Getty Realty Corp's CEO Discusses Second Quarter Results - Earnings Call Transcript
Getty Realty Corp (GTY)
Q2 2012 Earnings Conference Call
August 2, 2012, 09:00 am ET
Joshua Dicker - VP, General Counsel and Corporate Secretary
David Driscoll - CEO
Anthony Paolone - JPMorgan
Matt Feldman - Davidson Kempner
Bruce Berger - Turnaround Capital
Jeff Lau - Sidoti & Company
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Thank you very much, Operator. I would like to thank you all for joining us for Getty Realty's second quarter conference call. After the close of trading yesterday, the company released its financial results for the quarter ended June 30, 2012 and filed its Form 10-Q with the Securities and Exchange Commission. These document are available in the Investor Relations section of our website at gettyrealty.com.
Certain statements made in the course of this call are not based on historically information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
I refer you to the company's annual report on Form 10-K for the (technical difficulty) 2011 and the company's quarterly report on Form 10-Q filed yesterday as well as our other filings with the SEC for a more detailed discussion of the risks and factors that could cause actual results to (technical difficulty) statements made today.
With that, let me turn the call over to David Driscoll, our Chief Executive Officer.
Thank you, Josh. And prior to starting a few brief remarks, I want to introduce the other officers with the company who are on the call with me and Josh Dicker today. Mr. Leo Liebowitz, our Co-founder and Chairman; out Chief Financial Officer, Tom Stirnweis; and Kevin Shea, our Executive Vice President.
Again, I want to wish you all a very good morning. Thank you for coming to the call and listening to us today. Yesterday evening, we announced that for the quarter ended June 30, 2012, we earned $3.6 million or $0.11 per share on revenues of $27.5 million.
This resulted in FFO of $7.2 million and AFFO of $6.3 million, $0.21 and $0.19 per share respectively.
All the details are available in our 8-K and our 10-Q, which were both filed with the SEC yesterday evening and are available on our website, the SEC EDGAR website and various other financial media and websites.
The quarter continues to be a transitional one for us in several important ways. As we continue to move away from the impact on our results related to the bankruptcy filing of what was our largest tenant, Getty Petroleum Marketing, who I will refer to as Marketing in this call.
From a longer-term perspective, however, I'm pleased to announce that this is most likely the last quarter we anticipate that our results will include results directly derived from marketing, although as previously discussed, we expect our net income FFO and AFFO will be lower going forward until we can grow our way back to the levels we achieved previous.
The first is that we recognized $6.2 million of revenues during the month of April from the Marketing lease. Plus, in accordances with GAAP, immediately took a full reserve against those revenues thus our revenues after reserves of 18.8 million in this quarter versus $26.9 million in the same quarter last year, is a better measure of our performance than a simple revenues-to-revenues comparison.
Second, we incurred material expenses for real estate taxes in other items for the Marketing portfolio during April. Essentially, this means that we had three months of costs but only two months of revenues from the Marketing portfolio for the quarter.
I would encourage caution using this quarter's performance metrics to extrapolate our future performance.
Third, we continue to incur substantial legal and other costs associated with Marketing's bankruptcy proceedings. These costs add an additional drag to the quarter.
As the results of these and other less significant items, I believe it will not be until we get our third and fourth quarter results that we will finally be in a position to report more visible run rate type quarters.
Turning to the progress we made in the quarter, as we previously announced on April 30th, we have triple-net lease approximately 270 locations in six separate long-term triple-net leases with regional field distributors.
In addition, we entered into interim fuel supply agreements with global partners and other regional gasoline distributors, covering an additional 330 properties.
There are also nine terminals in 141 properties whose tanks have been removed but we are seeking to dispose. We continue to make steady progress in these efforts and continue to do so in the quarter with 13 locations sold, generating approximately $4.4 million in aggregate sales price.