Long-Term Compensation

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Long-Term Compensation

10. Long-Term Compensation

Under its incentive plans, Prologis has stock options and full value awards (restricted stock, restricted share units (“RSUs”) and performance based shares (“PSAs”)) outstanding.

Summary of Activity

The activity for the nine months ended September 30, 2013, with respect to our stock options, was as follows:

	Options Outstanding
	Number of Options			Weighted Average Exercise Price		Options Exercisable
Balance at December 31, 2012		7,513,217
Exercised		(755,264	)
Forfeited / Expired		(322,925	)
Balance at September 30, 2013		6,435,028		$	36.04		6,290,114

The activity for the nine months ended September 30, 2013, with respect to our unvested restricted stock, was as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Balance at December 31, 2012		687,277
Vested		(352,727	)
Forfeited		(18,326	)
Balance at September 30, 2013		316,224		$	34.01

The activity for the nine months ended September 30, 2013, with respect to our RSU and PSA awards, was as follows:

	Number of Shares			Weighted Average Grant-Date Fair  Value		Number of Shares Vested
Balance at December 31, 2012		1,999,348
Granted		1,288,457
Vested		(828,158	)
Forfeited		(67,010	)
Balance at September 30, 2013		2,392,637		$	36.88		79,306

During the nine months ended September 30, 2013, we granted 1,288,457 RSUs which, generally, will vest over three years.

Outperformance Plan

In February 2013, we granted points under our outperformance plan with an aggregate fair value of $23.9 million as of the date of the grant. Such points relate to a three-year performance period that began on January 1, 2013, and will end on December 31, 2015. If the compensation pool for this performance period is funded, the participants’ points will be paid in the form of restricted common stock. As the 2013 award is equity-classified, the fair value of the award is measured at the grant-date and amortized over the performance period. We recognized $2.0 million and $6.0 million of compensation expense during the three and nine months ended September 30, 2013, respectively, for the 2013 award.

On May 1, 2013, the compensation committee of the Board approved a modification of the settlement terms for the award granted under our outperformance plan in 2012. The 2012 award is now payable in shares of common stock instead of cash and was reclassified from liability to equity based on the fair value at the modification date using the Monte Carlo simulation model. The new grant-date fair value less the amount of compensation expense recognized to date is amortized over the remaining performance period, through December 31, 2014. We recognized $3.0 million and $12.0 million of compensation expense during the three and nine months ended September 30, 2013, respectively, for the 2012 award based on the fair value of $36.1 million as of the modification date in May 2013.