EX-99.1 2 c94921exv99w1.txt PRESS RELEASE EXHIBIT 99.1 RELEASE: IMMEDIATE GETTY REALTY CORP. ANNOUNCES FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2005 JERICHO, NY, MAY 4, 2005 --- Getty Realty Corp., (NYSE-GTY) today reported its financial results for the quarter ended March 31, 2005. Net earnings were $11.4 million for the quarter ended March 31, 2005, as compared with $9.2 million for the comparable prior year period. Net earnings for the quarter ended March 31, 2005 increased by 25%, or $2.3 million, over the comparable period in 2004 due to an increase in rental revenue, primarily attributable to recently acquired properties, and a net decrease in expenses, principally environmental expenses. Funds from operations, or FFO, increased $2.3 million to $13.3 million and adjusted funds from operations, or AFFO, increased $2.5 million to $12.4 million for the quarter ended March 31, 2005 compared to the prior year period principally due to the increase in net earnings described above. AFFO increased more than FFO on both a dollar and percentage basis due to $0.2 million lower deferred rental revenues (which are included in FFO, but excluded from AFFO) recorded for the quarter ended March 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 defined and reconciled to net earnings in the financial tables at the end of this release. Earnings per share for the quarter ended March 31, 2005 increased $0.09 per share to $0.46 per share as compared to the prior year period. FFO per share and AFFO per share each increased $0.10 per share to FFO of $0.54 per share and AFFO of $0.50 per share for the quarter ended March 31, 2005 as compared to the quarter ended March 31, 2004. Revenues from rental properties for the quarter ended March 31, 2005 were $17.4 million as compared to $16.5 million for the prior year period. Rent received for the quarter ended March 31, 2005 was $16.5 million as compared with $15.4 million for the prior year period. The increase in rent received was primarily due to rental income from properties acquired in November 2004 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 revenues accrued due to recognition of rental income on a straight-line basis of $0.9 million for the quarter ended March 31, 2005 and $1.1 million for the prior year period. Environmental expenses, net of estimated recoveries, for the quarter ended March 31, 2005 were $0.1 million, as compared to $1.7 million for the quarter ended March 31, 2004. The decrease was due to a reduction in the net change in estimated environmental costs and accretion expense of $0.8 million and a reduction in legal fees of $0.4 million as compared to the prior year period. The decrease was also due to a $0.5 million credit recorded in the quarter ended March 31, 2005 to reduce environmental litigation loss reserves. The net change in estimated environmental costs and accretion expense aggregated $0.3 million for the current quarter compared to $1.0 million recorded in the comparable period last year. Rental property expenses, general and administrative expenses, depreciation and amortization expense, interest expense and other income, net for the quarter ended March 31, 2005 each were comparable to respective amounts recorded for the prior year period. The results for the quarter ended March 31, 2005 were minimally impacted by the acquisition of 23 convenience store and retail motor fuel fee properties in Virginia that was completed on March 25, 2005. The consolidated balance sheet as of March 31, 2005 includes an aggregate of approximately $29.0 million in land and buildings and improvements related to the acquisition, as well as the debt incurred to finance the transaction. Getty estimates that the acquisition will be accretive to its annualized net earnings, FFO and AFFO in the amount of approximately $0.03, $0.04 and $0.03 per share, respectively. FFO per share is calculated by adding back depreciation and amortization expense of $0.01 per share to net earnings per share. AFFO per share is calculated by subtracting deferred rental revenues of $0.01 per share from FFO per share. Mr. Liebowitz, Getty's Chairman and CEO, stated, "I am excited about the contribution to our bottom line realized from our existing operations and the recently completed acquisitions, which results were in line with our expectations." Mr. Liebowitz added, "I am also pleased with the reduction in our environmental expenses for the current quarter. While our long-term expectation is that these expenses will decline as remediation projects progress through their lifecycle phases to completion, we anticipate that changes in reserves for estimated environmental expenses, net of recoveries from underground storage tank funds, and litigation will continue." Getty Realty's First Quarter Earnings Conference Call is scheduled for tomorrow, Thursday, May 5, 2005 at 9:00 a.m. Eastern Time. To participate in the conference call, please dial 719-457-2649 five to ten minutes before the scheduled start time and reference pass code 8024049. If you cannot participate in the live event, a replay will be available beginning on May 5, 2005 at noon though midnight, May 11, 2005. To access the replay, please dial 719-457-0820 and reference pass code 8024049. 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 1,050 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. EXAMPLES OF SUCH FORWARD-LOOKING STATEMENTS INCLUDE ESTIMATES OF THE ACCRETIVE NATURE OF THE ACQUISITION COMPLETED ON MARCH 25, 2005 AND EXPECTATIONS ABOUT ENVIRONMENTAL EXPENSES AND LITIGATION. -more- GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited)
March 31, December 31, --------- ------------ 2005 2004 --------- ------------ Assets: Real Estate: Land $ 171,891 $ 156,571 Buildings and improvements 199,454 190,019 --------- ------------ 371,345 346,590 Less - accumulated depreciation and amortization (104,908) (106,463) --------- ------------ Real estate, net 266,437 240,127 Deferred rent receivable 26,017 25,117 Cash and equivalents 1,603 15,700 Recoveries from state underground storage tank funds, net 5,583 5,437 Mortgages and accounts receivable, net 4,187 3,961 Prepaid expenses and other assets 545 386 --------- ------------ Total assets $ 304,372 $ 290,728 ========= ============ Liabilities and Shareholders' Equity: Debt $ 38,745 $ 24,509 Environmental remediation costs 20,426 20,626 Dividends payable 10,760 10,495 Accounts payable and accrued expenses 7,958 9,595 --------- ------------ Total liabilities 77,889 65,225 --------- ------------ Commitments and contingencies Shareholders' equity: Common stock, par value $.01 per share; authorized 50,000,000 shares; issued 24,712,861 at March 31, 2005 and 24,694,071 at December 31, 2004 247 247 Paid-in capital 257,599 257,295 Dividends paid in excess of earnings (31,363) (32,039) --------- ------------ Total shareholders' equity 226,483 225,503 --------- ------------ Total liabilities and shareholders' equity $ 304,372 $ 290,728 ========= ============
GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
Three months ended March 31, ----------------------------- 2005 2004 -------- -------- Revenues from rental properties $ 17,396 $ 16,511 Expenses: Rental property expenses 2,624 2,521 Environmental expenses, net 63 1,732 General and administrative expenses 1,311 1,377 Depreciation and amortization expense 1,949 1,836 -------- -------- Total expenses 5,947 7,466 -------- -------- Operating income 11,449 9,045 Other income, net 136 133 Interest expense (149) (21) -------- -------- Net earnings $ 11,436 9,157 ======== ======== Net earnings per share: Basic $ .46 $ .37 Diluted $ .46 $ .37 Weighted average shares outstanding: Basic 24,700 24,671 Diluted 24,714 24,717 Dividends declared per share $ .435 $ .425
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, ---------------------------- 2005 2004 -------- -------- Net earnings $ 11,436 $ 9,157 Depreciation and amortization expense 1,949 1,836 Gains on sales of real estate (72) - -------- -------- Funds from operations 13,313 10,993 Straight-line rent (900) (1,116) -------- -------- Adjusted funds from operations $ 12,413 $ 9,877 ======== ======== Diluted per share amounts (a): Earnings per share $ .46 $ .37 Funds from operations per share $ .54 $ .44 Adjusted funds from operations per share $ .50 $ .40 Diluted weighted average shares outstanding 24,714 24,717
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 PERFORMANCE OF REITS. FFO IS DEFINED BY THE NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS AS NET EARNINGS BEFORE DEPRECIATION AND AMORTIZATION, 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. IN GETTY'S CASE, HOWEVER, GAAP 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 GAAP, THE AGGREGATE MINIMUM RENT DUE OVER THE INITIAL FIFTEEN-YEAR TERM OF THE MASTER LEASE IS RECOGNIZED ON A STRAIGHT-LINE BASIS RATHER THAN WHEN DUE. AS A RESULT, GETTY PAYS PARTICULAR ATTENTION TO AFFO, A SUPPLEMENTAL NON-GAAP PERFORMANCE MEASURE THAT GETTY DEFINES AS FFO LESS STRAIGHT-LINE RENT. IN GETTY'S VIEW, AFFO PROVIDES A MORE ACCURATE DEPICTION OF THE IMPACT OF SCHEDULED RENT INCREASES UNDER THE MASTER LEASE, THAN FFO. 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. (a) Diluted per share amounts are computed by dividing net earnings, funds from operations and adjusted funds from operations, respectively, by the diluted weighted average shares outstanding during the period. Contact: Thomas J. Stirnweis (516) 478-5403