Noncontrolling Interests

3 Months Ended

Mar. 31, 2013

9. Noncontrolling Interests

Operating Partnership

We report noncontrolling interests related to several entities we consolidate but do not own 100% of the common equity. These entities include three real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are exchangeable into shares of the REIT’s common stock (or cash), generally at a rate of one share of common stock to one unit. We evaluated the noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer to determine whether temporary or permanent equity classification on the balance sheet is appropriate, including the requirement to settle in unregistered shares, and determined that these units meet the requirements to qualify for presentation as permanent equity. We also consolidate several entities in which we do not own 100% and the units of the entity are not exchangeable into our common stock.

If we contribute a property to a consolidated co-investment venture, the property is still reflected in our Consolidated Financial Statements, but due to our ownership of less than 100%, there is an increase in noncontrolling interest related to the contributed properties, which represents the cash we receive from our partners.

REIT

The noncontrolling interest of the REIT includes the noncontrolling interests presented in the Operating Partnership, as well as the common limited partnership units in the Operating Partnership that are not owned by the REIT. As of March 31, 2013, the REIT owned an approximate 99.59% common general partnership interest in the Operating Partnership.

The following is a summary of the noncontrolling interest and the consolidated entity’s total investment in real estate and debt at March 31, 2013 and December 31, 2012 (dollars in thousands):


	Our Ownership Percentage						Our Noncontrolling Interest				Total Investment In Real Estate				Debt
	2013			2012			2013		2012		2013		2012		2013		2012
Partnerships with exchangeable units (1)		various			various		$	44,538	$	44,476	$	852,680	$	826,605	$	—	$	—
Prologis Institutional Alliance Fund II		28.2	%		28.2	%		278,888		280,751		571,709		571,668		176,465		178,778
Mexico Fondo Logistico (AFORES)		20.0	%		20.0	%		163,357		157,843		395,249		388,960		209,652		214,084
Brazil Fund (2)		50.0	%		50.0	%		71,698		66,494		—		—		—		—
Prologis AMS		38.5	%		38.5	%		62,661		59,631		144,769		160,649		54,833		63,749
Other consolidated entities		various			various			37,729		43,930		371,570		404,825		60,231		62,061

Operating Partnership noncontrolling interests								658,871		653,125		2,335,977		2,352,707		501,181		518,672
Limited partners in the Operating Partnership (3)								50,767		51,194		—		—		—		—

REIT noncontrolling interests							$	709,638	$	704,319	$	2,335,977	$	2,352,707	$	501,181	$	518,672

(1)

At March 31, 2013 and December 31, 2012, there were 1,173,571 limited partnership units that were exchangeable into an equal number of shares of the REIT’s common stock. All of these outstanding limited partnership units are entitled to quarterly cash distributions equal to the quarterly dividends paid on our common stock.

(2)

We have a 50% ownership interest in and consolidate the Brazil Fund that in turn has investments in several joint ventures that are accounted for on the equity method. The Brazil Fund’s assets are investments in unconsolidated entities of $139.7 million. For additional information of our unconsolidated investment, see Note 4.

(3)

At March 31, 2013 and December 31, 2012, 1,893,266 units were associated with the limited partners in the Operating Partnership and were exchangeable into an equal number of shares of the REIT’s common stock. All of these outstanding limited partnership units are entitled to quarterly cash distributions equal to the quarterly distributions paid on our common stock.

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

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