EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER
ENDED MARCH 31, 2006
JERICHO, NY, MAY 2, 2006 --- Getty Realty Corp. (NYSE-GTY) today reported
its financial results for the quarter ended March 31, 2006.
Net earnings were $10.5 million for the quarter, as compared to $11.4
million for the three months ended March 31, 2005, largely as a result of
increased environmental expenses, partially offset by higher revenues from
rental properties, which increased 3.9% compared with the first quarter of 2005,
due in part to the contribution from acquisitions. Funds from operations, or
FFO, were $12.4 million for the quarter as compared to $13.3 million for the
prior year period and adjusted funds from operations, or AFFO, were $11.6
million for the quarter as compared to $12.4 million for the prior year period.
For the quarter ended March 31, 2006, net earnings were $0.43 per share,
FFO was $0.50 per share and AFFO was $0.47 per share, which decreased by $0.03,
$0.04 and $0.03 per share, respectively, as compared to the prior year period.
Mr. Leo Liebowitz, Chairman of the Board and Chief Executive Officer
commented, "Our results for the quarter ended March 31, 2006 are in line with
our expectations despite the decrease when compared to the first quarter of last
year. I am pleased with the contribution from the two acquisitions that were
completed in March 2005 and February 2006. Rent received from rental properties
increased $748,000 over the prior year period due to scheduled rent escalations
and rent from the recently acquired properties, while our operating expenses
remained relatively flat. As we all know, interest rates have increased this
past year which, along with additional borrowings to fund the acquisitions,
resulted in a $0.5 million increase in interest expense. Although environmental
expenses have increased when compared to the quarter ended March 31, 2005, we
remain on target with our environmental program despite expected quarter to
quarter fluctuations in environmental expenses."
FFO and AFFO exclude gains on dispositions of assets and depreciation and
amortization expense of real estate assets which are included in net earnings.
FFO decreased more than AFFO on both a dollar and percentage basis due to a
decrease to deferred rental revenue, or straight-line rental revenue, (which is
included in net earnings and FFO but excluded from AFFO) for the quarter ended
March 31, 2006 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.
Environmental expenses, net were $1.1 million for the quarter as compared
to $63,000 for the prior year period. Environmental litigation expenses were
$0.4 million for the quarter ended March 31, 2006 as compared to a credit of
$0.4 million for 2005, which prior year period includes 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 increased by $0.2 million as compared to the prior
year quarter.
Interest expense was $0.6 million for the quarter and $0.1 million for the
respective prior year period. Interest expense increased primarily due to
borrowings used to finance the acquisition of properties in March 2005 and
February 2006. Interest expense also increased due to an increase in interest
rates which averaged 5.8% for the quarter ended March 31, 2006 as compared to
3.8% for the quarter ended March 31, 2005. Getty Realty Corp. entered into a
five year interest rate swap which effectively fixed the interest rate on
$45,000,000 of its borrowings at 6.7% effective May 1, 2006.
Getty Realty Corp.'s First Quarter Earnings Conference Call is scheduled
for tomorrow, Wednesday, May 3, 2006, at 9:00 a.m. Eastern Time. To participate
in the conference call, please dial (913) 981-5539 five to ten minutes before
the scheduled start time and reference pass code 4426361. If you cannot
participate in the live event, a replay will be available beginning on May 3,
2006 at noon though midnight, May 5, 2006. To access the replay, please dial
(719) 457-0820 and reference pass code 4426361.
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 1,060 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, 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. INFORMATION CONCERNING FACTORS THAT
COULD CAUSE GETTY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE FORWARD
LOOKING RESULTS CAN BE FOUND IN ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2005, AS WELL AS IN THE OTHER FILINGS IT MAKES WITH THE
SECURITIES AND EXCHANGE COMMISSION. GETTY UNDERTAKES NO OBLIGATION TO PUBLICLY
RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS
OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
-more-
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
March 31, December 31,
2006 2005
--------- ------------
Assets:
Real Estate:
Land $ 179,932 $ 171,839
Buildings and improvements 204,501 198,656
--------- ---------
384,433 370,495
Less - accumulated depreciation and amortization (111,597) (109,800)
--------- ---------
Real estate, net 272,836 260,695
Deferred rent receivable 30,110 29,287
Cash and equivalents 2,105 1,247
Recoveries from state underground storage tank funds, net 4,339 4,264
Mortgages and accounts receivable, net 3,519 3,129
Prepaid expenses and other assets 1,091 1,359
--------- ---------
Total assets $ 314,000 $ 299,981
========= =========
Liabilities and Shareholders' Equity:
Debt $ 49,216 $ 34,224
Environmental remediation costs 17,285 17,350
Dividends payable 11,264 11,009
Accounts payable and accrued expenses 8,999 9,515
--------- ---------
Total liabilities 86,764 72,098
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 24,719,465 at March 31, 2006
and 24,716,614 at December 31, 2005 247 247
Paid-in capital 257,852 257,766
Dividends paid in excess of earnings (30,863) (30,130)
--------- ---------
Total shareholders' equity 227,236 227,883
--------- ---------
Total liabilities and shareholders' equity $ 314,000 $ 299,981
========= =========
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months
ended March 31,
-----------------
2006 2005
------- -------
Revenues from rental properties $18,067 $17,396
Expenses:
Rental property expenses 2,484 2,624
Environmental expenses, net 1,101 63
General and administrative expenses 1,407 1,311
Depreciation and amortization expense 1,987 1,949
------- -------
Total operating expenses 6,979 5,947
------- -------
Operating income 11,088 11,449
Other income, net 82 136
Interest expense (639) (149)
------- -------
Net earnings $10,531 $11,436
======= =======
Net earnings per share:
Basic $ .43 $ .46
Diluted $ .43 $ .46
Weighted average shares outstanding:
Basic 24,717 24,700
Stock options and restricted stock units 28 14
------- -------
Diluted 24,745 24,714
======= =======
Dividends declared per share: $ .455 $ .435
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 March 31,
-----------------
2006 2005
------- -------
Net earnings $10,531 $11,436
Depreciation and amortization of real estate assets (*) 1,916 1,949
Gains on dispositions of real estate (34) (72)
------- -------
Funds from operations 12,413 13,313
Deferred rental revenue (straight-line rental revenue) (823) (900)
------- -------
Adjusted funds from operations $11,590 $12,413
======= =======
Diluted per share amounts:
Earnings per share $ .43 $ .46
Funds from operations per share $ .50 $ .54
Adjusted funds from operations per share $ .47 $ .50
Diluted weighted average shares outstanding 24,745 24,714
(*) 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 DISPOSITIONS 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 DISPOSITIONS 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 MAY ALSO INCLUDE AN INCOME TAX
PROVISION OR BENEFIT RECOGNIZED DUE ADJUSTMENTS IN AMOUNTS ACCRUED FOR UNCERTAIN
TAX POSITIONS RELATED TO BEING TAXED AS A C-CORP., RATHER THAN AS A REIT, 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 TAXES. INCOME TAXES DID NOT HAVE A SIGNIFICANT IMPACT ON OUR
EARNINGS FOR THE PERIODS PRESENTED, AND ACCORDINGLY, DO NOT APPEAR AS A SEPARATE
ITEM IN OUR STATEMENT OF OPERATIONS OR RECONCILIATION OF AFFO FROM NET EARNINGS.
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 THESE
MEASURES SHOULD NOT BE CONSIDERED AN ALTERNATIVE FOR GAAP NET EARNINGS OR AS A
MEASURE OF LIQUIDITY.