# Lineage, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Lineage, Inc.](/companies/line.md) (CIK 1868159)
- Form: 10-Q
- Filed: 2025-04-30
- Accepted by EDGAR: Apr 30, 2025, 11:12 ET
- Period: 2025-03-31
- Accession: 0001868159-25-000061
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1868159/000186815925000061/line-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1868159/000186815925000061/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.29bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $876.0m | us-gaap:CostOfGoodsAndServicesSold |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $56.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $57.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $8.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.01 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.01 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 228,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $139.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $151.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $134.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2025-03-31 | $1.39bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $18.77bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $1.41bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $9.12bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $5.13bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $55.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $8.59bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 76,556 characters.

*The following discussion of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”). In addition, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity, and capital resources, that involve risks, uncertainties, and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including those set forth below and those described under Item 1A. Risk Factors of our 2024 Annual Report on Form 10-K.*

### Management’s Overview

We are the world’s largest global temperature-controlled warehouse REIT, with a modern and strategically located network of properties. Our business is competitively positioned to deliver a seamless end-to-end, technology-enabled experience for a well-diversified and stable customer base, each with their own unique requirements in the temperature-controlled supply chain. As of March 31, 2025, we operated an interconnected global temperature-controlled warehouse network, comprising approximately 86 million square feet and 3.1 billion cubic feet of capacity across 488 warehouses predominantly located in densely populated critical-distribution markets, with 313 in North America, 88 in Asia-Pacific, and 87 in Europe.

We view, manage, and report on our business through two segments:

- Global warehousing, which utilizes our high-quality industrial real estate properties to provide temperature-controlled warehousing storage and services to our customers; and
- Global integrated solutions, which complements warehousing with supply chain services to facilitate the movement of products through the food supply chain to generate cost savings for customers and additional revenue streams for our company.

### Components of Our Results of Operations

***Global Warehousing Segment***. Our primary business is owning and operating temperature-controlled warehouses.

*Revenue*. Our global warehousing segment revenues are generated from storing frozen and perishable food and other products and providing related warehouse services for our customers. Storage revenues relate to the act of storing products for our customers within our warehouses. Storage revenues can be in the form of storage fees we charge customers for utilization of non-exclusive space or a set amount of reserved space in a warehouse, blast freezing fees we charge customers for utilization of specific ultra-cold spaces within a warehouse designed to rapidly reduce product temperature, and rent we charge customers for the lease of warehouse space pursuant to a lease agreement.

Warehouse services fees relate to handling and other services required to prepare and move customers’ pallets into, out of, and around the facilities. As part of our warehouse services, we offer receipt, handling, case-picking, retrieval of products from storage, building customized pallets and repackaging, order assembly and load consolidation, exporting and importing support services, container handling, cross-docking, quality control, and government-approved storage and inspection, among other services.

We utilize one of four types of contracts with our customers for use of space within our warehouses – warehouse agreements, rate letters, tariff sheets, and lease agreements. We may have one contract with a customer that covers all of the warehouses where we store products for the customer or, more typically, multiple contracts with the same customer, which may be driven by a variety of factors, such as the geographic location of the products stored by the customer, the type of products stored by the customer, or the different business units of a customer.

- *Warehouse Agreements.* Warehouse agreements are designed to accommodate the individual needs and characteristics of our customers and may include negotiated provisions, such as a fixed term, transactional pricing for warehouse services, pricing increase mechanisms based on inflationary cost increases and customer profile changes, a storage fee based on a minimum storage guarantee of the customer, additional storage fees based on on-demand storage used, a warehouseman’s lien on customer products held in our warehouses as security for payments, and provisions for interest

and late payments if payment is not received within 30 days after invoicing. The initial term of our warehouse agreements generally ranges from one to five years for typical customer relationships and 10 to 20 years for build-to-suit warehouses. Renewal periods, in each case, generally range from one to five years. Inflationary price increase mechanisms may be fixed or tied to relevant market indices, giving us the ability to recover costs for wage increases, increases in rent, power, real estate, and other costs.

- *Rate Letters.* Rate letters are agreements that typically establish storage fee rates on products stored in our warehouses and rates for warehouse services pursuant to terms set forth on a standardized warehouse receipt and related rate schedule. Rate letters may have terms similar to our warehouse agreements, including minimum storage guarantees, and are typically for a term of one year or less. Rate letters generally require our customers to pay for storage in seven to 30-day increments.
- *Tariff Sheets.* Similar to rate letters, tariff sheets are agreements that establish storage fee rates on products stored in our warehouses and on an as-utilized, on-demand basis, pursuant to terms set forth on a standardized warehouse receipt but that do not require the customer to use our warehouse or for us to reserve space for these customers; however, our tariff sheets in certain jurisdictions may provide for a de minimis minimum monthly payment from a customer to maintain its access to a given warehouse. Our tariff sheets are updated annually, and the agreements are short-term in nature.
- *Leases.* We lease space to certain customers that desire to manage their own temperature-controlled warehousing or carry on processing operations in warehouses adjacent, or in close proximity, to their production facilities. Our customer leased warehouses are typically leased to third parties, such as food producers, distributors and retailers, under triple net lease agreements pursuant to which the customer is responsible for all costs incurred for facility maintenance, insurance, taxes, utilities, and other services necessary or appropriate for the applicable warehouse and the business conducted at the applicable warehouse. We typically charge rent based on the square footage leased in our warehouses. We consider the creditworthiness of a potential tenant to be an important consideration in determining whether to engage in a new lease agreement.

*Cost of operations*. Our global warehousing segment cost of operations consists primarily of labor, power, and other warehouse costs. Labor comprises the largest component of the cost of operations from our global warehousing segment and consists primarily of employee wages (both direct and indirect) and benefits, excluding stock-based compensation. Changes in our labor expense are driven by, among other things, changes in headcount, changes in compensation levels and associated performance incentives, the use of third-party labor to support our operations, changes in terms of collective bargaining agreements, changes in customer requirements and associated work content, workforce productivity, labor availability, governmental policies and regulations, and variability in costs associated with employer-provided benefits. Our second-largest cost of operations is power utilized in the operation of our temperature-controlled warehouses. We may, from time to time, hedge our exposure to changes in power prices through fixed rate agreements. In addition, to the extent possible and appropriate, we may seek to mitigate or offset the impact of fluctuations in the price of power on our financial results through rate escalations or power surcharge provisions within our agreements with customers. We also look to implement energy saving alternatives to reduce energy consumption, including the installation of solar panels, state of the art refrigeration control systems, LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives for our fans and compressors, and rapid open/close doors. Additionally, business mix impacts our power expense depending on the temperature zone and type and frequency of freezing required (e.g., blast freezing). Other warehouse costs include utilities other than power, insurance, real estate taxes, repairs and maintenance, rent under real property operating leases where applicable, equipment costs, warehouse consumables (e.g., pallets and shrink-wrap), personal protective equipment, warehouse administration, and other related facility and services costs.

***Global Integrated Solutions Segment***. Our global integrated solutions segment provides our customers with a comprehensive approach to facilitate the movement of products along the supply chain.

*Revenues*. Our integrated solutions revenues are primarily driven by transportation fees, which may also include fuel and capacity surcharges, to our customers for whom we arrange the transportation of their products. Within transportation, which is the largest component of our global integrated solutions segment, our core focus areas are multi-vendor less-than-full-truckload consolidation, drayage services to and from ports, transportation brokerage, and freight forwarding. We also provide rail transportation services and, in select markets, foodservice distribution and e-commerce fulfillment services.

*Cost of operations*. Our global integrated solutions cost of operations consists primarily of third-party carrier charges, which are impacted by factors affecting those carriers, including truck and ocean liner capacity and driver and equipment availability in certain markets. Additionally, in certain markets we employ drivers and operate assets to serve our customers. Costs to operate these assets include wages (excluding stock-based compensation), fuel, tolls, insurance, and maintenance.

***Other Consolidated Operating Expenses.***

*Depreciation and amortization expenses.* Our depreciation and amortization expenses result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to our warehouses, both owned and leased, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, our computer hardware, and internal use software. We also incur depreciation related to owned transportation assets. Amortization relates primarily to intangible assets for customer relationships and finance lease right-of-use assets.

*General and administrative expenses.* Our general and administrative expenses consist primarily of costs associated with the administration of our global warehousing and global integrated solutions segments, including management wages and benefits, administrative, legal, business development, project management, sales, marketing, engineering, safety and compliance, food optimization, human resources, finance, accounting, network optimization, data science, and information technology personnel, transformational information technology expenses, equity incentive plans, communications and data processing, travel, professional fees, credit loss, training, office equipment, supplies, and, prior to our IPO, management fees paid to Bay Grove in accordance with the terms of the operating services agreement. Trends in general and administrative expenses are influenced by changes in headcount and compensation levels and achievement of incentive compensation targets. In connection with our IPO, we terminated the operating services agreement in order to internalize certain operating, strategic development, and financial services that were previously provided by Bay Grove under it, and entered into a transition services agreement with Bay Grove to provide certain of these services for a three-year term while we internalize such functions.

*Acquisition, transaction, and other expenses.* Our acquisition, transaction, and other expenses consist of costs with a high level of variability from period-to-period and include professional fees associated with planned and completed business expansion activities, and acquisition integration costs. In addition, it includes expenses associated with our IPO, including costs related to public company readiness efforts and costs incurred as a result of our IPO in the third quarter of 2024. These costs are expensed as incurred. It also includes employee-related expenses associated with acquisitions, such as acquisition-related severance and consulting agreements and certain cash-based incentive awards given to employees of legacy companies in acquisitions.

*Restructuring, impairment, and (gain) loss on disposals.* Our restructuring, impairment, and (gain) loss on disposals include certain contractual and negotiated severance and separation costs from exited former executives, costs related to reductions in headcount to achieve operational efficiencies, and costs associated with exiting non-strategic operations. We record such costs when there is a substantive plan for employee severance or employees are otherwise entitled to benefits (e.g., in case of one-time terminations) and related costs are probable and estimable. It also includes gains (losses) on dispositions of property, plant, and equipment and impairments of long-lived assets, net of related gains on insurance recoveries.

### Key Factors Affecting Our Business and Financial Results

### Market Conditions

Our business is impacted by general economic and market conditions, as well as by national and international political, environmental, and socio-economic events.

Significant factors impacting our business have included:

- *Inflation and Customer Rate Increases*. In response to significant inflationary impacts in recent years across wages, energy, and other operational costs, we implemented customer rate increases to offset such impacts to our operating results. We believe that higher food costs have continued to impact end-consumers’ buying decisions for certain commodities, which could negatively impact our customers. While certain indicators have suggested downward progress in inflation, the global economy continues to be impacted by elevated inflation rates and faces further inflation risk. In addition, tariff and other trade policies may continue to cause overall uncertainty and could further aggravate inflation.
- *Occupancy and Throughput*. Coming out of the global pandemic, we experienced higher physical occupancy levels through the first half of 2023, particularly in North America, significantly driven by customers increasing production and inventories in response to supply chain backlogs in recent years. Beginning in the second half of

2023, customers began rationalizing inventory levels in response to continued higher interest rates and inflation, which has driven changes in customer demand. As our customers adjust to these new demand levels, we have seen lower throughput volume across our network. Occupancy and throughput are also impacted by import and export activity, and could be impacted by changes in tariffs and trade policies. We are continuing to monitor the impact of tariffs on our and our customers’ business, but we believe that over the long-term, end-consumer demand will remain consistent with historic levels. To optimize our global warehousing network and maximize NOI, we review our operations to determine whether it is beneficial to reposition or temporarily idle existing warehouses or consolidate existing operations. If such actions are taken, we strive to relocate customers affected by such activities into other warehouses in our global warehousing network.

- *Labor*. Following headwinds in recent years from wage inflation, labor shortages, and team member turnover, our team has focused on strategic initiatives to decrease turnover through our stock-based compensation awards, higher wages, engagement best practices, and training to help retain talent. Retention has improved due to these internal efforts and macroeconomic factors.
- *Power Costs*. Following increased power costs in prior years, particularly in our European operations, our power costs have stabilized. We have generally been able to pass increased power costs through to our customers, mitigating the impact of such cost increases on our operating results.

Refer to Item 1A. “Risk Factors” of our 2024 Annual Report in Form 10-K for additional information.

### Foreign Currency Translation Impact on Our Operations

Our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation on revenues and expenses incurred by our operations outside the United States. Future fluctuations of foreign currency exchange rates and their impact on our consolidated financial statements are inherently uncertain. Our primary currency exposures are to the euro, Canadian dollar, British pound sterling, and Australian dollar. Revenues and expenses are typically denominated in the local currency of the country in which they are derived or incurred, which partially mitigates the net impact of foreign currency fluctuations on our operating results and margins.

### How We Assess the Performance of Our Business

### Segment Net Operating Income or “Segment NOI”

We evaluate the performance of our business segments based on their net operating income relative to our overall results of operations. We use the term “segment net operating income” or “segment NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges, general and administrative expenses, stock-based compensation expense, restructuring and impairment expense, gains and losses on sale of assets, and acquisition, transaction, and other expenses). We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with Accounting Standards Codification (“ASC”) 280, *Segment Reporting.*

We also analyze the “segment NOI margin” for each of our business segments, which we calculate as segment NOI divided by segment revenues.

### Same Warehouse Analysis

We define our “same warehouse” population annually at the beginning of the calendar year. Our same warehouse population includes properties that were owned, leased, or managed for the entirety of two comparable periods and that have reported at least twelve months of consecutive normalized operations prior to January 1 of the current calendar year. We define “normalized operations” as properties that have been open for operation or lease after development or significant modification, including the expansion of a warehouse footprint or a warehouse rehabilitation subsequent to an event, such as a natural disaster or similar event causing disruption to operations. In addition, our definition of “normalized operations” takes into account changes in the ownership structure (e.g., purchase of a previously leased warehouse would result in a change in the nature of expenditures in the compared periods), which would impact comparability in our global warehousing segment NOI.

Acquired properties will be included in the “same warehouse” population if owned or leased by us as of the first business day of the prior calendar year and still owned by us as of the end of the current reporting period, unless the property is under development. The “same warehouse” pool can also be adjusted during the year to remove properties that were sold or entering development subsequent to the beginning of the current calendar year. As such, the “same warehouse” population for the period ended March 31, 2025 includes all properties that we owned as of January 1, 2024 which had both been owned and had reached “normalized operations” by January 1, 2024.

We calculate “same warehouse NOI” as revenues for the same warehouse population less its cost of operations (excluding any depreciation and amortization, general and administrative expenses, stock-based compensation expense, restructuring and impairment expense, gains and losses on sale of assets, and acquisition, transaction, and other expense). We evaluate the performance of the warehouses we own, lease, or manage using a “same warehouse” analysis, and we believe that same warehouse NOI is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period, thereby eliminating the effects of changes in the composition of our warehouse portfolio on performance measures.

The following table shows the composition of our warehouse portfolio as of March 31, 2025.

|  |  |
| --- | ---: |
| Total warehouses(1) | 469 |
| Same warehouse facilities | 427 |
| Non-same warehouse facilities | 42 |

(1) Excludes 19 warehouses in our global integrated solutions segment as of March 31, 2025. We categorize warehouses as part of our global integrated solutions segment if the primary business conducted in those warehouses is within our global integrated solutions segment.

Same warehouse NOI is not a measurement of financial performance under GAAP. In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same warehouse or calculate same warehouse NOI in a manner consistent with our definition or calculation. Same warehouse NOI should be considered as a supplement, but not as an alternative, to our results calculated in accordance with GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.

### Economic Occupancy of Our Warehouses

We define average economic occupancy as the aggregate number of physical pallets on hand and any additional pallet positions otherwise contractually committed and paid for by customers for a given period divided by the approximate number of average physical pallet positions in our warehouse for the applicable period. We estimate the number of contractually committed pallet positions by taking into account the actual pallet commitment specified in each customer’s warehouse agreement and subtracting the physical pallets on hand for that customer. We regard economic occupancy as an important driver of our financial results.

### Physical Occupancy of Our Warehouses

We define average physical occupancy as the average number of physical pallets on hand divided by the estimated number of average physical pallet positions in our warehouses for the applicable period. We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if-racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and other warehouse attributes. We regard physical occupancy as an important driver of our financial results.

### Throughput at Our Warehouses

The level and nature of throughput at our warehouses is an important factor impacting our warehouse services revenues. Throughput refers to the volume of inbound pallets that enter our warehouses plus the volume of outbound pallets that exit our warehouses, divided by two. Higher levels of throughput drive warehouse services revenues in our global warehousing segment, as customers are typically billed transactionally for these services. The nature of throughput may be driven by the expected inventory turns of the underlying product or commodity. Throughput pallets can be influenced by both customers’ production as well as shifts in demand preferences. Customers’ production levels, which respond to market conditions, labor availability, supply chain dynamics, and consumer preferences, may impact inbound pallets. Similarly, a change in inventory turnover due to shift in consumer demand may impact outbound pallets.

### Results of Operations

The following discussion represents our analysis of results of operations for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

### Comparison of Results for the Three Months Ended March 31, 2025 and 2024

### Global Warehousing Segment

The following table presents the operating results of our warehouse segment for the three months ended March 31, 2025 and 2024.

*(in millions except revenue per pallet)*

|  | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Warehouse storage | $491 | $516 | (4.8)% |
| Warehouse services | 453 | 453 | —% |
| **Total global warehousing segment revenues** | **944** | **969** | **(2.6)%** |
| Labor(1) | 356 | 354 | 0.6% |
| Power | 49 | 47 | 4.3% |
| Other warehouse costs(2) | 179 | 183 | (2.2)% |
| **Total global warehousing segment cost of operations** | **584** | **584** | **—%** |
| **Global warehousing segment NOI** | **$360** | **$385** | **(6.5)%** |
| Total global warehousing segment margin | 38.1% | 39.7% | (160) bps |
| Number of warehouse sites | 469 | 463 |  |
| **Warehouse storage(3)** |  |  |  |
| Average economic occupancy |  |  |  |
| Average occupied economic pallets (in thousands) | 8,056 | 8,187 | (1.6)% |
| Economic occupancy percentage | 81.0% | 83.6% | (260) bps |
| Storage revenue per economic occupied pallet | $60.93 | $62.98 | (3.3)% |
| Average physical occupancy |  |  |  |
| Average physical occupied pallets (in thousands) | 7,506 | 7,603 | (1.3)% |
| Average physical pallet positions (in thousands) | 9,949 | 9,796 | 1.6% |
| Physical occupancy percentage | 75.4% | 77.6% | (220) bps |
| Storage revenue per physical occupied pallet | $65.39 | $67.82 | (3.6)% |
| **Warehouse services(3)** |  |  |  |
| Throughput pallets (in thousands) | 12,984 | 12,874 | 0.9% |
| Warehouse services revenue per throughput pallet | $32.02 | $32.40 | (1.2)% |

(1) Excludes less than $1 million of stock-based compensation expense for the three months ended March 31, 2025.

(2) Includes real estate rent expense (operating leases) of $23 million and $25 million for the three months ended March 31, 2025 and 2024, respectively, and non-real estate rent expense (equipment lease and rentals) of $5 million and $5 million for the three months ended March 31, 2025 and 2024, respectively.

(3) Warehouse storage and warehouse services metrics exclude managed sites.

Global warehousing segment revenues were $944 million for the three months ended March 31, 2025, a decrease of $25 million, or 2.6%, compared to $969 million for the three months ended March 31, 2024. The net decrease was primarily driven by a $38 million decrease in our same warehouse pool, partially offset by a $13 million net increase in our non-same warehouse pool, further discussed below. The foreign currency translation of revenues earned by our foreign operations had an $11 million unfavorable impact compared to the three months ended March 31, 2024.

Global warehousing segment cost of operations was $584 million for the three months ended March 31, 2025, which was flat compared to the three months ended March 31, 2024. A $9 million decrease in our same warehouse pool was offset by a $9 million net increase in our non-same warehouse pool, further discussed below. The foreign currency translation of cost of operations from our foreign operations had a $7 million favorable impact compared to the three months ended March 31, 2024.

Global warehousing segment NOI was $360 million for the three months ended March 31, 2025, a decrease of $25 million, or 6.5%, compared to $385 million for the three months ended March 31, 2024. The net decrease included a decrease of $29 million in our same warehouse pool, partially offset by a net increase of $4 million in our non-same warehouse pool, further discussed below. The foreign currency translation from our foreign operations had a $4 million net unfavorable impact compared to the three months ended March 31, 2024.

#### Same Warehouse Results

*(in millions except revenue per pallet)*

|  | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Warehouse storage | $456 | $483 | (5.6)% |
| Warehouse services | 419 | 430 | (2.6)% |
| **Total same warehouse revenues** | **875** | **913** | **(4.2)%** |
| Labor | 331 | 336 | (1.5)% |
| Power | 44 | 44 | —% |
| Other warehouse costs | 163 | 167 | (2.4)% |
| **Total same warehouse cost of operations** | **538** | **547** | **(1.6)%** |
| **Same warehouse NOI** | **$337** | **$366** | **(7.9)%** |
| Total same warehouse margin | 38.5% | 40.1% | (160) bps |
| Number of same warehouse sites | 427 | 427 |  |
| **Warehouse storage(1)** |  |  |  |
| Economic occupancy |  |  |  |
| Average occupied economic pallets (in thousands) | 7,487 | 7,671 | (2.4)% |
| Economic occupancy percentage | 82.1% | 83.6% | (150) bps |
| Storage revenue per economic occupied pallet | $60.88 | $63.00 | (3.4)% |
| Physical occupancy |  |  |  |
| Average physical occupied pallets (in thousands) | 6,974 | 7,109 | (1.9)% |
| Average physical pallet positions (in thousands) | 9,121 | 9,173 | (0.6)% |
| Physical occupancy percentage | 76.5% | 77.5% | (100) bps |
| Storage revenue per physical occupied pallet | $65.36 | $67.97 | (3.8)% |
| **Warehouse services(1)** |  |  |  |
| Throughput pallets (in thousands) | 11,894 | 12,109 | (1.8)% |
| Warehouse services revenue per throughput pallet | $32.06 | $32.54 | (1.5)% |

(1) Warehouse storage and warehouse services metrics exclude managed sites.

Same warehouse storage revenues decreased $27 million or 5.6% compared to the three months ended March 31, 2024, primarily driven by lower average rates, as rate increases were more than offset by changes in customer mix, and by lower average occupancy. Economic occupancy decreased by 150 basis points, as our customers rationalized inventory and production levels during continued economic pressures. Same warehouse storage revenues per economic occupied pallet decreased 3.4% compared to the prior year, primarily driven by unfavorable rates, as discussed above, and other changes in our business profile in response to changing customer needs.

Same warehouse services revenues decreased $11 million or 2.6% compared to the three months ended March 31, 2024, primarily driven by lower rates and other changes in our business profile in response to changing customer needs and lower throughput volumes. Same warehouse services revenue per throughput pallet decreased 1.5% compared to the prior year. Throughput pallets at our same warehouses decreased 1.8% compared to the three months ended March 31, 2024, primarily driven by customer rationalization of inventory and production levels as discussed above.

Same warehouse cost of operations decreased $9 million or 1.6% compared to the three months ended March 31, 2024, primarily driven by lower labor and other warehouse costs, including supplies and maintenance, resulting from decreases in occupancy and throughput volumes discussed above.

#### Non-Same Warehouse Results

*(in millions except revenue per pallet)*

|  | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Warehouse storage | $35 | $33 | 6.1% |
| Warehouse services | 34 | 23 | 47.8% |
| **Total non-same warehouse revenues** | **69** | **56** | **23.2%** |
| Labor | 25 | 18 | 38.9% |
| Power | 5 | 3 | 66.7% |
| Other warehouse costs | 16 | 16 | —% |
| **Total non-same warehouse cost of operations** | **46** | **37** | **24.3%** |
| **Non-same warehouse NOI** | **$23** | **$19** | **21.1%** |
| Total non-same warehouse margin | 33.3% | 33.9% | (60) bps |
| Number of non-same warehouse sites(1) | 42 | 36 |  |
| **Warehouse storage(2)** |  |  |  |
| Economic occupancy |  |  |  |
| Average occupied economic pallets (in thousands) | 569 | 516 | 10.3% |
| Economic occupancy percentage | 68.7% | 82.8% | (1,410) bps |
| Storage revenue per economic occupied pallet | $61.51 | $62.80 | (2.1)% |
| Physical occupancy |  |  |  |
| Average physical occupied pallets (in thousands) | 532 | 494 | 7.7% |
| Average physical pallet positions (in thousands) | 828 | 623 | 32.9% |
| Physical occupancy percentage | 64.3% | 79.3% | (1,500) bps |
| Storage revenue per physical occupied pallet | $65.78 | $65.63 | 0.2% |
| **Warehouse services(2)** |  |  |  |
| Throughput pallets (in thousands) | 1,090 | 765 | 42.5% |
| Warehouse services revenue per throughput pallet | $31.52 | $30.12 | 4.6% |

(1) Refer to our “Same Warehouse Analysis,” which describes the composition of our non-same warehouse pool.

(2) Warehouse storage and warehouse services metrics exclude managed sites.

Non-same warehouse revenues increased $13 million or 23.2% compared to the three months ended March 31, 2024, including approximately $21 million from acquisitions and $5 million from recently completed greenfield and expansion projects, partially offset by a $13 million net decrease from other non-same warehouse sites including closed facilities.

Non-same warehouse cost of operations increased $9 million or 24.3% compared to the three months ended March 31, 2024, including approximately $13 million from acquisitions and $2 million from recently completed greenfield and expansion projects, partially offset by a $5 million net decrease from other non-same warehouse sites including closed facilities.

### Global Integrated Solutions Segment

The following table presents the operating results of our global integrated solutions segment for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Global Integrated Solutions segment revenues | $348 | $359 | (3.1)% |
| Global Integrated Solutions segment cost of operations(1) | 291 | 300 | (3.0)% |
| Global Integrated Solutions segment NOI | **$57** | **$59** | **(3.4)%** |
| Global Integrated Solutions margin | 16.4% | 16.4% | — bps |

(1) Excludes $1 million of stock-based compensation expense for the three months ended March 31, 2025.

Global integrated solutions segment revenues were $348 million for the three months ended March 31, 2025, a decrease of $11 million, or 3.1%, compared to $359 million for the three months ended March 31, 2024. The decrease was primarily due to lower volumes. In addition, the foreign currency translation of revenues earned by our foreign operations had a $4 million unfavorable impact compared to the three months ended March 31, 2024.

Global integrated solutions segment cost of operations was $291 million for the three months ended March 31, 2025, a decrease of $9 million, or 3.0%, compared to $300 million for the three months ended March 31, 2024. The decrease was due to lower volumes and cost controls. The foreign currency translation of cost of operations from our foreign operations had a $4 million favorable impact compared to the three months ended March 31, 2024.

Global integrated solutions segment NOI was $57 million for the three months ended March 31, 2025, a decrease of $2 million, or 3.4%, compared to $59 million for the three months ended March 31, 2024. Foreign currency translation had a net impact of less than $1 million compared to three months ended March 31, 2024.

### Other Consolidated Operating Expenses

|  | Three Months Ended March 31, | Change |
| --- | ---: | ---: |
|  | **2025** | **2024%** |
|  | **(in millions)** |  |
| Other consolidated operating expense: |  |  |
| Depreciation and amortization expense | $212 | $211 0.5% |
| General and administrative expense | $154 | $124 24.2% |
| Acquisition, transaction, and other expense | $15 | $8 87.5% |
| Restructuring, impairment, and (gain) loss on disposals | $(21) | $— n.m. |

*Depreciation and amortization expense*. Depreciation and amortization expense was $212 million for the three months ended March 31, 2025, an increase of $1 million, or 0.5%, compared to $211 million for the three months ended March 31, 2024.

*General and administrative expense*. General and administrative expenses were $154 million for the three months ended March 31, 2025, an increase of $30 million, or 24.2%, compared to $124 million for the three months ended March 31, 2024. The increase was primarily due to $31 million of additional stock-based compensation expense driven by the restructuring of our equity compensation plans in conjunction with becoming a public company. For the three months ended March 31, 2025 and 2024, general and administrative expenses were 11.9% and 9.3% of total revenues, respectively, with the increase driven by the stock-based compensation expense mentioned above.

*Acquisition, transaction, and other expense*. Acquisition, transaction, and other expenses were $15 million for the three months ended March 31, 2025, an increase of $7 million compared to $8 million for the three months ended March 31, 2024. The increase was primarily due to the recognition of stock-based compensation expense related to one-time awards associated with our IPO and fair value adjustments related to put options issued in connection with the IPO, partially offset by a decrease in acquisition- related costs. For further detail on costs associated with our IPO and stock-based compensation, see Note 2, *Capital structure and noncontrolling interests* and Note 14, *Stock-based compensation* to the condensed consolidated financial statements included in this Quarterly Report.

*Restructuring, impairment, and (gain) loss on disposals*. Restructuring, impairment, and (gain) loss on disposals were a net gain of $21 million for the three months ended March 31, 2025, a decrease of $21 million compared to a net gain of less than $1 million for the three months ended March 31, 2024.

The three months ended March 31, 2025 included a net gain of $24 million related to a fire which occurred at the Company’s warehouse in Kennewick, Washington. The net gain consisted of insurance reimbursement of $25 million, including $8 million of business interruption insurance recoveries, offset by $1 million of clean-up costs (see Note 16, *Commitments and contingencies* in our condensed consolidated financial statements included in this Quarterly Report for details).

### Other Income (Expense)

The following table presents other items of income and expense for the three months ended March 31, 2025 and 2024.

|  | Three Months Ended March 31, | Change |
| --- | ---: | ---: |
|  | **2025** | **2024%** |
|  | **(in millions)** |  |
| Other income (expense): |  |  |
| Interest expense, net | $(60) | $(139) (56.8)% |
| Gain (loss) on extinguishment of debt | $— | $(7) n.m. |
| Gain (loss) on foreign currency transactions, net | $16 | $(11) n.m. |
| Equity income (loss), net of tax | $(4) | $(2) 100.0% |

*Interest (expense), net.* We reported a net interest expense of $60 million for the three months ended March 31, 2025, a decrease of $79 million, or 56.8%, compared to $139 million for the three months ended March 31, 2024. The average effective interest rate of our outstanding debt was 4.3% for the three months ended March 31, 2025, a decrease from 6.1% for the three months ended March 31, 2024, due to lower average borrowings after substantial debt repayments with IPO proceeds during the second half of 2024. As a result of this repayment, the notional value of our hedging instruments represents a larger proportion of our overall borrowings. When taking into account income (expense) generated from hedging instruments, the average effective interest rate of our outstanding debt was 2.8% for the three months ended March 31, 2025, a decrease from 5.0% for the three months ended March 31, 2024. For additional information regarding our net interest expense, see Note 10, *Interest expense* in our condensed consolidated financial statements included in this Quarterly Report.

*Gain (loss) on extinguishment of debt.* There was no gain (loss) on debt extinguishment recognized for the three months ended March 31, 2025. We recognized a loss on debt extinguishment of $7 million for three months ended March 31, 2024, as the result of various refinancing arrangements. For additional information regarding our debt, see Note 8, *Debt* in our condensed consolidated financial statements included in this Quarterly Report.

*Gain (loss) on foreign currency transactions, net.* We reported a net foreign currency exchange gain of $16 million for the three months ended March 31, 2025 compared to a net loss of $11 million for the three months ended March 31, 2024. The change in foreign currency exchange gain (loss) was due to favorable foreign currency exchange rates against the U.S. dollar, with the largest impacts driven by the euro.

*Equity income (loss), net of tax.* We reported a net loss from equity method investments of $4 million for the three months ended March 31, 2025, as compared to $2 million net loss for the three months ended March 31, 2024. The increase in net loss was primarily related to our investment in Emergent Cold LatAm Holdings, LLC.

### Income Tax Expense (Benefit)

Income tax expense for the three months ended March 31, 2025 was $8 million, which represented an increase of $18 million from the income tax benefit of $10 million for the three months ended March 31, 2024. The tax expense in 2025 was principally created by the tax-effect of pre-tax earnings in various jurisdictions and nondeductible stock-based compensation, reduced by tax adjustments related to REIT activity. The tax benefit in 2024 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, changes in tax laws, and withholding taxes paid in various jurisdictions. Our income taxes are discussed in more detail in Note 7, *Income taxes* to the condensed consolidated financial statements included in this Quarterly Report.

### Non-GAAP Financial Measures

We use the following non-GAAP financial measures as supplemental performance measures of our business: segment NOI, FFO, Core FFO, Adjusted FFO, EBITDA, EBITDAre, and Adjusted EBITDA. We also use same warehouse and non-same warehouse metrics described above.

We calculate total segment NOI (or “NOI”) as our total revenues less our cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense). We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with ASC 280, *Segment Reporting*. We believe segment NOI is helpful to investors as a supplemental performance measure to net income because it assists both investors and management in understanding the core operations of our business. There is no industry definition of segment NOI and, as a result, other REITs may calculate segment NOI or other similarly-captioned metrics in a manner different than we do.

The table below reconciles total segment NOI to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income (loss) | $— | $(48) |
| Stock-based compensation expense in cost of operations | 1 | — |
| General and administrative expense | 154 | 124 |
| Depreciation expense | 158 | 158 |
| Amortization expense | 54 | 53 |
| Acquisition, transaction, and other expense | 15 | 8 |
| Restructuring, impairment, and (gain) loss on disposals | (21) | — |
| Equity (income) loss, net of tax | 4 | 2 |
| (Gain) loss on foreign currency transactions, net | (16) | 11 |
| Interest expense, net | 60 | 139 |
| (Gain) loss on extinguishment of debt | — | 7 |
| Income tax expense (benefit) | 8 | (10) |
| Total segment NOI | $417 | $444 |

We calculate EBITDA for Real Estate, or “EBITDAre”, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or “NAREIT”, defined as earnings before interest income or expense, taxes, depreciation and amortization, net loss or gain on sale of real estate, net of withholding taxes, impairment write-downs on real estate property, and adjustments to reflect our share of EBITDAre for partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and useful life of related assets among otherwise comparable companies.

We also calculate our Adjusted EBITDA as EBITDAre further adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), other nonoperating income or expense, acquisition, restructuring, and other expense, foreign currency exchange gain or loss, stock-based compensation expense, loss or gain on debt extinguishment and modification, impairment of investments in non-real estate, technology transformation, and reduction in EBITDAre from partially owned entities. We believe that the presentation of Adjusted EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are otherwise included in EBITDAre but which we do not believe are indicative of our core business operations. EBITDAre and Adjusted EBITDA are not measurements of financial performance under GAAP, and our EBITDAre and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Adjusted EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Our calculations of EBITDAre and Adjusted EBITDA have limitations as analytical tools, including the following:

- these measures do not reflect our historical or future cash requirements for maintenance capital expenditures or growth and expansion capital expenditures;
- these measures do not reflect changes in, or cash requirements for, our working capital needs;
- these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
- these measures do not reflect our tax expense or the cash requirements to pay our taxes; and
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements.

We use EBITDA, EBITDAre, and Adjusted EBITDA as measures of our operating performance and not as measures of liquidity.

The table below reconciles EBITDA, EBITDAre, and Adjusted EBITDA to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three months ended March 31, 2025, and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income (loss) | $— | $(48) |
| Adjustments: |  |  |
| Depreciation and amortization expense | 212 | 211 |
| Interest expense, net | 60 | 139 |
| Income tax expense (benefit) | 8 | (10) |
| EBITDA | $280 | $292 |
| Adjustments: |  |  |
| Allocation of EBITDAre of noncontrolling interests | — | (1) |
| EBITDAre | $280 | $291 |
| Adjustments: |  |  |
| Net (gain) loss on sale of non-real estate assets | (2) | (1) |
| Acquisition, restructuring, and other | 17 | 9 |
| Technology transformation | 5 | 3 |
| (Gain) loss on property destruction | (24) | — |
| (Gain) loss on foreign currency exchange transactions, net | (16) | 11 |
| Stock-based compensation expense | 40 | 5 |
| (Gain) loss on extinguishment of debt | — | 7 |
| Non-real estate impairment | 1 | — |
| Allocation related to unconsolidated JVs | 3 | 1 |
| Allocation adjustments of noncontrolling interests | — | 1 |
| Adjusted EBITDA | $304 | $327 |

53

We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the NAREIT. NAREIT defines FFO as net income or loss determined in accordance with GAAP, excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, in-place lease intangible amortization, real estate asset impairment, and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization, and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs.

We calculate core funds from operations, or Core FFO, as FFO adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), finance lease ROU asset amortization real estate, non-real estate impairments, acquisition, restructuring and other, other nonoperating income or expense, loss on debt extinguishment and modifications and the effects of gain or loss on foreign currency exchange. We also adjust for the impact attributable to non-real estate impairments on unconsolidated joint ventures and natural disaster. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.

However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of recurring maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the utility of FFO and Core FFO as a measure of our performance may be limited.

We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred financing costs, amortization of debt discount/premium amortization of above or below market leases, straight-line net operating rent, provision or benefit from deferred income taxes, stock-based compensation expense from grants under our equity incentive plans, non-real estate depreciation and amortization, non-real estate finance lease ROU asset amortization, and recurring maintenance capital expenditures. We also adjust for Adjusted FFO attributable to our share of reconciling items of partially owned entities. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.

FFO, Core FFO, and Adjusted FFO are used by management, investors, and industry analysts as supplemental measures of operating performance of equity REITs. FFO, Core FFO and Adjusted FFO should be evaluated along with GAAP net income and net income per diluted share (the most directly comparable GAAP measures) in evaluating our operating performance. FFO, Core FFO, and Adjusted FFO do not represent net income or cash flows from operating activities in accordance with GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our condensed consolidated financial statements included elsewhere in this Quarterly Report. FFO, Core FFO, and Adjusted FFO should be considered as supplements, but not alternatives, to our net income or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculated by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do.

The table below reconciles FFO, Core FFO, and Adjusted FFO to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three months ended March 31, 2025, and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income (loss) | $— | $(48) |
| Adjustments: |  |  |
| Real estate depreciation | 85 | 85 |
| In-place lease intangible amortization | 1 | 2 |
| Real estate depreciation, (gain) loss on sale of real estate and real estate impairments on unconsolidated JVs | 1 | 1 |
| Allocation of noncontrolling interests | — | (1) |
| FFO | $87 | $39 |
| Adjustments: |  |  |
| Net (gain) loss on sale of non-real estate assets | (2) | (1) |
| Finance lease ROU asset amortization - real estate related | 18 | 18 |
| Non-real estate impairment | 1 | — |
| Acquisition, restructuring, and other | 20 | 9 |
| Technology transformation | 5 | 3 |
| (Gain) loss on property destruction | (24) | — |
| (Gain) loss on foreign currency transactions, net | (16) | 11 |
| (Gain) loss on extinguishment of debt | — | 7 |
| Core FFO | $89 | $86 |
| Adjustments: |  |  |
| Non-real estate depreciation and amortization | 100 | 100 |
| Finance lease ROU asset amortization - non-real estate | 8 | 7 |
| Amortization of deferred financing costs | 3 | 6 |
| Amortization of debt discount / premium | (1) | — |
| Deferred income taxes expense (benefit) | 11 | (23) |
| Straight line net operating rent | 1 | (2) |
| Stock-based compensation expense | 40 | 5 |
| Recurring maintenance capital expenditures | (32) | (30) |
| Allocation related to unconsolidated JVs | 1 | 1 |
| Allocation of noncontrolling interests | (1) | (2) |
| Adjusted FFO | $219 | $148 |

### Liquidity and Capital Resources

As of March 31, 2025, we had $195 million of cash and cash equivalents and $1.5 billion available under our Revolving Credit Facility (net of outstanding standby letters of credit in the amount of $64 million, which reduce availability). We currently expect that our principal sources of funding will include:

- current cash balances;
- cash flows from operations;
- our credit facilities; and
- other forms of debt financings and equity offerings.

Our liquidity requirements and capital commitments primarily consist of:

- operating activities and overall working capital;
- capital expenditures;
- development and acquisition activities;
- capital contributions;
- debt service obligations; and
- stockholder distributions.

As of March 31, 2025, we expect that our funding sources as noted above will be adequate to meet our short-term liquidity requirements and capital commitments for the next twelve months. For more information regarding our debt facilities, refer to Note 8, *Debt* in the condensed consolidated financial statements included in this Quarterly Report. We expect to utilize the same sources of capital we will rely on to meet our short-term liquidity requirements to also meet our long-term liquidity requirements, which include funding our operating activities, our debt service obligations and stockholder distributions, and our future development and acquisition activities.

### Recently Announced Transactions

On April 1, 2025, we borrowed from our Revolving Credit Facility to purchase three warehouse campuses from Bellingham Cold Storage for $121 million.

On April 30, 2025, we announced an agreement to acquire four cold storage warehouses and other related assets from Tyson Foods for approximately $247 million in cash, which we intend to finance using cash on hand and our Revolving Credit Facility. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2025. Additionally, the transaction contains a closing condition that we enter into an agreement to design, build, and operate two fully automated cold storage warehouses, with Tyson Foods as the anchor customer, estimated to cost over $740 million, funded using a combination of the sources identified under “Liquidity and Capital Resources” above.

### Dividends and Distributions

We are required to distribute at least 90% of our taxable income (excluding capital gains) on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to stockholders from cash flows from our operating activities. All such distributions are at the discretion of our board of directors. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. Amounts accumulated for distribution to stockholders are primarily invested in interest-bearing accounts, which are consistent with our intention to maintain REIT status.

As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs, as well as potential developments in new or existing properties or acquisitions. In addition, we may be required to use borrowings under our Revolving Credit Facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.

The board of directors of the Company declared a quarterly cash dividend of $0.5275 per share of common stock for the fourth quarter of 2024, which was paid on January 21, 2025. The board of directors of the Company also declared a quarterly cash dividend of $0.5275 per share of common stock for the first quarter of 2025. The dividend was payable to shareholders of record as of March 31, 2025 and was paid on April 21, 2025.

### Outstanding Indebtedness

The following table summarizes our outstanding indebtedness as of March 31, 2025 (in millions):

|  | As of March 31, 2025 |
| --- | ---: |
| Fixed rate | $2,156 |
| Variable rate—unhedged | 543 |
| Variable rate—hedged | 2,500 |
| **Total debt** | **$5,199** |
| Percent of total debt: |  |
| Fixed rate | 41.5% |
| Variable rate—unhedged | 10.4% |
| Variable rate—hedged | 48.1% |

The variable rate debt shown above bears interest at interest rates based on various one-month rates of which SOFR is the most significant, depending on the respective agreement governing the debt, including our Revolving Credit Facility and Term Loan A. As of March 31, 2025, our debt had a weighted average term to maturity of approximately 3.5 years, assuming exercise of extension options.

For further information regarding outstanding indebtedness, please see Note 8, *Debt* in the condensed consolidated financial statements included in this Quarterly Report.

#### Senior Unsecured Notes

The following table provides details of outstanding Senior Unsecured Notes (balances in millions):

|  | Aggregate Principal Amount at Issuance Borrowing Currency | USD | Maturity Date Stated Interest Rate(1) | March 31, 2025 |
| --- | ---: | ---: | --- | ---: |
| Series A Senior Notes | $300 | 300 | August 20, 2026 2.22% | $300 |
| Series B Senior Notes | $375 | 375 | August 20, 2028 2.52% | 375 |
| Series C Senior Notes | €128 | 137 | August 20, 2026 0.89% | 139 |
| Series D Senior Notes | €251 | 269 | August 20, 2031 1.26% | 272 |
| Series E Senior Notes | £145 | 183 | August 20, 2026 1.98% | 188 |
| Series F Senior Notes | £130 | 164 | August 20, 2028 2.13% | 168 |
| Series G Senior Notes | €80 | 86 | August 20, 2027 3.33% | 87 |
| Series H Senior Notes | €110 | 118 | August 20, 2029 3.54% | 119 |
| Series I Senior Notes | €50 | 54 | August 20, 2032 3.74% | 53 |
|  |  |  | Total Senior Unsecured Notes | $1,701 |

(1) Interest on our Senior Unsecured Notes is payable semi-annually in arrears.

The Senior Unsecured Notes are the joint and several obligations of Lineage Inc., Lineage OP, LP, Lineage Logistics Holdings, LLC, Lineage Logistics, LLC, certain U.S. subsidiaries that guarantee or otherwise becomes liable, as a borrower or a co-borrower or otherwise, under any of our material debt facilities and, in the case of Senior Unsecured Notes denominated in currencies other than the U.S. dollar, Lineage Treasury Europe B.V. and certain non-U.S. subsidiaries that guarantee or otherwise becomes liable, as a borrower or a co-borrower or otherwise, under any of our material debt facilities. The Senior Unsecured Notes rank pari passu with our other senior unsecured indebtedness, including the Revolving Credit Facility and Term Loan A, and are subordinated to any of the obligors’ existing and future secured debt.

We may prepay the Senior Unsecured Notes in full or in part, at any time, subject to notice requirements and minimum principal amount requirements, at 100% of the principal amount so prepaid, and the make-whole amount determined for the prepayment date with respect to such principal amount, and accrued interest to the date of prepayment. In the event of certain changes in tax law, Lineage Logistics, LLC or Lineage Treasury Europe B.V. may prepay the Senior Unsecured Notes at 100% of the principal amount so prepaid, and a modified make-whole amount and accrued interest to the date of prepayment. Upon a change of control or becoming subject to sanctions, Lineage Logistics, LLC must offer to prepay the entire unpaid principal amount of the Senior Unsecured Notes and accrued interest to the date of prepayment.

The note purchase agreements governing the Senior Unsecured Notes contain covenants that, among other things, limit our ability to incur additional debt, create liens against our assets, make acquisitions, pay dividends or distributions on our stock, repurchase our stock, merge or consolidate with another entity, transfer or sell assets, enter into transactions with affiliates, change our line of business, enter into negative pledges, and conduct activities that would result in us being subject to sanctions or violating sanctions. The note purchase agreements also require us to maintain a total leverage ratio, unsecured leverage ratio, secured leverage ratio, and fixed charge coverage ratio each quarter at the same levels as those set forth in the Revolving Credit and Term Loan Agreement. As of March 31, 2025, we were in compliance with our covenants under the note purchase agreements. The note purchase agreements governing the Senior Unsecured Notes also contain customary events of default, including defaults in the payment of principal, interest or fees, defaults in compliance with the covenants set forth in the note purchase agreements, cross-defaults to certain other indebtedness, and bankruptcy and other insolvency defaults.

### Security Interests in Customers’ Products

By operation of law and in accordance with our warehouse customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments. Such liens typically permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not available to us for re-sale.

Our credit loss expense related to customer receivables was $1 million and $1 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, we maintained allowances for uncollectible balances of $10 million and $10 million, respectively, which we believed to be adequate.

### Maintenance Capital Expenditures and Repair and Maintenance Expenses

Lineage prides itself on maintaining its facilities, fleet, and railcars at a high standard. We regularly update long-range maintenance plans by asset to ensure that our assets maintain the high quality and operational efficiency that our customers expect from us.

### Maintenance Capital Expenditures

Maintenance capital expenditures are capitalized funds used to maintain assets that will result in an extended useful life. This includes the cost to purchase and install, repair, or construct assets when it results in a useful life longer than one year and the installed cost per asset is over a *de minimis* threshold. Maintenance capital expenditures are related to both our global warehousing segment and global integrated solutions segment, including information technology, and are all, in management’s judgment, recurring in nature. These expenditures include maintenance performed multiple times over the lifetime of the facility or asset, such as replacing or repairing roofs, refrigeration systems, racking, material handling equipment, and fleet. These expenditures also include information technology maintenance to existing servers, equipment, and software.

The following table sets forth our recurring maintenance capital expenditures for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Global warehousing | $29 | $20 |
| Global integrated solutions | 1 | 5 |
| Information technology and other | 2 | 5 |
| Maintenance capital expenditures | $32 | $30 |

### Repair and Maintenance Expenses

Repair and maintenance expenses are incurred when assets need repair or replacement and do not qualify as capital expenditures. If the work does not materially extend the useful life of the asset or the asset value is less than a *de minimis* threshold, it would be recorded as an operating expense under repair and maintenance expenses. Examples include ordinary repairs on roofs, racking, refrigeration, and material handling equipment. Project-related expenses are excluded.

The following table sets forth our repair and maintenance expenses for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Global warehousing | $34 | $33 |
| Global integrated solutions | 13 | 14 |
| Repair and maintenance expenses | $47 | $47 |

### Integration Capital Expenditures

Integration capital expenditures are capitalized funds related to integrating acquired assets and businesses. Integration capital expenditures are one-time expenditures. These are typically acquisition-related costs, including maintenance on acquired assets that are beyond their useful life at the time of acquisition, rebranding expenditures, and information technology expenditures to standardize system usage across our business, and also include certain non-acquisition related costs, including safety and compliance projects to comply with any applicable policies, laws, or codes, such as installation of site security or a new fire suppression system, as well as freon-to-ammonia conversions.

The following table sets forth our integration capital expenditures for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Global warehousing | $8 | $8 |
| Information technology and other | 4 | 9 |
| Integration capital expenditures | $12 | $17 |

### External Growth Capital Investments

External growth capital investments include acquisitions, greenfield projects and expansion initiatives, information technology platform enhancements, and other capital projects which result in an economic return. We divide growth projects into the following categories:

- Acquisitions: The purchase of an external company or facility. Also includes the purchase of the real estate of facilities we currently lease.
- Greenfields and Expansions: Projects either to build a new facility, including the purchase of land, or to increase the size of an existing warehouse (as measured by cubic feet). The costs associated with construction and materials are included.
- Energy and Economic Return: Energy return projects are intended to increase energy efficiency by decreasing the amount of kWh or fossil fuels consumed or reducing the cost to procure energy. Common examples include installing new LED technology, installing solar panels at a warehouse, and electrification of transportation fleet. Economic return projects require an investment of capital for a future cash flow and/or segment NOI benefit that is not an acquisition, greenfield, expansion, or energy project. Examples include addition of blast cells, racking replacements, replacing freezer doors, purchasing compressors, buying out leased equipment, and purchasing new rail cars.
- Information Technology Transformation and Growth: Capital investments focused on (a) warehouse operations efficiency – deploying technology that leverages advanced algorithms and artificial intelligence to increase labor productivity and higher utilization; (b) customer experience and service – building and implementing technology solutions to improve response times, automate common tasks, and offer seamless multi-channel support elevating both customer and employee experience; and (c) sales management, pricing and billing – creating and integrating IT systems to streamline sales processes, optimize pricing, and enhance billing accuracy and efficiency.

The following table sets forth our external growth capital investments for the three months ended March 31, 2025 and 2024.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Acquisitions, including equity issued and net of cash acquired and adjustments (1) | $— | $59 |
| Greenfield and expansion expenditures | 37 | 36 |
| Energy and economic return initiatives | 16 | 22 |
| Information technology transformation and growth initiatives | 14 | 12 |
| External growth capital investments | $67 | $129 |

(1) Excludes buildings and land acquired through exercise of finance lease purchase options, where amount paid did not exceed the finance lease liability.

We completed one acquisition during the three months ended March 31, 2024. The greenfield and expansion expenditures related primarily to projects that remained under construction as of the respective period end, with a notable expansion at the Hobart, IN cold storage facility during the three months ended March 31, 2025 and the fully automated cold storage warehouse in Hazleton, PA during the three months ended March 31, 2024. Energy and economic return initiatives included corporate initiatives and smaller customer-driven growth projects. Information technology transformation and growth initiatives included spending on our patented LinOS technology.

### Historical Cash Flows

The following summary discussion of our cash flows is based on the condensed consolidated statements of cash flows included in this Quarterly Report.

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $139 | $105 |
| Net cash used in investing activities | $(138) | $(202) |
| Net cash provided by financing activities | $21 | $121 |

60

### Operating Activities

For the three months ended March 31, 2025, our net cash provided by operating activities was $139 million, compared to $105 million for the three months ended March 31, 2024. The increase was primarily due to an decrease in net loss, most notably from lower interest expense, and non-cash items, offset by unfavorable changes in working capital, most significantly in accounts receivables and prepaid expenses. The change in non-cash items for the three months ended March 31, 2025 was primarily driven by the $40 million stock compensation, $8 million proceeds from insurance recoveries for business interruptions, and $24 million gain on Kennewick insurance proceeds.

### Investing Activities

For the three months ended March 31, 2025, cash used in investing activities was $138 million. This was driven by $151 million in purchases of property, plant, and equipment, primarily for growth capital expenditures. This was partially offset by $17 million of insurance proceeds related to a fire which occurred at the Company’s warehouse in Kennewick, Washington in 2024 (see Note 16, *Commitments and contingencies* in our condensed consolidated financial statements included in this Quarterly Report for details). In addition, we invested $7 million in our equity method investee Emergent Cold LatAm Holdings, LLC.

For the three months ended March 31, 2024, cash used in investing activities was $202 million. This was driven by $147 million in purchases of property, plant, and equipment, primarily for growth capital expenditures. In addition, we invested $59 million in the acquisition of Entrepôt du Nord Inc and $5 million in Emergent Cold LatAm Holdings, LLC.

### Financing Activities

Our net cash provided by financing activities was $21 million for the three months ended March 31, 2025. Cash provided by financing activities during 2025 was primarily driven by $184 million of net borrowings on revolving credit lines, which allowed us to repay $25 million of long-term debt and finance leases and pay $134 million of dividends and other distributions.

Our net cash provided by financing activities was $121 million for the three months ended March 31, 2024. Cash provided by financing activities during 2024 consisted primarily of $1,205 million of net borrowings on revolving credit lines. The inflows were offset by $891 million net for repayments of long-term debt and finance leases, $112 million for distributions, $44 million for financing fees, and $25 million for redemption of common stock.

### Critical Accounting Policies and Estimates

The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates, assumptions, and judgments in certain circumstances that affect the reported amounts of assets, liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be most appropriate and reasonable. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as described in our 2024 Annual Report in Form 10-K.

### New Accounting Pronouncements

Refer to Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information regarding applicable new accounting pronouncements.

## Market risk

As filed, 3,646 characters.

### Interest Rate Risk

Our future income and cash flows relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.

As of March 31, 2025, we had $2,962 million of variable-rate debt under our revolver and term loan agreements bearing interest at Adjusted Term SOFR of 4.5%, plus a margin of 92.5 basis points. We have entered into interest rate hedges to effectively lock in the floating rates on $2,500 million of our variable-rate debt at a weighted average rate of 1.40% plus a margin of 92.5 basis points. These hedges include swapping $1,000 million of borrowings under the Term Loan A to a weighted average fixed interest rate of 0.49% plus a margin of 92.5 basis points through 2025 and 2% caps (plus margin) totaling $1,500 million on other variable-rate debt that expire in January 2026. As a result, our exposure to changes in interest rates as of March 31, 2025 primarily consists of our $543 million of unhedged variable rate debt. As of March 31, 2025, one-month term and daily SOFR were approximately 4.4%, therefore a 100 basis point increase in market interest rates would result in an increase in interest expense to service our variable-rate debt of approximately $5 million on an annualized basis. A 100 basis point decrease in market interest rates would result in a decrease in interest of approximately $5 million on an annualized basis.

### Foreign Currency Risk

We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign subsidiaries, as the revenues and expenses of these subsidiaries are typically generated in the currencies of the countries in which they operate. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. When the local currencies in these countries decline relative to our reporting currency, the U.S. dollar, our consolidated revenues, segment NOI margins, and net investment in properties and operations outside the United States decrease. The impact of currency fluctuations on our earnings is partially mitigated by the fact that most operating and other expenses are also incurred and paid in the local currency. The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses. Due to our constantly changing currency exposure and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on our business. As a result, changes in the relation of the currency of our international operations to U.S. dollars may also affect the book value of our assets and the amount of total equity. Such foreign currency exposure as of March 31, 2025 was not materially different from what we disclosed in our 2024 Annual Report in Form 10-K.

Gains or losses from translating the financial statements of our foreign subsidiaries are reflected in the Accumulated other comprehensive income (loss) component of equity within our condensed consolidated financial statements included in this Quarterly Report.

We enter into foreign currency derivative instruments to manage our exposure to fluctuations in exchange rates between the functional currencies of our subsidiaries and the currencies of the underlying cash flows. All derivatives are recognized on the condensed consolidated balance sheets at fair value.

## Controls and procedures

As filed, 1,689 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have concluded that our disclosures controls and procedures were effective as of March 31, 2025 at a reasonable assurance level. Such disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

### Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

## Risk factors

As filed, 145 characters.

There have been no material changes from the risk factors previously disclosed in “Risk Factors” included in our 2024 Annual Report in Form 10-K.

Filed Apr 30, 2025.
Source: SEC EDGAR, the filing index for accession 0001868159-25-000061. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.