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JERICHO, N.Y. -- Buoyed by the fourth-quarter acquisition of 36 Exxon-branded convenience and petroleum retail properties in Prince George's County, Md., Getty Realty Corp. reported preliminary increases of $2 million and $5.2 million in net earnings for the quarter and year ended Dec. 31, 2009.
Net earnings for the quarter increased to $11.3 million and net earnings for the year increased to $47.0 million for the Long Island-based real estate investment trust that specializes in ownership and leasing of convenience store/gas station properties and petroleum distribution terminals. Getty owns and leases approximately 1,075 properties nationwide.
According to the preliminary results, earnings from continuing operations increased $1.9 million to $10.7 million for the quarter, while earnings from continuing operations increased $2.6 million to $41.4 million for the year. Earnings from discontinued operations, primarily comprised of gains on dispositions of real estate, were $0.6 million and $5.6 million for the quarter and year ended December 31, 2009, respectively, as compared to $0.5 million and $3.0 million for the respective prior year periods.
The company said results for the fourth quarter were positively impacted by the Sept. 25, 2009 acquisition of 36 Exxon-branded gasoline station and convenience store properties located primarily in Prince George's County, Md. The results for the quarter include approximately $1.6 of rental revenue offset by approximately $0.3 million of interest expense incurred as a result of additional borrowings outstanding used to fund the acquisition.
The annual results include $1.1 million of impairment charges, which were principally recorded in the quarter ended June 30, 2009, attributable to general reductions in real estate valuations and, in certain cases, the removal or scheduled removal of underground storage tanks by Getty Petroleum Marketing Inc.
Getty Petroleum Marketing, the company's primary tenant, previously reported a significant loss for the year ended Dec. 31, 2008 -- continuing a trend of large losses in recent years. In the fourth quarter of 2009, the company announced a restructuring that included the sale to its affiliates, including Lukoil North America, of all assets unrelated to the properties it leases from Getty Realty.
According to its press release, Getty Petroleum Marketing has paid off substantially all of its debt guaranteed by Lukoil, its parent company. It also took steps to reduce operating costs, including closing two marketing regions and eliminating jobs.
Leo Liebowitz, chairman and CEO of Getty Realty, commented: "We believe that [Getty] Marketing is significantly reducing its business of directly supplying fuel to its subtenants in favor of entering into subleases with petroleum distributors who supply fuel to their own facilities as well as those operated by others.
Approximately 250 locations, comprising substantially all of the retail locations in New England that we lease to Marketing, are being subleased by Marketing to a single distributor, who is rebranding these stations to BP. We also believe that Marketing has entered into a sublease with a distributor in New Jersey for approximately 85 of the properties we lease to Marketing. We continue to monitor Marketing's business developments. In the meantime, Marketing has continued to pay its monthly rent on time."
Getty Realty Corp. is the largest publicly traded real estate investment trust in the United States. It owns and leases approximately 1,075 properties nationwide.
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