[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents Americold Realty Trust's financial statements, management's discussion, and market risk disclosures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Americold's unaudited consolidated financial statements, including balance sheets, operations, equity, cash flows, and detailed notes - Americold Realty Trust, Inc. converted from a Maryland real estate investment trust to a Maryland corporation on May 25, 2022, but continues to operate as a REIT for U.S. federal income tax purposes[34](index=34&type=chunk) - The company formed a joint venture, Americold LATAM Holdings Ltd, on May 31, 2022, contributing its Chilean business and retaining a **15% equity interest**, resulting in a recognized loss of approximately **$4.1 million**[39](index=39&type=chunk) - A gain of **$3.4 million** was recognized during Q2 2022 from the extinguishment of New Markets Tax Credit agreements after their seven-year compliance period[40](index=40&type=chunk) - Impairment charges totaling **$6.6 million** were recorded for the nine months ended September 30, 2022, including **$3.2 million** for goodwill in the Third-party managed segment due to a strategic shift, **$2.2 million** for assets under construction, and **$1.2 million** for warehouse segment assets[41](index=41&type=chunk) - The company's business and financial results were negatively impacted by COVID-19 disruptions, labor availability and cost, and inflation, leading to lower occupancy and throughput volumes[44](index=44&type=chunk) - Out-of-cycle rate increases were initiated to address inflationary pressures[46](index=46&type=chunk) - On July 1, 2022, Americold acquired De Bruyn Cold Storage in Tasmania, Australia, for **$16.0 million**, allocated to the Warehouse segment[48](index=48&type=chunk) - The company refinanced its senior unsecured credit facility in August 2022, extending it to approximately **$2.0 billion** and updating the base interest rate to SOFR from LIBOR, incorporating a sustainability-linked pricing component[63](index=63&type=chunk) - Aggregate share-based compensation charges were **$22.1 million** for the nine months ended September 30, 2022, up from **$14.8 million** in the prior year[92](index=92&type=chunk) - As of September 30, 2022, the Company had **$676.8 million** of remaining unsatisfied performance obligations from non-cancellable customer contracts with an original expected duration exceeding one year[150](index=150&type=chunk) [1.1 Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=1.1%20Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets decreased to $8,001,904 thousand by September 30, 2022, while total equity declined to $3,822,591 thousand Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2022 | Dec 31, 2021 | Change | | :----- | :----------- | :----------- | :----- | | Total Assets | $8,001,904 | $8,216,197 | $(214,293) | | Total Liabilities | $4,179,313 | $4,187,121 | $(7,808) | | Total Equity | $3,822,591 | $4,029,076 | $(206,485) | [1.2 Condensed Consolidated Statements of Operations (Unaudited)](index=8&type=section&id=1.2%20Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) The company reported a net loss of $8,937 thousand for Q3 2022, a shift from prior year net income, despite a 6.9% revenue increase Statements of Operations Highlights (in thousands) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :-------------------------- | :-------------------------- | :----- | | Total Revenues | $757,780 | $708,808 | +6.9% | $2,193,231 | $1,998,310 | +9.8% | | Total Operating Expenses | $734,610 | $677,250 | +8.5% | $2,138,405 | $1,929,562 | +10.8% | | Operating Income | $23,170 | $31,558 | -26.6% | $54,826 | $68,748 | -20.3% | | Net (Loss) Income | $(8,937) | $5,308 | N/A | $(22,429) | $(22,327) | N/A | | Net (Loss) Income per Common Share - Basic | $(0.03) | $0.02 | N/A | $(0.08) | $ (0.09) | N/A | [1.3 Condensed Consolidated Statements of Comprehensive Loss (Unaudited)](index=9&type=section&id=1.3%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited)) Total comprehensive loss for Q3 2022 was $25,688 thousand, significantly higher due to increased unrealized foreign currency losses Statements of Comprehensive Loss Highlights (in thousands) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :-------------------------- | :-------------------------- | :----- | | Net (Loss) Income | $(8,937) | $5,308 | N/A | $(22,429) | $(22,327) | N/A | | Change in unrealized net loss on foreign currency | $(25,038) | $(9,485) | +163.9% | $(37,720) | $(13,141) | +187.0% | | Total Comprehensive Loss | $(25,688) | $(3,560) | +624.4% | $(50,248) | $(31,436) | +59.8% | [1.4 Condensed Consolidated Statements of Equity (Unaudited)](index=10&type=section&id=1.4%20Condensed%20Consolidated%20Statements%20of%20Equity%20(Unaudited)) Total equity decreased to $3,822,591 thousand by September 30, 2022, primarily due to net losses and distributions Statements of Equity Highlights (in thousands) | Metric | Dec 31, 2021 | Sep 30, 2022 | Change | | :-------------------- | :----------- | :----------- | :----- | | Total Equity | $4,029,076 | $3,822,591 | $(206,485) | | Net Loss (9 months) | $(17,407) | $(22,429) | N/A | | Distributions on common stock, restricted stock and OP units (9 months) | $(178,911) | $(179,074) | N/A | | Accumulated Other Comprehensive Income (Loss) | $4,522 | $(23,194) | $(27,716) | [1.5 Condensed Consolidated Statements of Cash Flows (Unaudited)](index=12&type=section&id=1.5%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flow increased by 11.3% to $182,883 thousand, while investing and financing cash flows significantly decreased Statements of Cash Flows Highlights (in thousands) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash provided by operating activities | $182,883 | $164,319 | +11.3% | | Net cash used in investing activities | $(288,008) | $(945,491) | -69.5% | | Net cash provided by financing activities | $74,473 | $315,269 | -76.4% | | Net decrease in cash, cash equivalents and restricted cash | $(30,652) | $(465,903) | -93.4% | [1.6 Notes to Condensed Consolidated Financial Statements (Unaudited)](index=15&type=section&id=1.6%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details accounting policies, significant transactions, financial instruments, and segment information, including joint ventures and impairment charges [1.6.1 General Information](index=15&type=section&id=1.6.1%20General%20Information) Americold is the world's largest publicly traded REIT for temperature-controlled warehouses, converting to a Maryland corporation in May 2022 - Americold Realty Trust, Inc. is the world's largest publicly traded REIT focused on the ownership, operation, and development of temperature-controlled warehouses[33](index=33&type=chunk) - On May 25, 2022, the Company converted from a Maryland real estate investment trust to a Maryland corporation, while continuing to operate as a REIT for U.S. federal income tax purposes[34](index=34&type=chunk) [1.6.2 Formation of Latin America Joint Venture](index=17&type=section&id=1.6.2%20Formation%20of%20Latin%20America%20Joint%20Venture) Americold formed the LATAM JV on May 31, 2022, contributing its Chilean business for a 15% stake and recognizing a $4.1 million loss - Americold formed a joint venture, Americold LATAM Holdings Ltd (LATAM JV), on May 31, 2022, with Cold LATAM Limited to grow its business in Latin America (excluding Brazil)[39](index=39&type=chunk) - Americold contributed its Chilean business to the LATAM JV and retained a **15% equity interest**, recognizing a loss of approximately **$4.1 million** upon deconsolidation[39](index=39&type=chunk) - The JV partner committed to invest approximately **$209.0 million** for an **85% equity interest** in the LATAM JV[39](index=39&type=chunk) [1.6.3 Extinguishment of New Market Tax Credit ("NMTC") Arrangement](index=17&type=section&id=1.6.3%20Extinguishment%20of%20New%20Market%20Tax%20Credit%20(%22NMTC%22)%20Arrangement) A $3.4 million gain was recognized in Q2 2022 from the extinguishment of New Markets Tax Credit agreements - A gain of **$3.4 million** was recognized in the second quarter of 2022 from the extinguishment of New Markets Tax Credit (NMTC) agreements[40](index=40&type=chunk) [1.6.4 Impairment of Indefinite and Long-Lived Assets](index=17&type=section&id=1.6.4%20Impairment%20of%20Indefinite%20and%20Long-Lived%20Assets) Americold recorded $6.6 million in impairment charges for the nine months ended September 30, 2022, including goodwill and assets under construction Impairment Charges (in millions) | Impairment Type | 9 Months Ended Sep 30, 2022 | | :-------------- | :-------------------------- | | Goodwill | $3.2 | | Assets under construction | $2.2 | | Buildings and improvements | $1.2 | | **Total Impairment Charges** | **$6.6** | - The goodwill impairment in the Third-party managed segment is due to a strategic shift focusing on the core warehouse portfolio and winding down business with a large customer[41](index=41&type=chunk) [1.6.5 Significant Risks and Uncertainties](index=18&type=section&id=1.6.5%20Significant%20Risks%20and%20Uncertainties) The company faces significant risks from COVID-19, labor shortages, inflation, and geopolitical conflicts, impacting operations and costs - COVID-19, labor availability, and inflation negatively impacted the food supply chain, customer production, and operating costs, leading to lower occupancy and throughput[44](index=44&type=chunk) - Americold initiated out-of-cycle rate increases in customer contracts during the second half of 2021 and Q3 2022 to address significant inflationary pressures on storage, services, and transportation costs[46](index=46&type=chunk) - Global supply chain volatility due to the Russia-Ukraine conflict could impact operations, particularly in Europe, though no material impact has been observed to date[47](index=47&type=chunk) [1.6.6 Business Combinations](index=18&type=section&id=1.6.6%20Business%20Combinations) Americold acquired De Bruyn Cold Storage in Australia for $16.0 million on July 1, 2022, allocating assets to the Warehouse segment - On July 1, 2022, Americold acquired De Bruyn Cold Storage in Tasmania, Australia, for **$16.0 million** (A$23.5 million)[48](index=48&type=chunk) Acquired Assets (in millions) | Acquired Asset (De Bruyn Cold Storage) | Amount | | :------------------------------------- | :----- | | Land | $1.0 | | Buildings and improvements | $8.6 | | Machinery and equipment | $3.4 | | Goodwill | $3.1 | [1.6.7 Acquisition, Litigation and Other, net](index=19&type=section&id=1.6.7%20Acquisition,%20Litigation%20and%20Other,%20net) Acquisition, litigation and other, net expenses decreased to $20.6 million for the nine months ended September 30, 2022, benefiting from a litigation settlement Acquisition, Litigation and Other, Net Expenses (in thousands) | Component | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :----------------------- | :-------------------------- | :-------------------------- | | Acquisition and integration related costs | $15,879 | $22,851 | | Litigation (gain) loss | $179 | $942 | | Severance costs | $5,060 | $2,850 | | Cyber incident related costs, net of insurance recoveries | $(785) | $3,539 | | **Total acquisition, litigation and other, net** | **$20,612** | **$31,011** | - A **$2.2 million** benefit was recognized during Q3 2022 due to a favorable litigation settlement[52](index=52&type=chunk) [1.6.8 Debt](index=20&type=section&id=1.6.8%20Debt) Total indebtedness increased to $2,973,315 thousand by September 30, 2022, with rising interest rates and a refinanced credit facility Debt Overview (in thousands) | Debt Type | Sep 30, 2022 | Dec 31, 2021 | Weighted-Average Effective Interest Rate (Sep 30, 2022) | | :----------------------- | :----------- | :----------- | :-------------------------------------- | | Senior Unsecured Notes | $1,685,150 | $1,802,750 | 3.33% | | Senior Unsecured Term Loans | $555,775 | $372,800 | 4.72% | | Senior Unsecured Revolving Credit Facility | $468,286 | $399,314 | 4.13% | | 2013 Mortgage Loans | $264,104 | $269,545 | 5.97% | | **Total principal amount of indebtedness** | **$2,973,315** | **$2,854,170** | | - On August 23, 2022, the company extended and upsized its senior unsecured credit facility from **$1.5 billion** to approximately **$2.0 billion**, updating the base interest rate to SOFR from LIBOR and incorporating a sustainability-linked pricing component[63](index=63&type=chunk) - The company was in compliance with all debt covenants as of September 30, 2022[66](index=66&type=chunk) [1.6.9 Derivative Financial Instruments](index=23&type=section&id=1.6.9%20Derivative%20Financial%20Instruments) Americold uses derivatives to manage interest rate and foreign currency risks, with derivative assets increasing to $27,928 thousand by September 30, 2022 - The company entered into several interest rate swap agreements to hedge an aggregate of **$200 million USD** and **C$250 million** variable interest rate debt, following an increase in variable interest rate exposure from the 2022 Senior Unsecured Credit Facility refinancing[74](index=74&type=chunk) - Cross-currency swaps are used to manage foreign currency exchange rate risk on intercompany loans, hedging **$153.5 million AUD** and **$37.5 million NZD** balances[75](index=75&type=chunk) Derivative Financial Instruments (in thousands) | Derivative Type | Sep 30, 2022 (Assets) | Dec 31, 2021 (Assets) | | :----------------------------- | :-------------------- | :-------------------- | | Foreign exchange contracts | $17,099 | $2,015 | | Interest rate contracts | $10,829 | $0 | | **Total derivatives** | **$27,928** | **$2,015** | [1.6.10 Fair Value Measurements](index=26&type=section&id=1.6.10%20Fair%20Value%20Measurements) Americold categorizes fair value measurements into Level 1, Level 2, and Level 3 inputs, primarily using Level 2 for derivatives and a combination for debt instruments - Derivative instruments (interest rate swaps, cross-currency swaps, foreign currency forward contracts) are valued using **Level 2 inputs**[85](index=85&type=chunk) - Mortgage notes, senior unsecured notes, and term loans are valued using a combination of **Level 2** (e.g., loan spreads, interest rates) and **Level 3** (e.g., future cash flows) inputs[84](index=84&type=chunk) Fair Value Measurements (in thousands) | Asset/Liability | Fair Value Hierarchy | Sep 30, 2022 | Dec 31, 2021 | | :----------------------------- | :------------------- | :----------- | :----------- | | Interest rate swap assets | Level 2 | $10,829 | $0 | | Cross currency swap assets | Level 2 | $17,099 | $2,015 | | Total Mortgage notes, senior unsecured notes and term loans | Level 3 | $2,705,416 | $2,939,237 | [1.6.11 Stock-Based Compensation](index=27&type=section&id=1.6.11%20Stock-Based%20Compensation) Aggregate share-based compensation charges increased to $22.1 million for the nine months ended September 30, 2022, with $29.2 million unrecognized expense remaining - Aggregate share-based compensation charges were **$22.1 million** for the nine months ended September 30, 2022, compared to **$14.8 million** for the same period in 2021[92](index=92&type=chunk) - As of September 30, 2022, **$29.2 million** of unrecognized share-based compensation expense remains, to be recognized over a weighted-average period of **1.8 years**[92](index=92&type=chunk) Restricted Stock Units Granted (9 Months Ended Sep 30) | Restricted Stock Units Granted | 2022 | 2021 | | :----------------------------------------------------- | :--- | :--- | | Directors | 4,810 | 6,616 | | Associates | 529,883 | 321,150 | OP Units Granted (9 Months Ended Sep 30) | OP Units Granted | 2022 | 2021 | | :--------------------------------------- | :--- | :--- | | Directors | 35,593 | 17,863 | | Associates | 342,980 | 258,479 | [1.6.12 Income Taxes](index=31&type=section&id=1.6.12%20Income%20Taxes) Americold reported a $16.1 million income tax benefit for the nine months ended September 30, 2022, driven by operating losses and a deferred tax benefit Income Tax Benefit (Expense) (in thousands) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Income Tax Benefit (Expense) | $16,145 | $(7,957) | +$24,102 | - The income tax benefit for the nine months ended September 30, 2022, was primarily due to increased operating losses from U.S. and foreign operations and a **$6.5 million** deferred tax benefit from the deconsolidation of Chilean operations[302](index=302&type=chunk) [1.6.13 Commitments and Contingencies](index=31&type=section&id=1.6.13%20Commitments%20and%20Contingencies) The company is involved in legal proceedings and environmental matters, with management believing outcomes will not materially impact financial statements - Americold is involved in ongoing legal proceedings, including the Kansas Breach of Settlement Agreement Litigation and Preferred Freezer Services, LLC Litigation, but management believes the ultimate outcome will not have a material adverse impact on its financial statements[123](index=123&type=chunk) - The company records accruals for environmental matters and OSHA compliance when liabilities are probable and reasonably estimable, and believes it is in compliance with applicable regulations in all material respects[125](index=125&type=chunk)[126](index=126&type=chunk) [1.6.14 Accumulated Other Comprehensive (Loss) Income](index=34&type=section&id=1.6.14%20Accumulated%20Other%20Comprehensive%20(Loss)%20Income) AOCI showed a total change in other comprehensive loss of $27,716 thousand for the nine months ended September 30, 2022, driven by translation adjustments Accumulated Other Comprehensive (Loss) Income (in thousands) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | | Cumulative translation adjustment | $(187,853) | $(13,141) | | Derecognition of cumulative foreign currency translation upon deconsolidation of entity contributed to a joint venture | $4,970 | $0 | | Total change in other comprehensive loss | $(27,716) | $(9,098) | [1.6.15 Segment Information](index=34&type=section&id=1.6.15%20Segment%20Information) Americold operates in Warehouse, Third-party managed, and Transportation segments, with performance evaluated by revenues and segment contribution (NOI) - Americold's principal operations are organized into three reportable segments: Warehouse, Third-party managed, and Transportation[129](index=129&type=chunk) - Segment performance is evaluated using revenues and segment contribution (NOI), calculated as earnings before interest expense, taxes, depreciation and amortization, and excluding selling, general and administrative expense, acquisition, litigation and other, net, impairment, and gain/loss on sale of real estate[131](index=131&type=chunk) Segment Revenues (in thousands) | Segment Revenues | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Warehouse | $598,977 | $542,047 | $1,704,281 | $1,531,232 | | Third-party managed | $82,436 | $87,782 | $251,782 | $233,027 | | Transportation | $76,367 | $78,979 | $237,168 | $234,051 | | **Total Revenues** | **$757,780** | **$708,808** | **$2,193,231** | **$1,998,310** | Segment Contribution (NOI) (in thousands) | Segment Contribution (NOI) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Warehouse | $166,662 | $144,992 | $463,905 | $435,552 | | Third-party managed | $3,660 | $4,551 | $10,882 | $10,626 | | Transportation | $10,836 | $6,251 | $32,950 | $22,204 | | **Total Segment Contribution** | **$181,158** | **$155,794** | **$507,737** | **$468,382** | [1.6.16 Loss (Income) per Common Share](index=37&type=section&id=1.6.16%20Loss%20(Income)%20per%20Common%20Share) Basic and diluted net loss per common share for Q3 2022 was $(0.03), with potential common shares being antidilutive due to net losses Loss (Income) per Common Share | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net (Loss) Income per Common Share - Basic | $(0.03) | $0.02 | $(0.08) | $(0.09) | | Net (Loss) Income per Common Share - Diluted | $(0.03) | $0.02 | $(0.08) | $(0.09) | - Potential common shares from employee stock options, restricted stock units, OP units, and equity forward contracts were antidilutive for the three and nine months ended September 30, 2022 and 2021, due to the company reporting a net loss[141](index=141&type=chunk)[142](index=142&type=chunk) [1.6.17 Revenue from Contracts with Customers](index=38&type=section&id=1.6.17%20Revenue%20from%20Contracts%20with%20Customers) Total revenues from contracts with customers for Q3 2022 were $757.8 million, with $676.8 million in remaining performance obligations Revenue from Contracts with Customers (in thousands) | Revenue Source | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Warehouse rent and storage | $249,147 | $217,480 | $699,675 | $620,794 | | Warehouse services | $338,729 | $316,813 | $971,925 | $888,445 | | Third-party managed | $82,436 | $87,782 | $251,782 | $233,027 | | Transportation | $76,367 | $78,979 | $237,168 | $234,051 | | Lease revenue | $11,101 | $8,180 | $32,681 | $21,993 | | **Total revenues from contracts with all customers** | **$757,780** | **$708,808** | **$2,193,231** | **$1,998,310** | - As of September 30, 2022, the company had **$676.8 million** of remaining unsatisfied performance obligations from non-cancellable contracts with an original expected duration exceeding one year, with **92%** expected to be recognized over a weighted average period of **14.5 years** through 2038[150](index=150&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Americold's financial condition and operational results, highlighting macroeconomic impacts, strategic initiatives, and segment performance [2.1 Management's Overview](index=41&type=section&id=2.1%20Management's%20Overview) Americold is the world's largest publicly traded REIT for temperature-controlled warehouses, operating a global network and expanding through a new LATAM JV - Americold operates a global network of **249** temperature-controlled warehouses, including **202** in North America, **27** in Europe, **18** in Asia-Pacific, and **two** in South America, as of September 30, 2022[157](index=157&type=chunk) - The company's primary revenue sources are rent, storage, and value-added warehouse services (e.g., blast freezing, case-picking, e-commerce fulfillment)[158](index=158&type=chunk)[160](index=160&type=chunk) - Key operating costs for the warehouse segment include labor (wages, benefits) and power, with fluctuations in power prices significantly impacting financial results[161](index=161&type=chunk) - A Latin America joint venture (LATAM JV) was formed in Q2 2022 to grow market presence in the region (excluding Brazil)[157](index=157&type=chunk) [2.2 Key Factors Affecting Our Business and Financial Results](index=44&type=section&id=2.2%20Key%20Factors%20Affecting%20Our%20Business%20and%20Financial%20Results) Americold's results are impacted by COVID-19, labor shortages, inflation, acquisitions, and foreign currency fluctuations, with rate increases implemented - COVID-19, labor availability, and inflation negatively impacted food supply chains, customer production, and operating costs, resulting in lower occupancy and throughput[170](index=170&type=chunk) - Americold initiated out-of-cycle rate increases in customer contracts during the second half of 2021 and Q3 2022 to address inflationary pressures, but cannot assure full offset[172](index=172&type=chunk) - The acquisition of De Bruyn Cold Storage in Tasmania, Australia, for **$16.0 million** was completed on July 1, 2022, and a LATAM JV was formed on June 2, 2022, to expand in Latin America[175](index=175&type=chunk)[177](index=177&type=chunk) - Physical occupancy rates are typically lowest in May-June and peak between mid-September and early December due to harvests and holiday inventory build-up, while Q3 generally sees increased power expenses due to higher external temperatures[179](index=179&type=chunk) - Foreign currency translation had an unfavorable impact on revenues and expenses due to the strengthening of the U.S. dollar against foreign currencies[181](index=181&type=chunk)[214](index=214&type=chunk) [2.3 How We Assess the Performance of Our Business](index=48&type=section&id=2.3%20How%20We%20Assess%20the%20Performance%20of%20Our%20Business) Americold assesses performance using Segment Contribution (NOI), Same Store Analysis, and Constant Currency Metrics to evaluate underlying business trends - Segment Contribution (NOI) is calculated as a segment's revenues less its cost of operations, excluding depreciation, amortization, impairment, corporate SG&A, and acquisition/litigation/other net expenses[195](index=195&type=chunk) - Same Store Analysis includes properties owned or leased for the entirety of two comparable periods with at least twelve months of normalized operations, adjusted for acquisitions, sales, and developments, and is presented on a constant currency basis[198](index=198&type=chunk)[202](index=202&type=chunk) - Constant Currency Metrics translate current period results into U.S. dollars using prior period average foreign exchange rates to assess underlying business performance, excluding foreign currency fluctuations[208](index=208&type=chunk) Warehouse Count | Warehouse Count | Sep 30, 2022 | | :-------------- | :----------- | | Total Warehouses | 249 | | Same Store Warehouses | 212 | | Non-Same Store Warehouses | 28 | | Third-Party Managed Warehouses | 9 | [2.4 Results of Operations](index=51&type=section&id=2.4%20Results%20of%20Operations) This section details Americold's financial performance for the three and nine months ended September 30, 2022, across its operating segments [2.4.1 Comparison of Results for the Three Months Ended September 30, 2022 and 2021](index=51&type=section&id=2.4.1%20Comparison%20of%20Results%20for%20the%20Three%20Months%20Ended%20September%2030,%202022%20and%202021) Total revenues increased by 6.9% to $757.8 million for Q3 2022, but operating income decreased by 26.6%, leading to a net loss [2.4.1.1 Warehouse Segment](index=51&type=section&id=2.4.1.1%20Warehouse%20Segment) Warehouse segment revenues increased by 10.5% to $599.0 million for Q3 2022, driven by pricing and improved occupancy, with NOI rising by 14.9% Warehouse Segment Performance (in thousands) | Metric | 3 Months Ended Sep 30, 2022 (Actual) | 3 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 3 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Total Warehouse Segment Revenues | $598,977 | $542,047 | +10.5% | $613,571 | +13.2% | | Total Warehouse Segment Cost of Operations | $432,315 | $397,055 | +8.9% | $443,734 | +11.8% | | Warehouse Segment Contribution (NOI) | $166,662 | $144,992 | +14.9% | $169,837 | +17.1% | | Total Warehouse Segment Margin | 27.8% | 26.7% | +108 bps | 27.7% | +93 bps | Same Store Operating Metrics | Same Store Operating Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Economic occupancy percentage | 80.7% | 76.3% | +437 bps | | Average occupied economic pallets (in thousands) | 3,910 | 3,699 | +5.7% | | Throughput pallets (in thousands) | 9,146 | 9,263 | (1.3)% | - Same store rent and storage revenues per economic occupied pallet increased **5.9%** (**8.1% constant currency**) due to pricing initiatives, contractual rate escalations, and business mix[229](index=229&type=chunk) [2.4.1.2 Third-Party Managed Segment](index=57&type=section&id=2.4.1.2%20Third-Party%20Managed%20Segment) Third-party managed revenues decreased by 6.1% to $82.4 million for Q3 2022, leading to a 19.6% decline in segment contribution (NOI) Third-Party Managed Segment Performance (in thousands) | Metric | 3 Months Ended Sep 30, 2022 (Actual) | 3 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 3 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Third-party managed revenues | $82,436 | $87,782 | (6.1)% | $82,870 | (5.6)% | | Third-party managed cost of operations | $78,776 | $83,231 | (5.4)% | $79,133 | (4.9)% | | Third-party managed segment contribution | $3,660 | $4,551 | (19.6)% | $3,737 | (17.9)% | | Third-party managed margin | 4.4% | 5.2% | -74 bps | 4.5% | -67 bps | - The decrease in revenues and contribution was driven by lower business volumes in domestic managed operations and a reduction in certain direct pass-through costs[234](index=234&type=chunk)[235](index=235&type=chunk) [2.4.1.3 Transportation Segment](index=57&type=section&id=2.4.1.3%20Transportation%20Segment) Transportation revenues decreased by 3.3% to $76.4 million for Q3 2022, but segment contribution (NOI) significantly increased by 73.3% due to rate increases Transportation Segment Performance (in thousands) | Metric | 3 Months Ended Sep 30, 2022 (Actual) | 3 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 3 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Transportation revenues | $76,367 | $78,979 | (3.3)% | $82,174 | +4.0% | | Transportation cost of operations | $65,532 | $72,728 | (9.9)% | $71,486 | (1.7)% | | Transportation segment contribution (NOI) | $10,835 | $6,251 | +73.3% | $10,688 | +71.0% | | Transportation margin | 14.2% | 7.9% | +627 bps | 13.0% | +509 bps | - The significant increase in transportation segment contribution and margin was primarily due to rate increases implemented in 2022 and the exit of certain less profitable market operations[242](index=242&type=chunk) [2.4.1.4 Other Consolidated Operating Expenses](index=59&type=section&id=2.4.1.4%20Other%20Consolidated%20Operating%20Expenses) Depreciation and amortization increased by 18.6% to $83.7 million, while SG&A rose by 25.4% for Q3 2022, alongside impairment charges and real estate loss Other Consolidated Operating Expenses (in thousands) | Expense | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | | :--------------------- | :-------------------------- | :-------------------------- | :----- | | Depreciation and amortization | $83,669 | $70,569 | +18.6% | | Selling, general and administrative | $57,119 | $45,545 | +25.4% | | Acquisition, litigation and other, net | $4,874 | $6,338 | -23.1% | | Impairment of indefinite and long-lived assets | $6,616 | $1,784 | +270.9% | | Loss from sale of real estate | $5,710 | $0 | N/A | - The increase in selling, general and administrative expenses was driven by the resumption of performance-based compensation, higher third-party legal and professional fees, and increased travel costs[244](index=244&type=chunk) - Impairment charges included **$3.2 million** for goodwill in the Third-party managed segment due to a strategic shift[246](index=246&type=chunk) [2.4.1.5 Other Expense and Income](index=60&type=section&id=2.4.1.5%20Other%20Expense%20and%20Income) Interest expense increased by 20.2% to $30.4 million for Q3 2022 due to rising rates, with other net expense significantly increasing from foreign currency loss Other Expense and Income (in thousands) | Expense/Income | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | | :---------------------------- | :-------------------------- | :-------------------------- | :----- | | Interest expense | $(30,402) | $(25,303) | +20.2% | | Loss on debt extinguishment, modifications and termination of derivative instruments | $(1,040) | $(627) | +65.9% | | Other, net | $(2,593) | $(57) | N/A | | Loss from investments in partially owned entities | $(1,440) | $(489) | +194.5% | - The effective interest rate on outstanding debt increased from **3.09%** in Q3 2021 to **3.95%** in Q3 2022, primarily due to rising interest rates on the Senior Unsecured Credit Facility[250](index=250&type=chunk) - Other, net expense increased due to a **$2.1 million** increase in foreign currency exchange loss and a **$1.4 million** increase in loss on asset disposals[252](index=252&type=chunk) [2.4.1.6 Income Tax Benefit (Expense)](index=61&type=section&id=2.4.1.6%20Income%20Tax%20Benefit%20(Expense)) Americold reported an income tax benefit of $3.4 million for Q3 2022, a $3.2 million increase, primarily due to losses from foreign operations Income Tax Benefit (Expense) (in thousands) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Income Tax Benefit (Expense) | $3,368 | $226 | +$3,142 | - The increase in income tax benefit was primarily due to losses generated by foreign operations[255](index=255&type=chunk) [2.4.2 Comparison of Results for the Nine Months Ended September 30, 2022 and 2021](index=61&type=section&id=2.4.2%20Comparison%20of%20Results%20for%20the%20Nine%20Months%20Ended%20September%2030,%202022%20and%202021) Total revenues increased by 9.8% to $2,193.2 million for the nine months ended September 30, 2022, but operating income decreased by 20.3% [2.4.2.1 Warehouse Segment](index=61&type=section&id=2.4.2.1%20Warehouse%20Segment) Warehouse segment revenues increased by 11.3% to $1.70 billion for the nine months ended September 30, 2022, driven by pricing and occupancy, with NOI rising by 6.5% Warehouse Segment Performance (in thousands) | Metric | 9 Months Ended Sep 30, 2022 (Actual) | 9 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 9 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Total Warehouse Segment Revenues | $1,704,281 | $1,531,232 | +11.3% | $1,738,745 | +13.6% | | Total Warehouse Segment Cost of Operations | $1,240,376 | $1,095,680 | +13.2% | $1,267,341 | +15.7% | | Warehouse Segment Contribution (NOI) | $463,905 | $435,552 | +6.5% | $471,404 | +8.2% | | Total Warehouse Segment Margin | 27.2% | 28.4% | -122 bps | 27.1% | -133 bps | Same Store Operating Metrics | Same Store Operating Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Economic occupancy percentage | 78.7% | 76.2% | +249 bps | | Average occupied economic pallets (in thousands) | 3,821 | 3,694 | +3.4% | | Throughput pallets (in thousands) | 26,999 | 27,304 | (1.1)% | - Same store rent and storage revenues per economic occupied pallet increased **5.0%** (**6.8% constant currency**) due to pricing initiatives and contractual rate escalations[274](index=274&type=chunk) - Warehouse services contribution (NOI) decreased by **50.7%** to **$22.3 million**, and its margin declined by **280 bps** to **2.3%**, primarily due to labor inefficiencies and inflationary pressure[257](index=257&type=chunk) [2.4.2.2 Third-Party Managed Segment](index=66&type=section&id=2.4.2.2%20Third-Party%20Managed%20Segment) Third-party managed revenues increased by 8.0% to $251.8 million for the nine months ended September 30, 2022, with segment contribution (NOI) slightly up by 2.4% Third-Party Managed Segment Performance (in thousands) | Metric | 9 Months Ended Sep 30, 2022 (Actual) | 9 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 9 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Third-party managed revenues | $251,782 | $233,027 | +8.0% | $252,987 | +8.6% | | Third-party managed cost of operations | $240,900 | $222,401 | +8.3% | $241,880 | +8.8% | | Third-party managed segment contribution | $10,882 | $10,626 | +2.4% | $11,107 | +4.5% | | Third-party managed margin | 4.3% | 4.6% | -24 bps | 4.4% | -17 bps | - The increase in revenues was a result of higher business volume in domestic managed operations and higher pass-through costs, primarily labor and related costs due to inflation[279](index=279&type=chunk) [2.4.2.3 Transportation Segment](index=68&type=section&id=2.4.2.3%20Transportation%20Segment) Transportation revenues increased by 1.3% to $237.2 million for the nine months ended September 30, 2022, with segment contribution (NOI) significantly up by 48.4% Transportation Segment Performance (in thousands) | Metric | 9 Months Ended Sep 30, 2022 (Actual) | 9 Months Ended Sep 30, 2021 (Actual) | Change (Actual) | 9 Months Ended Sep 30, 2022 (Constant Currency) | Change (Constant Currency) | | :-------------------- | :----------------------------------- | :----------------------------------- | :-------------- | :---------------------------------------------- | :------------------------- | | Transportation revenues | $237,168 | $234,051 | +1.3% | $249,920 | +6.8% | | Total transportation cost of operations | $204,218 | $211,847 | (3.6)% | $216,598 | +2.2% | | Transportation segment contribution (NOI) | $32,950 | $22,204 | +48.4% | $33,322 | +50.1% | | Transportation margin | 13.9% | 9.5% | +441 bps | 13.3% | +385 bps | - The significant increase in transportation segment contribution and margin was primarily due to rate increases implemented during 2022[287](index=287&type=chunk) [2.4.2.4 Other Consolidated Operating Expenses](index=68&type=section&id=2.4.2.4%20Other%20Consolidated%20Operating%20Expenses) Depreciation and amortization increased by 7.2% to $249.0 million, while SG&A rose by 28.5% for the nine months ended September 30, 2022 Other Consolidated Operating Expenses (in thousands) | Expense | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :--------------------- | :-------------------------- | :-------------------------- | :----- | | Depreciation and amortization | $248,979 | $232,239 | +7.2% | | Selling, general and administrative | $170,994 | $133,072 | +28.5% | | Acquisition, litigation and other, net | $20,612 | $31,011 | -33.6% | | Impairment of indefinite and long-lived assets | $6,616 | $3,312 | +99.7% | | Loss from sale of real estate | $5,710 | $0 | N/A | - The increase in selling, general and administrative expenses was driven by the resumption of performance-based compensation, higher third-party legal and professional fees, and increased travel costs[290](index=290&type=chunk) - Impairment charges included **$3.2 million** for goodwill in the Third-party managed segment due to a strategic shift[292](index=292&type=chunk) [2.4.2.5 Other Expense and Income](index=70&type=section&id=2.4.2.5%20Other%20Expense%20and%20Income) Interest expense increased by 6.3% to $82.7 million for the nine months ended September 30, 2022, with other net expense increasing due to deconsolidation loss Other Expense and Income (in thousands) | Expense/Income | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :---------------------------- | :-------------------------- | :-------------------------- | :----- | | Interest expense | $(82,720) | $(77,838) | +6.3% | | Loss on debt extinguishment, modifications and termination of derivative instruments | $(2,284) | $(5,051) | -54.8% | | Other, net | $(1,197) | $1,021 | N/A | | Loss from investments in partially owned entities | $(7,199) | $(1,250) | N/A | - Other, net expense increased due to a **$4.1 million** loss from the deconsolidation of Chilean operations upon contribution to the LATAM JV and a **$3.1 million** increase in foreign currency exchange loss, partially offset by a **$3.4 million** gain from the dissolution of NMTC entities[299](index=299&type=chunk) - Loss from investments in partially owned entities increased by **$5.9 million** due to higher interest expense incurred by joint ventures given rising interest rates[300](index=300&type=chunk) [2.4.2.6 Income Tax Benefit (Expense)](index=71&type=section&id=2.4.2.6%20Income%20Tax%20Benefit%20(Expense)) Americold reported a $16.1 million income tax benefit for the nine months ended September 30, 2022, driven by operating losses and a deferred tax benefit Income Tax Benefit (Expense) (in thousands) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Income Tax Benefit (Expense) | $16,145 | $(7,957) | +$24,102 | - The income tax benefit was primarily due to a **$13.8 million** increase in deferred tax benefit from higher operating losses and a **$6.5 million** deferred tax benefit from the deconsolidation of Chilean operations[302](index=302&type=chunk) [2.5 Non-GAAP Financial Measures](index=72&type=section&id=2.5%20Non-GAAP%20Financial%20Measures) Americold uses non-GAAP measures like FFO, Core FFO, Adjusted FFO, EBITDAre, and Core EBITDA to evaluate operating performance and funding capacity - FFO, Core FFO, Adjusted FFO, EBITDAre, and Core EBITDA are used as supplemental performance measures to evaluate operating performance and ability to fund distributions[304](index=304&type=chunk)[305](index=305&type=chunk)[309](index=309&type=chunk) Funds from Operations (FFO) (in thousands) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | NAREIT Funds from operations applicable to common shareholders | $55,034 | $54,211 | $147,926 | $126,330 | | Core FFO applicable to common shareholders | $67,091 | $61,476 | $178,816 | $162,642 | | Adjusted FFO applicable to common shareholders | $79,333 | $69,595 | $222,062 | $217,259 | EBITDAre and Core EBITDA (in thousands) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | NAREIT EBITDAre | $110,859 | $102,808 | $311,631 | $299,995 | | Core EBITDA | $131,857 | $114,661 | $362,945 | $350,789 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Americold's exposure to market risks, primarily focusing on interest rate risk and foreign currency risk management [3.1 Interest Rate Risk](index=83&type=section&id=3.1%20Interest%20Rate%20Risk) Americold manages interest rate risk on its variable-rate debt using swaps, with a 100 bps increase impacting annual interest expense by $6.4 million - As of September 30, 2022, Americold had **$375.0 million USD** and **$250 million CAD** of outstanding variable-rate debt[356](index=356&type=chunk) - Interest rate swaps effectively fix the floating rates on **$200 million USD** and **$250 million CAD** of the term loan, leaving **$175 million USD** variable-rate debt[356](index=356&type=chunk) - A **100 basis point** increase in market interest rates would result in an approximate **$6.4 million** increase in annual interest expense for the variable-rate debt[356](index=356&type=chunk) [3.2 Foreign Currency Risk](index=83&type=section&id=3.2%20Foreign%20Currency%20Risk) Americold's foreign currency risk exposure at September 30, 2022, remained consistent with prior disclosures in its 2021 Annual Report - Foreign currency risk exposure at September 30, 2022, was not materially different from what was disclosed in the 2021 Annual Report on Form 10-K[357](index=357&type=chunk) [Item 4. Controls and Procedures](index=76&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes in internal control [4.1 Evaluation of Controls and Procedures](index=83&type=section&id=4.1%20Evaluation%20of%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2022 - The company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of September 30, 2022[358](index=358&type=chunk) [4.2 Changes in Internal Control over Financial Reporting](index=84&type=section&id=4.2%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting were identified during the quarter ended September 30, 2022 - No material changes in internal control over financial reporting were identified during the quarter ended September 30, 2022[362](index=362&type=chunk) [PART II - OTHER INFORMATION](index=78&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other information, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) No material litigation or legal proceedings are currently ongoing that would significantly impact the company's financial condition or operations - No material litigation or legal proceedings are currently ongoing that would have a material impact on the company's business, financial condition, liquidity, results of operations, and prospects, other than those disclosed in Note 9[364](index=364&type=chunk) [Item 1A. Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) Investors should consider the risk factors detailed in the 2021 Annual Report on Form 10-K and the Q1 2022 Quarterly Report - Investors should consider the risk factors identified in Item 1A of the 2021 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022[366](index=366&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the reporting period - None[367](index=367&type=chunk) [Item 3. Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - None[368](index=368&type=chunk) [Item 4. Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable for the reporting period - None[369](index=369&type=chunk) [Item 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No other information is reported in this item for the period - None[370](index=370&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including various agreements and certifications - The report includes exhibits such as waiver and release forms, offer letters, credit agreements, CEO/CFO certifications (Sarbanes-Oxley Act), and XBRL interactive data files[372](index=372&type=chunk) [SIGNATURES](index=80&type=section&id=SIGNATURES) This section contains the official signatures for the report [SIGNATURES](index=87&type=section&id=SIGNATURES) The report is duly signed on behalf of Americold Realty Trust, Inc. by Marc J. Smernoff, Chief Financial Officer and Executive Vice President, on November 4, 2022 - The report was signed by Marc J. Smernoff, Chief Financial Officer and Executive Vice President, on November 4, 2022[376](index=376&type=chunk)

Financial Data and Key Metrics Changes - The company reported total revenue of $730 million for Q2 2022, reflecting an 11% year-over-year increase, with total NOI at $168 million, an 8% increase [43] - AFFO per share was $0.27, compared to $0.28 in the prior year quarter [45] - Core EBITDA was $120 million, a 1.6% year-over-year increase, with a core EBITDA margin decrease of 160 basis points to 16.5% [45] Business Line Data and Key Metrics Changes - Global Warehouse segment revenue was $564 million, a 12% increase year-over-year, driven by pricing initiatives and economic occupancy improvement [46] - Same-store Global Warehouse segment revenue increased by 5.9% year-over-year, with economic occupancy at 78.1%, up 288 basis points from the previous year [50] - Same-store warehouse services revenue increased by 3.9% year-over-year, with a 7.9% increase in revenue per throughput pallet [53] Market Data and Key Metrics Changes - Economic occupancy improvement was noted, with a significant increase in physical and economic occupancy due to increased production by food manufacturers and changes in consumer buying behavior [15][16] - The company experienced inflationary pressures primarily in power and warehouse supply costs, impacting overall costs and margins [18][19] Company Strategy and Development Direction - The company is focused on repricing its Warehouse business to offset inflationary pressures, with a commitment to cover all known inflation incurred through Q1 [8] - A new joint venture in Latin America was formed, focusing on high-growth food production, with a total equity commitment of just under $300 million [20][21] - The company aims to differentiate its platform by providing best-in-class customer service and optimizing labor management to reduce turnover rates [10][13] Management Comments on Operating Environment and Future Outlook - Management indicated that full recovery in the labor market is not expected this year, with improvements seen as a trickle rather than a constant flow [68] - The company anticipates continued inflationary pressures and a potential decline in throughput volumes due to changing consumer habits [26][27] - Guidance for AFFO per share remains in the range of $1 to $1.10, with expectations for same-store revenue growth to exceed previous guidance [25][58] Other Important Information - The company reported a total debt outstanding of $3.2 billion, with total liquidity of $597 million [56] - The company is maintaining its focus on ESG initiatives, having submitted to the Carbon Disclosure Project and GRESB for 2022 [29] Q&A Session Summary Question: Concerns about revenue guidance and challenges in the second half of the year - Management noted that pricing initiatives ramped up late in Q3, making year-over-year comparisons tougher [65] Question: Trajectory of recovery and stabilization for the business - Management indicated that full recovery is not expected this year, with labor improvements being gradual [68] Question: Impact of inflation on consumer habits - Management acknowledged that inflation is affecting consumer spending, leading to smaller basket sizes and less pantry stocking [71] Question: Clarification on guidance and potential disconnect with previous year's AFFO - Management explained that higher interest expenses and currency translation impacts are contributing to the lower AFFO guidance [74] Question: Ability to negotiate higher prices with customers due to rising costs - Management confirmed that they can negotiate price increases as needed, having done so multiple times already [77] Question: Impact of rising interest rates on guidance - Management indicated that a 100-basis-point increase in interest rates would result in approximately $10 million of incremental cost [85]

Warehouse Operations - As of June 30, 2022, the company operated 249 temperature-controlled warehouses, encompassing approximately 1.5 billion cubic feet, with 202 in North America, 27 in Europe, 18 in Asia-Pacific, and 2 in South America[143] - The total number of warehouses as of June 30, 2022, was 249, with 213 classified as same-store warehouses, indicating a stable operational base[187] - The average economic occupancy of warehouses is a key performance indicator, with a focus on transitioning customers to contracts with fixed storage commitments to mitigate seasonal fluctuations[175] - Economic occupancy at same stores increased to 78.1% for the three months ended June 30, 2022, up 288 basis points from 75.3% in the prior year[212] - The company had 213 same store sites for the three months ended June 30, 2022[200] - The same store pool consisted of 213 same stores for the six months ended June 30, 2022[245] - Economic occupancy percentage for same store sites improved to 77.8%, up from 76.3% in 2021[252] Financial Performance - The company reported revenues of $153.2 million for the six months ended June 30, 2022, compared to $130.0 million for the same period in 2021, reflecting an increase of 17.9%[174] - For the three months ended June 30, 2022, revenues from a significant customer were $75.2 million, up from $64.1 million in the same period of 2021, representing a growth of 17.3%[174] - Warehouse segment revenues for Q2 2022 were $564.4 million, a 12.0% increase from $503.7 million in Q2 2021, and a 14.4% increase on a constant currency basis to $576.5 million[195] - Total warehouse segment revenues for the three months ended June 30, 2022, were $564,379,000, representing a 12.0% increase compared to $503,734,000 in the same period of 2021[206] - Total warehouse segment revenues for six months ended June 2022 were $1,105,304, an increase of 11.7% compared to $989,185 in 2021[250] - Same store total revenues reached $978,610, a 5.2% increase from $930,160 in 2021[248] - Third-party managed revenues were $169.3 million for the six months ended June 30, 2022, an increase of $24.1 million, or 16.6%, compared to $145.2 million for the same period in 2021[261] Cost and Expenses - The cost of operations for the warehouse segment increased to $413.4 million in Q2 2022, up 15.0% from $359.4 million in Q2 2021, with a 17.7% increase on a constant currency basis to $422.8 million[198] - Total warehouse cost of operations for the same period was $413,394,000, up 15.0% from $359,355,000 in the prior year[206] - Warehouse segment cost of operations was $808.1 million for the six months ended June 30, 2022, an increase of $109.4 million, or 15.7%, compared to the same period in 2021[243] - Same store cost of operations totaled $696,558, an 8.3% increase from $643,453 in 2021[248] - Labor costs increased by $55.9 million, reflecting inflationary pressures and labor inefficiencies[243] - Corporate-level selling, general and administrative expenses increased to $56.3 million, up by $13.8 million or 32.5% from $42.5 million in the prior year[228] Joint Ventures and Market Presence - The company formed a joint venture, Americold LATAM Holdings Ltd, with a partner committing approximately $209.0 million for 85% equity, while the company retained 15%[163] - The company holds three minority interests in South American joint ventures, enhancing its market presence in the region[143] - The company has exited less strategic markets and business lines, including the sale of certain warehouse assets and the exit of the China joint venture, to streamline operations and reduce costs[171] Inflation and Economic Factors - Inflation has significantly impacted the cost of services, prompting the company to initiate out-of-cycle rate increases in customer contracts[158] - Labor availability continues to be a primary constraint on food production, affecting the company's operations and its customers[157] - The company expects to continue monitoring and implementing further inflation and pricing increases into 2022[158] - The foreign currency translation had a net unfavorable impact of $12.1 million on revenues during Q2 2022 due to the strengthening of the U.S. dollar[197] - The foreign currency translation had a $19.9 million unfavorable impact on revenues during the six months ended June 30, 2022[242] Tax and Income - Income tax benefit for the three months ended June 30, 2022, was $12.1 million, an increase of $21.0 million from an income tax expense of $9.0 million in the same quarter of 2021[236] - Income tax benefit for the six months ended June 30, 2022, was $12.8 million, an increase of $21.0 million compared to an income tax expense of $8.2 million for the same period in 2021[280] - Net income for the three months ended June 30, 2022, was $3,953,000, compared to a net loss of $13,399,000 for the same period in 2021[290] Capital Expenditures and Investments - Maintenance capital expenditures for the three months ended June 30, 2022, were $20,118,000, compared to $20,488,000 in 2021[313] - The company incurred approximately $21.3 million for contemplated future expansion or development projects during the six months ended June 30, 2022[321] - The company invested $4.4 million in the formation of the LATAM joint venture during the six months ended June 30, 2022[327] Debt and Financing - As of June 30, 2022, total outstanding indebtedness was $3,223,017,000, with fixed-rate debt comprising 70% and variable-rate debt 30%[307] - The effective interest rate of outstanding debt remained consistent at 3.24% for the six months ended June 30, 2021, and 3.23% for the same period in 2022[277] - The company has investment grade credit ratings of BBB from Fitch and DBRS Morningstar, and Baa3 from Moody's, which are crucial for favorable debt issuance[309] Other Financial Metrics - NAREIT Funds from operations (FFO) for the six months ended June 30, 2022, was $92.9 million, compared to $72.1 million for the same period in 2021, reflecting a year-over-year increase of 28.7%[285] - Core FFO applicable to common shareholders for the six months ended June 30, 2022, was $111.7 million, an increase from $101.2 million in the same period of 2021[285] - Adjusted FFO applicable to common shareholders for the six months ended June 30, 2022, was $142.7 million, compared to $147.7 million for the same period in 2021[285]

Americold Realty Trust (NYSE:COLD) Q1 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Scott Henderson – Vice President of Capital Markets and Investor Relations George Chappelle – Chief Executive Officer Rob Chambers – Chief Commercial Officer Marc Smernoff – Chief Financial Officer Conference Call Participants Samir Khanal – Evercore ISI Dave Rogers – Baird Mike Mueller – JPMorgan Manny Korchman – Citi Michael Bilerman – Citi Michael Carroll – RBC Capital Markets Ki Bin Kim – Trui ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section details the administrative filing information for the Form 10-Q report [Filing Details](index=1&type=section&id=Filing%20Details) This section provides the administrative details of the Form 10-Q filing for Americold Realty Trust for the quarterly period ended March 31, 2022, including its status as a large accelerated filer and registered securities - The registrant, **Americold Realty Trust**, is filing a **Quarterly Report** on **Form 10-Q** for the period ended March 31, 2022[2](index=2&type=chunk) - The **company** is classified as a '**Large accelerated filer**'[4](index=4&type=chunk) Securities Registered | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :---------------------------------------- | :---------------- | :---------------------------------------- | | Common Shares of Beneficial Interest, $0.01 par value per share | COLD | New York Stock Exchange (NYSE) | Common Stock Outstanding as of May 3, 2022 | Class | Outstanding at May 3, 2022 | | :------------------------------------- | :------------------------- | | Common Stock, $0.01 par value per share | 269,275,929 | [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section provides an organized list of all chapters and sections within the report [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a cautionary statement regarding forward-looking statements within the report, highlighting various risks and uncertainties that could cause actual results to differ materially from expectations - **Forward-looking statements** are based on beliefs, assumptions, and expectations of future financial and **operating performance** and **growth plans**, but involve **risks** and **uncertainties**[9](index=9&type=chunk) - **Key factors** that could cause actual results to differ include **supply chain disruptions**, **COVID-19 pandemic impacts**, **adverse economic conditions**, **rising interest rates** and **inflation**, **labor shortages**, **acquisition risks**, **IT system failures**, and **geopolitical conflicts** (e.g., **Russia-Ukraine**)[9](index=9&type=chunk)[11](index=11&type=chunk) - The **company assumes no obligation** to update or revise these **forward-looking statements**[12](index=12&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Americold Realty Trust, including the balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes explaining significant accounting policies, business combinations, debt, share-based compensation, commitments, segment information, and revenue recognition [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :---------------------------------------- | :------------- | :---------------- | | **Assets** | | | | Property, buildings and equipment – net | $5,140,900 | $5,127,901 | | Total assets | $8,207,869 | $8,216,197 | | **Liabilities** | | | | Total liabilities | $4,236,630 | $4,187,121 | | **Equity** | | | | Total shareholders' equity | $3,961,380 | $4,021,007 | | Total equity | $3,971,239 | $4,029,076 | - **Total assets decreased** slightly from **$8,216,197 thousand** at December 31, 2021, to **$8,207,869 thousand** at March 31, 2022[15](index=15&type=chunk) - **Total liabilities increased** from **$4,187,121 thousand** to **$4,236,630 thousand**, while **total equity decreased** from **$4,029,076 thousand** to **$3,971,239 thousand**[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's revenues, expenses, and net loss for the reporting periods Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenues | $705,695 | $634,795 | | Total operating expenses | $697,704 | $620,543 | | Operating income | $7,991 | $14,252 | | Net loss | $(17,445) | $(14,236) | | Net loss attributable to Americold Realty Trust | $(17,407) | $(14,414) | | Net loss per common share - basic | $(0.06) | $(0.06) | | Net loss per common share - diluted | $(0.06) | $(0.06) | - **Total revenues increased** by **$70.9 million** (**11.2%**) from **$634,795 thousand** in Q1 2021 to **$705,695 thousand** in Q1 2022[19](index=19&type=chunk) - **Operating income decreased significantly** from **$14,252 thousand** in Q1 2021 to **$7,991 thousand** in Q1 2022, a **43.9% decline**[19](index=19&type=chunk) - **Net loss attributable to Americold Realty Trust widened** from **$(14,414) thousand** in Q1 2021 to **$(17,407) thousand** in Q1 2022[19](index=19&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details the components of comprehensive income, including net loss and other comprehensive income items Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(17,445) | $(14,236) | | Other comprehensive income (loss) - net of tax attributable to Americold Realty Trust | $11,404 | $(9,280) | | Total comprehensive loss | $(6,018) | $(23,528) | - **Total comprehensive loss significantly improved** from **$(23,528) thousand** in Q1 2021 to **$(6,018) thousand** in Q1 2022, **primarily due to a positive change** in **unrealized net gain** on **foreign currency**[21](index=21&type=chunk) [Condensed Consolidated Statements of Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This section presents changes in the company's equity, reflecting contributions, distributions, and comprehensive income Condensed Consolidated Statements of Equity (in thousands) | Metric | Balance - December 31, 2021 | Balance - March 31, 2022 | | :------------------------------------------------------------------ | :-------------------------- | :----------------------- | | Common Shares of Beneficial Interest Par Value | $2,683 | $2,687 | | Paid-in Capital | $5,171,690 | $5,177,642 | | Accumulated Deficit and Distributions in Excess of Net Earnings | $(1,157,888) | $(1,234,875) | | Accumulated Other Comprehensive Income | $4,522 | $15,926 | | Noncontrolling Interests in Operating Partnership | $8,069 | $9,859 | | Total Equity | $4,029,076 | $3,971,239 | - **Total equity decreased** from **$4,029,076 thousand** at December 31, 2021, to **$3,971,239 thousand** at March 31, 2022, **driven by net loss** and **distributions**, partially offset by **other comprehensive income** and **share-based compensation**[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $15,586 | $46,531 | | Net cash used in investing activities | $(94,244) | $(143,737) | | Net cash provided by financing activities | $46,256 | $(235,530) | | Net decrease in cash, cash equivalents and restricted cash | $(32,402) | $(332,736) | | Cash, cash equivalents and restricted cash: End of period | $50,965 | $287,691 | - **Net cash provided by operating activities decreased significantly** from **$46,531 thousand** in Q1 2021 to **$15,586 thousand** in Q1 2022[27](index=27&type=chunk) - **Net cash used in investing activities decreased** from **$(143,737) thousand** in Q1 2021 to **$(94,244) thousand** in Q1 2022, **primarily due to lower business combination outlays**[27](index=27&type=chunk) - **Net cash provided by financing activities** was **$46,256 thousand** in Q1 2022, a **substantial improvement** from **net cash used** of **$(235,530) thousand** in Q1 2021, **driven by proceeds** from the **revolving line of credit**[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. General](index=12&type=section&id=1.%20General) This note provides an overview of Americold Realty Trust and the basis of financial statement preparation - **Americold Realty Trust** is the **world's largest publicly traded REIT focused** on **temperature-controlled warehouses**[28](index=28&type=chunk) - The **company's financial statements** are prepared in accordance with **GAAP** for interim information and **SEC rules**, and should be read with the **2021 Annual Report** on **Form 10-K**[29](index=29&type=chunk) - The **COVID-19 pandemic continued to negatively impact** the **business** in Q1 2022 due to **disruptions** in the **food supply chain**, **customer production**, **labor market** (**availability** and **cost**), and overall **inflation**, leading to **lower occupancy** and **throughput**[36](index=36&type=chunk) [2. Business Combinations](index=14&type=section&id=2.%20Business%20Combinations) This note details the accounting for business acquisitions, including finalized and preliminary allocations - **No businesses** were **acquired** during the three months ended March 31, 2022[39](index=39&type=chunk) - **Acquisition accounting** for **Liberty Freezers** (acquired Q1 2021 for **C$56.8 million** or **$44.9 million**) was finalized in Q1 2022, with **no material adjustments**[39](index=39&type=chunk) - **Acquisition accounting** for other 2021 **acquisitions** (KMT Brrr!, Bowman Stores, ColdCo, Newark Facility Management, Lago Cold Stores) remained preliminary as of March 31, 2022[39](index=39&type=chunk) [3. Acquisition, Litigation and Other, net](index=14&type=section&id=3.%20Acquisition%2C%20Litigation%20and%20Other%2C%20net) This note outlines expenses related to acquisitions, litigation, severance, and cyber incidents Acquisition, Litigation and Other, net (in thousands) | Component | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Acquisition and integration related costs | $6,285 | $13,475 | | Litigation | $1,200 | $0 | | Severance costs | $2,564 | $2,446 | | Cyber incident related costs, net of insurance recoveries | $26 | $4,771 | | Total acquisition, litigation and other, net | $10,075 | $20,751 | - **Total acquisition, litigation and other, net expenses decreased** by **$10.7 million** (**51.5%**) from **$20,751 thousand** in Q1 2021 to **$10,075 thousand** in Q1 2022, **primarily due to lower acquisition** and **integration costs** and **significantly reduced cyber incident related costs**[40](index=40&type=chunk) [4. Debt](index=16&type=section&id=4.%20Debt) This note provides details on the company's outstanding indebtedness, including principal amounts and compliance with covenants Outstanding Indebtedness (in thousands) | Indebtedness Type | March 31, 2022 Carrying Amount | December 31, 2021 Carrying Amount | | :------------------------------------ | :----------------------------- | :-------------------------------- | | Total principal amount of indebtedness | $2,946,886 | $2,854,170 | | Less: unamortized deferred financing costs | $(10,492) | $(11,050) | | Total indebtedness, net | $2,936,394 | $2,843,120 | - **Total principal amount of indebtedness increased** by **$92.7 million** (**3.3%**) from **$2,854,170 thousand** at December 31, 2021, to **$2,946,886 thousand** at March 31, 2022[46](index=46&type=chunk) - The **company** was in **compliance** with all **debt covenants** as of March 31, 2022[49](index=49&type=chunk) - **Loss on debt extinguishment**, **modifications** and **termination of derivative instruments decreased significantly** from **$3,499 thousand** in Q1 2021 to **$616 thousand** in Q1 2022, **primarily due to the early repayment** of **$200 million principal** on the **Senior Unsecured Term Loan A Facility** in Q1 2021[50](index=50&type=chunk) [5. Fair Value Measurements](index=17&type=section&id=5.%20Fair%20Value%20Measurements) This note describes the categorization and estimation of fair values for financial assets and liabilities - The **company categorizes assets** and **liabilities recorded** at **fair value** into **Level 1** (**quoted market prices**), **Level 2** (**observable inputs** other than **Level 1**), and **Level 3** (**unobservable inputs**)[51](index=51&type=chunk) - **Mortgage notes**, **senior unsecured notes**, and **term loans** are estimated using **Level 2** and **Level 3 inputs**[54](index=54&type=chunk) Fair Value Measurements (in thousands) | Metric | Hierarchy | March 31, 2022 | December 31, 2021 | | :-------------------------------------- | :-------- | :------------- | :---------------- | | Cross-currency swap asset | Level 2 | $191 | $2,015 | | Cross-currency swap liability | Level 2 | $2,502 | $0 | | Mortgage notes, senior unsecured notes and term loans (disclosed) | Level 3 | $2,865,874 | $2,939,237 | [6. Share-Based Compensation](index=19&type=section&id=6.%20Share-Based%20Compensation) This note details the company's share-based compensation plans, including expense recognition and unit grants - **Aggregate share-based compensation charges increased** from **$5.0 million** in Q1 2021 to **$8.3 million** in Q1 2022[62](index=62&type=chunk) - As of March 31, 2022, there was **$44.1 million** of **unrecognized share-based compensation expense**, to be recognized over a **weighted-average period** of **2.0 years**[62](index=62&type=chunk) Restricted Stock Unit Grants (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Number of Restricted Stock Units Granted | 481,099 | 296,610 | | Grant Date Fair Value | $12,857 | $9,885 | OP Unit Grants (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Number of OP Units Granted | 342,980 | 258,479 | | Grant Date Fair Value (in thousands) | $9,001 | $8,434 | [7. Commitments and Contingencies](index=23&type=section&id=7.%20Commitments%20and%20Contingencies) This note discloses the company's legal proceedings, environmental obligations, and other contingent liabilities - The **company** is involved in **legal proceedings**, including the **Kansas Breach of Settlement Agreement Litigation** and **Preferred Freezer Services, LLC Litigation**, but **management believes** the **ultimate outcome** will not have a **material adverse impact** on **financial statements**[80](index=80&type=chunk)[88](index=88&type=chunk)[93](index=93&type=chunk) - The **company** is subject to **environmental laws** and **OSHA regulations**, with **accruals recorded** for **probable liabilities**, and believes it is in **substantial compliance**[94](index=94&type=chunk)[96](index=96&type=chunk) - Most **warehouses use ammonia** as a refrigerant, which is a **hazardous chemical regulated** by the **EPA**, posing **risks** of **injuries**, **loss of life**, and **property damage** in case of a **significant release**[95](index=95&type=chunk) [8. Accumulated Other Comprehensive Loss](index=26&type=section&id=8.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components and changes in accumulated other comprehensive loss, including foreign currency translation Activity in Accumulated Other Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total pension and other postretirement benefits, net of tax | $67 | $381 | | Total foreign currency translation gain (loss) | $11,186 | $(10,682) | | Total unrealized gains on derivative contracts | $151 | $1,021 | | Total change in other comprehensive income (loss) | $11,404 | $(9,280) | - **Total change** in **other comprehensive income** (**loss**) shifted from a **loss** of **$(9,280) thousand** in Q1 2021 to an **income** of **$11,404 thousand** in Q1 2022, **primarily driven by a significant foreign currency translation gain**[98](index=98&type=chunk) [9. Segment Information](index=26&type=section&id=9.%20Segment%20Information) This note provides financial data for the company's Warehouse, Third-party managed, and Transportation segments - The **company operates** in three **reportable segments**: **Warehouse**, **Third-party managed**, and **Transportation**[99](index=99&type=chunk) - **Segment contribution** (**NOI**) is used to evaluate **segment performance**, calculated as **revenues less cost of operations**, excluding **depreciation**, **amortization**, **SG&A**, and **acquisition/litigation/other, net**[101](index=101&type=chunk)[102](index=102&type=chunk) Segment Revenues and Contribution (in thousands) | Segment | Three Months Ended March 31, 2022 Revenues | Three Months Ended March 31, 2021 Revenues | Three Months Ended March 31, 2022 Contribution | Three Months Ended March 31, 2021 Contribution | | :-------------------- | :----------------------------------------- | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Warehouse | $540,925 | $485,451 | $146,258 | $146,181 | | Third-party managed | $85,860 | $73,072 | $3,501 | $4,382 | | Transportation | $78,910 | $76,272 | $8,529 | $6,703 | | Total | $705,695 | $634,795 | $158,288 | $157,266 | - **Total segment revenues increased** by **11.2% YoY**, while **total segment contribution increased** by **0.6% YoY**[103](index=103&type=chunk) [10. Loss per Common Share](index=29&type=section&id=10.%20Loss%20per%20Common%20Share) This note details the calculation of basic and diluted loss per common share, including antidilutive effects Weighted Average Common Shares Outstanding (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | | Weighted average common shares outstanding – basic | 269,164 | 252,938 | | Weighted average common shares outstanding – diluted | 269,164 | 252,938 | - **Basic** and **diluted weighted-average common shares outstanding increased** by **6.4% YoY**[109](index=109&type=chunk) - **Potential common shares** were **antidilutive** for both periods due to **net loss**, resulting in **no adjustments** between **basic** and **diluted loss per share**[109](index=109&type=chunk) Antidilutive Potential Common Shares (in thousands) | Type | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | Employee stock options | 202 | 413 | | Restricted stock units | 1,295 | 964 | | OP units | 494 | 358 | | Equity forward contracts | 0 | 9,665 | | Total Antidilutive Shares | 1,991 | 11,400 | [11. Revenue from Contracts with Customers](index=31&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates revenue by segment and geographic region, and details remaining performance obligations Disaggregated Revenue by Segment and Geographic Region (in thousands) | Segment/Region | Q1 2022 North America | Q1 2022 Europe | Q1 2022 Asia-Pacific | Q1 2022 South America | Q1 2022 Total | Q1 2021 North America | Q1 2021 Europe | Q1 2021 Asia-Pacific | Q1 2021 South America | Q1 2021 Total | | :------------- | :-------------------- | :------------- | :------------------- | :-------------------- | :------------ | :-------------------- | :------------- | :------------------- | :-------------------- | :------------ | | Warehouse rent and storage | $181,939 | $17,355 | $16,721 | $2,950 | $218,965 | $164,246 | $17,252 | $15,176 | $2,425 | $199,099 | | Warehouse services | $238,169 | $32,197 | $39,202 | $1,600 | $311,168 | $210,846 | $25,336 | $42,469 | $1,524 | $280,175 | | Third-party managed | $80,820 | $0 | $5,040 | $0 | $85,860 | $67,697 | $0 | $5,375 | $0 | $73,072 | | Transportation | $37,493 | $34,106 | $6,860 | $451 | $78,910 | $40,315 | $30,612 | $4,973 | $372 | $76,272 | | Lease revenue | $9,313 | $1,479 | $0 | $0 | $10,792 | $6,177 | $0 | $0 | $0 | $6,177 | | Total revenues | $547,734 | $85,137 | $67,823 | $5,001 | $705,695 | $489,281 | $73,200 | $67,993 | $4,321 | $634,795 | - **Total revenues** from **contracts with customers increased** by **$70.9 million** (**11.2%**) **YoY**, with **North America showing** the **largest absolute increase**[112](index=112&type=chunk) - As of March 31, 2022, the **company** had **$703.7 million** of **remaining unsatisfied performance obligations** from **non-cancellable contracts**, with **24% expected** to be recognized in 2022 and the remainder over a **weighted average** of **12.6 years** through 2038[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, detailing business segments, key factors affecting performance, how performance is assessed, a comparison of Q1 2022 and Q1 2021 results, non-GAAP financial measures, and liquidity and capital resources [Management's Overview](index=33&type=section&id=MANAGEMENT%27S%20OVERVIEW) This section provides a high-level overview of Americold Realty Trust's global operations and strategic positioning - **Americold Realty Trust** is the **world's largest publicly traded REIT specializing** in **temperature-controlled warehouses**[123](index=123&type=chunk) - As of March 31, 2022, the **company operated** a **global network** of **249 temperature-controlled warehouses** (**1.5 billion cubic feet**) across **North America** (**201**), **Europe** (**27**), **Asia-Pacific** (**18**), and **South America** (**3**)[123](index=123&type=chunk) - The **company also holds minority interests** in two Brazilian **joint ventures**, **SuperFrio** (**33 warehouses**) and **Comfrio** (**27 warehouses**)[123](index=123&type=chunk) [Components of Our Results of Operations](index=33&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section details the primary revenue sources and operating expense categories that constitute the company's financial results - The **primary revenue sources** are **rent**, **storage**, and **warehouse services fees** (**Warehouse segment**), **third-party managed services** (**reimbursement of expenses** plus **management/incentive fees**), and **transportation services** (**transportation fees**, **fuel/capacity surcharges**)[124](index=124&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - **Warehouse segment costs** include **power**, other **facilities costs**, **labor** (**largest component**), and other **service costs**, all **impacted by inflation** and **COVID-19 related inefficiencies**[125](index=125&type=chunk)[127](index=127&type=chunk) - Other **consolidated operating expenses** include **depreciation** and **amortization** (**primarily** from **warehouses** and **intangible assets**), **corporate-level selling, general and administrative expenses** (**wages**, **benefits**, **equity incentive plans**), and **corporate-level acquisition, litigation and other, net expenses** (**transaction costs**, **litigation**, **severance**, **cyber incident costs**)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Key Factors Affecting Our Business and Financial Results](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Business%20and%20Financial%20Results) This section identifies critical internal and external factors, including macroeconomic conditions and geopolitical events, influencing the company's performance - **Business** and **financial results** were **negatively impacted** by **COVID-19 related disruptions** in the **food supply chain**, **customer production/transportation**, **labor market** (**availability** and **cost**), and **macroeconomic inflation**[135](index=135&type=chunk) - **Occupancy** and **throughput volumes remain lower** than pre-COVID-19 levels due to **food production** and **transportation challenges**, exacerbated by **labor availability** and the **Omicron variant**[137](index=137&type=chunk)[138](index=138&type=chunk) - The **company initiated out-of-cycle rate increases** in **customer contracts** during H2 2021 and expects to continue monitoring pricing in 2022 to **mitigate inflationary pressures**[139](index=139&type=chunk) - **Geopolitical conflicts**, such as the **Russia-Ukraine war**, create **uncertainty** and **risks** including **increased inflation**, **commodity price volatility**, **supply chain disruptions**, and **foreign currency fluctuations**, potentially **impacting European operations**[140](index=140&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) - **Seasonality impacts physical occupancy** (**lowest** in May-June, **peaks** Sept-Dec) and **power expense** (**highest** in Q3), but is **mitigated by fixed commitment contracts** and **diverse customer industries/geographies** (**Southern Hemisphere operations**)[143](index=143&type=chunk)[146](index=146&type=chunk) - **Foreign currency translation causes variations** in **consolidated revenues** and **expenses**, with **fluctuations potentially material** to **results of operations**[147](index=147&type=chunk) [Focus on Our Operational Effectiveness and Cost Structure](index=38&type=section&id=Focus%20on%20Our%20Operational%20Effectiveness%20and%20Cost%20Structure) This section outlines the company's initiatives to enhance efficiency, integrate acquisitions, and manage costs through strategic investments and portfolio adjustments - The **company focuses** on **streamlining business processes**, **integrating acquired assets**, **standardizing operations**, and implementing **new IT tools**[152](index=152&type=chunk) - **Cost reduction initiatives** include **investments** in **energy efficiency projects** (**LED lighting**, **thermal energy storage**, **motion-sensor technology**) and **participation** in **Power Demand Response programs**[152](index=152&type=chunk) - **Active portfolio management involves evaluating** and **exiting less strategic/profitable markets** or **business lines**, such as selling **warehouse assets** or exiting **leased facilities**[153](index=153&type=chunk) [Strategic Shift within Our Transportation Segment](index=38&type=section&id=Strategic%20Shift%20within%20Our%20Transportation%20Segment) This section describes the company's strategic reorientation of its transportation segment towards higher-margin, value-added services - The **transportation segment** is undergoing a **strategic shift** to exit **commoditized**, **non-scalable**, or **low-margin services**[154](index=154&type=chunk) - The **focus** is on more **profitable**, **value-added programs** like **regional**, **national**, **truckload**, and **retailer-specific multi-vendor consolidation services**[154](index=154&type=chunk) - This **strategy aims** to **improve efficiency**, **reduce customer transportation costs**, drive **client retention**, and maintain **high occupancy** in **temperature-controlled warehouses**, including adding **dedicated fleet services** through **acquisitions**[154](index=154&type=chunk) [Historically Significant Customer](index=38&type=section&id=Historically%20Significant%20Customer) This section discusses the financial impact and nature of business with a major customer, primarily within the third-party managed segment - One **customer accounted** for over **10%** of **total revenues** for the three months ended March 31, 2022 (**$78.1 million**) and 2021 (**$65.8 million**)[155](index=155&type=chunk) - The **substantial majority** of this **customer's business relates** to the **third-party managed segment**, where the **company** is **reimbursed** for most **expenses**[155](index=155&type=chunk) - **Reimbursements** from this **customer** were **$75.2 million** in Q1 2022 and **$61.3 million** in Q1 2021, offset by **matching expenses**[155](index=155&type=chunk) [Economic Occupancy of our Warehouses](index=39&type=section&id=Economic%20Occupancy%20of%20our%20Warehouses) This section defines and explains the importance of economic occupancy as a key driver of warehouse segment financial performance - **Average economic occupancy** is defined as **physically occupied pallets** plus **contractually committed pallets**[157](index=157&type=chunk) - The **company actively seeks fixed commitment contracts** to **mitigate seasonality** and other **factors impacting physical occupancy**, ensuring **customers** have necessary space[157](index=157&type=chunk) - **Economic occupancy** is considered an **important driver** of **financial results**[157](index=157&type=chunk) [Throughput at our Warehouses](index=39&type=section&id=Throughput%20at%20our%20Warehouses) This section describes how the volume of goods movement in warehouses impacts service revenues and is influenced by production and demand - **Throughput**, the **volume of pallets entering** and **exiting warehouses**, **significantly impacts warehouse services revenues**[158](index=158&type=chunk) - **Higher throughput drives revenues** as **customers** are typically billed based on the **level of goods movement**[158](index=158&type=chunk) - **Throughput** can be influenced by **food manufacturers' production levels** (responding to **market conditions**, **labor**, **supply chain**, **consumer preferences**) and **changes** in **inventory turnover** due to **demand shifts**[158](index=158&type=chunk) [How We Assess the Performance of Our Business](index=39&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) This section details the key metrics and analytical approaches, including Segment Contribution and Same Store Analysis, used to evaluate business performance - **Segment Contribution** (**NOI**) is used to evaluate **primary business segments**, calculated as **segment revenues less cost of operations** (excluding certain **corporate-level expenses**)[159](index=159&type=chunk) - **Same Store Analysis includes properties owned** or **leased** for the entirety of two comparable periods with at least twelve months of **normalized operations**, adjusted for **acquisitions**, **sales**, or **developments**[164](index=164&type=chunk)[165](index=165&type=chunk) - **Constant Currency Metrics** are used to assess **underlying business performance** by translating **current period results** at **prior period average foreign exchange rates**, excluding the **impact of currency fluctuations**[173](index=173&type=chunk) [Comparison of Results for the Three Months Ended March 31, 2022 and 2021](index=42&type=section&id=Comparison%20of%20Results%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) This section provides a detailed comparative analysis of the company's financial and operational performance between the first quarters of 2022 and 2021 [Warehouse Segment](index=42&type=section&id=Warehouse%20Segment) This section analyzes the revenue, cost of operations, and contribution of the company's core warehouse segment Warehouse Segment Operating Results (in thousands) | Metric | Q1 2022 Actual | Q1 2022 Constant Currency | Q1 2021 Actual | Change Actual (%) | Change Constant Currency (%) | | :------------------------------------ | :------------- | :------------------------ | :------------- | :---------------- | :--------------------------- | | Total warehouse segment revenues | $540,925 | $548,722 | $485,451 | 11.4% | 13.0% | | Total warehouse segment cost of operations | $394,667 | $400,764 | $339,270 | 16.3% | 18.1% | | Warehouse segment contribution (NOI) | $146,258 | $147,958 | $146,181 | 0.1% | 1.2% | | Total warehouse segment margin | 27.0% | 27.0% | 30.1% | -307 bps | -315 bps | - **Warehouse segment revenues increased** by **11.4%** (**13.0%** on a **constant currency basis**) **YoY**, **driven by 2021 acquisitions**, **contractual/market-driven rate escalations**, and recently completed **developments**[177](index=177&type=chunk) - **Warehouse segment cost of operations increased** by **16.3%** (**18.1%** on a **constant currency basis**) **YoY**, due to **additional acquired facilities** and **elevated inflation impacting power**, **labor**, and other **costs**[180](index=180&type=chunk) - **Warehouse segment contribution** (**NOI**) **increased marginally** by **0.1%** (**1.2%** on a **constant currency basis**) **YoY**, with **margin decreasing** by **307 basis points**, reflecting **higher costs** and **lower throughput**[176](index=176&type=chunk)[181](index=181&type=chunk) [Same Store and Non-Same Store Analysis](index=43&type=section&id=Same%20Store%20and%20Non-Same%20Store%20Analysis) This section evaluates the performance of comparable properties, highlighting changes in occupancy, revenues, and throughput Same Store Performance Metrics | Metric | Q1 2022 | Q1 2021 | Change | | :---------------------------------------------------- | :------ | :------ | :----- | | Number of same store sites | 215 | 215 | n/a | | Economic occupancy percentage | 77.6% | 77.4% | 22 bps | | Same store rent and storage revenues per economic occupied pallet | $53.80 | $51.55 | 4.4% | | Throughput pallets (in thousands) | 8,893 | 8,947 | (0.6)% | | Same store warehouse services revenues per throughput pallet | $31.38 | $30.02 | 4.5% | - **Same store economic occupancy increased** by **22 basis points** to **77.6%**, while **physical occupancy remained stable** at **70.7%**[193](index=193&type=chunk) - **Same store rent** and **storage revenues per economic occupied pallet increased** by **4.4%** (**5.6% constant currency**), **driven by commercial terms** and **rate escalations**[193](index=193&type=chunk) - **Same store throughput pallets decreased** by **0.6%** due to **Easter holiday timing** and ongoing **COVID-19 related supply chain** and **labor disruptions**[194](index=194&type=chunk) - **Same store warehouse services revenues per throughput pallet increased** by **4.5%** (**6.3% constant currency**) due to **rate escalations** and **higher-priced value-added services**[194](index=194&type=chunk) [Third-Party Managed Segment](index=47&type=section&id=Third-Party%20Managed%20Segment) This section reviews the financial performance of the third-party managed segment, including revenue and contribution trends Third-Party Managed Segment Operating Results (in thousands) | Metric | Q1 2022 Actual | Q1 2022 Constant Currency | Q1 2021 Actual | Change Actual (%) | Change Constant Currency (%) | | :--------------------------------------- | :------------- | :------------------------ | :------------- | :---------------- | :--------------------------- | | Third-party managed revenues | $85,860 | $86,199 | $73,072 | 17.5% | 18.0% | | Third-party managed cost of operations | $82,359 | $82,631 | $68,690 | 19.9% | 20.3% | | Third-party managed segment contribution | $3,501 | $3,568 | $4,382 | (20.1)% | (18.6)% | | Third-party managed margin | 4.1% | 4.1% | 6.0% | -192 bps | -186 bps | - **Third-party managed revenues increased** by **17.5%** (**18.0% constant currency**) **YoY**, **driven by higher business volume** in **domestic managed operations** and **increased pass-through costs** (**labor**, **inflation**)[198](index=198&type=chunk) - **Third-party managed cost of operations increased** by **19.9%** (**20.3% constant currency**) **YoY**, mirroring **revenue trends**[199](index=199&type=chunk) - **Third-party managed segment contribution decreased** by **20.1%** (**18.6% constant currency**) **YoY**, with **margin declining** by **192 basis points**[200](index=200&type=chunk) [Transportation Segment](index=49&type=section&id=Transportation%20Segment) This section examines the revenue, costs, and contribution of the transportation segment, reflecting strategic shifts and market dynamics Transportation Segment Operating Results (in thousands) | Metric | Q1 2022 Actual | Q1 2022 Constant Currency | Q1 2021 Actual | Change Actual (%) | Change Constant Currency (%) | | :---------------------------------------- | :------------- | :------------------------ | :------------- | :---------------- | :--------------------------- | | Transportation revenues | $78,910 | $80,952 | $76,272 | 3.5% | 6.1% | | Total transportation cost of operations | $70,381 | $72,238 | $69,569 | 1.2% | 3.8% | | Transportation segment contribution (NOI) | $8,529 | $8,714 | $6,703 | 27.2% | 30.0% | | Transportation margin | 10.8% | 10.8% | 8.8% | 202 bps | 198 bps | - **Transportation revenues increased** by **3.5%** (**6.1% constant currency**) **YoY**, **driven by higher rates** in **consolidation business**, **acquisitions** (KMT Brrr!), and **increased brokered transportation costs/surcharges**[204](index=204&type=chunk) - **Transportation cost of operations increased** by **1.2%** (**3.8% constant currency**) **YoY**, due to **capacity constraints**, **higher carrier fees**, and **increased wage/fuel costs**[205](index=205&type=chunk) - **Transportation segment contribution increased** by **27.2%** (**30.0% constant currency**) **YoY**, with **margin improving** by **202 basis points** due to **rate increases**[206](index=206&type=chunk) [Other Consolidated Operating Expenses](index=49&type=section&id=Other%20Consolidated%20Operating%20Expenses) This section details changes in depreciation, amortization, SG&A, and acquisition/litigation-related expenses - **Depreciation** and **amortization expense increased** by **7.0%** to **$82.6 million** in Q1 2022, **primarily due to 2021 acquisitions** and recently completed **developments**[207](index=207&type=chunk) - **Corporate-level selling, general and administrative expenses increased** by **27.9%** to **$57.6 million** in Q1 2022, **driven by higher third-party legal/professional fees**, **resumption of performance-based compensation**, and **higher share-based compensation**[209](index=209&type=chunk) - **Corporate-level acquisition, litigation and other, net expenses decreased** by **$10.7 million** to **$10.1 million** in Q1 2022, mainly due to **lower acquisition/integration costs** and **cyber incident related costs** compared to Q1 2021[210](index=210&type=chunk) [Other Expense and Income](index=50&type=section&id=Other%20Expense%20and%20Income) This section reports on non-operating financial items, including interest expense and gains/losses from debt extinguishment Other (Expense) Income (in thousands) | Metric | Q1 2022 | Q1 2021 | Change (%) | | :------------------------------------------------------------------ | :------ | :------ | :--------- | | Interest expense | $(25,773) | $(25,956) | (0.7)% | | Loss on debt extinguishment, modifications and termination of derivative instruments | $(616) | $(3,499) | (82.4)% | | Other, net | $245 | $176 | 39.2% | - **Interest expense decreased** slightly by **0.7%** due to a **lower effective interest rate** (**3.06%** in Q1 2022 vs. **3.31%** in Q1 2021), despite an **increase** in **outstanding principal**[212](index=212&type=chunk) - **Loss on debt extinguishment**, **modifications**, and **termination of derivative instruments decreased** by **82.4%**, **primarily due to the early repayment** of **$200 million principal** on the **Senior Unsecured Term Loan A Facility** in Q1 2021[213](index=213&type=chunk) [Income Tax Benefit](index=51&type=section&id=Income%20Tax%20Benefit) This section discusses the income tax benefit recognized and its components for the reporting periods - **Income tax benefit** for Q1 2022 was **$0.7 million**, a **slight decrease** of **$0.1 million** compared to **$0.8 million** in Q1 2021[215](index=215&type=chunk) - **Current tax expense** and **deferred income tax benefit remained consistent** due to **comparable operating results** in both periods[215](index=215&type=chunk) [Non-GAAP Financial Measures](index=52&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures such as FFO, Core FFO, Adjusted FFO, EBITDAre, and Core EBITDA - The **company uses FFO**, **Core FFO**, **Adjusted FFO**, **EBITDAre**, and **Core EBITDA** as **supplemental performance measures**[217](index=217&type=chunk) - **FFO** is calculated per **NAREIT standards**, excluding **depreciation**, **amortization**, and **gains/losses** from **real estate sales**[218](index=218&type=chunk) - **Core FFO adjusts FFO** for items like **non-real estate asset sales**, **acquisition/litigation costs**, **share-based compensation** for **IPO grants**, **debt extinguishment losses**, and **foreign currency exchange loss**[218](index=218&type=chunk) - **Adjusted FFO further adjusts Core FFO** for **amortization of deferred financing costs**, **above/below market leases**, **straight-line net rent**, **deferred income taxes**, **share-based compensation** (excluding **IPO grants**), **non-real estate depreciation/amortization**, and **maintenance capital expenditures**[218](index=218&type=chunk) - **EBITDAre** is calculated per **NAREIT standards**, and **Core EBITDA further adjusts EBITDAre** for **non-core operating items**[220](index=220&type=chunk) Reconciliation of Net Loss to FFO, Core FFO, and Adjusted FFO (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(17,445) | $(14,236) | | NAREIT Funds from operations | $35,851 | $38,271 | | Core FFO applicable to common shareholders | $46,329 | $62,546 | | Adjusted FFO applicable to common shareholders | $68,854 | $75,921 | Reconciliation of Net Loss to EBITDAre and Core EBITDA (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(17,445) | $(14,236) | | NAREIT EBITDAre | $93,438 | $88,789 | | Core EBITDA | $110,895 | $117,789 | [Liquidity and Capital Resources](index=55&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section assesses the company's ability to meet its financial obligations and fund operations through cash flows, credit facilities, and capital markets - **Principal funding sources** include **current cash balances**, **cash flows** from **operations**, the **2020 Senior Unsecured Revolving Credit Facility**, **ATM Equity Programs**, and other **debt/equity offerings**[227](index=227&type=chunk) - These **sources** are expected to be **adequate** for **short-term** and **long-term liquidity requirements**, including **working capital**, **capital expenditures**, **debt service**, and **shareholder distributions**[228](index=228&type=chunk)[229](index=229&type=chunk) - As of March 31, 2022, approximately **$809.4 million remained available** under the **2021 ATM Equity Program**, with **no activity** during Q1 2022[233](index=233&type=chunk) - The **company maintains warehouseman's liens** on **customer products** to secure payments and has historically been **successful** in **collecting accounts receivable** during **customer bankruptcies**[234](index=234&type=chunk) - **Bad debt expense** was **$1.3 million** in Q1 2022, with **allowances** of **$20.7 million** as of March 31, 2022[235](index=235&type=chunk) - Approximately **37%** of the **labor force** is covered by **collective bargaining agreements**, with **less than 8% set** to expire in the remaining nine months of 2022[236](index=236&type=chunk) - As a **REIT**, the **company** is required to **distribute 90%** of its **taxable income annually** and intends to make **regular quarterly distributions**, funded by **cash flows** or **borrowings** if necessary[237](index=237&type=chunk)[238](index=238&type=chunk) Debt Summary as of March 31, 2022 (in thousands) | Debt Type | Amount | Percent of Total | | :--------------------------------------------------------------------- | :---------- | :--------------- | | Fixed rate | $2,058,187 | 72% | | Variable rate - unhedged | $888,699 | 28% | | Total mortgage notes, senior unsecured notes, term loans and borrowings under revolving line of credit | $2,946,886 | | | Sale-leaseback financing obligations | $177,305 | | | Financing lease obligations | $91,436 | | | Total debt and debt-like obligations | $3,215,627 | | - The **effective interest rate** as of March 31, 2022, was **3.06%**, with a **weighted average term** to **initial maturity** of approximately **5.8 years**[242](index=242&type=chunk)[243](index=243&type=chunk) - The **company holds investment-grade credit ratings**: **BBB** (Fitch, **stable outlook**), **BBB** (DBRS Morningstar, **Positive Trends outlook**), and **Baa3** (Moody's, **stable outlook**)[245](index=245&type=chunk) Maintenance Capital Expenditures (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------- | :-------------------------------- | :-------------------------------- | | Real estate | $13,864 | $12,928 | | Personal property | $974 | $1,782 | | Information technology | $1,268 | $1,021 | | Total | $16,106 | $15,731 | | Per cubic foot | $0.011 | $0.011 | Repair and Maintenance Expenses (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------- | :-------------------------------- | :-------------------------------- | | Real estate | $8,843 | $8,376 | | Personal property | $14,446 | $11,454 | | Total | $23,289 | $19,830 | | Per cubic foot | $0.016 | $0.014 | Growth and Expansion Capital Expenditures (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | | Acquisitions, net of cash acquired and adjustments | $(603) | $41,956 | | Expansion and development initiatives | $58,521 | $83,268 | | Information technology | $741 | $1,528 | | Total Growth and Expansion Capital Expenditures | $58,659 | $126,752 | - **Expansion** and **development expenditures** in Q1 2022 were **primarily** for **automated development sites** in Connecticut and Pennsylvania (**$17.6 million**), Spearwood, Australia **expansion** (**$8.1 million**), and Dunkirk, NY **development** (**$7.8 million**)[255](index=255&type=chunk) Historical Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $15,586 | $46,531 | | Net cash used in investing activities | $(94,244) | $(143,737) | | Net cash provided by (used in) financing activities | $46,256 | $(235,530) | - **Net cash provided by operating activities decreased** by **$30.9 million YoY**, mainly due to **increased accounts receivable** and **higher SG&A expenses**[262](index=262&type=chunk) - **Net cash used in investing activities decreased** by **$49.5 million YoY**, reflecting **lower cash used** for **business combinations**[263](index=263&type=chunk)[264](index=264&type=chunk) - **Net cash provided by financing activities** was **$46.3 million** in Q1 2022, a **significant improvement** from **cash used** of **$235.5 million** in Q1 2021, **primarily due to proceeds** from the **revolving line of credit**[265](index=265&type=chunk)[266](index=266&type=chunk) [SIGNIFICANT ACCOUNTING POLICIES UPDATE](index=60&type=section&id=SIGNIFICANT%20ACCOUNTING%20POLICIES%20UPDATE) This section refers to the detailed disclosures on significant accounting policies within the financial statements - Refer to **Note 1** to the **condensed consolidated financial statements** for **significant accounting policies**[267](index=267&type=chunk) [NEW ACCOUNTING PRONOUNCEMENTS](index=61&type=section&id=NEW%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to the detailed disclosures on new accounting pronouncements within the financial statements - Refer to **Note 1** to the **condensed consolidated financial statements** for **new accounting pronouncements**[269](index=269&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, specifically interest rate risk and foreign currency risk, and how these could impact future income and cash flows - As of March 31, 2022, the **company** had **$174.9 million** in **USD-denominated variable-rate debt** and **$250 million** in **CAD-denominated variable-rate debt**[272](index=272&type=chunk) - A **100 basis point increase** in **market interest rates** would **increase annual interest expense** by approximately **$8.9 million**, while a **100 basis point decrease** would **reduce** it by **$5.2 million**[272](index=272&type=chunk) - **Foreign currency risk exposure** at March 31, 2022, was **not materially different** from what was disclosed in the **2021 Annual Report** on **Form 10-K**[273](index=273&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and internal control over financial reporting, concluding on their effectiveness and reporting on any changes - **Management**, with **CEO** and **CFO participation**, concluded that the **company's disclosure controls** and **procedures** were **effective** as of March 31, 2022[274](index=274&type=chunk) - **No changes** in **internal control over financial reporting** were identified during Q1 2022 that **materially affected**, or are reasonably likely to **materially affect**, the **company's internal control over financial reporting**[277](index=277&type=chunk) [PART II - OTHER INFORMATION](index=64&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not a party to any material litigation or legal proceedings that would have a material impact on its business, financial condition, liquidity, results of operations, and prospects, referring to Note 7 for further details - The **company** is **not a party** to any **material litigation** or **legal proceedings** that would have a **material impact** on its **business**, **financial condition**, **liquidity**, **results of operations**, and **prospects**[279](index=279&type=chunk) - **Further information** regarding **material legal proceedings** is provided in **Note 7** to the **Condensed Consolidated Financial Statements**[280](index=280&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section highlights that investing in the company's common shares involves risks and uncertainties, referencing the 2021 Annual Report on Form 10-K and specifically discussing the adverse effects of geopolitical conflicts, such as the Russia-Ukraine conflict, on global operations - **Investing** in the **company's common shares involves risks** and **uncertainties**, as detailed in the **2021 Annual Report** on **Form 10-K**[281](index=281&type=chunk) - **Geopolitical conflicts**, specifically the **Russia-Ukraine conflict**, may **adversely affect** the **business** and **results of operations**, particularly **European operations**, through **increased inflation**, **commodity price volatility**, **supply chain disruptions**, and **foreign currency fluctuations**[282](index=282&type=chunk)[283](index=283&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were **no unregistered sales** of **equity securities** and **use of proceeds**[286](index=286&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - There were **no defaults** upon **senior securities**[287](index=287&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - There are **no mine safety disclosures**[288](index=288&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - There is **no other information** to report[289](index=289&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including offer letters, severance plans, equity award agreements, certifications, and XBRL financial statements - The **exhibits include various management contracts**, **compensatory plans**, **certifications** (**CEO**, **CFO**), and **XBRL financial statements**[291](index=291&type=chunk) [SIGNATURES](index=67&type=section&id=SIGNATURES) This section contains the official signatures for the Form 10-Q filing, confirming its submission on behalf of Americold Realty Trust [Filing Signatures](index=67&type=section&id=Filing%20Signatures) This section contains the official signatures for the Form 10-Q filing, confirming its submission on behalf of Americold Realty Trust - The **report** was signed by **Marc J. Smernoff**, **Chief Financial Officer** and **Executive Vice President**, on May 6, 2022[295](index=295&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number: 001-34723 AMERICOLD REALTY TRUST (Exact name of registrant as specified in its charter) Maryland 93-0295215 (State or other jurisdiction of incorpo ...

Financial Data and Key Metrics Changes - For the full year 2021, total revenues were $2.7 billion, with global warehouse segment revenues at $2.1 billion, reflecting increases of 36.6% and 34.6% respectively [32] - The company reported total NOI of $630 million and global warehouse segment NOI of $586 million, marking increases of 14.2% and 12.7% respectively [32] - AFFO per share was $1.15, aligning with guidance [9][32] - Core EBITDA for Q4 2021 was $124 million, a 5.6% year-over-year increase, while the core EBITDA margin decreased by 511 basis points to 17.3% [25] Business Line Data and Key Metrics Changes - Global warehouse segment revenue for Q4 2021 was $554 million, a 36% increase year-over-year, driven by acquisitions and rate escalations [26] - Same store global warehouse segment revenue for Q4 2021 was $379 million, up 2.5% year-over-year [28] - Same store global warehouse NOI decreased by 8.2% year-over-year, reflecting ongoing disruptions in food production and labor challenges [28] Market Data and Key Metrics Changes - Economic and physical occupancies for the 2021 same store pool averaged approximately 77% and 68.4% respectively, significantly below pre-COVID levels [12][13] - The overall cold storage industry saw a decline in total holdings of 8% to 10% throughout 2021 compared to 2019 levels [13] - The company noted that fill rates have dropped to the 70% range, a significant decrease from the pre-COVID standard of 98.5% [15][16] Company Strategy and Development Direction - The company aims to enhance labor management, focusing on recruitment and retention to reduce dependence on temporary labor [44] - There is a commitment to improving customer service levels to exceed pre-COVID standards [44] - The company plans to maintain its development projects on track despite macroeconomic challenges [44] Management's Comments on Operating Environment and Future Outlook - Management highlighted that COVID-related supply chain and labor disruptions continue to impact the global food supply chain, affecting occupancy and throughput [37] - The company expects AFFO per share in the range of $1 to $1.10 for 2022, with guidance reflecting ongoing challenges in the labor market and inflation [37] - Management expressed confidence in the recovery of inventory levels once labor challenges are resolved, although the timing remains uncertain [64] Other Important Information - The company received recognition from Newsweek for its ESG efforts, being included in the list of America's most responsible companies for 2022 [17] - The company completed $766 million in global acquisitions and announced $168 million in development starts for 2021 [32][34] - Total debt outstanding was $3.1 billion, with total liquidity of $803 million at quarter end [36] Q&A Session Summary Question: What led to the change of heart regarding the CEO position? - The CEO mentioned that the decision to accept the permanent position was influenced by the board's support and his commitment to the company [43] Question: How does the company plan to address labor cost increases? - Management indicated that the full impact of pricing increases will be felt in Q2 2022, as they continue to engage with customers [47] Question: What factors contributed to the deceleration in service revenue growth? - The CEO noted that lower throughput volumes and a shift in business mix contributed to the deceleration in service revenue growth [49] Question: How is the company managing customer commitments amid recent challenges? - Management stated that customers recognize the need for space as production levels recover, and fixed commitments have continued to grow [51] Question: What is the outlook for the impact of the Russia conflict on food production? - The CEO acknowledged that the conflict could impact European business but emphasized that supply chain challenges are global in nature [68][70]

Americold Realty Trust (NYSE:COLD) Q3 2021 Results Conference Call November 3, 2021 5:00 PM ET Company Participants Scott Henderson - SVP Mark Patterson - Chairman of the Board of Trustees Marc Smernoff - CFO Rob Chambers - Chief Commercial Officer Conference Call Participants Operator Good day. And welcome to the Americold Realty Trust Third Quarter 2021 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Scott Henderson, Senior V ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to , Commission File Number: 001-34723 AMERICOLD REALTY TRUST (Exact name of registrant as specified in its charter) (State or other jur ...

Warehouse Operations - As of June 30, 2021, the company operated 246 temperature-controlled warehouses with a total capacity of over 1.4 billion cubic feet[279]. - The company has a global presence with 200 warehouses in North America, 27 in Europe, 16 in Asia-Pacific, and 3 in South America[279]. - As of June 30, 2021, the company operated a total of 246 warehouses, with 162 classified as same-store warehouses[328]. - The average economic occupancy of warehouses is a key performance indicator, with a focus on transitioning customers to contracts featuring fixed storage commitments to mitigate seasonal fluctuations[315][317]. - The throughput at warehouses, which refers to the volume of pallets entering and exiting, is crucial for revenue generation, as customers are billed based on throughput levels[318]. - Economic occupancy at same stores decreased to 75.2% for the three months ended June 30, 2021, down 403 basis points from 79.2% in the same period of 2020[354]. - Average occupied economic pallets for same store sites decreased by 4.7% to 2,830 pallets, impacting economic occupancy percentage[350]. - Economic occupancy percentage for same store sites dropped to 76.0%, down from 80.9%[397]. - Average economic occupied pallets for same store sites decreased by 5.8% to 2,858[397]. Acquisitions and Expansion - The company acquired Agro Merchants for a total consideration of $1.59 billion, expanding its temperature-controlled warehouse and transportation services[293]. - The acquisition of Hall's Warehouse Corporation was completed for $489.2 million, enhancing the company's service offerings in the Northeast U.S.[296]. - The company acquired KMT Brrr! for $70.8 million, funded through its 2020 Senior Unsecured Revolving Credit Facility[291]. - The company holds a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. for approximately $25.7 million, which operates 33 warehouses in Brazil[299]. - Approximately $229.8 million of the revenue increase was driven by acquisitions completed during 2020 and 2021, including 61 warehouse facilities acquired[385]. - The company expanded its non-same store sites to 75, up from 10 in the previous year[397]. - The company invested $63.5 million in two fully-automated development sites in Connecticut and Pennsylvania during the six months ended June 30, 2021[470]. - New development projects announced included an $8.7 million investment in the Atlanta major market phase 2 project and a $4.5 million investment in the Dunkirk NY expansion[471]. Financial Performance - For the three months ended June 30, 2021, sales to a significant customer were $64.1 million, compared to $64.4 million for the same period in 2020, indicating a slight decrease of 0.5%[314]. - For the six months ended June 30, 2021, sales to the same customer were $130.0 million, up from $120.0 million in 2020, reflecting an increase of 8.3%[314]. - Warehouse segment revenues for the three months ended June 30, 2021, were $503.7 million, a 35.3% increase from $372.4 million in the same period of 2020[336]. - The increase in warehouse segment revenues was driven by acquisitions totaling 64 facilities and contractual rate escalations, contributing approximately $120.6 million to revenue growth[336]. - Warehouse segment revenues for the six months ended June 30, 2021, were $989.2 million, an increase of $235.7 million or 31.3% compared to $753.5 million for the same period in 2020[385]. - Total warehouse segment revenues increased by 31.3% to $989,185,000 compared to $753,479,000 in the same period last year[395]. - Total same store revenues grew by 0.2% to $715,493,000, while total same store cost of operations increased by 1.8% to $480,766,000[393]. - Non-same store revenues surged by 600.2% to $273,692,000, with non-same store cost of operations rising by 534.6% to $217,859,000[393]. Costs and Expenses - The company reported that labor costs are the largest component of warehouse operations, influenced by headcount changes and compensation levels[281]. - Warehouse segment cost of operations rose to $359.4 million, reflecting a 42.4% increase compared to $252.3 million in the prior year[339]. - The increase in costs was attributed to power, labor, property tax, and insurance, reflecting current market trends[339]. - Total warehouse cost of operations rose by 37.9% to $698,625,000, up from $506,574,000 in the previous year[395]. - Labor costs increased to $438.9 million for the six months ended June 30, 2021, reflecting a 30.8% increase compared to $335.6 million for the same period in 2020[384]. - Corporate-level selling, general and administrative expenses were $42.5 million for the three months ended June 30, 2021, an increase of $10.1 million, or 31.3%, compared to $32.3 million in the same period of 2020[369]. - Corporate-level selling, general and administrative expenses rose to $87.5 million for the six months ended June 30, 2021, an increase of 26.4% from $69.2 million in the same period of 2020[416]. Depreciation and Amortization - The company incurred significant depreciation and amortization expenses due to the capital-intensive nature of its business[287]. - Depreciation and amortization expense rose to $84.5 million for the three months ended June 30, 2021, an increase of $32.1 million, or 61.2%, compared to $52.4 million in the same period of 2020[368]. - Depreciation and amortization expense was $161.7 million for the six months ended June 30, 2021, up 55.4% from $104.0 million in the same period of 2020[415]. COVID-19 Impact - The company expects to continue facing inefficiencies due to COVID-19 related operational changes[281]. - The company continues to monitor the impact of COVID-19 on operations, with ongoing uncertainties regarding its effects on financial performance and market conditions[304]. Currency and Taxation - The impact of foreign currency translation on revenues and expenses from international operations is significant, with fluctuations potentially affecting overall financial results[305][307]. - The foreign currency translation had a favorable impact of $13.1 million on revenues and $9.5 million unfavorable impact on expenses during the three months ended June 30, 2021[338][339]. - The foreign currency translation of revenues had a favorable impact of $25.0 million during the six months ended June 30, 2021, mainly due to the weakening of the U.S. dollar[387]. - The income tax expense for the three months ended June 30, 2021, was $9.0 million, an increase of $7.8 million from $1.2 million for the same period in 2020, primarily due to a tax rate change in the UK[380]. - Income tax expense for the six months ended June 30, 2021, was $8.2 million, a decrease of $6.5 million compared to the same period in 2020, influenced by a tax rate change in the UK[430]. Debt and Financing - The company had approximately $2.6 billion in outstanding debt as of June 30, 2021, with 81.94% being fixed-rate debt[457]. - The effective interest rate on outstanding debt decreased from 4.22% to 3.24% for the six months ended June 30, 2021, despite an increase in outstanding principal from $1.8 billion to $2.6 billion[424]. - Interest expense increased to $26.6 million for the three months ended June 30, 2021, up $3.4 million, or 14.7%, compared to $23.2 million in the same period of 2020[375]. - Interest expense increased by $5.5 million, or 11.7%, to $52.5 million for the six months ended June 30, 2021, compared to $47.0 million for the same period in 2020[424]. - Loss on debt extinguishment was $0.9 million for the three months ended June 30, 2021, primarily due to the amortization of fees for the termination of interest rate swaps[377]. - Loss on debt extinguishment and modifications was $4.4 million for the six months ended June 30, 2021, primarily due to early repayment of $200 million on the Senior Unsecured Term Loan A Facility[426]. Revenue Streams - Transportation revenues increased to $78.8 million for the three months ended June 30, 2021, a rise of $43.9 million, or 126.0%, compared to $34.9 million in the same period of 2020[364]. - Transportation revenues surged to $155.1 million for the six months ended June 30, 2021, an increase of 119.1% compared to $70.8 million in the same period of 2020[412]. - Third-party managed revenues were $72.2 million for the three months ended June 30, 2021, a decrease of $0.8 million, or 1.1%, compared to $73.0 million in the same period of 2020[359]. - Third-party managed revenues increased to $145.2 million for the six months ended June 30, 2021, a rise of 5.3% from $137.9 million in the same period of 2020[406]. Miscellaneous - The company has implemented a shared services support structure to manage costs and enhance operational efficiency[288]. - The company has implemented various cost-reduction initiatives, including energy efficiency projects, which have led to reduced energy consumption and costs[310]. - The strategic shift in the transportation segment aims to focus on temperature-controlled warehouses, moving away from low-margin services to more profitable, value-added programs[313]. - The company has exited less strategic markets and business lines, including the sale of certain warehouse assets and the exit of the China joint venture, as part of active portfolio management[312]. - The company is required to distribute 90% of its taxable income annually to maintain its REIT status, which it has consistently met by distributing at least 100% of taxable income since inception[452]. - The company has entered into an equity distribution agreement allowing for the sale of up to $900 million of common shares through an ATM equity program[448].