Americold Realty Trust 10-Q for FY2024 Q2

Americold Realty Trust (COLD)

10-Q 2024-08-08 For: 2024-06-30

Added on April 06, 2026

About this 10-Q

Americold Realty Trust filed this 10-Q on August 8, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $660.96M; up 1.7% from $649.61M a year earlier
Net loss: $64.11M; compared with a net loss of $104.72M a year earlier
Diluted EPS: -$0.23; compared with -$0.39 a year earlier

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☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	June 30, 2024


Maryland		93-0295215
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

10 Glenlake Parkway,	Suite 600, South Tower
Atlanta	Georgia	30328
(Address of principal executive offices)		(Zip Code)


Class						Outstanding at August 6, 2024
Common Stock, $0.01 par value per share						284,155,561


TABLE OF CONTENTS
			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosures About Market Risk			66
Item 4. Controls and Procedures			67

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			67
Item 1A. Risk Factors			67
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			68
Item 3. Defaults Upon Senior Securities			68
Item 4. Mine Safety Disclosures			68
Item 5. Other Information			68
Item 6. Exhibits			68

SIGNATURES			69


Item 1. Financial Statements
Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares and per share amounts)
	June 30, 2024		December 31, 2023
Assets
Property, buildings and equipment:
Land	$	816,949	$	820,831
Buildings and improvements	4,458,632		4,464,359
Machinery and equipment	1,575,540		1,565,431
Assets under construction	510,085		452,312
	7,361,206		7,302,933
Accumulated depreciation	(2,330,672)		(2,196,196)
Property, buildings and equipment – net	5,030,534		5,106,737

Operating leases – net	231,822		247,302
Financing leases – net	105,770		105,164

Cash, cash equivalents and restricted cash	44,198		60,392
Accounts receivable – net of allowance of $21,672 and $21,647 at June 30, 2024 and December 31, 2023, respectively	429,080		426,048
Identifiable intangible assets – net	874,788		897,414
Goodwill	790,612		794,004
Investments in and advances to partially owned entities	41,481		38,113
Other assets	254,168		194,078
Total assets	$	7,802,453	$	7,869,252

Liabilities and equity
Liabilities:
Borrowings under revolving line of credit	$	619,636	$	392,156
Accounts payable and accrued expenses	570,818		568,764
Senior unsecured notes and term loans – net of deferred financing costs of $9,254 and $10,578, in the aggregate, at June 30, 2024 and December 31, 2023, respectively	2,574,022		2,601,122
Sale-leaseback financing obligations	81,201		161,937
Financing lease obligations	95,768		97,177
Operating lease obligations	226,764		240,251
Unearned revenue	27,290		28,379
Deferred tax liability – net	129,512		135,797
Other liabilities	7,854		9,082
Total liabilities	4,332,865		4,234,665
Commitments and contingencies (Note 8 - Commitments and Contingencies)
Equity
Stockholders’ equity:
Common stock, 0.01 par value per share – 500,000,000 authorized shares; 284,079,137 and 283,699,120 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	2,840		2,837
Paid-in capital	5,635,353		5,625,907
Accumulated deficit and distributions in excess of net earnings	(2,176,035)		(1,995,975)
Accumulated other comprehensive income (loss)	(14,313)		(16,640)
Total stockholders’ equity	3,447,845		3,616,129
Noncontrolling interests	21,743		18,458
Total equity	3,469,588		3,634,587

Total liabilities and equity	$	7,802,453	$	7,869,252
See accompanying notes to Condensed Consolidated Financial Statements.


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to ,


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues:
Rent, storage, and warehouse services	$	600,387	$	581,170	$	1,198,097	$	1,176,222
Transportation services	50,637		58,072		107,490		126,150
Third-party managed services	9,931		10,368		20,348		23,727
Total revenues	660,955		649,610		1,325,935		1,326,099
Operating expenses:
Rent, storage, and warehouse services cost of operations	395,856		408,328		796,435		828,553
Transportation services cost of operations	41,787		48,263		87,118		104,681
Third-party managed services cost of operations	7,829		8,968		16,063		21,248
Depreciation and amortization	89,649		84,892		181,744		169,916
Selling, general, and administrative	59,453		53,785		124,879		116,640
Acquisition, cyber incident, and other, net	3,013		27,235		18,011		34,382
Gain from sale of real estate	—		(2,528)		(3,514)		(2,337)
Total operating expenses	597,587		628,943		1,220,736		1,273,083

Operating income	63,368		20,667		105,199		53,016

Other income (expense):
Interest expense	(33,180)		(36,431)		(66,610)		(70,854)
Loss on debt extinguishment and termination of derivative instruments	(110,682)		(627)		(115,864)		(1,172)
Loss from investments in partially owned entities	(1,034)		(709)		(1,983)		(1,357)
Impairment of related party loan receivable	—		(21,972)		—		(21,972)
Loss on put option	—		(56,576)		—		(56,576)
Other, net	14,623		(415)		24,149		1,018
Loss from continuing operations before income taxes	(66,905)		(96,063)		(55,109)		(97,897)

Income tax (expense) benefit:
Current income tax	(1,857)		(1,923)		(3,232)		(3,900)
Deferred income tax	4,353		1,459		3,734		5,080
Total income tax benefit (expense)	2,496		(464)		502		1,180

Net Loss
Net loss from continuing operations	(64,409)		(96,527)		(54,607)		(96,717)
Net loss from discontinued operations	—		(8,275)		—		(10,656)
Net loss	$	(64,409)	$	(104,802)	$	(54,607)	$	(107,373)
Net loss attributable to noncontrolling interests	(300)		(78)		(238)		(87)
Net loss attributable to Americold Realty Trust, Inc.	$	(64,109)	$	(104,724)	$	(54,369)	$	(107,286)

Weighted average common stock outstanding – basic	284,683		270,462		284,664		270,387
Weighted average common stock outstanding – diluted	284,683		270,462		284,664		270,387

Net loss per common share from continuing operations - basic	$	(0.23)	$	(0.36)	$	(0.19)	$	(0.36)
Net loss per common share from discontinued operations - basic	—		(0.03)		—		(0.04)
Basic loss per share	$	(0.23)	$	(0.39)	$	(0.19)	$	(0.40)

Net loss per common share from continuing operations - diluted	$	(0.23)	$	(0.36)	$	(0.19)	$	(0.36)
Net loss per common share from discontinued operations - diluted	—		(0.03)		—		(0.04)
Diluted loss per share	$	(0.23)	$	(0.39)	$	(0.19)	$	(0.40)


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(64,409)	$	(104,802)	$	(54,607)	$	(107,373)
Other comprehensive income (loss) - net of tax:
Adjustment to accrued pension liability	(91)		(388)		(104)		310
Unrealized net (loss) gain on foreign currency	(10,624)		6,143		(11,205)		6,322
Unrealized gain (loss) on cash flow hedges	936		22,359		13,636		9,795
Other comprehensive income (loss) - net of tax attributable to Americold Realty Trust, Inc.	(9,779)		28,114		2,327		16,427
Other comprehensive (loss) income attributable to noncontrolling interests	(68)		112		(17)		77
Total comprehensive loss	$	(74,256)	$	(76,576)	$	(52,297)	$	(90,869)

See accompanying notes to Condensed Consolidated Financial Statements.


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Equity (Unaudited)
(In thousands, except share amounts)

	Common Stock					Accumulated Deficit and Distributions in Excess of Net Earnings		Accumulated Other Comprehensive (Loss) Income		Noncontrolling Interests

	Number of Shares	Par Value		Paid-in Capital
												Total
Balance - December 31, 2023	283,699,120	$	2,837	$	5,625,907	$	(1,995,975)	$	(16,640)	$	18,458	$	3,634,587
Net Income	—	—		—		9,740		—		62		9,802
Other comprehensive income	—	—		—		—		12,106		51		12,157
Distributions on common stock, restricted stock and OP units	—	—		—		(62,743)		—		(233)		(62,976)
Stock-based compensation expense	—	—		4,849		—		—		1,770		6,619
Common stock issuance related to stock-based payment plans, net of shares withheld for employee taxes	276,843	3		(284)		—		—		—		(281)
Common stock issuance related to employee stock purchase plan	58,148	—		1,496		—				—		1,496
Balance - March 31, 2024	284,034,111	$	2,840	$	5,631,968	$	(2,048,978)	$	(4,534)	$	20,108	$	3,601,404
Net Loss	—	—		—		(64,109)		—		(300)		(64,409)
Other comprehensive income	—	—		—		—		(9,779)		(68)		(9,847)
Distributions on common stock, restricted stock and OP units	—	—		—		(62,948)		—		(290)		(63,238)
Stock-based compensation expense	—	—		3,771		—		—		2,293		6,064
Common stock issuance related to stock-based payment plans, net of shares withheld for employee taxes	45,026	—		(386)		—		—		—		(386)
Balance - June 30, 2024	284,079,137	$	2,840	$	5,635,353	$	(2,176,035)	$	(14,313)	$	21,743	$	3,469,588


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
	Six Months Ended June 30,
	2024		2023
Operating activities:
Net loss	$	(54,607)	$	(107,373)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	181,744		169,916
Amortization of deferred financing costs and pension withdrawal liability	2,583		2,521
Loss on debt extinguishment and termination of derivative instruments	115,864		1,172
Loss from investments in partially owned entities	1,983		5,468
Stock-based compensation expense	12,683		11,609
Deferred income taxes benefit	(3,734)		(5,080)
Gain from sale of real estate	(3,514)		(2,337)
(Gain) loss on other asset disposals	(263)		99
Provision for doubtful accounts receivable	1,368		2,255
Impairment of related party loan receivable	—		21,972
Loss on put option	—		56,576
Loss on classification as held for sale	—		4,000
Non-cash lease expenses	21,430		21,073
Changes in operating assets and liabilities:
Accounts receivable	(7,115)		(37,877)
Accounts payable and accrued expenses	14,931		(23,675)
Other assets	(51,985)		(25,387)
Operating lease liabilities	(20,721)		(19,556)
Other	(11,988)		7,392
Net cash provided by operating activities	198,659		82,768

Investing activities:
Additions to property, buildings and equipment	(109,095)		(127,974)
Business combinations	—		(40,743)
Acquisitions of property, buildings and equipment	—		(20,081)
Investments in and advances to partially owned entities and other	(9,260)		(18,487)
Proceeds from sale of property, buildings and equipment	9,179		7,715
Proceeds from sale of investments in partially owned entities	—		36,896
Net cash used in investing activities	(109,176)		(162,674)

Financing activities:
Distributions paid on common stock, restricted stock units and noncontrolling interests	(126,185)		(119,806)
Proceeds from stock options exercised	2,024		1,565
Proceeds from employee stock purchase plan	1,496		1,453
Remittance of withholding taxes related to employee stock-based transactions	(2,691)		(2,024)
Proceeds from revolving line of credit	602,224		439,665
Repayment on revolving line of credit	(368,314)		(219,941)
Repayment of sale-leaseback financing obligations	(4,891)		(4,435)
Termination of sale-leaseback financing obligations	(190,954)		—
Repayment of financing lease obligations	(19,905)		(19,964)
Net cash (used in) provided by financing activities	(107,196)		76,513
Net decrease in cash, cash equivalents and restricted cash	(17,713)		(3,393)
Effect of foreign currency translation on cash, cash equivalents and restricted cash	1,519		(797)
Cash, cash equivalents and restricted cash:
Beginning of period	60,392		53,063
End of period	$	44,198	$	48,873


Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
(In thousands)
	Six Months Ended June 30,
	2024		2023
Supplemental disclosures of non-cash investing and financing activities:
Addition of property, buildings and equipment on accrual	$	29,168	$	54,891
Addition of property, buildings and equipment under financing lease obligations	$	19,609	$	18,601
Addition of property, buildings and equipment under operating lease obligations	$	1,055	$	5,622

Supplemental cash flow information:
Interest paid – net of amounts capitalized	$	63,268	$	68,128
Income taxes paid – net of refunds	$	3,975	$	3,582

	As of June 30,
Allocation of purchase price of property, buildings and equipment to:	2024		2023
Land	$	—	$	7,887
Buildings and improvements	—		7,605
Machinery and equipment	—		4,589
Cash paid for acquisition of property, buildings and equipment	$	—	$	20,081

See accompanying notes to Condensed Consolidated Financial Statements.


	Three Months Ended June 30,				Six Months Ended June 30,
Results of discontinued operations	2024		2023		2024		2023
Revenue	$	—	$	14,237	$	—	$	14,237
Operating expenses	—		16,541		—		16,541
Estimated costs of disposal	—		4,000		—		4,000
Loss from partial investment pre-acquisition	—		1,730		—		4,111
Pre-tax loss	—		(8,034)		—		(10,415)
Income tax expense	—		(241)		—		(241)
Loss from discontinued operations, net of tax	$	—	$	(8,275)	$	—	$	(10,656)


	June 30, 2024		December 31, 2023
	Carrying Amount		Carrying Amount
Senior Unsecured Notes	$	1,755,411	$	1,777,925
Senior Unsecured Term Loans	827,865		833,775
Senior Unsecured Revolving Credit Facility	619,636		392,156
Total principal amount of indebtedness	$	3,202,912	$	3,003,856
Less: unamortized deferred financing costs	(9,254)		(10,578)
Total indebtedness, net of deferred financing costs	$	3,193,658	$	2,993,278


			June 30, 2024				December 31, 2023
	Stated Maturity Date	Contractual Interest Rate	Borrowing Currency		Carrying Amount (USD)		Borrowing Currency		Carrying Amount (USD)
Series A Notes	01/2026	4.68%	$	200,000	$	200,000	$	200,000	$	200,000
Series B Notes	01/2029	4.86%	$	400,000	400,000		$	400,000	400,000
Series C Notes	01/2030	4.10%	$	350,000	350,000		$	350,000	350,000
Series D Notes	01/2031	1.62%	€	400,000	429,552		€	400,000	441,560
Series E Notes	01/2033	1.65%	€	350,000	375,859		€	350,000	386,365
Total Senior Unsecured Notes					$	1,755,411			$	1,777,925


	June 30, 2024					December 31, 2023
Denomination of Draw	Contractual Interest Rate (1)	Borrowing Currency		Carrying Amount (USD)			Contractual Interest Rate(1)	Borrowing Currency		Carrying Amount (USD)
U.S. dollar	SOFR + 0.84%	$	360,000	$	360,000		SOFR + 0.84%	$	34,000	$	34,000
Australian dollar	BBSW + 0.84%	A$	197,000	131,523			BBSW + 0.84%	A$	191,000	130,108
British pound sterling	SONIA + 0.84%	£	—	—			SONIA + 0.84%	£	78,000	99,302
Canadian dollar	CORRA + 0.84%	C$	35,000	25,601			CDOR + 0.84%	C$	35,000	26,429
Euro	EURIBOR + 0.84%	€	70,500	75,709			EURIBOR + 0.84%	€	67,500	74,513
New Zealand dollar	BKBM + 0.84%	NZD	44,000	26,803			BKBM + 0.84%	NZD	44,000	27,804
Total Senior Unsecured Revolving Credit Facility		$	619,636					$	392,156


Notional	Fixed Base Interest Rate Swap	Effective Date	Expiration Date	Asset Fair Value as of June 30, 2024		Liability Fair Value as of June 30, 2024
$200 million	3.05%	12/29/2023	7/30/2027	$	6,804	$	—
$175 million	3.47%	11/30/2022	7/30/2027	3,846		—
$270 million	3.05%	11/01/2022	12/31/2027	9,806		—
C$250 million	3.59%	9/23/2022	12/31/2027	1,640		—
			Total	$	22,096	$	—


Notional	Fixed Base Interest Rate Swap	Effective Date	Expiration Date	Asset Fair Value as of December 31, 2023		Liability Fair Value as of December 31, 2023
$200 million	3.05%	12/29/2023	7/30/2027	$	3,687	$	—
$175 million	3.47%	11/30/2022	7/30/2027	788		—
$270 million	3.05%	11/01/2022	12/31/2027	5,106		—
C$250 million	3.59%	9/23/2022	12/31/2027	—		330
			Total	$	9,581	$	330


		Fair Value
	Fair Value Hierarchy	June 30, 2024		December 31, 2023

Measured at fair value during the current reporting period:
Interest rate swap assets	Level 2	$	22,096	$	9,581
Interest rate swap liabilities	Level 2	—		$	330
Cross currency swap asset	Level 2	$	7,826	$	5,899

Disclosed at fair value:
Senior unsecured notes, term loans, and revolving credit facility	Level 3	$	3,017,147	$	2,821,064


	Three Months Ended June 30, 2024
	North America		Europe		Asia-Pacific		South America		Total
Warehouse rent and storage	$	213,562	$	18,381	$	18,301	$	2,065	$	252,309
Warehouse services	272,698		25,213		33,366		1,439		332,716
Transportation	24,831		15,608		9,531		667		50,637


	Derivative Assets				Derivative Liabilities
	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
	(In thousands)
Designated derivatives
Foreign exchange contracts	$	7,826	$	5,899	$	—	$	—
Interest rate contracts	22,096		9,581		—		330
Total fair value of derivatives	$	29,922	$	15,480	$	—	$	330


	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative				Location of Gain or (Loss) Reclassified from AOCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

	Three Months Ended June 30,					Three Months Ended June 30,
	2024		2023			2024		2023
Interest rate contracts	$	4,273	$	24,542	Interest expense	$	4,288	$	3,311
Interest rate contracts	—		—		Loss on debt extinguishment and termination of derivative instruments(1)	(324)		(627)
Foreign exchange contracts	(1,698)		1,478		Foreign currency exchange loss, net	(2,387)		842
Foreign exchange contracts	—		—		Interest expense	62		135
Total designated cash flow hedges	$	2,575	$	26,020		$	1,639	$	3,661


Third-party managed	4,148		—		5,783		—		9,931
Total revenues (1)	515,239		59,202		66,981		4,171		645,593
Lease revenue (2)	12,668		1,229		1,465		—		15,362
Total revenues from contracts with all customers	$	527,907	$	60,431	$	68,446	$	4,171	$	660,955


	Three Months Ended June 30, 2023
	North America		Europe		Asia-Pacific		South America		Total
Warehouse rent and storage	$	222,990	$	21,164	$	17,489	$	1,874	$	263,517
Warehouse services	246,268		24,338		34,078		1,303		305,987
Transportation	28,680		20,477		8,260		655		58,072
Third-party managed	4,778		—		5,590				10,368
Total revenues (1)	502,716		65,979		65,417		3,832		637,944
Lease revenue (2)	10,265		1,401		—		—		11,666
Total revenues from contracts with all customers	$	512,981	$	67,380	$	65,417	$	3,832	$	649,610


	Six Months Ended June 30, 2024
	North America		Europe		Asia-Pacific		South America		Total
Warehouse rent and storage	$	430,957	$	36,245	$	37,363	$	3,577	$	508,142
Warehouse services	540,486		50,201		67,856		2,459		661,002
Transportation	57,726		30,504		18,089		1,171		107,490
Third-party managed	8,586		—		11,762		—		20,348
Total revenues (1)	1,037,755		116,950		135,070		7,207		1,296,982
Lease revenue (2)	24,745		2,743		1,465		—		28,953
Total revenues from contracts with all customers	$	1,062,500	$	119,693	$	136,535	$	7,207	$	1,325,935


	Six Months Ended June 30, 2023
	North America		Europe		Asia-Pacific		South America		Total
Warehouse rent and storage	$	442,072	$	41,709	$	35,154	$	3,576	$	522,511
Warehouse services	507,899		50,694		68,450		2,588		629,631
Transportation	64,061		43,883		16,932		1,274		126,150
Third-party managed	12,341		—		11,386		—		23,727
Total revenues (1)	1,026,373		136,286		131,922		7,438		1,302,019
Lease revenue (2)	21,315		2,765		—		—		24,080
Total revenues from contracts with all customers	$	1,047,688	$	139,051	$	131,922	$	7,438	$	1,326,099


	Spot Foreign exchange rates	Average foreign exchange rates for the three months ended	Average foreign exchange rates for the six months ended	Spot Foreign exchange rates	Average foreign exchange rates for the three months ended (1)	Average foreign exchange rate for the six months ended (1)
	June 30, 2024			June 30, 2023
Argentinian peso	0.001	0.001	0.001	0.004	0.004	0.004
Australian dollar	0.668	0.659	0.658	0.666	0.672	0.668
Brazilian real	0.179	0.192	0.197	0.209	0.206	0.202
British pound	1.265	1.262	1.265	1.270	1.264	1.252
Canadian dollar	0.731	0.731	0.736	0.755	0.753	0.745
Chilean peso	0.001	0.001	0.001	0.001	0.001	0.001
Euro	1.074	1.077	1.081	1.091	1.084	1.089
New Zealand dollar	0.609	0.605	0.609	0.613	0.614	0.618
Polish zloty	0.249	0.250	0.250	0.246	0.243	0.240


Same Store Warehouses			226
Non-Same Store Warehouses (1)			9
Third-Party Managed Warehouses			4
Total Warehouses			239


	Three Months Ended June 30,									Change
	2024 Actual			2024 Constant Currency(1)			2023 Actual			Actual		Constant Currency
Number of total warehouses	235						237
	(Dollars in thousands)
Rent and storage	$	267,671		$	273,751		$	275,183		(2.7)	%	(0.5)	%
Warehouse services	332,716			337,351			305,987			8.7	%	10.3	%
Total warehouse segment revenues	600,387			611,102			581,170			3.3	%	5.2	%

Power	37,082			38,124			35,992			3.0	%	5.9	%
Other facilities costs (2)	62,385			64,065			61,172			2.0	%	4.7	%
Labor	245,626			248,879			253,802			(3.2)	%	(1.9)	%
Other services costs (3)	50,763			51,934			57,362			(11.5)	%	(9.5)	%
Total warehouse segment cost of operations	$	395,856		$	403,002		$	408,328		(3.1)	%	(1.3)	%

Warehouse segment contribution (NOI)	$	204,531		$	208,100		$	172,842		18.3	%	20.4	%
Warehouse rent and storage contribution (NOI)	$	168,204		$	171,562		$	178,019		(5.5)	%	(3.6)	%
Warehouse services contribution (NOI)	$	36,327		$	36,538		$	(5,177)		(801.7)	%	(805.8)	%

Total warehouse segment margin	34.1		%	34.1		%	29.7		%	433 bps		431 bps
Rent and storage margin	62.8		%	62.7		%	64.7		%	-185 bps		-202 bps
Warehouse services margin	10.9		%	10.8		%	(1.7)		%	1261 bps		1252 bps


	Three Months Ended June 30,						Change
Units in thousands except per pallet and site number data - unaudited	2024			2023
Number of same store sites	226			226
Same store rent and storage:

Economic occupancy
Average economic occupied pallets	4,165			4,468			(6.8)	%
Economic occupancy percentage	79.4		%	84.7		%	-526 bps
Same store rent and storage revenues per average economic occupied pallet	$	61.94		$	59.12		4.8	%
Constant currency same store rent and storage revenues per average economic occupied pallet	$	63.38		$	59.12		7.2	%

Physical occupancy
Average physical occupied pallets	3,615			4,099			(11.8)	%
Average physical pallet positions	5,245			5,277			(0.6)	%
Physical occupancy percentage	68.9		%	77.7		%	-875 bps
Same store rent and storage revenues per average physical occupied pallet	$	71.34		$	64.44		10.7	%
Constant currency same store rent and storage revenues per average physical occupied pallet	$	73.02		$	64.44		13.3	%

Same store warehouse services:
Throughput pallets (in thousands)	8,717			8,873			(1.8)	%
Same store warehouse services revenues per throughput pallet	$	37.26		$	33.74		10.4	%
Constant currency same store warehouse services revenues per throughput pallet	$	37.79		$	33.74		12.0	%

Number of non-same store sites	9			11
Non-same store rent and storage:

Economic occupancy
Average economic occupied pallets	146			112			n/r
Economic occupancy percentage	53.3		%	76.2		%	n/r
Non-same store rent and storage revenues per average economic occupied pallet	$	66.76		$	98.65		n/r
Constant currency non-same store rent and storage revenues per average economic occupied pallet	$	66.90		$	98.65		n/r

Physical occupancy
Average physical occupied pallets	125			88			n/r
Average physical pallet positions	274			147			n/r
Physical occupancy percentage	45.6		%	59.9		%	n/r
Non-same store rent and storage revenues per average physical occupied pallet	$	77.98		$	125.56		n/r
Constant currency non-same store rent and storage revenues per average physical occupied pallet	$	78.14		$	125.56		n/r

Non-same store warehouse services:
Throughput pallets (in thousands)	307			245			n/r
Non-same store warehouse services revenues per throughput pallet	$	25.89		$	26.82		n/r
Constant currency non-same store warehouse services revenues per throughput pallet	$	25.99		$	26.82		n/r


	Six Months Ended June 30,				Change
Acquisition, cyber incident and other, net	2024		2023		$		%
Project Orion expenses	$	19,798	$	4,488	$	15,310	n/r
Severance costs	4,864		6,209		(1,345)		(21.7)	%
Acquisition and integration related costs	2,351		4,188		(1,837)		(43.9)	%
Other, net	(833)		499		(1,332)		n/r
Cyber incident related costs, net of insurance recoveries	(8,169)		18,998		(27,167)		n/r
Total acquisition, cyber incident and other, net	$	18,011	$	34,382	$	(16,371)	(47.6)	%
n/r- not relevant


We use the following non-GAAP financial measures as supplemental performance measures of our business: NAREIT FFO, Core FFO, Adjusted FFO, NAREIT EBITDAre, and Core EBITDA all of which are further defined below. Additionally we use NOI, Constant Currency metrics and Same Store metrics further described above.
We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S. GAAP and gains or losses from sales of previously depreciated operating real estate and other assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and our share of reconciling items for partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs.


We calculate core funds from operations, or Core FFO, as NAREIT FFO adjusted for the effects of gain or loss on the sale of non-real estate assets; Acquisition, cyber incident, and other, net; Loss on debt extinguishment and termination of derivative instruments; Foreign exchange gain (loss); Gain on legal settlement related to prior period operations; Project Orion – Deferred Costs Amortization ; Gain on sale of LATAM joint venture; Net loss from discontinued operations; Impairment of related party loan receivable; and Loss on put option. We also adjust Core FFO for Our share of reconciling items related to partially owned entities. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.
However, because NAREIT FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the usefulness of NAREIT FFO and Core FFO as a measure of our performance may be limited.
We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of Amortization of deferred financing costs and pension withdrawal liability, Amortization of below/above market leases, Straight-line rental revenue and expense adjustment, net, Deferred income taxes benefit, Stock-based compensation expense expense, Non-real estate depreciation and amortization, and Maintenance capital expenditures. We also adjust for AFFO attributable to Our share of reconciling items related to partially owned entities and discontinued operations. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.
FFO, Core FFO and Adjusted FFO are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs. FFO, Core FFO and Adjusted FFO should be evaluated along with U.S. GAAP net income (loss) and net income or loss per diluted share (the most directly comparable U.S. GAAP measures) in evaluating our operating performance. FFO, Core FFO and Adjusted FFO do not represent net income or cash flows from operating activities in accordance with U.S. GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our condensed consolidated statements of operations included elsewhere in this Quarterly Report on Form 10-Q. FFO, Core FFO and Adjusted FFO should be considered as supplements, but not alternatives, to our net income (loss) or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculated by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do. The table below reconciles FFO, Core FFO and Adjusted FFO to net (loss) income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP.


Reconciliation of Net Income (Loss) to NAREIT FFO, Core FFO, and Adjusted FFO
(In thousands)
	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(64,409)	$	(104,802)	$	(54,607)	$	(107,373)
Real estate related depreciation	56,410		54,740		112,685		109,281
Gain from sale of real estate	—		(2,528)		(3,514)		(2,337)
Net loss on asset disposals	53		—		93		—
Our share of reconciling items related to partially owned entities	418		232		566		1,135
NAREIT FFO (b)	(7,528)		(52,358)		55,223		706
Adjustments:
Net (gain) loss on sale of non-real assets	(548)		289		(568)		709
Acquisition, cyber incident, and other, net	3,013		27,235		18,011		34,382
Loss on debt extinguishment and termination of derivative instruments	110,682		627		115,864		1,172
Foreign currency exchange (gain) loss	(11,321)		212		(10,948)		(246)
Gain on legal settlement related to prior period operations	—		—		(6,104)		—
Project Orion deferred costs amortization	581		—		581		—
Our share of reconciling items related to partially owned entities	144		(27)		280		101
Net loss from discontinued operations	—		8,275		—		8,275
Impairment of related party receivable	—		21,972		—		21,972
Loss on put option	—		56,576		—		56,576
Gain on sale of LATAM JV	—		(304)		—		(304)
Core FFO applicable to common stockholders (b)	95,023		62,497		172,339		123,343
Adjustments:
Amortization of deferred financing costs and pension withdrawal liability	1,294		1,279		2,583		2,519
Amortization of below/above market leases	360		375		728		777
Straight-line rental expense (revenue) adjustment	367		361		956		(130)
Deferred income tax benefit	(4,353)		(1,459)		(3,734)		(5,080)
Stock-based compensation expense	6,064		4,639		12,683		11,609
Non-real estate depreciation and amortization	33,239		30,152		69,059		60,635
Maintenance capital expenditures (a)	(22,832)		(22,590)		(40,765)		(38,834)
Our share of reconciling items related to partially owned entities	235		303		461		607
Adjusted FFO applicable to common stockholders (b)	$	109,397	$	75,557	$	214,310	$	155,446


			Recasted Six Months Ended June 30,
(in thousands)			2023
NAREIT FFO			$74
Core FFO applicable to common stockholders			$125,044
Adjusted FFO applicable to common stockholders			$157,063


We calculate NAREIT EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of NAREIT, defined as, net loss before interest expense, income tax expense (benefit), depreciation and amortization, gain or loss on sale of real estate, and adjustment to reflect share of EBITDAre of partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and useful life of related assets among otherwise comparable companies.
We also calculate our Core EBITDA as EBITDAre further adjusted for Acquisition, cyber incident, and other, net; Loss on partially owned entities; Foreign currency exchange gain; Gain on sale of LATAM joint venture; Stock based compensation expense; Loss on debt extinguishment and terminations of derivatives instruments; (Gain) loss on other asset disposals; Gain on legal settlement related to prior period operations; Project Orion – Deferred Costs Amortization ; Net loss from discontinued operations; Net loss from discontinued operations; Impairment of related party receivable; and Loss on put option. We believe that the presentation of Core EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are otherwise included in EBITDAre but which we do not believe are indicative of our core business operations. EBITDAre and Core EBITDA are not measurements of financial performance under U.S. GAAP, and our EBITDAre and Core EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Core EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with U.S. GAAP. Our calculations of EBITDAre and Core EBITDA have limitations as analytical tools, including:


We use EBITDAre and Core EBITDA as measures of our operating performance and not as measures of liquidity. The table below reconciles EBITDAre and Core EBITDA to net (loss) income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP.


Reconciliation of Net (Loss) Income to NAREIT EBITDAre and Core EBITDA
(In thousands)
	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	(64,409)		(104,802)		(54,607)		(107,373)
Depreciation and amortization	89,649		84,892		181,744		169,916
Interest expense	33,180		36,431		66,610		70,854
Income tax (benefit) expense	(2,496)		464		(502)		(1,180)
Gain from sale of real estate	—		(2,528)		(3,514)		(2,337)
Adjustment to reflect share of EBITDAre of partially owned entities	1,520		3,085		2,990		5,968
NAREIT EBITDAre (a)	$	57,444	$	17,542	$	192,721	$	135,848
Adjustments:
Acquisition, cyber incident, and other, net	3,013		27,235		18,011		34,382
Loss from investments in partially owned entities	1,034		709		1,983		3,738
Foreign currency exchange (gain) loss	(11,321)		212		(10,948)		(246)
Stock-based compensation expense	6,064		4,639		12,683		11,609
Loss on debt extinguishment and termination of derivative instruments	110,682		627		115,864		1,172
(Gain) loss on other asset disposals	(495)		289		(475)		709
Gain on legal settlement related to prior period operations	—		—		(6,104)		—
Project Orion deferred costs amortization	581		—		581		—
Reduction in EBITDAre from partially owned entities	(1,520)		(3,085)		(2,990)		(5,968)
Gain on sale of LATAM joint venture	—		(304)		—		(304)
Net loss from discontinued operations	—		8,275		—		8,275
Impairment of related party loan receivable	—		21,972		—		21,972
Loss on put option	—		56,576		—		56,576
Core EBITDA	$	165,482	$	134,687	$	321,326	$	267,763


			Recasted Six Months Ended June 30,
(in thousands)			2023
NAREIT EBITDAre			$134,414


Debt Summary:
Fixed rate(1)	$	2,583,276
Variable rate - unhedged	619,636
Total senior unsecured notes, term loans and borrowings under revolving line of credit	3,202,912

Sale-leaseback financing obligations	81,201
Financing lease obligations	95,768
Total debt and debt-like obligations	$	3,379,881

Percent of total debt and debt-like obligations:
Fixed rate(1)	81.7		%
Variable rate	18.3		%

Effective interest rate as of June 30, 2024	4.16		%