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Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:00 a.m. ET Head of Investor Relations - Ki Bin Kim President and Chief Executive Officer - Greg Lehmkuhl Chief Financial Officer - Robb LeMasters Operator: Hello, everyone. Thank you for joining us, and welcome to the Lineage Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Ki Bin Kim, Head of Investor Relations. Please go ahead. Ki Bin Kim: Thank you. Welcome to Lineage's discussion of the second quarter 2026 financial results. Joining me today are Greg Lehmkuhl, Lineage's President and Chief Executive Officer; and Robb LeMasters, Chief Financial Officer. Our earnings presentation, which includes supplemental financial information, can be found on our Investor Relations website at ir.onelineage.com. Following management's prepared remarks, we'll be happy to take your questions. Before we start, I would like to remind everybody that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our filings with the SEC. These risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. In addition, reference will be made to certain non-GAAP financial measures. Information regarding our use of these measures and reconciliation of non-GAAP to GAAP measures can be found in our press release and supplemental package that was issued this morning. Unless otherwise noted, reported figures are rounded and comparisons of the second quarter of 2026 are to the second quarter of 2025. Now I would like to turn the call over to Greg. W. Lehmkuhl: Thanks, Ki Bin, and good morning, everyone. Let me walk through our agenda for this morning. First, I'll provide key highlights from the second quarter, then I'll share our latest views on cold storage industry dynamics. Following my remarks, I'll turn it over to Robb LeMasters, who will walk through the details of our segment performance, capital structure and outlook. I'll then return to share closing comments before we open up the line for your questions. Turning to our quarterly performance on Slide 4. We are pleased to report another quarter of better-than-expected results. Operational trends continue to show signs of stabilization, and this quarter marks another step forward in demonstrating our ability to execute on our plan and navigate the industry challenges highlighted in past calls. During the second quarter, adjusted EBITDA was approximately $320 million, ahead of both our internal expectations and consensus estimates. Total AFFO was approximately $198 million or $0.76 per share, also ahead of expectations. As a reminder, the year-over-year decline in AFFO continues to be driven primarily by the expiration of prior year interest rate hedges consistent with our 2026 guidance. On a comparable basis, excluding this impact, underlying AFFO trends are showing meaningful improvement. Turning to core operations. Let's start with the solid results in our warehousing segment. We're pleased to see growth in same-store physical occupancy this quarter, increasing 90 basis points year-over-year. This is a welcome inflection point following last quarter's slight decline and the larger declines we saw throughout 2025. This reflects our ability to grow share despite competition, a function of our industry-leading offerings we'll discuss in a moment. The sequential occupancy trends were slightly better than normal seasonality and economic occupancy continued to track at a consistent spread to physical occupancy. Same-store rent, storage and blast revenue per physical pallet declined 0.7% year-over-year, while services revenue per throughput pallet increased 2.1%. As we've explained in the past, customer commodity and geographic mix, along with FX create some quarter-to-quarter noise in these metrics. So we tend to view them on a combined and trended basis versus a short-term proxy for pricing trends. Robb will go into more detail, but we've completed the significant majority of our 2026 customer pricing discussions and remain confident in the 1% to 2% net pricing increase we previously discussed. We remain encouraged by the strong execution of our sales team, particularly given the current environment. I'll reiterate that our full year outlook for revenue per pallet is unchanged. We still expect to be slightly down, consistent with prior guidance. That reflects the trade-related and mix headwinds we've called out on previous calls, which have broadly played out as expected. Turning to volume. Same-store throughput pallets declined 1.8% year-over-year. We continued to experience pressure in Q2 on higher turning trade-related port volumes with container volumes down 14% in the quarter. While this quarter's pace of decline represents an improvement relative to the declines we experienced in Q1. I'd remind you that customer product mix can always play a role quarter-to-quarter. So this doesn't represent a change to how we see the full year playing out. I'd also remind you that we adjust labor according to mix and service activity, allowing us to react quickly to optimize cost as mix changes. Overall, same-store NOI declined 2.9% year-over-year continued improvement from the steeper declines we saw throughout 2025. Compared to the prior quarter, that's a wider decline in Q1's negative 0.9%, which is mostly explained by the step-down in FX benefit roughly 250 basis points in Q1 to about 90 basis points this quarter as well as Q1's elevated international services activity that we called out last quarter. Before turning to our outlook, I want to briefly discuss the fire we had at our Big Bear facility in Los Angeles during the quarter. I want to sincerely thank our team members on the ground for their extraordinary response along with the first responders who act quickly to protect the surrounding community. Safety remains our top priority, and I'm incredibly proud of our team and how they're handling this very challenging situation. As part of our response, we committed over $3.3 million to local nonprofits through direct assistance to support the local community during the cleanup and remediation efforts. Robb will provide more details in his remarks. Turning to our outlook. We have maintained our adjusted EBITDA midpoint while narrowing the range despite the impact of the Big Bear fire. We're also raising our full year same-store NOI guidance to a range of negative 3% to 0% and increasing our AFFO guidance to $2.80 to $3.05 per share. The underlying trajectory of our business through the first half has been encouraging. Operations are performing better than expected, and the signs of stabilization we've highlighted over the past couple of quarters have continued. That said, the operating environment still includes some challenges, competitive dynamics in certain domestic markets and trade-related volume headwinds, but we're encouraged by our results in the face of these obstacles. The overall direction is positive, and we have the building blocks in place through pricing discipline, productivity initiatives and the contribution of our past investments in people, process and technology. I also want to spend a moment on something that I think it's overlooked, the strength of geographic diversification. This year and last year, our APAC, European and Canadian business have been a real source of stability. We haven't experienced the same headwinds we've dealt with here in the U.S., and we continue to extend our leadership position in each of these respective markets, built on the same customer service and value that has become our global hallmark. I'm excited about the trajectories in these portfolios and proud of the teams driving such solid results. As a reminder, we have 20 facilities under construction or in the process of ramping and stabilizing. We've invested $1.1 billion of capital into these projects and expect them to deliver over $134 million incremental NOI when stabilized. Non-same-store contribution in the second quarter came in better than expected, given the strong continued customer demand for our high-quality modern assets, you'll also notice in our updated development pipeline disclosure that our pre-leased levels stand at 71%. Moving to Slide 5, U.S. supply and demand trends. This slide revisits the 3 primary headwinds we faced in the recent past: supply and demand, inventory destocking and trade impacts. I'll move quickly as we've covered each of these in detail on prior calls. We still see pockets of pressure from new supply and about 15% of our U.S. markets, but broader stabilization trends are holding. We are better equipped to fend off competitors as customers increasingly recognize our superior value proposition and operational excellence. Looking ahead, slowing supply growth, asset repurposing, potential competitor exits or bankruptcies and asset obsolescence should help offset the excess capacity overhang. We're also managing supply proactively through selected facility idling. The second headwind, customer inventory destocking affected all of our North American business, levels that built up during COVID have since reset closer to historical norms. Finally, our third headwind is import-export volumes pulling back on the tariff uncertainty. International container volumes, which are about 15% of our warehouse throughput, stay pressured in Q2, and we remain cautious given the ongoing political concerns. Notably, incremental international volume is highly margin accretive given the strong services attachment and network operating leverage. We expect to begin lapping 2025 steep volume declines in late Q3 into Q4, easing the headwind as the year closes. Longer term, we expect U.S. agricultural trade to again become a tailwind. Beyond tariff resolution, there are several upside factors not embedded in our guidance, normalizing food inflation, easing political uncertainty, new product categories and lower interest rates, any of which could meaningfully move the needle over time. So taken together, supply is stabilizing, destocking is behind us and trade is a headwind that we expect to lap by year-end. None of these are structural, they're cyclical, and each is now moving in our direction. It's the same story of the past few decades at cold storage. Food demand doesn't go away, and we are the critical infrastructure that enables it. We like our position as we continue to turn the corner. Moving to Slide 6. In navigating some of these macro challenges, we've doubled down on driving costs out of our operating cost base, allowing us to outperform industry inflation by 750 basis points. The Lineage operating platform and our lean continuous improvement approach are a big part of why we've been able to hold adjusted EBITDA stable year-over-year through the first half of 2026, following a challenging 2025. The team continues to impress me by finding new ways to land new business while aggressively managing our cost to drive profitability. And with that, let me turn it over to Robb LeMasters, who will give you more detail on the quarter and some comments on our revised outlook. Robb LeMasters: Thanks, Greg, and good morning, everyone. Starting with Slide 7. In our Global Warehouse segment, second quarter total warehouse NOI was approximately $367 million and same-store NOI declined 2.9% year-over-year, both ahead of our expectations. In Q2, same-store NOI benefited by 90 basis points from favorable FX year-over-year as we contemplated in our previously provided outlook. Looking forward, we expect FX to be a relatively minor year-over-year factor for the balance of 2026. Within the same warehouse pool, rent, storage and blast revenue per physical pallet declined approximately 0.7% year-over-year, while same-store physical occupancy improved 0.9%, reflecting strong commercial execution by our sales team. That team has built deep relationships in the food space and is now extending the reach of our sophisticated cold storage and logistics offerings into adjacent cold chain categories. As Greg mentioned last call, we secured a key confectionery account win that launched successfully in June. That ramp is off to a strong start, and we expect continued momentum from this and other candy customers, positioning confectionery as a top 10 category for us over time. Turning to services. Throughput and services revenue per throughput pallet both came in slightly ahead of our expectations for the quarter. A favorable mix helped offset what continues to be a challenging volume environment tied to trade-related headwinds. As we look to the back half, the comparisons do get a bit easier in the second half of the third quarter and then for the full Q4 as we lap last year's post liberation days downdraft. That said, we expect the mix tailwind that benefited Q2 to fade. Netting those 2 dynamics together, we continue to expect full year throughput and service metrics to be down modestly, consistent with our prior expectations for the full year. Shifting to Slide 8 to our Global Integrated Solutions segment. GIS NOI was $61 million. Excluding the impact of last year's Spain transportation disposition, the segment saw solid underlying revenue growth of 5%, driven by continued momentum in our U.S. transportation and foodservice businesses. While the underlying revenue growth was solid, 2 items impacted margins during the quarter. First, accelerating truckload and LTL carrier rates, which we passed through to customers, but at a lag, created near-term pressure. We expect margin recapture as new market rates are absorbed into customer pricing over time. The second offsetting item was a $7 million legal settlement that was not contemplated in prior guidance stemming from an employment matter from prior years. Excluding the settlement, GIS delivered solid underlying margin of 19%. Together, these drove a lower NOI for the quarter, and we're lowering our full year GIS NOI outlook to minus 4% to minus 2% from 0% to plus 2% previously. Ultimately, the strength in the transportation and foodservice markets that is driving the higher carrier rates and providing this temporary profit squeeze should actually work in our favor and drive more customers to our unique value-driven offering. Customers will increasingly look to offset carrier rate pressure with a well-priced integrated storage plus transportation solution. Turning to Slide 9, adjusted EBITDA and AFFO. Second quarter adjusted EBITDA was $320 million, which includes the impact of the legal settlement I just mentioned. Second quarter AFFO was approximately $198 million or $0.76 per share. Better-than-expected results were driven by both stronger-than-expected same-store and non-same-store NOI growth. Administrative expenses, which exclude stock-based comp, were approximately $118 million in the quarter, modestly better than expected due to the timing of certain spending and better cost management. As a result, we're tightening our full year admin guidance to $460 million to $470 million, which puts us at the lower end of our previously guided quarterly range of $120 million to $125 million for the remaining 2 quarters of 2026. On AFFO, in addition to the adjusted EBITDA beat, we benefited from favorable timing of maintenance, capital expenditures and tax items, driving a result of $0.76 per share, well above both consensus and our internal expectations. We're pleased to see both our core operations NOI and adjusted EBITDA come in ahead of expectations despite a challenging operating environment. Moving to Slide 10, capital structure. We ended the quarter with net debt of approximately $7.8 billion and total liquidity of approximately $1.6 billion. We have manageable near-term maturities and ample flexibility to address them through our revolver or other available sources of capital, supported by our strong access to both the U.S. and European public bond markets. Also, we continue to make good progress on our strategic portfolio review. We're evaluating a range of options here with the goal of increasing our financial flexibility so we can capitalize on potential M&A opportunities that market dislocations may present while maintaining a strong balance sheet to invest in future high-return opportunities alongside our customers and being able to return capital to shareholders. As we've done this work, we feel even better about the disconnect between the private and public valuations for high-quality cold storage assets. We now have firm timetables around key transactional work streams, and we're confident we'll be in a position to provide a comprehensive update by year-end. Our adjusted net debt to transaction adjusted EBITDA stands at approximately 5.3x. This metric accounts for intra-period acquisitions or dispositions and capital invested in our development pipeline that has yet to stabilize. Keep in mind that these development projects have been significantly derisked as the majority are anchored by customers with long-term commitments. For example, our new state-of-the-art fully automated project in Hazleton continues to ramp in line with our expectations. These new automated buildings are genuinely complex mega builds and Hazleton is now 1 of 25 fully automated facilities in our portfolio, reinforcing our leadership in developing and operating highly sophisticated productivity-enhancing cold storage solutions for our customers. Maintaining our investment-grade balance sheet remains a key focus for our company, and we remain committed to bringing reported leverage currently approximately 6.0x into our targeted range of 5.0x to 5.5x. Before turning to guidance, let me provide a little more detail on the Big Bear fire that Greg mentioned. As a reminder, this facility is roughly 500,000 square feet with about 85,000 pallet positions, so call it approximately 1% of our total global capacity. We moved quickly to engage our customers, and were able to address their immediate needs by shifting volume to surrounding sites. We believe the fire originated during third-party testing of the rooftop solar array, which was owned and operated by Altus. This is the only site where we have a relationship with Altus, and we're pursuing all options to hold them accountable. In the meantime, we carry insurance for exactly this kind of event, and we are working with our insurance partners to cover immediate remediation costs and the financial impact while responsibility gets fully worked out. There are really 2 areas where we expect to see an impact. First, there will be a drag on the adjusted EBITDA we had expected to deliver in Q3 and Q4. That's driven by lost revenue during the recovery period, plus incremental costs to support our customers and team members through the transition. We do expect to retain the significant majority of this business, but there's a lag before inventory fully replenishes and when we're back to the level of service our customers expect from us. We've estimated that impact at approximately $15 million of adjusted EBITDA in the guidance we provided today. Over time, we expect to recover that lost profit through our business interruption insurance, and that recovery will be recognized below the EBITDA line. To be clear, our current guidance does not contemplate any BI insurance benefit. As we get more clarity on both the costs and the recoveries, we'll provide additional color next quarter. Second, we'll incur repair and remediation costs for the building structure and freezers, along with legal fees, community support costs and other onetime items. It's too early to precisely quantify all that, but we'll exclude these costs and the offsetting insurance recoveries from adjusted EBITDA, so we keep our core operating results comparable to other periods. Moving on to our outlook. We're raising our full year 2026 guidance for same-store NOI and AFFO per share with same-store NOI growth now expected at negative 3% to flat, up from negative 4% to negative 1%. On the non-same-store NOI front, the only substantial change is Big Bear moving into that pool. So with the increase in same-store NOI offset by the Big Bear headwind, we still expect total warehouse NOI growth of negative 2% to positive 1%. Other minor changes include a slight reduction in GIS NOI from the legal settlement and temporary carrier pressure, offset by an improvement in the outlook of our admin guidance. Together, these puts and takes leave the midpoint of our EBITDA guidance unchanged. For full year 2026, AFFO per share is now expected to be $2.80 to $3.05, up from $2.75 to $3, reflecting better CapEx management from batching CapEx projects and procurement savings. We're pleased with our consistency and better-than-expected results in the first half. Our underlying trajectory of improving same-store service revenue, same-store occupancy gains and stabilizing development projects gives us a solid foundation. A few things to keep in mind on second half cadence. Quarterly and seasonal month-to-month timing is always difficult to precisely estimate, but we want to give you as much visibility as we can sitting here today for modeling purposes. First, FX is a minimal factor year-over-year in both Q3 and Q4. Second, Q3 2025 is our toughest comparison of the year. Given that, we still expect Q3 2026 same-store NOI to grow sequentially, but on a year-over-year basis, that same-store growth will likely be at its lowest reported level of the year, probably a bit below Q2 levels. Q4 is where it gets more interesting. We're lapping an easier import-export comparison from Q4 of last year. And by that point, we'll be ramping new business wins and the continued progress we are making on our key productivity initiatives. Taken together, we think that gets us close to flat year-over-year fourth quarter same-store NOI growth. On administrative expenses, which exclude stock-based compensation, we are expecting those should run toward the lower end of our previously guided quarterly range of $120 million to $125 million per quarter. On the non-same-store front, our outlook reflects continued strong contributions from 2025 acquisitions and the ramp of new developments. Netting out the Big Bear impact, we expect a non-same-store NOI run rate of approximately $20 million per quarter in both Q3 and Q4. A stabilizing supply and demand environment and a sharper focus on revenue growth, coupled with expense management and balance sheet optimization, provide a solid foundation for 2026 and positions us well for long-term growth. I'll now turn it back over to Greg to wrap up our prepared remarks. W. Lehmkuhl: Thanks, Robb. Temperature-controlled warehousing is essential infrastructure, the connected tissue linking food producers, processors, distributors and retailers. Cold storage exists to bridge the distance in time between where and when food is grown and when and where it's consumed. Data science, algorithms and AI don't change this. The turkey on your Thanksgiving table this year was almost certainly frozen in storage for months in advance. People will always need to eat and food will always need to be stored along the way. And while we're not fully insulated from every permutation that can reshape our customers' behavior, we believe the core demand for what we do is structurally durable and will grow over time. Before I wrap up, I want to spend a moment on LinOS. In the quarter, our LinOS sites expanded to 14 total conventional sites. We saw significant progress in our productivity across locations, giving us increased confidence in this investment and in achieving the goal of $110 million in EBITDA impact. In summary, this quarter's results reinforce the trajectory we've built over the past several quarters. Operations are performing better than expected, and our KPIs continue to trend positively. We're encouraged by the continued signs of stabilization in our core business and believe we're well positioned to build on this momentum in the coming quarters. Before we move to your questions, I want to sincerely thank our global team members for their continued dedication to our customers. Operator, let's open it up for questions. Operator: [Operator Instructions] Your first question comes from [indiscernible] with Goldman Sachs. Unknown Analyst: Could you go through your take on the occupancy, so that's average warehouse occupancy of 80% from 79.9% in 1Q, why that was up sequentially? I realize it's only 10 basis points, but that's compared to 2Q normally being a seasonal step down. Do you think it was a function of something you did or customer actions or policies and whether it could potentially be related to the Cyclospora outbreak? Robb LeMasters: Yes. I mean just to clarify, so year-over-year, you're exactly right. Occupancy was up year-over-year on a same-store basis, really great outcome there, first-time outcome for us since going public. So that's a great turn looking year-over-year. Sequentially, we actually saw about what we thought actually a little bit better. So we were down sequentially in terms of occupied pallets about 1%. We reviewed the USDA data, it's not perfect. Generally, it looks to be down about 3% sequentially. So we would know that, that's slightly better than what we thought on an occupancy and an occupied pallet basis. Operator: Your next question comes from the line of Steve Sakwa with Evercore ISI. Steve Sakwa: Maybe just following up on the occupancy. It's nice to certainly see things stabilizing. As you kind of look out over the next couple of years, maybe outside of taking market share, how do you sort of see both the physical and economic occupancy kind of trending for the portfolio? And what do you think is a normalized level for the Lineage portfolio? W. Lehmkuhl: Steve, thanks for your question. So on occupancy, I mean, we continue to see stability basically. We broadly believe food inventory levels are healthy and relatively balanced. That said, we have heard several customers say since the last earnings call that they're rebuilding inventories because they overcorrected during the destocking period that we've been discussing. I'm not saying that's a widespread trend, but I do believe it's another indication that inventories have at least stabilized. So I mean, I think we're back into a normal period, and we would expect outside of market share gains, consistent inventories that would reflect normal seasonality going forward. Operator: Your next question comes from the line of Michael Carroll with RBC Capital Markets. Michael Carroll: Greg, I wanted to follow up on your LinOS comments that you made at the end of prepared remarks. I know the company continues to expand this pilot program or the pilot program this year. Should we expect it to be more rolled out broadly in 2027? And when will that start to impact numbers? I mean, Robb in his prepared remarks, I believe, said that there are some productivity improvements expected in 4Q '26. Is that driven by LinOS? Or is that driven by other tech type investments the company has made? W. Lehmkuhl: Yes. Thanks for your question, Michael. So as you know, we've been successfully running LinOS in our automated buildings for some time, and we're now in the process of rolling out, as you mentioned, across our conventional warehouse network. We've mentioned in the prepared remarks, the Hazleton automated mega build. I mean this facility is delivering best-in-class service at an extremely competitive cost entirely because of our long-term investment in LinOS in data science and automation. The remaining 2 Tyson facilities that we're building right now will use the same tech and deliver similar performance. I will just throw out there that the Hazleton building is a site to see. If anyone wants to see it live, we have an amazing team there that gives a great tour. If you're interested in seeing it, just get with Ki Bin or Alex, and we'd be happy to host. But let me spend a couple of minutes on updating you on the LinOS conventional rollout. I'll start just by saying that cold storage warehouses are uniform. Every facility has its own physical footprint and product characteristics. Racking may be 2 pallets deep in one building and 4 pallets deep in another, freezer temperatures are different. Obviously, cooler temperatures are different than freezers. Product categories have very unique customer requirements. We don't handle seafood the same way we handle strawberries, for example, the docks and the yards are configured differently. And so these variations and complexity are core to our business and no doubt making building technology more challenging. But each quarter as we roll out LinOS, we encounter new requirements and learn more. We knew from the beginning that this was a major undertaking for our company, and we're clear that the progress would probably not be perfectly linear. Last quarter, on this call, we discussed that we were discovering new requirements in some of our larger buildings, while the smaller facility rollouts were going very smoothly. In Q2, the team made very significant strides in the larger buildings, and I'm proud to say that we're hitting our internal savings targets across all 14 LinOS buildings and still on track to deliver 20 conventional buildings by year-end. I mean we've been building the digital foundation to make this possible for over a decade. As you all know, we own this platform end-to-end, which we think is really important. And the fact that, frankly, this is very complex and difficult and that it's performing as designed in 14 buildings already gives us confidence that this technology will just deepen our competitive moat over time on the conventional side of the business, just like it's already done on the automated side of the business with evidence like why we won Tyson. And lastly, it takes real scale and sophistication to make this kind of investment, something that very few in our industry have, and it's one of the reasons why we feel so well positioned to continue to lead the industry. So as far as the impact this year, yes, we'll see some impact in the fourth quarter. It's not going to be -- it's not going to move the needle this year, and we'll see increasing impact in '27 and '28, and we'll share those numbers as we move forward. Operator: Your next question comes from the line of Michael Lewis with Truist Securities. Michael Lewis: Early on in the call, you mentioned some headwinds the industry has faced in recent years that are now abating, obviously, elevated supply, destocking, et cetera. I was wondering if you had an update on the impact of the GLP-1 since the usage there is still going up. I know it might be hard to parse, but any thoughts on the impact of those drugs on the food industry and on your business? W. Lehmkuhl: Yes. Great question. We hear a lot of noise around GLPs. And actually, since our last call, we've dug into the new Cornell research as well as several other independent studies, and I think the data is getting better. And so what we've learned is even under the most aggressive adoption scenarios, GLP-1 penetration lands in the mid- to high teens as a share of the adult population. Critically, the steepest calorie reductions are concentrated in snacks and packaged foods, not fresh and frozen. And so when we apply the individual commodity impacts in the study to our actual commodity mix, even the most bearish studies suggest that the impact to our business is in the very low single digits and the most current research points to something less than 1%. And so lastly, GLP-1s were designed to target obesity and diabetes, which is the fourth largest killer in the United States. And none of these steps -- none of these studies factor in the potential impact of people living longer on total food consumption. So long story short, we're going to continue to follow this data extremely closely. But based on the most contemporary research, we don't believe the GLP-1 drug will have a material impact on our business. Operator: Your next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Todd Thomas: I appreciate the commentary around new supply growth. I wanted to ask about supply. Last quarter, you commented that you thought you were past the peak impact from new supply and you and your peers have been idling warehouses. Greg, I think you mentioned functional obsolescence and you've talked also about customers sort of transitioning back to the Lineage platform assuming a relatively steady demand environment, how are you thinking about the industry's return to a tighter supply/demand balance and what that time line might look like? W. Lehmkuhl: Yes. Great question and one we've been discussing openly for several quarters now. Our view is that the cold storage industry right now is going through a real rationalization. And we think the outcome is going to be a story of winners and losers and the larger, more sophisticated providers like Lineage will be the winners. As the largest company in our industry by a significant margin, we have advantages that are very hard to replicate. The scale of our network allows us to move customer inventory across the system in ways a regional or subscale operator just simply cannot. Our tech platform, I just talked about LinOS, our procurement capabilities, our customer relationships, the ability to deploy capital into sophisticated purpose-built automated warehouses like Hazleton for Tyson are all just compounding advantages that widen the gap between us and the rest of the field. And what we're seeing in the market is consistent with what you'd expect at this point in the cycle. Some operators overexpanded, lack the capital structure to absorb the challenges that we've been facing. and don't have the platform to deliver against both diverse and extremely stringent customer requirements and are under a lot of pressure. And so we wouldn't be surprised at all, and we're certainly hearing on the street, if you will, that there'll be a couple of competitor exits in the coming quarters. And we think this is just a natural way that supply gets rationalized in any real estate cycle and will ultimately benefit the operators who have the staying power, the capital and the platform to absorb the volume and in some cases, the assets. On the idling front, I think you know we idled 10 facilities last year. We've idled 5 so far this year, taking out almost 2.5 million square feet of capacity or about 1% of the -- our U.S. capacity. We're evaluating a handful more this year. But because our occupancy levels are strong and our new business pipeline is so strong, I wouldn't expect that pace to continue. We're happy with where we sit right now. And also, I think it's exciting to point out that a couple of the buildings that we've idled, we believe that we'll be able to turn those back on for specific customer activities. So I think the industry is shaping out, and we're in a great position to capitalize. Operator: Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Omotayo Okusanya: I wanted to talk about GIS for a second. Some of the kind of like weaker port activity that you kind of noted impacting the business. Just kind of curious how you're thinking about that unfolding back half of '26 into '27 just given some of this kind of incremental information around taxes, tariffs from the Trump administration. And second of all, if you still feel like there's still opportunities to kind of lower labor costs in general within that business so that you can still kind of manage your margins. Robb LeMasters: Yes. Thanks for the question. Yes. So GIS is a tale of a couple of positives and negatives as the year sort of unfolded for us. We clearly highlighted that the settlement was not contemplated in our guidance, that kind of came in the quarter. So when you back that out, we actually had a pretty good quarter, right? It was actually in line to slightly better, excluding that. What we're really dealing with there is we have had some benefits overall in the business as it relates to fuel. That's generally a pass-through, but that's come through slightly better than we thought. What's really hit us, as you mentioned, was on the drayage side, and we contemplated the container volume in our warehouse business. That was contemplated. I would say that's about in line, maybe a touch harder than we even thought in that business. And then we have the carrier rate situation, which is really just a tightening of the economy ultimately drives up the rates and what's going on with supply and demand on the trucker side. That generally levels out. It can take a quarter or 2. So as we made a comment, we're lowering our guidance generally from the $7 million settlement and a little bit of softness related to that carrier issue. So I think that kind of covers all the different puts and takes as we roll forward, given your comments there, we still are positive about what's going to happen with the drayage long term and with import exports on our warehouse business, but really haven't contemplated a pickup as it relates to the second half. Operator: Your next question comes from the line of Michael Mueller with JPMorgan. Michael Mueller: Greg, on your comments about confectionery becoming a top 10 category, can you talk a little bit about like where are you winning this business from? What are they currently doing for storage and logistics? W. Lehmkuhl: Yes. Great question, Michael. So for the customer that we launched this building for, the product was flowing through the traditional foodservice segment or channel. It was not going through third-party cold storage, and they felt they could get better service and better cost through working with us, and we believe that's a trend that will continue with this customer and others. And so it is -- it does have specific requirements, specific temperature requirements and pulling it out of just the normal foodservice channel made sense to them, and we believe it will for others. And so we are really excited about the next several years in growing this segment of our business, and it's a great example of how some of the excess supply can get absorbed. Operator: Your next question comes from the line of Vikram Malhotra with Mizuho. Vikram Malhotra: I guess just I wanted to dig into the cost more in the warehouse segment. Just if you can unpack a little bit more kind of on labor, on power, et cetera. What's your ability to control costs from here, what's the impact positive negative from oil perhaps? And then we just think about the occupancy build, do you mind giving us a little bit of color on how that should influence the margin. W. Lehmkuhl: I'll take the first one. You want to take the second? Robb LeMasters: Sure. W. Lehmkuhl: Okay. So I mean we have a culture of lean continuous improvement at Lineage, and we're making productivity energy gains every quarter. Our technology platform is a huge supporter of that. LinOS continues to ramp up, but we have a lot of other initiatives and technologies rolling out side-by-side with LinOS like our EasyMetrics platform, which is a labor planning tool. And we have that just this year, went from very few to 100 buildings. So we feel great about our ability to manage labor over time, and we think we have many years of runway to attack that cost and that is obviously our largest controllable cost. Robb LeMasters: Yes. And just in terms of guidance, in terms of thinking about the margin as well as occupancy and a couple of the factors that we generally go through with you guys. As we contemplated the guidance, there's a couple of different aspects there. There's the volumetric side, the revenue side, the revenue per pallet side, if you will, and then margins. As we're looking through those different components and as the year has unfolded. On the volume side, really, that has to do with keeping your eye on occupancy as well as throughput pallets, right? Those are 2 different businesses, the storage business for occupancy. And then as you think about throughput, that really drives what's going on in the services side. When you blend those both up, right, seeing good stuff on the occupancy front and still seeing headwinds on the throughput. So generally, slightly better than where we came in the year as it related to the total volumetric side, but still probably flat to a little bit down when you blend up those 2 business lines in the volumetric side. On price, just to review that, on the storage business, again, we look at those kind of together. We have the RSP for physical pallets and then we have services revenue per throughput pallet. Every quarter, there's both a price element of how we put it out to the street. Greg talked about how we're getting that in both businesses at a 1% to 2%. But then different quarter-to-quarter mix or commodities or different customers can really move that around. And so we've been consistent all year, and we still see that ultimately blending to a slightly down rate for the full year. Again, that's RSP side as well as services revenue per throughput side. So that will be a slight negative. And when you take those 2, right, that kind of blends to a same-store revenue flat to down a little bit. And Greg talked about that you try to offset that with the cost savings initiatives, but you're fighting inflation, right? And so any business that has a challenged top line like that, which we're coming through, really hard to mitigate all the labor inflation you have and Greg and the team are doing a great job. But the third component then becomes around margins. We generally are baking in a slight decline in margins because we saw that this quarter had a little bit of margin pressure. Last quarter, we did well. So that's really our third component. But to keep margins almost flat in this environment is a stellar outcome. So those are the 3. Hopefully, that helps you kind of parse through how we're thinking about the minus 3% to 0% overall guidance. Operator: Our next question comes from the line of Jamie Feldman with Wells Fargo. James Feldman: Sitting in for Blaine, who's out today. But I appreciated your color on the back half, kind of some of the comps for same-store NOI and how to think about the model. Is there anything as we look ahead to '27 that sticks out as particularly easy or challenging comps? I know you also mentioned this year, you have the drag from some refinancing. But just kind of like big picture line items, where do you think it gets particularly easy next year and where may not be so easy based on how you did this year? Robb LeMasters: Yes. No, I mean, just moving through the P&L, as you think about the different components, generally a little bit early to go into 2027, but we're setting up good as we exit the year, right, we said we're scratching at a flat outcome. I think Greg has really helped the team battle through those 3 headwinds, but there's a couple that are still kind of rolling over as we go into next year, import/export being one top on my mind, just given geopolitical tension. So we'll see how that same-store NOI sort of builds as we turn the corner. On the non-same-store NOI, I think there's good evidence that we're really building our greenfields and expansions and that should build. Admin, we've talked about that we've really gotten ahead of that. That's nice, but we will be fighting inflation again next year. So we've taken out the costs and we want to continue to invest in the business, but I think you'll have a good outcome there. So generally, that's our view. A little bit too early to say and still really attacking the problems at hand. So we don't want to get ahead of ourselves. We've had a good first half, but need to get through the second half. Operator: Your next question comes from the line of Ronald Kamdem with Morgan Stanley. Ronald Kamdem: Just wanted to follow up on some of the other uses this cycle. I mean you talked about confectionery. I think we talked about sort of pharmaceutical and [indiscernible] as well. And again, just a little bit more color if we could get some more hard numbers of what you think this revenue opportunity could be? Is that business priced like the rest of the business? Just what are the puts and takes because it does seem like this is different versus previous cycles. W. Lehmkuhl: Sure. Thanks, Ronald. Yes, confectionery does price similarly to the rest of the business. We love the business, we like the margins, and we think this could be multiple hundreds of millions in revenue over time. So that's the way we're looking at it. I think on the other uses or absorption of supply, there have been a couple of deals already where we've idled buildings where we've been able to make deals to either sell or working on leases for noncompetitive uses. And so one was with a trucking company, one was with a producer that would clearly not -- would ensure that those -- that capacity exits the third-party public warehousing space. And so that adjusts overall supply as well. Operator: Your next question comes from the line of Craig Mailman with Citigroup. Craig Mailman: Maybe a 2-parter here. I guess just -- first, on conversations you're having with tenants. I mean, we're starting to see some in your tenant base kind of cut prices as the last resort to spur volumes, and so they're already getting pressured on margin there. Just kind of curious how that bodes for kind of your ability to push through rent increases as we go forward here and what you're discussing with tenants so far? And then just second, on the guidance, my understanding was always the second half was a ramp versus the first half on earnings. But if you look at the run rate, you guys are [ decelerating ] in the back half of the year. And I understand Big Bear is a $15 million EBITDA headwind, but you also have the $7 million legal settlement. And so it's that $0.05, $0.06 drag from Big Bear. I'm just trying to think about why guidance shouldn't trend towards the high end of the range versus the midpoint? W. Lehmkuhl: So I'll take the first one first, and then I'll turn it over to Robb to answer the second one. So on price, as the new supply hit us over the last couple of years, we had to contend with price challenges. We reported already and discussed that this year, we expect to get net price increases of 1% to 2%. And I think we've worked through the vast majority of that new supply getting delivered. And so I would expect similar results next year where we would have net positive price. Robb LeMasters: Yes. And then talking about the math around your question as to how the year unfolds. To be clear, what we've commented on is the year-over-year growth. So we do see the second half of the core business on the warehousing side being up dollars, right? But as you think about the year-over-year, you're putting some year-over-year growth rates. And I think the simple way to think about it is the first and the second quarter same-store NOI blends to about a minus 2%, right? The first quarter was about minus 1%, and we just reported a minus 3%. So if you blend those 2 together, and that's a minus 2%. And you know that our new guidance is minus 3% to 0. So midpoint there is minus 1.5%. So you can see really they line up quite nicely. So nothing really to deal with. And then, of course, I'm sure you're adjusting for FX. That has been a tailwind in the first part of the year, and that goes away as we think about the second half. So pretty proud of the team and nothing to call out. We are not seeing a deceleration at all, given your question. Operator: Your next question comes from the line of Ami Probandt with UBS. Ami Probandt: I'm here with Michael Goldsmith. A couple of questions on the new development disclosure. First off, how fast do you expect to ramp occupancy at the development facilities, which were delivered in the last year? Should we expect a similar path to those delivered 2 or 3 years ago? And then for facilities, what is the -- what leads to the spread between the achieved economic occupancy and NOI? Robb LeMasters: So on the development pipeline, yes, we're seeing a very similar ramp across the portfolio, really good outcome as you study that page, you'll see that the class that really you watch right before it becomes part of our base. The IRR that we're expecting actually notched a little bit up, right? So sequentially from Q1 to Q2 that's what I keep my eye on, and you can see that, that 25-month to 36-month class, in Q1, we were expecting about a 12% return. Now we're expecting at 13%. These are smaller numbers, but generally just points to really the aging of our portfolio right before it becomes part of our base, really is looking nice. So nothing to call out in terms of the years, it's a multiyear ramp for projects. And then I think your question -- your second question had to do with economic versus physical occupancy, I believe, but you can clarify if I didn't get it right. We're generally seeing the same trends in the second quarter. We've talked about that generally being a spread of about 400 to 600 basis points, and we came in right in that range. Very consistent with what we saw in Q1. So we've addressed that in the last couple of earnings calls that we really worked with our customer, and we do on a year-to-year basis, and we generally feel like people have a need for that extra capacity that they sign up for. That is what's caused the delta between economic and physical. And that range really feels like we're in the right zone right now with our customers. They need that for seasonal purposes or other means. And so we really feel like we're in a good shape there. I don't think you'll have any surprises up or down from the range that we've been consistently at the past couple of quarters. Operator: Your next question comes from the line of Vince Tibone with Green Street. Vince Tibone: Can you provide an update on the strategic review process? At Nareit, I think you talked about selling -- potentially looking to sell up to $1 billion. Just want to see if that's still the case and how we should think about kind of the most likely timing of any transaction. Is it possible something is agreed upon and announced for year-end? Or is this more of a '27 event now? Robb LeMasters: Yes. Thanks for the question. Yes. Again, we really took it upon ourselves to look at the portfolio and see the disconnect that we're seeing in the public versus private markets and take advantage of that, frankly, to solve where we want to get to from a leverage standpoint to have more optionality in the future. As you know, our reported leverage is 6x right now. And we've made a commitment to our rating agencies and the whole U.S. investors that we want to have flexibility to get into the range of the 5 to 5.5x, which is what we committed to at the IPO. If you do the math as to how you get there, you're exactly right, you need to divest a little over $1 billion of proceeds at the multiples that we've outlined in the past in order to get in that zone. And so we still see a really good path. What I've done over time is look at the various transactions that we could do. We've narrowed it down. We've hired advisers or consultants to kind of try to understand what the value could be. And I think our comments today just say we really have soft circled a couple of interesting transactions that would get us there. We're encouraged by that. And we expect, to your question, that we'll have a meaningful update on the lion's share of those transactions within this calendar year. Now the cash proceeds could spill over into the early part of next year. But I know everybody is watching kind of getting there by year-end. And so we're feeling increasingly confident that we can make substantial progress this year and give you an update by our year-end announcement. Operator: Your next question comes from the line of Alexander Goldfarb with Piper Sandler. Alexander Goldfarb: Just following on Vince's question. I realize, Robb, you're not giving '27. But overall, it sounds like the macro environment is the macro environment. It sounds like customers are settling out, maybe a little plus, maybe a little minus, but settling out. But if we think about you guys selling $1 billion of assets and deleveraging, it sounds like net-net, '27 is a lower number than '26. I realize you're not giving guidance, but just conceptually from what you guys have talked about the macro and then what you're doing strategically, that's mentally sort of how the math seems to pencil. And I just want to make sure if that's correct or if you do anticipate '27 would be positive versus '26 on AFFO basis. Robb LeMasters: Yes. No. So again, we're not guiding to AFFO for 2027, but you've laid out a couple of pieces there. I think we generally have outlined that if we find the right transaction at the right pricing, we don't find this to be a super dilutive event at the AFFO. It's hard when for a period of time, you sell an asset and then you put the cash on the balance sheet and you don't earn the same. That's just a fact of deal math. But we don't think that, that AFFO dilution from that event alone will be substantial to be concerned about. And so then you just have the business. And as I commented earlier, it will be too difficult to kind of talk about the business outside of that transaction. Operator: Your next question comes from the line of Viktor Fediv with Scotiabank. Viktor Fediv: On the Big Bear fire, you mentioned that you were able to relocate some of your customers to nearby facilities. So to what extent does that create a tailwind for your same-store portfolio through higher occupancy and throughput? And is the estimated $15 million impact net of those benefits? And also, compared to the Kennewick incident, are there any meaningful differences in the insurance structure, expected timing or potential scope of recoveries that could result in different financial outcome this time around? W. Lehmkuhl: Thanks for your questions. I'll just start to talk just a couple of high-level comments on the fire, and then I'll turn it over to Robb on the financials. But I again, just want to thank our team. This was a very, very, very challenging situation. And our response on the ground is nothing short of extraordinary; from literally day 1, standing side-by-side with the firefighters and helping them solve how to put out this fire was simply remarkable. As Robb talked about, the facility is a relatively small portion of our overall network, just about 1%. And we've been working with customers literally from the first day to divert product across the network to provide solutions for them. It's also important to recognize another kind of network effect or benefit of scale is that we have almost 30 other facilities in the broader Southern California region, and those teams have jumped in and helped our customers in a heroic way. And so right now, we are focused on the cleanup entirely supporting the community. We've given over $3.3 million to the local residents through charities and directly and feel great about our remediation and community support efforts. As far as the Kennewick piece and comparing it to that, yes, our insurance coverage is adequate to handle this, and we wouldn't expect the cash flows to be much different than that played out. Operator: Your next question comes from the line of Nicholas Thillman with Baird. Nicholas Thillman: Maybe I wanted to touch on some comments you made about just operators looking to exit and capacity potentially being flushed from the North American market. But you also commented on potential institutional interest just within the cold storage infrastructure and the public-private disconnect on valuations. Just curious how you think it could play out from a pricing impact if you're starting to see some of the private players get more involved and maybe get some reset basis on some of these assets. Does that put downward pressure on pricing for the portfolio overall? I guess how are you viewing being aggressive on the acquisition front versus just letting capacity get flushed out of the system? W. Lehmkuhl: Yes. I mean I think we're in the best position to acquire the assets that we want as some of these companies take different strategic directions because we have the most synergies because we have the densest network and we can have the technology and capability and admin structure to optimize these assets. As far as new private institutional investors coming in, I think it's clear that it's very difficult for these small companies to compete with the more established providers. And so I don't think there's a lot of motivation for them to come and buy a 5-asset company that's struggling because them buying them doesn't change their trajectory because they're not in a different competitive position. So we don't see that as a major threat. And we think, if anything, given this shakeout could firm up price over time and allow us to get closer over time to being able to recover inflationary levels as it plays out. Operator: That is all the time we have today for questions. Apologies to those whose questions we did not get to. I will now turn the call back over to Ki Bin Kim for closing remarks. Ki Bin Kim: Thank you, everyone, for joining our second quarter earnings call. Have a good week. W. Lehmkuhl: Thanks, everybody. Appreciate it. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Lineage, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lineage wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. 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Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Lineage (LINE) reported second quarter 2026 results on 5 August, with sales of US$1,361 million and a wider net loss of US$29 million. That mix of stable revenue and higher losses is the core focus for shareholders. See our latest analysis for Lineage. Lineage shares closed at US$42.36 on 6 August, with a 1 day share price return of 4.23% and a year to date share price return of 19.59%. The 1 year total shareholder return is 7.73%, suggesting recent momentum has been stronger than the longer term picture as investors reassess the wider losses alongside modest sales growth. If Lineage’s latest earnings have you reassessing your watchlist, this is a good moment to broaden your search and check out 19 top founder-led companies The recent 4.23% move leaves Lineage trading close to analyst targets while still carrying widening losses. Has most of the easy upside already been captured, or does the current valuation still leave meaningful room ahead? At a last close of $42.36, the most followed narrative places Lineage’s fair value at about $44.26, using a 9.99% discount rate to frame long term cash flows. Read the complete narrative. Want to see what underpins that fair value call? The narrative leans heavily on measured revenue growth, a sharp margin reset, and a future earnings multiple that looks more like a mature industrial REIT than a high growth story. Result: Fair Value of $44.26 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the Lineage narrative still faces pressure from excess U.S. cold storage capacity and higher forecast interest costs, which could weigh on margins and cash flow. Find out about the key risks to this Lineage narrative. The mixed picture around Lineage earnings, valuation and risks will not mean the same thing to every investor, so move quickly and test the data against your own approach and time horizon, then weigh up the 2 key rewards and 2 important warning signs Lineage may be on your radar now, but you may also want to consider other opportunities that could suit your style. Use the screener to move from idea to action before the next set of results reshapes the market. Target quality at a reasonable price by scanning for companies that look mispriced on fundamentals through the 52 high quality undervalued stocks Focus on potential income streams by looking at companies with stronger yields and resilient payouts using the 8 dividend fortresses Reduce the likelihood of unpleasant surprises by filtering for companies that show sturdier financials with the solid balance sheet and fundamentals stocks screener (48 results) This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LINE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Operational trends are showing signs of stabilization, with same-store physical occupancy increasing 90 basis points year-over-year, marking a welcome inflection point after declines in 2025. Management attributes the ability to grow market share despite competition to industry-leading offerings and a superior value proposition that customers increasingly recognize. The company outperformed industry inflation by 750 basis points by leveraging the Lineage operating platform and lean continuous improvement approaches to drive costs out of the base. Geographic diversification in APAC, Europe, and Canada has provided a source of stability, as these markets have not experienced the same headwinds seen in the U.S. domestic market. Management views current supply and demand challenges as cyclical rather than structural, noting that food demand remains durable and Lineage serves as critical infrastructure. The company is proactively managing excess capacity through selected facility idling, having taken out approximately 2.5 million square feet of capacity to date. Full-year same-store NOI guidance was raised to a range of negative 3% to 0%, reflecting encouraging underlying business trajectory through the first half of the year. Management expects to lap steep volume declines in international trade by late Q3 or Q4, easing a primary headwind as the year closes. The LinOS technology rollout is on track to reach 20 conventional buildings by year-end, with increasing EBITDA impact expected in 2027 and 2028. Guidance assumes a 1% to 2% net pricing increase for 2026, supported by the completion of the significant majority of customer pricing discussions. The company remains committed to reducing reported leverage from approximately 6.0x to a target range of 5.0x to 5.5x through strategic portfolio actions. A fire at the Big Bear facility in Los Angeles is expected to create a $15 million adjusted EBITDA drag in the second half of 2026 due to lost revenue and transition costs. Management is pursuing accountability from a third-party solar provider, Altus, regarding the Big Bear fire while working with insurance partners for business interruption recovery. A $7 million legal settlement from a prior-year employment matter and carrier rate pressure impacted Global Integrated Solutions (GIS) margins in Q2, leading the company to lower its full-year GIS NOI outlook to a range of minus 4% to minus 2%, down from the previous guidance of 0% to plus 2%. Accelerating truckload and LTL carrier rates created near-term margin pressure in the GIS segment, though management expects recapture as rates are absorbed into customer pricing. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Internal analysis suggests even aggressive adoption scenarios would only impact the business by less than 1% to low single digits. Management noted that calorie reductions are concentrated in snacks and packaged foods rather than the fresh and frozen categories Lineage handles. The study did not factor in the potential for increased total food consumption resulting from people living longer due to the drugs. Management is evaluating options to divest over $1 billion in assets to take advantage of the valuation disconnect between public and private markets. The company expects to provide a comprehensive update and have firm timetables for key transactions by year-end 2026. Proceeds will be used to increase financial flexibility for M&A opportunities and to reach leverage targets. Lineage secured a key confectionery account win, successfully transitioning product from traditional foodservice channels to third-party cold storage. Management expects confectionery to become a top 10 category over time, representing a potential revenue opportunity of multiple hundreds of millions. The company secured a key confectionery account win through deep relationships in the food space, while its specialized automation and LinOS technology were cited as reasons for winning the Tyson account. Management believes the industry is undergoing a rationalization that will favor large, sophisticated providers with the capital to absorb volume. Expectations were voiced regarding potential competitor exits or bankruptcies in coming quarters due to overexpansion and subscale operations. Lineage views itself as the primary beneficiary of this shakeout, with the ability to acquire distressed assets that offer high network synergies.

NOVI, Mich., August 05, 2026--(BUSINESS WIRE)--Lineage, Inc. (NASDAQ: LINE) (the "Company"), the world’s largest global temperature-controlled warehouse REIT, today announced its financial results for the second quarter of 2026. Second-Quarter 2026 Financial Highlights Total revenue increased 0.8% to $1,361 million GAAP net loss of $(32) million, or $(0.13) per diluted common share Adjusted EBITDA decreased (1.8)% to $320 million; adjusted EBITDA margin decreased (60)bps to 23.5% AFFO decreased (6.2)% to $198 million; AFFO per share decreased (6.2)% to $0.76 Declared quarterly dividend of $0.5325 per share, representing annualized dividend rate of $2.13 per share "We delivered a solid second quarter, with adjusted EBITDA and AFFO per share both ahead of expectations," said Greg Lehmkuhl, president and chief executive officer of Lineage. "Importantly, we achieved a 90bps year-over-year increase in same warehouse physical occupancy, a positive signal that inventory levels have further normalized and that the industry is stabilizing." "We also want to acknowledge the fire at our Big Bear facility. Lineage acted quickly to support the surrounding community, and I want to thank the Los Angeles first responders and Lineage team members for their extraordinary response. We remain committed to a full recovery," concluded Lehmkuhl. Updating Full-Year 2026 Guidance Lineage expects full-year 2026 adjusted EBITDA of $1.26 to $1.29 billion and Adjusted FFO ("AFFO") per share of $2.80 to $3.05. The Company's guidance excludes the impact of unannounced future acquisitions or developments. Please refer to Lineage's Earnings Presentation and Supplemental Information for additional details related to the Company's guidance. Second-Quarter 2026 Financial Results Conference Call and Earnings Presentation with Supplemental Please visit ir.onelineage.com/events-and-presentations to view Lineage’s second-quarter 2026 Earnings Presentation and Supplemental Information. Lineage will host a conference call and webcast today at 8:00 a.m. Eastern Time to discuss the Company’s second-quarter 2026 financial results. Interested parties may listen by visiting the Lineage Investor Relations website at ir.onelineage.com. A replay of the webcast will be available for approximately one year on the Company's investor relations website. About Lineage Lineage, Inc. (NASDAQ: LINE) is the world’s largest global temperature-controlled warehouse REIT with a network of 498 strategically located facilities totaling approximately 87 million square feet and approximately 3.1 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific, as of June 30, 2026. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world. Learn more at onelineage.com and join us on LinkedIn, Facebook, Instagram, and X. Forward-Looking Statements Certain statements contained in this Press Release, 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 Press Release. 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; 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; the impact of tariffs and global trade disruptions on us and our customers; other risks inherent in the real estate business, including customer defaults, potential liability related to environmental matters, illiquidity of real estate investments and potential damages from natural disasters; the availability of suitable acquisitions and our ability to acquire 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 and greenfield developments; 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 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; risks associated with artificial intelligence; our failure to maintain an effective system of internal control over financial reporting; our failure to maintain our status as a real estate investment trust ("REIT") 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, and challenges to our tax positions; the impact of any financial, accounting, legal, tax 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, 2025 filed with the SEC. Should one or 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 Press Release speak only as of the date of this Press Release, 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 Press Release. Availability of Information on Lineage's Website and Social Media Channels Investors and others should note that Lineage routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts and the Lineage Investor Relations website. The Company uses these channels as well as social media channels (e.g., the Lineage LinkedIn account (linkedin.com/company/onelineage/); the Lineage Facebook account (facebook.com/lineagelogistics); the Lineage Instagram account (instagram.com/onelineage/); the Lineage X account (twitter.com/OneLineage)) as a means of disclosing information about the Company's business to our customers, colleagues, investors, and the public. While not all of the information that the Company posts to the Lineage Investor Relations website or on the Company's social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Lineage to review the information that it shares at the Investor Relations link located at the top of the page on onelineage.com and on the Company's social media channels. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Investor Email Alerts" in the "Resources" section of the Lineage Investor Relations website at ir.onelineage.com. The contents of these websites are not incorporated by reference into this Press Release or any report or document Lineage files with the SEC, and any references to the websites are intended to be inactive textual references only. Global Warehousing Segment The following table presents the operating results of our global warehousing segment for the three months ended June 30, 2026 and 2025. Global Warehousing Segment The following table presents the operating results of our global warehousing segment for the six months ended June 30, 2026 and 2025. Same Warehouse Results The following tables present revenues, cost of operations, same warehouse NOI, and margins for our same warehouses for the three and six months ended June 30, 2026 and 2025. Non-Same Warehouse Results The following tables present revenues, cost of operations, non-same warehouse NOI, and margins for our non-same warehouses for the three and six months ended June 30, 2026 and 2025. Global Integrated Solutions Segment The following tables present the operating results of our global integrated solutions segment for the three and six months ended June 30, 2026 and 2025. Capital Expenditures Recurring Maintenance Capital Expenditures The following table sets forth our recurring maintenance capital expenditures. Integration Capital Expenditures The following table sets forth our integration capital expenditures. External Growth Capital Investments The following table sets forth our external growth capital investments. Non-GAAP Financial Measures Reconciliations Non-GAAP Financial Measures Notes 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, and Adjusted EBITDA margin. We also use same warehouse and non-same warehouse metrics described above. We calculate total segment NOI (or "NOI") as our total revenues less our cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense). We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with ASC 280, Segment Reporting. We believe segment NOI is helpful to investors as a supplemental performance measure to net income because it assists both investors and management in understanding the core operations of our business. There is no industry definition of segment NOI and, as a result, other REITs may calculate segment NOI or other similarly-captioned metrics in a manner different than we do. We calculate EBITDA as net income or loss determined in accordance with GAAP, excluding depreciation and amortization expense, interest expense, net, and income tax expense or benefit. We also 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", as EBITDA further adjusted for net loss or gain on sale of real estate assets, net of withholding taxes, impairment of real estate assets, and adjustments to reflect our share of EBITDAre for partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and useful life of related assets among otherwise comparable companies. In addition, we calculate our Adjusted EBITDA as EBITDAre further adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), other nonoperating income or expense, acquisition, restructuring, and other expense, foreign currency exchange gain or loss, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, loss or gain on debt extinguishment and modification, impairments of goodwill and other non-real estate assets including intangible assets, technology transformation, and reduction in EBITDAre from partially owned entities. We believe that the presentation of Adjusted EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are otherwise included in EBITDAre, which we do not believe are indicative of our core business operations. EBITDAre and Adjusted EBITDA are not measurements of financial performance under GAAP, and our EBITDAre and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Adjusted EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Our calculations of EBITDAre and Adjusted EBITDA have limitations as analytical tools, including the following: these measures do not reflect our historical or future cash requirements for maintenance capital expenditures or growth and expansion capital expenditures; these measures do not reflect changes in, or cash requirements for, our working capital needs; these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; these measures do not reflect our tax expense or the cash requirements to pay our taxes; and although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for such replacements. We use EBITDA, EBITDAre, and Adjusted EBITDA as measures of our operating performance and not as measures of liquidity. 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. We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the NAREIT. NAREIT defines FFO as net income or loss determined in accordance with GAAP, excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, in-place lease intangible amortization, real estate asset impairment, and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization, and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We calculate core funds from operations, or Core FFO, as FFO adjusted for the effects of gain or loss on the sale of non-real estate assets, gain or loss on the destruction of property (net of insurance proceeds), finance lease ROU asset amortization real estate, impairments of goodwill and other non-real estate assets including intangible assets, acquisition, restructuring and other, other nonoperating income or expense, loss on debt extinguishment and modifications and the effects of gain or loss on foreign currency exchange. We also adjust for the impact attributable to non-real estate impairments on unconsolidated joint ventures and natural disaster. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential. However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of recurring maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the utility of FFO and Core FFO as a measure of our performance may be limited. We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred financing costs, amortization of debt discount/premium, amortization of above or below market leases, straight-line net operating rent, provision or benefit from deferred income taxes, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, non-real estate depreciation and amortization, non-real estate finance lease ROU asset amortization, and recurring maintenance capital expenditures. We also adjust for Adjusted FFO attributable to our share of reconciling items of partially owned entities. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities. FFO, Core FFO, Adjusted FFO, and Adjusted FFO per diluted share are used by management, investors, and industry analysts as supplemental 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 accordance with GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our condensed consolidated financial statements included elsewhere in this Press Release. FFO, Core FFO, and Adjusted FFO should be considered as supplements, but not alternatives, to our net income or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculated by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do. 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 factors such as acquisitions, divestitures, impairments, natural disaster events, restructurings, debt issuances that have not yet occurred, or other events that are out of our control and cannot be forecasted. The impact of such adjustments could be significant. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805466504/en/ Contacts Investor Relations Contact Ki Bin KimVP, Investor [email protected] Media Contact Megan HendricksenVP, Global Marketing & [email protected]

For the quarter ended June 2026, Lineage, Inc. (LINE) reported revenue of $1.36 billion, up 0.8% over the same period last year. EPS came in at $0.76, compared to -$0.03 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.36 billion, representing a surprise of +0.01%. The company delivered an EPS surprise of +7.04%, with the consensus EPS estimate being $0.71. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Lineage, Inc. performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Same Warehouse Result - Warehouse storage - Economic occupancy percentage: 81.5% versus 80.9% estimated by two analysts on average. Revenues- Total Global Warehousing Segment: $1.01 billion versus $983.76 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +3.6% change. Revenues- Global Integrated Solutions segment: $356 million compared to the $372.2 million average estimate based on three analysts. The reported number represents a change of -6.3% year over year. Revenues- Global Warehousing Segment- Warehouse storage: $514 million compared to the $511.47 million average estimate based on two analysts. The reported number represents a change of 0% year over year. Revenues- Global Warehousing Segment- Warehouse services: $491 million versus the two-analyst average estimate of $470.4 million. The reported number represents a year-over-year change of +7.7%. Basic earnings (loss) per share: $-0.13 compared to the $-0.14 average estimate based on three analysts. View all Key Company Metrics for Lineage, Inc. here>>> Shares of Lineage, Inc. have returned -4.7% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lineage, Inc. (LINE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Lineage, Inc.? Here are five stocks we like better. Second-quarter results exceeded expectations: Adjusted EBITDA was approximately $320 million and AFFO was $198 million, or $0.76 per share, as improved occupancy and cost controls offset trade-related volume pressure. Full-year guidance improved for core operations: Lineage raised same-store NOI growth guidance to negative 3% to flat and AFFO guidance to $2.80-$3.05 per share, while maintaining its adjusted EBITDA midpoint. Headwinds remain: Throughput declined 1.8%, including a 14% drop in container volumes, while the Big Bear facility fire is expected to reduce EBITDA by about $15 million in the second half and GIS guidance was lowered because of carrier-rate pressure and a legal settlement. Lineage (NASDAQ:LINE) reported second-quarter results that exceeded its internal expectations and consensus estimates as warehouse occupancy improved and cost-control efforts helped offset continued trade-related volume pressure. Adjusted EBITDA totaled approximately $320 million for the quarter, while adjusted funds from operations, or AFFO, was about $198 million, or $0.76 per share. President and Chief Executive Officer Greg Lehmkuhl said the company’s operational trends continued to stabilize, though its full-year outlook still reflects competitive pressures in some U.S. markets and trade-related volume headwinds. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “The underlying trajectory of our business through the first half has been encouraging,” Lehmkuhl said. “Operations are performing better than expected, and the signs of stabilization we’ve highlighted over the past couple of quarters have continued.” In the Global Warehousing segment, total warehouse net operating income was approximately $367 million. Same-store NOI declined 2.9% from a year earlier, a result Chief Financial Officer Robb LeMasters said was ahead of expectations. Favorable foreign exchange contributed 90 basis points to same-store NOI during the quarter. → 3 Drone Stocks That Should Soar After the Summer Slump Same-store physical occupancy increased 90 basis points year over year, marking an improvement after declines during 2025. Same-store rent, storage and blast revenue per physical pallet declined 0.7%, while services revenue per throughput pallet increased 2.1%. Same-store throughput pallets fell 1.8% year over year, including a 14% decline in container volumes as tariff uncertainty continued to weigh on higher-turning port-related business. International container volume represents about 15% of Lineage’s warehouse throughput, according to management. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Lehmkuhl said the company expects to begin lapping the steep volume declines recorded in 2025 during late third quarter and into the fourth quarter. He also said inventory de-stocking by customers has largely reset to more historical levels, while broader supply conditions are stabilizing despite pockets of pressure from new capacity in about 15% of U.S. markets. Lineage expects to achieve a 1% to 2% net customer pricing increase for 2026, following the completion of most of its annual pricing discussions. However, it maintained its expectation that revenue per pallet for the full year will be slightly lower because of trade and customer-mix factors. The company raised its full-year outlook for same-store NOI growth to a range of negative 3% to flat, compared with prior guidance of negative 4% to negative 1%. It also increased AFFO guidance to $2.80 to $3.05 per share, from $2.75 to $3.00. Lineage maintained the midpoint of its adjusted EBITDA guidance while narrowing the range. Total warehouse NOI growth is still expected to range from negative 2% to positive 1%, as improved same-store performance is offset by the impact of a fire at its Big Bear facility in Los Angeles. LeMasters said foreign exchange is expected to be a relatively minor year-over-year factor during the balance of 2026. He expects third-quarter same-store NOI growth to be the lowest reported level of the year because of difficult comparisons, followed by close to flat year-over-year same-store NOI growth in the fourth quarter as import-export comparisons ease and new business ramps. Administrative expenses, excluding stock-based compensation, were approximately $118 million in the second quarter. The company narrowed its full-year administrative expense forecast to $460 million to $470 million, with expenses expected toward the lower end of the prior quarterly range of $120 million to $125 million in each of the final two quarters. Lineage said a fire at its roughly 500,000-square-foot Big Bear facility is expected to reduce adjusted EBITDA by about $15 million during the third and fourth quarters, reflecting lost revenue and added costs while the site recovers. The facility has about 85,000 pallet positions, representing approximately 1% of the company’s global capacity. The company said it shifted customer volumes to surrounding facilities and expects to retain the significant majority of the affected business. Management said it believes the fire began during third-party testing of a rooftop solar array owned and operated by Altus, and that Lineage is pursuing options to hold the company accountable. Lineage said it has insurance coverage for the event and expects business interruption insurance ultimately to recover lost profit. Such recoveries would be recognized below the EBITDA line and are not included in current guidance. Repair, remediation, legal, community-support and related one-time costs will be excluded from adjusted EBITDA, as will offsetting insurance recoveries. The company committed more than $3.3 million to nonprofits and direct assistance for the local community during cleanup and remediation efforts. Global Integrated Solutions NOI was $61 million in the quarter. Excluding the prior-year disposition of its Spain Transportation business, segment revenue grew 5%, driven by U.S. transportation and food-service operations. However, accelerating truckload and less-than-truckload carrier rates pressured margins because the company passes those costs through to customers with a lag. GIS also recorded a $7 million legal settlement tied to an employment matter from prior years. Excluding the settlement, LeMasters said GIS generated an underlying margin of 19%. Lineage lowered its full-year GIS NOI outlook to negative 4% to negative 2%, from prior guidance of flat to positive 2%. Management expects margins to recover over time as carrier rates are incorporated into customer pricing. Lineage has 20 facilities under construction or in ramp-up and stabilization, representing $1.1 billion of investment and more than $134 million of expected incremental NOI at stabilization. Development projects were 71% pre-leased as of the quarter’s end. The company also expanded its LinOS operating platform to 14 conventional sites and said it remains on track to reach 20 such facilities by year-end. Lehmkuhl said the initiative is meeting internal savings targets across the 14 locations and should begin contributing modestly in the fourth quarter, with increasing impact expected in 2027 and 2028. Lineage has targeted $110 million of EBIT impact from LinOS. At quarter-end, Lineage had approximately $7.8 billion of net debt and $1.6 billion of total liquidity. Reported leverage was about 6.0 times, while adjusted net debt to transaction-adjusted EBITDA was approximately 5.3 times. The company reiterated its goal of bringing reported leverage into a range of 5.0 to 5.5 times. LeMasters said Lineage is progressing on a strategic portfolio review and expects to provide a comprehensive update by year-end. He said the company sees a disconnect between public and private valuations for cold-storage assets and is evaluating transactions that could increase financial flexibility while preserving capacity for future investments, acquisitions and shareholder returns. Lineage Logistics, Inc (NASDAQ: LINE) is a leading provider of temperature-controlled industrial real estate and supply chain solutions. The company specializes in refrigerated and frozen storage, transportation, and ancillary services designed to support the global perishable goods industry. From food manufacturers and distributors to retailers and foodservice operators, Lineage offers tailored temperature management solutions that help clients optimize inventory turnover, reduce waste, and maintain product quality throughout the cold chain. Lineage's core services include ambient, refrigerated and frozen warehousing, cross-docking, transloading, and dedicated transportation. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lineage Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Lineage Inc (NASDAQ:LINE) reported better-than-expected Q2 2026 results, with adjusted EBITDA of approximately $320 million and AFFO of $0.76 per share, both ahead of internal expectations and consensus estimates. Same-store physical occupancy increased 90 basis points year-over-year, marking a welcome inflection point and the first year-over-year increase since going public, reflecting strong commercial execution. The company is confident in achieving its full-year net pricing increase of 1% to 2% for 2026, as a significant majority of customer pricing discussions have been completed. Lineage Inc (NASDAQ:LINE) is making significant progress on its LinOS technology rollout, with all 14 conventional sites hitting internal savings targets and on track to deliver 20 conventional buildings by year-end, supporting the goal of $110 million in EBITDA impact. The company raised its full-year 2026 guidance for same-store NOI (to negative 3% to 0%) and AFFO per share (to $2.80-$3.05), reflecting better-than-expected operational performance and cost management. Geographic diversification is proving to be a strength, with APAC, European, and Canadian businesses providing stability and extending leadership positions despite U.S. market headwinds. The company is proactively managing supply by idling underperforming facilities (15 total since last year) and is seeing signs of industry rationalization, which is expected to benefit larger, more sophisticated operators like Lineage Inc (NASDAQ:LINE). Same-store NOI declined 2.9% year-over-year in Q2, with the decline widening from Q1's negative 0.9% due to a step-down in FX benefits and elevated international services activity in the prior quarter. Trade-related headwinds continue to pressure volumes, with international container volumes down 14% in the quarter, impacting the higher-margin throughput and services business. The Big Bear facility fire in Los Angeles is expected to create a drag of approximately $15 million on adjusted EBITDA in Q3 and Q4, with the company not yet contemplating any business interruption insurance benefit in its guidance. The Global Integrated Solutions (GIS) segment faced margin pressure from accelerating truckload and LTL carrier rates, which are passed through to customers with a lag, and a $7 million legal settlement, leading to a lowered full-year GIS NOI outlook. Same-store throughput pallets declined 1.8% year-over-year, reflecting continued pressure on higher-turning trade-related port volumes, and the company expects full-year throughput and service metrics to be down modestly. The company's reported leverage remains elevated at approximately 6.0 times, and it is committed to bringing it down to its targeted range of 5.0 to 5.5 times, which may require asset sales and could be a dilutive event. The operating environment remains challenging with competitive dynamics in certain domestic markets and ongoing political uncertainty affecting trade, which could continue to impact volumes and pricing. Warning! GuruFocus has detected 8 Warning Signs with LINE. Is LINE fairly valued? Test your thesis with our free DCF calculator. Q: Could you go through your take on occupancy? Average warehouse occupancy was 80% from 79.9% in 1Q. Why was it up sequentially, compared to 2Q normally being a seasonal step down? Do you think it was a function of something you did, customer actions, or could it be related to the cyclospora outbreak? A: (CFO Rob LeMaster) Year-over-year, same-store occupancy was up 90 basis points, which is a first-time outcome for us since going public. Sequentially, we were down about 1% in occupied pallets, which was slightly better than we thought. The USDA data suggests the industry was down about 3% sequentially, so our performance was better than the broader market trend. Q: As you look out over the next couple of years, outside of taking market share, how do you see physical and economic occupancy trending for the portfolio? What is a normalized level for the Lineage portfolio? A: (CEO Greg Lemgold) We continue to see stability. We broadly believe food inventory levels are healthy and relatively balanced. Several customers have said since the last call that they are rebuilding inventories because they overcorrected during the destocking period. This is another indication that inventories have stabilized. We are back into a normal period and would expect consistent inventories reflecting normal seasonality going forward. Q: I wanted to follow up on your LinOS comments. Should we expect it to be rolled out more broadly in 2027? When will it start to impact numbers? Are the productivity improvements expected in 4Q '26 driven by LinOS or other tech investments? A: (CEO Greg Lemgold) We are successfully running LinOS in automated buildings and are now rolling it out across our conventional warehouse network. In Q2, the team made significant strides in larger buildings, and we are hitting internal savings targets across all 14 LinOS buildings, still on track to deliver 20 conventional buildings by year-end. We will see some impact in the fourth quarter, but it won't move the needle this year. We will see increasing impact in 2027 and 2028. Q: I was wondering if you had an update on the impact of GLP-1 drugs, since usage is still going up. Any thoughts on the impact of those drugs on the food industry and your business? A: (CEO Greg Lemgold) We've dug into new Cornell research and other independent studies. Even under the most aggressive adoption scenarios, GLP-1 penetration lands in the mid-to-high teens as a share of the adult population. The steepest calorie reductions are concentrated in snacks and packaged foods, not fresh and frozen. Applying the individual commodity impacts to our actual mix, even the most bearish studies suggest the impact to our business is very low single-digits, and the most current research points to less than 1%. We don't believe GLP-1 drugs will have a material impact on our business. Q: Last quarter, you commented that you thought you were past the peak impact from new supply. How are you thinking about the industry's return to a tighter supply/demand balance and what that timeline might look like? A: (CEO Greg Lemgold) The cold storage industry is going through a real rationalization, and the outcome will be a story of winners and losers. We wouldn't be surprised to see a couple of competitor exits in the coming quarters. On the idling front, we idled 10 facilities last year and five so far this year, taking out almost 2.5 million square feet of capacity or about 1% of our US capacity. We're evaluating a handful more, but because our occupancy levels are strong and our new business pipeline is strong, I wouldn't expect that pace to continue. Q: I want to talk about GIS for a second. How are you thinking about the weaker port activity unfolding in the back half of '26 into '27, given incremental information around tariffs? Do you still feel there are opportunities to lower labor costs in that business to manage margins? A: (CFO Rob LeMaster) GIS is a tale of positives and negatives. The $7 million legal settlement was not contemplated in guidance. Excluding that, we had a pretty good quarter. The carrier rate situation is really a tightening of the economy that drives up rates, which generally levels out over a quarter or two. We are lowering our guidance due to the settlement and softness related to the carrier issue. We remain positive about what will happen with drayage long-term and import-exports, but haven't contemplated a pickup in the second half. Q: On your comments about confectionery becoming a TOP10 category, talk a little bit about where you are winning this business from. Where are they currently doing storage and logistics? A: (CEO Greg Lemgold) For the customer we launched this building for, the product was flowing through the traditional food service segment and was not going through third-party cold storage. They felt they could get better service and better costs through working with us. We believe that trend will continue with this customer and others. We are excited about growing this segment and it's a great example of how excess supply could get absorbed. Q: Can you unpack the costs more in the warehouse segment, specifically labor and power? What's your ability to control costs from here? How should the occupancy build influence the margin? A: (CEO Greg Lemgold) We have a culture of lean continuous improvement and are making productivity and energy gains every quarter. LinOS continues to ramp, and we have other initiatives like our Easy Metrics labor planning tool, which went from very few to 100 buildings this year. We feel great about our ability to manage labor overtime, which is our largest controllable cost. (CFO Rob LeMaster) On guidance, we are baking in a slight decline in margins. Keeping margins almost flat in this environment is a stellar outcome. Q: Can you provide an update on the strategic review process? Is selling up to a billion dollars still the case? Is it possible something is agreed upon and announced by year-end, or is this more of a '27 event? A: (CFO Rob LeMaster) We've narrowed down the transactions we could do and have hired advisors to understand the value. We have soft-circled a couple of interesting transactions that would get us to our leverage goals. We expect to have a meaningful update on the lion's share of those transactions within this calendar year. Cash proceeds could spill over into early next year, but we are feeling increasingly confident we can make substantial progress this year and give an update by our year-end announcement. Q: On For the complete transcript of the earnings call, please refer to the full earnings call transcript.

NOVI, Mich., June 12, 2026--(BUSINESS WIRE)--Lineage, Inc. (NASDAQ: LINE) (the "Company"), the world’s largest global temperature-controlled warehouse REIT, today announced that its Board of Directors has declared a cash dividend of $0.5325 per share for the second quarter of 2026. The dividend will be paid on July 21, 2026, to shareholders of record of the Company's common stock as of the close of business on June 30, 2026. About Lineage Lineage, Inc. (NASDAQ: LINE) is the world’s largest global temperature-controlled warehouse REIT with a network of over 500 strategically located facilities totaling approximately 88 million square feet and approximately 3.1 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world. Learn more at onelineage.com and join us on LinkedIn, Facebook, Instagram, and X. Forward-Looking Statements Certain statements contained in this press release may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Lineage intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements can generally be identified by Lineage’s use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," "seek," "objective," "goal," "strategy," "plan," "focus," "priority," "should," "could," "potential," "possible," "look forward," "optimistic," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of Lineage’s performance in future periods. Except as required by law, Lineage does not undertake any obligation to update or revise any forward-looking statements contained in this release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260612253322/en/ Contacts Investor Relations Contact Ki Bin KimVP, Investor [email protected] Media Contact Megan HendricksenVP, Global Marketing & [email protected]

Q1 beat expectations: Adjusted EBITDA rose 3.3% to $314 million and AFFO was $0.78 per share (down year-over-year mainly due to expired interest-rate hedges), with management saying AFFO ex-hedge effects was essentially flat and expressing increased confidence in hitting the midpoint of full-year guidance of $2.75–$3.00 per share. Mixed operating trends: Physical occupancy eased to 76.4% (economic occupancy 82%) and container volumes fell 17% YoY, but pricing remained positive—same-store rent/storage/blast revenue per physical pallet rose 2.2% and about 70% of 2026 rate increases are already secured. Balance-sheet and cost actions: Lineage ended the quarter with $7.9 billion of net debt and reported leverage of 6.0x while pursuing a strategic portfolio review and targeting >$50 million of administrative/indirect cost savings to boost financial flexibility and help reach a 5.0x–5.5x leverage target. Interested in Lineage, Inc.? Here are five stocks we like better. Lineage (NASDAQ:LINE) reported first-quarter 2026 results that came in ahead of management’s expectations, as the cold storage operator pointed to early signs of stabilization amid elevated industry supply and trade-related pressure. President and CEO Greg Lehmkuhl said the quarter “reinforces our view that the business is stabilizing as we manage through the industry headwinds we’ve highlighted over the past couple of quarters.” Lehmkuhl said total revenue was flat year-over-year, while adjusted EBITDA increased 3.3% to $314 million. Total adjusted funds from operations (AFFO) were $201 million, or $0.78 per share, down year-over-year. He attributed the decline primarily to the expiration of prior-year interest rate hedges, noting the impact was consistent with the company’s 2026 guidance. Excluding that hedge impact, Lehmkuhl said AFFO per share was “essentially flat” compared with the prior year. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries On occupancy, Lehmkuhl said same-store physical occupancy declined sequentially by 290 basis points to 76.4%, while economic occupancy was 82%. He said Lineage has worked with customers to “right-size guaranteed space” and described stabilizing occupancy trends as consistent with direct customer dialogue and recent commentary from food producers. Pricing remained a positive contributor. Lehmkuhl said same-store rent, storage, and blast revenue per physical pallet increased 2.2%, the fourth consecutive quarter of year-over-year increases. He added that the company remains “positive about realizing net price increases of 1%-2% this year.” Later in the Q&A, Lehmkuhl said Lineage had secured 70% of its rate increases for the year, supporting that expectation. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Throughput was softer, reflecting trade impacts. Lehmkuhl said same-store throughput remained weak and container volumes declined 17% year-over-year in the quarter, following a 9% decline in the fourth quarter of 2025. He said imports were down sharply, in part due to a difficult comparison against first-quarter 2025, when import volumes were pulled forward ahead of tariff actions. Despite those headwinds, Lehmkuhl noted same-store NOI declined 0.9% year-over-year, which he characterized as an improvement from prior trends. CFO Robb LeMasters said first-quarter total warehouse NOI increased 1.1% year-over-year to $364 million, while same-store NOI declined 0.9% to $347 million. Both were “ahead of our expectations,” he said. LeMasters added that same-store NOI benefited by approximately 250 basis points from favorable foreign exchange, which he said was contemplated in the company’s outlook. → Tyson Foods' Total Returns: Tasty Treats for Income Investors? LeMasters attributed the warehousing performance to strong international NOI growth and continued uptake of value-added services in multiple international geographies. Within the same-store warehouse pool, he said utilization was 76.4% and throughput volumes declined 3.3%, while services revenue per throughput pallet increased 50 basis points. In Global Integrated Solutions (GIS), LeMasters said NOI was flat year-over-year at $57 million, while the NOI margin improved 190 basis points to 18.3%. He attributed the margin improvement to an improved mix after the divestiture of a lower-margin international transportation business last year. Management said U.S. transportation and food services showed positive momentum, though this was offset by lower drayage activity tied to suppressed container volumes. Addressing a question about GIS revenue declines, Lehmkuhl said the revenue impact was driven by the European divestiture, calling the sold business “real low margin.” LeMasters added that excluding that transaction, the business grew slightly on the revenue side. Lineage maintained its full-year 2026 guidance. Lehmkuhl said the company still expects same-store NOI contraction of -4% to -1% and AFFO of $2.75 to $3.00 per share, adding that the quarter increased management’s confidence in achieving the midpoint of the range. LeMasters reiterated the broader guidance framework: Same-store NOI growth: -4% to -1% Total warehouse NOI growth: -2% to +1% GIS NOI growth: 0% to 2% Adjusted EBITDA: $1.25 billion to $1.3 billion AFFO: $2.75 to $3.00 per share Management said the first-quarter outperformance reflected factors it wants to see persist before changing the outlook. In response to an analyst question, Lehmkuhl said results can swing with customer and service mix across a network of 500 locations and 15,000 customers in 19 countries, and he cited particular strength in international operations. LeMasters said roughly one-third of the quarterly upside came from administrative expense timing and tighter controls, with some costs deferred into the second quarter and later in the year. He said administrative expense is expected to normalize to approximately $120 million to $125 million per quarter for the balance of 2026. LeMasters said the other two-thirds of the upside was tied to international factors, including discrete customer programs and trade flow disruptions that increased handling activity in certain regions. He pointed to examples including a short-term export lift in Canada and customer-specific events in APAC and EMEA, but emphasized these items can vary quarter-to-quarter. LeMasters said Lineage ended the quarter with $7.9 billion of total net debt and $1.6 billion of liquidity. He said the company has approximately $600 million of debt maturing in 2026, which management believes is “very manageable.” Reported leverage stood at 6.0x, and LeMasters said the company remains committed to bringing leverage into its targeted 5.0x to 5.5x range. He also cited an “adjusted net debt to transaction adjusted EBITDA” metric of 5.3x, which he said is more comparable to peers and considers the development pipeline and intra-period transactions. Management also discussed a strategic portfolio review aimed at enhancing financial flexibility. Lehmkuhl said the company is evaluating options ranging from individual asset sales to larger portfolio transactions and joint venture capital solutions. He said potential proceeds could be used for priorities including de-leveraging, funding development, pursuing acquisitions if market dislocations arise, or returning capital to shareholders. Lehmkuhl said the company is “encouraged by the progress to date,” but did not provide specifics. In response to a question about international versus North America, LeMasters cautioned that the review is still early and that “no decisions have been made.” He said the goal is to build balance sheet capacity while maintaining Lineage’s investment-grade profile. On costs, LeMasters said Lineage has identified a plan to remove $50 million or more from its administrative and indirect cost base, with approximately half of the savings expected in 2026 and the full benefit in 2027. He said the initiative includes centralizing indirect costs, internalizing third-party activities, and leveraging AI and digital transformation, and it requires a modest upfront investment of roughly $15 million that will be recorded below EBITDA in late 2026 and into 2027. Lehmkuhl described a U.S. cold storage market that has been absorbing new supply. He said from 2021 to 2025, U.S. public refrigerated warehouse supply increased about 15% on a square-foot basis, while consumer demand in served categories grew around 5%, implying roughly 10% excess capacity. He said Lineage delivered approximately 75% physical occupancy in 2025, down about 300 basis points from 2021. He also said about 85% of the U.S. NOI in assets held consistently since 2021 is located in markets with limited new supply growth or markets where supply was delivered earlier and rents have adjusted and stabilized. Late-cycle supply markets represent about 15% of U.S. NOI and are facing competitive pressure, he said, but management expects a pattern similar to earlier-cycle markets over time. Looking ahead, Lehmkuhl said new deliveries are expected to decline sharply in 2026 and that speculative development is less compelling in the current environment. He also said Lineage has been selectively idling facilities, having idled 10 in 2025 and planning “another handful” in 2026. On capital investments, Lehmkuhl said Lineage invested $130 million of growth capital in the quarter, primarily in development. He said the company has 22 facilities under construction or ramping and has invested $1.2 billion in those projects, which are expected to deliver more than $150 million of incremental EBITDA to the current run rate once stabilized. Asked about automated Tyson developments, Lehmkuhl said the projects are going as planned, adding that one Northeast distribution center has launched and is performing well. He said construction agreements have been locked in and Lineage does not expect incremental inflation pressure on those projects. Lineage Logistics, Inc (NASDAQ: LINE) is a leading provider of temperature-controlled industrial real estate and supply chain solutions. The company specializes in refrigerated and frozen storage, transportation, and ancillary services designed to support the global perishable goods industry. From food manufacturers and distributors to retailers and foodservice operators, Lineage offers tailored temperature management solutions that help clients optimize inventory turnover, reduce waste, and maintain product quality throughout the cold chain. Lineage's core services include ambient, refrigerated and frozen warehousing, cross-docking, transloading, and dedicated transportation. The article "Lineage Q1 Earnings Call Highlights" was originally published by MarketBeat.