Greetings, and welcome to Americold Realty Trust Fourth Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kevin Reed, Vice President, Investor Relations. Thank you, sir. You may begin.

Good morning. Thank you for joining us today for Americold Realty Trust's fourth quarter 2024 earnings conference call. In addition to the press release distributed this morning, 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.ir.Americold.com. This morning's conference call is hosted by Americold's Chief Executive Officer, George Chappelle; President of the Americas, Rob Chambers; and Chief Financial Officer, Jay Wells. 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 and speak only as of the date they are made, and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures, including, but not limited to, core EBITDA and AFFO. The 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, Kevin, and thank you all for joining the call. This morning, I will review the key operational metrics and financial results for the fourth quarter and full-year, as well as provide the background and assumptions underpinning our 2025 outlook. Rob will then provide an update on our recent customer initiatives and growth activity, and Jay will summarize our capital position and liquidity, as well as provide a detailed walkthrough of our full-year 2025 guidance. Throughout the fourth quarter, we continued to control what we can control, with a focus on operating efficiency, managing variable costs, and providing best-in-class service to our customers. As always, we are guided by our four key priorities, and I'm pleased to review with you some of our accomplishments. Starting with customer service, we continue to provide best-in-class service through our network of automated and conventional facilities and a wide assortment of value-added warehouse service offerings. Last quarter, our fully automated facility in Russellville, Arkansas, was awarded Site of the Year by ConAgra for a flawless startup and ramp to full capacity. Additionally, our Atlanta Westgate facility was recognized as the Frozen Site of the Year in 2024 from Kraft Heinz for providing exceptional customer service. Lastly, our Lowell, Arkansas, facility was awarded Site of the Year from Butterball for the second consecutive year, also for exceptional customer service. This kind of recognition is only possible through laser-focused dedication to serving our customers' needs, with high-quality infrastructure, a broad array of warehouse services, and a well-trained, engaged, and productive workforce. We are encouraged that same-store economic occupancy improved slightly sequentially to almost 79% in the fourth quarter. It's important to note we lacked an unusually high occupancy comparison from the previous year. The takeaway here is that even with lower average occupancy in 2024, Americold was still able to grow profitably with better workforce productivity, improved revenue captured through our commercialization efforts, lower procurement costs, and the technology improvements from our investment in Project Orion. Our rent and storage revenues derived from fixed commitment storage contracts came in at approximately 59% for the quarter, a significant improvement of 680 basis points on a year-over-year basis. The breadth of our warehouse services and commitment to best-in-class, award-winning customer service continues to keep Americold the leader in the industry when it comes to customers' willingness to reserve occupancy in our high-quality infrastructure. Regarding our priorities around labor management, we maintained our perm-to-temp hours ratio at 75-25, which is in line with recent quarters. Associate turnover finished the quarter at 32%, maintaining a level approximately 10% better than any time in our past. Our third metric measures the percentage of associates with less than 12 months of service, and it remains at 22%, a 10% improvement from prior year. Our workforce metrics have never been better, reflecting the investments we've made in engagement, training, communication, and recognition. We manage these metrics closely across the business and share them to provide visibility into the foundation we've built to support our warehouse services business and to instill confidence in our ability to continue to grow profitably. In 2024, we generated an incremental $125 million of same-store warehouse services NOI, exceeding the $100 million commitment we made two years ago. As a result of our productivity initiatives, we also successfully grew our same-store warehouse services margin, which finished at an impressive 13%, up almost 7 percentage points from last year. Turning to pricing, for the fourth quarter, our same-store rent and storage revenue per economically occupied pallet on a constant currency basis increased by approximately 3% versus the prior year. And same-store services revenue for throughput pallets increased by approximately 6%. As we discussed last quarter, we expected normalization in our warehouse services pricing comparisons due to lapping the benefits of large renewal increases from late last year. Moving to development, we exceeded our guide for announced starts in 2024 with our plan to build a new, approximately $150 million, automated expansion to an existing facility in the Dallas-Fort Worth market. We are pleased to say we just broke ground on that project in January. To give an update on our two customer-dedicated automated retail distribution facilities in Lancaster, Pennsylvania, and Plainville, Connecticut, we continue to partner with our customer and remain thoughtful in our ramp schedule to ensure the long-term success of these facilities. Based on the significant progress made, the automated facility in Pennsylvania currently has physical occupancy of 40% in buildings. We expect both physical occupancy and throughput to ramp as we hit stabilization in the second half of this year, and we expect Plainville to ramp up closely behind. As a reminder, these are state-of-the-art, fully automated retail facilities that support direct store delivery operations, the most operationally intensive nodes in the temperature-controlled supply chain. As a testament to our automation design and development capabilities, this quarter our Russellville, Arkansas facility was the recipient of the 2024 Built by the Best Award from the Controlled Environment Building Association. This award is given to the most innovative and advanced building in the temperature-controlled space around the world that achieves a successful on-time and on-budget startup. We are honored our automation capabilities have received such a prestigious global award. Altogether, these factors contributed to same-store NOI of approximately $204 million in the fourth quarter, an increase of 6% from prior year, and fourth-quarter AFFO of approximately $106 million, or $0.37 per share. Turning to our full-year results, same-store NOI grew over 11%, our second year in a row of double-digit growth. And over the past two years, we've added $120 million of AFFO, which is a 40% increase. Full-year AFFO in 2024 was $1.47 per share. Looking back on 2024, it's hard to overstate the progress we've made across our company. The successful technology go-live of Project Orion, no small feat in itself, contributed meaningfully to the bottom line throughout the year. Capital deployment accelerated as we announced attractive new developments across our portfolio, and we delivered sustainable service margins that are well in excess of the 9% target we committed to just two years ago. These achievements, and many others, are all reflected in the 16% increase in AFFO per share we achieved versus 2023. As we look forward into 2025, our development priorities remain unchanged, with a focus on our strategic partnerships, low-risk expansions, and customer-dedicated development. I'm pleased that already in 2025, we have made progress on all three of these priorities. In January, we announced our plans to build our first import-export hub in Canada at Port St. John, New Brunswick, for approximately $79 million. This facility will be the first of its kind globally and bring together Americold warehouse solutions with the maritime logistics capabilities of our strategic partner, DP World, and the rail logistics solutions of our strategic partner, CPKC, all at a single facility. It's important to note this isn't a demand-driven build. We are creating a greener, more efficient, and reliable supply chain for the import-export of food services out of eastern Canada, utilizing the world-class capabilities of our company and our partner. I'm also pleased to announce a customer-dedicated expansion project, this one at our Halwyn Drive facility in Christchurch, New Zealand, for approximately $34 million, which will be dedicated to one of the country's largest grocers. This is another example of a customer committing more of their business to Americold due to the quality and strategic location of our assets and exceptional customer service. As we have stated multiple times throughout the past year, we have many attractive opportunities for our partnerships that are currently in underwriting and expect 2025 to be a year that is very active as our new development pipeline continues to exceed a billion dollars. Now on to the current market condition assumptions that are underpinning our 2025 guidance. We believe that we are seeing stabilization in the market and anticipate getting back to the more traditional seasonal trends where you see occupancy gains in the back half of the year. For the full-year 2025, within the same-store pool, we expect generally flat economic occupancy with a 100 basis points increase or decrease from 2024. We expect throughput volumes to increase in the range of 100 basis points to 200 basis points from 2024. From a pricing standpoint, we expect a normalized year of general rate increases and renewals. Operationally, we expect to see same-store warehouse services margins in excess of 12%. Given these inputs, we are guiding to a full-year 2025 AFFO per share range of $1.51 to $1.59, with a midpoint of $1.55 per share. At the midpoint, this represents an approximate 5% increase from 2024. Before I turn the call over to Rob, I would be remiss not to mention Americold's commitment to giving back and our ongoing efforts to combat hunger. Our partnership with Feed the Children is in its 10th year now and is committed to delivering resources to communities so we can have meaningful impact. In the last 10 years, we have delivered nearly 2 million pounds of food or 1.8 million meals to approximately 650,000 families in underserved communities. We are proud of the accomplishments that we have been able to achieve in partnership with Feed the Children and look forward to continuing to make a positive impact in the future. With that, I will turn it over to Rob.

Thank you, George. As George mentioned, our company delivered strong results during the fourth quarter to wrap up an impressive year, both operationally and commercially, as well as from a development perspective. Customer service is key to growing market share in the long run. We are proud of the recognition our customers have awarded us and the trust they put in us to operate their supply chains and protect their brands. It is our operational expertise and customer service that enabled us to execute on our pricing initiatives. Our activity-based pricing model ensures that we develop rates that enable us to offer pricing that both allows us to win in the market while also ensuring an appropriate margin across each of the value-added services we provide. In the fourth quarter, same-store rent and storage revenue for economically occupied pallets on a constant currency basis increased by approximately 3% versus the prior year. Same-store constant currency services revenue for throughput pallets increased by approximately 6%, driven by pricing put in place in the back half of 2023, coupled with general rate increases and better revenue capture and incremental value-added services. As we mentioned earlier, given the great progress we've made in this area over the past year, we would expect pricing gains to moderate going forward. Within our global warehouse segment, we had no material changes to the composition of our top 25 customers, who account for approximately 51% of our global warehouse revenue on a pro forma basis. Our churn rate continues to remain low at approximately 3% of total warehouse revenues, consistent with historical churn rates. As George mentioned, we continue to be successful at increasing our fixed commitments with customers, and in the fourth quarter, rent and storage revenue derived from fixed commitment storage contracts came in at approximately 59%, a 15th straight quarterly record for Americold. We are close to achieving our target of 60% fixed commitments, but I do want to remind everyone that as we get closer to that goal, incremental increases become more difficult, given the nature and structure of our client base. Americold has established itself as the first choice for the world's largest food manufacturers and grocery retailers when it comes to their temperature-controlled supply chain. Our customers want end-to-end world-class service and to partner with a provider who can support them at every node in the supply chain. This is a major competitive advantage and uniquely positions Americold within our industry to be a cold storage provider of choice and to capitalize on our new business pipeline targeted at driving same-store occupancy. Last quarter, we introduced a probability-weighted new business pipeline that represents revenues of over $200 million and consists of growth within both existing and new customers to our portfolio. Our solutions team has been focused on proactively providing our customers with new and innovative ways to drive efficiencies into their supply chains, leveraging Americold's vast network and wide array of value-added services. This consultative selling approach continues to resonate with our customers and positively impacts the health and scale of our new business pipeline. We are encouraged by the amount of new business deals closed in the fourth quarter and thus far in the first quarter of 2025, and as those new volumes materialize, we are confident they will have a positive impact on occupancy. Given our strong operating metrics and our customer service excellence, we have continued to accelerate the underwriting process in evaluating development opportunities across the three primary areas of focus. Our strategic partnerships with CPKC and DP World, expansion projects at existing facilities, and new customer-dedicated build-to-suit developments. First, let me comment on the exciting announcement we made in late January, as well as our expansion announcement today. As George mentioned, last month we announced plans to develop our first import-export hub in Canada at Port St. John in New Brunswick, leveraging for the first time the combined capabilities of Americold, CPKC, and DP World in a single location. This approximately $79 million conventional facility will provide 22,000 pallet positions in Port St. John and add 7.4 million cubic feet to our portfolio. We expect stabilized ROIC in the 10% to 12% range. This hub will be uniquely positioned in the market transforming supply chain efficiency and sustainability and will help customers reduce transportation costs and streamline the supply chain from production to export. Port St. John has been the beneficiary of significant investment in recent years from both DP World and CPKC and the infrastructure they have built has attracted major global shipping lines to this location as a way to enhance food flows between Canada and global trading partners in Europe, South America, and Asia-Pacific. The facility will be accessible by rail and we anticipate significant customer demand based on our current pipeline. We broke ground during this quarter and expect to open the facility in Q3 2026. Today's announcement of a new approximately $34 million conventional expansion at Christchurch New Zealand will support the increased demand from an existing customer of the facility. Americold has two sites in Christchurch both operating consistently at 100% occupancy and this expansion is necessary to support our customers' growth requirements. The new expansion will add approximately 16,000 incremental pallet positions and is underwritten with a stabilized ROIC in the range of 10% to 12%. This expansion will be dedicated to the largest grocery retailer in the Asia-Pac region. This expansion is yet another example of our customers recognizing Americold as the cold storage provider of choice. We're proud that these two facilities will cover each of our development priorities, partnership builds, customer-dedicated capacity, and expansions of major markets. In addition to these new announcements, we have five in-progress projects that all remain on track for both timing and underwriting perspectives. Three of them are scheduled to open in Q2 of 2025, including our $85 million, 37,000 pallet position expansion in Allentown, Pennsylvania, our $35 million, 40,000 pallet position Greenfield facility flagship built with DP World at the Port of Jebel Ali in Dubai, and our $127 million, 22,000 pallet position Greenfield facility flagship built with CPKC in Kansas City, Missouri. Our fourth in-progress development project, the $30 million, 13,000 pallet position expansion in Sydney, Australia is on track to open in Q1 of 2026. Our fifth in-progress development project, our approximately $150 million automated expansion in DFW Texas broke ground in January and remains on track to open in Q4 2026. As a reminder, this will add 50,000 pallet positions. These projects combined represent over $0.5 billion of growth capital, including approximately $250 million in projects with our strategic partnerships, both of which are still in the very early stages. We're proud of our ability to grow and execute, and we intend to continue to do so in 2025. Americold's customers view us as an extension of their own supply chain organization, and as they grow, we need to be there to help foster and support that growth. This view is evidenced by our long-term committed and global nature of our relationships and decades of industry leadership we have built that level of trust. Even with the developments I spoke to earlier, our new development pipeline remains robust and still exceeds a billion dollars in potential projects across our three development priorities.

Thank you, Rob. Today I will discuss our capital position and liquidity and provide additional details on our 2025 guidance. First I'll cover our balance sheet. At quarter end, total net debt outstanding was $3.4 billion and total liquidity approximately $922 million, consisting of cash on hand and revolver availability. Net debt to core EBITDA was approximately 5.4 times. Investments in the expansion and development projects that Rob discussed will continue through 2025 with the Allentown, Kansas City, and Dubai facilities opening during the second quarter. Please see page 26 of the IR supplement for additional details on our development projects. Turning to our full-year 2025 guidance. As George mentioned, we expect AFFO per share to be in the range of $1.51 to $1.59 with a midpoint of $1.55 per share. At the midpoint, this represents an approximate 5% increase from 2024. Before reviewing the individual components of this guidance set forth in the press release and on page six of the IR supplement, let me quickly comment on the 2025 same-store pool for the global warehouse segment. This pool has 226 facilities which is approximately 97% of the total number of properties in our warehouse segment. A summary of our 2025 same-store pool's historic performance for the full-year 2024 is presented on page 28 of the IR supplement. We have seven facilities that are outside of the 2025 same-store pool. Now turning to the individual components of our AFFO guidance and starting with our global warehouse segment. We expect full-year 2025 same-store constant currency revenue growth to be in the range of 2% to 4%. Let me provide more detail around the key drivers of this guide. With respect to occupancy and throughput volumes, we expect economic occupancy to be in the range of negative 100 basis points to positive 100 basis points compared to 2024 and throughput volume to increase in the range of 1% to 2%. As a reminder, we're still lapping some counter-cyclical bills of inventory through the first half of this year and will return to a more normal seasonality trend in the back half of the year. With respect to pricing, we expect constant currency rent and storage revenue for economically occupied pallets growth to be in the range of 1.5% to 2.5% and constant currency services revenue for throughput pallet growth to be in the range of 2.5% to 3.5%. As a reminder, the pricing guidance reflects our expectation to see less outsized and off-cycle price increases and get back to more normalized GRIs and renewals. For the full-year, our same-store constant currency NOI growth is forecast to be in the range of 4% to 6%. The 2025 same-store pool services margins were 11.9% in 2024 and, as George mentioned, we believe we can sustain service margins in excess of 12% for the year 2025 aided by continued productivity initiatives and benefits from Project Orion. With regards to the 2025 non-same-store pool, as can be seen on page 28 of the IR supplement, the non-same-store pool generated negative $19 million of NOI for the full-year 2024. For the full-year 2025, we expect the non-same-store pool to generate NOI in the range of $0 to positive $7 million. As part of our ongoing active portfolio management process, we are strategically exiting five facilities during 2025. The majority of which are leased. The significant amount of the business in each of these facilities can be consolidated into other assets in our network generating meaningful cost savings. We expect the managed and transportation segments NOI to be in the range of $44 million to $48 million. We expect core SG&A to be in the range of $240 million to $245 million for the year, driven by incremental Q1 2025 licensing expenses of approximately $4 million associated with our new Oracle SaaS environment and $3 million of labor costs previously capitalized as part of Project Orion that will now be expensed. Other incremental costs include $4 million related to employee merit increases and $6 million of incremental investment in cybersecurity and IT transformation that will be recognized relatively throughout the year. For the full-year, we expect interest expense to be in the range of $145 million to $150 million, with approximately $19 million of interest being capitalized. For the full-year cash taxes, we expect to be in the range of $8 million to $10 million, and maintenance capital expenditures are expected to be in the range of $82 million to $88 million. Development starts are expected to be in the range of $200 million to $300 million. Please keep in mind that our guidance does not include the impact of acquisitions, dispositions, or capital markets activity beyond that which has been previously announced, and please refer to our IR supplement for detail on additional assumptions embedded in this guidance. Now I'll be turning the call back to George for some closing remarks.

Thanks, Jay. 2024 was clearly a successful year in growing our partnerships, deploying capital on low-risk development, enhancing our business with state-of-the-art systems, and growing our warehouse services business at margin levels that were aspirational not long ago. It's this momentum that gives us the confidence in our growth prospects for 2025. Unlike traditional industrial REITs, we have the ability to generate unique organic profit opportunities by being a customer service-focused, best-in-class operator, which we've done successfully for the past two years. We see nothing to change that going forward. As always, I want to thank our associates around the world for their professionalism and hard work every day. It's your dedication that gives our customers the confidence that Americold will be there to support their current operations and future growth. Thank you again for joining us today, and we will now open the call for your questions.

Thank you. At this time, we will be conducting a question-and-answer session. Our first question comes from Steve Sakwa with Evercore ISI. Please proceed with your question.

Yeah, thanks. Good morning, George. I guess, I wanted to come back to the occupancy target. You talked kind of minus 100 to plus 100. I know that was a challenging area in '24. I just am trying to reconcile that outlook with kind of the spread between economic occupancy and physical occupancy, which seemed to deteriorate between '23 and '24, and just, you know, the commentary that you're getting from kind of the major food manufacturers about their growth in product and how you sort of assess that risk moving forward?

Yeah, thanks, Steve. As you see, our guide is flat, right? We're guiding to zero improvement in economic occupancy over the year. It does say, though, that we do expect stabilization in the sense that we're back to seasonal trends, meaning that the first half of the year will be lower than the second half of the year. When I speak to the gap between economic and physical occupancy, let me turn that over to Rob, but you can expect the gap to increase as we increase fixed commitments, right? It's the nature of what a fixed commit is, a customer's reserving space for future seasonal use. So to go a little deeper on that, why don't you do that, Rob?

Yeah, we'll see the gap between physical and economic occupancy being a big concern, to be honest with you. First of all, we've been in a tough environment for a while, and we've had 15 straight quarters now growing our fixed commitments. We're very close to our publicly stated goal of being in the 60% range, and as George mentioned, as we sell more fixed commitments, that gap does naturally widen a bit just because of the seasonal nature of the business. And I think in the end, while maybe 10% sounds like a big gap at a macro level, if you think about it from a customer perspective, if you're a customer and you're reserving, call it 20,000 pallet positions in our network, and you're utilizing 18 of the 20,000 pallets, that's a very comfortable buffer to operate your business. So it's pretty normal there, and I don't think that the gap between physical and economic is a concern in our view.

Okay, great, thanks. And maybe, George, just to follow up on the service margin, I think you said it would maybe be better than 12%, but you've clearly demonstrated a great improvement here. Project Orion seems to be working well. I guess, how conservative is that margin, and where do you ultimately think that margin can go over the next kind of one to three years?

Yeah, well, Steve, the first effect on the same store pool is we recast the same store pool in the 2025 pool in 2024 terms, and the services margins, when you do that, are actually a little bit below 12% if you do that math, and I think Jay explained that in his portion of the script. So we're starting from a little lower base when you take that into account. So greater than 12% is actually expanding those margins from where we are today. Is it conservative? You know, we've been beating it pretty consistently, but at the beginning of the year, it's difficult to know exactly where we'll land. We know we'll be in excess of 12%. A lot depends on business mix. A lot depends on throughput volume, which we're guiding up this year. So I'd say it might be on the conservative side, but in this environment, as you know, things are changing pretty quickly, and what we do know is we can beat 12%, and that's why we made the commitment in our guide.

Our next question comes from Michael Mueller with JPMorgan. Please proceed with your question.

Yeah, I guess what specifically are you hearing from customers that make you think that you're on the cusp of normalization, and as you look at the spectrum of customers, is it really being driven by one segment versus another?

I don't think it's driven by one segment versus another, Mike. I think that the lower inventory we're seeing at the moment is very, very low. We're seeing throughput tick up a little bit, which means that activity is picking up a little bit. We're guiding to higher throughput, as you see, so I think it's just what we've gone through over the last two years and where we sit today, we feel like that we're stabilized, as we said in the script, and to that point, we feel like the second half of the year will go back to normal seasonal trends and be higher than the first half. So that indicates that we believe, at least for this year, the bottom is in the first half of the year. So it's been a long process over the last 24 months to get to where we are now, and we think we're at the point where seasonality finally takes over from builds of inventory that weren't driven by demand or weren't seasonal. So that's a positive, albeit off a lower base.

No, I think one thing we showed is, even in this environment, in this lower base, we show the ability to grow profitability, and we're just managing what we can control through this environment, and we'll continue to grow the bottom line through it.

Got it, and just following-up on occupancies, what's your best sense today as to what normal, more normalized physical and economic occupancy ranges should be compared to what you're expecting for this year?

You know, I can't really comment on that, Mike. It's, as I said, the last two years on occupancy have been pretty challenging, and I don't think anybody could predict the future. We view it as flat year-over-year, but back to a seasonal trend off a lower base, and to me that's a positive because it speaks to normalization, and then we can grow from that point, but predicting occupancy at this point, I think anybody would have a problem doing that.

No, but I think long-range goal, I mean, we've always said mid-80s is the target, and we still feel that's achievable. Rob talks about the very good pipeline of new business we're working on, and we actually feel that even in this environment, we can, in the end, grow our occupancy. It's really just lapping, still a little bit of the kind of counter-cyclical inventory build that I talked about previously that was built in 2023. We still have a little bit to lap at the beginning of this year, but once we lap that, we feel with where the consumer is today, we can build with our business development team on top of that.

Yeah, my comments were more near-term, but longer-term, we don't see any impact on the business in terms of our goals for occupancy, our goals for 85 or even higher percentage points. We said we could even get into the low 90s, but they're all achievable over the long run, and we believe in the long run we'll get to those numbers, but short-term were the comments I made referring to.

Our next question comes from Blaine Heck with Wells Fargo. Please proceed with your question.

Great, thanks. Good morning. George, appreciate your commentary on the expected timing of a return to normal seasonality in the back half of the year, but I guess following up on that, what do you think we need to see specifically to ensure that happens, and what signals should we be looking for? Is it all about interest rates and inflation moderating, spurring stronger consumption? I guess, how does inventory rationalization amongst your tenants play into the softer conditions, and are there any other major industry dynamics that need to improve? What should we be monitoring before you think we can see that more of an inflection in operations and occupancy?

Yeah, Blaine, I think the number one activity that is going to drive occupancy in the second half of the year is something we mentioned on the previous call, or Rob mentioned on the previous call, with his sales initiatives. We have targets out there to drive occupancy in the second half of the year that we know we're making great progress on right now, and I'll ask Rob to comment on that in just a second. But the reason we also believe this seasonal trend is there, if we look at our customers' holdings right now, it's clear they're low enough that they have to build to hit even any incremental demand when we hit summer grilling season, holidays, etc. So at inventory levels we're at now, our customers would have to build, we believe, at least nominally to get to service the second half of the year. But coming back to the sales initiative, we talked about last year, let me ask Rob to comment on a little bit.

Sure, yeah. We'd love to see, obviously, the overall base rise, but in the absence of some of that in the short term, we're focused on winning new business, and that new business comes from market share gains. It comes from going to customers who have insourced business historically over time and showing them the value of outsourcing to Americold, and we're having a lot of success doing that. We're very encouraged by the progress around our new business sales, particularly deals closed in the fourth quarter and thus far in the first quarter of this year. And when we look at it year-over-year, we're actually significantly ahead as it relates to new business deals closed over the last, call it four months to six months, compared to where we were at this point a year ago. So we're making a lot of progress there, it will take a little bit of time for those volumes to materialize, and that's what we've shown in our guide of back half improvement around occupancy.

Our next question comes from Michael Carroll with RBC Capital Markets. Please proceed with your question.

Yeah, thanks. Rob, can you provide some more color on the probability-weighted new business pipeline that you mentioned in your prepared remarks? And also can you kind of help us quantify this $200-plus million of opportunities? I mean, it sounds like that's roughly 8% of the current run rate, revenue run rate, and is that the right way to think about it?

Sure. So when we think about that, that probability-weighted pipeline. So when we say probability-weighted, what we mean is the $200 million in terms of a total pipeline, it's actually much larger than that. That's the, the $200 million is when we put a probability against those opportunities, what we think we can close over time. That is higher; that $200 million is higher than what we've seen over the past couple years. So our pipeline of new opportunities has been growing. As I just mentioned, what we're very encouraged by is the fact that our close rate or our win rate around those opportunities is climbing now as compared to a year ago. So when we think about the maturity, when we think about the probability of the pipeline and those deals actually closing and materializing, it's going up year-over-year and that's great. So I think when we look at the quality of the opportunities, a lot of them are longer-term deals, they're fixed commitments, they're around, they're in sectors like retail and others that are a bit idiosyncratic to Americold. So we're very encouraged by it and we think that it's going to be a big part of the reason why we see occupancy gains in the back half of the year.

And keep in mind that the retail wins come with a much higher term business, too, so it benefits the throughput numbers that we're guiding to, too, because we are bringing on customers' retail QSR focus that just has more throughput as part of the business we do with them.

Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi, thanks. Good morning. I just wanted to follow up on that point, I guess. I mean, it sounds like the new business pipeline is solid in that you're still assuming around a 3% run rate in the new year, but I was just curious if you could speak a little bit more to the lease expirations in '25, also '26. I didn't see that detail in the supplement this quarter, but as of last quarter, it was around 13.5% expiring in '25, a little over 16% in '26. Can you just speak a little bit about what the expectations are on expirations?

Sure. Yeah, that's right. We wouldn't consider either one of those percentages outsized compared to typical years. As we've said, our average contracts for customers that are in existing infrastructure tends to be in that three to seven year range. So, anywhere between 15% and 25% of the business rolls on an annualized basis. And we have a very high renewal rate, as evidenced by that low churn rate. And nothing's changed over the course of the last couple years. We continue to be very successful renewing those agreements. We expect to do the exact same. The conversations are very constructive with customers at the moment about renewing. And I would continue to point to the fact that, for 15 straight quarters now, not only has that churn rate stayed consistent, but we've been growing that fixed commitment percentage. It does get a bit harder now that we're close to the 60% goal, but the structure of the agreements, the term of the agreements, the fixed and committed nature of them, we would expect to continue even as we get into these renewal conversations.

Yeah, let me start and you can fill in the gaps, Rob. So, yeah, as I mentioned, they're primarily leased facilities that are at the end of their lease. Scott Henderson is doing a good job managing our portfolio, and these were underperforming properties where we have other buildings that are owned next to or close to, so ease of moving product. So, when leases come up, rents go up. If they're underutilized facilities that we can move the inventory, cut costs, avoid lease increases, and move it into owned facilities, that's what we want to do. We want to run our business on owned facilities, and some leases are coming up, and we're taking advantage to put the inventory in owned facilities and save costs and avoid any potential increases in rent.

Yeah, I would say, this is just good portfolio management, right? If you've got two facilities and you're in the environment we're in, and one's leased and one's owned, you can consolidate. It's just a smart move, and we're going to take certain advantages in times like these to manage our portfolio in a way that creates more NOI for us, and I think Jay made the comment earlier that we can make money in almost any environment. We've proven that over the last two years. We can grow margins in almost any environment through productivity and other things. Well, in this environment, one of the other things we can do is manage our portfolio a little better, and that's what we're doing, and that will also contribute to the bottom line.

Our next question comes from Nick Thillman with Baird. Please proceed with your question.

Hey, good morning, guys. Maybe touching a little bit more, Rob, on the new business sort of pipeline. I know at the end of last year, you were commenting on less aggressively pricing sort of new business versus customers in the box. Has that kind of spurred the demand that you've been seeing? Is it really been a more cost-conscious sort of customer? And then maybe along those lines, it seems as though most of that mix is just market share gains, but maybe you could comment if there's any sort of new business that you're seeing as well?

Sure. Yeah, so I think to the first question, it's a number of factors, right? So certainly, we have an activity-based pricing model that reflects current market demands, and so we are certainly pricing the business to reflect the current market, and that helps spur some demand, which I think is very helpful and contributes to our pricing guide for the year. But also, when you think about our value proposition, I mean, from an operations standpoint, as George talked about, we've never been operating better than we are today. Our customers recognize that, and we mentioned a few of the public recognition that has been awarded to us that we're very proud of, and so that leads to market share gains. And so, we're seeing a number of reasons contributing to the success we're having from a new business acquisition standpoint, and some of it beyond just market share gains is going to customers, being able to talk to them about the benefit of outsourcing to Americold, and we're seeing some customers that have historically done the business on their own outsourcing to us. And as I mentioned, an area that's probably particularly geared towards that is retail, and so we're having a lot of success growing that sector of our business, which, over the last couple years, has been one of the fastest growing, and there's a bit of a moat around that because that is very operationally intensive, but there are benefits associated with throughput and turns, and so because we have a proven track record of being successful there, we're seeing more and more customers in that sector looking to Americold to provide that service.

No, I think you've got it right, again. We talked a lot last year about the 2023 build, and a little bit was still on our books to start last year, so we're going to be lapping that. On top of it, just pure seasonality, that's the part of the year that would go down, too. So you have two things affecting that, but we'll definitely be recovering that in the back half of the year. And then on top of that, we are seeing as we move through the year, positive trends on throughput, as Rob discussed, the overall mix of our business becoming more and more retail, which does drive increased throughput.

Our next question comes from Greg McGinniss, Scotiabank. Please proceed with your question.

Hey, good morning. Just looking to the development pipeline, could you touch on the relative attractiveness and expected returns for roundup versus customer expansion versus tapping into the strategic partnerships, and then the relative size of each of those components in the billion-plus dollar pipeline?

Yeah, we've always said in the past that we believe that the combination of CPKC strategic partnership and our strategic partnership with DP World combined was over a billion dollars worth of development. Rob, in his section of the script, described progress we've already made against that billion-dollar opportunity, and obviously by the size of what's outstanding, there's more opportunity outside of our partnerships. All of our underwriting is geared toward a 10% to 12% return. We don't vary the return based on size of the building, based on segment, etc., so that's a standard in our underwriting that we would take a very unique situation for us not to underwrite to. So unique it hasn't happened in the last couple years, so that's a standard that likely will remain. And every opportunity is different, right? I mean, if you look at Port St. John, which we just announced, the size of that facility is different, and the scope of that facility is different than the one we're building in Jebel Ali outside of Dubai. So each opportunity is unique. The consistency is that we underwrite to the 10% to 12% return, but the opportunities are unique because every business we look at, whether it's the same company in a different geography or if it's different companies, the requirements change pretty dramatically based on where the buildings are and what they're tasked to do.

And one thing I would add to that, that we're very encouraged by, is the fact that when you look at the current development projects, just as an example, that are in the ground, and as we mentioned, there's over $0.5 billion of growth capital in the ground at the moment. They cover all three of those priorities. So we have expansions in major markets. We have customer-dedicated capacity that's being added. We have over a $0.25 billion in partnership builds in the ground. In any way you cut the pipeline, there are international projects, projects domestically, there are automated projects, and projects conventionally. So regardless of how you segment our pipeline, there are opportunities in every one of those segments.

Our next question comes from Ki Bin Kim with Truist Securities. Please proceed with your question.

Thank you. Good morning. So, going back to your guidance for non-same-store NOI of zero to $7 million in 2025, just help me understand that a little better, because you have a lot of projects that are nearing stabilization and development pipeline, so I would have thought it would be much higher than zero to $7 million. Maybe there are some others that are detracting, so maybe you can help us understand that better.

Yeah, let me cover that one, George or Rob, if you want. So, yeah, as I mentioned, they're primarily leased facilities that are at the end of their lease. Scott Henderson is doing a good job managing our portfolio, and these were underperforming properties where we have other buildings that are owned next to or close to, so ease of moving product. So, when leases come up, rents go up. If they're underutilized facilities that we can move the inventory, cut costs, avoid lease increases, and move it into owned facilities, that's what we want to do. We want to run our business on owned facilities, and some leases are coming up and we're taking advantage to put the inventory in owned facilities and save costs and avoid any potential increases in rent.

Yes, I think that's the story. It's just the individual timing of ramp-ups of very large developments, that's all, and I think as Jay said very well, by the time we get to next year, we're in full run rate mode.

We have reached the end of our question-and-answer session, which concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.