AMERICOLD REALTY TRUST

Previous 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.

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 Company operates 239 warehouses globally, totaling approximately 1.4 billion cubic feet, with 195 in North America, 25 in Europe, 17 in Asia-Pacific, and two in South America as of September 30, 2024.

Previous 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).

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 two temperature-controlled warehouses in Dubai).

Previous 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.

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 rain water harvesting and energy management practices, as well as 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

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 wording

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 conduct 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.

Previous wording

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 wording

As noted above, 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. The Company has completed many of the recommended remediation activities associated with the Cyber Incident. We continue to enhance our policies and procedures meant to assess, identify, and effectively manage cybersecurity risks, threats, and incidents.

Previous wording

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 wording

Incremental charges recorded in conjunction with remediation and response efforts associated with the Cyber Incident have been recorded net of insurance recoveries 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.

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 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.

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 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 $138.3 million of implementation costs related to Project Orion, including expenses reported in “Acquisition, cyber incident, and other, net” on the Condensed Consolidated Statements of Operations and costs deferred in “Other assets”,on the Condensed Consolidated Balance Sheets. The unamortized balance of the Project Orion deferred costs was $76.0 million as of September 30, 2024.

Previous wording

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 wording

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 on a straight line basis over such period. The amortization expense recognized during the three and nine months ended September 30, 2024 related to the Project Orion ERP implementation was $1.8 million and $2.4 million, respectively.

Previous wording

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 wording

During the nine months ended September 30, 2024, the Company purchased eleven facilities in the Company’s lease portfolio that were previously accounted for as failed sale-leaseback financing obligations. 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 nine months ended September 30, 2024.

Previous wording

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 wording

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

Previous wording

We specialize in providing services to businesses within the food industry whose businesses are often seasonal or cyclical. On average the first and second quarter segment contributions are relatively consistent. On a portfolio-wide basis, physical occupancy rates are generally the lowest during May and June and gradually increase thereafter, due to annual harvests and our customers’ focus on building inventories for end-of-year holidays, which generally peak between mid-September and early December. The external temperature reaches annual peaks for a majority of our portfolio during the third and fourth quarter of the year resulting in increased power expenses.

Current wording

We specialize in providing services to businesses within the food industry whose businesses are often seasonal or cyclical. On average the first and second quarter segment contributions, as defined below, are relatively consistent. On a portfolio-wide basis, physical occupancy rates are generally the lowest during May and June and gradually increase thereafter, due to annual harvests and our customers’ focus on building inventories for end-of-year holidays, which generally peak between mid-September and early December. The external temperature reaches annual peaks for a majority of our portfolio during the third and fourth quarter of the year resulting in increased power expenses.

Previous 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.

Current wording

The following table shows a comparison of underlying spot and average exchange rates for the three and nine months ended September 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 segment contribution NOIis calculated as warehouse segment revenues less its cost of operations (excluding any depreciation and amortization, impairment charges, corporate-level selling, general and administrative expenses and corporate-level acquisition, cyber incident and other, net).

Current wording

•Warehouse segment contribution NOIis calculated as warehouse segment revenues less its cost of operations (excluding any Depreciation and amortization, impairment charges, corporate-level Selling, general, and administrative expenses, corporate-level Acquisition, cyber incident, and other, net, and Loss (gain) from sale of real estate).

Previous wording

We believe that same store metrics are key performance indicators commonly used in the real estate industry. Evaluating the performance of our real estate portfolio on a same store basis allows investors to evaluate performance in a way that is consistent period to period. We define our “same store” population once annually at the beginning of the current calendar year. Our population includes properties owned or leased for the entirety of two comparable periods with at least twelve consecutive months of normalized operations prior to January 1 of the current calendar year. We define “normalized operations” as properties that have been open for operation or lease, after development or significant modification (e.g., expansion or rehabilitation subsequent to a natural disaster). Acquired properties are included in the “same store” population if owned by us as of the first business day of the prior calendar year (e.g. January 1, 2023) and are still owned by us as of the end of the current reporting period, unless the property is under development. The “same store” pool is also adjusted to remove properties that were sold or entered development subsequent to the beginning of the current calendar year.

Current wording

We believe that same store metrics are key performance indicators commonly used in the real estate industry. Evaluating the performance of our real estate portfolio on a same store basis allows investors to evaluate performance in a way that is consistent period to period. We define our “same store” population once annually at the beginning of the current calendar year. Our population includes properties owned or leased for the entirety of two comparable periods with at least twelve consecutive months of normalized operations prior to January 1 of the current calendar year. We define “normalized operations” as properties that have been open for operation or lease, after development, expansion, or significant modification (e.g., rehabilitation subsequent to a natural disaster). Acquired properties are included in the “same store” population if owned by us as of the first business day of the prior calendar year (e.g. January 1, 2023) and are still owned by us as of the end of the current reporting period, unless the property is under development. The “same store” pool is also adjusted to remove properties that are being exited (e.g. non-renewal of warehouse lease or held for sale to third parties), were sold, or entered development subsequent to the beginning of the current calendar year.

Previous 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.

Current wording

(1) The non-same store facility count consists of: 5 sites in the expansion and development phase, 2 facilities that we purchased in 2023, 2 facilities whose operations have ceased and the Company is evaluating alternative use including, third party lease and or sale.

Previous wording

The level and nature of throughput at our warehouses significantly impacts out warehouse services revenues. Throughput refers to the volume of pallets entering and exiting our warehouses, with higher levels of throughput driving warehouse services revenues as customers are typically billed based on throughput. The nature of throughput can be influenced by various factors including product turnover and shifts in consumer demand.

Current wording

The level and nature of throughput at our warehouses significantly impacts our warehouse services revenues. Throughput refers to the volume of pallets entering and exiting our warehouses, with higher levels of throughput driving warehouse services revenues as customers are typically billed based on throughput. The nature of throughput can be influenced by various factors including product turnover and shifts in consumer demand.

Previous wording

Selling, general, and administrative expenses consist primarily of non-warehouse related labor, administrative, business development, marketing, engineering, human resources, information technology, performance and time based incentive compensation, communications, travel, professional fees, bad debt, training, and office supplies.

Current wording

Selling, general, and administrative expenses consist primarily of non-warehouse related labor, administrative, business development, marketing, engineering, human resources, information technology (including amortization expenses associated with the implementation of Project Orion), performance and time based incentive compensation, communications, travel, professional fees, bad debt, training, and office supplies.

Previous wording

Gain from sale of real estate represents gains recognized from the sale of Company owned real estate.

Current wording

Loss (gain) from sale of real estate represents gains recognized from the sale of Company owned real estate.

Previous wording

Other, net primarily includes foreign currency remeasurement, interest income, gains and losses on asset disposals, certain legal settlements, and other miscellaneous items.

Current wording

Other, net primarily includes foreign currency remeasurement, interest income, gains and losses on asset disposals, certain legal settlements, real estate related impairment charges and other miscellaneous items.

Previous 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.

Current wording

(2)Includes real estate rent expense of $8.5 million and $9.3 million, on an actual basis, for the three months ended September 30, 2024 and 2023, respectively.

Previous 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.

Current wording

(3)Includes non-real estate rent expense (equipment lease and rentals) of $3.0 million and $3.9 million, on an actual basis, for the three months ended September 30, 2024 and 2023, respectively.

Previous 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.

Current wording

On a constant currency basis, our warehouse segment revenues increased $16.4 million, or 2.7%, compared to the same period in the prior year. This growth was primarily driven by $17.8 million of growth in our same store pool and offset by a decrease of $1.4 million in our non-same store pool both on a constant currency basis, further discussed below.

Previous 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.

Current wording

On a constant currency basis, our warehouse segment cost of operations decreased $6.8 million, or 1.6%, during the three months ended September 30, 2024, as compared to the same period of the prior year. This is primarily driven by a decrease of $4.8 million in our non-same store pool and a decrease of $2.0 million in same store pool both on a constant currency basis, further discussed below.

Previous 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.

Current wording

On a constant currency basis, warehouse segment NOI increased 13.0% during the three months ended September 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 $19.8 million on a constant currency basis, attributable to factors described below.

Previous 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.

Current wording

Same store storage revenue decreased $8.6 million on a constant currency basis. This was primarily due to a decrease in economic occupancy of 590 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 and customer pricing and rate escalation initiatives. Specifically, our constant currency same store rent and storage revenue per average economic occupied pallet increased 3.8% during the three months ended September 30, 2024 as compared to the same period in the prior year.

Previous wording

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 wording

Same store warehouse services revenue increased $26.4 million on a constant currency basis, primarily due to pricing initiatives, improved revenue capture, and incremental value added services. Specifically, our constant currency same store services revenues per throughput pallet increased 11.0% during the three month period ending September 30, 2024 as compared to the same period of the prior year. This was partially offset by a decrease in throughput of 2.4% related to a decline in end-consumer demand and spending primarily due to the impact of inflation on the costs of food.

Previous wording

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 wording

Same store warehouse costs of operations decreased on a constant currency basis by $2.0 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 due to lower throughput volumes resulting in lower costs associated with supply purchases, equipment maintenance, productivity improvements as well as lower customer claims reserve expense. This was partially offset by an increase in power and other facilities costs, primarily facility maintenance, due to ongoing inflationary pressures.

Previous 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.

Current wording

On a constant currency basis transportation revenues decreased $2.8 million, or 5.1%, compared to the same period in the prior year. Thedecrease was primarily due to lower volumes associated with certain warehouses in the UK which resulted in a strategic transition of the transportation business to a third-party logistics model, the loss of volume from a customer in the United States during the second quarter of 2024 (which resumed during the third quarter of 2024), and the softening of transportation demand in the general macro-environment.

Previous 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.

Current wording

On a constant currency basis transportation cost of operations decreased $1.9 million, or 4.0%, 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

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.

Current wording

On a constant currency basis the transportation segment contribution NOI decreased $1.0 million or 9.9%, compared to the same period in the prior year due to the factors mentioned above.

Previous wording

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 wording

On a constant currency basis, third-party managed revenues increased $0.4 million, or 4.0%, as compared to the same period in the prior year.

Previous wording

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 wording

On a constant currency basis, third-party managed cost of operations decreased $0.1 million, or 1.2%, as compared to the same period in the prior year.

Previous wording

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 wording

On a constant currency basis, third-party managed segment contribution (NOI) increased $0.5 million, or 29.6% 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. This is offset by the ceased operation of a certain third party managed site during the three months ended June 30, 2024.

Previous 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.

Current wording

Depreciation and amortization. Depreciation and amortization expense decreased $0.4 million, or 0.4%, during the three months ended September 30, 2024 as compared to the same period in the prior year.

Previous 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.

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 $18.4 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 decreased by$27.2 million primarily related to a primarily related to a $10.0 million payment received in 2024 for business interruptions insurance. Costs for the six months ended June 30, 2024 is comprised of incremental claim reserves, and professional and legal fees related to the 2023 Cyber incident further described in Note1 -General to these Condensed Consolidated Financial Statements.

Current wording

Cyber incident related costs, net of insurance recoveries, decreased by $4.7 million during the three months ended September 30, 2024 compared to the same period in the prior year. Costs for the three months ended September 30, 2023 were comprised primarily 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

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.

Current wording

Loss from investments in partially owned entities. Loss from investments in partially owned entities increased $0.8 million, compared to the three months ended September 30, 2023. This is primarily due to a decrease in earnings from Superfrio due to lower occupancy rates and higher interest expense.

Previous wording

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 wording

Income tax benefit for the three months ended September 30, 2024 was $0.8 million, an increase of $0.3 million from an income tax benefit of $0.5 million for the three months ended September 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.

Previous wording

Comparison of Results for the Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of Results for the Nine Months Ended September 30, 2024 and 2023

Previous wording

(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 wording

(2)Includes real estate rent expense of $26.9 million and $28.2 million, on an actual basis, for the nine months ended September 30, 2024 and 2023, respectively.