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| 8-K - FORM 8-K - GETTY REALTY CORP /MD/ | d940104d8k.htm |
 NAREIT Presentation
June 2015 Exhibit 99.1 |
 Forward Looking Statements
1 Certain statements in this Presentation constitute “forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements are
statements that relate to management’s expectations or beliefs, future plans and strategies, future financial performance and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,”
“will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential.” Such forward-
looking statements reflect current views with respect to the matters referred
to and are based on certain assumptions and involve known and unknown risks, uncertainties and other important factors, many of which are beyond the Company’s control, that could cause the actual results,
performance, or achievements of the Company to differ materially
from any future results, performance, or achievement implied by such forward-looking statements. While forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, they are not guarantees
of future performance. The Company does not undertake any
obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes. Examples of forward-looking statements in this
Presentation include, but are not limited to, statement(s): (a)
relating to the Company’s Investment Highlights, (b) Accretive Acquisition (c) relating to projections of revenues, income or loss, earnings or loss per share, capital expenditures, and growth prospects, (d) about future economic performance, and (e) regarding
liquidity and dividends. There are a number of risks and
uncertainties that could cause actual results to differ materially from the forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on our business, financial condition, liquidity, results of operations,
AFFO and prospects. For a further discussion of these and other
factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and the Company’s other filings with the SEC,
including, in particular, the section entitled “Risk
Factors” contained therein. In light of these risks, uncertainties, assumptions and factors, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Presentation will in fact transpire. Moreover, because
the Company operates in a very competitive and rapidly changing
environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as
of the date of this Presentation, unless noted otherwise.
Unless otherwise noted in this Presentation, all reported financial data is
presented as of the quarter ended March 31, 2015, and all portfolio data is as of June 5, 2015. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company does not undertake
any obligation to release publicly any revisions to the
forward-looking statements to reflect events or circumstances after the date of this Presentation or to reflect the occurrence of unanticipated events. The information contained herein has been prepared from public and non-public sources believed to be reliable. However, the Company
has not independently verified certain of the information
contained herein, and does not make any representation or warranty as to the accuracy or completeness of the information contained in this Presentation. |
 Investment Highlights
2 1 National Portfolio Targeting Mature, High Growth Markets 2 One of the Leading Owners of Convenience & Gas Retail Outlets, a Stable, yet
Growing Sector
5 Ongoing Process to Repurpose, Reposition, Redevelop Locations to Maximize Value
3 Long-Term, Triple-Net Leases Enhance Cash Flows 4 Emergence of Increasingly Institutional Quality Credit Tenant Base 6 Proven Ability to Successfully Pursue Internal and External Growth in a Consolidating Sector |
 National Portfolio
3 932 properties (826 fee, 106 leased) located in 23 states plus Washington, D.C.
—
98% occupied — 93% of rent from core net-leased portfolio / 7% from transitional properties (1) 1) Rent figures based on Q1 2015 quarterly results, pro forma for the Company’s recently announced United Oil transaction. For
more information regarding the Company’s core and
transitional properties, see the Company’s 10-Q for the quarter ended March 31, 2015. |
 Investing in Attractive Markets
4 Focus On Mature, High Growth Markets — Significant presence in many of the largest markets in the US — Recent acquisition activity in several of the fastest growing regions of the US
Rate of Population Growth (2013 to 2014)
Less than -20
-20
—
-15 -15 — -10 -10 — -5 -5 — 0 0 — 5 5 — 10 10 — 15 15 — 20 Greater than 20 Population Change Per 1,000 Population Source: US Census Bureau, 2014 Population Estimates |
 Property Attributes
5 Mature, Infill Markets — High replacement costs — Limited new development, time consuming zoning restrictions — “Grandfathered” use advantage Prime Locations and Corners — Mature transportation grid — High daily traffic counts — Optimal corners with traffic lights, high visibility and easy access — Close proximity to freeway entrances or exit ramps Alternative Use Opportunities — Retail, Banking, Service, Restaurant — Assemblage, Redevelopment, Repositioning |
 Stable Sector of Retail Market (1) 6 C-Store revenue has shown consistent growth, while number of units in service has remained
largely constant over the last ten years
—
More than 152,000
properties in the industry (83.5% selling fuel) ›
On average gasoline sales account for 77% of store sales and 35% of store profits (2) 63% of C-Stores owned by single-store operators (1) Consumers embracing C-stores — Average C-store with fuel has around 1,100 customer visits per day (1) — C-stores are expanding offerings to become part supermarket, restaurant, bank and drug store (1) — Growth in foodservice is more than offsetting declines in tobacco sales and modest decreases in
fuel volumes (1) 1) Source: National Association of Convenience Stores Online. 2) Source: Future of Fuels Report, 2014. Growth in Number of C-Stores in US (1) |
 A Consolidating Industry
7 Ability to underwrite unit level & entity level credit A source of long-term financing for operators - not a competitor Established record of managing and remediating environmental concerns in a highly regulated industry Proven ability to source off-market transactions The Getty Competitive Advantage The growth and overall health of the c-store industry as compared to other sectors of the overall retail market has resulted in a significant increase in M&A activity — 2014 was a record year for industry M&A activity with more than $8bn of announced or completed transactions by volume (1) Consolidation coming primarily from: — Public and non-traded REITs — Public MLPs (single-tax structure, access to low cost capital) › Energy Transfer Partners, Crossamerica Partners, Global Partners, Sunoco LP — Traditional owner/operators › Couche-Tard, 7-Eleven — Private Equity 1) Source: Matrix Capital Markets |
 Accretive Acquisition of 77 Properties
8 $214.5 million Acquisition of 77 Properties in June 2015 — Financed with a combination of long-term fixed rate debt and credit facility borrowings — Tenant is United Oil, a leading regional convenience store and gas station operator › Operates ~400 locations in the Western United States and Colorado › Fortress Investment Group portfolio company — 20 yr. triple-net lease with three 5-year renewal options Attractive Sites in High Growth Markets — Site located in California, Colorado, Washington, Nevada and Oregon — Branded 76, Conoco, Circle K, 7-11 and My Goods Credit Enhancement — Properties supplied with fuel by Philips 66 under a long- term supply agreement › Agreement contains credit enhancement consignment features |
 Stable Long-Term Lease Structure
(1) Long-Term Triple-Net Leases 9 Sustainable cash flows supported by long-term triple net leases — Pro forma for the United Oil transaction, our rent weighted average lease term is 12.4 years (1) Majority of triple-net leases have 15 year initial terms — Contractual rent increases during initial and renewal terms — Credit visibility via station and tenant financial statements — 80.7% of leases mature in 2025 or beyond 1) Lease maturity figures based on Q1 2015 quarterly results, pro forma for the Company’s recently announced United Oil
transaction. |
 High-Quality Tenant Base
10 More than 55% of Getty’s rental income comes from high-quality, credit worthy tenants base (1) Noteworthy Tenants Tenant Rank Status % of Total (1) 1 st NYSE: GLP 18.0% 2 nd Fortress Portfolio Company 15.7% 5 th GPM Petroleum, Parent Co., IPO Filed 7.1% 6 th Crossamerica Partners, Parent Co., NYSE: CAPL 6.9% 8 th NYSE: BP 2.8% 9 th Sunoco LP, Parent Co., NYSE: SUN 2.3% 11 th World’s largest C-store chain (more than 55,800 stores in 16 countries) 1.2% 1) Rental income percentages based on Q1 2015 quarterly results, pro forma for the Company’s recently announced United Oil
transaction. |
 Stable Balance Sheet
(1) 11 Revolving Credit Facility — $175 million senior unsecured — Matures in 2018 and has a one year extension option — LIBOR +195 to 325 based on Company leverage Bank Term Loan — $50 million senior unsecured — Matures in 2020 — LIBOR +190 to 320 based on Company leverage Prudential Term Loan A — $100 million senior unsecured — Matures in 2021 — 6.0% Prudential Term Loan B — $75 million senior unsecured — Matures in 2023 — 5.35% Credit Statistics (1) Debt to Total Capitalization 38% Net Debt to EBITDA 5.5x Fixed Charge Coverage 2.7x Weighted Average Interest Rate 4.6% Weighted Average Maturity 5.2 yrs Variable Rate vs. Fixed Rate 49% / 51% 1) Balance sheet overview, credit statistics and debt maturities are pro forma for the Company’s financing transactions completed on
June 2, 2015 and the Company’s recently announced United
Oil transaction. Maturity Schedule
(1) |
 Enhanced Operating Results
12 1) Non-GAAP financial measure. For a complete definition of AFFO, see the Company’s 10-Q for the quarter ended March 31,
2015. A reconciliation of net income to AFFO can be found
in the appendix to this presentation. 2)
Excludes $0.20 per share of one-time income associated with the bankruptcy
of Getty Petroleum Marketing, Inc. 3)
Excludes $0.51 per share of one-time income associated with the bankruptcy
of Getty Petroleum Marketing, Inc. Significant increases in AFFO
since 2013 —
Portfolio Repositioning Activities
› Leasing › Dispositions — Acquisitions — Focus on Cost Controls Quarterly AFFO per Share (1) $0.19 $0.17 $0.06 $0.22 $0.28 $0.30 $0.35 $0.34 $0.33 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q1 2013 Q2 2013 (2) Q3 2013 (3) Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 |
 Rising Dividend Reflecting Portfolio Growth
13 Consistent annual increase in recurring dividends since 2013 — $0.19 per share in special dividends › Litigation settlement › Dispositions Quarterly Dividends Declared per Share $0.13 $0.13 $0.13 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.22 $0.22 $0.05 $0.14 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 |
 Management 14 David B. Driscoll, Chief Executive Officer, President, Director — President and Chief Executive Officer since 2010 — Director of Getty since May 2007 and Lead Independent Director from April 2008 until February 2010
—
30 years real estate investment banking and capital markets experience Morgan
Joseph & Co, ING Barings, Smith Barney Mark J. Olear, EVP, Chief Operating Officer — Executive Vice President and Chief Investment Officer since 2014 — Previously held various real estate positions with TD Bank, Home Depot, Toys “R” Us and A&P
—
Promoted to Chief Financial Officer in December 2013, Vice President in May 2013
and Treasurer in May 2011 —
Joined in Nov. 2010 as Director of Planning & Corp. Development
—
Previously Vice President of Morgan Joseph; Began career at ING
Barings Christopher J. Constant,
VP, Chief Financial Officer — Vice President since February 2009 and General Counsel and Secretary since 2008
—
Previously a Partner at Arent Fox LLP specializing in corporate and
transactional matters Joshua Dicker,
SVP, General Counsel — Executive Vice President since May 2004 and, prior to that, Vice President since 2001
—
Joined in 1984 Kevin C. Shea, EVP |
 Investment Highlights
1 National Portfolio Targeting Mature, High Growth Markets 2 One of the Leading Owners of Convenience & Gas Retail Outlets, a Stable, yet
Growing Sector
5 Ongoing Process to Repurpose, Reposition, Redevelop Locations to Maximize Value
3 Long-Term, Triple-Net Leases Enhance Cash Flows 4 Emergence of Increasingly Institutional Quality Credit Tenant Base 6 Proven Ability to Successfully Pursue Internal and External Growth in a Consolidating Sector 15 |
 Q & A |
 Appendix 17 Quarters Ended 3/2013 6/2013 9/2013 12/2013 3/2014 6/2014 9/2014 12/2014 3/2015 Net earnings $10,350 $12,739 $41,877 $5,045 $9,638 $6,637 $10,235 ($3,092) ($1,137) Depreciation and amortization 2,643 2,409 2,446 2,429 2,323 2,339 3,372 2,515 3,585 Gains on dispositions (8,432) (4,174) (26,975) (5,924) (3,153) (1,217) (4,146) (1,702) 126 Impairments 3,984 468 3,265 5,708 1,663 2,014 2,906 14,951 7,913 FFO $8,545 $11,442 $20,613 $7,258 $10,471 $9,773 $12,367 $12,672 $10,487 Revenue recognition adjustments (2,383) (1,361) (2,203) (2,432) (2,248) (1,576) (820) (728) (579) Non-cash allowances 0 1,531 0 3,244 836 881 (114) 728 10 Acquisition costs 0 410 66 4 0 26 27 51 0 Non-cash environmental adjustments 275 299 514 (830) 261 1,012 336 (1,319) 1,120 AFFO $6,437 $12,321 $18,990 $7,244 $9,320 $10,116 $11,796 $11,404 $11,038 WASO 33,397 33,397 33,397 33,397 33,397 33,403 33,417 33,417 33,417 AFFO/Share $0.19 $0.37 $0.57 $0.22 $0.28 $0.30 $0.35 $0.34 $0.33 Reconciliation of Net Income to AFFO |