Financial Performance - Getty Realty Corp. reported net earnings of $23.3 million for Q3 2025, an increase from $15.3 million in Q3 2024, resulting in net earnings per share of $0.40, up from $0.27[5]. - Funds From Operations (FFO) for Q3 2025 were $38.7 million, or $0.66 per share, compared to $31.4 million, or $0.56 per share in Q3 2024[6]. - Adjusted Funds From Operations (AFFO) increased to $36.1 million, or $0.62 per share, from $33.2 million, or $0.59 per share year-over-year[6]. - Revenues from rental properties increased to $55,159,000 for the three months ended September 30, 2025, compared to $50,494,000 for the same period in 2024, representing a growth of 3.3%[42]. - Total revenues for the nine months ended September 30, 2025, reached $161,178,000, up from $150,375,000 in 2024, indicating an increase of 7.9%[42]. - Net earnings for the three months ended September 30, 2025, were $23,348,000, compared to $15,335,000 in 2024, reflecting a significant increase of 52.3%[42]. - Basic net earnings per common share rose to $0.40 for the three months ended September 30, 2025, compared to $0.27 in 2024, marking an increase of 48.1%[42]. - Net earnings for Q3 2025 were $23.35 million, up from $15.34 million in Q3 2024, representing a 52.5% increase[44]. - Funds from operations (FFO) increased to $38.70 million in Q3 2025 from $31.44 million in Q3 2024, a growth of 23.1%[44]. - Adjusted Funds from operations (AFFO) rose to $36.10 million in Q3 2025 compared to $33.16 million in Q3 2024, marking an increase of 8.8%[44]. - Basic net earnings per share for Q3 2025 were $0.40, up from $0.27 in Q3 2024, reflecting a 48.1% increase[44]. Investment Activity - The company completed $237 million in investment activity year-to-date, with a committed investment pipeline exceeding $75 million for the acquisition and development of 22 properties[3][16]. - The company invested $56.3 million in Q3 2025 at an 8.0% initial cash yield, with an additional $103.4 million invested post-quarter at a 7.8% yield[15]. Portfolio and Assets - Getty Realty's portfolio included 1,160 properties across 44 states and Washington, D.C., as of September 30, 2025[28]. - The company's total assets as of September 30, 2025, amounted to $2,055,875,000, an increase from $1,973,680,000 as of December 31, 2024, representing a growth of 4.2%[40]. - Total liabilities increased to $1,043,518,000 as of September 30, 2025, compared to $1,011,597,000 at the end of 2024, reflecting a rise of 3.1%[40]. - The company reported a total stockholders' equity of $1,012,357,000 as of September 30, 2025, up from $962,083,000 at the end of 2024, indicating an increase of 5.2%[40]. Guidance and Future Outlook - The company increased its 2025 AFFO guidance to a range of $2.42 to $2.43 per diluted share, up from the previous range of $2.40 to $2.41[23]. - Forward-looking statements include guidance for 2024 AFFO per share, reflecting management's expectations and assumptions[36]. Dispositions and Adjustments - The company sold one property for $1.8 million in Q3 2025, recording a gain of $0.3 million, and six properties for $5.5 million year-to-date with a total gain of $2.2 million[19]. - The company reported a gain on dispositions of real estate of $338,000 for the three months ended September 30, 2025, compared to a loss of $1,471,000 in 2024[42]. - The company reported a total revenue recognition adjustment of $(1.22 million) for Q3 2025, compared to $(0.22 million) in Q3 2024[44]. - Environmental adjustments resulted in a total of $(3.53 million) for Q3 2025, compared to $0.02 million in Q3 2024[44]. - The company recorded impairments of $0.65 million in Q3 2025, slightly down from $0.68 million in Q3 2024[44]. Operational Performance - The company emphasizes the importance of AFFO as a measure of core operating performance, which excludes various non-recurring items[35]. - The weighted average common shares outstanding increased to 56,693 in Q3 2025 from 54,249 in Q3 2024[44]. - Total revenue for the nine months ended September 30, 2025, was $52.15 million, compared to $48.77 million for the same period in 2024, an increase of 6.1%[44].

Core Insights - Getty Realty Corp. reported a strong third quarter performance, reflecting effective execution of its investment strategy and stable rental income from convenience and automotive retail tenants [4][2] - The company has increased its earnings guidance for the full year 2025, indicating confidence in continued growth and value creation for shareholders [4][24] Financial Performance - For the three months ended September 30, 2025, net earnings were $23.3 million, or $0.40 per share, compared to $15.3 million, or $0.27 per share for the same period in 2024, representing a 52.5% increase in net earnings [6][41] - Funds From Operations (FFO) for the third quarter were $38.7 million, or $0.66 per share, up from $31.4 million, or $0.56 per share in the prior year [6][41] - Adjusted Funds From Operations (AFFO) increased to $36.1 million, or $0.62 per share, compared to $33.2 million, or $0.59 per share in the same quarter of 2024 [6][41] Revenue and Income - Rental income for the third quarter was $53.5 million, an increase of 12.3% from $47.6 million in the same quarter of 2024 [7][9] - Total revenues for the quarter reached $55.6 million, compared to $51.5 million in the prior year, marking a 7.9% increase [41] Investment Activity - Year-to-date, the company has completed $237 million in investment activity, with an initial cash yield of 7.9% [4][16] - The company has a committed investment pipeline exceeding $75 million for the development and acquisition of 22 properties, expected to be funded over the next 9-12 months [17][4] Portfolio and Property Management - As of September 30, 2025, Getty Realty's portfolio included 1,160 properties across 44 states and Washington, D.C. [29] - The company sold one property for $1.8 million during the quarter, with a gain of $0.3 million, and six properties for $5.5 million year-to-date, recording a total gain of $2.2 million [19][20] Balance Sheet and Capital Markets - As of September 30, 2025, total outstanding indebtedness was $940 million, with $750 million in senior unsecured notes at a weighted average interest rate of 4.1% [20][21] - The company raised approximately $32.5 million from the settlement of 1.2 million shares of common stock during the quarter [22][23] Guidance - The company has raised its 2025 AFFO guidance to a range of $2.42 to $2.43 per diluted share, up from the previous range of $2.40 to $2.41 [24]

Core Insights - Getty Realty Corp. has completed a sale leaseback transaction acquiring 12 convenience stores for $100 million, entering into a long-term net lease with Now & Forever [1][2] - The company has invested approximately $233 million year-to-date in convenience and automotive retail assets, achieving a 7.9% initial cash yield [3] Investment Activity - The acquired convenience stores are strategically located in high-income submarkets of Houston, TX, averaging over 8,000 square feet and offering made-to-order food options [2] - The lease agreement has an initial term of 15 years with multiple renewal options and rent increases every five years [2] Company Overview - Getty Realty Corp. is a publicly traded net lease REIT focused on convenience, automotive, and single-tenant retail real estate, with a portfolio of 1,137 properties across 44 states and Washington, D.C. as of June 30, 2025 [4]

Group 1 - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology [1] - The analyst has researched more than 1000 companies, focusing on metals and mining stocks, as well as other industries like consumer discretionary, REITs, and utilities [1] - The analyst transitioned from writing a blog to creating a value investing-focused YouTube channel, where extensive research on numerous companies has been conducted [1]

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with consumer discretionary, REITs, and utilities [1]

Group 1 - The article emphasizes the importance of discussing retirement investments, suggesting that it is a relevant topic despite some skepticism about retirement itself [1] - It highlights the availability of in-depth research on various investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs, indicating a comprehensive approach to income alternatives [1] Group 2 - The article includes a disclaimer about the lack of stock or derivative positions in the companies mentioned, reinforcing the independence of the analysis [2] - It notes that past performance does not guarantee future results, which is a standard caution in investment discussions [2]

Core Viewpoint - Getty Realty Corp. is set to release its financial results for Q3 2025 on October 22, 2025, after market close [1] Financial Results Announcement - The financial results for the third quarter ended September 30, 2025, will be disclosed after market hours on October 22, 2025 [1] Conference Call Details - A conference call and webcast will be held on October 23, 2025, at 8:30 a.m. EDT for discussing the financial results [2] - Participants can join the call by dialing 1-877-423-9813 or 1-201-689-8573 for international calls, ten minutes prior to the start [2] - The call will also be accessible via live webcast on the company's investor relations website [2] Replay Information - A replay of the conference call will be available starting October 23, 2025, at 11:30 a.m. EDT until November 6, 2025, at 11:59 p.m. EDT [3] - To access the replay, participants can dial 1-844-512-2921 or 1-412-317-6671 for international calls, using pass code 13755957 [3] Company Overview - Getty Realty Corp. is a publicly traded net lease REIT focused on convenience and automotive retail real estate [4] - As of June 30, 2025, the company’s portfolio consists of 1,137 freestanding properties across 44 states and Washington, D.C. [4]

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)