GETTY REALTY CORP /MD/ - 10-K Annual Report

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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 2002

OR

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-13777

GETTY REALTY CORP.

(Exact name of registrant as specified in its charter)

Maryland 11-3412575
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) 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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
- ----------------------------- -----------------------------------------

Common Stock, $0.01 par value New York Stock Exchange
Series A Participating Convertible New York Stock Exchange
Redeemable Preferred Stock, $0.01 par value

Securities registered pursuant to Section 12(g) of the Act:

None
(Title of Class)

Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes |X| No | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

Indicate be check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No | |

The aggregate market value of the voting stock held by nonaffiliates (15,669,051
shares of common stock and 1,721,000 shares of preferred stock) of the Company
was $346,494,696 as of March 21, 2003.

The registrant had outstanding 21,442,339 shares of common stock and 2,865,768
shares of preferred stock as of March 21, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Document Part of Form 10-K
-------- -----------------

Annual Report to Shareholders for the year ended December 31, 2002 (the "Annual II
Report") (pages 6 through 14 and 16 through 32)

Definitive Proxy Statement for the 2003 Annual Meeting of Stockholders (the III
"Proxy Statement") which will be filed by the registrant on or prior to 120 days
following the end of the registrant's year ended December 31, 2002 pursuant to
Regulation 14A.

PART I

Item 1. Business

General

Getty Realty Corp. is one of the largest real estate companies in the
United States specializing in the ownership, leasing and management of gasoline
station/convenience store properties. As of December 31, 2002, we owned 739
properties and leased 310 additional properties in 13 states located principally
in the northeastern United States. Nine hundred seventy-two of our properties
are triple-net leased on a long-term basis to Getty Petroleum Marketing Inc.
("Marketing"), a wholly owned subsidiary of OAO LUKoil, one of Russia's largest
integrated oil companies. Marketing is responsible for managing the actual
operations conducted at these properties.

We are self-administered and self-managed through our management, which
has owned, leased and managed gasoline stations and convenience store properties
for more than 47 years. Our executive officers are exclusively engaged in the
day-to-day management of our real estate. We administer nearly all management
functions for our properties, including leasing, legal, data processing, finance
and accounting. We intend to invest in real estate and real estate related
investments when such opportunities arise consistent with our current investment
portfolio.

Our predecessors trace back to 1955 with the ownership of one gasoline
service station in New York City. As our business grew, we combined real estate
ownership, leasing and management with actual service station operation. We
became a public company in 1971 under the name Power Test Corp. In 1985, we
acquired from Texaco the petroleum marketing assets of Getty Oil Company in the
northeastern United States, and assumed the Getty name. In addition, we acquired
the Getty(R) trademarks for use in real estate and petroleum marketing
operations in the United States. We became one of the largest independent
owner/operators of petroleum marketing assets in the country, serving retail and
wholesale customers through a distribution and marketing network of Getty and
other branded retail service stations.

In 1997, we reorganized our businesses and completed the spin-off of our
petroleum marketing business to our shareholders, who received a tax-free
dividend of one share of common stock of Marketing for each share of our common
stock. Following the reorganization and spin-off, Marketing held the assets and
liabilities of our petroleum marketing operations and a portion of our home
heating oil business. In 1998, we reorganized as a Maryland corporation and
acquired Power Test Investors Limited Partnership (the "Partnership"), thereby
acquiring fee title to 295 properties we had previously leased from the
Partnership and which the Partnership had acquired in 1985 from Texaco. In that
transaction, we issued to the former unitholders of the Partnership shares of
our series A participating convertible redeemable preferred stock, which trades
on the New York Stock Exchange under the symbol "GTY-PrA." We later sold the
remaining portion of our home heating oil business. As a result, we are now
exclusively

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engaged in the ownership, leasing and management of real estate assets,
principally used in the petroleum marketing industry.

In December 2000, Marketing was acquired by a U.S. subsidiary of OAO
LUKoil. In connection with Lukoil's acquisition of Marketing, we renegotiated
our long-term master lease and other arrangements with Marketing. Under the
master lease, as of December 31, 2002, Marketing leases 963 retail outlets and 9
terminal facilities from us. The master lease has an initial term expiring in
December 2015, and generally provides Marketing with three renewal options of
ten years each and a final renewal option of three years and ten months
extending to 2049 that may be exercised only on an "all or nothing" basis. We
expect to receive $58.8 million in lease rental payments from Marketing in 2003,
with annual 2% rental increases in subsequent years. The master lease is a
"triple-net" lease, under which Marketing is responsible for the cost of all
taxes, maintenance, repair, insurance and other operating expenses. Certain
financial obligations of Marketing under the master lease through at least
December 9, 2003 are guaranteed by Lukoil and an Austrian subsidiary of Lukoil.

We own the Getty(R) trademarks for use in real estate and petroleum
marketing operations in the United States, which we have licensed to Marketing
on an exclusive basis in its current northeastern U.S. marketing territory. We
have also licensed the trademarks to Marketing on a non-exclusive basis outside
that territory, subject to a gallonage-based royalty.

In August 2001, we closed a public offering of 8,855,000 shares of our
common stock. We used $64.1 million of the $131.5 million net proceeds of the
offering to pay a special one-time "earnings and profits" (as defined by the
Internal Revenue Code) cash distribution to preferred and common shareholders
and $37.4 million to repay substantially all our debt, leaving $30.0 million in
cash for general corporate purposes, including the acquisition of additional
properties. In addition, our shareholders approved a charter amendment to
include typical real estate investment trust ("REIT") provisions.

Accordingly, we elected to be taxed as a REIT beginning January 1, 2001. A
REIT is a corporation, or a business trust that would otherwise be taxed as a
corporation, which meets the requirements of the Internal Revenue Code. The
Internal Revenue Code permits a qualifying REIT to deduct dividends paid,
thereby effectively eliminating corporate level federal income tax and making
the REIT a pass-through vehicle for federal income tax purposes. To meet the
requirements of the Internal Revenue Code, a REIT must, among other things,
invest substantially all of its assets in interests in real estate (including
mortgages and other REITs) or cash and government securities, derive most of its
income from rents from real property or interest on loans secured by mortgages
on real property, and distribute to shareholders annually a substantial portion
of its otherwise taxable income. As a REIT, we are required to distribute at
least 90% of our taxable income to our shareholders each year and would be
subject to corporate level federal income taxes on any taxable income that is
not distributed.

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Access to our filings with the Securities and Exchange Commission

Our website address is www.gettyrealty.com. Our address, phone number and
a list of our officers is available on our website. Our website contains a
hyperlink to the SEC's EDGAR database where you can access, free-of -charge, our
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to these reports as soon as reasonably practicable
after such reports are filed. We also will provide copies of these reports
free-of-charge upon request, addressed to Getty Realty Corp., 125 Jericho
Turnpike, Suite 103, Jericho, NY 11753, Attn: Investor Relations.

Real Estate Business

Nine hundred seventy-two of our properties are leased by Marketing. The
operators of the properties leased by Marketing and our other tenants primarily
consist of retailers engaged in the sale of gasoline and other motor fuel
products, convenience products and automotive repair services. Over the past
decade, these lines of business have matured into a single industry as operators
increased their emphasis on co-branded locations with multiple uses. The
combination of petroleum product sales with other offerings, particularly
convenience products, has helped provide one-stop shopping for consumers and
represents a driving force behind the industry's growth in recent years.

Revenues from rental properties for the year ended December 31, 2002 were
$67.2 million. We received lease payments from Marketing aggregating
approximately $58.1 million (or 96% of the $60.4 million total lease payments we
received from all our rental properties). In addition, we recognized an
additional $6.7 million of deferred rental income due to the straight-line
method of accounting for the lease with Marketing. We are materially dependent
upon the ability of Marketing to meet its obligations under the master lease.
Marketing's financial results depend largely on retail marketing margins and
rental income from its dealers. The petroleum marketing industry has been and
continues to be volatile and highly competitive. Marketing has made all required
monthly rental payments under the Master Lease when due.

As of December 31, 2002, we owned fee title to 733 gasoline
station/convenience stores and six petroleum distribution terminals. We also
leased 307 gasoline station/convenience stores and three bulk plants. In
addition, we lease 4,100 square feet of office space at 125 Jericho Turnpike,
Jericho, New York, which is used for our corporate headquarters. On February 3,
2003, we entered into a definitive agreement to acquire fee title to 42 of these
leased gasoline station/convenience store sites. We believe our network of
gasoline station/convenience store and terminal properties across the
northeastern United States is unique and comparable properties are not readily
available for purchase or lease from other owners or landlords. Many of our
properties are located at highly trafficked urban intersections or conveniently
close to highway on- and off-ramps. Furthermore, obtaining the permits necessary
to operate a network of petroleum marketing properties such as ours would be a
difficult, time consuming and costly process for any potential competitor. Our
typical property used as a gasoline station/convenience store is located on
between 1/2 and 3/4 acres of land in metropolitan areas in the northeastern

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United States. Approximately two-thirds of our properties used as gasoline
stations have repair bays (typically two or three bays per station) and nearly
half have convenience stores, canopies or both. The title to substantially all
of our owned properties is in the names of Leemilt's Petroleum, Inc. and Power
Test Realty Company Limited Partnership, each of which is our wholly owned
subsidiary. Leemilt's Petroleum Inc. and Getty Properties Corp., also our wholly
owned subsidiary, are the lessees of substantially all of the properties we
lease from third parties.

Regulation

We are subject to numerous federal, state and local laws and regulations.
The costs related to compliance with those laws and regulations have not had,
and are not expected to have a material adverse effect on our long-term
financial position, although these costs may have a significant impact on our
results of operations or liquidity for any single fiscal year or interim period.

Petroleum properties are governed by numerous federal, state and local
environmental laws and regulations. These laws have included (i) requirements to
report to governmental authorities discharges of petroleum products into the
environment and, under certain circumstances, to remediate the soil and/or
groundwater contamination pursuant to governmental order and directive, (ii)
requirements to remove and replace underground storage tanks that have exceeded
governmental-mandated age limitations and (iii) the requirement to provide a
certificate of financial responsibility with respect to claims relating to
underground storage tank failures.

Currently, environmental expenses have been attributable to remediation,
monitoring, and governmental agency reporting incurred in connection with
contaminated sites. In prior periods, a larger portion of the expenses also
included soil disposal and the replacement or upgrading of underground storage
tanks, related piping, underground pumps, wiring and monitoring devices
(collectively "USTs") to meet federal, state and local environmental standards,
as well as routine monitoring and tank testing. Under the master lease with
Marketing, and in accordance with leases with other tenants, we agreed to bring
the leased properties with known environmental contamination to regulatory or
contractual closure ("Closure") in an economical manner and, thereafter,
transfer all future environmental risks to our tenants. Generally, upon
achieving Closure at an individual property, our environmental liability under
the lease for that property will be satisfied and future remediation obligations
will be the responsibility of our tenant. We have agreed to pay all costs
relating to, and to indemnify Marketing for, environmental liabilities and
obligations scheduled in the Master Lease. As of December 31, 2002, we have
regulatory approved remediation action plans in place for 348 (85%) of the 411
properties for which we retain remediation responsibility. At that date, 63
properties (15%) were in the assessment phase.

We believe that we are in substantial compliance with federal, state and
local provisions enacted or adopted pertaining to environmental matters.
Although we are unable to predict what legislation or regulations may be adopted
in the future with respect to environmental protection and waste disposal,
existing legislation and regulations have

5

had no material adverse effect on our competitive position. See "Item 3. Legal
Proceedings."

Personnel

As of December 31, 2002, we had 16 employees.

Special Factors Regarding Forward-Looking Statements

Certain statements in this Annual Report on Form 10-K may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. When we use the words "believes", "expects",
"plans", "projects", "estimates" and similar expressions, we intend to identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance and achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements.

These factors associated with Getty include, but are not limited to:

We are subject to risk inherent in owning and leasing real estate.

We are subject to varying degrees of risk generally related to leasing and
owning real estate. In addition to general risks related to owning properties
used in the petroleum marketing industry, risks include, among others, liability
for long-term lease obligations, changes in regional and local economic
conditions, local real estate market conditions, changes in interest rates and
in the availability, cost and terms of financing, the potential for uninsured
casualty and other losses, the impact of present or future environmental
legislation and compliance with environmental laws (as discussed below), and
adverse changes in zoning laws and other regulations, many of which are beyond
our control. Moreover, real estate investments are relatively illiquid, which
means that our ability to vary our portfolio of service station properties in
response to changes in economic and other conditions may be limited.

Our revenues are primarily dependent on the performance of the petroleum
marketing industry and Getty Petroleum Marketing Inc.

We rely on leasing service station properties, primarily to Marketing, for
substantially all of our rental revenues (96.5% for the year ended December 31,
2002). Accordingly, our rental revenues will be dependent to a large degree on
the economic performance of Marketing and of the petroleum marketing industry,
and any factor that adversely affects Marketing or other lessees may have a
material adverse effect on us. Marketing is wholly owned by a subsidiary of
Lukoil. Lukoil has a limited history of operating in the United States. In the
event that Marketing was unable to perform its obligations under its master
lease with us, our financial results would be materially adversely affected.
Although Marketing is a wholly owned subsidiary of Lukoil, no assurance can be
given that Lukoil would cause Marketing to fulfill all of its obligations under
the master lease.

6

Petroleum products are commodities whose prices depend on numerous factors
that affect the supply of and demand for petroleum products, such as changes in
domestic and foreign economies, political affairs and production levels, the
availability of imported oil, the marketing of competitive fuels, the extent of
government regulation and expected and actual weather conditions. The prices
paid by Marketing and other petroleum marketers for products are affected by
global, national and regional factors, such as petroleum pipeline capacity,
local market conditions and competition and the level of operations of
refineries. Recent events in Venezuela and the current uncertainty regarding the
Middle East have contributed to increases in prices for petroleum products. We
cannot be certain how these factors will affect petroleum product prices or
supply in the future, or how in particular they will affect Marketing. We
believe that Marketing currently relies on various suppliers for the purchase of
refined petroleum products. Marketing's earnings and cash flow from operations
depend upon rental income from dealers and the sale of refined petroleum
products at margins in excess of fixed and variable expenses. A large, rapid
increase in petroleum prices would adversely affect Marketing's profitability
and cash flow if the increased cost of petroleum products could not be passed on
to Marketing's customers or if automobile consumption of gasoline were to
significantly decline.

Compliance with environmental regulations may be costly.

The real estate business and the petroleum products industry are subject
to numerous federal, state and local laws and regulations relating to the
protection of the environment. Under certain environmental laws, a current or
previous owner or operator of real estate may be liable for contamination
resulting from the presence or discharge of hazardous or toxic substances or
petroleum products at, on or under such property, and may be required to
investigate and clean-up such contamination. Such laws typically impose
liability and clean-up responsibility without regard to whether the owner or
operator knew of or caused the presence of the contaminants, and the liability
under such laws has been interpreted to be joint and several unless the harm is
divisible and there is a reasonable basis for allocation of responsibility. For
example, liability may arise as a result of the historical use of a property or
from the migration of contamination from adjacent or nearby properties. Any such
contamination or liability may also reduce the value of the property. In
addition, the owner or operator of a property may be subject to claims by third
parties based on injury, damage and/or costs, including investigation and
clean-up costs, resulting from environmental contamination present at or
emanating from a property. The properties owned or controlled by us are leased
primarily as gasoline service stations, and therefore may also contain, or may
have contained, underground storage tanks for the storage of petroleum products
and other hazardous or toxic substances, which creates a potential for the
release of such products or substances. Some of the properties may be adjacent
to or near properties that have contained or currently contain underground
storage tanks used to store petroleum products or other hazardous or toxic
substances. In addition, certain of the properties are on, adjacent to or near
properties upon which others have engaged or may in the future engage in
activities that may release petroleum products or other hazardous or toxic
substances.

7

We have agreed to indemnify Marketing for pre-existing environmental
conditions at six leased terminals we own. Under the agreement, Marketing will
pay the first $1.5 million of costs and expenses incurred in connection with
remediating any pre-existing terminal conditions, Marketing will share with us
equally the next $8.5 million of those costs and expenses and Marketing will pay
all additional costs and expenses over $10 million. Our aggregate
indemnification liability under this agreement is capped at $4.25 million. Our
indemnification responsibilities described above expire in December 2010. Under
the master lease, we continue to have additional ongoing environmental
remediation obligations for scheduled sites.

As of December 31, 2002 and 2001, we had accrued $27.9 million and $27.3
million, respectively, as management's best estimate for probable and reasonably
estimable environmental remediation costs. As of December 31, 2002 and 2001, we
had also recorded $13.4 million and $14.3 million, respectively, as management's
best estimate for recoveries from state UST remediation funds related to
environmental obligations and liabilities. It is possible that estimated
aggregate future cash expenditures for environmental remediation from 2003
through 2012 could approximate $29.6 million, or approximately $14.2 million on
a net basis after estimated recoveries from state UST remediation funds of
approximately $15.4 million. We estimate that approximately 75 properties will
not have regulatory or contractual closure at the end of this period and that
spending and recoveries will continue after 2012, although at amounts
significantly reduced from current levels. Neither the aggregate cash
expenditure nor the accrued environmental remediation costs, nor their related
recoveries, have been adjusted for inflation or discounted to present value. It
is possible that estimated net cash expenditures through 2012, and thereafter,
could exceed the net amount accrued as of December 31, 2002. During 2003, we
estimate that our net environmental spending will be approximately $4.3 million
and our business plan for 2003 reflects a net change in estimated remediation
costs of approximately $5.0 million.

In view of the uncertainties associated with environmental expenditures,
however, we believe it is possible that future actual net expenditures could be
substantially higher than these estimates. Adjustments to accrued liabilities
for environmental remediation costs will be reflected in our financial
statements as they become probable and reasonably estimable as defined by GAAP.
Although environmental costs may have a significant impact on results of
operations for any single fiscal year or interim period, we believe that such
costs will not have a material adverse effect on our long-term financial
position.

We cannot predict what environmental legislation or regulations may be
enacted in the future or how existing laws or regulations will be administered
or interpreted with respect to products or activities to which they have not
previously been applied. We cannot predict if state underground storage tank
fund programs will be administered and funded in the future in a manner that is
consistent with past practices and if future environmental spending will
continue to be eligible for reimbursement under these programs. Compliance with
more stringent laws or regulations, as well as more vigorous enforcement
policies of the regulatory agencies or stricter interpretation of existing laws
which may develop in the future, could have an adverse effect on our financial
position, or

8

that of our tenants, and could require substantial additional expenditures for
future remediation.

Additional information with respect to environmental remediation costs and
estimates is set forth on pages 12 and 13, and in Note 7 to the financial
statements on page 26, of our Annual Report to Shareholders filed as Exhibit 13
to this annual report and incorporated by reference herein.

Our properties are concentrated in the northeastern United States, and adverse
conditions in that region, in particular, could negatively impact our
operations.

A significant portion of the properties we own and lease are located in
the northeastern United States. Because of the concentration of our properties
in that region, in the event of adverse economic conditions in that region, we
would likely experience higher risk of default on payment of rent payable to us
(including under the master lease) than if our properties were more
geographically diversified. Additionally, the rents on our properties may be
subject to a greater risk of default than other properties in the event of
adverse economic, political, or business developments or natural hazards that
may affect the northeastern United States and the ability of our lessees to make
rent payments. In the event of any natural disaster, our ability to pay
dividends could be adversely affected.

We are in a competitive business.

The real estate industry is highly competitive. Where we own properties,
we compete for tenants with a large number of real estate property owners and
other companies that sublet properties. Principal means of competition are rents
charged and attractiveness of location. In addition, we expect other major real
estate investors with significant capital will compete with us for attractive
investment opportunities. These competitors include petroleum manufacturing,
distributing and marketing companies, other REITs, investment banking firms and
private institutional investors. This competition has increased prices for
commercial properties and may impair our ability to make suitable property
acquisitions on favorable terms in the future.

Our future cash flow is dependent on renewal of leases and reletting of our
space.

We are subject to risks that leases may not be renewed, locations may not
be relet or the terms of renewal or reletting (including the cost of required
renovations) may be less favorable than current lease terms. In addition,
numerous properties compete with our properties in attracting tenants to lease
space. The number of competitive properties in a particular area could have a
material adverse effect on our ability to lease our properties or newly acquired
properties and on the rents charged. If we were unable to promptly relet or
renew the leases for all or a substantial portion of these locations, or if the
rental rates upon such renewal or reletting were significantly lower than
expected, our cash flow could be adversely affected. The master lease has an
initial term expiring in December 2015, and generally provides Marketing with
three renewal options of ten years each and a final renewal option of three
years and ten months extending to 2049 that may be exercised only on an "all or
nothing" basis.

9

We may acquire or develop new properties, and this may create risks.

We may acquire or develop properties or acquire other real estate
companies when we believe that an acquisition or development matches our
business strategies. We might not succeed in consummating desired acquisitions
or in completing developments on time or within our budget. We also might not
succeed in leasing newly developed or acquired properties at rents sufficient to
cover their costs of acquisition or development and operations.

We are subject to losses that may not be covered by insurance.

Marketing, and other tenants, as the lessee of our properties, are
required to provide insurance for such properties, including casualty,
liability, fire and extended coverage in amounts and on other terms as set forth
in our master leases. There are certain types of losses (such as certain
environmental liabilities, earthquakes, hurricanes, floods and civil disorders)
which are either uninsurable or not economically insurable in our judgment. The
destruction of, or significant damage to, properties due to an uninsured cause
would result in an economic loss and could result in us losing both our
investment in, and anticipated profits from, such properties. When a loss is
insured, the coverage may be insufficient in amount or duration, or a lessee's
customers may be lost, such that the lessee cannot resume its business after the
loss at prior levels or at all, resulting in reduced rent or a default under its
lease. Any such loss relating to a large number of properties could have a
material adverse effect on our financial condition. We carry insurance against
certain risks and in such amount as we believe is customary for businesses of
our kind. However, as the costs and availability of insurance change, we may
decide not to be covered against certain losses where, in the judgment of
management, the insurance is not warranted due to cost or availability of
coverage or the remoteness of perceived risk. There is no assurance that our
insurance against loss will be sufficient.

Failure to qualify as a REIT would have adverse consequences to our
shareholders.

We have elected to be taxed as a REIT beginning with fiscal year 2001. We
cannot, however, guarantee that we will continue to qualify in the future as a
REIT. In order to initially qualify for REIT status, the Company was required,
among other items, to make a distribution to shareholders in an amount at least
equal to its accumulated "earnings and profits" (as defined by the Internal
Revenue Code from the years it operated as a taxable corporation. On August 1,
2001, the Company paid the earnings and profits distribution to its shareholders
in an amount that the Company estimated was required in order for it to qualify
as a REIT. Determination of accumulated earnings and profits for federal income
tax purposes is extremely complex. Should the Internal Revenue Service
successfully assert that the Company's accumulated earnings and profits were
greater than the amount distributed, the Company may fail to qualify as a REIT;
however, the Company may avoid losing its REIT status by paying a deficiency
dividend to eliminate any remaining accumulated earnings and profits. The
Company may have to borrow money or sell assets to pay such a deficiency
dividend. We cannot give any assurance that new legislation, regulations,
administrative interpretations or court decisions will not significantly change
the requirements relating to our qualification. If we fail to qualify as

10

a REIT, we will again be subject to federal income tax at regular corporate
rates, we would be required to pay significant income taxes and would have less
money available for our operations and distributions to shareholders. This would
likely have a significant adverse effect on the value of our securities.

As a REIT, we are dependent on external sources of capital.

To maintain our status as a REIT, we must distribute to our shareholders
each year at least 90% of our net taxable income, excluding any net capital
gain. Because of these distribution requirements, it is not likely that we will
be able to fund all future capital needs, including acquisitions, from income
from operations. We therefore will have to rely on third party sources of
capital, which may or may not be available on favorable terms or at all. Our
access to third party sources of capital depends upon a number of factors,
including general market conditions, the market's perception of our growth
potential, our current and potential future earnings and cash distributions and
the market price of our common stock. Moreover, additional equity offerings may
result in substantial dilution of shareholders' interests, and additional debt
financing may substantially increase our leverage.

Proposed tax legislation may have an effect on the value of our preferred and
common stocks.

Recently, President Bush announced his 2003 Economic Plan, which includes
a proposal that would eliminate the taxation of corporate dividends at the
shareholder level to the extent that the corporation paying the dividends has
paid tax on its income. Under the proposal, dividends we pay generally would
continue to be taxable to you as in the past. While this proposal would not
directly affect the taxation of REITs or their shareholders, it could make an
investment in a REIT comparatively less attractive than an investment in other
corporations due to the fact that dividends paid by REITs would continue to be
taxable to shareholders in the same manner as under current law. Accordingly, if
the President's plan is enacted in its proposed form, it could adversely affect
the price of our equity securities. We can not predict whether this proposal, or
any similar proposal, will be enacted or what impact it may have on the price of
our equity securities.

We may be unable to pay dividends and our equity may not appreciate.

Although the holders of Getty preferred stock are entitled to receive
stated dividends quarterly, and additional dividends to the extent dividends
paid on shares of Getty common stock in any fiscal year of Getty exceed such
dividends, we may be legally prevented from paying any dividends, including all
or a portion of the dividends to which the holders of Getty preferred stock
would otherwise be entitled. Under applicable Maryland law, our ability to pay
dividends would be restricted if, after payment of the dividend, (1) we would
not be able to pay indebtedness as it becomes due in the usual course of
business or (2) our total assets would be less than the sum of our liabilities.
No assurance can be given that our financial performance in the future will
permit our payment of any dividends, including dividends on our series A
preferred stock, at the

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times and in the amounts specified in our charter. Moreover, no assurance can be
given that the value of the shares of our common stock will increase to levels
which make it economically advantageous to holders of our series A preferred
stock to exercise their right to convert such shares into our common stock. As a
result of the factors described above, we may experience material fluctuations
in future operating results on a quarterly or annual basis, which could
materially and adversely affect our business, stock price and ability to pay
dividends.

You should not place undue reliance on forward-looking statements, which
reflect our view only as of the date hereof. We undertake no obligation to
publicly release revisions to these forward-looking statements that reflect
future events or circumstances or the occurrence of unanticipated events.

Item 2. Properties

The following table summarizes the geographic distribution of our
properties at December 31, 2002. The table also identifies the number and
location of properties we lease from third-parties and which Marketing leases
from us under the master lease.

OWNED BY GETTY REALTY LEASED BY GETTY REALTY
---------------------------- --------------------------- TOTAL PERCENT
MARKETING OTHER MARKETING OTHER PROPERTIES OF TOTAL
AS TENANT PROPERTIES AS TENANT PROPERTIES BY STATE PROPERTIES
--------- ---------- --------- ---------- -------- ----------

New York 228 17 104 4 353 33.7%
New Jersey 110 10 47 2 169 16.1
Massachusetts 91 3 67 -- 161 15.3
Pennsylvania 107 17 25 2 151 14.4
Connecticut 58 3 23 -- 84 8.0
New Hampshire 28 2 3 -- 33 3.1
Virginia 3 3 21 -- 27 2.6
Maine 17 2 3 1 23 2.2
Rhode Island 14 -- 5 -- 19 1.8
Delaware 10 3 2 -- 15 1.4
Maryland 4 2 1 -- 7 0.7
Florida -- 6 -- -- 6 0.6
Vermont 1 -- -- -- 1 0.1
----- ----- ----- ----- ----- -----
Total 671(1) 68 301(2) 9 1,049 100.0%
===== ===== ===== ===== ===== =====

- ---------------
(1) Includes six terminal properties owned in New York, New Jersey,
Connecticut and Rhode Island.

(2) Includes three terminals/bulk plants related to Marketing's residential
fuels business based in the New York Mid-Hudson Valley.

12

The leased properties have a remaining lease term averaging over 17 years,
including renewal options. The following table sets forth information regarding
lease expirations, including the exercise of lease renewal and extension
options, for properties that we lease from third parties:

Number of
Leases Percent
Calendar Year Expiring of Total
------------- -------- --------

2003 15 4.8
2004 8 2.6
2005 6 2.0
2006 15 4.8
2007 17 5.5
--- -----
Subtotal 61 19.7
--- -----
Thereafter 249 80.3
--- -----
310 100.0%
=== =====

We have rights-of-first refusal to purchase or lease 249 of our leased
properties. Although there can be no assurance regarding any particular
property, historically we generally have been successful in renewing or entering
into new leases when any lease term expires. Approximately 74% of our leased
properties are subject to automatic renewal or extension options.

On February 3, 2003 we announced that we had entered into a definitive
asset purchase agreement to acquire 42 retail service station and convenience
store properties in Massachusetts (41) and Rhode Island (1) currently leased by
us. The initial terms of these leases, included in the above data, expire in
2006 and are, thereafter, subject to renewal options and scheduled rent
escalations through 2056.

In the opinion of our management, our relationships with our landlords are
good and all of our properties (including those that are fee owned) are
adequately covered by casualty and liability insurance. In addition, we require
our tenants to provide insurance for all properties they lease from us,
including casualty, liability, fire and extended coverage in amounts and on
other terms satisfactory to us. Currently, we have no plans for material
improvements to any of our properties. However, our tenants frequently make
improvements to the properties leased from us at their expense.

Four of our owned service station properties with a net book value of
approximately $1.1 million are secured by mortgages with an aggregate principal
balance of approximately $1.0 million at a weighted average interest rate of
7.45% per annum. No other material mortgages, liens or encumbrances exist on our
properties.

Our wholly owned subsidiary, Getty Properties Corp., is a party to a
master lease agreement with Marketing with respect to 963 service station and
convenience store properties and our nine distribution terminals and bulk
plants. The master lease is a unitary lease and has an initial term expiring in
2015, and generally provides Marketing with three renewal options of ten years
each and a final renewal option of three years and ten months extending to 2049
that may be exercised only on an "all or nothing" basis. The master lease is a
"triple-net" lease, under which Marketing is responsible for the cost of all

13

taxes, maintenance, repair, insurance and other operating expenses. Certain
financial obligations of Marketing under the master lease through at least
December 9, 2003 are guaranteed by Lukoil and an Austrian subsidiary of Lukoil.

If Marketing fails to pay rent, taxes or insurance premiums when due under
the master lease, and the failure is not cured by Marketing within a specified
time after receipt of notice, we have the right to terminate the master lease
and to exercise other customary remedies against Marketing. If Marketing fails
to comply with any other obligation under the master lease after notice and
opportunity to cure, we do not have the right to terminate the master lease.
Alternatively, our available remedies under the master lease are to obtain an
injunction or other equitable relief requiring Marketing to comply with its
obligations under the master lease and to recover damages from Marketing
resulting from the failure.

If any lease we have with a third party landlord is terminated as a result
of our default and the default is not caused by Marketing, we have agreed to
indemnify Marketing for its losses with respect to the termination. Where we
lease a property from a third party landlord under a lease which is about to
expire and does not contain options to renew we and Marketing each have a
non-exclusive right to negotiate with that third party landlord except at 20
identified locations, as of December 31, 2002, where Marketing has the exclusive
right to negotiate with the third party landlord until six months before the
lease expires. We have also agreed that if we decide to sell any property leased
to Marketing under the master lease, we will first offer to sell that property
to Marketing pursuant to procedures set forth in the master lease.

In general, Marketing remains responsible for any violations of
non-environmental laws that existed prior to the time of the amendment of the
master lease. We have agreed to provide limited indemnification, capped at
$1.375 million, for certain violations, subject to Marketing's right, if it
reasonably determines that curing the violation would be economically
impractical, to require us to cure the violation or to remove the affected
property from the master lease under certain circumstances. Our indemnification
responsibilities described above expired in December 2002 unless curing of any
violation commenced prior to such date.

Getty Properties has also agreed to indemnify Marketing for certain
pre-existing environmental conditions at six terminals we own. Under the
agreement, Marketing will pay the first $1.5 million of costs and expenses
incurred in connection with remediating any pre-existing terminal conditions,
Marketing and Getty Properties will share equally the next $8.5 million of those
costs and expenses and Marketing will pay all additional costs and expenses over
$10 million. Our aggregate indemnification liability under this agreement is
capped at $4.25 million. Our indemnification responsibilities described above
expire in December 2010. Under the master lease, we continue to have additional
ongoing environmental remediation obligations for 319 scheduled sites. Marketing
otherwise remains liable for all environmental matters.

14

Item 3. Legal Proceedings

(a) Information in response to this item is incorporated herein by
reference from Note 5 of the Notes to Consolidated Financial Statements set
forth on page 25 of the Annual Report.

In 1991, the State of New York brought an action in the New York State
Supreme Court in Albany County against one of our former subsidiaries seeking
reimbursement in the amount of $189,000 for cleanup costs incurred at a service
station. The State is also seeking penalties of $200,000 and interest. Although,
there has been no activity in this proceeding in the past several years, in
January 2002, we received a letter from the State's attorney indicating that the
State intends to continue prosecuting the action and that the State is taking
steps to join the owners of the service station premises as additional
defendants in the lawsuit.

In 1994, one of our subsidiaries was served with an Amended Complaint
naming the subsidiary as one of many defendants in the Keystone Superfund case
pending in the U.S. District Court for the Middle District of Pennsylvania. The
Complaint pertained to the subsidiary's miscellaneous office refuse and used
furnace air and oil filters which were disposed of at the site. In 1995, another
subsidiary was brought into the same action pertaining to convenience store
refuse. In August 1997, we paid $40,000 in full settlement. The settlement had
been approved by the United States Environmental Protection Agency and was
approved by the Court in September 2002.

In 1995, Pennsauken Solid Waste Management Authority, its
successor-in-interest, the Pollution Control Financing Authority of Camden
County and the Township of Pennsauken, New Jersey commenced an action for
unspecified amounts against certain defendants for all costs and damages
incurred for the remediation of the Pennsauken Sanitary Landfill. In November
1996, one of the defendants filed a third party complaint in the Superior Court
of New Jersey, Camden County, against its former customers, including our former
construction company subsidiary, seeking indemnification from the third party
defendants for all costs it incurred or will incur in response to the release of
hazardous substances in the landfill plus attorneys' fees. We believe that any
exposure is not material because the quantities of construction fill deposited
at the waste site were small.

In June 1998, we were sued as a third-party defendant in the Superfund
case of U.S. v. Champion Chemical Co. and Imperial Oil Co., pending in the U.S.
District Court for New Jersey. Our defense is being conducted by Texaco Inc.,
which has agreed to fully indemnify us. In August 1998, we were sued as a
third-party defendant in the Superfund case of U.S. v. Manzo, pending in the U.
S. District Court for New Jersey. Our defense is also being conducted by Texaco
Inc., which has agreed to fully indemnify us. Both matters involve time periods
prior to 1985, when we purchased the properties from Texaco Inc. pursuant to an
agreement under which Texaco is obligated to indemnify us for environmental
matters of this kind.

15

In December 1998, the New York State Department of Environmental
Conservation filed an administrative complaint against us for civil penalties
for alleged groundwater contamination and gasoline migration into a residence
basement in April 1997. The action was filed in response to a citizen's lawsuit
filed against us in the U.S. District Court for the Southern District of New
York.

In January 2000, the Massachusetts Department of Environmental Protection
("MADEP") alleged that we had violated certain regulatory provisions related to
the operation of gasoline vapor recovery systems and handling of waste oil in
the late 1980's and early 1990's. MADEP was seeking a fine of $123,000. This
matter was settled with Getty Petroleum Marketing Inc. entering into a consent
order with MADEP and their payment of a fine.

In June 2000, the State of New York made a demand on us to reimburse the
State $61,000, together with interest, for costs expended to remediate a
gasoline discharge that occurred at a service station in 1984. No legal action
has been commenced to date. In 1998 we paid $7,660 to the State for remediation
costs. After that payment, the State has alleged that it conducted further
remediation without notice to us and incurred additional costs. This case was
settled in May 2002 for the total sum of $49,485 paid to the State of New York.

In August 2000, the State of New York filed a lawsuit against us in the
New York State Supreme Court in Albany County, seeking reimbursement at $607,000
(plus interest and penalties) spent to clean up a gasoline discharge that
occurred in 1987. The Company is defending the matter.

In September 2001, the State of New York made a demand on us to reimburse
the State the sum of $111,000 plus a penalty of $80,000, for costs expended to
remediate a petroleum discharge that occurred in 1996. In October 2001, we wrote
to the State stating that we do not believe that we are the party responsible
for the discharge. In December 2002, the State of New York served upon us a
summons with notice, filed in the New York State Supreme Court in Albany County
for monetary damages.

In July 2002, a defendant in a lawsuit filed by the State of New York in
Supreme Court in Albany County, served us with a third party summons in the
State's lawsuit. The State of New York is seeking reimbursement in the amount of
$163,067 from the named defendant for costs associated with a discharge at one
of the company's former gasoline service station properties that was sold to the
named defendant. The named defendant has impleaded us as a third party
defendant, alleging that we are responsible for the costs for which the State is
seeking reimbursement. The Company is defending the matter.

Item 4. Submission of a Vote of Security Holders

No matter was submitted to a vote of security holders during the three
months ended December 31, 2002.

16

PART II

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters

Information in response to this item is incorporated herein by reference
from material under the heading "Capital Stock" on page 32 of the Annual Report.

Item 6. Selected Financial Data

Information in response to this item is incorporated herein by reference
from material under the heading "Selected Financial Data" on page 6 of the
Annual Report.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Information in response to this item is incorporated herein by reference
from material under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 7 through 14 of the
Annual Report.

Item 7A. Market Risk

Information in response to this item is incorporated herein by reference
from Note 5 of the Notes to Consolidated Financial Statements set forth on page
25 of the Annual Report.

Item 8. Financial Statements and Supplementary Data

Information in response to this item is incorporated herein by reference
from the financial information set forth on pages 16 through 31 of the Annual
Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

17

PART III

Item 10. Directors and Executive Officers of the Registrant

Information with respect to directors in response to this item is
incorporated herein by reference from material under the headings "Election of
Directors" and "Compliance with Section 16(a) of the Securities Exchange Act of
1934" on pages 2 and 14, respectively, of the Proxy Statement. The following
table lists our executive officers, their respective ages, and the offices and
positions held.

NAME AGE POSITION OFFICER
---- --- -------- -------
SINCE
-----

Leo Liebowitz 75 President and Chief Executive 1971
Officer
Randi Young Filip 42 Vice President, General 2001
Counsel & Corporate Secretary
Kevin C. Shea 43 Vice President 2001
Thomas J. 44 Corporate Controller and 2001
Stirnweis Treasurer

Ms. Filip has been with Getty since 1986 and has served as Vice President,
General Counsel and Corporate Secretary since January 1, 2001. Prior thereto,
she served as Assistant General Counsel and Corporate Secretary.

Mr. Shea has been with Getty since 1984 and has served as Vice President
since January 1, 2001. Prior thereto, he was Director of National Real Estate
Development.

Mr. Stirnweis joined Getty on January 1, 2001 as Corporate Controller and
Treasurer. Prior to joining Getty, he was Manager of Financial Reporting and
Analysis of Getty Petroleum Marketing Inc., where he provided services to Getty
under a services agreement since the spin-off of Marketing in March 1997. Prior
thereto, he held the same position at Getty since 1988. Mr. Stirnweis serves as
our principal financial and accounting officer.

Management is not aware of any family relationships between any of its
directors or executive officers.

Item 11. Executive Compensation

Information in response to this item is incorporated herein by reference
from material under the headings "Directors' Meetings, Committees and Executive
Officers", "Compensation" through, "Report of the Compensation and Stock Option
Committee" and "Stock Performance Graph" on pages 5, 6-11 and 13, respectively,
of the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management

18

Information in response to this item is incorporated herein by reference
from material under the heading "Beneficial Ownership of Capital Stock" on pages
3 - 5 of the Proxy Statement.

Item 13. Certain Relationships and Related Transactions

None.

Item 14. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Commission's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Corporate Controller and Treasurer, as appropriate, to
allow timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.

Within 90 days prior to the date of this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Corporate Controller and Treasurer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on the
foregoing, the Company's Chief Executive Officer and Corporate Controller and
Treasurer concluded that the Company's disclosure controls and procedures were
effective.

There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect the internal controls
subsequent to the date the Company completed its evaluation.

19

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1. Financial Statements

The financial statements listed in the Index to Financial
Statements and Financial Statement Schedules on page 21 are
filed as part of this annual report.

2. Financial Statement Schedule

The financial statement schedule listed in the Index to
Financial Statements and Financial Statement Schedule on page
21 is filed as part of this annual report.

3. Exhibits

The exhibits listed in the Exhibit Index on pages 24 through
27 are filed as part of this annual report.

(b) Reports on Form 8-K

None.

20

GETTY REALTY CORP. INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES COVERED BY REPORT OF
INDEPENDENT ACCOUNTANTS
Items 15(a) 1 & 2

Reference
-----------------------------------------

2002
Form 10-K Annual Report
Data incorporated by reference from attached 2002 Annual Report to (pages) (pages)
Shareholders of Getty Realty Corp.

Report of Independent Accountants 31

Consolidated Statements of Operations for the years ended December 31, 2002 16
and 2001 and the eleven months ended December 31, 2000

Consolidated Balance Sheets as of December 31, 2002 and 2001 17

Consolidated Statements of Cash Flows for the years ended December 31, 2002 18
and 2001 and the eleven months ended December 31, 2000

Notes to Consolidated Financial Statements 19 - 30

Report of Independent Accountants-Financial Statement Schedule 22

Schedule II - Valuation and Qualifying Accounts and Reserves for the years 23
ended December 31, 2002 and 2001 and the eleven months ended December 31,
2000

All other schedules are omitted for the reason that they are either not
required, not applicable, not material or the information is included in the
consolidated financial statements or notes thereto.

The financial statements listed in the above index which are included in
the 2002 Annual Report to Shareholders are hereby incorporated by reference.
With the exception of the pages listed in the above index and the information
incorporated by reference included in Part II, Items 5, 6, 7, 7A and 8, the 2002
Annual Report to Shareholders is not deemed filed as part of this report.

21

REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Shareholders of Getty Realty Corp.:

Our audits of the consolidated financial statements referred to in our report
dated February 3, 2003 appearing in the 2002 Annual Report to Shareholders of
Getty Realty Corp. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 15(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

New York, New York
February 3, 2003

22

GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II--VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended December 31, 2002 and 2001 and
the eleven months ended December 31, 2000
(in thousands)

Balance at
beginning of Balance at
period Additions Deductions end of period
------ --------- ---------- -------------

December 31, 2002:
Allowance for mortgages and
accounts receivable $115 $227 $ 64 $278

Allowance for recoveries from
state underground storage
tank funds $ -- $500 $ -- $500

December 31, 2001:
Allowance for mortgages and
accounts receivable $102 $ 13 $ -- $115

December 31, 2000:
Allowance for mortgages and
accounts receivable $158 $ 17 $ 73 $102

23

EXHIBIT INDEX

GETTY REALTY CORP.

Annual Report on Form 10-K
for the year ended December 31, 2002

Exhibit
No. Description
- ------ -----------

1.1 Agreement and Plan of Filed as Exhibit 2.1 to
Reorganization and Merger, Company's Registration
dated as of December 16, 1997 Statement on Form S-4, filed on
(the "Merger Agreement") by January 12, 1998 (File No.
and among Getty Realty Corp., 333-44065), included as
Power Test Investors Limited Appendix A to the Joint Proxy
Partnership and CLS General Statement/Prospectus that is a
Partnership Corp. part thereof, and incorporated
herein by reference.

3.1 Articles of Incorporation of Filed as Exhibit 3.1 to
Getty Realty Holding Corp. Company's Registration
("Holdings"), now known as Statement on Form S-4, filed on
Getty Realty Corp., filed January 12, 1998 (File No.
December 23, 1997. 333-44065), included as
Appendix D to the Joint Proxy
Statement/Prospectus that is a part
thereof, and incorporated herein by
reference.

3.2 Articles Supplementary to Filed as Exhibit 3.2 to
Articles of Incorporation of Company's Annual Report on Form
Holdings, filed January 21, 10-K for the fiscal year ended
1998. January 31, 1998 (File No.
001-13777) and incorporated herein by
reference.

3.3 By-Laws of Getty Realty Corp. *

3.4 Articles of Amendment of Filed as Exhibit 3.4 to
Holdings, changing its name to Company's Annual Report on Form
Getty Realty Corp., filed 10-K for the fiscal year ended
January 30, 1998. January 31, 1998 (File No.
001-13777) and incorporated herein by
reference.

3.5 Amendment to Articles of Filed as Exhibit 99.2 to
Amendment, dated August 1, Company's Current Report on
2001. Form 8-K dated August 1, 2001
(File No. 001-13777) and
incorporated herein by
reference.

10.1 Retirement and Profit Sharing Filed as Exhibit 10.2(b) to
Plan (amended and restated as Company's Annual Report on Form
of September 19, 1996), 10-K for the fiscal year ended
adopted by the Company on January 31, 1997 (File No.
December 16, 1997. 1-8059) and incorporated herein
by reference.

10.1(a) Retirement and Profit Sharing *
Plan (amended and restated as of
January 1, 2002), adopted by the
Company on September 3, 2002.

24

Exhibit
No. Description
- ------ -----------

10.2 1998 Stock Option Plan, Filed as Exhibit 10.1 to
effective as of January 30, Company's Registration
1998. Statement on Form S-4, filed on
January 12, 1998 (File No.
333-44065), included as
Appendix H to the Joint Proxy
Statement/Prospectus that is a
part thereof, and incorporated
herein by reference.

10.3 Asset Purchase Agreement among Filed as Exhibit 2(a) to the
Power Test Corp. (now known as Current Report on Form 8-K of
Getty Properties Corp.), Power Test Corp., filed
Texaco Inc., Getty Oil Company February 19, 1985 (File No.
and Getty Refining and 1-8059) and incorporated herein
Marketing Company, dated as of by reference.
December 21, 1984.

10.4 Trademark License Agreement Filed as Exhibit 2(b) to the
among Power Test Corp., Texaco Current Report on Form 8-K of
Inc., Getty Oil Company and Power Test Corp., filed
Getty Refining and Marketing February 19, 1985 (File No.
Company, dated as of February 1-8059) and incorporated herein
1, 1985. by reference.

10.5 Form of Indemnification Filed as Exhibit 10.15 to
Agreement between the Company Company's Annual Report on Form
and its directors. 10-K for the fiscal year ended
January 31, 1998 (File No.
001-13777) and incorporated
herein by reference.

10.6 Supplemental Retirement Plan Filed as Exhibit 10.22 to the
for Executives of the Company Annual Report on Form 10-K for
(then known as Getty Petroleum the fiscal year ended January
Corp.) and Participating 31, 1990 (File No. 1-8059) of
Subsidiaries (adopted by the Getty Petroleum Corp. and
Company on December 16, 1997). incorporated herein by
reference.

10.7 Form of Agreement dated Filed as Exhibit 10.23 to the
December 9, 1994 between Getty Annual Report on Form 10-K for
Petroleum Corp. and its the fiscal year ended January
non-director officers and 31, 1995 (File No. 1-8059) of
certain key employees Getty Petroleum Corp. and
regarding compensation upon incorporated herein by
change in control. reference.

10.8 Form of Agreement dated as of Filed as Exhibit 10.27 to the
March 7, 1996 amending Annual Report on Form 10-K for
Agreement dated as of December the fiscal year ended January
9, 1994 between Getty 31, 1996 (File No. 1-8059) of
Petroleum Corp. (now known as Getty Petroleum Corp. and
Getty Properties Corp.) and incorporated herein by
its non-director officers and reference.
certain key employees
regarding compensation upon
change in control (See Exhibit
10.11).

10.9 Form of letter from Getty Filed as Exhibit 10.19 to
Petroleum Corp. dated April 8, Company's Annual Report on Form
1997, confirming that a change 10-K for the fiscal year ended
of control event had occurred January 31, 1998 (File No.
pursuant to the change of 001-13777) and incorporated
control agreements. (See herein by reference.
Exhibits 10.7 and 10.8).

25

Exhibit
No. Description
- ------ -----------

10.10 Form of Agreement dated March Filed as Exhibit 10.20 to
9, 1998, from the Company to Company's Annual Report on Form
certain officers and key 10-K for the fiscal year ended
employees, adopting the prior January 31, 1998 (File No.
change of control agreements, 001-13777) and incorporated
as amended, and further herein by reference.
amending those agreements.
(See Exhibits 10.7, 10.8 and
10.9).

10.11 Form of Reorganization and Filed as Exhibit 10.29 to the
Distribution Agreement between Annual Report on Form 10-K for
Getty Petroleum Corp. (now the fiscal year ended January
known as Getty Properties 31, 1997 (File No. 1-8059) of
Corp.) and Getty Petroleum Getty Petroleum Corp. and
Marketing Inc. dated as of incorporated herein by reference
February 1, 1997.

10.12 Form of Tax Sharing Agreement Filed as Exhibit 10.32 to the
between Getty Petroleum Corp. Annual Report on Form 10-K for
(now known as Getty Properties the fiscal year ended January
Corp.) and Getty Petroleum 31, 1997 (File No. 1-8059) of
Marketing Inc. Getty Petroleum Corp. and
incorporated herein by
reference.

10.13 Form of Stock Option Filed as Exhibit 10.33 to the
Reformation Agreement made and Annual Report on Form 10-K for
entered into as of March 21, the fiscal year ended January
1997 by and between Getty 31, 1997 (File No. 1-8059) of
Petroleum Corp. (now known as Getty Petroleum Corp. and
Getty Properties Corp.) and incorporated herein by
Getty Petroleum Marketing Inc. reference.

10.14 Consolidated, Amended and Filed as Exhibit 10.21(a) to
Restated Master Lease Company's Quarterly Report on
Agreement dated November 2, Form 10-Q dated December 15,
2000 between Getty Properties 2000 (File No. 001-13777) and
Corp. and Getty Petroleum incorporated herein by
Marketing Inc. reference.

10.15 Environmental Indemnity Filed as Exhibit 10.30 to
Agreement dated November 2, Company's Quarterly Report on
2000 between Getty Properties Form 10-Q dated December 15,
Corp. and Getty Petroleum 2000 (File No. 001-13777) and
Marketing Inc. incorporated herein by
reference.

10.16 Guarantee of Lease as of Filed as Exhibit 99.3 to
November 2, 2000 by OAO LUKOIL Company's Current Report on
and Lukoil International GmbH. Form 8-K dated November 9, 2000
(File No. 001-13777) and
incorporated herein by
reference.

10.17 Amended and Restated Trademark Filed as Exhibit 10.23(a) to
License Agreement, dated Company's Quarterly Report on
November 2, 2000, between Form 10-Q dated December 15,
Getty Properties Corp. and 2000 (File No. (001-13777) and
Getty Petroleum Marketing Inc. incorporated herein by
reference.

10.18 Trademark License Agreement, Filed as Exhibit 10.23(b) to
dated November 2, 2000, Company's Quarterly Report on
between Getty (TM) Corp. and Form 10-Q dated December 15,
Getty Petroleum Marketing Inc. 2000 (File No. 001-13777) and
incorporated herein by
reference.

26

Exhibit
No. Description
- ------ -----------

10.19 Asset Purchase Agreement by *
and between Jems of New
England, Inc., Charlex, Inc.,
Jems Enterprises, Inc., and
Robbins Realty Corp., and
Getty Properties Corp.

13 Annual Report to Shareholders *
for the fiscal year ended
December 31, 2002.

21 Subsidiaries of the Company. *

23 Consent of Independent *
Accountants.

99.1 Certification of Chief *
Executive Officer

99.2 Certification of Chief *
Financial Officer

- -------
* Filed herewith

27

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Getty Realty Corp.
(Registrant)

By: /s/ Thomas J. Stirnweis
-------------------------------------
Thomas J. Stirnweis,
Corporate Controller and Treasurer
March 27, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By: /s/ Leo Liebowitz By: /s/ Thomas J. Stirnweis
---------------------------- ------------------------------------
Leo Liebowitz Thomas J. Stirnweis
President, Chief Executive Corporate Controller and Treasurer
Officer and Director (Principal Financial and
March 27, 2003 Accounting Officer)
March 27, 2003

By: /s/ Milton Cooper By: /s/ Philip E. Coviello
---------------------------- ------------------------------------
Milton Cooper Philip E. Coviello
Director Director
March 27, 2003 March 27, 2003

By: /s/ Howard Safenowitz By: /s/ Warren G. Wintrub
---------------------------- ------------------------------------
Howard Safenowitz Warren G. Wintrub
Director Director
March 27, 2003 March 27, 2003

28

CERTIFICATIONS:

I, Thomas J. Stirnweis, certify that:

1. I have reviewed this annual report on Form 10-K of Getty Realty Corp.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 27, 2003

By: /s/ THOMAS J. STIRNWEIS
----------------------------------------
Thomas J. Stirnweis
Corporate Controller and Treasurer
(Principal Financial and Accounting Officer)

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I, Leo Liebowitz, certify that:

1. I have reviewed this annual report on Form 10-K of Getty Realty Corp.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 27, 2003

By: /s/ LEO LIEBOWITZ
-------------------------------------
Leo Liebowitz
President and Chief Executive Officer

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