Press Release, dated July 26, 2012, and supplemental information

EX-99.1 2 d385314dex991.htm PRESS RELEASE, DATED JULY 26, 2012, AND SUPPLEMENTAL INFORMATION Press Release, dated July 26, 2012, and supplemental information

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Earnings Release and Supplemental Information

Unaudited

Second Quarter 2012

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Table of Contents

Second Quarter 2012 Report

Overview

Press Release 1

Highlights

Company Profile 4

Financial Information

Consolidated Balance Sheets 6

Consolidated Statements of Operations 7

Reconciliation of Net Earnings (Loss) to FFO 8

EBITDA Reconciliation 9

Operations Overview

Operating Portfolio 10

Operating Metrics 13

Customer Information 14

Capital Deployment

Building Dispositions and Contributions 15

Building Acquisitions 16

Development Starts 17

Development Portfolio 19

Land Portfolio 20

Private Capital

Detail Fund Information 22

Fund Operating and Balance Sheet Information 23

Capitalization

Debt and Equity Summary 24

Debt Covenants and Other Metrics 25

Assets Under Management 26

Net Asset Value

Components 27

Notes and Definitions 29

Port Reading, New Jersey, United States

Prologis Park Narashino, Chiba, Japan

Prologis Park Chanteloup, Cramayel, France

2012 Prologis

Prologis, Inc. Announces Second Quarter 2012 Earnings Results

Core FFO of $0.43 per fully diluted share -

35 million square feet of leasing in its combined operating and development portfolios -

Company increases low end of full year guidance -

SAN FRANCISCO, July 26, 2012 – Prologis, Inc. (NYSE: PLD), the leading

global owner, operator and developer of industrial real estate, today reported

results for the second quarter of 2012.

Core funds from operations (Core FFO) per fully diluted share was $0.43 for

the second quarter 2012 compared to $0.35 for the same period in 2011.

Funds from operations (FFO) as defined by Prologis per fully diluted share was

$0.37 for the second quarter 2012 compared to $0.03 for the same period in

2011. The difference between Core FFO and FFO in the second quarter 2012

primarily relates to merger integration expenses. Net loss per share was

$(0.02) for the second quarter 2012 compared to a net loss of $(0.49) for the

same period in 2011. The second quarter 2011 comparative results reflect two

months of stand-alone legacy ProLogis and approximately one month of

results for the combined company. Therefore, they are not directly comparable

to the 2012 reported results.

“We delivered solid results for the second quarter despite forecasts of slower

economic growth," said Hamid R. Moghadam, chairman and co-chief executive

officer, Prologis. “We continue to make excellent progress on our priorities,

increasing occupancy in our operating and development portfolios. We also

received unitholder and regulatory approval to liquidate Prologis European

Properties. While we will continue to exercise a patient and deliberate

approach to achieving our strategic goals by the end of 2013, Prologis is well

positioned to remain opportunistic, flexible and laser-focused on taking

advantage of growth opportunities around the world.”

Operating Portfolio Metrics

During the quarter, the company leased a total of 35.0 million square feet (3.3

million square meters) in its combined operating and development portfolios.

Prologis ended the quarter above plan with 92.4 percent occupancy in its

operating portfolio, up 10 basis points over the prior quarter. Tenant retention

in the quarter was 82.4 percent, with renewals totaling 20.2 million square feet

(1.9 million square meters).

Same-store net operating income (NOI) in the second quarter of 2012

increased 0.4 percent over the second quarter 2011 on a GAAP basis,

compared to an increase of 1.7 percent in the first quarter of 2012. Rental

rates on leases signed in the second quarter same-store pool decreased by

3.9 percent from in-place rents, as compared to a decrease of 1.1 percent in

the first quarter 2012.

“Building on the momentum from last quarter, the team delivered another

strong quarter of leasing volume across our global portfolio, and we completed

the majority of our lease expirations for the balance of the year,” said Walter C.

Rakowich, co-chief executive officer, Prologis. “While the strongest demand

continues to be for large, Class-A facilities, we saw a notable improvement in

our facilities that are less than 100,000 square feet, and occupancy in Europe

continues to hold. Customers have new requirements for e-commerce facilities

and remain focused on improving supply chain efficiencies. Given continued

supply constraints, our customers with targeted requirements are increasingly

pursuing build-to-suits, which we are able to readily accommodate with our

strategic land portfolio.”

Dispositions and Contributions

During the quarter, the company completed approximately $228 million in

building and land dispositions and contributions, of which $191 million was

Prologis’ share. The building sales and contributions reflect a weighted

average stabilized capitalization rate of 7.6 percent.

Development Starts & Building Acquisitions

Capital deployed or committed during the second quarter 2012 totaled

approximately $313 million, of which $277 million was Prologis’ share,

including:

Development starts of $229 million totaling 3.7 million square feet

(343,740 square meters) in nine projects, which monetized $52 million of

land. Of the total expected investment, 70 percent was in build-to-suit

projects. The estimated value creation on development starts in the

second quarter is $33 million with a stabilized yield of 7.2 percent and a

margin of approximately 14 percent.

Building acquisitions of $85 million in 13 logistics facilities totaling

approximately 1.5 million square feet (139,350 square meters) with a

stabilized capitalization rate of 7.2 percent. Of the total acquisitions, $48

million was Prologis’ share.

At quarter end, Prologis’ global development portfolio comprised 13.5 million

square feet (1.3 million square meters), with a total expected investment of

$1.3 billion of which Prologis’ share is $1 billion. The estimated value creation

at stabilization is expected to be $228 million with a stabilized yield of 7.8

percent and a margin of approximately 18 percent.

2012 Prologis

Private Capital Activity

During the quarter, Prologis raised $163 million in new third-party equity for

the Prologis Targeted U.S. Logistics Fund and the Prologis Targeted Europe

Logistics Fund. In addition, ProLogis European Properties’ (PEPR) unitholders

approved the liquidation of the fund during its annual meeting held on June 27,

2012. Prologis currently owns 99.5 percent of the ordinary units and 98.6

percent of the preferred units of PEPR.

“We had a strong quarter of capital raising for our open-end funds from a

diverse mix of new and existing investors,” said Guy F. Jaquier, chief executive

officer, Prologis Private Capital. “This level of activity is demonstrative of the

continued demand for high-quality industrial real estate around the globe. In

Japan, we continue to move forward with our development fund and to

evaluate the optimal structure for our operating assets. In Europe we are

pleased to be winding up PEPR ahead of schedule and recapitalizing

PEPR’s high-quality assets over the next several quarters.”

Capital Markets

Prologis completed $1.2 billion of debt financings, re-financings and pay-

downs, with approximately $989 million related to the REIT and $176 million

on behalf of our property funds during the quarter.

Significant financing activity during the second quarter included the following:

Repayment of $449 million of its 2.25 percent convertible notes and $59

million of senior unsecured notes at maturity in the second quarter, as

previously announced;

Financings of three TMK bonds of 25.4 billion yen (USD 332 million) with a

weighted average term of 6.6 years and weighted average rate of 1.21

percent; and

Subsequent to quarter end, Prologis closed two transactions for Prologis

European Properties Fund II, a 40 million pounds sterling (USD 63 million)

secured facility and a 145 million euro (USD 184 million) senior unsecured

term loan.

“We continue to have access to capital markets at attractive rates globally,

demonstrating the quality of our assets and strength of our global platform,”

said Thomas S. Olinger, chief financial officer, Prologis. “Excluding the

impact of fund rationalization activity, we have reduced our share of debt

by $2.3 billion since the merger.”

Guidance for 2012

Prologis increased the low end of its full-year 2012 Core FFO guidance range

to $1.64 to $1.70 per diluted share, up from $1.60 to $1.70 per diluted share.

The company also expects to recognize net earnings, for GAAP purposes, of

$0.22 to $0.28 per share. The difference between the company’s Core FFO

and net earnings guidance for 2012 predominantly relates to real estate

depreciation, recognized gains on real estate transactions and merger-related

expenses.

The Core FFO and earnings guidance reflected above excludes any potential

future gains (losses) recognized from real estate transactions. In reconciling

from net earnings to Core FFO, Prologis makes certain adjustments, including

but not limited to real estate depreciation and amortization expense,

impairment charges, deferred taxes, and unrealized gains or losses on foreign

currency or derivative activity, as well as transaction and merger costs.

Webcast and Conference Call Information

The company will host a webcast /conference call to discuss quarterly results,

current market conditions and future outlook today, July 26, 2012, at 12:00 p.m.

U.S. Eastern Time. Interested parties are encouraged to access the live

webcast by clicking the microphone icon located near the top of the opening

Interested parties also can participate via conference call by dialing 877-256-

7020 from the United States and Canada or (+1) 973-409-9692 internationally

with reservation code 93137132.

A telephonic replay will be available from July 27, 2012, through August 27,

2012, at 855-859-2056 (from the United States and Canada) or (+1) 404-537-

3406 (from all other countries), with the reservation code 93137132. The

webcast and podcast replay will be posted when available in the "Financial

Information" section of the Prologis Investor Relations website.

About Prologis

Prologis, Inc., is the leading owner, operator and developer of industrial real

estate, focused on global and regional markets across the Americas, Europe

and Asia. As of June 30, 2012, Prologis owned or had investments in, on a

consolidated basis or through unconsolidated joint ventures, properties and

page

the

Prologis

Investor

Relations

website

(http://ir.prologis.com).

2012 Prologis

development projects expected to total approximately 569 million square feet

(52.9 million square meters) in 21 countries. The company leases modern

distribution facilities to more than 4,500 customers, including manufacturers,

retailers, transportation companies, third-party logistics providers and other

enterprises.

The statements in this release that are not historical facts are forward-looking statements

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section

21E of the Securities Exchange Act of 1934, as amended. These forward-looking

statements are based on current expectations, estimates and projections about the industry

and markets in which Prologis operates, management’s beliefs and assumptions made by

management. Such statements involve uncertainties that could significantly impact

Prologis’ financial results. Words such as “expects,” “anticipates,” “intends,” “plans,”

“believes,” “seeks,” “estimates,” variations of such words and similar expressions are

intended to identify such forward-looking statements, which generally are not historical in

nature. All statements that address operating performance, events or developments that

we expect or anticipate will occur in the future — including statements relating to rent and

occupancy growth, development activity and changes in sales or contribution volume of

developed properties, disposition activity, general conditions in the geographic areas where

we operate, synergies to be realized from our recent merger transaction, our debt and

financial position, our ability to form new property funds and the availability of capital in

existing or new property funds — are forward-looking statements. These statements are

not guarantees of future performance and involve certain risks, uncertainties and

assumptions that are difficult to predict. Although we believe the expectations reflected in

any forward-looking statements are based on reasonable assumptions, we can give no

assurance that our expectations will be attained and therefore, actual outcomes and results

may differ materially from what is expressed or forecasted in such forward-looking

statements. Some of the factors that may affect outcomes and results include, but are not

limited to: (i) national, international, regional and local economic climates, (ii) changes in

financial markets, interest rates and foreign currency exchange rates, (iii) increased or

unanticipated competition for our properties, (iv) risks associated with acquisitions,

dispositions and development of properties, (v) maintenance of real estate investment

trust (“REIT”) status and tax structuring, (vi) availability of financing and capital, the

levels of debt that we maintain and our credit ratings, (vii) risks related to our investments

in our co-investment ventures and funds, including our ability to establish new co-

investment ventures and funds, (viii) risks of doing business internationally, including

currency risks, (ix) environmental uncertainties, including risks of natural disasters, and (x)

those additional factors discussed in reports filed with the Securities and Exchange

Commission by Prologis under the heading “Risk Factors.” Prologis undertakes no duty to

update any forward-looking statements appearing in this release.

Prologis Contacts

Tracy A. Ward

James Larkin

SVP, IR & Corporate Communications

VP, Corporate Communications

Direct: +1 415 733 9565

Direct: +1 415 733 9411

Email: tward@prologis.com

Email: jlarkin@prologis.com

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Highlights

Company Profile

Second Quarter 2012 Report

Prologis, Inc. is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of June 30, 2012, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects totaling approximately 569 million square feet (52.9 million square meters) in 21 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.

AMERICAS (4 countries) EUROPE (14 countries) ASIA (3 countries) TOTAL

Number of operating portfolio buildings 2,410 595 77 3,082

Operating Portfolio (msf) 370 140 27 537

Development Portfolio (msf) 6 2 5 13

Other (msf) (A) 17 1 1 19

Total (msf) 393 143 33 569

Development portfolio TEI (millions) $407 $153 $693 $ 1,253

Land (acres) 7,088 3,673 141 10,902

Land gross book value (millions) (B) $1,078 $736 $161 $ 1,975

(A) Generally represents properties managed by Prologis on behalf of other third parties (7 msf), properties in which Prologis has an ownership interest but doesn’t manage (10 msf) and other properties owned by Prologis (2 msf).

(B) Original cost basis for the total land portfolio is $3.1 billion.

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Highlights

Company Profile

Second Quarter 2012 Report

Three months ended June 30, Six months ended June 30,

(dollars in thousands, except per share data) 2012 2011 (A) 2012 2011 (A)

Revenues $ 520,748 $ 320,912 $ 1,018,712 $ 549,706

Net earnings (loss) available for common stockholders (8,120) (151,471) 194,293 (198,087)

FFO, as defined by Prologis 172,671 8,195 434,743 70,341

Core FFO 201,320 109,662 386,085 184,069

AFFO 148,569 85,369 282,392 136,499

Core EBITDA 395,147 267,311 782,569 478,331

Per common share-diluted:

Net earnings (loss) available for common stockholders $ (0.02) $ (0.49) $ 0.42 $ (0.70)

FFO, as defined by Prologis 0.37 0.03 0.93 0.25

Core FFO 0.43 0.35 0.83 0.65

Funds from Operations (in millions)

$300

$250

$200

$150

$100

$50

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Operating Portfolio-Owned and Managed

Period Ending Occupancy %

100%

95%

92.2% 92.3% 92.4%

91.0%

90%

85%

80%

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Core FFO FFO, as defined by Prologis

(A) AMB and Prologis completed a merger (the “Merger”) in June 2011. The financial results presented throughout this supplemental include Prologis for the full period and AMB results from the date of the Merger going forward. See the Notes and Definitions for more information.

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Financial Information

Consolidated Balance Sheets

Second Quarter 2012 Report

(in thousands)

June 30, 2012 March 31, 2012 December 31, 2011

Assets:

Investments in real estate assets:

Operating properties $ 23,442,394 $ 23,438,703 $ 21,552,548

Development portfolio 656,561 787,029 860,531

Land 1,881,062 1,933,321 1,984,233

Other real estate investments 442,280 419,432 390,225

26,422,297 26,578,485 24,787,537

Less accumulated depreciation 2,256,101 2,256,901 2,157,907

Net investments in properties 24,166,196 24,321,584 22,629,630

Investments in and advances to unconsolidated entities 2,220,172 2,452,939 2,857,755

Notes receivable backed by real estate 245,654 247,241 322,834

Assets held for sale 50,672 102,183 444,850

Net investments in real estate 26,682,694 27,123,947 26,255,069

Cash and cash equivalents 293,631 343,736 176,072

Restricted cash 151,184 91,957 71,992

Accounts receivable 168,008 163,679 147,999

Other assets 1,120,046 1,144,634 1,072,780

Total assets $ 28,415,563 $ 28,867,953 $ 27,723,912

Liabilities and Equity:

Liabilities:

Debt $ 12,433,585 $ 12,380,921 $ 11,382,408

Accounts payable, accrued expenses, and other liabilities 1,812,411 1,936,372 1,886,030

Total liabilities 14,245,996 14,317,293 13,268,438

Equity:

Stockholders’ equity:

Preferred stock 582,200 582,200 582,200

Common stock 4,606 4,604 4,594

Additional paid-in capital 16,373,438 16,370,254 16,349,328

Accumulated other comprehensive loss (333,811) (219,574) (182,321)

Distributions in excess of net earnings (3,159,462) (3,019,829) (3,092,162)

Total stockholders’ equity 13,466,971 13,717,655 13,661,639

Noncontrolling interests 649,389 774,950 735,222

Noncontrolling interests-limited partnership unitholders 53,207 58,055 58,613

Total equity 14,169,567 14,550,660 14,455,474

Total liabilities and equity $ 28,415,563 $ 28,867,953 $ 27,723,912

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Financial Information

Consolidated Statements of Operations

(in thousands, except per share amounts)

Second Quarter 2012 Report

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 (A) 2012 2011 (A)

Revenues:

Rental income $ 488,026 $ 279,016 $ 950,520 $ 473,656

Private capital revenue 30,993 32,976 63,350 62,811

Development management and other income 1,729 8,920 4,842 13,239

Total revenues 520,748 320,912 1,018,712 549,706

Expenses:

Rental expenses 132,031 77,199 256,474 137,397

Private capital expenses 15,075 11,596 31,956 22,148

General and administrative expenses 51,415 51,840 111,574 91,023

Merger, acquisition and other integration expenses 21,186 103,052 31,914 109,040

Impairment of real estate properties- - 3,185 -

Depreciation and amortization 186,770 118,606 374,640 198,183

Other expenses 7,227 5,587 11,562 10,271

Total expenses 413,704 367,880 821,305 568,062

Operating income (loss) 107,044 (46,968) 197,407 (18,356)

Other income (expense):

Earnings from unconsolidated co-investment ventures, net 1,153 8,643 12,911 20,565

Earnings from other unconsolidated entities, net 2,736 2,756 4,973 4,475

Interest income 5,366 4,677 10,793 9,103

Interest expense (127,946) (112,916) (261,328) (203,443)

Impairment of other assets- (103,823) (16,135) (103,823)

Gains on acquisitions and dispositions of investments in real estate, net 520 102,529 268,291 106,254

Foreign currency and derivative gains (losses) and other income (expenses), net 13,299 (9,655) (13,802) (15,286)

Gain (loss) on early extinguishment of debt, net (500) - 4,919 -

Total other income (expense) (105,372) (107,789) 10,622 (182,155)

Earnings (loss) before income taxes 1,672 (154,757) 208,029 (200,511)

Income tax expense-current and deferred 8,075 6,429 20,199 12,798

Earnings (loss) from continuing operations (6,403) (161,186) 187,830 (213,309)

Discontinued operations:

Income attributable to disposed properties and assets held for sale 1,197 9,384 8,813 19,383

Net gains on dispositions, net of related impairment charges and taxes 9,874 8,175 21,123 10,135

Total discontinued operations 11,071 17,559 29,936 29,518

Consolidated net earnings (loss) 4,668 (143,627) 217,766 (183,791)

Net earnings attributable to noncontrolling interests (2,739) (202) (2,857) (285)

Net earnings (loss) attributable to controlling interests 1,929 (143,829) 214,909 (184,076)

Less preferred stock dividends 10,049 7,642 20,616 14,011

Net earnings (loss) available for common stockholders $ (8,120) $ (151,471) $ 194,293 $ (198,087)

Weighted average common shares outstanding-Diluted (B) 459,878 307,756 464,696 281,384

Net earnings (loss) per share available for common stockholders-Diluted $ (0.02) $ (0.49) $ 0.42 $ (0.70)

(A) The financial results include Prologis for the full period and AMB and PEPR results from approximately June 1, 2011. (B) See Calculation of Per Share Amounts in the Notes and Definitions.

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Financial Information

Reconciliations of Net Earnings (Loss) to FFO

(in thousands) Second Quarter 2012 Report

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 (A) 2012 2011 (A)

Reconciliation of net earnings (loss) to FFO

Net earnings (loss) available for common stockholders $ (8,120) $ (151,471) $ 194,293 $ (198,087)

Add (deduct) NAREIT defined adjustments:

Real estate related depreciation and amortization 182,530 114,814 366,290 190,117

Net gains on non-FFO dispositions and acquisitions (10,224) (1,454) (180,559) (2,278)

Reconciling items related to noncontrolling interests (3,950) (2,404) (16,004) (2,404)

Our share of reconciling items included in earnings from unconsolidated entities 34,444 36,660 68,982 72,337

Subtotal-NAREIT defined FFO 194,680 (3,855) 433,002 59,685

Add (deduct) our defined adjustments:

Unrealized foreign currency and derivative losses (gains), net (14,519) 10,287 9,717 8,652

Deferred income tax expense (benefit) (5,809) 118 (4,758) 982

Our share of reconciling items included in earnings from unconsolidated entities (1,681) 1,645 (3,218) 1,022

FFO, as defined by Prologis 172,671 8,195 434,743 70,341

Adjustments to arrive at Core FFO, including our share of unconsolidated entities:

Impairment charges - 106,482 19,320 106,482

Japan disaster expenses - (1,315) - 5,610

Merger, acquisition and other integration expenses 21,186 103,052 31,914 109,040

Losses (gains) on acquisitions and dispositions of investments in real estate, net 838 (106,752) (103,893) (109,320)

Loss (gain) on early extinguishment of debt, net 500 - (4,919) -

Income tax expense on dispositions - - - 1,916

Our share of reconciling items included in earnings from unconsolidated entities 6,125 - 8,920 -

Adjustments to arrive at Core FFO 28,649 101,467 (48,658) 113,728

Core FFO $ 201,320 $ 109,662 $ 386,085 $ 184,069

Adjustments to arrive at Adjusted FFO (“AFFO”), including our share of unconsolidated entities:

Straight-lined rents and amortization of lease intangibles (6,646) (8,384) (17,993) (23,069)

Property improvements (14,755) (11,575) (28,169) (18,506)

Tenant improvements (22,150) (13,806) (46,137) (22,848)

Leasing commissions (12,784) (9,367) (23,117) (16,666)

Amortization of management contracts 1,792 664 3,008 1,328

Amortization of debt discounts/(premiums) and financing costs, net of capitalization (6,063) 10,169 (7,452) 19,572

Stock compensation expense 7,855 8,006 16,167 12,618

AFFO $ 148,569 $ 85,369 $ 282,392 $ 136,499

Common stock dividends $ 131,513 $ 64,987 $ 261,593 $ 129,029

(A) The financial results include Prologis for the full period and AMB and PEPR results from approximately June 1, 2011.

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Financial Information

EBITDA Reconciliation

(in thousands) Second Quarter 2012 Report

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 2012 2011

Reconciliation of consolidated net earnings (loss) to Core EBITDA

Net earnings (loss) available for common stockholders $ (8,120) $ (151,471) $ 194,293 $ (198,087)

Net gains on acquisitions and dispositions of investments in real estate, net (10,394) (110,704) (289,414) (118,305)

Depreciation and amortization 186,770 118,606 374,640 198,183

Interest expense 127,946 112,916 261,328 203,443

Impairment charges - 103,823 19,320 103,823

Merger, acquisition and other integration expenses 21,186 103,052 31,914 109,040

Loss (gain) on early extinguishment of debt 500 - (4,919) -

Current and deferred income tax expense 8,075 6,429 20,199 14,714

Pro forma adjustment (A) - - 12,352 -

Income on properties sold during the period included in discontinued operations (1,197) (9,384) (8,813) (19,383)

Net earnings attributable to noncontrolling interest 2,739 202 2,857 285

Preferred stock dividends 10,049 7,642 20,616 14,011

Unrealized losses (gains) and stock compensation expense, net (6,664) 18,293 25,884 21,270

Other adjustments made to arrive at Core FFO - (1,315) - 5,610

Core EBITDA, prior to our share of unconsolidated entities 330,890 198,089 660,257 334,604

Our share of reconciling items from unconsolidated entities:

Net losses (gains) on disposition of real estate, net (475) - 1,338 -

Depreciation and amortization 34,444 36,660 65,975 72,337

Interest expense 23,671 30,246 47,394 66,782

Loss on early extinguishment of debt 5,017 - 5,999 -

Impairment of real estate properties and other assets 1,583 - 1,583 -

Current and deferred income tax expense 1,698 671 3,241 3,360

Unrealized losses (gains) and deferrred income tax expense (benefit) (1,681) 1,645 (3,218) 1,022

Realized losses on derivative activity - - - 226

Core EBITDA $ 395,147 $ 267,311 $ 782,569 $ 478,331

(A) Adjustments for the effects of the Prologis North American Industrial Fund II and Prologis California acquisitions to reflect NOI for the full period. See Notes and Definitions for more detail.

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Operations Overview

Operating Portfolio – Square Feet, Occupied and Leased

(square feet in thousands)

Second Quarter 2012 Report

Region # of Buildings Square Feet Occupied Leased

Total Owned and Prologis Prologis % of Total Total Owned and Prologis Total Owned and Prologis

Managed Share Share (%) Managed Share Managed Share

Global Markets

U.S.

Atlanta East 130 18,135 14,230 78.5% 3.7% 84.7% 83.9% 84.8% 84.0%

Baltimore/Washington East 67 7,862 5,316 67.6% 1.4% 92.8% 92.6% 93.2% 92.8%

Central Valley Northwest 24 8,970 7,128 79.5% 1.9% 86.7% 86.6% 86.7% 86.6%

Central & Eastern PA East 27 14,049 7,137 50.8% 1.9% 92.7% 95.5% 92.7% 95.5%

Chicago Central 211 35,573 27,571 77.5% 7.2% 90.0% 91.1% 90.3% 91.4%

Dallas/ Ft . Worth Central 170 24,851 20,377 82.0% 5.4% 92.0% 92.6% 92.2% 92.8%

Houst on Central 83 9,907 7,192 72.6% 1.9% 97.4% 97.9% 97.5% 98.0%

New Jersey/ New York City East 182 22,356 16,081 71.9% 4.2% 92.3% 90.7% 92.5% 91.0%

San Francisco Bay Area Northwest 237 19,467 16,838 86.5% 4.3% 93.2% 93.1% 93.9% 93.9%

Seattle Northwest 70 8,643 4,812 55.7% 1.3% 94.4% 96.3% 94.9% 96.5%

South Florida East 94 10,618 7,651 72.1% 2.0% 92.3% 92.9% 92.3% 92.9%

Southern California Southwest 308 56,676 46,471 82.0% 12.2% 97.0% 97.4% 97.4% 97.7%

On Tarmac Various 31 2,598 2,378 91.5% 0.6% 90.8% 89.9% 90.8% 90.0%

Canada East 19 6,383 5,081 79.6% 1.3% 97.7% 97.2% 97.7% 97.2%

Mexico Lat in America 181 29,220 16,623 56.9% 4.4% 91.1% 90.1% 91.3% 90.4%

Brazil Lat in America 4 1,228 241 19.6% 0.1% 100.0% 100.0% 100.0% 100.0%

Americas total 1, 838276, 536205 , 12774.2 % 53.8 % 92.6 % 92.8 % 92.9 % 93.1%

Belgium Northern 9 2,016 1,655 82.1% 0.4% 99.6% 99.6% 99.6% 99.6%

France Southern 142 34,888 26,043 74.6% 6.8% 93.5% 93.2% 93.6% 93.3%

Germany Northern 82 17,425 8,429 48.4% 2.2% 98.7% 97.7% 98.7% 97.7%

Netherlands Northern 50 10,176 6,404 62.9% 1.7% 90.7% 89.9% 90.7% 89.9%

Poland CEE 96 20,773 12,378 59.6% 3.2% 85.4% 81.9% 86.3% 83.0%

Spain Southern 26 7,126 6,006 84.3% 1.6% 77.0% 77.6% 82.9% 79.7%

United Kingdom UK 73 17,231 10,503 61.0% 2.8% 96.6% 95.4% 96.6% 95.4%

Europe total 478109 , 63571, 41865.1% 18.7 % 92.1% 90.6 % 92.6 % 91.0 %

China China 25 5,499 2,313 42.1% 0.6% 94.4% 96.7% 94.4% 96.7%

Japan Japan 47 20,555 14,744 71.7% 3.9% 97.3% 97.3% 97.4% 97.5%

Singapore Singapore 5942 942 100.0% 0.2% 100.0% 100.0% 100.0% 100.0%

Asia total 7726, 99617, 99966.7 % 4.7 % 96.8 % 97.4 % 96.9 % 97.5 %

Tot al global markets 2,393413, 167294, 54471.3 % 77.2 % 92.8 % 92.6 % 93.1% 92.9 %

Regional markets ( A)

Italy—Europe Southern 27 8,378 7,690 91.8% 2.1% 92.0% 91.3% 92.0% 91.3%

Czech Republic—Europe CEE 29 6,821 5,096 74.7% 1.3% 91.2% 88.3% 93.4% 91.1%

Columbus- Americas Central 39 10,309 8,046 78.0% 2.1% 93.1% 91.2% 93.2% 91.2%

Sweden—Europe Northern 10 3,808 2,738 71.9% 0.7% 100.0% 100.0% 100.0% 100.0%

Hungary—Europe CEE 30 5,343 3,822 71.5% 1.0% 82.3% 83.4% 83.2% 84.6%

Denver—Americas Northwest 33 5,208 4,138 79.5% 1.1% 95.5% 94.8% 96.1% 95.6%

San Antonio—Americas Central 60 6,298 4,878 77.5% 1.3% 92.8% 92.7% 93.1% 93.2%

Memphis—Americas Central 17 6,270 5,475 87.3% 1.4% 93.0% 92.0% 93.0% 92.0%

Cincinnati—Americas Central 28 6,898 4,379 63.5% 1.2% 96.0% 93.7% 96.0% 93.7%

Louisville—Americas Central 11 4,341 3,809 87.7% 1.0% 86.1% 85.3% 86.1% 85.3%

Remaining other regional (5 markets) Various 115 18,620 11,525 61.9% 3.0% 92.2% 89.2% 92.5% 89.6%

Regional markets total 39982 , 29461, 59674.8 % 16.2 % 92.3 % 90.7 % 92.6 % 91.2 %

Other markets (18 markets) Various 29041, 20624 , 92860.5 % 6.6 % 89.0 % 91.8 % 89.3 % 92.0%

Total operating portfolio—owned and managed 3,082536, 667381, 06871.0% 100.0% 92.4 % 92.2 % 92.7 % 92.6 %

(A) Selected and ordered by Prologis share of NOI.

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Operations Overview

Operating Portfolio – NOI and Gross Book Value

(dollars in thousands)

Second Quarter 2012 Report

Region Second Quarter NOI Gross Book Value

Total Owned and Prologis Prologis % of Total Total Owned and Prologis Prologis % of Total

Managed Share ($) Share (%) Managed Share ($) Share (%)

Global Markets

Atlanta East $10,151 $7,810 76.9% 1.9% $772,624 $573,011 74.2% 2.1%

Baltimore/ Washington East 9,719 6,361 65.4% 1.6% 590,910 368,659 62.4% 1.3%

Central Valley Northwest 6,102 4,669 76.5% 1.1% 465,450 360,674 77.5% 1.3%

Central & Eastern PA East 12,462 6,230 50.0% 1.5% 865,631 404,685 46.8% 1.5%

Chicago Central 25,374 18,256 71.9% 4.5% 2,125,436 1,601,377 75.3% 5.7%

Dallas/ Ft. Worth Central 15,992 12,278 76.8% 3.0% 1,186,334 924,953 78.0% 3.3%

Houston Central 8,341 5,953 71.4% 1.5% 532,992 335,796 63.0% 1.2%

New Jersey/ New York City East 26,822 17,360 64.7% 4.2% 1,959,224 1,303,250 66.5% 4.7%

San Francisco Bay Area Northwest 27,501 24,143 87.8% 5.9% 1,908,204 1,651,614 86.6% 5.9%

Seattle Northwest 10,091 5,431 53.8% 1.3% 816,195 448,211 54.9% 1.6%

South Florida East 13,012 9,133 70.2% 2.2% 1,026,920 767,210 74.7% 2.7%

Southern California Southwest 62,574 50,843 81.3% 12.4% 5,042,757 4,087,784 81.1% 14.6%

On Tarmac Various 9,182 8,409 91.6% 2.0% 313,150 275,652 88.0% 1.0%

Canada East 8,971 7,045 78.5% 1.7% 621,567 490,501 78.9% 1.8%

Mexico Latin America 25,778 14,601 56.6% 3.6% 1,735,622 942,104 54.3% 3.4%

Brazil Latin America 2,675 468 17.5% 0.1% 112,845 22,751 20.2% 0.1%

Americastotal 274,747 198,990 72.4% 48.5% 20,075,861 14,558,232 72.5% 52.2%

Belgium Northern 2,792 2,180 78.1% 0.6% 164,419 128,979 78.4% 0.5%

France Southern 43,621 31,667 72.6% 7.7% 2,763,545 1,971,033 71.3% 7.1%

Germany Northern 25,368 12,371 48.8% 3.0% 1,445,828 677,659 46.9% 2.4%

Netherlands Northern 14,304 8,645 60.4% 2.1% 959,550 550,675 57.4% 2.0%

Poland CEE 19,064 11,079 58.1% 2.7% 1,332,887 723,667 54.3% 2.6%

Spain Southern 8,130 7,529 92.6% 1.8% 588,371 515,138 87.6% 1.8%

United Kingdom UK 34,369 19,915 57.9% 4.9% 2,017,427 1,126,030 55.8% 4.0%

Europe total 147,648 93,386 63.2% 22.8% 9,272,027 5,693,181 61.4% 20.4%

China China 4,417 1,491 33.8% 0.4% 280,220 88,318 31.5% 0.3%

Japan Japan 64,071 44,806 69.9% 10.9% 4,407,334 3,050,068 69.2% 10.9%

Singapore Singapore 2,436 2,436 100.0% 0.6% 143,597 143,597 100.0% 0.5%

Asiatotal 70,924 48,733 68.7% 11.9% 4,831,151 3,281,983 67.9% 11.7%

Tot al global markets 493,319 341,109 69.1% 83.2% 34,179,039 23,533,396 68.9% 84.3%

Regional markets ( A)

Italy - Europe Southern 8,123 7,388 91.0% 1.8% 533,437 481,655 90.3% 1.7%

Czech Republic - Europe CEE 8,026 5,872 73.2% 1.4% 530,113 377,553 71.2% 1.4%

Columbus - Americas Central 5,718 4,078 71.3% 1.0% 387,664 293,011 75.6% 1.1%

Sweden - Europe Northern 5,441 3,818 70.2% 0.9% 330,960 233,760 70.6% 0.8%

Hungary - Europe CEE 5,362 3,806 71.0% 0.9% 367,012 233,102 63.5% 0.8%

Denver - Americas Northwest 4,511 3,588 79.5% 0.9% 290,104 235,239 81.1% 0.9%

San Antonio - Americas Central 4,503 3,380 75.1% 0.8% 281,102 206,974 73.6% 0.7%

Memphis - Americas Central 3,628 3,205 88.3% 0.8% 206,484 178,455 86.4% 0.7%

Cincinnati - Americas Central 4,986 2,887 57.9% 0.7% 278,297 161,016 57.9% 0.6%

Louisville - Americas Central 3,017 2,680 88.8% 0.7% 173,697 153,639 88.5% 0.6%

Remaining other regional (5 markets) Various 14,133 7,592 53.7% 1.9% 936,562 532,107 56.8% 1.9%

Regional markets total 67,448 48,294 71.6% 11.8% 4,315,432 3,086,511 71.5% 11.1%

Other markets (18 markets) Various 33,165 21,063 63.5% 5.0% 2,442,076 1,284,243 52.6% 4.6%

Total operating portfolio $593,932 $410,466 69.1% 100.0% $40,936,547 $27,904,150 68.2% 100.0%

(A) Selected and ordered by Prologis share of NOI.

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Operations Overview

Operating Portfolio – Summary by Region

(square feet and dollars in thousands)

Second Quarter 2012 Report

# of Buildings Square Feet Occupied Leased

Total Owned Prologis Prologis % of Total Total Owned Prologis Total Owned Prologis

and Managed Share Share (%) and Managed Share and M anaged Share

Consolidated

Americas 1,583 237,685 237,685 100.0% 62.4% 92.4% 92.4% 92.7% 92.7%

Europe 307 73,575 73,575 100.0% 19.3% 89.7% 89.7% 90.2% 90.2%

Asia 32 15,984 15,984 100.0% 4.2% 97.6% 97.6% 97.7% 97.7%

Total operating portfolio - consolidated 1,922 327,244 327,244 100.0% 85.9% 92.1% 92.1% 92.4% 92.4%

Unconsolidated

Americas 827 132,369 31,849 24.1% 8.4% 91.7% 92.0% 91.8% 92.1%

Europe 288 66,043 19,960 30.2% 5.2% 94.8% 94.7% 95.6% 95.5%

Asia 45 11,012 2,015 18.3% 0.5% 95.7% 95.9% 95.7% 95.9%

Total operating portfolio - unconsolidated 1,160 209,424 53,824 25.7% 14.1% 92.9% 93.1% 93.2% 93.5%

Total

Americas 2,410 370,053 269,534 72.8% 70.8% 92.2% 92.4% 92.4% 92.7%

Europe 595 139,618 93,535 67.0% 24.5% 92.1% 90.8% 92.7% 913%91.3%

Asia 77 26,996 17,999 66.7% 4.7% 96.8% 97.4% 96.9% 97.5%

Total operating portfolio - owned and managed 3,082 536,667 381,068 71.0% 100.0% 92.4% 92.2% 92.7% 92.6%

Value added properties - consolidated 5 748 748 100.0% 8.5% 8.5% 8.5% 8.5%

Value added properties - unconsolidated 1 286 73 25.5% 0.0% 0.0% 0.0% 0.0%

Total owned and managed 3,088 537,701 381,889 71.0% 92.2% 92.1% 92.5% 92.4%

Second Quarter NOI Gross Book Value

Total Owned Prologis Prologis %of% of Total Total Owned Prologis Prologis %of% of Total

and Managed Share ($) Share (%) and Managed Share ($) Share (%)

Consolidated

Americas $212,941 $212,941 100.0% 51.9% $15,146,724 $15,146,724 100.0% 54.3%

Europe 89,824 89,824 100.0% 21.8% 5,333,319 5,333,319 100.0% 19.1%

Asia 43,401 43,401 100.0% 10.6% 2,908,801 2,908,801 100.0% 10.4%

Total operating portfolio - consolidated $ 346,166 $ 346,166 100.0% 84.3% $ 23,388,844 $ 23,388,844 100.0% 83.8%

Unconsolidated

Americas $128,489 $31,046 24.2% 7.6% $9,572,891 $2,297,127 24.0% 8.2%

Europe 91,754 27,922 30.4% 6.8% 6,052,462 1,844,997 30.5% 6.7%

Asia 27,523 5,332 19.4% 1.3% 1,922,350 373,182 19.4% 1.3%

Total operating portfolio - unconsolidated $ 247,766 $ 64,300 26.0% 15.7% $ 17,547,703 $ 4,515,306 25.7% 16.2%

Total

Americas $341,430 $243,987 71.5% 59.5% $24,719,615 $17,443,851 70.6% 62.5%

Europe 181578, 117,746 64.8% 28.6% 11,385,781 7,178,316 63.0% 25.8%

Asia 70,924 48,733 68.7% 11.9% 4,831,151 3,281,983 67.9% 11.7%

Total operating portfolio - owned and managed $ 593,932 $ 410,466 69.1% 100.0% $ 40,936,547 $ 27,904,150 68.2% 100.0%

Value added properties - consolidated (53) (53) 100.0% 53,550 53,550 100.0%

Value added properties - unconsolidated (147) (38) 25.9% 17,203 4,428 25.7%

Total owned and managed $ 593,732 $ 410,375 69.1% $ 41,007,300 $ 27,962,128 68.2%

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Operations Overview

Operating Metrics – Owned and Managed

Second Quarter 2012 Report

(square feet and dollars in thousands)

100% 95% 90% 85% 80%

Period Ending Occupancy by Region

92.2% 92.1% 92.2%

91.1%

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Americas

91.6% 92.1% 92.1%

90.0%

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Europe

96.0% 96.2% 96.8%

95.0%

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Asia

92.2% 92.3% 92.4%

91.0%

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Total

Leasing Activity

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Square feet of leases signed:

Properties under development 1,810 1,365 1,017 2,863

Operating properties:

New leases 11,545 13,663 10,023 11,947

Renewals 20,095 22,533 19,812 20,189

Total square feet of leases signed 33,450 37,561 30,852 34,999

Weighted average customer retention 76.3% 80.1% 78.3% 82.4%

Turnover costs (per square foot) (B) $ 1.36 $ 1.40 $ 1.14 $ 1.50

Capital Expenditures Incurred

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Property improvements $ 33,611 $ 32,297 $ 17,100 $ 21,056

$ per square foot $ 0.06 $ 0.06 $ 0.03 $ 0.04

Tenant improvements 23,934 29,418 28,598 29,243

Leasing commissions 19,136 23,674 16,401 18,523

Total turnover costs 43,070 53,092 44,999 47,766

Total capital expenditures $ 76,681 $ 85,389 $ 62,099 $ 68,822

Trailing four quarters-% of gross NOI (C) N/A 11.5% 11.9% 12.0%

Weighted average ownership percent 76.5% 66.5% 76.9% 72.2%

Prologis share $ 58,687 $ 56,770 $ 47,734 $ 49,689

Same Store Information (A)

Q3 2011 Q4 2011 Q1 2012 Q2 2012

Square feet of population 547,380 538,400 522,571 519,939

Percentage change:

Rental income (0.1%) 0.9% (0.6%) 1.5%

Rental expenses 1.5% 2.0% (6.6%) 4.8%

Net operating income-GAAP (0.7%) 0.4% 1.7% 0.4%

Net operating income-stabilized cash N/A N/A 3.1% 2.3%

Average occupancy 1.6% 1.6% 2.6% 2.9%

Square feet of leasing activity 27,969 32,159 28,227 30,127

Percentage change in rental rates (8.6%) (4.5%) (1.1%) (3.9%)

(A) See the Notes and Definitions for further explanations.

(B) Turnover costs per foot represent expected costs based on the leases signed during the quarter, rather than costs incurred as presented in the “Capital Expenditures Incurred” section. (C) This metric is calculated using the trailing twelve month NOI based on pro forma information for the pre-Merger period.

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Operations Overview

Customer Information – Owned and Managed

(square feet and dollars in thousands)

Second Quarter 2012 Report

Top Customers

% of Annual Total Square

Base Rent Feet

1 DHL 2.6% 11,762

2 CEVA Logistics 1.4% 7,609

3 Kuehne & Nagel 1.4% 7,058

4 Amazon.Com, Inc. 1.0% 3,664

5 SNCF Geodis 0.9% 5,156

6 Home Depot, Inc. 0.9% 4,446

7 United States Government 0.8% 1,870

8 Panasonic Logistics Co. Ltd. 0.8% 2,365

9 PepsiCo 0.7% 4,157

10 FedEx Corporation 0.7% 2,172

Top 10 Customers 11.2% 50,259

11 Tesco PLC 0.6% 2,693

12 Sagawa Express 0.6% 965

13 Kraft Foods, Inc. 0.6% 3,530

14 Panalpina inc. 0.6% 2,357

15 Nippon Express Group 0.6% 1,361

16 Unilever 0.6% 3,920

17 APL (Neptune Orient Lines) 0.5% 4,164

18 Catepillar Logistics Services 0.5% 1,344

19 DB Schenker 0.5% 2,249

20 Hitachi Ltd 0.5% 1,306

21 ND Logistics 0.4% 2,277

22 LG 0.4% 2,421

23 UPS SCS (United Parcel Service Inc.) 0.4% 2,169

24 Schneider Electric S.A. 0.4% 1,587

25 Wal-Mart Stores 0.4% 2,580

Top 25 Customers 18.8% 85,182

Lease Expirations - Owned and Managed

Year Annual Base Percentage Occupied Percentage

Rent of Total Square Feet of Total

Month to month customers $ 42,543 1.5% 11,593 2.3%

2012 118,047 4.2% 21,378 4.3%

2013 455,799 16.1% 80,199 16.2%

2014 440,179 15.5% 77,629 15.7%

2015 395,146 13.9% 72,564 14.6%

2016 321,880 11.3% 57,975 11.7%

Thereafter 1,066,345 37.5% 174,493 35.2%

Total $ 2,839,939 100% 495,831 100%

Lease Expirations - Prologis Share

Annual Base Percentage Occupied Percentage

Year Rent of Total Square Feet of Total

Month to month customers $ 33,054 1.7% 8,900 2.5%

2012 77,401 3.9% 14,545 4.1%

2013 332,828 16.8% 57,788 16.4%

2014 316,425 15.9% 57,964 16.5%

2015 273,430 13.8% 51,744 14.7%

2016 239,261 12.1% 44,182 12.6%

Thereafter 709,928 35.8% 116,344 33.2%

Total $ 1,982,327 100% 351,467 100%

LOGO

Capital Deployment

Building Dispositions and Contributions (A)

(square feet and dollars in thousands) Second Quarter 2012 Report

Q2 2012 FY 2012

Prologis Share Prologis Share Prologis Share of Prologis Share Prologis Share Prologis Share of

Square Feet Total Proceeds Square Feet Total Proceeds

of Square Feet of Proceeds ($) Proceeds (%) (B) of Square Feet of Proceeds ($) Proceeds (%)

Third Party Building Dispositions

Americas

Prologis wholly owned 2,768 2,768 83,429 83,429 100.0% 5,075 5,075 302,916 302,916 100.0%

Prologis North American Properties Fund XI - - - - - 3,516 703 135,362 27,072 20.0%

Prologis Institutional Alliance Fund II (C) 430 121 29,000 8,164 28.2% 430 121 29,000 8,164 28.2%

Prologis North American Industrial Fund 60 14 2,400 554 23.1% 60 14 2,400 554 23.1%

Total Americas 3,258 2,903 114,829 92,147 80.2% 9,081 5,913 469,678 338,706 72.1%

Europe

Prologis wholly owned 207 207 12,351 12,351 100.0% 2,176 2,176 135,022 135,022 100.0%

Prologis European Properties (C) - - - - - 3,670 3,439 338,862 317,513 93.7%

Prologis European Properties Fund II 106 32 8,906 2,645 29.7% 2,043 608 150,174 44,630 29.7%

Total Europe 313 239 21,257 14,996 70.5% 7,889 6,223 624,058 497,165 79.7%

Asia

Prologis wholly owned 592 592 36,938 36,938 100.0% 592 592 36,938 36,938 100.0%

Total Asia 592 592 36,938 36,938 100.0% 592 592 36,938 36,938 100.0%

Total Third Party Building Dispositions 4,163 3,734 $173,024 $144,081 83.3% 17,562 12,728 $1,130,674 $872,809 77.2%

Building Contributions and Dispositions to Co-Investment Ventures

Americas

Prologis Mexico Fondo Logistico (C) 755 755 40,650 32,520 80.0% 755 755 40,650 32,520 80.0%

Total Americas 755 755 40,650 32,520 80.0% 755 755 40,650 32,520 80.0%

Europe

Europe Logistics Venture I - - - - - 139 139 16,875 14,343 85.0%

Total Europe - - - - - 139 139 16,875 14,343 85.0%

Asia

Total Asia - - - - - - - - - -

Total Contributions and Dispositions to Co-Investment Ventures 755 755 $40,650 $32,520 80.0% 894 894 57,525 46,863 81.5%

Total Building Dispositions and Contributions 4,918 4,489 $213,674 $176,601 82.6% 18,456 13,622 $1,188,199 $919,672 77.4%

Weighted average stabilized cap rate 7.6% 7.3%

(A) Amounts include industrial building dispositions, but do not include dispositions of non-industrial buildings or land subject to ground leases of $0.4 million for the quarter and $6.4 million year to date, of which $0.4 million and $5.1 million is Prologis’ share, respectively.

(B) Prologis share reflects actual ownership on consolidated funds. For contributions, this amount reflects cash proceeds to Prologis (net of units received for partial consideration). (C) This is a consolidated fund.

LOGO

Capital Deployment

Third Party Building Acquisitions

(square feet and dollars in thousands)

Second Quarter 2012 Report

Q2 2012 FY 2012

Prologis Share Prologis Share of Prologis Share of Prologis Prologis Share of Prologis Share of

Acquisition Acquisition

Square Feet of Square Acquisition Acquisition Square Feet Share of Acquisition Acquisition

Cost Cost

Feet Cost ($) Cost (%) Square Feet Cost ($) Cost (%)

Third Party Building Acquisitions

Americas

Prologis wholly owned 693 693 $ 34,062 $ 34,062 100.0% 875 875 $ 46,642 $ 46,642 100.0%

Prologis North American Industrial Fund 41 9 2,886 667 23.1% 41 9 2,886 667 23.1%

Prologis Targeted U.S. Logistics Fund 158 41 15,964 4,109 25.7% 547 148 44,654 12,022 26.9%

Total Americas 892 743 52,912 38,838 73.4% 1,463 1,032 94,182 59,331 63.0%

Europe

Prologis European Properties Fund II 653 194 31,697 9,420 29.7% 717 213 36,812 10,940 29.7%

Europe Logistics Venture I—- ——- 347 52 24,293 3,644 15.0%

Total Europe 653 194 31,697 9,420 29.7% 1,064 265 61,105 14,584 23.9%

Asia—- ————- —-

Total Third Party Acquisitions 1,545 937 $ 84,609 $ 48,258 57.0% 2,527 1,297 $ 155,287 $ 73,915 47.6%

Weighted average stabilized cap rate 7.2% 7.0%

LOGO

Capital Deployment

Development Starts – Current Quarter

Second Quarter 2012 Report

(in thousands, except percent and per square foot)

Total Q2 2012 Prologis Share ($)—Q2 Prologis Share (%)—Q2

Total Expected Cost Per Leased % at Total Expected Cost Per Leased % at Total Expected

Square Feet Investment Square Foot Start Square Feet Investment Square Foot Start Square Feet Investment

Americas

Consolidated 3,047 $129,430 $42 49.8% 3,047 $129,430 $42 49.8% 100.0% 100.0%

Total Americas 3,047 129,430 42 49.8% 3,047 129,430 42 49.8% 100.0% 100.0%

Europe

Consolidated 250 14,552 58 100.0% 250 14,552 58 100.0% 100.0% 100.0%

Total Europe 250 14,552 58 100.0% 250 14,552 58 100.0% 100.0% 100.0%

Asia

Consolidated 429 84,579 197 100.0% 429 84,579 197 100.0% 100.0% 100.0%

Total Asia 429 84,579 197 100.0% 429 84,579 197 100.0% 100.0% 100.0%

Total 3,726 $228,561 $61 58.9% 3,726 $228,561 $61 58.9% 100.0% 100.0%

Weighted average estimated stabilized yield 7.2%

Pro forma NOI $16,456

Weighted average estimated cap rate at stabilization 6.3%

Estimated value creation (A) $32,645

Estimated development margin 14.3%

Prologis share of value creation on development starts (A) 100.0%

Prologis share of value creation on development starts (A) $32,645

(A) Value creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section.

LOGO

Capital Deployment

Development Starts – Year to Date

(in thousands, except percent and per square foot) Second Quarter 2012 Report

Total YTD 2012 Prologis Share ($) - YTD 2012 Prologis Share (%) - YTD 2012

Total Expected Cost Per Leased % at Total Expected Cost Per Leased % at Total Expected

Square Feet Investment Square Foot Start Square Feet Investment Square Foot Start Square Feet Investment

Americas

Consolidated 3,047 $129,430 $42 49.8% 3,047 $129,430 $42 49.8% 100.0% 100.0%

Brazil Fund and related joint ventures 317 33,935 107 100.0% 79 8,484 107 100.0% 25.0% 25.0%

Total Americas 3,364 163,365 49 54.5% 3,126 137,914 44 51.1% 92.9% 84.4%

Europe

Consolidated 514 28,807 56 48.5% 514 28,807 56 48.5% 100.0% 100.0%

Total Europe 514 28,807 56 48.5% 514 28,807 56 48.5% 100.0% 100.0%

Asia

Consolidated 1,390 247,427 178 100.0% 1,390 247,427 178 100.0% 100.0% 100.0%

Total Asia 1,390 247,427 178 100.0% 1,390 247,427 178 100.0% 100.0% 100.0%

Total 5,268 $439,599 $83 65.9% 5,030 $414,148 $82 64.3% 95.5% 94.2%

Weighted average estimated stabilized yield 7.7%

Pro forma NOI $33,849

Weighted average estimated cap rate at stabilization 6.4%

Estimated value creation (A) $89,292

Estimated development margin 20.3%

Prologis share of value creation on development starts (A) 92.3%

Prologis share of value creation on development starts (A) $82,410

Prologis share of value creation realized on VAC buildings (B) 10,954

Total Prologis share of estimated and realized value creation

year to date $93,364

Historical Development Starts (TEI) Year to Date 2012 Development Starts

$1,200,000

$1,016,763

$1,000,000

$800,000 $758,905

$600,000

$439,599

$400,000 $313,877

$200,000

2009 2010 2011 Q2 - YTD

Americas Europe Asia Americas Europe Asia Prologis Share Partner’s Share Build to Suit Speculative

(A) Value creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section.

(B) This represents the economic gain realized from the sale of a Value Added Conversion “VAC” property during the year. The gain represents the amount by which the sales proceeds exceeds

the amount included in NAV for this property.

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Capital Deployment

Development Portfolio

(in thousands, except percent) Second Quarter 2012 Report

Under D evelo pment

P re-Stabilized 2012 Expected 2013 and thereafter T o tal Under

D evelo pments C o mpletio n Expected C o mpletio n D evelo pment T o tal D evelo pment P o rtfo lio

Prologis share of

Sq Ft TEI $ Sq Ft TEI $ Sq Ft TEI $ Sq Ft TEI $ TEI $ TEI $ % of Total Leased %

C o nso lidated

U.S.

Central 147 $7,881 - $0 1,052 $40,089 1,052 $40,089 $47,970 $47,970 4.3% 41.6%

East 535 55,793 171 16,707 1,612 69,245 1,783 85,952 141,745 141,745 12.8% 61.1%

Northwest - - - - - - - - - - - -

Southwest 415 26,098 - - - - - - 26,098 26,098 2.4% 0.0%

U.S. Total 1,097 89,772 171 16,707 2,664 109,334 2,835 126,041 215,813 215,813 19.5% 48.7%

Latin America 623 34,944 383 20,097 - - 383 20,097 55,041 55,041 5.0% 37.7%

A mericas to tal 1,720 124,716 554 36,804 2,664 109,334 3,218 146,138 270,854 270,854 24.5% 46.5%

Europe

Northern Europe 319 29,424 530 31,710 - - 530 31,710 61,134 61,134 5.4% 62.4%

Southern Europe 507 37,234 - - - - - - 37,234 37,234 3.4% 21.8%

Central Europe - - 201 9,535 - - 201 9,535 9,535 9,535 0.9% 0.0%

United Kingdom - - 30 2,451 - - 30 2,451 2,451 2,451 0.2% 100.0%

Euro pe to tal 826 66,658 761 43,696 - - 761 43,696 110,354 110,354 9 .9% 42 .2%

Asia

Japan 1,143 153,777 1,254 229,936 1,390 251,657 2,644 481,593 635,370 635,370 57.2% 66.5%

A sia to tal 1,143 153,777 1,254 229,936 1,390 251,657 2,644 481,593 635,370 635,370 57.2% 66.5%

T o tal glo bal markets 3,689 345,151 2,569 310,436 4,054 360,991 6,623 671,427 1,016,578 1,016,578 91.6% 53.2%

R egio nal and o ther markets

Americas - - - - - - - - - - - -

Euro pe - - 264 13,754 - - 264 13,754 13,754 13,754 1.2% 0.0%

T o tal regio nal and o ther markets - - 264 13,754 - - 264 13,754 13,754 13,754 1.2% 0.0%

T o tal co nso lidated develo pment po rtfo lio 3,689 345,151 2,833 324,190 4,054 360,991 6,887 685,181 1,030,332 1,030,332 92.8% 51.8%

Unco nso lidated

Prologis Targeted U.S. Logistics Fund - - 272 29,130 - - 272 29,130 29,130 7,498 0.7% 0.0%

Brazil Fund and related joint ventures - - 1,279 106,903 - - 1,279 106,903 106,903 53,451 4.8% 40.3%

Prologis Targeted Europe Logistics Fund - - 297 29,077 - - 297 29,077 29,077 9,811 0.9% 0.0%

Prologis China Logistics Venture I - - - - 1,078 58,103 1,078 58,103 58,103 8,716 0.8% 0.0%

T o tal unco nso lidated develo pment po rtfo lio - - 1,848 165,110 1,078 58,103 2,926 223,213 223,213 79,476 7.2% 17.6%

T o tal develo pment po rtfo lio - o wned & managed 3,689 $ 345,151 4,681 $ 489,300 5,132 $ 419,094 9,813 $ 908,394 $ 1,253,545 $ 1,109,808 100.0% 44.4%

T o tal develo pment po rtfo lio - P ro lo gis share 3,689 $345,151 3,643 $394,951 4,215 $369,706 7,858 $764,657 $1,109,808 49.7%

T o tal develo pment po rtfo lio - P ro lo gis share (%) 100.0% 100.0% 77.8% 80.7% 82.1% 88.2% 80.1% 84.2% 88.5%

Cost to complete $36,331 $147,576 $302,925 $450,501 $486,832

Prologis share of cost to complete $36,331 $105,908 $269,616 $375,524 $411,855

Percent build to suit (based on Prologis share) 0.0% 16.6% 83.9% 49.1% 33.9%

Pre-leased percent n/a 41.9% 56.6% 49.6%

Weighted average estimated stabilized yield 7.5% 8.4% 7.2% 7.9% 7.8%

Pro forma NOI $97,777

Weighted average estimated cap rate at stabilization 6.6%

Estimated value creation (A) $227,917

Estimated development margin 18.2%

Prologis share of value creation (A) $202,805

Prologis share of value creation (A) 89.0%

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Capital Deployment

Land Portfolio – Owned and Managed

(dollars in thousands) Second Quarter 2012 Report

Land by M arket R egion A cres C urrent B o ok V alue

T ot al Owned & Prolo gis Prologis T ot al Owned & Prolo gis Prologis % of

M anaged Share Share ( %) M anaged Share ( $) Share ( %) T ot al

Glo bal markets

U.S.

Atlanta East 616 616 100.0% $ 24,879 $ 24,879 100.0% 1.3%

Baltimore/Washington East 106 106 100.0% 14,868 14,868 100.0% 0.8%

Central Valley Northwest 182 182 100.0% 17,314 17,314 100.0% 0.9%

Central & Eastern PA East 302 302 100.0% 26,252 26,252 100.0% 1.4%

Chicago Central 638 638 100.0% 6100961,009 6100961,009 100.0% 3.2%

Dallas/Ft. Worth Central 398 398 100.0% 18,907 18,907 100.0% 1.0%

Houston Central 65 65 100.0% 7,891 7,891 100.0% 0.4%

New Jersey/New York City East 372 372 100.0% 145,767 145,767 100.0% 7.6%

Seattle Northwest 15 15 100.0% 2,190 2,190 100.0% 0.1%

South Florida East 377 377 100.0% 144,797 144,797 100.0% 7.5%

Southern California Southwest 791 791 100.0% 127,086 127,086 100.0% 6.6%

Canada Canada 230 230 100.0% 94,716 94,716 100.0% 4.9%

M exico M exico 958 958 100.0% 187,007 187,007 100.0% 9.7%

Brazil Brazil 376 188 50.0% 80,328, 40,164, 50.0% 2.1%

A mericas to tal 5,426 5,238 96.5% 953,011 912,847 95.8% 47.5%

Belgium Northern 30 30 100.0% 10,015 10,015 100.0% 0.5%

France Southern 532 532 100.0% 91,083 91,083 100.0% 4.7%

Germany Northern 156 156 100.0% 35,402 35,402 100.0% 1.8%

Netherlands Northern 63 63 100.0% 55,855 55,855 100.0% 2.9%

Poland CEE 893 893 100.0% 114,724 114,724 100.0% 6.0%

Spain Southern 100 100 100.0% 19,402 19,402 100.0% 1.0%

United Kingdom UK 979 979 100.0% 249,792 249,792 100.0% 13.0%

Euro pe to tal 2,753 2,753 100.0% 576,273 576,273 100.0% 29.9%

China China 60 45 75.0% 24,735 13,358 54.0% 0.7%

Japan Japan 81 81 100.0% 136,059 136,059 100.0% 7.1%

A sia to tal 141 126 89.4% 160,794 149,417 92.9% 7.8%

T o tal glo bal markets 8,320 8,117 97.6% 1,690,078 1,638,537 97.0% 85.2%

R egio nal markets (A )

Hungary CEE 338 338 100.0% 45,500 45,500 100.0% 2.4%

Czech Republic CEE 261 261 100.0% 41,185 41,185 100.0% 2.1%

Italy Southern 107 107 100.0% 31,364 31,364 100.0% 1.6%

Central Florida East 129 129 100.0% 25,653 25,653 100.0% 13%1.3%

Slovakia CEE 95 95 100.0% 16,080 16,080 100.0% 0.8%

Savannah East 229 229 100.0% 13,097 13,097 100.0% 0.7%

Denver Northwest 66 66 100.0% 8,669 8,669 100.0% 0.5%

M emphis Central 165 165 100.0% 7,293 7,293 100.0% 0.4%

Columbus Central 199 199 100.0% 6,692 6,692 100.0% 0.3%

Cincinnati Central 75 75 100.0% 4,919 4,919 100.0% 0.3%

Indianapolis Central 127 127 100.0% 4,469 4,469 100.0% 0.3%

Louisville Central 13 13 100.0% 425 425 100.0% 0.0%

T o tal re gio nal markets 1,804 1,804 100.0% 205 ,346 205 ,346 100.0% 10.7%

T o tal o ther markets (11 markets) Various 778 778 100.0% 79,351 79,351 100.0% 4.1%

T o tal land po rtfo lio - o wned and managed 10,902 10,699 98.1% $ 1,974,775 $ 1,923,234 97.4% 100.0%

Original C o st B asis $ 3,054,974 $ 3,003,433

(A) Ordered by our share of current book value.

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Capital Deployment

Land Portfolio – Summary and Roll Forward

Second Quarter 2012 Report

(dollars in thousands)

Investment at

Land Portfolio Summary Acres % of Total June 30, 2012 % of Total

Americas

Prologis wholly owned 6,712 61.6% $ 997,471 50.5%

Brazil Fund and related joint ventures 376 3.4% 80,328 4.1%

Total Americas 7,088 65.0% 1,077,799 54.6%

Europe

Prologis wholly owned 3,673 33.7% 736,182 37.3%

Asia

Prologis wholly owned 123 1.1% 147,409 7.5%

Prologis China Logistics Venture 1 18 0.2% 13,385 0.6%

Total Asia 141 1.3% 160,794 8.1%

Total land portfolio—owned and managed 10,902 100.0% $ 1,974,775 100.0%

Land Roll Forward—Owned and Managed Americas Europe Asia Total

As of March 31, 2012 $ 1,056,183 $ 740,840 $ 196,454 $ 1,993,477

Acquisitions 43,929 24,475 — 68,404

Dispositions (A) (3,444) (10,231) — (13,675)

Development starts (18,064) (2,104) (31,976) (52,144)

Infrastructure costs 22,087 1,967 2,683 26,737

Reclasses 7,548 —— 7,548

Effect of changes in foreign exchange rates and other (30,440) (18,765) (6,367) (55,572)

As of June 30, 2012 $ 1,077,799 $ 736,182 $ 160,794 $ 1,974,775

(A) Includes 58 acres that were sold for $14.2 million in proceeds.

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Private Capital

Detail Fund Information

Second Quarter 2012 Report

Fund Investment Information

Co-Investment Ventures Type Investment Type Geographic Focus Ownership Date Established Term

Prologis Institutional Alliance Fund II Core Consolidated US 28.2% June 2001 Closed end

Prologis AMS Core Consolidated US 38.5% June 2004 Closed end

Prologis Mexico Fondo Logistico (A) Core/Development Consolidated Mexico 20.0% July 2010 Closed end

Prologis European Properties Core Consolidated Europe 99.5% September 1999 Open end

Prologis North American Properties Fund I Core Unconsolidated US 41.3% June 2000 Closed end

Prologis North American Properties Fund XI (B) Core Unconsolidated US 20.0% February 2003 Closed end

Prologis Targeted U.S. Logistics Fund (A) Core Unconsolidated US 25.7% October 2004 Open end

Prologis North American Industrial Fund Core Unconsolidated US 23.1% March 2006 Open end

Prologis DFS Fund I Development Unconsolidated US 15.0% October 2006 Closed end

Prologis North American Industrial Fund III Core Unconsolidated US 20.0% July 2007 Closed end

Prologis SGP Mexico (A) Core Unconsolidated Mexico 21.6% December 2004 Closed end

Prologis Mexico Industrial Fund Core Unconsolidated Mexico 20.0% August 2007 Closed end

Prologis Brazil Logistics Partners Fund I (A)(C) Development Unconsolidated Brazil 50.0% December 2010 Closed end

Prologis Targeted Europe Logistics Fund (A) Core Unconsolidated Europe 33.7% June 2007 Open end

Prologis European Properties Fund II (A) Core Unconsolidated Europe 29.7% August 2007 Open end

Europe Logistics Venture 1 (A) Core Unconsolidated Europe 15.0% February 2011 Open end

Prologis Japan Fund 1 Core Unconsolidated Japan 20.0% June 2005 Closed end

Prologis China Logistics Venture 1 (A) Core/Development Unconsolidated China 15.0% March 2011 Closed end

Information by Unconsolidated Co-investment Venture (D):

Prologis’ Share

Second Gross Book Value of Second Annualized Total Other Tangible Prologis Investment In

(in thousands) Square Feet Quarter NOI Operating Buildings Debt Quarter NOI Pro forma NOI Debt Assets (Liabilities) and Advances To

Prologis North American Properties Fund I 6,239 $4,888 $266,618 $107,870 $2,019 $8,076 $44,550 $430 $33,260

Prologis North American Properties Fund XI (B) 100 (50) 13,789 769 (10) (40) 154 173 483

Prologis North American Industrial Fund 48,879 40,833 2,956,884 1,244,165 9,432 37,728 286,904 16,052 217,582

Prologis North American Industrial Fund III 17,655 13,393 1,279,399 648,929 2,679 10,716 129,786 371 24,445

Prologis Targeted U.S. Logistics Fund 42,680 52,525 3,960,488 1,521,325 13,519 54,076 391,592 2,920 660,568

Prologis Mexico Industrial Fund 9,500 8,799 591,382 214,149 1,760 7,040 42,830 1,292 52,685

Prologis SGP Mexico 6,374 5,278 408,690 217,073 1,140 4,560 46,888 (11,131) 38,200

Brazil Fund and related joint ventures 1,228 2,675 112,844—468 1,872 —36,889 92,056

Americas 132,655 128,341 9,590,094 3,954,280 31,007 124,028 942,704 46,996 1,119,279

Prologis European Properties Fund II 53,448 70,546 4,531,392 1,485,451 20,967 83,868 441,476 (48,003) 388,348

Prologis Targeted Europe Logistics Fund 11,669 20,141 1,441,065 628,534 6,795 27,180 212,067 (27,020) 233,600

Europe Logistics Venture I 926 1,067 80,005—160 640 —776 11,726

Europe 66,043 91,754 6,052,462 2,113,985 27,922 111,688 653,543 (74,247) 633,674

Prologis Japan Fund 1 7,263 24,081 1,696,583 927,419 4,817 19,268 185,484 15,652 158,256

Prologis China Logistics Venture 1 3,749 3,443 225,767 107,000 516 2,064 16,050 2,707 32,634

Asia 11,012 27,524 1,922,350 1,034,419 5,333 21,332 201,534 18,359 190,890

Total 209,710 $247,619 $17,564,906 $7,102,684 $64,262 $257,048 $1,797,781 $(8,892) $1,943,843

(A) These funds are or will be actively investing in new properties through acquisition and/or development activities, whereas the remaining funds do not expect to be actively investing in new properties. (B) During the first quarter, this co-investment venture sold all but one of its operating buildings.

(C) We have a 50% ownership interest in and consolidate an entity that in turn owns 50% of an entity that is accounted for on the equity method (“Brazil Fund”). The Brazil Fund develops industrial properties in Brazil. During 2011, the Brazil Fund sold 90% of three operating properties to a third party and retained a 10% ownership interest in the properties (“Brazil JVs”). Therefore, we effectively own 25% of the Brazil Fund and 2.5% of the operating properties in the Brazil JVs, which are included in our Owned and Managed operating pool.

(D) Values represent Prologis’ stepped up basis and may not be comparable to values reflected in the entities’ stand alone financial statements calculated on a different basis.

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Private Capital

Fund Operating and Balance Sheet Information

(dollars in thousands) Second Quarter 2012 Report

Americas Europe Asia Total

FFO and Net Earnings (Loss) of the Co-Investment Ventures, Aggregated (A)(B) For the Three Months Ended June 30, 2012

Rental income $ 185,789 $ 120,910 $ 35,021 $ 341,720

Rental expenses (47,522) (27,910) (7,524) (82,956)

Net operating income from properties 138,267 93,000 27,497 258,764

Other income (expense) 6,716 (3,851) (478) 2,387

Gains (losses) on dispositions of investments in real estate, impairment charges and early extinguishment of debt, net (25,093) (2,627) - (27,720)

General and administrative expenses (7,725) (2,872) (4,724) (15,321)

Interest expense (61,835) (26,842) (4,695) (93,372)

Current income tax expense (1,954) (2,312) (1,247) (5,513)

FFO of the unconsolidated co-investment ventures 48,376 54,496 16,353 119,225

Real estate related depreciation and amortization (76,064) (39,832) (15,852) (131,748)

Foreign currency exchange and unrealized derivative gains (losses), net (63) 1,656 (479) 1,114

Gains (losses) on dispositions of investments in real estate, net (509) 782 - 273

Deferred tax benefit (expense) and other income (expense), net 225 7,165 (873) 6,517

Net earnings (loss) of the unconsolidated co-investment ventures $ (28,035) $ 24,267 $ (851) $ (4,619)

Prologis’ Share of FFO and Net Earnings (Loss) of the Unconsolidated Co-Investment Ventures (A) For the Three Months Ended June 30, 2012

Prologis’ share of the co-investment ventures’ FFO $ 11,208 $ 16,496 $ 3,412 $ 31,116

Interest and preferred dividend income 105 - 111 216

FFO from unconsolidated co-investment ventures, net 11,313 16,496 3,523 31,332

Fees earned by Prologis 16,081 9,325 5,088 30,494

Total FFO recognized by Prologis, net $ 27,394 $ 25,821 $ 8,611 $ 61,826

Prologis’ share of the co-investment ventures’ net earnings (loss) $ (6,854) $ 7,172 $ 619 $ 937

Interest and preferred dividend income 105 - 111 216

Earnings from unconsolidated co-investment ventures, net (6,749) 7,172 730 1,153

Fees earned by Prologis 16,081 9,325 5,088 30,494

Total earnings recognized by Prologis, net $ 9,332 $ 16,497 $ 5,818 $ 31,647

Condensed Balance Sheet of the Unconsolidated Co-Investment Ventures, Aggregated (A)(B) As of June 30, 2012

Operating industrial properties, before depreciation $ 9,590,094 $ 6,052,462 $ 1,922,350 $ 17,564,906

Accumulated depreciation (927,286) (396,528) (64,642) (1,388,456)

Properties under development and land 147,983 19,749 32,301 200,033

Other assets 792,859 292,063 190,088 1,275,010

Total assets $ 9,603,650 $ 5,967,746 $ 2,080,097 $ 17,651,493

Third party debt $ 3,954,280 2,113,985 1,034,419 $ 7,102,684

Other liabilities 314,294 524,195 101,525 940,014

Total liabilities $ 4,268,574 $ 2,638,180 $ 1,135,944 $ 8,042,698

Weighted average ow nership 24.3% 30.4% 19.3% 25.7%

(A) Includes the unconsolidated co-investment ventures listed on the previous page.

(B) Represents the entire entity, not our proportionate share.

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Capitalization

Debt and Equity Summary

(dollars and shares in millions) Second Quarter 2012 Report

P ro lo gis

Unsecured Secured C onsolidat ed Tot al U nconsolidat ed Prologis

Senior C onvert ible C redit Ot her M ort gage Ent it ies C onsolidat ed Ent it ies Tot al Share of Pro lo g is

M aturity D ebt D ebt Facilit ies D ebt D ebt Tot al D ebt D ebt D ebt D ebt Tot al D ebt Share ( %)

2012 $0 $0 - $1 $12 $13 $54 $67 $313 $380 $127 33.4%

2013 376 482 - 1 114 973 628 1,601 1,656 3,257 1,846 56.7%

2014 374 - 280 631 666 1,951 1,035 2,986 817 3,803 3,175 83.5%

2015 287 460 858 1 212 1,818 22 1,840 976 2,816 2,110 74.9%

2016 640 - - 1 316 957 123 1,080 1,250 2,330 1,279 54.9%

2017 700 - - 1 570 1,271 3 1,274 706 1,980 1,430 72.2%

2018 900 - - 1 325 1,226 73 1,299 265 1,564 1,305 83.4%

2019 647 - - 1 522 1,170 - 1,170 216 1,386 1,233 89.0%

2020 687 - - 1 9 697 1 698 402 1,100 796 72.4%

2021 - - - - 167 167 1 168 333 501 254 50.7%

Thereafter - 10 - 10 144 164 1 165 139 304 190 62.5%

Subtotal 4,611 952 1,138 649 $3,057 10,407 1,941 12,348 7,073 19,421 13,745 70.8%

Unamortized net (discounts) premiums 74 (74) - - 58 58 28 86 30 116 91 78.7%

Subtotal 4,685 878 1,138 649 3,115 10,465 1,969 12,434 7,103 19,537 $13,836 70.8%

Third party share of debt - - - - - - (396) (396) (5,305) (5,701)

Prologis share of debt $4,685 $878 $1,138 $649 $3,115 $10,465 $1,573 $12,038 $1,798 $13,836

Prologis share of debt by local currency

Dollars $4,558 $878 $253 $31 $1,734 $7,454 $155 $7,609 $959 $ 9,395 $8,568

Euro - - 364 460 - 824 1,239 2,063 524 2,887 2,587

GBP - - 3 - - 3 176 179 117 533 296

Yen 127 - 518 158 1,359 2,162 - 2,162 186 1,617 2,348

Other - - - - 22 22 3 25 12 35 37

Prologis share of debt $4,685 $878 $1,138 $649 $3,115 $10,465 $1,573 $12,038 $1,798 $13,836

Weighted average interest rate (A) 5.7% 4.6% 1.7% 2.1% 3.8% 4.4% 4.5% 4.4% 4.6% 5.0% 4.4%

Weighted average remaining maturity in years 5.1 1.9 2.6 2.0 4.8 4.3 2.0 3.9 3.6 4.1 4.0

Market Equity Preferred Stock Liquidity

Dividend

Security Shares Price Value Series Rate Value

Common Stock 459.8 $33.23 $15,279 Series L 6.5% $49 Aggregate lender commitments $2,147

Partnership Units 3.2 $33.23 106 Series M 6.8% 58 Less:

Total 463.0 $15,385 Series O 7.0% 75 Borrow ings outstanding 1,138

Series P 6.9% 50 Outstanding letters of credit 68

Series Q 8.5% 100 Current availability $941

Series R 6.8% 125

Series S 6.8% 125 Unrestricted cash 294

7.1% $582 Total liquidity $1,235

(A) Interest rate is based on the effective rate (which includes the amortization of related premiums and discounts) and weighted based on borrowings outstanding.

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Capitalization

Debt Covenants and Other Metrics

(dollars in thousands) Second Quarter 2012 Report

Covenants as of June 30, 2012 (A)

Legacy AMB Indenture New Prologis Indenture

Covenant Actual Covenant Actual

Outstanding indebtedness to adjusted total assets <60% 40.3% <60% 40.3%

Fixed charge coverage ratio >1.5x 3.14x >1.5x 3.16x

Maximum secured debt to adjusted total assets <40% 14.4% <40% 14.4%

Unencumbered assets ratio to unsecured debt >150% 269.3% >150% 269.3%

Global Line

Covenant Actual

Maximum consolidated leverage to total asset value <60% 43.0%

Fixed charge coverage ratio >1.5x 3.03x

Unencumbered debt service coverage ratio >1.5x 3.76x

Maximum secured debt to total asset value <35% 15.7%

Minimum net w orth >$10.0 billion $15.0 billion

Debt Metrics (A) (B) (C)

2012

Second Quarter First Quarter

Debt as % of gross real estate assets 44.2% 43.6%

Secured debt as % of gross real estate assets 19.5% 18.5%

Unencumbered gross real estate assets to unsecured debt 227.5% 228.5%

Fixed charge coverage ratio 2.20x 2.11x

Debt/Core EBITDA 8.76x 8.86x

Encumbrances as of June 30, 2012

Consolidated: Unencumbered Encumbered Total

Operating properties $ 14,216,468 $ 9,225,926 $ 23,442,394

Development portfolio 656,561 - 656,561

Land 1,847,494 33,568 1,881,062

Other real estate investments 442,280 - 442,280

Notes receivable backed by real estate - 245,654 245,654

Assets held for sale 33,390 17,282 50,672

Total consolidated 17,196,193 9,522,430 26,718,623

Unconsolidated operating properties - Prologis’ share 975,733 3,544,001 4,519,734

Unconsolidated development portfolio and land - Prologis’ share 74,336 5,432 79,768

Gross real estate assets $ 18,246,262 $ 13,071,863 $ 31,318,125

Secured and Unsecured Debt as of June 30, 2012

Unsecured Secured

Debt Mortgage Debt Total

Prologis debt $ 7,349,393 $ 3,057,182 $ 10,406,575

Consolidated entities debt 581,864 1,359,608 1,941,472

Our share of unconsolidated entities debt 88,922 1,700,824 1,789,746

Total debt - at par 8,020,179 6,117,614 14,137,793

Third party share of consolidated debt (50,290) (342,955) (393,245)

Total Prologis share of debt - at par 7,969,889 5,774,659 13,744,548

Premium (discount) - consolidated 20,553 64,985 85,538

Third party share of premium (discount) (148) (2,451) (2,599)

Our share of premium (discount) - unconsolidated - 8,035 8,035

Total debt, net of premium (discount) $ 7,990,294 $ 5,845,228 $ 13,835,522

(A) These calculations are made in accordance with the respective debt agreements, may be different than other covenants or metrics presented and are not calculated in accordance with the

applicable SEC rules.

(B) All metrics include both consolidated and Prologis share of unconsolidated entities.

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Capitalization

Assets Under Management

Second Quarter 2012 Report

(dollars in millions)

$ 29,803 $ 43,927 $ 43,927

50,000

Committed Equity/Investment

45,000 $2,274

Asia

40,000 12.8%

Investors’ share of assets

AUM Private in JVs/funds

35,000 Preferred Shares Capital $11,850 Europe

$582 $21,446 31.2%

30,000 Prologis share of assets in

JVs/funds

25,000 Debt $7,322

$13,836

20,000

Americas

15,000 Direct owned and other Total 56.0%

assets Enterprise

Equity Cap $22.481 Value

10,000 $15,385 $29,803

5,000

Total Enterprise Value Assets Under Management Total AUM by Division

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Net Asset Value

Components

(in thousands, except for percentages and per square foot) Second Quarter 2012 Report

Real Estate Operations

Seco nd Quart er Seco nd Quart er A nnualized

St ab ilized C ash St ab ilized C ash St abilized C ash Percent

Sq uare Feet Gro ss B o o k V alue GB V p er Sq . Ft . N OI ( A ct ual) N OI ( Pro Fo rma) N OI Occup ied

C ON SOLID A T ED OP ER A T IN G P OR T F OLIO

Properties generating net operating income

Americas 226,046 $ 14,476,092 $ 64 $ 222,804 $ 222,804 $ 891,216 95.6%

Europe 68,988 5,002,429 73 90,807 90,807 363,228 93.6%

Asia 15,984 2,908,801 182 42,070 42,070 168,280 97.6%

Pro forma adjustment for mid-quarter acquisitions/development completions 483 1,932

Sub-total 311,018 22,387,322 72 355,681 356,164 1,424,656 95.3%

Properties generating net operating loss

Americas 11,639 670,632 58 (3,676) 31.2%

Europe 4,587 330,890 72 (1,053) 31.3%

Sub-total 16,226 1,001,522 62 (4,729) 31.2%

T o tal co nso lidated po rtfo lio 327,244 $ 23,388,844 $ 71 $ 350,952 $ 356,164 $ 1,424,656 92.1%

UN C ON SOLID A T ED OP ER A T IN G P OR T F OLIO (P ro lo gis Share)

P ro lo gis interest in unco nso lidated o perating po rtfo lio

Americas 31,849 $ 2,297,127 $ 72 $ 33,236 $ 33,236 $ 132,944 92.0%

Europe 19,960 1,844,997 92 27,770 27,770 111,080 94.7%

Asia 2,015 373,182 185 5,386 5,386 21,544 95.9%

Pro forma adjustment for mid-quarter acquisitions/development completions 294 1,176

P ro lo gis share o f unco nso lidated o perating po rtfo lio 53,824 $ 4,515,306 $ 84 $ 66,392 $ 66,686 $ 266,744 93.1%

T o tal o perating po rtfo lio 381,068 $ 27,904,150 $ 73 $ 417,344 $ 422,850 $ 1,691,400 92.2%

Development

Invest ment A nnualized Pro Percent

Sq uare Feet B alance TEI T EI p er Sq F t . Fo rma N OI Occup ied

C ON SOLID A T ED

P restabilized

Americas 1,720 $ 105,101 $ 124,716 $ 73 $ 9,444 39.2%

Europe 826 60,362 66,658 81 5,181 13.4%

Asia 1,143 140,521 153,777 135 11,418 10.5%

24 .5%

P ro perties under develo pment

Americas 3,218 36,293 146,138 45 11,046

Europe 1,025 27,536 57,450 56 5,178

Asia 2,644 286,748 481,593 182 33,105

T o tal co nso lidated po rtfo lio 10,576 $ 656,561 $ 1,030,332 $ 97 $ 75,372

UN C ON SOLID A T ED (P ro lo gis Share)

P ro lo gis interest in unco nso lidated develo pment po rtfo lio

Americas 709 $ 28,059 $ 60,949 $ 86 7,274

Europe 100 6,664 9,811 98 565

Asia 162 2,873 8,716 54 746

P ro lo gis share o f unco nso lidated develo pment po rtfo lio 971 $ 37,596 $ 79,476 $ 82 $ 8,585

T o tal develo pment po rtfo lio 11,547 $ 694,157 $ 1,109,808 $ 96 $ 83,957

D evelo pment P latfo rm (see develo pment pages)

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Net Asset Value

Components - Continued

(in thousands) Second Quarter 2012 Report

Balance Sheet and Other Items

A s o f June 30, 2012

CONSOLIDATED

Other assets

Cash and cash equivalents $ 293,631

Restricted cash 151,184

Deposits, prepaid assets and other tangible assets 529,287

Other real estate investments 442,280

Prologis’ share of value added operating properties 57,978

Accounts receivable 168,008

Notes receivable backed by real estate 245,654

Prologis receivable from unconsolidated co-investment ventures 24,837

Investments in and advances to other unconsolidated entities 276,329

Assets held for sale, net of liabilities 31,759

Total other assets $ 2,220,947

Other liabilities

Accounts payable and other current liabilities 600,019

Deferred income taxes 560,470

Value added tax and other tax liabilities 65,248

Tenant security deposits 174,100

Other liabilities 393,661

Noncontrolling interests 702,596

Total liabilities and noncontrolling interests $ 2,496,094

UNCONSOLIDATED

Prologis share of net assets (liabilities) $ (8,892)

Land

Investment B alance

Our share of original land basis $ 3,003,433

Current book value of land $ 1,881,062

Prologis share of book value of land in unconsolidated entities 42,172

Total $ 1,923,234

Private Capital / Development Management

Seco nd Quarter A nnualized

Private capital

Private capital revenue $ 30,993 $ 123,972

Private capital expenses (15,075) (60,300)

Profit margin $ 15,918 $ 63,672

Development management income $ 1,729 $ 6,916

Debt and Preferred Stock

A s o f June 30, 2012

Prologis debt - at par $ 10,406,575

Consolidated investee debt - at par 1,941,472

Prologis share of unconsolidated debt - at par 1,789,746

Subtotal debt - at par 14,137,793

Preferred stock 582,200

Total debt and preferred stock $ 14,719,993

Outstanding shares of common stock 459,820

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Notes and Definitions

Second Quarter 2012 Report

Please refer to our annual and quarterly financial statements filed with the Securities and Exchange

Commission on Forms 10-K and 10-Q and other public reports for further information about us and our business. Certain amounts from previous periods presented in the Supplemental Information have been reclassified to conform to the current presentation.

Our real estate operations segment represents the direct, long-term ownership of industrial properties. Our investment strategy in this segment focuses primarily on the ownership and leasing of industrial properties in global and regional markets. Our intent is to hold and use these properties; however, depending on market and other conditions, we may contribute or sell these properties to co-investment ventures or sell to third parties. When we contribute to an unconsolidated co-investment venture or sell properties we have developed, we recognize FFO to the extent the proceeds received exceed our original investment (i.e. prior to depreciation) and present the results as Gains (Losses) on Acquisition and Dispositions of Investments in Real Estate, Net. We have industrial properties that are currently under development and land available for development that are part of this segment as well. We may develop the land or sell to third parties, depending on market conditions, customer demand and other factors. The private capital segment represents the long-term management of unconsolidated co-investment ventures and other joint ventures.

In June 2011, AMB Property Corporation (“AMB”) and ProLogis combined through a merger of equals (the “Merger”). As a result of the Merger, each outstanding ProLogis common share was converted into 0.4464 shares of AMB common stock. At the time of the Merger, AMB changed its name to Prologis, Inc. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger resulted in a reverse acquisition in which AMB was considered the “legal acquirer” and ProLogis was considered the “accounting acquirer”. As such, the historical results of AMB have not been included in the 2011 results.

During the second quarter of 2011, we increased our ownership of ProLogis European Properties (“PEPR”), through open market purchases and a mandatory tender offer. Pursuant to the tender offer and open-market purchases made during the tender period, we acquired additional ordinary units and convertible preferred units of PEPR that were funded through borrowings under our existing credit facilities and a new €500 million bridge facility, which was subsequently repaid with proceeds received from our June 2011 equity offering. After completion of the tender offer, we began consolidating PEPR.

During the first quarter of 2012, we acquired our partner’s 63% interest in and now own 100% of Prologis North American Industrial Fund II. We also acquired our share of the assets and liabilities in Prologis California. These two transactions increased our real estate by $2.1 billion and debt by $1.0 billion.

Acquisition cost represents economic cost and not necessarily what is capitalized. It includes the initial purchase price; the effects of marking assumed debt to market; if applicable, all due diligence and closing costs; lease intangibles; and estimated acquisition capital expenditures including leasing costs to achieve stabilization.

Assets Held For Sale and Discontinued Operations. As of June 30, 2012, we had land and five operating properties that met the criteria to be presented as held for sale. The amounts included in Assets Held for Sale include real estate investment balances and the related assets and liabilities for each property.

During the six months ended June 30, 2012, we disposed of 95 properties aggregating 11.9 million square feet to third parties. During all of 2011, we disposed of land subject to ground leases and 94 properties aggregating 10.7 million square feet to third parties.

The operations of the properties held for sale and properties that were disposed of to third parties during a period, including the aggregate net gains or losses recognized upon their disposition, are

presented as discontinued operations in our Consolidated Statements of Operations for all periods presented. The income attributable to these properties was as follows (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 2012 2011

Rental income $ 4,784 $ 18,613 $ 19,790 $ 39,345

Rental expenses (2,484) (3,929) (5,855) (10,418)

Depreciation and amortization (1,008) (5,157) (4,962) (9,366)

Interest expense (95) (143) (160) (178)

Income attributable to disposed properties and assets

held for sale $ 1,197 $ 9,384 $ 8,813 $ 19,383

We include the gains or losses from disposition and impairment charges of land parcels and development properties in the calculation of FFO, including those classified as discontinued operations.

Assets Under Management (“AUM”) represents the estimated value of the real estate we own or manage through our consolidated entities and unconsolidated entities. We calculate AUM by adding the noncontrolling interests’ share of the estimated fair value of the real estate investment to our share of total market capitalization.

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Notes and Definitions

Second Quarter 2012 Report

Calculation of Per Share Amounts is as follows (in thousands, except per share amounts):

Three Months Ended Six Months Ended

June 30, June 30,

2012(a) 2011 (a) 2012 2011(a)

Net earnings (loss)

Net earnings (loss) $ (8,120)$ (151,471) $ 194,293$ (198,087)

Noncontrolling interest attributable to convertible limited partnership units—- 1,069 -

Adjusted net earnings (loss)—Diluted $ (8,120)$ (151,471) $ 195,362$ (198,087)

Weighted average common shares outstanding—Basic 459,878 307,756 459,549 281,384

Incremental weighted average effect on conversion of limited partnership

units—- 3,299 -

Incremental weighted average effect of stock awards—- 1,848 -

Weighted average common shares outstanding—Diluted 459,878 307,756 464,696 281,384

Net earnings (loss) per share—Basic $ (0.02) $ (0.49) $ 0.42 $ (0.70)

Net earnings (loss) per share—Diluted $ (0.02) $ (0.49) $ 0.42 $ (0.70)

FFO, as defined by Prologis

FFO, as defined by Prologis $ 172,671 $ 8,195 $ 434,743 $ 70,341

Noncontrolling interest attributable to convertible limited partnership units 66—1,069 136

Interest expense on exchangeable debt assumed converted 4,057—8,273 -

FFO—Diluted, as defined by Prologis $ 176,794 $ 8,195 $ 444,085 $ 70,477

Weighted average common shares outstanding—Basic 459,878 307,756 459,549 281,384

Incremental weighted average effect of conversion of limited partnership

units 3,250—3,299 807

Incremental weighted average effect of stock awards 1,838 750 1,848 709

Incremental weighted average effect of exchange of certain

exchangeable debt 11,879—11,879 -

Weighted average common shares outstanding—Diluted 476,845 308,506 476,575 282,900

FFO per share—Diluted, as defined by Prologis $ 0.37 $ 0.03 $ 0.93 $ 0.25

Core FFO

Core FFO $ 201,320 $ 109,662 $ 386,085 $ 184,069

Noncontrolling interest attributable to convertible limited partnership units 66 68 1,069 136

Interest expense on exchange debt assumed converted 4,057—8,273 -

Core FFO—Diluted $ 205,443 $ 109,730 $ 395,427 $ 184,205

Weighted average common shares outstanding—Basic 459,878 307,756 459,549 281,384

Incremental weighted average effect of conversion of limited partnership

units 3,250 1,269 3,299 807

Incremental weighted average effect of stock awards 1,838 750 1,848 709

Incremental weighted average effect of exchange of certain

exchangeable debt 11,879—11,879 -

Weighted average common shares outstanding—Diluted 476,845 309,775 476,575 282,900

Core FFO per share—Diluted $ 0.43 $ 0.35 $ 0.83 $ 0.65

(a) In periods with a net loss, the inclusion of any incremental shares is anti-dilutive, and therefore, both basic and diluted shares are the same.

Core EBITDA. We use Core EBITDA to measure both our operating performance and liquidity. We calculate Core EBITDA beginning with consolidated net earnings (loss) and removing the affect of interest, income taxes, depreciation and amortization, impairment charges, gains or losses from the acquisition or disposition of investments in real estate, gains or losses on early extinguishment of debt and derivative contracts (including cash charges), similar adjustments we make to our Core FFO (see definition below), and other non-cash charges or gains (such as stock based compensation amortization and unrealized gains or losses on foreign currency and derivative activity), including our share of these items from unconsolidated entities.

We consider Core EBITDA to provide investors relevant and useful information because it permits investors to view income from operations on an unleveraged basis before the effects of income tax, non-cash depreciation and amortization expense and other items (including stock-based compensation amortization and certain unrealized gains and losses), gains or losses from the acquisition or disposition of investments in real estate, items that affect comparability, and other significant non-cash items. We also adjusted Core EBITDA to include a pro forma adjustment to reflect a full period of NOI on the operating properties we acquire in a significant transaction, such as the Merger, PEPR acquisition, acquisition of our share of the assets from Prologis California and the acquisition of Prologis North American Industrial Fund II. In addition, we excluded Merger, Acquisition and Other Integration Expenses and costs associated with the natural disaster that occurred in first quarter 2011 in Japan. By excluding interest expense EBITDA allows investors to measure our operating performance independent of our capital structure and indebtedness and, therefore, allows for a more meaningful comparison of our operating performance to that of other companies, both in the real estate industry and in other industries. Gains and losses on the early extinguishment of debt generally included the costs of repurchasing debt securities. Although difficult to predict, these items may be recurring given the uncertainty of the current economic climate and its adverse effects on the real estate and financial markets. While not infrequent or unusual in nature, these items result from market fluctuations that can have inconsistent effects on our results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure our performance and the value of our long-term investment decisions and strategies.

As a liquidity measure, we believe that Core EBITDA helps investors to analyze our ability to meet interest payment obligations and to make quarterly preferred share dividends. We believe that investors should consider Core EBITDA in conjunction with net earnings (the primary measure of our performance) and the other required Generally Accepted Accounting Principles (“GAAP”) measures of our performance and liquidity, to improve their understanding of our operating results and liquidity, and to make more meaningful comparisons of our performance against other companies. By using Core EBITDA an investor is assessing the earnings generated by our operations, but not taking into account the eliminated expenses or gains incurred in connection with such operations. As a result, Core EBITDA has limitations as an analytical tool and should be used in conjunction with our required GAAP presentations. Core EBITDA does not reflect our historical cash expenditures or future cash requirements for working capital, capital expenditures distribution requirements or contractual commitments. Core EBITDA, also does not reflect the cash required to make interest and principal payments on our outstanding debt.

While EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, our computation of Core EBITDA may not be comparable to EBITDA reported by other companies. We compensate for the limitations of Core EBITDA by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of Core EBITDA and a reconciliation of Core EBITDA to consolidated net earnings (loss), a GAAP measurement.

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Notes and Definitions

Debt Metrics. See below for the detailed calculations for the three months ended for the respective

period (dollars in thousands):

Three Months Ended

June 30

Mar. 31

2012

Debt as a % of gross real estate assets:

Total debt - at par

$ 14,137,793

$ 14,128,299

Less: cash and cash equivalents

(293,631)

(343,736)

Total debt, net of cash

$ 13,844,162

$ 13,784,563

Gross real estate assets

$ 31,318,125

$ 31,608,444

Debt as a % of gross real estate assets

44.2%

43.6%

Secured debt as a % of gross real estate assets:

Secured debt - at par

$ 6,117,614

$ 5,839,392

Gross real estate assets

$ 31,318,125

$ 31,608,444

Secured debt as a % of gross real estate assets

19.5%

18.5%

Unencumbered gross real estate assets to unsecured debt:

Unencumbered gross real estate assets

$ 18,246,262

$ 18,942,823

Unsecured debt - at par

$ 8,020,179

$ 8,288,907

Unencumbered gross real estate assets to unsecured debt

227.5%

228.5%

Fixed Charge Coverage ratio:

Core EBITDA

$ 395,147

$ 388,869

Interest expense

$ 128,042

$ 133,447

Amortization and write-off of deferred loan costs

(4,175)

(4,956)

Amortization of debt premium (discount), net

9,753

6,737

Capitalized interest

12,946

13,619

Preferred stock dividends

10,049

10,567

Our share of fixed charges from unconsolidated entities

22,744

24,474

Total fixed charges

$ 179,359

$ 183,888

Fixed charge coverage ratio

2.20x

2.11x

Debt to Core EBITDA:

Total debt, net of cash

$ 13,844,162

$ 13,784,563

Core EBITDA-annualized

$ 1,580,588

$ 1,555,476

Debt to Core EBITDA ratio

8.76x

8.86x

Committed Equity/Investment is our estimate of the gross real estate, which could be acquired through the use of the equity commitments from our property fund or co-investment venture partners, plus our funding obligations and estimated debt capitalization.

FFO, as defined by Prologis; Core FFO; AFFO (collectively referred to as “FFO”). FFO is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the National Association of Real Estate Investment Trusts (“NAREIT”) has published a definition of FFO, modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business.

FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We believe net earnings computed under GAAP remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings computed under GAAP. Further, we believe our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and our operating performance.

NAREIT’s FFO measure adjusts net earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales, along with impairment charges, of previously depreciated properties. We agree that these NAREIT adjustments are useful to investors for the following reasons: (i) historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time.

NAREIT stated in its White Paper on FFO “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities.

(ii) REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate. The exclusion, in NAREIT’s definition of FFO, of gains and losses from the sales, along with impairment charges, of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods. We include the gains and losses from dispositions and impairment charges of land and development properties, as well as our proportionate share of the gains and losses from dispositions and impairment charges recognized by our unconsolidated entities, in our definition of FFO.

Our FFO Measures

At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors and financial analysts who review our operating results are best served by a defined FFO measure that includes other adjustments to net earnings computed under GAAP in addition to those included in the NAREIT defined measure of FFO. Our FFO measures are used by management in analyzing our business and the performance of our properties and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses.

We use these FFO measures, including by segment and region, to: (i) evaluate our performance and the performance of our properties in comparison to expected results and results of previous periods, relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii) budget and forecast future results to assist in the allocation of resources; (iv) assess our performance as compared to similar real estate companies and the industry in general; and (v) evaluate how a specific potential investment will impact our future results. Because we make decisions with regard to our performance with a long-term outlook, we believe it is appropriate to remove the effects of short-term items that we do not expect to affect the underlying long-term performance of the properties. The long-term performance of our properties is principally driven by rental income. While not infrequent or unusual, these additional items we exclude in calculating FFO, as defined by Prologis, are subject to significant fluctuations from period to period that cause both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook.

Second Quarter 2012 Report

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Notes and Definitions

Second Quarter 2012 Report

We use our FFO measures as supplemental financial measures of operating performance. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

FFO, as defined by Prologis

To arrive at FFO, as defined by Prologis, we adjust the NAREIT defined FFO measure to exclude: (i) deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries; (ii) current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in GAAP earnings that is excluded from our defined FFO measure; (iii) foreign currency exchange gains and losses resulting from debt transactions between us and our foreign consolidated subsidiaries and our foreign unconsolidated entities; (iv) foreign currency exchange gains and losses from the remeasurement (based on current foreign currency exchange rates) of certain third party debt of our foreign consolidated subsidiaries and our foreign unconsolidated entities; and (v) mark-to-market adjustments associated with derivative financial instruments.

We calculate FFO, as defined by Prologis for our unconsolidated entities on the same basis as we calculate our FFO, as defined by Prologis.

We believe investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.

Core FFO

In addition to FFO, as defined by Prologis, we also use Core FFO. To arrive at Core FFO, we adjust FFO, as defined by Prologis, to exclude the following recurring and non-recurring items that we recognized directly or our share recognized by our unconsolidated entities to the extent they are included in FFO, as defined by Prologis:

(i) gains or losses from acquisition, contribution or sale of land or development properties; (ii) income tax expense related to the sale of investments in real estate; (iii) impairment charges recognized related to our investments in real estate (either directly or through our investments in unconsolidated entities) generally as a result of our change in intent to contribute or sell these properties; (iv) impairment charges of goodwill and other assets; (v) gains or losses from the early extinguishment of debt; (vi) merger, acquisition and other integration expenses; and (vii) expenses related to natural disasters

We believe it is appropriate to further adjust our FFO, as defined by Prologis for certain recurring items as they were driven by transactional activity and factors relating to the financial and real estate markets, rather than factors specific to the on-going operating performance of our properties or investments. The impairment charges we recognized were primarily based on valuations of real estate, which had declined due to market conditions, that we no longer expected to hold for long-term investment. We currently have and have had over the past several years a stated priority to strengthen our financial position. We expect to accomplish this by reducing our debt, our investment in certain low yielding assets, such as land that we decide not to develop and our exposure to foreign currency exchange fluctuations. As a result, we have sold to third parties or contributed to unconsolidated entities real estate properties that, depending on market conditions, might result in a gain or loss. The impairment charges related to goodwill and other assets that we have recognized were similarly caused by the decline in the real estate markets. Also in connection with our stated priority to reduce debt and extend debt maturities, we have purchased portions of

our debt securities. As a result, we recognized net gains or losses on the early extinguishment of certain debt due to the financial market conditions at that time.

We have also adjusted for some non-recurring items. The merger, acquisition and other integration expenses include costs we incurred in 2011 and that we expect to incur in 2012 associated with the Merger and PEPR Acquisition and the integration of our systems and processes. We have not adjusted for the acquisition costs that we have incurred as a result of routine acquisitions but only the costs associated with significant business combinations that we would expect to be infrequent in nature. Similarly, the expenses related to the natural disaster in Japan that we recognized in 2011 are a rare occurrence but we may incur similar expenses again in the future.

We analyze our operating performance primarily by the rental income of our real estate and the revenue driven by our private capital business, net of operating, administrative and financing expenses. This income stream is not directly impacted by fluctuations in the market value of our investments in real estate or debt securities. As a result, although these items have had a material impact on our operations and are reflected in our financial statements, the removal of the effects of these items allows us to better understand the core operating performance of our properties over the long-term.

We use Core FFO, including by segment and region, to: (i) evaluate our performance and the performance of our properties in comparison to expected results and results of previous periods, relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii) budget and forecast future results to assist in the allocation of resources; (iv) provide guidance to the financial markets to understand our expected operating performance; (v) assess our operating performance as compared to similar real estate companies and the industry in general; and (vi) evaluate how a specific potential investment will impact our future results. Because we make decisions with regard to our performance with a long-term outlook, we believe it is appropriate to remove the effects of items that we do not expect to affect the underlying long-term performance of the properties we own. As noted above, we believe the long-term performance of our properties is principally driven by rental income. We believe investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.

AFFO

To arrive at AFFO, we adjust Core FFO to further exclude; (i) straight-line rents; (ii) amortization of above- and below-market lease intangibles; (iii) recurring capital expenditures; (iv) amortization of management contracts; (v) amortization of debt premiums and discounts, net of amounts capitalized, and; (vi) stock compensation expense.

We believe AFFO provides a meaningful indicator of our ability to fund cash needs, including cash distributions to our stockholders.

Limitations on Use of our FFO Measures

While we believe our defined FFO measures are important supplemental measures, neither NAREIT’s nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, they are two of many measures we use when analyzing our business. Some of these limitations are:

??The current income tax expenses that are excluded from our defined FFO measures represent the taxes that are payable.

? Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of industrial properties are not reflected in FFO.

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Notes and Definitions

Second Quarter 2012 Report

Gains or losses from property acquisitions and dispositions or impairment charges related to expected dispositions represent changes in the value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of acquired or disposed properties arising from changes in market conditions.

The deferred income tax benefits and expenses that are excluded from our defined FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our defined FFO measures do not currently reflect any income or expense that may result from such settlement.

The foreign currency exchange gains and losses that are excluded from our defined FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.

The impairment charges of goodwill and other assets that we exclude from Core FFO, have been or may be realized as a loss in the future upon the ultimate disposition of the related investments or other assets through the form of lower cash proceeds.

The gains and losses on extinguishment of debt that we exclude from our Core FFO, may provide a benefit or cost to us as we may be settling our debt at less or more than our future obligation.

The Merger, acquisition and other integration expenses and the natural disaster expenses that we exclude from Core FFO are costs that we have incurred.

We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. To assist investors in compensating for these limitations, we reconcile our defined FFO measures to our net earnings computed under GAAP. This information should be read with our complete financial statements prepared under GAAP.

Fixed Charge Coverage is defined as Core EBITDA divided by total fixed charges. Fixed charges consist of net interest expense adjusted for amortization of finance costs and debt discount (premium), capitalized interest, and preferred stock dividends. Prologis uses fixed charge coverage to measure its liquidity. Prologis believes that the fixed charge coverage is relevant and useful to investors because it allows fixed income investors to measure Prologis’ ability to meet its interest payments on outstanding debt, make distributions to its preferred unitholders and pay dividends to its preferred stockholders. Prologis’ computation of fixed charge coverage is not calculated in accordance with applicable SEC rules and may not be comparable to fixed charge coverage reported by other companies.

General and Administrative Expenses (“G&A”) consisted of the following (in thousands):

Three Months Ended June 30, Six months Ended June 30,

2012 2011 2012 2011

Gross G&A expense $90,667 $82,060 $192,481 $148,604

Reported as rental expense (8,850 (5,154) (17,008) (10,065)

Reported as private capital expenses (15,327) (13,470) (31,943) (25,308)

Net G&A $51,415 $51,840 $111,574 $91,023

Global Markets comprise the largest, most liquid markets benefiting from demand tied to global trade. These markets are defined by large population centers with high consumption per capita and typically feature major seaports, airports, and other transportation infrastructure tied to global trade. While initial returns might be lower, global markets tend to outperform overall markets in terms of growth and total return.

Interest Expense consisted of the following (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 2012 2011

Gross interest expense $ 146,470 $ 112,558 $ 295,251 $ 201,581

Amortization of discount (premium), net (9,753) 5,069 (16,489) 12,908

Amortization of deferred loan costs 4,175 7,765 9,131 12,761

Interest expense before capitalization 140,892 125,392 287,893 227,250

Capitalized amounts (12,946) (12,476) (26,565) (23,807)

Net interest expense $ 127,946 $ 112,916 $ 261,328 $ 203,443

Market Equity is defined as the total number of outstanding shares of our common stock and common limited partnership units multiplied by the closing price per share of our common stock at period end.

Merger, Acquisition and Other Integration Expenses. In connection with the Merger, we have incurred significant transaction, integration, and transitional costs. These costs include investment banker advisory fees; legal, tax, accounting and valuation fees; termination and severance costs (both cash and stock based compensation awards) for terminated and transitional employees; system conversion; and other integration costs. Certain of these costs were obligations of AMB and were expensed prior to the closing of the Merger by AMB. The remainder of the costs are being expensed by us as incurred, which in some cases will be through the end of 2012. In addition, we have included costs associated with the acquisition of a controlling interest in PEPR and reduction in workforce charges associated with dispositions made in 2011. The following is a breakdown of the costs incurred:

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 2012 2011

Termination, severance and transitional employee costs $ 11,852 $ 30,530 $ 19,537 $ 34,337

Professional fees 6,738 39,308 8,954 41,489

Office closure, travel and other costs 2,596 22,345 3,423 22,345

Write-off of deferred loan costs — 10,869 — 10,869

Total $ 21,186 $ 103,052 $ 31,914 $ 109,040

Net Asset Value (“NAV”). We consider NAV to be a useful supplemental measure of our operating performance because it enables both management and investors to estimate the fair value of our business. The assessment of the fair value of a particular segment of our business is subjective in that it involves estimates and can be calculated using various methods. Therefore, in this supplemental report, we have presented the financial results and investments related to our business segments that we believe are important in calculating our NAV but have not presented any specific methodology nor provided any guidance on the assumptions or estimates that should be used in the calculation.

The components of NAV do not consider the potential changes in rental and fee income streams or the franchise value associated with our global operating platform, private capital platform, or development platform.

Net Gains on Acquisitions and Dispositions of Investments in Real Estate includes the gains we recognized from the acquisition of our share of the real estate properties in one of our unconsolidated co-investment ventures, Prologis California in the first quarter of 2012.

Net Operating Income (“NOI”) represents rental income less rental expenses.

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Notes and Definitions

Operating Portfolio includes stabilized operating industrial properties we own or that we manage and are owned by an unconsolidated investee accounted for by the equity method of accounting.

Operating Segments – Real Estate Operations represents the direct long-term ownership of industrial properties, including land and the development of properties.

Operating Segments – Private Capital represents the management of unconsolidated co-investment ventures and other joint ventures and the properties they own.

Pre-stabilized Development represents properties that are complete but have not yet reached Stabilization.

Pro forma NOI reflects the NOI for a full quarter of operating properties that were acquired, contributed or stabilized during the quarter. Pro forma NOI for the properties in our development portfolio is based on current total expected investment and an estimated stabilized yield.

A reconciliation of our rental income and rental expenses, computed under GAAP, to adjusted net operating income (NOI) for the operating portfolio for purposes of the Net Asset Value calculation is as follows:

(in thousands) Reconciliation of NOI Rental income ................................................................................................................................... $ 488,026 Rental expenses ............................................................................................................................... (132,031) NOI.................................................................................................................................................... 355,995 Net termination fees and adjustments (a) ........................................................................................ (1,097) Less: Actual NOI for development portfolio and other ..................................................................... (8,597) Less: NOI on contributed properties (b) ........................................................................................... (117)

Adjusted NOI for operating portfolio owned at June 30, 2012 346,184 Straight-lined rents and amortization of lease intangibles (c) .......................................................... 4,768

Stabilized cash NOI for operating portfolio owned at June 30, 2012 $ 350,952

(a) Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability, if any, that has been previously recognized under GAAP. Removing the net termination fees from rental income allows for the calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring operating performance.

(b) The actual NOI for properties that were contributed and not part of discontinued operations during the three- month period is removed.

(c) Straight-lined rents, net of free rent amounts, and amortization of above and below market leases are removed from rental income computed under GAAP to allow for the calculation of a cash yield.

Regional Markets, similar to global markets, also benefit from large-population centers and demand. They are located at key crossroads in the supply chain and/or near economic centers for leading national or global industries. Our assets reflect the highest quality class-A product in that market and are often less supply- constrained and focus on delivering bulk goods to customers.

Second Quarter 2012 Report

Rental Income includes the following (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2012 2011 2012 2011

Rental income $ 381,560 $215,472 $ 743,620 $356,430

Amortization of lease intangibles (11,040) (1,902) (20,450) (2,099)

Rental expense recoveries 100,937 56,303 192,566 99,011

Straight-lined rents 16,569 9,143 34,784 20,314

Total $ 488,026 $279,016 $ 950,520 $473,656

Same Store. We evaluate the operating performance of the industrial operating properties we own and manage using a “same store” analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of changes in the composition of the portfolio on performance measures. We include all consolidated properties, and properties owned by property funds and joint ventures that are managed by us and in which we have an equity interest (referred to as “unconsolidated entities”), in our same store analysis. We have defined the same store portfolio, for the quarter ended June 30, 2012, as those operating properties in operation at January 1, 2011 that were in operation throughout the full periods in both 2011 and 2012 either by Prologis or AMB or their unconsolidated entities. We have removed all properties that were disposed of to a third party from the population for both periods. We believe the factors that impact rental income, rental expenses and net operating income in the same store portfolio are generally the same as for the total operating portfolio. In order to derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the current exchange rate to translate from local currency into U.S. dollars, for both periods, to derive the same store results.

Same Store Average Occupancy represents the average occupied percentage for the period.

Same Store Rental Expense represents gross property operating expenses. In computing the percentage change in rental expenses for the same store analysis, rental expenses include property management expenses for our direct owned properties based on the property management fee that has been computed as provided in the individual agreements under which our wholly owned management companies provide property management services to each property (generally, the fee is based on a percentage of revenues).

Same Store Change in Rental Rate represents the change in effective rental rates (average rate over the lease term) on new leases signed during the period as compared with the previous effective rental rates in that same space.

Same Store Rental Income includes the amount of rental expenses that are recovered from customers under the terms of their respective lease agreements. In computing the percentage change in rental income for the same store analysis, rental income (as computed under GAAP) is adjusted to remove the net termination fees recognized for each period. Removing the net termination fees for the same store calculation allows us to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance.

Stabilization is defined when a property that was developed has been completed for one year or is 90% occupied. Upon stabilization, a property is moved into our operating portfolio.

Tenant Retention is the square footage of all leases rented by existing tenants divided by the square footage of all expiring and rented leases during the reporting period, excluding the square footage of tenants that default or buy-out prior to expiration of their lease, short-term tenants and the square footage of month-to-month leases.

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Notes and Definitions

Second Quarter 2012 Report

Total Estimated Investment (“TEI”) represents total estimated cost of development or expansion, including land, development and leasing costs. TEI is based on current projections and is subject to change. Non-U.S. Dollar investments are translated to U.S. Dollars using the exchange rate at period end or the date of development start for purposes of calculating development starts in any period.

Total Market Capitalization is defined as market equity plus our share of total debt and preferred stock.

Turnover Costs represent the costs incurred in connection with the signing of a lease, including leasing commissions and tenant improvements. Tenant improvements include costs to prepare a space for a new tenant and for a lease renewal with the same tenant. It excludes costs to prepare a space that is being leased for the first time (i.e. in a new development property).

Value-Added Acquisitions (“VAA”) are properties which Prologis acquires as part of management’s current belief that the discount in pricing attributed to the operating challenges of the property could provide greater returns, once stabilized, than the returns of stabilized properties, which are not value added acquisitions. Value Added Acquisitions must have one or more of the following characteristics: (i) existing vacancy in excess of 20%; (ii) short-term lease roll-over, typically during the first two years of ownership; (iii) significant capital improvement requirements in excess of 10% of the purchase price and must be invested within the first two years of ownership

Value-Added Conversions (“VAC”) represent the repurposing of industrial properties to a higher and better use, including office, residential, retail, research and development, data center, self storage or manufacturing with the intent to ultimately sell the property once repositioned. Activities required to prepare the property for conversion to a higher and better use may include such activities as re-zoning, re-designing, re-constructing, and re-tenanting. The economic gain on sales of value added conversions represents the amount by which the sales proceeds exceed our original cost in dollars and percentages.

Value Creation represents the value that will be created through our development and leasing activities at stabilization. We calculate value by estimating the NOI that the property will generate at Stabilization and applying an estimated stabilized cap rate applicable to that property. The value creation is calculated as the amount by which the estimated value exceeds our total expected investment and does not include any fees or promotes we may earn.

Weighted Average Estimated Stabilized Yield is calculated as NOI adjusted to reflect stabilized occupancy divided by Acquisition Cost or TEI, as applicable.