What changed in AMERICOLD REALTY TRUST's 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of AMERICOLD REALTY TRUST's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+664 added−690 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)
Top changes in AMERICOLD REALTY TRUST's 2024 10-K
664 paragraphs added · 690 removed · 253 edited across 8 sections
- Item 1A. Risk Factors+6 / −346 · 6 edited
- Item 1C. Cybersecurity+309 / −12 · 11 edited
- Item 7. Management's Discussion & Analysis+225 / −203 · 145 edited
- Item 1. Business+87 / −82 · 63 edited
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+19 / −23 · 13 edited
Item 1. Business
Business — how the company describes what it does
63 edited+24 added−19 removed63 unchanged
Item 1. Business
Business — how the company describes what it does
63 edited+24 added−19 removed63 unchanged
2023 filing
2024 filing
Biggest changeThe following table presents summary information concerning our 25 largest customers in our warehouse segment, based on warehouse segment revenues for the year ended December 31, 2023: Network Utilization % of Warehouse Revenue (1) # of Sites Credit Rating (Moody’s/S&P) (2) Multi Location Dedicated Sites Value Added Services Transportation Consolidation Technology Integration Committed Contract or Lease (3) Retailer 4.8% 6 NR | NR ü ü ü ü ü ü Producer 4.3% 32 BBB- | Baa3 ü ü ü ü ü Producer 3.2% 58 BBB | Baa2 ü ü ü ü ü ü Retailer 3.1% 17 AA | Aa2 ü ü ü ü ü ü Retailer 2.7% 11 BBB | Baa2 ü ü ü ü ü Producer 2.7% 20 NR | NR ü ü ü ü ü ü Producer 2.7% 26 BBB | Baa2 ü ü ü ü ü Retailer 2.0% 5 BBB+ | Baa1 ü ü ü ü Producer 1.9% 19 BB+ | Ba2 ü ü ü ü ü Producer 1.8% 19 NR | NR ü ü ü ü ü Producer 1.6% 19 A+ | A1 ü ü ü ü ü ü Retailer 1.5% 5 BBB+ | Baa1 ü ü ü ü ü ü Producer 1.5% 5 NR | NR ü ü ü ü Producer 1.5% 16 A+ | A1 ü ü ü ü ü ü Producer 1.5% 42 A | A2 ü ü ü ü ü ü Producer 1.4% 25 A- | A1 ü ü ü ü ü ü Producer 1.4% 24 BBB- | Baa3 ü ü ü ü Producer 1.4% 11 BBB | Baa2 ü ü ü ü ü ü Producer 1.3% 32 NR | NR ü ü ü ü ü Producer 1.3% 19 NR | NR ü ü ü ü ü Producer 1.2% 24 BBB- | Baa3 ü ü ü ü ü Producer 1.1% 25 NR | NR ü ü ü ü ü Producer 1.0% 19 NR | NR ü ü ü ü ü ü Retailer 1.0% 10 BBB+ | Baa1 ü ü ü ü Producer 0.9% 5 NR | NR ü ü ü ü Total 48.8% (1) Based on warehouse revenues for the year ended December 31, 2023.
Biggest changeThe following table presents summary information concerning our 25 largest customers in our warehouse segment, based on warehouse segment revenues for the year ended December 31, 2024: Network Utilization % of Warehouse Revenues (1) # of Sites Credit Rating (Moody’s/S&P) (2) Multi Location Dedicated Sites Value Added Services Transportation Consolidation Technology Integration Committed Contract or Lease (3) Retailer 5.3% 5 NR | NR ü ü ü ü ü ü Producer 4.7% 29 BBB- | Baa3 ü ü ü ü ü Retailer 3.5% 13 AA | Aa2 ü ü ü ü ü ü Producer 3.1% 26 BBB | Baa2 ü ü ü ü ü Producer 3.0% 24 NR | NR ü ü ü ü ü ü Retailer 2.8% 13 BBB | Baa2 ü ü ü ü ü Producer 2.6% 55 BBB | Baa2 ü ü ü ü ü ü Producer 2.3% 14 BB+ | Ba2 ü ü ü ü ü Retailer 2.2% 4 BBB+ | Baa1 ü ü ü ü ü Producer 1.8% 21 NR | NR ü ü ü ü ü Producer 1.8% 22 NR | NR ü ü ü ü Retailer 1.8% 6 BBB+ | Baa1 ü ü ü ü ü ü Producer 1.6% 10 BBB | Baa2 ü ü ü ü ü ü Producer 1.6% 20 A+ | A1 ü ü ü ü ü ü Producer 1.6% 4 NR | NR ü ü ü ü Producer 1.5% 14 A+ | A1 ü ü ü ü ü ü Producer 1.5% 44 A | A2 ü ü ü ü ü ü Producer 1.5% 32 NR | NR ü ü ü ü ü Producer 1.2% 21 A- | A1 ü ü ü ü ü ü Producer 1.1% 23 NR | NR ü ü ü ü ü Producer 1.1% 18 NR | NR ü ü ü ü ü ü Producer 1.0% 4 NR | NR ü ü ü ü Retailer 0.9% 5 NR | NR ü ü ü Producer 0.9% 21 BBB- | Baa3 ü ü ü ü Producer 0.8% 11 BBB | Baa2 ü ü ü ü Total 51.2% (1) Based on warehouse revenues for the year ended December 31, 2024.
Similarly, we are insured against the risk of direct physical damage in amounts we believe to be adequate to reimburse us on a replacement basis for costs incurred to repair or rebuild each property, including loss of business profits during the reconstruction period. We also carry coverage for customers’ products in our warehouses that are damaged due to our negligence.
We are insured against the risk of direct physical damage in amounts we believe to be adequate to reimburse us on a replacement basis for costs incurred to repair or rebuild each property, including loss of business profits during the reconstruction period. We also carry coverage for customers’ products in our warehouses that are damaged due to our negligence.
In addition, we maintain excess loss coverage to insure against losses in excess of the reserves that we have established for these claims in amounts that we consider appropriate. We will not carry insurance for generally uninsured losses such as loss from riots or war; however, we do include coverage for risks across all programs for acts of terrorism.
In addition, we maintain excess loss coverage to insure against losses in excess of the reserves that we have established for these claims in amounts that we consider appropriate. We do not carry insurance for generally uninsured losses such as loss from riots or war; however, we do include coverage for risks across all programs for acts of terrorism.
We carry earthquake insurance on our properties in areas known to be seismically active and flood insurance on our properties in areas known to be flood zones, in an amount and with deductibles which we believe are commercially reasonable. We also carry insurance coverage relating to cybersecurity incidents commensurate with the size and nature of our operations. 14
We carry earthquake insurance on our properties in areas known to be seismically active and flood insurance on our properties in areas known to be flood zones, in an amount and with deductibles which we believe are commercially reasonable. We also carry insurance coverage relating to cybersecurity incidents commensurate with the size and nature of our operations.
We believe the creditworthiness and geographic diversity of our customer base provide us with stable cash flows and a strong platform for growth. The 6 weighted average length of our relationship with our 25 largest customers in our warehouse segment exceeds 35 years.
We believe the creditworthiness and geographic diversity of our customer base provide us with stable cash flows and a strong platform for growth. The weighted average length of our relationship with our 25 largest customers in our warehouse segment exceeds 35 years.
Ownership of our integrated cold chain network enhances our ability to efficiently reposition customers and undertake capital improvements or other modifications on their behalf. While some of our warehouses are leased, we own 75%, excluding ground leases, of our warehouses.
Ownership of our integrated cold chain network enhances our ability to efficiently reposition customers and undertake capital improvements or other modifications on their behalf. While some of our warehouses are leased, we own over 75%, excluding ground leases, of our warehouses.
In addition, we compete for the business of customers and potential customers who may choose to provide temperature-controlled warehousing in-house. North America Outside the seven largest owners of temperature-controlled warehouses, the North America temperature-controlled warehouse industry is highly fragmented among numerous owners and operators. We believe our main competitors include Lineage Logistics, LLC, United States Cold Storage, Inc.
In addition, we compete for the business of customers and potential customers who may choose to provide temperature-controlled warehousing in-house. North America Outside the seven largest owners of temperature-controlled warehouses, the North America temperature-controlled warehouse industry is highly fragmented among numerous owners and operators. We believe our main competitors include Lineage, Inc., United States Cold Storage, Inc.
In order to mitigate the volatility in our revenue and earnings caused by seasonal business, we have implemented fixed commitment contracts with certain of our customers. Our customers with fixed commitment contracts pay for guaranteed warehouse space in order to maintain their required inventory levels, which is especially helpful to them during periods of peak physical occupancy.
In order to mitigate the volatility in our revenues and earnings caused by seasonal business, we have implemented fixed commitment contracts with certain of our customers. Our customers with fixed commitment contracts pay for guaranteed warehouse space in order to maintain their required inventory levels, which is especially helpful to them during periods of peak physical occupancy.
The Food Safety Modernization Act, or FSMA significantly expanded the FDA’s authority over food safety, providing the FDA with tools to proactively ensure the safety of the entire food system, including hazard analysis and preventive controls requirements, food safety planning, requirements for sanitary transportation of food, and increased inspections and mandatory food recalls under certain circumstances.
The Food Safety Modernization Act (the “FSMA”) significantly expanded the FDA’s authority over food safety, providing the FDA with tools to proactively ensure the safety of the entire food system, including hazard analysis and preventive controls requirements, food safety planning, requirements for sanitary transportation of food, and increased inspections and mandatory food recalls under certain circumstances.
Continue to Increase Committed Revenue in Our Warehouse Segment Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an as-utilized, on-demand basis.
Continue to Increase Committed Revenues in Our Warehouse Segment Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an as-utilized, on-demand basis.
Capitalize on Increased Outsourcing by Leading Global Food Producers, Distributors, Retailers and E-Tailers 4 Over the last 35 years, frozen food producers, distributors, retailers and e-tailers have increasingly outsourced their temperature-controlled warehousing needs to increase efficiency, reduce costs and redeploy capital into core businesses.
Capitalize on Increased Outsourcing by Leading Global Food Producers, Distributors, Retailers and E-Tailers Over the last 40 years, frozen food producers, distributors, retailers and e-tailers have increasingly outsourced their temperature-controlled warehousing needs to increase efficiency, reduce costs and redeploy capital into core businesses.
Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, the United States Food and Drug Administration, or the FDA, requires us to register all warehouses in which food is stored and further requires us to maintain records of sources and recipients of food for purposes of food recalls.
Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, the United States Food and Drug Administration (the “FDA”), requires us to register all warehouses in which food is stored and further requires us to maintain records of sources and recipients of food for purposes of food recalls.
We anticipate that cold chain participants will continue to make certain of their “in-house” temperature-controlled warehouses available for sale in the future and, accordingly, will continue to look to third-party providers to meet their temperature-controlled warehouse storage and service needs in related geographic markets.
We anticipate that cold chain participants will continue to make certain of their “in-house” temperature-controlled warehouses available for sale in the future and, accordingly, will continue to look to third- 4 Table of C ontents party providers to meet their temperature-controlled warehouse storage and service needs in related geographic markets.
(3) A check mark indicates that the customer had at least one fixed commitment contract or lease with us as of December 31, 2023. 7 Seasonality We are involved in providing services to food producers, distributors, retailers and e-tailers whose businesses, in some cases, are seasonal or cyclical.
(3) A check mark indicates that the customer had at least one fixed commitment contract or lease with us as of December 31, 2024. 7 Table of C ontents Seasonality We are involved in providing services to food producers, distributors, retailers and e-tailers whose businesses, in some cases, are seasonal or cyclical.
The total warehouse segment revenues generated by our 25 largest customers in our warehouse segment represent 49%, 47%, and 49% of our total warehouse segment revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
The total warehouse segment revenues generated by our 25 largest customers in our warehouse segment represent 51%, 49%, and 47% of our total warehouse segment revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
In addition, we hold minority interests in two joint ventures, one with SuperFrio, which owns or operates 35 temperature-controlled warehouses in Brazil, and one with RSA JV, which operates 2 temperature-controlled warehouses in Dubai. We view and manage our business through three primary business segments: warehouse, transportation, and third-party managed.
In addition, we hold minority interests in two joint ventures, one with SuperFrio, which owns or operates 34 temperature-controlled warehouses in Brazil, and one with RSA joint venture, which operates two temperature-controlled warehouses in Dubai. We view and manage our business through three primary business segments: warehouse, transportation, and third-party managed.
Refer to Note 3-Business Combinations and Asset Acquisitions of the Consolidated Financial Statements for further information regarding the acquisition and disposition of the Comfrio portfolio. For further information about the Company’s joint ventures as of December 31, 2023, refer to Note 4 -Investments in Partially Owned Entities of the Consolidated Financial Statements.
Refer to Note 3 -Business Combinations, Asset Acquisitions and Discontinued Operations of the Consolidated Financial Statements for further information regarding the acquisition and disposition of the Comfrio portfolio. For further information about the Company’s joint ventures as of December 31, 2024, refer to Note 4 - Investments in and Advances to Partially Owned Entities of the Consolidated Financial Statements.
Our core business is our warehouse segment, where we provide temperature-controlled warehouse storage and related handling and other warehouse services. We collect rent and storage fees to store customer’s frozen and perishable food and other products.
Our core business is our warehouse segment, where we provide temperature-controlled warehouse storage and related handling and other warehouse services. We collect rent and storage fees to store customer’s frozen and perishable food and other products within our real estate portfolio.
(an affiliate of John Swire & Sons), Interstate Warehousing, FreezPak Logistics, Conestoga Cold Storage, and Congebec Logistics, Inc, in addition to numerous other local, regional and national temperature-controlled warehouse owners, operators and developers. Europe 8 Our main competitors in Europe include Constellation Cold Storage, Lineage Logistics, LLC and NewCold Advanced Logistics.
(an affiliate of John Swire & Sons), Interstate Warehousing, Inc., FreezPak Logistics, Vertical Cold Storage, Arcadia Cold Storage & Logistics, and Conestoga Cold Storage, in addition to numerous other local, regional and national temperature-controlled warehouse owners, operators and developers. 8 Table of C ontents Europe Our main competitors in Europe include Constellation Cold Storage, Lineage Logistics, LLC and NewCold Advanced Logistics.
Total Rewards We provide programs and benefits designed to attract, retain and reward high-performing associates.
We provide programs and benefits designed to attract, retain and reward high-performing associates.
As a result of the regulatory framework from the FDA, the USDA and other local regulatory requirements, we subject our warehouses to periodic food safety audits which are for the most part carried out by a recognized global, third-party provider of such audits.
Any products destined for export must also satisfy the applicable export requirements. As a result of the regulatory framework from the FDA, the USDA and other local regulatory requirements, we subject our warehouses to periodic food safety audits which are for the most part carried out by a recognized global, third-party provider of such audits.
Occupational Safety and Health Act, or OSHA 13 Our properties in the United States are subject to regulation under OSHA, which requires employers to provide associates with a safe work environment free from hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress and unsanitary conditions.
Occupational Safety and Health Act Our properties in the U.S. are subject to regulation under Occupational Safety and Health Act of 1970 (“OSHA”), which requires employers to provide associates with a safe work environment free from hazards, such as exposure 13 Table of C ontents to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress and unsanitary conditions.
This is in addition to requirements that we satisfy existing Good Manufacturing Practices with respect to the holding of foods, as set forth in FDA regulations. The USDA also grants to some of our warehouses “ID status,” which entitles us to handle products of the USDA. Any products destined for export must also satisfy the applicable export requirements.
This is in addition to requirements that we satisfy existing Good Manufacturing Practices with respect to the holding of foods, as set forth in FDA regulations. The United States Department of Agriculture (the “USDA”) also grants to some of our warehouses “ID status,” which entitles us to handle products of the USDA.
We are devoted to fostering a work environment where associates from diverse backgrounds are culturally and socially appreciated as their unique selves and can thrive as valued members of the organization. We are committed to developing and implementing programs and practices that create a supportive learning environment and encompasses communication of diverse perspectives and experiences.
We are dedicated to fostering a work environment where associates from diverse backgrounds are appreciated as their unique selves and can thrive as 9 Table of C ontents valued members of the organization. We are committed to developing and implementing programs and practices that foster a supportive learning environment and encompass communication of diverse perspectives and experiences.
Our services include consolidation ( i.e. , combining products for efficient shipment), freight under management services ( i.e. , arranging and overseeing transportation of customer inventory) and dedicated transportation, each designed to improve efficiency and reduce transportation and logistics costs to our customers. Third party managed.
Our services include consolidation services ( i.e. , consolidating a customer’s products with those of other customers for more efficient shipment), freight under management services ( i.e. , arranging for and overseeing transportation of customer inventory) and dedicated transportation services, each designed to improve efficiency and reduce transportation and logistics costs to our customers.
RSA Cold Holdings Limited contributed their Dubai cold storage business, which consists of a single cold storage warehouse, in exchange for the remaining 51% equity interest in the joint venture.
In exchange for our equity interest, the Company paid $4.0 million in total. RSA Cold Holdings Limited contributed their Dubai cold storage business, which consisted of a single cold storage warehouse, in exchange for the remaining 51% equity interest in the joint venture.
Each issued and outstanding share of beneficial interest in Americold Realty Trust was converted into one share of common stock in Americold Realty Trust, Inc. As a result of this conversion, several references in this Form 10-K have been updated accordingly. Despite this conversion, the Company continues to operate as a REIT for U.S. federal income tax purposes.
Each issued and outstanding share of beneficial interest in Americold Realty Trust was converted into one share of common stock in Americold Realty Trust, Inc. As a result of this conversion, several references in this Form 10-K have been updated accordingly.
As of December 31, 2023, we operated a global network of 245 temperature-controlled warehouses encompassing approximately 1.5 billion cubic feet, with 197 warehouses in North America, 27 in Europe, 19 warehouses in Asia-Pacific, and 2 warehouses in South America.
As of December 31, 2024, we operated a global network of 239 temperature-controlled warehouses encompassing approximately 1.4 billion cubic feet, with 195 warehouses in North America, 25 warehouses in Europe, 17 warehouses in Asia-Pacific, and 2 warehouses in South America.
Our Code of Business Conduct and Ethics is also made available through our website under “Investors - Governance Documents”. 3 BUSINESS STRATEGY AND OPERATING SEGMENTS We were formed as a Maryland REIT on December 27, 2002 and subsequently converted to a Maryland corporation on May 26, 2022, pursuant to the Articles of Conversion, as approved by the stockholders at our annual stockholder meeting on May 17, 2022.
BUSINESS STRATEGY AND OPERATING SEGMENTS We were formed as a Maryland REIT on December 27, 2002 and subsequently converted to a Maryland corporation on May 25, 2022, pursuant to the Articles of Conversion, as approved by the stockholders at our annual stockholder meeting on May 17, 2022.
Because our most valuable asset is our people, we are constantly looking to give associates the wellbeing support they need with the goal of having a healthier and more engaged workforce. We look at wellbeing from a holistic perspective inclusive of physical, mental, and financial wellness. In the U.S., we offer a Health Reimbursement Account program funded solely by Americold.
Compensation and Benefits Because our most valuable asset is our people, we are constantly looking to give associates the well-being support they need with the goal of having a healthier and more engaged workforce. We look at well-being from a holistic perspective inclusive of physical, mental, and financial wellness.
ITEM 1. Business The Company We are the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. We are organized as a self-administered and self-managed REIT with proven operating, development and acquisition expertise.
ITEM 1. Business The Company We are a global leader in temperature-controlled logistics, real estate, and value-added services focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. We are organized as a self-administered and self-managed publicly traded real estate investment trust (“REIT”) with proven operating, development and acquisition expertise.
To foster a stronger sense of ownership, aid in retention and align the interests of our associates with our stockholders, we provide restricted stock units to eligible associates through our equity incentive programs.
For financial wellness, we offer a variety of retirement programs globally that provide associates flexibility towards their retirement options. To foster a stronger sense of ownership, aid in retention and align the interests of our associates with our shareholders, we provide restricted stock units to eligible associates through our equity incentive programs.
It is our policy to recruit talent 9 based on skill, knowledge, and experience, without discrimination. We evaluate compensation equity annually and ensure action plans are in place to address pay disparities when applicable. During 2023, we conducted an enterprise-wide engagement survey, which was available in 16 languages that focused on measuring the engagement and inclusion of our associates.
It is our policy to recruit talent based on skill, knowledge, and experience, without discrimination. We evaluate compensation equity annually and ensure action plans are in place to address pay disparities when applicable. In 2024, we administered a company-wide engagement survey, available in 16 languages, to emphasize engagement, development, culture, and inclusion among associates.
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 plant maintenance capabilities, global procurement functionality and shared-service operations in certain international regions, among others.
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.
Our Operating Partnership was formed as a Delaware limited partnership on April 5, 2010 and was not impacted by the conversion to a Maryland corporation. Our operations are conducted through our Operating Partnership and its subsidiaries.
Despite this 3 Table of C ontents conversion, the Company continues to operate as a REIT for U.S. federal income tax purposes. Our Operating Partnership was formed as a Delaware limited partnership on April 5, 2010 and was not impacted by the conversion to a Maryland corporation. Our operations are conducted through our Operating Partnership and its subsidiaries.
At the associate level, monthly safety training sessions focus on specific topics (e.g., lockout/tagout, powered industrial truck, personal protective equipment, etc.) and reinforce expectations for safe work practices. Additionally, June is recognized globally as safety month across our facilities with a focus on important safety topics and activities each week.
Our facilities around the world embrace a proactive approach and consistently execute safety-minded programs. At the associate level, monthly safety training sessions focus on specific topics (e.g., lockout/tagout, powered industrial truck, personal protective equipment, etc.) and reinforce expectations for safe work practices.
Under our third-party managed segment, we manage warehouses on behalf of third parties and provide warehouse management services to leading food manufacturers and retailers in their owned facilities. We believe using our third-party management services allows our customers to increase efficiency, lower costs, reduce supply-chain risks and focus on their core businesses.
We believe using our third-party management services allows our customers to increase efficiency, lower costs, reduce supply-chain risks and focus on their core businesses.
We have adopted a supplier code of conduct that seeks to ensure that our suppliers operate within our required code of conduct. We provide code of conduct training so that our associates receive regular training and reminders about our standards. We also maintain an anti-discrimination and anti-harassment policy that includes mandatory harassment training for all managers.
We provide code of conduct training so that our associates receive regular training and reminders about our standards. We also maintain an anti-discrimination and anti-harassment policy that includes mandatory harassment training for all managers. We do not tolerate any form of racism, sexism or injustice within our facilities or across our organization.
We also rolled out Leader Standard Work—a set of recurrent management techniques, tools, and skills—to associates across our operations and HR teams which is intended to improve management performance and foster cross-team communication. 10 Philanthropy Giving Back to the communities where we live and work is at the heart of who we are as a company and reflects the desire of our associates to get involved in ways that are meaningful to them.
Philanthropy Giving Back to the communities where we live and work is at the heart of who we are as a Company and reflects the desire of our associates to get involved in ways that are meaningful to them.
Customers Our global footprint enables us to efficiently serve approximately 3,800 customers as of December 31, 2023, consisting primarily of producers, distributors, retailers and e-tailers of frozen and perishable food products, such as fruits, vegetables, meats, seafood, novelties, dairy and packaged foods.
During the fourth quarter of 2022, we strategically transitioned the management of our largest third-party managed customer’s warehouses to a new third-party provider, and our operations ceased. 6 Table of C ontents Customers Our global footprint enables us to efficiently serve approximately 3,200 customers as of December 31, 2024, consisting primarily of producers, distributors, retailers and e-tailers of frozen and perishable food products, such as fruits, vegetables, meats, seafood, novelties, dairy and packaged foods.
Halls Transport is primarily a transporter that also operates a network of five warehouses. Generally, our other competitors also service the commodity market and operate in only one region. HUMAN CAPITAL RESOURCES Americold is committed to creating a work environment that supports the growth and success of our associates. We have employees located throughout the world.
Halls Transport is primarily a transporter that also operates a network of five warehouses. Generally, our other competitors also service the commodity market and operate in only one region. HUMAN CAPITAL RESOURCES As of December 31, 2024, we had a global workforce of approximately 13,755 employees. Our associates are based in various locations around the world.
The activities associated with Project Orion are expected to be substantially complete within three years from inception. We estimate the aggregate total investment in Project Orion to be approximately $100 million.
The activities associated with Project Orion are expected to be substantially complete within three years from the project’s start date.
The geographic distribution of our associates as of December 31, 2023 is summarized in the following table: Region Number of associates Percentage of workforce North America 11,519 78 % Europe 1,449 10 % Australia/New Zealand 1,610 11 % South America 128 1 % Total 14,706 100 % As of December 31, 2023, approximately 29% of our associates were represented by various local labor unions and associations.
The geographic distribution of our associates as of December 31, 2024, is summarized in the following table: Region Number of associates Percentage of workforce North America 10,762 78 % Europe 1,335 10 % Asia-Pacific 1,531 11 % South America 127 1 % Total 13,755 100 % As of December 31, 2024, approximately 31% of our associates were represented by various local labor unions and associations, and 79 of our 239 warehouses have unionized associates that are governed by 68 different collective bargaining agreements.
We do not tolerate any form of racism, sexism or injustice within our facilities or across our organization. If at any time an associate witnesses an action or situation that is contrary to our code of conduct or policies, they are encouraged to report it immediately.
If at any time an associate witnesses an action or situation that is contrary to our Code of Conduct or policies, they are encouraged to report it immediately. We provide an anonymous Ethics Helpline, which our compliance, legal and human resources teams monitor regularly.
Copies of our annual report will be made available, free of charge, on written request.
Copies of our annual report will be made available, free of charge, on written request. Our Code of Business Conduct and Ethics is also made available through our website under “Investors - Governance Documents”.
Associates in need are encouraged to apply for a grant from the Americold Foundation Fund to ease their financial burden. Safety and Wellbeing Safety is an important focus area and foundational to Americold’s culture. Americold continues to be a Total Recordable Incident Rate (“TRIR”) industry leader by recording numbers well below the refrigerated warehousing and storage industry average of 4.6.
Americold matches all donations dollar for dollar and covers the operating expenses for the fund. Associates in need are encouraged to apply for a grant from the Americold Foundation Fund to ease their financial burden. Safety and Wellbeing Safety is an important focus area and foundational to Americold’s culture.
A Site Safety Committee at each Americold facility meets monthly to develop and promote a healthy and safe environment for all employees and visitors to our facilities. Our committees include associates from every department, including leaders, and focus on feedback provided from all the individuals at the site to drive the overall safety culture.
A Site Safety Committee at each Americold facility meets monthly to develop and promote a healthy and safe environment for all employees and visitors to our facilities through the involvement of all individuals with regards to education, communication, and safe work practices.
On February 28, 2023, the Company purchased a 49% equity interest in a newly formed entity, RSA Cold Holdings Limited (the “RSA JV”), in a transaction that is accounted for as a joint venture. In exchange for our equity interest, the Company paid $4.0 million in total.
Refer to Note 3 - Business Combinations, Asset Acquisitions and Discontinued Operations of the Consolidated Financial Statements for further information on the Company’s acquisitions. On February 28, 2023, the Company purchased a 49% equity interest in a newly formed entity, RSA Cold Holdings Limited (the “RSA joint venture”), in a transaction that is accounted for as a joint venture.
Americold Foundation was introduced to give associates the opportunity to contribute monetary donations to aid members of the Americold family in need. All associates around the world can contribute as well as be recipients of this charitable foundation. Americold matches all donations dollar for dollar and covers all the operating expenses for the fund.
Not only do our associates make a difference in their local community, but they also have strong passion and support for each other. Americold Foundation was introduced to give associates the opportunity to contribute monetary donations for members of the Americold family in need. Associates around the world can contribute as well as be recipients of this charitable foundation.
Supervisors complete Americold’s Behavioral Based Safety (“BBS”) Program, which reinforces desired behaviors and teaches how to constructively address unwanted behaviors. This program is implemented worldwide and serves to make safety part of an open and regular dialogue. Supervisors learn to address unique issues and performance at their site. They also learn effective remediation strategies.
Additionally, June is recognized globally as safety month across our facilities with a focus on important safety topics and activities each week. Supervisors complete Americold’s Behavioral Based Safety (“BBS”) Program, which reinforces desired behaviors and teaches how to constructively address unwanted behaviors. This program is implemented worldwide and serves to make safety part of an open and regular dialogue.
In 2023, we acquired Safeway Freezer Storage Company LLC, Safeway Logistics LLC and T&P Realty LLC (collectively referred to as “Safeway”) for $24.0 million, and Ormeau Cold Storage (“Ormeau”) for 2 AUD$35.1 million or $23.5 million. Refer to Note 3-Business Combinations and Asset Acquisitions of the Consolidated Financial Statements for further information on the Company’s acquisitions.
Recent Acquisitions and Investments in Joint Ventures Over the last several years we have strategically acquired businesses to enhance our global portfolio and integrated network offerings to our customers. 2 Table of C ontents In 2023, we acquired Safeway Freezer Storage Company LLC, Safeway Logistics LLC and T&P Realty LLC (collectively referred to as “Safeway”) for $24.0 million and Ormeau Cold Storage (“Ormeau”) for AUD$35.1 million or $23.5 million.
Globally, we offer comprehensive Employee Assistance Programs that assist associates with personal and/or work-related situations that may impact their job performance, health, and general sense of wellbeing. For financial wellness, we offer a variety of retirement programs globally that provide associates flexibility towards their retirement options.
In 2024, we expanded our U.S. benefits offerings to include musculoskeletal and physical therapy programs, as well as a back-up childcare programs that offers our associates options for unplanned emergencies. Globally, we offer comprehensive Employee Assistance Programs that assist associates with personal and/or work-related situations that may impact their job performance, health, and general sense of well-being.
This program was initially launched in North America with plans to expand globally in 2024. Business Conduct and Ethics We are dedicated to conducting our business consistent with the highest standards of business ethics. Our updated Code of Business Conduct and Ethics sets forth our standards and policies.
Business Conduct and Ethics We are dedicated to conducting our business consistent with the highest standards of business ethics. Our updated Code of Business Conduct and Ethics sets forth our standards and policies. We have adopted a supplier code of conduct that seeks to ensure that our suppliers operate within our required code of conduct.
INSURANCE COVERAGE We carry comprehensive general liability, fire, extended coverage, business interruption, umbrella liability and environmental coverage on all of our properties with limits of liability which we deem adequate.
Additionally, compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we conduct our businesses and adversely affect profitability. 14 Table of C ontents INSURANCE COVERAGE We carry comprehensive general liability, fire, extended coverage, business interruption, umbrella liability and environmental coverage on all of our properties with limits of liability which we deem adequate.
REGULATORY MATTERS Many laws and governmental regulations are applicable to our properties and changes in these laws and regulations, or interpretation of such laws and regulations by agencies and the courts, occur frequently.
We have also adopted a Human Rights Policy overseen by our Board of Directors (the “Board”), which outlines our commitment to the United Nations Universal Declaration of Human Rights, and a policy against modern slavery, ensuring transparency within our business. 12 Table of C ontents REGULATORY MATTERS Many laws and governmental regulations are applicable to our properties and changes in these laws and regulations, or interpretation of such laws and regulations by agencies and the courts, occur frequently.
Our Annual Leadership Conference, a three-day event for nearly 400 site and senior leaders to come together to align strategies and operations, was held in the first quarter of 2023. The conference included workshops, training, engagement, collaboration, and professional growth opportunities. We also continue to offer an executive coaching program to enhance leadership capabilities across the organization.
In the first quarter of 2024, our Annual Leadership Conference, a three-day event, brought together nearly 400 site and senior leaders to align strategies and operational priorities. The conference featured workshops, training, engagement, best practice sharing, and professional growth opportunities. Throughout 2024, our focus remained on enhancing our data accuracy, streamlining processes and tools within our organization.
We provide an anonymous Ethics Helpline, which our compliance, legal and human resources teams monitor regularly. We take all complaints seriously, and evaluate all claims, conduct internal investigations, and implement appropriate remediation plans if necessary.
We take all complaints seriously, and evaluate all claims, conduct internal investigations, and implement appropriate remediation plans if necessary. The Company’s Audit Committee is routinely briefed on complaints received and has access to reports made through our Ethics Helpline.
Our associates are offered regular opportunities to participate in formal and informal personal growth and professional development programs. Associates completed over 338,612 hours of training in 2023. In September 2023, Americold introduced the Value-Centered Leader Program to support the successful progression of front-line supervisors and managers to lead with the Company’s core values.
Our associates are afforded regular opportunities to participate in formal and informal personal growth and professional development programs. In 2024, our associates completed over 316,890 hours of training.
Since inception, the Company has incurred $61.8 million of implementation costs related to Project Orion of which $43.9 million has been deferred and capitalized within “ Other assets” on the Consolidated Balance Sheets.
Since inception, the Company has incurred $161.4 million of implementation costs related to Project Orion, including expenses reported in “Acquisition, cyber incident, and other, net” on the Consolidated Statements of Operations and costs deferred in “Other assets” on the Consolidated Balance Sheets. The unamortized balance of the Project Orion deferred costs was $80.5 million as of December 31, 2024.
Americold achieved a higher engagement score and a higher associate response rate in 2023 as compared to 2022, continuing our trend of improving year over year. Creating a positive employee experience where individuals and teams feel their work is satisfying and impactful is a key focus area of ours. We continually assess and strive to enhance associate satisfaction and engagement.
Americold experienced increased engagement scores and response rates in 2024 compared to 2023, maintaining our annual improvement trend. Our core priority is to foster a positive employee experience where individuals and teams can find meaning and impact in their work. We continually assess and strive to improve associate satisfaction and engagement.
We finished 2023 with a TRIR of 2.60. Our TRIR is calculated by multiplying the number of recordable cases by 200,000; that product is then divided by exposure hours. Our facilities around the world embrace a proactive approach and consistently execute safety-minded programs.
Americold continues to be a Total Recordable Incident Rate (“TRIR”) industry leader by recording numbers well below the refrigerated warehousing and storage industry’s annual average of 4.3. We finished 2024 with a TRIR of 2.24. Our TRIR is calculated by multiplying the number of recordable cases by 200,000; that product is then divided by exposure hours.
During 2024, we expect to engage in negotiations for 20 agreements, which make up approximately 11% of our associate population. We do not anticipate any workplace disruptions during this renewal process. We consider our labor relations to be positive and productive.
We do not anticipate any workplace disruptions during this renewal process. We consider our labor relations to be positive and productive. Our Culture We believe that attracting, developing, and retaining top talent is crucial to achieving our strategic goals and creating long-term value for our shareholders, customers, and associates.
Our most significant partnership is with Feed the Children in the United States, through which we provide donations, complimentary temperature-controlled transportation of food products, and volunteer opportunities for our associates. Our associates are not only making a difference in their communities, but they also have strong passion and support for each other.
In 2024, our associates recorded more than 5,800 volunteer hours to support causes around the globe that contribute to fighting hunger and supporting the growth and development of children and teens like Big Brothers Big Sisters, Ronald McDonald House, Meals on Wheels and so many more. 10 Table of C ontents Our most significant partnership is with Feed the Children in the United States, through which we provide donations, complimentary temperature-controlled transportation of food products and volunteer opportunities for our associates.
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Recent Acquisitions and Investments in Joint Ventures Over the last several years we have strategically acquired businesses to enhance our global portfolio and integrated network offerings to our customers.
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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.
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The project includes the implementation of a new, best-in-class, cloud-based enterprise resource planning (“ERP”) software system. Since going public in 2018, we have acquired over 100 facilities, or approximately 40% of our total warehouse facility network. Project Orion will enable us to better integrate many of these recent acquisitions and position us well for the integration of future acquisitions.
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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 Consolidated Balance Sheets are now being amortized through “Selling, general, and administrative” expense on the Consolidated Statements of Operations.
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We will continue to evaluate our overall project for 5 additional opportunities and benefits, which could result in the identification and implementation of additional actions associated with Project Orion and incremental costs and benefits.
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The useful lives of the Company’s internal-use software and capitalized cloud computing implementation costs are generally 5 Table of C ontents three to five years.
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During the fourth quarter of 2022, we strategically transitioned the management of our largest third-party managed customer’s warehouses to a new third-party provider, and our operations ceased. As part of this transition, we agreed to continue to process certain costs for this customer for a period of time, and will continue to receive reimbursement for all such costs.
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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.
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Presented on an annualized basis as if we had completed all 2023 acquisitions as of the beginning of the year. (2) Represents long-term issuer ratings as published in January 2024.
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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 year ended December 31, 2024 related to the Project Orion ERP implementation was $4.2 million.
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As of December 31, 2023, we employed 14,706 people worldwide, 99% of which are full-time associates.
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We also provide multi-modal global freight forwarding services to support our customers’ needs in certain markets. Third party managed. Under our third-party managed segment, we manage warehouses on behalf of third parties and provide warehouse management services to leading food manufacturers and retailers in their owned facilities.
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Equity, Diversity, Inclusion and Belonging We believe that how we attract, develop, and retain our talent is critical to how we achieve our strategic objectives and create sustained growth and value for our stockholders, customers, and associates.
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(2) Represents long-term issuer ratings as published in February 2025.
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In 2023 our Global Culture Committee, which is comprised of associate representatives from across all regions and levels of the organization, established messaging around Americold’s commitment to Diversity, Inclusion & Belonging (“DI&B”) and launched an Americold PROUD #ibelong campaign.
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We continue to successfully negotiate multiple collective bargaining agreements each year without any work stoppages. During 2024, we successfully negotiated and renewed 16 agreements. During 2025, we expect to engage in negotiations for an additional 12 agreements, which make up approximately 5% of our associate population, covering all or parts of 19 operating locations worldwide.
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This was the Committee’s first big step to integrate DI&B into every aspect of Americold’s culture through training, processes, and general awareness communication. The goal is to embed inclusion into our everyday operations where our associates can thrive as valued team members. We continue to emphasize associate development and training.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
6 edited+0 added−340 removed2 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
6 edited+0 added−340 removed2 unchanged
2023 filing
2024 filing
Biggest changeThe risks we face include, but are not limited to, the following: Risks Related to our Business and Operations • our investments are concentrated in the temperature-controlled warehouse industry; • inflation could continue to have a negative impact on our business and results of operation; • labor shortages, increased turnover and work stoppages may have a material adverse effect on us and may negatively impact our customers’ ability to produce and ship products for storage; • supply chain disruptions may continue to have a material adverse impact on us; • risks associated with expansion and development, which could result in lower than expected returns and unforeseen costs and liabilities; • the short-term nature and lack of fixed storage commitments of many of our customer contracts; • we may be unable to successfully expand our operations into new markets; • a failure or breach of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions, loss of confidential information, remediation costs or damages; • issues with maintaining, upgrading and implementing our information technology systems, potential cost overruns, timing and control risks and failure to recognize anticipated savings and increased productivity; • privacy and data security concerns and restrictions may adversely affect our business; • our temperature-controlled warehouses are concentrated in certain geographic areas, some of which are susceptible to adverse local conditions such as natural disasters, economic slowdown and localized oversupply of warehouse space; • competition in our markets may increase over time as our competitors open new or expand existing warehouses; • we depend on certain customers for a substantial amount of our warehouse segment revenues; • we may incur liabilities or reputational harm from quality-control issues associated with our services; • our temperature-controlled warehouse infrastructure may become obsolete or unmarketable; • we could experience power outages or breakdowns of our refrigeration equipment; • we hold leasehold interests in 57 of our warehouses, which we may be forced to vacate if we default on our obligations thereunder or are unable to renew such leases upon their expiration; • charges for impairment of goodwill or other long-lived assets and declining real estate valuations could adversely affect our earnings and financial condition; • geopolitical conflicts may adversely affect our business and results of operation.
Biggest changeThe risks we face include, but are not limited to, the following: Risks Related to our Business and Operations • our investments are concentrated in the temperature-controlled warehouse industry and in certain geographic areas, some of which are susceptible to adverse local conditions such as natural disasters, economic slowdowns and localized oversupply of warehouse space; • inflation could continue to have a negative impact on our business and results of operations; • labor shortages, increased turnover and work stoppages may have a material adverse effect on us and may negatively impact our customers’ ability to produce and ship products for storage; • supply chain disruptions may continue to have a material adverse impact on us; • national, international, regional and local economic conditions, including impacts and uncertainty from trade disputes and tariffs on goods imported to the United States and goods exported to other countries may have a material adverse impact on us; • risks associated with expansion and development, which could result in lower than expected returns and unforeseen costs and liabilities; • the short-term nature of many of our customer contracts and lack of fixed storage commitments; • we may be unable to successfully expand our operations into new markets; • a failure or breach of our IT systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions, loss of confidential information, remediation costs or damages; 15 Table of C ontents • competition in our markets may increase over time as our competitors open new or expand existing warehouses; • we depend on certain customers for a substantial amount of our warehouse segment revenues; • we may incur liabilities or reputational harm from quality-control issues associated with our services; • we hold leasehold interests in many of our warehouses, which we may be forced to vacate if we default on our obligations thereunder or are unable to renew such leases upon their expiration; • charges for impairment of goodwill or other long-lived assets and declining real estate valuations could adversely affect our earnings and financial condition; • geopolitical conflicts may adversely affect our business and results of operation.
General Risks Related to the Real Estate Industry • we could incur significant costs and liabilities due to environmental problems, climate change or natural disasters; • our insurance coverage may be insufficient to cover potential liabilities or losses; • our properties may contain or develop harmful molds or have other air quality issues; • illiquidity of real estate developments could impede our ability to respond to adverse changes; • ongoing litigation risks which could result in material liabilities and harm our business; 15 • our current and future joint venture investments face risks stemming from our partial ownership interests in such properties.
General Risks Related to the Real Estate Industry • we could incur significant costs and liabilities due to environmental problems, climate change or natural disasters; • our insurance coverage may be insufficient to cover potential liabilities or losses; • our properties may contain or develop harmful molds or have other air quality issues; • illiquidity of real estate developments could impede our ability to respond to adverse changes; • ongoing litigation risks which could result in material liabilities and harm our business; • our current and future joint venture investments face risks stemming from our partial ownership interests in such properties.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock and other securities.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock and other securities.
Risks Related to our Debt Financings • we have a substantial amount of indebtedness that may limit our financial and operating activities; • increases in interest rates could increase the amount of our debt service; • we are dependent on external sources of capital, the continuing availability of which is uncertain; • adverse changes in our credit ratings could negatively impact our financing activity; • any indebtedness containing covenants restricting our ability to engage in certain activities.
Risks Related to our Debt Financings • we have a substantial amount of indebtedness that may limit our financial and operating activities; • increases in interest rates could increase the amount of our debt service; • we are dependent on external sources of capital, the continuing availability of which is uncertain; • adverse changes in our credit ratings could negatively impact our financing activity.
REIT and Tax Related Risks • our failure to qualify as a REIT for U.S. federal income tax purposes, or our failure to remediate if we failed, could have a material adverse effect on us; • meeting annual distribution requirements could result in material harm to our company; • we conduct a portion of our business through TRSs, which are subject to certain tax risks; • complying with REIT requirements may cause us to forgo otherwise attractive opportunities; • future changes to the U.S. federal income tax laws could have a material adverse impact on us; • distributions payable by REITs generally do not qualify for any reduced tax rates; • we may be subject to U.S. federal, state, local and foreign taxes, reducing funds available for distribution; • complying with REIT requirements may result in tax liabilities and limit our ability to hedge; and • our Operating Partnership’s failure to qualify as a partnership for U.S. federal income tax purposes could have a material adverse impact on us 16 Risk Factors Set forth below are certain risk factors that could harm our business, results of operations and financial condition.
REIT and Tax Related Risks • our failure to qualify as a REIT for U.S. federal income tax purposes, or our failure to remediate if we failed to so qualify, could have a material adverse effect on us; • meeting annual distribution requirements could result in material harm to our company; • we conduct a portion of our business through taxable REIT subsidiaries (“TRSs”), which are subject to certain tax risks; • complying with REIT requirements may cause us to forgo otherwise attractive opportunities; • future changes to the U.S. federal income tax laws could have a material adverse impact on us; 16 Table of C ontents • distributions payable by REITs generally do not qualify for any reduced tax rates; • we may be subject to U.S. federal, state, local and foreign taxes, reducing funds available for distribution; • complying with REIT requirements may result in tax liabilities and limit our ability to hedge; and • our Operating Partnership’s failure to qualify as a partnership for U.S. federal income tax purposes could have a material adverse impact on us. 17 Table of C ontents
Risks Related to our Organization and Structure • our board of directors can take many actions even if our stockholders disagree or if they are otherwise not in the stockholders’ best interest; • certain rules and restrictions in our articles of incorporation have an anti-takeover effect; • we have fiduciary duties as the general partner of our Operating Partnership.
Risks Related to our Organization and Structure • our Board can take many actions even if our stockholders disagree or if they are otherwise not in the stockholders’ best interest; • we have fiduciary duties as the general partner of our Operating Partnership.
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You should carefully read the following risk factors, together with the financial statements, related notes and other information contained in this Annual Report on Form 10-K. Our business, financial condition and operating results may suffer if any of the following risks are realized.
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If any of these risks or uncertainties occur, the trading price of our common stock could decline and you might lose all or part of your investment. This Annual Report on Form 10-K contains forward-looking statements that contain risks and uncertainties.
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Please refer to the discussion of “ Cautionary Statement Regarding Forward-Looking Statements. ” Risks Related to our Business and Operations Our investments are concentrated in the temperature-controlled warehouse industry. Our investments in real estate assets are concentrated in the industrial real estate industry, specifically in temperature-controlled warehouses.
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This concentration exposes us to the risk of economic downturns in this industry to a greater extent than if our business activities included a more significant portion of other sectors of the real estate market. We are also exposed to fluctuations in the markets for, and production of, the commodities and finished products that we store in our warehouses.
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Although our customers store a diverse product mix in our temperature-controlled warehouses, declines in production of or demand for their products could cause our customers to reduce their inventory levels at our warehouses, which could reduce the storage and other fees payable to us and materially and adversely affect us.
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Inflation has and may continue to have a negative impact on our business and results of operation.
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Certain of our expenses, including utility costs (power in particular), labor costs, interest expense, property taxes, insurance premiums, equipment repair and replacement, and other operating expenses are subject to inflationary pressures that have and may continue to negatively impact our business and results of operation.
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While we seek to mitigate the impact of inflation by increased operating efficiencies and price increases to our customers, there can be no assurance that we will be able to offset cost increases in whole or in part, which could adversely impact our profit margins.
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Labor shortages, increased turnover and work stoppages may disrupt our operations, increase costs and negatively impact our profitability. Our ability to successfully implement our business strategy depends upon our ability to attract and retain talented people and effectively manage our human capital. The labor markets in the industries in which we operate are competitive.
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We have recently experienced increased labor shortages at some of our warehouses and other locations, and while we have historically experienced some level of ordinary course turnover of employees, these trends have increased.
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A number of factors have had and may continue to have adverse effects on the labor force available to us, including reduced employment pools, and other government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices and immigration.
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In addition, we seek to optimize our mix of permanent and temporary associates in our facilities, as temporary associates typically result in higher costs and lower efficiency.
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Labor shortages and increased turnover rates within our associate ranks have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain associates and could negatively affect our ability to efficiently operate our facilities or otherwise operate at full capacity.
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An overall or prolonged labor shortage, lack of skilled labor, inability to maintain a stable mix of permanent to temporary associates, increased turnover and labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows. 17 Furthermore, certain portions of our operations are subject to collective bargaining agreements.
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As of December 31, 2023, worldwide, we employed 14,706 people, approximately 29% of whom were represented by various local labor unions. Unlike owners of industrial warehouses, we hire our own workforce to handle product in and out of storage for our customers.
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Strikes, slowdowns, lockouts or other industrial disputes could cause us to experience a significant disruption in our operations, as well as increase our operating costs, which could materially and adversely affect us.
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If a greater percentage of our workforce becomes unionized, or if we fail to re-negotiate our expired or expiring collective bargaining agreements on favorable terms in a timely manner, we could be materially and adversely affected.
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Finally, our customers’ operations are subject to labor shortages and disruptions that could negatively impact their production capability, resulting in reduced volume of product for storage. In addition, labor shortages and disruptions impacting the transportation industry may hamper the timely movement of goods into and out of our warehouses.
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These labor shortages and disruptions could in turn have a material adverse effect on us. Wage increases driven by competitive pressures or applicable legislation on employee wages and benefits could negatively affect our operating margins and our ability to attract qualified personnel. Our hourly associates in the U.S. and internationally are typically paid wage rates above the applicable minimum wage.
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However, increases in the minimum wage will increase our labor costs if we are to continue paying our hourly associates above the applicable minimum wage. If we are unable to continue paying our hourly associates above the applicable minimum wage and otherwise offer attractive employee benefits at a suitable cost, we may be unable to hire and retain qualified personnel.
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The U.S. federal minimum wage has been $7.25 per hour since July 24, 2009. From time to time, various U.S. federal, state and local legislators have proposed or enacted significant changes to the minimum wage requirements.
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For example, certain local or regional governments in places such as Chicago, Los Angeles, Seattle, San Francisco, Portland and New York have approved phased-in increases that eventually will take their minimum wage to as high as $16.00 per hour. In addition, specific legislative and regulatory proposals regarding an increase in the federal minimum wage have been discussed recently.
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If such increases were to occur nationally or in specific markets in which we operate, our operating margins would be negatively affected. Our standard contract forms include rate protection for uncontrollable costs such as labor, or costs associated with regulatory action, however, despite such provisions, we may not be able to fully pass through these increased costs.
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We are exposed to risks associated with expansion and development, which could result in returns below expectations and unforeseen costs and liabilities. We have engaged, and expect to continue to engage, in expansion and development activities with respect to certain of our legacy or newly acquired properties.
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Expansion and development activities subject us to certain risks not present in the acquisition of existing properties (the risks of which are described below), including, without limitation, the following: • our pipeline of expansion and development opportunities is at various stages of discussion and consideration and many of them may not be pursued or completed; • the availability and timing of financing on favorable terms; • the availability and timely receipt of zoning and regulatory approvals; • the cost and timely completion within budget of construction due to increased land, materials, equipment, labor or other costs (including risks beyond our control, such as weather or labor conditions, or material shortages), which could make completion of a warehouse or the expansion thereof uneconomical, and we may not be able to increase revenues to compensate for the increase in construction costs; 18 • we may be unable to complete construction of a warehouse or the expansion thereof on schedule due to availability of labor, equipment or materials or other factors outside of our control, resulting in increased debt service expense and construction costs; • supply chain disruptions or delays in receiving materials or support from vendors or contractors could impact the timing of stabilization of expansion and development projects; • the potential that we may expend funds on and devote management time and attention to projects which we do not complete; • a completed expansion project or a newly-developed warehouse may fail to achieve, or take longer than anticipated to achieve, expected occupancy rates and may fail to perform as expected; • projects to automate our existing or new warehouses may not perform as expected or achieve the anticipated operational efficiencies; and • we may not be able to achieve targeted returns and budgeted stabilized returns on invested capital on our expansion and development opportunities due to the risks described above, and an expansion or development may not be profitable and could lose money.
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These risks could create substantial unanticipated delays and expenses and, in certain circumstances, prevent the initiation or completion of expansion or development as contemplated or at all, any of which could materially and adversely affect us.
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The short-term nature and lack of fixed storage commitments of many of our customer contracts exposes us to certain risks that could have a material adverse effect on us.
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On an annualized basis assuming all 2023 acquisitions occurred as of the beginning of the year, 52.2% of rent and storage revenue were generated from fixed commitment storage contracts or leases with customers for the year ended December 31, 2023.
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Our customer contracts that do not contain fixed storage commitments typically do not require our customers to utilize a minimum number of pallet positions or provide for guaranteed fixed payment obligations from our customers to us. Additionally, we have discrete pricing for our customers based upon their unique profiles.
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Therefore, a shift in the mix of business types or customers could negatively impact our financial results. The storage and other fees we generate from customers with month-to-month warehouse rate agreements may be adversely affected by declines in market storage and other fee rates more quickly than with respect to our contracts that contain stated terms.
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There also can be no assurance that we will be able to retain any customers upon the expiration of their contracts (whether month-to-month warehouse rate agreements or contracts) or leases.
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If we cannot retain our customers, or if our customers that are not party to contracts with fixed storage commitments elect not to store goods in our warehouses, we may be unable to find replacement customers on favorable terms and we may incur significant expenses in obtaining replacement customers and repositioning warehouses to meet their needs.
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Any of the foregoing could materially and adversely affect us. A portion of our future growth depends upon our ability to identify and successfully integrate acquisitions. Our ability to expand through acquisitions requires us to identify and complete acquisitions that are compatible with our growth strategy and to successfully integrate and operate these newly-acquired businesses.
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Our ability to identify and acquire suitable properties on favorable terms and to successfully integrate is subject to the following risks: • we face competition from other real estate investors with significant capital, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices; 19 • we may incur significant costs and divert management’s attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; • we may be unsuccessful in integrating and operating such properties in accordance with our expectations; • our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to any debt used to finance the acquisition of such property; • we may face opposition from governmental authorities or third parties alleging that potential acquisition transactions are anti-competitive, and as a result, we may have to spend a significant amount of time and expense to respond to related inquiries, or governmental authorities may prohibit the transaction or impose terms or conditions that are unacceptable to us; • we may fail to obtain financing for an acquisition on favorable terms or at all; • we may spend more than budgeted amounts to meet customer specifications on a newly-acquired warehouse; • we may, with limited recourse, acquire properties subject to environmental and other historical liabilities. • market conditions may result in higher than expected vacancy rates and lower than expected storage charges, rent or fee: or • we may, without any recourse, or with only limited recourse, acquire properties subject to liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by customers, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties Our inability to identify and complete suitable property acquisitions on favorable terms or at all, could have a material adverse effect on us.
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The expected synergies and operating efficiencies of our acquisitions, may not be fully realized, which could result in increased costs and/or lower revenues and have a material adverse effect on us.
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In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships and diversion of management’s attention, among other potential consequences. Acquired businesses may also be subject to unknown or contingent liabilities for which we may have no or limited recourse against the sellers.
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The total amount of costs and expenses that we may incur with respect to liabilities associated with our acquisitions may exceed our expectations, which may materially and adversely affect us. We may be unable to successfully expand our operations into new markets. If the opportunity arises, we may acquire or develop properties in new markets, including international markets.
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In addition the risks generally applicable to our business, the acquisition or development of properties in new markets will subject us to the risks associated with a lack of understanding of the related economy and unfamiliarity with government and permitting procedures.
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We will also not possess the same level of familiarity with the dynamics and market conditions of any new market that we may enter, which could adversely affect our ability to successfully expand and operate in such market. We may be unable to build a significant market share or achieve a desired return on our investments in new markets.
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If we are unsuccessful in expanding and operating in new, high-growth markets, it could have a material adverse effect on us. A failure of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions and the loss of confidential information and may materially adversely affect our business.
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We rely extensively on our computer systems to process transactions, operate and manage our business. Despite efforts to avoid or mitigate such risks, external and internal risks, such as malware, ransomware, insecure coding, data leakage and human error pose direct threats to the stability and effectiveness of our information technology systems.
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The failure of our information technology systems to perform as anticipated, and the failure to integrate 20 disparate systems effectively or to collect data accurately and consolidate it in a useable manner efficiently could adversely affect our business through transaction errors, billing and invoicing errors, processing inefficiencies or errors and loss of sales, receivables, collections and customers, in each case, which could result in reputational damage and have an ongoing adverse effect on our business, results of operations and financial condition.
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We may also be subject to cybersecurity attacks and other intentional hacking. These attacks could include attempts to gain unauthorized access to our data and computer systems. In particular, as discussed further below, our operations have been, and may in the future be, subject to ransomware or cyber-extortion attacks, which could significantly disrupt our operations.
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Generally, such attacks involve restricting access to computer systems or vital data.
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We employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password changes, firewall detection systems, frequent backups, a redundant data system for core applications and annual penetration testing; however, there is no guarantee such efforts will be successful in preventing a cybersecurity attack.
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A cybersecurity attack or breach could compromise the confidential information of our associates, customers and vendors. A successful attack could result in service interruptions, operational difficulties, loss of revenue or market share, liability to our customers or others, diversion of corporate resources and injury to our reputation and increased costs.
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In such cases, we may have to operate manually, which may result in considerable delays in our handling of and damage to perishable products or interruption to other key business processes. Addressing such issues could prove difficult or impossible and be very costly.
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Additionally, a successful attack may result in our customers making monetary claims against us pursuant to the terms of their contracts with us, the amount of which may be significant.
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In addition, our customers rely extensively on computer systems to process transactions and manage their business and thus their businesses are also at risk from, and may be impacted by, cybersecurity attacks. An interruption in the business operations of our customers or a deterioration in their reputation resulting from a cybersecurity attack could indirectly impact our business operations.
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Our computer network has been subjected to cyber attacks from time to time. We previously suffered a cyber attack in November 2020 and more recently identified a separate cyber incident in April 2023 (the “Cyber incident”). We immediately implemented containment measures and took operations offline to secure our systems and reduce disruption to our business and customers.
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We have reviewed the nature and scope of the incident, working closely with cybersecurity experts and legal counsel, and have reported the matter to law enforcement. As a result of the April 2023 Cyber incident, our operations were impacted.
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In particular, the incident resulted in a significant number of our facilities being unable to receive or deliver products for a period of time. Such operational impacts resulted in considerable delays in the delivery of our products to our customers and interruption to other key business processes for a period of time.
Removed
We have also received a number of claims from our customers pursuant to the terms of their contracts as a result of this incident, and we have established a reserve for these claims.
Removed
The expense is reflected in “Acquisition, cyber incident and other, net” on the Consolidated Statement of Operations for the year ended December 31, 2023, and the reserve balance is included in “Accounts payable and accrued expenses” in our Consolidated Balance Sheet as of December 31, 2023. Our investigation into the April 2023 Cyber incident revealed unauthorized access to personal information.
Removed
We are currently in the process of completing our notifications to impacted individuals and regulators, in accordance with applicable law. As a result of this unauthorized access, we have received inquiries from several regulators and purported class action lawsuits have been filed against the company.
Removed
We may also be subject to subsequent investigations, claims or actions in addition to other costs, fines, penalties, or other obligations related to impacted data.
Removed
In addition, the misuse, or perceived misuse, of sensitive or confidential information regarding our business could cause harm to our reputation and result in the loss of business with existing or potential customers, which could adversely impact our business, results of operations and financial condition. 21 We may be subject to unrelated future incidents that could have a material adverse effect on our business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to our reputation.
Removed
We depend on information technology systems to operate our business, and issues with maintaining, upgrading or implementing these systems, could have a material adverse effect on our business. We rely on the efficient and uninterrupted operation of information technology systems to process, transmit and store electronic information in our day-to-day operations.
Removed
All information technology systems are vulnerable to damage or interruption from a variety of sources. Our business has grown in size and complexity; this has placed, and will continue to place, significant demands on our information technology systems.
Removed
To effectively manage this growth, our information systems and applications require an ongoing commitment of significant resources to maintain, protect, enhance and upgrade existing systems and develop and implement new systems to keep pace with changing technology and our business needs.
Removed
We have begun implementation of “Project Orion”, a new ERP and back-office software system which will replace certain existing business, operational, and financial processes and systems. This ERP implementation project requires investment of capital and human resources, the re-engineering of business processes, and the attention of many associates who would otherwise be focused on other areas of our business.
Removed
This system change entails certain risks, including difficulties with changes in business processes that could disrupt our operations, manage our supply chain and aggregate financial and operational data.
Removed
During the transition, we may continue to rely on legacy information systems, which may be costly or inefficient, while the implementation of new initiatives may not achieve the anticipated benefits and may divert management’s attention from other operational activities, negatively affect associate morale, or have other unintended consequences.
Removed
Delays in integration or disruptions to our business from implementation of new or upgraded systems could have a material adverse impact on our financial condition and operating results. Additionally, if we are not able to accurately forecast expenses and capitalized costs related to system upgrades and changes, this may have an adverse impact on our financial condition and operating results.
Removed
If we fail to maintain or are unable to assert that our internal control over financial reporting is effective under the new ERP system, we could adversely affect our ability to accurately report our financial condition, operating results or cash flows.
Removed
If we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
Removed
If the information we rely upon to run our businesses were to be found to be inaccurate or unreliable, if we fail to maintain or protect our information technology systems and data integrity effectively, if we fail to develop and implement new or upgraded systems to meet our business needs in a timely manner, or if we fail to anticipate, plan for or manage significant disruptions to these systems, our competitive position could be harmed, we could have operational disruptions, we could lose existing customers, have difficulty preventing, detecting, and controlling fraud, have disputes with customers, have regulatory sanctions or penalties imposed or other legal problems, incur increased operating and administrative expenses, lose revenues as a result of a data privacy breach or theft of intellectual property or suffer other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition or cash flows.
Removed
Privacy and data security concerns, and data collection and transfer restrictions and related regulations may adversely affect our business . 22 Many foreign countries and governmental bodies, including the European Union, where we now conduct business, have laws and regulations concerning the collection and use of personal data obtained from their residents or by businesses operating within their jurisdiction.
Removed
These laws and regulations often are more restrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions, IP addresses.
Removed
Recently, there has been heightened interest and enforcement focus on data protection regulations and standards both in the United States and abroad. For example, in 2023, California’s Consumer Personal Information Law and Agency Initiative, which increased data privacy requirements for our business took effect.
Removed
We expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the European Union, and other jurisdictions. More generally, we cannot yet fully determine the impact these or future laws, regulations and standards may have on our business.
Removed
Privacy, data protection and information security laws and regulations are often subject to differing interpretations, may be inconsistent among jurisdictions, and may be alleged to be inconsistent with our current or future practices.
Removed
Additionally, we may be bound by contractual requirements applicable to our collection, use, processing, and disclosure of various types of data and may be bound by, or voluntarily comply with industry standards relating to these matters.
Removed
These and other requirements could increase our costs, impair our ability to grow our business, or restrict our ability to store and process data or, in some cases, impact our ability to operate our business in some locations and may subject us to liability.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
11 edited+298 added−1 removed4 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
11 edited+298 added−1 removed4 unchanged
2023 filing
2024 filing
Biggest changeFor additional information regarding such risks and the affects thereof on our business strategy, operations and financial condition, see Part I, Item 1A, Risk Factors – “A failure of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions and the loss of confidential information and may materially adversely affect our business.” 47
Biggest changeA failure of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions and the loss of confidential information and may materially adversely affect our business.” 20 Table of C ontents Risk Factors Set forth below are certain risk factors that could harm our business, results of operations and financial condition.
Third-Party Engagement The Company engages a range of third-party advisory service providers, including cybersecurity assessors, consultants, and auditors, to conduct recurrent evaluations of its cybersecurity controls. These reviews are a critical component of the ongoing risk assessment process within the cybersecurity function and include periodic evaluations of internal controls aimed at mitigating cybersecurity threats.
Third-Party Engagement The Company engages a range of third-party advisory service providers, including cybersecurity assessors, and consultants to conduct recurrent evaluations of its cybersecurity controls. These reviews are a critical component of the ongoing risk assessment process within the cybersecurity function and include periodic evaluations of internal controls aimed at mitigating cybersecurity threats.
The Company’s Chief Information Officer (“CIO”) and CISO work closely with other management positions, including the Chief Financial Officer, Chief Legal Officer, Head of Internal Audit, and Internal Communications, to evaluate cybersecurity risks in alignment with our business objectives and operational needs.
The Company’s Chief Information Officer (“CIO”) and CISO work closely with other management positions, including the Chief Financial Officer, Chief Legal Officer, and the Head of Internal Audit, to evaluate cybersecurity risks in alignment with our business objectives and operational needs.
These briefings encompass a range of topics, including the current cybersecurity landscape and emerging threats, status of ongoing cybersecurity initiatives and strategies, incident reports, and compliance with regulatory requirements and industry standards. Additionally, the full Board is regularly briefed on updates related Global Information Security Program and the Company’s Information Security Roadmap.
These briefings encompass a range of topics, including the current cybersecurity landscape and emerging threats, status of ongoing cybersecurity initiatives and strategies, incident reports, and compliance with regulatory requirements and industry standards. Additionally, the Board is regularly briefed on updates related to the Company’s Global Information Security Program and the Company’s Information Security Roadmap.
These assessments often include penetration tests, evaluations of the Company's cyber program maturity, and assessments of progress toward future-state cyber initiatives, among other considerations. The results of these reviews are reviewed with management and the Company’s Board of Directors (the “Board”).
These assessments often include penetration tests, evaluations of the Company's cyber program maturity, and assessments of progress toward future-state cyber initiatives, among other considerations. The results of these assessments are reviewed with management and the Board.
The related expense is reflected in “Acquisition, cyber incident, and other, net” on the Consolidated Statement of Operations for the year ended December 31, 2023, and the reserve balance is included in “Accounts payable and accrued expenses” in our Consolidated Balance Sheets as of December 31, 2023.
The related expense is reflected in “Acquisition, cyber incident, and other, net” on the Consolidated Statements of Operations for the year ended December 31, 2023, and any reserve balance is included in “Accounts payable and accrued expenses” in our Consolidated Balance Sheets as of December 31, 2024, and 2023.
The Americold Global Information Security Program is structured to address cyber-related risks in alignment with the guidelines delineated in the National Institute of Standards and Technology (“NIST”) security framework. The program also leverages various automated tools, manual processes, and routine periodic third-party assessments to ensure the efficacy of our security measures.
Management’s Role Managing Risk The Americold Global Information Security Program is structured to address cyber-related risks in alignment with the guidelines delineated in the National Institute of Standards and Technology (“NIST”) security framework. The program also leverages various automated tools, manual processes, and routine periodic third-party assessments to promote the efficacy of our security measures.
The Board also oversees the prompt assessment of material cyber events including countermeasures and mitigation actions. 46 In addition to scheduled meetings, the audit committee and CISO maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. Together, they receive updates on any significant developments in the cybersecurity domain.
The Board also oversees the prompt assessment of material cyber events including countermeasures and mitigation actions. 19 Table of C ontents In addition to scheduled meetings, the Board and CISO maintain an ongoing dialogue regarding emerging or potential cybersecurity risks and updates on any significant developments in the cybersecurity domain.
Governance & Board Oversight The cybersecurity program is led by the Company’s Chief Information Security Officer (“CISO”). The CISO plays a pivotal role in informing the audit committee and the Board on cybersecurity risks. The audit committee is primarily responsible for the Board’s cybersecurity risk oversight.
Governance & Board Oversight The cybersecurity program is led by the Company’s Chief Information Security Officer (“CISO”). The CISO plays a pivotal role in informing the Board on cybersecurity risks. Management, including the CISO, provides comprehensive briefings to the Board on cybersecurity risks at least quarterly.
Furthermore, the program includes a formal information security training program that includes comprehensive security awareness initiatives and training modules, addressing critical areas such as phishing attacks and best practices for email security. Impact of Cybersecurity Threats As previously disclosed, we have experienced significant cyber incidents in the past, including in April 2023, that have impacted our operations and financial results.
Furthermore, the program includes a formal information security training program for that includes comprehensive security awareness initiatives and training modules, addressing critical areas such as phishing attacks and best practices for email security.
Management’s Role Managing Risk The CISO possesses more than 10 years of relevant expertise in cybersecurity; and holds a Certified Information Systems Security Professional (“CISSP”) certification. Other members of the Company’s information security team also hold certifications such as CISSP, Certified Information Security Manager (“CISM”), Certified Ethical Hacker (“CEH”), and Certified Information Systems Auditor (“CISA”).
Other members of the Company’s information security team also hold certifications such as CISSP, Certified Information Security Manager (“CISM”), Certified Ethical Hacker (“CEH”), and Certified Information Systems Auditor (“CISA”). The Chief Financial Officer has experience assessing and managing material financial risks, including cybersecurity risks, and serving on the Disclosure Committee at public companies.
Removed
Management, including the CISO, provide comprehensive briefings to the audit committee on cybersecurity risks on a regular basis, and the audit committee reports to the Board at least quarterly.
Added
The CIO oversees the Company’s security team and the CISO and has participated in the NIST review and validation of security procedures and processes. The individuals responsible for evaluating and managing the Company’s cybersecurity risk have extensive experience managing organizational risk and implementing cybersecurity programs at companies.
Added
The CIO has more than 20 years of experience advising on the overall strategy of technology, including the incorporation of cyber security into the software development lifecycle and change management process. The CISO possesses more than 10 years of relevant expertise in cybersecurity and holds a Certified Information Systems Security Professional (“CISSP”) certification.
Added
The Chief Legal Officer possesses many years of experience managing legal and compliance risk at public companies, including with respect to cybersecurity incidents. The Head of Internal Audit manages the Company’s broader risk management framework, which includes cybersecurity risks, and has many years of prior experience assessing cybersecurity risks and programs at several companies.
Added
Impact of Cybersecurity Threats As previously disclosed, we have experienced significant cyber incidents in the past, including in April 2023, that have impacted our operations and financial results.
Added
For additional information regarding such risks and the affects thereof on our business strategy, operations and financial condition, see Part I, Item 1A, Risk Factors – “We depend on information technology systems to operate our business.
Added
You should carefully read the following risk factors, together with the financial statements, related notes and other information contained in this Annual Report on Form 10-K. Our business, financial condition and operating results may suffer if any of the following risks are realized.
Added
If any of these risks or uncertainties occur, the trading price of our common stock could decline and you might lose all or part of your investment. This Annual Report on Form 10-K contains forward-looking statements that contain risks and uncertainties. Please refer to the discussion of “ Cautionary Statement Regarding Forward-Looking Statements ” for more information.
Added
Risks Related to our Business and Operations Our investments are concentrated in the temperature-controlled warehouse industry and in certain geographic areas.
Added
Our investments in real estate assets are concentrated in the industrial real estate industry, specifically in temperature-controlled warehouses, which exposes us to the risk of economic downturns to a greater extent than if our business activities included a more significant portion of other sectors of the real estate market.
Added
We are also exposed to fluctuations in the markets for, and production of, the commodities and finished products that we store in our warehouses.
Added
Although our customers store a diverse product mix in our temperature-controlled warehouses, declines in production of or demand for their products could cause our customers to reduce their inventory levels at our warehouses, which could reduce the storage and other fees payable to us and materially and adversely affect us.
Added
Our warehouses are subject to electrical power outages and breakdowns of our refrigeration equipment. We could incur financial obligations to, or be subject to lawsuits by, our customers in connection with these occurrences, which may not be covered by insurance.
Added
Any loss of services or product damage could reduce the confidence of our customers in our services and could consequently impair our ability to attract and retain customers. Additionally, in the event of the complete failure of our refrigeration equipment, we would incur significant costs in repairing or replacing our refrigeration equipment, which may not be covered by insurance.
Added
Any of the foregoing could have a material adverse effect on us. The infrastructure at our temperature-controlled warehouses may become obsolete or unmarketable due to the development of, or demand for, more advanced equipment or enhanced technologies, including increased automation of our warehouses, which may entail significant start-up costs and time and may not perform as expected.
Added
We may not be able to upgrade our warehouses on a cost-effective basis in response to customer demands. The obsolescence of our infrastructure or our inability to upgrade our warehouses could have a material adverse effect on us.
Added
Although we own or hold leasehold interests in warehouses across the United States and globally, many of these warehouses are concentrated in a few geographic areas. As such, if warehouses were impacted in certain geographic locations, it could have a disproportionate impact on our operations.
Added
We could be materially and adversely affected if conditions in any of the markets in which we have a concentration of properties become less favorable.
Added
Such conditions may include natural disasters, periods of economic slowdown or recession, localized oversupply in warehousing space or reductions in demand for warehousing space, adverse agricultural events, disruptions in logistics systems, such as transportation and tracking systems for our customers’ inventory, and power outages.
Added
Adverse agricultural events include, but are not limited to, the cost of commodity inputs, drought and disease.
Added
In addition, adverse weather patterns may affect local harvests, which could have an adverse effect on our customers and cause them to reduce their inventory levels at our warehouses, which could in turn materially and adversely affect us. 21 Table of C ontents Inflation has and may continue to have a negative impact on our business and results of operations.
Added
Certain of our expenses, including utility costs (power in particular), labor costs, interest expense, property taxes, insurance premiums, equipment repair and replacement and other operating expenses are subject to inflationary pressures that have and may continue to negatively impact our business and results of operation.
Added
While we seek to mitigate the impact of inflation, there can be no assurance that we will be able to offset cost increases in whole or in part, which could adversely impact our profit margins. Labor shortages, increased turnover and work stoppages may disrupt our operations, increase costs and negatively impact our profitability.
Added
Our ability to successfully implement our business strategy depends upon our ability to attract and retain talented people and effectively manage our human capital. The labor markets in the industries in which we operate are competitive.
Added
We have recently experienced increased labor shortages at some of our warehouses and other locations, and while we have historically experienced some level of ordinary course turnover of employees, these trends have increased.
Added
A number of factors have had and may continue to have adverse effects on the labor force available to us, including reduced employment pools, and other government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices and immigration.
Added
Labor shortages and increased turnover rates within our associate ranks have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain associates and could negatively affect our ability to efficiently operate our facilities or otherwise operate at full capacity.
Added
An overall or prolonged labor shortage, increased turnover and labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows. Furthermore, certain portions of our operations are subject to collective bargaining agreements. As of December 31, 2024, worldwide, we employed 13,755 people, approximately 31% of whom were represented by various local labor unions.
Added
Unlike owners of industrial warehouses, we hire our own workforce to handle product in and out of storage for our customers. Strikes, slowdowns, lockouts or other industrial disputes could cause us to experience a significant disruption in our operations, as well as increase our operating costs, which could materially and adversely affect us.
Added
If a greater percentage of our workforce becomes unionized, or if we fail to re-negotiate our expired or expiring collective bargaining agreements on favorable terms in a timely manner, we could be materially and adversely affected.
Added
Additionally, our customers’ operations are subject to labor shortages and disruptions that could negatively affect their production capability, resulting in reduced volume of product for storage. In addition, labor shortages and disruptions impacting the transportation industry may hamper the timely movement of goods into and out of our warehouses.
Added
These labor shortages and disruptions could in turn have a material adverse effect on us. Wage increases driven by competitive pressures or applicable legislation on employee wages and benefits could negatively affect our operating margins and our ability to attract qualified personnel. Our hourly associates in the U.S. and internationally are typically paid wage rates above the applicable minimum wage.
Added
However, increases in the minimum wage will increase our labor costs if we are to continue paying our hourly associates above the applicable minimum wage. If we are unable to continue paying our hourly associates above the applicable minimum wage and otherwise offer attractive employee benefits at a suitable cost, we may be unable to hire and retain qualified personnel.
Added
If minimum wage increases were to occur nationally or in specific markets in which we operate, our operating margins would be negatively affected. 22 Table of C ontents We are exposed to risks associated with expansion and development, which could result in returns below expectations and unforeseen costs and liabilities.
Added
We have engaged, and expect to continue to engage, in expansion and development activities with respect to certain of our legacy or newly acquired properties.
Added
Expansion and development activities subject us to certain risks not present in the acquisition of existing properties (the risks of which are described below), including, without limitation, the following: • our pipeline of expansion and development opportunities is at various stages of discussion and consideration and many of them may not be pursued or completed; • the availability and timing of financing on favorable terms; • the availability and timely receipt of zoning and regulatory approvals; • the cost and timely completion within budget of construction due to increased land, materials, equipment, labor or other costs (including risks beyond our control, such as weather or labor conditions, or material shortages), which could make completion of a warehouse or the expansion thereof uneconomical, and we may not be able to increase revenues to compensate for the increase in construction costs; • we may be unable to complete construction of a warehouse or the expansion thereof on schedule due to availability of labor, equipment or materials or other factors outside of our control, resulting in increased debt service expense and construction costs; • supply chain disruptions or delays in receiving materials or support from vendors or contractors could impact the timing of stabilization of expansion and development projects; • the potential that we may expend funds on and devote management time and attention to projects which we do not complete; • a completed expansion project or a newly-developed warehouse may fail to achieve, or take longer than anticipated to achieve, expected occupancy rates and may fail to perform as expected; • expansion related to new business ventures, including storage of non-food products, may not be available on terms acceptable to the Company or may fail to achieve results as expected; • projects to automate our existing or new warehouses may not perform as expected or achieve the anticipated operational efficiencies; and • we may not be able to achieve targeted returns and budgeted stabilized returns on invested capital on our expansion and development opportunities due to the risks described above, and an expansion or development may not be profitable and could lose money.
Added
These risks could create substantial unanticipated delays and expenses and, in certain circumstances, prevent the initiation or completion of expansion or development as contemplated or at all, any of which could materially and adversely affect us.
Added
The short-term nature and lack of fixed storage commitments of many of our customer contracts exposes us to certain risks that could have a material adverse effect on us.
Added
Our customer contracts that do not contain fixed storage commitments typically do not require our customers to utilize a minimum number of pallet positions or provide for guaranteed fixed payment obligations from our customers to us. Additionally, we have discrete pricing for our customers based upon their unique profiles.
Added
Therefore, a shift in the mix of business types or customers could negatively impact our financial results. The storage and other fees we generate from customers with month-to-month warehouse rate agreements may be adversely affected by declines in market storage and other fee rates more quickly than with respect to our contracts that contain stated terms.
Added
There also can be no assurance that we will be able to retain any customers upon the expiration of their contracts or leases.
Added
If we cannot retain our customers, or if our customers that are not party to contracts with fixed storage commitments elect not to store goods in our warehouses or if our fixed 23 Table of C ontents storage commitment contract customers terminate or cancel their contracts, we may be unable to find replacement customers on favorable terms and we may incur significant expenses in obtaining replacement customers and repositioning warehouses to meet their needs.
Added
Any of the foregoing could materially and adversely affect us. A portion of our future growth depends upon our ability to identify and successfully integrate acquisitions. Our ability to expand through acquisitions requires us to identify and complete acquisitions that are compatible with our growth strategy and to successfully integrate and operate these newly-acquired businesses.
Added
Our ability to identify and acquire suitable properties on favorable terms and to successfully integrate is subject to the following risks: • we face competition from other real estate investors with significant capital, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices; • we may incur significant costs and divert management’s attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; • we may be unsuccessful in integrating and operating such properties in accordance with our expectations; • our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to any debt used to finance the acquisition of such property; • we may face opposition from governmental authorities or third parties alleging that potential acquisition transactions are anti-competitive, and as a result, we may have to spend a significant amount of time and expense to respond to related inquiries, or governmental authorities may prohibit the transaction or impose terms or conditions that are unacceptable to us; • we may fail to obtain financing for an acquisition on favorable terms or at all; • we may spend more than budgeted amounts to meet customer specifications on a newly-acquired warehouse; • we may, with limited recourse, acquire properties subject to environmental and other historical liabilities; • market conditions may result in higher than expected vacancy rates and lower than expected storage charges, rent or fee; or • we may, without any recourse, or with only limited recourse, acquire properties subject to liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by customers, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.
Added
Our inability to identify and complete suitable property acquisitions on favorable terms or at all, could have a material adverse effect on us. The expected synergies and operating efficiencies of our acquisitions, may not be fully realized, which could result in increased costs and/or lower revenues and have a material adverse effect on us.
Added
In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships and diversion of management’s attention, among other potential consequences. Acquired businesses may also be subject to unknown or contingent liabilities for which we may have no or limited recourse against the sellers.
Added
The total amount of costs and expenses that we may incur with respect to liabilities associated with our acquisitions may exceed our expectations, which may materially and adversely affect us. We may be unable to successfully expand our operations into new markets. If the opportunity arises, we may acquire or develop properties in new markets, including international markets.
Added
In addition the risks generally applicable to our business, the acquisition or development of properties in new markets will subject us to the risks associated with a lack of understanding of the related economy, market 24 Table of C ontents dynamics and conditions and unfamiliarity with government and permitting procedures.
Added
We will also not possess the same level of familiarity with the dynamics and market conditions of any new market that we may enter, which could adversely affect our ability to successfully expand and operate in such markets. We may be unable to build a significant market share or achieve a desired return on our investments in new markets.
Added
If we are unsuccessful in expanding and operating in new, high-growth markets, it could have a material adverse effect on us. A failure of our IT systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions and the loss of confidential information and may materially adversely affect our business.
Added
We rely extensively on our computer systems to process transactions, operate and manage our business. Despite efforts to avoid or mitigate such risks, external and internal risks, such as malware, ransomware, insecure coding, data leakage and human error pose threats to the stability and effectiveness of our IT systems.
Added
The failure of our IT systems to perform as anticipated, and the failure to integrate disparate systems effectively or to collect data accurately and consolidate it in a useable manner efficiently could adversely affect our business through transaction errors, billing and invoicing errors, processing inefficiencies or errors and loss of sales, receivables, collections and customers, which could result in reputational damage and have an ongoing adverse effect on our business, results of operations and financial condition.
Added
We may also be subject to cybersecurity attacks and other intentional hacking, which could include attempts to gain unauthorized access to our data and computer systems. In particular, as discussed further below, our operations have been, and may in the future be, subject to ransomware or cyber-extortion attacks, which could significantly disrupt our operations.
Added
Generally, such attacks involve restricting access to computer systems or vital data.
Added
We employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password changes, firewall detection systems, frequent backups, a redundant data system for core applications and annual penetration testing; however, there is no guarantee such efforts will be successful in preventing a cybersecurity attack.
Added
A cybersecurity attack or breach could compromise the confidential information of our associates, customers and vendors, and could result in service interruptions, operational difficulties, loss of revenues or market share, liability to our customers or others, diversion of corporate resources and injury to our reputation and increased costs.
Added
In such cases, we may have to operate manually, which may result in considerable delays in our handling of and damage to perishable products or interruption to other key business processes. Addressing such issues could prove difficult or impossible and be very costly.
Added
Additionally, a successful attack may result in our customers making monetary claims against us pursuant to the terms of their contracts with us, the amount of which may be significant.
Added
In addition, our customers rely extensively on computer systems to process transactions and manage their business and thus their businesses are also at risk from, and may be impacted by, cybersecurity attacks. An interruption in the business operations of our customers or a deterioration in their reputation resulting from a cybersecurity attack could indirectly impact our business operations.
Added
Our computer network has been subjected to cyber attacks from time to time. We previously suffered a cyber attack in November 2020 and more recently identified a separate cyber incident in April 2023 (the “Cyber incident”). We immediately implemented containment measures and took operations offline to secure our systems and reduce disruption to our business and customers.
Added
We reviewed the nature and scope of the incident, working closely with cybersecurity experts and legal counsel and reported the matter to law enforcement. 25 Table of C ontents The Cyber incident affected our operations. In particular, the incident resulted in a significant number of our facilities being unable to receive or deliver products for a period of time.
Added
Such operational impacts resulted in considerable delays in the delivery of our products to our customers and interruption to other key business processes for a period of time.
Added
We have also received a number of claims from our customers pursuant to the terms of their contracts as a result of the Cyber incident, and we established a reserve for these claims.
Added
The expense, net of insurance recoveries is reflected in “Acquisition, cyber incident and other, net” on the Consolidated Statements of Operations for the year ended December 31, 2024, and 2023. The reserve balance is included in “Accounts payable and accrued expenses” in our Consolidated Balance Sheets as of December 31, 2024, and 2023.
Added
Our investigation into the Cyber incident revealed unauthorized access to personal information. As a result of this unauthorized access, we received inquiries from several regulators and purported class action lawsuits were filed against the company. We may also be subject to subsequent investigations, claims or actions in addition to other costs, fines, penalties, or other obligations related to impacted data.
Added
In addition, the misuse, or perceived misuse, of sensitive or confidential information regarding our business could cause harm to our reputation and result in the loss of business with existing or potential customers, which could adversely impact our business, results of operations and financial condition.
Added
We may be subject to unrelated future incidents that could have a material adverse effect on our business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to our reputation.
Added
We depend on information technology systems to operate our business, and issues with maintaining, upgrading or implementing these systems, could have a material adverse effect on our business. We rely on the efficient and uninterrupted operation of information technology systems to process, transmit and store electronic information in our day-to-day operations.
Added
All information technology systems are vulnerable to damage or interruption from a variety of sources. Our business has grown in size and complexity; this has placed, and will continue to place, significant demands on our information technology systems.
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Item 2. Properties
Properties — owned and leased real estate
10 edited+3 added−9 removed4 unchanged
Item 2. Properties
Properties — owned and leased real estate
10 edited+3 added−9 removed4 unchanged
2023 filing
2024 filing
Biggest changeThe following table provides summary information regarding the warehouses in our portfolio that we owned, leased or managed as of December 31, 2023. 48 Country / Region # of warehouses Cubic feet (in millions) % of total cubic feet Pallet positions (in thousands) Average economic occupancy (1) Average physical occupancy (1) Revenues (2) (in millions) Segment contribution (NOI) (2)(3) (in millions) Total customers (4) Warehouse Segment Portfolio (5) United States East 53 376.8 25 % 1,176 85 % 72 % $ 635.6 $ 195.3 1,105 Southeast 49 317.4 21 % 980 83 % 75 % 458.0 103.9 697 Central 41 268.2 18 % 1,085 84 % 77 % 439.3 155.6 731 West 45 273.7 18 % 1,158 80 % 74 % 401.5 140.6 624 Canada 5 32.6 2 % 121 92 % 89 % 45.5 16.5 85 North America Total 193 1,268.7 86 % 4,520 83 % 75 % $ 1,979.9 $ 611.9 2,373 Netherlands 7 36.7 2 % 112 82 % 82 % 51.2 10.2 33 United Kingdom 6 40.1 3 % 244 89 % 84 % 53.8 22.6 187 Spain 4 15.2 1 % 77 61 % 61 % 21.5 5.3 275 Portugal 4 11.5 1 % 58 64 % 64 % 11.6 2.7 175 Ireland 3 9.5 1 % 59 79 % 70 % 20.4 4.9 144 Austria 1 4.2 — % 44 75 % 75 % 23.2 6.9 141 Poland 2 3.5 — % 14 95 % 95 % 6.3 1.4 62 Europe Total 27 120.7 8 % 608 80 % 77 % $ 188.0 $ 54.0 1,235 Australia 11 60.0 4 % 206 92 % 84 % 171.6 39.0 128 New Zealand 7 20.4 1 % 86 97 % 88 % 38.9 13.9 62 Asia-Pacific Total 18 80.4 5 % 292 94 % 85 % $ 210.5 $ 52.9 186 Argentina 2 9.7 1 % 23 81 % 81 % 12.7 3.8 51 South America Total 2 9.7 1 % 23 81 % 81 % $ 12.7 $ 3.8 51 Warehouse Segment Total / Average 240 1,479.5 100 % 5,443 83 % 76 % $ 2,391.1 $ 722.6 3,826 Third-Party Managed Portfolio United States 3 14.9 74 % — — — $ 16.1 $ 0.6 3 Canada 1 5.3 26 % — — — 3.7 0.8 1 North America Total / Average 4 20.2 100 % — — — $ 19.8 $ 1.4 4 Asia-Pacific 1 — — % — — — 22.8 4.5 1 Third-Party Managed Total / Average 5 20.2 100 % — — — $ 42.6 $ 5.9 5 Portfolio Total / Average 245 1,499.7 100 % 5,443 83 % 76 % $ 2,433.7 $ 728.5 3,826 49 (1) We define average economic occupancy as the aggregate number of physically occupied pallets and any additional pallets otherwise contractually committed for a given period, without duplication.
Biggest changeCountry / Region # of warehouses Cubic feet (In millions) % of total cubic feet Pallet positions (In thousands) Warehouse Segment Portfolio (1) United States East 53 351.0 25 % 1,217 Southeast 48 315.6 22 % 1,022 Central 41 268.2 19 % 1,087 West 45 262.3 18 % 1,142 Canada 5 32.6 2 % 120 North America Total 192 1,229.7 86 % 4,588 Netherlands 6 31.5 2 % 112 United Kingdom 5 39.3 3 % 244 Spain 4 15.2 1 % 80 Portugal 4 11.5 1 % 58 Ireland 3 9.5 1 % 59 Austria 1 4.2 — % 44 Poland 2 3.5 — % 14 Europe Total 25 114.7 8 % 611 Australia 10 59.1 4 % 219 New Zealand 6 16.9 1 % 82 Asia-Pacific Total 16 76.0 5 % 301 Argentina 2 9.7 1 % 23 South America Total 2 9.7 1 % 23 Warehouse Segment Total / Average 235 1,430.1 100 % 5,523 Third-Party Managed Portfolio United States 3 14.9 100 % — Asia-Pacific 1 — — % — Third-Party Managed Total / Average 4 14.9 100 % — Portfolio Total / Average 239 1,445.0 100 % 5,523 (1) As of December 31, 2024, we owned 168 of our North American warehouses and 40 of our international warehouses, and we leased 24 of our North American warehouses and 3 of our international warehouses.
Production advantaged warehouses are generally located adjacent to or otherwise in close proximity to customer processing or production facilities and were often build-to-suit at the time of their construction. • Facility Leased . As of December 31, 2023, we had 4 facility leased warehouses with approximately 22.1 million cubic feet of temperature-controlled capacity.
Production advantaged warehouses are generally located adjacent to or otherwise in close proximity to customer processing or production facilities and were often build-to-suit at the time of their construction. • Facility Leased . As of December 31, 2024, we had 4 facility leased warehouses with approximately 22.1 million cubic feet of temperature-controlled capacity.
As of December 31, 2023, we owned or leased 58 production advantaged warehouses with approximately 349.5 million cubic feet of temperature-controlled capacity and 1.5 million pallet positions. Production advantaged warehouses are temperature-controlled warehouses that are typically dedicated to one or a small number of customers.
As of December 31, 2024, we owned or leased 58 production advantaged warehouses with approximately 349.5 million cubic feet of temperature-controlled capacity and 1.5 million pallet positions. Production advantaged warehouses are temperature-controlled warehouses that are typically dedicated to one or a small number of customers.
Our third-party managed segment provides a complete outsourcing solution by managing all 50 aspects of the distribution of our customers’ products, including order management, reverse logistics, inventory control and, in some instances, dedicated transportation services for temperature-controlled and ambient ( i.e. , non-refrigerated) customers.
Our third-party managed segment provides a complete outsourcing solution by managing all aspects of the distribution of our customers’ products, including order management, reverse logistics, inventory control and, in some instances, dedicated transportation services for temperature-controlled and ambient ( i.e. , non-refrigerated) customers. 47 Table of C ontents
Our Warehouse Portfolio As of December 31, 2023, we operated a global network of 245 warehouses that contained approximately 1.5 billion cubic feet and over 5 million pallet positions.
Our Warehouse Portfolio As of December 31, 2024, we operated a global network of 239 warehouses that contained approximately 1.4 billion cubic feet and over 5.5 million pallet positions.
The majority of our facility leased warehouses are leased to third parties under “triple net lease” arrangements. • Third-Party Managed . As of December 31, 2023, we managed 5 warehouses on behalf of third parties with approximately 20.2 million cubic feet of temperature-controlled capacity.
The majority of our facility leased warehouses are leased to third parties under “triple net lease” arrangements. • Third-Party Managed . As of December 31, 2024, we managed 4 warehouses on behalf of third parties with approximately 14.9 million cubic feet of temperature-controlled capacity.
ITEM 2. Properties General In addition to the information in this Item 2, certain information regarding our portfolio is contained in Schedule III (“Financial Statement Schedule”) under Part IV, Item 15(b) and which is included in Part II, Item 8.
ITEM 2. Properties General In addition to the information in this Item 2, certain information regarding our portfolio is contained in Schedule III (“ Real Estate and Accumulated Depreciation ”) under Part IV, Item 15(b) and which is included in Part II, Item 8 .
Our warehouses feature customized racking systems that allow for the storage of products on pallets in horizontal rows across vertically stacked levels. Our racking systems can accommodate a wide array of different customer storage needs.
Our warehouses feature customized racking systems that allow for the storage of products on pallets in horizontal rows across vertically stacked levels. Our racking systems can accommodate a wide array of different customer storage needs. The following table provides summary information regarding the warehouses in our portfolio that we owned, leased or managed as of December 31, 2024.
We own, develop and manage multiple types of temperature-controlled warehouses, which allows us to service our customers’ needs across our network. Our warehouse portfolio consists of five distinct property types: • Distribution . As of December 31, 2023, we owned or leased 94 distribution centers with approximately 687.0 million cubic feet of temperature-controlled capacity and 2.2 million pallet positions.
As of December 31, 2024, 14 of our owned facilities were located on land that we lease pursuant to long-term ground leases. 46 Table of C ontents We own, develop and manage multiple types of temperature-controlled warehouses, which allows us to service our customers’ needs across our network. Our warehouse portfolio consists of five distinct property types: • Distribution .
As of December 31, 2023, we owned or leased 84 public warehouses with approximately 420.9 million cubic feet of temperature-controlled capacity and 1.7 million pallet positions. Public warehouses generally store multiple types of inventory and cater to small and medium-sized businesses by primarily serving the needs of local and regional customers. • Production Advantaged .
Public warehouses generally store multiple types of inventory and cater to small and medium-sized businesses by primarily serving the needs of local and regional customers including restaurants, government institutions, hotels, hospitals, schools, or supermarkets. • Production Advantaged .
Removed
We estimate the number of contractually committed pallet positions by taking into account actual pallet commitments specified in each customer’s contract, and subtracting the physical pallet positions. We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the year ended December 31, 2023.
Added
As of December 31, 2024, we owned or leased 92 distribution centers with approximately 655.9 million cubic feet of temperature-controlled capacity and 2.3 million pallet positions. Distribution centers typically house a wide variety of our customers’ finished products until future shipment to their final destinations.
Removed
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.
Added
Our food service distribution centers typically supply restaurants, government institutions, hotels, hospitals, and schools, while our retail-focused distribution centers primarily service supermarkets and e-commerce fulfillment centers. Each distribution center is strategically located in a key distribution hub, serving a distinct population center within a major market. • Public .
Removed
We base this estimate on 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.
Added
As of December 31, 2024, we owned or leased 81 public warehouses with approximately 402.6 million cubic feet of temperature-controlled capacity and 1.7 million pallet positions.
Removed
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. (2) Year ended December 31, 2023.
Removed
(3) We use the term “segment contribution NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges and corporate-level selling, general and administrative expenses).
Removed
The applicable segment contribution NOI from our owned and leased warehouses and our third-party managed warehouses is included in our warehouse segment contribution NOI and third-party managed segment contribution NOI, respectively. (4) We serve some of our customers in multiple geographic regions and in multiple facilities within geographic regions.
Removed
As a result, the total number of customers that we serve is less than the total number of customers reflected in the table above that we serve in each geographic region.
Removed
(5) As of December 31, 2023, we owned 157 of our North American warehouses and 40 of our international warehouses, and we leased 36 of our North American warehouses and seven of our international warehouses. As of December 31, 2023, fourteen of our owned facilities were located on land that we lease pursuant to long-term ground leases.
Removed
Distribution centers typically house a wide variety of customers’ finished products until future shipment to end users. Each distribution center is located in a key distribution hub that services a distinct surrounding population center in a major market. • Public .
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
1 edited+0 added−0 removed2 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
1 edited+0 added−0 removed2 unchanged
2023 filing
2024 filing
Biggest changeRefer to No te 17 - Commitments and Contingencies of the Consolidated Financial Statements for additional information.
Biggest changeSee Note 17 - Commitments and Contingencies to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+0 added−0 removed4 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+0 added−0 removed4 unchanged
2023 filing
2024 filing
Biggest changeThe comparison assumes that $100 was invested on December 31, 2018 in Americold Realty Trust, Inc. common stock and in each of these indices and assumes reinvestment of dividends, if any. 52 Comparison of Cumulative Total Returns Among Americold Realty Trust, Inc., S&P 500, and RMZ Index Assumes $100 invested on December 31, 2018 Assumes dividends reinvested To fiscal year ended December 31, 2023 Pricing Date COLD ($) S&P 500($) RMZ($) 12/31/2018 100.00 100.00 100.00 12/31/2019 147.61 131.09 123.92 12/31/2020 168.39 153.68 112.02 12/31/2021 161.43 199.86 161.31 12/31/2022 148.60 160.92 117.22 12/31/2023 168.45 203.05 127.73 • This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Security Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. • The stock price performance shown on the graph is not necessarily indicative of future price performance. • The hypothetical investment in Americold Realty Trust, Inc.’s common stock presented in the stock performance graph above is based on the closing price of the common stock on December 31, 2018. 53 Sales of Unregistered Securities None.
Biggest changeThe comparison assumes that $100 was invested on December 31, 2019 in Americold Realty Trust, Inc. common stock and in each of these indices and assumes reinvestment of dividends, if any. 49 Table of C ontents Comparison of Cumulative Total Returns Among Americold Realty Trust, Inc., S&P 500, and RMZ Index Assumes $100 invested on December 31, 2019 To fiscal year ended December 31, 2024 Pricing Date COLD ($) S&P 500 ($) RMZ ($) 12/31/2019 100.00 100.00 100.00 12/31/2020 149.80 153.71 119.17 12/31/2021 131.58 196.99 170.49 12/31/2022 113.60 160.52 128.70 12/31/2023 121.47 201.72 146.38 12/31/2024 85.87 251.15 159.20 • This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Security Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. • The stock price performance shown on the graph is not necessarily indicative of future price performance. • The hypothetical investment in Americold Realty Trust, Inc.’s common stock presented in the stock performance graph above is based on the closing price of the common stock on December 31, 2019. 50 Table of C ontents Sales of Unregistered Securities None.
Stock Performance Graph The following graph compares the change in the cumulative total stockholder return on Americold Realty Trust, Inc. common stock during the period from December 31, 2018 through December 31, 2023, with the cumulative total returns on the MSCI US REIT Index (“RMZ”) and the S&P 500 Market Index.
Stock Performance Graph The following graph compares the change in the cumulative total stockholder return on Americold Realty Trust, Inc. common stock during the period from December 31, 2019 through December 31, 2024, with the cumulative total returns on the MSCI US REIT Index (“RMZ”) and the S&P 500 Net TR Index.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Americold Realty Trust, Inc.’s common stock is listed on the NYSE under the trading symbol “COLD”. Our common stock has been publicly traded since January 19, 2018. On February 23, 2024, we had approximately 283,784,221 shares of common stock outstanding.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Americold Realty Trust, Inc.’s common stock is listed on the NYSE under the trading symbol “COLD”. Our common stock has been publicly traded since January 19, 2018. On February 25, 2025 , we had approximately 284,393,914 shares of common stock outstanding.
The number of holders of record of our common stock on February 23, 2024 wa s 14. This figure does not represent the actual number of beneficial owners of our common stock because our common stock is frequently held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares.
The number of holders of record of our common stock on February 25, 2025 was 13. This figure does not represent the actual number of beneficial owners of our common stock because our common stock is frequently held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
145 edited+80 added−58 removed52 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
145 edited+80 added−58 removed52 unchanged
2023 filing
2024 filing
Biggest changeYear ended December 31, Change 2023 actual 2023 constant currency (1) 2022 actual Actual Constant currency (Dollars in thousands) Rent and storage $ 1,101,741 $ 1,113,052 $ 999,388 10.2 % 11.4 % Warehouse services 1,289,348 1,299,295 1,303,583 (1.1) % (0.3) % Total warehouse segment revenue 2,391,089 2,412,347 2,302,971 3.8 % 4.7 % Power 147,750 149,572 155,661 (5.1) % (3.9) % Other facilities costs (2) 247,743 250,302 231,944 6.8 % 7.9 % Labor 1,023,806 1,033,200 1,006,862 1.7 % 2.6 % Other services costs (3) 249,187 250,694 272,272 (8.5) % (7.9) % Total warehouse segment cost of operations $ 1,668,486 $ 1,683,768 $ 1,666,739 0.1 % 1.0 % Warehouse segment contribution (NOI) $ 722,603 $ 728,579 $ 636,232 13.6 % 14.5 % Warehouse rent and storage contribution (NOI) $ 706,248 $ 713,178 $ 611,783 15.4 % 16.6 % Warehouse services contribution (NOI) $ 16,355 $ 15,401 $ 24,449 (33.1) % (37.0) % Total warehouse segment margin 30.2 % 30.2 % 27.6 % 259 bps 258 bps Rent and storage margin 64.1 % 64.1 % 61.2 % 289 bps 286 bps Warehouse services margin 1.3 % 1.2 % 1.9 % -61 bps -69 bps (1) The adjustments from our U.S.
Biggest changeYears Ended December 31, Change 2024 actual 2024 constant currency (1) 2023 actual Actual Constant currency (Dollars and units in thousands, except per pallet data) Global Warehouse revenues: Rent and storage $ 1,059,508 $ 1,078,900 $ 1,101,741 (3.8) % (2.1) % Warehouse services 1,357,235 1,370,974 1,289,348 5.3 % 6.3 % Total revenues $ 2,416,743 $ 2,449,874 $ 2,391,089 1.1 % 2.5 % Global Warehouse cost of operations: Power 147,453 151,196 147,750 (0.2) % 2.3 % Other facilities costs (2) 256,910 262,127 247,743 3.7 % 5.8 % Labor 998,543 1,007,972 1,023,806 (2.5) % (1.5) % Other services costs (3) 212,124 215,995 249,187 (14.9) % (13.3) % Total warehouse cost of operations $ 1,615,030 $ 1,637,290 $ 1,668,486 (3.2) % (1.9) % Global Warehouse contribution (NOI) $ 801,713 $ 812,584 $ 722,603 10.9 % 12.5 % Rent and storage contribution (NOI) $ 655,145 $ 665,577 $ 706,248 (7.2) % (5.8) % Services contribution (NOI) $ 146,568 $ 147,007 $ 16,355 796.2 % 798.9 % Global Warehouse margin 33.2 % 33.2 % 30.2 % 295 bps 295 bps Rent and storage margin 61.8 % 61.7 % 64.1 % -227 bps -241 bps Services margin 10.8 % 10.7 % 1.3 % 953 bps 945 bps Global Warehouse rent and storage metrics: Average economic occupied pallets 4,304 n/a 4,546 (5.3) % n/a Average physical occupied pallets 3,731 n/a 4,120 (9.4) % n/a Average physical pallet positions 5,523 n/a 5,442 1.5 % n/a Economic occupancy percentage 77.9 % n/a 83.5 % -561 bps n/a Physical occupancy percentage 67.6 % n/a 75.7 % -815 bps n/a Total rent and storage revenues per average economic occupied pallet $ 246.17 $ 250.67 $ 242.35 1.6 % 3.4 % Total rent and storage revenues per average physical occupied pallet $ 283.97 $ 289.17 $ 267.41 6.2 % 8.1 % Global Warehouse services metrics: Throughput pallets 36,509 n/a 37,524 (2.7) % n/a Total warehouse services revenues per throughput pallet $ 37.18 $ 37.55 $ 34.36 8.2 % 9.3 % (1) The adjustments from our U.S.
Examples of capital expenditures associated with expansion and development initiatives include funding of construction costs, increases to warehouse capacity and pallet positions, acquisitions of reusable incremental material handling 81 equipment, and implementing energy efficiency projects, such as thermal energy storage, LED lighting, motion-sensor technology, variable frequency drives for our fans and compressors, rapid-close doors and alternative-power generation technologies.
Examples of capital expenditures associated with expansion and development initiatives include funding of construction costs, increases to warehouse capacity and pallet positions, acquisitions of reusable incremental material handling equipment, and implementing energy efficiency projects, such as thermal energy storage, LED lighting, motion-sensor technology, variable frequency drives for our fans and compressors, rapid-close doors and alternative-power generation technologies.
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.
We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of real estate related 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.
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.
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 employee turnover, working capital efficiency and reduced IT maintenance capital expenditures .
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.
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/loss or cash flows from operating activities determined in accordance with U.S. GAAP.
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 plant maintenance capabilities, global procurement functionality and shared-service operations in certain international regions, among others.
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.
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.
The table below reconciles FFO, Core FFO and Adjusted FFO to Net loss, which is the most directly comparable financial measure calculated in accordance with U.S.
Factors that led to this conclusion include i) the impact of historic and sustained increases in inflation and interest rates on the reporting unit’s weighted average costs of capital which was beyond the Company’s control, ii) inability to achieve local operating results at historical underwritten values, and iii) increased tax rates applicable in the related European jurisdictions.
Factors that led to this conclusion included i) the impact of historic and sustained increases in inflation and interest rates on the reporting unit’s weighted average costs of capital which was beyond the Company’s control, ii) inability to achieve local operating results at historical underwritten values, and iii) increased tax rates applicable in the related European jurisdictions.
These assumptions are based on risk-adjusted discount factors accommodating viewpoints that consider the full range of variability contemplated in the current and potential future economic situations. There is no remaining goodwill related to the Europe warehouse reporting unit following this impairment.
These assumptions were based on risk-adjusted discount factors accommodating viewpoints that consider the full range of variability contemplated in the current and potential future economic situations. There is no remaining goodwill related to the Europe warehouse reporting unit following this impairment.
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, and v) e-commerce fulfillment.
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, and v) e-commerce fulfillment and many more.
The estimates of future cash flows are subject, but not limited to the following inputs and assumptions: revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rate, macro economic conditions, and discount rates, which are affected by expectations about future market and 84 economic conditions.
The estimates of future cash flows are subject, but not limited to the following inputs and assumptions: revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rate, and discount rates, which are affected by expectations about future market and economic conditions.
Transportation Transportation services revenue is derived from fees charged for transportation of our customers products, often including fuel and capacity surcharges. Transportation services cost of operations are primarily affected by third-party carrier costs, which are influenced by carrier factors like driver and equipment availability.
Transportation Transportation services revenues is derived from fees charged for transportation of our customers products, often including fuel and capacity surcharges. Transportation services cost of operations are primarily affected by third-party carrier costs, which are influenced by carrier factors like driver and equipment availability.
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.
We use EBITDAre and Core EBITDA as measures of our operating performance and not as measures of liquidity. The table below reconciles NAREIT EBITDAre and Core EBITDA to Net loss, which is the most directly comparable financial measure calculated in accordance with U.S.
These metrics isolate the operating performance of a consistent set of properties and thus eliminates the effects of changes in portfolio composition and currency fluctuations. The following table shows the number of same-store and non-same store warehouses in our portfolio as of December 31, 2023.
These metrics isolate the operating performance of a consistent set of properties and thus eliminates the effects of changes in portfolio composition and currency fluctuations. The following table shows the number of same-store and non-same store warehouses in our portfolio as of December 31, 2024.
Maintenance Capital Expenditures and Repair and Maintenance Expenses We utilize a strategic approach to recurring maintenance capital expenditures and repair and maintenance expenses to maintain the high quality and operational efficiency of our warehouses and ensure that our warehouses meet the “mission-critical” role they serve in the cold chain.
Maintenance Capital Expenditures and Repair and Maintenance Expenses We utilize a strategic and preventative approach to maintenance capital expenditures and repair and maintenance expenses to maintain the high quality and operational efficiency of our warehouses and ensure that our warehouses meet the “mission-critical” role they serve in the cold chain.
Impairment of related party loan receivable represents impairment charges associated with the loan issued to the Comfrio joint venture which is further described in Note 3-Business Combinations and Asset Acquisitions of the consolidated financial statements.
Impairment of related party loan receivable represents impairment charges associated with the loan issued to the Comfrio joint venture which is further described in Note 3 - Business Combinations, Asset Acquisitions and Discontinued Operations of the Consolidated Financial Statements.
(b) During the year ended December 31, 2023, management excluded losses from discontinued operations from Core FFO applicable to common stockholders and Adjusted FFO applicable to common stockholders and included certain losses from discontinued operations for NAREIT FFO.
(3) During the year ended December 31, 2023, management excluded certain losses from discontinued operations from Core FFO applicable to common stockholders, and Adjusted FFO applicable to common stockholders and included certain losses from discontinued operations for NAREIT FFO.
The Company engaged an external cyber security expert to initiate responses to contain, remediate, and commence a forensic investigation. Actions taken included preventative measures such as shutting down certain operating systems and supplementing existing security monitoring with additional scanning and other protective measures.
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.
Factors that could cause such differences include those identified below and those described under Item 1A of this Annual Report on Form 10-K. Refer to our Annual Report on Form 10-K as filed on February 27, 2023, for a discussion of the comparative results of operations for the years ended December 31, 2022 and 2021.
Factors that could cause such differences include those identified below and those described under Item 1A of this Annual Report on Form 10-K. Refer to our Annual Report on Form 10-K as filed on February 29, 2024 , for a discussion of the comparative results of operations for the years ended December 31, 2023 and 2022.
Refer to Note 3-Business Combinations and Asset Acquisitions of the Consolidated Financial Statements for details of the purchase price allocation for each acquisition.
Refer to Note 3 - Business Combinations, Asset Acquisitions and Discontinued Operations of the Consolidated Financial Statements for details of the purchase price allocation for each acquisition.
GAAP requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis.
GAAP, requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of 83 Table of C ontents the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis.
Such liens permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not available to us for re-sale.
Such liens permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a 77 Table of C ontents delinquent account, but such products may be perishable or otherwise not available to us for re-sale.
The estimation of the net present value of future cash flows is based upon varying economic assumptions, including assumptions such as revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates. Of these assumptions, the discount rates are the most subjective and/or complex.
The estimation of the net present value of future cash flows was based upon varying economic assumptions, including assumptions such as revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates. Of these assumptions, the discount rates were the most subjective and/or complex.
The increase is primarily due to higher warehouse segment contribution and improved collection of accounts receivable. Investing Activities For the year ended December 31, 2023 cash used for additions to property, buildings and equipment was $264.5 million reflecting investments in our various expansion and development projects and capitalized maintenance capital expenditures.
The increase is primarily due to higher warehouse segment contribution and improved collection of accounts receivable. Investing Activities For the year ended December 31, 2024, cash used for additions to property, buildings, and equipment was $309.5 million, reflecting investments in our various expansion and development projects and capitalized maintenance expenditures.
The Company engaged the assistance of a third-party valuation firm to perform the goodwill quantitative impairment test, which entailed an assessment of the Europe Warehouse reporting unit’s fair value relative to the carrying value that was derived using the income approach. The assumptions used in the quantitative impairment test are estimates and use Level 3 inputs.
The Company engaged the assistance of a third-party valuation firm to perform the goodwill quantitative impairment test, which included an assessment of the Europe Warehouse reporting unit’s fair value relative to the carrying value that was derived using the income approach. The assumptions used in the quantitative impairment test were estimates and used Level 3 inputs.
Maintenance Capital Expenditures Maintenance capital expenditures are capitalized investments made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology systems. Examples of maintenance capital expenditures related to 80 our existing temperature-controlled warehouse network include replacing roofs and refrigeration equipment, and upgrading our racking systems.
Maintenance Capital Expenditures Maintenance capital expenditures are capitalized investments made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology systems. Examples of maintenance capital expenditures related to our existing temperature-controlled warehouse network include roof and refrigeration equipment replacement and upgrading our racking systems.
As of October 1, 2023, our reporting units which had a goodwill balance included the following: North America warehouse, North America transportation, Europe warehouse and Asia-Pacific warehouse.
As of October 1, 2024, our reporting units which had a goodwill balance included the following: North America warehouse, North America transportation, and Asia-Pacific warehouse.
Other facilities costs include utilities other than power, property taxes and insurance, sanitation, repairs and maintenance, operating lease rent charges, security, and other related facilities costs. Other services costs include equipment costs, warehouse consumables (e.g. shrink-wrap), employee protective equipment, warehouse administration and other related services costs.
Other facilities costs include utilities other than power, property taxes and insurance, sanitation, repairs and maintenance, operating lease rent charges, security, and other related facilities costs. 58 Table of C ontents Other services costs include equipment costs, warehouse consumables (e.g. shrink-wrap), employee protective equipment, warehouse administration and other related services costs.
Our management believes that this ratio is useful because it provides investors with information regarding gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using Core EBITDA. 77 Liquidity and Capital Resources We currently expect that our principal sources of funding for working capital, facility acquisitions, business combinations, expansions, maintenance and renovation of our properties, development projects, debt service and distributions to our stockholders will include: • current cash balances; • cash flows from operations; • our Senior Unsecured Revolving Credit Facility; • our ATM Equity Program; and • other forms of debt financings and equity offerings, including capital raises through joint ventures.
Our management believes that this ratio is useful because it provides investors with information regarding gross debt less cash, cash equivalents and restricted cash, which could be used to repay debt, compared to our performance as measured using Core EBITDA. 75 Table of C ontents Liquidity and Capital Resources We currently expect that our principal sources of funding for working capital, facility acquisitions, business combinations, expansions, maintenance and renovation of our properties, development projects, debt service and distributions to our stockholders will include: • current cash balances; • cash flows from operations; • our Senior Unsecured Revolving Credit Facility; • our Current ATM Equity Program; • public debt offerings under the Company’s Universal Shelf Registration Statement; and • other forms of debt financings and equity offerings, including capital raises through joint ventures.
Repair and maintenance expenses consist of expenses related to our existing temperature-controlled warehouse network and its existing supporting personal property and are reflected as operating expenses on our income statement. Examples of repair and maintenance expenses related to our warehouse portfolio include ordinary repair and maintenance on roofs, racking, walls, doors, parking lots and refrigeration equipment.
Repair and maintenance expenses consist of expenses related to our existing temperature-controlled warehouse network and its existing supporting personal property and are reflected as operating expenses on the Consolidated Statements of Operations. Examples of repair and maintenance expenses related to our warehouse portfolio include ordinary repair and maintenance on roofs, racking, walls, doors, parking lots and refrigeration equipment.
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 normal operations as of June 30, 2023.
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.
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. (2) Includes real estate rent expense o f $37.5 million and $42.0 million for the year ended December 31, 2023 and 2022, respectively.
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. (2) Includes real estate rent expense o f $35.9 million and $37.5 million, on an actual basis, for the year ended December 31, 2024 and 2023, respectively.
On average the first and second quarter segment contributions are relatively consistent. On a portfolio-wide basis, physical occupancy rates are generally the lowest during May and June and gradually increase thereafter, due to annual harvests and our customers’ focus on building inventories for end-of-year holidays, which generally peak between mid-September and early December.
On a portfolio-wide basis, physical occupancy rates are generally the lowest during May and June and gradually increase thereafter, due to annual harvests and our customers’ focus on building inventories for end-of-year holidays, which generally peak between mid-September and early December.
Examples of capital expenditures to enhance our information technology platform include the delivery of new systems and software and customer interface functionality. Acquisitions During the year ended December 31, 2023 we completed the acquisition of Safeway, Ormeau, and Comfrio (subsequently disposed during 2023). During the year ended December 31, 2022, we completed the acquisitions of De Bruyn Cold Storage.
Examples of capital expenditures to enhance our information technology platform include the delivery of new systems and software and customer interface functionality. Acquisitions & Dispositions During the year ended December 31, 2023, we completed the acquisitions of Safeway, Ormeau, and Comfrio (subsequently disposed during 2023).
Based on that qualitative evaluation, if we determine it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, we perform a quantitative impairment test.
Based on that qualitative evaluation, if we determine it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, we perform a quantitative impairment test. Alternatively, the Company may elect to proceed directly to the quantitative impairment test.
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, rather than the actual exchange rates in effect during the respective period.
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.
The results of our 2023 impairment test for our reporting units other than Europe warehouse indicated that the estimated fair value of each of our reporting units was in excess of the corresponding carrying amount as of October 1, and no impairment of goodwill existed.
The results of our 2024 impairment test for our reporting units indicated that the estimated fair value of each of our reporting units was in excess of the corresponding carrying amount as of October 1, and no impairment of goodwill existed.
We also calculate our Core EBITDA as EBITDAre further adjusted for Acquisition, cyber incident and other net; loss from investments in partially owned entities; impairment of indefinite and long-lived assets (when applicable); foreign currency exchange loss; gain on settlement related to prior period operations; stock-based compensation expense; loss on debt extinguishment; modifications and termination of derivative instruments; net gain or loss on other asset disposals; reduction in EBITDAre from partially owned entities; impairment of related party receivable; loss put option; gain on extinguishment of New Market Tax Credit structure; loss on deconsolidation of subsidiary contributed to LATAM joint venture; gain on legal settlement related to prior period operations; gain or loss from discontinued operations held for sale; and gain on sale of LATAM joint venture.
We also calculate our Core EBITDA as EBITDAre further adjusted for Acquisition, cyber incident, and other, net, Loss from investments in partially owned entities, Impairment of indefinite and long-lived assets, Foreign currency exchange (gain) loss, Stock-based compensation expense, Loss on debt extinguishment, modifications and termination of derivative instruments, Loss on other asset disposals, Gain on extinguishment of New Market Tax Credit Structure, Loss on deconsolidation of Chile Joint JV, Gain on legal settlement related to prior period operations, Project Orion deferred costs amortization, Reduction in EBITDAre from partially owned entities, Gain on sale of LATAM JV, Loss from discontinued operations, net of tax, Impairment of related party loan receivable, and Loss on put option.
We also adjust Core FFO for our share of reconciling items for partially owned entities. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations.
We believe 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.
Selling, general, and administrative expenses consist primarily of non-warehouse related labor, administrative, business development, marketing, engineering, human resources, information technology, performance and time based incentive compensation, communications, travel, professional fees, bad debt, training, and office supplies.
Selling, general, and administrative expenses consist primarily of non-warehouse related labor, administrative, business development, marketing, engineering, human resources, information technology (including amortization expenses associated with the implementation of Project Orion), performance and time based incentive compensation, communications, travel, professional fees, bad debt, training, and office supplies.
For purposes of comparability using this same approach, the following adjusted historical results are recasted as follows: 74 Recasted Year Ended December 31, (in thousands) 2023 2022 2021 NAREIT FFO $(114,378) $202,088 $172,489 Core FFO applicable to common stockholders $279,395 $254,078 $232,484 Adjusted FFO applicable to common stockholders $353,242 $303,007 $299,153 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 benefit, depreciation and amortization, gain or loss on sale of real estate, and adjustment to reflect share of EBITDAre of partially owned entities.
For purposes of comparability using this same approach, the following adjusted historical results are recast as follows: 72 Table of C ontents Recast for Years Ended December 31, 2023 2022 ( In thousands) NAREIT FFO $ (114,378) $ 202,088 Core FFO applicable to common stockholders $ 279,395 $ 254,078 Adjusted FFO applicable to common stockholders $ 353,242 $ 303,007 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 Depreciation and amortization, Interest expense, Income tax benefit, Net (gain) loss from sale of real estate, and Adjustment to reflect share of EBITDAre of partially owned entities.
Rent, storage, and warehouse services cost of operations consist of labor, power, other facilities costs, and other service costs. 60 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.
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.
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. On a constant currency basis, transportation revenues decreased $69.4 million, or 22.1%, compared to the prior year.
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. On a constant currency basis, transportation revenues decreased $25.3 million, or 10.6%, compared to the prior year.
Management’s Overview We are a global leader in temperature-controlled storage, logistics, real estate and value added services, and are focused on the ownership, operation, acquisition and development of temperature-controlled warehouses.
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 activities associated with Project Orion are expected to be substantially complete within three years.
The activities associated with Project Orion are expected to be substantially complete within three years from the project’s start date.
How We Assess the Performance of Our Business Segment Contribution Net Operating Income NOI We evaluate the performance of our primary business segments based on their NOI contribution to our overall results of operations which aligns with how our decision makers evaluate performance. • Warehouse segment contribution NOI is calculated as warehouse segment revenues less its cost of operations (excluding any Depreciation and amortization, Impairment of indefinite and long-lived assets, corporate-level Selling, general, and administrative and corporate-level Acquisition, cyber incident, and other, net). • Warehouse rent and storage contribution NOI is calculated as warehouse rent and storage revenues less power and other facilities cost. 58 • Warehouse services operations NOI is calculated as warehouse services revenues less labor and other service costs. • Transportation segment contribution NOI is calculated as transportation segment revenues less its cost of operations. • Third-party managed segment contribution NOI is calculated as third-party managed segment revenues less its cost of operations. • Contribution NOI margin for each of these operations is calculated as the applicable contribution NOI measure divided by the applicable revenue measure.
How We Assess the Performance of Our Business Segment Contribution Net Operating Income (“NOI”) We evaluate the performance of our primary business segments based on their NOI contribution to our overall results of operations which aligns with how our decision makers evaluate performance. • Warehouse segment contribution NOI is calculated as warehouse segment revenues less its cost of operations (excluding any Depreciation and amortization; Impairment of indefinite and long-lived assets; corporate-level Selling, general, and administrative; corporate-level Acquisition, cyber incident, and other, net; Net (gain) loss from sale of real estate; and all components of Other income (expense). • Warehouse rent and storage contribution NOI is calculated as warehouse rent and storage revenues less power and other facilities cost. • Warehouse services operations NOI is calculated as warehouse services revenues less labor and other service costs. • Transportation segment contribution NOI is calculated as transportation segment revenues less its cost of operations (excluding any Depreciation and amortization, Impairment of indefinite and long-lived assets, corporate-level Selling, general, and administrative, corporate-level Acquisition, cyber incident, and other, net and Net (gain) loss from sale of real estate) and all components of Other income (expense). • Third-party Managed segment contribution NOI is calculated as third-party managed segment revenues less its cost of operations (excluding any Depreciation and amortization, Impairment of indefinite and long-lived assets, corporate-level Selling, general, and administrative, corporate-level Acquisition, cyber incident, and other, net and Net (gain) loss from sale of real estate) and all components of Other income (expense). • Contribution NOI margin for each of these operations is calculated as the applicable contribution NOI measure divided by the applicable revenue measure. 55 Table of C ontents Segment NOI and NOI margin contribution metrics 0help investors understand revenues, costs, and earnings among service types.
(3) Includes non-real estate rent expense (equipment lease and rentals) of $14.3 million and $12.9 million for the year ended December 31, 2023 and 2022, respectively. On a constant currency basis, our warehouse segment revenues increased $109.4 million, or 4.7%, during the year ended December 31, 2023, compared to the same period in the prior year.
(3) Includes non-real estate rent expense (equipment lease and rentals) of $12.3 million and $14.3 million, on an actual basis, for the year ended December 31, 2024 and 2023, respectively. On a constant currency basis, our warehouse segment revenues increased $58.8 million, or 2.5%, during the year ended December 31, 2024, compared to the same period in the prior year.
As of December 31, 2023, we maintained bad debt allowances of approximately $21.6 million, which we believed to be adequate. The decrease in bad debt expense is driven primarily by the decrease in revenue as well as a slight decrease in the aged accounts receivable.
As of December 31, 2024 and 2023, we maintained bad debt allowances of approximately $24.4 million and $21.6 million, respectively, which we believe to be adequate. The increase in bad debt expense is driven primarily by a slight increase in the aged accounts receivable.
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 consolidated statements of operations included elsewhere in this Annual Report on Form 10-K.
GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our Consolidated Statements of Operations included elsewhere in this Annual Report on Form 10-K.
Financing Activities Our net cash used by financing activities was $0.3 million for the year ended December 31, 2023. Cash used by financing activities and consisted of $716.3 million in proceeds from our revolving line of credit and $412.6 million in proceeds from issuance of common stock.
For the year ended December 31, 2023, cash provided by financing activities consisted primarily of $716.3 million in proceeds from our revolving line of credit and $412.6 million in proceeds from issuance of common stock under the Prior ATM Equity Program.
For the years ended December 31, 2023 and 2022, corporate-level selling, general and administrative expenses were 8.5% and 7.9% of total revenues, respectively. Acquisition, cyber incident, and other, net .
For the years ended December 31, 2024 and 2023, selling, general, and administrative expenses were 9.6% and 8.5% of total revenues, respectively. 66 Table of C ontents Acquisition, cyber incident, and other, net .
Constant Currency Metrics As discussed above under “Key Factors Affecting Our Business and Financial Results —Foreign Currency Translation Impact on Our Operations ,” 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.
Constant Currency Metrics 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.
Security Interests in Customers’ Products By operation of law and in accordance with our customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K. Security Interests in Customers’ Products By operation of law and in accordance with our customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments.
Sales may also be made on a forward basis pursuant to separate forward sale agreements. During the year ended December 31, 2023, we sold 13,244,905 common shares sold under the 2023 ATM Equity Program for net proceeds of $412.6 million .
Sales could also be made on a forward basis pursuant to separate forward sale agreements. 76 Table of C ontents In August 2023, we sold 13,244,905 common shares under the Prior ATM Equity Program for net proceeds of $412.6 million.
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. 61 Impairment of indefinite and long-lived assets represents the impairment of goodwill and other long lived assets whose values are considered unrecoverable.
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, pension plan termination charges, and cyber incident related costs, net of insurance recoveries all of which are not representative of our normal course of operations.
The net proceeds from sales of our common stock pursuant to the March 2023 ATM Equity Program were used to repay a portion on the revolver borrowings . 78 On November 9, 2023, we entered into an equity distribution agreement that was substantially identical to and replaced the March 2023 equity distribution agreement, and pursuant to which we may sell, from time to time, up to an additional $900.0 million of our common shares through our ATM Equity Program.
On November 9, 2023, we entered into an equity distribution agreement that was substantially identical to and replaced the prior equity distribution agreement, pursuant to which we may sell, from time to time, up to an additional $900.0 million of our common shares through our ATM Equity Program (the “Current ATM Equity Program”).
For purposes of comparability using this same approach, the following adjusted historical results recasted are as follows: Recasted Year Ended December 31, (in thousands) 2023 2022 2021 NAREIT EBITDAre $160,616 $419,791 $390,026 76 Net Debt to Core EBITDA Computation (In thousands) As of December 31, 2023 2022 (In thousands) Borrowings under revolving line of credit $ 392,156 $ 500,052 Senior unsecured notes and term loan – net of deferred financing costs of $10,578 and $13,044 in the aggregate, at December 31, 2023 and 2022, respectively 2,601,122 2,569,281 Sale-leaseback financing obligations 161,937 171,089 Financing lease obligations 97,177 77,561 Total debt 3,252,392 3,317,983 Deferred financing costs 10,578 13,044 Gross debt 3,262,970 3,331,027 Adjustments: Less: cash, cash equivalents and restricted cash 60,392 53,063 Net debt $ 3,202,578 $ 3,277,964 Core EBITDA $ 572,080 $ 499,766 Adjustments (1) 2,069 (3,588) Pro-forma Core EBITDA $ 574,149 $ 496,178 Net debt to pro-forma Core EBITDA (2) 5.6 x 6.6 x (1) As of December 31, 2023, amount includes nine months of Core EBITDA from the Safeway acquisition prior to Americold’s ownership as well as the facility lease expense for sites that the Company previously incurred operating lease expense for but was subsequently purchased.
For purposes of comparability using this same approach, the following adjusted historical results recasted are as follows: Recasted Years Ended December 31, (In thousands) 2023 2022 NAREIT EBITDAre $160,616 $419,791 74 Table of C ontents Net Debt to Core EBITDA Computation (In thousands) As of December 31, 2024 2023 Borrowings under revolving line of credit $ 255,052 $ 392,156 Senior unsecured notes and term loan – net of deferred financing costs of $13,882 and $10,578 in the aggregate, at December 31, 2024 and 2023, respectively 3,031,462 2,601,122 Sale-leaseback financing obligations 79,001 161,937 Financing lease obligations 95,784 97,177 Total debt 3,461,299 3,252,392 Deferred financing costs 13,882 10,578 Gross debt 3,475,181 3,262,970 Adjustments: Less: cash, cash equivalents and restricted cash 47,652 60,392 Net debt $ 3,427,529 $ 3,202,578 Core EBITDA $ 634,141 $ 572,080 Adjustments (1) — 2,069 Pro-forma Core EBITDA $ 634,141 $ 574,149 Net debt to pro-forma Core EBITDA (2) 5.4 x 5.6 x (1) As of December 31, 2023, amount includes nine months of Core EBITDA from the Safeway acquisition prior to Americold’s ownership as well as the facility lease expense for sites that the Company previously incurred operating lease expense for but was subsequently purchased.
For more information on our significant critical accounting policies and estimates, see N ote 2 - Summary of Significant Accounting policies to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
For discussion of all of our significant accounting policies, see Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
On a constant currency basis, warehouse segment NOI contribution increased $92.3 million, or 14.5% during the year ended December 31, 2023, as compared to the same period of the prior year.
On a constant currency basis, warehouse segment NOI contribution increased $90.0 million, or 12.5%, during the year ended December 31, 2024, compared to the same period in the prior year.
(2) Net debt to Core EBITDA represents (i) our gross debt (defined as total debt plus discount and deferred financing costs) less cash and cash equivalents divided by (ii) Core EBITDA.
(2) Net debt to pro-forma Core EBITDA represents (i) our gross debt (defined as total debt plus discount and deferred financing costs) less cash, cash equivalents and restricted cash divided by (ii) pro-forma and/or Core EBITDA. If applicable, we calculate pro-forma Core EBITDA as Core EBITDA further adjusted for acquisitions.
We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred financing costs and pension withdrawal liability, non-real estate asset impairment, amortization of above or below market leases, straight-line net rent, benefit from deferred income taxes, stock-based compensation expense from grants under our equity incentive plans, excluding IPO grants, non-real estate depreciation and amortization, non-real estate depreciation and amortization from foreign joint ventures, and maintenance capital expenditures.
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, Non-real estate asset impairment, Straight-line rent adjustment, Deferred income tax benefit, Stock-based compensation expense, Non-real estate depreciation and amortization, Maintenance capital expenditures, and Our share of reconciling items related to partially owned entities.
Key Factors Affecting Our Business and Financial Results Cybersecurity Incident On April 26, 2023, the Company became aware of a cybersecurity incident impacting a certain number of our systems and partially impacting operations for a limited period of time (the “Cyber incident”).
These initiatives have allowed us to reduce our consumption of kilowatt hours and energy spend. 52 Table of C ontents Key Factors Affecting Our Business and Financial Results Cybersecurity Incident On April 26, 2023, the Company became aware of a cybersecurity incident impacting a certain number of our systems and partially impacting operations for a limited period of time (the “Cyber Incident”).
During the year ended December 31, 2023, we also incurred capitalized interest of $13.2 million and capitalized compensation and travel expense aggregating to $17.5 million related to our ongoing expansion and development projects.
During the year ended December 31, 2023, we capitalized interest of $13.2 million and compensation and travel expenses of $17.5 million related to our ongoing expansion and development projects, which is included in the summarized expansion and development expenditures listed above.
Year ended December 31, 2023 2022 Acquisitions, net of cash acquired and adjustments $ 46,653 $ 15,829 Asset acquisitions 65,771 14,581 Expansion and development initiatives 126,160 190,718 Information technology 10,208 6,910 Growth and expansion capital expenditures $ 248,792 $ 228,038 82 Historical Cash Flows The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
The following table sets forth our acquisition, expansion and development capital expenditures for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (In thousands) Business combinations $ — $ 46,653 Asset acquisitions — 65,771 Expansion and development initiatives 213,261 126,160 Information technology 15,478 10,208 Growth and expansion capital expenditures $ 228,739 $ 248,792 Historical Cash Flows The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
During the year ended December 31, 2023 the Company incurred charges related to the termination of the Americold Retirement Income Plan (“ARIP”) resulting in the recognition of a $2.5 million settlement loss. Refer to Note 1-De scription of the Business of the Consolidated Financial Statements for additional information. Impairment of indefinite and long-lived assets.
Pension plan termination charges represent costs incurred during the year ended December 31, 2023 related to the termination of the Americold Retirement Income Plan. Refer to Note 1 - Description of the Business of the Consolidated Financial Statements for additional information. Impairment of indefinite and long-lived assets.
(Gain) loss on sale of real estate represents gains or losses recognized from the sale of Company owned real estate. Interest expense is associated with interest charged on unsecured revolving credit facilities, term loans, and notes.
Impairment of indefinite and long-lived assets represents the impairment of goodwill, customer relationship intangibles, and other long-lived assets whose values are considered unrecoverable. Net (gain) loss from sale of real estate represents gains or losses recognized from the sale of Company owned real estate. Interest expense is associated with interest charged on unsecured revolving credit facilities, term loans, and notes.
Maintenance capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building or costs which are incurred to bring a building up to Americold’s operating standards. The following table sets forth our recurring maintenance capital expenditures for the years ended December 31, 2023 and 2022.
Maintenance capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building or costs which are incurred to bring a building up to Americold’s operating standards.
GAAP. 75 Reconciliation of Net Income to NAREIT EBITDAre and Core EBITDA (In thousands) Year Ended December 31, 2023 2022 2021 Net loss $ (336,269) $ (19,474) $ (30,309) Adjustments: Depreciation and amortization 353,743 331,446 319,840 Interest expense 140,107 116,127 99,177 Income tax benefit (2,273) (18,836) (1,569) (Gain) loss on sale of real estate (2,254) 5,689 — Adjustment to reflect share of EBITDAre of partially owned entities 8,996 17,815 8,966 NAREIT EBITDAre (a) $ 162,050 $ 432,767 $ 396,105 Adjustments: Acquisition, cyber incident, and other, net 64,087 32,511 51,578 Loss from investments in partially owned entities 3,823 9,300 2,004 Impairment of indefinite and long-lived assets 236,515 7,380 3,312 Foreign currency exchange loss 431 975 610 Stock-based compensation expense 23,592 27,137 23,900 Loss on debt extinguishment, modifications and terminations of derivatives instruments 2,482 3,217 5,689 Loss on other asset disposals 3,960 3,556 279 Gain on extinguishment of New Market Tax Credit Structure — (3,410) — Loss on deconsolidation of Chile Joint Venture — 4,148 — Reduction in EBITDAre from partially owned entities (8,996) (17,815) (8,966) Earnings from discontinued operations, net of tax 8,072 — — Impairment of related party receivable 21,972 — — Loss on put option 56,576 — — Gain on sale of LATAM JV (304) — — Gain on legal settlement related to prior period operations (2,180) — — Core EBITDA $ 572,080 $ 499,766 $ 474,511 (a) During the year ended December 31, 2023, management included certain losses from discontinued operations in NAREIT EBITDAre.
GAAP. 73 Table of C ontents Reconciliation of Net Loss to NAREIT EBITDAre and Core EBITDA (In thousands) Years Ended December 31, 2024 2023 2022 Net loss $ (94,749) $ (336,269) $ (19,474) Adjustments: Depreciation and amortization 360,817 353,743 331,446 Interest expense 135,323 140,107 116,127 Income tax benefit (8,428) (2,273) (18,836) Net (gain) loss from sale of real estate (3,514) (2,254) 5,689 Adjustment to reflect share of EBITDAre of partially owned entities 5,909 8,996 17,815 NAREIT EBITDAre (2) $ 395,358 $ 162,050 $ 432,767 Adjustments: Acquisition, cyber incident, and other, net 77,169 64,087 32,511 Loss from investments in partially owned entities 3,702 3,823 9,300 Impairment of indefinite and long-lived assets 33,126 236,515 7,380 Foreign currency exchange (gain) loss (8,833) 431 975 Stock-based compensation expense (1) 25,274 23,592 27,137 Loss on debt extinguishment, modifications and termination of derivative instruments 116,082 2,482 3,217 Loss on other asset disposals 94 3,960 3,556 Gain on extinguishment of New Market Tax Credit Structure — — (3,410) Loss on deconsolidation of Chile Joint JV — — 4,148 Gain on legal settlement related to prior period operations (6,104) (2,180) — Project Orion deferred costs amortization 4,182 — — Reduction in EBITDAre from partially owned entities (5,909) (8,996) (17,815) Gain on sale of LATAM JV — (304) — Loss from discontinued operations, net of tax — 8,072 — Impairment of related party loan receivable — 21,972 — Loss on put option — 56,576 — Core EBITDA $ 634,141 $ 572,080 $ 499,766 (1) Stock-based compensation expense excludes the stock compensation expense associated with employee awards granted in conjunction with Project Orion, which are recognized within Acquisition, cyber incident, and other, net.
On March 17, 2023, we entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $900.0 million of our common shares through an ATM Equity Program (the “2023 ATM Equity Program”).Sales of our common stock made pursuant to the 2023 ATM Equity Program may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us.
Sales of our common stock made pursuant to the Prior ATM Equity Program could be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and the Company.
For further information regarding Project Orion, refer to Item 1 - Business included herein on Form 10-K. Other cost reduction initiatives To reduce facility costs we have invested in energy efficiency projects, including LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives, third party efficiency reviews, real-time energy consumption monitoring, rapid open and close doors, and alternative-power generation technologies.
Other costs reduction initiatives 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.
Examples of repair and maintenance expenses related to personal property include ordinary repair and maintenance expenses on material handling equipment ( e.g. , fork lifts and pallet jacks) and related batteries. The following table sets forth our repair and maintenance expenses for the years ended December 31, 2023 and 2022.
Examples of repair and maintenance expenses related to personal property include ordinary repair and maintenance expenses on material handling equipment (e.g., fork lifts and pallet jacks) and related batteries.
Same store financial metrics are not a measurement of financial performance under U.S. GAAP. In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same store or calculate same store financial metrics in a manner consistent with our definitions and calculations.
In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same store or calculate same store financial metrics in a manner consistent with our definitions and calculations. Same store financial measures should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP.
We calculate core funds from operations, or Core FFO, as NAREIT FFO adjusted for the effects of gain or loss on the sale of non-real estate assets; Acquisition, cyber incident and other, net; goodwill impairment (when applicable); stock-based compensation expense for the IPO grants; loss on debt extinguishment; modifications and termination of derivative instruments; foreign currency exchange losses; gain or loss from discontinued operations; impairment of related party loan receivable; loss on put option; gain on extinguishment of New Market Tax Credit structure; loss on deconsolidation of subsidiary contributed to LATAM joint venture; gain on legal settlements related to prior period operations; and gain from sale of LATAM joint venture.
We calculate core funds from operations, or Core FFO, as NAREIT FFO adjusted for the effects of Net (gain) loss on sale of non-real estate assets, Acquisition, cyber incident, and other, net, Impairment of indefinite and long-lived assets (excluding certain real estate assets), Loss on debt extinguishment, modifications and termination of derivative instruments, Foreign currency exchange (gain) loss, Gain on legal settlement related to prior period operations, Gain on extinguishment of New Market Tax Credit Structure, Loss on deconsolidation of Chile Joint JV, Project Orion deferred costs amortization, Our share of reconciling items related to partially owned entities, Loss from discontinued operations, net of tax, Impairment of related party loan receivable, Loss on put option, and Gain on sale of LATAM JV.
Other Expense and Income The following table presents other items of income and expense for the years ended December 31, 2023 and 2022 .
The following table presents items included in other, net for the years ended December 31, 2024 and 2023.
Additionally, our southern hemisphere operations in Australia, New Zealand and South America complement the growing and harvesting cycles in North America and Europe, further balancing seasonality’s impact on our operations.
Additionally, our southern hemisphere operations in Australia, New Zealand and South America complement the growing and harvesting cycles in North America and Europe, further balancing seasonality’s impact on our operations. Foreign Currency Translation Impact on Our Operations Our consolidated revenues and expenses are impacted by foreign currency fluctuations, which can significantly affect our results.
Our bad debt expense was $6.4 million, (of which $1.5 million was recorded within Acquisition, cyber incident, and other, net and the remainder within Rent, storage, and warehouse services cost of operations within the Consolidated Statements of Operations) and $5.9 million for the years ended December 31, 2023 and 2022, respectively.
Our bad debt expense was $7.6 million and $6.4 million primarily recognized within Rent, storage, and warehouse services cost of operations in the Consolidated Statements of Operations for the years ended December 31, 2024 and 2023, respectively.
Loss on debt extinguishment, modifications and termination of derivative instruments is representative of charges associated with prior debt extinguishments and modifications as well as the termination of derivative instruments. Loss from investments in partially owned entities represents the Company’s share of earnings and/or losses related to its equity method investments in various joint ventures.
Loss on debt extinguishment, modifications and termination of derivative instruments is representative of charges associated with prior debt extinguishments and modifications as well as the termination of derivative instruments. 59 Table of C ontents Loss from investments in partially owned entities is representative of our share of gains and losses associated with our minority ownership interests in joint ventures.
This growth was driven by $94.2 million of growth in our same store pool on a constant currency basis, and $15.2 million of growth in our non- same store pool, further discussed below.
This growth was driven by an increase 61 Table of C ontents of $55.8 million in our same store pool, and an increase of $2.9 million in our non-same store pool, both on a constant currency basis, due to factors further discussed below.
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.
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.
GAAP. 73 Reconciliation of Net Income to NAREIT FFO, Core FFO, and Adjusted FFO (in thousands) Year Ended December 31, 2023 2022 2021 Net loss $ (336,269) $ (19,474) $ (30,309) Adjustments: Real estate related depreciation 222,837 210,171 200,184 Net (gain) loss on sale of real estate (2,254) 5,689 — Net loss on asset disposals 235 1,135 12 Impairment charges on certain real estate assets — 3,407 1,752 Our share of reconciling items related to partially owned entities 1,705 4,410 2,412 NAREIT FFO (b) $ (113,746) $ 205,338 $ 174,051 Adjustments: Net loss on sale of non-real estate assets 3,725 2,421 267 Acquisition, cyber incident, and other, net 64,087 32,511 51,578 Goodwill impairment 236,515 3,209 — Stock-based compensation expense, IPO grants — — 163 Loss on debt extinguishment, modifications, and termination of derivative instruments 2,482 3,217 5,689 Foreign currency exchange loss 431 975 610 Gain on legal settlement related to prior period operations (2,180) — — Gain on extinguishment of New Market Tax Credit Structure — (3,410) — Loss on deconsolidation of Chile Joint Venture — 4,148 — Our share of reconciling items related to partially owned entities 64 574 439 Loss from discontinued operations, net of tax 8,072 — — Impairment of related party receivable 21,972 — — Loss on put option 56,576 — — Gain on sale of LATAM JV (304) — — Core FFO applicable to common stockholders (b) 277,694 248,983 232,797 Adjustments: Amortization of deferred financing costs and pension withdrawal liability 5,095 4,833 4,425 Amortization of below/above market leases 1,506 2,131 2,261 Non-real estate asset impairment — 764 1,560 Straight-line rental revenue adjustment 1,011 747 (216) Deferred income taxes benefit (10,781) (22,561) (9,147) Stock-based compensation 23,592 27,137 23,737 Non-real estate depreciation and amortization 130,906 121,275 119,656 Maintenance capital expenditures (a) (78,411) (85,511) (75,965) Our share of reconciling items related to partially owned entities 1,013 2,482 387 Adjusted FFO applicable to common stockholders (b) $ 351,625 $ 300,280 $ 299,495 (a) Maintenance capital expenditures include capital expenditures made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology.
GAAP. 71 Table of C ontents Reconciliation of Net Loss to NAREIT FFO, Core FFO, and Adjusted FFO (In thousands) Years Ended December 31, 2024 2023 2022 Net loss $ (94,749) $ (336,269) $ (19,474) Adjustments: Real estate related depreciation 225,388 222,837 210,171 Net (gain) loss from sale of real estate (3,514) (2,254) 5,689 Net loss on real estate related asset disposals 330 235 1,135 Impairment charges on certain real estate assets 20,985 — 3,407 Our share of reconciling items related to partially owned entities 1,144 1,705 4,410 NAREIT FFO (3) $ 149,584 $ (113,746) $ 205,338 Adjustments: Net (gain) loss on sale of non-real estate assets (236) 3,725 2,421 Acquisition, cyber incident, and other, net 77,169 64,087 32,511 Impairment of indefinite and long-lived assets (excluding certain real estate assets) 12,141 236,515 3,209 Loss on debt extinguishment, modifications and termination of derivative instruments 116,082 2,482 3,217 Foreign currency exchange (gain) loss (8,833) 431 975 Gain on legal settlement related to prior period operations (6,104) (2,180) — Gain on extinguishment of New Market Tax Credit Structure — — (3,410) Loss on deconsolidation of Chile Joint JV — — 4,148 Project Orion deferred costs amortization 4,182 — — Our share of reconciling items related to partially owned entities 805 64 574 Loss from discontinued operations, net of tax — 8,072 — Impairment of related party loan receivable — 21,972 — Loss on put option — 56,576 — Gain on sale of LATAM JV — (304) — Core FFO applicable to common stockholders (3) 344,790 277,694 248,983 Adjustments: Amortization of deferred financing costs and pension withdrawal liability 5,329 5,095 4,833 Amortization of below/above market leases 1,445 1,506 2,131 Non-real estate asset impairment — — 764 Straight-line rent adjustment 1,612 1,011 747 Deferred income tax benefit (13,210) (10,781) (22,561) Stock-based compensation expense (1) 25,274 23,592 27,137 Non-real estate depreciation and amortization 135,429 130,906 121,275 Maintenance capital expenditures (2) (80,951) (78,411) (85,511) Our share of reconciling items related to partially owned entities 671 1,013 2,482 Adjusted FFO applicable to common stockholders (3) $ 420,389 $ 351,625 $ 300,280 (1) Stock-based compensation expense excludes the stock compensation expense associated with employee awards granted in conjunction with Project Orion, which are recognized within Acquisition, cyber incident, and other, net.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
13 edited+6 added−10 removed7 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
13 edited+6 added−10 removed7 unchanged
2023 filing
2024 filing
Biggest changeAt December 31, 2023, one-month term and daily SOFR was approximately 5.31%, one-month CDOR was approximately 5.44%, one-month SONIA was at 5.19%, and one-month AUD BBSW was approximately 4.36%, one-month EURIBOR was approximately 3.84% and one-month BKBM was approximately 5.63%, therefore a 100 basis point increase in market interest rates would result in an increase in interest expense to service our variable-rate debt of approximately $3.9 million.
Biggest changeA 100 basis point increase in market interest rates would result in an increase in annual interest expense to service our variable-rate debt of approximately $2.6 million, and a 100 basis point decrease in market interest rates would result in a $2.6 million decrease in annual interest expense.
A portion of this Revolver liability may be undesignated if the equity is insufficient to hedge the outstanding debt. The remeasurement on these borrowings will be recorded to Accumulated other comprehensive loss.
A portion of this Revolver liability may be undesignated if the equity is insufficient to hedge the outstanding debt. The remeasurement on these borrowings is recorded to Accumulated other comprehensive loss.
We have entered into interest rate swaps to effectively lock in the floating rates on all of our USD-denominated term loan at a weighted average rate of 4.39% and all of our outstanding CAD-denominated term loan at a weighted average rate of 4.53%.
We have entered into interest rate swaps to effectively lock in the floating rates on all of our USD-denominated term loans at a weighted average rate of 4.20% and all of our outstanding CAD-denominated term loan at a rate of 4.53%.
Additionally, the operating income of the Argentina subsidiary was less than 1.0% of our consolidated operating income for the years ended December 31, 2023 and 2022. 87 For the years ended December 31, 2023 and 2022, revenues from our international operations were $597.2 million and $654.3 million, respectively, which represented 22.3% and 22.4% of our consolidated revenues, respectively.
Additionally, the operating income of the Argentina subsidiary was 2.0% and 1.0% of our consolidated operating income for the years ended December 31, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023, revenues from our international operations were $591.4 million and $597.2 million, respectively, which represented 22.2% and 22.3% of our consolidated revenues, respectively.
We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates.
Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates.
As of December 31, 2023, we had $645.0 million of outstanding USD-denominated variable-rate debt and C$250.0 million of outstanding CAD-denominated variable-rate debt under our Senior Unsecured Term Loan A Facility bearing interest at one-month SOFR for the USD tranche and one-month CDOR for the CAD tranche, plus a margin of up to 0.94%.
As of December 31, 2024, we had $645.0 million of outstanding USD-denominated variable-rate debt and C$250.0 million of outstanding CAD-denominated variable-rate debt under the Senior Unsecured Term Loan Facility. This consisted of our Senior Unsecured Term Loan A Facility bearing interest at one-month Adjusted Term SOFR for the USD tranches and adjusted daily CORRA for the CAD tranche.
A 10% depreciation in the year-end functional currencies of our international operations, relative to the U.S. dollar, would have resulted in a reduction in our total equity of approximately $137.9 million as of December 31, 2023. Our operations in Argentina are reported using highly inflationary accounting.
A 10% depreciation in the year-end functional currencies of our international operations, relative to the U.S. dollar, would have resulted in a reduction in our total equity of approximately $35.3 million as of December 31, 2024.
During 2022 and 2023, we have funded various international capital requirements including the De Bruyn acquisition, the Ormeau acquisition, the settlement of the Bowman acquisition deferred consideration and expansion and development projects with borrowings from our Senior Unsecured Revolving Credit Facility. The foreign-denominated borrowings under our Senior Unsecured Revolving Credit Facility was designated as a net investment hedge.
During the years ended December 31, 2024, 2023 and 2022, we funded various international capital requirements, including acquisitions, and various expansion and development projects with borrowings from our Senior Unsecured Revolving Credit Facility. Certain foreign-denominated borrowings under our Senior Unsecured Revolving Credit Facility were designated as a net investment hedge.
Since the critical terms of the derivatives match the critical terms of the intercompany loans, the hedge is considered perfectly effective. All changes in fair value will be recorded to Accumulated other comprehensive loss. On December 30, 2020, we closed on the Agro acquisition, which conducts a significant amount of its operations in Europe.
Since the critical terms of the derivatives match the critical terms of the intercompany loans, the hedge is considered perfectly effective. All changes in fair value will be recorded to Accumulated other comprehensive loss.
A 100 basis point decrease in market interest rates would result in a decrease in interest of approximately $3.9 million. Foreign Currency Risk Our international revenues and expenses are generated in the currencies of the countries in which we operate, including Australia, New Zealand, Argentina, Canada and several European countries.
Foreign Currency Risk Our international revenues and expenses are generated in the currencies of the countries in which we operate, including Australia, New Zealand, Argentina, Canada and several European countries. We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments.
As of December 31, 2023, the net monetary assets of the Argentina subsidiary were immaterial and, therefore, a 10% unfavorable change in the exchange rate would not be material.
The entity’s statements of operations and balance sheets have been measured in Australian dollars using both current and historical exchange rates prior to translation into U.S. dollars in consolidation. As of December 31, 2024, the net monetary assets of the Argentina subsidiary were immaterial and, therefore, a 10% unfavorable change in the exchange rate would not be material.
For the years ended December 31, 2023 and 2022, net assets in international operations were approximately $1.1 billion and $1.3 billion, respectively.
Net assets in international operations were approximately $352.8 million and $443.2 million as of December 31, 2024 and 2023 ($1.1 billion as of December 31, 2023 excluding net intercompany liabilities), respectively.
The Argentina subsidiary’s functional currency is the Australian dollar, which is the reporting and functional currency of their immediate parent company. The entity’s statements of operations and balance sheets have been measured in Australian dollars using both current and historical exchange rates prior to translation into U.S. dollars in consolidation.
Refer to Note 10 - Derivative Financial Instruments for further details. Our operations in Argentina are reported using highly inflationary accounting. The Argentina subsidiary’s functional currency is the Australian dollar, which is the reporting and functional currency of their immediate parent company.
Removed
As a result, the only borrowings that we have exposure to changes in interest rates as of December 31, 2023 consist of our borrowings under our Revolving Credit Facility including: $34.0 million, C$35.0 million, €67.5 million, £78.0 million, A$191.0 million and NZD44.0 million.
Added
These rates are also subject to contractual margins up to 0.94% and index adjustments of 0.10% on SOFR and 0.30% on CORRA.
Removed
In tandem with this acquisition, we closed on the Series D and E Senior Unsecured Notes in aggregate of €750 million. The debt was designated as a net investment hedge for the Agro operations, as the equity in the European entities is greater than the principal of the debt.
Added
Additionally, as of December 31, 2024, we had $14.0 million , C$35.0 million, €70.5 million, A$197.0 million, and NZ$39.0 million outstanding of Senior Unsecured Revolving Credit Facility draws.
Removed
Quarterly, effectiveness will be measured according to the amount of principal compared to the equity of the European entities. A portion of the Series D and E Senior Unsecured Notes may be undesignated if the equity is insufficient to hedge the principal from the Series D and E Senior Unsecured Notes issuance.
Added
At December 31, 2024, adjusted daily SOFR was approximately 4.41%, adjusted daily CORRA was approximately 3.61%, one-month AUD BBSW was approximately 4.37%, one-month EURIBOR was approximately 2.86%, and one-month BKBM was approximately 4.42%. T hese rates are also subject to contractual margins of 0.84% and an index of adjustment of 0.10% on SOFR and 0.30% on CORRA.
Removed
The remeasurement on the Series D and E Senior Unsecured Notes will be recorded to Accumulated other comprehensive loss. Additionally, we entered into a foreign currency forward to exchange the €750 million proceeds for $877.4 million USD. On the date of issuance, the €750 million issuance was equivalent to $922.4 million USD, based on the spot rate.
Added
The interest rate paid on borrowings can never drop below 0.0%, although the associated benchmark rate does.
Removed
The difference between the proceeds from the foreign currency forward and the market equivalent on the date of debt issuance of $45 million was recorded to Foreign currency exchange loss, net, a component of other (expense) income of our Consolidated Statements of Operations during the year ended December 31, 2020, and included in this Annual Report on Form 10-K.
Added
However, to manage this risk, as of December 31, 2024, the Company designated A$197.0 million and €820.5 million of debt and accrued interest as a hedge of its net investments in certain international subsidiaries.
Removed
As a result of the Agro acquisition, multiple intercompany loans were generated, denominated in various foreign currencies. These intercompany loans have been designated as long-term, permanent investments, whereby the periodic remeasurement will be recorded through Accumulated other comprehensive loss on the Consolidated Balance Sheet. On May 28, 2021, we closed on the Bowman acquisition.
Added
Additionally, the Company periodically enters into cross-currency swap agreements, which effectively mitigate the Company’s exposure to fluctuations in cash flows due to changes in foreign exchange rates. As of December 31, 2024, the Company’s outstanding intercompany loan balance of A$153.5 million was 87 Table of C ontents hedged under a cross-currency swap agreement.
Removed
In order to fund the acquisition, we drew £68.5 million from our Senior Unsecured Revolving Credit Facility. The debt was designated as a net investment hedge for the Bowman operations, as the equity residing in this entity is greater than the debt.
Removed
A portion of this Revolver liability may be undesignated if the equity is insufficient to hedge the outstanding debt. The remeasurement on the GBP Revolver draws will be recorded to Accumulated other comprehensive loss. On November 15, 2021, we closed on the Lago acquisition.
Removed
In order to fund the acquisition, we drew $80 million AUD from our Senior Unsecured Revolving Credit Facility. The debt was designated as a net investment hedge for the Lago operations, as the equity residing in this entity is greater than the debt.
Removed
A portion of this Revolver 88 liability may be undesignated if the equity is insufficient to hedge the outstanding debt. The remeasurement on the AUD Revolver draws will be recorded to Accumulated other comprehensive loss.