1 ========================================================= 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 JANUARY 31, 1999 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 of (I.R.S. employer incorporation or organization) identification no.) 125 Jericho Turnpike, Jericho, New York 11753 - - --------------------------------------- ----------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 516-338-2600 ------------ Securities registered pursuant to Section 12 (b) of the Act: Name of each exchange on Title of each class which registered - - ---------------------------- ------------------------ Common Stock, $.01 par value New York Stock Exchange Series A Participating Convertible Redeemable Preferred Stock, $.01 par value New York Stock Exchange 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] The aggregate market value of the voting stock held by nonaffiliates (7,783,187 shares of common stock and 1,743,150 shares of preferred stock) of the Company was $135,122,192 as of April 22, 1999. The registrant had outstanding 13,566,233 shares of common stock and 2,888,798 shares of preferred stock as of April 22, 1999. DOCUMENTS INCORPORATED BY REFERENCE Document Part of Form 10-K -------- ----------------- Annual Report to Stockholders for the fiscal year ended January 31, 1999 (the "Annual Report") (pages 6 through 24). II Definitive Proxy Statement for the 1999 Annual Meeting of Stockholders (the "Proxy Statement") which will be filed by the registrant on or prior to 120 days following the end of the registrant's fiscal year ended January 31, 1999 pursuant to Regulation 14A. III =========================================================
2 PART I Item 1. Business General Prior to the spin-off of its petroleum marketing business on March 21, 1997 (as described below), Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp. (hereinafter, together with its subsidiaries, called "Getty" or the "Company"), was one of the nation's largest independent marketers of petroleum products. Prior to the spin-off, the Company served retail and wholesale customers through a distribution and marketing network of Getty(R) and other branded retail outlets (also referred to as service stations) located in 12 Northeastern and Middle-Atlantic states. On March 21, 1997, the Company effected a spin-off of its petroleum marketing business to its stockholders (the "spin-off"), and stockholders of record on that date received a tax-free dividend of one share of common stock of Getty Petroleum Marketing Inc. ("Marketing") for each share of common stock of the Company. The Company transferred to Marketing the assets and liabilities of the petroleum marketing business and the New York Mid-Hudson Valley home heating oil business. In December 1998, the Company sold its heating oil business, Aero Oil Company. The Company retained its real estate assets and leased most of its properties on a long-term net basis to Marketing. The Company is now engaged in the ownership, leasing and management of real estate. For additional information regarding the spin-off and the sold heating oil business, see Notes 2 and 3 to the consolidated financial statements contained in the accompanying Annual Report. The Company and its predecessors had been in the petroleum marketing business for over 40 years. Mr. Leo Liebowitz, President and Chief Executive Officer and a director of the Company, and Mr. Milton Safenowitz, a former director and Executive Vice President of the Company, founded the business in 1955 with one service station and pursued a strategy of expanding the business principally through acquisitions. By 1985, the Company had expanded into five states under various brand names, principally Power Test(R). On February 1, 1985, the Company acquired the marketing and distribution assets of Getty Oil Company in the Northeastern and Middle-Atlantic states from a subsidiary of Texaco Inc. This acquisition added service stations, distribution terminals and a wholesale heating oil and middle distillate marketing network in six additional states. From 1985 until the time of the spin-off, the Company's operations expanded to a marketing region encompassing 12 Northeastern and Middle-Atlantic states through additional acquisitions of numerous small regional distributors, service stations and convenience food stores. Reorganization On January 30, 1998, the Company was reorganized as a Maryland corporation pursuant to an Agreement and Plan of Reorganization and Merger dated as of December 16, 1997. Also on January 30, 1998, Getty Realty Corp., a Delaware corporation, changed its name to Getty 2
3 Properties Corp. and became a wholly-owned subsidiary of the Company. When we refer to the Company, we mean Getty Realty Corp., a Maryland corporation, and for periods prior to January 30, 1998, we mean Getty Realty Corp., a Delaware corporation (also referred to as "Old Getty"). In connection with the transaction, stockholders of Old Getty received one share of common stock of the Company for each share of Old Getty's common stock tendered for exchange. The Company's common stock is listed on the New York Stock Exchange under the ticket symbol "GTY". Merger with Power Test Investors Limited Partnership and Issuance of Preferred Stock Also on January 30, 1998, the Company acquired Power Test Investors Limited Partnership (the "Partnership"), as a result of which the Company acquired fee title to 295 properties which Old Getty had previously leased from the Partnership. See "Item 2. Properties" below. In connection with the transaction, 2,888,798 shares of Series A Participating Convertible Redeemable Preferred Stock, $.01 par value, ("Preferred Stock") of the Company were issued to the former unitholders of the Partnership and to CLS General Partnership Corp., the Partnership's general partner. On February 11, 1998, the Preferred Stock commenced trading on the New York Stock Exchange under the ticker symbol "GTY PrA". Real Estate Business The Company specializes in the ownership of properties in the petroleum industry since it has substantial knowledge and expertise in this industry. The Company's acquisition program includes acquiring properties outright, acquiring properties and leasing them back to the existing operators, building to suit for qualified operators and providing financial resources to qualified operators for expansion. On February 1, 1997, the Company and Marketing entered into a Master Lease Agreement (the "Master Lease") under which, as of January 31, 1999, 1,013 service station and convenience store properties and 10 distribution terminals and bulk plants were leased or subleased by the Company as the lessor to Marketing as the lessee. The initial term of the Master Lease is 15 years, with four ten-year renewal options (or with respect to leased properties, such shorter period as the underlying lease may provide). The Master Lease is a "triple-net" lease, so Marketing is responsible for the cost of all taxes, maintenance, repairs, insurance and other operating expenses. Rent for each of the properties was set using the then fair market value of each property, assuming the properties were free of certain environmental conditions for which the Company is responsible. The Company received lease payments from Marketing aggregating approximately $56.4 million (of the $58.9 million total revenues from rental properties) for the fiscal year ended January 31, 1999, and is therefore 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 3
4 be volatile and highly competitive; however, the Company does not anticipate that Marketing will have difficulty making all required rental payments for the foreseeable future. As of January 31, 1999, the Company had additional properties not included under the Master Lease, most of which are leased for non-petroleum use, for which there are 69 tenants. The Company also had 29 properties being held for disposition. Regulation The Company is 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 the financial position of the Company, although such costs may have a significant impact on the Company's results of operations or liquidity for any single fiscal year or interim period. The operation of 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 which 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. Environmental expenses have been attributable to remediation, monitoring, soil disposal and governmental agency reporting (collectively, "Remediation Costs") incurred in connection with contaminated sites 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, the Company committed to a program to bring scheduled leased properties to regulatory closure and, thereafter, transfer all environmental risks from the Company to Marketing. In order to establish the Remediation Costs obligation and estimate the incremental cost of accelerated remediation, the Company commissioned a detailed property-by-property environmental study of all retail outlets in fiscal 1997, with the objective of achieving closure in approximately five years. As a result, the Company revised its estimate of future Remediation Costs in the fourth quarter of fiscal 1997 and recorded a pre-tax charge in that quarter for Remediation Costs of $21.2 million. The pre-tax charge resulted from the acceleration of remediation activities to be paid by the Company through more aggressive means of treating contaminated sites to bring them to closure in approximately five years, which resulted in significant incremental Remediation Costs, changes in estimated Remediation Costs at previously identified properties, including costs to be incurred in connection with UST upgrades, and additional charges to comply with AICPA Statement of Position 96-1, "Environmental Remediation Liabilities." 4
5 The Company believes that it is in substantial compliance with federal, state and local provisions enacted or adopted pertaining to environmental matters. Although the Company is 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 had no material adverse effect on its competitive position. See "Item 3. Legal Proceedings." Personnel As of January 31, 1999, the Company had 11 employees. Under a Services Agreement, Marketing provides certain administrative and technical services to the Company and the Company provides certain limited services to Marketing. The net fees paid by the Company to Marketing for services performed (after deducting the fees paid by Marketing to the Company for services provided by the Company) were $960,000 for each of the years ended January 31, 1999 and 1998 and are included in selling, general and administrative expenses in the consolidated statements of operations. 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", "estimates" and similar expressions, we intend to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance and achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: risks associated with owning and leasing real estate generally; dependence on Marketing as a lessee and on rentals from companies engaged in the petroleum marketing and convenience store businesses; competition for locations and tenants; risk of tenant non-renewal; the effects of regulation; the Company's expectations as to the cost of completing environmental remediation; the remediation and testing phases of the Year 2000 program as well as its Year 2000 contingency plan; and the Company's belief that the internal systems and equipment will be Year 2000 compliant in a timely manner. For a more detailed discussion of risk factors, see the information set forth under the caption "Risk Factors" in the Company's Proxy Statement/Prospectus dated January 13, 1998. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely effect its business, financial condition, operating results and stock price. An investment in the Company involves various risks, including those mentioned above and elsewhere in this report and those which are detailed from time to time in the Company's other filings with the Securities and Exchange Commission. Readers should not place undue reliance on forward-looking statements, which reflect the 5
6 Company's view only as of the date hereof. The Company undertakes no obligation to publicly release revisions to these forward-looking statements that reflect events or circumstances after the date hereof or reflect the occurrence of unanticipated events. Item 2. Properties The properties owned in fee or leased by the Company for each of the five fiscal years ended January 31, 1999 are as follows: January 31, ------------------------------------------------------ 1999 1998 1997 1996 1995 ---- ---- ----- ----- ----- Owned 740 736 441 439 444 Leased 379 404 732 734 752 ----- --- ----- ----- ----- Total 1,119 1,140 1,173 1,173 1,196 ===== ===== ===== ===== ===== The following table sets forth certain information regarding lease expirations for the properties: Fiscal Year Number of Leases Expiring (a) Percent of Total - - ----------- ----------------------------- ---------------- 2000 30 7.9% 2001 56 14.8 2002 60 15.8 2003 49 12.9 2004 45 11.9 Thereafter 139 36.7 --- ------ 379 100.0% === ====== (a) The lease expiration schedule does not include lease extension options. On January 30, 1998, the Company acquired the Partnership, a publicly traded real estate limited partnership, in a transaction accounted for as a purchase. As a result of the transaction, the Company acquired 295 fee properties, consisting of 290 service station and convenience store properties and five terminals, which were previously leased by the Company from the Partnership. As of January 31, 1999, the Company owned in fee 7 distribution terminals and leased 3 bulk plants (on a long-term net lease basis) located in New York, New Jersey, Rhode Island, Pennsylvania and Connecticut. The terminals and bulk plants owned or leased by the Company have an aggregate storage capacity of approximately 57 million gallons. The terminals located in 6
7 East Providence (Rhode Island) and Rensselaer (New York) are deep-water terminals, capable of handling large vessels. The ten distribution terminals and bulk plants are leased or sub-leased to Marketing. As of January 31, 1999, the Company leases approximately 32,000 square feet of office space at 125 Jericho Turnpike, Jericho, New York, where it currently maintains its corporate headquarters, most of which has been subleased to Marketing. The Company believes that substantially all of its owned and leased properties are in good condition. For a description of the Company's lease arrangements with Marketing after the spin-off, see discussion above under the caption "Real Estate Business." Item 3. Legal Proceedings (a) Information in response to this item is incorporated herein by reference from Notes 5 and 12 of the Notes to Consolidated Financial Statements set forth on pages 17 and 18, and page 23, respectively, of the Annual Report. In 1986, the State of New York brought an action against the Company which was filed in New York State Supreme Court in Albany County for an alleged underground discharge of petroleum products at a service station. The State is seeking reimbursement in the amount of $179,000 for cleanup costs, plus interest and a penalty of $10,000 for the alleged discharge. On March 23, 1998, the insurance carrier, who had been defending the Company under a reservation of rights, advised the Company that it will continue to defend the Company but will not indemnify it. The Company has asserted a claim against the carrier for its refusal to indemnify the Company. In 1986, the State of New York brought an action against the Company which was filed in New York State Supreme Court in Albany County for an alleged underground discharge of petroleum products at a service station. The State is seeking reimbursement in the amount of $57,000 for cleanup costs, plus interest and a penalty of $500,000 for the alleged discharge. On March 23, 1998, the insurance carrier, who had been defending the Company under a reservation of rights, advised the Company that it will continue to defend the Company but will not indemnify it. The Company has asserted a claim against the carrier for its refusal to indemnify the Company. In 1991, the State of New York brought an action in the New York State Supreme Court in Albany County against one of the Company's 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. There has been no activity in this proceeding in the past several years. In 1992, the State of New York asserted a claim for reimbursement of cleanup costs against the Company and another petroleum company, in the amount of $121,000, together with statutory 7
8 penalties of $100,000, pertaining to an alleged spill at a service station in 1984. In 1996, the State of New York brought an action in the New York State Supreme Court in Albany County against the Company and the other petroleum company seeking cleanup costs of $209,000, together with interest and penalties of $200,000. This lawsuit was settled in April 1999 by the payment by the Company of $292,500. In 1993, the State of New York asserted a claim against the Company for cleanup costs incurred at a service station and for statutory penalties. In 1994, an action was filed in New York State Supreme Court in Albany County to recover $522,000 for cleanup costs and unspecified penalties and interest. In 1994, a subsidiary of the Company was served with an Amended Complaint naming the Company's subsidiary as one of many defendants in the Keystone Superfund case pending in the U.S. District Court for the Middle District of Pennsylvania, pertaining 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 of the Company was brought into the same action pertaining to convenience store refuse. In August 1997, the Company and its subsidiaries paid into escrow $40,000 in full settlement. The settlement, which has been approved by the U.S. EPA, has not yet been approved by the Court. 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 a former construction company subsidiary of the Company, 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. The Company believes that the exposure is not material because the quantities of construction fill deposited at the waste site were small. In 1996, the State of New York asserted three separate claims against the Company for reimbursement of cleanup costs incurred at service stations in the amount of (i) $291,000, plus statutory penalties of $150,000, (ii) $112,000, plus interest and (iii) $463,000, plus interest. In April 1998, the State of New York asserted a claim against a former subsidiary of the Company for reimbursement in the amount of $185,000 for cleanup costs that were incurred at a heating oil customer's home in 1991. On August 12, 1998, an action was filed in the New York Supreme Court to recover $185,000 for cleanup costs plus interest and penalties. In June 1998, the Company was 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. The Company's defense is being conducted by Texaco Inc., which has agreed to fully indemnify 8
9 the Company. In August 1998, the Company was 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. The Company's defense is being conducted by Texaco Inc., which has agreed to fully indemnify the Company. These two matters involve a period of time prior to 1985 when the properties were purchased from Texaco Inc. pursuant to an agreement which provides that Texaco will indemnify the Company for environmental matters of this kind. In December 1998, the New York State Department of Environmental Conservation filed an administrative complaint against the Company 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 the Company in the U.S. District Court for the Southern District of New York. In March 1999, the State of New York filed two lawsuits against the Company in the amounts of $114,000 and $497,000, respectively, in the New York Supreme Court , Albany County, seeking reimbursement for cleanup costs incurred at two service stations, plus interest and penalties. Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted to a vote of security holders during the fourth quarter of the Company's fiscal year ended January 31, 1999. Executive Officers of Registrant The following table lists the executive officers of the Company as of January 31, 1999, their respective ages, the offices and positions held with the Company and the year in which each was elected an officer of the Company or its predecessor. Name Age Position Officer Since Leo Liebowitz 71 President and Chief Executive Officer 1971 John J. Fitteron 57 Senior Vice President, Treasurer and Chief Financial Officer 1986 Mr. Liebowitz has been President and Chief Executive Officer and a director of the Company or its predecessor since 1971. He is also the Chairman, Chief Executive Officer and a director of Marketing. He is also a director of the Regional Banking Advisory Board of Chase Banking Corp. Mr. Fitteron joined the Company's predecessor in 1986 as Senior Vice President and Chief Financial Officer and assumed the additional position of Treasurer in 1994. Prior to joining Getty, he was a Senior Vice President at Beker Industries Corp., a chemical and natural resource company. 9
10 Management is not aware of any family relationships between the foregoing executive officers. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Information in response to this item is incorporated herein by reference from material under the heading "Capital Stock" on page 24 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 10 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 17 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 11 through 24 of the Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 10
11 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 5, and page 14, respectively, of the Proxy Statement. Information regarding executive officers is included in Part I hereof. 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" and "Compensation" through, and including the material under the heading, "Compensation Committee Interlocks and Insider Participation" on pages 5 through 9 of the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management Information in response to this item is incorporated herein by reference from material under the heading "Beneficial Ownership of Capital Stock" on pages 3 and 4 of the Proxy Statement. Item 13. Certain Relationships and Related Transactions Information in response to this item is incorporated herein by reference from material under the heading "Certain Transactions" on pages 11 and 12 of the Proxy Statement. 11
12 PART IV Item 14. 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 13 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 Schedules on page 13 is filed as part of this annual report. 3. Exhibits The exhibits listed in the Exhibit Index on pages 16 through 23 are filed as part of this annual report. 4. Reports on Form 8-K None. 12
13 GETTY REALTY CORP. INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS Items 14(a) 1 & 2 Reference ------------------------- Form 10-K 1999 Annual (pages) Report (pages) ------------------------- Data incorporated by reference from attached 1999 Annual Report to Stockholders of Getty Realty Corp.: Report of Independent Accountants 24 Consolidated Statements of Operations for the years ended January 31, 1999, 1998 and 1997 11 Consolidated Balance Sheets as of January 31, 1999 and 1998 12 Consolidated Statements of Cash Flows for the years ended January 31, 1999, 1998 and 1997 13 Notes to Consolidated Financial Statements 14 - 23 Report of Independent Accountants - Supplemental Schedule 14 Schedule II - Valuation and Qualifying Accounts and Reserves for the years ended January 31, 1999, 1998 and 1997 15 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 1999 Annual Report to Stockholders 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 and 8, the 1999 Annual Report to Stockholders is not deemed filed as part of this report. 13
14 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Getty Realty Corp.: Our report on our audits of the consolidated financial statements of Getty Realty Corp. and Subsidiaries has been incorporated by reference in this Form 10-K from page 24 of the 1999 Annual report to Stockholders of Getty Realty Corp. and Subsidiaries. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in the index in Item 14(a) on page 13 of this Form 10-K. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as whole, presents fairly, in all material respects, the information required to be included therein. PricewaterhouseCoopers LLP New York, New York March 11, 1999 14
15 GETTY REALTY CORP. and SUBSIDIARIES SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS and RESERVES for the years ended January 31, 1999, 1998 and 1997 (in thousands) Balance at Balance at beginning end of of period Additions Deductions period --------- --------- ---------- ------ 1999: Allowance for doubtful accounts* $ 171 $113 $ 172 $ 112 ====== ==== ====== ====== 1998: Allowance for doubtful accounts* $1,369 $ 68 $1,266(a) $ 171 ====== ==== ====== ====== 1997: Allowance for doubtful accounts* $1,409 $485 $ 525 $1,369 ====== ==== ====== ====== *Relates to accounts receivable. (a) Includes $1,185 transferred to Marketing in connection with the spin-off. 15
16 EXHIBIT INDEX GETTY REALTY CORP. Annual Report on Form 10-K for the fiscal year ended January 31, 1999 Exhibit No. Description --- ----------- 1.1 Agreement and Plan of Filed as Exhibit 2.1 to Company's Reorganization and Merger, Registration Statement on Form S-4, dated as of December 16, filed on January 12, 1998 (File No. 1997 (the "Merger 333-44065), included as Appendix A to Agreement") by and among the Joint Proxy Statement/Prospectus Getty Realty Corp., Power that is a part thereof, and Test Investors Limited incorporated herein by reference. Partnership and CLS General Partnership Corp. 3.1 Articles of Incorporation of Filed as Exhibit 3.1 to Company's Getty Realty Holding Corp. Registration Statement on Form S-4, ("Holdings"), now known as filed on January 12, 1998 (File No. Getty Realty Corp., filed 333-44065), included as Appendix D to December 23, 1997. 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 Company's Articles of Incorporation of Annual Report on Form 10-K for the Holdings, filed January fiscal year ended January 31, 1998 21, 1998. (File No. 001-13777) and incorporated herein by reference. 3.3 By-Laws of Holdings. Filed as Exhibit 3.2 to Company's Registration Statement on Form S-4, filed on January 12, 1998 (File No. 333-44065), included as Appendix F to the Joint Proxy Statement/Prospectus that is a part thereof, and incorporated herein by reference. 16
17 3.4 Articles of Amendment of Filed as Exhibit 3.4 to Company's Holdings, changing its name Annual Report on Form 10-K for the to Getty Realty Corp., fiscal year ended January 31, 1998 filed January 30, 1998. (File No. 001-13777) and incorporated herein by reference. 4.1 $35,000,000 reducing Filed as Exhibit 4.7 to the Quarterly revolving Loan Agreement Report on Form 10-Q for the quarter between Leemilt's Petroleum, ended October 31, 1987 (File No. 1-8059) Inc. and Bank of New of Getty Petroleum Corp., and England, N.A. dated as of incorporated herein by reference. December 7, 1987, and related Guaranty Agreement, dated as of December 7, 1987, by and between Getty Petroleum Corp. (now known as Getty Properties Corp.) and Bank of New England, N.A. 4.2 Amended and Restated Loan Filed as Exhibit 4.8 to the Annual Agreement between Leemilt's Report on Form 10-K for the fiscal Petroleum, Inc. and Fleet year ended January 31, 1996 (File No. Bank of Massachusetts, N.A., 1-8059) of Getty Petroleum Corp. and as successor to Bank of New incorporated herein by reference. England, N.A., dated as of October 31, 1995 (the "Leemilt's Loan"). 4.3 First Amendment to Amended Filed as Exhibit 4.3 to Company's Annual and Restated Loan Agreement Report on Form 10-K for the fiscal year between Leemilt's Petroleum, ended January 31, 1998 (File No. Inc. and Fleet National Bank 001-13777) and incorporated herein by (formerly known as Fleet reference. Bank of Massachusetts, N.A.) dated as of April 18, 1997. 4.4 Second Amendment to Amended Filed as Exhibit 4.4 to Company's Annual and Restated Loan Agreement Report on Form 10-K for the fiscal year between Leemilt's Petroleum, ended January 31, 1998 (File No. Inc. and Fleet National Bank 001-13777) and incorporated herein by dated as of January 30, reference. 1998. 4.5 Amended and Restated Loan Filed as Exhibit 10.27 to Power Test Agreement between Power Test Investors Limited Partnership's ("PT Realty Company Limited Investors") Annual Report on Form 10-K Partnership ("PT Realty") for the fiscal year ended December 31, and 17
18 Fleet Bank of Massachusetts, 1995 (File No. 0-14557) and incorporated N.A. dated as of October 31, herein by reference. 1995 (the "PT Realty Loan"). 4.6 First Amendment to Amended Filed as Exhibit 4.6 to Company's Annual and Restated Loan Agreement Report on Form 10-K for the fiscal year between PT Realty and Fleet ended January 31, 1998 (File No. National Bank dated as of 001-13777) and incorporated herein by April 18, 1997. reference. 4.7 Second Amendment to Amended Filed as Exhibit 4.7 to Company's Annual and Restated Loan Agreement Report on Form 10-K for the fiscal year between PT Realty and Fleet ended January 31, 1998 (File No. National Bank dated as of 001-13777) and incorporated herein by January 30, 1998. reference. 10.1 Retirement and Profit Filed as Exhibit 10.2(b) to Company's Sharing Plan (amended and Annual Report on Form 10-K for the restated as of September 19, fiscal year ended January 31, 1997 (File 1996), adopted by the No. 1-8059) and incorporated herein by Company on December 16, reference. 1997. 10.2 1998 Stock Option Plan, Filed as Exhibit 10.1 to Company's effective as of January 30, Registration Statement on Form S-4, 1998. 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 Filed as Exhibit 2(a) to the Current among Power Test Corp. (now Report on Form 8-K of Power Test Corp., known as Getty Properties filed February 19, 1985 (File No. Corp.), Texaco Inc., Getty 1-8059) and incorporated herein by Oil Company and Getty reference. Refining and Marketing Company, dated as of December 21, 1984. 18
19 <TABLE> <S> <C> <C> 10.4 Trademark License Agreement among Power Filed as Exhibit 2(b) to the Current Report on Test Corp., Texaco Inc., Getty Oil Form 8-K of Power Test Corp., filed February 19, Company and Getty Refining and 1985 (File No. 1-8059) and incorporated herein Marketing Company, dated as of February by reference. 1, 1985. 10.5 Three Party Lease Agreement among Getty Filed as Exhibit 10.5 to Company's Annual Report Realty Corp. (now known as Getty on Form 10-K for the fiscal year ended January Properties Corp.), Leemilt's Petroleum, 31, 1998 (File No. 001-13777) and incorporated Inc. and Fleet National Bank dated as herein by reference. of April 18, 1997, amending and restating the Lease dated February 1, 1985 between Leemilt's Petroleum, Inc., as lessor, and Getty Petroleum Corp. (now known as Getty Properties Corp.), as lessee. 10.6 Amendment to Three Party Lease Agreement Filed as Exhibit 10.6 to Company's Annual Report among Getty Properties Corp., Leemilt's on Form 10-K for the fiscal year ended January Petroleum, Inc. and Fleet National Bank 31, 1998 (File No. 001-13777) and incorporated dated as of January 30, 1998. herein by reference. 1998. 10.7 Amended and Restated Hazardous Waste Filed as Exhibit 10.17 to the Annual Report on and PMPA Indemnification Agreement, Form 10-K for the fiscal year ended January 31, dated as of October 31, 1995, among 1996 (File No. 1-8059) of Getty Petroleum Corp. Getty Petroleum Corp. (now known as and incorporated herein by reference. Getty Properties Corp.), Power Test Realty Company Limited Partnership and Fleet Bank of Massachusetts, N.A. 10.8 Affirmation and Acknowledgement of Filed as Exhibit 10.8 to Company's Annual Report Amended and Restated Hazardous Waste and on Form 10-K for the fiscal year ended January PMPA Indemnification Agreement, between 31, 1998 (File No. 001-13777) and incorporated Getty Realty Corp. and Fleet National herein by reference. Bank dated as of April 18, 1997. </TABLE> 19
20 <TABLE> <S> <C> <C> 10.9 Second Affirmation and Acknowledgement Filed as Exhibit 10.9 to Company's Annual Report of Amended and Restated Hazardous Waste on Form 10-K for the fiscal year ended January and PMPA Indemnification Agreement 31, 1998 (File No. 001-13777) and incorporated between the Company and Fleet National herein by reference. Bank, dated as of January 30, 1998. 10.10 Amended and Restated Guaranty Agreement, Filed as Exhibit 10.10 to Company's Annual dated as of October 31, 1995 between Report on Form 10-K for the fiscal year ended Getty Petroleum Corp. and Fleet Bank of January 31, 1998 (File No. 001-13777) and Fleet Bank of Massachusetts, N.A. incorporated herein by reference. pertaining to the Leemilt's Loan. 10.11 Affirmation and Acknowledgment of Amended Filed as Exhibit 10.11 to Company's Annual and Restated Guaranty Agreement between Report on Form 10-K for the fiscal year ended Getty Realty Corp. and Fleet National Bank, January 31, 1998 (File No. 001-13777) and dated as of April 18, 1997, pertaining incorporated herein by reference. to the Leemilt's Loan. 10.12 Guaranty Agreement between the Company Filed as Exhibit 10.12 to Company's Annual and Fleet National Bank, dated as of Report on Form 10-K for the fiscal year ended January 30, 1998, pertaining to the January 31, 1998 (File No. 001-13777) and Leemilt's Loan. incorporated herein by reference. 10.13 Guaranty Agreement between the Company Filed as Exhibit 10.13 to Company's Annual and Fleet National Bank, dated as of Report on Form 10-K for the fiscal year ended January 30, 1998, pertaining to the PT January 31, 1998 (File No. 001-13777) and Realty Loan. incorporated herein by reference. 10.14 Guaranty Agreement between Getty Filed as Exhibit 10.14 to Company's Annual Properties Corp. and Fleet National Report on Form 10-K for the fiscal year ended Bank dated as of January 30, 1998, January 31, 1998 (File No. 001-13777) and pertaining to the PT Realty Loan. incorporated herein by reference. 10.15 Form of Indemnification Agreement Filed as Exhibit 10.15 to Company's Annual between the Company and its directors. Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated herein by reference. </TABLE> 20
21 <TABLE> <S> <C> <C> 10.16 Supplemental Retirement Plan for Filed as Exhibit 10.22 to the Annual Executives of the Company (then known as Report on Form 10-K for the fiscal year Getty Petroleum Corp.) and Participating ended January 31, 1990 (File No. 1-8059) Subsidiaries (adopted by the Company on of Getty Petroleum Corp. and December 16, 1997). incorporated herein by reference. 10.17 Form of Agreement dated December 9, 1994 Filed as Exhibit 10.23 to the Annual between Getty Petroleum Corp. and its Report on Form 10-K for the fiscal year non-director officers and certain key ended January 31, 1995 (File No. 1-8059) employees regarding compensation upon of Getty Petroleum Corp. and change in control. incorporated herein by reference. 10.18 Form of Agreement dated as of March 7, Filed as Exhibit 10.27 to the Annual 1996 amending Agreement dated as of Report on Form 10-K for the fiscal year December 9, 1994 between Getty Petroleum ended January 31, 1996 (File No. 1-8059) Corp. (now known as Getty Properties of Getty Petroleum Corp. and Corp.) and its non-director officers and incorporated herein by reference. certain key employees regarding compensation upon change in control (See Exhibit 10.17). 10.19 Form of letter from Getty Petroleum Filed as Exhibit 10.19 to Company's Corp. dated April 8, 1997, confirming Annual Report on Form 10-K for the that a change of control event had fiscal year ended January 31, 1998 (File occurred pursuant to the change of No. 001-13777) and incorporated herein control agreements. (See Exhibits 10.17 by reference. and 10.18). 10.20 Form of Agreement dated March 9, 1998, Filed as Exhibit 10.20 to Company's from the Company to certain officers and Annual Report on Form 10-K for the key employees, adopting the prior change fiscal year ended January 31, 1998 (File of control agreements, as amended, and No. 001-13777) and incorporated herein further amending those agreements. (See by reference. Exhibits 10.17, 10.18 and 10.19). </TABLE> 21
22 <TABLE> <S> <C> <C> 10.21 Form of Master Lease Agreement dated February 1, Filed as Exhibit 10.28 to the Annual Report on 1997 between Getty Petroleum Corp. (now known as Form 10-K for the fiscal year ended January 31, Getty Properties Corp.) and Getty Petroleum 1997 (File No. 1-8059) of Getty Petroleum Corp. Marketing Inc. and incorporated herein by reference. 10.22 Form of Reorganization and Distribution Agreement Filed as Exhibit 10.29 to the Annual Report on between Getty Petroleum Corp. (now known as Getty Form 10-K for the fiscal year ended January 31, Properties Corp.) and Getty Petroleum Marketing 1997 (File No. 1-8059) of Getty Petroleum Corp. Inc. dated as of February 1, 1997. and incorporated herein by reference. 10.23 Form of Trademark License Agreement between Getty Filed as Exhibit 10.30 to the Annual Report on Petroleum Corp. (now known as Getty Properties Form 10-K for the fiscal year ended January 31, Corp.) and Getty Petroleum Marketing Inc. 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference. 10.24 Form of Services Agreement dated as of February Filed as Exhibit 10.31 to the Annual Report on 1, 1997 between Getty Petroleum Corp. (now known Form 10-K for the fiscal year ended January 31, as Getty Properties Corp.) and Getty Petroleum 1997 (File No. 1-8059) of Getty Petroleum Corp. Marketing Inc. and incorporated herein by reference. 10.24A Form of Services Agreement dated as of February * 1, 1999 between Getty Realty Corp. and Getty Petroleum Marketing Inc. 10.25 Form of Tax Sharing Agreement between Getty Filed as Exhibit 10.32 to the Annual Report on Petroleum Corp. (now known as Getty Properties Form 10-K for the fiscal year ended January 31, Corp.) and Getty Petroleum Marketing Inc. 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference. 10.26 Form of Stock Option Reformation Agreement made Filed as Exhibit 10.33 to the Annual Report on and entered into as of March 21, 1997 by and Form 10-K for the fiscal year ended January 31, between Getty Petroleum Corp. (now known as Getty 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference. </TABLE> 22
23 Properties Corp.) and Getty Petroleum Marketing Inc. 13 Annual Report to Stockholders for the * fiscal year ended January 31, 1999. 22 Subsidiaries of the Company. * 24 Consent of Independent * Accountants. 27 Financial Data Schedule. * - - ----------------------- *Filed herewith 23
24 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/ John J. Fitteron -------------------------------- John J. Fitteron, Senior Vice President, Treasurer and Chief Financial Officer April 30, 1999 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/ John J. Fitteron ------------------------- -------------------------------- Leo Liebowitz, President, John J. Fitteron, Chief Executive Officer Senior Vice President, and Director Treasurer and Chief Financial April 30, 1999 Officer (Principal Financial and and Accounting Officer) April 30, 1999 By /s/ Milton Cooper By /s/ Philip E. Coviello ------------------------- -------------------------------- Milton Cooper, Philip E. Coviello, Director Director April 30, 1999 April 30, 1999 By /s/ Howard Safenowitz By /s/ Warren G. Wintrub ------------------------- -------------------------------- Howard Safenowitz, Warren G. Wintrub, Director Director April 30, 1999 April 30, 1999 24