AMERICOLD REALTY TRUST
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
COLD$16.01+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001628280-24-022615
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001628280-24-036111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 212 previous paragraphs and 272 current paragraphs.
129 unchanged; 64 reworded; 58 added; 19 removed; 0 previous and 21 current paragraphs rearranged.
Tables are not compared: 20 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (58)
Current report
Key Factors Affecting Our Business and Financial Results
Current report
Cybersecurity Incident
Current report
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.
Current report
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.
Current report
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.
Current report
Sale of outstanding minority ownership in LATAM JV
Current report
On May 31, 2022, we formed a joint venture, Americold LATAM Holdings Ltd (the “LATAM JV”), with Cold LATAM Limited (our “JV partner”). We contributed our Chilean business upon formation of the joint venture and retained the remaining 15% equity interests in the joint venture. The Company recorded an initial fair value of $37.0 million within “Investments in partially owned entities and other” on the Condensed Consolidated Balance Sheets. On May 30, 2023, our outstanding minority ownership was sold for proceeds of $36.9 million and a gain of $0.3 million.
Current report
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 to five 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 be ten 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.
Current report
Loss on Debt Extinguishment
Current report
During the three months ended March 31, 2024, the Company purchased two 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.
Current report
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.
Current report
Impairment of related party loan receivable represents impairment charges associated with the loan issued to the Comfrio joint venture.
Current report
Loss on put option represents the fair value of put option associated with the Comfrio joint venture.
Current report
Same store warehouse services revenue increased $30.0 million on a constant currency basis, primarily due to our pricing initiatives and rate escalations. Specifically, our constant currency same store services revenues per throughput pallet increased 12.0% during the three month period ending June 30, 2024 as compared to the same period of the prior year. This was partially offset by a decrease in throughput of 1.8% related to a decline in end-consumer demand and spending primarily due to the impact of inflation on the costs of food.
Current report
On a constant currency basis, third-party managed revenues decreased $0.4 million, or 3.4%, as compared to the same period in the prior year.
Current report
On a constant currency basis, third-party managed cost of operations decreased $1.1 million, or 12.0%, as compared to the same period in the prior year.
Current report
On a constant currency basis, third-party managed segment contribution (NOI) increased $0.7 million, or 51.6% as compared to the same period in the prior year. The improvement in margin is primarily due to operational and customer pricing improvements in Australia and certain North America locations. Additionally, the third party managed segment costs are largely passed to the consumer, thus the decline in overall costs associated with the wind down of previously exited sites aligns with the corresponding decline in segment revenues. Lastly, the Company ceased operations of a certain third party managed site during the three months ended June 30, 2024, however, the impact of this exit was not significant.
Current report
Interest expense. Interest expense decreased $3.3 million, or 8.9%, compared to the three months ended June 30, 2023. This was primarily due to lower average revolver borrowings. Additionally, our effective interest rate on our outstanding debt decreased from 4.21% for the three months ended June 30, 2023 to 4.16% for the three months ended June 30, 2024.
Current report
Impairment of related party loan receivable. Impairment of related party loan receivable was $22.0 million for the three months ended June 30, 2023. 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.
Current report
Loss on put option. Loss on put option was $56.6 million for the three months ended June 30, 2023, which represents the estimated loss we recognized when the exercise of the Comfrio put was deemed probable.
Current report
Other, net. Other, net was a benefit of $14.6 million for the three months ended June 30, 2024, an increase of $15.0 million, compared to an expenseof $0.4 million for the three months ended June 30, 2023. This is primarily due to an $11.4 million gain related to the removal of hedge designation for the Company’s British pound revolver further described in Note 5 - Derivative Financial Instruments to these Condensed Consolidated Financial Statements. Additionally, interest income increased as a result of a$0.7 million write-off of interest receivable on the Comfrio loan last year that was deemed uncollectible, with no similar transaction occurring in 2024.
Current report
Income tax benefit for the three months ended June 30, 2024 was $2.5 million, an increase of $3.0 million from an income tax expense of $0.5 million for the three months ended June 30, 2023. The increase is primarily the result of changes in the blend of pre-tax book income and losses generated year over year by jurisdiction.
Current report
Warehouse Segment
Current report
The following table presents the operating results of our warehouse segment for the six months ended June 30, 2024 and 2023.
Current report
(2)Includes real estate rent expense of $18.4 million and $18.9 million, on an actual basis, for the six months ended June 30, 2024 and 2023, respectively.
Current report
On a constant currency basis, our warehouse segment revenues increased $41.9 million, or 3.6%, during the six months ended June 30, 2024, compared to the same period in the prior year. This growth was driven by an increase of $34.7 million in our same store pool on a constant currency basis, and an increase of $7.3 million in our non same store pool, further discussed below.
Current report
On a constant currency basis, our warehouse segment cost of operations decreased $18.4 million, or 2.2%, during the six months ended June 30, 2024, compared to the same period in the prior year. The cost of operations for our same store pool decreased $18.0 million on a constant currency basis, for reasons further described below.
Current report
On a constant currency basis, warehouse segment NOI increased 17.4% from the six months ended June 30, 2023. The NOI for our same store pool increased $52.7 million, or 14.6%, on a constant currency basis, attributable to factors described below.
Current report
Same store services revenue increased $37.4 million on a constant currency basis, primarily due to our pricing initiatives and rate escalations. Specifically, our constant currency same store services revenue per throughput pallet increased 11.4% during the six months ended June 30, 2024 as compared to the same period in the prior year. This was partially offset by a decrease in throughput of 4.8% related to a decline in end-consumer demand and spending primarily due to the impact of inflation on the costs of food. .
Current report
Non-same store revenue increased by $7.3 million on a constant currency basis, due to recently completed expansion and developments, the Ormeau acquisition completed during the three months ended September 30, 2023, and the Safeway acquisition completed during the twelve months ended December 2023, partially offset by strategic exits of certain facilities. Non-same store costs of operations were flat during thesix months ended June 30, 2024 as compared to the same period in the prior year.
Current report
Transportation Segment
Current report
Third-Party Managed Segment
Current report
On a constant currency basis, third-party managed revenues decreased $3.1 million, or 12.9%, during the six months ended June 30, 2024, as compared to the same period in the prior year.
Current report
On a constant currency basis, third-party managed cost of operations decreased $4.9 million, or 23.3%, during the six months ended June 30, 2024 as compared to the same period in the prior year.
Current report
On a constant currency basis, third-party managed segment contribution (NOI) increased $1.9 million, or 75.8% as compared to the same period in the prior year. The improvement in margin is primarily due to customer pricing and operational improvements in Australia and certain North America locations. Additionally, the third party managed segment costs are largely passed to the consumer, thus the decline in overall costs associated with the wind down of previously exited sites aligns with the corresponding decline in segment revenues. Lastly, the Company ceased operations of a certain third party managed site during the three months ended June 30, 2024, however, the impact of this exit was not significant.
Current report
Other Consolidated Operating Expenses
Current report
Depreciation and amortization. Depreciation and amortization expense increased $11.8 million, or 7.0%, during the six months ended June 30, 2024 compared to the same period in the prior year. This increase was primarily due to the impact of our recently completed expansion and development projects.
Current report
Selling, general, and administrative. Corporate-level selling, general and administrative expenses increased $8.2 million, or 7.1%, during the six months ended June 30, 2024 compared to the same period in the prior year. This was primarily driven by an increase in routine legal and professional fees of $3.2 million and stock compensation expense of $1.1 million related to one time grants occurring in late 2023. This is offset by the ongoing efforts of cost reduction in response to the challenging economic environment.
Current report
Acquisition, cyber incident, and other, net. Corporate-level acquisition, cyber incident and other, net expenses include the following:
Current report
Acquisition, cyber incident and other, net. Corporate-level Acquisition, cyber incident and other, net was $18.0 million for the six months ended June 30, 2024, a decrease of $16.4 million compared to the six months ended June 30, 2023.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Removed paragraphs (19)
Previous report
Impairment of indefinite and long-lived assets represents charges represents the impairment of goodwill and other long lived assets whose values are considered unrecoverable.
Previous report
n/a - not applicable, the change in actual and constant currency metrics does not apply to site count.
Previous report
Same store handling revenue increased $7.5 million on a constant currency basis, primarily due to our pricing initiatives and rate escalations, partially offset by a decline in throughput as a result of consumer buying habits as a result of the current market environment.
Previous report
Same store storage revenue decreased $2.6 million on a constant currency basis, primarily due to a decline in economic occupancy from lower physically occupied positions, partially offset by an increase in fixed commitments.
Previous report
Non-same store revenue increased $7.2 million on a constant currency basis, due to recently completed expansion and development projects, as well as completed acquisitions, including the Ormeau, Australia acquisition during July of 2023, and the Safeway acquisition during October 2023.
Previous report
n/r - not relevant
Previous report
On a constant currency basis, our same store rent and storage revenues per occupied pallet increased 3.9% during the three month period ending March 31, 2024 as compared to the same period of the prior year. This is primarily due contractual rate escalations.
Previous report
Throughput pallets for our same store pool decreased 7.6% during the three months ended March 31, 2024 as compared to the same period in the prior year. This decrease was related to a decline in end-consumer demand due to the broader economic slowdown.
Previous report
On a constant currency basis, our same store services revenue per throughput pallet increased 10.8% during the three months ended March 31, 2024 as compared to the same period in the prior year primarily due tocontractual rate escalations.
Previous report
On a constant currency basis, the transportation segment margin increased 309 basis points during the three months ended March 31, 2024, compared to the same period in the prior year. The increase in margin was primarily due to the strategic transition of transportation in the UK business previously mentioned above.
Previous report
Third-party managed revenues are $10.4 million for the three months ended March 31, 2024, a decrease of $2.9 million or 22.0% compared to $13.4 million for the same period in the prior year. On a constant currency basis, third-party managed revenues were $10.6 million a decrease of $2.7 million, or 20.3%, during the three months ended March 31, 2024 as compared to the same period in the prior year.
Previous report
Third-party managed cost of operations is $8.2 million for the three months ended March 31, 2024, a decrease of $4.0 million or 32.9% compared to $12.3 million for the same period in the prior year. On a constant currency basis, third-party managed cost of operations were $8.4 million, a decrease of $3.9 million, or 31.5%, during the three months ended March 31, 2024 as compared to the same period in the prior year.
Previous report
The decrease in third-party managed revenues and cost of operations is due to the previous exit and continued wind down of operations of our historically largest domestic customer in this segment.
Previous report
Third-party managed segment contribution (NOI) is $2.2 million for the three months ended March 31, 2024, an increase of $1.1 million or 102.3% compared to $1.1 million for the same period in the prior year. On a constant currency basis, third-party managed segment contribution (NOI) was $2.2 million for the three months ended March 31, 2024, an increase of $1.2 million, or 107.2% as compared to the same period in the prior year. The improvement in margin is primarily due to operational improvements in Australia and certain North America locations.
Previous report
Severance costs increased by $0.4 million, or 12.3%, mainly due to realignment of certain international operations.
Previous report
Acquisition and integration related costs decreased by $0.8 million or 43.7%, due to less integration related expenses and professional fees from lower acquisition activity.
Previous report
Other costs decreased by $0.4 million related to a litigation adjustment.
Previous report
Interest expense. Interest expense was $33.4 million for the three months ended March 31, 2024, a decrease of $1.0 million, or 2.9%, compared to $34.4 million for the three months ended March 31, 2023. Our effective interest rate on our outstanding debt decreased from 4.1% in the first quarter of 2023 to 4.0% in the first quarter of 2024, primarily due to a favorable rate received at expiration of a portion of our Unsecured Term Loans, as well as lower average outstanding borrowings, and further benefiting from the impact of our interest rate hedge instruments.
Previous report
Loss from discontinued operations, net of tax. Loss from discontinued operations, net of tax was zero for the three months ended March 31, 2024, a decrease of $2.4 million, or 100.0%, compared to $2.4 million for the three months ended March 31, 2023. This is primarily due to our share of losses from the Comfrio joint venture prior to disposition during the three months ended June 30, 2023.
Reworded paragraphs (64)
Previous wording
We are a global leader in temperature-controlled storage, logistics, real estate and value added services, and are focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. Our self-administered and self-managed REIT operates 241 warehouses globally, totaling around 1.5 billion cubic feet, with 196 in North America, 25 in Europe, 18 in Asia-Pacific, and 2 in South America as of March 31, 2024.
Current wording
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, totaling approximately 1.4 billion cubic feet,with 195 in North America, 25 in Europe, 17 in Asia-Pacific, and 2 in South America as of June 30, 2024.
Previous wording
Our business includes three primary business segments: warehouse, transportation and third-party managed, and we have minority interests in joint ventures, SuperFrio (operates 35 temperature-controlled warehouses in Brazil), and RSA JV (operates two temperature-controlled warehouses in Dubai).
Current wording
Our business includes three primary business segments: warehouse, transportation and third-party managed. We have minority interests in two joint ventures: SuperFrio (operates 35 temperature-controlled warehouses in Brazil), and RSA (operates 2 temperature-controlled warehouses in Dubai).
Previous wording
To reduce facility costs we have invested in energy efficiency projects, including LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives, third party efficiency reviews, real-time energy consumption monitoring, rapid open and close doors, and alternative-power generation technologies. We have also fine tuned our refrigeration systems, implemented energy management practices, and increased our participation in Power Demand Response programs with some of our power suppliers. These initiatives have allowed us to reduce our consumption of kilowatt hours and energy spend.
Current wording
To reduce facility costs, we have invested in energy efficiency projects, including LED lighting, thermal and solar energy storage, motion-sensor technology, variable frequency drives, third party efficiency reviews, real-time energy consumption monitoring, rapid open and close doors, and alternative-power generation technologies. We have also fine tuned our refrigeration systems, implemented energy management practices, and increased our participation in Power Demand Response programs with some of our power suppliers. These initiatives have allowed us to reduce our consumption of kilowatt hours and energy spend.
Previous wording
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. Since going public in 2018, we have acquired over 100 facilities, or approximately 40.0% of our total warehouse facility network. Project Orion will enable us to better integrate many of these recent acquisitions and position us well for the integration of future acquisitions. 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. Since inception, the Company has incurred $84.1 million of implementation costs related to Project Orion of which $59.4 million has been deferred within Other Assets on the Condensed Consolidated Balance Sheet as of March 31, 2024.
Current wording
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 system100 facilities, or approximately 40%. 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.
Previous wording
For further information regarding Project Orion, refer to our Consolidated Financial Statements included in our 2023 Annual Report on Form 10-K as filed with the SEC.
Current wording
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.
Previous wording
The following table shows a comparison of underlying spot and average exchange rates for the three month periods ending March 31, 2024 and 2023. Amounts presented in constant currency within our results of operations are calculated by applying the average foreign exchange rate from the comparable prior year period to actual local currency results in the current period. While constant currency metrics are a non-GAAP calculation and do not represent actual results, the comparison allows the reader to understand the impact of operations excluding changes in foreign exchange rates. We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP.
Current wording
The following table shows a comparison of underlying spot and average exchange rates for the three and six month periods ending June 30, 2024 and 2023. Amounts presented in constant currency within our results of operations are calculated by applying the average foreign exchange rate from the comparable prior year period to actual local currency results in the current period. While constant currency metrics are a non-GAAP calculation and do not represent actual results, the comparison allows the reader to understand the impact of operations excluding changes in foreign exchange rates. We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP.
Previous wording
•Warehouse services operations NOI is calculated as warehouse services revenues less labor and other service costs.
Current wording
•Warehouse services contribution NOI is calculated as warehouse services revenues less labor and other service costs.
Previous wording
•Contribution NOI marginfor each of these operations is calculated as the applicable contribution (NOI) measure divided by the applicable revenue measure.
Current wording
•Contribution NOI marginfor each of these operations is calculated as the applicable NOI measure divided by the applicable revenue measure.
Previous wording
Beginning January of 2024, changes in ownership structure (e.g., purchase of a previously leased warehouse) will no longer result in a facility being excluded from the same store population, as management believes that actively managing its real estate is normal course of operations. Additionally, management will begin to classify new developments (both conventional and automated facilities) as a component of the same store pool once the facility is considered fully operational and both inbounding and outbounding product for at least twelve consecutive months prior to January 1 of the current calendar year. These changes reflect a better alignment of our disclosures with industry practices.
Current wording
Beginning in January of 2024, changes in ownership structure (e.g., purchase of a previously leased warehouse) no longer resulted in a facility being excluded from the same store population, as management believes that actively managing its real estate is normal course of operations. Additionally, management began to classify new developments (both conventional and automated facilities) as a component of the same store pool once the facility is considered fully operational and is both inbounding and outbounding product for at least twelve consecutive months prior to January 1 of the then current calendar year. These changes reflect a better alignment of our disclosures with industry practices.
Previous wording
(1) The non-same store facility count of 10 consists of: five sites in the expansion and development phase, two facilities that we purchased in 2023, one facility that requires capital investment in anticipation of repurposing, one leased facility expiring during the second quarter of 2024 which we have already ramped down operations ahead of expiration, and one site in which we have ceased operations and intend to lease to a third party.
Current wording
(1) The non-same store facility count consists of: five sites in the expansion and development phase, two facilities that we purchased in 2023, one facility that requires capital investment in anticipation of repurposing, and one site in which we have ceased operations and intend to lease to a third party.
Previous wording
Rent storage and warehouse costs of operations consist of labor, power, other facilities costs, and other service costs.
Current wording
Rent, storage, and warehouse services cost of operations consist of labor, power, other facilities costs, and other service costs.
Previous wording
The cost of power, also a significant cost of operations, fluctuates based on the price of power in the regions that our facilities operate and the required temperature zone or freezing required. We may, from time to time, hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts.
Current wording
The cost of power fluctuates based on the price of power in the regions that our facilities operate and the required temperature zone or freezing required. We may, from time to time, economically hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts.
Previous wording
Transportation services costs of operationsare primarily affected by third-party carrier costs, which are influenced by carrier factors like driver and equipment availability. In select markets, we use our drivers and assets, incurring costs like wages, fuel, tolls, insurance, and maintenance to operate these assets.
Current wording
Transportation services cost of operationsare primarily affected by third-party carrier costs, which are influenced by carrier factors like driver and equipment availability. In select markets, we use our drivers and assets, incurring costs like wages, fuel, tolls, insurance, and maintenance to operate these assets.
Previous wording
Third-Party managed services costs of operations, which are recognized on a pass through basis, primarily consist of labor charges similar to those described above as a component of the warehouse costs of operations.
Current wording
Third-party managed services cost of operations, which are recognized on a pass through basis, primarily consist of labor charges similar to those described above as a component of the warehouse costs of operations.
Previous wording
Loss (gain) from sale of real estate represents gains or losses recognized from the sale of Company owned real estate.
Current wording
Gain from sale of real estate represents gains recognized from the sale of Company owned real estate.
Previous wording
Loss on debt extinguishment, modifications, and termination of derivative instrumentsis representative of charges associated with debt extinguishments and modifications as well as the termination of derivative instruments.
Current wording
Loss on debt extinguishment and termination of derivative instrumentsis representative of charges associated with debt extinguishments and termination of derivative instruments.
Previous wording
Other, net primarily includes foreign currency remeasurement, interest income, gains and losses on asset disposals, and other miscellaneous items.
Current wording
Other, net primarily includes foreign currency remeasurement, interest income, gains and losses on asset disposals, certain legal settlements, and other miscellaneous items.
Previous wording
(2)Includes real estate rent expense of $9.2 million and $9.4 million, on an actual basis, for the first quarter of 2024 and 2023, respectively.
Current wording
(2)Includes real estate rent expense of $9.2 million and $9.5 million, on an actual basis, for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
(3)Includes non-real estate rent expense (equipment lease and rentals) of $3.5 million and $3.6 million, on an actual basis, for the first quarter of 2024 and 2023, respectively.
Current wording
(3)Includes non-real estate rent expense (equipment lease and rentals) of $3.0 million and $3.4 million, on an actual basis, for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
On a constant currency basis, our warehouse segment revenues increased $12.0 million, or 2.0%, as compared to the same period in the prior year. This growth was primarily driven by $4.9 million of growth in our same store pool and $7.2 million of growth in our non-same store pool, further discussed below.
Current wording
On a constant currency basis, our warehouse segment revenues increased $29.9 million, or 5.2%, compared to the same period in the prior year. This growth was primarily driven by $29.8 million of growth in our same store pool and $0.1 million of growth in our non-same store pool, further discussed below.
Previous wording
On a constant currency basis, our warehouse segment cost of operations decreased $13.1 million, or 3.1%, during the three months ended March 31, 2024, as compared to the same period of the prior year. This is primarily driven by a $13.8 million decrease in same store warehouse costs of operations, further discussed below.
Current wording
On a constant currency basis, our warehouse segment cost of operations decreased $5.3 million, or 1.3%, during the three months ended June 30, 2024, as compared to the same period of the prior year. This is primarily driven by a $4.2 million decrease in same store warehouse costs of operations, further discussed below.
Previous wording
On a constant currency basis, warehouse segment NOI increased 14.4% during the three months ended March 31, 2024, as compared to the same period of the prior year. This is primarily due to increased NOI in our same store portfolio of $18.7 million on a constant currency basis, attributable to factors described below.
Current wording
On a constant currency basis, warehouse segment NOI increased 20.4% during the three months ended June 30, 2024, as compared to the same period of the prior year. This is primarily due to increased NOI in our same store portfolio of $34.0 million on a constant currency basis, attributable to factors described below.
Previous wording
Economic occupancy for our same store pool was 80.9% for the three months ended March 31, 2024, a decrease of 352 basis points compared to the same period of the prior year. Economic occupancy decreased primarily due to our customers’ slow down in food production levels, which is impacted by the economic strains felt by the end-consumer resulting in basket sizes shrinking and less pantry stocking. Economic occupancy for our same store pool for the three months ended March 31, 2024 was 1,066 basis points higher than our corresponding average physical occupancy of 70.2%.
Current wording
Same store storage revenue was flat on a constant currency basis. This was primarily due to a decrease in economic occupancy of 526 bps. Economic occupancy decreased primarily due to our customers’ slow down in food production levels, which is impacted by the economic strains felt by the end-consumer resulting in basket sizes shrinking and less pantry stocking. This was partially offset by an increase in fixed committed contracts. Specifically, our constant currency same store rent and storage revenue per average economic occupied pallet increased 7.2% during the three months ended June 30, 2024 as compared to the same period in the prior year.
Previous wording
Transportation revenues are $56.9 million for the three months ended March 31, 2024, a decrease of $11.2 million or 16.5% compared to $68.1 million for the same period in the prior year. On a constant currency basis transportation revenues were $58.3 million, a decrease of $9.8 million, or 14.4%, during the three months ended March 31, 2024, compared to the same period in the prior year. The decrease was primarily due to the strategic transition of transportation business in the UK to a third party logistics model, and the softening of transportation demand in the general macro-environment.
Current wording
On a constant currency basis transportation revenues decreased $5.7 million, or 9.8%, compared to the same period in the prior year. The decrease was primarily due to the strategic transition of transportation business in the UK to a third party logistics model, the loss of a major customer in the United States during the three months ended June 30, 2024, and the softening of transportation demand in the general macro-environment.
Previous wording
Transportation cost of operations is $45.3 million for the three months ended March 31, 2024, a decrease of $11.1 million or 19.7% compared to $56.4 million for the same period in the prior year. On a constant currency basis transportation cost of operations was $46.5 million, a decrease of $9.9 million, or 17.6%, during the three months ended March 31, 2024, compared to the same period in the prior year. The decrease was due to the same factors contributing to the decline in revenue mentioned above.
Current wording
On a constant currency basis transportation cost of operations decreased $5.0 million, or 10.4%, compared to the same period in the prior year. The decrease was due to the same factors contributing to the decline in revenue mentioned above.
Previous wording
Transportation NOI is $11.5 million for the three months ended March 31, 2024, a decrease of $0.1 million or 1.2% compared to $11.7 million for the same period in the prior year. On a constant currency basis the transportation segment contribution NOI is $11.8 million an increase of 1.0% during the three months ended March 31, 2024, compared to the same period in the prior year due to the factors mentioned above.
Current wording
On a constant currency basis the transportation segment contribution NOI decreased $0.7 million or 6.9%, compared to the same period in the prior year due to the factors mentioned above.
Previous wording
Depreciation and amortization. Depreciation and amortization expense increased $7.1 million, or 8.3%, during the three months ended March 31, 2024 as compared to the same period in the prior year. This increase was primarily due to acquisitions, expansions and developments, partially offset by the favorable impact of foreign currency translation.
Current wording
Depreciation and amortization. Depreciation and amortization expense increased $4.8 million, or 5.6%, during the three months ended June 30, 2024 as compared to the same period in the prior year. This increase was primarily due to acquisitions, expansions and developments.
Previous wording
Selling, general and administrative. Corporate-level selling, general and administrative expenses increased $2.6 million, or 4.1%, compared to $62.9 million for the three months ended March 31, 2023. This was primarily driven by an increase in routine legal and professional fees.
Current wording
Selling, general, and administrative. Corporate-level selling, general and administrative expenses increased $5.7 million, or 10.5%, compared to $53.8 million for the three months ended June 30, 2023. This was primarily driven by an increase in routine legal and professional fees of $1.5 million and stock compensation expense of $1.3 million related to one time grants occurring in late 2023. This is offset by the ongoing efforts of cost reduction in response to the challenging economic environment.
Previous wording
Acquisition, cyber incident and other, net. Corporate-level acquisition, cyber incident and other, net was $15.0 million for the three months ended March 31, 2024, an increase of $7.9 million compared to the three months ended March 31, 2023. Project Orion expenses represent the non-capitalizable portion of our Project Orion costs, which is an investment in and transformation of our technology systems, business processes and customer solutions. The project includes the implementation of a new, best-in-class, cloud-based enterprise resource planning (“ERP”) software system. These costs have increased by $5.9 million primarily due to increased contract labor and ERP testing and implementation costs.
Current wording
Project Orion expenses represent the non-capitalizable portion of our Project Orion costs, which is an investment in and transformation of our technology systems, business processes and customer solutions. The project includes the implementation of a new, best-in-class, cloud-based “ERP” software system. These costs have increased by $9.4 million primarily due to increased contract labor, professional fees, and other non-capitalizable implementation costs.
Previous wording
Cyber incident related costs, net of insurance recoveries increased by$2.7 million and is primarily related to incremental claims reserve expense, and professional and legal fees related to the 2023 Cyber incident further described in Note 2 - Acquisition, cyber incident and other, net and Note 7 - Commitments and Contingencies to these Condensed Consolidated Financial Statements.
Current wording
Cyber incident related costs, net of insurance recoveries decreased by $29.9 million primarily related to a $10.0 million payment received during thethree months ended June 30, 2024 for business interruption insurance. Costs for thethree months ended June 30, 2023 is comprised of incremental claim reserves, and professional and legal fees related to the 2023 Cyber incident further described in Note 1 - General to these Condensed Consolidated Financial Statements.
Previous wording
(Gain) loss from sale of real estate. For the three months ended March 31, 2024 we recorded a $3.5 million gain from the sale of real estate related to the strategic sale of a facility as we continually optimize our portfolio.
Current wording
Gain from sale of real estate. For the three months ended June 30, 2023 we recorded a $2.5 million gain from the sale of real estate related to the sale of a facility in Canada. The proceeds of the sale were used to repay outstanding Canadian-denominated Revolver short-term borrowings.
Previous wording
Loss on debt extinguishment and termination of derivative instruments. Loss on debt extinguishment and termination of derivative instruments was $5.2 million for the three months ended March 31, 2024, an increase of $4.6 million, compared to $0.5 million for the three months ended March 31, 2023. The increase was primarily due to the purchase of two failed sale-leaseback facilities, resulting in a loss on debt extinguishment of $4.7 million.
Current wording
Loss on debt extinguishment and termination of derivative instruments. Loss on debt extinguishment and termination of derivative instruments increased $110.1 million, compared to the three months ended June 30, 2023. The increase was primarily due to the purchase of nine failed sale-leaseback facilities, resulting in a loss on debt extinguishment of $110.4 million.
Previous wording
Loss from investments in partially owned entities. Loss from investments in partially owned entities was $0.9 million for the three months ended March 31, 2024, an increase of $0.3 million, or 46.5%, compared to $0.6 million for the three months ended March 31, 2023. This is primarily due to decreases in revenue from both ventures due to lower occupancy rates and loss of a customer.
Current wording
Loss from investments in partially owned entities. Loss from investments in partially owned entities increased $0.3 million, or 45.8%, compared to the three months ended June 30, 2023. This is primarily due to decreases in earnings from Superfrio due to lower occupancy rates and higher interest expense. This is also due to reduced revenues due to decreased occupancy.
Previous wording
Same store warehouse costs of operations decreased on a constant currency basis by $13.8 million primarily driven by lower labor, other service costs, and power expense. Labor costs decreased as a result of lower throughput volume resulting in less overtime and needed contract labor, in addition to labor efficiencies. Other service costs decreased from lower throughput volumes resulting in lower freight costs. Power expense decreased primarily due to higher cost per kilowatt-hour during the first quarter of 2023 resulting from the impact of the Ukraine conflict on our European operations, which have moderated compared to the prior year.
Current wording
Same store warehouse costs of operations decreased by $18.0 million on a constant currency basis, primarily driven by lower labor and other service costs. Labor costs decreased as a result of lower throughput volume of 4.8% resulting in less overtime and needed contract labor, in addition to labor efficiencies. Other service costs also decreased from lower throughput volumes of 4.8% resulting in lower freight costs. Power costs decreased primarily due to higher cost per kilowatt-hour during the three months ended March 31, 2023, resulting from the impact of the Ukraine conflict on our European operations, which have moderated compared to the prior year, partially offset by a slight increase during the three months ended June 30, 2024 due to ongoing inflation. Other facilities costs increased due to ongoing inflationary pressures.
Previous wording
Other, net. Other, net was a benefit of $9.5 million for the three months ended March 31, 2024, a increase of $8.1 million, compared to abenefit of $1.4 million for the three months ended March 31, 2023. This is primarily due to an $8.3 million settlement related to a representations and warranty claim related to a prior acquisition.
Current wording
Other, net. Other, net was a benefit of $24.1 million for the six months ended June 30, 2024, an increase of $23.1 million compared to a benefit of $1.0 million for the six months ended June 30, 2023. This is primarily due to an $11.4 million gain related to the removal of hedge designation for the Company’s British pound revolver, in addition to an$8.4 million settlement related to a representations and warranty claim related to a prior acquisition, both of which occurred during thesix months ended June 30, 2024.
Previous wording
Income tax expense for the three months ended March 31, 2024 was $2.0 million, an increase of $3.6 million from an income tax benefit of $1.6 million for the three months ended March 31, 2023. The change is primarily from improved operating results.
Current wording
Income tax benefit for the six months ended June 30, 2024 was $0.5 million, compared to an income tax benefit of $1.2 million for the six months ended June 30, 2023. The change is primarily from improved operating results from foreign operations.
Previous wording
We use the following non-GAAP financial measures as supplemental performance measures of our business: NAREIT FFO, Core FFO, Adjusted FFO, NAREIT EBITDAre, Core EBITDA and net debt to pro-forma Core EBITDA.
Current wording
We use the following non-GAAP financial measures as supplemental performance measures of our business: NAREIT FFO, Core FFO, Adjusted FFO, NAREIT EBITDAre, and Core EBITDA all of which are further defined below. Additionally we use NOI, Constant Currency metrics and Same Store metrics further described above.
Previous wording
We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S. GAAP and gains or losses from sales of previously depreciated operating real estate and other assets, plus specified non-cash items, such as real estate asset depreciation and amortization impairment charge on real estate related assets and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs.
Current wording
We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S. GAAP and gains or losses from sales of previously depreciated operating real estate and other assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs.
Previous wording
We calculate core funds from operations, or Core FFO, as NAREIT FFO adjusted for the effects of gain or loss on the sale of non-real estate assets; Acquisition, cyber incident and other, net; goodwill impairment (when applicable); loss on debt extinguishment; modifications and termination of derivative instruments; foreign currency exchange losses; and gain on legal settlements related to prior period operations. We also adjust Core FFO for our share of reconciling items for partially owned entities. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.
Current wording
We calculate core funds from operations, or Core FFO, as NAREIT FFO adjusted for the effects of gain or loss on the sale of non-real estate assets; Acquisition, cyber incident, and other, net; Loss on debt extinguishment and termination of derivative instruments; Foreign exchange gain (loss); Gain on legal settlement related to prior period operations; Project Orion – Deferred Costs Amortization ; Gain on sale of LATAM joint venture; Net loss from discontinued operations; Impairment of related party loan receivable; and Loss on put option. We also adjust Core FFO for Our share of reconciling items related to partially owned entities. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.
Previous wording
We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of Amortization of deferred financing costs and pension withdrawal liability, Non-real estate asset impairment, Amortization of below/above market leases, Straight-line rental revenue adjustment, Deferred income taxes expense (benefit), Stock-based compensation, Non-real estate depreciation and amortization, and Maintenance capital expenditures. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.
Current wording
We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of Amortization of deferred financing costs and pension withdrawal liability, Amortization of below/above market leases, Straight-line rental revenue and expense adjustment, net, Deferred income taxes benefit, Stock-based compensation expense expense, Non-real estate depreciation and amortization, and Maintenance capital expenditures. We also adjust for AFFO attributable to Our share of reconciling items related to partially owned entities and discontinued operations. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (21)
Current report — wording carried from elsewhere
Same store warehouse costs of operations decreased on a constant currency basis by $4.2 million primarily driven by lower labor and other service costs. Labor costs decreased as a result of lower throughput volume resulting in less overtime and contracted labor, in addition to labor efficiencies. Other service costs decreased from lower throughput volumes resulting in lower costs incurred for the purchase of supplies and other variable overhead costs. This was partially offset by an increase in power and other facilities costs due to ongoing inflationary pressures.
Current report — wording carried from elsewhere
(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Current report — wording carried from elsewhere
Comparison of Results for the Six Months Ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Current report — wording carried from elsewhere
(3)Includes non-real estate rent expense (equipment lease and rentals) of $6.5 million and $7.1 million, on an actual basis, for the six months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Same Store and Non-Same Store Analysis
Current report — wording carried from elsewhere
The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Current report — wording carried from elsewhere
The following table provides certain operating metrics to explain the drivers of our same store and non-same store performance.
Current report — wording carried from elsewhere
Same store storage revenue decreased $2.8 million on a constant currency basis, primarily due to a decrease in economic occupancy of 437 bps. The economic occupancy decrease was primarily due to our customers’ slow down in food production levels, which is impacted by the economic strains felt by the end-consumer resulting in basket sizes shrinking and less pantry stocking. This decrease was partially offset by an increase in fixed commitments. Specifically, our constant currency same store rent and storage revenues per average economic occupied pallet increased 5.5% during the six months ended June 30, 2024 as compared to the same period in the prior year.
Current report — wording carried from elsewhere
The following table presents the operating results of our transportation segment for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Current report — wording carried from elsewhere
On a constant currency basis transportation revenues decreased $15.3 million, or 12.1%. The decrease was primarily due to the strategic transition of transportation business in the UK to a third party logistics model, and the softening of transportation demand in the general macro-environment.
Current report — wording carried from elsewhere
On a constant currency basis transportation cost of operations decreased $14.7 million, or 14.1%. The decrease was due to the same factors contributing to the decline in revenue mentioned above.
Current report — wording carried from elsewhere
On a constant currency basis the transportation segment contribution NOI decreased $0.6 million or 2.6%, compared to the same period in the prior year due to the factors mentioned above.
Current report — wording carried from elsewhere
The following table presents the operating results of our third-party managed segment for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Current report — wording carried from elsewhere
Project Orion expenses represent the non-capitalizable portion of our Project Orion costs, which is an investment in and transformation of our technology systems, business processes and customer solutions. The project includes the implementation of a new, best-in-class, cloud-based “ERP” software system. These costs have increased by
Current report — wording carried from elsewhere
The following table presents other items of other expense and income for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
Loss on debt extinguishment and termination of derivative instruments. Loss on debt extinguishment and termination of derivative instruments increased $114.7 million, compared to the six months ended June 30, 2023. The increase was primarily due to the purchase of eleven failed sale-leaseback facilities, resulting in a loss on debt extinguishment of $115.1 million.
Current report — wording carried from elsewhere
Consolidated Financial Statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.