Thank you for standing by. This is the conference operator. Welcome to the Americold Realty Trust second quarter earnings call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mr. Scott Henderson. Please go ahead. Good afternoon. We would like to thank you for joining us today for Americold Realty Trust 2nd quarter 2021 earnings conference call. In addition to the press release distributed this afternoon, we have filed a supplemental package with additional detail on our results, which is available in the Investors section on our website at www.americold.com. This afternoon's conference call is hosted by Americold's Chief Executive Officer, Fred Boehler, and Chief Financial Officer, Marc Smernoff. Management will make some prepared comments, after which we will open up the call to your questions. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated. 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, and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures, including core EBITDA, core FFO, and AFFO. The full definitions of these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures is contained in the supplemental information package available on the company's website. Before I hand it over to Fred, I would like to provide some brief commentary on our second quarter results and activity. We continue to see food manufacturers producing at less than full capacity, primarily due to labor constraints, which ultimately reduces our physical occupancy. We expect production to continue to gradually ramp up and normalization to occur by mid-2022. We continue to execute on our external growth plan and have announced three mission-critical development projects totaling $111 million and three new strategic acquisitions totaling $488 million. We continue to demonstrate our commitment to ESG, as evidenced by our partnership with Feed the Children and Tyson Foods in launching an alliance to defeat hunger. I will turn the call over to Fred. Thank you. Welcome to our second quarter 2021 earnings conference call. We continue to remain focused on delivering on all three of our drivers of long-term value creation, our same-store pool, mission-critical developments, and strategic M&A. We continue to see COVID-related supply chain and labor market disruptions, which impacted our second quarter results. Let me be a bit more specific. During the second quarter 2021, existing inventory in cold storage was below prior year levels. While end consumer demand continues to remain steady, manufacturers have not yet gotten back up to pre-COVID production levels. During 2020, production levels were reduced as a result of process changes put in place by manufacturers to slow the spread of the virus. These initiatives, combined with subsequent labor challenges, have resulted in lower production levels. Over the last 15 months, these sustained initiatives and ongoing labor challenges and also COVID cases were declining in the second quarter of this year, we're now seeing increases in cases in certain locations, which may continue to impact production. The retail channel continues to run at higher levels than before COVID, and the food service channel is showing signs of recovery. However, food manufacturers are finding it challenging to recruit and retain workers. This is broadly limiting the end user. Consumer demand continues to weigh on our physical inventory levels. Our commercial business processes, including our fixed commitment contracts, mitigate some but not all of this impact. While we continue to make progress, we would remind you that nearly all of our recent acquisitions over the past few years did not initially have a meaningful number of fixed commitment contracts. That said, we are actively working with our customers to bring these acquisitions onto our commercial standards. This is how we continue to enhance value for our customers and shareholders. We fully expect food production levels to ultimately return to pre-COVID levels over time. Recently, 26 states announced they would no longer accept COVID-related supplemental federal unemployment benefits. Many of these states are in the Southeast, Midwest, and Northwest areas of the U.S., which are home to major food production plants. While the rising case counts in some areas in the U.S. and around the world pose some risk, we continue to believe that recent improving trends will continue in the second half of 2021. As of now, school openings remain on track for most regions of the country, freeing up many caretakers from the additional responsibility of being at home with their children during the day. This, combined with the announced end of the supplemental federal unemployment benefits in September, should increase the size of the labor pool, enabling food manufacturers to improve their staffing positions and ramp up production to more normalized levels and inventory positions. U.S. same-store inbound volume increased for the second quarter versus the first quarter by approximately 5% and versus second quarter of 2020 by approximately 3%. This illustrates that food manufacturers are gaining traction in ramping up production. However, as our occupancy shows, product is not being stored long enough in our facilities to increase inventory levels yet. Conversations with our food manufacturers indicate that production volumes are expected to continue to increase. Many of our customers are seeking to improve their inventory positions to better support their customers, who are the retailers and food service companies. Not only does end consumer demand remain stable, but retailers and food service companies have increased expectations of service levels and fill rates to pre-COVID levels. This further incentivizes manufacturers to ramp up production. We recently conducted a formal survey of our top 50 customers, which generate approximately 60% of our warehouse revenue. Many of our manufacturing customers are currently producing at approximately 80%-85% of pre-COVID levels. While they continue to ramp up production, they are not expecting to reach normalized inventory levels until mid-2022. We remain confident in the global demand for all types of food in our diverse portfolio, and we are confident that food manufacturers will return to pre-COVID inventory levels as end consumer demand remains firmly intact. Now, let me turn to our external growth activity. We continue to execute on strategic development and acquisitions that will help us better serve our customers and their supply chain needs on a global scale. Today, we announced three development projects in Atlanta, Georgia, Dunkirk, N.Y., and Dublin, Ireland, for a total of investment of approximately $111 million. On the back of strong demand for our recently completed Atlanta development, we are launching phase II of our Atlanta major Market expansion at our gateway facility. This will be a highly automated expansion, similar to phase I, with a diverse mix of existing and new customers in our pipeline. We have also started construction of a dedicated build-to-suit facility for a large private consumer packaged goods manufacturer in Dunkirk, N.Y.. This is a conventional build for a top 25 customer, which will be on a fixed commitment pricing structure with an initial 20-year term. This is a great example of how we continue to work with our customers to find ways to support their production and supply chains with long-term infrastructure. Finally, we are launching a major Market expansion at our Dublin, Ireland site that we acquired with Agro at the start of the year. This will be a conventional build on a site located 10 mi from the Dublin Port, which is a critical gateway for protein exports and perishable imports. We have a diverse mix of customers in our pipeline consisting of manufacturers of protein, dairy, fresh fruits and vegetables, as well as retail customers. Turning to our developments that were completed in the second quarter. Our three facilities in Lurgan, Northern Ireland, Auckland, New Zealand, and Atlanta, Georgia, received their certificates of occupancy and are all on track to stabilize as previously disclosed. As a reminder, Lurgan was a major Market expansion to support several customers and is fully sold. Auckland was an expansion to support a top five retail customer underwritten with a long-term fixed commitment contract. Lastly, Atlanta is a fully automated site anchored by two top five customers on long-term fixed commitments. Turning to other recently completed projects. If you recall, we disclosed in February that we are hampered by travel restrictions with our European-based automation partners who are tasked with improving the performance at our Rochelle facility. Since May, they have been on-site and have made improvements to the systems. Working with our development team, they have also identified additional recommendations to improve performance and stability, which we are evaluating. Based on these discussions and to minimize customer and operational disruptions, we expect this work to be done over the next 12 months. As a result, we now expect the project to be stabilized in the fourth quarter of 2022. Additionally, with respect to our recent Savannah build, which we completed on time and on budget, the facility's ramp has been impacted by the same broader Market dynamics affecting our overall portfolio. We expect this facility to return to plan commensurate with the broader Market recovery. We also continue to grow our portfolio through strategic acquisitions. Subsequent to quarter end, we completed one transaction and have entered into purchase agreements for two other acquisitions for a combined total of $488 million. As we have said, strategic tuck-in acquisitions meaningfully enhance our existing network. Just as important, all of these transactions bring opportunity to drive NOI growth as we commercialize existing business and implement the Americold operating system. On August 2nd, we closed on the acquisition of ColdCo in St. Louis, Missouri. ColdCo consists of one owned facility in St. Louis, generating approximately 93% of total NOI, and 1 leased facility in Reno, Nevada. ColdCo's customers are primarily focused on direct-to-consumer distribution. The company provides traditional rent and storage and value-added services for its customers. Almost all of ColdCo's customers are new to Americold and include unique brands focused on meal kits, protein bars and drinks, smoothies, confectionery items, baby foods, and high-end pet foods. We are retaining the ColdCo founders to help grow this direct-to-consumer business with a new type of customer. We also recently entered into a purchase agreement to acquire Newark Facility Management in Newark, New Jersey. Newark consists of one owned facility that is a dedicated retail distribution center for a leading regional grocer serving the Northeast and Mid-Atlantic U.S.. This grocer i s a top 10 customer of ours and has been with us for decades. We currently serve this customer out of two other facilities in our network. As we said earlier, nearly all of our previous acquisitions did not have meaningful contractual commitments in place with their customers. In this case, Newark has a fixed commitment structure in place with this grocer, with approximately 16 years of duration remaining on the contract. In addition, we are also acquiring three acres adjacent to this site for future development. Retail distribution is one of the fastest-growing areas for Americold, and we are very excited about expanding our relationship with this leading grocer. We expect to close this transaction in September of 2021. Finally, we recently entered into a purchase agreement to acquire Lago Cold Stores in Brisbane, which is Australia's third-largest and fastest-growing city. Lago consists of one owned facility, generating approximately 78% of total NOI, and two leased facilities. Lago's owned facility, which is 5.4 million cu ft, is adjacent to our recently acquired Agro Brisbane facility. These facilities are strategically located less than 10 mi from the Port of Brisbane. This transaction grows our exposure with several top 100 customers and adds new customers to the portfolio. The customer mix includes protein and potato producers, quick service restaurants, and retail customers. This acquisition is subject to customary closing conditions and regulatory approval and is expected to close in the fourth quarter of 2021. With regard to our ongoing ESG efforts, we continue to be very active on this front. In the second quarter, we partnered with Tyson Foods, one of our largest customers, and Feed the Children, an organization Americold has sponsored for numerous years, to launch an alliance to defeat hunger with a 10-city tour across the U.S.. Throughout the tour, our three organizations will supplement nearly 2 million meals to help feed families in rural communities. Additionally, we recently submitted our responses for the 2021 GRESB Real Estate Assessment and the Carbon Disclosure Project. These are important milestones for us as we continue to progress in our ESG initiatives. In summary, we continue to drive internal growth through our portfolio's diversity and scale, the effectiveness of our commercial processes, and the Americold operating system. On the external growth front, we continue to execute on the mission-critical development projects and strategic acquisitions as evidenced by this quarter's activity. Barriers to entry remain high in our business. It would be difficult, if not impossible, to replicate our strong Market share in our integrated global platform, which now spans four continents. I will now turn the call over to Marc Smernoff. Thank you, Fred, and good afternoon, everyone. For the second quarter, we reported total company revenue of $655 million and total company NOI of $155 million, which reflects a 36% increase and a 21% increase year-over-year, respectively. This growth was driven by our 2020 and 2021 acquisitions and developments completed over the past year, which helped increase our NOI from our global warehouse and transportation segments. Core EBITDA was $118 million for the second quarter of 2021, an increase of 18% year-over-year. This growth was driven by the total company NOI growth, which was partially offset by incremental corporate SG&A net of synergies related to our recent acquisitions. Core EBITDA margin declined 276 basis points to 18.1%. This margin decline was from a combination of lower warehouse margins from recently acquired businesses, additional contribution from the transportation segment due to recent M&A activity, and lower storage revenue in our same store. Our second quarter AFFO was $72 million or $0.28 per diluted share. Turning to our Global Warehouse segment. Global Warehouse segment revenue was $504 million, which reflects growth of 35% year-over-year. Global Warehouse segment NOI was $144 million, which reflects growth of 20%. Global Warehouse segment NOI margin was 28.7% for the second quarter, a 360 basis point decrease compared to the same quarter of the prior year. The revenue and NOI growth were primarily due to our acquisitions, contractual rate escalations, and a modest increase in service revenue, partially offset by a decline in our storage revenue within our same-store pool. Absolute dollar basis to $333 million from the sequential quarter. On a combined pro forma basis, we derive 38.9% of rent and storage revenue from fixed commitment storage contracts, which is a 240 basis points increase from the sequential quarter, primarily driven by the conversion of a top five customer to a fixed commitment contract, which was mentioned on last quarter's call. Now I'll turn to our same-store results within our Global Warehouse segment. For the second quarter of 2021, our same-store Global Warehouse segment revenue was $360 million, which reflects an increase of 2.1% year-over-year, and flat on a constant currency basis. Same-store Global Warehouse NOI was $116 million, which reflects a decrease of 0.8% year-over-year and a decrease of 2.5% on a constant currency basis. Same-store Global Warehouse NOI margin decreased 95 basis points to 32.3%. The ongoing disruption within food production continues to weigh on our same-store results. For the second quarter, same-store global rent and storage revenue decreased by 1.2% year-over-year and by 2.3% on a constant currency basis. This was driven primarily by a decline in economic occupancy. Our same-store economic occupancy was 75.2%, which reflects a decrease of 403 basis points from last year's second quarter economic occupancy, as we were impacted by reduced food production levels, yet stable consumer demand, as Fred discussed earlier. The occupancy decline was partially offset by a 2.5% increase in our constant currency average storage rate per economic pallet, driven by contractual rate escalation and business mix. Our same-store global rent and storage NOI decreased by 3.8% year-over-year and decreased by 4.9% on a constant currency basis. This was due to lower economic occupancy as well as increased costs year-over-year, including power, property taxes, and property insurance. These costs were partially offset by contractual rate escalations. Same-store global rent and storage NOI margin decreased 166 basis points to 63.7% due to the same factors. Same-store global warehouse services revenue for the second quarter increased by 4.7% year-over-year and increased by 1.9% on a constant currency basis. This revenue growth was driven by business mix, including elevated retail activity, contractual rate escalation, and a modest improvement in throughput. Our same-store global warehouse services NOI increased by 16.3% year-over-year, or 11.5% on a constant currency basis. This increase in NOI was driven by higher revenue and partially offset by labor expense growth, net of the appreciation bonus paid last year. A number of factors are contributing to the increase in our labor expense, including labor availability and inflationary wage pressures, similar to what our customers and the broad Market are facing. Same-store warehouse services NOI margin was 9.6% for the quarter, which was an 81 basis points improvement over the prior year. Please note, we have provided additional disclosure around the historical performance of our current same-store pool in our IR supplement. Within our Global Warehouse segment, we had no material changes to the composition of our top 25 customers, who account for approximately 48% of our global warehouse revenue on a pro forma basis. Our acquisition activity has both enhanced our wallet share of our key customers while providing further overall diversification. Additionally, our churn rate remained low at approximately 3.4% of total warehouse revenues. Corporate SG&A totaled $42 million for the second quarter of 2021 as compared to $32 million for the comparable prior year quarter. The increase was driven by SG&A absorbed, net of synergies, through our recent acquisitions to support our global platform. As a reminder, we assume $38 million in annual SG&A from Hall's and Agro combined and expect it to eliminate between $10 million and $13 million over the first two years. Integration is a critical component of our M&A strategy. As of today, we are ahead of plan in terms of timing and the dollar amount as we have taken actions to remove $14 million in annualized SG&A. With respect to our current developments, we invested approximately $70 million on expansion and development capital during the second quarter. Regarding our recent investment activity, as Fred mentioned, we announced three new development starts. We also completed our acquisitions of Bowman in May and ColdCo in August, and we executed purchase agreements for Newark and Lago, which are expected to close in September and the fourth quarter, respectively. All of these new transactions were or will be match funded using a combination of cash, equity, and our multicurrency revolver. Turning to our balance sheet and capital Markets activity. We continue to believe maintaining a low lever, flexible balance sheet provides a competitive advantage as we seek to drive internal and external growth over the long term. During the quarter, we exercised 8.4 million of previously raised forward shares for approximately $215 million in net proceeds to help fund our developments and acquisitions. Additionally, during the quarter, we issued 1.5 million shares, all on a forward basis, at a weighted average gross price of $38.96 per share under our ATM program in order to fund growth initiatives. At quarter end, total debt outstanding was $2.9 billion. We had total liquidity of approximately $1.3 billion, consisting of cash on hand, revolver availability, and $231 million of outstanding equity forwards. Our net debt to pro forma Core EBITDA was approximately 4.9x. Now let me discuss our outlook for 2021. We are revising our guidance for AFFO per share to the range of $1.34-$1.40, given the unprecedented uncertainty in the food supply chain and challenges present in the labor Market. Additionally, we're revising our same-store constant currency annual guidance for 2021. We now expect same-store constant currency revenue growth to be between 0% and 2%, and the corresponding NOI growth to exceed revenue growth by 0 to 100 basis points. This is reflective of the unique current Market conditions, which we do not expect to persist long term. Please note our long-term guideposts around same-store have not changed. Please refer to our supplemental for detail on additional assumptions embedded in this guidance. Please keep in mind that our guidance does not include the impact of acquisitions, dispositions, or capital Markets activity beyond which has been previously announced. Thanks again for joining us today and we will now open the call for your questions. Operator? We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We ask you keep your question to one per person with one follow-up question. The first question today comes from Dave Rodgers with Baird. Please go ahead. Yeah, good evening, everyone. Fred, wanted to start with you. On the first quarter call, you really mentioned that you were beginning to experience the recovery already and that you were more comfortable with the bounce back in the second half of the year. I guess I would just say you gave a lot of data and details, but I guess what were you seeing? What's changed, and I guess what is embedded in the occupancy ramp for the second half of the year that gets you confidence with the new range? Yeah, sure. Look, one of the things that we said in the first quarter, we were asked questions about the wideness of our original range. We were asked, you know, what drives you to the top end of the range versus the bottom end of the range? We said the top end of the range was really a function of the Market recovering fast, right? The lower end of the range was, you know, a little slower recovery. You know, coming out of the first quarter, we were seeing volume pick up, indeed in the second quarter, we saw volume pick up. I think inbound pallets were up by 5% over the preceding quarter. That was giving us confidence that manufacturers were starting to get back up to speed. The problem that we saw as we went through the rest of the second quarter is it really wasn't gaining much more traction than that than we needed it to. It kinda slowed a little bit. The labor challenges really started to kick in in that kinda end of March, April timeframe, is when the government supplemental kicked in. We weren't sure, you know, how the manufacturers were gonna react and if they were gonna be able to climb out of that. As it shows, they haven't been able to, right? Throughput was up 5%, but, you know, we were kind of hopeful to see it, you know, ramp up a little bit higher and take the momentum of coming out of March and April. That just didn't occur. On the good news side, the throughput is picking up. We expect it to continue to pick up. What we've done is we've revised our guidance really to the down, to that lower, the bottom end of the range of what our original guidance was. In a sense, we're kind of sticking to what our overall thoughts were for the year. It was just a matter of whether or not we were gonna recover faster or slower. This labor situation and then, you know, quite honestly the current, you know, pandemic with the new variants coming into play just leave us to kind of question how fast we're all gonna be able to get ramped back up from a manufacturing standpoint. Maybe my second question, I'll dovetail the last part of my first question, which was, what do you expect in an occupancy ramp in the second half? I'll dovetail that with what are you seeing also with the labor issues within your portfolio? Looked like you should have had maybe a little bit better margin enhancement given the comp that you had last year. Can you give us a sense for both the occupancy and the cost pressures that you're expecting in the second half of the year for labor? Yeah. On the labor, I'll let Marc take the occupancy, and then I'll hit the labor issue. Look, we're feeling the labor issue no different than the manufacturers. The thing is, it doesn't impact us as much in the business as it is getting the volume in the door. It's not because our cost is going higher. I think our margin issue is really driven by a couple things. One would be mix. We're doing more retail, which is great business. It generates a ton of cash flow, but it has a lower margin% associated with it. Number two is the lack of storage. That's our highest margin part of our business. The product's coming through. Again, that's the good news, is our infrastructure is going to be used no matter what to help facilitate the movement of those goods from that point of manufacture all the way through the supply chain to the point of consumer acquisition. That is still occurring. The problem is, it's just not sticking to our warehouse. It's not sitting and building inventory back like it was pre-COVID. That's the situation happening with the margin. Marc, I don't know what you want to say about occupancy, but Yeah, as we think about occupancy growth through the balance of the year, we're entering into the phase where, typically late this quarter, early next quarter, we'll start to see the normal seasonal build. As Fred mentioned, as we mentioned last, we are seeing improvement from our clients in terms of manufacturing. We just haven't seen them really cross that threshold where they're able to produce significantly more than what is a very stable and steady ultimate end consumer demand. We're expecting that we'll continue to improve back through the balance of the year. From an overall growth, we're thinking somewhere it could be around 100 to possibly 200 basis points overall in economic growth through the back half. Thank you very much. Thank you. Thanks, Dave Rodgers. Your next question comes from Manny Korchman with Citi. Please go ahead. Hey. Good evening, everyone. In their own businesses. Look, I think this spread. We were getting indirect communication. We're always talking with our customers, but we actually put out a formal survey, a formal written response campaign, after our call to try to get more formal dialogue going. No, the vibe was relatively positive, and the vibe coming in out of the first quarter was, hey, COVID is starting to subside. The restrictions are starting to mitigate. We're able to speed up our production lines. That's great. There was a lot of optimism throughout the first quarter that things were going to start to really ramp back up. Then came the federal subsidy, and it just slammed the labor Market down. These guys, the manufacturers, are all ready to produce and are wanting to produce at the higher levels to rebuild their inventories, and to be able to provide good, steady demand flow. They can't find the labor to do it. That's what we transitioned to, right? That subsidy, I think, kicked in late March. Leading up to that, people were like, "Hey, we're coming out of COVID. Things are going to start ramping back up. We're going to start hiring people and get to work." It just didn't go as planned. Thank you for that. As we look into next year, it sounds like you have the confidence that this is all going to just kind of make up for itself and bounce back. Are there other sort of steps along the way that we should watch for? Could things hit softer? Do the conversations change just as goods aren't flowing through or aren't sitting in your warehouses? Does the mix of customers change? Any of that happen sort of between now and mid 2022 when you expect things to normalize? Yeah, no, we're not expecting any change in the mix of our business. If you look at our churn rate, our churn is like 3.5%, 3.4%, I think. We're not losing customers. It's not necessarily mixing out different than we would normally see, with new customer acquisition and such. This is purely a function of the food manufacturers being able to up their production 1,000%. As that volume starts to come back up, they'll fill the forward points first. That's kind of what's happening right now. If you listen to the news and watch what's going on with Kroger and Walmart and some of these other guys, Sysco and US Foods, what they're doing is they're building up their inventory in their DCs and replenishing it. That product's flowing through our facilities, getting all the way to that end node of the supply chain and filling that up first. Once that's filled, they'll start filling up the distribution centers, which are our facilities that are feeding those retail distribution centers, and then the production advantage sites will start to rebuild inventory too. I have all the confidence because every single one of our customers, I cannot name one that has said, "Hey, you know what? We're going to operate with lower inventory going forward." It's really just a matter, and I wish I had the crystal ball to say when COVID will end, when these subsidies will end, and when we'll get people back to work and get back up to full production. Based on everything I can see here today, we're guessing that's going to slowly continue to improve over the next, call it 9-12 months. Fred, on that point on them filling their own DCs and sort of pulling product through, forgive me for maybe not understanding the business that well, but wouldn't that just create an air pocket that eventually gets filled? They had holes in their DC, they order a bunch of stuff, it shrinks your inventory, now their DC is full. Shouldn't that drive an inventory build in your warehouse, and shouldn't it be sort of quicker than the 9-12 months? What part of that am I missing if they're simply pulling through product, I guess, faster? Is it just that. Yeah. No, no, no. The product behind that? Yeah. Go ahead. No, the concept, what you just said, is absolutely correct. That's exactly the stage that it will happen. The food manufacturers are basically just above being able to take care of production to fill the current demand. Demand from us as consumers hasn't changed throughout this whole thing. When they were sub-production, if you will, just a couple of months ago, they weren't able to keep up with demand. As a result, inventories were being depleted. They got to get to a point where inventories are no longer being depleted. In other words, demand is being replenished up to par. Those retailers and food manufacturers can start to get back in the inventory position. What I'm saying is, by the time Kroger and Walmart and Publix and Sysco and US Foods, when their warehouses are full and they've replenished that part of the supply chain, they're not there yet, that's the piece that's being refilled first. It will start to fill the back end of the supply chain, which is primarily our nodes. Thanks. Look, I don't have a crystal ball as to whether or not it's going to be nine months or 12 months. It could be six months. Everything's gone slower than what I think we all anticipated due to this labor Market. Thank you. Thank you. Your next question comes from Michael Carroll with RBC Capital Markets. Please go ahead. Yeah, thanks. Not to focus on this too much, but I guess, Fred, in your prepared remarks, you highlighted that manufacturers are back to 85% of pre-COVID levels. What is that up from? I guess where was their production in the beginning of this year, and is the expectation that they get back to 100% in the fall, or is it just too early to tell because we don't know about the labor problems and then the Delta variant? Yeah. There's obviously those unknowns which are more recent, right? There's also a new variant, I guess, that's going through South America right now. No one can predict what's going to happen there. All I can tell you, I can't put a finger on exactly what the number was earlier this year in terms of production capacity. The 80%-85% is what came directly back from our written responses to our formal survey. That's the only point of reference that I can give you. They didn't tell us when they'd be back up to 100% or 110%, necessarily. What they told us was that they felt that production would continue to ramp, and they'd get back to normalized inventory levels by mid-next year. That was the feedback from our top 50 customers. Okay. Can you talk a little bit about how your customer agreements work? I guess, does Americold have a buffer on the contracts that are not fixed rate commitments? If a customer doesn't hit their customer profile that you have on everybody, is there a true-up payment at the end of the year? If that's true, is that included in your guidance, or how should we think about that potential piece of the business? Yeah, there are not true-up payments. It's more of if we feel that the profile is going to be prolonged further, we can change the rates, and then it's from that point forward. What we don't want to get into a situation is where we're yo-yoing our customers and increasing rates because their profile is different now and then six months later it's back to where it should be. We're kind of weathering some of that storm. We factor all of this cost and this difference into our activity-based costing. All the new business that's coming in is being priced based on what our true cost to serve is. Our general rate increases that we issue out there in the Marketplace for the non-long-term contracted customers will obviously take into consideration our increased costs as well. That's the way we'll kind of recover it. It won't be any kind of lump recovery at the end of the year. Okay. Those customer profiles is really helpful when there is a specific customer issue, not when there's a macro issue. Since everybody's being impacted right now, there's no reason to change anything. That is correct. Okay, great. Thank you. Thank you. The next question comes from Ki Bin Kim with Truist. Please go ahead. Thanks. Just wanted to go back to your earlier comments about your manufacturers suggesting that mid-2022, they might see normalized inventory. Does that mean Americold will see normalized occupancy, or is there a delay? I would imagine you can't just get to 100% food production levels. You have to overproduce to start to build inventory that makes its way into your warehouses. High level, I'm just trying to see if there's actually risk into 2022 for your company. Yeah. Remember, our customers' inventory is our physical occupancy. We are their infrastructure. When I talk about their inventory, that's direct correlation to our physical occupancy. Okay. I guess even if things go according to plan and mid-2022, you get back to normalized inventory, it still, I guess, creates a little bit of some risk to 2022, right? At first, I thought we would end the year strong and 2022 would be a normal year. It seems like 2022 might be a transition year as well. I am sorry for putting words in your mouth, just trying to understand that. Yeah. No, that's exactly what we're saying is, the manufacturers are telling us they don't think they'll be back up to full inventory, which means we won't be back up to full physical inventory until mid-2022. Okay. Earlier you said that you haven't faced a similar labor issue for your company. I'm curious why that is, because I would imagine you should, and there could be some upward pressures to labor costs for your portfolio. Maybe it hasn't shown up yet. Yeah, no. I would imagine eventually that would happen. The point I was trying to make is, while we have labor pressure, it's not as impactful. If I have a facility that has 30 people and I'm 10% down on labor or 20% down on labor, you're talking about what? Three-six heads. It's not as dramatic as a manufacturing plant that has hundreds of people, and when they're down by 20%, it's far more meaningful. There's lines that they can't run. It's a magnitude thing. The most important thing for us is to get the throughput volume coming through our operations. Even if I'm short on labor, we're more flexible. I have 245 sites. I move labor around to where the work is. We can work overtime without killing ourselves and without blowing out the cost side of the budget. Thanks. If I could squeeze a quick third one in. Just trying to understand, the cadence going into August, what is your physical occupancy today versus a year ago? Ki Bin, our physical occupancy in our same store is down 700 basis points from where we were in the prior year, at this point. This is the phenomena that Fred's been describing with an environment with stable end consumer demand and limited production. They're eating into our inventory, which is the buffer stock. As Fred mentioned in his prepared reMarcs, we are seeing growth in the inbound of product, which we're encouraged by. Looking both sequentially and year-over-year, the fact that we are seeing more inbound product shows that our manufacturing clients are improving production. It hasn't crossed that margin to where they're starting to meaningfully build inventory. That's why you'll see our inventory has been getting drawn down through this process. As I would point out, and I think we mentioned this on the last call, if you look on the broad Market data, the USDA data especially, key products, you have significant products when you look through the April, May, June timeframe that are running somewhere at 70%-80% of where they were this time prior year. I think our portfolio, relatively speaking, relative to the broad Market, is holding up well. It's just that there are still challenges present in the Market until we get this labor back and get manufacturing fully ramped up. Okay. Just to clarify that comment. You said your physical occupancy is down 700, but in June 30th, your physical occupancy was down 531 basis points. Am I looking at that apples to apples? Yes, correct. I was looking at the absolute dollar, or the absolute number of physical pallets was down 700 basis points. There's some changes. Okay. Thank you. We work with customers, and at times, we have to reconfigure the facilities to support new business, changing business. I was quoting the first number. All right. Thank you. Thank you. Your next question comes from Bill Crow with Raymond James. Please go ahead. Good evening. Thanks. Fred, you said that the producers are producing at levels just above demand levels. We aren't seeing shortages as consumers. Why is it that they need to have all this additional inventory sitting around in your facilities? All businesses are being rethought and rebuilt, and changes are being made. If I'm an engineer at Smithfield Foods. Why am I not suggesting they reduce that inventory level to more of a just-in-time sort of flow? Is it possible that this is a permanent change? No, I really don't think that it is. Certainly, my colleagues out there in manufacturing and retail would echo that. There's a couple things here. Number one, you walk into any single grocery store and there's lots of empty space, right? What's happening right now is there's substitution going on, right? If you don't find something that you're looking for, you're moving on to the next item. Most of us want our selection, so what a lot of the manufacturers have done is You take a manufacturer, and they produce 50 different items. Today, what they're doing is they're producing 30 items, and they're not producing the other 20 items. They're just trying to get the main items out there on the floor, and kind of the secondary and tertiary items are the ones that are being left behind due to the shortage of production. They want to get their full assortments out there. That's how they drive their margin long term. Remember, volume for these retailers will start to slow down as the restaurants open, right? We saw some momentum with restaurants opening and such, but those retailers need to mix out with all those various SKUs to help drive their margins and their performance within their business. Same for the food manufacturers. Some of those slower moving items are their higher margin items. There's a desire to get back to that level. Then, as a country and really as a world, grocery is highly promotional. That's where you need safety stocks, is as different campaigns are running and promotions are running, they're drawing on certain SKUs faster than other SKUs. Manufacturers have plant shutdowns. They need to have a buffer of inventory to be able to clean their lines and to be able to go through their ordinary maintenance. This is all reasons why you have safety stock in the supply chain. To weather storms. I mean, hurricanes and weather conditions that create supply chain jams. That's why you need safety stock. If we did not have that safety stock, now nobody expects this type of 100-year flood to come again anytime soon, hopefully for another 100 years. If we didn't have that safety stock going into this, boy, we'd be in a much, much tougher situation where we wouldn't have food supply. That's kind of the basics, high level as to why we believe inventory will get back to normal. All right. Speaking of 100-year flood, is it possible that next quarter we're talking about the drought in the West and how that's impacted harvest volumes or meat processing or anything like that, or is that not an issue? We haven't seen as much of that yet. Anything's possible, but I think in that part of the West where the drought is happening, there isn't a ton of ag that we're supporting. I don't expect so. Yeah, we're not hearing anything from our team there. Yeah around concerns about crop levels. Okay. All right. Thanks. Thank you. Once again, in the interest of time, we ask participants to limit themselves to one question. Your next question comes from Michael Mueller with JP Morgan. Please go ahead. Yeah. Hi. Marc, on your comments about picking up 100-200 basis points of economic occupancy in the second half, how much of that would you chalk up to just normal seasonality versus the building back on top of that? Yeah, look, I think, Mike, during that period, we expect to see a normal seasonal lift, but in order to get that normal seasonal lift. Overproduction Yeah, the overproduction to be there. It's a little hard to distinguish between the two at this point. I think collectively what our outlook tells us, we expect to see roughly about anywhere between that 100-200 point lift as we go through the back end of the year. Got it. Okay. Thank you. Thank you. The next question comes from Joshua Dennerlein with Bank of America. Please go ahead. Yeah. Hey, guys. I guess I'm just kind of curious, what are your assumptions as far as labor coming back to the producers? Is it truly like a September, everyone's back or a slow ramp? Just trying to figure out where high and low-end guidance kind of shakes out and what we should be watching as far as labor. Yeah. We think it's going to be, again, slow and steady based on what the manufacturers are telling us. A couple key data points to keep an eye on is number 1, the beginning of September, the supplements end. At least we believe that it's going to end. November 6th. It's hard to tell. I mean, right? The rent recovery thing just got extended even though it ended, too. We'll have to see what occurs come September. As of right now, that program ends September 6th. That's a key data point to keep an eye on. Number 2, back to school. Right now, we're anticipating that everybody's going back to school. That frees up those family members that are otherwise having to stay at home to take care of their kids. That frees them up to be able to get back to work as well. As long as we don't go into a complete shutdown and the schools close and we go back to 100% virtual learning, that will free up some labor as well. I think those are two data points that we got to keep an eye on, and both of those happen right at the beginning of September. We should have a good feel there. Fred, maybe to rephrase it, what would happen if production stays flat? Where does that leave you in guidance? Look, I think if production stays challenged, that gets us to the lower end of our guidance. Just as we said when we announced guidance at the beginning of the year, we mentioned there is a lot of uncertainty around the ramp and labor coming back and what we see, our guidance was wider in the beginning of the year, with the upper end being a faster recovery and the lower end being a sustained challenged recovery. Based on what we've seen, while, as Fred mentioned in the Q&A and the prepared reMarcs, we are seeing improvement, but we've still put it in the more challenged aspect and the slower recovery path. I'll tell you what's not built in, obviously, is if production volume decreases. That's a whole new animal. If we stop seeing the improvement and the growth that we're seeing right now, and it reverted back the other way and plants had to start shutting down, that's a whole different ballgame. We're not projecting that and anticipating that. Okay. If COVID kind of flares up and things slow, you could end up below guidance, basically. Is that? Yeah. Again, I'm just going to hang it on production volume. If production inbound slows, regardless of what the cause is, that will push us lower. Yeah. I would just remind everyone, we're in the second year of managing through COVID. All of our clients and our infrastructure is all essential infrastructure. We work our way through it. You're going to figure out ways to keep people working and trying to be as productive as possible, because we're talking about feeding the nations where we have infrastructure. Thank you. Your next question comes from Nate Crossett with Berenberg. Please go ahead. Hey, good evening. Thanks for fitting me in. If we could just switch gears, and you can maybe talk about the new Newark facility and the Lago Cold. Were those competitively bid transactions? Looks like the cap rate is kind of the lowest that we've seen in a while. Maybe you can just speak to kind of yields more generally, and if yields are coming down, what's the kind of knock-on effect in terms of development yields? On the acquisitions themselves, yeah, there is a lower number. Look, we keep talking about cap rates continuing to compress in this industry. There's no doubt. There's been a lot of activity, and every time there's activity, there's kind of a tightening of those cap rates for sure. Newark one in particular, we did have exclusivity on that in going through the negotiations. I think the difference in this facility versus some of the other acquisitions we've done is this is a full dedicated retail operation. It's a little bit different. It drives a tremendous amount of cash flow through the box and has a very, very long contract associated with it. We have 16 years remaining on an agreement there. Very, very rare. Most of our competitors and the companies that we've looked at don't have commercial arrangements, don't have contracts, certainly not of the length and term of this one. This one had a little bit more value. That and the fact that it's sitting in Newark, New Jersey, a very, very expensive area overall. I think that's why you're seeing that one in particular being a little bit tighter from a cap rate standpoint. On the development side, we still continue to develop at the same yields that we always have, and we expect to continue that. Okay. Thank you. If I could just do one quick follow-up, just on the producers again. Is there anything that you guys can do going forward so you're not as exposed to kind of the ebbs and flows of what the producers are doing? Can you do more fixed contracts? Yeah When we're out of COVID fully, whether it's 2022 or 2023, is there anything that you can do so this doesn't necessarily happen like this again? Yeah. Look, obviously continuing to drive fixed commitments us somewhat, not wholly, but certainly helps. I would point to the fact that we continue to make progress. Even through 15 months of COVID, we continued, quarter-over-quarter, to increase our fixed commitments. From a dollar standpoint, we increased our fixed commitment quarter-over-quarter. As a%, it's lower, but that's really just merely a function of all the acquisitions that we're doing that don't have fixed commitment. It kind of bring it down the denominator, if you will. We continue to make progress on that, and I believe that we will continue as we go forward. I think the key here, Nate, is that this is about the long game. This is infrastructure. I don't think we want to turn the commercial process upside down on its head because of what's going on, because all of us in this industry, retail, manufacturer, and providers such as us, know that the inventory's going to get back to normal. They're going to need this space. We have no customers that are pushing us and yelling at us because they're paying for fixed commitments and they don't have inventory in there, because they know they're going to need it. If they release it, somebody else is going to grab it. When they get back up to full production, they're not going to have anywhere to put it. That's kind of the dynamics going on. We're trying to weather the storm, and it's hard to predict when the storm's going to be over, but we continue to see positive signs in terms of the volume and hope that that continues. Okay. Thank you. Thank you. Your next question comes from Craig Mailman with KeyBanc Capital Markets. Please go ahead. Hey, guys. I know we touched on kind of the rebound in inventories a lot on this call, I guess just coming at from a different way, especially on the labor side of things, with the upward pressure for all the producers, what does that do to your ability on the rate side of things once inventories do start to normalize, hopefully in 2022? Just does it limit your ability to move the rate side of the equation at all? No. Look, we have an activity-based costing model, so one of the inputs, obviously, into our model is labor cost and wage growth. If that's higher than we would expect to see over time, our rates reflect that and the escalation that we're seeing to reflect that. That's how we factor them. Great. Thanks. Thank you. We have reached the end of our question-and-answer session. I'd like to turn it back to Fred Boehler. Closing reMarcs. Great. Thank you, everyone. In closing, I'd just like to say that while the global food supply chain continues to face unprecedented challenges, we remain focused on delivering all three of our key drivers of long-term value creation. That's same-store pool, mission-critical developments, and strategic M&A. At the same time, we're dedicated to maintaining a low-levered, flexible balance sheet. We would like to welcome the Newark, ColdCo, and Lago associates to the Americold family, and we again want to thank all of our associates, especially our frontline team members, for all their hard work and dedication. Thank you all for joining us tonight. That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.