Steve Swett - Integrated Corporate Relations, Inc. Fred Boehler - President and Chief Executive Officer Marc Smernoff - Executive Vice President and Chief Financial Officer

Greetings and welcome to Americold Realty Trust Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve Swett. Please go ahead.

Good afternoon. We would like to thank you for joining us today for Americold Realty Trust's Third Quarter 2018 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. On today's call, management's prepared remarks and answers to your questions 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. More information about these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures is contained in the supplemental information package available on our website. This afternoon's conference call is hosted by Americold's Chief Executive Officer, Fred Boehler, and Executive Vice President and Chief Financial Officer, Marc Smernoff. Management will make some prepared comments, after which we will open up the call to your questions. Now, I will turn the call over to Fred.

Thank you and welcome to our Third Quarter 2018 Earnings Conference Call. This afternoon, I will discuss progress against our strategy, key additions to our senior management team, and recent financing activities. I will then review industry fundamentals and certain key operating metrics. Marc will follow with a summary of our quarterly results and then review our balance sheet and capital markets activities. After our prepared remarks, we will open the call for your questions. Americold is the world's largest owner and operator of temperature-controlled warehouses and is the only publicly traded REIT focused solely on this business. Our size and scale, combined with our focus on operational excellence, create a meaningful differentiation over our peers and a competitive advantage for our customers. As of September 30th, our portfolio consisted of 156 mission-critical facilities which serve approximately 2,400 customers globally. Our 25 largest customers, including leading food producers, distributors, and retailers, account for approximately 62% of our global warehouse revenue. They each utilize multiple facilities across our network and have been with us, on average, for over 30 years. The third quarter of 2018 was extremely productive here at Americold. We continued to execute on our core strategy while taking key steps to enhance our management team and strengthen our balance sheet. We enhanced our senior leadership team with several key additions. Carlos Rodriguez has joined us in the role of Chief Operating Officer. In his role, Carlos will lead our global operations to maximize our platform efficiencies and drive growth. Carlos was most recently with Big Lots and has over 30 years of experience in supply chain management. Additionally, Jay Harron has joined us as Chief Investment Officer, responsible for acquisitions and strategic partnerships. Jay brings 20 years of experience in real estate, private equity, and investment banking. We…

Thank you, Fred, and good afternoon, everyone. For the third quarter of 2018, we reported total revenue of $402 million and total contribution, or NOI, of $101.5 million, which reflects a 3.2% increase and a 9.3% increase, respectively. Core EBITDA was $76.8 million for the third quarter of 2018, an increase of 7.6% year-over-year, driven by increased revenue, a more favorable customer mix, continued operating efficiency gains, as well as the contribution from our recently delivered facilities in Utah and Massachusetts. Our core EBITDA margin expanded by 30 basis points to 18.7% despite incurring the incremental SG&A related to being a public company. We reported net income of $24.5 million, compared to a net loss of $4.6 million for the same quarter of the prior year. Net income for the current quarter included a $3.7 million benefit related to refundable alternative minimum tax credits that are no longer subject to limitation under the Tax Cut and Jobs Act. We expect these credits to be non-recurring so we have excluded the benefit of them from our core FFO and AFFO results. Our third quarter core FFO was $43.9 million, or $0.30 per diluted share. Our third quarter AFFO was $41.4 million, or $0.28 per diluted share. As a reminder, the full definition and reconciliation of core EBITDA, core FFO, and AFFO to reported net income can be found in our supplemental. For the third quarter 2018, global warehouse segment revenues grew by 2.3% year-over-year to $297.2 million. Segment NOI grew 8.8% to $93.6 million. Global warehouse margin was 31.5% for the third quarter compared to 29.6% for the same quarter of the prior year. This represents a 190 basis point improvement, driven by the same factors discussed earlier. Now, turning to our same-store results in our global warehouse segment. We define…

Thanks, Marc. We are very pleased with our third quarter results, as we continue to execute on our business plan. Fundamentals for our industry remain positive and supportive of our strategy. We continue to leverage our scale, operating expertise, the Americold operating system, and the dedication and commitment of our team members to create value for our customers. Further, having delivered a dedicated build this quarter, progressed on our external growth, expanded our management team, and made significant enhancements to our balance sheet, we believe that we have laid the groundwork for further long-term growth and shareholder value creation. I'd like to thank our entire team for their continued hard work and achievements. Operator, this completes our prepared remarks. Please open the call for questions.

Ladies and gentlemen, we have reached the end of the question-and-answer session and I would like to turn the call back to management for closing remarks.

Thank you. We really appreciate everybody's attendance today. I know it was difficult timing butting up against Mary so I apologize for that. But we look forward to speaking to all of you here shortly and, certainly, next quarter. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.