Americold Realty Trust(COLD) - 2025 Q2 - Quarterly Report

Warehouse Operations - As of June 30, 2025, the company operates 237 warehouses globally, totaling approximately 1.5 billion cubic feet, with 194 in North America, 24 in Europe, 17 in Asia-Pacific, and 2 in South America[137] - The company has 223 same store warehouses as of June 30, 2025, with 11 non-same store warehouses, including 4 in the development phase[160] - Average economic occupied pallets decreased by 5.9% to 4,057 in Q2 2025 from 4,311 in Q2 2024[184] - Economic occupancy percentage declined by 430 basis points to 73.8% in Q2 2025 from 78.1% in Q2 2024[184] - Average physical occupied pallets decreased by 7.6% to 3,454 in Q2 2025 from 3,740 in Q2 2024[184] - Economic occupancy percentage for same store warehouses decreased to 75.5%, down 410 basis points year-over-year[189] - Economic occupancy percentage for same store warehouses decreased to 76.0%, down 420 basis points from the previous year[220] Financial Performance - Global Warehouse revenues for the three months ended June 30, 2025, totaled $594.070 million, a decrease of 1.1% compared to $600.387 million in the same period of 2024[184] - Warehouse segment NOI decreased by 1.7% to $201.005 million in Q2 2025 compared to $204.531 million in Q2 2024[184] - Same store revenues decreased by $12.1 million, or 1.5%, primarily due to a decrease in economic occupancy of 410 basis points[189] - Same store services revenues increased by $3.6 million, or 4.0%, driven by general rate increases despite a 2.7% decrease in throughput[191] - Total revenues for the global warehouse segment decreased by 2.4% to $1.17 billion for the six months ended June 30, 2025, compared to $1.20 billion in the same period of 2024[214] - The company reported a net gain from the sale of real estate of $11,760 in the first half of 2025, compared to a loss of $3,514 in the same period of 2024[263] - Net income for Q2 2025 was $1,550, a significant improvement from a net loss of $64,409 in Q2 2024, while the six-month net loss decreased from $54,607 in 2024 to $14,923 in 2025[263] Costs and Expenses - Total warehouse segment cost of operations decreased by 0.7% to $393.065 million in Q2 2025 from $395.856 million in Q2 2024[184] - For the three months ended June 30, 2025, selling, general, and administrative expenses increased by $7.5 million, or 12.5%, primarily due to the go-live of Project Orion in North America and Asia Pacific[201] - Corporate-level acquisition, cyber incident, and other net expenses totaled $23.2 million for the three months ended June 30, 2025, compared to $3.0 million in the same period of 2024, reflecting a significant increase of $20.2 million[202] - Same store rent and storage contribution (NOI) decreased by $24.2 million, or 7.2%, compared to the prior year[220] - Interest expense increased by $5.1 million, or 15.3%, to $38.2 million for the three months ended June 30, 2025, due to an increase in outstanding debt[208] Project Orion - The company has incurred $193.3 million in implementation costs related to "Project Orion," aimed at enhancing technology systems and business processes, with an unamortized balance of $81.6 million as of June 30, 2025[141] - For the six months ended June 30, 2025, selling, general, and administrative expenses increased by $11.3 million, or 9.0%, during the same period, driven by the go-live of Project Orion in North America and Asia Pacific[233] - Project Orion expenses increased by $4.1 million, or 20.5%, compared to the same period in 2024, primarily due to higher contract labor and professional fees[235] Acquisitions and Sales - The company completed the acquisition of a temperature-controlled storage facility in Baytown, TX for $108.4 million on March 17, 2025[144] - The sale of a 14.99% equity interest in the SuperFrio joint venture generated net proceeds of $27.0 million, resulting in a net gain of $2.4 million for the three months ended June 30, 2025[145] - During the three months ended June 30, 2025, the company sold three facilities for total proceeds of $20.4 million, resulting in a total gain of $11.8 million[146] - The company recorded a net gain of $11.8 million from the sale of real estate during the three months ended June 30, 2025, related to the strategic sale of two facilities in the U.S. and one in Europe[206] Debt and Financing - As of June 30, 2025, total outstanding indebtedness amounts to $4,049,051,000, with fixed interest rate debt constituting 92.7% of total debt[278] - The company completed a public offering of $500 million in senior unsecured notes at a 5.409% interest rate, due September 12, 2034, with the first interest payment scheduled for March 12, 2025[266] - A second public offering of $400 million in senior unsecured notes at a 5.600% interest rate was completed on April 3, 2025, with the first interest payment due on November 15, 2025[267] - Cash provided by financing activities for the six months ended June 30, 2025, was $267,318,000, primarily from a public debt offering[306] Impairments and Taxation - The impairment of long-lived assets amounted to $5.2 million during the three months ended June 30, 2025, primarily related to the exit of certain warehouse operations[205] - The company reported a $3.2 million income tax expense for the three months ended June 30, 2025, an increase of $5.7 million from an income tax benefit of $2.5 million in the same period of 2024[212] - Income tax expense for the six months ended June 30, 2025, was $5.7 million, compared to an income tax benefit of $0.5 million for the same period in 2024[247] Operational Efficiency - The company is focused on reducing costs through energy efficiency projects, including LED lighting and solar energy storage, to lower energy consumption and expenses[140] - The company’s operational effectiveness initiatives include centralizing processes and adopting new technology to streamline operations and reduce costs[138] Market Conditions - The company’s revenues and expenses are impacted by foreign currency fluctuations, but international operations are typically denominated in local currencies, partially mitigating this impact[152] - The foreign currency risk exposure as of June 30, 2025, was not materially different from the disclosures in the 2024 Annual Report[317]