Supplemental Condensed Combining Financial Information

6 Months Ended

Jun. 30, 2012

Supplemental Condensed Combining Financial Information [Abstract]

SUPPLEMENTAL CONDENSED COMBINING FINANCIAL INFORMATION

9. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL INFORMATION

Condensed combining financial information as of December 31, 2011 and for the quarter and six months ended June 30, 2011 has been derived from our books and records and is provided below to illustrate, for informational purposes only, the net contribution to our financial results that were realized from the Master Lease with Marketing (which represented approximately 69% of our properties as of December 31, 2011) and from properties leased to other tenants. As a result of the rejection of the Master Lease on April 30, 2012, our financial results are no longer materially dependent on the performance of Marketing to meet its obligations to us under the Master Lease.

The condensed combining financial information set forth below presents the results of operations, net assets and cash flows related to Marketing and the Master Lease, our other tenants and our corporate functions necessary to arrive at the information for us on a combined basis. The assets, liabilities, lease agreements and other leasing operations attributable to the Master Lease and other tenant leases are not segregated in legal entities. However, we generally maintain our books and records in site specific detail and have classified the operating results which are clearly applicable to each owned or leased property as attributable to Marketing or our other tenants or to non-operating corporate functions. The condensed combining financial information has been prepared by us using certain assumptions, judgments and allocations. In our prior filings, each of our properties were classified as attributable to Marketing, other tenants or corporate for all periods presented based on the property’s use as of the latest balance sheet date included in such filing or the property’s use immediately prior to its disposition or third-party lease expiration.

As a result of the rejection of the Master Lease on April 30, 2012, we have omitted the condensed combining financial information as of June 30, 2012 and for the quarter and six months ended June 30, 2012 since our financial results are no longer materially dependent on the performance of Marketing to meet its obligations to us under the Master Lease. For the historical condensed combining financial information set forth below, each of the properties were classified based on the property’s use as of December 31, 2011. (See note 12 in “Item 8. Financial Statements & Supplementary Data — Notes to Consolidated Financial Statements.”, which appears in our Annual Report on Form 10-K for the year ended December 31, 2011 for the condensed combining financial information as of December 31, 2011 and 2010 and for the three year period ended December 31, 2011.)

Environmental remediation expenses have been attributed to Marketing or other tenants on a site specific basis and environmental related litigation expenses and professional fees have been attributed to Marketing or other tenants based on the pro rata share of specifically identifiable environmental expenses for the period from January 1, 2009 through December 31, 2011.

The heading “Corporate” in the statements below includes assets, liabilities, income and expenses attributed to general and administrative functions, financing activities and parent or subsidiary level income taxes, capital taxes or franchise taxes which were not incurred on behalf of our leasing operations and are not reasonably allocable to Marketing or other tenants. With respect to general and administrative expenses, we have attributed those expenses clearly applicable to Marketing and other tenants. We considered various methods of allocating to Marketing and other tenants amounts included under the heading “Corporate” and determined that none of the methods resulted in a reasonable allocation of such amounts or an allocation of such amounts that more clearly summarizes the net contribution to our financial results realized from the leasing operations of properties previously leased to Marketing and of properties leased to other tenants. Moreover, we determined that each of the allocation methods we considered resulted in a presentation of these amounts that would make it more difficult to understand the clearly identifiable results from our leasing operations attributable to Marketing and other tenants. We believe that the segregated presentation of assets, liabilities, income and expenses attributed to general and administrative functions, financing activities and parent or subsidiary level income taxes, capital taxes or franchise taxes provides the most meaningful presentation of these amounts since changes in these amounts are not fully correlated to changes in our leasing activities.

While we believe these assumptions, judgments and allocations are reasonable, the condensed combining financial information is not intended to reflect what the net results would have been had assets, liabilities, lease agreements and other operations attributable to Marketing or our other tenants been conducted through stand-alone entities during any of the periods presented.

The condensed combining balance sheet of Getty Realty Corp. as of December 31, 2011 is as follows (in thousands):

	Getty Petroleum Marketing			Other Tenants			Corporate			Consolidated
ASSETS:
Real Estate:
Land	$	131,077		$	214,396		$	—		$	345,473
Buildings and improvements		170,553			99,479			349			270,381
		301,630			313,875			349			615,854
Less — accumulated depreciation and amortization		(107,478	)		(29,448	)		(191	)		(137,117	)
Real estate, net		194,152			284,427			158			478,737
Net investment in direct financing leases		—			92,632			—			92,632
Deferred rent receivable, net		—			8,080			—			8,080
Cash and cash equivalents		—			—			7,698			7,698
Notes, mortgages and accounts receivable, net		5,743			28,262			2,078			36,083
Other assets		—			7,611			4,248			11,859
Total assets		199,895			421,012			14,182			635,089
LIABILITIES:
Borrowings under credit line		—			—			147,700			147,700
Term loan		—			—			22,810			22,810
Environmental remediation costs		57,416			284			—			57,700
Accounts payable and accrued liabilities		4,002			19,564			11,144			34,710
Total liabilities		61,418			19,848			181,654			262,920
Net assets (liabilities)	$	138,477		$	401,164		$	(167,472	)	$	372,169

The condensed combining statement of operations of Getty Realty Corp. for the three months ended June 30, 2011 is as follows (in thousands):

	Getty Petroleum Marketing		Other Tenants			Corporate			Consolidated
Revenues from rental properties	$	13,990	$	12,903		$	—		$	26,893
Interest on notes and mortgages receivable		—		710			31			741
Total revenues		13,990		13,613			31			27,634
Operating expenses:
Rental property expenses		1,275		2,294			152			3,721
Impairment charges		—		1,263			—			1,263
Environmental expenses, net		1,294		31			—			1,325
General and administrative expenses		31		1,679			1,026			2,736
Depreciation and amortization expense		905		1,242			11			2,158
Total operating expenses		3,505		6,509			1,189			11,203
Operating income (loss)		10,485		7,104			(1,158	)		16,431
Other income (expense), net		20		—			(69	)		(49	)
Interest expense		—		—			(1,346	)		(1,346	)
Earnings (loss) from continuing operations		10,505		7,104			(2,573	)		15,036
Discontinued operations:
Income (loss) from operating activities		164		(229	)		—			(65	)
Gains on dispositions of real estate		231		—			—			231
Earnings (loss) from discontinued operations		395		(229	)		—			166
Net earnings (loss)	$	10,900	$	6,875		$	(2,573	)	$	15,202

The condensed combining statement of operations of Getty Realty Corp. for the six months ended June 30, 2011 is as follows (in thousands):

	Getty Petroleum Marketing		Other Tenants			Corporate			Consolidated
Revenues:
Revenues from rental properties	$	28,619	$	23,066		$	—		$	51,685
Interest on notes and mortgages receivable		—		1,083			63			1,146
Total revenues		28,619		24,149			63			52,831
Operating expenses:
Rental property expenses		2,697		4,221			291			7,209
Impairment charges		994		1,263			—			2,257
Environmental expenses, net		2,396		56			—			2,452
General and administrative expenses		75		1,764			5,782			7,621
Depreciation and amortization expense		1,940		2,515			21			4,476
Total operating expenses		8,102		9,819			6,094			24,015
Operating income (loss)		20,517		14,330			(6,031	)		28,816
Other income (expense), net		20		—			(63	)		(43	)
Interest expense		—		—			(2,665	)		(2,665	)
Earnings (loss) from continuing operations		20,537		14,330			(8,759	)		26,108
Discontinued operations:
Earnings (loss) from operating activities		365		(184	)		—			181
Gains on dispositions of real estate		299		—			—			299
Earnings (loss) from discontinued operations		664		(184	)		—			480
Net earnings (loss)	$	21,201	$	14,146		$	(8,759	)	$	26,588

The condensed combining statement of cash flows of Getty Realty Corp. for the six months ended June 30, 2011 is as follows (in thousands):

	Getty Petroleum Marketing			Other Tenants			Corporate			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)	$	21,201		$	14,146		$	(8,759	)	$	26,588
Adjustments to reconcile net earnings (loss) to net cash flow provided by (used in) operating activities:
Depreciation and amortization expense		1,963			2,546			21			4,530
Impairment charges		994			1,513			—			2,507
Gain from dispositions of real estate		(319	)		—			—			(319	)
Deferred rental revenue		812			(996	)		—			(184	)
Allowance for deferred rent and accounts receivable		—			215			—			215
Amortization of above-market and below-market leases		—			(262	)		—			(262	)
Accretion expense		290			6			—			296
Stock-based employee compensation expense		—			—			311			311
Changes in assets and liabilities:
Net investment in direct financing leases		—			211			—			211
Accounts receivable, net		(236	)		86			—			(150	)
Other assets		—			(100	)		175			75
Environmental remediation costs		(108	)		(2	)		—			(110	)
Accounts payable and accrued liabilities		92			2,168			(644	)		1,616
Net cash flow provided by (used in) operating activities		24,689			19,531			(8,896	)		35,324
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisitions and capital expenditures		—			(166,594	)		—			(166,594	)
Proceeds from dispositions of real estate		784			—			—			784
Decrease in cash held for property acquisitions		—			—			60			60
Collection of notes and mortgages receivable		—			187			120			307
Issuance of notes and mortgages receivable		—			(30,400	)		(240	)		(30,640	)
Net cash flow provided by (used in) investing activities		784			(196,807	)		(60	)		(196,083	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit agreement		—			—			231,253			231,253
Repayments under credit agreement		—			—			(122,553	)		(122,553	)
Repayments under term loan agreement		—			—			(390	)		(390	)
Cash dividends paid		—			—			(30,543	)		(30,543	)
Credit agreement origination costs		—			—			(175	)		(175	)
Net proceeds from issuance of common stock		—			—			91,986			91,986
Cash consolidation – Corporate		(25,473	)		177,276			(151,803	)		—
Net cash flow (used in) provided by financing activities		(25,473	)		177,276			17,775			169,578
Net increase in cash and cash equivalents		—			—			8,819			8,819
Cash and cash equivalents at beginning of period		—			—			6,122			6,122
Cash and cash equivalents at end of year	$	—		$	—		$	14,941		$	14,941