6 unchanged sentences
Our business is competitively positioned to deliver a seamless end-to-end, technology-enabled experience for a well-diversified and stable customer base, each with their own unique requirements in the temperature-controlled supply chain.
−Removed: As of June 30, 2024, we operated an interconnected global temperature-controlled warehouse network, comprising over 84.0 million square feet and 2.9 billion cubic feet of capacity across 483 warehouses predominantly located in densely populated critical-distribution markets, with 312 in North America, 83 in Europe, and 88 in Asia-Pacific.
+Added: As of September 30, 2024, we operated an interconnected global temperature-controlled warehouse network, comprising over 85.0 million square feet and 3.0 billion cubic feet of capacity across 487 warehouses predominantly located in densely populated critical-distribution markets, with 313 in North America, 88 in Asia-Pacific, and 86 in Europe.
We view, manage, and report on our business through two segments:
3 unchanged sentences
On July 26, 2024, we closed our IPO of 56,882,051 shares of our common stock at a price of $78.00 per share, with a subsequent exercise in full by the underwriters of their option to purchase from us an additional 8,532,307 shares of common stock that closed on July 31, 2024.
−Removed: The net proceeds to us from the IPO were approximately $4,875 million.
+Added: The net proceeds to us from the IPO were $4,873 million.
In connection with the IPO, we terminated the operating services agreement between our subsidiary, Lineage Holdings, and Bay Grove Management.
Additionally, we entered into a transition services agreement with Bay Grove Management, pursuant to which Bay Grove Management is expected to provide certain transition services to support capital deployment, mergers, and acquisitions activities for the three years following our IPO.
−Removed: Refer to Note 20, Subsequent events in the condensed consolidated financial statements included in this Quarterly Report for more information regarding our IPO-related transactions.
+Added: Refer to Note 2, Capital structure and noncontrolling interests in the condensed consolidated financial statements included in this Quarterly Report for more information regarding our IPO-related transactions.
Components of Our Results of Operations
8 unchanged sentences
Our global warehousing segment cost of operations consists primarily of labor, power, and other warehouse costs.
−Removed: Labor comprises the largest component of the cost of operations from our global warehousing segment and consists primarily of employee wages (both direct and indirect) and benefits.
−Removed: Changes in our labor expense are driven by, among other
−Removed: things, changes in headcount, changes in compensation levels, and associated performance incentives, the use of third-party labor to support our operations, changes in terms of collective bargaining agreements, changes in customer requirements and associated work content, workforce productivity, labor availability, governmental policies and regulations, and variability in costs associated with employer-provided benefits.
+Added: Labor comprises the largest component of the cost of operations from our global warehousing segment and consists primarily of employee wages (both direct and indirect) and benefits, excluding stock-based compensation.
+Added: Changes in our labor
+Added: expense are driven by, among other things, changes in headcount, changes in compensation levels, and associated performance incentives, the use of third-party labor to support our operations, changes in terms of collective bargaining agreements, changes in customer requirements and associated work content, workforce productivity, labor availability, governmental policies and regulations, and variability in costs associated with employer-provided benefits.
Our second-largest cost of operations of our global warehousing segment is electrical power utilized in the operation of our temperature-controlled warehouses.
12 unchanged sentences
Additionally, in certain markets we employ drivers and operate assets to serve our customers.
−Removed: Costs to operate these assets include wages, fuel, tolls, insurance, and maintenance.
+Added: Costs to operate these assets include wages (excluding stock-based compensation), fuel, tolls, insurance, and maintenance.
Other Consolidated Operating Expenses .
1 unchanged sentence
Our depreciation and amortization expenses result primarily from the capital-intensive nature of our business.
−Removed: The principal components of depreciation relate to our warehouses, both owned and leased, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, and our computer hardware and software.
+Added: The principal components of depreciation relate to our warehouses, both owned and leased, including buildings and improvements, refrigeration equipment, racking, leasehold improvements, material handling equipment, furniture and fixtures, and our computer hardware and internal use software.
We also incur depreciation related to owned transportation assets.
5 unchanged sentences
Acquisition, transaction, and other expenses.
−Removed: Our acquisition, transaction, and other expenses consist of costs with a high level of variability from period-to-period and include professional fees associated with planned and completed business expansion activities, acquisition integration costs, and costs related to public company readiness efforts.
+Added: Our acquisition, transaction, and other expenses consist of costs with a high level of variability from period-to-period and include professional fees associated with planned and completed business expansion activities, and acquisition integration costs.
+Added: In addition, it includes expenses associated with our IPO, including costs related to public company readiness efforts and costs incurred as a result of our IPO in the third quarter of 2024 (see Note 2, Capital structure and noncontrolling interests to the condensed consolidated financial statements included in this Quarterly Report for further detail on costs associated with our IPO).
These costs are expensed as incurred.
−Removed: It also includes employee-related expenses associated with acquisitions, such as acquisition-related severance and consulting agreements and certain cash-based incentive awards given to employees of legacy companies in acquisitions.
+Added: It also includes employee-related expenses
+Added: associated with acquisitions, such as acquisition-related severance and consulting agreements and certain cash-based incentive awards given to employees of legacy companies in acquisitions.
Restructuring, impairment, and (gain) loss on disposals.
−Removed: Our restructuring, impairment, and (gain) loss on disposals include certain contractual and negotiated severance and separation costs from exited former executives, costs relating to reductions in
−Removed: headcount to achieve operational efficiencies, and costs associated with exiting non-strategic operations.
+Added: Our restructuring, impairment, and (gain) loss on disposals include certain contractual and negotiated severance and separation costs from exited former executives, costs relating to reductions in headcount to achieve operational efficiencies, and costs associated with exiting non-strategic operations.
We record such costs when there is a substantive plan for employee severance or employees are otherwise entitled to benefits (e.g.
21 unchanged sentences
Over the long-term, we believe that end-consumer demand will remain consistent with historic levels.
−Removed: Following headwinds in recent years from wage inflation, labor shortages, and team member turnover, our team has focused on strategic initiatives to decrease turnover through higher wages, engagement best practices, and training to help retain talent.
+Added: Following headwinds in recent years from wage inflation, labor shortages, and team member turnover, our team has focused on strategic initiatives to decrease turnover through our stock-based compensation awards, higher wages, engagement best practices, and training to help retain talent.
Retention has improved due to these internal efforts and macroeconomic factors.
22 unchanged sentences
and focusing on increased engagement and retention.
−Removed: We seek to maximize energy efficiency in our warehouses including the latest technology and alternative energy generation practices.
+Added: We seek to maximize energy efficiency in our warehouses by using the latest technology and alternative energy generation practices.
The technologies we deploy include variable frequency drives, refrigeration control systems, rapid close doors, motion sensor technology, LED lighting, and “flywheeling”— an innovative process that leverages machine learning and artificial intelligence to manage energy load based on predictions of peak demand.
2 unchanged sentences
How We Assess the Performance of Our Business
−Removed: Segment Net Operating Income or “NOI”
+Added: Segment Net Operating Income or “Segment NOI”
We evaluate the performance of our business segments based on their net operating income relative to our overall results of operations.
−Removed: We use the term “segment net operating income” or “segment NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges, general and administrative expenses, acquisition, transaction, and other expense and restructuring and impairment expenses).
+Added: We use the term “segment net operating income” or “segment NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges, general and administrative expenses, stock-based compensation expense, restructuring and impairment expense, gains and losses on sale of assets, and acquisition, transaction, and other expenses).
We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting .
7 unchanged sentences
The “same warehouse” pool can also be adjusted during the year to remove properties that were sold or entering development subsequent to the beginning of the current calendar year.
−Removed: As such, the “same warehouse” population for the period ended June 30, 2024 includes all properties that we owned at January 1, 2023 which had both been owned and had reached “normalized operations” by January 1, 2023.
−Removed: We calculate “same warehouse NOI” as revenues for the same warehouse population less its cost of operations (excluding any depreciation and amortization, general and administrative expenses, acquisition, transaction, and other expense, restructuring and impairment expenses and gain or loss on sale of assets).
+Added: As such, the “same warehouse” population for the period
+Added: ended September 30, 2024 includes all properties that we owned at January 1, 2023 which had both been owned and had reached “normalized operations” by January 1, 2023.
+Added: We calculate “same warehouse NOI” as revenues for the same warehouse population less its cost of operations (excluding any depreciation and amortization, general and administrative expenses, stock-based compensation expense, restructuring and impairment expense, gains and losses on sale of assets, and acquisition, transaction, and other expense).
We evaluate the performance of the warehouses we own, lease, or manage using a “same warehouse” analysis, and we believe that same warehouse 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, thereby eliminating the effects of changes in the composition of our warehouse portfolio on performance measures.
−Removed: The following table shows the composition of our warehouse portfolio as of June 30, 2024.
+Added: The following table shows the composition of our warehouse portfolio as of September 30, 2024.
Total warehouses (1)
2 unchanged sentences
__________________
−Removed: (1) Excludes 19 warehouses in our global integrated solutions segment as of June 30, 2024.
+Added: (1) Excludes 19 warehouses in our global integrated solutions segment as of September 30, 2024.
We categorize warehouses as part of our global integrated solutions segment if the primary business conducted in those warehouses is within our global integrated solutions segment.
9 unchanged sentences
We actively seek to enter into minimum storage guarantees when establishing new customer agreements, renewing existing customer agreements or upon a change in the anticipated profile of our customer.
−Removed: We believe that transitioning certain customer contracts from on-demand, as-utilized structures to minimum storage guarantee structures will drive NOI growth and consistency by maintaining our storage revenues during periods of lower inventories.
+Added: We believe that transitioning certain customer contracts from on-demand, as-utilized structures to minimum storage guarantee structures will drive segment NOI growth and consistency by maintaining our storage revenues during periods of lower inventories.
Physical Occupancy of Our Warehouses
7 unchanged sentences
Throughput refers to the volume of inbound pallets that enter our warehouses plus the volume of outbound pallets that exit our warehouses, divided by two.
−Removed: Higher levels of throughput drive warehouse services revenues in our global warehousing segment, as customers are typically billed transactionally for these services.
+Added: Higher levels of throughput drive warehouse services revenues in our global warehousing segment,
+Added: as customers are typically billed transactionally for these services.
The nature of throughput may be driven by the expected inventory turns of the underlying product or commodity.
3 unchanged sentences
Results of Operations
−Removed: Comparison of Results for the Three Months Ended June 30, 2024 and 2023
+Added: Comparison of Results for the Three Months Ended September 30, 2024 and 2023
Global Warehousing Segment
−Removed: The following table presents the operating results of our global warehousing segment for the three months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30,
+Added: The following table presents the operating results of our global warehousing segment for the three months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30,
2024 2023 Change
6 unchanged sentences
972 960 1.3 %
−Removed: $ 50 $ 50 — %
−Removed: 356 348 2.3 %
Other warehouse costs (2)
9 unchanged sentences
Average economic occupancy
−Removed: Average occupied economic pallets
+Added: Average occupied economic pallets (in thousands)
8,078 8,127 (0.6) %
4 unchanged sentences
Average physical occupancy
−Removed: Average physical occupied pallets
+Added: Average physical occupied pallets (in thousands)
7,431 7,485 (0.7) %
−Removed: Average physical pallet positions
+Added: Average physical pallet positions (in thousands)
9,849 9,635 2.2 %
9 unchanged sentences
__________________
−Removed: (1) Includes real estate rent expense of $25 million for the three months ended June 30, 2024 and $25 million for the three months ended June 30, 2023, and non-real estate rent expense (equipment lease and rentals) of $4 million for the three months ended June 30, 2024 and $4 million for the three months ended June 30, 2023.
+Added: (1) Labor cost of operations excludes $1 million of stock-based compensation expense for the three months ended September 30, 2024.
+Added: (2) Includes real estate rent expense of $25 million and $24 million for the three months ended September 30, 2024 and 2023, respectively, and non-real estate rent expense (equipment lease and rentals) of $3 million and $5 million for the three months ended September 30, 2024 and 2023, respectively.
(3) Warehouse storage and warehouse services metrics exclude managed sites.
−Removed: Global warehousing segment revenues were $966 million for the three months ended June 30, 2024, an increase of $2 million, or 0.2%, compared to $964 million for the three months ended June 30, 2023.
−Removed: Revenues were driven by an approximate $16 million increase from our recently completed and in-progress expansion and development projects and an approximate $14 million increase from acquisitions.
−Removed: This growth was offset by a $21 million decrease in our same warehouse pool and an $8 million decrease from closed facilities.
−Removed: In addition, the foreign currency translation of revenues earned by our foreign operations had a $3 million unfavorable impact compared to the three months ended June 30, 2023.
−Removed: Global warehousing segment cost of operations was $582 million for the three months ended June 30, 2024, a decrease of $1 million, or 0.2%, compared to $583 million for the three months ended June 30, 2023.
−Removed: The cost of operations for our same warehouse pool decreased $13 million, representing decreases across power and other warehouse costs.
−Removed: In addition, there was a $6 million decrease in cost of operations from closed facilities.
+Added: Global warehousing segment revenues were $972 million for the three months ended September 30, 2024, an increase of $12 million, or 1.3%, compared to $960 million for the three months ended September 30, 2023.
+Added: The increase in revenues was driven by an approximate $17 million increase from acquisitions and an approximate $15 million increase from our recently
+Added: completed and in-progress expansion and development projects.
+Added: This growth was offset by a $15 million decrease from other non-same warehouse sites, including closed facilities, and a $5 million decrease in our same warehouse pool.
+Added: The decrease in our same warehouse pool was primarily driven by lower utilization and throughput volumes, partially offset by a favorable increase in rates.
+Added: In addition, the foreign currency translation of revenues earned by our foreign operations had a $3 million favorable impact compared to the three months ended September 30, 2023.
+Added: Global warehousing segment cost of operations was $589 million for the three months ended September 30, 2024, a decrease of $4 million, or 0.7%, compared to $593 million for the three months ended September 30, 2023.
+Added: The cost of operations for our same warehouse pool decreased $13 million, representing decreases across labor and other warehouse costs.
+Added: In addition, there was a $10 million decrease in cost of operations from other non-same warehouse sites, including closed facilities.
These cost decreases were offset by increases of approximately $11 million from the additional facilities we acquired in connection with the above-mentioned acquisitions and approximately $8 million related to our recently completed and in-progress expansion and development projects.
−Removed: In addition, the foreign currency translation of cost of operations from our foreign operations had a $2 million favorable impact compared to the three months ended June 30, 2023.
−Removed: Global warehousing segment NOI was $384 million for the three months ended June 30, 2024, an increase of $3 million, or 0.8%, compared to $381 million for the three months ended June 30, 2023.
−Removed: The NOI for our same warehouse pool decreased $8 million or 2.3%, attributable to revenue and cost of operations factors previously described.
−Removed: In addition, there was a $2 million net decrease in NOI from closed facilities.
−Removed: Global warehousing segment NOI was positively impacted by approximately $9 million related to our recently completed and in-process expansion and development projects as they continue to ramp up prior to stabilization and approximately $6 million related to the above mentioned acquisitions.
−Removed: Foreign currency translation had a $1 million unfavorable impact to the global warehousing segment NOI period-over-period.
+Added: In addition, the foreign currency translation of cost of operations from our foreign operations had a $3 million unfavorable impact compared to the three months ended September 30, 2023.
+Added: Global warehousing segment NOI was $383 million for the three months ended September 30, 2024, an increase of $16 million, or 4.4%, compared to $367 million for the three months ended September 30, 2023.
+Added: The segment NOI for our same warehouse pool increased $8 million or 2.4%, attributable to revenue and cost of operations factors previously described.
+Added: In addition, segment NOI was positively impacted by approximately $7 million related to our recently completed and in-process expansion and development projects as they continue to ramp up prior to stabilization and approximately $6 million related to the above-mentioned acquisitions.
+Added: These were offset by a $5 million net decrease from other non-same warehouse sites, including closed facilities.
Same Warehouse Result
−Removed: The following table presents revenues, cost of operations, NOI, and margins for our same warehouses for the three months ended June 30, 2024 and June 30, 2023.
−Removed: Three Months Ended June 30,
+Added: The following table presents revenues, cost of operations, same warehouse NOI, and margins for our same warehouses for the three months ended September 30, 2024 and September 30, 2023.
+Added: Three Months Ended September 30,
2024 2023 Change
7 unchanged sentences
306 311 (1.6) %
−Removed: 311 310 0.3 %
Other warehouse costs
9 unchanged sentences
Economic occupancy
−Removed: Average occupied economic pallets
+Added: Average occupied economic pallets (in thousands)
7,005 7,172 (2.3) %
4 unchanged sentences
Physical occupancy
−Removed: Average physical occupied pallets
+Added: Average physical occupied pallets (in thousands)
6,461 6,604 (2.2) %
−Removed: Average physical pallet positions
+Added: Average physical pallet positions (in thousands)
8,331 8,341 (0.1) %
10 unchanged sentences
(1) Warehouse storage and warehouse services metrics exclude managed sites.
−Removed: Economic occupancy at our same warehouses was 84.1% for the three months ended June 30, 2024, a decrease of 300 basis points compared to 87.1% for the three months ended June 30, 2023.
+Added: Economic occupancy at our same warehouses was 84.1% for the three months ended September 30, 2024, a decrease of 190 basis points compared to 86.0% for the three months ended September 30, 2023.
Our economic occupancy at our same warehouses was 650 basis points higher than our corresponding average physical occupancy of 77.6%.
1 unchanged sentence
Same warehouse storage revenues per economic occupied pallet decreased 0.9% period-over-period, primarily driven by a change in our business profile due to customer rationalization of inventory.
−Removed: Throughput pallets at our same warehouses were 11.4 million pallets for the three months ended June 30, 2024, a decrease of 1.3% from 11.5 million pallets for the three months ended June 30, 2023.
−Removed: This decrease was the result of lower turns due to continued economic pressures driven by higher interest rates.
−Removed: Same warehouse services revenue per throughput pallet decreased 0.2% compared to the prior year, primarily driven by a change in our business profile due to customer rationalization of inventory.
+Added: Throughput pallets at our same warehouses were 11.3 million pallets for the three months ended September 30, 2024, a decrease of 1.7% from 11.5 million pallets for the three months ended September 30, 2023.
+Added: The decrease was the result of lower turns due to continued economic pressures driven by higher interest rates.
+Added: Same warehouse services revenue per throughput pallet increased 3.7% compared to the prior year, primarily driven by a change in our business profile due to customer rationalization of inventory.
Non-Same Warehouse Results
−Removed: The following tables present revenues, cost of operations, NOI, and margins for our non-same warehouses for the three months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30,
+Added: The following table presents revenues, cost of operations, non-same warehouse NOI, and margins for our non-same warehouses for the three months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30,
2024 2023 Change
5 unchanged sentences
129 112 15.2 %
−Removed: $ 7 $ 6 16.7 %
Other warehouse costs
Total non-same warehouse cost of operations
−Removed: $ 79 $ 67 17.9 %
Non-same warehouse NOI
5 unchanged sentences
Economic occupancy
−Removed: Average occupied economic pallets
+Added: Average occupied economic pallets (in thousands)
1,073 955 12.4 %
4 unchanged sentences
Physical occupancy
−Removed: Average physical occupied pallets
+Added: Average physical occupied pallets (in thousands)
970 881 10.1 %
−Removed: Average physical pallet positions
+Added: Average physical pallet positions (in thousands)
1,518 1,294 17.3 %
12 unchanged sentences
Global Integrated Solutions Segment
−Removed: The following table presents the operating results of our global integrated solutions segment for the three months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30,
+Added: The following table presents the operating results of our global integrated solutions segment for the three months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30,
2024 2023 Change
8 unchanged sentences
15.4 % 17.1 % (170) bps
−Removed: Global integrated solutions segment revenues were $372 million for the three months ended June 30, 2024, a decrease of $10 million, or 2.6%, compared to $382 million for the three months ended June 30, 2023.
−Removed: The decrease was due to lower volumes and fuel surcharges and the sale of a European subsidiary which occurred in September 2023, offset by increases from acquisitions which closed in the fourth quarter of 2023.
−Removed: Global integrated solutions segment cost of operations was $309 million for the three months ended June 30, 2024, a decrease of $13 million, or 4.0%, compared to $322 million for the three months ended June 30, 2023.
−Removed: The decrease was due to lower volumes, cost controls, and the above-mentioned sale of a European subsidiary, offset by increases from the above-mentioned 2023 acquisitions.
−Removed: Global integrated solutions segment NOI was $63 million for the three months ended June 30, 2024, an increase of $3 million, or 5.0%, compared to $60 million for the three months ended June 30, 2023.
+Added: Global integrated solutions segment revenues were $363 million for the three months ended September 30, 2024, a decrease of $6 million, or 1.6%, compared to $369 million for the three months ended September 30, 2023.
+Added: The decrease was due to lower volumes and the sale of a European subsidiary which occurred in September 2023, offset by increases from acquisitions.
+Added: In addition, the foreign currency translation of revenues earned by our foreign operations had a $3 million favorable impact compared to the three months ended September 30, 2023.
+Added: Global integrated solutions segment cost of operations was $307 million for the three months ended September 30, 2024, an increase of $1 million, or 0.3%, compared to $306 million for the three months ended September 30, 2023.
+Added: The net increase included the above-mentioned acquisitions, partially offset by lower costs driven by volumes, cost controls, and the above-mentioned sale of a European subsidiary.
+Added: The foreign currency translation of cost of operations from our foreign operations had a $2 million unfavorable impact compared to the three months ended September 30, 2023.
+Added: Global integrated solutions segment NOI was $56 million for the three months ended September 30, 2024, a decrease of $7 million, or 11.1%, compared to $63 million for the three months ended September 30, 2023.
+Added: Foreign currency translation had a $1 million favorable net impact compared to the three months ended September 30, 2023.
Other Consolidated Operating Expenses
−Removed: Three Months Ended June 30, Change
+Added: Three Months Ended September 30, Change
(in millions)
5 unchanged sentences
Acquisition, transaction, and other expense
−Removed: $ 12 $ 15 (20.0) %
+Added: $ 592 $ 19 n.m.
Restructuring, impairment, and (gain) loss on disposals
_______________
+Added: (not meaningful) throughout this Quarterly Report is used in place of percentage changes where the change is excessive, involves a comparison between income and loss amounts, or involves a comparison to zero.
Depreciation and amortization expense .
−Removed: Depreciation and amortization expense was $219 million for the three months ended June 30, 2024, an increase of $31 million, or 16.5%, compared to $188 million for the three months ended June 30, 2023.
+Added: Depreciation and amortization expense was $210 million for the three months ended September 30, 2024, an increase of $22 million, or 11.7%, compared to $188 million for the three months ended September 30, 2023.
The increase was primarily due to information technology investments, acquisitions, and greenfield and expansion projects.
General and administrative expense.
−Removed: General and administrative expenses were $127 million for the three months ended June 30, 2024, an increase of $3 million, or 2.4%, compared to $124 million for the three months ended June 30, 2023.
−Removed: The increase in general and administrative expense was primarily due to growing our global platform in support of our expanding operations.
−Removed: We expect our general and administrative expenses to stabilize and generate operating leverage.
−Removed: For the three months ended June 30, 2024 and 2023, general and administrative expenses were 9.5% and 9.2% of total revenues, respectively.
+Added: General and administrative expenses were $143 million for the three months ended September 30, 2024, an increase of $21 million, or 17.2%, compared to $122 million for the three months ended September 30, 2023.
+Added: The increase was primarily driven by higher stock-based compensation expense related to our annual grants.
+Added: We expect our general and administrative expenses to stabilize over time and generate operating leverage.
+Added: For the three months ended September 30, 2024 and 2023, general and administrative expenses were 10.7% and 9.2% of total revenues, respectively.
Acquisition, transaction, and other expense .
−Removed: Acquisition, transaction and other expenses were $12 million for the three months ended June 30, 2024, a decrease of $3 million compared to $15 million for the three months ended June 30, 2023, primarily related to fewer acquisition-related costs in 2024 compared to 2023.
+Added: Acquisition, transaction, and other expenses were $592 million for the three months ended September 30, 2024, an increase of $573 million compared to $19 million for the three months ended September 30, 2023.
+Added: The increase was primarily due to costs associated with our IPO, including internalization costs and stock-based compensation expense.
+Added: For further detail on costs associated with our IPO and stock-based compensation, see Note 2, Capital structure and noncontrolling interests and Note 15, Stock-based compensation to the condensed consolidated financial statements included in this Quarterly Report.
Restructuring, impairment, and (gain) loss on disposals .
−Removed: Restructuring, impairment, and (gain) loss on disposals were net expenses of $15 million for the three months ended June 30, 2024, an increase of $12 million compared to net expenses of $3 million for the three months ended June 30, 2023.
−Removed: The increase was related to impairment charges primarily resulting from
−Removed: losses on properties classified as held for sale and higher severance expenses.
−Removed: The three months ended June 30, 2024 also included a net loss of $1 million related to a fire which occurred at the Company’s warehouse in Kennewick, Washington (see Note 16, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
+Added: Restructuring, impairment, and (gain) loss on disposals were net expenses of $8 million for the three months ended September 30, 2024, an increase of $4 million compared to net expenses of $4 million for the three months ended September 30, 2023.
+Added: The increase was related to higher impairment expense primarily related to properties sold or classified as held for sale and higher severance costs.
+Added: Partially offsetting these increases, the three months ended September 30, 2024 also included a net gain of $5 million related to a fire which occurred at the Company’s warehouse in Kennewick, Washington (see Note 17, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
Other Income (Expense)
−Removed: The following table presents other items of income and expense for the three months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Change
+Added: The following table presents other items of income and expense for the three months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Change
(in millions)
1 unchanged sentence
Interest expense, net $ (82) $ (126) (34.9) %
−Removed: $ (148) $ (116) 27.6 %
−Removed: Gain (loss) on foreign currency transactions, net
−Removed: $ 2 $ (3) (166.7) %
−Removed: Equity income (loss), net of tax
−Removed: $ (1) $ — — %
+Added: Gain (loss) on extinguishment of debt $ (6) $ — n.m.
+Added: Gain (loss) on foreign currency transactions, net $ 14 $ (5) n.m.
+Added: Equity income (loss), net of tax $ — $ (2) n.m.
+Added: Other nonoperating income (expense), net $ 1 $ (19) n.m.
Interest (expense), net.
−Removed: Interest (expense), net was $148 million for the three months ended June 30, 2024, an increase of $32 million, or 27.6%, compared to $116 million for the three months ended June 30, 2023.
−Removed: The average effective interest rate of our outstanding debt increased from 5.6% for the three months ended June 30, 2023 to 6.3% for the three months ended June 30, 2024, due to higher average borrowings paired with rising interest rates associated primarily with our credit facilities and CMBS loans.
−Removed: When taking into account income (expense) generated from those hedging instruments, the average effective interest rate of our outstanding debt increased from 4.3% for the three months ended June 30, 2023 to 5.2% for the three months ended June 30, 2024.
+Added: We reported a net interest expense of $82 million for the three months ended September 30, 2024, a decrease of $44 million, or 34.9%, compared to $126 million for the three months ended September 30, 2023.
+Added: The average effective interest rate of our outstanding debt was 5.8% for the three months ended September 30, 2024, a decrease from 6.2% for the three months ended September 30, 2023, primarily due to the substantial debt repayments with IPO proceeds.
+Added: When taking into account income (expense) generated from hedging instruments, the average effective interest rate of our outstanding debt was 4.2% for the three months ended September 30, 2024, a decrease from 4.8% for the three months ended September 30, 2023.
+Added: Gain (loss) on extinguishment of debt.
+Added: We reported a net loss on debt extinguishment of $6 million for the three months ended September 30, 2024, related to unamortized deferred financing costs previously capitalized for the Delayed Draw Term Loan (DDTL), which was repaid on July 26, 2024.
+Added: There was no gain (loss) on debt extinguishment recognized for the three months ended September 30, 2023.
+Added: For additional information regarding our debt, see Note 9, Debt in our condensed consolidated financial statements included in this Quarterly Report.
Gain (loss) on foreign currency transactions, net.
−Removed: We reported a net foreign currency exchange gain of $2 million for the three months ended June 30, 2024, compared to a net loss of $3 million for the three months ended June 30, 2023.
−Removed: The increase in foreign currency exchange gain was due to more favorable foreign currency exchange rates driven by the relative strength of the foreign currencies we transact in, primarily the Australian dollar, against the US dollar.
+Added: We reported a net foreign currency exchange gain of $14 million for the three months ended September 30, 2024, compared to a net loss of $5 million for the three months ended September 30, 2023.
+Added: The increase in foreign currency exchange gain was due was due to more favorable foreign currency exchange rates against the U.S.
+Added: dollar, with the largest impacts driven by the Euro and Australian dollar.
Equity income (loss), net of tax.
−Removed: We reported a net loss from equity method investments of $1 million for the three months ended June 30, 2024, compared to no net income (loss) for the three months ended June 30, 2023, primarily related to our investments in Emergent Cold LatAm Holdings, LLC and Ndustrial.io.
+Added: We reported less than $1 million of net income (loss) from equity method investments for the three months ended September 30, 2024, compared to a net loss of $2 million for the three months ended September 30, 2023, primarily related to our investment in Emergent Cold LatAm Holdings, LLC.
+Added: Other nonoperating income (expense), net.
+Added: We reported $1 million of other nonoperating income for the three months ended September 30, 2024, an increase of $20 million compared to net expenses of $19 million for the three months ended September 30, 2023.
+Added: During the three months ended September 30, 2023, the Company recognized a net loss of $21 million on
+Added: the sale of Erweda BV, a European subsidiary.
+Added: For additional information regarding the divestiture, see Note 4, Business combinations, asset acquisitions, and divestitures in our condensed consolidated financial statements included in this Quarterly Report.
Income Tax Expense (Benefit)
−Removed: Income tax benefit for the three months ended June 30, 2024 was $7 million, compared to no net expense (benefit) for the three months ended June 30, 2023.
−Removed: The tax benefit in 2024 was principally created by the tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and withholding taxes paid in various jurisdictions.
+Added: Income tax benefit for the three months ended September 30, 2024 was $45 million, which represented an increase of $40 million from an income tax benefit of $5 million for the three months ended September 30, 2023.
+Added: The tax benefit in 2024 was principally created by the release of a $24 million valuation allowance on deferred tax assets relating to net operating losses carryforwards in the U.S., the tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and withholding taxes paid in various jurisdictions.
+Added: The tax expense (benefit) in 2023 was principally created by tax-effect of pre-tax earnings and losses in various jurisdictions, tax adjustments related to REIT activity, and changes to uncertain tax positions.
Our income taxes are discussed in more detail in Note 8, Income taxes to the condensed consolidated financial statements included in this Quarterly Report.
3 unchanged sentences
In 2024, we expect to incur insignificant tax expenses in connection with Pillar Two and are continuing to evaluate the potential impact on our business in future periods.
−Removed: Comparison of Results for the Six Months Ended June 30, 2024 and 2023
+Added: Comparison of Results for the Nine Months Ended September 30, 2024 and 2023
Global Warehousing Segment
−Removed: The following table presents the operating results of our warehouse segment for the six months ended June 30, 2024 and 2023.
−Removed: Six Months Ended June 30,
+Added: The following table presents the operating results of our warehouse segment for the nine months ended September 30, 2024 and 2023.
+Added: Nine Months Ended September 30,
2024 2023 Change
19 unchanged sentences
Average economic occupancy
−Removed: Average occupied economic pallets
+Added: Average occupied economic pallets (in thousands)
8,121 8,214 (1.1) %
4 unchanged sentences
Average physical occupancy
−Removed: Average physical occupied pallets
+Added: Average physical occupied pallets (in thousands)
7,504 7,656 (2.0) %
−Removed: Average physical pallet positions
+Added: Average physical pallet positions (in thousands)
9,803 9,597 2.1 %
9 unchanged sentences
_______________
−Removed: (1) Includes real estate rent expense of $50 million and $47 million for the six months ended June 30, 2024 and 2023, respectively;
−Removed: non-real estate rent expense (equipment lease and rentals) of $9 million and $11 million for the six months ended June 30, 2024 and 2023, respectively.
+Added: (1) Excludes $1 million of stock-based compensation expense for the nine months ended September 30, 2024.
+Added: (2) Includes real estate rent expense of $75 million and $71 million for the nine months ended September 30, 2024 and 2023, respectively, and non-real estate rent expense (equipment lease and rentals) of $12 million and $16 million for the nine months ended September 30, 2024 and 2023, respectively.
(3) Warehouse storage and warehouse services metrics exclude managed sites.
−Removed: Global warehousing segment revenues were $1,935 million for the six months ended June 30, 2024, an increase of $13 million, or 0.7%, compared to $1,922 million for the six months ended June 30, 2023.
−Removed: Revenues were driven by an approximate $32 million increase from our recently completed and in-progress expansion and development projects and $28 million from acquisitions.
−Removed: This growth was offset by a $36 million decrease in our same warehouse pool and a $9 million decrease from close facilities.
−Removed: In addition, the foreign currency translation of revenues earned by our foreign operations had a $2 million unfavorable impact compared to the six months ended June 30, 2023.
−Removed: Global warehousing segment cost of operations was $1,166 million for the six months ended June 30, 2024, an increase of $11 million, or 1.0%, compared to $1,155 million for the six months ended June 30, 2023.
−Removed: Approximately $18 million of the increase
−Removed: was driven by the additional facilities we acquired in connection with the above-mentioned acquisitions.
−Removed: We also incurred higher costs of approximately $16 million related to our recently completed and in-progress expansion and development projects.
−Removed: These were offset by a decrease from our same warehouse pool of $18 million, representing decreases across power and other services costs.
−Removed: In addition, there was a $4 million decrease in cost of operations from closed facilities.
−Removed: The foreign currency translation of cost of operations from our foreign operations had a $1 million favorable impact compared to the six months ended June 30, 2023.
−Removed: Global warehousing segment NOI was $769 million for the six months ended June 30, 2024, an increase of $2 million, or 0.3%, compared to $767 million for the six months ended June 30, 2023.
+Added: Global warehousing segment revenues were $2,907 million for the nine months ended September 30, 2024, an increase of $25 million, or 0.9%, compared to $2,882 million for the nine months ended September 30, 2023.
+Added: The net increase was primarily driven by $47 million from acquisitions and approximately $46 million from our recently completed and in-progress expansion and development projects, partially offset by a $41 million decrease in our same wareh ouse pool and a $27 million decrease from other non-same warehouse sites including closed facilities.
+Added: The decrease in our same warehouse pool was primarily driven by
+Added: lower utilization and throughput volumes, partially offset by a favorable increase in rates.
+Added: In addition, the foreign currency translation of revenues earned by our foreign operations had a $1 million favorable impact compared to the nine months ended September 30, 2023.
+Added: Global warehousing segment cost of operations was $1,755 million for the nine months ended September 30, 2024, an increase of $7 million, or 0.4%, compared to $1,748 million for the nine months ended September 30, 2023.
+Added: The net increase was primarily driven by $28 million from acquisitions and $25 million from our recently com pleted and in-progress expansion and development projects, partially offset by a $31 million decrease in our same warehouse pool and a $15 million decrease from other non-same warehouse sites including closed facilities.
+Added: The decrease in our same warehouse pool was driven by lower power and other warehouse costs.
+Added: The foreign currency translation of cost of operations from our foreign o perations had a $1 million unfavorable impact compared to the nine months ended September 30, 2023.
+Added: Global warehousing segment NOI was $1,152 million for the nine months ended September 30, 2024, an increase of $18 million, or 1.6%, compared to $1,134 million for the nine months ended September 30, 2023.
Global warehousing segment NOI was positively impacted by approximately $21 million related to our recently completed and in-process expansion and development projects as they continue to ramp up prior to stabilization and approximately $19 million related to the above mentioned acquisitions.
−Removed: These were offset by a decrease from our same warehouse pool of $18 million or 2.5%, attributable the to revenue and cost of operations factors previously described.
−Removed: In addition, there was a $5 million net decrease in NOI from closed facilities.
−Removed: Foreign currency translation had a $1 million unfavorable impact compared to the six months ended June 30, 2023.
+Added: These were offset by a decrease from our same warehouse pool of $10 million, or 1.0%, attributable to the revenue and cost of operations factors previously described.
+Added: In addition, there was a $12 million net decrease from other non-same warehouse sites including closed facilities.
Same Warehouse Results
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 2023 Change
12 unchanged sentences
Economic occupancy
−Removed: Average occupied economic pallets 7,131 7,424 (3.9) %
+Added: Average occupied economic pallets (in thousands) 7,038 7,286 (3.4) %
Economic occupancy percentage 84.3 % 87.3 % (300) bps
1 unchanged sentence
Physical occupancy
−Removed: Average physical occupied pallets 6,592 6,934 (4.9) %
−Removed: Average physical pallet positions 8,448 8,432 0.2 %
+Added: Average physical occupied pallets (in thousands) 6,499 6,772 (4.0) %
+Added: Average physical pallet positions (in thousands) 8,350 8,342 0.1 %
Physical occupancy percentage 77.8 % 81.2 % (340) bps
3 unchanged sentences
Warehouse services revenue per throughput pallet $ 32.34 $ 31.84 1.6 %
−Removed: __________________
(1) Warehouse storage and warehouse services metrics exclude managed sites.
−Removed: Economic occupancy at our same warehouses was 84.4% for the six months ended June 30, 2024, a decrease of 360 basis points compared to 88.0% for the six months ended June 30, 2023.
+Added: Economic occupancy at our same warehouses was 84.3% for the nine months ended September 30, 2024, a decrease of 300 basis points compared to 87.3% for the nine months ended September 30, 2023.
Our economic occupancy at our same warehouses was 650 basis points higher than our corresponding average physical occupancy of 77.8%.
1 unchanged sentence
Same warehouse storage revenues per economic occupied pallet increased 0.3% period-over-period, primarily driven by a change in our business profile due to customer rationalization of inventory.
−Removed: Throughput pallets at our same warehouses were 22.5 million pallets for the six months ended June 30, 2024, a decrease of 1.9% from 23.0 million pallets for the six months ended June 30, 2023.
−Removed: This decrease was the result of lower turns due to continued economic pressures driven by higher interest rates.
+Added: Throughput pallets at our same warehouses were 33.6 million pallets for the nine months ended September 30, 2024, a decrease of 2.0% from 34.3 million pallets for the nine months ended September 30, 2023.
+Added: Th is decrease was the result of lower turns due to continued economic pressures driven by higher interest rates.
Same warehouse services revenue per throughput pallet increased 1.6% compared to the prior year, primarily driven by a change in our business profile due to customer rationalization of inventory.
Non-Same Warehouse Results
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 2023 Change
17 unchanged sentences
Economic occupancy
−Removed: Average occupied economic pallets
+Added: Average occupied economic pallets (in thousands)
1,083 928 16.7 %
4 unchanged sentences
Physical occupancy
−Removed: Average physical occupied pallets
+Added: Average physical occupied pallets (in thousands)
1,005 884 13.7 %
−Removed: Average physical pallet positions
+Added: Average physical pallet positions (in thousands)
1,453 1,255 15.8 %
12 unchanged sentences
Global Integrated Solutions Segment
−Removed: The following table presents the operating results of our global integrated solutions segment for the six months ended June 30, 2024 and 2023.
−Removed: Six Months Ended June 30,
+Added: The following table presents the operating results of our global integrated solutions segment for the nine months ended September 30, 2024 and 2023.
+Added: Nine Months Ended September 30,
2024 2023 Change
8 unchanged sentences
16.3 % 16.0 % 30 bps
−Removed: Global integrated solutions segment revenues were $731 million for the six months ended June 30, 2024, a decrease of $26 million, or 3.4%, compared to $757 million for the six months ended June 30, 2023.
−Removed: The decrease was due to lower volumes and fuel surcharges and the sale of a European subsidiary which occurred in September 2023, offset by increases from acquisitions which closed in the fourth quarter of 2023.
−Removed: Global integrated solutions segment cost of operations was $609 million for the six months ended June 30, 2024, a decrease of $31 million, or 4.8%, compared to $640 million for the six months ended June 30, 2023.
+Added: Global integrated solutions segment revenues were $1,094 million for the nine months ended September 30, 2024, a decrease of $32 million, or 2.8%, compared to $1,126 million for the nine months ended September 30, 2023.
+Added: The decrease was due to lower volumes and the sale of a European subsidiary which occurred in September 2023, offset by increases from acquisitions.
+Added: In addition, the foreign currency translation of revenues earned by our foreign operations had a $5 million favorable impact compared to the nine months ended September 30, 2023.
+Added: Global integrated solutions segment cost of operations was $916 million for the nine months ended September 30, 2024, a decrease of $30 million, or 3.2%, compared to $946 million for the nine months ended September 30, 2023.
The decrease was due to lower volumes, cost controls, and the above-mentioned sale of a European subsidiary, offset by increases from the above-mentioned acquisitions.
−Removed: Global integrated solutions segment NOI was $122 million for the six months ended June 30, 2024, an increase of $5 million, or 4.3%, compared to $117 million for the six months ended June 30, 2023.
+Added: The foreign currency translation of cost of operations from our foreign operations had a $4 million unfavorable impact compared to the nine months ended September 30, 2023.
+Added: Global integrated solutions segment NOI was $178 million for the nine months ended September 30, 2024, a decrease of $2 million, or 1.1%, compared to $180 million for the nine months ended September 30, 2023.
+Added: Foreign currency translation had a $1 million favorable net impact compared to nine three months ended September 30, 2023.
Other Consolidated Operating Expenses
−Removed: Six Months Ended June 30, Change
+Added: Nine Months Ended September 30, Change
(in millions)
9 unchanged sentences
Depreciation and amortization expense .
−Removed: Depreciation and amortization expense was $430 million for the six months ended June 30, 2024, an increase of $61 million, or 16.5%, compared to $369 million for the six months ended June 30, 2023.
−Removed: The increase was primarily due to information technology investments, acquisitions, and greenfield and expansions projects.
+Added: Depreciation and amortization expense was $640 million for the nine months ended September 30, 2024, an increase of $83 million, or 14.9%, compared to $557 million for the nine months ended September 30, 2023.
+Added: The increase was primarily due to information technology investments, acquisitions, and greenfield and expansion projects.
General and administrative expense .
−Removed: General and administrative expenses were $251 million for the six months ended June 30, 2024, an increase of $12 million, or 5.0%, compared to $239 million for the six months ended June 30, 2023.
−Removed: The increase in general and administrative expense was primarily due to growing our global platform in support of our expanding operations.
−Removed: We expect our general and administrative expenses to stabilize and generate operating leverage.
−Removed: For the six months ended June 30, 2024 and 2023, general and administrative expenses were 9.4% and 8.9% of total revenues, respectively.
+Added: General and administrative expenses were $394 million for the nine months ended September 30, 2024, an increase of $33 million, or 9.1%, compared to $361 million for the nine months ended September 30, 2023.
+Added: The increase was primarily due to higher stock-based compensation expense related to our annual grants and other costs associated with our information technology infrastructure and expanding operations.
+Added: We expect our general and administrative expenses to stabilize over time and generate operating leverage.
+Added: For the nine months ended September 30, 2024 and 2023, general and administrative expenses were 9.8% and 9.0% of total revenues, respectively.
Acquisition, transaction, and other expense .
−Removed: Acquisition, transaction, and other expenses were $20 million for the six months ended June 30, 2024, a decrease of $6 million compared to $26 million for the six months ended June 30, 2023, primarily related to fewer acquisition and transaction related costs in 2024 compared to 2023.
+Added: Acquisition, transaction, and other expenses were $612 million for the nine months ended September 30, 2024, an increase of $567 million compared to $45 million for the nine months ended September 30, 2023.
+Added: The increase was primarily due to costs associated with our IPO, including internalization costs and stock-based compensation expense.
+Added: For further detail on costs associated with our IPO and stock-based compensation, see Note 2, Capital structure and noncontrolling interests and Note 15, Stock-based compensation to the condensed consolidated financial statements included in this Quarterly Report.
Restructuring, impairment, and (gain) loss on disposals .
−Removed: Restructuring, impairment, and (gain) loss on disposals were a net expense of $15 million for the six months ended June 30, 2024, an increase of $8 million compared to a net expense of $7 million for the six months ended June 30, 2023.
−Removed: The increase was related to impairment charges primarily resulting from losses on
−Removed: properties classified as held for sale and higher severance expenses.
−Removed: The six months ended June 30, 2024 included a net loss of $1 million related to a fire which occurred at the Company’s warehouse in Kennewick, Washington (see Note 16, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
+Added: Restructuring, impairment, and (gain) loss on disposals were a net expense of $23 million for the nine months ended September 30, 2024, an increase of $12 million compared to a net expense of $11 million for the nine months ended September 30, 2023.
+Added: The increase was related to higher impairment expense primarily related to properties sold or classified as held for sale and higher severance costs.
+Added: In addition, the nine months ended September 30, 2024 included a net gain of $4 million related to a fire which occurred at the Company’s warehouse in Kennewick, Washington (see Note 17, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
Other Income (Expense)
−Removed: The following table presents other items of income and expense for the six months ended June 30, 2024 and 2023.
−Removed: Six Months Ended June 30, Change
+Added: The following table presents other items of income and expense for the nine months ended September 30, 2024 and 2023.
+Added: Nine Months Ended September 30, Change
(in millions)
1 unchanged sentence
Interest expense, net $ (369) $ (357) 3.4 %
−Removed: $ (287) $ (231) 24.2 %
−Removed: Gain (loss) on extinguishment of debt
−Removed: $ (7) $ — — %
−Removed: Gain (loss) on foreign currency transactions, net
−Removed: $ (9) $ (4) 125.0 %
+Added: Gain (loss) on extinguishment of debt $ (13) $ — n.m.
+Added: Gain (loss) on foreign currency transactions, net $ 5 $ (9) n.m.
Equity income (loss), net of tax $ (3) $ (2) 50.0 %
−Removed: $ (3) $ — — %
+Added: Other nonoperating income (expense), net $ 1 $ (19) n.m.
Interest (expense), net.
−Removed: Interest (expense), net was $287 million for the six months ended June 30, 2024, an increase of $56 million, or 24.2%, compared to $231 million for the six months ended June 30, 2023.
−Removed: The average effective interest rate of our outstanding debt increased from 5.6% for the six months ended June 30, 2023 to 6.4% for the six months ended June 30, 2024, due to higher average borrowings paired with rising interest rates associated primarily with our credit facilities and CMBS loans.
−Removed: When taking into account income (expense) generated from those hedging instruments, the average effective interest rate of our outstanding debt increased from 4.3% for the six months ended June 30, 2023 to 5.3% for the six months ended June 30, 2024.
+Added: We reported a net interest expense of $369 million for the nine months ended September 30, 2024, an increase of $12 million, or 3.4%, compared to $357 million for the nine months ended September 30, 2023.
+Added: The average effective interest rate of our outstanding debt was 6.4% for the nine months ended September 30, 2024, an increase from 5.8% for the nine months ended September 30, 2023, due to higher interest expense prior to substantial debt repayments with IPO proceeds.
+Added: When taking into account income (expense) generated from those hedging instruments, the average effective interest rate of our outstanding debt was 5.1% for the nine months ended September 30, 2024, an increase from 4.5% for the nine months ended September 30, 2023.
Gain (loss) on extinguishment of debt.
−Removed: Gain (loss) on debt extinguishment was a loss of $7 million for the six months ended June 30, 2024, as the result of various debt refinancing arrangements.
−Removed: There was no gain (loss) on debt extinguishment recognized for the six months ended June 30, 2023.
−Removed: For additional information regarding our debt, see Note 9, Debt to the condensed consolidated financial statements included in this Quarterly Report.
+Added: Gain (loss) on debt extinguishment was a loss of $13 million for the nine months ended September 30, 2024, as the result of various debt refinancing arrangements.
+Added: There was no gain (loss) on debt extinguishment recognized for the nine months ended September 30, 2023.
+Added: For additional information regarding our debt, see Note 9, Debt in our condensed consolidated financial statements included in this Quarterly Report.
Gain (loss) on foreign currency transactions, net.
−Removed: We reported a net foreign currency exchange loss of $9 million for the six months ended June 30, 2024 compared to a net loss of $4 million for the six months ended June 30, 2023.
−Removed: The increase in foreign currency exchange loss was due to less favorable foreign currency exchange rates driven by the relative strength of the foreign currencies we transact in, primarily the euro and the Australian dollar, against the US dollar.
+Added: We reported a net foreign currency exchange gain of $5 million for the nine months ended September 30, 2024 compared to a net loss of $9 million for the nine months ended September 30, 2023.
+Added: The increase in foreign currency exchange gain was due to more favorable foreign currency exchange rates against the U.S.
+Added: dollar, with the largest impacts driven by the Euro.
Equity income (loss), net of tax.
−Removed: We reported a net loss from equity method investments of $3 million for the six months ended June 30, 2024, as compared to no net income (loss) for the six months ended June 30, 2023, primarily related to our investments in Emergent Cold LatAm Holdings, LLC.
+Added: We reported a net loss from equity method investments of $3 million for the nine months ended September 30, 2024, as compared to $2 million net loss for the nine months ended September 30, 2023.
+Added: The increase in net loss was primarily related to our investment in Emergent Cold LatAm Holdings, LLC, partially offset by a gain recognized from our investment in Ndustrial.io.
+Added: Other nonoperating income (expense).
+Added: We reported $1 million of other nonoperating income for the nine months ended September 30, 2024, compared to net expenses of $19 million for the nine months ended September 30, 2023.
+Added: During the nine months ended
+Added: September 30, 2023, the Company recognized a net loss of $21 million on the sale of Erweda BV, a European subsidiary.
+Added: For additional information regarding the divestiture, see Note 4, Business combinations, asset acquisitions, and divestitures in our condensed consolidated financial statements included in this Quarterly Report.
Income Tax Expense (Benefit)
−Removed: Income tax benefit for the six months ended June 30, 2024 was $3 million, which was consistent with the income tax benefit of $3 million for the six months ended June 30, 2023.
−Removed: The tax benefit in 2024 was principally created by tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and withholding taxes paid in various jurisdictions.
−Removed: The tax benefit in 2023 was principally created by tax-effect of pre-tax earnings and losses in various jurisdictions, tax adjustments related to REIT activity, and changes to uncertain tax positions.
+Added: Income tax benefit for the nine months ended September 30, 2024 was $48 million, which represented an increase of $40 million from the income tax benefit of $8 million for the nine months ended September 30, 2023.
+Added: The tax benefit in 2024 was principally created by the release of a $24 million valuation allowance on deferred tax assets relating to net operating losses carryforwards in the U.S.
+Added: which are now expected to be utilized, the tax-effect of pre-tax earnings in various jurisdictions, tax adjustments related to REIT activity, and withholding taxes paid in various jurisdictions.
+Added: The tax benefit in 2023 was principally created by the tax-effect of pre-tax earnings and losses in various jurisdictions, tax adjustments related to REIT activity, and changes to uncertain tax positions.
Our income taxes are discussed in more detail in Note 8, Income taxes to the condensed consolidated financial statements included in this Quarterly Report.
1 unchanged sentence
We use the following non-GAAP financial measures as supplemental performance measures of our business:
−Removed: NOI, segment NOI, FFO, Core FFO, Adjusted FFO, EBITDA, EBITDAre, and Adjusted EBITDA.
−Removed: We calculate NOI as our total revenues less our cost of operations (excluding any depreciation and amortization, impairment charges, general and administrative expense, acquisition, transaction, and other expense, and restructuring and impairment
−Removed: We calculate segment NOI as a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges, general and administrative expense, acquisition, transaction, and other expense, and restructuring and impairment expense).
+Added: segment NOI, FFO, Core FFO, Adjusted FFO, EBITDA, EBITDAre, and Adjusted EBITDA.
+Added: We also use same warehouse and non-same warehouse metrics described above.
+Added: We calculate total segment NOI (or “NOI”) as our total revenues less our cost of operations (excluding any depreciation and amortization, general and administrative expense, stock-based compensation expense, restructuring and impairment expense, gain and loss on sale of assets, and acquisition, transaction, and other expense.
We use segment NOI to evaluate our segments for purposes of making operating decisions and assessing performance in accordance with ASC 280, Segment Reporting .
−Removed: We believe NOI and segment NOI are helpful to investors as a supplemental performance measure to net income because they assist both investors and management in understanding the core operations of our business.
−Removed: There is no industry definition of NOI or segment NOI and, as a result, other REITs may calculate NOI or segment NOI, or other similarly-captioned metrics, in a manner different than we do.
−Removed: The table below reconciles NOI to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
−Removed: 2024 2023 2024 2023
−Removed: (in millions)
+Added: We believe segment NOI is helpful to investors as a supplemental performance measure to net income because it assists both investors and management in understanding the core operations of our business.
+Added: There is no industry definition of segment NOI and, as a result, other REITs may calculate segment NOI or other similarly-captioned metrics in a manner different than we do.
+Added: The table below reconciles total segment NOI to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2024 2023 2024 2023
Net income (loss) $ (543) $ (50) $ (671) $ (39)
+Added: Stock-based compensation expense in cost of operations 1 — 1 —
General and administrative expense 143 122 394 361
7 unchanged sentences
(Gain) loss on extinguishment of debt 6 — 13 —
+Added: Other nonoperating (income) expense, net (1) 19 (1) 19
Income tax expense (benefit) (45) (5) (48) (8)
+Added: Total segment NOI
$ 439 $ 430 $ 1,330 $ 1,314
−Removed: We calculate EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defined as earnings before interest income or expense, taxes, depreciation and amortization, net loss or gain on sale of real estate, net of withholding taxes, impairment write-downs on real estate property, and adjustment to reflect share of EBITDAre of partially owned entities.
+Added: We calculate EBITDA for Real Estate, or EBITDAre, in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defined as earnings before interest income or expense,
+Added: taxes, depreciation and amortization, net loss or gain on sale of real estate, net of withholding taxes, impairment write-downs on real estate property, and adjustments to reflect our share of EBITDAre of partially owned entities.
EBITDAre is a measure commonly used in our industry, and we present EBITDAre to enhance investor understanding of our operating performance.
11 unchanged sentences
We use EBITDA, EBITDAre, and Adjusted EBITDA as measures of our operating performance and not as measures of liquidity.
−Removed: The table below reconciles EBITDA, EBITDAre, and Adjusted EBITDA to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The table below reconciles EBITDA, EBITDAre, and Adjusted EBITDA to net income (loss), which is the most directly
+Added: comparable financial measure calculated in accordance with GAAP, in each case for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2024 2023 2024 2023
7 unchanged sentences
(45) (5) (48) (8)
+Added: $ (296) $ 259 $ 290 $ 867
Net loss (gain) on sale of real estate assets
5 unchanged sentences
— (1) (2) (3)
+Added: Other nonoperating (income) expense, net
+Added: (1) 19 (1) 19
Acquisition, restructuring, and other
+Added: 470 20 496 50
Technology transformation
−Removed: Loss from property destruction 1 — 1 —
+Added: (Gain) loss on property destruction (5) — (4) —
Interest expense and tax expense from unconsolidated JVs
4 unchanged sentences
Allocation adjustments of noncontrolling interests
+Added: (1) (1) — (1)
Adjusted EBITDA
4 unchanged sentences
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.
−Removed: 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, gain or loss on the destruction of property (net of insurance proceeds), finance lease ROU asset amortization -real estate, non-real estate impairments, acquisition, restructuring and other, other income or expense, loss on debt extinguishment and modifications and the effects of gain or loss on foreign currency exchange.
+Added: 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, gain or loss on the destruction of property (net of insurance proceeds), finance lease ROU asset amortization real estate, non-real estate impairments, acquisition, restructuring and other, other nonoperating income or expense, loss on debt extinguishment and modifications and the effects of gain or loss on foreign currency exchange.
We also adjust for the impact attributable to non-real estate impairments on unconsolidated joint ventures and natural disaster.
1 unchanged sentence
We believe Core FFO can facilitate comparisons of operating performance between periods, while also providing a more meaningful predictor of future earnings potential.
−Removed: However, because FFO and Core FFO add back real estate depreciation and amortization and do not capture the level of maintenance capital expenditures necessary to maintain the operating performance of our properties, both of which have material economic impacts on our results from operations, we believe the utility of FFO and Core FFO as a measure of our performance may be limited.
−Removed: We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred financing costs, amortization of debt discount/premium amortization of above or below market leases, straight-line net operating rent, provision or benefit from deferred income taxes, stock-based compensation expense from grants under our equity incentive plans, non-real estate depreciation and amortization, non-real estate finance lease ROU asset amortization, and maintenance capital expenditures.
+Added: 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.
+Added: We calculate adjusted funds from operations, or Adjusted FFO, as Core FFO adjusted for the effects of amortization of deferred financing costs, amortization of debt discount/premium amortization of above or below market leases, straight-line net operating rent, provision or benefit from deferred income taxes, stock-based compensation expense from grants under our equity incentive plans, non-real estate depreciation and amortization, non-real estate finance lease ROU asset amortization, and recurring maintenance capital expenditures.
We also adjust for Adjusted FFO attributable to our share of reconciling items of partially owned entities.
7 unchanged sentences
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.
−Removed: The table below reconciles FFO, Core FFO, and Adjusted FFO to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The table below reconciles FFO, Core FFO, and Adjusted FFO to net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, in each case for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2024 2023 2024 2023
12 unchanged sentences
Finance lease ROU asset amortization - real estate related
+Added: Other nonoperating (income) expense, net
+Added: (1) 19 (1) 19
Acquisition, restructuring, and other
+Added: 473 19 500 50
Technology transformation
−Removed: Loss on property destruction 1 — 1 —
+Added: (Gain) loss on property destruction (5) — (4) —
(Gain) loss on foreign currency transactions, net
11 unchanged sentences
Amortization of below market leases
−Removed: (1) — (1) (1)
Stock-based compensation expense
4 unchanged sentences
(2) — (1) (1)
+Added: $ 208 $ 137 $ 492 $ 476
Liquidity and Capital Resources
−Removed: As of June 30, 2024, we had $73 million of cash and cash equivalents and $1.0 billion available under our Revolving Credit Facility (net of outstanding standby letters of credit in the amount of $67 million, which reduce availability).
+Added: As of September 30, 2024, we had $409 million of cash and cash equivalents and $1.7 billion available under our Revolving Credit Facility (net of outstanding standby letters of credit in the amount of $66 million, which reduce availability).
We currently expect that our principal sources of funding will include:
11 unchanged sentences
On July 26, 2024, we closed our IPO of 56,882,051 shares of our common stock at a price of $78.00 per share, with a subsequent exercise in full by the underwriters of their option to purchase from us an additional 8,532,307 shares of common stock that closed on July 31, 2024.
−Removed: The net proceeds to us from the IPO were approximately $4,875 million.
−Removed: As of June 30, 2024, we expect that our funding sources as noted above will be adequate to meet our short-term liquidity requirements and capital commitments for the next 12 months.
+Added: The net proceeds to us from the IPO were $4,873 million.
+Added: As of September 30, 2024, we expect that our funding sources as noted above will be adequate to meet our short-term liquidity requirements and capital commitments for the next 12 months.
On February 15, 2024, we closed on our $2,400 million Delayed Draw Term Loan, the proceeds from which we used to repay our CMBS 4 loan on April 9, 2024, prior to maturity.
−Removed: Subsequently to June 30, 2024, we used a portion of the net proceeds from our IPO to repay the Delayed Draw Term Loan, our CMBS 5 loan, and a portion of our outstanding borrowings under the Revolving Credit Facility, investing the remaining cash into money market funds.
−Removed: For more information regarding these debt facilities refer to Note 9, Debt and Note 20, Subsequent events in the condensed consolidated financial statements included in this Quarterly Report.
+Added: During the three months ended September 30, 2024, we used a portion of the net proceeds from our IPO to repay the Delayed Draw Term Loan, our CMBS 5 loan, and a portion of our outstanding borrowings under the Revolving Credit Facility, investing the remaining cash into money market funds.
+Added: For more information regarding these debt facilities refer to Note 9, Debt in the condensed consolidated financial statements included in this Quarterly Report.
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 stockholder distributions, and our future development and acquisition activities.
8 unchanged sentences
In addition, we may be required to use borrowings under our Revolving Credit Facility, if necessary, to meet REIT distribution requirements and maintain our REIT status.
+Added: During the three months ended September 30, 2024, the board of directors of the Company declared a prorated quarterly cash dividend of $0.38 per share of common stock.
+Added: The dividend was payable to shareholders of record as of September 30, 2024 and was paid on October 21, 2024.
+Added: The dividend is prorated for the period commencing on July 26, 2024, the date the Company’s initial public offering was consummated, and ending on September 30, 2024, representing an annualized dividend rate of $2.11 per share.
Outstanding Indebtedness
−Removed: The following table summarizes our outstanding indebtedness as of June 30, 2024 (in millions):
−Removed: As of June 30,
−Removed: Variable rate—unhedged (includes ICE 5—6% interest rate cap not triggered)
+Added: The following table summarizes our outstanding indebtedness as of September 30, 2024 (in millions):
+Added: As of September 30,
+Added: Variable rate—unhedged
Variable rate—hedged
2 unchanged sentences
Variable rate—hedged
−Removed: The variable rate debt shown above bears interest at interest rates based on various one-month rates of which SOFR, EURIBOR, and CDOR are the most significant, depending on the respective agreement governing the debt, including our Revolving Credit Facility and Term Loan A.
−Removed: As of June 30, 2024, our debt had a weighted average term to maturity of approximately 3 years, assuming exercise of extension options.
−Removed: For further information regarding outstanding indebtedness, please see Note 9, Debt and Note 20, Subsequent events in the condensed consolidated financial statements included in this Quarterly Report.
+Added: The variable rate debt shown above bears interest at interest rates based on various one-month rates of which SOFR, BBSW, and CDOR are the most significant, depending on the respective agreement governing the debt, including our Revolving Credit Facility and Term Loan A.
+Added: As of September 30, 2024, our debt had a weighted average term to maturity of approximately 4 years, assuming exercise of extension options.
+Added: For further information regarding outstanding indebtedness, please see Note 9, Debt in the condensed consolidated financial statements included in this Quarterly Report.
Senior Unsecured Notes
2 unchanged sentences
Maturity Date
−Removed: 2024 December 31,
+Added: September 30,
Series A Senior Notes
18 unchanged sentences
__________________
−Removed: __________________
(1) Interest on our Senior Unsecured Notes is payable semi-annually in arrears.
−Removed: The Senior Unsecured Notes are the joint and several obligations of Lineage Logistics Holdings, LLC, Lineage Logistics, LLC, certain U.S.
+Added: The Senior Unsecured Notes are the joint and several obligations of Lineage Inc., Lineage OP, LP, Lineage Logistics Holdings, LLC, Lineage Logistics, LLC, certain U.S.
subsidiaries that guarantee or otherwise becomes liable, as a borrower or a co-borrower or otherwise, under any of our material debt facilities and, in the case of Senior Unsecured Notes denominated in currencies other than the U.S.
2 unchanged sentences
subsidiaries that guarantee or otherwise becomes liable, as a borrower or a co-borrower or otherwise, under any of our material debt facilities.
−Removed: The Senior Unsecured Notes rank pari passu with our other
−Removed: senior unsecured indebtedness, including the Revolving Credit Facility and Term Loan A, and are subordinated to any of the obligors’ existing and future secured debt, including indebtedness incurred under the CMBS loans.
+Added: The Senior Unsecured Notes rank pari passu with our other senior unsecured indebtedness, including the Revolving Credit Facility and Term Loan A, and are subordinated to any of the obligors’ existing and future secured debt.
We may prepay the Senior Unsecured Notes in full or in part, at any time, subject to notice requirements and minimum principal amount requirements, at 100% of the principal amount so prepaid, and the make-whole amount determined for the prepayment date with respect to such principal amount, and accrued interest to the date of prepayment.
4 unchanged sentences
The note purchase agreements also require us to maintain a total leverage ratio, unsecured leverage ratio, secured leverage ratio, and fixed charge coverage ratio each quarter at the same levels as those set forth in the Revolving Credit and Term Loan Agreement.
−Removed: As of June 30, 2024, we were in compliance with our covenants under the note purchase agreements.
+Added: As of September 30, 2024, we were in compliance with our covenants under the note purchase agreements.
The note purchase agreements governing the Senior Unsecured Notes also contain customary events of default, including defaults in the payment of principal, interest or fees, defaults in compliance with the covenants set forth in the note purchase agreements, cross-defaults to certain other indebtedness, and bankruptcy and other insolvency defaults.
2 unchanged sentences
Such liens typically 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 available to us for re-sale.
−Removed: Our credit loss expense relating to customer receivables was $2 million and $2 million for the six months ended June 30, 2024 and 2023, respectively.
−Removed: As of June 30, 2024 and December 31, 2023, we maintained allowances for uncollectible balances of $7 million and $7 million, respectively, which we believed to be adequate.
+Added: Our credit loss expense relating to customer receivables was $3 million and $4 million for the nine months ended September 30, 2024 and 2023, respectively.
+Added: As of September 30, 2024 and December 31, 2023, we maintained allowances for uncollectible balances of $8 million and $7 million, respectively, which we believed to be adequate.
Maintenance Capital Expenditures and Repair and Maintenance Expenses
7 unchanged sentences
These expenditures also include information technology maintenance to existing servers, equipment, and software.
−Removed: The following table sets forth our recurring maintenance capital expenditures for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The following table sets forth our recurring maintenance capital expenditures for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
11 unchanged sentences
Project related expenses are excluded.
−Removed: The following table sets forth our repair and maintenance expenses for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The following table sets forth our repair and maintenance expenses for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
9 unchanged sentences
These are typically acquisition-related costs, including maintenance on acquired assets that are beyond their useful life at the time of acquisition, rebranding expenditures, and information technology expenditures to standardize system usage across our business, and also include certain non-acquisition related costs, including safety and compliance projects to comply with any applicable policies, laws, or codes, such as installation of site security or a new fire suppression system, as well as freon to ammonia conversions.
−Removed: The following table sets forth our integration capital expenditures for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The following table sets forth our integration capital expenditures for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
18 unchanged sentences
Common examples include installing new LED technology, installing solar panels at a warehouse, and electrification of transportation fleet.
−Removed: Economic return projects require an investment of capital for a future cash flow and/or NOI benefit that is not an acquisition, greenfield, expansion, or energy project.
+Added: Economic return projects require an investment of capital for a future cash flow and/or segment NOI benefit that is not an acquisition, greenfield, expansion, or energy project.
Examples include addition of blast cells, racking replacement, re-rack for additional pallet positions, replacing freezer doors, purchasing compressors, buying out leased equipment, and purchasing new rail cars.
3 unchanged sentences
and (c) sales management, pricing and billing – creating and integrating IT systems to streamline sales processes, optimize pricing, and enhance billing accuracy and efficiency.
−Removed: The following table sets forth our external growth capital investments for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The following table sets forth our external growth capital investments for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
8 unchanged sentences
$ 153 $ 108 $ 431 $ 391
−Removed: We completed one acquisition in each of the three months ended June 30, 2024 and 2023, and two acquisitions in each of the six months ended June 30, 2024 and 2023.
−Removed: Refer to Note 4, Business combinations and asset acquisitions of the condensed consolidated financial statements included in this Quarterly Report for more information regarding business combinations and asset acquisitions.
−Removed: The greenfield and expansion expenditures of $95 million and $131 million during the three months and six months ended June 30, 2024 relate primarily to projects that remain under construction as of June 30, 2024.
−Removed: The greenfield and expansion expenditures of $70 million and $164 during the three months and six months ended June 30, 2023 related primarily to projects that were completed in 2023 or are expected to be completed in 2024.
−Removed: Energy and economic return initiatives include $25 million and $28 million of corporate initiatives and smaller customer driven growth projects incurred during the three months ended June 30, 2024 and 2023, respectively.
−Removed: Energy and economic return initiatives include $47 million and $68 million of corporate initiatives and smaller customer-driven growth projects incurred during the six months ended June 30, 2024 and 2023, respectively.
−Removed: In implementing and developing new IT systems globally, we invested $15 million and $18 million during the three months ended June 30, 2024 and 2023, respectively and $27 million and $35 million during the six months ended June 30, 2024 and 2023, respectively.
+Added: We completed one acquisition in each of the three months ended September 30, 2024 and 2023, respectively, and three acquisitions in each of the nine months ended September 30, 2024 and 2023, respectively.
+Added: Refer to Note 4, Business combinations, asset acquisitions, and divestitures of the condensed consolidated financial statements included in this Quarterly Report for more information regarding current period business combinations and asset acquisitions.
+Added: The greenfield and expansion expenditures of $66 million and $197 million during the three months and nine months ended September 30, 2024, respectively, relate primarily to projects that remain under construction as of September 30, 2024.
+Added: The greenfield and expansion expenditures of $56 million and $220 during the three months and nine months ended September 30, 2023, respectively, related primarily to projects that were completed in 2023 or are expected to be completed in 2024.
+Added: Energy and economic return initiatives include $24 million and $23 million of corporate initiatives and smaller customer driven growth projects incurred during the three months ended September 30, 2024 and 2023, respectively.
+Added: Energy and economic return initiatives include $71 million and $91 million of corporate initiatives and smaller customer-driven growth projects incurred during the nine months ended September 30, 2024 and 2023, respectively.
+Added: In implementing and developing new IT systems globally, we invested $23 million and $21 million during the three months ended September 30, 2024 and 2023, respectively, and $50 million and $56 million during the nine months ended September 30, 2024 and 2023, respectively.
Historical Cash Flows
The following summary discussion of our cash flows is based on the condensed 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.
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
(in millions)
1 unchanged sentence
Net cash used in investing activities $ (536) $ (645)
−Removed: $ (398) $ (454)
−Removed: Net cash provided by financing activities
+Added: Net cash provided by (used in) financing activities $ 428 $ (10)
Operating Activities
−Removed: For the six months ended June 30, 2024, our net cash provided by operating activities was $260 million, compared to $336 million for the six months ended June 30, 2023.
−Removed: The decrease was primarily due to a reduction in net income (loss) adjusted for non-cash items and unfavorable changes in working capital, most significantly in accounts payable and accrued liabilities and deferred revenue and accounts receivable.
+Added: For the nine months ended September 30, 2024, our net cash provided by operating activities was $446 million, compared to $565 million for the nine months ended September 30, 2023.
+Added: The decrease was primarily due to a reduction in net income (loss) adjusted for non-cash items and unfavorable changes in working capital, most significantly in accounts payable, accrued liabilities, deferred revenue, and accounts receivable.
Investing Activities
−Removed: For the six months ended June 30, 2024, cash used for investing activities was $398 million.
−Removed: This was driven by $333 million in additions to property, plant, and equipment, primarily for growth capital expenditures.
−Removed: In addition, we invested $73 million in the acquisitions of Entrepôt du Nord Inc and Eurofrigor.
−Removed: For the six months ended June 30, 2023, cash used for investing activities was $454 million.
−Removed: This was driven by $428 million in additions to property, plant, and equipment, primarily for growth capital expenditures.
−Removed: In addition, we invested $21 million in our investment in Emergent Cold LatAm Holdings, LLC and $13 million in an acquisition in Christchurch, New Zealand.
−Removed: Refer to Note 4, Business combinations and asset acquisitions in the condensed consolidated financial statements included in this Quarterly Report for more information regarding business combinations and asset acquisitions.
+Added: For the nine months ended September 30, 2024, cash used in investing activities was $536 million.
+Added: This was driven by $486 million in purchases of property, plant, and equipment, primarily for growth capital expenditures.
+Added: In addition, we invested $113 million in the acquisitions of Entrepôt du Nord Inc, Luik Natie, and Eurofrigor.
+Added: This was partially offset by $50 million of insurance proceeds related to a fire which occurred at the Company’s warehouse in Kennewick, Washington (see Note 17, Commitments and contingencies in our condensed consolidated financial statements included in this Quarterly Report for details).
+Added: For the nine months ended September 30, 2023, cash used in investing activities was $645 million.
+Added: This was driven by $605 million in purchases of property, plant, and equipment, primarily for growth capital expenditures, partially offset by $13 in proceeds from the sale of assets.
+Added: In addition, we invested $29 million in our investment in Emergent Cold LatAm Holdings, LLC and $24 million in acquisitions, net of cash acquired.
+Added: Refer to Note 4, Business combinations, asset acquisitions, and divestitures in the condensed consolidated financial statements included in this Quarterly Report for more information regarding current period business combinations and asset acquisitions.
Financing Activities
−Removed: Our net cash provided by financing activities was $144 million for the six months ended June 30, 2024.
−Removed: Cash provided by financing activities during 2024 was primarily driven by $1,231 million of net borrowings on revolving credit lines, partially offset by net outflows of $860 million for net repayments of long-term debt and finance leases, $123 million for distributions, $44 million for financing fees, $25 million for redemption of common stock, and $16 million for payment of deferred consideration liabilities.
−Removed: Our net cash provided by financing activities was $54 million for the six months ended June 30, 2023.
−Removed: Cash provided by financing activities during 2023 was primarily driven by $145 million of capital contributions and $37 million of net borrowings on revolving credit lines.
−Removed: This was partially offset by outflows of $48 million for repayments of long-term debt and finance leases, $33 million for payment of deferred and contingent consideration liabilities, $23 million for distributions, $10 million for redemption of units issued as stock compensation, $8 million for equity raise costs, and $3 million for redemption of common stock.
+Added: Our net cash provided by financing activities was $428 million for the nine months ended September 30, 2024.
+Added: Cash provided by financing activities during 2024 was primarily driven by $4,879 million of proceeds from the issuance of common stock in our IPO (net of equity raise costs) and $540 million of net borrowings on revolving credit lines, partially offset by outflows of $4,606 million for net repayments of long-term debt and finance leases, $138 million for distributions, $75 million for redemption of OPEUs, $46 million for payment of deferred consideration liabilities, $45 million for financing fees, $46 million for the repurchase of common shares for employee income taxes on stock-based compensation, and $25 million for redemption of common stock.
+Added: For further detail on transactions associated with our IPO, refer to Note 2, Capital structure and noncontrolling interests in the condensed consolidated financial statements included in this Quarterly Report.
+Added: Our net cash used in financing activities was $10 million for the nine months ended September 30, 2023.
+Added: Cash used in financing activities during 2023 consisted primarily of $72 million for repayments of long-term debt and finance leases, $33 million for payment of deferred and contingent consideration liabilities, and $35 million for distributions.
+Added: The outflows were partially offset by $142 million of capital contributions (net of equity raise costs) and $12 million of net borrowings on revolving credit lines.
Off-Balance Sheet Arrangements
−Removed: As of June 30, 2024 and December 31, 2023, 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.
+Added: As of September 30, 2024 and December 31, 2023, we had no material off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Critical Accounting Policies and Estimates
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.