Americold Realty Trust
Annual Report 2019

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 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 AMERICOLD REALTY OPERATING PARTNERSHIP, L.P. (Exact name of registrant as specified in its charter) Maryland (Americold Realty Trust) Delaware (Americold Realty Operating Partnership, L.P.) 93-0295215 01-0958815 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 10 Glenlake Parkway, Suite 600, South Tower Atlanta, Georgia (Address of principal executive offices) 30328 (Zip Code) (678) 441-1400 (Registrants telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Americold Realty Trust: 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) Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Americold Realty Trust Yes x No ¨ Americold Realty Operating Partnership, L.P. Yes ¨ No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Americold Realty Trust Yes ¨ No x Americold Realty Operating Partnership, L.P. Yes x No ¨ 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. Americold Realty Trust Yes x No ¨ Americold Realty Operating Partnership, L.P. Yes ¨ No x 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). x Americold Realty Trust Yes x No ¨ Americold Realty Operating Partnership, L.P. Yes 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: Americold Realty Trust: Large accelerated filer x Non-accelerated filer Accelerated filer Smaller reporting company Emerging growth company ¨ ¨ ☐☐ ☐☐ Americold Realty Operating Partnership, L.P.: Large accelerated filer Non-accelerated filer Accelerated filer Smaller reporting company Emerging growth company ¨ x ¨ ☐ ☐ 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. Americold Realty Trust Yes ¨ No ¨ Americold Realty Operating Partnership, L.P. 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) Americold Realty Trust Yes ☐ No x Americold Realty Operating Partnership, L.P. Yes ☐ No x As of June 28, 2019, the aggregate market value of the voting common shares owned by non-affiliates of Americold Realty Trust was $5.3 billion, computed by reference to the closing price of the common shares of Americold Realty Trust on the New York Stock Exchange on such date. Such value excludes common shares held by executive officers, directors, and 10% or greater shareholders as of June 28, 2019. The identification of 10% or greater shareholders is based on Schedule 13G and amended 13G reports publicly filed before June 28, 2019. This calculation does not reflect a determination that such parties are affiliates for any other purposes. The number of Americold Realty Trust’s common shares outstanding at February 26, 2020, was approximately 200,164,155. There is no public trading market for the partnership units of Americold Realty Operating Partnership, L.P. As a result, the aggregate market value of the partnership units held by non-affiliates of Americold Realty Operating Partnership, L.P. cannot be determined. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates by reference portions of Americold Realty Trust’s Proxy Statement for its 2020 Annual Meeting of Shareholders, which the registrants anticipate will be filed no later than 120 days after the end of its fiscal year pursuant to Regulation 14A. EXPLANATORY NOTE This report combines the annual reports on Form 10-K for the year ended December 31, 2019 of Americold Realty Trust and Americold Realty Operating Partnership, L.P. 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.” The Operating Partnership is voluntarily co-filing its annual report with the Company because the Operating Partnership anticipates that it may register one or more classes of securities in the future and will thus become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As of December 31, 2019 and for each of the years ended December 31, 2019, 2018 and 2017, the sole general partner, Americold Realty Trust, held approximately 99% of the partnership interests of our Operating Partnership, and the limited partner, Americold Realty Operations, Inc., a wholly-owned subsidiary of Americold Realty Trust, held 1% of the partnership units of our Operating Partnership. The Operating Partnership has also granted Operating Partnership Profit Units (OP Units) to certain members of the Board of Trustees during 2019 and certain members of executive management of Americold Realty Trust during 2020. Upon vesting, these OP Units will represent partnership units in the Operating Partnership that are not owned by Americold Realty Trust. We believe combining the annual reports on Form 10-K of Americold Realty Trust and Americold Realty Operating Partnership, L.P., into this single report results in the following benefits: – – – enhancing investors’ understanding of our Company and our Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both our Company and our Operating Partnership; and creating time and cost efficiencies through the preparation of one combined report instead of two separate reports. There are a few differences between our Company and our Operating Partnership, which are reflected in the disclosures in this report. We believe it is important to understand the differences between our Company and our Operating Partnership in the context of how we operate as an interrelated consolidated company. Americold Realty Trust is a real estate investment trust, or REIT, whose only material asset is its ownership of partnership interests of Americold Realty Operating Partnership, L.P. As a result, Americold Realty Trust does not conduct business itself, other than acting as the sole general partner and substantial-majority indirect limited partner of Americold Realty Operating Partnership, L.P., issuing public equity from time to time and guaranteeing certain unsecured debt of Americold Realty Operating Partnership, L.P. and certain of its subsidiaries. Americold Realty Trust itself does not issue any indebtedness but guarantees certain of the debt of Americold Realty Operating Partnership, L.P. and certain of its subsidiaries and affiliates, as disclosed in this report. Americold Realty Operating Partnership, L.P. holds substantially all the assets of the Company. Americold Realty Operating Partnership, L.P. conducts the operations of the business and is structured as a limited partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Americold Realty Trust, which are generally contributed to Americold Realty Operating Partnership, L.P. in exchange for partnership interests, Americold Realty Operating Partnership, L.P. generates the capital required by the Company’s business through Americold Realty Operating Partnership, L.P.’s operations, or by Americold Realty Operating Partnership L.P.’s direct or indirect incurrence of indebtedness. To help investors understand the significant differences between our Company and our Operating Partnership, this report presents the following separate sections for each of our Company and our Operating Partnership: • • consolidated financial statements; the following notes to the consolidated financial statements: ◦ Debt of the Company and Debt of the Operating Partnership; ◦ ◦ Partners’ Capital; and Selected Quarterly Financial Information • Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities; • • Selected Financial Data; and Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations. This report also includes separate Item 9A. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the Chief Executive Officer and Chief Financial Officer of each entity have made the requisite certification and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Exchange Act and 18 U.S.C. §1350. In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company operates the business through the Operating Partnership. As general and limited partner with control of the Operating Partnership, Americold Realty Trust consolidates the Operating Partnership for financial reporting purposes, and it does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of Americold Realty Trust and Americold Realty Operating Partnership, L.P. are the same on their respective consolidated financial statements. The separate discussions of Americold Realty Trust and Americold Realty Operating Partnership, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company. 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. Item Page TABLE OF CONTENTS Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures PART I PART II Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Sales of Unregistered Securities Securities Authorized for Issuance Under Equity Compensation Plans Use of Proceeds Other Shareholder Matters Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations 1. 1A. 1B. 2. 3. 4. 5. 6. 7. Management’s Overview Results of Operations Liquidity and Capital Resources Contractual Obligations Critical Accounting Policies New Accounting Pronouncements 7A. Quantitative and Qualitative Disclosures About Market Risk 8. 9. 9A. 9B. 10. 11. 12. 13. 14. 15. 16. Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance Executive Compensation PART III Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV Exhibits, Financial Statements and Schedules Form 10-K Summary 3 12 45 47 49 49 50 50 52 52 50 53 54 60 60 68 78 90 94 96 97 98 98 99 103 104 104 104 104 104 105 108 CAUTIONARY STATEMENT REGADING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K 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: • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry; general economic conditions; risks associated with the ownership of real estate and temperature-controlled warehouses in particular; defaults or non-renewals of contracts with customers; potential bankruptcy or insolvency of our customers; uncertainty of revenues, given the nature of our customer contracts; increased interest rates and operating costs; our failure to obtain necessary outside financing; risks related to, or restrictions contained in, our debt financing; decreased storage rates or increased vacancy rates; risks related to current and potential international operations and properties; 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; our failure to successfully integrate and operate acquired properties or businesses, including but not limited to: Cloverleaf Cold Storage, Lanier Cold Storage, MHW Group Inc., Nova Cold Logistics, Newport Cold Storage and PortFresh Holdings, LLC; acquisition risks, including the failure of such acquisitions to perform in accordance with projections; risks related to expansions of existing properties and developments of new properties, including failure to meet budgeted or stabilized returns within expected time frames in respect thereof; difficulties in expanding our operations into new markets, including international markets; our failure to maintain our status as a REIT; our Operating Partnership’s failure to qualify as a partnership for federal income tax purposes; uncertainties and risks related to natural disasters, global climate change and public health crisis; 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, including employment related litigation; changes in real estate and zoning laws and increases in real property tax rates; the competitive environment in which we operate; our relationship with our employees, including the occurrence of any work stoppages or any disputes under our collective bargaining agreements; liabilities as a result of our participation in multi-employer pension plans; losses in excess of our insurance coverage; 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 1 • • 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 our forward sale agreement entered into with Bank of America, N.A. in September 2018, as amended, or the 2018 forward sale agreement, 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 Annual Report on Form 10-K, including under Part I, Item 1A, Risk Factors. 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 Annual Report on Form 10-K include, among others, statements about our 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,” 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. 2 PART I ITEM 1. Business The Company We are the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature- controlled warehouses. We are organized as a self-administered and self-managed REIT with proven operating, development and acquisition expertise. As of December 31, 2019, we operated a global network of 178 temperature-controlled warehouses encompassing over one billion cubic feet, with 160 warehouses in the United States, six warehouses in Australia, seven warehouses in New Zealand, two warehouses in Argentina and three warehouses in Canada. We view and manage our business through three primary business segments: warehouse, third- party managed and transportation. We consider our temperature-controlled warehouses to be “mission-critical” real estate in the markets we serve from “farm to fork” and an integral component of the temperature-controlled food infrastructure supply chain, which we refer to as the “cold chain.” The cold chain is vital for maintaining the quality of food producers’, distributors’, retailers’ and e-tailers’ temperature-sensitive products, protecting brand reputation and ensuring consumer safety and satisfaction. Our customers depend upon the location, high-quality, integration and scale of our portfolio to ensure the integrity and efficient distribution of their products. Many of our warehouses are located in key logistics corridors in the countries in which we operate, including strategically critical U.S. and international metropolitan statistical areas, or MSAs, while others are connected or immediately adjacent to customers’ production facilities. We believe our strategic locations and the extensive geographic presence of our integrated warehouse network are fundamental to our customers’ ability to optimize their distribution networks while reducing their capital expenditures, operating costs and supply-chain risks. Many of the warehouses in our real estate portfolio have been modernized to reduce our power costs and increase their competitive position through reliable temperature-control systems and processes. We consider ownership of our temperature-controlled warehouses to be fundamental to our business, our ability to attract and retain customers and our ability to achieve our targeted return on invested capital. We believe that the ownership of our real estate provides us with cost of capital and balance sheet advantages, stemming from the attractive financing options available to real estate owners and the tax advantages of being a REIT. We also believe that consolidation of the ownership and operation of our portfolio significantly enhances the value of our business by allowing us to provide customers with our complementary suite of value-added services across one integrated and reliable cold chain network. Ownership of our integrated cold chain network enhances our ability to efficiently reposition customers and undertake capital improvements or other modifications on their behalf without the need to obtain third-party approvals. Our decision to own, rather than lease, a significant majority of our warehouses provides us with better control over the specialized nature of our assets and greater influence over our warehouse locations on a long-term basis, which is crucial to meeting our customers’ “mission-critical” cold chain needs. Recent Acquisitions On February 1, 2019, we completed the acquisition of PortFresh Holdings LLC (“PortFresh”) for a purchase price of approximately $35.2 million, (the “PortFresh Acquisition”) net of cash acquired. On May 1, 2019, we completed the acquisition of Cloverleaf Cold Storage LLC (“Cloverleaf”) for a purchase price of approximately $1.24 billion (the “Cloverleaf Acquisition”), net of cash acquired. Also, on May 1, 2019, we completed the acquisition of Lanier Cold Storage (“Lanier”) for approximately $81.9 million (the “Lanier Acquisition), net of cash acquired. On November 19, 2019, the Company acquired MHW Group Inc. (“MHW”) 3 for approximately $50.1 million (the “MHW Acquisition”), net of cash acquired, with an option to purchase land accompanying the warehouse for $4.1 million, which we exercised on January 24, 2020. Additionally, on this date the Company announced the acquisition of Nova Cold Logistics (“Nova Cold”) which closed on January 2, 2020 for CAD $336.8 million (the “Nova Cold Acquisition”). Refer to Item 7 - Management’s Discussion and Analysis and Notes 2 and 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K for further details of each of the 2019 acquisitions, and Note 30 of the Consolidated Financial Statements in this Annual Report on Form 10- K for further details of each of the 2020 acquisitions. Initial Public Offering and Follow-on Offerings On January 23, 2018, we completed an initial public offering of our common shares, in which we issued and sold 33,350,000 of our common shares, including 4,350,000 common shares pursuant to the exercise in full of the underwriters’ option to purchase additional common shares (the “IPO”). The offering generated net proceeds of approximately $493.6 million to us, after deducting underwriting fees and other offering costs of approximately $40.0 million. Subsequent to our IPO, we have completed multiple follow-on offerings, which are described in further detail in Item 5 of this Annual Report on Form 10-K. Our Information Our principal executive office is located at 10 Glenlake Parkway, South Tower, Suite 600, Atlanta, Georgia 30328, and our telephone number is (678) 441-1400. Our website address is www.americold.com. The information found on, or otherwise accessible through, our website is not incorporated into, and does not form a part of, this Annual Report on Form 10-K or any other report or document we file with or furnish to the Securities and Exchange Commission (the “SEC”). Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statement and all amendments to those reports are available free of charge on our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. In addition, all reports we file with the SEC are available via EDGAR through the SEC website at www.sec.gov. Copies of our annual report will be made available, free of charge, on written request. Our Code of Business Conduct and Ethics is also made available through our website under “Investors - Governance Documents” or via EthicsPoint Hotline. BUSINESS STRATEGY AND OPERATING SEGMENTS We were formed as a Maryland REIT on December 27, 2002. Our Operating Partnership was formed as a Delaware limited partnership on April 5, 2010. Our operations are conducted through our Operating Partnership and its subsidiaries. Our primary business objective is to increase shareholder value by serving our customers, growing our market share, enhancing our operating and financial results and increasing cash flows from operations. We also believe that our ability to execute on our business and growth strategies will enhance the overall value of our real estate. The strategies we intend to execute to achieve these objectives include the following: Enhancing Our Operating and Financial Results Through Proactive Asset Management We seek to enhance our operating and financial results by supporting our customers’ growth initiatives in the cold chain, optimizing occupancy, underwriting and deploying yield management initiatives and executing operational optimization and cost containment strategies. We believe that the combination of our ability to execute these and other initiatives and the significant investments we have made in our business over the last several years will continue to drive our financial results and position us to expand our warehouse portfolio, grow our customer base, enhance our market share and create value for our shareholders. 4 Continue to Increase Committed Revenue in Our Warehouse Segment Historically, providers of temperature-controlled warehouse space have offered storage services to customers on an as-utilized, on- demand basis. 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 or renewing agreements with existing customers, particularly with our largest customers, and variable rates for the value-added services we provide. Over the last several years, we have transitioned a significant portion of our rent and storage revenues generated on an as-utilized, on-demand basis to a fixed storage commitment basis. We believe the scope and breadth of our network position us favorably to continue to increase our fixed storage commitments as we believe this structure offers commercial advantages to both our customers and us. Focused and Disciplined Strategy to Expand Our Portfolio of Temperature-Controlled Warehouses We believe our operating systems, scalable information technology platform and economies of scale provide us with a significant advantage over our competitors with respect to expansion, development and acquisition opportunities. Being the first publicly-traded REIT focused on the temperature-controlled warehouse industry provides us greater access to the capital markets than our competitors, which we believe better positions us to strategically enter new locations, fill gaps in existing distribution networks and effectively compete for expansion, development and acquisition opportunities. Capitalize on Increased Outsourcing by Leading Global Food Producers, Distributors, Retailers and E-Tailers Over the last 35 years, frozen food producers, distributors, retailers and e-tailers have increasingly outsourced their temperature- controlled warehousing needs to increase efficiency, reduce costs and redeploy capital into core businesses. We anticipate that cold chain participants will continue to make certain of their “in-house” temperature-controlled warehouses available for sale in the future and, accordingly, will continue to look to third-party providers to meet their temperature-controlled warehouse storage and service needs in related geographic markets. We believe that our ability to offer one of the most extensive and integrated network of high-quality temperature- controlled warehouses globally with value-added services and our long-standing relationships with leading cold chain participants will enable us to capitalize on this trend. Well Positioned to Benefit from E-Commerce Growth Our warehouse portfolio serves as a fundamental bridge between food producers and fulfillment centers - whether for online e-tailers or traditional brick and mortar retailers. We believe our ability to design, build and operate warehouses across the cold chain makes us an attractive storage solution for existing retailers and the growing e-tailer segment and positions us well to generate new relationships, drive growth and capture market share by increasing our presence in the e-commerce channel. Expand Our Presence by Increasing Market Share for Other Temperature-Sensitive Product Types Although we focus on providing temperature-controlled warehouse space to the food industry, we also store other forms of temperature-sensitive products, including pharmaceutical, floral and chemical products. As the rapid growth in e-commerce continues to increase the flow of products through the global distribution network, we believe our ability to provide comprehensive and consistent quality warehousing and value-added services at all points in the cold chain put us in a strong position to develop new relationships, drive growth and enhance market share with producers, distributors, retailers and e-tailers in other temperature-sensitive products. Additionally, we have the flexibility to store non-temperature-sensitive “dry” goods in our warehouses to the extent desirable. 5 Investments in Our Warehouses We employ a strategic investment approach to maintain a high-quality portfolio of temperature-controlled warehouses to ensure that our warehouses meet the “mission-critical” role they serve in the cold chain. We have successfully modernized many of our warehouses to reduce our power costs and increase their competitive position through reliable temperature-control systems that can implement distinct temperature zones within the same warehouse. In addition, we use 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, high speed doors and alternative-power generation technologies to improve the energy efficiency of our warehouses. We believe that our warehouses are well-maintained and in good operating condition. Our Business Segments We view and manage our business through three primary business segments—warehouse, third-party managed and transportation. Our core business is our warehouse segment, where we provide temperature-controlled warehouse storage and related handling and other warehouse services. In our warehouse segment, we collect rent and storage fees from customers to store their frozen and perishable food and other products within our real estate portfolio. We also provide our customers with handling and other warehouse services related to the products stored in our buildings that are designed to optimize their movement through the cold chain, such as the placement of food products for storage and preservation, the retrieval of products from storage upon customer request, case-picking, blast freezing, kitting and repackaging and other recurring handling services. We refer to these handling and other services as our value-added services. Under our third-party managed segment, we manage warehouses on behalf of third parties and provide warehouse management services to leading food retailers and manufacturers in customer-owned facilities, including some of our largest and longest-standing customers. We believe using our third-party management services allows our customers to increase efficiency, reduce costs, reduce supply- chain risks and focus on their core businesses. We also believe that providing third-party management services to many of our key customers underscores our ability to offer a complete and integrated suite of services across the cold chain. In our transportation segment, we broker and manage transportation of frozen and perishable food and other products for our customers. Our transportation services include consolidation services (i.e., consolidating a customer’s products with those of other customers for more efficient shipment), freight under management services (i.e., arranging for and overseeing transportation of customer inventory) and dedicated transportation services, each designed to improve efficiency and reduce transportation and logistics costs to our customers. We provide these transportation services at cost plus a service fee or, in the case of our consolidation services, we charge a fixed fee. Additionally, in connection with the Cloverleaf Acquisition, we acquired trucks and employees that support legacy Cloverleaf customers. We also operate a limestone quarry on the land we own around our Carthage, Missouri warehouse, which contains substantial limestone deposits. We do not view the operation of the quarry as an integral part of our business. 6 Customers Our global footprint enables us to efficiently serve approximately 2,500 customers consisting primarily of producers, distributors, retailers and e-tailers of frozen and perishable food products, such as fruits, vegetables, meats, seafood, novelties, dairy and packaged foods. We believe the creditworthiness and geographic diversity of our customer base provide us with stable cash flows and a strong platform for growth. The weighted average length of our relationship with our 25 largest customers in our warehouse segment exceeds 34 years. The total warehouse segment revenues generated by our 25 largest customers in our warehouse segment have been steady over the last three years, representing 60%, 63% and 61% of our total warehouse segment revenues for the years ended December 31, 2019, 2018 and 2017, respectively. For the year ended December 31, 2019, this disclosure is calculated on a proforma basis as if the Company had completed all 2019 acquisitions as of the beginning of the year. As a result of the 2019 acquisitions, there was no material change to the composition of our top 25 customers. Each of these 25 largest customers has been in our network for the entirety of these periods. The following table presents summary information concerning our 25 largest customers in our warehouse segment, based on warehouse segment revenues for the year ended December 31, 2019: % of Warehouse Revenue (1) # of Sites Credit Rating (Moody’s/S&P)(2) Multi Location Dedicated Sites Value Added Services Transportation Consolidation Technology Integration Committed Contract or Lease (3) Network Utilization Retailer Producer Producer Producer Producer Producer Retailer Producer Producer Retailer Producer Retailer Producer Producer Producer Retailer Retailer Producer Producer Producer Producer Producer Retailer Retailer Retailer Total 7.7% 5.6% 5.1% 4.6% 4.5% 4.2% 3.2% 2.5% 2.3% 1.9% 1.9% 1.9% 1.7% 1.6% 1.5% 1.4% 1.3% 1.3% 1.3% 1.2% 0.9% 0.8% 0.7% 0.6% 0.6% 60.3% 12 35 25 36 47 30 20 2 36 9 16 2 5 6 5 26 21 24 11 16 10 18 5 16 6 Baa2/BBB Baa3/BBB- NR/NR Ba1/BBB- Baa2/BBB Baa3/BBB- Ba1/BB+ NR/NR Ba2/BB NR/NR Baa1/BBB+ B2/NR Aa2/AA Baa1/BBB+ A1/A+ NR/NR NR/NR NR/NR Baa2/BBB A1/A NR/BBB- Aa3/AA- B3/NR NR/NR Baa1/BBB ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü 7 (1) Based on warehouse revenues for the last twelve months ended December 31, 2019. Presented on a pro forma basis as if the Company had completed all 2019 acquisitions as of the beginning of the year. (2) Represents long-term issuer ratings as published in January 2020. (3) A check mark indicates that the customer had at least one fixed commitment contract or lease with us as of December 31, 2019. Seasonality We are involved in providing services to food producers, distributors, retailers and e-tailers whose businesses, in some cases, are seasonal or cyclical. On a portfolio-wide basis, physical occupancy rates and warehouse revenues are generally the lowest during May and June. Physical occupancy rates and warehouse revenues typically exhibit a gradual increase thereafter 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. In each year since 2015, we have generated higher than average revenues and our warehouses have experienced the highest occupancy levels in October or November. 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 Argentina also help balance the impact of seasonality in our global operations, as their growing and harvesting cycles are complementary to North America. 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. Competition In our industry, the principal competitive factors are warehouse location, warehouse size, breadth and interconnectivity of warehouse networks, quality, type of service and price. For refrigerated food customers, transportation costs are typically significantly greater than warehousing costs and, accordingly, location and transportation capabilities are major competitive factors. The size of a warehouse is important in part because large customers generally prefer to have all of their products needed to serve a given market in a single location and to have the flexibility to increase storage at that single location during seasonal peaks. In areas with direct local competition, customers generally will select a temperature-controlled warehouse based upon service level, price and the quality of the warehouse. In addition, some food producers and distributors attend to their own warehousing and distribution needs by either building or leasing warehouses, creating a private warehousing market which may compete with the public warehouse industry. Many customers, including those for whom private warehousing is a viable option, will select distribution services based upon service level and price, provided that an appropriate network of related storage facilities is available. The ability to provide a wide breadth of high-quality integrated logistics management services is an increasingly important competitive advantage in the marketplace. In addition, we compete for the business of customers and potential customers who may choose to provide temperature-controlled warehousing in-house. United States Outside the five largest owners of temperature-controlled warehouses, the United States temperature-controlled warehouse industry is highly fragmented among numerous owners and operators. We believe our main competitors include Lineage Logistics, LLC, United States Cold Storage, Inc. (an affiliate of John Swire & Sons), AGRO Merchants Group, Interstate Warehousing, Burris Logistics, NewCold Advanced Cold Logistics, Henningsen Cold Storage Co., Hanson Logistics and Seafrigo Logistics, in addition to numerous other local, regional and national temperature-controlled warehouse owners and operators. 8 Australia Our main competitors in Australia include Emergent Cold Storage (acquisition by Lineage Logistics announced during November 2019, expected to close in 2020) and NewCold Advanced Cold Logistics, which operate warehouses and service many of the Australian markets. Generally, our other competitors operate in only one region and do not compete in the retail market that comprises the majority of our revenues. New Zealand Our main competitors in New Zealand are Emergent Cold Storage (acquisition by Lineage Logistics announced during November 2019, expected to close in 2020) and Halls Transport. Emergent Cold operates an estimated seven warehouses and is the largest public warehouse operator in New Zealand. Emergent Cold specializes in bulk storage and focuses on the commodity market with warehouses located near New Zealand’s ports. Halls Transport is primarily a transporter that also operates a network of 3 warehouses. Generally, our other competitors also service the commodity market and operate in only one region. Argentina We have several competitors in the Buenos Aires market, which in the past tended to be smaller single-site operations or fragmented networks. While we are aware some operators are considering consolidating public warehouse facilities in Argentina, the greatest sources of competition in Argentina are the disproportionate number of producers (compared to the United States) that continue to in-source their temperature-controlled storage needs. Employees As of December 31, 2019, worldwide we employed approximately 12,600 people, approximately 49% of which were represented by various local labor unions and associations, and 84 of our 178 warehouses have unionized associates that are governed by 74 different collective bargaining agreements. We are currently in negotiations for one new agreement. Since January 1, 2016, we have successfully negotiated 76 collective bargaining agreements without any work stoppages. During 2019, we have successfully negotiated and renewed 21 agreements with two awaiting ratification. During 2020, we expect to engage in negotiations for an additional 19 agreements covering all or parts of 26 operating locations worldwide. We do not anticipate any workplace disruptions during this renewal process. REGULATORY MATTERS Many laws and governmental regulations are applicable to our properties and changes in these laws and regulations, or interpretation of such laws and regulations by agencies and the courts, occur frequently. 9 Environmental Matters Our operations are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs. Failure to comply with these environmental requirements can result in civil or criminal fines or sanctions, claims for environmental damages, remediation obligations, revocation of environmental permits or restrictions on our operations. Future changes in environmental laws or in the interpretation of those laws, including stricter requirements affecting our operations, could result in increased capital and operating costs, which could materially and adversely affect our business, financial condition, liquidity, results of operations and, consequently, amounts available for distribution to our shareholders. Food Safety Regulations Most of our warehouses are subject to compliance with federal regulations regarding food safety. Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, the United States Food and Drug Administration, or the FDA, requires us to register all warehouses in which food is stored and further requires us to maintain records of sources and recipients of food for purposes of food recalls. The Food Safety Modernization Act, or FSMA significantly expanded the FDA’s authority over food safety, providing the FDA with new tools to proactively ensure the safety of the entire food system, including new hazard analysis and preventive controls requirements, food safety planning, requirements for sanitary transportation of food, and increased inspections and mandatory food recalls under certain circumstances. The most significant rule under the FSMA which impacts our business is the Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food rule. This rule requires a food facility to establish a food safety system that includes an analysis of hazards and the implementation of risk-based preventive controls, among other steps. This is in addition to requirements that we satisfy existing Good Manufacturing Practices with respect to the holding of foods, as set forth in FDA regulations. The USDA also grants to some of our warehouses “ID status,” which entitles us to handle products of the USDA. As a result of the regulatory framework from the FDA, the USDA and other local regulatory requirements, we subject our warehouses to periodic food safety audits which are for the most part carried out by ASI Food Safety Consultants, a third-party provider of such audits. In addition to meeting any applicable food safety, food facility registration and record-keeping requirements, our customers often require us to perform food safety audits. To the extent we fail to comply with existing food safety regulations or contractual obligations, or are required to comply with new regulations or obligations in the future, it could adversely affect our business, financial condition, liquidity, results of operations and prospects, as well as the amount of funds available for distribution to our shareholders. Occupational Safety and Health Act, or OSHA Our properties 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. In addition, due to the amount of ammonia stored at some of our facilities, we are also subject to compliance with OSHA’s Process Safety Management of Highly Hazardous Chemicals standard and OSHA’s ongoing National Emphasis Program related to potential releases of highly hazardous chemicals. 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. 10 International Regulations Our international facilities are subject to a number of local laws and regulations which govern a wide range of matters, including building, environmental, health and safety, hazardous substances and new organisms, waste minimization, as well as specific requirements for the storage of meat, dairy products, fish, poultry, agricultural and other products. Any products destined for export must also satisfy the applicable export requirements. A failure to comply with, or the cost of complying with, these laws and regulations could materially adversely affect our business, financial condition, liquidity, results of operations and prospects and, consequently the amounts available for distribution to our shareholders. INSURANCE COVERAGE We carry comprehensive general liability, fire, extended coverage, business interruption and umbrella liability coverage on all of our properties with limits of liability which we deem adequate. Similarly, we are insured against the risk of direct physical damage in amounts we believe to be adequate to reimburse us on a replacement basis for costs incurred to repair or rebuild each property, including loss of business profits during the reconstruction period. We also carry coverage for customers’ products in our warehouses that are damaged due to our negligence. The cost of all such insurance is passed through to customers as part of their regular rates for storage and handling. We are self-insured for workers’ compensation and health insurance under a large-deductible program, meaning that we have accrued liabilities in amounts that we consider appropriate to cover losses in these areas. In addition, we maintain excess loss coverage to insure against losses in excess of the reserves that we have established for these claims in amounts that we consider appropriate. We will not carry insurance for generally uninsured losses such as loss from riots or war; however, we do include coverage for risks across all programs for acts of terrorism. We carry earthquake insurance on our properties in areas known to be seismically active and flood insurance on our properties in areas known to be flood zones, in an amount and with deductibles which we believe are commercially reasonable. We also carry insurance coverage relating to cybersecurity incidents. 11 ITEM 1A. Risk Factors Set forth below are certain risk factors that could harm our business, results of operations and financial condition. You should carefully read the following risk factors, together with the financial statements, related notes and other information contained in this Annual Report on Form 10-K. Our business, financial condition and operating results may suffer if any of the following risks are realized. If any of these risks or uncertainties occur, the trading price of our common shares could decline and you might lose all or part of your investment. This Annual Report on Form 10-K contains forward-looking statements that contain risks and uncertainties. Please refer to the discussion of “Cautionary Statement Regarding Forward-Looking Statements.” Risks Related to our Business and Operations Our investments are concentrated in the temperature-controlled warehouse industry, and our business would be materially and adversely affected by an economic downturn in that industry or the markets for our customers’ products. Our investments in real estate assets are concentrated in the industrial real estate industry, specifically in temperature-controlled warehouses. This concentration exposes us to the risk of economic downturns in this industry to a greater extent than if our business activities included a more significant portion of other sectors of the real estate market. We are also exposed to fluctuations in the markets for the commodities and finished products that we store in our warehouses. For example, the demand for poultry and poultry products directly impacts the need for temperature-controlled warehouse space to store poultry and poultry products for our customers. Although our customers store a diverse product mix in our temperature-controlled warehouses, declines in demand for their products could cause our customers to reduce their inventory levels at our warehouses, which could reduce the storage and other fees payable to us and materially and adversely affect us. Our temperature-controlled warehouses are concentrated in certain geographic areas, some of which are particularly susceptible to adverse local conditions. Although we own or hold leasehold interests in warehouses across the United States and globally, many of these warehouses are concentrated in a few geographic areas. For example, approximately 42.9% of our owned or leased warehouses are located in six states; with approximately 9.1% in Pennsylvania, 8.4% in Georgia, 6.9% in California, 6.9% in Arizona, 6.1% in Texas, and 5.7% in Wisconsin (in each case, on a refrigerated cubic-foot basis based on information as of December 31, 2019). We could be materially and adversely affected if conditions in any of the markets in which we have a concentration of properties become less favorable. Such conditions may include natural disasters, periods of economic slowdown or recession, localized oversupply in warehousing space or reductions in demand for warehousing space, adverse agricultural events, disruptions in logistics systems, such as transportation and tracking systems for our customers’ inventory, and power outages. Adverse agricultural events include, but are not limited to, the cost of commodity inputs, drought and disease. In addition, adverse weather patterns may affect local harvests, which could have an adverse effect on our customers and cause them to reduce their inventory levels at our warehouses, which could in turn materially and adversely affect us. We are exposed to risks associated with expansion and development, which could result in disappointing returns and unforeseen costs and liabilities. We have engaged, and expect to continue to engage, in expansion and development activities with respect to certain of our legacy or newly acquired properties. Expansion and development activities subject us to certain risks not present in the acquisition of existing properties (the risks of which are described below), including, without limitation, the following: 12 • • • • our pipeline of expansion and development opportunities are at various stages of discussion and consideration and, based on historical experiences, many of them may not be pursued or completed as contemplated or at all; the availability and timing of financing on favorable terms or at all; the availability and timely receipt of zoning and regulatory approvals, which could result in increased costs and could require us to abandon our activities entirely with respect to the warehouse for which we are unable to obtain permits or authorizations; the cost and timely completion within budget of construction due to increased land, materials, labor or other costs (including risks beyond our control, such as weather or labor conditions, or material shortages), which could make completion of the warehouse or the expansion thereof uneconomical, and we may not be able to increase revenues to compensate for the increase in construction costs; • we may be unable to complete construction of a warehouse or the expansion thereof on schedule, resulting in increased debt • • service expense and construction costs; the potential that we may expend funds on and devote management time and attention to projects which we do not complete; a completed expansion project or a newly-developed warehouse may fail to achieve, or take longer than anticipated to achieve, expected occupancy rates, and may fail to perform as expected; and • we may not be able to achieve targeted returns and budgeted stabilized returns on invested capital on our expansion and development opportunities due to the risks described above, and an expansion or development may not be profitable and could lose money. These risks could create substantial unanticipated delays and expenses and, in certain circumstances, prevent the initiation or completion of expansion or development as contemplated or at all, any of which could materially and adversely affect us. In addition, we have grown rapidly over prior years, including by expanding our internal resources, making acquisitions, and entering new markets. Our growth will place a strain on our management, operational, financial and information systems, and procedures and controls to expand, train and control our employee base. Our need for working capital will increase as our operations grow. We can provide no assurance that we will be able to adapt our portfolio management, administrative, accounting, information technology and operational systems to support any growth we may experience. Failure to oversee our current portfolio of properties and manage our growth effectively, or to obtain necessary working capital and funds for capital improvements, could have a material adverse effect on our business, results of operations, cash flow, financial condition and stock price. A portion of our future growth depends upon acquisitions and we may be unable to identify, complete and successfully integrate acquisitions of suitable properties, which may impede our growth, and our future acquisitions may not yield the returns we expect. Our ability to expand through acquisitions requires us to identify and complete acquisitions that are compatible with our growth strategy and to successfully integrate and operate these newly-acquired properties. We continually evaluate acquisition opportunities, but cannot guarantee that suitable opportunities currently exist or will exist in the future. Our ability to identify and acquire suitable properties on favorable terms and to successfully integrate and operate them may be constrained by the following risks: • we face competition from other real estate investors with significant capital, including REITs and institutional investment funds, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices; 13 • we face competition from other potential acquirers that may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects or returns; • we may incur significant costs and divert management’s attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; • we may acquire properties that are not accretive to our operating and financial results upon acquisition, and we may be • unsuccessful in integrating and operating such properties in accordance with our expectations; our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to any debt used to finance the acquisition of such property; • we may discover unexpected items, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an acquisition opportunity after incurring expenses related thereto; • we may face opposition from governmental authorities or third parties alleging that potential acquisition transactions are anti- competitive, and as a result, we may have to spend a significant amount of time and expense to respond to related inquiries, or governmental authorities may prohibit the transaction or impose terms or conditions that are unacceptable to us; • we may fail to obtain financing for an acquisition on favorable terms or at all; • we may be unable to make, or may spend more than budgeted amounts to make, necessary improvements or renovations to acquired properties; • we may spend more than budgeted amounts to meet customer specifications on a newly-acquired warehouse; • market conditions may result in higher than expected vacancy rates and lower than expected storage charges, rent or fees; or • we may, without any recourse, or with only limited recourse, acquire properties subject to liabilities, such as liabilities for clean- up of undisclosed environmental contamination, claims by customers, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties. Our inability to identify and complete suitable property acquisitions on favorable terms or at all, or to integrate and operate newly- acquired properties to meet our financial, operational and strategic expectations, could have a material adverse effect on us. Competition in our markets may increase over time if our competitors open new warehouses. We compete with other owners and operators of temperature-controlled warehouses (including our customers or potential customers who may choose to provide temperature-controlled warehousing in-house), some of which own properties similar to ours in similar geographic locations. In recent years, our competitors, including Lineage Logistics, LLC, United States Cold Storage, Inc. (an affiliate of John Swire & Sons), AGRO Merchants Group, Interstate Warehousing, Burris Logistics, NewCold Advanced Cold Logistics, Henningsen Cold Storage Co., Hanson Logistics and Seafrigo Logistics have added, through construction, development and acquisition, temperature- controlled warehouses in certain of our markets. In addition, our customers or potential customers may choose to develop new temperature- controlled warehouses, expand their existing temperature-controlled warehouses or upgrade their equipment. Many of our warehouses are older, and as our warehouses and equipment age and newer warehouses and equipment come onto the market, we may lose existing or potential customers, and we may be pressured to reduce our rent and storage and other fees below those we currently charge in order to retain customers. If we lose one or more customers, we cannot assure you that we would be 14 able to replace those customers on attractive terms or at all. We also may be forced to invest in new construction or reposition existing warehouses at significant costs in order to remain competitive. Increased capital expenditures or the loss of warehouse segment revenues resulting from lower occupancy or storage rates could have a material adverse effect on us. We may be unable to successfully expand our operations into new markets. If the opportunity arises, we may acquire or develop properties in new markets. In particular, we have determined to strategically grow our warehouse portfolio in attractive international markets. In addition to the risks described above under “—A portion of our future growth depends upon acquisitions and we may be unable to identify and complete acquisitions of suitable properties, which may impede our growth, and our future acquisitions may not yield the returns we expect” and “—We are exposed to risks associated with expansion and development, which could result in disappointing returns and unforeseen costs and liabilities,” the acquisition or development of properties in new markets will subject us to the risks associated with a lack of understanding of the related economy and unfamiliarity with government and permitting procedures. We will also not possess the same level of familiarity with the dynamics and market conditions of any new market that we may enter, which could adversely affect our ability to successfully expand and operate in such market. We may be unable to build a significant market share or achieve a desired return on our investments in new markets. If we are unsuccessful in expanding and operating in new, high-growth markets, it could have a material adverse effect on us. We depend on certain customers for a substantial amount of our warehouse segment revenues. During the year ended December 31, 2019 and 2018, our 25 largest customers in our warehouse segment contributed approximately 60% and 63%, respectively, of our pro-forma warehouse segment revenues assuming all acquisitions occurred at the beginning of the year. As of December 31, 2019, we had one customer that accounted for 7.7% of our warehouse segment revenues and nine customers that each accounted for at least 2% of our warehouse segment revenues, also on a pro-forma basis. In addition, as of December 31, 2019, 47 of our warehouses were predominantly single-customer warehouses. If any of our most significant customers were to discontinue or otherwise reduce their use of our warehouses or other services, which they are generally free to do at any time unless they are party to a contract that includes a fixed storage commitment, we would be materially and adversely affected. While we have contracts with stated terms with certain of our customers, most of our contracts do not obligate our customers to use our warehouses or provide for fixed storage commitments. Moreover, a decrease in demand for certain commodities or products produced by our significant customers and stored in our temperature- controlled warehouses would lower our physical occupancy rates and use of our services, without lowering our fixed costs, which could have a material adverse effect on us. In addition, while some of our warehouses are located in primary markets, others are located in secondary and tertiary markets that are specifically suited to the particular needs of the customer utilizing these warehouses. For example, our production advantaged warehouses typically serve one or a small number of customers. These warehouses are also generally located adjacent to or otherwise in close proximity to customer processing or production facilities and were often build-to-suit at the time of their construction. If customers who utilize this type of warehouse, which may be located in remote areas, relocate their processing or production plants, default or otherwise cease to use our warehouses, then we may be unable to find replacement customers for these warehouses on favorable terms or at all or, if we find replacement customers, we may have to incur significant costs to reposition these warehouses for the replacement customers’ needs, any of which could have a material adverse effect on us. 15 Our customers could experience bankruptcy, insolvency or financial deterioration. Our customers could experience a downturn in their businesses, which may weaken their financial condition and liquidity and result in their failure to make timely payments to us or otherwise default under their contracts or a decrease in their inventory levels with us and use of our services, without lowering our fixed costs, which could materially and adversely affect us. If our customers are unable to comply with the terms of their contracts with us, we may be forced to modify these contracts on terms that are not favorable to us. Alternatively, customers may seek to cancel their contracts. Termination provisions in our contracts vary, but generally permit either party to terminate the contract upon a material breach by the counterparty and otherwise are specifically determined for each customer based on several factors. These include the volume of business involved, the readiness and quality of available capacity elsewhere and the customer’s internal constraints affecting its ability to move product. Cancellation of, or the failure of a customer to perform under, a contract could require us to seek replacement customers. There can be no assurance that we would be able to find suitable replacements on favorable terms in a timely manner or at all or reposition the warehouses without incurring significant costs. A bankruptcy filing by or relating to any of our customers could prevent or delay us from collecting pre-bankruptcy obligations. In addition, to the extent that our customers have continuing obligations under any warehouse contract, the bankruptcy court might authorize the customer to reject and terminate its warehouse contract with us, or the bankruptcy trustee might pursue preferential payments made to us prior to a bankruptcy. In such instances, our claim for unpaid charges would likely not be paid in full, even if we have secured warehouseman’s liens on our customer’s assets. Additionally, any such lien may attach to products that are perishable or otherwise not readily saleable by us. Although we have in the past been deemed to have “critical vendor” status in certain bankruptcy filings, which resulted in our customer being able to pay us pre-bankruptcy obligations, there is no guarantee that we will be granted any such status in the future. The bankruptcy, insolvency or financial deterioration of our customers, particularly our significant customers, could materially and adversely affect us. The short-term nature and lack of fixed storage commitments of many of our customer contracts exposes us to certain risks that could have a material adverse effect on us. On a combined pro forma basis assuming all 2019 acquisitions occurred as of the beginning of the year, 46.2% of our warehouse segment revenues were generated from contracts with a fixed storage commitment or leases with customers as of December 31, 2019. On a combined pro forma basis, 40.6% of rent and storage revenue were generated from fixed commitment storage contracts for the year ended December 31, 2019. Our customer contracts that do not contain fixed storage commitments typically do not require our customers to utilize a minimum number of pallet positions or provide for guaranteed fixed payment obligations from any customers to us. As a result, most of our customers may discontinue or otherwise reduce their use of our warehouses or other services in their discretion at any time, without lowering our fixed costs, which could have a material adverse effect on us. Additionally, we have discrete pricing for our customers based upon their unique profiles. Therefore, a shift in the mix of business types or customers could negatively impact our financial results. The storage and other fees we generate from customers with month-to-month warehouse rate agreements may be adversely affected by declines in market storage and other fee rates more quickly than with respect to our contracts that contain stated terms. There also can be no assurance that we will be able to retain any customers upon the expiration of their contracts (whether month-to-month warehouse rate agreements or contracts) or leases. If we cannot retain our customers, or if our customers that are not party to contracts with 16 fixed storage commitments elect not to store goods in our warehouses, we may be unable to find replacement customers on favorable terms or at all or on a timely basis and we may incur significant expenses in obtaining replacement customers and repositioning warehouses to meet their needs. Any of the foregoing could materially and adversely affect us. We depend on key personnel and specialty personnel, and the loss of key personnel and limited availability of skilled personnel in our labor markets could harm our business and operating and financial results. Our success depends to a significant degree upon the continued contributions of certain key personnel, each of whom would be difficult to replace. If any of our key personnel were to cease employment with us, our operating and financial results could suffer. Further, such a loss could be negatively perceived in the capital markets. We have not obtained and do not expect to obtain key man life insurance on any of our key personnel. Our ability to retain our management group or to attract suitable replacements should any members of our management team leave is dependent on the competitive nature of the employment market. The loss of services from key members of our management team or a limitation of their availability could materially and adversely affect us. We also believe that our future success, particularly in international markets, will depend in large part upon our ability to hire and retain highly skilled managerial, investment, financing, operational and marketing personnel. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our employees are contributing factors to our ability to maximize our income and to achieve the highest sustainable storage levels at each of our warehouses. We may be unsuccessful in attracting and retaining such skilled personnel. In addition, our temperature-controlled warehouse business depends on the continued availability of skilled personnel with engineering expertise and experience. Competition for such personnel is intense, and we may be unable to hire and retain such personnel. Wage increases driven by applicable legislation and competitive pressures on employee wages and benefits could negatively affect our operating margins and our ability to attract qualified personnel. Our hourly employees in the U.S. and internationally are typically paid wage rates above the applicable minimum wage. However, increases in the minimum wage will increase our labor costs if we are to continue paying our hourly employees above the applicable minimum wage. If we are unable to continue paying our hourly employees above the applicable minimum wage, we may be unable to hire and retain qualified personnel. The U.S. federal minimum wage has been $7.25 per hour since July 24, 2009. From time to time, various U.S. federal, state and local legislators have proposed or enacted significant changes to the minimum wage requirements. For example, certain local or regional governments in places such as Chicago, Los Angeles, Seattle, San Francisco, Portland and New York have approved phased-in increases that eventually will take their minimum wage to as high as $16.00 per hour. If similar increases were to occur in additional markets in which we operate, our operating margins would be negatively affected unless we are able to increase our rent, storage fees and handling fees in order to pass increased labor costs on to our customers. Our standard contract forms include rate protection for uncontrollable costs such as labor, however, despite such provisions, we may not be able to fully pass through these increased costs. Competitive pressures may also require that we enhance our pay and benefits package to compete effectively for such personnel (including costs associated with health insurance coverage or workers’ compensation insurance). If we fail to attract and retain qualified and skilled personnel, we could be materially and adversely affected. 17 We may be subject to work stoppages, which could increase our operating costs and disrupt our operations. Certain portions of our operations are subject to collective bargaining agreements. As of December 31, 2019, worldwide, we employed approximately 12,600 people, approximately 49% of which were represented by various local labor unions, and 84 of our 178 warehouses have unionized associates that are governed by 74 different collective bargaining agreements. Unlike owners of industrial warehouses, we hire our own workforce to handle and store items for our customers. Strikes, slowdowns, lockouts or other industrial disputes could cause us to experience a significant disruption in our operations, as well as increase our operating costs, which could materially and adversely affect us. If a greater percentage of our work force becomes unionized, we could be materially and adversely affected. Since January 1, 2016, we have successfully negotiated 76 collective bargaining agreements without any work stoppages. During the calendar year 2019 we successfully negotiated and renewed 21 agreements with two awaiting ratification. If we fail to re-negotiate our expired or expiring collective bargaining agreements on favorable terms in a timely manner or at all, we could be materially and adversely affected. We are subject to additional risks with respect to our current and potential international operations and properties. As of December 31, 2019, we owned or had a leasehold interest in 14 temperature-controlled warehouses outside the United States, and we managed four warehouses outside the United States on behalf of third parties. We also intend to strategically grow our portfolio globally through acquisitions of temperature-controlled warehouses in attractive international markets to service demonstrable customer demand where we believe the anticipated risk-adjusted returns are consistent with our investment objectives. However, there is no assurance that our existing customer relationships will support our international operations in any meaningful way or at all. Our international operations and properties could be affected by factors peculiar to the laws and business practices of the jurisdictions in which our warehouses are located. These laws and business practices expose us to risks that are different than or in addition to those commonly found in the United States. Risks relating to our international operations and properties include: • • • • • • • • • changing governmental rules and policies, including changes in land use and zoning laws; enactment of laws relating to the international ownership of real property or mortgages and laws restricting the ability to remove profits earned from activities within a particular country to a person’s or company’s country of origin; variations in currency exchange rates; adverse market conditions caused by terrorism, civil unrest, natural disasters, infectious disease and changes in international, national or local governmental or economic conditions; business disruptions arising from public health crises and outbreaks of communicable diseases, including the recent coronavirus outbreak; the willingness of U.S. or international lenders to make mortgage loans in certain countries and changes in the availability, cost and terms of secured and unsecured debt resulting from varying governmental economic policies; the imposition of unique tax structures and changes in real estate and other tax rates and other operating expenses in particular countries; general political and economic instability; potential liability under the Foreign Corrupt Practices Act of 1977, as amended, which generally prohibits U.S. companies and their intermediaries from bribing or making other prohibited payments to non-U.S. officials for the purpose of obtaining or retaining business or other benefits; 18 • • • our limited experience and expertise in foreign countries relative to our experience and expertise in the United States; provisions of the Tax Cuts and Jobs Act, or TCJA, that require the United States parent to include income from certain international operations into U.S. taxable income, and adverse tax consequences in the applicable jurisdictions; and potential liability under, and costs of complying with, more stringent environmental laws or changes in the requirements or interpretation of existing laws, or environmental consequences of less stringent environmental management practices in foreign countries relative to the United States. If any of the foregoing risks were to materialize, they could materially and adversely affect us. Our warehouse business outside the United States exposes us to losses resulting from currency fluctuations. Our warehouse business outside the United States exposes us to losses resulting from currency fluctuations, as the revenues associated with our international operations and properties are generated in the local currency of each of the countries in which the properties are located. Fluctuations in exchange rates between these currencies and the U.S. dollar will therefore give rise to non-U.S. currency exposure, which could materially and adversely affect us. We naturally hedge this exposure by incurring operating costs in the same currency as the revenue generated by the related property. We may attempt to mitigate any such effects by entering into currency exchange rate hedging arrangements where it is practical to do so and where such hedging arrangements are available. These hedging arrangements may bear substantial costs, however, and may not eliminate all related risks. We cannot assure you that our efforts will successfully mitigate our currency risks. Moreover, if we do engage in currency exchange rate hedging activities, any income recognized with respect to these hedges (as well as any foreign currency gain recognized with respect to changes in exchange rates) may not qualify under the 75% gross income test or the 95% gross income test that we must satisfy annually in order to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code. The Argentine foreign exchange market is subject to controls, which may adversely affect our ability to repatriate the earnings we derive from our Argentine operations. Different Argentine government administrations have established and implemented various restrictions on foreign currency transfers, including certain restrictions on the ability to repatriate earnings from Argentina, and requirements that corporations obtain authorization to buy any foreign currency that is not for international trade. Companies must also repatriate earnings from foreign sales within five business days. The impact that these current measures will have on the Argentine economy and on us is still uncertain. We cannot assure you that the current regulations will not be amended, or that no new regulations will be enacted in the future imposing other limitations on funds flowing into and out of the Argentine foreign exchange market. Any such new measures, as well as any additional regulations and/or restrictions, could materially and adversely affect our ability to repatriate the earnings we derive from our Argentine operations or transfer funds abroad. In the future, we cannot rule out a less favorable international economic environment, continued lack of stability and competitiveness of the Argentine currency against other foreign currencies, a lower level of confidence among consumers and foreign and domestic investors, continued higher inflation rate or future political uncertainties, among other factors. In case any such circumstances occur, it could materially and adversely affect the results of our operations in Argentina and, consequently, our business. 19 We may incur liabilities or harm our reputation as a result of quality-control issues associated with our warehouse storage and other services. We store frozen and perishable food and other products and provide food processing, repackaging and other services. Product contamination, spoilage, other adulteration, product tampering or other quality control issues could occur at any of our facilities or during the transportation of these products, which could cause our customers to lose all or a portion of their inventory. We could be liable for the costs incurred by our customers as a result of the lost inventory, and we also may be subject to liability, which could be material, if any of the frozen and perishable food products we stored, processed, repackaged or transported caused injury, illness or death. The occurrence of any of the foregoing may negatively impact our brand and reputation and otherwise have a material adverse effect on us. Our temperature-controlled warehouse infrastructure may become obsolete or unmarketable and we may not be able to upgrade our equipment cost-effectively or at all. The infrastructure at our temperature-controlled warehouses may become obsolete or unmarketable due to the development of, or demand for, more advanced equipment or enhanced technologies, including increased automation of our warehouses. Increased automation may entail significant start-up costs and time and may not perform as expected. In addition, our information technology platform pursuant to which we provide inventory management and other services to our customers may become outdated. When customers demand new equipment or technologies, the cost could be significant and we may not be able to upgrade our warehouses on a cost-effective basis in a timely manner, or at all, due to, among other things, increased expenses to us that cannot be passed on to customers or insufficient resources to fund the necessary capital expenditures. The obsolescence of our infrastructure or our inability to upgrade our warehouses would likely reduce warehouse segment revenues, which could have a material adverse effect on us. A failure of our information technology systems, cybersecurity attacks or a breach of our information security systems, networks or processes could cause loss of confidential information and other business disruptions and may materially adversely affect our business. We rely extensively on our computer systems to process transactions and operate and manage our business. Despite efforts to avoid or mitigate such risks, external and internal risks, such as malware, insecure coding, data leakage and human error pose direct threats to the stability and effectiveness of our information technology systems. The failure of our information technology systems to perform as anticipated could adversely affect our business through transaction errors, billing and invoicing errors, processing inefficiencies or errors and loss of sales, receivables, collections and customers, in each case, which could result in reputational damage and have an ongoing adverse effect on our business, results of operation and financial condition. We may also be subject to cybersecurity attacks and other intentional hacking. These attacks could include attempts to gain unauthorized access to our data and computer systems. We employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password changes, firewall detection systems, frequent backups, a redundant data system for core applications and annual penetration testing; however, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. A cybersecurity attack or breach could compromise the confidential information of our employees, customers and vendors. A successful attack could result in service interruptions, operational difficulties, loss of revenue or market share, liability to our customers or others, diversion of corporate resources and injury to our reputation and increased costs. Addressing such issues could prove difficult or impossible and be very costly. Responding to claims or liability could similarly involve substantial costs. Recently, there has been heightened interest and enforcement focus on data protection regulations and standards both in the United States and abroad. Failure to 20 comply with applicable data protection regulations or standards may expose us to litigation, fines, sanctions or other penalties, which could damage our reputation and adversely impact our business, results of operation and financial condition. In addition, our customers rely extensively on computer systems to process transactions and manage their business and thus their businesses are also at risk from, and may be impacted by, cybersecurity attacks. An interruption in the business operations of our customers or a deterioration in their reputation resulting from a cybersecurity attack could indirectly impact our business operations. As of December 31, 2019, we have not had a significant cyber breach or attack that had an adverse material impact on our business, financial condition, liquidity or results of operations. We primarily depend on third-party trucking service providers to provide transportation services to our customers, and any delays or disruptions in providing these transportation services, or damages caused to products during transportation, could have a material adverse effect on us. While we do provide transportation services directly and have some transportation assets, the transportation services we offer to our customers are done primarily on a brokerage basis. We depend on third-party trucking service providers to provide refrigerated transportation services to our customers. We do not have an exclusive or long-term contractual relationship with any of these third-party trucking service providers, and we can provide no assurance that our customers will have uninterrupted or unlimited access to their transportation assets or services. Any delays or disruptions in providing these transportation services to our customers could reduce the confidence our customers have in our ability to provide transportation services and could impair our ability to retain existing customers or attract new customers. Moreover, in connection with any such delays or disruptions, or if customers’ products are damaged or destroyed during transport, we could incur financial obligations or be subject to lawsuits by our customers. Any of these risks could have a material adverse effect on us. We participate in multiemployer pension plans administered by labor unions. To the extent we or other employers withdraw from participation in any of these plans, we could face additional liability from our participation therein. As of December 31, 2019, we participated in seven multiemployer pension plans under the terms of collective bargaining agreements with labor unions representing the Company’s associates. Approximately 26% of our employees were participants in such multiemployer pension plans as of December 31, 2019. We make periodic contributions to these plans pursuant to the terms of our collective bargaining agreements to allow the plans to meet their pension benefit obligations. In the event that we withdraw from participation in any of the multiemployer pension plans in which we participate or should any of the pension plans in which we participate fail, the documents governing the applicable plan and applicable law could require us to make an additional contribution to the applicable plan in the amount of the unfunded vested benefits allocable to our participation in the plan, and we would have to reflect that as an expense on our Consolidated Statement of Operations and as a liability on our Consolidated Balance Sheet. Our liability for any multiemployer pension plan would depend on the extent of the plan’s funding of vested benefits as of the year in which the withdrawal or failure occurs, and may vary depending on the funded status of the applicable multiemployer pension plan, whether there is a mass withdrawal of all participating employers and whether any other participating employer in the applicable plan withdraws from the plan and is not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan. Based on the latest information available from plan administrators, we estimate our share of the aggregate withdrawal liability for the multiemployer pension plans in which we participate could have been as much as $566.7 million as of December 31, 2019, of which we estimate that certain of our customers are contractually obligated to make indemnification payments to us for approximately $533.7 million. However, there is no 21 guarantee that, to the extent we incurred any such withdrawal liability, we would be successful in obtaining any indemnification payments therefor. In the ordinary course of our renegotiation of collective bargaining agreements with labor unions that maintain these plans, we could agree to discontinue participation in one or more plans, and in that event we could face a withdrawal liability. Additionally, we could be treated as withdrawing from a plan if the number of our employees participating in the plan is reduced to a certain degree over certain periods of time. Some multiemployer pension plans, including ones in which we participate, are reported to have significant underfunded liabilities. Such underfunding could increase the size of our potential withdrawal liability. Additionally, changes to multiemployer pension plan laws and regulations could increase our potential cost of withdrawing from one or more multiemployer pension plans. Power costs may increase or be subject to volatility, which could result in increased costs that we may be unable to recover. Power is a major operating cost for temperature-controlled warehouses, and the price of power varies substantially between the markets in which we operate, depending on the power source and supply and demand factors. For the years ended December 31, 2019 and 2018, power costs in our warehouse segment accounted for 8.9% and 9.0%, respectively, of the segment’s operating expenses. We have implemented programs across our warehouses to reduce overall consumption and to reduce consumption at peak demand periods, when power prices are typically highest. However, there can be no assurance that these programs will be effective in reducing our power consumption. We have entered into, or may in the future enter into, fixed price power purchase agreements in certain deregulated markets whereby we contract for the right to purchase an amount of electric capacity at a fixed rate per kilowatt. These contracts do not obligate us to purchase any minimum amounts but would require negotiation if our capacity requirements were to materially differ from historical usage or exceed the thresholds agreed upon. For example, exceeding these thresholds could have an adverse impact on our incremental power purchase costs if we were to be unable to obtain favorable rates on the incremental purchases. If the cost of electric power to operate our warehouses increases dramatically or fluctuates widely and we are unable to pass such costs through to customers, we could be materially and adversely affected. We could experience power outages or breakdowns of our refrigeration equipment. Our warehouses are subject to electrical power outages and breakdowns of our refrigeration equipment. We attempt to limit exposure to such occasions by conducting regular maintenance and upgrades to our refrigeration equipment, and using backup generators and power supplies, generally at a significantly higher operating cost than we would pay for an equivalent amount of power from a local utility. However, we may not be able to limit our exposure entirely even with these protections in place. Power outages that last beyond our backup and alternative power arrangements and refrigeration equipment breakdowns would harm our customers and our business. During power outages and refrigeration equipment breakdowns, changes in humidity and temperature could spoil or otherwise contaminate the frozen and perishable food and other products stored by our customers. We could incur financial obligations to, or be subject to lawsuits by, our customers in connection with these occurrences, which may not be covered by insurance. Any loss of services or product damage could reduce the confidence of our customers in our services and could consequently impair our ability to attract and retain customers. Additionally, in the event of the complete failure of our refrigeration equipment, we would incur significant costs in repairing or replacing our refrigeration equipment, which may not be covered by insurance. Any of the foregoing could have a material adverse effect on us. As of December 31, 2019, we have not had a 22 significant power outage or breakdown of our refrigeration equipment. We hold leasehold interests in 26 of our warehouses, and we may be forced to vacate our warehouses if we default on our obligations thereunder and we will be forced to vacate our warehouses if we are unable to renew such leases upon their expiration. As of December 31, 2019, we held leasehold interests in 26 of our warehouses. These leases expire (taking into account our extension options) from June 2020 to October 2050, and have a weighted-average remaining term of 25 years. If we default on any of these leases, we may be liable for damages and could lose our leasehold interest in the applicable property, including all improvements. We would incur significant costs if we were forced to vacate any of these leased warehouses due to, among other matters, the high costs of relocating the equipment in our warehouses. If we were forced to vacate any of these leased warehouses, we could lose customers that chose our storage or other services based on our location, which could have a material adverse effect on us. Our landlords could attempt to evict us for reasons beyond our control. Further, we may be unable to maintain good working relationships with our landlords, which could adversely affect our relationship with our customers and could result in the loss of customers. In addition, we cannot assure you that we will be able to renew these leases prior to their expiration dates on favorable terms or at all. If we are unable to renew our lease agreements, we will lose our right to operate these warehouses and be unable to derive revenues from these warehouses and, in the case of ground leases, we forfeit all improvements on the land. We could also lose the customers using these warehouses who are unwilling to relocate to another one of our warehouses, which could have a material adverse effect on us. Furthermore, unless we purchase the underlying fee interests in these properties, as to which no assurance can be given, we will not share in any increase in value of the land or improvements beyond the term of such lease, notwithstanding any capital we have invested in the applicable warehouse, especially warehouses subject to ground leases. Even if we are able to renew these leases, the terms and other costs of renewal may be less favorable than our existing lease arrangements. Failure to sufficiently increase revenues from customers at these warehouses to offset these projected higher costs could have a material adverse effect on us. Charges for impairment of goodwill or other long-lived assets could adversely affect our financial condition and results of operations. We regularly monitor the recoverability of our long-lived assets, such as buildings and improvements and machinery and equipment, and evaluate their carrying value for impairment. whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. We review goodwill on an annual basis to determine if impairment has occurred and review the recoverability of fixed assets, generally on a quarterly basis and whenever events or changes in circumstances indicate that impairment may have occurred or the value of such assets may not be fully recoverable. If such reviews indicate that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value and fair value of the long-lived assets in the period the determination is made. The testing of long-lived assets and goodwill for impairment requires the use of estimates based on significant assumptions about our future revenue, profitability, cash flows, fair value of assets and liabilities, weighted average cost of capital, as well as other assumptions. Changes in these estimates, or changes in actual performance compared with these estimates, may affect the fair value of long-lived assets, which could result in an impairment charge. 23 General Risks Related to the Real Estate Industry Our performance and value are subject to economic conditions affecting the real estate market, temperature-controlled warehouses in particular, as well as the broader economy. Our performance and value depend on the amount of revenues earned, as well as the expenses incurred, in connection with operating our warehouses. If our temperature-controlled warehouses do not generate revenues and operating cash flows sufficient to meet our operating expenses, including debt service and capital expenditures, we could be materially and adversely affected. In addition, there are significant expenditures associated with our real estate (such as real estate taxes, maintenance costs and mortgage payments) that generally do not decline when circumstances reduce the revenues from our warehouses. Accordingly, our expenditures may stay constant, or increase, even if our revenues decline. The real estate market is affected by many factors that are beyond our control, and revenues from, and the value of, our properties may be materially and adversely affected by: • • • • • • • • • • • • • • • • • • changes in the national, international or local economic climate; availability, cost and terms of financing; technological changes, such as expansion of e-commerce, reconfiguration of supply chains, automation, robotics or other technologies; the attractiveness of our properties to potential customers; inability to collect storage charges, rent and other fees from customers; the ongoing need for, and significant expense of, capital improvements and addressing obsolescence in a timely manner, particularly in older structures; changes in supply of, or demand for, similar or competing properties in an area; customer retention and turnover; excess supply in the market area; financial difficulties, defaults or bankruptcies by our customers; changes in operating costs and expenses and our ability to control rates; changes in or increased costs of compliance with governmental rules, regulations and fiscal policies, including changes in tax, real estate, environmental and zoning laws, and our potential liability thereunder; our ability to provide adequate maintenance and insurance; changes in the cost or availability of insurance, including coverage for mold or asbestos; unanticipated changes in costs associated with known adverse environmental conditions, newly discovered environmental conditions and retained liabilities for such conditions; changes in interest rates or other changes in monetary policy; disruptions in the global supply-chain caused by political, regulatory or other factors such as terrorism, political instability and public health crises; and civil unrest, acts of war, terrorist attacks and natural disasters, including, but not limited to, earthquakes and floods, which may result in uninsured and under-insured losses. In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, would result in a general decrease in rates or an increased occurrence of defaults under existing contracts, which could materially and adversely affect us. For these and other reasons, we cannot assure you that we will be able to achieve our business objectives. 24 We could incur significant costs under environmental laws relating to the presence and management of asbestos, ammonia and other chemicals and underground storage tanks. Environmental laws in the United States require that owners or operators of buildings containing asbestos properly manage asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is damaged, is decayed, poses a health risk or is disturbed during building renovation or demolition. These laws impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos and other toxic or hazardous substances. Some of our properties may contain asbestos or asbestos-containing building materials. Most of our warehouses utilize ammonia as a refrigerant. Ammonia is classified as a hazardous chemical regulated by the U.S. Environmental Protection Agency, or the EPA. Releases of ammonia occur at our warehouses from time to time, and any number of unplanned events, including severe storms, fires, earthquakes, vandalism, equipment failure, operational errors, accidents, deliberate acts of employees or third parties, and terrorist acts could result in a significant release of ammonia that could result in injuries, loss of life, property damage and a significant interruption at affected facilities. For example, in 2018, we identified and reported ammonia releases across refrigeration systems in three of our facilities. These releases resulted in no significant property damage or injury. In 2019, we identified, and reported, ammonia releases across refrigeration systems in three of our facilities. These releases resulted in no significant property damage or injury. Although our warehouses have risk management programs required by the Occupational Safety and Health Act of 1970, as amended, or OSHA, the EPA and other regulatory agencies in place, we could incur significant liability in the event of an unanticipated release of ammonia from one of our refrigeration systems. Releases could occur at locations or at times when trained personnel may not be available to respond quickly, increasing the risk of injury, loss of life or property damage. Some of our warehouses are not staffed 24 hours a day and, as a result, we may not respond to intentional or accidental events during closed hours as quickly as we could during open hours, which could exacerbate any injuries, loss of life or property damage. We also could incur liability in the event we fail to report such ammonia releases in a timely fashion. Environmental laws and regulations subject us and our customers to liability in connection with the storage, handling and use of ammonia and other hazardous substances utilized in our operations. Our warehouses also may have under-floor heating systems, some of which utilize ethylene glycol, petroleum compounds, or other hazardous substances; releases from these systems could potentially contaminate soil and groundwater. In addition, some of our properties have been operated for decades and have known or potential environmental impacts. Other than in connection with financings, we have not historically performed regular environmental assessments on our properties, and we may not do so in the future. Many of our properties contain, or may in the past have contained, features that pose environmental risks including underground tanks for the storage of petroleum products and other hazardous substances as well as floor drains and wastewater collection and discharge systems, hazardous materials storage areas and septic systems. All of these features create a potential for the release of petroleum products or other hazardous substances. Some of our properties are adjacent to or near properties that have known environmental impacts or have in the past stored or handled petroleum products or other hazardous substances that could have resulted in environmental impacts to soils or groundwater that could affect our properties. In addition, former owners, our customers, or third parties outside our control (such as independent transporters) have engaged, or may in the future engage, in activities that have released or may release petroleum products or other hazardous substances on our properties. Any of these activities or circumstances could materially and adversely affect us. We could incur significant costs related to environmental conditions and liabilities. 25 Our operations are subject to a wide range of environmental laws and regulations in each of the locations in which we operate, and compliance with these requirements involves significant capital and operating costs. Failure to comply with these environmental requirements can result in civil or criminal fines or sanctions, claims for environmental damages, remediation obligations, the revocation of environmental permits or restrictions on our operations. Future changes in environmental laws, or in the interpretation of those laws, including potential future climate change regulations, such as those affecting electric power providers or regulations related to the control of greenhouse gas emissions, or stricter requirements affecting our operations could result in increased capital and operating costs, which could materially and adversely affect us. Under various U.S. federal, state and local environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, commonly known as CERCLA, or the Superfund law, a current or previous owner or operator of real property may be liable for the entire cost of investigating, removing 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 cleanup cost. We may also be subject to environmental liabilities under the regulatory regimes in place in the other countries in which we operate. The presence of hazardous or toxic substances on our properties, or the failure to properly remediate contaminated properties, could give rise to liens in favor of the government for failure to address the contamination, or otherwise adversely affect our ability to sell or lease properties or borrow using our properties as collateral. Environmental laws also may impose restrictions on the manner in which property may be used or our businesses may be operated. Under environmental laws, a property owner or operator is subject to compliance obligations, potential government sanctions for violations or natural resource damages, claims from private parties for cleanup contribution or other environmental damages and investigation and remediation costs. In connection with the acquisition, ownership or operation of our properties, we may be exposed to such costs. The cost of resolving environmental, property damage or personal injury claims, of compliance with environmental regulatory requirements, of paying fines, or meeting new or stricter environmental requirements or of remediating contaminated properties could materially and adversely affect us. Nearly all of our properties have been the subject of environmental assessments conducted by environmental consultants at some point in the past. Most of these assessments have not included soil sampling or subsurface investigations. Some of our older properties have not had asbestos surveys. In many instances, we have not conducted further investigations of environmental conditions disclosed in these environmental assessments nor can we be assured that these environmental assessments have identified all potential environmental liabilities associated with our properties. Material environmental conditions, liabilities or compliance concerns may have arisen or may arise after the date of the environmental assessments on our properties. Moreover, there can be no assurance that (i) future laws, ordinances or regulations will not impose new material environmental obligations or costs, including the potential effects of climate change or new climate change regulations, (ii) we will not incur material liabilities in connection with both known and undiscovered environmental conditions arising out of past activities on our properties or (iii) our properties will not be materially and adversely affected by the operations of customers, by environmental impacts or operations on neighboring properties (such as releases from underground storage tanks), or by the actions of parties unrelated to us. In the future, our customers may demand lower indirect emissions associated with the storage and transportation of frozen and perishable foods, which could lead customers to seek temperature-controlled storage 26 from our competitors. Further, such demand could require us to implement various processes to reduce emissions from our operations in order to remain competitive, which could materially and adversely affect us. Our insurance coverage may be insufficient to cover potential environmental liabilities. We maintain a portfolio environmental insurance policy that provides coverage for sudden and accidental environmental liabilities, subject to the policy’s coverage conditions, deductibles and limits, for most of our properties. There is no assurance that future environmental claims will be covered under these policies or that, if covered, the loss will not exceed policy limits. From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield an attractive risk-adjusted return. In such an instance, we factor the estimated costs of environmental investigation, cleanup and monitoring into the net cost. Further, in connection with property dispositions, we may agree to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties. A failure to accurately estimate these costs, or uninsured environmental liabilities, could materially and adversely affect us. Our properties may contain or develop harmful molds or have other air quality issues, which could lead to financial liability for adverse health effects to our employees or third parties, and costs of remediating the problem. Our properties may contain or develop harmful molds or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediating the problem. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, poor equipment maintenance, chemical contamination from indoor or outdoor sources and other biological contaminants, such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants present above certain levels can cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property, to reduce indoor moisture levels, or to upgrade ventilation systems to improve indoor air quality. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our employees, our customers, employees of our customers and others if property damage or health concerns arise. Illiquidity of real estate investments, particularly our specialized temperature-controlled warehouses, could significantly impede our ability to respond to adverse changes in the performance of our business and properties. Real estate investments are relatively illiquid, and given that our properties are highly specialized temperature-controlled warehouses, our properties may be more illiquid than other real estate investments. This illiquidity is driven by a number of factors, including the specialized and often customer-specific design of our warehouses, the relatively small number of potential purchasers of temperature- controlled warehouses, the difficulty and expense of repurposing our warehouses and the location of many of our warehouses in secondary or tertiary markets. As a result, we may be unable to complete an exit strategy or quickly sell properties in our portfolio in response to adverse changes in the performance of our properties or in our business generally. We cannot predict whether we will be able to sell any property for the price or on the terms set by us or whether any price or other terms offered by a prospective buyer would be acceptable to us. We also cannot predict the length of time it would take to complete the sale of any such property. Such sales might also require us to expend funds to mitigate or correct defects to the property or make changes or improvements to the property prior to its sale. The 27 ability to sell assets in our portfolio may also be restricted by certain covenants in our mortgage loan agreements and other credit agreements. Code requirements relating to our status as a REIT may also limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. We could experience uninsured or under-insured losses relating to our warehouses and other assets, including our real property. We carry insurance coverage on all of our properties in an amount that we believe adequately covers any potential casualty losses. However, there are certain losses, including losses from floods, earthquakes, acts of war or riots, that we are not generally insured against or that we are not generally fully insured against because it is not deemed economically feasible or prudent to do so. In addition, changes in the cost or availability of insurance could expose us to uninsured casualty losses. In the event that any of our properties incurs a casualty loss that is not covered by insurance (in part or at all), the value of our assets will be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenues in these properties. Any such losses could materially and adversely affect us. In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future on favorable terms or at all. In the event of a fire, flood or other occurrence involving the loss of or damage to stored products held by us but belonging to others, we may be liable for such loss or damage. Although we have an insurance program in effect, there can be no assurance that such potential liability will not exceed the applicable coverage limits under our insurance policies. A number of our properties are located in areas that are known to be subject to earthquake activity, such as California, Washington, Oregon and New Zealand, or in flood zones, such as Appleton, Wisconsin and Roanoke, Virginia, in each case exposing them to increased risk of casualty. If we or one or more of our customers experiences a loss for which we are liable and that loss is uninsured or exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. We are self-insured for workers’ compensation and health insurance under a large deductible program, meaning that we have accrued liabilities in amounts that we consider appropriate to cover losses in these areas. In addition, we maintain excess loss coverage to insure against losses in excess of the reserves that we have established for these claims in amounts that we consider appropriate. However, in the event that our loss experience exceeds our reserves and the limits of our excess loss policies, we could be materially and adversely affected. We may not be reimbursed for increases in operating expenses and other real estate costs. We may be limited in our ability to obtain reimbursement from customers under existing warehouse contracts for any increases in operating expenses such as labor, electricity charges, maintenance costs, taxes, including real estate and income taxes, or other real estate- related costs. Unless we are able to offset any unexpected costs with sufficient revenues through new warehouse contracts or customers, increases in these costs would lower our operating margins and could materially and adversely affect us. Costs of complying with governmental laws and regulations could adversely affect us and our customers. Our business is highly regulated at the federal, state and local level. The food industry in all jurisdictions in which we operate is subject to numerous government standards and regulations. While we believe that we are 28 currently in compliance with all applicable government standards and regulations, there can be no assurance that all of our warehouses or our customers’ operations are currently in compliance with, or will be able to comply in the future with, all applicable standards and regulations or that the costs of compliance will not increase in the future. All real property and the operations conducted on real property are subject to governmental laws and regulations relating to environmental protection and human health and safety. In addition, our warehouses are subject to regulation and inspection by the United States Food and Drug Administration and the United States Department of Agriculture and our domestic trucking operations are subject to regulation by the U.S. Department of Transportation and the Federal Highway Administration. Our ability to operate and to satisfy our contractual obligations may be affected by permitting and compliance obligations arising under such laws and regulations. Some of these laws and regulations could increase our operating costs, result in fines or impose joint and several liability on customers, owners or operators for the costs to investigate or remediate contamination, regardless of fault or whether the acts causing the contamination were legal. Some of these laws and regulations have been amended so as to require compliance with new or more stringent standards in the future. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require that we or our customers incur material expenditures. In addition, there are various governmental, environmental, fire, health, safety and similar regulations with which we and our customers may be required to comply and which may subject us and our customers to liability in the form of fines or damages for noncompliance. Any material expenditures, fines or damages imposed on our customers or us could directly or indirectly have a material adverse effect on us. In addition, changes in these governmental laws and regulations, or their interpretation by agencies and courts, could occur. The Americans with Disabilities Act of 1990, as amended, or the ADA, generally requires that public buildings, including portions of our warehouses, be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our warehouses, including the removal of access barriers, it could materially and adversely affect us. Our properties are subject to regulation under OSHA, which requires employers to protect employees against many workplace hazards, such as exposure to harmful levels of 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 other jurisdictions in which we operate is substantial and any failure to comply with these regulations could expose us to penalties and potentially to liabilities to employees who may be injured at our warehouses, any of which could be material. Furthermore, any fines or violations that we face under OSHA could expose us to reputational risk. We face ongoing litigation risks which could result in material liabilities and harm to our business regardless of whether we prevail in any particular matter. We are a large company operating in multiple U.S. and international jurisdictions, with thousands of employees and business counterparts. As such, there is an ongoing risk that we may become involved in legal disputes or litigation with these parties or others. The costs and liabilities with respect to such legal disputes may be material and may exceed our amounts accrued, if any, for such liabilities and costs. In addition, our defense of legal disputes or resulting litigation could result in the diversion of our management’s time and attention from the operation of our business, each of which could impede our ability to achieve our business objectives. Some or all of the amounts we may be required to pay to defend or to satisfy a judgment or settlement of any or all of our disputes and litigation may not be covered by insurance. 29 We may invest in joint ventures in the future and, in the event we do so, could face risks stemming from our partial ownership interests in such properties which could materially and adversely affect the value of any such joint venture investments. In the future, we may make additional investments through joint venture investment vehicles. These investments involve risks not present in investments where a third party is not involved, including the possibility that: • • • • • • we and a co-venturer or partner may reach an impasse on a major decision that requires the approval of both parties; • we may not have exclusive control over the development, financing, management and other aspects of the property or joint venture, which may prevent us from taking actions that are in our best interest but opposed by a co-venturer or partner; a co-venturer or partner may at any time have economic or business interests or goals that are or may become inconsistent with ours; a co-venturer or partner may encounter liquidity or insolvency issues or may become bankrupt, which may mean that we and any other remaining co-venturers or partners generally would remain liable for the joint venture’s liabilities; a co-venturer or partner may take action contrary to our instructions, requests, policies or investment objectives, including our current policy with respect to maintaining our qualification as a REIT under the Code; a co-venturer or partner may take actions that subject us to liabilities in excess of, or other than, those contemplated; in certain circumstances, we may be liable for actions of our co-venturer or partner, and the activities of a co-venturer or partner could adversely affect our ability to qualify as a REIT, even if we do not control the joint venture; our joint venture agreements may restrict the transfer of a co-venturer’s or partner’s interest or otherwise restrict our ability to sell the interest when we desire or on advantageous terms; our joint venture agreements may contain buy-sell provisions pursuant to which one co-venturer or partner may initiate procedures requiring the other co-venturer or partner to choose between buying the other co-venturer’s or partner’s interest or selling its interest to that co-venturer or partner; if a joint venture agreement is terminated or dissolved, we may not continue to own or operate the interests or investments underlying the joint venture relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; or disputes between us and a co-venturer or partner may result in litigation or arbitration that could increase our expenses and prevent our management from focusing their time and attention on our business. • • • • Any of the above could materially and adversely affect the value of our current joint venture investment or any future joint venture investments and potentially have a material adverse effect on us. 30 Risks Related to Our Debt Financings We have a substantial amount of indebtedness that may limit our financial and operating activities. As of December 31, 2019, we had approximately $1.7 billion of total consolidated indebtedness outstanding and borrowing capacity under our 2018 Senior Unsecured Credit Facilities of $800.0 million less approximately $23.0 million for certain outstanding letters of credit. Our organizational documents contain no limitations regarding the maximum level of indebtedness that we may incur or keep outstanding. Payments of principal and interest on indebtedness may leave us with insufficient cash resources to operate our properties or to pay distributions to our shareholders at expected levels. Our substantial outstanding indebtedness could have other material and adverse consequences, including, without limitation, the following: our cash flows may be insufficient to meet our required principal and interest payments; • • we may use a substantial portion of our cash flows to make principal and interest payments and we may be unable to obtain additional financing as needed or on favorable terms, which could, among other things, have a material adverse effect on our ability to invest in acquisition opportunities, fund capital improvements or meet operational needs; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms or in violation of certain covenants to which we may be subject; • we may default on our indebtedness by failing to make required payments or violating covenants, which would entitle holders of such indebtedness and other indebtedness with a cross-default provision to accelerate the maturity of their indebtedness and, if such indebtedness is secured, to foreclose on our properties that secure their loans; • we may be unable to effectively hedge floating rate debt with respect to our 2018 Senior Unsecured Credit Facilities or any successor facilities thereto; • we are required to maintain certain debt and coverage and other financial ratios at specified levels, thereby reducing our operating and financial flexibility; our vulnerability to general adverse economic and industry conditions may be increased; and • • we may be subject to greater exposure to increases in interest rates for our variable-rate debt and to higher interest expense upon refinancing of existing debt or the issuance of future fixed rate debt. If any one of these events were to occur, we could be materially and adversely affected. In addition, any foreclosure on our properties could create taxable income without accompanying cash proceeds, which could materially and adversely affect our ability to meet the REIT distribution requirements imposed by the Code. We are dependent on external sources of capital, the continuing availability of which is uncertain. In order to qualify as a REIT, we are required each year to distribute to our shareholders at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding capital gains). In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund all of our future capital needs, including capital for acquisitions, development activities and recurring and non-recurring capital improvements, from operating cash flows. Consequently, we intend to rely on third-party sources of capital to fund a substantial amount of our future capital needs. We may not be able to obtain additional financing on favorable terms or at all when needed. Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating and financial restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our 31 shareholders. Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our current and anticipated results of operations, liquidity, financial condition and cash distributions to shareholders and the market price of our common shares. If we cannot obtain sufficient capital on favorable terms when needed, we may not be able to execute our business and growth strategies, satisfy our debt service obligations, make the cash distributions to our shareholders necessary for us to qualify as a REIT (which would expose us to significant penalties and corporate-level taxation), or fund our other business needs, which could have a material adverse effect on us. Adverse changes in our credit ratings could negatively impact our financing activity. Our credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial condition and other factors utilized by rating agencies in their analysis. Our credit ratings can affect the amount of capital that we can access, as well as the terms and pricing of any future debt. We can provide no assurance that we will be able to maintain our current credit ratings, and a downgrade of our credit ratings would likely cause us to incur higher borrowing costs and make additional financing more difficult to obtain. In addition, a downgrade could trigger higher costs under our existing credit facilities and may have other negative consequences. Adverse changes in our credit ratings could negatively impact our business, particularly our refinancing and other capital market activities, our future growth, development and acquisition activity. At December 31, 2019, our credit ratings were “BBB” from both Fitch Ratings, Inc. and DBRS Morningstar, Inc., and “Baa3” from Moody’s, all with stable outlooks. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. Increases in interest rates could increase the amount of our debt payments. As of December 31, 2019, $475.0 million of our outstanding consolidated indebtedness is variable-rate debt, and we may continue to incur variable-rate debt in the future. $325.0 million of this debt’s principal has been hedged using pay-fixed, receive-variable interest rate swaps, which are designed to mitigate the impacts of changes in variable interest rates. These interest rate swaps extend through the maturity of the variable interest rate debt. Increases in interest rates on such debt would raise our interest costs, reduce our cash flows and reduce our ability to make distributions to our shareholders. Increases in interest rates would also increase our interest expense on future fixed rate borrowings and have the same collateral effects. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments. Elimination of LIBOR may impact our financial statements In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC") which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. The Company is not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. The Company has contracts that are indexed to LIBOR and is monitoring and evaluating the related risks, which include interest on loans, amounts paid on securities, and amounts received and paid on derivative 32 instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require negotiation with the respective counterparty. If LIBOR is discontinued, the impact of such change on our contracts that are not transitioned to an alternative rate is uncertain and is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected. While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. Our existing indebtedness contains, and any future indebtedness is likely to contain, covenants that restrict our ability to engage in certain activities. Our outstanding indebtedness requires, and our future indebtedness is likely to require, us to comply with a number of financial covenants and operational covenants. The financial covenants under our 2018 Senior Unsecured Credit Facility and Series A, Series B and Series C Senior Unsecured Notes include a maximum leverage ratio, a minimum borrowing base coverage ratio, a minimum fixed charge coverage ratio, a minimum borrowing base debt service coverage ratio, a minimum tangible net worth requirement, a maximum secured leverage ratio, a maximum recourse secured debt ratio and a maximum unsecured indebtedness to assets ratio. These covenants may limit our ability to engage in certain transactions that may be in our best interests. In order to be able to make distributions to our shareholders (other than minimum distributions required to maintain our status as a REIT), there may not be an event of default under such indebtedness. Our failure to meet the covenants could result in an event of default under the applicable indebtedness, which could result in the acceleration of the applicable indebtedness and other indebtedness with a cross-default provision as well as foreclosure, in the case of secured indebtedness, upon any of our assets that secure such indebtedness. If we are unable to refinance our indebtedness at maturity or meet our payment obligations, we would be materially and adversely affected. As of December 31, 2019, a total of 15 of our warehouses were financed under mortgage loans grouped into a single pool. Certain covenants in the mortgage loan agreement place limits on our use of the cash flows associated with the pool, and place other restrictions on our use of the assets included within the pool. In particular, if our subsidiaries that are borrowers under the mortgage loan agreement fail to maintain certain cash flow minimums or a debt service coverage ratio, the cash generated by those subsidiaries will be restricted and unavailable for us to use, which we refer to as a “cash trap event.” If the pool under our mortgage loan agreement were to fail to maintain the applicable cash flow minimum or debt service coverage ratio, our ability to make capital expenditures and distributions to our shareholders could be limited. In addition, as a holder of equity interests in the borrowers under the pool, our claim to the assets contained in the pool is subordinate to the claims of the holders of the indebtedness under the mortgage loan agreement. Secured indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets subject to indebtedness. We have granted certain of our lenders security interests in approximately 12% of our assets, including equity interests in certain of our subsidiaries and in certain of our real property. Incurring secured indebtedness, including mortgage indebtedness, increases our risk of asset and property losses because defaults on indebtedness 33 secured by our assets, including equity interests in certain of our subsidiaries and in certain of our real property, may result in foreclosure actions initiated by lenders and ultimately our loss of the property or other assets securing any loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could have a material adverse effect on the overall value of our portfolio of properties and more generally on us. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the indebtedness secured by the mortgage. If the outstanding balance of the indebtedness secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could materially and adversely affect us. Foreign exchange rates and other hedging activity exposes us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate. As of December 31, 2019, we were a party to cross currency swaps on our intercompany loans. We also entered into two interest rate swaps during the year ended December 31, 2019 to mitigate the impact of variable interest rates on our outstanding variable rate debt. We also entered into foreign currency forward contracts to hedge the cash flows of a future acquisition that will be denominated in foreign currency. In addition, we have entered into certain forward contracts and other hedging arrangements in order to fix power costs for anticipated electricity requirements. These hedging transactions expose us to certain risks, such as the risk that counterparties may fail to honor their obligations under these arrangements, and that these arrangements may not be effective in reducing our exposure to foreign exchange rate, interest rate, and power cost changes. Moreover, there can be no assurance that our hedging arrangements will qualify for hedge accounting or that our hedging activities will have the desired beneficial impact on our results of operations or cash flows. Should we desire to terminate a hedging agreement, there could be significant costs and cash requirements involved to fulfill our obligation under the hedging agreement. Failure to hedge effectively against foreign exchange rates, interest rates, and power cost changes could have a material adverse effect on us. While we have no current mortgage agreements requiring hedging agreements, when a hedging agreement is required under the terms of a mortgage loan, it is often a condition that the hedge counterparty maintains a specified credit rating. With the current volatility in the financial markets, there is an increased risk that hedge counterparties could have their credit ratings downgraded to a level that would not be acceptable under the loan provisions. If we were unable to renegotiate the credit rating condition with the lender or find an alternative counterparty with an acceptable credit rating, we could be in default under the loan and the lender could seize that property through foreclosure, which could have a material adverse effect on us. 34 Risks Related to our Organization and Structure Provisions of Maryland law may limit the ability of a third party to acquire control of our company. Under the Maryland General Corporation Law, or the MGCL, as applicable to Maryland real estate investment trusts, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland real estate investment trust and any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the trust’s then outstanding voting shares or an affiliate or associate of the trust who, at any time within the two-year period before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the trust’s then outstanding shares, which we refer to as an “interested shareholder,” or an affiliate thereof, are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. Thereafter, any such business combination must be approved by two super-majority shareholder votes unless, among other conditions, the trust’s common shareholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its voting shares. Until December 2018, affiliates of the Goldman Sachs Group, Inc. (the “GS Entities”) owned more than 10% of our voting shares, and therefore are subject to the business combination provisions of the MGCL through December 2020. However, pursuant to the statute, our board of trustees, by resolution, elected to opt out of the business combination provisions of the MGCL. This resolution may not be modified or repealed by our board of trustees without the approval of our shareholders by the affirmative vote of a majority of the votes cast on the matter. Accordingly, the five-year prohibition and the super-majority vote requirements described above do not apply to a business combination between us and any other person, including the GS Entities. As a result, any person may be able to enter into business combinations with us, which may not be in your best interest as a shareholder, within five years of becoming an interested shareholder and without compliance by us with the super-majority vote requirements and other provisions of the MGCL. The “control share” provisions of the MGCL provide that “control shares” of a Maryland real estate investment trust (defined as shares which, when aggregated with other shares controlled by the shareholder (except solely by virtue of a revocable proxy), entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the trust’s shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquiror of control shares, the trust’s officers and the trust’s employees who are also the trust’s trustees. Our amended and restated bylaws, or our bylaws, contain a provision exempting from the control share acquisition provisions of the MGCL any and all acquisitions by any person of our shares. This provision may not be amended by our board of trustees without the affirmative vote at a duly called meeting of shareholders of at least a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees. Subtitle 8 of Title 3 of the MGCL, or Subtitle 8, would permit our board of trustees, without shareholder approval, to implement certain takeover defenses (some of which, such as a classified board, we do not have), if we have a class of equity securities registered under the Exchange Act and at least three independent trustees. We have elected not to be subject to Subtitle 8 unless approved by the affirmative vote of at least a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees. Any of the MGCL provisions, if then applicable to us, may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a transaction or change in control 35 which might involve a premium price for our common shares or otherwise be in the best interests of our shareholders. Our board of trustees can take many actions even if you and other shareholders disagree with such actions or if they are otherwise not in your best interest as a shareholder. Our board of trustees has overall authority to oversee our operations and determine our major policies. This authority includes significant flexibility to take certain actions without shareholder approval. For example, our board of trustees can do the following without shareholder approval: • • • • • • • issue additional shares, which could dilute your ownership; amend our declaration of trust to increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue; classify or reclassify any unissued shares and set the preferences, rights and other terms of such classified or reclassified shares, which preferences, rights and terms could delay, defer or prevent a transaction or change in control which might involve a premium price for our common shares or otherwise be in your best interest as a shareholder; employ and compensate affiliates; change major policies, including policies relating to investments, financing, growth and capitalization; enter into new lines of business or new markets; and determine that it is no longer in our best interests to attempt to continue to qualify as a REIT. Any of these actions without shareholder approval could increase our operating expenses, impact our ability to make distributions to our shareholders, reduce the market value of our real estate assets, negatively impact our share price, or otherwise not be in your best interest as a shareholder. Our declaration of trust contains provisions that make removal of our trustees difficult, which could make it difficult for our shareholders to effect changes to our management. Our declaration of trust provides that, subject to the rights of holders of one or more classes or series of preferred shares to elect or remove one or more trustees, a trustee may be removed only for “cause” (as defined in our declaration of trust), and then only by the affirmative vote of shareholders entitled to cast two-thirds of the votes entitled to be cast generally in the election of trustees. The foregoing provision of our declaration of trust, when coupled with the power of our board of trustees to fill vacant trusteeships, will preclude shareholders from removing incumbent trustees except for cause and by a substantial affirmative vote and filling the vacancies created by such removal with their own nominees. These requirements make it more difficult to change our management by removing and replacing trustees and may prevent a change in control that is in the best interests of our shareholders. The REIT ownership limit rules and the related restrictions on ownership and transfer contained in our declaration of trust have an anti- takeover effect. In order for us to maintain our qualification as a REIT under the Code, not more than 50% in value of our outstanding shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year (other than the first taxable year for which the election to be treated as a REIT was made). To ensure that we will not fail to qualify as a REIT under this and other tests under the Code, our declaration of trust, subject to certain exceptions, authorizes our board of trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT and does not permit individuals (including certain entities treated as individuals), other than excepted holders approved in accordance with our declaration of trust, to own, directly or indirectly, more than 9.8% (in 36 value) of our outstanding shares. In addition, our declaration of trust prohibits: (a) any person from beneficially or constructively owning our shares of beneficial interest that would result in our company being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT; (b) any person from transferring our shares of beneficial interest of our company if such transfer would result in our shares of beneficial interest being beneficially owned by fewer than 100 persons; and (c) any person from beneficially owning our shares of beneficial interest to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code (after taking into account for such purpose the statutory presumptions set forth in Section 897(h)(4)(E) of the Code). Our board of trustees is required to exempt a person (prospectively or retrospectively) from the percentage ownership limit described above (but not the other restrictions) if the person seeking a waiver demonstrates that the waiver would not jeopardize our status as a REIT or violate the other conditions described above. These ownership limitations are intended to provide added assurance of compliance with the tax law requirements and to minimize administrative burdens. Although our declaration of trust requires our board of trustees to grant a waiver of the percentage ownership limit described above if the person seeking a waiver demonstrates that such ownership would not jeopardize our status as a REIT or violate the other conditions described above, these limitations might still delay, defer or prevent a transaction or change in control which might involve a premium price for our common shares or otherwise not be in your best interest as a shareholder or result in the transfer of shares acquired in excess of the ownership limits to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares. Our rights and the rights of our shareholders to take action against our trustees and officers are limited. Our declaration of trust eliminates our trustees’ and officers’ liability to us and our shareholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action. Our declaration of trust and our bylaws require us to indemnify our trustees and officers to our board of trustees to the maximum extent permitted by Maryland law for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the trustee, officer or observer was material to the matter giving rise to the proceeding and was either committed in bad faith or the result of active and deliberate dishonesty, the trustee, officer or observer actually received an improper personal benefit in money, property or services, or, in the case of any criminal proceeding, the trustee, officer or observer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our shareholders may have more limited rights against our trustees and officers and any observer to our board of trustees than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our trustees and officers and any observer to our board of trustees. We have fiduciary duties as general partner to our Operating Partnership, which may result in conflicts of interests in representing your interests as shareholders of our company. Conflicts of interest could arise in the future as a result of the relationships between us and our affiliates, and between us and our Operating Partnership or any partner thereof. Our trustees and officers have duties to our company under applicable Maryland law in connection with their management of our company. Additionally, we have fiduciary duties as the general partner to our Operating Partnership and to its limited partners under Delaware law in connection with the management of our Operating Partnership. Our duties as a general partner to our Operating Partnership and any unaffiliated limited partners may come into conflict with the duties of our trustees and officers to our company and may be resolved in a manner that is not in your best interest as a shareholder. 37 Risks Related to our Common Shares Our cash available for distribution to shareholders may not be sufficient to pay distributions at expected levels, or at all, and we may need to increase our borrowings or otherwise raise capital in order to make such distributions; consequently, we may not be able to make such distributions in full. Our current annualized distributions to our shareholders are $0.80 per share. If cash available for distribution generated by our assets decreases in future periods is less than our estimate or if such cash available for distribution decreases in future periods, we may be unable to make distributions to our shareholders at expected levels, or at all, or we may need to increase our borrowings or otherwise raise capital in order to do so, and there can be no assurance that such capital will be available on attractive terms in sufficient amounts, or at all. Any of the foregoing could result in a decrease in the market price of our common shares. Any distributions made to our shareholders by us will be authorized and determined by our board of trustees in its sole discretion out of funds legally available therefore and will be dependent upon a number of factors, including our actual or anticipated financial condition, results of operations, cash flows and capital requirements, debt service requirements, financing covenants, restrictions under applicable law and other factors. Any future debt, which would rank senior to our common shares upon liquidation, or equity securities, which could dilute our existing shareholders and may be senior to our common shares for the purposes of distributions, may adversely affect the market price of our common shares. In the future, we may attempt to increase our capital resources by incurring additional debt, including term loans, borrowings under credit facilities, mortgage loans, commercial paper, senior or subordinated notes and secured notes, and making additional offerings of equity and equity-related securities, including preferred and common shares and convertible or exchangeable securities. Upon our liquidation, holders of our debt securities and preferred shares and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common shares. Additional offerings of common shares would dilute the holdings of our existing shareholders or may reduce the market price of our common shares or both. Additionally, any preferred shares or convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common shares and may result in dilution to holders of our common shares. Because our decision to incur debt or issue equity or equity- related securities in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or success of our future capital raising. Thus, our shareholders bear the risk that our future capital raising will materially and adversely affect the market price of our common shares and dilute the value of their holdings in us. Common shares eligible for future sale may have adverse effects on the market price of our common shares. The market price of our common shares could decline as a result of sales or resales of a large number of our common shares in the market, or the perception that such sales or resales could occur. These sales or resales, or the possibility that these sales or resales may occur, also might make it more difficult for us to sell our common shares in the future at a desired time and at an attractive price. On August 26, 2019, we entered into a distribution agreement with a syndicate of banks through which we may sell from time to time up to an aggregate of $500.0 million of our common shares in an at the market equity program (the “ATM Offering”). There were no common shares sold under the ATM Equity Program during 2019. As of December 31, 2019, 191,799,909 common shares are issued and outstanding, and no Series A preferred shares, Series B preferred shares or Series C preferred shares are issued and outstanding. 38 As of December 31, 2019, the 507,073 common shares beneficially owned by our trustees, executive officers and other affiliates were “restricted securities” within the meaning of Rule 144 under the Securities Act and cannot be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemptions contained in Rule 144. In addition, we have filed with the SEC a registration statement on Form S-8 covering common shares issuable pursuant to options and restricted stock units issued under our outstanding equity incentive plans. We cannot predict the effect, if any, of future issuances, sales or resales of our common shares, or the availability of common shares for future issuances, sales or resales, on the market price of our common shares. Issuances, sales or resales of substantial amounts of common shares, or the perception that such issuances, sales or resales could occur, may materially and adversely affect the then prevailing market price for our common shares. If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us, our industry or the real estate industry generally or downgrade the outlook of our common shares, the market price of our common shares could decline. The trading market for our common shares will depend in part on the research and reports that third-party securities analysts publish about our company, our industry and the real estate industry generally. One or more analysts could downgrade the outlook for our common shares or issue other negative commentary about our company, our industry or the real estate industry generally. Furthermore, if one or more of these analysts cease coverage of our company, we could lose visibility in the market. As a result of one or more of these factors, the market price of our common shares could decline and cause you to lose all or a portion of your investment. 39 REIT and Tax Related Risks Failure to qualify as a REIT for U.S. federal income tax purposes would have a material adverse effect on us. We have elected to be taxed as a REIT under the Code. Our qualification as a REIT requires us to satisfy numerous requirements, some on an annual and quarterly basis, established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and which involve the determination of various factual matters and circumstances not entirely within our control. We expect that our current organization and methods of operation will enable us to continue to qualify as a REIT, but we may not so qualify or we may not be able to remain so qualified in the future. In addition, U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any time, potentially with retroactive effect. The Protecting Americans from Tax Hikes Act, or PATH Act, was enacted in December 2015, and included numerous changes in the U.S. federal income tax laws applicable to REITs, and comprehensive tax legislation passed on December 22, 2017, which is commonly known as the Tax Cuts and Jobs Act, or TCJA and, which is fully described in Note 18 to the consolidated financial statements included in this Annual Report on Form 10-K, made fundamental changes to the individual and corporate tax laws that will materially impact us and our shareholders. In addition, future legislation, new regulations, administrative interpretations or court decisions could materially and adversely affect our ability to qualify as a REIT or materially and adversely affect our company and shareholders. If we fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income tax on our REIT taxable income at regular corporate rates, and would not be allowed to deduct dividends paid to our shareholders in computing our REIT taxable income. Also, unless the Internal Revenue Service, or the IRS, granted us relief under certain statutory provisions, we could not re-elect REIT status until the fifth calendar year after the year in which we first failed to qualify as a REIT. The additional tax liability from the failure to qualify as a REIT would reduce or eliminate the amount of cash available for investment or distribution to our shareholders. This would materially and adversely affect us. In addition, we would no longer be required to make distributions to our shareholders. Even if we continue to qualify as a REIT, we will continue to be subject to certain U.S. federal, state and local taxes on our income and property. To qualify as a REIT, we must meet annual distribution requirements, which could result in material harm to our company if they are not met. To obtain the favorable tax treatment accorded to REITs, among other requirements, we normally will be required each year to distribute to our shareholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and by excluding net capital gains. We will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gains. In addition, if we fail to distribute to our shareholders during each calendar year at least the sum of (a) 85% of our ordinary income for such year; (b) 95% of our capital gain net income for such year; and (c) any undistributed REIT taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the sum of (i) the amounts actually distributed by us and (ii) retained amounts on which we pay U.S. federal income tax at the corporate level. We intend to make distributions to our shareholders to comply with the requirements of the Code for REITs and to minimize or eliminate our U.S. federal income tax obligation. However, differences between the recognition of REIT taxable income and the actual receipt of cash could require us to sell assets or raise capital on a short-term or long- term basis to meet the distribution requirements of the Code. Certain types of assets generate substantial mismatches between REIT taxable income and available cash. Such assets include rental real estate that has been financed through financing structures which require some or all of available cash flows to be used to service borrowings. Further, under amendments to the Code made by TCJA, income must be accrued for U.S. federal income tax purposes no later than when such income is taken into account as revenue in 40 our financial statements, subject to certain exceptions, which could also create mismatches between REIT taxable income and the receipt of cash attributable to such income. As a result, the requirement to distribute a substantial portion of our REIT taxable income could cause us to: (1) sell assets in adverse market conditions; (2) raise capital on unfavorable terms; or (3) distribute amounts that would otherwise be invested in future acquisitions, expansions or developments, capital expenditures or repayment of debt, in order to comply with REIT requirements. Further, amounts distributed will not be available to fund our operations. Under certain circumstances, covenants and provisions in our existing and future debt instruments may prevent us from making distributions that we deem necessary to comply with REIT requirements. Our inability to make required distributions as a result of such covenants could threaten our status as a REIT and could result in material adverse tax consequences for our company and shareholders. We conduct a portion of our business through TRSs, which are subject to certain tax risks. We have established taxable REIT subsidiaries, or TRSs, and may establish others in the future. Despite our qualification as a REIT, our TRSs must pay income tax on their taxable income. As a result of the enactment of the TCJA, effective for taxable years beginning on or after January 1, 2018, our domestic TRSs are subject to U.S. federal income tax on their taxable income at a flat rate of 21% (as well as applicable state and local income tax), but net operating loss, or NOL, carryforwards of TRS losses arising in taxable years beginning after December 31, 2017, may be deducted only to the extent of 80% of TRS taxable income in the carryforward year (computed without regard to the NOL deduction or our dividends paid deduction). In contrast to prior law, which permitted unused NOL carryforwards to be carried back two years and forward 20 years, TCJA provides that losses arising in taxable years ending after December 31, 2017, can no longer be carried back but can be carried forward indefinitely. In addition, we must comply with various tests to continue to qualify as a REIT for U.S. federal income tax purposes, and our income from, and investments in, our TRSs generally do not constitute permissible income and investments for certain of these tests. No more than 20% of the value of a REIT’s assets may consist of securities of one or more TRSs. Because TRS securities do not qualify for purposes of the 75% asset test described herein, and because we own other assets that do not, or may not, qualify for the 75% asset test, the 75% asset test may effectively limit the value of our TRS securities to less than 20% of our total assets. Our dealings with our TRSs may materially and adversely affect our REIT qualification. Furthermore, we may be subject to a 100% penalty tax, or our TRSs may be denied deductions, to the extent our dealings with our TRSs are determined not to be arm’s length in nature or are otherwise not permitted under the Code. Complying with REIT requirements may cause us to forgo otherwise attractive opportunities or liquidate certain of our investments. To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our shares. We may be required to make distributions to our shareholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may, for instance, hinder our ability to make certain otherwise attractive investments or undertake other activities that might otherwise be beneficial to us and our shareholders, or may require us to raise capital or liquidate investments in unfavorable market conditions and, therefore, may hinder our performance. As a REIT, at the end of each quarter, at least 75% of the value of our assets must consist of cash, cash items, government securities and qualified real estate assets. The remainder of our investments in securities (other than cash, cash items, government securities, securities issued by a TRS and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our 41 total assets (other than cash, cash items, government securities, securities issued by a TRS and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total securities can be represented by securities of one or more TRSs. If we fail to comply with these requirements at the end of any quarter, we must correct the failure within 30 days after the end of the quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering material adverse tax consequences. The need to comply with the 75% asset test and 20% TRS securities test on an ongoing basis potentially could require us in the future to limit the future acquisition of, or to dispose of, nonqualifying assets, limit the future expansion of our TRSs’ assets and operations or dispose of or curtail TRS assets and operations, which could adversely affect our business and could have the effect of reducing our income and amounts available for distribution to our shareholders. Future changes to the U.S. federal income tax laws could have an adverse impact on our business and financial results. Changes to the U.S. federal income tax laws are proposed regularly. Additionally, the REIT rules are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury, which may result in revisions to regulations and interpretations in addition to statutory changes. If enacted, certain such changes could have an adverse impact on our business and financial results. Other legislative proposals could be enacted in the future that could affect REITs and their shareholders. Prospective investors are urged to consult their tax advisor regarding the effect of any potential tax law changes on an investment in our common shares. Distributions payable by REITs generally do not qualify for the reduced tax rates that apply to certain other corporate distributions, potentially making an investment in our company less advantageous for certain persons than an investment in an entity with different tax attributes. The maximum federal income tax rate applicable to “qualified dividend income” payable by non-REIT corporations to certain non- corporate U.S. stockholders is generally 20%, and a 3.8% Medicare tax may also apply. Dividends paid by REITs, however, generally are not eligible for the reduced rates applicable to qualified dividend income. Commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, TCJA temporarily reduces the effective tax rate on ordinary REIT dividends (i.e., dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us) for U.S. holders of our common shares that are individuals, estates or trusts by permitting such holders to claim a deduction in determining their taxable income equal to 20% of any such dividends they receive. Taking into account TCJA’s reduction in the maximum individual federal income tax rate from 39.6% to 37%, this results in a maximum effective rate of regular income tax on ordinary REIT dividends of 29.6% through 2025 (as compared to the 20% maximum federal income tax rate applicable to qualified dividend income received from a non-REIT corporation). Under final regulations recently issued by the IRS, in order to qualify for this deduction with respect to a dividend on our common shares, a shareholder must hold such shares for more than 45 days during the 91-day period beginning on the date which is 45 days before the date on which such shares become ex-dividend with respect to such dividend (taking into account certain special holding period rules that may, among other consequences, reduce a shareholder’s holding period during any period in which the shareholder has diminished its risk of loss with respect to the shares). Shareholders are urged to consult their tax advisors as to their ability to claim this deduction. The more favorable rates applicable to regular corporate distributions could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay distributions. This could materially and adversely affect the value of the stock of REITs, including our common shares. 42 In certain circumstances, we may be subject to U.S. federal, state, local or foreign taxes, which would reduce our funds available for distribution to our shareholders. Even if we qualify and maintain our status as a REIT, we may be subject to certain U.S. federal, state, local or foreign taxes. For example, net income from a “prohibited transaction,” including sales or other dispositions of property, other than foreclosure property, held primarily for sale in the ordinary course of business, will be subject to a 100% tax. While we do not intend to hold properties that would be characterized as held for sale in the ordinary course of business, unless a sale or disposition qualifies under statutory safe harbors, there can be no assurance that the IRS would agree with our characterization of our properties or that we will be able to make use of available safe harbors. In addition, we may not be able to make sufficient distributions to avoid income and excise taxes. We may also be subject to state, local, or foreign taxes on our income or property, either directly or at the level of our Operating Partnership or the other companies through which we indirectly own our assets. Any taxes we pay will reduce our funds available for distribution to our shareholders. We may also decide to retain certain gains from the sale or other disposition of our property and pay income tax directly on such gains. In that event, our shareholders would be required to include such gains in income and would receive a corresponding credit for their share of taxes paid by us. Any net taxable income earned directly by a TRS will be subject to U.S. federal and state corporate income tax. Furthermore, even though we qualify for taxation as a REIT, if we acquire any asset from a corporation which is or has been a C-corporation in a transaction in which the basis of the asset in our hands is less than the fair market value of the asset determined at the time we acquired the asset, and we subsequently recognize a gain on the disposition of the asset during the five-year period beginning on the date on which we acquired the asset, then we will be required to pay tax at the highest regular corporate tax rate on this gain to the extent of the excess of (a) the fair market value of the asset over (b) our adjusted basis in the asset, in each case determined as of the date on which we acquired the asset. These requirements could limit, delay or impede future sales of our properties. We currently do not expect to sell any asset if the sale would result in the imposition of a material tax liability. We cannot, however, assure you that we will not change our plans in this regard. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Code limit our ability to hedge our liabilities. Generally, income from a hedging transaction we enter into either to manage risk of interest rate changes with respect to borrowings incurred or to be incurred to acquire or carry real estate assets, or to manage the risk of currency fluctuations with respect to any item of income or gain (or any property which generates such income or gain) that constitutes “qualifying income” for purposes of the 75% or 95% gross income tests applicable to REITs, does not constitute “gross income” for purposes of the 75% or 95% gross income tests, provided that we properly identify the hedging transaction pursuant to the applicable sections of the Code and Treasury Regulations. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both gross income tests. As a result of these rules, we may need to limit our use of otherwise advantageous hedging techniques or implement those hedges through a TRS. The use of a TRS could increase the cost of our hedging activities (because our TRS would be subject to tax on income or gain resulting from hedges entered into by it) or expose us to greater risks than we would otherwise want to bear. In addition, net losses in any of our TRSs will generally not provide any tax benefit except for being carried forward for use against future taxable income of the TRS. 43 If our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we would fail to qualify as a REIT. As a partnership, our Operating Partnership is not be subject to U.S. federal income tax on its income. For all tax periods during which the Operating Partnership is treated as a partnership, each of its partners, including us, will be allocated that partner’s share of the Operating Partnership’s income. Following the admission of additional limited partners, no assurance can be provided, however, that the IRS will not challenge the status of our Operating Partnership as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our Operating Partnership as an association taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT, which would have a material adverse effect on us and our shareholders. Also, our Operating Partnership would then be subject to U.S. federal corporate income tax, which would reduce significantly the amount of its funds available for debt service and for distribution to its partners, including us. 44 ITEM 1B. Unresolved Staff Comments None. 45 ITEM 2. Properties General In addition to the information in this Item 2, certain information regarding our portfolio is contained in Schedule III (Financial Statement Schedule) under Part IV, Item 15(a) (2) and which is included in Part II, Item 8. Our Warehouse Portfolio As of December 31, 2019, we operated a global network of 178 warehouses that contained over one billion cubic feet and approximately 3.6 million pallet positions. We believe that the volume of cubic feet in our warehouses and the number of pallets contained therein provide a more meaningful measure of our storage space than warehouse surface area expressed in square feet as customers generally contract for storage on a pallet-by-pallet basis, not on a square footage basis. Our warehouses feature customized racking systems that allow for the storage of products on pallets in horizontal rows across vertically stacked levels. Our racking systems can accommodate a wide array of different customer storage needs. The following table provides summary information regarding the warehouses in our portfolio that we owned, leased or managed as of December 31, 2019. 46 Country / Region Owned / Leased (5) United States Central East Southeast West United States Total / Average International Australia New Zealand Argentina International Total / Average Owned / Leased Total / Average Third-Party Managed United States Australia (6) Canada Third-Party Managed Total / Average Portfolio Total / Average # of warehouses Cubic feet (in millions) % of total cubic feet Pallet positions (in thousands) Average economic occupancy (1) Average physical occupancy (1) Revenues (2) (in millions) Applicable segment contribution (NOI) (2)(3) (in millions) Total customers (4) 41 28 47 37 256.1 216.0 245.6 230.0 25% 21% 24% 22% 1,011.3 670.8 707.0 981.9 80% 77% 82% 77% 77% $ 314.5 $ 73% 78% 72% 284.5 300.8 278.8 117.7 84.7 91.5 106.6 851 816 822 678 153 947.7 92% 3,371.0 79% 75% $ 1,178.6 $ 400.5 2,432 5 7 2 47.6 20.4 9.7 5% 2% 1% 138.8 83% 81% $ 161.2 $ 37.2 72.4 21.6 93% 79% 89% 79% 29.6 7.8 8.5 1.4 60 64 48 14 77.7 8% 232.8 86% 83% $ 198.6 $ 47.1 173 167 1,025.4 100% 3,603.8 80% 76% $ 1,377.2 $ 447.6 2,601 7 1 3 38.5 — 14.3 73% —% 27% — — — 11 52.8 100% — — — — — — — — $ 220.2 $ 14.9 17.9 8.0 2.3 1.5 — $ 253.0 $ 11.8 4 1 2 7 178 1,078.2 100% 3,603.8 80% 76% $ 1,630.2 $ 459.4 2,602 47 (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. We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the year ended December 31, 2019. 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 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. (2) Year ended December 31, 2019. (3) We use the term “segment contribution (NOI)” to mean a segment’s revenues less its cost of operations (excluding any depreciation, depletion and amortization, impairment charges and corporate-level selling, general and administrative expenses). The applicable segment contribution (NOI) from our owned and leased warehouses and our third-party managed warehouses is included in our warehouse segment contribution (NOI) and third-party managed segment contribution (NOI), respectively. See Item 6. Selected Financial Data for more information. (4) We serve some of our customers in multiple geographic regions and in multiple facilities within geographic regions. As a result, the total number of customers that we serve is less than the total number of customers reflected in the table above that we serve in each geographic region. (5) As of December 31, 2019, we owned 133 of our U.S. warehouses and ten of our international warehouses, and we leased 20 of our U.S. warehouses and four of our international warehouses. As of December 31, 2019, seven of our owned facilities were located on land that we lease pursuant to long-term ground leases. (6) Constitutes non-refrigerated, or “ambient,” warehouse space. This facility contains 330,527 square feet of ambient space. We own, develop and manage multiple types of temperature-controlled warehouses, which allows us to service our customers’ needs across our network. Our warehouse portfolio consists of five distinct property types: • • • Distribution. As of December 31, 2019, we owned or leased 61 distribution centers with approximately 495.2 million cubic feet of temperature-controlled capacity and 1.5 million pallet positions. Distribution centers typically house a wide variety of customers’ finished products until future shipment to end users. Each distribution center is located in a key distribution hub that services a distinct surrounding population center in a major market. Public. As of December 31, 2019, we owned or leased 65 public warehouses with approximately 313.1 million cubic feet of temperature-controlled capacity and 1.2 million pallet positions. Public warehouses generally store multiple types of inventory and cater to small and medium-sized businesses by primarily serving the needs of local and regional customers. Production Advantaged. As of December 31, 2019, we owned or leased 36 production advantaged warehouses with approximately 197.2 million cubic feet of temperature-controlled capacity and 0.9 million pallet positions. Production advantaged warehouses are temperature-controlled warehouses that are typically dedicated to one or a small number of customers. Production advantaged warehouses are generally located adjacent to or otherwise in close proximity to customer processing or production facilities and were often build-to-suit at the time of their construction. Facility Leased. As of December 31, 2019, we had five facility leased warehouses with approximately 19.9 million cubic feet of temperature-controlled capacity. We charge our customers that are party to these leases rent based on the square footage leased in our warehouses. Our facility leased warehouses are facilities that are leased to third parties, such as retailers, e-tailers, distributors, transportation companies and food producers, that desire to manage their own temperature-controlled warehousing or carry on processing operations generally in warehouses adjacent, or in close proximity, to their retail stores or production facilities. The majority of our facility leased warehouses are leased to third parties under “triple net lease” arrangements. Third-Party Managed. As of December 31, 2019, we managed 11 warehouses on behalf of third parties with approximately 52.8 million cubic feet of temperature-controlled capacity. We manage warehouses on behalf of third parties and provide warehouse management services to several leading food retailers and • • 48 manufacturers in customer-owned facilities, including some of our largest and longest-standing customers. Our third-party managed segment provides a complete outsourcing solution by managing all aspects of the distribution of our customers’ products, including order management, reverse logistics, inventory control and, in some instances, dedicated transportation services for temperature- controlled and ambient (i.e., non-refrigerated) customers. ITEM 3. 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. ITEM 4. Mine Safety Disclosures Information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Annual Report on Form 10-K. 49 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Americold Realty Trust Americold Realty Trust’s common shares are listed on the NYSE under the trading symbol “COLD”. Our common shares have been publicly traded since January 19, 2018. Prior to that time, there was no public market for our common stock. On February 26, 2020, we had approximately 200,164,155 common shares outstanding. This figure includes the 8,250,000 common shares that were issued on January 2, 2020 upon settlement of our April 2019 forward sale agreement. This figure does not include the 6,000,000 common shares that may be issued if we elect to physically settle our September 2018 forward sale agreement with Bank of America, N.A., as forward purchaser. The number of holders of record of our common shares on February 26, 2020 was two. This figure does not represent the actual number of beneficial owners of our common shares because our common shares are frequently held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares. Our future common shares dividends, if and as declared, may vary and will be determined by our Board of Trustees upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements. These dividends, if and as declared, may be adjusted at the discretion of our board of trustees during the year. Refer to Item 7 - Management’s Discussion & Analysis in this Annual Report on Form 10-K for further details on dividends declared. Subject to the distribution requirements applicable to REITs under the Code, Americold Realty Trust intends, to the extent practicable, to invest substantially all of the proceeds from sales and refinancing of its assets in real estate-related assets and other assets. Americold Realty Trust may, however, under certain circumstances, make a dividend of capital or of assets. Such dividends, if any, will be made at the discretion of Americold Realty Trust’s board of trustees. Americold Realty Operating Partnership, L.P. There is no established trading market for Americold Realty Operating Partnership, L.P.’s partnership units. As of February 26, 2020, the only holders of record of partnership interests are Americold Realty Operating Partnership, L.P.’s general partner, Americold Realty Trust, and Americold Realty Operating Partnership, L.P.’s sole limited partner bearing a 1% interest, Americold Realty Operations, Inc., a wholly-owned subsidiary of the REIT. The Operating Partnership has also granted OP Units to certain members of the Board of Trustees during 2019 and certain members of executive management of Americold Realty Trust during 2020. Upon vesting, these OP Units will represent partnership units in the Operating Partnership that are not owned by Americold Realty Trust. 50 Stock Performance Graph The following graph compares the change in the cumulative total stockholder return on Americold Realty Trust common stock during the period from January 19, 2018 (the date of our IPO) through December 31, 2019, with the cumulative total returns on the MSCI US REIT Index (RMZ) and the S&P 500 Market Index. The comparison assumes that $100 was invested on January 19, 2018 in Americold Realty Trust common stock and in each of these indices and assumes reinvestment of dividends, if any. Comparison of Cumulative Total Returns Among Americold Realty Trust, S&P 500, and RMZ Index Assumes $100 invested on January 19, 2018 Assumes dividends reinvested To fiscal year ended December 31, 2019 51 Pricing Date COLD ($) S&P 500($) RMZ($) 1/19/2018 3/29/2018 6/29/2018 9/28/2018 12/31/2018 3/29/2019 6/28/2019 9/30/2019 12/31/2019 100.00 109.00 127.97 147.59 151.79 188.35 202.61 234.25 224.06 100.00 94.22 97.57 105.03 90.82 103.00 107.35 109.24 119.05 100.00 95.84 104.38 104.43 96.30 113.59 113.93 121.52 119.34 • • • This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Security Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. The stock price performance shown on the graph is not necessarily indicative of future price performance. The hypothetical investment in Americold Realty Trust’s common stock presented in the stock performance graph above is based on the closing price of the common stock on January 19, 2018. Sales of Unregistered Securities None. Purchases of Equity Securities None. Securities Authorized For Issuance Under Equity Compensation Plans Information relating to compensation plans under which our common shares are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein. Use of Proceeds On September 18, 2018, we completed a follow-on public offering of 4,000,000 common shares at a public offering price of $24.50 per share, which generated net proceeds of approximately $92.5 million after deducting the underwriting discount and estimated offering expenses payable by us, and an additional 6,000,000 common shares that are subject to the 2018 forward sale agreement, which is currently expected to be settled on or before September 2020. The term of the 2018 forward sale agreement was extended from its original settlement date of September 2019. We did not initially receive any proceeds from the sale of the common shares subject to the 2018 forward sale agreement that were sold by the forward purchaser or its affiliate. As of December 31, 2019, we have not settled any portion of the 2018 forward sale agreement. We expect to use the funds received upon settlement to support announced or potential future development, expansion and acquisition opportunities. 52 In March 2019, we completed a secondary public offering in which certain funds affiliated with YF ART Holdings and the GS entities sold their remaining interest in the Company, which consisted of 38,422,583 and 8,061,228 common shares, respectively, at $27.75 per share, which included 6,063,105 shares purchased by the underwriters upon the exercise in full of their option to purchase additional shares. The selling shareholders received proceeds from the offering, which, net of underwriting fees, totaled $1.1 billion. We received no proceeds and incurred fees of $1.5 million related to this offering. On April 22, 2019, we completed a follow-on public offering of 42,062,000 common shares, including 6,562,000 common shares pursuant to the exercise in full of the underwriters’ option to purchase additional common shares, at a public offering price of $29.75 per share, which generated net proceeds of approximately $1.21 billion after deducting the underwriting discount and estimated offering expenses payable by us, and an additional 8,250,000 common shares pursuant to the 2019 forward sale agreement. We did not initially receive any proceeds from the sale of the common shares subject to the 2019 forward sale agreement that were sold by the forward purchaser or its affiliate. The proceeds of the follow-on public offering were used to fund a portion of the Cloverleaf Acquisition. We used the cash proceeds that we received upon settlement of the 2019 forward sale agreement on January 2, 2020 to fund the Nova Cold Acquisition. On August 26, 2019, we entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common shares through “at the market” offerings (the “ATM Equity Program”). Sales of our common shares made pursuant to the 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 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects. There were no common shares sold under the ATM Equity Program during 2019. Other Shareholder Matters None. 53 ITEM 6. Selected Financial Data Selected Company Financial and Other Data (Americold Realty Trust) The following tables show our selected consolidated financial data for Americold Realty Trust and the Operating Partnership and their respective subsidiaries for the periods indicated. This information should be read together with the audited financial statements and notes thereto of Americold Realty Trust and its subsidiaries and the Operating Partnership and its subsidiaries and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report. Certain prior year amounts have been reclassified to conform to the current year presentation. The select financial data below for 2019 includes the results of the PortFresh Acquisition on February 1, 2019, the Cloverleaf Acquisition and Lanier Acquisition on May 1, 2019 and the MHW Acquisition on November 19, 2019. Consolidated Statements of Operations Data: Warehouse segment revenues Total revenues Operating income Net income (loss) attributable to Americold Realty Trust Total warehouse segment contribution (NOI) (1) Total segment contribution (NOI) (1) Consolidated Statement of Cash Flows Data: Net cash provided by operating activities Net cash used in investing activities Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Per Share Data: Net income (loss) attributable to common shareholders per common share Basic Diluted Common share dividends paid Dividends paid per common share Weighted average common shares outstanding: Basic Diluted Selected Other Data: EBITDA (2) Core EBITDA (2) Funds from operations (3) Core funds from operations (3) Adjusted funds from operations (3) 2019 2018 2017 2016 2015 Year ended December 31, (In thousands) $ 1,377,217 $ 1,176,912 $ 1,145,662 $ 1,080,867 $ 1,783,705 1,603,635 1,543,587 1,489,999 131,466 48,162 447,591 478,257 179,960 47,985 374,534 405,649 136,989 (608) 348,328 374,105 132,124 4,932 314,045 345,645 1,057,124 1,481,385 112,502 (21,176) 307,749 337,020 $ $ $ $ $ $ 236,189 $ 188,171 $ 163,327 $ 118,781 $ 106,521 (1,604,934) 1,395,371 (125,703) 84,942 (138,831) (18,604) (41,653) (95,322) 26,626 $ 147,410 $ 5,892 $ (18,194) $ (51,532) (28,120) 26,869 Year ended December 31, 2019 2018 2017 2016 2015 (In thousands, except per share data) 0.26 $ 0.26 $ 135,443 $ 0.75 $ 0.31 $ 0.31 $ 76,523 $ 0.54 $ (0.43) $ (0.43) $ 20,214 $ 0.29 $ (0.35) $ (0.35) $ 20,214 $ 0.29 $ 179,598 183,950 141,415 144,338 70,022 70,022 69,890 69,890 255,331 306,777 130,644 174,993 170,433 240,424 287,145 96,483 106,093 94,616 248,934 261,362 90,561 69,207 71,125 300,761 367,128 176,899 219,721 214,530 54 (0.73) (0.73) 20,214 0.29 69,758 69,758 230,891 253,638 75,065 55,697 59,754 Consolidated Balance Sheet Data: Cash and cash equivalents Total assets Total debt Total shareholders’ equity (deficit) Ratio Data: Net debt to Core EBITDA (4) As of December 31, 2019 2018 2017 (In thousands) $ 234,303 $ 208,078 $ 4,170,683 1,869,376 1,833,018 2,532,428 1,510,721 706,755 48,873 2,394,897 1,901,090 (186,924) As of December 31, 2019 2018 2017 4.2x 4.3x 6.6x (1) We evaluate the performance of our 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, corporate-level selling, general and administrative, corporate-level acquisition, litigation and other and gains or losses on sale of real estate). We use segment contribution (NOI) to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 280, Segment Reporting. We also calculate our total segment contribution (NOI) as the sum of the segment contribution (NOI) for each of our business segments. We believe our total segment contribution (NOI) is helpful to investors because it gives a picture of our business’s profitability before differences in capital structures, capital investment cycles, useful life of related assets among otherwise comparable companies and corporate-level overhead which is not immediately and fully correlated with the provision of services by our business. The following table reconciles same store contribution (NOI) to operating income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP. Warehouse segment contribution (NOI) Third-party managed segment contribution (NOI) Transportation segment contribution (NOI) Other segment contribution (NOI) Total segment contribution (NOI) Depreciation, depletion and amortization Selling, general and administrative Acquisition, litigation and other Impairment of long-lived assets (Loss) gain from sale of real estate, net U.S. GAAP operating income Year ended December 31, 2019 2018 2017 2016 2015 (In thousands) $ $ 447,591 $ 374,534 — $ 348,328 — $ 314,045 $— $ 307,749 11,761 18,067 838 14,760 15,735 620 12,825 12,950 2 14,814 14,418 2,368 478,257 $ 405,649 $ 374,105 $ 345,645 $ (163,348) (129,310) (40,614) (13,485) (34) (117,653) (110,825) (3,935) (747) 7,471 (116,741) (99,616) (11,329) (9,473) 43 (118,571) (91,067) (5,661) (9,820) 11,598 12,581 14,305 2,385 337,020 (125,720) (87,204) (1,582) (9,415) (597) $ 131,466 $ 179,960 $ 136,989 $ 132,124 $ 112,502 (2) We calculate EBITDA as earnings before interest expense, taxes, depreciation, depletion and amortization. EBITDA is a measure commonly used in our industry, and we present EBITDA to enhance investor understanding of our operating performance. We believe that EBITDA 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 EBITDA adjusted for asset impairment charges, gain or loss on depreciable real property and other asset disposals, acquisition, litigation and other expenses, bridge loan commitment fees, loss on debt extinguishment and modifications, share-based compensation expense, foreign currency exchange gain or loss, loss on partially owned entities, gain on sale of partially owned entities, impairment of partially owned entities, and multi-employer pension plan withdrawal expense. 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 EBITDA but which we do not believe are indicative of our core business operations. EBITDA and Core EBITDA are not measurements of financial performance under U.S. GAAP, and our EBITDA and Core EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA and Core EBITDA as alternatives to net income or cash flows from operating activities determined in accordance with U.S. GAAP. Our calculations of EBITDA and Core EBITDA have limitations as analytical tools, including: 55 • • • • • these measures do not reflect our historical or future cash requirements for recurring maintenance capital expenditures or growth and expansion capital expenditures; these measures do not reflect changes in, or cash requirements for, our working capital needs; these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; these measures do not reflect our tax expense or the cash requirements to pay our taxes; and although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements. We use EBITDA and Core EBITDA as measures of our operating performance and not as measures of liquidity. The following table reconciles EBITDA and Core EBITDA to net income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP. Net income (loss) attributable to Americold Realty Trust Adjustments: Depreciation, depletion and amortization Interest expense Income tax (benefit) expense EBITDA Adjustments: $ $ Acquisition, litigation and other, excluding 2018 RSU modification expense(a) Bridge loan commitment fees Loss from partially owned entities Gain from sale of partially owned entities Impairment of partially owned entities (b) Asset impairment Foreign currency exchange (gain) loss, net Share-based compensation expense Loss on debt extinguishment, modifications and termination of derivative instruments Loss (gain) on real estate and other asset disposals Multi-employer pension plan withdrawal expense Year ended December 31, 2019 2018 2017 2016 2015 48,162 $ 47,985 $ (608) $ 4,932 $ (21,176) (In thousands) 163,348 94,408 (5,157) 117,653 93,312 (3,619) 116,741 114,898 9,393 118,571 119,552 5,879 300,761 $ 255,331 $ 240,424 $ 248,934 $ 125,720 116,710 9,637 230,891 40,614 2,665 111 (4,297) — 13,485 (10) 12,895 — 904 — 1,893 — 1,069 — — 747 (2,882) 10,683 47,559 (7,623) — 11,329 — 1,363 — 6,496 11,581 3,591 2,358 986 (150) 9,167 5,661 — 128 — — 9,820 (464) 6,436 1,437 (10,590) — 1,582 — 3,538 — — 9,415 3,470 3,108 503 1,131 — Core EBITDA $ 367,128 $ 306,777 $ 287,145 $ 261,362 $ 253,638 (a) Refer to Note 8 of the Consolidated Financial Statements for further details. The 2018 total excludes the $2.1 million RSU modification charge that is included within “Acquisition, litigation and other” on the Consolidated Statement of Operations, thus amounts do not tie in total. Refer to Note 17 of the Consolidated Financial Statements for further details regarding the $2.1 million charge for historical RSU grants to receive dividend equivalents, consistent with treatment of RSU grants post- IPO. (b) Represents an impairment charge related to our investment in the China JV based on a determination that the recorded investment was no longer recoverable from the projected future cash distributions we expected to receive from the China JV. Prior to the ultimate sale, we had not received any cash distributions from the China JV since the formation of the joint venture. 56 (3) We calculate funds from operations, or FFO, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income or loss determined in accordance with U.S. GAAP, excluding extraordinary items as defined under U.S. GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, real estate asset impairment and after adjustments for unconsolidated partnerships and joint ventures. 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-real estate asset impairment, acquisition, litigation and other expenses, excluding 2018 RSU modification expense, share-based compensation, IPO grants, bridge loan commitment fees, impairment of partially owned entities, bridge loan commitment fees, loss on debt extinguishment and modifications and termination of derivative instruments, inventory asset impairment charges, foreign currency exchange gain or loss, gain from sale of partially owned entities, excise tax settlement, Tax Cuts and Jobs Act benefit, and multi-employer pension plan withdrawal expense. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential. However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of recurring maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the utility of FFO and Core FFO as a measure of our performance may be limited. We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of loan costs, debt discounts and above or below market leases, straight-line 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, non-real estate depreciation and amortization (including in respect of the China JV), and recurring maintenance capital expenditures. 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 Annual Report on Form 10-K. 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 following table reconciles FFO, Core FFO and Adjusted FFO to net income, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP. 57 Net income (loss) attributable to Americold Realty Trust $ 48,162 $ 47,985 (In thousands) (608) $ $ 4,932 $ (21,176) 2019 2018 2017 2016 2015 Year ended December 31, Adjustments: Real estate related depreciation Net loss (gain) on sale of depreciable real estate Net loss (gain) on asset disposals Impairment charges on certain real estate assets Real estate depreciation on China JV Funds from operations Less distributions on preferred shares of beneficial interest 114,976 34 382 12,555 790 88,246 (7,471) (65) 747 1,202 86,478 (43) — 9,473 1,183 176,899 130,644 — (1,817) 96,483 (28,452) 85,645 (11,104) — 9,820 1,268 90,561 (28,452) Funds from operations attributable to common shareholders $ 176,899 $ 128,827 $ 68,031 $ 62,109 $ Adjustments: Net loss (gain) on sale of non-real estate assets Non-real estate asset impairment Acquisition, litigation and other expenses, excluding 2018 RSU modification expense (a) Share-based compensation expense, IPO grants Impairment of partially owned entities (b) Bridge loan commitment fees Loss on debt extinguishment, modifications and termination of derivative instruments Inventory asset impairment charges Foreign currency exchange (gain) loss, net Gain from sale of partially owned entities Alternative minimum tax receivable from TCJA Excise tax settlement Multi-employer pension plan withdrawal expense Core FFO applicable to common shareholders Adjustments: Amortization of loan costs and debt discounts Amortization of below/above market leases Straight-line net rent Deferred income taxes benefit Share-based compensation expense Non-real estate depreciation and amortization Non-real estate depreciation and amortization on China JV Recurring maintenance capital expenditures (c) 488 930 40,614 2,432 — 2,665 — — (10) (739) — 1,893 4,208 — — 47,559 — (2,882) (4,297) — — — — (3,745) (128) — (599) — 464 — 11,329 5,661 1,582 — 6,496 — 986 2,108 3,591 — — 4,984 9,167 — — — 1,437 — (464) — — — — — — — 503 3,704 3,470 — — — — $ 219,721 $ 174,993 $ 106,093 $ 69,207 $ 55,697 6,028 151 (521) (10,701) 10,463 48,372 317 6,176 151 (179) (3,152) 6,474 29,407 538 (59,300) (43,975) 8,604 151 101 (3,658) 2,358 30,263 610 (49,906) 7,193 196 (564) (586) 6,436 32,926 762 (44,445) 88,717 597 — 5,711 1,216 75,065 (28,452) 46,613 (175) — 6,672 520 (516) (2,292) 3,108 37,003 1,247 (41,685) 59,754 Adjusted FFO applicable to common shareholders $ 214,530 $ 170,433 $ 94,616 $ 71,125 $ (a) Refer to Note 8 of the Consolidated Financial Statements for further details. The 2018 total excludes the $2.1 million RSU modification charge that is included within “Acquisition, litigation and other” on the Consolidated Statement of Operations, thus amounts do not tie in total. Refer to Note 17 of the Consolidated Financial Statements for further details regarding the $2.1 million charge for historical RSU grants to receive dividend equivalents, consistent with treatment of RSU grants post- IPO. (b) Represents an impairment charge related to our investment in the China JV based on a determination that the recorded investment was no longer recoverable from the projected future cash distributions we expect to receive from the China JV. We did not receive any cash distributions from the China JV since the formation of the joint venture. (c) Recurring maintenance capital expenditures include capital expenditures made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology. For additional information regarding these expenditures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recurring Maintenance Capital Expenditures and Repair and Maintenance Expenses” in Item 7 of this Annual Report on Form 10-K. 58 (4) Net debt to Core EBITDA represents (i) our gross debt (defined as total debt plus discount and deferred financing costs) less cash and cash equivalents divided by (ii) Core EBITDA. Core EBITDA for 2019 for purposes of this calculation assumes ownership of our acquisitions for the full twelve months of the year. Our management believes that this ratio is useful because it provides investors with information regarding gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using Core EBITDA. The following table reconciles net debt to total debt, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP: Total debt Deferred financing costs Gross debt Adjustments: Less: cash and cash equivalents Net debt As of December 31, 2019 2018 (In thousands) $ 1,869,376 $ 1,510,721 12,996 1,882,372 13,943 1,524,664 234,303 208,078 $ 1,648,069 $ 1,316,586 Selected Company Financial and Other Data (Americold Realty Operating Partnership, L.P.) The following tables summarize selected financial data related to our historical financial condition and results of operations for our Operating Partnership: Consolidated Statements of Operations Data: Net income (loss) attributable to the Partnership Per Share Data: General partners’ interest in net income (loss) attributable to unitholders Limited partners’ interest in net income (loss) attributable to unitholders General partners’ net income (loss) per unit Limited partners’ net income (loss) per unit Distributions paid General partners’ distributions paid per unit Limited partners’ distributions paid per unit $ $ $ Year ended December 31, 2019 2018 2017 2016 2015 (In thousands, except per unit data) 48,162 $ 47,985 $ (608) $ 4,932 $ (21,176) 47,680 $ 47,505 $ (602) $ 4,883 $ (20,964) 482 0.27 0.27 480 0.34 0.34 (6) (0.01) (0.01) 49 0.07 0.07 135,443 86,679 48,666 48,666 0.76 0.76 $ 0.62 0.62 $ 0.70 0.70 $ 0.70 0.70 $ (212) (0.31) (0.31) 48,666 0.70 0.70 68,677 694 General partners’ weighted average units outstanding Limited partners’ weighted average units outstanding 177,180 1,790 139,394 1,408 68,677 694 68,677 694 Consolidated Balance Sheet Data: Cash and cash equivalents Total assets Total debt General partners’ capital Limited partners’ capital As of December 31, 2019 2018 2017 (In thousands) $ 234,303 $ 208,078 $ 4,170,683 1,869,376 1,828,673 18,471 2,532,428 1,510,721 712,078 7,192 48,873 2,394,897 1,901,090 184,240 1,860 All other selected financial and other data is the same for Americold Realty Trust and Americold Realty Operating Partnership, L.P. except amounts attributable to common shareholders and unitholders. 59 ITEM 7. 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 consolidated financial statements included in this Annual Report on Form 10-K. 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 Item 1A of this Annual Report on Form 10-K. 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 December 31, 2019, we operated a global network of 178 temperature-controlled warehouses encompassing over one billion cubic feet, with 160 warehouses in the United States, six warehouses in Australia, seven warehouses in New Zealand, two warehouses in Argentina and three warehouses in Canada. We view and manage our business through three primary business segments: warehouse, third– party managed and transportation. We also own and operate a limestone quarry through a separate business segment. 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 and perishable food and other products in our warehouses by our customers. We also provide these customers with a wide array of handling and other warehouse services, such as (1) receipt, handling and placement of products into our warehouses for storage and preservation, (2) retrieval of products from storage upon customer request, (3) blast freezing, which involves the rapid freezing of non- frozen products, including individual quick freezing for agricultural produce and seafood, (4) case-picking, which involves selecting product cases to build customized pallets, (5) kitting and repackaging, which involves assembling custom product packages for delivery to retailers and consumers, and labeling services, (6) order assembly and load consolidation, (7) exporting and importing support services, (8) container handling, (9) cross-docking, which involves transferring inbound products to outbound trucks utilizing our warehouse docks without storing them in our warehouses, and (10) government-approved temperature-controlled storage and inspection services. We refer to these handling and other warehouse services as our value-added services. Cost of operations for our warehouse segment consists of power, other facilities costs, labor, and other 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, variability in costs associated with medical insurance and the impact of workplace safety programs, inclusive of the number and severity of workers’ compensation claims. Our second largest cost of operations from our warehouse segment is power utilized in the operation of our temperature-controlled warehouses. As a result, trends in the price for power in the regions where we operate may have a significant effect on our financial results. We may from time to time hedge our exposure to changes in power prices through fixed rate agreements or, to the extent possible and appropriate, through rate escalations or power surcharge provisions within our customer contracts. Additionally, 60 business mix impacts power expense depending on the type of freezing required. Other facilities costs include utilities other than power, property insurance, property taxes, sanitation, repairs and maintenance on real estate, rent under real property operating leases, where applicable, and other related facilities costs. Other services costs include equipment costs, warehouse consumables (e.g., shrink-wrap and uniforms), 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. Additionally, in connection with the Cloverleaf Acquisition, we acquired trucks and employees that support certain customers within the Cloverleaf network. Other. In addition to our primary business segments, we own and operate a limestone quarry in Carthage, Missouri. Revenues are generated from the sale of limestone mined at our quarry. Cost of operations for our quarry consists primarily of labor, equipment, fuel and explosives. We have referred to this segment as Quarry within our Management’s Discussion and Analysis. Other Consolidated Operating Expenses. We also incur depreciation, depletion and amortization expenses, corporate-level selling, general and administrative expenses and corporate-level acquisition, litigation and other expenses. Our depreciation, depletion and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to our warehouses, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, and our computer hardware and software. Depletion relates to the reduction of mineral resources resulting from the operation of our limestone quarry. Amortization relates primarily to intangible assets for customer relationships. Our corporate-level selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, business development, account 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 and public company costs, 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, achievement of incentive compensation targets, and variability in costs associated with pension obligations. To position ourselves to meet the challenges of the current business environment, we have implemented a shared services support structure to better manage costs and enhance the efficiency of our operations. Our corporate-level acquisition, litigation and other expenses consist of costs that we view outside of selling, general and administrative expenses with a high level of variability from period-to-period, and include the following: • Acquisition related costs include costs associated with transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees. We also include integration costs pre- and post-acquisition that reflect work being performed to facilitate 61 • • • 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 the Company 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. • Non-recurring public company implementation costs associated with the implementation of financial reporting systems and • processes needed to convert the organization to a public reporting company. Terminated site operations costs represent expenses incurred 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 consolidated statement of operations. Key Factors Affecting Our Business and Financial Results Acquisitions On February 1, 2019, we completed the PortFresh Acquisition for a purchase price of approximately $35.9 million, utilizing available cash on hand. PortFresh consisted of one facility operating near the port of Savannah, Georgia and adjacent land upon which we have begun to construct a newly developed facility. Since the date of acquisition, we have reported the results of the acquired facility within our Warehouse segment. On May 1, 2019, we completed the Cloverleaf Acquisition for a purchase price of approximately $1.24 billion, utilizing the $1.21 billion net proceeds from our April 2019 follow-on offering and cash drawn from our senior unsecured revolving credit facility. Cloverleaf was the fifth largest temperature-controlled warehousing provider in the United States, based in Sioux City, Iowa that consisted of 22 facilities in nine states. Cloverleaf also generates income through a small component of transportation operations. Since the date of acquisition, we have reported the results of 21 facilities within our warehouse segment, the results of one facility within our third-party managed segment and the results of Cloverleaf’s transportation operations within our transportation segment. Also, on May 1, 2019, we completed the Lanier Acquisition for approximately $81.9 million utilizing cash drawn from our senior unsecured revolving credit facility. Lanier consisted of two temperature-controlled storage facilities in Georgia serving the poultry industry. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment. On November 19, 2019, we completed the MHW Acquisition for a purchase price of approximately $50.1 million, net of cash received. MHW consisted of two temperature-controlled storage facilities, one located in 62 Chambersburg, Pennsylvania and another in Perryville, Maryland. Since the date of acquisition, we have reported the results of these facilities within our warehouse segment. Our results of operations for the year ended December 31, 2019 includes the one month and partial period of November for the activity of the MHW Acquisition, eight months of activity for the Cloverleaf Acquisition and Lanier Acquisition, and eleven months of activity for the PortFresh Acquisition. Refer to Notes 2 and 3 to the Consolidated Financial Statements in this Annual Report on Form 10-K for further information. Foreign Currency Translation Impact on Our Operations Our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation on revenues and expenses incurred by our operations outside the United States. Future fluctuations of foreign currency exchange rates and their impact on our Consolidated Statements 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 denominated in the local currency of the country in which they are derived or incurred. Therefore, the impact of foreign currency fluctuations on our results of operations and margins is partially mitigated. The following table shows a comparison of underlying average exchange rates of the foreign currencies that impacted our U.S. dollar- reported revenues and expenses during the periods discussed herein together with a comparison against the exchange rates of such currencies at the end of the applicable periods presented herein. The rates below represent the U.S. dollar equivalent of one unit of the respective foreign currency. Amounts presented in constant currency within our results of operations are calculated by applying the average foreign exchange rate from the comparable prior year period to actual local currency results in the current period, rather than the actual exchange rates in effect during the respective period. While constant currency metrics are a non-GAAP calculation and do not represent actual results, the comparison allows the reader to understand the impact of the underlying operations in addition to the impact of changing foreign exchange rates. Foreign Currency Australian dollar New Zealand dollar Argentine peso Canadian dollar Foreign exchange rates as of December 31, 2019 Average foreign exchange rates used to translate actual operating results for the year ended December 31, 2019 Foreign exchange rates as of December 31, 2018 Prior period average foreign exchange rate used to adjust actual operating results for the year ended December 31, 2019(1) 0.703 0.675 0.017 0.772 0.695 0.659 0.021 0.754 0.705 0.671 0.037 0.733 0.747 0.692 0.036 0.772 (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, 63 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 managed warehouse agreements and the exit of the China JV(see Note 4 to the Consolidated Financial Statements in this Annual Report on Form 10-K for more information regarding the China JV). Through our process of active portfolio management, we continue to evaluate our markets and offerings. Strategic Shift within Our Transportation Segment In order to better focus our business on the operation of our temperature-controlled warehouses, we have undertaken a strategic shift in the solutions we provide in our transportation segment. As a result of this strategic shift, we have gradually exited certain commoditized, non-scalable, or low margin services we historically offered to our customers, including traditional brokered transportation services. We continue to offer more profitable and value added programs, such as national and regional cross-dock, regional and multi-vendor consolidation service, and dedicated transportation services. We designed each of these programs 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 occupancy in our temperature-controlled warehouses. Historically Significant Customer For the years ended December 31, 2019, 2018, and 2017 one customer accounted for more than 10% of our total revenues, with revenues received of $211.1 million, $212.8 million and $198.6 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 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, $195.4 million ,$196.3 million, and $183.1 million represented reimbursements for certain expenses we incurred during the years ended December 31, 2019, 2018 and 2017, respectively, that 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 64 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. 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. How We Assess the Performance of Our Business Segment Contribution (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 expenses and corporate-level acquisition, litigation and other expenses). We use segment contribution (NOI) to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with FASB ASC, Topic 280, Segment Reporting. We also analyze the “segment contribution (NOI) margin” for each of our business segments, which we calculate as segment contribution (NOI) divided by segment revenues. In addition to our segment contribution (NOI) and segment contribution (NOI) margin, we analyze the contribution (NOI) of our warehouse rent and storage operations and our warehouse services operations within our warehouse segment. We calculate the contribution (NOI) of our warehouse rent and storage operations as rent and storage revenues less power and other facilities cost. We calculate the contribution (NOI) of our warehouse services operations as warehouse services revenues less labor and other service costs. We calculate the contribution (NOI) margin for each of these operations as the applicable contribution (NOI) measure divided by the applicable revenue measure. We believe the presentation of these contribution (NOI) and contribution (NOI) margin measures helps investors understand the relative revenues, costs and earnings resulting from each of these separate types of services we provide to our customers in the same manner reviewed by our management in connection with the operation of our business. These contribution (NOI) measures within our warehouse segment are not measurements of financial performance under U.S. GAAP, and these measures should be considered as supplements, but not as alternatives, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below. 65 Same Store Analysis We refer to a “same store” as a warehouse we owned or leased for the entirety of two comparable periods and which has reported at least twelve months of consecutive normalized operations prior to the commencement of the earlier period being considered. We define “normalized operations” as a site open for operation or lease after a warehouse acquisition, development or significant modification, including the expansion of a warehouse footprint or a warehouse rehabilitation subsequent to an extraordinary event, such as natural disasters or similar events. In addition, our definition of “normalized operations” takes into account changes in the ownership structure (e.g., acquisition of a previously leased warehouse would result in different charges in the compared periods), which would impact comparability in our warehouse segment contribution (NOI). Warehouses are excluded from the same store population as of the beginning of the fiscal quarter following the occurrence of such events. We evaluate our same store portfolio on a quarterly basis. We calculate “same store contribution (NOI)” as revenues for the same store population less its cost of operations (excluding any depreciation, depletion and amortization, impairment charges and corporate-level selling, general and administrative expenses, corporate- level acquisition, litigation and other expenses and gain or loss on sale of real estate). In order to derive an appropriate measure of period-to- period operating performance, we also calculate our same store contribution (NOI) on a constant currency basis to remove the effects of foreign currency exchange rate movements by using the comparable prior period exchange rate to translate from local currency into U.S. dollars for both periods. We evaluate the performance of the warehouses we own or lease using a “same store” analysis, and we believe that same store contribution (NOI) is helpful to investors as a supplemental performance measure because it includes the operating performance from the population of properties that is consistent from period to period and also on a constant currency basis, thereby eliminating the effects of changes in the composition of our warehouse portfolio and currency fluctuations on performance measures. The following table shows the number of same-store warehouses in our portfolio and the number of warehouses excluded as same- store warehouses for the year ended December 31, 2019. 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 the sites that were exited during the year ended December 31, 2019, as described in footnote 2 following the table. Total Warehouses Same Store Warehouses (1) Non-Same Store Warehouses (1) Third-Party Managed Warehouses (2) 178 136 31 11 (1) During 2019, we acquired one facility in connection with the PortFresh Acquisition, two facilities in connection with the Lanier Acquisition, 21 facilities in connection with the Cloverleaf Acquisition and two facilities in connection with the MHW Acquisition, all of which were added to the non-same store population. During 2019, one facility was moved from the non-same store population to the same store population as a result of achieving normalized operations following an event in 2015 that resulted in an extended period of business interruption. One of our Australia campus locations was moved from the same store population to the non-same store population as we exited a leased facility and transitioned the business to the remaining owned facilities within its campus, and one leased warehouse was fully exited during the third quarter of 2019 resulting in a decrease to our warehouse count. Finally, the only remaining idle facility in our portfolio within the non-same store population was sold during 2019. (2) During 2019, we exited a third-party managed warehouse, which was operated under a joint venture agreement, upon termination of the agreement and return of our capital investment. Additionally, we exited the operations of one facility in the third-party managed segment for which the operating agreement was not renewed. Finally, in connection with the 66 Cloverleaf Acquisition, one facility was added to the third-party managed segment as a result of meeting the definition of this segment. Same store contribution (NOI) is not a measurement of financial performance under U.S. GAAP. In addition, other companies providing temperature-controlled warehouse storage and handling and other warehouse services may not define same store or calculate same store contribution (NOI) in a manner consistent with our definition or calculation. Same store contribution (NOI) should be considered as a supplement, but not as an alternative, to our results calculated in accordance with U.S. GAAP. We provide reconciliations of these measures in the discussions of our comparative results of operations below. Constant Currency Metrics As discussed above under “Key Factors Affecting Our Business and Financial Results—Foreign Currency Translation Impact on Our Operations,” our consolidated revenues and expenses are subject to variations 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. Presentation A detailed discussion of the 2019 year-over-year changes can be found below and a detailed discussion of the 2018 year-over-year changes can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the SEC on February 26, 2019. Additionally, we have reported a new financial statement line referred to as “Acquisition, litigation and other” within our Statements of Operations due to the various material charges incurred in the current period, and accordingly have reclassified certain costs from “Selling, general and administrative” in the comparable prior periods to conform with the new presentation. This reclassification did not result in an impact to our previously reported operating income. This caption represents certain costs that are highly variable from period to period and greater detail of these can be found in Note 8 of the Consolidated Financial Statements within this Annual Report on Form 10-K, including amounts pertaining to the comparable prior periods. 67 Results of Operations The results of operations discussion is combined for Americold Realty Trust and our Operating Partnership because there are no material differences in the results of operations between the two reporting entities. Comparison of Results for the Years Ended December 31, 2019 and 2018 Warehouse Segment The following table presents the operating results of our warehouse segment for the years ended December 31, 2019 and 2018. Year ended December 31, Change 2019 actual 2019 constant currency(1) 2018 actual Actual Constant currency Rent and storage Warehouse services Total warehouse segment revenue Power Other facilities costs (2) Labor Other services costs (3) Total warehouse segment cost of operations Warehouse segment contribution (NOI) Warehouse rent and storage contribution (NOI) (4) Warehouse services contribution (NOI) (5) Total warehouse segment margin Rent and storage margin(6) Warehouse services margin(7) $ $ $ $ 582,509 794,708 1,377,217 82,380 113,551 614,049 119,646 929,626 (Dollars in thousands) $ 589,402 $ 806,792 1,396,194 83,626 115,226 624,363 120,951 944,166 447,591 $ 452,028 $ 386,578 61,013 $ $ 390,550 61,478 $ $ 514,755 662,157 1,176,912 72,332 104,618 526,080 99,348 802,378 374,534 337,805 36,729 13.2% 20.0% 17.0% 13.9% 8.5% 16.7% 20.4% 15.9% 19.5% 14.4% 66.1% 14.5% 21.8% 18.6% 15.6% 10.1% 18.7% 21.7% 17.7% 20.7% 15.6% 67.4% 32.5% 66.4% 7.7% 32.4% 66.3% 7.6% 31.8% 65.6% 5.5% 68 bps 74 bps 213 bps 55 bps 64 bps 207 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. Includes real estate rent expense of $12.3 million and $13.9 million for the year ended December 31, 2019 and 2018, respectively. Includes non-real estate rent expense (equipment lease and rentals) of $12.0 million and $13.8 million for the year ended December 31, 2019 and 2018, respectively. (2) (3) (4) Calculated as rent and storage revenue less power and other facilities costs. (5) Calculated as warehouse services revenue less labor and other services costs. (6) Calculated as warehouse rent and storage contribution (NOI) divided by warehouse rent and storage revenue. (7) Calculated as warehouse services contribution (NOI) divided by warehouse services revenue. Warehouse segment revenue was $1.38 billion for the year ended December 31, 2019, an increase of $200.3 million, or 17.0%, compared to $1.18 billion for the year ended December 31, 2018. On a constant currency basis, our warehouse segment revenue was $1.40 billion for the year ended December 31, 2019, an increase of $219.3 million, or 18.6%, compared to the prior year. Approximately $168.6 million of the increase, on an actual basis, was driven by the additional 26 facilities in the warehouse segment we acquired in the Cloverleaf, Lanier, MHW and PortFresh acquisitions in 2019. The remaining increase was primarily due to a more favorable customer mix, improvements in our commercial terms and contractual rate escalations, the incremental revenue from our expansion of the Rochelle, Illinois facility and opening of the build-to-suit facility 68 in Middleboro, Massachusetts at the end of the third quarter 2018. The foreign currency translation of revenue received by our foreign operations had an $19.0 million unfavorable impact during the year ended December 31, 2019, which was mainly driven by the strengthening of the U.S. dollar over the Australian dollar and to a lesser extent the strengthening of the U.S. dollar over the Argentine peso. Warehouse segment cost of operations was $929.6 million for the year ended December 31, 2019, an increase of $127.2 million, or 15.9%, compared to $802.4 million for the year ended December 31, 2018. On a constant currency basis, our warehouse segment cost of operations was $944.2 million for the year ended December 31, 2019, an increase of $141.8 million, or 17.7%, compared to the prior year. Approximately $111.3 million of the increase, on an actual basis, was driven by the additional 26 facilities in the warehouse segment discussed above. Additionally, during 2019 our cost of operations was negatively impacted by higher health care insurance expenses and start up costs associated with our expansion of the Rochelle facility. Health care insurance expense, which can vary significantly from period to period, is reflected as a component of labor within the warehouse segment cost of operations table above. The $6.6 million increase from the prior year, which excludes the amount pertaining to acquired facilities in 2019, was driven by the volume and severity of individual large claims as compared to the prior year. Despite the impact of the health care insurance expense increase, we continue to see positive impact from our ongoing efforts to enhance productivity. The foreign currency translation of expenses incurred by our foreign operations had a $14.5 million favorable impact during the year ended December 31, 2019. Warehouse segment contribution (NOI) was $447.6 million for the year ended December 31, 2019, an increase of $73.1 million, or 19.5%, compared to $374.5 million for the year ended December 31, 2018. On a constant currency basis, warehouse segment contribution was $452.0 million for the year ended December 31, 2019, an increase of $77.5 million, or 20.7%, compared to the prior year. The foreign currency translation of our results of operations had a $4.4 million unfavorable impact to the warehouse segment contribution period-over- period. The increase is driven by the previously mentioned reasons including the additional 26 facilities in the warehouse segment. The remainder of the increase was driven by transitioning to a more favorable customer mix, improvements in our commercial terms, and the leveraging of our fixed expenses, which allowed us to generate higher contribution margins and the contribution from the opening of the Middleboro facility. The increases were partially offset by the negative impacts of higher health care insurance expenses, the start up costs associated with our Rochelle facility and the currency translation impact of the strengthening of the U.S. dollar. Same Store Analysis We had 136 same stores for the years ended December 31, 2019 and 2018. The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the years ended December 31, 2019 and December 31, 2018. Amounts related to the Cloverleaf, Lanier, MHW and PortFresh acquisitions are reflected within non-same store results. 69 The following table presents revenues, cost of operations, contribution (NOI) and margins for our same stores and non-same stores with a reconciliation to the total financial metrics of our warehouse segment for the years ended December 31, 2019 and 2018. Year ended December 31, Change Number of same store sites Same store revenue: Rent and storage Warehouse services Total same store revenue Same store cost of operations: Power Other facilities costs Labor Other services costs Total same store cost of operations Same store contribution (NOI) Same store rent and storage contribution (NOI)(2) Same store services contribution (NOI)(3) Total same store margin Same store rent and storage margin(4) Same store services margin(5) Number of non-same store sites Non-same store revenue: Rent and storage Warehouse services Total non-same store revenue Non-same store cost of operations: Power Other facilities costs Labor Other services costs Total non-same store cost of operations Non-same store contribution (NOI) Non-same store rent and storage contribution (NOI)(2) Non-same store services contribution (NOI)(3) Total non-same store margin Non-same store rent and storage margin(4) Non-same store services margin(5) Total warehouse segment revenue Total warehouse cost of operations Total warehouse segment contribution 2019 constant currency(1) 2019 actual 136 499,151 668,673 1,167,824 67,537 97,158 527,687 94,870 (Dollars in thousands) $ 505,811 $ 680,640 1,186,451 68,760 98,684 537,894 96,125 787,252 $ 801,463 $ 380,572 334,456 46,116 $ $ $ 384,988 338,367 46,621 $ $ $ $ $ $ $ $ 2018 actual 136 495,130 650,806 1,145,936 69,844 97,018 516,052 96,834 779,748 366,188 328,268 37,920 Actual Constant currency n/a 0.8 % 2.7 % 1.9 % (3.3)% 0.1 % 2.3 % (2.0)% 1.0 % 3.9 % 1.9 % 21.6 % n/a 2.2 % 4.6 % 3.5 % (1.6)% 1.7 % 4.2 % (0.7)% 2.8 % 5.1 % 3.1 % 22.9 % 32.6% 67.0% 6.9% 32.4% 66.9% 6.8% 32.0% 66.3% 5.8% 63 bps 71 bps 107 bps 49 bps 60 bps 102 bps Year ended December 31, Change 2019 constant currency(1) 2018 actual Actual 2019 actual 31 (Dollars in thousands) $ 83,358 $ 83,591 $ 126,035 209,393 14,843 16,393 86,362 24,776 142,374 $ 67,019 52,122 14,897 $ $ $ 32.0% 62.5% 11.8% 126,152 209,743 14,866 16,542 86,469 1 24,826 142,703 67,040 52,183 14,857 32.0% 62.4% 11.8% $ $ $ $ $ $ $ $ 8 19,625 11,351 30,976 2,488 7,600 10,028 2,514 22,630 8,346 9,537 (1,191) 26.9 % 48.6 % (10.5)% Constant currency n/a n/a n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r n/r $ $ $ 1,377,217 $ 1,396,194 $ 1,176,912 929,626 $ 447,591 $ 944,166 $ 452,028 $ 802,378 374,534 17.0% 15.9% 19.5% 18.6% 17.7% 20.7% 70 (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 revenue. (5) Calculated as warehouse services contribution (NOI) divided by warehouse services revenue. n/r - not relevant The following table provides certain operating metrics to explain the drivers of our same store performance. Units in thousands except per pallet and site number data - unaudited Number of same store sites Same store rent and storage: Economic occupancy(1) Average occupied economic pallets Economic occupancy percentage Same store rent and storage revenue per economic occupied pallet Constant currency same store rent and storage revenue per economic occupied pallet Physical occupancy(2) Average physical occupied pallets Average physical pallet positions Physical occupancy percentage Same store rent and storage revenue per physical occupied pallet Constant currency same store rent and storage revenue per physical occupied pallet Same store warehouse services: Throughput pallets (in thousands) Same store warehouse services revenue per throughput pallet Constant currency same store warehouse services revenue per throughput pallet Number of non-same store sites Non-same store rent and storage: Economic occupancy(1) Average occupied economic pallets Economic occupancy percentage Physical occupancy(2) Average physical occupied pallets Average physical pallet positions Physical occupancy percentage Non-same store warehouse services: Throughput pallets (in thousands) Year ended December 31, 2019 136 2018 Change 136 n/a 2,414 79.5% 206.81 209.57 $ $ 2,284 3,034 75.3% 218.50 221.42 $ $ 26,149 25.57 26.03 $ $ $ $ $ $ $ $ 2,447 (1.4)% 80.3% -76 bps 202.30 202.30 2,347 3,048 2.2 % 3.6 % (2.6)% (0.4)% 77.0% -171 bps 211.01 211.01 26,422 24.63 24.63 31 8 452 79.3% 117 80.7% 444 570 112 145 77.9% 76.9% 3.5 % 4.9 % (1.0)% 3.8 % 5.7 % n/a n/r n/r n/r n/r (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 commitment specified in each customers’ contract, and subtracting the physical pallet positions. (2) We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the applicable period. We estimate the number of 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. 71 3,941 523 n/r Economic occupancy at our same stores was 79.5% for the year ended December 31, 2019, a decrease of 76 basis points compared to 80.3% for the year ended December 31, 2018. This change was the result of lower average physical occupancy, partially driven by the continued efforts to improve our commercial terms within our customers’ contracts through fixed commitments which limits our ability to resell physically unoccupied space to other customers not subject to fixed commitments. Our economic occupancy at our same stores for the year ended December 31, 2019 was 426 basis points higher than our corresponding average physical occupancy of 75.3%. The decrease of 171 basis points in average physical occupancy compared to 77.0% for the year ended December 31, 2018 was driven by the timing and size of harvest, our customers production plans and our focus to optimize our warehouse network as previously discussed. The decrease was also partially due to normal course movement by our smaller market customers. Despite the reduction in average occupied pallets, same store rent and storage revenues per occupied pallet increased 3.5% compared to the prior year, primarily driven by a more favorable customer mix, net new business, improvements in our commercial terms and contractual rate escalations. On a constant currency basis, the increase in our same store rent and storage revenue per occupied pallet was 4.9% compared to the prior year largely driven by the strengthening of the U.S. dollar against the Australian dollar and to a lesser extent the strengthening of the U.S. dollar against the Argentine peso. Throughput pallets at our same stores were 26.1 million pallets for the year ended December 31, 2019, a decrease of 1.0% from 26.4 million pallets for the year ended December 31, 2018. This decrease was primarily attributable to a shift in the inbound/outbound profile of certain domestic customers from higher inventory turn customers to lower inventory turn customers with more profitable volumes. Same store warehouse services revenue per throughput pallet increased 3.8% compared to the prior year primarily as a result of contractual rate escalations, favorable business mix and an increase in higher-priced, value-added warehouse services such as repackaging, blast freezing, and case-picking. On a constant currency basis, our same store services revenue per throughput pallet increased 5.7% compared to the prior year. Third-Party Managed Segment The following table presents the operating results of our third-party managed segment for the years ended December 31, 2019 and 2018. Number of managed sites Third-party managed revenue Third-party managed cost of operations Third-party managed segment contribution $ $ 2019 actual 11 252,939 241,178 (Dollars in thousands) $ 254,489 $ 242,494 11,761 $ 11,995 $ 12 259,034 244,274 14,760 (2.4)% (1.3)% (20.3)% (1.8)% (0.7)% (18.7)% Year ended December 31, Change 2019 constant currency(1) 2018 actual Actual Constant currency Third-party managed margin 4.6% 4.7% 5.7% -105 bps -98 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 revenue was $252.9 million for the year ended December 31, 2019, a decrease of $6.1 million, or 2.4%, compared to $259.0 million for the year ended December 31, 2018. On a constant currency basis, third-party managed revenue was $254.5 million for the year ended December 31, 2019, a decrease of $4.5 million, or 1.8%, compared to the prior year. The decrease is primarily due to lower business volume from our 72 largest domestic third-party managed customer, paired with the loss of revenue from a managed site for which the contract expired and was not renewed during the first quarter of 2019 and a managed site exited during the third quarter of 2019. The decreases were partially offset by the addition of one managed site in connection with the Cloverleaf Acquisition and higher business volume from our Australia managed operations. Third-party managed cost of operations was $241.2 million for the year ended December 31, 2019, a decrease of $3.1 million, or 1.3%, compared to $244.3 million for the year ended December 31, 2018. On a constant currency basis, third-party managed cost of operations was $242.5 million for the year ended December 31, 2019, a decrease of $1.8 million, or 0.7%, compared to the prior year. The decrease was as a result of lower business volume, the expired contract and exited managed sites. This decrease was partially offset by the costs associated with the third-party managed site purchased as part of the Cloverleaf Acquisition, as described above. Third-party managed segment contribution (NOI) was $11.8 million for the year ended December 31, 2019, a decrease of $3.0 million, or 20.3%, compared to $14.8 million for the year ended December 31, 2018. On a constant currency basis, third-party managed segment contribution (NOI) was $12.0 million for the year ended December 31, 2019, a decrease of $2.8 million, or 18.7%, compared to the prior year. Decreased margins in this segment were primarily driven by lower volume with our largest domestic customer. Transportation Segment The following table presents the operating results of our transportation segment for the years ended December 31, 2019 and 2018. Year ended December 31, Change 2019 actual 2019 constant currency(1) 2018 actual Actual Constant currency Transportation revenue $ 144,844 (Dollars in thousands) $ 149,464 $ Brokered transportation Other cost of operations Total transportation cost of operations 104,393 22,384 126,777 107,876 22,939 130,815 Transportation segment contribution (NOI) $ 18,067 $ 18,649 $ 158,790 117,639 25,416 143,055 15,735 (8.8)% (5.9)% (11.3)% (11.9)% (11.4)% 14.8 % (8.3)% (9.7)% (8.6)% 18.5 % Transportation margin 12.5% 12.5% 9.9% 256 bps 257 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. Our transportation segment continued its strategic shift to focus on more profitable solutions, which create value for our customers while driving and supporting our warehouse business including consolidation offerings. Transportation revenue was $144.8 million for the year ended December 31, 2019, a decrease of $13.9 million, or 8.8%, compared to $158.8 million for the year ended December 31, 2018. On a constant currency basis, transportation revenue was $149.5 million for the year ended December 31, 2019, a decrease of $9.3 million, or 5.9%, compared to the prior year. The decrease was primarily due to the exit of certain low-margin international and domestic transportation business and the unfavorable impact of foreign currency translation from our international operations. The decrease is partially offset by the revenue associated with transportation operations from the Cloverleaf Acquisition, which contributed $8.4 million. 73 Transportation cost of operations was $126.8 million for the year ended December 31, 2019, a decrease of $16.3 million, or 11.4%, compared to $143.1 million for the year ended December 31, 2018. On a constant currency basis, transportation cost of operations was $130.8 million for the year ended December 31, 2018, a decrease of $12.2 million, or 8.6%, compared to the prior year. The strategic shift referenced above paired with the impact of the foreign currency translation of our international costs led to a decline in transportation cost of operations for the segment. The decrease was partially offset by the cost associated with transportation operations from the Cloverleaf Acquisition. Transportation segment contribution (NOI) was $18.1 million for the year ended December 31, 2019, an increase of $2.3 million, or 14.8%, compared to $15.7 million for the year ended December 31, 2018. Transportation segment margin increased 256 basis points from the prior year, to 12.5% from 9.9%. On a constant currency basis, transportation segment contribution was $18.6 million for the year ended December 31, 2019, an increase of $2.9 million, or 18.5%, compared to the prior year. The overall increase in margin was primarily due to the strategic shift referenced above, which resulted in more profitable business. The impact of operations from the Cloverleaf Acquisition was nominal for the year ended 2019. Quarry Segment The following table presents the operating results of our quarry segment for the years ended December 31, 2019 and 2018. Quarry revenue Quarry cost of operations Quarry segment contribution (NOI) Quarry margin Year ended December 31, 2019 2018 Change (Dollars in thousands) $ 8,705 7,867 838 $ 8,899 8,279 620 $ $ (2.2)% (5.0)% 35.2 % 9.6% 7.0% 260 bps Quarry revenue was $8.7 million for the year ended December 31, 2019, a decrease of $0.2 million, or 2.2%, compared to $8.9 million for the year ended December 31, 2018. Lower revenue in our quarry operations was attributable to lower demand from our construction and industrial customers. Demand from these customers was higher in 2018 due to inclement weather driving the demand for roofing materials containing limestone. Quarry cost of operations was $7.9 million for the year ended December 31, 2019, a decrease of $0.4 million, or 5.0%, compared to $8.3 million for the year ended December 31, 2018. During the year ended December 31, 2018, the quarry recognized workers’ compensation expense of approximately $0.5 million related to a current realized claim, with no such cost incurred in 2019. After excluding the prior year impact of this charge, quarry costs of operations were relatively flat compared to the prior year. Quarry segment contribution (NOI) was $0.8 million for the year ended December 31, 2019, as compared to $0.6 million for the year ended December 31, 2018, largely driven by the factors described above. 74 Other Consolidated Operating Expenses Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $163.3 million for the year ended December 31, 2019, an increase of $45.7 million, or 38.8%, compared to $117.7 million for the year ended December 31, 2018. This increase was primarily due to the Cloverleaf, Lanier, MHW and PortFresh acquisitions in 2019, as well as the Rochelle expansion facility being placed into service in 2019 and the Middleboro facility placed into service during the third quarter of 2018. Selling, general and administrative. Corporate-level selling, general and administrative expenses were $129.3 million for the year ended December 31, 2019, an increase of $18.5 million, or 16.7%, compared to $110.8 million for the year ended December 31, 2018. Included in these amounts are business development expenses attributable to our customer onboarding, engineering and consulting services to support our customers in the cold chain. Business development expenses represented approximately 14% of corporate-level selling, general and administrative expenses for 2019 and 2018. We believe these costs are comparable to leasing costs for other publicly-traded REITs. The increase in corporate-level selling, general and administrative expenses compared to the prior year was partially due to the Cloverleaf Acquisition. The increase was also due to higher share-based compensation expense we incurred for certain equity incentive awards to certain employees and non-employee directors. Overall, share-based compensation expense increased $4.3 million compared to the prior year. The increase was also driven by higher payroll and benefits and higher professional fees we incurred in preparation for our first external assessment of internal control over financial reporting. For the years ended December 31, 2019 and 2018, corporate-level selling, general and administrative expenses were 7.2% and 6.9%, respectively, of total revenues. Acquisition, litigation and other. Corporate-level acquisition, litigation and other expenses were $40.6 million for the year ended December 31, 2019, an increase of $36.7 million compared to $3.9 million for the year ended December 31, 2018. Included in these amounts are business acquisition related costs, litigation costs associated with litigation charges outside of the normal course of business or resulting from a settlement, severance and equity acceleration costs incurred in connection with former executives, severance as a result of synergies realized from acquisitions or operational realignment, non-offering related equity issuance expenses, non-recurring public company implementation costs and terminated site operations costs. We view all of these costs as corporate in nature regardless of the segment or segments involved in certain transactions. During the year ended December 31, 2019, we incurred $10.0 million in investment advisory fees related to the Cloverleaf and Lanier acquisitions. Other professional fees, integration costs and employee retention expenses incurred in connection with completed and potential acquisitions totaled $14.3 million for the year ended December 31, 2019. In addition, we incurred $4.3 million of severance and equity acceleration expenses related to exited former executives and the resignation of a member of the Board of Trustees and $5.4 million of severance related to reduction in headcount as a result of the synergies created from the Cloverleaf and Lanier acquisitions and organizational realignment of our international operations. We also incurred $4.6 million of legal settlement and related litigation professional fees and $1.4 million of costs in connection with the secondary offering of common shares on behalf of our previously significant shareholders in March 2019, for which we received no proceeds. These increases are partially offset by the following costs incurred during 2018: $2.0 million related to the modification of certain terms governing equity awards issued under the 2010 Equity Incentive Plan, $1.8 million for the non-offering related equity issuance expenses incurred in connection with the IPO and September 2018 follow-on offering, $1.2 million of non-recurring public company implementation costs and $0.7 million of acquisition related costs. Additionally, during the third quarter of 2017, we recorded a charge of $2.1 million representing expense to repair a leased facility to restore the site to its original condition prior to the lease expiration. This charge was subsequently reversed during the fourth quarter of 2018, when the Company was released from this liability by the landlord. 75 Impairment of long-lived assets. For the years ended December 31, 2019 and 2018, we recorded impairment charges of $13.5 million and $0.7 million, respectively. During the first quarter of 2019, management and our Board of Trustees formally approved the “Atlanta Major Market Strategy” plan which includes the partial redevelopment of an existing warehouse facility. The partial redevelopment required the demolition of 75% of the current warehouse, which was unused. We expect the remainder of the site to continue operating as normal during the construction period. As a result of this initiative, we recorded an impairment charge of $9.6 million. Additionally, during the first quarter of 2019, we recorded an impairment charge of $2.9 million related to a domestic idle warehouse facility in anticipation of sale of the asset, which was completed during the second quarter of 2019. Each of these impaired assets previously mentioned related to the Warehouse segment. As previously discussed, during the second quarter of 2019, management determined that certain international transportation related assets were going to be idled and we recorded an impairment charge of $0.9 million as a result. These impaired assets related to the transportation segment. Finally, the impairment charge recorded during 2018 related to the planned disposal of an idle facility within the Warehouse segment, which was subsequently sold during 2019. Other Expense The following table presents other items of income and expense for the years ended December 31, 2019 and 2018. Other (expense) income: Interest expense Interest income Bridge loan commitment fees Loss on debt extinguishment, modifications and termination of derivative instruments Foreign currency exchange gain, net Other expense - net Loss from partially owned entities Gain from sale of partially owned entities Year ended December 31, 2019 2018 Change % (Dollars in thousands) (94,408) $ (93,312) $ 6,286 (2,665) — 10 (1,870) (111) 4,297 3,996 — (47,559) 2,882 (532) (1,069) — 1.2 % 57.3 % 100.0 % (100.0)% (99.7)% 251.5 % (89.6)% 100.0 % Interest expense. Interest expense was $94.4 million for the year ended December 31, 2019, an increase of $1.1 million, or 1.2%, compared to $93.3 million for the year ended December 31, 2018. Overall, interest expense increased slightly, which was due to the interest expense incurred in connection with the $350.0 million aggregate principal amount of Series C senior unsecured notes issued in May 2019, which were used to fund a portion of the Cloverleaf and Lanier acquisitions, offset by the effect of lower interest rates attained in multiple debt refinancing transactions during the fourth quarter of 2018. While our average outstanding principal has increased from the comparable prior period, on average, the effective interest rate of our outstanding debt has decreased from 5.35% for the year ended December 31, 2018 to 4.79% for the year ended December 31, 2019. Bridge loan commitment fees. Corporate-level bridge loan commitment fees were $2.7 million for the year ended December 31, 2019. We obtained a bridge loan commitment to support the Cloverleaf Acquisition. The bridge loan facility ultimately did not need to be funded, and accordingly, we expensed the lender commitment and loan fee. Interest income. Interest income of $6.3 million for the year ended December 31, 2019 was 57.3% higher when compared to $4.0 million for the year ended December 31, 2018. This change was primarily driven by the increase in interest income associated with the increase in net cash provided by our initial and follow-on offerings which was deposited into interest bearing cash equivalent accounts. The increase in interest income is driven by a 76 higher average cash balance period-over-period, paired with a higher interest rate of 2.3% earned during the year ended December 31, 2019 as compared to 1.9% during the year ended December 31, 2018. Loss on debt extinguishment, modifications and termination of derivative instruments. In 2018, we recognized an aggregate $47.6 million loss on debt extinguishment and modifications charge. This was comprised of a write-off of unamortized debt issuance costs in connection with the refinancing of our pre-IPO Senior Secured Credit Facilities in connection with the IPO for $21.4 million, the defeasance of our 2010 CMBS debt for $18.5 million and write-off of related unamortized debt issuance costs of $3.4 million, the write-off of unamortized debt issuance costs in connection with the prepayment of our ANZ Loans for $2.2 million, and the recognition of the remaining unamortized Accumulated other comprehensive loss resulting from the interest rate swaps terminated in connection with the prepayment of our ANZ Loans for $1.8 million. No such costs were incurred during the year ended December 31, 2019. Foreign currency exchange gain (loss), net. We reported nominal foreign currency exchange gain for the year ended December 31, 2019 compared to a $2.9 million gain for the year ended December 31, 2018. The monthly re-measurement of an intercompany loan denominated in Australian dollars, issued from our Australian subsidiary to one of our U.S. corporate subsidiaries, resulted in a foreign currency exchange gain in the year ended December 31, 2018, as the U.S. dollar strengthened against the Australian dollar as compared to the year ended December 31, 2017. This intercompany loan was refinanced in December 2018, and the Company entered into a cross-currency swap, eliminating foreign currency exchange gain (loss) on the intercompany loan in future periods. The resulting foreign currency exchange gain for the year ended December 31, 2019 stems from other immaterial foreign currency denominated transactions. Loss from partially owned entities. We reported a loss of $0.1 million for the year ended December 31, 2019 compared to a loss of $1.1 million for the year ended December 31, 2018. This decrease is due to the sale of our interest in the China JV during the third quarter of 2019. Gain from sale of partially owned entities. During the year ended December 31, 2019, we sold our interest in the China JV which resulted in the $4.3 million gain. Income Tax Benefit (Expense) Income tax benefit for the year ended December 31, 2019 was $5.2 million, which represented an increase of $1.6 million, from an income tax benefit of $3.6 million for the year ended December 31, 2018. The deferred tax benefit increased by $7.5 million, primarily due to the reduction of a valuation allowance for $9.6 million to benefit deferred tax liabilities recorded for certain acquisitions in 2019 as a source of income against existing deferred tax assets that have been subject to valuation allowance. The benefit was reduced primarily for losses at our TRS that remain subject to valuation allowance. Current tax expense in 2019 increased by $6.0 million, primarily because we recognized a one-time Alternative Minimum Tax benefit of $3.8 million in 2018. The remainder represents foreign taxes for the increase in 2019 of pre- tax book income generated by our Australia and New Zealand operations. 77 Liquidity and Capital Resources of the Parent Company In this section and in the section “Liquidity and Capital Resources of the Operating Partnership” below, the term “Parent Company” refers to Americold Realty Trust on an unconsolidated basis, excluding our Operating Partnership. Analysis of Liquidity and Capital Resources Our Parent Company’s business is operated primarily through our Operating Partnership, of which our Parent Company is the sole general partner and limited partner, and for which it consolidates for financial reporting purposes. Because our Parent Company operates on a consolidated basis with our Operating Partnership, the section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of our Parent Company on a consolidated basis and how our Company is operated as a whole. Our Parent Company issues public equity from time to time, but generally does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company which are fully reimbursed by the Operating Partnership. Our Parent Company itself does not hold any indebtedness other than guarantees of the indebtedness of our Operating Partnership and certain of its subsidiaries, and its only material asset is its ownership of partnership interests of our Operating Partnership. Therefore, the consolidated assets and liabilities and the consolidated revenues and expenses of our Parent Company and our Operating Partnership are the same on their respective financial statements. However, all debt is held directly or indirectly at the Operating Partnership level. Our Parent Company’s principal funding requirement is the payment of dividends on its common and preferred shares. Our Parent Company’s principal source of funding for its dividend payments is distributions it receives from our Operating Partnership. As the sole general partner of our Operating Partnership, our Parent Company has the full, exclusive and complete responsibility for our Operating Partnership’s day-to-day management and control. Our Parent Company causes our Operating Partnership to distribute such portion of its available cash as our Parent Company may in its discretion determine, in the manner provided in our Operating Partnership’s partnership agreement. Our Parent Company receives proceeds from its equity issuances from time to time, but is generally required by our limited partnership agreement to contribute the proceeds from its equity issuances to our Operating Partnership in exchange for partnership units of our Operating Partnership. Our Parent Company is a well-known seasoned issuer with an effective shelf registration statement filed on February 25, 2019, which allows our Parent Company to register an indeterminate amount of common shares. As circumstances warrant, our Parent Company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing. Any proceeds from such equity issuances would generally be contributed to our Operating Partnership in exchange for additional equity interests in our Operating Partnership. Our Operating Partnership may use the proceeds for general business purposes, which may include the repayment of outstanding indebtedness, the funding of development, expansion and acquisition opportunities and to increase working capital. 78 On August 26, 2019, our Parent Company entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common shares through the ATM Equity Program. Sales of our common shares made pursuant to the 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 ATM Equity Program for general corporate purposes, which may include funding acquisitions, development and expansion projects and repayment of outstanding indebtedness. There were no common shares sold under the ATM Equity Program during 2019. The liquidity of our Parent Company is dependent on our Operating Partnership’s ability to make sufficient distributions to our Parent Company. The primary cash requirement of our Parent Company is its payment of dividends to its shareholders. Our Parent Company also guarantees our Operating Partnership’s, as well as certain of its subsidiaries’ and affiliates’, unsecured debt. If our Operating Partnership or such subsidiaries fail to fulfill their debt requirements, which trigger Parent Company guarantee obligations, then our Parent Company will be required to fulfill its cash payment commitments under such guarantees. However, our Parent Company’s only material asset is its investment in our Operating Partnership. We believe our Operating Partnership’s sources of working capital, specifically its cash flow from operations, and funds available under its revolving credit facility are adequate for it to make its distribution payments to our Parent Company and, in turn, for our Parent Company to make its dividend payments to shareholders. However, we cannot assure you that our Operating Partnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including making distribution payments to our Parent Company. The lack of availability of capital could adversely affect our Operating Partnership’s ability to pay its distributions to our Parent Company, which would in turn, adversely affect our Parent Company’s ability to pay cash dividends to its shareholders. Dividends and Distributions Our Parent Company is required to distribute 90% of its taxable income (excluding capital gains) on an annual basis in order for it to continue to qualify as a REIT for federal income tax purposes. Accordingly, our Parent Company intends to make, but is not contractually bound to make, regular quarterly distributions to shareholders from cash flow from our Operating Partnership’s operating activities. While historically our Parent Company has satisfied this distribution requirement by making cash distributions to its shareholders, it may choose to satisfy this requirement by making distributions of cash or other property. All such distributions are at the discretion of our Parent Company’s board of trustees. Our Parent Company considers market factors and our Operating Partnership’s performance in addition to REIT requirements in determining distribution levels. Our Parent Company has distributed at least 100% of its 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 Parent Company’s status as a REIT. As a result of this distribution requirement, our Operating Partnership cannot rely on retained earnings to fund its ongoing operations to the same extent that other companies whose parent companies are not REITs can. Our Parent Company may need to continue to raise capital in the debt and equity markets to fund our Operating Partnership’s working capital needs, as well as potential developments at new or existing properties, acquisitions or investments in newly created joint ventures. In addition, our Parent Company may be required to use 79 borrowings under our revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our Parent Company’s REIT status. Our Parent Company declared the following dividends on its common and Series B preferred shares during the years ended December 31, 2019 and 2018 (in thousands, except per share amounts): Month Declared/Paid Dividend Per Share 2019 (Common Shares) Distributions Declared Distributions Paid (In thousands, except per share amounts) December (2018)/January $ 0.1875 $ — $ 28,218 December (a) — (127) December (2018)/January March/April $ 0.2000 — 30,235 7 30,235 March (b) March/April June/July June (c) — (142) $ 0.2000 — 38,764 15 38,764 — (172) June/July September/October $ 0.2000 — 38,795 13 38,795 October (d) — (170) September/October December/January (2020) $ 0.200 — 38,796 $ 146,590 $ 7 — 135,443 (a) Declared in December 2018 and included in the $28.2 million declared, see description to the right regarding timing of payment. (b) Declared in March and included in the $30.2 million declared, see description to the right regarding timing of payment. (c) Declared in June and included in the $38.8 million declared, see description to the right regarding timing of payment. (d) Declared in September and included in the $38.8 million declared, see description to the right regarding timing of payment. 80 Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Month Declared/Paid Dividend Per Share 2018 Distributions Declared Distributions Paid Common Shares Series B Preferred Shares Common Shares Series B Preferred Shares (In thousands, except per share amounts) January (a) March/April $ $ 0.0186 $ 1,291 $ 619 $ 1,291 $ 619 0.1396 20,145 — 20,145 March (c) March/April June/July June (d) June/July — — (79) $ 0.1875 — 27,250 — — 20 27,250 September/October $ 0.1875 — — (118) — 28,072 — — 28 28,072 October(e) — — (114) September/October December/January 2019 $ 0.1875 — 28,218 — — 28 — $ 104,976 $ 76,523 Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). — — — Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). — — — — — Series B Preferred Shares - Fixed Dividend January (a) Total distributions paid to holders of Series B Preferred Shares (b) 1,198 1,198 $ 1,817 $ 1,817 (a) Stub period dividend paid to shareholders of record prior to the IPO. (b) Last participating and fixed dividend paid to holders of Series B Preferred Shares in connection with the conversion to common shares on the IPO date. (c) Declared in March and included in the $20.1 million declared, see description to the right regarding timing of payment. (d) Declared in June and included in the $27.3 million declared, see description to the right regarding timing of payment. (e) Declared in September and included in the $28.1 million declared, see description to the right regarding timing of payment. 81 Liquidity and Capital Resources of the Operating Partnership In this section, the terms “we”, “our” and “us” refer to our Operating Partnership together with its consolidated subsidiaries or our Operating Partnership and our Parent Company together with their consolidated subsidiaries, as the context requires. Analysis of Liquidity and Capital Resources Our Parent Company is our sole general partner and consolidates our results of operations for financial reporting purposes. Because we operate on a consolidated basis with our Parent Company, the section entitled “Liquidity and Capital Resources of the Parent Company” should be read in conjunction with this section to understand our liquidity and capital resources on a consolidated basis. We currently expect that our principal sources of funding for working capital, facility acquisitions, 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 2018 forward sale agreement; borrowings under our 2018 Senior Unsecured Credit Facilities; our ATM Equity Program; 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. Security Interests in Customers’ Products By operation of law and in accordance with our customer contracts (other than leases), we typically receive warehouseman’s liens on products held in our warehouses to secure customer payments. Such liens permit us to take control of the products and sell them to third parties in order to recover any monies receivable on a delinquent account, but such products may be perishable or otherwise not readily saleable by us. Historically, in instances where we have warehouseman’s liens and our customer sought bankruptcy protection, we have been successful in receiving “critical vendor” status, which has allowed us to fully collect on our accounts receivable during the pendency of the bankruptcy proceeding. Our bad debt expense was $1.8 million and $2.3 million for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, we maintained bad debt allowances of approximately $6.9 million, which we believed to be adequate. 82 Distributions All distributions on our units are at the discretion of our Parent Company’s board of trustees. In 2019 and 2018, our Operating Partnership declared and paid the following distributions (in thousands): Month Declared/Paid Distributions Declared Distributions Paid 2019 December (2018)/January March/April June/July September/October December/January (2020) (In thousands) $ — $ 30,235 38,764 38,795 38,796 $ 146,590 $ 28,098 30,108 38,605 38,632 — 135,443 Month Declared/Paid Distributions Declared Distributions Paid 2018 January (a) March/April June/July September/October December/January (2019) $ (In thousands) 3,242 $ 20,145 27,250 28,072 28,218 $ 106,927 $ 3,242 20,086 27,160 27,986 — 78,474 (a) Stub period distribution paid to Parent immediately prior to the IPO. 83 $ 181,443 $ 70,000 32,000 283,443 200,000 400,000 350,000 950,000 475,000 1,708,443 (12,996) 187,957 70,000 32,000 289,957 200,000 400,000 — 600,000 475,000 1,364,957 (13,943) 1,351,014 Outstanding and Available Indebtedness The following table presents our outstanding and available indebtedness as of December 31, 2019 and 2018. Effective interest rate (2) as of December 31, 2019 Contractual interest rate (1) Outstanding principal amount at December 31, 2019 December 31, 2018 Indebtedness 2013 Mortgage Loans Senior note Mezzanine A Mezzanine B Total 2013 Mortgage Loans Senior Unsecured Notes Series A notes Series B notes Series C notes Total Senior Unsecured Notes Stated maturity date 5/2023 5/2023 5/2023 1/2026 1/2029 1/2030 3.81% 7.38% 11.50% 4.68% 4.86% 4.10% 4.14% 7.55% 11.75% 4.77% 4.92% 4.15% 2018 Senior Unsecured Term Loan A Facility(1) 1/2023 L+1.00% 3.14% Total principal amount of indebtedness Less deferred financing costs Total indebtedness, net of unamortized deferred financing costs $ 1,695,447 $ 2018 Senior Unsecured Revolving Credit Facility(1) 1/2021 L+0.90% 0.36% $ — $ — (1) References in this table to L are references to one-month LIBOR. (2) The effective interest rate includes effects of amortization of the deferred financing costs. The weighted average effective interest rate for total debt was 4.57% and 5.04% as of December 31, 2019 and 2018, respectively. 2018 Senior Unsecured Credit Facility On December 4, 2018, we entered into the 2018 Senior Unsecured Credit Facility to, among other things, (i) increase the revolver borrowing capacity from $450 million to $800 million, (ii) convert the credit facility (term loan and revolver) from a secured credit facility to an unsecured credit facility, and (iii) decrease the applicable interest rate margins from 2.35% to 1.45% and decrease the fee on unused borrowing capacity by 5 basis points. The terms of the revolver allow for the ability to draw proceeds in multiple currencies, up to $400 million. In connection with entering into the original agreement and subsequent amendments for the Term Loan A Credit Facility, we capitalized approximately $8.9 million of debt issuance costs, which we amortize as interest expense under the effective interest method. The unamortized balance of Term Loan A debt issuance costs are included in “Mortgage notes, senior unsecured notes and term loan” on the accompanying Consolidated Balance Sheets. As of December 31, 2019, $2.8 million of unamortized debt issuance costs related to the revolving credit facility are included in “Other assets” in the accompanying Consolidated Balance Sheet. On September 24, 2019, we reduced our interest rate margins from 1.45% to 1.00% and decreased the fee on unused borrowing capacity to a flat 20 basis points regardless of the percentage of total commitment used. The 84 Company received a favorable credit rating during the third quarter of 2019. This rating, when combined with existing ratings, allowed the Company to transition to a favorable ratings-based pricing grid. Our 2018 Senior Unsecured Revolving Credit Facility is structured to include a borrowing base, which will allow us to borrow against the lesser of our Senior Unsecured Term Loan A Facility balance outstanding, our Senior Unsecured Notes balance outstanding, $800 million in revolving credit commitments, and the value of certain owned assets and ground leased assets. At December 31, 2019, the gross value of our assets included in the calculations under our 2018 Senior Unsecured Revolving Credit Facility, was in excess of $4.3 billion, and had an effective borrowing base collateral value (after concentration limits and advance rates as calculated under the anticipated terms of our 2018 Senior Unsecured Revolving Credit Facility) in excess of $2.6 billion. The 2018 Senior Unsecured Credit Facility contains representations, covenants and other terms customary for a publicly traded REIT. In addition, it contains certain financial covenants, as defined in the credit agreement, including: • • • • • • • a maximum leverage ratio of less than or equal to 60% of our total asset value; a minimum borrowing base coverage ratio of greater than or equal to 1.00 to 1.00; a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00; a minimum borrowing base debt service coverage ratio of greater than or equal to 2.00 to 1.00; a minimum tangible net worth requirement of greater than or equal to $1.1 billion plus 70% of any future net equity proceeds following the completion of the IPO transactions; a maximum recourse secured debt ratio of less than or equal to 15% of our total asset value; and a maximum secured debt ratio of less than or equal to 40% of total asset value. Our 2018 Senior Unsecured Credit Facility is fully recourse to our Operating Partnership. As of December 31, 2019, we were in compliance with all debt covenants. Series A, B and C Senior Unsecured Notes On November 6, 2018, we priced a debt private placement transaction consisting of (i) $200 million senior unsecured notes with a coupon of 4.68% due January 8, 2026 (“Series A”) and (ii) $400 million senior unsecured notes with a coupon of 4.86% due January 8, 2029 (“Series B”), collectively referred to as the debt private placement. The transaction closed on December 4, 2018. Interest is paid on January 8 and July 8 of each year until maturity, with the first payment occurring July 8, 2019. The notes are our general unsecured senior obligations and are guaranteed by us and our subsidiaries. We applied a portion of the proceeds of the debt private placement to complete the defeasance of the $600 million Americold 2010 LLC Trust, Commercial Mortgage Pass-Through Certificates, Series 2010, ART, or the 2010 Mortgage Loans. We applied the remaining proceeds to the Australian term loan and the New Zealand term loan, or the ANZ Loans. On April 26, 2019, we priced a debt private placement transaction consisting of $350 million senior unsecured notes with a coupon of 4.10% due January 8, 2030 (“Series C”). The transaction closed on May 7, 2019. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring January 8, 2020. The initial January 8, 2020 payment will include interest accrued since May 7, 2019. The notes are general unsecured obligations of the Company and are guaranteed by the Company and the subsidiaries of the Company. The Company applied the proceeds of the private placement transaction to repay the indebtedness outstanding under our senior unsecured revolving credit facility incurred in connection with the funding of the Cloverleaf and Lanier acquisitions. 85 The Series A, Series B and Series C senior notes and guarantee agreement includes a prepayment option executable at any time during the term of the loans. The prepayment can be either a partial payment or payment in full, as long as the partial payment is at least 5% of the outstanding principal. Any prepayment in full must include a make-whole amount, which is the discounted remaining scheduled payments due to the lender. The discount rate to be used is equal to 0.50% plus the yield to maturity reported for the most recently actively traded U.S. Treasury Securities with a maturity equal to the remaining average life of the prepaid principal. The Company must give each lender at least 10 day’s written notice whenever it intends to prepay any portion of the debt. If a change in control occurs for us, we must issue an offer to prepay the remaining portion of the debt to the lenders. The prepayment amount will be 100% of the principal amount, as well as accrued and unpaid interest. The Senior Unsecured Notes require compliance with leverage ratios, secured and unsecured indebtedness ratios, and unsecured indebtedness to qualified assets ratios. In addition, we are required to maintain at all times a credit rating for each series of notes from a nationally recognized statistical rating organization. The Senior Unsecured Notes agreement includes the following financial covenants: • a maximum leverage ratio of less than or equal to 60% of our total asset value; • a maximum unsecured indebtedness to qualified assets ratio of less than 0.60 to 1.00; • a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00; • a minimum unsecured debt service ratio of greater than or equal to 2.00 to 1.00; and • a maximum total secured indebtedness ratio of less than 0.40 to 1.00. As of December 31, 2019, we were in compliance with all debt covenants. 2013 Mortgage Loans On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which we refer to as the 2013 Mortgage Loans. The debt consists of a senior debt note and two mezzanine notes. The components are cross-collateralized and cross- defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the two mezzanine notes remain subject to yield maintenance provisions. We used the net proceeds of these loans to refinance certain of the 2006 Mortgage Loans, acquire two warehouses, and fund general corporate purposes. The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of December 31, 2019, the amount of restricted cash associated with the 2013 Mortgage Loans was $3.2 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The debt service coverage ratio as of December 31, 2019 was 1.76x. The 2013 Mortgage Loans are non- recourse to us subject to customary non-recourse carve-outs. The 2013 Mortgage Loans also require compliance with other financial covenants, including a debt coverage ratio and cash flow calculation, as defined. 86 Debt Covenants Our 2018 Senior Unsecured Credit Facility, the Senior Unsecured Notes, and 2013 Mortgage Loans require financial statements reporting, periodic requirements to report compliance with established thresholds and performance measurements, and affirmative and negative covenants that govern our allowable business practices. The affirmative and negative covenants include continuation of insurance, maintenance of collateral, the maintenance of REIT status, and our ability to enter into certain types of transactions or exposures in the normal course of business. As of December 31, 2019, we were in compliance with all debt covenants. Loss on debt extinguishment, modifications and termination of derivative instruments During 2018, we completed multiple refinancing and extinguishment of debt transactions resulting in an aggregate amount of $47.6 million each of which was recorded to “Loss on debt extinguishment, modifications and termination of derivative instruments”. During the first quarter of 2018, simultaneous with the IPO, we closed on a Senior Secured Term Loan A and repaid the Term Loan B. Shortly thereafter, we amended the facility by repaying a portion of the Term Loan A and increasing the capacity on the revolving credit facility. The total amount recorded to Loss on debt extinguishment, modifications and termination of derivative instruments as a result of these transactions totaled $21.4 million, representing the write-off of unamortized deferred financing costs and debt discount from Term Loan B. During the fourth quarter of 2018, the 2010 Mortgage Loans were extinguished. This resulted in an $18.5 million defeasance fee, as well as a $3.4 million write-off of unamortized deferred financing costs recorded to Loss on debt extinguishment, modifications and termination of derivative instruments. Additionally, during the fourth quarter of 2018, the ANZ Loans were fully prepaid, which resulted in a write-off of $2.2 million in unamortized deferred financing costs and $1.8 million charge for termination of the related interest rate swaps, both recorded to Loss on debt extinguishment, modifications and termination of derivative instruments. Credit Ratings Our capital structure and financial practices have earned us investment grade credit ratings from three nationally recognized credit rating agencies. During the fourth quarter of 2018, we received our inaugural investment grade ratings of BBB with a Stable outlook from both Fitch and Morningstar. During the third quarter of 2019, we received 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” for further details regarding the potential impacts from changes to our credit ratings. Recurring Maintenance Capital Expenditures and Repair and Maintenance Expenses We utilize a strategic approach to recurring maintenance capital expenditures and repair and maintenance expenses to maintain the high quality and operational efficiency of our warehouses and ensure that our warehouses meet the “mission-critical” role they serve in the cold chain. Recurring Maintenance Capital Expenditures Recurring maintenance capital expenditures are capitalized investments made to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its existing supporting personal property and information technology systems. Examples of recurring maintenance capital expenditures related to our existing temperature-controlled warehouse network include replacing roofs and refrigeration equipment, and upgrading our racking systems. Examples of recurring maintenance capital expenditures related to personal property include expenditures on material handling equipment (e.g., fork lifts and 87 pallet jacks) and related batteries. Examples of recurring maintenance capital expenditures related to information technology include expenditures on existing servers, networking equipment and current software. The following table sets forth our recurring maintenance capital expenditures for the years ended December 31, 2019 and 2018. Real estate Personal property Information technology Total recurring maintenance capital expenditures Total recurring maintenance capital expenditures per cubic foot Repair and Maintenance Expenses Year ended December 31, 2019 2018 (In thousands, except per cubic foot amounts) 50,966 $ 4,357 3,977 59,300 $ 0.055 $ 37,613 3,175 3,187 43,975 0.048 $ $ $ 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 years ended December 31, 2019 and 2018. Real estate Personal property Total repair and maintenance expenses Repair and maintenance expenses per cubic foot Year ended December 31, 2019 2018 (In thousands, except per cubic foot amounts) 22,378 $ 33,150 55,528 $ 0.051 $ 19,813 32,536 52,349 0.057 $ $ $ External Growth, Expansion and Development Capital Expenditures External growth expenditures represent asset acquisitions or business combinations. Expansion and development capital expenditures are investments made to support both our customers and our warehouse expansion and development initiatives. It also includes investments in enhancing our information technology platform. 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. 88 Acquisitions The acquisitions completed during 2019 relate to Cloverleaf, Lanier, MHW and PortFresh, and exclude amounts related to the assets under construction for expansion and development projects, further detailed below. The PortFresh Acquisition cost included approximately $15.9 million allocated to land which we are developing a new facility upon, and have classified within expansion and development expenditures in order to reflect the total cost of the project. The Cloverleaf Acquisition included approximately $12.5 million allocated to assets under construction which we have classified within expansion and development expenditures in order to reflect the total cost of the projects discussed further below. Refer to Notes 2 and 3 of the Consolidated Financial Statements for details of the purchase price allocation for each acquisition. Expansion and development The increase in expenditures can be attributed to the increase in construction and acquisition activity during 2019 as compared to 2018. In 2019, we completed the Rochelle, Illinois fully-automated expansion project, with its grand opening at the end of the second quarter of the year. We also began the Atlanta major markets strategy project, which is expected to be completed in the second quarter of 2021. As it relates to the projects resulting from the Cloverleaf Acquisition, we completed the Chesapeake, Virginia expansion which totaled $24.3 million, and the North Little Rock, Arkansas expansion which totaled $18.9 million. The Cloverleaf Acquisition expansion project in Columbus, Ohio, which we have incurred $6.3 million to date, is expected to be completed during the first quarter of 2020. During the first quarter of 2019, we acquired land in conjunction with the acquisition of PortFresh in Savannah, Georgia. We are developing a new site upon this land and broke ground on the project during the second quarter of 2019. The resulting expenditures during 2019 were $41.5 million and we expect to complete construction during the second quarter of 2020. Finally, during the second quarter of 2019 we acquired land in Sydney, Australia for $45.5 million. Following December 31, 2019, it was determined that the Company would no longer be moving forward with the three developments contemplated under the previously announced letter of intent we executed with a top customer in Australia, as the scope of the projects materially changed. Under the agreement with the customer, the Company will be reimbursed for its land purchase in Sydney and related costs. The Company continues to maintain a strong relationship with the customer and is proceeding with a new expansion project in Auckland, New Zealand. We expect to break ground on this expansion during 2020 with completion during 2021. In 2018, only our Middleboro and Rochelle facilities were under construction with our Middleboro facility announcing its grand opening in August 2018. The following table sets forth our acquisitions, expansion and development capital expenditures for the years ended December 31, 2019 and 2018 (in thousands). Acquisitions, net of cash acquired and adjustments Expansion and development initiatives Information technology Total growth and expansion capital expenditures 89 Year ended December 31, 2019 2018 $ $ 1,377,220 $ 210,594 5,857 1,593,671 $ — 72,049 3,686 75,735 Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2019: Principal on mortgage notes, senior unsecured notes and term loan $ Interest on mortgage notes, senior unsecured notes and term loan (1) Sale leaseback financing obligations, including interest (2) Operating lease obligations, including interest Financing lease obligations, including interest Employee benefit obligations(3) Acquisitions(6) Growth and expansion commitments(4) Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Payments due by period 1,708,443 $ 6,750 $ 14,347 $ 737,346 $ 950,000 465,977 203,209 72,258 66,489 50,495 257,100 57,974 73,832 17,087 23,399 18,534 7,796 257,100 41,742 143,123 34,970 21,928 29,204 10,124 — 16,232 92,552 36,062 12,635 13,365 9,729 — — 156,470 115,090 14,296 5,386 22,846 — — Total (5) $ 2,881,945 $ 446,240 $ 269,928 $ 901,689 $ 1,264,088 (1) Interest payable is based on interest rates in effect at December 31, 2019. Amounts include variable-rate interest payments, which are calculated utilizing the applicable interest rates as of December 31, 2019. (2) Sale leaseback financing obligations are subject to multiple expiration dates and bear interest rates that vary from 7.00%-19.59%. For more information, refer to Note 12 of the Consolidated Financial Statements included in this Annual Report on Form 10-K. (3) Represents primarily our estimated minimum required funding for our qualified defined benefit pension plans based on actuarially determined estimates and projected future benefit payments from our unfunded postretirement plans. For additional information about our defined benefit pension plan obligations, refer to Note 20 of the Consolidated Financial Statements included in this Annual Report on Form 10-K. (4) Growth and expansion commitments reflect open commitments related to construction expansion projects expected to be completed during 2020 and 2021. (5) The table above excludes $3.5 million aggregate fair value for an interest rate swap expiring in 2024 and $2.6 million aggregate fair value for a foreign exchange forward contract with a January 31, 2020 maturity (both of which are included in ‘Accounts payable and accrued expenses’ in the accompanying Consolidated Balance Sheet as of December 31, 2019). (6) Represents the approximate USD purchase price of Nova Cold, which is $336.8 million CAD. This purchase price has been partially hedged with foreign currency forwards. Historical Cash Flows The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below. Net cash provided by operating activities Net cash used in investing activities Net cash provided by financing activities 90 Year ended December 31, 2019 2018 (In thousands) 236,189 $ (1,604,934) $ 1,395,371 $ 188,171 (125,703) 84,942 $ $ $ Operating Activities For the year ended December 31, 2019, our net cash provided by operating activities was $236.2 million, an increase of $48.0 million, or 25.5%, compared to $188.2 million for the year ended December 31, 2018. The increase is due to higher segment contribution in our same store results and as a result of our acquisitions during 2019, paired with less cash paid for interest due to the timing of payments on debt issued subsequent to December 31, 2018. This was partially offset by an increase in acquisition related expenses, bridge loan commitment fees incurred during the second quarter of 2019 and higher selling, general and administrative expenses due to the reasons discussed within results of operations. Investing Activities Our net cash used in investing activities was $1.6 billion for the year ended December 31, 2019 compared to $125.7 million for the year ended December 31, 2018. Cash used for the acquisitions of Cloverleaf and Lanier and accounted for as business combinations totaled $1.3 billion. Cash used in the acquisition of real estate was $85.2 million, which related to the asset acquisitions of PortFresh during the first quarter of 2019 and MHW during the fourth quarter of 2019. Additions to property, buildings and equipment were $217.2 million and $145.2 million for the years ended December 31, 2019 and 2018, respectively. The increase in additions to property, buildings and equipment were driven by the significant expansion and development projects in 2019. These cash outflows were partially offset by the proceeds from the sale of our investment in the China JV for $14.3 million and $2.0 million return of investment in a joint venture during 2019. Financing Activities Our net cash provided by financing activities was $1.4 billion for the year ended December 31, 2019 compared to $84.9 million for the year ended December 31, 2018. Cash provided by financing activities for the current year primarily consisted of $1.2 billion net proceeds from the April 2019 follow-on offering, $350.0 million proceeds from the issuance of our Series C senior unsecured notes in May 2019, $100.0 million in proceeds from revolving line of credit and $10.2 million in proceeds from stock options exercised. These cash inflows were partially offset by $100.0 million of repayment on revolving line of credit, $135.4 million of distributions paid, $16.5 million of repayments on lease obligations, $10.4 million of repayments on mortgage notes and notes payable, $7.1 million paid for tax withholdings remitted to authorities related to stock options exercised and $2.1 million of payments related to debt issuance costs. Net cash provided by financing activities was $84.9 million for the year ended December 31, 2018 and primarily consisted of $600.0 million in proceeds from the issuance of senior unsecured notes, $525.0 million received in connection with the issuance of our Senior Secured Term Loan A Facility, $493.6 million net proceeds from the IPO, $92.7 million in proceeds from the follow-on public offering, and $14.8 million in proceeds received from stock options exercised. These cash inflows were partially offset by $900.0 million paid to extinguish term loans, mortgage notes, and construction loans, $622.4 million to complete the early retirement of the 2010 Mortgage Loans and ANZ Loans, $13.0 million of repayments on lease obligations, $16.6 million paid for debt issuance costs associated with the issuance of our Senior Secured Term Loan A Facility, $12.7 million paid for tax withholdings remitted to authorities related to stock options exercised, and $78.5 million of quarterly dividend distributions and stub period dividend distributions paid to both preferred and common shareholders of record as of the day prior to the IPO effective date. Net cash provided by financing activities for the Operating Partnership was $1.4 billion for the year ended December 31, 2019 compared to $84.9 million of cash provided by financing activities for the year ended December 31, 2018. Cash provided by financing activities for the current period primarily consisted of $1.2 billion of cash contributed by the Parent primarily related to equity issuances, $350.0 million proceeds from the 91 issuance of our Series C senior unsecured notes in May 2019 and $100.0 million in proceeds from revolving line of credit. These cash inflows were partially offset by $135.4 million of distributions to the Parent, $2.1 million paid for debt issuance costs, and $16.5 million of repayments on lease obligations. Net cash provided by financing activities for the Operating Partnership for the year ended December 31, 2018 primarily consisted of $600.0 million received from the debt private placement, $525.0 million received in connection with the issuance of our Senior Secured Term Loan A Facility and $597.4 million of cash contributed by the Parent primarily related to equity issuances. These cash inflows were partially offset by $900.0 million paid to extinguish term loans, mortgage notes, and construction loans, $622.4 million to complete the early retirement of the 2010 CMBS and ANZ loans, $86.7 million of distributions to the Parent, $16.6 million paid for debt issuance costs, and $13.0 million of repayments on lease obligations. Withdrawal Liability from Multi-employer Plans As of December 31, 2019, we participated in seven multiemployer pension plans administered by labor unions representing approximately 26% of our employees. We make periodic contributions to these plans pursuant to the terms of our collective bargaining agreements to allow the plans to meet their pension benefit obligations. In the event that we withdraw from participation in any of the multiemployer pension plans in which we participate, the documents governing the applicable plan and applicable law could require us to make an additional contribution to the applicable plan in the amount of the unfunded vested benefits allocable to our participation in the plan, and we would have to reflect that as an expense on our Consolidated Statement of Operations and as a liability on our Consolidated Balance Sheet. Our withdrawal liability for any multiemployer pension plan would depend on the extent of the plan’s funding of vested benefits as of the year in which the withdrawal occurs, and may vary depending on the funded status of the applicable multiemployer pension plan, whether there is a mass withdrawal of all participating employers and whether any other participating employer in the applicable plan withdraws from the plan due to insolvency and is not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan. The present value of all benefits vested under each of the multiemployer plans that we participated in as of December 31, 2019 (based on the labor union’s assumptions used to fund such plan) did not, as of the last annual valuation date applicable thereto, exceed the value of the assets of such plan allocable to such vested benefits. Based on the latest information available from plan administrators, we estimate our share of the aggregate withdrawal liability for the multiemployer pension plans in which we participate could have been as much as $566.7 million as of December 31, 2019, of which we estimate that certain of our customers are contractually obligated to make indemnification payments to us for approximately $533.7 million. However, there is no guarantee that, to the extent we incurred any such withdrawal liability, we would be successful in obtaining any indemnification payments therefor. In the ordinary course of our renegotiation of collective bargaining agreements with labor unions that maintain these plans, we could agree to discontinue participation in one or more plans, and in that event we could face a withdrawal liability. Additionally, we could be treated as withdrawing from a plan if the number of our employees participating in the plan is reduced to a certain degree over certain periods of time. Inflation Our business could be impacted due to inflation. We believe, however, that we are well positioned to be able to manage our business in an inflationary environment. Certain of our expenses are subject to normal inflationary pressures and this could lead to increases in the operating costs of our properties, such as wages and benefits, insurance, real estate taxes, utility expenses, equipment repair and replacement and other operating expenses. Although to date we have been able to offset inflationary cost increases with increased operating efficiencies and the ability to increase prices in our customer contracts (many of which contain provisions for 92 inflationary price escalators), we can give no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies or increased storage or service charges. Off-Balance Sheet Arrangements As of December 31, 2019, we had no material off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 93 Critical Accounting Policies Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements and our unaudited interim condensed consolidated financial statements, each of which has been prepared in accordance with U.S. GAAP. The preparation of these historical financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For more information on our significant accounting policies, see Note 2 to our Consolidated Financial Statements included in this Annual Report on Form 10-K. The following critical accounting discussion pertains to accounting policies management believes are most critical to the portrayal of our historical financial condition and results of operations and that require significant, difficult, subjective or complex judgments. Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies. Goodwill Impairment Evaluation We perform impairment testing of goodwill as of October 1 of each year, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such events or changes in circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators and competition. Our reporting units are comprised of the following operations: U.S. warehouse, U.S. transportation, North America third-party managed, international warehouse, international third- party managed, and international transportation. We may use both qualitative and quantitative approaches when testing goodwill for impairment. For selected reporting units where we use the qualitative approach, we perform a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment. Based on that qualitative evaluation, if we determine it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, we perform a quantitative impairment test. We may also perform a quantitative evaluation periodically, even if there is no change of events or circumstances. To perform the quantitative impairment test, we compare the fair value of a reporting unit to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of the reporting unit, including goodwill, exceeds its fair value, a goodwill impairment loss is recognized in an amount equal to that excess. We generally estimate the fair value of each reporting unit using a combination of a discounted cash flow analysis and market-based valuation methodologies such as comparable public company trading values and values observed in recent business acquisitions. The estimation of the net present value of future cash flows is based upon varying economic assumptions, including significant assumptions such as revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates. These assumptions are based on risk-adjusted growth rates and discount factors accommodating conservative viewpoints that consider the full range of variability contemplated in the current and potential future economic situations. The discount rates utilized in the discounted cash flow analysis are based on the respective reporting units weighted average cost of capital, which takes into account the relative weights of each component of capital structure (equity and debt) and represents the 94 expected cost of new capital, adjusted as appropriate to consider the risk inherent in future cash flows of the respective reporting unit. The carrying value of each reporting unit includes the assets and liabilities employed in its operations, goodwill and allocations of amounts held at the business segment and corporate levels. We also assess market-based multiples of other market-participant companies, further corroborating that our discounted cash flow models reflect fair value assumptions that are appropriately aligned with market-participant valuation multiples. Historically, our reporting units have generated sufficient returns to recover the value of goodwill. The results of our 2019 impairment test indicated that the estimated fair value of each of our reporting units was substantially in excess of the corresponding carrying amount as of October 1, and no impairment of goodwill existed. Our most valuable reporting unit, U.S. warehouse, had an estimated fair value approximately 237% greater than its carrying amount as of October 1, 2019. Business Combinations From time to time, we may enter into business combinations. In accordance with ASC 805, “Business Combinations”, we generally recognize the identifiable assets acquired and the liabilities assumed at their fair values as of the date of acquisition. We measure goodwill as the excess of consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Goodwill is assigned to each reporting unit based upon the expected proportionate gross margin. The acquisition method of accounting requires us to make significant estimates and assumptions regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, land and buildings and improvements. Significant estimates and assumptions include subjective and/or complex judgments regarding items such as revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates, discount rates, customer attrition rates, economic lives and other factors, including estimating future cash flows that we expect to generate from the acquired assets. The significant assumptions impacting the fair value of the acquired real property include estimates of indirect costs and entrepreneurial profit on the transaction, which were added to the replacement cost of the acquired assets in order to estimate their fair value in the market. The acquisition method of accounting also requires us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on our financial condition and results of operations. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record future impairment charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. 95 Revenue Recognition Our primary revenue source consists of rent, storage and warehouse services revenues. Additionally, we charge transportation fees to those customers who use our transportation services, where we act as the principal in the arrangement of the services. We also 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. Revenues from storage and handling are recognized over the period consistent with the transfer of the service to the customer. Multiple contracts with a single counterparty are accounted for as separate arrangements. We recognize transportation fees and expenses on a gross basis upon delivery of products on behalf of our customers. We also recognize management fees and related expense reimbursements as revenues as we perform management services and incur the expense. New Accounting Pronouncements See Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K. 96 ITEM 7A. 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 December 31, 2019, we had $475.0 million of outstanding variable-rate debt. This consisted of our Senior Unsecured Term Loan A Facility bearing interest at one-month LIBOR plus a margin up to 1.00%. $100.0 million of this debt is hedged by an interest rate swap that effectively locks the floating LIBOR rate at 2.48%. An additional $225.0 million of this debt is hedged by an interest rate swap that effectively locks the floating LIBOR rate at 1.30%. After incorporating the effects of the interest rate swaps, our outstanding variable rate debt is $150.0 million. At December 31, 2019, one-month LIBOR was at approximately 1.80%, therefore a 100 basis point increase in market interest rates would result in an increase in interest expense to service our variable-rate debt of approximately $1.5 million. A 100 basis point decrease in market interest rates would also result in a $1.5 million decrease in interest expense to service our variable-rate debt. Foreign Currency Risk Our international revenues and expenses are generated in the currencies of the countries in which we operate, including Australia, New Zealand, Argentina and Canada. We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. When the local currencies in these countries decline relative to our reporting currency, the U.S. dollar, our consolidated revenues, contribution (NOI) margins and net investment in properties and operations outside the United States decrease. The impact of currency fluctuations on our earnings is partially mitigated by the fact that most operating and other expenses are also incurred and paid in the local currency. The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses. Due to our constantly changing currency exposure and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on our business. As a result, changes in the relation of the currency of our international operations to U.S. dollars may also affect the book value of our assets and the amount of shareholders’ equity. A 10% depreciation in the year-end functional currencies of our international operations, relative to the U.S. dollar, would have resulted in a reduction in our shareholders’ equity of approximately $7.0 million as of December 31, 2019. Our operations in Argentina are reported using highly inflationary accounting. The Argentina subsidiary’s functional currency is the Australian dollar, which is the reporting and functional currency of their immediate parent company. The entity’s statements of operations and balance sheets have been measured in Australian dollars using both current and historical exchange rates prior to translation into U.S. dollars in consolidation. As of December 31, 2019, the net monetary assets of the Argentina subsidiary were immaterial and, therefore, a 10% unfavorable change in the exchange rate would not be material. Additionally, the operating income of the Argentina subsidiary was less than 3.5% of our consolidated operating income for the years ended December 31, 2019 and 2018. For the years ended December 31, 2019 and 2018, revenues from our international operations were $274.3 million and $289.8 million, respectively, which represented 15.4% and 18.1% of our consolidated revenues, respectively. 97 Net assets in international operations were approximately $70.3 million and $69.7 million as of December 31, 2019 and 2018, respectively. The effect of a change in foreign exchange rates on our net investment in foreign subsidiaries is reflected in the Accumulated other comprehensive loss component of equity of our Consolidated Financial Statements included in this Annual Report on Form 10-K. We attempt to mitigate a portion of the risk of currency fluctuation by financing certain of our foreign investments in local currency denominations, effectively providing a natural hedge. However, given the volatility of currency exchange rates, there can be no assurance that this strategy will be effective. The Company has entered into cross-currency swaps on its foreign denominated intercompany loans to hedge the cash flow variability from the impact of changes in foreign currency on the interest payments on the intercompany loan as well as the final principal payment. Since the critical terms of the derivatives match the critical terms of the intercompany loans, the hedge is considered perfectly effective. All changes in fair value will be recorded to Accumulated other comprehensive loss. In November 2019, we entered into an agreement to acquire Nova Cold for a purchase price of CAD $336.8 million, which subsequently closed on January 2, 2020. As of December 31, 2019, we had an outstanding forward contract to purchase approximately CAD $217.0 million and sell U.S. $165.0 million with a January 2, 2020 maturity, to hedge a portion of our exposure to foreign exchange rate movement on the purchase price of Nova Cold. The remainder of the purchase price was funded utilizing a spot foreign exchange forward contract and a draw on our 2018 Senior Unsecured Revolving Credit Facility denominated in Canadian dollars. Additionally, as of December 31, 2019, we had an outstanding forward contract to sell approximately CAD $217.0 million and purchase U.S. $165.0 million with a January 31, 2020 maturity, to hedge the return of capital to our parent company subsequent to the newly created Canadian entity entering into Canadian denominated debt to finance our foreign investment in the subsidiary. On January 27, 2020, the forward contract was extended to February 28, 2020. At the time of settlement, we either pay or receive the net settlement amount from any forward contract and recognize this amount in “Foreign currency exchange gain (loss), net” in the accompanying Statement of Operations. We have not designated either of these forward contracts as hedges as of December 31, 2019. As a result, we recorded unrealized foreign exchange gain or loss for the mark-to- market valuation of these forward contracts for the year ended December 31, 2019, aggregating to an amount less than $0.1 million recorded in “Foreign currency exchange gain (loss), net” in the accompanying Statement of Operations. ITEM 8. Financial Statements and Supplementary Data The independent registered public accounting firm’s reports, consolidated financial statements and schedule listed in the “Index to Financial Statements” on page F-1 of this Annual Report are filed as part of this report and incorporated herein by reference. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 98 ITEM 9A. Controls and Procedures Management’s Report on Internal Control over Financial Reporting (Americold Realty Trust) Management is responsible for the preparation and fair presentation of the consolidated financial statements included in this annual report. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and reflect management’s judgments and estimates concerning events and transactions that are accounted for or disclosed. Management is also responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Management recognizes that there are inherent limitations in the effectiveness of any internal control and effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Additionally, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). The scope of our efforts to comply with Section 404 of the Sarbanes-Oxley Act with respect to 2019 included all of our operations other than those we acquired in 2019 as described in Note 1 to the consolidated financial statements. In accordance with the SEC’s published guidance, because we acquired these operations during the year, we excluded these operations from our efforts to comply with Section 404 with respect to 2019. These acquired businesses constituted 36% of total assets as of December 31, 2019 and 10% of revenue for the year then ended. Of these acquisitions, the acquisition of Cloverleaf Cold Storage represented 32% of total assets as of December 31, 2019 and 9% of revenue for the year then ended. The SEC’s published guidance specifies that the period in which management may omit an assessment of an acquired business’s internal control over financial reporting from its assessment of the Company’s internal control may not extend beyond one year from the date of acquisition. Based on our assessment, which as discussed herein excluded the operations of the businesses acquired, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2019. The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report. Changes in Internal Control over Financial Reporting During the year ended December 31, 2019, we adopted ASU 2016-02 effective January 1, 2019. In connection with the adoption of ASU 2016-02, we implemented a new lease accounting system and also redesigned certain processes and controls pertaining to our lease portfolio. There were no other changes 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 year ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Evaluation of Disclosure Controls and Procedures (Americold Realty Operating Partnership, L.P.) Management is responsible for the preparation and fair presentation of the consolidated financial statements included in this annual report. The consolidated financial statements have been prepared in conformity with U.S. 99 generally accepted accounting principles and reflect management’s judgments and estimates concerning events and transactions that are accounted for or disclosed. Management is also responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Management recognizes that there are inherent limitations in the effectiveness of any internal control and effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Additionally, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). The scope of our efforts to comply with Section 404 of the Sarbanes-Oxley Act with respect to 2019 included all of our operations other than those we acquired in 2019 as described in Note 1 to the consolidated financial statements. In accordance with the SEC’s published guidance, because we acquired these operations during the year, we excluded these operations from our efforts to comply with Section 404 with respect to 2019. These acquired businesses constituted 36% of total assets as of December 31, 2019 and 10% of revenue for the year then ended. Of these acquisitions, the acquisition of Cloverleaf Cold Storage represented 32% of total assets as of December 31, 2019 and 9% of revenue for the year then ended. The SEC’s published guidance specifies that the period in which management may omit an assessment of an acquired business’s internal control over financial reporting from its assessment of the Company’s internal control may not extend beyond one year from the date of acquisition. Based on our assessment, which as discussed herein excluded the operations of the businesses acquired, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2019. Changes in Internal Control over Financial Reporting During the year ended December 31, 2019, we adopted ASU 2016-02 effective January 1, 2019. In connection with the adoption of ASU 2016-02, we implemented a new lease accounting system and also redesigned certain processes and controls pertaining to our lease portfolio. There were no other changes 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 year ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 100 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Trustees Americold Realty Trust and Subsidiaries Opinion on Internal Control over Financial Reporting We have audited Americold Realty Trust and subsidiaries’ internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Americold Realty Trust and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of businesses acquired during the year ended December 31, 2019, which are included in Note 1 of the 2019 consolidated financial statements of the Company and constituted 36% of total assets as of December 31, 2019 and 10% of revenue for the year then ended. Of these acquisitions, the acquisition of Cloverleaf Cold Storage represented 32% of total assets as of December 31, 2019 and 9% of revenue for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the businesses acquired during the year ended December 31, 2019. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, shareholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the index at Item 15(a) and our report dated March 2, 2020 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. 101 Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia March 2, 2020 102 ITEM 9C. Other Information None. 103 PART III ITEM 10. Directors, Executive Officers and Corporate Governance The information required by Item 10 will be included in the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of Americold Realty Trust and is incorporated herein by reference. ITEM 11. Executive Compensation The information required by Item 11 will be included in the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of Americold Realty Trust and is incorporated herein by reference. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 12 will be included in the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of Americold Realty Trust and is incorporated herein by reference. ITEM 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 will be included in the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of Americold Realty Trust and is incorporated herein by reference. ITEM 14. Principal Accounting Fees and Services The information required by Item 14 will be included in the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of Americold Realty Trust and is incorporated herein by reference. 104 PART IV ITEM 15. Exhibits, Financial Statements and Schedules Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries The following documents are filed as a part of this Annual Report on Form 10-K: a.Financial Statements and Schedules Financial Statements: Americold Realty Trust and Subsidiaries Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Shareholders’ Equity (Deficit) Consolidated Statements of Cash Flows Americold Realty Operating Partnership, L.P. and Subsidiaries Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Partners’ Capital Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements of Americold Realty Trust and Subsidiaries and Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation Page F-1 F-5 F-6 F-7 F-8 F-10 F-4 F-12 F-13 F-14 F-15 F-16 F-18 F-103 b. Exhibits Exhibit No. Description EXHIBIT INDEX 2.1 3.1 3.2 3.3 3.4 Equity Purchase Agreement, dated as of April 16, 2019 (incorporated by reference to Exhibit 2.1 to Americold Realty Trust’s Current Report on Form 8-K filed on April 16, 2019 (File No. 001-34723)) Amended and Restated Declaration of Trust of Americold Realty Trust, dated as of January 22, 2018 (incorporated by reference to Exhibit 3.1 to Americold Realty Trust’s Current Report on Form 8-K filed on January 23, 2018 (File No. 001-34723)) Amended and Restated Bylaws of Americold Realty Trust (incorporated by reference to Exhibit 3.1 to Americold Realty Trust’s Current Report on Form 8-K filed on May 23, 2019 (File No. 001-34723)) Certificate of Limited Partnership of Americold Realty Operating Partnership, L.P. (incorporated by reference to Exhibit 3.3 to Americold Realty’s Annual Report on Form 10-K filed on February 26, 2019 (File No. 001-34723)) Amended and Restated Limited Partnership Agreement of Americold Realty Operating Partnership, L.P. (incorporated by reference to Exhibit 3.1 to Americold Realty Trust’s Current Report on Form 8-K filed on July 2, 2019 (File No. 001-34723)) 4.1 Description of shares of Beneficial Interest 10.1 10.2 Credit Agreement, dated as of December 4, 2018, by and among the Operating Partnership, the Company, the Several Lenders and Letter of Credit Issuers from Time to Time Parties Thereto and Bank of America, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Report on Form 8-K filed on December 5, 2018 (File No. 001-34723)) Consent and First Amendment to Credit Agreement, dated as of December 23, 2019, by and among the Company, the Operating Partnership and the guarantors, lenders and letter of credit issues named therein (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Form on Form 8-K filed on January 9, 2020 (File No. 001-34723)) 10.3 Note and Guaranty Agreement, dated as of December 4, 2018, by and among the Operating Partnership, the Company and the purchasers named therein (incorporated by reference to Exhibit 10.2 to Americold Realty Trust’s Current Report on Form 8-K filed on December 5, 2018 (File No. 001-34723)) 10.4 Note and Guaranty Agreement, dated as of May 7, 2019, by and among the Operating Partnership, the Company and the purchasers named therein (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Report on Form 8-K filed on May 8, 2019 (File No. 001-34723)) 10.5# Employment Agreement, dated as of January 23, 2018, by and between AmeriCold Logistics, LLC and Fred Boehler (incorporated by reference to Exhibit 10.3 to Americold Realty Trust’s Current Report on Form 8-K filed on January 23, 2018 (Registration No. 333-221560)) 10.6# Employment Agreement, dated as of January 23, 2018, by and between AmeriCold Logistics, LLC and Marc Smernoff (incorporated by reference to Exhibit 10.4 to Americold Realty Trust’s Current Report on Form 8-K filed on January 23, 2018 (Registration No. 333-221560)) 10.7# Employment Agreement, dated as of January 23, 2018, by and between AmeriCold Logistics, LLC and Thomas Novosel (incorporated by reference to Exhibit 10.5 to Americold Realty Trust’s Current Report on Form 8-K filed on January 23, 2018 (Registration No. 333-221560)) 10.8# 10.9# 10.10# 10.11# 10.12# 10.13# 10.14# Letter Agreement, dated May 11, 2018, by and between Americold Realty Trust and Marc Smernoff (incorporated by reference to Exhibit 10.5 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 15, 2018 (File No. 001-34723)) Employment Agreement, dated as of September 11, 2018, by and between AmeriCold Logistics, LLC and Carlos Rodriguez (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Report on Form 8-K/A filed on September 11, 2018 (File No. 001-34723) Employment Agreement, dated as of March 26, 2018, by and between AmeriCold Logistics, LLC and James Snyder (incorporated by reference to Exhibit 10.10 to Americold Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 27, 2019 (File No. 001-34723)) Employment Agreement, dated as of September 25, 2018, by and between AmeriCold Logistics, LLC and James Harron (incorporated by reference to Exhibit 10.11 to Americold Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 27, 2019 (File No. 001- 34723)) Employment Agreement, dated as of September 13, 2018, by and between AmeriCold Logistics, LLC and David Stuver (incorporated by reference to Exhibit 10.10 to Americold Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 27, 2019 (File No. 001- 34723)) Employment Agreement, dated January 7, 2020, by and between Americold Realty Trust and Robert Chambers (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Report on Form 8-K filed on January 10, 2020 (File No. 001-34723)) Separation Agreement effective as of February 19, 2019 by and between AmeriCold Logistics, LLC and Thomas Musgrave (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Form on Form 8-K/A filed on February 22, 2019 (File No. 001-34723)) 106 10.15# Separation Agreement effective as of February 24, 2019 by and between AmeriCold Logistics, LLC and Andrea Darweesh (incorporated by reference to Exhibit 10.1 to Americold Realty Trust’s Current Form on Form 8-K filed on February 25, 2019 (File No. 001-34723)) 10.16 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.16 to Americold Realty Trust’s Registration Statement on Form S-11/A, filed on December 19, 2017 (Registration No. 333-221560)) 10.17 Americold Realty Trust 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.21 to Americold Realty Trust’s Registration Statement on Form S-11/A, filed on January 12, 2018 (Registration No. 333-221560)) 10.18 Americold Realty Trust 2010 Equity Incentive Plan (incorporated by reference to Exhibit 10.14 to Americold Realty Trust’s Registration Statement on Form S-11/A, filed on December 20, 2017 (Registration No. 333-221560)) 10.19 Americold Realty Trust 2017 Equity Incentive Plan, effective as of January 23, 2018 (incorporated by reference to Exhibit 10.8 to Americold Realty Trust’s Current Report on Form 8-K filed on January 23, 2018 (Registration No. 333-221560)) 10.20 Form of Annual Trustee Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 15, 2018 (File No. 001-34723)) 10.21 Form of Retention Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to Americold Realty Trust’s Quarterly Report on Form 10- Q for the quarter ended March 31, 2018, filed on May 15, 2018 (File No. 001-34723)) 10.22 Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 15, 2018 (File No. 001-34723)) 10.23 10.24 10.25 Form of Annual Trustee OP Unit Award Agreement (incorporated by referenced to Exhibit 10.1 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed on August 9, 2019 (File No. 001-34723)) Form of Retention OP Unit Award Agreement (incorporated by referenced to Exhibit 10.2 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed on August 9, 2019 (File No. 001-34723)) Form of Performance OP Unit Award Agreement (incorporated by referenced to Exhibit 10.3 to Americold Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed on August 9, 2019 (File No. 001-34723)) 10.26 Form of Performance Restricted Stock Unit Agreement 21.1 List of Subsidiaries 23.1 Consent of Ernst & Young LLP 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 31.3 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Operating Partnership, L.P. 31.4 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Americold Realty Operating Partnership, L.P. 32.1 32.2 32.3 32.4 95.1 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 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 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 Operating Partnership, L.P. 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 Operating Partnership, L.P. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. # This document has been identified as a management contract or compensatory plan or arrangement. Certain agreements and other documents filed as exhibits to this Annual Report on Form 10-K contain representations and warranties that the parties thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such agreements and other documents and that may not be reflected in such agreements and other documents. In addition, these representations and warranties may be intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such representations and warranties may have changed since the date of such agreements and other documents. 107 ITEM 16. Form 10-K Summary Not Applicable. Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Trustees Americold Realty Trust and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Americold Realty Trust and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 2, 2020 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F-1 Accounting for the Acquisition of Cloverleaf Cold Storage Description of the Matter As more fully described in Note 3 to the consolidated financial statements, the Company acquired Cloverleaf Cold Storage (“Cloverleaf”) in May 2019 for aggregate cash consideration of $1.2 billion. The acquisition was accounted for as a business combination and, as such, the Company preliminarily measured the assets acquired and liabilities assumed at their acquisition-date fair values, including preliminary fair values of the acquired land, buildings and improvements, and the customer relationships intangible asset of $60.5 million, $668.2 million, and $250.3 million, respectively. As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding the assets and liabilities that existed at the acquisition date. Auditing management's accounting for the acquisition of Cloverleaf involved especially subjective judgments and complex analyses related to the preliminary fair value estimates of the acquired land, buildings and improvements, and customer relationships intangible asset due to the significant estimation required in determining fair value. The estimate of fair value of the acquired land and buildings and improvements is sensitive to changes in assumptions of comparable transactions in the market. The estimate of fair value of the acquired customer relationships intangible asset is sensitive to changes in assumptions impacting the net present value of future cash flows expected from the future performance of the acquired business. The significant assumptions impacting the preliminary fair value of the acquired land and buildings and improvements included 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, and the significant assumptions used to estimate the fair value of the acquired customer relationships intangible asset include revenue growth rates, customer attrition rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates, and discount rates, which are affected by expectations about future market and economic conditions. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness over the Company's controls related to the accounting for the Cloverleaf acquisition process. For example, we tested controls over the recognition and measurement of the acquired land, buildings and improvements and customer relationships intangible asset, including the Company’s controls over the valuation approach and method selected, and the significant assumptions used in the fair value measurement described above. To test the fair value of the acquired land and buildings and improvements, our audit procedures, which involved the assistance of our valuation specialists, included evaluating the Company's valuation methods and related significant assumptions used as well as testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions used to estimate the concluded fair value of the acquired land and buildings and improvements to recent, historical transactions within the industry. To test the fair value of the acquired customer relationships intangible asset, our audit procedures included evaluating the Company's valuation method and significant assumptions used and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We compared the significant assumptions used by management to current economic trends, where applicable, the historical results of the acquired business, and other relevant factors. We involved our valuation specialists to assist with our evaluation of the valuation method and certain significant assumptions, including the discount rate used in determining the fair value of the customer relationships intangible asset. F-2 Test of Goodwill for Impairment Description of the Matter As more fully described in Note 2 to the consolidated financial statements, the Company evaluates the carrying value of goodwill each year as of October 1 and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit to which goodwill has been allocated below its carrying amount. The carrying value of the Company’s goodwill balance totaled $318.5 million as of December 31, 2019. How We Addressed the Matter in Our Audit Auditing management’s goodwill impairment test involved especially subjective judgments due to the significant estimation required in determining the fair value of the reporting units to which goodwill has been allocated. In particular, the estimates of fair value are sensitive to changes in assumptions impacting the net present value of future cash flows attributable to the reporting units, including revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates, and discount rates, which are affected by expectations about future market and economic conditions. We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process. For example, we tested controls over the estimation of the fair values of the reporting units to which goodwill has been allocated, including the Company’s controls over the valuation models, the mathematical accuracy of the valuation models and development of underlying assumptions used to determine the fair values of the reporting units. We also tested controls over management’s review of the reconciliation of the aggregate estimated fair value of the reporting units to the market capitalization of the Company. To test the estimated fair values of the Company’s reporting units, our audit procedures included, among others, assessing the valuation methodology and the underlying data used by the Company in its analysis, including testing the significant assumptions discussed above. We compared the significant assumptions used by management to current economic trends, historical results, and other relevant factors. We assessed the historical accuracy of management’s assumptions of future expected net cash flows and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair values of the reporting units that would result from changes in the assumptions. We involved valuation specialists to assist in our evaluation of the valuation methodology and the significant assumptions, including the discount rate used in determining the fair values of the reporting units. We also tested the reconciliation of the aggregate estimated fair value of the reporting units to the market capitalization of the Company. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2010. Atlanta, Georgia March 2, 2020 F-3 Report of Independent Registered Public Accounting Firm The General and Limited Partners Americold Realty Operating Partnership, L.P. and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Americold Realty Operating Partnership, L.P. and subsidiaries (the Partnership) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, Partners’ capital, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Partnership’s auditor since 2010. Atlanta, Georgia March 2, 2020 F-4 Americold Realty Trust and Subsidiaries Consolidated Balance Sheets (In thousands, except shares and per share amounts) Assets Property, buildings and equipment: Land Buildings and improvements Machinery and equipment Assets under construction Accumulated depreciation and depletion Property, buildings and equipment – net Operating lease right-of-use assets Accumulated depreciation – operating leases Operating leases – net Financing leases: Buildings and improvements Machinery and equipment Accumulated depreciation – financing leases Financing leases – net Cash and cash equivalents Restricted cash Accounts receivable – net of allowance of $6,927 and $5,706 at December 31, 2019 and 2018, respectively Identifiable intangible assets – net Goodwill Investments in partially owned entities Other assets Total assets Liabilities and shareholders’ equity Liabilities: Borrowings under revolving line of credit Accounts payable and accrued expenses Mortgage notes, senior unsecured notes and term loan – net of deferred financing costs of $12,996 and $13,943 in the aggregate, at December 31, 2019 and 2018, respectively Sale-leaseback financing obligations Financing lease obligations Operating lease obligations Unearned revenue Pension and postretirement benefits Deferred tax liability – net Multiemployer pension plan withdrawal liability Total liabilities Shareholders’ equity: Common shares of beneficial interest, $0.01 par value – authorized 250,000,000 shares; 191,799,909 and 148,234,959 issued and outstanding at December 31, 2019 and 2018, respectively Paid-in capital Accumulated deficit and distributions in excess of net earnings Accumulated other comprehensive loss Total shareholders’ equity Total liabilities and shareholders’ equity December 31, 2019 2018 $ 526,226 $ 2,696,732 817,617 108,639 4,149,214 (1,216,553) 2,932,661 385,232 1,849,749 577,175 85,983 2,898,139 (1,097,624) 1,800,515 77,723 (18,110) 59,613 11,227 76,811 88,038 (29,697) 58,341 234,303 6,310 214,842 284,758 318,483 — 61,372 — — — 11,227 49,276 60,503 (21,317) 39,186 208,078 6,019 194,279 25,056 186,095 14,541 58,659 $ $ 4,170,683 $ 2,532,428 — $ 350,963 — 253,080 1,695,447 115,759 58,170 62,342 16,423 12,706 17,119 8,736 1,351,014 118,920 40,787 — 18,625 16,317 17,992 8,938 2,337,665 1,825,673 1,918 1,482 2,582,087 1,356,133 (736,861) (14,126) 1,833,018 (638,345) (12,515) 706,755 $ 4,170,683 $ 2,532,428 See accompanying notes to consolidated financial statements. F-5 Americold Realty Trust and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Revenues: Rent, storage and warehouse services Third-party managed services Transportation services Other Total revenues Operating expenses: Rent, storage and warehouse services cost of operations Third-party managed services cost of operations Transportation services cost of operations Cost of operations related to other revenues Depreciation, depletion and amortization Selling, general and administrative Acquisition, litigation and other Impairment of long-lived assets Loss (gain) from sale of real estate, net Total operating expenses Operating income Other (expense) income: Interest expense Interest income Bridge loan commitment fees Loss on debt extinguishment, modifications and termination of derivative instruments Foreign currency exchange gain (loss), net Other expense, net Loss from partially owned entities Gain from sale of partially owned entities Impairment of partially owned entities Income before income tax benefit (expense) Income tax benefit (expense): Current Deferred Total income tax benefit (expense) Net income (loss) attributable to Americold Realty Trust Less distributions on preferred shares of beneficial interest - Series A Less distributions on preferred shares of beneficial interest - Series B Less accretion on preferred shares of beneficial interest – Series B Net income (loss) attributable to common shares of beneficial interest Weighted average common shares outstanding – basic Weighted average common shares outstanding – diluted Net income (loss) per common share of beneficial interest - basic Net income (loss) per common share of beneficial interest - diluted Distributions declared per common share of beneficial interest Years Ended December 31, 2019 2018 2017 $ 1,377,217 $ 1,176,912 $ 1,145,662 252,939 144,844 8,705 259,034 158,790 8,899 242,189 146,070 9,666 1,783,705 1,603,635 1,543,587 929,626 241,178 126,777 7,867 163,348 129,310 40,614 13,485 34 802,378 244,274 143,055 8,279 117,653 110,825 3,935 747 (7,471) 797,334 229,364 133,120 9,664 116,741 99,616 11,329 9,473 (43) 1,652,239 1,423,675 1,406,598 131,466 179,960 136,989 (94,408) 6,286 (2,665) — 10 (1,870) (111) 4,297 — (93,312) 3,996 — (47,559) 2,882 (532) (1,069) — — 43,005 44,366 (5,544) 10,701 467 3,152 5,157 3,619 48,162 $ 47,985 $ — — — (1) (1,817) — 48,162 $ 46,167 $ 179,598 183,950 141,415 144,338 0.26 $ 0.26 $ 0.31 $ 0.31 $ (114,898) 1,074 — (986) (3,591) (1,944) (1,363) — (6,496) 8,785 (13,051) 3,658 (9,393) (608) (16) (28,436) (867) (29,927) 70,022 70,022 (0.43) (0.43) 0.82 $ 0.74 $ 0.29 $ $ $ $ $ See accompanying notes to consolidated financial statements. F-6 Americold Realty Trust and Subsidiaries Consolidated Statements of Comprehensive Income (In thousands) Years Ended December 31, 2019 2018 2017 Net income (loss) attributable to Americold Realty Trust $ 48,162 $ 47,985 $ (608) Other comprehensive (loss) income - net of tax: Adjustment to accrued pension liability Change in unrealized net (loss) gain on foreign currency Unrealized (loss) gain on cash flow hedge Other comprehensive (loss) income attributable to Americold Realty Trust 3,269 (3,388) (1,492) (1,611) (901) (11,640) 256 (12,285) 5,754 4,444 116 10,314 Total comprehensive income $ 46,551 $ 35,700 $ 9,706 See accompanying notes to consolidated financial statements. F-7 Americold Realty Trust and Subsidiaries Consolidated Statements of Shareholders’ Equity (Deficit) (In thousands, except shares) Balance - December 31, 2016 Net loss Other comprehensive income Distribution on preferred shares of beneficial interest - Series A Distributions on preferred shares of beneficial interest - Series B Distributions on common shares Accretion on preferred shares of beneficial interest - Series B Share-based compensation expense (Stock Options and Restricted Stock Units) Balance - December 31, 2017 Net income Other comprehensive loss Distribution on preferred shares of beneficial interest - Series A Distributions on preferred shares of beneficial interest - Series B Distributions on common shares Share-based compensation expense (Stock Options and Restricted Stock Units) Share-based compensation expense (modification of Restricted Stock Units) Common share issuance related to share-based payment plans, net of shares withheld for employee taxes Warrants exercise Issuance of common shares Conversion of mezzanine Series B Preferred shares Other Balance - December 31, 2018 Preferred Shares of Beneficial Interest Common Shares of Series A Beneficial Interest Number of Shares Par Value Number of Shares Par Value Paid-in Capital Accumulated Deficit and Distributions in Excess of Net Earnings Accumulated Other Comprehensive (Loss) Total 125 $ — 69,370,609 $ 694 $ 392,591 $ (532,196) $ (10,544) $ (149,455) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (867) (608) — (16) (28,436) (20,214) — 2,358 – — (608) 10,314 10,314 — — — — — (16) (28,436) (20,214) (867) 2,358 125 $ — 69,370,609 $ 694 $ 394,082 $ (581,470) $ (230) $ (186,924) — — (125) — — — — — — — — — — — — — — — — — — — — — — — — 1,847,274 — 6,426,818 — 37,350,000 — 33,240,258 — — — — — — — — — 18 64 374 332 — — — (133) — — 8,556 2,042 2,649 (64) 576,964 372,459 47,985 — (1) (1,817) (104,976) — — — — — — — (9,492) — — — — — — — — — 47,985 (9,492) (134) (1,817) (104,976) 8,556 2,042 2,667 — 577,338 372,791 (422) 1,934 (2,793) (1,281) — $ — 148,234,959 $ 1,482 $1,356,133 $ (638,345) $ (12,515) $ 706,755 F-8 Americold Realty Trust and Subsidiaries Consolidated Statements of Shareholders’ Equity (Deficit) (Continued) (In thousands, except shares) Balance - December 31, 2018 Net income Other comprehensive loss Distributions on common shares Share-based compensation expense (Stock Options and Restricted Stock Units) Share-based compensation expense (modification of Restricted Stock Units) Common share issuance related to share-based payment plans, net of shares withheld for employee taxes Issuance of common shares Other Balance - December 31, 2019 See accompanying notes to consolidated financial statements. Preferred Shares of Beneficial Interest Common Shares of Series A Beneficial Interest Number of Shares Par Value Number of Shares Par Value Paid-in Capital Accumulated Deficit and Distributions in Excess of Net Earnings Accumulated Other Comprehensive (Loss) Income Total — $ — 148,234,959 $ 1,482 $1,356,133 $ (638,345) $ (12,515) $ 706,755 — — — — — — — — — — — — — — — — — — — 1,502,450 — — — — — 15 — — — 48,162 — (146,590) 12,822 3,044 3,461 — — — — — 42,062,500 421 1,206,627 — — — — (88) — (1,611) — — — — 48,162 (1,611) (146,590) 12,822 3,044 3,476 — 1,207,048 — (88) — $ — 191,799,909 $ 1,918 $2,582,087 $ (736,861) $ (14,126) $ 1,833,018 F-9 Americold Realty Trust and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Operating activities: Net income (loss) attributable to Americold Realty Trust $ 48,162 $ 47,985 $ (608) Years Ended December 31, 2019 2018 2017 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion and amortization Amortization of deferred financing costs and pension withdrawal liability Amortization of above/below market leases Loss on debt extinguishment and modification, non-cash Foreign exchange (gain) loss Loss from and impairment of investments in partially owned entities Gain from sale of partially owned entities Share-based compensation expense (Stock Options and Restricted Stock Units) Share-based compensation expense (Modification of Restricted Stock Units) Deferred tax benefit Loss (gain) from sale of real estate Loss (gain) on other asset disposals Impairment of long-lived assets and inventory Multi-employer pension plan withdrawal expense Provision for doubtful accounts receivable Changes in operating assets and liabilities: Accounts receivable Accounts payable and accrued expenses Other Net cash provided by operating activities Investing activities: Return of investment in joint venture Proceeds from sale of investments in partially owned entities Proceeds from sale of property, buildings and equipment Business combinations, net of cash acquired Acquisitions of property, buildings and equipment, net of cash acquired Additions to property, buildings and equipment Net cash used in investing activities Financing activities: Distributions paid on beneficial interest shares – preferred – Series A Distributions paid on beneficial interest shares – preferred – Series B Distributions paid on common shares Proceeds from revolving line of credit Repayment of revolving line of credit Proceeds from stock options exercised Tax withholdings related to net share settlements of certain stock awards Payment of underwriters’ costs Reimbursement of underwriters’ costs Repayment of sale-leaseback financing obligations Repayment of financing lease obligations Payment of debt issuance costs Repayment of term loans, mortgage notes, notes payable and construction loans Proceeds from senior unsecured notes Proceeds from term loans Proceeds from construction loans Net proceeds from initial and follow-on public offerings Net cash provided by (used in) financing activities Net increase in cash, cash equivalents and restricted cash 163,348 6,028 151 — (10) 111 (4,297) 12,822 3,044 (10,701) 34 870 13,485 — 1,218 (3,681) 841 4,764 117,653 6,177 151 28,446 (2,882) 1,069 — 8,639 2,042 (3,152) (7,471) (152) 747 — 2,324 (1,940) (5,219) (6,246) 236,189 188,171 116,741 8,604 151 400 3,591 7,859 — 2,358 — (3,658) (43) (107) 11,581 9,134 1,229 1,597 18,202 (13,704) 163,327 — — 2,000 14,250 1,151 (1,319,905) (85,216) (217,214) (1,604,934) — — (135,443) 100,000 (100,000) 10,204 (7,063) — — (3,161) (13,339) (2,062) (10,392) 350,000 — — 1,206,627 1,395,371 26,626 — — 19,513 10,163 — — (145,216) (125,703) (134) (1,817) (76,523) — — 14,842 (12,680) (8,205) 8,952 (2,595) (10,360) (16,563) (1,522,347) 600,000 525,000 1,097 586,275 84,942 147,410 — — (148,994) (138,831) (16) (28,436) (20,214) 34,000 (62,000) — — — — (2,100) (8,429) (4,212) (56,868) — 110,000 19,671 — (18,604) 5,892 Effect of foreign currency translation on cash, cash equivalents and restricted cash (110) (3,276) 1,141 Cash, cash equivalents and restricted cash: Beginning of period End of period 214,097 69,963 $ 240,613 $ 214,097 $ 62,930 69,963 F-10 Americold Realty Trust and Subsidiaries Consolidated Statements of Cash Flows (Continued) (In thousands) Supplemental disclosures of cash flows information: Acquisition of fixed assets under financing lease obligations Acquisition of fixed assets under operating lease obligations Interest paid – net of amounts capitalized Income taxes paid – net of refunds Acquisition of property, buildings and equipment on accrual $ $ 30,416 $ 13,290 $ 12,492 68,016 2,207 — 85,595 5,509 51,335 $ 18,799 $ 18,614 — 106,557 11,854 20,942 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the ending cash, cash equivalents and restricted cash balances above: Cash and cash equivalents Restricted cash Total cash, cash equivalents and restricted cash Allocation of purchase price of property, buildings and equipment to: Land Building and improvements Machinery and equipment Operating and finance lease right-of-use assets Assembled workforce Cash and cash equivalents Other assets and liabilities, net Operating and finance lease obligations Cash paid for acquisition of property, buildings and equipment Allocation of purchase price to business combinations: Land Building and improvements Machinery and equipment Assets under construction Operating and finance lease right-of-use assets Cash and cash equivalents Restricted cash Accounts receivable Goodwill Acquired identifiable intangibles: Customer relationships Trade names and trademarks Other assets Accounts payable and accrued expenses Notes payable Operating and finance lease obligations Unearned revenue Deferred tax liability Total consideration As of December 31, 2019 2018 2017 $ $ 234,303 $ 208,078 $ 6,310 6,019 240,613 $ 214,097 $ 48,873 21,090 69,963 As of December 31, 2019 $ $ 23,439 41,913 19,027 4,620 854 1,594 (17) (4,620) 86,810 As of December 31, 2019 $ 65,074 706,795 162,389 16,974 1,336 4,977 526 22,959 132,371 266,633 1,623 7,127 (45,000) (3,878) (1,336) (3,536) (9,626) $ 1,325,408 See accompanying notes to consolidated financial statements. F-11 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Balance Sheets (In thousands, except shares and per share amounts) Assets Property, buildings and equipment: Land Buildings and improvements Machinery and equipment Assets under construction Accumulated depreciation and depletion Property, buildings and equipment – net Operating lease right-of-use assets Accumulated depreciation – operating leases Operating leases – net Financing leases: Buildings and improvements Machinery and equipment Accumulated depreciation – financing leases Financing leases – net Cash and cash equivalents Restricted cash Accounts receivable – net of allowance of $6,927 and $5,706 at December 31, 2019 and 2018, respectively Identifiable intangible assets – net Goodwill Investments in partially owned entities Other assets Total assets Liabilities and partners’ capital Liabilities: Borrowings under revolving line of credit Accounts payable and accrued expenses Mortgage notes, senior unsecured notes and term loan – net of deferred financing costs of $12,996 and $13,943 in the aggregate, at December 31, 2019 and 2018, respectively Sale-leaseback financing obligations Financing lease obligations Operating lease obligations Unearned revenue Pension and postretirement benefits Deferred tax liability – net Multiemployer pension plan withdrawal liability Total liabilities Partners’ capital: General partner – 189,881,910 and 146,752,609 units issued and outstanding as of December 31, 2019 and 2018, respectively Limited partner – 1,917,999 and 1,482,350 units issued and outstanding as of December 31, 2019 and 2018, respectively Accumulated other comprehensive loss Total partners’ capital Total liabilities and partners’ capital December 31, 2019 2018 $ 526,226 $ 2,696,732 817,617 108,639 4,149,214 (1,216,553) 2,932,661 77,723 (18,110) 59,613 11,227 76,811 88,038 (29,697) 58,341 234,303 6,310 214,842 284,758 318,483 — 61,372 385,232 1,849,749 577,175 85,983 2,898,139 (1,097,624) 1,800,515 — — — 11,227 49,276 60,503 (21,317) 39,186 208,078 6,019 194,279 25,056 186,095 14,541 58,659 $ $ 4,170,683 $ 2,532,428 — $ 350,963 — 253,080 1,695,447 115,759 58,170 62,342 16,423 12,706 17,119 8,736 1,351,014 118,920 40,787 — 18,625 16,317 17,992 8,938 2,337,665 1,825,673 1,828,673 18,471 (14,126) 1,833,018 712,078 7,192 (12,515) 706,755 $ 4,170,683 $ 2,532,428 See accompanying notes to consolidated financial statements. F-12 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Revenues: Rent, storage and warehouse services Third-party managed services Transportation services Other Total revenues Operating expenses: Rent, storage and warehouse services cost of operations Third-party managed services cost of operations Transportation services cost of operations Cost of operations related to other revenues Depreciation, depletion and amortization Selling, general and administrative Acquisition, litigation and other Impairment of long-lived assets Loss (gain) from sale of real estate, net Total operating expenses Operating income Other (expense) income: Interest expense Interest income Bridge loan commitment fees Loss on debt extinguishment, modifications and termination of derivative instruments Foreign currency exchange gain (loss), net Other expense, net Loss from partially owned entities Gain from sale of partially owned entities Impairment of partially owned entities Income before income tax benefit (expense) Income tax benefit (expense): Current Deferred Total income tax benefit (expense) Net income (loss) attributable to the Partnership General partners’ interest in net income (loss) attributable to unitholders Limited partners’ interest in net income (loss) attributable to unitholders General partner weighted average units outstanding Limited partner weighted average units outstanding General partners’ net income (loss) per unit Limited partners’ net income (loss) per unit General partners’ distributions declared per unit Years Ended December 31, 2019 2018 2017 $ 1,377,217 $ 1,176,912 $ 1,145,662 252,939 144,844 8,705 259,034 158,790 8,899 242,189 146,070 9,666 1,783,705 1,603,635 1,543,587 929,626 241,178 126,777 7,867 163,348 129,310 40,614 13,485 34 802,378 244,274 143,055 8,279 117,653 110,825 3,935 747 (7,471) 797,334 229,364 133,120 9,664 116,741 99,616 11,329 9,473 (43) 1,652,239 1,423,675 1,406,598 131,466 179,960 136,989 (94,408) (93,312) (114,898) 6,286 (2,665) — 10 (1,870) (111) 4,297 — 3,996 — (47,559) 2,882 (532) (1,069) — — 43,005 44,366 (5,544) 10,701 5,157 467 3,152 3,619 48,162 $ 47,985 $ 1,074 — (986) (3,591) (1,944) (1,363) — (6,496) 8,785 (13,051) 3,658 (9,393) (608) 47,680 $ 47,505 $ 482 $ 480 $ (602) (6) 177,180 139,394 1,790 1,408 68,677 694 0.27 $ 0.27 $ 0.34 $ 0.34 $ (0.01) (0.01) 0.82 $ 0.76 $ 0.70 $ $ $ $ $ $ Limited partners’ distributions declared per unit $ 0.82 $ 0.76 $ 0.70 See accompanying notes to consolidated financial statements. F-13 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Statements of Comprehensive Income (In thousands) Years Ended December 31, 2019 2018 2017 Net income (loss) attributable to Americold Realty Operating Partnership, L.P. $ 48,162 $ 47,985 $ (608) Other comprehensive (loss) income - net of tax: Adjustment to accrued pension liability Change in unrealized net (loss) gain on foreign currency Unrealized (loss) gain on cash flow hedge Other comprehensive (loss) income attributable to Americold Realty Operating Partnership. L.P. 3,269 (3,388) (1,492) (1,611) (901) (11,640) 256 (12,285) 5,754 4,444 116 10,314 Total comprehensive income $ 46,551 $ 35,700 $ 9,706 See accompanying notes to consolidated financial statements. F-14 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Statements of Partners’ Capital (In thousands, except shares) Limited Partners’ Units Limited Partners’ Capital General Partners’ Units General Partners’ Capital Accumulated Other Comprehensive (Loss) Income Total Capital Balance - December 31, 2016 693,706 $ 2,329 68,676,903 $ 230,687 $ (10,544) $ 222,472 Net loss Other comprehensive income Distributions to parent Share-based compensation expense — — — — (6) — (487) 24 — — — — (602) — (48,179) 2,334 — 10,314 — — (608) 10,314 (48,666) 2,358 Balance - December 31, 2017 693,706 $ 1,860 68,676,903 $ 184,240 $ (230) $ 185,870 Net income Other comprehensive loss Distributions to parent Share-based compensation expense Contributions to partners’ capital Other — — — — 788,644 — 480 — (1,069) 106 5,800 15 — — — — 78,075,706 — 47,505 (105,858) 10,492 574,202 1,497 — (9,492) — — — (2,793) 47,985 (9,492) (106,927) 10,598 580,002 (1,281) Balance - December 31, 2018 1,482,350 $ 7,192 146,752,609 $ 712,078 $ (12,515) $ 706,755 Net income Other comprehensive loss Distributions to parent Share-based compensation expense Contributions to partners’ capital Other — — — — 482 — (1,466) 159 — — — — 47,680 — (145,124) 15,707 435,649 — 12,105 43,129,301 1,198,419 (1) — (87) — (1,611) — — — — 48,162 (1,611) (146,590) 15,866 1,210,524 (88) Balance - December 31, 2019 1,917,999 $ 18,471 189,881,910 $ 1,828,673 $ (14,126) $ 1,833,018 See accompanying notes to consolidated financial statements. F-15 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Operating activities: Net income (loss) attributable to Americold Realty Operating Partnership, L.P. $ 48,162 $ 47,985 $ (608) Years Ended December 31, 2019 2018 2017 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion and amortization Amortization of deferred financing costs and pension withdrawal liability Amortization of above/below market leases Loss on debt extinguishment and modification, non-cash Foreign exchange (gain) loss Loss from and impairment of investments in partially owned entities Gain from sale of partially owned entities Share-based compensation expense (Stock Options and Restricted Stock Units) Share-based compensation expense (Modification of Restricted Stock Units) Deferred tax benefit Loss (gain) from sale of real estate Loss (gain) on other asset disposals Impairment of long-lived assets and inventory Multi-employer pension plan withdrawal expense Provision for doubtful accounts receivable Changes in operating assets and liabilities: Accounts receivable Accounts payable and accrued expenses Other Net cash provided by operating activities Investing activities: Return of investment in joint venture Proceeds from sale of investments in partially owned entities Proceeds from sale of property, buildings and equipment Business combinations, net of cash acquired Acquisitions of property, buildings and equipment, net of cash acquired Additions to property, buildings and equipment Net cash used in investing activities Financing activities: Distributions to parent Proceeds from revolving line of credit Repayment of revolving line of credit Repayment of sale-leaseback financing obligations Repayment of financing lease obligations Payment of debt issuance costs Repayment of term loans, mortgage notes, notes payable and construction loans Proceeds from senior unsecured notes Proceeds from term loans Proceeds from construction loans General partner contributions Net cash provided by (used in) financing activities Net increase in cash, cash equivalents and restricted cash Effect of foreign currency translation on cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash: Beginning of period 163,348 6,028 151 — (10) 111 (4,297) 12,822 3,044 (10,701) 34 870 13,485 — 1,218 (3,681) 841 4,764 117,653 6,177 151 28,446 (2,882) 1,069 — 8,639 2,042 (3,152) (7,471) (152) 747 — 2,324 (1,940) (5,219) (6,246) 236,189 188,171 116,741 8,604 151 400 3,591 7,859 — — 2,358 (3,658) (43) (107) 11,581 9,134 1,229 1,597 18,202 (13,704) 163,327 — — 2,000 14,250 1,151 (1,319,905) (85,216) (217,214) (1,604,934) (135,443) 100,000 (100,000) (3,161) (13,339) (2,062) (10,392) 350,000 — — 1,209,768 1,395,371 26,626 (110) — — 19,513 10,163 — — (145,216) (125,703) (86,679) — — (2,595) (10,360) (16,563) (1,522,347) 600,000 525,000 1,097 597,389 84,942 147,410 (3,276) — — (148,994) (138,831) (48,666) 34,000 (62,000) (2,100) (8,429) (4,212) (56,868) — 110,000 19,671 — (18,604) 5,892 1,141 214,097 69,963 62,930 End of period Supplemental disclosures of cash flows information: Acquisition of fixed assets under financing lease obligations Acquisition of fixed assets under operating lease obligations Interest paid – net of amounts capitalized Income taxes paid – net of refunds Acquisition of property, buildings and equipment on accrual $ $ $ 240,613 $ 214,097 $ 69,963 30,416 $ 13,290 $ 12,492 68,016 2,207 — 85,595 5,509 51,335 $ 18,799 $ 18,614 — 106,557 11,854 20,942 F-16 Americold Realty Operating Partnership, L.P. and Subsidiaries Consolidated Statements of Cash Flows (Continued) (In thousands) Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the ending cash, cash equivalents and restricted cash balances above: Cash and cash equivalents Restricted cash Total cash, cash equivalents and restricted cash Allocation of purchase price of property, buildings and equipment to: Land Building and improvements Machinery and equipment Operating and finance lease right-of-use assets Assembled workforce Cash and cash equivalents Other assets and liabilities, net Operating and finance lease obligations Cash paid for acquisition of property, buildings and equipment Allocation of purchase price to business combinations: Land Building and improvements Machinery and equipment Assets under construction Operating and finance lease right-of-use assets Cash and cash equivalents Restricted cash Accounts receivable Goodwill Acquired identifiable intangibles: Customer relationships Trade names and trademarks Other assets Accounts payable and accrued expenses Notes payable Operating and finance lease obligations Unearned revenue Deferred tax liability Total consideration See accompanying notes to consolidated financial statements. As of December 31, 2019 2018 2017 $ $ 234,303 $ 208,078 $ 6,310 6,019 240,613 $ 214,097 $ 48,873 21,090 69,963 As of December 31, 2019 $ $ 23,439 41,913 19,027 4,620 854 1,594 (17) (4,620) 86,810 As of December 31, 2019 $ 65,074 706,795 162,389 16,974 1,336 4,977 526 22,959 132,371 266,633 1,623 7,127 (45,000) (3,878) (1,336) (3,536) (9,626) $ 1,325,408 F-17 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements 1. Description of the Business The Company Americold Realty Trust, together with its subsidiaries (ART, the Company, or we) is a real estate investment trust (REIT) organized under Maryland law. 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 99% of the common general partnership interests as of December 31, 2019. Americold Realty Operations, Inc., a Delaware corporation and wholly-owned subsidiary of the REIT, is the sole limited partner of the Operating Partnership, owning 1% of the common general partnership interests as of December 31, 2019. 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. No limited partner shall be liable for any debts, liabilities, contracts or obligations of the Operating Partnership. A limited partner shall be liable to the Operating Partnership only to make payments of capital contribution, if any, as and when due. After a capital contribution is fully paid, no limited partner shall, except as otherwise may be legally required under Delaware law, be required to make any further contribution or other payments or lend any funds to 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. During the third quarter of 2019, the Company granted Operating Partnership Profit Units (OP Units) to certain members of the Board of Trustees of the Company, which are described further in Note 17. Upon vesting, these units will represent noncontrolling interests in the Operating Partnership that are not owned by Americold Realty Trust. The Company expects that the expense associated with the OP Units in the Operating Partnership will be immaterial to the consolidated financial statements of the Company and the Operating Partnership. The Operating Partnership includes numerous qualified REIT subsidiaries (QRSs). Additionally, the Operating Partnership conducts various business activities in the United States (U.S.), Australia, New Zealand, Argentina, and Canada through several wholly owned taxable REIT subsidiaries (TRSs). Business and Industry Information 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 December 31, 2019, the Company operated a global network of 178 temperature-controlled warehouses, with 160 warehouses in the United States, six warehouses in Australia, seven warehouses in New Zealand, two warehouses in Argentina and three warehouses in Canada. The Company also owns and operates a limestone quarry. The Company provides its customers with technological tools to review real-time detailed inventory information via the Internet. In addition, the Company manages customer-owned warehouses for which it earns fixed and incentive fees. F-18 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Ownership Pre-Initial Public Offering (IPO) Prior to the IPO on January 23, 2018, YF ART Holdings, a partnership among investment funds affiliated with The Yucaipa Companies (Yucaipa) and Fortress Investment Group, LLC (Fortress), owned approximately 100% of the Company’s common shares of beneficial interest. In addition, affiliates of The Goldman Sachs Group, Inc. (Goldman) owned 325,000 Series B Preferred Shares, which were converted to 28,808,224 common shares in connection with the IPO. In connection with the IPO, China Merchants Holds International Company (CMHI), as defined in Note 4, converted their Series B Preferred Shares into 4,432,034 common shares of the Company. After giving effect to the full exercise of the underwriters’ option to purchase additional common shares during the IPO, CMHI owned approximately 3.1% of the Company’s common shares. Initial Public Offering On January 23, 2018, we completed an initial public offering of our common shares, or IPO, in which we issued and sold 33,350,000 of our common shares, including 4,350,000 common shares pursuant to the exercise in full of the underwriters’ option to purchase additional common shares. The common shares sold in the offering were registered under the Securities Act pursuant to our Registration Statement on Form S-11 (File No. 333-221560), as amended, which was declared effective by the SEC on January 18, 2018. The common shares were sold at an initial offering price of $16.00 per share, which generated net proceeds of approximately $493.6 million to us, after deducting underwriting fees and other offering costs of approximately $40.0 million. We primarily used the net proceeds from the IPO to repay (i) $285.1 million of indebtedness outstanding under our Senior Secured Term Loan B Facility, including $3.0 million of accrued and unpaid interest and closing expense of $0.2 million (ii) $20.9 million of indebtedness outstanding under our Clearfield, Utah and Middleboro, Massachusetts construction loans, including a nominal amount of accrued and unpaid interest; and (iii) to pay a stub period dividend totaling $3.1 million to the holders of record of our common shares, Series A Preferred Shares and Series B Preferred Shares as of January 22, 2018. Holders of the Series A Preferred Shares also received a redemption payment from the offering proceeds of $0.1 million. The remaining $184.4 million net proceeds from the IPO were used for general corporate purposes. The following is a list of other significant events that occurred in connection with the IPO: • All outstanding Series A Preferred Shares were redeemed resulting in a cash payment of approximately $0.1 million, including accrued and unpaid dividends; • All outstanding Series B Preferred Shares were converted into an aggregate of 33,240,258 common shares resulting in a cash payment of approximately $1.2 million of accrued and unpaid dividends. • • The cashless exercise by YF ART Holdings GP, LLC, an affiliate of Yucaipa (YF ART Holdings), of all outstanding warrants to purchase 18,574,619 common shares, exercisable at a price of $9.81 per share, into an aggregate of 6,426,818 common shares based on a deemed valuation of $15.00 per share pursuant to the terms of the warrants; The issuance of new senior secured credit facilities (2018 Senior Secured Credit Facilities), consisting of a five-year, $525.0 million senior secured term loan A facility (Senior Secured Term Loan A Facility), with net proceeds of $517.0 million, and a three-year, $400.0 million senior secured revolving credit facility (2018 Senior Secured Revolving Credit Facility). The 2018 Senior Secured Credit Facility also had an additional F-19 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) $400.0 million accordion option. Upon the completion of the IPO, $525.0 million was outstanding under the Company’s Senior Secured Term Loan A Facility and no borrowings were outstanding under the Company’s 2018 Senior Secured Revolving Credit Facility. During the month following the IPO, the Company paid $50 million of principal on the Senior Secured Term Loan A Facility, resulting in an outstanding balance of $475.0 million. September 2018 Follow-On Public Offering On September 18, 2018, the Company completed a follow-on public offering of 4,000,000 of its common shares at a public offering price of $24.50 per share, which generated net proceeds of approximately $92.5 million to the Company after deducting the underwriting discount and estimated offering expenses payable by the Company, and an additional 6,000,000 common shares that are subject to a forward sale agreement to be settled by September 2020. The term was extended from its original settlement of September 2019. The Company did not initially receive any proceeds from the sale of the common shares subject to the forward sale agreement that were sold by the forward purchaser or its affiliate. The Company accounts for the 2018 forward contract as equity and therefore is exempt from derivative and fair value accounting. Before the issuance of the Company’s common shares, if any, upon physical or net share settlement of the 2018 forward sale agreement, the Company expects that the common shares issuable upon settlement of the 2018 forward sale agreement will be reflected in its 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 2018 forward sale agreement less 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 2018 forward sale agreement, the delivery of the Company’s common shares would result in an increase in the number of common shares outstanding and dilution to our earnings per share. As of December 31, 2019, the Company has not settled any portion of the 2018 forward sale agreement. Additionally, in connection with the the follow-on public offering, YF ART Holdings GP, LLC (YF ART Holdings), a partnership among investment funds affiliated with Yucaipa, sold 16.5 million common shares, affiliates of Goldman sold approximately 9.1 million common shares, and affiliates of Fortress sold approximately 7.2 million common shares. Other Capital Markets Activity in 2018 On February 6, 2018, we amended the Credit Agreement with the lenders of our 2018 Senior Revolving Credit Facility to increase the aggregate revolving credit commitments on this facility by $50.0 million to $450.0 million. Concurrently, we utilized cash on hand to repay $50.0 million on our Senior Secured Term Loan A facility. As a result of these modifications, our total aggregate commitments under our 2018 Senior Credit Facilities remained unchanged at $925.0 million. On March 8, 2018, YF ART Holdings used the proceeds from a margin loan to pay in full the outstanding preferred investment, including the preferred return thereon, of Fortress, which ceased to be a limited partner in YF ART Holdings and no longer has any economic interest therein. As of December 31, 2018, YF ART Holdings owned approximately 25.9% of the Company’s common shares. On December 4, 2018, the Company recast its 2018 Senior Credit Facilities (2018 Senior Unsecured Credit Facility) to, among other things, (i) increase the revolver borrowing capacity from $450 million to $800 million, (ii) convert the credit facility (term loan and revolver) from a secured credit facility to an unsecured credit facility, and (iii) decrease the applicable interest rate margins from 2.35% to 1.45% and decrease the fee on unused borrowing capacity by 5 basis points. Refer to Note 10 for further details. F-20 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) March 2019 Secondary Public Offering In March 2019, the Company completed a secondary public offering in which certain funds affiliated with YF ART Holdings and Goldman sold their remaining interest in the Company of 38,422,583 and 8,061,228 common shares, respectively, at $27.75 per share, which included 6,063,105 shares purchased by the underwriters upon the exercise in full of their option to purchase additional shares. The selling shareholders received proceeds from the offering, which, net of underwriting fees, totaled $1.1 billion. The Company received no proceeds and incurred fees of $1.5 million related to this offering. April 2019 Follow-On Public Offering On April 22, 2019, the Company completed a follow-on public offering of 42,062,000 of its common shares, including 6,562,000 common shares pursuant to the exercise in full of the underwriters’ option to purchase additional common shares, at a public offering price of $29.75 per share, which generated net proceeds of approximately $1.21 billion to the Company after deducting the underwriting discount and estimated offering expenses payable by the Company, and an additional 8,250,000 common shares pursuant to the 2019 forward sale agreement, which is expected to be settled within one year. The Company did not initially receive any proceeds from the sale of the common shares subject to the 2019 forward sale agreement that were sold by the forward purchaser or its affiliate. The Company accounts for the 2019 forward contract as equity and therefore is exempt from derivative and fair value accounting. Refer to the above discussion under “September 2018 Follow-On Public Offering” for the earnings per share treatment and the impact as a result of this 2019 forward contract. The proceeds of the follow-on public offering were used to fund a portion of the purchase of Cloverleaf. We used the cash proceeds that we received upon settlement of the 2019 forward sale agreement on January 2, 2020 to fund the Nova Cold Logistics (Nova Cold) acquisition. At the Market (ATM) Equity Program On August 26, 2019, the Company entered into an equity distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common shares through the ATM Equity Program. Sales of our common shares made pursuant to the 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 ATM Equity Program for general corporate purposes, which may include funding acquisitions and development projects. There were no common shares sold under the ATM Equity Program during 2019. Acquisitions On February 1, 2019, the Company acquired PortFresh Holdings, LLC (PortFresh). The Company paid aggregate cash consideration of $35.2 million, net of cash acquired. On May 1, 2019, the Company entered into an equity purchase agreement to acquire Cloverleaf. The Company refers to the completion of the acquisition of Cloverleaf pursuant to the executed purchase agreement as “the Cloverleaf Acquisition”. The Company paid aggregate cash consideration of approximately $1.24 billion, net of cash acquired. The consideration paid by the Company was funded using net proceeds from the Company’s equity offering that closed on April 22, 2019, along with funds drawn under the Company’s senior unsecured revolving credit facility. F-21 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) On May 1, 2019, the Company acquired Lanier Cold Storage (Lanier). The Company paid aggregate cash consideration of approximately $81.9 million, net of cash acquired. On November 19, 2019, the Company acquired MHW Group Inc. (MHW). The Company paid aggregate cash consideration of approximately $50.1 million, net of cash acquired. Additionally, on this date the Company announced the acquisition of Nova Cold which closed in January 2020 for CAD $336.8 million. The Company funded the Nova Cold acquisition using a combination of equity from its April 2019 forward sale agreement, the Company’s revolving credit facility and cash on hand. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and include all of the accounts of Americold Realty Trust and Subsidiaries and the Operating Partnership and the subsidiaries of the Operating Partnership. Intercompany balances and transactions have been eliminated. The notes to the consolidated financial statements of Americold Realty Trust and the Operating Partnership have been combined to provide the following benefits: • • enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and • creating time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. There are a few differences between the Company and the Operating Partnership, which are reflected in these consolidated financial statements and the accompanying notes. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Americold Realty Trust’s only material asset is its ownership of partnership interests of the Operating Partnership. As a result, Americold Realty Trust generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Americold Realty Trust itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes. The Operating Partnership holds substantially all the assets of the Company. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Americold Realty Trust, which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business primarily through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates’ direct or indirect incurrence of indebtedness or through the issuance of partnership units. The presentation of shareholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of Americold Realty Trust and those of the Operating Partnership. As of December 31, 2019 and for each of the years ended December 31, 2019, 2018 and 2017, the general partner, Americold Realty Trust F-22 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) held a 99% interest in partnership units, and the limited partner, Americold Realty Operations, Inc. held a 1% interest in partnership units. The general partnership interests held by Americold Realty Trust in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s consolidated financial statements and as common stock, additional paid-in capital and accumulated dividends in excess of earnings within shareholders’ equity in Americold Realty Trust’s consolidated financial statements. The limited partnership interests held by Americold Realty Operations, Inc., a wholly owned subsidiary of ART, in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s consolidated financial statements and within equity in Americold Realty Trust’s consolidated financial statements. The differences in the presentations between shareholders’ equity and partners’ capital result from the differences in the equity presented at the Americold Realty Trust and the Operating Partnership levels. To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following notes to the consolidated financial statements for each of the Company and the Operating Partnership: • Debt of the Company and Debt of the Operating Partnership • • Partners’ Capital Selected Quarterly Financial Information In the sections that combine disclosure of Americold Realty Trust and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership. Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Property, Buildings and Equipment Property, buildings and equipment is stated at cost, less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets or, if less, the term of the underlying lease. Depreciation begins in the month an asset is placed into service. Useful lives range from 5 to 43 years for buildings and building improvements and 3 to 12 years for machinery and equipment. For the years ended December 31, 2019, 2018 and 2017, the Company recorded depreciation expense of $153.9 million, $116.0 million and $115.1 million, respectively. Depletion on the limestone quarry is computed by the units-of-production method based on estimated recoverable units. The Company periodically reviews the appropriateness of the estimated useful lives of its long-lived assets. Costs of normal maintenance and repairs and minor replacements are charged to expense as incurred. When non-real estate assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed, and any resulting gain or loss is included in “Other expense, net” on the accompanying Consolidated Statements of Operations. Gains or losses from the sale of real estate assets are reported in the accompanying Consolidated Statement of Operations as an operating expense. F-23 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Costs incurred to develop software for internal use and purchased software are capitalized and included in “Machinery and equipment” on the accompanying Consolidated Balance Sheets. Capitalized software is amortized over the estimated life of the software which ranges from 3 to 10 years. Amortization of previously capitalized amounts was $6.4 million, $5.2 million and $5.0 million for 2019, 2018 and 2017, respectively, and is included in “Depreciation, depletion and amortization expense” on the accompanying Consolidated Statements of Operations. Activity in real estate facilities during the years ended December 31, 2019 and 2018 is as follows: Operating facilities, at cost: Beginning balance Capital expenditures Acquisitions Newly developed warehouse facilities Disposition Impairment Conversion of leased assets to owned Impact of foreign exchange rate changes Ending balance Accumulated depreciation: Beginning balance Depreciation expense Dispositions Impact of foreign exchange rate changes Ending balance Total real estate facilities Non-real estate assets Total property, buildings and equipment and finance leases, net 2019 2018 (In thousands) 2,575,367 $ 177,268 975,045 21,316 (7,409) (12,555) — 557 3,729,589 (827,892) (114,512) 6,679 (697) (936,422) 2,793,167 $ 2,506,656 50,680 — 62,353 (30,199) (747) 8,405 (21,781) 2,575,367 (770,006) (87,355) 24,672 4,797 (827,892) 1,747,475 197,835 2,991,002 $ 92,226 1,839,701 $ $ $ The total real estate facilities amounts in the table above include $76.8 million and $80.3 million of assets under sale-leaseback agreements accounted for as a financing lease as of December 31, 2019 and 2018, respectively. The Company does not hold title in these assets under sale-leaseback agreements. During the second quarter of 2019, the Company sold an idle facility, which was written down earlier in 2019 resulting in an impairment charge of $2.9 million and the write-off of primarily “Buildings and improvements” on the accompanying Consolidated Balance Sheets. During the second quarter of 2018, the Company sold a facility resulting in an $8.4 million gain on sale of real estate and the write-off of primarily “Land” and “Buildings and improvements” on the accompanying Consolidated Balance Sheets. In preparation of the exit of this facility, the Company transferred most of its customers inventory to other owned warehouses within the same region. During the fourth quarter of 2018, the Company disposed of an idle facility resulting in a $0.9 million loss on sale of real estate and the write-off of primarily “Land” and “Buildings and improvement” on the accompanying Consolidated Balance Sheets. F-24 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) In February 2019, the Company acquired one facility and adjacent land in connection with the PortFresh Acquisition, with total property, buildings and equipment of $35.0 million. In May 2019, the Company acquired 21 facilities in connection with the Cloverleaf Acquisition, with total property, buildings and equipment of $891.3 million. Additionally, in May 2019, the Company acquired two facilities in connection with the Lanier Acquisition, with total property, buildings and equipment of $60.0 million. In November 2019, the Company acquired two facilities in connection with the MHW Acquisition, with total property, buildings and equipment of $49.4 million. During 2018, the Company purchased a portion of a facility that was previously operated under a lease agreement for $13.8 million. In addition to selling and purchasing facilities, the Company also invested in development projects throughout 2019 and 2018. During the third quarter of 2018, the Company commenced operations in a production-advantaged facility in Middleboro, MA which cost approximately $23.5 million to construct. As of December 31, 2018, the Company was also constructing an automated expansion project at the Rochelle, IL facility. The expansion was completed during the second quarter of 2019, with a total cost of $89.7 million incurred as of December 31, 2019. During 2019, the Company began the “Atlanta Major Market Strategy” which includes the partial redevelopment of an existing warehouse facility. The costs incurred for this ongoing project totaled $30.6 million as of December 31, 2019. During the fourth quarter of 2019, the Company completed expansion projects at two legacy Cloverleaf facilities, Chesapeake, Virginia which totaled $24.3 million and North Little Rock, Arkansas which totaled $18.9 million. The costs incurred for the ongoing expansion project at the legacy Cloverleaf facility in Columbus, Ohio totaled $6.3 million as of December 31, 2019. The costs incurred for the ongoing development project at the legacy PortFresh site in Savannah, Georgia totaled $41.5 million as of December 31, 2019. Finally, the Company acquired land in Sydney, Australia during the second quarter of 2019 for $45.5 million for potential future development of a customer build-to-suit facility, for which it has recourse should the customer choose to not move forward with this development project. Refer to Note 30 regarding updates on this project that occurred subsequent to December 31, 2019. Lease Accounting Arrangements wherein we are the lessee: At the inception of a contract, we determine if the contract is or contains a lease. Leases are classified as either financing or operating based upon criteria within ASC 842, Leases, and a right-of-use (ROU) asset and liability are established for leases with an initial term greater than 12 months. Leases with an initial term of 12 months or less, and not expected to renew beyond 12 months, are not recorded on the balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term, as adjusted for prepayments, incentives and initial direct costs. ROU assets are subsequently measured at the value of the remeasured lease liability, adjusted for the remaining balance of the following, as applicable: lease incentives, cumulative prepaid or accrued rent and unamortized initial direct costs. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The depreciable lives of assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Depreciation expense on assets acquired under financing leases is included in “Depreciation, depletion and amortization” on the accompanying Consolidated Statements of Operations. Depreciation expense on assets acquired under operating leases is included within cost of operations for the respective segment the asset pertains to, or within “Selling, general and administrative” for corporate assets on the accompanying F-25 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Consolidated Statements of Operations. As with other long-lived assets, ROU assets are reviewed for impairment when events or change in circumstances indicate the carrying value may not be recoverable. Operating leases are included in “Operating lease right-of-use assets”, “Accounts payable and accrued expenses” and “Operating lease obligations” on our Consolidated Balance Sheet. Financing lease assets are included in “Financing leases-net”, “Accounts payable and accrued expenses” and “Financing lease obligations” on our Consolidated Balance Sheet. Arrangements wherein we are the lessor: Each new lease contract is evaluated for classification as a sales-type lease, direct financing or operating lease. A lease is a sales-type lease if any one of five criteria are met, as outlined in ASC 842 each of which indicate the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating we have transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases. We do not currently have any sales-type or direct financing leases. For operating leases wherein we are the lessor, we assess the probability of payments at commencement of the lease contract and subsequently recognize lease income, including variable payments based on an index or rate, over the lease term on a straight-line basis. We continue to measure and disclose the underlying assets subject to operating leases based on our policies for application of ASC 360, Property, Plant and Equipment. For all asset classes we have elected to not separate the lease and non-lease components which generally relate to taxes and common area maintenance. Additionally, we elected a practical expedient to present all funds collected from lessees for sales and other similar taxes net of the related sales tax expense. Our lease contracts are structured in a manner to reduce risks associated with the residual value of leased assets. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment when events or changes in circumstances (such as decreases in operating income and declines in occupancy) indicate that the carrying amounts may not be recoverable. A comparison is made of the expected future operating cash flows of the long-lived assets on an undiscounted basis to their carrying amounts. If the carrying amounts of the long-lived assets exceed the sum of the expected future undiscounted cash flows, an impairment charge is recognized in an amount equal to the excess of the carrying amount over the estimated fair value of the long-lived assets, which the Company calculates based on projections of future cash flows and appraisals with significant unobservable inputs classified as Level 3 of the fair value hierarchy. The Company determined that individual warehouse properties constitute the lowest level of independent cash flows for purposes of considering possible impairment. For the years ended December 31, 2019, 2018 and 2017, the Company recorded charges of $13.5 million, $0.7 million and $9.5 million, respectively, as “Impairment of long-lived assets” on the accompanying Consolidated Statements of Operations. During the first quarter of 2019, management and the Company’s Board of Trustees formally approved the “Atlanta Major Market Strategy” plan which included the partial redevelopment of an existing warehouse facility. The partial redevelopment required the demolition of approximately 75% of the current warehouse, which was unused. The Company expects the remainder of the site to continue operating as normal during the construction period. As a result of this initiative, the Company impaired the carrying value of the portion of the warehouse no F-26 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) longer in use, resulting in a charge of $9.6 million of Warehouse segment assets. Additionally, during the first quarter of 2019 the Company recorded an impairment charge of $2.9 million of Warehouse segment assets related to a domestic idle warehouse facility in anticipation of a potential future sale of the asset. The estimated fair value of this asset was determined based on ongoing negotiations with prospective buyers. The sale of this property was completed during the second quarter of 2019. During the second quarter of 2019, the Company recorded impairment charges of $0.9 million of Transportation segment assets related to the discontinued use of internally developed software and other personal property assets due to the loss of a significant customer relationship within our foreign operations. During the year ended December 31, 2018, the Company recorded an impairment charge of $0.7 million of Warehouse segment assets related to an idle domestic warehouse facility in anticipation of a future sale of the asset, which was subsequently completed during the fourth quarter of 2018. During the year ended December 31, 2017, the Company recorded $9.5 million of impairment associated with the planned disposal of certain facilities, with a net book value in excess of their estimated fair value based on third-party appraisals or purchase offers. All 2017 long-lived asset impairments related to the Warehouse segment. Impairment of Other Assets In 2017, the Company evaluated the limestone inventory held at its Quarry operations, and determined that approximately $2.1 million of that inventory was not of saleable quality. As a result, the Company recognized an impairment charge for that amount, which is included as a component of “Cost of operations related to other revenues” on the accompanying Consolidated Statements of Operations for the year ended December 31, 2017. Also during 2017, the Company recognized an impairment charge totaling $6.5 million related to its investments in two joint ventures in China accounted for under the equity method. It was determined that the recorded investments were no longer recoverable from the projected future cash flows expected to be received from the ventures. The estimated fair value of each investment was determined based on an assessment of the proceeds expected to be received from the potential sale of the Company’s investment interests to the joint venture partner. The impairment charge is included in “Impairment of partially owned entities” on the accompanying Consolidated Statements of Operations for the year ended December 31, 2017. There were no other asset impairment charges recorded during the years ended December 31, 2019 and 2018. Capitalization of Costs Project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, and costs of personnel working on the project. Costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred. Capitalization of costs begins when the activities necessary to get the development project ready for its intended use commence, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are written off. Capitalized costs are allocated to the specific components of a project that are benefited. F-27 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) During each of the years ended 2019, 2018 and 2017, we capitalized interest of approximately $3.3 million, $3.2 million, and $1.1 million, respectively. During the years ended 2019, 2018 and 2017, we capitalized amounts relating to compensation and travel expense of employees direct and incremental to development of properties of approximately $0.5 million, $0.6 million, and $0.2 million, respectively. 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. The Company estimates the fair values using observable inputs classified as Level 2 and unobservable inputs classified as Level 3 of the fair value hierarchy. 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. On May 1, 2019, the Company completed the acquisitions of Cloverleaf and Lanier, both of which are accounted for as business combinations. Refer to Note 3 for the disclosures related to these acquisitions. F-28 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Asset Acquisitions We acquired PortFresh in an asset acquisition on February 1, 2019 for $35.2 million, net of cash. The cost incurred in connection with this asset acquisition was allocated primarily to $35.0 million of property, buildings and equipment, $0.4 million of an assembled workforce intangible asset and $0.6 million of other assets and liabilities, net. Additionally, we acquired MHW in an asset acquisition on November 19, 2019 for $50.1 million. The cost incurred in connection with this asset acquisition was allocated primarily to $49.4 million of property, buildings and equipment, $0.5 million of an assembled workforce intangible asset and $0.1 million of other assets and liabilities, net. Additionally, the purchase agreement included a call option to purchase land from the holder of the ground lease at for $4.1 million, which was exercised in January 2020. A right-of-use asset and related obligation were recorded for leases for approximately $4.5 million and $4.5 million, respectively. Bridge Loan Commitment Fees During the second quarter of 2019, we incurred costs of approximately $2.7 million related to unused bridge loan commitment fees in connection with the potential funding need to complete the Cloverleaf Acquisition which ultimately was not utilized. These costs are classified as a component of interest expense within the caption titled “Bridge loan commitment fees” and are presented within “Other expense” on the accompanying Consolidated Statement of Operations. F-29 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, demand deposits, and short-term liquid investments purchased with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. As of December 31, 2019 and 2018, the Company held $34.1 million and $37.3 million, respectively, of cash and cash equivalents in bank accounts of its foreign subsidiaries. Restricted Cash Restricted cash relates to cash on deposit and cash restricted for the payment of certain property repairs or obligations related to warehouse properties collateralized by mortgage notes, cash on deposit for certain workers’ compensation programs and cash collateralization of certain outstanding letters of credit, and payment of costs to administer and service the New Market Tax Credit (“NMTC”) entity. Refer to Note 19 for further details of the New Market Tax Credit. Restricted cash balances as of December 31, 2019 and 2018 are as follows: 2013 mortgage notes’ escrow accounts 2013 mortgage notes’ cash managed accounts Cash on deposit for workers’ compensation program in Australia New market tax credit reserve accounts Total restricted cash Accounts Receivable 2019 2018 (In thousands) 877 $ 2,343 2,525 565 6,310 $ 974 2,410 2,635 — 6,019 $ $ Accounts receivable are recorded at the invoiced amount. The Company periodically evaluates the collectability of amounts due from customers and maintains an allowance for doubtful accounts for estimated amounts uncollectable from customers. Management exercises judgment in establishing these allowances and considers the balance outstanding, payment history, and current credit status in developing these estimates. Specific accounts are written off against the allowance when management determines the account is uncollectable. The following table provides a summary of activity of the allowance for doubtful accounts: Allowance for doubtful accounts: Year ended December 31, 2017 Year ended December 31, 2018 Year ended December 31, 2019 Balance at beginning of year Charged to expense/against revenue Amounts written off, net of recoveries Balance at end of year $ $ $ 4,072 5,309 5,706 (In thousands) 2,510 1,969 3,608 (1,273) $ (1,572) $ (2,387) $ 5,309 5,706 6,927 The Company records interest on delinquent billings within “Interest income” in the Consolidated Statements of Operations, offset by a bad debt provision equal to the amount of interest charged until collected. F-30 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Identifiable Intangibles Assets Identifiable intangibles consist of a trade name and customer relationships. Indefinite-Lived Asset The trade name asset, with a carrying amount of $15.1 million as of December 31, 2019 and 2018, relates to “Americold” and has an indefinite life; thus, it is not amortized. The Company evaluates the carrying value of its trade name each year as of October 1, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the trade name below its carrying amount. There were no impairments to the Company’s trade name for the years ended December 31, 2019, 2018 and 2017. Finite-Lived Assets Customer relationship assets are the Company’s largest finite-lived assets amortized over 6 to 25 years using a straight-line or accelerated amortization method dependent on the estimated benefits, which reflects the pattern in which economic benefits of intangible assets are expected to be realized by the Company. Customer relationship amortization expense for the years ended December 31, 2019, 2018 and 2017 was $7.9 million, $0.8 million and $0.9 million, respectively. The weighted-average remaining life of the customer relationship assets is 24.2 years as of December 31, 2019. The Company reviews these intangible assets for impairment when circumstances indicate the carrying amount may not be recoverable. There were no impairments to customer relationship assets for the years ended December 31, 2019, 2018 and 2017. Leasehold Interests - Below Market Leases, Above Market Leases and In-place Lease In reference to certain temperature-controlled warehouses where the Company is the lessee in an acquired business, below-market and above- market leases are amortized on a straight-line basis over the remaining lease terms in a manner that adjusts lease expense to the market rate in effect as of the acquisition date. In reference to certain temperature-controlled warehouses where the Company has a tenant lease assigned through an acquisition, the resulting intangible asset is amortized over the remaining term of the tenant lease and recorded to amortization expense. There were no impairments to leasehold interests for the years ended December 31, 2019, 2018 or 2017. Deferred Financing Costs Direct financing costs are deferred and amortized over the terms of the related agreements as a component of “Interest expense” in the accompanying Consolidated Statements of Operations. The Company amortizes such costs based on the effective interest rate or on a straight-line basis. The Company uses the latter approach when the periodic amortization approximates the amounts calculated under the effective-interest rate method. Deferred financing costs related to revolving line of credits are classified as other assets, whereas deferred financing costs related to long-term debt are offset against “Mortgages notes, senior unsecured notes and term loan”, as applicable in the accompanying Consolidated Balance Sheets. F-31 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Goodwill The Company evaluates the carrying value of goodwill each year as of October 1 and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. When evaluating whether goodwill is impaired, the Company compares the fair value of its reporting units to its carrying amounts, including goodwill. The Company estimates the fair value of its reporting units based upon a combination of the net present value of future cash flows and a market- based approach. Future cash flows are estimated based upon certain economic assumptions. The estimates of future cash flows are subject, but not limited to the following significant assumptions: revenue growth rates, operating costs and margins, capital expenditures, tax rates, long-term growth rates and discount rates, which are affected by expectations about future market and economic conditions. The assumptions are based on risk-adjusted growth rates and discount factors accommodating multiple viewpoints that consider the full range of variability contemplated in the current and potential future economic situations. The market-based multiples approach assesses the financial performance and market values of other market-participant companies. If the estimated fair value of each of the reporting units exceeds the corresponding carrying value, no impairment of goodwill exists. If a reporting unit’s carrying amount exceeds its fair value, an impairment loss would be calculated by comparing the implied fair value of goodwill to the reporting unit’s carrying amount. The excess of the fair value of the reporting unit over the amount assigned for fair value to its other assets and liabilities is the implied fair value of goodwill. There were no goodwill impairment charges for the years ended December 31, 2019, 2018 and 2017. Revenue Recognition Revenues for the Company include rent, storage and warehouse services (collectively, Warehouse Revenue), third-party managed services for locations or logistics services managed on behalf of customers (Third-Party Managed Revenue), transportation services (Transportation Revenue), and revenue from the sale of quarry products (Other Revenue). Warehouse Revenue The Company’s customer arrangements generally include rent, storage and service elements that are priced separately. Revenues from storage and handling are recognized over the period consistent with the transfer of the service to the customer. Multiple contracts with a single counterparty are accounted for as separate arrangements. Third-Party Managed Revenue The Company provides management services for which the contract compensation arrangement includes: reimbursement of operating costs, fixed management fee, and contingent performance-based fees (Managed Services). Managed Services fixed fees are recognized as revenue as the management services are performed ratably over the service period. Managed Services performance-based fees are recognized ratably over the service period based on the likelihood of achieving performance targets. Cost reimbursements related to Managed Services arrangements are recognized as revenue as the services are performed and costs are incurred. Managed Services fees and related cost reimbursements are presented on a gross basis as the Company is the principal in the arrangement. Multiple contracts with a single counterparty are accounted for as separate arrangements. F-32 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Transportation Revenue The Company records transportation revenue and expenses upon delivery of the product. Since the Company is the principal in the arrangement of transportation services for its customers, revenues and expenses are presented on a gross basis. Other Revenue Other revenue primarily includes the sale of limestone produced by the Company’s quarry business. Revenues from the sale of limestone are recognized upon delivery to customers. Contracts with Multiple Service Lines When considering contracts containing more than one service to a customer, a contract’s transaction price is pre-defined or allocated to each distinct performance obligation and recognized as revenue when, or as the performance obligation is satisfied, either over time as work progresses, or at a point in time. For contracts with multiple service lines or distinct performance obligations, the Company evaluates and allocates the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts expected costs of satisfying a performance obligation and then adds an appropriate margin for that distinct good or service. Income Taxes The Company operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856-860 of the Code. Under those sections, a REIT that distributes at least 100% of its REIT taxable income, as defined in the Code, as a dividend to its shareholders each year and that meets certain other conditions will not be taxed on that portion of its taxable income that is distributed to its shareholders for U.S. federal income tax purposes. Through cash dividends, the Company, for tax purposes, has distributed an amount equal to or greater than its REIT taxable income for the years ended December 31, 2019, 2018 and 2017. For all periods presented, the Company has met all the requirements to qualify as a REIT. Thus, no provision for federal income taxes was made for the years ended December 31, 2019, 2018 and 2017, except as needed for the Company’s U.S. Taxable REIT Subsidiaries (TRSs), for the Company’s foreign entities, and a REIT excise tax payment in 2018 disclosed in Note 18 of these financial statements. To qualify as a REIT, an entity cannot have at the end of any taxable year any undistributed earnings and profits that are attributable to a non-REIT taxable year (undistributed E&P). The Company believes that it has no undistributed E&P as of December 31, 2019. However, to the extent there is a determination (within the meaning of Section 852(e)(1)) of the Code that the Company has undistributed earnings and profits (as determined for U.S. federal income tax purposes) accumulated (or acquired from another entity) from any taxable year in which the Company (or any other entity that converts to a Qualified REIT Subsidiary (QRS) that was acquired during the year) was not a REIT or a QRS, the Company will take all necessary steps to permit the Company to avoid the loss of its REIT status, including, but not limited to: 1) within the 90-day period beginning on the date of the determination, making one or more qualified designated distributions (within the meaning of the Section 852(e)(2)) of the Code in an amount not less than such undistributed earnings and profits over the interest payable under section 852(e)(3) of the Code; and 2) timely paying to the IRS the interest payable under Section 852(e)(3) of the Code resulting from such a determination. If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, it F-33 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) may be subject to certain state and local income and franchise taxes, and to U.S. federal income and excise taxes on undistributed taxable income and on certain built-in gains. The Company has elected TRS status for certain wholly-owned subsidiaries. This allows the Company to provide services at those consolidated subsidiaries that would otherwise be considered impermissible for REITs. Many of the foreign countries in which we have operations do not recognize REITs or do not accord REIT status under their respective tax laws to our entities that operate in their jurisdiction. Accordingly, the Company recognizes income tax expense for the U.S. federal and state income taxes incurred by the TRSs, taxes incurred in certain U.S. states and foreign jurisdictions, and interest and penalties associated with unrecognized tax benefit liabilities, as applicable. Taxable REIT Subsidiary The Company has elected to treat certain of its wholly owned subsidiaries as TRSs. A TRS is subject to U.S. federal and state income taxes at regular corporate tax rates. Thus, income taxes for the Company’s TRSs are accounted for using the asset and liability method, under which deferred income taxes are recognized for (i) temporary differences between the financial reporting and tax bases of assets and liabilities and (ii) operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. The Company records a valuation allowance for deferred tax assets when it estimates that it is more likely than not that future taxable income will be insufficient to fully use a deduction or credit in a specific jurisdiction. In assessing the need for the recognition of a valuation allowance for deferred tax assets, we consider whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized and adjust the valuation allowance accordingly. We evaluate all significant available positive and negative evidence as part of our analysis. Negative evidence includes the existence of losses in recent years. Positive evidence includes the forecast of future taxable income by jurisdiction, tax-planning strategies that would result in the realization of deferred tax assets, reversal of existing deferred tax liabilities, and the presence of taxable income in prior carryback years. The underlying assumptions we use in forecasting future taxable income require significant judgment and take into account our recent performance. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which temporary differences are deductible or creditable. The Company accrues liabilities when it believes that it is more likely than not that it will not realize the benefits of tax positions that it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with ASC 740-10, Uncertain Tax Positions. The Company recognizes interest and penalties related to unrecognized tax benefits within “Income tax (expense) benefit” in the accompanying Consolidated Statements of Operations. The earnings of certain foreign subsidiaries, including any other components of the outside basis difference in these subsidiaries, are considered to be indefinitely reinvested, except for Canada and Hong Kong. The Company changed its assertion for its Canadian subsidiaries in 2018 to begin repatriating its unremitted earnings to the U.S. starting in 2018. The Company is also no longer permanently reinvested with regard to its investment in Hong Kong in 2019. If our plans change in the future for any other foreign subsidiary or if we elect to repatriate the unremitted earnings of our other foreign subsidiaries in the form of distributions or otherwise, we would be subject to additional income taxes which could result in a higher effective tax rate. As disclosed in Note 18 of these financial statements, the U.S. government enacted comprehensive tax legislation on December 22, 2017 which imposed a one-time inclusion for our REIT or tax for our TRS on the deemed repatriation of unremitted foreign earnings and profits. However, the Company has provided for local country withholding taxes related to the unremitted earnings to be repatriated in certain foreign jurisdictions to the U.S. TRS. With respect to the foreign subsidiaries owned directly by the REIT, any unremitted earnings would not be subject to additional U.S. level taxes because the REIT would distribute 100% of such earnings or would be subject to a participation exemption beginning in 2018. F-34 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Pension and Post-Retirement Benefits The Company has defined benefit pension plans that cover certain union and nonunion employees. The Company also participates in multi- employer union defined benefit pension plans under collective bargaining agreements for certain union employees. The Company also has a post-retirement benefit plan to provide life insurance coverage to eligible retired employees. The Company also offers defined contribution plans to all of its eligible employees. Contributions to multi-employer union defined benefit pension plans are expensed as incurred, as are the Company’s contributions to the defined contribution plans. For the defined benefit pension plans and the post-retirement benefit plan, an asset or a liability is recorded in the consolidated balance sheet equal to the funded status of the plan, which represents the difference between the fair value of the plan assets and the projected benefit obligation at the consolidated balance sheet date. The Company utilizes the services of a third-party actuary to assist in the assessment of the fair value of the plan assets and the projected benefit obligation at each measurement date. Certain changes in the value of plan assets and the projected benefit obligation are not recognized immediately in earnings but instead are deferred as a component of accumulated other comprehensive income (loss) and amortized to earnings in future periods. Foreign Currency Gains and Losses The local currency is the functional currency for the Company’s operations in Australia, New Zealand and Canada. For these operations, assets and liabilities are translated at the rates of exchange on the consolidated balance sheet date, while income and expense items are translated at average rates of exchange during the period. The resulting gains or losses arising from the translation of accounts from the functional currency into U.S. dollars are included as a separate component of shareholders’ equity in accumulated other comprehensive income (loss) until a partial or complete liquidation of the Company’s net investment in the foreign operation. From time to time, the Company’s foreign operations may enter into transactions that are denominated in a currency other than their functional currency. These transactions are initially recorded in the functional currency of the subsidiary based on the applicable exchange rate in effect on the date of the transaction. On a monthly basis, these transactions are remeasured to an equivalent amount of the functional currency based on the applicable exchange rate in effect on the remeasurement date. Any adjustment required to remeasure a transaction to the equivalent amount of functional currency is recorded in “Foreign currency exchange gain (loss), net” in the accompanying Consolidated Statements of Operations. During the fourth quarter of 2018, the Company entered into two intercompany loan agreements, whereby the Australia and New Zealand entities borrowed from the U.S. entity. These intercompany loan agreements were denominated in the functional currency of the respective entities. The intercompany loan receivable balances as of December 31, 2019 are AUD $153.5 million and NZD $37.5 million, and are remeasured at the end of each month to the United States Dollar (USD) with any required adjustment recorded in “Foreign currency exchange gain (loss), net” in the accompanying Consolidated Statements of Operations. Foreign currency transaction gains and losses on the remeasurement of short-term intercompany loans denominated in currencies other than a subsidiary’s functional currency are recognized as a component of foreign currency gain or loss, except to the extent that the transaction is effectively hedged. For loans that are effectively hedged, the transaction gains and losses on remeasurement are recorded to “Accumulated other comprehensive income (loss)”. Foreign currency transaction gains and losses resulting from the remeasurement of long-term intercompany loans denominated in currencies other than a subsidiary’s functional currency are recognized as a component of “Accumulated other comprehensive income (loss)” if a repayment of these loans is not anticipated. F-35 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Recently Adopted Accounting Standards Lease Accounting In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended, which the Company adopted using a modified retrospective transition approach effective January 1, 2019. All leases that commenced prior to our adoption of this new standard were accounted for and disclosed in accordance with our existing policies for application of ASC 840, Leases. Accordingly, prior year amounts were not recast under the new standard. Upon adoption, we elected a package of practical expedients for expired and existing contracts whereby we (1) did not reassess our prior conclusions about lease identification, lease classification and initial direct costs, (2) continued to apply existing accounting policies for all land easements that existed or expire before the date of adoption, (3) did not recognize ROU assets or liabilities for leases that qualify as short-term leases for all classes of underlying assets, and (4) did not separate lease and non-lease components for all classes of underlying assets. The Company did not elect to apply the hindsight practical expedient when determining the term for our leases. The new standard requires disclosure of additional quantitative and qualitative information for lessee and lessor arrangements which has been included above in the Summary of Significant Accounting Policies and in Note 13. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update eliminates step two of the goodwill impairment test, and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. For public business entities that are SEC filers, this ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption is allowed for all entities as of January 1, 2017, for annual and any interim impairment tests occurring after January 1, 2017. The Company adopted ASU 2017-04 on January 1, 2019 on a prospective basis and it did not have a material effect on its consolidated financial statements. Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU refines and expands hedge accounting for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption, including adoption in an interim period, is permitted. The Company adopted ASU 2017-12 on January 1, 2019 on a prospective basis and it did not have a material impact on its consolidated financial statements. Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU permits the use of the OIS rate based upon SOFR as a U.S. benchmark interest rate for purposes of applying hedge accounting under Topic 815. The Alternative Reference Rates Committee announced F-36 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) that it identified the Secured Overnight Funding Rate (SOFR) as its preferred alternative to LIBOR. The Company intends to continue to use LIBOR until its extermination date in 2021, and intends to replace LIBOR with SOFR at that time. The Company adopted ASU 2018-16 on January 1, 2019 and does not believe that the transition from LIBOR to SOFR will have a material impact on its consolidated financial statements. Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which more closely aligns the accounting for employee and nonemployee share-based payments. The standard will be effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this standard on January 1, 2019 on a prospective basis, and it did not have a material impact on its consolidated financial statements. Future Adoption of Accounting Standards Fair Value Measurement - Disclosure Framework In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements on fair value measurements. The ASU removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The ASU requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For public business entities, this guidance is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. Collaborative Arrangements In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the interaction between Topic 808 and Topic 606. ASU 2018-18 clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. For public business entities, these amendments are effective for fiscal years beginning after December 15, 2019, and interim periods therein. The Company believes the adoption of ASU 2018-18 will not have a material effect on its consolidated financial statements. Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). This ASU introduces new guidance for the accounting for credit losses. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The standard will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company continues to assess the impact of adopting this standard and does not believe the adoption of ASU 2016-13 will have a material effect on its consolidated financial statements. F-37 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. 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. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company does not expect the provisions of ASU 2018-14 will have a material impact on its consolidated financial statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) . This ASU is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however, early adoption is permitted for all entities. The Company continues to assess the impact of adopting this standard and does not believe the adoption of ASU 2019-12 will have a material effect on its consolidated financial statements. Other Presentation Matters Reclassifications Certain immaterial, prior period amounts have been reclassified to conform to the current period presentation on the Consolidated Statements of Operations, the Consolidated Statements of Shareholders’ Equity and the Consolidated Statements of Cash Flows. The Consolidated Statement of Operations reflects the reclassification required in the prior period upon addition of a new caption described as “Acquisition, litigation and other”, which was previously classified within “Selling, general and administrative”. Refer to Note 8 for further detail of this caption. The Consolidated Statements of Shareholders’ Equity reflects the reclassification required in the prior period upon addition of a new caption described as “Common share issuance related to share-based payment plans, net of shares withheld for employee taxes”, which was previously classified within “Share-based compensation expense (Stock Options and Restricted Stock Units)”. The Consolidated Statements of Cash Flows reflects the reclassification of certain immaterial amounts related to amortization from the caption previously described as “Multi-employer pension plan withdrawal expense and amortization” which is now classified within “Amortization of deferred financing costs and pension withdrawal liability”. F-38 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 3. Business Combinations Acquisition of Cloverleaf The Company completed the acquisition of privately-held Cloverleaf on May 1, 2019. A summary of the preliminary fair values of the assets acquired and liabilities assumed for total cash consideration of $1.24 billion, as well as adjustments made during 2019 (referred to as “measurement period adjustments”), is as follows (in thousands): Amounts Recognized as of the Acquisition Date Measurement Period Adjustments (1) Amounts Recognized as of the Acquisition Date (as Adjusted)(2) $ Assets Land Buildings and improvements Machinery and equipment Assets under construction Operating lease right-of-use assets Cash and cash equivalents Restricted cash Accounts receivable Goodwill Acquired identifiable intangibles: Customer relationships Trade names and trademarks Other assets Total assets Liabilities Accounts payable and accrued expenses Notes payable Operating lease obligations Unearned revenue Pension and postretirement benefits Deferred tax liability Total liabilities Total consideration for Cloverleaf acquisition $ 59,363 $ 687,821 144,825 20,968 1,254 4,332 — 21,358 107,643 241,738 1,623 18,720 1,309,645 30,905 17,179 1,254 3,536 2,020 9,063 63,957 1,245,688 $ 1,131 $ (19,670) 822 (3,994) — — 526 220 18,297 8,608 — (11,668) (5,728) 12,598 (13,301) — — (2,020) (195) (2,918) (2,810) $ 60,494 668,151 145,647 16,974 1,254 4,332 526 21,578 125,940 250,346 1,623 7,052 1,303,917 43,503 3,878 1,254 3,536 — 8,868 61,039 1,242,878 (1) The measurement period adjustments recorded in 2019 did not have a significant impact on our Consolidated Statements of Operations for the year ended December 31, 2019. (2) The measurement period adjustments were primarily due to refinements to third party appraisals and carrying amounts of certain assets and liabilities, as well as adjustments to certain tax accounts based on, among other things, adjustments to deferred tax liabilities. The net impact of the measurement period adjustments results in a net increase to goodwill. As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding these F-39 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) assets and liabilities that existed at the acquisition date. Any adjustments to our estimates of purchase price allocation will be made in the periods in which the adjustments are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Adjustments recorded subsequent to the acquisition date are detailed in the table above, and were not material to the Consolidated Balance Sheets, the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. The preliminary purchase price allocation will be finalized within one year from the date of acquisition. As shown above, the Company recorded approximately $125.9 million of goodwill related to the Cloverleaf Acquisition. The strategic benefits of the acquisition include the Company’s ability to add complementary customers into its network, provide an opportunity for growth in the Central and Southeast markets, deepen existing customer relationships, provide three expansion opportunities that are already under construction and leverage integration experience to drive synergies and further enhance the warehouse network for new and existing customers. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The Cloverleaf acquisition was completed through the acquisition of both stock and partnership units; the acquisition of partnership units allowed a portion of the goodwill recorded as a result of the Cloverleaf Acquisition to be deductible for federal income tax purposes. The goodwill related to the Cloverleaf Acquisition has been substantially assigned to the Warehouse segment, with a de minimis amount assigned to the Transportation segment. Deferred taxes may not be recorded for deductible goodwill unless the tax basis in goodwill exceeds the book basis, and the Company has not recorded any deferred taxes as a result. Deductible goodwill will be available to reduce taxable income for both the REIT and its domestic TRS. Also shown above, in connection with the Cloverleaf Acquisition the Company recorded an intangible asset of approximately $250.3 million for customer relationships which has been assigned a useful life of 25 years, and approximately $1.6 million for trade names and trademarks which has been assigned a useful life of 1.5 years. These intangible assets will be amortized on a straight-line basis over their respective useful lives. Based on the discussion under goodwill above, the Cloverleaf Acquisition resulted in federal income tax deductibility for a portion of the intangible assets. The deductible intangible assets will be available to reduce taxable income for both the REIT and its domestic TRS. The Company has recorded a deferred tax liability of $1.9 million for intangible assets. The unaudited pro forma financial information set forth below is based on the historical Consolidated Statements of Operations for the years ended December 31, 2019 and 2018, adjusted to give effect to the Cloverleaf Acquisition as if it had occurred on January 1, 2018. The pro forma adjustments primarily relate to acquisition expenses, depreciation expense on acquired assets, amortization of acquired intangibles, and estimated interest expense related to financing transactions, the proceeds of which were used to fund the acquisition of Cloverleaf. On March 1, 2019, Cloverleaf acquired Zero Mountain, Inc. and Subsidiaries (Zero Mountain). As a result, we have included the results of operations of Zero Mountain in the below pro forma financial information. The pro forma adjustments made include the acquisition expenses incurred in connection with Cloverleaf’s acquisition of Zero Mountain. The accompanying unaudited pro forma consolidated financial statements exclude the results of the Lanier acquisition, which was deemed immaterial. These statements are provided for illustrative purposes only and do not purport to represent what the actual Consolidated Statements of Operations of the Company or the Operating Partnership would have been had the Cloverleaf Acquisition occurred on the dates assumed, nor are they necessarily indicative of what the results of operations would be for any future periods. F-40 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Americold Realty Trust and Subsidiaries Total revenue Net income available to common shareholders(1) Net income per share, diluted(2) Americold Realty Operating Partnership, L.P. and Subsidiaries Pro forma (unaudited) (in thousands, except per share data) Years Ended December 31, 2019 2018 $ $ $ 1,859,265 $ 52,026 $ 0.27 $ 1,829,048 (3,232) (0.02) Pro forma (unaudited) (in thousands, except per share data) Years Ended December 31, 2019 2018 1,829,048 Total revenue Net income available to common unitholders(1) (3,232) Net income per unit, diluted(2) (0.02) (1) Pro forma net income available to common shareholders was adjusted to exclude $26.6 million of acquisition related costs incurred by the Company during the year ended December 31, 2019, and to include these charges in pro forma net income for the year ended December 31, 2018. (2)Adjusted to give effect to the issuance of approximately 42.1 million common shares in connection with the Cloverleaf Acquisition. 1,859,265 $ 52,026 $ 0.27 $ $ $ $ Since the date of acquisition, total revenues of approximately $152.8 million and net income of approximately $9.0 million associated with properties and operations acquired in the Cloverleaf Acquisition are included in the Consolidated Statements of Operations for the year ended December 31, 2019. Acquisition of Lanier The Company completed the acquisition of privately-held Lanier on May 1, 2019 for total cash consideration of $81.9 million, net of cash received. The allocation of consideration primarily included $60.0 million of property, buildings and equipment, $6.4 million of goodwill, and $16.3 million of customer relationship intangible assets. The customer relationship asset has been assigned a useful life of twenty-five 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 increased presence in the north Georgia poultry market and leveraging integration experience to drive synergies and further enhance the warehouse network for new and existing customers. The Lanier acquisition was completed through the acquisition of both stock and partnership units; the acquisition of partnership units allowed a portion of the goodwill recorded to be deductible for federal income tax purposes. Deferred taxes may not be recorded for deductible goodwill unless the tax basis exceeds the book basis, and the Company has not recorded any deferred taxes as a result. Deductible goodwill will be available to reduce taxable income at both the REIT and its domestic TRS. Adjustments recorded subsequent to the acquisition date were not material to the Consolidated Balance Sheets, the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. The preliminary purchase price allocation will be finalized within one year from the date of acquisition. We have included the financial results of the acquired operations in our Warehouse segment since the date of the acquistion. F-41 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 4. Equity-Method Investments During 2010, the Company, through its wholly owned subsidiaries, made total cash investments of $46.2 million in two newly-formed Hong Kong entities, China Merchants Americold Holdings Logistics Company Limited (CMAL) and China Merchants Americold Holdings Company Limited (CMAH, together with CMAL, the Joint Venture, or China JV). Through these subsidiaries, the Company acquired a 49% interest in the Joint Venture, while China Merchants Holdings International Company (CMHI) acquired the remaining 51% interest in the Joint Venture. CMHI is a Hong Kong based entity that is part of the China Merchants Group. Other affiliates of CMHI subsequently purchased 50,000 shares of the Company’s Series B Preferred Shares, subsequently converted to common shares in connection with our IPO. The Joint Venture was formed with the purpose of acquiring, owning, and operating temperature-controlled warehouses, primarily in the People’s Republic of China. During 2015, the Company made an additional capital contribution of $1.3 million to the Joint Venture for general corporate purposes. In 2017, the Company recognized an impairment charge totaling $6.5 million related to our investment in the Joint Venture as we determined that the recorded investment was no longer recoverable from the projected future cash flows expected to be received from the Joint Venture. The estimated fair value of this investment was determined based on active negotiations of the proceeds expected to be received from the potential sale of our investment interests to the joint venture partner. During the third quarter of 2019, the Company completed the sale of its equity interest in its China JV to an affiliate of its joint venture partner for total cash consideration of $15.0 million. The resulting gain on the sale of the China JV totaled $4.3 million and is included in “Gain from sale of partially owned entities” on the accompanying Consolidated Statements of Operations. The gain recorded includes $2.6 million related to cumulative foreign currency translation historically recorded through Other Comprehensive Income which stemmed from the remeasurement of the foreign denominated equity-method investment in the China JV. The following tables summarize the financial information of the Company’s China JV for the periods presented, prior to disposition. The condensed summary financial information for the Company’s China JV is as follows for the portion of the year which the Company held ownership interest in the China JV during 2019 and the full year ended December 31, 2018: Condensed results of operations CMAL 2019 CMAH (In thousands) Revenues Operating (loss) income Net (loss) income Company’s (loss) income from partially owned entities Condensed results of operations Revenues Operating (loss) income Net (loss) income Company’s (loss) income from partially owned entities $ $ $ $ $ $ $ $ 28,334 $ (348) $ (507) $ (429) $ 10,907 $ 1,920 $ 1,018 $ 318 $ CMAL 2018 CMAH (In thousands) 37,458 $ (1,748) $ (1,960) $ (1,419) $ 13,621 $ 2,432 $ 1,651 $ 350 $ F-42 Total 39,241 1,572 511 (111) Total 51,079 684 (309) (1,069) Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Condensed results of operations CMAL 2017 CMAH (In thousands) Revenues Operating (loss) income Net loss Company’s loss from partially owned entities $ $ $ $ 38,662 $ (2,052) $ (2,479) $ (1,143) $ 12,294 $ 314 $ (296) $ (220) $ Total 50,956 (1,738) (2,775) (1,363) In addition to the China JV, the Company had an investment in a joint venture accounted for under the equity-method, for which a complete return of capital totaling $2.0 million was received during the first quarter of 2019, eliminating the Company’s involvement in the joint venture. 5. Goodwill and Intangible Assets The changes in the carrying amount of the Company’s goodwill by reportable segment for the years ended December 31, 2019, 2018 and 2017 are as follows: December 31, 2016 Impact of foreign currency translation December 31, 2017 Impact of foreign currency translation December 31, 2018 Goodwill acquired Impact of foreign currency translation December 31, 2019 Warehouse Third-party managed Transportation Total $ $ 171,582 $ 972 172,554 (1,658) 170,896 130,919 9 301,824 $ (In thousands) 3,056 $ 8 3,064 (174) 2,890 — (8) 2,882 $ 12,167 $ 384 12,551 (242) 12,309 1,452 16 13,777 $ 186,805 1,364 188,169 (2,074) 186,095 132,371 17 318,483 The goodwill acquired in 2019 primarily related to the Cloverleaf and Lanier acquisitions in the Warehouse segment. Refer to Note 3 for additional information. F-43 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Intangible assets subject to amortization as of December 31, 2019 and 2018 are as follows: Customer relationships Above- market leases In-place lease Below-market leases Assembled Workforce Trade names and trademarks Total Gross Additions Accumulated amortization Net definite lived intangible assets $ $ (In thousands, except years) 143 $ — (60) 3,778 $ — (1,578) 33,788 $ 266,633 (38,036) 9,126 $ — (5,794) — $ 908 (128) — $ 1,623 (721) 46,835 269,164 (46,317) 262,385 $ 83 $ 2,200 $ 3,332 $ 780 $ 902 Indefinite lived intangible asset (Trade name) Identifiable intangible assets – net, December 31, 2019 Weighted-average remaining useful life at December 31, 2019 24.2 3.8 3.8 32.6 2.7 0.8 23.9 Gross Additions Accumulated amortization Net definite lived intangible assets $ $ 33,788 $ — (30,169) 143 $ — (38) 3,778 $ — (1,004) 9,126 $ — (5,644) 3,619 $ 105 $ 2,774 $ 3,482 $ — $ — — — $ Indefinite lived intangible asset (Trade name) Identifiable intangible assets – net, December 31, 2018 Weighted-average remaining useful life at December 31, 2018 9.1 4.8 4.8 33.2 N/A N/A 16.3 269,682 15,076 284,758 $ — $ — — — $ 46,835 — (36,855) 9,980 15,076 25,056 Additions in 2019 relate to the Cloverleaf, Lanier, MHW and PortFresh acquisitions. Refer to Notes 2 and 3 for further details of each acquisition. F-44 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The following table describes the estimated amortization of intangible assets for the next five years and thereafter. In addition, the table describes the net impact on rent expense due to the amortization of below-market leases for the next five years and thereafter: Estimated Amortization of Customer Relationships, In-Place Lease, Assembled Workforce, Trade names and Trademarks Intangible Assets Estimated Net Decrease to Lease Revenue Related to Amortization of Above-Market Leases Estimated Net Increase to Lease Expense Related to Amortization of Below-Market Leases (In thousands) Years Ending December 31: 2020 2021 2022 2023 2024 Thereafter Total 6. Other Assets $ $ Other assets as of December 31, 2019 and 2018 are as follows: Various insurance and workers’ compensation receivables Prepaid accounts Inventory and supplies Other receivables Fair value of derivatives Marketable securities - (Deferred compensation plan) Utility, workers’ compensation escrow and lease deposits Deferred financing costs Deferred registration statement costs Income taxes receivable Deferred tax assets 13,110 $ 12,119 11,902 11,543 10,976 206,617 266,267 $ 22 $ 22 22 17 — — 83 $ 151 151 151 106 102 2,671 3,332 2019 2018 (In thousands) 12,143 $ 11,345 9,371 7,528 6,886 4,895 4,222 2,767 912 885 418 61,372 $ 9,595 12,532 7,875 8,770 2,283 3,072 1,726 5,437 — 6,978 391 58,659 $ $ F-45 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 7. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses as of December 31, 2019 and 2018 are as follows: Trade payables Accrued workers’ compensation liabilities Accrued payroll Accrued bonus Accrued vacation and long service leave Accrued health benefits Accrued property taxes Accrued utilities New market tax credit deferred contribution liability Income taxes payable Dividends payable Accrued interest Other accrued expenses 8. Acquisition, Litigation and Other Charges 2019 2018 (In thousands) 109,222 $ 30,642 17,104 20,729 16,403 13,020 20,370 7,854 4,882 997 39,753 24,872 45,115 350,963 $ 85,038 30,585 12,238 17,335 14,988 10,987 14,376 6,274 — 290 28,540 4,843 27,586 253,080 $ $ The components of the charges included in “Acquisition, litigation and other” in our Consolidated Statements of Operations are as follows (in thousands): Acquisition, litigation and other Acquisition related costs Litigation Strategic alternative costs Other: Severance, equity award modifications and acceleration Non-offering related equity issuance expenses Terminated site operations costs Non-recurring public company implementation costs Total other Years Ended December 31, 2019 2018 2017 $ 24,284 $ 4,553 — 671 $ — — 9,789 1,356 632 — 11,777 2,053 1,813 (1,804) 1,202 3,264 — — 8,136 516 — 2,677 — 3,193 Total acquisition, litigation and other $ 40,614 $ 3,935 $ 11,329 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 F-46 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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. Acquisition costs for the year ended December 31, 2019, primarily consisted of a $10.0 million investment advisory fee, employee retention expense, non- capitalizable legal and professional fees related to completed and potential acquisitions, and acquisition integration costs. Refer to Note 3 for further information regarding acquisitions completed in the current year. Litigation costs consist of expenses incurred in order to defend the Company from litigation charges outside of the normal course of business as well as related settlements not in the normal course of business. Litigation costs incurred in connection with matters arising from the ordinary course of business are expensed as a component of “Selling, general and administrative expense” on the Consolidated Statements of Operations. Strategic alternative costs consist of operating costs associated with our review of various contemplated strategic transactions prior to our initial public offering. 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. Equity acceleration and modification costs represent the unrecognized expense for stock 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. For the year ended December 31, 2019, we recognized $2.4 million of severance related to reduction in headcount as a result of the synergies created from the Cloverleaf Acquisition, $1.2 million of severance related to the departure of two former executives, $3.0 million related to a reduction in headcount within our international operations from organizational realignments, as well as $3.1 million of accelerated equity award vesting. Refer to Note 17 for further details of all equity modifications and equity acceleration. Non-offering related equity issuance expense consists of non-registration statement related legal fees associated with the selling shareholders’ secondary public offering completed during the first quarter of 2019, which consisted solely of shares sold by YF ART Holdings and Goldman Sachs and affiliates (see Note 1 for more information). The Company received no proceeds from the secondary offering. Non- offering related equity issuance expense for the year ended December 31, 2018 consisted of non-capitalizable legal and professional fees associated with the September 2018 follow-on equity issuance and non-registration statement related costs and an Australian stamp duty tax related to the Company’s IPO. 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. In 2018, the Company was released from liability under a previously exited leased facility, for which we originally recorded in 2017 a charge of $2.1 million repair expense to return the site to its original condition. As a result, we reversed this charge in 2018. In total, $0.3 million was paid in conjunction with the exit of this facility. Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our Consolidated Statement of Operations. Non-recurring public company implementation costs for the year ended December 31, 2018, represent costs associated with the implementation of financial reporting systems and processes needed to convert the organization to a public company. F-47 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 9. Debt of the Company In this Note 9, the “Company” refers only to Americold Realty Trust and not to any of its subsidiaries. The Company itself does not have any indebtedness. All debt is held directly or indirectly by the Operating Partnership. The Company guarantees the Operating Partnership’s obligations with respect to its outstanding debt as of December 31, 2019 and 2018, as detailed in Note 10, with the exception of the 2013 Mortgage Loans which have limited guarantees for fraud and environmental carve-outs by Americold Realty Operating Partnership, L.P. F-48 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 10. Debt of the Operating Partnership A summary of outstanding indebtedness of the Operating Partnership as of December 31, 2019 and 2018 is as follows (in thousands): Indebtedness 2013 Mortgage Loans Senior note Mezzanine A Mezzanine B Total 2013 Mortgage Loans Senior Unsecured Notes Series A notes Series B notes Series C notes Total Senior Unsecured Notes Stated Maturity Date 5/2023 5/2023 5/2023 Effective Interest Rate as of December 31, 2019 Contractual Interest Rate 2019 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 3.81% 7.38% 11.50% 4.14% 7.55% 11.75% $ 181,443 $ 184,618 $ 187,957 $ 184,667 70,000 32,000 70,525 32,320 70,000 32,000 67,900 31,120 283,443 287,463 289,957 283,687 1/2026 1/2029 1/2030 4.68% 4.86% 4.10% 4.77% 4.92% 4.15% 200,000 400,000 350,000 217,750 439,000 366,625 200,000 400,000 — 202,500 407,000 — 950,000 1,023,375 600,000 609,500 2018 Senior Unsecured Term Loan A Facility(1) 1/2023 L+1.00% 3.14% 475,000 472,625 475,000 472,625 Total principal amount of indebtedness Less deferred financing costs Total indebtedness, net of unamortized deferred financing costs 2018 Senior Unsecured Revolving Credit Facility(1) 1/2021 L+0.90% 0.36% (1) L = one-month LIBOR 2018 Senior Unsecured Credit Facility 1,708,443 1,783,463 1,364,957 1,365,812 (12,996) n/a (13,943) n/a 1,695,447 $ 1,783,463 $ 1,351,014 $ 1,365,812 — $ — $ — $ — $ $ On December 4, 2018, the Company entered into the 2018 Senior Unsecured Credit Facility to, among other things, (i) increase the revolver borrowing capacity from $450 million to $800 million, (ii) convert the credit facility (term loan and revolver) from a secured credit facility to an unsecured credit facility, and (iii) decrease the applicable interest rate margins from 2.35% to 1.45% and decrease the fee on unused borrowing capacity by five basis points. The terms of the revolver allow for the ability to draw proceeds in multiple currencies, up to $400 million. In connection with entering into the original agreement and subsequent amendments for the Term Loan A Credit Facility, we capitalized approximately $8.9 million of debt issuance costs, which we amortize as interest expense under the effective interest method. The unamortized balance of Term Loan A debt issuance costs are included in “Mortgage notes, senior unsecured notes and term loan” on the accompanying Consolidated Balance Sheets. As of December 31, 2019, $2.8 million of unamortized debt issuance costs related to the revolving credit facility are included in “Other assets” in the accompanying Consolidated Balance Sheet. On September 24, 2019, the Company reduced our interest rate margins from 1.45% to 1.00% on the Term Loan A, and 1.45% to 0.90% on the Revolving Credit Facility. In addition, the Company decreased the fee on unused borrowing capacity to a flat 20 basis points regardless of the percentage of total commitment used. The Company received a favorable credit rating during the third quarter of 2019. This rating, when combined with existing ratings, allowed the Company to transition to a favorable ratings-based pricing grid. F-49 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Our 2018 Senior Unsecured Revolving Credit Facility is structured to include a borrowing base, which allows us to borrow against the lesser of our Senior Unsecured Term Loan A Facility balance outstanding, our Senior Unsecured Notes balance outstanding, $800 million in revolving credit commitments, and the value of certain owned real estate assets and ground leased assets. Our 2018 Senior Unsecured Credit Facility contains representations, covenants and other terms customary for a publicly traded REIT. In addition, it contains certain financial covenants, as defined in the credit agreement, including: • • • • • • • a maximum leverage ratio of less than or equal to 60% of our total asset value; a minimum borrowing base coverage ratio of greater than or equal to 1.00 to 1.00; a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00; a minimum borrowing base debt service coverage ratio of greater than or equal to 2.00 to 1.00; a minimum tangible net worth requirement of greater than or equal to $1.1 billion plus 70% of any future net equity proceeds following the completion of the IPO transactions; a maximum recourse secured debt ratio of less than or equal to 15% of our total asset value; and a maximum secured debt ratio of less than or equal to 40% of total asset value. Our 2018 Senior Unsecured Credit Facility is fully recourse to our Operating Partnership. As of December 31, 2019, the Company was in compliance with all debt covenants. Series A, B and C Senior Unsecured Notes On November 6, 2018, the Company priced a debt private placement transaction consisting of (i) $200 million senior unsecured notes with a coupon of 4.68% due January 8, 2026 (“Series A”) and (ii) $400 million senior unsecured notes with a coupon of 4.86% due January 8, 2029 (“Series B”), (collectively referred to as the “Senior Unsecured Notes”). The transaction closed on December 4, 2018. Interest will be paid on January 8 and July 8 of each year until maturity, with the first payment occurring July 8, 2019. The notes are general unsecured senior obligations of the Company and are guaranteed by the Company and the subsidiaries of the Company. The Company applied a portion of the proceeds of the private placement transaction to repay the outstanding balances of the $600 million Americold 2010 LLC Trust, Commercial Mortgage Pass-Through Certificates, Series 2010, ART (2010 Mortgage Loans). The Company also used the remaining proceeds to extinguish the Australian term loan and the New Zealand term loan (ANZ Loans). See below for further detail regarding the early extinguishment of debt under Loss on debt extinguishment, modifications and termination of derivative instruments. On April 26, 2019, we priced a debt private placement transaction consisting of $350 million senior unsecured notes with a coupon of 4.10% due January 8, 2030 (“Series C”). The transaction closed on May 7, 2019. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring January 8, 2020. The initial January 8, 2020 payment will include interest accrued since May 7, 2019. The notes are general unsecured obligations of the Company and are guaranteed by the Company and the subsidiaries of the Company. The Company applied the proceeds of the private placement transaction to repay the indebtedness outstanding under our senior unsecured revolving credit facility incurred in connection with the funding of the Cloverleaf and Lanier acquisitions, and general corporate purposes. The Senior Unsecured Notes and guarantee agreement includes a prepayment option executable at any time during the term of the loans. The prepayment can be either a partial payment, or payment in full, as long as the partial payment is at least 5% of the outstanding principal. Any prepayment in full must include a make-whole amount, which is the discounted remaining scheduled payments due to the lender. The discount rate to be used is equal to 0.50% plus the yield to maturity reported for the most recently actively traded U.S. Treasury Securities with a maturity F-50 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) equal to the remaining average life of the prepaid principal. The Company must give each lender at least 10 day’s written notice whenever it intends to prepay any portion of the debt. If a change in control occurs for the Company, the Company must issue an offer to prepay the remaining portion of the debt to the lenders. The prepayment amount will be 100% of the principal amount, as well as accrued and unpaid interest. The Senior Unsecured Notes require compliance with leverage ratios, secured and unsecured indebtedness ratios, and unsecured indebtedness to qualified assets ratios. In addition, the Company is required to maintain at all times a debt rating for each series of notes from a nationally recognized statistical rating organization. The Senior Unsecured Notes agreement includes the following financial covenants: • • • • • a maximum leverage ratio of less than or equal to 60% of our total asset value; a maximum unsecured indebtedness to qualified assets ratio of less than 0.60 to 1.00; a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00; a minimum unsecured debt service ratio of greater than or equal to 2.00 to 1.00; and a maximum total secured indebtedness ratio of less than 0.40 to 1.00. As of December 31, 2019, the Company was in compliance with all debt covenants. 2013 Mortgage Loans On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which we refer to as the 2013 Mortgage Loans. The debt consists of a senior debt note and two mezzanine notes. The components are cross-collateralized and cross- defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the two mezzanine notes remain subject to yield maintenance provisions. We used the net proceeds of these loans to refinance certain mortgage loans, acquire two warehouses, and fund general corporate purposes. The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of December 31, 2019, the amount of restricted cash associated with the 2013 Mortgage Loans was $3.2 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The debt service coverage ratio as of December 31, 2019 was 1.76x. The 2013 Mortgage Loans are non-recourse to the Company, subject to customary non-recourse provisions as stipulated in the agreements. The mortgage loan also requires compliance with other financial covenants, including a debt coverage ratio and cash flow calculation, as defined. As of December 31, 2019, the Company was in compliance with all debt covenants. Debt Covenants The Company’s Senior Unsecured Credit Facilities, the Senior Unsecured Notes, and 2013 Mortgage Loans require financial statement reporting, periodic requirements to report compliance with established thresholds and performance measurements, and affirmative and negative covenants that govern allowable business practices of the Company. The affirmative and negative covenants include continuation of insurance, maintenance of collateral, the F-51 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) maintenance of REIT status, and the Company’s ability to enter into certain types of transactions or exposures in the normal course of business. As of December 31, 2019, the Company was in compliance with all debt covenants. Loss on debt extinguishment, modifications and termination of derivative instruments During 2018, the Company completed multiple refinancing and extinguishment of debt transactions resulting in an aggregate amount of $47.6 million each of which was recorded to “Loss on debt extinguishment, modifications and termination of derivative instruments”. During the first quarter of 2018, simultaneous with the IPO, the Company closed on a Senior Secured Term Loan A and repaid the Term Loan B. Shortly thereafter, the Company amended the facility by repaying a portion of the Term Loan A and increasing the capacity on the revolving credit facility. The total amount recorded as a result of these transactions totaled $21.4 million, representing the write-off of unamortized deferred financing costs and debt discount from Term Loan B. During the fourth quarter of 2018, the 2010 Mortgage Loans were extinguished. This resulted in an $18.5 million defeasance fee, as well as a $3.4 million write-off of unamortized deferred financing costs. Additionally, during the fourth quarter of 2018, the ANZ Loans were fully prepaid, which resulted in a write-off of $2.2 million in unamortized deferred financing costs and $1.8 million charge for termination of the related interest rate swaps. The aggregate maturities of indebtedness as of December 31, 2019, including amortization of principal amounts due under the mortgage notes for each of the next five years and thereafter, are as follows: Years Ending December 31: 2020 2021 2022 2023 2024 Thereafter Aggregate principal amount of debt Less unamortized deferred financing costs Total debt net of deferred financing costs Special Purpose Entity (SPE) Separateness (In thousands) 6,750 7,035 7,312 737,346 — 950,000 1,708,443 (12,996) 1,695,447 $ $ Each of the Company’s legal entities listed in the table below is a special purpose, bankruptcy remote entity, meaning that such entity’s assets and credit are not available to satisfy the debt and other obligations of either the Company or any of its other affiliates. ART Mortgage Borrower Propco 2013 LLC ART Mortgage Borrower Opco 2013 LLC 2013 Mortgage Notes Legal Entity/SPE Related Obligation For financial reporting purposes, the assets, liabilities, results of operations, and cash flows of each legal entity in the table above are included in the Company’s consolidated financial statements. Because each legal entity is separate and distinct from the Company and its affiliates, the creditors of each legal entity have a claim on the assets of such F-52 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) legal entity prior to those assets becoming available to the legal entity’s equity holders and, therefore, to the creditors of the Company or its other affiliates. 11. Derivative Financial Instruments The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company has entered into multiple interest rate swap agreements. The January 2019 agreement hedges $100 million of variable interest-rate debt, or 21%, of the Company’s outstanding variable-rate debt as of December 31, 2019. The August 2019 agreement hedges $225 million of variable interest-rate debt, or 47%, of the Company’s outstanding variable-rate debt as of December 31, 2019. Each agreement converts the Company’s variable-rate debt to a fixed-rate basis for the next five years, thus reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in interest rates. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $0.2 million will be reclassified as an increase to interest expense. The Company classifies cash inflows and outflows from derivatives within operating activities on the Consolidated Statements of Cash Flows. The Company is subject to volatility in foreign exchange rates due to foreign-currency denominated intercompany loans. The Company implemented cross-currency swaps to manage the foreign currency exchange rate risk on these intercompany loans. These agreements effectively mitigate the Company’s exposure to fluctuations in cash flows due to foreign exchange rate risk. These agreements involve the receipt of fixed USD amounts in exchange for payment of fixed AUD and NZD amounts over the life of the respective intercompany loan. The entirety of the Company’s outstanding intercompany loans receivable balances, $153.5 million AUD and $37.5 million NZD, were hedged under the cross-currency swap agreements at December 31, 2019. For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the next twelve months, the Company estimates that an additional $0.1 million will be reclassified as a decrease to interest expense. The Company classifies cash inflows and outflows from derivatives within operating activities on the Consolidated Statements of Cash Flows. The Company is subject to volatility in foreign currencies against its functional currency, the US dollar. Periodically, the Company uses foreign currency derivatives including currency forward contracts to manage its exposure to fluctuations in the CAD-USD exchange rate. While these derivatives are hedging the fluctuations in foreign currencies, they do not meet the strict hedge accounting requirements to be classified as hedging instruments. As a result, the changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of December 31, 2019, the Company had two outstanding foreign exchange forward contracts, which were entered into in conjunction with the funding of the Nova Cold Acquisition that were not designated as hedges in a qualifying hedging relationship. The first contract was entered into in December 2019 with a notional to purchase 217.0 million CAD and sell USD maturing on January 2, 2020. The second contract was entered into simultaneously with a notional to sell 217 million CAD and purchase USD maturing on January 31, 2020. The net unrealized gain F-53 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) (loss) on the change in fair value of the outstanding foreign exchange forward contracts included within “Foreign currency exchange gain (loss), net” on the accompanying Consolidated Statement of Operations for the year ended December 31, 2019 was less than ($0.1) million. 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 accompanying Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Consolidated Balance Sheets within “Accounts payable and accrued expenses”. The following table presents the fair value of the derivative financial instruments within “Other assets” and “Accounts payable and accrued expenses” as of December 31, 2019 and 2018 (in thousands): Designated derivatives Foreign exchange contracts Interest rate contracts Undesignated derivatives Foreign exchange forwards Total fair value of derivatives Derivative Assets As of December 31, Derivative Liabilities As of December 31, 2019 2018 2019 2018 1,376 $ 2,933 2,283 $ — — $ 3,505 2,546 6,855 $ — 2,283 $ 2,589 6,094 $ — — — — $ $ The following tables present the effect of the Company’s designated derivative financial instruments on the accompanying Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017, including the impacts to Accumulated Other Comprehensive Income (AOCI) (in thousands): Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative As of December 31, 2019 2018 2017 Location of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income As of December 31, 2019 2018 2017 (571) $ (1,422) $ 1,422 Interest expense $ 248 $ (1,191) $ (1,547) (879) — 2,283 — Foreign currency exchange gain, net — — Interest expense (264) 58 3,449 — — — (1,450) $ 861 $ 1,422 $ 42 $ 2,258 $ (1,547) Interest rate contracts Foreign exchange contracts Foreign exchange contracts Total designated cash flow hedges $ $ Total interest expense recorded in the Consolidated Statements of Operations was $94.4 million, $93.3 million and $114.9 million during the years ended December 31, 2019, 2018 and 2017, respectively. Total “Foreign currency exchange gain (loss), net”, recorded in the accompanying Consolidated Statements of Operations was nominal, $2.9 million and ($3.6) million during the years ended December 31, 2019, 2018, and 2017, respectively. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2019 and 2018, respectively. 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 Consolidated Balance Sheets (in thousands): F-54 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Offsetting of Derivative Assets December 31, 2019 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount Derivatives $ 6,855 $ — $ 6,855 $ (3,966) $ — $ 2,889 Gross Amounts Not Offset in the Consolidated Balance Sheet Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount Derivatives $ (6,094) $ — $ (6,094) $ 3,966 $ — $ (2,128) Gross Amounts Not Offset in the Consolidated Balance Sheet Offsetting of Derivative Assets December 31, 2018 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount Derivatives $ 2,283 $ — $ 2,283 $ — $ — $ 2,283 Gross Amounts Not Offset in the Consolidated Balance Sheet Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount Derivatives $ — $ — $ — $ — $ — $ — Gross Amounts Not Offset in the Consolidated Balance Sheet As of December 31, 2019, 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 $3.6 million. As of December 31, 2019, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at December 31, 2019, it could have been required to settle its obligations under the agreements at their termination value of $3.6 million. F-55 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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. Refer to Note 22 for additional details regarding the impact of the Company’s derivatives on AOCI for the years ended December 31, 2019, 2018 and 2017, respectively. 12. Sale-Leasebacks of Real Estate The Company’s outstanding sale-leaseback financing obligations of real estate-related long-lived assets as of December 31, 2019 and 2018 are as follows: 1 warehouse – 2010 11 warehouses – 2007 Total sale-leaseback financing obligations Maturity 7/2030 9/2027 Interest Rate as of December 31, 2019 10.34% 7.00%-19.59% 2019 2018 (In thousands) $ $ 18,994 $ 96,765 115,759 $ 19,265 99,655 118,920 In September 2010, the Company entered into a transaction by which it assigned to an unrelated third party its fixed price “in the money” purchase option of $18.3 million on a warehouse it was leasing in Ontario, California. The purchase option was exercised in September 2010, and the Company simultaneously entered into a new 20-year lease agreement with the new owner and received $1.0 million of consideration to use towards warehouse improvements. Under the terms of the new lease agreement, the Company will exercise control over the asset for more than 90% of the asset’s remaining useful life, and it has a purchase option within the last six months of the initial lease term at 95% of the fair market value as of the date such option is exercised. The transaction was accounted for as a financing whereby the Company recognized a long-lived asset equal to the purchase price of $18.2 million, a receivable of $1.0 million for the additional consideration, and a financing obligation of $19.2 million. During 2019 and 2018, the principal balance was amortized by nominal amounts. The long-lived asset is being depreciated on a straight-line basis over its remaining economic useful life and a proportionate amount of each periodic rental payment is being charged to interest expense on the effective-interest-rate method. In September 2007, the Company completed a sale-leaseback of 11 warehouses for gross proceeds of $170.7 million. Concurrent with the sale, the Company agreed to lease the properties for various initial terms of 10 to 20 years. The rent increases annually by 1.75%. The lease terms can be extended up to four times at the discretion of the Company, each for a five-year period. The leases are guaranteed by an unsecured indemnity from a related party and the Company had the ability to extend the lease through a period which exceeds 90.0% of the assets’ remaining useful lives. The transaction was accounted for as a financing with an amount of each periodic rental payment being charged to interest expense. The assets continue to be reflected as long-lived assets and depreciated over their remaining useful lives. In July 2013, the lease agreements for six of the 11 warehouses were amended. The amendments extended the expiration date on four of the warehouse leases to September 27, 2027, reduced the annual rent increases from 1.75% to 0.50% on five of the warehouse leases and released the guarantee by the unsecured indemnity from the related party. All of the 11 warehouses subject to the sale-leaseback transaction continue to be accounted for as a financing. F-56 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) As of December 31, 2019, future minimum lease payments, inclusive of certain obligations to be settled with the residual value of related long-lived assets upon expiration of the lease agreement, of the sale-leaseback financing obligations are as follows: Years Ending December 31: (In thousands) 2020 2021 2022 2023 2024 Thereafter Total minimum payments Interest portion Present value of net minimum payments 13. Lease Accounting Arrangements wherein we are the lessee: $ $ 17,087 17,351 17,619 17,892 18,170 115,090 203,209 (87,450) 115,759 We have operating and finance leases for land, warehouses, offices, vehicles, and equipment with remaining lease terms ranging from 1 to 33 years. Many of our leases include one or more options to extend the lease term from 1 to 10 years that may be exercised at our sole discretion. Additionally, many of our leases for vehicles and equipment include options to purchase the underlying asset at or before expiration of the lease agreement. Rental payments are generally fixed over the term of the lease agreement with the exception of certain equipment leases for which the rental payment may vary based on usage of the asset. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2019, the rights and obligations with respect to leases which have been signed but have not yet commenced are not material to our financial position or results of operations. The components of lease expense were as follows (in thousands): Components of lease expense: Operating lease cost (a) Financing lease cost: Depreciation Interest on lease liabilities Sublease income (b) Net lease expense Year Ended December 31, 2019 $ $ 29,205 11,252 2,941 (499) 42,899 (a) Includes short-term lease and variable lease costs, which are immaterial. (b) Sublease income relates to two warehouses in the U.S. and New Zealand. For the years ended December 31, 2018 and 2017, rent expense of $36.7 million and $42.3 million, respectively, was recorded pursuant to ASC 840, Leases. F-57 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Other information related to leases is as follows: Supplemental Cash Flow Information (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases Right-of-use assets obtained in exchange for lease obligations Operating leases Finance leases Weighted-average remaining lease term (years) Operating leases Finance leases Weighted-average discount rate Operating leases Finance leases Year Ended December 31, 2019 $ $ $ $ $ (24,992) (2,941) (13,339) 12,492 30,416 6.1 4.4 4.1% 5.5% Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows (in thousands): Operating Lease Payments Finance Lease Payments Years ending December 31, 2020 2021 2022 2023 2024 Thereafter Total future minimum lease payments Less: Interest Total future minimum lease payments less interest Reported as of December 31, 2019 Accounts payable and accrued expenses Operating lease obligations Finance lease obligations Total lease obligations Total Lease Payments 41,933 29,523 21,609 16,577 9,423 19,682 138,747 (17,986) 120,761 18,534 $ 17,217 11,987 8,538 4,827 5,386 66,489 (8,249) 58,240 $ 70 $ — 58,170 58,240 $ 249 62,342 58,170 120,761 23,399 $ 12,306 9,622 8,039 4,596 14,296 72,258 (9,737) 62,521 $ 179 $ 62,342 — 62,521 $ $ $ $ $ F-58 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Arrangements wherein we are the lessor: We receive lease income as the lessor for certain buildings and warehouses or space within a warehouse. The remaining term on existing leases ranges from 1 to 9 years. Lease income is generally fixed over the duration of the contract and each lease contract contains clauses permitting extension or termination. Lease incentives and options for purchase of the leased asset by the lessee are generally not included. The Company is party to operating leases only and currently does not have sales-type or direct financing leases. Lease income is included within “Rent, storage and warehouse services” in the accompanying Consolidated Statements of Operations as denoted in Note 27 “Revenues from Contracts with Customers”. Property, buildings and equipment underlying operating leases is included in “Land” and “Buildings and improvements” on the accompanying Consolidated Balance Sheets. The gross value and net value of these assets was $786.4 million and $600.1 million, for Land and Buildings and improvements, respectively, as of December 31, 2019. Depreciation expense for such assets was $23.1 million for the year ended December 31, 2019. Future minimum lease payments due from our customers on leases as of December 31, 2019 were as follows (in thousands): Year ending December 31, 2020 2021 2022 2023 2024 Thereafter Total 14. Fair Value Measurements Operating Leases 16,736 13,223 11,244 9,782 7,274 18,920 77,179 $ $ 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 loan are reported at their aggregate principal amount less unamortized deferred financing costs on the accompanying 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 as of each valuation date. The inputs used to estimate the fair value of the Company’s mortgage notes, senior unsecured notes, and term loan are comprised of Level 2 inputs, including senior industrial commercial real estate loan spreads, trading data on comparable unsecured industrial REIT debt, corporate industrial loan indexes, risk-free interest rates, and Level 3 inputs, such as future coupon and principal payments, and projected future cash flows. F-59 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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, 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. Refer to Note 20 for the fair value of the pension plan assets. 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 for the years ended December 31, 2019 and 2018. 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. Additionally, the assets and liabilities recorded through acquisitions are measured at fair value on a non-recurring basis. Refer to Note 2 for asset acquisitions and Note 3 for business combinations, and the respective purchase price allocation of the Company’s acquisitions. 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: Measured at fair value on a recurring basis: Interest rate swap asset Interest rate swap liability Cross-currency swap asset Foreign exchange forward contract asset Foreign exchange forward contract liability Assets held by various pension plans: $ Fair Value Hierarchy Level 2 Level 2 Level 2 Level 2 Level 2 Level 1 Level 2 Fair Value December 31, 2019 2018 (In thousands) 2,936 $ 3,507 1,404 2,546 2,589 35,317 33,991 — — 2,283 — — 30,281 29,456 Disclosed at fair value: Mortgage notes, senior unsecured notes and term loan(1) Level 3 $ 1,783,463 $ 1,365,812 (1)The carrying value of mortgage notes, senior unsecured notes and term loan is disclosed in Note 10. F-60 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 15. Dividends and Distributions In order to comply with the REIT requirements of the Internal Revenue Code, the Company is generally required to make common share distributions (other than capital gain distributions) to its shareholders at least equal to 90% of its REIT taxable income, as defined in the Code, computed without regard to the dividends paid deduction and net capital gains. The Company’s common share dividend policy is to distribute a percentage of cash flow to ensure distribution requirements of the IRS are met while allowing the Company to retain cash to meet other needs, such as principal amortization, capital improvements and other investment activities. Common share dividends are characterized for U.S. federal income tax purposes as ordinary income, qualified dividend, capital gains, non- taxable income return of capital, or a combination of the four. Common share dividends that exceed current and accumulated earnings and profits (calculated for tax purposes) constitute a return of capital rather than a dividend and generally reduce the shareholder’s basis in the common share. 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 declared and distributions paid to the holders of common shares and Series B Preferred Shares in 2019, 2018 and 2017: F-61 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Month Declared/Paid Dividend Per Share 2019 (Common Shares) Distributions Declared Distributions Paid (In thousands, except per share amounts) December (2018)/January $ 0.1875 $ — $ 28,218 December (a) — (127) December (2018)/January March/April $ 0.2000 — 30,235 7 30,235 March (b) March/April June/July June (c) — (142) $ 0.2000 — 38,764 15 38,764 — (172) June/July September/October $ 0.2000 — 38,795 13 38,795 October (d) — (170) September/October December/January (2020) $ 0.2000 $ — 38,796 146,590 $ 7 — 135,443 (a) Declared in December 2018 and included in the $28.2 million declared, see description to the right regarding timing of payment. (b) Declared in March and included in the $30.2 million declared, see description to the right regarding timing of payment. (c) Declared in June and included in the $38.8 million declared, see description to the right regarding timing of payment. (d) Declared in September and included in the $38.8 million declared, see description to the right regarding timing of payment. F-62 Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Month Declared/Paid Dividend Per Share 2018 Distributions Declared Distributions Paid Common Shares Series B Preferred Shares Common Shares Series B Preferred Shares (In thousands, except per share amounts) January (a) March/April $ $ 0.0186 $ 0.1396 1,291 $ 20,145 619 $ — 1,291 $ 20,145 619 March (c) — — (79) — March/April June/July $ 0.1875 — 27,250 — — 20 27,250 June (d) — — (118) June/July September/October $ 0.1875 — 28,072 — — 28 28,072 October(e) — — (114) September/October December/January (2019) — $ 0.1875 28,218 104,976 $ — — 28 — $ 76,523 Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). — — Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). Dividend equivalents accrued on unvested restricted stock units to be paid when the awards vest. Dividend equivalents paid on unvested restricted stock units that are not expected to vest (recognized as additional compensation). — — — — — Series B Preferred Shares - Fixed Dividend January (a) Total distributions paid to holders of Series B Preferred Shares (b) 1,198 1,198 $ 1,817 $ 1,817 (a) Stub period dividend paid to shareholders of record prior to the IPO. (b) Last participating and fixed dividend paid to holders of Series B Preferred Shares in connection with the conversion to common shares on the IPO date. (c) Declared in March and included in the $20.1 million declared, see description to the right regarding timing of payment. (d) Declared in June and included in the $27.3 million declared, see description to the right regarding timing of payment. (e) Declared in September and included in the $28.1 million declared, see description to the right regarding timing of payment. F-63 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Month Declared Dividend Per Share Distributions Paid Month Paid 2017 March June September December Common Shares Series B Preferred Shares (In thousands, except per share amounts) $ $ $ $ 0.0730 $ 0.0730 0.0730 0.0730 $ 5,053 $ 5,054 5,053 5,054 20,214 April July October December 2,421 2,422 2,421 2,422 9,686 (a) Series B Preferred Shares - Fixed Dividend Total distributions paid to holders of Series B Preferred Shares $ 18,750 (b) 28,436 (a) Participating dividend. (b) Paid in equal quarterly amounts along with the participating dividend. The dividends declared and paid to holders of Series A Preferred Shares were $0.001 million and $0.016 million for the years ended December 31, 2018 and 2017, respectively. In 2018, in connection with the IPO, all outstanding Series A Preferred Shares were redeemed and there were no dividends for the year ended December 31, 2019. For income tax purposes, distributions to preferred and common shareholders are characterized as ordinary income, capital gains, or as a return of shareholder invested capital. The composition of the Company’s distributions per common share and per preferred share is as follows: Common Shares Ordinary income Capital gains Return of capital Preferred Shares Ordinary income Capital gains Return of capital 2019 2018 2017 83% 0% 17% 100% 66% 0% 34% 100% 85% 0% 15% 100% 2019 2018 2017 N/A N/A N/A N/A 100% 0% 0% 100% 100% 0% 0% 100% 16. Partners’ Capital Allocations of Net Income and Net Losses to Partners The Operating Partnership’s net income will generally be allocated to Americold Realty Trust (the general partner) and the Operating Partnership’s limited partner, Americold Realty Operations Inc., and certain trustees of Americold Realty Trust, in accordance with the respective percentage interests in the units issued by the Operating Partnership. F-64 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Net loss will generally be allocated to the general partner and the Operating Partnership’s limited partners in accordance with the respective common percentage interests in the Operating Partnership until the limited partner’s capital is reduced to zero and any remaining net loss would be allocated to the general partner. However, in some cases, losses may be disproportionately allocated to partners who have guaranteed our debt. The allocations described above are subject to special allocations relating to depreciation deductions and to compliance with the provisions of Sections 704(b) and 704(c) of the Code, and the associated Treasury Regulations. Distributions All distributions on our units are at the discretion of Americold Realty Trusts’ Board of Trustees. We have declared and paid the following distributions to Americold Realty Trust for the years ended December 31, 2019, 2018 and 2017 (in thousands): Month Declared/Paid December (2018)/January March/April June/July September/October December/January (2020) Month Declared/Paid January (a) March/April June/July September/October December/January (2019) 2019 Distributions Declared $ — $ 30,235 38,764 38,795 38,796 146,590 $ $ 2018 Distributions Declared $ 3,242 $ 20,145 27,250 28,072 28,218 106,927 $ Distributions Paid 28,098 30,108 38,605 38,632 — 135,443 Distributions Paid 3,242 20,086 27,160 27,986 — 78,474 (a) Stub period distribution paid to Parent immediately prior to the IPO. $ Month Declared/Paid Distributions Paid 2017 March/April June/July September/October December $ $ F-65 12,161 12,171 12,162 12,172 48,666 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 17. Share-Based Compensation 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 and cliff vesting market performance-based awards are recognized on a straight-line basis over the employees’ 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. Aggregate share-based compensation charges were $15.9 million, $10.7 million and $2.4 million during the years ended December 31, 2019, 2018 and 2017, respectively. Approximately $12.8 million, $8.7 million and $2.4 million of these charges were considered routine share- based compensation expense, and were included as a component of “Selling, general and administrative” expense on the accompanying Consolidated Statements of Operations during the years ended December 31, 2019, 2018 and 2017, respectively. Approximately $3.1 million of share-based compensation expense was recorded during the year ended December 31, 2019 due to accelerated vesting of awards outstanding to former executives and an equity award modification upon trustee resignation, and were included as a component of “Acquisition, litigation and other” expense on the accompanying Consolidated Statements of Operations. Approximately $2.0 million of share-based compensation expense was recorded during the year ended December 31, 2018 as a result of modification to certain restricted stock units, and is included as a component of “Acquisition, litigation and other” expense on the accompanying Consolidated Statements of Operations. The award modifications and awards with accelerated vesting are discussed further under the section “Modification of Restricted Stock Units and Accelerated Vesting of Awards”. As of December 31, 2019, there was $24.7 million of unrecognized share ‑based compensation expense related to stock options and restricted stock units, which will be recognized over a weighted-average period of 1.9 years. Americold Realty Trust 2008 and 2010 Equity Incentive Plans During December 2008, the Company and the common shareholders approved the Americold Realty Trust 2008 Equity Incentive Plan (2008 Plan), whereby the Company may issue either stock options or stock appreciation rights based upon a reserved pool of 4,900,025 common shares. No additional awards may be granted under the 2008 Plan. During December 2010, the Company and the common shareholders approved the Americold Realty Trust 2010 Equity Incentive Plan (2010 Plan), whereby the Company could issue stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, and/or dividend equivalents with respect to the Company’s common shares, cash bonus awards, and/or performance compensation awards to certain eligible participants, as defined, based upon a reserved pool of 3,849,976 of the Company’s common shares. No additional awards may be granted under the 2010 Plan. Americold Realty Trust 2017 Equity Incentive Plan 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. On January 17, 2018, the Company’s shareholders approved the 2017 Plan. Equity-based awards issued under the 2017 Plan have the rights to receive dividend equivalents on an accrual basis. Dividend equivalents for market performance-based awards are forfeitable in the event of termination for cause or when voluntary departure occurs during the vesting period. Otherwise, dividend equivalents are accrued at the time of declaration and paid upon the vesting of the awards. Time-based awards have the right to receive nonforfeitable dividend equivalent distributions on unvested units throughout the vesting period. As of December 31, 2019 and 2018, the Company accrued $1.1 million and $0.4 million, respectively, of dividend equivalents on unvested units payable to employees and non-employee trustees. F-66 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Modification of Restricted Stock Units and Accelerated Vesting of Awards On January 4, 2018, the Company’s Board of Trustees approved the modification of awards to allow the grant of dividend equivalents to all participants in the 2010 Plan with respect to any and all vested restricted stock units of the Company that have not been settled or converted to shares pursuant to the 2010 Plan. On the same day, the Company’s Board of Trustees resolved that no further awards may be granted under the 2010 Plan after the approval of the 2017 Plan. As a result, the Company recognized share-based compensation expense of $2.0 million to reflect the change in fair value associated with the modification of the dividend equivalents rights of the outstanding equity awards under the 2010 Plan. During the first quarter of 2019, the Company’s Compensation Committee approved the modification of an award issued in 2018 to a member of the Board of Trustees upon his resignation. This modification immediately accelerated the next vesting tranche of 100,000 restricted stock units which otherwise would not have vested until 2020 assuming the trustee continued service, under the original award agreement. As a result of this modification, the Company recognized approximately $2.9 million of share-based compensation expense during the first quarter of 2019. Additionally, during the first quarter of 2019, the Company recognized accelerated share-based compensation expense of $0.2 million upon the termination of former executives, in accordance with the terms of their original award agreements. Restricted Stock Units 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. The grant date fair values for time-based restricted unit stock awards is equal to the closing market price of Americold Realty Trust common stock on the grant date. Performance-based and market performance-based restricted stock unit awards vest upon the achievement of the performance target, as well as completion of performance period. The following table summarizes restricted stock unit grants by grantee type during the years ended December 31, 2019, 2018 and 2017: Year Ended December 31 2019 2019 2018 2018 2017 2017 Grantee Type Trustees Employees Trustees Employees Trustees Employees Number of Restricted Stock Units Granted 18,267 504,984 373,438 1,263,751 18,348 141,288 Vesting Period 1 year 1-3 years 1-3 years 1-4 years 2-3 years 5 years $ $ $ $ $ $ Grant Date Fair Value (in thousands) 575 16,843 5,975 22,196 199 1,897 Of the restricted stock units granted for the year ended December 31, 2019, (i) 12,285 were time-based restricted stock units with a one-year vesting period issued to non-employee trustees in recognition of their efforts and oversight in the first year as a public company, (ii) 5,982 were time-based restricted stock units with a one-year vesting period issued to non-employee trustees as part of their annual compensation (iii) 261,816 were time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain employees and F-67 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) (iv) 243,168 were market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain employees. Of the restricted stock units granted for the year ended December 31, 2018, (i) 331,250 were time-based graded vesting restricted stock units with a three-year vesting period issued to non-employee trustees in connection with the IPO, (ii) 42,188 were time-based graded vesting restricted stock units with a one-year vesting period issued to non-employee trustees as part of their annual compensation, (iii) 659,751 were time-based graded vesting restricted stock units with various vesting periods ranging from one to four years years issued to certain employees and (iv) 604,000 were market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain employees. Of the restricted stock units granted for the year ended December 31, 2017, (i) 18,348 were time-based graded vesting restricted stock units with a two-year and a three-year vesting period issued to non-employee trustees as part of their annual compensation, (ii) 69,860 were time- based graded vesting restricted stock units with a five-year vesting period issued to certain employees a (iii) 71,428 were performance-based cliff vesting restricted stock units with a five-year vesting period based upon achievement of annual Company EBITDA performance against target. The following table provides a summary of restricted stock awards activity under the 2010 and 2017 Plans as of December 31, 2019: Restricted Stock Non-vested as of December 31, 2018 Granted Vested(1) Forfeited Non-vested as of December 31, 2019 Shares vested, but not released(1) Total outstanding restricted stock units Year Ended December 31, 2019 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 Aggregate Intrinsic Value (in millions) 1,028,256 $ 280,083 (443,481) (150,795) 714,063 $ 615,643 1,329,706 $ 26.3 25.0 21.6 46.6 71,428 $ — (14,286) — 57,142 $ 14,286 71,428 $ 1.8 2.0 0.5 2.5 587,500 $ 243,168 — (51,480) 779,188 $ — 779,188 $ 15.0 27.3 — 27.3 (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 dividend equivalents, but are not entitled to vote the shares until common shares are issued. The weighted average grant date fair value of these units is $9.29 per unit. During 2019, an additional 16,324 of these restricted stock units vested. Of the total restricted stock units vested, but not yet released, 613,605 time-based restricted stock units vested prior to January 1, 2019. The weighted average grant date fair value of restricted stock units granted during years 2019, 2018, and 2017 was $33.29, $17.21 and $13.13 per unit, respectively. During the year ended December 31, 2019 the weighted average grant date fair value of vested and converted restricted stock units was $17.34 and forfeited restricted stock units F-68 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) was $16.75. The weighted average grant date fair value of non-vested restricted stock units was $22.50 and $17.06 per unit as of December 31, 2019 and 2018, respectively. Market Performance-Based Restricted Stock Units During the year ended December 31, 2019, the Compensation Committee of the Board of Trustees approved the annual grant of market performance-based restricted stock units under the 2017 Plan to employees of the Company. The awards utilize relative total shareholder return (TSR) over a three-year measurement period as the market performance metric. Awards will vest based on the Company’s TSR relative to the RMZ over a three-year market performance period, or the Market Performance Period, commencing in January 1, 2019 and ending on December 31, 2021, as applicable (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. Vesting with respect to the market condition is measured based on the difference between the Company’s TSR percentage and the TSR percentage of the RMZ, or the RMZ Relative Market Performance. In the event that the RMZ Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of RSUs, as applicable, set forth below: Performance Level Thresholds High Level Target Level Threshold Level Below Threshold Level RMS Relative Market Performance above 75th percentile 55th percentile 30th percentile below 30th percentile Market Performance Vesting Percentage 200% 100% 50% 0% If the RMZ Relative Market Performance falls between the levels specified above, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels. Market performance-based restricted units granted during 2018 utilize absolute total shareholder return (TSR) over a three-year measurement period as the market performance metric. Awards will vest based on the Company’s TSR relative to the percentage appreciation (rounded to the nearest tenth of a percent), in the value per share of stock during the performance period, over a three-year market performance period, commencing on January 18, 2018 and ending on December 31, 2020 (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. In the event that the TSR upon completion of the market performance period is achieved at the “minimum,” “target” or “maximum” level as set forth below, the awards will become vested as to the market condition with respect to the percentage RSUs, as applicable, set forth below: Performance Level Thresholds Maximum Target Minimum TSR 12% 10% 8% Market Performance Percentage 150% of Target Award 100% of Target Award 50% of Target Award In the event TSR falls between 8% and 10%, TSR shall be determined using a straight line linear interpolation between 50% and 100% and in the event it falls between 10% and 12%, TSR shall be determined using a straight line linear interpolation between 100% and 150%. F-69 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) In the event that the Company’s TSR does not meet 50% of the Target Award (i.e., the minimum threshold listed above), the Restricted Stock Units shall be automatically forfeited and neither the Company nor any Subsidiary shall have any further obligations to the participant under the agreement. In no event will the number of RSUs that vest pursuant to the agreement exceed 150% of the Target Award. The fair values of the awards were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. The Company’s achievement of the market vesting condition is contingent on its TSR over a three-year market performance period, relative to the total stock price. Monte Carlo simulation is well-accepted for pricing market based awards, where the number of shares that will vest depends on the future stock price movements. For each simulated path, the TSR is calculated at the end of the performance period and determines the vesting percentage based on achievement of the performance target. The fair value of the RSUs is the average discounted payout across all simulation paths. Assumptions used in the valuations are summarized as follows: Award Date 2018 2019 Expected Stock Price Volatility 25% - 30% 22% Risk-Free Interest Rate 2.34% - 2.85% 2.40% - 2.43% Dividend Yield (1) N/A N/A (1) Dividends are assumed to be reinvested and therefore not applicable. Performance-Based Restricted Stock Units The grant of the performance-based restricted stock unit award in April 2017 resulted in a grant date fair value of $13.43 and was measured utilizing the Black-Scholes methodology. The Company’s achievement of the performance vesting condition was contingent on the achievement of Core EBITDA. The key assumptions used in the valuation of the April 2017 award were as follows: Award Date 4/10/2017 Expected Stock Price Volatility 30% Risk-Free Interest Rate 1.63% Dividend Yield 2% OP Units During the year ended December 31, 2019, upon recommendation by the Compensation Committee, the Board of Trustees approved the grant of OP units in connection with future grants made to the Board of Trustees and management of the Company at the Senior Vice President level or above. The recipient will have the option to elect their grant in the form of either restricted stock units or OP units. As a result of this election, a total of 20,190 time-based OP Units were granted to certain trustees as part of their annual compensation. The OP units will vest in one year, had an aggregate grant date fair value of $0.7 million, and had an aggregate intrinsic value of $0.7 million as of December 31, 2019. During the year ended December 31, 2019, there were no OP units granted to management of the Company. F-70 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Stock Options Activity The following table provides a summary of option activity for the year ended December 31, 2019: Outstanding as of December 31, 2018 Granted Exercised Forfeited or expired Outstanding as of December 31, 2019 Exercisable as of December 31, 2019 Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Terms (Years) 2,355,787 $ — (1,342,289) (219,000) 794,498 $ 301,500 $ 9.81 — 9.81 9.81 9.81 9.81 5.4 5.8 5.1 The total fair value at grant date of stock option awards that vested during the years ended December 31, 2019, 2018 and 2017 was approximately $0.9 million, $1.5 million and $1.6 million, respectively. The total intrinsic value of options exercised for the year ended December 31, 2019 and 2018 was $27.8 million and $38.8 million, respectively. There were no options exercised during the years ended December 31, 2017. 18. Income Taxes As discussed in Note 2, the Company operates in compliance with REIT requirements for federal income tax purposes. As a REIT, the Company must distribute at least 90 percent of its taxable income (including dividends paid to it by its TRSs). In addition, the Company must meet a number of other organizational and operational requirements. It is management’s intention to adhere to these requirements and maintain the Company’s REIT status. Most states where we operate conform to the federal rules recognizing REITs. On August 1, 2019, the Company issued OP Units of the Operating Partnership to unrelated third parties. As a result, the Operating Partnership is now a regarded partnership under federal tax law, and the Operating Partnership’s accompanying consolidated financial statements include the related provision balances for federal income taxes. Certain subsidiaries have made an election with the Company to be treated as TRSs in conjunction with the Company’s REIT election; the TRS elections permit us to engage in certain business activities in which the REIT may not engage directly. A TRS is subject to federal and state income taxes on the income from these activities. A provision for taxes of the TRSs and of foreign branches of the REIT is included in our consolidated financial statements. On December 22, 2017, the U.S. government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (TCJA) that significantly revised the U.S. tax code effective January 1, 2018 by, among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%, imposing a mandatory one-time deemed repatriation of unremitted foreign earnings (commonly referred to as the “transition tax”), limiting deductibility of interest expense and certain executive compensation, and implementing a territorial tax system. The full impact of this change in tax law is final and the Company completed its accounting for the tax effects of the TCJA as of December 31, 2018. As a result of adopting the TCJA, a $3.8 million non-recurring tax benefit was recognized in 2018 for the refund of alternative minimum tax credits. The Company determined that no inclusion was required for the transition tax in 2018. F-71 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The Company recorded an opening deferred tax liability of $9.6 million as part of its preliminary purchase price allocation on the acquisitions. This deferred tax liability primarily arose from book to tax basis differences in land, buildings and equipment and intangible assets acquired offset by certain liabilities assumed in the acquisition. Purchase accounting related to the deferred income tax assets and liabilities acquired in the acquisitions is preliminary and subject to change as additional information is obtained. The Company continues to assert that the undistributed earnings of its Argentine subsidiary are permanently reinvested. The Company changed its assertion for the earnings of its Canadian subsidiaries in 2018 due to the Company’s plans to remit cash in the future. During 2019 the Company recognized an amount of deferred tax liability related to the outside basis difference of $0.4 million in its Canadian subsidiaries. The Company plans on liquidating its Hong Kong subsidiary in 2020 and is, therefore, no longer asserting permanent reinvestment. However, the outside basis difference cannot be monetized in the US and, as a result, the associated deferred tax asset is not realizable in the near future. No additional income taxes have been provided for any additional outside basis difference inherent in the other foreign entities, as these amounts continue to be indefinitely reinvested in foreign operations. Undistributed earnings of the Argentine subsidiary amounted to approximately $13.8 million at December 31, 2019. The global intangible low-taxed income (GILTI) provisions of the TCJA impose a tax on the income of certain foreign subsidiaries in excess of a specified return on tangible assets used by the foreign companies. The Company continues to account for the GILTI inclusion as a period cost and thus has not recorded any deferred tax liability associated with GILTI. There was no taxable deemed dividend recorded for the Company for the 2019 tax year. The amount of taxable deemed dividend recorded for the Company for the 2018 tax year is $0.2 million. Also, as a result of IRS guidance issued during the third quarter of 2018, the Company now includes any GILTI as REIT qualified income. Following is a summary of the income/(loss) before income taxes in the U.S. and foreign operations: U.S. Foreign Pre-tax income 2019 2018 2017 (In thousands) $ $ 33,417 $ 9,588 43,005 $ 37,060 $ 7,306 44,366 $ (11,212) 19,997 8,785 F-72 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The benefit (expense) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows: Current U.S. federal State Foreign Total current portion Deferred U.S. federal State Foreign Total deferred portion Total income tax benefit (expense) 2019 2018 2017 (In thousands) $ $ (20) $ (670) (4,854) (5,544) 7,701 2,217 783 10,701 5,157 $ 4,424 $ (353) (3,604) 467 2,094 494 564 3,152 3,619 $ (4,848) (644) (7,559) (13,051) 2,277 (72) 1,453 3,658 (9,393) Income tax benefit (expense) attributable to income (loss) before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate of 21% to income (loss) before income taxes. The reconciliation between the statutory rate and reported amount is as follows: Income taxes at statutory rates Earnings (loss) from REIT - not subject to tax State income taxes, net of federal income tax benefit Provision to return Rate and permanent differences on non-U.S. earnings Change in valuation allowance Non-deductible expenses Change in uncertain tax positions Effect of Tax Cuts and Jobs Act REIT excise tax Other Total 2019 2018 2017 (In thousands) $ $ (9,031) $ 9,526 (542) 2 (971) 2,761 3,462 (367) — — 317 5,157 $ (9,317) $ 9,015 (187) 360 (1,228) (2,227) 4,021 347 3,797 — (962) 3,619 $ (2,987) (425) (445) (205) 668 2,950 (2,345) 94 (3,113) (4,772) 1,187 (9,393) F-73 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2018 are as follows: Deferred tax assets: Net operating loss and credits carryforwards Accrued expenses Share-based compensation Lease obligations Other assets Total gross deferred tax assets Less: valuation allowance Total net deferred tax assets Deferred tax liabilities: Intangible assets and goodwill Property, buildings and equipment Lease right-of-use assets Other liabilities Total gross deferred tax liabilities Net deferred tax liability 2019 2018 (In thousands) 11,806 $ 26,911 4,618 9,674 4,420 57,429 (16,043) 41,386 (8,739) (38,358) (9,674) (1,316) (58,087) (16,701) $ 14,062 25,889 4,709 — 241 44,901 (19,627) 25,274 (5,628) (35,672) — (1,144) (42,444) (17,170) $ $ As of December 31, 2019, the Company has gross U.S. federal net operating loss carryforwards of approximately $41.8 million, of which $20.4 million was generated prior to 2018 and will expire between 2032 and 2036. These losses are subject to an annual limitation under IRC section 382 as a result of our IPO and another ownership change experienced in March of 2019; however the limitation should not impair the Company’s ability to utilize the losses. The remaining $21.4 million was generated after 2017 and is subject to new laws as set forth by the TCJA and has no expiration date, but can only be utilized to offset up to 80% of future taxable income annually. The Company has gross state net operating loss carryforwards of approximately $36.1 million from its TRSs, which will expire at various times between 2020 and 2039. The Company has an Alternative Minimum Tax credit carryforward remaining in the amount of $2.2 million that can be used to offset regular tax until 2021 or any unused credit will continue to be partially refunded in 2019 and 2020 and fully refundable by 2021. Additionally, the Company has a federal Research and Experimentation Credit of approximately $0.9 million that will expire between 2036 and 2039. Annually we consider whether it is more-likely-than-not that the deferred tax assets will be realized. In making this assessment, we consider recent operating results, the expected scheduled reversal of deferred tax liabilities, projected future taxable benefits and tax planning strategies. In performing our quarterly valuation allowance assessment during 2019, we concluded that certain deferred tax liabilities totaling $9.6 million from acquisitions during the year would be available to offset deferred tax assets for one of our U.S. TRSs that were historically subject to a valuation allowance. These deferred tax liabilities are are expected to turn and subsequently generate taxable income in the future. The $9.6 million benefit was offset by a $6.0 million increase to the valuation allowance for additional deferred tax assets created by that TRS. Consequently, we reduced the valuation allowance by $3.6 million from $19.6 million in 2018 to $16.0 million in 2019 associated with these deferred tax assets. F-74 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended December 31, 2019, 2018 and 2017: Balance at December 31, 2016* Increases related to current-year tax positions Decreases related to prior-year tax positions Decreases due to lapse in statute of limitations Balance at December 31, 2017* Decreases due to lapse in statute of limitations Balance at December 31, 2018* Increase related to current-year tax positions Decreases due to lapse in statute of limitations Balance at December 31, 2019* Tax Interest Penalties Total (In thousands) $ $ 857 $ — — (73) 784 (353) 431 367 (431) 367 $ 19 $ 3 (4) (12) 6 (6) — — — — $ $ 8 — (8) — — — — — — — $ 884 3 (12) (85) 790 (359) 431 367 (431) 367 *Balance would favorably affect the Company’s effective tax rate if recognized. The Company’s unrecognized tax benefits include exposures related to positions taken on U.S. federal, state, and foreign income tax returns as of December 31, 2019. Due to the lapse in statutes of limitations during 2019, the Company reduced its unrecognized tax benefits related to U.S. federal and state exposures to zero offset by $0.4 million for a new position taken in a foreign jurisdiction at the end of 2019. In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities and the Company has accrued a liability when it believes it is more likely than not that the tax position claimed on tax returns will not be sustained by the taxing authorities on the technical merits of the position. Changes in the recognition of the liability are reflected in the period in which the change in judgment occurs. The Company accrues interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2019, the Company is generally no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2016. However, for U.S. income tax purposes, the 2012 and 2013 tax years were open, to the extent that net operating losses were generated in those years and continue to be subject to adjustments from taxing authorities in the tax year they are utilized. In the fourth quarter of 2016, the Company filed a ruling request with the IRS for confirmation of a tax position for which it believes qualifies (more likely than not) for the treatment historically applied by the Company. The Company settled the positions with the IRS in December 2017 and was required to make an excise tax payment in the amount of $4.3 million including interest to resolve the matter for years prior to 2017 and paid $0.6 million in 2018 to resolve the matter for 2017. The payments, excluding interest, are included in “Total income tax benefit (expense)” in the Consolidated Statement of Operations for the year ended December 31, 2017. F-75 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 19. Variable Interest Entities New Market Tax Credit On May 1, 2019, the Company assumed a financing arrangement born out of the New Markets Tax Credit (“NMTC” or “NMTC Transactions”) program. These financing arrangements were originated by Cloverleaf in 2015 to monetize state and federal tax credits related to the construction of a cold storage warehouse in Monmouth, Illinois. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (“the Act”) and is intended to induce capital investment in qualified lower income communities. The structure of the financing arrangement is such that Cloverleaf lent money to investment funds into which tax credit investors also made capital contributions. The tax credit investors receive the benefit of the resulting tax credits in exchange for their capital contributions to the investment funds. Tax credits were generated through contribution of the investment fund’s proceeds into special purpose entities having authority from the U.S. Department of Treasury to receive tax credits in exchange for qualifying investments. These entities, known as a Community Development Entities (“CDE”), made qualifying investments in the Monmouth, Illinois cold storage facility in the form of loans payable by Cloverleaf. The loan agreements for monies lent to the investments funds and amounts payable to the CDEs extend through 2045 but contain provisions permitting dissolution in 2022. This coincides with the conclusion of the seven-year compliance period during which the tax credits may be recognized and the NMTCs are subject to 100% recapture. Based on the nature of the arrangements, we expect them to dissolve in 2022. The Company has determined that the financing arrangement with the investment funds and CDEs contains a variable interest entity (“VIE”). The ongoing activities of the investment funds - collecting and remitting interest and fees and NMTC compliance - were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the investment funds. Management considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees to the structure; the tax credit investor’s lack of a material interest in the underling economics of the project; and the fact that the Company is obligated to absorb losses of the investment funds. The Company concluded that it is the primary beneficiary of the VIE and consolidated the investments funds and CDEs, as VIEs, in accordance with the accounting standards for consolidation. Through NMTC Transactions, the Company effectively received net loan proceeds equal to the tax credit investor’s contributions to the investment funds. At inception of the arrangement in 2015, the benefit of contributions by tax credit investor’s totaled approximately $5.6 million. The Company is recognizing the benefit of the contributions ratably over the life of the project which these proceeds were used to fund. As of December 31, 2019, the balance of the deferred contribution liability was $4.9 million, which is included in “Accounts payable and accrued expenses” on the Consolidated Balance Sheets. The Company is required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangement. Non- compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, could require the Company to indemnify the tax credit investors for any loss or recapture of NMTCs related to the financing until such time as the obligation to deliver tax benefits is relieved. The Company is in compliance with all applicable requirements and does not anticipate any credit recaptures will result in connection with this arrangement. F-76 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 20. Employee Benefit Plans Defined Benefit Pension and Post-Retirement Plans The Company has defined benefit pension plans that cover certain union and nonunion employees in the U.S. Benefits under these plans are based either on years of credited service and compensation during the years preceding retirement or on years of credited service and established monthly benefit levels. The Company also has a post-retirement plan that provides life insurance coverage to eligible retired employees (collectively, with the defined benefit plans, the U.S. Plans). The Company froze benefit accruals for the U.S. Plans for nonunion employees effective April 1, 2005, and these employees no longer earn additional pension benefits. The Company also has a defined benefit plan that covers certain employees in Australia and is referenced as superannuation (the Offshore Plan). The Company uses a December 31 measurement date for the U.S. Plans and the Offshore Plan. F-77 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Actuarial information regarding these plans is as follows: Change in benefit obligation: Benefit obligation – January 1, 2019 Service cost Interest cost Actuarial loss Benefits paid Plan participants’ contributions Foreign currency translation loss Effect of settlement Benefit obligation – end of year Change in plan assets: Fair value of plan assets – January 1, 2019 Actual return on plan assets Employer contributions Benefits paid Effect of settlement Plan participants’ contributions Foreign currency translation loss Fair value of plan assets – end of year Funded status Retirement Income Plan National Service-Related Pension Plan Other Post-Retirement Benefits 2019 (In thousands) Superannuation Total $ (43,364) $ (30,627) $ (678) $ (1,385) $ (76,054) — — (1,590) (3,251) (1,245) (4,167) 2,990 1,003 — — — — — — — (23) (62) — — — 152 (78) (49) (77) (78) (2,907) (7,557) 447 4,440 (12) 2 — (12) 2 152 (45,215) (35,036) (611) (1,152) (82,014) 34,958 23,277 6,804 1,339 4,556 1,011 (2,990) (1,003) — — — — — — 40,111 27,841 — — 152 — (152) — — — 1,502 59,737 237 58 11,597 2,560 (447) (4,440) — 12 (6) (152) 12 (6) 1,356 69,308 Amounts recognized on the consolidated balance sheet as of December 31, $ (5,104) $ (7,195) $ (611) $ 204 $ (12,706) 2019: Pension and post-retirement liability Accumulated other comprehensive loss (income) Amounts in accumulated other comprehensive loss consist of: Net loss (gain) Prior service cost Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Net (gain) loss Amortization of net (loss) gain Amortization of prior service cost Amount recognized due to special event Foreign currency translation loss $ (5,104) $ (7,195) $ (611) $ 204 $ (12,706) 6,417 4,501 6,417 4,501 — — (1,793) (1,509) — — — 788 (564) — — — (21) (21) — (94) 4 — 5 — 62 10,959 (15) 10,882 77 77 (78) — (28) 5 (5) (1,177) (2,069) (28) 10 (5) Total recognized in other comprehensive loss (income) $ (3,302) $ 224 $ (85) $ (106) $ (3,269) Information for plans with accumulated benefit obligation in excess of plan assets: Projected benefit obligation Accumulated benefit obligation Fair value of plan assets $ $ $ 45,215 $ 45,215 $ 40,111 $ 35,036 $ 35,036 $ 27,841 $ 611 $ 611 $ — $ 1,152 1,038 1,356 $ $ $ 82,014 81,900 69,308 F-78 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Change in benefit obligation: Benefit obligation – January 1, 2018 Service cost Interest cost Actuarial loss Benefits paid Plan participants’ contributions Foreign currency translation gain Benefit obligation – end of year Change in plan assets: Fair value of plan assets – January 1, 2018 Actual return on plan assets Employer contributions Benefits paid Plan participants’ contributions Foreign currency translation gain Fair value of plan assets – end of year Funded status Amounts recognized on the consolidated balance sheet as of December 31, 2018: Pension and post-retirement liability Accumulated other comprehensive loss (income) Amounts in accumulated other comprehensive loss consist of: Retirement Income Plan National Service-Related Pension Plan Other Post-Retirement Benefits 2018 (In thousands) Superannuation Total $ (45,386) $ (33,405) $ (691) $ (3,002) $ (82,484) (31) (78) (1,418) (1,199) 753 3,125 2,718 — — 930 — — — (20) 33 — — — (137) (246) (104) (2,741) 179 4,090 1,391 5,039 (21) 309 (21) 309 (43,364) (30,627) (678) (1,385) (76,054) 38,218 24,518 (2,042) (1,446) 1,499 1,135 (2,717) (930) — — — — 34,958 23,277 — — — — — — — 2,992 65,728 50 125 (3,438) 2,759 (1,391) (5,038) 21 (295) 21 (295) 1,502 59,737 $ (8,406) $ (7,350) $ (678) $ 117 $ (16,317) $ (8,406) $ (7,350) $ (678) $ 117 $ (16,317) 9,718 4,278 (92) 170 14,074 Net loss (gain) Prior service cost Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Net loss (gain) Amortization of net gain Amortization of prior service cost Amount recognized due to special event Foreign currency translation loss Total recognized in other comprehensive loss (income) Information for plans with accumulated benefit obligation in excess of plan assets: Projected benefit obligation Accumulated benefit obligation Fair value of plan assets $ $ $ $ 9,718 4,278 — — 3,337 (1,244) — — — (311) (715) — — — (92) — (34) — — — — 2,093 $ (1,026) $ (34) $ 65 13,969 105 105 (66) — (28) (64) 26 (132) $ 2,926 (1,959) (28) (64) 26 901 43,364 $ 43,364 $ 34,958 $ 30,627 $ 30,627 $ 23,277 $ 678 678 $ $ — $ 1,385 1,186 1,502 $ $ $ 76,054 75,855 59,737 F-79 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The components of net period benefit cost for the years ended December 31, 2019, 2018 and 2017 are as follows: Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of net loss (gain) Amortization of prior service cost Effect of settlement Net pension benefit cost Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of net loss Amortization of prior service cost Effect of settlement Net pension benefit cost Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of net loss (gain) Amortization of prior service cost Effect of settlement Net pension benefit cost $ $ $ $ December 31, 2019 Retirement Income Plan National Service-Related Pension Plan Other Post-Retirement Benefits (In thousands) — $ 1,590 (1,760) 1,509 — — 1,339 $ — $ 1,245 (1,176) 564 — — 633 $ — $ 23 — (4) — (5) 14 $ December 31, 2018 Retirement Income Plan National Service-Related Pension Plan Other Post-Retirement Benefits (In thousands) 31 $ 1,418 (2,047) 1,244 — — 646 $ 78 $ 1,199 (1,369) 715 — — 623 $ — $ 20 — — — — 20 $ National Service- Related Pension Plan Retirement Income Plan December 31, 2017 Other Post-Retirement Benefits (In thousands) $ $ 65 $ 1,583 (1,757) 1,889 — — 1,780 $ 504 $ 1,256 (1,175) 815 212 — 1,612 $ — $ 22 — (1) — (4) 17 $ F-80 Superannuation Total 78 49 (74) — 28 (5) 76 $ $ 78 2,907 (3,010) 2,069 28 (10) 2,062 Superannuation Total 137 104 (172) — 30 68 167 $ $ 246 2,741 (3,588) 1,959 30 68 1,456 Superannuation Total 153 120 (174) — 9 67 175 $ $ 722 2,981 (3,106) 2,703 221 63 3,584 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The service cost component of defined benefit pension cost and postretirement benefit cost are presented in “Selling, general and administrative” and all other components of net period benefit cost are presented in “Other (expense) income, net” on the Consolidated Statements of Operations. The Company recognizes all changes in the fair value of plan assets and net actuarial gains or losses at December 31 each year. Prior service costs and gains/losses are amortized based on a straight-line method over the average future service of members that are expected to receive benefits. All actuarial gains/losses are exposed to amortization over an average future service period of 6.3 years for the Retirement Income Plan, 7.4 years for the National Service-Related Pension Plan, 5.0 years for Other Post-Retirement Benefits, and 5.8 years for Superannuation as of December 31, 2019. The weighted average assumptions used to determine benefit obligations and net period benefit costs for the years ended December 31, 2019, 2018 and 2017 are as follows: Weighted-average assumptions used to determine obligations (balance sheet): Discount rate Rate of compensation increase Weighted-average assumptions used to determine net periodic benefit cost (statement of operations): Discount rate Expected return on plan assets Rate of compensation increase Weighted-average assumptions used to determine obligations (balance sheet): Discount rate Rate of compensation increase Weighted-average assumptions used to determine net periodic benefit cost (statement of operations): Discount rate Expected return on plan assets Rate of compensation increase December 31, 2019 Retirement Income Plan National Service- Related Pension Plan Other Post-Retirement Benefits Superan- nuation 3.00 % N/A 3.95 % 6.50 % 3.50 % 3.25 % N/A 4.15 % 6.50 % N/A 2.55 % N/A 3.70 % N/A N/A 2.30 % 3.25 % 3.70 % 5.00 % 3.25 % December 31, 2018 Retirement Income Plan National Service- Related Pension Plan Other Post-Retirement Benefits Superan- nuation 3.95 % 3.50 % 3.35 % 7.00 % 3.50 % 4.15 % N/A 3.65 % 7.00 % N/A 3.70 % N/A 3.10 % N/A N/A 3.70 % 3.25 % 3.70 % 6.00 % 4.00 % F-81 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Weighted-average assumptions used to determine obligations (balance sheet): Discount rate Rate of compensation increase Weighted-average assumptions used to determine net periodic benefit cost (statement of operations): Discount rate Expected return on plan assets Rate of compensation increase December 31, 2017 Retirement Income Plan National Service- Related Pension Plan Other Post-Retirement Benefits Superan- nuation 3.35 % 3.50 % 3.75 % 7.00 % 3.50 % 3.65 % N/A 4.15 % 7.00 % N/A 3.10 % N/A 3.40 % N/A N/A 3.70 % 4.00 % 4.20 % 6.00 % 4.00 % The estimated net loss for the defined benefit plans in the U.S. that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2020 is $1.6 million. There is no estimated prior service cost associated with this plan to be amortized from accumulated other comprehensive income during 2020. There is no estimated net gain for the Offshore Plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost during 2020. The estimated prior service cost associated with this plan to be amortized from accumulated other comprehensive income during 2020 is nominal. The Company determines the expected return on plan assets based on their market value as of December 31 of each year, as adjusted for a) expected employer contributions, b) expected benefit distributions, and c) estimated administrative expenses. Plan Assets The Company’s overall investment strategy is to achieve a mix of investments for long-term growth and near-term benefit payments. The Company invests in both U.S. and non-U.S. equity securities, fixed-income securities, and real estate. The allocations of the U.S. Plans’ and the Offshore Plan’s investments by fair value as of December 31, 2019 and 2018 are as follows: U.S. equities Non-U.S. equities Fixed-income securities Real estate Cash and other U.S. Plans Actual Offshore Plan Actual 2019 2018 Target Allocation 2019 2018 Target Allocation 35% 25% 35% 5% —% 35% 25% 35% 5% —% 25–55% 15–45% 15–40% 0–5% —% 20% 42% 8% 8% 22% 16% 46% 9% 8% 21% 19% 41% 13% 8% 19% F-82 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) To develop the assumption for the long-term rate of return on assets, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the U.S. Plans’ and Offshore Plan’s assets and the effect of periodic rebalancing, consistent with the Company’s investment strategies. For 2020, the Company expects to receive a long-term rate of return of 6.5% for the U.S. Plans and 5.0% for the Offshore Plan. All plans are invested to maximize the return on assets while minimizing risk by diversifying across a broad range of asset classes. The fair values of the Company’s pension plan assets as of December 31, 2019, by category, are as follow: Assets U.S. equities: Large cap(1) Medium cap(1) Small cap(1) Non-U.S. equities: Large cap(2) Emerging markets(3) Fixed-income securities: Money markets(4) U.S. bonds(5) Non-U.S. bonds(5) Real estate(6) Common/collective trusts Total assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2019 (In thousands) $ $ — $ — 1,360 12,919 4,060 — 10,172 6,806 — — 35,317 $ F-83 17,698 $ 3,404 1,360 — — 3,381 3,397 — 3,395 1,356 33,991 $ — $ — — — — — — — — — — $ 17,698 3,404 2,720 12,919 4,060 3,381 13,569 6,806 3,395 1,356 69,308 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The fair values of the Company’s pension plan assets as of December 31, 2018, by category, are as follows: Assets U.S. equities: Large cap(1) Medium cap(1) Small cap(1) Non-U.S. equities: Large cap(2) Emerging markets(3) Fixed-income securities: Money markets(4) U.S. bonds(5) Non-U.S. bonds(5) Real estate(6) Common/collective trusts Total assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2018 (In thousands) $ $ — $ — 1,165 11,065 3,494 — 8,735 5,822 — — 30,281 $ 15,141 $ 2,912 1,165 — — 2,912 2,912 — 2,912 1,502 29,456 $ — $ — — — — — — — — — — $ 15,141 2,912 2,330 11,065 3,494 2,912 11,647 5,822 2,912 1,502 59,737 (1) (2) (3) (4) (5) (6) Includes funds that primarily invest in U.S. common stock. Includes funds that invest primarily in foreign equity and equity-related securities. Includes funds that invest primarily in equity securities of companies in emerging market countries. Includes funds that invest primarily in short-term securities, such as commercial paper. Includes funds either publicly traded (Level 1) or within a separate account (Level 2) held by a regulated investment company. These funds hold primarily debt and fixed-income securities. Includes funds in a separate account held by a regulated investment company that invest primarily in commercial real estate and includes mortgage loans which are backed by the associated properties. The Company can call the investment in these assets with no restrictions. The U.S. Plans’ assets are in commingled funds that are valued using net asset values. The net asset values are based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The pension assets are classified as Level 1 when the net asset values are based on a quoted price in an active market. The U.S. Plans’ assets are classified as Level 2 when the net asset value is based on a quoted price on a private market that is not active and the underlying investments are traded on an active market. The Offshore Plans are common/collective trusts and commingled trusts investments, which invest in other collective trust funds otherwise known as the underlying funds. The Company’s interests in the commingled trust funds are based on the fair values of the investments of the underlying funds and therefore are classified as Level 2. As of December 31, 2019 and 2018, the Company does not have any investments classified as Level 3. F-84 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Cash Flow The Company expects to contribute to all plans an aggregate of $2.5 million in 2020. Estimated Future Benefit Payments The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid for all plans as of December 31, 2019: Years Ending December 31: 2020 2021 2022 2023 2024 Thereafter Multi-Employer Plans (In thousands) 7,796 5,090 5,034 4,862 4,867 22,846 50,495 $ $ 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 risks of participating in these multi-employer plans are different from single-employer plans in the following aspects: • Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other current or former participating employers. • • If a participating employer stops contributing to the multi-employer plan without paying its unfunded liability, the unfunded obligations of the plan may be borne by the remaining participating employers. If the Company chooses to cease participation in a multi-employer plan, such full withdrawal is subject to the payment of any unfunded liability applicable to the Company, referred to as a withdrawal liability. Additionally, such withdrawal is subject to collective bargaining. The table below outlines the Company’s participation in multi-employer pension plans for the periods ended December 31, 2019, 2018 and 2017, and sets forth the contributions into each plan. The “EIN/Pension Plan Number” column provides the Employer Identification Number (EIN) and the three-digit plan number. The most recent Pension Protection Act zone status available in 2018 and 2019 relates to the plans’ two most recent fiscal year-ends. The zone status is based on information that we received from the plans’ administrators and is certified by each plan’s actuary. Among other factors, plans certified in the red zone are generally less than 65% funded, plans certified in the orange zone are (i) less than 80% funded and (ii) have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans certified in the yellow zone are less than 80% funded, and plans certified in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates whether a financial improvement plan (FIP) for yellow/orange zone plans, or a rehabilitation plan (RP) for red zone plans, is F-85 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) either pending or has been implemented. As of December 31, 2019, all plans that have either a FIP or RP requirement have had the respective FIP or RP implemented (see table below). The Company’s collective-bargained contributions satisfy the requirements of all implemented FIPs and RPs and do not currently require the payment of any surcharges. In addition, minimum contributions outside the agreed-upon contractual rate are not required. For the plans detailed in the following table, the expiration dates of the associated collective bargaining agreements range from February 13, 2019 to June 30, 2026. For all the plans detailed in the following table, the Company has not contributed more than 5% of the total plan contribution for 2019, 2018 and 2017. The Company contributes to multi-employer plans that cover approximately 60% of union employees. The amounts charged to expense within the Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 were $18.0 million, $17.4 million and $17.0 million, respectively. Projected minimum contributions required for the upcoming fiscal year are approximately $17.3 million. During the third quarter of 2017, the Company recorded a charge of $9.2 million representing the present value of a liability associated with its withdrawal obligation under the New England Teamsters & Trucking Industry Multi-Employer Pension Fund (the Fund) for hourly, unionized associates at four of its domestic warehouse facilities. The Fund is 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. The Fund Trustees chose to create 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. The Company’s portion of the unfunded liability (undiscounted), estimated at $13.7 million, will be repaid in equal monthly installments of approximately $0.04 million 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. F-86 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Pension Fund EIN/Pension Plan Number Pension Protection Act Zone Status 2019 2018 FIP/RP Status Pending/ Implemented Americold Contributions 2019 2018 2017 Surcharge Imposed (In thousands) Central Pension Fund of the International Union of Operating Engineers and Participating Employers (2) 36-6052390 Green Green No $ 6 $ 6 $ 3 Central States SE & SW Areas Health and Welfare Pension Plans (1) 36-6044243 Red Red New England Teamsters & Trucking Industry Pension Plan (3) 04-6372430 Red Red Yes/ Implemented Yes/ Implemented Alternative New England Teamsters & Trucking Industry Pension Plan 04-6372430 Green Green I.U.O.E Stationary Engineers Local 39 Pension Fund (1) 94-6118939 Green Green United Food & Commercial Workers International Union- Industry Pension Fund (4) 51-6055922 Green Green Western Conference of Teamsters Pension Fund (1) 91-6145047 Green Green No No No No 9,238 8,424 8,427 456 456 566 449 194 105 493 160 98 197 90 87 7,398 7,632 7,265 Minneapolis Food Distributing Industry Pension Plan (1) 41-6047047 Green Green Yes/ Implemented 116 180 326 No No No No No No No No Total Contributions $ 17,962 $ 17,441 $ 16,969 (1) The status information is for the plans’ year end at December 31, 2019 and 2018. (2) The status information is for the plans’ year end at January 31, 2019 and 2018. (3) The status information is for the plans’ year end at September 30, 2019 and 2018. The Company withdrew from the multi-employer plan on October, 31, 2017. (4) The status information is for the plans’ year end at June 30, 2019 and 2018. Government-Sponsored Plans The Company contributes to certain government-sponsored plans in Australia and Argentina. The amounts charged to expense within the Consolidated Statements of Operations and for the years ended December 31, 2019, 2018 and 2017 were $5.8 million, $5.7 million and $5.4 million, respectively. Defined Contribution Plan The Company has defined contribution employee benefit plans, which cover all eligible employees. The plans also allow contributions by plan participants in accordance with Section 401(k) of the IRC. The Company matches a percentage of each employee’s contributions consistent with the provisions of the plans. The aggregate cost of our contributions to the 401(k) Plan charged to expense within the Consolidated Statements of Operations for each of the years ended December 31, 2019, 2018 and 2017 was $4.2 million, $3.9 million and $3.6 million, respectively. Deferred Compensation The Company has deferred compensation and supplemental retirement plan agreements with certain of its executives. The agreements provide for certain benefits at retirement or disability and also provide for survivor benefits in the event of death of the employee. The Company contribution amounts charged to expense relative to this plan were nominal for the years ended December 31, 2019, 2018 and 2017. F-87 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 21. Commitments and Contingencies Letters of Credit As of December 31, 2019 and 2018, there were $23.0 million and $29.6 million, respectively, of outstanding letters of credit issued on the Company’s Senior Unsecured Revolving Credit Facility. Bonds The Company had outstanding surety bonds of $4.3 million and $2.7 million as of December 31, 2019 and 2018, respectively. These bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations. The increase relates to utility bonds from the Cloverleaf Acquisition. Construction Commitments As of December 31, 2019, the Company had the following construction commitments related to its expansion of existing warehouse facilities: Facility Columbus, OH Savannah, GA Atlanta, GA Total construction commitments Collective Bargaining Agreements Committed construction cost (in thousands) $ $ 241 13,692 44,041 57,974 Expected construction completion period Q1 2020 Q2 2020 Q2 2021 As of December 31, 2019, worldwide we employed approximately 12,600 people. Currently, 49% of the Company’s labor force is covered by collective bargaining agreements, and 84 of our 178 warehouses have unionized associates that are governed by 74 different collective bargaining agreements. We are currently in negotiations for one new agreement which will bring our total to 75 agreements. During 2020, the Company will be renegotiating 19 collective bargaining agreements, covering all or parts of 26 operating warehouses worldwide. The Company does not anticipate any workplace disruptions during this renegotiation process. 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. F-88 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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 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. 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 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 F-89 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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. 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 seeks compensatory, consequential and/or punitive damages. The Company has 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 issued an order granting, in part, Americold’s request for an award of legal fees from Preferred Freezer and lifting the stay of the proceeding. The Company denies the allegations and believes PFS’s claims are without merit and intends to vigorously defend this claim. 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 consolidated financial statements. Jose Contreras Employment Putative Class Action On February 22, 2019, Plaintiff Jose Contreras (a former employee) filed a putative class action against the Company in the San Bernardino County Superior Court asserting that the Company: (1) failed to pay minimum wages; (2) failed to pay overtime wages; (3) failed to pay all vacation wages; (4) failed to provide meal periods; (5) failed to provide accurate wage statements; (6) failed to pay wages timely to terminated employees; and (7) violated California unfair business practices. On April 10, 2019, the Company filed an Answer and Affirmative Defenses in response to the complaint and successfully removed the case to federal court in the U.S. District Court for the Central District of California. On May 2, 2019, plaintiff filed a separate lawsuit for civil penalties under California’s Private Attorneys General Act (“PAGA”) in the San Bernardino Superior Court against the Company, Case No. CIV-DS-1913525 based on similar factual allegations that are asserted in the complaint. The Company successfully obtained a dismissal of the San Bernardino Superior Court Action. On June 18, 2019, the plaintiff amended his complaint in the pending federal court action to add a rest period violation claim and PAGA penalty claims based on similar allegations that are asserted in the complaint. Plaintiff’s counsel later dismissed plaintiff’s vacation wages claim from his first amended complaint. The Company denies the plaintiff’s claims and denies that plaintiff and the putative class members have been damaged in any respect or in any amount as a result of any act or omission by the Company. The Company also denies that this case is appropriate for class treatment and further asserts, among other grounds, that this case is unmanageable as a PAGA representative action. The Company has entered into a preliminary settlement of the case for $2.5 million. The settlement of the case is subject to court approval. 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 F-90 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 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 December 31, 2019, 2018, and 2017. 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 December 31, 2019. 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 December 31, 2019 and 2018. 22. Accumulated Other Comprehensive (Loss) Income The Company reports activity in AOCI for foreign currency translation adjustments, including the translation adjustment for the investment in the China JV prior to the sale of our interest, unrealized gains and losses on cash flow hedge derivatives, and minimum pension liability adjustments (net of tax). The activity in AOCI for the years ended December 31, 2019, 2018 and 2017 is as follows: F-91 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Pension and other postretirement benefits: Balance at beginning of period, net of tax Gain (loss) arising during the period Less: Tax expense (benefit) Net (loss) gain arising during the period Amortization of net loss and prior service cost (1) Net amount reclassified from AOCI to net income (loss) Other comprehensive (loss) income, net of tax Balance at end of period, net of tax Foreign currency translation adjustments: Balance at beginning of period, net of tax (Loss) gain on foreign currency translation Derecognition of cumulative foreign currency translation gain upon sale of partially owned entities (2) Net (loss) gain on foreign currency translation Balance at end of period, net of tax Cash flow hedge derivatives: Balance at beginning of period, net of tax Unrealized (loss) gain on cash flow hedge derivatives Less: Tax expense Net (loss) gain cash flow hedge derivatives Net amount reclassified from AOCI to net income (loss) (interest expense) Net amount reclassified from AOCI to net income (loss) (loss on debt extinguishment, modifications and termination of derivative instruments) Net amount reclassified from AOCI to net income (loss) (foreign exchange loss (gain), net) Balance at end of period, net of tax 2019 2018 2017 (In thousands) $ (8,027) $ (7,126) $ (12,880) 1,180 (2,926) 2,663 3 27 (49) 1,177 (2,953) 2,092 2,052 2,092 2,052 3,269 (901) 2,712 3,042 3,042 5,754 (4,758) (8,027) (7,126) (3,322) 8,318 (783) (11,640) (2,605) — 3,874 4,444 — (3,388) (11,640) 4,444 (6,710) (3,322) 8,318 (1,166) (1,422) (1,538) (1,450) — (1,450) 862 173 689 (1,387) 44 (1,431) (306) 1,191 1,547 — 1,825 264 (3,449) — — (2,658) (1,166) (1,422) Accumulated other comprehensive loss $ (14,126) $ (12,515) $ (230) (1) Amounts reclassified from AOCI for pension liabilities are recorded in selling, general, and administrative expenses in the Consolidated Statements of Operations. (2) Amount reclassified from AOCI for the derecognition of cumulative foreign currency translation gain related to the sale of partially owned entities is recognized in Gain from sale of partially owned entities in the Consolidated Statements of Operations. 23. Related-Party Transactions Transactions with Goldman Prior to the March 2019 secondary offering, Goldman was a significant shareholder of the Company. Goldman is considered a related party as a result of their ownership for a portion of the current year, and therefore, the Company has disclosed the fees paid to Goldman for various services provided. The Company continues to use services provided by Goldman in the ordinary course of business subsequent to Goldman’s complete disposition of ownership in March 2019. Affiliates of Goldman are part of the lending group under the 2018 Senior Unsecured Credit Facility, and have a $90.0 million, or 7.1%, total commitment. Another affiliate of Goldman was one of the lending group under the ANZ Loans (with a 2.5% participation in the Australia Term Loan and 31.8% in the New Zealand Term Loan), which the Company repaid during December 2018. Goldman was also the counterparty to the interest rate swap agreements, which were terminated in December 2018 in connection with the extinguishment of the ANZ Loans. F-92 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) As a member of the previously described lending groups, the Company is required to pay certain fees to Goldman, which may include interest on borrowings, unused facility fees, letter of credit participation fees, and letter of credit facility fees. The Company paid interest expense and fees to Goldman totaling approximately $1.4 million, $2.3 million, and $0.9 million for the years ended December 31, 2019, 2018, and 2017, respectively. Interest payable to Goldman was nominal as of December 31, 2019, 2018, and 2017. The net settlements of the terminated ANZ interest rate swap agreements are not included in the figures above and totaled approximately $1.2 million and $1.5 million for the years ended December 31, 2018 and 2017, respectively. In addition, a swap termination fee was paid to Goldman in 2018 of $1.8 million in conjunction with the extinguishment of the ANZ Loans. In connection with the April 2019 follow-on offering, the May 2019 debt private placement and the Cloverleaf Acquisition, Goldman received total fees of approximately $15.2 million. In connection with the secondary offering completed in March 2019, Goldman sold their remaining common shares of the Company, totaling 8,061,228 common shares, in an underwritten public offering. The Company did not receive any proceeds from the shares sold by Goldman and its affiliates in this offering. In connection with this transaction, Goldman received an underwriting fee of approximately$2.6 million. Although Goldman was no longer a significant shareholder of the Company, Bradley Gross, a partner at Goldman Sachs, remained on the Board of Trustees through May 22, 2019. Mr. Gross did not stand for re-election to the Board of Trustees in connection with the Company’s annual meeting of shareholders. In January 2019, the Company entered into an interest rate swap with Goldman to hedge the changes in the cash flows of variable interest rate payments on our outstanding 2018 Senior Unsecured Term Loan A Facility. Net settlements under the interest rate swap commenced during the three months ended March 31, 2019. The net settlement of the swap for the year ended December 31, 2019 was $0.2 million. In December 2018, the Company entered into cross-currency swaps with Goldman to fix the cash flows of interest and principal payments on our foreign-currency denominated intercompany loans. Refer to Notes 2 and 11 for more information regarding the cross-currency swaps. These cash flows under the cross currency swaps are made semi-annually and began during the third quarter of 2019. These payments are excluded from amounts disclosed above since they represent ongoing settlements of foreign exchange forwards. Additionally, the Company periodically enters into foreign exchange spot trades with Goldman to facilitate the movement of funds between our international subsidiaries and the U.S., including the funding of the previously mentioned intercompany loans. In connection with the follow-on offering completed in September 2018, Goldman sold 9,083,280 common shares, and after giving effect to the sale owned approximately 9.9% of the Company’s common shares. In connection with the follow-on offering, Goldman received an underwriting fee of approximately $5.0 million, and received a refund of approximately $0.7 million representing the underwriting discount on the gross proceeds received by the selling shareholders. In December 2017, the Company prepaid in escrow a $0.2 million fee to Goldman for its share of the 2018 Senior Secured Credit Facilities commitment, which was related to the refinancing that occurred in tandem with the IPO. In connection with the IPO, Goldman converted its Series B Preferred Shares into 28,808,224 common shares. After giving effect to the full exercise of the underwriters’ option to purchase additional common shares during the IPO, and after giving effect to the sale by Goldman of 5,163,716 common shares in the IPO, Goldman owned approximately 16.7% of the Company’s common shares. In connection with the IPO, Goldman received a refund from the underwriters of approximately $1.6 million, which represents the underwriting discount on the gross proceeds received by the selling shareholders. F-93 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 24. Geographic Concentrations The following table provides geographic information for the Company’s total revenues for the years ended December 31, 2019, 2018 and 2017, and total assets as of December 31, 2019 and 2018: Total Revenues Total Assets 2019 2018 2017 2019 2018 $ $ 1,509,401 $ 216,741 30,047 9,647 17,869 1,783,705 $ 1,313,811 $ 227,374 32,363 11,752 18,335 1,603,635 $ (In thousands) 1,253,879 $ 219,738 33,289 18,319 18,362 1,543,587 $ 3,812,761 $ 274,288 67,046 7,794 8,794 4,170,683 $ 2,242,078 226,666 51,419 7,154 5,111 2,532,428 U.S. Australia New Zealand Argentina Canada 25. Segment Information Our principal operations are organized into four reportable segments: Warehouse, Third-party managed, Transportation and Other. • Warehouse. Our primary source of revenues consists of rent and storage and warehouse services fees. Our rent and storage and warehouse services revenues are the key drivers of our financial performance. Rent and storage revenues consist of recurring, periodic charges related to the storage of frozen and perishable food and other products in our warehouses. We also provide these customers with a wide array of handling and other warehouse services, such as (1) receipt, handling and placement of products into our warehouses for storage and preservation, (2) retrieval of products from storage upon customer request, (3) blast freezing, which involves the rapid freezing of non-frozen products, including individual quick freezing for agricultural produce and seafood, (4) case-picking, which involves selecting product cases to build customized pallets, (5) kitting and repackaging, which involves assembling custom product packages for delivery to retailers and consumers, and labeling services, (6) order assembly and load consolidation, (7) exporting and importing support services, (8) container handling, (9) cross-docking, which involves transferring inbound products to outbound trucks utilizing our warehouse docks without storing them in our warehouses, and (10) government-approved temperature-controlled storage and inspection services. We may charge our customers in advance for storage and outbound handling fees. Cost of operations for our warehouse segment consists of power, other facilities costs, labor and other services costs. • • Third-party managed. We receive management and incentive fees, as well as reimbursement of substantially all expenses, for warehouses and logistics services that we manage on behalf of third-party owners/customers. Cost of operations for our third-party managed segment are reimbursed on a pass-through basis (typically within two weeks), with all reimbursements, plus an applicable mark- up, recognized as revenues under the relevant accounting guidance. Transportation. We charge transportation fees, including fuel surcharges, to our customers for whom we arrange the transportation of their products. Cost of operations for our transportation segment consist primarily of third-party carrier charges, which are impacted by factors affecting those carriers. F-94 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) • Other. In addition to our primary business segments, we own a limestone quarry in Carthage, Missouri. Revenues are generated from the sale of limestone mined at our quarry. Cost of operations for our quarry consist primarily of labor, equipment, fuel and explosives. 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 consolidated financial statements. Our chief operating decision maker uses revenues and segment contribution to evaluate segment performance. We calculate segment contribution as earnings before interest expense, taxes, depreciation and amortization, and excluding corporate selling, general and administrative expense, acquisition, litigation and other expense, 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. F-95 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The following table presents segment revenues and contributions with a reconciliation to Income before income tax benefit (expense) for the years ended December 31, 2019, 2018 and 2017: Segment revenues: Warehouse Third-party managed Transportation Other Total revenues Segment contribution: Warehouse Third-party managed Transportation Other Total segment contribution Reconciling items: Depreciation, depletion and amortization Selling, general and administrative expense Acquisition, litigation and other Impairment of long-lived assets (Loss) gain from sale of real estate, net Interest expense Interest income Bridge loan commitment fees Loss on debt extinguishment, modifications and termination of derivative instruments Foreign currency exchange gain (loss), net Other expense, net Loss from partially owned entities Gain from sale of partially owned entities Impairment of partially owned entities Income before income tax benefit (expense) $ F-96 Years Ended December 31, 2019 2018 2017 (In thousands) $ 1,377,217 $ 252,939 144,844 8,705 1,783,705 1,176,912 $ 259,034 158,790 8,899 1,603,635 1,145,662 242,189 146,070 9,666 1,543,587 447,591 11,761 18,067 838 478,257 (163,348) (129,310) (40,614) (13,485) (34) (94,408) 6,286 (2,665) — 10 (1,870) (111) 4,297 — 43,005 $ 374,534 14,760 15,735 620 405,649 (117,653) (110,825) (3,935) (747) 7,471 (93,312) 3,996 — (47,559) 2,882 (532) (1,069) — — 44,366 $ 348,328 12,825 12,950 2 374,105 (116,741) (99,616) (11,329) (9,473) 43 (114,898) 1,074 — (986) (3,591) (1,944) (1,363) — (6,496) 8,785 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) The following table details our long-lived assets by reportable segments, with a reconciliation to total assets reported for each of the periods presented in the accompanying Consolidated Balance Sheets. Assets: Warehouse Third-party managed Transportation Other Total segments assets Reconciling items: Corporate assets Investments in partially owned entities Total reconciling items Total assets 26. Earnings per Common Share Years Ended December 31, 2019 2018 (In thousands) 3,684,391 $ 47,867 50,666 13,467 3,796,391 2,054,968 43,725 35,479 13,554 2,147,726 374,292 — 374,292 4,170,683 $ 370,161 14,541 384,702 2,532,428 $ $ 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 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 are unvested. For the year ended December 31, 2019, the weighted-average number of unvested restricted stock units that participated in the distribution of common dividends was 1,405,421, of which 629,929 restricted stock units currently have vested but will not be settled until additional criteria are met. The shares issuable upon settlement of the 2018 forward sale agreement and 2019 forward sale agreement 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 applicable forward sale agreement 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 either forward sale agreement, the delivery of common shares would result in an increase in the number of shares outstanding and dilution to earnings per share. As of December 31, 2019, the Company has not settled any portion of the forward sale agreement. Prior to the IPO, holders of Series B Preferred Shares were entitled to cumulative dividends, which were added to the reported net loss whether or not declared or paid to determine the net loss attributable to common shareholders under the two-class method. F-97 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) A reconciliation of the basic and diluted weighted-average number of common shares outstanding for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted average common shares outstanding – basic Dilutive effect of share-based awards Equity forward contracts Weighted average common shares outstanding – diluted Year ended December 31, 2019 2018 2017 179,598 1,660 2,692 183,950 (In thousands) 141,415 2,662 261 144,338 70,022 — — 70,022 For the year ended December 31, 2017, potential common shares under the treasury stock method and the if-converted method were antidilutive because the Company reported a net loss. Consequently, the Company did not have any adjustments in these periods between basic and diluted loss per share related to stock options, restricted stock units, warrants and convertible preferred shares in this period. The table below presents the weighted-average number of antidilutive potential common shares that are not considered in the calculation of diluted income (loss) per share: Series B Convertible Preferred Stock Common share warrants Employee stock options Restricted stock units Equity forward contracts 27. Revenue from Contracts with Customers Disaggregated Revenue Year ended December 31, 2019 2018 2017 (In thousands) — — — 250 — 250 — — — — — — 33,240 18,575 5,983 685 — 58,483 The following tables represent a disaggregation of revenue from contracts with customers for the years ended December 31, 2019, 2018 and 2017 by segment and geographic region: F-98 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) United States Australia New Zealand Argentina Canada Total December 31, 2019 (In thousands) Warehouse rent and storage Warehouse services Third-party managed Transportation Other Total revenues (1) Lease revenue (2) Total revenues from contracts with all customers $ 502,674 $ 653,890 220,165 101,976 8,683 1,487,388 22,013 37,172 $ 124,045 14,886 40,638 — 216,741 — 15,942 $ 13,701 — 404 — 30,047 — 4,749 $ 3,072 — 1,826 — 9,647 — — $ — 17,869 — — 17,869 — 560,537 794,708 252,920 144,844 8,683 1,761,692 22,013 $ 1,509,401 $ 216,741 $ 30,047 $ 9,647 $ 17,869 $ 1,783,705 United States Australia New Zealand Argentina Canada Total December 31, 2018 (In thousands) Warehouse rent and storage Warehouse services Third-party managed Transportation Other Total revenues (1) Lease revenue (2) Total revenues from contracts with all customers $ 433,131 $ 522,748 227,757 99,736 8,877 1,292,249 21,562 39,573 $ 119,665 12,742 55,394 — 227,374 — 15,018 $ 16,634 — 711 — 32,363 — 5,694 $ 3,109 — 2,949 — 11,752 — — $ — 18,335 — — 18,335 — 493,416 662,156 258,834 158,790 8,877 1,582,073 21,562 $ 1,313,811 $ 227,374 $ 32,363 $ 11,752 $ 18,335 $ 1,603,635 United States Australia New Zealand Argentina Canada Total December 31, 2017 (In thousands) Warehouse rent and storage Warehouse services Third-party managed Transportation Other Total revenues (1) Lease revenue (2) Total revenues from contracts with all customers $ 413,647 $ 508,982 214,400 85,947 9,644 1,232,620 21,259 40,086 $ 116,287 9,227 54,138 — 219,738 — 17,695 $ 14,776 — 818 — 33,289 — 9,139 $ 4,013 — 5,167 — 18,319 — — $ — 18,362 — — 18,362 — 480,567 644,058 241,989 146,070 9,644 1,522,328 21,259 $ 1,253,879 $ 219,738 $ 33,289 $ 18,319 $ 18,362 $ 1,543,587 (1) Revenues are within the scope of ASC 606: Revenue From Contracts With Customers. Elements of contracts or arrangements that are in the scope of other standards (e.g., leases) are separated and accounted for under those standards. (2) Revenues are within the scope of Topic 842 and 840, Leases, for the applicable period. F-99 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) Performance Obligations Substantially all our revenue for warehouse storage and handling services, and management and incentive fees earned under third-party managed and other contracts is recognized over time as the customer benefits equally throughout the period until the contractual term expires. Typically, revenue is recognized over time using an output measure (e.g. passage of time). Revenue is recognized at a point in time upon delivery when the customer typically obtains control, for 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. At December 31, 2019, the Company had $658.2 million of remaining unsatisfied performance obligations from contracts with customers subject to a non-cancellable term and within contracts that have an original expected duration exceeding one year. These obligations also do not include variable consideration beyond the non-cancellable term, which due to the inability to quantify by estimate, is fully constrained. The Company expects to recognize approximately 26% of these remaining performance obligations as revenue in 2020, and the remaining 74% to be recognized over a weighted average period of 14.3 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 Consolidated Balance Sheets. Generally, billing occurs monthly, subsequent to revenue recognition, resulting in contract assets. However, the Company may bill and receive advances or deposits from customers, particularly on storage and handling services, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the accompanying 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 year ended December 31, 2019, were not materially impacted by any other factors. Opening and closing receivables balances related to contracts with customers accounted for under ASC 606 were $213.2 million and $192.1 million at December 31, 2019 and 2018, respectively. All other trade receivable balances relate to contracts accounted for under ASC 842 or 840, for the applicable period. Opening and closing balances in unearned revenue related to contracts with customers were $16.4 million and $18.6 million at December 31, 2019 and 2018, respectively. Substantially all revenue that was included in the contract liability balances at the beginning of 2018 and 2017 has been recognized as of December 31, 2019 and 2018, respectively, and represents revenue from the satisfaction of monthly storage and handling services with average inventory turns of approximately 30 days. F-100 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) 28. Selected Quarterly Financial Data (Americold Realty Trust) - Unaudited The following table sets forth selected unaudited quarterly statements of operations data for the years ended December 31, 2019 and 2018: Total revenues Total operating expenses Operating income Net income (loss) applicable to common shareholders Net income (loss) per common share (a) Basic Diluted December 31 September 30 June 30 March 31 2019 $ 485,984 $ 466,182 $ 438,460 $ (In thousands, except per share amounts) 439,405 46,579 20,809 0.11 0.10 426,797 39,385 27,091 0.14 0.14 409,375 29,085 4,891 0.03 0.03 393,079 376,662 16,417 (4,629) (0.03) (0.03) (a) Quarterly earnings per common share amounts may not total to the annual amounts due to rounding and the changes in the number of weighted common shares outstanding included in the calculation of basic and diluted shares. Total revenues Total operating expenses Operating income Net income (loss) applicable to common shareholders Net income (loss) per common share (a) Basic 2018 December 31 September 30 June 30 March. 31 $ 415,817 $ 402,010 $ 394,667 $ (In thousands, except per share amounts) 364,646 51,171 2,678 358,457 43,553 24,540 345,363 49,304 29,406 391,141 355,209 35,932 (10,457) 0.02 0.17 0.20 (0.08) Diluted (0.08) (a) Quarterly earnings per common share amounts may not total to the annual amounts due to rounding and the changes in the number of weighted common shares outstanding 0.17 0.02 0.20 included in the calculation of basic and diluted shares. 29. Selected Quarterly Financial Data (Americold Realty Operating Partnership, L.P.) - Unaudited The following table sets forth selected unaudited quarterly statements of operations data for the years ended December 31, 2019 and 2018: Total revenues Total operating expenses Operating income Net income (loss) applicable to unitholders Net income (loss) per unit (a) 2019 December 31 September 30 June 30 March 31 $ 485,984 $ 466,182 $ 438,460 $ (In thousands, except per share amounts) 439,405 46,579 20,809 426,797 39,385 27,091 409,375 29,085 4,891 393,079 376,662 16,417 (4,629) 0.11 0.14 0.03 (0.03) F-101 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Notes to Consolidated Financial Statements-(Continued) (a) Quarterly earnings per unit amounts may not total to the annual amounts due to rounding and the changes in the number of weighted units outstanding included in the calculation of units. Total revenues Total operating expenses Operating income Net income (loss) applicable to unitholders Net income (loss) per unit (a) 2018 December 31 September 30 June 30 March. 31 $ 415,817 $ 402,010 $ 394,667 $ (In thousands, except per share amounts) 364,646 51,171 2,678 358,457 43,553 24,540 345,363 49,304 29,406 391,141 355,209 35,932 (10,457) 0.02 0.17 0.21 (0.08) (a) Quarterly earnings per unit amounts may not total to the annual amounts due to rounding and the changes in the number of weighted units outstanding included in the calculation of units. 30. Subsequent Events (Unaudited) On January 2, 2020, the Company completed the purchase of all outstanding shares of Nova Cold for cash consideration of CAD $336.8 million (USD $257.1 million). Nova Cold consists 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. We have not yet completed our accounting assessment of the acquistion or completed our cost allocation or preliminary purchase price allocation, as applicable. On January 2, 2020, the Company completed the purchase of all outstanding membership interests of Newport Cold for cash consideration of $56.0 million. Newport Cold consists of a single temperature-controlled warehouse located in St. Paul, Minnesota. We have not yet completed our accounting assessment of the acquisition or completed our cost allocation or preliminary purchase price allocation, as applicable. On January 31, 2020, the Company received official notice from its customer to exercise its contractual call option to purchase land from the Company in Sydney, Australia, which was previously purchased by the Company for future development. Under the agreement with the customer, the Company will be reimbursed for its land purchase in Sydney and related costs. On February 20, 2020, the Company entered into a Share Purchase and Sale agreement to acquire a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. (SuperFrio) for Brazil Real Dollars 117.8 million, or approximately USD $26.4 million. Superfrio is a Brazilian based company that provides temperature-controlled storage and logistics services including: storage, warehouse services and transportation. F-102 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Land Buildings and Improvements (2) Total (4) (5) Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed US Albertville, AL Allentown, PA Amarillo, TX Anaheim, CA Appleton, WI Atlanta - Lakewood, GA Atlanta - Skygate, GA Atlanta - Southgate, GA Atlanta - Tradewater, GA Atlanta - Westgate, GA Atlanta, GA - Corporate Augusta, GA Babcock, WI Bartow, FL Belvidere-Imron, IL Belvidere-Landmark, IL (Cross Dock) Benson, NC (1) Birmingham, AL Boston, MA Brea, CA Brooklyn Park, MN Burley, ID Burlington, WA Carson, CA Cartersville, GA Carthage Quarry, MO Carthage Warehouse Dist, MO Chambersburg, PA (4) 1 $ 2 1 1 1 — $1,251 $ — 5,780 — 871 — 9,509 200 — 12,385 $ 47,807 4,473 16,810 5,022 1 1 1 1 1 — 1 1 1 1 1 1 1 1 1 1 2 3 1 1 — 1 1 — 4,297 — 1,851 — 1,623 — — — 2,270 — — — 2,678 — 852 — — — 2,000 — 1 — 3,660 1,002 964 — 1,855 — 4,645 — 1,600 — — 694 14,059 — 9,100 — 1,500 — 12,621 — 61,445 — 1,368 3,369 12,731 17,652 36,966 24,659 365 1,943 8,916 2,451 11,989 2,117 35,825 957 5,796 5,891 8,951 16,136 6,108 13,731 8,505 356 33,880 15,868 1,080 7,583 872 918 10,809 (1,539) 746 2,052 (4,140) (1,535) 14,333 1,062 141 641 3,676 639 2,019 2,286 6,106 2,025 — 2,838 895 10 2,410 1,941 — — 3,660 1,269 1,917 4,664 1,600 52 708 9,116 1,571 12,697 2,033 1,536 769 1,666 3,729 2,442 1,100 532 187 $1,298 $ 6,513 932 9,509 916 13,418 $ 14,716 $ 54,657 5,284 17,728 15,115 61,170 6,216 27,237 16,031 (5,794) (24,289) (2,576) (8,375) (4,445) (2,165) (4,387) (6,769) (6,054) (10,278) (4,617) (1,616) (2,941) (2,417) (6,245) (4,001) (857) (892) (2,595) (2,778) (4,406) (13,720) (4,063) (4,853) (3,594) (3,088) (21,143) (60) 1993 1976 1973 1965 1989 1963 2001 1996 2004 1990 1999/2014 1971 1999 1962 1991 1991 1997 1963 1969 1975 1986 1959 1965 2002 1996 N/A 1972 1994 2008 2008 2008 2009 2009 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2019 2008 2008 2009 2009 2008 2008 2009 2009 2008 2008 2019 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5,488 13,309 19,041 26,720 23,369 14,698 2,845 9,014 3,082 15,255 4,059 35,825 2,723 7,270 6,641 10,617 19,813 8,536 14,815 8,966 467 6,127 15,328 21,327 32,826 25,394 14,698 5,683 9,909 3,092 17,665 4,059 39,485 3,992 9,187 11,305 12,217 19,865 9,244 23,931 10,537 13,164 6,109 62,356 — 1,368 39,078 101,434 17,236 15,868 F-103 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Cherokee, IA (1) Chesapeake, VA (1) Chillicothe, MO (1) City of Industry, CA Clearfield, UT Clearfield 2, UT Columbia, SC Columbus, OH (1) Connell, WA Dallas, TX Delhi, LA Denver-50th Street, CO Dominguez Hills, CA Douglas, GA Eagan, MN (1) East Dubuque, IL East Point, GA Fairfield, OH (1) Fairmont, MN (1) Fort Dodge, IA Fort Smith, AR Fort Smith - Highway 45, AR (1) Fort Worth-Blue Mound, TX Fort Worth- Samuels, TX Fremont, NE Ft. Worth, TX (Meacham) Ft. Worth, TX (Railhead) Gadsden, AL Gaffney, SC 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 2 1 1 1 1 1 Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Land Buildings and Improvements (2) — 580 — 2,740 670 — — — — 2,881 — 806 768 — — 2,440 — 497 — 1,468 539 15,873 8,343 13,452 44,905 1,455 14,945 21,569 1,429 38,939 8,728 14,385 12,228 3 17,932 26 1,746 4,801 1,352 1,069 5,497 1,156 13,246 502 580 2,757 670 137 2,176 1,124 860 2,775 508 2,929 580 8,346 31,367 44,931 3,064 20,451 22,603 2,406 44,101 9,873 26,170 12,689 Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition (223) (388) (976) (2,357) (8,590) (1,863) (1,131) (739) (4,178) (7,364) (6,585) 1965 1991 1999 1962 1973 2017 1971 1996 1969 1994 2010 2019 2019 2019 2009 2008 2017 2008 2019 2008 2009 2010 Life on Which Depreciation is Computed 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years Total (4) (5) 8,926 34,124 45,601 3,201 22,627 23,727 3,266 46,876 10,381 29,099 13,269 — — 1,724 543 — 2,267 2,267 (2,061) 1974 2008 5 - 40 years — 11,149 400 — — 6,050 — 722 — 1,884 — 1,880 — 1,650 — 1,022 308 — — 2,245 10,894 2,080 49,441 13,764 3,621 20,849 13,738 7,162 2,231 51,998 1,173 1,780 44 620 3,537 11,162 401 6,050 753 2,020 — 1,880 1,650 34 1,226 1,193 342 2,030 12,054 3,859 49,485 14,353 7,022 20,849 13,772 8,151 4,227 23,216 4,260 55,535 15,106 9,042 22,729 15,422 9,377 4,569 (4,900) (1,330) (1,083) (4,765) (2,204) (513) (314) (3,442) (1,385) 1989 1969 1964 1993 1959 1993 1968 1979 1958 2009 2009 2019 2008 2016 2019 2019 2008 2008 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years — 2,245 51,998 54,243 (1,176) 1987 2019 5 - 40 years — 1,700 5,055 1,548 1,700 6,603 8,303 (1,884) 1995 2009 5 - 40 years — 1,985 629 26,984 13,447 3,109 2,886 5,896 2,109 691 16,209 8,943 18,318 9,634 (6,694) (4,412) 1977 1968 2009 2008 5 - 40 years 5 - 40 years — 5,610 24,686 3,111 5,873 27,534 33,407 (10,642) 2005 2008 5 - 40 years 23,384 — 1,857 100 — 1,000 8,536 9,820 3,263 595 (857) 152 1,955 351 1,000 9,033 8,712 3,415 10,988 9,063 4,415 (3,828) (2,834) (1,323) 1998 1991 1995 2008 2013 2008 5 - 40 years 5 - 40 years 5 - 40 years F-104 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Land Buildings and Improvements (2) Total (4) (5) Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed Gainesville, GA Gainesville - Candler, GA (2) Garden City, KS Gateway, GA Geneva Lakes, WI Gloucester - Rogers, MA Gloucester - Rowe, MA Gouldsboro, PA Grand Island, NE Green Bay, WI Greenville, SC Hatfield, PA Henderson, NV Hermiston, OR Houston, TX Indianapolis, IN Jefferson, WI Johnson, AR (1) Lakeville, MN (1) Lancaster, PA LaPorte, TX Le Mars, IA (1) Leesport, PA Lowell, AR (1) Lula, GA (2) Lynden, WA Marshall, MO Massillon 17th, OH Massillon Erie, OH 1 1 1 2 1 1 1 1 1 2 1 2 2 1 1 4 2 1 1 1 1 1 1 1 1 5 1 1 1 — 400 5,704 1,035 411 6,728 7,139 (2,494) 1989 2009 5 - 40 years 716 — — 446 — 3,271 — 1,579 3,258 4,721 19,693 36,020 — 1,549 (7,211) 3,042 716 446 3,197 2,265 3,258 6,270 12,556 38,376 3,974 6,716 15,753 40,641 (126) (2,322) (8,367) (12,359) 1995 1980 1972 1991 2019 2008 2008 2009 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years — 1,683 3,675 3,073 1,818 6,613 8,431 (2,080) 1967 2008 5 - 40 years 32,851 — 1,146 — 4,224 430 — — — — 200 — 5,002 — 9,043 1,322 — 1,454 — 1,897 — 1,553 — 6,159 — 4,000 — 2,203 — 2,945 — 1,000 — 1,206 — 2,610 — 3,864 — 1,420 741 175 — 10,544 — — 2,833 29,473 6,542 2,028 1,108 28,286 14,415 7,107 10,084 18,991 19,805 24,802 47,790 15,670 19,263 12,596 14,112 31,984 35,382 8,590 10,304 15,322 1,988 6,763 2,643 (2,286) 2,841 396 9,461 1,082 425 1,264 19,772 1,676 1,272 4,930 479 69 203 5,795 9,048 1,378 1,525 3,860 1,880 — 6,159 4,000 33 2,371 758 3,332 2,863 1,107 176 1,677 11,913 — 2,610 — 3,864 1,430 826 414 — 964 379 498 516 F-105 9,470 31,410 4,207 4,800 1,501 36,954 15,492 7,476 11,277 36,800 21,154 24,802 47,823 16,260 21,739 12,665 25,554 31,984 35,382 9,544 10,598 15,581 2,504 10,742 36,340 4,686 4,869 1,704 42,749 24,540 8,854 12,802 40,660 23,034 30,961 51,823 18,631 25,071 13,772 27,231 34,594 39,246 10,974 11,424 15,995 2,504 (3,317) (9,441) (2,005) (2,618) (1,225) (13,412) (5,221) (3,045) (3,703) (13,090) (8,585) (807) (1,084) (5,306) (7,560) (345) (7,428) (833) (954) (3,838) (4,225) (5,753) (2,465) 1955 2006 1995 1935 1962 1983 1988 1975 1990 1975 1975 1955 1970 1993 1990 1991 1993 1992 1996 1946 1985 2000 1984 2008 2009 2008 2009 2009 2009 2009 2008 2009 2008 2009 2019 2019 2009 2009 2019 2008 2019 2019 2009 2008 2008 2008 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Land Buildings and Improvements (2) Total (4) (5) Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed — — 80 2 (81) — 1 1 (1) Memphis Chelsea , TN Middleboro, MA Milwaukie, OR Mobile, AL Modesto, CA Monmouth, IL (1) Montgomery, AL Moses Lake, WA Murfreesboro, TN Nampa, ID Napoleon, OH (1) New Ulm, MN North Little Rock, AR (1) Oklahoma City, OK Ontario, CA Ontario, OR Pasco, WA Pendergrass, GA Perryville, MD (4) Phoenix2, AZ Piedmont, SC Plover, WI Portland, ME Rochelle, IL (Americold Drive) Rochelle, IL (Caron) Russellville, AR - Elmira Russellville, AR - Route 324 (1) Russellville, AR - Valley Salem, OR 1 2 1 6 1 1 1 1 4 1 7 1 1 3 4 1 1 1 1 1 1 1 1 1 1 1 1 4 — 404 — 2,473 — 10 — 2,428 — 2,660 15,031 8,112 3,203 19,594 48,348 155 1,639 765 4,491 435 2,483 17 2,915 15,155 15,590 9,741 12,224 3,978 3,961 23,598 26,513 (514) (5,726) (1,474) (10,426) — 2,660 48,348 51,008 (910) 6,689 850 7,746 (505) 1,157 6,934 8,091 (2,449) 30,357 575 11,046 2,480 1,140 12,961 14,101 (5,300) — 1,094 — 1,588 — 2,340 — 725 10,936 11,864 57,677 10,405 3,573 2,099 34 1,109 1,332 1,719 2,340 822 14,271 15,603 13,832 15,551 57,711 60,051 11,417 12,239 (6,616) (7,523) (1,284) (4,032) — 1,680 12,841 14,661 2,226 26,956 29,182 (382) 1972 2018 1958 1976 1945 2014 1989 1967 1982 1946 1974 1984 1996 — 742 — 14,673 — — — 557 2,411 3,632 13,791 15,809 1,151 24,506 9,127 413 742 14,745 1,264 588 3,562 4,304 28,066 42,811 21,654 22,918 16,191 16,779 1968 (1,708) (12,139) 1987(1)/1984(2)/1983(3) (13,095) (5,347) 1962 1984 — 500 12,810 2,649 580 15,379 15,959 — 1,626 — 3,182 — 500 1,390 — 305 34,297 19,083 11,312 9,883 18,298 2,402 8 28 1,441 5,024 917 1,626 3,182 506 1,994 316 19,091 20,717 11,340 14,522 11,318 11,824 22,718 24,712 3,624 3,308 (6,149) (58) (2,245) (4,655) (9,901) (1,042) — 1,860 18,178 48,054 4,326 63,766 68,092 (9,330) — 2,071 36,658 734 2,213 37,250 39,463 (14,631) — 1,261 9,910 3,185 1,352 13,004 14,356 (6,199) — 2,467 29,179 (71) 2,494 29,081 31,575 (730) — 708 3,055 39,370 15,832 21,096 2,466 3,534 708 3,211 18,298 19,006 24,474 27,685 (5,829) (11,419) 1993 2007 2014 1981 1981 1952 1995 2004 1986 1993 1995 1963 F-106 2008 5 - 40 years 2018 2008 2009 2009 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 2019 5 - 40 years 2013 5 - 40 years 2008 5 - 40 years 2008 2008 2019 2009 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 2019 5 - 40 years 2008 2008 2008 2008 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 2009 5 - 40 years 2019 2014 2009 2008 2008 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 2008 5 - 40 years 2008 5 - 40 years 2008 5 - 40 years 2019 5 - 40 years 2008 2008 5 - 40 years 5 - 40 years Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Salinas, CA Salt Lake City, UT San Antonio - HEB, TX San Antonio, TX Sanford, NC (1) Savannah, GA (3) Sebree, KY Sikeston, MO Sioux City - 2640, IA (1) Sioux City - 2900, IA (1) Sioux Falls, SD Springdale, AR St. Louis, MO St. Paul, MN Strasburg, VA Sumter, SC (1) Syracuse, NY Tacoma, WA Tampa Plant City, FL Tarboro, NC Taunton, MA Texarkana, AR Tomah, WI Turlock, CA (#1) Turlock, CA (#2) Vernon 2, CA Victorville, CA Waco, TX (1) Walla Walla, WA 5 1 1 3 1 1 1 1 1 1 1 1 2 2 1 1 2 1 2 1 1 1 1 2 1 1 1 — 2 — 7,244 — — — 2,014 — 1,894 — 3,110 — 20,715 638 — 258 — — 5,951 — 3,070 856 — 844 7,851 — 2,082 — 1,800 — 1,551 — 530 — 2,177 — — 17,545 — 1,333 1,078 — 1,477 842 3,628 886 19,047 — 944 — 3,091 — 8,100 — 2,810 — 3,003 215 — 7,181 22,481 22,902 11,101 34,104 10,456 7,895 11,936 28,391 56,336 4,780 10,754 7,566 12,129 15,038 8,738 20,056 21,216 11,836 9,586 14,159 11,169 10,715 4,056 7,004 13,490 22,811 — 4,693 Costs Capitalized Subsequent to Acquisition 9,670 3,767 Land 8,098 — — 2,014 2,021 2,566 23 3,110 52 20,715 638 635 2,339 2,685 Buildings and Improvements (2) 15,997 26,248 22,902 13,540 34,127 10,508 8,530 12,540 Total (4) (5) 24,095 26,248 24,916 15,561 37,237 31,223 9,168 14,879 Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition (6,268) (14,083) (3,424) (7,666) (794) (433) (2,731) (4,428) 1958 1998 1982 1913 1996 2015 1998 1998 2009 2010 2017 2009 2019 2019 2008 2009 Life on Which Depreciation is Computed 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 101 5,951 28,492 34,443 (902) 1990 2019 5 - 40 years 56,366 8,498 12,025 9,400 12,787 16,523 8,738 25,472 23,632 59,436 9,537 12,897 11,598 14,587 18,115 9,268 27,892 23,659 12,485 10,469 14,973 12,532 11,100 4,323 8,428 16,659 23,886 13,865 11,694 16,668 13,453 12,023 5,290 11,544 24,771 26,696 — 3,507 5,518 5,359 (1,385) (4,183) (4,951) (3,079) (5,148) (5,554) (306) (9,581) (7,605) (4,350) (3,756) (4,914) (4,079) (4,546) (1,970) (3,457) (7,383) (8,359) — (3,107) 1995 1972 1982 1956 1970 1999 1979 1960 2010 1987 1988 1999 1992 1989 1995 1985 1965 2004 N/A 1960 2019 2008 2008 2009 2009 2008 2019 2008 2010 2009 2008 2009 2008 2008 2008 2008 2009 2008 2019 2008 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years N/A 5 - 40 years 30 3,901 1,299 1,950 658 1,526 — 5,659 2,443 696 1,030 1,032 1,442 422 290 1,449 3,181 1,075 504 610 3,070 1,039 872 2,198 1,800 1,592 530 2,420 27 1,380 1,225 1,695 921 923 967 3,116 8,112 2,810 3,507 159 F-107 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Buildings 1 1 1 1 1 1 Encumbrances (3) Land 690 — — — — 1,460 — 1,297 — 1,552 — 3,838 Costs Capitalized Subsequent to Acquisition 727 424 2,766 1,355 2,561 2,169 Land 711 21 2,284 1,432 1,627 4,063 Buildings and Improvements 2,645 8,138 12,300 4,717 9,860 36,621 — 1,300 800 — 7,351 10,360 380 1,572 1,315 800 Buildings and Improvements (2) Total (4) (5) Accumulated Depreciation and Depletion (1) (6) Date of Construction 1982 1984 1985 1972 1952 1994 Date of Acquisition 2008 2008 2008 2008 2008 2008 Life on Which Depreciation is Computed 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years (1,217) (7,477) (5,857) (2,752) (4,535) (14,487) (3,205) (3,926) 1987 1996 2009 2009 5 - 40 years 5 - 40 years 3,351 8,541 14,242 5,937 12,346 38,565 7,716 11,932 4,062 8,562 16,526 7,369 13,973 42,628 9,031 12,732 — — 12 3,554 92 3,474 3,566 (1,798) 1999 2009 5 - 40 years — 13,489 29,428 397 11,783 31,531 43,314 (9,757) 1989/1994 2009 5 - 40 years — — — 13,689 — 10,891 — — — 7,194 — 45,301 — 6,047 — 2,357 — 5,227 — 1,332 — — — — — — — — — 706 — 28,252 18,975 1,187 10,990 — 5,531 5,966 3,399 3,810 343 185 247 279 5,765 (2,995) — 11,958 9,514 19,126 (1,462) 7,475 6,284 — 45,301 777 797 812 249 525 1,036 962 6,303 2,457 5,448 1,389 — — — 279 35,748 17,357 12,838 10,438 — 6,052 6,663 3,990 4,002 868 1,221 1,209 279 47,706 26,871 20,313 16,722 45,301 12,355 9,120 9,438 5,391 868 1,221 1,209 (279) (11,116) (5,943) 1997/1998 1972/2003 (3,911) (4,134) — (1,882) (2,132) (1,579) (1,225) (783) (915) (735) 1985 1978 N/A 1988 1988 1992 2000 2004 1984 1984 2009 2009 2009 2009 2009 2019 2009 2009 2009 2009 2009 2009 2009 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years N/A 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 5 - 40 years 4,984 (2,625) — 2,359 2,359 (1,202) 1996/1999 2009 5 - 40 years 2,586 (2,216) 667 409 1,076 (98) 2000 2009 5 - 40 years Property Wallula, WA Watsonville, CA West Memphis, AR Wichita, KS Woodburn, OR York, PA York-Willow Springs, PA Zumbrota, MN Canada Cold Logic/Taber Australia Arndell Park BRIS CORPORATE- Acacia Ridge Laverton Murarrie Prospect/ASC Corporate Spearwood Wetherill Park New Zealand Dalgety Diversey Halwyn Dr Mako Mako Manutapu/Barber Akld Paisley Smarts Rd Argentina Mercado Central - Buenos Aires, ARG Pilar - Buenos Aires, ARG 1 3 — 2 1 2 3 2 1 — 1 1 1 1 1 2 1 1 1 Total 283,443 494,429 2,326,556 413,200 526,226 2,707,959 3,234,185 (752,711) F-108 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Land Land, buildings, and improvements in the assets under construction balance as of December 31, 2019. Buildings Land Encumbrances (3) Buildings and Improvements Costs Capitalized Subsequent to Acquisition Buildings and Improvements (2) Total (4) (5) Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed US Allentown, PA Amarillo, TX Anaheim, CA Appleton, WI Atlanta - Lakewood, GA Atlanta - Skygate, GA Atlanta - Southgate, GA Atlanta - Tradewater, GA Atlanta - Westgate, GA Atlanta, GA - Corporate Benson, NC Boston, MA Burley, ID Burlington, WA Carthage Warehouse Dist, MO Chesapeake, VA Chillicothe, MO Columbia, SC Columbus, OH Dallas, TX Dominguez Hills, CA Eagan, MN Fairfield, OH Fort Smith, AR Fort Worth- Samuels, TX Fremont, NE Fort Worth, TX (Meacham) Fort Worth, TX (Railhead) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 89 8 180 66 6 7 89 8 180 66 6 7 161 161 16,724 16,724 757 620 43 392 3 113 430 308 89 8 502 186 7 70 48 31 754 16 846 23 757 620 43 392 3 113 430 308 89 8 502 186 7 70 48 31 754 16 846 23 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-109 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Buildings and Improvements (2) Total (4) (5) Land Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed Gadsden, AL Gainesville Candler, GA Gateway, GA Geneva Lakes, WI Gloucester - Rogers, MA Gloucester - Rowe, MA Grand Island, NE Green Bay, WI Hatfield, PA Henderson, NV Indianapolis, IN Johnson, AR Lakeville, MN Lancaster, PA LaPorte, TX Le Mars, IA Leesport, PA Lowell, AR Lynden, WA Marshall, MO Massillon 17th, OH Modesto, CA Monmounth, IL Murfreesboro, TN Napoleon, OH New Ulm, MN North Little Rock, AR Oklamoma City, OK Ontario, CA Ontario, OR Piedmont, SC Plover, WI — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 7 320 13,145 22 7 320 13,145 22 1,682 1,682 1,400 3 40 215 119 510 254 51 125 594 25 11 89 74 66 19 598 34 121 133 56 236 73 2,718 70 5 600 1,400 3 40 215 119 510 254 51 125 594 25 11 89 74 66 19 598 34 121 133 56 236 73 2,718 70 5 600 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-110 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Property Buildings Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Buildings and Improvements (2) Total (4) (5) Land Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed Portland, ME Rochelle, IL (Americold Drive) Rochele, IL (Caron) Salem, OR Salinas, CA Salt Lake City, UT San Antonio, TX Sanford, NC Savannah, GA Sebree, KY Sioux City, IA - 2640 Murray St Sioux City, IA - 2900 Murray St Sioux Falls, SD Springdale, AR Strasburg, VA Sumter, SC Syracuse, NY Tampa Plant City, FL Tarboro, NC Taunton, MA Texarkana, AR Turlock, CA (#1) Vernon 2, CA Wichita, KS Woodburn, OR Australia Arndell Park Laverton Murarrie Prospect Spearwood Wetherill Park - MIT — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 80 29 10 40 402 93 250 50 41,720 564 160 531 174 19 16 17 29 309 474 94 41 146 71 523 4 80 29 10 40 402 93 250 50 41,720 564 160 531 174 19 16 17 29 309 474 94 41 146 71 523 4 1,218 379 906 446 476 24 1,218 379 906 446 476 24 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-111 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Initial Costs Gross amount at which carried as of December 31, 2019 Encumbrances (3) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition Buildings and Improvements (2) Total (4) (5) Land Accumulated Depreciation and Depletion (1) (6) Date of Construction Date of Acquisition Life on Which Depreciation is Computed — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 954 954 1,163 614 277 143 66 241 48 1,163 614 277 143 66 241 48 — — 98,703 98,703 — $ 283,443 $494,429 $ 2,326,556 $ 413,200 $526,226 $ 2,806,662 $3,332,888 $ (752,711) F-112 Property Heathwood - MIT Buildings New Zealand Dalgety Diversey Halwyn Dr Mako Mako Manutapu Paisley Smarts Rd Total in assets under construction Total assets Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) Schedule III – Footnotes (1) Reconciliation of total accumulated depreciation and depletion to consolidated balance sheet caption as of December 31, 2019: Total per Schedule III Accumulated depreciation on investments in non-real estate assets Total accumulated depreciation and depletion per consolidated balance sheet (property, buildings and equipment and capital leases) $ $ (752,711) (493,539) (1,246,250) (2) Reconciliation of total Buildings and improvements to consolidated balance sheet as of December 31, 2019: Building and improvements per consolidated balance sheet Building and improvements capital leases per consolidated balance sheet Assets under construction per consolidated balance sheet Less: personal property assets under construction Total per Schedule III $ $ 2,696,732 11,227 108,639 (9,936) 2,806,662 (3) Reconciliation of total mortgage notes, senior unsecured notes and term loan to consolidated balance sheet caption as of December 31, 2019: Total per Schedule III 283,443 Unsecured 1,425,000 Deferred financing costs, net of amortization (12,996) 1,695,447 Total mortgage notes, senior unsecured notes and term loan per consolidated balance sheet* *Total mortgage notes, senior unsecured notes, and term loan does not include $4.9M of secured notes related to the Monmouth, IL facility. Refer to footnote 19 for additional details. $ $ (4) The aggregate cost for Federal tax purposes at December 31, 2019 of our real estate assets was approximately $2.8 billion. F-113 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) (5) Includes real estate impairments recorded in 2019 for the Gateway, GA (Atlanta) site. (6) The following table summarizes the Company’s real estate activity and accumulated depreciation for the years ended December 31: Real Estate Facilities, at Cost: Beginning Balance Capital expenditures Acquisitions Newly developed warehouse facilities Disposition Impairment Conversion of leased assets to owned Impact of foreign exchange rate changes Ending Balance Accumulated Depreciation: Beginning Balance Depreciation expense Dispositions Impact of foreign exchange rate changes Ending Balance 2019 2018 2017 $ 2,575,367 $ 177,268 975,045 21,316 (7,409) (12,555) — 557 3,729,589 2,506,656 $ 50,680 — 62,353 (30,199) (747) 8,405 (21,781) 2,575,367 (827,892) (114,512) 6,679 (697) (936,422) (770,006) (87,355) 24,672 4,797 (827,892) 2,382,343 52,555 27,958 60,598 (20,780) (9,473) — 13,455 2,506,656 (692,390) (86,169) 11,143 (2,590) (770,006) Total Real Estate Facilities, Net at December 31 $ 2,793,167 $ 1,747,475 $ 1,736,650 The total real estate facilities amounts in the table above include $76.8 million, $80.3 million, and $90.5 million of assets under sale- leaseback agreements accounted for as a financing as of December 31, 2019, 2018 and 2017, respectively. The Company does not hold title in these assets under sale-leaseback agreements. As of December 31, 2019 and 2018, the Company has no facilities classified as held for sale. During the second quarter of 2019, the Company sold an idle facility, which was written down earlier in 2019 resulting in an impairment charge of $2.9 million. During the second quarter of 2018, the Company sold a facility resulting in an $8.4 million gain on sale of real estate. In preparation of the warehouse disposal, the Company transferred most of its customers inventory to other owned warehouses within the same region. In February 2019, the Company acquired one facility and adjacent land in connection with the PortFresh Acquisition, with total property, buildings and equipment of $35.0 million. In May F-114 Americold Realty Trust and Subsidiaries Americold Realty Operating Partnership, L.P. and Subsidiaries Schedule III – Real Estate and Accumulated Depreciation December 31, 2019 (In thousands of U.S. dollars, as applicable and unless noted) 2019, the Company acquired 21 facilities in connection with the Cloverleaf Acquisition, with total property, buildings and equipment of $891.3 million. Additionally, in May 2019, the Company acquired two facilities in connection with the Lanier Acquisition, with total property, buildings and equipment of 60.0 million. In November 2019, the Company acquired two facilities in connection with the MHW Acquisition, with total property, buildings and equipment of $49.4 million. During the fourth quarter of 2018, the Company disposed of an idle facility, previously classified as held for sale, for a $0.9 million loss on sale of real estate, and purchased a portion of a facility that was previously operated under a lease agreement with a purchase price of $13.8 million. During the year ending December 31, 2017, the Company acquired a new facility for a total cost of $31.9 million, which included $3.9 million of intangible assets associated with an in-place lease and an above-market lease. In addition, the Company disposed of two idle and one operational facilities with a net book value of $9.2 million for an aggregate amount of $9.2 million. As of December 31, 2017, the Company held for sale an idle facility of the Warehouse segment with a carrying amount of $2.6 million, which is included in “Property, plant, and equipment – net” in the accompanying consolidated balance sheet. (7) Reconciliation of the Company’s real estate activity and accumulated depreciation and depletion for the years ended December 31, 2019 to Schedule III: Total real estate facilities gross amount per Schedule III Plus: Refrigeration equipment Less: Quarry assets $ Real estate facilities, at cost - ending balance Accumulated depreciation and depletion per Schedule III Plus: Refrigeration equipment Less: Quarry assets Accumulated depreciation and depletion - ending balance F-115 $ $ $ 3,332,888 409,865 (13,164) 3,729,589 (752,711) (186,799) 3,088 (936,422) 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. SIGNATURES AMERICOLD REALTY TRUST By: /s/ Fred W. Boehler Fred W. Boehler Chief Executive Officer Date: March 2, 2020 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature /s/ Fred W. Boehler Fred W. Boehler Title Chief Executive Officer, President and Trustee Date March 2, 2020 /s/ Marc J. Smernoff Chief Financial Officer and Executive Vice President March 2, 2020 Marc J. Smernoff /s/ Thomas C. Novosel Chief Accounting Officer and Senior Vice President Thomas C. Novosel /s/ Mark R. Patterson Chairman of the Board of Trustees Mark R. Patterson /s/ James R. Heistand Trustee James R. Heistand /s/ George J. Alburger, Jr. Trustee George J. Alburger, Jr. /s/ Kelly H. Barrett Kelly H. Barrett Trustee /s/ Antonio F. Fernandez Trustee Antonio F. Fernandez /s/ Michelle M. MacKay Trustee Michelle M. MacKay /s/ David J. Neithercut Trustee David J. Neithercut /s/ Andrew P. Power Trustee Andrew P. Power March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 March 2, 2020 DESCRIPTION OF SHARES OF BENEFICIAL INTEREST Exhibit 4.1 The following description of the Company’s common shares is based upon the Company’s declaration of trust, or our declaration of trust, the Company’s amended and restated bylaws, or our bylaws, and applicable provisions of law. The following summary is not complete and is subject to, and is qualified in its entirety by express reference to, our declaration of trust and bylaws, each of which is filed as an exhibit to the Annual Report on Form 10‑K of which this Exhibit 4.1 is a part. General Our declaration of trust provides that our company may issue up to 250,000,000 common shares of beneficial interest, $0.01 par value per share, or common shares, and 25,000,000 preferred shares of beneficial interest, $0.01 par value per share, or preferred shares, of which 125 preferred shares are designated as Series A cumulative non-voting preferred shares of beneficial interest, $0.01 par value per share, and 375,000 preferred shares are designated as Series C cumulative convertible voting preferred shares of beneficial interest, $0.01 par value per share. As of February 26, 2020, 200,164,155 common shares were issued and outstanding and no preferred shares were outstanding. Under Maryland law, a shareholder of a REIT is not liable for the REIT’s debts or obligations solely as a result of its status as a shareholder. Common Shares All outstanding common shares are duly authorized, fully paid and non-assessable. Subject to the preferential rights of any other class or series of shares of beneficial interest and to the provisions of our declaration of trust regarding the restrictions on the ownership and transfer of shares of beneficial interest, holders of common shares are entitled to receive dividends on such shares if, as and when authorized by our board of trustees and declared by us out of assets legally available therefor and to share ratably in the assets of our company legally available for distribution to our shareholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all known debts and liabilities of our company. Subject to the provisions of our declaration of trust regarding the restrictions on the ownership and transfer of shares of beneficial interest, each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders, including the election of trustees, and, except as provided with respect to any other class or series of shares, the holders of such common shares will possess the exclusive voting power. Each of our trustees will be elected by a majority of the votes cast with respect to such trustee at any meeting of shareholders duly called and at which a quorum is present and trustees are to be elected, provided that in any contested election the trustees shall be elected by a plurality of the votes cast at any meeting of shareholders duly called and at which a quorum is present and trustees are to be elected. There is no cumulative voting in the election of trustees, which means that the holders of a majority of the outstanding common shares can elect all of the trustees then standing for election and the holders of the remaining common shares will not be able to elect any trustees. Holders of common shares have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for any of the securities. Subject to the provisions of our declaration of trust regarding the restrictions on the ownership and transfer of shares of beneficial interest, all common shares have equal dividend, liquidation and other rights. Our declaration of trust authorizes our board of trustees to reclassify any unissued common shares into other classes or series of shares of beneficial interest and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series. In addition, our declaration of trust authorizes our board of trustees, without shareholder approval, to amend our declaration of trust from time to time to increase or decrease the aggregate number of authorized shares of beneficial interest or the number of authorized shares of any class or series of beneficial interest. Preferred Shares Our declaration of trust authorizes our board of trustees to classify any unissued preferred shares and to reclassify any previously classified but unissued preferred shares of any series from time to time, into one or more series, as authorized by our board of trustees. Prior to issuance of preferred shares of any series, our board of trustees is required by Maryland law and our declaration of trust to set, subject to the provisions of our declaration of trust regarding the restrictions on transfer of shares of beneficial interest, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for such series. Thus, our board of trustees could authorize the issuance of preferred shares with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control of our company that might involve a premium price for holders of common shares or otherwise be in their best interest. Power to Issue Additional Common Shares and Preferred Shares We believe that the power of our board of trustees to issue additional authorized but unissued common shares or preferred shares and to classify or reclassify unissued common shares or preferred shares and thereafter to cause us to issue such classified or reclassified shares of beneficial interest will provide our company with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs which might arise. The additional classes or series, as well as our common shares, will be available for issuance without further action by our shareholders, unless such action is required by applicable law or the rules of any stock exchange on which the securities may be listed or traded. Although our board of trustees has no intention at the present time of doing so, it could authorize our company to issue a class or series of shares of beneficial interest that could, depending upon the terms of such class or series, delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of common shares or otherwise be in their best interest. Restrictions on Transfer To qualify as a REIT under the Code, our shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of twelve months or during a proportionate part of a shorter taxable year (other than the first year for which an election to be a REIT was made). Also, not more than 50% of the value of our outstanding shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT was made). Our declaration of trust, subject to certain exceptions, contains certain restrictions on the number of our shares of beneficial interest that a person may own. Our declaration of trust provides that no individual (including certain entities treated as individuals) may own, or be deemed to own by virtue of the relevant applicable attribution rules of the Code, more than 9.8% (in value) of our outstanding shares, or the Ownership Limit. Our declaration of trust further prohibits (a) any person from beneficially or constructively owning our shares of beneficial interest that would result in our company being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT, (b) any person from transferring shares of beneficial interest of our company if such transfer would result in our shares of beneficial interest being beneficially owned by fewer than 100 persons and (c) any person from beneficially owning our shares to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code (after taking into account for such purpose the statutory presumptions set forth in Section 897(h)(4)(E) of the Code). Our board of trustees is required to exempt a proposed transferee (prospectively or retrospectively) from the Ownership Limit (but not any of the other restrictions on the transfer or ownership of our shares of beneficial interest) and may establish or increase an excepted holder limit for such individual, or an Excepted Holder, if the proposed transferee provides our board of trustees with information, satisfactory in the sole and absolute discretion of our board of trustees, demonstrating: (a) that such exemption would not result in our company being “closely held” within the meaning of Section 856(h) of the Code or failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code; (b) that such holder does not own, actually or constructively, an interest in a tenant of our company (or a tenant of any entity owned or controlled by our company) that would cause our company to own, directly or indirectly, more than a 9.8% interest in such a tenant other than a tenant from whom our company (or an entity owned or controlled by our company) derives and is expected to continue to derive a sufficiently small amount of revenue that the rent from such tenant would not, in the opinion of our board of trustees, adversely affect our ability to qualify as a REIT; and (c) that such exemption would not otherwise result in our failure to qualify as a REIT. The individual seeking an exemption must represent to the satisfaction of our board of trustees that it will not violate the aforementioned restrictions while such person beneficially or constructively owns our shares of beneficial interest in excess of the Ownership Limit. The individual also must agree that any violation or attempted violation of any of the foregoing restrictions will result in the automatic transfer of the shares causing such violation to the Trust (as defined below). In connection with granting a waiver of the Ownership Limit or creating or modifying an Excepted Holder limit, or at any other time, our board of trustees may increase or decrease the Ownership Limit unless, after giving effect to any increased or decreased Ownership Limit, five or fewer persons could beneficially own, in the aggregate, more than 49.9% in value of our outstanding shares. A decreased Ownership Limit will not apply to any individual whose percentage of ownership of our shares is in excess of the decreased Ownership Limit until the individual’s ownership of our shares equals or falls below the decreased Ownership Limit, but any further acquisition of our shares will be subject to the decreased Ownership Limit. Our board of trustees may require a ruling from the IRS or an opinion of counsel, in either case in form and substance satisfactory to our board of trustees, in its sole discretion, in order to determine or ensure our status as a REIT prior to granting an exemption. Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of our shares of beneficial interest that will or may violate any of the foregoing restrictions on transferability and ownership, or any person who would have owned shares of beneficial interest of our company that resulted in a transfer of shares to the Trust, is required to give written notice immediately (or, in the case of a proposed or attempted transaction, at least 15 days prior written notice) to our company and provide our company with such other information as our company may request in order to determine the effect of such transfer on our status as a REIT. The foregoing restrictions on transferability and ownership will not apply if our board of trustees determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance is no longer required in order for us to qualify as a REIT. Pursuant to our declaration of trust, if any transfer of our shares of beneficial interest would result in our shares being beneficially owned by fewer than 100 persons, such transfer will be null and void and the intended transferee will acquire no rights in such shares. In addition, if any transfer of our shares of beneficial interest occurs which, if effective, would result in any person beneficially or constructively owning our shares of beneficial interest in excess or in violation of the other transfer or ownership limitations described above, or a Prohibited Owner, then that number of shares of beneficial interest, the beneficial or constructive ownership of which otherwise would cause such person to violate such limitations (rounded up to the nearest whole share), will be automatically transferred to a trust, or the Trust, for the exclusive benefit of one or more charitable beneficiaries designated by us, or the Charitable Beneficiary, and the Prohibited Owner may not acquire any rights in such shares. The automatic transfer will be deemed to be effective as of the close of business on the Business Day (as defined in our declaration of trust) prior to the date of the violative transfer. Shares of beneficial interest held in the Trust will constitute issued and outstanding shares of beneficial interest. The Prohibited Owner may not benefit economically from ownership of any shares of beneficial interest held in the Trust, and will have no rights to dividends or possess any rights to vote or other rights attributable to the shares of beneficial interest held in the Trust. The trustee of the Trust, or the Trustee, will have all voting rights and rights to dividends or other distributions with respect to shares of beneficial interest held in the Trust, which rights are to be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other distribution paid prior to us discovering that shares of beneficial interest have been transferred to the Trustee will be paid by the recipient of such dividend or distribution to the Trustee upon demand, and any dividend or other distribution authorized but unpaid must be paid when due to the Trustee. Any dividend or distribution so paid to the Trustee will be held in trust for the Charitable Beneficiary. The Prohibited Owner will have no voting rights with respect to shares of beneficial interest held in the Trust and, subject to Maryland law, effective as of the date that the shares of beneficial interest have been transferred to the Trust, the Trustee will have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to our discovery that such shares have been transferred to the Trust and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary. However, if our company has already taken irreversible trust action, then the Trustee shall not have the authority to rescind and recast such vote. Within 20 days of receiving notice from us that shares of beneficial interest have been transferred to the Trust, the Trustee must sell the shares of beneficial interest held in the Trust to a person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in our declaration of trust. Upon such sale, the interest of the Charitable Beneficiary in the shares sold will terminate and the Trustee must distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as follows. The Prohibited Owner will receive the lesser of (i) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Trust (e.g., a gift, devise or other such transaction), the Market Price (as defined in our declaration of trust) of such shares on the day of the event causing the shares to be held in the Trust and (ii) the price per share received by the Trustee from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and other distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee. Any net sale proceeds in excess of the amount payable to the Prohibited Owner shall be paid immediately to the Charitable Beneficiary. If, prior to our discovery that shares of beneficial interest have been transferred to the Trust, the shares are sold by a Prohibited Owner, then (i) the shares will be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for the shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to the aforementioned requirement, such excess will be paid to the Trustee upon demand. In addition, our shares of beneficial interest held in the Trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in the transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of the devise or gift) and (ii) the Market Price on the date we, or our designee, accept such offer. We may reduce the amount payable to the Prohibited Owner by the amount of dividends and other distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee. We may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary. We have the right to accept any offer until the Trustee has sold the shares of beneficial interest held in the Trust. Upon such a sale to our company, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner. To the extent shares of beneficial interest of our company are certificated, all certificates evidencing common shares and preferred shares will bear a legend referring to the restrictions described above. Every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of all classes or series of our shares of beneficial interest, including our common shares, within 30 days after the end of each taxable year, is required to give written notice to us stating the name and address of the owner, the number of shares of each class and series of our shares of beneficial interest which the owner beneficially owns and a description of the manner in which the shares are held and whether the beneficial owner of the shares is a “foreign person” within the meaning of Section 897(h) of the Code. Each such owner must provide any additional information as we may reasonably request in order to determine the effect, if any, of the beneficial ownership on our status as a REIT or as a “domestically controlled qualified investment entity” and to ensure compliance with the Ownership Limit. In addition, each shareholder is, upon reasonable demand, required to provide to us any relevant information we reasonably request in order to determine our status as a REIT or as a “domestically controlled qualified investment entity” and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance. These ownership limitations could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common shares or otherwise be in the best interest of our shareholders. To reduce the ability of our board of trustees to use these ownership limitations to delay, defer or prevent a transaction or a change in control of our company, our declaration of trust requires our board of trustees to grant a waiver of the 9.8% ownership limitation if an individual seeking a waiver demonstrates that such ownership would not jeopardize our status as a REIT. Transfer Agent and Registrar The transfer agent and registrar for our common shares is American Stock Transfer & Trust Company, LLC. The transfer agent and registrar’s address is 6201 15th Avenue, Brooklyn, New York 11219. FORM OF PERFORMANCE RSU AGREEMENT AMERICOLD REALTY TRUST 2017 EQUITY INCENTIVE PLAN Restricted Stock Unit Agreement Exhibit 10.26 This Restricted Stock Unit Agreement (this “Agreement”) is made and entered into by and between Americold Realty Trust, a Maryland real estate investment trust (the “Company”), and [•] (the “Participant”). Grant Date: ____________________________________ Target Number of Restricted Stock Units: ____________________________________ This grant also includes Dividend Equivalents, which are described below. 1. Grant of Restricted Stock Units and Dividend Equivalents. 1.1 Pursuant to Section 9.1 of the Americold Realty Trust 2017 Equity Incentive Plan (the “Plan”), the Company hereby issues to the Participant an Award of Restricted Stock Units (the “Restricted Stock Units”), in an amount equal to the “target number” set forth above (the “Target Award”). Each Restricted Stock Unit represents the right to receive Shares based on a percentage of the Target Award (ranging from 0%-200%) as set forth on Appendix A of this Agreement, subject to the terms and conditions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan. 1.2 Each Restricted Stock Unit includes one Dividend Equivalent. A Dividend Equivalent entitles the Participant to a cash payment equal to the cash dividends declared on a Share during the vesting period (if any). The determination of the amount of Dividend Equivalents and payment of Dividend Equivalents will be made as provided in Section 5.3. 1.3 The Restricted Stock Units shall be credited to a separate account maintained for the Participant on the books and records of the Company (the “Account”). All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Company. 2. Consideration. The grant of the Restricted Stock Units and related Dividend Equivalents is made in consideration of the services to be rendered by the Participant to the Company or its Subsidiaries. 3. Vesting. 3.1 Except as otherwise provided in this Agreement, provided that the Participant has not incurred a Termination of Service as of the applicable vesting date, and further provided that any additional conditions and performance goals set forth in Appendix A (attached hereto) have been satisfied, the Restricted Stock Units will vest and no longer be subject to any restrictions in accordance with the following schedule: Vesting Date Upon completion of the Performance Period as described in Appendix A Number of Restricted Stock Units That Vest As provided in Appendix A Once vested, the Restricted Stock Units become "Vested Units." 3.2 Except as provided in Sections 3.3 and 3.4 of this Agreement, the foregoing vesting schedule notwithstanding, upon the Participant's Termination of Service for any reason at any time before all of his or her Restricted Stock Units have vested, the Participant's unvested Restricted Stock Units shall be automatically forfeited and neither the Company nor any Subsidiary shall have any further obligations to the Participant under this Agreement. 3.3 If the Participant’s Termination of Service occurs as a result of a Termination of Service by the Company without Cause [or by the Participant for Good Reason (as such term is defined in the Participant’s written employment agreement with the Company)], a pro-rated portion of the Restricted Stock Units shall remain outstanding and eligible to vest based on actual performance through the last day of the Performance Period, based on the number of days during the Performance Period that the Participant was employed. 3.4 If, within the twelve (12) month period following a Change in Control, the Participant’s Termination of Service occurs as a result of a Termination of Service by the Company without Cause [or by the Participant for Good Reason (as such term is defined in the Participant’s written employment agreement with the Company)], the Restricted Stock Units shall immediately become vested based on actual performance through the Termination of Service date. 4. Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, until such time as the Restricted Stock Units and Dividend Equivalents are settled and/or paid in accordance with Sections 5 and 6 of this Agreement, the Restricted Stock Units and Dividend Equivalents (or the rights relating thereto) may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock Units or Dividend Equivalents (or the rights relating thereto) shall be wholly ineffective and, if any such attempt is made, the Restricted Stock Units and Dividend Equivalents will be forfeited by the Participant and all of the Participant's rights to such interests shall immediately terminate without any payment or consideration by the Company. 5. Rights as Shareholder; Dividend Equivalents. 5.1 The Participant shall not have any rights of a shareholder with respect to the Shares underlying the Restricted Stock Units (including, without limitation, any voting rights or any right to dividends paid with respect to the Shares underlying the Restricted Stock Units) unless and until the Restricted Stock Units vest and are settled by the issuance of Shares in accordance with Section 6 of this Agreement. 2 5.2 Upon and following the settlement of the Restricted Stock Units, the Participant shall be the record owner of the Shares underlying the Restricted Stock Units unless and until such Shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder of the Company. 5.3 If, during the vesting period provided in Section 3, the Company declares a cash dividend on the Shares, then, on the payment date of the dividend, the Participant’s Account shall be credited with Dividend Equivalents in an amount equal to the dividends that would have been paid to the Participant if one Share had been issued on the Grant Date for each Restricted Stock Unit granted to the Participant as set forth in this Agreement based the Target Award. At the end of the Performance Period and prior to payment of such Dividend Equivalents, the amount of Dividend Equivalents credited to the Participant’s Account shall be increased or decreased in the same proportion as the adjustment made to the Target Award when determining the number of Vested Units (based on the Company’s performance as described in Section 3.1 and Appendix A). Dividend Equivalents shall be subject to the same vesting and forfeiture restrictions as the Restricted Stock Units to which they are attributable and shall be paid, without adjustment for any earnings or interest, on the same date that the Restricted Stock Units to which they are attributable are settled in accordance with Section 6 of this Agreement. Dividend Equivalents credited to a Participant’s Account shall be distributed in cash. Dividend Equivalents shall not be eligible for dividend reinvestment. 6. Settlement and Payment of Restricted Stock Units. 6.1 Subject to Section 9 of this Agreement, as soon as administratively practicable following the applicable vesting date provided in Section 3.1 (but in no event later than the end of the calendar year in which such Restricted Stock Units become vested), the Company shall (a) issue and deliver to the Participant the number of Shares equal to the number of Vested Units and cash equal to any Dividend Equivalents as provided in Section 5.3 (as adjusted to satisfy the tax withholding requirements provided in Section 9 of this Agreement), and (b) enter the Participant’s name on the books of the Company as the shareholder of record with respect to the Shares delivered to the Participant. 6.2 Notwithstanding Section 6.1 of this Agreement, in accordance with Section 3.2 of the Plan, the Committee may, but is not required to, prescribe rules pursuant to which the Participant may elect to defer settlement of the Restricted Stock Units. Any deferral election must be made in compliance with such rules and procedures as the Committee deems advisable. If the Participant is deemed a "specified employee" within the meaning of Code Section 409A, as determined by the Committee, at a time when the Participant becomes eligible for settlement of the Restricted Stock Units upon his "separation from service" within the meaning of Code Section 409A, then to the extent necessary to prevent any accelerated or additional tax under Code Section 409A, such settlement will be delayed until the earlier of: (a) the date that is six months following the Participant's separation from service and (b) the Participant's death. 6.3 To the extent that the Participant does not vest in any Restricted Stock Units for any reason, all interest in such Restricted Stock Units and any related Dividend Equivalents 3 shall be forfeited. The Participant has no right or interest in any Restricted Stock Units or Dividend Equivalents that are forfeited. 7. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position, as an Employee, consultant, advisor or Nonemployee Trustee of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Participant's employment or service at any time for any reason. 8. Adjustments. If any change is made to the outstanding Shares or the capital structure of the Company, if required, the Restricted Stock Units shall be adjusted in any manner as contemplated by Section 4.4 of the Plan. 9. Tax Liability, Net Settlement and Withholding. 9.1 The Participant shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation, including any Dividend Equivalents, paid to the Participant pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock Units or Dividend Equivalents and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes in accordance with Section 22.2 of the Plan. 9.2 Without limiting Section 9.1 of this Agreement, upon settlement of the Restricted Stock Units as provided in Section 6 of this Agreement, the Company shall have the right in its sole discretion to withhold a portion of the Shares that have a Fair Market Value equal to the amount required to be withheld by the Company (or its Subsidiaries) to satisfy the applicable federal, state and local tax withholding requirements, domestic or foreign, unless the Company, in its sole discretion, requires the Participant to make alternate arrangements satisfactory to the Company for such withholdings in advance of the arising of any withholding obligations. 9.3 Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant's responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of the Restricted Stock Units, grant or payment of Dividend Equivalents or the subsequent sale of any Shares; and (b) does not commit to structure the Restricted Stock Units or Dividend Equivalents to reduce or eliminate the Participant's liability for Tax-Related Items. 10. [Non-competition and Non-solicitation. 10.1 In consideration of the Restricted Stock Units and related Dividend Equivalents, the Participant agrees and covenants not to: (a) contribute his or her knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, shareholder, volunteer, intern or in any other similar capacity to an entity engaged in the same or similar business as the Company and its Subsidiaries in any geographic area in which the Participant worked, 4 represented the Company or its Subsidiaries, or had material contact with customers of the Company or its Subsidiaries during the Participant’s employment with the Company or any of its Subsidiaries, for a period of nine (9) months following the Participant's Termination of Service; (b) directly or indirectly, solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company or its Subsidiaries for nine (9) months following the Participant's Termination of Service; or (c) directly or indirectly, solicit, contact (including, but not limited to, e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with any current or actively sought prospective customers of the Company or any of its Subsidiaries with whom the Participant had material contact during the Participant’s employment with the Company or any of its Subsidiaries, for purposes of offering or providing goods or services similar to or competitive with those offered by the Company or any of its Subsidiaries for a period of nine (9) months following the Participant's Termination of Service. (d) The restrictions in this Section 10 are in addition to, and not in lieu of, any other similar obligations the Participant may have under any other agreement with the Company or its affiliates. 10.2 If the Participant breaches any of the covenants set forth in Section 10.1 of this Agreement: (a) all unvested Restricted Stock Units and related Dividend Equivalents shall be immediately forfeited; and (b) the Participant hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.] 11. Clawback Policy. This Award shall be subject to the terms and conditions of the Company’s Incentive-Based Compensation Recoupment Policy adopted effective January 23, 2018, a copy of which has been provided to the Participant and which is incorporated herein by reference. This Award is also subject to the requirements of any applicable law, government regulation, or stock exchange listing requirement with respect to the recovery of incentive compensation. 12. Compliance with Law. This Award and the issuance or transfer of Shares in accordance with Section 6 of this Agreement shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Shares may be listed. No Shares shall be issued or transferred unless and until any then applicable requirements of state and federal law and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. 5 13. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Committee, care of the Company, at the Company's principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant's address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Committee) from time to time. 14. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Georgia without regard to conflict of law principles. 15. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company. 16. Restricted Stock Units and Dividend Equivalents Subject to Plan. This Agreement is subject to the Plan as approved by the Company's shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. 17. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant's beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock Units and related Dividend Equivalents may be transferred by will or the laws of descent or distribution. 18. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law. 19. Discretionary Nature of Plan. The Plan is discretionary and may be amended, altered, suspended or terminated by the Board at any time, in its discretion. The grant of the Restricted Stock Units and Dividend Equivalents in this Agreement does not create any contractual right or other right to receive any Restricted Stock Units, Dividend Equivalents or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Committee and the Board. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant's employment with, or service to, the Company or its Subsidiaries. 20. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock Units and related Dividend Equivalents, prospectively or retroactively; provided, that, no such amendment shall materially impair the previously accrued rights of the Participant under this Agreement without the Participant's consent, subject to the provisions of Section 21 of the Plan. 6 21. Code Section 409A. This Agreement is intended to comply with Code Section 409A or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Code Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Code Section 409A. 22. No Impact on Other Benefits. The value of the Participant's Restricted Stock Units and related Dividend Equivalents is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit. 23. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature. 24. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof and accepts the Restricted Stock Units and related Dividend Equivalents subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Restricted Stock Units, payment of related Dividend Equivalents or disposition of the underlying Shares, and that the Participant has been advised to consult a tax advisor prior to such vesting, settlement or disposition. [SIGNATURE PAGE FOLLOWS] 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. AMERICOLD REALTY TRUST By: _____________________ Name: Title: [PARTICIPANT NAME] By: _____________________ Name: 8 Performance Period: [To be determined] Appendix A Performance Measurement: Vesting of the Restricted Stock Units shall be determined as provided in this Appendix A based on the Company’s relative total shareholder return or “TSR” compared against the total shareholder return of each company in the MSCI U.S. REIT Index on the first day of the Performance Period, provided, however, that any such company that is acquired or completes a “going private” transaction during the Performance Period shall be disregarded and any such company that has filed for bankruptcy protection or is delisted during the Performance Period from any national securities exchange will have a TSR percentile ranking of 0%. For purposes of this Agreement, “TSR” means the compounded annual growth rate, expressed as a percentage and rounded to the nearest two decimal points, in the value of a Share due to stock price change and paid dividends on an absolute basis, during the applicable Performance Period. For this purpose, the price of a Share shall mean the closing sales price of the Company’s common stock on the New York Stock Exchange (or such other national securities exchange or quotation system on which the Shares may be listed or quoted) on the applicable day of the Performance Period. At the end of the Performance Period, the Committee shall determine and certify, in its sole discretion, the applicable TSR for such period. In determining total shareholder return of each of the companies in the MSCI U.S. REIT Index, the Committee will use, to the extent practical, the same methodology used to compute the TSR as set forth above. Vesting: The number of Restricted Stock Units that will vest (if any) will be determined as provided in the table below. In the event that the Company’s relative TSR performance does not meet the Minimum performance level threshold set forth below, the Restricted Stock Units shall be automatically forfeited and neither the Company nor any Subsidiary shall have any further obligations to the Participant under this Agreement. Performance Level Thresholds Minimum Target Maximum Relative TSR Percentile 30th percentile 55th percentile 75th or greater percentile Vesting Percentage 50% of Target Award 100% of Target Award 200% of Target Award Restricted Stock Units Vested [•] [•] [•] 9 If the Company’s relative TSR falls between the Minimum and Target performance level thresholds or the Target and Maximum performance level thresholds provided above, the number of Restricted Stock Units that will vest will be mathematically interpolated by the Committee on a linear basis. If the number of Restricted Stock Units that vest pursuant to the above table exceeds the “350% Value Cap,” the number of vested Restricted Stock Units will be reduced such that the delivered value will not exceed such 350% Value Cap. The 350% Value Cap equals the number of Restricted Stock Units that corresponds to the product of the value of a Share on the Grant Date, multiplied by the Target Award, multiplied by 350%. For example, assume the Company achieves the Maximum performance level threshold (with a payout percentage of 200%), and the Company’s stock price has increased 200% (measured from the Grant Date). Because the award would deliver a payout of 400% (200% x 200%), the number of Restricted Stock Units that vest will be reduced such that the value delivered on the payout date does not exceed the 350% Value Cap. If the Company’s relative TSR is negative, in no event may the number of Restricted Stock Units that vest exceed the Target Award. In no event will the number of Restricted Stock Units that vest pursuant to this Agreement exceed 200% of the Target Award. 10 All of the following are subsidiaries of both Americold Realty Trust and Americold Realty Operating Partnership, L.P., except Americold Realty Operating Partnership, L.P. and Americold Realty Operations, Inc. are subsidiaries of only Americold Realty Trust. EXHIBIT 21.1 List of Subsidiaries Subsidiary Americold Acquisition Partnership GP LLC Americold Acquisition, LLC Americold Australia PTY Ltd. Americold Australia Realty Trust Americold Australian Holdings PTY Ltd. Americold Australian Logistics PTY Ltd. Americold Blocker GP, LLC Americold Brisbane Realty Trust Americold Chambersburg Holdings, LLC Americold Clearfield Opco, LLC Americold Clearfield Propco, LLC Americold Food Logistics PTY Ltd. Americold Investments PTY Ltd. Americold Logistics Argentina S.A. Americold Logistics Hong Kong Limited Americold Logistics Limited Americold Logistics Services NZ Ltd. Americold Logistics, LLC Americold Melbourne Realty Trust Americold Middleboro Opco, LLC Americold Middleboro Propco, LLC Americold NB PTY LTD Americold Nebraska Leasing LLC Americold NZ Limited Americold Nova Cold Holdings, L.P. Americold Nova Cold Holdings II, LLC Americold Propco Phoenix Van Buren LLC Americold Property PTY Ltd. Americold Real Estate, L.P. Americold Realty Australia Management PTY LTD Americold Realty Hong Kong Limited Americold Realty Operating Partnership, L.P.* Americold Realty LLC. Americold Realty Operations, Inc.* Americold Realty State Management PTY LTD Americold San Antonio Propco LLC Americold Storage NB PTY Ltd. Americold Sydney Realty Trust Americold TRS Parent, LLC Americold Transportation, LLC Americold Transportation Services, LLC AMLOG Canada Inc. Jurisdiction of Incorporation Delaware Delaware Australia Australia Australia Australia Delaware Australia Delaware Delaware Delaware Australia Australia Argentina Hong Kong Australia New Zealand Delaware Australia Delaware Delaware Australia Nebraska New Zealand Delaware Delaware Delaware Australia Delaware Australia Hong Kong Delaware Delaware Delaware Australia Delaware Australia Australia Delaware Delaware Delaware Canada Americold Hawkeye Parent LLC ART AL Holding LLC ART Icecap Holdings LLC ART Leasing LLC ART Manager L.L.C. ART Mezzanine Borrower Opco 2013 LLC ART Mezzanine Borrower Propco 2013 LLC ART Mortgage Borrower GP LLC ART Mortgage Borrower Opco 2006-1A L.P. ART Mortgage Borrower Opco 2006-1B L.P. ART Mortgage Borrower Opco 2006-1C L.P. ART Mortgage Borrower Opco 2006-2 L.P. ART Mortgage Borrower Opco 2010 -4 LLC ART Mortgage Borrower Opco 2010 -5 LLC ART Mortgage Borrower Opco 2010 -6 LLC ART Mortgage Borrower Opco 2013 LLC ART Mortgage Borrower Opco GP 2006-1A LLC ART Mortgage Borrower Opco GP 2006-1B LLC ART Mortgage Borrower Opco GP 2006-1C LLC ART MORTGAGE BORROWER OPCO GP 2006-2 LLC ART Mortgage Borrower Propco 2006-1A L.P. ART Mortgage Borrower Propco 2006-1B L.P. ART Mortgage Borrower Propco 2006-1C L.P. ART Mortgage Borrower Propco 2006-2 L.P. ART Mortgage Borrower Propco 2010 -4 LLC ART Mortgage Borrower Propco 2010 -5 LLC ART Mortgage Borrower Propco 2010 -6 LLC ART Mortgage Borrower Propco 2013 LLC ART Mortgage Borrower Propco GP 2006-1A LLC ART Mortgage Borrower Propco GP 2006-1B LLC ART Mortgage Borrower Propco GP 2006-1C LLC ART MORTGAGE BORROWER PROPCO GP 2006-2 LLC ART Mortgage Borrower, L.P. ART QUARRY TRS LLC ART Second Mezzanine Borrower Opco 2013 LLC ART Second Mezzanine Borrower Propco 2013 LLC ART Third Mezzanine Borrower Opco 2013 LLC ART Third Mezzanine Borrower Propco 2013 LLC Atlas Cold Storage Logistics LLC Atlas Logistics Group Retail Services (Atlanta) LLC Atlas Logistics Group Retail Services (Denver) LLC Atlas Logistics Group Retail Services (Phoenix) LLC Atlas Logistics Group Retail Services (Roanoke) LLC Atlas Logistics Group Retail Services (Shelbyville) LLC BCP VII Chiller 892/U.S. TE Feeder, L.P. Blockchain Transport, LLC Cloverleaf Cold Storage, LLC Cloverleaf Cold Storage Co LLC CCS Realty, LLC CCS Property Owner, LLC Cold Logic ULC Icecap Australia MIT Holding, LLC Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Minnesota Delaware Minnesota Delaware Delaware Delaware Delaware Arkansas Delaware Ohio Iowa Delaware British Columbia Australia Icecap Properties AU LLC Icecap Properties NZ Holdings LLC Icecap Properties NZ Limited LLC Icicle Australia Property Pty Limited Icicle NZ Property Limited Inland Quarries, L.L.C. KC Underground, L.L.C. KCL Equipment Owner, LLC Lanier Cold Storage LLC Lanier Freezer, LLC MHW Group at Perryville, LLC Monmouth Property Development, LLC Newlook Products, LLC Nova Cold Logistics, ULC Portfresh Development, LLC Portfresh Holdings, LLC Savannah Cold Storage LLC Second Street, LLC URS Realty, L.L.C. URS Real Estate L.P. VCD Pledge Holdings, LLC Versacold Atlas Logistics Services USA LLC Versacold Logistics, LLC Versacold Midwest LLC Versacold Northeast Logistics, LLC Versacold Northeast, Inc. Versacold Texas, L.P. Versacold USA, L.L.C. Zero Mountain LLC Zero Mountain Logistics LLC ZMI Leasing ZM NLR Property Owner, LLC ZM Property Owner, LLC ZM Waco Property Owner LLC *subsidiaries of only Americold Realty Trust Delaware Delaware New Zealand Australia New Zealand Delaware Delaware Delaware Georgia Georgia Maryland Illinois Georgia Nova Scotia Delaware Delaware Delaware Iowa Delaware Delaware Delaware Delaware Delaware Delaware Massachusetts Massachusetts Texas Delaware Arkansas Oklahoma Oklahoma Delaware Delaware Delaware Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-3 No. 333-229819) of Americold Realty Trust, and (2) Registration Statement (Form S-8 No. 333-222637) pertaining to the Americold Realty Trust 2017 Equity Incentive Plan, Americold Realty Trust 2010 Equity Incentive Plan, and Americold Realty Trust 2008 Equity Incentive Plan of Americold Realty Trust; of our reports dated March 2, 2020, with respect to the consolidated financial statements and schedule of Americold Realty Trust and Americold Realty Operating Partnership, L.P. and the effectiveness of internal control over financial reporting of Americold Realty Trust included in this Annual Report (Form 10-K) of Americold Realty Trust and Americold Realty Operating Partnership, L.P. for the year ended December 31, 2019. /s/ Ernst & Young LLP Atlanta, Georgia March 2, 2020 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.1 I, Fred Boehler, certify that: 1. I have reviewed this Annual Report on Form 10-K of Americold Realty Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 2, 2020 /s/ Fred W. Boehler Fred W. Boehler Chief Executive Officer, President and Trustee CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.2 I, Marc Smernoff, certify that: 1. I have reviewed this Annual Report on Form 10-K of Americold Realty Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 2, 2020 /s/ Marc J. Smernoff Marc J. Smernoff Chief Financial Officer and Executive Vice President CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.3 I, Fred Boehler, certify that: 1. I have reviewed this Annual Report on Form 10-K of Americold Realty Operating Partnership, L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)]; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 2, 2020 /s/ Fred W. Boehler Fred W. Boehler Chief Executive Officer, President and Trustee CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.4 I, Marc Smernoff, certify that: 1. I have reviewed this Annual Report on Form 10-K of Americold Realty Operating Partnership, L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)]; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 2, 2020 /s/ Marc J. Smernoff Marc J. Smernoff Chief Financial Officer and Executive Vice President CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 In connection with this Annual Report on Form 10-K of Americold Realty Trust (the “Company”) for the fiscal period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fred Boehler, President, Chief Executive Officer and Trustee of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 2, 2020 /s/ Fred W. Boehler Fred W. Boehler President, Chief Executive Officer and Trustee CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 In connection with this Annual Report on Form 10-K of Americold Realty Trust (the “Company”) for the fiscal period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Smernoff, Chief Financial Officer and Executive Vice President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 2, 2020 /s/ Marc J. Smernoff Marc J. Smernoff Chief Financial Officer and Executive Vice President CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.3 In connection with this Annual Report on Form 10-K of Americold Realty Operating Partnership, L.P. (the Operating Partnership) for the fiscal period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fred Boehler, President, Chief Executive Officer and Trustee of the Operating Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. Dated: March 2, 2020 /s/ Fred W. Boehler Fred W. Boehler President, Chief Executive Officer and Trustee CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.4 In connection with this Annual Report on Form 10-K of Americold Realty Operating Partnership, L.P. (the Operating Partnership) for the fiscal period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Smernoff, Chief Financial Officer and Executive Vice President of the Operating Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. Dated: March 2, 2020 /s/ Marc J. Smernoff Marc J. Smernoff Chief Financial Officer and Executive Vice President Exhibit 95.1 DODD-FRANK ACT DISCLOSURE OF MINE SAFETY AND HEALTH ADMINISTRATION SAFETY DATA The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). Mine Safety Information The operation of our limestone quarry in Carthage, Missouri is inspected by the Federal Mine Safety and Health Administration (“MSHA”) on an ongoing basis. Whenever MSHA believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, may be reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned. The following table includes information required by the Act for the quarter ended December 31, 2019. Section 104 S&S Citations Section 104(b) Orders Section 104(d) Citations and Orders Section 110(b)(2) Violations Section 107(a) Orders Total Dollar Value of MSHA Assessments Proposed Total Number of Mining Related Fatalities Received Notice of Pattern of Violations Under Section 104(e) Received Notice of Potential to Have Pattern Under Section 104(e) Legal Actions Pending as of Last Day of Period (1) Legal Actions Initiated During Period Legal Actions Resolved During Period 2 — — — — $302.00 — No No — 1 1 Mine or Operating Name (MSHA Identification Number) Carthage Crushed Limestone (23-00028) (1) See table below for additional detail regarding Legal Actions Pending as of December 31, 2019. With respect to Contests of Proposed Penalties, we have included the number of dockets (as opposed to citations) when counting the number of Legal Actions Pending as of December 31, 2019. Mine or Operating Name (MSHA Identification Number) Carthage Crushed Limestone (23-00028) Contests of proposed penalties (b) Contests of citations and orders (a) Dockets Citations Complaints for compensation (c) Complaints of discharge, discrimination or interference (d) Applications for temporary relief (e) Appeals of judges' decisions or orders (f) — — — — — — — (a) Represents (if any) contests of citations and orders, which typically are filed prior to an operator's receipt of a proposed penalty assessment from MSHA or relate to orders for which penalties are not assessed (such as imminent danger orders under Section 107 of the Mine Act). This category includes: (i) contests of citations or orders issued under section 104 of the Mine Act, (ii) contests of imminent danger withdrawal orders under section 107 of the Mine Act, and (iii) Emergency response plan dispute proceedings (as required under the Mine Improvement and New Emergency Response Act of 2006, Pub. L. No. 109-236, 120 Stat. 493). (b) Represents (if any) contests of proposed penalties, which are administrative proceedings before the Federal Mine Safety and Health Review Commission (“FMSHRC”) challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order. This column includes zero actions involving civil penalties against agents of the operator that has been contested and zero appeals of a decision or order. (c) Represents (if any) complaints for compensation, which are cases under section 111 of the Mine Act that may be filed with the FMSHRC by miners idled by a closure order issued by MSHA who are entitled to compensation. (d) Represents (if any) complaints of discharge, discrimination or interference under section 105 of the Mine Act, which cover: (i) discrimination proceedings involving a miner's allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint, and (ii) temporary reinstatement proceedings involving cases in which a miner has filed a complaint with MSHA stating that he or she has suffered such discrimination and has lost his or her position. Complaints of Discharge, Discrimination, or Interference are also included in Contests of Proposed Penalties, column (b). (e) Represents (if any) applications for temporary relief, which are applications under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order or from any order issued under section 104 of the Mine Act (other than citations issued under section 104(a) or (f) of the Mine Act). (f) Represents (if any) appeals of judges' decisions or orders to the FMSHRC, including petitions for discretionary review and review by the FMSHRC on its own motion.

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