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What changed in AMERICOLD REALTY TRUST's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AMERICOLD REALTY TRUST's 2022 and 2023 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 2023 report.

+490 added−598 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-27)

Top changes in AMERICOLD REALTY TRUST's 2023 10-K

490 paragraphs added · 598 removed · 357 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+27 added−24 removed67 unchanged
Biggest changeEach of these 25 largest customers has been in our network for the entirety of these periods. 7 The 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, 2022: 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 4.7% 7 NR | NR ü ü ü ü ü ü Producer 4.6% 34 BBB- | Baa3 ü ü ü ü ü Retailer 3.5% 10 BBB | Baa2 ü ü ü ü ü Producer 3.2% 60 BBB+ | Baa2 ü ü ü ü ü ü Producer 2.7% 23 NR | NR ü ü ü ü ü ü Producer 2.7% 23 BBB- | NR ü ü ü ü ü Retailer 2.6% 19 AA | Aa2 ü ü ü ü ü ü Producer 2.0% 22 BB+ | Ba2 ü ü ü ü ü Retailer 1.9% 4 BBB+ | Baa1 ü ü ü ü Producer 1.7% 25 A+ | A1 ü ü ü ü ü ü Producer 1.6% 18 NR | NR ü ü ü ü ü Producer 1.5% 13 A+ | A1 ü ü ü ü ü ü Retailer 1.5% 5 BBB+ | Baa1 ü ü ü ü ü Producer 1.4% 5 NR | NR ü ü ü ü Producer 1.4% 47 A | A2 ü ü ü ü ü ü Producer 1.3% 25 A | A1 ü ü ü ü ü ü Producer 1.3% 12 BBB | Baa2 ü ü ü ü ü ü Producer 1.3% 25 BBB- | Baa3 ü ü ü Producer 1.2% 27 BBB- | Baa3 ü ü ü ü ü Producer 1.0% 21 NR | NR ü ü ü ü ü ü Producer 1.0% 18 NR | NR ü ü ü ü ü Producer 1.0% 26 NR | NR ü ü ü ü ü Producer 0.8% 21 NR | NR ü ü ü ü ü Producer 0.8% 7 B | NR ü ü ü ü Producer 0.8% 13 NR | NR ü ü Total 47.5% (1) Based on warehouse revenues for the twelve months ended December 31, 2022.
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.
To foster a stronger sense of ownership, aid in retention and to align the interests of our associates with our stockholders, we provide restricted stock units to eligible associates through our equity incentive programs.
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.
Occupational Safety and Health Act, or OSHA 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, 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.
The strategies we intend to execute to achieve these objectives include the 4 following: Enhancing Our Operating and Financial Results Through Proactive Asset Management We seek to enhance our operating and financial results by supporting our customers’ growth initiatives in the cold chain, optimizing both physical and economic occupancy, underwriting and deploying yield management initiatives and executing operational optimization and cost containment strategies.
The strategies we intend to execute to achieve these objectives include the following: Enhancing Our Operating and Financial Results Through Proactive Asset Management We seek to enhance our operating and financial results by supporting our customers’ growth initiatives in the cold chain, optimizing both physical and economic occupancy, underwriting and deploying yield management initiatives and executing operational optimization and cost containment strategies.
We believe our ability to design, build and operate warehouses across the cold chain makes us an attractive storage solution for existing retailers and the 5 growing e-tailer segment and positions us well to generate new relationships, drive growth and capture market share by increasing our presence in the e-commerce channel.
We believe our ability to design, build and operate warehouses across the cold chain makes us an attractive storage solution for existing retailers and the growing e-tailer segment and positions us well to generate new relationships, drive growth and capture market share by increasing our presence in the e-commerce channel.
Generally, our other competitors operate in only one region and do not compete in the retail market that comprises the majority of our revenues. Our main competitors in New Zealand are Lineage Logistics, LLC and Halls Transport (not affiliated with the Halls acquisition we completed during 2020). Lineage Logistics, is the largest public warehouse operator in New Zealand.
Generally, our other competitors operate in only one region and do not compete in the retail market that comprises the majority of our revenues. Our main competitors in New Zealand are Lineage Logistics, LLC and Halls Transport (not affiliated with the Halls acquisition we completed during 2020). Lineage Logistics, is the largest warehouse operator in New Zealand.
The Food Safety Modernization Act, or FSMA significantly expanded the FDA’s authority over food safety, providing the FDA with new tools to proactively ensure the safety of the entire food system, including new 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, 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 cost of complying with OSHA and similar laws enacted by states and other jurisdictions in which we operate can be substantial, and any failure to comply with 14 these regulations could expose us to substantial penalties and potentially to liabilities to associates who may be injured at our warehouses.
The cost of complying with OSHA and similar laws enacted by states and other jurisdictions in which we operate can be substantial, and any failure to comply with these regulations could expose us to substantial penalties and potentially to liabilities to associates who may be injured at our warehouses.
Capitalize on Increased Outsourcing by Leading Global Food Producers, Distributors, Retailers and E-Tailers 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 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.
We also utilize rain-water recapture to reduce our reliance on municipal water supplies and reduce run-off. We believe that our warehouses are well-maintained and in good operating condition. 6 Our Business Segments We view and manage our business through three primary business segments—warehouse, transportation and third-party managed.
We also utilize rain-water recapture to reduce our reliance on municipal water supplies and reduce run-off. We believe that our warehouses are well-maintained and in good operating condition. Our Business Segments We view and manage our business through three primary business segments—warehouse, transportation and third-party managed. Warehouse.
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.
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 will continue to evaluate our overall project for additional opportunities and benefits, which could result in the identification and implementation of additional actions associated with Project Orion and incremental costs and benefits.
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.
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 five 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 Logistics, LLC, United States Cold Storage, Inc.
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. 15
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
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. During 2022, 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 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.
Presented on an annualized basis as if we had completed all 2022 acquisitions as of the beginning of the year. (2) Represents long-term issuer ratings as published in January 2023.
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.
Recent Acquisitions and Investments in Joint Ventures Over the last several years we have acquired many businesses to enhance our global portfolio and integrated network offerings to our customers.
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.
(3) A check mark indicates that the customer had at least one fixed commitment contract or lease with us as of December 31, 2022. 8 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, 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.
Our primary business objective is to serve our customers and other stakeholders, increase stockholder value, grow our market share, enhance our operating and financial results and increase cash flows from operations. We also believe that our ability to execute on our business and growth strategies will enhance the overall value of our real estate.
Our primary business objectives are to serve our customers and other stakeholders, increase stockholder value, grow our market share, enhance our operating and financial results and increase cash flows from operations. We also believe that our ability to execute on our business and growth strategies will enhance the overall value of our real estate.
Customers Our global footprint enables us to efficiently serve approximately 4,300 customers as of December 31, 2022, 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.
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.
(an affiliate of John Swire & Sons), Interstate Warehousing, Burris Logistics, NewCold Advanced Cold Logistics and Seafrigo Logistics, in addition to numerous other local, regional and national temperature-controlled warehouse owners, operators and developers. 9 Europe Our main competitors in Europe include Constellation Cold Storage, Lineage Logistics, LLC and NewCold Advanced Logistics.
(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.
Americold achieved a higher engagement score and a higher associate response rate in 2022 as compared to 2021. 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. We continue to emphasize associate development and training.
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.
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 happier, healthier and more engaged workforce. We look at wellbeing from a holistic perspective inclusive of physical, mental, and financial wellness.
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.
As of December 31, 2022, we operated a global network of 242 temperature-controlled warehouses encompassing approximately 1.4 billion cubic feet, with 195 warehouses in North America, 27 in Europe, 18 warehouses in Asia-Pacific, and 2 warehouses in South America.
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.
Our core business is our warehouse segment, where we provide temperature-controlled warehouse storage and related handling and other warehouse services. In our warehouse segment, we collect rent and storage fees from customers to store their frozen and perishable food and other products within our real estate portfolio.
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.
The geographic distribution of our associates as of December 31, 2022 is summarized in the following table: Region Number of associates Percentage of workforce North America 11,954 77 % Europe 1,862 12 % Australia/New Zealand 1,540 10 % South America 128 1 % Total 15,484 100 % As of December 31, 2022, approximately 29% of our associates were represented by various local labor unions and associations.
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.
Our transportation 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.
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.
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.
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.
We consider our labor relations to be positive and productive. 10 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.
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.
During 2023, we expect to engage in negotiations for 20 agreements, which make up approximately 8% of our associate population. We do not anticipate any workplace disruptions during this renewal process.
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.
Ownership of our integrated cold chain network enhances our ability to efficiently reposition customers and undertake capital improvements or other modifications on their behalf without the need to obtain third-party approvals. While some of our warehouses are leased, we own a significant majority 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 75%, excluding ground leases, of our warehouses.
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. 13 Environmental Matters Our properties are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs.
Environmental Matters Our properties are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs.
We have also adopted a Human Rights Policy overseen by our Board of Directors, which outlines our commitment to the United Nations Universal Declaration of Human Rights, and a policy against modern slavery, ensuring transparency within our business.
The Company’s audit committee is routinely briefed on complaints received and has access to reports made through our Ethics Helpline. 12 We have also adopted a Human Rights Policy overseen by our Board of Directors, which outlines our commitment to the United Nations Universal Declaration of Human Rights, and a policy against modern slavery, ensuring transparency within our business.
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. We provide code of conduct training so that our associates receive regular training and reminders about our standards.
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.
The total warehouse segment revenues generated by our 25 largest customers in our warehouse segment represent 47%, 49% and 55% of our total warehouse segment revenues for the years ended December 31, 2022, 2021 and 2020, respectively. As we have acquired multiple businesses over the past three years, this percentage has declined as our portfolio has expanded.
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.
Typically, we have higher than average physical occupancy levels in October or November, which also tends to result in higher revenues. In recent years we have seen variability in physical occupancy levels as compared to the typical seasonality trends as a result of the COVID-19 pandemic.
Typically, we have higher than average physical occupancy levels in October or November, which also tends to result in higher revenues.
The activities associated with Project Orion are expected to be substantially complete within three years. We estimate the aggregate investment in Project Orion to be approximately $100 million, which includes $50 million capital investment into our Company along with another $50 million of one-time implementation and integration expenses.
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.
To drive further engagement and individual ownership of the company, we offer an Employee Stock Purchase Program (ESPP) which provides our associates an opportunity to purchase our common stock at a discounted price.
To drive further engagement and individual ownership of the Company, we offer an Employee Stock Purchase Program (“ESPP”) which provides our associates an opportunity to purchase Americold stock at a discounted price. In 2023, we began introducing a global rewards and recognition program that is anchored in our organizational values of customer service, integrity, giving back, accountability, and teamwork.
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.
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.
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”.
Copies of our annual report will be made available, free of charge, on written request.
We also partnered with Feed the Children which connected with a local relief organization in Ukraine to provide food baskets to refugees and families in need in the area. Our associates are not only making a difference in their communities, but they also have strong passion and support for each other.
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 addition, we hold minority interests in three joint ventures, one with SuperFrio, which owns or operates 38 temperature-controlled warehouses in Brazil, one with Comfrio, which owns or operates 28 temperature-controlled warehouses in Brazil, and one with the LATAM JV, which owns one temperature-controlled warehouse in Chile.
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.
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. South America We have several competitors in the Buenos Aires, Argentina market, which in the past tended to be smaller single-site operations or fragmented networks.
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.
Our associates are offered regular opportunities to participate in formal and informal personal growth and professional development programs. Associates completed over 115,000 hours of training in 2022.
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.
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.
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 partner with and support organizations around the globe that contribute to fighting hunger and supporting the growth and development of children and teens. 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.
We’re particularly proud of our associates and their efforts to give back and help those in need. We partner with and support organizations around the globe that contribute to fighting hunger and supporting the growth and development of children and teens.
Our associates began the planning phase of this initiative during 2022. We also introduced Leader Standard Work—a set of recurrent management techniques, tools, and skills—to our senior operations leaders which is intended to improve management performance and foster cross-team communication.
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.
In our transportation segment, we broker, manage or operate transportation of frozen and perishable food and other products for our customers.
Our handling services optimize our customer’s product movement through the cold chain, including placement, case-picking, blast freezing, e-commerce fulfillment, and other recurring handling services, which are considered value added services. Transportation. In our transportation segment, we broker, manage or operate transportation of frozen and perishable food and other products for our customers.
All associates around the world can contribute as well as be recipients of this charitable foundation. Associates in need are encouraged to apply for a grant from the Americold Foundation Fund to ease their financial burden. Safety and Wellbeing The safety of our associates is our number one priority.
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.
In the U.S., we offer a Health Reimbursement Account program funded solely by Americold. This program encourages annual wellbeing exams and self-health awareness, and rewards associates who participate in 12 it. Additionally, we offer a comprehensive Employee Assistance Program that assists associates with personal and/or work-related situations that may impact their job performance, health, and general sense of wellbeing.
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.
All our supervisors complete Americold’s Behavioral Based Safety (BBS) Program, which reinforces safe working behaviors by actively addressing observations, as well as providing constructive feedback to address “at risk” behaviors. The program is implemented worldwide and serves to make safety a part of an open and regular dialogue.
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.
Removed
We view and manage our business through three primary business segments: warehouse, transportation, and third-party managed.
Added
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.
Removed
In 2021, we acquired Liberty Freezers for C$56.8 million, or $44.9 million, KMT Brrr! for $71.4 million, Bowman Stores for £75.0 million, or $106.4 million, the remaining minority shareholders portion of Frigorifico, a joint venture acquired in tandem with the Agro acquisition, for 3 $11.6 million, the assets of the ColdCo Companies for $20.5 million, Newark Facility Management for $390.8 million, a recently constructed warehouse in Denver for $53.6 million and Lago Cold Stores for Australian $102.2 million, or $75.1 million.
Added
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.
Removed
On June 2, 2022, we formed a joint venture, Americold LATAM Holdings Ltd (the “LATAM JV”), with Cold Latam Limited (our “JV partner”), in an effort to help us grow our business and market presence in Latin America, excluding Brazil.
Added
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.
Removed
Our JV partner committed to invest approximately $209.0 million in exchange for 85% of the total equity interests, and we have contributed our Chilean business upon formation of the joint venture and retained the remaining 15% equity interests in the joint venture. On July 2, 2022, we acquired De Bruyn Cold Storage for Australian $23.5 million, or $16.0 million.
Added
On May 30, 2023, the Company sold its remaining 15% equity interest in the Americold LATAM Holdings Ltd joint venture (the “LATAM JV”) to Cold LATAM Limited (our “JV partner”) for total proceeds of $36.9 million. The gain associated with the sale was insignificant.
Removed
We also provide our customers with handling and other warehouse services related to the products stored in our buildings that are designed to optimize their movement through the cold chain, such as the placement of food products for storage and preservation, the retrieval of products from storage upon customer request, case-picking, blast freezing, produce grading and bagging, ripening, kitting, protein boxing, repackaging, e-commerce fulfillment, and other recurring handling services.
Added
In June of 2023, the Company purchased the remaining outstanding equity interests in Agrofundo Brazil II Fundode Investimento em Participações (the “Comfrio joint venture” or “Comfrio JV” or “Comfrio”). During August of 2023, the Company sold the assets and liabilities of Comfrio.
Removed
We refer to these handling and other services as our value-added services. We have substantially grown our warehouse segment recently through strategic acquisitions and multiple expansion and development projects. In late 2020, we entered the European market through the acquisition of Agro Merchants, and have recently expanded our presence in South America.
Added
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.
Removed
We provide these transportation services at cost plus a service fee or, in the case of our consolidation or dedicated services, we may charge a fixed fee. We supplemented our regional, national and truckload consolidation services with the transportation operations from various warehouse acquisitions. We also provide multi-modal global freight forwarding services to support our customers’ needs in certain markets.
Added
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.
Removed
We also believe that providing third-party management services allows us to offer a complete and integrated suite of services across the cold chain.
Added
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.
Removed
The greatest sources of competition in Argentina are the disproportionate number of producers (compared to the United States) that continue to in-source their temperature-controlled storage needs. During 2022, we contributed our Chile facility to a joint venture.
Added
As of December 31, 2023, we employed 14,706 people worldwide, 99% of which are full-time associates.
Removed
Through our joint ventures with Superfrio and Comfrio, we now have a relationship with the top two owners and operators of cold storage facilities in Brazil. The largest competitor in Brazil is Friozem Armazens Frigorificos Ltda. Additionally, Lineage Logistics, LLC has entered this market through a joint venture with Emergent Cold, which has locations in Brazil, Panama and Peru.
Added
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.
Removed
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. As of December 31, 2022, we employed approximately 15,484 people worldwide, 98% of which are full-time associates.
Added
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.
Removed
One of our unique leadership development programs is the Americold Leadership Academy, which builds the leadership capabilities of our global operations supervisors and managers, who have direct oversight of the frontline workforce managing our customers’ products through the supply chain. Other formal offerings include tuition reimbursement, leadership development experiences, and a diverse curriculum of online learning programs.
Added
The 12-week program takes participants on a learning journey – from leading self, to leading others, to leading Americold, with curriculum that’s rooted in the Americold values: Customer Service, Integrity, Giving Back, Accountability, and Teamwork. Other formal offerings for associates include tuition reimbursement, leadership development experiences, and a diverse curriculum of online learning programs.
Removed
Additionally, we launched an executive coaching program to enhance leadership capabilities across the organization. In 2022, our focus turned to streamlining processes and tools within our organization, through the kickoff of Project Orion. This multi-year initiative will transform our technology systems through the implementation of a global ERP, human capital management system and other back-office systems.
Added
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.
Removed
Leader Standard Work will continue to be rolled out across the organization in 2023. 11 Philanthropy Giving back to the communities where we work and live is important to Americold and to our associates. We’re particularly proud of our associates and their efforts to give back and help those in need.
Added
Throughout 2023, our focus remained on streamlining processes and tools within our organization. Our associates are heavily invested in ensuring that the design phases of our global ERP implementation results in improved efficiency and increased transparency.
Removed
In Europe, we have many associates who have family members that were directly affected by the crisis in Ukraine in 2022. To support those associates, and offer general aid, Americold donated to the Red Cross for relief efforts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

143 edited+21 added−97 removed184 unchanged
Biggest changeConsistent with the foregoing, 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; • wage increases driven by competitive pressures and applicable legislation; • labor shortages, disruptions or inefficiencies 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; • our growth may strain our management and resources; • a portion of our growth depends upon acquisitions and we may be unable to identify, complete and successfully integrate acquisitions; • we may be unable to successfully expand our operations into new markets; • we face various risks and uncertainties related to public health crises, such as the novel coronavirus and its variants (COVID-19); • 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; • we may not be reimbursed for increases in operating expenses and other real estate costs; • 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; • our current and potential international operations and properties subject us to risks different from those we face domestically and we may not be able to manage our international business effectively; • competition in our markets may increase over time as our competitors open new or expand existing warehouses; • our power costs may increase or be subject to volatility; • we depend on certain customers for a substantial amount of our warehouse segment revenues; • foreign exchange rates and other hedging activity exposes us to risks, including the risk that a counterparty will not perform and that the hedge will not yield the benefits we anticipate; • we may incur liabilities or reputational harm from quality-control issues associated with our services; • we are subject to risks related to corporate governance, social and environmental responsibility and reputation; 16 • our temperature-controlled warehouse infrastructure may become obsolete or unmarketable; • we use in-house trucking services to provide transportation services to our customers and any increased severity or frequency of accidents or other claims, changes in regulation or disruptions in service could have a material adverse effect on us; • we use third-party trucking service providers to provide transportation services to our customers and any delay or disruption in these services or damage to products during transport could have a material adverse effect on us; • we could face liability from our participation in multiemployer pension plans administered by labor unions; • we could experience power outages or breakdowns of our refrigeration equipment; • we hold leasehold interests in 59 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; • political and economic conditions could negatively impact our investment in our foreign joint ventures; • geopolitical conflicts, including the conflict between Russia and Ukraine, 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; • 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.
Additional risks related to our business and operations as a result of climate change include physical and transition risks such as: • higher energy costs as a result of extreme weather events, extreme temperatures or increased demand for limited resources; • limited availability of water and higher costs due to limited sources and droughts; • higher materials cost due limited availability and environmental impacts of extraction and processing of raw materials and production of finished goods; 37 • lost revenue or increased expense as a result of higher insurance costs, potential uninsured or under insured losses, diminished customer retention stemming from extreme weather events or resource availability constraints; • utility disruptions or outages due to demand or stress on electrical grids resulting from extreme weather events; and • reduced storage revenue due to crop damage or failure or to reduced protein production as a result of extreme weather events.
Additional risks related to our business and operations as a result of climate change include physical and transition risks such as: • higher energy costs as a result of extreme weather events, extreme temperatures or increased demand for limited resources; • limited availability of water and higher costs due to limited sources and droughts; • higher materials cost due limited availability and environmental impacts of extraction and processing of raw materials and production of finished goods; • lost revenue or increased expense as a result of higher insurance costs, potential uninsured or under insured losses, diminished customer retention stemming from extreme weather events or resource availability constraints; • utility disruptions or outages due to demand or stress on electrical grids resulting from extreme weather events; and • reduced storage revenue due to crop damage or failure or to reduced protein production as a result of extreme weather events.
If the IRS were successful in treating our Operating Partnership as an association taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT, which would have a material adverse effect on us and our stockholders.
If the IRS were successful in treating our Operating Partnership as an association taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT, which would have a material 43 adverse effect on us and our stockholders.
While we do not intend to hold properties that would be characterized as held for sale in the ordinary course of business, unless a sale or disposition qualifies under statutory safe harbors, there can be no assurance that the IRS would agree with our characterization of our properties or that we will be able to make use of available safe harbors.
While we do not intend to hold properties that would be characterized as held for sale in the ordinary course of business, unless a sale or disposition qualifies under statutory safe harbors, there can be no 42 assurance that the IRS would agree with our characterization of our properties or that we will be able to make use of available safe harbors.
In addition, we have filed with the SEC a registration statement on Form S-8 covering common stock issuable pursuant to options, restricted stock units, performance units, operating partnership profits units and other stock-based awards issued under our outstanding equity incentive plans and a registration statement on Form S-8 covering shares issuable under our 2020 Employee Stock Purchase Plan.
In addition, we have filed with the SEC a registration statement on Form S-8 covering common stock issuable pursuant to options, restricted stock units, performance units, operating partnership profits units and other stock- 39 based awards issued under our outstanding equity incentive plans and a registration statement on Form S-8 covering shares issuable under our 2020 Employee Stock Purchase Plan.
These requirements make it more difficult to change our management by removing and replacing directors and may prevent a change in control that is in the best interests of our stockholders. The REIT ownership limit rules and the related restrictions on ownership and transfer contained in our articles of incorporation have an anti-takeover effect.
These requirements make it more difficult to change our management by removing and replacing directors and may prevent a change in control that is in the best interests of our stockholders. 37 The REIT ownership limit rules and the related restrictions on ownership and transfer contained in our articles of incorporation have an anti-takeover effect.
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. Furthermore, certain portions of our operations are subject to collective bargaining agreements.
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.
In addition, 52 net losses in any of our TRSs will generally not provide any tax benefit except for being carried forward for use against future taxable income of the TRS. If our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we would fail to qualify as a REIT.
In addition, net losses in any of our TRSs will generally not provide any tax benefit except for being carried forward for use against future taxable income of the TRS. If our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we would fail to qualify as a REIT.
Moreover, a decrease in demand for certain commodities or products produced by our significant customers and stored in our temperature-controlled warehouses would lower our physical occupancy rates and use of our services, without lowering our fixed costs, which could have a material adverse effect on us.
A decrease in demand for certain commodities or products produced by our significant customers and stored in our temperature-controlled warehouses would lower our physical occupancy rates and use of our services, without lowering our fixed costs, which could have a material adverse effect on us.
As a result, the presence of significant mold or 38 other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property, to reduce indoor moisture levels, or to upgrade ventilation systems to improve indoor air quality.
As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property, to reduce indoor moisture levels, or to upgrade ventilation systems to improve indoor air quality.
If we fail to comply with these requirements at the end of any quarter, we must correct the failure within 30 days after the end of the quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering material adverse tax consequences.
If we fail to comply with these requirements at the end of 41 any quarter, we must correct the failure within 30 days after the end of the quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering material adverse tax consequences.
Although our customers store a diverse product mix in our 18 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.
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.
If we lose one or more customers, we cannot assure you that we would be able to replace those customers on attractive terms or at all. We also may be forced to invest in new construction or reposition existing warehouses at significant costs in order to remain competitive.
If we lose one or more customers, we cannot assure that we would be able to replace those customers on attractive terms or at all. We also may be forced to invest in new construction or reposition existing warehouses at significant costs in order to remain competitive.
If such reviews indicate that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value and fair value of the long-lived assets in the period the determination is made.
If such reviews indicate that impairment has occurred, we are required to record a non-cash 28 impairment charge for the difference between the carrying value and fair value of the long-lived assets in the period the determination is made.
However, we may not be able to limit our exposure entirely even with these protections in place. Power outages that last beyond our backup and alternative power arrangements and refrigeration equipment breakdowns would harm our customers and our business.
However, we may not be able to limit our exposure entirely even with these protections in place. Power outages that last beyond our backup and 27 alternative power arrangements and refrigeration equipment breakdowns would harm our customers and our business.
Risks related to climate change could have a material adverse effect on our results of operations. Climate change, including the impact of global warming, creates physical and financial risks.
Risks related to climate change could have a material adverse effect on our results of operations. 31 Climate change, including the impact of global warming, creates physical and financial risks.
These leases expire (taking into account our extension options) from March 2024 to September 2052, and have a weighted-average remaining term of 26 years. If we default on any of these leases, we may be liable for damages and could lose our leasehold interest in the applicable property, including all improvements.
These leases expire (taking into account our extension options) from March 2024 to September 2052, and have a weighted-average remaining term of 29 years. If we default on any of these leases, we may be liable for damages and could lose our leasehold interest in the applicable property, including all improvements.
Privacy and data security concerns, and data collection and transfer restrictions and related regulations may adversely affect our business . 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 25 residents or by businesses operating within their jurisdiction.
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.
The market price of our common stock could decline as a result of sales or resales of a large number of our common stock in the market, or the perception that such sales or resales could occur.
The market price of our common stock could decline as a result of sales or resales of a large number of shares of our common stock in the market, or the perception that such sales or resales could occur.
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.
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.
The failure of our information technology systems to perform as anticipated, and the failure to integrate disparate systems effectively or to collect data accurately and consolidate it 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 operation and financial condition.
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.
However, differences between the recognition of REIT taxable income and the actual receipt of cash could require us to sell assets or raise capital on a short-term or long-term basis to meet the distribution requirements of the Code. Certain types of 49 assets generate substantial mismatches between REIT taxable income and available cash.
However, differences between the recognition of REIT taxable income and the actual receipt of cash could require us to sell assets or raise capital on a short-term or long-term basis to meet the distribution requirements of the Code. Certain types of assets generate 40 substantial mismatches between REIT taxable income and available cash.
We may not be reimbursed for increases in operating expenses and other real estate costs. We may be limited in our ability to obtain reimbursement from customers under existing warehouse contracts for any increases in operating expenses such as labor, electricity charges, maintenance costs, taxes, including real estate and income taxes, or other real estate-related costs.
We may be limited in our ability to obtain reimbursement from customers under existing warehouse contracts for any increases in operating expenses such as labor, electricity charges, maintenance costs, taxes, including real estate and income taxes, or other real estate-related costs.
Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our current and anticipated results of operations, liquidity, financial condition and cash distributions to stockholders and the market price of our common shares.
Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our credit ratings, our current and anticipated results of operations, liquidity, financial condition and cash distributions to stockholders and the market price of our common shares.
Our warehouse business outside the United States exposes us to losses resulting from currency fluctuations, as the revenues associated with our international operations and properties are typically generated in the local currency of each of the countries in which the properties are located.
O ur warehouse business outside the United States exposes us to losses resulting from currency fluctuations, as the revenues associated with our international operations and properties are typically generated in the local currency of each of the countries in which the properties are located.
We are currently invested in three joint ventures and may invest in additional joint ventures in the future and face risks stemming from our partial ownership interests in such properties which could materially and adversely affect the value of any such joint venture investments.
We are currently invested in two joint ventures and may invest in additional joint ventures in the future and face risks stemming from our partial ownership interests in such properties which could materially and adversely affect the value of any such joint venture investments.
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 or at all, we could be materially and adversely affected.
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.
Also, our Operating Partnership would then be subject to U.S. federal corporate income tax, which would reduce significantly the amount of its funds available for debt service and for distribution to its partners, including us. 53
Also, our Operating Partnership would then be subject to U.S. federal corporate income tax, which would reduce significantly the amount of its funds available for debt service and for distribution to its partners, including us. 44
Environmental laws require that owners or operators of buildings containing asbestos properly manage asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is damaged, is decayed, poses a health risk or is disturbed during building renovation or demolition.
Environmental laws and regulations also require that owners or operators of buildings containing asbestos properly manage asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is damaged, is 30 decayed, poses a health risk or is disturbed during building renovation or demolition.
During the year ended December 31, 2022 and 2021, our 25 largest customers in our warehouse segment contributed approximately 47% and 49%, respectively, of our pro-forma warehouse segment revenues assuming all acquisitions occurred at the beginning of the year.
During the year ended December 31, 2023 and 2022, our 25 largest customers in our warehouse segment contributed approximately 49% and 47%, respectively, of our pro-forma warehouse segment revenues assuming all acquisitions occurred at the beginning of the year.
Any of the foregoing could have a material adverse effect on us. As of December 31, 2021, we have not had a significant power outage or breakdown of our refrigeration equipment.
Any of the foregoing could have a material adverse effect on us. As of December 31, 2023, we have not had a significant power outage or breakdown of our refrigeration equipment.
Risks Related to our Common Stock • cash available for distribution to stockholders may not be sufficient to pay distributions at expected levels; • any future debt could dilute our existing stockholders and may be senior to our common stock; • any future issuance of additional equity could dilute our existing stockholders; • common stock eligible for future sale may have adverse effects on the market price of our common stock.
Risks Related to our Common Stock • cash available for distribution to stockholders may not be sufficient to pay distributions at expected levels; • any future debt could dilute our existing stockholders and may be senior to our common stock; • common stock eligible for future sale may have adverse effects on the market price of our common stock.
Certain of our expenses, including, but not limited to, 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.
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.
We have began implementation of “Project Orion”, new ERP and back-office software systems 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.
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.
In the event that accidents occur, we may be unable to obtain desired contractual indemnities, and our insurance my prove inadequate in certain cases. The occurrence of an event not fully insured or indemnified against or the failure or inability of a customer or insurer to meet its indemnification or insurance obligations could result in substantial losses.
In the event that accidents occur, we may be unable to obtain desired contractual indemnities, and our insurance may prove 26 inadequate. The occurrence of an event not fully insured or indemnified against or the failure or inability of a customer or insurer to meet its indemnification or insurance obligations could result in substantial losses.
We have also participated in additional multiemployer pension plans in the past. 31 In the event that a withdrawal from any of the multiemployer pension plans in which we participate or have participated occurs or should any of the pension plans in which we participate or have participated fail, the documents governing the applicable plan and applicable law could require us to make an additional contribution to the applicable plan in the amount of the unfunded vested benefits allocable to our participation in the plan, and we would have to reflect that as an expense on our Consolidated Statement of Operations and as a liability on our Consolidated Balance Sheets.
In the event that a withdrawal from any of the multiemployer pension plans in which we participate or have participated occurs or should any of the pension plans in which we participate or have participated fail, the documents governing the applicable plan and applicable law could require us to make an additional contribution to the applicable plan in the amount of the unfunded vested benefits allocable to our participation in the plan, and we would have to reflect that as an expense on our Consolidated Statements of Operations and as a liability on our Consolidated Balance Sheets.
To the extent we or other employers withdraw from participation in any of these plans, we could face additional liability from our participation therein. As of December 31, 2022, we participated in a number of multiemployer pension plans under the terms of collective bargaining agreements with labor unions representing the Company’s associates.
To the extent we or other employers withdraw from participation in any of these plans, we could face additional liability from our participation therein. As of December 31, 2023, we participated in a number of multiemployer pension plans under the terms of collective bargaining agreements with labor unions representing a significant number of our associates.
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, based on historical experiences, many of them may not be pursued or completed as contemplated or at all; • the availability and timing of financing on favorable terms or at all; • the availability and timely receipt of zoning and regulatory approvals, which could result in increased costs and could require us to abandon our activities entirely with respect to the warehouse for which we are unable to obtain permits or authorizations; • 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 20 shortages), which could make completion of the 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; • 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.
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.
Our substantial outstanding indebtedness could have other material and adverse consequences, including, without limitation, the following: • our cash flows may be insufficient to meet our required principal and interest payments; • we may use a substantial portion of our cash flows to make principal and interest payments and we may be unable to obtain additional financing as needed or on favorable terms, which could, among other things, have a material adverse effect on our ability to invest in acquisition opportunities, fund capital improvements or meet operational needs; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms or in violation of certain covenants to which we may be subject; • we may default on our indebtedness by failing to make required payments or violating covenants, which would entitle holders of such indebtedness and other indebtedness with a cross-default provision to accelerate the maturity of their indebtedness and, if such indebtedness is secured, to foreclose on our properties that secure their loans; • we may be unable to effectively hedge floating rate debt with respect to our Senior Unsecured Credit Facilities or any successor facilities thereto; • we are required to maintain certain debt and coverage and other financial ratios at specified levels, thereby reducing our operating and financial flexibility; • our vulnerability to general adverse economic and industry conditions may be increased; and 42 • we may be subject to greater exposure to increases in interest rates for our variable-rate debt and to higher interest expense upon refinancing of existing debt or the issuance of future fixed rate debt.
Our substantial outstanding indebtedness could have other material and adverse consequences, including, without limitation, the following: • our cash flows may be insufficient to meet our required principal and interest payments; • we may use a substantial portion of our cash flows to make principal and interest payments and we may be unable to obtain additional financing as needed or on favorable terms, which could, among other things, have a material adverse effect on our ability to invest in acquisition opportunities, fund capital improvements or meet operational needs; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • we may default on our indebtedness by failing to make required payments or violating covenants, which would entitle holders of such indebtedness and other indebtedness with a cross-default provision to accelerate the maturity of their indebtedness and, if such indebtedness is secured, to foreclose on our properties that secure their loans; 35 • we may be unable to effectively hedge floating rate debt with respect to our Senior Unsecured Credit Facilities or any successor facilities thereto; • we are required to maintain certain debt and coverage and other financial ratios at specified levels, thereby reducing our operating and financial flexibility; and • we may be subject to greater exposure to increases in interest rates for our variable-rate debt and to higher interest expense upon refinancing of existing debt or the issuance of future fixed rate debt.
Although our articles of incorporation requires our board of directors to grant a waiver of the percentage ownership limit described above if the person seeking a waiver demonstrates that such ownership would not jeopardize our status as a REIT or violate the other conditions described above, these limitations might still delay, defer or prevent a transaction or change in control which might involve a premium price for our common stock or otherwise not be in your best interest as a stockholder or result in the transfer of shares acquired in excess of the ownership limits to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares. 46 Our rights and the rights of our stockholders to take action against our directors and officers are limited.
Although our articles of incorporation requires our board of directors to grant a waiver of the percentage ownership limit described above if the person seeking a waiver demonstrates that such ownership would not jeopardize our status as a REIT or violate the other conditions described above, these limitations might still delay, defer or prevent a transaction or change in control which might involve a premium price for our common stock or otherwise not be in your best interest as a stockholder or result in the transfer of shares acquired in excess of the ownership limits to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
Risks relating to our international operations and properties include: • changing governmental rules and policies, including changes in land use and zoning laws; • enactment of laws relating to the international ownership and leasing of real property or mortgages and laws restricting the ability to remove profits earned from activities within a particular country to a person’s or company’s country of origin; • changes in laws or policies governing foreign trade or investment and use of foreign operations or workers, and any negative sentiments towards multinational companies as a result of any such changes to laws, regulations or policies or due to trends such as political populism and economic nationalism; • variations in currency exchange rates and the imposition of currency controls; • adverse market conditions caused by terrorism, civil unrest, natural disasters, infectious disease and changes in international, national or local governmental or economic conditions; • business disruptions arising from public health crises and outbreaks of communicable diseases, including the recent coronavirus outbreak; • the willingness of U.S. or international lenders to make mortgage loans in certain countries and changes in the availability, cost and terms of secured and unsecured debt resulting from varying governmental economic policies; • the imposition of unique tax structures and changes in real estate and other tax rates and other operating expenses in particular countries, including the potential imposition of adverse or confiscatory taxes; • the potential imposition of restrictions on currency conversions or the transfer of funds; • general political and economic instability; and 27 • our limited experience and expertise in foreign countries, particularly European countries, relative to our experience and expertise in the United States.
Risks relating to our international operations and properties include: • changing governmental rules and policies, including changes in land use and zoning laws; • enactment of laws relating to the international ownership and leasing of real property and laws restricting the ability to remove profits earned from activities within a particular country to a person’s or company’s country of origin; • changes in laws or policies governing foreign trade or investment and use of foreign operations or workers, and any negative sentiments towards multinational companies as a result of any such changes to laws, or policies or due to trends such as political populism and economic nationalism; • variations in currency exchange rates and the imposition of currency controls; • adverse market conditions caused by terrorism, civil unrest, natural disasters, infectious disease and changes in political conditions; • business disruptions arising from public health crises and outbreaks of communicable diseases; • the willingness of U.S. or international lenders to make mortgage loans in certain countries and changes in the availability, cost and terms of debt resulting from varying governmental economic policies; • the imposition of unique tax structures and changes in real estate and other tax rates and other operating expenses in particular countries, including the potential imposition of adverse or confiscatory taxes; • general political and economic instability; and • our limited experience and expertise in foreign countries, particularly European countries, relative to our experience and expertise in the United States.
We could incur significant costs related to environmental conditions and liabilities. Our operations are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs.
We could incur significant costs and liabilities due to environmental problems. Our operations are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs.
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 or at all or on a timely basis and we may incur significant expenses in obtaining replacement customers and repositioning warehouses to meet their needs.
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.
Commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, TCJA temporarily reduces the effective tax rate on ordinary REIT dividends (i.e., dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us) for U.S. holders of our common stock that are individuals, estates or trusts by permitting such holders to claim a deduction in determining their taxable income equal to 20% of any such dividends they receive.
For taxable years through 2025, TCJA temporarily reduces the effective tax rate on ordinary REIT dividends (i.e., dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us) for U.S. holders of our common stock that are individuals, estates or trusts by permitting such holders to claim a deduction in determining their taxable income equal to 20% of any such dividends they receive.
We are subject to additional risks with respect to our current and potential international operations and properties and our European operations and properties. As of December 31, 2022, we owned or had a leasehold interest in 46 temperature-controlled warehouses outside the United States, and we managed two warehouses outside the United States on behalf of third parties.
We are subject to additional risks with respect to our current and potential international operations and properties. 23 As of December 31, 2023, we owned or had a leasehold interest in 47 temperature-controlled warehouses outside the United States, and we managed two warehouses outside the United States on behalf of third parties.
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 • if our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes.
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.
As of December 31, 2022, we had eight customers that each 28 accounted for at least 2% of our warehouse segment revenues, also on a pro-forma basis. In addition, as of December 31, 2022, 45 of our warehouses were predominantly single-customer warehouses.
As of December 31, 2023, we had eight customers that each accounted for at least 2% of our warehouse segment revenues, also on a pro-forma basis. In addition, as of December 31, 2023, 50 of our warehouses were predominantly single-customer warehouses.
We hold leasehold interests in 59 of our warehouses, and we may be forced to vacate our warehouses if we default on our obligations thereunder and we will be forced to vacate our warehouses if we are unable to renew such leases upon their expiration. 32 As of December 31, 2022, we held leasehold interests in 59 of our warehouses.
We hold leasehold interests in 57 of our warehouses, and we may be forced to vacate our warehouses if we default on our obligations thereunder and we will be forced to vacate our warehouses if we are unable to renew such leases upon their expiration. As of December 31, 2023, we held leasehold interests in 57 of our warehouses.
For example, approximately 41.2% of our owned or leased warehouses are located in six states; with approximately 10.2% in Georgia, 7.7% in New Jersey, 7.5% in Pennsylvania, 5.6% in California, 5.2% in Texas, and 5.0% in Arkansas and approximately 8.2% in Europe (in each case, on a refrigerated cubic-foot basis based on information as of December 31, 2022).
For example, approximately 41% of our owned or leased warehouses are located in six states; with approximately 11.2% in Georgia, 7.9% in New Jersey, 6.9% in Pennsylvania, 5.2% in Arkansas, 5.1% in Texas, and 4.9% in California, and approximately 8.0% in Europe (in each case, on a refrigerated cubic-foot basis based on information as of December 31, 2023).
While we seek to mitigate the impact of inflation by increased operating efficiencies and embedded rate escalation or price increases to our customers to offset increased costs, there can be no assurance that we will be able to offset future inflationary cost increases in whole or in part, which could adversely impact our profit margins.
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.
Further, under amendments to the Code made by TCJA, income must be accrued for U.S. federal income tax purposes no later than when such income is taken into account as revenue in our financial statements, subject to certain exceptions, which could also create mismatches between REIT taxable income and the receipt of cash attributable to such income.
Income must be accrued for U.S. federal income tax purposes no later than when such income is taken into account as revenue in our financial statements, subject to certain exceptions, which could also create mismatches between REIT taxable income and the receipt of cash attributable to such income.
On April 16, 2020, the Company filed a registration statement on Form S-3ASR which registered an indeterminate amount of common stock, preferred stock, depositary shares and warrants, as well as debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by us.
On March 17, 2023, the Company filed a registration statement on Form S-3ASR which registered an indeterminate amount of common stock, preferred stock, depositary shares and warrants, as well as debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by us.
As of December 31, 2022, worldwide, we employed approximately 15,484 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.
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.
Additionally, we may be bound by contractual requirements applicable to our collection, use, processing, and disclosure of various types of data, including personal data, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters.
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.
For example, our board of directors can do the following without stockholder approval: • issue additional shares, which could dilute your ownership; • amend our articles of incorporation to increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue; • classify or reclassify any unissued shares and set the preferences, rights and other terms of such classified or reclassified shares, which preferences, rights and terms could delay, defer or prevent a transaction or change in control which might involve a premium price for our common stock or otherwise be in your best interest as a stockholder; • remove and replace executive management; • employ and compensate affiliates; • change major policies, including policies relating to investments, financing, growth and capitalization; • enter into new lines of business or new markets; and • determine that it is no longer in our best interests to attempt to continue to qualify as a REIT. 45 Any of these actions without stockholder approval could increase our operating expenses, impact our ability to make distributions to our stockholders, reduce the market value of our real estate assets, negatively impact our stock price, or otherwise not be in your best interest as a stockholder.
For example, our board of directors can do the following without stockholder approval: • issue additional shares, which could dilute your ownership; • amend our articles of incorporation to increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue; • classify or reclassify any unissued shares and set the preferences, rights and other terms of such classified or reclassified shares, which preferences, rights and terms could delay, defer or prevent a transaction or change in control which might involve a premium price for our common stock or otherwise be in your best interest as a stockholder; • remove and replace executive management; • employ and compensate affiliates; • change major policies, including policies relating to investments, financing, growth and capitalization; • enter into new lines of business or new markets; and • determine that it is no longer in our best interests to attempt to continue to qualify as a REIT.
On an annualized basis assuming all 2022 acquisitions occurred as of the beginning of the year, 41.9% of rent and storage revenue were generated from fixed commitment storage contracts or leases with customers for the year ended December 31, 2022.
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.
Risks Related to our Common Stock Our cash available for distribution to stockholders may not be sufficient to pay distributions at expected levels, or at all, and we may need to increase our borrowings or otherwise raise capital in order to make such distributions; consequently, we may not be able to make such distributions in full.
Risks Related to our Common Stock Our cash available for distribution to stockholders may not be sufficient to pay distributions at expected levels, or at all, and we may need to increase our borrowings or otherwise raise capital in order to make such distributions; consequently, we may not be able to make such distributions in full. 38 Our current annualized distributions to our stockholders are $0.88 per share.
In addition, in general, no more than 5% of the value of our total assets (other than cash, cash items, government securities, securities issued by a TRS and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total securities can be represented by securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our total assets (other than cash, cash items, government securities, securities issued by a TRS and qualified real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total securities can be represented by securities of one or more TRSs, and no more than 25% of the value of our assets may consist of “nonqualified publicly offered REIT debt instruments”.
Some of these possible changes include increasingly stringent fuel emission limits, changes in the regulations that govern the amount of time a driver may drive or work in any specific period, limits on vehicle weight and size and other matters including safety requirements.
Some of these possible changes include increasingly stringent fuel emission limits, changes in the regulations that govern the amount of time a driver may drive or work in any specific period, limits on vehicle weight and size and other matters including safety requirements. We participate in multiemployer pension plans administered by labor unions.
In the event of a fire, flood or other occurrence involving the loss of or damage to stored products held by us but belonging to others, we may be liable for such loss or damage.
Any such losses could materially and adversely affect us. In the event of a fire, flood or other occurrence involving the loss of or damage to stored products held by us but belonging to others, we may be liable for such loss or damage.
Our business, financial condition and operating results may suffer if any of the following risks are realized. 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.
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.
Many of our properties contain, or may in the past have contained, features that pose environmental risks including underground tanks for the storage of petroleum products and other hazardous substances as well as floor drains and wastewater collection and discharge systems, hazardous materials storage areas and septic systems.
Many of our properties contain, or may in the past have contained, features that pose environmental risks including underground tanks for the storage of petroleum products and other hazardous substances, floor drains and wastewater collection and discharge systems, hazardous materials storage areas and septic systems and under-floor heating systems, some of which utilize ethylene glycol, petroleum compounds, or other hazardous substances.
Increases in interest rates could increase the amount of our debt payments . As of December 31, 2022, we had approximately $1.3 billion of variable-rate indebtedness outstanding under our Senior Unsecured Credit Facility, and we have entered into interest rate swaps to convert $829.5 million of this indebtedness to fixed-rate. Interest rates are expected to increase in 2023.
Increases in interest rates could increase the amount of our debt payments . As of December 31, 2023, we had approximately $1.2 billion of variable-rate indebtedness outstanding under our Senior Unsecured Credit Facility, and we have entered into interest rate swaps to convert $833.8 million of this indebtedness to fixed-rate. Interest rates may increase in 2024.
Many of our warehouses are older, and as our warehouses and equipment age and newer warehouses and equipment come onto the market, we may lose existing or potential customers, and we may be pressured to reduce our rent and storage and other fees below those we currently charge in order to retain customers.
Many of our warehouses are older, and as our warehouses and equipment age and newer warehouses and equipment come onto the market, we may be pressured to reduce our rent and storage and other fees in order to retain customers.
We use in-house transportation services to provide refrigerated transportation services to certain customers. The potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. A material increase in the frequency or severity of accidents or workers’ compensation claims or the unfavorable development of existing claims could materially and adversely affect our results of operations.
The potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. A material increase in the frequency or severity of accidents or workers’ compensation claims or the unfavorable development of existing claims could materially and adversely affect our results of operations.
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.
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.
A number of our properties are located in areas that are known to be subject to earthquake activity, such as California, Washington, Oregon and New Zealand, or in flood zones, such as Appleton, Wisconsin and Fort Smith, Arkansas and our Netherlands facilities, in each case exposing them to increased risk of casualty.
A number of our properties are located in areas that are known to be subject to earthquake activity, such as California, Washington, Oregon and New Zealand, or in flood zones, such as Appleton, Wisconsin and Fort Smith, Arkansas and our Netherlands facilities, in each case exposing them to increased risk of casualty. 33 Costs of complying with governmental laws and regulations could adversely affect us and our customers.
Most of our warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the U.S. Environmental Protection Agency, or the EPA and similar international agencies.
Some of our properties may contain asbestos or asbestos-containing building materials. Most of our warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the U.S. Environmental Protection Agency, or the EPA and similar international agencies.
Furthermore, any fines or violations that we face under OSHA could expose us to reputational risk. We face ongoing litigation risks which could result in material liabilities and harm to our business regardless of whether we prevail in any particular matter. We are a large company operating in multiple U.S. and international jurisdictions, with thousands of associates and business counterparts.
We face ongoing litigation risks which could result in material liabilities and harm to our business regardless of whether we prevail in any particular matter. We are a large company operating in multiple U.S. and international jurisdictions, with thousands of associates and business counterparts.
If customers who utilize this type of warehouse, which may be located in remote areas, relocate their processing or production plants, default or otherwise cease to use our warehouses, then we may be unable to find replacement customers for these warehouses on favorable terms or at all or, if we find replacement customers, we may have to incur significant costs to reposition these warehouses for the replacement customers’ needs, any of which could have a material adverse effect on us.
If customers who utilize this type of warehouse relocate their facilities or otherwise cease to use our warehouses, then we may be unable to find replacement customers on favorable terms or may have to incur significant costs to reposition these warehouses for replacement needs, any of which could have a material adverse effect on us.
We store frozen and perishable food and other products and provide food processing, repackaging and other services. Product contamination, spoilage, other adulteration, product tampering or other quality control issues could occur at any of our facilities or during the transportation of these products, which could cause our customers to lose all or a portion of their inventory.
Product contamination, spoilage, other adulteration, product tampering or other quality control issues could occur at any of our facilities or during the transportation of these products, which could cause our customers to lose all or a portion of their inventory.
Our ability to identify and acquire suitable properties on favorable terms and to successfully integrate and operate them may be constrained by the following risks: • we face competition from other real estate investors with significant capital, including REITs, institutional investment funds and special purpose acquisition companies, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices; • we face competition from other potential acquirers that may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects or returns; • 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 acquire properties that are not accretive to our operating and financial results upon acquisition, and 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 discover unexpected items, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an acquisition opportunity after incurring expenses related thereto; • 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 be unable to make, or may spend more than budgeted amounts to make, necessary improvements or renovations to acquired properties; • we may spend more than budgeted amounts to meet customer specifications on a newly-acquired warehouse; • market conditions may result in higher than expected vacancy rates and lower than expected storage charges, rent or fees; 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. 22 Our inability to identify and complete suitable property acquisitions on favorable terms or at all, could have a material adverse effect on us.
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.
Our current and future joint-venture investments involve risks not present in investments in which a third party is not involved, including the possibility that: • we and a co-venturer or partner may reach an impasse on a major decision that requires the approval of both parties; • we may not have exclusive control over the development, financing, management and other aspects of the property or joint venture, which may prevent us from taking actions that are in our best interest but opposed by a co-venturer or partner; • a co-venturer or partner may at any time have economic or business interests or goals that are or may become inconsistent with ours; • a co-venturer or partner may encounter liquidity or insolvency issues or may become bankrupt, which may mean that we and any other remaining co-venturers or partners generally would remain liable for the joint venture’s liabilities; • a co-venturer or partner may take action contrary to our instructions, requests, policies or investment objectives, including our current policy with respect to maintaining our qualification as a REIT under the Code; • a co-venturer or partner may take actions that subject us to liabilities in excess of, or other than, those contemplated; • in certain circumstances, we may be liable for actions of our co-venturer or partner, and the activities of a co-venturer or partner could adversely affect our ability to qualify as a REIT, even if we do not control the joint venture; • our joint venture agreements may restrict the transfer of a co-venturer’s or partner’s interest or otherwise restrict our ability to sell the interest when we desire or on advantageous terms; 41 • our joint venture agreements may contain buy-sell provisions pursuant to which one co-venturer or partner may initiate procedures requiring the other co-venturer or partner to choose between buying the other co-venturer’s or partner’s interest or selling its interest to that co-venturer or partner; • if a joint venture agreement is terminated or dissolved, we may not continue to own or operate the interests or investments underlying the joint venture relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; or • disputes between us and a co-venturer or partner may result in litigation or arbitration that could increase our expenses and prevent our management from focusing their time and attention on our business.
Our current and future joint-venture investments involve risks not present in investments in which a third party is not involved, including the possibility that: • we and a co-venturer or partner may reach an impasse on a major decision that requires the approval of both parties; 34 • we may not have exclusive control over the development, financing, management and other aspects of the property or joint venture, which may prevent us from taking actions that are in our best interest; • a co-venturer or partner may at any time have economic or business interests or goals that are or may become inconsistent with ours; • a co-venturer or partner may encounter liquidity or insolvency issues or may become bankrupt; • a co-venturer or partner may take action contrary to our instructions, requests, policies or investment objectives, including our current policy with respect to maintaining our qualification as a REIT under the Code; • in certain circumstances, we may be liable for actions of our co-venturer or partner, and the activities of a co-venturer or partner could adversely affect our ability to qualify as a REIT, even if we do not control the joint venture; • our joint venture agreements may contain restrictions and/or affirmative covenants regarding the transfer of our or our co-venturer or partner’s interests; • if a joint venture agreement is terminated or dissolved, we may not continue to own or operate the interests or investments underlying the joint venture relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; or • disputes between us and a co-venturer or partner may result in litigation or arbitration that could increase our expenses and prevent our management from focusing their time and attention on 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.
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.
We may not be able to obtain additional financing on favorable terms or at all when needed. Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating and financial restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our stockholders.
Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating and financial restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our stockholders.
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 19 associates above the applicable minimum wage, we may be unable to hire and retain qualified personnel.
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.
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.
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.
As a result, we may be unable to complete an exit strategy or quickly sell properties in our portfolio in response to adverse changes in the performance of our properties or in our business generally.
As a result, we may be unable to sell properties in our portfolio on attractive terms in response to adverse changes in the performance of our properties or in our business generally.
In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains.
In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund all of our future capital needs.
In many instances, we have not conducted further investigations of environmental conditions disclosed in these environmental assessments nor can we be assured that these environmental assessments have identified all potential environmental liabilities associated with our properties. Material environmental conditions, liabilities or compliance concerns may have arisen or may arise after the date of the environmental assessments on our properties.
In many instances, we have not conducted further investigations of environmental conditions disclosed in these environmental assessments nor can we be assured that these environmental assessments have identified all potential environmental liabilities associated with our properties.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table provides summary information regarding the warehouses in our portfolio that we owned, leased or managed as of December 31, 2022. 55 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 50 345.6 24 % 1,149 81 % 72 % $ 592.6 $ 157.1 1,271 Southeast 49 295.6 21 % 956 79 % 73 % 426.6 88.7 797 Central 41 268.2 19 % 1,107 80 % 74 % 434.1 150.6 818 West 45 273.7 19 % 1,186 73 % 67 % 379.0 126.3 699 Canada 6 33.7 2 % 129 83 % 83 % 45.7 17.9 105 North America Total 191 1,216.8 85 % 4,527 78 % 72 % $ 1,878.0 $ 540.6 2,733 Netherlands 7 36.7 3 % 121 78 % 78 % 70.0 10.4 442 United Kingdom 6 40.1 3 % 258 85 % 85 % 50.8 13.9 168 Spain 4 15.2 1 % 64 75 % 75 % 20.4 2.6 283 Portugal 4 11.5 1 % 57 86 % 86 % 16.1 3.9 176 Ireland 3 9.5 1 % 35 95 % 95 % 14.3 2.9 131 Austria 1 4.2 — % 44 84 % 84 % 23.9 6.6 161 Poland 2 3.5 — % 14 95 % 95 % 5.1 0.8 69 Europe Total 27 120.7 8 % 593 83 % 83 % $ 200.6 $ 41.1 1,333 Australia 10 57.9 4 % 195 88 % 76 % 172.7 36.7 127 New Zealand 7 20.4 1 % 87 92 % 84 % 36.4 13.0 69 Asia-Pacific Total 17 78.3 5 % 282 89 % 79 % $ 209.1 $ 49.7 192 Argentina 2 9.7 1 % 23 77 % 77 % 11.4 3.0 56 Chile (6) — — — % 10 105 % 105 % 3.9 1.8 — South America Total 2 9.7 1 % 33 85 % 85 % $ 15.3 $ 4.8 56 Warehouse Segment Total / Average 237 1,425.5 100 % 5,435 85 % 82 % $ 2,303.0 $ 636.2 4,296 Third-Party Managed Portfolio United States 3 14.9 74 % — — — $ 273.6 $ 7.5 3 Canada 1 5.3 26 % — — — 3.4 1.0 1 North America Total / Average 4 20.2 100 % — — — $ 277.0 $ 8.5 4 Asia-Pacific 1 — — % — — — 21.4 3.8 1 Third-Party Managed Total / Average 5 20.2 100 % — — — $ 298.4 $ 12.3 5 Portfolio Total / Average 242 1,445.7 100 % 5,435 80 % 73 % $ 2,601.4 $ 648.5 4,296 56 (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 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.
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.
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.
We manage warehouses on behalf of third parties and provide warehouse management services to several leading food retailers 57 and manufacturers in customer-owned facilities, including some of our largest and longest-standing customers.
We manage warehouses on behalf of third parties and provide warehouse management services to several leading food retailers and manufacturers in customer-owned facilities, including some of our largest and longest-standing customers.
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, 2022.
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.
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, 2022.
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.
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, 2022, we had four 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, 2023, we had 4 facility leased warehouses with approximately 22.1 million cubic feet of temperature-controlled capacity.
(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).
(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).
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 (“Financial Statement Schedule”) under Part IV, Item 15(b) and which is included in Part II, Item 8.
As of December 31, 2022, we owned or leased 58 production advantaged warehouses with approximately 345.1 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, 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.
The majority of our facility leased warehouses are leased to third parties under “triple net lease” arrangements. • Third-Party Managed . As of December 31, 2022, we managed five 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, 2023, we managed 5 warehouses on behalf of third parties with approximately 20.2 million cubic feet of temperature-controlled capacity.
As of December 31, 2022, we owned or leased 85 public warehouses with approximately 419.1 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 .
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 .
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, 2022, we owned or leased 90 distribution centers with approximately 639.1 million cubic feet of temperature-controlled capacity and 2.1 million pallet positions.
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.
Our Warehouse Portfolio As of December 31, 2022, we operated a global network of 242 warehouses that contained approximately 1.4 billion cubic feet and approximately 5 million pallet positions.
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.
(5) As of December 31, 2022, we owned 154 of our North American warehouses and 39 of our international warehouses, and we leased 37 of our North American warehouses and seven of our international warehouses. As of December 31, 2022, fourteen of our owned facilities were located on land that we lease pursuant to long-term ground leases.
(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
(6) On June 1, 2022, we contributed our Chilean operations to the LATAM JV which we have a 15% ownership stake in. The information reflects the period of time we owned the facility during 2022, prior to contributing it to the LATAM JV.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRefer to Note 17 of the Consolidated Financial Statements for additional information.
Biggest changeRefer to No te 17 - Commitments and Contingencies of the Consolidated Financial Statements for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparison assumes that $100 was invested on January 19, 2018 in Americold Realty Trust, Inc. common stock and in each of these indices and assumes reinvestment of dividends, if any. 59 Comparison of Cumulative Total Returns Among Americold Realty Trust, Inc., S&P 500, and RMZ Index Assumes $100 invested on January 19, 2018 Assumes dividends reinvested To fiscal year ended December 31, 2022 Pricing Date COLD ($) S&P 500($) RMZ($) 1/19/2018 100.00 100.00 100.00 12/31/2018 151.79 90.82 96.30 12/31/2019 224.06 119.05 119.34 12/31/2020 255.61 139.57 107.88 12/31/2021 243.51 181.51 155.35 12/31/2022 225.57 146.15 112.89 • 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 January 19, 2018. 60 Sales of Unregistered Securities None.
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.
The number of holders of record of our common stock on February 23, 2023 was 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 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.
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, 2023, we had approximately 269,925,540 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 23, 2024, we had approximately 283,784,221 shares of common stock outstanding.
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 January 19, 2018 (the date of our IPO) through December 31, 2022, 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, 2018 through December 31, 2023, with the cumulative total returns on the MSCI US REIT Index (“RMZ”) and the S&P 500 Market Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe pro-forma adjustment for dispositions reduces Core EBITDA for the earnings of facilities disposed of or exited during the year, including the strategic exit of certain third-party managed business. 81 Reconciliation of Net Income to NAREIT EBITDAre and Core EBITDA (In thousands) Year Ended December 31, 2022 2021 2020 Net loss (income) $ (19,474) $ (30,309) $ 24,555 Adjustments: Depreciation and amortization 331,446 319,840 215,891 Interest expense 116,127 99,177 91,481 Income taxes benefit (18,836) (1,569) (7,292) EBITDA 409,263 387,139 324,635 Adjustments: Loss (gain) on sale of real estate 5,689 — (21,759) Adjustment to reflect share of EBITDAre of partially owned entities 17,815 8,966 1,022 NAREIT EBITDAre $ 432,767 $ 396,105 $ 303,898 Adjustments: Acquisition, litigation and other, net 32,511 51,578 36,306 Loss on partially owned entities 9,300 2,004 250 Impairment of indefinite and long-lived assets 7,380 3,312 8,236 Foreign currency exchange loss 975 610 45,278 Share-based compensation expense 27,137 23,900 17,911 Loss on debt extinguishment, modifications, and terminations of derivatives instruments 3,217 5,689 9,975 Bridge loan commitment fees — — 2,438 Loss on other asset disposals 3,556 279 2,640 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 (17,815) (8,966) (1,022) Core EBITDA $ 499,766 $ 474,511 $ 425,910 82 As of December 31, 2022 2021 (In thousands) Borrowings under revolving line of credit $ 500,052 $ 399,314 Mortgage notes, senior unsecured notes and term loan – net of deferred financing costs of $13,044 and $11,050 in the aggregate, at December 31, 2022 and 2021, respectively 2,569,281 2,443,806 Sale-leaseback financing obligations 171,089 178,817 Financing lease obligations 77,561 97,633 Total debt 3,317,983 3,119,570 Deferred financing costs 13,044 11,050 Gross debt 3,331,027 3,130,620 Adjustments: Less: cash, cash equivalents and restricted cash 53,063 82,958 Net debt $ 3,277,964 $ 3,047,662 Core EBITDA $ 499,766 $ 474,511 Adjustments (3,588) 25,190 Pro-forma Core EBITDA $ 496,178 $ 499,701 Net debt to pro-forma Core EBITDA (1) 6.6 x 6.1 x (1) 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.
Biggest changeGAAP. 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.
We estimate the number of contractually committed pallet positions by taking into account actual pallet commitment specified in each customers’ contract, and subtracting the physical pallet positions. (2) 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 applicable period.
We estimate the number of contractually committed pallet positions by taking into account the actual pallet commitment specified in each customers’ contract, and subtracting the physical pallet positions. (2) 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 applicable period.
Expansion and development The expansion and development expenditures for the year ended December 31, 2022 are primarily driven by $37.5 million related to our two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $26.0 million for the Spearwood, Australia expansion, $13.5 million related to the Dunkirk, NY development, $18.8 million in our Dublin expansion, $8.8 million for the Barcelona expansion, $24.0 million related to our Russellville expansion, $12.4 million related to Atlanta Major Market Strategy Phase 2, and $8.4 million related to the Rochelle facility.
The expansion and development expenditures for the year ended December 31, 2022 are primarily driven by $37.5 million related to our two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $26.0 million for the Spearwood, Australia expansion, $13.5 million related to the Dunkirk, NY development, $18.8 million in our Dublin expansion, $8.8 million for the Barcelona expansion, $24.0 million related to our Russellville expansion, $12.4 million related to Atlanta Major Market Strategy Phase 2, and $8.4 million related to the Rochelle facility.
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 operating costs and margins and the discount rates are the most subjective and/or complex.
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.
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.
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.
We use EBITDAre and Core EBITDA as measures of our operating performance and not as measures of liquidity. The table below reconciles EBITDAre and Core EBITDA to net (loss) income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP.
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.
Credit Ratings Our capital structure and financial practices have earned us investment grade credit ratings from three nationally recognized credit rating agencies. We have investment grade ratings of BBB with a negative outlook from Fitch, BBB with a Stable Trends outlook from DBRS Morningstar, and an investment grade rating of Baa3 with a stable outlook from Moody’s.
Credit Ratings Our capital structure and financial practices have earned us investment grade credit ratings from three nationally recognized credit rating agencies. We have investment grade ratings of BBB with a stable outlook from Fitch, BBB with a Stable Trends outlook from DBRS Morningstar, and an investment grade rating of Baa3 with a stable outlook from Moody’s.
Expansion and development capital expenditures are investments made to support both our customers and our warehouse 87 expansion and development initiatives. It also includes investments in enhancing our information technology platform.
Expansion and development capital expenditures are investments made to support both our customers and our warehouse expansion and development initiatives. It also includes investments in enhancing our information technology platform.
The charges incurred during the year ended December 31, 2022 include $3.2 million of goodwill impairment as we are strategically shifting our focus to our core warehouse portfolio and are no longer serving one of our largest historical customers in the third-party managed segment, an impairment charge of “Assets under construction” of $2.2 million associated with a development project which management determined it would no longer pursue, and aggregate charges of $1.7 million of “Buildings, property and equipment” associated with the anticipated exit of certain leased facilities.
The charges incurred during the year ended December 31, 2022 include $3.2 million of goodwill impairment as we strategically shifted our focus to our core warehouse portfolio and are no longer serving one of our largest historical customers in the third-party managed segment, an impairment charge of “Assets under construction” of $2.2 million associated with a development project which management determined it would no 69 longer pursue, and aggregate charges of $1.7 million of “Buildings, property and equipment” associated with the anticipated exit of certain leased facilities.
We also adjust for AFFO attributable to our share of reconciling items of partially owned entities. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.
We also adjust for AFFO attributable to our share of reconciling items of partially owned entities and discontinued operations. We believe that Adjusted FFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments in our business and to assess our ability to fund distribution requirements from our operating activities.
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. 83 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, developments 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 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.
Maintenance Capital Expenditures 86 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 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 80 our existing temperature-controlled warehouse network include replacing roofs and refrigeration equipment, and upgrading our racking systems.
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, 2022 and 2021.
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.
Critical Accounting Policies and Estimates Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements and our unaudited interim condensed consolidated financial statements, each of which has been prepared in accordance with U.S. GAAP. The preparation of these historical financial statements in conformity with U.S.
Critical Accounting Estimates Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements and our unaudited interim consolidated financial statements, each of which has been prepared in accordance with U.S. GAAP. The preparation of these historical financial statements in conformity with U.S.
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, provision or benefit from deferred income taxes, share-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, 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.
During the third quarter of 2022, the Company strategically shifted its focus to the core warehouse portfolio, terminating and winding down business with one of the largest customers in the North America third-party managed reporting unit resulting in a goodwill impairment charge of $3.2 million.
In 2022, the Company strategically shifted its focus to the core warehouse portfolio, terminating and winding down business with one of the largest customers in the North America third-party managed reporting unit resulting in a goodwill impairment charge of $3.2 million.
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, 2022 and 2021.
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.
However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the utility of FFO and Core FFO as a measure of our performance may be limited.
However, because NAREIT FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the usefulness of NAREIT FFO and Core FFO as a measure of our performance may be limited.
During the year ended December 31, 2022, we also incurred capitalized interest of $11.8 million and capitalized insurance, property taxes, and compensation and travel expense aggregating to $5.5 million related to our ongoing expansion and development projects.
During the year ended December 31, 2022, we also incurred capitalized interest of $11.8 million and capitalized insurance, and compensation and travel expense aggregating to $5.5 million related to our ongoing expansion and development projects.
Investing Activities For the year ended December 31, 2022 cash used for additions to property, buildings and equipment was $308.4 million reflecting investments in our various expansion and development projects and maintenance capital expenditures.
For the year ended December 31, 2022 cash used for additions to property, buildings and equipment was $308.4 million reflecting investments in our various expansion and development projects and maintenance capital expenditures.
Of the revenues received from this cus tomer, $255.2 million, $273.1 million, and $241.8 million represented reimbursements for certain expenses we incurred during the years ended December 31, 2022, 2021 and 2020, respectively, that were offset by matching expenses included in our third-party managed cost of operations.
Of the revenues received from this cus tomer $255.2 million and $273.1 million represented reimbursements for certain expenses we incurred during the years ended December 31, 2022 and 2021, respectively, that were offset by matching expenses included in our third-party managed cost of operations.
Same store contribution (NOI) should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.
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 provide reconciliations of these measures in the discussions of our comparative results of operations below.
As part of our initiatives to streamline our business processes and to reduce our cost structure, we have evaluated and exited less strategic and profitable markets or business lines, including the sale of certain warehouse assets, the exit of certain leased facilities, the exit of certain managed warehouse agreements and the sale of our quarry business during 2020.
Additionally, as part of our initiatives to streamline our business processes and to reduce our cost structure, we have evaluated and exited less strategic and profitable markets or business lines, including the sale of certain warehouse assets, the exit of certain leased facilities, and the exit of certain managed warehouse agreements.
Transportation Segment The following table presents the operating results of our transportation segment for the years ended December 31, 2022 and 2021.
Transportation Segment The following table presents the operating results of our transportation segment for the years ended December 31, 2023 and 2022.
GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, real estate asset impairment and our share of reconciling items for partially owned entities.
GAAP and gains or losses from sales of previously depreciated operating real estate and other assets, plus specified non-cash items, such as real estate asset depreciation and amortization impairment charge on real estate related assets and our share of reconciling items for partially owned entities.
As of December 31, 2022, our debt had a weighted average term to maturity of approximately 5.7 years , assuming exercise of extension options. For further information regarding outstanding indebtedness, please see Note 9 and Note 10 to our consolidated financial statements included in this 2022 Annual Report on Form 10-K as filed with the SEC.
As of December 31, 2023, our debt had a weighted average term to maturity of approximately 5.3 years , assuming exercise of extension options. For further information regarding outstanding indebtedness, please see Note 9 -Debt and Note 10 -Deriva tives to our consolidated financial statements included in this 2023 Annual Report on Form 10-K as filed with the SEC.
Expansion and development initiatives also include $22.5 million and $26.8 million of corporate initiatives and smaller customer driven growth projects incurred during 2022 and 2021, respectively, which are projects designed to reduce future spending over the course of time. This category reflects return on investment projects, conversion of leases to owned assets, and other cost-saving initiatives.
Expansion and development initiatives also include $17.3 million and $22.5 million of corporate initiatives and smaller customer driven growth projects incurred during 2023 and 2022, respectively, which are projects designed to reduce future spending over the course of time. This category reflects return on investment projects, conversion of leases to owned assets, and other cost-saving initiatives.
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 $42.0 million and $41.8 million for the year ended December 31, 2022 and 2021, 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 $37.5 million and $42.0 million for the year ended December 31, 2023 and 2022, respectively.
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 March 1, 2022, for a discussion of the comparative results of operations for the years ended December 31, 2021 and 2020.
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.
Pro-forma Core EBITDA for 2022, 2021, and 2020 for purposes of this calculation assumes ownership of our acquisitions for the full twelve months of the year, includes an add-back for rent expense on leased facilities exited or purchased, and is reduced by Core EBITDA of dispositions.
Pro-forma Core EBITDA for 2023 and 2022 for purposes of this calculation assumes ownership of our acquisitions for the full year, includes an add-back for rent expense on leased facilities exited or purchased, and is reduced by Core EBITDA of dispositions.
We are a well-known seasoned issuer with an effective shelf registration statement filed on April 16, 2020, which registered an indeterminate amount of common shares, preferred shares, depositary shares and warrants, as well as debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by us.
We are a well-known seasoned issuer with an effective shelf registration statement filed on March 17, 2023, which registered an indeterminate amount of common shares, preferred shares, depositary shares and warrants, as well as debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by us.
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, 2022 we completed the acquisition 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 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.
Finally, we incurred approximately $1.5 million and $13.2 million during 2022 and 2021, respectively, for contemplated future expansion or development projects. 88 The following table sets forth our acquisitions, expansion and development capital expenditures for the years ended December 31, 2022 and 2021 (in thousands).
Finally, we incurred approximately $14.9 million and $1.5 million during 2023 and 2022, respectively, for contemplated future expansion or development projects. The following table sets forth our acquisitions, expansion and development capital expenditures for the years ended December 31, 2023 and 2022 (in thousands).
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 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the SEC on March 1, 2022. 69 Results of Operations Comparison of Results for the Years Ended December 31, 2022 and 2021 Warehouse Segment The following table presents the operating results of our warehouse segment for the years ended December 31, 2022 and 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the SEC on February 27, 2023. 62 Results of Operations Comparison of Results for the Years Ended December 31, 2023 and 2022 Warehouse Segment The following table presents the operating results of our warehouse segment for the years ended December 31, 2023 and 2022.
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. We may also perform a quantitative evaluation periodically, even if there is no change of events or circumstances.
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.
Same store contribution (NOI) is 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 contribution (NOI) in a manner consistent with our definition or calculation.
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.
For the year ended December 31, 2022, we recorded a $5.7 million loss from the sale of real estate related to a facility where a customer exercised its option to purchase the facility and we recorded a loss for the excess book value. 76 Other Expense The following table presents other items of income and expense for the years ended December 31, 2022 and 2021 .
For the year ended December 31, 2022, we recorded a $5.7 million loss from the sale of real estate related to a facility where a customer exercised its option to purchase the facility and we recorded a loss for the excess book value.
Same Store Analysis We define our “same store” population once a year at the beginning of the current calendar year. Our same store population includes properties that were owned or leased for the entirety of two comparable periods and that have reported at least twelve months of consecutive normalized operations prior to January 1 of the prior calendar year.
We define our “same store” population once annually at the beginning of the current calendar year. Our population includes properties owned or leased for the entirety of two comparable periods with at least twelve consecutive months of normalized operations prior to January 1 of the current calendar year.
Goodwill Impairment Evaluation We perform impairment testing of goodwill as of October 1 of each year, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Goodwill Impairment Evaluation The Company evaluates the carrying value of goodwill each year as of October 1 and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company may use both qualitative and quantitative approaches when testing goodwill for impairment.
The following table shows a comparison of underlying average exchange rates of the foreign currencies that impacted our U.S. dollar-reported revenues and expenses during the periods discussed herein together with a comparison against the exchange rates of such currencies at the end of the applicable periods presented herein.
Therefore, the impact of foreign currency fluctuations on our results of operations and margins is partially mitigated. 57 The following table shows a comparison of underlying average exchange rates of the foreign currencies that impacted our U.S. dollar-reported revenues and expenses during the periods discussed herein together with a comparison against the exchange rates of such currencies at the end of the applicable periods presented herein.
Year ended December 31, 2022 2021 (In thousands, except per cubic foot amounts) Real estate $ 41,086 $ 31,612 Personal property 61,822 53,006 Repair and maintenance expenses $ 102,908 $ 84,618 Repair and maintenance expenses per cubic foot $ 0.071 $ 0.058 External Growth, Expansion and Development Capital Expenditures External growth expenditures represent asset acquisitions or business combinations.
Year ended December 31, 2023 2022 (In thousands, except per cubic foot amounts) Real estate $ 56,210 $ 41,086 Personal property 62,485 61,822 Repair and maintenance expenses $ 118,695 $ 102,908 Repair and maintenance expenses per cubic foot $ 0.079 $ 0.071 External Growth, Expansion and Development Capital Expenditures External growth expenditures represent asset acquisitions or business combinations.
We also calculate our Core EBITDA as EBITDAre further adjusted for acquisition, litigation and other, net, loss on partially owned entities, impairment of indefinite and long-lived assets, foreign currency exchange gain or loss, share-based compensation expense, loss on debt extinguishment, modifications and termination of derivative instruments, gain on extinguishment of New Market Tax Credit structure, loss on deconsolidation of subsidiary contributed to joint venture, net loss on other asset disposals, and reduction in EBITDAre from partially owned entities.
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.
During the year ended December 31, 2021, we also incurred capitalized interest of $11.6 million and capitalized insurance, property taxes, and compensation and travel expense aggregating to $3.5 million related to our ongoing expansion and development projects.
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.
Year ended December 31, 2022 2021 Acquisitions, net of cash acquired and adjustments $ 15,829 $ 741,353 Asset acquisitions 14,581 53,641 Expansion and development initiatives 190,718 324,499 Information technology 6,910 7,630 Growth and expansion capital expenditures $ 228,038 $ 1,127,123 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.
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.
Sales of our common stock made pursuant to the 2021 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.
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.
Year ended December 31, 2022 2021 (In thousands, except per cubic foot amounts) Real estate $ 74,852 $ 62,677 Personal property 4,232 5,828 Information technology 6,427 7,460 Maintenance capital expenditures (1) $ 85,511 $ 75,965 Maintenance capital expenditures per cubic foot $ 0.059 $ 0.052 (1) Excludes $18.4 million and $15.8 million of deferred acquisition maintenance capital expenditures incurred for the years ended December 31, 2022 and 2021, respectively.
Year ended December 31, 2023 2022 (In thousands, except per cubic foot amounts) Real estate $ 70,772 $ 74,852 Personal property 3,124 4,232 Information technology 4,515 6,427 Maintenance capital expenditures (1) $ 78,411 $ 85,511 Maintenance capital expenditures per cubic foot $ 0.052 $ 0.059 (1) Excludes $0.7 million and $9.9 million of deferred acquisition maintenance capital expenditures incurred for the years ended December 31, 2023 and 2022, respectively.
All of these shares were settled during the year ended December 31, 2021. 84 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.
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.
Interest expense was $116.1 million for the year ended December 31, 2022, an increase of $17.0 million, or 17.1%, compared to $99.2 million for the year ended December 31, 2021.
Interest expense was $140.1 million for the year ended December 31, 2023, an increase of $24.0 million, or 20.6%, compared to $116.1 million for the year ended December 31, 2022.
In addition, we may be required to use borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our REIT status. 85 Outstanding Indebtedness The following table summarizes our outstanding indebtedness as of December 31, 2022 (in thousands): Debt Summary: Fixed rate $ 2,582,325 Variable rate - unhedged 500,052 Total mortgage notes, senior unsecured notes, term loans and borrowings under revolving line of credit 3,082,377 Sale-leaseback financing obligations 171,089 Financing lease obligations 77,561 Total debt and debt-like obligations $ 3,331,027 Percent of total debt and debt-like obligations: Fixed rate 85 % Variable rate 15 % Effective interest rate as of December 31, 2022 3.95 % The variable rate debt shown above bears interest at interest rates based on various one-month SOFR, CDOR, SONIA, BBSW, EURIBOR, and BKBM rates, depending on the respective agreement governing the debt, including our global revolving credit facilities.
In addition, we may be required to use borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our REIT status. 79 Outstanding Indebtedness The following table summarizes our outstanding indebtedness as of December 31, 2023 (in thousands): Debt Summary by Interest Rate Type: Fixed interest rate $ 2,611,700 Variable interest rate - unhedged 392,156 Senior unsecured notes, term loans and borrowings under revolving line of credit 3,003,856 Sale-leaseback financing obligations 161,937 Financing lease obligations 97,177 Total debt and debt-like obligations $ 3,262,970 Percent of total debt and debt-like obligations: Fixed interest rate 88 % Variable interest rate 12 % Effective interest rate as of December 31, 2023 4.02 % The variable rate debt shown above bears interest at interest rates based on various one-month SOFR, CDOR, SONIA, BBSW, EURIBOR, and BKBM rates, depending on the respective agreement governing the debt, including our global revolving credit facilities.
These assumptions are based on risk-adjusted growth rates and discount factors accommodating viewpoints that consider the full range of variability contemplated in the current and potential future economic situations.
The assumptions and inputs are based on risk-adjusted growth rates and discount factors accommodating multiple viewpoints that consider the full range of variability contemplated in the current and potential future economic situations. The market-based multiples approach assesses the financial performance and market values of other market-participant companies.
As a result, fluctuations in the price for power in the regions where we operate may have a significant effect on our financial results. We may from time to time hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts.
We may, from time to time, hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts.
Year ended December 31, 2022 2021 (In thousands) Net cash provided by operating activities $ 299,996 $ 273,060 Net cash used in investing activities $ (348,489) $ (1,239,199) Net cash provided by financing activities $ 23,325 $ 431,489 Operating Activities For the year ended December 31, 2022, our net cash provided by operating activities was $300.0 million, an increase of $26.9 million, or 9.9%, compared to $273.1 million for the year ended December 31, 2021.
Year ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 366,155 $ 299,996 Net cash used in investing activities $ (357,073) $ (348,489) Net cash used by financing activities $ (285) $ 23,325 Operating Activities For the year ended December 31, 2023, our net cash provided by operating activities was $366.2 million, a increase of $66.2 million, or 22.1%, compared to $300.0 million for the year ended December 31, 2022.
Amounts accumulated for distribution to stockholders are invested primarily in interest-bearing accounts, which are consistent with our intention to maintain our status as a REIT. As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can.
As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can.
The Company and this customer transitioned the management of this customer’s warehouses to a new third-party provider during the fourth quarter of 2022, and we will no longer serve this customer in the third-party managed segment going forward. We are reimbursed for substantially all expenses we incur in managing warehouses on behalf of third-party owners.
The Company and this customer transitioned the management of this customer’s warehouses to a new third-party provider during the fourth quarter of 2022, and we are no longer serving this customer in the third-party managed segment.
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. Transportation revenue was $313.4 million for the year ended December 31, 2022, an increase of $1.3 million, or 0.4%, compared to $312.1 million for the year ended December 31, 2021.
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.
The results of our 2022 impairment test 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. Business Combinations From time to time, we may enter into business combinations.
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.
Depreciation and amortization expense was $331.4 million for the year ended December 31, 2022, an increase of $11.6 million, or 3.6%, compared to $319.8 million for the year ended December 31, 2021. This increase was primarily due to the 2021 acquisitions, expansions and developments, partially offset by the favorable impact of foreign currency translation. 75 Selling, general and administrative .
This increase was primarily due to acquisitions, expansions and developments, partially offset by the favorable impact of foreign currency translation. Selling, general, and administrative . Corporate-level selling, general and administrative expenses were $226.8 million for the year ended December 31, 2023, a decrease of $4.3 million, or 1.9%, compared to $231.1 million for the year ended December 31, 2022.
The increase in margin was primarily due to the rate increases implemented and improved transportation procurement during 2022. Third-Party Managed Segment The following table presents the operating results of our third-party managed segment for the years ended December 31, 2022 and 2021.
The increase in margin was primarily due to rate increases, partially offset by lost business as a result of the Cyber incident. 67 Third-Party Managed Segment The following table presents the operating results of our third-party managed segment for the years ended December 31, 2023 and 2022.
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.
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 following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the years ended December 31, 2022 and December 31, 2021.
The NOI for our same store pool increased $80.9 million, or 12.8%, on a constant currency basis, for reasons further described below. 63 Same Store and Non-Same Store Analysis The following table presents revenues, cost of operations, contribution NOI and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the years ended December 31, 2023 and 2022.
Year ended December 31, Change 2022 actual 2022 constant currency (1) 2021 actual Actual Constant currency Number of managed sites 5 9 (Dollars in thousands) Third-party managed revenue $ 298,406 $ 300,308 $ 317,311 (6.0) % (5.4) % Third-party managed cost of operations 286,077 287,638 303,347 (5.7) % (5.2) % Third-party managed segment contribution $ 12,329 $ 12,670 $ 13,964 (11.7) % (9.3) % Third-party managed margin 4.1 % 4.2 % 4.4 % -27 bps -18 bps (1) The adjustments from our U.S.
Year ended December 31, Change 2023 actual 2023 constant currency (1) 2022 actual Actual Constant currency Number of managed sites 5 5 (Dollars in thousands) Third-party managed revenue $ 42,570 $ 43,761 $ 298,406 (85.7) % (85.3) % Third-party managed cost of operations 36,641 37,596 286,077 (87.2) % (86.9) % Third-party managed segment contribution $ 5,929 $ 6,165 $ 12,329 (51.9) % (50.0) % Third-party managed margin 13.9 % 14.1 % 4.1 % 980 bps 996 bps (1) The adjustments from our U.S.
GAAP operating results to calculate our operating results on a constant currency basis is the effect of changes in foreign currency exchange rates relative to the comparable prior period. (2) Calculated as rent and storage revenues less power and other facilities costs. 72 (3) Calculated as warehouse services revenues less labor and other services costs.
GAAP operating results to calculate our operating results on a constant currency basis is the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Our depreciation and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to our warehouses, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, and our computer hardware and software. Amortization relates primarily to intangible assets for customer relationships.
Consolidated Operating Expenses Depreciation and amortization charges relate to the depreciation of buildings and equipment related improvements, leasehold improvements, material handling equipment, furniture, fixtures, and our computer equipment. Amortization relates primarily to intangible assets for customer relationships.
For the years ended December 31, 2022 and 2021, corporate-level selling, general and administrative expenses were 7.9% and 6.7% of total revenues, respectively. Acquisition, litigation and other . Corporate-level acquisition, litigation and other expenses were $32.5 million for the year ended December 31, 2022, a decrease of $19.1 million compared to $51.6 million for the year ended December 31, 2021.
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 .
The expansion and development expenditures for the year ended December 31, 2021 are primarily driven by $111.2 million related to two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $23.9 million for the Atlanta major markets strategy project (Phase 1) and $21.0 million related to Phase 2, $37.5 million for the Russellville expansion, $9.5 million for the Calgary, Canada expansion, $20.4 million related to the Auckland, New Zealand expansion project, $24.0 million for the Dunkirk, NY development, $13.5 million for the Dublin expansion, $4.4 million for the Spearwood, Australia expansion and $4 million for the Lurgan expansion.
Expansion and development The expansion and development expenditures for the year ended December 31, 2023 are primarily driven by $16.7 million related to our two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $13.3 million for the Spearwood, Australia expansion, $16.3 million related to our Russellville expansion, $11.9 million related to Atlanta Major Market Strategy Phase 2, and $5.0 million related to the Allentown facility.
The average effective interest rate of our outstanding debt increased from 3.14% for the year ended December 31, 2021 to 3.65% for the year ended December 31, 2022 due to higher average borrowings paired with rising interest rates associated with our Senior Unsecured Credit Facility.
The average effective interest rate of our outstanding debt increased from 3.65% for the year ended December 31, 2022 to 4.08% for the year ended December 31, 2023, primarily due to the rising interest rates associated with our floating rate borrowings under our Senior Unsecured Credit Facility, and an increase in average outstanding borrowings from $3.0 billion during the year ended December 31, 2022 to $3.1 billion during the year ended December 31, 2023, partially offset by the impact of our interest rate swaps.
GAAP. 79 Reconciliation of Net Income to NAREIT FFO, Core FFO, and Adjusted FFO (in thousands) Year Ended December 31, 2022 2021 2020 Net (loss) income $ (19,474) $ (30,309) $ 24,555 Adjustments: Real estate related depreciation 210,171 200,184 146,417 Net loss (gain) on sale of real estate (a) 5,689 — (21,759) Net loss on asset disposals 1,135 12 2,045 Impairment charges on certain real estate assets 3,407 1,752 5,630 Our share of reconciling items related to partially owned entities 4,410 2,412 449 NAREIT FFO $ 205,338 $ 174,051 $ 157,337 Adjustments: Net loss on sale of non-real assets 2,421 267 595 Acquisition, litigation, and other 32,511 51,578 36,306 Goodwill and other non-core impairment 3,209 — 2,606 Share-based compensation expense, IPO grants — 163 972 Loss on debt extinguishment, modifications, and termination of derivative instruments 3,217 5,689 9,975 Bridge loan commitment fee — — 2,438 Foreign currency exchange loss 975 610 45,278 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 574 439 194 Core FFO 248,983 232,797 255,701 Adjustments: Amortization of deferred financing costs and pension withdrawal liability 4,833 4,425 5,147 Non-real estate asset impairment 764 1,560 — Amortization of below/above market leases 2,131 2,261 152 Straight-line net rent 747 (216) (628) Deferred income taxes benefit (22,561) (9,147) (13,732) Share-based compensation, excluding IPO grants 27,137 23,737 16,939 Non-real estate depreciation and amortization 121,275 119,656 69,474 Maintenance capital expenditures (b) (85,511) (75,965) (65,547) Our share of reconciling items related to partially owned entities 2,482 387 371 Adjusted FFO $ 300,280 $ 299,495 $ 267,877 (a) Net loss (gain) on sale of real estate, net of withholding tax include withholding tax on the sale of Sydney land which is included in income tax expense on the Consolidated Statement of Operations during 2020.
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.
Foreign Currency Foreign exchange rates as of December 31 2022 Average foreign exchange rates used to translate actual operating results for the year ended December 31 2022 Foreign exchange rates as of December 31, 2021 Prior period average foreign exchange rate used to adjust actual operating results for the year ended December 31, 2021 (1) Argentinian peso 0.006 0.008 0.010 0.011 Australian dollar 0.681 0.695 0.726 0.752 Brazilian real 0.189 0.194 0.180 0.186 British Pound 1.208 1.238 1.353 1.376 Canadian dollar 0.738 0.769 0.791 0.798 Chilean Peso 0.001 0.001 0.001 0.001 Euro 1.071 1.054 1.137 1.183 New Zealand dollar 0.635 0.636 0.683 0.707 Poland Zloty 0.229 0.225 0.248 0.259 (1) Represents the relevant average foreign exchange rates in effect in the comparable prior period applied to the activity for the current period.
Foreign Currency Spot Foreign exchange rates Average foreign exchange rates for the year ended Spot Foreign exchange rates Average foreign exchange rates for the year ended December 31, 2023 December 31, 2022 Argentinian peso 0.001 0.004 0.006 0.008 Australian dollar 0.681 0.665 0.681 0.695 Brazilian real 0.206 0.200 0.189 0.194 British pound 1.273 1.244 1.208 1.238 Canadian dollar 0.755 0.741 0.738 0.769 Chilean peso 0.001 0.001 0.001 0.001 Euro 1.104 1.081 1.071 1.054 New Zealand dollar 0.632 0.614 0.635 0.636 Polish zloty 0.254 0.238 0.229 0.225 (1) Represents the relevant average foreign exchange rates in effect in the comparable prior period applied to the activity for the current period.
Same store warehouse services revenue per throughput pallet increased 5.4% compared to the prior year primarily as a result of by our our pricing initiative and contractual rate escalations, partially offset by unfavorable foreign currency translation as previously discussed. On a constant currency basis, our same store services revenue per throughput pallet increased 7.7% compared to the prior year.
On a constant currency basis, our same store warehouse services revenue per throughput pallet increased 7.7% during the year ended December 31, 2023 as compared to the prior year. This is primarily due to our pricing initiatives and contractual rate escalations.
In order to reduce costs in our facilities, we have invested in 65 energy efficiency projects, including LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives for our fans and compressors, third party efficiency reviews and real-time monitoring of energy consumption, rapid open and close doors, and alternative-power generation technologies to improve the energy efficiency of our warehouses.
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.
We describe our accounting policy for business combinations in Note 2 to the Consolidated Financial Statements. Additionally, we have disclosed all business combinations completed during 2020 and 2021, including material measurement period adjustments for these acquisitions, in Note 3 to the Consolidated Financial Statements.
Additionally, we have disclosed all business combinations completed during 2023 and 2022 in Note 3-Business Combinations and Asset Acquisitions to the Consolidated Financial Statements. 85 Revenue Recognition We describe our revenue recognition policy in Note 2- Summary of Significant Accounting Policies to the Consolidated Financial Statements.
For selected reporting units where we use the qualitative approach, we perform a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment.
For selected reporting units where we use the qualitative approach, we perform a qualitative evaluation of events and circumstances impacting the reporting unit to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
We calculate core funds from operations, or Core FFO, as FFO adjusted for the effects of gain or loss on the sale of non-real estate assets, acquisition, litigation and other, net, goodwill and other non-core impairment, share-based compensation expense for the IPO retention grants, loss on debt extinguishment, modifications and termination of derivative instruments, bridge loan commitment fees and foreign currency exchange loss.
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.
Historically Significant Customer For the years ended December 31, 2022, 2021, and 2020 one customer accounted for more than 10% of our total revenues, with revenues received of $264.2 million, $285.6 million and $257.3 million, respectively. The substantial majority of this customer’s business relates to our third-party managed segment.
The average foreign currency exchange rates we apply to our operating results are derived from third party reporting sources for the periods indicated. Historically Significant Customer For the years ended December 31, 2022, and 2021 one customer accounted for more than 10% of our total revenues, with revenues received of $264.2 million and $285.6 million respectively.
The “same store” pool is also adjusted to remove properties that were sold or entering development subsequent to the beginning of the current calendar year.
January 1, 2022) and are still owned by us as of the end of the current reporting period, unless the property is under development. The “same store” pool is also adjusted to remove properties that were sold or entered development subsequent to the beginning of the current calendar year.
We have also performed fine-tuning of our refrigeration systems, deployed efficient energy management practices, such as time-of-use and awareness, and have increased our participation in Power Demand Response programs with some of our power suppliers. These initiatives have allowed us to reduce our consumption of kilowatt hours and energy spend.
We have also fine tuned our refrigeration systems, implemented energy management practices, and increased our participation in power demand response programs with some of our power suppliers. These initiatives have allowed us to reduce our energy consumption and spend. Lastly, we have implemented rainwater harvesting in certain locations to reduce water demand and wastewater treatment costs while managing stormwater runoff.
Additionally, during the years ended 2022 and 2021, we recorded $2.5 million and $2.7 million, respectively, for the amortization of fees paid for the interest rate swaps terminated during 2020. Foreign currency exchange loss, net.
Additionally, during each of the years ended 2023 and 2022, we recorded $2.5 million for the amortization of fees paid for the interest rate swaps terminated during 2020. The amortization for these fees will end in August 2024. Loss from investments in partially owned entities .
We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S.
NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S.
We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP. Presentation A detailed discussion of the 2022 year-over-year changes can be found below and a detailed discussion of the 2021 year-over-year changes can be found in “Item 7.
We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP. Components of Our Results of Operations Warehouse Rent, storage, and warehouse services . Our primary source of revenues are rent, storage, and warehouse services fees.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+1 added−0 removed13 unchanged
Biggest changeNet assets in international operations were approximately $1.3 billion as of December 31, 2022 and 2021. The effect of a change in foreign exchange rates on our net investment in foreign subsidiaries is reflected in the Accumulated other comprehensive (loss) income component of equity of our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Biggest changeThe effect of a change in foreign exchange rates on our net investment in foreign subsidiaries is reflected in the Accumulated other comprehensive loss component of equity of our Consolidated Financial Statements included in this Annual Report on Form 10-K.
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) income on the Consolidated Balance Sheet. On May 28, 2021, we closed on the Bowman acquisition.
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.
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) income. 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. On December 30, 2020, we closed on the Agro acquisition, which conducts a significant amount of its operations in Europe.
The remeasurement on the Series D and E Senior Unsecured Notes will be recorded to Accumulated other comprehensive (loss) income. 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.
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.
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) income. On November 15, 2021, we closed on the Lago acquisition.
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.
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) income.
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.
During 2022, we have funded various international capital requirements including the De Bruyn 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 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.
As of December 31, 2022, the net monetary assets of the Argentina subsidiary were immaterial and, therefore, a 10% unfavorable change in the exchange rate would not be material.
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.
A 100 basis point decrease in market interest rates would result in a decrease in interest of approximately $5.0 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.
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.
A portion of 94 this Revolver 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) income.
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.
As of December 31, 2022, we had $645.0 million of outstanding USD-denominated variable-rate debt and $250 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 0.95%.
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%.
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 4.40% and all of our outstanding CAD-denominated term loan at a weighted average rate of 4.54%.
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%.
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 $136.2 million as of December 31, 2022. 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 $137.9 million as of December 31, 2023. Our operations in Argentina are reported using highly inflationary accounting.
Additionally, the operating income of the Argentina subsidiary was less than 1.0% of our consolidated operating income for the years ended December 31, 2022 and 2021. 93 For the years ended December 31, 2022 and 2021, revenues from our international operations were $654.3 million and $666.7 million, respectively, which represented 22.4% and 24.6% of our consolidated revenues, respectively.
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.
At December 31, 2022, one-month term and daily SOFR was approximately 4.30%, one-month CDOR was approximately 4.67%, one-month SONIA was at 3.43%, and one-month AUD BBSW was approximately 3.07%, one-month EURIBOR was approximately 1.90% and one-month BKBM was approximately 4.37%, 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 $5.0 million.
At 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.
As a result, the only borrowings that we have exposure to changes in interest rates as of December 31, 2022 consist of our borrowings under our Revolving Credit Facility including: $225.0 million, C$50.0 million, €35.5 million, £76.5 million, AUD146.0 million and NZD$13.0 million.
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
For the years ended December 31, 2023 and 2022, net assets in international operations were approximately $1.1 billion and $1.3 billion, respectively.

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