GTY
$30.80
Getty Realty
($.64)
(2.04%)
Earnings Details
1st Quarter March 2021
Wednesday, April 28, 2021 4:05:00 PM
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Summary

Getty Realty Reaffirms Below Estimates

Getty Realty (GTY) reported 1st Quarter March 2021 earnings of $0.47 per share on revenue of $37.3 million. The consensus earnings estimate was $0.47 per share on revenue of $37.0 million. Revenue grew 5.4% on a year-over-year basis.

The company said it continues to expect 2021 funds from operations of $1.86 to $1.88 per share. The current consensus FFO estimate is $1.92 per share for the year ending December 31, 2021.

Getty Realty Corp is a self-administered and self-managed real estate investment trust. The Company is engaged in the ownership, leasing and financing of retail motor fuel and convenience store properties.

Results
Reported Earnings
$0.47
Earnings Whisper
-
Consensus Estimate
$0.47
Reported Revenue
$37.3 Mil
Revenue Estimate
$37.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Getty Realty Corp. Announces First Quarter 2021 Results

NEW YORK--(BUSINESS WIRE)--Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) announced today its financial results for the quarter ended March 31, 2021.

First Quarter Highlights

  • Net earnings of $0.40 per share
  • Funds From Operations (“FFO”) of $0.44 per share
  • Adjusted Funds From Operations (“AFFO”) of $0.47 per share
  • Invested an aggregate of $30.3 million across nine properties

“The continued stability of our core portfolio and the strength of our tenants’ operating businesses resulted in another quarter of growth at Getty. We delivered strong financial results while effectively executing on our strategic growth plans, including investing more than $30 million in our target asset classes,” stated Christopher J. Constant, Getty’s President & Chief Executive Officer. “As we look ahead, we are excited about the depth of our acquisition and redevelopment pipelines, and believe that our conservatively leveraged balance sheet and access to capital provide ample capacity to support our ongoing focus on growth opportunities.”

Net Earnings

The Company reported net earnings for the quarter ended March 31, 2021 of $17.9 million, or $0.40 per share, as compared to net earnings of $12.7 million, or $0.30 per share, for the same period in 2020.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)

FFO for the quarter ended March 31, 2021 was $19.9 million, or $0.44 per share, as compared to $20.0 million, or $0.47 per share, for the same period in 2020.

AFFO for the quarter ended March 31, 2021 was $20.9 million, or $0.47 per share, as compared to $19.3 million, or $0.46 per share, for the same period in 2020.

All per share amounts are presented on a fully diluted per common share basis, unless stated otherwise. FFO and AFFO are defined and reconciled to net earnings in the financial tables at the end of this release. See “Non-GAAP Financial Measures” below.

Results of Operations

Revenues from Rental Properties

For the quarter ended March 31, 2021, revenues from rental properties increased 6.6%, or $2.3 million, to $37.0 million, as compared to $34.7 million for the same period in 2020, including rental income contractually due from tenants of $33.5 million, as compared to $31.4 million for the same period in 2020.

The growth in revenues from rental properties was primarily due to incremental revenue from properties acquired by the Company in 2020 and the first quarter of 2021, as well as contractual rent increases for certain in-place leases.

Tenant reimbursements included in revenues from rental properties, which consist of real estate taxes and other municipal charges paid by the Company which are reimbursed by tenants pursuant to the terms of triple-net lease agreements, were $3.8 million and $3.3 million for the quarters ended March 31, 2021 and 2020, respectively.

Property Costs

Property costs were $5.3 million for the quarter ended March 31, 2021, as compared to $4.9 million for the same period in 2020.

The change in property costs was principally due to an increase in reimbursable real estate taxes, partially offset by reductions in rent expense and expenses related to property redevelopments.

Environmental Expenses

Environmental expenses were $0.5 million for the quarter ended March 31, 2021, as compared to $0.2 million for the same period in 2020.

The change in environmental expenses was principally due to a $0.5 million increase in environmental remediation costs and estimates, partially offset by a $0.2 million reduction in environmental professional fees.

Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of changes in reported environmental expenses for any one period, or a comparison to prior periods.

General and Administrative Expenses

General and administrative expenses were $5.5 million for the quarter ended March 31, 2021, as compared to $4.1 million for the same period in 2020.

General and administrative expenses increased approximately $1.2 million principally due to non-recurring retirement costs, other employee-related expenses and certain professional fees.

Impairment Charges

Impairment charges were $0.8 million for the quarter ended March 31, 2021, as compared to $1.0 million for the same period in 2020.

Impairment charges for the quarter ended March 31, 2021 were primarily attributable to the accumulation of asset retirement costs at certain properties as a result of changes in estimated environmental liabilities, which increased the carrying values of these properties in excess of their fair values.

Portfolio and Redevelopment Activities

Acquisitions

During the quarter ended March 31, 2021, the Company acquired fee simple interests in six car wash properties for $21.9 million. The properties are located in the Cincinnati (OH), Lexington (KY), Louisville (KY) and San Antonio (TX) metropolitan areas.

In addition, the Company advanced construction loans in the amount of $8.4 million, including accrued interest, for the development of three new-to-industry convenience stores in the Charleston (SC) metropolitan area. The Company expects to acquire the properties via a sale-leaseback transaction at the end of the construction period.

Redevelopments

As of March 31, 2021, the Company was actively redeveloping six properties and was in various stages of feasibility planning for the recapture of other select properties from its net lease portfolio that are suitable for redevelopment, including five properties for which the Company has signed new leases or letters of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.

Dispositions

During the quarter ended March 31, 2021, the Company sold five properties for aggregate gross proceeds of $8.4 million and recorded a gain of $7.3 million on the dispositions.

Balance Sheet

As of March 31, 2021, the Company had $525.0 million of outstanding indebtedness with a weighted average interest rate of 4.2% and weighted average maturity of 7.3 years.

The Company’s indebtedness consisted of an aggregate principal amount of $525.0 million of senior unsecured notes. There were no borrowings outstanding under the Company’s bank credit agreement which provides the Company with $300.0 million of undrawn capacity on its unsecured revolving credit facility.

Total cash and cash equivalents were $33.8 million as of March 31, 2021.

2021 Guidance

The Company reaffirms its 2021 AFFO guidance of $1.86 to $1.88 per diluted share. The Company’s outlook includes completed transaction activity as of the date of this release, but does not otherwise assume additional investment or capital markets activities for the remainder of 2021. The guidance is based on current plans and assumptions and is subject to risks and uncertainties more fully described in this press release and the Company’s periodic reports filed with the Securities and Exchange Commission.

Webcast Information

Getty Realty Corp. will host a conference call and webcast on Thursday, April 29, 2021 at 8:30 a.m. EST. To participate in the call, please dial 1-877-423-9813, or 1-201-689-8573 for international participants, ten minutes before the scheduled start. Participants may also access the call via live webcast by visiting the investors section of the Company's website at ir.gettyrealty.com.

If you cannot participate in the live event, a replay will be available on Thursday, April 29, 2021 beginning at 11:30 a.m. EST through 11:59 p.m. EST, Thursday, May 6, 2021. To access the replay, please dial 1-844-512-2921, or 1-412-317-6671 for international participants, and reference pass code 13718390.

About Getty Realty Corp.

Getty Realty Corp. is the leading publicly traded real estate investment trust (“REIT”) in the United States specializing in the acquisition, ownership, leasing, financing and redevelopment of convenience stores, gasoline stations and other automotive-related and retail real estate, including express car washes, automotive service centers, automotive parts retailers and select other properties. As of March 31, 2021, the Company owned 902 properties and leased 58 properties from third-party landlords in 35 states across the United States and Washington, D.C.

Non-GAAP Financial Measures

In addition to measurements defined by accounting principles generally accepted in the United States of America (“GAAP”), the Company also focuses on Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) to measure its performance. FFO and AFFO are generally considered by analysts and investors to be appropriate supplemental non-GAAP measures of the performance of REITs. FFO and AFFO are not in accordance with, or a substitute for, measures prepared in accordance with GAAP. In addition, FFO and AFFO are not based on any comprehensive set of accounting rules or principles. 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. These measures should only be used to evaluate the Company’s performance in conjunction with corresponding GAAP measures.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net earnings before depreciation and amortization of real estate assets, gains or losses on dispositions of real estate, impairment charges and the cumulative effect of accounting changes. The Company’s definition of AFFO is defined as FFO less (i) certain revenue recognition adjustments (defined below), (ii) non-cash changes in environmental estimates, (iii) non-cash environmental accretion expense, (iv) environmental litigation accruals, (v) insurance reimbursements, (vi) legal settlements and judgments, (vii) acquisition costs expensed and (viii) other unusual items that are not reflective of the Company’s core operating performance. Other REITs may use definitions of FFO and/or AFFO that are different than the Company’s and, accordingly, may not be comparable.

The Company believes that FFO and AFFO are helpful to analysts and investors in measuring the Company’s performance because both FFO and AFFO exclude various items included in GAAP net earnings that do not relate to, or are not indicative of, the Company’s core operating performance. Specifically, FFO excludes various items such as depreciation and amortization of real estate assets, gains or losses on dispositions of real estate and impairment charges. However, GAAP net earnings and FFO typically include certain other items that the Company excludes from AFFO, including the impact of revenue recognition adjustments comprised of deferred rental revenue (straight-line rental revenue), the net amortization of above-market and below-market leases, adjustments recorded for the recognition of rental income from direct financing leases and the amortization of deferred lease incentives (collectively, “Revenue Recognition Adjustments”) that do not impact the Company’s recurring cash flow and which are not indicative of its core operating performance. Deferred rental revenue results primarily from fixed rental increases scheduled under certain leases with the Company’s tenants. In accordance with GAAP, the aggregate minimum rent due over the current term of these leases is recognized on a straight-line 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. The amortization of deferred lease incentives represents the Company’s funding commitment in certain leases, which deferred expense is recognized on a straight-line basis as a reduction of rental revenue. GAAP net earnings and FFO also include non-cash and/or unusual items such as changes in environmental estimates, environmental accretion expense, non-cash allowance for credit losses on notes and mortgages receivable and direct finance leases, environmental litigation accruals, insurance reimbursements, legal settlements and judgments, property acquisition costs expensed and loss on extinguishment of debt that do not impact the Company’s recurring cash flow and which are not indicative of the Company’s core operating performance.

The Company pays particular attention to AFFO which the Company believes provides a more accurate depiction of the Company’s core operating performance than either GAAP earnings or FFO. By providing AFFO, the Company believes that it is presenting useful information that assists analysts and investors to better assess its core operating performance. Further, the Company believes that AFFO is useful in comparing the sustainability of its core operating performance with the sustainability of the core operating performance of other real estate companies. For a tabular reconciliation of FFO and AFFO to GAAP net earnings, see the table captioned “Reconciliation of Net Earnings to Funds From Operations and Adjusted Funds From Operations” herein included.

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,” “PREDICTS” 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, BUT ARE NOT LIMITED TO, THOSE REGARDING THE COMPANY’S 2021 AFFO PER SHARE GUIDANCE, THOSE MADE BY MR. CONSTANT, STATEMENTS REGARDING THE RECAPTURE AND TRANSFER OF CERTAIN NET LEASE RETAIL PROPERTIES, STATEMENTS REGARDING THE ABILITY TO OBTAIN APPROPRIATE PERMITS AND APPROVALS, AND STATEMENTS REGARDING AFFO AS A MEASURE BEST REPRESENTING CORE OPERATING PERFORMANCE AND ITS UTILITY IN COMPARING THE SUSTAINABILITY OF THE COMPANY’S CORE OPERATING PERFORMANCE WITH THE SUSTAINABILITY OF THE CORE OPERATING PERFORMANCE OF OTHER REITS.

INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN BE FOUND ELSEWHERE IN THIS PRESS RELEASE, INCLUDING, WITHOUT LIMITATION, THOSE STATEMENTS RELATING TO THE COVID-19 PANDEMIC AND 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. 

GETTY REALTY CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

March 31,
2021

 

 

December 31,
2020

 

ASSETS

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

Land

 

$

712,020

 

 

$

707,613

 

Buildings and improvements

 

 

552,796

 

 

 

537,272

 

Construction in progress

 

 

750

 

 

 

734

 

 

 

 

1,265,566

 

 

 

1,245,619

 

Less accumulated depreciation and amortization

 

 

(193,632

)

 

 

(186,964

)

Real estate held for use, net

 

 

1,071,934

 

 

 

1,058,655

 

Real estate held for sale, net

 

 

 

 

 

872

 

Real estate, net

 

 

1,071,934

 

 

 

1,059,527

 

Investment in direct financing leases, net

 

 

76,094

 

 

 

77,238

 

Notes and mortgages receivable

 

 

19,140

 

 

 

11,280

 

Cash and cash equivalents

 

 

31,831

 

 

 

55,075

 

Restricted cash

 

 

1,979

 

 

 

1,979

 

Deferred rent receivable

 

 

44,890

 

 

 

44,155

 

Accounts receivable

 

 

2,539

 

 

 

3,811

 

Right-of-use assets - operating

 

 

23,462

 

 

 

24,319

 

Right-of-use assets - finance

 

 

707

 

 

 

763

 

Prepaid expenses and other assets, net

 

 

69,896

 

 

 

71,365

 

Total assets

 

$

1,342,472

 

 

$

1,349,512

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Borrowings under credit agreement

 

$

 

 

$

25,000

 

Senior unsecured notes, net

 

 

523,868

 

 

 

523,828

 

Environmental remediation obligations

 

 

48,722

 

 

 

48,084

 

Dividends payable

 

 

17,690

 

 

 

17,332

 

Lease liability - operating

 

 

24,391

 

 

 

25,045

 

Lease liability - finance

 

 

3,367

 

 

 

3,541

 

Accounts payable and accrued liabilities

 

 

43,891

 

 

 

47,081

 

Total liabilities

 

 

661,929

 

 

 

689,911

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 20,000,000 shares authorized; unissued

 

 

 

 

 

 

Common stock, $0.01 par value; 100,000,000 shares authorized; 44,366,488 and 43,605,759 shares issued and outstanding, respectively

 

 

444

 

 

 

436

 

Additional paid-in capital

 

 

743,305

 

 

 

722,608

 

Dividends paid in excess of earnings

 

 

(63,206

)

 

 

(63,443

)

Total stockholders’ equity

 

 

680,543

 

 

 

659,601

 

Total liabilities and stockholders’ equity

 

$

1,342,472

 

 

$

1,349,512

 

GETTY REALTY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended
March 31,

 

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

Revenues from rental properties

 

$

36,951

 

 

$

34,650

 

Interest on notes and mortgages receivable

 

 

329

 

 

 

713

 

Total revenues

 

 

37,280

 

 

 

35,363

 

Operating expenses:

 

 

 

 

 

 

 

 

Property costs

 

 

5,272

 

 

 

4,935

 

Impairments

 

 

776

 

 

 

1,031

 

Environmental

 

 

513

 

 

 

221

 

General and administrative

 

 

5,509

 

 

 

4,068

 

Depreciation and amortization

 

 

8,437

 

 

 

7,097

 

Total operating expenses

 

 

20,507

 

 

 

17,352

 

 

 

 

 

 

 

 

 

 

Gain on dispositions of real estate

 

 

7,219

 

 

 

869

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

23,992

 

 

 

18,880

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

64

 

 

 

495

 

Interest expense

 

 

(6,129

)

 

 

(6,675

)

Net earnings

 

$

17,927

 

 

$

12,700

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

Net earnings

 

$

0.40

 

 

$

0.30

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

Net earnings

 

$

0.40

 

 

$

0.30

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

43,872

 

 

 

41,383

 

Diluted

 

 

43,875

 

 

 

41,391

 

GETTY REALTY CORP.

RECONCILIATION OF NET EARNINGS TO

FUNDS FROM OPERATIONS AND

ADJUSTED FUNDS FROM OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended
March 31,

 

 

 

2021

 

 

2020

 

Net earnings

 

$

17,927

 

 

$

12,700

 

Depreciation and amortization of real estate assets

 

 

8,437

 

 

 

7,097

 

Gain on dispositions of real estate

 

 

(7,219

)

 

 

(869

)

Impairments

 

 

776

 

 

 

1,031

 

Funds from operations

 

 

19,921

 

 

 

19,959

 

Revenue recognition adjustments

 

 

343

 

 

 

69

 

Changes in environmental estimates

 

 

(308

)

 

 

(788

)

Accretion expense

 

 

461

 

 

 

466

 

Environmental litigation accruals

 

 

 

 

 

 

Insurance reimbursements

 

 

(29

)

 

 

 

Legal settlements and judgments

 

 

 

 

 

(424

)

Retirement costs

 

 

543

 

 

 

 

Adjusted funds from operations

 

$

20,931

 

 

$

19,282

 

Basic per share amounts:

 

 

 

 

 

 

 

 

Earnings per share

 

$

0.40

 

 

$

0.30

 

Funds from operations per share (1)

 

 

0.44

 

 

 

0.47

 

Adjusted funds from operations per share (1)

 

$

0.47

 

 

$

0.46

 

Diluted per share amounts:

 

 

 

 

 

 

 

 

Earnings per share

 

$

0.40

 

 

$

0.30

 

Funds from operations per share (1)

 

 

0.44

 

 

 

0.47

 

Adjusted funds from operations per share (1)

 

$

0.47

 

 

$

0.46

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

43,872

 

 

 

41,383

 

Diluted

 

 

43,875

 

 

 

41,391

 

(1)  

Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted:

 

 

Three Months Ended
March 31,

 

 

 

2021

 

 

2020

 

FFO

 

$

439

 

 

$

406

 

AFFO

 

 

462

 

 

 

392

 

 

Brian Dickman
Chief Financial Officer
(646) 349-6000

Investor Relations
(516) 349-0598
ir@gettyrealty.com

Source: Getty Realty Corp.