Hello, everyone.

Thank you for joining us, and welcome to Lineage 4th Quarter 2025 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw the question, press star 1 again. I will now hand the call over to Keebin Kim, Head of Investor Relations. Please go ahead.

Thank you. Welcome to Lineage's discussion. of this fourth quarter 2025 financial results. Joining me today are Greg Lemko, the NAGES President and Chief Executive Officer, and Rob Lemasters, Chief Financial Officer. Our earnings presentation, which includes supplemental financial information, can be found on our Investor Relations website, and following your management's prepared remarks, we'll be happy to take your questions. Before we start, I would like to remind everyone that our comments today would include forward-looking statements under federal securities law. These statements are subject to numerous risks and uncertainties as described in our comments. These risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and would not be updated as actual events unfold. In addition, reference will be made to certain non-GAAP financial measures. Information regarding our use of these measures and a reconciliation of non-GAAP to GAAP measures can be found in the press release and supplemental package that was issued this morning. Unless otherwise noted, reported figures are rounded, and comparisons of the fourth quarter of 2025 are to the fourth quarter of 2024. Now, I would like to turn the call over to Greg.

Thank you, Kepin, and good morning, everyone. Let me start by first thanking our valued customers and all our incredible team members at Lineage, who did an outstanding job driving efficiencies and executing on significant new business wins in the quarter and throughout 2025. I'm truly grateful to be working alongside such an outstanding group of men and women each and every day. I'll walk through our agenda for this morning. First, I'll recap our fourth quarter performance, which came in line or slightly ahead of our expectations on all key metrics. Then we'll discuss our, followed by our latest view of, following my remarks, I'll turn it over to Rob LaMasters, our new CFO, who started back in November and has already made meaningful contributions. Rob will walk through the details, closing comments, before turning to quarterly performance on slide four. During the fourth quarter, total revenue was flat year over year and adjusted EBITDA. The total AFFO of $214 million and AFFO per share of $0.83 were flat year-over-year, but both ahead of our expectations. AFFO this quarter, and more advanced, as I continue to push the team to optimize every aspect of our business, Rob will expand on these efforts. Full-year 2025 adjusted EBITDA declined 2.3% year-over-year to $1.3 billion, and full-year AFFO per share increased 2.3%. Looking at the underlying business drivers, we saw further occupancy. Stay-in-store physical occupancy improved sequentially by 400 basis points to 79 points with more normalized seasonality, just as we anticipated when providing second app guidance last year. Year-over-year physical occupancy. That being said, we're entering 2026 and we expect to maintain this. We look to partner with our customers to manage the season.

We are comfortable to 1.4 agency has been Keep in mind the impact results, given the attachment of higher shiftiness, slide 8. Global integrated solution segments EBITDA grew 15% to 61 million and our fourth quarter NOI margin for GIS improved by 470 basis points. We are continuing to see strong momentum in our U.S. transportation and boost due to the value of the term upside and the combined offerings of our GIS business. Our ability to bring to market a global network of assets to turning to slide 9. Fourth quarter adjusted EBITDA declined 2.4% year-over-year to $327 million, and full-year adjusted EBITDA declined 2.3% to $1.3 billion, both in line with our expectations. Fourth quarter AFFO per share was flat compared to the prior year at $0.83. That full year AFFO per share grew 2.4% to $3.37 per share, both ahead of our expectations and consensus. As we progressed through the wrap-up of 2025, our first full year as a publicly traded degree, our tax team was able to successfully enhance its tax planning initiatives to substantially drive upside to our guidance. We finished the year with a current tax expense for AFFO of $15 million versus our prior guidance of $30 to $35 million. Our fourth quarter tax expense was better than our expectations by approximately $18 million dollars or seven cents per share. On a go-forward basis, we expect about half of that beat to be sustainable. That's off to our tax team for driving continuous improvement in our tax structure. Ultimately, even if we excluded four cents of non-recurring tax benefits, we still came in above the high end of the year. In addition, our heightened cash flow focus allowed us to better manage recurring maintenance capital expenditures, allowing us to come in slightly lower than our guidance at 56 million. We know investors focus on same store NOI and so do we, but we are also focused on driving every lever of efficiency and cash generation, not just same store metrics. We are proud to see our team members also focus on EBITDA and AFFO helpful. To that end, today I want to announce that we have accelerated our internal efforts to drive efficiencies on our admin and indirect. We see opportunities to further streamline our organization while continuing to fully support our team members in the field. We have line of sight to 50 million dollars plus of annualized cost savings by year-end 2026 by streamlining and centralizing select functions. We have been studying this opportunity for a couple quarters and believe we can prudently right-size and combine teams to drive immediate savings and speed up decision making. We see about half of this hitting 2026 and we'll describe how we layer this into our guidance further in my prepared remarks. Turning to slide 10, we ended the quarter with total net debt of $7.7 billion and total liquidity of $1.9 billion. During the quarter, we issued $700 million of 7-year euro bonds at a 4.125% coupon and locked in a $1.25 billion floating to fixed forward swath at a rate of 3.15% through February 2028. These fourth quarter transactions come on the back of our inaugural $500 million U.S. dollar bond offering issued at a coupon of 5.25% in June of 2025. We appreciate the confidence of our fixed income investors in our investment grade rated balance sheet. We welcome all these new global fixed income investors to our call, and I look forward to meeting you in the coming months. On leverage ratios, you can see here that our net debt to adjusted EBITDA was 6.0 times at the end of the quarter. Also on this slide, we added what we hope is a helpful supplemental disclosure commonly asked for by our investors. This metric, adjusted net debt to transaction-adjusted EBITDA, adjusts for the $1 billion of capital investments made into our development pipeline, the corresponding non-stabilized NOI, and the NOI tied to intra-quarter acquisitions or dispositions. Under this methodology, which is consistent with the reporting practices of other top companies within the REIT sector, like Prologis and First Industrial, our leverage is 5.2 times. Also, keep in mind that our development projects have been significantly de-risked, given most of these projects are anchored by customers with long-term commitments. Thanks to our new great leader of investor relations, Kevin Kim, who many of you know from his prior life, you will notice this and other supplemental disclosure enhancements. Finally, I would be remiss to not mention the sale of our Santa Maria site, a great example of the shareholder value enhancing transactions we are evaluating. As Greg mentioned, we will explore every opportunity to address the valuation mismatch between the public and private markets, including joint ventures and or partial monetization actions that help generate capital on page 11 let's discuss we are initiating 2026 guidance with same store NOI growth of minus 4% to minus 1% total warehouse NOI growth of minus 2% to plus 1% GIS NOI growth of 0% to 2% adjusted EBITDA of 1.25 billion to 1.3 billion, and AFFO per share of $2.75 to $3 per share. You can also see the additional guidance details we have provided in the past, including admin of $465 to $480 million, stock-based comp of $125 million, interest expense of $340 to $360 million, current tax expense for AFFO calculations of $20 to $30 million, and recurring capex and see improvement in supporting this outlook will be the ramp of our development projects and the 2025 purchased M&A coming online throughout the year. We will also see acceleration of our productivity and SG&A initiatives as we move through the year. As we centralize and optimize some field expenditures into admin, this will create a modest headwind to admin expense. This will also conversely act as a tailwind of about a hundred basis points to 2026 same-store NOI. Ultimately our guidance for admin is 465 to 480 million dollars which contemplates the field cost shifts, inflation, and higher 2026 bonus. These items will be offset by the cost savings initiatives we outlined earlier. Together, these factors and the typical seasonal shift from Q4 to Q1 will result in adjusted EBITDA in the first quarter of 2026 following a sequential decline comparable to that experience in the first quarter of 2025. Finally, AFFO in 2026 will experience a headwind from expiring interest rate hedges and from annualized interest expense from the U.S. dollar and Eurovaud offerings we did in the middle of 2025. However, prudent CapEx management and improved tax planning will allow us to deliver a solid base of cash flow per share. All of this should set us up to deliver a solid 2026 and allow us to focus on continuing to mature the organization and remain the industry leader for you.

Now that Rob has walked you through our 2026 guidance, I want to reaffirm that while we're operating in a difficult environment in certain markets, We believe Lineage remains extremely well-positioned to exit these challenges as an even stronger company by increasing our future operating leverage across the business. Allow me to summarize the four things showing signs of normalization with a return to normal seasonality, customer inventory stocking largely behind us, and many markets stabilizing after digesting use. Second, we are focused on controlling the controllables as highlighted by our $50 million admin and indirect expense saving announcement. These are, in addition to our already-in-progress productivity issues, including LIDOS, that are expected to offset third, while not built into our guidance, reduced inflation, interest rate reduction, consumer tax stimulus, and international trade stabilization. Lastly, while our balance sheet is already in great shape, we will continue to look for opportunities to unlock value, further enhancing our liquidity. This will maintain our investment-grade rating and enable us to opportunistically take advantage of strategic investment opportunities before turning it over to your questions i'll provide a quick update on lino s our proprietary warehouse execution system as of today we've deployed lino s to 10 sites and expect to at least double that number before accelerating even further in 2027. we remain confident and on track to deliver the savings we out of 110 million dollar run rate savings when i take a step back and look at our company i see the largest best position player in mission critical business with excellent team members cash flow generation of our company remains strong we grew this business successfully for 15 years leading up to the ipo and we believe the again i want to thank our global team members for their dedication and commitment to our customers operator at this time i'd like to open it up for questions we will now begin the question and answer session in the interest of time please limit yourself to one question if you have a follow-up question, please rejoin the queue.

To ask a question, press star 1 on your telephone keypad. To withdraw the question, press star 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by now while we compile the Q&A roster. Your first question comes from Ronald Camden with Morgan Stanley. Your line is open. Please go ahead.

Great. I just had a question on the same store and why guidance. You know, you exited the year down five. You know, you talked about sort of the first half versus second half dichotomy in 2026. And, you know, the disclosure on the markets that are, you know, stabilizing down, I think is really helpful. But just wondering if you could just contextualize just the conviction on the same store getting better. And when you think about sort of the markets and the different supply cycle, any sort of numbers on how the same store and why ranges between those buckets?

First was on the volume or occupancy side, if you will. We're coming into the year in 2026 at a little bit of a lower level. You can see that in our same store metrics. So you can see that we're going to ultimately have to add us a little bit of a headwind as we go in. That's just a minor headwind as we go into 2026. The second element of how we thought about our guidance is that while we're seeing great net price put out to the market. We have the same factors that impacted us in 2025 in terms of mix, in terms of import-export, just as we look out. And so that ultimately will be a little bit of a drag of our revenue per pallet, if you will. Again, we're seeing net pricing of one to two percent. That blends just slightly lower. And then the final factor, as we thought about it, is just, you know, we are fighting inflation overall. As a company, we're doing a lot on the productivity side and so we're really striving to keep noi margin if you will flat but that of course you have just minor pressure there we saw a little bit of that in 2025 so those three factors really kind of blend up uh and we'll see a good pattern as we evolve through the year as we said we're starting at the low end but all the initiatives that greg outlined really sets us up nicely as we your next question comes from the line of michael goldsmith with ubs your line is open good morning thanks Thanks a lot for taking my question.

Can you talk through the impact of idling assets? How many assets did you idle during the quarter? Did that have a positive impact on occupancy? And if you can quantify that, and then also, if you're idling assets, what are the add backs to earnings just to try to get a better understanding of kind of what has been moving in and out of the same store pool and the financials?

Sure. Thanks, Michael, and good morning. So, last year we idled 10 sites, and the benefits are obvious. We can, you know, move labor, move the customers to adjacent sites and lower overall cost and increase our occupancy in the receiving sites. This, you know, for 2026, because our physical occupancy is relatively strong, we don't think we'll see quite as many opportunities in in 2026 as 2025 and the overall impact on the on the you know the noi and uh and the occupancy was was pretty negligible we took out less than one percent or around one percent of our supply and as far as we treat uh any of these costs they roll into our non-same store pool your next question comes from the line of caitlin burrows with goldman sachs your line is open please go ahead Hi.

Good morning, everyone. On dispositions, the non-core SoCal disposition you did, what made that property non-core and how representative is the mid-6% cap rate in the U.S.? And then are you willing to sell international assets and what types of multiples or cap rates are you seeing in the international assets?

Good morning, Caitlin. So the SoCal asset, I would say, was kind of a medium-quality asset in our U.S. portfolio. It was a single user and did not support any of the surrounding public customers in that And so, the user wanted to purchase it. It was a reasonable price for us, reasonable valuation, so we decided to go ahead and achieve a little bit of liquidity there.

As far as other dispositions, Rob will probably talk about this on other questions, but we're looking at the entire portfolio to optimize and certainly analyzing the public versus private disconnect in valuations and kind of more to come on that as the year progresses nothing to announce today yeah I guess I would just comment I had the group as a new kind of look at the overall environment what we're seeing in terms of transactions and actually pleasantly surprised with some of the comps that I'm seeing out there over the past year you know we've seen over a billion dollars at least the transactions that there's DHL or folding or otherwise and of course we're familiar with the multiple we saw on our property we're really seeing you know strong mid teens even on multiples now sometimes these are in certain geographies but that ultimately translates into those low you know six percent to make six six cap rates so we're feeling good about it I wouldn't say there's any comment we have about specific geographies per your exact question we'll really look as Greg said are we the best owner of that asset or not and so we'll be going through an evaluation just of our whole portfolio as we always do but we'll be looking very and emotionally at that. And frankly, we see the opportunity to create capacity, you know, for opportunities that we are almost sure will present themselves. We don't currently have anything on the docket now, but we're looking hard at, as this industry turns, really having the firepower to do whatever we want to do.

Your next question comes from the line of Alexander Goldfarb with Piper Sandler.

Hey, good morning. Just going back to the the topic of customers switching. You mentioned sort of one to two years after, you know, a tenant takes a new facility that they may end up switching. We've been hearing about this for quite some time. I just want to get a sense, is this more of a talking point or are you seeing like tangible or anecdotal evidence where, hey, in the past six months we've seen a noticeable uptick in, you know, people moving out a new entrance into, you know, your facilities? Just Just trying to see, as the supply ebbs, how much this is really a tailwind versus just something that is a talking point, as I say.

Yeah. Thanks, Alex, and happy birthday to you. So as we talked about in the prepared materials, we are seeing a clear trend. So in the U.S., where we're seeing really the only region in the world where we're seeing the excess supply. 60-plus percent of our markets have not seen excess new supply. We had to work through the destocking, but those have been on stable ground for some time, and we expect them to be on stable ground in 2026. Directly to your question and why we feel so good about our ability to compete in the medium term is because markets like New Jersey, Dallas, Houston, where this new supply hit earliest, you know, we did take a hit there. And now we're seeing, this isn't anecdotal, we're seeing a lot of customers come back to us because of our, because of all the structural advantages we have, especially our service And so we can, you know, we can group those into a very large pool and say the NOI went down and now the NOI is up or stabilizing. And then when we look at our 2026 plan, we can see, you know, late cycle markets like Allentown to Miami, where we're still facing pressure. But the fact that we've seen so many markets go through this cycle, and we're seeing ourselves starting to win again, gives us confidence. And the new supply being delivered in 26 and beyond is minimal. And so even without, you know, supply absorption, which we think there's lots of reason to believe Your next question comes from the line of Blaine Heck with Wells Fargo.

More of a high level question. There's been a lot of attention paid to the impact of AI on different businesses over the last several weeks and months. I know you guys have done a lot on the technology enhancement and data analytics sides already. But in general, you know, how do you see your business being impacted by AI, whether that be on the warehouse or GIS side?

We've been thinking a whole lot about this. I mean, so certainly, you know, AI promises to make supply chains more efficient, and that could potentially reduce storage needs over time. But supply chains take a long time to change and optimize. And what we're seeing right now is that customer inventory levels are effectively at the bottom, given the high interest rates, cost-driven by the kitchen. AI can't change. We're best positioned to leverage robots because of our approach with Linux.

Your next question comes from the line of Michael Carroll with RBC Capital Markets.

Who provided some color on the seasonal pickup that was delivered this past quarter? I mean, how would you qualify that pickup? Was it more muted than normal seasonal patterns, or was it in line with the historical patterns? And if it's more in line, I mean, can we assume that the inventory destocking is probably behind most of these customers? Or I guess how should we think about this occupancy being higher than expected, probably in the fourth quarter at least versus consensus estimates? Yeah, Michael, good question. I mean, we kind of called the bottom of inventory stocking in the first quarter of 2025, and I think, you know, history is proving us right there. And in mid-25, we said that very much, you know, back to a normal seasonal pattern. The uptick happened a little bit later in the, you know, it happened in July versus June, and then it hit as normal. So I think two things that are really important takeaways here. We believe inventory stocking is behind a very low and lean level, and we would expect it.

Your next question comes from the line of Greg McGinnis with Scotiabank.

Hey, good morning. I just want to talk on the integrated solutions. You know, we saw the considerable margin improvement with the European disposition. Is there more room to run on that business? Would you get back into Europe? Can margin improve further from here?

Yeah, I'll take that. It's Rob. So we had a really good margin performance in the fourth quarter. I think that's emblematic of kind of how we see the business. Now, generally, the GIS segment has a strong Q2 and Q3, so just be aware of that. But overall, the reason the margin really ticked up was just as you shedded that European business, which frankly did not have comparable margin to the overall base, you take that out, you take the revenue out, and really, as you start looking at the fourth quarter, that's the way to start taking in the underlying business. So we still see opportunity overall. We see good growth in that business. So, of course, we'll leverage the cost there. But I think that's a good run rate to kind of be thinking about margins and the profile going forward.

Your next question comes from the line of Craig Mailman with Citi.

Hey, good morning, guys. I just want to circle back on the asset sales and kind of market potential pricing for assets. I know you guys said the six cap was on a user sale. Just curious, was that already a triple net lease, or were you guys kind of operating that? And what do you think that would have been on a kind of a true, you know, sale to an investor rather than a user? And, you know, also, Rob, I think you said pricing may be in the mid-teens EV to EBITDA, correct me if I'm wrong, but you said that translates into the low six cap range. Could you kind of just bridge that comment and just provide as much color as you guys can?

Yeah, overall, it was. triple net lease so that that was the property it's always hard to say you know with the buyer and so we can't really sale price overall uh as i mentioned we're seeing uh you know mid teens evita multiples and low to mid six cap rates so ultimately i mean it depends on the region they're sold it depends on the mix depends on the buyer as you say so i'm just trying to give you a general sense for for what it is but it really matters what geography you're in and so forth and who the buyer is your next question comes from the line of Michael Griffin with

Evercore great thanks I'm curious your thoughts on the feasibility of converting you know a lot of cold storage facilities out there to alternative uses I know there have been some reports I think there was a facility in LA that was getting converted to a soundstage you know Greg you talked about the potential for data center conversions is this a real catalyst to improve the supply picture, or, you know, I realize any prospective investor would probably have to get in at a favorable basis, so is it just on the margin going to help supply? Just curious your thoughts there.

Sure, Michael. Let me take that question and broaden it a little bit just to our thoughts on overall supply. And so we think there's a bunch of reasons why supply can get absorbed over time, you you know, faster than if you just take the new supply minus the 1% increase in end consumer demand. The first one is the one you highlighted there, is just the, you know, the alternative uses. I think we are seeing that. There was, you know, in the last couple of quarters, there was a facility in Atlanta that was quite large, I believe it was about a million square feet, that was repurposed for residential. We are days away from signing our second small data center installation, and we continue to pursue those types of opportunities as we have excess power in the network already, and we believe we have the ability to dial up power with the utilities over time. So I think this is a really real opportunity. You know, it's not going to dramatically change the supply picture in itself in 2026, but we're evaluating our global portfolio. You know, we've calculated how much excess power we have, and we're looking to see how much more power we can get. Other things that could impact the supply picture are, you know, we believe that some of the new entrants into our industry will last four years based on our channel checks and direct conversation. We think that they'll exit the industry, and we think some of those assets, especially in kind of the most over. The other thing I'd like, if you will, it didn't make sense to retire.

Your next question comes from the line of Samir Canal with Bank of America.

Good morning, everybody. I guess, Greg, I'm sorry if I missed this, but when I look at the GIS segment and your guidance for the year, is there a 2%? I mean, it is a decel. You did, I think, 8% last year, double digit and 4Q. Is it just sort of tougher comps, or is there something I'm missing?

Yeah, I mean, we had a great year this year, So there are tougher comps, but there's a couple things I'd highlight that are weighing on our guidance there. The first one is fuel. You know, fuel is fuel declines, especially in the first half year.

Your next question comes from the line of Daniel Guglielmo with Capital One Securities.

Thank you for taking my question. Can you just give us a quick update on the lean journey, how many facilities have been done there to date? And as you roll out to additional warehouses, have there been any changes to that program or how you implement it?

Yeah, I mean, we're up to, you know, call it a third of our revenue base being directly supported by a lead manager. We are taking those resources now and elevating them from a single building or two buildings to regional support. And we're also kind of joining their efforts with our LIDOS deployment team. So we're deploying technology and, you know, good – and so we're committed to lean.

Your next question comes from the line of Todd Thomas with KeyBank Capital Markets.

Hi, thanks. Good morning. I wanted to see if you're able to share an end of January or year-to-date occupancy update. And then I think you commented that the 600 basis point spread between physical and economic occupancy is expected to be stable throughout the year and that you are through a good portion of the, you know, volume-based guarantees and resets this year. Last year there was a little bit of volatility moving from 4Q to 1Q. So I was just wondering if you can provide a little bit more detail on where you're at in that process.

So January has come in line with our forecast. You know, for modeling purposes, keep in mind that the first quarter is a seasonally soft quarter. Historically, if you just look at kind of pre-COVID USDA data from Q4, and again, we think the seasonal clocked more. Also, you know, is the ongoing, if you look at Q4.

Greg had made comments earlier last year about working. We sort of tried to address that as early as we could. As we look at other players having to address that, that is a painful factor, just trying to work through your economic versus physical. And so I think the team has done a great job as I come in here of working that through and not having that at the head with that other.

Your next question comes from the line of Brendan Lynch with Barclays.

Good morning. Thanks for taking my question. I wanted to ask on the evolving tariff situation and how it's going to impact your business. I think post-Liberation Day there was some concerns around seafood in particular. So is the current 10, or I guess it's now 15%, blanket tariff better or worse than the tariff policies that have been in place since April?

Yeah. Great question. I mean, our seafood customers are very, I would say, and when they order, you know, the tariffs drive that, the ocean rates drive, and, you know, we'll see what happens with the Supreme Court hearing. Obviously, it's being challenged in multiple ways. I think the bull case there is that tariffs could be lowered, you know, meaningfully in the state and federal courts. I think, you know, we're – if we look at, you know, the import and export side, we are at a historic low right now, and that's hurting us. It hurt us in the fourth quarter. We expect it hurt us in the first quarter.

But we would expect – Your next question comes from the line of Omoteo Okusanya with Dushbank.

Hi, yes. Good morning, everyone. The $15 million of savings that was discussed, just wanted to kind of get some clarification around that. Is that mostly G&A-type expenses? Is it more of a focus on kind of cost of operations in terms of labor and power? And also, hello? Okay, perfect. And I also want to kind of get a sense of, in terms of timing as well, you know, I think you kind of mentioned half of it kind of coming on in 26, but how do you kind of think of beyond 2026?

Yeah, thanks for the question. Yeah, so the $50 million of annualized savings that we hope to essentially get our hands around during 2026 to see the full impact of that in 2027 is both an admin thing as well as an indirect, if you will. We are seeing opportunities at the indirect side at the sites. You know, these are exercises that we've frankly been looking at for a while. We've been growing quite rapidly as a company. I came into the middle of an exercise that was being done to really look across the company and say, where can we sort of centralize, where can we optimize, where can we bring some productivity, are there overlapping functions that are frankly happening at the sites versus in admin? We're also looking to deploy different technologies and AI, just frankly, figure out how to do more with less. And so, these are never easy decisions. So, the timing of how we actually see that playing out in 2026, we're roughly, I think, about half of that, but, you know, we'll see how the year goes and we need to progress through all those initiatives. But, again, it's about $50 million. You know, just to touch on how the site level expenditures happen versus the admin, we talked about that 100 basis points. So, we went out to the sites and at corporate and sort of tried to do an inventory and we saw some opportunity at the sites. to essentially bring some of those costs in, we would have optimized them anyways, frankly, at the sites. And so, as we combine those and actually bring those into corporate, we're sort of saying that that's going to be a net impact. If we had not, you know, sort of brought that into corporate, that would have been a net impact of about 100 basis points. I wouldn't be surprised if we actually figure out how to optimize that even more and bring that as a lower impact, if you will, on a pro forma basis to something like 75 basis points, but that gives you a sense for both the $50 million as well as how we see that.

There are no further questions at this time. I will now turn the call back to Keevan Kim, Head of Investor Relations, for closing remarks.

Thank you, everyone, for enjoying the fourth quarter conference call. Have a good week.

This concludes today's call. Thank you for attending. You may now disconnect.