Group 1 - The REIT sector presents attractive buying opportunities, although less than three years ago when it was in a bear market [1]

Core Viewpoint - The article discusses seven low beta stocks with dividend yields up to 8%, which are considered more stable during market downturns, providing a cushion against volatility [2][3]. Group 1: Low-Beta Dividend Stocks - Getty Realty (GTY) offers a 6.6% yield with a 5-year beta of 0.86 and a 1-year beta of 0.12, indicating lower volatility compared to the market. The company has a stable cash-flowing tenant base, primarily from convenience stores and car washes [5][7]. - AES Corp. (AES) has a 5.5% yield and operates with a 1-year beta of 0.88 and a 5-year beta of 0.96. It combines traditional utility services with renewable energy sales, providing growth potential [9][10]. - Northwest Bancshares (NWBI) offers a 6.8% yield with a 5-year beta of 0.69 and a 1-year beta of 0.80. The company has a solid balance sheet but faces challenges in consistent growth despite a recent merger [11][12]. - Conagra Brands (CAG) has a yield of 7.4% but faces significant challenges, including supply chain issues and food inflation, with a 1-year beta of -0.05 and a 5-year beta of 0.08 [17][21]. - Cal-Maine Foods (CALM) boasts an 8.0% yield and has seen a 60% increase year-to-date, with a 1-year beta of 0.67 and a 5-year beta of 0.19. The company has benefited from rising egg prices but faces income variability [23][24]. Group 2: Market Performance and Trends - The article highlights that low beta stocks tend to attract buyers during market downturns, which can help stabilize their share prices [3]. - The performance of low beta stocks like Kraft Heinz (KHC) and General Mills (GIS) has been disappointing, with low betas reflecting counter-market movements rather than stability [14][15]. - The overall trend indicates that while some low beta stocks have maintained dividends, their growth has been limited, and challenges remain in the current market environment [16][22].

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis of Getty Realty Corp.'s financial condition and results of operations, along with market risk disclosures and controls [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements of Getty Realty Corp., including balance sheets, statements of operations, and cash flows, with detailed notes on business, accounting policies, leases, debt, environmental obligations, equity, EPS, fair value, acquisitions, and segment reporting [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $2,015,148 | $1,973,680 | $41,468 | 2.10% | | Real Estate, net | $1,888,632 | $1,836,857 | $51,775 | 2.82% | | Credit Facility | $175,000 | $82,500 | $92,500 | 112.12% | | Term Loan, net | $— | $148,951 | $(148,951)| -100.00% | | Senior Unsecured Notes, net | $748,328 | $673,511 | $74,817 | 11.11% | | Total Liabilities | $1,032,726 | $1,011,597 | $21,129 | 2.09% | | Total Stockholders' Equity | $982,422 | $962,083 | $20,339 | 2.11% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net earnings Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric (in thousands) | 2025 | 2024 | Change | % Change | | :-------------------- | :---------- | :---------- | :---------- | :------- | | Total Revenues | $53,257 | $49,937 | $3,320 | 6.65% | | Operating Income | $24,865 | $26,193 | $(1,328) | -5.07% | | Net Earnings | $14,014 | $16,711 | $(2,697) | -16.14% | | Basic EPS | $0.24 | $0.30 | $(0.06) | -20.00% | | Diluted EPS | $0.24 | $0.30 | $(0.06) | -20.00% | Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric (in thousands) | 2025 | 2024 | Change | % Change | | :-------------------- | :---------- | :---------- | :---------- | :------- | | Total Revenues | $105,587 | $98,907 | $6,680 | 6.75% | | Operating Income | $51,289 | $51,933 | $(644) | -1.24% | | Net Earnings | $28,800 | $33,434 | $(4,634) | -13.86% | | Basic EPS | $0.49 | $0.59 | $(0.10) | -16.95% | | Diluted EPS | $0.49 | $0.59 | $(0.10) | -16.95% | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Metric (in thousands) | 2025 | 2024 | Change | % Change | | :-------------------- | :---------- | :---------- | :---------- | :------- | | Net Cash Flow from Operating Activities | $63,412 | $59,680 | $3,732 | 6.25% | | Net Cash Flow Used in Investing Activities | $(67,944) | $(97,643) | $29,699 | -30.42% | | Net Cash Flow from Financing Activities | $2,501 | $39,760 | $(37,259) | -93.71% | | Cash, Cash Equivalents and Restricted Cash at End of Period | $11,586 | $7,083 | $4,503 | 63.57% | [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements, clarifying accounting policies and significant transactions [NOTE 1. — DESCRIPTION OF BUSINESS](index=6&type=section&id=NOTE%201.%20%E2%80%94%20DESCRIPTION%20OF%20BUSINESS) This note describes Getty Realty Corp.'s core business as a net lease REIT specializing in convenience, automotive, and single-tenant retail real estate - Getty Realty Corp. is a publicly traded net lease REIT specializing in convenience, automotive, and other single-tenant retail real estate, with its portfolio including **1,137 properties across 44 states and Washington, D.C.** as of June 30, 2025[16](index=16&type=chunk)[17](index=17&type=chunk) [NOTE 2. — ACCOUNTING POLICIES](index=6&type=section&id=NOTE%202.%20%E2%80%94%20ACCOUNTING%20POLICIES) This note details the significant accounting policies and estimates used in preparing the financial statements, including real estate valuation and impairment - The financial statements are prepared in conformity with **GAAP**, requiring management to make estimates and judgments, particularly concerning **real estate valuation**, **direct financing leases**, **impairment of long-lived assets**, and **environmental remediation obligations**[20](index=20&type=chunk)[21](index=21&type=chunk) - Impairment charges for the six months ended June 30, 2025, totaled **$1.6 million**, primarily due to estimated sales prices from third-party offers and increased carrying values from environmental liabilities[39](index=39&type=chunk) - New accounting pronouncements, **ASU 2023-09** (Income Tax Disclosures) and **ASU 2024-03** (Expense Disaggregation Disclosures), are being evaluated for their impact on future financial statements, with effective dates in 2024 and 2026, respectively[44](index=44&type=chunk)[45](index=45&type=chunk) [NOTE 3. — LEASES](index=12&type=section&id=NOTE%203.%20%E2%80%94%20LEASES) This note provides information on the company's lease arrangements, including property ownership, lease types, and future rental receivables - As of June 30, 2025, the company owned **1,107 properties** and leased **30**, with substantially all properties under **triple-net leases**, where tenants are responsible for taxes, maintenance, insurance, and environmental contamination[46](index=46&type=chunk) Revenues from Rental Properties (in thousands) | Period | 2025 | 2024 | Change | % Change | | :----- | :---------- | :---------- | :---------- | :------- | | 3 Months | $52,724 | $48,720 | $4,004 | 8.22% | | 6 Months | $104,430 | $95,935 | $8,495 | 8.85% | Future Contractual Annual Rentals Receivable (in thousands) as of June 30, 2025 | Year | Operating Leases | Direct Financing Leases | | :-------- | :--------------- | :---------------------- | | 2025 | $97,801 | $4,854 | | 2026 | $197,273 | $9,869 | | 2027 | $192,169 | $10,089 | | 2028 | $183,822 | $9,799 | | 2029 | $181,665 | $8,425 | | Thereafter| $1,372,293 | $6,061 | | Total | $2,225,023 | $49,097 | - As of June 30, 2025, ARKO Corp. and Global Partners LP remained significant tenants, accounting for **12%** and **10%** of total revenues, respectively[59](index=59&type=chunk) [NOTE 4. — COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=NOTE%204.%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's legal proceedings and potential liabilities, particularly environmental litigations and their financial impact - The company is involved in various legal proceedings, including significant environmental litigations related to the Lower Passaic River and MTBE contamination in Pennsylvania and Maryland, with accrued liabilities for these matters totaling **$5.0 million** as of June 30, 2025, up from **$0.1 million** at December 31, 2024[64](index=64&type=chunk)[249](index=249&type=chunk) - For the Lower Passaic River matter, the District Court granted the United States' Motion to Enter the Modified Consent Decree in **December 2024**, finding the settlement fair, however, intervening parties (Nokia and Occidental) filed appeals in **January and February 2025**, making the timeline for resolution uncertain, potentially extending into **2026**[72](index=72&type=chunk)[73](index=73&type=chunk) - The company continues to vigorously defend claims in the MTBE litigations in Pennsylvania and Maryland, with ultimate liability remaining uncertain[79](index=79&type=chunk)[81](index=81&type=chunk) [NOTE 5. — DEBT](index=22&type=section&id=NOTE%205.%20%E2%80%94%20DEBT) This note details the company's debt structure, including credit facilities, term loans, and senior unsecured notes, along with recent financing activities Debt Outstanding (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Credit Facility | $175,000 | $82,500 | | Term Loan | $— | $150,000 | | Senior Unsecured Notes | $750,000 | $675,000 | | Total Debt | $925,000 | $907,500 | - In January 2025, the company entered into a Third Restated Credit Agreement, providing a **$450.0 million** unsecured revolving credit facility maturing in January 2029, with an accordion feature for an additional **$300.0 million**[83](index=83&type=chunk)[84](index=84&type=chunk) - The Term Loan of **$150.0 million** was fully repaid in January 2025 using borrowings from the new Credit Facility, resulting in a **$0.9 million** expense for unamortized debt issuance costs[88](index=88&type=chunk)[210](index=210&type=chunk) - The company issued **$50.0 million** of **5.70% Series T Notes** and **$25.0 million** of **5.70% Series S Notes** in February 2025, and **$50.0 million** of **5.52% Series R Notes**, using proceeds to repay the **$50.0 million Series C Notes**[89](index=89&type=chunk)[91](index=91&type=chunk) [NOTE 6. — DERIVATIVE INSTRUMENTS](index=25&type=section&id=NOTE%206.%20%E2%80%94%20DERIVATIVE%20INSTRUMENTS) This note explains the company's use of interest rate swap agreements to manage risk from variable-rate borrowings and their fair value - The company uses interest rate swap agreements for risk management, specifically to hedge against changes in future cash flows from variable-rate borrowings, with **$150.0 million** of borrowings under the Credit Facility subject to these swaps, fixing SOFR at a weighted average of **4.73%** until **October 2026** as of June 30, 2025[82](index=82&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) Fair Value of Derivative Instruments (in thousands) | Product | Fixed Rate | Notional | Index | Effective Date | Maturity Date | Fair Value of Liability (June 30, 2025) | Fair Value of Liability (December 31, 2024) | | :------ | :--------- | :------- | :---- | :------------- | :------------ | :-------------------------------------- | :------------------------------------------ | | Swap | 4.80% | $75,000 | Daily Simple SOFR + 10 bps | 10/17/2023 | 10/19/2026 | $(1,094) | $(1,024) | | Swap | 4.66% | $75,000 | Daily Simple SOFR + 10 bps | 4/10/2024 | 10/19/2026 | $(960) | $(840) | [NOTE 7. — ENVIRONMENTAL OBLIGATIONS](index=27&type=section&id=NOTE%207.%20%E2%80%94%20ENVIRONMENTAL%20OBLIGATIONS) This note details the company's environmental liabilities, remediation costs, and compliance with regulations, despite tenant responsibilities - The company is subject to environmental laws and regulations, with tenants contractually responsible for compliance and remediation under triple-net leases, though the company remains contingently liable[103](index=103&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - As of June 30, 2025, total accrued environmental remediation obligations were **$20.6 million**, consisting of **$8.8 million** for known liabilities and **$11.8 million** for future liabilities related to preexisting unknown contamination[113](index=113&type=chunk) - Environmental expenses for the six months ended June 30, 2025, included **$0.2 million** in net accretion expense and **$0.2 million** in credits due to decreases in estimated remediation costs[114](index=114&type=chunk) [NOTE 8. — STOCKHOLDERS' EQUITY](index=30&type=section&id=NOTE%208.%20%E2%80%94%20STOCKHOLDERS%27%20EQUITY) This note presents changes in stockholders' equity, including net earnings, dividends, and proceeds from equity offerings Changes in Stockholders' Equity (Six Months Ended June 30, 2025, in thousands) | Item | Amount | | :------------------------------------ | :---------- | | Balance, December 31, 2024 | $962,083 | | Net earnings | $28,800 | | Accumulated other comprehensive loss | $(190) | | Dividends declared ($0.94 per share) | $(54,246) | | Shares issued (equity offering, net) | $32,763 | | Shares issued (ATM Program, net) | $10,942 | | Stock-based compensation/settlements | $2,238 | | Balance, June 30, 2025 | $982,422 | - During the six months ended June 30, 2025, the company settled approximately **1.2 million shares** from a July 2024 equity offering, realizing **$32.8 million** in net proceeds, with an additional **$86.5 million** in gross proceeds anticipated from remaining forward sales agreements[120](index=120&type=chunk)[218](index=218&type=chunk) - Under the ATM Program, **406,727 shares** were settled for **$10.9 million** in net proceeds during the six months ended June 30, 2025, with approximately **992,696 shares** remaining outstanding under forward sales agreements, anticipating gross proceeds of **$32.2 million**[126](index=126&type=chunk)[127](index=127&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - Regular quarterly dividends paid for the six months ended June 30, 2025, totaled **$53.4 million**, or **$0.94 per share**, an increase from **$49.8 million** or **$0.90 per share** in the prior year[128](index=128&type=chunk)[229](index=229&type=chunk) [NOTE 9. — EARNINGS PER COMMON SHARE](index=33&type=section&id=NOTE%209.%20%E2%80%94%20EARNINGS%20PER%20COMMON%20SHARE) This note provides the basic and diluted earnings per common share calculations and weighted average shares outstanding Earnings Per Common Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :----- | :---- | :---- | | Basic EPS | $0.49 | $0.59 | | Diluted EPS | $0.49 | $0.59 | Weighted Average Common Shares Outstanding (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :----- | :---- | :---- | | Basic | 55,297| 53,970| | Diluted| 55,443| 53,987| [NOTE 10. — FAIR VALUE MEASUREMENTS](index=33&type=section&id=NOTE%2010.%20%E2%80%94%20FAIR%20VALUE%20MEASUREMENTS) This note details the fair value measurements of financial instruments, including debt and derivatives, using various valuation inputs - The fair value of Credit Facility borrowings was **$175.8 million** as of June 30, 2025, while Senior Unsecured Notes had fair values of **$702.8 million** (June 30, 2025) and **$601.6 million** (December 31, 2024), determined using discounted cash flow techniques (**Level 3 inputs**)[133](index=133&type=chunk) - Derivative instruments (interest rate swaps) are valued using observable market-based inputs (**Level 2**), with a fair value liability of **$2.1 million** as of June 30, 2025[134](index=134&type=chunk)[135](index=135&type=chunk) Assets and Liabilities Measured at Fair Value (June 30, 2025, in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :------- | :------ | :------ | :------ | :---- | | Assets: Mutual funds | $2,156 | $— | $— | $2,156| | Liabilities: Deferred compensation | $— | $2,156 | $— | $2,156| [NOTE 11. — ASSETS HELD FOR SALE](index=35&type=section&id=NOTE%2011.%20%E2%80%94%20ASSETS%20HELD%20FOR%20SALE) This note reports on properties classified as held for sale and the gains realized from property dispositions - As of June 30, 2025, no properties met the criteria for classification as held for sale, compared to **$243 thousand** in real estate held for sale, net, as of December 31, 2024[139](index=139&type=chunk) - During the six months ended June 30, 2025, the company sold **five properties**, resulting in an aggregate net gain of **$1.9 million**[139](index=139&type=chunk) [NOTE 12. — PROPERTY ACQUISITIONS](index=36&type=section&id=NOTE%2012.%20%E2%80%94%20PROPERTY%20ACQUISITIONS) This note summarizes the company's property acquisition activities, including the number of properties and aggregate purchase prices - During the six months ended June 30, 2025, the company acquired interests in **29 properties** for an aggregate purchase price of **$87.2 million**, including convenience stores, express tunnel car washes, drive-thru QSRs, and auto service centers[140](index=140&type=chunk) - During the six months ended June 30, 2024, the company acquired interests in **40 properties** for an aggregate purchase price of **$150.9 million**, primarily express tunnel car washes and auto service centers[141](index=141&type=chunk) [NOTE 13. — SEGMENT REPORTING](index=38&type=section&id=NOTE%2013.%20%E2%80%94%20SEGMENT%20REPORTING) This note clarifies that the company operates as a single reportable segment, with performance evaluated on a consolidated basis - The company operates as a **single reportable segment**, as its Chief Operating Decision Maker (CEO) evaluates performance based on consolidated financial and operational data, not distinguishing operations by geography, size, or type[142](index=142&type=chunk)[143](index=143&type=chunk) [NOTE 14. — SUBSEQUENT EVENTS](index=38&type=section&id=NOTE%2014.%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note confirms that no significant subsequent events occurred after the reporting period through the financial statements' issuance date - There were no significant subsequent events from June 30, 2025, through the date the financial statements were issued[144](index=144&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including forward-looking statements, business overview, investment and redevelopment strategies, and a detailed analysis of revenues, expenses, liquidity, and capital resources. It also discusses critical accounting policies and environmental matters [Cautionary Note Regarding Forward-Looking Statements](index=39&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises readers that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements regarding the company's business, investment strategy, market conditions, environmental and litigation matters, and financial performance, which are subject to known and unknown risks and uncertainties[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [General](index=41&type=section&id=General) This section provides a general overview of Getty Realty Corp.'s business as a net lease REIT and its property portfolio - Getty Realty Corp. is a net lease REIT specializing in convenience, automotive, and other single-tenant retail real estate, with **1,137 properties** as of June 30, 2025, primarily in the Northeast and Mid-Atlantic regions[152](index=152&type=chunk)[153](index=153&type=chunk) - Most properties are leased under triple-net agreements with initial terms of 15 or 20 years, and a weighted average remaining lease term of **10.0 years** (excluding renewal options) as of June 30, 2025[154](index=154&type=chunk) [Investment Strategy and Activity](index=42&type=section&id=Investment%20Strategy%20and%20Activity) This section outlines the company's investment strategy focused on acquiring single-tenant retail real estate and summarizes recent acquisition activities - The company's investment strategy focuses on acquiring convenience, automotive, and other single-tenant retail real estate, primarily through sale-leaseback transactions, to generate current income and long-term appreciation[159](index=159&type=chunk) - Investments for the six months ended June 30, 2025, totaled **$78.4 million** across **33 properties**, including drive-thru QSRs, auto service centers, convenience stores, and express tunnel car washes[160](index=160&type=chunk) - In the prior year, for the six months ended June 30, 2024, investments were **$102.3 million** across **53 properties**, mainly express tunnel car washes and auto service centers[161](index=161&type=chunk) [Redevelopment Strategy and Activity](index=42&type=section&id=Redevelopment%20Strategy%20and%20Activity) This section describes the company's strategy for redeveloping properties to enhance value and reports on current redevelopment projects - The company redevelops properties, particularly former gas and repair businesses, into modern convenience stores or other retail uses to enhance value, with **33 redevelopment projects** completed since 2015[162](index=162&type=chunk) - As of June 30, 2025, **two properties** were under active redevelopment, with others in feasibility planning[163](index=163&type=chunk) [Supplemental Non-GAAP Measures](index=42&type=section&id=Supplemental%20Non-GAAP%20Measures) This section explains the use of FFO and AFFO as non-GAAP measures to evaluate the company's core operating performance - The company uses **FFO** (Funds From Operations) and **AFFO** (Adjusted Funds From Operations) as supplemental non-GAAP measures to assess core operating performance, excluding items like depreciation, gains/losses on dispositions, and certain non-cash adjustments[164](index=164&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) FFO and AFFO (Three Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | Change | % Change | | :----- | :---------- | :---------- | :---------- | :------- | | FFO | $27,828 | $30,454 | $(2,626) | -8.62% | | AFFO | $33,967 | $32,198 | $1,769 | 5.49% | | Basic FFO per share | $0.49 | $0.55 | $(0.06) | -10.91% | | Basic AFFO per share | $0.59 | $0.58 | $0.01 | 1.72% | FFO and AFFO (Six Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | Change | % Change | | :----- | :---------- | :---------- | :---------- | :------- | | FFO | $59,496 | $60,065 | $(569) | -0.95% | | AFFO | $67,763 | $63,601 | $4,162 | 6.54% | | Basic FFO per share | $1.04 | $1.08 | $(0.04) | -3.70% | | Basic AFFO per share | $1.19 | $1.15 | $0.04 | 3.48% | [Results of Operations](index=45&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenues and expenses, explaining key changes and their drivers Key Financial Changes (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change | | :-------------------------- | :---------- | :---------- | :---------- | | Revenues from rental properties | $52,724 | $48,720 | $4,004 | | Interest on notes and mortgages receivable | $533 | $1,217 | $(684) | | Property costs | $2,443 | $3,983 | $(1,540) | | Environmental expenses | $5,341 | $(150) | $5,491 | | General and administrative | $6,794 | $6,168 | $626 | | Depreciation and amortization | $14,917 | $13,372 | $1,545 | | Gains on dispositions of real estate | $1,558 | $141 | $1,417 | | Interest expense | $10,904 | $9,662 | $1,242 | Key Financial Changes (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change | | :-------------------------- | :---------- | :---------- | :---------- | | Revenues from rental properties | $104,430 | $95,935 | $8,495 | | Interest on notes and mortgages receivable | $1,157 | $2,972 | $(1,815) | | Property costs | $4,425 | $7,686 | $(3,261) | | Environmental expenses | $5,457 | $(167) | $5,624 | | General and administrative | $13,720 | $12,824 | $896 | | Depreciation and amortization | $30,958 | $26,024 | $4,934 | | Gains on dispositions of real estate | $1,886 | $1,185 | $701 | | Interest expense | $22,636 | $18,797 | $3,839 | - The increase in rental income for both periods was primarily due to new property acquisitions, completed redevelopments, and contractual rent increases, partially offset by dispositions[172](index=172&type=chunk)[185](index=185&type=chunk) - Environmental expenses significantly increased due to higher environmental litigation accruals[179](index=179&type=chunk)[192](index=192&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources and uses of liquidity, including cash flow, credit facilities, and equity proceeds - The company's primary liquidity uses include operating expenses, debt interest, environmental remediation, and shareholder distributions, with short-term needs met by cash flow from operations, the Credit Facility, Senior Unsecured Notes, and equity offering proceeds[197](index=197&type=chunk)[198](index=198&type=chunk) - As of June 30, 2025, the company had **$275.0 million** available under its Credit Facility, **$118.8 million** anticipated gross proceeds from equity offering forward sales, and **$7.5 million** in cash and cash equivalents[199](index=199&type=chunk) Cash Flow Activities (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change | | :------------------------ | :---------- | :---------- | :---------- | | Operating Activities | $63,412 | $59,680 | $3,732 | | Investing Activities | $(67,944) | $(97,643) | $29,699 | | Financing Activities | $2,501 | $39,760 | $(37,259) | - The decrease in net cash flow from financing activities was primarily due to the repayment of the Term Loan and Series C Notes, and increased cash dividends, partially offset by increased net proceeds from equity issuances and new Senior Unsecured Notes[203](index=203&type=chunk) [Critical Accounting Policies and Estimates](index=54&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the key accounting policies and estimates that require significant management judgment and can materially impact financial reporting - Critical accounting policies include revenue recognition, deferred rent receivable, direct financing leases, impairment of long-lived assets, environmental remediation obligations, litigation, income taxes, and purchase price allocation for acquired properties, all requiring significant management judgment and estimates[231](index=231&type=chunk)[232](index=232&type=chunk) [Environmental Matters](index=55&type=section&id=Environmental%20Matters) This section addresses the company's environmental regulations, remediation costs, accrued liabilities, and insurance coverage - The company is subject to extensive environmental regulations, with remediation costs primarily for UST removal, soil/water excavation, and system maintenance, and accrued liabilities are based on probable costs and estimated recoveries from state funds[233](index=233&type=chunk)[235](index=235&type=chunk) - As of June 30, 2025, total accrued environmental remediation obligations were **$20.6 million**, comprising **$8.8 million** for known liabilities and **$11.8 million** for future unknown contamination, reflecting a slight decrease from **$20.9 million** at December 31, 2024[242](index=242&type=chunk) - The company maintains a **5-year pollution legal liability insurance policy** (purchased in September 2022) with a **$25.0 million** aggregate limit to cover a subset of properties with the highest environmental risk[247](index=247&type=chunk) [Environmental Litigation](index=58&type=section&id=Environmental%20Litigation) This section details the increase in environmental litigation accruals due to ongoing legal matters - Environmental litigation accruals increased to **$5.0 million** as of June 30, 2025, from **$0.1 million** at December 31, 2024, primarily due to ongoing matters related to the former Newark, New Jersey Terminal and Lower Passaic River, and MTBE litigations[249](index=249&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, primarily interest rate risk associated with its Credit Facility, and measures taken to mitigate credit risk - The company is exposed to interest rate risk from its Credit Facility, where **$25.0 million** of the **$175.0 million** outstanding as of June 30, 2025, is subject to variable interest rates, and a **1.0%** increase in market interest rates would decrease 2025 net income and cash flows by approximately **$0.1 million**[251](index=251&type=chunk)[252](index=252&type=chunk) - To minimize credit risk, temporary cash investments are placed with high credit quality institutions, such as an overnight bank time deposit with JPMorgan Chase Bank, N.A[253](index=253&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, at a reasonable assurance level[255](index=255&type=chunk) - No material changes in internal control over financial reporting occurred during the first three months of 2025[256](index=256&type=chunk) [PART II—OTHER INFORMATION](index=60&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section includes information on legal proceedings, risk factors, other disclosures, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to previously disclosed legal proceedings, noting no new material legal proceedings or material developments, except for specific accruals and appeals - No new material legal proceedings or material developments in previously disclosed legal proceedings were reported, except for an accrual in the Pennsylvania MTBE litigation and an appeal in the Lower Passaic River matter[259](index=259&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K and Quarterly Report on Form 10-Q - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, and the Quarterly Report on Form 10-Q for the period ended March 31, 2025[260](index=260&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications from the President and CEO, CFO, and Chief Accounting Officer, as well as XBRL instance documents and taxonomies - The report includes certifications from the President and CEO (Christopher J. Constant), Executive Vice President, CFO and Treasurer (Brian Dickman), and Vice President, Chief Accounting Officer and Controller (Eugene Shnayderman) as exhibits[262](index=262&type=chunk) - XBRL instance documents and taxonomy extensions (Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase) are filed herewith[262](index=262&type=chunk) [Signatures](index=62&type=section&id=Signatures) This section contains the official signatures of the company's principal executive and financial officers, certifying the report's accuracy - The report is signed by Christopher J. Constant (President and Chief Executive Officer), Brian R. Dickman (Executive Vice President, Chief Financial Officer and Treasurer), and Eugene Shnayderman (Vice President, Chief Accounting Officer and Controller) on July 24, 2025[264](index=264&type=chunk)[265](index=265&type=chunk)

Financial Data and Key Metrics Changes - The company reported an annualized base rent growth of 9.9%, reaching approximately $204 million during the second quarter [6] - Adjusted Funds from Operations (AFFO) per share increased by 1.7% year-over-year to $0.59 [6][19] - Rent collections remained nearly 100%, with annual rent increases averaging 1.8% [6][10] Business Line Data and Key Metrics Changes - The company invested $66.1 million in the second quarter at an initial cash yield of 8.1% [13] - The trailing twelve months rent coverage ratio was reported at 2.6 times, indicating strong tenant performance [10][12] - The portfolio included 11.32 net leased properties with an occupancy rate of 99.7% and a weighted average lease term of ten years [12] Market Data and Key Metrics Changes - 61% of annualized base rent came from the top 50 Metropolitan Statistical Areas (MSAs), and 76% from the top 100 MSAs [12] - The investment pipeline includes over $90 million in acquisitions or development funding, primarily in automotive service centers [9][14] Company Strategy and Development Direction - The company focuses on well-located convenience and automotive retail properties, which are considered recession-resistant [10] - The strategy emphasizes market fundamentals and strong lease terms to mitigate credit risks [11] - The company aims to continue scaling its operations and diversifying its tenant base [11][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sectors they invest in and the ability to scale the company further [10] - The company is increasing its full-year 2025 AFFO per share guidance to a range of $2.40 to $2.41, up from $2.38 to $2.41 [20] - Management noted a constructive stance towards investment activity, indicating a return to growth among tenants [29][30] Other Important Information - The company has no debt maturities until 2028, with a weighted average debt maturity of 5.1 years and a weighted average cost of debt at 4.5% [19] - The company maintains a strong capital position with over $400 million in total liquidity [19] Q&A Session Summary Question: What do you attribute the accelerating investment activity to? - Management noted a willingness to return to the transaction market, with companies seeking capital for growth [22][23] Question: Can you discuss your comfort level on the car wash space? - Management expressed comfort with the express tunnel car wash sector, noting a focus on profitability and a slowdown in new store counts [25][26] Question: Is there a suggestion of a narrowing bid-ask spread? - Management indicated that there was a return to growth among tenants, contributing to a more constructive investment environment [29][30] Question: How is the investment pipeline expected to play out in the back half of the year? - Management expects continued acquisition activity and a strong pipeline, with a focus on closing more deals [36][38] Question: Are there any changes in lease structure or escalators? - Management confirmed no significant changes to lease structures, maintaining a focus on unitary master leases with escalations around 2% [32] Question: Is the company looking for new investment opportunities outside existing verticals? - Management clarified that there are no current plans to expand beyond the four primary target sectors [66] Question: Can you provide insight into the environmental expense accrual? - Management explained that the accrual relates to ongoing litigation and is a positive step in estimating potential settlements [68]

Financial Performance - Q2 2025 Adjusted Funds From Operations (AFFO) increased by 5.6% to $34 million[9] - Q2 2025 AFFO per share increased by 1.7% to $0.59[9] - Year-to-date (YTD) AFFO increased by 6.6% to $67.8 million[12] - YTD AFFO per share increased by 3.5% to $1.19[12] - Increased FY2025 AFFO guidance to $2.40 - $2.41 per share from $2.38 - $2.41 per share[9] Portfolio Metrics - Invested $95.5 million at an 8.1% initial cash yield YTD[9] - Portfolio occupancy is 99.7%[12] - Weighted average lease term (WALT) is 10.0 years[12, 44, 109] - Tenant rent coverage is 2.6x[12, 17, 44, 114] - 99.9% YTD rent collections[12] Investment and Capital Structure - More than $90 million of investments are under contract, with the majority expected to close in 6-9 months[9] - Total liquidity exceeds $400 million, including $7 million in cash, $119 million in unsettled forward equity, and $275 million in revolver capacity[12] - Net debt to EBITDA is 5.2x (4.6x pro forma for unsettled forward equity)[12]

Group 1 - Getty Realty (NYSE: GTY) has underperformed over the past year, losing approximately 13% of its value [1] - The company's reliance on capital market access to finance its growth ambitions has negatively impacted its stock performance [1]

Core Viewpoint - Getty Realty reported quarterly funds from operations (FFO) of $0.59 per share, missing the Zacks Consensus Estimate of $0.60 per share, representing an FFO surprise of -1.67% [1][2] Financial Performance - The company posted revenues of $52.72 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.16%, compared to $48.72 million in the same quarter last year [2] - Over the last four quarters, Getty Realty has surpassed consensus FFO estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Getty Realty shares have declined approximately 9.5% since the beginning of the year, while the S&P 500 has gained 7.3% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Future Outlook - The current consensus FFO estimate for the coming quarter is $0.61 on revenues of $52.99 million, and for the current fiscal year, it is $2.41 on revenues of $210.76 million [7] - The estimate revisions trend for Getty Realty was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Other industry is currently in the bottom 37% of over 250 Zacks industries, which may impact stock performance [8]

Exhibit 99.1 FOR IMMEDIATE RELEASE GETTY REALTY CORP. ANNOUNCES SECOND QUARTER 2025 RESULTS - Reports $95 Million of Year-to-Date Investment Activity - - Increases 2025 Full Year Earnings Guidance - NEW YORK, NY, July 23, 2025 — Getty Realty Corp. (NYSE: GTY) ("Getty" or the "Company"), a net lease REIT focused on convenience and automotive retail real estate, announced today its financial and operating results for the quarter ended June 30, 2025. Second Quarter 2025 Highlights "Getty delivered another quar ...

Core Insights - Getty Realty Corp. reported a year-to-date investment activity of $95 million and increased its full-year 2025 earnings guidance [1][4][24] Financial Performance - For the second quarter of 2025, net earnings were $14.0 million, or $0.24 per share, compared to $16.7 million, or $0.30 per share in the same period of 2024 [6][42] - Funds From Operations (FFO) for the quarter were $27.8 million, or $0.49 per share, down from $30.5 million, or $0.55 per share year-over-year [6][42] - Adjusted Funds From Operations (AFFO) increased to $34.0 million, or $0.59 per share, compared to $32.2 million, or $0.58 per share in the prior year [6][42] Revenue and Income - Rental income for the quarter was $51.3 million, a 12.1% increase from $45.7 million in Q2 2024 [7][9] - Total revenues for the quarter reached $53.3 million, compared to $49.9 million in the same quarter of 2024 [42] Investment Activity - The company invested $66.1 million across 28 properties at an initial cash yield of 8.1% during the quarter, with an additional $18.5 million invested post-quarter [8][16] - As of July 23, 2025, Getty Realty has a committed investment pipeline exceeding $90 million for the development and acquisition of 36 properties [17] Portfolio Management - The company sold three properties for gross proceeds of $3.2 million during the quarter, recording a gain of $1.6 million [19] - As of June 30, 2025, Getty Realty's portfolio included 1,137 properties across 44 states and Washington, D.C. [29] Balance Sheet and Capital Structure - As of June 30, 2025, total outstanding indebtedness was $925 million, with $750 million in senior unsecured notes at a weighted average interest rate of 4.1% [20] - The company raised approximately $32.8 million through its at-the-market equity program during the quarter [21] Guidance - The company raised its 2025 AFFO guidance to a range of $2.40 to $2.41 per diluted share, up from the previous range of $2.38 to $2.41 [24]

Company Overview - Getty Realty (GTY) is a net lease REIT with over 1100 properties, focusing on the acquisition, financing, and development of convenience, automotive, and other single-tenant retail real estate [1] Investment Focus - The company specializes in single-tenant retail real estate, which includes sectors such as convenience stores and automotive services [1] Research Background - The analyst has over 10 years of experience researching various companies across multiple sectors, including commodities and technology, which informs their insights on investment opportunities [1]