8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    February 25, 2013

Getty Realty Corp.

(Exact name of registrant as specified in charter)

Maryland (State of Organization) 001-13777 (Commission File Number) 11-3412575 (IRS Employer Identification No.)

125 Jericho Turnpike, Suite 103
Jericho, New York	11753
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, including area code: (516) 478-5400

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ] Written communications pursuant to Rule 425 under the Securities Act

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 1.01 Entry into Material Definitive Agreement

On February 25, 2013, Getty Realty Corp. (the “Company”) entered into a $175 million senior secured revolving credit facility (the “Credit Agreement”) with a group of banks led by J.P. Morgan Chase Bank, N.A., (the “Bank Syndicate”) which is scheduled to mature in August 2015. Subject to the terms of the Credit Agreement, the Company has the option to extend the term of the Credit Agreement for one additional year to August 2016. The Credit Agreement allocates $25 million of the total Bank Syndicate commitment to a term loan and $150 million to a revolving facility. Subject to the terms of the Credit Agreement, the Company has the option to increase by $50 million the amount of the revolving facility to $200 million. The Credit Agreement permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 1.50% to 2.00% or a LIBOR rate plus a margin of 2.50% to 3.00% based on our leverage at the end of each quarterly reporting period.  The annual commitment fee on the undrawn funds under the Credit Agreement is 0.30% to 0.40% based our leverage at the end of each quarterly reporting period. The Credit Agreement does not provide for scheduled reductions in the principal balance prior to its maturity.

The Credit Agreement provides for security in the form of, among other items, mortgage liens on certain of the Company’s properties.  The parties to the Credit Agreement and the Prudential Loan Agreement (as defined below) share the security pursuant to the terms of an inter-creditor agreement.  The Credit Agreement contains customary financial covenants such as loan to value, leverage and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The Credit Agreement contains customary events of default, including default under the Prudential Loan Agreement, change of control and failure to maintain REIT status. Any event of default, if not cured or waived, could result in the acceleration of the Company’s indebtedness under the Credit Agreement and could also give rise to an event of default and could result in the acceleration of the Company’s indebtedness under the Prudential Loan Agreement.

In addition, on February 25, 2013, the Company entered into a $100 million senior secured long-term loan agreement with the Prudential Insurance Company of America (the “Prudential Loan Agreement”), which matures in February 2021.  The Prudential Loan Agreement bears interest at 6.00%. The Prudential Loan Agreement does not provide for scheduled reductions in the principal balance prior to its maturity. The Prudential Loan Agreement contains customary financial covenants such as loan to value, leverage and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The Prudential Loan Agreement contains customary events of default, including default under the Credit Agreement and failure to maintain REIT status. Any event of default, if not cured or waived, could result in the acceleration of the Company’s indebtedness under the Prudential Loan Agreement and could also give rise to an event of default and could result in the acceleration of the Company’s indebtedness under the Credit Agreement.

The Company repaid its debt outstanding as of December 31, 2012 with cash on hand and $171.9 million of borrowings under the Credit Agreement and the Prudential Loan Agreement.

Item 1.02 Termination of a Material Definitive Agreement

On February 25, 2013, the Company used cash on hand and proceeds from the Credit Agreement and the Prudential Loan Agreement to repay all amounts then outstanding under its $175 million amended and restated senior secured revolving credit agreement with a group of commercial banks led by JPMorgan Chase Bank, N.A., which was scheduled to mature on March 9, 2013 (“Prior Credit Facility”), and its $25 million amended term loan agreement with TD Bank, which was scheduled to mature on March 31, 2013 (“Prior Term Loan”).  Each of the Prior Credit Facility and the Prior Term Loan was terminated on February 25, 2013.

Item 2.02. Results of Operations and Financial Condition

On February 28, 2013, Getty Realty Corp. announced its preliminary financial results for the quarter and year ended December 31, 2012.

A copy of the press release announcing these financial results is attached as Exhibit 99.1.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant

On February 25, 2013, the Company entered into the Credit Agreement and the Prudential Loan Agreement. The description of the terms of the Credit Agreement and the Prudential Loan Agreement as set forth above in Item 1.01 are hereby incorporated by reference into this Item.

Item 9.01. Financial Statements and Exhibits

(d)  Exhibits

Exhibit
Number	Description
99.1	Press Release, dated February 28, 2013, issued by Getty Realty Corp.

The information contained in Item 2.02 and Exhibit 99.1 to this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Such information in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GETTY REALTY CORP.
Date: February 28, 2013	By:	/s/ Thomas J. Stirnweis
		Thomas J. Stirnweis
		Vice President and Chief
		Financial Officer

INDEX TO EXHIBITS

Exhibit	Description
Exhibit 99.1	Press Release, dated February 28, 2013, issued by Getty Realty Corp.

EX-99.1

Exhibit 99.1

RELEASE: IMMEDIATE

GETTY REALTY CORP. ANNOUNCES PRELIMINARY FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2012

- Funds From Operations of $8.9 Million, or $0.26 Per Share -

- Adjusted Funds From Operations of $7.4 Million, or $0.22 Per Share -

- Net Income of $5.8 Million, or $0.17 Per Share -

- Enters into $275 Million of New Debt Financings -

- 2013 First Quarter Dividend Increased by 60% to $0.20 Per Common Share -

JERICHO, NY, February 28, 2013 --- Getty Realty Corp. (NYSE-GTY) (“Getty” or the “Company”) announced its preliminary financial results for the quarter and year ended December 31, 2012, the refinancing of its outstanding debt with a new $175 million credit facility and a $100 million long-term senior secured term loan.

David B. Driscoll, Getty’s President and CEO commented, “We became a fundamentally new company during 2012 as we largely completed a significant transformation resulting from the repositioning of our properties formerly leased to Getty Petroleum Marketing.  By year end we had largely completed our re-leasing program and we believe that during the first six months of 2013 we will achieve stabilized levels of operating performance. In addition, we have been able to refinance our maturing debt with a combination of bank debt and attractively priced long-term fixed rate debt. This refinance not only strengthens our balance sheet, it also provides the Company with ample capacity to fund additional growth as we move forward. Together, these positive developments have provided us with the confidence to raise our dividend for the first quarter by 60% over the previous quarterly dividend rate declared in 2012. As we move further into 2013, we have re-initiated our pursuit of growth via accretive acquisitions to create additional value for our shareholders.”

Financial Results:

Net Earnings:

The Company reported net earnings for the quarter ended December 31, 2012 of $5.8 million, or $0.17 per share, which increased by $25.3 million as compared to a net loss of $19.5 million, or $0.58 per share, for the quarter ended December 31, 2011. Net earnings for the year ended December 31, 2012 decreased by $0.1 million to $12.4 million, or $0.37 per share, as compared to $12.5 million, or $0.37 per share, for the year ended December 31, 2011.

All per share amounts in this press release are presented on a fully diluted per common share basis, unless stated otherwise.

Results for the quarter and year ended December 31, 2012 continued to be materially affected by events related to the bankruptcy and ongoing liquidation of Getty Petroleum Marketing Inc. (“Marketing”) and the repositioning of the remaining portfolio of properties which were previously subject to the Master Lease with Marketing, resulting in a reduction in the net contribution from this portfolio of properties.

The Company’s quarterly and annual results for 2012 and 2011 include significant adjustments and costs related to Marketing’s bankruptcy and the repositioning of the portfolio of properties previously leased to Marketing such as impairment charges, provisions for bad debts and straight-line rent receivable reserves. In addition, the Company is still incurring legal fees, other professional fees, environmental remediation costs and property operating expenses related to the bankruptcy and repositioning of the portfolio of properties previously leased to Marketing. The impact of these adjustments and expenditures make comparisons of performance for 2012 and 2011 less meaningful.

Adjusted Funds From Operations and Funds From Operations:

Adjusted Funds From Operations (AFFO) was $7.4 million, or $0.22 per share, for the quarter ended December 31, 2012, as compared to $8.6 million, or $0.26 per share, for the quarter ended December 31, 2011. AFFO for the year ended December 31, 2012 was $28.8 million, or $0.86 per share, versus $62.7 million, or $1.88 per share, for the year ended December 31, 2011.

Funds From Operations (FFO) increased by $8.6 million to $8.9 million, or $0.26 per share, for the quarter ended December 31, 2012, as compared to $0.3 million, or $0.01 per share, for the quarter ended December 31, 2011.  FFO for 2012 was $33.2 million, or $0.99 per share, as compared to $42.1 million, or $1.26 per share, for 2011.

AFFO and FFO are supplemental non-GAAP measures of the performance of real estate investment trusts. The Company pays particular attention to AFFO, a supplemental non-GAAP measure helpful to investors in measuring the Company’s fundamental operating performance. In accordance with the National Association of Real Estate Investment Trusts’ modified guidance for reporting FFO, Getty has restated reporting of FFO for all periods presented to exclude non-cash impairment charges.  Details about this change, related definitions and reconciliations to net earnings can be found in the financial tables at the end of this release.

Operating Income:

Total revenues included in continuing operations were $24.3 million for the quarter ended December 31, 2012, as compared to $28.4 million for quarter ended December 31, 2011. The $4.1 million decrease in revenues was primarily due to lower rental revenue realized from new triple-net leases for  properties previously subject to the Master Lease. In addition, revenues were affected by rent escalations, dispositions of certain real estate, lease expirations and non-cash revenue recognition adjustments.

Total revenues included in continuing operations were $102.2 million for the year ended December 31, 2012, as compared to $102.9 million for the year ended December 31, 2011.  Revenues included in continuing operations increased in 2012 as a result of the full year impact of the March 2011 Nouria acquisition offset by lower rental revenue realized from new triple-net leases for properties previously subject to the Master Lease. In addition, revenues were affected by rent escalations, dispositions of certain real estate, lease expirations and non-cash revenue recognition adjustments.

Rental property expenses included in continuing operations were $8.8 million and $30.2 million for the quarter and year ended December 31, 2012 as compared to $5.9 million and $16.0 million for the quarter and year ended December 31, 2011. The increases in rental property expenses were primarily related to Marketing’s bankruptcy resulting in increases in real estate taxes paid by the Company and reimbursed as additional rent paid by its tenants and unreimbursed real estate taxes and maintenance expenses paid by the Company.

Environmental expenses included in continuing operations for the quarter and year ended December 31, 2012 was $0.4 million and $0.8 million as compared to $1.7 million and $5.6 million for the quarter and year ended December 31, 2011. The decreases in environmental expenses were principally due to lower provisions for litigation loss reserves and changes in estimated environmental remediation costs and lower legal fees.

General and administrative expenses included in continuing operations was $3.3 million for the quarter ended December 31, 2012 as compared to $11.8 million recorded for the quarter ended December 31, 2011. The $8.5 million decrease in general and administrative expenses was principally due to a $7.3 million provision for bad debts recorded in the fourth quarter of 2011, modestly offset by higher employee related expenses and legal fees recorded in the quarter.

General and administrative expenses included in continuing operations was $29.1 million for the year ended December 31, 2012 as compared to $22.1 million recorded for the year ended December 31, 2011. The $7.0 million increase in general and administrative expenses was principally due to a $5.9 million increase in provision for bad debts and increased legal fees related to the Marketing Bankruptcy.

Non-cash impairment charges of $2.2 million and $6.3 million are included in continuing operations for the quarter and year ended December 31, 2012, respectively, as compared to $13.4 million and $15.9 million recorded for the quarter and year ended December 31, 2011, respectively. The non-cash impairment charges recorded during the quarter and year ended December 31, 2012 were attributable to reductions in the Company’s estimates of value for properties held for sale and the accumulation of asset retirement costs as a result of an increase in estimated environmental liabilities which increased the carrying value of certain properties above their fair value. The non-cash impairment charges recorded for the quarter and year ended December 31, 2011 were attributable to recording Marketing’s environmental liabilities and reductions in the Company’s estimates of value for properties marketed for sale. Impairment charges vary from period to period and accordingly, undue reliance should not be placed on the magnitude or the directions of change in impairment charges for one period as compared to prior periods.

Earnings from discontinued operations increased by $4.4 million to $1.4 million for the quarter ended December 31, 2012, as compared to a loss of $3.0 million for the quarter ended December 31, 2011. Earnings from discontinued operations decreased by $4.4 million to a loss of $1.4 million for the year ended December 31, 2012, as compared to earnings of $3.0 million for the year ended December 31, 2011. The decrease in earnings from discontinued operations for the full year 2012 was primarily due to higher impairment charges and lower rental revenue partially offset by an increase in gains on dispositions of real estate. Gains on disposition of real estate and impairment charges vary from period to period and accordingly, undue reliance should not be placed on the magnitude or the directions of change in reported gains and impairment charges for one period as compared to prior periods.

Recent Developments:

As previously disclosed, the Company continues to reposition the properties previously leased to Marketing under the Master Lease.

As a continuation of the repositioning process and the ongoing liquidation of Marketing, during the fourth quarter of 2012, the Company:

●      Entered into four triple-net lease agreements covering 161 operating properties with affiliates of Capital Petroleum Group, Lehigh Gas Partners, Global Partners and BP North America. The properties are located in New York City and the surrounding New York and New Jersey metropolitan areas. The leases have 15 year initial terms with provisions for renewal terms and annual rent escalations.

●      Sold 25 properties bringing the total number of properties sold in 2012 to 54. Thus far in 2013, the Company has sold 35 properties and one terminal property. To date, the Company has generated $31.6 million of proceeds from these dispositions.

●      Continued to enforce the Company’s rights through eviction proceedings involving certain of its properties in various jurisdictions against Marketing’s former subtenants (or sub-subtenants) who have not vacated properties and occupy the Company’s properties without rights. The Company is incurring costs, primarily legal expenses, in connection with such proceedings.

Refinancing Activities:

On February 25, 2013, the Company entered into new debt commitments of $275 million consisting of a $175 million senior secured revolving credit facility with J.P. Morgan Chase Bank, N.A., as Administrative Agent (the “Credit Agreement”) and a $100 million long-term term loan with The Prudential Insurance Company of America (the “Prudential Loan Agreement”). The Credit Agreement matures in August 2015 and bears interest at a margin of 250 to 300 bps over LIBOR based on the Company’s total leverage and the Prudential Loan Agreement matures in February 2021 and bears interest at 6.00%. Neither the Credit Agreement nor the Prudential Loan Agreement provide for scheduled reductions in the principal balance prior to maturity. Subject to the terms of the Credit Agreement, the Company has the option to extend the term of the Credit Agreement for one additional year to August 2016. The Company also has the option to increase by $50 million the amount of the Credit Agreement to $225 million.

The Company used cash on hand and proceeds from the Credit Agreement and the Prudential Loan Agreement to repay all amounts then outstanding under its $175 million amended and restated senior secured revolving credit agreement which was scheduled to mature on March 9, 2013 and its $25 million amended term loan agreement with TD Bank, which was scheduled to mature on March 31, 2013.

2013 First Quarter Cash Dividend on Common Shares:

The Company’s Board of Directors unanimously approved an increase in the 2013 first quarter cash dividend to $0.20 per common share payable on April 11, 2013 to shareholders of record on March 31, 2013. The increase of $0.075 per share represents a 60% increase over the previous quarterly dividend rate declared in 2012.

Guidance:

Historically, the Company has not issued guidance and does not intend to establish a policy of doing so in the future. However, the Company has elected to provide guidance for the year ended December 31, 2013 since its historical financial results have been significantly impacted by the events of the past year and the ongoing repositioning of the Marketing portfolio which makes the Company’s current results inconsistent with the Company’s historical performance. The ongoing repositioning of the Marketing portfolio and other factors are expected to disproportionately negatively impact the Company’s results during the first two quarters of 2013.

At this time, the Company is providing the following guidance for 2013: FFO for the year ended December 31, 2103 is expected to be between $0.94 and $1.02 per share on a fully diluted basis and AFFO for the year ended December 31, 2103 is expected to be between $0.82 and $0.90 per share on a fully diluted basis.

The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the Company's reports filed with the Securities and Exchange Commission.

Conference Call Information:

Getty Realty Corp.’s Fourth Quarter Earnings Conference Call is scheduled for tomorrow, Friday, March 1, 2013 at 9:00 a.m. Eastern Time. To participate in the conference call, please dial (888) 254-2821 ten minutes before the scheduled start time and reference pass code 3371954. If you cannot participate in the live event, a replay will be available on March 1, 2013 beginning at 12:00 noon Eastern Time through 12:00 midnight Eastern Time, March 8, 2013. To access the replay, please dial (877) 870-5176, or (858) 384-5517 for international participants, and reference pass code 3371954.

About Getty:

Getty Realty Corp. is the leading publicly-traded real estate investment trust in the United States specializing in ownership, leasing and financing of convenience store/gas station properties and petroleum distribution terminals. The Company currently owns and leases approximately 1,050 properties nationwide.

Forward Looking Statements:

CERTAIN STATEMENTS CONTAINED HEREIN 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”, “ANTICIPATES” AND SIMILAR EXPRESSIONS ARE USED, 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 OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE THE STATEMENTS MADE BY MR. DRISCOLL AND THE COMPANY’S FFO AND AFFO GUIDANCE.

INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN BE FOUND IN THE COMPANY’S PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY 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)
	December 31,			December 31,
	2012			2011
Assets:
Real Estate:
Land	$	336,223		$	345,473
Buildings and improvements		226,093			270,381
		562,316			615,854
Less – accumulated depreciation and amortization		(116,768	)		(137,117	)
Real estate, net		445,548			478,737
Net investment in direct financing leases		91,904			92,632
Deferred rent receivable (net of allowance of $25,630 as of December 31, 2011)		12,448			8,080
Cash and cash equivalents		16,876			7,698
Notes, mortgages and accounts receivable (net of allowance of $25,371 at December 31, 2012 and $9,480 at December 31, 2011)		41,865			36,083
Prepaid expenses and other assets		31,940			11,859
Total assets	$	640,581		$	635,089
Liabilities and Shareholders' Equity:
Borrowings under credit line	$	150,290		$	147,700
Term loan		22,030			22,810
Environmental remediation costs		46,114			57,700
Dividends payable		4,202			—
Accounts payable and accrued expenses		45,196			34,710
Total liabilities		267,832			262,920
Commitments and contingencies		—			—
Shareholders' equity:
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 33,396,720 at December 31, 2012 and 33,394,395 at December 31, 2011		334			334
Paid-in capital		461,426			460,687
Dividends paid in excess of earnings		(89,011	)		(88,852	)
Total shareholders' equity		372,749			372,169
Total liabilities and shareholders' equity	$	640,581		$	635,089

GETTY REALTY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three months ended December 31,						Year ended December 31,
	2012			2011			2012			2011
Revenues from rental properties	$	23,493		$	27,593		$	99,286		$	100,263
Interest on notes and mortgages receivable		775			757			2,882			2,658
Total revenues		24,268			28,350			102,168			102,921
Operating expenses:
Rental property expenses		8,750			5,940			30,232			16,023
Impairment charges		2,246			13,434			6,328			15,904
Environmental expenses		433			1,719			774			5,597
General and administrative expenses		3,287			11,757			29,116			22,065
Allowance for deferred rental revenue		—			8,336			—			19,288
Depreciation and amortization expense		2,389			2,513			12,541			9,511
Total operating expenses		17,105			43,699			78,991			88,388
Operating income (loss)		7,163			(15,349	)		23,177			14,533
Other income (expense), net		59			(63	)		562			16
Interest expense		(2,860	)		(1,046	)		(9,931	)		(5,125	)
Earnings (loss) from continuing operations		4,362			(16,458	)		13,808			9,424
Discontinued operations:
Earnings (loss) from operating activities		(1,580	)		(3,363	)		(8,199	)		2,084
Gains from dispositions of real estate		3,019			339			6,838			948
Earnings (loss) from discontinued operations		1,439			(3,024	)		(1,361	)		3,032
Net earnings (loss)	$	5,801		$	(19,482	)	$	12,447		$	12,456
Basic and diluted earnings (loss) per common share:
Earnings (loss) from continuing operations	$	.13		$	(.49	)	$	.41		$	.28
Earnings (loss) from discontinued operations	$	.04		$	(.09	)	$	(.04	)	$	.09
Net earnings (loss)	$	.17		$	(.58	)	$	.37		$	.37
Weighted-average shares outstanding:
Basic		33,396			33,394			33,395			33,171
Stock options and restricted stock units		—			—			—			1
Diluted		33,396			33,394			33,395			33,172

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 December 31,						Year ended December 31,
	2012			2011			2012			2011
Net earnings (loss)	$	5,801		$	(19,482	)	$	12,447		$	12,456
Depreciation and amortization of real estate assets		2,734			2,982			13,700			10,336
Gains from dispositions of real estate		(3,047	)		(339	)		(6,866	)		(968	)
Impairment charges		3,390			17,132			13,942			20,226
Funds from operations		8,878			293			33,223			42,050
Allowance for deferred rental revenue		—			8,715			—			19,758
Revenue recognition adjustments		(1,439	)		(369	)		(4,433	)		(1,163	)
Acquisition costs		—			—			—			2,034
Adjusted funds from operations	$	7,439		$	8,639		$	28,790		$	62,679
Diluted per share amounts:
Earnings (loss) per share	$	0.17		$	(0.58	)	$	0.37		$	0.37
Funds from operations per share	$	0.26		$	0.01		$	0.99		$	1.26
Adjusted funds from operations per share	$	0.22		$	0.26		$	0.86		$	1.88
Diluted weighted average shares outstanding		33,396			33,394			33,395			33,172

In addition to measurements defined by accounting principles generally accepted in the United States of America (“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. In accordance with the National Association of Real Estate Investment Trusts’ modified guidance for reporting FFO, Getty has restated reporting of FFO for all periods presented to exclude non-cash impairment charges. 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 (including such non-FFO items reported in discontinued operations), non-cash impairment charges, extraordinary items and cumulative effect of accounting change. Other REITs may use definitions of FFO and/or AFFO that are different than Getty’s and; accordingly, may not be comparable. Beginning in 2011, Getty revised its definition of AFFO to exclude direct expensed costs related to property acquisitions and other unusual or infrequently occurring items.

FFO excludes various items such as gains or losses from property dispositions and depreciation and amortization of real estate assets and non-cash impairment charges. In Getty’s case, however, GAAP net earnings and FFO typically include the impact of the “Revenue Recognition Adjustments” comprised of deferred rental revenue (straight-line rental revenue), the net amortization of above-market and below-market leases and income recognized from direct financing leases on Getty’s recognition of revenues from rental properties, as offset by the impact of related collection reserves. GAAP net earnings and FFO from time to time may also include property acquisition costs or other unusual or infrequently recurring items. Deferred rental revenue results primarily from fixed rental increases scheduled under certain leases with Getty’s tenants. In accordance with GAAP, the aggregate minimum rent due over the current term of these leases are recognized on a straight-line (or average) basis rather than when payment is contractually due. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. Income from direct financing leases is recognized over the lease terms using the effective interest method which produces a constant periodic rate of return on the net investments in the leased properties. Property acquisition costs are expensed, generally in the period when properties are acquired, and are not reflective of normal operations. Other unusual or infrequently occurring items are not reflective of normal operations.

Getty pays particular attention to AFFO, a supplemental non-GAAP performance measure that Getty defines as FFO less Revenue Recognition Adjustments, property acquisition costs and other unusual or infrequently occurring items. In Getty’s view, AFFO provides a more accurate depiction than FFO of Getty’s fundamental operating performance related to: (i) the impact of scheduled rent increases from operating leases, net of related collection reserves; (ii) the rental revenue earned from acquired in-place leases; (iii) the impact of rent due from direct financing leases; (iv) Getty’s operating expenses (exclusive of direct expensed operating property acquisition costs); and (v) other unusual or infrequently occurring items. 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.

SUPPLEMENTAL TAX REPORTING INFORMATION FOR
COMMON DIVIDENDS PAID
YEAR ENDED DECEMBER 31, 2012
				Box 1a		Box 2a		Box 3
		Total		Total		Total
Record	Paid	Dividends		Ordinary		Capital Gain		Non-Dividend
Date	Date	Per Share		Dividends		Distributions		Distributions
06/28/2012	07/12/2012	$	0.125000	$	0.010913	$	0.067080	$	0.047007
09/27/2012	10/11/2012		0.125000		0.010913		0.067080		0.047007
12/27/2012	01/10/2013		0.077993		0.010913		0.067080		0.000000
Totals		$	0.327993	$	0.032739	$	0.201240	$	0.094014

The dividend paid on January 10, 2013 excludes $.047007 per share which was allocated to 2013. The total dividend paid was $0.1250 per share.

Contact          Thomas J. Stirnweis

(516) 478-5403