AMERICOLD REALTY TRUST

Table of Contents

1. General

The Company

Americold Realty Trust, Inc. together with its subsidiaries (“ART”, “Americold”, the “Company”, “us” or “we”) is a Maryland corporation that operates as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company is a global leader in temperature-controlled storage, logistics, real estate and value added services, and is focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. The REIT operates 239 warehouses globally, with 195 in North America,25 in Europe,17 in Asia-Pacific, and 2 in South America as of June 30, 2024.

Our business includes three primary business segments: warehouse, transportation and third-party managed. We have minority interests intwo joint ventures: SuperFrio (operates 35 temperature-controlled warehouses in Brazil), and RSA (operates 2 temperature-controlled warehouses in Dubai).

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These unaudited Condensed Consolidated Financial Statements do not include all disclosures associated with the Company’s Consolidated Annual Financial Statements included in its 2023 Annual Report on Form 10-K as filed with the SEC, and, accordingly, should be read in conjunction with the referenced annual report. In the opinion of management, the Condensed Consolidated Financial Statements reflect all adjustments considered necessary for a fair presentation, all of which are normal and recurring in nature, with exception of the foreign currency adjustment described further below. The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries where the Company exerts control. Intercompany balances and transactions have been eliminated. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. Investments in which the Company does not have control, and is not the primary beneficiary of a Variable Interest Entity (“VIE”), but where the Company exercises significant influence over the operating and financial policies of the investee, are accounted for using the equity method of accounting.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of (1) assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

The Condensed Consolidated Statement of Cash Flows includes various reclassifications, all within Cash Provided by Operating Activities, to conform current and prior period presentation.

Recent Capital Markets Activity

Universal Shelf Registration Statement

On March 17, 2023, the Company and the Operating Partnership filed with the SEC an automatic shelf registration statement on Form S-3 (Registration No. 333-270664 and 333-270664-01) (the “Registration Statement”), registering an indeterminate amount of (i) the Company’s common stock, $0.01 par value per share, (ii) the Company’s preferred stock, $0.01 par value per share, (iii) depositary shares representing entitlement to all rights and preferences of fractions of the Company’s preferred shares of a specified series and represented by depositary receipts, (iv) warrants to purchase the Company’s common stock or preferred stock or depositary shares and (v) debt securities of the Operating Partnership, which may be fully and unconditionally guaranteed by the Company.

At the Market (ATM) Equity Program

On March 17, 2023, the Company entered into an equity distribution agreement pursuant to which we could sell, from time to time, up to an aggregate sales price of $900.0 million of our common stock through an ATM Equity Program (the “Prior ATM Equity Program”). Sales of our common stock made pursuant to the Prior ATM Equity Program could be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and the Company. Sales could also be made on a forward basis pursuant to separate forward sale agreements.

During August of 2023, we sold 13,244,905 common shares under the Prior ATM Equity Program for net proceeds of$412.6 million. The net proceeds from sales of our common stock pursuant to the Prior ATM Equity Program were used to repay a portion of the revolver borrowings.

On November 9, 2023, we entered into an equity distribution agreement that was substantially identical to and replaced the prior equity distribution agreement, and pursuant to which we may sell, from time to time, up to an additional $900.0 million of our common shares through our ATM Equity Program (the “Current ATM Equity Program”). During the three and six months ended June 30, 2024 we did not sell any shares of our common stock under the Current ATM Equity Program.

Project Orion

In February 2023, we announced our transformation program “Project Orion” designed to drive future growth and achieve our long-term strategic objectives, through investment in our technology systems and business processes across our global platform. The project includes the implementation of a new, best-in-class, cloud-based enterprise resource planning (“ERP”) software system. The primary goals of this project are to streamline standard processes, reduce manual work and incrementally improve our business analytics capabilities. Highlights of the project include implementing centralized customer billing operations, a global payroll and human capital management platform, next-generation warehouse maintenance capabilities, global procurement functionality and shared-service operations in certain international regions, among others. We expect the benefits of these initiatives to include revenue and margin improvements through pricing data and analytics and heightened customer contract governance, finance and human resources cost reductions, information technology applications and infrastructure rationalization, reduced employee turnover, working capital efficiency and reduced IT maintenance capital expenditures. The activities associated with Project Orion are expected to be substantially complete within three years from the project’s start date. Since inception, the Company has incurred $107.3 million of implementation costs related to Project Orion of which $69.4 million has been deferred within “Other assets” on the Condensed Consolidated Balance Sheets as of June 30, 2024.

During the three months ended June 30, 2024, the Company deployed the first phase of Project Orion. The implementation costs deferred within “Other assets” on the Condensed Consolidated Balance Sheets are now being amortized through “Selling, general, and administrative” expense on the Condensed Consolidated Statements of Operations. The useful lives of the Company’s internal-use software and capitalized cloud computing implementation costs are generally three tofive years. However, the useful lives of major information system installations such as implementations of ERP systems and certain related software are determined on an individual basis and may exceed five years depending on the estimated period of use. The Company has determined the useful life of the new ERP system to beten years and is amortizing the costs associated with the ERP implementation over such period. The amortization expense recognized during the three and six months ended June 30, 2024 related to the Project Orion ERP implementation was not material.

For further information regarding Project Orion, refer to the Consolidated Financial Statements included in our 2023 Annual Report on Form 10-K as filed with the SEC.

Cybersecurity Incident

On April 26, 2023, the Company became aware of a cybersecurity incident impacting a certain number of our systems and partially impacting operations for a limited period of time (the “Cyber Incident”). The Company engaged an external cyber security expert to initiate responses to contain and remediate the incident, and commence a forensic investigation. Actions taken included preventative measures such as shutting down certain operating systems, supplementing existing security monitoring with additional scanning and other protective measures. The Company also notified law enforcement and its customers, informing them of both the incident and management’s efforts to minimize its impact on the Company’s daily operations. Technology information systems were reintroduced in a controlled phased approach and all locations successfully resumed operations at pre-cyberattack levels by June 30, 2023.

The Company engaged a leading cybersecurity defense firm that completed a forensic investigation of the incident and provided recommended actions in response to the findings. As of December 31, 2023, the Company completed many of the recommended remediation activities associated with the Cyber Incident and continues to enhance its policies and procedures meant to assess, identify, and effectively manage cybersecurity risks, threats, and incidents.

Incremental charges recorded in conjunction with remediation and response efforts associated with the Cyber Incident have been recorded within “Acquisition, cyber incident, and other, net” in the Condensed Consolidated Statements of Operations. This amount was primarily comprised of incremental internal labor costs, professional fees, customer claims, and related insurance deductibles.

Foreign Currency Related Transactions

Exchange rate adjustments resulting from foreign currency transactions are recognized in “Net loss”, whereas effects resulting from the translation of financial statements are recognized in “Unrealized net (loss) gain on foreign currency” in the Condensed Consolidated Statements of Comprehensive (Loss) Income. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into U.S. dollars using period-end exchange rates and income statement accounts are translated at weighted average exchange rates.

For the three months ended June 30, 2024 and June 30, 2023, respectively, the amount of foreign currency remeasurement recognized on the Condensed Consolidated Statements of Operations within “Other, net” was a gain of $11.3 million and a loss of $0.2 million. For the six months ended June 30, 2024 and June 30, 2023, respectively, the amount of foreign currency remeasurement recognized on the Condensed Consolidated Statements of Operations was a gain of $10.9 million and $0.2 million. The amount recognized for the three and six months ended June 30, 2024 includes an adjustment related to our net investment hedges further described in Note 5 - Derivative Financial Instruments to these Condensed Consolidated Financial Statements.

For the three months ended June 30, 2024 and June 30, 2023, respectively, the amount of foreign currency translation recognized within the the Condensed Consolidated Statements of Comprehensive Income (Loss) within “Unrealized net (loss) gain on foreign currency” was a loss of $10.6 million and a gain of $6.1 million. For the six months ended June 30, 2024 and June 30, 2023, respectively, the amount of foreign currency translation recognized on the Condensed Consolidated Statements of Comprehensive Income (Loss) was a loss of $11.2 million and a gain of $6.3 million.

Loss on Debt Extinguishment

During the three months ended March 31, 2024, the Company purchasedtwo facilities that were previously accounted for as failed sale-leaseback financing obligations for total consideration of $20.5 million. During the three months ended June 30, 2024, the Company purchased the remaining nine facilities in the Company’s lease portfolio with a lessor that were previously accounted for as failed sale-leaseback financing obligations for total consideration of $170.5 million. Total cash outflows related to these purchases of $191.0 million are included within “Termination of sale-leaseback financing obligations” on the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2024.

These purchases resulted in the recognition of a $110.4 million and $115.1 million loss on debt extinguishment during the three and six months ended June 30, 2024, respectively. These amounts are recognized within “Loss on debt extinguishment and termination of derivative instruments” on the Condensed Consolidated Statement of Operations included herein.

Recent Rules and Accounting Pronouncements

In March 2024, the Securities and Exchange Commission (the “SEC”) adopted the final rules that will require certain climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges. The new rules include a requirement to disclose material climate-related risks, descriptions of board oversight and risk management activities, the material impacts of these risks on a registrants’ strategy, business model and outlook, and any material climate-related targets or goals, as well as material effects of severe weather events and other natural conditions and greenhouse gas emissions. Prior to the stay in the new rules, they would have been effective for annual periods beginning January 1, 2025, except for the greenhouse gas emissions disclosure which would have been effective for annual periods beginning January 1, 2026. The Company is currently evaluating the impact of these rules on its disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the

Company prospectively to all annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which enhances the disclosures required for operating segments in the Company's annual and interim consolidated financial statements. ASU 2023-07 is effective retrospectively for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.

All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

2. Acquisitions & Discontinued Operations

Purchase of Comfrio Joint Venture

During 2020, the Company acquired 22% of equity ownership in Agrofundo Brazil II Fundode Investimento em Participações or the “Comfrio” joint venture. The joint venture agreement included a fair value call/put option that allowed the remaining 78% interest in Comfrio to be either purchased by or sold to the Company through either the exercise of the Company’s call option or the exercise of the general partner’s put option. Once the exercise of the put was deemed probable, the Company remeasured its equity interest, which was deemed to be nominal, and the fair value of the put option, which resulted in a loss of $56.6 million recognized within “Loss on put option” in our Condensed Consolidated Statement of Operations. The fair value of the put option was determined using inputs classified as Level 3 within the fair value hierarchy. In April 2023, thetwo parties received regulatory approval from the Brazilian government, and the acquisition closed on May 30, 2023.

Upon acquisition, the Company committed to a plan to sell Comfrio in its present condition and initiated a program to locate a buyer and complete the disposition. In August 2023, the Company sold the assets and liabilities of Comfrio. The Comfrio acquisition and disposition are further described in Note 3 - Business Combinations and Asset Acquisitions to the Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K as filed with the SEC.

The primary components of “Net loss from discontinued operations” in our Condensed Consolidated Statement of Operations during the three and six months ended June 30, 2024 and 2023 are included in the table below (in thousands):

During the fourth quarter of 2022, the Company entered into a loan agreement with Comfrio, in which Comfrio borrowed $25.0 million from Americold at a 10% annual fixed interest rate. During the three months ended June 30, 2023, the Company fully impaired the remaining balance and recognized the entire loss within “Impairment of related party loan receivable” in our Condensed Consolidated Statement of Operations.

Sale of Outstanding Minority Ownership in LATAM JV

On May 30, 2023, the Company sold its 15% equity interest to our JV partner for total proceeds of $36.9 million and recognized a corresponding gain of $0.3 million in “Other income (expense),” in our Condensed Consolidated Statement of Operations.

3. Acquisition, cyber incident and other, net

The components of the charges and credits included in “Acquisition, cyber incident, and other, net” in our Condensed Consolidated Statements of Operations are as follows (in thousands):

Project Orion expenses represent the non-capitalizable portion of our Project Orion costs incurred during thethree and sixmonths ended June 30, 2024 and 2023. Project Orion is an investment in and transformation of our technology systems, business processes and customer solutions. The first phase of the project was deployed during the three months ended June 2024. See Note 1 - General to the Condensed Consolidated Financial Statements herein for further details on the overall project description and related amortization of deferred costs.

Acquisition related costs include costs associated with business transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees. We also include integration costs pre- and post-acquisition that reflect work being performed to facilitate merger and acquisition integration, such as work associated with information systems and other projects including spending to support future acquisitions, and primarily consist of professional services. We consider acquisition related costs to be corporate costs regardless of the segment or segments involved in the transaction.

Severance costs represent certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies in Europe and reduction in workforce costs associated with exiting or selling non-strategic warehouses or businesses.

Cyber incident related costs, net of insurance recoveries, represents the receipt of business interruption insurance proceeds and incremental costs associated with the Cyber Incident which is further described in Note 1 - General to the Condensed Consolidated Financial Statements herein.

4. Debt

The following table reflects a summary of our outstanding indebtedness as of June 30, 2024 and December 31, 2023 (in thousands):

The following table provides the details of our Senior Unsecured Notes (in thousands):

The following table provides the details of our Senior Unsecured Term Loans (in thousands):

(1) SOFR = one-month Adjusted Term SOFR; CDOR = one-month CDOR; CORRA = daily adjusted CORRA. Tranche A-1 and Tranche A-3 SOFR includes an adjustment of 0.10%, in addition to the margin. Tranche A-2 CORRA includes and adjustment of 0.30%, in addition to the margin. Refer to Note 5 - Derivative Financial Instruments for details of the related interest rate swaps.

The following table provides the details of our Senior Unsecured Revolving Credit Facility (in thousands):

(1) SOFR = daily adjusted SOFR; CDOR = one-month CDOR; CORRA = daily adjusted CORRA; EURIBOR = one-month Euro Interbank Offered Rate (EURIBOR); SONIA = Adjusted Sterling Overnight Interbank Average Rate; BBSW = Bank Bill Swap Rate; BKBM = Bank Bill Reference Rate. We have elected Daily SOFR for the entirety of our U.S. dollar denominated borrowings shown above, which includes an adjustment of 0.10%, in addition to the margin. Our British pound sterling borrowings bore interest tied to adjusted SONIA, which included an adjustment of 0.03% in addition to our margin. Our Canadian dollar borrowings bore interest tied to daily adjusted CORRA, which included an adjustment of 0.30% in addition to our margin.

Refer to Note 9 - Debt of the Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K as filed with the SEC for further details of our outstanding indebtedness. As of June 30, 2024, we were in compliance with all debt covenants.

5. Derivative Financial Instruments

Designated Non-derivative Financial Instruments

As of June 30, 2024, the Company design ated A$197.0 million and€820.5 million of debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. As of December 31, 2023, the Company designated£78.0 million, A$191.0 million and€817.5 million debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. The remeasurement of these instruments is recorded in “Change in unrealized net (loss) gain on foreign currency” on the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).

The Company determined that its previous designation of £78.0 million of debt and accrued interest as a hedge of its net investment in its United Kingdom-based subsidiary did not qualify for hedge accounting, and the cumulative foreign exchange gain associated with this transaction of $10.4 million has been recorded as a gain on foreign exchange within “Other, net” on the Condensed Consolidated Statements of Operations for the three and six months period ended June 30, 2024. The Company has determined that the impacts of this adjustment are immaterial to the current and prior period interim and annual financial statements and disclosures. Furthermore, the Company fully paid off the balance of this revolving debt during the three months ended June 30, 2024.

Derivative Financial Instruments

The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company periodically enters into interest rate swap agreements. These agreements involve the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective swap agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in interest rates.

The following table includes the key provisions of the interest rate swaps outstanding as of June 30, 2024 and December 31, 2023 (fair value in thousands):

In addition, the Company is subject to volatility in foreign exchange rates due to its foreign-currency denominated intercompany loan. The Company implemented a cross-currency swap to manage the foreign currency exchange rate risk on its intercompany loan. This agreement effectively mitigates the Company’s exposure to fluctuations in cash flows due to foreign exchange rate risk. This agreement involves the receipt of fixed USD amounts in exchange for payment of fixed Australian Dollar amounts over the life of the intercompany loan. The entirety of the Company’s outstanding intercompany loan receivable balance of A$153.5 million was hedged under the cross-currency swap agreement at June 30, 2024 and December 31, 2023.

There have been no significant changes to our policy or strategy related to derivative financial instruments from what was disclosed in our 2023 Annual Report on Form 10-K. During the next twelve months, the Company estimates that an additional$0.3 million will be reclassified as a decrease to “Foreign currency exchange loss”(a component of “Other, net” on the Condensed Consolidated Statements of Operations)and an additional$12.9 million will be reclassified as a decrease to “Interest expense” and a corresponding increase to operating cash flows. Additionally, during the current year, the Company estimates that an additional $0.2 million will be reclassified as an increase to “Loss on debt extinguishment and termination of derivative instruments”.

The Company determines the fair value of its derivative instruments using a present value calculation with significant observable inputs classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the accompanying Condensed Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Condensed Consolidated Balance Sheets within “Accounts payable and accrued expenses”.

The following table presents the fair value of the derivative financial instruments as of June 30, 2024 and December 31, 2023 (in thousands):

The following tables present the effect of the Company’s derivative financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023, including the impacts to Accumulated Other Comprehensive (Loss) Income (AOCI) (in thousands):

(1) In conjunction with the termination of interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. During the three months ended June 30, 2024, the Company recorded an increase to “Loss on debt extinguishment and termination of derivative instruments” related to this transaction.

(1) In conjunction with the termination of interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. During the six months ended June 30, 2024, the Company recorded an increase to “Loss on debt extinguishment and termination of derivative instruments” related to this transaction.

In 2020, the Company terminated thetwo interest rate swaps related to the 2020 Senior Unsecured Credit Facility for a fee of $16.4 million, of which $8.7 million was recorded in “Accumulated other comprehensive loss” and is being amortized to “Loss on debt extinguishment and termination of derivative instruments” through 2024. The Company’s derivatives are subject to master netting agreements, but there was no impact of offsetting as of June 30, 2024 and December 31, 2023.

As of June 30, 2024 and December 31, 2023, the Company has not posted any collateral related to these agreements. The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness.

6. Fair Value Measurements

As of June 30, 2024 and December 31, 2023, the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and revolving line of credit approximate their fair values due to the short-term nature of maturities or variable rates of interest on the instruments.

The Company’s assets and liabilities measured or disclosed at fair value are as follows (in thousands):

7. Income Taxes

The Company’s effective tax rate for the three and six months ended June 30, 2024 and 2023 varies from the statutory U.S. federal income tax rate primarily due to the Company being designated as a REIT that is generally treated as a non-tax paying entity. During the three and six months ended June 30, 2024 and 2023, the effective tax rate was impacted by the blend of pre-tax book income and losses generated year over year by jurisdiction.

The international tax framework (“Pillar 2”) created by the Organization for Economic Co-operation and Development includes a global minimum tax of 15 percent. Legislation adopting these provisions has been enacted in certain jurisdictions where the Company operates and is effective for the Company's 2024 calendar year. The Company has concluded that the legislation does not have a material impact on the Company’s income tax expense.

8. Commitments and Contingencies

April 2023 Cyber Incident

As a result of the Cyber Incident referenced in Note 1-General to the Condensed Consolidated Financial Statements, the Company has received claims for reimbursement from a number of customers pursuant to the terms of the contracts between each of those customers and the Company. As of June 30, 2024, the Company maintains an accrual of $5.2 million. This represents management’s best estimate of the amount of loss related to such claims based on its evaluation of the relevant contract terms and other relevant facts and circumstances.

Legal Proceedings

In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and its legal counsel evaluate the merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency suggests that a loss is probable, and the amount can be reasonably estimated, then a loss is recorded.

In addition to any matters discussed herein, the Company may be subject to litigation and claims arising from the ordinary course of business. In the opinion of management, after consultation with legal counsel, the outcome of such matters is not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows.

Environmental Matters

The Company is subject to a wide range of environmental laws and regulations in each of the locations in which the Company operates. Compliance with these requirements can involve significant capital and operating costs. Failure to comply with these requirements can result in civil or criminal fines or sanctions, claims for environmental damages, remediation obligations, the revocation of environmental permits, or restrictions on the Company’s operations.

The Company records accruals for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies. The Company adjusts these accruals periodically as assessment and remediation efforts progress or as additional technical or legal information become available. The Company had nominal amounts recorded as environmental liabilities in “Accounts payable and accrued expenses” as of June 30, 2024 and December 31, 2023 on the Condensed Consolidated Balance Sheets. Most of the Company’s warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the Environmental Protection Agency, and an accident or significant release of ammonia from a warehouse could result in injuries, loss of life, and property damage. Future changes in applicable environmental laws or regulations, or in the interpretations of such laws and regulations, could negatively impact the Company. The Company believes it is in compliance with applicable environmental regulations in all material respects. Under various U.S. federal, state, and local environmental laws, a current or previous owner or operator of real estate may be liable for the entire cost of investigating, removing, and/or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the contamination. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for the entire clean-up cost. There were no material unrecorded contingent liabilities as of June 30, 2024 and December 31, 2023.

Occupational Safety and Health Act (OSHA)

The Company’s warehouses located in the U.S. are subject to regulation under OSHA, which requires employers to provide employees with an environment free from hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, and unsanitary conditions. The cost of complying with OSHA and similar laws enacted by states and other jurisdictions in which we operate can be substantial, and any failure to comply with these regulations could expose us to substantial penalties and potentially to liabilities to employees who may be injured at our warehouses. The Company records accruals for OSHA matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The Company believes that it is in substantial compliance with all OSHA regulations and that no material unrecorded contingent liabilities exist as of June 30, 2024 and December 31, 2023.

9. Accumulated Other Comprehensive Income (Loss)

The Company reports activity in AOCI for foreign currency translation adjustments, including the translation adjustment for investments in partially owned entities, unrealized gains and losses on designated derivatives, and minimum pension liability adjustments (net of tax). The activity in AOCI for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

10. Segment Information

Our principal operations are organized into three reportable segments: Warehouse, Transportation and Third-party Managed. Our reportable segments are strategic business units separated by service offerings. Each reportable segment is managed separately and requires different operational and marketing strategies.

Our chief operating decision maker uses revenues and segment contribution to evaluate segment performance. We calculate segment contribution as earnings before interest expense, taxes, depreciation and amortization, and excluding corporate selling, general and administrative expense, acquisition, cyber incident and other expense, impairment of long-lived assets, gain or loss on sale of real estate and all components of non-operating other income and expense. Selling, general and administrative functions support all the business segments. Therefore, the related expense is not allocated to segments as the chief operating decision maker does not use it to evaluate segment performance.

Segment contribution is not a measurement of financial performance under U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Therefore, segment contribution should not be considered an alternative to operating income determined in accordance with U.S. GAAP.

The following table presents segment revenues and contributions with a reconciliation to Net loss from continuing operations before income taxes for the three and six months ended June 30, 2024 and 2023 (in thousands):

11. Loss per Common Share

Basic loss per share and Diluted loss per share are calculated by dividing the Net loss attributable to common stockholders by the basic and diluted weighted-average number of common shares outstanding in the period, respectively, using the allocation method prescribed by the two-class method. The Company applies this method to compute earnings per share because it distributes non-forfeitable dividend equivalents on restricted stock units and Operating Partnership units (“OP units”) granted to certain employees and non-employee directors who have the right to participate in the distribution of common dividends while the restricted stock units and OP units are unvested.

A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

For the three and six months ended June 30, 2024 and June 30, 2023, respectively, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net loss for such periods. Consequently, the Company did not have any adjustments between basic and diluted loss per share related to stock-based awards for those periods.

The table below presents the number of antidilutive potential common shares that are not considered in the calculation of diluted loss per share (in thousands):

12. Revenue from Contracts with Customers

Disaggregated Revenue

The following tables represent a disaggregation of revenue from contracts with customers for the three and six months ended June 30, 2024 and 2023 within the segments and geographic region (in thousands):

(1)Revenues are within the scope of ASC 606, Revenue From Contracts with Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.

(2)Revenues are within the scope of ASC 842, Leases.

(1)Revenues are within the scope of ASC 606, Revenue From Contracts with Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.

(2)Revenues are within the scope of ASC 842, Leases.

Performance Obligations

Substantially all our revenue for warehouse storage and handling services, and management and incentive fees earned under third-party managed and other contracts is recognized over time as the customer benefits equally throughout the period until the contractual term expires. Typically, revenue is recognized over time using an output measure (e.g. passage of time). Revenue is recognized at a point in time upon delivery when the customer typically obtains control, for most accessorial services, transportation services and reimbursed costs.

For arrangements containing non-cancellable contract terms, any variable consideration related to storage renewals or incremental handling charges above stated minimums are 100% constrained and not included in the aggregate amount of the transaction price allocated to the unsatisfied performance obligations disclosed below, given the degree in difficulty in estimation. Payment terms are generally 0-30 days upon billing, which is typically monthly, either in advance or subsequent to the performance of services. The same payment terms typically apply for arrangements containing variable consideration.

The Company has no material warranties or obligations for allowances, refunds or other similar obligations.

As of June 30, 2024, the Company had $1.4 billion of remaining unsatisfied performance obligations from contracts with customers subject to a non-cancellable term and within contracts that have an original expected duration exceeding one year. These obligations also do not include variable consideration beyond the non-cancellable term, which due to the inability to quantify by estimate, is fully constrained. The Company expects to recognize approximately 12.0% of these remaining performance obligations as revenue in 2024, and the remaining 88.0% to be recognized over a weighted average period of 15.7 years through 2042.

Contract Balances

The timing of revenue recognition, billings and cash collections results in accounts receivable (contract assets), and unearned revenue (contract liabilities) on the accompanying Condensed Consolidated Balance Sheets. Generally, billing occurs monthly, subsequent to revenue recognition, resulting in contract assets. However, the Company may bill and receive advances or deposits from customers, particularly on storage and handling services, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the accompanying Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the three and six months ended June 30, 2024, were not materially impacted by any other factors.

Receivable balances related to contracts with customers accounted for under ASC 606 were $424.5 million and $420.2 million million as of June 30, 2024 and December 31, 2023, respectively. All other trade receivable balances relate to contracts accounted for under ASC 842.

Balances in unearned revenue related to contracts with customers were $27.3 million and $28.4 million as of June 30, 2024 and December 31, 2023, respectively. Substantially all revenue that was included in the contract liability balances at the beginning of 2023 has been recognized as of June 30, 2024, and represents revenue from the satisfaction of monthly storage and handling services with average customer inventory turns of approximately 30 days.