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Greetings. Welcome to Americold Realty Trust Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the call over to Rich Leland, Vice President, Investor Relations. Thank you. You may begin.

Good morning, and thank you for joining us today for Americold Realty Trust's Fourth Quarter and Full Year 2025 Earnings Conference Call. In addition to the press release distributed this morning, we have filed a supplemental financial package with additional detail on our results. These materials are available on the Investor Relations section of our website at www.americold.com. This morning's conference call is hosted by Americold's Chief Executive Officer, Rob Chambers; along with Scott Henderson, our Chief Investment Officer and Interim Chief Financial Officer. Management will make some prepared comments, after which we will open up the call to your questions. Before we begin, let me remind you that management's remarks today may contain forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those anticipated. These forward-looking statements are based on current expectations, assumptions and beliefs as well as information available to us at this time and speak only as of the date they are made. Management undertakes no obligation to update publicly any of these statements in light of new information or future events. During this call, we will also discuss certain non-GAAP financial measures, including NOI, core EBITDA, net debt to pro forma core EBITDA and AFFO, among others. The full definitions of these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures are contained in the supplemental financial package available on the company's website. Please note that all warehouse financial results are in constant currency unless otherwise noted. Now I'll turn the call over to Rob for his prepared remarks.

Thank you, Rich, and thank you all for joining our fourth quarter 2025 earnings conference call. Today, I'd like to review our 2025 accomplishments, walk through our 2026 key priorities and review the components of our 2026 financial outlook. But before I begin, I'd like to take a brief moment to publicly welcome Chris Papa to the Americold executive leadership team. Chris will be joining us on Monday of next week as our new Chief Financial Officer. Chris is a seasoned and highly regarded real estate executive and previously served as Chief Financial Officer of CenterPoint Properties, a leading developer, owner and manager of industrial real estate. He also brings extensive public company experience, having served as the CFO for both Post Properties as well as Liberty Property Trust. Over the years, we have intentionally assembled a strong leadership team here at Americold with extensive operational expertise. And I'm excited to now supplement this with Chris' experience leading 2 investment-grade rated REITs and further strengthen our ability to execute on our strategic priorities. Chris is well known in the investment community, and he's looking forward to engaging with all of you throughout the coming year. Turning to our 2025 accomplishments. Despite the persistent industry headwinds we faced throughout the year, our teams continue to execute well. This includes not only delivering on our financial commitments for the quarter, but also making significant progress across many of our key business initiatives. Financially, we delivered fourth quarter AFFO of $0.38 per share, slightly ahead of expectations, which also puts us above the midpoint of our revised full year guide. The combination of sequential increase in occupancy, along with the benefits from our ongoing cost reductions and portfolio management initiatives allowed us to deliver a year-over-year quarterly increase in NOI, EBITDA and AFFO dollars for the first time since Q3 of 2024. Additionally, we are encouraged to see the year-over-year decline in economic occupancy improve progressively throughout the year. Scott will review the details of our results in a few minutes, but I'm very pleased with the improvements we've made in our internal forecasting process and how we closed out the year according to plan. Commercially, our teams continue to successfully navigate the current competitive pricing environment and deliver additional gains in both storage and handling rates for the quarter. During 2025, we achieved our goal of generating approximately 60% of our rent and storage revenues from fixed commitment contracts. As many of you remember, this was an initiative that we launched a few years ago when less than 40% of our revenues came from fixed commits. Even though customers may reevaluate their overall space requirements, they continue to appreciate the stability and predictability that a fixed commitment contract brings as it allows them to fully leverage the space and reduce their per pallet cost by turning inventory faster. Americold also benefits from stable cash flows given the vast majority of these contracts are for multiple years. We truly believe these agreements are a win-win for both parties and are evidence of our ability to lead the industry in commercial excellence. Operationally, we delivered services margins of nearly 14% in the fourth quarter, and our full year margin of 12.7% is up nearly 1,000 basis points over the past 2 years. We continue to reap the benefits of our labor initiatives. And today, we have one of the best trained, engaged and highly effective workforces in the industry. Their commitment to service excellence is evidenced by our low customer churn rate, which has remained stable in the low single digits as well as the numerous customer and industry recognitions that we have received throughout the year, including Johnsonville's 3PL Summit Warehouse of the Year for our Clearfield location, and the Cold Storage Facility of the Year Award from Refrigerated & Frozen Foods Magazine for our Russellville facility. Finally, during 2025, we also supported our customers with the delivery of 3 new expansion and development projects around the world. All of them are consistent with our strategy of focusing our investments on lower-risk developments like our Allentown expansion or creating new and innovative supply chain solutions like our Kansas City and Dubai facilities that were developed in conjunction with our strategic partners. Each of these projects was completed on time and on budget. I'm proud of these and all of our accomplishments in 2025 and the foundation they create heading into 2026. Turning to 2026. As we outlined on last quarter's call, there are a number of demand and supply headwinds that are continuing to impact our industry. While we believe most of them are transitory, we do expect them to create continued pressure on revenue throughout the year. This is particularly evident in the forward distribution node where the industry has seen the most speculative development over the past several years. However, we are not content with waiting on a broader market recovery. And shortly after I assume the CEO role, I began a process with our management team and Board of Directors to develop a list of 5 key priorities that would further diversify our customer base, position us to take advantage of new growth opportunities and ultimately deliver shareholder value. They set the direction for what we want to accomplish in 2026, and I'd like to review them with you now in greater detail. First, we're making meaningful progress on our initiative to delever our balance sheet. We are evaluating a variety of opportunities to achieve this goal, whether it is through a traditional REIT joint venture or selling certain nonstrategic assets. This is an important priority for the company as we are committed to maintaining our investment-grade profile. The investment-grade rating is a significant advantage in terms of both broad market access as well as cost of capital. We have seen strong interest in our assets from multiple potential investors at attractive valuations. Based on our progress so far, we believe that we'll be in a position to share additional details on this initiative with you during the first half of the year. Our second priority is to evaluate our global portfolio of diverse real estate assets to ensure that we're maximizing profitability and getting the best and highest use of our facilities. We initiated a robust portfolio management process of low-profit facilities in 2025 and already have a track record of successfully exiting properties and reallocating customer inventory, resulting in a favorable transaction for the company. Each property is evaluated for opportunities either within our existing sales pipeline or for potential triple net lease opportunities to new or existing tenants compared to taking the property dark or pursuing an outright sale of assets that are deemed nonstrategic. Triple net leases are an interesting opportunity as they have not traditionally been an area of focus for Americold. We believe in the current environment that this could be an attractive way to increase occupancy levels across our network with both food and nonfood customers. Our third priority is to drive organic growth by expanding our aperture and leveraging our value proposition into new and previously underpenetrated sectors. Last quarter, I spoke about the value of having a presence at all 4 nodes of the supply chain and Americold's leadership position in providing store support solutions to some of the world's largest grocery retailers and QSR brands. This store support service is operationally intensive. However, the fast-turning nature of the business means that we're able to generate a much higher level of NOI per pallet position than any other node. Despite our leadership position in this sector, we're still only scratching the surface as most of this business is in-sourced today. We do, however, have strong momentum behind this initiative. During 2025, we won a large fixed commitment contract in the Houston market with one of the world's largest retailers. And later in the year, we successfully expanded our retail presence into Europe for the first time with large supermarket operators in Portugal and the Netherlands. More recently, I'm especially excited about taking our capabilities into an entirely new sector with the late December announcement of our new win with On The Run. On The Run is a well-known and fast-growing gas and convenience store chain in Australia, and our proven model of supporting more than 1,500 QSR locations across 6 major brands in Asia Pac translates seamlessly to this new sector. Some of the services we will provide include tri-temperature warehousing, high throughput pick, integrated warehouse and transport solutions and multi-vendor consolidation. Since that initial announcement in December, we have expanded our relationship with On The Run even further to include new business wins in New South Wales and Queensland. And in total, we will be supporting nearly 600 of their locations across Australia. As I mentioned earlier, we are only scratching the surface of what I see as the long-term potential for Americold to leverage our capabilities in this area with new and existing customers and expand into new sectors and geographies. We have a strong reputation for mastering this complex work and continue to demonstrate our ability to close these deals based on our operational expertise and deep customer relationships. Additionally, our business development teams are out meeting with customers to identify new sales opportunities in adjacent sectors such as pet food, floral, e-commerce, pharmacy and more. We've rolled out a new program across our operations to incentivize lead generation and have already closed a couple of new deals in the floral sector. While they are admittedly small to start, we can already see that these types of products fit nicely into our well-established and proven Americold operating system. Most importantly, these wins are strong evidence of our team's ability to execute where we focus the organization's attention on delivering our key priorities. Beyond driving organic growth, our fourth priority is to take a very disciplined approach to evaluating inorganic growth opportunities. We will continue to focus only on lower-risk developments that are customer or strategic partner-driven, and we are purposely limiting our near-term development spend until our balance sheet leverage is reduced. Our 4 in-process developments in Port Saint John, Dallas-Fort Worth, Christchurch, New

Thanks, Rob, and good morning, everyone. Starting with our financial results. As Rob mentioned, we delivered fourth quarter AFFO per share of $0.38, which was slightly ahead of expectations. This was an increase versus the prior year, and we also saw a year-over-year increase in fourth quarter core EBITDA and total company NOI. For the full year, we delivered AFFO of $1.43 per share, which was also in line with expectations. Economic occupancy came in slightly better than expected in the fourth quarter, increasing 280 basis points sequentially, primarily due to the impact of the seasonal harvest, slightly better holiday volumes and portfolio management. Throughput decreased slightly sequentially as most inflows to build inventory occurred during the third quarter. As is typical, we have already started to see occupancy levels in January and February, consistent with normal seasonal trends. Both storage and services revenue per pallet were positive in the quarter, with services up 2.4% as we continue to protect margin on that piece of the business and ensure that we are fairly compensated for the value that we provide to customers. Storage revenue per pallet was also up for the quarter, but at a more modest 0.3% rate, reflecting the competitive market pressures that we have mentioned on previous calls. Turning to our fourth quarter capital markets activity. At the end of December, we entered into a new $250 million term loan with $150 million of the proceeds used to repay our U.S. revolver down to 0 and $100 million of the proceeds going to cash on hand. Subsequent to year-end, we then used $100 million of cash and $100 million of U.S. revolver borrowings to repay the $200 million Series A maturity on January 8. At this point, I'd like to add some detail to a couple of the key priorities for 2026 that Rob reviewed earlier. First is the strategic capital raise to delever the balance sheet. Our leverage at the end of the fourth quarter was 6.8x, and we are looking to reduce it meaningfully as part of this initiative. We are evaluating a variety of opportunities to achieve this goal, whether it is through a joint venture with an equity partner or selling certain nonstrategic assets. This would help solidify our balance sheet while providing a source of funding for future growth. Given the limited number of large transactions in our space, we anticipate that this will also provide investors with additional insight into the true asset value of our mission-critical infrastructure. As Rob mentioned, we have made meaningful progress in this area over the past several months and are seeing strong interest in our assets from multiple potential investors. We are also continuing to make great progress with our portfolio management initiative to maximize profitability, ensure the best and highest use of our expansive network of real estate assets. During 2025, we exited our joint venture in Brazil, and we strategically exited or idled a total of 10 sites in North America. In addition to generating cash proceeds for the company, we have also removed over 22 million cubic feet of capacity for more than 65,000 pallet positions. For 2026, we have already identified a total of 9 sites that are prime candidates and 2 of these were closed in the first quarter. As a reminder, the majority of inventory at these sites can be moved to nearby facilities, resulting in a benefit to our bottom line. This not only provides savings from a cost perspective, but it also allows us to reallocate capital to sites that are performing well. I'm proud of the results our team has already demonstrated in this area and look forward to what they will accomplish this year. Now I'd like to take a few moments to discuss the assumptions and details behind our 2026 outlook. While we are excited about the early momentum we are seeing behind all 5 of our key priorities, we do realize that the market environment remains challenging, and it will take time to fully realize the benefits from these initiatives. Importantly, our outlook does not assume an increase in consumer demand or incorporate any transactions that have not yet been announced. As Rob mentioned earlier, we are expecting full year 2026 AFFO between $1.20 and $1.30 per share. I would like to remind everyone that the second half of the year tends to experience higher volumes due to the impact of the agricultural harvest and a pickup in demand around the holiday season. As I mentioned earlier, we did see a slight seasonal lift in Q4 and have already seen the normal decline begin in Q1. As is typical, we are expecting first quarter AFFO to be the lowest quarter of the year with sequential increases as we progress throughout the year. Now I'll move on to the specific components of our full year outlook. During our last call, we indicated that we expected revenue per pallet in total to be down approximately 100 to 200 basis points and economic occupancy to be flat to down by as much as 300 basis points in 2026 as the current market conditions are causing customers to reevaluate their space commitments at contract renewal. The 2026 renewals so far have followed these high-level trends as we continue to thread the needle between price and occupancy for each customer and minimize the overall impact to revenue and profitability. As a result, we would expect to generate same-store revenue for the year of approximately $2.2 billion to $2.27 billion. For same-store NOI, we are expecting a range of between $735 million and $785 million for 2026. This reflects the continued pricing and occupancy pressure mentioned earlier, partially offset by our cost cutting and portfolio management initiatives. As I mentioned previously, 1 of our 5 key priorities for this year is to rightsize our cost structure. As part of this initiative, we've identified opportunities to streamline our operations and eliminate $30 million worth of indirect warehouse labor and SG&A costs. These actions started in Q4 and have been largely completed, helping to offset other inflationary pressures across the business. For total company NOI, we are expecting approximately $780 million to $845 million, which includes the impact of same-store warehouse discussed earlier in addition to our Transportation segment and non-same-store warehouses. For 2026, we expect core SG&A to be between $218 million and $228 million, which is a reduction of nearly $7 million at the midpoint. This reflects the targeted cost reductions we are making across the business, partially offset by labor inflation and other cost increases forecasted in 2026. Additionally, as Rob mentioned, we expect to reduce Project Orion related cash spend by $50 million. While this does not impact AFFO, it does free up important additional capital for other business needs. We are expecting core EBITDA of between $570 million and $620 million for the year, reflecting the NOI and SG&A outlooks that I have already discussed. For interest expense, we are forecasting between $170 million and $180 million for the full year. As a reminder, we have been capitalizing interest related to our ongoing development projects, which ends as projects are completed and come online. For maintenance CapEx, we are expecting to spend between $60 million and $70 million for the year, consistent with 2025 as volumes remain low and we continue with our portfolio management review process. You will note that we have streamlined our guidance parameters to align with industry standards and allow us to focus our messaging on key drivers of performance. We expect to retain the current high level of transparency into our initiatives and quarterly results. We believe that this will ultimately enhance confidence in our forecasting ability while ensuring continued transparency and accountability. Additionally, please note that our managed segment will be consolidated in our warehouse segment for 2026, which is reflected in our guidance. Now I'll turn the call back over to Rob for some closing remarks. Rob?

Thank you, Scott. As you heard on this morning's call, we are entering 2026 with a clear set of priorities to position Americold for future success. While we recognize that there are still challenges across the industry, we are actively generating new opportunities as well. Most importantly, we continue to service our customers with excellence, and our value proposition remains clear. Our diverse network of real estate contains many opportunities to generate revenue through multiple operating environments and our experienced management team is dedicated and focused on unlocking that value. We are one of the few cold storage owners and operators with a presence at every node of the supply chain. And when coupled with our deep customer relationships, strategic partnerships and operational excellence, this gives us a unique advantage. We are excited about the early progress we've made on our 2026 key priorities, but I realize it will take time to reap the full benefits. I believe that we have the right strategy and the right team to drive continued momentum in these initiatives, and I look forward to reporting on our progress as we proceed throughout the year. With that, I'll turn the call over to the operator for questions. Operator?

[Operator Instructions] Our first question is from Samir Khanal with Bank of America.

So Rob, maybe to set the tone here kind of high level, let's talk about the customer and kind of the demand side, right? I mean you talked a little bit about customer contracts that are coming up for renewal. So maybe high level, talk about kind of what you're hearing from the customer.

Thanks, Samir. Yes. I mean, obviously, tons of conversations over the last few months with a majority of our customers. And I think pretty consistently, we're hearing both in those discussions and in terms of what we see in their earnings releases that their net sales growth is relatively flattish, and that's the projection for most of 2026. Those flattish numbers are really a result of their price being up low to mid-single digits and then their volume being down low to mid-single digits. I think most, as they look out throughout the course of the year are not necessarily predicting large inflections in consumer demand. And so that's really what we've incorporated into our guidance for the year. That said, everybody knows it would be really tough for, I think -- for consumers to really stomach a lot of material price increases from here. So they're definitely focused on ways to try to grow volume. There is a lot of talk about the investments that they're going to make in their brands and the promotional dollars that have been set aside for 2026 to really try to drive some volumes on their core SKUs. But I think probably the green shoots or the encouraging dialogue that we have with customers now are about the fact that they recognize the need to drive volume. And so they are looking at more innovation in 2026, how they really try to have some successful new product launches in 2026. And those are things that would drive safety stock. And -- all that said, while there's good dialogue about what the year could look like, we're not going to sit back and wait for that traditional business to inflect. Like we said in our prepared remarks, the BD team is out looking at new commodities, looking at new sectors that we can lean into. And probably the best example of that was the On The Run deal that we won late in the year, which is in a brand-new sector, which is the convenience store distribution. So when you think about all the things that we're doing kind of in an idiosyncratic manner and the fact that we have our real estate team out looking at opportunities as well, I think we've got a great chance to deliver on the expectations that we put forward for the year.

Our next question is from Michael Griffin with Evercore ISI.

On the occupancy assumptions for '26, Scott, I noted in your prepared remarks, you said you expect economic occupancy to be flat to down 300 basis points. I think last quarter, the expectation was down 200 to 300 basis points, at least just looking at the transcript last quarter. So did anything change kind of quarter-over-quarter there, maybe shedding some of these underperforming assets could help boost economic occupancy. Just want to make sure I've got things lined up from an apples-to-apples perspective as it relates to economic occupancy expectations.

Sure. So I'll take that one. I mean I think you're right. I mean, so last time we talked a little bit about 200 to 300. And again, at that point, we wanted to provide some parameters. It wasn't necessarily formal guidance, but we were encouraged by what we saw in the fourth quarter, the sequential occupancy growth of 280 basis points was certainly higher than what we had originally planned. I think it's a combination of a number of things. Some of it is the portfolio management activities that we are actively in the process of executing. That helps. It's the new business sales pipeline that we talked about last year. We said a lot of that volume would be delayed a bit, and we are encouraged by the way that came in at the end of the year. And then really the dialogue around where these contract renewals are coming in. It's based on what we've seen thus far over the last 3 or 4 months. We certainly attack those renewals far ahead of when their actual expiries are. And based on what we see now, it's a little more favorable than what we talked about last quarter.

Griff, it's Scott. Just to follow up, too, as a reminder, on Page 29 of our IR supplement, you'll see the new same-store pool that gets recast to the prior year of 2025 on a quarterly basis. So when you're building your model, just a reminder that Page 29 is the new same-store pool.

And just to clarify, are the asset sales or deleveraging expected in your '26 AFFO guidance?

They are not. No anything that hasn't been announced is not included.

Our next question is from Michael Goldsmith with UBS.

As part of your portfolio review, can you talk about your international presence? How important is the Europe and Asia geographies as part of your core business? How much synergy is there with the core U.S.? How easy would it be separate? And just what's the appetite right now to maybe streamline the geographies?

Sure. Look, yes, I mean, our international assets are both in Europe, Asia Pacific, our joint venture in the Middle East are all assets that we would say are performing well and in line with our expectations. We are doing a very thorough review of our entire portfolio, as we described previously to make sure that we feel like all of our focus and intention are on the markets and submarkets that we feel like we can win in longer term. And so we're doing an evaluation across the board of what the right portfolio is going to look like going forward. We can't get into any more specifics than that at this period of time. But as we mentioned on the -- in our prepared remarks, we're very focused on how we ensure that we can strengthen our foundation, delever our balance sheet and put ourselves in a position to grow long term. And we feel like we'll be in a position to give more details around that here in the first half of the year.

Our next question is from Craig Mailman with Citigroup.

It's Nick Joseph here with Craig. Just on the deleveraging initiative, what percentage of assets are either noncore? And what's the size of the potential JV pool that you'd be looking to do?

Yes. So I think from our perspective, the way to really think about it is we want to put ourselves in a position where we get to a leverage level that will allow us to continue to be -- have an investment-grade rated balance sheet. That is key. And so when we think about what that means, it's leverage coming down materially to 6 or below. So you can kind of do the math on what would be required to get us all the way there, but that is the focus is how do we make sure that we have a transaction that's sizable enough to meaningfully delever and maintain investment grade.

Our next question is from Greg McGinniss with Scotiabank.

I just wanted to talk about kind of expected retention on the fixed contracts expirations, 30% of the total pool of fixed contracts that's expiring. And then are these customers kind of fully stepping back from fixed contracts? Are they just paring back their requirements? Are they pushing on pricing? Any additional color would be appreciated.

Thanks for the question, Greg. Yes. So -- we've been in a tough demand environment for a while. And I got to tell you, we're very proud of the team for the way that we've kind of led the industry here in terms of fixed commitment contracts. We talked about the growth that we've seen in that over the last several quarters despite the challenging environment. We know 2026 is an outsized year for renewals. But the first point that I would make is, as I said in my prepared remarks, customers see the value of having space committed. This is mission-critical infrastructure for our customers' supply chain. So the concerns really are not around the customers not see the value from fixed commitments and are they stepping away from those entirely. That is not at all what we're seeing. We're seeing a very high retention rate of our customers who sign up for these types of agreements. And instead, what we're seeing is more of a tightening up of the gap between physical and economic occupancy. So if a customer sign up for 20,000 pallets and they're using 12,000 instead of renewing at 20,000, they might renew at 17,000 or 15,000. That's more of what we're seeing. And so we've chopped a lot of wood. We get after these very early in terms of how the discussions in terms of how these are going to renew. And so we've incorporated the expectations for what we think will happen with these contracts into our guide of flat to down 300% or flat to down 300 basis points on economic occupancy. That's our expectation, and that is informed by what we've seen thus far in the contract renewals.

Our next question is from Todd Thomas with KeyBanc Capital Markets.

I wanted to follow up on the potential transaction or possible joint venture that you're discussing. I understand one of the primary objectives is to reduce leverage, and you also mentioned that no unannounced transaction activity is assumed in guidance. But I'm just curious how we should think about the potential earnings dilution that you might be willing to tolerate? And maybe you could just talk a little bit about that in terms of potential pricing or whether you expect to be able to transact in a non-dilutive manner, how we should start thinking about that?

Todd, it's Scott. Thanks for the question. I think at this point, we're not prepared to provide that level of detail around a potential transaction. But as was said in the prepared remarks, we will likely have more detail to come in the -- around midyear.

We're encouraged by early conversations in terms of certainly the interest and the potential valuations. And while any time you do a transaction like that, it will certainly impact kind of what our expectations are for the year. I think in the long term, it absolutely is the right path forward for us.

Okay. Maybe just following up on that. Are you expecting this to be sort of a single transaction or sort of a series of transactions throughout the first half or throughout the year?

Todd, it's Scott. At this point, we're evaluating a handful of different things, and I think it'd be better for us to comment on that around the announcement.

Our next question is from Blaine Heck with Wells Fargo.

Can you just give us your thoughts on the current supply picture and excess capacity throughout the cold storage market in the U.S., Europe and Asia and maybe in your target markets specifically?

Sure. Thanks. Certainly, where we've seen the excess supply has been largely in the U.S. So the same supply dynamics really have not been experienced in our European business or in the Asia Pac business. It's heavily concentrated in the U.S. And then further, as we've said, if we were to look kind of by the nodes, which I think is a great way to look at the business, you would see most of the incremental supply has been in the 4 distribution locations followed relatively closely by the port locations. I think we remain consistent in the view that over the last few years, it's in excess of 15% of incremental capacity that's been added, mainly by a lot of new market entrants whose business model is to get a little bit of scale and then try to transact. And I think that business model is really not one that has come to fruition like a lot of those folks would have liked. We know from discussions that many of those new facilities with new market entrants are not performing to their original underwriting in large part because of occupancy that's just not there for them. We, in fact, continue to see customers who have not necessarily liked the experience with some of these small new market providers coming back to Americold, which is a great sign. So I do think we are past the peak deliveries of what we've seen these last few years in terms of new capacity. Announcements have slowed down materially. There are a few new deliveries still happening this year on previously announced projects, but we're encouraged to see new announcements slow. I think a lot of folks have probably learned a lesson about what it takes to be successful in this business and why Americold is an industry leader.

And just to clarify, is that 15% of excess capacity based on square footage or cubic feet?

We would actually view it more on pallet positions.

Our next question is from Michael Carroll with RBC Capital Markets.

Scott, I wanted to circle back on your comments in the prepared remarks about COLD consolidating its business and mothballing some of the underperforming warehouses. Can you give us an idea of how many warehouses were mothballed in 2025 and what could happen in 2026? And related to that, is that the reason why the new same-store pool is dropping to 215 warehouses from the current pool of 219 warehouses?

Sure. Thanks, Mike. To answer your question around 2025, we either exit or idled approximately 10 assets in 2025. As we look to 2026, we -- as I said on the call, we had 9 identified, 2 we've already taken action around in the first quarter. And so if you want to bridge to Page 29, which is the new same-store of 215, the old same-store was 219. So the bridge there is -- let me get that exact math for you, Mike, is we're taking out 7 assets, which I just mentioned that we're taking action on in 2026. And then you add in the 3 managed assets, so that lands you at 215. So 219, minus 7, plus 3 gets you to 215. And a quick call out on the managed. The managed revenue actually will show up in the services part of that P&L on Page 29 and the pallets will show up through the throughput.

Our next question is from Michael -- Mike Mueller with [indiscernible].

Is that me?

Mike, yes. Go ahead.

Yes, yes. Okay. Sorry about that. I guess as a follow-up to that question, how material or not could the occupancy lift from selling or idling the 9 sites that you just talked about? How material could that be? And then also, like the new complementary use initiatives that you're going after, like how should we think of in terms of the occupancy lift potential coming from those -- so those two buckets there?

Yes. I mean if we thought about in the -- let me think about it in terms of the fourth quarter. So in the fourth quarter, that 280 basis point occupancy lift, really about 100 of that was related to the seasonal harvest, which is kind of what we talked about last year. You have about a 100 basis point increase from some of the portfolio management initiatives that we've been taking. And the rest, that 80 basis point increase was really from new business opportunities that kind of came to fruition in the fourth quarter. So that would be the impact for Q4. I'm not sure, quite frankly, if we haven't broken out for how to think about it in 2026.

Our next question is from Vince Tibone with Green Street.

I was hoping to unpack the non-same-store guide a little bit for NOI, which it looks like it's around $50 million at the midpoint. Just if you could kind of unpack the difference between like the transportation and managed segment, which is like about $40 million of NOI last year versus additional development leasing. What I'm really trying to get at is just how much incremental development stabilization is incorporated in the guidance? And if there's anything on that transportation line and third-party line that's any volatility there we should be aware of?

Sure. Vince, it's Scott. Thanks for the question. Let me help you bridge that. So when you look at our -- when you look at our new same-store guide, the mid is $760 million, okay? And as I mentioned, that now includes our managed NOI segment that is now getting rolled into that. So the $760 million, and again, when you're building your model, look at Page 29 of the IR supp, which shows that our updated same-store pool being recast to 2025. So the $760 million is on that same-store pool on 2029, which includes the managed, okay? If you then think about our -- we gave you a total NOI guide at the mid, which was $813 million, okay? So $813 million is total NOI. And if you take $813 million minus $60 million, that gives you a number. But remember, trans is also in that number. If you assume trans is roughly flat at $31 million, so you take $813 million, minus $760 million, minus $31 million, gets you the non-same-store pool at the mid of around $20 million. So I'll stop there, Vince, but I just wanted to bridge that math for you.

No, that's helpful. The managed segment like we had about $9 million of NOI, that's now in the warehouse segment, correct? So it sounds like there's $20 million in whether it's the Houston acquisition last year and additional development stabilization. I just want to confirm what's in that remaining $20 million. Is that a fair categorization?

That's right -- sorry, Mike. (sic) [ Vince ]. And that squares, that's the developments that are ramping up that's the assets in the non-same-store pool, and then that's things like the Houston acquisition. All in that $20 million roughly, I quoted you $22 million, but $20 million at the mid of the non-same-store pool.

Great. If I can maybe squeeze in one follow-up. I know the focus is obviously on economic occupancy. But do you think physical occupancy has effectively bottomed here on a seasonally adjusted basis? Like on for full year, do you think you've actually see flat or even growing physical occupancy trends on a full year, full year basis?

We do, Vince. I mean we -- I think flat is the right way to think about it, but we think physical occupancy has stabilized. Our customers have rightsized their inventory to meet the current demand levels. Should there be a sustained increase in some demand, we think they'd have to increase their physical occupancy in order to meet their service requirements to the retailers, but that's not what we've assumed in our guide.

Our next question is from Nick Thillman with Baird.

Maybe following up on this cost structure and you guys eliminating some of the indirect labor associated with that. As we evaluate your North America versus just international portfolio, when you're doing this sort of review, is there any material difference as you look at like a facility level basis on how the cost structure is in those international assets and maybe the G&A overhead associated with that when you compare it to North America?

So what I would say is our European portfolio and our North America portfolio are pretty consistent. I think in terms of indirect labor, if I were to look at our Asia Pacific portfolio, we do skew a little more heavily towards retail in operations. So you're going to have probably more services revenue and more labor, both direct and indirect kind of as a percentage of revenue than what you would see in the U.S., which is more balanced between kind of pallet in, pallet out manufacturer business and retail business. From a G&A standpoint, I think as we look at our European business, given that it's not scaled yet as significantly as we have in North America or Asia Pac, you might see a slightly higher percentage there if you were looking at it as a percentage of revenue, but not major fluctuations across any of the 3 geographies, to be honest with you, besides some of those nuances, Nick.

Our next question is from Brendan Lynch with Barclays.

Maybe you can just give us some color on how you and the Board are thinking about the dividend policy given your deleveraging plans and other capital allocation considerations.

Yes. It's mission-critical for us. We -- as we've said at NAREIT and on prior calls, we want to maintain our investment-grade rating, and we want to maintain our dividend. We know how important that is. And so we're focused on capital allocation and deleveraging events that allow us to do both of those things and think about the right way to fund kind of a much more rationalized development portfolio.

Guys, I'd like to just go back over what's in the same-store and what's in the non-same-store on a go-forward basis. There's been a few questions that come in on it. So I'd like to maybe take a shot at walking everyone through it again. If you think about -- I'd just ask you to refer to Page 29, which is our new same-store pool. What's in the new same-store pool now, we are also consolidating our managed business. Our managed business had 3 assets in it that are now part of that 215. So when you look at the same-store pool for this -- for 2025, which was 219, you remove the 7 assets I mentioned on the call and then you add back in the 3 managed assets, that gets you to the 215. When you think about the managed revenue and NOI, it shows up -- it will show up under the services revenue and services NOI on that same-store pool page on 29. And when you think about how to get to the non-same-stool store pool number, again, we guided for the same-store at $760 million. The $760 million, as a reminder, again, includes these 3 managed assets in that NOI. We then -- if you think about the guide for the full company NOI, it was $813 million. $813 million less $760 million leaves you $53 million. But in that $53 million is also trans because that's part of our total company NOI. You assume trans flat at $31 million. You back that out and the residual is $22 million, which is our non-same-store pool bucket. So the 3 buckets are $760 million of same-store, which now includes managed, $22 million of non-same-store pool, which is our assets ramping up in development and M&A, the one M&A deal. And then lastly, approximately $31 million in trans NOI and you add all that up, and that gets you to the $813 million at the mid of total NOI. So hopefully, that addresses everyone's questions around that.