AMERICOLD REALTY TRUST
For the period ended Mar 31, 2025. Filed May 8, 2025.
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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.
Mar 31, 2025 · Filed May 8, 2025
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 2024-09-30; filed 2024-11-07.
0001628280-24-046288
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001628280-25-023760
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 279 previous paragraphs and 232 current paragraphs.
95 unchanged; 79 reworded; 55 added; 89 removed; 16 previous and 3 current paragraphs rearranged.
Tables are not compared: 32 previous and 18 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 (55)
Current report
Houston Warehouse Acquisition
Current report
On March 17, 2025, the Company completed the acquisition of one temperature-controlled storage facility, and the related operations, located in Baytown, TX (the “Houston acquisition”), for total cash consideration of $108.4 million. The acquisition has been accounted for as a business combination. Refer to Note 2 - Business Combinations of the Condensed Consolidated Financial Statements herein for further details of this transaction.
Current report
Sale of the SuperFrio Joint Venture
Current report
On April 30, 2025, the Company completed the sale of its 14.99% equity interest in the SuperFrio joint venture to a third party for the Brazilian Real US dollar equivalent of $27.5 million. As of March 31, 2025, the Company’s equity method investment balance in the SuperFrio joint venture was $23.1 million which is recognized within “Investments in and advances to partially owned entities” on the Condensed Consolidated Balance Sheets. As the proceeds associated with this transaction will be held by our Brazilian subsidiary until July of 2025, we have entered into a foreign currency forward contract designated as a net investment hedge of our net investment in our Brazilian subsidiaries. The contract includes an obligation to pay R$155.9 million and receive $27.0 million. The hedge contract is set to mature in July of 2025.
Current report
(1) The non-same store facility count consists of: 8 facilities where the executive leadership team has approved exits in the current year (4 of which are leased facilities and 4 of which are owned facilities and the Company is in pursuit to sell), 2 sites in the expansion and development phase, and 1 facility that we purchased in 2025. As of March 31, 2025, there are 6 sites in the development and expansion phase that will be added to the non-same store pool when operations commence.
Current report
Physical Occupancy of our Warehouses
Current report
We define average physical occupied pallets as the average number of physically occupied pallet positions in our warehouses for the applicable period.
Current report
Physical occupancy percentage is calculated by dividing the average number of physically occupied pallets by the estimated average of total physical pallet positions in our warehouses, regardless of whether they are occupied, for the applicable period.
Current report
We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.
Current report
Economic occupancy percentage is calculated by dividing the average economic occupied pallets by the estimated average of total physical pallet positions in our warehouses, regardless of whether they are occupied, for the applicable period.
Current report
Constant Currency Metrics
Current report
Our consolidated revenues and expenses are subject to variations outside our control that are caused by the net effect of foreign currency translation on revenues generated and expenses incurred by our operations outside the United States. As a result, in order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we analyze our business performance based on certain constant currency reporting that represents current period results translated into U.S. dollars at the relevant average foreign exchange rates applicable in the comparable prior period. We believe that the presentation of constant currency results provides a measurement of our ongoing operations that is meaningful to investors because it excludes the impact of these foreign currency movements that we cannot control.
Current report
The following table presents revenues, contribution (NOI), margins, and certain operating metrics for our global warehouse segment for the three months ended March 31, 2025 and 2024.
Current report
On a constant currency basis, our warehouse segment cost of operations decreased $17.9 million, or 4.5%, during the three months ended March 31, 2025, as compared to the same period of the prior year. This is primarily driven by a decrease of $17.0 million in our non-same store pool and a decrease of $0.9 million in our same store pool, both on a constant currency basis. The decrease in the non-same store pool is related to the release of certain customer specific claims reserves, as well as a decrease in other facilities costs and other service costs associated with the decision to close certain facilities in the non-same store portfolio. The decision to close these facilities resulted in lower operating expenses during the three months ended March 31, 2025 as compared to the same period in the prior year.
Current report
The following tables present revenues, contribution (NOI), margins, and certain operating metrics for our same store and non-same store for the three months ended March 31, 2025 and 2024.
Current report
Same store rent and storage revenues decreased by $9.3 million on a constant currency basis, primarily due to a decrease in economic occupancy of 420 basis points. This decrease was partially offset by an increase in the constant currency same store rent and storage revenues per average economic occupied pallet of 1.7% during the three months ended March 31, 2025, as compared to the same period in the prior year. The overall decrease in economic occupancywas primarily due to unusually high inventory levels during the three months ended March 31, 2024, therefore impacting comparability in the three months ended March 31, 2025. Additionally, overall volumes are also impacted by recent regulatory shifts, a competitive and inflationary environment, and abnormal credit yields, all impacting consumer buying habits and the related food production levels.
Current report
Same store costs of operations decreased by $0.9 million, on a constant currency basis, primarily driven by lower volumes further described above.
Current report
n/r - not relevant
Current report
On a constant currency basis, transportation revenues decreased $12.1 million, or 21.2%, as compared to the same period in the prior year. The decrease was primarily due to overall lower volumes driven by softening transportation demand in the current macro-economic environment coupled with certain customer exits.
Current report
The following table presents consolidated operating expenses, excluding cost of operations, for the three months ended March 31, 2025 and 2024.
Current report
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
Current report
Closed site costs include expenses incurred to wind down operations at closed or sold facilities within our warehouse and transportation related operations. Such costs include lease termination fees, fixed operating costs, asset retirement obligations, and other exit-related expenses, but do not include any reduction in workforce or other severance costs related to the exit of these operations as those expenses are included within Severance costs. These costs have increased $6.2 million compared to the same period in the prior year primarily driven by lease termination fees of $5.0 million and other expenses for recently closed operations and certain assets classified as held for sale.
Current report
Acquisition and integration related costs increased $1.8 million for the three months ended March 31, 2025 compared to the same period in the prior year, primarily due to legal and professional fees incurred for the Houston acquisition.
Current report
Other, net for the three months ended March 31, 2025 includes stock compensation expense related to a special one-time grant in July 2024 and software implementation expenses for strategic projects. Other, net for the three months ended March 31, 2024 included $0.4 million related to a litigation adjustment.
Current report
Cyber incident related costs, net of insurance recoveries, decreased $1.0 million due to less legal and professional fees, and lower claims reserve related charges offset by insurance recoveries all related to the 2023 Cyber Incident, which is further described in our 2024 Annual Report on Form 10-K.
Current report
Severance costs decreased $1.8 million compared to the same period in the prior year due to severance related charges incurred during the three months ended March 31, 2024 associated with the realignment of certain international operations.
Current report
Interest expense. Interest expense increased $2.7 million, or 8.0%, compared to the three months ended March 31, 2024. This was primarily due to an overall increase in outstanding debt, most notably the issuance of our $500.0 million Public 5.409% Notes during the third quarter of 2024. Our effective interest rate on debt outstanding as of March 31, 2025 was 4.15% compared to 4.0% as of March 31, 2024.
Current report
LIQUIDITY AND CAPITAL RESOURCES
Current report
•our Current ATM Equity Program;
Current report
•public debt offerings under the Company’s Universal Shelf Registration Statement; and
Current report
Public Debt Offerings
Current report
On April 3, 2025, pursuant to the effective shelf registration statement further described in Note 1 - General to these Condensed Consolidated Financial Statements, we completed an underwritten public offering of $400.0 million aggregate principal amount of the Company’s 5.600% senior unsecured notes (the “Public 5.600% Notes”) due May 15, 2032. The Public 5.600% Notes are fully and unconditionally guaranteed, jointly and severally, by each of the Company, Americold Realty Operations, and certain subsidiaries of the Operating Partnership. The Public 5.600% Notes bear interest at a rate of 5.600% per year, and interest is payable semi-annually on May 15 and November 15 of each year, with the first payment occurring on November 15, 2025. In connection with the Public 5.600% Notes issuance in April 2025, we executed three treasury lock hedge transactions in March of 2025 to hedge the risk-free treasury yield component of the overall rate ultimately assigned to the $400.0 million public debt offering. The treasury locks were tied to $300.0 million of the principal and secured a treasury yield range of 4.0957% to 4.0985%. The transactions settled on March 25, 2025, when the notes were priced, and included proceeds of $1.3 million, which were recognized as a gain within "Accumulated other comprehensive loss" on the Condensed Consolidated Balance Sheets as of March 31, 2025. These amounts will be amortized on a straight-line basis as a decrease to “Interest expense” over the term of the Public 5.600% Notes, beginning in April 2025.
Current report
As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs, as well as potential developments in new or existing properties, acquisitions or investments in existing or newly created joint ventures. In addition, we may be required to use borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.
Current report
(2)The effective interest rate presented includes the amortization of deferred financing costs and is based on the hedged rate for the $375.0 million Senior Unsecured Term Loan A Facility Tranche A-1, the C$250.0 million Senior Unsecured Term Loan A Facility Tranche A-2, and the $270.0 million Senior Unsecured Term Loan A Facility Tranche A-3. All other debt instruments are based on contractual rates.
Current report
(1)Approximately $375.0 million of the debt listed to mature by March 31, 2026 represents the Senior Unsecured Term Loan A Facility Tranche A-1. The terms of this agreement include an option for two twelve-month extensions past the contractual maturity date in August of 2025. The $516.9 million listed to mature by March 31, 2027 represents outstanding borrowings on the Senior Unsecured Revolving Credit Facility. The terms of this agreement include an option for two six-month extensions past the contractual maturity date in August of 2026.
Current report
Maintenance capital expenditures are capitalized funds used to uphold and extend the useful life of assets, resulting in future economic benefits. These expenditures relate to routine and recurring maintenance that are essential to sustain current operations. This includes the cost to purchase and install, repair, or construct assets when it results in a useful life longer than one year and the cost per asset is over ade minimis threshold.
Current report
Examples of maintenance capital expenditures related to real estate are roof replacements, refrigeration equipment refurbishment, and racking system repairs. Examples of maintenance capital expenditures related to personal property include expenditures on material handling equipment and transportation assets. Examples of maintenance capital expenditures related to information technology include maintenance on existing servers, networking equipment and minor software updates.
Current report
We incur repair and maintenance expenses that include costs of routine maintenance and repairs that do not materially extend the useful life of the asset and minor replacements with an asset value that are less than ade minimis threshold. These expenditures are included as an operating expense in our statement of operations. Examples of repair and maintenance expenses include ordinary repairs on roofs, racking, refrigeration and material handling equipment.
Current report
External Growth and Integration Capital Expenditures
Current report
External growth and integration capital expenditures refer to investments to expand our operations and enhance market position through mergers and acquisitions. These expenditures typically include costs associated with acquiring new businesses, integrating operational systems, rebranding, and upgrading infrastructure to our standards. Unlike organic growth, which focuses on internal development through existing resources and capabilities, external growth strategies rely on leveraging external assets and synergies to drive value creation and achieve strategic objectives.
Showing the first 40 of 55 passages. Open the source sections for the rest.
Removed paragraphs (89)
Previous 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 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 report
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 report
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 report
Sale of Outstanding Minority Ownership in LATAM JV
Previous 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.
Previous report
Refer to “Item 1A - Risk Factors” of our 2023 Annual Report on Form 10-K as filed with the SEC.
Previous report
(1)Prior period exchange rates used to adjust current period operating results for constant currency metrics used herein.
Previous report
(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 report
Impairment of related party loan receivable represents impairment charges associated with the loan issued to the Comfrio joint venture.
Previous report
Loss on put option represents the fair value of put option associated with the Comfrio joint venture.
Previous report
The following table presents the operating results of our warehouse segment for the three months ended September 30, 2024 and 2023.
Previous report
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 report
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 report
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 three months ended September 30, 2024 and 2023.
Previous report
The following table provides certain operating metrics to explain the drivers of our same store performance.
Previous report
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 report
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 report
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 report
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 report
n/a - not applicable
Previous report
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 report
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 report
Selling, general, and administrative. During the three months ended September 30, 2024, corporate-level selling, general, and administrative expenses increased $11.3 million, or 21.5%, compared to $52.4 million for the same period in the prior year. This was primarily driven by the go live of Project Orion during the three months ended June 30, 2024, which resulted in less capitalized labor and higher software related expenses (primarily subscription charges and amortization of deferred costs). This increase also includes general increases in office administrative expenses, most notably data communications, and information security related investments.
Previous report
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 report
Interest expense. Interest expense decreased $1.3 million, or 3.7%, compared to the three months ended September 30, 2023. This was primarily due the Company’s purchase of eleven facilities previously accounted for as failed sale-leasebacks transactions, thus resulting in lower interest expense. Additionally, there was more capitalized interest in the current period, which also contributed to the decrease. This was partially offset by the effective interest rate on our outstanding debt increasing from 4.02% to to 4.10% as of September 30, 2023 and September 30, 2024, respectively.
Previous report
Loss on debt extinguishment and termination of derivative instruments. Loss on debt extinguishment and termination of derivative instruments decreased $0.5 million, compared to the three months ended September 30, 2023. This is primarily related to the full amortization of the previously terminated interest rate swaps further described in Note 5 - Derivatives to these Condensed Consolidated Financial Statements.
Previous report
Warehouse Segment
Previous report
The following table presents the operating results of our warehouse segment for the nine months ended September 30, 2024 and 2023.
Previous report
(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.
Previous report
On a constant currency basis, our warehouse segment cost of operations decreased $25.2 million, or 2.0%, during the nine months ended September 30, 2024, compared to the same period in the prior year. The cost of operations for our same store pool decreased $20.1 million, and decreased $5.2 million in our non same store pool, both on a constant currency basis, due to factors further described below.
Previous report
On a constant currency basis, warehouse segment NOI increased 15.9% during the nine months ended September 30, 2024, compared to the same period in the prior year. The NOI for our same store pool increased $72.5 million, or 13.4%, and our non same store pool increased $11.0 million, both on a constant currency basis, primarily attributable to factors described below.
Previous report
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 nine months ended September 30, 2024 and 2023.
Previous report
The following table provides certain operating metrics to explain the drivers of our same store and non-same store performance.
Previous report
Same store storage revenue decreased $11.4 million on a constant currency basis, primarily due to a decrease in economic occupancy of 490 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 5.0% during the nine months ended September 30, 2024 as compared to the same period in the prior year.
Previous report
Same store warehouse costs of operations decreased by $20.1 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 4.0% resulting in less overtime and needed contract labor, in addition to labor efficiencies. Other service costs also decreased from lower throughput volumes of 4.0%. 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 variable facilities costs, primarily facility maintenance, due to ongoing inflationary pressures.
Previous report
Transportation Segment
Previous report
On a constant currency basis transportation revenues decreased $18.3 million, or 10.0%. The decrease wasprimarily 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 a major customer in the United States that is expected to return later this year, and the softening of transportation demand in the general macro-environment.
Previous report
On a constant currency basis the transportation segment contribution NOI decreased $1.5 million or 4.8%, compared to the same period in the prior year due to the factors mentioned above.
Previous report
Third-Party Managed Segment
Previous report
On a constant currency basis, third-party managed cost of operations decreased $5.0 million, or 17.2%, during the nine months ended September 30, 2024 as compared to the same period in the prior year.
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Reworded paragraphs (79)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. In addition, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in Part I of this report under 'Cautionary Statement Regarding Forward-Looking Statements' and 'Risk Factors' in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. In addition, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include, but are not limited to, those identified below and those described in Part I of this report under "Cautionary Statement Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q and "Risk Factors”inour 2024 Annual Report on Form 10-K filed on February 27, 2025.
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 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.
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. As of March 31, 2025, we operated 238 warehouses globally, totaling approximately 1.4 billion cubic feet, with 194 warehouses in North America, 25 in Europe, 17 warehouses in Asia-Pacific, and 2 warehouses in South America.
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 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 Armazéns Gerais S.A. (the “SuperFrio joint venture”), which owns or operates 34 temperature-controlled warehouses in Brazil, and RSA Cold Holdings Limited (the “RSA joint venture”), which operates 2 temperature-controlled warehouses in Dubai.
Previous wording
Our ongoing initiatives, some of which are detailed below, focus on streamlining business operations and reducing costs. This includes i) centralizing processes; ii) implementing operational standards; iii) adopting new technology; iv) enhancing health and safety programs; v) leveraging our networks’ purchasing power; and vi) fully integrating acquired assets and businesses. Such realignments have allowed us to acquire new talent and strengthen our service offerings.
Current wording
Our ongoing initiatives, some of which are detailed below, focus on streamlining business operations and reducing costs. This includes (i) centralizing processes; (ii) implementing operational standards; (iii) adopting new technology; (iv) enhancing health and safety programs; (v) leveraging our networks’ purchasing power; and (vi) fully integrating acquired assets and businesses. Such realignments have and will allow us to acquire new talent and strengthen our service offerings.
Previous wording
Additionally, as part of our initiatives to streamline our business processes and to reduce our cost structure, we have evaluated and exited less strategic and profitable markets or business lines, including the sale of certain warehouse assets, the exit of certain leased facilities, and the exit of certain managed warehouse agreements. Through our process of active portfolio management, we continue to evaluate our markets and offerings.
Current wording
Additionally, as part of our initiatives to streamline our business processes and to reduce our cost structure, we have evaluated and exited less strategic and profitable markets and business lines, including the sale of certain warehouse assets, the exit of certain leased facilities, and the exit of certain managed warehouse agreements. Through our process of active portfolio management, we continue to evaluate our markets and offerings.
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 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.
Current wording
To reduce facility costs, we continue to invest 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
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.
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 (“IT”) applications and infrastructure rationalization, reduced associate turnover, working capital efficiency and reduced IT maintenance capital expenditures. The activities associated with Project Orion are expected to be substantially complete, with the exception of the implementation in Europe, within three years from the project’s start date. Since inception, the Company has incurred $175.6 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 were $82.3 million and $80.5 million as of March 31, 2025 and December 31, 2024, respectively.
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 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.
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 months ended March 31, 2025 related to the Project Orion ERP implementation was $2.1 million. For further information regarding Project Orion, refer to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K as filed with the SEC.
Previous 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.
Current wording
During the three months ended March 31, 2024, the Company purchased two 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 $20.4 million are included within “Termination of sale-leaseback financing obligations” on the Condensed Consolidated Statements of Cash Flows for the three March 31, 2024.
Previous 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.
Current wording
These purchases resulted in the recognition of a $4.7 million loss recognized within “Loss on debt extinguishment and termination of derivative instruments” on the Condensed Consolidated Statements of Operations included herein.
Previous 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.
Current wording
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, corporate-level Acquisition, cyber incident, and other, net, and Loss (gain) from sale of real estate).
Current wording
•Warehouse segment contribution NOIis calculated as warehouse segment revenues less its cost of operations excluding any Depreciation and amortization, corporate-level Selling, general, and administrative; corporate-level Acquisition, cyber incident, and other, net; Net gain from sale of real estate; and all components of Other income (expense).
Previous wording
•Transportation segment contribution NOIis calculated as transportation 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).
Current wording
•Transportation segment contribution NOIis calculated as transportation segment revenues less its cost of operations excluding any Depreciation and amortization, corporate-level Selling, general, and administrative expenses, corporate-level Acquisition, cyber incident, and other, net, and Net gain from sale of real estate and all components of Other income (expense).
Previous wording
•Third-Party Managed contribution NOIis calculated as third-party managed 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).
Current wording
•Third-Party Managed contribution NOIis calculated as third-party managed segment revenues less its cost of operations excluding any Depreciation and amortization, corporate-level Selling, general, and administrative expenses, corporate-level Acquisition, cyber incident, and other, net and Net gain from sale of real estate and all components of Other income (expense).
Previous wording
Segment NOI and NOI margin contribution metrics help investors understand revenue, costs, and earnings among service types. These NOI contribution measures are supplemental and are not measurements of financial performance under U.S. GAAP. We provide reconciliations of these measures in the results of operations sections below.
Current wording
Segment NOI and NOI margin contribution metrics help investors understand revenues, costs, and earnings among service types. These NOI contribution measures are supplemental and are not measurements of financial performance under U.S. GAAP. We provide reconciliations of these measures in the results of operations sections below.
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, 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.
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, 2024) 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. Changes in ownership structure (e.g., purchase of a previously leased warehouse) does not 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 classifies 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.
Previous wording
The following table shows the number of same-store and non-same store warehouses in our portfolio as of September 30, 2024. The non-same store warehouse count in the table below includes the partial period impact of sites exited during the periods presented.
Current wording
The following table shows the number of same store and non-same store warehouses in our portfolio as of March 31, 2025. The non-same store count in the table below includes the impact of sites sold or otherwise disposed during the period presented.
Previous wording
We define average economic occupancy as the aggregate number of physically occupied pallets and contractually committed pallets for a given period, without duplication. We estimate the number of contractually committed pallet positions by subtracting the physical pallet positions from the contractually committed pallet positions specified in each customer’s contract.
Current wording
We define average economic occupied pallets as the sum of the average number of physically occupied pallets and otherwise contractually committed pallets for a given period, without duplication.
Previous wording
Economic occupancy is a key driver of our financial results. Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an as-utilized, on-demand basis. We now aim to establish contracts with fixed storage commitments for new customer relationships and transition existing customers to such contracts in conjunction with contract renewals or changes in customer profiles. This strategy mitigates the impact of seasonal changes on physical occupancy and ensures our customers have the necessary space to support their business needs.
Current wording
Economic occupancy is a key driver of our financial results as it mitigates the impact of seasonal changes on physical occupancy and ensures our customers have the necessary space to support their business needs.
Previous 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.
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. The nature of throughput can be influenced by various factors including product turnover and shifts in consumer demand. Food manufacturers’ production levels are influenced by market conditions, consumer demand, labor availability, supply chain dynamics and consumer preferences, which all impact throughput.
Previous wording
Rent, storage, and warehouse services. Our primary source of revenues are rent, storage, and warehouse services fees. Rent and storage revenues are related to the storage of frozen, perishable or other products in our warehouses. We also offer a wide array of value added services including: i) receipt, labeling and storage of goods, ii) customized order retrieval and packaging, iii) blast freezing and ripening, iv) government approved periodic inspections, fumigation, and other treatment services, v) e-commerce fulfillment and many more.
Current wording
Rent, storage, and warehouse services revenues. Our primary source of revenues is rent, storage, and warehouse services fees. Rent and storage revenues are related to the storage of frozen, perishable or other products in our warehouses. We also offer a wide array of value-added services including: i) receipt, labeling and storage of goods, ii) customized order retrieval and packaging, iii) blast freezing and ripening, iv) government approved periodic inspections, fumigation, and other treatment services, v) e-commerce fulfillment and many more.
Previous wording
Labor, the most significant part of warehouse expenses, covers wages, benefits, workers' compensation, and can vary due to factors like workforce size, customer needs, compensation levels, third-party labor usage, collective bargaining agreements, customer requirements, productivity, labor availability, government policies, medical insurance costs, safety programs, and discretionary bonuses.
Current wording
Labor covers wages, benefits, workers' compensation, and can vary due to factors like workforce size, customer needs, compensation levels, third-party labor usage, collective bargaining agreements, customer requirements, productivity, labor availability, government policies, medical insurance costs, safety programs, and discretionary bonuses.
Previous 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.
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, 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
Other services costs include equipment costs, warehouse consumables (e.g. shrink-wrap), employee protective equipment, warehouse administration and other related services costs.
Current wording
Other services costs include equipment costs, warehouse consumables (e.g. shrink-wrap), associate protective equipment, warehouse administration and other related services costs.
Previous wording
Transportation services revenue is derived from fees charged for transportation of our customers products, often including fuel and capacity surcharges.
Current wording
Transportation servicesare derived from fees charged for transportation of our customers products, often including fuel and capacity surcharges.
Previous wording
Third-party managed services revenue. Reimbursements that we receive for expenses incurred for warehouses that we manage on behalf of third party owners are recognized as third-party managed services revenues. We also earn management fees, incentive fees upon achieving negotiated performance and cost-savings results, or an applicable mark-up on costs.
Current wording
Third-party managed services. Reimbursements that we receive for expenses incurred for warehouses that we manage on behalf of third-party owners are recognized as third-party managed services revenues. We also earn management fees, incentive fees upon achieving negotiated performance and cost-savings results, or an applicable mark-up on costs.
Previous wording
Acquisition, cyber incident, and other, net, consists of non-recurring or non-routine costs including acquisition related costs, costs related to Project Orion, litigation and settlement costs outside of the normal course of business, severance, terminated site operations costs, and cyber incident related costs, net of insurance recoveries all of which are not representative of our normal course of operations.
Current wording
Acquisition, cyber incident, and other, net consists of non-recurring or non-routine costs including acquisition related costs, costs related to Project Orion, severance, terminated site operations costs, and cyber incident related costs, net of insurance recoveries, all of which are not representative of our normal course of operations.
Previous wording
Loss (gain) from sale of real estate represents gains recognized from the sale of Company owned real estate.
Current wording
Net gain from sale of real estate represents gains or losses 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, real estate related impairment charges and other miscellaneous items.
Current wording
Other, net primarily includes foreign currency remeasurement, interest income, gains and losses on other asset disposals, certain legal settlements, and other miscellaneous transactions.
Previous 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.
Current wording
(2)Includes real estate rent expense of $6.5 million and $9.2 million, on an actual basis, for the three months ended March 31, 2025 and 2024, respectively.
Previous 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.
Current wording
(3)Includes non-real estate rent expense (equipment lease and rentals) of $2.4 million and $3.5 million, on an actual basis, for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
On a constant currency basis, our warehouse segment revenues increased $58.3 million, or 3.3%, during the nine months ended September 30, 2024, compared to the same period in the prior year. This growth was driven by an increase of $52.5 million in our same store pool, and an increase of $5.9 million in our non same store pool, both on a constant currency basis, due to factors further discussed below.
Current wording
On a constant currency basis, our warehouse segment revenues decreased $16.8 million, or 2.8%, during the three months ended March 31, 2025, as compared to the same period in the prior year. This decrease was driven by the $9.1 million decrease in revenues in our non-same store pool and the $7.7 million decrease in revenues in our same store pool, both on a constant currency basis, due to factors further discussed below related to the same store warehouse performance.
Previous 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.
Current wording
On a constant currency basis, warehouse segment NOI increased 0.5% during the three months ended March 31, 2025, as compared to the same period of the prior year. This is primarily due to increased NOI in our non-same store pool of $7.9 million, on a constant currency basis, due primarily to the factors described above.
Previous wording
Same store services revenue increased $63.8 million on a constant currency basis, primarily due to our pricing initiatives, improved revenue capture, and incremental value added services. Specifically, our constant currency same store services revenue per throughput pallet increased 11.3% during the nine months ended September 30, 2024 as compared to the same period in the prior year. This was partially offset by a decrease in throughput of 4.0% 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 services revenues increased $1.5 million on a constant currency basis, primarily due to general rate increases. Specifically, our constant currency same store services revenues per throughput pallet increased 3.5% during the three months ended March 31, 2025, as compared to the same period in the prior year. This was partially offset by a decrease in throughput of 2.9%.
Previous 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.
Current wording
On a constant currency basis, transportation cost of operations decreased $7.9 million, or 17.4%, as 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, third-party managed revenues decreased $2.7 million, or 8.0%, during the nine months ended September 30, 2024, as compared to the same period in the prior year.
Current wording
On a constant currency basis, third-party managed revenues decreased $0.5 million, or 4.7%, as compared to the same period in the prior year. The decrease is due to the ceased operations of certain third-party managed sites, one of which ceased during the three months ended June 30, 2024 and another during the three months ended March 31, 2025.
Previous 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.
Current wording
On a constant currency basis, third-party managed cost of operations decreased $0.4 million, or 4.8%, as compared to the same period in the prior year due to factors noted above.
Previous 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.
Current wording
On a constant currency basis, third-party managed segment contribution (NOI) decreased $0.1 million, or 4.4% as compared to the same period in the prior year due to the factors noted above.
Previous 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.
Current wording
Depreciation and amortization. Depreciation and amortization expense decreased $3.1 million, or 3.4%, during the three months ended March 31, 2025 as compared to the same period in the prior year. This decrease is substantially driven by the classification of certain assets as held for sale in the fourth quarter of 2024 due to the anticipated exit of certain warehouse and transportation related operations.
Previous wording
Selling, general, and administrative. During the nine months ended September 30, 2024, corporate-level selling, general and administrative expenses increased $19.5 million, or 11.5%, compared to the same period in the prior year. This was primarily driven by general increases in office administrative expenses, most notably including data communications, information security related investments, and legal and professional fees. This increase also includes the impact of the go live of Project Orion during the three months ended June 30, 2024 which resulted in higher software related expenses (primarily subscription and deferred costs amortization).
Current wording
Selling, general, and administrative. During the three months ended March 31, 2025, corporate-level selling, general, and administrative expenses increased $3.8 million, or 5.8%, compared to the same period in the prior year. This increase was primarily driven by the go live of Project Orion (Phase 1) during the second quarter of 2024, which resulted in higher software related expenses (primarily software license fees and deferred cost amortization).
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Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Refer to “Risk Factors” in our 2024 Annual Report on Form 10-K.
Current report — wording carried from elsewhere
Constant currency results are not measurements of financial performance under U.S. GAAP, and our constant currency results should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.
Rearranged previous paragraphs (16)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
Food manufacturers’ production levels are influenced by market conditions, labor availability, supply chain dynamics and consumer preferences, which impact inbound pallets. Shifts in consumer demand may also impact outbound pallets.
Previous report — wording carried elsewhere
Comparison of Results for the Nine Months Ended September 30, 2024 and 2023
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(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.
Previous report — wording carried elsewhere
(3)Includes non-real estate rent expense (equipment lease and rentals) of $9.5 million and $11.0 million, on an actual basis, for the nine months ended September 30, 2024 and 2023, respectively.
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Same Store and Non-Same Store Analysis
Previous report — wording carried 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.
Previous report — wording carried elsewhere
The following table presents the operating results of our transportation segment for the nine months ended September 30, 2024 and 2023.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
On a constant currency basis transportation cost of operations decreased $16.8 million, or 11.1%. The decrease was due to the same factors contributing to the decline in revenue mentioned above.
Previous report — wording carried elsewhere
The following table presents the operating results of our third-party managed segment for the nine months ended September 30, 2024 and 2023.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
Acquisition, cyber incident, and other, net. Corporate-level acquisition, cyber incident and other, net include the following:
Previous report — wording carried 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 $33.7 million primarily due to increased contract labor, professional fees, and other non-capitalizable implementation costs.
Previous report — wording carried elsewhere
The following table presents items of other income and expense for the nine months ended September 30, 2024 and 2023.