Lineage, Inc.: Form 10-Q for the period ended Sep 30, 2025

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 September 30, 2025, we operated an interconnected global temperature-controlled warehouse network, comprising approximately 88 million square feet and 3.1 billion cubic feet of capacity across 500 warehouses predominantly located in densely populated critical-distribution markets, with 323 in North America, 89 in Europe, and 88 in Asia-Pacific.

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. 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. Trends in general and administrative expenses are influenced by changes in headcount and compensation levels and achievement of incentive compensation targets.

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 goodwill and 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. Offsetting these inflationary price increases, we are seeing pricing pressure in certain markets with excess capacity, but overall we expect pricing to remain stable for the remainder of the year within a range based upon types of services provided, seasonal harvests, and types of customers (local versus export). We believe that higher food costs have continued to impact end-consumers’ buying decisions for certain commodities, which could negatively impact specific customers; however, overall demand in retail and foodservice has grown recently, according to market data. Inflation overall has progressed toward more normal levels, however tariff and other trade policies have continued to cause overall uncertainty and aggravated inflation in certain sectors.
• 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, we believe customers began rationalizing inventory levels in response to factors such as continued higher interest rates and inflation. This rationalization has driven changes in customer demand for our warehouse space and services. As our customers continue to adjust to these new demand levels and rationalize inventory, we have seen lower occupancy and throughput volume across our network. In the third quarter of 2025, we saw a return to more normal seasonal inventory patterns, but occupancy levels were muted. We still anticipate increases early into the fourth quarter, driven by factors such as the end of the North American harvest season and holiday inventory build-ups. While our total occupancy outlook for the fourth quarter is unchanged as compared to our previous expectations, we are seeing slightly lower occupancy in the U.S. due to less than expected new U.S. business in the quarter, which is being offset by higher occupancy outside the U.S.

Occupancy, throughput, and related ancillary services are also impacted by import and export activity, and we have seen notable impacts in the third quarter due to tariffs and trade policies. As trade agreements are reached, 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. Additionally, in recent years, new supply of temperature-controlled warehousing capacity has come online, which is impacting occupancy and throughput in certain markets with excess capacity, although new supply coming online is expected to come down from recent 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, general and administrative expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, 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 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 September 30, 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 expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plan, 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 September 30, 2025.

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 and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024.

Comparison of Results for the Three Months Ended September 30, 2025 and 2024

Global Warehousing Segment

The following table presents the operating results of our global warehousing segment for the three months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

54

Global warehousing segment revenues were $1,013 million for the three months ended September 30, 2025, an increase of $41 million, or 4.2%, compared to $972 million for the three months ended September 30, 2024. The net increase was primarily driven by a $59 million increase in our non-same warehouse pool, partially offset by a $18 million decrease in our same warehouse pool, further discussed below. The foreign currency translation of revenues earned by our foreign operations had a $7 million favorable impact compared to the three months ended September 30, 2024.

Global warehousing segment cost of operations was $629 million for the three months ended September 30, 2025, an increase of $40 million, or 6.8%, compared to $589 million for the three months ended September 30, 2024. The net increase was primarily driven by a $45 million increase in costs of our non-same warehouse pool, partially offset by a $5 million decrease in costs of our same warehouse pool, further discussed below. The foreign currency translation of cost of operations from our foreign operations had a $5 million unfavorable impact compared to the three months ended September 30, 2024.

Global warehousing segment NOI was $384 million for the three months ended September 30, 2025, an increase of $1 million, or 0.3%, compared to $383 million for the three months ended September 30, 2024. The net increase included an increase of $14 million in our non-same warehouse pool, partially offset by a decrease of $13 million in our same warehouse pool. The foreign currency translation from our foreign operations had a $2 million net favorable impact compared to the three months ended September 30, 2024.

Same Warehouse Results

The following table presents revenues, cost of operations, same warehouse NOI, and margins for our same warehouses for the three months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

Same warehouse storage revenues decreased $4 million, or 0.8%, compared to the three months ended September 30, 2024, primarily driven by lower average occupancy, partially offset by an increase in average rates. Economic occupancy decreased by 80 basis points, as our customers rationalized inventory and production levels during continued economic pressures. Same warehouse storage revenues per economic occupied pallet increased 0.9% compared to three months ended September 30, 2024, primarily driven by favorable rates, as discussed above, and other changes in our business profile in response to changing customer needs.

Same warehouse services revenues decreased $14 million, or 3.2%, compared to the three months ended September 30, 2024, primarily due to lower throughput volumes, lower average rates, and other changes in our business profile in response to changing customer needs. Same warehouse services revenue per throughput pallet decreased 1.5% compared to the three months ended September 30, 2024. Throughput pallets at our same warehouses decreased 2.0% compared to the three months ended September 30, 2024, primarily driven by customer rationalization of inventory and production levels, as discussed above.

Same warehouse cost of operations decreased $5 million, or 0.9%, compared to the three months ended September 30, 2024, primarily driven by lower other warehouse costs resulting from decreases in occupancy and throughput volumes discussed above.

Non-Same Warehouse Results

The following table presents revenues, cost of operations, non-same warehouse NOI, and margins for our non-same warehouses for the three months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

Non-same warehouse revenues increased $59 million, or 95.2%, compared to the three months ended September 30, 2024, including approximately $56 million from acquisitions and $8 million from recently completed greenfield and expansion projects, partially offset by a $5 million net decrease from other non-same warehouse sites.

Non-same warehouse cost of operations increased $45 million, or 104.7%, compared to the three months ended September 30, 2024, including approximately $41 million from acquisitions, $3 million from recently completed greenfield and expansion projects, and $1 million from other non-same warehouse sites.

Global Integrated Solutions Segment

The following table presents the operating results of our global integrated solutions segment for the three months ended September 30, 2025 and 2024.

(in millions)

Global integrated solutions segment revenues were $364 million for the three months ended September 30, 2025, an increase of $1 million, or 0.3%, compared to $363 million for the three months ended September 30, 2024. The foreign currency translation of revenues earned by our foreign operations had a $5 million favorable impact compared to the three months ended September 30, 2024. Excluding the impact of foreign currency translation, a net decrease was primarily driven by the divestiture of the Spain Transportation business which occurred in August 2025, partially offset by higher foodservice, rail, and direct-to-consumer volumes.

Global integrated solutions segment cost of operations was $299 million for the three months ended September 30, 2025, a decrease of $8 million, or 2.6%, compared to $307 million for the three months ended September 30, 2024. The foreign currency translation of cost of operations from our foreign operations had a $5 million unfavorable impact compared to the three months ended September 30, 2024. Excluding the impact of foreign currency translation, the decrease was primarily driven by the above-mentioned divestiture of the Spain Transportation business and cost control measures.

Global integrated solutions segment NOI was $65 million for the three months ended September 30, 2025, an increase of $9 million, or 16.1%, compared to $56 million for the three months ended September 30, 2024. Foreign currency translation had a less than $1 million net favorable impact compared to the three months ended September 30, 2024.

Other Consolidated Operating Expenses

Depreciation and amortization expense. Depreciation and amortization expense was $230 million for the three months ended September 30, 2025, an increase of $20 million, or 9.5%, compared to $210 million for the three months ended September 30, 2024. The increase was primarily related to information technology investments, acquisitions, and greenfield and expansion projects.

General and administrative expense. General and administrative expenses were $145 million for the three months ended September 30, 2025, an increase of $2 million, or 1.4%, compared to $143 million for the three months ended September 30, 2024. For the three months ended September 30, 2025 and 2024, general and administrative expenses were 10.5% and 10.7% of total revenues, respectively.

Acquisition, transaction, and other expense. Acquisition, transaction, and other expenses were $12 million for the three months ended September 30, 2025, a decrease of $580 million compared to $592 million for the three months ended September 30, 2024. The decrease was primarily due to costs associated with our IPO, including internalization costs and stock-based compensation expense related to one-time awards associated with the IPO. For further detail on costs associated with our IPO and stock-based compensation, see Note 2, Capital structure and noncontrolling interests and Note 15, 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 net expenses of $23 million for the three months ended September 30, 2025, an increase of $15 million compared to net expenses of $8 million for the three months ended September 30, 2024. The increase was primarily due to a goodwill impairment during the three months ended September 30, 2025, partially offset by a net decrease related to decreased net gains associated with a fire which occurred in April 2024 at the Company’s warehouse in Kennewick, Washington, further discussed below.

During the three months ended September 30, 2025, we recorded a goodwill impairment of $28 million (see Note 6, Goodwill and other intangible assets, net in the condensed consolidated financial statements included in this Quarterly Report for details).

The three months ended September 30, 2025 included a net gain of $10 million resulting from insurance reimbursement related to the Kennewick, Washington fire. The three months ended September 30, 2024 included a net gain of $5 million related to the fire, consisting of an insurance reimbursement of $18 million, partially offset by $12 million of clean-up costs and a $1 million loss of carrying value of the impaired assets (see Note 17, 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 September 30, 2025 and 2024.

Interest expense, net. We reported net interest expense of $68 million for the three months ended September 30, 2025, a decrease of $14 million, or 17.1%, compared to $82 million for the three months ended September 30, 2024. The average effective interest rate of our outstanding debt was 4.3% for the three months ended September 30, 2025, a decrease from 5.8% for the three months ended September 30, 2024, due to lower average borrowings after substantial debt repayments with IPO proceeds during the three months ended September 30, 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 3.1% for the three months ended September 30, 2025, a decrease from 4.2% for the three months ended September 30, 2024. For additional information regarding our net interest expense, see Note 11, Interest expense in our condensed consolidated financial statements included in this Quarterly Report.

Gain (loss) on extinguishment of debt. We recognized a loss on debt extinguishment of $3 million during the three months ended September 30, 2025, as a result of repaying debt related to the Spain Transportation business. We recognized a loss on debt extinguishment of $6 million for the three months ended September 30, 2024, related to unamortized deferred financing costs previously capitalized for the Delayed Draw Term Loan (DDTL), which was repaid on July 26, 2024. For additional information regarding our debt, see Note 9, 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 loss of $6 million for the three months ended September 30, 2025, compared to a net gain of $14 million for the three months ended September 30, 2024. The increase in foreign currency exchange loss was due to movements in foreign currency exchange rates against the U.S. dollar, primarily driven by the euro.

Equity income (loss), net of tax. We reported $2 million of net loss from equity method investments for the three months ended September 30, 2025, compared to a net loss of less than $1 million for the three months ended September 30, 2024, primarily related to our investment in Emergent Cold LatAm Holdings, LLC.

Other nonoperating income (expense), net. We reported $57 million of other nonoperating expense for the three months ended September 30, 2025, compared to income of $1 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, we recognized a loss of $60 million on the sale of Spain Transportation, a European subsidiary. For additional information regarding the divestiture, see Note 4, Business combinations, asset acquisitions, and divestitures in the condensed consolidated financial statements included in this Quarterly Report.

Income Tax Expense (Benefit)

Income tax expense for the three months ended September 30, 2025 was $11 million, which represented an increase of $56 million from an income tax benefit of $45 million for the three months ended September 30, 2024. The tax expense in 2025 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, nondeductible expenses including stock-based compensation and interest expense, and financial statement losses for which no tax benefit was recognized. The tax benefit in 2024 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and changes to valuation allowances recorded in the period. Our income taxes are discussed in more detail in Note 8, Income taxes to the condensed consolidated financial statements included in this Quarterly Report.

The Organization for Economic Co-operation and Development (“OECD”) has issued Pillar Two Model Rules (“Pillar Two”) introducing a new global minimum tax of 15% effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting legislation. In 2025, we expect to incur insignificant tax expenses in connection with Pillar Two and are continuing to evaluate the potential impact on our business in future periods.

Comparison of Results for the Nine Months Ended September 30, 2025 and 2024

Global Warehousing Segment

The following table presents the operating results of our global warehousing segment for the nine months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

Global warehousing segment revenues were $2,927 million for the nine months ended September 30, 2025, an increase of $20 million, or 0.7%, compared to $2,907 million for the nine months ended September 30, 2024. The net increase was primarily driven by a $100 million net increase in our non-same warehouse pool, partially offset by a $80 million decrease in our same warehouse pool, further discussed below. The foreign currency translation of revenues earned by our foreign operations had a $2 million favorable impact compared to the nine months ended September 30, 2024.

Global warehousing segment cost of operations was $1,816 million for the nine months ended September 30, 2025, an increase of $61 million, or 3.5%, compared to $1,755 million for the nine months ended September 30, 2024. A $78 million net increase in our non-same warehouse pool, was partially offset by a $17 million decrease in our same warehouse pool, further discussed below. The foreign currency translation of cost of operations from our foreign operations had a $1 million unfavorable impact compared to the nine months ended September 30, 2024.

Global warehousing segment NOI was $1,111 million for the nine months ended September 30, 2025, a decrease of $41 million, or 3.6%, compared to $1,152 million for the nine months ended September 30, 2024. The net decrease included a decrease of $63 million in our same warehouse pool, partially offset by a net increase of $22 million in our non-same warehouse pool. The foreign currency translation from our foreign operations had a $1 million net favorable impact compared to the nine months ended September 30, 2024.

Same Warehouse Results

The following table presents revenues, cost of operations, same warehouse NOI, and margins for our same warehouses for the nine months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

62

Same warehouse storage revenues decreased $45 million, or 3.2%, compared to the nine months ended September 30, 2024, primarily driven by lower average occupancy and lower average rates, as rate increases were more than offset by changes in customer mix. 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 0.7% compared to the prior year period, 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 $35 million, or 2.7%, compared to the nine months ended September 30, 2024, primarily driven by lower throughput volumes, lower rates, and other changes in our business profile in response to changing customer needs. Same warehouse services revenue per throughput pallet decreased 0.9% compared to the prior year period. Throughput pallets at our same warehouses decreased 2.0% compared to the nine months ended September 30, 2024, primarily driven by customer rationalization of inventory and production levels as discussed above.

Same warehouse cost of operations decreased $17 million, or 1.0%, compared to the nine months ended September 30, 2024, primarily driven by lower labor and other warehouse costs resulting from decreases in occupancy and throughput volumes discussed above.

Non-Same Warehouse Results

The following table presents revenues, cost of operations, non-same warehouse NOI, and margins for our non-same warehouses for the nine months ended September 30, 2025 and 2024.

(in millions except revenue per pallet)

Non-same warehouse revenues increased $100 million, or 51.8%, compared to the nine months ended September 30, 2024, including approximately $113 million from acquisitions and $18 million from recently completed greenfield and expansion projects, partially offset by a $32 million net decrease from other non-same warehouse sites.

Non-same warehouse cost of operations increased $78 million, or 60.5%, compared to the nine months ended September 30, 2024, including approximately $80 million from acquisitions and $7 million from recently completed greenfield and expansion projects, partially offset by a $10 million net decrease from other non-same warehouse sites.

Global Integrated Solutions Segment

The following table presents the operating results of our global integrated solutions segment for the nine months ended September 30, 2025 and 2024.

(in millions)

Global integrated solutions segment revenues were $1,092 million for the nine months ended September 30, 2025, a decrease of $2 million, or 0.2%, compared to $1,094 million for the nine months ended September 30, 2024. The decrease was primarily due to lower transportation volumes and the divestiture of the Spain Transportation business which occurred in August 2025, partially offset by higher foodservice, direct-to-consumer, and rail volumes. In addition, the foreign currency translation of revenues earned by our foreign operations had a $8 million favorable impact compared to the nine months ended September 30, 2024.

Global integrated solutions segment cost of operations was $902 million for the nine months ended September 30, 2025, a decrease of $14 million, or 1.5%, compared to $916 million for the nine months ended September 30, 2024. The decrease was primarily due to lower transportation volumes, the above-mentioned sale of the Spain Transportation business, and cost control measures. The foreign currency translation of cost of operations from our foreign operations had an $8 million unfavorable impact compared to the nine months ended September 30, 2024.

Global integrated solutions segment NOI was $190 million for the nine months ended September 30, 2025, an increase of $12 million, or 6.7%, compared to $178 million for the nine months ended September 30, 2024. Foreign currency translation had a net favorable impact of less than $1 million compared to nine months ended September 30, 2024.

Other Consolidated Operating Expenses

Depreciation and amortization expense. Depreciation and amortization expense was $666 million for the nine months ended September 30, 2025, an increase of $26 million, or 4.1%, compared to $640 million for the nine months ended September 30, 2024. The increase was primarily related to acquisitions and greenfield and expansion projects.

General and administrative expense. General and administrative expenses were $442 million for the nine months ended September 30, 2025, an increase of $48 million, or 12.2%, compared to $394 million for the nine months ended September 30, 2024. The increase was primarily due to $51 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 nine months ended September 30,

2025 and 2024, general and administrative expenses were 11.0% and 9.8% of total revenues, respectively, with the increase primarily driven by the stock-based compensation expense mentioned above.

Acquisition, transaction, and other expense. Acquisition, transaction, and other expenses were $64 million for the nine months ended September 30, 2025, a decrease of $548 million compared to $612 million for the nine months ended September 30, 2024. The decrease was primarily due to costs associated with our IPO, including internalization costs and stock-based compensation expense related to one-time awards associated with the IPO, partially offset by fair value adjustments related to put options issued in connection with the IPO which were recognized during the nine months ended September 30, 2025. For further detail on costs associated with our IPO and stock-based compensation, see Note 2, Capital structure and noncontrolling interests and Note 15, 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 net expenses of $5 million for the nine months ended September 30, 2025, a decrease of $18 million compared to net expenses of $23 million for the nine months ended September 30, 2024. The decrease primarily related to decreased net gains associated with a fire that occurred in April 2024 at the Company’s warehouse in Kennewick, Washington, partially offset by a goodwill impairment during the nine months ended September 30, 2025, further discussed below.

The nine months ended September 30, 2025 included a net gain of $47 million related to the Kennewick, Washington fire, primarily from $48 million of insurance reimbursement. The nine months ended September 30, 2024 included a net gain of $4 million related to the fire, consisting of an insurance reimbursement of $50 million, partially offset by $25 million loss of carrying value of the impaired assets and $21 million of clean-up costs (see Note 17, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).

During the nine months ended September 30, 2025, we recorded a goodwill impairment of $28 million (see Note 6, Goodwill and other intangible assets, net in the 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 nine months ended September 30, 2025 and 2024.

Interest (expense), net. We reported net interest expense of $195 million for the nine months ended September 30, 2025, a decrease of $174 million, or 47.2%, compared to $369 million for the nine months ended September 30, 2024. The average effective interest rate of our outstanding debt was 4.3% for the nine months ended September 30, 2025, a decrease from 6.4% for the nine months ended September 30, 2024, due to lower average borrowings after substantial debt repayments with IPO proceeds during the nine months ended September 30, 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 3.0% for the nine months ended September 30, 2025, a decrease from 5.1% for the nine months ended September 30, 2024. For additional information regarding our net interest expense, see Note 11, Interest expense in our condensed consolidated financial statements included in this Quarterly Report.

Gain (loss) on extinguishment of debt. We recognized a loss on debt extinguishment of $3 million during the nine months ended September 30, 2025, as a result of repaying debt relating to the Spain Transportation business. We recognized a loss on debt extinguishment of $13 million for the nine months ended September 30, 2024, as the result of various debt refinancing agreements. For additional information regarding our debt, see Note 9, 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 $36 million for the nine months ended September 30, 2025 compared to a net gain of $5 million for the nine months ended September 30, 2024. The increase in foreign currency exchange gain was due to changes in 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 $3 million for both the nine months ended September 30, 2025 and 2024. The net loss in both periods was primarily related to our investment in Emergent Cold LatAm Holdings, LLC.

Other nonoperating income (expense), net. We reported $56 million of other nonoperating loss for the nine months ended September 30, 2025, compared to net income of $1 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we recognized a loss of $60 million on the sale of Spain Transportation, a European subsidiary. For additional information regarding the divestiture, see Note 4, Business combinations, asset acquisitions, and divestitures in our the condensed consolidated financial statements included in this Quarterly Report.

Income Tax Expense (Benefit)

Income tax expense for the nine months ended September 30, 2025 was $12 million, an increase of $60 million from an income tax benefit of $48 million for the nine months ended September 30, 2024. The tax expense in 2025 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, nondeductible expenses including stock-based compensation and interest expense, and financial statement losses for which no tax benefit was recognized. The tax benefit in 2024 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and changes to valuation allowances recorded in the period. Our income taxes are discussed in more detail in Note 8, 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 and related employer-paid payroll taxes from grants under our equity incentive plans, 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 and nine months ended September 30, 2025 and 2024.

(in millions)

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 and related employer-paid payroll taxes from grants under our equity incentive plans, loss or gain on debt extinguishment and modification, non-real estate impairments, 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 and nine months ended September 30, 2025 and 2024.

(in millions)

69

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 and related employer-paid payroll taxes 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 and nine months ended September 30, 2025 and 2024.

(in millions)

71

Liquidity and Capital Resources

As of September 30, 2025, we had $74 million of cash and cash equivalents and $1.2 billion available under our Revolving Credit Facility (net of outstanding standby letters of credit in the amount of $65 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 September 30, 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 9, 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.

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.

Since the IPO, the board of directors of the Company has declared a regular quarterly cash dividend, which was prorated for the inaugural period of the third quarter of 2024 at $0.38 per share of common stock. The dividend declared every quarter since then has been $0.5275 per share of common stock. Each dividend is payable to shareholders of record as of the last day of the respective quarter and is paid in the subsequent month.

Outstanding Indebtedness

The following table summarizes our outstanding indebtedness as of September 30, 2025 (in millions):

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 September 30, 2025, our debt had a weighted average term to maturity of approximately 3.2 years, assuming exercise of extension options.

For further information regarding outstanding indebtedness, please see Note 9, Debt in the condensed consolidated financial statements included in this Quarterly Report.

Offering of 5.25% Notes

On June 17, 2025, Lineage OP, LP (the “operating partnership” or “OP”) issued $500 million aggregate principal amount of 5.25% senior notes due July 15, 2030 (the “5.25% Notes”). The 5.25% Notes are fully and unconditionally guaranteed by Lineage, Inc., Lineage Logistics Holdings, LLC, and certain other subsidiaries of the Company that guarantee or are otherwise obligated in respect of the Credit Agreement (other than the Operating Partnership and any excluded subsidiaries, collectively, the “Guarantors,” as detailed in Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on June 17, 2025). The Company’s other subsidiaries do not guarantee the 5.25% Notes (collectively, “Non-Guarantor Subsidiaries”). Interest on the notes will be paid semi-annually on January 15 and July 15 of each year, commencing January 15, 2026. The 5.25% Notes were issued at 98.991% of par.

The 5.25% Notes are the Operating Partnership’s senior unsecured obligations and rank equally in right of payment with all of its other existing and future senior unsecured indebtedness. The guarantees are direct, senior unsecured obligations of each of the Guarantors and rank equally in right of payment with all senior unsecured indebtedness and guarantees of such Guarantors. The 5.25% Notes and each guarantee of the 5.25% Notes is effectively subordinated in right of payment to: all existing and future secured indebtedness and secured guarantees of the OP or such Guarantor (to the extent of the value of the collateral securing such indebtedness and guarantees); all existing and future indebtedness and other liabilities, whether secured or unsecured, of the Non-Guarantor Subsidiaries and of any entity the OP or such Guarantor accounts for using the equity method of accounting; and all existing and future preferred equity not owned by the OP or such Guarantor in Non-Guarantor Subsidiaries and in any entity the OP or such Guarantor accounts for using the equity method of accounting.

The Operating Partnership may redeem the 5.25% Notes in whole or in part, at any time and from time to time, prior to June 15, 2030, at the Operating Partnership’s option and sole discretion, at a redemption price equal to the greater of: (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon (as calculated pursuant to the terms of the indenture governing the 5.25% Notes); and (ii) 100% of the principal amount of the notes being redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. On or after June 15, 2030, the Operating Partnership may redeem the 5.25% Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the 5.25% Notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.

The net proceeds from the 5.25% Notes issuance were approximately $490 million and were used to repay a portion of the outstanding balance on the Revolving Credit Facility.

Senior Unsecured Notes Series

Refer to Note 9, Debt in our condensed consolidated financial statements included in this Quarterly Report for details of outstanding Senior Unsecured Notes Series.

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 $5 million and $3 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025 and December 31, 2024, we maintained allowances for uncollectible balances of $11 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 and nine months ended September 30, 2025 and 2024.

(in millions)

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, included primarily in Cost of operations on the condensed consolidated statements of operations and comprehensive income (loss). 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 and nine months ended September 30, 2025 and 2024.

(in millions)

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 and nine months ended September 30, 2025 and 2024.

(in millions)

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 and nine months ended September 30, 2025 and 2024.

(in millions)

We completed five acquisitions during the nine months ended September 30, 2025, none of which were during the three months ended September 30, 2025. We completed one and three acquisitions during the three and nine months ended September 30, 2024, respectively. Refer to Note 4, Business combinations, asset acquisitions, and divestitures in our condensed consolidated financial statements included in this Quarterly Report for more information regarding current period business combinations and asset acquisitions.

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 both the nine months ended September 30, 2025 and September 30, 2024, as well as the construction of a new, fully automated cold storage warehouse in Hazleton, PA during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we have also began construction on a new greenfield in Dallas, TX under our arrangement with Tyson Foods (see Note 4, Business combinations, asset acquisitions, and divestitures for discussion of the Tyson Foods agreements).

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)

76

Operating Activities

For the nine months ended September 30, 2025, our net cash provided by operating activities was $627 million, compared to $446 million for the nine months ended September 30, 2024. The increase was primarily due to a decrease in net loss, most notably from lower interest expense, and non-cash items. The notable non-cash items for the nine months ended September 30, 2025 primarily consisted of $107 million of stock-based compensation, $58 million of net loss on divestitures, $51 million gain on insurance recoveries, and $30 million in Put Options fair value adjustments. The notable non-cash items for the nine months ended September 30, 2024 primarily consisted of IPO-related items, such as $200 million of Internalization expense to Bay Grove, and $185 million of expense for vesting of Class D interests in LLH, as well as $171 million of stock-based compensation.

Investing Activities

For the nine months ended September 30, 2025, cash used in investing activities was $899 million. The most significant uses were $441 million in acquisitions, net of cash acquired, and $509 million in purchases of property, plant, and equipment, primarily for growth capital expenditures. In addition, we invested $9 million in our equity method investee Emergent Cold LatAm Holdings, LLC. This was partially offset by $49 million of insurance proceeds, which were primarily related to a fire which occurred at the Company’s warehouse in Kennewick, Washington in 2024 (see Note 17, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).

For the nine months ended September 30, 2024, cash used in investing activities was $536 million. This most significant uses were $486 million in purchases of property, plant, and equipment, primarily for growth capital expenditures. In addition, we invested $113 million in the acquisitions of Entrepôt du Nord Inc, Luik Natie Holding N.V., and Eurofrigor S.r.l. Magazzini Generali and $13 million in Emergent Cold LatAm Holdings, LLC, offset by $50 million in insurance recovery proceeds for the warehouse fire in Kennewick.

Financing Activities

Our net cash provided by financing activities was $172 million for the nine months ended September 30, 2025, which primarily consisted of $495 million of proceeds from issuance of bonds and $404 million of net borrowings on revolving credit lines. These inflows were offset by $402 million of dividends and other distributions, $190 million of repayments of long-term debt and finance leases, $88 million of which was related to the Houston, Texas lease purchase, $78 million for payment of the exercise of a Put Option and $28 million of redemption of redeemable noncontrolling interest.

Our net cash provided by financing activities was $428 million for the nine months ended September 30, 2024, which reflected the impacts of the change in our debt and capital structure as a result of our 2024 IPO. The financing activities primarily consisted of $4,879 million of proceeds from the issuance of common stock in our IPO (net of equity raise costs) and $540 million of net borrowings on revolving credit lines. The inflows were offset by $4,606 million net for repayments of long-term debt and finance leases (see Note 9, Debt for details of debt instruments paid off in 2024), $138 million for distributions, $75 million for redemption of OPEUs, $46 million for payment of deferred consideration liabilities, $46 million for the repurchase of common shares for employee income taxes on stock-based compensation, $45 million for financing fees, and $25 million for redemption of common stock.

Supplemental Guarantor Financial Information

On June 17, 2025, the OP issued $500 million aggregate principal amount of the 5.25% Notes. The 5.25% Notes are fully and unconditionally guaranteed by Lineage, Inc., Lineage Logistics Holdings, LLC, and certain other subsidiaries of the Company that guarantee or are otherwise obligated in respect of the Credit Agreement (other than the Operating Partnership and any excluded subsidiaries, collectively, the “Guarantors,” as detailed in Exhibit 4.2 to this Form 10-Q). The Company’s other subsidiaries do not guarantee the 5.25% Notes (collectively, “Non-Guarantor Subsidiaries”). Refer to Note 9, Debt in our condensed consolidated financial statements included in this Quarterly Report for additional information regarding the 5.25% Notes.

The following tables present summarized financial information for the Guarantors and the OP on a combined basis, after the elimination of (a) intercompany transactions and balances between all the Guarantors entities and the OP and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.

The 5.25% Notes and each guarantee of the 5.25% Notes is effectively subordinated in right of payment to: all existing and future secured indebtedness and secured guarantees of the OP or such Guarantor (to the extent of the value of the collateral securing such indebtedness and guarantees); all existing and future indebtedness and other liabilities, whether secured or unsecured, of the Non-Guarantor Subsidiaries and of any entity the OP or such Guarantor accounts for using the equity method of accounting; and all existing and future preferred equity not owned by the OP or such Guarantor in Non-Guarantor Subsidiaries and in any entity the OP or such Guarantor accounts for using the equity method of accounting.

As of September 30, 2025, entities that are direct borrowers, guarantors, or otherwise obligated in respect the Credit Agreement had an aggregate of $19,577 million of assets and were direct borrowers, guarantors or otherwise obligated in respect of an aggregate of $5,469 million of indebtedness, in each case, excluding intercompany investments and obligations. As of September 30, 2025, the OP and the Guarantors had an aggregate of $18,923 million of assets and were direct borrowers in respect of $5,316 million of indebtedness, in each case, excluding intercompany investments and obligations.

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, except for the below update.

Goodwill Impairment

Goodwill is tested for impairment by assessing qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Qualitative factors assessed include reporting units’ financial performance as compared to budget, macroeconomic conditions, labor and energy cost trends, growth in pricing of our capital raises, and other events and trends impacting fair values of our reporting units. If, after assessing the totality of events or circumstances, or based on management’s judgment, we determine it is more likely than not the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed.

We assess goodwill for impairment at our annual impairment testing date of October 1 and whenever events or circumstances indicate that it is more-likely-than-not that a reporting unit’s fair value is below its carrying value. Due to the sale of Lineage Spain Transportation S.L.U. during the three months ended September 30, 2025, we determined that the impacted reporting unit more likely than not had a fair value below its carrying value. As such, we performed a quantitative assessment on this reporting unit, estimating its fair value as described below. Carrying value of this reporting unit included assets and liabilities attributable to its business operations and allocated goodwill as of the interim testing date. Based on the results of the quantitative assessment, we recorded a $28 million goodwill impairment for the three months ended September 30, 2025.

Fair value of the reporting unit was estimated using a combination of equally weighted income approach and market approach. There was not a material difference in values estimated under each method, and as such, the weightings were not a significant estimate. We utilized third-party valuation specialists and used industry accepted valuation models in calculating the reporting unit’s fair value estimate.

The income approach is based on discounted future cash flows and requires key assumptions, including the following:

• Future revenue growth: our analysis utilized an assumption of future growth based on industry forecasts, historical results, and existing long-term contracts. The long-term revenue growth assumption used in our model was 3.0%.
• Operating costs and profitability: our analysis utilized an assumption of future operating costs based on industry forecasts, historical results, operational focus of management, and market energy cost projections, assuming a slow, steady increase in our EBITDA margin.
• Capital requirements: we estimated future capital requirements based on current planned expansions, appropriation requests, and projected growth of existing operations included in the estimate of future revenue growth.
• Discount rates: we utilized a WACC that considers the cost of capital and cost of debt, with inputs such as risk premiums, relevant comparable public companies’ debt and capital metrics, tax rates, risk-free interest rates, and other assumptions. Our selected WACC rate was 10.5%.

The market approach is based on market EBITDA multiples and requires judgment in selection of comparable companies and appropriate multiples. If the market conditions improve or deteriorate, we overachieve or don’t achieve the projected revenue growth or operational efficiencies, our capital spend changes significantly from the estimated figures, or other notable changes in our business occur, it could result in a lower or higher estimated goodwill impairment in this reporting unit.

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.

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 September 30, 2025, we had $3,199 million of variable-rate debt under our revolver and term loan agreements, primarily bearing interest at Adjusted Term SOFR of 4.3%, plus a margin of 92.5 basis points (refer to Note 9, Debt to our condensed consolidated financial statements for details of the entire balance by currency and rate). 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 September 30, 2025 primarily consists of our $780 million of unhedged variable rate debt. As of September 30, 2025, 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 $8 million on an annualized basis. A 100 basis point decrease in market interest rates would result in a decrease in interest of approximately $8 million on an annualized basis.

During the nine months ended September 30, 2025, we executed forward-starting hedges which will effectively lock in the floating rates on $1,250 million of our variable-rate debt upon the expiration of the above-described hedges. These hedges include swapping $750 million of borrowings under the Revolving Credit Facility to a weighted average fixed interest rate of 3.2% plus a margin of 92.5 basis points and swapping $500 million of borrowings under the Term Loan A to a weighted average fixed interest rate of 3.1% plus a margin of 92.5 basis points. All of these forward-starting hedges will expire in February 2028.

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 September 30, 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.

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 September 30, 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).

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.