Getty Realty
Annual Report 2021

Plain-text annual report

2021 ANNUAL REPORT C O N V E N I E N C E A U T O M O T I V E R E T A I L Getty Realty Corp. (NYSE: GTY) is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of December 31, 2021, the Company’s portfolio included 1,028 properties in 38 states across the United States plus Washington, D.C. 99.5% $145M Occupied ABR All portfolio metrics as of December 31, 2021. ABR = annualized base rent. WALT = weighted average lease term. Financial Highlights (for the years ended December 31) Number of Properties Total Revenues Adjusted Funds from Operations Adjusted Funds from Operations Per Share Dividends Per Share 2021 1,028 155,408 94,967 2.08 1.58 $ $ $ $ 2020 959 147,346 83,317 1.94 1.50 $ $ $ $ 2019 945 140,655 75,254 1.80 1.42 $ $ $ $ 64% Top 50 MSA 71% Corner Locations 8.8 Years WALT 2.6X Tenant Rent Coverage 1 Dear Shareholders Christopher J. Constant President and Chief Executive Officer As we entered 2021, Getty set a number of ambitious goals related to diversifying and growing our portfolio, scaling our overall platform, growing earnings, and delivering strong returns to shareholders. I am proud to report to you that we either achieved or exceeded all of these business goals for the year. The net result was that Getty invested $200 million across 100 convenience and automotive retail properties, produced 8% growth in cash rental income, and grew our adjusted funds from operations (“AFFO”) per share by 7% for the year. In addition to our growth for the year, the Company’s performance reflected the strength of our in-place portfolio which, combined with our conservatively leveraged balance sheet, positions the Company well for future success as we continue to execute on our growth strategy in 2022 and beyond. Convenience & Automotive Retail Real Estate Over the last five years, Getty has invested more than $725 million in 305 acquired properties and an additional $15.6 million in 24 completed, value-add, redevelopment projects. The Company’s growth has also allowed Getty to add more than 25 new tenants to the portfolio, including nationally recognized retailers such as AutoZone, Bank of America, Circle-K, Go Car Wash, Mavis Tires, Sheetz, Valvoline, and Zips Car Wash. Our expanded focus on convenience and automotive retail real estate continues to provide new opportunities for Getty to deploy capital as we pursue our long-term growth objectives. The net result of our expanded investment activities is that we have significantly diversified our portfolio and transformed the company from one previously known as an owner of gasoline and service stations in the Northeast and Mid-Atlantic, to a mature institutional owner of a diverse portfolio of convenience and automotive retail real estate across the country. As of December 31, 2021, we have a portfolio of 1,028 properties including convenience stores, car washes, automotive service stations, auto parts retailers and quick serve restaurants, and we now own properties in 38 states across the United States. Our investment strategy is predicated on the belief that automobility will remain the dominant form of consumer transportation in the United States and that mobile consumers will increasingly prioritize convenience, speed, and service. As we apply our strategy to freestanding retail real estate across the United States, our investment thesis encompasses convenience stores, express car washes, automotive service (instant oil change, tire & battery, and related services), automotive parts, and drive thru quick- serve restaurants. Put more simply - we seek to invest in freestanding, single tenant properties where consumers spend money in their cars or on their cars. Looking ahead, we will invest in all of our target asset classes while remaining focused on acquiring high- quality retail real estate which is occupied by national and regional operators that can deliver a quality consumer experience in their sale and delivery of essential goods and services. 2 GETTY REALTY 2021 Annual Report Sale leasebacks Forward purchases Programmatic relationships Marketed transactions Construction loans Mortgage loans Seller financing Capital improvements Acquisitions Redevelopment Financing Asset Management Single tenant retail Ground leases Build to suit Other alternate uses Portfolio optimization Dispositions Leasing Ancillary income Expanding Our Investment Approach We are pleased by the success of our expanded investment capabilities where we have added development funding for new-to-industry (“NTI”) sites and redevelopments of select properties in our existing portfolio to complement our core sale-leaseback (“SLB”) financing product. We believe this flexible offering allows Getty to support our tenants as they grow their businesses through acquisitions, ground-up development or redevelopment and modernization of existing stores. We have also expanded our investment teams at Getty to meet the needs of our tenants by adding dedicated business development associates and personnel with expertise in real estate development. We pride ourselves on being able to structure transactions to creatively meet the financing needs of our tenants. Sustained Business Strategy Execution Our team continued to demonstrate Getty’s strategic growth strategy in 2021 by (i) enhancing our portfolio through accretive acquisitions of convenience and automotive retail real estate through SLBs, development funding for NTIs, and acquisition of properties subject to existing triple-net leases and (ii) unlocking embedded value through the completion of select redevelopment projects. In 2021, we invested $200 million across 100 high- quality properties. Our investment activity for the year continued to reflect our disciplined investment approach, which carefully considers real estate attributes as well as the operational and credit quality of our prospective tenants. During the year, the Company underwrote a record $2.9 billion of potential transactions with approximately 60% being convenience stores and the remaining 40% focused on our other target asset classes. More importantly, our investment spending in 2021 displayed the greatest amount of diversity in the Company’s history and was spread across five industry verticals (Convenience Stores – 44%, Express Car Washes – 33%, Instant Oil Changes – 19%, Tires – 3% and Drive Thrus – 1%). We were also pleased to introduce several new, institutional tenants to our roster during the year including Flash Markets, Mavis Tires, Refuel, Splash Car Wash, Valvoline, and WhiteWater Express Car Wash; and to expand our existing tenant relationships with Go Car Wash, Jiffy Lube, United Pacific, and Zips Car Wash. Our redevelopment program continued to produce results in 2021 as we completed five projects and signed four new leases for future projects with national tenants. The completed projects in 2021 added BJ’s Wholesale Club as a new high-quality tenant and extended our relationship with 7-11 (4 projects). We invested a total of $1.3 million in these projects and generated a considerable incremental return on our investment of approximately 32%. In terms of our redevelopment outlook, we maintain a solid pipeline, including ending the year with four active projects and three projects in planning stages with signed tenant 3 leases. We continue to believe that the redevelopment program demonstrates the embedded value of our in-place portfolio and that by strategically investing in our assets, we can generate attractive risk-adjusted returns, improve the credit quality of our portfolio, and diversify our retail tenant base. Stable Core Portfolio Operations We also continued to benefit from the stability of our existing portfolio of triple-net leases and the strength of our tenants’ operating businesses. Getty realized full, normalized rent collections throughout 2021 and collected 100% of the Company’s 2020 COVID- related rent deferrals. On the asset management front, we continued to refine the nature of our portfolio by selectively disposing of 16 properties for $24.5 million, while opportunistically exiting 11 third-party leased sites. The net result is a healthy portfolio with stable rent coverage of 2.6x and overall occupancy of 99.5%. Scaling Our Conservatively Leveraged Balance Sheet In a year which saw us increase our real estate assets by approximately 12%, the Company’s ability to efficiently raise long-term and permanent capital, which provided for an accretive spread to our initial investment yields, was critically important to our success. To that end, we issued $94 million of common equity through the use of our at-the-market (“ATM”) program Portfolio Composition 75% Convenience & Gas 11% Legacy Gas & Repair 10% Car Wash 2% Auto Service 1% Other Retail <1% Auto Parts National Footprint with Concentrations in High Density Metropolitan Areas % of ABR 23% 0% 4 GETTY REALTY 2021 Annual Reportduring 2021 – a record amount for the Company. The ATM program continues to be a valuable tool for our Company as it is a cost effective and efficient way to raise equity capital and allows us to match fund our acquisitions and redevelopment projects. The Company also successfully refinanced its $300 million revolving credit facility in October 2021. The revised credit agreement, which now matures in October 2025, reduces the interest rate for borrowings by 20 to 50 basis points depending on the Company’s leveraged based borrowing grid, and amends certain covenant provisions to adhere to those generally applicable to investment grade rated REITs. As further demonstration of our commitment to financing our Company for the long-term and supporting our growth initiatives, we announced in February 2022 the issuance of $225 million of senior unsecured notes, including (i) $100 million of 3.45% notes funded at closing and maturing in February 2032, and (ii) $125 million of 3.65% notes to be funded in January 2023 and mature in January 2033 (with a portion of the delayed issuance earmarked for the early retirement of our $75 million, 5.35% series B notes coming due in June 2023). Post this transaction, Getty’s net debt to EBITDA ratio remains below 5.0x and our revolving credit facility is completely undrawn meaning that we have significant capacity to fund our growth plans as we look ahead. We will have no debt maturities until 2025 and the weighted average term of our indebtedness will be the longest in the Company’s history at more than 7 years. Driving Growth and Shareholder Returns Our 2021 financial results, strategic growth and capital markets activities resulted in our Board’s decision to increase our dividend by 5.1% to an annualized rate of $1.64 per share – making 2021 the seventh consecutive year that the Company has rewarded shareholders with a significant increase in its recurring cash dividend rate. The dividend remains well-covered and its increase stems from the stability of our current portfolio along with our expectation of continued growth in AFFO. Commitment to ESG Getty continues to enhance its efforts regarding Environmental, Social and Governance (“ESG”) reporting. Earlier this year, we provided our initial disclosures regarding our ESG programs on our website and in our quarterly corporate profile, and I am pleased to report that we plan to publish our first standalone sustainability report in 2022. As an organization, we place a high priority on the protection of our assets and the environment. Our team includes full-time environmental experts and we actively manage a program to oversee legacy environmental remediation for which we are responsible. In addition, our leases require tenants to comply with environmental laws and regulations, and 19% New York 8% Washington, D.C. 6% Boston 4% Columbia, SC 3% Denver 5 to have insurance to protect against any environmental impacts that arises during their tenancy. We also emphasize sustainability at our new corporate headquarters where among other things we utilize energy efficient computer equipment, filtered water machines, timed or sensor-controlled HVAC and lighting systems, and eliminated single-use plastics in our kitchen facilities. We are also committed to providing the best possible experience for our employees. We deeply value our team members and are committed to maintaining a safe and healthy workplace that allows our employees to engage professionally and personally. We aim to foster a diverse and inclusive work environment where women comprise 48% of our full-time team. We also offer team members a highly competitive compensation package, comprehensive health insurance with substantially all premiums paid by the Company, and several company-funded healthcare and commuter related reimbursement benefits, as well as other standard benefits. Finally, we are dedicated to maintaining high standards for corporate governance predicated on integrity and transparency. Our Board of Directors is directly engaged with the critical initiatives that help us establish and maintain Getty’s policies related to sustainability, corporate citizenship, and effective governance. In this regard, our Board has delegated oversight of our ESG efforts to our Nominating & Corporate Governance Committee, and oversight of enterprise risk management to our Audit Committee. In addition to our corporate ESG-related activities and objectives, we are pleased to report that many of our tenants have already completed projects including upgrading to LED lighting, installing energy efficient coolers and HVAC units, and, in select cases, utilizing EV charging stations at our properties. The terms of our long-term, triple-net leases delegate property- specific investments to our tenants, and we appreciate that many of our tenants have committed to “green” projects with their own capital and/or have taken advantage of government and other subsidies for qualifying renewable energy technologies and projects. Getty’s commitment to corporate sustainability has given rise to a new financing product, which we have made available to our tenants who may need incremental financing to complete “green” projects. We are committed to helping tenants fund sustainability initiatives that help position our portfolio for long-term success. 6 A Bright Future As we enter 2022, we remain committed to growing our portfolio and I believe the expansion of our growth strategy will provide us with ample investment opportunities throughout the year. We are also pleased, as I am sure everyone is, that the ongoing public health crisis caused by COVID-19 and prolonged by the Omicron variant continues to subside. We have proven that Getty can be a highly effective organization and transcend adversity in the face of an unexpected crisis such as the COVID-19 pandemic. We have grown our readiness to meet the challenges ahead and have learned many valuable lessons which we will carry forward. I remain firmly of the opinion that Getty is at its best when we are together as a team, and I am thrilled to report that we will all be together on a regular basis in our new corporate headquarters this spring. I believe we have the strongest group of leaders and high potential associates in place since I joined the Company in 2010 and we are poised to deliver a strong year of growth in 2022 and to create value for our shareholders for years to come. A Final Thought About the Passing of Leo Liebowitz I would be remiss if I did not once again remark on the passing this past year of Leo Liebowitz, our co-founder and stalwart leader for many decades. We have previously reflected on Leo’s extraordinary lifetime of leadership until his retirement as the Company’s Chairman over a year ago. His warmth, energy, and intelligence will be missed by all of us at Getty Realty. I will conclude by reiterating how proud I am of Getty’s 2021 accomplishments and how optimistic I am about Getty’s prospects. While it remains an honor for me to lead the Company, I would not be successful without the contributions of Board of Directors, our management team, and our employees. I would like to personally thank everyone for all of their hard work during the past year. I would also like to thank our shareholders for their continued support. Best Regards, Christopher J. Constant President and Chief Executive Officer GETTY REALTY 2021 Annual ReportUNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (cid:1409) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021 OR (cid:1407) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 001-13777 GETTY REALTY CORP. (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction of incorporation or organization) 11-3412575 (I.R.S. employer identification no.) 292 Madison Avenue, 9th Floor New York, New York 10017-6318 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (646) 349-6000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $0.01 par value Trading Symbol(s) GTY Name of each exchange on which registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1409) No (cid:1407) Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes (cid:1407) No (cid:1409) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (cid:1409) No (cid:1407) Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes (cid:1409) No (cid:1407) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer (cid:1409) (cid:1407) Smaller reporting company (cid:1407) Accelerated filer Emerging growth company (cid:1407) (cid:1407) If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:1407)(cid:3) Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. (cid:1409) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:1407) No (cid:1409) The aggregate market value of common stock held by non-affiliates (based on 39,896,973 shares of common stock at a closing price per share of the registrant’s common stock on the New York Stock Exchange at $31.15) of the Company was $1,242,800,000 as of June 30, 2021. The registrant had outstanding 46,716,268 shares of common stock as of February 24, 2022. DOCUMENTS INCORPORATED BY REFERENCE DOCUMENT Selected Portions of Definitive Proxy Statement for the 2021 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed by the PART OF FORM 10-K registrant on or prior to 120 days following the end of the registrant’s year ended December 31, 2021, pursuant to Regulation 14A. III Auditor’s PCAOB ID Number: 238 Auditor’s Name: PricewaterhouseCoopers LLP Auditor’s Location New York, New York Item Description Page TABLE OF CONTENTS Cautionary Note Regarding Forward-Looking Statements Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures PART I PART II Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Reserved Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services PART IV Exhibits and Financial Statement Schedules Form 10-K Summary Exhibit Index Signatures 1 1A 1B 2 3 4 5 6 7 7A 8 9 9A 9B 9C 10 11 12 13 14 15 16 3 5 9 25 25 27 29 30 31 32 45 47 78 78 78 78 79 79 79 79 79 80 80 101 106 Cautionary Note Regarding Forward-Looking Statements Certain statements in this Annual Report on Form 10-K may constitute “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “seeks,” “plans,” “projects,” “estimates,” “anticipates,” “predicts” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and are not historical facts. (All capitalized and undefined terms used in this section shall have the same meanings hereafter defined in this Annual Report on Form 10-K.) Examples of forward-looking statements included in this Annual Report on Form 10-K include, but are not limited to, our statements regarding our network of convenience stores, car washes, automotive service centers, automotive parts retailers, and certain other freestanding retailers, including drive-thru quick service restaurants; substantial compliance of our properties with federal, state and local provisions enacted or adopted pertaining to environmental matters; the effects of U.S. federal tax reform and other legislative, regulatory and administrative developments; the impact of existing legislation and regulations on our competitive position; our prospective future environmental liabilities, including those resulting from preexisting unknown environmental contamination; the impact of the novel coronavirus (“COVID-19”) pandemic on our business and results of operations; quantifiable trends, which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the removal and replacement of USTs; the impact of our redevelopment efforts related to certain of our properties; the amount of revenue we expect to realize from our properties; our belief that our owned and leased properties are adequately covered by casualty and liability insurance; our workplace demographics, recruiting efforts, and employee compensation program; FFO and AFFO as measures that represent our core operating performance and its utility in comparing our core operating performance between periods; the reasonableness of our estimates, judgments, projections and assumptions used regarding our accounting policies and methods; our critical accounting policies; our exposure and liability due to and our accruals, estimates and assumptions regarding our environmental liabilities and remediation costs; loan loss reserves or allowances; our belief that our accruals for environmental and litigation matters, including matters related to our former Newark, New Jersey Terminal and the Lower Passaic River, our MTBE multi-district litigation cases in the states of Pennsylvania and Maryland, were appropriate based on the information then available; our claims for reimbursement of monies expended in the defense and settlement of certain MTBE cases under pollution insurance policies; compliance with federal, state and local provisions enacted or adopted pertaining to environmental matters; our beliefs about the settlement proposals we receive and the probable outcome of litigation or regulatory actions and their impact on us; our expected recoveries from UST funds; our indemnification obligations and the indemnification obligations of others; our investment strategy and its impact on our financial performance; the adequacy of our current and anticipated cash flows from operations, borrowings under our Second Restated Credit Agreement and available cash and cash equivalents; our continued compliance with the covenants in our Second Restated Credit Agreement and our senior unsecured notes; our belief that certain environmental liabilities can be allocated to others under various agreements; our belief that our real estate assets are not carried at amounts in excess of their estimated net realizable fair value amounts; our beliefs regarding our properties, including their alternative uses and our ability to sell or lease our vacant properties over time; and our ability to maintain our federal tax status as a REIT. These forward-looking statements are based on our current beliefs and assumptions and information currently available to us, and are subject to known and unknown risks, uncertainties and other factors and were derived utilizing numerous important assumptions that may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors and assumptions involved in the derivation of forward-looking statements, and the failure of such other assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. These factors and assumptions may have an impact on the continued accuracy of any forward-looking statements that we make. Factors which may cause actual results to differ materially from our current expectations include, but are not limited to, the risks described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K, as such risk factors may be updated from time to time in our public filings, and risks associated with: complying with environmental laws and regulations and the costs associated with complying with such laws and regulations; substantially all of our tenants depending on the same industry for their revenues; the creditworthiness of our tenants; our tenants’ compliance with their lease obligations; renewal of existing leases and our ability to either re-lease or sell properties; our dependence on external sources of capital; counterparty risks; the uncertainty of our estimates, judgments, projections and assumptions associated with our accounting policies and methods; our ability to successfully manage our investment strategy; potential future acquisitions and redevelopment opportunities; changes in interest rates and our ability to manage or mitigate this risk effectively; owning and leasing real estate; our business operations generating sufficient cash for distributions or debt service; adverse developments in general business, economic or political conditions; adverse effect of inflation; federal tax reform; property taxes; potential exposure related to pending lawsuits and claims; owning real estate primarily concentrated in the Northeast and Mid-Atlantic regions of the United States; competition in our industry; the adequacy of our insurance coverage and that of our tenants; failure to qualify as a REIT; dilution as a result of future issuances of equity securities; our dividend policy, ability to pay dividends and 3 changes to our dividend policy; changes in market conditions; provisions in our corporate charter and by-laws; Maryland law discouraging a third-party takeover; adverse effects by the transition from LIBOR; the loss of a member or members of our management team or Board of Directors; changes in accounting standards; future impairment charges; terrorist attacks and other acts of violence and war; our information systems; failure to maintain effective internal controls over financial reporting; and negative impacts from the continued spread of the COVID-19 pandemic, including on the global economy or on our tenants’ businesses, financial position, or results of operations. As a result of these and other factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results, our growth or reinvestment strategies, our ability to pay dividends or stock price. An investment in our stock involves various risks, including those mentioned above and elsewhere in this Annual Report on Form 10-K and those that are described from time to time in our other filings with the SEC. You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events, unless required by law. For any forward-looking statements contained in this Annual Report on Form 10-K or in any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 4 Item 1. Business Company Profile PART I Getty Realty Corp., a Maryland corporation, is a publicly traded, net lease real estate investment trust (“REIT”) specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio includes convenience stores, car washes, automotive service centers (gasoline and repair, oil and maintenance, tire and battery, collision), automotive parts retailers, and certain other freestanding retail properties, including drive-thru quick service restaurants. Our predecessor was originally founded in 1955 and our common stock was listed on the NYSE in 1997. Our portfolio includes 1,028 properties located in 38 states and Washington, D.C., and our tenants operate under a variety of national and regional brands. We are internally managed by our management team, which has extensive experience acquiring, financing, developing and managing convenience, automotive and other single tenant retail real estate. We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. The Internal Revenue Code permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating corporate level federal income tax and making the REIT a pass-through vehicle for federal income tax purposes if certain REIT qualifications are met. To meet the applicable requirements of the Internal Revenue Code, a REIT must, among other things, invest substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to stockholders annually a substantial portion of its taxable income. As a REIT, we are required to distribute at least 90% of our taxable income to our stockholders each year and would be subject to corporate level federal income taxes on any taxable income that is not distributed. Our company is headquartered in New York, New York and as of February 24, 2022, we had 31 employees. Recent Developments Our investment strategy is predicated on the belief that automobility will remain the dominant form of consumer transportation in the United States and that mobile consumers will increasingly prioritize convenience, speed, and service. As such, throughout the year ended December 31, 2021, we focused on expanding our platform capabilities and growing our portfolio to increase and diversify our investments in convenience, automotive and other freestanding retail properties. Specifically, we improved our access to and cost of capital by expanding our at-the-market equity offering program (the “ATM Program”) and extending and reducing the cost of our $300.0 million revolving credit facility (the “Revolving Facility”). We also executed on the most diverse set of annual acquisitions in our history, acquiring a variety of high-quality convenience stores, car wash properties and auto service centers, and adding exposure to eight new tenants and four new states across the country. Lastly, we advanced our investment program by providing construction loans for new-to-industry developments with high-growth operators in both the convenience store and car wash sectors. In February 2021, we extended and expanded our ATM Program to increase the amount of common stock we may sell under the ATM Program to an aggregate sales price of up to $250.0 million through a consortium of agent banks. In connection with the expansion of the ATM Program, we may also sell shares of common stock under forward sale agreements. For additional information regarding our ATM Program see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources” and Note 7 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. On October 27, 2021, we entered into a second amended restated credit agreement (as amended the “Second Restated Credit Agreement”) with a group of banks led by Bank of America, N.A. Pursuant to the Second Restated Credit Agreement, we (i) extended the maturity date of our Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the Revolving Facility and (iii) amended certain financial covenants and other provisions. As part of this transaction, we entered into amendments to the each of the note purchase and guarantee agreements that govern our senior unsecured notes in order to conform the financial covenant provisions therein to the corresponding provisions in the Second Restated Credit Agreement. For additional information regarding our Second Restated Credit Agreement see Note 4 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee simple interests in 97 properties for an aggregate purchase price of $194.3 million. The properties we acquired included 25 convenience stores, 17 car wash properties, 54 automotive services centers (including 51 instant oil change centers and three tire service centers) and one drive-thru quick service restaurant. The acquired properties were concentrated in the Southeast and Midwest regions of the United States, including the Charleston (SC), Cincinnati and Toledo (OH), Charlotte and Raleigh (NC), Chicago (IL), Detroit, Grand Rapids and Lansing (MI), and Lexington (KY) metropolitan areas. Other acquired assets were located in the Las Vegas (NV), New Haven (CT), and San Antonio (TX) metropolitan areas. 5 In addition, during the year ended December 31, 2021, we advanced construction loans in an aggregate amount of $13.5 million for the development of four new-to-industry convenience stores and one new-to-industry car wash and, as of December 31, 2021, had outstanding $5.7 million of such construction loans, including accrued interest. At the end of the construction period, the construction loans will be repaid with the proceeds from the sale of the properties. During the year ended December 31, 2021, we acquired two properties for which we had previously funded construction loans in the amount of $7.8 million and the loans were repaid in full. For additional information regarding our property acquisitions see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Company Operations As of December 31, 2021, we owned 981 properties and leased 47 properties from third-party landlords. Our nationwide portfolio includes a concentration in the Northeast and Mid-Atlantic regions that we believe is unique and not readily available for purchase or lease from other owners or landlords. Our typical properties consist of approximately one acre of land in a larger metropolitan area and are used as convenience stores, car washes, automotive service centers, automotive parts retailers, and certain other freestanding retailers, including drive-thru quick service restaurants. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrances or exit ramps. Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate the businesses. Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental contamination that existed before their leases commenced. For additional information regarding our environmental obligations, see Note 5 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Convenience stores, car washes, automotive service centers, automotive parts retailers and certain other freestanding retail properties, including drive-thru quick service restaurants, are integral components of a convenience and transportation infrastructure supported by consumer demand for refined petroleum, day-to-day goods, prepared and fresh food offerings, and total automotive care and maintenance. Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the performance of the automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly competitive and can be subject to variability. (For additional information regarding risks related to our tenants’ dependence on the performance of the petroleum industry, see “Item 1A. Risk Factors – Significant number of our tenants depend on the same industry for their revenues” in this Form 10-K.) During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases. Our Properties Net Lease. As of December 31, 2021, we leased 1,019 of our properties to tenants under triple-net leases. Our net lease properties include 845 properties leased under 33 separate unitary or master triple-net leases and 174 properties leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years with options for successive renewal terms of up to 20 years and periodic rent escalations. As of December 31, 2021, our contractual rent weighted average lease term, excluding renewal options, was 8.8 years. Certain of our leases provide for additional rent based on the aggregate volume of fuel sold. For the year ended December 31, 2021, additional rent based on the aggregate volume of fuel sold was not material to our financial results. In addition, certain of our leases require the tenants to invest capital in our properties, substantially all of which are related to the replacement of underground storage tanks (“UST” or “USTs”) that are owned by our tenants. As of December 31, 2021, we have a commitment to fund up to $7.0 million in the aggregate with our tenants for our portion of such capital improvements. For additional information regarding our leases, see Note 2 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Redevelopment. As of December 31, 2021, we were actively redeveloping four of our properties as new convenience stores or for alternative single tenant retail uses. For additional information regarding our redevelopment properties, see “Redevelopment Strategy and Activity” below. 6 Vacancies. As of December 31, 2021, five of our properties were vacant. We expect that we will either sell or enter into new leases on these properties over time. Human Capital Resources As of December 31, 2021, we had 31 full-time employees, all of which are located in our New York office. While our business operations were not significantly disrupted by the COVID-19 pandemic during the year ended December 31, 2021, our employees continued to demonstrate resiliency and agility in responding to a frequently changing work environment and related challenges that arose as a result of the pandemic. Our employees are offered necessary flexibility to meet personal and family needs and to support the safety, health, and security of each member our team. We aim to maintain a workplace that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. We conduct annual training to prevent harassment and discrimination and monitor employee conduct year-round. We participate in annual performance reviews with our employees and hold periodic meetings with employees to gather feedback, discuss opportunities to participate in various professional development programs, and improve the overall employee experience. Our recruiting efforts, as well as employee training, compensation and advancement are all based on qualifications, performance, skills and experience. We believe that our employees are fairly compensated, without regard to gender, race and ethnicity, and are routinely recognized for outstanding performance. Our compensation program is designed to attract and retain talent, and includes the employee benefit plans described in Note 8 “Employee Benefit Plan” included in Part II, Item 8 of this Annual Report on Form 10-K. We continually assess and strive to enhance employee satisfaction and engagement. Our employees, many of whom have a long tenure with the Company, frequently express satisfaction with management and, in the opinion of management, our relations with our employees are good. Investment Strategy and Activity As part of our strategy to grow and diversify our portfolio, we regularly review acquisition and financing opportunities to invest in additional convenience, automotive and other single tenant retail real estate. We primarily pursue sale leaseback transactions with existing and prospective tenants and will pursue other transactions, including forward commitments to acquire new-to-industry construction and the acquisition of assets with in-place leases, that result in us owning fee simple interests in our properties. Our investment activities may also include purchase money financing with respect to properties we sell, real property loans relating to our leasehold properties and construction loans. Our investment strategy seeks to generate current income and benefit from long-term appreciation in the underlying value of our real estate. To achieve that goal, we seek to invest in well-located, freestanding properties that support automobility and provide convenience and service to consumers in major markets across the country. A key element of our investment strategy is to invest in properties that will enhance our property type, tenant and geographic diversification. During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding construction loans, including accrued interest, for three new-to-industry developments. During the year ended December 31, 2020, we acquired fee simple interests in 34 properties for an aggregate purchase price of $150.0 million. For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Over the last five years, we have acquired 302 properties, including single property and portfolio transactions located in various states, for an aggregate purchase price of $723.0 million. Redevelopment Strategy and Activity We believe that certain of our properties, primarily those currently being used as gasoline and repair stations, are well-suited to be redeveloped as new convenience stores or other single tenant retail uses, such as automotive parts, quick service restaurants, bank branches and specialty retail. We believe that the redeveloped properties can be leased or sold at higher values than their current use. During the years ended December 31, 2021 and 2020, rent commenced on five and six completed redevelopment projects, respectively, that were placed back into service in our net lease portfolio. Since the inception of our redevelopment program in 2015, we have completed 24 redevelopment projects. For the year ended December 31, 2021, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our redevelopment activities and transferred $0.4 million of construction-in-progress to buildings and improvements on our consolidated balance sheet. For the year ended December 31, 2020, we spent $0.3 million of construction-in-progress costs related to our redevelopment activities and transferred $1.6 million of construction-in-progress to buildings and improvements on our consolidated balance sheet. As of December 31, 2021, we had four properties under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio, including three properties for which we have signed new leases or letters of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured. 7 Major Tenants As of December 31, 2021, we had four significant tenants by revenue: • We leased 150 properties pursuant to three separate unitary leases and two stand-alone leases to subsidiaries of Global Partners LP (NYSE: GLP) (“Global”). In the aggregate, our leases with subsidiaries of Global represented 16% of our total revenues for the years ended December 31, 2021 and 2020. All of our unitary leases with subsidiaries of Global are guaranteed by the parent company. • We leased 128 properties pursuant to four separate unitary leases to subsidiaries of Arko Corp. (NASDAQ: ARKO) (“Arko”). In the aggregate, our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the years ended December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Arko are guaranteed by the parent company. • We leased 78 properties pursuant to three separate unitary leases and one stand-alone lease to Apro, LLC (d/b/a “United Oil”). In the aggregate, our leases with United Oil represented 11% and 12% of our total revenues for the years ended December 31, 2021 and 2020, respectively. • We leased 69 properties pursuant to two separate unitary leases to subsidiaries of Chestnut Petroleum Dist., Inc. (“Chestnut”). In the aggregate, our leases with subsidiaries of Chestnut represented 9% and 10% of our total revenues for the years ended December 31, 2021 and 2020, respectively. The largest of these unitary leases, covering 52 of our properties, is guaranteed by the parent company, its principals and numerous Chestnut affiliates. Our major tenants are part of larger corporate organizations and the financial distress of one subsidiary or other affiliated companies or businesses in those organizations may negatively impact the ability or willingness of our tenant to perform its obligations under its lease with us. For information regarding factors that could adversely affect us relating to our leases with these tenants, see “Item 1A. Risk Factors”. Competition The single tenant net lease retail real estate sector in which we operate is highly competitive and we expect major investors with significant capital will continue to compete with us for attractive acquisition opportunities. These competitors include publicly-traded and non-traded REITs, public and private investment funds, petroleum manufacturing, distributing and marketing companies, and other institutional and individual investors. Trademarks We own the Getty® name and trademark in connection with our real estate and the petroleum marketing business in the United States and we permit certain of our tenants to use the Getty® trademark at properties that they lease from us. Regulation Our properties are subject to numerous federal, state and local laws and regulations including matters related to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. These laws include: (i) requirements to report to governmental authorities discharges of petroleum products into the environment and, under certain circumstances, to remediate soil and groundwater contamination, including pursuant to governmental order and directive, (ii) requirements to remove and replace USTs that have exceeded governmental-mandated age limitations and (iii) the requirement to provide a certificate of financial responsibility with respect to potential claims relating to UST failures. Our triple-net lease tenants are directly responsible for compliance with environmental laws and regulations with respect to their operations at our properties. We believe that our properties are in substantial compliance with federal, state and local provisions pertaining to environmental matters. Although we are unable to predict what legislation or regulations may be adopted in the future with respect to environmental protection and waste disposal, we do not believe that existing legislation and regulations will have a material adverse effect on our competitive position. For additional information regarding pending environmental lawsuits and claims, see “Item 3. Legal Proceedings” in this Form 10-K. For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties previously leased to Getty Petroleum Marketing Inc. (“Marketing”) (substantially all of which commenced in 2012), we have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases, shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to 8 Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant. For additional information, see “Item 1A. Risk Factors” and “Liquidity and Capital Resources,” “Environmental Matters” and “Contractual Obligations” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 5 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. In addition to the numerous federal, state and local laws and regulations to which are properties are subject, we elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. Accordingly, we are subject to compliance the applicable requirements of the Internal Revenue Code concerning REITs, including that a REIT must, among other things, invest substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to stockholders annually a substantial portion of its taxable income. For additional information, see “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 6 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Additional Information Our website address is www.gettyrealty.com. Information available on our website shall not be deemed to be a part of this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our website, free of charge, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the U.S. Securities and Exchange Commission (“SEC”). Our website also contains our business conduct guidelines (“Code of Ethics”), corporate governance guidelines and the charters of the Audit, Compensation and Nominating/Corporate Governance Committees of our Board of Directors. We intend to make available on our website any future amendments or waivers to our Code of Ethics within four business days after any such amendments or waivers become effective. Item 1A. Risk Factors We are subject to various risks, many of which are beyond our control. As a result of these and other factors, we may experience material fluctuations in our future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. An investment in our stock involves various risks, including those mentioned below and elsewhere in this Annual Report on Form 10-K and those that are described from time to time in our other filings with the SEC. Summary of Risk Factors Our business is subject to risks and uncertainties, including those risks and uncertainties discussed at-length below, that could cause our actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the following: Risks Related to Our Business and Operations • The risks inherent in owning or leasing real estate. • The real estate industry is highly competitive. • Our future cash flow is dependent on the performance of our tenants of their lease obligations, renewal of existing leases and either re-leasing or selling our properties. • Significant number of our tenants depend on the same industry for their revenues. • It may be difficult for our investors to determine the creditworthiness of our tenants. • An increase in costs and liability accruals as a result of environmental laws and regulations could adversely affect our business. • We are defending pending lawsuits and claims that may subject us to material losses. • We may be subject to losses that may not be covered by insurance. 9 • The concentration of a significant number of our properties in the Northeast and Mid-Atlantic regions of the United States, and adverse conditions in those regions, in particular, could negatively impact our operations. • Property taxes on our properties may increase without notice. • Our business operations may not generate sufficient cash for distributions or debt service. • Adverse developments in general business, economic or political conditions could have a material adverse effect on us. • Terrorist attacks and other acts of violence or war may affect the market on which our common stock trades, the markets in which we operate, our operations and our results of operations. • Our exposure to counterparty risk. • Inflation may adversely affect our financial condition and results of operations. • Our assets may be subject to impairment charges. • Our accounting policies and methods require management to make estimates, judgments and assumptions about matters that are inherently uncertain. • Amendments to the Accounting Standards Codification made by the Financial Accounting Standards Board (the “FASB”) or changes in accounting standards may adversely affect our reported revenues, profitability or financial position. • If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately and timely report our financial results. • Our reliance on certain members of our management team or Board of Directors, the loss of any one of which could adversely affect our business or the market price of our common stock. • Our reliance on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business. • Our business and results of operations have been, and our financial condition may be, impacted by the COVID-19 pandemic. Risks Related to Financing Our Business • Our dependency on external sources of capital, which may or may not be available on favorable terms, or at all. • • Adverse effects by the transition from LIBOR. Interest rate risk and our ability to manage or mitigate this risk effectively. Risks Related to Our Investment Strategy • We may not be able to successfully implement our investment strategy. • We expect to acquire new properties and this may create risks. • We are pursuing redevelopment opportunities and this creates risks to our Company. Risks Related to Our Status as a REIT • The failure to qualify as a REIT under the federal income tax laws would have adverse consequences to our stockholders. Uncertain tax matters may have a significant impact on the results of operations for any single fiscal year or interim period or may cause us to fail to qualify as a REIT. • The uncertainty regarding the U.S. federal income tax treatment of the cash that we might receive from cash settlement of a forward sale agreement under our ATM program could jeopardize our ability to meet the REIT qualification requirements. • A risk of changes in the tax law applicable to REITs. • U.S. federal tax reform legislation could affect REITs generally, our tenants, the markets in which we operate, the price of our common stock and our results of operations. • In order to preserve our REIT status, our charter limits the number of shares a person may own, which may discourage a takeover that could result in a premium price for our common stock or otherwise benefit our stockholders. 10 Risks Related to Ownership of Our Securities • Changes in market conditions could adversely affect the market price of our publicly traded common stock. • Changes in our dividend policy and the dividends we pay may be subject to significant volatility. • Our forward sale agreement under our ATM Program could result in substantial dilution to our earnings per share and return on equity or result in substantial cash payment obligations. • In case of our bankruptcy or insolvency, any forward sale agreement that is in effect under our ATM Program will automatically terminate, and we would not receive the expected proceeds. • Future issuances of equity securities could dilute the interest of holders of our equity securities. • Maryland law may discourage a third-party from acquiring us. Risks Related to Our Business and Operations We are subject to risks inherent in owning and leasing real estate. We are subject to varying degrees of risk generally related to leasing and owning real estate, many of which are beyond our control. In addition to general risks applicable to us, our risks include, among others: our liability as a lessee for long-term lease obligations regardless of our revenues; deterioration in national, regional and local economic and real estate market conditions; potential changes in supply of, or demand for, rental properties similar to ours; competition for tenants and declining rental rates; difficulty in selling or re-leasing properties on favorable terms or at all; impairments in our ability to collect rent or other payments due to us when they are due; increases in interest rates and adverse changes in the availability, cost and terms of financing; uninsured property liability; the impact of present or future environmental legislation and compliance with environmental laws; adverse changes in zoning laws and other regulations; acts of terrorism and war; acts of God; the unforeseen impacts of climate change, compliance with any future laws or regulations designed to prevent or mitigate the impacts of climate change, and any material costs related thereto; the potential risk of functional obsolescence of properties over time the need to periodically renovate and repair our properties; and physical or weather-related damage to our properties. Certain significant expenditures generally do not change in response to economic or other conditions, including: (i) debt service, (ii) real estate taxes, (iii) environmental remediation costs and (iv) operating and maintenance costs. The combination of variable revenue and relatively fixed expenditures may result, under certain market conditions, in reduced earnings and could have an adverse effect on our financial condition. Each of the factors listed above could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. In addition, real estate investments are relatively illiquid, which means that our ability to vary our portfolio of properties in response to changes in economic and other conditions may be limited. We are in a competitive business. The real estate industry is highly competitive. Where we own properties, we compete for tenants with a large number of real estate property owners and other companies that sublet properties. Our principal means of competition are rents we are able to charge in relation to the income producing potential of the location. In addition, we expect other major real estate investors, some with much greater financial resources or more experienced personnel than we have, will compete with us for attractive acquisition opportunities. These competitors include petroleum manufacturing, distributing and marketing companies, convenience store retailers, other REITs, public and private investment funds, and other individual and institutional investors. This competition has increased prices for properties we seek to acquire and may impair our ability to make suitable property acquisitions on favorable terms in the future. Our future cash flow is dependent on the performance of our tenants of their lease obligations, renewal of existing leases and either re-leasing or selling our properties. We are subject to risks that financial distress, default or bankruptcy of our tenants may lead to vacancy at our properties or disruption in rent receipts as a result of partial payment or nonpayment of rent or that expiring leases may not be renewed. Under unfavorable general economic conditions, there can be no assurance that our tenants’ level of sales and financial performance generally will not be adversely affected, which in turn could negatively impact our rental revenues. We are subject to risks that the terms governing renewal or re-leasing of our properties (including, compliance with numerous federal, state and local laws and regulations related to the protection of the environment, such as the remediation of contamination and the retirement and decommissioning or removal of long-lived assets, the cost of required renovations, or replacement of USTs and related equipment) may be less favorable than current lease terms. We are also subject to the risk that we may receive less net proceeds from the properties we sell as compared to their current carrying value or that the value of our properties may be adversely affected by unfavorable general economic conditions. Unfavorable general economic conditions may also negatively impact our ability to re-lease or sell our properties. Numerous properties compete 11 with our properties in attracting tenants to lease space. The number of available or competitive properties in a particular area could have a material adverse effect on our ability to lease or sell our properties and on the rents we are able to charge. In addition to the risk of disruption in rent receipts, we are subject to the risk of incurring real estate taxes, maintenance, environmental and other expenses at vacant properties. The financial distress, default or bankruptcy of our tenants may also lead to protracted and expensive processes for retaking control of our properties than would otherwise be the case, including, eviction or other legal proceedings related to or resulting from the tenant’s default. These risks are greater with respect to certain of our tenants who lease multiple properties from us. If a tenant files for bankruptcy protection it is possible that we would recover substantially less than the full value of our claims against the tenant. If (i) our tenants do not perform their lease obligations, (ii) we are unable to renew existing leases and promptly recapture and re-lease or sell our properties, (iii) lease terms upon renewal or re-leasing are less favorable than current or historical lease terms, (iv) the values of properties that we sell are adversely affected by market conditions, or (v) we incur significant costs or disruption related to or resulting from tenant financial distress, default or bankruptcy, then our cash flow could be significantly adversely affected. Significant number of our tenants depend on the same industry for their revenues. We derive significant portion of our revenues from leasing, primarily on a triple-net basis, and financing convenience store and gasoline station properties to tenants in the petroleum marketing industry. Accordingly, significant portion of our revenues depend on the economic success of the petroleum marketing industry, and any factors that adversely affect that industry, such as disruption in the supply of petroleum or a decrease in the demand for conventional motor fuels due to conservation, technological advancements in petroleum-fueled motor vehicles or an increase in the use of, and consumer demand for, alternative fuel, electric and battery-operated vehicles, or other “green technologies,” could have a material adverse effect on our business, financial condition and results of operations, liquidity, ability to pay dividends or stock price. Similarly, governmental regulations regarding climate change and the greenhouse gas emissions may accelerate these trends that could have a material adverse effect on our business, financial condition and results of operations, liquidity, ability to pay dividends or stock price. The success of participants in the petroleum marketing industry depends upon the sale of refined petroleum products at margins in excess of fixed and variable expenses. The petroleum marketing industry is highly competitive and volatile. Petroleum products are commodities, the prices of which depend on numerous factors that affect supply and demand. The prices paid by our tenants and other petroleum marketers for products are affected by global, national and regional factors. A large, rapid increase in wholesale petroleum prices would adversely affect the profitability and cash flows of our tenants if the increased cost of petroleum products could not be passed on to their customers or if automobile consumption of gasoline was to decline significantly. We cannot be certain as to how these factors will affect petroleum product prices or supply in the future, or how in particular they will affect our tenants. Because certain of our tenants are not rated and their financial information is not available to you, it may be difficult for our investors to determine their creditworthiness. The majority of our properties are leased to tenants who are not rated by any nationally recognized statistical rating organizations. In addition, our tenants’ financial information is not generally available to our investors. Additionally, many of our tenants are part of larger corporate organizations and we do not receive financial information for the other entities in those organizations. The financial distress of other affiliated companies or businesses in those organizations may negatively impact the ability or willingness of our tenant to perform its obligations under its lease with us. Because of the lack of financial information or credit ratings it is, therefore, difficult for our investors to assess the creditworthiness of our tenants and to determine the ability of our tenants to meet their obligations to us. It is possible that the assumptions and estimates we make after reviewing publicly and privately obtained information about our tenants are not accurate and that we may be required to increase reserves for bad debts, record allowances for deferred rent receivable or record additional expenses if our tenants are unable or unwilling to meet their obligations to us. We incur significant operating costs and, from time to time, may have significant liability accruals as a result of environmental laws and regulations, which costs and accruals could significantly increase, and reduce our profitability or have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment. Under certain environmental laws, a current or previous owner or operator of real estate may be liable for contamination resulting from the presence or discharge of hazardous or toxic substances or petroleum products at, on, or under, such property, and may be required to investigate and clean-up such contamination. Such laws typically impose liability and clean-up responsibility first on the party responsible for the contamination, but can also impose liability and clean-up responsibility on the owner and the current operator without regard to whether the owner or operator knew of or caused the presence of the contaminants, or the timing or cause of the contamination. Liability under such environmental laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility and the financial resources are available to perform the remediation. For example, liability may arise as a result of the historical use of a property or from the migration of contamination from adjacent or nearby properties. Any such contamination or liability may also reduce the value of the property. In addition, the owner or operator of 12 a property may be subject to claims by third-parties based on injury, damage and/or costs, including investigation and clean-up costs, resulting from environmental contamination present at or emanating from a property. We cannot predict what environmental legislation or regulations may be enacted in the future, or how existing laws or regulations will be administered or interpreted with respect to products or activities to which they have not previously been applied. Additionally, compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretation of existing laws, which may develop in the future, could have an adverse effect on our financial position, or that of our tenants, and could require substantial additional expenditures for future remediation. Accordingly, compliance with environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. The majority of the properties owned or controlled by us are leased as convenience store and gasoline station properties, and therefore may contain, or may have contained, USTs for the storage of petroleum products and other hazardous or toxic substances, which creates a potential for the release of such products or substances. Some of our properties are subject to regulations regarding the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Some of the properties may be adjacent to or near properties that have contained or currently contain USTs used to store petroleum products or other hazardous or toxic substances. In addition, certain of the properties are on, adjacent to, or near properties upon which others have engaged or may in the future engage in activities that may release petroleum products or other hazardous or toxic substances. There may be other environmental problems associated with our properties of which we are unaware. These problems may make it more difficult for us to re-lease or sell our properties on favorable terms, or at all. We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenant fails to pay them. The ultimate resolution of these matters could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases, shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant. We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation) during the first five years after the sale of the properties. In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a 13 lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to closure for preexisting unknown environmental contamination. We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation, and then discount them to present value. We adjust our environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of December 31, 2021, we had accrued a total of $47.6 million for our prospective environmental remediation obligations. This accrual consisted of (a) $11.4 million, which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36.2 million for future environmental liabilities related to preexisting unknown contamination. For additional information regarding pending environmental lawsuits and claims, and environmental remediation obligations and estimates, see “Item 3. Legal Proceedings”, “Environmental Matters” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 3 and 5 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental contingencies become more clearly defined and reasonably estimable. We cannot predict if state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices and if future environmental spending will continue to be eligible for reimbursement at historical recovery rates under these programs. As a result, our estimates in respect of recoveries from state UST remediation funds could change, which could adversely affect our accruals for environmental remediation liabilities. Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or adjustments to the amounts recorded, for environmental remediation liabilities. Additional environmental liabilities could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. We are defending pending lawsuits and claims and are subject to material losses. We are subject to various lawsuits and claims, including litigation related to environmental matters, such as those arising from leaking USTs, contamination of groundwater with methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as “MTBE”) and releases of motor fuel into the environment, and toxic tort claims. The ultimate resolution of certain matters cannot be predicted because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. Our ultimate liabilities resulting from the lawsuits and claims we face could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For additional information with respect to certain pending lawsuits and claims, see “Item 3. Legal Proceedings” and Note 3 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. We are subject to losses that may not be covered by insurance. We and our tenants carry insurance against certain risks and in such amounts as we believe are customary for businesses of our kind. However, as the costs and availability of insurance change, we may decide not to be covered against certain losses (such as certain environmental liabilities, earthquakes, hurricanes, floods and civil disorder) where, in the judgment of management, the insurance is not warranted due to cost or availability of coverage or the remoteness of perceived risk. Furthermore, there are certain types of losses, such as losses resulting from wars, terrorism or certain acts of God, that generally are not insured because they are either uninsurable or not economically insurable. There is no assurance that the existing insurance coverages are or will be sufficient to cover actual losses incurred. The destruction of, or significant damage to, or significant liabilities arising out of conditions at, our properties due to an uninsured loss would result in an economic loss and could result in us losing both our investment in, and anticipated profits from, such properties. When a loss is insured, the coverage may be insufficient in amount or duration, or a lessee’s customers may be lost, such that the lessee cannot resume its business after the loss at prior levels or at all, resulting in reduced rent or a default under its lease. Any such loss relating to a large number of properties could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. 14 A significant portion of our properties are concentrated in the Northeast and Mid-Atlantic regions of the United States, and adverse conditions in those regions, in particular, could negatively impact our operations. A significant portion of the properties we own and lease are located in the Northeast and Mid-Atlantic regions of the United States and, as of December 31, 2021, 38.7% of our properties are concentrated in three states (New York, Massachusetts and Connecticut). Because of the concentration of our properties in those regions, in the event of adverse economic conditions in those regions, we would likely experience higher risk of default on payment of rent to us than if our properties were more geographically diversified. Additionally, the rents on our properties may be subject to a greater risk of default than other properties in the event of adverse economic, political or business developments, natural disasters or severe weather that may affect the Northeast or Mid- Atlantic regions of the United States and the ability of our lessees to make rent payments. This lack of geographical diversification could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Property taxes on our properties may increase without notice. Each of the properties we own or lease is subject to real property taxes. The leases for certain of the properties that we lease from third-parties obligate us to pay real property taxes with regard to those properties. The real property taxes on our properties and any other properties that we acquire or lease in the future may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities. To the extent that our tenants are unable or unwilling to pay such increase in accordance with their leases, our net operating expenses may increase. Our business operations may not generate sufficient cash for distributions or debt service. There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay dividends on our common stock, to pay our indebtedness or to fund our other liquidity needs. We may not be able to repay or refinance existing indebtedness on favorable terms, which could force us to dispose of properties on disadvantageous terms (which may also result in losses) or accept financing on unfavorable terms. Adverse developments in general business, economic or political conditions could have a material adverse effect on us. Adverse developments in general business and economic conditions, including through recession, downturn or otherwise, either in the economy generally or in those regions in which a large portion of our business is conducted, could have a material adverse effect on us and significantly increase certain of the risks we are subject to. Among other effects, adverse economic conditions could depress real estate values, impact our ability to re-lease or sell our properties and have an adverse effect on our tenants’ level of sales and financial performance generally. As our revenues are substantially dependent on the economic success of our tenants, any factors that adversely impact our tenants could also have a material adverse effect on our business, financial condition and results of operations, liquidity, ability to pay dividends or stock price. Terrorist attacks and other acts of violence or war may affect the market on which our common stock trades, the markets in which we operate, our operations and our results of operations. Terrorist attacks or other acts of violence or war could negatively affect our business or the businesses of our tenants. These attacks may directly or indirectly impact the physical facilities, networks or the business or the financial condition of us or those of our tenants, vendors or financial institutions with which we have a relationship or conduct business. The consequences of armed conflicts are unpredictable, and we may not be able to foresee events that could have a material adverse effect on us. More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. Terrorist attacks also could be a factor resulting in, or which could exacerbate, an economic recession in the United States or abroad. Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. We are exposed to counterparty risk and there can be no assurances that we will effectively manage or mitigate this risk. We regularly interact with counterparties in various industries. The types of counterparties most common to our transactions and agreements include, but are not limited to, landlords, tenants, vendors and lenders. We also enter into agreements to acquire and sell properties which allocate responsibility for certain costs to the counterparty. Our most significant counterparties include, but are not limited to, the members of the bank syndicate related to our Second Restated Credit Agreement, the lenders that are the counterparties to our senior unsecured notes and our major tenants from whom we derive a significant amount of rental revenue. The default, insolvency or other inability or unwillingness of a significant counterparty to perform its obligations under an agreement, including, without limitation, as a result of the rejection of an agreement in bankruptcy proceedings, is likely to have a material adverse effect on us. 15 As of December 31, 2021, we leased 150 properties in three separate unitary leases and two stand-alone leases to subsidiaries of Global. In the aggregate, our leases with subsidiaries of Global represented 16% of our total revenues for each of the years ended December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Global are guaranteed by the parent company. As of December 31, 2021, we leased 128 properties in four separate unitary leases to subsidiaries of Arko. In the aggregate, our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the years ended December 31, 2021 and 2020. All of our unitary leases with subsidiaries of Arko are guaranteed by the parent company. As of December 31, 2021, we leased 78 properties in three separate unitary leases and one stand-alone lease to United Oil. In the aggregate, our leases with United Oil represented 11% and 12% of our total revenues for each of the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, we leased 69 properties in two separate unitary leases to subsidiaries of Chestnut. In the aggregate, our leases with subsidiaries of Chestnut represented 9% and 10% of our total revenues for each of the years ended December 31, 2021 and 2020, respectively. The largest of these unitary leases, covering 52 of our properties, is guaranteed by the parent company, its principals and numerous Chestnut affiliates. We may also undertake additional transactions with these or other existing tenants, which would further concentrate our sources of rental revenues. Many of our tenants, including those noted above, are part of larger corporate organizations and the financial distress of one subsidiary or other affiliated companies or businesses in those organizations may negatively impact the ability or willingness of our tenant to perform its obligations under its lease with us. The failure of a major tenant or their default in their rental and other obligations to us is likely to have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Inflation may adversely affect our financial condition and results of operations. Although inflation has not materially impacted our results of operations in the recent past, increased inflation could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations. During times when inflation is greater than increases in rent, as provided for in our leases, rent increases may not keep up with the rate of inflation. Likewise, even though our triple-net leases reduce our exposure to rising property expenses due to inflation, substantial inflationary pressures and increased costs may have an adverse impact on our tenants if increases in their operating expenses exceed increases in revenue, which may adversely affect our tenants’ ability to pay rent. Also, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense of our borrowings. Our exposure to increases in interest rates in the short term is limited to our variable-rate borrowings, which consist of borrowings under our Revolving Facility. Additionally, inflationary pricing may have a negative effect on the real estate acquisitions and construction costs necessary to complete our development and redevelopment projects, including, but not limited to, costs of construction materials, labor, and services from third-party contractors and suppliers. Higher acquisition and construction costs could adversely impact our net investments in real estate and expected yields on our development and redevelopment projects, which may make otherwise lucrative investment opportunities less profitable to us. As a result, our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time. Our assets may be subject to impairment charges. We periodically evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on GAAP, and includes a variety of factors such as market conditions, the accumulation of asset retirement costs due to changes in estimates associated with our estimated environmental liabilities, the status of significant leases, the financial condition of major tenants and other assumptions and factors that could affect the cash flow from or fair value of our properties. During the years ended December 31, 2021 and 2020, we incurred $4.4 million and $4.3 million, respectively, of impairment charges. We may be required to take similar impairment charges, which could affect the implementation of our current business strategy and have a material adverse effect on our financial condition and results of operations. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments and assumptions about matters that are inherently uncertain. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make particularly subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions. We cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated financial statements. Estimates, judgments and assumptions underlying our consolidated financial statements include, but are not limited to, receivables and related reserves, deferred rent receivable, income under direct financing leases, asset retirement obligations (including environmental remediation obligations and future environmental liabilities for pre-existing unknown environmental contamination), real estate, depreciation and amortization, carrying value of our properties, impairment of long-lived assets, litigation, 16 accrued liabilities, income taxes and allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed. If our accounting policies, methods, judgments, assumptions, estimates and allocations prove to be incorrect, or if circumstances change, our business, financial condition, revenues, operating expense, results of operations, liquidity, ability to pay dividends or stock price may be materially adversely affected. Amendments to the Accounting Standards Codification made by the Financial Accounting Standards Board (the “FASB”) or changes in accounting standards issued by other standard-setting bodies may adversely affect our reported revenues, profitability or financial position. Our consolidated financial statements are subject to the application of Generally Accepted Accounting Principles (“GAAP”) in accordance with the Accounting Standards Codification, which is periodically amended by the FASB. The application of GAAP is also subject to varying interpretations over time. Accordingly, we are required to adopt amendments to the Accounting Standards Codification or comply with revised interpretations that are issued from time-to-time by recognized authoritative bodies, including the FASB and the SEC. Those changes could adversely affect our reported revenues, profitability or financial position. If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately and timely report our financial results. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports, effectively prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. As a result of material weaknesses or significant deficiencies that may be identified in our internal control over financial reporting in the future, we may also identify certain deficiencies in some of our disclosure controls and procedures that we believe require remediation. If we or our independent registered public accounting firm discover any such weaknesses or deficiencies, we will make efforts to further improve our internal control over financial reporting controls. However, there is no assurance that we will be successful. Any failure to maintain effective controls or timely effect any necessary improvement of our internal control over financial reporting controls could harm operating results or cause us to fail to meet our reporting obligations, which could affect the listing of our common stock on the NYSE. Ineffective internal control over financial reporting and disclosure controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the per share trading price of our common stock. The loss of certain members of our management team or Board of Directors could adversely affect our business or the market price of our common stock. Our future success and ability to implement our business and investment strategy depends, in part, on our ability to attract and retain key management personnel and directors, and on the continued contributions of such persons, each of whom may be difficult to replace. As a REIT, we employ only 31 employees and have a cost-effective management structure. We do not have any employment agreements with any of our executives. In the event of the loss of key management personnel or directors, or upon unexpected death, disability or retirement, we may not be able to find replacements with comparable skill, ability and industry expertise, which could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Additionally, certain of our directors beneficially own more than 5% of the outstanding shares of our common stock. If any of these directors cease to be a director of the Company and they or their estate sell a significant portion of such holdings into the public market, it could adversely affect the market price of our common stock. We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business. Additionally, our failure to comply with applicable privacy, data security or protection or cybersecurity laws could adversely affect our business. We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including financial transactions and maintenance of records, which may include personal identifying information of tenants and lease data. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential tenant information, such as individually identifiable information relating to financial accounts. Although we have taken steps to protect the security of the data maintained in our information systems, it is possible that our security measures will not be able to prevent the systems’ improper functioning, or the improper disclosure of personally identifiable information such as in the event of cyberattacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, whether of our systems or those of our vendors or other third parties who hold or have access to our information, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure by us, or our vendors or other third parties who hold or have access to our information to 17 maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could materially and adversely affect us. Governments are continuing to focus on privacy, cybersecurity, data protection and data security and it is possible that new privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business. Any significant change to applicable laws, regulations, or industry practices regarding our employees’ and users’ data could require us to modify our business, services and products features, possibly in a material manner, and may limit our ability to develop new products, services, and features. Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs. Our business and results of operations have been, and our financial condition may be, impacted by the COVID-19 pandemic and such impact could be materially adverse. The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption. The extent to which the COVID-19 pandemic impacts our business, operations and financial results is uncertain, and will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and scope of the pandemic; governmental, business and individual actions taken in response to the pandemic and the impact of those actions on global economic activity; the actions taken in response to economic disruption; the reduced economic activity, if not closures from time to time of our tenants’ facilities, may impact our tenants' businesses, financial condition and liquidity, and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations; general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties; the financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our Second Restated Credit Agreement and our senior unsecured notes and result in a default and potentially an acceleration of indebtedness, which non- compliance could negatively impact our ability to make additional borrowings under our Revolving Facility and pay dividends; and a deterioration in our or our tenants’ ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants’ efficient operations could adversely affect our operations and those of our tenants. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our performance, financial condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in our Annual Report on Form 10- K for the year ended December 31, 2021, should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic. Risks Related to Financing Our Business We are dependent on external sources of capital which may not be available on favorable terms, or at all. We are dependent on external sources of capital to maintain our status as a REIT and must distribute to our stockholders each year at least 90% of our net taxable income, excluding any net capital gain. Because of these distribution requirements, it is not likely that we will be able to fund all future capital needs, including acquisitions, from income from operations. Therefore, we will have to continue to rely on third-party sources of capital, which may or may not be available on favorable terms, or at all. We may need to access the capital markets in order to execute future significant acquisitions. There can be no assurance that sources of capital will be available to us on favorable terms, or at all. Our principal sources of liquidity are the cash flows from our operations, funds available under our $300.0 million senior unsecured credit agreement (as amended, the “Second Restated Credit Agreement”), with a group of commercial banks led by Bank of America, N.A., proceeds from the sale of shares of our common stock through offerings, from time to time, under our at-the-market program (“ATM Program”,) pursuant to which we may also sell shares of common stock under forward sale agreements and available cash and cash equivalents. Pursuant to the Second Restated Credit Agreement, we (i) extended the maturity date of the Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the Revolving Facility and (iii) amended certain financial covenants and other provisions. The Second Restated Credit Agreement provides for the Revolving Facility in an aggregate principal amount of $300,000,000 and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300,000,000, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under the terms of the Revolving Facility. We have also issued $525.0 million of senior unsecured notes. For additional information, see “Credit Agreement” and “Senior Unsecured Notes” in Note 4 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. The Second Restated Credit Agreement and our senior unsecured notes contain customary financial covenants such as leverage, coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur 18 additional debt or pay dividends. The Second Restated Credit Agreement and our senior unsecured notes also contain customary events of default, including cross defaults to each other, change of control and failure to maintain REIT status (provided that the senior unsecured notes require a mandatory offer to prepay the notes upon a change in control in lieu of a change of control event of default). Our ability to meet the terms of the agreements is dependent upon our continued ability to meet certain criteria, as further described in Note 4 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K, the performance of our tenants and the other risks described in this section. If we are not in compliance with one or more of our covenants, which could result in an event of default under our Second Restated Credit Agreement or our senior unsecured notes, there can be no assurance that our lenders would waive such non-compliance. This could have a material adverse effect on our business, financial condition, results of operation, liquidity, ability to pay dividends or stock price. Under our ATM Program, we may issue and sell shares of our common stock with an aggregate sales price of up to $250.0 million through a consortium of banks acting as agents. Sales of shares of our common stock under our ATM Program may be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act of 1933, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent. Sales of shares of our common stock under our ATM Program, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions and the trading price of our common stock. Our agents are not required to sell any specific number or dollar amount of our common stock, but each agent will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulation to sell shares designated by us in accordance with the terms of the distribution agreement with our agents. The net proceeds we receive will be the gross proceeds received from such sales less the commissions and any other costs we may incur in issuing the shares of our common stock. In connection with the expansion of the ATM Program in 2021, we may also sell shares of common stock under forward sale agreements. The use of a forward sale agreement would allow us to lock in a price on the sale of shares of common stock at the time the agreement is executed, but defer receiving the proceeds from the sale until a later date. We may use a portion of the net proceeds from any of such sales to reduce our outstanding indebtedness, including borrowings under our Revolving Facility. The Revolving Credit Facility includes lenders who are affiliates of our agents and may be affiliates of our forward sellers and/or forward purchasers. As a result, a portion of the net proceeds from any sale of shares of our common stock under our ATM Program that is used to repay amounts outstanding under our Revolving Credit Facility will be received by these affiliates. Because an affiliate may receive a portion of the net proceeds from any of these sales, each of our agents may have an interest in these sales beyond the sales commission it will receive. This could result in a conflict of interest and cause such agents to act in a manner that is not in the best interests of us or our investors in connection with any sale of shares of our common stock under our ATM Program. Our access to third-party sources of capital depends upon a number of factors including general market conditions, the market’s perception of our growth potential, financial stability, our current and potential future earnings and cash distributions, covenants and limitations imposed under our Second Restated Credit Agreement and our senior unsecured notes, and the market price of our common stock. We are exposed to interest rate risk and there can be no assurances that we will manage or mitigate this risk effectively. We are exposed to interest rate risk, primarily as a result of our Second Restated Credit Agreement. Borrowings under our Second Restated Credit Agreement bear interest at a floating rate. Accordingly, an increase in interest rates will increase the amount of interest we must pay under our Second Restated Credit Agreement. Our interest rate risk may materially change in the future if we increase our borrowings under the Second Restated Credit Agreement or amend our Second Restated Credit Agreement or our senior unsecured notes, seek other sources of debt or equity capital or refinance our outstanding indebtedness. A significant increase in interest rates could also make it more difficult to find alternative financing on desirable terms. For additional information with respect to interest rate risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-K. We may be adversely affected by the transition from LIBOR. On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after the end of 2021. The U.S. Federal Reserve Board and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (“ARRC”), a steering committee comprised of large U.S. financial institutions, to identify an alternative reference rate. ARRC identified the Secured Overnight Financing Rate (“SOFR”), calculated by reference to short-term repurchase agreements backed by U.S. Treasury securities, as the recommended alternative reference rate for USD-LIBOR in derivative and other financial contracts and proposed a paced transition plan to transition USD-LIBOR to SOFR. The first publication of SOFR was released by the Federal Reserve Bank of New York in April 2018. In November 2020, the ICE Benchmark Administration Limited (the administrator of LIBOR) announced that it would consult on its intention to cease the publication of the one-week and two-month USD-LIBOR tenors only on December 31, 2021 and all other USD-LIBOR tenors on June 30, 2023. On March 5, 2021, the IBA issued a statement, based on such consultation, 19 announcing that the IBA shall cease publication of the respective USD-LIBOR tenors immediately after the foregoing dates and the FCA issued a statement that it has no intention to use its proposed powers to compel the IBA to publish any of the foregoing USD- LIBOR tenors and that such USD-LIBOR tenors shall no longer be representative after such dates. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a future date. As of December 31, 2021, we had $60,000,000 of borrowings based on LIBOR. The consequences of these developments with respect to LIBOR cannot be entirely predicted and span multiple future periods but could result in an increase in the cost of our variable rate debt, which may be detrimental to our financial position or operating results. Risks Related to Our Investment Strategy We may not be able to successfully implement our investment strategy. We may not be able to successfully implement our investment strategy. We cannot assure that our portfolio of properties will expand at all, or if it will expand at any specified rate or to any specified size. As part of our overall growth strategy, we regularly review acquisition, financing and redevelopment opportunities, and we expect to continue to pursue investments that we believe will benefit our financial performance. We cannot assure that investment opportunities which meet our investment criteria will be available. Pursuing our investment opportunities may result in additional debt or new equity issuances, that may initially be dilutive to our net income, and such investments may not perform as we expect or produce the returns that we anticipate (including, without limitation, as a result of tenant bankruptcies, tenant concessions, our inability to collect rents and higher than anticipated operating expenses). Further, we may not be able to successfully integrate investments into our existing portfolio without operating disruptions or unanticipated costs. To the extent that our current sources of liquidity are not sufficient to fund such investments, we will require other sources of capital, which may or may not be available on favorable terms or at all. Additionally, to the extent that we increase the size of our portfolio, we may not be able to adapt our management, administrative, accounting and operational systems, or hire and retain sufficient operational staff to integrate investments into our portfolio or manage any future investments without operating disruptions or unanticipated costs. Moreover, our continued growth will require increased investment in management personnel, professional fees, other personnel, financial and management systems and controls and facilities, which will result in additional operating expenses. Under the circumstances described above, our results of operations, financial condition and growth prospects may be materially adversely affected. We expect to acquire new properties and this may create risks. We may acquire properties when we believe that an acquisition matches our business and investment strategies. These properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is possible that the operating performance of these properties may decline after we acquire them, or that they may not perform as expected. Further, if financed by additional debt or new equity issuances, our acquisition of properties may result in stockholder dilution. Our acquisition of properties will expose us to the liabilities of those properties, some of which we may not be aware of at the time of such acquisitions. We face competition in pursuing these acquisitions and we may not succeed in leasing acquired properties at rents sufficient to cover the costs of their acquisition and operations. Newly acquired properties may require significant management attention that would otherwise be devoted to our ongoing business. We may not succeed in consummating desired acquisitions. Consequences arising from or in connection with any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. We are pursuing redevelopment opportunities and this creates risks to our Company. We have commenced a program to redevelop certain of our properties, and to recapture select properties from our net lease portfolio in order to redevelop such properties, for either a new convenience and gasoline use or for alternative single tenant net lease retail uses. The success at each stage of our redevelopment program is dependent on numerous factors and risks, including our ability to identify and extract qualified sites from our portfolio and successfully prepare and market them for alternative uses, and project development issues, including those relating to planning, zoning, licensing, permitting, third party and governmental authorizations, changes in local market conditions, increases in construction costs, the availability and cost of financing, and issues arising from possible discovery of new environmental contamination and the need to conduct environmental remediation. Occupancy rates and rents at any particular redeveloped property may fail to meet our original expectations for reasons beyond our control, including changes in market and economic conditions and the development by competitors of competing properties. We could experience increased and unexpected costs or significant delays or abandonment of some or all of these redevelopment opportunities. For any of the above-described reasons, and others, we may determine to abandon opportunities that we have already begun to explore or with respect to which we have commenced redevelopment efforts and, as a result, we may fail to recover expenses already incurred. We cannot assure you that we will be able to successfully redevelop and lease any of our identified opportunities or that our overall 20 redevelopment program will be successful. Consequences arising from or in connection with any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. Risks Related to Our Status as a REIT Failure to qualify as a REIT under the federal income tax laws would have adverse consequences to our stockholders. Uncertain tax matters may have a significant impact on the results of operations for any single fiscal year or interim period or may cause us to fail to qualify as a REIT. We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. To qualify for taxation as a REIT, we must, among other requirements such as those related to the composition of our assets and gross income, distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a corresponding receipt of cash. Accordingly, we generally will not be subject to federal income tax on qualifying REIT income, provided that distributions to our stockholders equal at least the amount of our taxable income as defined under the Internal Revenue Code. But, we may have to borrow money or sell assets to satisfy such distribution requirements even if the then prevailing market conditions are not favorable for these borrowings. Many of the REIT requirements are highly technical and complex. If we were to fail to meet the requirements, we may be subject to federal income tax, excise taxes, penalties and interest or we may have to pay a deficiency dividend. We may have to borrow money or sell assets to pay such a deficiency dividend. We cannot guarantee that we will continue to qualify in the future as a REIT. We cannot give any assurance that new legislation, regulations, administrative interpretations or court decisions will not significantly change the requirements relating to our qualification. If we fail to qualify as a REIT, we would not be allowed a deduction for distributions to stockholders in computing our taxable income and will again be subject to federal income tax at regular corporate rates, we could be subject to the federal alternative minimum tax for taxable years beginning before 2019, we could be required to pay significant income taxes and we would have less money available for our operations and distributions to stockholders. This would likely have a significant adverse effect on the value of our securities. We could also be precluded from treatment as a REIT for four taxable years following the year in which we lost the qualification, and all distributions to stockholders would be taxable as regular corporate dividends to the extent of our current and accumulated earnings and profits. Loss of our REIT status could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. The U.S. federal income tax treatment of the cash that we might receive from cash settlement of a forward sale agreement under our ATM program is unclear and could jeopardize our ability to meet the REIT qualification requirements. In the event that we elect to settle any forward sale agreement for cash and the settlement price is below the applicable forward sale price, we would be entitled to receive a cash payment from the relevant Forward Purchaser. Under Section 1032 of the Code, generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract,” as defined in the Code by reference to the Exchange Act. Although we believe that any amount received by us in exchange for our stock would qualify for the exemption under Section 1032 of the Code, because it is not entirely clear whether a forward sale agreement qualifies as a “securities futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In the event that we recognize a significant gain from the cash settlement of a forward sale agreement, we might not be able to satisfy the gross income requirements applicable to REITs under the Code. In that case, we may be able to rely upon the relief provisions under the Code in order to avoid the loss of our REIT status. Even if the relief provisions apply, we will be subject to a 100% tax on the greater of (i) the excess of 75% of our gross income (excluding gross income from prohibited transactions) over the amount of such income attributable to sources that qualify under the 75% test or (ii) the excess of 95% of our gross income (excluding gross income from prohibited transactions) over the amount of such gross income attributable to sources that qualify under the 95% test, multiplied in either case by a fraction intended to reflect our profitability. In the event that these relief provisions were not available, we could lose our REIT status under the Code. There is a risk of changes in the tax law applicable to real estate investment trusts. Because the IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. The Tax Cuts and Jobs Act of 2017, or the TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their shareholders. Changes made by the TCJA and the CARES Act that could affect us and our shareholders include: • temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate has been reduced from 39.6% to 37% for taxable years beginning after December 31, 2017 and before January 1, 2026; 21 • • • • • • permanently eliminating the progressive corporate tax rate structure, with a maximum corporate tax rate of 35%, and replacing it with a flat corporate tax rate of 21%; permitting a deduction for certain pass-through business income, including dividends received by our shareholders from us that are not designated by us as capital gain dividends or qualified dividend income, which will generally allow individuals, trusts, and estates to deduct up to 20% of such amounts for taxable years beginning after December 31, 2017 and before January 1, 2026; reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; limiting our deduction for net operating losses to 80% of REIT taxable income (prior to the application of the dividends paid deduction) for taxable years beginning after December 31, 2020; generally limiting the deduction for net business interest expense in excess of a specified percentage (50% for taxable years beginning in 2019 and 2020 and 30% for subsequent taxable years) of a business’s adjusted taxable income except for taxpayers that engage in certain real estate businesses and elect out of this rule (provided that such electing taxpayers must use an alternative depreciation system for certain property); and eliminating the corporate alternative minimum tax. You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an investment in our securities. U.S. federal tax reform legislation could affect REITs generally, our tenants, the markets in which we operate, the price of our common stock and our results of operations, in ways, both positively and negatively, that are difficult to predict. Certain federal tax legislation more specifically described above (the “2017 Legislation”) included significant changes to corporate and individual tax rates and the calculation of taxes. As a REIT, we are generally not required to pay federal taxes otherwise applicable to regular corporations if we distribute all of our income and comply with the various tax rules governing REITs. Stockholders, however, are generally required to pay taxes on REIT dividends. The 2017 Legislation changed the way in which dividends paid on our stock are taxed by the holder of that stock and could impact the price of our common stock or how stockholders and potential investors view an investment in REITs. In addition, while certain elements of the 2017 Legislation do not impact us directly as a REIT, they could impact our tenants and the markets in which we operate in ways, both positive and negative, that are difficult to predict. Prospective stockholders are urged to consult with their tax advisors with respect to the 2017 Legislation and any other regulatory or administrative developments and proposals and the potential effects thereof on an investment in our common stock. In order to preserve our REIT status, our charter limits the number of shares a person may own, which may discourage a takeover that could result in a premium price for our common stock or otherwise benefit our stockholders. Our charter, with certain exceptions, authorizes our Board of Directors to take such actions as are necessary and desirable to preserve our qualification as a REIT for federal income tax purposes. Unless exempted by our Board of Directors, no person may (i) own, or be deemed to own by virtue of certain constructive ownership provisions of the Internal Revenue Code, in excess of 5.0% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of our common stock or (ii) own, or be deemed to own by virtue of certain other constructive ownership provisions of the Internal Revenue Code, in excess of 9.9% (by value or number of shares, whichever is more restrictive) of the outstanding shares of our common stock, which may discourage large investors from purchasing our stock. This restriction may have the effect of delaying, deferring or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for our common stock or otherwise be in the best interest of our stockholders. Risks Related to Ownership of Our Securities Changes in market conditions could adversely affect the market price of our publicly traded common stock. As with other publicly traded securities, the market price of our publicly traded common stock depends on various market conditions, which may change from time-to-time. Among the market conditions that may affect the market price of our publicly traded common stock are the following: our financial condition and performance and that of our significant tenants; the market’s perception of our growth potential and potential future earnings; the reputation of REITs generally and the reputation of REITs with portfolios similar to us; the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies); an increase in market interest rates, which may lead prospective investors to demand a higher 22 distribution rate in relation to the price paid for publicly traded securities; the extent of institutional investor interest in us; and general economic and financial market conditions. We may change our dividend policy and the dividends we pay may be subject to significant volatility. The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend upon such factors as the Board of Directors deems relevant and the dividend paid may vary from expected amounts. Any change in our dividend policy could adversely affect our business and the market price of our common stock. In addition, each of the Second Restated Credit Agreement and senior unsecured notes prohibit the payments of dividends during certain events of default. No assurance can be given that our financial performance in the future will permit our payment of any dividends or that the amount of dividends we pay, if any, will not fluctuate significantly. Under the Maryland General Corporation Law (“MGCL”), our ability to pay dividends would be restricted if, after payment of the dividend, (i) we would not be able to pay indebtedness as it becomes due in the usual course of business or (ii) our total assets would be less than the sum of our liabilities plus the amount that would be needed, if we were to be dissolved, to satisfy the rights of any stockholders with liquidation preferences. There currently are no stockholders with liquidation preferences. No assurance can be given that our financial performance in the future will permit our payment of any dividends. Each of the Second Restated Credit Agreement our senior unsecured notes contain customary financial covenants such as availability, leverage and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. As a result of the factors described above, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, stock price and ability to pay dividends. Future issuances of equity securities could dilute the interest of holders of our equity securities. Our future growth depends upon our ability to raise additional capital. If we were to raise additional capital through the issuance of equity securities, such issuance, the receipt of the net proceeds thereof and the use of such proceeds may have a dilutive effect on our expected earnings per share, funds from operations per share and adjusted funds from operations per share. The actual amount of such dilution cannot be determined at this time and will be based on numerous factors. Additionally, we are not restricted from issuing additional shares of our common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or preferred stock or any substantially similar securities in the future. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after an offering or the perception that such sales could occur. Provisions contained in a forward sale agreement under our ATM Program could result in substantial dilution to our earnings per share and return on equity or result in substantial cash payment obligations. If we enter into one or more forward sale agreements in connection with the ATM Program, the relevant Forward Purchaser (as defined in such forward sale agreement) will have the right to accelerate its forward sale agreement (with respect to all or any portion of the transaction under such forward sale agreement that the Forward Purchaser determines is affected by an event described below) and require us to physically settle on a date specified by such Forward Purchaser if: • in such Forward Purchaser’s good faith, commercially reasonable judgment, it or its affiliate (x) is unable to hedge its exposure under such forward sale agreement because an insufficient number of shares of our common stock have been made available for borrowing by securities lenders or (y) would incur a stock loan cost in excess of a specified threshold to hedge its exposure under such forward sale agreement; • we declare any dividend, issue or distribution on shares of our common stock (a) payable in cash in excess of specified amounts (unless it is an extraordinary dividend), (b) payable in securities of another company that we acquire or own (directly or indirectly) as a result of a spin-off or similar transaction, or (c) payable in any other type of securities (other than shares of our common stock), rights, warrants or other assets for payment at less than the prevailing market price; • • • certain ownership thresholds applicable to such Forward Purchaser and its affiliates are exceeded; an event is announced that if consummated would result in a specified extraordinary event (including certain mergers or tender offers, as well as certain events involving our nationalization, or insolvency, or a delisting of shares of our common stock) or the occurrence of a change in law under such forward sale agreement; or certain other events of default or termination events occur, including, among others, any material misrepresentation made in connection with such forward sale agreement (each as more fully described in each forward sale agreement). A Forward Purchaser’s decision to exercise its right to accelerate the physical settlement of any forward sale agreement and require us to physically settle on a date specified by such Forward Purchaser will be made irrespective of our interests, including our 23 need for capital. In such cases, we could be required to issue and deliver shares of shares of our common stock under the physical settlement provisions of the applicable forward sale agreement, irrespective of our capital needs, which would result in dilution to our earnings per share and return on equity. We expect that settlement of any forward sale agreement will generally occur no later than the date specified in the particular forward sale agreement, which will be no earlier than three months or later than two years following the trade date of that forward sale agreement. However, any forward sale agreement may be settled earlier than that specified date in whole or in part at our option. Subject to certain conditions, we have the right to elect physical, cash or net share settlement under each forward sale agreement. We intend to physically settle each forward sale agreement by delivery of shares of our common stock. However, we may elect to cash settle or net share settle such forward sale agreement. Delivery of shares of our common stock upon physical settlement (or, if we elect net share settlement of a particular forward sale agreement, upon such settlement to the extent we are obligated to deliver shares of our common stock) will result in dilution to our earnings per share and return on equity. If we elect cash settlement or net share settlement with respect to all or a portion of the shares of common stock underlying a particular forward sale agreement, we expect the applicable Forward Purchaser (or an affiliate thereof) to purchase a number of shares of our common stock in secondary market transactions over an unwind period to: • • return shares of our common stock to securities lenders in order to unwind such Forward Purchaser’s hedge (after taking into consideration any shares of our common stock to be delivered by us to such Forward Purchaser, in the case of net share settlement); and if applicable, in the case of net share settlement, deliver shares of our common stock to us to the extent required in settlement of such forward sale agreement. The purchase of shares of our common stock in connection with a Forward Purchaser or its affiliate unwinding such Forward Purchaser’s hedge positions could cause the price of shares of our common stock to increase over such time (or prevent a decrease over such time), thereby increasing the amount of cash we would owe to such Forward Purchaser (or decreasing the amount of cash that such Forward Purchaser would owe to us) upon a cash settlement of the relevant forward sale agreement or increasing the number of shares of our common stock we would deliver to such Forward Purchaser (or decreasing the number of shares of our common stock that such Forward Purchaser would deliver to us) upon net share settlement of the relevant forward sale agreement. The forward sale price that we expect to receive upon physical settlement of a particular forward sale agreement will be subject to adjustment on a daily basis based on a floating interest rate factor equal to the overnight bank rate less a spread and will be decreased based on amounts related to expected dividends on shares of our common stock during the term of the applicable forward sale agreement. If the overnight bank rate is less than the spread for a particular forward sale agreement on any day, the interest factor will result in a daily reduction of the applicable forward sale price. If the volume-weighted average price at which a particular Forward Purchaser (or its affiliate) is able to purchase (or is deemed able to purchase) shares during the applicable unwind period under a particular forward sale agreement is above the relevant forward sale price, in the case of cash settlement, we would pay the relevant Forward Purchaser under such forward sale agreement an amount in cash equal to the difference or, in the case of net share settlement, we would deliver to such Forward Purchaser a number of shares of our common stock having a value equal to the difference. Thus, we could be responsible for a potentially substantial cash payment in the case of cash settlement. If the volume-weighted average price at which a particular Forward Purchaser (or its affiliate) is able to purchase (or is deemed able to purchase) shares during the applicable unwind period under that particular forward sale agreement is below the relevant forward sale price, in the case of cash settlement, we would be paid the difference in cash by the relevant Forward Purchaser under that particular forward sale agreement or, in the case of net share settlement, we would receive from such Forward Purchaser a number of shares of our common stock having a value equal to the difference. In case of our bankruptcy or insolvency, any forward sale agreement under our ATM Program that is in effect will automatically terminate, and we would not receive the expected proceeds from any forward sales of shares of our common stock. If we or a regulatory authority with jurisdiction over us institutes, or we consent to, a proceeding seeking a judgment in bankruptcy or insolvency or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or we or a regulatory authority with jurisdiction over us presents a petition for our winding-up or liquidation, or we consent to such a petition, any forward sale agreement that is then in effect will automatically terminate. If any such forward sale agreement so terminates under these circumstances, we would not be obligated to deliver to the relevant Forward Purchaser any shares of common stock not previously delivered, and the relevant Forward Purchaser would be discharged from its obligation to pay the applicable forward sale price per share in respect of any shares of common stock not previously settled under the applicable forward sale agreement. Therefore, to the extent that there are any shares of common stock with respect to which any forward sale agreement has not been settled at the time of the commencement of any such bankruptcy or insolvency proceedings, we would not receive the relevant forward sale price per share in respect of those shares of common stock. 24 Maryland law may discourage a third-party from acquiring us. We are subject to the provisions of the Maryland Business Combination Act (the “Business Combination Act”) which prohibits transactions between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Generally, pursuant to the Business Combination Act, an “interested stockholder” is a person who, together with affiliates and associates, beneficially owns, directly or indirectly, 10% or more of a Maryland corporation’s voting stock. These provisions could have the effect of delaying, preventing or deterring a change in control of our Company or reducing the price that certain investors might be willing to pay in the future for shares of our capital stock. Additionally, the Maryland Control Share Acquisition Act may deny voting rights to shares involved in an acquisition of one-tenth or more of the voting stock of a Maryland corporation. In our charter and bylaws, we have elected not to have the Maryland Control Share Acquisition Act apply to any acquisition by any person of shares of stock of our Company. However, in the case of the control share acquisition statute, our Board of Directors may opt to make this statute applicable to us at any time by amending our bylaws, and may do so on a retroactive basis. Finally, the “unsolicited takeovers” provisions of the MGCL permit our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain provisions that may have the effect of inhibiting a third-party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change in control of our Company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then current market price or that stockholders may otherwise believe is in their best interests; however, on February 23, 2022, our Board of Directors adopted a resolution prohibiting us from electing to be subject to the classified board provisions of Section 3-803 of the MGCL, unless such election is first approved by the stockholders of the Corporation by the affirmative vote of at least a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors. Item 1B. Unresolved Staff Comments None. Item 2. Properties Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash operators and other automotive-related and retail tenants. Our tenants are responsible for the operations conducted at our properties, including the payment of all taxes, maintenance, repair, insurance and other operating expenses. We manage and evaluate our operations as a single segment. We independently obtain and maintain a program of insurance which we believe adequately covers our owned and leased properties for casualty and liability risks. Our insurance program is underwritten in view of primary insurance coverages which we require to be provided by most of our tenants for properties they lease from us, including in respect to casualty, liability, pollution legal liability, fire and extended coverage risks. 25 The following table summarizes the geographic distribution of our properties as of December 31, 2021 . In addition, we lease approximately 11,100 square feet of office space at 292 Madison Avenue, New York, New York for our corporate headquarters, which we believe will remain suitable and adequate for such purposes for the immediate future. Owned by Getty Realty Leased by Getty Realty Total Properties by State Percent of Total Properties New York Massachusetts Connecticut Texas South Carolina Virginia New Jersey New Hampshire Maryland Michigan California Washington State Arizona Colorado North Carolina Ohio Pennsylvania Arkansas Oregon Hawaii Kansas Missouri Maine Nevada Kentucky Georgia New Mexico Florida Louisiana Oklahoma Illinois Alabama Indiana Mississippi Rhode Island Washington, D.C. Minnesota North Dakota Vermont Total 193 99 66 65 49 48 44 45 40 41 36 31 23 23 23 23 22 13 13 10 8 8 7 7 6 5 5 4 4 4 3 2 2 2 2 2 1 1 1 981 28 6 6 — — 1 4 — 2 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 47 221 105 72 65 49 49 48 45 42 41 36 31 23 23 23 23 22 13 13 10 8 8 7 7 6 5 5 4 4 4 3 2 2 2 2 2 1 1 1 1,028 21.5 % 10.2 7.0 6.3 4.8 4.8 4.6 4.3 4.1 4.0 3.5 3.0 2.2 2.2 2.2 2.2 2.1 1.3 1.3 1.0 0.8 0.8 0.7 0.7 0.6 0.5 0.5 0.4 0.4 0.4 0.3 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 100.0 % The properties that we lease from third parties have a remaining lease term, including renewal and extension option terms, averaging approximately 8.0 years. The following table sets forth information regarding lease expirations, including renewal and extension option terms, for properties that we lease from third parties: CALENDAR YEAR 2022 2023 2024 2025 2026 Subtotal Thereafter Total Number of Leases Expiring Percent of Total Leased Properties Percent of Total Properties 5 2 4 2 5 18 29 47 10.6 % 4.3 8.5 4.3 10.6 38.3 61.7 100 % 0.5 % 0.2 0.4 0.2 0.5 1.8 2.8 4.6 % 26 Revenues from rental properties for the year ended December 31, 2021 were $153.9 million, an average of approximately $153,000 per property given the 1,004 average rental properties held during the year. Revenues from rental properties for the year ended December 31, 2020, were $144.6 million, an average of $152,000 per property given the 952 average rental properties held during the year. Rental property lease expirations and annualized contractual rent as of December 31, 2021 are as follows (in thousands, except for number of properties): CALENDAR YEAR Redevelopment Vacant 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Thereafter Total Number of Rental Properties (a) Annualized Contractual Rent (b) Percentage of Total Annualized Rent — — 2.4 % 2.5 2.0 5.1 9.5 14.0 5.4 8.0 1.2 6.5 43.4 100.0 % — — 3,524 3,627 3,000 7,450 14,059 20,638 7,899 11,784 1,717 9,515 63,931 147,144 4 $ 5 32 26 24 43 79 261 45 70 21 63 355 1,028 $ (a) With respect to a unitary master lease that includes properties that we lease from third-parties, the expiration dates refer to the dates that the leases with the third-parties expire and upon which date our tenant must vacate those properties, not the expiration date of the unitary master lease itself. (b) Represents the monthly contractual rent due from tenants under existing leases as of December 31, 2021, multiplied by 12. Item 3. Legal Proceedings We are involved in various legal proceedings, many of which we consider to be routine and incidental to our business. Many of these legal proceedings involve claims relating to alleged discharges of petroleum into the environment at current and former gasoline stations. We routinely assess our liabilities and contingencies in connection with these matters based upon the latest available information. The following is a description of material legal proceedings, including those involving private parties and governmental authorities under federal, state and local laws regulating the discharge of hazardous substances into the environment. We are vigorously defending all of the legal proceedings against us, including each of the legal proceedings listed below. As of December 31, 2021 and 2020, we had accrued $1.9 million and $4.3 million, respectively, for certain of these matters which we believe were appropriate based on information then currently available. It is possible that losses related to these legal proceedings could exceed the amounts accrued as of December 31, 2021, and that such additional losses could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. MTBE Litigation – State of Pennsylvania On July 7, 2014, our subsidiary, Getty Properties Corp., was served with a complaint filed by the Commonwealth of Pennsylvania (the “State”) in the Court of Common Pleas, Philadelphia County relating to alleged statewide MTBE contamination in Pennsylvania. The named plaintiff is the State, by and through (then) Pennsylvania Attorney General Kathleen G. Kane (as Trustee of the waters of the State), the Pennsylvania Insurance Department (which governs and administers the Underground Storage Tank Indemnification Fund), the Pennsylvania Department of Environmental Protection (vested with the authority to protect the environment) and the Pennsylvania Underground Storage Tank Indemnification Fund. The complaint names us and more than 50 other defendants, including Exxon Mobil, BP, Chevron, Citgo, Gulf, Lukoil Americas, Getty Petroleum Marketing Inc., Marathon, Hess, Shell Oil, Texaco, Valero, as well as other smaller petroleum refiners, manufacturers, distributors and retailers of MTBE or gasoline containing MTBE who are alleged to have distributed, stored and sold MTBE gasoline in Pennsylvania. The complaint seeks compensation for natural resource damages and for injuries sustained as a result of “defendants’ unfair and deceptive trade practices and act in the marketing of MTBE and gasoline containing MTBE.” The plaintiffs also seek to recover costs paid or incurred by the State to detect, treat and remediate MTBE from public and private water wells and groundwater. The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design; strict liability – failure to warn; public nuisance; negligence; trespass; and violation of consumer protection law. 27 The case was filed in the Court of Common Pleas, Philadelphia County, but was removed by defendants to the United States District Court for the Eastern District of Pennsylvania and then transferred to the United States District Court for the Southern District of New York so that it may be managed as part of the ongoing MTBE MDL proceedings. In November 2015, plaintiffs filed a Second Amended Complaint naming additional defendants and adding factual allegations against the defendants. We joined with other defendants in the filing of a motion to dismiss the claims against us, which was granted in part and denied in part. We are vigorously defending the claims made against us. Our ultimate liability in this proceeding is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. MTBE Litigation – State of Maryland On December 17, 2017, the State of Maryland, by and through the Attorney General on behalf of the Maryland Department of Environment and the Maryland Department of Health (the “State of Maryland”), filed a complaint in the Circuit Court for Baltimore City related to alleged statewide MTBE contamination in Maryland. The complaint was served upon us on January 19, 2018. The complaint names us and more than 60 other defendants, including Exxon Mobil, APEX Oil, Astra Oil, Atlantic Richfield, BP, Chevron, Citgo, ConocoPhillips, Hess, Kinder Morgan, Lukoil, Marathon, Shell, Sunoco, Texaco, Valero, Cumberland Farms, Duke Energy, El Paso Merchant Energy-Petroleum, Energy Transfer Partners, Equilon Enterprises, ETP Holdco, George E. Warren Corporation, Getty Petroleum Marketing, Inc., Gulf, Guttman Energy, Hartree Partners, Holtzman Oil, Motiva Enterprises, Nustar Terminals Operations Partnership, Phillips 66, Premcor, 7-Eleven, Sheetz, Total Petrochemicals & Refining USA, Transmontaigne Product Services, Vitol S.A., WAWA, and Western Refining. The complaint seeks compensation for natural resource damages and for injuries sustained as a result of the defendants’ unfair and deceptive trade practices in the marketing of MTBE and gasoline containing MTBE. The plaintiffs also seek to recover costs paid or incurred by the State of Maryland to detect, investigate, treat and remediate MTBE from public and private water wells and groundwater, punitive damages and the award of attorneys’ fees and litigation costs. The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design; strict liability – failure to warn; strict liability for abnormally dangerous activity; public nuisance; negligence; trespass; and violations of Titles 4, 7 and 9 of the Maryland Environmental Code. On February 14, 2018, defendants removed the case to the United States District Court for the District of Maryland. We are vigorously defending the claims made against us. Our ultimate liability, if any, in this proceeding is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River In 2004, the United States Environmental Protection Agency (“EPA”) issued General Notice Letters (“GNL”) to over 100 entities, including us, alleging that they are PRPs at the Diamond Alkali Superfund Site (“Superfund Site”), which includes the former Diamond Shamrock Corporation manufacturing facility located at 80-120 Lister Ave. in Newark, New Jersey and a 17-mile stretch of the Passaic River from Dundee Dam to the Newark Bay and its tributaries (the Lower Passaic River Study Area or “LPRSA”). In May 2007, over 70 GNL recipients, including us, entered into an Administrative Settlement Agreement and Order on Consent (“AOC”) with the EPA to perform a Remedial Investigation and Feasibility Study (“RI/FS”) for the LPRSA, which is intended to address the investigation and evaluation of alternative remedial actions with respect to alleged damages to the LPRSA. Many of the parties to the AOC, including us, are also members of a Cooperating Parties Group (“CPG”). The CPG agreed to an interim allocation formula for purposes of allocating the costs to complete the RI/FS among its members, with the understanding that this interim allocation formula is not binding on the parties in terms of any potential liability for the costs to remediate the LPRSA. The CPG submitted to the EPA its draft RI/FS in 2015, which sets forth various alternatives for remediating the entire 17 miles of the LPRSA. In October 2018, the EPA issued a letter directing the CPG to prepare a streamlined feasibility study for just the upper 9-miles of the LPRSA based on an iterative approach using adaptive management strategies. On December 4, 2020, The CPG submitted a Final Draft Interim Remedy Feasibility Study (“IR/FS”) to the EPA which identifies various targeted dredge and cap alternatives for the upper 9-miles of the LPRSA. On December 11, 2020, the EPA conditionally approved the CPG’s IR/FS for the upper 9-miles of the LPRSA, which recognizes that interim actions and adaptive management may be appropriate before deciding a final remedy. The EPA published the Proposed Plan for the upper 9-mile IR/FS for public comment and subsequently issued a Record of Decision (“ROD”) for the upper 9- mile IR/FS (“Upper 9-mile IR ROD”). There is currently no mechanism in place requiring any parties to implement the Upper 9-mile IR ROD. In addition to the RI/FS activities, other actions relating to the investigation and/or remediation of the LPRSA have proceeded as follows. First, in June 2012, certain members of the CPG entered into an Administrative Settlement Agreement and Order on Consent (“10.9 AOC”) with the EPA to perform certain remediation activities, including removal and capping of sediments at the river mile 10.9 area and certain testing. The EPA also issued a Unilateral Order to Occidental Chemical Corporation (“Occidental”), the former owner/operator of the Diamond Shamrock Corporation facility responsible for the discharge of 2,3,8,8-TCDD (“dioxin”) and other hazardous substances from the Lister facility. The Order directed Occidental to participate and contribute to the cost of the river mile 10.9 work. Concurrent with the CPG’s work on the RI/FS, on April 11, 2014, the EPA issued a draft Focused Feasibility Study (“FFS”) with proposed remedial alternatives to remediate the lower 8-miles of the LPRSA. The FFS was subject to public comments and objections and, on March 4, 2016, the EPA issued a ROD for the lower 8-miles (“Lower 8-mile ROD”) selecting a 28 remedy that involves bank-to-bank dredging and installing an engineered cap with an estimated cost of $1.38 billion. On March 31, 2016, we and more than 100 other PRPs received from the EPA a “Notice of Potential Liability and Commencement of Negotiations for Remedial Design” (“Notice”), which informed the recipients that the EPA intends to seek an Administrative Order on Consent and Settlement Agreement with Occidental (who the EPA considers the primary contributor of dioxin and other pesticides generated from the production of Agent Orange at its Diamond Shamrock Corporation facility and a discharger of other contaminants of concern (“COCs”) to the Superfund Site for remedial design of the remedy selected in the Lower 8-mile ROD, after which the EPA plans to begin negotiations with “major” PRPs for implementation and/or payment of the selected remedy. The Notice also stated that the EPA believes that some of the PRPs and other parties not yet identified will be eligible for a cash out settlement with the EPA. On September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for the Lower 8-mile ROD. In December 2019, Occidental submitted a report to the EPA on the progress of the remedial design work, which is still ongoing. Occidental has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc. (“Tierra”) for its liability in connection with the Site. Occidental has also asserted that Maxus and Tierra’s parent company, YPF, S.A. (“YPF”) and certain of its affiliates must indemnify Occidental. On June 16, 2016, Maxus and Tierra filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In July 2017, an amended Chapter 11 plan of liquidation became effective and, in connection therewith, Maxus and Tierra entered into a mutual contribution release agreement with certain parties, including us, pertaining to certain past costs, but not future remedy costs. By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements with 20 PRPs to resolve their alleged liability for the remedial actions addressed in the Lower 8-mile ROD, who the EPA stated did not discharge any of the eight hazardous substances identified as a COC in the ROD. The letter also stated that other parties who did not discharge dioxins, furans or polychlorinated biphenyls (which are considered the COCs posing the greatest risk to the river) may also be eligible for cash out settlements, and that the EPA would begin a process for identifying other PRPs for negotiation of future cash out settlements. We were not included in the initial group of 20 parties identified by the EPA for cash out settlements, but we believe we meet the EPA’s criteria for a cash out settlement and should be considered for same in any future discussions. In January 2018, the EPA published a notice of its intent to enter into a final settlement agreement with 15 of the initial group of parties to resolve their respective alleged liability for the Lower 8-mile ROD work, each for a payment to the EPA in the amount of $0.3 million. In August 2017, the EPA appointed an independent third-party allocation expert to conduct allocation proceedings with most of the remaining recipients of the Notice, which process has concluded leading to an agreement in principle between the EPA and certain of the allocation proceeding participants, including us, concerning a cash-out settlement for the entire 17-mile stretch of the Lower Passaic River and its tributaries, which is subject to negotiation and court approval and entry of a consent decree. On June 30, 2018, Occidental filed a complaint in the United States District Court for the District of New Jersey seeking cost recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act for its alleged expenses with respect to the investigation, design, and anticipated implementation of the remedy for the Lower 8-mile ROD work (the “Occidental lawsuit”). The complaint lists over 120 defendants, including us, many of whom were also named in the EPA’s 2016 Notice. Factual discovery is ongoing, and we are defending the claims consistent with our defenses in the related proceedings. In January 2022, certain defendants in Occidental lawsuit, including us, collectively filed a motion seeking the Court’s permission to file a motion to stay the litigation to allow the related allocation proceedings and resulting settlement discussions with the EPA to continue unencumbered by the time and costs of litigation and discovery that could later be obviated by a settlement. The Court is currently considering whether to rule on this motion for a stay of the proceedings. Based on currently known facts and circumstances, including, among other factors, the agreement in principle with the EPA noted above, anticipated allocations, our belief that there was not any use or discharge of dioxins, furans or polychlorinated biphenyls in connection with our former petroleum storage operations at our former Newark, New Jersey Terminal, and because there are numerous other parties who will likely bear the costs of remediation and/or damages, the Company does not believe that resolution of this matter as relates to the Company is reasonably likely to have a material impact on our results of operations. Nevertheless, in the event the agreement in principle is not approved by the Court, and/or there are one or more adverse determinations related to this matter, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement proceedings and/or possible litigation; hence, our ultimate liability in the pending and possible future proceedings pertaining to the LPRSA remains uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. For these reasons, we are unable to estimate a possible loss or range of loss in excess of the amount we have accrued for the Lower Passaic River proceedings as of the date of this Annual Report on Form 10-K, and it is therefore possible that losses related to the Lower Passaic River proceedings could exceed the amounts accrued as of the date hereof, which could cause a material adverse effect on our results of operations. For additional information see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K. Item 4. Mine Safety Disclosures None. 29 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Capital Stock Our common stock is traded on the New York Stock Exchange (symbol: GTY). There were approximately 23,925 beneficial holders of our common stock as of February 14, 2022, of which approximately 850 were holders of record. For a discussion of potential limitations on our ability to pay future dividends see “Item 1A. Risk Factors – We may change our dividend policy and the dividends we pay may be subject to significant volatility” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”. Issuer Purchases of Equity Securities None. Sales of Unregistered Securities None. Stock Performance Graph Comparison of Five-Year Cumulative Total Return* Getty Realty Corp. Standard & Poor's 500 Peer Group $100.00 $122.85 $113.38 $112.09 $153.34 $153.17 $147.77 $124.22 $116.64 $115.34 $233.41 $180.18 $162.26 $161.06 $131.49 $130.40 $250.00 $200.00 $150.00 $100.00 $50.00 $- 1 2 / 3 0 / 2 0 1 6 1 / 2 / 2 0 1 8 1 / 2 / 2 0 1 9 1 2 / 3 1 / 2 0 1 9 1 2 / 3 0 / 2 0 2 0 1 2 / 3 1 / 2 0 2 1 Source: SNL Financial Getty Realty Corp. Standard & Poor's 500 Peer Group 12/30/2016 1/02/2018 1/02/2019 12/31/2019 12/30/2020 12/31/2021 100.00 $ 112.09 $ 124.22 $ 147.77 $ 131.49 $ 161.06 100.00 $ 122.85 $ 116.64 $ 153.17 $ 180.18 $ 233.41 100.00 $ 113.38 $ 115.34 $ 153.34 $ 130.40 $ 162.26 Assumes $100 invested at the close of the last day of trading on the New York Stock Exchange on December 31, 2016, in Getty Realty Corp. common stock, Standard & Poor’s 500 and Peer Group. * Cumulative total return assumes reinvestment of dividends. We have chosen as our Peer Group the following companies: Agree Realty Corporation, EPR Properties, Essential Properties Realty Trust, Four Corners Properties Trust, and NETSTREIT Corp and One Liberty Properties. We have chosen these companies as 30 our Peer Group because a substantial segment of each of their businesses is owning and leasing single tenant net lease retail properties. We cannot assure you that our stock performance will continue in the future with the same or similar trends depicted in the performance graph above. We do not make or endorse any predictions as to future stock performance. The above performance graph and related information shall not be deemed filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section and shall not be deemed to be incorporated by reference into any filing that we make under the Securities Act or the Exchange Act. Item 6. Reserved 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment from the perspective of management. The following discussion and analysis should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements”; the sections in Part I entitled “Item 1A. Risk Factors”; and the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data”. We use certain non-GAAP measures that are more fully described below under the caption “— Supplemental Non-GAAP Measures,” which we believe are appropriate supplemental non-GAAP measures of the performance of REITs used by our management, as well as REIT analysts. This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020. General Real Estate Investment Trust We are a REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio includes convenience stores, express car washes, automotive service centers (including instant oil change, tire and battery, gas and repair, and other related centers), automotive parts retailers, drive-thru quick service restaurants and select other properties. As of December 31, 2021, our portfolio included 1,028 properties, including 981 properties owned by us and 47 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to distribute at least 90% of our ordinary taxable income to our stockholders each year. COVID-19 In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. The impact from the rapidly changing market and economic conditions due to the COVID-19 pandemic remains uncertain. While we have not incurred significant disruptions to our financial results thus far from the COVID-19 pandemic, we are unable to accurately predict the impact that COVID- 19 will have on our business, operations and financial result due to numerous evolving factors, including the severity of the disease, the duration of the pandemic, actions that may be taken by governmental authorities, the impact to our tenants, including the ability of our tenants to make their rental payments and any closures of tenants’ facilities. Additionally, while we expect to continue our overall growth strategy during the 2022 and to fund our business operations from cash flows from our properties and our Revolving Facility, the rapid developments and fluidity of COVID-19 may cause us to re-evaluate, if not suspend, our growth strategy and/or to rely more heavily on borrowings under our Revolving Facility, proceeds from the sale of shares of our common stock under our ATM Program, or other sources of liquidity. See “Part I. Item. 1A. Risk Factors” in this Annual Report on Form 10-K for additional information. Our Triple-Net Leases Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate the businesses. Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental contamination that existed before their leases commenced. Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the performance of the automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly competitive and can be subject to variability. (For additional information regarding risks related to our tenants’ dependence on the performance of the petroleum industry, see “Item 1A. Risk Factors – Significant number of our tenants depend on the same industry for their revenues” in this Form 10-K.) During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases. 32 Our Properties Net Lease. As of December 31, 2021, we leased 1,019 of our properties to tenants under triple-net leases. Our net lease properties include 845 properties leased under 33 separate unitary or master triple-net leases and 174 properties leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years with options for successive renewal terms of up to 20 years and periodic rent escalations. Several of our leases provide for additional rent based on the aggregate volume of fuel sold. In addition, certain of our leases require the tenants to invest capital in our properties, substantially all of which is related to the replacement of USTs that are owned by our tenants. Redevelopment. As of December 31, 2021, we were actively redeveloping four of our properties as new convenience stores or for alternative single tenant retail uses. Vacancies. As of December 31, 2021, five of our properties were vacant. We expect that we will either sell or enter into new leases on these properties over time. Investment Strategy and Activity As part of our strategy to grow and diversify our portfolio, we regularly review acquisition and financing opportunities to invest in additional convenience, automotive and other single tenant retail real estate. We primarily pursue sale leaseback transactions with existing and prospective tenants and will pursue other transactions, including forward commitments to acquire new-to-industry construction and the acquisition of assets with in-place leases, that result in us owning fee simple interests in our properties. Our investment activities may also include purchase money financing with respect to properties we sell, real property loans relating to our leasehold properties and construction loans. Our investment strategy seeks to generate current income and benefit from long-term appreciation in the underlying value of our real estate. To achieve that goal, we seek to invest in well-located, freestanding properties that support automobility and provide convenience and service to consumers in major markets across the country. A key element of our investment strategy is to invest in properties that will enhance our property type, tenant and geographic diversification. During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding construction loans, including accrued interest, for three new-to-industry developments. During the year ended December 31, 2020, we acquired fee simple interests in 34 properties for an aggregate purchase price of $150.0 million. We accounted for the acquisitions of fee simple interests as asset acquisitions. For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Redevelopment Strategy and Activity We believe that certain of our properties, primarily those currently being occupied by gas and repair businesses, are well-suited to be redeveloped as new convenience stores or other single tenant retail uses, such as automotive parts, quick service restaurants, bank branches and specialty retail. We believe that the redeveloped properties can be leased or sold at higher values than their current use. During the years ended December 31, 2021 and 2020, rent commenced on five and six completed redevelopment projects, respectively, that were placed back into service in our net lease portfolio. Since the inception of our redevelopment program in 2015, we have completed 24 redevelopment projects. For the year ended December 31, 2021, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our redevelopment activities and transferred $0.4 million of construction-in-progress to buildings and improvements on our consolidated balance sheet. For the year ended December 31, 2020, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our redevelopment activities and transferred $1.6 million of construction-in-progress to buildings and improvements on our consolidated balance sheet. As of December 31, 2021, we had four properties under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio, including three properties for which we have signed new leases or letters of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured. Asset Impairment We perform an impairment analysis for the carrying amounts of our properties in accordance with GAAP when indicators of impairment exist. We reduced the carrying amounts to fair value, and recorded impairment charges aggregating $4.4 million and $4.3 million for the years ended December 31, 2021 and 2020, respectively, where the carrying amounts of the properties exceeded the estimated undiscounted cash flows expected to be received during the assumed holding period which includes the estimated sales value expected to be received at disposition. The impairment charges were attributable to (i) the effect of adding asset retirement costs to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of 33 these properties in excess of their fair values, (ii) reductions in estimated undiscounted cash flows expected to be received during the assumed holding period for certain of our properties, and (iii) reductions in estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bids for certain of our properties. The evaluation and estimates of anticipated cash flows used to conduct our impairment analysis are highly subjective and actual results could vary significantly from our estimates. For a discussion of the risks associated with asset impairments, see “Item 1A. Risk Factors – Our assets may be subject to impairment charges.” Supplemental Non-GAAP Measures We manage our business to enhance the value of our real estate portfolio and, as a REIT, place particular emphasis on minimizing risk, to the extent feasible, and generating cash sufficient to make required distributions to stockholders of at least 90% of our ordinary taxable income each year. In addition to measurements defined by accounting principles generally accepted in the United States of America (“GAAP”), we also focus on Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) (both AFFO and AFFO excluding stock-based compensation and amortization of debt issuance costs) to measure our performance. We are updating our definition of AFFO to include adjustments for stock-based compensation and amortization of debt issuance costs and are providing AFFO using both methods for the quarter and year ended December 31, 2021. We believe that conforming to this market practice for calculating AFFO will improve the comparability of this measure of performance to other net lease REITs, and we will report AFFO pursuant to this updated definition beginning in the first quarter of 2022. FFO and AFFO are generally considered by analysts and investors to be appropriate supplemental non-GAAP measures of the performance of REITs. FFO and AFFO are not in accordance with, or a substitute for, measures prepared in accordance with GAAP. In addition, FFO and AFFO are not based on any comprehensive set of accounting rules or principles. Neither FFO nor AFFO represent cash generated from operating activities calculated in accordance with GAAP and therefore these measures should not be considered an alternative for GAAP net earnings or as a measure of liquidity. These measures should only be used to evaluate our performance in conjunction with corresponding GAAP measures. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net earnings before (i) depreciation and amortization of real estate assets, (ii) gains or losses on dispositions of real estate assets, (iii) impairment charges, and (iv) the cumulative effect of accounting changes. Our definition of AFFO is defined as FFO plus or minus (i) certain revenue recognition adjustments (defined below), (ii) certain environmental adjustments (defined below), (iii) other non-cash and/or unusual items that are not reflective of our core operating performance, and (iv) beginning with our results for the quarter and year ended December 31, 2021, stock-based compensation and amortization of debt issuance costs. Other REITs may use definitions of FFO and/or AFFO that are different than ours and, accordingly, may not be comparable. We believe that FFO and AFFO are helpful to analysts and investors in measuring our performance because both FFO and AFFO exclude various items included in GAAP net earnings that do not relate to, or are not indicative of, the core operating performance of our portfolio. Specifically, FFO excludes items such as depreciation and amortization of real estate assets, gains or losses on dispositions of real estate assets, and impairment charges. With respect to AFFO, we further exclude the impact of (i) deferred rental revenue (straight-line rent), the net amortization of above-market and below-market leases, adjustments recorded for the recognition of rental income from direct financing leases, and the amortization of deferred lease incentives (collectively, “Revenue Recognition Adjustments”), (ii) environmental accretion expenses, environmental litigation accruals, insurance reimbursements, legal settlements and judgments, and changes in environmental remediation estimates (collectively, “Environmental Adjustments”), (iii) other items, which may include allowances for credit losses on notes and mortgages receivable and direct financing leases, losses on extinguishment of debt, retirement and severance costs, and other items that do not impact our recurring cash flow and which are not indicative of our core operating performance and (iv) beginning with our results for the quarter and year ended December 31, 2021, stock-based compensation and amortization of debt issuance costs. We pay particular attention to AFFO which it believes provides the most useful depiction of the core operating performance of its portfolio. By providing AFFO, we believe we are presenting information that assists analysts and investors in their assessment of our core operating performance, as well as the sustainability of our core operating performance with the sustainability of the core operating performance of other real estate companies. 34 A reconciliation of net earnings to FFO and AFFO is as follows (in thousands, except per share amounts): Net earnings Depreciation and amortization of real estate assets Gains on dispositions of real estate Impairments Funds from operations (FFO) Revenue recognition adjustments Allowance for credit loss on notes and mortgages receivable and direct financing leases Loss on extinguishment of debt Changes in environmental estimates Accretion expense Environmental litigation accruals Insurance reimbursements Legal settlements and judgments Retirement and severance costs Adjusted funds from operations (AFFO) Stock-based compensation expense Amortization of debt issuance costs AFFO (excluding stock-based compensation and amortization of debt issuance costs) Basic per share amounts: Net earnings FFO (1) AFFO (1) AFFO (excluding stock-based compensation and amortization of debt issuance costs) (1) Diluted per share amounts: Net earnings FFO (1) AFFO (1) AFFO (excluding stock-based compensation and amortization of debt issuance costs) (1) Weighted average common shares outstanding: Basic Diluted 2021 Year ended December 31, 2020 2019 $ $ 62,860 $ 35,518 (16,718 ) 4,404 86,064 1,964 (132 ) — (1,768 ) 1,705 1,909 (92 ) (493 ) 800 89,957 $ 3,997 1,013 69,388 $ 30,191 (4,548 ) 4,258 99,289 895 368 1,233 (3,135 ) 1,841 85 (142 ) (21,300 ) — 79,134 $ 3,130 1,053 49,723 25,161 (1,063 ) 4,012 77,833 (960 ) — — (5,386 ) 2,006 5,896 (4,866 ) (2,707 ) — 71,816 2,468 970 $ 94,967 $ 83,317 $ 75,254 $ $ 1.37 $ 1.88 1.97 1.62 $ 2.32 1.85 2.08 1.94 1.37 $ 1.88 1.97 1.62 $ 2.31 1.84 2.08 1.94 1.19 1.86 1.72 1.80 1.19 1.86 1.72 1.80 44,782 44,819 42,040 42,070 41,072 41,110 (1) Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted: FFO AFFO AFFO (excluding stock-based compensation and amortization of debt issuance costs) 2021 Year ended December 31, 2020 2019 $ 1,771 1,814 $ 1,939 1,546 $ 1,915 1,627 1,308 1,207 1,265 Results of Operations Year ended December 31, 2021, compared to year ended December 31, 2020 Revenues from rental properties increased by $9.3 million to $153.9 million for the year ended December 31, 2021, as compared to $144.6 million for the year ended December 31, 2020. The increase in revenues from rental properties was primarily due 35 to incremental rental income from acquired properties, as well as rent commencements from completed redevelopments and contractual rent increases for certain in-place leases . Rental income contractually due from our tenants included in revenues from rental properties was $138.7 million for the year ended December 31, 2021, as compared to $128.2 million for the year ended December 31, 2020. In accordance with GAAP, we recognize revenues from rental properties in amounts which vary from the amount of rent contractually due during the periods presented. As a result, revenues from rental properties include Revenue Recognition Adjustments comprised of non-cash adjustments recorded for deferred rental revenue due to the recognition of rental income on a straight-line basis over the current lease term, the net amortization of above-market and below-market leases, recognition of rental income under direct financing leases using the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties and the amortization of deferred lease incentives. Revenues from rental properties include Revenue Recognition Adjustments which decreased rental revenue by $2.0 million and by $0.9 million for the years ended December 31, 2021 and 2020, respectively. Tenant reimbursements, which are included in revenues from rental properties, and which consist of real estate taxes and other municipal charges paid by us which are reimbursable by our tenants pursuant to the terms of triple-net lease agreements, were $17.2 million and $17.3 million for the years ended December 31, 2021 and 2020, respectively. Interest income on notes and mortgages receivable was $1.5 million for the year ended December 31, 2021, as compared to $2.7 million for the year ended December 31, 2020. Property costs, which are primarily comprised of rent expense, real estate and other state and local taxes, municipal charges, professional fees, maintenance expense and reimbursable tenant expenses, were $22.0 million for the year ended December 31, 2021, as compared to $23.5 million for the year ended December 31, 2020. The decrease in property costs for the year ended December 31, 2021, was principally due to a decrease in rent expense, professional fees related to property redevelopments, non-reimbursable real estate taxes, maintenance expenses and other professional fees. Impairment charges were $4.4 million for the year ended December 31, 2021, as compared to $4.3 million for the year ended December 31, 2020. Impairment charges are recorded when the carrying value of a property is reduced to fair value. Impairment charges for the years ended December 31, 2021 and 2020, were attributable to the effect of adding asset retirement costs to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of these properties in excess of their fair values, reductions in estimated undiscounted cash flows expected to be received during the assumed holding period for certain of our properties, and reductions in estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bids for certain of our properties. Environmental expenses were $3.5 million for the year ended December 31, 2021, as compared to $1.1 million for the year ended December 31, 2020. The increase in environmental expenses for the year ended December 31, 2021, was principally due to a $1.8 million increase in environmental litigation accruals and a $1.2 million increase in net environmental remediation costs and estimates, partially offset by a $0.5 million decrease in environmental legal and professional fees. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods. General and administrative expense was $20.2 million for the year ended December 31, 2021, as compared to $17.3 million for the year ended December 31, 2020. The increase in general and administrative expense for the year ended December 31, 2021, was principally due to a $0.9 million increase in stock-based compensation, a $0.8 million increase in non-recurring employee-related expenses and a $0.7 million increase in other employee-related expenses. Depreciation and amortization expense was $35.5 million for the year ended December 31, 2021, as compared to $30.2 million for the year ended December 31, 2020. The increase in depreciation and amortization expense was primarily due to depreciation and amortization of properties acquired offset by a decrease in depreciation charges related to asset retirement costs, the effect of certain assets becoming fully depreciated, lease terminations and dispositions of real estate. Gains on dispositions of real estate were $16.7 million for the year ended December 31, 2021, as compared to $4.5 million for the year ended December 31, 2020. The gains were primarily the result of the sale of 16 and 11 properties during the years ended December 31, 2021 and 2020, respectively. Other income was $1.1 million for the year ended December 31, 2021, as compared to $21.1 million for the year ended December 31, 2020. For the year ended December 31, 2021, other income was primarily attributable to $0.5 million received from legal settlements and judgments and $0.4 million received for lease considerations and easements. Other income for the year ended December 31, 2020, was primarily attributable to $21.3 million received from legal settlements and judgments, partially offset by a $0.4 million allowance for credit loss on notes and mortgages receivable and direct financings leases. Interest expense was $24.7 million for the year ended December 31, 2021, as compared to $26.1 million for the year ended December 31, 2020. The decrease was due to lower average interest rates for the year ended December 31, 2021, as compared to the year ended December 31, 2020. 36  Liquidity and Capital Resources General Our principal sources of liquidity are the cash flows from our operations, funds available under our Revolving Facility (which is scheduled to mature in October 2025), proceeds from the sale of shares of our common stock through offerings under our ATM Program, and available cash and cash equivalents. Our business operations and liquidity are dependent on our ability to generate cash flow from our properties. Our principal uses for liquidity include normal operating activities, payments of interest on outstanding debt, redevelopment projects, real estate acquisitions, and environmental remediation. We believe that our operating cash needs for the next twelve months, as well as our long-term liquidity requirements, can be met by cash flows from operations, borrowings under our Revolving Facility, proceeds from the sale of shares of our common stock under our ATM Program and available cash and cash equivalents. We have not historically incurred significant capital expenditures other than those related to acquisitions. For a discussion of our capital expenditures, see “—Property Acquisitions and Capital Expenditures. As of December 31, 2021, we had $60 million outstanding on our Revolving Facility and our total cash and cash equivalents were $26.5 million. During the year ended December 31, 2021, we raised gross proceeds of $94.1 million through our ATM equity program pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $250.0 million. We expect existing cash and cash equivalents, net cash from operating activities, proceeds from real estate asset sales, borrowings under our unsecured Revolving Facility, issuances under our ATM Program, issuances of unsecured notes and issuances of common stock to continue to be sufficient to fund our operating activities and cash needed for investing and financing activities, such as regular quarterly dividends, scheduled debt repayments, acquisitions, and certain capital expenditures, including expenditures related to redevelopment activities. We also expect to continue meeting our short-term liquidity and capital requirements, generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT. On February 22, 2022, we closed on the private placement of $225 million of senior unsecured notes, including (i) $100 million of 3.45% notes funded at closing and maturing in February 2032, and (ii) $125 million of 3.65% notes to be funded in January 2023 and mature in January 2033. Proceeds from the notes funded at closing were used to repay all amounts outstanding on the Revolving Facility and for general corporate purposes, including to fund investment activity. Proceeds from the delayed funding notes will be used to prepay $75 million of 5.35% senior unsecured notes maturing in June 2023 and for general corporate purposes, including to fund investment activity. Our cash flow activities for the years ended December 31, 2021 and 2020 are summarized as follows (in thousands): Net cash flow provided by operating activities Net cash flow used in investing activities Net cash flow provided by (used in) financing activities Operating Activities Year ended December 31, 2021 2020 $ $ 86,818 $ (169,732 ) 52,321 $ 82,827 (127,417 ) 77,980 Net cash flow from operating activities increased by $4.0 million for the year ended December 31, 2021, to $86.8 million, as compared to $82.8 million for the year ended December 31, 2020. Net cash provided by operating activities represents cash received primarily from rental and interest income less cash used for property costs, environmental expense, general and administrative expense and interest expense. The change in net cash flow provided by operating activities for the years ended December 31, 2021, 2020 is primarily the result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes in assets and liabilities on our consolidated statements of cash flows. Investing Activities Our investing activities are primarily real estate-related transactions. Because we generally lease our properties to tenants on a triple-net basis, we have not historically incurred significant capital expenditures other than those related to investments in real estate and our redevelopment activities. Net cash flow used in investing activities increased by $42.3 million for the year ended December 31, 2021, to a use of $169.7 million, as compared to a use of $127.4 million for the year ended December 31, 2020. The increase in net cash flow used in investing activities for the year ended December 31, 2021, was primarily due to an increase of $44.3 million of property acquisitions, a $10.6 million increase in issuance of notes receivable, and a decrease of $12.4 million in collections of notes and mortgages receivable, partially offset by an increase of $19.4 million in proceeds from dispositions of real estate and an increase of $5.7 million in deposits for property acquisitions. 37 Financing Activities Net cash flow provided by financing activities decreased by $25.7 million for the year ended December 31, 2021, to $52.3 million, as compared to $78.0 million for the year ended December 31, 2020. The decrease in net cash flow from financing activities for the year ended December 31, 2021, was primarily due to a decrease in net borrowings of $44.0 million and an increase in dividends paid of $8.2 million, partially offset by an increase in net proceeds from issuances of common stock of $29.1 million. Credit Agreement On June 2, 2015, we entered into a $225.0 million senior unsecured credit agreement (the “Credit Agreement”) with a group of banks led by Bank of America, N.A. The Credit Agreement consisted of a $175.0 million unsecured revolving credit facility (the “Revolving Facility”) and a $50.0 million unsecured term loan (the “Term Loan”). On March 23, 2018, we entered in to an amended and restated credit agreement (as amended, the “Restated Credit Agreement”) amending and restating our Credit Agreement. Pursuant to the Restated Credit Agreement, we (a) increased the borrowing capacity under the Revolving Facility from $175.0 million to $250.0 million, (b) extended the maturity date of the Revolving Facility from June 2018 to March 2022, (c) extended the maturity date of the Term Loan from June 2020 to March 2023 and (d) amended certain financial covenants and provisions. On September 19, 2018, we entered into an amendment (the “First Amendment”) of our Restated Credit Agreement. The First Amendment modified the Restated Credit Agreement to, among other things: (i) reflect that we had previously entered into (a) an amended and restated note purchase and guarantee agreement with The Prudential Insurance Company of America (“Prudential”) and certain of its affiliates and (b) a note purchase and guarantee agreement with the Metropolitan Life Insurance Company (“MetLife”) and certain of its affiliates; and (ii) permit borrowings under each of the Revolving Facility and the Term Loan at three different interest rates, including a rate based on the LIBOR Daily Floating Rate (as defined in the First Amendment) plus the Applicable Rate (as defined in the First Amendment) for such facility. On September 12, 2019, in connection with prepayment of the Term Loan, we entered into a consent and amendment (the “Second Amendment”) of our Restated Credit Agreement. The Second Amendment modifies the Restated Credit Agreement to, among other things, (a) increase our borrowing capacity under the Revolving Facility from $250.0 million to $300.0 million and (b) decrease lender commitments under the Term Loan to $0.0 million. On October 27, 2021, we entered into second amended and restated credit agreement (as amended, the “Second Restated Credit Agreement”) amending and restating our Restated Credit Agreement. Pursuant to the Second Restated Credit Agreement, we (i) extended the maturity date of the Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the Revolving Facility and (iii) amended certain financial covenants and other provisions. The Second Restated Credit Agreement provides for the Revolving Facility in an aggregate principal amount of $300.0 and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300 million, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under the terms of the Revolving Facility. The Revolving Facility matures October 27, 2025, subject to two six-month extensions (for a total of 12 months) exercisable at the Company's option. The Company's exercise of an extension option is subject to the absence of any default under the Second Restated Credit Agreement and the Company's compliance with certain conditions, including the payment of extension fees to the Lenders under the Revolving Facility and that no default or event of default shall have occurred and be continuing under the terms of the Revolving Facility. The Second Restated Credit Agreement reflects reductions in the interest rates for borrowings under the Revolving Facility and permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to 0.90% or a LIBOR rate plus a margin of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a future date. The per annum rate of the unused line fee on the undrawn funds under the Revolving Facility is 0.15% to 0.25% based on the Company’s daily unused portion of the available Revolving Facility. The Second Restated Credit Agreement contains customary financial covenants, including covenants with respect to total leverage, secured leverage and unsecured leverage ratios, fixed charge and interest coverage ratios, and minimum tangible net worth, as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The Second Restated Credit Agreement contains customary events of default, including cross default provisions with respect to the Company’s existing senior unsecured notes. Any event of default, if not cured or waived in a timely manner, could result in the acceleration of the Company’s indebtedness under the Second Restated Credit Agreement and could also give rise to an event of default and the acceleration of the Company’s existing senior unsecured notes. 38 Senior Unsecured Notes On December 4, 2020, we entered into a fifth amended and restated note purchase and guarantee agreement (the “Fifth Amended and Restated Prudential Agreement”) with Prudential and certain of its affiliates amending and restating our existing fourth amended and restated note purchase and guarantee agreement. Pursuant to the Fifth Amended and Restated Prudential Agreement, we issued $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”) to Prudential, and completed the early redemption of our 6.0% Series A Guaranteed Senior Notes due February 25, 2021 in the original aggregate principal amount of $100.0 million. The other senior unsecured notes outstanding under the fourth amended and restated note purchase and guarantee agreement with Prudential, including (i) $75.0 million of 5.35% Series B Guaranteed Senior Notes due June 2, 2023 (the “Series B Notes”), (ii) $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25, 2025 (the “Series C Notes”), (iii) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), and (iv) $50.0 million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”) remain outstanding under the Fifth Amended and Restated Prudential Agreement. On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended and Restated AIG Agreement”) with American General Life Insurance Company amending and restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated AIG Agreement, we issued $50.0 million of 3.43% Series J Guaranteed Senior Notes due November 25, 2030 (the “Series J Notes”) to AIG. The $50.0 million of 3.52% Series G Guaranteed Senior Notes due September 12, 2029 (the “Series G Notes”) that were outstanding under the existing note purchase and guarantee agreement remain outstanding under the First Amended and Restated AIG Agreement. On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended and Restated MassMutual Agreement”) with Massachusetts Mutual Life Insurance Company and certain of its affiliates amending and restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated MassMutual Agreement, we issued $25.0 million of 3.43% Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”) to MassMutual. The $25.0 million of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) that were outstanding under the existing note purchase and guarantee agreement remain outstanding under the First Amended and Restated MassMutual. On June 21, 2018, we entered into a note purchase and guarantee agreement (the “MetLife Note Agreement”) with MetLife and certain of its affiliates. Pursuant to the MetLife Note Agreement, we issued $50.0 million of 5.47% Series E Guaranteed Senior Notes due June 21, 2028 (the “Series E Notes”). The Series B Notes, Series C Notes, Series D Notes, Series E Notes, Series F Note, Series G Notes, Series H Notes, Series I Notes, Series J Notes, and Series K Notes are collectively referred to as the “senior unsecured notes.” On October 27, 2021, we entered into amendments to each of the note purchase and guarantee agreements governing the senior unsecured notes in order to conform the financial covenants therein to the corresponding provisions in the Second Restated Credit Agreement. Debt Maturities The amounts outstanding under our Second Restated Credit Agreement and our senior unsecured notes, exclusive of extension options, are as follows (in thousands): Revolving Facility Series B Notes Series C Notes Series D Notes Series E Notes Series F Notes Series G Notes Series H Notes Series I Notes Series J Notes Series K Notes Total debt Unamortized debt issuance costs, net (a) Total debt, net Maturity Date October 2025 June 2023 February 2025 June 2028 June 2028 September 2029 September 2029 September 2029 November 2030 November 2030 November 2030 Interest Rate December 31, 2021 December 31, 2020 1.40 % $ 5.35 % 4.75 % 5.47 % 5.47 % 3.52 % 3.52 % 3.52 % 3.43 % 3.43 % 3.43 % $ 60,000 $ 75,000 50,000 50,000 50,000 50,000 50,000 25,000 100,000 50,000 25,000 585,000 (3,880 ) 581,120 $ 25,000 75,000 50,000 50,000 50,000 50,000 50,000 25,000 100,000 50,000 25,000 550,000 (2,307 ) 547,693 (a) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2021 and 2020, of $2,730 and $1,135, respectively, are included in prepaid expenses and other assets on our consolidated balance sheets. 39 As of December 31, 2021, we are in compliance with all of the material terms of the Second Restated Credit Agreement and our senior unsecured notes. ATM Program In March 2018, we established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $125.0 million through a consortium of banks acting as agents. The 2018 ATM Program was terminated in January 2021. In February 2021, we established a new at-the-market equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $250.0 million through a consortium of banks acting as agents. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent. In connection with the expansion of the ATM Program, we may also sell shares of common stock under forward sale agreements. The use of a forward sale agreement would allow us to lock in a price on the sale of shares of common stock at the time the agreement is executed, but defer receiving the proceeds from the sale until a later date. During the years ended December 31, 2021 and 2020, we issued 3.0 million and 2.2 million shares of common stock and received net proceeds of $92.3 million and $63.2 million, respectively, under the 2018 ATM Program and the ATM Program. Future sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us. We have not entered into any forward sale agreements. Property Acquisitions and Capital Expenditures As part of our overall business strategy, we regularly review acquisition and financing opportunities to invest in additional convenience, automotive and other single tenant retail real estate, and we expect to continue to pursue acquisitions that we believe will benefit our financial performance. During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding loans, including accrued interest, for three new-to-industry developments . During the year ended December 31, 2020, we acquired fee simple interests in 34 properties for an aggregate purchase price of $150.0 million. We accounted for the acquisitions of fee simple interests as asset acquisitions. For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. We also seek opportunities to recapture select properties from our net lease portfolio and redevelop such properties as new convenience stores or other single tenant retail uses. For the year ended December 31, 2021, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our redevelopment activities. For the year ended December 31, 2020, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our redevelopment activities. Because we generally lease our properties to tenants on a triple-net basis, we have not historically incurred significant capital expenditures other than those related to acquisitions. However, our tenants frequently make improvements to the properties leased from us at their expense. As of December 31, 2021, we have a commitment to fund up to $7.0 million in the aggregate in capital improvements in certain properties with our tenants. Dividends We elected to be treated as a REIT under the federal income tax laws with the year beginning January 1, 2001. To qualify for taxation as a REIT, we must, among other requirements such as those related to the composition of our assets and gross income, distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a corresponding receipt of cash. We cannot provide any assurance that our cash flows will permit us to continue paying cash dividends. It is also possible that instead of distributing 100% of our taxable income on an annual basis, we may decide to retain a portion of our taxable income and to pay taxes on such amounts as permitted by the Internal Revenue Service. Payment of dividends is subject to market conditions, our financial condition, including but not limited to, our continued compliance with the provisions of the Second Restated Credit Agreement, our senior unsecured notes and other factors, and therefore is not assured. In particular, the Second Restated Credit Agreement and our senior unsecured notes prohibit the payment of dividends during certain events of default. Regular quarterly dividends paid to our stockholders aggregated $70.8 million, $62.6 million and $56.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. There can be no assurance that we will continue to pay dividends at historical rates. 40 Contractual Obligations Our significant contractual obligations and commitments, excluding extension options and unamortized debt issuance costs, as of December 31, 2021, were comprised of borrowings under the Second Restated Credit Agreement, our senior unsecured notes, operating and finance lease payments due to landlords, estimated environmental remediation expenditures and our funding commitments for capital improvements at certain properties. Our contractual obligations and commitments as of December 31, 2021, exclusive of extension options and unamortized debt issuance costs, are summarized below (in thousands): Less Than One Year One to Three Years Total Three to Five Years More Than Five Years Operating and finance leases Credit agreement Senior unsecured notes Interest on debt (a) Estimated environmental remediation expenditures (b) Capital improvements (c) Total $ 15,736 $ 60,000 525,000 139,297 47,597 7,016 $ 794,646 $ 3,821 $ — — 23,101 6,613 809 2,738 — 400,000 43,331 14,431 — 34,344 $ 140,630 $ 159,172 $ 460,500 3,296 $ 60,000 50,000 32,793 8,683 4,400 5,881 $ — 75,000 40,072 17,870 1,807 (a) For our Second Restated Credit Agreement, which bears interest at variable rates, future interest expense was calculated using the cost of borrowing as of December 31, 2021. (b) Estimated environmental remediation expenditures have been adjusted for inflation and discounted to present value. (c) The actual timing of funding of capital improvements is dependent on the timing of such capital improvement projects and the terms of our leases. Our commitments provide us with the option to either reimburse our tenants, or to offset rent when these capital expenditures are made. Generally, leases with our tenants are triple-net leases with the tenant responsible for the operations conducted at our properties and for the payment of taxes, maintenance, repair, insurance, environmental remediation and other operating expenses. We have no significant contractual obligations that are not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements. We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the Exchange Act. Critical Accounting Policies and Estimates The consolidated financial statements included in this Form 10-K have been prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements. Although we have made estimates, judgments and assumptions regarding future uncertainties relating to the information included in our consolidated financial statements, giving due consideration to the accounting policies selected and materiality, actual results could differ from these estimates, judgments and assumptions and such differences could be material. Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, real estate, receivables, deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long- lived assets, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed. The information included in our consolidated financial statements that is based on estimates, judgments and assumptions is subject to significant change and is adjusted as circumstances change and as the uncertainties become more clearly defined. Our accounting policies are described in Note 1 in “Item 8. Financial Statements and Supplementary Data”. The SEC’s Financial Reporting Release (“FRR”) No. 60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies (“FRR 60”), suggests that companies provide additional disclosure on those accounting policies considered most critical. FRR 60 considers an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant judgment and estimates on the part of management in its application. We believe that our most critical accounting policies relate to revenue recognition and deferred rent receivable, direct financing leases, impairment of long-lived assets, environmental remediation obligations, litigation, income taxes, and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed as described below. 41 Revenue Recognition and Deferred Rent Receivable We earn revenue primarily from operating leases with our tenants. We recognize income under leases with our tenants, on the straight-line method, which effectively recognizes contractual lease payments evenly over the current term of the leases. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. A critical assumption in applying the straight-line accounting method is that the tenant will make all contractual lease payments during the current lease term and that the net deferred rent receivable balance will be collected when the payment is due, in accordance with the annual rent escalations provided for in the leases. We may be required to reserve, or provide reserves for a portion of, the recorded deferred rent receivable if it becomes apparent that the tenant may not make all of its contractual lease payments when due during the current term of the lease. In April 2020, the FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of COVID-19. In this guidance, entities can elect not to apply lease modification accounting with respect to such lease concessions and instead, treat the concession as if it was a part of the existing contract. This guidance is only applicable to COVID-19 related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Some concessions will provide a deferral of payments with no substantive changes to the consideration in the original contract. A deferral affects the timing of cash receipts, but the amount of the consideration is substantially the same as that required by the original contract. The FASB staff provides two ways to account for those deferrals: (1) Account for the concessions as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable. In its income statement, a lessor would continue to recognize income during the deferral period. (2) Account for the deferred payments as variable lease payments. We elected to treat lease concessions with option (1) above for the year ended December 31, 2021. There were no outstanding balances for lease concessions provided as a result of COVID-19 at December 31, 2021. The present value of the difference between the fair market rent and the contractual rent for above-market and below-market leases at the time properties are acquired is amortized into revenues from rental properties over the remaining terms of the in-place leases. Lease termination fees are recognized as other income when earned upon the termination of a tenant’s lease and relinquishment of space in which we have no further obligation to the tenant. The sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which will occur when the buyer has the ability to direct the use of or obtain substantially all of the remaining benefits from the asset. This generally occurs when the transaction closes and consideration is exchanged for control of the property. Direct Financing Leases Income under direct financing leases is included in revenues from rental properties and is recognized over the lease terms using the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties. The investments in direct financing leases represents the investments in leased assets accounted for as direct financing leases. The investments in direct financing leases are increased for interest income earned and amortized over the life of the leases and reduced by the receipt of lease payments. Impairment of Long-Lived Assets Real estate assets represent “long-lived” assets for accounting purposes. We review the recorded value of long-lived assets for impairment in value whenever any events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We may become aware of indicators of potentially impaired assets upon tenant or landlord lease renewals, upon receipt of notices of potential governmental takings and zoning issues, or upon other events that occur in the normal course of business that would cause us to review the operating results of the property. We believe our real estate assets are not carried at amounts in excess of their estimated net realizable fair value amounts. Environmental Remediation Obligations We provide for the estimated fair value of future environmental remediation obligations when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. See “Environmental Matters” below for additional information. Environmental liabilities net of related recoveries are measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. Since environmental exposures are difficult to assess and estimate and knowledge about these liabilities is not known upon the occurrence of a single event, but rather is gained over a continuum of events, we believe that it is appropriate that our accrual estimates are adjusted as the remediation treatment progresses, as circumstances change and as environmental contingencies become more clearly defined and reasonably estimable. A critical assumption in accruing for these liabilities is that the state environmental laws and regulations will be administered and enforced in the future in a manner that is 42 consistent with past practices. Environmental liabilities are estimated net of recoveries of environmental costs from state UST remediation funds, with respect to past and future spending based on estimated recovery rates developed from our experience with the funds when such recoveries are considered probable. A critical assumption in accruing for these recoveries is that the state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices and that future environmental spending will be eligible for reimbursement at historical rates under these programs. We accrue environmental liabilities based on our share of responsibility as defined in our lease contracts with our tenants and under various other agreements with others or if circumstances indicate that our counterparty may not have the financial resources to pay its share of the costs. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenants or other counterparties fail to pay them. In certain environmental matters the effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. The ultimate liabilities resulting from such lawsuits and claims, if any, may be material to our results of operations in the period in which they are recognized. Litigation Legal fees related to litigation are expensed as legal services are performed. We provide for litigation accruals, including certain litigation related to environmental matters (see “Environmental Litigation” below for additional information), when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. If the estimate of the liability can only be identified as a range, and no amount within the range is a better estimate than any other amount, the minimum of the range is accrued for the liability. Income Taxes Our financial results generally do not reflect provisions for current or deferred federal income taxes because we elected to be treated as a REIT under the federal income tax laws effective January 1, 2001. Our intention is to operate in a manner that will allow us to continue to be treated as a REIT and, as a result, we do not expect to pay substantial corporate-level federal income taxes. Many of the REIT requirements, however, are highly technical and complex. If we were to fail to meet the requirements, we may be subject to federal income tax, excise taxes, penalties and interest or we may have to pay a deficiency dividend to eliminate any earnings and profits that were not distributed. Certain states do not follow the federal REIT rules and we have included provisions for these taxes in property costs. Allocation of the Purchase Price of Properties Acquired Upon acquisition of real estate and leasehold interests, we estimate the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above- market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these estimates, we allocate the purchase price to the applicable assets and liabilities. Assumptions used are property and geographic specific and may include, among other things, capitalization rates, market rental rates and EBITDA to rent coverage ratios. Environmental Matters General We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to remediation costs which are incurred for, among other things, removing USTs, excavation of contaminated soil and water, installing, operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance reporting required in connection with contaminated properties. We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have 43 paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenant fails to pay them. The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases, shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant. We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation) during the first five years after the sale of the properties. In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to closure for preexisting unknown environmental contamination. We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation (using a range of 2.0% to 2.75%), and then discount them to present value (using a range of 4.0% to 7.0%). We adjust our environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of December 31, 2021, we had accrued a total of $47.6 million for our prospective environmental remediation obligations. This accrual consisted of (a) $11.4 million, which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36.2 million for future environmental liabilities related to preexisting unknown contamination. As of December 31, 2020, we had accrued a total of $48.1 million for our prospective environmental remediation obligations. This accrual consisted of (a) $11.7 million, which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36.4 million for future environmental liabilities related to preexisting unknown contamination. Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1.7 million, $1.8 million and $2.0 million of net accretion expense was recorded for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in environmental expenses. In addition, during the years ended December 31, 2021, 2020 and 2019, we recorded credits to environmental expenses aggregating $1.8 million, $3.1 million and $5.4 million, respectively, where decreases in estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental expenses also include project management fees, legal fees and environmental litigation accruals. 44 During the years ended December 31, 2021 and 2020, we increased the carrying values of certain of our properties by $3.0 million and $2.6 million, respectively, due to changes in estimated environmental remediation costs. The recognition and subsequent changes in estimates in environmental liabilities and the increase or decrease in carrying values of the properties are non-cash transactions which do not appear on our consolidated statements of cash flows. Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a 10-year period if the increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as the remaining lease term for properties we lease from others. Depreciation and amortization expense related to capitalized asset retirement costs in our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, were $4.0 million, $4.0 million and $4.1 million, respectively. Capitalized asset retirement costs were $39.7 million (consisting of $24.1 million of known environmental liabilities and $15.6 million of reserves for future environmental liabilities) as of December 31, 2021, and $39.6 million (consisting of $23.6 million of known environmental liabilities and $16.0 million of reserves for future environmental liabilities) as of December 31, 2020. We recorded impairment charges aggregating $3.1 million and $3.5 million for the years ended December 31, 2021 and 2020, respectively, for capitalized asset retirement costs. Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental contingencies become more clearly defined and reasonably estimable. Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or adjustments to the amounts recorded, for environmental remediation liabilities. In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that time for preexisting unknown environmental liabilities and new environmental events. The policy has a $50.0 million aggregate limit and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy was to obtain protection predominantly for significant events. In addition to the environmental insurance policy purchased by the Company, we also took assignment of certain environmental insurance policies, and rights to reimbursement for claims made thereunder, from Marketing, by order of the U.S. Bankruptcy Court during Marketing’s bankruptcy proceedings. Under these assigned polices, we have received and expect to continue to receive reimbursement of certain remediation expenses for covered claims. In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess of the amount accrued with any certainty; however, we believe that it is possible that the fair value of future actual net expenditures could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation obligations will be reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value can be made. Environmental Litigation We are subject to various legal proceedings and claims which arise in the ordinary course of our business. As of December 31, 2021 and 2020, we had accrued $1.9 million and $4.3 million, respectively, for certain of these matters which we believe were appropriate based on information then currently available. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River and MTBE litigations in the states of Pennsylvania and Maryland, in particular, could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For additional information with respect to these and other pending environmental lawsuits and claims, see “Item 3. Legal Proceedings” and Note 3 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K. Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to interest rate risk, primarily as a result of the Second Restated Credit Agreement which provides for the Revolving Facility in an aggregate principal amount of $300.0 million and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300.0 million. The Second Restated Credit Agreement permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to 0.90% or a LIBOR rate plus a margin of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value 45 ratio at the end of each quarterly reporting period. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a future date. We use borrowings under the Second Restated Credit Agreement to finance acquisitions and for general corporate purposes. Borrowings outstanding at variable interest rates under the Second Restated Credit Agreement as of December 31, 2021, were $60.0 million. Based on our outstanding borrowings under the Second Restated Credit Agreement of $60.0 million for the year ended December 31, 2021, an increase in market interest rates of 1.0% for 2022 would decrease our 2022 net income and cash flows by approximately $0.6 million. This amount was determined by calculating the effect of a hypothetical interest rate change on our borrowings floating at market rates and assumes that the $60.0 million outstanding borrowings under the Second Restated Credit Agreement is indicative of our future average floating interest rate borrowings for 2021 before considering additional borrowings required for future acquisitions or repayment of outstanding borrowings from proceeds of future equity offerings. The calculation also assumes that there are no other changes in our financial structure or the terms of our borrowings. Our exposure to fluctuations in interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our Second Restated Credit Agreement and with increases or decreases in amounts outstanding under borrowing agreements entered into with interest rates floating at market rates. In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments, if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit with JPMorgan Chase Bank, N.A. and these balances, at times, may exceed federally insurable limits. As discussed elsewhere in this report, the COVID-19 pandemic may negatively impact our business and results of operations. As we cannot predict the duration or scope of COVID-19 there is potential for future negative financial impacts to our results that could be material. Our business and results of operations will be, and our financial condition may be, impacted by COVID- 19 pandemic and such impact could be materially adverse. See “Part I. Item. 1A. Risk Factors” in this Annual Report on Form 10- K for additional information. 46 Item 8. Financial Statements and Supplementary Data GETTY REALTY CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Consolidated Balance Sheets as of December 31, 2021 and 2020 Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Page 48 49 50 51 75 47 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, 2021 December 31, 2020 ASSETS: Real Estate: Land Buildings and improvements Investment in direct financing leases, net Construction in progress Real estate held for use Less accumulated depreciation and amortization Real estate held for use, net Real estate held for sale, net Real estate, net Notes and mortgages receivable Cash and cash equivalents Restricted cash Deferred rent receivable Accounts receivable Right-of-use assets - operating Right-of-use assets - finance Prepaid expenses and other assets Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY: Borrowings under credit agreement Senior unsecured notes, net Environmental remediation obligations Dividends payable Lease liability - operating Lease liability - finance Accounts payable and accrued liabilities Total liabilities Commitments and contingencies Stockholders’ equity: Preferred stock, $0.01 par value; 20,000,000 authorized; unissued Common stock, $0.01 par value; 100,000,000 shares authorized; 46,715,734 and 43,605,759 shares issued and outstanding, respectively Additional paid-in capital Dividends paid in excess of earnings Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ 772,088 $ 632,074 71,647 693 1,476,502 (209,040 ) 1,267,462 3,621 1,271,083 14,699 24,738 1,723 46,933 3,538 21,092 379 82,763 1,466,948 $ 60,000 $ 523,850 47,597 19,467 22,980 2,005 45,941 721,840 — 707,613 537,272 77,238 734 1,322,857 (186,964 ) 1,135,893 872 1,136,765 11,280 55,075 1,979 44,155 3,811 24,319 763 71,365 1,349,512 25,000 523,828 48,084 17,332 25,045 3,541 47,081 689,911 — — — 467 818,209 (73,568 ) 745,108 1,466,948 $ 436 722,608 (63,443 ) 659,601 1,349,512 The accompanying notes are an integral part of these consolidated financial statements. 48 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Revenues: Revenues from rental properties Interest on notes and mortgages receivable Total revenues Operating expenses: Property costs Impairments Environmental General and administrative Depreciation and amortization Total operating expenses 2021 Year ended December 31, 2020 2019 $ 153,886 $ 1,522 155,408 144,601 $ 2,745 147,346 137,736 2,919 140,655 22,048 4,404 3,548 20,151 35,518 85,669 23,520 4,258 1,054 17,294 30,191 76,317 24,978 4,012 5,428 15,377 25,161 74,956 Gains on dispositions of real estate 16,718 4,548 1,063 Operating income Other income, net Interest expense Loss on extinguishment of debt Net earnings Basic earnings per common share: Net Earnings Diluted earnings per common share: Net Earnings Weighted average common shares outstanding: Basic Diluted 86,457 75,577 66,762 1,075 (24,672 ) — 62,860 $ 21,129 (26,085 ) (1,233 ) 69,388 $ 7,593 (24,632 ) — 49,723 $ $ 1.37 $ 1.62 $ 1.19 $ 1.37 $ 1.62 $ 1.19 44,782 44,819 42,040 42,070 41,072 41,110 The accompanying notes are an integral part of these consolidated financial statements. 49 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings Adjustments to reconcile net earnings to net cash flow provided by operating activities: Depreciation and amortization expense Impairment charges Gains on dispositions of real estate Loss on extinguishment of debt Deferred rent receivable Allowance for credit loss on notes and mortgages receivable and direct financing leases Amortization of above-market and below-market leases Amortization of investment in direct financing leases Amortization of debt issuance costs Accretion expense Stock-based compensation expense Changes in assets and liabilities: Accounts receivable Prepaid expenses and other assets Environmental remediation obligations Accounts payable and accrued liabilities Net cash flow provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Property acquisitions Capital expenditures Addition to construction in progress Proceeds from dispositions of real estate Deposits for property acquisitions Issuance of notes and mortgages receivable Collection of notes and mortgages receivable Net cash flow used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under credit agreements Repayments under credit agreements Proceeds from senior unsecured notes Repayments under senior unsecured notes Payment for extinguishment of debt Payments of finance lease liability Payments of cash dividends Payments of debt issuance costs Security deposits refunded Payments in settlement of restricted stock units Proceeds from issuance of common stock, net - ATM Net cash flow provided by (used in) financing activities Change in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of year Supplemental disclosures of cash flow information Cash paid during the period for: Interest Income taxes Environmental remediation obligations Non-cash transactions Dividends declared but not yet paid Issuance of notes and mortgages receivable related to property dispositions 2021 Year ended December 31, 2020 2019 $ 62,860 $ 69,388 $ 49,723 35,518 4,404 (16,718 ) — (2,778 ) (132 ) (71 ) 4,846 1,013 1,705 3,997 60 (997 ) (6,335 ) (554 ) 86,818 (194,292 ) (271 ) (312 ) 24,796 3,298 (13,515 ) 10,564 (169,732 ) 175,000 (140,000 ) — — — (645 ) (70,770 ) (2,586 ) (233 ) (730 ) 92,285 52,321 (30,593 ) 57,054 26,461 $ 30,191 4,258 (4,548 ) 1,233 (2,903 ) 368 (314 ) 4,210 1,053 1,841 3,130 (1,048 ) (1,253 ) (9,490 ) (13,289 ) 82,827 (149,955 ) (282 ) (275 ) 5,433 (2,368 ) (2,932 ) 22,962 (127,417 ) 140,000 (135,000 ) 175,000 (100,000 ) (1,233 ) (650 ) (62,626 ) (410 ) (31 ) (257 ) 63,187 77,980 33,390 23,664 57,054 $ 25,161 4,012 (1,063 ) — (3,530 ) — (623 ) 3,526 971 2,006 2,468 (546 ) (503 ) (12,931 ) 8,103 76,774 (87,157 ) (14 ) (365 ) 1,558 (510 ) (464 ) 4,399 (82,553 ) 75,000 (175,000 ) 125,000 — — (542 ) (56,889 ) (556 ) (347 ) (115 ) 14,150 (19,299 ) (25,078 ) 48,742 23,664 2021 Year ended December 31, 2020 2019 23,690 $ 355 4,568 25,651 $ 350 6,355 19,467 17,332 23,030 304 7,544 15,557 $ $ $ 428 $ 792 $ 1,206 The accompanying notes are an integral part of these consolidated financial statements. 50 GETTY REALTY CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of Getty Realty Corp. and its wholly-owned subsidiaries. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). We do not distinguish our principal business or our operations on a geographical basis for purposes of measuring performance. We manage and evaluate our operations as a single segment. All significant intercompany accounts and transactions have been eliminated. Use of Estimates, Judgments and Assumptions The consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the period reported. Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, real estate, receivables, deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long-lived assets, environmental remediation costs, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed. Application of these estimates and assumptions requires exercise of judgment as to future uncertainties and, as a result, actual results could differ materially from these estimates. Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. Such reclassifications had no impact on previously reported net earnings. Real Estate Real estate assets are stated at cost less accumulated depreciation and amortization. For acquisitions of real estate we estimate the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above-market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these estimates, we allocate the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an exit price approach, which contemplates the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assumptions used are property and geographic specific and may include, among other things, capitalization rates, market rental rates, discount rates and EBITDA to rent coverage ratios. We expense transaction costs associated with business combinations in the period incurred. Acquisitions of real estate which do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition costs are capitalized and allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. For additional information regarding property acquisitions, see Note 13 – Property Acquisitions. We capitalize direct costs, including costs such as construction costs and professional services, and indirect costs associated with the development and construction of real estate assets while substantive activities are ongoing to prepare the assets for their intended use. The capitalization period begins when development activities are underway and ends when it is determined that the asset is substantially complete and ready for its intended use. We evaluate the held for sale classification of our real estate as of the end of each quarter. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to sell. When real estate assets are sold or retired, the cost and related accumulated depreciation and amortization is eliminated from the respective accounts and any gain or loss is credited or charged to income. We evaluate real estate sale transactions where we provide seller financing to determine sale and gain recognition in accordance with GAAP. Expenditures for maintenance and repairs are charged to income when incurred. 51 Depreciation and Amortization Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which generally range from 16 to 25 years for buildings and improvements, or the term of the lease if shorter. Asset retirement costs are depreciated over the shorter of the remaining useful lives of USTs or 10 years for asset retirement costs related to environmental remediation obligations, which costs are attributable to the group of assets identified at a property. Leasehold interests and in-place leases are amortized over the remaining term of the underlying lease. Direct Financing Leases Income under direct financing leases is included in revenues from rental properties and is recognized over the lease terms using the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties. The investments in direct financing leases are increased for interest income earned and amortized over the life of the leases and reduced by the receipt of lease payments. We consider direct financing leases to be past-due or delinquent when a contractually required payment is not remitted in accordance with the provisions of the underlying agreement. On June 16, 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments (“ASU 2016-13”). The accounting standard became effective for us and was adopted on January 1, 2020. Upon adoption, we had five unitary leases subject to this standard classified as a direct financing leases with a net investment balance aggregating $82,366,000 prior to the credit loss adjustment. In these direct financing leases, the payment obligations of the lessees are collateralized by real estate properties. Historically, we have had no collection issues related to these direct financing leases; therefore, we assessed the probability of default on these leases based on the lessee’s financial condition, business prospects, remaining term of the lease, expected value of the underlying collateral upon its repossession, and our historical loss experience related to other leases in which we are the lessor. Based on the aforementioned considerations, we estimated a credit loss reserve related to these direct financing leases totaling $578,000, which was recognized as a cumulative adjustment to retained earnings and as a reduction of the investment in direct financing leases balance on our consolidated balance sheets on January 1, 2020. Periods prior to the adoption date that are presented for comparative purposes were not adjusted. During the year ended December 31, 2020, we recorded an allowance for credit losses of $340,000 on our net investments in direct financing leases due to changes in expected economic conditions, which was included within other income in our consolidated statements of operations. In addition, during the year ended December 31, 2021, we reduced our allowance for credit losses by $92,000 on our net investments in direct financing leases due to changes in expected economic conditions, which was included within other income in our consolidated statements of operations. We review our direct financing leases each reporting period to determine whether there were any indicators that the value of our net investments in direct financing leases may be impaired and adjust the allowance for any estimated changes in the credit loss with the resulting change recorded through our consolidated statement of operations. When determining a possible impairment, we take into consideration the collectability of direct financing lease receivables for which a reserve would be required. In addition, we determine whether there has been a permanent decline in the current estimate of the residual value of the property. When we enter into a contract to sell properties that are recorded as direct financing leases, we evaluate whether we believe that it is probable that the disposition will occur. If we determine that the disposition is probable and therefore the property’s holding period is reduced, we record an allowance for credit losses to reflect the change in the estimate of the undiscounted future rents. Accordingly, the net investment balance is written down to fair value. Notes and Mortgages Receivable Notes and mortgages receivable consists of loans originated by us in conjunction with property dispositions and funding provided to tenants in conjunction with property acquisitions and capital improvements. Notes and mortgages receivable are recorded at stated principal amounts. In conjunction with our adoption of ASU 2016-13 on January 1, 2020, we estimate our credit loss reserve for our notes and mortgages receivable using the weighted average remaining maturity (“WARM”) method, which has been identified as an acceptable loss-rate method for estimating credit loss reserves in the FASB Staff Q&A Topic 326, No. 1. The WARM method requires us to reference historic loan loss data across a comparable data set and apply such loss rate to our notes and mortgages portfolio over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. We applied the WARM method for our notes and mortgages portfolio, which share similar risk characteristics. Application of the WARM method to estimate a credit loss reserve requires significant judgment, including (i) the historical loan loss reference data, (ii) the expected timing and amount of loan repayments, and (iii) the current credit quality of our portfolio and our expectations of performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to our portfolio, we used our historical loan performance since the launch of our loan origination business in 2013. Upon adoption of ASU 2016-13 on January 1, 2020, we recorded a credit loss reserve of $309,000, which was recognized as a cumulative adjustment to retained earnings and as a reduction of the aggregate outstanding principal balance of $30,855,000 on the notes and mortgages receivable balance on our consolidated balance sheets on January 1, 2020. Periods prior to the adoption date that are presented for comparative purposes were not adjusted. During the year ended December 31, 2020, we recorded an additional allowance for credit losses of $28,000 on these 52 notes and mortgages receivable due to changes in expected economic conditions, which was included within other income in our consolidated statements of operations. In addition, during the year ended December 31, 2021, we reduced our allowance for credit losses by $40,000 on these notes and mortgages receivable due to changes in expected economic conditions, which was included within other income in our consolidated statements of operations From time to time, we may originate construction loans for the construction of income-producing properties. During the year ended December 31, 2021, we funded construction loans in the amount of $13.5 million. During the year ended December 31, 2021, we exercised our option to purchase two properties for $10.0 million for which we had previously funded construction loans in the amount of $7.8 million, at which time the loans were repaid in full. At December 31, 2021, there were $ 5.7 million of outstanding balances for construction loans. Our construction loans generally provide for funding only during the construction phase, which is typically up to nine months, although our policy is to consider construction periods as long as 24 months. Funds are disbursed based on inspections in accordance with a schedule reflecting the completion of portions of the project. We also review and inspect each property before disbursement of funds during the term of the construction loan. At the end of the construction phase, the construction loan will be repaid with the proceeds from the sale of the property. We have the option to purchase the property at the end of the construction period. Cash and Cash Equivalents We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash equivalents are held in the custody of financial institutions, and these balances, at times, may exceed federally insurable limits. Restricted Cash Restricted cash consists of cash that is contractually restricted or held in escrow pursuant to various agreements with counterparties. At December 31, 2021 and 2020, restricted cash of $1,723,000 and $1,979,000, respectively, consisted of security deposits received from our tenants. Revenue Recognition and Deferred Rent Receivable On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“Topic 606”) using the modified retrospective method applying it to any open contracts as of January 1, 2018. The new guidance provides a unified model to determine how revenue is recognized. To determine the proper amount of revenue to be recognized, we perform the following steps: (i) identify the contract with the customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) a performance obligation is satisfied. Our primary source of revenue consists of revenue from rental properties and tenant reimbursements that is derived from leasing arrangements, which is specifically excluded from the standard, and thus had no material impact on our consolidated financial statements or notes to our consolidated financial statements as of December 31, 2021, 2020 and 2019. Lease payments from operating leases are recognized on a straight-line basis over the term of the leases. The cumulative difference between lease revenue recognized under this method and the contractual lease payment terms is recorded as deferred rent receivable on our consolidated balance sheets. We review our accounts receivable, including its deferred rent receivable, related to base rents, straight-line rents, tenant reimbursements and other revenues for collectability. Our evaluation of collectability primarily consists of reviewing past due account balances and considers such factors as the credit quality of our tenant, historical trends of the tenant, changes in tenant payment terms, current economic trends, including the novel coronavirus (“COVID-19”) pandemic, and other facts and circumstances related to the applicable tenants. In addition, with respect to tenants in bankruptcy, we estimate the probable recovery through bankruptcy claims. If a tenant’s accounts receivable balance is considered uncollectable, we will write off the related receivable balances and cease to recognize lease income, including straight-line rent unless cash is received. If the collectability assessment subsequently changes to probable, any difference between the lease income that would have been recognized if collectability had always been assessed as probable and the lease income recognized to date, is recognized as a current-period adjustment to revenues from rental properties. Our reported net earnings are directly affected by our estimate of the collectability of our accounts receivable. 53 In April 2020, the FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of COVID-19. In this guidance, entities can elect not to apply lease modification accounting with respect to such lease concessions and instead, treat the concession as if it was a part of the existing contract. This guidance is only applicable to COVID-19 related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Some concessions will provide a deferral of payments with no substantive changes to the consideration in the original contract. A deferral affects the timing of cash receipts, but the amount of the consideration is substantially the same as that required by the original contract. The FASB staff provides two ways to account for those deferrals: (1) Account for the concessions as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable. In its income statement, a lessor would continue to recognize income during the deferral period. (2) Account for the deferred payments as variable lease payments. We elected to treat lease concessions with option (1) above for the year ended December 31, 2021. There were no outstanding balances for lease concessions provided as a result of COVID-19 at December 31, 2021. The present value of the difference between the fair market rent and the contractual rent for above-market and below-market leases at the time properties are acquired is amortized into revenues from rental properties over the remaining terms of the in-place leases. Lease termination fees are recognized as other income when earned upon the termination of a tenant’s lease and relinquishment of space in which we have no further obligation to the tenant. The sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which will occur when the buyer has the ability to direct the use of or obtain substantially all of the remaining benefits from the asset. This generally occurs when the transaction closes and consideration is exchanged for control of the property. Impairment of Long-Lived Assets Assets are written down to fair value when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Assets held for disposal are written down to fair value less estimated disposition costs. We recorded impairment charges aggregating $4,404,000, $4,258,000 and $4,012,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Our estimated fair values, as they relate to property carrying values, were primarily based upon (i) estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bids, for which we do not have access to the unobservable inputs used to determine these estimated fair values, and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence (this method was used to determine $964,000 of the $4,404,000 in impairments recognized during the year ended December 31, 2021) and (ii) discounted cash flow models (this method was used to determine $484,000 of the $4,404,000 in impairments recognized during the year ended December 31, 2021). During the year ended December 31, 2021, we recorded the remaining impairments of $2,956,000 of the $4,404,000 due to the accumulation of asset retirement costs as a result of changes in estimates associated with our estimated environmental liabilities which increased the carrying values of certain properties in excess of their fair values. For the years ended December 31, 2021, 2020 and 2019, impairment charges aggregating $919,000, $932,000 and $1,202,000, respectively, were related to properties that were previously disposed of by us. The estimated fair value of real estate is based on the price that would be received from the sale of the property in an orderly transaction between market participants at the measurement date. In general, we consider multiple internal valuation techniques when measuring the fair value of a property, all of which are based on unobservable inputs and assumptions that are classified within Level 3 of the Fair Value Hierarchy. These unobservable inputs include assumed holding periods ranging up to 15 years, assumed average rent increases of 2.0% annually, income capitalized at a rate of 8.0% and cash flows discounted at a rate of 7.0%. These assessments have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future rental rates and operating expenses that could differ materially from actual results in future periods. Where properties held for use have been identified as having a potential for sale, additional judgments are required related to the determination as to the appropriate period over which the projected undiscounted cash flows should include the operating cash flows and the amount included as the estimated residual value. This requires significant judgment. In some cases, the results of whether impairment is indicated are sensitive to changes in assumptions input into the estimates, including the holding period until expected sale. Fair Value of Financial Instruments All of our financial instruments are reflected in the accompanying consolidated balance sheets at amounts which, in our estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values, except those separately disclosed in the notes below. 54 The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates of fair value that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the period reported using a hierarchy (the “Fair Value Hierarchy”) that prioritizes the inputs to valuation techniques used to measure the fair value. The Fair Value Hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels of the Fair Value Hierarchy are as follows: “Level 1” – inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date; “Level 2” – inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and “Level 3” – inputs that are unobservable. Certain types of assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required or elected to be marked-to-market and reported at fair value every reporting period are valued on a recurring basis. Other assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are valued on a non-recurring basis. Environmental Remediation Obligations We record the fair value of a liability for an environmental remediation obligation as an asset and liability when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. Environmental remediation obligations are estimated based on the level and impact of contamination at each property. The accrued liability is the aggregate of our estimate of the fair value of cost for each component of the liability. The accrued liability is net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. Net environmental liabilities are currently measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. We accrue for environmental liabilities that we believe are allocable to other potentially responsible parties if it becomes probable that the other parties will not pay their environmental remediation obligations. Litigation Legal fees related to litigation are expensed as legal services are performed. We provide for litigation accruals, including certain litigation related to environmental matters, when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. If the estimate of the liability can only be identified as a range, and no amount within the range is a better estimate than any other amount, the minimum of the range is accrued for the liability. We accrue our share of environmental litigation liabilities based on our assumptions of the ultimate allocation method and share that will be used when determining our share of responsibility. Income Taxes We file a federal income tax return on which are consolidated our tax items and the tax items of our subsidiaries that are pass- through entities. Effective January 1, 2001, we elected to qualify, and believe that we are operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, we generally will not be subject to federal income tax on qualifying REIT income, provided that distributions to our stockholders equal at least the amount of our taxable income as defined under the Internal Revenue Code. We accrue for uncertain tax matters when appropriate. The accrual for uncertain tax positions is adjusted as circumstances change and as the uncertainties become more clearly defined, such as when audits are settled or exposures expire. Tax returns for the years 2018, 2019 and 2020, and tax returns which will be filed for the year ended 2021, remain open to examination by federal and state tax jurisdictions under the respective statutes of limitations. New Accounting Pronouncements On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. We are currently evaluating the impact the adoption of ASU 2020-04 will have on our consolidated financial statements. NOTE 2. — LEASES As of December 31, 2021, we owned 981 properties and leased 47 properties from third-party landlords. These 1,028 properties are located in 38 states across the United States and Washington, D.C. Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate the businesses. Our triple-net lease tenants are responsible 55 for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental contamination that existed before their leases commenced. For additional information regarding our environmental obligations, see Note 5 – Environmental Obligations. Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the performance of the automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly competitive and can be subject to variability. During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases. We adopted ASU 2016-02 as of January 1, 2019. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. Under ASU 2016-02, lessor accounting will remain similar to lessor accounting under previous GAAP, while aligning with the FASB’s new revenue recognition guidance. For leases in which we are the lessor, we are (i) retaining classification of our historical leases as we are not required to reassess classification upon adoption of the new standard, (ii) expensing indirect leasing costs in connection with new or extended tenant leases, the recognition of which would have been deferred under prior accounting guidance and (iii) aggregating revenue from our lease components and non-lease components (comprised of tenant reimbursements) into revenue from rental properties. Revenues from rental properties for the years ended December 31, 2021, 2020 and 2019, were $153,886,000, $144,601,000 and $137,736,000, respectively. Rental income contractually due from our tenants included in revenues from rental properties was $138,691,000, $128,246,000 and $119,293,000 for the years ended December 31, 2021, 2020 and 2019, respectively. In accordance with GAAP, we recognize rental revenue in amounts which vary from the amount of rent contractually due during the periods presented. As a result, revenues from rental properties include non-cash adjustments recorded for deferred rental revenue due to the recognition of rental income on a straight-line basis over the current lease term, the net amortization of above-market and below-market leases, rental income recorded under direct financing leases using the effective interest method which produces a constant periodic rate of return on the net investments in the leased properties and the amortization of deferred lease incentives (collectively, “Revenue Recognition Adjustments”). Revenue Recognition Adjustments included in revenues from rental properties resulted in a reduction in revenue of $1,964,000 and $895,000, for the year ended December 31, 2021 and 2020, respectively, and increases in revenue of $960,000 for the year ended December 31, 2019. Tenant reimbursements, which are included in revenues from rental properties and which consist of real estate taxes and other municipal charges paid by us which were reimbursed by our tenants pursuant to the terms of triple-net lease agreements, were $17,159,000, $17,250,000 and $17,483,000 for the years ended December 31, 2021, 2020 and 2019, respectively. We incurred $298,000, $351,000 and $373,000 of lease origination costs for the years ended December 31, 2021, 2020 and 2019, respectively. This deferred expense is recognized on a straight-line basis as amortization expense in our consolidated statements of operations over the terms of the various leases. The components of the $71,647,000 investment in direct financing leases as of December 31, 2021 are lease payments receivable of $98,539,000 plus unguaranteed estimated residual value of $13,928,000 less unearned income of $39,994,000 and $826,000 allowance for credit losses. The components of the $77,238,000 investment in direct financing leases as of December 31, 2020 are lease payments receivable of $113,256,000 plus unguaranteed estimated residual value of $13,928,000 less unearned income of $49,028,000 and $918,000 allowance for credit losses. In accordance with ASU 2016-13, we applied changes in loss reserves related to these direct financing leases totaling $578,000, as a cumulative adjustment to retained earnings and as a reduction of the investment in direct financing leases balance on our consolidated balance sheets on January 1, 2020. During the year ended December 31, 2021 and 2020, we recorded a reduction and an additional allowance for credit losses of $92,000 and $340,000, respectively, on our net investments in direct financing leases due to changes in expected economic conditions, which was included within other income in our consolidated statements of operations. 56 Future contractual annual rentals receivable from our tenants, which have terms in excess of one year as of December 31, 2021, are as follows (in thousands): 2022 2023 2024 2025 2026 Thereafter Total Operating Leases Direct Financing Leases $ $ 131,868 $ 131,442 129,834 129,466 116,994 651,396 1,291,000 $ 13,203 13,237 13,380 13,412 10,386 34,921 98,539 For leases in which we are the lessee, ASU 2016-02 requires leases with durations greater than twelve months to be recognized on our consolidated balance sheets. We elected the package of transition provisions available for expired or existing contracts, which allowed us to carryforward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and (iii) initial direct costs. As of January 1, 2019, we recognized operating lease right-of-use assets of $25,561,000 (net of deferred rent expense) and operating lease liabilities of $26,087,000, which were presented on our consolidated financial statements. The right-of-use assets and lease liabilities are carried at the present value of the remaining expected future lease payments. When available, we use the rate implicit in the lease to discount lease payments to present value; however, our current leases did not provide a readily determinable implicit rate. Therefore, we estimated our incremental borrowing rate to discount the lease payments based on information available and considered factors such as interest rates available to us on a fully collateralized basis and terms of the leases. ASU 2016-02 did not have a material impact on our consolidated balance sheets or on our consolidated statements of operations. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. The following presents the lease-related assets and liabilities (in thousands): Assets Right-of-use assets – operating Right-of-use assets – finance Total lease assets Liabilities Lease liability – operating Lease liability – finance Total lease liabilities The following presents the weighted average lease terms and discount rates of our leases: Weighted-average remaining lease term (years) Operating leases Finance leases Weighted-average discount rate Operating leases (a) Finance leases $ $ $ $ December 31, 2021 21,092 379 21,471 22,980 2,005 24,985 8.8 6.8 4.80 % 16.90 % (a) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. 57 The following presents our total lease costs (in thousands): Operating lease cost Finance lease cost Amortization of leased assets Interest on lease liabilities Short-term lease cost Total lease cost The following presents supplemental cash flow information related to our leases (in thousands): Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases Operating cash flows for finance leases Financing cash flows for finance leases As of December 31, 2021, scheduled lease liabilities mature as follows (in thousands): December 31, 2021 4,240 645 615 - 5,500 December 31, 2021 3,255 615 645 $ $ $ $ 2022 2023 2024 2025 2026 Thereafter Total lease payments Less: amount representing interest Present value of lease payments Operating Leases Direct Financing Leases $ $ 3,795 $ 3,695 3,549 3,173 2,963 11,213 28,388 (5,408 ) 22,980 $ 838 586 515 362 265 523 3,089 (1,084 ) 2,005 We have obligations to lessors under non-cancelable operating leases which have terms in excess of one year, principally for convenience store and gasoline station properties. The leased properties have a remaining lease term averaging approximately eight years, including renewal options. Future minimum annual rentals payable under such leases, excluding renewal options, are as follows: 2022 – $3,821,000, 2023 – $3,267,000, 2024 – $2,614,000, 2025 – $1,825,000, 2026 – $1,471,000 and $2,738,000 thereafter. Rent expense, substantially all of which consists of minimum rentals on non-cancelable operating leases, amounted to $3,393,000, $3,769,000 and $4,664,000 for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in property costs. Rent received under subleases for the years ended December 31, 2021, 2020 and 2019, was $7,333,000, $7,892,000 and $8,699,000, respectively, and is included in rental revenue discussed above. Major Tenants As of December 31, 2021, we had four significant tenants by revenue: • We leased 150 properties in three separate unitary leases and two stand-alone leases to subsidiaries of Global Partners LP (NYSE: GLP) (“Global”). In the aggregate, our leases with subsidiaries of Global represented 16% of our total revenues for the years ended December 31, 2021 and 2020. All of our unitary leases with subsidiaries of Global are guaranteed by the parent company. • We leased 128 properties in four separate unitary leases to subsidiaries of ARKO Corp. (NASDAQ: ARKO) (“Arko”). In the aggregate, our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the years ended December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Arko are guaranteed by the parent company. 58 • We leased 78 properties pursuant to three separate unitary leases and one stand-alone lease to Apro, LLC (d/b/a “United Oil”). In the aggregate, our leases with United Oil represented 11% and 12% of our total revenues for the years ended December 31, 2021 and 2020, respectively. • We leased 69 properties pursuant to two separate unitary leases to subsidiaries of Chestnut Petroleum Dist., Inc. (“Chestnut”). In the aggregate, our leases with subsidiaries of Chestnut represented 9% and 10% of our total revenues for the years ended December 31, 2021 and 2020, respectively. The largest of these unitary leases, covering 52 of our properties, is guaranteed by the parent company, its principals and numerous Chestnut affiliates. Getty Petroleum Marketing Inc. Getty Petroleum Marketing Inc. (“Marketing”) was our largest tenant from 1997 until 2012 under a unitary triple-net master lease that was terminated in April 2012 as a consequence of Marketing’s bankruptcy, at which time we either sold or released these properties. As of December 31, 2021, 342 of the properties we own or lease were previously leased to Marketing, of which 310 properties are subject to long-term triple-net leases with petroleum distributors in 14 separate property portfolios and 24 properties are leased as single unit triple-net leases. The leases covering properties previously leased to Marketing are unitary triple-net lease agreements generally with an initial term of 15 years and options for successive renewal terms of up to 20 years. Rent is scheduled to increase at varying intervals during both the initial and renewal terms of the leases. Several of the leases provide for additional rent based on the aggregate volume of fuel sold. In addition, the majority of the leases require the tenants to invest capital in our properties, substantially all of which are related to the replacement of USTs that are owned by our tenants. As of December 31, 2021, we have a remaining commitment to fund up to $6,616,000 in the aggregate with our tenants for our portion of such capital improvements. Our commitment provides us with the option to either reimburse our tenants or to offset rent when these capital expenditures are made. This deferred expense is recognized on a straight-line basis as a reduction of rental revenue in our consolidated statements of operations over the life of the various leases. As part of the triple-net leases for properties previously leased to Marketing, we transferred title of the USTs to our tenants, and the obligation to pay for the retirement and decommissioning or removal of USTs at the end of their useful lives, or earlier if circumstances warranted, was fully or partially transferred to our new tenants. We remain contingently liable for this obligation in the event that our tenants do not satisfy their responsibilities. Accordingly, through December 31, 2021, we removed $13,813,000 of asset retirement obligations and $10,808,000 of net asset retirement costs related to USTs from our balance sheet. The cumulative change of $1,104,000 (net of accumulated amortization of $1,901,000) is recorded as deferred rental revenue and will be recognized on a straight-line basis as additional revenues from rental properties over the terms of the various leases. NOTE 3. — COMMITMENTS AND CONTINGENCIES Credit Risk In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments, if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit with JPMorgan Chase Bank, N.A. and these balances, at times, may exceed federally insurable limits. Legal Proceedings We are involved in various legal proceedings and claims which arise in the ordinary course of our business. As of December 31, 2021 and 2020, we had accrued $1,925,000 and $4,275,000, respectively, for certain of these matters which we believe were appropriate based on information then currently available. We are unable to estimate ranges in excess of the amount accrued with any certainty for these matters. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River, our methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as “MTBE”) litigations in the states of Pennsylvania and Maryland, could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. During the year ended December 31, 2020, we received $21,300,000 for legal litigation settlements. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River. In 2004, the United States Environmental Protection Agency (“EPA”) issued General Notice Letters (“GNL”) to over 100 entities, including us, alleging that they are PRPs at the Diamond Alkali Superfund Site (“Superfund Site”), which includes the former Diamond Shamrock Corporation manufacturing facility located at 80-120 Lister Ave. in Newark, New Jersey and a 17-mile stretch of the Passaic River from Dundee Dam to the Newark Bay and its tributaries (the Lower Passaic River Study Area or “LPRSA”). In May 2007, over 70 GNL recipients, including us, entered into an Administrative Settlement Agreement and Order on Consent (“AOC”) 59 with the EPA to perform a Remedial Investigation and Feasibility Study (“RI/FS”) for the LPRSA, which is intended to address the investigation and evaluation of alternative remedial actions with respect to alleged damages to the LPRSA. Many of the parties to the AOC, including us, are also members of a Cooperating Parties Group (“CPG”). The CPG agreed to an interim allocation formula for purposes of allocating the costs to complete the RI/FS among its members, with the understanding that this interim allocation formula is not binding on the parties in terms of any potential liability for the costs to remediate the LPRSA. The CPG submitted to the EPA its draft RI/FS in 2015, which sets forth various alternatives for remediating the entire 17 miles of the LPRSA. In October 2018, the EPA issued a letter directing the CPG to prepare a streamlined feasibility study for just the upper 9-miles of the LPRSA based on an iterative approach using adaptive management strategies. On December 4, 2020, The CPG submitted a Final Draft Interim Remedy Feasibility Study (“IR/FS”) to the EPA which identifies various targeted dredge and cap alternatives for the upper 9-miles of the LPRSA. On December 11, 2020, the EPA conditionally approved the CPG’s IR/FS for the upper 9-miles of the LPRSA, which recognizes that interim actions and adaptive management may be appropriate before deciding a final remedy. The EPA published the Proposed Plan for the upper 9-mile IR/FS for public comment and subsequently issued a Record of Decision (“ROD”) for the upper 9- mile IR/FS (“Upper 9-mile IR ROD”). There is currently no mechanism in place requiring any parties to implement the Upper 9-mile IR ROD. In addition to the RI/FS activities, other actions relating to the investigation and/or remediation of the LPRSA have proceeded as follows. First, in June 2012, certain members of the CPG entered into an Administrative Settlement Agreement and Order on Consent (“10.9 AOC”) with the EPA to perform certain remediation activities, including removal and capping of sediments at the river mile 10.9 area and certain testing. The EPA also issued a Unilateral Order to Occidental Chemical Corporation (“Occidental”), the former owner/operator of the Diamond Shamrock Corporation facility responsible for the discharge of 2,3,8,8-TCDD (“dioxin”) and other hazardous substances from the Lister facility. The Order directed Occidental to participate and contribute to the cost of the river mile 10.9 work. Concurrent with the CPG’s work on the RI/FS, on April 11, 2014, the EPA issued a draft Focused Feasibility Study (“FFS”) with proposed remedial alternatives to remediate the lower 8-miles of the LPRSA. The FFS was subject to public comments and objections and, on March 4, 2016, the EPA issued a ROD for the lower 8-miles (“Lower 8-mile ROD”) selecting a remedy that involves bank-to-bank dredging and installing an engineered cap with an estimated cost of $1,380,000,000. On March 31, 2016, we and more than 100 other PRPs received from the EPA a “Notice of Potential Liability and Commencement of Negotiations for Remedial Design” (“Notice”), which informed the recipients that the EPA intends to seek an Administrative Order on Consent and Settlement Agreement with Occidental (who the EPA considers the primary contributor of dioxin and other pesticides generated from the production of Agent Orange at its Diamond Shamrock Corporation facility and a discharger of other contaminants of concern (“COCs”) to the Superfund Site for remedial design of the remedy selected in the Lower 8-mile ROD, after which the EPA plans to begin negotiations with “major” PRPs for implementation and/or payment of the selected remedy. The Notice also stated that the EPA believes that some of the PRPs and other parties not yet identified will be eligible for a cash out settlement with the EPA. On September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for the Lower 8-mile ROD. In December 2019, Occidental submitted a report to the EPA on the progress of the remedial design work, which is still ongoing. Occidental has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc. (“Tierra”) for its liability in connection with the Site. Occidental has also asserted that Maxus and Tierra’s parent company, YPF, S.A. (“YPF”) and certain of its affiliates must indemnify Occidental. On June 16, 2016, Maxus and Tierra filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In July 2017, an amended Chapter 11 plan of liquidation became effective and, in connection therewith, Maxus and Tierra entered into a mutual contribution release agreement with certain parties, including us, pertaining to certain past costs, but not future remedy costs. By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements with 20 PRPs to resolve their alleged liability for the remedial actions addressed in the Lower 8-mile ROD, who the EPA stated did not discharge any of the eight hazardous substances identified as a COC in the ROD. The letter also stated that other parties who did not discharge dioxins, furans or polychlorinated biphenyls (which are considered the COCs posing the greatest risk to the river) may also be eligible for cash out settlements, and that the EPA would begin a process for identifying other PRPs for negotiation of future cash out settlements. We were not included in the initial group of 20 parties identified by the EPA for cash out settlements, but we believe we meet the EPA’s criteria for a cash out settlement and should be considered for same in any future discussions. In January 2018, the EPA published a notice of its intent to enter into a final settlement agreement with 15 of the initial group of parties to resolve their respective alleged liability for the Lower 8-mile ROD work, each for a payment to the EPA in the amount of $280,600. In August 2017, the EPA appointed an independent third-party allocation expert to conduct allocation proceedings with most of the remaining recipients of the Notice, which process has concluded leading to an agreement in principle between the EPA and certain of the allocation proceeding participants, including us, concerning a cash-out settlement for the entire 17-mile stretch of the Lower Passaic River and its tributaries, which is subject to negotiation and court approval and entry of a consent decree. On June 30, 2018, Occidental filed a complaint in the United States District Court for the District of New Jersey seeking cost recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act for its alleged expenses with respect to the investigation, design, and anticipated implementation of the remedy for the Lower 8-mile ROD work the (“Occidental lawsuit”). The complaint lists over 120 defendants, including us, many of whom were also named in the EPA’s 2016 Notice. Factual discovery is ongoing, and we are defending the claims consistent with our defenses in the related proceedings. In 60 January 2022, the defendants in the Occidental lawsuit, including us, collectively filed a motion seeking the Court’s permission to file a motion to stay the litigation to allow the related allocation proceedings and resulting settlement discussions with the EPA to continue unencumbered by the time and costs of litigation and discovery that could later be obviated by a settlement. The Court is currently considering whether to rule on this motion for a stay of the proceedings. Based on currently known facts and circumstances, including, among other factors, the agreement in principle with the EPA noted above, anticipated allocations, our belief that there was not any use or discharge of dioxins, furans or polychlorinated biphenyls in connection with our former petroleum storage operations at our former Newark, New Jersey Terminal, and because there are numerous other parties who will likely bear the costs of remediation and/or damages, the Company does not believe that resolution of this matter as relates to the Company is reasonably likely to have a material impact on our results of operations. Nevertheless, in the event the agreement in principle is not approved by the Court, and/or there are one or more adverse determinations related to this matter, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement proceedings and/or possible litigation; hence our ultimate liability in the pending and possible future proceedings pertaining to the LPRSA remains uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. For these reasons, we are unable to estimate a possible loss or range of loss in excess of the amount we have accrued for the Lower Passaic River proceedings as of the date of this Annual Report on Form 10-K, and it is therefore possible that losses related to the Lower Passaic River proceedings could exceed the amounts accrued as of the date hereof, which could cause a material adverse effect on our results of operations. MTBE Litigation – State of Pennsylvania On July 7, 2014, our subsidiary, Getty Properties Corp., was served with a complaint filed by the Commonwealth of Pennsylvania (the “State”) in the Court of Common Pleas, Philadelphia County relating to alleged statewide MTBE contamination in Pennsylvania. The named plaintiff is the State, by and through (then) Pennsylvania Attorney General Kathleen G. Kane (as Trustee of the waters of the State), the Pennsylvania Insurance Department (which governs and administers the Underground Storage Tank Indemnification Fund), the Pennsylvania Department of Environmental Protection (vested with the authority to protect the environment) and the Pennsylvania Underground Storage Tank Indemnification Fund. The complaint names us and more than 50 other petroleum refiners, manufacturers, distributors and retailers of MTBE or gasoline containing MTBE who are alleged to have distributed, stored and sold MTBE gasoline in Pennsylvania. The complaint seeks compensation for natural resource damages and for injuries sustained as a result of “defendants’ unfair and deceptive trade practices and act in the marketing of MTBE and gasoline containing MTBE.” The plaintiffs also seek to recover costs paid or incurred by the State to detect, treat and remediate MTBE from public and private water wells and groundwater. The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design; strict liability – failure to warn; public nuisance; negligence; trespass; and violation of consumer protection law. The case was filed in the Court of Common Pleas, Philadelphia County, but was removed by defendants to the United States District Court for the Eastern District of Pennsylvania and then transferred to the United States District Court for the Southern District of New York so that it may be managed as part of the ongoing MTBE MDL proceedings. In November 2015, plaintiffs filed a Second Amended Complaint naming additional defendants and adding factual allegations against the defendants. We joined with other defendants in the filing of a motion to dismiss the claims against us, which was granted in part and denied in part. We are vigorously defending the claims made against us. Our ultimate liability in this proceeding is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. MTBE Litigation – State of Maryland On December 17, 2017, the State of Maryland, by and through the Attorney General on behalf of the Maryland Department of Environment and the Maryland Department of Health (the “State of Maryland”), filed a complaint in the Circuit Court for Baltimore City related to alleged statewide MTBE contamination in Maryland. The complaint was served upon us on January 19, 2018. The complaint names us and more than 60 other defendants. The complaint seeks compensation for natural resource damages and for injuries sustained as a result of the defendants’ unfair and deceptive trade practices in the marketing of MTBE and gasoline containing MTBE. The plaintiffs also seek to recover costs paid or incurred by the State of Maryland to detect, investigate, treat and remediate MTBE from public and private water wells and groundwater, punitive damages and the award of attorneys’ fees and litigation costs. The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design; strict liability – failure to warn; strict liability for abnormally dangerous activity; public nuisance; negligence; trespass; and violations of Titles 4, 7 and 9 of the Maryland Environmental Code. On February 14, 2018, defendants removed the case to the United States District Court for the District of Maryland. We are vigorously defending the claims made against us. Our ultimate liability, if any, in this proceeding is uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet known. 61 NOTE 4. — DEBT The amounts outstanding under our Second Restated Credit Agreement and our senior unsecured notes are as follows (in thousands): Revolving Facility Series B Notes Series C Notes Series D Notes Series E Notes Series F Notes Series G Notes Series H Notes Series I Notes Series J Notes Series K Notes Total debt Unamortized debt issuance costs, net (a) Total debt, net Maturity Date October 2025 June 2023 February 2025 June 2028 June 2028 September 2029 September 2029 September 2029 November 2030 November 2030 November 2030 Interest Rate December 31, 2021 December 31, 2020 1.40 % $ 5.35 % 4.75 % 5.47 % 5.47 % 3.52 % 3.52 % 3.52 % 3.43 % 3.43 % 3.43 % $ 60,000 $ 75,000 50,000 50,000 50,000 50,000 50,000 25,000 100,000 50,000 25,000 585,000 (3,880 ) 581,120 $ 25,000 75,000 50,000 50,000 50,000 50,000 50,000 25,000 100,000 50,000 25,000 550,000 (2,307 ) 547,693 (a) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2021 and 2020, of $2,730 and $1,135, respectively, are included in prepaid expenses and other assets on our consolidated balance sheets. Credit Agreement On June 2, 2015, we entered into a $225,000,000 senior unsecured credit agreement (the “Credit Agreement”) with a group of banks led by Bank of America, N.A. The Credit Agreement consisted of a $175,000,000 unsecured revolving credit facility (the “Revolving Facility”) and a $50,000,000 unsecured term loan (the “Term Loan”). On March 23, 2018, we entered into an amended and restated credit agreement (as amended, the “Restated Credit Agreement”) amending and restating our Credit Agreement. Pursuant to the Restated Credit Agreement, we (a) increased the borrowing capacity under the Revolving Facility from $175,000,000 to $250,000,000, (b) extended the maturity date of the Revolving Facility from June 2018 to March 2022, (c) extended the maturity date of the Term Loan from June 2020 to March 2023 and (d) amended certain financial covenants and provisions. On September 19, 2018, we entered into an amendment (the “First Amendment”) of our Restated Credit Agreement. The First Amendment modifies the Restated Credit Agreement to, among other things: (i) reflect that we had previously entered into (a) an amended and restated note purchase and guarantee agreement with The Prudential Insurance Company of America (“Prudential”) and certain of its affiliates and (b) a note purchase and guarantee agreement with the Metropolitan Life Insurance Company (“MetLife”) and certain of its affiliates; and (ii) permit borrowings under each of the Revolving Facility and the Term Loan at three different interest rates, including a rate based on the LIBOR Daily Floating Rate (as defined in the First Amendment) plus the Applicable Rate (as defined in the First Amendment) for such facility. On September 12, 2019, in connection with prepayment of the Term Loan, we entered into a consent and amendment (the “Second Amendment”) of our Restated Credit Agreement. The Second Amendment modifies the Restated Credit Agreement to, among other things, (a) increase our borrowing capacity under the Revolving Facility from $250,000,000 to $300,000,000 and (b) decrease lender commitments under the Term Loan to $0. On October 27, 2021, we entered into second amended and restated credit agreement (as amended, the “Second Restated Credit Agreement”) amending and restating our Restated Credit Agreement. Pursuant to the Second Restated Credit Agreement, we (i) extended the maturity date of the Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the Revolving Facility and (iii) amended certain financial covenants and other provisions. The Second Restated Credit Agreement provides for the Revolving Facility in an aggregate principal amount of $300,000,000 and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300,000,000, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under the terms of the Revolving Facility. The Revolving Facility matures October 27, 2025, subject to two six-month extensions (for a total of 12 months) exercisable at the Company's option. The Company's exercise of an extension option is subject to the absence of any default under the Second 62 Restated Credit Agreement and the Company's compliance with certain conditions, including the payment of extension fees to the Lenders under the Revolving Facility and that no default or event of default shall have occurred and be continuing under the terms of the Revolving Facility. The Second Restated Credit Agreement reflects reductions in the interest rates for borrowings under the Revolving Facility and permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to 0.90% or a LIBOR rate plus a margin of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a future date. The per annum rate of the unused line fee on the undrawn funds under the Revolving Facility is 0.15% to 0.25% based on the Company’s daily unused portion of the available Revolving Facility. The Second Restated Credit Agreement contains customary financial covenants, including covenants with respect to total leverage, secured leverage and unsecured leverage ratios, fixed charge and interest coverage ratios, and minimum tangible net worth, as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The Second Restated Credit Agreement contains customary events of default, including cross default provisions with respect to the Company’s existing senior unsecured notes. Any event of default, if not cured or waived in a timely manner, could result in the acceleration of the Company’s indebtedness under the Second Restated Credit Agreement and could also give rise to an event of default and the acceleration of the Company’s existing senior unsecured notes. Senior Unsecured Notes On December 4, 2020, we entered into a fifth amended and restated note purchase and guarantee agreement (the “Fifth Amended and Restated Prudential Agreement”) with Prudential and certain of its affiliates amending and restating our existing fourth amended and restated note purchase and guarantee agreement. Pursuant to the Fifth Amended and Restated Prudential Agreement, we issued $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”) to Prudential, and completed the early redemption of our 6.0% Series A Guaranteed Senior Notes due February 25, 2021 in the original aggregate principal amount of $100.0 million. The other senior unsecured notes outstanding under the fourth amended and restated note purchase and guarantee agreement with Prudential, including (i) $75.0 million of 5.35% Series B Guaranteed Senior Notes due June 2, 2023 (the “Series B Notes”), (ii) $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25, 2025 (the “Series C Notes”), (iii) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), and (e) $50.0 million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”) remain outstanding under the Fifth Amended and Restated Prudential Agreement. On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended and Restated AIG Agreement”) with American General Life Insurance Company amending and restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated AIG Agreement, we issued $50.0 million of 3.43% Series J Guaranteed Senior Notes due November 25, 2030 (the “Series J Notes”) to AIG. The $50.0 million of 3.52% Series G Guaranteed Senior Notes due September 12, 2029 (the “Series G Notes”) that were outstanding under the existing note purchase and guarantee agreement remain outstanding under the First Amended and Restated AIG Agreement. On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended and Restated MassMutual Agreement”) with Massachusetts Mutual Life Insurance Company and certain of its affiliates amending and restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated MassMutual Agreement, we issued $25.0 million of 3.43% Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”) to MassMutual. The $25.0 million of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) that were outstanding under the existing note purchase and guarantee agreement outstanding under the First Amended and Restated MassMutual. On June 21, 2018, we entered into a note purchase and guarantee agreement (the “MetLife Note Agreement”) with MetLife and certain of its affiliates. Pursuant to the MetLife Note Agreement, we issued $50,000,000 of 5.47% Series E Guaranteed Senior Notes due June 21, 2028 (the “Series E Notes). On October 27, 2021, we entered into amendments to each of the note purchase and guarantee agreements governing the senior unsecured notes in order to conform the financial covenants therein to the corresponding provisions in the Second Restated Credit Agreement. Covenants The Second Restated Credit Agreement and our senior unsecured notes contain customary financial covenants such as leverage, coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. The Second Restated Credit Agreement and our senior unsecured notes also contain customary events of default, including cross defaults to each other, change of control and failure to maintain REIT status (provided that the senior 63 unsecured notes require a mandatory offer to prepay the notes upon a change in control in lieu of a change of control event of default). Any event of default, if not cured or waived in a timely manner, would increase by 200 basis points (2.00%) the interest rate we pay under the Second Restated Credit Agreement and our senior unsecured notes, and could result in the acceleration of our indebtedness under the Second Restated Credit Agreement and our senior unsecured notes. We may be prohibited from drawing funds under the Revolving Facility if there is any event or condition that constitutes an event of default under the Second Restated Credit Agreement or that, with the giving of any notice, the passage of time, or both, would be an event of default under the Second Restated Credit Agreement. As of December 31, 2021, we are in compliance with all of the material terms of the Second Restated Credit Agreement and our senior unsecured notes, including the various financial covenants described herein. Debt Maturities As of December 31, 2021, scheduled debt maturities, including balloon payments, are as follows (in thousands): 2022 2023 2024 2025 2026 Thereafter Total Revolving Facility Senior Unsecured Notes Total $ $ — $ — — 60,000 — — 60,000 $ — $ 75,000 — 50,000 — 400,000 525,000 $ — 75,000 — 110,000 — 400,000 585,000 (a) The Revolving Facility matures in October 2025. Subject to the terms of the Second Restated Credit Agreement and our continued compliance with its provisions, we have the option to extend the term of the Revolving Facility for two six months periods to October 2026. NOTE 5. — ENVIRONMENTAL OBLIGATIONS We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to remediation costs which are incurred for, among other things, removing USTs, excavation of contaminated soil and water, installing, operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance reporting required in connection with contaminated properties. We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenant fails to pay them. The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the 64 first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases, shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant. We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation) during the first five years after the sale of the properties. In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to closure for preexisting unknown environmental contamination. We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation (using a range of 2.0% to 2.75%), and then discount them to present value (using a range of 4.0% to 7.0%). We adjust our environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of December 31, 2021, we had accrued a total of $47,597,000 for our prospective environmental remediation obligations. This accrual consisted of (a) $11,382,000, which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36,215,000 for future environmental liabilities related to preexisting unknown contamination. As of December 31, 2020, we had accrued a total of $48,084,000 for our prospective environmental remediation obligations. This accrual consisted of (a) $11,718,000, which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36,366,000 for future environmental liabilities related to preexisting unknown contamination. Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1,705,000, $1,841,000 and $2,006,000 of net accretion expense was recorded for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in environmental expenses. In addition, during the years ended December 31, 2021, 2020 and 2019, we recorded credits to environmental expenses aggregating $1,768,000, $3,136,000 and $5,386,000, respectively, where decreases in estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental expenses also include project management fees, legal fees and environmental litigation accruals. For the years ended December 31, 2021, 2020 and 2019, changes in environmental estimates aggregating, $147,000, $154,000 and $324,000, respectively, were related to properties that were previously disposed of by us. During the years ended December 31, 2021 and 2020, we increased the carrying values of certain of our properties by $3,004,000 and $2,596,000, respectively, due to changes in estimated environmental remediation costs. The recognition and subsequent changes in estimates in environmental liabilities and the increase or decrease in carrying values of the properties are non- cash transactions which do not appear on our consolidated statements of cash flows. Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a 10-year period if the increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as the remaining lease term for properties we lease from others. Depreciation and amortization expense related to capitalized asset retirement costs in our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, were $4,004,000, $4,020,000 and $4,132,000, respectively. Capitalized asset retirement costs were $39,670,000 (consisting of $24,075,000 of known environmental liabilities and $15,595,000 of reserves for future environmental liabilities) as of December 31, 2021, and $39,610,000 (consisting of $23,573,000 of known environmental liabilities and $16,037,000 of reserves for future environmental 65 liabilities) as of December 31, 2020. We recorded impairment charges aggregating $3,074,000 and $3,502,000 for the years ended December 31, 2021 and 2020, respectively, for capitalized asset retirement costs. Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental contingencies become more clearly defined and reasonably estimable. Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or adjustments to the amounts recorded, for environmental remediation liabilities. In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that time for preexisting unknown environmental liabilities and new environmental events. The policy has a $50,000,000 aggregate limit and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy was to obtain protection predominantly for significant events. In addition to the environmental insurance policy purchased by the Company, we also took assignment of certain environmental insurance policies, and rights to reimbursement for claims made thereunder, from Marketing, by order of the U.S. Bankruptcy Court during Marketing’s bankruptcy proceedings. Under these assigned polices, we have received and expect to continue to receive reimbursement of certain remediation expenses for covered claims. In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess of the amount accrued with any certainty; however, we believe that it is possible that the fair value of future actual net expenditures could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation obligations will be reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value can be made. NOTE 6. — INCOME TAXES Net cash paid for income taxes for the years ended December 31, 2021, 2020 and 2019, of $355,000, $350,000 and $304,000, respectively, includes amounts related to state and local income taxes for jurisdictions that do not follow the federal tax rules, which are provided for in property costs in our consolidated statements of operations. Earnings and profits (as defined in the Internal Revenue Code) are used to determine the tax attributes of dividends paid to stockholders and will differ from income reported for consolidated financial statements purposes due to the effect of items which are reported for income tax purposes in years different from that in which they are recorded for consolidated financial statements purposes. The federal tax attributes of the common dividends for the years ended December 31, 2021, 2020 and 2019, were: ordinary income of 73.0%, 88.7% and 96.6%, capital gain distributions of 5.5%, 3.4% and 3.4% and non-taxable distributions of 21.5%, 7.9% and 0.0%, respectively. To qualify for taxation as a REIT, we, among other requirements such as those related to the composition of our assets and gross income, must distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a corresponding receipt of cash. We cannot provide any assurance that our cash flows will permit us to continue paying cash dividends. Should the Internal Revenue Service successfully assert that our earnings and profits were greater than the amount distributed, we may fail to qualify as a REIT; however, we may avoid losing our REIT status by paying a deficiency dividend to eliminate any remaining earnings and profits. We may have to borrow money or sell assets to pay such a deficiency dividend. Although tax returns for the years 2018, 2019 and 2020, and tax returns which will be filed for the year ended 2021, remain open to examination by federal and state tax jurisdictions under the respective statute of limitations, we have not currently identified any uncertain tax positions related to those years and, accordingly, have not accrued for uncertain tax positions as of December 31, 2021 or 2020. However, uncertain tax matters may have a significant impact on the results of operations for any single fiscal year or interim period. 66 NOTE 7. — STOCKHOLDERS’ EQUITY A summary of the changes in stockholders’ equity for the years ended December 31, 2021, 2020 and 2019, is as follows (in thousands except per share amounts): BALANCE, DECEMBER 31, 2018 Net earnings Dividends declared — $1.42 per share Shares issued pursuant to ATM Program, net Shares issued pursuant to dividend reinvestment Stock-based compensation and settlements BALANCE, DECEMBER 31, 2019 Cumulative-effect adjustment for the adoption of new accounting pronouncement Net earnings Dividends declared — $1.50 per share Shares issued pursuant to ATM Program, net Shares issued pursuant to dividend reinvestment Stock-based compensation and settlements BALANCE, DECEMBER 31, 2020 Net earnings Dividends declared — $1.58 per share Shares issued pursuant to ATM Program, net Shares issued pursuant to dividend reinvestment Stock-based compensation and settlements BALANCE, DECEMBER 31, 2021 Common Stock Shares Amount 40,855 $ Additional Paid-in Capital 409 $ 638,178 $ Dividends Paid in Excess of Earnings 449 47 17 41,368 $ 14,146 4 1,450 1 — 2,353 414 $ 656,127 $ $ 2,208 14 16 43,606 $ 63,165 22 443 — — 2,873 436 $ 722,608 $ 3,043 3 64 46,716 $ 30 — 1 92,255 80 3,266 467 $ 818,209 $ Total (57,423 ) $ 581,164 49,723 49,723 (59,402 ) (59,402 ) 14,150 — 1,451 — 2,353 — (67,102 ) $ 589,439 (886 ) 69,388 (64,843 ) — — — (886 ) 69,388 (64,843 ) 63,187 443 2,873 (63,443 ) $ 659,601 62,860 (72,985 ) — — — 62,860 (72,985 ) 92,285 80 3,267 (73,568 ) $ 745,108 On March 1, 2021 and July 19, 2021, our Board of Directors granted 192,550 and 3,500 restricted stock units (“RSU” or “RSUs”), respectively, under our Amended and Restated 2004 Omnibus Incentive Compensation Plan. On March 1, 2020, and December 14, 2020, our Board of Directors granted 176,050 and 15,000 of RSUs under our Amended and Restated 2004 Omnibus Incentive Compensation Plan. ATM Program In March 2018, we established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $125,000,000 through a consortium of banks acting as agents. The 2018 ATM Program was terminated in January 2021. In February 2021, we established a new at-the-market equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $250,000,000 through a consortium of banks acting as agents. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent. In connection with the expansion of the ATM Program, we may also sell shares of common stock under forward sale agreements. The use of a forward sale agreement would allow us to lock in a price on the sale of shares of common stock at the time the agreement is executed, but defer receiving the proceeds from the sale until a later date. During the years ended December 31, 2021 and 2020, we issued 3,043,000 and 2,208,000 shares of common stock and received net proceeds of $92,285,000 and $63,187,000, respectively, under the 2018 ATM Program and ATM Program. Future sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us. We have not entered into any forward sale agreements. 67 Dividends For the year ended December 31, 2021, we paid regular quarterly dividends of $70,770,000 or $1.56 per share. For the year ended December 31, 2020, we paid regular quarterly dividends of $62,626,000 or $1.48 per share. Dividend Reinvestment Plan Our dividend reinvestment plan provides our common stockholders with a convenient and economical method of acquiring additional shares of common stock by reinvesting all or a portion of their dividend distributions. During the years ended December 31, 2021 and 2020, we issued 2,681 and 14,229 shares of common stock, respectively, under the dividend reinvestment plan and received proceeds of $80,000 and $443,000, respectively. Stock-Based Compensation Compensation cost for our stock-based compensation plans using the fair value method was $3,997,000, $3,130,000 and $2,468,000 for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in general and administrative expense in our consolidated statements of operations. NOTE 8. — EMPLOYEE BENEFIT PLANS The Getty Realty Corp. 2004 Omnibus Incentive Compensation Plan (the “2004 Plan”) provided for the grant of restricted stock, restricted stock units (“RSUs”), performance awards, dividend equivalents, stock payments and stock awards to all employees and members of the Board of Directors. In May 2014, an Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “Restated Plan”) was approved at our annual meeting of stockholders. The Restated Plan maintained the 2004 Plan’s authorization to grant awards with respect to an aggregate of 1,000,000 shares of common stock, extended the term to May 2019 and increased the aggregate maximum number of shares of common stock that may be subject to awards granted during any calendar year to 100,000. In May 2017, the Second Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “Second Restated Plan”) was approved at our annual meeting of stockholders, in order to, among other things, (i) increase by 500,000 to a total of 1,500,000 the aggregate number of shares that the Company may issue under awards granted pursuant to the Second Restated Plan; (ii) increase from 100,000 to 200,000 the maximum number of shares that may be subject to awards made in a calendar year to all participants under the Second Restated Plan; and (iii) extended the term of the Second Restated Plan to May 2022. In April 2021, the Third Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “Third Restated Plan”) was approved at our annual meeting of stockholders, in order to, among other things: (i) increase by 2,500,000, to a total of 4,000,000 the aggregate number of shares that the Company may issue under awards granted pursuant to the Third Restated Plan; (ii) remove the limit on the maximum number of shares that may be subject to awards made in a calendar year to all participants under the Third Restated Plan; (iii) include a minimum restriction period of one year for all awards (subject to certain exceptions); (iv) extend the term of the Restated Plan until February 22, 2031. RSUs awarded under the 2004 Plan, the Restated Plan, the Second Restated Plan and the Third Restated Plan vest on a cumulative basis ratably over a five-year period with the first 20% vesting occurring on the first anniversary of the date of the grant. We awarded to employees and directors 196,050, 191,050 and 156,750 RSUs and dividend equivalents in 2021, 2020 and 2019, respectively. RSUs granted before 2009 provide for settlement upon termination of employment with the Company or termination of service from the Board of Directors. RSUs granted in 2009 and thereafter provide for settlement upon the earlier of 10 years after the grant date (or the tenth anniversary of the first vesting date for RSU’s granted in 2016-2018) or termination of employment with the Company. On the settlement date each vested RSU will have a value equal to one share of common stock and may be settled, at the sole discretion of the Compensation Committee, in cash or by the issuance of one share of common stock. The RSUs do not provide voting or other stockholder rights unless and until the RSU is settled for a share of common stock. The RSUs vest starting one year from the date of grant, on a cumulative basis at the annual rate of 20% of the total number of RSUs covered by the award. The dividend equivalents represent the value of the dividends paid per common share multiplied by the number of RSUs covered by the award. For the years ended December 31, 2021, 2020 and 2019, dividend equivalents aggregating approximately $1,485,000, $1,279,000 and $997,000, respectively, were charged against retained earnings when common stock dividends were declared. 68 The following is a schedule of the activity relating to RSUs outstanding: RSUs OUTSTANDING AT DECEMBER 31, 2018 Granted Settled Cancelled RSUs OUTSTANDING AT DECEMBER 31, 2019 Granted Settled Cancelled RSUs OUTSTANDING AT DECEMBER 31, 2020 Granted Settled Cancelled RSUs OUTSTANDING AT DECEMBER 31, 2021 Number of RSUs Outstanding Fair Value Amount Average Per RSU 573,575 156,750 $ (28,300 ) $ — $ 702,025 191,050 $ (24,250 ) $ (31,350 ) $ 837,475 196,050 $ (112,125 ) $ — $ 921,400 5,203,000 $ 943,800 $ — $ 5,534,000 $ 701,500 $ 904,552 $ 5,594,000 $ 3,293,000 $ — $ 33.19 33.35 — 28.97 28.93 28.85 28.53 29.37 — The fair values of the RSUs were determined based on the closing market price of our stock on the date of grant. The fair value of the grants is recognized as compensation expense ratably over the five-year vesting period of the RSUs. Compensation expense related to RSUs for the years ended December 31, 2021, 2020 and 2019, was $3,976,000, $3,109,000 and $2,447,000, respectively, and is included in general and administrative expense in our consolidated statements of operations. As of December 31, 2021, there was $10,739,000 of unrecognized compensation cost related to RSUs granted under the 2004 Plan, which cost is expected to be recognized over a weighted average period of approximately four years. The aggregate intrinsic value of the 921,400 outstanding RSUs and the 456,190 vested RSUs as of December 31, 2021, was $29,568,000 and $14,639,000, respectively. The following is a schedule of the vesting activity relating to RSUs outstanding: RSUs VESTED AT DECEMBER 31, 2018 Vested Settled RSUs VESTED AT DECEMBER 31, 2019 Vested Settled RSUs VESTED AT DECEMBER 31, 2020 Vested Settled RSUs VESTED AT DECEMBER 31, 2021 Number of RSUs Vested Fair Value 289,020 88,415 $ (28,300 ) $ 349,135 95,750 $ (24,250 ) $ 420,635 147,680 $ (112,125 ) $ 456,190 2,906,200 943,800 2,637,000 701,500 4,739,000 3,293,000 We have a retirement and profit sharing plan with deferred 401(k) savings plan provisions (the “Retirement Plan”) for employees meeting certain service requirements and a supplemental plan for executives (the “Supplemental Plan”). Under the terms of these plans, the annual discretionary contributions to the plans are determined by the Compensation Committee of the Board of Directors. Also, under the Retirement Plan, employees may make voluntary contributions and we have elected to match an amount equal to fifty percent of such contributions but in no event more than three percent of the employee’s eligible compensation. Under the Supplemental Plan, a participating executive may receive an amount equal to 10 percent of eligible compensation, reduced by the amount of any contributions allocated to such executive under the Retirement Plan. Contributions, net of forfeitures, under the retirement plans approximated $379,000, $353,000 and $327,000 for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are included in general and administrative expense in our consolidated statements of operations. For the year ended December 31, 2021 and 2019, we distributed $95,000 and $30,000, respectively from the Supplemental Plan to former officers of the Company. There were no distributions from the Supplemental Plan for the year ended December 31, 2020. 69 NOTE 9. — EARNINGS PER COMMON SHARE Basic and diluted earnings per common share gives effect, utilizing the two-class method, to the potential dilution from the issuance of shares of our common stock in settlement of RSUs which provide for non-forfeitable dividend equivalents equal to the dividends declared per common share. Basic and diluted earnings per common share is computed by dividing net earnings less dividend equivalents attributable to RSUs by the weighted average number of common shares outstanding during the year. Diluted earnings per common share, also gives effect to the potential dilution from the exercise of stock options utilizing the treasury stock method. There were no options outstanding as of December 31, 2021, 2020 and 2019. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method (in thousands except per share data): (in thousands): Net earnings Less dividend equivalents attributable to RSUs outstanding Net earnings attributable to common stockholders used in basic and diluted earnings per share calculation Weighted average common shares outstanding: Basic Incremental shares from stock-based compensation Diluted Basic earnings per common share Diluted earnings per common share $ $ NOTE 10. — FAIR VALUE MEASUREMENTS Debt Instruments 2021 $ Year ended December 31, 2020 62,860 $ (1,437 ) 69,388 $ (1,355 ) 2019 49,723 (997 ) 61,423 68,033 48,726 44,782 37 44,819 1.37 $ 1.37 $ 42,040 30 42,070 1.62 $ 1.62 $ 41,072 38 41,110 1.19 1.19 As of December 31, 2021 and 2020, the carrying value of the borrowings under the Second Restated Credit Agreement approximated fair value. As of December 31, 2021 and 2020, the fair value of the borrowings under senior unsecured notes was $561,600,000 and $549,800,000, respectively. The fair value of the borrowings outstanding as of December 31, 2021 and 2020, was determined using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, risk profile and borrowings outstanding, which are based on unobservable inputs within Level 3 of the Fair Value Hierarchy. Supplemental Retirement Plan We have mutual fund assets that are measured at fair value on a recurring basis using Level 1 inputs. We have a Supplemental Retirement Plan for executives. The amounts held in trust under the Supplemental Retirement Plan using Level 2 inputs may be used to satisfy claims of general creditors in the event of our or any of our subsidiaries’ bankruptcy. We have liability to the executives participating in the Supplemental Retirement Plan for the participant account balances equal to the aggregate of the amount invested at the executives’ direction and the income earned in such mutual funds. The following summarizes as of December 31, 2021, our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy (in thousands): Assets: Mutual funds Liabilities: Deferred compensation Level 1 Level 2 Level 3 Total $ $ 1,168 $ — $ — $ 1,168 — $ 1,168 $ — $ 1,168 The following summarizes as of December 31, 2020, our assets and liabilities measured at fair value on a recurring basis by level within the Fair Value Hierarchy (in thousands): Assets: Mutual funds Liabilities: Deferred compensation Level 1 Level 2 Level 3 Total 970 $ — $ — $ 970 — $ 970 $ — $ 970 $ $ 70 Real Estate Assets We have certain real estate assets that are measured at fair value on a non-recurring basis using Level 3 inputs as of December 31, 2021 and 2020, of $1,102,000 and $1,979,000, respectively, where impairment charges have been recorded. Due to the subjectivity inherent in the internal valuation techniques used in estimating fair value, the amounts realized from the sale of such assets may vary significantly from these estimates. For information regarding the valuation techniques and unobservable inputs used when assessing impairments of real estate assets, see Note 1 - Summary of Significant Accounting Policies. NOTE 11. —ASSETS HELD FOR SALE We evaluate the held for sale classification of our real estate as of the end of each quarter. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to sell. As of December 31, 2021 and 2020, there were 13 and three properties, respectively, that met criteria to be classified as held for sale. Real estate held for sale consisted of the following at December 31, 2021 and 2020 (in thousands): Land Buildings and improvements Accumulated depreciation and amortization Real estate held for sale, net Year ended December 31, 2021 2020 $ $ 2,949 $ 2,247 5,196 (1,575 ) 3,621 $ 486 483 969 (97 ) 872 During the year ended December 31, 2021, we sold 16 properties, in separate transactions, which resulted in an aggregate gain of $16,408,000, included in gain on dispositions of real estate, on our consolidated statements of operations. We also received funds from property condemnations resulting in a gain of $478,000 and realized a loss of $168,000 related to lease expirations, included in gain on dispositions of real estate, on our consolidated statements of operations. During the year ended December 31, 2020, we sold 11 properties, in separate transactions, which resulted in an aggregate gain of $4,368,000, included in gain on dispositions of real estate, on our consolidated statements of operations. We also received funds from property condemnations resulting in a gain of $180,000, included in gain on dispositions of real estate, on our consolidated statements of operations. NOTE 12. — QUARTERLY FINANCIAL DATA The following is a summary of the quarterly results of operations for the years ended December 31, 2021 and 2020 (unaudited as to quarterly information) (in thousands, except per share amounts): Three Months Ended Year Ended December 31, 2021 Revenues from rental properties Net earnings Diluted earnings per common share: Net earnings Year Ended December 31, 2020 Revenues from rental properties Net earnings Diluted earnings per common share: Net earnings March 31, $ $ 36,951 $ 17,927 $ June 30, September 30, December 31, 39,005 18,032 39,667 $ 14,011 $ 38,263 $ 12,890 $ $ 0.40 $ 0.28 $ 0.30 $ 0.38 March 31, $ $ 34,650 $ 12,700 $ June 30, September 30, December 31, 36,421 33,831 37,194 $ 11,884 $ 36,336 $ 10,973 $ $ 0.30 $ 0.26 $ 0.27 $ 0.77 71 NOTE 13. — PROPERTY ACQUISITIONS 2021 During the twelve months ended December 31, 2021, we acquired fee simple interests in 97 properties for an aggregate purchase price of $194,292,000. In September 2021 and November 2021, we acquired fee simple interests in a total of 22 convenience stores located in the Charlotte (NC), Raleigh (NC) and other metropolitan areas in the Southeast for an aggregate purchase price of $65,457,000 and entered into a unitary lease at the closing of the transactions. We funded the transaction with available cash and funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with four five-year renewal options. The unitary lease requires our tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase annually beginning in year three of the initial term and each year of the renewal terms of the lease. We accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $40,935,000 of the purchase price to land, $20,242,000 to buildings and improvements, $5,375,000 to in-place leases and $1,095,000 to below-market leases which is accounted for as a deferred liability. In May 2021, we acquired fee simple interests in 46 oil change centers located throughout Michigan and Ohio and subject to existing, individual leases for an aggregate purchase price of $31,018,000. We funded the transaction with available cash and funds available under our Revolving Facility. The leases had approximately 11.5 years of initial term remaining as of the date of acquisition and include three five-year renewal options. The leases require our tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase every five years during the initial and renewal terms of the lease. We accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $4,551,000 of the purchase price to land, $22,539,000 to buildings and improvements, $3,120,000 to in-place leases, $2,224,000 to above-market leases, and $1,416,000 to below-market leases which is accounted for as a deferred liability. On multiple dates in March, April, May, July, September and November 2021, we acquired fee simple interests in a total of ten car wash properties in the Cincinnati (OH), Lansing (MI) and Lexington (KY) metropolitan areas for an aggregate purchase price of $35,002,000 and entered into a single unitary lease at the closing of the transactions. We funded the transactions with available cash and funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year renewal options. The unitary lease requires our tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase annually during the initial and renewal terms of the lease. We accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $6,266,000 of the purchase price to land, $25,805,000 to buildings and improvements, and $2,931,000 to in-place leases. In addition, during the twelve months ended December 31, 2021, we acquired fee simple interests in seven car wash properties, five oil change centers, three convenience stores, three tire service centers and one quick service restaurant in various individual transactions for an aggregate purchase price of $62,815,000. We accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $20,781,000 of the purchase price to land, $36,554,000 to buildings and improvements and $5,119,000 to in-place leases, $606,000 to above-market leases and $244,000 to below-market leases which is accounted for as a deferred liability. 2020 During the twelve months ended December 31, 2020, we acquired fee simple interest in eight convenience stores and 26 car wash properties for an aggregate purchase price of $149,955,000. In February 2020, we acquired fee simple interests in ten car wash properties located in the Kansas City metropolitan area for an aggregate purchase price of $50,303,000 and entered into a unitary lease at the closing of the transactions. We funded the transactions through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase annually during the initial and renewal terms of the lease. We accounted for the acquisition of the properties as an asset acquisition. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $4,775,000 of the purchase price to land, $41,093,000 to buildings and improvements, $3,727,000 to in-place leases, $1,955,000 to above-market leases and $1,247,000 to below-market leases, which is accounted for as a deferred liability. 72 In August 2020, we acquired fee simple interests in seven car wash properties located in the San Antonio metropolitan area for an aggregate purchase price of $28,302,000 and entered into a unitary lease at the closing of the transaction. We funded the transaction through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase on the third anniversary of the commencement date and annually thereafter during the initial and renewal terms of the lease. We accounted for the acquisition of the properties as an asset acquisition. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $5,335,000 of the purchase price to land, $21,093,000 to buildings and improvements, $2,396,000 to in-place leases and $522,000 to below-market leases, which is accounted for as a deferred liability. In October 2020, we acquired fee simple interests in six convenience stores located throughout the state of Texas for an aggregate purchase price of $28,722,000 and entered into a unitary lease at the closing of the transaction. We funded the transaction through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is scheduled to increase on the fifth and tenth anniversary of the commencement date during the initial and renewal terms of the lease. We accounted for the acquisition of the properties as an asset acquisition. We estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $16,561,000 of the purchase price to land, $9,595,000 to buildings and improvements and $2,566,000 to in-place leases. In addition, during the year ended December 31, 2020, we acquired fee simple interests in nine car wash properties and two convenience stores in various individual transactions for an aggregate purchase price of $42,628,000. We accounted for these acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets for each of these acquisitions (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $13,601,000 of the purchase price to land, $26,032,000 to buildings and improvements and $2,995,000 to in-place leases. NOTE 14. — ACQUIRED INTANGIBLE ASSETS Acquired above-market (when we are a lessor) and below-market leases (when we are a lessee) are included in prepaid expenses and other assets and had a balance of $6,164,000 and $3,859,000 (net of accumulated amortization of $6,572,000 and $6,047,000, respectively) at December 31, 2021 and 2020, respectively. Acquired above-market (when we are lessee) and below-market (when we are lessor) leases are included in accounts payable and accrued liabilities and had a balance of $19,827,000 and $18,787,000 (net of accumulated amortization of $23,356,000 and $21,641,000, respectively) at December 31, 2021 and 2020, respectively. When we are a lessor, above-market and below-market leases are amortized and recorded as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental revenue over the remaining term of the associated lease in place at the time of purchase. When we are a lessee, above-market and below-market leases are amortized and recorded as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental expense over the remaining term of the associated lease in place at the time of purchase. Rental income included amortization from acquired leases of $1,221,000, $1,438,000 and $1,955,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Rent expense included amortization from acquired leases of $31,000, $97,000 and $333,000 for the years ended December 31, 2021, 2020 and 2019, respectively. In-place leases are included in prepaid expenses and other assets and had a balance of $60,928,000 and $49,031,000 (net of accumulated amortization of $21,435,000 and $16,788,000, respectively) at December 31, 2021 and 2020, respectively. The value associated with in-place leases and lease origination costs are amortized into depreciation and amortization expense over the remaining life of the lease. Depreciation and amortization expense included amortization from in-place leases of $4,647,000, $3,745,000 and $3,134,000 for the years ended December 31, 2021, 2020 and 2019, respectively. 73 The amortization for acquired intangible assets during the next five years and thereafter, assuming no early lease terminations, is as follows: As Lessor: Year ending December 31, 2022 2023 2024 2025 2026 Thereafter Above-Market Leases Below-Market Leases In-Place Leases $ $ 597,000 $ 597,000 583,000 524,000 524,000 3,339,000 6,164,000 $ 1,748,000 $ 1,658,000 1,658,000 1,635,000 1,550,000 11,578,000 19,827,000 $ 4,143,000 4,061,000 3,993,000 3,941,000 3,892,000 40,898,000 60,928,000 NOTE 15. — SUBSEQUENT EVENTS In preparing our consolidated financial statements, we have evaluated events and transactions occurring after December 31, 2021, for recognition or disclosure purposes. Based on this evaluation, there were no significant subsequent events, other than as described below, from December 31, 2021, through the date the financial statements were issued. On February 22, 2022, we entered into (i) an amended and restated note purchase and guarantee agreement (the “Sixth Amended and Restated Prudential Agreement”) with The Prudential Insurance Company of America and certain of its affiliates (collectively, “Prudential”), (ii) an amended and restated note purchase and guarantee agreement (the “Second Amended and Restated AIG Agreement”) with American General Life Insurance Company (“AIG”), (iii) an amended and restated note purchase and guarantee agreement (the “Second Amended and Restated MassMutal Agreement”) with Massachusetts Mutual Life Insurance Company and certain of its affiliates (collectively, “MassMutual”), and (iv) a note purchase and guarantee agreement (the “New York Life Agreement”) with New York Life Insurance Company and certain of its affiliates (collectively, “New York Life”). Together, the Sixth Amended and Restated Prudential Agreement, the Second Amended and Restated AIG Agreement, the Second Amended and Restated MassMutal Agreement, and the New York Life Agreement are the “Note Purchase Agreements”. Pursuant to the Sixth Amended and Restated Prudential Agreement, we will issue $80,000,000 of 3.65% Series Q Guaranteed Senior Notes due January 20, 2033 (the “Series Q Notes”) to Prudential on January 20, 2023. Pursuant to the Second Amended and Restated AIG Agreement, we issued $55,000,000 of 3.45% Series L Guaranteed Senior Notes due February 22, 2032 (the “Series L Notes”) to AIG. Pursuant to the Second Amended and Restated MassMutual Agreement, we issued $20,000,000 of 3.45% Series M Guaranteed Senior Notes due February 22, 2032 (the “Series M Notes”) to MassMutual, and will issue $20,000,000 of 3.65% Series O Guaranteed Senior Notes due January 20, 2033 (the “Series O Notes”) to MassMutual on January 20, 2023. Pursuant to the New York Life Agreement, we issued $25,000,000 of 3.45% Series N Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) to New York Life, and will issue $25,000,000 of 3.65% Series P Guaranteed Senior Notes due January 20, 2033 (the “Series P Notes”) to New York Life on January 20, 2023. The Note Purchase Agreements contain customary financial covenants such as leverage, coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. The Note Purchase Agreements also contain customary events of default, including default under the Second Restated Credit Agreement and failure to maintain REIT status. Any event of default, if not cured or waived, could result in the acceleration of our indebtedness under the Note Purchase Agreements and could also give rise to an event of default under, and result in the acceleration of our obligations under, the Second Restated Credit Agreement. We used the net proceeds from the issuance of the Series L Notes, Series M Notes and Series N Notes to repay all amounts outstanding on the Revolving Facility and for general corporate purposes, including to fund investment activity. We will use the net proceeds from the issuance of the Series O Notes, Series P Notes and Series Q Notes to prepay in full our $75,000,000 5.35% Series B Notes due June 2, 2023 and for general corporate purposes, including to fund investment activity. The foregoing descriptions of the Note Purchase Agreements do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of such documents, copies of which will be filed as Exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ending on March 31, 2022. 74 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Getty Realty Corp. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item 8, and the financial statement schedules listed in the index appearing under Item 15(a)(2), of Getty Realty Corp. and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 75 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Purchase Price Allocation for Asset Acquisitions As described in Notes 1 and 13 to the consolidated financial statements, during the year ended December 31, 2021, the Company acquired fee simple interests in 97 properties which were accounted for as asset acquisitions for an aggregate purchase price of $194,292,000. For acquired properties accounted for as asset acquisitions management estimates the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above-market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these estimates, management allocates the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an exit price approach, which contemplates the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation of the applicable assets and liabilities involves the use of significant estimates and assumptions related to capitalization rates, market rental rates, discount rates, and the EBITDA-to- rent coverage ratios. The principal considerations for our determination that performing procedures relating to the purchase price allocation for asset acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements for purchase price allocations, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures related to these fair value measurements, (ii) significant auditor judgment was necessary to evaluate the audit evidence for the relevant significant assumptions relating to the tangible and intangible assets, such as the capitalization rates, market rental rates, discount rates, and EBITDA-to-rent coverage ratios, and (iii) the audit effort included the involvement of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price accounting, including controls over the development of significant inputs and assumptions used in the estimated fair values of tangible and intangible assets. These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in testing the process used by management to develop fair value estimates of acquired tangible and intangible assets, which involved evaluating the appropriateness of the valuation methods used and the reasonableness of the significant assumptions related to capitalization rates, market rental rates, discount rates, and EBITDA-to-rent coverage ratios. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. Testing the process used by management involved testing the completeness and accuracy of data provided by management. 76 Environmental Remediation Obligations As described in Notes 1 and 5 to the consolidated financial statements, as of December 31, 2021 management has accrued a total of $47,597,000 for their prospective environmental remediation obligations. Management records the fair value for an environmental remediation obligation as an asset and liability when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. Environmental remediation obligations are estimated based on the level and impact of contaminations at each property. Management measures their environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation and discounted to present value. The principal considerations for our determination that performing procedures relating to environmental remediation obligations is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements for the environmental remediation obligations, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures related to these fair value measurements, (ii) significant auditor judgment was necessary to evaluate the significant assumption and audit evidence relating to the projections of future net cash flows and estimated remediation costs and (iii) the audit effort included the involvement of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of the environmental remediation obligation, including controls over the development of the significant inputs and assumptions related to estimated remediation costs. These procedures also included, among others, testing the process used by management to develop fair value estimates of environmental remediation obligations, which involved evaluating the appropriateness of the methods and testing the completeness and accuracy of the data provided by management. Evaluating the reasonableness of the estimated remediation costs assumption included considering whether the assumption was consistent with external market data and evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the significant assumptions related to estimated remediation costs. /s/ PricewaterhouseCoopers LLP New York, New York February 24, 2022 We have served as the Company’s auditor since at least 1975. We have not been able to determine the specific year we began serving as auditor of the Company. 77 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or furnished pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of December 31, 2021, at the reasonable assurance level. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment under the framework in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2021. The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in “Item 8. Financial Statements and Supplementary Data”. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter to which this report relates that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None 78 Item 10. Directors, Executive Officers and Corporate Governance PART III Information with respect to our executive officers is incorporated herein by reference to information under the heading “Executive Officers” in the Proxy Statement. Information with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to information under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement. Information with respect to directors, the audit committee and the audit committee financial expert, and procedures by which stockholders may recommend nominees to the board of directors in response to this item is incorporated herein by reference to information under the headings “Election of Directors” and “Directors’ Meetings, Committees and Executive Officers” in the Proxy Statement. Item 11. Executive Compensation Information in response to this item is incorporated herein by reference to information under the heading “Executive Compensation” in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information in response to this item is incorporated herein by reference to information under the heading “Beneficial Ownership of Capital Stock” and “Executive Compensation – Compensation Discussion and Analysis – Equity Compensation – Equity Compensation Plan Information” in the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence There were no such relationships or transactions to report for the year ended December 31, 2021. Information with respect to director independence is incorporated herein by reference to information under the heading “Directors’ Meetings, Committees and Executive Officers – Independence of Directors” in the Proxy Statement. Item 14. Principal Accountant Fees and Services Information in response to this item is incorporated herein by reference to information under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement. 79 Item 15. Exhibits and Financial Statement Schedules (a) (1) Financial Statements PART IV Information in response to this Item is included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. (a) (2) Financial Statement Schedules The following Financial Statement Schedules are included beginning on page 77 of this Annual Report on Form 10-K. Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2021, 2020 and 2019 Schedule III — Real Estate and Accumulated Depreciation and Amortization as of December 31, 2021 Schedule IV — Mortgage Loans on Real Estate as of December 31, 2021 (a) (3) Exhibits Information in response to this Item is incorporated herein by reference to the Exhibit Index on page 96 of this Annual Report on Form 10-K. Item 16. Form 10-K Summary None. 80 GETTY REALTY CORP. and SUBSIDIARIES SCHEDULE II — VALUATION and QUALIFYING ACCOUNTS and RESERVES for the years ended December 31, 2021, 2020 and 2019 (in thousands) December 31, 2021: Allowance for accounts receivable December 31, 2020: Allowance for accounts receivable December 31, 2019: Allowance for accounts receivable Balance at Beginning of Year Additions Deductions Balance at End of Year $ $ $ — $ — $ — $ — $ — $ — $ 2,094 $ 480 $ 2,574 $ — — — 81 GETTY REALTY CORP. and SUBSIDIARIES SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION As of December 31, 2021 (in thousands) The summarized changes in real estate assets and accumulated depreciation are as follows: Investment in real estate: Balance at beginning of year Acquisitions and capital expenditures Impairments Sales and condemnations Lease expirations/settlements Balance at end of year Accumulated depreciation and amortization: Balance at beginning of year Depreciation and amortization Impairments Sales and condemnations Lease expirations/settlements Balance at end of year 2021 2020 2019 1,246,588 $ 182,110 (5,409 ) (12,595 ) (643 ) 1,410,051 $ 1,113,651 $ 141,240 (5,324 ) (2,603 ) (376 ) 1,246,588 $ 1,043,106 80,518 (4,252 ) (2,246 ) (3,475 ) 1,113,651 187,061 $ 30,126 (1,382 ) (4,256 ) (934 ) 210,615 $ 165,892 $ 25,869 (1,066 ) (929 ) (2,705 ) 187,061 $ 150,691 21,573 (240 ) (546 ) (5,586 ) 165,892 $ $ $ $ 82 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Phenix City, AL Troy, AL Fayetteville, AR Fayetteville, AR Hope, AR Jacksonville, AR Jonesboro, AR Lake Charles, AR Lake Charles, AR Little Rock, AR Little Rock, AR Marion, AR Pine Bluff, AR Rogers, AR Sulphur, AR Texarkana, AR Buckeye, AZ Chandler, AZ Gilbert, AZ Gilbert, AZ Gilbert, AZ Gilbert, AZ Glendale, AZ Mesa, AZ Mesa, AZ Mesa, AZ Peoria, AZ Phoenix, AZ Phoenix, AZ Phoenix, AZ Queen Creek, AZ San Tan Valley, AZ Sierra Vista, AZ Sierra Vista, AZ Tucson, AZ Tucson, AZ Tucson, AZ Tucson, AZ Tucson, AZ Alhambra, CA Bellflower, CA Benicia, CA Chula Vista, CA Coachella, CA Cotati, CA Fillmore, CA Grass Valley, CA Harbor City, CA $ 1,670 $ 2,595 2,266 2,867 1,472 1,526 2,985 1,069 1,468 978 2,763 1,991 2,985 927 777 1,592 3,928 1,838 1,448 1,602 3,112 3,204 1,722 1,503 2,185 3,169 1,331 1,943 2,177 2,415 2,868 4,022 1,765 4,440 1,261 1,301 1,303 2,085 3,652 6,591 1,369 2,224 2,385 2,235 6,072 1,354 1,485 4,442 728 $ 1,918 629 896 473 796 2,655 449 466 443 2,266 584 819 394 402 534 1,594 577 465 806 1,519 1,365 544 664 573 1,164 339 632 645 1,982 1,613 1,473 1,496 2,591 597 744 713 598 728 513 459 1,166 1,496 1,018 2,064 404 632 845 1,670 $ 2,595 2,266 2,867 1,472 1,526 2,985 1,069 1,468 978 2,763 1,991 2,985 927 777 1,592 3,928 1,838 1,448 1,602 3,112 3,204 1,722 1,503 2,185 3,169 1,331 1,943 2,177 2,415 2,868 4,022 1,765 4,440 1,261 1,301 1,303 2,085 3,652 6,591 1,369 2,224 2,385 2,235 6,072 1,354 1,485 4,442 942 $ 0 $ - 677 - 1,637 - 1,971 999 - 730 - 330 - - 620 - 1,002 535 - - 497 - 1,407 - 2,166 533 - - 375 - 1,058 - 2,334 - 1,261 983 - - 796 - 1,593 - 1,839 - 1,178 - 839 - 1,612 - 2,005 - 992 - 1,311 - 1,532 433 - - 1,255 - 2,549 - 269 - 1,849 664 - 557 - - 590 - 1,487 - 2,924 - 6,078 - 910 - 1,058 - 889 - 1,217 - 4,008 950 - - 853 - 3,597 83 Date of Initial Leasehold or Acquisition Investment (1) 2019 2021 2018 2018 2018 2021 2007 2018 2018 2018 2019 2021 2018 2018 2018 2018 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2018 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2019 2007 2007 2014 2007 2015 2007 2015 2019 112 32 117 166 88 13 1,597 88 86 93 283 10 148 83 89 104 376 163 129 220 385 346 146 177 155 284 99 123 172 406 416 386 340 590 158 195 190 170 193 80 314 817 518 687 748 276 236 147 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Building and Improvements Total Cost Accumulated Depreciation Hercules, CA Hesperia, CA Hesperia, CA Indio, CA Indio, CA La Palma, CA La Puente, CA Lakeside, CA Lakewood, CA Los Angeles, CA Oakland, CA Ontario, CA Phelan, CA Pomona, CA Pomona, CA Riverside, CA Riverside, CA Sacramento, CA Sacramento, CA Sacramento, CA San Dimas, CA San Jose, CA San Leandro, CA Shingle Springs, CA Stockton, CA Stockton, CA Torrance, CA Aurora, CO Boulder, CO Broomfield, CO Broomfield, CO Castle Rock, CO Colorado Springs, CO Colorado Springs, CO Denver, CO Englewood, CO Golden, CO Golden, CO Greenwood Village, CO Highlands Ranch, CO Lakewood, CO Littleton, CO Lone Tree, CO Longmont, CO Louisville, CO Monument, CO Morrison, CO Superior, CO $ 6,900 $ 1,643 2,055 1,250 2,727 1,971 7,615 3,715 2,612 6,612 5,434 6,613 4,611 1,497 2,347 2,130 2,737 3,193 4,247 5,942 1,941 5,412 5,978 4,751 1,187 3,001 5,386 2,874 3,900 1,785 2,380 5,269 1,382 3,274 2,157 2,495 4,641 6,151 4,077 4,356 2,349 4,139 6,612 3,619 6,605 3,828 5,081 3,748 Land 0 $ 6,018 $ 849 - 492 - - 302 - 1,486 - 1,389 - 6,405 - 2,695 - 1,804 - 5,006 - 4,123 - 4,523 - 3,276 - 674 - 1,916 - 1,619 - 1,216 - 2,207 - 2,604 - 4,233 - 749 - 4,219 - 5,078 - 3,489 - 627 - 1,460 - 4,017 - 2,284 - 2,875 - 1,388 - 1,496 (128 ) 3,141 - 756 - 2,865 - 1,579 - 2,207 - 3,247 - 4,201 - 2,889 - 2,921 - 1,541 - 2,272 - 5,125 - 2,315 - 5,228 - 2,798 - 3,018 - 2,477 84 Date of Initial Leasehold or Acquisition Investment (1) 2021 2007 2015 2015 2015 2007 2015 2015 2019 2015 2015 2015 2015 2019 2019 2015 2014 2015 2015 2015 2007 2015 2015 2015 2015 2015 2019 2017 2015 2017 2017 2015 2017 2017 2017 2017 2015 2015 2015 2015 2015 2015 2015 2015 2015 2017 2015 2015 5 520 688 369 507 394 519 415 123 682 548 887 579 122 72 259 563 427 629 700 748 545 404 533 243 601 185 160 394 118 216 819 161 118 164 95 555 817 452 584 312 758 631 554 574 304 867 516 882 $ 794 1,563 948 1,241 582 1,210 1,020 808 1,606 1,311 2,090 1,335 823 431 511 1,521 986 1,643 1,709 1,192 1,193 900 1,262 560 1,541 1,369 590 1,025 397 884 2,000 626 409 578 288 1,394 1,950 1,188 1,435 808 1,867 1,487 1,304 1,377 1,030 2,063 1,271 6,900 $ 1,643 2,055 1,250 2,727 1,971 7,615 3,715 2,612 6,612 5,434 6,613 4,611 1,497 2,347 2,130 2,737 3,193 4,247 5,942 1,941 5,412 5,978 4,751 1,187 3,001 5,386 2,874 3,900 1,785 2,380 5,141 1,382 3,274 2,157 2,495 4,641 6,151 4,077 4,356 2,349 4,139 6,612 3,619 6,605 3,828 5,081 3,748 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Building and Improvements Total Cost Accumulated Depreciation Thornton, CO Westminster, CO Avon, CT Bridgeport, CT Bridgeport, CT Bridgeport, CT Bristol, CT Brookfield, CT Cheshire, CT Darien, CT Durham, CT Ellington, CT Hamden, CT Hartford, CT Meriden, CT Middletown, CT New Haven, CT New Haven, CT New Haven, CT Newington, CT North Haven, CT Norwalk, CT Norwalk, CT Old Greenwich, CT Plymouth, CT Shelton, CT South Windham, CT South Windsor, CT Stamford, CT Stamford, CT Stamford, CT Suffield, CT Wallingford, CT Waterbury, CT Waterbury, CT Waterbury, CT Watertown, CT West Haven, CT Westport, CT Willimantic, CT Wilton, CT Windsor Locks, CT Windsor Locks, CT Washington, DC Washington, DC Callahan, FL Largo, FL Orlando, FL $ 5,003 $ 1,457 731 313 350 377 1,594 58 490 667 994 1,295 645 665 1,532 133 217 539 1,413 954 90 511 - - 931 3,679 644 545 507 603 507 237 551 469 515 804 925 1,215 604 717 519 1,031 1,434 848 941 2,894 2,064 868 Land 0 $ 2,722 $ 752 - 403 50 204 298 228 330 246 391 - 1,036 20 483 267 (17 ) 434 267 - - 842 - 527 - 432 - 989 - 131 429 141 297 351 209 569 (264 ) 620 - 365 617 332 39 402 693 620 1,219 - 605 - 1,645 598 337 330 393 330 201 335 305 335 516 567 790 393 466 338 670 1,400 1,055 418 - - 664 - 2,056 - 1,143 401 1,398 - 16 103 450 603 - - - - - - 12 - 208 - 33 85 Date of Initial Leasehold or Acquisition Investment (1) 2015 2015 2002 1985 1985 1985 2004 1985 1985 1985 2004 2004 2018 2004 2004 1987 1985 1985 1985 2004 1982 1985 1988 1969 2004 2021 2004 2004 1985 1985 1985 2004 2004 2004 2004 2004 2004 2004 1985 2004 1985 2004 2004 2013 2013 2017 2019 2000 928 279 316 320 364 434 383 434 124 490 994 311 17 160 376 341 287 367 376 229 209 210 189 403 224 30 837 151 185 277 505 541 159 113 124 201 262 292 214 172 359 248 1,529 186 138 230 113 445 2,281 $ 705 378 407 452 522 558 521 206 500 994 453 118 233 543 431 373 397 580 334 342 218 291 599 326 2,034 1,444 208 193 313 627 639 216 164 180 288 358 425 223 251 389 361 1,779 430 277 838 921 500 5,003 $ 1,457 781 611 680 768 1,594 541 473 934 994 1,295 645 665 1,532 562 514 748 1,149 954 707 550 693 1,219 931 3,679 2,042 545 523 706 957 840 551 469 515 804 925 1,215 616 717 727 1,031 2,834 848 941 2,894 2,064 901 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Yulee, FL Augusta, GA Augusta, GA Columbus, GA Hinesville, GA Perry, GA Haleiwa, HI Honolulu, HI Honolulu, HI Honolulu, HI Honolulu, HI Kaneohe, HI Kaneohe, HI Waianae, HI Waianae, HI Waipahu, HI Bolingbrook, IL Prospect Heights, IL Roselle, IL Merrillville, IN Schererville, IN Kansas City, KS Leavenworth, KS Lenexa, KS Merriam, KS Olathe, KS Overland Park, KS Overland Park, KS Topeka, KS Bowling Green, KY Lexington, KY Lexington, KY Louisville, KY Louisville, KY Owensboro, KY Bossier City, LA Arlington, MA Auburn, MA Auburn, MA Auburn, MA Auburn, MA Barre, MA Bedford, MA Bellingham, MA Bellingham, MA Bradford, MA Burlington, MA Burlington, MA $ 1,963 $ 1,843 3,150 1,617 995 1,724 1,522 1,071 1,539 1,769 9,211 1,364 1,978 1,520 1,997 2,458 3,814 1,547 2,851 1,911 1,519 4,666 1,110 1,144 4,659 4,658 945 4,620 1,200 3,153 3,195 3,195 3,356 4,450 3,810 2,181 518 369 600 625 725 536 1,350 734 3,961 650 600 1,250 1,393 $ 766 2,864 633 750 412 464 120 320 577 1,017 542 721 872 1,126 1,513 2,859 849 1,110 1,693 1,250 4,335 904 674 3,916 4,160 592 3,109 1,005 2,654 2,519 2,392 2,538 3,096 2,799 848 208 360 - - - 200 - 331 1,919 - - - 1,963 $ 1,843 3,150 1,617 995 1,724 1,522 1,101 1,539 1,769 9,211 1,364 2,194 1,520 1,997 2,458 3,814 1,547 2,851 1,911 1,519 4,666 1,110 1,144 4,659 4,658 945 4,620 1,200 3,153 3,195 3,195 3,356 4,450 3,810 2,181 546 600 600 625 725 548 1,350 807 3,961 650 600 1,250 30 570 $ 0 $ - 1,077 286 - 984 - 245 - - 1,312 - 1,058 981 - 1,219 - 1,192 - 8,194 822 - 216 1,473 - 648 - 871 - 945 - 955 698 - - 1,741 218 - 269 - 331 - 206 - 470 - 743 - 498 - - 353 - 1,511 195 - 499 - 676 - 803 - - 818 - 1,354 - 1,011 - 1,333 338 240 600 625 725 348 - 1,350 476 - 2,042 650 - - 600 - 1,250 28 231 - - - 12 73 86 Date of Initial Leasehold or Acquisition Investment (1) 2017 2019 2017 2019 2019 2017 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2021 2018 2019 2021 2021 2020 2021 2021 2020 2020 2021 2020 2021 2020 2021 2021 2019 2021 2019 2017 1985 1991 2011 2011 2011 1991 2011 1985 2019 2011 2011 2011 333 111 641 100 74 119 357 95 215 371 665 378 462 561 726 954 64 139 151 6 5 356 4 3 312 336 2 185 4 325 89 85 324 181 524 230 200 302 - - - 152 - 320 219 - - - Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Falmouth, MA Foxborough, MA Gardner, MA Gardner, MA Gardner, MA Hyde Park, MA Leominster, MA Littleton, MA Lowell, MA Lynn, MA Marlborough, MA Maynard, MA Melrose, MA Methuen, MA Methuen, MA Newton, MA Peabody, MA Peabody, MA Randolph, MA Revere, MA Rockland, MA Salem, MA Seekonk, MA Sterling, MA Sutton, MA Tewksbury, MA Tewksbury, MA Upton, MA Wakefield, MA Walpole, MA Watertown, MA Webster, MA West Roxbury, MA Wilmington, MA Wilmington, MA Woburn, MA Worcester, MA Worcester, MA Worcester, MA Worcester, MA Worcester, MA Worcester, MA Accokeek, MD Baltimore, MD Baltimore, MD Beltsville, MD Beltsville, MD Beltsville, MD $ 415 $ 427 550 787 1,008 499 571 1,357 - 850 550 735 600 490 650 691 550 650 574 1,300 579 600 1,073 476 714 125 1,200 428 900 450 358 1,012 490 600 1,300 508 500 550 547 196 979 498 692 802 2,259 525 731 1,050 2,326 $ 200 - 149 774 365 372 598 207 - - 355 - 269 - 335 - - 389 - 247 - 124 169 307 646 - 264 - 249 246 1,648 295 - - 394 - - 202 986 350 760 - 802 1,537 - - - 2,784 $ 525 550 787 1,431 687 571 1,357 636 850 550 834 600 588 650 785 550 650 819 1,300 624 600 700 478 771 721 1,200 543 900 542 567 2,307 614 600 1,300 902 500 550 558 986 986 1,082 692 802 2,259 525 731 1,050 45 - (373 ) 2 57 596 2,369 $ 98 - - 423 188 - - 636 - - 99 - 98 - 94 - - 245 458 $ 325 550 638 657 322 199 759 429 850 550 479 600 319 650 450 550 650 430 - 1,300 377 600 576 309 464 75 - 1,200 115 279 - 900 92 293 209 321 1,295 659 124 319 600 - - 1,300 508 394 500 - 550 - 356 11 - 790 636 7 322 584 692 - - - 722 - 525 - - 731 - 1,050 87 Date of Initial Leasehold or Acquisition Investment (1) 1988 1990 2011 2014 1985 1985 2012 2017 1996 2011 2011 1985 2011 1985 2011 1985 2011 2011 1985 2011 1985 2011 1985 1991 1993 1986 2011 1991 2011 1985 1985 1985 1985 2011 2011 1985 2011 2011 1991 2017 1991 1985 2010 2007 2007 2009 2009 2009 469 175 - 70 627 302 193 145 119 - - 316 - 237 - 324 - - 335 - 238 - 102 127 244 432 - 199 - 218 213 958 265 - - 354 - - 153 206 264 493 - 594 979 - - - Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Building and Improvements Total Cost Accumulated Depreciation Beltsville, MD Bladensburg, MD Bowie, MD Capitol Heights, MD Capitol Heights, MD Clinton, MD College Park, MD District Heights, MD District Heights, MD Ellicott City, MD Greater Landover, MD Greenbelt, MD Hyattsville, MD Hyattsville, MD Landover, MD Landover Hills, MD Lanham, MD Laurel, MD Laurel, MD Laurel, MD Laurel, MD Laurel, MD Laurel, MD Oxon Hill, MD Riverdale, MD Suitland, MD Upper Marlboro, MD Biddeford, ME Lewiston, ME Battle Creek, MI Battle Creek, MI Bay City, MI Beverly Hills, MI Canton, MI Cutlerville, MI Dearborn, MI Detroit, MI East Lansing, MI Farmington, MI Grand Blanc, MI Grand Ledge, MI Grand Rapids, MI Grand Rapids, MI Grand Rapids, MI Grand Rapids, MI Grandville, MI Holland, MI Jackson, MI $ 1,130 $ 571 1,084 468 628 651 536 479 1,039 895 753 1,153 491 594 662 1,358 822 696 1,210 1,267 1,415 1,530 2,523 1,256 582 673 845 618 342 3,225 3,273 484 559 491 557 552 563 554 556 562 1,174 506 562 562 818 1,043 559 508 Land 0 $ 1,130 $ - 571 - 1,084 468 - 628 - 651 - 536 - - 479 - 1,039 - - - 753 - 1,153 491 - 594 - - 662 - 1,358 - 822 696 - - 1,210 - 1,267 - 1,415 - 1,530 - 2,523 - 1,256 582 - 673 - 845 - 235 8 222 188 771 - 562 - 34 - 134 - 91 - 280 - 75 - 16 - 68 - 203 - 46 - 100 - 86 - 48 - 32 - 201 - 192 - 27 - 118 - 88 Date of Initial Leasehold or Acquisition Investment (1) 2009 2009 2009 2009 2009 2009 2009 2009 2009 2007 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 1985 1985 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 0 - - - - - - - - 697 - - - - - - - - - - - - - - - - - 391 273 59 22 14 12 12 11 14 15 14 12 15 31 13 14 15 18 25 15 12 0 $ - - - - - - - - 895 - - - - - - - - - - - - - - - - - 391 308 2,454 2,711 450 425 400 277 477 547 486 353 516 1,074 420 514 530 617 851 532 390 1,130 $ 571 1,084 468 628 651 536 479 1,039 895 753 1,153 491 594 662 1,358 822 696 1,210 1,267 1,415 1,530 2,523 1,256 582 673 845 626 530 3,225 3,273 484 559 491 557 552 563 554 556 562 1,174 506 562 562 818 1,043 559 508 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Jackson, MI Jenison, MI Lambertville, MI Lansing, MI Lansing, MI Lansing, MI Lansing, MI Livonia, MI Madison Heights, MI Madison Heights, MI Midland, MI Midland, MI Oak Park, MI Redford Township, MI Saginaw, MI St Clair Shores, MI Sterling Heights, MI Trenton, MI Warren, MI Wyoming, MI Zeeland, MI Maple Grove, MN Blue Springs, MO Blue Springs, MO Independence, MO Kansas City, MO Kansas City, MO Parkville, MO Raymore, MO Summit, MO Hattiesburg, MS Hattiesburg, MS Indian Trail, NC Raleigh, NC Cary, NC Charlotte, NC Charlotte, NC Fayetteville, NC Greensboro, NC Henderson, NC Henderson, NC High Point, NC Indian Trail, NC Kannapolis, NC Lexington, NC Monroe, NC Nashville, NC $ 558 $ 615 617 467 488 916 3,230 526 562 1,760 518 630 562 560 523 483 555 561 489 511 715 4,233 4,646 5,065 5,109 3,863 4,982 4,636 3,582 1,503 1,760 2,143 4,582 2,929 1,939 1,967 5,194 986 3,857 1,356 2,680 1,155 5,895 3,791 1,776 1,886 4,025 376 $ 578 272 360 410 726 2,378 404 524 1,568 508 620 455 516 399 416 385 513 448 474 623 3,278 4,260 4,711 4,509 3,497 4,373 4,319 3,012 1,152 910 885 1,513 472 647 510 1,524 477 2,888 582 762 787 1,088 3,175 1,475 654 1,647 558 $ 615 617 467 488 916 3,230 526 562 1,760 518 630 562 560 523 483 555 561 489 511 715 4,233 4,646 5,065 5,109 3,863 4,982 4,636 3,582 1,503 1,760 2,143 4,582 2,929 1,939 1,967 5,194 986 3,857 1,356 2,680 1,155 5,895 3,791 1,776 1,886 4,025 182 $ 0 $ 37 - 345 - 107 - 78 - 190 - 852 - 122 - 38 - 192 - 10 - 10 - 107 - 44 - 124 - 67 - 170 - 48 - 41 - 37 - 92 - 955 - 386 - 354 - 600 - 366 - 609 - 317 - 570 - 351 - - 850 - 1,258 - 3,069 - 2,457 - 1,292 - 1,457 - 3,670 509 - 969 - - 774 - 1,918 368 - - 4,807 616 - - 301 - 1,232 - 2,378 89 Date of Initial Leasehold or Acquisition Investment (1) 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2019 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021 2021 2021 2018 2020 2021 2021 2020 2021 2019 2017 2021 2021 11 16 10 11 14 23 35 13 15 6 15 18 13 14 13 12 12 14 13 14 19 363 365 389 379 293 349 342 262 4 18 16 13 8 11 4 13 94 280 11 12 65 9 411 267 6 26 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Oxford, NC Raleigh, NC Rockingham, NC Rolesville, NC Wake Forest, NC Wesley Chapel, NC Youngsville, NC Belfield, ND Allenstown, NH Concord, NH Concord, NH Derry, NH Dover, NH Dover, NH Goffstown, NH Hooksett, NH Kingston, NH Londonderry, NH Londonderry, NH Manchester, NH Nashua, NH Nashua, NH Nashua, NH Nashua, NH Nashua, NH Nashua, NH Northwood, NH Pelham, NH Portsmouth, NH Raymond, NH Rochester, NH Rochester, NH Rochester, NH Rochester, NH Salem, NH Salem, NH Basking Ridge, NJ Bergenfield, NJ Brick, NJ Flemington, NJ Fort Lee, NJ Freehold, NJ Hasbrouck Heights, NJ Lake Hopatcong, NJ Lawrence Township, NJ Livingston, NJ Long Branch, NJ Midland Park, NJ Mountainside, NJ $ 1,529 1,601 $ 3,035 1,329 1,114 7,158 4,701 1,232 1,787 675 900 950 650 1,200 1,737 1,562 1,500 703 1,100 550 500 550 750 825 1,132 1,750 500 - 525 550 700 939 1,400 1,600 743 450 362 382 1,508 547 1,246 494 640 1,305 1,303 872 514 201 664 30 309 - 0 $ 1,149 $ 233 - 700 - 411 - - 5,654 - 4,027 382 - 467 - 675 - 900 - 950 - 650 - - 1,200 697 - - 824 - 1,500 458 - 1,100 550 - 500 - 550 - 750 - 825 - - 780 - 1,750 500 - 317 730 525 - 550 - 700 - 600 12 - 1,400 - 1,600 484 20 350 871 200 285 300 320 383 1,000 346 17 811 420 95 944 416 708 - 800 - 1,146 568 335 150 134 65 513 339 (191 ) 90 1,220 452 $ 2,802 629 703 1,504 674 850 1,320 - - - - - 1,040 738 - 275 - - - - - - 352 - - 413 - - - 351 - - 279 971 447 402 891 218 855 1,343 932 505 157 369 692 390 339 1,529 1,601 $ 3,035 1,329 1,114 7,158 4,701 1,232 1,787 675 900 950 650 1,200 1,737 1,562 1,500 733 1,100 550 500 550 750 825 1,132 1,750 500 730 525 550 700 951 1,400 1,600 763 1,321 647 702 1,891 564 1,666 1,438 1,348 1,305 1,303 937 1,027 540 473 Date of Initial Leasehold or Acquisition Investment (1) 2021 2019 2019 2021 2021 2021 2021 2007 2007 2011 2011 2011 2011 2011 2012 2007 2011 1985 2011 2011 2011 2011 2011 2011 2017 2011 2011 1996 2011 2011 2011 1985 2011 2011 1985 1986 1986 1990 2000 1985 1985 1978 1985 2000 2012 1985 1985 1989 1985 18 69 353 11 12 12 12 775 887 - - - - - 653 686 - 265 - - - - - - 103 - - 198 - - - 337 - - 268 238 362 313 654 209 695 510 659 473 87 337 484 289 254 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation North Bergen, NJ North Plainfield, NJ Paramus, NJ Parlin, NJ Paterson, NJ Ridgewood, NJ Somerset, NJ Union, NJ Vernon, NJ Washington Township, NJ Watchung, NJ West Orange, NJ Albuquerque, NM Albuquerque, NM Albuquerque, NM Albuquerque, NM Las Cruces, NM Fernley, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Plattsburgh, NY Astoria, NY Batavia, NY Bay Shore, NY Bayside, NY Brewster, NY Briarcliff Manor, NY Bronx, NY Bronx, NY Bronx, NY Bronx, NY Bronx, NY Bronx, NY Bronx, NY Bronxville, NY Brooklyn, NY Brooklyn, NY Brooklyn, NY Brooklyn, NY Buffalo, NY Byron, NY Chester, NY Churchville, NY Corona, NY $ 630 $ 227 382 418 620 703 683 437 671 912 450 800 1,829 2,308 2,322 3,682 1,842 1,665 2,814 3,094 3,472 3,722 3,752 4,150 1,684 684 156 470 789 652 877 884 953 1,049 46 1,910 2,408 1,232 282 237 477 627 312 969 1,158 1,012 2,543 147 $ 542 717 223 16 461 228 214 476 396 254 433 410 $ 175 249 203 403 458 445 239 437 594 226 521 - 1,382 - 1,830 - 1,796 - 3,141 - 1,374 221 - 563 - 830 - 655 - 631 - - 615 - 1,127 - 1,105 364 - 86 356 306 254 789 - 502 550 877 - 884 - 953 - 485 - 84 1,318 - 1,349 - 1,712 - 1,232 176 273 154 402 306 319 408 313 151 242 - 669 - 1,158 602 - - 1,903 91 367 $ 594 850 438 233 706 466 412 710 714 478 712 447 478 526 541 468 1,444 2,251 2,264 2,817 3,091 3,137 3,023 579 320 426 418 - 700 - - - 564 1,280 561 696 - 379 485 490 532 403 300 - 410 640 777 $ 769 1,099 641 636 1,164 911 651 1,147 1,308 704 1,233 1,829 2,308 2,322 3,682 1,842 1,665 2,814 3,094 3,472 3,722 3,752 4,150 1,684 684 512 724 789 1,202 877 884 953 1,049 1,364 1,910 2,408 1,232 555 639 796 940 554 969 1,158 1,012 2,543 Date of Initial Leasehold or Acquisition Investment (1) 1985 1978 1985 1985 1985 1985 1985 1985 1985 1985 1985 1985 2017 2017 2017 2017 2017 2015 2019 2019 2019 2021 2019 2021 2013 2006 1981 1985 2011 1976 2013 2013 2013 2013 1972 2013 2013 2011 1967 1985 1985 1985 2000 2006 2011 2006 2013 343 539 274 281 224 546 440 317 505 535 257 625 121 138 148 156 129 672 210 226 257 57 293 32 288 203 356 310 - 658 - - - 282 253 293 327 - 323 351 410 445 317 190 - 260 306 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Dobbs Ferry, NY Dobbs Ferry, NY East Hampton, NY East Meadow, NY East Pembroke, NY Eastchester, NY Elmont, NY Elmsford, NY Elmsford, NY Fishkill, NY Floral Park, NY Flushing, NY Flushing, NY Flushing, NY Flushing, NY Forest Hills, NY Franklin Square, NY Garden City, NY Garnerville, NY Glen Head, NY Great Neck, NY Hartsdale, NY Hawthorne, NY Hopewell Junction, NY Hyde Park, NY Katonah, NY Lakeville, NY Latham, NY Levittown, NY Levittown, NY Long Island City, NY Mamaroneck, NY Massapequa, NY Middletown, NY Middletown, NY Middletown, NY Millwood, NY Mount Kisco, NY Mount Vernon, NY Nanuet, NY New Paltz, NY New Rochelle, NY New Rochelle, NY New Windsor, NY New York, NY New York, Newburgh, NY Newburgh, NY $ 671 $ 1,345 659 - 787 1,724 389 - 1,453 1,793 617 516 1,936 1,947 2,478 1,273 153 362 1,508 462 500 1,626 2,084 1,163 990 1,084 1,028 2,498 503 546 2,717 1,429 333 719 751 1,281 1,448 1,907 985 2,316 971 189 1,887 1,084 126 282 527 1,192 270 $ - 271 233 250 415 477 367 - - 430 437 523 542 677 - 347 368 - 444 302 - - - - - 825 685 218 277 1,534 - 401 - 536 - - - - - - 505 - - 447 553 - - 704 $ 1,345 699 1,903 787 2,717 708 948 1,453 1,793 786 757 1,936 1,947 2,478 1,273 484 604 1,508 745 752 1,626 2,084 1,163 990 1,084 1,028 2,498 545 633 2,717 1,429 618 719 1,025 1,281 1,448 1,907 985 2,316 971 609 1,887 1,084 525 553 527 1,192 - 40 33 $ 283 252 169 241 331 242 434 $ - 1,345 428 1,903 1,670 537 993 2,302 231 319 581 948 - 1,453 - 1,793 356 320 - 1,413 - 1,405 - 1,801 - 1,273 137 236 - 1,508 301 450 - 1,626 - 2,084 - 1,163 - 990 - 1,084 - 203 - 1,813 327 356 - 1,183 - 1,429 217 719 489 - 1,281 - 1,448 - 1,907 - 985 - 2,316 971 - 104 420 - 1,887 - 1,084 78 399 - 271 - 527 - 1,192 285 - 274 42 87 92 Date of Initial Leasehold or Acquisition Investment (1) 1985 2011 1985 1988 2006 2011 1978 1971 2011 2011 1998 1998 2013 2013 2013 2013 1978 1985 2011 1985 1985 2011 2011 2011 2011 2011 2008 2020 1985 1985 2013 2011 1985 2011 1985 2011 2011 2011 2011 2011 2011 1982 2011 2011 1972 2020 2011 2011 260 - 261 70 158 114 404 299 - - 358 355 261 248 310 - 269 294 - 366 234 - - - - - 598 50 210 263 636 - 319 - 452 - - - - - - 346 - - 379 72 - - Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Ossining, NY Peekskill, NY Pelham, NY Pleasant Valley, NY Port Chester, NY Port Jefferson, NY Poughkeepsie, NY Poughkeepsie, NY Poughkeepsie, NY Poughkeepsie, NY Poughkeepsie, NY Poughkeepsie, NY Prattsburgh, NY Rego Park, NY Riverhead, NY Rockaway Park, NY Rye, NY Sag Harbor, NY Sayville, NY Scarsdale, NY Shrub Oak, NY Sleepy Hollow, NY Spring Valley, NY Staten Island, NY Staten Island, NY Staten Island, NY Tarrytown, NY Troy, NY Tuckahoe, NY Wantagh, NY Wappingers Falls, NY Warwick, NY West Nyack, NY White Plains, NY White Plains, NY Yaphank, NY Yonkers, NY Yonkers, NY Yonkers, NY Yonkers, NY Yorktown Heights, NY Yorktown Heights, NY Akron, OH Amelia, OH Bowling Green, OH Cincinnati, OH Cincinnati, OH Cincinnati, OH $ 231 $ 2,207 1,035 398 1,015 185 591 1,020 1,232 1,340 1,306 1,355 553 2,783 724 1,605 872 704 345 1,301 1,061 281 749 390 301 350 956 4,690 1,650 640 1,488 1,049 936 - 1,458 - - 1,020 291 1,907 1,700 2,365 1,530 3,195 472 3,188 3,188 3,716 373 $ - - 339 - 3,023 - - - - - - 250 679 292 - - 281 290 - 792 567 - 225 428 412 - 571 - 270 - - - 266 - 423 260 419 1,125 - 1,700 - 1,145 2,558 365 2,533 2,914 3,175 490 $ 2,207 1,035 579 1,015 3,269 591 1,020 1,200 1,280 1,306 1,355 553 2,783 724 1,605 872 739 590 1,301 1,483 697 749 479 624 640 956 4,690 1,650 640 1,488 1,049 936 569 1,458 798 944 1,084 1,341 1,907 1,700 2,365 1,530 3,195 472 3,188 3,188 3,716 181 259 $ 117 $ - 2,207 - 1,035 240 - 1,015 246 3,084 - 591 - 1,020 (32 ) 1,200 (60 ) 1,280 - 1,306 - 1,355 303 - - 2,104 - 432 - 1,605 872 - 458 35 300 245 - 1,301 691 422 130 416 749 - 254 89 196 323 228 290 - 956 - 4,119 - 1,650 370 - - 1,488 - 1,049 936 - 303 569 - 1,458 375 684 665 216 - 1,907 - - - 2,365 385 - 637 - 107 - 655 - 274 - 541 - 798 944 64 1,050 93 Date of Initial Leasehold or Acquisition Investment (1) 1985 2011 2011 1986 2011 1985 2011 2011 2011 2011 2011 2011 2006 2013 1998 2013 2011 1985 1998 2011 1985 1969 2011 1985 1985 1985 2011 2020 2011 1998 2011 2011 2011 1972 2011 1993 1990 1985 1972 2011 2013 2011 2017 2021 2021 2021 2021 2020 269 - - 246 - 539 - - - - - - 158 325 278 - - 270 213 - 645 476 - 219 350 333 - 44 - 251 - - - 230 - 300 164 404 809 - 614 - 251 96 12 78 81 305 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Crestline, OH Fairfield, OH Hamilton, OH Lima, OH Loveland, OH Mansfield, OH Mansfield, OH Maumee, OH Monroeville, OH Oregon, OH Springdale, OH Sylvania, OH Toledo, OH Toledo, OH Toledo, OH Toledo, OH Tylersville, OH Oklahoma City, OK Oklahoma City, OK Oklahoma City, OK Stillwater, OK Banks, OR Estacada, OR McMinnville, OR Pendleton, OR Portland, OR Salem, OR Salem, OR Salem, OR Salem, OR Salem, OR Silverton, OR Springfield, OR Stayton, OR Allison Park, PA Harrisburg, PA Lancaster, PA New Kensington, PA Philadelphia, PA Philadelphia, PA Phoenixville, PA Reading, PA Barrington, RI N. Providence, RI Blythewood, SC Chapin, SC Charleston, SC Columbia, SC $ 1,202 $ 3,770 3,188 637 1,045 922 1,950 557 2,580 470 3,379 559 552 562 603 767 3,195 868 1,182 1,311 2,800 498 646 2,867 766 4,416 1,071 1,350 1,408 4,215 4,614 956 1,398 543 1,500 399 642 1,375 406 1,252 384 750 490 542 3,217 1,682 4,996 575 285 $ 0 $ 582 - 371 - 53 - 362 - 332 - 700 - 67 - 485 - 36 - 381 - 44 - 90 - 26 - 204 - 241 - 666 - 371 - 587 - - 625 - 1,469 498 - 84 - 394 - - 122 - 3,368 399 - 521 - - 524 - 3,182 - 3,517 456 - 796 - 296 - 850 - 199 213 300 56 675 - 264 254 814 - 76 90 - 49 319 133 353 159 - 2,405 - 1,135 - 1,981 345 - 94 917 $ 3,188 2,817 584 683 590 1,250 490 2,095 434 2,998 515 462 536 399 526 2,529 497 595 686 1,331 - 562 2,473 644 1,048 672 829 884 1,033 1,097 500 602 247 650 413 398 700 396 438 398 799 304 348 812 547 3,015 230 1,202 $ 3,770 3,188 637 1,045 922 1,950 557 2,580 470 3,379 559 552 562 603 767 3,195 868 1,182 1,311 2,800 498 646 2,867 766 4,416 1,071 1,350 1,408 4,215 4,614 956 1,398 543 1,500 612 698 1,375 660 1,252 474 799 623 701 3,217 1,682 4,996 575 Date of Initial Leasehold or Acquisition Investment (1) 2008 2020 2021 2021 2017 2008 2009 2021 2009 2021 2020 2021 2021 2021 2021 2021 2021 2018 2018 2018 2019 2015 2015 2017 2015 2015 2015 2015 2015 2015 2015 2017 2015 2017 2010 1989 1989 2010 1985 2009 1985 1989 1985 1985 2017 2017 2021 2017 556 206 90 17 167 343 720 14 1,201 12 276 14 14 15 12 15 88 94 108 120 137 - 201 538 254 392 320 316 348 415 413 140 279 80 519 354 371 353 309 229 148 799 249 309 222 148 13 55 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Columbia, SC Elgin, SC Elgin, SC Gaston, SC Gilbert, SC Irmo, SC Irmo, SC Irmo, SC Irmo, SC Irmo, SC Johns Island, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Lexington, SC Myrtle Beach, SC Pelion, SC Simpsonville, SC Summerville, SC West Columbia, SC West Columbia, SC West Columbia, SC Arlington, TX Arlington, TX Arlington, TX Arlington, TX Austin, TX $ 792 $ 868 927 1,436 1,643 1,995 2,109 2,460 2,531 2,637 3,371 2,082 2,177 2,230 1,036 1,114 1,246 1,339 3,655 3,950 2,561 633 694 720 816 973 1,056 1,624 1,712 1,729 1,738 2,179 2,603 3,231 3,234 4,413 1,168 1,901 1,713 4,134 1,116 1,644 2,046 789 1,352 1,560 1,796 1,711 463 $ 0 $ 455 - 495 - - 472 - 1,302 - 1,130 - 1,120 - 1,569 - 1,612 - 1,254 - 2,016 - 1,166 974 - 934 - 434 - 667 - 69 - 867 - (178 ) 1,564 - 2,802 - 1,885 309 - 172 - 219 - 336 - 582 - 432 - - 999 - 1,410 - 1,268 - 1,189 - 1,476 - 1,869 - 2,001 - 1,198 - 3,418 - 505 - 1,021 - 1,355 - 1,437 - 50 - 1,283 746 - 414 - - 887 - 1,008 - 1,189 - 1,364 95 329 $ 413 432 964 341 865 989 891 919 1,383 1,355 916 1,203 1,296 602 447 1,177 472 1,913 1,148 676 324 522 501 480 391 624 625 302 461 549 703 734 1,230 2,036 995 663 880 358 2,697 1,066 361 1,300 375 465 552 607 347 792 $ 868 927 1,436 1,643 1,995 2,109 2,460 2,531 2,637 3,371 2,082 2,177 2,230 1,036 1,114 1,246 1,339 3,477 3,950 2,561 633 694 720 816 973 1,056 1,624 1,712 1,729 1,738 2,179 2,603 3,231 3,234 4,413 1,168 1,901 1,713 4,134 1,116 1,644 2,046 789 1,352 1,560 1,796 1,711 Date of Initial Leasehold or Acquisition Investment (1) 2017 2017 2017 2017 2017 2018 2018 2017 2018 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2018 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2017 2021 2017 2021 2021 2017 2017 2017 2018 2018 2018 2018 2017 84 118 90 239 65 176 189 242 174 330 352 230 286 311 144 108 266 117 453 284 115 81 141 121 91 101 160 153 63 131 106 171 154 247 372 274 6 249 7 44 263 93 306 77 89 101 113 101 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Austin, TX Austin, TX Bedford, TX Cedar Park, TX Center, TX Childress, TX Cibolo, TX Corpus Christi, TX Corpus Christi, TX Corpus Christi, TX El Paso, TX El Paso, TX El Paso, TX El Paso, TX El Paso, TX El Paso, TX Fort Worth, TX Garland, TX Garland, TX Garland, TX Grand Prairie, TX Grand Prairie, TX Harker Heights, TX Houston, TX Houston, TX Keller, TX Lewisville, TX Linden, TX Longview, TX Mathis, TX Mesquite, TX Panhandle, TX Paris, TX Paris, TX Port Arthur, TX Rowlett, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Antonio, TX San Marcos, TX Schertz, TX Shamrock, TX $ 2,368 $ 3,510 353 179 2,073 3,335 3,228 1,526 2,162 2,400 1,278 1,425 1,679 1,816 2,370 3,168 2,115 2,208 3,296 4,439 1,413 2,000 2,052 1,689 2,803 2,507 494 2,160 1,660 3,138 1,687 5,068 3,832 5,322 2,648 1,284 2,810 3,427 3,618 3,630 3,631 3,718 3,820 4,397 4,411 1,954 2,794 3,045 1,630 $ 1,982 356 428 591 1,376 2,224 470 433 1,290 453 327 594 403 603 1,015 1,420 704 3,051 4,000 499 585 1,568 1,465 2,268 1,568 420 646 421 451 594 2,431 1,187 1,343 2,143 444 2,300 2,981 3,124 2,610 2,301 2,986 2,361 3,400 3,769 1,703 1,981 1,823 2,368 $ 3,577 469 470 2,073 3,335 3,228 1,526 2,162 2,400 1,278 1,425 1,679 1,816 2,370 3,168 2,286 2,208 3,296 4,439 1,413 2,000 2,147 1,689 2,803 2,564 530 2,160 1,660 3,138 1,687 5,068 3,832 5,322 2,648 1,284 2,810 3,427 3,618 3,630 3,631 3,718 3,820 4,397 4,411 1,954 2,794 3,045 0 $ 171 738 $ 67 1,595 113 116 42 291 - 1,482 - 1,959 - 1,004 - 1,056 - 1,729 - 1,110 - 825 - 1,098 - 1,085 - 1,413 - 1,767 - 2,153 866 - 1,504 245 - 439 - - 914 - 1,415 579 224 535 996 110 - 1,514 - 1,239 - 2,687 - 1,093 - 2,637 - 2,645 - 3,979 505 - 840 - 510 - 446 - - 494 - 1,020 - 1,330 732 - - 1,459 997 - 642 - 251 - - 813 - 1,222 95 - - 57 36 96 Date of Initial Leasehold or Acquisition Investment (1) 2007 2007 2007 2007 2018 2020 2020 2017 2017 2017 2017 2017 2017 2017 2017 2017 2007 2018 2014 2014 2018 2018 2007 2007 2016 2007 2008 2018 2018 2017 2018 2020 2020 2020 2016 2018 2021 2020 2020 2020 2021 2020 2020 2020 2020 2007 2020 2020 1,029 1,226 234 260 122 94 150 116 121 321 125 93 146 114 154 260 845 130 947 1,297 102 112 1,219 902 525 1,033 274 125 78 126 114 177 67 86 512 81 92 180 182 183 49 182 135 226 231 1,063 115 129 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Building and Improvements Total Cost Accumulated Depreciation Temple, TX Temple, TX Texarkana, TX Texarkana, TX Texarkana, TX Waco, TX Wake Village, TX Watauga, TX Alexandria, VA Alexandria, VA Alexandria, VA Alexandria, VA Alexandria, VA Alexandria, VA Alexandria, VA Alexandria, VA Annandale, VA Arlington, VA Arlington, VA Arlington, VA Arlington, VA Ashland, VA Chesapeake, VA Chesapeake, VA Emporia, VA Fairfax, VA Fairfax, VA Fairfax, VA Fairfax, VA Farmville, VA Fredericksburg, VA Fredericksburg, VA Fredericksburg, VA Glen Allen, VA Glen Allen, VA King William, VA Mechanicsville, VA Mechanicsville, VA Mechanicsville, VA Mechanicsville, VA Mechanicsville, VA Mechanicsville, VA Montpelier, VA Petersburg, VA Portsmouth, VA Richmond, VA Salem, VA Sandston, VA $ 2,406 $ 5,554 1,791 1,861 2,316 3,884 1,637 1,771 649 656 712 735 1,327 1,388 1,582 1,757 1,718 1,083 1,464 2,014 2,062 840 780 1,004 3,364 1,825 2,078 3,348 4,454 1,227 1,279 1,716 3,623 1,037 1,077 1,688 903 957 1,043 1,125 1,476 1,677 2,481 1,441 562 1,132 3,337 722 Land -11 $ 1,205 $ - 4,119 - 992 - 1,197 - 1,643 894 - - 685 - 1,139 649 - 409 - 712 - - 735 - 1,327 - 1,020 - 1,150 - 1,313 - 1,718 - 1,083 - 1,085 - 1,516 - 1,603 840 - 398 (186 ) 385 110 - 2,227 - 1,190 - 1,365 - 2,351 - 3,370 622 - 469 - - 996 - 2,828 412 - - 322 - 1,068 248 (25 ) 324 14 223 - 505 - - 876 - 1,157 (114 ) 1,612 816 222 506 915 102 - 34 (41 ) - - 97 Date of Initial Leasehold or Acquisition Investment (1) 2007 2020 2018 2018 2018 2007 2018 2018 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2005 1990 1990 2019 2013 2013 2013 2013 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 1990 2005 2020 2005 784 95 143 137 119 1,974 168 118 - 133 - - - 201 214 234 - - 192 245 223 - 108 698 131 313 302 461 502 406 544 484 534 420 507 416 423 443 551 416 403 349 507 420 371 393 279 416 1,190 $ 1,435 799 664 673 2,990 952 632 - 247 - - - 368 432 444 - - 379 498 459 - 196 729 1,137 635 713 997 1,084 605 810 720 795 625 755 620 630 647 820 620 600 520 755 625 374 585 2,422 620 2,395 $ 5,554 1,791 1,861 2,316 3,884 1,637 1,771 649 656 712 735 1,327 1,388 1,582 1,757 1,718 1,083 1,464 2,014 2,062 840 594 1,114 3,364 1,825 2,078 3,348 4,454 1,227 1,279 1,716 3,623 1,037 1,077 1,688 878 971 1,043 1,125 1,476 1,677 2,367 1,441 596 1,091 3,337 722 Gross Amount at Which Carried at Close of Period Initial Cost of Leasehold or Acquisition Investment to Company (1) Cost Capitalized Subsequent to Initial Investment Land Building and Improvements Total Cost Accumulated Depreciation Spotsylvania, VA Springfield, VA Woodstock, VA Williston, VT Auburn, WA Bellevue, WA Chehalis, WA Colfax, WA Federal Way, WA Fife, WA Kent, WA Monroe, WA Port Orchard, WA Puyallup, WA Puyallup, WA Puyallup, WA Renton, WA Seattle, WA Seattle, WA Silverdale, WA Snohomish, WA South Bend, WA Tacoma, WA Tacoma, WA Tenino, WA Vancouver, WA Wilbur, WA various $ 1,290 $ 4,257 612 3,957 3,022 1,725 1,176 4,800 4,218 1,181 2,900 2,792 2,019 831 2,035 4,050 1,485 717 1,884 2,178 955 760 518 671 937 1,214 629 58,615 490 $ 2,969 355 1,538 1,965 886 313 3,611 2,973 414 2,066 1,556 161 172 465 2,394 952 193 1,223 1,217 955 121 518 671 219 163 153 73,015 31,082 $ 1,346,332 $ 122,334 $ 775,037 $ 0 $ - - - - - - - - - - - - - - - - - - - - - - - - - - Date of Initial Leasehold or Acquisition Investment (1) 2005 2013 2020 2021 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 800 $ 1,288 257 2,419 1,057 839 863 1,189 1,245 767 834 1,236 1,858 659 1,570 1,656 533 524 661 961 - 639 - - 718 1,051 476 41,933 1,290 $ 4,257 612 3,957 3,022 1,725 1,176 4,800 4,218 1,181 2,900 2,792 2,019 831 2,035 4,050 1,485 717 1,884 2,178 955 760 518 671 937 1,214 629 73,015 635,014 $ 1,410,051 $ 210,615 537 590 23 27 411 327 368 464 522 324 352 493 619 298 601 791 282 196 247 405 - 233 - - 265 351 195 34,667 various 1) Initial cost of leasehold or acquisition investment to company represents the aggregate of the cost incurred during the year in which we purchased the property for owned properties or purchased a leasehold interest in leased properties. Cost capitalized subsequent to initial investment includes investments made in previously leased properties prior to their acquisition. 2) Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which generally range from 16 to 25 years for buildings and improvements, or the term of the lease if shorter. Leasehold interests are amortized over the remaining term of the underlying lease. 3) The aggregate cost for federal income tax purposes was approximately $1,458,000 at December 31, 2021. 98 GETTY REALTY CORP. and SUBSIDIARIES SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE As of December 31, 2021 (in thousands) Description Location(s) Interest Rate Final Maturity Date Periodic Payment Terms (a) Prior Liens Face Value at Inception Amount of Principal Unpaid at Close of Period Type of Loan/Borrower Mortgage Loans: Borrower A Borrower B Borrower C Borrower D Borrower E Borrower F Borrower G Borrower H Borrower I Borrower J Borrower K Borrower L Borrower M Borrower N Borrower O Borrower P Borrower Q Borrower R Borrower S Borrower T Borrower U Borrower V Borrower W Borrower X Borrower Y Borrower Z Borrower AA Borrower AB Borrower AC Borrower AD Borrower AE Borrower AF Borrower AG Borrower AH Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing Seller financing East Islip, NY Middlesex, NJ Valley Cottage, NY Smithtown, NY Nyack, NY Baldwin, NY Norwalk, CT Stafford Springs, CT Waterbury, CT Bristol, CT Hartford, CT Middletown, CT New Britain, CT Plainville, CT Simsbury, CT Milford, CT Fairfield, CT Hartford, CT Wilmington, DE Fairhaven, MA Irvington, NJ Nutley, NJ Colonia, NJ Glendale, NY Bayside, NY Elmont, NY Pleasant Valley, NY Malta, NY Brewster, NY Rochester, NY Savona, NY Rochester, NY Greigsville, NY Warwick, RI Note receivable Total (c) Promissory Note Various-SC Promissory Note Various-CT Promissory Note Various-CT Allowance for credit losses P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I P & I 9.0 % 9.0 % 9.0 % 9.5 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.5 % 9.0 % 9.5 % 9.5 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.5 % 9.0 % 9.0 % 9.5 % 9.0 % 9.5 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 9.0 % 11/2024 9/2021 (d) 10/2020 (d) 1/2027 9/2022 9/2020 (d) 4/2022 1/2021 (d) 2/2021 (d) 5/2026 2/2027 5/2026 4/2027 3/2027 5/2026 3/2025 3/2025 3/2024 11/2027 9/2020 (d) 8/2022 11/2028 7/2030 7/2025 12/2029 10/2021 (d) 9/2027 3/2023 10/2022 1/2025 2/2025 10/2025 11/2025 8/2022 6.9 % 6.9 % 9.0 % 8/2022 (b) 10/2022 (b) 12/2028 (b) — $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 743 $ 255 431 280 253 300 319 232 171 76 440 308 192 160 192 398 390 70 84 458 300 108 320 525 320 450 230 572 554 174 157 230 200 333 10,225 — — — 677 21 338 170 219 254 267 184 137 72 425 292 186 155 182 366 359 63 64 357 176 108 233 309 320 325 174 495 466 159 144 215 187 284 8,383 4,603 1,102 908 — $ 10,225 $ (297 ) 14,699 (a) P & I = Principal and interest paid monthly. (b) Note for funding of capital improvements. (c) The aggregate cost for federal income tax purposes approximates the amount of principal unpaid. (d) Note is in the process of being refinanced or repaid. We review payment status to identify performing versus non-performing loans. Interest income on performing loans is accrued as earned. A non-performing loan is placed on non-accrual status when it is probable that the borrower may be unable to meet interest payments as they become due. We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective method, under which we recorded a cumulative-effect adjustment as a charge to retained earnings of $309,000. In addition, during the years ended 99 December 31, 2021 and 2020, we recorded a credit and an additional allowance for credit losses of $40,000 and $28,000, respectively, on these notes and mortgages receivable due to changes in expected economic conditions. The summarized changes in the carrying amount of mortgage loans are as follows: Balance at January 1, Additions: New mortgage loans Deductions: Loan repayments Collection of principal Credit (allowance) for credit losses Balance at December 31, 2021 2020 2019 $ 11,280 $ 30,855 $ 33,519 13,943 3,724 1,734 (9,893 ) (671 ) 40 14,699 $ (22,260 ) (702 ) (337 ) 11,280 $ (3,771 ) (627 ) — 30,855 $ 100 EXHIBIT INDEX GETTY REALTY CORP. Annual Report on Form 10-K for the year ended December 31, 2021 Exhibit Number 3.1 3.2 Description of Document Location of Document Articles of Incorporation of Getty Realty Holding Corp. (“Holdings”), now known as Getty Realty Corp., filed December 23, 1997. Annexed as Appendix D to the Joint Proxy/Prospectus that is a part of the Company’s Registration Statement on Form S-4 filed on January 12, 1998 (File No. 333- 44065) and incorporated herein by reference. Articles Supplementary to Articles of Incorporation of Holdings, filed January 21, 1998. 3.3 By-Laws of Getty Realty Corp. Filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K the year ended December 31, 2008 (File No. 001-13777) and incorporated herein by reference. for Filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on November 14, 2011 (File No. 001- 13777) and incorporated herein by reference. 3.4 Articles of Amendment of Holdings, changing its name to Getty Realty Corp., filed January 30, 1998. 3.5 Articles of Amendment of Holdings, filed August 1, 2001. Filed as Exhibit 3.4 to the Company’s Annual Report on the year ended December 31, 2008 Form 10-K (File No. 001-13777) and incorporated herein by reference. for Filed as Exhibit 3.5 to the Company’s Annual Report on the year ended December 31, 2008 Form 10-K (File No. 001-13777) and incorporated herein by reference. for 3.6 Articles Supplementary to Articles of Incorporation of Holdings, filed October 25, 2017. 3.7 Articles of Amendment to Articles of Incorporation of Getty Realty Corp. filed May 17, 2018 3.8 Amendment to By-Laws of Getty Realty Corp. 4.1 Dividend Reinvestment/Stock Purchase Plan. Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 001-13777) and incorporated herein by reference. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 18, 2018 (File No. 001-13777) and incorporated herein by reference. Filed as Exhibit 3.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-13777) and incorporated herein by reference. Included under the heading “Description of Plan” on pages 5 through 18 of the Company’s Registration Statement on Form S-3D filed on April 22, 2004 (File No. 333-114730) and incorporated herein by reference. 4.2 Description of Securities. Filed herewith. 10.1* 10.4* 10.6* 10.7* Retirement and Profit Sharing Plan (restated as of December 1, 2012). Filed as Exhibit 10.1 to the Company’s Annual Report on the year ended December 31, 2012 Form 10-K (File No. 001-13777) and incorporated herein by reference. for Amended and Restated Supplemental Retirement Plan for Executives of the Getty Realty Corp. and Participating Subsidiaries (adopted by the Company on December 16, 1997 and amended and restated effective January 1, 2009). Filed as Exhibit 10.6 to the Company’s Annual Report on the year ended December 31, 2008 Form 10-K (File No. 001-13777) and incorporated herein by reference. for 2004 Getty Realty Corp. Omnibus Incentive Compensation Plan. Annexed as Appendix B. to the Company’s Definitive Proxy Statement filed on April 9, 2004 (File No. 001- 13777) and incorporated herein by reference. Form of restricted stock unit grant award under the 2004 Getty Realty Corp. Omnibus Incentive Compensation Plan, as amended. Filed as Exhibit 10.15 to the Company’s Annual Report on the year ended December 31, 2008 Form 10-K (File No. 001-13777) and incorporated herein by reference. for 101 Exhibit Number 10.8* Description of Document Location of Document Amendment to the 2004 Getty Realty Corp. Omnibus Incentive Compensation Plan dated December 31, 2008. Filed as Exhibit 10.19 to the Company’s Annual Report on the year ended December 31, 2008 Form 10-K (File No. 001-13777) and incorporated herein by reference. for 10.15* Form of incentive restricted stock unit grant award under the 2004 Getty Realty Corp. Omnibus Incentive Compensation Plan, as amended. Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2013 (File No. 001-13777) and incorporated herein by reference. 10.18* Getty Realty Corp. Amended and Restated 2004 Omnibus Incentive Compensation Plan. Filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed on March 16, 2015 (File No. 001-13777) and incorporated herein by reference. 10.19* Getty Realty Corp. Second Amended and Restated 2004 Annexed as Appendix A to the Company’s Definitive Proxy Omnibus Incentive Compensation Plan Statement on Schedule 14A filed on March 23, 2017 10.20** Credit Agreement, dated as of June 2, 2015, among Getty Realty Corp., certain of its subsidiaries party thereto, Bank of America, N.A. as Administrative Agent, Swing Line Lender, an L/C Issuer and as a Lender, and the other leaders party thereto. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015 (File No. 001-13777) and incorporated herein by reference. 10.21** Amended and Restated Note Purchase and Guarantee Agreement, dated as of June 2, 2015, among Getty Realty Corp., certain of its subsidiaries party thereto, the Prudential the Prudential Insurance Company of America, and Retirement Insurance and Annuity Company. Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015 (File No. 001-13777) and incorporated herein by reference. 10.28 First Amendment, dated as of February 21, 2017, to Credit Agreement among Getty Realty Corp., certain of its subsidiaries party thereto, Bank of America, N.A. as Administrative Agent, Swing Line Lender, an L/C Issuer and as a Lender, and the other leaders party thereto. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2017 (File No. 001-13777) and incorporated herein by reference. 10.29** Second Amended and Restated Note Purchase and Guarantee Agreement, dated as of February 21, 2017, among Getty Realty Corp., certain of its subsidiaries party thereto, the Prudential Insurance Company of America (“Prudential”) and certain affiliates of Prudential. Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2017 (File No. 001-13777) and incorporated herein by reference. 10.30** Transaction Agreement between Empire Petroleum Partners, LLC and Getty Realty Corp., dated June 22, 2017. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on July 28, 2017 (File No. 001-13777) and incorporated herein by reference. 10.31 Distribution Agreement by and among Getty Realty Corp., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, KeyBanc Capital Markets Inc., RBC Capital Markets, LLC, BTIG, LLC, Capital One Securities, Inc. and JMP Securities LLC, dated March 9, 2018. Filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on March 9, 2016 (File No. 001-13777) and incorporated herein by reference. 10.32** Amended and Restated Credit Agreement, dated as of March 23, 2018, among Getty Realty Corp., certain of its subsidiaries party thereto, Bank of America, N.A., as Administrative Agent and Swing Line Lender, each lender from time to time party thereto and each L/C Issuer from time to time party thereto. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 9, 2018 (File No. 001-13777) and incorporated herein by reference. 10.33** Third Amended and Restated Note Purchase and Guarantee Agreement, dated as of June 21, 2018, among Getty Realty Corp., certain of its subsidiaries party thereto, the Prudential and certain affiliates of Prudential. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on July 26, 2018 (File No. 001-13777) and incorporated herein by reference. 102 Exhibit Number Description of Document Location of Document 10.34** Note Purchase and Guarantee Agreement, dated as of June 21, 2018, among Getty Realty Corp., certain of its subsidiaries party thereto, Metropolitan Life Insurance Company (“MetLife”) and certain affiliates of MetLife. Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 26, 2018 (File No. 001-13777) and incorporated herein by reference. 10.35* Form of Indemnification Agreement between the Company and its directors. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on October 25, 2018 (File No. 001-13777) and incorporated herein by reference. 10.36** Fourth Amended and Restated Note Purchase and Guarantee Agreement, dated as of September 12, 2019, among Getty Realty Corp., certain of its subsidiaries party thereto, the Prudential and certain affiliates of Prudential. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on September 30, 2019 (File No. 001- 13777) and incorporated herein by reference. 10.37** Note Purchase and Guarantee Agreement, dated as of September 12, 2019, among Getty Realty Corp., certain of its subsidiaries party thereto and American General Life Insurance Company (“AIG”). Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on September 30, 2019 (File No. 001- 13777) and incorporated herein by reference. 10.38** Note Purchase and Guarantee Agreement, dated as of September 12, 2019, among Getty Realty Corp., certain of its subsidiaries party thereto, Massachusetts Mutual Life Insurance Company (“MassMutual”) and certain of its affiliates. Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on September 30, 2019 (File No. 001- 13777) and incorporated herein by reference. 10.39 Consent and Second Amendment, dated as of September 12, 2019, to Credit Agreement among Getty Realty Corp., certain of its subsidiaries party thereto, Bank of America, N.A. as Administrative Agent, Swing Line Lender, an L/C Issuer and as a Lender, and the other leaders party thereto. Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on September 30, 2019 (File No. 001- 13777) and incorporated herein by reference. 10.40*** Fifth Amended and Restated Note Purchase and Guarantee Agreement, dated as of December 4, 2020, among Getty Realty Corp., Prudential and certain of its affiliates. Filed as Exhibit 10.40 to the Company’s Annual Report on Form 10-K filed on February 25, 2021 (File No. 001-13777) and incorporated herein by reference. 10.41*** First Amended and Restated Note Purchase and Guarantee Agreement, dated as of December 4, 2020, between Getty Realty Corp. and AIG. Filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K filed on February 25, 2021 (File No. 001-13777) and incorporated herein by reference. 10.42*** First Amended and Restated Note Purchase and Guarantee Agreement, dated as of December 4, 2020, among Getty Realty Corp., MassMutual and certain of its affiliates. Filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed on February 25, 2021 (File No. 001-13777) and incorporated herein by reference. 10.43* 10.44* 10.45* 10.46 Form of Restricted Stock Unit Agreement under the Getty Realty Corp. Second Amended and Restated 2004 Omnibus Incentive Compensation Plan. Filed as Exhibit 10.43 to the Company’s Annual Report on Form 10-K filed on February 25, 2021 (File No. 001-13777) and incorporated herein by reference. Getty Realty Corp. Third Amended and Restated 2004 Omnibus Incentive Compensation Plan. Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2021 (File No. 001-13777) and incorporated herein by reference. Form of Restricted Stock Unit Grant Award under the 2004 Getty Realty Corp. Third Amended and Restated 2004 Omnibus Incentive Compensation Plan. Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 29, 2021 (File No. 001-13777) and incorporated herein by reference. Second Amended and Restated Credit Agreement, dated as of October 27, 2021, among Getty Realty Corp., certain of its subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and the other agents and lenders party thereto. Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2021 (File No. 001-13777) and incorporated herein by reference. 103 Exhibit Number Description of Document Location of Document 10.47*** First Amendment to the Note Purchase Agreement and Guarantee Agreement, dated as of October 27, 2021, among Getty Realty Corp., The Prudential Insurance Company of America and certain of its affiliates that are the holders of the notes signatory thereto. Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 1, 2021 (File No. 001-13777) and incorporated herein by reference. 10.48*** First Amendment to the Note Purchase Agreement and Guarantee Agreement, dated as of October 27, 2021, among Getty Realty Corp., American General Life Insurance Company and certain of its affiliates that are the holders of the notes signatory thereto. Filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 1, 2021 (File No. 001-13777) and incorporated herein by reference. 10.49*** First Amendment to the Note Purchase Agreement and Guarantee Agreement, dated as of October 27, 2021, among Getty Realty Corp., {Barings} and certain of its affiliates that are the holders of the notes signatory thereto. Filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 1, 2021 (File No. 001-13777) and incorporated herein by reference. 10.50*** First Amendment to the Note Purchase Agreement and Guarantee Agreement, dated as of October 27, 2021, among Getty Realty Corp., Metropolitan Life Insurance Company and certain of its affiliates that are the holders of the notes signatory thereto. Filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on November 1, 2021 (File No. 001-13777) and incorporated herein by reference. 10.51 Distribution Agreement by and among Getty Realty Corp., J.P. Morgan Securities LLC, BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., RBC Capital Markets, LLC, Robert W. Baird & Co. Incorporated, BTIG, LLC, Capital One Securities, Inc. and JMP Securities LLC, dated February 26, 2021. Filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on March 1, 2021 (File No. 001-13777) and incorporated herein by reference. 10.52 Form of Master Forward Confirmation Filed as Exhibit 1.2 to the Company’s Current Report on Form 8-K filed on March 1, 2021 (File No. 001-13777) and incorporated herein by reference. 21 23 31.1 31.2 32.1 32.2 Subsidiaries of the Company. Filed herewith. Consent of Independent Registered Public Accounting Firm. Filed herewith. Certification of Christopher J. Constant, President and Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. Filed herewith. Certification of Brian Dickman, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a- 14(a) under the Securities Exchange Act of 1934, as amended. Filed herewith. Certification of Christopher J. Constant, President and Chief Executive Officer, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. § 1350. Filed herewith. Certification of Brian Dickman, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a- 14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. § 1350. Filed herewith. 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Filed herewith. Filed herewith. 104 Exhibit Number Description of Document Location of Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Filed herewith. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Filed herewith. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Filed herewith. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Filed herewith. 104 Cover Page Interactive Data File Formatted as Inline XBRL and contained in Exhibit 101. * Management contract or compensatory plan or arrangement. ** Confidential treatment has been granted for certain portions of this Exhibit pursuant to Rule 24b-2 under the Exchange Act, which portions are omitted and filed separately with the SEC. *** Certain portions of this exhibit (indicated by “[***]”) have been omitted because they are not material. Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. The exhibits listed in this Exhibit Index which were filed or furnished with our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission are available upon payment of a $25 fee per exhibit, upon request from us, by writing to Investor Relations addressed to Getty Realty Corp., 292 Madison Avenue, 9th Floor, New York, NY 10017. Our website address is www.gettyrealty.com. Our website contains a hyperlink to the EDGAR database of the Securities and Exchange Commission at www.sec.gov where you can access, free-of-charge, each exhibit that was filed or furnished with our 2021 Annual Report on Form 10-K. 105 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES Getty Realty Corp. (Registrant) By: By: /S/ Brian Dickman Brian Dickman Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) February 24, 2022 /S/ Eugene Shnayderman Eugene Shnayderman Chief Accounting Officer and Controller (Principal Accounting Officer) February 24, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: By: By: By: /S/ CHRISTOPHER J. CONSTANT Christopher J. Constant President, Chief Executive Officer and Director (Principal Executive Officer) February 24, 2022 /S/ PHILIP E. COVIELLO Philip E. Coviello Director February 24, 2022 /S/ Mary Lou Malanoski Mary Lou Malanoski Director February 24, 2022 /s/ Evelyn Infurna Evelyn Infurna Director February 24, 2022 By: By: By: /S/ MILTON COOPER Milton Cooper Director February 24, 2022 /S/ Howard Safenowitz Howard Safenowitz Director and Chairman of the Board February 24, 2022 /S/ RICHARD E. MONTAG Richard E. Montag Director February 24, 2022 106 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] BOARD OF DIRECTORS EXECUTIVE OFFICERS CORPORATE INFORMATION Christopher J. Constant President and Chief Executive Officer Getty Realty Corp. Christopher J. Constant President and Chief Executive Officer Annual Meeting of Shareholders April 26, 2022 Virtual Meeting Milton Cooper Executive Chairman of the Board of Directors Kimco Realty Corporation Philip E. Coviello Retired Partner Latham & Watkins LLP Evelyn León Infurna Senior Vice President, Investor Relations SmartRent.com Inc. Mary Lou Malanoski Chief Financial Officer Colony S2k Holdings Richard E. Montag Former Senior Executive Richard E. Jacobs Group Howard B. Safenowitz President Safenowitz Family Corp. Joshua Dicker Executive Vice President, General Counsel and Secretary Brian R. Dickman Executive Vice President, Chief Financial Officer and Treasurer Mark J. Olear Executive Vice President, Chief Operating Officer Investor Relations (646) 349-0822 ir@gettyrealty.com Independent Auditor PricewaterhouseCoopers LLP New York, NY Transfer Agent Computershare Inc. 462 South 4th Street, Suite 1600 Louisville, KY 40202 (800) 368-5948 www.computershare.com Corporate Headquarters Getty Realty Corp. 292 Madison Avenue, 9th Floor New York, NY 10017 (646) 349-6000 www.gettyrealty.com GETTY REALTY CORP. 292 Madison Avenue, 9th Floor New York, NY 10017 

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