Earnings Release and Supplemental Information
Unaudited
First Quarter 2013
Table of Contents
Supplemental 1Q 2013
Overview
Press Release 1
Highlights
Company Profile 4
Company Performance 5
Financial Information
Consolidated Balance Sheets 6
Consolidated Statements of Operations 7
Reconciliation of Net Earnings to FFO 8
Prologis Park Apodaca, Monterrey, Mexico
EBITDA Reconciliation 9
Pro-rata Information 10
Operations Overview
Operating Portfolio 12
Operating Metrics 15
Customer Information 17
Capital Deployment
Building Dispositions and Contributions 18
Third Party Building Acquisitions 19
Development Starts 20
Development Portfolio 21
Land Portfolio 22
Prologis Park Ichikawa 1, Ichikawa, Japan Private Capital
Detail Information 24
Operating and Balance Sheet Information 25
Capitalization
Debt and Equity Summary 26
Debt Covenants and Other Metrics 27
Assets Under Management 28
Net Asset Value
Components 29
Notes and Definitions 31
Prologis Park Bratislava, Bratislava, Slovakia
Cover: Prologis Park Zama 1, Zama, Japan Copyright © 2013 Prologis
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2013 Prologis
1
Prologis, Inc. Announces First Quarter 2013 Earnings Results
-
Positive rent change on rollover for the first time in 17 quarters
- -
Completes J-REIT IPO and European joint venture -
-
Significantly improves financial position –
SAN FRANCISCO (April 24, 2013) – Prologis, Inc. (NYSE: PLD), the
leading global owner, operator and developer of industrial real estate,
today reported results for the first quarter 2013.
Core funds from operations (Core FFO) per fully diluted share was
$0.40 for the first quarter compared to $0.40 for the same period in
2012.
Net earnings per fully diluted share was $0.57 for the first quarter
compared to net earnings of $0.44 for the same period in 2012. In both
periods, net earnings for the quarter were principally due to gains on
real estate transactions.
Operating Portfolio Metrics
The company leased 35.8 million square feet (3.3 million square meters)
in its combined operating and development portfolios in the first quarter.
Prologis’ operating portfolio was 93.7 percent occupied on March 31,
2013. Tenant retention in the quarter was 78.0 percent. GAAP rental
rates on leases signed in the first quarter increased by 2.0 percent from
in-place rents. During the first quarter, same-store net operating income
(NOI) increased 0.3 percent, and on an adjusted cash basis 1.8 percent.
“We concluded several priorities in the first quarter and are beginning to
capitalize on growth opportunities,” said Hamid R. Moghadam, chairman
and CEO, Prologis. “Real estate fundamentals are solid and demand for
our product is leading to rental growth. For the first time in 17 quarters,
rent change on rollovers is positive.”
Dispositions and Contributions
Prologis completed $5.3 billion in contributions and dispositions in the
first quarter, of which $3.3 billion was Prologis’ share. Notable
transactions include approximately:
•
$3.1 billion in contributions related to the formation of Prologis
European Logistics Partners Sàrl (PELP), of which 50 percent
was the company’s share; and
•
$1.9 billion in contributions to Nippon Prologis REIT, of which
$1.6 billion was the company’s share; and
•
$203 million of third-party building and land dispositions, of
which $99 million was the company’s share.
Prologis realized value creation of $247 million associated with
contribution and disposition activity in the quarter.
Development Starts and Building Acquisitions
Committed capital during the first quarter totaled approximately $436
million, of which $314 million was Prologis' share, including:
•
Development starts of $313 million with an estimated
development margin of 21.8 percent. Prologis’ share was $218
million and the company’s estimated share of value creation
upon stabilization was $39 million.
•
Acquisitions of $123 million, including $109 in land and land
infrastructure, as well as $14 million in buildings. Prologis’ share
included $96 million.
At quarter end, Prologis' global development pipeline comprised 23.7
million square feet (2.2 million square meters), with a total expected |
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2013 Prologis
investment of $2.0 billion, of which Prologis' share was $1.8
billion. The company’s share of estimated value creation at
stabilization is expected to be $371 million, with a weighted
average estimated stabilized yield of 7.8 percent and a margin
of approximately 21.6 percent.
Capital Markets
During the first quarter, Prologis completed approximately $3.0
billion of capital markets activity including debt financings, re-
financings, and pay-downs.
As a result, and in combination with the significant disposition
and contribution activity, the company:
Lowered its share of total debt by $2.4 billion;
Improved the company’s debt as a percent of gross
real estate assets to 37.5 percent and debt to adjusted
EBITDA to 7.52 times; and
Increased its USD net equity to 66 percent.
“During the quarter, we made considerable progress
strengthening our financial position and reducing our foreign
net equity exposure,” said Thomas Olinger, chief financial
officer, Prologis. “With a strong balance sheet in place, we are
well positioned to grow our company strategically.”
Subsequent to quarter end, the company redeemed $482
million of its outstanding preferred stock.
Guidance for 2013
Prologis maintains its full-year 2013 Core FFO guidance range
of $1.60 to $1.70 per diluted share. The company also expects
to recognize net earnings, for GAAP purposes, of $0.55 to
$0.65 per share.
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, gains (losses) recognized from real estate
transactions and early extinguishment of debt or redemption of
preferred stock, impairment charges, deferred taxes, and unrealized
gains or losses on foreign currency or derivative activity.
The difference between the company's Core FFO and net earnings
guidance for 2013 predominantly relates to real estate depreciation and
recognized gains on real estate transactions.
Webcast and Conference Call Information
The company will host a webcast /conference call to discuss quarterly
results, current market conditions and future outlook today, April 24, 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 page of the Prologis Investor Relations website
(http://ir.prologis.com). Interested parties also can participate via
conference call by dialing
+1 877-256-7020 (from the U.S. and Canada toll free) or +1
973-409-9692 (from all other countries) and enter conference code 26751768.
A telephonic replay will be available from April 24 through May 24 at +1
855-859-2056 (from the U.S. and Canada) or +1 404-537-3406 (from
all other countries), with conference code 26751768. The webcast
replay will be posted when available in the "Financial Information"
section of Investor Relations on the Prologis 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 March 31, 2013, Prologis owned or
had investments in, on a consolidated basis or through unconsolidated
joint ventures, properties and development projects expected to total
approximately 559 million square feet (51.9 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
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2013 Prologis
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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
Media Contacts
Tracy
Ward,
Tel:
+1
415
733
9565,
tward@prologis.com,
San
Francisco
Atle
Erlingsson,
Tel:
+1
415
733
9495,
aerlingsson@prologis.com,
San
Francisco |
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 March 31, 2013, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects totaling 559 million square feet (51.9 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.
[Graphic Appears Here]
AMERICAS (4 countries) EUROPE (14 countries) ASIA (3 countries) TOTAL
Number of operating portfolio buildings 2,333 588 75 2,996
Operating Portfolio (msf) 361 136 28 525
Development Portfolio (msf) 15 2 7 24
Other (msf) (A) 8 1 1 10
Total (msf) 384 139 36 559
Development portfolio TEI (millions) $1,100 $152 $ 785 $2,037
Land (acres) 7,314 3,449 206 10,969
Land book value (millions) (B) $1,061 $670 $ 136 $1,867
(A) Generally represents properties in which Prologis has an ownership interest but does not manage (6 msf) and other properties owned by Prologis (4 msf), which includes value added properties (3 msf).
(B) Original cost basis for the total land portfolio is $2.9 billion.
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Highlights
Company Performance
(dollars in thousands, except per share data)
Revenues
Net earnings attributable to common stockholders FFO, as defined by Prologis Core FFO
AFFO
Adjusted EBITDA
Per common share—diluted:
Net earnings attributable to common stockholders FFO, as defined by Prologis Core FFO
Core FFO (in millions)
$250 $232 $201 $196 $200 $188
$150 $100 $50
$0
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Supplemental 1Q 2013
Three months ended March 31, 2013 2012 $ 490,616 $ 479,430
265,416 202,412 357,800 262,072 187,937 184,765
135,977 133,823
337,668 377,063
$ 0.57 $ 0.44
0.76 0.56
0.40 0.40
Operating Portfolio—Owned and Managed Period Ending Occupancy %
100%
95% 94.0%
93.7%
92.4% 93.1% 90%
85%
Q2 2012 Q3 2012 Q4 2012 Q1 2013
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Financial Information
Consolidated Balance Sheets
(in thousands) Supplemental 1Q 2013
March 31, 2013 December 31, 2012 Assets:
Investments in real estate assets:
Operating properties $ 17,521,075 $ 22,608,248 Development portfolio 884,352 951,643 Land 1,754,053 1,794,364 Other real estate investments 436,328 454,868 20,595,808 25,809,123 Less accumulated depreciation 2,292,946 2,480,660 Net investments in properties 18,302,862 23,328,463 Investments in and advances to unconsolidated entities 3,635,214 2,195,782 Notes receivable backed by real estate 188,000 188,000 Assets held for sale 25,391 26,027 Net investments in real estate 22,151,467 25,738,272 Cash and cash equivalents 785,359 100,810 Restricted cash 48,605 176,926 Accounts receivable 139,691 171,084 Other assets 950,177 1,123,053
Total assets $ 24,075,299 $ 27,310,145
Liabilities and Equity:
Liabilities:
Debt $ 9,074,123 $ 11,790,794 Preferred stock at redemption value 482,500 -Accounts payable, accrued expenses, and other liabilities 1,308,143 1,746,015 Total liabilities 10,864,766 13,536,809 Equity: Stockholders’ equity: Preferred stock 100,000 582,200 Common stock 4,624 4,618 Additional paid-in capital 16,461,486 16,411,855 Accumulated other comprehensive loss (503,786) (233,563) Distributions in excess of net earnings (3,561,429) (3,696,093) Total stockholders’ equity 12,500,895 13,069,017 Noncontrolling interests 658,871 653,125 Noncontrolling interests—limited partnership unitholders 50,767 51,194 Total equity 13,210,533 13,773,336
Total liabilities and equity $ 24,075,299 $ 27,310,145
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Financial Information
Consolidated Statements of Operations
(in thousands, except per share amounts)
Supplemental 1Q 2013
Three Months Ended March 31,
2013 2012
Revenues:
Rental income $ 454,789 $ 443,960
Private capital revenue 33,635 32,357
Development management and other income 2,192 3,113
Total revenues 490,616 479,430
Expenses:
Rental expenses 133,919 118,731
Private capital expenses 19,909 16,881
General and administrative expenses 56,197 60,159
Depreciation and amortization 177,266 180,280
Other expenses 4,353 4,335
Merger, acquisition and other integration expenses - 10,728
Impairment of real estate properties - 3,185
Total expenses 391,644 394,299
Operating income 98,972 85,131
Other income (expense):
Earnings from unconsolidated co-investment ventures, net 24,768 13,995
Interest income 4,213 5,427
Interest expense (115,028) (133,056)
Gain on acquisitions and dispositions of investments in real estate, net 338,845 267,771
Foreign currency and derivative gains (losses) and other income (expenses), net 8,298 (27,101)
Gain (loss) on early extinguishment of debt, net (17,351) 5,419
Impairment of other assets - (16,135)
Total other income (expense) 243,745 116,320
Earnings before income taxes 342,717 201,451
Income tax expense - current and deferred 51,866 12,124
Earnings from continuing operations 290,851 189,327
Discontinued operations:
Income attributable to disposed properties and assets held for sale 247 12,521
Net gain on dispositions 5,834 11,249
Total discontinued operations 6,081 23,770
Consolidated net earnings 296,932 213,097
Net earnings attributable to noncontrolling interests (12,103) (118)
Net earnings attributable to controlling interests 284,829 212,979
Preferred stock dividends (10,305) (10,567), -
Net earnings attributable to common stockholders $ 265,416 $ 202,412
Weighted average common shares outstanding - Diluted (A) 477,059 476,107
Net earnings per share attributable to common stockholders - Diluted $ 0.57 $ 0.44
(A) See Calculation of Per Share Amounts in the Notes and Definitions.
7 Copyright © 2013 Prologis
Financial Information
Reconciliations of Net Earnings to FFO
(in thousands) Supplemental 1Q 2013
Three Months Ended March 31,
2013 2012 Reconciliation of net earnings to FFO
Net earnings attributable to common stockholders $ 265,416 $ 202,412 Add (deduct) NAREIT defined adjustments: Real estate related depreciation and amortization 171,017 176,171 Net gain on non-FFO dispositions and acquisitions (102,457) (162,745) Reconciling items related to noncontrolling interests (2,941) (12,054) Our share of reconciling items included in earnings from unconsolidated entities 25,483 34,538
Subtotal-NAREIT defined FFO 356,518 238,322
Add (deduct) our defined adjustments:
Unrealized foreign currency and derivative losses (gains), net (638) 24,236 Deferred income tax benefit 2,134 1,051 Our share of reconciling items included in earnings from unconsolidated entities (214) (1,537)
FFO, as defined by Prologis 357,800 262,072
Adjustments to arrive at Core FFO, including our share of unconsolidated entities:
Net gain on acquisitions and dispositions of investments in real estate, net of income taxes (192,416) (104,731) Loss (gain) on early extinguishment of debt and redemption of preferred stock, net 26,459 (5,419) Our share of reconciling items included in earnings from unconsolidated entities (3,906) 2,795 Impairment charges — 19,320 Merger, acquisition and other integration expenses — 10,728 Adjustments to arrive at Core FFO (169,863) (77,307)
Core FFO $ 187,937 $ 184,765
Adjustments to arrive at Ad djus justed FFO O (“AFFO”), inc ncluding our shar are of unconsolidated enti entities:
Straight-lined rents and amortization of lease intangibles (7,884) (11,347) Property improvements (14,288) (13,414) Tenant improvements (20,388) (23,987) Leasing commissions (13,400) (10,333) Amortization of management contracts 1,615 1,216 Amortization of debt discounts/(premiums) and financing costs, net of capitalization (7,002) (1,389) Stock compensation expense 9,387 8,312
AFFO $ 135,977 $ 133,823
Common stock dividends $ 130,753 $ 130,080
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Financial Information
EBITDA Reconciliation
(in thousands) Supplemental 1Q 2013
Three Months Ended
March 31,
2013 2012
Reconciliation of net earnings to Adjusted EBITDA
Net earnings attributable to common stockholders $ 265,416 $ 202,412
Net gain on acquisitions and dispositions of investments in real estate (344,679) (279,020)
Depreciation and amortization from continuing operations 177,266 180,280
Interest expense from continuing operations 115,028 133,056
Loss (gain) on early extinguishment of debt 17,351 (5,419)
Current and deferred income tax expense 51,866 12,124
Pro forma adjustment (A) (29,533) 12,352
Income attributable to disposal properties and assets held for sale (247) (12,521)
NOI attributable to assets held for sale (19) 2,463
Net earnings (loss) attributable to noncontrolling interest 12,103 118
Preferred stock dividends and loss on preferred stock redemption 19,413 10,567
Unrealized foreign currency and derivative losses (gains) and stock compensation expense, net 8,749 32,548
Impairment charges - 19,320
Merger, acquisition and other integration expenses - 10,728
Adjusted EBITDA, prior to our share of unconsolidated entities 292,714 319,008
Our share of reconciling items from unconsolidated entities:
Net loss (gain) on disposition of real estate, net (6,890) 1,813
Depreciation and amortization 28,278 31,531
Interest expense 21,565 23,723
Loss on early extinguishment of debt 189 982
Current income tax expense 2,026 1,543
Unrealized gains and deferred income tax benefit (214) (1,537)
Adjusted EBITDA $ 337,668 $ 377,063
(A) Adjustments during 2013, include the effects of Nippon Prologis REIT, Inc. (“NPR”) and Prologis European Logistics Partners Sarl (“PELP”) as if we made the first quarter contribution at the beginning of the quarter (i.e. removing actual NOI recognized and replacing with an estimate of our share of NOI and fees). Adjustments during 2012 include the effects of Prologis North American Industrial Fund II and Prologis California to reflect NOI for the full period.
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Financial Information
Pro-rata Balance Sheet Information
(in thousands) Supplemental 1Q 2013
Plus PLD Share of
Less Non Investors’
Unconsolidated PLD Total Total Owned
Consolidated Controlling Share of
Pro-rata Balance Sheet Information as of Co-Investment Share and Managed
Interest Ventures
March 31, 2013 Ventures
Assets:
Investments in real estate assets:
Gross operating properties $ 17,521,075 $ (876,720) $ 6,207,528 $ 22,851,883 $ 16,913,489 $ 39,765,372
Other real estate 3,074,733 (60,372) 87,041 3,101,402 265,175 3,366,577
Less accumulated depreciation (2,292,946) 41,769 (381,726) (2,632,903) (1,183,512) (3,816,415)
Net investments in properties 18,302,862 (895,323) 5,912,843 23,320,382 15,995,152 39,315,534
Investments in unconsolidated entities 3,635,214 (66,370) (3,568,844) - 66,370 66,370
Other assets 2,137,223 (141,845) 74,152 2,069,530 1,060,524 3,130,054
Total assets $ 24,075,299 $ (1,103,538) $ 2,418,151 $ 25,389,912 $ 17,122,046 $ 42,511,958
Liabilities and Equity:
Liabilities:
Debt $ 9,074,123 $ (353,999) $ 2,062,750 $ 10,782,874 $ 6,519,292 $ 17,302,166
Other liabilities 1,790,643 (39,901) 355,401 2,106,143 728,143 2,834,286
Total liabilities 10,864,766 (393,900) 2,418,151 12,889,017 7,247,435 20,136,452
Equity:
Stockholders’ / partners’ equity 12,500,895 - - 12,500,895 9,874,611 22,375,506
Noncontrolling interests 709,638 (709,638) - - - -
Total equity 13,210,533 (709,638) - 12,500,895 9,874,611 22,375,506
Total liabilities and equity $ 24,075,299 $ (1,103,538) $ 2,418,151 $ 25,389,912 $ 17,122,046 $ 42,511,958
On this page and the follow ing page, w e present balance sheet and income statement information on a pro-rata basis reflecting our proportionate economic ow nership of each entity included in our Total Ow ned and Managed portfolio.
The consolidated amounts show n are derived from, and prepared on a consistent basis w ith, our consolidated financial statements. The PLD Share of Unconsolidated Co-Investment Ventures column w as derived on an entity-by-entity basis by applying our ow nership percentage to each line item to calculate our share of that line item. For purposes of balance sheet data, w e used our ow nership percentage at the end of the period and for operating information, w e used our average ow nership percentage for the period, consistent w ith how w e calculate our share of net earnings (loss) during the period. We used a similar calculation to derive the noncontrolling interests’ share of each line item. In order to present the Total Ow ned and Managed portfolio, w e added our investors’ share of each line item in the unconsolidated co-investment ventures and the noncontrolling interests share of each line item to the PLD Total Share.
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Financial Information
Pro-rata Operating Information
(in thousands) Supplemental 1Q 2013
Plus PLD Share of
Less Non Investors’
Unconsolidated PLD Total Total Owned Consolidated Controlling Share of
Pro-rata Operating Information for Co-Investment Share and Managed Interest Ventures
Three Months Ended March 31, 2013 Ventures Revenues:
Rental income $ 454,789 $ (18,563) $ 96,395 $ 532,621 $ 298,049 $ 830,670 Private capital revenue 33,635 (17) 325 33,943 (94) 33,849 Development management and other income 2,192 3 (86) 2,109 (155) 1,954 Total revenues 490,616 (18,577) 96,634 568,673 297,800 866,473
Expenses:
Rental expenses 133,919 (4,581) 26,679 156,017 79,217 235,234 Private capital expenses 19,909 — — 19,909 — 19,909 General and administrative expenses 56,197 (314) 4,063 59,946 12,970 72,916 Depreciation and amortization 177,266 (6,132) 32,536 203,670 101,528 305,198 Other expenses 4,353 — 174 4,527 483 5,010 Total expenses 391,644 (11,027) 63,452 444,069 194,198 638,267
Operating income (loss) 98,972 (7,550) 33,182 124,604 103,602 228,206 Our share of co-investment ventures 69,722 — (69,722) — — -
Total reconciling items to Adjusted EBITDA 168,974 (6,488) 36,540 199,026 101,600 300,626 Adjusted EBITDA (A) $ 337,668 $ (14,038) $ —$ 323,630 $ 205,202 $ 528,832
Adjusted EBITDA by segment:
Real Estate Operations NOI $ 318,709 $ (13,979) $ 69,456 $ 374,186 $ 218,194 $ 592,380 Private Capital NOI 13,726 (17) 325 14,034 (94) 13,940 Our share of co-investment ventures 69,722 — (69,722) — — -General and administrative and other expenses (64,489) (42) (59) (64,590) (12,898) (77,488)
Adjusted EBITDA $ 337,668 $ (14,038) $ —$ 323,630 $ 205,202 $ 528,832
Prologis’ Share (in millions)
Real Estate Operations NOI $374.2 (96%) Private Capital NOI $14.0 (4%) Development Value Creation (B) $67.4 Development Value Realization (C) $247.1
0 $100 $200 $300 $400
(A) See reconciliation of Consolidated Net Earnings to Adjusted EBITDA on page 9.
(B) Represents estimated Value Creation for development properties that reached Stabilization during the quarter and moved into the Operating Portfolio. (C) Represents the net gain on dispositions of our development properties and land during the quarter.
11 Copyright © 2013 Prologis
Operations Overview
Operating Portfolio – Square Feet, Occupied and Leased
(square feet in thousands) Supplemental 1Q 2013
Reg ion # o f B uilding s Sq uare F eet Occup ied Leased
Total Owned and Prologis Prologis % of Total Total Owned and Prologis Total Owned and Prologis M anaged Share Share (%) M anaged Share M anaged Share
Gl oba l M a r k e t s
U.S.
At lant a East 118 14,104 11,373 80.6% 3.4% 84.7% 85.0% 85.8% 86.0% Balt imore/ Washingt on East 69 8,184 5,430 66.3% 1.6% 94.9% 94.0% 95.5% 94.9% Cent ral Valley Nort hwest 24 8,970 7,127 79.5% 2.1% 91.4% 92.9% 91.4% 92.9% Cent ral & East ern PA East 27 14,049 7,136 50.8% 2.1% 95.0% 96.6% 95.0% 96.6% Chicago Cent ral 221 36,409 28,440 78.1% 8.5% 92.7% 93.5% 92.7% 93.5% Dallas/ Ft . Wort h Cent ral 160 23,276 19,263 82.8% 5.8% 94.3% 94.5% 94.4% 94.6% Houst on Cent ral 77 9,420 6,817 72.4% 2.0% 97.9% 98.6% 98.4% 99.1% New Jersey/ New York Cit y East 171 22,001 16,290 74.0% 4.9% 95.3% 94.0% 95.3% 94.0% San Francisco Bay Area Nort hwest 242 19,992 17,010 85.1% 5.1% 92.4% 92.5% 92.7% 92.9% Seat t le Nort hwest 76 10,205 5,024 49.2% 1.5% 95.8% 96.3% 96.0% 96.7% Sout h Florida East 89 10,324 7,353 71.2% 2.2% 94.9% 93.2% 94.9% 93.2% Sout hern Calif ornia Sout hwest 298 55,723 45,363 81.4% 13.5% 97.9% 98.3% 98.0% 98.4% On Tarmac Various 31 2,598 2,373 91.3% 0.7% 90.1% 89.1% 90.1% 89.2% Canada East 19 6,383 5,080 79.6% 1.5% 94.1% 92.6% 94.1% 92.6% Mexico Lat in America 187 30,081 17,492 58.1% 5.2% 92.5% 92.0% 92.9% 92.8% Brazil Lat in America 8 2,576 129 5.0% 0.0% 100.0% 100.0% 100.0% 100.0%
Ame r i c a s t ot a l 1, 8 17 2 7 4 , 2 9 5 2 0 1, 7 0 0 7 3 . 5 % 6 0 .. 1% 9 4 . 2 % 9 4 . 3 % 9 4 . 4 % 9 4 . 5 %
Belgium Nort hern 9 2,016 1,139 56.5% 0.3% 99.6% 99.4% 99.6% 99.4% France Sout hern 126 30,022 14,522 48.4% 4.4% 92.0% 90.3% 92.0% 90.3% Germany Nort hern 89 18,414 7,115 38.6% 2.1% 99.5% 99.3% 99.5% 99.3% Net herlands Nort hern 53 10,699 4,135 38.6% 1.2% 92.6% 90.7% 92.6% 90.7% Poland C.E.E. 95 20,569 8,702 42.3% 2.6% 88.3% 86.3% 91.4% 89.5% Spain Sout hern 26 7,125 3,541 49.7% 1.1% 87.8% 89.5% 94.9% 94.3% Unit ed Kingdom UK 73 17,231 7,992 46.4% 2.4% 97.5% 97.7% 98.2% 98.4%
Eur ope t ot a l 4 7 1 10 6 , 0 7 6 4 7 , 14 6 4 4 . 4 % 14 . 1% 9 3 . 4 % 9 2 . 4 % 9 4 . 6 % 9 3 . 4 %
China China 25 5,500 2,312 42.0% 0.7% 97.4% 97.8% 97.4% 97.8% Japan Japan 45 21,372 7,872 36.8% 2.3% 96.9% 94.9% 97.1% 95.4% Singapore Singapore 5 942 942 100.0% 0.3% 100.0% 100.0% 100.0% 100.0%
Asi a t ot a l 7 5 2 7 , 8 14 11, 12 6 4 0 . 0 % 3 . 3 % 9 7 . 1% 9 5 . 9 % 9 7 . 3 % 9 6 . 2 % Tot a l gl oba l ma r k e t s 2 , 3 6 3 4 0 8 , 18 5 2 5 9 , 9 7 2 6 3 . 7 % 7 7 . 5 % 9 4 . 2 % 9 4 . 0 % 9 4 . 7 % 9 4 . 4 % Re gi ona l ma r k e t s ( A)
It aly—Europe Sout hern 27 8,378 4,759 56.8% 1.4% 85.3% 82.5% 85.3% 82.5% Czech Republic—Europe C.E.E. 29 6,824 3,296 48.3% 1.0% 93.9% 92.3% 96.8% 95.3% San Ant onio—Americas Cent ral 50 5,606 4,185 74.7% 1.3% 96.2% 96.0% 96.2% 96.0% Denver—Americas Nort hwest 33 5,208 4,254 81.7% 1.3% 94.4% 93.2% 94.4% 93.2% Columbus—Americas Cent ral 37 9,727 7,763 79.8% 2.3% 91.8% 89.9% 91.9% 90.0% Hungary—Europe C.E.E. 30 5,347 2,355 44.0% 0.7% 84.1% 81.6% 85.4% 83.1% Sweden—Europe Nort hern 10 3,807 1,818 47.8% 0.6% 100.0% 100.0% 100.0% 100.0% Memphis—Americas Cent ral 17 6,270 5,474 87.3% 1.6% 99.5% 99.5% 99.5% 99.5% Cincinnat i—Americas Cent ral 27 6,663 4,142 62.2% 1.2% 97.6% 96.1% 97.6% 96.1% Orlando—Americas Cent ral 35 4,360 3,426 78.6% 1.0% 85.9% 84.6% 85.9% 84.6% Remaining ot her regional (6 market s) Various 137 22,295 15,020 67.4% 4.5% 94.4% 92.5% 94.6% 92.6%
Re gi ona l ma r k e t s t ot a l 4 3 2 8 4 , 4 8 5 5 6 , 4 9 2 6 6 . 9 % 16 . 9 % 9 3 . 1% 9 1. 8 % 9 3 . 5 % 9 2 . 1% Ot he r ma r k e t s ( 13 ma r k e t s) Various 201 32 , 143 18 , 877 5 8 . 7 % 5 . 6 % 8 9. 3% 9 1. 6 % 90. 4% 92. 1%
Tot a l ope r a t i ng por t f ol i o—owne d a nd ma na ge d 2 , 996 524 , 8 13 335 , 341 6 3 . 9 % 10 0 . 0 % 9 3. 7% 9 3 . 5 % 94. 2% 93. 9%
(A) Selected and ordered by Prologis share of NOI ($).
12
Copyright © 2013 Prologis
Operations Overview
Operating Portfolio – NOI and Gross Book Value
(dollars in thousands) Supplemental 1Q 2013
Regio n First Quart er N OI Gross B oo k V alue
Total Owned and Prologis Prologis % of Total Total Owned and Prologis Prologis % of Total M anaged Share ($) (A) Share (%) (A) M anaged Share ($) Share (%)
Gl obal M a r k e t s
U.S.
At lant a East $8,704 $6,728 77.3% 1.8% $634,868 $474,096 74.7% 2.0% Balt imore/ Washingt on East 10,284 6,397 62.2% 1.6% 630,207 384,189 61.0% 1.6% Cent ral Valley Nort hwest 6,636 5,358 80.7% 1.4% 471,416 366,114 77.7% 1.6% Cent ral & East ern PA East 11,185 5,069 45.3% 1.3% 789,441 391,880 49.6% 1.7% Chicago Cent ral 22,265 16,580 74.5% 4.4% 2,161,976 1,635,177 75.6% 6.9% Dallas/ Ft . Wort h Cent ral 14,826 11,707 79.0% 3.1% 1,117,405 873,474 78.2% 3.7% Houst on Cent ral 9,099 6,091 66.9% 1.6% 529,911 336,809 63.6% 1.4% New Jersey/ New York Cit y East 26,363 17,386 65.9% 4.6% 1,933,897 1,303,412 67.4% 5.5% San Francisco Bay Area Nort hwest 28,413 24,023 84.5% 6.3% 1,987,690 1,689,444 85.0% 7.1% Seat t le Nort hwest 12,854 6,175 48.0% 1.6% 947,871 469,262 49.5% 2.0% Sout h Florida East 13,301 9,625 72.4% 2.5% 1,017,771 754,593 74.1% 3.2% Sout hern Calif ornia Sout hwest 64,236 52,674 82.0% 13.8% 5,023,757 4,048,895 80.6% 17.1% On Tarmac Various 7,863 7,031 89.4% 1.8% 313,962 275,601 87.8% 1.2% Canada East 8,657 6,815 78.7% 1.8% 627,382 495,378 79.0% 2.1% Mexico Lat in America 30,554 17,784 58.2% 4.7% 1,807,070 1,001,818 55.4% 4.2% Brazil Lat in America 5,703 285 5.0% 0.1% 240,014 12,001 5.0% 0.1%
Ame r i c a s t ot a l 2 80, 943 199, 728 71. 1% 52. 4% 20, 234, 638 14 , 5 12 , 143 71. 7 % 6 1. 4 %
Belgium Nort hern 2,873 1,675 58.3% 0.4% 161,335 90,536 56.1% 0.4% France Sout hern 34,321 22,131 64.5% 5.8% 2,352,737 1,107,323 47.1% 4.7% Germany Nort hern 27,903 12,015 43.1% 3.2% 1,548,068 568,791 36.7% 2.4% Net herlands Nort hern 15,244 7,591 49.8% 2.0% 976,533 388,727 39.8% 1.6% Poland CEE 19,271 10,714 55.6% 2.8% 1,315,370 522,946 39.8% 2.2% Spain Sout hern 8,625 7,186 83.3% 1.9% 533,445 274,575 51.5% 1.2% Unit ed Kingdom UK 32,356 19,196 59.3% 5.1% 1,928,343 864,276 44.8% 3.7%
Eur ope t ot a l 14 0 , 5 9 3 8 0 , 5 0 8 5 7 . 3 % 2 1. 2 % 8 , 8 15 , 8 3 1 3 , 8 17 , 17 4 4 3 . 3 % 16 . 2 %
China China 4,191 1,285 30.7% 0.3% 282,811 89,316 31.6% 0.4% Japan Japan 55,622 29,685 53.4% 7.8% 4,095,938 1,463,708 35.7% 6.2% Singapore Singapore 2,459 2,459 100.0% 0.7% 147,302 147,302 100.0% 0.6%
Asi a t ot a l 6 2 , 2 7 2 3 3 , 4 2 9 5 3 . 7 % 8 . 8 % 4 , 5 2 6 , 0 5 1 1, 7 0 0 , 3 2 6 3 7 . 6 % 7 . 2 % Tot a l gl oba l ma r k e t s 4 8 3 , 8 0 8 3 13 , 6 6 5 6 4 . 8 % 8 2 . 4 % 3 3 , 5 7 6 , 5 2 0 2 0 , 0 2 9 , 6 4 3 5 9 . 7 % 8 4 .. 8 % Re gi ona l ma r k e t s ( B)
It aly—Europe Sout hern 8,086 6,845 84.7% 1.8% 514,227 289,055 56.2% 1.2% Czech Republic—Europe CEE 8,034 5,914 73.6% 1.6% 466,310 215,383 46.2% 0.9% San Ant onio—Americas Cent ral 4,780 3,617 75.7% 1.0% 257,817 183,339 71.1% 0.8% Denver—Americas Nort hwest 4,445 3,585 80.7% 0.9% 292,909 243,315 83.1% 1.0% Columbus—Americas Cent ral 4,817 3,489 72.4% 0.9% 372,245 287,779 77.3% 1.2% Hungary—Europe CEE 5,254 3,463 65.9% 0.9% 360,057 148,461 41.2% 0.6% Sweden—Europe Nort hern 5,854 3,448 58.9% 0.9% 355,178 159,332 44.9% 0.7% Memphis—Americas Cent ral 3,805 3,230 84.9% 0.8% 207,515 179,390 86.4% 0.8% Cincinnat i—Americas Cent ral 4,587 2,633 57.4% 0.7% 269,495 151,943 56.4% 0.6% Orlando—Americas Cent ral 3,491 2,591 74.2% 0.7% 277,548 206,414 74.4% 0.9% Remaining ot her regional (6 market s) Various 18,766 11,793 62.8% 3.1% 1,058,728 653,642 61.7% 2.8%
Re gi ona l ma r k e t s t ot a l 7 1, 9 19 5 0 , 6 0 8 7 0 . 4 % 13 . 3 % 4 , 4 3 2 , 0 2 9 2 , 7 18 , 0 5 3 6 1. 3 % 11. 5 % Ot he r ma r k e t s ( 13 ma r k e t s) Various 26, 992 16 , 573 6 1. 4 % 4 . 3 % 1, 626, 426 883, 772 54. 3% 3 . 7 %
Tot a l ope r a t i ng por t f ol i o—owne d a nd ma na ge d $582, 719 $380, 846 65. 4% 100. 0% $39, 634, 975 $ 23, 631, 468 59. 6% 10 0 . 0 %
(A) Prologis’ share of NOI for the properties included in the NPR and PELP contributions include 100% of the NOI from January to the contribution date and then Prologis’ share subsequent to the contribution.
13 (B) Selected and ordered by Prologis share of NOI ($).
Copyright © 2013 Prologis
Operations Overview
Operating Portfolio – Summary by Division
(square feet and dollars in thousands) Supplemental 1Q 2013
# o f B uildings Square F eet Occupied Leased
Total Owned Prologis Prologis % of Total Total Owned Prologis Total Owned Prologis and M anaged Share Share (%) and M anaged Share and M anaged Share
C o nso lidated
Americas 1,531 233,639 233,639 100.0% 69.7% 93.9% 93.9% 94.1% 94.1% Europe 78 16,330 16,330 100.0% 4.9% 87.5% 87.5% 87.5% 87.5% Asia 22 7,787 7,787 100.0% 2.3% 95.0% 95.0% 95.5% 95.5%
T o tal o perating po rtfo lio—co nso lidated 1,631 257,756 257,756 100.0% 76.9% 93.5% 93.5% 93.7% 93.7% Unco nso lidated
Americas 802 127,294 28,392 22.3% 8.4% 93.6% 93.6% 93.9% 93.9% Europe 510 119,736 45,854 38.3% 13.7% 93.7% 93.2% 95.0% 94.6% Asia 53 20,027 3,339 16.7% 1.0% 98.0% 98.0% 98.0% 98.0%
T o tal o perating po rtfo lio—unco nso lidated 1,365 267,057 77,585 29.1% 23.1% 94.0% 93.5% 94.7% 94.5% T o tal
Americas 2,333 360,933 262,031 72.6% 78.1% 93.8% 93.8% 94.0% 94.1% Europe 588 136,066 62,184 45.7% 18.6% 92.9% 91.6% 94.1% 92.7% Asia 75 27,814 11,126 40.0% 3.3% 97.1% 95.9% 97.3% 96.2%
T o tal o perating po rtfo lio—o wned and managed 2,996 524,813 335,341 63.9% 100.0% 93.7% 93.5% 94.2% 93.9%
Value added properties—consolidated 16 2,084 2,084 100.0% 42.4% 42.4% 42.4% 42.4% Value added properties—unconsolidated 6 575 138 24.0% 37.1% 37.1% 37.1% 37.1%
T o tal o wned and managed 3,018 527,472 337,563 64.0% 93.5% 93.2% 93.9% 93.5%
F irst Quarter N OI Gro ss B o o k Value
Total Owned Prologis Prologis % of Total Total Owned Prologis Prologis % of Total and M anaged Share ($) (A) Share (%) (A) and M anaged Share ($) Share (%)
C o nso lidated
Americas $214,916 $214,916 100.0% 56.4% $15,081,626 $15,081,626 100.0% 63.8% Europe 21,855 21,855 100.0% 5.7% 1,226,400 1,226,400 100.0% 5.2% Asia 14,446 14,446 100.0% 3.8% 1,126,436 1,126,436 100.0% 4.8%
T o tal o perating po rtfo lio—co nso lidated $ 251,217 $ 251,217 100.0% 65.9% $ 17,434,462 $ 17,434,462 100.0% 73.8%
Unco nso lidated
Americas $130,715 $28,865 22.1% 7.6% $9,160,156 $2,056,976 22.5% 8.7% Europe 152,961 8178 , 53.5% 215% . 9,640,742 3,566,140 37.0% 15.1% Asia 47,826 18,983 39.7% 5.0% 3,399,615 573,890 16.9% 2.4%
T o tal o perating po rtfo lio—unco nso lidated $ 331,502 $ 129,629 39.1% 34.1% $ 22,200,513 $ 6,197,006 27.9% 26.2%
T o tal
Americas $345,631 $243,781 70.5% 64.0% $24,241,782 $17,138,602 70.7% 72.5% Europe 174,816 103,636 59.3% 27.2% 10,867,142 4,792,540 44.1% 20.3% Asia 62,272 33,429 53.7% 8.8% 4,526,051 1,700,326 37.6% 7.2%
T o tal o perating po rtfo lio—o wned and managed $ 582,719 $ 380,846 65.4% 100.0% $ 39,634,975 $ 23,631,468 59.6% 100.0%
Value added properties—consolidated 454 454 100.0% 86,613 86,613 100.0% Value added properties—unconsolidated 151 36 23.8% 43,784 10,522 24.0%
T o tal o wned and managed $ 583,324 $ 381,336 65.4% $ 39,765,372 $ 23,728,603 59.7%
(A) Prologis’ share of NOI for the properties included in the NPR and PELP contributions include 100% of the NOI from January to the contribution date and then Prologis’ share subsequent to the contribution.
14 Copyright © 2013 Prologis
Operations Overview
Operating Metrics – Owned and Managed
(square feet and dollars in thousands)
Supplemental 1Q 2013
Period Ending Occupancy by Division
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Total
93.1% 94.0% 93.7%
92.4%
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Asia
96.8% 96.9% 97.1%
96.5%
93.0% 92.9%
92.1% 92.0%
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Europe
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Americas
94.2% 93.8%
93.3%
92.2%
100% 95% 90% 85%
Leasing Activity
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Square feet of leases signed:
Properties under development 2,863 2,279 3,772 3,787 Operating portfolio: New leases 11,947 12,102 11,571 9,688 Renew als 20,189 24,599 25,118 22,374 Square feet of leases signed in the operating porfolio 32,136 36,701 36,689 32,062
Total square feet of leases signed 34,999 38,980 40,461 35,849
Percentage change in rental rates on operating portfolio (3.8%) (1.7%) (2.1%) 2.0%
Weighted Average Customer Retention Turnover Costs (per square foot) (A) Percentage Change in Rental Rates
5.0% $1.75 $1.65 3.0% 2.0% $1.55 1.0%
$1.50 $1.50 $1.45 -1.0%
$1.38
$1.36 -1.7% -2.1% $1.35 -3.0% $1.25 -5.0% -3.8%
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2012 Q3 2012 Q4 2012 Q1 2013
90% 87.5% 87.3% 85% 82.4%
80% 78.0%
75% 70% 65% 60%
Q2 2012 Q3 2012 Q4 2012 Q1 2013
15 (A) Turnover costs per foot represent expected costs based on the leases signed during the quarter.
Copyright © 2013 Prologis
Operations Overview
Operating Metrics – Owned and Managed
(square feet and dollars in thousands) Supplemental 1Q 2013
Capital Expenditures Incurred Same Store Information (A)
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Property improvements $ 21,056 $ 33,704 $ 47,517 $ 18,264 Square feet of population 519,939 514,031 501,957 510,295
$ per square foot $ 0.04 $ 0.06 $ 0.09 $ 0.03 Percentage change:
Rental income 1.5% 2.3% 1.8% 2.7%
Tenant improvements 29,243 31,515 36,715 27,241 Rental expenses 4.8% 1.1% 6.8% 9.1%
Leasing commissions 18,523 21,483 25,166 18,344 Net operating income - GAAP 0.4% 2.7% 0.1% 0.3%
Total turnover costs (B) 47,766 52,998 61,881 45,585 Net operating income - adjusted cash 2.3% 3.0% 0.8% 1.8%
Total capital expenditures $ 68,822 $ 86,702 $ 109,398 $ 63,849 Average occupancy 2.9% 2.3% 2.1% 1.6%
Weighted average ow nership percent 72.2% 72.0% 75.4% 75.3%
Prologis share $ 49,689 $ 62,428 $ 82,488 $ 48,076
Capital Expeditures - % of Gross NOI
(trailing four quarters) ‘
20.0%
18.0%
16.0% 13.9% 14.0%
14.0% 12.7%
12.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Q2 2012 Q3 2012 Q4 2012 Q1 2013
Don’t Delete this cell
(A) See the Notes and Definitions for further explanations.
(B) Turnover costs represent costs incurred during the quarter.
16 Copyright © 2013 Prologis
Operations Overview
Customer Information – Owned and Managed
(square feet and dollars in thousands) Supplemental 1Q 2013
Top Customers Lease Expirations—Operating Portfolio—Owned and Managed
% of Annual Total Square Annual Base Percentage Occupied Percentage Year Base Rent Feet Rent of Total Square Feet of Total
| 1 |
|
DHL 2.0% 12,089 Month to month customers $ 37,795 1.4% 11,303 2.3% |
| 2 |
|
CEVA Logistics 1.3% 6,872 2013 375,801 14.2% 68,014 13.8% |
| 3 |
|
Kuehne & Nagel 1.2% 5,974 2014 480,837 18.1% 93,219 18.9% |
| 4 |
|
Geodis 0.9% 5,638 2015 438,690 16.5% 85,534 17.4% |
| 5 |
|
Home Depot, Inc. 0.9% 4,326 2016 335,359 12.6% 65,450 13.3% |
| 6 |
|
Amazon.com, Inc. 0.9% 4,678 2017 320,615 12.1% 60,266 12.3% |
| 7 |
|
FedEx Corporation 0.8% 2,372 Thereafter 664,888 25.1% 108,137 22.0% |
| 8 |
|
PepsiCo 0.8% 5,350 Total $ 2,653,985 100% 491,923 100% |
9 United States Government 0.8% 1,483
10 Hitachi Ltd 0.7% 2,141 Lease Expirations—Operating Portfolio—Prologis Share
Top 10 Customers 10.3% 50,923 Annual Base Percentage Occupied Percentage Year
11 Tesco PLC 0.7% 2,693 Rent of Total Square Feet of Total
12 Panasonic Logistics Co. Ltd. 0.6% 2,248 Month to month customers $ 25,126 1.5% 7,602 2.4%
13 Panalpina, Inc. 0.6% 2,457 2013 236,994 14.5% 43,244 13.8%
14 Sagaw a Express 0.6% 1,120 2014 296,735 18.2% 61,203 19.5%
15 Wal-Mart Stores 0.5% 2,655 2015 275,932 16.9% 55,719 17.8%
16 ND Logistics 0.5% 2,481 2016 220,053 13.5% 44,168 14.1%
17 Nippon Express Group 0.5% 1,353 2017 197,631 12.1% 37,720 12.0%
18 UPS SCS (United Parcel Service Inc.) 0.5% 2,217 Thereafter 377,919 23.3% 63,903 20.4%
19 National Distribution Centers LP 0.5% 3,488 Total $ 1,630,390 100% 313,559 100%
20 APL (Neptune Orient Lines) 0.4% 3,888
21 LG 0.4% 2,540
22 DB Schenker 0.4% 2,244
23 La Poste 0.4% 1,278
24 Catepillar Logistics Services 0.4% 1,153
25 Bayerische Motoren Werke Ag (BMW) 0.4% 1,916
Top 25 Customers 17.7% 84,655
17 Copyright © 2013 Prologis
Capital Deployment
Dispositions and Contributions
(square feet and dollars in thousands) Supplemental 1Q 2013
Q1 2013
Prologis Share of Square Prologis Share of Prologis Share of Square Feet Total Proceeds Feet Proceeds ($) Proceeds (%) (A)
Third Party Building Dispositions Americas
Prologis wholly owned 196 196 15,369 15,369 100.0% Prologis AMS (B) 229 88 20,600 7,929 38.5%
Total Americas 425 284 35,969 23,298 64.8%
Europe
Prologis wholly owned - - - - -
Total Europe - - - - -
Asia
Prologis wholly owned - - - - -Prologis Japan Fund 1 551 110 114,040 22,808 20.0%
Total Asia 551 110 114,040 22,808 20.0%
Total Third Party Building Dispositions 976 394 $150,009 $46,106 30.7%
Building Contributions and Dispositions to Co-Investment Ventures Americas
Brazil Fund and joint ventures 823 206 97,383 24,346 25.0%
Total Americas 823 206 97,383 24,346 25.0%
Europe
Prologis Targeted Europe Logistics Fund 571 571 39,722 26,872 67.7% Prologis European Logistics Partners (PELP) 48,743 48,743 3,074,924 1,537,462 50.0%
Total Europe 49,314 49,314 3,114,646 1,564,334 50.2%
Asia
Nippon Prologis REIT (NPR) 9,573 9,573 1,862,833 1,583,408 85.0%
Total Asia 9,573 9,573 1,862,833 1,583,408 85.0%
Total Contributions and Dispositions to Co-Investment Ventures 59,710 59,093 $5,074,862 $3,172,088 62.5%
Total Building Dispositions and Contributions 60,686 59,487 $5,224,871 $3,218,194 61.6%
Land dispositions 52,089 52,089 100.0% Other real estate dispositions 705 705 100.0%
Grand Total Dispositions and Contributions $5,277,665 $3,270,988 62.0%
Weighted average stabilized cap rate on building dispositions and contributions 6.6%
(A) Prologis share reflects our effective ownership. For contributions, this amount reflects gross cash proceeds to Prologis (net of units received for partial consideration).
(B ) This is a consolidated fund.
18 Copyright © 2013 Prologis
Capital Deployment
Third Party Building Acquisitions
(square feet and dollars in thousands) Supplemental 1Q 2013
Q1 2013
Prologis Share of Prologis Share of Prologis Share of Square Feet Acquisition Cost Acquisition Square Feet Acquisition Cost ($) Cost (%) (A)
Third Party Building Acquisitions
Americas
Prologis w holly ow ned 51 51 $ 3,123 $ 3,123 100.0%
Total Americas 51 51 3,123 3,123 100.0%
Europe
Prologis European Properties Fund II 131 39 10,968 3,257 29.7%
Total Europe 131 39 10,968 3,257 29.7%
Asia — — — — -
Total Third Party Building Acquisitions 182 90 $ 14,091 $ 6,380 45.3%
Weighted average stabilized cap rate 9.4%
19 (A) Prologis share reflects our effective ownership.
Copyright © 2013 Prologis
Capital Deployment
Development Starts – Q1 2013
(in thousands, except percent and per square foot) Supplemental 1Q 2013
Total Q1 2013 Prologis Share ($)—Q1 2013 Prologis Share (%)—Q1 2013 (A)
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 2,670 $122,054 $46 93.8% 2,670 $122,054 $46 93.8% 100.0% 100.0% Brazil Fund and joint ventures 1,197 126,870 106 0.0% 299 31,718 106 0.0% 25.0% 25.0% Total Americas 3,867 248,924 64 64.8% 2,969 153,772 52 84.4% 76.8% 61.8%
Europe
Consolidated — — — — —Total Europe — — — — —
Asia
Consolidated 446 64,246 144 0.0% 446 64,246 144 0.0% 100.0% 100.0% Total Asia 446 64,246 144 0.0% 446 64,246 144 0.0% 100.0% 100.0%
Total 4,313 $313,170 $73 58.1% 3,415 $218,018 $64 73.3% 79.2% 69.6%
Weighted average estimated stabilized yield 8.4% Pro forma NOI $26,455 Weighted average estimated cap rate at stabilization 6.9% Estimated value creation (B) $68,311 Estimated development margin 21.8%
Prologis share of estimated value creation on development starts (B) 56.7% Prologis share of estimated value creation on development starts (B) $38,709
Historical Development Starts (TEI) Q1 2013 Development Starts
$1,800,000 $1,552,785 $1,600,000 $1,400,000 $1,200,000 $1,016,763 $1,000,000 $758,905 $800,000 $600,000 $313,877 $313,170 $400,000 $200,000 $-2009 2010 2011 2012 YTD 2013
Americas Europe Asia Americas Europe Asia Prologis Share Partners’ Share Build to Suit Speculative
(A) Prologis share reflects our effective ownership.
20 (B) Value Creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section. Copyright © 2013 Prologis
Capital Deployment
Development Portfolio
(in thousands, except percent)
C o nso lidated
U.S. Central East Northwest Southwest U.S. Total
Canada
Latin America
A mericas to tal
Europe
Central Europe
United Kingdom
Euro pe to tal
Asia
Japan
China
A sia to tal
Total glo bal markets
R egio nal and o ther markets
Americas
Europe
T o tal regio nal and o ther markets
T o tal co nso lidated develo pment po rtfo lio Unco nso lidated
Prologis Targeted U.S. Logistics Fund Brazil Fund and joint ventures Prologis Targeted Europe Logistics Fund Prologis European Logistics Partners (PELP) Prologis China Logistics Venture I
T o tal unco nso lidated develo pment po rtfo lio
T o tal develo pment po rtfo lio—o wned & managed
T o tal develo pment po rtfo lio—P ro lo gis share T o tal develo pment po rtfo lio—P ro lo gis share (%)
Cost to complete
Prologis share of cost to complete
Percent build to suit (based on Prologis share) Leased percent Weighted average estimated stabilized yield Pro forma NOI
Weighted average estimated cap rate at stabilization Estimated value creation (A) Estimated development margin Prologis share of estimated value creation (A) Prologis share of estimated value creation (A)
Supplemental 1Q 2013
Under D evelo pment
P re-Stabilized 2013 Expected 2014 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 %
147 $7,817 1,302 $61,021 1,225 $49,404 2,527 $110,425 $118,242 $118,242 6.7% 65.0% 272 24,486 1,923 95,331 878 101,759 2,801 197,090 221,576 221,576 12.6% 71.4%
— — 1,258 134,123 — — 1,258 134,123 134,123 134,123 7.7% 80.9% 414 26,774 801 47,908 — — 801 47,908 74,682 74,682 4.3% 0.0% 833 59,077 5,284 338,383 2,103 151,163 7,387 489,546 548,623 548,623 31.3% 60.2%
— — 910 105,399 — — 910 105,399 105,399 105,399 6.0% 0.0% 235 11,137 754 45,227 — — 754 45,227 56,364 56,364 3.2% 8.0%
1,068 70,214 6,948 489,009 2,103 151,163 9,051 640,172 710,386 710,386 40.5% 49.7%
201 10,406 265 15,009 — — 265 15,009 25,415 25,415 1.5% 100.0%
— — 698 66,875 — — 698 66,875 66,875 66,875 3.8% 100.0%
201 10,406 963 81,884 0 0 963 81,884 92,290 92,290 5.3% 100.0%
1,024 161,032 2,552 348,664 1,185 159,741 3,737 508,405 669,437 669,437 38.2% 72.9%
— — 568 22,773 — — 568 22,773 22,773 22,773 1.3% 77.0%
1,024 161,032 3,120 371,437 1,185 159,741 4,305 531,178 692,210 692,210 39.5% 73.3%
2,293 241,652 11,031 942,330 3,288 310,904 14,319 1,253,234 1,494,886 1,494,886 85.3% 60.8%
— — 1,253 49,476 — — 1,253 49,476 49,476 49,476 2.9% 61.2% 260 14,100 — — — — — — 14,100 14,100 0.8% 69.6%
260 14,100 1,253 49,476 — — 1,253 49,476 63,576 63,576 3.7% 62.6%
2,553 255,752 12,284 991,806 3,288 310,904 15,572 1,302,710 1,558,462 1,558,462 89.0% 60.9%
272 31,786 — — — — — — 31,786 7,639 0.4% 0.0%
— — 2,411 242,046 621 66,823 3,032 308,869 308,869 154,435 8.8% 30.2%
47 5,669 249 23,769 — — 249 23,769 29,438 9,523 0.5% 0.0%
— — — — 262 16,058 262 16,058 16,058 8,029 0.5% 100.0%
— — 598 33,859 1,078 58,903 1,676 92,762 92,762 13,914 0.8% 0.0% 319 37,455 3,258 299,674 1,961 141,784 5,219 441,458 478,913 193,540 11.0% 21.2% 2,872 $ 293,207 15,542 $ 1,291,480 5,249 $ 452,688 20,791 $ 1,744,168 $ 2,037,375 $ 1,752,002 100.0% 51.7%
2,633 $ 265,225 13,660 $ 1,125,598 3,891 $ 361,180 17,551 $ 1,486,778 $ 1,752,003 57.6%
91.7% 90.5% 87.9% 87.2% 74.1% 79.8% 84.4% 85.2% 86.0% $ 18,461 $ 613,483 $ 335,303 $ 948,786 $ 967,247 $ 14,265 $ 520,353 $ 261,722 $ 782,075 $ 796,340
0.0% 62.4% 15.9% 51.1% 43.4%
59.7% 53.3% 42.4% 50.5% 51.7%
7.4% 8.0% 7.5% 7.9% 7.8%
158,517
6.4%
439,262
21.6%
370,973
84.5%
21 (A) Value creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section.
Copyright © 2013 Prologis
Capital Deployment
Land Portfolio – Owned and Managed
(square feet and dollars in thousands) Supplemental 1Q 2013
Land by M arket Region A cres C urrent B ook V alue
Tot al Owned & Prolog is Pro logis Est imat ed B uild Out Tot al Owned & Prolo gis Prolog is % of M anaged Share Share ( %) Pot ent ial ( sq f t ) ( A ) M anaged Share ( $) Share ( %) To t al
Glo bal markets
U.S.
Atlanta East 613 613 100.0% 8,655 $ 26,424 $ 26,424 100.0% 1.5% Baltimore/Washington East 106 106 100.0% 1,290 13,505 13,505 100.0% 0.8% Central Valley Northwest 1,156 1,156 100.0% 20,760 38,276 38,276 100.0% 2.1%
. , , , . .
Chicago Central 567 567 100.0% 10,361 49,329 49,329 100.0% 2.7% Dallas/Ft. Worth Central 351 351 100.0% 5,973 19,433 19,433 100.0% 1.1% Houston Central 47 47 100.0% 647 5,422 5,422 100.0% 0.3% New Jersey/New York City East 323 323 100.0% 4,710 129,901 129,901 100.0% 7.2% South Florida East 341 341 100.0% 5,794 141,372 141,372 100.0% 7.9% Southern California Southwest 818 818 100.0% 16,255 186,034 186,034 100.0% 10.3% Canada Canada 183 183 100.0% 3,485 61,506 61,506 100.0% 3.4% M exico M exico 891 891 100.0% 17,451 177,346 177,346 100.0% 9.9% Brazil Brazil 246 123 50.0% 3,541 80,117 40,059 50.0% 2.2%
A mericas to tal 5,953 5,830 97.9% 102,906 956,058 916,000 95.8% 50.9%
Belgium Northern 30 30 100.0% 639 9,976 9,976 100.0% 0.6% France Southern 503 503 100.0% 9,065 87,247 87,247 100.0% 4.8% Germany Northern 116 116 100.0% 2,445 21,568 21,568 100.0% 1.2% Netherlands Northern 68 68 100.0% 1,823 65,314 65,314 100.0% 3.6% Poland C.E.E. 775 775 100.0% 14,096 92,888 92,888 100.0% 5.2% Spain Southern 100 100 100.0% 2,021 15,293 15,293 100.0% 0.9% United Kingdom UK 951 951 100.0% 14,122 232,919 232,919 100.0% 12.9%
Euro pe to tal 2,543 2,543 100.0% 44,211 525,205 525,205 100.0% 29.2%
China China 136 36 26.5% 3,339 40,852 13,352 32.7% 0.7% Japan Japan 70 70 100.0% 3,504 94,769 94,769 100.0% 5.3%
A sia to tal 206 106 51.5% 6,843 135,621 108,121 79.7% 6.0% T o tal glo bal markets 8,702 8,479 97.4% 153,960 1,616,884 1,549,326 95.8% 86.1% R egio nal markets (B )
Czech Republic—Europe C.E.E. 247 247 100.0% 4,056 39,303 39,303 100.0% 2.2% Hungary—Europe C.E.E. 338 338 100.0% 5,686 36,688 36,688 100.0% 2.0% Italy—Europe Southern 107 107 100.0% 2,451 31,613 31,613 100.0% 1.8% Central Florida—Americas East 129 129 100.0% 1901 , 26,000 26,000 100.0% 14% . Slovakia—Europe C.E.E. 96 96 100.0% 2,093 16,284 16,284 100.0% 0.9% Denver—Americas Northwest 66 66 100.0% 1,231 8,948 8,948 100.0% 0.5% M emphis—Americas Central 165 165 100.0% 2,859 6,823 6,823 100.0% 0.4% Indianapolis—Americas Central 127 127 100.0% 2,333 4,507 4,507 100.0% 0.3% Phoenix—Americas Southwest 42 42 100.0% 707 4,238 4,238 100.0% 0.2% Columbus—Americas Central 142 142 100.0% 2,306 4,203 4,203 100.0% 0.2% Cincinnati—Americas Central 15 15 100.0% 216 1,507 1,507 100.0% 0.1%
T o tal regio nal markets 1,474 1,474 100.0% 25,839 180,114 180,114 100.0% 10.0%
Various 793 793 100.0% 13,514 69,525 69,525 100.0% 3.9% T o tal land po rtfo lio—o wned and managed 10,969 10,746 98.0% 193,313 $ 1,866,523 $ 1,798,965 96.4% 100.0% Original C o st B asis $ 2,922,664 $ 2,856,215
(A) Represents estimated finished square feet available for rent upon completion of an industrial building on existing parcels of land.
22 (B) Ordered by our share of current book value.
Copyright © 2013 Prologis
Private Capital
Detail Information
Supplemental 1Q 2013
Investment Information
Co-Investment Ventures Type Investment Type Geographic Focus Ownership Date Established Term / Structure
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 Targeted U.S. Logistics Fund (A) Core Unconsolidated US 24.0% 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 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)(B) Development Unconsolidated Brazil 50.0% December 2010 Closed end Prologis Targeted Europe Logistics Fund (A) Core Unconsolidated Europe 32.4% June 2007 Open end Prologis European Properties Fund II (A) Core Unconsolidated Europe 30.7% August 2007 Open end Europe Logistics Venture 1 (A) Core Unconsolidated Europe 15.0% February 2011 Open end Prologis European Logistics Partners (A) Core Unconsolidated Europe 50.0% March 2013 Open end Prologis Japan Fund 1 Core Unconsolidated Japan 20.0% June 2005 Closed end
Nippon Prologis REIT (A) Core Unconsolidated Japan 15.0% February 2013 Public, Tokyo Exchange Prologis China Logistics Venture 1 (A) Core/Development Unconsolidated China 15.0% March 2011 Closed end
Information by Unconsolidated Co-investment Venture (C):
Prologis’ Share
First Gross Book Value of First 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 Industrial Fund 47,340 $40,809 $2,888,291 $1,192,165 $9,410 $37,640 $274,913 $13,255 $211,888 Prologis North American Industrial Fund III 17,655 13,165 902,372 647,183 2,633 10,532 129,437 3,026 22,495 Prologis Targeted U.S. Logistics Fund 44,435 55,085 4,158,395 1,605,989 13,239 52,952 385,960 6,943 636,375 Prologis Mexico Industrial Fund 9,502 9,035 599,672 214,149 1,807 7,228 42,830 962 50,010 Prologis SGP Mexico 6,361 7,069 415,197 214,371 1,527 6,108 46,304 (12,104) 33,638 Brazil Fund and joint ventures 2,576 5,703 240,013 - 285 1,140 - 63,526 170,230
Americas 127,869 130,866 9,203,940 3,873,857 28,901 115,600 879,444 75,608 1,124,636
Prologis European Properties Fund II 55,404 72,971 4,675,191 1,677,590 22,365 89,460 514,181 (8,078) 388,032 Prologis Targeted Europe Logistics Fund 12,466 18,906 1,521,185 620,689 6,116 24,464 200,793 (2,343) 263,334 Prologis European Logistics Partners (D) 48,743 7,637 3,212,671 356,346 3,818 105,729 178,173 (7,281) 1,356,268 Europe Logistics Venture I 3,123 4,667 231,695 - 700 2,800 - 591 33,949
Europe 119,736 104,181 9,640,742 2,654,625 32,999 222,453 893,147 (17,111) 2,041,583
Prologis Japan Fund 1 6,703 18,837 1,278,965 704,505 3,767 15,068 140,901 21,424 127,888 Nippon Prologis REIT (E) 9,574 12,786 1,893,008 857,056 1,918 15,344 128,558 (3,032) 128,888 Prologis China Logistics Venture 1 3,750 3,419 227,642 138,000 513 2,052 20,700 6,044 35,234
Asia 20,027 35,042 3,399,615 1,699,561 6,198 32,464 290,159 24,436 292,010 Total 267,632 $270,089 $22,244,297 $8,228,043 $68,098 $370,517 $2,062,750 $82,933 $3,458,229
(A) These funds are or may 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) 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 and has sold properties to an entity in which it maintains an equity interest. We also have other joint ventures that we account for using the equity method. We show our ownership in these entities at our effective ownership and include the properties in our owned and managed pool.
(C) 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. (D) Balance sheet information represents value at the end of the period. NOI represents actual NOI earned by the co-investment venture during the quarter.
(E)Because this entity is a public company in Japan that has not reported financials results, we are presenting the gross book value of buildings based on contribution amounts, debt information based on 24 public filings and NOI based upon actual NOI earned while these properties were consolidated.
24 Copyright © 2013 Prologis
Private Capital
Detail Information
Supplemental 1Q 2013
Investment Information
Co-Investment Ventures Type Investment Type Geographic Focus Ownership Date Established Term / Structure
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 Targeted U.S. Logistics Fund (A) Core Unconsolidated US 24.0% 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 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)(B) Development Unconsolidated Brazil 50.0% December 2010 Closed end Prologis Targeted Europe Logistics Fund (A) Core Unconsolidated Europe 32.4% June 2007 Open end Prologis European Properties Fund II (A) Core Unconsolidated Europe 30.7% August 2007 Open end Europe Logistics Venture 1 (A) Core Unconsolidated Europe 15.0% February 2011 Open end Prologis European Logistics Partners (A) Core Unconsolidated Europe 50.0% March 2013 Open end Prologis Japan Fund 1 Core Unconsolidated Japan 20.0% June 2005 Closed end
Nippon Prologis REIT (A) Core Unconsolidated Japan 15.0% February 2013 Public, Tokyo Exchange Prologis China Logistics Venture 1 (A) Core/Development Unconsolidated China 15.0% March 2011 Closed end
Information by Unconsolidated Co-investment Venture (C):
Prologis’ Share
First Gross Book Value of First 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 Industrial Fund 47,340 $40,809 $2,888,291 $1,192,165 $9,410 $37,640 $274,913 $13,255 $211,888 Prologis North American Industrial Fund III 17,655 13,165 902,372 647,183 2,633 10,532 129,437 3,026 22,495 Prologis Targeted U.S. Logistics Fund 44,435 55,085 4,158,395 1,605,989 13,239 52,952 385,960 6,943 636,375 Prologis Mexico Industrial Fund 9,502 9,035 599,672 214,149 1,807 7,228 42,830 962 50,010 Prologis SGP Mexico 6,361 7,069 415,197 214,371 1,527 6,108 46,304 (12,104) 33,638 Brazil Fund and joint ventures 2,576 5,703 240,013 - 285 1,140 - 63,526 170,230
Americas 127,869 130,866 9,203,940 3,873,857 28,901 115,600 879,444 75,608 1,124,636
Prologis European Properties Fund II 55,404 72,971 4,675,191 1,677,590 22,365 89,460 514,181 (8,078) 388,032 Prologis Targeted Europe Logistics Fund 12,466 18,906 1,521,185 620,689 6,116 24,464 200,793 (2,343) 263,334 Prologis European Logistics Partners (D) 48,743 7,637 3,212,671 356,346 3,818 105,729 178,173 (7,281) 1,356,268 Europe Logistics Venture I 3,123 4,667 231,695 - 700 2,800 - 591 33,949
Europe 119,736 104,181 9,640,742 2,654,625 32,999 222,453 893,147 (17,111) 2,041,583
Prologis Japan Fund 1 6,703 18,837 1,278,965 704,505 3,767 15,068 140,901 21,424 127,888 Nippon Prologis REIT (E) 9,574 12,786 1,893,008 857,056 1,918 15,344 128,558 (3,032) 128,888 Prologis China Logistics Venture 1 3,750 3,419 227,642 138,000 513 2,052 20,700 6,044 35,234
Asia 20,027 35,042 3,399,615 1,699,561 6,198 32,464 290,159 24,436 292,010 Total 267,632 $270,089 $22,244,297 $8,228,043 $68,098 $370,517 $2,062,750 $82,933 $3,458,229
(A) These funds are or may 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) 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 and has sold properties to an entity in which it maintains an equity interest. We also have other joint ventures that we account for using the equity method. We show our ownership in these entities at our effective ownership and include the properties in our owned and managed pool.
(C) 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. (D) Balance sheet information represents value at the end of the period. NOI represents actual NOI earned by the co-investment venture during the quarter.
(E)Because this entity is a public company in Japan that has not reported financials results, we are presenting the gross book value of buildings based on contribution amounts, debt information based on 24 public filings and NOI based upon actual NOI earned while these properties were consolidated.
24 Copyright © 2013 Prologis
Capitalization
Debt and Equity Summary
(dollars and shares in millions) Supplemental 1Q 2013
Prologis
Unsecured Secured C onsolidat ed Tot al U nconsolidat ed Pro lo gis W t d. A vg.
Senior Exchang eable C redit Ot her Mort g age Ent it ies C onso lidat ed Ent it ies To t al Share of Prologis Int erest
Maturity Debt Deb t Facilit ies D ebt D eb t Tot al Debt Debt Deb t Debt Tot al D eb t Share ( %) R at e ( A )
2013 $299 $341 $0 $0 $42 $682 $117 $799 $864 $1,663 $939 56.5% 4.3%
2014 895 - 383 526 427 2,231 79 2,310 1,728 4,038 2,790 69.1% 3.8%
2015 175 460 38 1 122 796 51 847 960 1,807 1,069 59.2% 4.2%
2016 640 - - 1 310 951 129 1,080 1,490 2,570 1,309 50.9% 5.2%
2017 700 - - 1 229 930 39 969 725 1,694 1,101 65.0% 5.2%
2018 900 - - 1 113 1,014 73 1,087 712 1,799 1,177 65.4% 5.5%
2019 647 - - 1 296 944 2 946 216 1,162 1,009 86.8% 6.3%
2020 667 - - 1 9 677 2 679 958 1,637 904 55.2% 5.8%
2021 - - - 1 140 141 2 143 345 488 226 46.3% 3.5%
2022 - - - - 7 7 2 9 202 211 51 24.2% 4.8%
Thereafter - 1 - 10 137 148 6 154 - 154 150 97.4% 7.4%
Subtotal 4,923 802 421 543 1,832 8,521 502 9,023 8,200 17,223 10,725 62.3%
Unamortized net premiums (discounts) 70 (64) - - 43 49 2 51 28 79 58 73.4%
Subtotal 4,993 738 421 543 1,875 8,570 504 9,074 8,228 17,302 $10,783 62.3% 4.8%
Third party share of debt - - - - - - (354) (354) (6,165) (6,519)
Prologis share of debt $4,993 $738 $421 $543 $1,875 $8,570 $150 $8,720 $2,063 $10,783
Prologis share of debt by local currency
Dollars $4,350 $738 $0 $30 $1,682 $6,800 $128 $6,928 $901 $ 9,395 $7,829
Euro 536 - 38 380 - 954 19 973 732 2,887 1,705
GBP - - - - - - - 147 533 147
Yen 107 - 383 133 193 816 - 816 269 1,617 1,085
Other - - - - - - 3 3 14 35 17
Prologis share of debt $4,993 $738 $421 $543 $1,875 $8,570 $150 $8,720 $2,063 $10,783
Weighted average interest rate (B) 5.6% 4.4% 1.5% 1.8% 5.2% 4.9% 4.3% 4.9% 4.2% 5.0% 4.8%
Weighted average remaining maturity in years 4.2 1.2 1.0 1.3 4.5 3.6 3.6 3.6 3.6 4.1 3.6
Market Equity Preferred Stock Liquidity
Dividend Redemption
Security Shares Price Value Series Rate Value
Common Stock 461.6 $39.98 $18,455 Series L 6.5% $50.0 Aggregate lender commitments $ 2,034
Partnership Units 3.1 $39.98 124 Series M 6.8% 57.5 Less:
Total 464.7 $18,579 Series O 7.0% 75.0 Borrow ings outstanding 421
Series P 6.9% 50.0 Outstanding letters of credit 68
Series R 6.8% 125.0 Current availability $ 1,545
Series S 6.8% 125.0
Preferred stock redeemed Unrestricted cash 785
in April 2013 6.8% $482.5 Total liquidity $ 2,330
Series Q 8.5% 100.0
7.1% $582.5
(A) Based on Prologis share of the total debt. Interest rate is based on the effective rate (which includes the amortization of related premiums and discounts) assuming the net premiums
(discounts) associated with the respective debt were included in the maturities by year.
(B) Interest rate is based on the effective rate and weighted based on borrowings outstandig.
26 Copyright © 2013 Prologis
Capitalization
Debt and Equity Summary
(dollars and shares in millions) Supplemental 1Q 2013
Prologis
Unsecured Secured C onsolidat ed Tot al U nconsolidat ed Pro lo gis W t d. A vg.
Senior Exchang eable C redit Ot her Mort g age Ent it ies C onso lidat ed Ent it ies To t al Share of Prologis Int erest
Maturity Debt Deb t Facilit ies D ebt D eb t Tot al Debt Debt Deb t Debt Tot al D eb t Share ( %) R at e ( A )
2013 $299 $341 $0 $0 $42 $682 $117 $799 $864 $1,663 $939 56.5% 4.3%
2014 895 - 383 526 427 2,231 79 2,310 1,728 4,038 2,790 69.1% 3.8%
2015 175 460 38 1 122 796 51 847 960 1,807 1,069 59.2% 4.2%
2016 640 - - 1 310 951 129 1,080 1,490 2,570 1,309 50.9% 5.2%
2017 700 - - 1 229 930 39 969 725 1,694 1,101 65.0% 5.2%
2018 900 - - 1 113 1,014 73 1,087 712 1,799 1,177 65.4% 5.5%
2019 647 - - 1 296 944 2 946 216 1,162 1,009 86.8% 6.3%
2020 667 - - 1 9 677 2 679 958 1,637 904 55.2% 5.8%
2021 - - - 1 140 141 2 143 345 488 226 46.3% 3.5%
2022 - - - - 7 7 2 9 202 211 51 24.2% 4.8%
Thereafter - 1 - 10 137 148 6 154 - 154 150 97.4% 7.4%
Subtotal 4,923 802 421 543 1,832 8,521 502 9,023 8,200 17,223 10,725 62.3%
Unamortized net premiums (discounts) 70 (64) - - 43 49 2 51 28 79 58 73.4%
Subtotal 4,993 738 421 543 1,875 8,570 504 9,074 8,228 17,302 $10,783 62.3% 4.8%
Third party share of debt - - - - - - (354) (354) (6,165) (6,519)
Prologis share of debt $4,993 $738 $421 $543 $1,875 $8,570 $150 $8,720 $2,063 $10,783
Prologis share of debt by local currency
Dollars $4,350 $738 $0 $30 $1,682 $6,800 $128 $6,928 $901 $ 9,395 $7,829
Euro 536 - 38 380 - 954 19 973 732 2,887 1,705
GBP - - - - - - - 147 533 147
Yen 107 - 383 133 193 816 - 816 269 1,617 1,085
Other - - - - - - 3 3 14 35 17
Prologis share of debt $4,993 $738 $421 $543 $1,875 $8,570 $150 $8,720 $2,063 $10,783
Weighted average interest rate (B) 5.6% 4.4% 1.5% 1.8% 5.2% 4.9% 4.3% 4.9% 4.2% 5.0% 4.8%
Weighted average remaining maturity in years 4.2 1.2 1.0 1.3 4.5 3.6 3.6 3.6 3.6 4.1 3.6
Market Equity Preferred Stock Liquidity
Dividend Redemption
Security Shares Price Value Series Rate Value
Common Stock 461.6 $39.98 $18,455 Series L 6.5% $50.0 Aggregate lender commitments $ 2,034
Partnership Units 3.1 $39.98 124 Series M 6.8% 57.5 Less:
Total 464.7 $18,579 Series O 7.0% 75.0 Borrow ings outstanding 421
Series P 6.9% 50.0 Outstanding letters of credit 68
Series R 6.8% 125.0 Current availability $ 1,545
Series S 6.8% 125.0
Preferred stock redeemed Unrestricted cash 785
in April 2013 6.8% $482.5 Total liquidity $ 2,330
Series Q 8.5% 100.0
7.1% $582.5
(A) Based on Prologis share of the total debt. Interest rate is based on the effective rate (which includes the amortization of related premiums and discounts) assuming the net premiums
(discounts) associated with the respective debt were included in the maturities by year.
(B) Interest rate is based on the effective rate and weighted based on borrowings outstandig.
26 Copyright © 2013 Prologis
Capitalization
Debt Covenants and Other Metrics
(dollars in thousands) Supplemental 1Q 2013
Covenants as of March 31, 2013 (A)
Legacy AMB Indenture New Prologis Indenture
Covenant Actual Covenant Actual
Outstanding indebtedness to adjusted total assets <60% 34.0% <60% 34.0%
Fixed charge coverage ratio >1.5x 3.06x >1.5x 3.05x
Maximum secured debt to adjusted total assets <40% 8.5% <40% 8.5%
Unencumbered assets ratio to unsecured debt >150% 314.2% >150% 314.2%
Global Line
Covenant Actual
Maximum consolidated leverage to total asset value <60% 36.0%
Fixed charge coverage ratio >1.5x 261x.
Unencumbered debt service coverage ratio >1.5x 3.24x
Maximum secured debt to total asset value <35% 9.8%
Minimum net w orth >$10.0 billion $14.5 billion
Debt Metrics (A) (B) (C)
2013 2012
First Quarter Fourth Quarter
Debt as % of gross real estate assets 37.5% 43.4%
Secured debt as % of gross real estate assets 14.6% 18.3%
Unencumbered gross real estate assets to unsecured debt 252.4% 234.6%
Fixed charge coverage ratio 2.19x 2.18x
Debt/Adjusted EBITDA 7.52x 8.80x
Debt/Adjusted EBITDA (adjusted for development) 6.18x 7.43x
Encumbrances as of March 31, 2013
Consolidated: Unencumbered Encumbered Total
Operating properties $ 12,145,077 $ 5,375,998 $ 17,521,075
Development portfolio 884,352 - 884,352
Land 1,688,211 65,842 1,754,053
Other real estate investments 436,328 - 436,328
Notes receivable backed by real estate - 188,000 188,000
Assets held for sale 8,012 17,379 25,391
Total consolidated 15,161,980 5,647,219 20,809,199
Unconsolidated operating properties - Prologis’ share 2,751,106 3,456,422 6,207,528
Unconsolidated development portfolio and land - Prologis’ share 82,027 5,014 87,041
Gross real estate assets $ 17,995,113 $ 9,108,655 $ 27,103,768
Secured and Unsecured Debt as of March 31, 2013
Unsecured Secured
Debt Mortgage Debt Total
Prologis debt $ 6,689,356 $ 1,832,306 $ 8,521,662
Consolidated entities debt 64,392 436,766 501,158
Our share of unconsolidated entities debt 375,183 1,678,557 2,053,740
Total debt - at par 7,128,931 3,947,629 11,076,560
Third party share of consolidated debt (47,413) (305,265) (352,678)
Total Prologis share of debt - at par 7,081,518 3,642,364 10,723,882
Premium (discount) - consolidated 8,107 43,196 51,303
Third party share of consolidated debt premium (discount) - (1,321) (1,321)
Our share of premium (discount) - unconsolidated - 9,009 9,009
Total debt, net of premium (discount) $ 7,089,625 $ 3,693,248 $ 10,782,873
(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.
(C) See Notes and Definitions for calculation of amounts.
27 Copyright © 2013 Prologis
Capitalization
Assets Under Management
(dollars in millions) Supplemental 1Q 2013
$ 29,944 $ 46,895 $ 46,895
50,000
Committed Equity/Investment $1,904
45,000 Asia
12.9%
40,000 Investors’ share of assets in JVs/funds Europe AUM Private 21.9% 35,000 $15,047 Preferred Shares Capital $582 $22,779
30,000
Prologis share of assets in JVs/funds $5,828
25,000 Debt $10,783
20,000
Americas
Directowned and other Total 65.2%
15,000 assets Enterprise $24,116 Value Equity Cap 10,000 $29,944 $18,579
5,000
0
Total Enterprise Value Assets Under Management Total AUM by Division
28 Copyright © 2013 Prologis
Net Asset Value
Components
(in thousands, except for percentages and per square foot) Supplemental 1Q 2013
Real Estate Operations
F irst Quart er First Quart er A nnualized
A d just ed C ash A djust ed C ash A djust ed 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
CON SOLID ATED OP ER A T IN G P OR T F OLIO
Properties generating net operating income
Americas 224,746 $ 14,603,449 $ 65 $ 225,531 $ 225,531 $ 902,124 96.0% Europe 15,391 1,164,050 76 23,723 23,723 94,892 92.8% Asia 7,787 1,126,436 145 14,338 14,338 57,352 95.0% Pro forma adjustment for mid-quarter acquisitions/development completions 1,759 7,036 Sub-total 247,924 16,893,935 68 263,592 265,351 1,061,404 95.7%
Properties generating net operating loss
Americas 8,893 478,177 54 (2,452) 41.1% Europe 939 62,350 66 (488) 0.0% Sub-total 9,832 540,527 55 (2,940) 37.1%
T o tal co nso lidated po rtfo lio 257,756 $ 17,434,462 $ 68 $ 260,652 $ 265,351 $ 1,061,404 93.5%
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 28,392 $ 2,056,976 $ 72 $ 29,439 $ 29,439 $ 117,756 93.6% Europe 45,854 3,566,139 78 35,448 35,448 141,792 93.2% Asia 3,339 573,891 172 6,291 6,291 25,164 98.0% Pro forma adjustment for mid-quarter acquisitions/development completions 1,246 4,984 Pro forma adjustment for PELP and NPR 28,762 115,048
P ro lo gis share o f unco nso lidated o perating po rtfo lio 77,585 $ 6,197,006 $ 80 $ 71,178 $ 101,186 $ 404,744 93.5% T o tal o perating po rtfo lio 335,341 $ 23,631,468 $ 70 $ 331,830 $ 366,537 $ 1,466,148 93.5%
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
CON SOLID ATED P restabilized
Americas 1,068 $ 60,717 $ 70,214 $ 66 $ 5,123 26.2% Europe 461 22,209 24,506 53 2,379 0.3% Asia 1,024 159,519 161,032 157 11,628 58.4%
34.4% P ro perties under develo pment
Americas 10,304 337,585 689,648 67 46,323 Europe 963 48,409 81,884 85 6,244 Asia 4,305 255,084 531,179 123 39,293
T o tal co nso lidated po rtfo lio 18,125 $ 883,523 $ 1,558,463 $ 86 $ 110,990
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 1,581 $ 28,003 $ 162,074 $ 103 18,156 Europe 227 8,402 17,552 77 1,283 Asia 251 5,724 13,914 55 1,142
P ro lo gis share o f unco nso lidated develo pment po rtfo lio 2,059 $ 42,129 $ 193,540 $ 94 $ 20,581
T o tal develo pment po rtfo lio 20,184 $ 925,652 $ 1,752,003 $ 87 $ 131,571
Prologis share of estimated value creation (see Capital Deployment—Development Portfolio) 370,973
T o tal develo pment po rtfo lio , including estimated value creatio n $ 1,296,625
29 Copyright © 2013 Prologis
Net Asset Value
Components—Continued
(in thousands) Supplemental 1Q 2013
Balance Sheet and Other Items
A s o f M arch 31, 2013
CONSOLIDATED
Other assets
Cash and cash equivalents $ 785,359 Restricted cash 48,605 Deposits, prepaid assets and other tangible assets 497,443 Other real estate investments 436,328 Prologis’ share of value added operating properties 97,135 Accounts receivable 139,691 Notes receivable backed by real estate 188,000 Prologis receivable from unconsolidated co-investment ventures 132,152 Investments in and advances to other unconsolidated joint ventures 176,985 Assets held for sale, net of liabilities 7,705
Total other assets $ 2,509,403
Other liabilities
Accounts payable and other current liabilities 589,034 Deferred income taxes 181,363 Value added tax and other tax liabilities 54,453 Tenant security deposits 140,279 Other liabilities 325,328 Noncontrolling interests 709,638
Total liabilities and noncontrolling interests $ 2,000,095
UNCONSOLIDATED
Prologis share of net assets (liabilities) $ 82,933 Land
Investment B alance
Our share of original land basis $ 2,856,215
Current book value of land $ 1,754,053 Prologis share of book value of land in unconsolidated entities 44,912
Total $ 1,798,965 Private Capital / Development Management
F irst Quarter A nnualized
Private capital
Private capital revenue $ 33,635 $ 134,540 Private capital expenses (19,909) (79,636) Pro forma NOI adjustment to PELP and NPR for a full quarter 5,834 23,336
Private Capital NOI $ 19,560 $ 78,240 Development management income $ 2,192 $ 8,768 Debt and Preferred Stock
A s o f M arch 31, 2013
Prologis debt—at par $ 8,521,662 Consolidated investee debt—at par 501,158 Prologis share of unconsolidated debt—at par 2,053,741 Subtotal debt—at par 11,076,561 Preferred stock at redemption value 482,500 Preferred stock 100,000 Total debt and preferred stock $ 11,659,061 Outstanding shares of common stock 461,642
30 Copyright © 2013 Prologis
Notes and Definitions
Supplemental 1Q 2013
Calculation of Per Share Amounts is as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
2013 2012
Net earnings
Net earnings
$ 265,416
$ 202,412
Noncontrolling interest attributable to exchangeable partnership units
50
1,003
Interest expense on exchangeable debt assumed exchanged
4,235
4,216
Adjusted net earnings - Diluted
$ 269,701
$ 207,631
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
1,146
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
477,059
476,107
Net earnings per share - Basic
$ 0.58
$ 0.44
Net earnings per share - Diluted
$ 0.57
$ 0.44
FFO, as defined by Prologis
FFO, as defined by Prologis
$ 357,800
$ 262,072
Noncontrolling interest attributable to exchangeable limited partnership units
1,254
1,003
Interest expense on exchangeable debt assumed exchanged
4,235
4,216
FFO, as defined by Prologis - Diluted
$ 363,289
$ 267,291
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
3,067
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
478,980
476,107
FFO, as defined by Prologis per share - Diluted
$ 0.76
$ 0.56
Core FFO
Core FFO
$ 187,937
$ 184,765
Noncontrolling interest attributable to exchangeable limited partnership units
489
1,003
Interest expense on exchange debt assumed converted
4,235
4,216
Core FFO - Diluted
$ 192,661
$ 189,984
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
3,039
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
478,952
476,107
Core FFO per share - Diluted
$ 0.40
$ 0.40
Debt Metrics. See below for the detailed calculations for the three months ended for the respective
period (dollars in thousands):
Three Months Ended
Mar. 31
Dec. 31
2013
2012
Debt as a % of gross real estate assets:
Total debt - at par
$ 11,076,561
$
13,500,081
Less: cash and cash equivalents
(785,359)
(100,810)
Less: unconsolidated entities cash - Prologis share
(135,550)
(130,981)
Total debt, net of adjustments
$ 10,155,652
$
13,268,290
Gross real estate assets
$ 27,103,768
$
30,543,666
Debt as a % of gross real estate assets
37.5%
Secured debt as a % of gross real estate assets:
Secured debt - at par $ 3,947,629 $ 5,590,729
Gross real estate assets $ 27,103,768 $ 30,543,666
Secured debt as a % of gross real estate assets 14.6% 18.3%
Unencumbered gross real estate assets to unsecured debt:
Unencumbered gross real estate assets $ 17,995,113 $ 18,556,566
Unsecured debt - at par $ 7,128,932 $ 7,909,352
Unencumbered gross real estate assets to unsecured debt 252.4% 234.6%
Fixed Charge Coverage ratio:
Adjusted EBITDA $ 337,668 $ 376,940
Pro forma adjustment 29,533 -
NOI from disposed properties 468 5,018
Adjusted EBITDA, including NOI from disposed properties $ 367,669 $ 381,958
Interest expense $ 115,028 $ 123,623
Amortization and write-off of deferred loan costs (3,288) (3,748)
Amortization of debt premium (discount), net 10,715 10,273
Capitalized interest 13,744 13,343
Preferred stock dividends 10,305 10,305
Our share of fixed charges from unconsolidated entities 21,046 21,133
Total fixed charges $ 167,550 $ 174,929
Fixed charge coverage ratio 2.19x 2.18x
Debt to Adjusted EBITDA:
Total debt, net of adjustments $ 10,155,652 $ 13,268,290
Adjusted EBITDA-annualized $ 1,350,672 $ 1,507,760
Debt to Adjusted EBITDA ratio 7.52x 8.80x
Debt to Adjusted EBITDA (adjusted for development):
Total debt, net of adjustments 10,155,652 13,268,290
Add: costs to complete - Prologis share 796,340 827,698
Less: current book value of land - Prologis share (1,798,965) (1,836,709)
$ 9,153,027 $ 12,259,279
Adjusted EBITDA-annualized 1,350,672 1,507,760
Add: annualized proforma NOI - Prologis share 131,571 141,376
$ 1,482,243 $ 1,649,136
Debt to Adjusted EBITDA (adjusted for development) ratio 6.18x 7.43x
43.4%
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.
32 Copyright © 2013 Prologis
Notes and Definitions
Supplemental 1Q 2013
Calculation of Per Share Amounts is as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
2013 2012
Net earnings
Net earnings
$ 265,416
$ 202,412
Noncontrolling interest attributable to exchangeable partnership units
50
1,003
Interest expense on exchangeable debt assumed exchanged
4,235
4,216
Adjusted net earnings - Diluted
$ 269,701
$ 207,631
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
1,146
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
477,059
476,107
Net earnings per share - Basic
$ 0.58
$ 0.44
Net earnings per share - Diluted
$ 0.57
$ 0.44
FFO, as defined by Prologis
FFO, as defined by Prologis
$ 357,800
$ 262,072
Noncontrolling interest attributable to exchangeable limited partnership units
1,254
1,003
Interest expense on exchangeable debt assumed exchanged
4,235
4,216
FFO, as defined by Prologis - Diluted
$ 363,289
$ 267,291
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
3,067
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
478,980
476,107
FFO, as defined by Prologis per share - Diluted
$ 0.76
$ 0.56
Core FFO
Core FFO
$ 187,937
$ 184,765
Noncontrolling interest attributable to exchangeable limited partnership units
489
1,003
Interest expense on exchange debt assumed converted
4,235
4,216
Core FFO - Diluted
$ 192,661
$ 189,984
Weighted average common shares outstanding - Basic
461,468
459,203
Incremental weighted average effect on exchange of limited partnership units
3,039
3,347
Incremental weighted average effect of stock awards
2,566
1,678
Incremental weighted average effect on exchange of certain exchangeable debt
11,879
11,879
Weighted average common shares outstanding - Diluted
478,952
476,107
Core FFO per share - Diluted
$ 0.40
$ 0.40
Debt Metrics. See below for the detailed calculations for the three months ended for the respective
period (dollars in thousands):
Three Months Ended
Mar. 31
Dec. 31
2013
2012
Debt as a % of gross real estate assets:
Total debt - at par
$ 11,076,561
$
13,500,081
Less: cash and cash equivalents
(785,359)
(100,810)
Less: unconsolidated entities cash - Prologis share
(135,550)
(130,981)
Total debt, net of adjustments
$ 10,155,652
$
13,268,290
Gross real estate assets
$ 27,103,768
$
30,543,666
Debt as a % of gross real estate assets
37.5%
Secured debt as a % of gross real estate assets:
Secured debt - at par $ 3,947,629 $ 5,590,729
Gross real estate assets $ 27,103,768 $ 30,543,666
Secured debt as a % of gross real estate assets 14.6% 18.3%
Unencumbered gross real estate assets to unsecured debt:
Unencumbered gross real estate assets $ 17,995,113 $ 18,556,566
Unsecured debt - at par $ 7,128,932 $ 7,909,352
Unencumbered gross real estate assets to unsecured debt 252.4% 234.6%
Fixed Charge Coverage ratio:
Adjusted EBITDA $ 337,668 $ 376,940
Pro forma adjustment 29,533 -
NOI from disposed properties 468 5,018
Adjusted EBITDA, including NOI from disposed properties $ 367,669 $ 381,958
Interest expense $ 115,028 $ 123,623
Amortization and write-off of deferred loan costs (3,288) (3,748)
Amortization of debt premium (discount), net 10,715 10,273
Capitalized interest 13,744 13,343
Preferred stock dividends 10,305 10,305
Our share of fixed charges from unconsolidated entities 21,046 21,133
Total fixed charges $ 167,550 $ 174,929
Fixed charge coverage ratio 2.19x 2.18x
Debt to Adjusted EBITDA:
Total debt, net of adjustments $ 10,155,652 $ 13,268,290
Adjusted EBITDA-annualized $ 1,350,672 $ 1,507,760
Debt to Adjusted EBITDA ratio 7.52x 8.80x
Debt to Adjusted EBITDA (adjusted for development):
Total debt, net of adjustments 10,155,652 13,268,290
Add: costs to complete - Prologis share 796,340 827,698
Less: current book value of land - Prologis share (1,798,965) (1,836,709)
$ 9,153,027 $ 12,259,279
Adjusted EBITDA-annualized 1,350,672 1,507,760
Add: annualized proforma NOI - Prologis share 131,571 141,376
$ 1,482,243 $ 1,649,136
Debt to Adjusted EBITDA (adjusted for development) ratio 6.18x 7.43x
43.4%
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.
32 Copyright © 2013 Prologis
Notes and Definitions
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.
33
Supplemental 1Q 2013
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
Copyright © 2013 Prologis
Notes and Definitions
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 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.
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.
Supplemental 1Q 2013
? 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 Adjusted 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”) was as follows (in thousands):
Three Months Ended March 31, 2013 2012
Gross overhead. $ 106,745 $ 101,814 Less: rental expense . (9,466) (8,158) Less: private capital expenses. (19,909) (16,881) Capitalized amounts . (21,173) (16,616)
G&A $ 56,197 $ 60,159
34 Copyright © 2013 Prologis
Notes and Definitions
G&A as a percent of Assets Under Management (in thousands):
Annualized gross overhead . $ 426,980 Less: annualized rental expense. (37,864) Less: annualized capitalized amounts. (84,692) Adjusted G&A . $ 304,424
Operating properties . $ 39,765,372 Development portfolio—TEI. 2,037,375 Land portfolio . 1,866,523 Other real estate investments. 436,328 Assets held for sale . 25,391 Total Assets Under Management. $ 44,130,989
G&A as % of Assets Under Management 0.69%
G&A as a percent of Assets Under Management – Prologis Share (in thousands):
Annualized G&A . $ 224,788 Less: annualized private capital revenue . (134,540) Add: annualized private capital expenses. 79,636 Adjusted G&A . $ 169,884
Operating properties—Prologis share . $ 23,728,603 Development portfolio—Prologis share of TEI . 1,752,002 Land portfolio—Prologis share. 1,798,965 Other real estate investments. 436,328 Assets held for sale . 25,391 Total Assets Under Management—Prologis share . $ 27,741,289
G&A as % of Assets Under Management—Prologis share 0.61%
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 March 31, 2013 2012
Gross interest expense. $ 136,199 $ 148,456 Amortization of discount (premium), net. (10,715) (6,737) Amortization of deferred loan costs. 3,288 4,956 Interest expense before capitalization. 128,772 146,675 Capitalized amounts . (13,744) (13,619)
Net interest expense $ 115,028 $ 133,056
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.
Supplemental 1Q 2013
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 Operating Income (“NOI”) represents rental income less rental expenses.
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 unconsolidated joint ventures and the properties they own.
Pre-stabilized Development represents properties that are complete but have not yet reached Stabilization.
Private Capital NOI represents private capital revenue less private capital expenditures.
Pro forma Adjusted Cash NOI for the properties in our operating portfolio 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.
35 Copyright © 2013 Prologis
Notes and Definitions
Supplemental 1Q 2013
A reconciliation of our rental income and rental expenses, computed under GAAP, to adjusted net generally the same as for the total operating portfolio. In order to derive an appropriate measure of operating income (NOI) for the operating portfolio for purposes of the Net Asset Value calculation is period-to-period operating performance, we remove the effects of foreign currency exchange rate as follows: 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.
Calculation of Adjusted Cash NOI (in thousands):
Rental income. $ 454,789 Same Store Average Occupancy represents the average occupied percentage for the period. Rental expenses . (133,919) NOI. 320,870 Same Store Rental Expense represents gross property operating expenses. In computing the Net termination fees and adjustments (a) . (1,269) percentage change in rental expenses for the same store analysis, rental expenses include Less: Actual NOI for development portfolio and other . (5,780) 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
Less: NOI on contributed properties (b) . (62,604) our wholly owned management companies provide property management services to each
Adjusted NOI for operating portfolio owned at March 31, 2013 251,217 property (generally, the fee is based on a percentage of revenues).
Straight-lined rents (c) . (12,059)
Free rent (c) . 13,067 Same Store Change in Rental Rate represents the change in effective rental rates (average rate Amortization of lease intangibles (c) . 8,427 over the lease term) on new leases signed during the period as compared with the previous
First quarter Adjusted Cash NOI $ 260,652 effective rental rates in that same space.
| (a) |
|
Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to |
Same Store Rental Income includes the amount of rental expenses that are recovered from 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 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 calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring adjusted to remove the net termination fees recognized for each period. Removing the net operating performance. termination fees for the same store calculation allows us to evaluate the growth or decline in each
(b) The actual NOI for properties that were contributed and not part of discontinued operations during the three-month period is removed. property’s rental income without regard to items that are not indicative of the property’s recurring operating performance.
(c) Straight-lined rents, adjusted for free rent amounts, and amortization of above and below market leases are removed from rental income computed under GAAP for the operating portfolio to allow for the calculation of a cash yield. 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.
Regional Markets, similar to global markets, also benefit from large-population centers and Tenant Retention is the square footage of all leases rented by existing tenants divided by the demand. They are located at key crossroads in the supply chain and/or near economic centers for square footage of all expiring and rented leases during the reporting period, excluding the square leading national or global industries. Our assets reflect the highest quality class-A product in that footage of tenants that default or buy-out prior to expiration of their lease, short-term tenants and market and are often less supply- constrained and focus on delivering bulk goods to customers. the square footage of month-to-month leases.
Rental Income includes the following (in thousands): 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 Three Months Ended change. Non-U.S. dollar investments are translated to U.S. dollars using the exchange rate at March 31, period end or the date of development start for purposes of calculating development starts in any
2013 2012 period.
Rental income. $ 348,917 $ 348,777
Amortization of lease intangibles. (9,919) (8,935) Total Market Capitalization is defined as market equity plus our share of total debt and preferred Rental expense recoveries . 99,113 86,915 stock.
Straight-lined rents. 16,678 17,203 $ 454,789 $ 443,960 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
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 unconsolidated co-investment 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 March 31, 2013, as those operating
properties in operation at January 1, 2012 that were in operation throughout the full periods in both
2012 and 2013 either by Prologis 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
36
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.
Copyright © 2013 Prologis
Notes and Definitions
Supplemental 1Q 2013
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 ma y 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.
37 Copyright © 2013 Prologis