Slides
Page 1
First Quarter 2025 FINANCIAL RESULTS April 30, 2025
Page 2
Forward-Looking Statements. Certain statements contained in this Presentation, other than historical facts, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Lineage operates, and beliefs of, and assumptions made by, the Company and involve uncertainties that could significantly affect Lineage’s financial results. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “measures,” “poised,” “focus,” “seek,” “objective,” “goal,” “vision,” “drive,” “opportunity,” “target,” “strategy,” “expect,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “tomorrow,” “long-term,” “should,” “could,” “would,” “might,” “help,” “aimed”, or other similar words. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Presentation. Such statements include, but are not limited to statements about Lineage’s plans, strategies, initiatives, and prospects and statements about its future results of operations, capital expenditures and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: general business and economic conditions; the impact of tariffs and global trade disruptions on us and our customers; continued volatility and uncertainty in the credit markets and broader financial markets, including potential fluctuations in the Consumer Price Index and changes in foreign currency exchange rates; other risks inherent in the real estate business, including customer defaults, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; the availability of suitable acquisitions and our ability to acquire those properties or businesses on favorable terms; our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate, integrate and manage diversifying acquisitions or investments; our ability to meet budgeted or stabilized returns on our development and expansion projects within expected time frames, or at all; our ability to manage our expanded operations, including expansion into new markets or business lines; our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent and future acquisitions; our failure to successfully integrate and operate acquired or developed properties or businesses; our ability to renew significant customer contracts; the impact of supply chain disruptions, including the impact on labor availability, raw material availability, manufacturing and food production and transportation; difficulties managing an international business and acquiring or operating properties in foreign jurisdictions and unfamiliar metropolitan areas; changes in political conditions, geopolitical turmoil, political instability, civil disturbances, restrictive governmental actions or nationalization in the countries in which we operate; the degree and nature of our competition; our failure to generate sufficient cash flows to service our outstanding indebtedness; our ability to access debt and equity capital markets; continued increases and volatility in interest rates; increased power, labor or construction costs; changes in consumer demand or preferences for products we store in our warehouses; decreased storage rates or increased vacancy rates; labor shortages or our inability to attract and retain talent; changes in, or the failure or inability to comply with, government regulation; a failure of our information technology systems, systems conversions and integrations, cybersecurity attacks or a breach of our information security systems, networks or processes; our failure to maintain our status as a real estate investment trust for U.S. federal income tax purposes; changes in local, state, federal and international laws and regulations, including related to taxation, tariffs, real estate and zoning laws, and increases in real property tax rates; the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us, and any other risks discussed in the Company’s filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024. Should one of more of the risks or uncertainties described above occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Forward-looking statements in this Presentation speak only as of the date of this Presentation, and undue reliance should not be placed on such statements. We undertake no obligation to, nor do we intend to, update, or otherwise revise, any such statements that may become untrue because of subsequent events. While the forward-looking statements are considered reasonable by the Company, they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and cannot be predicted with accuracy and may not be realized. There can be no assurance that the forward-looking statements can or will be attained or maintained. Actual operating results may vary materially from the forward-looking statements included in this Presentation. The forward-looking statements included in this Presentation have been included for purposes of illustration only, and no assurance can be given that the actual results will correspond with the results contemplated in the forward-looking statements. Market Data. We use market data throughout this Presentation that has generally been obtained from external, independent, and publicly available information and industry publications. None of Lineage, its affiliates, advisers, or representatives have verified such independent sources. Accordingly, neither the Company nor any of its affiliates, advisers or representatives make any representations as to the accuracy or completeness of that data or to update such data after the date of this presentation. Such data involves risk and uncertainties and are subject to change based on various factors. Capacity and market share data provided by the Global Cold Chain Alliance, or GCCA, reflects capacity of companies that report to GCCA. North American GCCA data includes GCCA’s estimate of capacity owned and operated by U.S. customers themselves based on data from U.S. Department of Agriculture surveys. Global GCCA data also reflects GCCA’s estimate of capacity of companies that do not report to GCCA. Non-GAAP Measures. This Presentation includes certain financial information that is not presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Such non-GAAP financial measures should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on Lineage’s statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. You should be aware that Lineage’s presentation of these and other non-GAAP financial measures in this Presentation may not be comparable to similarly-titled measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Lineage believes that in addition to using GAAP results, non-GAAP financial measures can provide meaningful insight in evaluating the Lineage's financial performance and the effectiveness of its business strategies. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are included in the Appendix to this Presentation. Safe Harbor Statement 2
Page 3
Announces Landmark Agreements with Tyson Foods 31. The acquisition agreement is subject to customary closing conditions and expected to close in Q2 2025. The entry into the warehousing agreement is a closing condition and expected to be entered into at or prior to closing of the acquisition. Assets to be Acquired Square Feet 1.4M Cubic Feet 49M Pallet Positions 160K Purchase Price $247M Expected Greenfield Developments Square Feet ~1M Cubic Feet 80M Pallet Positions 260K Capex Spend $740M+ Expected Yield 9-11% Agreements Summary and Timeline Acquisition and Warehousing Agreements1 • Agreement to acquire four assets (Pottsville, PA; Olathe, KS; Rochelle, IL; Tolleson, AZ) from Tyson Foods for $247M • Agreement to design, build, and operate two next-generation, fully automated cold storage warehouses in major U.S. markets, which Tyson Foods will occupy as an anchor customer • Tyson Foods also expected to occupy our newly developed Hazelton, PA warehouse as anchor customer Second Quarter 2025 • Expected closing of asset acquisitions, launch of integration, and welcoming ~1,000 existing Tyson Foods employees • Tyson Foods to begin storing product at Hazelton, PA warehouse Second Half 2025: Expected Development Groundbreaking • Lineage begins development on two greenfield warehouses 2027/2028 and Beyond: Operations Transition • As the two greenfield developments commence operations, acquired warehouses transition to public refrigerated warehouses
Page 4
Q1 2025 Highlights 4 • Landmark Agreements with Tyson Foods o $100M+ stabilized EBITDA when complete • Q1 25 saw normal seasonality, as expected, against elevated inventory levels last year o Revenue down (3)% o EBITDA down (7)% o Same WH physical occupancy held strong at 76.5% • AFFO per share +6% • LinOS continues to exceed expectations in initial pilots o LinOS and Lean initiatives are offsetting cost increases • Additional Capital Deployment: o Acquired three warehouse campuses from Bellingham Cold Storage for $121M on April 1, complementing our existing portfolio in the Pacific Northwest o ~$67M deployed for development • Completed one semi- automated expansion and commenced one fully automated expansion at high-utilization European sites
Page 5
Q1 2025 Financial Results 5 Total Revenue ($M) Adjusted EBITDA ($M) Adjusted EBITDA Margin AFFO per share $254 $334 $327 $304 Q1 22 Q1 23 Q1 24 Q1 25 22.5% 25.1% 24.6% 23.5% Q1 22 Q1 23 Q1 24 Q1 25 $1,127 $1,333 $1,328 $1,292 Q1 22 Q1 23 Q1 24 Q1 25 (3)%flatYoY growth +18% (7)%(2)%YoY growth +32% (110)bps(50)bpsYoY growth +260bps $0.81 $0.86 Q1 24 Q1 25 +6%YoY growth
Page 6
$785 $958 $969 $944 Q1 22 Q1 23 Q1 24 Q1 25 Revenue 1. As reported. 1Q 2023 and 1Q 2024 details represent the same warehouse pool for their respective time periods. 1Q 2025 details represent the 1Q 2025 same warehouse pool. 6 Q1 2025 Highlights • Revenue declined with a return to more typical seasonality vs last year’s elevated inventory levels • Continued emphasis on efficient operations with Same WH cost of operations down 2% YoY • LinOS pilots at conventional warehouses driving exciting productivity improvements 2025 Segment Outlook • Normal seasonality implies ~47% of full year NOI in H1 • Recently, additional uncertainty related to macro economic factors, including tariff policies, have contributed to customer hesitancy o ~15% of U.S. throughput volume is directly tied to import/export activity • Expect YoY decline in Q2, similar to Q1 • Return to growth in H2 due to normal seasonality and easing comps • Will have more visibility when tariff policies stabilize Global Warehousing Segment $M 39.1% margin 39.5% margin 35.6% margin Total Segment $285 $386 $385 $360 Q1 22 Q1 23 Q1 24 Q1 25 NOI Same Warehouse Details1 1Q 2023 1Q 2024 1Q 2025 Same WH NOI Growth 22.5% (2.9)% (7.9)% Physical Occupancy 84.5% 79.1% 76.5% Economic Occupancy 89.6% 85.1% 82.1% Warehouses 351 416 427 (3)%+1%YoY growth +22% (7)%flatYoY growth +35%
Page 7
$342 $376 $359 $348 Q1 22 Q1 23 Q1 24 Q1 25 Revenue 7 Global Integrated Solutions Segment $M Total Segment Q1 2025 Highlights • New business wins from 2H24 coming online over the course of 2025 • GIS transportation solutions increasingly in focus as customers react to US tariff announcements 2025 Segment Outlook • Q1 activity and customer wins supportive of strong year • Sequential improvement expected each quarter • Easier comps in the second half will help drive double- digit growth $52 $57 $59 $57 Q1 22 Q1 23 Q1 24 Q1 25 NOI 16.4% margin 16.4% margin 15.4% margin (3)%(5)%YoY growth +10% (3)%+4%YoY growth +10% 15.2% margin
Page 8
Total debt outstanding of $5.2B • ~3.5 years remaining weighted average term • Weighted average interest rate of 2.6% Net debt and debt-like-obligations of $6.7B • Leverage ratio of 5.2x 8 Capital Structure Update As of 3/31/2025 Total Debt $5,199 Debt-like Obligations $1,734 Gross Debt $6,933 Cash and Equivalents (excluding Restricted Cash) ($195) Net Debt $6,738 LTM Adj. EBITDA $1,306 Net Debt/ Adj. EBITDA 5.2x $M Net Debt to Adjusted EBITDABalance Sheet Total liquidity of ~$1.7B: • $197M in available cash • ~$1.5B capacity on revolving credit facility Liquidity
Page 9
9 Maintaining 2025 Guidance See "Non-GAAP Financial Measures" for additional information regarding these non-GAAP financial measures. 2025 Guidance Range Comments Adjusted EBITDA ($M) $1,350 - $1,400 No change; includes ~$25M contribution from announced acquisitions, monitoring tariff uncertainty causing customer hesitancy AFFO per share $3.40 - $3.60 No change; includes ~$0.05 contribution from announced acquisitions Note: Guidance excludes the impact of unannounced future acquisitions or developments Additional Modeling Support ($M) Range Comments General and administrative expense, cash $480 - $500 No change Stock-based compensation expense ~$140 No change Interest expense, net $260 - $280 Midpoint increased by $10M due to acquisitions Income tax expense, current $25 - $35 Midpoint decreased by $(10)M due to international tax Recurring maintenance capex $190 - $205 No change Adjusted diluted weighted average common shares outstanding ~257m No change
Page 10
10 Competitive Advantages Fueling Growth Flywheel Compounding growth to drive shareholder value Increasing NOI and Same Warehouse Growth Yields Additional Investment Capacity Accretive Capital Deployment in Development Projects and M&A Supports Future NOI Growth Maintaining adjusted EBITDA and AFFO guidance; return to normal seasonality and easing comps in second half Well-positioned to capture strong operating leverage on revenue growth AFFO per share +6% Distributed quarterly dividend representing $2.11 annualized rate Landmark Tyson Foods agreements showcase our unique value proposition to customers, leveraging our global footprint, data-driven approach, LinOS, and automation technology Strong Cash Flow and Tax-Efficient REIT Structure Creates Efficient Cost of Capital
Page 11
Supplemental Financial and Operating Data 11
Page 12
CONSOLIDATED FINANCIAL PERFORMANCE Global Warehouse Segment - Total 12 1. Labor cost of operations excludes less than $1 million of stock -based compensation expense for the three months ended March 31, 2025. 2. Includes real estate rent expense of $23 million and $25 million for the three months ended March 31, 2025 and 2024, respectively; and non-real estate rent expense (equipment lease and rentals) of $5 million and $5 million for the thr ee months ended March 31, 2025 and 2024, respectively. 3. Warehouse storage and warehouse services metrics exclude managed sites. Three Months Ended March 31, (in millions except revenue per pallet) 2025 2024 Change Warehouse storage $491 $516 (4.8) % Warehouse services 453 453 — % Total global warehousing segment revenues $944 $969 (2.6) % Power $49 $47 4.3 % Labor1 356 354 0.6 % Other warehouse costs2 179 183 (2.2) % Total global warehousing segment cost of operations $584 $584 — % Global warehousing segment NOI $360 $385 (6.5) % Total global warehousing segment margin 38.1 % 39.7 % (160) bps Number of warehouse sites 469 463 Warehouse storage3 Average economic occupancy Average occupied economic pallets (in thousands) 8,056 8,187 (1.6) % Economic occupancy percentage 81.0 % 83.6 % (260) bps Storage revenue per economic occupied pallet $60.93 $62.98 (3.3) % Average physical occupancy Average physical occupied pallets (in thousands) 7,506 7,603 (1.3) % Average physical pallet positions (in thousands) 9,949 9,796 1.6 % Physical occupancy percentage 75.4 % 77.6 % (220) bps Storage revenue per physical occupied pallet $65.39 $67.82 (3.6) % Warehouse services3 Throughput pallets (in thousands) 12,984 12,874 0.9 % Warehouse services revenue per throughput pallet $32.02 $32.40 (1.2) %
Page 13
SAME WAREHOUSE FINANCIAL PERFORMANCE Global Warehouse Segment – Same Warehouse 131. Warehouse storage and warehouse services metrics exclude managed sites. Three Months Ended March 31, (in millions except revenue per pallet) 2025 2024 Change Warehouse storage $456 $483 (5.6) % Warehouse services 419 430 (2.6) % Total same warehouse revenues $875 $913 (4.2) % Power $44 $44 — % Labor 331 336 (1.5) % Other warehouse costs 163 167 (2.4) % Total same warehouse cost of operations $538 $547 (1.6) % Same warehouse NOI $337 $366 (7.9) % Total same warehouse margin 38.5 % 40.1 % (160) bps Number of warehouse sites 427 427 Warehouse storage1 Average economic occupancy Average occupied economic pallets (in thousands) 7,487 7,671 (2.4) % Economic occupancy percentage 82.1 % 83.6 % (150) bps Storage revenue per economic occupied pallet $60.88 $63.00 (3.4) % Average physical occupancy Average physical occupied pallets (in thousands) 6,974 7,109 (1.9) % Average physical pallet positions (in thousands) 9,121 9,173 (0.6) % Physical occupancy percentage 76.5 % 77.5 % (100) bps Storage revenue per physical occupied pallet $65.36 $67.97 (3.8) % Warehouse services 1 Throughput pallets (in thousands) 11,894 12,109 (1.8) % Warehouse services revenue per throughput pallet $32.06 $32.54 (1.5) %
Page 14
NON-SAME WAREHOUSE FINANCIAL PERFORMANCE Global Warehouse Segment – Non-Same Warehouse 141. Warehouse storage and warehouse services metrics exclude managed sites. Three Months Ended March 31, (in millions except revenue per pallet) 2025 2024 Change Warehouse storage $35 $33 6.1 % Warehouse services 34 23 47.8 % Total non-same warehouse revenues $69 $56 23.2 % Power $5 $3 66.7 % Labor 25 18 38.9 % Other warehouse costs 16 16 — % Total non-same warehouse cost of operations $46 $37 24.3 % Non-same warehouse NOI $23 $19 21.1 % Total non-same warehouse margin 33.3 % 33.9 % (60) bps Number of warehouse sites 42 36 Warehouse storage1 Average economic occupancy Average occupied economic pallets (in thousands) 569 516 10.3 % Economic occupancy percentage 68.7% 82.8% (1,410) bps Storage revenue per economic occupied pallet $61.51 $62.80 (2.1) % Average physical occupancy Average physical occupied pallets (in thousands) 532 494 7.7 % Average physical pallet positions (in thousands) 828 623 32.9 % Physical occupancy percentage 64.3% 79.3% (1,500) bps Storage revenue per physical occupied pallet $65.78 $65.63 0.2 % Warehouse services 1 Throughput pallets (in thousands) 1,090 765 42.5 % Warehouse services revenue per throughput pallet $31.52 $30.12 4.6 %
Page 15
SAME WAREHOUSE FINANCIAL PERFORMANCE - LAST FIVE QUARTERS Global Warehouse Segment – Same Warehouse (Q1 2025 Pool) 15 Note: Same Warehouse figures based on the Q1 2025 Same Store asset pool. 1. Warehouse storage and warehouse services metrics exclude managed sites. Three Months Ended YoY % Change (in millions except revenue per pallet) March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 1Q 2025 vs 1Q 2024 Warehouse storage $483 $480 $479 $479 $456 (5.6) % Warehouse services 430 433 441 439 419 (2.6) % Total same warehouse revenues $913 $913 $920 $918 $875 (4.2) % Power $44 $46 $54 $49 $44 — % Labor 336 338 334 333 331 (1.5) % Other warehouse costs 167 162 164 173 163 (2.4) % Total same warehouse cost of operations $547 $546 $552 $555 $538 (1.6) % Same warehouse NOI $366 $367 $368 $363 $337 (7.9) % Total same warehouse margin 40.1 % 40.2 % 40.0 % 39.5 % 38.5 % (160)bps Number of warehouse sites 427 427 427 427 427 Warehouse storage1 Average economic occupancy Average economic occupied pallets (in thousands) 7,671 7,635 7,598 7,812 7,487 Economic occupancy percentage 83.6 % 83.2 % 83.0 % 85.5 % 82.1 % Storage revenue per economic occupied pallet $63.00 $62.82 $63.09 $61.35 $60.88 Average physical occupancy Average physical occupied pallets (in thousands) 7,109 7,041 6,977 7,263 6,974 Average physical pallet positions (in thousands) 9,173 9,182 9,158 9,134 9,121 Physical occupancy percentage 77.5 % 76.7 % 76.2 % 79.5 % 76.5 % Storage revenue per physical occupied pallet $67.97 $68.12 $68.70 $66.00 $65.36 Warehouse services1 Throughput pallets (in thousands) 12,109 12,406 12,400 12,360 11,894 Warehouse services revenue per throughput pallet $32.54 $31.80 $32.31 $32.36 $32.06
Page 16
1. Labor cost of operations excl udes stock based compensation expense of $1 million for the three months ended March 31, 2025. 2. Transportation includes railcar leasing Global Integrated Solutions Segment 16 Three Months Ended March 31, (in millions) 2025 2024 Change Global Integrated Solutions segment revenues $348 $359 (3.1) % Global Integrated Solutions cost of operations1 $291 $300 (3.0) % Global Integrated Solutions segment NOI $57 $59 (3.4) % Global Integrated Solutions margin 16.4 % 16.4 % — bps CONSOLIDATED FINANCIAL PERFORMANCE Global Integrated Solutions Breakdown Q1 2025 Revenue2
Page 17
Greenfield and Expansion Projects 17 Notes: Values expressed in millions unless otherwise stated. Totals may not sum due to rounding. As of March 31, 2025. 1. Total Cost is actual capex spend in addition to any forecasted capex spend subsequent to Go Live for projects that have gone live. Does not include third party costs. 2. Remaining Spend is total project cost less actual spend to date. 3. Percentage of last twelve months revenue less operating expenses divided by stabilized revenue less operating expenses. 4. Defined as stabilized revenue less operating expenses divided by total cost. Greenfield and Expansion Projects Completed Within The Last 36 Months and in Process Project Vintage (Months) Project Count Square Feet (in millions) Cubic Feet (in millions) Pallet Positions (in thousands) Total Cost (in millions)(1) Remaining Spend (in millions)(2) LTM NOI (in millions) Estimated Stabilized NOI (in millions) Stabilized NOI Achieved(3) Estimated Stabilized ROIC(4) 25-36 11 1.0 63 205 $301 $0 $17 $30 55% 10% 13-24 6 1.2 61 193 287 0 25 36 69% 13% 1-12 5 0.7 40 124 303 2 (7) 30 (23%) 10% 1-36 22 3.0 164 522 $891 $2 $34 $96 36% 11% In Process 6 0.8 51 203 $388 $166 ($1) $41 0% 10% Total 28 3.8 216 725 $1,279 $169 $34 $137 25% 11% Incremental NOI from Greenfield and Expansion Projects Estimated Stabilized NOI LTM NOI Achieved Incremental NOI $137M - $34M = $103M Completed Projects by Q1 2025 Same Store Pool Project Count LTM NOI (in millions) Same Warehouse Pool 12 $27 Non-Same Warehouse Pool 10 $7 Total 22 $34
Page 18
181. Stated maturity dates assume the exercise of extension options. 2. RCF interest rate is inclusive of the 0.15% facility fee which is applied to the full $3.5 billion capacity. Debt Summary DEBT DETAIL As of March 31, 2025 (in millions) Balance Contracted Interest Rate Stated Maturity Date1 Unsecured Revolving Credit Facility2 $1,962 SOFR + 0.10% + 0.925% 2/15/2029 Unsecured Term Loan – Floating 1,000 SOFR + 0.10% + 0.925% 2/15/2029 Total Unsecured Loans $2,962 Private Placement (USD Tranches) – Series A and B 675 2.39% Various Private Placement (EUR Tranches) – Series C, D, G, H and I 670 2.06% Various Private Placement (GBP Tranches) – Series E and F 356 2.05% Various Fuentes 16 Various Various Total Unsecured Notes $1,717 Polar Chicago Real Estate 20 4.30% 6/6/2025 PFS Westfield Real Estate 20 4.78% 12/11/2026 Total CMBS $40 Every Bear 228 4.51% 10/10/2028 Richland (Incl. Expansion) 162 4.10% 1/1/2026 Cool Port 81 SOFR + 1.77% 3/5/2029 Other 8 Various Various Total Other Real Estate Secured Debt $479 Equipment Financing 1 Various Total Debt $5,199 Current Portion Long-Term Debt (55) Deferred Financing Costs (12) Below-Market Debt (4) Above-Market Debt 2 Total Long-Term Debt, Net $5,130 Current Portion Long-Term Debt 55 Total Debt, Net $5,185 Finance Lease Obligations 1,405 Failed sale-leaseback financing obligations 69 Kloosterboer preference shares 260 Total Debt and Debt-Like Obligations $6,919 Deferred Financing Costs 12 Above/Below Market Debt, Net 2 Gross Debt $6,933 Less: Money Market Fund (104) Less: Remaining Available Cash and Cash Equivalent (91) Net Debt $6,738
Page 19
DEBT COMPOSITION Debt Summary 19Note: As of March 31, 2025. USD $3,872 74% Other 1,327 26% Secured $520 10% Unsecured $4,679 90% Fixed $2,156 42% Floating - Unhedged $543 10% Floating - Hedged $2,500 48% Fixed vs Floating Secured vs Unsecured By Currency $M $M $M $M $1,962 $1,000 $630 $550 $119 $326 $162 $228 $42 $793 $90 $778 $3,168 $328 2025 2026 2027 2028 2029 2030+ Revolver Term Loan A Other Unsecured Debt Real Estate Secured Debt Equipment Financing Other Secured Debt Debt Maturity
Page 20
INTEREST EXPENSE SUMMARY Debt Summary 20 1. Stated maturity dates assume the exercise of extension options. Interest Expense (in millions) Current Rate Maturity1 Q1 2025 Revolver S + 10bps + 0.925% 2/15/2029 $ 25 Term Loan A S + 10bps + 0.925% 2/15/2029 13 Private Placement Notes Various Various 9 Oakland Cool Port Financing S + 1.76% 5/5/2029 1 Other Debt Various Various 9 Total Gross Interest Expense $ 57 Gain on hedge instruments (19) Capitalized interest (3) Interest income (2) Amortization of deferred financing costs and other financing fees 3 Finance lease liabilities interest 24 Interest Expense, net $ 60
Page 21
RECURRING MAINTENANCE CAPITAL EXPENDITURES Capital Expenditures and Acquisitions 21 (in millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YoY Change Global warehousing $20 $34 $38 $57 $29 45.0 % Global integrated solutions $5 $4 $1 $11 $1 (80.0) % Information technology and other $5 $10 $6 $4 $2 (60.0) % Recurring maintenance capital expenditures $30 $48 $45 $72 $32 6.7 % INTEGRATION CAPITAL EXPENDITURES (in millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YoY Change Global warehousing $8 $10 $14 $33 $8 — % Global integrated solutions $– $1 $– $2 $– — % Information technology and other $9 $4 $5 $8 $4 (55.6) % Integration capital expenditures $17 $15 $19 $43 $12 (29.4) % EXTERNAL GROWTH CAPITAL EXPENDITURES, EXCLUDING ACQUISITIONS (in millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YoY Change Greenfield and expansion expenditures $36 $95 $66 $73 $37 2.8 % Energy and economic return initiatives $22 $25 $24 $18 $16 (27.3) % Information technology transformation and growth initiatives $12 $15 $23 $5 $14 16.7 % External growth capital investments $70 $135 $113 $96 $67 (4.3) % TOTAL CAPITAL EXPENDITURES AND ACQUISITIONS (in millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YoY Change Recurring maintenance capital expenditures $30 $48 $45 $72 $32 6.7 % Integration capital expenditures $17 $15 $19 $43 $12 (29.4) % External growth capital investments $70 $135 $113 $96 $67 (4.3) % Total capital expenditures $117 $198 $177 $211 $111 (5.1) % Acquisitions, including equity issued and net of cash acquired and adjustments $59 $14 $40 $233 $— (100.0) % Total capital expenditures and acquisitions $176 $212 $217 $444 $111 (36.9) %
Page 22
Repair and Maintenance Expenses 22 (in millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YoY Change Global warehousing $33 $36 $40 $35 $34 3.0% Global integrated solutions $14 $13 $13 $14 $13 (7.1)% Repair and maintenance expenses $47 $49 $53 $49 $47 — %
Page 23
HISTORICAL UTILIZATION AND MINIMUM STORAGE GUARANTEES Global Warehouse Segment 23 80.4% 76.8% 77.8% 77.3% 76.7% 77.2% 79.1% 83.4% 81.9% 79.8% 77.7% 80.8% 77.6% 76.6% 75.4% 78.1% 75.4% 84.5% 81.1% 82.6% 81.3% 80.2% 81.0% 83.7% 87.7% 87.3% 85.1% 84.3% 87.2% 83.6% 82.9% 82.0% 83.9% 81.0% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Physical Utilization Economic Utilization Average Economic and Physical Occupancy in Our Global Warehousing Segment 41.8% 43.5% 43.9% 44.0% 42.0% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 20. 0% 25. 0% 30. 0% 35. 0% 40. 0% 45. 0% 50. 0% Contracts with Minimum Storage Guaranteed & Lease Revenue (as % of Rent and Storage Revenue)
Page 24
HISTORICAL SAME WAREHOUSE NOI GROWTH – AS REPORTED Global Warehouse Segment 241. As reported. Same Warehouse NOI – Recent Trend1 Q1 Q2 Q3 Q4 FY 2023 22.5% 19.0% 11.0% 9.0% 15.3% 2024 (2.9)% (2.3)% 2.4% 1.2% (0.6)% 2025 (7.9)%
Page 25
Consolidated Balance Sheets 25 March 31, December 31, (in millions, except par values) 2025 2024 (unaudited) Assets Current assets: Cash, cash equivalents, and restricted cash $ 197 $ 175 Accounts receivable, net 847 826 Inventories 175 187 Prepaid expenses and other current assets 171 97 Total current assets 1,390 1,285 Non-current assets: Property, plant, and equipment, net 10,644 10,627 Finance lease right-of-use assets, net 1,231 1,254 Operating lease right-of-use assets, net 618 627 Equity method investments 128 124 Goodwill 3,379 3,338 Other intangible assets, net 1,116 1,127 Other assets 262 279 Total assets $ 18,768 $ 18,661 Liabilities, Redeemable Noncontrolling Interests, and Equity Current liabilities: Accounts payable and accrued liabilities $ 1,132 $ 1,220 Accrued dividends and distributions 134 134 Deferred revenue 84 83 Current portion of long-term debt, net 55 56 Total current liabilities 1,405 1,493 Non-current liabilities: Long-term finance lease obligations 1,240 1,249 Long-term operating lease obligations 598 605 Deferred income tax liability 324 304 Long-term debt, net 5,130 4,906 Other long-term liabilities 425 410 Total liabilities 9,122 8,967 Commitments and contingencies (Note 16) Redeemable noncontrolling interests 41 43 Stockholders’ equity: Common stock, $0.01 par value per share – 500 authorized shares; 228 issued and outstanding atMarch 31, 2025 and December 31, 2024 2 2 Additional paid-in capital - common stock 10,791 10,764 Retained earnings (accumulated deficit) (1,976) (1,855) Accumulated other comprehensive income (loss) (231) (273) Total stockholders’ equity 8,586 8,638 Noncontrolling interests 1,019 1,013 Total equity 9,605 9,651 Total liabilities, redeemable noncontrolling interests, and equity $ 18,768 $ 18,661
Page 26
Consolidated Statements of Operations 26 Three Months Ended March 31, (in millions, except per share amounts) 2025 2024 (unaudited) Net revenues $ 1,292 $ 1,328 Cost of operations 876 884 General and administrative expense 154 124 Depreciation expense 158 158 Amortization expense 54 53 Acquisition, transaction, and other expense 15 8 Restructuring, impairment, and (gain) loss on disposals (21) — Total operating expense 1,236 1,227 Income from operations 56 101 Other income (expense): Equity income (loss), net of tax (4) (2) Gain (loss) on foreign currency transactions, net 16 (11) Interest expense, net (60) (139) Gain (loss) on extinguishment of debt — (7) Total other income (expense), net (48) (159) Net income (loss) before income taxes 8 (58) Income tax expense (benefit) 8 (10) Net income (loss) — (48) Less: Net income (loss) attributable to noncontrolling interests — (8) Net income (loss) attributable to Lineage, Inc. $ — $ (40) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on foreign currency hedges and interest rate hedges (17) 3 Foreign currency translation adjustments 64 (74) Comprehensive income (loss) 47 (119) Less: Comprehensive income (loss) attributable to noncontrolling interests 5 (16) Comprehensive income (loss) attributable to Lineage, Inc. $ 42 $ (103) Basic earnings (loss) per share $ 0.01 $ (0.28) Diluted earnings (loss) per share $ 0.01 $ (0.28) Weighted average common shares outstanding: Basic 228 162 Diluted 228 162
Page 27
Consolidated Statements of Cash Flows 27 Three Months Ended March 31, 2025 2024 (unaudited) Cash flows from operating activities: Net income (loss) $ — $ (48) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Provision for credit losses 1 1 Impairment of long-lived and intangible assets 1 — Gain on insurance recovery (see Note 16, Commitments and contingencies) (24) — Depreciation and amortization 212 211 (Gain) loss on extinguishment of debt, net — 7 Amortization of deferred financing costs and above/below market debt 2 6 Stock-based compensation 40 5 (Gain) loss on foreign currency transactions, net (16) 11 Deferred income tax 11 (23) Put Options fair value adjustment 2 — Proceeds from insurance recoveries - business interruption (see Note 16, Commitments and contingencies) 8 — Other operating activities 2 3 Changes in operating assets and liabilities (excluding effects of acquisitions): Accounts receivable (24) 36 Prepaid expenses, other assets, and other long-term liabilities (39) (21) Inventories 12 2 Accounts payable and accrued liabilities and deferred revenue (51) (83) Right-of-use assets and lease obligations 2 (2) Net cash provided by operating activities $ 139 $ 105 Cash flows from investing activities: Acquisitions, net of cash acquired — (59) Deposits on pending acquisitions and related refunds, net — 2 Purchase of property, plant, and equipment (151) (147) Proceeds from sale of assets 2 2 Proceeds from insurance recovery on impaired long-lived assets 17 — Investments in Emergent Cold LatAm Holdings, LLC (7) (5) Other investing activity 1 5 Net cash used in investing activities $ (138) $ (202)
Page 28
Consolidated Statements of Cash Flows (continued) 28 Three Months Ended March 31, 2025 2024 (unaudited) Cash flows from financing activities: Dividends and other distributions $ (134) $ (112) Redemption of redeemable noncontrolling interests — (6) Financing fees — (44) Proceeds from long-term debt — 81 Repayments of long-term debt and finance leases (25) (972) Payment of deferred and contingent consideration liabilities (2) — Borrowings on revolving line of credit 582 1,837 Repayments on revolving line of credit (398) (632) Redemption of common stock — (25) Other financing activity (2) (6) Net cash provided by financing activities $ 21 $ 121 Impact of foreign exchange rates on cash, cash equivalents, and restricted cash — (1) Net increase (decrease) in cash, cash equivalents, and restricted cash 22 23 Cash, cash equivalents, and restricted cash at the beginning of the period $ 175 $ 71 Cash, cash equivalents, and restricted cash at the end of the period $ 197 $ 94 Supplemental disclosures of cash flow information: Cash paid for taxes $ 1 $ 9 Cash paid for interest 86 161 Noncash activities: Purchases of property, plant, and equipment in Accounts payable and accrued liabilities 78 73 Accrued dividends, distributions, and dividend equivalents 135 11 Assets acquired through exercise of a purchase option in a finance lease 11 —
Page 29
29 Appendix: Non-GAAP Reconciliations
Page 30
NOI RECONCILIATION TO NET INCOME Non-GAAP Reconciliations 20 Note: See "Non-GAAP Financial Measures" for additional information regarding these non- GAAP financial measures. 1. NOI Margin is calculated as NOI divided by revenues. 2. Reflects year-over-year growth for each respective period. Three Months Ended March 31, (in millions) 2022 2023 2024 2025 Net Income (Loss) $1 $19 $(48) $— Stock-based compensation expense in cost of operations — — — 1 General and administrative expense 88 115 124 154 Depreciation expense 117 129 158 158 Amortization expense 49 52 53 54 Acquisition, transaction, and other expenses 19 11 8 15 Restructuring, impairment, and (gain) loss on disposals — 4 — (21) Equity (income) loss, net of Tax — — 2 4 (Gain) loss on foreign currency transactions, net (3) 1 11 (16) Interest expense, net 66 115 139 60 (Gain) loss on extinguishment of Debt — — 7 — Income tax expense (benefit) — (3) (10) 8 NOI $337 $443 $444 $417 Net revenues $1,127 $1,333 $1,328 $1,292 NOI Margin1 29.9 % 33.2 % 33.4 % 32.3 % NOI Growth2 31.5 % 0.2 % (6.1)%
Page 31
NOI RECONCILIATION TO NET INCOME - LAST FIVE QUARTERS (Q1 2025 Pool) Non-GAAP Reconciliations 31Notes: Same Warehouse figures based on the Q1 2025 Same Store asset pool. See "Non -GAAP Financial Measures" for additional infor mation regarding these non- GAAP financial measures. (in millions) March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 Net Income (Loss) $(48) $(80) $(543) $(80) $— Stock-based compensation expense in cost of operations — — 1 2 1 General and administrative expense 124 127 143 145 154 Depreciation expense 158 164 156 181 158 Amortization expense 53 55 54 55 54 Acquisition, transaction, and other expenses 8 12 592 39 15 Restructuring, impairment, and (gain) loss on disposals — 15 8 34 (21) Equity (income) loss, net of Tax 2 1 — 3 4 (Gain) loss on foreign currency transactions, net 11 (2) (14) 30 (16) Interest expense, net 139 148 82 61 60 (Gain) loss on extinguishment of debt 7 — 6 4 — Other nonoperating (income) expense, net — — (1) 2 — Income tax expense (benefit) (10) 7 (45) (41) 8 Total segment NOI $444 $447 $439 $435 $417 NOI by Segment Global warehousing NOI $385 $384 $383 $382 $360 Global integrated solutions NOI 59 63 56 53 57 Total segment NOI $444 $447 $439 $435 $417 Global warehousing NOI Same warehouse NOI (Q1 2025 pool) $366 $367 $368 $363 $337 Non-same warehouse NOI 19 17 15 19 23 Total global warehousing NOI $385 $384 $383 $382 $360 Same store warehouses (Q1 2025 pool) 427 427 427 427 427
Page 32
ADJUSTED EBITDA RECONCILIATION TO NET INCOME QTD Non-GAAP Reconciliations 22Note: See "Non-GAAP Financial Measures" for additional information regarding these non- GAAP financial measures. Three Months Ended March 31, (in millions) 2022 2023 2024 2025 Net Income (loss) $1 $19 $(48) $— Adjustments: Depreciation and amortization expense $166 $181 $211 $212 Interest expense, net 66 115 139 60 Income tax expense (benefit) — (3) (10) 8 EBITDA $233 $312 $292 $280 Adjustments: Net loss (gain) on sale of real estate assets — 2 — — Impairment write-downs on real estate property — 1 — — Allocation of EBITDAre of noncontrolling interests (1) (2) (1) — EBITDAre $232 $313 $291 $280 Adjustments: Net (gain) loss on sale of non-real estate assets $— $(1) $(1) $(2) Other nonoperating (income) expense, net — — — — Acquisition, restructuring, and other 19 14 9 17 Technology transformation — — 3 5 (Gain) loss on property destruction — — — (24) (Gain) loss on foreign currency transactions, net (3) 1 11 (16) Stock-based compensation expense 4 5 5 40 (Gain) loss on extinguishment of debt — — 7 — Non-real estate impairment — — — 1 Allocation related to unconsolidated JVs 2 2 1 3 Allocation adjustments of noncontrolling interests — — 1 — Adjusted EBITDA $254 $334 $327 $304 Net revenues $1,127 $1,333 $1,328 $1,292 Adjusted EBITDA as a % of Revenue 22.5 % 25.1 % 24.6 % 23.5 % Adjusted EBITDA Growth 31.5 % (2.1)% (7.0)%
Page 33
ADJUSTED EBITDA RECONCILIATION TO NET INCOME - LAST TWELVE MONTHS (LTM) Non-GAAP Reconciliations 33Note: See "Non-GAAP Financial Measures" for additional information regarding these non- GAAP financial measures. Three Months Ended Twelve Months Ended (in millions) June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 March 31, 2025 Net Income (loss) $(80) $(543) $(80) $— $(703) Adjustments: Depreciation and amortization expense 219 210 236 212 877 Interest expense, net 148 82 61 60 351 Income tax expense (benefit) 7 (45) (41) 8 (71) EBITDA $294 $(296) $176 $280 $454 Adjustments: Net loss (gain) on sale of real estate assets 3 2 5 — 10 Impairment write-downs on real estate property 5 4 2 — 11 Allocation of EBITDAre of noncontrolling interests — (1) 1 — — EBITDAre $302 $(291) $184 $280 $475 Adjustments: Net (gain) loss on sale of non-real estate assets (1) — 1 (2) (2) Other nonoperating (income) expense, net — (1) 2 — 1 Acquisition, restructuring, and other 17 470 46 17 550 Technology transformation 7 5 7 5 24 (Gain) loss on property destruction 1 (5) (47) (24) (75) (Gain) loss on foreign currency transactions, net (2) (14) 30 (16) (2) Stock-based compensation expense 6 160 44 40 250 (Gain) loss on extinguishment of debt — 6 4 — 10 Non-real estate impairment — — — 1 1 Impairment of intangible assets — — 63 — 63 Allocation related to unconsolidated JVs 4 4 2 3 13 Allocation adjustments of noncontrolling interests — (1) (1) — (2) Adjusted EBITDA $334 $333 $335 $304 $1,306
Page 34
ADJUSTED FFO RECONCILIATION TO NET INCOME QTD Non-GAAP Reconciliations 34Note: See "Non-GAAP Financial Measures" for additional information regarding these non- GAAP financial measures. Three Months Ended March 31, 2022 2023 2024 2025 Net Income (loss) $1 $19 $(48) $— Adjustments: Real estate depreciation $71 $80 $85 $85 In-place lease intangible amortization 2 2 2 1 Net loss (gain) on sale of real estate assets — 2 — — Impairment write-downs on real estate property — 1 — — Real estate depreciation, (gain) loss on sale of real estate and real estate impairments on unconsolidated JVs 1 1 1 1 Allocation of noncontrolling interests — — (1) — FFO $75 $105 $39 $87 Adjustments: Net (gain) loss on sale of non-real estate assets $— $(2) $(1) $(2) Finance lease ROU asset amortization - real estate related 19 17 18 18 Non-real estatement impairment — — — 1 Other nonoperating (income) expense, net — — — — Acquisition, restructuring, and other 19 15 9 20 Technology transformation — — 3 5 (Gain) Loss from property destruction — — — (24) (Gain) loss on foreign currency transactions, net (3) 1 11 (16) (Gain) loss on extinguishment of debt — — 7 — Core FFO $110 $136 $86 $89 Adjustments: Non-real estate depreciation and amortization $70 $75 $100 $100 Finance lease ROU asset amortization - non-real estate 4 6 7 8 Amortization of deferred financing costs 4 5 6 3 Amortization of debt discount / premium — 1 — (1) Deferred income taxes expense (benefit) 1 (15) (23) 11 Straight line net operating rent 1 1 (2) 1 Amortization of above / below market leases — — — — Stock-based compensation expense 4 4 5 40 Recurring maintenance capital expenditures (26) (30) (30) (32) Allocation related to unconsolidated JVs — — 1 1 Allocation of noncontrolling interests (1) (1) (2) (1) Adjusted FFO $167 $182 $148 $219 Reconciliation of weighted average common shares outstanding: Weighted average common shares outstanding 148 162 162 228 Partnership common units and OP units held by Non-Company LPs 20 20 20 22 Equity compensation and other unvested units — — — 6 Adjusted diluted weighted average common shares outstanding 168 182 182 256 Adjusted FFO per diluted common share $0.99 $1.00 $0.81 $0.86
Page 35
NET DEBT RECONCILIATION Non-GAAP Reconciliations 35Note: See "Non-GAAP Financial Measures" for additional information regarding these non- GAAP financial measures. As of March 31, (in millions) 2025 Total debt, net $5,185 Finance lease obligations 1,405 Failed sale-leaseback financing obligations 69 Kloosterboer preference shares 260 Total debt and debt-like obligations $6,919 Deferred financing costs 12 Above/below market debt, net 2 Gross debt $6,933 Less: Cash and cash equivalents (excluding restricted cash) 195 Net debt $6,738 Adjusted EBITDA (for the twelve months ended) $1,306 Net debt to Adjusted EBITDA 5.2x
Page 36
We use the following non-GAAP financial measures as supplemental performance measures of our business: segment NOI, FFO, Core FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Adjusted EBITDA margin, and net debt. We also use same warehouse and non-same warehouse metrics. We calculate total segment NOI as our total revenues less our cost of operations (excluding any depreciation and amortization , general and administrative expense, stock-based compensation expense, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense. We us e segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with ASC 280, Segment Reporting. We believe segment NOI is helpful to inves tors as a supplemental performance measure to net income because it assists both investors and management in understanding the core operations of our business. There is no industry definition of segment N OI and, as a result, other REITs may calculate segment NOI or other similarly- captioned metrics in a manner different than we do. We calculate “same warehouse NOI” as revenues for the same warehouse population less its cost of operations (excluding any depreciation and amortization, general and administrative expenses, stock-based compensation expense, restructuring and impairment expense, gains and losses on sale of assets, and acquisition, transaction, and other expense). We evaluate the performance of the warehouses we own, lease, or manage using a “same warehouse” analysis, and we believe that same warehouse NOI is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period, thereby eliminating the effects of changes in the composition of our warehouse portfolio on performance measures. We calculate EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defined as earnings before interest income or expense, taxes, depreciation and amortization, net loss or gain on sale of real estate, net o f withholding taxes, impairment write-downs on real estate property, and adjustments to reflect our share of EBITDAre of partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and useful life of related assets among otherwise comparable companies We also calculate our Adjusted EBITDA as EBITDAre further adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), other nonoperating income or expense, acquisition, restructuring, and other expense, foreign currency exchange gain or loss, stock-based compensation expense, loss or gain on debt extinguishment and modification, impairment of investments in non-real estate, technology transformation, and reduction in EBITDAre from partially owned entities. We believe that the presentation of Adjusted EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are other wise included in EBITDAre but which we do not believe are indicative of our core business operations. EBITDAre and Adjusted EBITDA are not measurements of financial performance under GAAP, and our EBITDAre and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Adjusted EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Our calculations of EBITDAre and Adjusted EBITDA have limitations as analytical tools, including the following: • these measures do not reflect our historical or future cash requirements for maintenance capital expenditures or growth and e xpansion capital expenditures; • these measures do not reflect changes in, or cash requirements for, our working capital needs; • these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments , on our indebtedness; • these measures do not reflect our tax expense or the cash requirements to pay our taxes; and • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements. We use EBITDA, EBITDAre and Adjusted EBITDA as measures of our operating performance and not as measures of liquidity. We also calculate Adjusted EBITDA margin, which represents Adjusted EBITDA as a percentage of Net revenues and which provides an additional way to compare the above-described measure of our operations across periods. (continued on following slide) Non-GAAP Financial Measures 36
Page 37
(continued) We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the NAR EIT. NAREIT defines FFO as net income or loss determined in accordance with GAAP, excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, in-place lease intangible amortization, real estate asset impairment, and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization, and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We calculate core funds from operations, or Core FFO, as FFO adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), finance lease ROU asset amortization real estate, non-real estate impairments, acquisition, restructuring and other, other nonoperating income or expense, loss on debt extinguishment and modifications and the effects of gain or loss on foreign currency exchange. We also adjust for the impact attributable to non-real estate impairments on unconsolidated joint ventures and natural disaster. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential. However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of recurrin g maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the ut ility of FFO and Core FFO as a measure of our performance may be limited. We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred f inancing costs, amortization of debt discount/premium amortization of above or below market leases, straight-line net operating rent, provision or benefit from deferred income taxes, stock-based compensation expense from grants under our equity incentive plans, non-real estate depreciation and amortization, non-real estate finance lease ROU asset amortization, and recurring maintenance capital expenditures. We also adjust for Adjusted FFO attributable to our share of reconciling items of partially owned entities. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities. FFO, Core FFO, Adjusted FFO, and Adjusted FFO per diluted share are used by management, investors and industry analysts as suppl emental measures of operating performance of equity REITs. FFO, Core FFO, Adjusted FFO, and Adjusted FFO per diluted share should be evaluated along with GAAP net income and net income per diluted share (the most directly comparable GAAP measures) in evaluating our operating performance. FFO, Core FFO, and Adjusted FFO do not represent net income or cash flows from operating activities in accordanc e with GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our condensed consolidated financial statements included elsewhere in this Quarterly Report. FFO, Core FFO, and Adjusted FFO should be considered as supplements, but not alternatives, to our net income or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculate d by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do. We are not able to provide forward-looking guidance for certain financial data that would make a reconciliation from the most comparable GAAP measure to non-GAAP financial measure for forward-looking Adjusted EBITDA and Adjusted FFO per share possible without unreasonable effort. This is due to unpredictable nature of relevant reconciling items from fa ctors such as acquisitions, divestitures, impairments, natural disaster events, restructurings, debt issuances that have not yet occurred, or other events that are out of our contr ol and cannot be forecasted. The impact of such adjustments could be significant. We calculate net debt as our gross debt (defined as total debt, net plus finance lease obligations, failed sale-leaseback financing obligations, deferred financing costs, above/below market debt, net and the Kloosterboer preference shares), less cash and cash equivalents. Adjusted net debt to Adjusted EBITDA is calculated using adjusted net de bt as of period end divided by Adjusted EBITDA for the twelve months then ended. We use this ratio to evaluate our capital structure and financial leverage. This ratio is also commonly used in our industry, and we believe it provides investors, lenders and rating agencies a meaningful supplemental measure of our ability to repay and service our debt obligations. Other REITs may also calculate this ratio or other similarly-captioned metrics in a manner different than we do. Non-GAAP Financial Measures 37
Page 38
CONTACTCONTACT Thank you 38 Evan Barbosa VP , Investor Relations ir@onelineage.com