EXHIBIT 99.1
RELEASE: IMMEDIATE
GETTY REALTY CORP. ANNOUNCES
FINANCIAL RESULTS FOR THE QUARTER AND SIX MONTHS
ENDED JUNE 30, 2006
JERICHO, NY, AUGUST 1, 2006 --- Getty Realty Corp. (NYSE-GTY) today
reported its financial results for the quarter and six months ended June 30,
2006.
Net earnings for the quarter ended June 30, 2006 increased by $0.9 million,
or 9.0%, to $11.1 million as compared to $10.2 million reported for the prior
year period. Net earnings were $21.6 million for the six months ended June 30,
2006 as compared to $21.7 million reported for the prior year period.
The increase in net earnings for the quarter resulted from additional
rental income from the properties acquired in February 2006 and rent
escalations, lower operating expenses and higher other income from gains on
dispositions of real estate, partially offset by higher interest expense. Net
earnings for the six months reflect additional rental income from the properties
acquired in February 2006 and March 2005, rent escalations and higher other
income from gains on dispositions of real estate, offset by higher environmental
and interest expenses resulting in a slight decrease in net earnings as compared
to the prior year period.
FFO increased by $0.4 million, or 3.3%, to $12.7 million for the quarter
ended June 30, 2006 and AFFO increased by $0.6 million, or 5.5%, to $11.9
million as compared to the prior year period. FFO decreased by $0.5 million, or
1.9%, to $25.1 million for the six months ended June 30, 2006 and AFFO decreased
by $0.2 million, or 1.0% to $23.5 million as compared to the prior year period.
The increase in FFO and AFFO for the quarter and the decrease in FFO and
AFFO for the six month period were primarily due to the changes in net earnings
described above but exclude the improvement in earnings due to higher gains on
dispositions of properties of $0.4 million for both the quarter and the six
month periods. AFFO increased more than FFO for the quarter and decreased less
than FFO for the six month period, on both a dollar and percentage basis, due to
decreases in deferred rental revenues (which are included in net earnings and
FFO but are excluded from AFFO) of $0.2 million for the quarter and $0.3 million
for the six months ended June 30, 2006, 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.
Diluted earnings per share increased by $0.04 per share, or 9.8%, to $0.45
per share for the three months ended June 30, 2006 as compared to the three
months ended June 30, 2005. Diluted FFO per share increased by $0.01 per share,
or 2.0%, to $0.51 per share as compared to the three months ended June 30, 2005.
Diluted AFFO per share increased by $0.02 per share, or 4.3%, to $0.48 per share
for the three months ended June 30, 2006 as compared to the three months ended
June 30, 2005.
Diluted earnings per share decreased by $0.01 per share, or 1.0%, to $0.87
per share for the six months ended June 30, 2006 compared to the six months
ended June 30, 2005. Diluted FFO per share decreased $0.03 per share or, 2.9% to
$1.01 per share as compared to the six months ended June 30, 2005 and diluted
AFFO per share for the six months ended June 30, 2006 decreased $0.01 per share,
or 1.0% to $0.95 per share as compared to the six months ended June 30, 2005.
Revenues from rental properties increased by $0.3 million to $18.2 million
for the quarter and by $1.0 million to $36.2 million for the six months ended
June 30, 2006, as compared to $17.9 million and $35.3 million for the respective
prior year periods. Rent received was $17.4 million for the quarter and $34.7
million for the six months ended June 30, 2006, as compared with $16.9 million
for the quarter and $33.4 million for the six months period ended in 2005. The
increases in rent received were primarily due to rental income from property
acquisitions and rent escalations. In addition to rent received, revenues from
rental properties include deferred rental revenues accrued due to recognition of
rental income on a straight-line basis of $0.8 million for the quarter and $1.6
million for the six months ended June 30, 2006, as compared to $1.0 million and
$1.9 million for the respective prior year periods.
Environmental expenses, net for the quarter ended June 30, 2006 decreased
by $0.5 million to $0.8 million as compared to $1.3 million for the quarter
ended June 30, 2005. The decrease was primarily due to a $0.7 million decrease
in the change in estimated environmental costs. Environmental expenses, net for
the six months ended June 30, 2006 increased by $0.5 million to $1.9 million as
compared to $1.4 million for the six months ended June 30, 2005. The increase
was primarily due to a $0.9 million increase in legal fees and litigation
related expenses, offset by a $0.5 million decrease in the change in estimated
environmental costs.
Interest expense increased by $0.5 million to $0.9 million for the quarter
and by $1.0 million to $1.6 million for the six months ended June 30, 2006 as
compared to $0.5 million and $0.6 million for the respective prior year periods.
Interest expense increased primarily due to borrowings used to finance the
acquisition of properties. Interest expense also increased due to increased
interest rates that averaged 6.13% for the six months ended June 30, 2006, as
compared to 4.14% for the six months ended June 30, 2005. Getty Realty Corp.
entered into a five year interest rate swap which effectively fixed the interest
rate on $45.0 million of its borrowings at 6.69% effective May 1, 2006.
Getty Realty Corp.'s Second Quarter Earnings Conference Call is scheduled
for tomorrow, Wednesday, August 2, 2006 at 9:00 a.m. Eastern Time. To
participate in the conference call, please dial 719-457-2734 five to ten minutes
before the scheduled start time and reference pass code 7581458. If you cannot
participate in the live event, a replay will be available beginning on August 2,
2006 at noon though midnight, August 4, 2006. To access the replay, please dial
719-457-0820 and reference pass code 7581458.
Getty Realty Corp. is the largest publicly-traded real estate investment
trust in the United States specializing in ownership and leasing of motor
fuel/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 (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)
June 30, December 31,
2006 2005
--------- ------------
Assets:
Real Estate:
Land $ 180,602 $ 171,839
Buildings and improvements 204,340 198,656
--------- ---------
384,942 370,495
Less - accumulated depreciation and amortization (113,170) (109,800)
--------- ---------
Real estate, net 271,772 260,695
Deferred rent receivable 30,883 29,287
Cash and equivalents 862 1,247
Recoveries from state underground storage tank funds, net 4,010 4,264
Mortgages and accounts receivable, net 3,908 3,129
Prepaid expenses and other assets 1,307 1,359
--------- ---------
Total assets $ 312,742 $ 299,981
========= =========
Liabilities and Shareholders' Equity:
Debt $ 48,509 $ 34,224
Environmental remediation costs 16,751 17,350
Dividends payable 11,269 11,009
Accounts payable and accrued expenses 8,724 9,515
--------- ---------
Total liabilities 85,253 72,098
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 24,731,465 at
June 30, 2006 and 24,716,614 at December 31, 2005 247 247
Paid-in capital 258,085 257,766
Dividends paid in excess of earnings (31,020) (30,130)
Accumulated other comprehensive income 177 --
--------- ---------
Total shareholders' equity 227,489 227,883
--------- ---------
Total liabilities and shareholders' equity $ 312,742 $ 299,981
========= =========
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months Six months
ended June 30, ended June 30,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
Revenues from rental properties $18,180 $17,872 $36,247 $35,268
Operating expenses:
Rental property expenses 2,488 2,560 4,972 5,184
Environmental expenses, net 810 1,348 1,911 1,411
General and administrative expenses 1,333 1,289 2,740 2,600
Depreciation and amortization expense 1,996 2,065 3,912 4,014
------- ------- ------- -------
Total operating expenses 6,627 7,262 13,535 13,209
------- ------- ------- -------
Operating income 11,553 10,610 22,712 22,059
Other income, net 477 55 559 191
Interest expense (918) (451) (1,628) (600)
------- ------- ------- -------
Net earnings $11,112 $10,214 $21,643 $21,650
======= ======= ======= =======
Net earnings per common share:
Basic $ .45 $ .41 $ .88 $ .88
Diluted $ .45 $ .41 $ .87 $ .88
Weighted average shares outstanding:
Basic 24,725 24,714 24,721 24,707
Stock options and restricted stock units 22 14 25 14
------- ------- ------- -------
Diluted 24,747 24,728 24,746 24,721
======= ======= ======= =======
Dividends declared per share $ .455 $ .435 $ .910 $ .870
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 Six months
ended June 30, ended June 30,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
Net earnings $11,112 $10,214 $21,643 $21,650
Depreciation and amortization
of real estate assets 1,996 2,065 3,912 4,014
Gains on dispositions of real estate (423) -- (457) (72)
------- ------- ------- -------
Funds from operations 12,685 12,279 25,098 25,592
Deferred rental revenue
(straight-line rental revenue) (773) (985) (1,596) (1,885)
------- ------- ------- -------
Adjusted funds from operations $11,912 $11,294 $23,502 $23,707
======= ======= ======= =======
Diluted per share amounts:
Earnings per share $ .45 $ .41 $ .87 $ .88
Funds from operations per share $ .51 $ .50 $ 1.01 $ 1.04
Adjusted funds from operations
per share $ .48 $ .46 $ .95 $ .96
Diluted weighted average shares
outstanding 24,747 24,728 24,746 24,721
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 TO 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 GETTY'S EARNINGS FOR THE PERIODS PRESENTED, AND
ACCORDINGLY, DO NOT APPEAR AS A SEPARATE ITEM IN ITS 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.
Contact Thomas J. Stirnweis
(516) 478-5403