Greetings. And welcome to the Americold Realty Trust Fourth Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Scott Henderson, Senior Vice President of Capital Markets and Investor Relations.

Good afternoon. Thank you for joining us today for Americold Realty Trust fourth quarter 2022 earnings conference call. In addition to the press release distributed this afternoon, we have filed a supplemental package with additional detail on our results, which is available in the investor relations section on our website at www.americold.com. This afternoon's conference call is hosted by Americold's Chief Executive Officer; George Chappelle; Chief Commercial Officer; Rob Chambers; and Chief Financial Officer, Marc Smernoff. Management will make some prepared comments, after which we will open up the call to your questions. On today's call, management's prepared remarks may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated. Forward-looking statements are based on current expectations, assumptions, and beliefs, as well as information available to us at this time that speaks only as of the date they are made, and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures, including core EBITDA and AFFO. Full definitions of these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures are contained in the supplemental information package available on the company's website. Now, I will turn the call over to George.

Thank you, Scott, and welcome to our fourth quarter 2022 earnings conference call. This afternoon, I will update you on our four near-term priorities and summarize our financial and operating results. I will then discuss the current market conditions that support our 2023 guidance. Rob will provide an update on our recent customer initiatives, and Marc will comment on our capital markets activity, along with a detailed overview of our full-year 2023 guidance. Starting with our four near-term priorities. First, we are effectively repricing our warehouse business to counter inflationary pressures in our cost structure and protect our margins. Additionally, as our longer-term customer agreements come up for renewal, we are adjusting these prices, which will help us return to our historical warehouse margin percentages. For the fourth quarter, our rent and storage revenue, economic occupied pallets, and same-store metrics on a constant currency basis rose by 8.9% compared to the previous year. Service revenue per throughput pallet increased by 9.8%. In the fourth quarter, we noticed inflationary pressures in our business starting to moderate sequentially. However, we will continue to implement targeted pricing and power surcharge initiatives to address current inflation and aim to exit the first quarter at a rate that covers all known inflation through the fourth quarter. Looking ahead to the first quarter, we expect most inflationary pressures to remain in power costs in select markets and certain warehouse supply costs. Therefore, we will maintain our targeted pricing and power surcharge initiatives. Consistent with our last call, based on current market conditions, we do not expect significant changes in overall labor rates going forward. As previously mentioned, we have tightened controls, enhanced processes, and strengthened our team to ensure we have an accurate, timely view of each cost component, allowing us to act quickly if needed. Second, we are dedicated to differentiating our platform by delivering best-in-class customer service. We are experiencing a positive shift in our customer service levels, highlighted by the rise in our perm-to-temp ratio, which I will discuss shortly. As anticipated, our service levels improved as new associates became more accustomed to the Americold operating system, and our workforce ratio improved. We expect this trend to persist, supported by our efforts to reduce turnover. We firmly believe that providing our customers with best-in-class service will ultimately enhance our market share and has significantly contributed to our recent occupancy increase. For the fourth quarter of 2022, our same-store economic occupancy grew by 634 basis points compared to the fourth quarter of 2021, reaching 85%, a level not seen since the fourth quarter of 2019. We operated efficiently and delivered exceptional customer service at this level, and we believe we can continue to boost occupancy above pre-COVID levels. The importance of our customer service initiatives cannot be overstated, as they are driving our notable occupancy and market share growth. Third, we remain focused on labor management, aiming to optimize our mix of permanent and temporary associates while reducing our turnover rate. Temporary associates are more expensive per labor hour and less productive than permanent Americold associates, and higher turnover also incurs costs and inefficiencies. In the fourth quarter, we achieved a perm-to-temp hours ratio of 73/27, which is 11 points higher than our fourth quarter 2021 levels and exceeds our pre-COVID level of 70/30. We are making progress towards our goal of achieving a consistent 80/20 ratio. Our turnover rate remains high compared to both last year and pre-COVID levels, but we are making strides. When normalizing for the exit of a large retail customer and the associated associates in our third-party managed segment, we ended December 2022 with an annualized turnover trend about 17 percentage points higher than in December 2021, and approximately 22 percentage points higher than in December 2019. Sequentially, we slightly improved our turnover rate from the third quarter. In the near future, we expect to have a higher proportion of newer associates, who take longer to reach full productivity, impacting our service margins. A stable, well-trained workforce is essential for efficient operations and achieving pre-COVID margin levels in our warehouse services. Our final focus area is to ensure our developed projects are delivered on time and on budget while achieving the expected returns. In the fourth quarter, we opened two new facilities—one in Dublin, Ireland, and another in Barcelona, Spain. Both projects are progressing toward anticipated stabilized returns per our underwriting. Throughout 2022, we enhanced the quality and expertise of our development platform by revamping our project execution process and evaluation of new projects, along with significantly strengthening our development team by recruiting top talent from leading global automation firms like Dematic, Siemens, and Vanderlande. We have five automated facilities coming online this year and are eager for them to play a productive role in the food supply chain for our customers and in creating shareholder value. Our capabilities in underwriting, capital deployment, and operations have vastly improved, making our development platform significantly stronger since the beginning of 2022. Given the improvements in our development team and the strengthening occupancy in several key markets, we have identified specific critical markets where customer demand exceeds capacity. We are actively evaluating customer-driven expansions in these selected areas, which Rob will touch on shortly. For our full-year results, in 2022, we delivered FFO per share of $1.11, at the higher end of our revised guidance. This performance was mainly driven by our global warehouse same-store pool, producing 8.5% revenue growth and 6.7% NOI growth versus the prior year, both on a constant currency basis. Our strong same-store revenue results resulted from ongoing pricing initiatives and sustainable economic occupancy growth, slightly tempered by reduced throughput volumes. Rent and storage revenue per economic occupied pallet and our same store on a constant currency basis rose by 7.3% compared to the previous year, while service revenue per throughput pallet increased by 7.7%. Regarding occupancy, we achieved a 345 basis point increase in economic occupancy over the previous year. This rise is due to two main factors: first, our food manufacturers are ramping up production levels, and second, our strong focus on customer service resulted in a better win rate on customer opportunities. Besides new business, our customers have publicly acknowledged Americold's performance. For instance, Unilever awarded our Sikeston, Missouri facility with its ice cream site of the year award, Bartleby gave our Russellville, Arkansas facility its site of the year award, and in Australia, Yum! Brands' Kentucky Fried Chicken recognized us as its supplier of the year. We appreciate this recognition and are committed to ongoing improvements in our customer service initiatives. In summary, throughout 2022, we effectively repriced our warehouse business, achieved significant improvements in economic occupancy, enhanced customer service, and remained focused on controlling factors within our control amidst a challenging labor and power environment. We are pleased with the progress made this year, thanks to our dedicated team of over 15,000 associates. Now, turning to current market conditions that inform our 2023 guidance, which Marc will elaborate on further. For the full year 2023, we anticipate continued improvement in our economic occupancy, bolstered by food manufacturers raising production and our superior customer service. However, considering the persistent inflationary environment along with a general slowdown in consumer spending, we expect lower throughput volumes as consumers reduce basket sizes and pantry stocking. From a pricing perspective, we intend to continue managing inflation, benefitting from normal annual rate adjustments, repricing our longer-term agreements as they come up for renewal, and appropriately underwriting new business. Operationally, we foresee ongoing challenges from a tight labor market. Consequently, we expect our facilities to experience higher than average turnover throughout 2023, which will continue to pressure service margins. Nonetheless, we are optimistic about improved NOI contributions from our development projects as they begin to ramp up throughout 2023. Lastly, we project base interest rates to rise further in 2023, impacting our floating-rate debt costs. Given this context, we are guiding a full-year 2023 AFFO per share range of $1.14 to $1.24. During the year, we will expedite the integration of global acquisitions by implementing new advanced cloud-based back-office systems to standardize processes, capture synergies, and deploy the Americold operating system. This new technology will enhance our global growth, streamline the integration of future acquisitions, and provide improved business analytics to optimize our existing operations. Marc will provide more details during his segment of today's call. Lastly, I want to highlight our ESG initiatives, which are a priority for us at Americold. Last year, we shared our submission to the Carbon Disclosure Project for 2022. We have since received our first Carbon Disclosure Project report, aligning with supply chain companies within CDP's defined peer set. We are committed to transparency regarding our ESG efforts and look forward to participating in the CDP's annual process moving forward. Additionally, I’m pleased to report that last year, 19 of our facilities in the United States earned ENERGY STAR certification, making us a premier member of ENERGY STAR’s Certification Nation for 2022. To achieve certification, buildings must satisfy stringent energy performance standards set by the U.S. Environmental Protection Agency. We aim to certify more facilities in 2023. With that, I will hand it over to Rob.

Thank you, George. Over the past year, we have seen our food manufacturing customers continue to ramp production levels and fill rates meaningfully improve. These overall industry trends are driving higher economic occupancy across our portfolio. As a result, we have seen increasing demand for our facilities and services across all nodes in our network. Production advantaged sites, major market distribution centers, and retail distribution centers. We are also winning incremental wallet share from our top customers based on our keen focus on delivering best-in-class customer service and our network of critical infrastructure. We expect this to continue. At this point, I would like to provide some brief comments on our overall pricing initiatives. First, as our longer-term customer agreements come up for renewal, we will continue to revisit our pricing structures in order to move us back to our historical warehouse margin percentages. Please note that this is a multi-year process as the vast majority of our agreements are on 3-year to 7-year terms. Second, we will continue to benefit from our in-place annual contractual rate escalations on these current customer agreements. Third, as it relates to these agreements, we will maintain our in-year targeted pricing and power surcharge initiatives to address known inflation, which as George mentioned, has begun to moderate in certain areas of our business. And fourth, all new business and shorter-term agreements are being priced with a current and forward view of our cost structure. As for our commercialization efforts, at quarter-end within our Global Warehouse segment, rent and storage revenue from fixed commitment contracts increased on an absolute dollar basis to $419 million, compared to $357 million at the end of the fourth quarter of 2021. On a combined pro forma basis, we derived 41.9% of rent and storage revenue from fixed commitment storage contracts, which is an approximately 260 basis point improvement over the fourth quarter of 2021. Enhanced commercialization, which includes our fixed commitment initiatives, is a critical component of our strategy. We look forward to continuing to improve this metric, which will drive improvements in economic occupancy. Over the past few quarters, we are encouraged to have seen an acceleration of the customer's adoption of this commercial structure, which provides certainty of space for our customers as overall industry occupancy increases. Within our Global Warehouse segment, we had no material changes to the composition of our top 25 customers who account for approximately 47% of our global warehouse revenue on a pro forma basis. We are pleased to know that we have increased our wallet share with a vast majority of our top 25 customers through our focus on best-in-class customer service, and a network of strategically located mission-critical infrastructure. Additionally, our churn rate remained low, at approximately 3.2% of total warehouse revenues, consistent with historical churn rates. Turning to development. As you can see from our development schedule on Page 38 of our IR supplemental, we have five projects that have been or will be completed in 2023 and are expected to generate a meaningful amount of NOI over the next three years. These include the following: two customer dedicated automated development projects for a large retailer, one in Lancaster, Pennsylvania, and one in Plainville, Connecticut. A customer dedicated automated expansion project for a large food manufacturer in Russellville, Arkansas. A multi-tenant automated expansion project anchored by large food manufacturers in Atlanta, Georgia. And a multi-tenant automated expansion project anchored by a large retailer and a large food manufacturer in Spearwood, Australia. We recently completed our customer dedicated automated facility in Lancaster, Pennsylvania and we anticipate starting the process of inbounding product into the facility over the next 30 days. We are very excited about achieving this milestone and we look forward to servicing our customer and delivering on the expected returns outlined for this project. Please note, we have also extended out the target completion and expected stabilization dates for the sister project in Plainville, Connecticut for the same retail customer. This change is being made in consultation with our retail customer to continue testing and commissioning the automated systems, while at the same time focusing on the launch of the other facility in Pennsylvania. We now expect the Connecticut facility to be completed in the third quarter of this year and stabilized in the first quarter of 2025. Our stabilized return expectations have not changed. While this impacts our overall non-same-store pool NOI in 2023 due to the shift in timing, we along with our customer feel strongly it is the prudent approach, and this is reflected in our 2023 guidance. As George mentioned, we have strengthened our development platform, and we have seen strong occupancy improvement across several key distribution markets. In these markets, customer demand is outstripping capacity. And we are evaluating and underwriting customer-driven projects to address this demand. Our development pipeline is robust and we are confident that we have built a world-class team to deliver on current and future projects. At this point, I would like to comment on the recent partnership agreement we have entered into with DP World, a top 5 global port owner and operator. DP World and Americold have entered into an agreement to explore opportunities for Americold on a case-by-case basis to develop, own, and operate state-of-the-art cold storage facilities on DP World’s strategically located 80 plus ports located around the world. DP World will benefit from increased traffic through its port locations, which will translate to incremental revenue due to our facilities. In short, we will be fulfilling a need in DP World service offerings, which will be beneficial to all parties involved: customers, DP World, and Americold. As one of the world's largest port owners and operators, DP World is an integral part of the supply chain moving approximately 10% of global trade through its seamless interconnected global network of ports and terminals, logistics hubs, and marine services. We are already seeing the benefits of this relationship through customer synergies that are resulting in incremental occupancy in Americold's current network. We are very excited about this opportunity and look forward to providing updates on new development opportunities at DP World's port locations. Lastly, I want to thank all of our Americold associates who worked hard every day during the fourth quarter, our busiest time of the year, to ensure that we played our part in getting food through the supply chain and available for families as we gathered for the holiday season. We are encouraged by the growth we've experienced in our occupancy across our portfolio, and it is a direct reflection of the great work of our associates, the innovation of our solutions, and the criticality of our infrastructure. We thank our customers for their partnership and the opportunity to fulfill our mission of helping our customers feed the world. Now, I will turn it over to Marc.

Thank you, Rob. Today, I will discuss our capital markets activity and then turn to FY 2023 guidance. During the quarter, our capital markets activity included using proceeds from our delayed draw term loan to pay off our 264 million CMBS loan that would have matured in May 2023. Following this repayment, we have no secured real estate debt outstanding. On December 5, we entered into interest rate swaps to fix the base interest rates on the remaining floating portion of our unsecured term loans into the year 2027. As a result of these hedging transactions, the only remaining floating rate debt in our capital structure is the outstanding amounts drawn under our unsecured revolver. At year-end 2022, 85% of our total debt outstanding is fixed and our nearest maturity is our 200 million notes due 2026. At quarter-end, total debt outstanding was 3.3 billion. We had total liquidity of 682 million consisting of cash on hand and revolver availability. Our net debt to pro forma core EBITDA was approximately 6.6x. At this point, we have invested approximately 471 million on development projects and processes, which reflects almost one turn of leverage. We have approximately 76 million remaining to invest on announced in-process development projects over the next year. As George and Rob discussed, we have five scheduled deliveries of large automated facilities in FY 2023. Combined with the maturation of the three projects we delivered last year, we expect the company to organically de-lever as all these projects ramp to stabilization. We are cognizant of our leverage levels and continue to explore alternative sources of capital, which allows us to continue to support our customers' growth. Turning to our full-year 2023 guidance. For the full-year, we expect AFFO per share in the range of $1.14 to $1.24. Please see Page 42 of the IR supplement for the individual components. At this point, I'll comment on the primary building blocks to get to AFFO per share and provide a bridge for each as it relates to last year's results. Starting with our Global Warehouse segment. Let me quickly comment on the new 2023 same store pool. Our new pool is now 221 facilities, which is approximately 93% of the total number of properties in our Warehouse segment. The summary of the 2023 same store pool historical performance for 2022 is presented on Page 37 of the supplement. We have 17 facilities in the 2023 non-same store pool. For the full-year 2023, we expect constant currency revenue growth in the same store to be in the range of 3% to 6%. Let me provide more detail around the key drivers of this growth for occupancy and throughput volumes. For the full-year, we expect economic occupancy to increase by approximately 50 basis points to 150 basis points as we expect food manufacturers to continue to ramp up production, the benefit of recent commercialization efforts, and softer throughput volumes. For the full-year, we expect a slight decline in throughput volumes of 1% to 2% as end consumer demand slows and basket sizes shrink due to the current economic environment. For pricing, for the full-year, we expect constant currency rent and storage revenue per economic occupied pallet growth to be in the range of 4% to 6%. Also for the full-year, we expect constant currency service revenue per throughput pallet growth to be in the range of 4% to 6%. This pricing guidance for both rent and storage revenue per economic occupied pallet and service revenue per throughput pallet reflects our continued pricing and power surcharge initiative to cover known inflation, our in-place annual contractual escalation and GRI step-ups, and the commercialization of market-based pricing for contracts that we underwrite or renew. For the full-year, we are now expecting same-store constant currency NOI growth to be in the range of 4% to 9%, which is 100 basis points to 300 basis points higher than the corresponding revenue growth. Please note the following guidance metrics are provided on an actual dollar basis not on a constant currency basis. With regard to the new 2023 non-same store pool, as can be seen on Page 37 of the supplement, the new non-same store pool generated negative 2.3 million in NOI in the fourth quarter 2022. Our expectation is that the non-same store pool will continue to generate negative NOI during the first two quarters of 2023. At slightly more of a loss than what the pool did in the fourth quarter 2022, due to a ramp up of startup costs for five projects. We expect the pool to generate positive NOI in the second half of 2023. For the full-year 2023, we expect the new non-same store pool to generate approximately 0 million to 15 million of NOI. Turning to our managed and transportation segments NOI. For the full-year, we expect these segments combined to generate approximately 50 million to 57 million of NOI. In 2022, excluding the approximately 11 months of NOI from our managed business that we exited in the fourth quarter last year, these segments generated approximately 53 million of NOI. Please note, the lower end of our guidance range assumes some level of transportation decline in the face of broader economic headwinds. Turning to our SG&A expense. For the full-year, we expect total SG&A to be in the range of 216 million to 234 million inclusive of 24 million to 25 million of stock compensation expense. As a reminder, we exclude stock compensation expense from our total SG&A expense to arrive at what we call core SG&A expense, which is what truly impacts AFFO. For the full-year, we expect core SG&A to be in the range of 192 million to 209 million. In the midpoint of this 2023 range is slightly down from our 2022 core SG&A expense of 203 million, primarily due to last year's core SG&A expense being elevated from the company achieving the higher end of its performance based annual cash incentive compensation program. Turning to our interest expense. For the full-year, we expect interest expense to be approximately 134 million to 140 million. This range is higher than our 2022 interest expense of 116 million, due to our expectation of full-year 2023 average indebtedness being higher than that of 2022. Additionally, approximately 15% of our total outstanding debt is currently floating and we expect base interest rates to continue to increase into 2023. Onto our cash tax expense, which is the number that impacts AFFO. For the full-year, we expect this expense to be approximately 5 million to 9 million. As a reminder, most of the corporate income taxes we pay at Americold relate to our international operations. Turning to our maintenance capital expenditures. For the full-year, we expect this investment to be approximately 80 million to 90 million. We expect to announce development starts aggregating between 100 million to 200 million. Please keep in mind that our guidance does not include the impact of acquisitions, dispositions, or capital markets activity beyond which has been previously announced. Finally, please refer to our IR supplement for detail on the additional assumptions embedded in this guidance. Lastly, as George mentioned, we are accelerating our global integration and beginning a multiyear investment into a new cloud-based ERP billing, human capital management, and facility maintenance system to upgrade our current capabilities and bring recent global acquisitions onto a common platform. During this implementation period, which we expect to be approximately three years, we'll be making an aggregate 100 million investment into this system, which includes approximately 50 million capital investment along with another 50 million of one-time implementation and integration expenses. We expect slightly under half of this investment to be made in FY 2023. We believe the vast majority of the benefits from this investment will flow from NOI enhancement, net SG&A savings, lower IT maintenance capital expenditures, and working capital efficiencies. Starting in 2025, ramping into 2026, and fully stabilizing in 2027, we expect this investment to add approximately 15 million to 20 million of incremental recurring AFFO. During this three-year period, a portion of the investment being capitalized will not impact recurring maintenance CapEx and as a result will not impact AFFO. Additionally, during this three-year period, we will be excluding the impact of the expense portion of the investment from our core EBITDA and AFFO flow calculations. Now, let me turn the call back to George for some closing remarks.

Thanks, Marc. Overall, I'm very pleased with our performance in 2022 and our path forward. We made good progress on our four near-term priorities. We continue to enhance our internal capabilities around controlling what we can control. We made significant progress on our customer service initiatives, and we are very proud of the recognition and awards we have received from our customers. Our core same store pool continues to recover nicely as we saw economic occupancy meaningfully improve and we continue to price to offset inflation. We can expect to see service NOI margins improve as we move towards our optimal perm to temp ratio and stabilize our turnover rate. Finally, we extended debt duration on our balance sheet and took steps to minimize the impact of rising interest rates. In the face of many challenging macro headwinds this last year, I would like to thank the Americold team for their hard work and contributions to our performance. Thank you again for joining us today, and we will now open the call for your questions.

Thank you. Our first question comes from Dave Rodgers with Baird. Please proceed.

Yes, good afternoon, everybody. First for Marc and George, it looks like based on your guidance that your occupancy and margin growth will be weighted and same store NOI growth weighted probably toward the first half of the year. So, I wanted to confirm that. And then as I think about the second half of the year, George, what do you think the biggest components once you catch up on occupancy and margin to where you were? I guess what are the biggest components? Is it just down to labor and efficiency at that point to drive margin higher?

Yes, let me answer the second part first and then I'll turn it over to Marc, but you're absolutely right, Dave. The second half of this year – and really ongoing, if you go back to our previous discussions, it's all about labor, getting permanent labor in that you can give the three months of time it takes to be a productive permanent employee and limit the need for contract labor, which as we've said all along, cost more and is far less productive. So, it's all about getting the permanent to temp ratio up closer to the 80% we believe is right for this business. Getting them to be with us for longer than three months, so they learn our processes, they learn our systems, and they become much more productive. And then you'll see our services margin increase commensurately. So that's by far and away the top priority throughout the year. Occupancy, I'd say the comp in the first half of the year is much easier than the comp in the second half of the year. So that drives some profitability into the first half versus the second half. And Marc, I don't know if you have more to add on that.

Yes, I think the one thing just to build on that is, as I mentioned in my prepared remarks, and George and Rob both mentioned, we have a number of deliveries of large automated facilities coming on this year. And as you see from the new same store pool, that pool is carrying a slight loss into the year based on Q4 performance, and we expect that loss to continue to grow through the first half of the year and then recover as those buildings become operational throughout the year. I will remind everyone that the full-year guide for the non-same store pool is to make between 0 million and 15 million, so it does end positive for the pool, but there is that impact to the J curve in the first half.

And then if I could ask just a follow-up on throughput, obviously a big topic in the fourth quarter. As you look forward and you look back, I guess, at the COVID area throughput really, kind of accelerated, I guess during COVID and drove results for you guys and now it's kind of reversing out. How long do you anticipate that to take before it really stabilizes out and you get back to a normalization? Do you have any read on that from the fourth quarter and moving into January and early February?

Well, if we look at what we believe the causes are, we've had about a year now of pricing in the food industry in almost every category that nets out to somewhere between 10% and 15% increases year-over-year. You combine that with interest rates rising and squeezing disposable income. And what you get is less buying power in the store per individual smaller basket sizes; less foot traffic, very little of any pantry loading, right. You're buying food for short durations and you'll come back and buy more when you need it. And that's really started to accelerate with the latest interest rate increases and some of the earnings releases of large food manufacturers across our country. They're all citing these same dynamics as being soft on throughput. So, when will that turn around? Well, I mean, you've got to find some way to increase disposable income because it's very unlikely any price increase they’re going to roll back; right. They’re all driven by macroeconomic issues around labor and I don't know anybody including us who's planning on labor costs reducing over time. In fact, it may slightly increase over time. So, it's really Dave down to when consumers have more disposable income in their pockets. And I don't really have a good way to get a read on that, given we still have interest rate increases in front of us at least with the latest news.

Thanks George. Appreciate the time.

Our next question comes from the line of Samir Khanal with Evercore ISI. Please proceed.

Hi, good afternoon, everybody. George, maybe help me walk through occupancy a little bit. I know it's averaging 80% for the year. Go back in history, it sort of, the level you're at, sort of pre-COVID. Help me understand why you think this time it's going to be, you know you've talked about being up 50 basis points to 100 basis points into 2023. I'm just trying to understand like why you think it's different this time around where occupancy can go even higher?

Yes. Well, I think it will go higher, partially because of the throughput question I just answered. So, if you combine the reduction in throughput, driven by less disposable income that consumers have in higher prices at retail, with the fact that food manufacturers are recovering their production, so I think it was Kraft who came out recently and said they hit 90% service levels. They think they can get to 98%, which is the industry norm by the end of the year. So, I think they would be a fairly typical manufacturer in the U.S. Food industry and they clearly believe they can ramp up production and some of our other customers not only believe it, but are doing it also. So, if you combine the recovery of food manufacturing with the slowdown in purchases of consumer level, inventory is going to rise. So, that's why I believe our inventory will rise and that's why our guide is 50 basis points to 150 basis points higher. Now, why do I believe we can operate at higher levels? That's pretty simple. We hit 85% occupancy in the fourth quarter, and we had great customer service. So, we were able to take in every truck we had to, turn it around and get it back out well within the metrics our customers expect. We weren't the most efficient in the world on the handling side for the reasons I mentioned. New employees, less than three months on the job, higher content of contract hours given that fourth quarter is our busiest quarter, but if we can get through the fourth quarter, as well as we did and we did a really good job on customer service at the 85% level, I have no doubt we can grow occupancy 50 basis points to 150 basis points this year. And I believe it will happen for the reasons I mentioned around throughput and food manufacturers ramping up.

So Samir, one point, this is Rob, that I would add to what George just said is, I think also the acceleration we're seeing around the adoption of the fixed commitment structure is another reason why we're confident that our economic occupancy can go higher than pre-COVID. I just in the last 12 months, we increased our fixed commitment revenue by 17% in the amount of fixed commitment revenue. So, I think if that trend continues and we can help smooth out the seasonality a bit of the business, it's going to allow us to see increases in economic occupancy as well.

Got it. And then I guess just as another question here. One thing we're trying to flush out was your revenue growth guidance here of 3% to 6% call it 4.5% at the midpoint. You've done 8, 3, and 22. You would have thought maybe that 4.5% would have been higher considering the business continues to recover. If you look at the USDA data, that's trending in the right direction. Look, I know you had the big occupancy pickup in 2022, I get that, but I'm just trying to make sure we're not missing anything, just trying to see how much conservatism you've baked in that range at this point? Thanks.

Yes. I'd say that the difference between 2022 and 2023 in revenue growth is driven by the pricing differential in the years. So 2022, remember we were fighting inflation every quarter. I think we ended every quarter with and the next quarter will offset inflation in the previous quarter. We had numerous significant pricing freezes throughout the year. We don't see that in 2023. In 2023, we see labor moderating. We see power starting to moderate a little bit. So it's likely surcharges will reduce in Europe. We don't see the need for significant power surges and/or price increases to offset labor in Asia Pac. So, it's really the effect of inflation and power moderating, at least that's our view for now. And the lack of pricing beyond our normal annual price increases, which gets you to the range that we put in our guide. But without the off-cycle price increases, fighting inflation throughout the year, which happened in 2022.

Thank you.

Our next question comes from the line of Mike Mueller with JPMorgan. Please proceed.

Yes. Hi. I guess from the comments of the tech investment, the 100 million in tech investment that's not going to be impacting AFFO, I guess, CapEx or expenses. You talked about 15 million to 20 million of recurring FFO. If we're thinking about a P&L, where exactly does that flow through down the road? Where are the key line items that we're going to see that benefit materialize in?

Yes. So for the AFFO impact side of that, you'll see it in a number of ways. You'll see it principally in NOI enhancement flowing through the warehouse portfolio once fully stabilized. Secondarily, you'll see it in net SG&A savings. And then lastly, as it relates to AFFO, you will see it in lower IT capital expenditures. Remember, there's a geography shift, so you have lower CapEx, a little more SG&A spend, which is – but there is still net SG&A savings. So, those will be the three principal line items that still impact.

Got it. Okay. Thank you.

Our next question comes from the line of Michael Carroll with RBC Capital Markets. Please proceed.

Thanks. Can you provide some more details on the DP World agreement? I mean is this an exclusive relationship that you guys have with DP World? And it looks like a number of those ports are international. So are you looking to expand more broadly in your existing international markets like Australia and Europe? Or are you looking to go into new international markets with this relationship?

Yes. Thanks, Mike. So, it is – what it does is it gives us the first right of the ability to look at these opportunities, and we'll look at opportunities globally on a case-by-case basis, underwrite each one on a stand-alone basis. And if there's an opportunity that we think makes good sense, we'll move forward. So, it does give us that first look. So, we're really excited about the opportunity. We're really excited about the partnership. And it is very much a global relationship. And so it will include regions where we do business today, and it could include new opportunities and be a great way to enter new markets for us into the future.

And I'll just add real quick. Sorry, Mike, I just want to add real quick that they have a view as to where cold storage is needed based on their – the expertise they have in the ports they serve around the world. So it's – while we have right of first refusal, we also have their insight as to where they believe cold storage is needed and the level of business intelligence they have is very, very impressive. So, that's another side benefit.

Great. And then are they the ones bringing you the opportunities or is it vice versa? And then just one modeling question. Is this going to be on a land lease I'm assuming? So, you're going to be building a project and then be leasing the land from DP World?

Yes, it's a combination of both. And both – we have instances where we're bringing some opportunities and instances where they're bringing opportunities to us, and it should be a great partnership. And yes, it will be land lease opportunities.

Our next question comes from the line of Vince Tibone with Green Street. Please proceed.

Hi, good afternoon. So, your occupancy in the fourth quarter was higher than 2019 levels while the USDA data for all cold storage quality stock was down about 7% versus 2019 levels. So, just what do you think is driving the delta in performance there? And does this kind of indicate that Americold is gaining market share since the pandemic?

Yes, I think there's two components to that. One is the USDA data is a subset of the data that we have in our warehouses. So, let me give you a big example. One is the prepared foods part of our business. So, items that you would typically find at Walmart, Kroger, Publix in the frozen food section, finished goods items that consumers buy. That is not captured in the USDA data. The USDA data is more commodity-based and used for inputs into the manufacturing process. So, the data will never align 100% and can diverge, as you just mentioned, as more of the food processors pick up their volume and the USDA data can remain flat on the raw material side for manufacturing. So, I hope that's clear. The USDA data being a subset of what we store in our facilities.

I think the other thing that we benefit from is the fact that we – our book of business is skewed towards some of the larger food manufacturers. We talked about how just 25% or 25 customers make up 47% of our global warehouse revenue. So, those customers, those large food manufacturers, as they've been able to get people back, they can certainly turn the volume on much faster than some of the smaller food manufacturers that may be more prevalent in other's books of business. So, for us, we benefited by having big blue-chip customers as a significant portion of our overall percentage of our portfolio and seeing them recover faster. And therefore, for us as their main provider be able to take advantage of that from an occupancy perspective.

And you mentioned market share, Rob.

And I guess, lastly, from a market share standpoint, I do think what we've been able to see is an enhanced win rate that's allowed us to grab increasing wallet share with those big key accounts and large customers, food manufacturers. So for us, all of that kind of sums together and has resulted in strong occupancy gains.

Thank you.

You're welcome.

Our next question comes from the line of Josh Dennerlein with Bank of America. Please proceed.

Hi guys. Thanks for the time. George, I just wanted to kind of follow up on your comments on the development platform. You mentioned you overhauled the team and how you go about the development process. Just really curious to hear just kind of more color there and why you thought that was necessary?

Yes. The reason we thought it was necessary was really setting ourselves up for this year. I mean, five large automated projects coming online is something we've been waiting for, and we're happy it's here, but it also probably middle of last year, maybe a little earlier than that. It was clear that we needed to bring in some real top talent to be able to keep these projects on track, five at a time and launch them all reliably, which we'll do this year within – and as a result, we've strengthened the team in all areas, whether it's planning, whether it's finance, whether it's the technical aspects of automation and engineering that goes with that software engineering. We have a new leader that comes with 25 years of experience with Siemens. I think probably known as, one of the best automation companies in the world. So, we've put a lot of effort into making sure that we have a team that is top-notch and can pull off five large, complex, automated projects successfully in a very short time frame. So, that's the rationale as to why we brought in another team and we believe we'll get the benefits of it this year.

Okay. And do you think over, kind of the medium-term, you'll be able to do more developments or maybe better returns as well?

I think we'll definitely be able to do more developments. And as you can see in our guide, we have $100 million to $200 million dedicated to doing just that. What remains to be seen is if they'll be automated or conventional. And the problem with automated developments right now, if there is a problem, is the cost has gone up anywhere from 25% to 35% on the materials and labor to execute them. And that's a material difference when it comes to our customers affording them. It's not immaterial. So, if that were to roll back, I think automation would become much more popular. If it doesn't, I think conventional will go forward because I think the industry and certainly our customers need more capacity. They're letting us know that. We will react to that because our primary purpose here is to serve our customer needs and we would never let a customer expansion opportunity slip by us. So, right now, if I had to hedge it, I would say that we're probably more leaning towards the conventional side, given the cost environment, but if things change on the cost side, I could easily see a few go the automation way. But either way, we have a team capable of executing, and we will be very aggressive on putting some developments in the plan this year.

Thanks. Good evening everyone. I just wanted to go back to the DP World topic, can you just help us understand what the total scope of that partnership would look like, the ownership structure and in terms of the income and ownership of the development properties, would it be just on a pro rata basis or would you have to be able to see?

Yes. No. I mean, the scope of the arrangement, it's a global partnership. It gives us the opportunity to evaluate opportunities on a case-by-case basis. If we find one where we want to go forward, Americold would develop, we would own and we would operate the cold storage facility that would be built on DP World land at one of their global ports. And we would sign a land lease that would benefit DP World. They would also get the benefit of increased traffic through the ports, particularly in locations that today have none or very little cold chain infrastructure. So, it would be a traditional type of structure where we develop, we own, we operate, but it will be mutually beneficial for both parties involved and for DP World, it would be as a result of a land lease and increased traffic through their port locations.

Hey, good evening. Maybe just following up there. How would you guys go about funding these opportunities? Because I think in the prepared remarks, you mentioned alternative sources of capital. Does that mean JV or what's maybe the tolerance of equity issuance here?

Yes. We are talking about JVs when we mention alternate forms of capital and we've been mentioning this for a while. We've done a lot of work around this area. We feel like that there are partners out there that would work with us in a structure that we would like, which is an important part of establishing a JV, but we're very confident that we can arrive at a very solid relationship that we can manage and we like the structure of, and that would be the way we would fund many of the opportunities we're discussing.

Look, it's definitely a step towards it. I think as you look at the platform that I mentioned in my prepared remarks, we are cognizant of where our leverage level is. But as I said, roughly almost a turn of that leverage relates to in-process development, which will be moving from being built to moving to operational. So, as the earnings come on, we will organically de-lever back down. So, definitely we're happy to have made the step to move to a fully unsecured debt structure for our real estate debt, and we think that suits us long-term in terms of being able to raise cost-efficient capital.

Thank you. There are no further questions at this time, and this will conclude today's conference. You may disconnect your lines, and thank you for your participation.