SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the plan year ended December 31, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission file number 001-13777
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
GETTY REALTY CORP.
125 Jericho Turnpike, Suite 103
Jericho, New York 11753
REQUIRED INFORMATION
Financial Statements, Supplemental Schedules and Exhibits as follows:
1. Financial Statements:
Consolidated Statements of Net Assets Available for Plan
Benefits as of December 31, 2003 and 2002
Consolidated Statement of Changes in Net Assets
Available for Plan Benefits for the year ended
December 31, 2003
Notes to Financial Statements
2. Exhibits: None
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrator of the Plan has duly caused this annual report to be signed on
its behalf by the undersigned, hereunto duly authorized.
GETTY REALTY CORP.
RETIREMENT AND
PROFIT SHARING PLAN
Dated: June 25, 2004 by: /s/ Thomas J. Stirnweis
----------------------------
Thomas J. Stirnweis
Getty Realty Corp.
Retirement Plan Committee
and Plan Administrator
3
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Financial Statements
as of December 31, 2003 and 2002
and for the year ended December 31, 2003
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Financial Statements:
Consolidated Statements of Net Assets Available for Plan Benefits
as of December 31, 2003 and 2002 2
Consolidated Statement of Changes in Net Assets Available for Plan
Benefits for the year ended December 31, 2003 3
Notes to Financial Statements 4 - 9
1
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Consolidated Statements of Net Assets Available for Plan Benefits
as of December 31, 2003 and 2002
(in thousands)
2003 2002
------------- -------------
Assets:
Investments, at fair value (Note 6) $5,786 $4,735
Employee loans 12 12
Contributions receivable:
Employer 16 18
Cash 12 14
------------- -------------
Net assets available for plan benefits $5,826 $4,779
============= =============
The accompanying notes are an integral part of these financial statements.
2
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Consolidated Statement of Changes in Net Assets Available for Plan Benefits
for the Year ended December 31, 2003
(in thousands)
Contributions:
Employer $44
Employee 126
---------
170
---------
Investment income:
Interest and dividend income 295
Net investment gain from pooled separate accounts 211
Net appreciation of investments 561
---------
1,067
---------
Withdrawals (190)
---------
Net additions 1,047
Net assets available for plan benefits as of January 1, 2003 4,779
---------
Net assets available for plan benefits as of December 31, 2003 $5,826
=========
The accompanying notes are an integral part of these financial statements.
3
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements
1. Description of Plan
The following brief description of the Getty Realty Corp. Retirement
and Profit Sharing Plan (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan Agreement for more complete
information.
The Plan is a defined contribution plan covering all employees age
twenty-one and older of Getty Realty Corp. and its wholly-owned subsidiaries
(the "Company"), except those covered by a collective bargaining agreement or
other retirement plan sponsored by the Company. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and
provides for the benefits available under Section 401(k) of the Internal Revenue
Code.
Employees may make contributions to the Plan and the Company matches
an amount equal to the lower of 50% of such employee contributions or 3% of
compensation limited to $200,000. In 2003, employee contributions were limited
to a maximum contribution of $12,000 for employees who were under the age of 50
and $14,000 for those employees who were 50 or more years old. The Company may
also make a profit sharing contribution to the Plan at the discretion of the
Company's Board of Directors. Employees must complete one year of service to be
eligible to participate in profit sharing contributions.
The Plan provides for a participant directed investment program.
Contributions to the Plan, including the employer match, may be invested in
twelve available investment funds allocated in multiples of 5% at the election
of the employee as follows:
The Guaranteed Interest Fund consists primarily of high-quality,
fixed-income investments including public bonds, private placements, commercial
mortgage loans and short-term investments. The Guaranteed Interest Fund is
backed by the general assets of Massachusetts Mutual Insurance Company
("Massachusetts Mutual") and, accordingly, is subject to its credit worthiness
(Massachusetts Mutual has been rated A++ by A.M. Best Company, AAA by both Fitch
Ratings and Standard & Poor's Corp., and Aa1 by Moody's Investors Service).
Massachusetts Mutual maintains the contributions and related accumulated
investment earnings in an unallocated fund which earns interest at a minimum
guaranteed rate of return which is revised semi-annually.
The Core Value Equity Fund holds Class S shares of MassMutual Core
Value Equity Fund, a MassMutual Institutional Fund, which invests in stocks of
larger, well-established companies selling at discounted valuation levels.
Massachusetts Mutual maintains the contributions and related accumulated
investment earnings in a pooled separate investment account which is not
guaranteed as to either principal or a stated rate of investment return.
4
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements, Continued
The Getty Common Stock Fund invests in common stock of the Company.
The Fund is administered by the Company and is not guaranteed as to either
principal or a stated rate of investment return.
The four Destiny Lifestyle Asset Allocation Funds -- Conservative,
Moderate, Aggressive, and Ultra Aggressive -- have their own investment
strategy and risk characteristics. The Destiny Lifestyle Funds are pooled
separate investment accounts and are managed by Massachusetts Mutual. The
investments of each fund are allocated within targeted ranges among various
mutual funds with a variety of investment strategies. The Destiny Lifestyle
Funds are not guaranteed as to either principal or a stated rate of return.
The Destiny Conservative Fund is invested primarily in domestic and
foreign common stocks, publicly traded bonds and short-term interest bearing
investments with a focus on income and capital preservation.
The Destiny Moderate Fund invests primarily in domestic and foreign
common stocks, including small capitalization common stocks, publicly traded
bonds and short-term interest bearing investments with a focus on achieving
growth through a balance of income and capital appreciation.
The Destiny Aggressive Fund invests primarily in domestic and foreign
common stocks, including small capitalization common stocks, publicly traded
bonds and short-term interest bearing investments with a focus on capital
appreciation.
The Destiny Ultra Aggressive Fund invests primarily in domestic and
foreign common stocks, including small and large capitalization common stocks.
Effective April 1, 2004, the Destiny Lifestyle Asset Allocation Funds
changed their asset allocation strategy to become increasingly conservative over
time as the individual investor comes closer to his or her target retirement
date. The Destiny Conservative, Moderate, Aggressive, and Ultra Aggressive funds
were renamed the MM Destination Retirement Income, MM Destination Retirement
2020, MM Destination Retirement 2030 and the MM Destination Retirement 2040
funds, respectively. In addition, a fifth investment option named the MM
Destination Retirement 2010 fund in now offered to coincide with an asset
allocation mix of stocks/bonds/cash appropriate for an investor retiring around
the year 2010. This approach will simplify the investors' retirement planning by
adding an automatic roll down feature. Over time, these options will invest more
conservatively as retirement nears without requiring the investor to adjust his
or her portfolio.
5
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements, Continued
The following funds hold units in independently managed mutual funds.
The contributions and related accumulated investment earnings are not guaranteed
as to either principal or a stated rate of investment return.
The Contrafund Fund holds shares of Fidelity Contrafund, a mutual fund
that invests mainly in undervalued common stocks of companies experiencing
improved fundamentals. The portfolio emphasizes both well-known and lesser-known
companies that are not currently favored by the public, but which show potential
for capital appreciation due to positive changes or turnarounds that are
underway. The portfolio for the underlying fund is managed by Fidelity
Management and Research Company with a focus on growth over the long term.
The New Horizons Fund holds shares of T Rowe Price New Horizons Fund,
a mutual fund which invests mainly in common stocks of small, fast growing
companies. The portfolio emphasizes young, emerging growth companies that have
the potential to become major companies in the future. The portfolio for the
underlying fund is managed by T Rowe Price with a focus on growth over the long
term.
The Ultra Fund holds shares of American Century Ultra Fund, a mutual
fund which invests mainly in common stocks of the fastest growing companies in
the market with earnings and revenue growing at accelerating rates, and those
most likely to appreciate in market value. The portfolio emphasizes mid-sized to
large-sized companies. The portfolio for the underlying fund is managed by
American Century Investment Management, Inc. with a focus on growth over the
long term.
The Schwab S&P 500 Index Fund holds shares of the Schwab S&P 500 Index
Fund, a mutual fund that invests in the same stocks that make up the S&P 500
index and in the same relative weightings that each stock has in the index. The
portfolio for the underlying fund is managed by Charles Schwab with a focus on
achieving a total rate of return comparable to the S&P 500 Index.
The American Century International Growth Fund holds shares of
American Century International Growth Fund, which invests in the stocks of
developed foreign companies outside the United States and domestic stocks. The
portfolio for the underlying fund is managed by American Century Investment
Management, Inc. with a focus on growth over the long term.
Under the loan provision, employees are permitted to borrow between
$500 and the lesser of $50,000 or 50% of the participant's vested account
balance for personal reasons reflecting important financial needs. The interest
rate charged is fixed at the prime rate in effect at the beginning of the month
the loan is requested plus 1% and repayment is made by payroll deduction. The
employee is charged a $75 loan initiation fee for each loan from the Plan. Loans
are required to be repaid over a maximum period of five years, unless the loan
is used to purchase a principal residence, in which case the maximum period is
fifteen years. Loans may be repaid in full before their maturity date without
penalty. However, all loans must be repaid upon cessation of employment and, if
not repaid within 90 days, the unpaid balance of principal and interest is
charged against the participant's vested account balance.
6
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements, Continued
A money market fund is utilized to effect transfers between funds and
for participant withdrawals.
Employees are only permitted to withdraw deferred cash contributions
made to the Plan subsequent to October 1, 1987 under the provisions of Section
401(k) of the Internal Revenue Code for "financial hardships", as defined by the
Internal Revenue Code. Employees may withdraw their voluntary contributions,
including the vested portion of employer matching contributions, once per
calendar year, although they will be subject to certain suspension periods with
respect to making future contributions. Employees may withdraw all or part of
their account balances attributable to additional and rollover contributions
without penalty. Rollover contributions cannot be withdrawn unless they have
been in the Plan for a minimum of two years. Profit sharing contributions may
not be withdrawn while the employee is employed by the Company.
Employee contributions (including related accumulated investment
earnings) are 100% vested. Employer contributions (including related accumulated
investment earnings) vest in accordance with the following schedule:
Years of Service Percent Vested
---------------- --------------
2 years 20%
3 years 40
4 years 60
5 years 80
6 or more years 100
Upon termination of employment, the non-vested portion of employer
contributions, if any, will be forfeited by the employee and applied to reduce
the Company's future contributions.
2. Summary of significant accounting policies
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP"). GAAP requires management to make its best estimates, judgments and
assumptions that affect the amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
changes in net assets available for plan benefits during the period reported.
While all available information has been considered, actual results could differ
from those estimates, judgments and assumptions.
7
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements, Continued
The investments in the Guaranteed Interest Fund, the Core Value Equity
Fund, the Destiny Lifestyle Asset Allocation Funds, the Contrafund Fund, the New
Horizons Fund and the Ultra Fund are stated at current fair value as reported by
Massachusetts Mutual using quoted market prices or good faith estimates if
quoted market prices are not available. The Employer Common Stock Fund, The
Schwab S&P 500 Index Fund and The American Century International Growth Fund are
valued at published market prices.
The Plan presents in the Statement of Changes in Net Assets Available
for Plan Benefits the net investment gain or loss from pooled separate accounts,
and the net appreciation or depreciation in the fair value of investments, which
consists of the realized gains and losses and the unrealized appreciation and
depreciation on those investments held by the Getty Common Stock Fund.
Under the terms of the Plan, the Company has elected to pay the
administrative expenses of the Plan.
3. Termination Priorities
While the Company has not expressed any intent to discontinue its
contributions, the Board of Directors of the Company is free to do so at any
time, subject to the requirements of ERISA. In the event such discontinuance
results in the termination of the Plan, the net assets of the Plan will be
distributed to the participants and beneficiaries of the Plan under the terms of
the Plan.
4. Income Tax Status
On December 19, 2002, the Internal Revenue Service informed the
Company that the Plan was a qualified plan under Section 401(a) of the Internal
Revenue Code.
5. Reconciliation to Form 5500
In accordance with generally accepted accounting principles, the Plan
has not recorded a liability for amounts allocated to participants who have
withdrawn from the Plan and for which disbursement of those funds has not been
made by year end. The Department of Labor requires the recording of a liability
for benefit claims payable on Form 5500. As of December 31, 2003 and 2002, there
were no benefits claims payable recorded on Form 5500 for employees who have
elected to withdraw from the Plan.
8
GETTY REALTY CORP.
RETIREMENT AND PROFIT SHARING PLAN
Notes to Financial Statements, Continued
6. Investments
The following summarizes the fair value of the Plan's investments as
of December 31, 2003 and 2002 (in thousands):
2003 2002
---- ----
Guaranteed Interest Fund (a) $2,712 (b) $2,815 (b)
Core Value Equity Fund (a) 239 (b) 171
Getty Realty Corp. Common Stock,
$.01 par value (c) 2,031 (b) 1,378 (b)
Destiny Conservative Fund (a) 30 27
Destiny Moderate Fund (a) 70 53
Destiny Aggressive Fund (a) 53 36
Destiny Ultra Aggressive Fund (a) 73 51
Contrafund Fund (a) 123 90
New Horizons Fund (a) 349 (b) 48
Ultra Fund (a) 93 60
Schwab S&P 500 Index Fund (d) 13 6
------ ------
$5,786 $4,735
====== ======
(a) Fair value determined by Massachusetts Mutual.
(b) Fund balance represents more than 5% of the Plan's net assets available
for plan benefits as of the beginning of the year.
(c) The market value of the Company's common stock was $26.15 per share and
$18.95 per share as of December 31, 2003 and 2002, respectively.
(d) Fair value determined at published market prices.
9