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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to            ,
Commission File Number: 001-34723
AMERICOLD REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)
Maryland 93-0295215
 (State or other jurisdiction of incorporation or organization)  (IRS Employer Identification Number)
10 Glenlake Parkway, Suite 600, South Tower
Atlanta Georgia 30328
 (Address of principal executive offices) (Zip Code)
(678) 441-1400
(Registrant’s telephone number, including area code)
_________________________

    


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter periods that the registrant was required to submit such files).
Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):
x Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes ¨ No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934)
Yes No x
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share COLD New York Stock Exchange (NYSE)
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding at August 3, 2022
Common Stock, $0.01 par value per share 269,365,689


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
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
SIGNATURES
1


CAUTIONARY STATEMENT 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:

the impact of supply chain disruptions, including, among others, the impact on labor availability, raw material availability, manufacturing and food production, construction materials and transportation;
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;
rising interest rates and inflation in operating costs, including as a result of the ongoing COVID-19 pandemic;
labor and power costs;
labor shortages;
general economic conditions;
risks associated with the ownership of real estate generally and temperature-controlled warehouses in particular;
acquisition risks, including the failure to identify or complete attractive acquisitions or the failure of acquisitions to perform in accordance with projections and to realize anticipated cost savings and revenue improvements;
our failure to realize the intended benefits from our recent acquisitions and including synergies, or disruptions to our plans and operations or unknown or contingent liabilities related to our recent acquisitions;
risks related to expansions of existing properties and developments of new properties, including failure to meet target completion dates and budgeted or stabilized returns within expected time frames, or at all, in respect thereof;
a failure of our information technology systems, systems conversions and integrations, 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 privacy and data security concerns, and data collection and transfer restrictions and related foreign regulations;
defaults or non-renewals of significant customer contracts, including as a result of the ongoing COVID-19 pandemic;
uncertainty of revenues, given the nature of our customer contracts;
our failure to obtain necessary outside financing;
risks related to, or restrictions contained in, 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;
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;
2


financial market fluctuations;
actions by our competitors and their increasing ability to compete with us;
geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine;
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;
changes in real estate and zoning laws and increases in real property tax rates;
our relationship with our associates, the occurrence of any work stoppages or any disputes under our collective bargaining agreements and employment related litigation;
liabilities as a result of our participation in multi-employer pension plans;
uninsured losses or 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;
changes in foreign currency exchange rates;
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 stockholders to replace our directors and affect the price of our common stock, $0.01 par value per share; and
the potential dilutive effect of our common stock offerings.
    
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,” “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 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, 2021 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, 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 Company” and “the Company” refer to Americold Realty Trust, Inc., a Maryland corporation, 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” or “the Operating Partnership.”

In addition, unless otherwise stated herein, when we refer to “cubic feet” in one of our temperature-controlled facilities, we refer to refrigerated cubic feet (as opposed to total cubic feet, refrigerated and otherwise) therein.

3


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares and per share amounts)
June 30, 2022 December 31, 2021
Assets
Property, buildings and equipment:
Land $ 780,381  $ 807,495 
Buildings and improvements 4,150,724  4,152,763 
Machinery and equipment 1,360,551  1,352,399 
Assets under construction 533,028  450,153 
6,824,684  6,762,810 
Accumulated depreciation (1,765,611) (1,634,909)
Property, buildings and equipment – net 5,059,073  5,127,901 
Operating lease right-of-use assets 367,774  377,536 
Accumulated depreciation – operating leases (68,987) (57,483)
Operating leases – net 298,787  320,053 
Financing leases:
Buildings and improvements 13,549  13,552 
Machinery and equipment 137,421  146,341 
150,970  159,893 
Accumulated depreciation – financing leases (55,355) (58,165)
Financing leases – net 95,615  101,728 
Cash, cash equivalents and restricted cash 74,616  82,958 
Accounts receivable – net of allowance of $10,523 and $18,755 at June 30, 2022 and December 31, 2021, respectively
408,090  380,014 
Identifiable intangible assets – net 944,058  980,966 
Goodwill 1,040,746  1,072,980 
Investments in partially owned entities 72,505  37,458 
Other assets 141,836  112,139 
Total assets $ 8,135,326  $ 8,216,197 
Liabilities and equity
Liabilities:
Borrowings under revolving line of credit $ 584,330  $ 399,314 
Accounts payable and accrued expenses 554,601  559,412 
Mortgage notes, senior unsecured notes and term loans – net of unamortized deferred financing costs of $9,934 and $11,050, in the aggregate, at June 30, 2022 and December 31, 2021, respectively
2,361,487  2,443,806 
Sale-leaseback financing obligations 175,340  178,817 
Financing lease obligations 91,926  97,633 
Operating lease obligations 282,990  301,765 
Unearned revenue 30,670  26,143 
Pension and postretirement benefits 3,051  2,843 
Deferred tax liability – net 143,340  169,209 
Multi-employer pension plan withdrawal liability 8,011  8,179 
Total liabilities 4,235,746  4,187,121 
Commitments and contingencies (Note 7)
Equity
Stockholders’ equity:
Common stock, $0.01 par value per share – 500,000,000 authorized shares; 269,290,641 and 268,282,592 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
2,693  2,683 
Paid-in capital 5,182,309  5,171,690 
Accumulated deficit and distributions in excess of net earnings (1,290,511) (1,157,888)
Accumulated other comprehensive (loss) income (6,496) 4,522 
Total stockholders’ equity 3,887,995  4,021,007 
Noncontrolling interests:
Noncontrolling interests in operating partnership 11,585  8,069 
Total equity 3,899,580  4,029,076 
Total liabilities and equity $ 8,135,326  $ 8,216,197 
See accompanying notes to condensed consolidated financial statements.
4


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Revenues:
Rent, storage and warehouse services $ 564,379  $ 503,734  $ 1,105,304  $ 989,185 
Third-party managed services 83,486  72,173  169,346  145,245 
Transportation services 81,891  78,800  160,801  155,072 
Total revenues 729,756  654,707  1,435,451  1,289,502 
Operating expenses:
Rent, storage and warehouse services cost of operations 413,394  359,355  808,061  698,625 
Third-party managed services cost of operations 79,765  70,480  162,124  139,170 
Transportation services cost of operations 68,306  69,550  138,687  139,119 
Depreciation and amortization 82,690  84,459  165,310  161,670 
Selling, general and administrative 56,273  42,475  113,875  87,527 
Acquisition, litigation and other, net 5,663  3,922  15,738  24,673 
Impairment of long-lived assets —  1,528  —  1,528 
Total operating expenses 706,091  631,769  1,403,795  1,252,312 
Operating income 23,665  22,938  31,656  37,190 
Other income (expense):
Interest expense (26,545) (26,579) (52,318) (52,535)
Loss on debt extinguishment, modifications and termination of derivative instruments (627) (925) (1,244) (4,424)
Other, net (4,609) 141  (4,363) 317 
Loss before income taxes (8,116) (4,425) (26,269) (19,452)
Income tax (expense) benefit
Current (817) (2,406) (1,998) (3,617)
Deferred 12,886  (6,568) 14,775  (4,566)
Total income tax benefit (expense) 12,069  (8,974) 12,777  (8,183)
Net income (loss) $ 3,953  $ (13,399) $ (13,492) $ (27,635)
Net income (loss) attributable to noncontrolling interests 18  (29) (20) 149 
Net income loss attributable to Americold Realty Trust, Inc. $ 3,935  $ (13,370) $ (13,472) $ (27,784)
Weighted average common stock outstanding – basic 269,497  253,213  269,464  253,076 
Weighted average common stock outstanding – diluted 270,384  253,213  269,464  253,076 
Net income (loss) per common share - basic $ 0.01  $ (0.05) $ (0.05) $ (0.11)
Net income (loss) per common share - diluted $ 0.01  $ (0.05) $ (0.05) $ (0.11)
See accompanying notes to condensed consolidated financial statements.

5


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(In thousands)
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net income (loss) $ 3,953  $ (13,399) $ (13,492) $ (27,635)
Other comprehensive (loss) income - net of tax:
Adjustment to accrued pension liability (113) 396  (46) 777 
Change in unrealized net (loss) gain on foreign currency (23,867) 7,026  (12,681) (3,656)
Unrealized gain on cash flow hedge 1,558  1,609  1,709  2,630 
Other comprehensive (loss) income - net of tax attributable to Americold Realty Trust, Inc. (22,422) 9,031  (11,018) (249)
Other comprehensive (loss) income attributable to noncontrolling interests (73) 20  (50)
Total comprehensive loss $ (18,542) $ (4,348) $ (24,560) $ (27,876)
See accompanying notes to condensed consolidated financial statements.


6


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Equity (Unaudited)
(In thousands, except shares and per share amounts)
Common Stock Accumulated Deficit and Distributions in Excess of Net Earnings Accumulated Other Comprehensive (Loss) Income Noncontrolling Interests in Operating Partnership
Number of Shares Par Value Paid-in Capital
Total
Balance - December 31, 2021 268,282,592  $ 2,683  $ 5,171,690  $ (1,157,888) $ 4,522  $ 8,069  $ 4,029,076 
Net loss —  —  —  (17,407) —  (38) (17,445)
Other comprehensive income —  —  —  —  11,404  23  11,427 
Distributions on common stock, restricted stock and OP units —  —  —  (59,580) —  (180) (59,760)
Stock-based compensation expense —  —  6,108  —  —  1,985  8,093 
Common stock issuance related to stock-based payment plans, net of shares withheld for employee taxes 318,729  (2,140) —  —  —  (2,137)
Common stock issuance related to employee stock purchase plan 71,144  1,984  —  —  —  1,985 
Balance - March 31, 2022 268,672,465  $ 2,687  $ 5,177,642  $ (1,234,875) $ 15,926  $ 9,859  $ 3,971,239 
Net income —  —  —  3,935  —  18  3,953 
Other comprehensive loss —  —  —  —  (27,392) (73) (27,465)
Distributions on common stock, restricted stock and OP units —  —  —  (59,571) —  (188) (59,759)
Stock-based compensation expense —  —  5,115  —  —  2,173  7,288 
Common stock issuance related to stock-based payment plans, net of shares withheld for employee taxes 618,176  (448) —  —  —  (442)
Deconsolidation of previously consolidated entities —  —  —  —  4,970  (204) 4,766 
Balance - June 30, 2022 269,290,641  $ 2,693  $ 5,182,309  $ (1,290,511) $ (6,496) $ 11,585  $ 3,899,580 
7


Common Stock 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)
Stock-based compensation expense —  —  4,075  —  —  949  5,024 
Common share issuance related to stock-based payment plans, net of shares withheld for employee taxes 816,915  (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)
Stock-based compensation expense —  —  3,922  —  —  1,539  5,461 
Common share issuance related to stock-based payment plans, net of shares withheld for employee taxes 66,431  (108) —  —  —  (107)
Issuance of common stock 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 


See accompanying notes to condensed consolidated financial statements.
8


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Six Months Ended June 30,
2022 2021
Operating activities:
Net loss $ (13,492) $ (27,635)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 165,310  161,670 
Amortization of deferred financing costs and pension withdrawal liability 2,306  2,233 
Amortization of above/below market leases 1,057  401 
Loss on debt extinguishment, modifications and termination of derivative instruments 1,244  4,301 
Foreign exchange loss (gain) 965  (33)
Loss from investments in partially owned entities 5,759  761 
Gain on extinguishment of New Market Tax Credit structure (3,410) — 
Loss on deconsolidation of subsidiary contributed to joint venture 4,148  — 
Stock-based compensation expense 15,381  10,498 
Deferred income taxes (benefit) expense (14,775) 4,566 
Gain on other asset disposals (96) (475)
Impairment of long-lived assets —  1,528 
Provision for doubtful accounts receivable 1,966  2,910 
Changes in operating assets and liabilities:
Accounts receivable (40,414) (1,775)
Accounts payable and accrued expenses 6,809  (14,332)
Other 484  (16,865)
Net cash provided by operating activities 133,242  127,753 
Investing activities:
Proceeds from sale of investments in partially owned entities —  596 
Investment in partially owned entities (4,427) (6,260)
Proceeds from sale of property, buildings and equipment 240  1,063 
Business combinations, net of cash acquired 812  (215,329)
Acquisitions of property, buildings and equipment, net of cash acquired (6,876) — 
Additions to property, buildings and equipment (181,709) (207,292)
Purchase of noncontrolling interest holders share in consolidated joint venture —  (11,600)
Net cash used in investing activities  (191,960) (438,822)
Financing activities:
Distributions paid on common shares, restricted stock units and noncontrolling interests in Operating Partnership (119,525) (110,813)
Proceeds from stock options exercised 651  5,191 
Proceeds from employee stock purchase plan 1,985  — 
Remittance of withholding taxes related to employee share-based transactions (3,746) (15,791)
Proceeds from revolving line of credit 253,340  210,841 
Repayment on revolving line of credit (55,000) (70,000)
Repayment of sale-leaseback financing obligations (3,584) (1,184)
Repayment of financing lease obligations (17,189) (19,337)
Payment of debt issuance and extinguishment costs (1,084) (3,110)
Repayment of term loan and mortgage notes (3,629) (203,493)
Net proceeds from issuance of common shares —  214,775 
Net cash provided by financing activities 52,219  7,079 
Net decrease in cash, cash equivalents and restricted cash (6,499) (303,990)
Effect of foreign currency translation on cash, cash equivalents and restricted cash (1,843) (984)
Cash, cash equivalents and restricted cash:
Beginning of period 82,958  621,051 
End of period $ 74,616  $ 316,077 
9


Americold Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows, Continued (Unaudited)
(In thousands)
Six Months Ended June 30,
2022 2021
Supplemental disclosures of non-cash investing and financing activities:
Addition of property, buildings and equipment on accrual $ 44,559  $ 63,587 
Addition of property, buildings and equipment under financing lease obligations $ 15,760  $ 11,553 
Addition of property, buildings and equipment under operating lease obligations $ 6,025  $ 3,368 
Supplemental cash flow information:
Interest paid – net of amounts capitalized $ 50,987  $ 43,328 
Income taxes paid – net of refunds $ 4,026  $ 6,147 
As of June 30,
2022 2021
Allocation of purchase price of property, buildings and equipment to:
Land $ 1,322  — 
Buildings and improvements 4,082  — 
Machinery and equipment 1,472  — 
Cash paid for acquisition of property, buildings and equipment
$ 6,876 $
As of June 30,
2022 2021
Deconsolidation of Chile joint venture
Land $ (19,574) $
Buildings and improvements (10,118)
Machinery and equipment (8,395)
Assets under construction (20)
Accumulated depreciation 1,959
Cash, cash equivalents and restricted cash (2,483)
Accounts receivable (1,422)
Goodwill (6,653)
Other Assets (309)
Accounts payable and accrued expenses 1,105
Mortgage notes, senior unsecured notes and term loans – net of unamortized deferred financing costs 9,633
Deferred tax liability – net 6,474
Accumulated other comprehensive loss (4,766)
Net carrying value of Chile assets and liabilities deconsolidated $ (34,569) $
Recognition of investment in unconsolidated LATAM joint venture $ 36,896 $

See accompanying notes to condensed consolidated financial statements.
10


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)





1. General
The Company
Americold Realty Trust, Inc. together with all of its consolidated subsidiaries (ART, Americold, the Company, us 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.
On May 25, 2022, the Company completed its conversion from a Maryland real estate investment trust to a Maryland corporation, pursuant to the Articles of Conversion, as approved by the stockholders at its annual shareholder meeting on May 17, 2022. Each issued and outstanding share of beneficial interest in Americold Realty Trust was converted into one share of Common Stock in Americold Realty Trust, Inc. As a result of this conversion, several references in this Form 10-Q have been updated accordingly. Despite this conversion, the Company continues to operate as a REIT for U.S. federal income tax purposes.
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”). These unaudited condensed consolidated financial statements do not include all disclosures associated with the Company’s consolidated annual financial statements included in its 2021 Annual Report on Form 10-K as filed with the SEC, 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. 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 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. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts 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.
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 2021 Annual Report on Form 10-K as filed with the SEC, which provides additional information with regard to the accounting policies set forth herein and other significant accounting policies.
11


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Formation of Latin America Joint Venture
On May 31, 2022, we formed a joint venture, Americold LATAM Holdings Ltd (the “LATAM JV”), with Cold LATAM Limited (our “JV partner”), in an effort to help us grow our business and market presence in the Latin America region, excluding Brazil. Our JV partner committed to invest approximately $209.0 million in exchange for 85% of the total equity interests, and we contributed our Chilean business upon formation of the joint venture and retained the remaining 15% equity interests in the joint venture. Our JV partner’s contribution commitment includes an initial contribution of $8 million at closing and the remainder as a contribution receivable to the LATAM JV. The JV partner must complete its remaining contribution payments over the next four-year period through December 31, 2025 and in doing so, it retains its 85% equity ownership during this period. As a result of this transaction, we recognized a loss of approximately $4.1 million within “Other, net” on the Condensed Consolidated Statement of Operations (net of accumulated foreign currency translation loss related to the Chilean business) upon the deconsolidation of this entity and subsequent recognition of our subsidiary’s 15% equity investment in the LATAM JV at its estimated fair value of $37.0 million within “Investments in partially owned entities” on the Condensed Consolidated Balance Sheet. The fair value of the Company’s retained equity investment is based on Level 2 measurements within the fair value hierarchy based on the cash paid and contribution receivable committed to by our JV partner for their 85% interest, as well as fair value measurement performed in December 2020 when the Chilean business was acquired. Under the terms of the JV agreement, the Company has a call right that enables it to purchase all remaining issued and outstanding shares of the LATAM JV starting in 2026 through 2028, as calculated in accordance with the JV agreement. Upon expiration of the Company’s call option, if unexercised, the JV partner has a call right that requires the Company to sell all of its interest in the LATAM JV by December 31, 2028, with the exercise price based upon the same calculation as the Company’s call option in accordance with the JV agreement.

Extinguishment of New Market Tax Credit (“NMTC”) Arrangement
During the second quarter of 2022, we recognized a gain of $3.4 million within “Other, net” on the Condensed Consolidated Statement of operations upon extinguishment of New Markets Tax Credit (“NMTC”) agreements which were dissolved immediately following the conclusion of the seven-year compliance period during which the tax credits were recognized. The NMTC deferred contribution liability was previously recorded within “Accounts payable and accrued expenses” on the Condensed Consolidated Balance Sheets. For a more detailed description of the NMTC arrangement, refer to Note 17 of the consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K as filed with the SEC.

Impairment of Long-Lived Assets
There were no impairment charges recorded during the three or six months ended June 30, 2022. During the three and six months ended June 30, 2021, the Company recorded impairment charges totaling $1.5 million related to costs associated with development projects which management determined it would no longer pursue.
Future Adoption of Accounting Standards
Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index
12


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Significant Risks and Uncertainties
The COVID-19 pandemic has caused, and is likely to continue to cause severe economic, market and other disruptions worldwide, which could lead to future material impairments of our assets, increases in our allowance for credit losses and changes in judgments in determining the 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 is closely monitoring the impact of the ongoing COVID-19 pandemic and any variants on all aspects of its business in all geographies, including how it will impact its customers and business partners. The three and six months ended June 30, 2022 and the year ended December 31, 2021 were negatively impacted by COVID-19 related disruptions and other macro-economic conditions in (i) the food supply chain; (ii) our customers’ production of goods; (iii) the labor market impacting availability and cost; and (iv) the impact of inflation on the cost to provide our services. Despite the current headwinds, we expect that end-consumer demand for food will remain consistent over the long-term with historic levels. However, current end-consumer demand coupled with food production and transportation challenges since the outset of the pandemic has driven down holdings in our facilities. As a result, occupancy and throughput volume continue at lower than historical levels experienced prior to COVID-19. We expect this to continue until our customers are able to ramp production back up to pre-pandemic levels for an extended period of time and rebuild inventory in the supply chain.
The unprecedented labor environment continues to be challenging for many companies, including our food manufacturing customers. Labor availability continues to be the primary constraint on food production, along with the continuing spread of COVID-19 and related variants, which also impacts the labor market.
Our business has also been impacted due to inflation during the back half of 2021 and during the three and six months ended June 30, 2022. We believe we are positioned to address continued inflationary pressure as it arises; however, many of our contracts require that we experience sustained cost increases for an extended period of time ranging up to 60 days before we are able to initiate rate increases or seek remedies under our contracts. As a result of the significant impact of inflation on the cost of providing our storage, services and transportation to customers, during the second half of 2021 we initiated out-of-cycle rate increases in our customer contracts (many of which contain provisions for inflationary price escalators), and expect to continue to monitor and implement further inflation and pricing increases required into 2022. We can give no assurance that we will be able to offset the entire impact of inflation or future inflationary cost increases through increased storage or service charges or by operational efficiencies.
Additionally, global supply chains have been volatile following the invasion of Ukraine by Russia which has resulted in sanctions against Russia from the U.S. and a number of European countries. While we do not expect our global operations and specifically our European operations to be directly impacted by this event currently, changes could occur that could impact our operations.
13


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
2. Business Combinations
Acquisitions Completed During 2021
There were no businesses acquired during the three and six months ended June 30, 2022. Total consideration paid for Bowman Stores, and KMT Brrr! and Liberty Freezers, which were acquired during the three and six months ended June 30, 2021 was $106.4 million, $71.4 million, and C$56.8 million, or $44.9 million, respectively, and the acquisition accounting was finalized within twelve months from the date of the respective acquisition. No material adjustments were made to the acquisition accounting during the three and six months ended June 30, 2022. Total consideration paid for ColdCo, Newark Facility Management and Lago Cold Stores, which were businesses acquired during the second half of 2021, for $20.5 million, $390.8 million, and A$102.2 million or $75.1 million, respectively, remained preliminary as of June 30, 2022. No material adjustments were made to the preliminary acquisition accounting for these businesses during the three and six months ended June 30, 2022. We will continue to evaluate the preliminary fair values of the assets acquired and liabilities assumed until they are satisfactorily resolved and adjust our acquisition accounting accordingly and within the allowable measurement period (not to exceed one year from the date of acquisition as defined by ASC 805). For more detailed descriptions of these acquisitions refer to Note 3 of the consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K as filed with the SEC.
3. Acquisition, Litigation and Other, net
The components of the charges and credits included in “Acquisition, litigation and other, net” 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, net 2022 2021 2022 2021
Acquisition and integration related costs $ 3,786  $ 3,075  $ 10,071  $ 16,550 
Litigation 1,179  117  2,379  117 
Severance costs 910  255  3,474  2,701 
Terminated site operations costs 767  13  767  72 
Cyber incident related costs, net of insurance recoveries (819) (289) (793) 4,482 
Other (160) 751  (160) 751 
Total acquisition, litigation and other, net $ 5,663  $ 3,922  $ 15,738  $ 24,673 

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, 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 of the consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K as filed with the SEC for further information regarding acquisitions completed during 2021.

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.

14


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
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 are those expenses incurred which are subject to an insurance claim, including deductibles, which are recorded at the time the claim is submitted to the insurer. Subsequent reimbursement of expenses in excess of the deductible are also reflected within this category upon receipt from the insurer. Occasionally, we may subsequently decide to withdraw an insurance claim if costs are less than initially estimated and below the deductible, among other reasons, resulting in the reversal of the unused portion of a deductible previously recorded to this category.
15


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
4. Debt
The Company’s outstanding indebtedness as of June 30, 2022 and December 31, 2021 was as follows (in thousands):
June 30, 2022 December 31, 2021
Indebtedness Stated Maturity Date Contractual Interest Rate
Effective Interest Rate as of June 30, 2022
Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value
2013 Mortgage Loans
Senior note
5/2023 3.81% 4.14% $ 163,921  $ 162,281  $ 167,545  $ 170,503 
Mezzanine A
5/2023 7.38% 7.55% 70,000  69,300  70,000  70,875 
Mezzanine B
5/2023 11.50% 11.75% 32,000  31,760  32,000  32,560 
Total 2013 Mortgage Loans
265,921  263,341  269,545  273,938 
Chile Mortgages(14)
2022 - 2029 4.01% —% —  —  9,761  9,761 
Senior Unsecured Notes
Series A Notes
1/2026 4.68% 4.77% 200,000  198,000  200,000  217,500 
Series B Notes
1/2029 4.86% 4.92% 400,000  391,000  400,000  454,000 
Series C Notes
1/2030 4.10% 4.15% 350,000  326,375  350,000  385,000 
Series D Notes(5)
1/2031 1.62% 1.67% 419,360  332,343  454,800  441,724 
Series E Notes(6)
1/2033 1.65% 1.70% 366,940  280,709  397,950  388,499 
Total Senior Unsecured Notes
1,736,300  1,528,427  1,802,750  1,886,723 
2020 Senior Unsecured Term Loan Tranche A-1(1)
3/2025
L+0.95%
2.91% 175,000  174,563  175,000  173,688 
2020 Senior Unsecured Term Loan Tranche A-2(2)(4)
3/2025
C+0.95%
3.29% 194,200  194,200  197,800  196,811 
Total 2020 Senior Unsecured Term Loan A Facility
369,200  368,763  372,800  370,499 
2020 Senior Unsecured Revolving Credit Facility-1(2)(3)(7)
3/2024
C+0.85%
3.38% 42,724  42,831  43,516  43,407 
2020 Senior Unsecured Revolving Credit Facility-2(3)(8)(9)
3/2024
SONIA+0.85%
2.43% 83,420  83,628  92,694  92,462 
2020 Senior Unsecured Revolving Credit Facility-3(1)(3)
3/2024
L+0.85%
2.88% 358,000  358,895  205,000  204,488 
2020 Senior Unsecured Revolving Credit Facility-4(3)(10)(11)
3/2024
BBSW+0.85%
2.26% 78,694  78,891  58,104  57,959 
2020 Senior Unsecured Revolving Credit Facility-5(3)(12)(13)
3/2024
E+0.85%
1.21% 21,492  21,546  —  — 
Total 2020 Senior Unsecured Revolving Credit Facility $ 584,330  $ 585,791  $ 399,314  $ 398,316 
Total principal amount of indebtedness $ 2,955,751  $ 2,746,322  $ 2,854,170  $ 2,939,237 
Less: unamortized deferred financing costs
(9,934) n/a (11,050) n/a
Total indebtedness, net of unamortized deferred financing costs
$ 2,945,817  $ 2,746,322  $ 2,843,120  $ 2,939,237 
(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 two times for a six-month period each.
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
(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, 2022.
(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, 2022.
(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, 2022.
(7) The Senior Unsecured Revolving Credit Facility Draw 1 as of June 30, 2022, 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, 2022.
(8) The Senior Unsecured Revolving Credit Facility Draw 2 as of June 30, 2022, 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, 2022.
(9) SONIA = Sterling Overnight Interbank Average Rate.
(10) BBSW = Bank Bill Swap Rate
(11) The Senior Unsecured Revolving Credit Facility Draw 4 as of June 30, 2022, is denominated in AUD and aggregates to AUD 114.0 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2022.
(12) The Senior Unsecured Revolving Credit Facility Draw 5 as of June 30, 2022, is denominated in EUR and aggregates to EUR 20.5 million. The carrying value in the table above is the US dollar equivalent as of June 30, 2022.
(13) E = Euro Interbank Offered Rate (EURIBOR).
(14) The Chile Mortgages were assumed in connection with the Agro Acquisition, and have varying maturities and interest rates. The above aggregates these given the immaterial balance of each individually.
There have been no new debt agreements entered into during 2022. Refer to our 2021 Form 10-K and below for details regarding our debt instruments.
Debt Covenants

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, 2022, we were in compliance with all debt covenants.
Loss on debt extinguishment, modifications and termination of derivative instruments
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 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 of interest rate swaps related to the Senior Unsecured Term Loan A Facility for $0.6 million during each of the three months ended June 30, 2022 and 2021, respectively, and $1.3 million and $1.4 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

5. 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
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
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 mortgage notes, senior unsecured notes and term loans are reported at their aggregate principal amount less unamortized deferred financing costs on the accompanying 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 mortgage notes, senior unsecured notes and 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.
The Company’s financial assets and liabilities recorded at fair value on a recurring basis include 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 active markets (Level 2). Additionally, the fair value of derivatives includes a credit valuation adjustment to appropriately incorporate nonperformance risk for the Company and 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 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 June 30, 2022 and 2021, respectively.
The 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, 2022 December 31, 2021
(In thousands)
Measured at fair value on a recurring basis:
Cross-currency swap asset Level 2 $ 10,153  $ 2,015 
Disclosed at fair value:
Mortgage notes, senior unsecured notes and term loans(1)
Level 3 $ 2,746,322  $ 2,939,237 
(1)The carrying value of mortgage notes, senior unsecured notes and term loans is disclosed in Note 4.
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
6. Stock-Based Compensation
On January 4, 2018, the Company’s Board of Trustees adopted the Americold Realty Trust 2017 Equity Incentive Plan (2017 Plan), which permits the grant of various forms of equity- and cash-based awards from a reserved pool of 9,000,000 common shares of the Company. The details of the 2017 Plan are disclosed in greater detail in the 2021 Form 10-K as filed with the SEC.
All share-based compensation cost is measured at the grant date, based on the estimated fair value of the award. The Company issues time-based, performance-based and market performance-based equity awards. Time-based awards and cliff vesting market performance-based awards are recognized on a straight-line basis over the associates’ requisite service period, as adjusted for estimate of forfeitures. Performance-based awards are recognized ratably over the vesting period using a graded vesting attribution model upon the achievement of the performance target, as adjusted for estimate of forfeitures. The only performance-based awards issued by the Company were granted in 2016 and 2017.
The Company implemented an Employee Stock Purchase Plan (ESPP) which became effective on December 8, 2020. Refer to our 2021 Annual Report on Form 10-K for details of our ESPP. The share-based compensation cost of the ESPP options are measured based on grant date at fair value and are recognized on a straight-line basis over the offering period. The ESPP did not have a material impact on share-based compensation expense during each of the six months ended June 30, 2022 and 2021.
Aggregate share-based compensation charges were $7.0 million and $5.5 million during the three months ended June 30, 2022 and 2021, respectively, and $15.4 million and $10.5 million during the six months ended June 30, 2022 and 2021, respectively. Routine share-based compensation expense is included as a component of “Selling, general and administrative” expense on the accompanying Condensed Consolidated Statements of Operations. As of June 30, 2022, there was $37.0 million of unrecognized share-based compensation expense related to stock options and restricted stock units, which will be recognized over a weighted-average period of 1.9 years. As of June 30, 2022 and December 31, 2021, the Company accrued $1.2 million and $1.5 million, respectively, of dividend equivalents on unvested units payable to associates and directors.
Restricted Stock Units Activity
Restricted stock units are nontransferable until vested. Prior to the issuance of a common share, the grantees of restricted stock units are not entitled to vote the shares. Time-based restricted stock unit awards vest in equal annual increments over the vesting period. Performance-based and market performance-based restricted stock unit awards cliff vest upon the achievement of the performance target, as well as completion of the performance period.
19


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
The following table summarizes restricted stock unit grants under the 2017 Plan during the six months ended June 30, 2022 and 2021, respectively:
Six Months Ended June 30, Grantee Type Number of
Restricted Stock
Units Granted
Vesting
Period
Grant Date
Fair Value
(in thousands)
2022 Directors 4,810
1 year
$ 125 
2022 Associates 493,078
1-3 years
$ 13,192 
2021 Directors 6,616
1 year
$ 250 
2021 Associates 303,191
1-3 years
$ 10,137 
Restricted stock units granted for the six months ended June 30, 2022 consisted of: (i) 4,810 were time-based restricted stock units with a one year vesting period issued to non-employee directors as part of their annual compensation, (ii) 361,902 time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain associates and (iii) 131,176 market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain associates. The vesting of such market performance-based awards will be determined based on our total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2022 and will end December 31, 2024.
Restricted stock units granted for the six months ended June 30, 2021 consisted of (i) 6,616 were time-based restricted stock units with a one year vesting period issued to non-employee directors as part of their annual compensation, (ii) 194,410 time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain associates and (iii) 108,781 market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain associates. The vesting of such market performance-based awards will be determined based on our total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2021 and will end December 31, 2023.
In January 2021, following the completion of the applicable market-performance period, the Compensation Committee determined that the high level had been achieved for the 2018 awards and, accordingly, 799,591 units vested immediately, representing a vesting percentage of 150%.
In January 2022, following the completion of the applicable market-performance period, the Compensation Committee determined that the 51st percentile had been achieved for the 2019 awards and, accordingly, 194,111 units vested immediately, representing a vesting percentage of 91.4%.
20


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
The following table provides a summary of restricted stock awards activity during the six months ended June 30, 2022:
Six Months Ended June 30, 2022
Restricted Stock Number of Time-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, 2021
1,071,959  $ 35.1  374,048  $ 12.3 
Granted
366,712  131,176 
 Market-performance adjustment(3)
—  (18,253)
Vested
(189,470) (194,111)
Forfeited
(87,423) (19,492)
Non-vested as of June 30, 2022
1,161,778  $ 34.9  273,368  $ 8.2 
Shares vested, but not released(1)
46,890  1.4  —  — 
Total outstanding restricted stock units
1,208,668  $ 36.3  273,368  $ 8.2 
(1)For certain vested restricted stock units, common share issuance is contingent upon the first to occur of: (1) termination of service; (2) change in control; (3) death; or (4) disability, as defined in the 2010 Plan. The weighted average grant date fair value of these units is $9.38 per unit. This is also comprised of 46,890 vested time-based restricted stock units which belong to an active member of the Board of Directors and the date of issuance is therefore unknown at this time. The weighted average grant date fair value of these units is $8.42 per unit. The weighted average grant date fair value of these units is $13.43 per unit. The holders of these vested restricted stock units are entitled to receive distributions, but are not entitled to vote the shares until common shares are issued in exchange for these vested restricted stock units.
(2)The number of market performance-based restricted stock units are reflected within this table based upon the number of shares issuable upon achievement of the performance metric at target.
(3)Represents the decrease in the number of original market-performance units awarded based on the final performance criteria achievement at the end of the defined performance period.
The weighted average grant date fair value of restricted stock units granted during the six months ended June 30, 2022 was $26.62 per unit, for vested and converted restricted stock units was $30.28, for forfeited restricted stock units was $30.27. The weighted average grant date fair value of non-vested restricted stock units was $29.26 and $31.40 per unit as of June 30, 2022 and December 31, 2021, respectively.
OP Units Activity
Our Board of Directors and certain members of management may elect to receive their awards in the form of either OP units or restricted stock units (applicable to time-vested and market-performance based awards). The terms of the OP units mirror the terms of the restricted stock units granted in the respective period.
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
The following table summarizes OP unit grants during the six months ended June 30, 2022 and June 30, 2021:
Six Months Ended June 30, Grantee Type Number of
OP Units Granted
Vesting
Period
Grant Date
Fair Value
(in thousands)
2022 Directors 35,593
1 year
$ 925 
2022 Associates 342,980
1-3 years
$ 9,087 
2021 Directors 17,863
1 year
$ 675 
2021 Associates 258,479
1-3 years
$ 8,434 
OP units granted for the year ended June 30, 2022 consisted of: (i) 35,593 time-based OP units with a one year vesting period issued to non-employee directors as part of their annual compensation, (ii) 98,994 time-based graded vesting OP units with various vesting periods ranging from one to three years issued to certain associates in connection with the annual grant provided in March and (iii) 243,986 market performance-based cliff vesting OP units with a three-year vesting period issued to certain associates in connection with the annual grant provided in March.
OP units granted for the year ended June 30, 2021 consisted of: (i) 17,863 were time-based OP units with a one year vesting period issued to non-employee directors as part of their annual compensation, (ii) 60,472 time-based graded vesting OP units with various vesting periods ranging from one to three years issued to certain associates and (iii) 198,007 market performance-based cliff vesting OP units with a three-year vesting period issued to certain associates.
The following table provides a summary of the OP unit awards activity during the six months ended June 30, 2022:
Six Months Ended June 30, 2022
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, 2021
140,222  $ 4.6  288,165  $ 9.4 
Granted
134,587  243,986 
Vested
(92,789) — 
Forfeited
(7,635) (20,344)
Non-vested as of June 30, 2022
174,385  $ 5.2  511,807  $ 15.4 
Shares vested, but not released
169,484  6.0  —  — 
Total outstanding OP units
343,869  $ 11.2  511,807  $ 15.4 
The weighted average grant date fair value of OP units granted for the six months ended June 30, 2022 was $26.45 per unit, for vested OP units was $32.32 and forfeited OP units was $31.94. The weighted average grant date fair value of non-vested OP units was $29.30 and $31.30 per unit as of June 30, 2022 and December 31, 2021, respectively.
22


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Stock Options Activity
The following table provides a summary of option activity for the six months ended June 30, 2022:
Options Shares
(In thousands)
Weighted-Average Exercise Price Weighted-Average Remaining Contractual Terms (Years)
Outstanding as of December 31, 2021
206,298  $ 9.81  2.9
Granted
   
Exercised
(45,800) 9.81 
Forfeited or expired
   
Outstanding as of June 30, 2022
160,498  9.81  2.9
Exercisable as of June 30, 2022
160,498  $ 9.81  2.9
The total grant date fair value of stock option awards that vested during the six months ended June 30, 2022 and 2021 was approximately $0.1 million and $0.6 million, respectively. The total intrinsic value of options exercised for the six months ended June 30, 2022 and 2021 was $0.9 million and $5.6 million, respectively.
7. Income Taxes
The Company’s effective tax rates for the three and six months ended June 30, 2022 vary from the statutory U.S. federal income tax rate primarily due to the Company being designated as a REIT that is generally treated as a non-tax paying entity. During the three and six months ended June 30, 2022, the effective tax rates were impacted by a net deferred tax benefit due to losses generated by our foreign operations and the recognition of a deferred tax benefit of $6.5 million in connection with the deconsolidation of our Chilean operations upon contribution to the LATAM JV.
8. Commitments and Contingencies
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 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
23


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
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” in which Americold Corporation agreed to execute any additional documents necessary to fulfill the intent of the settlement agreement. The plaintiffs then sued Americold Corporation’s insurer to recover on the consent judgment. The case was ultimately dismissed in 2012, and the Kansas Supreme Court ruled that the 1994 consent judgment had 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 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 for summary judgment, which the plaintiffs vigorously opposed. On October 4, 2013, the court granted the Company’s motion and dismissed the case in full. The Court of Appeals ordered that the case be remanded to the Kansas State Court and the judgment in 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 certiorari and oral argument occurred on January 19, 2016.
On March 7, 2016, the United States Supreme Court ruled that there was no federal diversity jurisdiction. Following the decision, the United States District Court for the District of Kansas entered an Order vacating the summary judgment and remanding the case to Kansas state court.
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 (the “First 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 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
24


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
payment of that award. As to the amount of the award, the Company and PFS have entered into a stipulation that PFS will pay Americold $550,000 to reimburse the Company for its legal fees upon the conclusion of the case. PFS has since amended its complaint, and Americold has filed a motion to dismiss that amended complaint.
The Company denies the allegations of the PFS Action and the Fenway Action and believes the plaintiffs’ claims are without merit and intends to vigorously defend itself against the allegations. Given the status of the proceedings to date, a liability 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.
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 June 30, 2022 and December 31, 2021. 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 material unrecorded liabilities as of June 30, 2022. 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 June 30, 2022 and December 31, 2021.
25


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
9. Accumulated Other Comprehensive (Loss) Income
The Company reports activity in AOCI for foreign currency translation adjustments, including the translation adjustment for investments in partially owned entities, unrealized gains and losses on cash flow hedge derivatives, and minimum pension liability adjustments (net of tax). The activity in AOCI for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Pension and other postretirement benefits:
(Loss) gain arising during the period
$ (118) $ 381  $ (57) $ 762 
Amortization of prior service cost (1)
15  11  15 
Total pension and other postretirement benefits, net of tax $ (113) $ 396  $ (46) $ 777 
Foreign currency translation adjustments:
Cumulative translation adjustment $ (84,167) $ 7,026  $ (96,674) $ (3,656)
Derecognition of cumulative foreign currency translation upon deconsolidation of entity contributed to a joint venture 4,970  —  4,970  — 
Derivative net investment hedges 55,330  —  79,023  — 
Total foreign currency translation (loss) gain $ (23,867) $ 7,026  $ (12,681) $ (3,656)
Designated derivatives:
Cash flow hedge derivatives $ 12,464  $ 2,350  $ 8,138  $ 5,022 
Net amount reclassified from AOCI to net (loss) gain (2) (3) (4)
(10,906) (741) (6,429) (2,392)
Total unrealized gains on derivative contracts $ 1,558  $ 1,609  $ 1,709  $ 2,630 
Total change in other comprehensive (loss) income $ (22,422) $ 9,031  $ (11,018) $ (249)
(1)Amounts reclassified from AOCI for pension liabilities are recognized in “Selling, general and administrative” in the accompanying condensed consolidated statements of operations.
(2)Expense of a nominal amount will be reclassified to Interest Expense during each of the three months ended June 30, 2022 and 2021, and six months ended June 30, 2022 and 2021, related to derivatives designated as foreign exchange contracts.
(3)In conjunction with the termination of the interest rate swaps in 2020, the Company recorded $0.6 million in other comprehensive income that was reclassified as an adjustment to earnings during each of the three months ended June 30, 2022 and 2021 and $1.3 million and $1.4 million during the six months ended June 30, 2022 and 2021, respectively. The Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction.
(4)Included in the three months ended June 30, 2022 and 2021, respectively, was $11.5 million and $1.6 million and during the six months ended June 30, 2022 and 2021, respectively, was $7.7 million and $4.0 million in net amount reclassified from AOCI to foreign exchange gain (loss), net which is included within “Other, net” in the condensed consolidated statements of operations.

10. Segment Information
Our principal operations are organized into three reportable segments: Warehouse, Third-party managed and Transportation. The details of these segments remain materially unchanged from those disclosed in the 2021 Form 10-K as filed with the SEC.
Our reportable segments are strategic business units separated by 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.
26


Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
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 exclude selling, general and administrative expense, acquisition, litigation and other, net, impairment of long-lived assets, gain or loss on sale of real estate and all components of non-operating other income and expense. Selling, general and administrative 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.
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.
The following table presents segment revenues and contributions with a reconciliation to loss before income tax for the three and six months ended June 30, 2022 and 2021 (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Segment revenues:
Warehouse $ 564,379  $ 503,734  $ 1,105,304  $ 989,185 
Third-party managed 83,486  72,173  169,346  145,245 
Transportation 81,891  78,800  160,801  155,072 
Total revenues 729,756  654,707  1,435,451  1,289,502 
Segment contribution:
Warehouse 150,985  144,379  297,243  290,560 
Third-party managed 3,721  1,693  7,222  6,075 
Transportation 13,585  9,250  22,114  15,953 
Total segment contribution 168,291  155,322  326,579  312,588 
Reconciling items:
Depreciation and amortization (82,690) (84,459) (165,310) (161,670)
Selling, general and administrative (56,273) (42,475) (113,875) (87,527)
Acquisition, litigation and other, net (5,663) (3,922) (15,738) (24,673)
Impairment of long-lived assets —  (1,528) —  (1,528)
Interest expense (26,545) (26,579) (52,318) (52,535)
Loss on debt extinguishment, modifications and termination of derivative instruments (627) (925) (1,244) (4,424)
Other, net (4,609) 141  (4,363) 317 
Loss before income tax benefit $ (8,116) $ (4,425) $ (26,269) $ (19,452)



27


Americold Realty Trust, Inc. 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, 2022 December 31, 2021
(In thousands)
Assets:
Warehouse $ 7,709,110  $ 7,821,426 
Managed 56,191  48,497 
Transportation 223,022  218,252 
Total segments assets 7,988,323  8,088,175 
Reconciling items:
Corporate assets 74,498  90,564 
Investments in partially owned entities 72,505  37,458 
Total reconciling items 147,003  128,022 
Total assets $ 8,135,326  $ 8,216,197 
11. Income (loss) per Common Share
Basic and diluted earnings per common share are calculated by dividing the net income or loss attributable to common stockholders by the basic and diluted weighted-average number of common shares outstanding in the period, respectively, using the 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 directors 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, 2022 and 2021 is as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Weighted average common shares outstanding – basic 269,497  253,213  269,464  253,076 
Dilutive effect of share-based awards 887  —  —  — 
Weighted average common shares outstanding – diluted 270,384  253,213  269,464  253,076 
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
For the six months ended June 30, 2022 and 2021, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net loss for both periods. Consequently, the Company did not have any adjustments between basic and diluted loss per share related to share-based awards or equity forward contracts.
The table below presents the number of antidilutive potential common shares that are not considered in the calculation of diluted loss per share (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Employee stock options —  292  182  353 
Restricted stock units 76  965  1,777  965 
OP units —  497  719  428 
Equity forward contracts —  603  —  5,134 
76  2,357  2,678  6,880 
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
12. Revenue from Contracts with Customers
Disaggregated Revenue
The following tables represent a disaggregation of revenue from contracts with customers for the three and six months ended June 30, 2022 and 2021 by segment and geographic region:
Three Months Ended June 30, 2022
North America Europe Asia-Pacific South America Total
(In thousands)
Warehouse rent and storage
$ 192,127  $ 19,070  $ 17,844  $ 2,522  $ 231,563 
Warehouse services(1)
255,829  30,425  34,139  1,635  322,028 
Third-party managed
78,250  —  5,236  —  83,486 
Transportation
39,741  34,038  7,562  550  81,891 
Total revenues (2)
565,947  83,533  64,781  4,707  718,968 
Lease revenue (3)
9,395  1,393  —  —  10,788 
Total revenues from contracts with all customers
$ 575,342  $ 84,926  $ 64,781  $ 4,707  $ 729,756 
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  —  5,167  —  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  —  —  —  7,637 
Total revenues from contracts with all customers
$ 501,340  $ 81,386  $ 67,002  $ 4,979  $ 654,707 
(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $4.2 million and $3.5 million for the three months ended June 30, 2022 and June 30, 2021, respectively.
(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.
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Six Months Ended June 30, 2022
North America Europe Asia-Pacific South America Total
(In thousands)
Warehouse rent and storage
$ 374,066  $ 36,425  $ 34,565  $ 5,472  $ 450,528 
Warehouse services
493,998  62,622  73,341  3,235  633,196 
Third-party managed
159,070  —  10,276  —  169,346 
Transportation
77,234  68,144  14,422  1,001  160,801 
Total revenues (1)
1,104,368  167,191  132,604  9,708  1,413,871 
Lease revenue (2)
18,708  2,872  —  —  21,580 
Total revenues from contracts with all customers
$ 1,123,076  $ 170,063  $ 132,604  $ 9,708  $ 1,435,451 
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  —  10,543  —  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  —  —  —  13,812 
Total revenues from contracts with all customers
$ 990,617  $ 154,586  $ 134,997  $ 9,302  $ 1,289,502 
(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $7.4 million and $6.4 million for the six months ended June 30, 2022 and June 30, 2021, respectively.
(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.
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 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.
The Company has no material warranties or obligations for allowances, refunds or other similar obligations.
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Americold Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
As of June 30, 2022, the Company had $670.5 million of remaining unsatisfied performance obligations from contracts with customers subject to non-cancellable terms and 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% of these remaining performance obligations as revenue in 2022, and the remaining 83% to be recognized over a weighted average period of 13.1 years through 2038.
Contract Balances
The timing of revenue recognition, billings and cash collections results in accounts receivable (contract assets), and unearned revenue (contract liabilities) on the 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 on storage and handling services, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the 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 June 30, 2022, were not materially impacted by any other factors.
Accounts receivable balances related to contracts with customers accounted for under ASC 606 were $400.5 million and $375.1 million as of June 30, 2022 and December 31, 2021, respectively. All other trade receivable balances relate to contracts accounted for under ASC 842.
Unearned revenue related to contracts with customers were $30.7 million and $26.1 million as of June 30, 2022 and December 31, 2021, respectively. Substantially all revenue that was included in the contract liability balances at the beginning of 2022 has been recognized as of June 30, 2022, and represents revenue from the satisfaction of monthly storage and handling services with inventory that turns on average every 30 days.

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Item 2. 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 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, 2021 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.
On May 25, 2022, we consummated our previously-disclosed conversion from a Maryland real estate investment trust to a Maryland corporation (the “Conversion”). Upon the consummation of the Conversion, each of our issued and outstanding shares of beneficial interest was converted into one share of common stock, and the rights of our stockholders began to be governed by the Maryland General Corporation Law and our Articles of Incorporation and Bylaws. The Conversion did not result in any change in CUSIP, trading symbol, federal tax identification number, or any material change in business, offices, assets, liabilities, obligations or net worth, or any change in directors, officers or employees. Despite this conversion, the Company continues to operate as a REIT for U.S. federal income tax purposes.

MANAGEMENT’S OVERVIEW
We are the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. We are organized as a self-administered and self-managed REIT with proven operating, development and acquisition expertise. As of June 30, 2022, we operated a global network of 249 temperature-controlled warehouses encompassing approximately 1.5 billion cubic feet, with 202 warehouses in North America, 27 in Europe, 18 warehouses in Asia-Pacific, and two warehouses in South America. In addition, we hold three minority interests in South American joint ventures, one with SuperFrio, which owns or operates 38 temperature-controlled warehouses in Brazil, one with Comfrio, which owns or operates 28 temperature-controlled warehouses in Brazil, and one with the LATAM JV, which owns one temperature-controlled warehouse in Chile. The LATAM joint-venture was created during the second quarter of 2022 and intends to grow our presence in Latin America, excluding Brazil, through development and acquisition over time.

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Components of Our Results of Operations
Warehouse. Our primary source of revenues consists of rent, storage, and warehouse services fees. Our rent, 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, perishable 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, (10) government-approved temperature-controlled storage and inspection services, (11) fumigation, (12) pre-cooling and cold treatment services, (13) produce grading and bagging, (14) protein boxing, (15) e-commerce fulfillment, and (16) ripening. We refer to these handling and other warehouse services as our value-added services.
Cost of operations for our warehouse segment consist of power, other facilities costs, labor, and other service costs. Labor, 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, changes in compensation levels and associated performance incentives, the use of third-party labor to support our operations, changes in terms of collective bargaining agreements, changes in customer requirements and associated work content, workforce productivity, labor availability, governmental policies and regulations, variability in costs associated with medical 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 process 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, fluctuations in the price for power in the regions where we operate may have a significant effect on our financial results. We may from time to time hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts. Additionally, business mix impacts power expense depending on the temperature zone or type of freezing 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), personal protective equipment 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, which may also include fuel and capacity 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,
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including driver and equipment availability in certain markets. Additionally, in certain markets we employ drivers and assets to serve our customers. Costs to operate these assets include, wages, fuel, tolls, insurance and maintenance.
Other Consolidated Operating Expenses. We also incur depreciation and amortization expenses, corporate-level selling, general and administrative expenses and corporate-level acquisition, litigation and other, net expenses.
Our depreciation and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to our warehouses, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, and our computer hardware and software. Amortization relates primarily to intangible assets for customer relationships.
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 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. 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. We have begun to integrate our recent acquisitions into this shared services structure.
Our corporate-level acquisition, litigation and other, net consists 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.
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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 relate to insurance claims, including deductibles, and related recoveries.
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Key Factors Affecting Our Business and Financial Results
Market Conditions and COVID-19
During the three and six months ended June 30, 2022 and the year ended December 31, 2021, our business and financial results were negatively impacted by COVID-19 related disruptions and other macro-economic conditions in (i) the food supply chain; (ii) our customers’ production and transportation of goods; (iii) the labor market impacting availability and cost; and (iv) the impact of inflation on the cost to provide our services. Despite the current headwinds, we expect that end-consumer demand for food will remain consistent with historic levels over the long-term. However, current end-consumer demand coupled with food production and transportation challenges since the outset of the pandemic has driven down holdings in our facilities. As a result, occupancy and throughput volume continue at lower than historical levels experienced prior to COVID-19. We expect this to continue until our customers are able to ramp production back up to pre-pandemic levels for an extended period of time and rebuild inventory in the supply chain.
The unprecedented labor environment continues to be challenging for many companies, including our food manufacturing customers. Labor availability continues to be the primary constraint on food production, along with the continuing spread of COVID-19 and related variants, which also impacts the labor market.
Our business has also been impacted due to inflation during the back half of 2021 and during the three and six months ended June 30, 2022. We believe we are positioned to address continued inflationary pressure as it arises; however, many of our contracts require that we experience sustained cost increases for an extended period of time ranging up to 60 days before we are able to initiate rate increases or seek remedies under our contracts. As a result of the significant impact of inflation on the cost of providing our storage, services and transportation to customers, during the second half of 2021 we initiated out-of-cycle rate increases in our customer contracts (many of which contain provisions for inflationary price escalators), and expect to continue to monitor and implement further inflation and pricing increases required into 2022. We can give no assurance that we will be able to offset the entire impact of inflation or future inflationary cost increases through increased storage or service charges or by operational efficiencies.
Additionally, global supply chains have been volatile following the invasion of Ukraine by Russia which has resulted in sanctions against Russia from the U.S. and a number of European countries. While we do not have warehouses or operations in Russia or Ukraine, our global operations and specifically our European operations may be impacted as a result of the ongoing conflict, including increased power costs and disruptions in inventory transportation, logistics systems and supply chain management. To date, our operations have not been materially impacted by the ongoing conflict.
Refer to “Item 1A - Risk Factors” of our 2021 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 as filed with the SEC.
Acquisitions and Joint Ventures
There have been no acquisitions during the six months ended June 30, 2022. Refer to Note 2 of the Notes to the Condensed Consolidated Financial Statements and Note 3 of our 2021 Annual Report on Form 10-K for further information regarding acquisitions.
On June 2, 2022, we formed a joint venture, Americold LATAM Holdings Ltd (the “LATAM JV”), with Cold Latam Limited (our “JV partner”), in an effort to help us grow our business and market presence in Latin
37



America, excluding Brazil. Our JV partner committed to invest approximately $209.0 million in exchange for 85% of the total equity interests, and we contributed our Chilean business upon formation of the joint venture and retained the remaining 15% equity interests in the joint venture.
Seasonality
We are involved in providing services to food producers, distributors, retailers and e-tailers whose businesses, in some cases, are seasonal or cyclical. In order to mitigate the volatility in our revenue and earnings caused by seasonal business, we have implemented fixed commitment contracts with certain of our customers. Our customers with fixed commitment contracts pay for guaranteed warehouse space in order to maintain their required inventory levels, which is especially helpful to them during periods of peak physical occupancy. The timing of Easter fluctuates between the first and second quarter of the year, however, on average the first and second quarter revenue and NOI are relatively consistent. On a portfolio-wide basis, physical occupancy rates are generally the lowest during May and June. Physical occupancy rates typically exhibit a gradual increase after May and June as a result of annual harvests and our customers building inventories in connection with end-of-year holidays and generally peak between mid-September and early December as a result thereof. The external temperature reaches annual peaks for a majority of our portfolio during the third quarter of the year resulting in increase power expense that negatively impacts NOI, and moderates during the fourth quarter. Typically, we have higher than average physical occupancy levels in October or November, which also tends to result in higher revenues. In light of the ongoing COVID-19 pandemic, we have seen variability in physical occupancy levels as compared to the typical seasonality trends.
Additionally, the involvement of our customers in a cross-section of the food industry mitigates, in part, the impact of seasonality as peak demand for various products occurs at different times of the year (for example, demand for ice cream is typically highest in the summer while demand for frozen turkeys usually peaks in the late fall). Our southern hemisphere operations in Australia, New Zealand and South America also help balance the impact of seasonality in our global operations, as their growing and harvesting cycles are complementary to North America and Europe. Each of our warehouses sets its own operating hours based on demand, which is heavily driven by growing seasons and seasonal consumer demand for certain products.
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 Condensed Consolidated Statements of 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.
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Foreign exchange
rates as of
June 30, 2022
Average foreign exchange rates used to translate actual operating results for the three months ended June 30, 2022
Average foreign exchange rates used to translate actual operating results for the six months ended June 30, 2022
Foreign exchange
rates as of
June 30, 2021
Prior period average
foreign exchange rate used to adjust actual operating results for the three months ended June 30, 2022(1)
Prior period average
foreign exchange rate used to adjust actual operating results for the six months ended June 30, 2022(1)
Argentinian peso 0.008  0.008  0.009  0.010  0.011  0.011 
Australian dollar 0.690  0.715  0.719  0.750  0.769  0.771 
Brazilian real 0.190  0.204  0.198  0.201  0.191  0.187 
British Pound 1.218  1.257  1.300  1.383  1.394  1.386 
Canadian dollar 0.777  0.784  0.786  0.807  0.811  0.800 
Chilean Peso 0.001  0.001  0.001  0.001  0.001  0.001 
Euro 1.048  1.065  1.094  1.186