~~As of May 1, 2018, there were 142,582,164 common shares of beneficial interest $.01 par value per share, outstanding.~~



TABLE OF CONTENTS
			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3660
Item 3. Quantitative and Qualitative Disclosures About Market Risk			62101
Item 4. Controls and Procedures			62101

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			63103
Item 1A. Risk Factors			63103
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			63103
Item 3. Defaults Upon Senior Securities			63103
Item 4. Mine Safety Disclosures			63103
Item 5. Other Information			63103
Item 6. Exhibits			64104

SIGNATURES			65105

CAUTIONARY STATEMENT ~~REGADING~~REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include the following:

•uncertainties and risks related to public health crises, including the ongoing COVID-19 pandemic;

•adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry;

•general economic conditions;

•risks associated with the ownership of real estate and temperature-controlled warehouses in particular;

~~defaults~~•acquisition risks, including the failure to identify or ~~non-renewals~~complete attractive acquisitions or the failure of ~~contracts~~acquisitions to perform in accordance with ~~customers;~~projections and to realize anticipated cost savings and revenue improvements;

~~potential bankruptcy or insolvency of our customers;~~

~~uncertainty of revenues, given the nature of our customer contracts;~~

~~increased interest rates and operating costs;~~

•our failure to ~~obtain necessary outside financing;~~

~~risks~~realize the intended benefits from our recent acquisitions including synergies, or disruptions to our plans and operations or unknown or contingent liabilities related to ~~or restrictions contained in,~~ our ~~debt financing;~~recent acquisitions;

~~decreased storage rates or increased vacancy rates;~~

~~difficulties in identifying properties to be acquired and completing acquisitions;~~

•risks related to expansions of existing properties and developments of new properties, including failure to meet budgeted or stabilized returns within expected time frames, or at all, in respect thereof;

~~acquisition risks, including the~~•a failure of ~~such acquisitions~~our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions or loss of confidential information;

•risks related to ~~perform~~privacy and data security concerns, and data collection and transfer restrictions and related foreign regulations;

•uncertainty of revenues, given the nature of our customer contracts;

•defaults or non-renewals of significant customer contracts, including as a result of the ongoing COVID-19 pandemic;

•increased interest rates and operating costs, including as a result of the ongoing COVID-19 pandemic;

•our failure to obtain necessary outside financing;

•risks related to, or restrictions contained in, ~~accordance with projections;~~our debt financings;

•decreased storage rates or increased vacancy rates;

•risks related to current and potential international operations and properties;

•difficulties in expanding our operations into new markets, including international markets;

•risks related to the partial ownership of properties, including as a result of our lack of control over such investments and the failure of such entities to perform in accordance with projections;

•our failure to maintain our status as a REIT;

~~uncertainties and risks related to natural disasters and global climate change;~~

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently or previously owned by us;

•financial market fluctuations;

•actions by our competitors and their increasing ability to compete with us;

•labor and power costs;

•labor shortages;

•changes in applicable governmental regulations and tax legislation, including in the international markets;

•additional risks with respect to the addition of European operations and properties;

Table of Contents

•changes in real estate and zoning laws and increases in real property tax rates;

•the competitive environment in which we operate;

•our relationship with our employees, ~~including~~ the occurrence of any work stoppages or any disputes under our collective bargaining ~~agreements;~~agreements and employment related litigation;

•liabilities as a result of our participation in multi-employer pension plans;

•losses in excess of our insurance coverage;

•the potential liabilities, costs and regulatory impacts associated with our in-house trucking services and the potential disruptions associated with our use of third-party trucking service providers to provide transportation services to our customers;

•the cost and time requirements as a result of our operation as a publicly traded REIT;

~~the concentration of ownership by funds affiliated with The Yucaipa Companies, the Goldman Sachs Group, Inc., and the Fortress Investment Group, LLC;~~

•changes in foreign currency exchange rates; ~~and~~

•the impact of anti-takeover provisions in our constituent documents and under Maryland law, which could make an acquisition of us more difficult, limit attempts by our shareholders to replace our trustees and affect the price of our common ~~shares.~~shares of beneficial interest, $0.01 par value per share, or our common shares;

•the potential dilutive effect of our common share offerings; and

•risks related to any forward sale agreement, including the 2018 forward sale agreement, the 2020 ATM forward sale agreements and the 2020 forward sale agreements, or, collectively, our forward sale agreements, including substantial dilution to our earnings per share or substantial cash payment obligations.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks included in other sections of this Quarterly Report on Form 10-Q. Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,”

~~“assumptions,~~ “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” and similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements included in this ~~prospectus~~Quarterly Report on Form 10-Q include, among others, statements about our expected acquisitions and expected expansion and development pipeline and our targeted return on invested capital on expansion and development opportunities. We qualify any forward-looking statements entirely by these cautionary factors. Other risks, uncertainties and factors, including those discussed under “Risk Factors”, in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2020, could cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

As used in this report, unless the context otherwise requires, references to “we,” “us,” ~~“our”~~“our,” “our Company” and “the Company” refer to Americold Realty Trust, a Maryland real estate investment trust, and its consolidated subsidiaries, including Americold Realty Operating Partnership, L.P., a Delaware limited partnership and the subsidiary through which we conduct our business, which we refer to as “our ~~operating partnership,~~Operating Partnership” or “the Operating Partnership.” ~~and references to “common shares”~~

In addition, unless otherwise stated herein, when we refer to “cubic feet” in one of our ~~common shares of beneficial interest, $0.01 par value per share.~~temperature-controlled facilities, we refer to refrigerated cubic feet (as opposed to total cubic feet, refrigerated and otherwise) therein.

Table of Contents

~~PART I - FINANCIAL INFORMATION~~

~~Item 1. Financial Statements~~


Americold Realty Trust and Subsidiaries	Americold Realty Trust and Subsidiaries						Americold Realty Trust and Subsidiaries
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Unaudited)							Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares and per share amounts)	(In thousands, except shares and per share amounts)						(In thousands, except shares and per share amounts)
	March 31, 2018			December 31, 2017				June 30, 2021		December 31, 2020
	Unaudited
Assets							Assets
Property, plant, and equipment:
Property, buildings and equipment:							Property, buildings and equipment:
Land	$	389,565		$	389,443		Land	$	705,862	$	662,885
Buildings and improvements	1,887,206			1,865,727			Buildings and improvements	3,847,631		4,004,824
Machinery and equipment	549,908			555,453			Machinery and equipment	1,274,690		1,177,572
Assets under construction							Assets under construction	382,730		303,531
	2,826,679			2,810,623				6,210,913		6,148,812
Accumulated depreciation and depletion	(1,030,240		)	(1,010,903		)
Property, plant, and equipment – net	1,796,439			1,799,720
Capitalized leases:
Accumulated depreciation							Accumulated depreciation	(1,504,758)		(1,382,298)
Property, buildings and equipment – net							Property, buildings and equipment – net	4,706,155		4,766,514

Operating lease right-of-use assets							Operating lease right-of-use assets	352,880		291,797
Accumulated depreciation – operating leases							Accumulated depreciation – operating leases	(40,202)		(24,483)
Operating leases – net							Operating leases – net	312,678		267,314

Financing leases:							Financing leases:
Buildings and improvements	16,827			16,827			Buildings and improvements	24,761		60,513
Machinery and equipment	59,619			59,389			Machinery and equipment	148,408		109,416
	76,446			76,216				173,169		169,929
Accumulated depreciation	(42,996		)	(41,051		)
Capitalized leases – net	33,450			35,165
Cash and cash equivalents	193,868			48,873
Restricted cash	19,394			21,090
Accounts receivable – net of allowance of $5,804 and $5,309 at March 31, 2018 and December 31, 2017, respectively	178,649			200,006
Accumulated depreciation – financing leases							Accumulated depreciation – financing leases	(53,785)		(40,937)
Financing leases – net							Financing leases – net	119,384		128,992

Cash, cash equivalents and restricted cash							Cash, cash equivalents and restricted cash	316,077		621,051

Accounts receivable – net of allowance of $15,197 and $12,286 at June 30, 2021 and December 31, 2020, respectively							Accounts receivable – net of allowance of $15,197 and $12,286 at June 30, 2021 and December 31, 2020, respectively	325,440		324,221
Identifiable intangible assets – net	26,239			26,645			Identifiable intangible assets – net	875,038		797,423
Goodwill	188,096			188,169			Goodwill	1,018,288		794,335
Investments in partially owned entities	15,935			15,942			Investments in partially owned entities	42,742		44,907
Other assets	41,685			59,287			Other assets	107,518		86,394
Total assets	$	2,493,755		$	2,394,897		Total assets	$	7,823,320	$	7,831,151
Liabilities, Series B Preferred Shares and shareholders’ equity (deficit)

Liabilities and equity							Liabilities and equity
Liabilities:							Liabilities:
Borrowings under revolving line of credit	$	—		$	—		Borrowings under revolving line of credit	$	139,105	$	0
Accounts payable and accrued expenses	232,737			241,259			Accounts payable and accrued expenses	563,566		552,547
Construction loan - net of deferred financing costs $179 at December 31, 2017	—			19,492
Mortgage notes and term loans - net of discount and deferred financing costs of $15,935 and $31,996, in the aggregate, at March 31, 2018 and December 31, 2017, respectively	1,398,227			1,721,958
Mortgage notes, senior unsecured notes and term loans – net of unamortized deferred financing costs of $11,994 and $15,952, in the aggregate, at June 30, 2021 and December 31, 2020, respectively							Mortgage notes, senior unsecured notes and term loans – net of unamortized deferred financing costs of $11,994 and $15,952, in the aggregate, at June 30, 2021 and December 31, 2020, respectively	2,427,164		2,648,266
Sale-leaseback financing obligations	120,911			121,516			Sale-leaseback financing obligations	184,515		185,060
Capitalized lease obligations	36,078			38,124
Financing lease obligations							Financing lease obligations	111,703		125,926
Operating lease obligations							Operating lease obligations	285,715		269,147
Unearned revenue	18,200			18,848			Unearned revenue	20,344		19,209
Pension and postretirement benefits	16,105			16,756			Pension and postretirement benefits	7,880		9,145
Deferred tax liability - net	20,423			21,940
Multi-Employer pension plan withdrawal liability	9,086			9,134
Deferred tax liability – net							Deferred tax liability – net	208,799		220,502
Multi-employer pension plan withdrawal liability							Multi-employer pension plan withdrawal liability	8,354		8,528
Total liabilities	1,851,767			2,209,027			Total liabilities	3,957,145		4,038,330
Commitments and Contingencies (Note 13)
Preferred shares of beneficial interest, $0.01 par value – authorized 375,000 Series B Cumulative Convertible Voting and Participating Preferred Shares; aggregate liquidation preference of $375,000; zero and 375,000 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	—			372,794
Shareholders’ equity (deficit):
Preferred shares of beneficial interest, $0.01 par value – authorized 1,000 Series A Cumulative Non-Voting Preferred Shares; aggregate liquidation preference of $125; zero and 125 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	—			—
Common shares of beneficial interest, $0.01 par value – authorized 250,000,000 shares; 142,513,448 and 69,370,609 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	1,425			694
Commitments and contingencies (Note 14)							Commitments and contingencies (Note 14)	0		0
Equity							Equity
Shareholders’ equity:							Shareholders’ equity:
Common shares of beneficial interest, $0.01 par value – 500,000,000 and 325,000,000 authorized shares; 261,015,053 and 251,702,603 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively							Common shares of beneficial interest, $0.01 par value – 500,000,000 and 325,000,000 authorized shares; 261,015,053 and 251,702,603 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	2,610		2,517
Paid-in capital	1,255,094			394,082			Paid-in capital	4,900,398		4,687,823
Accumulated deficit and distributions in excess of net earnings	(613,363		)	(581,470		)	Accumulated deficit and distributions in excess of net earnings	(1,036,987)		(895,521)
Accumulated other comprehensive loss	(1,168		)	(230		)	Accumulated other comprehensive loss	(4,628)		(4,379)
Total shareholders’ equity (deficit)	641,988			(186,924		)
Total liabilities, Series B Preferred Shares and shareholders’ equity (deficit)	$	2,493,755		$	2,394,897
Total shareholders’ equity							Total shareholders’ equity	3,861,393		3,790,440
Noncontrolling interests:							Noncontrolling interests:
Noncontrolling interests in operating partnership and consolidated joint venture							Noncontrolling interests in operating partnership and consolidated joint venture	4,782		2,381
Total equity							Total equity	3,866,175		3,792,821

Total liabilities and equity							Total liabilities and equity	$	7,823,320	$	7,831,151
See accompanying notes to condensed consolidated financial statements.							See accompanying notes to condensed consolidated financial statements.

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
Three Months Ended March 31,
2018 2017
Revenues:
Rent, storage, and warehouse services revenues $ 286,517
$ 275,807
Third-party managed services 63,876
58,367
Transportation services 38,345
36,181
Other revenues 2,403
2,559
Total revenues 391,141
372,914
Operating expenses:
Rent, storage, and warehouse services cost of operations 196,947
192,287
Third-party managed services cost of operations 60,099
55,379
Transportation services cost of operations 34,751
32,628
Cost of operations related to other revenues 2,057
1,656
Depreciation, depletion, and amortization 29,408
29,408
Selling, general and administrative 31,947
24,770
Total operating expenses 355,209
336,128

Operating income 35,932
36,786

Other (expense) income:
Loss from partially owned entities (139 ) (27 )
Interest expense (24,495 ) (27,727 )
Interest income 623
257
Loss on debt extinguishment and modification (21,385 ) (171 )
Foreign currency exchange gain (loss) 680
(2,773 )
Other income (expense), net 56
(467 )
(Loss) income before income tax (8,728 ) 5,878
Income tax (expense) benefit:
Current (1,067 ) (2,242 )
Deferred 1,156
748
Total income tax benefit (expense) 89
(1,494 )

Net (loss) income $ (8,639 ) $ 4,384
Less distributions on preferred shares of beneficial interest - Series A (1 ) —
Less distributions on preferred shares of beneficial interest - Series B (1,817 ) (7,109 )
Less accretion on preferred shares of beneficial interest – Series B —
(220 )
Net loss attributable to common shares of beneficial interest $ (10,457 ) $ (2,945 )

Weighted average common shares outstanding – basic 124,433
69,931
Weighted average common shares outstanding – diluted 124,433
69,931

Net loss per common share of beneficial interest - basic $ (0.08 ) $ (0.04 )
Net loss per common share of beneficial interest - diluted $ (0.08 ) $ (0.04 )

Distributions declared per common share of beneficial interest $ 0.15
$ 0.07

See accompanying notes to condensed consolidated financial statements.

Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In thousands)
Three Months Ended March 31,
2018 2017
Net (loss) income $ (8,639 ) $ 4,384
Other comprehensive (loss) income - net of tax:
Adjustment to accrued pension liability 499
729
Change in unrealized net (loss) gain on foreign currency (1,473 ) 3,235
Unrealized gain (loss) on cash flow hedge derivatives 36
(348 )
Other comprehensive (loss) income (938 ) 3,616

Total comprehensive (loss) income $ (9,577 ) $ 8,000

See accompanying notes to condensed consolidated financial statements.

Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited)
(In thousands, except shares)

Preferred Shares of
Beneficial Interest Common Shares of Accumulated Deficit and Distributions in Excess of Net Earnings Accumulated Other Comprehensive Loss
Series A Beneficial Interest
Number of Shares Par Value Number of Shares Par Value Paid-in Capital
Total
Balance - December 31, 2017 125
$ —
69,370,609
$ 694
$ 394,082
$ (581,470 ) $ (230 ) $ (186,924 )
Net loss —
—
—
—
—
(8,639 ) —
(8,639 )
Other comprehensive loss —
—
—
—
—
—
(938 ) (938 )
Redemption and distributions on preferred shares of beneficial interest – Series A (125 ) —
—
—
(133 ) (1 ) —
(134 )
Distributions on preferred shares of beneficial interest – Series B —
—
—
—
—
(1,817 ) —
(1,817 )
Distributions on common shares —
—
—
—
—
(21,436 ) —
(21,436 )
Stock-based compensation expense, net of exercise (Stock Options and Restricted Stock Units) —
—
125,763
1
1,579
—
—
1,580
Stock-based compensation expense (modification of Restricted Stock Units) —
—
—
—
2,600
—
—
2,600
Warrants exercise —
—
6,426,818
64
(64 ) —
—
—
Issuance of common shares —
—
33,350,000
334
484,571
—
—
484,905
Conversion of mezzanine Series B Preferred shares —
—
33,240,258
332
372,459
—
—
372,791
Balance - March 31, 2018 —
$ —
142,513,448
$ 1,425
1,255,094
$ (613,363 ) $ (1,168 ) $ 641,988


Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues:
Rent, storage and warehouse services	$	503,734	$	372,411	$	989,185	$	753,479
Third-party managed services	72,173		72,954		145,245		137,875
Transportation services	78,800		34,861		155,072		70,778
Other	0		2,296		0		4,459
Total revenues	654,707		482,522		1,289,502		966,591
Operating expenses:
Rent, storage and warehouse services cost of operations	359,355		252,279		698,625		506,574
Third-party managed services cost of operations	70,480		69,655		139,170		130,807
Transportation services cost of operations	69,550		30,089		139,119		61,201
Cost of operations related to other revenues	33		2,161		59		4,269
Depreciation and amortization	84,459		52,399		161,670		104,003
Selling, general and administrative	42,475		32,340		87,527		69,233
Acquisition, litigation and other	3,922		2,801		24,673		4,489
Impairment of long-lived assets	1,528		3,667		1,528		3,667
Gain from sale of real estate	0		(19,414)		0		(21,875)
Total operating expenses	631,802		425,977		1,252,371		862,368

Operating income	22,905		56,545		37,131		104,223

Other income (expense):
Interest expense	(26,579)		(23,178)		(52,535)		(47,048)
Interest income	191		261		415		848

Loss on debt extinguishment, modifications and termination of derivative instruments	(925)		0		(4,424)		(781)
Foreign currency exchange (loss) gain, net	(140)		315		33		(177)
Other expense, net	184		44		689		915

Loss from investments in partially owned entities	(61)		(129)		(761)		(156)
(Loss) income before income tax benefit (expense)	(4,425)		33,858		(19,452)		57,824
Income tax (expense) benefit
Current	(2,406)		(2,163)		(3,617)		(4,720)
Deferred	(6,568)		967		(4,566)		3,069
Total income tax expense	(8,974)		(1,196)		(8,183)		(1,651)

Net (loss) income	$	(13,399)	$	32,662	$	(27,635)	$	56,173
Net (loss) income attributable to non controlling interests	(29)		0		149		0
Net (loss) income attributable to Americold Realty Trust	$	(13,370)	$	32,662	$	(27,784)	$	56,173

Weighted average common shares outstanding – basic	253,213		201,787		253,076		201,294
Weighted average common shares outstanding – diluted	253,213		205,298		253,076		204,587

Net (loss) income per common share of beneficial interest - basic	$	(0.05)	$	0.16	$	(0.11)	$	0.28
Net (loss) income per common share of beneficial interest - diluted	$	(0.05)	$	0.16	$	(0.11)	$	0.27

See accompanying notes to condensed consolidated financial statements.

Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Three Months Ended March 31,
2018 2017
Operating activities:
Net (loss) income $ (8,639 ) $ 4,384
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion, and amortization 29,408
29,408
Amortization of deferred financing costs and debt discount 1,674
2,023
Amortization of below market leases 38
38
Loss on debt extinguishment and modification, non-cash 21,105
171
Foreign exchange (gain) loss (680 ) 2,773
Loss from partially owned entities 139
27
Stock-based compensation expense (Stock Options and Restricted Stock Units) 1,918
587
Stock-based compensation expense (modification of Restricted Stock Units) 2,600
—
Deferred tax benefit (1,156 ) (748 )
Gain on sale of other assets (137 ) (102 )
Provision for doubtful accounts receivable 103
158
Changes in operating assets and liabilities:
Accounts receivable 20,115
16,364
Accounts payable and accrued expenses (23,810 ) (12,281 )
Other 7,683
2,882
Net cash provided by operating activities 50,361
45,684
Investing activities:
Proceeds from the sale of property, plant, and equipment 352
107
Additions to property, plant, and equipment and intangible assets (28,271 ) (52,347 )
Net cash used in investing activities (27,919 ) (52,240 )
Financing activities:
Redemption and distributions paid on preferred shares of beneficial interest – Series A (134 ) —
Distributions paid on preferred shares of beneficial interest – Series B (1,817 ) —
Distributions paid on common shares (1,291 ) —
Proceeds from revolving line of credit —
15,000
Repayment on revolving line of credit —
(14,000 )
Payment on Multi-Employer pension plan withdrawal obligation (114 ) —
Payment of underwriters' costs (5,750 ) —
Reimbursement of underwriters' costs 5,750
—
Repayment of sale-leaseback financing obligations (605 ) (487 )
Repayment of capitalized lease obligations (2,374 ) (1,786 )
Payment of debt issuance costs (8,676 ) (2,653 )
Repayment of term loan, mortgage notes and construction loans (883,556 ) (7,375 )
Proceeds from term loan 525,000
—
Net proceeds from initial public offering 493,557
—
Proceeds from construction loans 1,097
—
Net cash provided by (used in) financing activities 121,087
(11,301 )
Net increase (decrease) in cash, cash equivalents and restricted cash 143,529
(17,857 )
Effect of foreign currency translation on cash, cash equivalents and restricted cash (230 ) 704
Cash, cash equivalents and restricted cash:
Beginning of period 69,963
62,930
End of period $ 213,262
$ 45,777
Supplemental disclosures of cash flows information:
Acquisition of fixed assets under capitalized lease obligations $ 330
$ 3,569
Interest paid – net of amounts capitalized and defeasement costs $ 23,068
$ 26,284
Income taxes paid – net of refunds $ 1,262
$ 1,415
Acquisition of property, plant, and equipment on accrual $ 18,210
$ 3,810

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)
(In thousands)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net (loss) income	$	(13,399)	$	32,662	$	(27,635)	$	56,173
Other comprehensive income (loss) - net of tax:
Adjustment to accrued pension liability	396		412		777		826
Change in unrealized net gain (loss) on foreign currency	7,026		10,337		(3,656)		(15,210)
Unrealized gain (loss) on cash flow hedge	1,609		(3,494)		2,630		(7,533)
Other comprehensive (loss) income - net of tax	9,031		7,255		(249)		(21,917)
Other comprehensive income attributable to noncontrolling interests	20		0		8		0
Total comprehensive (loss) income attributable to Americold Realty Trust	$	(4,348)	$	39,917	$	(27,876)	$	34,256

See accompanying notes to condensed consolidated financial statements.

~~Reconciliation~~

Table of ~~cash, cash equivalents and restricted cash reported in~~Contents


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

	Common Shares of Beneficial Interest					Accumulated Deficit and Distributions in Excess of Net Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests in Operating Partnership and Consolidated Joint Venture

	Number of Shares	Par Value		Paid-in Capital
												Total
Balance - December 31, 2020	251,702,603	$	2,517	$	4,687,823	$	(895,521)	$	(4,379)	$	2,381	$	3,792,821
Net (loss) income	—	—		—		(14,414)		—		178		(14,236)
Other comprehensive loss	—	—		—		–		(9,280)		(12)		(9,292)
Distributions on common shares, restricted stock and OP units	—	—		—		(55,909)		—		(120)		(56,029)
Share-based compensation expense	—	—		4,075		—		—		949		5,024

Common share issuance related to share-based payment plans, net of shares withheld for employee taxes	816,915	8		(10,089)		—		—		—		(10,081)

Balance - March 31, 2021	252,519,518	$	2,525	$	4,681,809	$	(965,844)	$	(13,659)	$	3,376	$	3,708,207
Net loss	—	—		—		(13,370)		—		(29)		(13,399)
Other comprehensive income	—	—		—		–		9,031		20		9,051
Distributions on common shares, restricted stock and OP units	—	—		—		(57,773)		—		(124)		(57,897)
Share-based compensation expense	—	—		3,922		—		—		1,539		5,461
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes	66,431	1		(108)		—		—		—		(107)
Issuance of common shares	8,429,104	84		214,775		—		—		—		214,859

Balance - June 30, 2021	261,015,053	$	2,610	$	4,900,398	$	(1,036,987)	$	(4,628)	$	4,782	$	3,866,175

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	Common Shares of Beneficial Interest					Accumulated Deficit and Distributions in Excess of Net Earnings		Accumulated Other Comprehensive Loss

	Number of Shares	Par Value		Paid-in Capital
										Total
Balance - December 31, 2019	191,799,909	$	1,918	$	2,582,087	$	(736,861)	$	(14,126)	$	1,833,018
Net income	—	—		—		23,511		—		23,511
Other comprehensive loss	—	—		—		—		(29,172)		(29,172)
Distributions on common shares, restricted stock and OP units	—	—		—		(42,568)		—		(42,568)
Share-based compensation expense	—	—		4,298		—		—		4,298

Common share issuance related to share-based payment plans, net of shares withheld for employee taxes	216,056	2		(1,508)		—		—		(1,506)
Issuance of common shares	8,250,000	83		233,512		—		—		233,595
Cumulative effect of accounting change(1)	—	—		—		(500)		—		(500)
Balance - March 31, 2020	200,265,965	$	2,003	$	2,818,389	$	(756,418)	$	(43,298)	$	2,020,676
Net income	—	—		—		32,662		—		32,662
Other comprehensive income	—	—		—		—		7,255		7,255
Distributions on common shares of beneficial interest	—	—		—		(43,271)		—		(43,271)
Share-based compensation expense	—	—		4,449		—		—		4,449

Common share issuance related to share-based payment plans, net of shares withheld for employee taxes	255,311	2		2,200		—		—		2,202
Issuance of common shares	3,094,431	31		107,002		—		—		107,033

Balance - June 30, 2020	203,615,707	$	2,036	$	2,932,040	$	(767,027)	$	(36,043)	$	2,131,006

(1) Refer to Note 2 to the Condensed Consolidated Financial Statements for further discussion of the adoption of ASC 326.

See accompanying notes to condensed consolidated ~~balance sheets to the ending cash, cash equivalents and restricted cash balances above:~~financial statements.

As of March 31,
2018 2017
Cash and cash equivalents $ 193,868
$ 26,946
Restricted cash 19,394
18,831
Total cash, cash equivalents and restricted cash $ 213,262
$ 45,777

See accompanying notes to condensed consolidated financial statements.

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
	Six Months Ended June 30,
	2021		2020
Operating activities:
Net (loss) income	$	(27,635)	$	56,173
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	161,670		104,003
Amortization of deferred financing costs and pension withdrawal liability	2,233		2,742
Amortization of above/below market leases	401		76
Loss on debt extinguishment, modifications and termination of derivative instruments	4,301		542
Foreign exchange (gain) loss	(33)		177
Loss from investments in partially owned entities	761		156


Share-based compensation expense	10,498		8,730
Deferred income tax benefit	4,566		(3,069)
Gain from sale of real estate	0		(21,875)
Gain on sale of assets	(475)		(420)
Impairment of long-lived assets	1,528		3,667
Provision for doubtful accounts receivable	2,910		3,554
Changes in operating assets and liabilities:
Accounts receivable	(1,775)		13,364
Accounts payable and accrued expenses	(14,332)		5,028
Other	(16,865)		(8,868)
Net cash provided by operating activities	127,753		163,980
Investing activities:

Proceeds from sale of investments in partially owned entities	596		0
Investment in partially owned entities	(6,260)		(26,197)
Proceeds from sale of property, buildings and equipment	1,063		69,051
Proceeds from the settlement of net investment hedge	0		3,034
Business combinations, net of cash acquired	(215,329)		(315,668)

Additions to property, buildings and equipment	(207,292)		(173,245)
Purchase of noncontrolling interest holders share in consolidated joint venture	(11,600)		0
Net cash used in investing activities	(438,822)		(443,025)
Financing activities:


Distributions paid on common shares, restricted stock units and noncontrolling interests in Operating Partnership	(110,813)		(80,976)
Proceeds from stock options exercised	5,191		5,882
Remittance of withholding taxes related to employee share-based transactions	(15,791)		(5,650)
Proceeds from revolving line of credit	210,841		186,753
Repayment on revolving line of credit	(70,000)		(177,075)



Repayment of sale-leaseback financing obligations	(1,184)		(1,785)
Repayment of financing lease obligations	(19,337)		(8,853)
Payment of debt issuance costs	(3,110)		(8,345)
Repayment of term loan and mortgage notes	(203,493)		(53,342)
Proceeds from term loan	0		177,075

Net proceeds from issuance of common shares	214,775		340,628


Net cash provided by financing activities	7,079		374,312
Net (decrease) increase in cash, cash equivalents and restricted cash	(303,990)		95,267
Effect of foreign currency translation on cash, cash equivalents and restricted cash	(984)		(4,040)
Cash, cash equivalents and restricted cash:
Beginning of period	621,051		240,613
End of period	$	316,077	$	331,840

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
(In thousands)
	Six Months Ended June 30,
	2021		2020
Supplemental disclosures of non-cash investing and financing activities:


Addition of property, buildings and equipment on accrual	$	63,587	$	25,607
Addition of fixed assets under financing lease obligations	$	11,553	$	23,505
Addition of fixed assets under operating lease obligations	$	3,368	$	510

Supplemental cash flow information:
Interest paid – net of amounts capitalized	$	43,328	$	46,877
Income taxes paid – net of refunds	$	6,147	$	1,405
















	As of June 30,
	2021		2020
Allocation of purchase price to business combinations:
Land	$	17,245	$	33,829
Buildings and improvements	97,448		127,868
Machinery and equipment	19,073		40,105
Assets under construction	191		308
Operating and financing lease right-of-use assets	28,785		926
Cash and cash equivalents	6,107		1,997

Accounts receivable	3,796		5,271
Goodwill	42,579		66,950
Acquired identifiable intangible assets:


Customer relationships	52,003		78,286

Other assets	482		120
Accounts payable and accrued expenses	(5,527)		(2,282)

Operating and financing lease obligations	(20,467)		(590)
Unearned revenue	(84)		(607)

Deferred tax liability	(20,195)		(34,516)

Total consideration	$	221,436	$	317,665

See accompanying notes to condensed consolidated financial statements.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. General

The Company

Americold Realty Trust, together with its subsidiaries (ART, the Company, or we), is a real estate investment trust (REIT) organized under Maryland law. The Company is the world’s largest publicly traded REIT focused on the ownership, operation and development of temperature-controlled warehouses. The Company is organized as a self-administered and self-managed REIT with proven operating, acquisition and development experience. As of June 30, 2021, we operated a global network of 246 temperature-controlled warehouses encompassing over 1.4 billion cubic feet, with 200 warehouses in North America, 27 in Europe, 16 warehouses in Asia-Pacific, and 3 warehouses in South America. In addition, we hold 2 minority interests in Brazilian-based joint ventures, one with SuperFrio, which owns or operates 33 temperature-controlled warehouses and one with Comfrio, which owns or operates 24 temperature-controlled warehouses.

During 2010, the Company formed a Delaware limited partnership, Americold Realty Operating Partnership, L.P. (the Operating Partnership), and transferred substantially all of its interests in entities and associated assets and liabilities to the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT or an UPREIT structure. The REIT is the sole general partner of the Operating Partnership, owning ~~100%~~approximately 99% of the ~~common general~~ partnership ~~interest~~interests as of ~~March 31, 2018.~~June 30, 2021. Americold Realty Operations, Inc., a Delaware corporation and a wholly-owned subsidiary of the REIT, is a limited partner of the Operating Partnership, owning less than 1% of the partnership interests as of June 30, 2021. Additionally, the aggregate partnership interests of all other limited partners was less than 1% as of June 30, 2021. As the sole general partner of the Operating Partnership, the REIT has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. The limited partners of the Operating Partnership do not have rights to replace Americold Realty Trust as the general partner nor do they have participating rights, although they do have certain protective rights. The terms “Americold,” the “Company,” “we,” “our” and “us” refer to Americold Realty Trust and all of its consolidated subsidiaries, including the Operating Partnership.

The Company grants Operating Partnership Profit Units (OP Units) to certain members of the Board of Trustees and certain members of management of the Company, which are described further in Note 11. Upon vesting these units represent interests in the Operating Partnership that are not owned by Americold Realty Trust.

On March 22, 2021, the Company filed Articles of Amendment to the Company’s Amended and Restated Declaration of Trust with the State Department of Assessments and Taxation of Maryland to increase the number of authorized common shares of beneficial interest, $0.01 par value per share, from 325,000,000 to 500,000,000. The Articles of Amendment were effective upon filing. The Company also has 25,000,000 authorized preferred shares of beneficial interest, $0.01 par value per share; however, NaN are issued or outstanding as of June 30, 2021 or December 31, 2020.

The Operating Partnership includes numerous ~~qualified REIT subsidiaries (QRSs)~~disregarded entities (“DRE”). Additionally, the Operating Partnership conducts various business activities in ~~the United States (U.S.), Australia, New Zealand, Argentina,~~North America, Europe, Asia-Pacific and ~~Canada~~South America through several ~~wholly owned~~wholly-owned taxable REIT subsidiaries (TRSs).

~~Ownership~~

On January 23, 2018, the Company completed an initial public offering of its common shares, or the IPO, in which the Company issued and sold 33,350,000 of its common shares at $16.00 per share, which generated net proceeds of approximately $493.6 million to the Company. Other significant transactions that occurred in connection with the IPO include the issuance of new senior secured credit facilities, or the 2018 Senior Secured Credit Facilities, which are described in Note 5, and the redemption of all outstanding Series A Preferred Shares and the conversion of all outstanding Series B Preferred Shares, which are described in Note 4.

Prior to the IPO, YF ART Holdings, a partnership among investment funds affiliated with The Yucaipa Companies (Yucaipa) and Fortress Investment Group, LLC (Fortress), owned approximately 100% of the Company’s common shares of beneficial interest.

As of March 31, 2018, YF ART Holdings owned approximately 38.6% of the Company's common shares. On March 8, 2018, YF ART Holdings used the proceeds from a margin loan to pay in full the outstanding preferred investment, including the preferred return thereon, of Fortress, which ceased to be a limited partner in YF ART Holdings and no longer has any economic interest therein.

The second largest shareholder in the Company is a group of investment funds of the The Goldman Sachs Group, Inc. (Goldman), which owns approximately 16.7% of the Company's common shares as of March 31, 2018.

~~Customer Information~~

The Company’s customers consist primarily of national, regional, and local food manufacturers, distributors, retailers, and food service organizations. For the three months ended March 31, 2018 and 2017, one customer accounted for more than 10% of our total revenues, with $52.3 million and $48.3 million, respectively. The substantial majority of this customer's business relates to our third-party managed segment. Of the revenues received from this customer, $48.2 million and $44.6 million represented reimbursements for certain expenses we incurred during the three months

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

Recent Capital Markets Activity

~~ended March~~At the Market (ATM) Equity Program

On April 16, 2020, the Company entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common shares through an ATM Equity Program (“the 2020 ATM Equity Program”). Sales of our common shares made pursuant to the 2020 ATM Equity Program may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. Sales may also be made on a forward basis pursuant to separate forward sale agreements. We intend to use the net proceeds from sales of our common shares pursuant to the 2020 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects.

At December 31, ~~2018 and 2017, respectively,~~2020, there were 2,429,104 shares sold under the 2020 ATM Equity Program that were ~~offset~~subject to forward sale agreements. These shares were settled for gross proceeds of $86.6 million during the three month period ended June 30, 2021. As of June 30, 2021, there were 0 forward shares outstanding under the 2020 ATM Equity Program.

On May 10, 2021, the Company 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 “2021 ATM Equity Program”). Sales of our common shares 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. Sales may also be made on a forward basis pursuant to separate forward sale agreements. We intend to use the net proceeds from sales of our common shares pursuant to the 2021 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects. During the six months ended June 30, 2021, there were 1,530,034 common shares sold under the 2021 ATM Equity Program under forward sale agreements which must be settled by ~~matching expenses included~~July 1, 2022 for gross proceeds of $59.6 million.

Universal Shelf Registration Statement

In connection with filing the ATM Equity Offering Sales Agreement on April 16, 2020, the Company and the Operating Partnership filed with the SEC an automatic shelf registration statement on Form S-3 (Registration Nos. 333-237704 and 333-237704-01) (the “Registration Statement”), registering an indeterminate amount of (i) the Company’s common shares of beneficial interest, $0.01 par value per share, (ii) the Company’s preferred shares of beneficial interest, $0.01 par value per share, (iii) depositary shares representing entitlement to all rights and preferences of fractions of the Company’s preferred shares of a specified series and represented by depositary receipts, (iv) warrants to purchase the Company’s common shares or preferred shares or depositary shares and (v) debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company.

Other Equity Forwards and Activity

The Company has 4,785,000 forward shares outstanding as of June 30, 2021 that were originally entered into in connection with its October 2020 underwritten equity offering. Additionally, during the second quarter of 2021, the Company settled its forward sale agreement of 6,000,000 shares for proceeds of $128.5 million, originally issued in connection with its September 2018 underwritten equity offering.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

Acquisitions and Investments in Joint Ventures

On May 28, 2021, the Company acquired Bowman Stores for £75.5 million, or $107.1 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our ~~third-party~~2020 Senior Unsecured Revolving Credit Facility.

On May 5, 2021, the Company acquired KMT Brrr! for $70.8 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On March 1, 2021, the Company acquired Liberty Freezers for Canadian Dollars of C$55.0 million, or $43.5 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On December 30, 2020, the Company completed the acquisition of privately-held Agro from an investor group led by funds managed by Oaktree Capital Management, L.P. (Oaktree) for consideration of $1.59 billion, including cash received of $47.5 million. This was comprised of cash consideration totaling $1.08 billion, of which $49.7 million was deferred, and the issuance of 14,166,667 common shares of beneficial interest to Oaktree and Agro management, with a fair value of $512.1 million based upon the closing share price on December 29, 2020 of $36.15. Financing lease and sale-leaseback obligations associated with the acquisition totaled $112.7 million and when added to the total consideration transferred brings the total transaction cost to approximately $1.7 billion.

On November 2, 2020, the Company acquired Hall’s Warehouse Corporation (Hall’s) for $489.2 million. The acquisition was funded using proceeds from our 2020 ATM equity forward sale agreements combined with funds drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On August 31, 2020, the Company acquired AM-C Warehouses (AM-C) for approximately $82.7 million. The acquisition was funded using cash on hand.

On August 31, 2020, the Company acquired Caspers Cold Storage (Caspers) for $25.6 million. The acquisition was funded using cash on hand.

On March 6, 2020, the Company acquired a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. (SuperFrio) for Brazil Reals of ~~operations.~~R$117.8, or approximately USD $25.7 million, inclusive of certain legal fees. The investment was funded using cash on hand.

On January 2, 2020, the Company completed the purchase of all outstanding membership interests of Newport Cold for cash consideration of $57.7 million. The acquisition was funded using cash on hand.

On January 2, 2020, the Company completed the purchase of all outstanding shares of Nova Cold for C$338.7 million ($260.6 million USD). The acquisition was funded utilizing proceeds from the settlement of our April 2019 forward sale agreement combined with cash drawn on our 2018 Senior Unsecured Revolving Credit Facility and cash on hand.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) for interim financial information, and with the rules and regulations of the ~~U.S. Securities and Exchange Commission (SEC).~~SEC. These unaudited condensed consolidated financial statements do not include all

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

disclosures associated with the Company’s consolidated annual financial statements included in its Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2020, and, accordingly, should be read in conjunction with the referenced annual report. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. ~~All~~The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries where the Company exerts control. Investments in which the Company does not have control, and is not considered to be the primary beneficiary of a Variable Interest Entity (VIE), but where the Company exercises significant ~~intercompany~~influence over the operating and financial policies of the investee, are accounted for using the equity method of accounting. Intercompany balances and transactions have been ~~eliminated in consolidation.~~eliminated. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

~~Certain prior period~~Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts ~~have been reclassified~~of (1) assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Risks and Uncertainties

The COVID-19 pandemic has caused, and is likely to ~~conform~~continue to cause severe economic, market and other disruptions worldwide, which could lead to material impairments of our assets, increases in our allowance for credit losses and changes in judgments in determining the ~~current period presentation.~~ fair value of our assets. Conditions in the bank lending, capital and other financial markets may deteriorate, and our access to capital and other sources of funding may become constrained or more costly, which could materially and adversely affect the availability and terms of future borrowings, renewals, re-financings and other capital raises.

The Company ~~has also made an immaterial classification correction~~is closely monitoring the impact of the ongoing COVID-19 pandemic on all aspects of its business in all geographies, including how it will impact its customers and business partners. While the Company did not incur significant disruptions during 2020 from the COVID-19 pandemic, the six-months ended June 30, 2021 were negatively impacted by ~~reclassifying~~COVID-19 related disruptions in (1) the food supply chain; (ii) our customers’ production of goods; and (iii) the labor market impacting availability and cost. COVID-19 restrictions in certain markets where we or our customers operate continue to impact the food supply chain and our business. As a result, occupancy and throughput volume continue at lower than normal levels experienced prior ~~period amounts~~to COVID-19. As the Company continues to protect its employees from ~~deferred revenue~~the spread of COVID-19, it is incurring elevated labor related costs and incremental health and safety supplies costs relative to its pre-pandemic experience. The Company is unable to predict the ~~allowance for doubtful accounts.~~impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties.

The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with any degree of confidence, including the scope, severity, duration and geographies of the outbreak, the actions taken to contain the COVID-19 pandemic or mitigate its impact as requested or mandated by governmental authorities or otherwise voluntarily taken by individuals or businesses, and the direct and indirect economic effects of the illness and containment measures, among others. As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

2. Summary of Significant Accounting Policies

The following disclosure regarding certain of our significant accounting policies should be read in conjunction with Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2020, which ~~may provide~~provides additional information with regard to the accounting policies set forth herein and other ~~of our~~ significant accounting policies.

~~Revenue Recognition~~Impairment of Long-Lived Assets

~~Revenues for~~For the three and six months ended June 30, 2021, the Company ~~include rent, storage~~recorded impairment charges totaling $1.5 million related to costs associated with development projects which management determined it would no longer pursue. For the three and warehouse services (collectively, Warehouse Revenue), third-party managed services for locations or logistics services managed on behalf of customers (Third-Party Managed Revenue), transportation services (Transportation Revenue), and revenue from the sale of quarry products (Other Revenue).

~~Warehouse Revenue~~

~~The Company’s customer arrangements generally include rent, storage and service elements that are priced separately. In a few instances where~~six months ended June 30, 2020, the Company ~~provides rental, storage and warehouse services under the terms of a bundled pricing structure, the Company uses a cost model to allocate the consideration~~recorded impairment charges totaling $3.7 million, related to the ~~rental~~anticipated sale of ~~temperature-controlled storage space and warehousing service deliverables.~~our quarry business, which was subsequently completed on July 1, 2020.

~~Revenues from storage and handling~~Capitalization of Costs

Project costs that are ~~recognized over the period consistent~~clearly associated with the ~~transfer~~development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, and costs of personnel working on the project. Costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred.

Capitalization of costs begins when the activities necessary to get the development project ready for its intended use commence, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the ~~service~~property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are written off. Capitalized costs are allocated to the ~~customer. Multiple contracts with~~specific components of a ~~single counterparty~~project that are ~~accounted~~benefited.

We capitalized interest of $3.5 million and $0.4 million for ~~as separate arrangements.~~

~~Third-Party Managed Revenue~~

~~The Company provides management services for which~~ the ~~contract~~three months ended June 30, 2021 and 2020, respectively. During the six months ended June 30, 2021 and 2020, we capitalized interest of $5.7 million and $1.2 million, respectively. During the three months ended June 30, 2021 and 2020, we capitalized amounts relating to insurance, property taxes, and compensation ~~arrangement includes: reimbursement~~and travel expense of ~~operating costs, fixed management fee,~~employees direct and ~~contingent performance-based fees (Managed Services). Managed Services fixed fees are recognized as revenue as~~incremental to development of properties of approximately $0.8 million and $0.2 million, respectively, and during each of the ~~management services are performed ratably~~

six months ended June 30, 2021 and 2020, we capitalized $1.4 million and $0.3 million, respectively.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

Business Combinations

For business combinations, the excess of purchase price over the ~~service period. Managed Services performance-based fees are recognized ratably over~~net fair value of assets acquired and liabilities assumed is recorded as goodwill. In an asset acquisition where we have determined that the ~~service period based on~~cost incurred differs from the ~~likelihood~~fair value of ~~achieving performance targets.~~

~~Cost reimbursements related to Managed Services arrangements are recognized as revenue as~~ the ~~services are performed~~net assets acquired, we assess whether we have appropriately determined the fair value of the assets and ~~costs are incurred. Managed Services fees~~liabilities acquired and ~~related cost reimbursements are presented~~we also confirm that all identifiable assets have been appropriately identified and recognized. After completing this assessment, we allocate the difference on a ~~gross~~relative fair value basis to all assets acquired except for financial assets (as defined in ASC 860, Transfers and Servicing), deferred taxes, and assets defined as “current” (as defined in ASC 210, Balance Sheet).

Whether the ~~Company~~acquired business is ~~the principal in the arrangement. Multiple contracts with a single counterparty are~~being accounted for as ~~separate arrangements.~~

~~Transportation Revenue~~

~~The Company records transportation revenue~~a business combination or an asset acquisition, the determination of fair values of identifiable assets and ~~expenses upon delivery~~liabilities requires estimates and the use of valuation techniques. Significant judgment is involved specifically in determining the estimated fair value of the ~~product. Since~~acquired land and buildings and improvements and intangible assets. For intangible assets, we typically use the ~~Company is~~excess earnings method. Significant estimates used in valuing intangible assets acquired in a business combination include, but are not limited to, revenue growth rates, customer attrition rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates. For land and buildings and improvements, we used a combination of methods including the ~~principal~~cost approach to value buildings and improvements and the sales comparison approach to value the underlying land. Significant estimates used in valuing land and buildings and improvements acquired in a business combination include, but are not limited to estimates of indirect costs and entrepreneurial profit, which were added to the replacement cost of the acquired assets in order to estimate their fair value in the ~~arrangement of transportation services~~market.

Refer to Note 3 for ~~its customers, revenues and expenses are presented on~~the disclosures related to recent acquisitions accounted for as a ~~gross basis.~~

~~Other Revenue~~

~~Other Revenue primarily includes the sale of limestone produced by the Company’s quarry business. Revenues from the sale of limestone are recognized upon delivery to customers.~~

~~Contracts with Multiple Service Lines~~

When considering contracts containing more than one service to a customer, a contract's transaction price is pre-defined or allocated to each distinct performance obligation and recognized as revenue when, or as the performance obligation is satisfied, either over time as work progresses, or at a point in time. For contracts with multiple service lines or distinct performance obligations, the Company evaluates and allocates the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts expected costs of satisfying a performance obligation and then adds an appropriate margin for that distinct good or service.business combination.

Recently Adopted Accounting Standards

~~Income Statement-Reporting Comprehensive Income (Topic 220)~~Defined Benefit Plans

Effective January 1, 2021, we adopted ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): ~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~

~~In February 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-02,~~ ~~Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI)~~. The ASU permits entities to reclassify tax effects stranded in AOCI as a result of tax reform to retained earnings. The guidance is effective for the Company in interim and annual periods beginning in 2019. Early adoption is permitted and can be applied retrospectively or in the period of adoption. The Company early adopted the ASU during the first quarter of 2018. Because the deferred tax asset in OCI is currently subject to a full valuation allowance, there is no net reclassification amount from AOCI to retained earnings during the quarter. However, our adoption of the principle will enable us to apply a 21% rateDisclosure Framework – Changes to the ~~deferred tax asset when the valuation allowance~~Disclosure Requirements for Defined Benefit Plans, on a retrospective basis. This update amends ASC 715 to remove disclosures that are no longer ~~applies.~~

~~Americold Realty Trust~~considered cost beneficial, clarifies the specific requirements of disclosures, and ~~Subsidiaries~~

~~Notes~~adds disclosure requirements identified as relevant to ~~Condensed Consolidated Financial Statements~~

~~Compensation—Stock Compensation~~

In May 2017, the Financial Accounting Standard Board (FASB) issued Accounting Standard Update (ASU) 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This update provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. ASU 2017-09 was effective for all entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. The Company adopted ASU 2017-09 in the first quarter of 2018 and it did not have a material effect on its condensed consolidated financial statements.

~~Compensation - Retirement Benefits~~

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). This update requires that the service cost component of net periodicdefined benefit pension and other postretirement benefits (OPEB) (income) expense be presented in the same income statement line item as other employee compensation costs, while the remaining components of net periodic pension and OPEB (income) expenseplans. The ASU’s changes related to disclosures are ~~to be presented outside operating income. Retrospective application~~part of the change in income statement presentation is required, while the change in capitalized benefit cost is to be applied prospectively. ASU 2017-01 was effective for public business entities for fiscal years beginning after December 15, 2017. The Company's adoption of this guidance resulted in the reclassification of non-service cost components of $0.3 million and $0.9 million from "Selling, general and administrative" expense to "Other income, net" for the three months ended March 31, 2018 ~~and~~ ~~March 31, 2017, respectively, in the condensed consolidated statements of operations.~~

~~Statement of Cash Flows, Restricted Cash~~

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. Under this new guidance, entities will be required to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, a reconciliationFASB’s disclosure framework project. Adoption of the totals in the statement of cash flows to the related captions in the balance sheet is required. For public business entities, the guidance was effective for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company adopted ASU 2016-18 in the first quarter of 2018 and disclosure revisions have been made retrospectively for the periods presented on the condensed consolidated statements of cash flows.

~~Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments~~

In August 2016, the FASB issued Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (ASU 2016-15), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This new guidance was effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. Entities will have to apply the guidance retrospectively, but if it is impracticable to do so for an issue, the amendments related to that issue would be applied prospectively. The Company adopted ASU 2016-15 in the first quarter of 2018 and it did not have a material effect on its condensed consolidated statements of cash flows.

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

~~Recognition and Measurement of Financial Assets and Financial Liabilities~~

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. For public companies, the amendments in this update were effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2016-01 in the first quarter of 2018 and it did not have a material effect on its condensed consolidated financial statements.

~~Revenue Recognition~~

In May 2014, the FASB issued ASU 2014-09 (Topic 606), Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. ASU 2014-09 provides new guidance related to the core principle that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance results in enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively, and improves guidance for multiple element arrangements. During 2016, the FASB issued additional ASUs to clarify certain aspects of ASU 2014-09, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), in March 2016, and ASU 2016-10, Identifying Performance Obligations and Licensing, in April 2016.

~~The Company adopted this standard effective January 1, 2018, applying the modified retrospective method, and determined that the~~ standard did not have a material impact to the amount or timing of revenue recognized for its revenue arrangements. Additionally, the Company did not record any cumulative effect adjustment as of the date of adoption. The most significant impact of the standard relates to the addition of disclosures relating to contracts that contain performance obligations extending beyond the end of the reporting period, and quantifying and disclosing methods of transferring services as it pertains to satisfying performance obligations. See Note 18.

~~Adoption of the standards related to revenue recognition had no impact to cash from or used in operating, financing, or investing activities~~ on the condensed consolidated ~~statements of cash flows, and had no material impact on the Company's processes and controls.~~financial statements.

Future Adoption of Accounting Standards

~~Lease Accounting~~Reference Rate Reform

In ~~February 2016,~~March 2020, the FASB issued ASU ~~2016-02, Leases~~2020-04, Reference Rate Reform (Topic ~~842)~~848). This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The ~~following~~guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has certain borrowings which are ~~some~~currently indexed to LIBOR. In March 2021, the administrator of LIBOR announced that the ~~key provisions~~publication of ~~this update:~~

~~Lessees~~LIBOR will ~~need to recognize a right-of-use asset~~cease for all GBP, EUR, CHF and ~~a lease liability for virtually~~JPY LIBOR settings and the one-week and two-month USD LIBOR settings immediately after December 31, 2021. It will stop publishing all ~~of their leases (other than leases that meet~~remaining USD LIBOR settings (i.e. the ~~definition of a short-term lease). The liability will be equal to~~overnight and the ~~present value of lease payments. The asset will be~~one-, three-, six- and 12-month settings) based on bank submissions immediately after June 30, 2023. The Company intends to apply the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to

FASB’s optional

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

expedients, when available, as it transitions to SOFR for its borrowings currently indexed to LIBOR. Accordingly, we do not believe that the transition to SOFR will have a material impact on the condensed consolidated financial statements.

the current model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue recognition standard. Similar to today, lessors will classify leases as operating, direct financing, or sales-type.

Existing sale-leaseback guidance, including guidance applicable to real estate, is replaced with a new model applicable to both lessees and lessors. A sale-leaseback transaction will qualify as a sale only if (1) it meets the sale guidance in the new revenue recognition standard, (2) the leaseback is not a finance lease or a sales-type lease, and (3) a repurchase option, if any, is priced at the asset’s fair value at the time of exercise and the asset is not specialized. If the transaction fails sale treatment, the buyer and seller will reflect it as a financing.

For public business entities, the standard is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating the potential impact of adopting ASU 2016-02.

3. ~~Equity-Method Investments~~Business Combinations

Acquisitions Completed During the Six Months Ended June 30, 2021

Acquisition of Liberty Freezers

The Company ~~has investments in certain ventures that are accounted~~completed the acquisition of Liberty Freezers on March 1, 2021 for ~~under~~total consideration of C$55.0 million, or $43.5 million, including cash received of C$1.8 million, or $1.4 million based on the ~~equity method of accounting. The following tables summarize~~exchange rate between the ~~financial information~~CAD and USD on the closing date of the ~~Company's largest joint ventures (CMAL and CMAH, or the China JV) for the interim periods presented.~~

March 31, 2018
Condensed consolidated results of operations CMAL CMAH Total
(In thousands)
Revenues $ 9,741
$ 2,867
$ 12,608
Operating income 23
84
107
Net (loss) income $ (2 ) $ 71
$ 69
Company’s loss from partially owned entities $ (121 ) $ (18 ) $ (139 )

March 31, 2017
Condensed consolidated results of operations CMAL CMAH Total
(In thousands)
Revenues $ 9,354
$ 2,216
$ 11,570
Operating (loss) income (144 ) 172
28
Net (loss) income $ (139 ) $ 88
$ (51 )
Company’s (loss) income from partially owned entities $ (70 ) $ 43
$ (27 )

~~In addition~~transaction. The acquisition accounting related to the ~~China JV,~~consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $2.9 million of land, $16.1 million of buildings and improvements, $1.9 million of machinery and equipment, $12.6 million of goodwill, $8.0 million of a customer relationship intangible asset, $28.8 million of operating right-of-use assets adjusted to reflect the favorable terms of the lease when compared with market terms, and $7.2 million of deferred tax liabilities, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the Canadian market and leveraging integration experience to drive synergies.

The acquisition was completed through the acquisition of stock in Canada; as a result, no tax basis in goodwill exists for Canadian tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company ~~also~~recorded no deferred taxes for tax deductible goodwill for Canadian tax purposes. Deductible goodwill exists for U.S. federal income tax purposes and will be available to reduce taxable income at the REIT, including any Global Intangible Low-Taxed Income (“GILTI”) inclusion associated with the foreign TRS in Canada. The preliminary acquisition accounting is based upon the Company’s estimates of fair value. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.

Acquisition of KMT Brrr!

The Company completed the acquisition of KMT Brrr! on May 5, 2021 for total consideration of $70.8 million, including cash received of $1.2 million. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $8.4 million of land, $42.0 million of buildings and improvements, $8.6 million of machinery and equipment, $6.2 million of goodwill, and $5.0 million of a customer relationship intangible asset, all of which are allocated to the Warehouse segment. The customer relationship asset has ~~an investment~~been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in ~~a joint venture accounted for under~~ the ~~equity-method, with a carrying amount of $2.0 million as of March 31, 2018~~New Jersey market and ~~December 31, 2017.~~

leveraging integration experience to drive synergies.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

~~4. Redeemable Preferred Shares~~

~~Series A Cumulative Non-Voting Preferred Shares~~

~~In January 2009,~~The KMT Brrr! acquisition was completed through the acquisition of all of the membership interests of certain limited liability companies and the acquisition allowed goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company ~~issued 125 Series A Cumulative Non-Voting Preferred Shares~~recorded no deferred taxes for tax deductible goodwill as a result. Deductible goodwill will be available to reduce taxable income at both the REIT and its domestic TRS. The preliminary acquisition accounting is based upon the Company’s estimates of ~~beneficial interest, par value $0.01 per share (Series A Preferred Shares) for proceeds of $0.1 million.~~fair value. The Series A Preferred Shares were redeemable by the Company at any time by notice for a price, payable in cash, equal to 100% of each share’s liquidation value of $1,000, plus all accrued and unpaid dividends, plus, if applicable, a redemption premium. Holdersestimated fair values of the ~~Series A Preferred Shares were entitled~~assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to ~~receive dividends semiannually at a per annum rate equal~~change during the measurement period, not to ~~12.5%~~exceed one year from the acquisition date. The financial results of the ~~liquidation value.~~acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.

~~In connection with~~Acquisition of Bowman Stores

The Company completed the ~~IPO, all outstanding Series A Preferred Shares were redeemed resulting in a cash payment~~acquisition of ~~approximately $0.1~~Bowman Stores on May 28, 2021 for total consideration of £75.5 million, or $107.1 million, including ~~accrued~~cash received of £2.4 million, or $3.4 million based on the exchange rate between the Pound Sterling and ~~unpaid dividends.~~

~~Series B Cumulative Convertible Voting Preferred Shares~~

~~On December 15, 2010,~~USD on the ~~Company issued 375,000~~closing date of the ~~Series B Cumulative Convertible Voting Preferred Shares~~transaction. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of ~~beneficial interest, par value $0.01 per share (Series B Preferred Shares), for proceeds~~the assets acquired and liabilities assumed including $6.0 million of ~~$368.5 million. Of~~land, $30.5 million of buildings and improvements, $17.5 million of machinery and equipment, $23.8 million of goodwill, $39.0 million of a customer relationship intangible asset, and $13.0 million of deferred tax liabilities, all of which are allocated to the ~~total issuance, 325,000 Series B Preferred Shares were issued~~Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to ~~affiliates~~the strategic benefits of ~~Goldman and 50,000 were issued to an affiliate of CMHI,~~ the ~~majority partner~~acquisition including the expanded presence in the ~~China JV.~~European market and leveraging integration experience to drive synergies.

~~In connection with~~The Bowman acquisition was completed through the ~~IPO, Goldman and CMHI converted their Series B Preferred Shares into 28,808,224 and 4,432,034 common shares~~acquisition of stock in the UK; as a result, no additional step-up in tax basis in goodwill in the UK was created aside from the inherited carryover tax basis that existed prior to the acquisition. The Company’s US deemed asset election under IRC section 338 will reduce the US income taxability of future foreign profits under the GILTI regime. The estimated fair values of the ~~Company, respectively, after taking into account a cash payment of approximately $1.8 million of accrued~~assets acquired and ~~unpaid dividends. Goldman sold 5,163,716 common shares~~liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the ~~Company soon after~~acquired operations are included in the ~~conversion~~Warehouse segment since the date of the ~~Series B Preferred Shares.~~acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

Acquisitions Completed During 2020

~~5. Debt~~Acquisition of Nova Cold

The ~~Company’s outstanding~~Company completed the acquisition of privately-held Nova Cold on January 2, 2020 for total consideration of approximately C$338.7 million, including cash received of C$1.3 million, or $260.6 million USD including cash received of $1.0 million. The acquisition accounting related to the consideration transferred primarily included $34.8 million of land, $106.1 million of buildings and improvements, $30.6 million of machinery and equipment, $64.6 million of goodwill, $53.9 million of a customer relationship intangible asset and $33.0 million of deferred tax liabilities, all of which were allocated to the Warehouse segment. The customer relationship asset has been assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the Canadian market and leveraging integration experience to drive synergies.

The Nova Cold acquisition was completed through the acquisition of stock in Canada; as a result, no tax basis in goodwill exists for Canadian tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill for Canadian tax purposes. Deductible goodwill exists for U.S. federal income tax purposes and will be available ~~borrowings as~~to reduce taxable income at the REIT, including any GILTI inclusion associated with the foreign TRS acquired. The acquisition accounting was finalized within one year from the date of ~~March 31, 2018~~acquisition and is reflected within the Consolidated Financial Statements for the year ended December 31, ~~2017~~2020. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition.

Acquisition of Newport

The Company completed the acquisition of privately-held Newport on January 2, 2020 for total cash consideration of $57.7 million, including cash received of $1.0 million. The acquisition accounting related to the consideration transferred primarily included $30.2 million of property, buildings and equipment, $18.7 million of a customer relationship asset and $7.1 million of goodwill, each of which are allocated to the Warehouse segment. The customer relationship intangible asset has been assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the Minneapolis-St. Paul market and leveraging integration experience to drive synergies.

The Newport acquisition was completed through the acquisition of all of the membership interests of certain limited liability companies; the acquisition of all the membership interests allowed a portion of the goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill as ~~follows:~~a result. Deductible goodwill will be available to reduce taxable income at the REIT. The acquisition accounting was finalized within one year from the date of acquisition. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition.

Acquisition of AM-C Warehouses

The Company completed the acquisition of privately-held AM-C Warehouses on August 31, 2020 for total cash consideration of $82.7 million. The preliminary acquisition accounting related to the consideration transferred primarily included $53.2 million of property, buildings and equipment, $19.7 million of a customer relationship asset and $10.7 million of goodwill, each of which are allocated to the Warehouse segment. The customer

March 31, 2018 December 31, 2017
Stated maturity date Contractual Interest Rate Effective Interest Rate as of March 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value
2010 Mortgage Loans
cross-collateralized and cross-defaulted by 46 warehouses: (In thousands)
Component A-1 1/2021 3.86% 4.40% $ 52,641
$ 53,299
$ 56,941
$ 58,151
Component A-2-FX 1/2021 4.96% 5.38% 150,334
157,475
150,334
159,918
Component A-2-FL ⁽¹⁾
1/2021 L+1.51% 3.80% 48,654
48,958
48,654
49,019
Component B 1/2021 6.04% 6.48% 60,000
63,900
60,000
64,875
Component C 1/2021 6.82% 7.28% 62,400
67,704
62,400
68,718
Component D 1/2021 7.45% 7.92% 82,600
90,344
82,600
91,686
2013 Mortgage Loans
cross-collateralized and cross-defaulted by 15 warehouses:
Senior note 5/2023 3.81% 4.14% 192,654
190,245
194,223
195,194
Mezzanine A 5/2023 7.38% 7.55% 70,000
67,900
70,000
68,950
Mezzanine B 5/2023 11.50% 11.75% 32,000
31,360
32,000
31,840
ANZ Term Loans secured by mortgages in properties owned by relevant subsidiaries:
Australia Term Loan ⁽¹⁾
6/2020 BBSY+1.40% 4.59% 156,046
157,607
158,645
160,628
New Zealand Term Loan ⁽¹⁾
6/2020 BKBM+1.40% 5.15% 31,834
32,152
31,240
31,631
2018 Senior Secured Term A Facility secured by stock pledge in qualified subsidiaries ⁽¹⁾
1/2023 L+2.50% 4.90% 475,000
475,000
—
—
2015 Senior Secured Term Loan B Facility ⁽¹⁾
12/2022 L+3.75% 5.79% —
—
806,918
806,918
Total principal amount of mortgage notes and term loans $ 1,414,163
$ 1,435,944
$ 1,753,955
$ 1,787,528
Less deferred financing costs (15,611 ) n/a
(25,712 ) n/a
Less debt discount (325 ) n/a
(6,285 ) n/a
Total mortgage notes and term loans, net of deferred financing costs and debt discount $ 1,398,227
$ 1,435,944
$ 1,721,958
$ 1,787,528

2018 Senior Secured Revolving Credit
Facility secured by stock pledge in qualified subsidiaries ⁽¹⁾
1/2021 L+2.50% n/a $ —
$ —
$ —
$ —

Construction Loan:
Warehouse Clearfield, UT secured by mortgage ⁽¹⁾
2/2019 L+3.25% 5.18% $ —
$ —
$ 19,671
$ 19,671
Less deferred financing costs —
n/a
(179 ) n/a
$ —
$ —
$ 19,492
$ 19,671


~~(1)~~	~~L = one-month LIBOR; BBSY= Bank Bill Swap Bid Rate (applicable in Australia); BKBM = Bank Bill Reference Rate (applicable in New Zealand).~~

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)

relationship intangible asset has been assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the Dallas - Fort Worth market and expanding the Company’s relationship with a leading global protein producer.

~~2018 Senior Secured Credit Facilities~~The AM-C acquisition was completed through the acquisition of substantially all of the assets from the seller and the acquisition allowed goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill as a result. Deductible goodwill will be available to reduce taxable income at the REIT. As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding these assets and liabilities that existed at the acquisition date. Any adjustments to our estimates of acquisition accounting will be made in the periods in which the adjustments are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. The preliminary acquisition accounting will be finalized within one year from the date of acquisition. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. The adjustments recorded during the measurement period did not have a significant impact on our Condensed Consolidated Financial Statements for the three and six months ended June 30, 2021.

~~Simultaneous~~Acquisition of Hall’s Warehouses

The Company completed the acquisition of Hall’s Warehouses on November 2, 2020 for total cash consideration of $489.2 million, including cash received of $7.9 million. A summary of the preliminary fair values of the assets acquired and liabilities assumed and the measurement period adjustments recorded during this quarter is as follows (in thousands):

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)


	Initial Amounts Recognized as of the Acquisition Date		Measurement Period Adjustments		Preliminary Amounts Recognized as of the Acquisition Date (as Adjusted)
Assets
Land	$	29,352	$	3,208	$	32,560
Buildings and improvements	239,708		(87,428)		152,280
Machinery and equipment	63,596		(38,248)		25,348
Assets under construction	0		41		41
Operating lease right-of-use assets	26,400		1,400		27,800

Cash and cash equivalents	7,894		0		7,894

Accounts receivable	11,894		0		11,894
Goodwill	42,737		130,744		173,481
Acquired identifiable intangibles:
Customer relationships	102,732		(7,232)		95,500



Other assets	303		0		303
Total assets	524,616		2,485		527,101
Liabilities
Accounts payable and accrued expenses	4,006		2,047		6,053

Operating lease obligations	26,400		0		26,400




Deferred tax liability	5,012		438		5,450
Total liabilities	35,418		2,485		37,903
Total consideration for the Hall’s acquisition	$	489,198	$	0	$	489,198

During the second quarter of 2021, we continued to refine the initial estimates and assumptions included in the valuation studies, including appraisals, necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, and the amount of goodwill to be recognized as of the acquisition date. These valuation studies are preliminary and we are continuing to review the inputs used, assumptions made and the underlying cash flows used to determine the fair value of the identified tangible and intangible assets. The initial preliminary acquisition accounting was based upon management’s estimates and assumptions, as well as other information compiled by management, including the books and records of Hall’s. The measurement period adjustments recorded during the three months ended June 30, 2021 resulted from changes in fair values based on the drafts of the third-party valuations received. The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment. Any potential adjustments made could be material in relation to the values presented in the table above. The primary areas of the preliminary acquisition accounting that are not yet finalized relate to the following: (i) finalizing the review and valuation of land, land improvements, building and machinery and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the ~~IPO,~~depreciable assets, (ii) finalizing the review and valuation of customer related intangible assets (including key assumptions, inputs and estimates), (iii) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period, (iv) finalizing our review of certain assets acquired and liabilities assumed, (v) finalizing the evaluation and valuation of certain legal matters and/or other loss contingencies, including those that we may not yet be aware of but meet the requirement to quality as a pre-acquisition contingency, and (vi) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the acquisition accounting is based on our

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

preliminary assessments and draft valuations, actual values may differ (possibly materially) when final information becomes available that differs from our current estimates. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.

The customer relationship intangible asset has been assigned a preliminary useful life of 25 years and will be amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the New Jersey market. The financial results of the acquired operations are included in the Warehouse and Transportation segments since the date of the acquisition. This transaction will allow us to grow our market share with key customers while diversifying our overall customer base. All of the acquired facilities are located within 15 miles of each other and 30 miles of Newark Port. The Hall’s acquisition was completed through the acquisition of the outstanding stock of certain Hall’s entities and the direct purchase of real estate assets from the sellers. The acquisition allowed a portion of the goodwill recorded to be deductible for federal income tax purposes. Deductible goodwill will be available to reduce taxable income at both the REIT and potentially the domestic TRS.

Acquisition of Agro

The Company completed the acquisition of Agro on December 30, 2020 for total consideration of $1.59 billion, including cash received of $47.5 million. This was comprised of cash consideration totaling $1.08 billion, of which $49.7 million was deferred, and the issuance of 14,166,667 common shares of beneficial interest to Oaktree, with a fair value of $512.1 million based upon the closing share price on December 29, 2020 of $36.15. Financing lease and sale-leaseback obligations associated with the acquisition totaled $112.7 million, as indicated in the table below, and when added to the total consideration transferred brings the total transaction cost to approximately $1.7 billion. A summary of the preliminary fair values of the assets acquired and liabilities assumed and the measurement period adjustments recorded during this quarter is as follows (in thousands):

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Notes to Condensed Consolidated Financial Statements - (Unaudited)


	Initial Amounts Recognized as of the Acquisition Date		Measurement Period Adjustments		Preliminary Amounts Recognized as of the Acquisition Date (as Adjusted)
Assets
Land	$	95,286	$	20,779	$	116,065
Building and improvements	778,170		(237,877)		540,293
Machinery and equipment	206,453		52,954		259,407
Assets under construction	0		15,416		15,416
Operating lease right-of-use assets	191,229		22,924		214,153
Financing lease asset	46,845		(4,679)		42,166
Cash and cash equivalents	47,534		(1)		47,533
Accounts receivable	78,423		(1,132)		77,291
Goodwill	346,673		47,406		394,079
Acquired identifiable intangibles:
Customer relationships	333,501		56,599		390,100
Investment in partially owned entities	21,638		(9,738)		11,900
Other assets	20,038		12,528		32,566
Total assets	2,165,790		(24,821)		2,140,969
Liabilities
Accounts payable and accrued expenses	90,860		14,843		105,703
Operating lease obligations	191,229		2,975		194,204
Financing lease obligations	46,845		(7,190)		39,655
Sale-leaseback obligations	73,075		0		73,075
Deferred tax liability	175,719		(35,449)		140,270

Total liabilities	577,728		(24,821)		552,907
Total consideration for the Agro acquisition	$	1,588,062	$	0	$	1,588,062

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

During the second quarter of 2021, we continued to refine the estimates and assumptions included in the valuation studies, including appraisals, necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, and the amount of goodwill to be recognized as of the acquisition date. These valuation studies are preliminary and we are continuing to review the inputs used, assumptions made and the underlying cash flows used to determine the fair value of the identified tangible and intangible assets. The initial preliminary acquisition accounting was based upon management’s estimates and assumptions, as well as other information compiled by management, including information from prior valuations of similar entities and the books and records of Agro. The measurement period adjustments recorded during the three months ended June 30, 2021 resulted from changes in fair values based on the drafts of the third-party valuations received. The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment. Any potential adjustments made could be material in relation to the values presented in the table above. The primary areas of the acquisition accounting that are not yet finalized relate to the following: (i) finalizing the review and valuation of land, land improvements, building and machinery and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, (ii) finalizing the review and valuation of customer related intangible assets (including key assumptions, inputs and estimates), (iii) finalizing our review of certain assets acquired and liabilities assumed, (iv) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period, (v) finalizing the evaluation and valuation of certain legal matters and/or other loss contingencies, including those that we may not yet be aware of but meet the requirement to quality as a pre-acquisition contingency, and (vi) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the acquisition accounting is based on our preliminary assessments and draft valuations, actual values may differ (possibly materially) when final information becomes available. Additionally, the total consideration transferred is subject to certain post-close adjustments. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.

As shown above, the Company recorded approximately $394.1 million of goodwill related to the Agro Acquisition. Strategic benefits of the acquisition include: (i) establishing a strategic footprint in Europe, which enhances its ability to serve their multinational customers on a global scale, (ii) adding depth to the existing networks in North America, Australia and South America, and (iii) providing significant growth opportunities through potential future acquisitions, given Europe's fragmented temperature controlled storage industry. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The Agro Acquisition was completed through the acquisition of stock of various Agro entities in the U.S. and foreign jurisdictions; as a result, no tax basis exists in each of these jurisdictions for tax purposes, except for minimal tax basis that existed prior to the acquisition. We expect that the goodwill will be assigned to the Warehouse and Transportation segments during the measurement period. The Company’s deemed asset elections for the foreign operations under IRC section 338 will reduce the US income taxability of future foreign profits under the GILTI regime.

Also shown above, in connection with the Agro Acquisition the Company recorded an intangible asset of approximately $390.1 million for customer relationships which has been assigned a preliminary useful life of 25 years and will be amortized on a straight-line basis. Based on the discussion under goodwill above, the Agro Acquisition resulted in federal income tax deductibility for a minimal portion of the intangible assets. The deductible intangible assets will be available to reduce taxable income for the REIT and reduce any GILTI inclusion in the US associated with foreign entities acquired.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

Pro Forma Consolidated Results (Unaudited)

The following table presents the unaudited pro forma financial results as if the 2020 acquisition of Agro had occurred on January 1, 2020. The pro forma adjustments primarily relate to depreciation expense on acquired assets, amortization of acquired intangibles, and estimated interest expense related to financing transactions, the proceeds of which were used to partially fund the acquisition of Agro.

The accompanying unaudited pro forma consolidated financial statements exclude the results of the AM-C, Bowman Stores, Halls, KMT Brrr!, Lanier and Liberty Freezers acquisitions, which were deemed immaterial individually and in the aggregate based on quantitative and qualitative considerations. Additionally, the Company has not presented pro forma combined results of operations for the acquisitions of Nova Cold and Newport, because the results of operations as reported in the accompanying Condensed Consolidated Statements of Operations would not have been materially different. These statements are provided for illustrative purposes only and do not purport to represent what the actual Consolidated Statements of Operations of the Company would have been had the Agro acquisition occurred on the dates assumed, nor are they necessarily indicative of what the results of operations would be for any future periods.


Pro forma (unaudited)
(in thousands, except per share data)
	Three Months Ended		Six Months Ended
	June 30, 2020
Total revenue	$	603,944	$	1,216,189
Net income attributable to Americold Realty Trust	$	21,473	$	27,746
Net income per share, diluted(1)	$	0.09	$	0.11

(1)Adjusted to give effect to the issuance of 46.1 million common shares in connection with the Agro Acquisition.

Total revenues of approximately $132.6 million and $256.9 million and net loss of approximately $19.1 million and $23.6 million associated with properties and operations acquired in the Agro Acquisition are included in the Consolidated Statements of Operations for the three and six months ended June 30, 2021, respectively. The revenues and net income associated with properties and operations acquired in the Agro Acquisition included in the Consolidated Statements of Operations for the year ended December 31, 2020 was immaterial as the acquisition closed on December 30, 2020.

4. Investment in Partially Owned Entities

Superfrio Joint Venture

During the first quarter of 2020, the Company purchased a 14.99% equity interest in a joint venture with Superfrio Armazéns Gerais S.A. (“SuperFrio”) for Brazil reals of 117.8 million. Including certain transaction costs, the Company recorded an initial investment of USD $25.7 million in the joint venture.

During the first quarter of 2021, the Company contributed an additional R$9.3 million (or $1.6 million USD) in capital to the SuperFrio joint venture. Additionally, during the second quarter of 2021, the Company contributed an additional R$24.1 million (or $4.6 million USD) in capital to the SuperFrio joint venture. The capital calls from SuperFrio were issued to each owner based on their ownership percentage, therefore, the Company’s ownership percentage remains unchanged.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

SuperFrio is a Brazilian-based company that provides temperature-controlled storage and logistics services including storage, warehouse services, and transportation. The debt of the unconsolidated joint venture is non-recourse to us, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations.

Comfrio Joint Venture

As a result of the Agro acquisition which closed on December 30, 2020, the Company acquired Agro’s 22.12% share of ownership in Agrofundo Brazil II Fundode Investimento em Participações (“FIP”) or the “Comfrio” joint venture. The FIP owns all the issued and outstanding shares of common stock of Agro Improvement Participações S.A. (“Agro Improvement”), a sociedade anônima, duly organized and existing under the laws of Brazil. The Company has a call right that enables it to purchase all the issued and outstanding shares of Agro Improvement starting on January 1, 2019 through January 7, 2023. The FIP has a put right that requires the Company when exercised to purchase from it all the issued and outstanding shares of Agro Improvement starting on July 1, 2019 through January 7, 2023. The fair value of the call and put rights will be recorded through acquisition accounting finalization during the measurement period, and was not included in the preliminary acquisition accounting as of December 31, 2020.

The debt of the unconsolidated joint venture is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations.

As of June 30, 2021, our investment in partially owned entities accounted for under the equity method of accounting presented in our Condensed Consolidated Balance Sheet consists of the following (in thousands):

Joint Venture

Location

% Ownership

June 30, 2021

Superfrio

Brazil

14.99%

$30,251

Comfrio

Brazil

22.12%

$12,491

5. Acquisition, Litigation and Other Charges

The components of the charges and credits included in “Acquisition, litigation and other” in our Condensed Consolidated Statements of Operations are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
Acquisition, litigation and other	2021		2020		2021		2020
Acquisition and integration related costs	$	3,075	$	2,651	$	16,550	$	3,417
Litigation	117		0		117		0
Severance costs	255		150		2,701		1,072
Terminated site operations costs	13		0		72		0
Cyber incident related costs	(289)		0		4,482		0
Other	751		0		751		0
Total acquisition, litigation and other	$	3,922	$	2,801	$	24,673	$	4,489

Acquisition related costs include costs associated with business transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees. We also include integration costs pre- and post-acquisition that reflect work being performed to facilitate merger and acquisition integration,

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such as work associated with information systems and other projects including spending to support future acquisitions, and primarily consist of professional services. We consider acquisition related costs to be corporate costs regardless of the segment or segments involved in the transaction. Refer to Note 3 for further information regarding acquisitions completed during 2021 and 2020.

Severance costs represent certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies and reduction in workforce costs associated with exiting or selling non-strategic warehouses or businesses.

Terminated site operations costs relates to repair expenses incurred to return leased sites to their original physical state at lease inception in connection with the termination of the applicable underlying lease. These terminations were part of our strategic efforts to exit or sell non-strategic warehouses as opposed to ordinary course lease expirations. Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our Condensed Consolidated Statement of Operations.

Cyber incident related costs include third-party fees incurred in connection with the cyber incident that occurred in November 2020, as well as any incremental costs, internal and external, incurred to restore operations at our facilities and damage claims. Any subsequent reimbursements from insurance coverage for expenses incurred in connection with the event are also reflected within this category.

Other costs represent the deductibles incurred for various other insurance claims. Any subsequent reimbursements from insurance coverage for expenses incurred in connection with the claims are also reflected within this category.

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6. Debt

The Company’s outstanding indebtedness as of June 30, 2021 and December 31, 2020 was as follows (in thousands):


				June 30, 2021				December 31, 2020
Indebtedness	Stated Maturity Date	Contractual Interest Rate	Effective Interest Rate as of June 30, 2021	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2013 Mortgage Loans
Senior note	5/2023	3.81%	4.14%	$	171,197	$	177,189	$	174,693	$	180,807
Mezzanine A	5/2023	7.38%	7.55%	70,000		71,925		70,000		71,925
Mezzanine B	5/2023	11.50%	11.75%	32,000		33,040		32,000		33,040
Total 2013 Mortgage Loans				273,197		282,154		276,693		285,772

Senior Unsecured Notes
Series A notes	1/2026	4.68%	4.77%	200,000		224,000		200,000		231,000
Series B notes	1/2029	4.86%	4.92%	400,000		465,000		400,000		475,000
Series C notes	1/2030	4.10%	4.15%	350,000		389,375		350,000		400,750
Series D notes(5)	1/2031	1.62%	1.67%	474,281		471,356		488,640		488,640
Series E notes(6)	1/2033	1.65%	1.70%	415,030		411,398		427,560		427,560
Total Senior Unsecured Notes				1,839,311		1,961,129		1,866,200		2,022,950

2020 Senior Unsecured Term Loan Tranche A-1(1)	3/2025	L+0.95%	1.42%	125,000		124,063		325,000		323,375
2020 Senior Unsecured Term Loan Tranche A-2(2)(4)	3/2025	C+0.95%	1.51%	201,650		200,138		196,325		195,343
Total 2020 Senior Unsecured Term Loan A Facility				326,650		324,201		521,325		518,718

2020 Senior Unsecured Revolving Credit Facility-1(3)(7)	3/2024	C+0.85%	1.34%	44,363		44,363		$	0	$	0
2020 Senior Unsecured Revolving Credit Facility-2(3)(8)(9)	3/2024	G+0.85%	1.07%	94,742		94,742		0		0
Total 2020 Senior Unsecured Revolving Credit Facility				$	139,105	$	139,105	$	0	$	0

Total principal amount of indebtedness				$	2,578,263	$	2,706,589	$	2,664,218	$	2,827,440
Less: unamortized deferred financing costs				(11,994)		n/a		(15,952)		n/a
Total indebtedness, net of unamortized deferred financing costs				$	2,566,269	$	2,706,589	$	2,648,266	$	2,827,440

(1) L = one-month LIBOR.

(2) C = one-month CDOR.

(3) The Company has the option to extend the 2020 Senior Unsecured Revolving Credit Facility up to 2 times for a six-month period each.

(4) The 2020 Senior Unsecured Term Loan Tranche A-2 is denominated in Canadian dollars and aggregates to CAD $250.0 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2021.

(5) The Senior Unsecured Notes Series D is denominated in Euros and aggregates to €400.0 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2021.

(6) The Senior Unsecured Notes Series E is denominated in Euros and aggregates to €350.0 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2021.

(7) The Senior Unsecured Revolving Credit Facility Draw 1 as of June 30, 2021, is denominated in CAD and aggregates to CAD $55.0 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2021.

(8) The Senior Unsecured Revolving Credit Facility Draw 2 as of June 30, 2021, is denominated in GBP and aggregates to GBP $68.5 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2021.

(9) G = one-month GBP LIBOR.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

2020 Senior Unsecured Credit Facility

On March 26, 2020, we entered into a five-year ~~$525.0 million~~ Senior ~~Secured~~Unsecured Term Loan A Facility and a ~~three-year, $400.0~~four-year $800 million Senior ~~Secured~~Unsecured Revolving Credit Facility, which we refer to as the 2020 Senior Unsecured Credit Facility. The proceeds were used to refinance the existing $800 million 2018 Senior ~~Secured Credit Facilities. Our 2018 Senior Secured Credit Facilities also have an additional $400.0 million accordion option. Our 2018 Senior Secured~~Unsecured Revolving Credit Facility ~~has a one-year extension option subject~~maturing January 23, 2021 and USD denominated $475 million 2018 Senior Unsecured Term Loan maturing January 23, 2023. The total facility size of the 2020 Senior Unsecured Credit Facility was approximately $1.4 billion USD prior to ~~certain conditions. We used~~ the ~~net proceeds from~~partial repayment discussed below. The Company reduced the ~~IPO, together with $517.0 million of net proceeds from our~~margin on the 2020 Senior ~~Secured~~Unsecured Term Loan A Facility ~~to repay the entire $806.9 million aggregate principal amount of indebtedness outstanding under our~~and 2020 Senior Secured Term Loan B Facility, plus accrued and unpaid interest, to repay $20.9 million of indebtedness outstanding under our Clearfield, Utah and Middleboro, Massachusetts construction loans, and for working capital.

~~On February 6, 2018, we amended the credit agreement with the lenders of our 2018 Senior~~Unsecured Revolving Credit Facility ~~(the 2018 Credit Agreement) to increase the aggregate revolving credit commitments on this facility~~ by ~~$50.0 million to $450.0 million. Concurrently,~~5 basis points.

On December 30, 2020, we ~~utilized cash on hand to repay $50.0~~repaid $100 million on our ~~Senior Secured~~ Term Loan A Tranche A-1 facility. ~~As a result of these modifications,~~On January 29, 2021, we executed an amendment to our ~~total aggregate commitments under its 2018 Senior Credit Facilities remain unchanged at $925.0 million.~~

Borrowings under our 2018 Senior Secured Credit Facilities bear interest, at our election, at the then-applicable margin plus an applicable LIBOR or base rate interest rate. The base rate is the greatest of the bank prime rate, the one-month LIBOR rate plus one percent or the federal funds rate plus one-half of one percent. The applicable margin varies between (i) in the case of LIBOR-based loans, 2.35% and 3.00% and (ii) in the case of base rate loans, 1.35% and 2.00%, in each case, based on changes in our total leverage. In addition, any undrawn portion of our 2018 Senior Secured Revolving Credit Facility will be subject to an annual 0.30% commitment fee at times that we are utilizing at least 50% of our outstanding revolvingexisting credit ~~commitments or an annual 0.40% commitment fee at times that we are utilizing less than 50% of~~agreement which expanded our revolving credit ~~commitments, in each case, based upon~~facility borrowing capacity by $200 million to $1 billion. Other terms associated with the ~~actual daily unused portion of our 2018 Senior Secured Revolving Credit Facility.~~

Atcredit facility, such as the ~~completion of~~interest rate, fees, and maturity, remained unchanged. In tandem with the ~~IPO, borrowings under our 2018 Senior Secured Credit Facilities bore interest at a floating rate of one-month LIBOR plus 2.50%. In addition,~~amendment, we ~~applied approximately $33.6~~repaid $200 million of our ~~2018~~Term Loan A Tranche A-1 facility.

The 2020 Senior ~~Secured Revolving Credit~~Unsecured Term Loan A Facility is broken into 2 tranches. Tranche A-1 is comprised of a $125.0 million USD term loan and Tranche A-2 is comprised of a CAD $250.0 million term loan, both are five-year loans maturing in 2025. Tranche A-2 provides a natural hedge to ~~backstop certain outstanding letters~~the Company’s investment in Canada. We refer to Tranches A-1 and A-2 in aggregate as the 2020 Senior Unsecured Term Loan Facility. In connection with entering into the agreement, we capitalized approximately $3.2 million of ~~credit.~~

~~Our Operating Partnership is~~debt issuance costs related to the ~~borrower~~term loan, which we amortize as interest expense under ~~our 2018~~the effective interest method. As of June 30, 2021, $2.4 million of unamortized debt issuance costs related to the 2020 Senior ~~Secured Credit Facilities, which~~Unsecured Term Loan A Facility are ~~guaranteed by our company~~included in “Mortgage notes, senior unsecured notes and ~~certain eligible subsidiaries of our operating partnership and secured by a pledge~~term loans” in the ~~stock~~accompanying Condensed Consolidated Balance Sheets.

The maturity of ~~certain subsidiaries of our operating partnership. Our 2018~~the 2020 Senior ~~Secured~~Unsecured Revolving Credit Facility is ~~structured~~March, 26 2024; however, the Company has the option to ~~include~~extend the maturity up to 2 times, each for a ~~borrowing base,~~six-month period. The Company must meet certain criteria in order to extend the maturity. All representations and warranties must be in effect, it must obtain updated resolutions from loan parties, and an additional 6.25 basis points extension fee must be paid. In connection with entering into the agreement, we capitalized approximately $5.2 million of debt issuance costs for the 2020 Senior Unsecured Revolving Credit Facility, which we amortize as interest expense under the straight-line method. Additionally, there were unamortized deferred financing costs at the time of entering into the agreement of $2.8 million which will ~~allow us~~continue to ~~borrow against~~be amortized over the ~~lesser~~life of ~~our~~the 2020 Senior ~~Secured Term Loan A Facility balance outstanding and $450.0~~Unsecured Revolving Credit Facility. As of June 30, 2021, $5.3 million inof unamortized debt issuance costs related to the revolving credit commitments, and the value of certain owned real estate assets, ground, capital and operating leased assets, with credit given for income from third-party managed warehouses. At December 31, 2017, the gross value of our assetsfacility are included in “Other assets” in the calculations under our 2018 Credit Agreement, was in excess of $1.8 billion, and had an effective borrowing base collateral value (after concentration limits and advance rates as calculated under the anticipated terms of our 2018 Credit Agreement) in excess of $1.1 billion.

accompanying Condensed Consolidated Balance Sheets.

Our ~~2018~~2020 Senior ~~Secured~~Unsecured Credit ~~Facilities contain~~Facility contains representations, covenants and other terms customary for a publicly traded REIT. In addition, ~~our 2018 Senior Secured Credit Facilities contain~~it contains certain financial covenants, as defined in the credit agreement, including:

•a maximum leverage ratio of less than or equal to 60% of our total asset value. Following a material acquisition, leverage ratio shall not exceed 65%;

•a maximum unencumbered leverage ratio of less than or equal to 60% to unencumbered asset value. Following a material acquisition, unencumbered leverage ratio shall not exceed 65%;

•a maximum secured leverage ratio of less than or equal to 40% to total asset value. Following a material acquisition, secured leverage ratio shall not exceed 45%;

•a minimum fixed charge coverage ratio of greater than or equal to 1.50x; and

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

•a minimum unsecured interest coverage ratio of greater than or equal to 1.75x.

Material Acquisition in our 2020 Senior Unsecured Credit Facility is defined as one in which assets acquired exceeds an amount equal to 5% of total asset value as of the last day of the most recently ended fiscal quarter publicly available. Obligations under our 2020 Senior Unsecured Credit Facility are general unsecured obligations of our Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. As of June 30, 2021, the Company was in compliance with all debt covenants.

There were $21.9 million letters of credit issued on the Company’s 2020 Senior Unsecured Revolving Credit Facility as of June 30, 2021.

Series A, B, C, D and E Senior Unsecured Notes

On December 30, 2020, we completed a debt private placement transaction consisting of (i) €400.00 million senior unsecured notes with a coupon of 1.62% due January 7, 2031 (“Series D”) and (ii) €350.00 million senior unsecured notes with a coupon of 1.65% due January 7, 2033 (“Series E”). Interest is payable on January 7 and July 7 of each year until maturity, with the first payment occurring July 7, 2021. The notes are general unsecured senior obligations of the Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. In connection with entering into the agreement, we incurred approximately $4.5 million of debt issuance costs related to the issuance, which we amortize as interest expense under the effective interest method. The proceeds of the Series D and Series E issuance were used to provide long-term financing for the Halls acquisition, general corporate purposes and to repay a portion of the 2020 Senior Unsecured Term Loan Tranche A-1.

On April 26, 2019, we priced a debt private placement transaction consisting of $350.0 million senior unsecured notes with a coupon of 4.10% due January 8, 2030 (“Series C”). The transaction closed on May 7, 2019. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring January 8, 2020. The initial January 8, 2020 payment included interest accrued since May 7, 2019. The notes are general unsecured obligations of the Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. The Company applied the proceeds of the private placement transaction to repay the indebtedness outstanding under our senior unsecured revolving credit facility incurred in connection with the funding of the Cloverleaf and Lanier acquisitions.

On November 6, 2018, we completed a debt private placement transaction consisting of (i) $200.0 million senior unsecured notes with a coupon of 4.68% due January 8, 2026 (“Series A”) and (ii) $400.0 million senior unsecured notes with a coupon of 4.86% due January 8, 2029 (“Series B”). The transaction closed on December 4, 2018. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring July 8, 2019. The notes are general unsecured senior obligations of the Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. The Company used a portion of the proceeds of the private placement transaction to repay the outstanding balances of the $600.0 million Americold 2010 LLC Trust, Commercial Mortgage Pass-Through Certificates, Series 2010, ART (2010 Mortgage Loans). The Company also used the remaining proceeds to extinguish the Australian term loan and the New Zealand term loan (ANZ Loans).

The Series A, B, C, D, and E senior notes (collectively referred to as the “Senior Unsecured Notes”) and guarantee agreement includes a prepayment option executable at any time during the term of the loans. The prepayment can be either a partial payment or payment in full, as long as the partial payment is at least 5% of the outstanding principal. Any prepayment in full must include a make-whole amount, which is the discounted remaining scheduled payments due to the lender. The discount rate to be used is equal to 0.50% plus the yield to maturity reported for the most recently actively traded U.S. Treasury Securities with a maturity equal to the

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

remaining average life of the prepaid principal. The Company must give each lender at least 10 days written notice whenever it intends to prepay any portion of the debt.

If a change in control occurs for the Company, the Company must issue an offer to prepay the remaining portion of the debt to the lenders. The prepayment amount will be 100% of the principal amount, as well as accrued and unpaid interest.

The Company is required to maintain at all times an investment grade debt rating for each series of notes from a nationally recognized statistical rating organization. In addition, the Senior Unsecured Notes contain certain financial covenants required on a quarterly or occurrence basis, as defined in the relevant note agreement, including:

•a maximum leverage ratio of less than or equal to 60% of our total asset value;

•a maximum unsecured indebtedness to qualified assets ratio of less than 0.60 to 1.00;

•a maximum total secured indebtedness ratio of less than 0.40 to 1.00;

•a minimum ~~borrowing base~~fixed charge coverage ratio of greater than or equal to ~~1.00~~1.50 to 1.00; and

•a minimum unsecured debt service ratio of greater than or equal to 2.00 to 1.00.

As of June 30, 2021, the Company was in compliance with all debt covenants.

2013 Mortgage Loans

On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which the Company refers to as the 2013 Mortgage Loans. The debt consists of a senior debt note and 2 mezzanine notes. The components are cross-collateralized and cross-defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the 2 mezzanine notes remain subject to yield maintenance provisions. The Company used the net proceeds of these loans to refinance certain of the 2006 Mortgage Loans, acquire 2 warehouses, and fund general corporate purposes.

The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of June 30, 2021, the amount of restricted cash associated with the 2013 Mortgage Loans was $3.6 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The 2013 Mortgage Loans are non-recourse to the Company, subject to customary non-recourse provisions as stipulated in the agreements.

DebtCovenants

Our Senior Unsecured Credit Facilities, the Senior Unsecured Notes and 2013 Mortgage Loans all require financial statement reporting, periodic reporting of compliance with financial covenants, other established thresholds and performance measurements, and compliance with affirmative and negative covenants that govern our allowable business practices. The affirmative and negative covenants include, among others, continuation of insurance, maintenance of collateral (in the case of the 2013 Mortgage Loans), the maintenance of REIT status, and restrictions on our ability to enter into certain types of transactions or take on certain exposures. As of June 30, 2021, we were in compliance with all debt covenants.

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Notes to Condensed Consolidated Financial Statements

- (Unaudited)

Loss on debt extinguishment, modifications and termination of derivative instruments

~~a minimum pro forma fixed charge coverage ratio~~In connection with the refinancing of ~~greater than or equal to 1.40 to 1.00 increasing to 1.50 to 1.00 in~~the 2018 Senior Unsecured Credit Facility during the first quarter of ~~2018;~~2020, the Company recorded $0.8 million to “Loss on debt extinguishment, modifications and termination of derivative instruments” in the accompanying Condensed Consolidated Statements of Operations, representing the write-off of unamortized deferred financing costs from the 2018 Senior Unsecured Credit Facility. These write-offs were a result of two lenders in the 2018 Senior Unsecured Term Loan A Facility that did not participate in the 2020 Senior Unsecured Term Loan A Facility, accordingly those lenders’ portion of unamortized deferred financing costs were written off. Similarly, two lenders in the 2018 Senior Unsecured Revolving Credit Facility did not participate in the 2020 Senior Unsecured Revolving Credit Facility, and those lender’s portions of unamortized deferred financing costs were written off.

In the first quarter of 2021, the Company repaid $200 million of principal on the Senior Unsecured Term Loan A Facility and recorded $2.9 million to “Loss on debt extinguishment, modifications and termination of derivative instruments” in the accompanying Condensed Consolidated Statements of Operations, representing the write-off of unamortized deferred financing costs. Additionally, the Company recorded a ~~minimum borrowing base~~reclassification from other comprehensive income to earnings to “Loss on debt ~~service coverage ratio~~extinguishment, modification, and termination of ~~greater than or equal~~derivative instruments” related to ~~2.00 to 1.00;~~

~~a minimum tangible net worth requirement~~the amortization of ~~greater than or equal to $900 million plus 70% of any future net equity proceeds~~the portion deferred following the ~~completion~~termination of interest rate swaps related to the ~~IPO transactions; and~~Senior Unsecured Term Loan A Facility.

~~a maximum recourse secured debt ratio~~Aggregate future repayments of ~~less than or equal to 20% of our total asset value.~~indebtedness

~~Our 2018 Senior Secured Credit Facilities are fully recourse to our Operating Partnership. As of March 31, 2018, the Company was in compliance with all debt covenants.~~

The aggregate maturities of the Company’s total indebtedness as of ~~March 31, 2018,~~June 30, 2021, including amortization of principal amounts due under the ~~Term Loan A and~~ mortgage notes, for each of the next five years and thereafter, are as follows:


As of June 30, 2021:	(In thousands)
June 30, 2022	$	7,129
June 30, 2023	405,134
June 30, 2024	0
June 30, 2025	326,650
June 30, 2026	200,000
Thereafter	1,639,350
Aggregate principal amount of debt	2,578,263
Less unamortized deferred financing costs	(11,994)
Total debt net of unamortized deferred financing costs	$	2,566,269

As of March 31, 2018: (In thousands)
Year 1 $ 24,069
Year 2 25,199
Year 3 614,956
Year 4 7,102
Year 5 482,381
Thereafter 260,456
Aggregate principal amount of debt 1,414,163
Less unamortized discount and deferred financing costs (15,936 )
Total debt net of discount and deferred financing costs $ 1,398,227

6.7. Derivative Financial Instruments

Designated Nonderivative Financial Instruments

As of June 30, 2021, the Company has designated €750 million debt and accrued interest as a hedge of our net investment in the international subsidiaries resulting from the Agro Acquisition. The remeasurement of these instruments is recorded in “Change in unrealized net gain (loss) on foreign currency” on the accompanying Condensed Consolidated Statements of Comprehensive Income.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

Derivative Financial Instruments

The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company has entered into multiple interest rate swap agreements. The January 2019 agreement hedged $100.0 million of variable interest-rate debt and the August 2019 agreement hedged $225.0 million of variable interest-rate debt. Each agreement converted the Company’s variable-rate debt to a fixed-rate basis into 2024, thus reducing the impact of interest rate changes on future interest expense. These agreements involved the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments iswas to reduce its exposure to fluctuations in cash flows due to changes in interest rates. Both of these interest rate swaps were terminated during the ~~variable interest rates~~fourth quarter of 2020. The Company records a reclassification from other comprehensive income to earnings to “Loss on debt extinguishment, modification, and termination of derivative instruments” related to the amortization of the portion deferred following the termination, which totaled $1.4 million on the accompanying Condensed Consolidated Statement of Operations for the six months ended June 30, 2021. Additionally, during the next twelve months, the Company estimates that an additional $2.5 million will be reclassified as an increase to “Loss on debt extinguishment, modification, and termination of derivative instruments”. The Company classifies cash inflows and outflows from derivatives that hedge interest rate risk within operating activities on the Condensed Consolidated Statements of Cash Flows.

The Company is subject to volatility in foreign exchange rates due to foreign-currency denominated intercompany loans. The Company implemented cross-currency swaps on certain ~~indebtedness~~of these loans to manage the foreign currency exchange rate risk. These agreements effectively mitigate the Company’s exposure to fluctuations in cash flows due to foreign exchange rate risk by converting the Company’s floating exchange rate to a fixed-rate basis for the life of the intercompany loans. These agreements involve the receipt of fixed USD amounts in exchange for payment of fixed AUD and NZD amounts over the life of the respective intercompany loan. The Company’s intercompany loan receivable balances of $153.5 million AUD and $37.5 million NZD were hedged under the cross-currency swap agreements at June 30, 2021 and December 31, 2020.

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the next twelve months, the Company estimates that an additional $0.3 million will be reclassified as an increase to gain/loss on foreign exchange.

The Company is subject to volatility in foreign currencies against its functional currency, the US dollar. Periodically, the Company uses foreign currency derivatives including currency forward contracts to manage its exposure to fluctuations in exchange rates. While these derivatives are hedging the fluctuations in foreign currencies, they do not meet the requirements to be accounted for as hedging instruments. As a result, the changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

During 2019, in conjunction with the funding of the Nova Cold Acquisition, the Company entered into a foreign exchange forward with a notional to purchase CAD $217.0 million and sell USD with a maturity date of January 2, 2020. The Company simultaneously entered into a second contract with a notional to sell CAD $217.0 million and purchase USD with a maturity of January 31, 2020. These forwards were not designated as hedges in a qualifying hedging relationships. During the first quarter of 2020, the 2 outstanding foreign exchange forward contracts matured. The first contract with a notional to purchase CAD $217.0 million and sell USD matured on January 2, 2020 and settled for a gain of $2.1 million. The second contract with a notional to sell CAD $217.0 million and purchase USD maturing on January 31, 2020 was subsequently designated as a net investment hedge on January 2, 2020.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

The Company is also exposed to fluctuations in foreign exchange rates on property investments it holds in foreign countries. The Company uses forward currency forwards to hedge its exposure to changes in exchange rates on certain of its foreign ~~subsidiaries. The Company’s strategy to achieve that objective involves entering into interest rate swap contracts. There have been no significant~~investments as well. For derivatives designated as net investment hedges, the changes in the ~~Company's policy~~fair value of the derivatives are reported in Accumulated Other Comprehensive Income as part of the cumulative translation adjustment. Amounts are reclassified out of accumulated other comprehensive income into earnings when the hedged net investment is either sold or ~~strategy~~substantially liquidated.

On January 2, 2020, the Company designated the above noted forward currency contract with a notional to sell CAD $217.0 million and purchase USD maturing on January 31, 2020. This contract was then settled for ~~utilizing derivative instruments from what~~a gain of $0.2 million and a new contract was ~~disclosed in its consolidated financial statements contained in~~entered into with same notional to sell CAD $217.0 million and purchase USD which matured on February 28, 2020. The second contract was settled for a gain of $2.8 million upon the ~~Annual Report on Form 10-K for the year ended December 31, 2017.~~maturity date of February 28, 2020.

As of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017,~~2020, the ~~aggregate fair values of these cash flow~~Company did not have any foreign currency forwards that were designated as net investment hedges ~~were $2.4 million and $2.5 million, respectively, which are included in the "Accounts payable and accrued expenses" line of the accompanying condensed consolidated balance sheets.~~ outstanding.

The Company determines the fair value of these derivative instruments using a present value calculation with significant observable inputs classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the Condensed Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the Condensed Consolidated Balance Sheets within “Accounts payable and accrued expenses”. The following table illustrates the disclosure in tabular format of fair value amounts of derivative instruments at June 30, 2021 and December 31, 2020 (in thousands):


			Derivative Assets						Derivative Liabilities
			June 30, 2021				December 31, 2020				June 30, 2021				December 31, 2020


Designated derivatives
Foreign exchange contracts			$	5			$	0			$	4,594			$	9,611




Total derivatives	$	5			$	0			$	4,594			$	9,611

The following table ~~summarizes~~presents the ~~impact~~effect of the Company’s ~~interest rate swaps designated as cash flow hedges~~derivative financial instruments on the ~~results~~accompanying Condensed Consolidated Statements of ~~operations~~Operations for the three and six months ended June 30, 2021 and 2020, including the impacts to Accumulated Other Comprehensive Income ~~(OCI) during the three-month period ended March 31, 2018 and 2017:~~

(AOCI) (in thousands):

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Notes to Condensed Consolidated Financial Statements

- (Unaudited)


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

	Three Months Ended June 30,					Three Months Ended June 30,
	2021		2020			2021		2020

Interest rate contracts	$	0	$	(1,729)	Interest expense	$	0	$	(949)
Interest rate contracts	0		0		Loss on debt extinguishment, modifications and termination of derivative instruments(1)	(801)		0
Foreign exchange contracts	2,350		(15,097)		Foreign currency exchange gain, net	1,588		(12,309)
Foreign exchange contracts	0		0		Interest expense	(46)		(74)

Total designated cash flow hedges	$	2,350	$	(16,826)		$	741	$	(13,332)

(1) In conjunction with the termination of the interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. As of June 30, 2021, the Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction.


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

	Six Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020

Interest rate contracts	$	0	$	(17,994)	Interest expense	$	0	$	(939)
Interest rate contracts	0		0		Loss on debt extinguishment, modifications and termination of derivative instruments(1)	(1,428)		0
Foreign exchange contracts	5,022		8,364		Foreign currency exchange gain, net	3,959		3,885
Foreign exchange contracts	0		0		Interest expense	(139)		207
Foreign exchange forwards	0		5,250			0		0
Total designated cash flow hedges	$	5,022	$	(4,380)		$	2,392	$	3,153

Interest expense recorded in the accompanying Condensed Consolidated Statements of Operations was $26.6 million and $23.2 million during the three months ended June 30, 2021 and 2020, respectively, and $52.5 million and $47.0 million during the six months ended June 30, 2021 and 2020, respectively. The Company recorded total foreign currency exchange loss, net in its Condensed Consolidated Statements of Operations of $0.1 million for

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

Three Months Ended March 31,
2018 2017
(In thousands)
(Gain) loss recognized as OCI, net of tax (effective portion) $ (36 ) $ 348
Loss reclassified from AOCI into interest expense, net of tax 365
376
the three months ended June 30, 2021 and a nominal gain for total foreign currency exchange gain, net for the six months ended June 30, 2021, During the three months ended June 30, 2020, the Company recorded total foreign currency exchange gain, net in its Condensed Consolidated Statements of Operations of $0.3 million. The total foreign currency exchange loss, net for the six months ended June 30, 2020 was $0.2 million.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives ~~have been designated~~ as ~~cash flow hedges; therefore,~~of June 30, 2021 and December 31, 2020. The net amounts of derivative assets or liabilities can be reconciled to the ~~effective portion~~tabular disclosure of fair value. The tabular disclosure of fair value provides the ~~changes in~~location that derivative assets and liabilities are presented on the accompanying Condensed Consolidated Balance Sheets (in thousands):


June 30, 2021
Offsetting of Derivative Assets
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets presented in the Condensed Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	5	$	0	$	5	$	(5)	$	0	$	0

Offsetting of Derivative Liabilities
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Liabilities presented in the Condensed Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	(4,594)	$	0	$	(4,594)	$	5	$	0	$	(4,589)

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Notes to Condensed Consolidated Financial Statements - (Unaudited)


December 31, 2020
Offsetting of Derivative Assets
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets presented in the Condensed Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	0	$	0	$	0	$	0	$	0	$	0

Offsetting of Derivative Liabilities
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Liabilities presented in the Condensed Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	9,611	$	0	$	9,611	$	0	$	0	$	9,611

As of June 30, 2021, the fair value of derivatives ~~will~~in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $4.9 million. As of June 30, 2021, the Company has not posted any collateral related to these agreements.

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be ~~recognized~~declared in ~~AOCI. As the critical terms~~default on its derivative obligations if repayment of the ~~interest rate swaps match~~underlying indebtedness is accelerated by the ~~underlying debt~~lender due to the Company’s default on the indebtedness. In addition, termination events such as the Company’s credit agreement not being ~~hedged, no ineffectiveness is recognized~~secured, or not being guaranteed pursuant to the Company, could cause the Company to be in default on ~~these swaps and, therefore, all unrealized changes in fair value are recorded in AOCI.~~its derivative obligations. The Company ~~classifies cash inflows and outflows from derivatives within operating activities~~has not defaulted on any of its derivative obligations.

If the ~~statement~~Company had breached any of ~~cash flows. Amounts reclassified from AOCI into earnings related~~these provisions at June 30, 2021, it could have been required to ~~realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to~~settle its obligations under the ~~swap contracts, which correspond to when interest payments are made on the Company’s hedged debt.~~agreements at their termination value of $4.9 million.

Refer to Note 1415 for additional details regarding the impact of the ~~Company's~~Company’s derivatives on AOCI for the three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~2020, respectively.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

8. Sale-Leasebacks of Real Estate

The Company’s outstanding sale-leaseback financing obligations of real estate-related long-lived assets as of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017~~2020 are as follows:


	Maturity	Interest Rate as of June 30, 2021	June 30, 2021		December 31, 2020
			(In thousands)
1 warehouse – 2010	7/2030	10.34%	$	18,460	18,669
11 warehouses – 2007	9/2027	7.00%-19.59%	91,358		93,316
3 facilities – 2007 (Agro)	7/2031	10%	68,721		67,229
1 facility – 2013 (Agro)	12/2033	10%	5,976		5,846
Total sale-leaseback financing obligations			$	184,515	$	185,060

Maturity Interest Rate as of March 31, 2018 March 31, 2018 December 31, 2017
(In thousands)
1 warehouse – 2010 8/2030 10.34% $ 19,416
$ 19,457
11 warehouses – 2007 9/2017 to 9/2027 7.00%–19.59% 101,495
102,059
Total sale-leaseback financing obligations $ 120,911
$ 121,516

8.9. Fair Value Measurements

The Company categorizes assets and liabilities that are recorded at fair values into one of three tiers based upon fair value hierarchy. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and revolving line of credit approximate their fair values due to the short-term maturities of the instruments.

The ~~Company's~~Company’s mortgage notes, ~~term loan~~senior unsecured notes and ~~construction~~term loans are reported at their aggregate principal amount less unamortized ~~original issue discount and~~ deferred financing costs on the accompanying ~~condensed consolidated balance sheets.~~Condensed Consolidated Balance Sheets. The fair value of these financial instruments is estimated based on the present value of the expected coupon and principal payments using a discount rate that reflects the projected performance of the collateral asset as of each valuation date. The inputs used to estimate the fair value of the ~~Company's~~Company’s mortgage notes, ~~term loans~~

~~Americold Realty Trust~~senior unsecured notes and ~~Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

~~and construction~~term loans are comprised of Level 2 inputs, including senior industrial commercial real estate loan spreads, corporate industrial loan indexes, risk-free interest rates, and Level 3 inputs, such as future coupon and principal payments, and projected future cash ~~flows of the collateral asset.~~flows.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include ~~certain investments included~~derivative instruments. The fair value of interest rate swap and cross currency swap agreements, which are designated as cash flow hedges, and foreign currency forward contracts designated as net investment hedges, is based on inputs other than quoted market prices that are observable (Level 2). The fair value of foreign currency forward contracts is based on adjusting the spot rate utilized at the balance sheet date for translation purposes by an estimate of the forward points observed in ~~cash equivalent money market funds~~active markets (Level 2). Additionally, the fair value of derivatives includes a credit valuation adjustment to appropriately incorporate nonperformance risk for the Company and ~~restricted cash assets.~~the respective counterparty. Although the credit valuation adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, the significance of the impact on the overall valuation of our derivative positions is insignificant. The Company’s cash equivalent money market funds and restricted cash assets are valued at quoted market prices in active

F-38

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

markets for identical assets (Level 1), which the Company receives from the financial institutions that hold such investments on its behalf. The fair value hierarchy discussed above is also applicable to the Company’s pension and other post-retirement plans. The Company uses the fair value hierarchy to measure the fair value of assets held by various plans. The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. There were no transfers between levels within the hierarchy as of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017,~~2020, respectively.

The ~~Company's~~Company’s assets and liabilities recorded at fair value on a non-recurring basis include long-lived assets when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company estimates the fair values using unobservable inputs classified as Level 3 of the fair value hierarchy.

The Company’s assets and liabilities measured or disclosed at fair value are as follows:


	Fair Value	Fair Value
	Hierarchy	June 30, 2021		December 31, 2020
		(In thousands)
Measured at fair value on a recurring basis:




Cross-currency swap asset	Level 2	$	5	$	0
Cross-currency swap liability	Level 2	$	4,594	$	9,611








Disclosed at fair value:
Mortgage notes, senior unsecured notes and term loans(1)	Level 3	$	2,706,589	$	2,827,440

(1)The carrying value of mortgage notes, senior unsecured notes and term loans is disclosed in Note 6.

Fair Value
Fair Value Hierarchy March 31, 2018 December 31, 2017
(In thousands)
Measured at fair value on a recurring basis:
Cash and cash equivalents Level 1 $ 193,868
$ 48,873
Restricted cash Level 1 19,394
21,090
Interest rate swap liability Level 2 2,399
2,463
Measured at fair value on a non-recurring basis:
Long-lived assets written down:
Property, plant and equipment Level 3 $ —
$ 2,576
Disclosed at fair value:
Mortgage notes, term loans and construction loan Level 3 $ 1,435,944
$ 1,807,199

9.10. Dividends and Distributions

In order to comply with the REIT requirements of the Internal Revenue Code, or the Code, the Company is generally required to make common share distributions (other than capital gain distributions) to its shareholders at least equal to 90% of its REIT taxable income, as defined in the Code, computed without regard to the dividends paid deduction and net capital gains. The Company’s common share dividend policy is to distribute a percentage of cash flow to ensure distribution requirements of the IRS are met while allowing the Company to retain cash to meet other needs, such as principal amortization, capital improvements and other investment activities.

Common share dividends are characterized for U.S. federal income tax purposes as ordinary income, qualified dividend, capital gains, non-taxable income return of capital, or a combination of the four. Common share dividends that exceed current and accumulated earnings and profits (calculated for tax purposes) constitute a return of capital rather than a dividend and generally reduce the shareholder’s basis in the common share. To the extent that a dividend exceeds both current and accumulated earnings and profits and the shareholder’s basis in the common share, it will generally be treated as a gain from the sale or exchange of that shareholder’s common share. At the beginning of each year, we notify our shareholders of the taxability of the common share dividends paid during the preceding

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

year. The payment of common share dividends is dependent upon our financial condition, operating results, and REIT distribution requirements and may be adjusted at the discretion of the Company’s Board of Trustees.

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

The following tables summarize dividends and distributions declared and ~~distributions~~ paid to the holders of common shares, restricted stock and OP units for the ~~three~~six months ended June 30, 2021 and 2020.


Six Months Ended June 30, 2021
Month Declared/Paid	Distribution Per Share		Distributions Declared		Distributions Paid
(In thousands, except per share amounts)
December (2020)/January	$	0.21	$	0	$	53,820
December(a)			—		(693)		Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
December (2020)/January			—		6		Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
December (2020)/January(b)			—		1,823		Dividend equivalents paid on vested restricted stock units related to the market performance-based awards granted in 2018.
March/April	0.22		56,029		56,029
March(c)			—		(179)		Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
March/April			—		7		Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
May/July	0.22		57,897		0






			$	113,926	$	110,813

(a)Declared in December 2020 and included in the $53.8 million declared, see description to the right regarding timing of payment.

(b)Dividend equivalents accrued related to the market performance-based awards granted in 2018 paid in January following award vesting date of January 8, 2021.

(c)Declared in March ~~31, 2018~~ and ~~common shares and Series B Preferred Shares for~~included in the ~~three months ended March 31, 2017.~~$56.0 million declared, see description to the right regarding timing of payment.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

Three Months Ended March 31, 2018
Month Declared Dividend Per Share Distributions Paid or Accrued Month Paid
Common Shares Series B Preferred Shares
(In thousands, except per share amounts)
January ^(a)
$ 0.019
$ 1,291
$ 619
^(b)
January
March 0.140
20,145
—
April
21,436

Series B Preferred Shares - Fixed Dividend 1,198
^(c)

Total distributions paid to Series B Preferred Shares holders $ 1,817


Six Months Ended June 30, 2020
Month Declared/Paid	Dividend Per Share		Distributions Declared		Distributions Paid
(In thousands, except per share amounts)
December (2019)/January	$	0.20	$	0	$	38,796
December(a)			—		(169)		Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
December (2019)/January			—		4		Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
March/April	0.21		42,568		42,568
March(b)			—		(233)		Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
March/April			—		10		Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
May/July	0.21		43,271		0
			$	85,839	$	80,976


~~(a)~~	~~Stub period dividend paid to shareholders of record prior to the IPO.~~


~~(b)~~	~~Last Participating Dividend paid to holders of Series B Preferred Shares in connection with the conversion to common shares on the IPO date.~~


~~(c)~~	~~Last Fixed Dividend paid to holders of Series B Preferred Shares in connection with the conversion to common shares on the IPO date.~~

(a)Declared in December 2019 and included in the $38.8 million declared, see description to the right regarding timing of payment.

(b)Declared in March and included in the $42.6 million declared, see description to the right regarding timing of payment.

Three Months Ended March 31, 2017
Retirement Income Plan National Service-Related Pension Plan Other
Post-Retirement Benefits Superannuation Total
Components of net periodic benefit cost: (In thousands)
Service cost $ 16
$ 126
$ —
$ 58
$ 200
Interest cost 396
314
6
30
746
Expected return on plan assets (439 ) (294 ) —
(43 ) (776 )
Amortization of net loss 472
204
—
—
676
Amortization of prior service cost —
53
—
—
53
Effect of settlement 173
59
—
—
232
Net pension benefit cost $ 618
$ 462
$ 6
$ 45
$ 1,131

~~The Company expects to contribute $3.2 million to all plans in 2018.~~

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Notes to Condensed Consolidated Financial Statements

- (Unaudited)


	Six Months Ended June 30, 2020
	Retirement Income Plan		National Service-Related Pension Plan		Other Post-Retirement Benefits		Superannuation		Total
Components of net periodic benefit cost:	(In thousands)
Service cost	$	0	$	0	$	0	$	28	$	28
Interest cost	631		559		7		12		1,209
Expected return on plan assets	(1,001)		(733)		0		(31)		(1,765)
Amortization of net loss	508		303		0		0		811
Amortization of prior service cost	0		0		0		15		15

Net pension benefit cost	$	138	$	129	$	7	$	24	$	298

The service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Selling, general and administrative” and all other components of net period benefit cost are presented in “Other (expense) income, net” on the Condensed Consolidated Statements of Operations.

The Company expects to contribute to all plans an aggregate of $2.5 million in 2021, of which $1.2 million has been contributed through June 30, 2021.

Multi-Employer Plans

The Company contributes to a number of multi-employer benefit plans under the terms of collective bargaining agreements that cover union-represented employees. These plans generally provide for retirement, death, and/or termination benefits for eligible employees within the applicable collective bargaining units, based on specific eligibility/participation requirements, vesting periods, and benefit formulas. ~~Details on multi-employer benefit plans can be found in the Annual Report on Form 10-K for the year ended December 31, 2017.~~

The New England Teamsters & Trucking Industry Multi-Employer Fund (Fund) ~~is grossly~~was significantly underfunded in accordance with Employee Retirement Income Security Act of 1974 (ERISA) funding standards and, therefore, ERISA required the Fund to develop a Rehabilitation Plan, creating a new fund that minimizes the pension withdrawal liability. As a result, current employers participating in the Fund were given the opportunity to exit the Fund and convert to a new fund. During the third quarter of 2017, the Company took the option to exit the Fund and convert to the new fund. The ~~Company's~~Company’s portion of the unfunded liability (undiscounted), estimated at $13.7 million, will be repaid in equal monthly installments of approximately ~~$38 thousand~~$38,000 over 30 years, interest free. ~~Under the relevant U.S. GAAP standard, a participating employer withdrawing from a multi-employer plan should account for a loss contingency~~The Company recognized an expense and related liability equal to the present value of the withdrawal liability upon exiting the Fund, and ~~amortize~~amortizes the difference between such present value and the estimated unfunded liability through interest expense over the repayment period.

~~13.~~

14. Commitments and Contingencies

Letters of Credit

As of ~~March~~June 30, 2021 and December 31, ~~2018,~~2020, there were ~~$33.6~~$21.9 million and $21.7 million, respectively, of letters of credit issued on the Company’s ~~2018~~Senior Unsecured Revolving ~~Line~~Credit Facility.

Table of ~~Credit~~Contents

Americold Realty Trust and ~~as of December 31, 2017, there were $33.8 million of outstanding letters of credit issued on the Company’s 2015 Revolving Line of Credit.~~Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

Bonds

The Company had outstanding surety bonds of ~~$2.7~~$10.9 million and $10.1 million as of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017,~~2020, respectively. These bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.

Collective Bargaining Agreements

As of ~~March 31, 2018,~~June 30, 2021, approximately ~~52%~~36% of the Company’s labor force is covered by collective bargaining agreements. Collective bargaining agreements covering ~~approximately 14%~~less than 2% of the labor force are set to expire ~~in 2018.~~during the remaining six months ended December 31, 2021.

Legal Proceedings

In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and its legal counsel evaluate the merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency suggests that a loss is probable, and the amount can be reasonably estimated, then a loss is recorded.

In addition to the matters discussed below, the Company may be subject to litigation and claims arising from the ordinary course of business. In the opinion of management, after consultation with legal counsel, the outcome of

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

such matters is not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows.

Kansas Breach of Settlement Agreement Litigation

This case was served against the Company in Wyandotte County, Kansas, on January 17, 2013, alleging breach of a 1994 Settlement Agreement reached with customers of our predecessor company, Americold Corporation. The plaintiffs originally brought claims in 1992 arising from a fire the previous year in an underground warehouse facility.

In 1994, a settlement was reached whereby Americold Corporation agreed to the entry of a $58.7 million judgment against it and assigned its rights to proceed against its insurer to satisfy the judgment. The settlement agreement contained a standard “cooperation provision” ~~where~~in which Americold Corporation agreed to ~~sign~~execute any additional documents ~~and to take any actions~~ necessary to fulfill the intent of the settlement agreement. The plaintiffs then sued Americold Corporation’s ~~insurance company~~insurer to recover on the ~~amounts of the settlement. After decades of litigation, the~~consent judgment. The case was ultimately dismissed in 2012, and the Kansas Supreme Court ruled that the 1994 consent judgment had ~~expired.~~expired and was not revivable as a matter of law.

On September 24, 2012, the plaintiffs filed a separate claim in the district court of Wyandotte County, Kansas, alleging that the Company and one of its subsidiaries, Americold Logistics, LLC, as successors to Americold Corporation, are liable for the full amount of the judgment, based upon the ~~vague~~ allegation that the Company failed to execute a document or take action to keep the judgment alive and viable.

On February 7, 2013, the Company removed the case to the U.S. federal court and ultimately filed a motion ~~to dismiss the case on several grounds,~~for summary judgment, which the plaintiffs vigorously opposed. On October 4, 2013, the court granted ~~our~~the Company’s motion and dismissed the case in full. Only ~~one~~1 plaintiff appealed the dismissal to the U.S. Court of ~~Appeals where oral argument was heard in November 2014 before the Tenth Circuit in Denver.~~Appeals. The Court of Appeals ordered that the case be remanded to the Kansas State Court and the judgment in

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

favor of Americold be vacated, finding U.S. federal diversity jurisdiction did not exist over the Company. The Company petitioned the U.S. Supreme Court for ~~an Oral Argument that~~certiorari and oral argument occurred on January 19, 2016.

On March 7, 2016, the United States Supreme Court ~~handed down a~~ruled that there was no federal diversity jurisdiction. Following the decision, in the United States District Court for the District of Kansas ~~Breach of Settlement Agreement Litigation case. The decision was contrary to~~entered an Order vacating the ~~position that~~summary judgment and remanding the ~~Company argued and the matter was remanded back~~case to Kansas state ~~court for further proceedings.~~court. Regardless of the venue, the Company remains confident that its defenses on the merits of plaintiffs’ claims are strong under Kansas ~~law and the likelihood of any liability is remote.~~law.

Following remand to Kansas state court, ~~Plaintiffs~~plaintiffs initially petitioned the court to amend their complaint ~~that would result in the plaintiffs dropping the~~to drop their claim for damages and ~~seeking~~only seek an Order of Specific ~~Performance-namely~~Performance requiring Americold to ~~require Americold~~ sign a new document ~~to reinstate~~reinstating the consent judgment assigned in the 1994 Settlement Agreement. ~~No amended complaint was filed however and~~ Plaintiffs filed a later motion to add back the damages claim, which was granted in February 2018. ~~The parties now find themselves at~~

Since December 31, 2018, the ~~exact same position as when~~court granted the Company’s motions to dismiss Kraft and Safeway from the case ~~was initially filed. Americold maintains its position~~given they did not appeal the District Court’s Order dismissing their claims and are bound by the judgment entered against them. The Kraft and Safeway plaintiffs have appealed their dismissals. The trial court has stayed the proceedings pending the appeal. In addition, the Company has sued the Chubb Group seeking the court’s declaration that ~~any such renewal~~Chubb owes coverage of the ~~judgment~~amounts sought by plaintiffs and for bad faith damages for denying coverage. Given the status of the proceedings to date, a liability amount cannot be reasonably estimated. The Company believes the ultimate outcome of this matter will not have a material adverse impact on its condensed consolidated financial statements.

Preferred Freezer Services, LLC Litigation

On February 11, 2019, Preferred Freezer Services, LLC (“PFS”) moved by Order to Show Cause in the Supreme Court of the State of New York, New York County, asserting breach of contract and other claims against the Company and seeking to preliminarily enjoin the Company from acting to acquire certain properties leased by PFS. In its complaint and request for preliminary injunctive relief, PFS alleged that the Company breached a confidentiality agreement entered into in connection with the Company’s participation in a bidding process for the sale of PFS by contacting PFS’s landlords and by using confidential PFS information in bidding for the properties leased by PFS (the “PFS Action”).

PFS’s request for a preliminary injunction was denied after oral argument on February 26, 2019. On March 1, 2019, PFS filed an application for interim injunctive relief from the Appellate Division of the Supreme Court, First Judicial Department.

On April 2, 2019, while its application to the First Department was pending, PFS voluntarily dismissed its state court action, and First Department application, and re-filed substantially the same claims against the Company in the U.S. District Court for the Southern District of New York. In addition to an order enjoining Americold from making offers to purchase the properties leased by PFS, PFS sought compensatory, consequential and/or punitive damages. The Company filed a motion to require PFS to reimburse the Company for its legal fees it incurred for the state court action before PFS is ~~ineffective as~~allowed to proceed in the federal court action. On February 18, 2020, the Court granted Americold’s request for an award of legal fees from PFS but declined to stay the case pending payment of that award. As to the amount of the award, the Company and PFS have entered into a ~~matter~~stipulation that PFS will pay Americold $550,000 to reimburse the Company for its legal fees upon the conclusion of ~~law,~~the case.PFS has since amended its ~~defenses are strong~~complaint, and Americold has filed a motion to dismiss that amended complaint.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

On June 25, 2020, Fenway Polar Representative (“Fenway”), an entity alleging to represent the interests of the former shareholders of PFS, filed a lawsuit in the Supreme Court of the State of New York, New York County alleging based on similar factual allegations made in the PFS Action it is seeking damages in excess of $400 million due to the Company’s alleged fraudulent and tortious interference in the sale of PFS (the “Fenway Action”). On May 10, 2021, the trial court dismissed the Fenway case with prejudice finding that Fenway did not have standing to assert their claims. Fenway has appealed this decision.

The Company denies the allegations of the PFS Action and the ~~likelihood~~Fenway Action and believes the plaintiffs’ claims are without merit and intends to vigorously defend itself against the allegations. Given the status of ~~any~~the proceedings to date, a liability ~~is remote.~~cannot be reasonably estimated. The Company believes the ultimate outcome of this matter will not have a material adverse impact on its condensed consolidated financial statements.

Environmental Matters

The Company is subject to a wide range of environmental laws and regulations in each of the locations in which the Company operates. Compliance with these requirements can involve significant capital and operating costs. Failure to comply with these requirements can result in civil or criminal fines or sanctions, claims for environmental damages, remediation obligations, the revocation of environmental permits, or restrictions on the Company’s operations.

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

The Company records accruals for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies. The Company adjusts these accruals periodically as assessment and remediation efforts progress or as additional technical or legal information become available. The Company recorded nominal environmental liabilities in accounts payable and accrued expenses as of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017.~~2020. The Company believes it is in compliance with applicable environmental regulations in all material respects. Under various U.S. federal, state, and local environmental laws, a current or previous owner or operator of real estate may be liable for the entire cost of investigating, removing, and/or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the contamination. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for the entire clean-up cost. There are no ~~individually~~ material ~~remediation accruals.~~unrecorded liabilities as of June 30, 2021. Most of the Company’s warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the Environmental Protection Agency, and an accident or significant release of ammonia from a warehouse could result in injuries, loss of life, and property damage.

Occupational Safety and Health Act (OSHA)

The Company’s warehouses located in the U.S. are subject to regulation under OSHA, which requires employers to provide employees with an environment free from hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, and unsanitary conditions. 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 employees who may be injured at our warehouses. The Company records accruals for OSHA matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The Company believes that it is in substantial compliance with all OSHA regulations and that no material unrecorded liabilities exist as of ~~March 31, 2018~~June 30, 2021 and December 31, ~~2017.~~2020.

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Notes to Condensed Consolidated Financial Statements

- (Unaudited)

~~14.~~15. Accumulated Other Comprehensive ~~(Loss) Income~~Loss

The Company reports activity in AOCI for foreign currency translation adjustments, ofincluding the translation adjustment for investments in ~~foreign subsidiaries,~~partially owned entities, unrealized gains and losses on cash flow hedge derivatives, and minimum pension liability adjustments ~~net~~(net of ~~tax.~~tax). The activity in AOCI for the three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017~~2020 is as ~~follows:~~follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Pension and other postretirement benefits:
Balance at beginning of period, net of tax	$	(2,944)	$	(4,344)	$	(3,325)	$	(4,758)
Gain arising during the period	381		405		762		811
Less: Tax expense	0		0		0		0
Net gain arising during the period	381		405		762		811
Amortization of prior service cost (1)	15		7		15		15
Less: Tax expense	0		0		0		0
Net amount reclassified from AOCI to net (loss) income	15		7		15		15
Other comprehensive income, net of tax	396		412		777		826
Balance at end of period, net of tax	(2,548)		(3,932)		(2,548)		(3,932)
Foreign currency translation adjustments:
Balance at beginning of period, net of tax	(7,448)		(32,257)		3,234		(6,710)
Gain (loss) on foreign currency translation	7,026		10,337		(3,656)		(15,210)

Less: Tax expense	0		0		0		0
Net gain (loss) on foreign currency translation	7,026		10,337		(3,656)		(15,210)
Balance at end of period, net of tax	(422)		(21,920)		(422)		(21,920)
Designated derivatives:
Balance at beginning of period, net of tax	(3,267)		(6,697)		(4,288)		(2,658)
Unrealized gain (loss) on cash flow hedge derivatives	2,350		(16,826)		5,022		(9,630)
Unrealized gain on net investment hedge derivative	0		0		0		5,250
Less: Tax expense	0		0		0		0
Net gain (loss) on designated derivatives	2,350		(16,826)		5,022		(4,380)
Net amount reclassified from AOCI to net (loss) income (interest expense)	46		1,023		139		732
Net amount reclassified from AOCI to net (loss) income (loss on debt extinguishment, modifications and termination of derivative instruments)	801		0		1,428		0
Net reclassified from AOCI to net (loss) income (foreign exchange (gain) loss)	(1,588)		12,309		(3,959)		(3,885)
Balance at end of period, net of tax	(1,658)		(10,191)		(1,658)		(10,191)

Accumulated other comprehensive loss	$	(4,628)	$	(36,043)	$	(4,628)	$	(36,043)

(1)Amounts reclassified from AOCI for pension liabilities are recognized in “Selling, general and administrative” in the accompanying condensed consolidated statements of operations.

Three Months Ended March 31,
2018 2017
(In thousands)
Pension and other postretirement benefits:

Balance at beginning of period, net of tax $ (7,126 ) $ (12,880 )
Gain arising during the period 491
676
Less: Tax expense —
—
Net gain arising during the period 491
676
Amortization of prior service cost ⁽¹⁾
8
53
Less: Tax expense
—
—
Net amount reclassified from AOCI to net loss 8
53
Other comprehensive income, net of tax 499
729
Balance at end of period, net of tax (6,627 ) (12,151 )
Foreign currency translation adjustments:
Balance at beginning of period, net of tax 8,318
3,874
(Loss) gain on foreign currency translation (1,473 ) 3,235
Less: Tax expense/(Tax benefit) —
—
Net (loss)/gain on foreign currency translation (1,473 ) 3,235
Balance at end of period, net of tax 6,845
7,109
Cash flow hedge derivatives:
Balance at beginning of period, net of tax (1,422 ) (1,538 )
Unrealized loss on cash flow hedge derivatives (314 ) (869 )
Less: Tax expense/(Tax benefit) 15
(145 )
Net loss on cash flow hedge derivatives (329 ) (724 )
Net amount reclassified from AOCI to net loss (interest expense) 365
376
Balance at end of period, net of tax (1,386 ) (1,886 )

Accumulated other comprehensive loss $ (1,168 ) $ (6,928 )


~~(1)~~	~~Amounts reclassified from AOCI for pension liabilities are recorded in selling, general, and administrative expenses in the condensed consolidated statements of operations.~~

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

~~15. Related-Party Transactions~~

~~Transactions with Goldman~~

Affiliates of Goldman are part of the lending group that has $45.0 million, or approximately 4.9%, of the total commitment under the 2018 Senior Secured Credit Facilities. Another affiliate of Goldman is one of the participating lenders in the ANZ Loans (with a 2.5% participation in the Australia Term Loan and 31.8% in the New Zealand Term Loan). Goldman is also the counterparty to the interest rate swap agreements described in Note 6.

The Company is required to pay certain fees to Goldman, which may include interest on borrowings, unused facility fees, letter of credit participation fees, and letter of credit facility fees. During the three months ended March 31, 2018 and 2017, the Company paid interest expense and fees to Goldman totaling approximately $0.9 million and $0.3 million, respectively. Interest payable to Goldman was nominal as of March 31, 2018 and December 31, 2017.

~~Transaction with YF ART Holdings~~

On March 8, 2018, YF ART Holdings entered into a margin loan agreement pledging 54,952,774 common shares of beneficial interest, $0.01 par value per share, representing approximately 38.6% of the Company’s issued and outstanding common shares as of March 31, 2018. YF ART Holdings used the proceeds from the financing agreement to pay in full the outstanding investment, including the preferred return thereon, of Fortress, which ceased to be a limited partner in YF ART Holdings and no longer has any economic interest therein.

In connection with the pledge by YF ART Holdings described above, the Company delivered a consent and acknowledgement to YF ART Holdings and the lenders under such margin loan agreement in which the Company, among other matters, agreed, subject to applicable law and stock exchange rules, not to take any actions that would adversely affect the enforcement of the rights of the lenders under the loan documents. The Company is not a party to the margin loan agreement and has no obligations thereunder. In consideration of our agreement to enter into such consent and acknowledgment, YF ART Holdings entered into a letter agreement with us that provides that, among other matters, YF ART Holdings may not, without our prior written consent, directly or indirectly transfer or dispose of an amount greater than approximately 27.5 million common shares, subject to certain exceptions (including as relating to the margin loan agreement and related documents), for a ninety-day period beyond the lock-up period applicable to YF ART Holdings’ common shares under the lock-up agreement it entered into with the representatives of the underwriters for the IPO. The Company also entered into an amendment of the shareholders agreement, which addresses certain matters related to the margin loan agreement and related documents.

16. Segment Information

Our principal operations are organized into ~~four~~4 reportable segments: Warehouse, ~~Third-Party Managed,~~Third-party managed, Transportation and ~~Quarry.~~Other.

•Warehouse. Our primary source of revenues consists of rent and storage and warehouse services fees. Our rent and storage and warehouse services revenues are the key drivers of our financial performance. Rent and storage revenues consist of recurring, periodic charges related to the storage of frozen and perishable food and other products in our warehouses. We also provide these customers with a wide array of handling and other warehouse services, such as (1) receipt, handling and placement of products into our warehouses for storage and preservation, (2) retrieval of products from storage upon customer request, (3) blast freezing, which involves the rapid freezing of non-frozen products, including individual quick freezing for agricultural produce and seafood, (4) case-picking, which involves selecting product cases to build customized pallets, (5) kitting and repackaging, which

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

involves assembling custom product packages for delivery to retailers and consumers, and labeling services, (6) order assembly and load consolidation, (7) exporting and importing support services, (8) container handling, (9) cross-docking, which involves transferring inbound products to outbound trucks utilizing our warehouse docks without storing them in our warehouses ~~and~~ (10) government-approved temperature-controlled storage and inspection ~~services.~~services, (11) fumigation, (12) pre-cooling and cold treatment services, and (13) ripening. We may charge our customers in advance for storage and outbound handling fees. Cost of operations for our warehouse segment consists of power, other facilities costs, labor and other services costs.

~~Third-Party Managed.~~ •Third-party managed. We receive management and incentive fees, as well as reimbursement of substantially all expenses, for warehouses and logistics services that we manage on behalf of third-party owners/customers. Cost of operations for our third-party managed segment are reimbursed on a pass-through basis (typically within two weeks), with all reimbursements, plus an applicable mark-up, recognized as revenues under the relevant accounting guidance.

•Transportation. We charge transportation fees, including fuel surcharges, to our customers for whom we arrange the transportation of their products. Cost of operations for our transportation segment consist primarily of third-party carrier charges, which are impacted by factors affecting those carriers.

~~Quarry~~.•Other. In addition to our primary business segments, we ~~own~~owned a limestone quarry in Carthage, Missouri. Revenues ~~are~~were generated from the sale of limestone mined at our quarry. Cost of operations for our quarry ~~consist~~consisted primarily of labor, equipment, fuel and explosives.

We do not view the operation of the quarry as an integral part of our business, and as a result this business segment was subsequently sold on July 1, 2020.

Our reportable segments are strategic business units separated by ~~product and~~ service offerings. Each reportable segment is managed separately and requires different operational and marketing strategies. The accounting polices used in the preparation of our reportable segments financial information are the same as those used in the preparation of its condensed consolidated financial statements.

Our chief operating decision maker uses revenues and segment contribution to evaluate segment performance. We calculate segment contribution as earnings before interest expense, taxes, depreciation and amortization, and ~~excluding corporate~~exclude selling, general and administrative expense, acquisition, litigation and other expense, impairment ~~charges, restructuring charges, acquisition related costs,~~of long-lived assets, gain or loss on sale of real estate and all components of non-operating other income and ~~expense, and certain one-time charges. Corporate~~expense. Selling, general and administrative ~~function supports~~functions support all the business segments. Therefore, the related expense is not allocated to segments as the chief operating decision maker does not use it to evaluate segment performance.

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Notes to Condensed Consolidated Financial Statements - (Unaudited)

Segment contribution is not a measurement of financial performance under GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider our segment contribution as an alternative to operating income determined in accordance with GAAP.

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

The following table presents segment revenues and contributions with a reconciliation to income ~~(loss)~~ before income tax ~~and gain (loss) from sale of real estate, net of tax~~ for the ~~years~~three and six months ended ~~March~~June 30, 2021 and 2020 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Segment revenues:
Warehouse	$	503,734	$	372,411	$	989,185	$	753,479
Third-party managed	72,173		72,954		145,245		137,875
Transportation	78,800		34,861		155,072		70,778
Other	0		2,296		0		4,459
Total revenues	654,707		482,522		1,289,502		966,591

Segment contribution:
Warehouse	144,379		120,132		290,560		246,905
Third-party managed	1,693		3,299		6,075		7,068
Transportation	9,250		4,772		15,953		9,577
Other	(33)		135		(59)		190
Total segment contribution	155,289		128,338		312,529		263,740

Reconciling items:
Depreciation and amortization	(84,459)		(52,399)		(161,670)		(104,003)
Selling, general and administrative	(42,475)		(32,340)		(87,527)		(69,233)
Acquisition, litigation and other	(3,922)		(2,801)		(24,673)		(4,489)
Impairment of long-lived assets	(1,528)		(3,667)		(1,528)		(3,667)
Gain from sale of real estate	0		19,414		0		21,875
Interest expense	(26,579)		(23,178)		(52,535)		(47,048)
Interest income	191		261		415		848

Loss on debt extinguishment, modifications and termination of derivative instruments	(925)		0		(4,424)		(781)
Foreign currency exchange (loss) gain, net	(140)		315		33		(177)
Other expense, net	184		44		689		915
Loss from investments in partially owned entities	(61)		(129)		(761)		(156)

(Loss) income before income tax benefit (expense)	$	(4,425)	$	33,858	$	(19,452)	$	57,824

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

The following table details our assets by reportable segments, with a reconciliation to total assets reported for each of the periods presented in the accompanying Condensed Consolidated Balance Sheets.


	June 30, 2021		December 31, 2020
	(In thousands)
Assets:
Warehouse	$	5,078,094	$	4,815,587
Managed	47,064		52,818
Transportation	157,096		151,872
Other	0		35
Total segments assets	5,282,254		5,020,312

Reconciling items:
Corporate assets	357,353		621,836
Unallocated acquisitions(1)	2,140,971		2,144,096
Investments in partially owned entities	42,742		44,907
Total reconciling items	2,541,066		2,810,839
Total assets	$	7,823,320	$	7,831,151

(1) The assets acquired in 2020 related to the Agro acquisition are reflected in the tables above within the row titled ‘Unallocated Acquisitions’ as the acquired assets have not yet been assigned to the respective segments as of June 30, 2021 or December 31, ~~2018~~2020. The assets will be assigned to the Warehouse and ~~2017:~~Transportation segments during the measurement period.

Three Months Ended March 31,
2018 2017
(In thousands)
Segment revenues:
Warehouse $ 286,517
$ 275,807
Third-Party Managed 63,876
58,367
Transportation 38,345
36,181
Quarry 2,403
2,559
Total revenues 391,141
372,914

Segment contribution:
Warehouse 89,570
83,520
Third-Party Managed 3,777
2,988
Transportation 3,594
3,553
Quarry 346
903
Total segment contribution 97,287
90,964

Reconciling items:
Depreciation, depletion, and amortization (29,408 ) (29,408 )
Selling, general and administrative expense (31,947 ) (24,770 )
Loss from partially owned entities (139 ) (27 )
Interest expense (24,495 ) (27,727 )
Interest income 623
257
Loss on debt extinguishment and modification (21,385 ) (171 )
Foreign currency exchange gain (loss) 680
(2,773 )
Other income (expense), net 56
(467 )
(Loss) income before income tax $ (8,728 ) $ 5,878

17. ~~Earnings/(Loss)~~Earnings per Common Share

Basic and diluted ~~loss~~earnings per common share are calculated ~~using the two-class method~~ by dividing the net income or loss attributable to common shareholders by the basic and diluted weighted-average number of common shares outstanding ~~during each period. Holders of Series B Preferred Shares are entitled to cumulative dividends, which are added to~~in the ~~reported net loss whether or not declared or paid to determine~~period, respectively, using the ~~net loss attributable to common shareholders under~~allocation method prescribed by the two-class method. The Company applies this method to compute earnings per share because it distributes non-forfeitable dividend equivalents on restricted stock units and OP units granted to certain employees and non-employee trustees who have the right to participate in the distribution of common dividends while the restricted stock units and OP units are unvested.

The shares issuable upon settlement of forward sale agreements are reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of the Company’s common shares used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of common shares that would be issued upon full physical settlement of the forward sale agreements over the number of common shares that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). If and when the Company physically or net share settles the forward sale agreements, the delivery of common shares would result in an increase in the number of shares outstanding and dilution to earnings per share.

A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Weighted average common shares outstanding – basic	253,213	201,787	253,076	201,294
Dilutive effect of share-based awards	0	1,634	0	1,459
Equity forward contracts	0	1,877	0	1,834
Weighted average common shares outstanding – diluted	253,213	205,298	253,076	204,587

For the three and six months ended ~~March 31, 2018 and 2017,~~June 30, 2021, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net ~~loss.~~loss in both periods. Consequently, the Company did not have any adjustments in ~~these periods~~this period between basic and diluted loss per share related to ~~stock options, restricted stock units, warrants~~share-based awards and ~~convertible preferred~~equity forward contract stock shares.

The table below presents the weighted-average number of antidilutive potential common shares that are not considered in the calculation of diluted ~~loss~~(loss) income per ~~share:~~share (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Employee stock options	292	0	353	0
Restricted stock units	965	165	965	0
OP units	497	0	428	0
Equity forward contracts	603	0	5,134	0
	2,357	165	6,880	0

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

Three Months Ended
March 31, 2018 March 31, 2017
Series B Convertible Preferred Stock 8,494,733
33,240,261
Common share warrants 1,642,409
3,145,575
Employee stock options 5,347,188
6,217,966
Restricted stock units 611,927
565,093
16,096,257
43,168,895

18. Revenue from Contracts with Customers

Disaggregated Revenue

The following ~~table represents~~tables represent a disaggregation of revenue from contracts with customers for the three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017~~2020 by segment and geographic region:


	Three Months Ended June 30, 2021
	North America		Europe		Asia-Pacific		South America		Total
	(In thousands)
Warehouse rent and storage	$	167,038	$	19,622	$	15,078	$	2,902	$	204,640
Warehouse services(1)	220,622		27,926		41,260		1,649		291,457
Third-party managed	67,006		0		5,167		0		72,173
Transportation	39,037		33,838		5,497		428		78,800

Total revenues (2)	493,703		81,386		67,002		4,979		647,070
Lease revenue (3)	7,637		0		0		0		7,637
Total revenues from contracts with all customers	$	501,340	$	81,386	$	67,002	$	4,979	$	654,707


	Three Months Ended March 31, 2018													Three Months Ended June 30, 2020
	United States		Australia		New Zealand		Argentina		Canada		Total			North America		Europe		Asia-Pacific		South America		Total
	(In thousands)													(In thousands)
Warehouse rent and storage	$	104,360	$	10,339	$	3,872	$	1,553	$	—	$	120,124	Warehouse rent and storage	$	144,104	$	0	$	12,639	$	1,433	$	158,176
Warehouse services	125,248		30,438		4,117		987		—		160,790
Warehouse services(1)													Warehouse services(1)	173,510		0		34,566		672		208,748
Third-party managed	56,015		3,249		—		—		4,562		63,826		Third-party managed	68,756		0		4,198		0		72,954
Transportation	23,064		14,199		204		878		—		38,345		Transportation	28,065		0		6,327		469		34,861
Quarry	2,398		—		—		—		—		2,398
Total revenues ⁽¹⁾	311,085		58,225		8,193		3,418		4,562		385,483
Lease revenue ⁽²⁾	5,658		—		—		—		—		5,658
Other													Other	2,296		0		0		0		2,296
Total revenues (2)													Total revenues (2)	416,731		0		57,730		2,574		477,035
Lease revenue (3)													Lease revenue (3)	5,487		0		0		0		5,487
Total revenues from contracts with all customers	$	316,743	$	58,225	$	8,193	$	3,418	$	4,562	$	391,141	Total revenues from contracts with all customers	$	422,218	$	0	$	57,730	$	2,574	$	482,522

(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $3.5 million for the three months ended June 30, 2021. This revenue is generated by an entity acquired in December 2020, therefore there was no related revenue during the three months ended and June 30, 2020.

(2)Revenues are within the scope of ASC 606, Revenue From Contracts with Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.

(3)Revenues are within the scope of Topic 842, Leases.

Three Months Ended March 31, 2017
United States Australia New Zealand Argentina Canada Total
(In thousands)
Warehouse rent and storage $ 98,706
$ 9,384
$ 4,425
$ 2,358
$ —
$ 114,873
Warehouse services 123,549
28,128
3,497
967
—
156,141
Third-party managed 52,486
1,504
—
—
4,327
58,317
Transportation 21,272
13,269
199
1,441
—
36,181
Quarry 2,553
—
—
—
—
2,553
Total revenues ⁽¹⁾
298,566
52,285
8,121
4,766
4,327
368,065
Lease revenue ⁽²⁾
4,849
—
—
—
—
4,849
Total revenues from contracts with all customers $ 303,415
$ 52,285
$ 8,121
$ 4,766
$ 4,327
$ 372,914


~~(1)~~	~~Revenues are within the scope of ASC 606: Revenue From Contracts With Customers~~. ~~Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.~~


~~(2)~~	~~Revenues are within the scope of Topic 840, Leases.~~

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Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements

- (Unaudited)


	Six Months Ended June 30, 2021
	North America		Europe		Asia-Pacific		South America		Total
	(In thousands)
Warehouse rent and storage	$	331,285	$	36,874	$	30,254	$	5,328	$	403,741
Warehouse services	431,466		53,262		83,730		3,174		571,632
Third-party managed	134,702		0		10,543		0		145,245
Transportation	79,352		64,450		10,470		800		155,072

Total revenues (1)	976,805		154,586		134,997		9,302		1,275,690
Lease revenue (2)	13,812		0		0		0		13,812
Total revenues from contracts with all customers	$	990,617	$	154,586	$	134,997	$	9,302	$	1,289,502


	Six Months Ended June 30, 2020
	North America		Europe		Asia-Pacific		South America		Total
	(In thousands)
Warehouse rent and storage	$	286,466	$	0	$	25,640	$	2,465	$	314,571
Warehouse services	355,509		0		70,694		1,302		427,505
Third-party managed	129,482		0		8,393		0		137,875
Transportation	55,549		0		14,276		953		70,778
Other	4,448		0		0		0		4,448
Total revenues (1)	831,454		0		119,003		4,720		955,177
Lease revenue (2)	11,414		0		0		0		11,414
Total revenues from contracts with all customers	$	842,868	$	0	$	119,003	$	4,720	$	966,591

(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $6.4 million for the six months ended June 30, 2021. This revenue is generated by an entity acquired in December 2020, therefore there was no related revenue during the six months ended June 30, 2020.

(3)Revenues are within the scope of Topic 842, Leases.

Performance Obligations

Substantially all our revenue for warehouse storage and handling services, and management and incentive fees earned under third-party managed and other contracts is recognized over time as the customer benefits ~~equally~~ throughout the period until the contractual term expires. Typically, revenue is recognized over time using an output measure (e.g. passage of time) to measure progress. Revenue recognized at a point in time upon delivery when the customer typically obtains control, include most accessorial services, transportation services, reimbursed costs and quarry product shipments.

For arrangements containing non-cancellable contract terms, any variable consideration related to storage renewals or incremental handling charges above stated minimums are 100% constrained and not included in aggregate amount of the transaction price allocated to the unsatisfied performance obligations disclosed below, given the degree in difficulty in estimation. Payment terms are generally 0 - 30 days upon billing, which is typically monthly, either in advance or subsequent to the performance of services. The same payment terms typically apply for arrangements containing variable consideration.

Table of Contents

Americold Realty Trust and Subsidiaries

Notes to Condensed Consolidated Financial Statements - (Unaudited)

The Company has no material warranties or obligations for allowances, refunds or other similar obligations.

~~At March 31, 2018,~~As of June 30, 2021, the Company had ~~$390.9~~$642.6 million of remaining unsatisfied performance obligations from contracts with customers subject to a non-cancellable ~~term~~terms and ~~within contracts that~~ have an original expected duration exceeding one year. These obligations also do not include variable consideration beyond the non-cancellable term, which due to the inability to quantify by estimate, is fully constrained. The Company expects to recognize approximately ~~17%~~16% of these remaining performance obligations as revenue in ~~2018, an additional 19% by 2019 with~~ 2021, and the ~~remaining 64%~~remaining 84% to be recognized over a weighted average period of ~~7.5~~14.0 years through ~~2029.~~2038.

As part of the Company’s adoption of ASU 2014-09 in the first quarter of 2018, the Company elected to use the practical expedient under ASC 606-10-65-1(f)(3), pursuant to which the Company has excluded disclosures of transaction prices allocated to remaining performance obligations and when the Company expects to recognize such revenue for all periods prior to the date of initial application of ASU 2014-09.

Contract Balances

The timing of revenue recognition, billings and cash collections results in accounts receivable (contract assets), and unearned revenue (contract liabilities) on the ~~consolidated balance sheets.~~accompanying Condensed Consolidated Balance Sheets. Generally, billing occurs monthly, subsequent to revenue recognition, resulting in contract assets. However, the Company may bill and receive advances ~~or deposits from customers, particularly~~ on storage and handling services, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the ~~consolidated balance sheets~~accompanying Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the three and six months ended ~~March 31, 2018,~~June 30, 2021, were not materially impacted by any other factors.

Opening and closing receivables balances related to contracts with customers accounted for under ASC 606 were ~~$177.0~~$319.8 million and ~~$198.7~~$321.5 million ~~at March 31, 2018~~as of June 30, 2021 and December 31, ~~2017,~~2020, respectively, ~~and $183.3 million~~ and $198.4 million ~~at March 31, 2017~~and $213.2 million as of June 30, 2020 and December 31, ~~2016,~~2019, respectively. All other trade receivable balances relate to contracts accounted for under ASC ~~840.~~842.

Opening and closing balances in unearned revenue related to contracts with customers were ~~$18.2~~$20.3 million and ~~$18.8~~$19.2 million ~~at March 31, 2018~~as of June 30, 2021 and December 31, ~~2017,~~2020, respectively, and ~~$17.1~~$15.3 million and ~~$17.9~~$16.4 million ~~at March 31, 2017~~as of June 30, 2020 and December 31, ~~2016,~~2019, respectively. Substantially all revenue that was included in the contract liability

~~Americold Realty Trust and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements~~

balances at the beginning of ~~2018~~2020 and ~~2017~~2019 has been recognized as of ~~March 31, 2018~~June 30, 2021 and ~~March 31, 2017,~~June 30, 2020, respectively, and represents revenue from the satisfaction of monthly storage and handling services with inventory that turns on average ~~inventory turns of approximately~~every 30 days.

19. Subsequent Events

On August 3, 2021, the Company entered into an equity purchase agreement to acquire Newark Facility Management for $390 million. The Company expects the transaction to close in September 2021.

Item 2. ~~Management~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements included in this ~~quarterly report~~Quarterly Report on Form 10-Q. In addition, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2020.

~~MANAGEMENT'S~~MANAGEMENT’S OVERVIEW

We are the world’s largest ~~owner~~publicly traded REIT focused on the ownership, operation, acquisition and ~~operator~~development of temperature-controlled warehouses. We are organized as a self-administered and self-managed REIT with proven operating, development and acquisition expertise. As of ~~March 31, 2018,~~June 30, 2021, we operated a global network of ~~158~~246 temperature-controlled warehouses encompassing ~~933.9 million~~over 1.4 billion cubic feet, with ~~140~~200 warehouses in ~~the United States, six~~North America, 27 in Europe, 16 warehouses in ~~Australia, seven warehouses in New Zealand, two warehouses in Argentina~~Asia-Pacific, and three warehouses in ~~Canada. We also own and operate a limestone quarry through a separate business segment.~~South America. In addition, we hold atwo minority ~~interest~~interests in ~~the China JV,~~Brazilian-based joint ventures, one with SuperFrio, which owns or operates 1333 temperature-controlled warehouses ~~located in China. We view~~ and ~~manage our business through three primary business segments, warehouse, third–party managed and transportation. Additionally we operate a quarry and have a minority investment in the China JV.~~one with Comfrio, which owns or operates 24 temperature-controlled warehouses.

Components of Our Results of Operations

Warehouse. Our primary source of revenues consists of rent, ~~and~~ storage, and warehouse services fees. Our rent, ~~and~~ storage, and warehouse services revenues are the key drivers of our financial performance. Rent and storage revenues consist of recurring, periodic charges related to the storage of frozen, ~~and~~ perishable ~~food and~~or other products in our warehouses by our customers. We also provide these customers with a wide array of handling and other warehouse services, such as (1) receipt, handling and placement of products into our warehouses for storage and preservation, (2) retrieval of products from storage upon customer request, (3) blast freezing, which involves the rapid freezing of non-frozen products, including individual quick freezing for agricultural produce and seafood, (4) case-picking, which involves selecting product cases to build customized pallets, (5) kitting and repackaging, which involves assembling custom product packages for delivery to retailers and consumers, and labeling services, (6) order assembly and load consolidation, (7) exporting and importing support services, (8) container handling, (9) cross-docking, which involves transferring inbound products to outbound trucks utilizing our warehouse docks without storing them in our warehouses, ~~and~~ (10) government-approved temperature-controlled storage and inspection ~~services.~~services, (11) fumigation, (12) pre-cooling and cold treatment services, and (13) ripening. We refer to these handling and other warehouse services as our value-added services.

Cost of operations for our warehouse segment ~~consists~~consist of power, other facilities costs, labor, and other service costs. Labor, ~~our~~the largest component of the cost of operations from our warehouse segment, consists primarily of employee wages, benefits, and workers’ compensation. Trends in our labor expense are influenced by changes in headcount and compensation levels, changes in customer requirements, workforce productivity, labor availability, governmental policies and regulations, variability in costs associated with medical ~~insurance.~~insurance and the impact of workplace safety programs, inclusive of the number and severity of workers’ compensation claims. Labor expense can also be impacted as a result of discretionary bonuses. In response to the COVID-19 pandemic, we have incorporated certain activities such as staggered break schedules, social distancing, and other changes to processes that can create inefficiencies, all of which we expect to continue to incur going forward. Our second largest cost of operations from our warehouse segment is power utilized in the operation of our temperature-controlled

warehouses. As a result, trends 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 ~~forward~~fixed rate agreements or, to the extent possible and appropriate, ~~increase~~through rate escalations or power surcharge provisions within our customer contracts. Additionally, business mix impacts power expense depending on the ~~rates we charge our customers for storage in our warehouses.~~temperature zone or type of freezing capabilities required. Other facilities costs include utilities

other than power, property insurance, property taxes, sanitation (which include incremental supplies as a result of COVID-19), repairs and maintenance on real estate, rent under real property operating leases, where applicable, security, and other related facilities costs. Other services costs include equipment costs, warehouse consumables (e.g., shrink-wrap and uniforms), PPE to maintain the health and safety of our associates, warehouse administration and other related services costs.

Third-Party Managed. We receive a reimbursement of substantially all expenses for warehouses that we manage on behalf of third-party owners, with all reimbursements recognized as revenues under the relevant accounting guidance. We also earn management fees, incentive fees upon achieving negotiated performance and cost-savings results, or an applicable mark-up on costs. Cost of operations for our third-party managed segment is reimbursed on a pass-through basis (typically within two weeks).

Transportation. We charge transportation fees, including fuel surcharges, to our customers for whom we arrange the transportation of their products. Cost of operations for our transportation segment consists primarily of third-party carrier charges, which are impacted by factors affecting those carriers. We supplemented our regional, national and truckload consolidation business with the Hall’s acquisition, which services the Northeast corridor of the U.S. with an owned and maintained fleet. Our acquisition of Agro Merchants further expands our Transportation service offering. Agro Merchants operates its own fleet of temperature-controlled vehicles in the U.S., Ireland and UK and also offers a variety of non-asset based transportation management services. These include multi-modal global freight forwarding services to support our customers’ needs.

~~Quarry~~. In addition to our primary business segments, we own and operate a limestone quarry in Carthage, Missouri. Revenues are generated from the sale of limestone mined at our quarry. Cost of operations for our quarry consists primarily of labor, equipment, fuel and explosives.

Other Consolidated Operating Expenses. We also incur depreciation ~~depletion~~ and amortization expenses, ~~and~~ corporate-level selling, general and administrative expenses and corporate-level acquisition, litigation and other expenses.

Our depreciation ~~depletion~~ 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. ~~Depletion relates to the reduction of mineral resources resulting from the operation of our limestone quarry.~~ Amortization relates primarily to intangible assets for customer ~~relationships and below-market leases.~~relationships.

Our corporate-level selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, business development, account management, project management, marketing, engineering, supply-chain solutions, human resources and information technology personnel, as well as expenses related to equity incentive plans, communications and data processing, travel, professional fees, bad ~~debts,~~debt, training, office equipment and supplies. Trends in corporate-level selling, general and administrative expenses are influenced by changes in headcount and compensation levels and achievement of incentive compensation ~~targets, and variability in costs associated with pension obligations.~~targets. To position ourselves to meet the challenges of the current business environment, we have implemented a shared services support structure to better manage costs and enhance the efficiency of our operations.

Our corporate-level acquisition, litigation and other expenses consist of costs that we view outside of selling, general and administrative expenses with a high level of variability from period-to-period, and include the following:

•Acquisition related costs include costs associated with transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees. We also

include integration costs pre- and post-acquisition that reflect work being performed to facilitate merger and acquisition integration, such as employee retention expense and work associated with information systems and other projects including spending to support future acquisitions, which primarily consist of professional services.

•Litigation costs incurred in order to defend ourselves from litigation charges outside of the normal course of business and related settlement costs.

•Severance costs representing certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies, and reduction in workforce costs associated with exiting or selling non-strategic warehouses.

•Equity acceleration costs representing the unrecognized expense for share-based awards that vest and convert to common shares in advance of the original negotiated vesting date and any other equity award changes resulting in accounting for the award as a modification.

•Non-offering related equity issuance expenses whether incurred through our initial public offering, follow-on offerings or secondary offerings.

•Terminated site operations costs represent expenses incurred to return leased sites to their original physical state at lease inception in connection with the termination of the applicable underlying lease. These terminations were part of our strategic efforts to exit or sell non-strategic warehouses as opposed to ordinary course lease expirations. Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our condensed consolidated statement of operations.

•Other costs relate to insurance claim deductibles and related recoveries (second quarter 2021) and additional superannuation pension costs related to prior years upon review by the Australian Tax Office (third quarter 2020).

Key Factors Affecting Our Business and Financial Results

Acquisitions and Joint Ventures

On May 28, 2021, we acquired Bowman Stores for £75.5 million, or $107.1 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On May 5, 2021, we acquired KMT Brrr! for $70.8 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On March 1, 2021, we acquired Liberty Freezers for C$55.0 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.

On December 30, 2020, we completed the acquisition of Agro Merchants for total consideration of $1.59 billion, including cash received of $47.5 million. This was comprised of cash consideration totaling $1.08 billion, of which $49.7 million was deferred, and the issuance of 14,166,667 common shares of beneficial interest to Oaktree and Agro management, with a fair value of $512.1 million based upon the closing share price on December 29, 2020 of $36.15. Financing lease and sale-leaseback obligations associated with the acquisition totaled $112.7 million and when added to the total consideration transferred brings the total transaction cost to approximately $1.7 billion. Agro Merchants operated more than 236 million cubic feet of temperature-controlled warehouse and distribution space across 46 facilities and provided transportation services in the United States, Europe, Australia and Chile. The Chile facility and operations were subject to a joint venture agreement whereby

there was a non-controlling interest holder with a 35% ownership interest. The results of this facility were consolidated in our results of operations. During the second quarter of 2021, we purchased the 35% ownership interest from the third party, and now own 100% of this facility and the operations. Since the date of acquisition, we have reported the results of the facilities within our warehouse segment, and the results of Agro’s transportation services within our transportation segment.

On November 2, 2020, we completed the acquisition of New Jersey based Hall’s Warehouse Corporation for $489.2 million. Hall’s consisted of eight facilities near the Port of Newark. Hall’s also provides transportation services to its customers. Since the date of acquisition, we have reported the results of the facilities within our warehouse segment, and the results of Hall’s transportation services within our transportation segment.

On August 31, 2020, we completed the acquisition of Caspers Cold Storage for cash consideration of approximately $25.6 million utilizing available cash on hand. Caspers consisted of a single temperature-controlled warehouse located in Tampa, Florida. Since the date of acquisition, we have reported the results of this facility within our warehouse segment.

Additionally, on August 31, 2020, we completed the acquisition of AM-C Warehouses for cash consideration of approximately $82.7 million utilizing available cash on hand. AM-C Warehouses consisted of an owned facility in Mansfield, Texas and a leased facility in Grand Prairie, Texas. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment.

On March 6, 2020, we acquired a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. for Brazil Real Dollars of $117.8 million, or approximately USD $25.7 million, inclusive of certain legal fees. We funded the purchase price using cash on hand. Our pro-rata share of SuperFrio’s results are included within “(Loss) income from investments in partially owned entities”. As of June 30, 2021, SuperFrio owns or operates 33 temperature-controlled warehouses in Brazil.

On January 2, 2020, we completed the purchase of all outstanding shares of Nova Cold for cash consideration of C$338.7 million (USD $260.6 million), net of cash received. Nova Cold consisted of four temperature-controlled facilities in Toronto, Calgary and Halifax. The acquisition was funded utilizing proceeds from the settlement of our April 2019 forward sale agreement combined with cash drawn on our 2018 Senior Unsecured Revolving Credit Facility. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment.

Also, on January 2, 2020, we completed the purchase of all outstanding membership interests of Newport Cold for cash consideration of $57.7 million, net of cash received, utilizing available cash on hand. Newport Cold consists of a single temperature-controlled warehouse located in St. Paul, Minnesota. Since the date of acquisition, we have reported the results of this facility within our warehouse segment.

Refer to Note 2, 3 and 4 of the Notes to the Condensed Consolidated Financial Statements for further information.

COVID-19

We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our customers and business partners. While we did not incur significant disruptions during 2020 from the COVID-19 pandemic, the six-months ended June 30, 2021 were negatively impacted by COVID-19 related disruptions in (1) the food supply chain; (ii) our customers’ production of goods; and (iii) the labor market impacting availability and cost. COVID-19 restrictions in certain markets where we or our customers operate continue to impact the food supply chain and our business. As a result, occupancy and throughput volume continue at lower than normal levels experienced prior to COVID-19. As the Company continues to protect its employees from the spread of COVID-19, it is incurring elevated labor related costs and incremental health and safety supplies costs relative to its pre-pandemic experience. The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with any degree of confidence, including the scope, severity, duration and geographies of the outbreak, the occurrence of additional waves or spikes in infection rates (including the spread of variant strains), the actions taken to contain the COVID-19 pandemic or mitigate its impact as requested or mandated by governmental authorities or otherwise voluntarily taken by individuals or businesses, and the direct and indirect economic effects of the outbreak and containment measures, among others. Our business is deemed an “essential business” as defined by the Department of Homeland Security, which means that our associates are able to continue working in our facilities during “shelter-in-place” or “stay-at-home” orders. The outbreak of COVID-19 in the United States and other countries in which we operate, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has led many nations, states and local authorities to periodically institute “shelter-in-place” or “stay-at-home” orders, mandate business and school closures and restrict travel. Certain states and cities, including where we own properties, have development sites and where our principal place of business is located, have also reacted by instituting restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue during peak outbreaks. These restrictions vary widely by jurisdiction and may continue to change as the COVID-19 pandemic progresses. The negative impacts of the COVID-19 pandemic are pervasive across a broad spectrum of industries, including industries in which we, our customers and business partners operate. Negative impacts from COVID-19 may negatively impact the business and operations of our customers and business partners (including our suppliers). Further, the impacts of a potentially worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer and business spending as well as other unanticipated consequences continue to remain unknown. The impacts of locations of outbreaks and actions mandated by governmental authorities or taken voluntarily by businesses and individuals to contain or mitigate the spread of COVID-19 and the timing of the repeal or loosening of such restrictions are also unknown. As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects. Refer to our Annual Report on Form 10-K/A for the year ended December 31, 2020 for further considerations, “Risk Factors - Risks Related to Public Health Crises - We face various risks and uncertainties related to public health crises, including the recent and ongoing global outbreak of the novel coronavirus and variants (COVID-19). The COVID-19 pandemic is growing and its impacts are uncertain and hard to measure and may have a material adverse effect on us.”

Foreign Currency Translation Impact on Our Operations

Our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation on revenues and expenses incurred by our operations outside the United States. Future fluctuations of foreign currency exchange rates and their impact on our ~~consolidated statements~~Condensed Consolidated Statements of ~~operations~~Operations are inherently uncertain. As a result of the relative size of our international operations, these fluctuations may be

material on our results of operations. Our revenues and expenses from our international operations are typically denominated in the local currency of the country in which they are derived or incurred. Therefore, the impact of foreign currency fluctuations on our results of operations and margins is partially mitigated.

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. The rates below represent the U.S. dollar equivalent of one unit of the respective foreign currency. Amounts presented in constant currency within our Results of Operations are calculated by applying the average foreign exchange rate from the comparable prior year period to actual local currency results in the current period, rather than the actual exchange rates in effect during the respective period. While constant currency metrics are a non-GAAP calculation and do not represent actual results, the comparison allows the reader to understand the impact of the underlying operations in addition to the impact of changing foreign exchange rates.


	Foreign exchange rates as of June 30, 2021	Average foreign exchange rates used to translate actual operating results for the three months ended June 30, 2021	Average foreign exchange rates used to translate actual operating results for the six months ended June 30, 2021	Foreign exchange rates as of June 30, 2020	Prior period average foreign exchange rate used to adjust actual operating results for the three months ended June 30, 2021(1)	Prior period average foreign exchange rate used to adjust actual operating results for the six months ended June 30, 2021(1)
Canadian Dollar	0.807	0.811	0.800	0.734	0.726	0.731
Euro	1.186	1.208	1.207	N/A	1.127	1.116
British Pound	1.383	1.394	1.386	N/A	1.243	1.258
Poland Zloty	0.262	0.267	0.266	N/A	0.237	0.244
Australian Dollar	0.750	0.769	0.771	0.689	0.668	0.656
New Zealand Dollar	0.698	0.716	0.717	0.644	0.626	0.623
Argentinian Peso	0.010	0.011	0.011	0.014	0.015	0.015
Chilean Peso	0.001	0.001	0.001	N/A	0.001	0.001
Brazilian Real	0.201	0.191	0.187	0.182	0.186	N/A

March 31, 2018 compared to
March 31, 2017

Average foreign
exchange rate used to
adjust operating results for
the three months ended March 31,
2018 ⁽¹⁾
Foreign exchange
rates as of March 31,
2018 Foreign exchange
rates as of
March 31,
2017
Australian dollar 0.758
0.769
0.764
New Zealand dollar 0.711
0.723
0.700
Argentinian peso 0.063
0.050
0.065
Canadian dollar 0.756
0.775
0.751
(1)Represents the relevant average foreign exchange rates in effect in the comparable prior period applied to the activity for the current period. The average foreign currency exchange rates we apply to our operating results are derived from third party reporting sources for the periods indicated.


~~(1)~~	Represents the relevant average foreign exchange rates in effect in the comparable prior period applied to the activity for the current period. The average foreign currency exchange rates we apply to our operating results are derived from third party reporting sources for the periods indicated.

Focus on Our Operational Effectiveness and Cost Structure

We continuously seek to ~~implement~~execute on various initiatives aimed at streamlining our business processes and reducing our cost ~~structure. Commencing in 2013, we realigned~~structure, including: realigning and ~~centralized~~centralizing key business ~~processes; implemented~~processes and fully integrating acquired assets and businesses; implementing standardized operational processes; ~~integrated~~integrating and ~~launched~~launching new information technology tools and platforms; ~~instituted~~instituting key health, safety, leadership and training programs; and ~~added a strategic sourcing function to capitalize~~capitalizing on the purchasing power of our network. Through the realignment of our business processes, we have ~~improved retention of our key talent and reduced employee turnover,~~ acquired new talent and strengthened our service offerings. In order to reduce costs in our facilities, we have invested in 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. 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. In 2016, we implemented a strategic effort to exit certain leased facilities and transition customers within our warehouse portfolio to consolidate occupancy, reduce costs and increase contribution from the warehouses

where these customers were transitioned. In executing these initiatives, we believe that we have enhanced our ability to serve our customers at the highest quality level and efficiently manage our warehouses.

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. We~~assets, the exit of certain leased facilities, the exit of certain transportation operations, the exit of certain managed warehouse agreements, the exit of the China JV, and the sale of our quarry business. Through our process of active portfolio management, we continue to evaluate our markets and offerings.

Strategic Shift within Our Transportation Segment

~~In order~~Several years ago, we initiated a strategic shift in our transportation segment services and solutions. The intention of this strategic shift was to better focus our business on the operation of our temperature-controlled ~~warehouses, we have undertaken a strategic shift in the solutions we provide in our transportation segment. As a result of this strategic shift,~~warehouses. Specifically, we have gradually exited certain commoditized, non-scalable, or low margin services we historically offered to our customers, ~~including traditional brokered transportation services. We continue to offer~~in favor of more profitable and ~~value added~~value-added programs, such as regional, national, truckload and ~~regional cross-dock, regional and~~retailer-specific multi-vendor consolidation ~~service, and dedicated transportation~~ services. We designed each ~~of these programs~~value-added program to improve efficiency and reduce transportation and logistics costs to our warehouse customers, whose transportation spend typically represents the majority of their supply-chain costs. We believe this efficiency and cost reduction helps to drive increased client retention, as well as maintain high occupancy levels in our temperature-controlled warehouses. Over the last several years, we have made significant progress in implementing our strategic initiative of growing our transportation service offering in a way that complements our temperature-controlled warehouse business, for example, we have also added a dedicated fleet service offering through acquisitions such as Agro and Hall’s. We intend to continue executing this strategy in the future.

Historically Significant Customer

For the three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017,~~2020, one customer accounted for more than 10% of our total ~~revenues, with $52.3~~revenues. For the three months ended June 30, 2021 and 2020, sales to this customer were $64.1 million and ~~$48.3~~$64.4 million, respectively. For the six months ended June 30, 2021 and 2020, sales to this customer were $130.0 million and $120.0 million, respectively. The substantial majority of this ~~customer's~~customer’s business relates to our third-party managed segment. We are reimbursed for substantially all expenses we incur in managing warehouses on behalf of third-party owners. ~~These~~We recognize these reimbursements ~~are recognized~~ as revenues under applicable accounting guidance, but these reimbursements generally do not affect our financial results because they are offset by the corresponding expenses that ~~are recognized~~we recognize in our third-party managed segment cost of operations. Of the revenues received from this customer, ~~$48.2~~$63.3 million and ~~$44.6~~$59.8 million represented reimbursements for certain expenses we incurred during the three months ended ~~March 31, 2018~~June 30, 2021 and ~~2017,~~2020, respectively, ~~that~~and $124.6 million and $110.8 million for the six months ended were June 30, 2021 and 2020, respectively, were offset by matching expenses included in our ~~third-party~~third party managed cost of operations.

Economic Occupancy of our Warehouses

~~Occupancy~~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. We estimate the number of contractually committed pallet positions by taking into account the actual pallet commitment specified in ~~our warehouses is~~each customers’ contract, and subtracting the physical pallet positions. We regard economic occupancy as an important driver of our financial results. ~~Physical occupancy~~Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an ~~individual warehouse is impacted by a number of factors, including the type of warehouse (i.e.~~, distribution, public, production advantaged or leased facility), specific customer needs in the markets served by the warehouse, timing of harvests or protein production for customers of the warehouse, the existence of leased but unoccupied pallets and the adverse effect of weather or market conditions on the customers of the warehouse. On a portfolio-wide basis, physical occupancy rates and warehouse revenues generally peak between mid-September and early Decemberas-utilized, on-demand basis. We actively seek to enter into contracts that implement our commercial business rules which contemplate, among other things, fixed storage commitments in connection with the holiday season and the peak harvest season in the United States. Physical occupancy rates and warehouse revenues on a portfolio-wide basis are generally the lowest during May and June. Our target occupancy acrossestablishing new customer relationships. Additionally, we actively seek opportunities to transition our warehouse portfolio varies by warehouse and warehouse type because our warehouses are configured to accommodate the individual needs of our customers. We generally regard approximately 85% average physical occupancy across our temperature-controlled warehouse portfolio as optimal, subject to relevant local market conditions and individual customer needs. We do not believe that a 100% occupancy rate is an ideal target for utilization of our warehouses because optimizing pallet throughput and efficient delivery of relevant value-added services require a certain amount of free pallet position capacity at all times in order to be able to efficiently place, store and retrieve products from pallet positions, particularly during periods of greatest occupancy or highest volume. Our occupancy metrics account for the physical occupancy of our warehouses. Ascurrent customers ~~continue to transition~~ to contracts that feature a fixed storage commitment when renewing existing agreements or upon the change in the anticipated profile of our

customer. This strategy mitigates the impact of changes in physical occupancy throughout the course of the year due to seasonality, as

~~financial occupancy may be greater than our~~well as other factors that can impact physical occupancy ~~as we may~~while ensuring our customers have the ~~opportunity~~necessary space they need to ~~sell space which is not being utilized by our fixed storage commitment customers.~~support their business.

Throughput at our Warehouses

The level and nature of throughput at our warehouses is an important factor impacting our warehouse services revenues in our warehouse segment. Throughput refers to the volume of pallets that enter and exit our warehouses. Higher levels of throughput drive warehouse services revenues in our warehouse segment as customers are typically billed on a basis that takes into account the level of throughput of the goods they store in our warehouses. The nature of throughput may be driven by the expected turn of the underlying product or commodity. Throughput pallets can be influenced both by the food manufacturers as well as shifts in demand preferences. Food manufacturers’ production levels, which respond to market conditions and consumer preferences, may impact inbound pallets. Similarly, a change in inventory turnover due to shift in customer demand may impact outbound pallets.

How We Assess the Performance of Our Business

Segment Contribution ~~(NOI)~~(Net Operating Income or “NOI”)

We evaluate the performance of our primary business segments based on their contribution (NOI) to our overall results of operations. We use the term “segment contribution (NOI)” to mean a segment’s revenues less its cost of operations (excluding any depreciation, depletion and amortization, impairment charges, ~~and~~ corporate-level selling, general and administrative and corporate-level acquisition, litigation and other expenses). We use segment contribution (NOI) to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with FASB ASC, Topic 280, Segment Reporting.

We also analyze the “segment contribution (NOI) margin” for each of our business segments, which we calculate as segment contribution (NOI) divided by segment revenues.

In addition to our segment contribution (NOI) and segment contribution (NOI) margin, we analyze the contribution (NOI) of our warehouse rent and storage operations and our warehouse services operations within our warehouse segment. We calculate the contribution (NOI) of our warehouse rent and storage operations as rent and storage revenues less power and other facilities cost. We calculate the contribution (NOI) of our warehouse services operations as warehouse services revenues less labor and other service costs. We calculate the contribution (NOI) margin for each of these operations as the applicable contribution (NOI) measure divided by the applicable revenue measure. We believe the presentation of these contribution (NOI) and contribution (NOI) margin measures helps investors understand the relative revenues, costs and earnings resulting from each of these separate types of services we provide to our customers in the same manner reviewed by our management in connection with the operation of our business. These contribution (NOI) measures within our warehouse segment are not measurements of financial performance under U.S. GAAP, and these measures should be considered as supplements, but not as alternatives, 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 Analysis~~

We refer to a “same store” as a warehouse we owned or leased for the entirety of two comparable periods and which has reported at least twelve months of consecutive normalized operations prior to the commencement of the earlier period being considered. We define “normalized operations” as a site open for operation or lease after a warehouse acquisition, development or significant modification, including the expansion of a warehouse footprint or a warehouse rehabilitation subsequent to an extraordinary event, such as natural disasters or similar events. In addition, our definition of “normalized operations” takes into account changes in the ownership structure (~~e.g.~~, acquisition of a previously leased warehouse would result in different charges in the compared periods), which would impact comparability in our warehouse segment contribution (NOI). Warehouses are excluded from the same store population as of the beginning of the fiscal quarter following the occurrence of such events. We evaluate our same store portfolio on a quarterly basis.

We calculate “same store contribution (NOI)” as revenues for the same store population less its cost of operations (excluding any depreciation, depletion and amortization, impairment charges and corporate-level selling, general and administrative expenses). In order to derive an appropriate measure of period-to-period operating performance, we also calculate our same store contribution (NOI) on a constant currency basis to remove the effects of foreign currency exchange rate movements by using the comparable prior period exchange rate to translate from local currency into U.S. dollars for both periods. We evaluate the performance of the warehouses we own or lease using a “same store” analysis, and we believe that same store contribution (NOI) is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period and also on a constant currency basis, thereby eliminating the effects of changes in the composition of our warehouse portfolio and currency fluctuations on performance measures.

~~The following table shows the number of same-store warehouses in our portfolio and the number of warehouses excluded as same-store warehouses during the first quarter of 2018.~~



	~~March 31, 2018~~
~~Total Warehouses~~	~~158~~
~~Same Store Warehouses~~ ⁽¹⁾	~~138~~
~~Non-Same Store and Managed Warehouses~~	20


~~(1)~~	During the first quarter of 2018, one of the warehouses in our portfolio was reclassified from the same store to the non-same store population in anticipation of our exit from the lease of such warehouse facility in the second quarter of 2018.

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 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.

~~Constant Currency Metrics~~

~~As discussed above under “Key Factors Affecting Our Business and Financial Results—Foreign Currency Translation Impact on Our Operations~~,” our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation on revenues generated and expenses incurred by our operations outside the United States, variations which we cannot control. As a result, in order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we analyze our business performance based on certain constant currency reporting that represents current period results translated into U.S. dollars at the relevant average foreign exchange rates applicable in the comparable prior period. We believe that the presentation of constant currency results provides a measurement of our ongoing operations that is meaningful to investors because it excludes the impact of these foreign currency movements that we cannot control. Constant currency results are not measurements of financial performance under U.S. GAAP, and our constant currency results should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP.

~~RESULTS OF OPERATIONS~~

~~Comparison of Results for the Three Months Ended March 31, 2018 and 2017~~

~~Warehouse Segment~~

~~The following table presents the operating results of our warehouse segment for the three months ended March 31, 2018 and 2017.~~

Three months ended March 31, Change
2018 actual
2018 constant currency⁽¹⁾
2017 actual Actual Constant currency
(Dollars in thousands)
Rent and storage $ 125,727
$ 125,676
$ 119,666
5.1 % 5.0 %
Warehouse services 160,790
159,881
156,141
3.0 % 2.4 %
Total warehouse segment revenues 286,517
285,557
275,807
3.9 % 3.5 %

Power 16,114
16,148
15,428
4.4 % 4.7 %
Other facilities costs ⁽²⁾
26,782
26,786
26,258
2.0 % 2.0 %
Labor 128,336
127,670
124,101
3.4 % 2.9 %
Other services costs⁽³⁾
25,715
25,610
26,500
(3.0 )% (3.4 )%
Total warehouse segment cost of operations 196,947
196,214
192,287
2.4 % 2.0 %
Warehouse segment contribution (NOI) $ 89,570
$ 89,343
$ 83,520
7.2 % 7.0 %

Warehouse rent and storage contribution (NOI) ⁽⁴⁾
$ 82,831
$ 82,742
$ 77,980
6.2 % 6.1 %
Warehouse services contribution (NOI) ⁽⁵⁾
$ 6,739
$ 6,601
$ 5,540
21.6 % 19.2 %

Total warehouse segment margin 31.3 % 31.3 % 30.3 % 100 bps
100 bps
Rent and storage margin⁽⁶⁾
65.9 % 65.8 % 65.2 % 70 bps
60 bps
Warehouse services margin⁽⁷⁾
4.2 % 4.1 % 3.5 % 70 bps
60 bps


~~(1)~~	The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.


~~(2)~~	~~Includes real estate rent expense of~~ ~~$3.7 million and $3.7 million~~ ~~for the three months ended March 31, 2018 and 2017, respectively.~~


~~(3)~~	~~Includes non-real estate rent expense of~~ ~~$3.4 million and $3.4 million~~ ~~for the three months ended March 31, 2018 and 2017, respectively.~~


~~(4)~~	~~Calculated as rent and storage revenues less power and other facilities costs.~~


~~(5)~~	~~Calculated as warehouse services revenues less labor and other services costs.~~


~~(6)~~	~~Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenues.~~


~~(7)~~	~~Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.~~

Warehouse segment revenues were $286.5 million for the three months ended March 31, 2018, an increase of $10.7 million, or 3.9%, compared to $275.8 million for the three months ended March 31, 2017. On a constant currency basis, our warehouse segment revenues were $285.6 million for the three months ended March 31, 2018, an increase of $9.8 million, or 3.5%, period-over-period. These increases were primarily driven by customer mix, whereby a greater proportion of customers paid higher average rates per pallet, combined with an increase in the number of fixed commitment storage contracts and contractual rate escalation. Our domestic operations accounted for the majority of the change in customer composition and increase in fixed commitment storage contracts. The foreign currency translation of revenues incurred by our foreign operations had a $1.0 million favorable impact during the three months ended March 31, 2018.

Warehouse segment cost of operations was $196.9 million for the three months ended March 31, 2018, an increase of $4.7 million, or 2.4%, compared to $192.3 million for the three months ended March 31, 2017. On a constant currency basis, our warehouse segment cost of operations was $196.2 million for the three months ended March 31, 2018, an increase of $3.9 million, or 2.0%, compared to $192.3 million for the three months ended March 31, 2017. This change was driven primarily by an increase in more labor-intensive warehouse services partially offset by lower worker's compensation expenses relative to the three months ended March 31, 2017.

Warehouse segment contribution (NOI) was $89.6 million for the three months ended March 31, 2018, an increase of $6.1 million, or 7.2%, compared to $83.5 million for the three months ended March 31, 2017. On a constant currency basis, warehouse segment contribution was $89.3 million for the three months ended March 31, 2018, an increase of $5.8 million, or 7.0%, period-over-period. Again, favorable changes in our customer mix, higher number of fixed commitment storage contracts and contractual rate escalation led to improved contribution margins for our warehouse segment during the first quarter of 2018 compared to the same period in 2017.

Same Store Analysis

Effective January 1, 2020, 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 “normalized operations” as properties that have been open for operation or lease after development or significant modification, including the expansion of a warehouse footprint

or a warehouse rehabilitation subsequent to an event, such as anatural disaster or similar event causing disruption to operations. In addition, our definition of “normalized operations” takes into account changes in the ownership structure (e.g., purchase of a previously leased warehouse would result in different charges in the compared periods), which would impact comparability in our warehouse segment contribution (NOI).

Acquired properties will be included in the “same store” population if owned by us as of the first business day of each year, of the prior calendar year and 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 entering development subsequent to the beginning of the current calendar year. As such, the “same store” population for the period ended June 30, 2021 includes all properties that we owned at January 2, which had both been owned and had reached “normalized operations” by January 2, 2020.

We calculate “same store contribution (NOI)” as revenues for the same store population less its cost of operations (excluding any depreciation and amortization, impairment charges, corporate-level selling, general and administrative expenses, corporate-level acquisition, litigation and other expenses and gain or loss on sale of real estate). In order to derive an appropriate measure of period-to-period operating performance, we also calculate our same store contribution (NOI) on a constant currency basis to remove the effects of foreign currency exchange rate movements by using the comparable prior period exchange rate to translate from local currency into U.S. dollars for both periods. We evaluate the performance of the warehouses we own or lease using a “same store” analysis, and we believe that same store contribution (NOI) is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period and also on a constant currency basis, thereby eliminating the effects of changes in the composition of our warehouse portfolio and currency fluctuations on performance measures.

The following table shows the number of same-store warehouses in our portfolio as of June 30, 2021. The number of warehouses owned or operated in as of June 30, 2021 and excluded as same-store warehouses for the period ended June 30, 2021 is listed below. While not included in the non-same store warehouse count in the table below, the results of operations for the non-same store warehouses includes the partial period impact of sites that were exited during the periods presented.


Total Warehouses			246
Same Store Warehouses			162
Non-Same Store Warehouses (1)			75
Third-Party Managed Warehouses			9

(1) During the second quarter of 2021, we completed the acquisition of Bowman Stores resulting in the addition of one facility and the acquisition of KMT Brrr! resulting in the addition of two facilities. Additionally, we entered into a lease of a facility in Australia resulting in an increase to our total warehouses.

As of June 30, 2021, our portfolio consisted of 246 total warehouses, including 237 within the warehouse segment and nine in the third-party managed segment. In addition, we hold minority interests in two Brazilian joint ventures, Superfrio, which owns or operates 33 temperature-controlled warehouses, and Comfrio, which owns or operates 24 temperature-controlled warehouses.

Constant Currency Metrics

As discussed above under “Key Factors Affecting Our Business and Financial Results—Foreign Currency Translation Impact on Our Operations,” our consolidated revenues and expenses are subject to variations outside our control that are caused by the net effect of foreign currency translation on revenues generated and expenses incurred by our operations outside the United States. As a result, in order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we analyze our business performance based on certain constant currency reporting that represents current period results translated into U.S. dollars at the relevant average foreign exchange rates applicable in the comparable prior period. We believe that the presentation of constant currency results provides a measurement of our ongoing operations that is meaningful to investors because it excludes the impact of these foreign currency movements that we cannot control. Constant currency results are not measurements of financial performance under U.S. GAAP, and our constant currency results should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. 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.

RESULTS OF OPERATIONS

Comparison of Results for the Three Months Ended June 30, 2021 and 2020

Warehouse Segment

The following table presents the operating results of our warehouse segment for the three months ended June 30, 2021 and 2020.


	Three Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
	(Dollars in thousands)
Rent and storage	$	212,277		$	207,878		$	163,664		29.7	%	27.0	%
Warehouse services	291,457			282,712			208,747			39.6	%	35.4	%
Total warehouse segment revenues	503,734			490,590			372,411			35.3	%	31.7	%

Power	32,180			31,574			22,069			45.8	%	43.1	%
Other facilities costs (2)	51,562			50,467			34,645			48.8	%	45.7	%
Labor	224,411			217,575			165,458			35.6	%	31.5	%
Other services costs (3)	51,202			50,283			30,107			70.1	%	67.0	%
Total warehouse segment cost of operations	$	359,355		$	349,899		$	252,279		42.4	%	38.7	%

Warehouse segment contribution (NOI)	$	144,379		$	140,691		$	120,132		20.2	%	17.1	%
Warehouse rent and storage contribution (NOI) (4)	$	128,535		$	125,837		$	106,950		20.2	%	17.7	%
Warehouse services contribution (NOI) (5)	$	15,844		$	14,854		$	13,182		20.2	%	12.7	%

Total warehouse segment margin	28.7		%	28.7		%	32.3		%	-360 bps		-358 bps
Rent and storage margin(6)	60.6		%	60.5		%	65.3		%	-480 bps		-481 bps
Warehouse services margin(7)	5.4		%	5.3		%	6.3		%	-88 bps		-106 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.

(2)Includes real estate rent expense of $10.1 million and $3.0 million, on an actual basis, for the second quarter of 2021 and 2020, respectively.

(3)Includes non-real estate rent expense (equipment lease and rentals) of $2.9 million and $2.4 million, on an actual basis, for the second quarter of 2021 and 2020, respectively.

(4)Calculated as rent and storage revenues less power and other facilities costs.

(5)Calculated as warehouse services revenues less labor and other services costs.

(6)Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenues.

(7)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.

Warehouse segment revenues were $503.7 million for the three months ended June 30, 2021, an increase of $131.3 million, or 35.3%, compared to $372.4 million for the three months ended June 30, 2020. On a constant currency basis, our warehouse segment revenues were $490.6 million for the three months ended June 30, 2021, an increase of $118.2 million, or 31.7%, from the three months ended June 30, 2020. Approximately $120.6 million of the increase, on an actual currency basis, was driven by acquisitions completed between July 2020 and June 2021. We acquired 64 warehouse facilities as a result of the Agro, Hall’s, AM-C, Caspers, Liberty, Bowman, and KMT Brrr! acquisitions between July 1, 2020 and June 30, 2021. As a result, these facilities are reflected in the entirety of the current period but none of the comparable prior period. Revenue growth was also due to contractual rate escalations, our recently completed developments and an increase in services revenue in our same store pool. This was partially offset by a decrease in storage revenue in our same store pool, driven by the decline in holdings due to lower food production. The foreign currency translation of

revenues earned by our foreign operations had a net $13.1 million favorable impact during the three months ended June 30, 2021, which was mainly driven by the weakening of the U.S. dollar against the Australian dollar and the Euro.

Warehouse segment cost of operations was $359.4 million for the three months ended June 30, 2021, an increase of $107.1 million, or 42.4%, compared to the three months ended June 30, 2020. On a constant currency basis, our warehouse segment cost of operations was $349.9 million for the three months ended June 30, 2021, an increase of $97.6 million, or 38.7%, from the three months ended June 30, 2020. Approximately $92.6 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment we acquired in connection with the aforementioned acquisitions. In addition, we incurred increases in our cost of operations related to power, labor, property tax and insurance costs, all of which are reflective of current market trends. This was partially offset by the appreciation bonus we paid to front-line associates to recognize the dedication and efforts of our associates during the COVID-19 pandemic during the second quarter of 2020, which totaled $4.3 million. Additionally, the foreign currency translation of expenses incurred by our foreign operations had a net $9.5 million unfavorable impact during the three months ended June 30, 2021.

For the three months ended June 30, 2021, warehouse segment contribution (NOI), increased $24.2 million, or 20.2%, to $144.4 million for the second quarter of 2021 compared to $120.1 million for the second quarter of 2020. The foreign currency translation of our results of operations had a $3.7 million favorable impact to the warehouse segment contribution period-over-period due to the weakening of the U.S. dollar. On a constant currency basis, warehouse segment NOI increased 17.1% from the three months ended June 30, 2020. Approximately $28.0 million of the increase, on an actual basis, was primarily driven by the additional facilities in the warehouse segment as a result of the aforementioned acquisitions, and the growth and modest synergies experienced period-over-period during overlapping periods of ownership for sites acquired during 2020. The growth is also attributable to contractual rate escalations and the impact of the appreciation bonus paid during the second quarter of 2020. The increase was partially offset by the following factors that impacted our same-store facilities: lower holdings driven by the impact of COVID-19 on the food manufacturing supply chain and increased costs including property insurance and taxes, labor, power and facility leasing costs.

Same Store and Non-Same Store Analysis

We had ~~138~~162 same stores for the three months ended ~~March 31, 2018.~~June 30, 2021. Please see ~~“—How~~“How We Assess the Performance of Our Business—Same Store Analysis” above for a reconciliation of the change in the same store portfolio from ~~year~~period to ~~year.~~period. Amounts related to the acquisitions of Agro, AM-C Warehouses, Bowman Stores, Caspers, Halls, KMT Brrr! and Liberty Freezers, one recently leased warehouse in Australia, as well as certain expansion and development projects not yet stabilized are reflected within non-same store results.

The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the three months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~

2020.

Three Months Ended March 31, Change
2018 actual
2018 constant currency⁽¹⁾
2017 actual Actual Constant currency
Same store revenues: (Dollars in thousands)
Rent and storage $ 122,977
$ 122,926
$ 116,661
5.4 % 5.4 %
Warehouse services 157,502
156,594
152,999
2.9 % 2.3 %
Total same store revenues 280,479
279,520
269,660
4.0 % 3.7 %
Same store cost of operations:
Power 15,659
15,694
14,729
6.3 % 6.6 %
Other facilities costs 25,286
25,290
24,418
3.6 % 3.6 %
Labor 125,435
124,768
121,022
3.6 % 3.1 %
Other services costs 24,973
24,869
25,785
(3.1 )% (3.6 )%
Total same store cost of operations $ 191,353
$ 190,621
$ 185,954
2.9 % 2.5 %

Same store contribution (NOI) $ 89,126
$ 88,899
$ 83,706
6.5 % 6.2 %
Same store rent and storage contribution (NOI)⁽²⁾
$ 82,032
$ 81,942
$ 77,514
5.8 % 5.7 %
Same store services contribution (NOI)⁽³⁾
$ 7,094
$ 6,957
$ 6,192
14.6 % 12.4 %

Total same store margin 31.8 % 31.8 % 31.0 % 80 bps
80 bps
Same store rent and storage margin⁽⁴⁾
66.7 % 66.7 % 66.4 % 30 bps
30 bps
Same store services margin⁽⁵⁾
4.5 % 4.4 % 4.0 % 50 bps
40 bps

Non-same store revenues:
Rent and storage $ 2,750
$ 2,750
$ 3,005
(8.5 )% (8.5 )%
Warehouse services 3,288
3,287
3,142
4.6 % 4.6 %
Total non-same store revenues 6,038
6,037
6,147
(1.8 )% (1.8 )%
Non-same store cost of operations:
Power 455
454
699
(34.9 )% (35.1 )%
Other facilities costs 1,496
1,496
1,840
(18.7 )% (18.7 )%
Labor 2,902
2,902
3,079
(5.7 )% (5.7 )%
Other services costs 741
741
715
3.6 % 3.6 %
Total non-same store cost of operations $ 5,594
$ 5,593
$ 6,333
(11.7 )% (11.7 )%

Non-same store contribution (NOI) $ 444
$ 444
$ (186 ) (338.7 )% (338.7 )%
Non-same store rent and storage contribution (NOI)⁽²⁾
$ 799
$ 800
$ 466
71.5 % 71.7 %
Non-same store services contribution (NOI)⁽³⁾
$ (355 ) $ (356 ) $ (652 ) (45.6 )% (45.4 )%

Total warehouse segment revenues $ 286,517
$ 285,557
$ 275,807
3.9 % 3.5 %
Total warehouse cost of operations $ 196,947
$ 196,214
$ 192,287
2.4 % 2.0 %
Total warehouse segment contribution $ 89,570
$ 89,343
$ 83,520
7.2 % 7.0 %


~~(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.~~


~~(3)~~	~~Calculated as warehouse services revenues less labor and other services costs.~~


~~(4)~~	~~Calculated as same store rent and storage contribution (NOI) divided by same store rent and storage revenues.~~


~~(5)~~	~~Calculated as same store warehouse services contribution (NOI) divided by same store warehouse services revenues.~~


	Three Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of same store sites	162						162			n/a		n/a
Same store revenues:	(Dollars in thousands)
Rent and storage	$	150,984		$	149,320		$	152,893		(1.2)	%	(2.3)	%
Warehouse services	209,258			203,647			199,832			4.7	%	1.9	%
Total same store revenues	360,242			352,967			352,725			2.1	%	0.1	%
Same store cost of operations:
Power	21,754			21,623			20,816			4.5	%	3.9	%
Other facilities costs	33,043			32,615			32,132			2.8	%	1.5	%
Labor	161,052			156,443			154,934			3.9	%	1.0	%
Other services costs	28,109			27,941			27,622			1.8	%	1.2	%
Total same store cost of operations	$	243,958		$	238,622		$	235,504		3.6	%	1.3	%

Same store contribution (NOI)	$	116,284		$	114,345		$	117,221		(0.8)	%	(2.5)	%
Same store rent and storage contribution (NOI)(2)	$	96,187		$	95,082		$	99,945		(3.8)	%	(4.9)	%
Same store services contribution (NOI)(3)	$	20,097		$	19,263		$	17,276		16.3	%	11.5	%

Total same store margin	32.3		%	32.4		%	33.2		%	-95 bps		-84 bps
Same store rent and storage margin(4)	63.7		%	63.7		%	65.4		%	-166 bps		-169 bps
Same store services margin(5)	9.6		%	9.5		%	8.6		%	96 bps		81 bps


	Three Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of non-same store sites(6)	75						10			n/a		n/a
Non-same store revenues:	(Dollars in thousands)
Rent and storage	$	61,293		$	58,558		$	10,771		469.1	%	443.7	%
Warehouse services	82,199			79,065			8,915			822.0	%	786.9	%
Total non-same store revenues	143,492			137,623			19,686			628.9	%	599.1	%
Non-same store cost of operations:
Power	10,426			9,951			1,253			732.1	%	694.2	%
Other facilities costs	18,519			17,852			2,513			636.9	%	610.4	%
Labor	63,359			61,132			10,524			502.0	%	480.9	%
Other services costs	23,093			22,342			2,485			829.3	%	799.1	%
Total non-same store cost of operations	$	115,397		$	111,277		$	16,775		587.9	%	563.4	%

Non-same store contribution (NOI)	$	28,095		$	26,346		$	2,911		865.1	%	805.0	%
Non-same store rent and storage contribution (NOI)(2)	$	32,348		$	30,755		$	7,005		361.8	%	339.0	%
Non-same store services contribution (NOI)(3)	$	(4,253)		$	(4,409)		$	(4,094)		(3.9)	%	(7.7)	%

Total non-same store margin	19.6		%	19.1		%	14.8		%	479 bps		436 bps
Non-same store rent and storage margin(4)	52.8		%	52.5		%	65.0		%	-1226 bps		-1252 bps
Non-same store services margin(5)	(5.2)		%	(5.6)		%	(45.9)		%	4075 bps		4035 bps


	Three Months Ended June 30,						Change
	2021 actual		2021 constant currency(1)		2020 actual		Actual		Constant currency
Total warehouse segment revenues	$	503,734	$	490,590	$	372,411	35.3	%	31.7	%
Total warehouse cost of operations	$	359,355	$	349,899	$	252,279	42.4	%	38.7	%
Total warehouse segment contribution	$	144,379	$	140,691	$	120,132	20.2	%	17.1	%

(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.

(3)Calculated as warehouse services revenues less labor and other services costs.

(4)Calculated as rent and storage contribution (NOI) divided by rent and storage revenues.

(5)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.

(6)Non-same store warehouse count of 75 includes one recently leased warehouse in Australia, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, and three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020. The results of these acquisitions are reflected in the results above since date of ownership.

n/a - not applicable, the change in actual and constant currency metrics does not apply to site count.

The following table provides certain operating metrics to explain the drivers of our same store performance.

Three Months Ended March 31, Change
2018 2017
Same store rent and storage:
Occupancy⁽¹⁾

Average occupied pallets (in thousands) 2,375
2,416
(1.7 )%
Average physical pallet positions (in thousands) 3,112
3,096
0.5 %
Occupancy percentage 76.3 % 78.0 % -170 bps
Same store rent and storage revenues per occupied pallet $ 51.77
$ 48.30
7.2 %
Constant currency same store rent and storage revenues per occupied pallet $ 51.75
$ 48.30
7.1 %

Same store warehouse services:
Throughput pallets (in thousands) 6,499
6,657
(2.4 )%
Same store warehouse services revenues per throughput pallet $ 24.24
$ 22.98
5.5 %
Constant currency same store warehouse services revenues per throughput pallet $ 24.10
$ 22.98
4.9 %

Non-same store rent and storage:
Occupancy
Average occupied pallets (in thousands) 72
53
35.8 %
Average physical pallet positions (in thousands) 100
88
13.6 %
Occupancy percentage 71.6 % 61.0 %

Non-same store warehouse services:
Throughput pallets (in thousands) 147
142
3.5 %

~~(1)~~

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 physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.


	Three Months Ended June 30,						Change
Units in thousands except per pallet and site number data - unaudited	2021			2020
Number of same store sites	162			162			n/a
Same store rent and storage:

Economic occupancy(1)
Average occupied economic pallets	2,830			2,971			(4.7)	%
Economic occupancy percentage	75.2		%	79.2		%	-403 bps
Same store rent and storage revenues per economic occupied pallet	$	53.35		$	51.45		3.7	%
Constant currency same store rent and storage revenues per economic occupied pallet	$	52.76		$	51.45		2.5	%

Physical occupancy(2)
Average physical occupied pallets	2,515			2,705			(7.0)	%
Average physical pallet positions	3,763			3,750			0.3	%
Physical occupancy percentage	66.8		%	72.1		%	-531 bps
Same store rent and storage revenues per physical occupied pallet	$	60.03		$	56.52		6.2	%
Constant currency same store rent and storage revenues per physical occupied pallet	$	59.37		$	56.52		5.0	%

Same store warehouse services:
Throughput pallets (in thousands)	7,351			7,333			0.3	%
Same store warehouse services revenues per throughput pallet	$	28.47		$	27.25		4.5	%
Constant currency same store warehouse services revenues per throughput pallet	$	27.70		$	27.25		1.7	%

Number of non-same store sites(3)	75			10			n/a
Non-same store rent and storage:

Economic occupancy(1)
Average economic occupied pallets	1,114			194			474.2	%
Economic occupancy percentage	75.3		%	64.7		%	1062 bps
Non-same store rent and storage revenues per economic occupied pallet	$	55.03		$	55.63		(1.1)	%
Constant currency non-same store rent and storage revenues per economic occupied pallet	$	52.57		$	55.63		(5.5)	%

Physical occupancy(2)
Average physical occupied pallets	1,092			186			486.6	%
Average physical pallet positions	1,479			299			394.6	%
Physical occupancy percentage	73.8		%	62.2		%	1164 bps
Non-same store rent and storage revenues per physical occupied pallet	$	56.13		$	57.87		(3.0)	%
Constant currency non-same store rent and storage revenues per physical occupied pallet	$	53.63		$	57.87		(7.3)	%

Non-same store warehouse services:
Throughput pallets (in thousands)	2,568			384			569.3	%
Non-same store warehouse services revenues per throughput pallet	$	32.01		$	23.23		37.8	%
Constant currency non-same store warehouse services revenues per throughput pallet	$	30.79		$	23.23		32.5	%

~~Average~~

(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. 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.

(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 physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.

(3)Non-same store warehouse count of 75 includes one recently leased warehouse in Australia, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, and three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020. The results of these acquisitions are reflected in the results above since date of ownership.

Economic occupancy at our same stores was ~~76.3%~~75.2% for the three months ended ~~March 31, 2018,~~June 30, 2021, a decrease of ~~170 bps~~403 basis points compared to ~~78.0%~~79.2% for the quarter ended June 30, 2020. Storage levels were lower than prior year levels due to ongoing supply chain disruption as a result of the COVID-19 pandemic, as well as food manufacturers producing at less than full capacity. As such, our customers’ existing inventories have continued to be drawn down to support steady consumer demand. Additionally, recent acquisitions came into the same store pool during the first quarter of 2021 which have a lower percentage of fixed commitment revenue compared to our legacy same stores. Our economic occupancy at our same stores for the three months ended ~~March 31, 2017. This change~~June 30, 2021 was ~~primarily the result~~838 basis points higher than our corresponding average physical occupancy of a66.8%. The decrease of ~~1.7%~~531 basis points in average ~~occupied pallets. The decrease in~~physical occupancy compared to 72.1% for the ~~average occupied pallets is primarily associated with~~quarter ended June 30, 2020 was partially driven by the timing of Easter in 2018 and a decline in the number of occupied pallets in our West region of the United States due to lower average inventory in our "harvest sites" that service some of our largest fruit and vegetables suppliers. factors mentioned above. Same store rent and storage revenues per economic occupied pallet increased ~~7.2%~~3.7% period-over-period, primarily driven by ~~customer mix, whereby a greater proportion of customers paid higher average rates per pallet, an increase~~improvements in ~~the number of fixed commitment storage contracts entered into with~~ our ~~warehouse customers,~~commercial terms and contractual rate ~~escalation.~~escalations and business mix. On a constant currency basis, ~~the increase in~~ our same store rent and storage revenues per occupied pallet was approximately the same as the change in same store rent and storage revenues per occupied pallet including the effect of foreign currency fluctuations. This was attributable to the fact that the increase in same store rent and storage revenues from our domestic operations was substantially higher than the increase in same store rent and storage revenues from our foreign operations.increased 2.5% period-over-period.

Throughput pallets at our same stores were ~~6.5~~7.4 million pallets for the three months ended ~~March 31, 2018, a decrease~~June 30, 2021, an increase of ~~2.4%~~0.3% from ~~6.7~~7.3 million pallets for the three months ended ~~March 31, 2017.~~June 30, 2020. This ~~decrease~~modest increase was ~~primarily attributable~~the result of the food manufacturers efforts to ~~a shift~~increase production to support steady consumer demand. Food manufacturers have been unable to rebuild holdings in the ~~inbound/outbound profile of certain domestic customers from higher inventory turn customers~~supply chain due to ~~lower inventory turn customers with more profitable volumes.~~challenges in the labor market. Same store warehouse services ~~revenues~~revenue per throughput pallet increased ~~5.5% period-over-period~~4.5% compared to the prior year primarily as a result of ~~an increase in~~

~~higher priced repackaging, blast freezing,~~contractual rate escalations and ~~case-picking warehouse services and, in part, a~~ favorable ~~net effect of~~ foreign currency translation as ~~the increase in warehouse services revenues from our foreign operations was greater than the increase from the same revenues stream at our domestic operations.~~previously discussed. On a constant currency basis, our same store services ~~revenues~~revenue per throughput pallet increased ~~4.9% period-over-period.~~1.7% compared to the prior year.

Third-Party Managed Segment

The following table presents the operating results of our third-party managed segment for the three months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~2020.


	Three Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of managed sites	9						11			n/a		n/a
	(Dollars in thousands)
Third-party managed revenues	$	72,173		$	71,340		$	72,954		(1.1)	%	(2.2)	%
Third-party managed cost of operations	70,480			69,797			69,655			1.2	%	0.2	%
Third-party managed segment contribution	$	1,693		$	1,543		$	3,299		(48.7)	%	(53.2)	%

Third-party managed margin	2.3		%	2.2		%	4.5		%	-218 bps		-236 bps

Three Months Ended March 31, Change
2018 actual
2018 constant currency⁽¹⁾
2017 actual Actual Constant currency
Number of managed sites 12
12

(Dollars in thousands)
Third-party managed revenues $ 63,876
$ 63,522
$ 58,367
9.4 % 8.8 %
Third-party managed cost of operations 60,099
59,823
55,379
8.5 % 8.0 %
Third-party managed segment contribution $ 3,777
$ 3,699
$ 2,988
26.4 % 23.8 %

Third-party managed margin 5.9 % 5.8 % 5.1 % 80 bps
70 bps


~~(1)~~	The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.

Third-party managed revenues were ~~$63.9~~$72.2 million for the three months ended ~~March 31, 2018, an increase~~June 30, 2021, a decrease of ~~$5.5~~$0.8 million, or ~~9.4%~~1.1%, compared to ~~$58.4~~$73.0 million for the three months ended ~~March 31, 2017.~~June 30, 2020. On a constant currency basis, third-party managed revenues were ~~$63.5~~$71.3 million for the three months ended ~~March 31, 2018, an increase~~June 30, 2021, a decrease of ~~$5.2~~$1.6 million, or ~~8.8%~~2.2%, ~~period-over-period. These increases were attributable~~from the three months ended June 30, 2020. This decrease was primarily a result of the exit of two Canadian managed sites during the second half of 2020, partially offset by higher labor costs, a portion of which is passed through to ~~higher business volume from our largest third-party managed~~ customers, in ~~the United States and Australia.~~our domestic managed operations. Additionally, our foreign operations experienced slightly higher volumes, as well as favorable impact of foreign currency translation.

Third-party managed cost of operations was ~~$60.1~~$70.5 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~$4.7~~$0.8 million, or ~~8.5%~~1.2%, compared to ~~$55.4~~$69.7 million for the three months ended ~~March 31, 2017. On a constant currency basis, third-party~~June 30, 2020. Third-party managed cost of operations ~~was $59.8 million for~~increased as a result of the ~~three months ended March 31, 2018, an increase of $4.4 million, or 8.0%, period-over-period.~~higher labor costs domestically as discussed in the revenue trends above.

Third-party managed segment contribution (NOI) was ~~$3.8~~$1.7 million for the three months ended ~~March 31, 2018, an increase~~June 30, 2021, a decrease of ~~$0.8~~$1.6 million, or ~~26.4%~~48.7%, compared to ~~$3.0~~$3.3 million for the three months ended March 31, 2017. On a constant currency basis, third-party managed segment contribution (NOI) was $3.7 million for the three months ended March 31, 2018, an increase of $0.7 million, or 23.8%, period-over-period. Improved margins in this segment were primarily driven by new business from our largest retail customer in Australia.June 30, 2020.

Transportation Segment

The following table presents the operating results of our transportation segment for the three months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~2020.


	Three Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
	(Dollars in thousands)
Transportation revenues	$	78,800		$	80,686		$	34,861		126.0	%	131.5	%



Transportation cost of operations	69,550			71,784			30,089			131.1	%	138.6	%
Transportation segment contribution (NOI)	$	9,250		$	8,902		$	4,772		93.8	%	86.5	%

Transportation margin	11.7		%	11.0		%	13.7		%	-195 bps		-266 bps

Three Months Ended March 31, Change
2018 actual
2018 constant currency⁽¹⁾
2017 actual Actual Constant currency
(Dollars in thousands)
Transportation revenues $ 38,345
$ 38,070
$ 36,181
6.0 % 5.2 %

Brokered transportation 28,121
28,022
25,884
8.6 % 8.3 %
Other cost of operations 6,630
6,477
6,744
(1.7 )% (4.0 )%
Total transportation cost of operations 34,751
34,499
32,628
6.5 % 5.7 %
Transportation segment contribution (NOI) $ 3,594
$ 3,571
$ 3,553
1.2 % 0.5 %

Transportation margin 9.4 % 9.4 % 9.8 % -40 bps
-40 bps


~~(1)~~	(1)The adjustments from our U.S. GAAP operating results ~~to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.~~

~~Our transportation segment continued its strategic shift~~ to ~~focus~~calculate our operating results on ~~more profitable solutions, which create value for our customers while driving and supporting our warehouse business including consolidation offerings.~~ a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.

Transportation revenues were ~~$38.3~~$78.8 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~$2.2~~$43.9 million, or ~~6.0%~~126.0%, compared to ~~$36.2~~$34.9 million for the three months ended ~~March 31, 2017. On a constant currency basis,~~June 30, 2020. The increase was primarily due to the revenue associated with transportation ~~revenues were $38.1 million for~~operations from the ~~year ended March 31, 2018, an increase of $1.9 million, or 5.2%, period-over-period. The strategic shift in our transportation segment resulted in higher revenue of $1.8 million~~ Hall’s acquisition, which closed

on ~~new~~November 2, 2020, the Agro acquisition, which closed on December 30, 2020 and ~~incremental business primarily from our domestic operations, which now focus on providing multi-vendor consolidation programs and dedicated transportation services. Our international operations led~~ to a much lesser extent the KMT Brrr! acquisition which closed in early May 2021. The increase was partially offset by the net decrease in revenue ~~increase~~from the rationalization of ~~$0.4 million primarily from incremental transportation services in Australia.~~certain domestic legacy market operations.

Transportation cost of operations was ~~$34.8~~$69.6 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~$2.1~~$39.5 million, or ~~6.5%~~131.1%, compared to ~~$32.6~~$30.1 million for the three months ended ~~March 31, 2017. On~~June 30, 2020. The increase was driven by the acquisitions and revenue trends mentioned above and a ~~constant currency basis, transportation cost of operations~~reduction in market capacity due to the COVID-19 pandemic, which has caused an increase in carrier fees.

Transportation segment contribution (NOI) was ~~$34.5~~$9.3 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~$1.9 million, or 5.7%, period-over-period. Brokered~~93.8% compared to the three months ended June 30, 2020. Transportation segment margin decreased 195 basis points from the three months ended June 30, 2020, to 11.7% from 13.7%. The decrease in margin was primarily due to the acquisition of lower-margin transportation ~~costs were~~business compared to our legacy operations, coupled with higher ~~than a year ago primarily~~carrier fees as a result of ~~an increase in domestic consolidation programs. The strategic shift referenced above led to a decline in other cost of operations for~~ the ~~segment.~~COVID-19 pandemic.

~~Transportation segment contribution (NOI)~~

Other Consolidated Operating Expenses

Depreciation and amortization. Depreciation and amortization expense was ~~$3.6~~$84.5 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~1.2% as~~$32.1 million, or 61.2%, compared to the three months ended March 31, 2017. Transportation segment margin decreased 40 basis points period-over-period, to 9.4% from 9.8%. Despite increased margins and greater efficiencies in our domestic transportation operations, the overall decrease in margins resulted from slightly lower margins in our international transportation business due to a shift in the customer mix in Australia. ~~On a constant currency basis, transportation segment contribution was $3.6~~$52.4 million for the three months ended ~~March 31, 2018, an increase of 0.5%, period-over-period.~~

~~Quarry Revenues and Cost of Operations~~

~~The following table presents the operating results of our quarry segment for the three months ended March 31, 2018 and 2017.~~

Three Months Ended March 31, Change
2018 2017
(Dollars in thousands)
Quarry revenues $ 2,403
$ 2,559
(6.1 )%
Quarry cost of operations 2,057
1,656
24.2 %
Quarry segment contribution (NOI) $ 346
$ 903
(61.7 )%

Quarry margin 14.4 % 35.3 % n/m

~~n/m: not meaningful~~

Quarry revenues were $2.4 million for the three months ended March 31, 2018, a decrease of $0.2 million or 6.1% compared to $2.6 million for the three months ended March 31, 2017. Lower revenues in our quarry operations were attributable to lower demand from our construction and industrial customers. Demand from these customers was higher in the comparable prior period as favorable weather conditions led to an early start of the 2017 construction season.

~~Quarry cost of operations was $2.1 million for the three months ended March 31, 2018, an increase of $0.4 million, or 24.2%, compared to $1.7 million for the three months ended March 31, 2017.~~June 30, 2020. This increase was primarily due to ~~higher maintenance costs for production equipment.~~the acquisitions in late 2020 and 2021.

Quarry segment contribution (NOI) was $0.3 million for the three months ended March 31, 2018, as compared to a contribution (NOI) of $0.9 million for the three months ended March 31, 2017, largely driven by the economic factors described above.

~~Other Consolidated Operating Expenses~~

Selling, general and administrative. Corporate-level selling, general and administrative expenses were ~~$31.9~~$42.5 million for the three months ended ~~March 31, 2018,~~June 30, 2021, an increase of ~~$7.2~~$10.1 million, or ~~29.0%~~31.3%, compared to ~~$24.8~~$32.3 million for the three months ended ~~March 31, 2017.~~June 30, 2020. Included in these amounts are business development expenses attributable to ~~our~~new business pursuits, supply chain solutions and underwriting, facility development, customer ~~onboarding,~~on-boarding, and engineering and consulting services to support our customers in the cold chain. WeWe believe these costs are comparable to leasing costs for other ~~publicly traded~~publicly-traded REITs. The increase ~~in corporate-level selling, general~~was driven by costs assumed from the Agro and ~~administrative~~Hall’s acquisitions, net of synergies realized and higher third-party professional fees.

Acquisition, litigation and other. Corporate-level acquisition, litigation and other expenses ~~period-over period was primarily due~~were $3.9 million for the three months ended June 30, 2021, an increase of $1.1 million compared to ~~higher stock-based compensation expense~~the three months ended June 30, 2020. During the three months ended June 30, 2021, we incurred ~~for i) the issuance~~$3.1 million of ~~retention equity awards to certain employees~~acquisition related expenses primarily comprised of professional fees and ~~non-employee directors~~integration related costs in connection with ~~the IPO; ii) the issuance of new long-term incentive equity awards~~completed and potential acquisitions, and $0.8 million related to ~~certain employees in February 2018; and iii) the modification of certain terms governing equity awards issued~~insurance claim deductibles partially offset by recoveries under the ~~2010 Equity Incentive Plan in January 2018. Included in corporate-level selling, general and administrative expense for~~claims. During the ~~first quarter~~three months ended June 30, 2020, we incurred $2.7 million of ~~2018 were also higher~~acquisition related expenses primarily composed of professional fees and integration related costs in connection with potential acquisitions.

Impairment of long-lived assets. For the three and six months ended June 30, 2021, we ~~have, and will~~recorded impairment charges totaling $1.5 million, related to costs incurred for development projects which management determined it would not continue to ~~incur, in preparation for our annual assessment of internal control over financial reporting, higher audit fees as a public company, and other professional fees.~~pursue. For the three months ended June 30, 2020, we recorded an impairment charge of $3.7 million related to the anticipated sale of our quarry business, which was subsequently completed on July 1, 2020.

Gain from sale of real estate. For the three months ended June 30, 2020, we recorded a $19.4 million gain from the sale of owned property. On June 19, 2020, we completed the sale of a facility in our Warehouse segment, and began to transition the business to other nearby facilities, resulting in the aforementioned gain from sale of real estate.

Other Expense and Income

The following table presents other items of expense and income for the three months ended June 30, 2021 and 2020.


	Three Months Ended June 30,				Change
	2021		2020		%
Other (expense) income:	(Dollars in thousands)
Interest expense	$	(26,579)	$	(23,178)	14.7	%
Interest income	191		261		(26.8)	%

Loss on debt extinguishment, modifications and termination of derivative instruments	(925)		—		100.0	%
Foreign currency exchange (loss) gain, net	(140)		315		144.4	%
Other income - net	184		44		318.2	%
Loss from investments in partially owned entities	(61)		(129)		(52.7)	%

Interest expense. Interest expense was $26.6 million for the three months ended June 30, 2021, an increase of $3.4 million, or 14.7%, compared to $23.2 million for the three months ended June 30, 2020. The increase was primarily due to the issuance of the Series D and Series E Senior Unsecured Notes in December 2020. This was partially offset by the decrease in interest expense on our Senior Unsecured Term Loan A Facility due to the early principal repayment of $100.0 million and $200.0 million in December 2020 and January 2021, respectively. The effective interest rate of our outstanding debt decreased from 4.15% in the second quarter of 2020 to 3.16% in the second quarter of 2021.

Interest income. Interest income was $0.2 million for the three months ended June 30, 2021, which decreased by $0.1 million when compared to the $0.3 million for three months ended June 30, 2020. This change was primarily driven by a lower interest rate of 0.10% earned during the second quarter of 2021 compared to 0.20% during the second quarter of 2020, paired with lower average cash balances in 2021 compared to 2020.

Loss on debt extinguishment, modifications and termination of derivative instruments. Loss on debt extinguishment, modifications, and termination of derivative instruments of $0.9 million for the three months ended June 30, 2021 was primarily driven by the amortization of fees paid for the termination of interest rate swaps during 2020.

Other income - net. Other income - net was $0.2 million for the three months ended June 30, 2021. The increase of $0.1 million was primarily driven by the gain on disposal of miscellaneous personal property.

Loss from investments in partially owned entities. During the second quarter of 2021 we incurred $0.1 million as our portion of net loss from the SuperFrio joint venture, partially offset by net income from the Comfrio joint venture stemming from a gain on sale of real estate during the current period. During the second quarter of 2020, we entered into the Superfrio joint venture for which we recorded a nominal amount as our portion of loss for the second quarter of 2020.

Income Tax Expense

Income tax expense for the three months ended June 30, 2021 was $9.0 million, an increase of $7.8 million from an income tax expense of $1.2 million for the three months ended June 30, 2020. The change in income tax expense was primarily attributable to the tax effects of the rate change from 19% to 25% in the United Kingdom, enacted during the second quarter of 2021, for which we recorded deferred income tax expense of $14.5 million and a decrease in our valuation allowance for which we recorded a deferred tax benefit of $3.7 million attributable

to recent acquisitions. The remainder was primarily attributable to losses generated from our foreign operations during the quarter ended June 30, 2021 which did not occur during the three months ended June 30, 2020.

Comparison of Results for the Six Months Ended June 30, 2021 and 2020

Warehouse Segment

The following table presents the operating results of our warehouse segment for the six months ended June 30, 2021 and 2020.


	Six Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
	(Dollars in thousands)
Rent and storage	$	417,553		$	409,564		$	325,973		28.1	%	25.6	%
Warehouse services	571,632			554,605			427,506			33.7	%	29.7	%
Total warehouse segment revenues	989,185			964,169			753,479			31.3	%	28.0	%

Power	58,384			57,324			41,773			39.8	%	37.2	%
Other facilities costs (2)	102,093			100,166			66,747			53.0	%	50.1	%
Labor	438,959			425,813			335,596			30.8	%	26.9	%
Other services costs (3)	99,189			97,334			62,458			58.8	%	55.8	%
Total warehouse segment cost of operations	$	698,625		$	680,637		$	506,574		37.9	%	34.4	%

Warehouse segment contribution (NOI)	$	290,560		$	283,532		$	246,905		17.7	%	14.8	%
Warehouse rent and storage contribution (NOI) (4)	$	257,076		$	252,074		$	217,453		18.2	%	15.9	%
Warehouse services contribution (NOI) (5)	$	33,484		$	31,458		$	29,452		13.7	%	6.8	%

Total warehouse segment margin	29.4		%	29.4		%	32.8		%	-340 bps		-336 bps
Rent and storage margin(6)	61.6		%	61.5		%	66.7		%	-514 bps		-516 bps
Warehouse services margin(7)	5.9		%	5.7		%	6.9		%	-103 bps		-122 bps

(2)Includes real estate rent expense of $19.4 million and $5.8 million, on an actual basis, for the six months ended June 30, 2021 and 2020, respectively.

(3)Includes non-real estate rent expense (equipment lease and rentals) of $5.8 million and $5.3 million, on an actual basis, for the six months ended June 30, 2021 and 2020, respectively.

(4)Calculated as rent and storage revenues less power and other facilities costs.

(5)Calculated as warehouse services revenues less labor and other services costs.

(6)Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenues.

(7)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.

Warehouse segment revenues were $989.2 million for the six months ended June 30, 2021 an increase of $235.7 million, or 31.3%, compared to $753.5 million for the six months ended June 30, 2020. On a constant currency basis, our warehouse segment revenues were $964.2 million for the six months ended June 30, 2021, an increase of $210.7 million or 28.0%, from the six months ended June 30, 2020. Approximately $229.8 million of the increase, on an actual currency basis, was driven by acquisitions completed during 2020 and 2021, including the growth experienced period-over-period during overlapping periods of ownership. We acquired 61 warehouse facilities as a result of the Agro, Hall’s, AM-C, Caspers and Liberty acquisitions between July 1, 2020 and March 31, ~~2018~~2021. As a result, these facilities are reflected in the entirety of the current period but none of the comparable prior period. Additionally, we acquired two facilities on May 5, 2021 as a result of the KMT Brrr! acquisition and ~~2017, corporate-level~~one facility on May 28, 2021 as a result of the Bowman Stores acquisition, and the results of these facilities are

included in the current period since the date of acquisition. Revenue growth was also due to contractual rate escalations and our recently completed developments. This was partially offset by COVID-19 and the related labor challenges which continued to impact food production. The foreign currency translation of revenues earned by our foreign operations had a $25.0 million favorable impact during the six months ended June 30, 2021, which was mainly driven by the weakening of the U.S. dollar over the Australian dollar, Euro, and Canadian dollar.

Warehouse segment cost of operations was $698.6 million for the six months ended June 30, 2021, an increase of $192.1 million, or 37.9%, compared to the six months ended June 30, 2020. On a constant currency basis, our warehouse segment cost of operations was $680.6 million for the three months ended June 30, 2021, an increase of $174.1 million, or 34.4%, from the six months ended June 30, 2020. Approximately $175.0 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment we acquired in connection with the aforementioned acquisitions. In addition, we incurred increases in our cost of operations in response to COVID-19, power, labor, property tax and insurance costs, all of which are reflective of current market trends. This is partially offset by the appreciation bonus we paid to front-line associates to recognize the dedication and efforts of our associates during the COVID-19 pandemic during the second quarter of 2020, which totaled $4.3 million. Additionally, the foreign currency translation of expenses incurred by our foreign operations had a net $18.0 million unfavorable impact during the six months ended June 30, 2021.

For the six months ended June 30, 2021, warehouse segment contribution (NOI), increased $43.7 million, or 17.7%, to $290.6 million for the six months ended June 30, 2021, compared to $246.9 million for the six months ended June 30, 2020. The foreign currency translation of our results of operations had a $7.0 million favorable impact to the warehouse segment contribution period-over-period. On a constant currency basis, warehouse segment NOI increased $36.6 million. Approximately $54.8 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment as a result of the aforementioned acquisitions, including the growth and synergies experienced period-over-period during overlapping periods of ownership. The remainder of the increase was driven by contractual rate escalations, the impact of the appreciation bonus paid during the second quarter of 2020 and disciplined cost controls through the Americold Operating System of our other services costs, which allowed us to generate higher contribution margins. The increases were partially offset by the currency translation impact of the strengthening of the U.S. dollar, lower holdings driven by the impact of COVID-19 on the food manufacturing supply chain and the increase in costs including power, property insurance and taxes and facility leasing costs.

Same Store and Non-Same Store Analysis

We had 162 same stores for the six months ended June 30, 2021. Please see “How We Assess the Performance of Our Business—Same Store Analysis” above for a reconciliation of the change in the same store portfolio from period to period. Amounts related to the acquisitions of Agro, AM-C Warehouses, Bowman Stores, Caspers, Halls, KMT Brrr! and Liberty Freezers, one recently leased warehouse in Australia, as well as certain expansion and development projects not yet stabilized are reflected within non-same store results.


	Six Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of same store sites	162						162			n/a		n/a
Same store revenues:	(Dollars in thousands)
Rent and storage	$	300,150		$	296,836		$	305,698		(1.8)	%	(2.9)	%
Warehouse services	415,343			404,021			408,693			1.6	%	(1.1)	%
Total same store revenues	715,493			700,857			714,391			0.2	%	(1.9)	%
Same store cost of operations:
Power	39,611			39,347			39,244			0.9	%	0.3	%
Other facilities costs	65,982			65,208			61,959			6.5	%	5.2	%
Labor	319,956			310,763			313,841			1.9	%	(1.0)	%
Other services costs	55,217			54,843			57,198			(3.5)	%	(4.1)	%
Total same store cost of operations	$	480,766		$	470,161		$	472,242		1.8	%	(0.4)	%

Same store contribution (NOI)	$	234,727		$	230,696		$	242,149		(3.1)	%	(4.7)	%
Same store rent and storage contribution (NOI)(2)	$	194,557		$	192,281		$	204,495		(4.9)	%	(6.0)	%
Same store services contribution (NOI)(3)	$	40,170		$	38,415		$	37,654		6.7	%	2.0	%

Total same store margin	32.8		%	32.9		%	33.9		%	-109 bps		-98 bps
Same store rent and storage margin(4)	64.8		%	64.8		%	66.9		%	-207 bps		-212 bps
Same store services margin(5)	9.7		%	9.5		%	9.2		%	46 bps		29 bps


	Six Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of non-same store sites	75						10			n/a		n/a
Non-same store revenues:	(Dollars in thousands)
Rent and storage	$	117,403		$	112,728		$	20,275		479.1	%	456.0	%
Warehouse services	156,289			150,584			18,813			730.8	%	700.4	%
Total non-same store revenues	273,692			263,312			39,088			600.2	%	573.6	%
Non-same store cost of operations:
Power	18,773			17,977			2,529			642.3	%	610.8	%
Other facilities costs	36,111			34,958			4,788			654.2	%	630.1	%
Labor	119,003			115,050			21,755			447.0	%	428.8	%
Other services costs	43,972			42,491			5,260			736.0	%	707.8	%
Total non-same store cost of operations	$	217,859		$	210,476		$	34,332		534.6	%	513.1	%

Non-same store contribution (NOI)	$	55,833		$	52,836		$	4,756		1,073.9	%	1,010.9	%
Non-same store rent and storage contribution (NOI)(2)	$	62,519		$	59,793		$	12,958		382.5	%	361.4	%
Non-same store services contribution (NOI)(3)	$	(6,686)		$	(6,957)		$	(8,202)		18.5	%	15.2	%

Total non-same store margin	20.4		%	20.1		%	12.2		%	823 bps		790 bps
Non-same store rent and storage margin(4)	53.3		%	53.0		%	63.9		%	-1066 bps		-1087 bps
Non-same store services margin(5)	(4.3)		%	(4.6)		%	(43.6)		%	3932 bps		3898 bps


	Six Months Ended June 30,						Change
	2021 actual		2021 constant currency(1)		2020 actual		Actual		Constant currency
Total warehouse segment revenues	$	989,185	$	964,169	$	753,479	31.3	%	28.0	%
Total warehouse cost of operations	$	698,625	$	680,637	$	506,574	37.9	%	34.4	%
Total warehouse segment contribution	$	290,560	$	283,532	$	246,905	17.7	%	14.8	%

(2)Calculated as rent and storage revenues less power and other facilities costs.

(3)Calculated as warehouse services revenues less labor and other services costs.

(4)Calculated as rent and storage contribution (NOI) divided by rent and storage revenues.

(5)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.

n/a - not applicable, the change in actual and constant currency metrics does not apply to site count

The following table provides certain operating metrics to explain the drivers of our same store performance.


	Six Months Ended June 30,
Units in thousands except per pallet and site number data - unaudited	2021			2020			Change
Number of same store sites	162			162			n/a
Same store rent and storage:

Economic occupancy(1)
Average occupied economic pallets	2,858			3,033			(5.8)	%
Economic occupancy percentage	76.0		%	80.9		%	-498 bps
Same store rent and storage revenues per economic occupied pallet	$	105.01		$	100.80		4.2	%
Constant currency same store rent and storage revenues per economic occupied pallet	$	103.85		$	100.80		3.0	%

Physical occupancy(2)
Average physical occupied pallets	2,538			2,799			(9.3)	%
Average physical pallet positions	3,763			3,747			0.4	%
Physical occupancy percentage	67.4		%	74.7		%	-725 bps
Same store rent and storage revenues per physical occupied pallet	$	118.25		$	109.20		8.3	%
Constant currency same store rent and storage revenues per physical occupied pallet	$	116.94		$	109.20		7.1	%

Same store warehouse services:
Throughput pallets (in thousands)	14,476			15,080			(4.0)	%
Same store warehouse services revenues per throughput pallet	$	28.69		$	27.10		5.9	%
Constant currency same store warehouse services revenues per throughput pallet	$	27.91		$	27.10		3.0	%

Number of non-same store sites(3)	75			10			n/a
Non-same store rent and storage:

Economic occupancy(1)
Average economic occupied pallets	1,102			178			519.1	%
Economic occupancy percentage	76.7		%	63.4		%	1332 bps
Non-same store rent and storage revenues per economic occupied pallet	$	106.49		$	114.02		(6.6)	%
Constant currency non-same store rent and storage revenues per economic occupied pallet	$	102.25		$	114.02		(10.3)	%

Physical occupancy(2)
Average physical occupied pallets	1,079			171			531.0	%
Average physical pallet positions	1,437			280			413.2
Physical occupancy percentage	75.1		%	60.9		%	1421 bps
Non-same store rent and storage revenues per physical occupied pallet	$	108.82		$	118.76		(8.4)	%
Constant currency non-same store rent and storage revenues per physical occupied pallet	$	104.49		$	118.76		(12.0)	%

Non-same store warehouse services:
Throughput pallets (in thousands)	4,973			835			495.6	%
Non-same store warehouse services revenues per throughput pallet	$	31.43		$	22.52		39.6	%
Constant currency non-same store warehouse services revenues per throughput pallet	$	30.28		$	22.52		34.5	%

Economic occupancy at our same stores was 76.0% for the six months ended June 30, 2021, a decrease of 498 basis points compared to 80.9% for the six months ended June 30, 2020. Storage levels were lower than prior year levels due to ongoing supply chain disruption as a result of the COVID-19 pandemic, as well as food manufacturers producing at less than full capacity. As such, our customers’ existing inventories have continued to be drawn down to support steady consumer demand. Additionally, recent acquisitions came into the same store pool during the first quarter of 2021 which have a lower percentage of fixed commitment revenue compared to our legacy same stores. Our second quarter 2020 economic occupancy at our same stores was 851 basis points higher than our corresponding average physical occupancy of 67.4%. The decrease of 725 basis points in average physical occupancy compared to 74.7% for the six months ended June 30, 2020 was driven by supply chain fluctuations caused by the COVID-19 pandemic. Same store rent and storage revenues per economic occupied pallet increased 4.2% period-over-period, primarily driven by improvements in our commercial terms and contractual rate escalations. On a constant currency basis, our same store rent and storage revenues per occupied pallet increased 3.0% period-over-period.

Throughput pallets at our same stores were 14.5 million pallets for the six months ended June 30, 2021, a decrease of 4.0% from the six months ended June 30, 2020. This decrease was the result of the COVID-19 related impacts in various sectors and commodities, and was primarily driven by the unprecedented surge in demand in retail during the first half of 2020. As food manufacturers production has not reached full pre-pandemic capacity, throughput has been impacted, with modest improvement during the second quarter of 2021. Food manufacturers have been unable to rebuild holdings in the supply chain due to challenges in the labor market. Same store warehouse services revenues per throughput pallet increased 5.9% period-over-period, as a result of a more favorable customer mix, contractual rate escalations and an increase in higher priced value-added services within the retail sector such as case-picking, blast freezing and repackaging and contractual rate escalations, paired with favorable foreign currency translation as previously discussed. On a constant currency basis, our same store services revenues per throughput pallet increased 3.0% from the six months ended June 30, 2020.

Third-Party Managed Segment

The following table presents the operating results of our third-party managed segment for the six months ended June 30, 2021 and 2020.


	Six Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
Number of managed sites	9						11			n/a		n/a
	(Dollars in thousands)
Third-party managed revenues	$	145,245		$	143,602		$	137,875		5.3	%	4.2	%
Third-party managed cost of operations	139,170			137,800			130,807			6.4	%	5.3	%
Third-party managed segment contribution	$	6,075		$	5,802		$	7,068		(14.0)	%	(17.9)	%

Third-party managed margin	4.2		%	4.0		%	5.1		%	-94 bps		-109 bps

Third-party managed revenues were $145.2 million for the six months ended June 30, 2021, an increase of $7.4 million, or 5.3%, compared to $137.9 million for the six months ended June 30, 2020. On a constant currency basis, third-party managed revenues were $143.6 million for the six months ended June 30, 2021, an increase of $5.7 million, or 4.2%, from the six months ended June 30, 2020. This increase was a result of higher business volume and higher pass-through labor expenses in our domestic and foreign managed operations due to the consumer demand shift to retail paired with the favorable impact of foreign currency translation related to our Australian managed revenues. This increase was partially offset by the exit of two Canadian managed sites during the second half of 2020.

Third-party managed cost of operations was $139.2 million for the six months ended June 30, 2021, an increase of $8.4 million, or 6.4%, compared to $130.8 million for the six months ended June 30, 2020. On a constant currency basis, third-party managed cost of operations was $137.8 million for the six months ended June 30, 2021, an increase of $7.0 million, or 5.3%, from the six months ended June 30, 2020. Third-party managed cost of operations increased as a result of the revenue trends described above.

Third-party managed segment contribution (NOI) was $6.1 million for the six months ended June 30, 2021, a decrease of $1.0 million, or 14.0%, compared to $7.1 million for the six months ended June 30, 2020. On a constant currency basis, third-party managed segment contribution (NOI) was $5.8 million for the six months ended June 30, 2021, a decrease of $1.3 million, or 17.9%.

Transportation Segment

The following table presents the operating results of our transportation segment for the six months ended June 30, 2021 and 2020.


	Six Months Ended June 30,									Change
	2021 actual			2021 constant currency(1)			2020 actual			Actual		Constant currency
	(Dollars in thousands)
Transportation revenues	$	155,072		$	154,264		$	70,778		119.1	%	118.0	%



Total transportation cost of operations	139,119			138,828			61,201			127.3	%	126.8	%
Transportation segment contribution (NOI)	$	15,953		$	15,436		$	9,577		66.6	%	61.2	%

Transportation margin	10.3		%	10.0		%	13.5		%	-324 bps		-352 bps

Transportation revenues were $155.1 million for the six months ended June 30, 2021, an increase of $84.3 million, or 119.1%, compared to $70.8 million for the six months ended June 30, 2020. The increase was primarily due to the revenue associated with transportation operations from the Hall’s acquisition, which closed on November 2, 2020, the Agro acquisition, which closed on December 30, 2020 and to a much lesser extent the KMT Brrr! acquisition which closed in early May 2021. Furthermore, this is offset by the net decrease in revenue from the rationalization of certain domestic market operations. On a constant currency basis, transportation revenues were $154.3 million for the six months ended June 30, 2021, an increase of $83.5 million, or 118.0%, from the six months ended June 30, 2020.

Transportation cost of operations was $139.1 million for the six months ended June 30, 2021, an increase of $77.9 million, or 127.3%, compared to $61.2 million for the six months ended June 30, 2020. On a constant currency basis, transportation cost of operations was $138.8 million for the six months ended June 30, 2021, an increase of $77.6 million, or 126.8%, from the six months ended June 30, 2020. The increase was driven by the acquisitions mentioned above and due to a reduction in market capacity due to the COVID-19 pandemic, which has caused an increase in carrier fees. Additionally, this is partially offset by the net decrease of costs from the exit of certain domestic market operations.

Transportation segment contribution (NOI) was $16.0 million for the six months ended June 30, 2021, an increase of $6.4 million compared to the six months ended June 30, 2020. Transportation segment margin decreased 324 basis points from the six months ended June 30, 2020, to 10.3% from 13.5%. On a constant currency basis, transportation segment contribution was $15.4 million for the six months ended June 30, 2021, an increase of $5.9 million compared to the six months ended June 30, 2020. The decrease in margin was primarily due to the acquisition of lower-margin transportation business compared to our legacy operations, coupled with higher carrier fees as a result of the COVID-19 pandemic.

Other Consolidated Operating Expenses

Depreciation and amortization. Depreciation and amortization expense was $161.7 million for the six months ended June 30, 2021, an increase of $57.7 million, or 55.4%, compared to $104.0 million for the six months ended June 30, 2020. This increase was primarily due to the acquisitions in late 2020 and 2021.

Selling, general and administrative. Corporate-level selling, general and administrative expenses were ~~8.2% and 6.6%~~$87.5 million for the six months ended June 30, 2021, an increase of $18.3 million, or 26.4%, ~~respectively, of total revenues.~~

compared to

$69.2 million for the six months ended June 30, 2020. Included in these amounts are business development expenses attributable to new business pursuits, supply chain solutions and underwriting, facility development, customer on-boarding, and engineering and consulting services to support our customers in the cold chain. We believe these costs are comparable to leasing costs for other publicly-traded REITs. The increase was driven by costs assumed from the Agro and Hall’s acquisitions, net of synergies realized and higher third-party professional fees.

Acquisition, litigation and other. Corporate-level acquisition, litigation and other expenses were $24.7 million for the six months ended June 30, 2021, an increase of $20.2 million compared to the six months ended June 30, 2020. During the six months ended June 30, 2021, we incurred $16.6 million of acquisition related expenses primarily composed of professional fees and integration related costs, including severance and employee retention expenses, in connection with completed and potential acquisitions, primarily related to the Agro acquisition. We also incurred $4.5 million of ongoing costs related to the cyber event that occurred in late 2020. During the six months ended June 30, 2020, we incurred $3.4 million of acquisition related expenses primarily composed of employee retention, professional fees and integration related costs in connection with completed and potential acquisitions. Additionally, we incurred $1.1 million of severance related to reduction in headcount as a result of the synergies from acquisitions and realignment of our international operations during the first half of 2020.

Impairment of long-lived assets. For the six months ended June 30, 2021, we recorded impairment charges totaling $1.5 million, resulting from the write off of costs incurred for development projects which management determined it would not continue to pursue. For the six months ended June 30, 2020, we recorded impairment charges of $3.7 million, which related to the anticipated sale of our quarry business, which was subsequently completed on July 1, 2020.

Gain from sale of real estate. For the six months ended June 30, 2020, we recorded a $21.9 million gain from the sale of real estate. On January 31, 2020, we received official notice from a customer to exercise its contractual call option to purchase land from us in Sydney, Australia, which we previously purchased for future development. We received sale proceeds upon exercise of the call option during the first quarter of 2020, resulting in a $2.5 million gain on sale. Additionally, on June 19, 2020, we completed the sale of a facility in our Warehouse segment, and began to transition the business to other nearby facilities, resulting in a $19.4 million gain from sale of real estate.

Other ~~Income~~Expense and ~~Expense~~Income

The following table presents other items of income and expense for the ~~years~~six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017~~.2020.


	Three Months Ended March 31,						Change			Six Months Ended June 30,				Change
	2018			2017			%			2021		2020		%
Other (expense) income:	(In thousands)								Other (expense) income:	(Dollars in thousands)
Interest expense	$	(24,495	)	$	(27,727	)	(11.7	)%	Interest expense	$	(52,535)	$	(47,048)	11.7	%
Interest income	623			257			142.4	%	Interest income	$	415	$	848	(51.1)	%
Loss on debt extinguishment and modification	(21,385		)	(171		)	n/m

Loss on debt extinguishment, modifications and termination of derivative instruments									Loss on debt extinguishment, modifications and termination of derivative instruments	$	(4,424)	$	(781)	n/r
Foreign currency exchange gain (loss)	680			(2,773		)	n/m		Foreign currency exchange gain (loss)	$	33	$	(177)	n/r
Other income (expense) - net	56			(467		)	(112.0	)%
Other expense - net									Other expense - net	$	689	$	915	(24.7)	%
Loss from investments in partially owned entities									Loss from investments in partially owned entities	$	(761)	$	(156)	n/r

n/m:r: not ~~meaningful~~relevant

Interest expense. Interest expense was ~~$24.5~~$52.5 million for the ~~three~~six months ended ~~March 31, 2018, a decrease~~June 30, 2021, an increase of ~~$3.2~~$5.5 million, or 11.7%, compared to ~~$27.7~~$47.0 million for the ~~three~~six months ended ~~March 31, 2017. In connection with~~June 30, 2020. The increase was primarily due to the ~~IPO, we used~~issuance of the ~~net proceeds from~~Series D and Series E Senior Unsecured Notes in December 2020. This was partially offset by the ~~equity offering and the 2018~~decrease in interest expense on our Senior ~~Secured~~Unsecured Term Loan A Facility due to ~~pay~~the early principal repayment of $100.0 million and $200.0 million in ~~full~~December 2020 and January 2021, respectively. The effective interest rate of our ~~2015 Senior Secured Term Loan B Facility, which had a balance~~ outstanding ~~of approximately $703.0 million during~~debt has decreased from 4.22% for the ~~first quarter of 2017. In addition,~~six months ended June 30, 2020 to 3.24% for the six months ended June 30, 2021, however, outstanding principal has increased from $1.8 billion as of ~~March 31, 2017 we had a balance outstanding~~June 30, 2020 to $2.6 billion as of ~~$29.0 million under our 2015 Senior Secured Revolving Credit Facility, but had no outstanding balance under our 2018 Senior Secured Revolving Credit Facility during the first quarter of 2018.~~June 30, 2021.

Interest income. Interest income ~~of $0.6~~was $0.4 million for the ~~three~~six months ended ~~March 31, 2018 was 142.4% higher~~June 30, 2021, a decrease of $0.4 million when compared to the ~~amount~~$0.8 million reported for ~~three~~the six months ended ~~March 31, 2017.~~June 30, 2020. This ~~period-over-period~~ change was primarily driven by a lower interest rate of 0.12% earned during the ~~increase in net cash provided by our financing activities in January 2018.~~six months ended June 30, 2021 as compared to 0.82% during the six months ended June 30, 2020.

Loss on debt extinguishment, modifications and ~~modification. We recognized a $21.4 million charge primarily to write-off unamortized~~termination of derivative instruments. Loss on debt ~~issuance costs in connection with the refinancing~~extinguishment, modifications, and termination of ~~our 2015 Senior Secured Credit Facilities. A small portion~~derivative instruments of ~~that charge includes certain financing costs we incurred in connection with the issuance of our 2018 Senior Secured Credit Facilities that could not be capitalized.~~

~~Foreign currency exchange gain (loss).~~ ~~We reported a foreign currency exchange gain of $0.7~~$4.4 million for the ~~three~~six months ended ~~March 31, 2018 as compared to a $2.8~~June 30, 2021 was primarily driven by the early repayment of $200 million ~~foreign currency exchange loss for~~of principal on the three months ended March 31, 2017. The periodic re-measurement of an intercompany loan denominated in Australian dollars, issued from our Australian subsidiary to one of our U.S. corporate subsidiaries,Senior Unsecured Term Loan A Facility, which resulted in a ~~foreign currency exchange gain in~~charge of $2.9 million for the write-off of unamortized deferred financing costs. Additionally, we recorded a charge of $1.4 million for the amortization of fees paid for the termination of interest rate swaps during 2020. During the first quarter of ~~2018 as~~2020 we refinanced our Senior Unsecured Credit Facility, which resulted in the ~~U.S. dollar strengthened against~~write-off of certain unamortized deferred financing costs.

Other income, net. During the ~~Australian dollar as~~six months ended June 30, 2021, we reported other income of $0.7 million, compared to ~~the three months ended March 31, 2017. In addition, the balance outstanding under this intercompany loan was $15.0 million higher during the first quarter of 2017.~~

~~Other income (expense) - net. In this line item, which represents income or expense outside our operating segments, we reported a net~~other income of ~~$0.1~~$0.9 million for the ~~three~~six months ended ~~March 31, 2018 as compared~~June 30, 2020. During the six months ended June 30, 2021, other income was mainly due to a net gain from asset disposals. During the six months ended June 30, 2020, other income was mainly due to a lease restoration payment received from a tenant in one of our facilities, and net gains from asset disposals.

Loss from investments in partially owned entities. During the six months ended June 30, 2021, we incurred $0.8 million as our portion of net loss from the SuperFrio and Comfrio joint ventures. During the six months ended June 30, 2020, we entered into the Superfrio joint venture for which we recorded a nominal amount as our portion of loss for the period of our ownership.

Income Tax Expense

Income tax expense for the six months ended June 30, 2021 was $8.2 million, a decrease of ~~$0.5~~$6.5 million when compared to $1.7 million for the ~~three~~six months ended ~~March 31, 2017. This~~June 30, 2021. The change ~~is attributed~~in income tax expense was primarily attributable to ~~higher pension expense~~the tax effects of the rate change from 19% to 25% in ~~2017 as a result~~the United Kingdom, enacted during the second quarter of ~~a lump sum settlement.~~

~~Income Tax Benefit (Expense)~~

~~Income tax benefit~~2021, for ~~the three months ended March 31, 2018 was $0.1 million,~~ which ~~represented a change of $1.6 million, or 106.0% from an~~we recorded deferred income tax expense of ~~$1.5~~$14.5 million and a decrease in our valuation allowance for which we recorded a deferred tax benefit of $3.7 million attributable to recent acquisitions. The remainder was primarily attributable to losses generated from our foreign operations which did not occur during the ~~three~~six months ended

June 30, 2020.

March 31, 2017. This change was mainly driven by a reduction in the projected annual effective tax rate associated with the enactment of the TCJA and lower income reported by our taxable REIT foreign subsidiaries.

Non-GAAP Financial Measures

We use the following ~~Non-GAAP~~non-GAAP financial measures as supplemental performance measures of our business: FFO, Core FFO, Adjusted FFO, EBITDAre and Core EBITDA.



We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S. GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, real estate asset impairment and ~~after adjustments~~our share of reconciling items for ~~unconsolidated partnerships and joint ventures.~~ partially owned entities. We believe that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can facilitate comparisons of operating performance between periods and among other equity REITs.
We calculate core funds from operations, or Core FFO, as FFO adjusted for the effects of gain or loss on the sale of non-real estate assets, ~~non-offering related IPO expenses, stock-based~~non-real estate asset impairment, acquisition, litigation and other, share-based compensation expense for the IPO retention grants, ~~severance and reduction in workforce costs, acquisition, diligence and other pursuit costs,~~ loss on debt extinguishment, modifications and ~~modification,~~termination of derivative instruments and foreign currency exchange ~~gain or~~ loss. We also adjust for the impact of Core FFO attributable to partially owned entities. We have elected to reflect our share of Core FFO attributable to partially owned entities since the Brazil joint ventures are strategic partnerships, which we continue to actively participate in on an ongoing basis. The previous joint venture, the China JV, was considered for disposition during the periods presented. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.
However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of ~~recurring~~ 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.
We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of ~~loan~~deferred financing costs, ~~debt discounts~~pension withdrawal liability and above or below market leases, straight-line net rent, provision or benefit from deferred income taxes, ~~stock-based~~share-based compensation expense from grants of stock options and restricted stock units under our equity incentive plans, excluding IPO grants, non-real estate depreciation ~~depletion or~~and amortization, ~~(including in respect of the China JV),~~ and ~~recurring~~ maintenance capital expenditures. 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.
FFO, Core FFO and Adjusted FFO are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs. FFO, Core FFO and Adjusted FFO should be evaluated along with U.S. GAAP net income and net income per diluted share (the most directly comparable U.S. GAAP measures) in evaluating our operating performance. FFO, Core FFO and Adjusted FFO do not represent net income or cash flows from operating activities in accordance with U.S. GAAP and are not indicative of our results of operations or cash flows from operating activities as disclosed in our consolidated statements of operations included elsewhere in this Quarterly Report on Form 10-Q. FFO, Core FFO and Adjusted FFO should be considered as supplements, but not alternatives, to our net income or cash flows from operating activities as indicators of our operating performance. Moreover, other REITs may not calculate FFO in accordance with the NAREIT definition or may interpret the NAREIT definition differently than we do. Accordingly, our FFO may not be comparable to FFO as calculated by other REITs. In addition, there is no industry definition of Core FFO or Adjusted FFO and, as a result, other REITs may also calculate Core FFO or Adjusted FFO, or other similarly-captioned metrics, in a manner different than we do. The table ~~above~~below reconciles FFO, Core FFO and Adjusted FFO to net (loss) income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP.


Reconciliation of Net (Loss) Income to NAREIT FFO, Core FFO, and Adjusted FFO
(in thousands)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net (loss) income	$	(13,399)	$	32,662	$	(27,635)	$	56,173
Adjustments:
Real estate related depreciation	44,871		35,558		97,151		71,000
Net gain on sale of real estate, net of withholding taxes	—		(19,414)		—		(21,510)
Net gain on asset disposals	(13)		(3)		(52)		(3)
Impairment charges on certain real estate assets	1,528		3,181		1,528		3,181

Our share of reconciling items related to partially owned entities	861		122		1,127		156
NAREIT Funds from operations	33,848		52,106		72,119		108,997


Adjustments:
Net gain on sale of non-real estate assets	(304)		(252)		(423)		(417)
Non-real estate asset impairment	—		486		—		486


Acquisition, litigation and other	3,922		2,801		24,673		4,489
Share-based compensation expense, IPO grants	—		203		163		576






Loss on debt extinguishment, modifications and termination of derivative instruments	925		—		4,424		781

Foreign currency exchange loss (gain)	140		(315)		(33)		177



Our share of reconciling items related to partially owned entities	89		79		243		79
Core FFO applicable to common shareholders	38,620		55,108		101,166		115,168
Adjustments:
Amortization of deferred financing costs and pension withdrawal liability	1,085		1,196		2,233		2,742
Amortization of below/above market leases	362		—		401		76
Straight-line net rent	(170)		(108)		(325)		(217)
Deferred income taxes expense (benefit)	6,568		(967)		4,566		(3,069)
Share-based compensation expense, excluding IPO grants	5,467		4,261		10,334		8,195
Non-real estate depreciation and amortization	39,588		16,841		64,519		33,003

Maintenance capital expenditures (a)	(20,488)		(15,284)		(36,219)		(27,722)
Our share of reconciling items related to partially owned entities	711		56		989		78
Adjusted FFO applicable to common shareholders	$	71,743	$	61,103	$	147,664	$	128,254

(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.

Reconciliation of Net Earnings to NAREIT FFO, Core FFO, and AFFO
(In thousands)
Three Months Ended March 31,
2018 2017
Net (loss) income $ (8,639 ) $ 4,384
Adjustments:
Real estate related depreciation and depletion 22,174
21,433
Real estate depreciation on China JV 270
268
NAREIT Funds from operations 13,805
26,085
Less distributions on preferred shares of beneficial interest (1,818 ) (7,109 )
NAREIT Funds from operations attributable to common shareholders $ 11,987
$ 18,976
Adjustments:
Net gain on sale of non-real estate assets (148 ) (99 )
Non-offering related IPO expenses ^(a)
1,245
—
Stock-based compensation expense, IPO grants 965
—
Severance and reduction in workforce costs ^(b)
11
—
Terminated site operations costs —
(3 )
Strategic alternative costs —
842
Loss on debt extinguishment and modification 21,385
171
Foreign currency exchange (gain) loss (680 ) 2,773
Core FFO applicable to common shareholders $ 34,765
$ 22,660
Adjustments:
Amortization of deferred financing costs and debt discount 1,674
2,023
Amortization of below/above market leases 38
38
Straight-line net rent (5 ) (12 )
Deferred income taxes benefit (1,156 ) (748 )
Stock-based compensation expense, excluding IPO grants 3,553
587
Non-real estate depreciation and amortization 7,234
7,975
Non-real estate depreciation and amortization on China JV 156
151
Recurring maintenance capital expenditures ^(c)
(6,383 ) (5,905 )
Adjusted FFO applicable to common shareholders $ 39,876
$ 26,769


~~(a)~~			~~Represents one-time costs and professional fees associated with becoming a public company.~~


~~(b)~~	~~Represents one-time severance from and reduction in workforce costs associated with exiting or selling non-strategic warehouses.~~


~~(c)~~	Recurring 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.



We calculate EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of NAREIT, defined as, earnings before interest expense, taxes, depreciation ~~depletion~~ and amortization, ~~gains or losses~~net gain on ~~disposition~~sale of ~~depreciated property, including gains or losses on change~~real estate, net of ~~control, impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate,~~withholding taxes, and adjustment to reflect share of EBITDAre of ~~unconsolidated affiliates.~~partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and useful life of related assets among otherwise comparable companies.
We also calculate our Core EBITDA as EBITDAre further adjusted for ~~impairment charges on intangible~~acquisition, litigation and ~~long-lived assets, gain or loss on depreciable real property asset disposals, severance and reduction in workforce costs, non-offering related IPO~~other expenses, loss on debt extinguishment, modifications and ~~modification, stock-based~~termination of derivative instruments, share-based compensation expense, foreign currency exchange gain or loss, impairment of long-lived assets, loss onfrom investments in partially owned entities, net gain on sale of non-real estate assets and reduction in EBITDAre from partially owned entities. We believe that the presentation of Core EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are otherwise included in EBITDAre but which we do not believe are indicative of our core business operations. EBITDAre and Core EBITDA are not measurements of financial performance under U.S. GAAP, and our EBITDAre and Core EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Core EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with U.S. GAAP. Our calculations of EBITDAre and Core EBITDA have limitations as analytical tools, including:

•these measures do not reflect our historical or future cash requirements for ~~recurring~~ maintenance capital expenditures or growth and expansion capital expenditures;

•these measures do not reflect changes in, or cash requirements for, our working capital needs;

•these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

•these measures do not reflect our tax expense or the cash requirements to pay our taxes; and

•although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements.



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


Reconciliation of Net (Loss) Income to NAREIT EBITDAre and Core EBITDA
(In thousands)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net (loss) income	$	(13,399)	$	32,662	$	(27,635)	$	56,173
Adjustments:
Depreciation and amortization	84,459		52,399		161,670		104,003
Interest expense	26,579		23,178		52,535		47,048
Income tax expense	8,974		1,196		8,183		1,287
Net gain on sale of real estate, net of withholding taxes	—		(19,414)		—		(21,510)
Adjustment to reflect share of EBITDAre of partially owned entities	1,838		237		2,487		297
NAREIT EBITDAre	$	108,451	$	90,258	$	197,240	$	187,298
Adjustments:
Acquisition, litigation and other	3,922		2,801		24,673		4,489


Loss from investments in partially owned entities	61		129		761		156
Impairment of long-lived assets	1,528		3,667		1,528		3,667
Loss (gain) on foreign currency exchange	140		(315)		(33)		177
Share-based compensation expense	5,467		4,464		10,497		8,771
Loss on debt extinguishment, modifications and termination of derivative instruments	925		—		4,424		781
Net gain on sale of non-real estate assets	(317)		(255)		(475)		(420)

Reduction in EBITDAre from partially owned entities	(1,838)		(237)		(2,487)		(297)
Core EBITDA	$	118,339	$	100,512	$	236,128	$	204,622

Reconciliation of Net Earnings to NAREIT EBITDAre and Core EBITDA
(In thousands)
Three Months Ended March 31,
2018 2017
Net (loss) income $ (8,639 ) $ 4,384
Adjustments:
Depreciation, depletion and amortization 29,408
29,408
Interest expense 24,495
27,727
Income tax expense (89 ) 1,494
Adjustment to reflect share of EBITDAre of partially owned entities 557
571
NAREIT EBITDAre $ 45,732
$ 63,584
Adjustments:
Severance and reduction in workforce costs ^(a)
11
—
Terminated site operations cost —
(3 )
Non-offering related IPO expenses ^(b)
1,245
—
Strategic alternative costs —
842
Loss from partially owned entities 139
27
(Gain) loss on foreign currency exchange (680 ) 2,773
Stock-based compensation expense 4,518
587
Loss on debt extinguishment and modification 21,385
171
Gain on real estate and other asset disposals (137 ) (102 )
Reduction in EBITDAre from partially owned entities (557 ) (571 )
Core EBITDA $ 71,656
$ 67,308


~~(a)~~	~~Represents one-time severance from reduction in workforce costs associated with exiting or selling non-strategic warehouses.~~


~~(b)~~	~~Represents one-time costs and professional fees associated with becoming a public company.~~

LIQUIDITY AND CAPITAL RESOURCES

~~Overview~~The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company. Separate consolidated financial statements of the Operating Partnership have not been presented in accordance with the amendments to Rule 3-10 of Regulation S-X. Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Company and the Operating Partnership are not materially different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.

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 shareholders will include:

•current cash balances;

•cash flows from operations;

~~borrowings under~~ •our ~~2018~~2020 Senior ~~Secured~~Unsecured Revolving Credit ~~Facilities;~~Facility;

•our outstanding equity forward sale agreements;

•our ATM Equity Programs and related forward sale agreements; and

•other forms of ~~secured or unsecured~~ debt financings and equity offerings.

We expect that our funding sources as noted above are adequate and will continue to be adequate to meet our short-term liquidity requirements and capital commitments. These liquidity requirements and capital commitments include:

•operating activities and overall working capital;

•capital expenditures;

•debt service obligations; and

•quarterly shareholder distributions.

We expect to utilize the same sources of capital we will rely on to meet our short-term liquidity requirements to also meet our long-term liquidity requirements, which include funding our operating activities, our debt service obligations and shareholder distributions, and our future development and acquisition activities. As previously discussed, the COVID-19 pandemic has created disruption among several industries. The outbreak of COVID-19 has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. While we did not incur significant disruption during the six months ended June 30, 2021 from the COVID-19 pandemic, we are unable to predict the impact that the pandemic may have on the sources of capital upon which we rely.

~~REIT Qualification~~

~~To maintain our qualification~~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 ~~a REIT, we must make distributions to our common shareholders aggregating annually at least 90%~~well as debt securities of ~~our REIT taxable income excluding capital gains. While historically we have satisfied this requirement~~the Operating Partnership, which will be fully and unconditionally guaranteed by ~~making cash distributions to our shareholders,~~us. As circumstances warrant, we may ~~choose~~issue equity securities from time to ~~satisfy this requirement by making distributions~~time on an opportunistic basis, dependent upon market conditions and available pricing. We may use the proceeds for general corporate purposes, which may include the repayment of ~~other property, including, in limited circumstances, our own common shares. Cash flows~~outstanding indebtedness, the funding of development, expansion and acquisition opportunities and to increase working capital.

On May 10, 2021, we entered into an equity distribution agreement pursuant to which we may sell, from ~~our operations, which are included in net cash provided by operating activities in our consolidated statements~~time to time, up to an aggregate sales price of ~~cash flows, were sufficient to cover distributions on~~$900.0 million of our common shares through an ATM equity program (the “2021 ATM Equity Program”). Sales of our common shares 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. Sales may also be made on a forward basis pursuant to separate forward sale agreements. We intend to use the net proceeds from sales of our ~~then outstanding preferred~~common shares pursuant to the 2021 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects.

During the ~~three~~six months ended ~~March 31, 2018 and 2017.~~

~~As a result~~June 30, 2021, there were 1,530,034 common shares sold under the 2021 ATM Equity Program under forward sale agreements which must be settled by July 1, 2022 for gross proceeds of ~~this requirement,~~$59.6 million. After considering the forward sale agreements entered into during the six months ended June 30, 2021, we ~~cannot rely on retained earnings to fund our business needs to~~had approximately $840.4 million availability remaining for distribution under the ~~same extent~~2021 ATM Equity Program as other entities that are not REITs. If we do not have sufficient funds available to us from our operations to fund our business needs, we will need to find alternative ways to fund those needs. Such alternatives may include, among other things, divesting ourselves of temperature-controlled warehouses (whether or not the sales price is optimal or otherwise meets our strategic long-term objectives), incurring additional indebtedness or issuing equity securities in public or private transactions, the availability and attractiveness of the terms of which cannot be assured.June 30, 2021.

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. Such liens permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not readily saleable by us. Historically, in instances where we have warehouseman’s liens and our customer sought bankruptcy protection, we have been successful in receiving “critical vendor” status, which has allowed us to fully collect on our accounts receivable during the pendency of the bankruptcy proceeding.

Our bad debt expense was ~~$0.1~~$0.9 million and ~~$0.2~~$0.9 million for the three months ended ~~March 31, 2018~~June 30, 2021 and ~~2017,~~2020, respectively, and $1.8 million and $1.5 million for the six months ended June 30, 2021 and 2020, respectively. As of ~~March 31, 2018,~~June 30, 2021, we maintained bad debt allowances of approximately ~~$5.8~~$15.2 million, which we believed to be adequate.

Dividends and Distributions

We are required to distribute 90% of our taxable income (excluding capital gains) on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to shareholders from cash flows from our operating activities. While historically we have satisfied this distribution requirement by making cash distributions to our shareholders, we may choose to satisfy this requirement by making distributions of cash or other property. All such distributions are at the discretion of our Board of Trustees. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. We have distributed at least 100% of our taxable income annually since inception to minimize corporate-level federal income taxes. Amounts accumulated for distribution to shareholders are invested primarily in interest-bearing accounts and short-term interest-bearing securities, 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. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs, as well as potential developments in new or existing properties, acquisitions or investments in existing or newly created joint ventures. In addition, we may be required

to use borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.

For further information regarding dividends and distributions, see Note 10 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Outstanding ~~and Available~~ Indebtedness

The following table ~~presents~~summarizes our outstanding ~~and available~~ indebtedness as of ~~March 31, 2018 and December 31, 2017.~~

June 30, 2021.

Stated
maturity
date
Contractual
interest rate ⁽⁵⁾

Effective interest rate ⁽⁶⁾
as of March 31, 2018
March 31, 2018 December 31, 2017
2010 Mortgage Loans
cross-collateralized and cross-defaulted by 46 warehouses:
(In thousands)
Component A-1 1/2021 3.86% 4.40% $ 52,641
$ 56,941
Component A-2-FX 1/2021 4.96% 5.38% 150,334
150,334
Component A-2-FL ⁽¹⁾
1/2021 L+1.51% 3.80% 48,654
48,654
Component B 1/2021 6.04% 6.48% 60,000
60,000
Component C 1/2021 6.82% 7.28% 62,400
62,400
Component D 1/2021 7.45% 7.92% 82,600
82,600
2013 Mortgage Loans
cross-collateralized and cross-defaulted by 15 warehouses:
Senior note 5/2023 3.81% 4.14% 192,654
194,223
Mezzanine A 5/2023 7.38% 7.55% 70,000
70,000
Mezzanine B 5/2023 11.50% 11.75% 32,000
32,000
ANZ Term Loans secured by mortgages in properties owned by relevant subsidiaries:
Australia Term Loan ^{(2), (4)}
6/2020 BBSY+1.40% 4.59% 156,046
158,645
New Zealand Term Loan ^{(3), (4)}
6/2020 BKBM+1.40% 5.15% 31,834
31,240
2018 Senior Secured Term A Facility ⁽⁴⁾secured by stock pledge in qualified subsidiaries
1/2023 L+2.50% 4.90% $ 475,000
$ —
2015 Senior Secured Term Loan B Facility ⁽⁴⁾
12/2022 L+3.75% 5.79% —
806,918
Total principal amount of mortgage notes and term loans 1,414,163
1,753,955
Less deferred financing costs (15,611 ) (25,712 )
Less debt discount (325 ) (6,285 )
Total mortgage notes and term loans, net of deferred financing costs and debt discount $ 1,398,227
$ 1,721,958

2018 Senior Secured Revolving Credit
Facility secured by stock pledge in qualified subsidiaries ⁽^{4) , (5)}
1/2021 L+2.50% n/a $ —
$ —
Construction Loan:
Warehouse Clearfield, UT secured by mortgage⁽⁴⁾
2/2019
LIBOR + 3.25%
or prime rate + 2.25%
5.18% $ —
$ 19,671
Less deferred financing costs —
(179 )
$ —
$ 19,492


Debt Summary:
Fixed rate	$	2,112,508
Variable rate - unhedged	465,755
Total outstanding indebtedness	2,578,263

~~(1)~~Percent of total debt:	~~Component A-2-FL of the 2010 Mortgage Loans has a variable interest~~
Fixed rate ~~equal to one-month LIBOR plus 1.51%, with one-month-LIBOR subject to a floor of 1.00% per annum. In addition, we maintain an interest~~	81.94		%
Variable rate ~~cap on the variable rate tranche that caps one-month LIBOR at 6.0%. The variable interest rate at March 31, 2018 was 3.39% per annum.~~	18.06		%


~~(2)~~			~~As of March 31, 2018, the outstanding balance was~~ ~~AUD$203.0 million~~ ~~and the variable~~Effective interest rate ~~was 3.28% per annum (1.88% BBSY plus 1.40% margin) of which 75% is fixed via an interest rate swap at 4.06% per annum (2.66% BBSY plus 1.40% margin).~~


~~(3)~~	~~As of March 31, 2018, the outstanding balance was~~ ~~NZD$44.0 million~~ ~~and the variable interest rate was 3.33% per annum (1.93% BKBM plus 1.40% margin), of which 75% is fixed via an interest rate swap at 4.93% per annum (3.53% BKBM plus 1.40% margin).~~


~~(4)~~	~~References in this table to LIBOR are references to one-month LIBOR and references to BBSY and BKBM are to Australian Bank Bill Swap Bid Rate and New Zealand Bank Bill Reference Rate, respectively.~~


~~(5)~~	~~Unused line, letter of credit and financing fees increase the stated interest rate.~~


~~(6)~~	~~The effective interest rate includes effects of amortization of the deferred financing costs and debt discount. The weighted average effective interest rate for total debt was 5.39% and 5.68%~~ as of ~~March 31, 2018 and December 31, 2017, respectively.~~June 30, 2021	3.16		%

~~2018 Senior Secured Credit Facilities~~

~~On December 26, 2017,~~

As of June 30, 2021, we ~~closed into escrow~~had approximately $2.6 billion of outstanding debt as set forth in the table above, which excludes deferred financing costs.

The variable rate debt shown above bears interest at interest rates based on various one-month LIBOR, CDOR, and GBP LIBOR rates, depending on the respective agreement governing the debt, including our 2018 Senior Secured Credit Facilities, consisting of a five-year, $525.0 million Senior Secured Term Loan A Facility and a three-year, $400.0 million 2018 Senior Secured Revolving Credit Facility. Our 2018 Senior Secured Credit Facilities also have an additional $400.0 million accordion option. Our 2018 Senior Secured Revolving Credit Facility has a one-year extension option subject to certain conditions. We used the net proceeds from the IPO transactions, together with $517.0 million of net proceeds from our Senior Secured Term Loan A Facility, to repay the entire $806.9 million aggregate principal amount of indebtedness outstanding under our Senior Secured Term Loan B Facility plus accrued and unpaid interest, to repay $20.9 million of indebtedness outstanding under our Clearfield, Utah and Middleboro, Massachusetts construction loans, and for working capital.

~~On February 6, 2018, we amended the credit agreement with the lenders of our 2018 Senior Revolving Credit Facility (the 2018 Credit Agreement) to increase the aggregate~~global revolving credit ~~commitments~~facilities. As of June 30, 2021, our debt had a weighted average term to initial maturity of approximately 7.0 years, assuming exercise of extension options.

For further information regarding outstanding indebtedness, please see Note 6 to our condensed consolidated financial statements included in this Quarterly Report on ~~this facility by $50.0 million~~Form 10-Q.

CreditRatings

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 an Under Review with Positive Implications outlook from DBRS Morningstar, and an investment grade rating of Baa3 with a stable outlook from Moody’s. These credit ratings are important to ~~$450.0 million. Concurrently, we utilized cash on hand~~our ability to ~~repay $50.0 million on~~issue debt at favorable rates of interest, among other terms. Refer to our ~~Senior Secured Term Loan A facility. As a result of these modifications, our total aggregate commitments under its 2018 Senior Credit Facilities remain unchanged at $925.0 million.~~

Borrowings under our 2018 Senior Secured Credit Facilities bear interest, at our election, at the then-applicable margin plus an applicable LIBOR or base rate interest rate. The base rate is the greatest of the bank prime rate, the one-month LIBOR rate plus one percent or the federal funds rate plus one-half of one percent. The applicable margin varies between (i) in the case of LIBOR-based loans, 2.35% and 3.00% and (ii) in the case of base rate loans, 1.35% and 2.00%, in each case, based onrisk factor “Adverse changes in our ~~total leverage. In addition, any undrawn portion of~~credit ratings could negatively impact our ~~2018 Senior Secured Revolving Credit Facility will be subject to an annual 0.30% commitment fee at times that we are utilizing at least 50% of~~financing activity” in our outstanding revolving credit commitments or an annual 0.40% commitment fee at times that we are utilizing less than 50% of our revolving credit commitments, in each case, based upon the actual daily unused portion of our 2018 Senior Secured Revolving Credit Facility.Annual Report on Form 10-K.

At the completion of the IPO, borrowings under our 2018 Senior Secured Credit Facilities bore interest at a floating rate of one-month LIBOR plus 2.50%. In addition, we applied approximately $33.6 million of our 2018 Senior Secured Revolving Credit Facility to backstop certain outstanding letters of credit.

Our operating partnership is the borrower under our 2018 Senior Secured Credit Facilities, which are guaranteed by our company and certain eligible subsidiaries of our operating partnership and secured by a pledge in the stock of certain subsidiaries of our operating partnership. Our 2018 Senior Secured Revolving Credit Facility is structured to include a borrowing base, which will allow us to borrow against the lesser of our Senior Secured Term Loan A Facility balance outstanding and $450.0 million in revolving credit commitments, and the value of certain owned real estate assets, ground, capital and operating leased assets, with credit given for income from third-party managed warehouses. At March 31, 2018, the gross value of our assets included in the calculations under our 2018 Credit Agreement, was in excess of $1.8 billion, and had an effective borrowing base collateral value (after concentration limits and advance rates as calculated under the terms of our 2018 Credit Agreement) in excess of $1.1 billion.

Our 2018 Senior Secured Credit Facilities contain representations, covenants and other terms customary for a publicly traded REIT. In addition, our 2018 Senior Secured Credit Facilities contain certain financial covenants, as defined in the credit agreement, including:

~~a maximum leverage ratio of less than or equal to 60% of our total asset value;~~

~~a minimum borrowing base coverage ratio of greater than or equal to 1.00 to 1.00;~~

~~a minimum pro forma fixed charge coverage ratio of greater than or equal to 1.40 to 1.00 increasing to 1.50 to 1.00 in the first quarter of 2018;~~

~~a minimum borrowing base debt service coverage ratio of greater than or equal to 2.00 to 1.00;~~

~~a minimum tangible net worth requirement of greater than or equal to $900 million plus 70% of any future net equity proceeds following the completion of the IPO transactions; and~~

~~a maximum recourse secured debt ratio of less than or equal to 20% of our total asset value.~~

~~Our 2018 Senior Secured Credit Facilities are fully recourse to our operating partnership.~~

~~ANZ Loans~~

In June 2015, we entered into syndicated facility agreements in each of Australia and New Zealand, which we refer to collectively as the ANZ Loans, and separately as the Australian term loan and the New Zealand term loan. The ANZ Loans are non-recourse to us and our U.S. subsidiaries.

The Australian term loan is an AUD$203.0 million five-year syndicated facility. The $151.1 million net proceeds that we borrowed under this facility were used to repay the AUD$19.0 million mortgage loan on one of our facilities, return AUD$30.0 million of capital to our domestic subsidiary owning the equity of our Australian subsidiary, repay an intercompany loan totaling CAD$47.6 million, and return AUD$70.0 million to the United States in the form of a long-term intercompany loan and working capital. This facility is secured by our owned real property and equity of certain of our Australian subsidiaries and bears interest at a floating rate of Australian Bank Bill Swap Bid Rate plus 1.4%. The Australian term loan is fully prepayable without penalty.

The New Zealand term loan is a NZD$44.0 million five-year syndicated facility. The $29.3 million net proceeds that we borrowed under this facility were used to repay an intercompany loan plus interest totaling NZD$28.3 million, make a NZD$14.3 million dividend, and fund working capital. The facility is secured by our owned real property, leased assets and equity of certain of our New Zealand subsidiaries, and bears interest at a floating rate of New Zealand Bank Bill Swap Bid Rate plus 1.4%. The New Zealand term loan is fully prepayable without penalty.

~~As part of the ANZ Loans, we entered into interest rate swaps to effectively fix the interest rates on 75% of the notional balances.~~

~~2013 Mortgage Loans~~

On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which we refer to as the 2013 Mortgage Loans. The debt consists of a senior debt note and two mezzanine notes. The components are cross-collateralized and cross-defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the two mezzanine notes remain subject to yield maintenance provisions. We used the net proceeds of these loans to refinance certain of the 2006 Mortgage Loans, as described below, acquire two warehouses, and fund general corporate purposes.

The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of March 31, 2018, the amount of restricted cash associated with the 2013 Mortgage Loans was $3.5 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The debt service coverage ratio as of March 31, 2018 was 1.71x. The 2013 Mortgage Loans are non-recourse to us subject to customary non-recourse carve-outs.

~~2010 Mortgage Loans~~

On December 15, 2010, we entered into a mortgage financing in an aggregate principal amount of $600.0 million, which we refer to as the 2010 Mortgage Loans. The debt includes six separate components, which are comprised of independent classes of certificates and seniority. The components are cross-collateralized and cross-defaulted. No principal payments are required on five of the six components until the stated maturity date in January 2021, and one component requires monthly principal payments of $1.4 million. Interest is payable monthly in an amount equal to the aggregate interest accrued on each component. The interest rates on five of the six components are fixed, and range from 3.86% to 7.45% per annum. One component has a variable interest rate equal to one-month LIBOR plus 1.51%, with one-month-LIBOR subject to a floor of 1.00% per annum. In addition, we maintain an interest rate cap on the variable rate tranche that caps one-month LIBOR at 6.0%. The fair value of the interest rate cap was nominal at March 31, 2018. The floating rate interest component is pre-payable anytime without penalty; however, the fixed rate components remain subject to yield maintenance provisions. We used the net proceeds of these loans to refinance existing term loans, fund the acquisition of the acquired Versacold entities, and for general corporate purposes.

The 2010 Mortgage Loans were initially collateralized by 53 warehouses. In November 2014, we sold one of the warehouses collateralizing the 2010 Mortgage Loans for $9.5 million, and $6.0 million of the proceeds were used to pay down the 2010 Mortgage Loans. In 2015, we sold three warehouses for $9.4 million, and $6.1 million of the proceeds were used to pay down the 2010 Mortgage Loans. In 2017, we used a portion of the net proceeds from incremental borrowings under our Existing Senior Secured Term Loan B Facility to pay down $26.2 million of the 2010 Mortgage Loans. As a result, two warehouses were transferred from the collateral base of the 2010 Mortgage Loans to the Existing Senior Secured Revolving Credit Facility borrowing base, and one was released and positioned for sale. The terms governing the 2010 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of March 31, 2018, the amount of restricted cash associated with the 2010 Mortgage Loans was $13.8 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.50x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The debt service coverage ratio as of March 31, 2018 was 3.0x. The 2010 Mortgage Loans are non-recourse to us subject to customary non-recourse carve-outs.

~~Recurring~~ Maintenance Capital Expenditures and Repair and Maintenance Expenses

We utilize a strategic and preventative approach to ~~recurring~~ maintenance capital expenditures and repair and maintenance expenses to maintain the high quality and operational efficiency of our warehouses and ensure that our warehouses meet the “mission-critical” role they serve in the cold chain.

~~Recurring~~ Maintenance Capital Expenditures

~~Recurring maintenance~~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 ~~recurring~~ maintenance capital expenditures related to our existing temperature-controlled warehouse network include replacing roofs ~~replacing~~and refrigeration equipment, ~~re-racking~~and upgrading our warehouses, and implementing energy efficiency projects, such as LED lighting, motion-sensor technology, variable frequency drives for our fans and compressors, third-party tune-ups and real-time monitoring of energy consumption, rapid-close doors and alternative-power generation technologies.racking systems. Examples of ~~recurring~~ maintenance capital expenditures related to personal property include expenditures on material handling equipment (e.g., fork lifts and pallet jacks) and related batteries. Examples of ~~recurring~~ maintenance capital expenditures related to information technology include expenditures on existing servers, networking equipment and current software. 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 three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~ 2020.


	Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017			2021		2020		2021		2020
	(In thousands, except per cubic foot amounts)					(In thousands, except per cubic foot amounts)
Real estate	$	5,809	$	5,143	Real estate	$	17,974	$	14,140	$	30,902	$	23,530
Personal property	252		347		Personal property	1,428		762		3,210		3,061
Information technology	322		415		Information technology	1,086		382		2,107		1,132
Total recurring maintenance capital expenditures	$	6,383	$	5,905
Maintenance capital expenditures					Maintenance capital expenditures	$	20,488	$	15,284	$	36,219	$	27,723

Total recurring maintenance capital expenditures per cubic foot	$	0.007	$	0.006
Maintenance capital expenditures per cubic foot					Maintenance capital expenditures per cubic foot	$	0.014	$	0.014	$	0.025	$	0.025

Repair and Maintenance Expenses

We incur repair and maintenance expenses that include costs of normal maintenance and repairs and minor replacements that do not materially extend the life of the property or provide future economic benefits. Repair and maintenance expenses consist of expenses related to our existing temperature-controlled warehouse network and its existing supporting personal property and are reflected as operating expenses on our income statement. Examples of repair and maintenance expenses related to our warehouse portfolio include ordinary repair and maintenance on roofs, racking, walls, doors, parking lots and refrigeration equipment. 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 three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~2020.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands, except per cubic foot amounts)
Real estate	$	5,949	$	7,148	$	14,325	$	13,945
Personal property	13,622		7,214		25,076		15,398
Repair and maintenance expenses	$	19,571	$	14,362	$	39,401	$	29,343

Repair and maintenance expenses per cubic foot	$	0.014	$	0.013	$	0.027	$	0.027

Three Months Ended March 31,
2018 2017
(In thousands, except per cubic foot amounts)
Real estate $ 5,197
$ 5,316
Personal property 7,992
7,295
Total repair and maintenance expenses $ 13,189
$ 12,611

Repair and maintenance expenses per cubic foot $ 0.014
$ 0.013

External Growth, Expansion and ~~Expansion~~Development Capital Expenditures

~~Growth~~External growth expenditures represent asset acquisitions or business combinations. Expansion and ~~expansion~~development capital expenditures are capitalized investments made to support both our customers and our warehouse expansion and development ~~initiatives and enhance~~initiatives. It also includes investments in enhancing our information technology platform.

Examples of ~~growth and expansion~~ capital expenditures associated with expansion and development initiatives include funding of construction costs, increases to warehouse capacity and pallet positions, ~~and~~ acquisitions of reusable incremental material handling ~~equipment.~~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 ~~growth and expansion~~ capital expenditures to enhance our information technology platform include ~~expenditures related to~~ the delivery of new systems and software and customer interface functionality.

Acquisitions

The acquisitions completed during the six months ended June 30, 2021 relate to Bowman Stores, KMT Brrr! and Liberty Freezers. The acquisitions completed during the six months ended June 30, 2020 relate to Newport and Nova Cold. Refer to Notes 2 and 3 of the Condensed Consolidated Financial Statements for details of the purchase price allocation for each acquisition.

Expansion and development

The expansion and development expenditures for the six months ended June 30, 2021 are primarily driven by $63.5 million related to our two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $15.7 million related to the Atlanta major markets strategy project, $16.2 million related to our Russellville expansion, $7.0 million related to our Calgary, Canada expansion and $17.8 million related to the Auckland, New Zealand expansion project. The Atlanta and Auckland projects were substantially completed during the second quarter of 2021, with the remaining spend to be incurred during the third quarter of 2021.

During the three months ended June 30, 2021, we announced new development projects. The Atlanta major market phase 2 project began, and we invested $8.7 million in this project. Additionally, the Dunkirk NY expansion begin, and we invested $4.5 million in this project. Finally, we invested $6.7 million in our newly announced Dublin expansion.

As a result of the Agro Acquisition on December 30, 2020, we acquired an expansion project in Lurgan, Northern Ireland, which was completed during the second quarter of 2021. We incurred $4.1 million during the six months ended June 30, 2021 for this expansion project.

Expansion and development initiatives also include $7.4 million of corporate initiatives, 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.

Finally, we incurred approximately $15.5 million for contemplated future expansion or development projects.

The following table sets forth our ~~growth~~acquisition, expansion and ~~expansion~~development capital expenditures for the three and six months ended ~~March 31, 2018~~June 30, 2021 and ~~2017.~~2020.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)
Acquisitions, net of cash acquired and adjustments	$	173,373	$	85	$	215,329	$	315,668
Expansion and development initiatives	83,844		85,193		167,112		114,779
Information technology	2,045		2,029		3,573		2,980
Growth and expansion capital expenditures	$	259,262	$	87,307	$	386,014	$	433,427

Three Months Ended March 31,
2018 2017
(In thousands)
Expansion and development initiatives $ 18,236
$ 37,152
Information technology 800
1,431
Total growth and expansion capital expenditures $ 19,036
$ 38,583

Historical Cash Flows


	Three Months Ended March 31,							Six Months Ended June 30,
	2018			2017				2021		2020
	(In thousands)							(In thousands)
Net cash provided by operating activities	$	50,361		$	45,684		Net cash provided by operating activities	$	127,753	$	163,980
Net cash used in investing activities	(27,919		)	(52,240		)	Net cash used in investing activities	$	(438,822)	$	(443,025)
Net cash provided by (used in) financing activities	121,087			(11,301		)
Net cash provided by financing activities							Net cash provided by financing activities	$	7,079	$	374,312

Operating Activities

For the ~~three~~six months ended ~~March 31, 2018,~~June 30, 2021, our net cash provided by operating activities was ~~$50.4~~$127.8 million, ~~an increase~~a decrease of ~~$4.7~~$36.2 million, ~~or 10.2%,~~ compared to ~~$45.7~~$164.0 million for the ~~three~~six months ended ~~March 31, 2017.~~June 30, 2020. The decrease is primarily due to higher acquisition and integration related costs and selling, general and administrative expense. This ~~change is mainly attributable to~~was partially offset by higher segment contribution as a ~~7.0%, increase in~~result of our operating segments contribution, a favorable changes in working capital, and $3.2 million less cash paid for interest during the first quarter of 2018, with $23.1 million interest paid for the three months ended March 31, 2018 compared to $26.3 million paid for the three months ended March 31, 2017.recent acquisitions.

Investing Activities

Our net cash used in investing activities was ~~$27.9~~$438.8 million for the ~~three~~six months ended ~~March 31, 2018~~June 30, 2021 compared to ~~net~~$443.0 million for the six months ended June 30, 2020. Cash used in connection with business combinations during 2021 was $215.3 million and related to the Bowman Stores, Liberty Freezers and KMT Brrr! acquisitions. Additions to property, buildings and equipment were $207.3 million, reflecting maintenance capital expenditures and investments in the Ahold, Atlanta, New Zealand, Calgary and Russellville expansion and development projects. Additionally, we invested $6.3 million in the SuperFrio joint venture for the six months ended June 30, 2021, and paid $11.6 million to purchase the noncontrolling interest holders share in the Chilean business, which we now wholly-own.

Net cash used in investing activities of ~~$52.2~~$443.0 million for the ~~three~~six months ended ~~March 31, 2017. Additions~~June 30, 2020 primarily related to cash used for the acquisitions of Newport and Nova Cold totaling $315.7 million, cash used for additions to property, ~~plant,~~buildings and equipment of ~~$28.3~~$173.2 million ~~accounted for the use of cash in investing activities~~reflecting maintenance capital expenditures and ~~included outlays mainly associated with construction in progress and expansion of certain warehouse facilities~~investments in the ~~United States. Net~~Ahold, Savannah and Atlanta expansion and development projects, and our initial investment of $26.2 million in the SuperFrio joint venture. These investments were offset by $69.1 million in proceeds ~~of $0.4 million~~ from the sale of ~~fixed assets partially offset~~land and property, buildings and equipment related to the ~~additions to property, plant~~sale of land in Sydney and ~~equipment.~~the sale of the Boston facility.

Financing Activities

Net cash provided by financing activities was ~~$121.1~~$7.1 million for the ~~three~~six months ended ~~March 31, 2018~~June 30, 2021 compared to ~~net cash used in financing activities of $11.3~~$374.3 million for the ~~three~~six months ended ~~March 31, 2017.~~June 30, 2020. Cash provided by financing activities for the current period primarily consisted of ~~$525.0~~$214.8 million net proceeds from equity forward contracts settled during the period upon the issuance of common shares, $210.8 million in proceeds from our revolving line of credit, and $5.2 million of proceeds received upon exercise of stock options, offset by cash outflows of $203.5 million for repayments on term loan and mortgage notes, $110.8 million of quarterly dividend distributions paid, $70.0 million in repayments on the revolving line of credit, $15.8 million in payment of withholding taxes related to share-based payment arrangements and $19.3 million of financing lease payments.

Net cash provided by financing activities was $374.3 million for the six months ended June 30, 2020 and primarily consisted of $340.6 million net proceeds from equity offerings under our prior ATM equity program and the April 2019 equity forward contract settled in January 2020, the $177.1 million received in connection with the ~~issuance~~refinancing of our Senior ~~Secured~~Unsecured Term Loan ~~A Facility,~~ and ~~$493.6~~$186.8 million ~~net~~in proceeds from ~~the IPO.~~our revolving credit facility. These cash inflows were partially offset by ~~$806.9~~$177.1 million ~~paid to extinguish~~of repayment on the revolving credit facility using the proceeds from our refinancing of our Senior ~~Secured~~Unsecured Term Loan, ~~B facility, $50.0~~$81.0 million ~~prepayment on our Senior Secured Term Loan A Facility, $28.5~~of quarterly dividend distributions paid, $53.3 million of repayments on our term loan and mortgage notes ~~construction loans~~ and ~~lease obligations, $8.7~~$8.3 million ~~paid for~~of payments related to debt issuance ~~costs~~costs.

associated with the issuance of our Senior Secured Term Loan A Facility, and $3.2 million of stub period dividend distributions paid to both preferred and common shareholders of record as of the day prior to the IPO effective date.

~~Contractual Obligations~~

~~The following table summarizes our contractual obligations as of March 31, 2018:~~

Payments due by period
Total
Less than 1
Year
1-3 Years 3-5 Years
More than 5
Years
Principal on mortgage and term loans $ 1,414,163
$ 24,069
$ 640,155
$ 489,483
$ 260,456
Interest on mortgage and term loans ⁽¹⁾
243,049
71,539
114,184
54,806
2,520
Sale leaseback financing obligations ⁽²⁾
232,572
16,638
33,949
35,188
146,797
Capital lease obligations, including interest 44,022
11,478
17,384
8,846
6,314
Operating leases 108,446
31,463
48,558
11,093
17,332
Total ^{(3), (4)}
$ 2,042,252
$ 155,187
$ 854,230
$ 599,416
$ 433,419


~~(1)~~	Interest payable is based on interest rates in effect at March 31, 2018. Amounts include variable-rate interest payments, which are calculated utilizing the applicable interest rates as of March 31, 2018.


~~(2)~~	~~Sale leaseback financing obligations are subject to multiple expiration dates and bear interest rates that vary from 7.0% to 19.6%.~~


~~(3)~~	The table above excludes $0.8 million of estimated tax exposures, including interest and penalties, related to positions taken on U.S. federal and state income tax returns for our TRSs as of March 31, 2018.


~~(4)~~	~~The table also excludes $2.4 million aggregate fair value as of March 31, 2018 of two interest rate swap agreements expiring in June 2020.~~

~~Off-Balance Sheet Arrangements~~

~~As of~~ ~~March 31, 2018~~, we had no material off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES UPDATE

See Note 2 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

100

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our future income and cash flows relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.

As of ~~March 31, 2018,~~June 30, 2021, we had ~~$570.6~~$125 million of outstanding USD-denominated variable-rate debt and $250 million of outstanding CAD-denominated variable-rate debt. ~~Approximately $523.7 million of this debt~~This consisted of ~~certain mortgage notes, construction loans and~~ our Senior ~~Secured~~Unsecured Term Loan A Facility bearing interest at one-month LIBOR for the USD tranche and one-month CDOR for the CAD tranche, plus a margin ~~ranging from 1.51%~~up to ~~2.50%~~0.95%. Additionally, we had C$55.0 million and ~~in the case~~£68.5 million outstanding of the certain mortgage notes subject to a 1.0% LIBOR floor. The majority of the remaining variable rate debt is related to our Australian and New Zealand entities and bears interest at variable rates determined by reference to the Australian Bank Bill Swap Bid Rate (BBSY) and the New Zealand Bank Bill Reference Rate (BKBM), respectively, plus, in each case, 1.4%.Senior Unsecured Revolving Credit Facility draws. At ~~March 31, 2018,~~June 30, 2021, one-month LIBOR was at approximately ~~1.88%~~0.10%, one-month CDOR was at 0.41%, and one-month LIBOR GBP was at 0.06%, therefore a 100 basis point increase in market interest rates would result in an increase in annual interest expense to service our variable-rate debt of approximately ~~$5.8~~$4.7 million. A 100 basis point decrease in market interest rates would result in ~~only~~ a ~~$5.7~~$1.2 million decrease in annual interest ~~expense to service our variable-rate debt.~~expense.

Foreign Currency Risk

~~Our~~As it relates to the currency of countries where we own and operate warehouse facilities and provide logistics services, our foreign currency risk exposure at ~~March 31, 2018 has~~June 30, 2021 was not materially ~~changed from that~~different than what we disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2020. The information concerning market risk in Item 7A under the caption “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2020, is hereby incorporated by reference in this ~~report.~~Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

In accordance with Rule 13a-15(b) of the Exchange Act, the Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~March 31, 2018.~~June 30, 2021.

Our management is responsible for establishing and maintaining adequate “internal control over financial reporting,” as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management, including the Chief Executive Officer and Chief Financial Officer ~~does~~do not expect that our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

101

Changes in Internal Control over Financial Reporting

~~There were no changes~~On December 30, 2020, we acquired Agro, refer to Note 3 - Business Combinations of this Form 10-Q for further discussion of the acquisition. We are currently in the process of integrating the internal controls and procedures of Agro into our internal controls over financial reporting. Changes to certain processes, information technology systems and other components of internal control over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act) resulting from the acquisition of Agro may occur and will be evaluated by management as such integration activities are implemented. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the Securities and Exchange Commission, we intend to include the internal controls and procedures of Agro in our annual assessment of the effectiveness of our internal control over financial reporting for our 2021 fiscal year.

Excluding the Agro acquisition, there has not been any change in our internal control over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act) identified in ~~management’s~~connection with the evaluation ~~pursuant to Rules~~required by Rule 13a-15(d) ~~or 15d-15(d) of~~under the Exchange Act during the ~~period covered by this~~

~~Quarterly Report on Form 10-Q~~quarter ended June 30, 2021 that has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

102

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be party to a variety of legal proceedings arising in the ordinary course of our business. We are not a party to, nor is any of our property a subject of, any material litigation or legal proceedings or, to the best of our knowledge, any threatened litigation or legal proceedings which, in the opinion of management, individually or in the aggregate, would have a material impact on our business, financial condition, liquidity, results of operations and prospects.

See Note 14 - Commitments and Contingencies to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding material legal proceedings in which we are involved.

Item 1A. Risk Factors

~~There have been no material changes from the risk~~Risk factors ~~disclosed~~that could harm our business, results of operations and financial condition are discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults ~~upon~~Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.None.

Item 5. Other Information

On May 15, 2018, the Compensation Committee of the Company’s Board of Trustees (the “Committee”) took certain actions relating to the compensation of Marc Smernoff, the Company’s Chief Financial Officer and Executive Vice President. The Committee approved an increase in Mr. Smernoff’s annual base salary to $525,000 from $450,000, effective as of May 15, 2018. The Committee also approved an agreement with Mr. Smernoff pursuant to which the Company will pay Mr. Smernoff a one-time cash payment of $100,000 (the “Special Bonus”) and relocation expenses upon the relocation of Mr. Smernoff’s family to the Atlanta, Georgia metropolitan area. The relocation expenses are subject to repayment pursuant to the Company’s relocation policy. In addition, if Mr. Smernoff’s family does not remain in the Atlanta, Georgia metropolitan area for at least one year, Mr. Smernoff will be required to repay 100% of the Special Bonus, and if Mr. Smernoff’s family remains in the Atlanta, Georgia metropolitan area for at least one year but less than two years, Mr. Smernoff will be required to repay 50% of the Special Bonus.

None.

103

Item 6. Exhibits

Index to Exhibits



Exhibit No.		Description
~~10.1~~
10.1		First Amendment to ~~Shareholders~~2020 Note and Guaranty Agreement ~~dated March 8, 2018, by and among the Company and the shareholders of the Company signatories thereto~~
~~10.2#~~ 10.2			~~Form of Annual Trustee Restricted Stock Unit~~Second Amendment to 2019 Note and Guaranty Agreement
~~10.3#~~ 10.3			~~Form of Retention Restricted Stock Unit~~Third Amendment to 2018 Note and Guaranty Agreement
~~10.4#~~ 31.1			~~Form of Performance Restricted Stock Unit Agreement~~
~~10.5#~~	~~Letter Agreement, dated May 11, 2018, by and between the Company and Marc Smernoff~~
~~31.1~~	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
~~95.1~~			~~Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act~~
~~101.INS~~101		The following financial statements of Americold Realty Trust’s Form 10-Q for the quarter ended June 30, 2021, formatted in XBRL ~~Instance Document~~interactive data files: (i) Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020; (ii) Condensed Consolidated Income Statements for the three and six months ended June 30, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 and 2020; (iv) Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2021 and 2020; (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020; and (vi) Notes to Condensed Consolidated Financial Statements.
~~101.SCH~~104		Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Schema Document~~and contained in Exhibit 101).
~~101.CAL~~#			~~XBRL Extension Calculation Linkbase Document~~This document has been identified as a management contract or compensatory plan or arrangement.
~~101.DEF~~			~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~	~~XBRL Taxonomy Extension Labels Linkbase Document~~
~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~# This document has been identified as a management contract or compensatory plan or arrangement.~~

104

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICOLD REALTY TRUST

(Registrant)

Date:

August 6, 2021

~~AMERICOLD REALTY TRUST~~

By:

~~(Registrant)~~

~~Date:~~

~~May 15, 2018~~

~~By:~~

/s/ Marc J. Smernoff

Name:

Marc J. Smernoff

Title:

Chief Financial Officer and Executive Vice President

(On behalf of the registrant and as principal financial officer)



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~March 31, 2018~~	June 30, 2021


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

~~Maryland~~		~~93-0295215~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~		~~(I.R.S. Employer~~ ~~Identification No.)~~

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


Class						Outstanding at August 4, 2021
Common Stock, $0.01 par value per share						261,078,912


Three Months Ended June 30,	Grantee Type	Number of Restricted Stock Units Granted	Vesting Period	Grant Date Fair Value (in thousands)
2021	Trustees	6,616	1 year	$	250
2021	Associates	6,581	1-3 years	$	252
2020	Trustees	8,517	1 year	$	300
2020	Associates	1,195	1 year	$	35



March 31,	Grantee Type	# of Restricted Stock Units Granted	Vesting Period	Grant Date Fair Value (in thousands)
2018	Trustee group	373,438	1-3 years	$	5,975
2018	Employee group	897,125	2-4 years	$	12,677
2017	Trustee group	18,348	2-3 years	$	199
2017	Employee group	71,428	5 years	$	959



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



Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited)
(In thousands, except shares)

	Preferred Shares of
	Beneficial Interest				Common Shares of						Accumulated Deficit and Distributions in Excess of Net Earnings			Accumulated Other Comprehensive Loss
	Series A				Beneficial Interest
	Number of Shares		Par Value		Number of Shares	Par Value		Paid-in Capital
																	Total
Balance - December 31, 2017	125		$	—	69,370,609	$	694	$	394,082		$	(581,470	)	$	(230	)	$	(186,924	)
Net loss	—		—		—	—		—			(8,639		)	—			(8,639		)
Other comprehensive loss	—		—		—	—		—			—			(938		)	(938		)
Redemption and distributions on preferred shares of beneficial interest – Series A	(125	)	—		—	—		(133		)	(1		)	—			(134		)
Distributions on preferred shares of beneficial interest – Series B	—		—		—	—		—			(1,817		)	—			(1,817		)
Distributions on common shares	—		—		—	—		—			(21,436		)	—			(21,436		)
Stock-based compensation expense, net of exercise (Stock Options and Restricted Stock Units)	—		—		125,763	1		1,579			—			—			1,580
Stock-based compensation expense (modification of Restricted Stock Units)	—		—		—	—		2,600			—			—			2,600
Warrants exercise	—		—		6,426,818	64		(64		)	—			—			—
Issuance of common shares	—		—		33,350,000	334		484,571			—			—			484,905
Conversion of mezzanine Series B Preferred shares	—		—		33,240,258	332		372,459			—			—			372,791
Balance - March 31, 2018	—		$	—	142,513,448	$	1,425	1,255,094			$	(613,363	)	$	(1,168	)	$	641,988



	As of March 31,
	2018		2017
Cash and cash equivalents	$	193,868	$	26,946
Restricted cash	19,394		18,831
Total cash, cash equivalents and restricted cash	$	213,262	$	45,777

See accompanying notes to condensed consolidated financial statements.



	March 31, 2018
Condensed consolidated results of operations	CMAL			CMAH			Total
	(In thousands)
Revenues	$	9,741		$	2,867		$	12,608
Operating income	23			84			107
Net (loss) income	$	(2	)	$	71		$	69
Company’s loss from partially owned entities	$	(121	)	$	(18	)	$	(139	)



	March 31, 2017
Condensed consolidated results of operations	CMAL			CMAH		Total
	(In thousands)
Revenues	$	9,354		$	2,216	$	11,570
Operating (loss) income	(144		)	172		28
Net (loss) income	$	(139	)	$	88	$	(51	)
Company’s (loss) income from partially owned entities	$	(70	)	$	43	$	(27	)



As of March 31, 2018:	(In thousands)
Year 1	$	24,069
Year 2	25,199
Year 3	614,956
Year 4	7,102
Year 5	482,381
Thereafter	260,456
Aggregate principal amount of debt	1,414,163
Less unamortized discount and deferred financing costs	(15,936		)
Total debt net of discount and deferred financing costs	$	1,398,227



	Maturity	Interest Rate as of March 31, 2018	March 31, 2018		December 31, 2017
			(In thousands)
1 warehouse – 2010	8/2030	10.34%	$	19,416	$	19,457
11 warehouses – 2007	9/2017 to 9/2027	7.00%–19.59%	101,495		102,059
Total sale-leaseback financing obligations			$	120,911	$	121,516



		Fair Value
	Fair Value Hierarchy	March 31, 2018		December 31, 2017
		(In thousands)
Measured at fair value on a recurring basis:
Cash and cash equivalents	Level 1	$	193,868	$	48,873
Restricted cash	Level 1	19,394		21,090
Interest rate swap liability	Level 2	2,399		2,463
Measured at fair value on a non-recurring basis:
Long-lived assets written down:
Property, plant and equipment	Level 3	$	—	$	2,576
Disclosed at fair value:
Mortgage notes, term loans and construction loan	Level 3	$	1,435,944	$	1,807,199



Three Months Ended March 31, 2018
Month Declared	Dividend Per Share		Distributions Paid or Accrued					Month Paid
			Common Shares		Series B Preferred Shares
(In thousands, except per share amounts)
January ^(a)	$	0.019	$	1,291	$	619	^(b)	January
March	0.140		20,145		—			April
			21,436
Series B Preferred Shares - Fixed Dividend					1,198		^(c)
Total distributions paid to Series B Preferred Shares holders					$	1,817



Three Months Ended March 31, 2017
Month Declared	Dividend Per Share		Distributions Paid or Accrued					Month Paid
			Common Shares		Series B Preferred Shares
(In thousands, except per share amounts)
March	$	0.073	$	5,053	$	2,421	^(a)	April

Series B Preferred Shares - Fixed Dividend					4,688
Total distributions paid or accrued to Series B Preferred Shares holders					$	7,109


Six Months Ended June 30, 2021
Restricted Stock	Number of Time-Based Restricted Stock Units	Aggregate Intrinsic Value (in millions)		Number of Performance-Based Restricted Stock Units	Aggregate Intrinsic Value (in millions)		Number of Market Performance-Based Restricted Stock Units(2)	Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2020	563,224	$	21.0	42,856	$	1.6	873,581	$	42.6
Granted	201,026			0			108,781
Market-performance adjustment(3)	0			0			266,531
Vested	(212,697)			(14,286)			(799,591)
Forfeited	(27,689)			0			(19,201)
Non-vested as of June 30, 2021	523,864	$	19.8	28,570	$	1.1	430,101	$	16.3
Shares vested, but not released(1)	615,643	23.3		42,858	1.6		0	0
Total outstanding restricted stock units	1,139,507	$	43.1	71,428	$	2.7	430,101	$	16.3



Options	Shares (In thousands)		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Terms (Years)
Outstanding as of December 31, 2017	5,478		$	9.72	6.0
Granted	—		—
Exercised	(95	)	7.85
Forfeited or expired	(70	)	9.81
Outstanding as of March 31, 2018	5,313		9.76		5.8

Exercisable as of March 31, 2018	3,666		$	9.73	4.9



Outstanding as of December 31, 2016	6,313		$	9.72	6.8
Granted	—		—
Exercised	—		—
Forfeited or expired	(286	)	9.81
Outstanding as of March 31, 2017	6,027		9.71		6.3

Exercisable as of March 31, 2017	3,537		$	9.64	4.7


Three Months Ended June 30,	Grantee Type	Number of OP Units Granted	Vesting Period	Grant Date Fair Value (in thousands)
2021	Trustees	17,863	1 year	$	675

2020	Trustees	16,325	1 year	$	575


Six Months Ended June 30, 2021
OP Units	Number of Time-Based OP Units	Aggregate Intrinsic Value (in millions)		Number of Market Performance-Based OP Units	Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2020	93,180	$	3.5	178,865	$	6.7
Granted	78,335			198,007
Vested	(41,922)			0
Forfeited	0			0
Non-vested as of June 30, 2021	129,593	$	4.9	376,872	$	14.3
Shares vested, but not released	59,121	2.2		0	0
Total outstanding OP units	188,714	$	7.1	376,872	$	14.3



	March 31, 2018 compared to March 31, 2017
	Average foreign exchange rate used to adjust operating results for the three months ended March 31, 2018 ⁽¹⁾	Foreign exchange rates as of March 31, 2018	Foreign exchange rates as of March 31, 2017
Australian dollar	0.758	0.769	0.764
New Zealand dollar	0.711	0.723	0.700
Argentinian peso	0.063	0.050	0.065
Canadian dollar	0.756	0.775	0.751



	Three months ended March 31,									Change
	2018 actual			2018 constant currency⁽¹⁾			2017 actual			Actual		Constant currency
	(Dollars in thousands)
Rent and storage	$	125,727		$	125,676		$	119,666		5.1	%	5.0	%
Warehouse services	160,790			159,881			156,141			3.0	%	2.4	%
Total warehouse segment revenues	286,517			285,557			275,807			3.9	%	3.5	%

Power	16,114			16,148			15,428			4.4	%	4.7	%
Other facilities costs ⁽²⁾	26,782			26,786			26,258			2.0	%	2.0	%
Labor	128,336			127,670			124,101			3.4	%	2.9	%
Other services costs⁽³⁾	25,715			25,610			26,500			(3.0	)%	(3.4	)%
Total warehouse segment cost of operations	196,947			196,214			192,287			2.4	%	2.0	%
Warehouse segment contribution (NOI)	$	89,570		$	89,343		$	83,520		7.2	%	7.0	%

Warehouse rent and storage contribution (NOI) ⁽⁴⁾	$	82,831		$	82,742		$	77,980		6.2	%	6.1	%
Warehouse services contribution (NOI) ⁽⁵⁾	$	6,739		$	6,601		$	5,540		21.6	%	19.2	%

Total warehouse segment margin	31.3		%	31.3		%	30.3		%	100 bps		100 bps
Rent and storage margin⁽⁶⁾	65.9		%	65.8		%	65.2		%	70 bps		60 bps
Warehouse services margin⁽⁷⁾	4.2		%	4.1		%	3.5		%	70 bps		60 bps



	Stated maturity date	Contractual interest rate ⁽⁵⁾	Effective interest rate ⁽⁶⁾ as of March 31, 2018	March 31, 2018			December 31, 2017
2010 Mortgage Loans cross-collateralized and cross-defaulted by 46 warehouses:				(In thousands)
Component A-1	1/2021	3.86%	4.40%	$	52,641		$	56,941
Component A-2-FX	1/2021	4.96%	5.38%	150,334			150,334
Component A-2-FL ⁽¹⁾	1/2021	L+1.51%	3.80%	48,654			48,654
Component B	1/2021	6.04%	6.48%	60,000			60,000
Component C	1/2021	6.82%	7.28%	62,400			62,400
Component D	1/2021	7.45%	7.92%	82,600			82,600
2013 Mortgage Loans cross-collateralized and cross-defaulted by 15 warehouses:
Senior note	5/2023	3.81%	4.14%	192,654			194,223
Mezzanine A	5/2023	7.38%	7.55%	70,000			70,000
Mezzanine B	5/2023	11.50%	11.75%	32,000			32,000
ANZ Term Loans secured by mortgages in properties owned by relevant subsidiaries:
Australia Term Loan ^{(2), (4)}	6/2020	BBSY+1.40%	4.59%	156,046			158,645
New Zealand Term Loan ^{(3), (4)}	6/2020	BKBM+1.40%	5.15%	31,834			31,240
2018 Senior Secured Term A Facility ⁽⁴⁾secured by stock pledge in qualified subsidiaries	1/2023	L+2.50%	4.90%	$	475,000		$	—
2015 Senior Secured Term Loan B Facility ⁽⁴⁾	12/2022	L+3.75%	5.79%	—			806,918
Total principal amount of mortgage notes and term loans				1,414,163			1,753,955
Less deferred financing costs				(15,611		)	(25,712		)
Less debt discount				(325		)	(6,285		)
Total mortgage notes and term loans, net of deferred financing costs and debt discount				$	1,398,227		$	1,721,958

2018 Senior Secured Revolving Credit Facility secured by stock pledge in qualified subsidiaries ⁽^{4) , (5)}	1/2021	L+2.50%	n/a	$	—		$	—
Construction Loan:
Warehouse Clearfield, UT secured by mortgage⁽⁴⁾	2/2019	LIBOR + 3.25% or prime rate + 2.25%	5.18%	$	—		$	19,671
Less deferred financing costs				—			(179		)
				$	—		$	19,492



	Payments due by period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Principal on mortgage and term loans	$	1,414,163	$	24,069	$	640,155	$	489,483	$	260,456
Interest on mortgage and term loans ⁽¹⁾	243,049		71,539		114,184		54,806		2,520
Sale leaseback financing obligations ⁽²⁾	232,572		16,638		33,949		35,188		146,797
Capital lease obligations, including interest	44,022		11,478		17,384		8,846		6,314
Operating leases	108,446		31,463		48,558		11,093		17,332
Total ^{(3), (4)}	$	2,042,252	$	155,187	$	854,230	$	599,416	$	433,419