EX-99.1 3 c76984exv99w1.txt PRESS RELEASE, DATED 5/12/03 EXHIBIT 99.1 RELEASE: IMMEDIATE GETTY REALTY CORP. ANNOUNCES FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2003 JERICHO, NY, MAY 12, 2003 --- Getty Realty Corp. (NYSE-GTY) today reported the Company's financial results for the quarter ended March 31, 2003. Net earnings before cumulative effect of accounting change for the quarter ended March 31, 2003 were $9.1 million as compared with $9.3 million for the comparable prior year period. Net earnings for the quarter ended March 31, 2003, which were $8.6 million as compared with $9.3 million for the comparable prior year period, decreased by $0.7 million principally due to the one-time cumulative effect of an accounting change of $0.6 million. Diluted earnings per common share for the quarter ended March 31, 2003 were $.34, as compared with $.37 for the comparable prior year period. Funds from operations ("FFO") for the quarter ended March 31, 2003 were $9.8 million, or $.45 per diluted common share, which is comparable to $10.0 million, or $.45 per diluted common share, for the quarter ended March 31, 2002. Adjusted funds from operations ("AFFO") for the quarter ended March 31, 2003 were $8.4 million which is comparable to $8.3 million for the quarter ended March 31, 2002. Funds from operations ("FFO") is generally considered to be an appropriate supplemental non-GAAP measure of the performance of real estate investment trusts. 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. AFFO is a supplemental non-GAAP measure that we define as FFO less straight-line rent. AFFO is a meaningful supplemental measure of performance due to the significant impact of straight-line rent accounting 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. A reconciliation of net earnings to FFO and AFFO is included in the financial tables at the end of this release. Revenues from rental properties for the quarter ended March 31, 2003 were $16.7 million, which is comparable to $16.9 million for the quarter ended March 31, 2002. Rental income received was $15.3 million for the quarter ended March 31, 2003, which is comparable to $15.2 for the quarter ended March 31, 2002. Revenues from rental properties include $1.4 million and $1.7 million of deferred rental revenue accrued in the current and prior period, respectively, due to recognition of rental revenue on a straight-line basis. Deferred rental revenue is included in net earnings and FFO but is excluded from AFFO as discussed above. General and administrative expenses for the quarter ended March 31, 2003 were $1.3 million which increased by $0.2 million compared to the quarter ended March 31, 2002 primarily due to higher legal fees. Environmental expenses, net of estimated recoveries for the quarter ended March 31, 2003 were $1.5 million which is comparable to $1.6 million for the quarter ended March 31, 2002. Environmental expenses for the quarter ended March 31, 2003 include $1.0 million for the net change in estimated environmental costs, a $0.4 million decrease from the prior period. The decrease in the change in estimated environmental costs was partially offset by accretion expense of $0.2 million recorded in the current quarter due to the increase in present value resulting from the passage of time of the net environmental liability recorded as of January 1, 2003. Due to the adoption of Statement of Financial Standard No. 143 effective January 1, 2003, accrued environmental remediation costs and the related recoveries from state underground storage tank funds were adjusted to their estimated fair value resulting in a one-time cumulative effect of change in accounting charge of $0.6 million. Environmental liabilities and the related assets are currently measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. The net environmental liability was subsequently increased by a portion of the discount initially recognized at January 1, 2003 and, as discussed above, accretion expense was included in environmental expenses during the quarter ended March 31, 2003. Leo Liebowitz, President and CEO stated, "I am pleased that the Company's net earnings and funds from operations for the quarter ended March 31, 2003 remain on target with our expectations. As announced last week, we completed the acquisition of 41 gas station / convenience stores we previously leased in New England for approximately $13.0 million in cash. The purchase will result in the elimination of over $1.3 million of current annual rent expense and the elimination of future rent escalations, which will have a positive impact on our cash flow and funds from operations." Getty Realty's First Quarter Earnings Conference Call is scheduled for tomorrow, Tuesday, May 13, 2003 at 9:00 a.m. Eastern Time. To participate in the conference call, please dial 1-913-981-5548 five to ten minutes before the scheduled start time and reference pass code 602438. If you cannot participate in the live event, a replay will be available beginning immediately after the end of the call though midnight, May 16, 2003. To access the replay, please dial (719) 457-0820 and reference passcode 602438. Getty Realty Corp. is a real estate investment trust specializing in service stations, convenience stores and petroleum marketing terminals. The Company owns and leases approximately 1,100 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 STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
-------------------------------------------------------------------------------- Three months ended March 31, -------------------------------------------------------------------------------- 2003 2002 -------------------------------------------------------------------------------- Revenues: Revenues from rental properties $ 16,677 $ 16,877 Other income, net 354 560 -------------------------- Total revenues 17,031 17,437 -------------------------- Expenses: Rental property expenses 2,912 3,105 Environmental expenses, net 1,547 1,649 General and administrative expenses 1,293 1,078 Depreciation expense 2,139 2,314 Interest expense 33 33 -------------------------- Total expenses 7,924 8,179 -------------------------- Net earnings before cumulative effect of accounting change 9,107 9,258 Cumulative effect of accounting change (550) - -------------------------- Net earnings 8,557 9,258 Preferred stock dividends 1,272 1,272 -------------------------- Net earnings applicable to common shareholders $ 7,285 $ 7,986 ========================== Net earnings per common share: Basic $.34 $.37 Diluted $.34 $.37 Weighted average common shares outstanding: Basic 21,442 21,425 Diluted 21,456 21,435
GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited)
------------------------------------------------------------------------------------------------------ March 31, December 31, ------------------------------------------------------------------------------------------------------ Assets: 2003 2002 ------------------------------------------------------------------------------------------------------ Real Estate: Land $ 135,719 $ 135,372 Buildings and improvements 172,573 172,682 ------------- ------------- 308,292 308,054 Less - accumulated depreciation (95,689) (93,986) ------------- ------------- Real estate, net 212,603 214,068 Cash and equivalents 32,948 33,726 Deferred rent receivable 16,524 15,116 Recoveries from state underground storage tank funds, net 12,988 13,396 Mortgages and accounts receivable, net 4,678 5,193 Prepaid expenses and other assets 924 992 ------------- ------------- Total assets $ 280,665 $ 282,491 ============= ============= ------------------------------------------------------------------------------------------------------ Liabilities and Shareholders' Equity: ------------------------------------------------------------------------------------------------------ Mortgages payable $ 905 $ 923 Dividends payable 10,117 10,379 Accounts payable and accrued expenses 9,285 9,839 Environmental remediation costs 28,491 27,924 ------------- ------------- Total liabilities 48,798 49,065 ------------- ------------- Shareholders' equity: Preferred share, par value $.01 per share; authorized 20,000,000 shares for issuance in series of which 3,000,000 shares are classified as Series A Participating Convertible Redeemable Preferred; issued 2,865,768 at March 31, 2003 and December 31, 2002 71,644 71,644 Common share, par value $.01 per share; authorized 50,000,000 shares; issued 21,442,801 at March 31, 2003 and 21,442,299 at December 31, 2002 214 214 Paid-in capital 186,665 186,664 Dividends paid in excess of earnings (26,656) (25,096) ------------- ------------- Total shareholders' equity 231,867 233,426 ------------- ------------- Total liabilities and shareholders' equity $ 280,665 $ 282,491 ============= =============
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, ---------------------------------------------------------------------------------------- 2003 2002 ---------------------------------------------------------------------------------------- Net earnings $8,557 $9,258 Preferred stock dividends (1,272) (1,272) --------------------------- Net earnings applicable to common 7,285 7,986 shareholders Depreciation expense 2,139 2,314 Gains on sales of real estate (126) (346) Cumulative effect of accounting change 550 - --------------------------- Funds from operations 9,848 9,954 Straight-line rent (1,408) (1,689) --------------------------- Adjusted funds from operations $8,440 $8,265 =========================== Diluted funds from operations per common share (a) $.45 $.45 Diluted weighted average number of common shares outstanding: Used to calculate net earnings per share 21,456 21,435 Assumed conversion of preferred shares 3,242 3,242 --------------------------- Used to calculate funds from operations per share 24,698 24,677 ===========================
(a) Diluted funds from operations per common share is computed by dividing funds from operations by the weighted average number of common share equivalents outstanding during the period and gives effect, for the quarters ended March 31, 2003 and 2002, to the potential dilution from the assumed conversion of Series A Participating Convertible Redeemable Preferred stock into common stock utilizing the if-converted method. The if-converted method adds back the preferred stock dividends of $1,272 to funds from operations, which equates to $11,120 and $11,226 for the quarters ended March 31, 2003 and 2002, respectively, which sums are then divided by the diluted weighted average number of common share equivalents outstanding. FUNDS FROM OPERATIONS ("FFO") IS GENERALLY CONSIDERED TO BE AN APPROPRIATE SUPPLEMENTAL NON-GAAP MEASURE OF THE PERFORMANCE OF REAL ESTATE INVESTMENT TRUSTS. 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 AND WE DEFINE AFFO AS FFO LESS STRAIGHT-LINE RENT. 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 -30-