Getty Realty Corp. Announces Third Quarter 2023 Results

- Reports Record Year to Date Investment Activity of $269 Million -

- Increases 2023 Full Year Earnings Guidance -

Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) announced today its financial and operating results for the quarter ended September 30, 2023.

Third Quarter 2023 Highlights

  • Net earnings: $0.31 per share
  • Funds From Operations (“FFO”): $0.53 per share
  • Adjusted Funds From Operations (“AFFO”): $0.57 per share
  • Invested $155.0 million across 50 properties
  • Committed investment pipeline of more than $95.0 million for the development and acquisition of 42 convenience and automotive retail properties as of October 25, 2023
  • Closed on a new $150.0 million senior unsecured term loan subsequent to quarter end

“We are pleased with our strong results for the quarter and $269 million of year-to-date investments, which reflect our continued efforts to accretively scale and diversify our portfolio,” stated Christopher J. Constant, Getty’s President & Chief Executive Officer. “Our convenience and automotive retail properties provide essential goods and services to the mobile consumer leading to durable rental income, strong rent coverage ratios, and stable tenant credit profiles. We remain focused on our target asset classes where we can leverage our industry knowledge, operator relationships, and reputation as a reliable financing partner to identify new properties that fit our nationwide portfolio. As we look ahead, our recent investment and capital markets activity has positioned us for continued growth, and we will be disciplined and selective as we underwrite new investment opportunities and deploy capital in this higher rate environment.”

Net Earnings, FFO and AFFO

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

($ in thousands, except per share amounts)

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net earnings

 

$

16,033

 

 

$

13,302

 

 

$

43,639

 

 

$

62,731

 

Net earnings per share

 

 

0.31

 

 

 

0.27

 

 

 

0.85

 

 

 

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

27,724

 

 

$

23,718

 

 

$

78,703

 

 

$

86,826

 

FFO per share

 

 

0.53

 

 

 

0.50

 

 

 

1.56

 

 

 

1.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

$

29,400

 

 

$

25,789

 

 

$

85,088

 

 

$

76,027

 

AFFO per share

 

 

0.57

 

 

 

0.54

 

 

 

1.68

 

 

 

1.59

 

Select Financial Results

Revenues from Rental Properties

($ in thousands)

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Rental income (a)

 

$

41,310

 

 

$

36,891

 

 

$

119,826

 

 

$

109,465

 

Tenant reimbursement income

 

 

7,538

 

 

 

4,642

 

 

 

15,047

 

 

 

11,865

 

Revenues from rental properties

 

$

48,848

 

 

$

41,533

 

 

$

134,873

 

 

$

121,330

 

(a)

Rental income includes base rental income, additional rental income, if any, and certain non-cash revenue recognition adjustments.

For the three months ended September 30, 2023, base rental income increased 10.5% to $40.9 million, as compared to $37.0 million for the same period in 2022. For the nine months ended September 30, 2023, base rental income increased 8.4% to $119.3 million, as compared to $110.0 million for the same period in 2022.

The growth in base rental income in both periods was driven by incremental revenue from recently acquired properties, contractual rent increases for in-place leases, and rent commencements from completed redevelopments, partially offset by property dispositions.

Interest (Income) on Notes and Mortgages Receivable

($ in thousands)

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest on notes and mortgages receivable

 

$

1,638

 

 

$

433

 

 

$

3,331

 

 

$

1,135

 

 

The increase in interest earned from notes and mortgages receivable in both periods was driven by an increase in development funding advances for the construction of new-to-industry properties.

Property Costs

($ in thousands)

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Property operating expenses

 

$

8,426

 

 

$

5,593

 

 

$

17,655

 

 

$

14,999

 

Leasing and redevelopment expenses

 

 

284

 

 

 

126

 

 

 

566

 

 

 

670

 

Property costs

 

$

8,710

 

 

$

5,719

 

 

$

18,221

 

 

$

15,669

 

The increase in property operating expenses in both periods was primarily due to the timing of reimbursable real estate tax payments, partially offset by lower rent expense.

The increase in leasing and redevelopment expenses for the three months ended September 30, 2023 was due to an increase in professional fees and demolition costs for redevelopment projects. The decrease in leasing and redevelopment expenses for the nine months ended September 30, 2023 was due to a reduction in demolition costs for redevelopment projects.

Other Expenses

($ in thousands)

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Environmental expenses

 

$

313

 

 

$

632

 

 

$

977

 

 

$

(15,419

)

General and administrative expenses

 

 

5,745

 

 

 

5,024

 

 

 

17,942

 

 

 

15,412

 

Impairments

 

 

986

 

 

 

798

 

 

 

3,970

 

 

 

2,227

 

The change in environmental expenses for the three months ended September 30, 2023 was primarily due to lower legal and professional fees, as well as lower accretion expense. The change in environmental expenses for the nine months ended September 30, 2023 was primarily due to changes in estimates related to unknown environmental liabilities and lower accretion expense. Specifically, during the nine months ended September 30, 2022, the Company concluded that there was no material continued risk of having to satisfy contractual obligations relating to preexisting unknown environmental contamination at certain properties. Accordingly, the Company removed $16.8 million of unknown reserve liabilities which had previously been accrued for these properties which resulted in a net credit of $16.3 million being recorded to environmental expenses. 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.

The increase in general and administrative expenses in both periods was primarily due to increased personnel costs, including $0.9 million of non-recurring retirement and severance costs incurred during the nine months ended September 30, 2023.

Impairment charges in all periods included 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. Impairment charges for the nine months ended September 30, 2023 also included reductions in estimated undiscounted cash flows expected to be received during the assumed holding period for certain of our properties, while impairment charges for the nine months ended September 30, 2022 also included reductions in the estimated fair value of certain properties based on third-party indications of potential selling prices or internal discounted cash flow analyses.

Portfolio Activities

Acquisitions and Development Funding

During the three months ended September 30, 2023, the Company invested $155.0 million across 50 properties, including the acquisition of fee simple interests in 21 properties for an aggregate of $119.7 million (of which $107.0 million was invested during the quarter ended September 30, 2023, and $12.7 million was previously funded as construction loan advances that were repaid upon the acquisition of the completed subject properties). Properties acquired during the quarter included nine convenience stores, nine car wash properties, two drive thru quick service restaurants, and one auto service center.

In addition, the Company acquired fee simple interests in nine under construction car wash properties for an aggregate of $31.4 million and committed to provide additional funding during the construction period to complete these projects.

The Company also advanced incremental development funding in the amount of $16.6 million, including accrued interest, for the construction of 20 new-to-industry car wash properties, convenience stores, and auto service centers. As of September 30, 2023, the Company had advanced aggregate development funding in the amount of $68.1 million, including accrued interest, for the development of these properties that are either owned by the Company and under construction, or which the Company expects to acquire via sale-leaseback transactions at the end of the respective construction periods.

Subsequent to quarter end, the Company invested $3.3 million in one property, bringing year-to-date investment activity to $269.0 million as of October 25, 2023.

Investment Pipeline

As of October 25, 2023, the Company had a committed investment pipeline of more than $95.0 million for the development and/or acquisition of 42 car wash properties, convenience stores, and auto service centers. The Company expects to fund this investment activity, which includes multiple transactions with nine different tenants, over the next 6-9 months. While the Company has fully executed agreements for each transaction, the timing and amount of each investment is ultimately dependent on its counterparties and the schedules under which they are able to complete development projects and certain business acquisitions for which the Company is providing sale leaseback financing.

Redevelopments

During the three months ended September 30, 2023, rent commenced on one redevelopment property, a new auto parts store located in Pottsville, PA and leased to AutoZone under a long term, triple net lease.

As of September 30, 2023, the Company had three properties under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio.

Dispositions

During the three months ended September 30, 2023, the Company sold two properties for aggregate gross proceeds of $1.9 million and recorded a net gain of $0.6 million on the dispositions. During the nine months ended September 30, 2023, the Company sold five properties for aggregate gross proceeds of $4.6 million and recorded a net gain of $1.3 million on the dispositions.

Balance Sheet and Capital Markets

As of September 30, 2023, the Company had $750 million of total outstanding indebtedness, including $675 million of senior unsecured notes with a weighted average interest rate of 3.9% and a weighted average maturity of 6.7 years, and $75 million outstanding under the Company’s $300 million unsecured revolving credit facility. Cash and equivalents were $8.9 million.

Equity Capital Markets

During the three months ended September 30, 2023, the Company settled 2.2 million shares of common stock subject to outstanding forward sale agreements in connection with the Company's follow-on public offering in February 2023 for net proceeds of approximately $71.6 million.

As of October 25, 2023, the Company had a total of 1,467,561 shares of common stock subject to outstanding forward agreements, including 1,250,000 shares in connection with the Company's follow-on public offering in February 2023 and 217,561 shares under the Company's at-the-market ("ATM") equity program, which upon settlement are anticipated to raise gross proceeds of approximately $48.4 million.

Debt Capital Markets

Subsequent to quarter end, the Company entered into a senior unsecured term loan (the "Term Loan") in an aggregate principal amount of $150.0 million. The Term Loan matures October 17, 2025, subject to one twelve-month extension exercisable at the Company's option.

The Term Loan is comprised of (i) an initial principal amount of $75.0 million that was funded at closing and used to repay amounts outstanding under the Company's revolving credit facility, and (ii) an additional principal amount of $75.0 million that can be funded in a single draw at the Company’s option any time on or prior to the 180th day following the closing date.

In connection with the Term Loan, the Company entered into $150.0 million of interest rate swaps to fix SOFR at 4.73% until maturity. Including the impact of the swaps, the effective interest rate on the term loan is 6.13% based on the Company's consolidated total indebtedness to total asset value ratio as of September 30, 2023.

2023 Guidance

As a result of year-to-date investment and capital markets activity, the Company is increasing its 2023 AFFO guidance to a range of $2.24 to $2.25 per diluted share from the prior range of $2.23 to $2.24 per diluted share. The Company’s outlook includes completed transaction activity as of the date of this release, but does not include assumptions for prospective acquisitions, dispositions, or capital markets activities (including the settlement of outstanding forward sale agreements). The Company’s outlook also assumes approximately $0.3 million of total demolition costs for anticipated redevelopment projects with rent commencements anticipated in 2024.

The guidance is based on current assumptions and is subject to risks and uncertainties more fully described in this press release and the Company’s periodic reports filed with the SEC.

Webcast Information

Getty Realty Corp. will host a conference call and webcast on Thursday, October 26, 2023 at 8:30 a.m. ET. 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, October 26, 2023 beginning at 11:30 a.m. ET through 11:59 p.m. ET, Thursday, November 2, 2023. To access the replay, please dial 1-844-512-2921, or 1-412-317-6671 for international participants, and reference pass code 13739331.

About Getty Realty Corp.

Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of September 30, 2023, the Company’s portfolio included 1,080 freestanding properties located in 40 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 (i) depreciation and amortization of real estate assets, (ii) gains or losses on dispositions of real estate assets, (iii) impairment charges, and (iv) the cumulative effect of accounting changes.

The Company defines AFFO as FFO excluding (i) certain revenue recognition adjustments (defined below), (ii) certain environmental adjustments (defined below), (iii) stock-based compensation, (iv) amortization of debt issuance costs and (v) other non-cash and/or 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 core operating performance of the Company’s portfolio. Specifically, FFO excludes items such as depreciation and amortization of real estate assets, gains or losses on dispositions of real estate assets, and impairment charges. With respect to AFFO, the Company further excludes the impact of (i) deferred rental revenue (straight-line rent), 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”), (ii) environmental accretion expenses, environmental litigation accruals, insurance reimbursements, legal settlements and judgments, and changes in environmental remediation estimates (collectively, “Environmental Adjustments”), (iii) stock-based compensation expense, (iv) amortization of debt issuance costs and (v) other items, which may include allowances for credit losses on notes and mortgages receivable and direct financing leases, losses on extinguishment of debt, retirement and severance costs, and other items that do not impact the Company’s recurring cash flow and which are not indicative of its core operating performance.

The Company pays particular attention to AFFO which it believes provides the most useful depiction of the core operating performance of its portfolio. By providing AFFO, the Company believes it is presenting information that assists analysts and investors in their assessment of the Company’s core operating performance, as well as 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” included herein.

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,” “OUTLOOK” 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 2023 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 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.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

September 30,

2023

 

 

December 31,

2022

 

ASSETS

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

Land

 

$

858,121

 

 

$

802,010

 

Buildings and improvements

 

 

819,748

 

 

 

707,352

 

Investment in direct financing leases, net

 

 

61,432

 

 

 

66,185

 

Construction in progress

 

 

591

 

 

 

578

 

Real estate held for use

 

 

1,739,892

 

 

 

1,576,125

 

Less accumulated depreciation and amortization

 

 

(259,209

)

 

 

(232,812

)

Real estate held for use, net

 

 

1,480,683

 

 

 

1,343,313

 

Real estate held for sale, net

 

 

3,568

 

 

 

3,757

 

Real estate, net

 

 

1,484,251

 

 

 

1,347,070

 

Notes and mortgages receivable

 

 

106,159

 

 

 

34,313

 

Cash and cash equivalents

 

 

5,496

 

 

 

8,713

 

Restricted cash

 

 

1,366

 

 

 

2,536

 

Deferred rent receivable

 

 

54,448

 

 

 

50,391

 

Accounts receivable

 

 

6,648

 

 

 

4,247

 

Right-of-use assets - operating

 

 

15,135

 

 

 

18,193

 

Right-of-use assets - finance

 

 

200

 

 

 

277

 

Prepaid expenses and other assets, net

 

 

105,004

 

 

 

96,555

 

Total assets

 

$

1,778,707

 

 

$

1,562,295

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Borrowings under Revolving Credit Facility

 

$

75,000

 

 

$

70,000

 

Senior Unsecured Notes, net

 

 

673,343

 

 

 

623,492

 

Environmental remediation obligations

 

 

22,717

 

 

 

23,155

 

Dividends payable

 

 

23,209

 

 

 

20,576

 

Lease liability - operating

 

 

16,665

 

 

 

19,959

 

Lease liability - finance

 

 

649

 

 

 

1,518

 

Accounts payable and accrued liabilities, net

 

 

41,218

 

 

 

43,745

 

Total liabilities

 

 

852,801

 

 

 

802,445

 

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; 52,701,316 and

46,734,790 shares issued and outstanding, respectively

 

 

527

 

 

 

467

 

Additional paid-in capital

 

 

1,011,137

 

 

 

822,340

 

Dividends paid in excess of earnings

 

 

(85,758

)

 

 

(62,957

)

Total stockholders’ equity

 

 

925,906

 

 

 

759,850

 

Total liabilities and stockholders’ equity

 

$

1,778,707

 

 

$

1,562,295

 

GETTY REALTY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from rental properties

 

$

48,848

 

 

$

41,533

 

 

$

134,873

 

 

$

121,330

 

Interest on notes and mortgages receivable

 

 

1,638

 

 

 

433

 

 

 

3,331

 

 

 

1,135

 

Total revenues

 

 

50,486

 

 

 

41,966

 

 

 

138,204

 

 

 

122,465

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Property costs

 

 

8,710

 

 

 

5,719

 

 

 

18,221

 

 

 

15,669

 

Impairments

 

 

986

 

 

 

798

 

 

 

3,970

 

 

 

2,227

 

Environmental

 

 

313

 

 

 

632

 

 

 

977

 

 

 

(15,419

)

General and administrative

 

 

5,745

 

 

 

5,024

 

 

 

17,942

 

 

 

15,412

 

Depreciation and amortization

 

 

11,288

 

 

 

9,962

 

 

 

32,580

 

 

 

29,514

 

Total operating expenses

 

 

27,042

 

 

 

22,135

 

 

 

73,690

 

 

 

47,403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on dispositions of real estate

 

 

583

 

 

 

344

 

 

 

1,486

 

 

 

7,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

24,027

 

 

 

20,175

 

 

 

66,000

 

 

 

82,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

89

 

 

 

33

 

 

 

383

 

 

 

373

 

Interest expense

 

 

(8,083

)

 

 

(6,906

)

 

 

(22,701

)

 

 

(20,350

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(43

)

 

 

 

Net earnings

 

$

16,033

 

 

$

13,302

 

 

$

43,639

 

 

$

62,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

0.31

 

 

$

0.27

 

 

$

0.86

 

 

$

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

0.31

 

 

$

0.27

 

 

$

0.85

 

 

$

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

50,621

 

 

 

46,734

 

 

 

49,088

 

 

 

46,729

 

Diluted

 

 

50,712

 

 

 

46,779

 

 

 

49,301

 

 

 

46,767

 

GETTY REALTY CORP.

RECONCILIATION OF NET EARNINGS TO

FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net earnings

 

$

16,033

 

 

$

13,302

 

 

$

43,639

 

 

$

62,731

 

Depreciation and amortization of real estate assets

 

 

11,288

 

 

 

9,962

 

 

 

32,580

 

 

 

29,514

 

Gains on dispositions of real estate

 

 

(583

)

 

 

(344

)

 

 

(1,486

)

 

 

(7,646

)

Impairments

 

 

986

 

 

 

798

 

 

 

3,970

 

 

 

2,227

 

Funds from operations (FFO)

 

 

27,724

 

 

 

23,718

 

 

 

78,703

 

 

 

86,826

 

Revenue recognition adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Deferred rental revenue (straight-line rent)

 

 

(1,582

)

 

 

(863

)

 

 

(4,057

)

 

 

(2,446

)

Amortization of above and below market leases, net

 

 

(285

)

 

 

(300

)

 

 

(822

)

 

 

(890

)

Amortization of investments in direct financing leases

 

 

1,521

 

 

 

1,365

 

 

 

4,444

 

 

 

3,964

 

Amortization of lease incentives

 

 

280

 

 

 

303

 

 

 

815

 

 

 

902

 

Total revenue recognition adjustments

 

 

(66

)

 

 

505

 

 

 

380

 

 

 

1,530

 

Environmental Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Accretion expense

 

 

144

 

 

 

215

 

 

 

422

 

 

 

1,037

 

Changes in environmental estimates

 

 

(98

)

 

 

(393

)

 

 

(175

)

 

 

(17,927

)

Environmental litigation accruals

 

 

 

 

 

279

 

 

 

 

 

 

279

 

Insurance reimbursements

 

 

(86

)

 

 

 

 

 

(138

)

 

 

(44

)

Total environmental adjustments

 

 

(40

)

 

 

101

 

 

 

109

 

 

 

(16,655

)

Other Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

1,443

 

 

 

1,227

 

 

 

4,162

 

 

 

3,543

 

Amortization of debt issuance costs

 

 

249

 

 

 

238

 

 

 

752

 

 

 

706

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

43

 

 

 

 

Retirement and severance costs

 

 

90

 

 

 

 

 

 

939

 

 

 

77

 

Total other adjustments

 

 

1,782

 

 

 

1,465

 

 

 

5,896

 

 

 

4,326

 

Adjusted Funds from operations (AFFO)

 

$

29,400

 

 

$

25,789

 

 

$

85,088

 

 

$

76,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic per share amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

0.31

 

 

$

0.27

 

 

$

0.86

 

 

$

1.31

 

FFO (a)

 

 

0.53

 

 

 

0.50

 

 

 

1.56

 

 

 

1.81

 

AFFO (a)

 

 

0.57

 

 

 

0.54

 

 

 

1.69

 

 

 

1.59

 

Diluted per share amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

0.31

 

 

$

0.27

 

 

$

0.85

 

 

$

1.31

 

FFO (a)

 

 

0.53

 

 

 

0.50

 

 

 

1.56

 

 

 

1.81

 

AFFO (a)

 

 

0.57

 

 

 

0.54

 

 

 

1.68

 

 

 

1.59

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

50,621

 

 

 

46,734

 

 

 

49,088

 

 

 

46,729

 

Diluted

 

 

50,712

 

 

 

46,779

 

 

 

49,301

 

 

 

46,767

 

(a)

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:

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

2022

 

FFO

 

$

679

 

 

$

554

 

 

$

1,986

 

 

$

2,028

 

AFFO

 

 

720

 

 

 

602

 

 

 

2,147

 

 

 

1,775

 

 

Contacts

Brian Dickman

Chief Financial Officer

(646) 349-6000

Investor Relations

(646) 349-0598

ir@gettyrealty.com

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