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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 | September 30, 2021

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
(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)
_________________________

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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 Shares of Beneficial Interest, $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 November 3, 2021
Common Stock, $0.01 par value per share |  | 266,769,465

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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 | 54
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 96
Item 4. Controls and Procedures | 96
PART II - OTHER INFORMATION |
Item 1. Legal Proceedings | 98
Item 1A. Risk Factors | 98
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 98
Item 3. Defaults Upon Senior Securities | 99
Item 4. Mine Safety Disclosures | 99
Item 5. Other Information | 99
Item 6. Exhibits | 100
SIGNATURES | 101

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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:
•uncertainties and risks related to public health crises, including the ongoing COVID-19 pandemic;
•adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry;
•general economic conditions;
•risks associated with the ownership of real estate 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 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 budgeted or stabilized returns within expected time frames, or at all, in respect thereof;
•a failure of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions or loss of confidential information;
•risks related to privacy and data security concerns, and data collection and transfer restrictions and related foreign regulations;
•uncertainty of revenues, given the nature of our customer contracts;
•defaults or non-renewals of significant customer contracts, including as a result of the ongoing COVID-19 pandemic;
•inflation and supply chain disruptions;
•increased interest rates and operating costs, including as a result of the ongoing COVID-19 pandemic;
•our failure to obtain necessary outside financing;
•risks related to, or restrictions contained in, 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;
•financial market fluctuations;
•actions by our competitors and their increasing ability to compete with us;
•labor and power costs;
•labor shortages;
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•changes in applicable governmental regulations and tax legislation, including in the international markets and proposed tax legislation proposed by the Biden administration;
•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;
•the competitive environment in which we operate;
•our relationship with our employees, 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;
•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 shareholders to replace our trustees and affect the price of our common shares of beneficial interest, $0.01 par value per share, or our common shares;
•the potential dilutive effect of our common share offerings; and
•risks related to any forward sale agreement, including the 2021 ATM forward sale agreements, including substantial dilution to our earnings per share or substantial cash payment obligations.
The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks included in other sections of this Quarterly Report on Form 10-Q. Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “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, 2020, could cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
As used in this report, unless the context otherwise requires, references to “we,” “us,” “our,” “our Company” and “the Company” refer to Americold Realty Trust, a Maryland real estate investment trust, and its consolidated subsidiaries, including Americold Realty Operating Partnership, L.P., a Delaware limited partnership and the subsidiary through which we conduct our business, which we refer to as “our Operating Partnership” 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

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares and per share amounts)
| September 30, 2021 |  | December 31, 2020
Assets |  |  |
Property, buildings and equipment: |  |  |
Land | $ | 769,720 |  |  | $ | 662,885 |
Buildings and improvements | 4,057,597 |  |  | 4,004,824 |
Machinery and equipment | 1,297,087 |  |  | 1,177,572 |
Assets under construction | 402,576 |  |  | 303,531 |
| 6,526,980 |  |  | 6,148,812 |
Accumulated depreciation | (1,563,868) |  |  | (1,382,298) |
Property, buildings and equipment – net | 4,963,112 |  |  | 4,766,514 |
Operating lease right-of-use assets | 385,341 |  |  | 291,797 |
Accumulated depreciation – operating leases | (48,978) |  |  | (24,483) |
Operating leases – net | 336,363 |  |  | 267,314 |
Financing leases: |  |  |
Buildings and improvements | 13,550 |  |  | 60,513 |
Machinery and equipment | 148,724 |  |  | 109,416 |
| 162,274 |  |  | 169,929 |
Accumulated depreciation – financing leases | (56,686) |  |  | (40,937) |
Financing leases – net | 105,588 |  |  | 128,992 |
Cash, cash equivalents and restricted cash | 152,770 |  |  | 621,051 |
Accounts receivable – net of allowance of $17,017 and $12,286 at September 30, 2021 and December 31, 2020, respectively | 368,179 |  |  | 324,221 |
Identifiable intangible assets – net | 1,011,102 |  |  | 797,423 |
Goodwill | 1,039,850 |  |  | 794,335 |
Investments in partially owned entities | 38,571 |  |  | 44,907 |
Other assets | 112,019 |  |  | 86,394 |
Total assets | $ | 8,127,554 |  |  | $ | 7,831,151 |
Liabilities and equity |  |  |
Liabilities: |  |  |
Borrowings under revolving line of credit | $ | 305,664 |  |  | $ | — |
Accounts payable and accrued expenses | 577,721 |  |  | 552,547 |
Mortgage notes, senior unsecured notes and term loans – net of unamortized deferred financing costs of $11,446 and $15,952, in the aggregate, at September 30, 2021 and December 31, 2020, respectively | 2,400,593 |  |  | 2,648,266 |
Sale-leaseback financing obligations | 182,979 |  |  | 185,060 |
Financing lease obligations | 98,135 |  |  | 125,926 |
Operating lease obligations | 316,457 |  |  | 269,147 |
Unearned revenue | 22,114 |  |  | 19,209 |
Pension and postretirement benefits | 7,247 |  |  | 9,145 |
Deferred tax liability – net | 193,194 |  |  | 220,502 |
Multi-employer pension plan withdrawal liability | 8,267 |  |  | 8,528 |
Total liabilities | 4,112,371 |  |  | 4,038,330 |
Commitments and contingencies (Note 14) |  |  |
Equity |  |  |
Shareholders’ equity: |  |  |
Common shares of beneficial interest, $0.01 par value – 500,000,000 and 325,000,000 authorized shares; 266,769,008 and 251,702,603 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 2,668 |  |  | 2,517 |
Paid-in capital | 5,110,432 |  |  | 4,687,823 |
Accumulated deficit and distributions in excess of net earnings | (1,090,595) |  |  | (895,521) |
Accumulated other comprehensive loss | (13,477) |  |  | (4,379) |
Total shareholders’ equity | 4,009,028 |  |  | 3,790,440 |
Noncontrolling interests: |  |  |
Noncontrolling interests in operating partnership and consolidated joint venture | 6,155 |  |  | 2,381 |
Total equity | 4,015,183 |  |  | 3,792,821 |
Total liabilities and equity | $ | 8,127,554 |  |  | $ | 7,831,151 |
See accompanying notes to condensed consolidated financial statements. |  |  |

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Americold Realty Trust and Subsidiaries |  |  |  |
Condensed Consolidated Statements of Operations (Unaudited) |  |  |  |
(In thousands, except per share amounts) |  |  |  |
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2021 |  | 2020 |  | 2021 |  | 2020 |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |
Rent, storage and warehouse services | $ | 542,047 |  |  | $ | 388,024 |  |  | $ | 1,531,232 |  |  | $ | 1,141,503 |  |  |  |  |
Third-party managed services | 87,782 |  |  | 75,338 |  |  | 233,027 |  |  | 213,213 |  |  |  |  |
Transportation services | 78,979 |  |  | 34,096 |  |  | 234,051 |  |  | 104,874 |  |  |  |  |
Other | — |  |  | — |  |  | — |  |  | 4,459 |  |  |  |  |
Total revenues | 708,808 |  |  | 497,458 |  |  | 1,998,310 |  |  | 1,464,049 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Rent, storage and warehouse services cost of operations | 397,055 |  |  | 260,268 |  |  | 1,095,680 |  |  | 766,842 |  |  |  |  |
Third-party managed services cost of operations | 83,231 |  |  | 71,945 |  |  | 222,401 |  |  | 202,752 |  |  |  |  |
Transportation services cost of operations | 72,728 |  |  | 29,909 |  |  | 211,847 |  |  | 91,110 |  |  |  |  |
Cost of operations related to other revenues | 23 |  |  | 17 |  |  | 82 |  |  | 4,286 |  |  |  |  |
Depreciation and amortization | 70,569 |  |  | 53,569 |  |  | 232,239 |  |  | 157,572 |  |  |  |  |
Selling, general and administrative | 45,545 |  |  | 35,969 |  |  | 133,072 |  |  | 105,202 |  |  |  |  |
Acquisition, litigation and other, net | 6,338 |  |  | 5,282 |  |  | 31,011 |  |  | 9,771 |  |  |  |  |
Impairment of long-lived assets | 1,784 |  |  | 2,615 |  |  | 3,312 |  |  | 6,282 |  |  |  |  |
Loss (gain) from sale of real estate | — |  |  | 427 |  |  | — |  |  | (21,448) |  |  |  |  |
Total operating expenses | 677,273 |  |  | 460,001 |  |  | 1,929,644 |  |  | 1,322,369 |  |  |  |  |
Operating income | 31,535 |  |  | 37,457 |  |  | 68,666 |  |  | 141,680 |  |  |  |  |
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest expense | (25,303) |  |  | (23,066) |  |  | (77,838) |  |  | (70,114) |  |  |  |  |
Loss on debt extinguishment, modifications and termination of derivative instruments | (627) |  |  | — |  |  | (5,051) |  |  | (781) |  |  |  |  |
Other, net | (523) |  |  | (1,198) |  |  | (147) |  |  | 232 |  |  |  |  |
Income (loss) before income tax benefit (expense) | 5,082 |  |  | 13,193 |  |  | (14,370) |  |  | 71,017 |  |  |  |  |
Income tax (expense) benefit |  |  |  |  |  |  |  |  |  |  |
Current | (3,336) |  |  | (2,103) |  |  | (6,953) |  |  | (6,823) |  |  |  |  |
Deferred | 3,562 |  |  | 1,284 |  |  | (1,004) |  |  | 4,353 |  |  |  |  |
Total income tax benefit (expense) | 226 |  |  | (819) |  |  | (7,957) |  |  | (2,470) |  |  |  |  |
Net income (loss) | $ | 5,308 |  |  | $ | 12,374 |  |  | $ | (22,327) |  |  | $ | 68,547 |  |  |  |  |
Net income attributable to non controlling interests | 14 |  |  | — |  |  | 163 |  |  | — |  |  |  |  |
Net income (loss) attributable to Americold Realty Trust | $ | 5,294 |  |  | $ | 12,374 |  |  | $ | (22,490) |  |  | $ | 68,547 |  |  |  |  |
Weighted average common shares outstanding – basic | 261,865 |  |  | 204,289 |  |  | 256,129 |  |  | 202,380 |  |  |  |  |
Weighted average common shares outstanding – diluted | 262,550 |  |  | 208,500 |  |  | 256,129 |  |  | 206,051 |  |  |  |  |
Net income (loss) per common share of beneficial interest - basic | $ | 0.02 |  |  | $ | 0.06 |  |  | $ | (0.09) |  |  | $ | 0.33 |  |  |  |  |
Net income (loss) per common share of beneficial interest - diluted | $ | 0.02 |  |  | $ | 0.06 |  |  | $ | (0.09) |  |  | $ | 0.33 |  |  |  |  |

See accompanying notes to condensed consolidated financial statements.
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Americold Realty Trust and Subsidiaries |  |  |  |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) |  |  |  |
(In thousands) |  |  |  |
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2021 |  | 2020 |  | 2021 |  | 2020 |  |  |  |
Net income (loss) | $ | 5,308 |  |  | $ | 12,374 |  |  | $ | (22,327) |  |  | $ | 68,547 |  |  |  |  |
Other comprehensive income (loss) - net of tax: |  |  |  |  |  |  |  |  |  |  |
Adjustment to accrued pension liability | 389 |  |  | 414 |  |  | 1,166 |  |  | 1,240 |  |  |  |  |
Change in unrealized net (loss) gain on foreign currency | (9,485) |  |  | 4,641 |  |  | (13,141) |  |  | (10,569) |  |  |  |  |
Unrealized gain (loss) on cash flow hedge | 247 |  |  | (1,004) |  |  | 2,877 |  |  | (8,537) |  |  |  |  |
Other comprehensive (loss) income - net of tax attributable to Americold Realty Trust | (8,849) |  |  | 4,051 |  |  | (9,098) |  |  | (17,866) |  |  |  |  |
Other comprehensive loss attributable to noncontrolling interests | (19) |  |  | — |  |  | (11) |  |  | — |  |  |  |  |
Total comprehensive (loss) income | $ | (3,560) |  |  | $ | 16,425 |  |  | $ | (31,436) |  |  | $ | 50,681 |  |  |  |  |
See accompanying notes to condensed consolidated financial statements. |  |  |  |  |  |  |  |  |  |

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Americold Realty Trust and Subsidiaries |
Condensed Consolidated Statements of Equity (Unaudited) |
(In thousands, except shares and per share amounts) |
| Common Shares of Beneficial Interest |  | Accumulated Deficit and Distributions in Excess of Net Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Operating Partnership and Consolidated Joint Venture |
| Number of Shares | Par Value | Paid-in Capital |
| Total
Balance - December 31, 2020 | 251,702,603 |  | $ | 2,517 |  | $ | 4,687,823 |  | $ | (895,521) |  | $ | (4,379) |  | $ | 2,381 |  | $ | 3,792,821 |
Net (loss) income | — |  | — |  | — |  | (14,414) |  | — |  | 178 |  | (14,236) |
Other comprehensive loss | — |  | — |  | — |  | – | (9,280) |  | (12) |  | (9,292) |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (55,909) |  | — |  | (120) |  | (56,029) |
Share-based compensation expense | — |  | — |  | 4,075 |  | — |  | — |  | 949 |  | 5,024 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 816,915 |  | 8 |  | (10,089) |  | — |  | — |  | — |  | (10,081) |
Balance - March 31, 2021 | 252,519,518 |  | $ | 2,525 |  | $ | 4,681,809 |  | $ | (965,844) |  | $ | (13,659) |  | $ | 3,376 |  | $ | 3,708,207 |
Net loss | — |  | — |  | — |  | (13,370) |  | — |  | (29) |  | (13,399) |
Other comprehensive income | — |  | — |  | — |  | – | 9,031 |  | 20 |  | 9,051 |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (57,773) |  | — |  | (124) |  | (57,897) |
Share-based compensation expense | — |  | — |  | 3,922 |  | — |  | — |  | 1,539 |  | 5,461 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 66,431 |  | 1 |  | (108) |  | — |  | — |  | — |  | (107) |
Issuance of common shares | 8,429,104 |  | 84 |  | 214,775 |  | — |  | — |  | — |  | 214,859 |
Balance - June 30, 2021 | 261,015,053 |  | 2,610 |  | 4,900,398 |  | (1,036,987) |  | (4,628) |  | 4,782 |  | 3,866,175 |
Net income | — |  | — |  | — |  | 5,294 |  | — |  | 14 |  | 5,308 |
Other comprehensive loss | — |  | — |  | — |  | — |  | (8,849) |  | (19) |  | (8,868) |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (58,902) |  | — |  | (124) |  | (59,026) |
Share-based compensation expense | — |  | — |  | 2,782 |  | — |  | — |  | 1,502 |  | 4,284 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 9,326 |  | — |  | (57) |  | — |  | — |  | — |  | (57) |
Common share issuance related to employee stock purchase plan | 63,260 |  | 1 |  | 1,919 |  | — |  | — |  | — |  | 1,920 |
Issuance of common shares | 5,681,369 |  | 57 |  | 205,390 |  | — |  | — |  | — |  | 205,447 |
Balance - September 30, 2021 | 266,769,008 |  | $ | 2,668 |  | $ | 5,110,432 |  | $ | (1,090,595) |  | $ | (13,477) |  | $ | 6,155 |  | $ | 4,015,183 |

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| Common Shares of Beneficial Interest |  | Accumulated Deficit and Distributions in Excess of Net Earnings | Accumulated Other Comprehensive Loss |
| Number of Shares | Par Value | Paid-in Capital |
| Total
Balance - December 31, 2019 | 191,799,909 |  | $ | 1,918 |  | $ | 2,582,087 |  | $ | (736,861) |  | $ | (14,126) |  | $ | 1,833,018 |
Net income | — |  | — |  | — |  | 23,511 |  | — |  | 23,511 |
Other comprehensive loss | — |  | — |  | — |  | — |  | (29,172) |  | (29,172) |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (42,568) |  | — |  | (42,568) |
Share-based compensation expense | — |  | — |  | 4,298 |  | — |  | — |  | 4,298 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 216,056 |  | 2 |  | (1,508) |  | — |  | — |  | (1,506) |
Issuance of common shares | 8,250,000 |  | 83 |  | 233,512 |  | — |  | — |  | 233,595 |
Cumulative effect of accounting change | — |  | — |  | — |  | (500) |  | — |  | (500) |
Balance - March 31, 2020 | 200,265,965 |  | $ | 2,003 |  | $ | 2,818,389 |  | $ | (756,418) |  | $ | (43,298) |  | $ | 2,020,676 |
Net income | — |  | — |  | — |  | 32,662 |  | — |  | 32,662 |
Other comprehensive income | — |  | — |  | — |  | — |  | 7,255 |  | 7,255 |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (43,271) |  | — |  | (43,271) |
Share-based compensation expense | — |  | — |  | 4,449 |  | — |  | — |  | 4,449 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 255,311 |  | 2 |  | 2,200 |  | — |  | — |  | 2,202 |
Issuance of common shares | 3,094,431 |  | 31 |  | 107,002 |  | — |  | — |  | 107,033 |
Balance - June 30, 2020 | 203,615,707 |  | $ | 2,036 |  | $ | 2,932,040 |  | $ | (767,027) |  | $ | (36,043) |  | $ | 2,131,006 |
Net (loss) income | — |  | — |  | — |  | 12,374 |  | — |  | 12,374 |
Other comprehensive income | — |  | — |  | — |  | — |  | 4,051 |  | 4,051 |
Distributions on common shares, restricted stock and OP units | — |  | — |  | — |  | (43,282) |  | — |  | (43,282) |
Share-based compensation expense | — |  | — |  | 4,555 |  | — |  | — |  | 4,555 |
Common share issuance related to share-based payment plans, net of shares withheld for employee taxes | 63,868 |  | 1 |  | 167 |  | — |  | — |  | 168 |
Balance - September 30, 2020 | 203,679,575 |  | $ | 2,037 |  | $ | 2,936,762 |  | $ | (797,935) |  | $ | (31,992) |  | $ | 2,108,872 |

See accompanying notes to condensed consolidated financial statements.
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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
| Nine Months Ended September 30,
| 2021 |  | 2020
Operating activities: |  |  |
Net (loss) income | $ | (22,327) |  |  | $ | 68,547 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 232,239 |  |  | 157,572 |
Amortization of deferred financing costs and pension withdrawal liability | 3,321 |  |  | 3,945 |
Amortization of above/below market leases | 1,418 |  |  | 115 |
Loss on debt extinguishment, modifications and termination of derivative instruments | 4,927 |  |  | 542 |
Foreign exchange loss | 317 |  |  | 373 |
Loss from investments in partially owned entities | 1,250 |  |  | 254 |
Share-based compensation expense | 14,788 |  |  | 13,340 |
Change in deferred taxes | 1,004 |  |  | (4,353) |
Gain from sale of real estate | — |  |  | (21,448) |
Gain (loss) on sale of assets | (647) |  |  | 715 |
Impairment of long-lived assets | 3,312 |  |  | 6,282 |
Provision for doubtful accounts receivable | 4,730 |  |  | 5,523 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable | (46,372) |  |  | (1,196) |
Accounts payable and accrued expenses | (16,281) |  |  | 4,262 |
Other | (17,360) |  |  | (7,275) |
Net cash provided by operating activities | 164,319 |  |  | 227,198 |
Investing activities: |  |  |
Proceeds from sale of investments in partially owned entities | 596 |  |  | — |
Investment in partially owned entities | (6,260) |  |  | (26,218) |
Proceeds from sale of property, buildings and equipment | 1,318 |  |  | 77,354 |
Proceeds from the settlement of net investment hedge | — |  |  | 3,034 |
Business combinations, net of cash acquired | (616,316) |  |  | (398,737) |
Acquisitions of property, buildings and equipment, net of cash acquired | — |  |  | (25,538) |
Additions to property, buildings and equipment | (313,229) |  |  | (241,614) |
Purchase of noncontrolling interest holders share in consolidated joint venture | (11,600) |  |  | — |
Net cash used in investing activities | (945,491) |  |  | (611,719) |
Financing activities: |  |  |
Distributions paid on common shares, restricted stock units and noncontrolling interests in Operating Partnership | (168,538) |  |  | (124,025) |
Proceeds from stock options exercised | 5,191 |  |  | 6,748 |
Proceeds from employee stock purchase plan | 1,920 |  |  | — |
Remittance of withholding taxes related to employee share-based transactions | (15,777) |  |  | (6,380) |
Proceeds from revolving line of credit | 590,841 |  |  | 186,753 |
Repayment on revolving line of credit | (280,000) |  |  | (177,075) |
Repayment of sale-leaseback financing obligations | (2,663) |  |  | (2,736) |
Repayment of financing lease obligations | (27,500) |  |  | (14,299) |
Payment of debt issuance costs | (3,110) |  |  | (8,345) |
Repayment of term loan and mortgage notes | (205,246) |  |  | (55,028) |
Proceeds from term loan | — |  |  | 177,075 |
Net proceeds from issuance of common shares | 420,151 |  |  | 340,629 |
Net cash provided by financing activities | 315,269 |  |  | 323,317 |
Net decrease in cash, cash equivalents and restricted cash | (465,903) |  |  | (61,204) |
Effect of foreign currency translation on cash, cash equivalents and restricted cash | (2,378) |  |  | 1,945 |
Cash, cash equivalents and restricted cash: |  |  |
Beginning of period | 621,051 |  |  | 240,613 |
End of period | $ | 152,770 |  |  | $ | 181,354 |

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Americold Realty Trust and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
(In thousands)
| Nine Months Ended September 30,
| 2021 |  | 2020
Supplemental disclosures of non-cash investing and financing activities: |  |  |
Deferred cash consideration | $ | 11,820 |  |  | $ | — |
Addition of property, buildings and equipment on accrual | $ | 70,427 |  |  | $ | 38,079 |
Addition of fixed assets under financing lease obligations | $ | 13,362 |  |  | $ | 41,184 |
Addition of fixed assets under operating lease obligations | $ | 68,738 |  |  | $ | 11,887 |
Supplemental cash flow information: |  |  |
Interest paid – net of amounts capitalized | $ | 81,487 |  |  | $ | 79,156 |
Income taxes paid – net of refunds | $ | 7,557 |  |  | $ | 556 |
| As of September 30,
Allocation of purchase price of property, buildings and equipment to: | 2021 |  | 2020
Land | $ | — |  | $ | 3,233
Buildings and improvements | — |  | 15,940
Machinery and equipment | — |  | 6,022
Identifiable intangible assets | — |  | 140
Other assets | — |  | 303
Cash paid for acquisition of property, buildings and equipment | $ | — |  | $ | 25,638
| As of September 30,
| 2021 |  | 2020
Allocation of purchase price to business combinations: |  |  |
Land | $ | 49,223 |  | $ | 43,812
Buildings and improvements | 155,496 |  | 159,057
Machinery and equipment | 60,192 |  | 52,606
Assets under construction | 373 |  | 308
Operating lease right-of-use assets | 28,973 |  | 4,161
Financing leases | 24 |  | —
Cash and cash equivalents | 6,669 |  | 2,214
Accounts receivable | 6,567 |  | 6,674
Goodwill | 67,102 |  | 81,202
Customer relationships | 307,737 |  | 92,351
Other assets | 2,495 |  | 120
Accounts payable and accrued expenses | (9,459) |  |  | (3,428) |
Financing lease obligations | (24) |  |  | — |
Operating lease obligations | (20,581) |  |  | (4,027) |
Unearned revenue | (1,387) |  |  | (1,068) |
Deferred tax liability | (19,831) |  |  | (33,031) |
Total consideration | $ | 633,569 |  | $ | 400,951
See accompanying notes to condensed consolidated financial statements. |  |  |

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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. General
The Company
Americold Realty Trust, together with 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. As of September 30, 2021, we operated a global network of 248 temperature-controlled warehouses encompassing over 1.5 billion cubic feet, with 202 warehouses in North America, 27 in Europe, 16 warehouses in Asia-Pacific, and three warehouses in South America. In addition, we hold two minority interests in Brazilian-based joint ventures, one with SuperFrio, which owns or operates 33 temperature-controlled warehouses and one with Comfrio, which owns or operates 25 temperature-controlled warehouses.
During 2010, the Company formed a Delaware limited partnership, Americold Realty Operating Partnership, L.P. (the Operating Partnership), and transferred substantially all of its interests in entities and associated assets and liabilities to the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT or an UPREIT structure. The REIT is the sole general partner of the Operating Partnership, owning approximately 99% of the partnership interests as of September 30, 2021. Americold Realty Operations, Inc., a Delaware corporation and a wholly-owned subsidiary of the REIT, is a limited partner of the Operating Partnership, owning less than 1% of the partnership interests as of September 30, 2021. Additionally, the aggregate partnership interests of all other limited partners was less than 1% as of September 30, 2021. As the sole general partner of the Operating Partnership, the REIT has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. The limited partners of the Operating Partnership do not have rights to replace Americold Realty Trust as the general partner nor do they have participating rights, although they do have certain protective rights.
The Company grants Operating Partnership Profit Units (OP Units) to certain members of the Board of Trustees and certain members of management of the Company, which are described further in Note 11. Upon vesting these units represent interests in the Operating Partnership that are not owned by Americold Realty Trust.
On March 22, 2021, the Company filed Articles of Amendment to the Company’s Amended and Restated Declaration of Trust with the State Department of Assessments and Taxation of Maryland to increase the number of authorized common shares of beneficial interest, $0.01 par value per share, from 325,000,000 to 500,000,000. The Articles of Amendment were effective upon filing. The Company also has 25,000,000 authorized preferred shares of beneficial interest, $0.01 par value per share; however, none are issued or outstanding as of September 30, 2021 or December 31, 2020.
The Operating Partnership includes numerous disregarded entities (“DRE”). Additionally, the Operating Partnership conducts various business activities in North America, Europe, Asia-Pacific and South America through several wholly-owned taxable REIT subsidiaries (TRSs).
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Recent Capital Markets Activity
Other Equity Forwards and Activity
During the three months ended September 30, 2021, the Company settled 4,785,000 forward shares outstanding that were originally entered into in connection with its October 2020 underwritten equity offering for net proceeds of $171.3 million. Additionally, during the three months ended June 30, 2021, the Company settled its forward sale agreement of 6,000,000 shares for net proceeds of $128.5 million, originally issued in connection with its September 2018 underwritten equity offering.
At the Market (ATM) Equity Program
On May 10, 2021, the Company entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $900.0 million of our common shares through an ATM Equity Program (the “2021 ATM Equity Program”). Sales of the Company’s common shares made pursuant to the 2021 ATM Equity Program may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. Sales may also be made on a forward basis pursuant to separate forward sale agreements. The intended use of the net proceeds from sales of the Company’s common shares pursuant to the 2021 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects. During the nine months ended September 30, 2021, there were 2,332,846 common shares sold under the 2021 ATM Equity Program under forward sale agreements for gross proceeds of $90.6 million. On September 28, 2021, the Company settled 896,369 of these shares for gross proceeds of $34.6 million. Pursuant to the respective forward sale agreements, the remaining 1,436,477 of shares must be settled by July 1, 2022 for gross proceeds of $56.0 million under the 2021 ATM Equity Program.
On April 16, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $500.0 million of our common shares through an ATM Equity Program (“the 2020 ATM Equity Program”). Sales of the Company’s common shares made pursuant to the 2020 ATM Equity Program may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. Sales may also be made on a forward basis pursuant to separate forward sale agreements. The intended use of the net proceeds from sales of the Company’s common shares pursuant to the 2020 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects.
At December 31, 2020, there were 2,429,104 shares sold under the 2020 ATM Equity Program that were subject to forward sale agreements. These shares were settled for gross proceeds of $86.6 million during the three month period ended June 30, 2021. As of September 30, 2021, there were no forward shares outstanding under the 2020 ATM Equity Program.
Universal Shelf Registration Statement
In connection with filing the ATM Equity Offering Sales Agreement on April 16, 2020, the Company and the Operating Partnership filed with the SEC an automatic shelf registration statement on Form S-3 (Registration Nos.
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
333-237704 and 333-237704-01) (the “Registration Statement”), registering an indeterminate amount of (i) the Company’s common shares of beneficial interest, $0.01 par value per share, (ii) the Company’s preferred shares of beneficial interest, $0.01 par value per share, (iii) depositary shares representing entitlement to all rights and preferences of fractions of the Company’s preferred shares of a specified series and represented by depositary receipts, (iv) warrants to purchase the Company’s common shares or preferred shares or depositary shares and (v) debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company.
Acquisitions
On September 1, 2021, the Company acquired Newark Facility Management for $391.4 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.
On August 2, 2021, the Company acquired the assets of the ColdCo Companies for $20.7 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.
On May 28, 2021, the Company acquired Bowman Stores for £75.5 million, or $107.1 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.
On June 1, 2021, the Company purchased the remaining minority shareholders portion of Frigorifico, a joint venture acquired in tandem with the Agro acquisition, for $16.0 million.
On May 5, 2021, the Company acquired KMT Brrr! for $70.8 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.
On March 1, 2021, the Company acquired Liberty Freezers for Canadian Dollars of C$55.0 million, or $43.5 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility.
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 SEC. These unaudited condensed consolidated financial statements do not include all disclosures associated with the Company’s consolidated annual financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020, and, accordingly, should be read in conjunction with the referenced annual report. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. 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
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
and liabilities as of the date of the financial statements, and (2) revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant Risks and Uncertainties
The COVID-19 pandemic has caused, and is likely to continue to cause severe economic, market and other disruptions worldwide, which could lead to material impairments of our assets, increases in our allowance for credit losses and changes in judgments in determining the 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. While the Company did not incur significant disruptions during 2020 from the COVID-19 pandemic, the nine-months ended September 30, 2021 were negatively impacted by COVID-19 related disruptions in (i) the food supply chain; (ii) our customers’ production of goods; (iii) the labor market impacting availability and cost; and (iv) the overall impact of inflation on the cost to provide our services. We expect that end-consumer demand for food will remain consistent over the long-term with historic levels overall but varying between retail and food service sectors. The consistent end consumer demand has driven down holdings in our facilities as it remains steady and production has remained challenged since the onset of the pandemic. We expect it will continue to do so until our customers are able to ramp production back up to pre-pandemic levels for an extended period of time in order to rebuild inventory in the supply chain. However, uncertainty still surrounds the impact of the pandemic and recovery ultimately depends on many factors. COVID-19 disruptions in certain markets where we or our customers operate continue to impact the food supply chain and our business. As a result, occupancy and throughput volume continue at lower than historical levels experienced prior to COVID-19. As the Company continues to protect its employees from the spread of COVID-19, it is incurring elevated labor related costs and incremental health and safety supplies costs relative to its pre-pandemic experience. We continue to expect to see inflationary impacts in the cost of providing our services, but anticipate that these will be partially mitigated through price increases that have either taken effect or are expected to take effect during the remainder of the year. The Company is unable to predict the impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties.
The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with any degree of confidence, including the scope, severity, duration and geographies of the outbreak, the actions taken to contain the COVID-19 pandemic or mitigate its impact as requested or mandated by governmental authorities or otherwise voluntarily taken by individuals or businesses, the direct and indirect economic effects of the illness and containment measures, and supply chain disruption, among others. As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
2. Summary of Significant Accounting Policies
The following disclosure regarding certain of our significant accounting policies should be read in conjunction with Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, which provides additional information with regard to the accounting policies set forth herein and other significant accounting policies.
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Impairment of Long-Lived Assets
For the nine months ended September 30, 2021, the Company recorded impairment charges totaling $3.3 million, which included an impairment charge of $1.7 million related to costs associated with development projects which management determined it would no longer pursue and a charge of $1.6 million for certain software costs that were determined no longer usable. For the nine months ended September 30, 2020, the Company recorded impairment charges totaling $6.3 million, which included an impairment charge of $3.7 million of Quarry segment assets related to the sale of the business and an impairment charge of $2.6 million of Managed segment assets due to the strategic decision to accelerate the exit of a leased managed facility during the third quarter of 2020 and another leased managed facility that the Company exited during the fourth quarter of 2020.
Business Combinations
For business combinations, the excess of purchase price over the net fair value of assets acquired and liabilities assumed is recorded as goodwill. In an asset acquisition where we have determined that the cost incurred differs from the fair value of the net assets acquired, we assess whether we have appropriately determined the fair value of the assets and liabilities acquired and we also confirm that all identifiable assets have been appropriately identified and recognized. After completing this assessment, we allocate the difference on a relative fair value basis to all assets acquired except for financial assets (as defined in ASC 860, Transfers and Servicing), deferred taxes, and assets defined as “current” (as defined in ASC 210, Balance Sheet).
Whether the acquired business is being accounted for as a business combination or an asset acquisition, the determination of fair values of identifiable assets and liabilities requires estimates and the use of valuation techniques. Significant judgment is involved specifically in determining the estimated fair value of the acquired land and buildings and improvements and intangible assets. For intangible assets, we typically use the excess earnings method. Significant estimates used in valuing intangible assets acquired in a business combination include, but are not limited to, revenue growth rates, customer attrition rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates. For land and buildings and improvements, we used a combination of methods including the cost approach to value buildings and improvements and the sales comparison approach to value the underlying land. Significant estimates used in valuing land and buildings and improvements acquired in a business combination include, but are not limited to estimates of indirect costs and entrepreneurial profit, which were added to the replacement cost of the acquired assets in order to estimate their fair value in the market.
Refer to Note 3 for the disclosures related to recent acquisitions accounted for as a business combination.
Recently Adopted Accounting Standards
Defined Benefit Plans
Effective January 1, 2021, we adopted ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans, on a retrospective basis. This update amends ASC 715 to remove disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant to defined benefit pension and other postretirement plans. The ASU’s changes related to disclosures are part of the FASB’s disclosure framework project. Adoption of the new standard did not have a material impact on the condensed consolidated financial statements.
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
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. The Company has certain borrowings which are currently indexed to LIBOR. In March 2021, the administrator of LIBOR announced that the publication of LIBOR will cease for all GBP, EUR, CHF and JPY LIBOR settings and the one-week and two-month USD LIBOR settings immediately after December 31, 2021. It will stop publishing all remaining USD LIBOR settings (i.e. the overnight and the one-, three-, six- and 12-month settings) based on bank submissions immediately after June 30, 2023. The Company intends to apply the FASB’s optional expedients, when available, as it transitions to SOFR for its borrowings currently indexed to LIBOR. Accordingly, we do not believe that the transition to SOFR will have a material impact on the condensed consolidated financial statements.
3. Business Combinations
Acquisitions Completed During the Nine Months Ended September 30, 2021
Acquisition of Liberty Freezers
The Company completed the acquisition of Liberty Freezers on March 1, 2021 for total consideration of C$55.0 million, or $43.5 million, including cash received of C$1.8 million, or $1.4 million based on the exchange rate between the CAD and USD on the closing date of the transaction. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $3.2 million of land, $13.9 million of buildings and improvements, $3.7 million of machinery and equipment, $12.4 million of goodwill, $8.0 million of a customer relationship intangible asset, $29.0 million of operating right-of-use assets adjusted to reflect the favorable terms of the lease when compared with market terms, and $7.1 million of deferred tax liabilities, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the Canadian market and leveraging integration experience to drive synergies.
The acquisition was completed through the acquisition of stock in Canada; as a result, no tax basis in goodwill exists for Canadian tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill for Canadian tax purposes. Deductible goodwill exists for U.S. federal income tax purposes and will be available to reduce taxable income at the REIT, including any Global Intangible Low-Taxed Income (“GILTI”) inclusion associated with the foreign TRS in Canada. The preliminary acquisition accounting is based upon the Company’s estimates of fair value. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805, Business Combinations.
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
Acquisition of KMT Brrr!
The Company completed the acquisition of KMT Brrr! on May 5, 2021 for total consideration of $70.8 million, including cash received of $0.5 million. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $8.4 million of land, $46.7 million of buildings and improvements, $11.5 million of machinery and equipment, $1.6 million of goodwill, and $1.1 million of a customer relationship intangible asset, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the New Jersey market and leveraging integration experience to drive synergies.
The KMT Brrr! acquisition was completed through the acquisition of all of the membership interests of certain limited liability companies and the acquisition allowed goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill as a result. Deductible goodwill will be available to reduce taxable income at both the REIT and its domestic TRS. The preliminary acquisition accounting is based upon the Company’s estimates of fair value. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse and Transportation segments since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
Acquisition of Bowman Stores
The Company completed the acquisition of Bowman Stores on May 28, 2021 for total consideration of £75.5 million, or $107.1 million, including cash received of £2.4 million, or $3.4 million based on the exchange rate between the Pound Sterling and USD on the closing date of the transaction. The purchase price included deferred consideration of £8.3 million, or $11.8 million. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $6.0 million of land, $33.6 million of buildings and improvements, $17.8 million of machinery and equipment, $34.5 million of goodwill, $25.3 million of a customer relationship intangible asset, and $12.7 million of deferred tax liabilities, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the European market and leveraging integration experience to drive synergies.
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Notes to Condensed Consolidated Financial Statements - (Unaudited)
The Bowman acquisition was completed through the acquisition of stock in the UK; as a result, no additional step-up in tax basis in goodwill in the UK was created aside from the inherited carryover tax basis that existed prior to the acquisition. The Company’s US deemed asset election under IRC section 338 will reduce the US income taxability of future foreign profits under the GILTI regime. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
Acquisition of ColdCo
The Company completed the acquisition of the assets of the ColdCo Companies located in St. Louis, Missouri and Reno, Nevada, on August 2, 2021 for total consideration of $20.7 million, including cash received of $0.3 million. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $1.3 million of land, $10.3 million of buildings and improvements, $2.7 million of machinery and equipment, $1.8 million of goodwill, and $4.3 million of a customer relationship intangible asset, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including entry into the direct-to-consumer, e-fulfillment market and leveraging integration experience to drive synergies.
The ColdCo acquisition was completed through the acquisition of substantially all of the assets from the seller and the acquisition allowed goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill as a result. Deductible goodwill will be available to reduce taxable income at both the REIT and its domestic TRS. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
Acquisition of Newark Facility Management
The Company completed the acquisition of Newark Facility Management located in New Jersey, on September 1, 2021 for total consideration of $391.4 million, including cash received of $1.0 million. The acquisition accounting related to the consideration transferred primarily included the preliminary fair values of the assets acquired and liabilities assumed including $30.3 million of land, $51.0 million of buildings and improvements, $24.4 million of machinery and equipment, $17.2 million of goodwill, and $269.0 million of a customer relationship intangible asset, all of which are allocated to the Warehouse segment. The customer relationship asset has been preliminarily assigned a useful life of 25 years and is being amortized on a straight-line basis. The goodwill recorded is primarily attributable to the Company’s ability to add complementary customers into its network, provide an
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Notes to Condensed Consolidated Financial Statements - (Unaudited)
opportunity for growth in the the northeast market, deepen existing customer relationships and leveraging integration experience to drive synergies.
The Newark Facility Management acquisition was completed through the acquisition of all of the membership interests of certain limited liability companies. The acquisition allowed goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis; therefore, the Company recorded no deferred taxes for tax deductible goodwill as a result. Deductible goodwill will be available to reduce taxable income at both the REIT and potentially the domestic TRS. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. The estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
Acquisition of Lago Cold Stores
The Company expects to complete the acquisition of Australia-based Lago Cold Stores in November 2021 for approximately A100.8 million.
Acquisitions Completed During 2020
Acquisition of AM-C Warehouses
The Company completed the acquisition of privately-held AM-C Warehouses on August 31, 2020 for total cash consideration of $82.7 million. The acquisition accounting was finalized within one year from the date of acquisition. The financial results of the acquired operations are included in the Warehouse segment since the date of the acquisition. The adjustments recorded during the measurement period did not have a significant impact on our Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2021.
Acquisition of Hall’s Warehouses
The Company completed the acquisition of Hall’s Warehouses on November 2, 2020 for total cash consideration of $489.2 million, including cash received of $7.9 million. A summary of the preliminary fair values of the assets acquired and liabilities assumed and the measurement period adjustments recorded during the nine months ended September 30, 2021 is as follows (in thousands):
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Notes to Condensed Consolidated Financial Statements - (Unaudited)

|  | Initial Amounts Recognized as of the Acquisition Date |  | Measurement Period Adjustments |  | Preliminary Amounts Recognized as of the Acquisition Date (as Adjusted) |  |
Assets |  |  |  |  |  |  |  |
Land |  | $ | 29,352 |  |  | $ | 3,208 |  |  | $ | 32,560 |  |  |
Buildings and improvements |  | 239,708 |  |  | (87,428) |  |  | 152,280 |  |  |
Machinery and equipment |  | 63,596 |  |  | (38,248) |  |  | 25,348 |  |  |
Assets under construction |  | — |  |  | 41 |  |  | 41 |  |  |
Operating lease right-of-use assets |  | 26,400 |  |  | 739 |  |  | 27,139 |  |  |
Cash and cash equivalents |  | 7,894 |  |  | — |  |  | 7,894 |  |  |
Accounts receivable |  | 11,894 |  |  | — |  |  | 11,894 |  |  |
Goodwill |  | 42,737 |  |  | 130,249 |  |  | 172,986 |  |  |
Acquired identifiable intangibles: |  |  |  |  |  |  |  |
Customer relationships |  | 102,732 |  |  | 1,268 |  |  | 104,000 |  |  |
Other assets |  | 303 |  |  | — |  |  | 303 |  |  |
Total assets |  | 524,616 |  |  | 9,829 |  |  | 534,445 |  |  |
Liabilities |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | 4,006 |  |  | 2,117 |  |  | 6,123 |  |  |
Operating lease obligations |  | 26,400 |  |  | (661) |  |  | 25,739 |  |  |
Deferred tax liability |  | 5,012 |  |  | 8,373 |  |  | 13,385 |  |  |
Total liabilities |  | 35,418 |  |  | 9,829 |  |  | 45,247 |  |  |
Total consideration for the Hall’s acquisition |  | $ | 489,198 |  |  | $ | — |  |  | $ | 489,198 |  |  |

During the third quarter of 2021, we continued to refine the initial estimates and assumptions included in the valuation studies, including appraisals, necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, and the amount of goodwill to be recognized as of the acquisition date. These valuation studies are preliminary and we are continuing to review the inputs used, assumptions made and the underlying cash flows used to determine the fair value of the identified tangible and intangible assets. The initial preliminary acquisition accounting was based upon management’s estimates and assumptions, as well as other information compiled by management, including the books and records of Hall’s. The measurement period adjustments recorded during the nine months ended September 30, 2021 resulted from changes in fair values based on the drafts of the third-party valuations received. The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment. Any potential adjustments made could be material in relation to the values presented in the table above. The primary areas of the preliminary acquisition accounting that are not yet finalized relate to the following: (i) finalizing the review and valuation of land, land improvements, building and machinery and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, (ii) finalizing the review and valuation of customer related intangible assets (including key assumptions, inputs and estimates), (iii) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period, (iv) finalizing our review of certain assets acquired and liabilities assumed, (v) finalizing the evaluation and valuation of certain legal matters and/or other loss contingencies, including those that we may not yet be aware of but meet the requirement to quality as a pre-acquisition contingency, and (vi) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the acquisition accounting is based on our
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Notes to Condensed Consolidated Financial Statements - (Unaudited)
preliminary assessments and draft valuations, actual values may differ (possibly materially) when final information becomes available that differs from our current estimates. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
The customer relationship intangible asset has been assigned a preliminary useful life of 25 years and will be amortized on a straight-line basis. The goodwill recorded is primarily attributable to the strategic benefits of the acquisition including the expanded presence in the New Jersey market. The financial results of the acquired operations are included in the Warehouse and Transportation segments since the date of the acquisition. This transaction will allow us to grow our market share with key customers while diversifying our overall customer base. All of the acquired facilities are located within 15 miles of each other and 30 miles of Newark Port. The Hall’s acquisition was completed through the acquisition of the outstanding stock of certain Hall’s entities and the direct purchase of real estate assets from the sellers. The acquisition allowed a portion of the goodwill recorded to be deductible for federal income tax purposes. Deductible goodwill will be available to reduce taxable income at both the REIT and potentially the domestic TRS.
Acquisition of Agro
The Company completed the acquisition of Agro on December 30, 2020 for total consideration of $1.59 billion, including cash received of $47.5 million. This was comprised of cash consideration totaling $1.08 billion, of which $49.7 million was deferred, and the issuance of 14,166,667 common shares of beneficial interest to Oaktree, with a fair value of $512.1 million based upon the closing share price on December 29, 2020 of $36.15. Financing lease and sale-leaseback obligations associated with the acquisition totaled $105.4 million, as indicated in the table below, and when added to the total consideration transferred brings the total transaction cost to approximately $1.7 billion. A summary of the preliminary fair values of the assets acquired and liabilities assumed and the measurement period adjustments recorded during the nine months ended September 30, 2021 is as follows (in thousands):
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Notes to Condensed Consolidated Financial Statements - (Unaudited)

|  | Initial Amounts Recognized as of the Acquisition Date |  | Measurement Period Adjustments |  | Preliminary Amounts Recognized as of the Acquisition Date (as Adjusted)
Assets |  |  |  |  |  |
Land |  | $ | 95,286 |  |  | $ | 56,749 |  |  | $ | 152,035 |
Building and improvements |  | 778,170 |  | (132,809) |  |  | 645,361
Machinery and equipment |  | 206,453 |  | 21,487 |  |  | 227,940
Assets under construction |  | — |  |  | 15,416 |  |  | 15,416
Operating lease right-of-use assets |  | 191,229 |  | 12,552 |  |  | 203,781
Financing lease asset |  | 46,845 |  | (14,531) |  |  | 32,314
Cash and cash equivalents |  | 47,534 |  | — |  |  | 47,534
Accounts receivable |  | 78,423 |  | (1,132) |  |  | 77,291
Goodwill |  | 346,673 |  | 57,550 |  |  | 404,223
Acquired identifiable intangibles: |  |  |  |  |  |
Customer relationships |  | 333,501 |  | (58,357) |  |  | 275,144
Investment in partially owned entities |  | 21,638 |  | (9,738) |  |  | 11,900
Other assets |  | 20,038 |  | 7,219 |  |  | 27,257
Total assets |  | 2,165,790 |  |  | (45,594) |  |  | 2,120,196 |
Liabilities |  |  |  |  |  |
Accounts payable and accrued expenses |  | 90,860 |  | 14,397 |  |  | 105,257
Operating lease obligations |  | 191,229 |  | 2,688 |  |  | 193,917
Financing lease obligations |  | 46,845 |  | (14,531) |  |  | 32,314
Sale-leaseback obligations |  | 73,075 |  | — |  |  | 73,075
Deferred tax liability |  | 175,719 |  | (49,385) |  |  | 126,334 |
Total liabilities |  | 577,728 |  |  | (46,831) |  |  | 530,897 |
Total consideration for the Agro acquisition |  | $ | 1,588,062 |  |  | $ | 1,237 |  |  | $ | 1,589,299 |

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Notes to Condensed Consolidated Financial Statements - (Unaudited)
During the third quarter of 2021, we continued to refine the estimates and assumptions included in the valuation studies, including appraisals, necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, and the amount of goodwill to be recognized as of the acquisition date. These valuation studies are preliminary and we are continuing to review the inputs used, assumptions made and the underlying cash flows used to determine the fair value of the identified tangible and intangible assets. The initial preliminary acquisition accounting was based upon management’s estimates and assumptions, as well as other information compiled by management, including information from prior valuations of similar entities and the books and records of Agro. The measurement period adjustments recorded during the nine months ended September 30, 2021 resulted from changes in fair values based on the drafts of the third-party valuations received. The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment. Any potential adjustments made could be material in relation to the values presented in the table above. The primary areas of the acquisition accounting that are not yet finalized relate to the following: (i) finalizing the review and valuation of land, land improvements, building and machinery and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, (ii) finalizing the review and valuation of customer related intangible assets (including key assumptions, inputs and estimates), (iii) finalizing our review of certain assets acquired and liabilities assumed, (iv) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period, (v) finalizing the evaluation and valuation of certain legal matters and/or other loss contingencies, including those that we may not yet be aware of but meet the requirement to quality as a pre-acquisition contingency, and (vi) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the acquisition accounting is based on our preliminary assessments and draft valuations, actual values may differ (possibly materially) when final information becomes available. Additionally, the total consideration transferred is subject to certain post-close adjustments. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805.
As shown above, the Company recorded approximately $404.2 million of goodwill related to the Agro Acquisition. Strategic benefits of the acquisition include: (i) establishing a strategic footprint in Europe, which enhances its ability to serve their multinational customers on a global scale, (ii) adding depth to the existing networks in North America, Australia and South America, and (iii) providing significant growth opportunities through potential future acquisitions, given Europe's fragmented temperature controlled storage industry. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The Agro Acquisition was completed through the acquisition of stock of various Agro entities in the U.S. and foreign jurisdictions; as a result, no tax basis exists in each of these jurisdictions for tax purposes, except for minimal tax basis that existed prior to the acquisition. We expect that the goodwill will be assigned to the Warehouse and Transportation segments during the measurement period. The Company’s deemed asset elections for the foreign operations under IRC section 338 will reduce the US income taxability of future foreign profits under the GILTI regime.
Also shown above, in connection with the Agro Acquisition the Company recorded an intangible asset of approximately $275.1 million for customer relationships which has been assigned a preliminary useful life of 25 years and will be amortized on a straight-line basis. Based on the discussion under goodwill above, the Agro Acquisition resulted in federal income tax deductibility for a minimal portion of the intangible assets. The deductible intangible assets will be available to reduce taxable income for the REIT and reduce any GILTI inclusion in the US associated with foreign entities acquired.
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Notes to Condensed Consolidated Financial Statements - (Unaudited)
The Agro acquisition included an assumption of the 65% majority ownership of Frigorifico, a joint venture in Chile. On June 1, 2021, the Company purchased the remaining 35% minority shareholders portion of Frigorifico for $16.0 million.
Pro Forma Consolidated Results (Unaudited)
The following table presents the unaudited pro forma financial results as if the 2020 acquisition of Agro had occurred on January 1, 2020. The pro forma adjustments primarily relate to depreciation expense on acquired assets, amortization of acquired intangibles, and estimated interest expense related to financing transactions, the proceeds of which were used to partially fund the acquisition of Agro.
The accompanying unaudited pro forma consolidated financial statements exclude the results of the AM-C, Bowman Stores, ColdCo, Halls, KMT Brrr!, Lanier, Liberty Freezers and Newark Facility Management acquisitions, which were deemed immaterial individually and in the aggregate based on quantitative and qualitative considerations. Additionally, the Company has not presented pro forma combined results of operations for the acquisitions of Nova Cold and Newport, because the results of operations as reported in the accompanying Condensed Consolidated Statements of Operations would not have been materially different. These statements are provided for illustrative purposes only and do not purport to represent what the actual Consolidated Statements of Operations of the Company would have been had the Agro acquisition occurred on the dates assumed, nor are they necessarily indicative of what the results of operations would be for any future periods.

Pro forma (unaudited)
(in thousands, except per share data)
| Three Months Ended |  | Nine Months Ended
| September 30, 2020
Total revenue | $ | 643,195 |  |  | $ | 1,859,384 |
Net (loss) income attributable to Americold Realty Trust | $ | (3,264) |  |  | $ | 28,247 |
Net (loss) income per share, diluted(1) | $ | (0.01) |  |  | $ | 0.11 |

(1)Adjusted to give effect to the issuance of 46.1 million common shares in connection with the Agro Acquisition.
Total revenues of approximately $140.9 million and $256.9 million and net loss of approximately $11.1 million and $23.6 million associated with properties and operations acquired in the Agro Acquisition are included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2021, respectively. The revenues and net income associated with properties and operations acquired in the Agro Acquisition included in the Consolidated Statements of Operations for the year ended December 31, 2020 was immaterial as the acquisition closed on December 30, 2020.
4. Investment in Partially Owned Entities
Superfrio Joint Venture
During the first quarter of 2020, the Company purchased a 14.99% equity interest in a joint venture with Superfrio Armazéns Gerais S.A. (“SuperFrio”) for Brazil reals of 117.8 million. Including certain transaction costs, the Company recorded an initial investment of USD $25.7 million in the joint venture.
During the first quarter of 2021, the Company contributed an additional R$9.3 million (or $1.6 million USD) in capital to the SuperFrio joint venture. Additionally, during the second quarter of 2021, the Company contributed
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Notes to Condensed Consolidated Financial Statements - (Unaudited)
an additional R$24.1 million (or $4.6 million USD) in capital to the SuperFrio joint venture. The capital calls from SuperFrio were issued to each owner based on their ownership percentage, therefore, the Company’s ownership percentage remains unchanged.
SuperFrio is a Brazilian-based company that provides temperature-controlled storage and logistics services including storage, warehouse services, and transportation. The debt of the unconsolidated joint venture is non-recourse to us, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations.
Comfrio Joint Venture
As a result of the Agro acquisition which closed on December 30, 2020, the Company acquired Agro’s 22.12% share of ownership in Agrofundo Brazil II Fundode Investimento em Participações (“FIP”) or the “Comfrio” joint venture. The FIP owns all the issued and outstanding shares of common stock of Agro Improvement Participações S.A. (“Agro Improvement”), a sociedade anônima, duly organized and existing under the laws of Brazil. The Company has a call right that enables it to purchase all the issued and outstanding shares of Agro Improvement starting on January 1, 2019 through January 7, 2023. The FIP has a put right that requires the Company when exercised to purchase from it all the issued and outstanding shares of Agro Improvement starting on July 1, 2019 through January 7, 2023. On September 29, 2021, the FIP exercised its put right. The parties are in dispute over the value of the put which ranges from $14.0 million to $77.0 million, and therefore have entered into arbitration over the matter.
As of September 30, 2021, our investment in partially owned entities accounted for under the equity method of accounting presented in our Condensed Consolidated Balance Sheet consists of the following (in thousands):

Joint Venture |  | Location |  | % Ownership |  | September 30, 2021
Superfrio |  | Brazil |  | 14.99% |  | $28,489
Comfrio |  | Brazil |  | 22.12% |  | $10,082

5. 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 September 30, |  | Nine Months Ended September 30,
Acquisition, litigation and other, net | 2021 |  | 2020 |  | 2021 |  | 2020
Acquisition and integration related costs | $ | 6,301 |  |  | $ | 4,861 |  |  | $ | 22,851 |  |  | $ | 8,278 |
Litigation | 825 |  |  | 258 |  |  | 942 |  |  | 258 |
Severance costs | 149 |  |  | (50) |  |  | 2,850 |  |  | 1,022 |
Terminated site operations costs | 6 |  |  | (520) |  |  | 78 |  |  | (520) |
Cyber incident related costs, net of insurance recoveries | (943) |  |  | — |  |  | 3,539 |  |  | — |
Other | — |  |  | 733 |  |  | 751 |  |  | 733 |
Total acquisition, litigation and other, net | $ | 6,338 |  |  | $ | 5,282 |  |  | $ | 31,011 |  |  | $ | 9,771 |

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Notes to Condensed Consolidated Financial Statements - (Unaudited)
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 for further information regarding acquisitions completed during 2021 and 2020.
Severance costs represent certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies and reduction in workforce costs associated with exiting or selling non-strategic warehouses or businesses.
Terminated site operations costs relates to repair expenses incurred to return leased sites to their original physical state at lease inception in connection with the termination of the applicable underlying lease. These terminations were part of our strategic efforts to exit or sell non-strategic warehouses as opposed to ordinary course lease expirations. Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our Condensed Consolidated Statement of Operations.
Cyber incident related costs include third-party fees incurred in connection with the cyber incident that occurred in November 2020, as well as any incremental costs, internal and external, incurred to restore operations at our facilities and damage claims. Any subsequent reimbursements from insurance coverage for expenses incurred in connection with the event are also reflected within this category.
Other costs represent the deductibles incurred for various other insurance claims. Any subsequent reimbursements from insurance coverage for expenses incurred in connection with the claims are also reflected within this category.
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6. Debt
The Company’s outstanding indebtedness as of September 30, 2021 and December 31, 2020 was as follows (in thousands):

|  |  |  | September 30, 2021 | December 31, 2020
Indebtedness | Stated Maturity Date | Contractual Interest Rate | Effective Interest Rate as of September 30, 2021 | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value
2013 Mortgage Loans |  |  |  |  |
Senior note | 5/2023 | 3.81% | 4.14% | $ | 169,415 |  | $ | 174,497 |  | $ | 174,693 |  | $ | 180,807 |
Mezzanine A | 5/2023 | 7.38% | 7.55% | 70,000 |  | 71,750 |  | 70,000 |  | 71,925 |
Mezzanine B | 5/2023 | 11.50% | 11.75% | 32,000 |  | 32,880 |  | 32,000 |  | 33,040 |
Total 2013 Mortgage Loans |  |  |  | 271,415 |  | 279,127 |  | 276,693 |  | 285,772 |
Senior Unsecured Notes |  |  |  |  |  |  |
Series A notes | 1/2026 | 4.68% | 4.77% | 200,000 |  | 220,500 |  | 200,000 |  | 231,000 |
Series B notes | 1/2029 | 4.86% | 4.92% | 400,000 |  | 455,000 |  | 400,000 |  | 475,000 |
Series C notes | 1/2030 | 4.10% | 4.15% | 350,000 |  | 385,000 |  | 350,000 |  | 400,750 |
Series D notes(5) | 1/2031 | 1.62% | 1.67% | 463,200 |  | 454,515 |  | 488,640 |  | 488,640 |
Series E notes(6) | 1/2033 | 1.65% | 1.70% | 405,300 |  | 399,727 |  | 427,560 |  | 427,560 |
Total Senior Unsecured Notes |  |  |  | 1,818,500 |  | 1,914,742 |  | 1,866,200 |  | 2,022,950 |
2020 Senior Unsecured Term Loan Tranche A-1(1) | 3/2025 | L+0.95% | 1.41% | 125,000 |  | 124,063 |  | 325,000 |  | 323,375 |
2020 Senior Unsecured Term Loan Tranche A-2(2)(4) | 3/2025 | C+0.95% | 1.51% | 197,124 |  | 195,646 |  | 196,325 |  | 195,343 |
Total 2020 Senior Unsecured Term Loan A Facility |  | 322,124 |  | 319,709 |  | 521,325 |  | 518,718 |
2020 Senior Unsecured Revolving Credit Facility-1(2)(3)(7) | 3/2024 | C+0.85% | 1.91% | 43,368 |  | 43,260 |  | — |  | — |
2020 Senior Unsecured Revolving Credit Facility-2(3)(8)(9) | 3/2024 | SONIA+0.85% | 1.53% | 92,296 |  | 92,065 |  | — |  | — |
2020 Senior Unsecured Revolving Credit Facility-3(1)(3) | 3/2024 | L+0.85% | 1.56% | 170,000 |  | 169,575 |  | — |  | — |
Total 2020 Senior Unsecured Revolving Credit Facility | $ | 305,664 |  | $ | 304,900 |  | $ | — |  | $ | — |
Total principal amount of indebtedness | $ | 2,717,703 |  | $ | 2,818,478 |  | $ | 2,664,218 |  | $ | 2,827,440 |
Less: unamortized deferred financing costs |  |  |  | (11,446) |  | n/a | (15,952) |  | n/a
Total indebtedness, net of unamortized deferred financing costs | $ | 2,706,257 |  | $ | 2,818,478 |  | $ | 2,648,266 |  | $ | 2,827,440 |

(1) L = one-month LIBOR.
(2) C = one-month CDOR.
(3) The Company has the option to extend the 2020 Senior Unsecured Revolving Credit Facility up to two times for a six-month period each.
(4) The 2020 Senior Unsecured Term Loan Tranche A-2 is denominated in Canadian dollars and aggregates to CAD $250.0 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2021.
(5) The Senior Unsecured Notes Series D is denominated in Euros and aggregates to €400.0 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2021.
(6) The Senior Unsecured Notes Series E is denominated in Euros and aggregates to €350.0 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2021.
(7) The Senior Unsecured Revolving Credit Facility Draw 1 as of September 30, 2021, is denominated in CAD and aggregates to CAD $55.0 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2021.
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(8) The Senior Unsecured Revolving Credit Facility Draw 2 as of September 30, 2021, is denominated in GBP and aggregates to GBP $68.5 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2021.
(9) SONIA = Sterling Overnight Interbank Average Rate.
There have been no new debt agreements entered into during 2021. However, on January 29, 2021, we executed an amendment to our existing Senior Unsecured Revolving Credit Facility which expanded our revolving credit facility borrowing capacity by $200 million to $1 billion. Other terms associated with the credit facility, such as the interest rate, fees, and maturity, remained unchanged. In tandem with the amendment, we repaid $200 million of our Term Loan A Tranche A-1 facility. Refer to our 2020 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 September 30, 2021, 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.
7. Derivative Financial Instruments
Designated Nonderivative Financial Instruments
As of September 30, 2021, the Company has designated €750 million debt and accrued interest as a hedge of our net investment in the international subsidiaries resulting from the Agro Acquisition. The remeasurement of these instruments is recorded in “Change in unrealized net gain (loss) on foreign currency” on the accompanying Condensed Consolidated Statements of Comprehensive Income.
Derivative Financial Instruments
There have been no significant changes to our policy or strategy from what was disclosed in our 2020 Form 10-K. Additionally, during the next twelve months, the Company estimates that an additional $2.5 million will be reclassified as an increase to “Loss on debt extinguishment, modification, and termination of derivative instruments”. During the next twelve months, the Company estimates that an additional $0.1 million will be reclassified as an increase to gain/loss on foreign exchange as of September 30, 2021.
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The Company determines the fair value of these derivative instruments using a present value calculation with significant observable inputs classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the Condensed Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the Condensed Consolidated Balance Sheets within “Accounts payable and accrued expenses”. The following table illustrates the disclosure in tabular format of fair value amounts of derivative instruments at September 30, 2021 and December 31, 2020 (in thousands):

|  | Derivative Assets |  |  | Derivative Liabilities |  |
|  | September 30, 2021 |  |  | December 31, 2020 |  |  | September 30, 2021 |  |  | December 31, 2020 |  |  |  |
Designated derivatives |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 605 |  |  |  | $ | — |  |  |  | $ | 100 |  |  |  | $ | 9,611 |  |  |  |  |
Total derivatives | $ | 605 |  |  |  | $ | — |  |  |  | $ | 100 |  |  |  | $ | 9,611 |  |  |  |  |

The following table presents the effect of the Company’s derivative financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020, including the impacts to Accumulated Other Comprehensive Income (AOCI) (in thousands):

| Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
| Three Months Ended September 30, |  |  | Three Months Ended September 30,
| 2021 |  | 2020 |  |  | 2021 |  | 2020
Interest rate contracts | $ | — |  |  | $ | 1,099 |  |  | Interest expense |  | $ | — |  |  | $ | (1,243) |
Interest rate contracts | — |  |  | — |  |  | Loss on debt extinguishment, modifications and termination of derivative instruments(1) |  | (627) |  |  | — |
Foreign exchange contracts | 5,094 |  |  | (7,196) |  |  | Other, net |  | 5,477 |  |  | (3,807) |
Foreign exchange contracts | — |  |  | — |  |  | Interest expense |  | (3) |  |  | (43) |
Total designated cash flow hedges | $ | 5,094 |  |  | $ | (6,097) |  |  |  |  | $ | 4,847 |  |  | $ | (5,093) |

(1) In conjunction with the termination of the interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. As of September 30, 2021, the Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction.
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| Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
| Nine Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  |  | 2021 |  | 2020
Interest rate contracts | $ | — |  |  | $ | (16,895) |  |  | Interest expense |  | $ | — |  |  | $ | (2,181) |
Interest rate contracts | — |  |  | — |  |  | Loss on debt extinguishment, modifications and termination of derivative instruments(1) |  | (2,055) |  |  | — |
Foreign exchange contracts | 10,116 |  |  | 1,168 |  |  | Other, net |  | 9,436 |  |  | 77 |
Foreign exchange contracts | — |  |  | — |  |  | Interest expense |  | (142) |  |  | 164 |
Foreign exchange forwards | — |  |  | 5,250 |  |  |  |  |  |  |
Total designated cash flow hedges | $ | 10,116 |  |  | $ | (10,477) |  |  |  |  | $ | 7,239 |  |  | $ | (1,940) |

(1) In conjunction with the termination of the interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. As of September 30, 2021, the Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction.
Interest expense recorded in the accompanying Condensed Consolidated Statements of Operations was $25.3 million and $23.1 million during the three months ended September 30, 2021 and 2020, respectively, and $77.8 million and $70.1 million during the nine months ended September 30, 2021 and 2020, respectively. The Company recorded total Other, net in its Condensed Consolidated Statements of Operations of $0.5 million and $1.2 million for the three months ended September 30, 2021 and 2020, respectively, and $0.1 million and $0.2 million for the nine months ended September 30, 2021 and 2020, respectively.
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2021 and December 31, 2020. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying Condensed Consolidated Balance Sheets (in thousands):
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September 30, 2021
Offsetting of Derivative Assets |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet |  |
| Gross Amounts of Recognized Assets |  | Gross Amounts Offset in the Condensed Consolidated Balance Sheet |  | Net Amounts of Assets presented in the Condensed Consolidated Balance Sheet |  | Financial Instruments |  | Cash Collateral Received |  | Net Amount
Derivatives | $ | 605 |  |  | $ | — |  |  | $ | 605 |  |  | $ | (100) |  |  | $ | — |  |  | $ | 505 |
Offsetting of Derivative Liabilities |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet |  |
| Gross Amounts of Recognized Liabilities |  | Gross Amounts Offset in the Condensed Consolidated Balance Sheet |  | Net Amounts of Liabilities presented in the Condensed Consolidated Balance Sheet |  | Financial Instruments |  | Cash Collateral Received |  | Net Amount
Derivatives | $ | (100) |  |  | $ | — |  |  | $ | (100) |  |  | $ | 100 |  |  | $ | — |  |  | $ | — |

December 31, 2020
Offsetting of Derivative Assets |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet |  |
| Gross Amounts of Recognized Assets |  | Gross Amounts Offset in the Condensed Consolidated Balance Sheet |  | Net Amounts of Assets presented in the Condensed Consolidated Balance Sheet |  | Financial Instruments |  | Cash Collateral Received |  | Net Amount
Derivatives | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Offsetting of Derivative Liabilities |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet |  |
| Gross Amounts of Recognized Liabilities |  | Gross Amounts Offset in the Condensed Consolidated Balance Sheet |  | Net Amounts of Liabilities presented in the Condensed Consolidated Balance Sheet |  | Financial Instruments |  | Cash Collateral Received |  | Net Amount
Derivatives | $ | 9,611 |  |  | $ | — |  |  | $ | 9,611 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,611 |

As of September 30, 2021, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0.2 million. As of September 30, 2021, the Company has not posted any collateral related to these agreements.
The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. In addition, termination events such
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as the Company’s credit agreement not being secured, or not being guaranteed pursuant to the Company, could cause the Company to be in default on its derivative obligations. The Company has not defaulted on any of its derivative obligations.
If the Company had breached any of these provisions at September 30, 2021, it could have been required to settle its obligations under the agreements at their termination value of $0.2 million.
Refer to Note 15 for additional details regarding the impact of the Company’s derivatives on AOCI for the three and nine months ended September 30, 2021 and 2020, respectively.
8. Sale-Leasebacks of Real Estate
The Company’s outstanding sale-leaseback financing obligations of real estate-related long-lived assets as of September 30, 2021 and December 31, 2020 are as follows:

| Maturity |  | Interest Rate as of September 30, 2021 | September 30, 2021 |  | December 31, 2020
|  |  |  | (In thousands)
1 warehouse – 2010 | 7/2030 |  | 10.34% | $ | 18,305 |  |  | 18,669 |
11 warehouses – 2007 | 9/2027 |  | 7.00%-19.59% | 90,437 |  |  | 93,316 |
3 facilities – 2007 (Agro) | 7/2031 |  | 10% | 68,298 |  |  | 67,229 |
1 facility – 2013 (Agro) | 12/2033 |  | 10% | 5,939 |  |  | 5,846 |
Total sale-leaseback financing obligations | $ | 182,979 |  |  | $ | 185,060 |

9. Fair Value Measurements
The Company categorizes assets and liabilities that are recorded at fair values into one of three tiers based upon fair value hierarchy. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and revolving line of credit approximate their fair values due to the short-term maturities of the instruments.
The Company’s 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.
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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 September 30, 2021 and December 31, 2020, 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 |  | September 30, 2021 |  | December 31, 2020
|  |  | (In thousands)
Measured at fair value on a recurring basis: |  |  |  |  |
Cross-currency swap asset | Level 2 |  | $ | 605 |  |  | $ | — |
Cross-currency swap liability | Level 2 |  | $ | 100 |  |  | $ | 9,611 |
Disclosed at fair value: |  |  |  |  |
Mortgage notes, senior unsecured notes and term loans(1) | Level 3 |  | $ | 2,818,478 |  |  | $ | 2,827,440 |

(1)The carrying value of mortgage notes, senior unsecured notes and term loans is disclosed in Note 6.
10. Dividends and Distributions
In order to comply with the REIT requirements of the Internal Revenue Code, or the Code, the Company is generally required to make common share distributions (other than capital gain distributions) to its shareholders at least equal to 90% of its REIT taxable income, as defined in the Code, computed without regard to the dividends paid deduction and net capital gains. The Company’s common share dividend policy is to distribute a percentage of cash flow to ensure distribution requirements of the IRS are met while allowing the Company to retain cash to meet other needs, such as principal amortization, capital improvements and other investment activities.
Common share dividends are characterized for U.S. federal income tax purposes as ordinary income, qualified dividend, capital gains, non-taxable income return of capital, or a combination of the four. Common share
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dividends that exceed current and accumulated earnings and profits (calculated for tax purposes) constitute a return of capital rather than a dividend and generally reduce the shareholder’s basis in the common share. At the beginning of each year, we notify our shareholders of the taxability of the common share dividends paid during the preceding year. The payment of common share dividends is dependent upon our financial condition, operating results, and REIT distribution requirements and may be adjusted at the discretion of the Company’s Board of Trustees.
The following tables summarize dividends and distributions declared and paid to the holders of common shares, restricted stock and OP units for the nine months ended September 30, 2021 and 2020.

Nine Months Ended September 30, 2021
Month Declared/Paid | Distribution Per Share | Distributions Declared |  | Distributions Paid |  |
(In thousands, except per share amounts)
December (2020)/January | $ | 0.21 |  | $ | — |  |  | $ | 53,820 |  |  |
December(a) |  | — |  |  | (693) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
December (2020)/January |  | — |  |  | 6 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
December (2020)/January(b) |  | — |  |  | 1,823 |  | Dividend equivalents paid on vested restricted stock units related to the market performance-based awards granted in 2018.
March/April | 0.22 |  | 56,029 |  |  | 56,029 |  |  |
March(c) |  | — |  |  | (179) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
March/April |  | — |  |  | 7 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
May/July | 0.22 |  | 57,897 |  |  | 57,897 |  |  |
May (d) |  |  |  | (178) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
May/July |  |  |  | 6 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
August/October | $ | 0.22 |  | 59,026 |  |  | — |  |  |
|  | $ | 172,952 |  |  | $ | 168,538 |  |  |

(a)Declared in December 2020 and included in the $53.8 million declared, see description to the right regarding timing of payment.
(b)Dividend equivalents accrued related to the market performance-based awards granted in 2018 paid in January following award vesting date of January 8, 2021.
(c)Declared in March and included in the $56.0 million declared, see description to the right regarding timing of payment.
(d)Declared in May and included in the $57.9 million declared, see description to the right regarding timing of payment.
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Nine Months Ended September 30, 2020
Month Declared/Paid | Dividend Per Share | Distributions Declared |  | Distributions Paid |  |
(In thousands, except per share amounts)
December (2019)/January | $ | 0.20 |  | $ | — |  |  | $ | 38,796 |  |  |
December(a) |  | — |  |  | (169) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
December (2019)/January |  | — |  |  | 4 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
March/April | 0.21 |  | 42,568 |  |  | 42,568 |  |
March(b) |  | — |  |  | (233) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
March/April |  | — |  |  | 10 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
May/July | 0.21 |  | 43,271 |  |  | 43,271 |  |  |
May(c) |  | — |  |  | (232) |  | Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest.
May/July |  | — |  |  | 10 |  | Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation).
September/October | 0.21 |  | 43,282 |  |  | — |  |  |
|  | $ | 129,121 |  |  | $ | 124,025 |  |  |

(a)Declared in December 2019 and included in the $38.8 million declared, see description to the right regarding timing of payment.
(b)Declared in March and included in the $42.6 million declared, see description to the right regarding timing of payment.
(c)Declared in May and included in the $43.3 million declared, see description to the right regarding timing of payment.
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11. Share-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 2020 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. Under the ESPP, eligible employees are granted options to purchase common shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about January 1 and July 1, and exercisable on or about the succeeding July 1, and January 1, respectively, of each year. No participant may purchase more than $25,000 worth of common shares in a six-month offering period, or a maximum of 2,400 common shares. There are 5,000,000 common shares available for issuance under the 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. ESPP assumptions and the related fair value per share table are disclosed in the three month period in which there is ESPP activity, such as an ESPP purchase. The ESPP did not have a material impact on share-based compensation expense during the three and nine months ended September 30, 2021.
Aggregate share-based compensation charges were $4.3 million and $4.6 million during the three months ended September 30, 2021 and 2020, respectively, and $14.8 million and $13.3 million during the nine months ended September 30, 2021 and 2020, 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 September 30, 2021, there was $24.5 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 1.8 years. As of September 30, 2021 and December 31, 2020, the Company accrued $1.4 million and $2.5 million, respectively, of dividend equivalents on unvested units payable to associates and trustees.
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.
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The following table summarizes restricted stock unit grants under the 2017 Plan during the nine months ended September 30, 2021 and 2020, respectively:

Nine Months Ended September 30, | Grantee Type | Number of Restricted Stock Units Granted | Vesting Period | Grant Date Fair Value (in thousands)
2021 | Trustees | 6,616 | 1 year | $ | 250 |
2021 | Associates | 321,150 | 1-3 years | $ | 10,792 |
2020 | Trustees | 8,517 | 1 year | $ | 300 |
2020 | Associates | 295,274 | 1-3 years | $ | 9,137 |

Of the restricted stock units granted for the nine months ended September 30, 2021, (i) 6,616 were time-based restricted stock units with a one year vesting period issued to non-employee trustees as part of their annual compensation, (ii) 212,369 were 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 were 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 Americold Realty Trust’s 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.
Of the restricted stock units granted for the nine months ended September 30, 2020, (i) 8,517 were time-based restricted stock units with a one year vesting period issued to non-employee trustees as part of their annual compensation, (ii) 186,464 were time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain associates and (iii) 108,810 were 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 Americold Realty Trust’s total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2020 and will end December 31, 2022.
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%.
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The following table provides a summary of restricted stock awards activity under the 2010 and 2017 Plans during the nine months ended September 30, 2021:

Nine Months Ended September 30, 2021
Restricted Stock | Number of Time-Based Restricted Stock Units | Aggregate Intrinsic Value (in millions) | Number of Performance-Based Restricted Stock Units | Aggregate Intrinsic Value (in millions) | Number of Market Performance-Based Restricted Stock Units(2) | Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2020 | 563,224 |  | $ | 21.0 |  | 42,856 |  | $ | 1.6 |  | 873,581 |  | $ | 42.6 |
Granted | 218,985 |  |  | — |  |  | 108,781 |  |
Market-performance adjustment(3) | — |  |  | — |  |  | 266,531 |  |
Vested | (221,936) |  |  | (14,286) |  |  | (800,087) |  |
Forfeited | (64,415) |  |  | — |  |  | (69,716) |  |
Non-vested as of September 30, 2021 | 495,858 |  | $ | 13.8 |  | 28,570 |  | $ | 0.8 |  | 379,090 |  | $ | 10.5 |
Shares vested, but not released(1) | 615,643 |  | 17.9 |  | 42,858 |  | 1.2 |  | — |  | — |
Total outstanding restricted stock units | 1,111,501 |  | $ | 31.7 |  | 71,428 |  | $ | 2.0 |  | 379,090 |  | $ | 10.5 |

(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. Of these vested restricted stock units, 568,753 belong to a member of the Board of Trustees who has resigned and common shares shall not be issued until the first to occur: (1) change in control; or (2) April 13, 2022. Holders of these certain vested restricted stock units are entitled to receive dividends, but are not entitled to vote the shares until common shares are issued. The weighted average grant date fair value of these units is $9.38 per unit. During 2021 an additional 14,286 of these restricted stock units vested. Of the total restricted stock units vested, but not yet released, 615,643 time-based restricted stock units and 28,570 performance-based restricted stock units vested prior to January 1, 2020.
(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 increase 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 nine months ended September 30, 2021 was $33.69 per unit, for vested and converted restricted stock units was $18.18, for forfeited restricted stock units was $31.24. The weighted average grant date fair value of non-vested restricted stock units was $31.19 and $24.27 per unit as of September 30, 2021 and December 31, 2020, respectively.
OP Units Activity
The Trustees 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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The following table summarizes OP unit grants under the 2017 Plan during the nine months ended September 30, 2021 and September 30, 2020:

Nine Months Ended September 30, | Grantee Type | Number of OP Units Granted | Vesting Period | Grant Date Fair Value (in thousands)
2021 | Trustees | 17,863 | 1 year | $ | 675 |
2021 | Associates | 258,479 | 1-3 years | $ | 8,434 |
2020 | Trustees | 16,325 | 1 year | $ | 575 |
2020 | Associates | 255,720 | 1-3 years | $ | 7,719 |

The following table provides a summary of the OP unit awards activity under the 2017 Plan during the nine months ended September 30, 2021:

Nine Months Ended September 30, 2021
OP Units | Number of Time-Based OP Units | Aggregate Intrinsic Value (in millions) |  | Number of Market Performance-Based OP Units | Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2020 | 93,180 |  | $ | 3.5 |  |  | 178,865 |  | $ | 6.7 |
Granted | 78,335 |  |  |  | 198,007 |  |
Vested | (41,922) |  |  |  | — |  |
Forfeited | — |  |  |  | — |  |
Non-vested as of September 30, 2021 | 129,593 |  | $ | 3.8 |  |  | 376,872 |  | $ | 10.9 |
Shares vested, but not released | 59,121 |  | 1.7 |  |  | — |  | — |
Total outstanding OP units | 188,714 |  | $ | 5.5 |  |  | 376,872 |  | $ | 10.9 |

The OP units granted for the nine months ended September 30, 2021 had an aggregate grant date fair value of $9.1 million.
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Stock Options Activity
The following table provides a summary of option activity for the nine months ended September 30, 2021:

Options | Shares (In thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Terms (Years)
Outstanding as of December 31, 2020 | 465,498 |  | $ | 9.81 |  | 4.7
Granted | — |  | — |  |
Exercised | (199,200) |  | 9.81 |  |
Forfeited or expired | — |  | — |  |
Outstanding as of September 30, 2021 | 266,298 |  | 9.81 |  | 3.5
Exercisable as of September 30, 2021 | 190,300 |  | $ | 9.81 |  | 2.7

The total grant date fair value of stock option awards that vested during the nine months ended for both September 30, 2021 and 2020 was approximately $0.6 million and $0.6 million, respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2021 and 2020 was $3.8 million and $8.2 million, respectively.
12. Income Taxes
The Company’s effective tax rates for the three and nine months ended September 30, 2021 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 nine months ended September 30, 2021, the effective tax rates were impacted by: (1) earnings generated by our foreign operations that are primarily permanently reinvested, (2) a change to the statutory tax rate in the United Kingdom and (3) the release of valuation allowance as a result of increased deferred tax liabilities that provide a positive source of income for valuation allowance assessment purposes. The increase in deferred tax liabilities were recorded due to certain acquisitions’ measurement period adjustments. As a result, the overall income tax benefit increased by $1.0 million and decreased by $5.5 million for the three months and nine months ended September 30, 2021, respectively, compared to the same periods in the prior year.
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13. Employee Benefit Plans
The components of net period benefit cost for the three and nine months ended September 30, 2021 and 2020, respectively, are as follows:

| Three Months Ended September 30, 2021
| Retirement Income Plan | National Service-Related Pension Plan | Other Post-Retirement Benefits | Superannuation | Total
Components of net periodic benefit cost: | (In thousands)
Service cost | $ | — |  | $ | — |  | $ | — |  | $ | 15 |  | $ | 15 |
Interest cost | 236 |  | 234 |  | 2 |  | 5 |  | 477 |
Expected return on plan assets | (596) |  | (428) |  | — |  | (18) |  | (1,042) |
Amortization of net loss | 219 |  | 163 |  | — |  | — |  | 382 |
Amortization of prior service cost | — |  | — |  | — |  | 7 |  | 7 |
Net pension benefit cost | $ | (141) |  | $ | (31) |  | $ | 2 |  | $ | 9 |  | $ | (161) |

| Three Months Ended September 30, 2020
| Retirement Income Plan | National Service-Related Pension Plan | Other Post-Retirement Benefits | Superannuation | Total
Components of net periodic benefit cost: | (In thousands)
Service cost | $ | — |  | $ | — |  | $ | — |  | $ | 18 |  | $ | 18 |
Interest cost | 315 |  | 279 |  | 4 |  | 8 |  | 606 |
Expected return on plan assets | (500) |  | (366) |  | — |  | (20) |  | (886) |
Amortization of net loss | 255 |  | 152 |  | — |  | — |  | 407 |
Amortization of prior service cost | — |  | — |  | — |  | 7 |  | 7 |
Net pension benefit cost | $ | 70 |  | $ | 65 |  | $ | 4 |  | $ | 13 |  | $ | 152 |

| Nine Months Ended September 30, 2021
| Retirement Income Plan | National Service-Related Pension Plan | Other Post-Retirement Benefits | Superannuation | Total
Components of net periodic benefit cost: | (In thousands)
Service cost | $ | — |  | $ | — |  | $ | — |  | $ | 47 |  | $ | 47 |
Interest cost | 710 |  | 702 |  | 6 |  | 15 |  | 1,433 |
Expected return on plan assets | (1,788) |  | (1,282) |  | — |  | (56) |  | (3,126) |
Amortization of net loss | 655 |  | 489 |  | — |  | — |  | 1,144 |
Amortization of prior service cost | — |  | — |  | — |  | 22 |  | 22 |
Net pension benefit cost | $ | (423) |  | $ | (91) |  | $ | 6 |  | $ | 28 |  | $ | (480) |

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| Nine Months Ended September 30, 2020
| Retirement Income Plan | National Service-Related Pension Plan | Other Post-Retirement Benefits | Superannuation | Total
Components of net periodic benefit cost: | (In thousands)
Service cost | $ | — |  | $ | — |  | $ | — |  | $ | 46 |  | $ | 46 |
Interest cost | 946 |  | 838 |  | 11 |  | 20 |  | 1,815 |
Expected return on plan assets | (1,501) |  | (1,099) |  | — |  | (51) |  | (2,651) |
Amortization of net loss | 763 |  | 455 |  | — |  | — |  | 1,218 |
Amortization of prior service cost | — |  | — |  | — |  | 22 |  | 22 |
Net pension benefit cost | $ | 208 |  | $ | 194 |  | $ | 11 |  | $ | 37 |  | $ | 450 |

The service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Selling, general and administrative” and all other components of net period benefit cost are presented in “Other (expense) income, net” on the Condensed Consolidated Statements of Operations.
The Company has contributed to all plans $1.2 million through September 30, 2021. The actuaries who perform the annual valuation for the pension plans updated results due to favorable asset returns and determined no contributions will be necessary for the remainder of 2021.
Multi-Employer Plans
The Company contributes to a number of multi-employer benefit plans under the terms of collective bargaining agreements that cover union-represented employees. These plans generally provide for retirement, death, and/or termination benefits for eligible employees within the applicable collective bargaining units, based on specific eligibility/participation requirements, vesting periods, and benefit formulas.
The New England Teamsters & Trucking Industry Multi-Employer Fund (Fund) was significantly underfunded in accordance with Employee Retirement Income Security Act of 1974 (ERISA) funding standards and, therefore, ERISA required the Fund to develop a Rehabilitation Plan, creating a new fund that minimizes the pension withdrawal liability. As a result, current employers participating in the Fund were given the opportunity to exit the Fund and convert to a new fund. During the third quarter of 2017, the Company took the option to exit the Fund and convert to the new fund. The Company’s portion of the unfunded liability (undiscounted), estimated at $13.7 million, is being repaid in equal monthly installments of approximately $38,000 over 30 years, interest free. The Company recognized an expense and related liability equal to the present value of the withdrawal liability upon exiting the Fund, and amortizes the difference between such present value and the estimated unfunded liability through interest expense over the repayment period.
14. Commitments and Contingencies
Letters of Credit
As of September 30, 2021 and December 31, 2020, there were $22.3 million and $21.7 million, respectively, of letters of credit issued on the Company’s Senior Unsecured Revolving Credit Facility.
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Bonds
The Company had outstanding surety bonds of $12.8 million and $10.1 million as of September 30, 2021 and December 31, 2020, respectively. These bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.
Collective Bargaining Agreements
As of September 30, 2021, approximately 40% of the Company’s labor force is covered by collective bargaining agreements. Collective bargaining agreements covering less than 1% of the labor force are set to expire during the remaining three months ended December 31, 2021.
Legal Proceedings
In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and its legal counsel evaluate the merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency suggests that a loss is probable, and the amount can be reasonably estimated, then a loss is recorded.
In addition to the matters discussed below, the Company may be subject to litigation and claims arising from the ordinary course of business. In the opinion of management, after consultation with legal counsel, the outcome of such matters is not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows.
Kansas Breach of Settlement Agreement Litigation
This case was served against the Company in Wyandotte County, Kansas, on January 17, 2013, alleging breach of a 1994 Settlement Agreement reached with customers of our predecessor company, Americold Corporation. The plaintiffs originally brought claims in 1992 arising from a fire the previous year in an underground warehouse facility.
In 1994, a settlement was reached whereby Americold Corporation agreed to the entry of a $58.7 million judgment against it and assigned its rights to proceed against its insurer to satisfy the judgment. The settlement agreement contained a standard “cooperation provision” 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. Only one plaintiff appealed the dismissal to the U.S. Court of Appeals. The Court of Appeals ordered that the case be remanded to the Kansas State Court and the judgment in
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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. Regardless of the venue, the Company remains confident that its defenses on the merits of plaintiffs’ claims are strong under Kansas law.
Following remand to Kansas state court, plaintiffs initially petitioned the court to amend their complaint to drop their claim for damages and only seek an Order of Specific Performance requiring Americold to sign a new document reinstating the consent judgment assigned in the 1994 Settlement Agreement. Plaintiffs filed a later motion to add back the damages claim, which was granted in February 2018.
Since December 31, 2018, the court granted the Company’s motions to dismiss Kraft and Safeway from the case given they did not appeal the District Court’s Order dismissing their claims and are bound by the judgment entered against them. The Kraft and Safeway plaintiffs have appealed their dismissals. On October 22, 2021, the Kansas Court of Appeals reversed the trial court’s decision. The Company has 30 days to seek to appeal the Court of Appeals decision. The trial court has stayed the proceedings pending the appeal. In addition, the Company has sued the Chubb Group seeking the court’s declaration that Chubb owes coverage of the amounts sought by plaintiffs and for bad faith damages for denying coverage. Given the status of the proceedings to date, a liability amount cannot be reasonably estimated. The Company believes the ultimate outcome of this matter will not have a material adverse impact on its condensed consolidated financial statements.
Preferred Freezer Services, LLC Litigation
On February 11, 2019, Preferred Freezer Services, LLC (“PFS”) moved by Order to Show Cause in the Supreme Court of the State of New York, New York County, asserting breach of contract and other claims against the Company and seeking to preliminarily enjoin the Company from acting to acquire certain properties leased by PFS. In its complaint and request for preliminary injunctive relief, PFS alleged that the Company breached a confidentiality agreement entered into in connection with the Company’s participation in a bidding process for the sale of PFS by contacting PFS’s landlords and by using confidential PFS information in bidding for the properties leased by PFS (the “PFS Action”).
PFS’s request for a preliminary injunction was denied after oral argument on February 26, 2019. On March 1, 2019, PFS filed an application for interim injunctive relief from the Appellate Division of the Supreme Court, First Judicial Department.
On April 2, 2019, while its application to the First Department was pending, PFS voluntarily dismissed its state court action, and First Department application, and re-filed substantially the same claims against the Company in the U.S. District Court for the Southern District of New York. In addition to an order enjoining Americold from making offers to purchase the properties leased by PFS, PFS sought compensatory, consequential and/or punitive damages. The Company filed a motion to require PFS to reimburse the Company for its legal fees it incurred for the state court action before PFS is allowed to proceed in the federal court action. On February 18, 2020, the Court granted Americold’s request for an award of legal fees from PFS but declined to stay the case pending payment of that award. As to the amount of the award, the Company and PFS have entered into a 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.
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On June 25, 2020, Fenway Polar Representative (“Fenway”), an entity alleging to represent the interests of the former shareholders of PFS, filed a lawsuit in the Supreme Court of the State of New York, New York County alleging based on similar factual allegations made in the PFS Action it is seeking damages in excess of $400 million due to the Company’s alleged fraudulent and tortious interference in the sale of PFS (the “Fenway Action”). On May 10, 2021, the trial court dismissed the Fenway case with prejudice finding that Fenway did not have standing to assert their claims. Fenway has appealed this decision.
The Company denies the allegations of the PFS Action and the 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 September 30, 2021 and December 31, 2020. The Company believes it is in compliance with applicable environmental regulations in all material respects. Under various U.S. federal, state, and local environmental laws, a current or previous owner or operator of real estate may be liable for the entire cost of investigating, removing, and/or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the contamination. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for the entire clean-up cost. There are no material unrecorded liabilities as of September 30, 2021. Most of the Company’s warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the Environmental Protection Agency, and an accident or significant release of ammonia from a warehouse could result in injuries, loss of life, and property damage.
Occupational Safety and Health Act (OSHA)
The Company’s warehouses located in the U.S. are subject to regulation under OSHA, which requires employers to provide employees with an environment free from hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, and unsanitary conditions. The cost of complying with OSHA and similar laws enacted by states and other jurisdictions in which we operate can be substantial, and any failure to comply with these regulations could expose us to substantial penalties and potentially to liabilities to employees who may be injured at our warehouses. The Company records accruals for OSHA matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The Company believes that it is in substantial compliance with all OSHA regulations and that no material unrecorded liabilities exist as of September 30, 2021 and December 31, 2020.
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15. Accumulated Other Comprehensive Loss
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 nine months ended September 30, 2021 and 2020 is as follows (in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Pension and other postretirement benefits: |  |  |  |  |  |  |
Balance at beginning of period, net of tax | $ | (2,548) |  |  | $ | (3,932) |  |  | $ | (3,325) |  |  | $ | (4,758) |
Gain arising during the period | 382 |  |  | 407 |  |  | 1,144 |  |  | 1,218 |
Less: Tax expense | — |  |  | — |  |  | — |  |  | — |
Net gain arising during the period | 382 |  |  | 407 |  |  | 1,144 |  |  | 1,218 |
Amortization of prior service cost (1) | 7 |  |  | 7 |  |  | 22 |  |  | 22 |
Less: Tax expense | — |  |  | — |  |  | — |  |  | — |
Net amount reclassified from AOCI to net (loss) income | 7 |  |  | 7 |  |  | 22 |  |  | 22 |
Other comprehensive income, net of tax | 389 |  |  | 414 |  |  | 1,166 |  |  | 1,240 |
Balance at end of period, net of tax | (2,159) |  |  | (3,518) |  |  | (2,159) |  |  | (3,518) |
Foreign currency translation adjustments: |  |  |  |  |  |  |
Balance at beginning of period, net of tax | (422) |  |  | (21,920) |  |  | 3,234 |  |  | (6,710) |
(Loss) gain on foreign currency translation | (9,485) |  |  | 4,641 |  |  | (13,141) |  |  | (10,569) |
Less: Tax expense | — |  |  | — |  |  | — |  |  | — |
Net (loss) gain on foreign currency translation | (9,485) |  |  | 4,641 |  |  | (13,141) |  |  | (10,569) |
Balance at end of period, net of tax | (9,907) |  |  | (17,279) |  |  | (9,907) |  |  | (17,279) |
Designated derivatives: |  |  |  |  |  |  |
Balance at beginning of period, net of tax | (1,658) |  |  | (10,191) |  |  | (4,288) |  |  | (2,658) |
Unrealized gain (loss) on cash flow hedge derivatives | 5,094 |  |  | (6,097) |  |  | 10,116 |  |  | (15,727) |
Unrealized gain on net investment hedge derivative | — |  |  | — |  |  | — |  |  | 5,250 |
Less: Tax expense | — |  |  | — |  |  | — |  |  | — |
Net gain (loss) on designated derivatives | 5,094 |  |  | (6,097) |  |  | 10,116 |  |  | (10,477) |
Net amount reclassified from AOCI to net (loss) income (interest expense) | 3 |  |  | 1,286 |  |  | 142 |  |  | 2,017 |
Net amount reclassified from AOCI to net (loss) income (loss on debt extinguishment, modifications and termination of derivative instruments) | 627 |  |  | — |  |  | 2,055 |  |  | — |
Net reclassified from AOCI to net (loss) income (foreign exchange (gain) loss) | (5,477) |  |  | 3,807 |  |  | (9,436) |  |  | (77) |
Balance at end of period, net of tax | (1,411) |  |  | (11,195) |  |  | (1,411) |  |  | (11,195) |
Accumulated other comprehensive loss | $ | (13,477) |  |  | $ | (31,992) |  |  | $ | (13,477) |  |  | $ | (31,992) |

(1)Amounts reclassified from AOCI for pension liabilities are recognized in “Selling, general and administrative” in the accompanying condensed consolidated statements of operations.
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16. Segment Information
Our principal operations are organized into four reportable segments: Warehouse, Third-party managed, Transportation and Other. The details of these segments remain materially unchanged from those disclosed in the 2020 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.
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.
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The following table presents segment revenues and contributions with a reconciliation to income before income tax for the three and nine months ended September 30, 2021 and 2020 (in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Segment revenues: |  |  |  |  |  |  |
Warehouse | $ | 542,047 |  |  | $ | 388,024 |  |  | $ | 1,531,232 |  |  | $ | 1,141,503 |
Third-party managed | 87,782 |  |  | 75,338 |  |  | 233,027 |  |  | 213,213 |
Transportation | 78,979 |  |  | 34,096 |  |  | 234,051 |  |  | 104,874 |
Other | — |  |  | — |  |  | — |  |  | 4,459 |
Total revenues | 708,808 |  |  | 497,458 |  |  | 1,998,310 |  |  | 1,464,049 |
Segment contribution: |  |  |  |  |  |  |
Warehouse | 144,992 |  |  | 127,756 |  |  | 435,552 |  |  | 374,661 |
Third-party managed | 4,551 |  |  | 3,393 |  |  | 10,626 |  |  | 10,461 |
Transportation | 6,251 |  |  | 4,187 |  |  | 22,204 |  |  | 13,764 |
Other | (23) |  |  | (17) |  |  | (82) |  |  | 173 |
Total segment contribution | 155,771 |  |  | 135,319 |  |  | 468,300 |  |  | 399,059 |
Reconciling items: |  |  |  |  |  |  |
Depreciation and amortization | (70,569) |  |  | (53,569) |  |  | (232,239) |  |  | (157,572) |
Selling, general and administrative | (45,545) |  |  | (35,969) |  |  | (133,072) |  |  | (105,202) |
Acquisition, litigation and other, net | (6,338) |  |  | (5,282) |  |  | (31,011) |  |  | (9,771) |
Impairment of long-lived assets | (1,784) |  |  | (2,615) |  |  | (3,312) |  |  | (6,282) |
Gain (loss) from sale of real estate | — |  |  | (427) |  |  | — |  |  | 21,448 |
Interest expense | (25,303) |  |  | (23,066) |  |  | (77,838) |  |  | (70,114) |
Loss on debt extinguishment, modifications and termination of derivative instruments | (627) |  |  | — |  |  | (5,051) |  |  | (781) |
Other, net | (523) |  |  | (1,198) |  |  | (147) |  |  | 232 |
Income (loss) before income tax benefit (expense) | $ | 5,082 |  |  | $ | 13,193 |  |  | $ | (14,370) |  |  | $ | 71,017 |

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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
The following table details our assets by reportable segments, with a reconciliation to total assets reported for each of the periods presented in the accompanying Condensed Consolidated Balance Sheets.

| September 30, 2021 |  | December 31, 2020
| (In thousands)
Assets: |  |  |
Warehouse | $ | 5,535,161 |  |  | $ | 4,815,587 |
Managed | 52,699 |  |  | 52,818 |
Transportation | 155,886 |  |  | 151,872 |
Other | — |  |  | 35 |
Total segments assets | 5,743,746 |  |  | 5,020,312 |
Reconciling items: |  |  |
Corporate assets | 153,460 |  |  | 621,836 |
Unallocated acquisitions(1) | 2,191,777 |  |  | 2,144,096 |
Investments in partially owned entities | 38,571 |  |  | 44,907 |
Total reconciling items | 2,383,808 |  |  | 2,810,839 |
Total assets | $ | 8,127,554 |  |  | $ | 7,831,151 |

(1) The assets acquired in 2020 and 2021 related to the Agro and KMT acquisitions are reflec ted in the tables above within the row titled ‘Unallocated Acquisitions’ as the acquired assets have not yet been assigned to the respective segments as of September 30, 2021 or December 31, 2020. The assets will be assigned to the Warehouse and Transportation segments during the measurement period.
17. Earnings per Common Share
Basic and diluted earnings per common share are calculated by dividing the net income or loss attributable to common shareholders 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 trustees who have the right to participate in the distribution of common dividends while the restricted stock units and OP units are unvested.
The shares issuable upon settlement of forward sale agreements are reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of the Company’s common shares used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of common shares that would be issued upon full physical settlement of the forward sale agreements over the number of common shares that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). If and when the Company physically or net share settles the forward sale agreements, the delivery of common shares would result in an increase in the number of shares outstanding and dilution to earnings per share.
A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):
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Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Weighted average common shares outstanding – basic | 261,865 |  |  | 204,289 |  |  | 256,129 |  |  | 202,380 |
Dilutive effect of share-based awards | 685 |  |  | 1,642 |  |  | — |  |  | 1,520 |
Equity forward contracts | — |  |  | 2,569 |  |  | — |  |  | 2,151 |
Weighted average common shares outstanding – diluted | 262,550 |  |  | 208,500 |  |  | 256,129 |  |  | 206,051 |

For the nine months ended September 30, 2021, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net loss for the period. Consequently, the Company did not have any adjustments in this period between basic and diluted loss per share related to share-based awards and equity forward contract stock shares.
The table below presents the weighted-average number of antidilutive potential common shares that are not considered in the calculation of diluted (loss) income per share (in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Employee stock options | — |  |  | — |  |  | 324 |  |  | — |
Restricted stock units | 7 |  |  | 168 |  |  | 942 |  |  | 192 |
OP units | — |  |  | — |  |  | 454 |  |  | — |
Equity forward contracts | 1,436 |  |  | 690 |  |  | 3,902 |  |  | 233 |
| 1,443 |  |  | 858 |  |  | 5,622 |  |  | 425 |

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Table of Contents
Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)
18. Revenue from Contracts with Customers
Disaggregated Revenue
The following tables represent a disaggregation of revenue from contracts with customers for the three and nine months ended September 30, 2021 and 2020 by segment and geographic region:

| Three Months Ended September 30, 2021
| North America | Europe | Asia-Pacific | South America |  | Total
| (In thousands)
Warehouse rent and storage | $ | 177,734 |  | $ | 19,644 |  | $ | 16,502 |  | $ | 3,174 |  |  | $ | 217,054 |
Warehouse services(1) | 241,581 |  | 29,291 |  | 44,302 |  | 1,639 |  |  | 316,813 |
Third-party managed | 82,490 |  | — |  | 5,292 |  | — |  |  | 87,782 |
Transportation | 38,512 |  | 34,548 |  | 5,512 |  | 407 |  |  | 78,979 |
Total revenues (2) | 540,317 |  | 83,483 |  | 71,608 |  | 5,220 |  |  | 700,628 |
Lease revenue (3) | 8,180 |  | — |  | — |  | — |  |  | 8,180 |
Total revenues from contracts with all customers | $ | 548,497 |  | $ | 83,483 |  | $ | 71,608 |  | $ | 5,220 |  |  | $ | 708,808 |

| Three Months Ended September 30, 2020
| North America | Europe | Asia-Pacific | South America |  | Total
| (In thousands)
Warehouse rent and storage | $ | 144,079 |  | $ | — |  | $ | 13,799 |  | $ | 1,465 |  |  | $ | 159,343 |
Warehouse services(1) | 180,592 |  | — |  | 40,414 |  | 663 |  |  | 221,669 |
Third-party managed | 70,456 |  | — |  | 4,882 |  | — |  |  | 75,338 |
Transportation | 28,582 |  | — |  | 5,052 |  | 462 |  |  | 34,096 |
Other | — |  | — |  | — |  | — |  |  | — |
Total revenues (2) | 423,709 |  | — |  | 64,147 |  | 2,590 |  |  | 490,446 |
Lease revenue (3) | 7,012 |  | — |  | — |  | — |  |  | 7,012 |
Total revenues from contracts with all customers | $ | 430,721 |  | $ | — |  | $ | 64,147 |  | $ | 2,590 |  |  | $ | 497,458 |

(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $4.1 million for the three months ended September 30, 2021. This revenue is generated by an entity acquired in December 2020, therefore there was no related revenue during the three months ended and September 30, 2020.
(2)Revenues are within the scope of ASC 606, Revenue From Contracts with Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.
(3)Revenues are within the scope of Topic 842, Leases.
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Table of Contents
Americold Realty Trust and Subsidiaries
Notes to Condensed Consolidated Financial Statements - (Unaudited)

| Nine Months Ended September 30, 2021
| North America | Europe | Asia-Pacific | South America |  | Total
| (In thousands)
Warehouse rent and storage | $ | 509,019 |  | $ | 56,518 |  | $ | 46,756 |  | $ | 8,501 |  |  | $ | 620,794 |
Warehouse services | 673,048 |  | 82,552 |  | 128,032 |  | 4,813 |  |  | 888,445 |
Third-party managed | 217,192 |  | — |  | 15,835 |  | — |  |  | 233,027 |
Transportation | 117,865 |  | 98,998 |  | 15,982 |  | 1,206 |  |  | 234,051 |
Total revenues (1) | 1,517,124 |  | 238,068 |  | 206,605 |  | 14,520 |  |  | 1,976,317 |
Lease revenue (2) | 21,993 |  | — |  | — |  | — |  |  | 21,993 |
Total revenues from contracts with all customers | $ | 1,539,117 |  | $ | 238,068 |  | $ | 206,605 |  | $ | 14,520 |  |  | $ | 1,998,310 |

| Nine Months Ended September 30, 2020
| North America | Europe | Asia-Pacific | South America |  | Total
| (In thousands)
Warehouse rent and storage | $ | 429,039 |  | $ | — |  | $ | 39,438 |  | $ | 3,931 |  |  | $ | 472,408 |
Warehouse services | 536,100 |  | — |  | 111,109 |  | 1,966 |  |  | 649,175 |
Third-party managed | 199,938 |  | — |  | 13,275 |  | — |  |  | 213,213 |
Transportation | 84,130 |  | — |  | 19,328 |  | 1,416 |  |  | 104,874 |
Other | 4,448 |  | — |  | — |  | — |  |  | 4,448 |
Total revenues (1) | 1,253,655 |  | — |  | 183,150 |  | 7,313 |  |  | 1,444,118 |
Lease revenue (2) | 19,931 |  | — |  | — |  | — |  |  | 19,931 |
Total revenues from contracts with all customers | $ | 1,273,586 |  | $ | — |  | $ | 183,150 |  | $ | 7,313 |  |  | $ | 1,464,049 |

(1)Warehouse services revenue includes sales of product that Americold purchases on the spot market, repackages, and sells to customers. Such revenues totaled $10.4 million for the nine months ended September 30, 2021. This revenue is generated by an entity acquired in December 2020, therefore there was no related revenue during the nine months ended September 30, 2020.
(2)Revenues are within the scope of ASC 606, Revenue From Contracts with Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards.
(3)Revenues are within the scope of Topic 842, Leases.
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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Notes to Condensed Consolidated Financial Statements - (Unaudited)
As of September 30, 2021, the Company had $761.8 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 8% of these remaining performance obligations as revenue in 2021, and the re maining 92% to be recognized over a weighted average period of 15.4 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 nine months ended September 30, 2021, were not materially impacted by any other factors.
Opening and closing receivables balances related to contracts with customers accounted for under ASC 606 were $362.8 million and $321.5 million as of September 30, 2021 and December 31, 2020, respectively. All other trade receivable balances relate to contracts accounted for under ASC 842.
Opening and closing balances in unearned revenue related to contracts with customers were $22.1 million and $19.2 million as of September 30, 2021 and December 31, 2020, respectively. Substantially all revenue that was included in the contract liability balances at the beginning of 2021 has been recognized as of September 30, 2021, and represents revenue from the satisfaction of monthly storage and handling services with inventory that turns on average every 30 days.
19. Subsequent Events
On November 2, 2021, the Company’s Board of Trustees (the “Board”) terminated Mr. Boehler without cause from his position as the Company’s President and Chief Executive Officer. Mr. Boehler also resigned as a Trustee of the Board. On November 2, 2021, the Board of the Company appointed George Chappelle to be the Company’s Interim Chief Executive Officer and a Trustee of the Company, and entered into an employment agreement with Mr. Chappelle which governs the terms of Mr. Chappelle’s employment as the Company’s Interim Chief Executive Officer. Additionally, on November 2, 2021, the Board of the Company appointed Pamela Kohn and Robert Bass as Trustees of the Company.
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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, 2020.
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 September 30, 2021, we operated a global network of 248 temperature-controlled warehouses encompassing over 1.5 billion cubic feet, with 202 warehouses in North America, 27 in Europe, 16 warehouses in Asia-Pacific, and three warehouses in South America. In addition, we hold two minority interests in Brazilian-based joint ventures, one with SuperFrio, which owns or operates 33 temperature-controlled warehouses and one with Comfrio, which owns or operates 25 temperature-controlled warehouses.
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, and (13) 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 and compensation levels, changes in customer requirements, 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 processes that can create inefficiencies, all of which we expect to continue to incur going forward. Our second largest cost of operations from our warehouse segment is power utilized in the operation of our temperature-controlled
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warehouses. As a result, trends in the price for power in the regions where we operate may have a significant effect on our financial results. We may from time to time hedge our exposure to changes in power prices through 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 capabilities required. Other facilities costs include utilities other than power, property insurance, property taxes, sanitation (which include incremental supplies as a result of COVID-19), repairs and maintenance on real estate, rent under real property operating leases, where applicable, security, and other related facilities costs. Other services costs include equipment costs, warehouse consumables (e.g., shrink-wrap and uniforms), PPE to maintain the health and safety of our associates, warehouse administration and other related services costs.
Third-Party Managed. We receive a reimbursement of substantially all expenses for warehouses that we manage on behalf of third-party owners, with all reimbursements recognized as revenues under the relevant accounting guidance. We also earn management fees, incentive fees upon achieving negotiated performance and cost-savings results, or an applicable mark-up on costs. Cost of operations for our third-party managed segment is reimbursed on a pass-through basis (typically within two weeks).
Transportation. We charge transportation fees, including fuel surcharges, to our customers for whom we arrange the transportation of their products. Cost of operations for our transportation segment consists primarily of third-party carrier charges, which are impacted by factors affecting those carriers. We supplemented our regional, national and truckload consolidation business with the Hall’s acquisition, which services the Northeast corridor of the U.S. with an owned and maintained fleet. Our acquisition of Agro Merchants further expands our Transportation service offering. Agro Merchants operates its own fleet of temperature-controlled vehicles in the U.S., Ireland and UK and also offers a variety of non-asset based transportation management services. These include multi-modal global freight forwarding services to support our customers’ needs.
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.
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
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merger and acquisition integration, such as employee retention expense and work associated with information systems and other projects including spending to support future acquisitions, which primarily consist of professional services.
•Litigation costs incurred in order to defend ourselves from litigation charges outside of the normal course of business and related settlement costs.
•Severance costs representing certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies, and reduction in workforce costs associated with exiting or selling non-strategic warehouses.
•Equity acceleration costs representing the unrecognized expense for share-based awards that vest and convert to common shares in advance of the original negotiated vesting date and any other equity award changes resulting in accounting for the award as a modification.
•Non-offering related equity issuance expenses whether incurred through our initial public offering, follow-on offerings or secondary offerings.
•Terminated site operations costs represent expenses incurred to return leased sites to their original physical state at lease inception in connection with the termination of the applicable underlying lease. These terminations were part of our strategic efforts to exit or sell non-strategic warehouses as opposed to ordinary course lease expirations. Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our condensed consolidated statement of operations.
•Other costs relate to insurance claim deductibles and related recoveries (second quarter 2021) and additional superannuation pension costs related to prior years upon review by the Australian Tax Office (third quarter 2020).
Key Factors Affecting Our Business and Financial Results
Acquisitions and Joint Ventures
On September 1, 2021, the Company acquired Newark Facility Management for $391.4 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility. Since the date of acquisition, we have reported the results of this facility within our warehouse segment.
On August 2, 2021, the Company acquired the assets of the ColdCo Companies for $20.7 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility. ColdCo consisted of an owned facility in St. Louis, Missouri, and a leased facility in Reno, Nevada as well as transportation services. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment and the transportation services within our transportation segment.
On May 28, 2021, we acquired Bowman Stores for £75.5 million, or $107.1 million USD, based on the spot rate on the date of the transaction. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility. Bowman Stores consisted of a single campus located in Spalding, England. Since the date of acquisition, we have reported the results of this campus within our warehouse segment.
On May 5, 2021, we acquired KMT Brrr! for $70.8 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility. KMT Brrr! consisted of two owned facilities located in New Jersey. It also provides transportation services to its customers. Since the date of acquisition, we have reported the results of these facilities within our warehouse and transportation segments.
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On March 1, 2021, we acquired Liberty Freezers for C$55.0 million. The acquisition was funded using cash drawn on our 2020 Senior Unsecured Revolving Credit Facility. Liberty consisted of four facilities in Toronto, Montreal and London, Canada. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment.
On December 30, 2020, we completed the acquisition of Agro Merchants for total consideration of $1.59 billion, including cash received of $47.5 million. This was comprised of cash consideration totaling $1.08 billion, of which $49.7 million was deferred, and the issuance of 14,166,667 common shares of beneficial interest to Oaktree and Agro management, with a fair value of $512.1 million based upon the closing share price on December 29, 2020 of $36.15. Financing lease and sale-leaseback obligations associated with the acquisition totaled $105.4 million and when added to the total consideration transferred brings the total transaction cost to approximately $1.7 billion. Agro Merchants operated more than 236 million cubic feet of temperature-controlled warehouse and distribution space across 46 facilities and provided transportation services in the United States, Europe, Australia and Chile. The Chile facility and operations were subject to a joint venture agreement whereby there was a non-controlling interest holder with a 35% ownership interest. The results of this facility were consolidated in our results of operations. During the second quarter of 2021, we purchased the 35% ownership interest from the third party, and now own 100% of this facility and the operations. Since the date of acquisition, we have reported the results of the facilities within our warehouse segment, and the results of Agro’s transportation services within our transportation segment.
On November 2, 2020, we completed the acquisition of New Jersey based Hall’s Warehouse Corporation for $489.2 million. Hall’s consisted of eight facilities near the Port of Newark. Hall’s also provides transportation services to its customers. Since the date of acquisition, we have reported the results of the facilities within our warehouse segment, and the results of Hall’s transportation services within our transportation segment.
On August 31, 2020, we completed the acquisition of Caspers Cold Storage for cash consideration of approximately $25.6 million utilizing available cash on hand. Caspers consisted of a single temperature-controlled warehouse located in Tampa, Florida. Since the date of acquisition, we have reported the results of this facility within our warehouse segment.
Additionally, on August 31, 2020, we completed the acquisition of AM-C Warehouses for cash consideration of approximately $82.7 million utilizing available cash on hand. AM-C Warehouses consisted of an owned facility in Mansfield, Texas and a leased facility in Grand Prairie, Texas. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment.
On March 6, 2020, we acquired a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. for Brazil Real Dollars of $117.8 million, or approximately USD $25.7 million, inclusive of certain legal fees. We funded the purchase price using cash on hand. Our pro-rata share of SuperFrio’s results are included within “(Loss) income from investments in partially owned entities”. As of September 30, 2021, SuperFrio owns or operates 33 temperature-controlled warehouses in Brazil.
On January 2, 2020, we completed the purchase of all outstanding shares of Nova Cold for cash consideration of C$338.7 million (USD $260.6 million), net of cash received. Nova Cold consisted of four temperature-controlled facilities in Toronto, Calgary and Halifax. The acquisition was funded utilizing proceeds from the settlement of our April 2019 forward sale agreement combined with cash drawn on our 2018 Senior Unsecured Revolving Credit Facility. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment.
Also, on January 2, 2020, we completed the purchase of all outstanding membership interests of Newport Cold for cash consideration of $57.7 million, net of cash received, utilizing available cash on hand. Newport Cold consists
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of a single temperature-controlled warehouse located in St. Paul, Minnesota. Since the date of acquisition, we have reported the results of this facility within our warehouse segment.
Refer to Note 2, 3 and 4 of the Notes to the Condensed Consolidated Financial Statements for further information.
COVID-19
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We are continuing to closely monitor the impact of the COVID-19 pandemic and any variants on all aspects of our business and geographies, including how it will impact our customers and business partners. While we did not incur significant disruptions during 2020 from the COVID-19 pandemic, the nine-months ended September 30, 2021 were negatively impacted by COVID-19 related disruptions in (1) the food supply chain; (ii) our customers’ production of goods; (iii) the labor market impacting availability and cost; and (iv) the macroeconomic environment including the impact of inflation on the cost to provide our services. We expect that end-consumer demand for food will remain consistent over the long-term with historic levels overall but varying between retail and food service sectors. The consistent end consumer demand has driven down holdings in our facilities as it remains steady and production has remained challenged since the onset of the pandemic. We expect it will continue to do so until our customers are able to ramp production back up to pre-pandemic levels for an extended period of time in order to rebuild inventory in the supply chain. However, uncertainty still surrounds the impact of the pandemic and recovery ultimately depends on many factors. COVID-19 disruptions in certain markets where we or our customers operate continue to impact the food supply chain and our business. As a result, occupancy and throughput volume continue at lower than historical levels experienced prior to COVID-19. As the Company continues to protect its employees from the spread of COVID-19, it is incurring elevated labor related costs and incremental health and safety supplies costs relative to its pre-pandemic experience. The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with any degree of confidence, including the scope, severity, duration and geographies of the outbreak, the occurrence of additional waves or spikes in infection rates (including the spread of variant strains), the actions taken to contain the COVID-19 pandemic or mitigate its impact as requested or mandated by governmental authorities or otherwise voluntarily taken by individuals or businesses, and the direct and indirect economic effects of the outbreak and containment measures, among others. We continue to expect to see inflationary impacts in the cost of providing our services, but anticipate that these will be partially mitigated through price increases that have either taken effect or are expected to take effect during the remainder of the year. Our business is deemed an “essential business” as defined by the Department of Homeland Security, which means that our associates are able to continue working in our facilities during “shelter-in-place” or “stay-at-home” orders. The outbreak of COVID-19 in the United States and other countries in which we operate, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has led many nations, states and local authorities to periodically institute “shelter-in-place” or “stay-at-home” orders, mandate business and school closures and restrict travel. Certain states and cities, including where we own properties, have development sites and where our principal place of business is located, have also reacted by instituting restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue during peak outbreaks. These restrictions vary widely by jurisdiction and may continue to change as the COVID-19 pandemic progresses. The negative impacts of the COVID-19 pandemic are pervasive across a broad spectrum of industries, including industries in which we, our customers and business partners operate. Negative impacts from COVID-19 may negatively impact the business and operations of our customers and business partners (including our suppliers), which, in turn, may impact our business negatively. Further, the impacts of a potentially worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer and business spending as well as other unanticipated consequences continue to remain unknown. The impacts of locations of outbreaks and actions mandated by governmental authorities or taken voluntarily by businesses and individuals to contain or mitigate the spread of COVID-19 and the timing of the repeal or loosening of such restrictions are also unknown. As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects. Refer to our Annual Report on Form 10-K/A for the year ended December 31, 2020 for further considerations, “Risk Factors - Risks Related to Public Health Crises - We face various risks and uncertainties related to public health crises, including the recent and ongoing global outbreak of the novel coronavirus and variants (COVID-19). The COVID-19 pandemic is growing and its impacts are uncertain and hard to measure and may have a material adverse effect on us.”
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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 hottest weather for our portfolio occurs 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 September 30, 2021 | Average foreign exchange rates used to translate actual operating results for the three months ended September 30, 2021 | Average foreign exchange rates used to translate actual operating results for the nine months ended September 30, 2021 | Foreign exchange rates as of September 30, 2020 | Prior period average foreign exchange rate used to adjust actual operating results for the three months ended September 30, 2021(1) | Prior period average foreign exchange rate used to adjust actual operating results for the nine months ended September 30, 2021(1) |
Canadian Dollar |  | 0.789 |  | 0.794 |  | 0.799 |  | 0.751 |  | 0.751 |  | 0.739 |  |
Euro |  | 1.158 |  | 1.179 |  | 1.196 |  | N/A | 1.197 |  | 1.144 |  |
British Pound |  | 1.347 |  | 1.378 |  | 1.385 |  | N/A | 1.334 |  | 1.286 |  |
Poland Zloty |  | 0.251 |  | 0.258 |  | 0.263 |  | N/A | 0.263 |  | 0.262 |  |
Australian Dollar |  | 0.723 |  | 0.735 |  | 0.759 |  | 0.716 |  | 0.715 |  | 0.675 |  |
New Zealand Dollar |  | 0.690 |  | 0.701 |  | 0.712 |  | 0.662 |  | 0.662 |  | 0.637 |  |
Argentinian Peso |  | 0.010 |  | 0.010 |  | 0.011 |  | 0.013 |  | 0.014 |  | 0.015 |  |
Chilean Peso |  | 0.001 |  | 0.001 |  | 0.001 |  | N/A | 0.001 |  | 0.001 |  |
Brazilian Real |  | 0.184 |  | 0.191 |  | 0.188 |  | 0.178 |  | 0.186 |  | 0.186 |  |

(1)Represents the relevant average foreign exchange rates in effect in the comparable prior period applied to the activity for the current period. The average foreign currency exchange rates we apply to our operating results are derived from third party reporting sources for the periods indicated.
Focus on Our Operational Effectiveness and Cost Structure
We continuously seek to execute on various initiatives aimed at streamlining our business processes and reducing our cost structure, including: realigning and centralizing key business processes and fully integrating acquired assets and businesses; implementing standardized operational processes; integrating and launching new information technology tools and platforms; instituting key health, safety, leadership and training programs; and capitalizing on the purchasing power of our network. Through the realignment of our business processes, we have acquired new talent and strengthened our service offerings. In order to reduce costs in our facilities, we have invested in energy efficiency projects, including LED lighting, thermal energy storage, motion-sensor technology, variable frequency drives for our fans and compressors, third party efficiency reviews and real-time monitoring of energy consumption, rapid open and close doors, and alternative-power generation technologies to improve the energy efficiency of our warehouses. We have also performed fine-tuning of our refrigeration systems, deployed efficient energy management practices, such as time-of-use and awareness, and have increased our participation in Power Demand Response programs with some of our power suppliers. These initiatives have allowed us to reduce our consumption of kilowatt hours and energy spend.
As part of our initiatives to streamline our business processes and to reduce our cost structure, we have evaluated and exited less strategic and profitable markets or business lines, including the sale of certain warehouse assets, the exit of certain leased facilities, the exit of certain transportation operations, the exit of certain managed warehouse agreements, the exit of the China JV, and the sale of our quarry business. Through our process of active portfolio management, we continue to evaluate our markets and offerings.
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Strategic Shift within Our Transportation Segment
Several years ago, we initiated a strategic shift in our transportation segment services and solutions. The intention of this strategic shift was to better focus our business on the operation of our temperature-controlled warehouses. Specifically, we have gradually exited certain commoditized, non-scalable, or low margin services we historically offered to our customers, in favor of more profitable and value-added programs, such as regional, national, truckload and retailer-specific multi-vendor consolidation services. We designed each value-added program to improve efficiency and reduce transportation and logistics costs to our warehouse customers, whose transportation spend typically represents the majority of their supply-chain costs. We believe this efficiency and cost reduction helps to drive increased client retention, as well as maintain high occupancy levels in our temperature-controlled warehouses. Over the last several years, we have made significant progress in implementing our strategic initiative of growing our transportation service offering in a way that complements our temperature-controlled warehouse business, for example, we have also added a dedicated fleet service offering through acquisitions such as Agro and Hall’s. We intend to continue executing this strategy in the future.
Historically Significant Customer
For the three and nine months ended September 30, 2021 and 2020, one customer accounted for more than 10% of our total revenues. For the three months ended September 30, 2021 and 2020, sales to this customer were $79.8 million and $66.7 million, respectively. For the nine months ended September 30, 2021 and 2020, sales to this customer were $209.8 million and $186.7 million, respectively. The substantial majority of this customer’s business relates to our third-party managed segment. We are reimbursed for substantially all expenses we incur in managing warehouses on behalf of third-party owners. We recognize these reimbursements as revenues under applicable accounting guidance, but these reimbursements generally do not affect our financial results because they are offset by the corresponding expenses that we recognize in our third-party managed segment cost of operations. Of the revenues received from this customer, $74.9 million and $62.2 million represented reimbursements for certain expenses we incurred during the three months ended September 30, 2021 and 2020, respectively, and $199.6 million and $173.0 million for the nine months ended were September 30, 2021 and 2020, respectively, were offset by matching expenses included in our third party managed cost of operations.
Economic Occupancy of our Warehouses
We define average economic occupancy as the aggregate number of physically occupied pallets and any additional pallets otherwise contractually committed for a given period, without duplication. We estimate the number of contractually committed pallet positions by taking into account the actual pallet commitment specified in each customers’ contract, and subtracting the physical pallet positions. We regard economic occupancy as an important driver of our financial results. Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an as-utilized, on-demand basis. We actively seek to enter into contracts that implement our commercial business rules which contemplate, among other things, fixed storage commitments in connection with establishing new customer relationships. Additionally, we actively seek opportunities to transition our current customers to contracts that feature a fixed storage commitment when renewing existing agreements or upon the change in the anticipated profile of our customer. This strategy mitigates the impact of changes in physical occupancy throughout the course of the year due to seasonality, as well as other factors that can impact physical occupancy while ensuring our customers have the necessary space they need to support their business.
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Throughput at our Warehouses
The level and nature of throughput at our warehouses is an important factor impacting our warehouse services revenues in our warehouse segment. Throughput refers to the volume of pallets that enter and exit our warehouses. Higher levels of throughput drive warehouse services revenues in our warehouse segment as customers are typically billed on a basis that takes into account the level of throughput of the goods they store in our warehouses. The nature of throughput may be driven by the expected turn of the underlying product or commodity. Throughput pallets can be influenced both by the food manufacturers as well as shifts in demand preferences. Food manufacturers’ production levels, which respond to market conditions and consumer preferences, may impact inbound pallets. Similarly, a change in inventory turnover due to shift in customer demand may impact outbound pallets.
How We Assess the Performance of Our Business
Segment Contribution (Net Operating Income or “NOI”)
We evaluate the performance of our primary business segments based on their contribution (NOI) to our overall results of operations. We use the term “segment contribution (NOI)” to mean a segment’s revenues less its cost of operations (excluding any depreciation, depletion and amortization, impairment charges, corporate-level selling, general and administrative and corporate-level acquisition, litigation and other, net). We use segment contribution (NOI) to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with FASB ASC, Topic 280, Segment Reporting.
We also analyze the “segment contribution (NOI) margin” for each of our business segments, which we calculate as segment contribution (NOI) divided by segment revenues.
In addition to our segment contribution (NOI) and segment contribution (NOI) margin, we analyze the contribution (NOI) of our warehouse rent and storage operations and our warehouse services operations within our warehouse segment. We calculate the contribution (NOI) of our warehouse rent and storage operations as rent and storage revenues less power and other facilities cost. We calculate the contribution (NOI) of our warehouse services operations as warehouse services revenues less labor and other service costs. We calculate the contribution (NOI) margin for each of these operations as the applicable contribution (NOI) measure divided by the applicable revenue measure. We believe the presentation of these contribution (NOI) and contribution (NOI) margin measures helps investors understand the relative revenues, costs and earnings resulting from each of these separate types of services we provide to our customers in the same manner reviewed by our management in connection with the operation of our business. These contribution (NOI) measures within our warehouse segment are not measurements of financial performance under U.S. GAAP, and these measures should be considered as supplements, but not as alternatives, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.
Same Store Analysis
Effective January 1, 2020, we define our “same store” population once a year at the beginning of the current calendar year. Our same store population includes properties that were owned or leased for the entirety of two comparable periods and that have reported at least twelve months of consecutive normalized operations prior to January 1 of the prior calendar year. We define “normalized operations” as properties that have been open for operation or lease after development or significant modification, including the expansion of a warehouse footprint or a warehouse rehabilitation subsequent to an event, such as a natural disaster or similar event causing disruption to operations. In addition, our definition of “normalized operations” takes into account changes in the ownership
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structure (e.g., purchase of a previously leased warehouse would result in different charges in the compared periods), which would impact comparability in our warehouse segment contribution (NOI).
Acquired properties will be included in the “same store” population if owned by us as of the first business day of each year, of the prior calendar year and still owned by us as of the end of the current reporting period, unless the property is under development. The “same store” pool is also adjusted to remove properties that were sold or entering development subsequent to the beginning of the current calendar year. As such, the “same store” population for the period ended September 30, 2021 includes all properties that we owned at January 2, which had both been owned and had reached “normalized operations” by January 2, 2020.
We calculate “same store contribution (NOI)” as revenues for the same store population less its cost of operations (excluding any depreciation and amortization, impairment charges, corporate-level selling, general and administrative expenses, corporate-level acquisition, litigation and other, net and gain or loss on sale of real estate). In order to derive an appropriate measure of period-to-period operating performance, we also calculate our same store contribution (NOI) on a constant currency basis to remove the effects of foreign currency exchange rate movements by using the comparable prior period exchange rate to translate from local currency into U.S. dollars for both periods. We evaluate the performance of the warehouses we own or lease using a “same store” analysis, and we believe that same store contribution (NOI) is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period and also on a constant currency basis, thereby eliminating the effects of changes in the composition of our warehouse portfolio and currency fluctuations on performance measures.
The following table shows the number of same-store warehouses in our portfolio as of September 30, 2021. The number of warehouses owned or operated in as of September 30, 2021 and excluded as same-store warehouses for the period ended September 30, 2021 is listed below. While not included in the non-same store warehouse count in the table below, the results of operations for the non-same store warehouses includes the partial period impact of sites that were exited during the periods presented.

Total Warehouses | 248 |  |
Same Store Warehouses | 162 |  |
Non-Same Store Warehouses (1) | 77 |  |
Third-Party Managed Warehouses | 9 |  |

(1) During the third quarter of 2021, we completed the acquisition of ColdCo resulting in the addition of two facilities and the acquisition of Newark Facility Management resulting in the addition of one facility. Additionally, we exited a facility in Canada for which the lease expired on September 30, 2021.
As of September 30, 2021, our portfolio consisted of 248 total warehouses, including 239 within the warehouse segment and nine in the third-party managed segment. In addition, we hold minority interests in two Brazilian joint ventures, Superfrio, which owns or operates 33 temperature-controlled warehouses, and Comfrio, which owns or operates 25 temperature-controlled warehouses.
Same store contribution (NOI) is not a measurement of financial performance under U.S. GAAP. In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same store or calculate same store contribution (NOI) in a manner consistent with our definition or calculation. Same store contribution (NOI) should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below.
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Constant Currency Metrics
As discussed above under “Key Factors Affecting Our Business and Financial Results—Foreign Currency Translation Impact on Our Operations,” our consolidated revenues and expenses are subject to variations outside our control that are caused by the net effect of foreign currency translation on revenues generated and expenses incurred by our operations outside the United States. As a result, in order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we analyze our business performance based on certain constant currency reporting that represents current period results translated into U.S. dollars at the relevant average foreign exchange rates applicable in the comparable prior period. We believe that the presentation of constant currency results provides a measurement of our ongoing operations that is meaningful to investors because it excludes the impact of these foreign currency movements that we cannot control. Constant currency results are not measurements of financial performance under U.S. GAAP, and our constant currency results should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below. Our discussion of the drivers of our performance below are based upon U.S. GAAP.
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RESULTS OF OPERATIONS
Comparison of Results for the Three Months Ended September 30, 2021 and 2020
Warehouse Segment
The following table presents the operating results of our warehouse segment for the three months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
| (Dollars in thousands) |  |  |  |
Rent and storage | $ | 225,234 |  |  | $ | 224,210 |  |  | $ | 166,355 |  |  | 35.4 | % |  | 34.8 | %
Warehouse services | 316,813 |  |  | 315,105 |  |  | 221,669 |  |  | 42.9 | % |  | 42.2 | %
Total warehouse segment revenues | 542,047 |  |  | 539,315 |  |  | 388,024 |  |  | 39.7 | % |  | 39.0 | %
Power | 38,931 |  |  | 38,774 |  |  | 27,145 |  |  | 43.4 | % |  | 42.8 | %
Other facilities costs (2) | 53,050 |  |  | 52,533 |  |  | 35,752 |  |  | 48.4 | % |  | 46.9 | %
Labor | 245,515 |  |  | 244,106 |  |  | 166,491 |  |  | 47.5 | % |  | 46.6 | %
Other services costs (3) | 59,559 |  |  | 59,447 |  |  | 30,880 |  |  | 92.9 | % |  | 92.5 | %
Total warehouse segment cost of operations | $ | 397,055 |  |  | $ | 394,860 |  |  | $ | 260,268 |  |  | 52.6 | % |  | 51.7 | %
Warehouse segment contribution (NOI) | 144,992 |  |  | 144,455 |  |  | 127,756 |  |  | 13.5 | % |  | 13.1 | %
Warehouse rent and storage contribution (NOI) (4) | 133,253 |  |  | 132,903 |  |  | 103,458 |  |  | 28.8 | % |  | 28.5 | %
Warehouse services contribution (NOI) (5) | 11,739 |  |  | 11,552 |  |  | 24,298 |  |  | (51.7) | % |  | (52.5) | %
Total warehouse segment margin | 26.7 | % |  | 26.8 | % |  | 32.9 | % |  | -618 bps |  | -614 bps
Rent and storage margin(6) | 59.2 | % |  | 59.3 | % |  | 62.2 | % |  | -303 bps |  | -291 bps
Warehouse services margin(7) | 3.7 | % |  | 3.7 | % |  | 11.0 | % |  | -726 bps |  | -730 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
(2)Includes real estate rent expense of $11.2 million and $3.4 million, on an actual basis, for the third quarter of 2021 and 2020, respectively.
(3)Includes non-real estate rent expense (equipment lease and rentals) of $2.9 million and $2.2 million, on an actual basis, for the third quarter of 2021 and 2020, respectively.
(4)Calculated as rent and storage revenues less power and other facilities costs.
(5)Calculated as warehouse services revenues less labor and other services costs.
(6)Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenues.
(7)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.
Warehouse segment revenues were $542.0 million for the three months ended September 30, 2021, an increase of $154.0 million, or 39.7%, compared to $388.0 million for the three months ended September 30, 2020. On a constant currency basis, our warehouse segment revenues were $539.3 million for the three months ended September 30, 2021, an increase of $151.3 million, or 39.0%, from the three months ended September 30, 2020. Approximately $141.4 million of the increase, on an actual currency basis, was driven by acquisitions completed between October 2020 and September 2021. We acquired 61 warehouse facilities as a result of the Agro, Hall’s, Liberty, Bowman, KMT Brrr! acquisitions between October 1, 2020 and June 30, 2021. As a result, these facilities are reflected in the entirety of the current period but none of the comparable prior period. Additionally, we acquired two facilities on August 2, 2021 as a result of the ColdCo acquisition and one facility on September 1, 2021 as a result of the Newark Facility Management acquisition, and the results of these facilities are included in the current period since the date of acquisition. Revenue growth was also due to contractual and market-driven
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rate escalations and our recently completed developments. The foreign currency translation of revenues earned by our foreign operations had a net $2.7 million favorable impact during the three months ended September 30, 2021, which was mainly driven by the weakening of the U.S. dollar against the Australian dollar and the Euro.
Warehouse segment cost of operations was $397.1 million for the three months ended September 30, 2021, an increase of $136.8 million, or 52.6%, compared to the three months ended September 30, 2020. On a constant currency basis, our warehouse segment cost of operations was $394.9 million for the three months ended September 30, 2021, an increase of $134.6 million, or 51.7%, from the three months ended September 30, 2020. Approximately $113.2 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment we acquired in connection with the aforementioned acquisitions. In addition, we incurred increases in our cost of operations of our same store facilities related to labor, power and property insurance costs, all of which are reflective of current market trends. Additionally, the foreign currency translation of expenses incurred by our foreign operations had a net $2.2 million unfavorable impact during the three months ended September 30, 2021.
For the three months ended September 30, 2021, warehouse segment contribution (NOI), increased $17.2 million, or 13.5%, to $145.0 million for the third quarter of 2021 compared to $127.8 million for the third quarter of 2020. The foreign currency translation of our results of operations had a $0.5 million favorable impact to the warehouse segment contribution period-over-period due to the weakening of the U.S. dollar. On a constant currency basis, warehouse segment NOI increased 13.1% from the three months ended September 30, 2020. Approximately $28.2 million of the increase, on an actual basis, was primarily driven by the additional facilities in the warehouse segment as a result of the aforementioned acquisitions, and the growth and modest synergies experienced period-over-period during overlapping periods of ownership for sites acquired during 2020. The growth is also attributable to revenue increases, partially offset by the following factors that impacted our same-store facilities: lower economic occupancy driven by the impact of COVID-19 on the food manufacturing supply chain and increased costs including labor, power and related travel costs, as well as property insurance.
Same Store and Non-Same Store Analysis
We had 162 same stores for the three months ended September 30, 2021. Please see “How We Assess the Performance of Our Business—Same Store Analysis” above for a reconciliation of the change in the same store portfolio from period to period. Amounts related to the acquisitions of Agro, AM-C Warehouses, Bowman Stores, Caspers, ColdCo, Halls, KMT Brrr!, Liberty Freezers, Newark Facility Management, one recently leased warehouse in Australia, as well as certain expansion and development projects not yet stabilized are reflected within non-same store results.
The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the three months ended September 30, 2021 and 2020.
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| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of same store sites | 162 |  |  |  | 162 |  | n/a |  | n/a
Same store revenues: | (Dollars in thousands) |  |  |  |
Rent and storage | $ | 157,233 |  |  | $ | 157,108 |  |  | $ | 154,926 |  |  | 1.5 | % |  | 1.4 | %
Warehouse services | 216,351 |  |  | 215,316 |  |  | 210,309 |  |  | 2.9 | % |  | 2.4 | %
Total same store revenues | 373,584 |  |  | 372,424 |  |  | 365,235 |  |  | 2.3 | % |  | 2.0 | %
Same store cost of operations: |  |  |  |  |  |  |  |  |
Power | 25,676 |  |  | 25,721 |  |  | 25,497 |  |  | 0.7 | % |  | 0.9 | %
Other facilities costs | 31,743 |  |  | 31,700 |  |  | 32,859 |  |  | (3.4) | % |  | (3.5) | %
Labor | 168,426 |  |  | 167,673 |  |  | 155,114 |  |  | 8.6 | % |  | 8.1 | %
Other services costs | 30,530 |  |  | 30,531 |  |  | 28,237 |  |  | 8.1 | % |  | 8.1 | %
Total same store cost of operations | $ | 256,375 |  |  | $ | 255,625 |  |  | $ | 241,707 |  |  | 6.1 | % |  | 5.8 | %
Same store contribution (NOI) | $ | 117,209 |  |  | $ | 116,799 |  |  | $ | 123,528 |  |  | (5.1) | % |  | (5.4) | %
Same store rent and storage contribution (NOI)(2) | $ | 99,814 |  |  | $ | 99,687 |  |  | $ | 96,570 |  |  | 3.4 | % |  | 3.2 | %
Same store services contribution (NOI)(3) | $ | 17,395 |  |  | $ | 17,112 |  |  | $ | 26,958 |  |  | (35.5) | % |  | (36.5) | %
Total same store margin | 31.4 | % |  | 31.4 | % |  | 33.8 | % |  | -245 bps |  | -246 bps
Same store rent and storage margin(4) | 63.5 | % |  | 63.5 | % |  | 62.3 | % |  | 115 bps |  | 112 bps
Same store services margin(5) | 8.0 | % |  | 7.9 | % |  | 12.8 | % |  | -478 bps |  | -487 bps

| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of non-same store sites(6) | 77 |  |  |  | 13 |  | n/a |  | n/a
Non-same store revenues: | (Dollars in thousands) |  |  |  |
Rent and storage | $ | 68,001 |  |  | $ | 67,102 |  |  | $ | 11,429 |  |  | 495.0 | % |  | 487.1 | %
Warehouse services | 100,462 |  |  | 99,789 |  |  | 11,360 |  |  | 784.3 | % |  | 778.4 | %
Total non-same store revenues | 168,463 |  |  | 166,891 |  |  | 22,789 |  |  | 639.2 | % |  | 632.3 | %
Non-same store cost of operations: |  |  |  |  |  |  |  |  |
Power | 13,255 |  |  | 13,053 |  |  | 1,648 |  |  | 704.3 | % |  | 692.1 | %
Other facilities costs | 21,307 |  |  | 20,833 |  |  | 2,893 |  |  | 636.5 | % |  | 620.1 | %
Labor | 77,089 |  |  | 76,433 |  |  | 11,377 |  |  | 577.6 | % |  | 571.8 | %
Other services costs | 29,029 |  |  | 28,916 |  |  | 2,643 |  |  | 998.3 | % |  | 994.1 | %
Total non-same store cost of operations | $ | 140,680 |  |  | $ | 139,235 |  |  | $ | 18,561 |  |  | 657.9 | % |  | 650.1 | %
Non-same store contribution (NOI) | $ | 27,783 |  |  | $ | 27,656 |  |  | $ | 4,228 |  |  | 557.1 | % |  | 554.1 | %
Non-same store rent and storage contribution (NOI)(2) | $ | 33,439 |  |  | $ | 33,216 |  |  | $ | 6,888 |  |  | 385.5 | % |  | 382.2 | %
Non-same store services contribution (NOI)(3) | $ | (5,656) |  |  | $ | (5,560) |  |  | $ | (2,660) |  |  | (112.6) | % |  | (109.0) | %
Total non-same store margin | 16.5 | % |  | 16.6 | % |  | 18.6 | % |  | -206 bps |  | -198 bps
Non-same store rent and storage margin(4) | 49.2 | % |  | 49.5 | % |  | 60.3 | % |  | -1109 bps |  | -1077 bps
Non-same store services margin(5) | (5.6) | % |  | (5.6) | % |  | (23.4) | % |  | 1779 bps |  | 1784 bps

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| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Total warehouse segment revenues | $ | 542,047 |  |  | $ | 539,315 |  |  | $ | 388,024 |  |  | 39.7 | % |  | 39.0 | %
Total warehouse cost of operations | $ | 397,055 |  |  | $ | 394,860 |  |  | $ | 260,268 |  |  | 52.6 | % |  | 51.7 | %
Total warehouse segment contribution | $ | 144,992 |  |  | $ | 144,455 |  |  | $ | 127,756 |  |  | 13.5 | % |  | 13.1 | %

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis is the effect of changes in foreign currency exchange rates relative to the comparable prior period.
(2)Calculated as rent and storage revenues less power and other facilities costs.
(3)Calculated as warehouse services revenues less labor and other services costs.
(4)Calculated as rent and storage contribution (NOI) divided by rent and storage revenues.
(5)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.
(6)Non-same store warehouse count of 77 includes one recently leased warehouse in Australia, one warehouse acquired through the Newark Facility Management acquisition on September 1, 2021, two facilities acquired through the ColdCo acquisition on August 2, 2021, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020 and ten legacy facilities. During the third quarter of 2021, a leased facility from the Liberty Freezers acquisition was exited upon expiration of the lease. The results of these acquisitions are reflected in the results above since date of ownership.
n/a - not applicable, the change in actual and constant currency metrics does not apply to site count.
The following table provides certain operating metrics to explain the drivers of our same store performance.
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| Three Months Ended September 30, |  | Change
Units in thousands except per pallet and site number data - unaudited | 2021 |  | 2020 |
Number of same store sites | 162 |  | 162 |  | n/a
Same store rent and storage: |  |  |  |  |
Economic occupancy(1) |  |  |  |  |
Average occupied economic pallets | 2,878 |  |  | 2,942 |  |  | (2.2) | %
Economic occupancy percentage | 76.5 | % |  | 78.3 | % |  | -179 bps
Same store rent and storage revenues per economic occupied pallet | $ | 54.62 |  |  | $ | 52.66 |  |  | 3.7 | %
Constant currency same store rent and storage revenues per economic occupied pallet | $ | 54.58 |  |  | $ | 52.66 |  |  | 3.7 | %
Physical occupancy(2) |  |  |  |  |
Average physical occupied pallets | 2,553 |  |  | 2,661 |  |  | (4.1) | %
Average physical pallet positions | 3,760 |  |  | 3,756 |  |  | 0.1 | %
Physical occupancy percentage | 67.9 | % |  | 70.8 | % |  | -295 bps
Same store rent and storage revenues per physical occupied pallet | $ | 61.59 |  |  | $ | 58.23 |  |  | 5.8 | %
Constant currency same store rent and storage revenues per physical occupied pallet | $ | 61.54 |  |  | $ | 58.23 |  |  | 5.7 | %
Same store warehouse services: |  |  |  |  |
Throughput pallets (in thousands) | 7,328 |  |  | 7,467 |  |  | (1.9) | %
Same store warehouse services revenues per throughput pallet | $ | 29.52 |  |  | $ | 28.16 |  |  | 4.8 | %
Constant currency same store warehouse services revenues per throughput pallet | $ | 29.38 |  |  | $ | 28.16 |  |  | 4.3 | %
Number of non-same store sites(3) | 77 |  | 13 |  | n/a
Non-same store rent and storage: |  |  |  |  |
Economic occupancy(1) |  |  |  |  |
Average economic occupied pallets | 1,182 |  |  | 202 |  |  | 485.5 | %
Economic occupancy percentage | 74.3 | % |  | 63.5 | % |  | 1086 bps
Non-same store rent and storage revenues per economic occupied pallet | $ | 57.51 |  |  | $ | 56.59 |  |  | 1.6 | %
Constant currency non-same store rent and storage revenues per economic occupied pallet | $ | 56.75 |  |  | $ | 56.59 |  |  | 0.3 | %
Physical occupancy(2) |  |  |  |  |
Average physical occupied pallets | 1,156 |  |  | 188 |  |  | 515.0 | %
Average physical pallet positions | 1,591 |  |  | 318 |  |  | 399.9 | %
Physical occupancy percentage | 72.7 | % |  | 59.1 | % |  | 1360 bps
Non-same store rent and storage revenues per physical occupied pallet | $ | 58.81 |  |  | $ | 60.79 |  |  | (3.3) | %
Constant currency non-same store rent and storage revenues per physical occupied pallet | $ | 58.04 |  |  | $ | 60.79 |  |  | (4.5) | %
Non-same store warehouse services: |  |  |  |  |
Throughput pallets (in thousands) | 2,814 |  |  | 451 |  |  | 523.9 | %
Non-same store warehouse services revenues per throughput pallet | $ | 35.71 |  |  | $ | 25.19 |  |  | 41.7 | %
Constant currency non-same store warehouse services revenues per throughput pallet | $ | 35.47 |  |  | $ | 25.19 |  |  | 40.8 | %

(1)We define average economic occupancy as the aggregate number of physically occupied pallets and any additional pallets otherwise contractually committed for a given period, without duplication. We estimate the number of contractually committed pallet positions by taking into account actual pallet commitments specified in each customer’s contract, and subtracting the physical pallet positions.
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(2)We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the applicable period. We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.
(3)Non-same store warehouse count of 77 includes one recently leased warehouse in Australia, one warehouse acquired through the Newark Facility Management acquisition on September 1, 2021, two facilities acquired through the ColdCo acquisition on August 2, 2021, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020 and ten legacy facilities. During the third quarter of 2021, a leased facility from the Liberty Freezers acquisition was exited upon expiration of the lease. The results of these acquisitions are reflected in the results above since date of ownership.
Economic occupancy at our same stores was 76.5% for the three months ended September 30, 2021, a decrease of 179 basis points compared to 78.3% for the quarter ended September 30, 2020. Storage levels were lower than prior year levels due to ongoing supply chain disruption as a result of the COVID-19 pandemic, as well as food manufacturers producing at less than full capacity. As such, our customers’ existing inventories have continued to be drawn down to support steady consumer demand. Additionally, recent acquisitions came into the same store pool on January 1, 2021 which have a lower percentage of fixed commitment revenue compared to our legacy same stores. Our economic occupancy at our same stores for the three months ended September 30, 2021 was 866 basis points higher than our corresponding average physical occupancy of 67.9%. The decrease of 295 basis points in average physical occupancy compared to 70.8% for the quarter ended September 30, 2020 was partially driven by the factors mentioned above. Same store rent and storage revenues per economic occupied pallet increased 3.7% period-over-period, primarily driven by improvements in our commercial terms and contractual rate escalations and business mix. On a constant currency basis, our same store rent and storage revenues per occupied pallet increased 3.7% period-over-period.
Throughput pallets at our same stores were 7.3 million pallets for the three months ended September 30, 2021, a decrease of 1.9% from 7.5 million pallets for the three months ended September 30, 2020. This decrease was the result of the food manufacturers production decreasing as compared to the prior comparable period, also evidenced by the decrease in average physical occupancy. Food manufacturers have been unable to rebuild holdings in the supply chain primarily due to challenges in the labor market. Same store warehouse services revenue per throughput pallet increased 4.8% compared to the prior year primarily as a result of contractual rate escalations and favorable foreign currency translation as previously discussed. On a constant currency basis, our same store services revenue per throughput pallet increased 4.3% compared to the prior year.
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Third-Party Managed Segment
The following table presents the operating results of our third-party managed segment for the three months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of managed sites | 9 |  |  |  |  | 11 |  |  | n/a |  | n/a
| (Dollars in thousands) |  |  |  |
Third-party managed revenues | $ | 87,782 |  |  | $ | 87,610 |  |  | $ | 75,338 |  |  | 16.5 | % |  | 16.3 | %
Third-party managed cost of operations | 83,231 |  |  | 83,095 |  |  | 71,945 |  |  | 15.7 | % |  | 15.5 | %
Third-party managed segment contribution | $ | 4,551 |  |  | $ | 4,515 |  |  | $ | 3,393 |  |  | 34.1 | % |  | 33.1 | %
Third-party managed margin | 5.2 | % |  | 5.2 | % |  | 4.5 | % |  | 68 bps |  | 65 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Third-party managed revenues were $87.8 million for the three months ended September 30, 2021, an increase of $12.4 million, or 16.5%, compared to $75.3 million for the three months ended September 30, 2020. On a constant currency basis, third-party managed revenues were $87.6 million for the three months ended September 30, 2021, an increase of $12.3 million, or 16.3%, from the three months ended September 30, 2020. This increase was a result of higher pass-through labor expenses in our domestic and foreign managed operations due to the consumer demand shift to retail, higher business volume from Australia managed and paired with its favorable impact of foreign currency translation, partially offset by the exit of one Canadian managed site in August 2020.
Third-party managed cost of operations was $83.2 million for the three months ended September 30, 2021, an increase of $11.3 million, or 15.7%, compared to $71.9 million for the three months ended September 30, 2020. Third-party managed cost of operations increased as a result of the higher labor costs and management fee as discussed in the revenue trends above.
Third-party managed segment contribution (NOI) was $4.6 million for the three months ended September 30, 2021, an increase of $1.2 million, or 34.1%, compared to $3.4 million for the three months ended September 30, 2020.
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Transportation Segment
The following table presents the operating results of our transportation segment for the three months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
| (Dollars in thousands) |  |  |  |
Transportation revenues | $ | 78,979 |  |  | $ | 78,068 |  |  | $ | 34,096 |  |  | 131.6 | % |  | 129.0 | %
Transportation cost of operations | 72,728 |  |  | 71,942 |  |  | 29,909 |  |  | 143.2 | % |  | 140.5 | %
Transportation segment contribution (NOI) | $ | 6,251 |  |  | $ | 6,126 |  |  | $ | 4,187 |  |  | 49.3 | % |  | 46.3 | %
Transportation margin | 7.9 | % |  | 7.8 | % |  | 12.3 | % |  | -437 bps |  | -443 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Transportation revenues were $79.0 million for the three months ended September 30, 2021, an increase of $44.9 million, or 131.6%, compared to $34.1 million for the three months ended September 30, 2020. The increase was primarily due to the revenue associated with transportation operations from the Hall’s acquisition, which closed on November 2, 2020, the Agro acquisition, which closed on December 30, 2020 and to a much lesser extent the KMT Brrr! acquisition which closed in early May 2021 and the ColdCo acquisition which closed on August 2, 2021. The increase was partially offset by the net decrease in revenue from the rationalization of certain domestic legacy market operations.
Transportation cost of operations was $72.7 million for the three months ended September 30, 2021, an increase of $42.8 million, or 143.2%, compared to $29.9 million for the three months ended September 30, 2020. The increase was driven by the acquisitions and revenue trends mentioned above and a reduction in market capacity due to the COVID-19 pandemic, which has caused an increase in carrier fees. Additionally, this is partially offset by the net decrease of costs from the exit of certain domestic market operations.
Transportation segment contribution (NOI) was $6.3 million for the three months ended September 30, 2021, an increase of 49.3% compared to the three months ended September 30, 2020. Transportation segment margin decreased 437 basis points from the three months ended September 30, 2020, to 7.9% from 12.3%. The decrease in margin was primarily due to the acquisition of lower-margin transportation business compared to our legacy operations, coupled with higher carrier fees as a result of the COVID-19 pandemic.
Other Consolidated Operating Expenses
Depreciation and amortization. Depreciation and amortization expense was $70.6 million for the three months ended September 30, 2021, an increase of $17.0 million, or 31.7%, compared to $53.6 million for the three months ended September 30, 2020. This increase was primarily due to the acquisitions in late 2020 and 2021.
Selling, general and administrative. Corporate-level selling, general and administrative expenses were $45.5 million for the three months ended September 30, 2021, an increase of $9.6 million, or 26.6%, compared to $36.0 million for the three months ended September 30, 2020. Included in these amounts are business development expenses attributable to new business pursuits, supply chain solutions and underwriting, facility development, customer on-boarding, and engineering and consulting services to support our customers in the cold chain. We believe these costs are comparable to leasing costs for other publicly-traded REITs. The increase was driven by costs assumed from the Agro and Hall’s acquisitions, net of synergies realized and higher third-party professional
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and legal fees, partially offset by lower short-term incentive plan expense based on underperformance compared to budget.
Acquisition, litigation and other, net. Corporate-level acquisition, litigation and other, net expenses were $6.3 million for the three months ended September 30, 2021, an increase of $1.1 million compared to the three months ended September 30, 2020. During the three months ended September 30, 2021, we incurred $6.3 million of acquisition related expenses primarily comprised of professional fees and integration related costs in connection with completed and potential acquisitions. During the three months ended September 30, 2020, we incurred an aggregate $5.3 million of acquisition, litigation and other, net expenses, of which $4.9 million related to acquisition expenses primarily composed of professional fees and integration related costs in connection with the Agro acquisition as well as other potential acquisitions.
Impairment of long-lived assets. For the three months ended September 30, 2021, we recorded impairment charges totaling $1.8 million, related to the write-off of certain software costs for programs which would no longer be used and costs incurred for development projects which management determined it would not continue to pursue. For the three months ended September 30, 2020, we recorded an impairment charge of $2.6 million due to the strategic decision to accelerate our exit of a managed facility and another managed facility that we planned to exit by the end of 2020. We recorded an impairment charge for the remaining net book value related to the long-lived assets, including building improvements and racking, which would not be removed prior to our exit of these facilities.
Other Expense and Income
The following table presents other items of expense and income for the three months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Change
| 2021 |  | 2020 |  | %
Other (expense) income: | (Dollars in thousands) |  |
Interest expense | $ | (25,303) |  |  | $ | (23,066) |  |  | 9.7 | %
Loss on debt extinguishment, modifications and termination of derivative instruments | $ | (627) |  |  | $ | — |  |  | 100.0 | %
Other, net | $ | (523) |  |  | $ | (1,198) |  |  | (56.3) | %

Interest expense. Interest expense was $25.3 million for the three months ended September 30, 2021, an increase of $2.2 million, or 9.7%, compared to $23.1 million for the three months ended September 30, 2020. The increase was primarily due to the issuance of the Series D and Series E Senior Unsecured Notes in December 2020, combined with short-term withdrawals on our Senior Unsecured Revolving Credit Facility. This was partially offset by the decrease in interest expense on our Senior Unsecured Term Loan A Facility due to the early principal repayment of $100.0 million and $200.0 million in December 2020 and January 2021, respectively. The effective interest rate of our outstanding debt decreased from 4.13% in the third quarter of 2020 to 3.09% in the third quarter of 2021.
Loss on debt extinguishment, modifications and termination of derivative instruments. Loss on debt extinguishment, modifications, and termination of derivative instruments of $0.6 million for the three months ended September 30, 2021 was primarily driven by the amortization of fees paid for the termination of interest rate swaps during 2020.
Other expense, net. Other expense, net was $0.5 million for the three months ended September 30, 2021, a decrease of $0.7 million, compared to $1.2 million for the three months ended September 30, 2020. This decrease is due to loss on various asset disposals in 2020 that did not recur in 2021.
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Income Tax Expense
Income tax benefit for the three months ended September 30, 2021 was $0.2 million, an increase of $1.0 million from an income tax expense of $0.8 million for the three months ended September 30, 2020. The change in income tax expense was primarily attributable to the decrease in valuation allowance related to recent acquisitions. The remainder was primarily attributable to losses generated from our foreign operations during 2021.
Comparison of Results for the Nine Months Ended September 30, 2021 and 2020
Warehouse Segment
The following table presents the operating results of our warehouse segment for the nine months ended September 30, 2021 and 2020.

| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
| (Dollars in thousands) |  |  |  |
Rent and storage | $ | 642,787 |  |  | $ | 633,774 |  |  | $ | 492,328 |  |  | 30.6 | % |  | 28.7 | %
Warehouse services | 888,445 |  |  | 869,710 |  |  | 649,175 |  |  | 36.9 | % |  | 34.0 | %
Total warehouse segment revenues | 1,531,232 |  |  | 1,503,484 |  |  | 1,141,503 |  |  | 34.1 | % |  | 31.7 | %
Power | 97,315 |  |  | 96,098 |  |  | 68,918 |  |  | 41.2 | % |  | 39.4 | %
Other facilities costs (2) | 155,143 |  |  | 152,699 |  |  | 102,499 |  |  | 51.4 | % |  | 49.0 | %
Labor | 684,475 |  |  | 669,918 |  |  | 502,087 |  |  | 36.3 | % |  | 33.4 | %
Other services costs (3) | 158,747 |  |  | 156,781 |  |  | 93,338 |  |  | 70.1 | % |  | 68.0 | %
Total warehouse segment cost of operations | $ | 1,095,680 |  |  | $ | 1,075,496 |  |  | $ | 766,842 |  |  | 42.9 | % |  | 40.3 | %
Warehouse segment contribution (NOI) | $ | 435,552 |  |  | $ | 427,988 |  |  | $ | 374,661 |  |  | 16.3 | % |  | 14.2 | %
Warehouse rent and storage contribution (NOI) (4) | $ | 390,329 |  |  | $ | 384,977 |  |  | $ | 320,911 |  |  | 21.6 | % |  | 20.0 | %
Warehouse services contribution (NOI) (5) | $ | 45,223 |  |  | $ | 43,011 |  |  | $ | 53,750 |  |  | (15.9) | % |  | (20.0) | %
Total warehouse segment margin | 28.4 | % |  | 28.5 | % |  | 32.8 | % |  | -438 bps |  | -436 bps
Rent and storage margin(6) | 60.7 | % |  | 60.7 | % |  | 65.2 | % |  | -446 bps |  | -444 bps
Warehouse services margin(7) | 5.1 | % |  | 4.9 | % |  | 8.3 | % |  | -319 bps |  | -333 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
(2)Includes real estate rent expense of $30.7 million and $9.2 million, on an actual basis, for the nine months ended September 30, 2021 and 2020, respectively.
(3)Includes non-real estate rent expense (equipment lease and rentals) of $8.7 million and $7.5 million, on an actual basis, for the nine months ended September 30, 2021 and 2020, respectively.
(4)Calculated as rent and storage revenues less power and other facilities costs.
(5)Calculated as warehouse services revenues less labor and other services costs.
(6)Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenues.
(7)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.
Warehouse segment revenues were $1,531.2 million for the nine months ended September 30, 2021 an increase of $389.7 million, or 34.1%, compared to $1,141.5 million for the nine months ended September 30, 2020. On a constant currency basis, our warehouse segment revenues were $1,503.5 million for the nine months ended
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September 30, 2021, an increase of $362.0 million or 31.7%, from the nine months ended September 30, 2020. Approximately $371.1 million of the increase, on an actual currency basis, was driven by acquisitions completed during 2020 and 2021, including the growth experienced period-over-period during overlapping periods of ownership. We acquired 54 warehouse facilities as a result of the Agro and Hall’s acquisitions between October 1, 2020 and December 31, 2020. As a result, these facilities are reflected in the entirety of the current period but none of the comparable prior period. On August 31, 2020, we completed the acquisition of two facilities as a result of the AM-C acquisition and one facility as a result of the Caspers acquisition, and the results of these acquisitions are included in the results of prior period since the date of acquisition and for the entirety of the current period. Additionally, we acquired four facilities on March 1, 2021 as a result of the Liberty acquisition, two facilities on May 5, 2021 as a result of the KMT Brrr! acquisition, one facility on May 28, 2021 as a result of the Bowman Stores acquisition, two facilities on August 2, 2021 as a result of the ColdCo acquisition and one facility on September 1, 2021 as a result of the Newark Facility Management acquisition, and the results of these facilities are included in the current period since the date of acquisition. Revenue growth was also due to contractual rate escalations and our recently completed developments. This was partially offset by COVID-19 and the related labor challenges which continued to impact food production. The foreign currency translation of revenues earned by our foreign operations had a $27.7 million favorable impact during the nine months ended September 30, 2021, which was mainly driven by the weakening of the U.S. dollar over the Australian dollar, Euro, and Canadian dollar.
Warehouse segment cost of operations was $1,095.7 million for the nine months ended September 30, 2021, an increase of $328.8 million, or 42.9%, compared to the nine months ended September 30, 2020. On a constant currency basis, our warehouse segment cost of operations was $1,075.5 million for the three months ended September 30, 2021, an increase of $308.7 million, or 40.3%, from the nine months ended September 30, 2020. Approximately $288.2 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment we acquired in connection with the aforementioned acquisitions. In addition, we incurred increases in our cost of operations in response to COVID-19, power, labor, property tax and insurance costs, all of which are reflective of current market trends. This is partially offset by the appreciation bonus we paid to front-line associates to recognize the dedication and efforts of our associates during the COVID-19 pandemic during the second quarter of 2020, which totaled $4.3 million. Additionally, the foreign currency translation of expenses incurred by our foreign operations had a net $20.2 million unfavorable impact during the nine months ended September 30, 2021.
For the nine months ended September 30, 2021, warehouse segment contribution (NOI), increased $60.9 million, or 16.3%, to $435.6 million for the nine months ended September 30, 2021, compared to $374.7 million for the nine months ended September 30, 2020. The foreign currency translation of our results of operations had a $7.6 million favorable impact to the warehouse segment contribution period-over-period. On a constant currency basis, warehouse segment NOI increased $53.3 million. Approximately $82.9 million of the increase, on an actual basis, was driven by the additional facilities in the warehouse segment as a result of the aforementioned acquisitions, including the growth and synergies experienced period-over-period during overlapping periods of ownership. The remainder of the increase was driven by contractual rate escalations, the impact of the appreciation bonus paid during the second quarter of 2020 and disciplined cost controls through the Americold Operating System of our other services costs, which allowed us to generate higher contribution margins. The increases were partially offset by the currency translation impact of the strengthening of the U.S. dollar, lower holdings driven by the impact of COVID-19 on the food manufacturing supply chain and the increase in costs including power, property insurance and taxes and facility leasing costs.
Same Store and Non-Same Store Analysis
We had 162 same stores for the nine months ended September 30, 2021. Please see “How We Assess the Performance of Our Business—Same Store Analysis” above for a reconciliation of the change in the same store
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portfolio from period to period. Amounts related to the acquisitions of Agro, AM-C Warehouses, Bowman Stores, Caspers, ColdCo, Halls, KMT Brrr!, Liberty, Newark, ColdCo, one recently leased warehouse in Australia, as well as certain expansion and development projects not yet stabilized are reflected within non-same store results.
The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the nine months ended September 30, 2021 and 2020.

| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of same store sites | 162 |  |  |  | 162 |  | n/a |  | n/a
Same store revenues: | (Dollars in thousands) |  |  |  |
Rent and storage | $ | 457,384 |  |  | $ | 453,945 |  |  | $ | 460,623 |  |  | (0.7) | % |  | (1.4) | %
Warehouse services | 631,694 |  |  | 619,336 |  |  | 619,002 |  |  | 2.1 | % |  | 0.1 | %
Total same store revenues | 1,089,078 |  |  | 1,073,281 |  |  | 1,079,625 |  |  | 0.9 | % |  | (0.6) | %
Same store cost of operations: |  |  |  |  |  |  |  |  |
Power | 65,287 |  |  | 65,068 |  |  | 64,742 |  |  | 0.8 | % |  | 0.5 | %
Other facilities costs | 97,735 |  |  | 96,917 |  |  | 94,818 |  |  | 3.1 | % |  | 2.2 | %
Labor | 488,382 |  |  | 478,435 |  |  | 468,955 |  |  | 4.1 | % |  | 2.0 | %
Other services costs | 85,747 |  |  | 85,374 |  |  | 85,435 |  |  | 0.4 | % |  | (0.1) | %
Total same store cost of operations | $ | 737,151 |  |  | $ | 725,794 |  |  | $ | 713,950 |  |  | 3.2 | % |  | 1.7 | %
Same store contribution (NOI) | $ | 351,927 |  |  | $ | 347,487 |  |  | $ | 365,675 |  |  | (3.8) | % |  | (5.0) | %
Same store rent and storage contribution (NOI)(2) | $ | 294,362 |  |  | $ | 291,960 |  |  | $ | 301,063 |  |  | (2.2) | % |  | (3.0) | %
Same store services contribution (NOI)(3) | $ | 57,565 |  |  | $ | 55,527 |  |  | $ | 64,612 |  |  | (10.9) | % |  | (14.1) | %
Total same store margin | 32.3 | % |  | 32.4 | % |  | 33.9 | % |  | -156 bps |  | -149 bps
Same store rent and storage margin(4) | 64.4 | % |  | 64.3 | % |  | 65.4 | % |  | -100 bps |  | -104 bps
Same store services margin(5) | 9.1 | % |  | 9.0 | % |  | 10.4 | % |  | -133 bps |  | -147 bps

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| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of non-same store sites | 77 |  |  |  | 13 |  | n/a |  | n/a
Non-same store revenues: | (Dollars in thousands) |  |  |  |
Rent and storage | $ | 185,403 |  |  | $ | 179,829 |  |  | $ | 31,705 |  |  | 484.8 | % |  | 467.2 | %
Warehouse services | 256,751 |  |  | 250,373 |  |  | 30,173 |  |  | 750.9 | % |  | 729.8 | %
Total non-same store revenues | 442,154 |  |  | 430,202 |  |  | 61,878 |  |  | 614.6 | % |  | 595.2 | %
Non-same store cost of operations: |  |  |  |  |  |  |  |  |
Power | 32,028 |  |  | 31,030 |  |  | 4,176 |  |  | 667.0 | % |  | 643.1 | %
Other facilities costs | 57,408 |  |  | 55,782 |  |  | 7,681 |  |  | 647.4 | % |  | 626.2 | %
Labor | 196,092 |  |  | 191,483 |  |  | 33,132 |  |  | 491.9 | % |  | 477.9 | %
Other services costs | 73,000 |  |  | 71,407 |  |  | 7,904 |  |  | 823.6 | % |  | 803.4 | %
Total non-same store cost of operations | $ | 358,528 |  |  | $ | 349,702 |  |  | $ | 52,893 |  |  | 577.8 | % |  | 561.1 | %
Non-same store contribution (NOI) | $ | 83,626 |  |  | $ | 80,500 |  |  | $ | 8,985 |  |  | 830.7 | % |  | 795.9 | %
Non-same store rent and storage contribution (NOI)(2) | $ | 95,967 |  |  | $ | 93,017 |  |  | $ | 19,848 |  |  | 383.5 | % |  | 368.6 | %
Non-same store services contribution (NOI)(3) | $ | (12,341) |  |  | $ | (12,517) |  |  | $ | (10,863) |  |  | (13.6) | % |  | (15.2) | %
Total non-same store margin | 18.9 | % |  | 18.7 | % |  | 14.5 | % |  | 439 bps |  | 419 bps
Non-same store rent and storage margin(4) | 51.8 | % |  | 51.7 | % |  | 62.6 | % |  | -1084 bps |  | -1088 bps
Non-same store services margin(5) | (4.8) | % |  | (5.0) | % |  | (36.0) | % |  | 3120 bps |  | 3100 bps

| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Total warehouse segment revenues | $ | 1,531,232 |  |  | $ | 1,503,484 |  |  | $ | 1,141,503 |  |  | 34.1 | % |  | 31.7 | %
Total warehouse cost of operations | $ | 1,095,680 |  |  | $ | 1,075,496 |  |  | $ | 766,842 |  |  | 42.9 | % |  | 40.3 | %
Total warehouse segment contribution | $ | 435,552 |  |  | $ | 427,988 |  |  | $ | 374,661 |  |  | 16.3 | % |  | 14.2 | %

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis is the effect of changes in foreign currency exchange rates relative to the comparable prior period.
(2)Calculated as rent and storage revenues less power and other facilities costs.
(3)Calculated as warehouse services revenues less labor and other services costs.
(4)Calculated as rent and storage contribution (NOI) divided by rent and storage revenues.
(5)Calculated as warehouse services contribution (NOI) divided by warehouse services revenues.
(6)Non-same store warehouse count of 77 includes one recently leased warehouse in Australia, one warehouse acquired through the Newark Facility Management acquisition on September 1, 2021, two facilities acquired through the ColdCo acquisition on August 2, 2021, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020 and ten legacy facilities. During the third quarter of 2021, a leased facility from the Liberty Freezers acquisition was exited upon expiration of the lease. The results of these acquisitions are reflected in the results above since date of ownership.
n/a - not applicable, the change in actual and constant currency metrics does not apply to site count
The following table provides certain operating metrics to explain the drivers of our same store performance.
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| Nine Months Ended September 30, |  |
Units in thousands except per pallet and site number data - unaudited | 2021 |  | 2020 |  | Change
Number of same store sites | 162 |  |  | 162 |  |  | n/a
Same store rent and storage: |  |  |  |  |
Economic occupancy(1) |  |  |  |  |
Average occupied economic pallets | 2,865 |  |  | 3,003 |  |  | (4.6) | %
Economic occupancy percentage | 76.2 | % |  | 80.1 | % |  | -393 bps
Same store rent and storage revenues per economic occupied pallet | $ | 159.64 |  |  | $ | 153.38 |  |  | 4.1 | %
Constant currency same store rent and storage revenues per economic occupied pallet | $ | 158.44 |  |  | $ | 153.38 |  |  | 3.3 | %
Physical occupancy(2) |  |  |  |  |
Average physical occupied pallets | 2,543 |  |  | 2,753 |  |  | (7.6) | %
Average physical pallet positions | 3,762 |  |  | 3,750 |  |  | 0.3 | %
Physical occupancy percentage | 67.6 | % |  | 73.4 | % |  | -582 bps
Same store rent and storage revenues per physical occupied pallet | $ | 179.85 |  |  | $ | 167.31 |  |  | 7.5 | %
Constant currency same store rent and storage revenues per physical occupied pallet | $ | 178.50 |  |  | $ | 167.31 |  |  | 6.7 | %
Same store warehouse services: |  |  |  |  |
Throughput pallets (in thousands) | 21,805 |  |  | 22,547 |  |  | (3.3) | %
Same store warehouse services revenues per throughput pallet | $ | 28.97 |  |  | $ | 27.45 |  |  | 5.5 | %
Constant currency same store warehouse services revenues per throughput pallet | $ | 28.40 |  |  | $ | 27.45 |  |  | 3.5 | %
Number of non-same store sites(3) | 77 |  |  | 13 |  |  | n/a
Non-same store rent and storage: |  |  |  |  |
Economic occupancy(1) |  |  |  |  |
Average economic occupied pallets | 1,129 |  |  | 185 |  |  | 509.0 | %
Economic occupancy percentage | 75.9 | % |  | 63.3 | % |  | 1260 bps
Non-same store rent and storage revenues per economic occupied pallet | $ | 164.21 |  |  | $ | 171.00 |  |  | (4.0) | %
Constant currency non-same store rent and storage revenues per economic occupied pallet | $ | 159.27 |  |  | $ | 171.00 |  |  | (6.9) | %
Physical occupancy(2) |  |  |  |  |
Average physical occupied pallets | 1,105 |  |  | 176 |  |  | 525.9 | %
Average physical pallet positions | 1,488 |  |  | 293 |  |  | 407.9 |
Physical occupancy percentage | 74.2 | % |  | 60.2 | % |  | 1400 bps
Non-same store rent and storage revenues per physical occupied pallet | $ | 167.84 |  |  | $ | 179.65 |  |  | (6.6) | %
Constant currency non-same store rent and storage revenues per physical occupied pallet | $ | 162.79 |  |  | $ | 179.65 |  |  | (9.4) | %
Non-same store warehouse services: |  |  |  |  |
Throughput pallets (in thousands) | 7,786 |  |  | 1,286 |  |  | 505.3 | %
Non-same store warehouse services revenues per throughput pallet | $ | 32.97 |  |  | $ | 23.46 |  |  | 40.6 | %
Constant currency non-same store warehouse services revenues per throughput pallet | $ | 32.16 |  |  | $ | 23.46 |  |  | 37.1 | %

(1)We define average economic occupancy as the aggregate number of physically occupied pallets and any additional pallets otherwise contractually committed for a given period, without duplication. We estimate the number of contractually committed pallet positions by taking into account actual pallet commitments specified in each customer’s contract, and subtracting the physical pallet positions.
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(2)We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the applicable period. We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on a formula utilizing the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.
(3)Non-same store warehouse count of 77 includes one recently leased warehouse in Australia, one warehouse acquired through the Newark Facility Management acquisition on September 1, 2021, two facilities acquired through the ColdCo acquisition on August 2, 2021, one warehouse acquired through the Bowman stores acquisition on May 28, 2021, two warehouses acquired through the KMT Brrr! acquisition on May 5, 2021, four warehouses acquired through the Liberty Freezers acquisition on March 1, 2021, 46 warehouses acquired through the Agro acquisition on December 30, 2020, eight warehouses acquired through the Hall’s acquisition on November 2, 2020, three warehouses acquired through the Casper’s and AM-C warehouse acquisitions on August 31, 2020 and ten legacy facilities. During the third quarter of 2021, a leased facility from the Liberty Freezers acquisition was exited upon expiration of the lease. The results of these acquisitions are reflected in the results above since date of ownership.
Economic occupancy at our same stores was 76.2% for the nine months ended September 30, 2021, a decrease of 393 basis points compared to 80.1% for the nine months ended September 30, 2020. Storage levels were lower than prior year levels due to ongoing supply chain disruption as a result of the COVID-19 pandemic, as well as food manufacturers producing at less than full capacity. As such, our customers’ existing inventories have continued to be drawn down to support steady consumer demand. Addition ally, recent acquisitions came into the same store pool during the first quarter of 2021 which have a lower percentage of fixed commitment revenue compared to our legacy same stores. Our third quarter 2020 economic occupancy at our same stores was 856 basis points lower than our corresponding average physical occupancy of 67.6%. The decrease of 582 basis points in average physical occupancy compared to 73.4% for the nine months ended September 30, 2020 was driven by supply chain fluctuations caused by the COVID-19 pandemic. Same store rent and storage revenues per economic occupied pallet increased 4.1% period-over-period, primarily driven by improvements in our commercial terms and contractual rate escalations. On a constant currency basis, our same store rent and storage revenues per occupied pallet increased 3.3% period-over-period.
Throughput pallets at our same stores were 21.8 million pallets for the nine months ended September 30, 2021, a decrease of 3.3% from the nine months ended September 30, 2020. This decrease wa s the result of the COVID-19 related impacts in various sectors and commodities, and was primarily driven by the unprecedented surge in demand in retail during the first half of 2020. As food manufacturers production has not reached full pre-pandemic capacity, throughput has been impacted, with modest improvement during the second quarter of 2021. Food manufacturers have been unable to rebuild holdings in the supply chain due to challenges in the labor market. S ame store warehouse services revenues per throughput pallet increased 5.5% period-over-period, as a result of a more favorable customer mix, contractual rate escalations and an increase in higher priced value-added services within the retail sector such as case-picking, blast freezing and repackaging and contractual rate escalations, paired with favorable foreign currency translation as previously discussed. On a constant currency basis, our same store services revenues per throughput pallet increased 3.5% from the nine months ended September 30, 2020.
Third-Party Managed Segment
The following table presents the operating results of our third-party managed segment for the nine months ended September 30, 2021 and 2020.
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| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
Number of managed sites | 9 |  |  |  |  | 11 |  |  | n/a |  | n/a
| (Dollars in thousands) |  |  |  |
Third-party managed revenues | $ | 233,027 |  |  | $ | 231,211 |  |  | $ | 213,213 |  |  | 9.3 | % |  | 8.4 | %
Third-party managed cost of operations | 222,401 |  |  | 220,895 |  |  | 202,752 |  |  | 9.7 | % |  | 8.9 | %
Third-party managed segment contribution | $ | 10,626 |  |  | $ | 10,316 |  |  | $ | 10,461 |  |  | 1.6 | % |  | (1.4) | %
Third-party managed margin | 4.6 | % |  | 4.5 | % |  | 4.9 | % |  | -35 bps |  | -44 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Third-party managed revenues were $233.0 million for the nine months ended September 30, 2021, an increase of $19.8 million, or 9.3%, compared to $213.2 million for the nine months ended September 30, 2020. On a constant currency basis, third-party managed revenues were $231.2 million for the nine months ended September 30, 2021, an increase of $18.0 million, or 8.4%, from the nine months ended September 30, 2020. This increase was a result of higher pass-through labor expenses in our domestic and foreign managed operations due to the consumer demand shift to retail, higher business volume from Australia managed and paired with its favorable impact of foreign currency translation, partially offset by the exit of two Canadian managed sites during the second half of 2020.
Third-party managed cost of operations was $222.4 million for the nine months ended September 30, 2021, an increase of $19.6 million, or 9.7%, compared to $202.8 million for the nine months ended September 30, 2020. On a constant currency basis, third-party managed cost of operations was $220.9 million for the nine months ended September 30, 2021, an increase of $18.1 million, or 8.9%, from the nine months ended September 30, 2020. Third-party managed cost of operations increased as a result of the revenue trends described above.
Third-party managed segment contribution (NOI) was $10.6 million for the nine months ended September 30, 2021, an increase of $0.2 million, or 1.6%, compared to $10.5 million for the nine months ended September 30, 2020. On a constant currency basis, third-party managed segment contribution (NOI) was $10.3 million for the nine months ended September 30, 2021, a decrease of $0.1 million, or 1.4%.
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Transportation Segment
The following table presents the operating results of our transportation segment for the nine months ended September 30, 2021 and 2020.

| Nine Months Ended September 30, |  | Change
| 2021 actual |  | 2021 constant currency(1) |  | 2020 actual |  | Actual |  | Constant currency
| (Dollars in thousands) |  |  |  |
Transportation revenues | $ | 234,051 |  |  | $ | 232,332 |  |  | $ | 104,874 |  |  | 123.2 | % |  | 121.5 | %
Total transportation cost of operations | 211,847 |  |  | 210,770 |  |  | 91,110 |  |  | 132.5 | % |  | 131.3 | %
Transportation segment contribution (NOI) | $ | 22,204 |  |  | $ | 21,562 |  |  | $ | 13,764 |  |  | 61.3 | % |  | 56.7 | %
Transportation margin | 9.5 | % |  | 9.3 | % |  | 13.1 | % |  | -364 bps |  | -384 bps

(1)The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
Transportation revenues were $234.1 million for the nine months ended September 30, 2021, an increase of $129.2 million, or 123.2%, compared to $104.9 million for the nine months ended September 30, 2020. The increase was primarily due to the revenue associated with transportation operations from the Hall’s acquisition, which closed on November 2, 2020, the Agro acquisition, which closed on December 30, 2020 and to a much lesser extent the KMT Brrr! acquisition which closed in early May 2021 and the ColdCo acquisition which closed on August 2, 2021. Furthermore, this is offset by the net decrease in revenue from the rationalization of certain domestic market operations. On a constant currency basis, transportation revenues were $232.3 million for the nine months ended September 30, 2021, an increase of $127.5 million, or 121.5%, from the nine months ended September 30, 2020.
Transportation cost of operations was $211.8 million for the nine months ended September 30, 2021, an increase of $120.7 million, or 132.5%, compared to $91.1 million for the nine months ended September 30, 2020. On a constant currency basis, transportation cost of operations was $210.8 million for the nine months ended September 30, 2021, an increase of $119.7 million, or 131.3%, from the nine months ended September 30, 2020. The increase was driven by the acquisitions mentioned above and due to a reduction in market capacity due to the COVID-19 pandemic, which has caused an increase in carrier fees. Additionally, this is partially offset by the net decrease of costs from the exit of certain domestic market operations.
Transportation segment contribution (NOI) was $22.2 million for the nine months ended September 30, 2021, an increase of $8.4 million compared to the nine months ended September 30, 2020. Transportation segment margin decreased 364 basis points from the nine months ended September 30, 2020, to 9.5% from 13.1%. On a constant currency basis, transportation segment contribution was $21.6 million for the nine months ended September 30, 2021, an increase of $7.8 million compared to the nine months ended September 30, 2020. The decrease in margin was primarily due to the acquisition of lower-margin transportation business compared to our legacy operations, coupled with higher carrier fees as a result of the COVID-19 pandemic.
Other Consolidated Operating Expenses
Depreciation and amortization. Depreciation and amortization expense was $232.2 million for the nine months ended September 30, 2021, an increase of $74.7 million, or 47.4%, compared to $157.6 million for the nine months ended September 30, 2020. This increase was primarily due to the acquisitions in late 2020 and 2021.
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Selling, general and administrative. Corporate-level selling, general and administrative expenses were $133.1 million for the nine months ended September 30, 2021, an increase of $27.9 million, or 26.5%, compared to $105.2 million for the nine months ended September 30, 2020. Included in these amounts are business development expenses attributable to new business pursuits, supply chain solutions and underwriting, facility development, customer on-boarding, and engineering and consulting services to support our customers in the cold chain. We believe these costs are comparable to leasing costs for other publicly-traded REITs. The increase was driven by costs assumed from the Agro and Hall’s acquisitions, net of synergies realized and higher third-party professional fees, partially offset by lower bonus compensation expense in connection with the short-term incentive plan, due to underperformance as compared to budget.
Acquisition, litigation and other, net. Corporate-level acquisition, litigation and other, net expenses were $31.0 million for the nine months ended September 30, 2021, an increase of $21.2 million compared to the nine months ended September 30, 2020. During the nine months ended September 30, 2021, we incurred $22.9 million of acquisition related expenses primarily composed of professional fees and integration related costs, including severance and employee retention expenses, in connection with completed and potential acquisitions, primarily related to the Agro acquisition. We also incurred $3.5 million of ongoing costs related to the cyber event that occurred in late 2020. During the nine months ended September 30, 2020, we incurred $8.3 million of acquisition related expenses primarily primarily composed of professional fees and integration related costs in connection with completed and potential acquisitions, primarily related to the recently announced Agro Merchants Acquisition, and employee retention. Additionally, we incurred $1.0 million of severance related to reduction in headcount as a result of the synergies from acquisitions and realignment of our international operations during the nine months ended September 30, 2020.
Impairment of long-lived assets. For the nine months ended September 30, 2021, we recorded impairment charges totaling $3.3 million, of which $1.7 million related to costs associated with development projects which management determined it would no longer pursue, and a charge of $1.6 million for certain software costs that were determined no longer usable. For the nine months ended September 30, 2020, we recorded impairment charges of $6.3 million, which included a $3.7 million impairment charge related to the anticipated sale of our quarry business, which was subsequently completed on July 1, 2020, and an impairment charge of $2.6 million related to the remaining net book value of assets due to the exit of two leased managed facilities during 2020.
Gain from sale of real estate. For the nine months ended September 30, 2020, we recorded a $21.4 million gain from the sale of real estate. On January 31, 2020, we received official notice from a customer to exercise its contractual call option to purchase land from us in Sydney, Australia, which we previously purchased for future development. We received sale proceeds upon exercise of the call option during the first quarter of 2020, resulting in a $2.5 million gain on sale. Additionally, on June 19, 2020, we completed the sale of a facility in our Warehouse segment, and began to transition the business to other nearby facilities, resulting in a $19.4 million gain from sale of real estate.
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Other Expense and Income
The following table presents other items of income and expense for the nine months ended September 30, 2021 and 2020.

| Nine Months Ended September 30, |  | Change
| 2021 |  | 2020 |  | %
Other (expense) income: | (Dollars in thousands) |  |
Interest expense | $ | (77,838) |  |  | $ | (70,114) |  |  | 11.0 | %
Loss on debt extinguishment, modifications and termination of derivative instruments | $ | (5,051) |  |  | $ | (781) |  |  | n/r
Other, net | $ | (147) |  |  | $ | 232 |  |  | (163.4) | %

n/r: not relevant
Interest expense. Interest expense was $77.8 million for the nine months ended September 30, 2021, an increase of $7.7 million, or 11.0%, compared to $70.1 million for the nine months ended September 30, 2020. The increase was primarily due to the issuance of the Series D and Series E Senior Unsecured Notes in December 2020. This was partially offset by the decrease in interest expense on our Senior Unsecured Term Loan A Facility due to the early principal repayment of $100.0 million and $200.0 million in December 2020 and January 2021, respectively. The effective interest rate of our outstanding debt has decreased from 4.19% for the nine months ended September 30, 2020 to 3.19% for the nine months ended September 30, 2021, however, outstanding principal has increased from $1.8 billion as of September 30, 2020 to $2.7 billion as of September 30, 2021.
Loss on debt extinguishment, modifications and termination of derivative instruments. Loss on debt extinguishment, modifications, and termination of derivative instruments of $5.1 million for the nine months ended September 30, 2021 was primarily driven by the early repayment of $200 million of principal on the Senior Unsecured Term Loan A Facility, which resulted in a charge of $2.9 million for the write-off of unamortized deferred financing costs. Additionally, we recorded a charge of $2.1 million for the amortization of fees paid for the termination of interest rate swaps during 2020. During the first quarter of 2020 we refinanced our Senior Unsecured Credit Facility, which resulted in the write-off of certain unamortized deferred financing costs.
Income Tax Expense
Income tax expense for the nine months ended September 30, 2021 was $8.0 million, a decrease of $5.5 million when compared to $2.5 million for the nine months ended September 30, 2020. The change in income tax expense was primarily attributable to the tax effects of the rate change from 19% to 25% in the United Kingdom, enacted during the second quarter of 2021, for which we recorded deferred income tax expense of $11.7 million and a decrease in our valuation allowance for which we recorded a deferred tax benefit of $7.9 million attributable to recent acquisitions. The remainder was primarily attributable to losses generated from our foreign operations which did not occur during the nine months ended September 30, 2020.
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Non-GAAP Financial Measures
We use the following non-GAAP financial measures as supplemental performance measures of our business: FFO, Core FFO, Adjusted FFO, EBITDAre and Core EBITDA.

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

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Reconciliation of Net Income (Loss) to NAREIT FFO, Core FFO, and Adjusted FFO
(in thousands)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Net income (loss) | $ | 5,308 |  |  | $ | 12,374 |  |  | $ | (22,327) |  |  | $ | 68,547 |
Adjustments: |  |  |  |  |  |  |
Real estate related depreciation | 48,217 |  |  | 36,289 |  |  | 145,368 |  |  | 107,289 |
Net loss (gain) on sale of real estate, net of withholding taxes | — |  |  | 427 |  |  | — |  |  | (21,083) |
Net (gain) loss on asset disposals | (1) |  |  | 1,160 |  |  | (53) |  |  | 1,157 |
Impairment charges on certain real estate assets | 224 |  |  | — |  |  | 1,752 |  |  | 3,181 |
Our share of reconciling items related to partially owned entities | 463 |  |  | 111 |  |  | 1,590 |  |  | 267 |
NAREIT Funds from operations | 54,211 |  |  | 50,361 |  |  | 126,330 |  |  | 159,358 |
Adjustments: |  |  |  |  |  |  |
Net gain on sale of non-real estate assets | (171) |  |  | (100) |  |  | (594) |  |  | (517) |
Non-core asset impairment | — |  |  | 2,615 |  |  | — |  |  | 3,101 |
Acquisition, litigation and other, net | 6,338 |  |  | 5,282 |  |  | 31,011 |  |  | 9,771 |
Share-based compensation expense, IPO grants | — |  |  | 196 |  |  | 163 |  |  | 772 |
Loss on debt extinguishment, modifications and termination of derivative instruments | 627 |  |  | — |  |  | 5,051 |  |  | 781 |
Foreign currency exchange loss | 349 |  |  | 196 |  |  | 316 |  |  | 373 |
Our share of reconciling items related to partially owned entities | 122 |  |  | 76 |  |  | 365 |  |  | 155 |
Core FFO applicable to common shareholders | 61,476 |  |  | 58,626 |  |  | 162,642 |  |  | 173,794 |
Adjustments: |  |  |  |  |  |  |
Amortization of deferred financing costs and pension withdrawal liability | 1,088 |  |  | 1,203 |  |  | 3,321 |  |  | 3,945 |
Non-real estate asset impairment | 1,560 |  |  | — |  |  | 1,560 |  |  | — |
Amortization of below/above market leases | 1,017 |  |  | 39 |  |  | 1,418 |  |  | 115 |
Straight-line net rent | 411 |  |  | (87) |  |  | 86 |  |  | (304) |
Deferred income taxes (benefit) expense | (3,562) |  |  | (1,284) |  |  | 1,004 |  |  | (4,353) |
Share-based compensation expense, excluding IPO grants | 4,291 |  |  | 4,373 |  |  | 14,625 |  |  | 12,568 |
Non-real estate depreciation and amortization | 22,352 |  |  | 17,280 |  |  | 86,871 |  |  | 50,283 |
Maintenance capital expenditures (a) | (18,938) |  |  | (17,534) |  |  | (55,157) |  |  | (45,256) |
Our share of reconciling items related to partially owned entities | (100) |  |  | 125 |  |  | 889 |  |  | 203 |
Adjusted FFO applicable to common shareholders | $ | 69,595 |  |  | $ | 62,741 |  |  | $ | 217,259 |  |  | $ | 190,995 |

(a)Maintenance capital expenditures include capital expenditures made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology.
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We calculate EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of NAREIT, defined as, earnings before interest expense, taxes, depreciation and amortization, net gain on sale of real estate, net of withholding taxes, and adjustment to reflect share of EBITDAre of partially owned entities. EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance. We believe that EBITDAre provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and useful life of related assets among otherwise comparable companies.
We also calculate our Core EBITDA as EBITDAre further adjusted for acquisition, litigation and other, net, loss on debt extinguishment, modifications and termination of derivative instruments, share-based compensation expense, foreign currency exchange gain or loss, impairment of long-lived assets, loss from investments in partially owned entities, net gain on sale of non-real estate assets and reduction in EBITDAre from partially owned entities. We believe that the presentation of Core EBITDA provides a measurement of our operations that is meaningful to investors because it excludes the effects of certain items that are otherwise included in EBITDAre but which we do not believe are indicative of our core business operations. EBITDAre and Core EBITDA are not measurements of financial performance under U.S. GAAP, and our EBITDAre and Core EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDAre and Core EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with U.S. GAAP. Our calculations of EBITDAre and Core EBITDA have limitations as analytical tools, including:

•these measures do not reflect our historical or future cash requirements for maintenance capital expenditures or growth and expansion capital expenditures;
•these measures do not reflect changes in, or cash requirements for, our working capital needs;
•these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
•these measures do not reflect our tax expense or the cash requirements to pay our taxes; and
•although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements.

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

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Reconciliation of Net (Loss) Income to NAREIT EBITDAre and Core EBITDA
(In thousands)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Net income (loss) | $ | 5,308 |  |  | $ | 12,374 |  |  | $ | (22,327) |  |  | $ | 68,547 |
Adjustments: |  |  |  |  |  |  |
Depreciation and amortization | 70,569 |  |  | 53,569 |  |  | 232,239 |  |  | 157,572 |
Interest expense | 25,303 |  |  | 23,066 |  |  | 77,838 |  |  | 70,114 |
Income tax (benefit) expense | (226) |  |  | 819 |  |  | 7,957 |  |  | 2,105 |
Net loss (gain) on sale of real estate, net of withholding taxes | — |  |  | 427 |  |  | — |  |  | (21,083) |
Adjustment to reflect share of EBITDAre of partially owned entities | 1,854 |  |  | 293 |  |  | 4,288 |  |  | 590 |
NAREIT EBITDAre | $ | 102,808 |  |  | $ | 90,548 |  |  | $ | 299,995 |  |  | $ | 277,845 |
Adjustments: |  |  |  |  |  |  |
Acquisition, litigation and other, net | 6,338 |  |  | 5,282 |  |  | 31,011 |  |  | 9,771 |
Loss from investments in partially owned entities | 490 |  |  | 98 |  |  | 1,251 |  |  | 254 |
Impairment of long-lived assets | 1,784 |  |  | 2,615 |  |  | 3,312 |  |  | 6,282 |
Loss on foreign currency exchange | 349 |  |  | 196 |  |  | 316 |  |  | 373 |
Share-based compensation expense | 4,291 |  |  | 4,569 |  |  | 14,788 |  |  | 13,340 |
Loss on debt extinguishment, modifications and termination of derivative instruments | 627 |  |  | — |  |  | 5,051 |  |  | 781 |
Net (gain) loss on sale of non-real estate assets | (172) |  |  | 1,060 |  |  | (647) |  |  | 641 |
Reduction in EBITDAre from partially owned entities | (1,854) |  |  | (293) |  |  | (4,288) |  |  | (590) |
Core EBITDA | $ | 114,661 |  |  | $ | 104,075 |  |  | $ | 350,789 |  |  | $ | 308,697 |

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LIQUIDITY AND CAPITAL RESOURCES
The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company. Separate consolidated financial statements of the Operating Partnership have not been presented in accordance with the amendments to Rule 3-10 of Regulation S-X. Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Company and the Operating Partnership are not materially different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
We currently expect that our principal sources of funding for working capital, facility acquisitions, business combinations, expansions, maintenance and renovation of our properties, developments projects, debt service and distributions to our shareholders will include:
•current cash balances;
•cash flows from operations;
•our 2020 Senior Unsecured Revolving Credit Facility;
•our outstanding equity forward sale agreements;
•our ATM Equity Programs and related forward sale agreements; and
•other forms of debt financings and equity offerings.
We expect that our funding sources as noted above are adequate and will continue to be adequate to meet our short-term liquidity requirements and capital commitments. These liquidity requirements and capital commitments include:
•operating activities and overall working capital;
•capital expenditures;
•debt service obligations; and
•quarterly shareholder distributions.
We expect to utilize the same sources of capital we will rely on to meet our short-term liquidity requirements to also meet our long-term liquidity requirements, which include funding our operating activities, our debt service obligations and shareholder distributions, and our future development and acquisition activities. As previously discussed, the COVID-19 pandemic has created disruption among several industries. The outbreak of COVID-19 has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. While we did not incur significant disruption during the nine months ended September 30, 2021 from the COVID-19 pandemic, we are unable to predict the impact that the pandemic may have on the sources of capital upon which we rely.
We are a well-known seasoned issuer with an effective shelf registration statement filed on April 16, 2020, which registered an indeterminate amount of common shares, preferred shares, depositary shares and warrants, as well as debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by us. As circumstances warrant, we may issue equity securities from time to time on an opportunistic basis, dependent upon market conditions and available pricing. We may use the proceeds for general corporate purposes, which may include the repayment of outstanding indebtedness, the funding of development, expansion and acquisition opportunities and to increase working capital.
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On May 10, 2021, we entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $900.0 million of our common shares through an ATM equity program (the “2021 ATM Equity Program”). Sales of our common shares made pursuant to the 2021 ATM Equity Program may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. Sales may also be made on a forward basis pursuant to separate forward sale agreements. We intend to use the net proceeds from sales of our common shares pursuant to the 2021 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects.
During the nine months ended September 30, 2021, there were 2,332,846 common shares sold under the 2021 ATM Equity Program under forward sale agreements which must be settled by July 1, 2022 for gross proceeds of $90.6 million. After considering the forward sale agreements entered into during the nine months ended September 30, 2021, we had approximately $809.4 million availability remaining for distribution under the 2021 ATM Equity Program as of September 30, 2021.
Security Interests in Customers’ Products
By operation of law and in accordance with our customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments. Such liens permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not readily salable by us. Historically, in instances where we have warehouseman’s liens and our customer sought bankruptcy protection, we have been successful in receiving “critical vendor” status, which has allowed us to fully collect on our accounts receivable during the pendency of the bankruptcy proceeding.
Our bad debt expense was $0.7 million and $0.1 million for the three months ended September 30, 2021 and 2020, respectively, and $2.5 million and $1.6 million for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, we maintained bad debt allowances of approximately $17.0 million, which we believed to be adequate.
Dividends and Distributions
We are required to distribute 90% of our taxable income (excluding capital gains) on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to shareholders from cash flows from our operating activities. While historically we have satisfied this distribution requirement by making cash distributions to our shareholders, we may choose to satisfy this requirement by making distributions of cash or other property. All such distributions are at the discretion of our Board of Trustees. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. We have distributed at least 100% of our taxable income annually since inception to minimize corporate-level federal income taxes. Amounts accumulated for distribution to shareholders are invested primarily in interest-bearing accounts and short-term interest-bearing securities, which are consistent with our intention to maintain our status as a REIT.
As a result of this distribution requirement, we cannot rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs, as well as potential developments in new or existing properties, acquisitions or investments in existing or newly created joint ventures. In addition, we may be required
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to use borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.
For further information regarding dividends and distributions, see Note 10 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Outstanding Indebtedness
The following table summarizes our outstanding indebtedness as of September 30, 2021:

Debt Summary: |
Fixed rate | $ | 2,089,915 |
Variable rate - unhedged | 627,788 |
Total outstanding indebtedness | 2,717,703 |
Percent of total debt: |
Fixed rate | 76.90 | %
Variable rate | 23.10 | %
Effective interest rate as of September 30, 2021 | 3.09 | %

As of September 30, 2021, we had approximately $2.7 billion of outstanding debt as set forth in the table above, which excludes deferred financing costs.
The variable rate debt shown above bears interest at interest rates based on various one-month LIBOR, CDOR, and SONIA rates, depending on the respective agreement governing the debt, including our global revolving credit facilities. As of September 30, 2021, our debt had a weighted average term to initial maturity of approximately 6.7 years, assuming exercise of extension options.
For further information regarding outstanding indebtedness, please see Note 6 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Credit Ratings
Our capital structure and financial practices have earned us investment grade credit ratings from three nationally recognized credit rating agencies. We have investment grade ratings of BBB with a stable outlook from Fitch, BBB with an Under Review with Positive Implications outlook from DBRS Morningstar, and an investment grade rating of Baa3 with a stable outlook from Moody’s. These credit ratings are important to our ability to issue debt at favorable rates of interest, among other terms. Refer to our risk factor “Adverse changes in our credit ratings could negatively impact our financing activity” in our Annual Report on Form 10-K.
Maintenance Capital Expenditures and Repair and Maintenance Expenses
We utilize a strategic and preventative approach to maintenance capital expenditures and repair and maintenance expenses to maintain the high quality and operational efficiency of our warehouses and ensure that our warehouses meet the “mission-critical” role they serve in the cold chain.
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Maintenance Capital Expenditures
Maintenance capital expenditures are capitalized investments made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology systems. Examples of maintenance capital expenditures related to our existing temperature-controlled warehouse network include replacing roofs and refrigeration equipment, and upgrading our racking systems. Examples of maintenance capital expenditures related to personal property include expenditures on material handling equipment (e.g., fork lifts and pallet jacks) and related batteries. Examples of maintenance capital expenditures related to information technology include expenditures on existing servers, networking equipment and current software. Maintenance capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building or costs which are incurred to bring a building up to Americold’s operating standards. The following table sets forth our maintenance capital expenditures for the three and nine months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Nine Months Ended September 30,
2021 |  | 2020 |  | 2021 |  | 2020
| (In thousands, except per cubic foot amounts) |  |  |  |
Real estate | $ | 14,497 |  |  | $ | 15,896 |  |  | $ | 45,398 |  |  | $ | 39,425 |
Personal property | 1,231 |  |  | 906 |  |  | 4,441 |  |  | 3,967 |
Information technology | 3,210 |  |  | 732 |  |  | 5,318 |  |  | 1,864 |
Maintenance capital expenditures (1) | $ | 18,938 |  |  | $ | 17,534 |  |  | $ | 55,157 |  |  | $ | 45,256 |
Maintenance capital expenditures per cubic foot | $ | 0.013 |  |  | $ | 0.016 |  |  | $ | 0.038 |  |  | $ | 0.041 |

(1) Excludes $9.1 million of deferred acquisition maintenance capital expenditures incurred for the nine months ended September 30, 2021.
Repair and Maintenance Expenses
We incur repair and maintenance expenses that include costs of normal maintenance and repairs and minor replacements that do not materially extend the life of the property or provide future economic benefits. Repair and maintenance expenses consist of expenses related to our existing temperature-controlled warehouse network and its existing supporting personal property and are reflected as operating expenses on our income statement. Examples of repair and maintenance expenses related to our warehouse portfolio include ordinary repair and maintenance on roofs, racking, walls, doors, parking lots and refrigeration equipment. Examples of repair and maintenance expenses related to personal property include ordinary repair and maintenance expenses on material handling equipment (e.g., fork lifts and pallet jacks) and related batteries. The following table sets forth our repair and maintenance expenses for the three and nine months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Nine Months Ended September 30,
2021 |  | 2020 |  | 2021 |  | 2020
| (In thousands, except per cubic foot amounts)
Real estate | $ | 6,435 |  |  | $ | 7,333 |  |  | $ | 20,760 |  |  | $ | 21,278 |
Personal property | 15,655 |  |  | 7,368 |  |  | 40,731 |  |  | 22,766 |
Repair and maintenance expenses | $ | 22,090 |  |  | $ | 14,701 |  |  | $ | 61,491 |  |  | $ | 44,044 |
Repair and maintenance expenses per cubic foot | $ | 0.015 |  |  | $ | 0.013 |  |  | $ | 0.042 |  |  | $ | 0.040 |

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External Growth, Expansion and Development Capital Expenditures
External growth expenditures represent asset acquisitions or business combinations. Expansion and development capital expenditures are capitalized investments made to support both our customers and our warehouse expansion and development initiatives. It also includes investments in enhancing our information technology platform. Examples of capital expenditures associated with expansion and development initiatives include funding of construction costs, increases to warehouse capacity and pallet positions, acquisitions of reusable incremental material handling equipment, and implementing energy efficiency projects, such as thermal energy storage, LED lighting, motion-sensor technology, variable frequency drives for our fans and compressors, rapid-close doors and alternative-power generation technologies. Examples of capital expenditures to enhance our information technology platform include the delivery of new systems and software and customer interface functionality.
Acquisitions
The acquisitions completed during the nine months ended September 30, 2021 relate to Bowman Stores, ColdCo, KMT Brrr!, Liberty Freezers and Newark Facility Management. The acquisitions completed during the nine months ended September 30, 2020 relate to AM-C Warehouses, MHW, Caspers, Newport and Nova Cold. Refer to Notes 2 and 3 of the Condensed Consolidated Financial Statements and our 2020 Form 10-K for details of the purchase price allocation for each acquisition.
Expansion and development
The expansion and development expenditures for the nine months ended September 30, 2021 are primarily driven by $88.5 million related to our two fully-automated, build-to-suit, development sites in Connecticut and Pennsylvania, $17.3 million related to the Atlanta major markets strategy project (Phase 1) and $14.1 million related to Phase 2, $33.4 million related to our Russellville expansion, $8.1 million related to our Calgary, Canada expansion, $19.6 million related to the Auckland, New Zealand expansion project, $12.0 million million related to the Dunkirk, NY development and $3.7 million in our Dublin expansion. The Atlanta Phase 1 and Auckland projects were substantially completed during the second quarter of 2021, with the remaining spend to be incurred within the next six months. As a result of the Agro Acquisition on December 30, 2020, we acquired an expansion project in Lurgan, Northern Ireland, which was completed during the second quarter of 2021. We incurred $4.0 million during 2021 for this expansion project.
Expansion and development initiatives also include $11.7 million of corporate initiatives, which are projects designed to reduce future spending over the course of time. This category reflects return on investment projects, conversion of leases to owned assets, and other cost-saving initiatives.
Finally, we incurred approximately $25.9 million for probable future expansion or development projects.
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The following table sets forth our acquisition, expansion and development capital expenditures for the three and nine months ended September 30, 2021 and 2020.

| Three Months Ended September 30, |  | Nine Months Ended September 30,
2021 |  | 2020 |  | 2021 |  | 2020
| (In thousands)
Acquisitions, net of cash acquired and adjustments | $ | 400,987 |  |  | $ | 108,040 |  |  | $ | 616,316 |  |  | $ | 423,708 |
Expansion and development initiatives | 75,960 |  |  | 59,806 |  |  | 243,072 |  |  | 174,585 |
Information technology | 1,682 |  |  | 2,189 |  |  | 5,255 |  |  | 5,169 |
Growth and expansion capital expenditures | $ | 478,629 |  |  | $ | 170,035 |  |  | $ | 864,643 |  |  | $ | 603,462 |

Historical Cash Flows

| Nine Months Ended September 30,
| 2021 |  | 2020
| (In thousands)
Net cash provided by operating activities | $ | 164,319 |  |  | $ | 227,198 |
Net cash used in investing activities | $ | (945,491) |  |  | $ | (611,719) |
Net cash provided by financing activities | $ | 315,269 |  |  | $ | 323,317 |

Operating Activities
For the nine months ended September 30, 2021, our net cash provided by operating activities was $164.3 million, a decrease of $62.9 million, compared to $227.2 million for the nine months ended September 30, 2020. The decrease is primarily due to higher acquisition and integration related costs and selling, general and administrative expense. This was partially offset by higher segment contribution as a result of our recent acquisitions.
Investing Activities
Our net cash used in investing activities was $945.5 million for the nine months ended September 30, 2021 compared to $611.7 million for the nine months ended September 30, 2020. Cash used in connection with business combinations during 2021 was $616.3 million and related to the Bowman, ColdCo, KMT Brrr!, Liberty and Newark Facility Management acquisitions. Additions to property, buildings and equipment were $313.2 million, reflecting maintenance capital expenditures and investments in the Ahold, Atlanta, New Zealand, Calgary and Russellville expansion and development projects. Additionally, we invested $6.3 million in the SuperFrio joint venture for the nine months ended September 30, 2021, and paid $11.6 million to purchase the noncontrolling interest holders share in the Chilean business, which we now wholly own.
Net cash used in investing activities of $611.7 million for the nine months ended September 30, 2020 primarily related to cash used for the acquisitions of AM-C, Newport and Nova Cold totaling $398.7 million, cash used for acquisitions of property, buildings and equipment accounted for as an asset acquisition of $25.5 million related to the Caspers acquisition, cash used for additions to property, buildings and equipment of $241.6 million reflecting maintenance capital expenditures and investments in the Atlanta, Connecticut, Pennsylvania, New Zealand and Savannah expansion and development projects, and our initial investment of $26.2 million in the SuperFrio joint venture. These investments were offset by $77.4 million in proceeds from the sale of land and property, buildings and equipment related to the sale of land in Sydney, the Quarry segment and the sale of the Boston facility.
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Financing Activities
Net cash provided by financing activities was $315.3 million for the nine months ended September 30, 2021 compared to $323.3 million for the nine months ended September 30, 2020. Cash provided by financing activities for the current period primarily consisted of $420.2 million net proceeds from equity forward contracts settled during the period upon the issuance of common shares, $590.8 million in proceeds from our revolving line of credit, and $5.2 million of proceeds received upon exercise of stock options, offset by cash outflows of $280.0 million in repayments on the revolving line of credit, $205.2 million for repayments on term loan and mortgage notes, $168.5 million of quarterly dividend distributions paid, $27.5 million of financing lease payments, and $15.8 million in payment of withholding taxes related to share-based payment arrangements.
Net cash provided by financing activities was $323.3 million for the nine months ended September 30, 2020 and primarily consisted of $340.6 million net proceeds from equity offerings under our prior ATM equity program and the April 2019 equity forward contract settled in January 2020, the $177.1 million received in connection with the refinancing of our Senior Unsecured Term Loan and $186.8 million in proceeds from our revolving credit facility. These cash inflows were partially offset by $177.1 million of repayment on the revolving credit facility using the proceeds from our refinancing of our Senior Unsecured Term Loan, $124.0 million of quarterly dividend distributions paid, $55.0 million of repayments on our term loan and mortgage notes and $8.3 million of payments related to debt issuance costs.
CRITICAL ACCOUNTING POLICIES UPDATE
See Note 2 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
NEW ACCOUNTING PRONOUNCEMENTS
See Note 2 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our future income and cash flows relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.
As of September 30, 2021, we had $125 million of outstanding USD-denominated variable-rate debt and $250 million of outstanding CAD-denominated variable-rate debt. This consisted of our Senior Unsecured Term Loan A Facility bearing interest at one-month LIBOR for the USD tranche and one-month CDOR for the CAD tranche, plus a margin of up to 0.95%. Additionally, we had C$55.0 million, £68.5 million, and $170 million outstanding of Senior Unsecured Revolving Credit Facility draws. At September 30, 2021, one-month LIBOR was at approximately 0.08%, one-month CDOR was at 0.43%, and one-month SONIA was at 0.05%, therefore a 100 basis point increase in market interest rates would result in an increase in annual interest expense to service our variable-rate debt of approximately $6.3 million. A 100 basis point decrease in market interest rates would result in a $1.3 million decrease in annual interest expense.
Foreign Currency Risk
As it relates to the currency of countries where we own and operate warehouse facilities and provide logistics services, our foreign currency risk exposure at September 30, 2021 was not materially different than what we disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020. The information concerning market risk in Item 7A under the caption “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2020, is hereby incorporated by reference in this Quarterly Report on Form 10-Q.
Item 4. Controls and Procedures
Evaluation of Controls and Procedures
In accordance with Rule 13a-15(b) of the Exchange Act, the Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2021.
Our management is responsible for establishing and maintaining adequate “internal control over financial reporting,” as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management, including the Chief Executive Officer and Chief Financial Officer do not expect that our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
96

Changes in Internal Control over Financial Reporting
On December 30, 2020, we acquired Agro, refer to Note 3 - Business Combinations of this Form 10-Q for further discussion of the acquisition. We are currently in the process of integrating the internal controls and procedures of Agro into our internal controls over financial reporting. Changes to certain processes, information technology systems and other components of internal control over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act) resulting from the acquisition of Agro may occur and will be evaluated by management as such integration activities are implemented. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the Securities and Exchange Commission, we intend to include the internal controls and procedures of Agro in our annual assessment of the effectiveness of our internal control over financial reporting for our 2021 fiscal year.
Excluding the Agro acquisition, there has not been any change in our internal control over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act) identified in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act during the quarter ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be party to a variety of legal proceedings arising in the ordinary course of our business. We are not a party to, nor is any of our property a subject of, any material litigation or legal proceedings or, to the best of our knowledge, any threatened litigation or legal proceedings which, in the opinion of management, individually or in the aggregate, would have a material impact on our business, financial condition, liquidity, results of operations and prospects.
See Note 14 - Commitments and Contingencies to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding material legal proceedings in which we are involved.
Item 1A. Risk Factors
Investing in our common shares involves risks and uncertainties. You should consider and read the information contained in this report and in our 2020 Annual Report on Form 10-K, including the risk factors identified in Item 1A of Part I thereof (Risk Factors). Any of the risks discussed in our 2020 Annual Report on Form 10-K, in this report, in other reports we file with the SEC, and other risks we have not anticipated or discussed, could have a material adverse impact on our business, financial condition or results of operations. Except as set forth below, there has been no material change to our Risk Factors from those presented in our 2020 Annual Report on Form 10-K.
Recent changes in the Company’s executive management team may be disruptive to, or cause uncertainty in, its business, results of operations and the price of the Company’s common shares.
On November 2, 2021, the Company’s Board of Trustees of the Company terminated Mr. Boehler without cause from his position as President and Chief Executive Officer of the Company. Mr. Boehler also resigned as a Trustee of the Board of Trustees. The Company’s Board of Trustees appointed George Chappelle as the Company’s interim Chief Executive Officer and as a Trustee of the Company. The Company’s Board of Trustees has engaged a nationally recognized search firm to identify a permanent Chief Executive Officer. These changes in the Company’s executive management team may be disruptive to, or cause uncertainty in, the Company’s business, and any additional changes to the executive management team could have a negative impact on the Company’s ability to manage and grow its business effectively.
In addition, if the Company is not effective in its succession planning, there may be a negative impact on the Company’s ability to successfully hire for key executive management roles, including the President and Chief Executive Officer position, in a timely manner. Our future success is dependent upon our ability to attract, retain and effectively deploy senior management and key personnel, and we may need to offer higher compensation and other benefits in order to attract and retain key personnel in the future. Any such disruption or uncertainty or difficulty in efficiently and effectively filling key roles could materially and adversely impact on the Company’s results of operations and the market price of our common shares.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.

Item 6. Exhibits
Index to Exhibits

Exhibit No. |  | Description
10.1# |  | Form of Employment Agreement (Executive Vice President)
31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Americold Realty Trust
101 |  |  | The following financial statements of Americold Realty Trust’s Form 10-Q for the quarter ended September 30, 2021, formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020; (ii) Condensed Consolidated Income Statements for the three and nine months ended September 30, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020; (iv) Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020; and (vi) Notes to Condensed Consolidated Financial Statements.
104 |  |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
# |  | This document has been identified as a management contract or compensatory plan or arrangement.

100

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | AMERICOLD REALTY TRUST
|  | (Registrant) |
Date: | November 5, 2021 | By: | /s/ Marc J. Smernoff
|  | Name: | Marc J. Smernoff
|  | Title: | Chief Financial Officer and Executive Vice President
|  | (On behalf of the registrant and as principal financial officer)