 2005, as compared to the respective prior year periods and adjusted
funds from operations, or AFFO, decreased $1.0 million to $10.6 million for the
quarter and increased by $4.8 million to $46.6 million for the year ended
December 31, 2005 as compared to the respective prior year periods.
FFO and AFFO exclude the gains on dispositions of assets and depreciation
and amortization expense of real estate assets which are included in net
earnings. FFO increased more than AFFO on both a dollar and percentage basis due
to the income tax benefit recorded in the year ended December 31, 2005, which
was partially offset by a decrease in deferred rental revenue (straight-line
rental revenue) (both of which are included in net earnings and FFO but excluded
from AFFO) for the year ended December 31, 2005 as compared to the prior year
period. FFO and AFFO are
supplemental non-GAAP measures of the performance of real estate investment
trusts and are reconciled to net earnings and discussed in greater detail in the
financial tables at the end of this release. Rent expense recognized on the
straight-line basis approximates the rent paid on a contractual basis and the
difference between the two methods is not significant to Getty's results. Had
the non-recurring charge of $1.5 million for the change to the straight-line
method of accounting for rent expense been excluded in determining AFFO, AFFO
would have been $12.1 million, or $0.49 per share, and $48.1 million, or $1.95
per share, for the quarter and year ended December 31, 2005, respectively.
Earnings per share increased $0.01 per share to $0.45 per share for the
quarter and increased $0.25 per share to $1.84 per share for the year ended
December 31, 2005, as compared to the prior year periods. For the quarter ended
December 31, 2005, FFO per share decreased $0.03 per share to $0.48 per share
and AFFO per share decreased $0.04 per share to $0.43 per share, as compared to
the prior year period. FFO per share increased $0.24 per share to $2.11 per
share and AFFO per share increased $0.19 per share to $1.88 per share for the
year ended December 31, 2005 as compared to the prior year period.
Revenues from rental properties were $18.3 million for the quarter and
$71.4 million for the year ended December 31, 2005 as compared to $17.0 million
and $66.3 million for the respective prior year periods. The increase in
revenues was primarily due to rental income from the properties acquired in
November 2004 and March 2005 and rent escalations, and was partially offset by
the effect of lease terminations and property dispositions. 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 $1.4
million for the quarter and $4.2 million for the year ended December 31, 2005 as
compared to $1.1 million and $4.5 million for the respective prior year periods.
Deferred rental revenue for the quarter ended December 31, 2005 includes $0.6
million for lease termination payments which will be received over the original
term of the leases.
Rental property expenses were $4.0 million for the quarter and $11.8
million for the year ended December 31, 2005, as compared to $2.3 million and
$9.8 million for the respective prior year periods. The $2.0 million increase in
rental property expenses for the year ended December 31, 2005 was primarily due
to $0.4 million of additional rent expense for the properties acquired in 2004
and $1.5 million for the non-recurring charge recorded in the fourth quarter of
2005 due to the change in accounting for rent expense from a contractual to a
straight-line basis. The impact on the results for the quarter from the
$1.5 million charge was offset by $0.8 million of income related to prior
periods for early lease terminations of $0.3 million and a gain on sale of real
estate resulting from a taking by eminent domain of $0.5 million. As a result,
net earnings for the quarter ended December 31, 2005 were negatively impacted by
$0.7 million.
Environmental expenses, net were $0.6 million for the quarter and $2.4
million for the year ended December 31, 2005, as compared to $1.5 million for
the prior year quarter and $6.0 million for prior year period. Environmental
litigation expense and related legal fees were comparable to the prior year
quarter and decreased by $1.6 million as compared to the prior year period.
Environmental expenses for the year ended December 31, 2005 include a $0.6
million net credit for environmental litigation expense, which was principally
recorded in the first quarter of 2005, due to net reductions in litigation loss
reserve estimates.
Environmental expenses were also affected by changes in estimated
environmental costs, net of estimated recoveries, and accretion expenses, which
decreased by $0.9 million as compared to the
prior year quarter and by $1.9 million as compared to the prior year period. The
net change in estimated environmental costs and accretion expense aggregated
$77,000 for the quarter and $1.4 million for the year ended December 31, 2005 as
compared to $1.0 million and $3.3 million for the comparable periods last year.
General and administrative expenses were $1.2 million for the quarter and
$4.9 million for the year ended December 31, 2005, as compared to $0.9 million
and $5.0 million for the respective prior year periods. The increase for the
quarter was due to increased insurance expense and legal fees.
Depreciation and amortization expense was $2.2 million for the quarter and
$8.3 million for the year ended December 31, 2005, as compared to $2.1 million
and $7.5 million for the respective prior year periods. The increase was due to
depreciation and amortization of properties acquired in November 2004 and March
2005 which was partially offset by property dispositions.
Interest expense, principally related to borrowings used to finance the
acquisition of properties in November 2004 and March 2005, was $0.5 million for
the quarter and $1.6 million for the year ended December 31, 2005 and was
insignificant in the prior year periods.
Other income was $1.2 million for the quarter and $1.6 million for the year
ended December 31, 2005, as compared to $0.7 million and $1.5 million for the
respective prior year periods. Other income includes gains on sales of real
estate, which is excluded from FFO and AFFO, of $1.1 million for the quarter and
$1.3 million for the year ended December 31, 2005, as compared to $0.3 million
and $0.6 million for the respective prior year periods.
Getty Realty's Fourth Quarter Earnings Conference Call is scheduled for
tomorrow, Tuesday, February 7, 2006, at 9:00 a.m. Eastern Time. To participate
in the conference call, please dial 719-457-2679 five to ten minutes before the
scheduled start time and reference pass code 5694775. If you cannot participate
in the live event, a replay will be available beginning on February 7, 2006 at
noon though midnight, February 10, 2006. To access the replay, please dial
719-457-0820 and reference pass code 5694775.
Getty Realty Corp. is the largest publicly-traded real estate investment
trust in the United States specializing in ownership and leasing of retail motor
fuel and convenience store properties and petroleum distribution terminals. The
Company owns and leases over 1,050 properties in the Eastern United States.
CERTAIN STATEMENTS IN THIS NEWS RELEASE MAY CONSTITUTE "FORWARD LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. WHEN THE WORDS "BELIEVES", "EXPECTS", "PLANS", "PROJECTS", "ESTIMATES"
AND SIMILAR EXPRESSIONS ARE USED IN THIS RELEASE, THEY IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT
BELIEFS AND ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT AND
INVOLVE KNOWN AND UNKNOWN RISKS (INCLUDING THE RISKS THAT ARE DESCRIBED FROM
TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION), 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 THESE
FORWARD-LOOKING STATEMENTS. GETTY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE
REVISIONS TO THESE FORWARD-LOOKING STATEMENTS THAT REFLECT FUTURE EVENTS OR
CIRCUMSTANCES OR THE OCCURRENCE OF UNANTICIPATED EVENTS.
-more-
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
- ---------------------------------------------------------------------------------------------------
December 31,
- ---------------------------------------------------------------------------------------------------
Assets: 2005 2004
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Real Estate:
Land $ 171,839 $ 156,571
Buildings and improvements 198,656 190,019
--------- ---------
370,495 346,590
Less - accumulated depreciation and amortization (109,800) (106,463)
--------- ---------
Real estate, net 260,695 240,127
Deferred rent receivable 29,287 25,117
Cash and equivalents 1,247 15,700
Recoveries from state underground storage tank funds, net 4,264 5,437
Mortgages and accounts receivable, net 3,129 3,961
Prepaid expenses and other assets 1,359 386
--------- ---------
Total assets $ 299,981 $ 290,728
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Liabilities and Shareholders' Equity:
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Debt $ 34,224 $ 24,509
Environmental remediation costs 17,350 20,626
Dividends payable 11,009 10,495
Accounts payable and accrued expenses 9,515 9,595
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Total liabilities 72,098 65,225
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Commitments and contingencies
Shareholders' equity:
Common stock, par value $.01 per share; authorized 50,000,000
shares; issued 24,716,614 at December 31, 2005
and 24,694,071 at December 31, 2004 247 247
Paid-in capital 257,766 257,295
Dividends paid in excess of earnings (30,130) (32,039)
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Total shareholders' equity 227,883 225,503
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Total liabilities and shareholders' equity $ 299,981 $ 290,728
========= =========
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Three months ended December 31, Year ended December 31,
- ---------------------------------------------------------------------------------------------------------
2005 2004 2005 2004
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Revenues from rental properties $ 18,341 $ 16,952 $ 71,377 $ 66,331
Expenses:
Rental property expenses 4,035 2,344 11,770 9,814
Environmental expenses, net 642 1,463 2,428 6,027
General and administrative expenses 1,158 882 4,925 5,006
Depreciation and amortization expense 2,155 2,062 8,255 7,490
-------- -------- -------- --------
Total operating expenses 7,990 6,751 27,378 28,337
-------- -------- -------- --------
Operating income 10,351 10,201 43,999 37,994
Other income, net 1,208 733 1,578 1,485
Interest expense (527) (75) (1,623) (127)
-------- -------- -------- --------
Net earnings before income taxes 11,032 10,859 43,954 39,352
Income tax benefit - - 1,494 -
-------- -------- -------- --------
Net earnings $ 11,032 $ 10,859 $ 45,448 $ 39,352
======== ======== ======== ========
Net earnings per common share:
Basic $ 0.45 $ 0.44 $ 1.84 $ 1.59
Diluted $ 0.45 $ 0.44 $ 1.84 $ 1.59
Weighted average shares outstanding:
Basic 24,716 24,687 24,711 24,679
Stock options and restricted stock units 26 48 18 42
-------- -------- -------- --------
Diluted 24,742 24,735 24,729 24,721
======== ======== ======== ========
Dividends declared per share: $ 0.445 $ 0.425 $ 1.760 $ 1.700
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 Year ended
December 31, December 31,
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2005 2004 2005 2004
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Net earnings $ 11,032 $ 10,859 $ 45,448 $ 39,352
Depreciation and amortization of real estate assets (*) 2,084 2,062 8,113 7,490
Gains on sales of real estate (1,132) (284) (1,309) (618)
-------- -------- -------- --------
Funds from operations 11,984 12,637 52,252 46,224
Deferred rental revenue (straight-line rental revenue) (1,432) (1,120) (4,170) (4,464)
Income tax benefit - - (1,494) -
-------- -------- -------- --------
Adjusted funds from operations $ 10,552 $ 11,517 $ 46,588 $ 41,760
======== ======== ======== ========
Diluted per common share amounts:
Earnings per share $ 0.45 $ 0.44 $ 1.84 $ 1.59
Funds from operations per share $ 0.48 $ 0.51 $ 2.11 $ 1.87
Adjusted funds from operations per share $ 0.43 $ 0.47 $ 1.88 $ 1.69
Diluted weighted average shares outstanding 24,742 24,735 24,729 24,721
(*) Depreciation and amortization expense as reflected in our Consolidated
Statements of Operations also includes depreciation and amortization on non-real
estate assets.
IN ADDITION TO MEASUREMENTS DEFINED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
("GAAP"), GETTY ALSO FOCUSES ON FUNDS FROM OPERATIONS ("FFO") AND ADJUSTED FUNDS
FROM OPERATIONS ("AFFO") TO MEASURE ITS PERFORMANCE. FFO IS GENERALLY CONSIDERED
TO BE AN APPROPRIATE SUPPLEMENTAL NON-GAAP MEASURE OF THE PERFORMANCE OF REITS.
FFO IS DEFINED BY THE NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS AS
NET EARNINGS BEFORE DEPRECIATION AND AMORTIZATION OF REAL ESTATE ASSETS, GAINS
OR LOSSES ON SALES OF REAL ESTATE, NON-FFO ITEMS REPORTED IN DISCONTINUED
OPERATIONS AND EXTRAORDINARY ITEMS. OTHER REITS MAY USE DEFINITIONS OF FFO
AND/OR AFFO THAT ARE DIFFERENT THAN GETTY'S AND, ACCORDINGLY, MAY NOT BE
COMPARABLE.
GETTY BELIEVES THAT FFO IS HELPFUL TO INVESTORS IN MEASURING ITS 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 OF
REAL ESTATE ASSETS. IN GETTY'S CASE, HOWEVER, GAAP NET EARNINGS AND FFO INCLUDE
THE SIGNIFICANT IMPACT OF DEFERRED RENTAL REVENUE (STRAIGHT-LINE RENTAL REVENUE)
ON ITS RECOGNITION OF REVENUES FROM RENTAL PROPERTIES, WHICH PRIMARILY RESULTS
FROM FIXED RENTAL INCREASES SCHEDULED UNDER CERTAIN LEASES WITH ITS TENANTS. IN
ACCORDANCE WITH GAAP, THE AGGREGATE MINIMUM RENT DUE OVER THE INITIAL TERM OF
THESE LEASES IS RECOGNIZED ON A STRAIGHT-LINE BASIS RATHER THAN WHEN DUE. GAAP
NET EARNINGS AND FFO FOR THE YEAR ENDED DECEMBER 31, 2005 ALSO INCLUDE THE
INCOME TAX BENEFIT RECOGNIZED DUE TO A NET REDUCTION IN AMOUNTS ACCRUED FOR
UNCERTAIN TAX POSITIONS RELATED TO BEING TAXED AS A C-CORP. PRIOR TO 2001. AS A
RESULT, GETTY PAYS PARTICULAR ATTENTION TO AFFO, A SUPPLEMENTAL NON-GAAP
PERFORMANCE MEASURE THAT GETTY DEFINES AS FFO LESS STRAIGHT-LINE RENTAL REVENUE
AND INCOME TAX BENEFIT. IN GETTY'S VIEW, AFFO PROVIDES A MORE ACCURATE DEPICTION
THAN FFO OF THE IMPACT OF SCHEDULED RENT INCREASES UNDER THESE LEASES AND
GETTY'S ELECTION TO BE TAXED AS A REIT BEGINNING IN 2001. NEITHER FFO NOR AFFO
REPRESENT CASH GENERATED FROM OPERATING ACTIVITIES CALCULATED IN ACCORDANCE WITH
GAAP 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, 2005
Box 1a Box 2a Box 3
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Total Total Total
Record Payable Dividends Ordinary Capital Gain Nondividend
Date Date Per Share Dividends Distributions Distributions
- ---------- ---------- --------- --------- ------------- -------------
01/03/2005 01/13/2005 $0.425000 $0.377275 $0.000157 $0.047568
03/31/2005 04/14/2005 0.435000 0.386152 0.000160 0.048688
06/30/2005 07/14/2005 0.435000 0.386152 0.000160 0.048688
09/29/2005 10/13/2005 0.445000 0.395029 0.000164 0.049807
--------- --------- --------- ---------
Totals $1.740000 $1.544608 $0.000641 $0.194751
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Contact: Thomas J. Stirnweis
(516) 478-5403