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| 8-K - 8-K - GETTY REALTY CORP /MD/ | d596656d8k.htm |
 GETTY REALTY CORP. PRESENTATION
Bank of America Merrill Lynch Global Real Estate Conference
September 2013
Exhibit 99.1 |
 Forward Looking Statements
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.
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,
2012
and
the
Company’s
Quarterly
Report
on
Form
10-Q
for
the
quarter
ended
June
30,
2013,
including,
in
particular,
the
section
entitled
“Risk
Factors”
contained
therein,
and
its
other
filings
with
the
SEC.
Unless
otherwise
noted
in
this
Presentation,
all
reported
financial
data
is
presented
as
of
the
quarter
ended
June
30,
2013,
and
all
portfolio
data
is
as
of
August
31,
2013.
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.
1 |
 Investment Highlights
2
National portfolio with focus on growing and densely populated,
high barrier to entry markets
Stable cash flows supported by long-term, triple-net leases
Proven platform to pursue growth opportunities in sector with
large consolidation opportunity
At a positive inflection point in the Company’s evolution
Flexible balance sheet with low leverage
Upside opportunities created through rationalization of
transitional properties in existing portfolio
1
2
3
4
5
6 |
 Leading National Portfolio with Future Upside
3
Long-term triple-net lease stability with future upside through transitional
properties 1,026 retail motor fuel/convenience
store properties, including five
terminals
898 owned properties (87.5%)
128 leased properties (12.5%)
21 states plus Washington, D.C.
Current Portfolio
20 tenants (662 properties) under long-
term, triple-net leases
89 single tenant triple-net leases
84% of core leases expire after 2022
Sites branded Getty, BP, Exxon, Mobil,
Shell, Chevron, Valero and Aloha
751 Core Properties
275 transitional properties
Successful releasing program focused
on attractive long-term, triple-net
leases
Proactively recycling capital from
property dispositions into accretive
investments
Future Upside |
 Significant Presence in Markets with
“High Barriers to Entry”
4
Limited Availability
of Suitable
Land
Prime Locations in
High Traffic
Areas
Increasingly
Restrictive
Zoning
Regulations
High replacement costs
Limited new development
Unique assets with ability to satisfy increased
demand for non-gas
uses
Mature neighborhoods
High daily traffic counts
Optimal corners with high visibility and easy
access
Close proximity to highway entrances or exit
ramps
Difficult and lengthy permitting process
Impractical to obtain the necessary permits to
construct a similar use site
Leading national portfolio with concentrations in high barrier to entry markets
in the Northeast and Mid-Atlantic regions |
 Sustainable Cash Flows Supported by
Long-Term Leases
5
Only 3% of leases
mature in next 5 years
and 17% in next
10 years
High Quality Tenant Base
Diversified tenant base
Prominent national and regional suppliers
2012 repositioning added 10 new high quality tenants
Compelling unit level economics
Rent coverage –
1.75x to 2.25x
Majority of triple-net leases have 15 year initial terms
Provisions for rent increases during initial term and
renewal periods
Unit level viability via station and tenant financial
performance
84% of core property leases expire after 2022
Highlights
Stable Long-Term Lease Structure
(1)
(1) Does not include single tenant triple-net leases or transitional properties
as their lease maturities vary. |
 Incremental Upside in Transitional Properties
6
Proactive portfolio repositioning presents an opportunity to improve the cash flow
profile Disposition action plan:
Remaining properties being sold in a real estate auction or through regional
brokers De-tanked
sites
Restructuring of original unitary lease entered into in May 2012
~30 locations are entangled in an ongoing eviction action in CT Superior Appeals
Court Successfully amended lease in August 2013, including an agreement to
remove select properties NECG
Lease
Composed primarily of operating gas stations
Leasing action plan:
~50 properties being re-let to national and regional fuel distributors
Locations will be added to existing leases and Company will enter into new
triple-net leases with regional distributors
Disposition action plan:
~100 properties being sold in a real estate auction
Signed contracts of accepted offers on majority of these locations
Month to
Month
Licenses
Disposition action plan:
Remaining properties being sold in a real estate auction or through regional
brokers Terminals
84
157
5
29 |
 Poised to Consolidate Fragmented Industry
7
More
than
150,000
properties
in
the
sector
(1)
Portfolio
dispositions
–
distributors,
MLP’s,
families
Consolidating
sector
–
approximately
60%
of
U.S.
stations
individually
owned
(1)
Debt
maturities
–
conduits,
majors,
banks
Mature, infill locations
Wide variety of formats
Convenience stores, repair bays, quick serve, quick
lube, etc.
Focus on fuel component to drive customer visits /
visibility
Gasoline, Diesel, Ethanol, CNG, LNG, other
Proven ability to source off-market
transactions not seen by others
Ability to integrate and assimilate
multi-unit portfolios
Capacity to operate in a
highly regulated industry
Established track-record of managing
and remediating environmental concerns
Actively seeking portfolio acquisitions through competitively priced and
innovatively structured capital allocation
Target Investments
Broad Market Opportunity
The Getty Competitive Advantage
(1)
Per NACS 2013 Retail Fuels Report. |
 Accretive Acquisition of 36 Properties
8
$72.5 million acquisition of 36 properties in May 2013
Financed with debt and proceeds from the Company’s dispositions program (1031
exchanges) Tenants are subsidiaries of Capitol Petroleum Group, LLC, a
long-term tenant with which the Company has had a successful relationship
since 2009 New unitary triple-net leases having initial terms of 15 years
plus three renewal options Located in highly desirable markets
16 Mobil branded stations located in the New York metro area
20 stations (13 Exxon branded and 7 Shell branded) in the Washington, D.C.
Beltway Transaction Highlights
Illustrative Cash Flow Diagram (post-acquisition)
Getty
36 high-volume
properties
Capitol
Sub-lease
payments and
motor fuel sales
Sub-lease property
and supply motor
fuel
Thousands
of customers
Motor fuel, auto
service and
convenience
store
goods
Lease
Lease payments |
 At
Positive Inflection Point In Company’s Evolution 9
Purchased 36 properties from Capitol Petroleum Group in May 2013
First portfolio acquisition since 2011
Refocusing efforts on accretive growth opportunities
Settled Lukoil litigation in July 2013
Realized approximately $32 million of initial proceeds from settlement in
August 2013
Additional proceeds may be realized from unsecured claims
Repositioning of Marketing Portfolio mostly complete
Upside remains in transitional properties from cost reductions and
recycling capital into new, high quality assets
Incurred $4.6 million of costs associated with transitional properties for the
first
six
months
of
2013
(1)
Expected reduction in Getty Petroleum Marketing Inc. related bankruptcy
expenses
Incurred
$2.8
million
of
bankruptcy
and
litigation
costs
for
the
first
six
months
of
2013
(1)
Expense reductions and capital inflows from asset sales and Lukoil Settlement provide
capacity for growth while maintaining low leverage
(1) See the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2013 for additional information. |
 Flexible Balance Sheet with Low Leverage
10
$175 million senior secured credit facility
Matures in 2015 (plus one year option)
L+ 250-300 bps
No amortization requirements
$100 million secured debt private placement
Matures in 2021
Fixed rate: 6%
No amortization requirements
Debt / EBITDA
(2)
Leverage
/
Total
Market
Capitalization
(2)
Debt
Maturity
Schedule
(1)
Debt
Refinancing
in
February
2013
(1)
Low leverage and flexible balance sheet compared to REIT peers
$121
$100
2013
2014
2015
2016
2017
2018
2019
2020+
(1)
See the Company’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2013 for additional information. (2)
Source: Wall Street research report dated 9/9/13.
|
 Investment Highlights
11
National portfolio with focus on growing and densely populated,
high barrier to entry markets
Stable cash flows supported by long-term, triple-net leases
Proven platform to pursue growth opportunities in sector with
large consolidation opportunity
At a positive inflection point in the Company’s evolution
Flexible balance sheet with low leverage
Upside opportunities created through rationalization of
transitional properties in existing portfolio
1
2
3
4
5
6 |
 APPENDIX |
 Senior Management
13
Name / Title
Years at Getty
Biography
David Driscoll
Chief Executive Officer,
President, Director
6
President and Chief Executive Officer since 2010
Director of Getty since May 2007 and Lead Independent Director from April 2008
until February 2010
Previously a Managing Director of Morgan Joseph & Co. Inc. and Co-head of
ING Barings Americas Equity Capital Markets and Global Head of Lodging and
Real Estate Kevin Shea
Executive
Vice President
29
Executive Vice President since May 2004 and, prior to that, Vice
President since 2001
Joined in 1984
Thomas Stirnweis
Vice President &
Chief Financial Officer
25
Vice President and Chief Financial Officer since 2003
Previously a Manager of Financial Reporting and Analysis at Getty Petroleum
Marketing, Inc. (“GPMI”)
Joshua Dicker
Senior Vice President,
General Counsel
& Secretary
5
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 Chris Constant
Vice President, Director of
Planning & Treasurer
3
Vice President since 2013 and Treasurer since 2011
Joined in 2010 as Director of Planning and Corporate Development
Previously Vice President of Morgan Joseph & Co. Inc.; Began career at ING
Barings |
 Board of Directors
14
Name / Title
Years at Getty
Biography
Leo Liebowitz
Chairman
58
Chairman of the Board since May 1971 and Chief Executive Officer
from 1985 -
2010
Served as President from May 1971 until May 2004
Co-founded the predecessor business in 1955
Milton Cooper
Executive Chairman,
Kimco Realty Corporation
42
Executive Chairman of Kimco Realty Corporation
Chairman and CEO of Kimco from its IPO in 1991 to 2009 and Director and President
of Kimco prior thereto
Phillip Coviello
Fmr. Partner,
Latham & Watkins, LLP
17
Director of Kimco since 2008
Previously a Partner in Latham & Watkins LLP for 18 years
David Driscoll
Chief Executive Officer,
President, Director
6
President and Chief Executive Officer since 2010
Director of Getty since May 2007 and Lead Independent Director from April 2008
until February 2010
Previously a Managing Director of Morgan Joseph & Co. Inc. and Co-head of
ING Barings Americas Equity Capital Markets and Global Head of Lodging and
Real Estate Richard Montag
Fmr. Director,
FNC Realty Corporation
GPMI
3
Elected to serve as a Director by the current Board (annual meeting on May 20,
2010) Previously Director of FNC Realty Corporation from 2004 until 2005 and
Getty Petroleum Marketing, Inc. from 1997 until 2000
Howard Safenowitz
President,
Safenowitz Family Corp.
15
Lead Independent Director since February 25, 2010
President of Safenowitz Family Corp., an investment firm, since June 1997
Previously a Director of Getty Petroleum Marketing, Inc. from December 1998 until
December 2000 |