The following discussion of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”). In addition, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity, and capital resources, that involve risks, uncertainties, and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including those set forth below and those described under Item 1A. Risk Factors of our 2025 Annual Report on Form 10-K.
Management’s Overview
We are the world’s largest global temperature-controlled warehouse REIT, with a modern and strategically located network of properties. Our business is competitively positioned to deliver a seamless end-to-end, technology-enabled experience for a well-diversified and stable customer base, each with their own unique requirements in the temperature-controlled supply chain. As of June 30, 2026, we operated an interconnected global temperature-controlled warehouse network, comprising approximately 87 million square feet and 3.1 billion cubic feet of capacity across 498 warehouses predominantly located in densely populated critical-distribution markets, with 323 in North America, 89 in Asia-Pacific, and 86 in Europe.
We analyze the results of our operations through the following segments:
•Global Warehousing - This segment utilizes our high-quality industrial real estate properties to provide temperature-controlled warehousing storage and services to our customers; and
•Global Integrated Solutions - This segment complements Global Warehousing with specialized cold-chain services to facilitate the movement of products through the food supply chain, create cost savings for customers and generate additional revenue for our Company.
Components of Our Results of Operations
Global Warehousing Segment. Our primary business is owning and operating temperature-controlled warehouses.
Revenue. Our Global Warehousing segment revenues are generated from storing frozen and perishable food and other products and providing related warehouse services for our customers. Storage revenues relate to the act of storing products for our customers within our warehouses. Storage revenues can be in the form of storage fees we charge customers for utilization of non-exclusive space or a set amount of reserved space in a warehouse, blast freezing fees we charge customers for utilization of specific ultra-cold spaces within a warehouse designed to rapidly reduce product temperature, and rent we charge customers for the lease of warehouse space pursuant to a lease agreement.
Warehouse services fees relate to handling and other services required to prepare and move customers’ pallets into, out of, and around the facilities. As part of our warehouse services, we offer receipt, handling, case-picking, retrieval of products from storage, building customized pallets and repackaging, order assembly and load consolidation, exporting and importing support services, container handling, cross-docking, quality control, and government-approved storage and inspection, among other services.
We utilize one of four types of contracts with our customers for use of space within our warehouses – warehouse agreements, rate letters, tariff sheets, and lease agreements. We may have one contract with a customer that covers all of the warehouses where we store products for the customer or, more typically, multiple contracts with the same customer, which may be driven by a variety of
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factors, such as the geographic location of the products stored by the customer, the type of products stored by the customer, or the different business units of a customer.
•Warehouse Agreements. Warehouse agreements are designed to accommodate the individual needs and characteristics of our customers and may include negotiated provisions, such as a fixed term, transactional pricing for warehouse services, pricing increase mechanisms based on inflationary cost increases and customer profile changes, a storage fee based on a minimum storage guarantee of the customer, additional storage fees based on on-demand storage used, a warehouseman’s lien on customer products held in our warehouses as security for payments, and provisions for interest and late payments. The initial term of our warehouse agreements generally ranges from one to five years for typical customer relationships and 10 to 20 years for build-to-suit warehouses. Renewal periods, in each case, generally range from one to five years. Inflationary price increase mechanisms may be fixed or tied to relevant market indices, giving us the ability to recover costs for wage increases, increases in rent, power, real estate, and other costs.
•Rate Letters. Rate letters are agreements that typically establish storage fee rates on products stored in our warehouses and rates for warehouse services pursuant to terms set forth on a standardized warehouse receipt and related rate schedule. Rate letters may have terms similar to our warehouse agreements, including minimum storage guarantees, and are typically for a term of one year or less. Rate letters generally require our customers to pay for storage in seven to 30-day increments.
•Tariff Sheets. Similar to rate letters, tariff sheets are agreements that establish storage fee rates on products stored in our warehouses and on an as-utilized, on-demand basis, pursuant to terms set forth on a standardized warehouse receipt but that do not require the customer to use our warehouse or for us to reserve space for these customers; however, our tariff sheets in certain jurisdictions may provide for a de minimis minimum monthly payment from a customer to maintain its access to a given warehouse. Our tariff sheets are updated annually, and the agreements are short-term in nature.
•Leases. We lease space to certain customers that desire to manage their own temperature-controlled warehousing or carry on processing operations in warehouses adjacent, or in close proximity, to their production facilities. Our customer leased warehouses are typically leased to third parties, such as food producers, distributors and retailers, under triple net lease agreements pursuant to which the customer is responsible for all costs incurred for facility maintenance, insurance, taxes, utilities, and other services necessary or appropriate for the applicable warehouse and the business conducted at the applicable warehouse. We typically charge rent based on the square footage leased in our warehouses. We consider the creditworthiness of a potential tenant to be an important consideration in determining whether to engage in a new lease agreement.
Cost of operations. Our Global Warehousing segment cost of operations consists primarily of labor, power, and other warehouse costs. Labor comprises the largest component of the cost of operations from our Global Warehousing segment and consists primarily of employee wages (both direct and indirect) and benefits, excluding stock-based compensation. Changes in our labor expense are driven by, among other things, changes in headcount, changes in compensation levels and associated performance incentives, the use of third-party labor to support our operations, changes in terms of collective bargaining agreements, changes in customer requirements and associated work content, workforce productivity, labor availability, governmental policies and regulations, and variability in costs associated with employer-provided benefits.
Our second-largest cost of operations is power utilized in the operation of our temperature-controlled warehouses. We may, from time to time, hedge our exposure to changes in power prices through fixed rate agreements. In addition, to the extent possible and appropriate, we may seek to mitigate or offset the impact of fluctuations in the price of power on our financial results through rate escalations or power surcharge provisions within our agreements with customers. We also look to implement energy saving alternatives to reduce energy consumption, including the installation of solar panels, state of the art refrigeration control systems, LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives for our fans and compressors, and rapid open/close doors. Additionally, business mix impacts our power expense depending on the temperature zone and type and frequency of freezing required (e.g., blast freezing).
Other warehouse costs include utilities other than power, insurance, real estate taxes, repairs and maintenance, rent under real property operating leases where applicable, equipment costs, warehouse consumables (e.g., pallets and shrink-wrap), personal protective equipment, warehouse administration, and other related facility and services costs.
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Global Integrated Solutions Segment. Our Global Integrated Solutions segment provides our customers with a comprehensive approach to facilitate the movement of products along the supply chain.
Revenues. Our Global Integrated Solutions segment revenues are primarily driven by transportation fees, which may also include fuel and capacity surcharges, to our customers for whom we arrange the transportation of their products. Within transportation, our core focus areas are multi-vendor less-than-full-truckload consolidation, drayage services to and from ports, transportation brokerage, and freight forwarding. We also provide rail transportation services and, in select markets, foodservice distribution and e-commerce fulfillment services.
Cost of operations. Our Global Integrated Solutions cost of operations consists primarily of third-party carrier charges, which are impacted by factors affecting those carriers, including truck and ocean liner capacity and driver and equipment availability. Additionally, in certain markets we employ drivers and operate assets to serve our customers. Costs to operate these assets include wages (excluding stock-based compensation), fuel, tolls, insurance, and maintenance.
Other Consolidated Operating Expenses.
Depreciation and amortization expense. Our depreciation and amortization expense result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to our warehouses, both owned and leased, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, our computer hardware, and internal use software. We also incur depreciation related to owned transportation assets. Amortization relates primarily to intangible assets for customer relationships and finance lease right-of-use assets.
General and administrative expense. Our general and administrative expense consists primarily of costs associated with the administration of our Global Warehousing and Global Integrated Solutions segments, including management wages and benefits, administrative, legal, business development, project management, sales, marketing, engineering, safety and compliance, food optimization, human resources, finance, accounting, network optimization, data science, and information technology personnel, transformational information technology expenses, equity incentive plans, communications and data processing, travel, professional fees, credit loss, training, office equipment, supplies, and transition services fees paid to Bay Grove for certain operating, strategic development, and financial services while we internalize such functions in the three years post-IPO. Trends in general and administrative expenses are influenced by changes in headcount and compensation levels and achievement of incentive compensation targets.
Acquisition, transaction, and other expense. Our acquisition, transaction, and other expense consists of costs with a high level of variability from period-to-period and include professional fees associated with planned and completed business expansion activities, and acquisition integration costs. It also includes legal and administrative costs associated with filing of other registration statements, and expenses incurred in connection with the coordinated settlement process that will occur for up to three years post-IPO for all legacy investors in BGLH. These costs are expensed as incurred. Employee-related expenses also include costs associated with acquisitions, such as acquisition-related severance and consulting agreements and certain cash-based incentive awards given to employees of legacy companies in acquisitions.
Restructuring, impairment, and (gain) loss on disposals. Our restructuring, impairment, and (gain) loss on disposals include certain contractual and negotiated severance and separation costs from exited former executives, costs related to reductions in headcount to achieve operational efficiencies, and costs associated with exiting non-strategic operations. We record such costs when there is a substantive plan for employee severance or employees are otherwise entitled to benefits (e.g., in case of one-time terminations) and related costs are probable and estimable. It also includes gains (losses) on dispositions of property, plant, and equipment and impairments of long-lived assets, net of related gains on insurance recoveries, excluding impairments of goodwill. This includes costs incurred as a result of property damage events, such as fires, including impairment and other asset write-offs, cleanup and remediation costs, and legal and administrative fees, net of any gains on insurance recoveries.
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Key Factors Affecting Our Business and Financial Results
Market Conditions
Our business is impacted by general economic and market conditions, as well as by national and international political, environmental, and socio-economic events.
Significant factors impacting our business have included:
•Inflation and Customer Rate Increases. We are continuing to see pricing pressure in certain markets with excess capacity, but overall pricing has remained stable within a range based upon types of services provided, seasonal harvests, and types of customers (local versus export). We believe that higher food costs have continued to impact end-consumers’ buying decisions for certain commodities, which could negatively impact specific customers; however, overall demand in retail and foodservice has grown recently, according to market data. Inflation overall has progressed toward more normal levels; however, tariff and other trade policies have continued to cause overall uncertainty and aggravated inflation in certain sectors, particularly in North America.
•Occupancy and Throughput. After a period of inventory adjustments from our customers over the last few years, we are seeing our occupancy levels stabilize and a return to more normal seasonal inventory patterns. Occupancy, throughput, and related ancillary services were also impacted by evolving tariff and trade policies. As trade agreements were reached, we saw stabilization in our customers’ business, and end-consumer demand became consistent with historic levels. Additionally, in recent years, new supply of temperature-controlled warehousing capacity has come online in select markets, which continues to impact occupancy and throughput in those markets with excess capacity. We are seeing slowdown in new supply coming online in 2026 compared to recent years. To optimize our Global Warehousing network and maximize NOI, we review our operations to determine whether it is beneficial to reposition or temporarily idle existing warehouses or consolidate existing operations. When such actions are taken, we strive to relocate customers affected by such activities into other warehouses in our Global Warehousing network.
•Labor. Following headwinds in recent years from wage inflation, labor shortages, and team member turnover, our team has focused on strategic initiatives to decrease turnover through our stock-based compensation awards, higher wages, engagement best practices, and training to help retain talent. Retention has improved due to these internal efforts and macroeconomic factors.
•Energy Costs. Following increased costs in prior years, particularly in our European operations, our power costs have stabilized. While we have limited direct exposure to the Middle East and we expect the near-term impact to be materially net neutral, we are monitoring developments with respect to the ongoing conflict with Iran, including the impact on global commodity prices. We have generally been able to pass increased power costs through to our customers, and, in certain cases, we use energy hedges, regulate utilities usage, and generate in-house solar energy, all mitigating the impact of energy cost increases on our operating results.
Refer to Item 1A. “Risk Factors” for additional information.
Foreign Currency Translation Impact on Our Operations
Our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation on revenues and expenses incurred by our operations outside the United States. Future fluctuations of foreign currency exchange rates and their impact on our consolidated financial statements are inherently uncertain. Our primary currency exposures are to the euro, Canadian dollar, British pound sterling, and Australian dollar. Revenues and expenses are typically denominated in the local currency of the country in which they are derived or incurred, which partially mitigates the net impact of foreign currency fluctuations on our operating results and margins.
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How We Assess the Performance of Our Business
Segment Net Operating Income or “Segment NOI”
We evaluate the performance of our segments based on their net operating income relative to our overall results of operations. We use the term “segment net operating income” or “segment NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense). We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting.
We also analyze the “segment NOI margin” to evaluate the performance of our segments, which we calculate as segment NOI divided by segment revenues.
Same Warehouse Analysis
In addition to segment NOI, we further evaluate the performance of our Global Warehousing segment using a “same warehouse” analysis, which isolates the operating performance of a consistent population of warehouses from period to period. We define our “same warehouse” population annually at the beginning of the calendar year. Our same warehouse population includes properties that were owned, leased, or managed for the entirety of two comparable periods and that have reported at least twelve months of consecutive normalized operations prior to January 1 of the current calendar year. We define “normalized operations” as properties that have been open for operation or lease after development or significant modification, including the expansion of a warehouse footprint or a warehouse rehabilitation subsequent to an event, such as a natural disaster or similar event causing disruption to operations. In addition, our definition of “normalized operations” takes into account changes in the ownership structure (e.g., purchase of a previously leased warehouse would result in a change in the nature of expenditures in the compared periods), which would impact comparability in our Global Warehousing segment NOI.
Acquired properties will be included in the “same warehouse” population if owned or leased by us as of the first business day of the prior calendar year and still owned by us as of the end of the current reporting period, unless the property is under development. The “same warehouse” pool can also be adjusted during the year to remove properties that were sold, entering development, or in operational transition subsequent to the beginning of the current calendar year. As such, the “same warehouse” population for the period ended June 30, 2026 includes all properties that we owned as of January 1, 2025 which had both been owned and had reached “normalized operations” by January 1, 2025.
We calculate “same warehouse NOI” as revenues for the same warehouse population less its cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense). We evaluate the performance of the warehouses we own, lease, or manage using a “same warehouse” analysis, and we believe that same warehouse NOI is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period, thereby eliminating the effects of changes in the composition of our warehouse portfolio on performance measures.
The following table shows the composition of our warehouse portfolio as of June 30, 2026.
Total warehouses (1) 479
Same warehouse 423
Non-same warehouse 56
(1) Excludes 19 warehouses in our Global Integrated Solutions segment as of June 30, 2026. We categorize warehouses as part of our Global Integrated Solutions segment if the primary business conducted in those warehouses is within our Global Integrated Solutions segment.
Same warehouse NOI is not a measurement of financial performance under GAAP. In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same warehouse or calculate same warehouse NOI in a manner consistent with our definition or calculation. Same warehouse NOI should be considered as a supplement, but not as an alternative, to our results calculated in accordance with GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.
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Economic Occupancy of Our Warehouses
We define average economic occupancy as the aggregate number of physical pallets on hand and any additional pallet positions otherwise contractually committed and paid for by customers for a given period divided by the approximate number of average physical pallet positions in our warehouse for the applicable period. We estimate the number of contractually committed pallet positions by taking into account the actual pallet commitment specified in each customer’s warehouse agreement and subtracting the physical pallets on hand for that customer. We regard economic occupancy as an important driver of our financial results.
Physical Occupancy of Our Warehouses
We define average physical occupancy as the average number of physical pallets on hand divided by the estimated number of average physical pallet positions in our warehouses for the applicable period. We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if-racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and other warehouse attributes. We regard physical occupancy as an important driver of our financial results.
Throughput at Our Warehouses
The level and nature of throughput at our warehouses is an important factor impacting our warehouse services revenues. Throughput refers to the volume of inbound pallets that enter our warehouses plus the volume of outbound pallets that exit our warehouses, divided by two. Higher levels of throughput drive warehouse services revenues in our Global Warehousing segment, as customers are typically billed transactionally for these services. The nature of throughput may be driven by the expected inventory turns of the underlying product or commodity. Throughput pallets can be influenced by both customers’ production as well as shifts in demand preferences. Customers’ production levels, which respond to market conditions, labor availability, supply chain dynamics, and consumer preferences, may impact inbound pallets. Similarly, a change in inventory turnover due to shift in consumer demand may impact outbound pallets.
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Results of Operations
The following discussion represents our analysis of results of operations for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025.
Comparison of Results 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 three months ended June 30, 2026 and 2025.
Three Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 514 $ 514 — %
Warehouse services 491 456 7.7 %
Total global warehousing segment revenues 1,005 970 3.6 %
Labor(1) 391 368 6.3 %
Power 55 51 7.8 %
Other warehouse costs(2) 192 184 4.3 %
Total global warehousing segment cost of operations 638 603 5.8 %
Global warehousing segment NOI $ 367 $ 367 — %
Total global warehousing segment margin 36.5 % 37.8 % (130) bps
Number of warehouse sites 479 481
Warehouse storage(3)
Average economic occupancy
Average occupied economic pallets (in thousands) 8,151 7,998 1.9 %
Economic occupancy percentage 80.0 % 79.1 % 90 bps
Storage revenue per economic occupied pallet $ 63.06 $ 64.12 (1.7) %
Average physical occupancy
Average physical occupied pallets (in thousands) 7,522 7,412 1.5 %
Average physical pallet positions (in thousands) 10,188 10,105 0.8 %
Physical occupancy percentage 73.8 % 73.3 % 50 bps
Storage revenue per physical occupied pallet $ 68.33 $ 69.20 (1.3) %
Warehouse services(3)
Throughput pallets (in thousands) 13,910 13,130 5.9 %
Warehouse services revenue per throughput pallet $ 32.21 $ 31.77 1.4 %
(1) Labor cost of operations excludes $3 million and $4 million of stock-based compensation expense and related employer-paid payroll taxes for the three months ended June 30, 2026 and 2025, respectively.
(2) Includes real estate rent expense (operating leases) of $23 million and $23 million for the three months ended June 30, 2026 and 2025, respectively, and non-real estate rent expense (equipment lease and rentals) of $7 million and $5 million for the three months ended June 30, 2026 and 2025, respectively.
(3) Warehouse storage and warehouse services metrics exclude facilities owned or leased by the customer for which we manage the warehouse operations on their behalf (“managed sites”).
Global Warehousing segment revenues were $1,005 million for the three months ended June 30, 2026, an increase of $35 million, or 3.6%, compared to $970 million for the three months ended June 30, 2025. The increase was primarily driven by a $31 million increase in our non-same warehouse pool and a $4 million increase in our same warehouse pool, further discussed below. The
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foreign currency translation of revenues earned by our foreign operations had a $10 million favorable impact compared to the three months ended June 30, 2025.
Global Warehousing segment cost of operations was $638 million for the three months ended June 30, 2026, an increase of $35 million, or 5.8%, compared to $603 million for the three months ended June 30, 2025. The increase was primarily driven by a $21 million increase in costs of our non-same warehouse pool and a $14 million increase in costs of our same warehouse pool, further discussed below. The foreign currency translation of cost of operations from our foreign operations had a $7 million unfavorable impact compared to the three months ended June 30, 2025.
Global Warehousing segment NOI was $367 million for the three months ended June 30, 2026, consistent with $367 million for the three months ended June 30, 2025. This was primarily driven by a $10 million increase in our non-same warehouse pool, offset by a $10 million decrease in our same warehouse pool. The foreign currency translation from our foreign operations had a $3 million net favorable impact compared to the three months ended June 30, 2025.
Same Warehouse Results
The following table presents the operating results for our same warehouses for the three months ended June 30, 2026 and 2025.
Three Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 469 $ 468 0.2 %
Warehouse services 437 434 0.7 %
Total same warehouse revenues 906 902 0.4 %
Labor 349 340 2.6 %
Power 50 47 6.4 %
Other warehouse costs 170 168 1.2 %
Total same warehouse cost of operations 569 555 2.5 %
Same warehouse NOI $ 337 $ 347 (2.9) %
Total same warehouse margin 37.2 % 38.5 % (130) bps
Number of same warehouse sites(1) 423 423
Warehouse storage(2)
Economic occupancy
Average occupied economic pallets (in thousands) 7,498 7,461 0.5 %
Economic occupancy percentage 81.5 % 80.8 % 70 bps
Storage revenue per economic occupied pallet $ 62.53 $ 62.75 (0.4) %
Physical occupancy
Average physical occupied pallets (in thousands) 6,969 6,913 0.8 %
Average physical pallet positions (in thousands) 9,197 9,235 (0.4) %
Physical occupancy percentage 75.8 % 74.9 % 90 bps
Storage revenue per physical occupied pallet $ 67.28 $ 67.73 (0.7) %
Warehouse services(2)
Throughput pallets (in thousands) 12,279 12,502 (1.8) %
Warehouse services revenue per throughput pallet $ 32.18 $ 31.52 2.1 %
(1) Refer to our “Same Warehouse Analysis,” which describes the composition of our same warehouse pool.
(2) Warehouse storage and warehouse services metrics exclude managed sites.
Same warehouse storage revenues increased $1 million, or 0.2%, compared to the three months ended June 30, 2025, primarily driven by higher average occupancy, partially offset by unfavorable rates. Economic occupancy increased by 70 basis points,
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while same warehouse storage revenues per economic occupied pallet decreased (0.4)% compared to three months ended June 30, 2025.
Same warehouse services revenues increased $3 million, or 0.7%, compared to the three months ended June 30, 2025, primarily due to higher average rates and growth in international markets. Same warehouse services revenue per throughput pallet increased 2.1% compared to the three months ended June 30, 2025.
Same warehouse cost of operations increased $14 million, or 2.5%, compared to the three months ended June 30, 2025, primarily driven by higher labor costs resulting from increases in wages for temporary contract labor, as well as warehouse services growth in international markets.
Non-Same Warehouse Results
The following table presents the operating results for our non-same warehouses for the three months ended June 30, 2026 and 2025.
Three Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 45 $ 46 (2.2) %
Warehouse services 54 22 145.5 %
Total non-same warehouse revenues 99 68 45.6 %
Labor 42 28 50.0 %
Power 5 4 25.0 %
Other warehouse costs 22 16 37.5 %
Total non-same warehouse cost of operations 69 48 43.8 %
Non-same warehouse NOI $ 30 $ 20 50.0 %
Total non-same warehouse margin 30.3 % 29.4 % 90 bps
Number of non-same warehouse sites(1) 56 58
Warehouse storage (2)
Economic occupancy
Average occupied economic pallets (in thousands) 653 537 21.6 %
Economic occupancy percentage 65.9 % 61.7 % 420 bps
Storage revenue per economic occupied pallet $ 69.14 $ 83.13 (16.8) %
Physical occupancy
Average physical occupied pallets (in thousands) 553 499 10.8 %
Average physical pallet positions (in thousands) 991 870 13.9 %
Physical occupancy percentage 55.8 % 57.4 % (160) bps
Storage revenue per physical occupied pallet $ 81.58 $ 89.53 (8.9) %
Warehouse services (2)
Throughput pallets (in thousands) 1,631 628 159.7 %
Warehouse services revenue per throughput pallet $ 32.42 $ 36.76 (11.8) %
(1) Refer to our “Same Warehouse Analysis,” which describes the composition of our non-same warehouse pool.
(2) Warehouse storage and warehouse services metrics exclude managed sites.
Non-same warehouse revenues increased $31 million, or 45.6%, compared to the three months ended June 30, 2025, including approximately $21 million from acquisitions and $17 million from recently completed greenfield and expansion projects, partially offset by a $7 million decrease from other non-same warehouse sites.
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Non-same warehouse cost of operations increased $21 million, or 43.8%, compared to the three months ended June 30, 2025, including approximately $15 million from acquisitions, $10 million from recently completed greenfield and expansion projects, partially offset by a $4 million decrease from other non-same warehouse sites.
Global Integrated Solutions Segment
The following table presents the operating results of our Global Integrated Solutions segment for the three months ended June 30, 2026 and 2025.
Three Months Ended June 30,
(in millions) 2026 2025 Change
Global Integrated Solutions segment revenues $ 356 $ 380 (6.3) %
Global Integrated Solutions segment cost of operations(1) 295 312 (5.4) %
Global Integrated Solutions segment NOI $ 61 $ 68 (10.3) %
Global Integrated Solutions margin 17.1 % 17.9 % (80) bps
(1) Cost of operations excludes less than one million and $1 million of stock-based compensation expense and related employer-paid payroll taxes for the three months ended June 30, 2026 and 2025, respectively.
Global Integrated Solutions segment revenues were $356 million for the three months ended June 30, 2026, a decrease of $24 million, or 6.3%, compared to $380 million for the three months ended June 30, 2025. The decrease was primarily driven by the divestiture of the Spain Transportation business, which occurred in August 2025, partially offset by higher transportation volumes. The foreign currency translation of revenues earned by our foreign operations had a $3 million favorable impact compared to the three months ended June 30, 2025.
Global Integrated Solutions segment cost of operations was $295 million for the three months ended June 30, 2026, a decrease of $17 million, or 5.4%, compared to $312 million for the three months ended June 30, 2025. The decrease was primarily driven by the above-mentioned divestiture of the Spain Transportation business, partially offset by $7 million expense associated with a preliminary legal settlement and higher transportation and logistics expenses reflecting the increased cost of fuel and third-party labor. The foreign currency translation of cost of operations from our foreign operations had a $3 million unfavorable impact compared to the three months ended June 30, 2025.
Global Integrated Solutions segment NOI was $61 million for the three months ended June 30, 2026, a decrease of $7 million, or 10.3%, compared to $68 million for the three months ended June 30, 2025. Foreign currency translation had a less than $1 million net favorable impact compared to the three months ended June 30, 2025.
Other Consolidated Operating Expenses
Three Months Ended June 30, Change
(in millions) 2026 2025 %
Other consolidated operating expense:
Depreciation and amortization expense $ 237 $ 224 5.8 %
General and administrative expense $ 138 $ 143 (3.5) %
Acquisition, transaction, and other expense $ — $ 37 n.m.(1)
Restructuring, impairment, and (gain) loss on disposals $ (4) $ 3 n.m.(1)
(1) n.m. (not meaningful) throughout this Quarterly Report is used in place of percentage changes where the change is excessive, involves a comparison between income and loss amounts, or involves a comparison to zero.
Depreciation and amortization expense. Depreciation and amortization expense was $237 million for the three months ended June 30, 2026, an increase of $13 million, or 5.8%, compared to $224 million for the three months ended June 30, 2025. The increase was primarily related to acquisitions, greenfield and expansion projects, and information technology investments.
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General and administrative expense. General and administrative expense was $138 million for the three months ended June 30, 2026, a decrease of $5 million, or 3.5%, compared to $143 million for the three months ended June 30, 2025. The decrease was primarily due to lower professional fees, including legal, tax, and audit fees and broader cost-saving initiatives. For the three months ended June 30, 2026 and 2025, general and administrative expense was 10.1% and 10.6% of total revenues, respectively.
Acquisition, transaction, and other expense. Acquisition, transaction, and other expense was less than $1 million for the three months ended June 30, 2026, compared to $37 million for the three months ended June 30, 2025. The decrease was primarily due to 2025 fair value adjustments of the Put Options issued in connection with the IPO and stock-based compensation expense for one-time IPO awards, as well as lower legal and professional fees from reduced acquisition activity. For further detail on stock-based compensation costs, see Note 13, Stock-based compensation to the condensed consolidated financial statements included in this Quarterly Report.
Restructuring, impairment, and (gain) loss on disposals. Restructuring, impairment, and (gain) loss on disposals were a net gain of $4 million for the three months ended June 30, 2026, a decrease of $7 million compared to net expenses of $3 million for the three months ended June 30, 2025. The decrease was primarily due to $7 million of estimated lease exit costs related to a previously acquired facility that were incurred in the three months ended June 30, 2025 and did not recur in 2026, a $5 million decrease in severance costs, and a $3 million favorable impact from fixed asset disposal activity, partially offset by $8 million of impairment loss and legal and administrative fees related to a fire that occurred in our Los Angeles, California warehouse in June 2026. For further detail related to the Los Angeles, California warehouse fire, see Note 15, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report.
Other Income (Expense)
The following table presents other items of income and expense for the three months ended June 30, 2026 and 2025.
Three Months Ended June 30, Change
(in millions) 2026 2025 %
Other income (expense):
Interest expense, net $ (87) $ (67) 29.9 %
Gain (loss) on foreign currency transactions, net $ — $ 26 n.m.
Equity income (loss), net of tax $ — $ 3 n.m.
Other nonoperating income (expense), net $ — $ 1 n.m.
Interest expense, net. We reported net interest expense of $87 million for the three months ended June 30, 2026, an increase of $20 million, or 29.9%, compared to $67 million for the three months ended June 30, 2025, primarily driven by a decrease in income generated from hedging instruments, the increase of average debt balances, and the extension of our debt maturity via the issuance of new senior unsecured notes in 2025. The impact driven by the aforementioned factors was partially offset by decreases in benchmark interest rates determining the interest rates on our variable-rate debt.
The average effective interest rate of our outstanding debt was 4.3% for the three months ended June 30, 2026, the same as 4.3% for the three months ended June 30, 2025. The expiration of hedging instruments outstanding during the three months ended June 30, 2025, along with higher total borrowings between June 30, 2025 and June 30, 2026, have resulted in our current hedging instruments accounting for a reduced portion of overall borrowings. Additionally, the fixed rates at which our variable-rate borrowings are effectively locked in are higher under the current hedging instruments relative to the prior ones. When taking into account income generated from hedging instruments, the average effective interest rate of our outstanding debt was 4.2% for the three months ended June 30, 2026, an increase from 3.0% for the three months ended June 30, 2025. For additional information regarding our net interest expense, see Note 10, Interest expense in our condensed consolidated financial statements included in this Quarterly Report.
Gain (loss) on foreign currency transactions, net. We did not recognize a significant gain (loss) on foreign currency transactions for the three months ended June 30, 2026, compared to a net gain of $26 million for the three months ended June 30, 2025. The decrease in gain on foreign currency exchange was due to movements in foreign currency exchange rates against the U.S. dollar, primarily driven by the euro.
Equity income (loss), net of tax. We did not recognize significant income (loss) from equity method investments for the three months ended June 30, 2026, compared to net income of $3 million for the three months ended June 30, 2025.
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Income Tax Expense (Benefit)
Income tax benefit for the three months ended June 30, 2026 was $1 million, which represented a decrease of $6 million from an income tax benefit of $7 million for the three months ended June 30, 2025. The tax expense in 2026 and 2025 was principally the result of the tax-effect of pre-tax earnings in various jurisdictions, nondeductible expenses, including stock-based compensation and interest expense, and financial statement losses for which no tax benefit was recognized. The change in income tax benefit between the periods is primarily a result of the changes in pre-tax earnings between various tax filing groups. Our income taxes are discussed in more detail in Note 7, Income taxes to the condensed consolidated financial statements included in this Quarterly Report.
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Comparison of Results for the Six 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.
Six Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 1,028 $ 1,005 2.3 %
Warehouse services 962 909 5.8 %
Total Global Warehousing segment revenues 1,990 1,914 4.0 %
Labor(1) 772 724 6.6 %
Power 109 100 9.0 %
Other warehouse costs(2) 378 363 4.1 %
Total Global Warehousing segment cost of operations 1,259 1,187 6.1 %
Global warehousing segment NOI $ 731 $ 727 0.6 %
Total Global Warehousing segment margin 36.7 % 38.0 % (130) bps
Number of warehouse sites 479 481
Warehouse storage(3)
Average economic occupancy
Average occupied economic pallets (in thousands) 8,158 8,027 1.6 %
Economic occupancy percentage 80.0 % 80.1 % (10) bps
Storage revenue per economic occupied pallet $ 62.95 $ 62.52 0.7 %
Average physical occupancy
Average physical occupied pallets (in thousands) 7,563 7,459 1.4 %
Average physical pallet positions (in thousands) 10,202 10,027 1.7 %
Physical occupancy percentage 74.1 % 74.4 % (30) bps
Storage revenue per physical occupied pallet $ 67.90 $ 67.29 0.9 %
Warehouse services(3)
Throughput pallets (in thousands) 27,456 26,114 5.1 %
Warehouse services revenue per throughput pallet $ 32.02 $ 31.86 0.5 %
(1) Labor cost of operations excludes $5 million and $4 million of stock-based compensation expense and related employer-paid payroll taxes for the six months ended June 30, 2026 and 2025, respectively.
(2) Includes real estate rent expense (operating leases) of $47 million and $46 million for the six months ended June 30, 2026 and 2025, respectively, and non-real estate rent expense (equipment lease and rentals) of $11 million and $10 million for the six months ended June 30, 2026 and 2025, respectively.
(3) Warehouse storage and warehouse services metrics exclude managed sites.
Global Warehousing segment revenues were $1,990 million for the six months ended June 30, 2026, an increase of $76 million, or 4.0%, compared to $1,914 million for the six months ended June 30, 2025. The increase included a $71 million net increase in our non-same warehouse pool and a $5 million increase in our same warehouse pool, further discussed below. The foreign currency translation of revenues earned by our foreign operations had a $36 million favorable impact compared to the six months ended June 30, 2025.
Global Warehousing segment cost of operations was $1,259 million for the six months ended June 30, 2026, an increase of $72 million, or 6.1%, compared to $1,187 million for the six months ended June 30, 2025. The increase included a $54 million net increase in our non-same warehouse pool and an $18 million increase in our same warehouse pool, further discussed below. The foreign currency translation of cost of operations from our foreign operations had a $24 million unfavorable impact compared to
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the six months ended June 30, 2025.
Global Warehousing segment NOI was $731 million for the six months ended June 30, 2026, an increase of $4 million, or 0.6%, compared to $727 million for the six months ended June 30, 2025. The net increase included a $17 million increase in our non-same warehouse pool, partially offset by a net decrease of $13 million in our same warehouse pool. The foreign currency translation from our foreign operations had a $12 million net favorable impact compared to the six months ended June 30, 2025.
Same Warehouse Results
The following table presents the operating results for our same warehouses for the six months ended June 30, 2026 and 2025.
Six Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 940 $ 930 1.1 %
Warehouse services 861 866 (0.6) %
Total same warehouse revenues 1,801 1,796 0.3 %
Labor 689 679 1.5 %
Power 98 92 6.5 %
Other warehouse costs 337 335 0.6 %
Total same warehouse cost of operations 1,124 1,106 1.6 %
Same warehouse NOI $ 677 $ 690 (1.9) %
Total same warehouse margin 37.6 % 38.4 % (80) bps
Number of same warehouse sites(1) 423 423
Warehouse storage(2)
Economic occupancy
Average occupied economic pallets (in thousands) 7,534 7,531 — %
Economic occupancy percentage 81.8 % 81.5 % 30 bps
Storage revenue per economic occupied pallet $ 62.33 $ 61.73 1.0 %
Physical occupancy
Average physical occupied pallets (in thousands) 7,012 7,003 0.1 %
Average physical pallet positions (in thousands) 9,209 9,237 (0.3) %
Physical occupancy percentage 76.1 % 75.8 % 30 bps
Storage revenue per physical occupied pallet $ 66.97 $ 66.39 0.9 %
Warehouse services(2)
Throughput pallets (in thousands) 24,284 24,931 (2.6) %
Warehouse services revenue per throughput pallet $ 32.09 $ 31.67 1.3 %
(1) Refer to our “Same Warehouse Analysis,” which describes the composition of our same warehouse pool.
(2) Warehouse storage and warehouse services metrics exclude managed sites.
Same warehouse storage revenues increased $10 million, or 1.1%, compared to the six months ended June 30, 2025, primarily driven by higher occupancy and increased rates. Economic occupancy increased by 30 basis points and same warehouse storage revenues per economic occupied pallet increased by 1.0% compared to the six months ended June 30, 2025.
Same warehouse services revenues decreased $5 million, or 0.6%, compared to the six months ended June 30, 2025, primarily driven by lower throughput volumes, partially offset by favorable rates. Throughput pallets at our same warehouses decreased 2.6%, while same warehouse services revenue per throughput pallet increased 1.3% compared to the six months ended June 30, 2025.
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Same warehouse cost of operations increased $18 million, or 1.6%, compared to the six months ended June 30, 2025, primarily resulting from inflationary pressures and unfavorable net foreign currency impact.
Non-Same Warehouse Results
The following table presents the operating results for our non-same warehouses for the six months ended June 30, 2026 and 2025.
Six Months Ended June 30,
(in millions except revenue per pallet) 2026 2025 Change
Warehouse storage $ 88 $ 75 17.3 %
Warehouse services 101 43 134.9 %
Total non-same warehouse revenues 189 118 60.2 %
Labor 83 45 84.4 %
Power 11 8 37.5 %
Other warehouse costs 41 28 46.4 %
Total non-same warehouse cost of operations 135 81 66.7 %
Non-same warehouse NOI $ 54 $ 37 45.9 %
Total non-same warehouse margin 28.6 % 31.4 % (280) bps
Number of non-same warehouse sites(1) 56 58
Warehouse storage(2)
Economic occupancy
Average occupied economic pallets (in thousands) 624 496 25.8 %
Economic occupancy percentage 62.8 % 62.8 % — bps
Storage revenue per economic occupied pallet $ 70.59 $ 73.95 (4.5) %
Physical occupancy
Average physical occupied pallets (in thousands) 551 456 20.8 %
Average physical pallet positions (in thousands) 993 790 25.7 %
Physical occupancy percentage 55.5 % 57.7 % (220) bps
Storage revenue per physical occupied pallet $ 79.64 $ 80.45 (1.0) %
Warehouse services(2)
Throughput pallets (in thousands) 3,172 1,183 168.1 %
Warehouse services revenue per throughput pallet $ 31.48 $ 35.81 (12.1) %
(1) Refer to our “Same Warehouse Analysis,” which describes the composition of our non-same warehouse pool.
(2) Warehouse storage and warehouse services metrics exclude managed sites.
Non-same warehouse revenues increased $71 million, or 60.2%, compared to the six months ended June 30, 2025, including approximately $60 million from acquisitions and $29 million from recently completed greenfield and expansion projects, partially offset by a $13 million net decrease from other non-same warehouse sites and a $5 million decrease from divestitures.
Non-same warehouse cost of operations increased $54 million, or 66.7%, compared to the six months ended June 30, 2025, including approximately $42 million from acquisitions and $18 million from recently completed greenfield and expansion projects, partially offset by a $3 million net decrease from other non-same warehouse sites and a $3 million decrease from divestitures.
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Global Integrated Solutions Segment
The following table presents the operating results of our Global Integrated Solutions segment for the six months ended June 30, 2026 and 2025.
Six Months Ended June 30,
(in millions) 2026 2025 Change
Global Integrated Solutions segment revenues $ 668 $ 728 (8.2) %
Global Integrated Solutions segment cost of operations(1) 550 603 (8.8) %
Global Integrated Solutions segment NOI $ 118 $ 125 (5.6) %
Global Integrated Solutions margin 17.7 % 17.2 % 50 bps
(1) Cost of operations excludes $1 million and $2 million of stock-based compensation expense and related employer-paid payroll taxes for the six months ended June 30, 2026 and 2025, respectively.
Global Integrated Solutions segment revenues were $668 million for the six months ended June 30, 2026, a decrease of $60 million, or 8.2%, compared to $728 million for the six months ended June 30, 2025. The decrease was primarily due to the divestiture of the Spain Transportation business which occurred in August 2025, partially offset by higher transportation and foodservice volumes and rates. In addition, the foreign currency translation of revenues earned by our foreign operations had a $12 million favorable impact compared to the six months ended June 30, 2025.
Global Integrated Solutions segment cost of operations was $550 million for the six months ended June 30, 2026, a decrease of $53 million, or 8.8%, compared to $603 million for the six months ended June 30, 2025. The decrease was primarily driven by the above-mentioned divestiture of the Spain Transportation business, partially offset by $7 million of expense associated with a preliminary legal settlement and higher transportation and logistics expenses reflecting the increased cost of fuel and third-party labor. The foreign currency translation of cost of operations from our foreign operations had an $11 million unfavorable impact compared to the six months ended June 30, 2025.
Global Integrated Solutions segment NOI was $118 million for the six months ended June 30, 2026, a decrease of $7 million, or 5.6%, compared to $125 million for the six months ended June 30, 2025, due to the factors discussed above. NOI margin was positively impacted by the sale of the Spain Transportation business. Foreign currency translation had a $1 million net favorable impact compared to the six months ended June 30, 2025.
Other Consolidated Operating Expense
The following table presents other consolidated operating expense for the six months ended June 30, 2026 and 2025.
Six Months Ended June 30,
(in millions) 2026 2025 Change
Other consolidated operating expense:
Depreciation and amortization expense $ 470 $ 436 7.8 %
General and administrative expense $ 279 $ 297 (6.1) %
Acquisition, transaction, and other expense $ 4 $ 52 (92.3) %
Restructuring, impairment, and (gain) loss on disposals $ (1) $ (18) n.m.
Depreciation and amortization expense. Depreciation and amortization expense was $470 million for the six months ended June 30, 2026, an increase of $34 million, or 7.8%, compared to $436 million for the six months ended June 30, 2025. The increase was primarily related to acquisitions and greenfield and expansion projects.
General and administrative expense. General and administrative expense was $279 million for the six months ended June 30, 2026, a decrease of $18 million, or 6.1%, compared to $297 million for the six months ended June 30, 2025. The decrease was primarily due to an $11 million reduction in stock-based compensation expense, mainly for unfavorable forecasted performance for the 2024 and 2025 performance awards (see Note 13, Stock-based compensation to the condensed consolidated financial statements included in this Quarterly Report for details). The decrease was also attributable to lower professional fees, including
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legal, tax, and audit fees and broader cost-saving initiatives. For the six months ended June 30, 2026, general and administrative expenses were 10.5% of total revenues compared to 11.2% of total revenues for the six months ended June 30, 2025.
Acquisition, transaction, and other expense. Acquisition, transaction, and other expense was $4 million for the six months ended June 30, 2026, a decrease of $48 million compared to $52 million for the six months ended June 30, 2025. The decrease was primarily due to fair value adjustments of the Put Options issued in connection with the IPO and stock-based compensation expense for one-time IPO awards, as well as lower legal and professional fees from reduced acquisition activity. For further detail on stock-based compensation costs, see Note 13, Stock-based compensation to the condensed consolidated financial statements included in this Quarterly Report.
Restructuring, impairment, and (gain) loss on disposals. Restructuring, impairment, and (gain) loss on disposals were a net gain of $1 million for the six months ended June 30, 2026, as compared to a net gain of $18 million for the six months ended June 30, 2025. The change was primarily driven by a $22 million reduction in net gains associated with the Kennewick, Washington warehouse fire, reflecting $17 million of lower insurance recovery proceeds and $4 million of incremental costs related to a customer product-damage claim and associated legal fees, as well as $8 million of impairment loss and legal and administrative fees related to a fire that occurred in our Los Angeles, California warehouse in June 2026. These decreases were partially offset by $7 million of estimated lease exit costs related to a previously acquired facility that were incurred in the six months ended June 30, 2025 and did not recur in 2026, as well as $5 million of net other favorable items, including disposals of fixed assets.
For further detail related to the Kennewick, Washington and Los Angeles, California warehouse fires, see Note 15, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report.
Other Income (Expense)
The following table presents other items of income and expense for the six months ended June 30, 2026 and 2025.
Six Months Ended June 30,
(in millions) 2026 2025 Change
Other income (expense):
Interest expense, net $ (171) $ (127) 34.6 %
Gain (loss) on foreign currency transactions, net $ 3 $ 42 n.m.
Equity income (loss), net of tax $ (3) $ (1) 200.0 %
Other nonoperating income (expense), net $ 1 $ 1 n.m.
Interest expense, net. We reported net interest expense of $171 million for the six months ended June 30, 2026, an increase of $44 million, or 34.6%, compared to $127 million for the six months ended June 30, 2025, primarily driven by a decrease in income generated from hedging instruments, the increase of average debt balances, and the extension of our debt maturity via the issuance of new senior unsecured notes in 2025. The impact driven by the aforementioned factors was partially offset by decreases in benchmark interest rates determining the interest rates on our variable-rate debt.
The average effective interest rate of our outstanding debt was 4.2% for the six months ended June 30, 2026, the same as 4.2% for the six months ended June 30, 2025. The expiration of hedging instruments outstanding during the six months ended June 30, 2025, along with higher total borrowings between June 30, 2025 and June 30, 2026, have resulted in our current hedged instruments accounting for a reduced portion of overall borrowings. Additionally the fixed rates at which our variable-rate borrowings are effectively locked in are higher under the current hedging instruments relative to the prior ones. When taking into account income generated from hedging instruments, the average effective interest rate of our outstanding debt was 4.1% for the six months ended June 30, 2026, an increase from 2.8% for the six months ended June 30, 2025. For additional information regarding our net interest expense, see Note 10, Interest expense in our condensed consolidated financial statements included in this Quarterly Report.
Gain (loss) on foreign currency transactions, net. We reported a net foreign currency exchange gain of $3 million for the six months ended June 30, 2026 compared to a net gain of $42 million for the six months ended June 30, 2025. The decrease in gain on foreign currency exchange was due to movements in foreign currency exchange rates against the U.S. dollar, primarily driven by the euro.
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Equity income (loss), net of tax. We reported $3 million of net loss from equity method investments for the six months ended June 30, 2026, compared to a net loss of $1 million for the six months ended June 30, 2025. The net loss in both periods was primarily related to our investment in Emergent Cold LatAm Holdings, LLC.
Income Tax Expense (Benefit)
Income tax expense for the six months ended June 30, 2026 was $3 million, an increase of $2 million from an income tax expense of $1 million for the six months ended June 30, 2025. The tax expense in 2026 was principally the result of the tax-effect of pre-tax earnings in various jurisdictions, nondeductible expenses including stock-based compensation and interest expense, and financial statement losses for which no tax benefit was recognized. The tax expense in 2025 was principally created by the tax-effect of pre-tax earnings in various jurisdictions and nondeductible stock-based compensation, reduced by tax adjustments related to REIT activity. Our income taxes are discussed in more detail in Note 7, Income taxes to the condensed consolidated financial statements included in this Quarterly Report.
Non-GAAP Financial Measures
We use the following non-GAAP financial measures as supplemental performance measures of our business: segment NOI, FFO, Core FFO, Adjusted FFO, EBITDA, EBITDAre, and Adjusted EBITDA. We also use same warehouse and non-same warehouse metrics described above.
We calculate total segment NOI (or “NOI”) as our total revenues less our cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense and related employer-paid payroll taxes from grants under our equity incentive plans, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense). We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with ASC 280, Segment Reporting. We believe segment NOI is helpful to investors as a supplemental performance measure to net income because it assists both investors and management in understanding the core operations of our business. There is no industry definition of segment NOI and, as a result, other REITs may calculate segment NOI or other similarly-captioned metrics in a manner different than we do.
The table below reconciles total segment NOI to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Net income (loss) $ (32) $ (7) $ (83) $ (7)
Stock-based compensation expense and related employer-paid payroll taxes in cost of operations 3 5 7 6
General and administrative expense 138 143 279 297
Depreciation expense 182 170 359 328
Amortization expense 55 54 111 108
Acquisition, transaction, and other expense — 37 4 52
Restructuring, impairment, and (gain) loss on disposals (4) 3 (1) (18)
Equity (income) loss, net of tax — (3) 3 1
(Gain) loss on foreign currency transactions, net — (26) (3) (42)
Interest expense, net 87 67 171 127
Other nonoperating (income) expense, net — (1) (1) (1)
Income tax expense (benefit) (1) (7) 3 1
Total segment NOI $ 428 $ 435 $ 849 $ 852
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.
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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.
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The table below reconciles EBITDA, EBITDAre, and Adjusted EBITDA to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Net income (loss) $ (32) $ (7) $ (83) $ (7)
Adjustments:
Depreciation and amortization expense 237 224 470 436
Interest expense, net 87 67 171 127
Income tax expense (benefit) (1) (7) 3 1
EBITDA $ 291 $ 277 $ 561 $ 557
Adjustments:
Net loss (gain) on sale of real estate assets — 3 — 3
Impairment of real estate assets 1 — 1 —
Allocation of EBITDAre of noncontrolling interests (1) (1) (1) (1)
EBITDAre $ 291 $ 279 $ 561 $ 559
Adjustments:
Net (gain) loss on sale of non-real estate assets (1) — (2) (2)
Other nonoperating (income) expense, net — (1) (1) (1)
Acquisition, restructuring, and other 6 48 17 65
Technology transformation 6 7 12 12
(Gain) loss on property destruction (11) (13) (14) (37)
(Gain) loss on foreign currency transactions, net — (26) (3) (42)
Stock-based compensation expense and related employer-paid payroll taxes 25 30 55 70
Impairment of other non-real estate assets 1 — 1 1
Allocation related to unconsolidated JVs 3 2 7 5
Allocation adjustments of noncontrolling interests — — 1 —
Adjusted EBITDA $ 320 $ 326 $ 634 $ 630
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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, and Adjusted FFO are used by management, investors, and industry analysts as supplemental measures of operating performance of equity REITs. FFO, Core FFO and Adjusted FFO should be evaluated along with GAAP net income and net income per diluted share (the most directly comparable GAAP measures) in evaluating our operating performance. FFO, Core FFO, and Adjusted FFO do not represent net income or cash flows from operating activities in accordance with GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our condensed consolidated financial statements included elsewhere in this Quarterly Report. FFO, Core FFO, and Adjusted FFO should be considered as supplements, but not alternatives, to our net income or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculated by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do.
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The table below reconciles FFO, Core FFO, and Adjusted FFO to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Net income (loss) $ (32) $ (7) $ (83) $ (7)
Adjustments:
Real estate depreciation 101 94 200 179
In-place lease intangible amortization 1 1 2 2
Net loss (gain) on sale of real estate assets — 3 — 3
Impairment of real estate assets 1 — 1 —
Real estate depreciation, (gain) loss on sale of real estate and real estate impairments on unconsolidated JVs — — 1 1
Allocation of noncontrolling interests (1) — — —
FFO $ 70 $ 91 $ 121 $ 178
Adjustments:
Net (gain) loss on sale of non-real estate assets (1) — (2) (2)
Finance lease ROU asset amortization - real estate 18 18 36 36
Impairment of other non-real estate assets 1 — 1 1
Other nonoperating (income) expense, net — (1) (1) (1)
Acquisition, restructuring, and other 10 52 25 72
Technology transformation 6 7 12 12
(Gain) loss on property destruction (11) (13) (14) (37)
(Gain) loss on foreign currency transactions, net — (26) (3) (42)
Core FFO $ 93 $ 128 $ 175 $ 217
Adjustments:
Non-real estate depreciation and amortization 108 103 214 203
Finance lease ROU asset amortization - non-real estate 8 8 17 16
Amortization of deferred financing costs, discount, and above/below market debt 4 3 7 5
Deferred income taxes expense (benefit) (7) (20) (6) (9)
Straight line net operating rent — (1) — —
Stock-based compensation expense and related employer-paid payroll taxes 25 30 55 70
Recurring maintenance capital expenditures (33) (42) (64) (74)
Allocation related to unconsolidated JVs — 1 1 2
Allocation of noncontrolling interests — 1 — —
Adjusted FFO $ 198 $ 211 $ 399 $ 430
Liquidity and Capital Resources
As of June 30, 2026, we had $57 million of cash and cash equivalents and $1.5 billion available under our Revolving Credit Facility (net of outstanding standby letters of credit in the amount of $61 million, which reduce availability). We currently expect that our principal sources of funding will include:
•current cash balances;
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•cash flows from operations;
•proceeds from the disposition of properties or other investments;
•our credit facilities; and
•other forms of debt financings and equity offerings.
Our liquidity requirements and capital commitments primarily consist of:
•operating activities and overall working capital;
•capital expenditures;
•development and acquisition activities;
•debt service obligations; and
•stockholder distributions.
As of June 30, 2026, we expect that our funding sources as noted above will be adequate to meet our short-term liquidity requirements and capital commitments for the next twelve months. For more information regarding our debt facilities, refer to Note 8, Debt in the condensed consolidated financial statements included in this Quarterly Report. We expect to utilize the same sources of capital we will rely on to meet our short-term liquidity requirements to also meet our long-term liquidity requirements, which include funding our operating activities, our debt service obligations and stockholder distributions, and our future development and acquisition activities.
Dividends and Distributions
We are required to distribute at least 90% of our taxable income (excluding capital gains) on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to stockholders from cash flows from our operating activities. All such distributions are at the discretion of our board of directors. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. Amounts accumulated for distribution to stockholders are primarily invested in interest-bearing accounts, which are consistent with our intention to maintain REIT status.
As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs, as well as potential developments in new or existing properties or acquisitions. In addition, we may be required to use borrowings under our Revolving Credit Facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.
The board of directors of the Company has declared a regular quarterly cash dividend of $0.5325 per share of common stock for the first and second quarters of 2026, which was an increase from $0.5275 per share of common stock in the prior year quarters. Each dividend is payable to shareholders of record as of the last day of the respective quarter and is paid in the subsequent month.
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Outstanding Indebtedness
The following table summarizes our outstanding indebtedness as of June 30, 2026 (in millions):
As of June 30,
2026
Fixed rate $ 3,278
Variable rate—unhedged 1,721
Variable rate—hedged 1,250
Total debt $ 6,249
Percent of total debt:
Fixed rate 52.5 %
Variable rate—unhedged 27.5 %
Variable rate—hedged 20.0 %
The variable rate debt shown above bears interest at interest rates based on various one-month rates, of which SOFR is the most significant, depending on the respective agreement governing the debt, including our Revolving Credit Facility and Term Loan A. As of June 30, 2026, our debt had a weighted average term to maturity of approximately 2.9 years, assuming exercise of extension options.
For further information regarding outstanding indebtedness, please see Note 8, Debt in the condensed consolidated financial statements included in this Quarterly Report.
Security Interests in Customers’ Products
By operation of law and in accordance with our warehouse customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments. Such liens typically permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not available to us for re-sale.
Our credit loss expense related to customer receivables was immaterial for both the three and six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, we maintained allowances for uncollectible balances of $10 million and $10 million, respectively, which we believed to be adequate.
Maintenance Capital Expenditures and Repair and Maintenance Expenses
Lineage prides itself on maintaining its facilities, fleet, and railcars at a high standard. We regularly update long-range maintenance plans by asset so that our assets maintain the high quality and operational efficiency that our customers expect from us.
Recurring Maintenance Capital Expenditures
Recurring maintenance capital expenditures are capitalized funds used to maintain assets that will result in an extended useful life. This includes the cost to purchase and install, repair, or construct assets when it results in a useful life longer than one year and the installed cost per asset is over a de minimis threshold. Maintenance capital expenditures are related to both our Global Warehousing segment and Global Integrated Solutions segment, including information technology, and are all, in management’s judgment, recurring in nature. These expenditures include maintenance performed multiple times over the lifetime of the facility or asset, such as replacing or repairing roofs, refrigeration systems, racking, material handling equipment, and fleet. These expenditures also include information technology maintenance to existing servers, equipment, and software.
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The following table sets forth our recurring maintenance capital expenditures for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Global warehousing $ 28 $ 35 $ 54 $ 64
Global integrated solutions 2 4 4 5
Information technology and other 3 3 6 5
Recurring maintenance capital expenditures $ 33 $ 42 $ 64 $ 74
Repair and Maintenance Expenses
Repair and maintenance expenses are incurred when assets need repair or replacement and do not qualify as capital expenditures. If the work does not materially extend the useful life of the asset or the asset value is less than a de minimis threshold, it would be recorded as an operating expense under repair and maintenance expenses, included primarily in Cost of operations on the condensed consolidated statements of operations and comprehensive income (loss). Examples include ordinary repairs on roofs, racking, refrigeration, and material handling equipment. Project-related expenses are excluded.
The following table sets forth our repair and maintenance expenses for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Global warehousing $ 40 $ 38 $ 80 $ 72
Global integrated solutions 13 15 25 28
Repair and maintenance expenses $ 53 $ 53 $ 105 $ 100
Integration Capital Expenditures
Integration capital expenditures are capitalized funds related to integrating acquired assets and businesses. Integration capital expenditures are one-time expenditures. These are typically acquisition-related costs, including maintenance on acquired assets that are beyond their useful life at the time of acquisition, rebranding expenditures, and information technology expenditures to standardize system usage across our business, and also include certain non-acquisition related costs, including safety and compliance projects to comply with any applicable policies, laws, or codes, such as installation of site security or a new fire suppression system, as well as freon-to-ammonia conversions.
The following table sets forth our integration capital expenditures for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Global warehousing $ 13 $ 15 $ 24 $ 23
Information technology and other 1 3 3 7
Integration capital expenditures $ 14 $ 18 $ 27 $ 30
External Growth Capital Investments
External growth capital investments include acquisitions, greenfield projects and expansion initiatives, information technology platform enhancements, and other capital projects which result in an economic return. We divide growth projects into the following categories:
•Acquisitions: The purchase of an external company or facility. Also includes the purchase of the real estate of facilities we currently lease.
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•Greenfields and Expansions: Projects either to build a new facility, including the purchase of land, or to increase the size of an existing warehouse (as measured by cubic feet). The costs associated with construction and materials are included.
•Energy and Economic Return: Energy return projects are intended to increase energy efficiency by decreasing the amount of kWh or fossil fuels consumed or reducing the cost to procure energy. Common examples include installing new LED technology, installing solar panels at a warehouse, and electrification of transportation fleet. Economic return projects require an investment of capital for a future cash flow and/or segment NOI benefit that is not an acquisition, greenfield, expansion, or energy project. Examples include addition of blast cells, racking replacements, replacing freezer doors, purchasing compressors, buying out leased equipment, and purchasing new rail cars.
•Information Technology Transformation and Growth: Capital investments focused on (a) warehouse operations efficiency – deploying technology that leverages advanced algorithms and artificial intelligence to increase labor productivity and higher utilization; (b) customer experience and service – building and implementing technology solutions to improve response times, automate common tasks, and offer seamless multi-channel support elevating both customer and employee experience; and (c) sales management, pricing and billing – creating and integrating IT systems to streamline sales processes, optimize pricing, and enhance billing accuracy and efficiency.
The following table sets forth our external growth capital investments for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Acquisitions, net of cash acquired and adjustments (1) $ 4 $ 439 $ 4 $ 439
Greenfield and expansion expenditures 78 53 178 90
Energy and economic return initiatives 14 25 27 41
Information technology transformation and growth initiatives 14 18 31 32
External growth capital investments $ 110 $ 535 $ 240 $ 602
(1) Excludes buildings and land acquired through exercise of finance lease purchase options, where amount paid did not exceed the finance lease liability.
We completed one immaterial acquisition during the three and six months ended June 30, 2026. We completed five acquisitions during the three and six months ended June 30, 2025, including the purchase of three warehouse campuses of Bellingham Cold Storage for approximately $118 million and the acquisition of four cold storage warehouses and other related assets from Tyson Foods for $256 million.
Our greenfield and expansion expenditures related primarily to projects that remained under construction as of the respective period end, with a notable expansion at the Hobart, IN cold storage facility and construction of a new facility in Bremerhaven, Germany during the three and six months ended June 30, 2025. During the three and six months ended June 30, 2026, we continued construction of a new greenfield in Dallas, TX under our arrangement with Tyson Foods and an expansion at one of our fully automated cold storage warehouses in the Netherlands.
Energy and economic return initiatives included corporate initiatives and smaller customer-driven growth projects. Information technology transformation and growth initiatives included spending on our patented LinOS technology.
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Historical Cash Flows
The following summary discussion of our cash flows is based on the condensed consolidated statements of cash flows included in this Quarterly Report.
Six Months Ended June 30,
(in millions) 2026 2025
Net cash provided by operating activities $ 441 $ 397
Net cash used in investing activities $ (286) $ (718)
Net cash (used in) provided by financing activities $ (162) $ 226
Operating Activities
For the six months ended June 30, 2026, our net cash provided by operating activities was $441 million, compared to $397 million for the six months ended June 30, 2025. The $76 million increase in net loss was offset by non-cash items, primarily a $34 million increase in depreciation and amortization and a $39 million decrease in net gain on foreign currency transactions, both discussed above. Changes in operating assets and liabilities were favorable for the six months ended June 30, 2026 as compared to 2025. Operating cash flow was also positively impacted by $18 million of proceeds from business interruption insurance recoveries, most of which related to a fire which occurred at the Company’s warehouse in Kennewick, Washington in 2024 (see Note 15, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details). Other notable changes in non-cash items were $28 million in Put Options fair value adjustments for the six months ended June 30, 2025 which did not recur in 2026, offset by lower stock-based compensation expense.
Investing Activities
For the six months ended June 30, 2026, cash used in investing activities was $286 million. The most significant uses were $310 million in purchases of property, plant, and equipment, primarily for the continued construction of a new greenfield in Dallas, TX under our arrangement with Tyson Foods and an expansion at one of our fully automated cold storage warehouses in the Netherlands. This was partially offset by $21 million of proceeds from sale of assets and $9 million of insurance proceeds for recoveries on impaired long-lived assets, which were primarily related to a fire which occurred at the Company’s warehouse in Kennewick, Washington in 2024 (see Note 15, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
For the six months ended June 30, 2025, cash used in investing activities was $718 million. The most significant uses were $439 million in acquisitions, net of cash acquired, and $314 million in purchases of property, plant, and equipment, primarily for growth capital expenditures. In addition, we invested $7 million in Emergent Cold LatAm Holdings, LLC, offset by $38 million in insurance recovery proceeds for the warehouse fire in Kennewick and $6 million in proceeds from the sale of assets.
Financing Activities
Our net cash used in financing activities was $162 million for the six months ended June 30, 2026, which primarily consisted of outflows of $269 million for regular quarterly dividends and other distributions and $201 million of repayments of long-term debt and finance leases ($160 million of which was related to the payoff of the Metlife Real Estate Notes on January 2, 2026). To finance the secured debt payoff and some of the other financing activities, we borrowed $327 million on revolving credit lines, net of repayments.
Our net cash provided by financing activities was $226 million for the six months ended June 30, 2025. The financing activities primarily consisted of $495 million of proceeds from issuance of New Senior Unsecured Notes and $204 million of net borrowings on revolving credit lines. These inflows were offset by $268 million of dividends and other distributions, $156 million of repayments of long-term debt and finance leases, $88 million of which was related to the Houston, Texas lease purchase, and $28 million of redemption of redeemable noncontrolling interest.
Supplemental Guarantor Financial Information
In 2025, the Operating Partnership and Lineage Europe Finco B.V. issued senior notes (“New Senior Unsecured Notes”) which were fully and unconditionally guaranteed by Lineage, Inc., the Operating Partnership, Lineage Europe Finco B.V., Lineage
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Logistics Holdings, LLC, and certain other subsidiaries of the Company that guarantee or are otherwise obligated in respect of the Credit Agreement (other than the respective issuer and any excluded subsidiaries, collectively, the “Guarantors,” as detailed in Exhibit 22.1 to this Form 10-Q). The Company’s other subsidiaries do not guarantee the New Senior Unsecured Notes (collectively, “Non-Guarantor Subsidiaries”). Refer to Note 8, Debt in our condensed consolidated financial statements included in this Quarterly Report for additional information regarding the New Senior Unsecured Notes.
The following tables present summarized financial information for the Guarantors, including Lineage Europe Finco B.V., and the OP on a combined basis, after the elimination of (a) intercompany transactions and balances between all the Guarantors entities, Lineage Europe Finco B.V., and the OP and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.
June 30, December 31,
Summarized Balance Sheet Data (in millions) 2026 2025
Total current assets $ 349 $ 347
Amounts due from non-guarantor subsidiaries $ 14,278 $ 13,693
Total non-current assets $ 5,199 $ 5,157
Total current liabilities $ 598 $ 562
Amounts due to non-guarantor subsidiaries $ 13,458 $ 12,460
Total non-current liabilities $ 5,961 $ 5,708
Noncontrolling interests $ 970 $ 978
Six Months Ended Year Ended
June 30, December 31,
Summarized Statement of Operations Data (in millions) 2026 2025
Net revenues from external customers $ 1,025 $ 2,006
Cost of operations $ (771) $ (1,496)
Net revenue and cost of operations charges with non-guarantor subsidiaries $ 74 $ 151
Income (loss) from operations $ (64) $ (94)
Net income (loss) $ (226) $ (326)
Net income (loss) attributable to the combined guarantor entities $ (217) $ (315)
The New Senior Unsecured Notes and each guarantee of the New Senior Unsecured Notes is effectively subordinated in right of payment to: all existing and future secured indebtedness and secured guarantees of the OP or such Guarantor (to the extent of the value of the collateral securing such indebtedness and guarantees); all existing and future indebtedness and other liabilities, whether secured or unsecured, of the Non-Guarantor Subsidiaries and of any entity the OP or such Guarantor accounts for using the equity method of accounting; and all existing and future preferred equity not owned by the OP or such Guarantor in Non-Guarantor Subsidiaries and in any entity the OP or such Guarantor accounts for using the equity method of accounting.
As of June 30, 2026, entities that are direct borrowers, guarantors, or otherwise obligated in respect the Credit Agreement had an aggregate of $20,668 million of assets and were direct borrowers, guarantors or otherwise obligated in respect of an aggregate of $5,933 million of indebtedness, in each case, excluding intercompany investments and obligations. As of June 30, 2026, the OP, Lineage Europe Finco B.V., and the Guarantors had an aggregate of $19,825 million of assets and were direct borrowers in respect of $5,786 million of indebtedness, in each case, excluding intercompany investments and obligations.
Critical Accounting Policies and Estimates
The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates, assumptions, and judgments in certain circumstances that affect the reported amounts of assets, liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be most appropriate and reasonable. Actual results may differ from these estimates under different assumptions or conditions.
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There have been no material changes to our critical accounting policies and estimates as described in our 2025 Annual Report on Form 10-K.
New Accounting Pronouncements
Refer to Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information regarding applicable new accounting pronouncements.