UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 20132016
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:001-13545 (Prologis, Inc.) 001-14245 (Prologis, L.P.)
Prologis, Inc.
Prologis, L.P.
(Exact name of registrant as specified in its charter)
Maryland (Prologis, Inc.) Delaware (Prologis, L.P.) | 94-3281941 (Prologis, Inc.) 94-3285362 (Prologis, L.P.) | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Pier 1, Bay 1, San Francisco, California | 94111 | |
(Address or principal executive offices) | (Zip Code) |
(415) 394-9000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Name of Each Exchange on Which Registered | |||
Prologis, Inc. | Common Stock, | New York Stock Exchange | ||
Prologis, L.P. | 4.000% Notes due 2018 | New York Stock Exchange | ||
Prologis, L.P. | 1.375% Notes due | New York Stock Exchange | ||
Prologis, L.P. | 1.375% Notes due 2021 | New York Stock Exchange | ||
Prologis, L.P. | 3.000% Notes due 2022 | New York Stock Exchange | ||
Prologis, L.P. | 3.375% Notes due 2024 | New York Stock Exchange | ||
Prologis, L.P. | 3.000% Notes due 2026 | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
Prologis, Inc. -– NONE
Prologis, L.P. -– NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Prologis, Inc.: Yes þ☑ No ¨☐
Prologis, L.P.: Yesþ☑ No¨☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Prologis, Inc.: Yes¨☐ Noþ☑
Prologis, L.P.: Yes¨☐ Noþ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Prologis, Inc.: Yesþ☑ No¨☐ Prologis, L.P.: Yesþ☑ No¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website; if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter periods that the registrant was required to submit and post such files). Prologis, Inc.: Yesþ☑ No¨☐ Prologis, L.P.: Yesþ☑ No¨☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K.☐¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
Prologis, Inc.: | ☑ | ☐ | ||
☐ | ☐ |
Prologis, L.P.: | ☐ | ☐ | ||
☑ | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Prologis, Inc.: Yes¨☐ Noþ☑
Prologis, L.P.: Yes¨☐ Noþ☑
Based on the closing price of Prologis, Inc.’s common stock on June 30, 2013,2016, the aggregate market value of the voting common equity held by non-affiliatesnonaffiliates of Prologis, Inc. was $18,639,338,377.$25,583,323,441.
The number of shares of Prologis, Inc.’s common stock outstanding as ofat February 21, 201410, 2017, was approximately 499,613,700.529,345,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Part III of this report are incorporated by reference to the registrant’s definitive proxy statement for the 20142017 annual meeting of its stockholders or will be provided in an amendment filed on Form 10-K/A.
This report combines the annual reports on Form 10-K for the year ended December 31, 20132016, of Prologis, Inc. and Prologis, L.P. Unless stated otherwise or the context otherwise requires, references to “Prologis, Inc.” or the “Parent” mean Prologis, Inc. and its consolidated subsidiaries; and references to “Prologis, L.P.” or the “Operating Partnership” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company”, “Prologis”,Company,” “Prologis,” “we,” “our” or “us” means Prologis, Inc.the Parent and the Operating Partnership collectively.
Prologis, Inc.
The Parent is a real estate investment trust (a “REIT”) and the general partner of the Operating Partnership. As ofAt December 31, 2013, Prologis, Inc.2016, the Parent owned an approximate 99.65%97.42% common general partnership interest in the Operating Partnership and 100% of the preferred units in the Operating Partnership. The remaining approximate 0.35%2.58% common limited partnership interests are owned by non-affiliatednonaffiliated investors and certain current and former directors and officers of Prologis, Inc.the Parent. As the sole general partner of the Operating Partnership, Prologis, Inc.the Parent has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.
We operate Prologis, Inc.the Parent and the Operating Partnership as one enterprise. The management of Prologis, Inc.the Parent consists of the same members as the management of the Operating Partnership. These members are officers of Prologis, Inc.the Parent and employees of the Operating Partnership or one of its direct or indirect subsidiaries. As general partner with control of the Operating Partnership, Prologis, Inc.the Parent consolidates the Operating Partnership for financial reporting purposes, and Prologis, Inc. does not havepurposes. Because the only significant assets other thanasset of the Parent is its investment in the Operating Partnership. Therefore,Partnership, the assets and liabilities of Prologis, Inc.the Parent and the Operating Partnership are the same on their respective financial statements.
We believe combining the annual reports on Form 10-K of Prologis, Inc.the Parent and the Operating Partnership into this single report results in the following benefits:
enhances investors’ understanding of Prologis, Inc.the Parent and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation sinceas a substantial portion of the Company’s disclosure applies to both Prologis, Inc.the Parent and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
We believe it
It is important to understand the few differences between Prologis, Inc.the Parent and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Prologis, Inc.’s only material asset is its ownership of partnership interests in the Operating Partnership. As a result, Prologis, Inc.Company. The Parent does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. Prologis, Inc.The Parent itself does not issueincur any indebtedness, but it guarantees the unsecured debt of the Operating Partnership. The Operating Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests in the Company’s investment in certain entities. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by Prologis, Inc.,the Parent, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the business through the Operating Partnership’s operations, its incurrence of indebtedness and the issuance of partnership units to third parties.
Noncontrolling
The presentation of noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of Prologis, Inc.the Parent and those of the Operating Partnership. The noncontrollingcommon limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s consolidated financial statements includeand as noncontrolling interest within equity in the Parent’s consolidated financial statements. The common and preferred partnership interests in consolidated entities not ownedheld by the Operating Partnership. The noncontrolling interests in Prologis, Inc.’s financial statements include the same noncontrolling interests at the Operating Partnership level, as well as the common limited partnership interestsParent in the Operating Partnership which are accounted forpresented as general partner’s capital within partners’ capital byin the Operating Partnership.Partnership’s consolidated financial statements and as preferred stock, common stock, additional paid-in capital, accumulated other comprehensive loss and distributions in excess of net earnings within stockholders’ equity in the Parent’s consolidated financial statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity and capital issuances at the Parent and Operating Partnership levels.
In order to
To highlight the differences between Prologis, Inc.the Parent and the Operating Partnership, there are separate sections in this report, as applicable, that separatelyindividually discuss Prologis, Inc.the Parent and the Operating Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of Prologis, Inc.the Parent and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of Prologis.
Item | Description | Page | ||||
PART I | ||||||
1. | 4 | |||||
4 | ||||||
5 | ||||||
5 | ||||||
6 | ||||||
6 | ||||||
6 | ||||||
1A. | 7 | |||||
1B. | 14 | |||||
2. | 14 | |||||
14 | ||||||
17 | ||||||
18 | ||||||
3. | 18 | |||||
4. | 18 | |||||
PART II | ||||||
5. | 19 | |||||
19 | ||||||
20 | ||||||
Securities Authorized for Issuance Under Equity Compensation Plans | 20 | |||||
20 | ||||||
6. | 21 | |||||
7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||||
22 | ||||||
25 | ||||||
31 | ||||||
33 | ||||||
33 | ||||||
36 | ||||||
37 | ||||||
37 | ||||||
39 | ||||||
39 | ||||||
7A. | 42 | |||||
8. | 43 | |||||
9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 44 | ||||
9A. | 44 | |||||
9B. | 45 | |||||
PART III | ||||||
10. | 45 | |||||
11. | 45 | |||||
12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 45 | ||||
13. | Certain Relationships and Related Transactions, and Director Independence | 45 | ||||
14. | 45 | |||||
PART IV | ||||||
15. | 45 |
Item |
| Description |
| Page |
|
|
|
| |
1. |
|
| 3 | |
|
|
| 3 | |
|
|
| 5 | |
|
|
| 7 | |
|
|
| 8 | |
|
|
| 8 | |
1A. |
|
| 8 | |
1B. |
|
| 15 | |
2. |
|
| 15 | |
|
|
| 15 | |
|
|
| 18 | |
|
|
| 19 | |
3. |
|
| 19 | |
4. |
|
| 19 | |
|
|
|
| |
5. |
|
| 20 | |
|
|
| 20 | |
|
|
| 21 | |
|
|
| 21 | |
|
| Securities Authorized for Issuance Under Equity Compensation Plans |
| 21 |
|
|
| 21 | |
6. |
|
| 22 | |
7. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 22 |
|
|
| 22 | |
|
|
| 23 | |
|
|
| 32 | |
|
|
| 33 | |
|
|
| 37 | |
|
|
| 38 | |
|
|
| 38 | |
|
|
| 40 | |
|
| Funds from Operations Attributable to Common Stockholders/Unitholders ("FFO") |
| 40 |
7A. |
|
| 42 | |
8. |
|
| 43 | |
9. |
| Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
| 43 |
9A. |
|
| 43 | |
9B. |
|
| 44 | |
|
|
|
| |
10. |
|
| 44 | |
11. |
|
| 44 | |
12. |
| Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
| 44 |
13. |
| Certain Relationships and Related Transactions, and Director Independence |
| 45 |
14. |
|
| 45 | |
|
|
|
| |
15. |
|
| 45 | |
16. |
|
| 45 |
2
The statements in this report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate as well as management’s beliefs and assumptions made by management.assumptions. Such statements involve uncertainties that could significantly impact our financial results. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,”and “estimates” including 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 properties,and disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to form new co-investment ventures and the availability of capital in existing or new co-investment ventures — 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 and political climates, (ii) changes in global 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 REIT status, and tax structuring and changes in income tax rates, (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, including our ability to establish new co-investment ventures, (viii) risks of doing business internationally, including currency risks, (ix) environmental uncertainties, including risks of natural disasters, and (x) those additional factors discussed under Item 1A. Risk Factors in this report. We undertake no duty to update any forward-looking statements appearing in this report except as may be required by law.
We are the leading global owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of December 31, 2013, on an owned and managed basis, we had properties and development projects totaling 569 million square feet (52.9 million square meters) in 21 countries. These properties are leased to more than 4,500 customers, including third-party logistics providers, transportation companies, retailers, manufacturers, and other enterprises.
Of the 569 million square feet (representing an investment of $45.5 billion) in our owned and managed portfolio as of December 31, 2013:
529 million square feet were in our operating portfolio with a gross book value of $41.5 billion that were 95.1 % occupied;
30 million square feet were in our development portfolio with a total expected investment of $2.4 billion that were 45.3% leased;
land available for future development was $1.6 billion;
10 million square feet consisted of properties in which we have an ownership interest but do not manage, including other non-industrial properties we own; and
the largest customer and 25 largest customers accounted for 1.8% and 17.2 %, respectively, of our annualized base rent.
Prologis, Inc. commenced operationsis a self-administered REIT and is the sole general partner of Prologis, L.P. We operate Prologis, Inc. and Prologis, L.P. as one enterprise and, therefore, our discussion and analysis refers to Prologis, Inc. and its consolidated subsidiaries, including Prologis, L.P., collectively.
Prologis, Inc. began operating as a fully integrated real estate company in 1997 and elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”), and believes. We believe the current organization and method of operation will enable Prologis, Inc. to maintain its status as a REIT. The Operating PartnershipPrologis, L.P. also was also formed in 1997.
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and provide asset and property management services to these entities. We refer to these entities as co-investment ventures. Our ownership interest in these entities generally ranges from 15-50%. These entities may be consolidated or unconsolidated, depending on the structure, our partner’s participating and other rights and our level of control of the entity. The co-investment ventures may have one or more investors.
Our globalcorporate headquarters are located at Pier 1, Bay 1, San Francisco, California 94111, and our global operational headquartersother principal offices are located at 4545 Airport Way, Denver, Colorado 80239. Our other principal office locations are in Amsterdam, the Grand Duchy ofDenver, Luxembourg, Mexico City, Shanghai, Singapore and Tokyo.
Our Internet website address iswww.prologis.com. All reports required to be filed with the Securities and Exchange Commission (the “SEC”(“SEC”) are available or mayand can be accessed free of charge through the Investor Relations section of our Internet website, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.www.prologis.com. The common stock of Prologis, Inc. is listed on the New York Stock Exchange (“NYSE”) under the ticker “PLD” and is a component of the Standard & Poor’s (“S&P&P”) 500.
On June 3, 2011, AMB Property Corporation (“AMB”) completed a merger with ProLogis, a Maryland REIT (“ProLogis”) in which ProLogis shareholders received 0.4464 of a share of common stock of AMB for each outstanding common share of beneficial interest in ProLogis (the “Merger”). In the Merger, AMB was the legal acquirer and ProLogis was the accounting acquirer. Following the Merger, AMB changed its name to Prologis, Inc.
Investment StrategyTHE COMPANY
We are the global leader in logistics real estate with a focus on high-barrier, high-growth markets. We own, manage and develop high-quality logistics facilities in the world’s most active centers of commerce. An investment in Prologis taps into key drivers of economic growth, including consumption, supply chain modernization, e-commerce and urbanization.
Customers turn to us because they know an efficient supply chain will make their businesses run better, and that a strategic relationship with Prologis will create a competitive advantage. We lease modern logistics facilities to a diverse base of approximately 5,200 customers. These facilities assist the efficient distribution of goods for the world’s best businesses and brands.
We invest in Class-A logistics facilities in the world’s primary population centers with high barriers to entry and supported by extensive transportation infrastructure (major airports, seaports, rail systems and highway systems). We believe that growthour portfolio is the highest-quality logistics property portfolio in gross domestic product (“GDP”)the industry because it is focused in those key markets. Our local teams actively manage the portfolio, which encompasses leasing and property management, new capital deployment activities and an opportunistic disposition program. The majority of our consolidated properties are in global tradethe United States (or “U.S.”); while outside the U.S., our properties are generally held in co-investment ventures, which reduces our exposure to movements in foreign currency. Therefore, we are principally an owner-operator in the U.S. and a manager-developer outside the U.S.
Macroeconomics and demographics are important drivers of our business; these drivers include population growth, consumption and rising affluence. In the developed markets of U.S., Europe and Japan, key factors are the reconfiguration of supply chains (strongly influenced by e-commerce trends), and the operational efficiencies that can be realized from our modern logistics facilities. In emerging markets, such as Brazil, China and Mexico, new affluence and the rise of the consumer classes have prompted demand for our industrial real estate. Trade and GDPas supply chains are correlated as higher levels of investment, production and consumption within a globalized economy are consistent with increased levels of imports and exports. As the world produces and consumes more, we believe that the volume of global trade will continue to increase at a rate in excess of growth in global GDP. Significant supply chain reconfiguration, obsolescence and customers’ preference to lease, rather than own, industrialconstructed. Taken together, logistics real estate also drive demand for high quality distribution space.
Our investment strategy focuses on providing distribution and logistics space to customers whose businesses are tied to global trade and depend on the efficient movement of goods through the global supply chain. We have a deep global presence with assets under management of $45.5 billion (based on expected investment) spanning 21 countries on four continents. Our properties are primarily located in two main categories, global markets and regional markets. Global markets comprise approximately 30 of the largest markets tied to global trade. These markets feature large population centers with high per-capita consumption rates and are located near major airports, seaports and ground transportation systems. Regional markets benefit from large population centers but typically are noteconomic growth, as tied towell as from the globalmodernization of supply chain, but rather serve local consumption and are often less supply constrained. chains around the world.
3
We intend to primarily hold only the highest quality class-A product in global and regional markets. As of December 31, 2013, global and regional markets represented approximately 84% and 14%, respectively ofmanage our overallbusiness on an owned and managed platform (basedbasis, including properties wholly owned by us or owned by one of our co-investment ventures, which allows us to make decisions based on the property operations versus our share of netownership. We believe the operating income of the properties). We also own a small number of assets in other markets, which account for approximately 2%fundamentals of our owned and managed platform.portfolio are consistent with those of our consolidated portfolio, and therefore we generally look at operating metrics on an owned and managed basis.
At December 31, 2016, we owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total $52.1 billion in gross total investment across 676 million square feet (63 million square meters) in 20 countries spanning four continents. Our investment was $30.8 billion, which consisted of our wholly-owned properties and our pro rata (or ownership) share of the properties owned by our co-investment ventures.
Throughout this document, we reflect amounts in U.S. dollars, our reporting currency. Included in these amounts are consolidated and unconsolidated investments denominated in foreign currencies, primarily the British pound sterling, euro and Japanese yen that are impacted by fluctuations in exchange rates when translated into U.S. dollars. We generally planmitigate our exposure to exit from these other marketsforeign currency fluctuations by investing outside the U.S. through co-investment ventures, borrowing in an orderly fashionlocal currency and utilizing derivative instruments.
Details of the 676 million square feet at December 31, 2016, in our owned and managed portfolio were as follows (dollars and square feet in millions):
|
| U.S. |
|
| Other Americas |
|
| Europe |
|
| Asia |
|
| Total |
| |||||
Operating portfolio (number of buildings) |
|
| 2,058 |
|
|
| 240 |
|
| 736 |
|
| 102 |
|
|
| 3,136 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating portfolio (square feet) |
|
| 358 |
|
|
| 51 |
|
|
| 172 |
|
|
| 41 |
|
|
| 622 |
|
Development portfolio (square feet) |
|
| 12 |
|
|
| 4 |
|
|
| 9 |
|
|
| 19 |
|
|
| 44 |
|
Other real estate properties (square feet) |
|
| 7 |
|
|
| - |
|
|
| 2 |
|
|
| 1 |
|
|
| 10 |
|
Total square feet |
|
| 377 |
|
|
| 55 |
|
|
| 183 |
|
|
| 61 |
|
|
| 676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating portfolio (gross book value) |
| $ | 27,148 |
|
| $ | 3,100 |
|
| $ | 12,010 |
|
| $ | 5,021 |
|
| $ | 47,279 |
|
Development portfolio (TEI) (1) |
|
| 924 |
|
|
| 304 |
|
|
| 669 |
|
|
| 1,488 |
|
|
| 3,385 |
|
Land portfolio (gross book value) |
|
| 474 |
|
|
| 356 |
|
|
| 431 |
|
|
| 164 |
|
|
| 1,425 |
|
Total |
| $ | 28,546 |
|
| $ | 3,760 |
|
| $ | 13,110 |
|
| $ | 6,673 |
|
| $ | 52,089 |
|
4
Our operating portfolio includes stabilized logistics facilities in our owned and managed portfolio. A developed property moves into the next few years, although we may continue to opportunistically invest in other markets. We have local market knowledge, construction expertise andoperating portfolio when it meets stabilization. The property is considered stabilized when a commitment to sustainable design across our diverse portfolio. We are supported by a broad and diverse customer base, comprising relationships with multinational corporations that result in repeatable business.development project has been completed for one year or is at least 90% occupied, whichever occurs first.
Business Strategy and Operating SegmentsBUSINESS STRATEGY AND OPERATING SEGMENTS
Our business strategy includescomprises two operating segments: Real Estate Operations and Investment Management.Strategic Capital.
REAL ESTATE – RENTAL OPERATIONS Generate revenues and net operating income (“NOI”) by maintaining high occupancy rates and increasing rents | REAL ESTATE – DEVELOPMENT Generate value from development | STRATEGIC CAPITAL Access third-party capital to grow our business and earn recurring fees and promotes |
We have a high-quality logistics portfolio that serves premier companies across the globe. For the year ended December 31, 2016, we: •generated over 90% of our consolidated revenues and NOI from our buildings in the U.S. •increased consolidated revenues and NOI over 12% from 2015 •ended the year with consolidated occupancy of 97.0% | Development contributes to significant earnings growth as projects lease up and generate revenues and NOI. For the year ended December 31, 2016, we: •stabilized a total estimated investment in our owned and managed portfolio of $2.5 billion of development projects with an estimated weighted average margin of 25.5% •created $640 million of value (of which $571 million is our share) | Durable fee stream with more than 90% from perpetual or long-life co-investment ventures with some of the world’s largest institutional partners. For the year ended December 31, 2016, we: •generated approximately 90% of our consolidated Strategic Capital revenues from outside the U.S. •increased consolidated Strategic Capital revenues over 40% from 2015 |
Real Estate Operations Segment
Rental Operations -This representsOperations. Rental operations comprise the primary sourcelargest component of our revenue,operating segments and contributed approximately 90% of our consolidated revenues, earnings and funds from operations (“FFO”)in 2016 (see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information on funds from operations, a non-GAAP measure). We collect rent from our customers underthrough operating leases, including reimbursements for the vast majority of our property operating costs. We expect to generate long-term internal growth in rental income by maintaining a high occupancy rate at our properties, byrates, increasing rents and controlling expenses and through contractual rent increases on existing space and through rent increases on renewals on rollover space, thus capitalizing on the economies of scale inherent in owning, operating and growing a large global portfolio. Our rental income is diversified due to both our global presence and our broad customer base.expenses. We believe thatour active portfolio management, coupled with the skills of our property, management and leasing, teams, regular maintenance, and capital, expenditure programs, energy management and sustainability programs and risk management programs create cost efficiencies, allowingteams, will allow us to leveragemaximize rental revenues across our global platformportfolio. In 2016, over 90% of our consolidated revenues and provide flexible solutions forNOI in this segment were generated in the U.S.NOI from this segment is calculated directly from our customers.financial statements as rental revenues, rental recoveries and development management and other revenues less rental expenses and other expenses.
Development.Capital Deployment -Capital deployment includes development, re-development and acquisition activities that support We utilize (i) our rental operations and are therefore included with that line of business for segment reporting. We acquire, develop and re-develop industrial properties primarily in global and regional markets to meet our customers’ needs. Within this line of business, we capitalize on: (i) the land that we currently own in global and regional markets;bank, (ii) the development expertise of our local personnel;teams, (iii) our global customer relationships;relationships and (iv) our in-depth local knowledge in connection with our development activities. Successful development and redevelopment efforts increase both the demand for high-quality distribution facilities in key markets. We seek to increase our rental incomerevenues and the net asset value of our Real Estate Operations segment. We measure the Company throughvalue we created based on the leasingincrease in estimated fair value of newly developed space,a stabilized development property, as well as throughcompared to the acquisition of new properties. Depending on several factors,costs incurred. Generally, we may develop properties in the U.S. for long-term hold and outside the U.S. for contribution into one ofto our co-investment ventures, or occasionallyventures. Occasionally, we develop for sale to third parties. During 2013, we recognized gains in continuing operations of $563 million from the disposition of properties – primarily properties we developed. We develop directly as well as with our partners in certain co-investment ventures.
Investment Management Segment -We invest with partners and investors through our co-investment ventures,
Strategic Capital
Real estate is a capital-intensive business that requires growth capital. Our strategic capital business gives us access to third-party capital, both private and public.public, which allows us to diversify our sources of capital and therefore have a broader range of options to fund our growth. We tailor industrial portfoliosco-invest with some of the world’s largest institutional partners to investors’ specific needsgrow our business and deploy capital with a focus on larger, long duration ventures and open ended funds with leading global institutions.provide incremental revenues. We also access alternative sources of public equity such as thethrough two publicly traded vehicles: Nippon Prologis REIT, Inc. (“NPR”) which began tradingin Japan and FIBRA Prologis in Mexico. We tailor logistics portfolios to meet our partners’ specific needs, with a focus on the Tokyo Stock Exchange in early 2013. These privatelong-term ventures and public vehicles source strategic capital for distinct geographies across our global platform.open-ended funds. We typically hold ansignificant ownership interestinterests in these ventures, between 15-50%. aligning our interests with those of our partners.
5
We generate investment managementstrategic capital revenues from our unconsolidated co-investment ventures by providingprincipally through asset management and property management services. We mayservices, and we earn additional revenues through additional services provided such asby providing leasing, acquisition, construction, development, disposition, legalfinancing and taxdisposition services. Depending on the structure of the venture and the returns provided to our partners, we may also earn revenues through incentive returns or promotesfees (“promotes”) periodically during the life of a venture or upon liquidation. We believe our co-investments with investors will continue to serveIn 2016, we earned promote revenues in Europe of $89 million. Approximately 40% of promote revenues are paid as a sourcecombination of capital for new investmentscash and providestock awards pursuant to the terms of the Prologis Promote Plan and expensed through Strategic Capital Expenses. This segment contributed approximately 10% of our consolidated revenues, for our stockholders, as well as mitigate risk associated with our foreign currency exposure.earnings and funds from operations in 2016. We mayplan to grow this business withthrough increasing the formation of new ventures and through the growth in existing ventures with new third-party capital and additional investments by us. At December 31, 2013, we had 13 co-investment ventures with assets under management (consolidated and unconsolidated) andin our existing ventures. In 2016, approximately 90% of these ventures (basedthe consolidated revenues and NOI in this segment were generated outside the U.S. NOI in this segment is calculated as Strategic Capital Revenues less Strategic Capital Expenses directly from each line item in the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data and does not include property related NOI.
Competition
Competitively priced logistics space could impact our occupancy rates and have an adverse effect on the gross book value of the buildings in these ventures) are long-life or perpetual vehicles.
Competition
The existence of competitively priced distribution space available in any market could have a material impact on our ability tohow much rent space and on the rents that we can charge, which impactsin turn could affect both of our operating segments. To the extent we wishWe may face competition with regard to acquire land for future development
of properties in our Real Estate Operations segment or dispose of land, we may compete withcapital deployment activities, including local, regional and national operators or developers. We also face competition from investment managers for institutional capital within our Investment Management segment.strategic capital business.
We believe we have competitive advantages due to (i) our our:
properties being focused in the world’s primary population centers with high barriers to entry and supported by extensive transportation infrastructure;
ability to respond quickly to customers’ needs for high-quality distribution space in key global and regional distribution markets; (ii) our logistics facilities;
established relationships with key customers served by our local personnel; (iii) our teams;
ability to leverage our organizational scale and structure to provide a single point of contact for our globalfocus customers through our global customer solutions team; (iv) our
property management and leasing expertise; (v) our
relationships and proven track record with current and prospective investors in our investment managementstrategic capital business; (vi) our global
experience in the developmentdeveloping and management of industrial properties; (vii) the strategic locations of ourmanaging logistics facilities;
well-positioned land that we expect to develop;bank; and (viii) our personnel who are experienced
team members with experience in the land entitlement process.and development processes.
Customers
We have a
Our broad customer base that is diverse in terms of industry concentration and represents a broad spectrum of international, national, regional and local distribution spacelogistics users. At December 31, 2013,2016, in our Real Estate Operations segment representing our consolidated properties, we had more than 3,5003,200 customers occupying 253.5334 million square feet of distributionlogistics space. On an owned and managed basis, we had more than 4,5005,200 customers occupying 503.8625 million square feet of distributionlogistics space. Our largest customer and 25 largest customers accounted for 1.6% and 22.6%, respectively, of our annualized base rent at December 31, 2013, for our Real Estate Operations segment and 1.8% and 17.2%, respectively, for our owned and managed portfolio (which includes our Real Estate Operations segment and our unconsolidated co-investment ventures).
We develop long-term relationships with our customers and understand their business and needs, serving as their strategic partner for real estate on a global basis. Keeping in close contact with customers and focusing on exceptional customer service sets us apart from other real estate providers as much more than a landlord. We believe that what we offer in terms of scope, scale and quality of assets of our owned and managed portfolio is unique. Our in-depth knowledge of our markets helps us stay ahead of trends and create forward-thinking solutions for their distribution networks. This depth of customer knowledge results in greater retention and expanded service, which garners additional business from the same customer across multiple geographies. In our Real Estate Operations segment, over half our annual base rent is derived from customers who lease from us in more than one location and, in some cases, more than one country, which is consistent with our owned and managed portfolio.
In our Investment ManagementStrategic Capital segment, we also considerview our partners and investors to beas our customers. As ofAt December 31, 2013,2016, in our private ventures, we partnered with 104approximately 100 investors, several of which invest in multiple ventures.
6
The following table details our top 25 customers at December 31, 2016 (square feet in millions):
| Consolidated – Real Estate Operations |
|
|
| Owned and Managed |
| ||||||||||
Top Customers | % of NER (1) |
|
| Total Occupied Square Feet |
|
| Top Customers | % of NER (1) |
|
| Total Occupied Square Feet |
| ||||
1. Amazon.com |
| 5.0 |
|
|
| 13 |
|
| 1. Amazon.com |
| 3.1 |
|
|
| 15 |
|
2. Home Depot |
| 1.8 |
|
|
| 5 |
|
| 2. DHL |
| 1.6 |
|
|
| 10 |
|
3. FedEx |
| 1.3 |
|
|
| 3 |
|
| 3. Geodis |
| 1.2 |
|
|
| 9 |
|
4. XPO Logistics |
| 1.0 |
|
|
| 4 |
|
| 4. XPO Logistics |
| 1.2 |
|
|
| 9 |
|
5. Wal-Mart |
| 0.9 |
|
|
| 3 |
|
| 5. Kuehne + Nagel |
| 1.1 |
|
|
| 7 |
|
6. BMW |
| 0.9 |
|
|
| 3 |
|
| 6. FedEx |
| 1.0 |
|
|
| 4 |
|
7. U.S. Government |
| 0.9 |
|
|
| 1 |
|
| 7. Home Depot |
| 0.9 |
|
|
| 6 |
|
8. Ingram Micro |
| 0.8 |
|
|
| 2 |
|
| 8. CEVA Logistics |
| 0.9 |
|
|
| 6 |
|
9. PepsiCo |
| 0.7 |
|
|
| 3 |
|
| 9. Wal-Mart |
| 0.8 |
|
|
| 5 |
|
10. DSV Air and Sea |
| 0.6 |
|
|
| 2 |
|
| 10. DSV Air and Sea |
| 0.8 |
|
|
| 5 |
|
Top 10 Customers |
| 13.9 |
|
|
| 39 |
|
| Top 10 Customers |
| 12.6 |
|
|
| 76 |
|
11. UPS |
| 0.6 |
|
|
| 2 |
|
| 11. Nippon Express |
| 0.7 |
|
|
| 3 |
|
12. Kuehne + Nagel |
| 0.6 |
|
|
| 2 |
|
| 12. BMW |
| 0.6 |
|
|
| 4 |
|
13. APL Logistics |
| 0.6 |
|
|
| 2 |
|
| 13. UPS |
| 0.6 |
|
|
| 3 |
|
14. Best Buy |
| 0.6 |
|
|
| 2 |
|
| 14. Hitachi |
| 0.5 |
|
|
| 2 |
|
15. DHL |
| 0.5 |
|
|
| 2 |
|
| 15. DB Schenker |
| 0.5 |
|
|
| 4 |
|
16. Cal Cartage Company |
| 0.5 |
|
|
| 1 |
|
| 16. U.S. Government |
| 0.5 |
|
|
| 1 |
|
17. Sears |
| 0.5 |
|
|
| 2 |
|
| 17. Tesco |
| 0.5 |
|
|
| 3 |
|
18. Kimberly-Clark |
| 0.5 |
|
|
| 2 |
|
| 18. Ingram Micro |
| 0.5 |
|
|
| 3 |
|
19. Geodis |
| 0.5 |
|
|
| 2 |
|
| 19. Panalpina |
| 0.4 |
|
|
| 2 |
|
20. NFI Industries |
| 0.4 |
|
|
| 2 |
|
| 20. PepsiCo |
| 0.4 |
|
|
| 3 |
|
21. Office Depot |
| 0.4 |
|
|
| 1 |
|
| 21. Samsung Electronics |
| 0.3 |
|
|
| 2 |
|
22. Kellogg's |
| 0.4 |
|
|
| 2 |
|
| 22. Best Buy |
| 0.3 |
|
|
| 2 |
|
23. Mohawk Industries |
| 0.4 |
|
|
| 1 |
|
| 23. APL Logistics |
| 0.3 |
|
|
| 2 |
|
24. C&S Wholesale Grocers |
| 0.4 |
|
|
| 1 |
|
| 24. Under Armour |
| 0.3 |
|
|
| 2 |
|
25. Anixter |
| 0.4 |
|
|
| 1 |
|
| 25. La Poste |
| 0.3 |
|
|
| 2 |
|
Top 25 Customers |
| 21.2 |
|
|
| 64 |
|
| Top 25 Customers |
| 19.3 |
|
|
| 114 |
|
(1) | Net effective rent (“NER”) is calculated using the estimated total cash to be received over the term of the lease (including base rent and expense reimbursements) divided by the lease term to determine the amount of rent and expense reimbursements received per year. Amounts derived in a currency other than the U.S. dollar have been translated using the average rate from the previous twelve months. |
Employees
The following table summarizes our employee base at December 31, 2016:
Regions | Number of Employees | |||
U.S. (1) | 830 | |||
Other Americas | 105 | |||
Europe | 370 | |||
Asia | 225 | |||
Total | 1,530 |
(1) | This includes employees who are employed in the U.S. but also support other regions. |
We employ 1,468 persons across the globe. Ourallocate our employees work in 4 countries in the Americas (873 persons), 15 countries in Europe (387 persons) and 3 countries in Asia (208 persons). Of the total, we have assigned 918 employeeswho perform property management functions to our Real Estate Operations segment and 98 employeesStrategic Capital segment based on the size of the respective portfolios. Employees who perform only Strategic Capital functions are allocated directly to our Investment Managementthat segment. We have 452 employees who work in corporate and support positions who are not assigned to a segment.
We believe ourwe have good relationships with our employees are good. Ouremployees. Prologis employees are not organized under collective bargaining agreements, although some of our employees in Europe are represented by statutory Works Councils and as such, benefit from applicable labor agreements.
Code of Ethics and Business ConductCODE OF ETHICS AND BUSINESS CONDUCT
We maintain a Code of Ethics and Business Conduct applicable to our Boardboard of Directors (“Board”directors (the “Board”) and all of our officers and employees, including the principal executive officer, the principal financial officer and the principal accounting officer, or personsand other people performing similar functions. A copy of our Code of Ethics and Business Conduct is available on our website, www.prologis.com.www.prologis.com. In addition to being accessible through our website, copies of our Code of Ethics and Business Conduct can be obtained, free of charge, upon written request to Investor Relations, Pier 1, Bay 1, San Francisco, California 94111. Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, or the principal accounting officer, or personsother people performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website.
7
Environmental MattersENVIRONMENTAL MATTERS
We are exposed to various environmental risks that may result in unanticipated losses and affect our operating results and financial condition. Either the previous owners or we have subjectedconducted environmental reviews on a majority of the properties we have acquired, including land, to environmental reviews.land. While some of these assessments have led to further investigation and sampling, none of the environmental assessments has revealed an environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations. See further discussion in Item 1A. Risk Factors and Note 2017 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
Insurance CoverageINSURANCE COVERAGE
We carry insurance coverage on our properties. We determine the type of coverage and the policy specifications and limits based on what we deem to be the risks associated with our ownership of properties and our business operations in specific markets. Such coverage typically includes property damage and rental loss insurance resulting from such perils as fire, windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance. Insurance is maintained through a combination of commercial insurance, self
insuranceself-insurance and through a wholly-owned captive insurance entity. The costs to insure our properties are primarily covered through reimbursements from our customers. We believe that our insurance coverage contains policy specifications and insured limits that are customary for similar properties, business activities and markets and we believe our properties are adequately insured. See further discussion in Item 1A. Risk Factors.
Our operations and structure involve various risks that could adversely affect our business and financial condition, including but not limited to, our financial position, results of operations, distributable cash flow, ability to make distributions and payments to security holders and the market value of our securities. These risks relate to our consolidated company as well as our investments in unconsolidated entities and include among others:others, (i) general risks; (ii) risks related to our business; (iii) risks related to financing and capital and (iv) income tax risks.
General
General Risks
As a global company, we are subject to social, political and economic risks of doing business in many countries.
We conduct a significant portion of our business and employ a substantial number of people outside of the United States.U.S. During 2013,2016, we generated approximately $527$453 million or 30.1%17.9% of our revenuerevenues from operations outside the United States.U.S. Circumstances and developments related to international and U.S. operations that could negatively affect our business, financial condition, results of operations or cash flowus include, but are not limited to, the following factors:
difficulties and costs of staffing and managing international operations in certain regions;
regions, including differing employment practices and labor issues;
local businesses and cultural factors that differ from our usual standards and practices;
volatility in currencies;
currencies and currency restrictions, which may prevent the transfer of capital and profits to the United States;U.S.;
challenges in establishing effective controls and procedures to regulate operations in different regions and to monitor compliance with applicable regulations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and other similar laws;
unexpected changes in regulatory requirements, tax, tariffs and other laws;laws within the U.S. or other countries in which we operate;
potentially adverse tax consequences;
the responsibility of complying with multiple and potentially conflicting laws, e.g., with respect to corrupt practices, employment and licensing;
the impact of regional or country-specific business cycles and economic instability;instability, including instability in, or further withdrawals from, the European Union or other international trade alliances or agreements;
political instability, uncertainty over property rights, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities (particularly with respect to our operations in Mexico);activities;
foreign ownership restrictions in operations with the respective countries; and
access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
Our global growth also subjects us to certain risks, including risks associated with funding increasing headcount, integrating new offices, and establishing effective controls and procedures to regulate the operations of new offices and to monitor compliance with regulations such as the Foreign Corrupt Practices Act, the United Kingdom Bribery Act and similar laws.
Although we have committed substantial resources to expand our global platform, if we are unable to successfully manage the risks associated with our global business or to adequately manage operational fluctuations, our business, financial condition and results of operations could be harmed.
In addition, our international operations and, specifically,we may be impacted by the ability of our non-United Statesnon-U.S. subsidiaries to dividend or otherwise transfer cash among our subsidiaries, including transfers of cash to pay interest and principal on our debt, may be affected bydue to currency exchange control regulations, transfer pricing regulations and potentially adverse tax consequences, among other things.factors.
8
Disruptions in the global capital and credit markets may adversely affect our operating results and financial condition.
To the extent there is turmoil in the global financial markets, this turmoil has the potential to adversely affect (i) the value of our properties; (ii) the availability or the terms of financing that we have or may anticipate utilizing; (iii) our ability to make principal and interest payments on, or refinance any outstanding debt when due; and (iv) the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases. Disruptions in the capital and credit markets may also adversely affect our ability to make distributions and payments to our security holders and the market price of our securities.
Our business and operations could suffer in the event of system failures or cyber security attacks.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal and hosted information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, telecommunication failures and cyber security attacks, such as computer viruses or unauthorized access. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions. Any compromise of our security could result in a violation of applicable privacy and other laws, unauthorized access to information of ours and others, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.
Risks associated with our dependence on key personnel.
We depend on the deep industry knowledge and the efforts of our executive officers and other key employees. From time to time, our personnel and their roles may change. While we believe that we are able to retain our key talent and find suitable employees to meet our personnel needs, the loss of key personnel, any change in their roles or the limitation of their availability could adversely affect our business. If we are unable to continue to attract and retain our executive officers, or if compensation costs required to attract and retain key employees become more expensive, our performance and competitive position could be materially adversely affected.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.
The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management continually reviews the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weakness, in our internal control over financial reporting that may occur in the future could result in misstatements or restatements of our financial statements or a decline in the price of our securities.
The depreciation in the value of the foreign currency in countries where we have a significant investment may adversely affect our results of operations and financial position.
We have pursued, and intend to continue to pursue growth opportunities in international markets where the U.S. dollar is not the functional currency. At December 31, 2013,2016, approximately $7.3$6.6 billion or 29.5 %22.0% of our total consolidated assets are invested in a currency other than the U.S. dollar, primarily the British pound sterling, Canadian dollar, euro and Japanese yen. As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. A significant change in the value of the foreign currency of one or more countries where we have a significant investment may have a material adverse effect on our business and, in particular, our U.S. dollar reported financial position debt covenant ratios,and results of operations and cash flow.debt covenant ratios. Although we attempt to mitigate adverse effects by borrowing under debt agreements denominated in foreign currencies and using derivative contracts, there can be no assurance that those attempts to mitigate foreign currency risk will be successful.
Our hedging of foreign currency and interest rate risk may not effectively limit our exposure to other risks.
Hedging arrangements involve risks, such as the risk of fluctuation in the relative value of the foreign currency or interest rates and the risk that counterparties may fail to honor their obligations under these arrangements and the risk of fluctuation in the relative value of the foreign currency.arrangements. The funds required to settle such arrangements could be significant depending on the stability and movement of the hedged foreign currency.currency or the size of the underlying financing and the applicable interest rates at the time of the breakage. The failure to hedge effectively against foreign exchange changes or interest rate changes may materially adversely affect our results of operations and financial position.
Disruptions in the Global Capital and Credit Markets may adversely affect our operating resultsbusiness.
Compliance or failure to comply with regulatory requirements could result in substantial costs.
We are required to comply with many regulations in different countries, including (but not limited to) the Foreign Corrupt Practices Act, the U.K Bribery Act and financial condition.
Tosimilar laws and regulations. Our properties are also subject to various federal, state and local regulatory requirements, such as the extent there is turmoilAmericans with Disabilities Act and state and local fire and life-safety requirements. Noncompliance could result in the financial markets, it has the potential to materially affect the valueimposition of our properties and investments in our unconsolidated entities, the availabilitygovernmental fines or the termsaward of financingdamages to private litigants. While we believe that we and our unconsolidated entities haveare currently in material compliance with these regulatory requirements, the requirements may change or new requirements may anticipate utilizing, our ability andbe imposed that of our unconsolidated entitiescould require significant unanticipated expenditures by us. If we are required to make principal and interest payments on, or refinance any outstanding debt when due andunanticipated expenditures to comply with these regulations, we may impact the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases.be adversely affected.
Any additional, continued or recurring disruptions in the capital and credit markets may adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
9
Real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to investors.
Real estate investments are not as liquid as certain other types of investments and this lack of liquidity may limit our ability to react promptly to changes in economic or other conditions. In addition, significantSignificant expenditures associated with real estate investments, such as secured mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investments. Like other companies qualifying as REITsAs a REIT, under the Internal Revenue Code, we are only able to hold property for sale in the ordinary course of business through taxable REIT subsidiaries in order to not incur punitive taxation on any tax gain from the sale of such property. While weWe may dispose of certain properties that have been held for investment in order to generate liquidity, ifliquidity. If we do not satisfy certain safe harbors or we believe there is too much risk of incurring the punitive tax on any tax gain from the sale, we may not pursue such sales.
In
We may decide to sell properties to certain of our unconsolidated co-investment ventures or third parties to generate proceeds to fund our capital deployment activities. Our ability to sell properties on advantageous terms is affected by: (i) competition from other owners of properties that are trying to dispose of their properties; (ii) market conditions, including the event thatcapitalization rates applicable to our properties; and (iii) other factors beyond our control. If our competitors sell assets similar to assets we intend to divest in the same markets or at valuations below our valuations for comparable assets, we may be unable to divest our assets at favorable pricing or at all. The unconsolidated co-investment ventures or third parties who might acquire our properties may need to have access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions could be delayed.
If we do not have sufficient cash available to us through our operations, sales or contributions of properties or available credit facilities to continue operating our business as usual, we may need to find alternative ways to increase our liquidity. Such alternatives may include, without limitation, divesting ourselves of properties, whether or not they otherwise meet our strategic objectives to keep in the long term, at less than optimal terms, incurring debt, entering into leases with ournew customers at lower rental rates or less than optimal terms or entering into lease renewals with our existing customers without an increase in rental rates at turnover.rates. There can be no assurance, however, that such alternative ways to increase our liquidity will be available to us. Additionally, taking such measures to increase our liquidity may adversely affect our financial condition, results of operations,business, and in particular, our distributable cash flow and debt covenants.
Our investments are concentrated in the logistics sector and our abilitybusiness would be adversely affected by an economic downturn in that sector.
Our investments in real estate assets are concentrated in the logistics sector. This concentration may expose us to make distributions and paymentsthe risk of economic downturns in this sector to a greater extent than if our security holders and the market price of our securities.business activities were more diversified.
General economic conditions and other events or occurrences that affect areas in which our properties are geographically concentrated, may impact financial results.
We are exposed to general economic conditions, local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties. Our operating performance is further impacted by the economic conditions of the specific markets in which we have concentrations of properties.
As of
At December 31, 2013,2016, approximately 32.6%33.0% of our consolidated operating properties or $5.8$8.0 billion (based on consolidated gross book value, or investment before depreciation) are located in California, which represented 24.4%26.3% of the aggregate square footage of our operating properties and 29.1%33.7% of our annualized base rent.NOI. Our revenuerevenues from, and the value of, our properties located in California may be affected by local real estate conditions (such as an oversupply of or reduced demand for industriallogistics properties) and the local economic climate. Business layoffs, downsizing, industry slowdowns, changing demographics and other factors may adversely impact California’s economic climate. Because of the number of properties, we have located in California, a downturn in California’s economy or real estate conditions could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.business.
In addition to California, we also have significant holdings (defined as more than 3%3.0% of total consolidated investment before depreciation) in operating properties in certain global and regional markets located in Central &and Eastern Pennsylvania, Chicago, Dallas/Fort Worth, Japan, Mexico, New Jersey/New York City, Seattle and South Florida. Our operating performance could be adversely affected if conditions become less favorable in any of the markets in which we have a concentration of properties. Conditions such as an oversupply of distributionlogistics space or a reduction in demand for distributionlogistics space, among other factors, may impact operating conditions. Any material oversupply of distributionlogistics space or material reduction in demand for distributionlogistics space could adversely affect our results of operations, distributable cash flow and the value of our securities.overall business.
In addition, our owned and managed portfolio, including the unconsolidated entitiesco-investment ventures in which we invest, havehas concentrations of properties in the same markets mentioned above, as well as in markets in France, Germany, the Netherlands, PolandJapan and the United Kingdom,U.K., and are subject to the economic conditions in those markets.
A number of our propertiesinvestments, both wholly-owned and owned through co-investment ventures, are located in areas that are known to be subject to earthquake activity. United StatesU.S. properties located in active seismic areas include properties in the San Francisco Bay Area, Los Angeles, and Seattle. International properties located in active seismic
areas include Japan and Mexico. We generally carry earthquake insurance on our properties located in areas historically subject to seismic activity, subject to coverage limitations and deductibles, if we believe it is commercially reasonable. We evaluate our earthquake insurance coverage annually in light of current industry practice through an analysis prepared by outside consultants and in some specific instances have elected to self insureself-insure our earthquake exposure based on this analysis. We have elected not to carry earthquake insurance for our assets in Japan based on this analysis.
Further,10
Furthermore, a number of our properties are located in areas that are known to be subject to hurricane and/or flood risk. We carry hurricane and flood hazard insurance on all of our properties located in areas historically subject to such activity, subject to coverage limitations and deductibles, if we believe it is commercially reasonable. We evaluate our insurance coverage annually in light of current industry practice through an analysis prepared by outside consultants.
Our insurance coverage does not include all potential losses.
We and our unconsolidated entities currently carry insurance coverage including property damage and rental loss insurance resulting from certain perils such as fire and additional perils as covered under an extended coverage policy, namely windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance, as appropriate for the markets where each of our properties and business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties, business activities and markets. We believe our properties and the properties of our unconsolidated entities are adequately insured. However, there are certain losses, including losses from floods, earthquakes, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, we could experience a significant loss of capital invested and future revenues in these properties and could potentially remain obligated under any recourse debt associated with the property.
Furthermore, we cannot be sure that the insurance companies will be able to continue to offer products with sufficient coverage at commercially reasonable rates. If we experience a loss that is uninsured or that exceeds insured limits with respect to one or more of our properties or if the insurance companies fail to meet their coverage commitments to us in the event of an insured loss, then we could lose the capital invested in the damaged properties, as well as the anticipated future revenue from those properties and, if there is recourse debt, then we would remain obligated for any mortgage debt or other financial obligations related to the properties. Any such losses or higher insurance costs could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
Investments in real estate properties are subject to risks that could adversely affect our business.
Investments in real estate properties are subject to varying degrees of risk. While we seek to minimize these risks through geographic diversification of our portfolio, market research and our propertyasset management capabilities, these risks cannot be eliminated. Some of the factorsFactors that may affect real estate values and cash flows include:
local conditions, such as an oversupply of distribution space or a reduction in demand for distribution space in an area;demand;
technological changes, such as reconfiguration of supply chains, autonomous vehicles, robotics, 3D printing or other technologies;
the attractiveness of our properties to potential customers;
customers and competition from other available properties;
increasing costs of rehabilitating, repositioning,maintaining, insuring, renovating and making improvements to our properties;
our ability to provide adequate maintenancerehabilitate and reposition our properties due to changes in the business and logistics needs of and insurance on, our properties;customers;
our ability to control rents and variable operating costs; and
governmental regulations including zoning, usage and tax laws and changes in these laws; and
the associated potential liability under, and changes in, environmental, zoning, usage, tax, tariffs and other laws.
Our investments are concentrated in the industrial distribution sector and our business would be adversely affected by an economic downturn in that sector.
Our investments in real estate assets are primarily concentrated in the industrial distribution sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities were more diversified.
Our operating results and distributable cash flow will depend on the continued generation of lease revenues from customers and weWe may be unable to lease vacant space or renew leases or re-lease space on favorable terms as leases expire.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. We are also subject to the risk that, upon the expiration of leases for space located in our properties, leases may not be renewed by existing customers, the space may not be re-leased to new customers or the terms of renewal or re-leasing (including the cost of
required renovations or concessions to customers) may be less favorable to us than current lease terms. Our competitors may offer space at rental rates below current market rates or below the rental rates we currently charge our customers, we may lose potential customers, and we may be pressured to reduce our rental rates below those we currently charge in order to retain customers when our customers’ leases expire. In the event of default by a significant number of customers, we may experience delays and incur substantial costs in enforcing our rights as landlord, and we may be unable to re-lease spaces. A customer may experience a downturn in its business, which may cause the loss of the customer or may weaken its financial condition, resulting in the customer’s failure to make rental payments when due or requiring a restructuring that might reduce cash flow from the lease. In addition, a customer may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of such customer’s lease and thereby cause a reduction in our available cash flow.
We may acquire properties, which involves risks that could adversely affect our operating resultsbusiness and the value of our securities.financial condition.
We mayhave acquired properties and will continue to acquire industrialproperties, both through the direct acquisition of real estate and through the acquisition of entities that own the real estate and through additional investments in co-investment ventures that acquire properties. The acquisition of properties involves risks, including the risk that the acquired property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements identified in the pre-acquisition due diligence process will exceed estimates. When we acquire properties, we may face risks associated with a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures. Additionally, there is, and it is expected there will continue to be, significant competition for properties that meet our investment criteria as well as risks associated with obtaining financing for acquisition activities. The acquired properties or entities may be subject to liabilities, which may be without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based on ownership of any of these entities or properties, then we may have to pay substantial sums to settle it.
Our real estate development strategies may not be successful.
Our real estate development strategy is focused on monetizing land in the future through sales to third parties, development of industrial propertieslogistics facilities to hold for long-term investment, or contribution or sale to an unconsolidated entity,a co-investment venture or third party, depending on market conditions, our liquidity needs and other factors. We may expandincrease our investment in ourthe development, renovation and redevelopment business and we willexpect to complete the build-out and leasing of our current development platform.portfolio. We may also develop, renovate and redevelop properties within existing or newly formed development co-investment ventures. The real estate development, renovation and redevelopment business involves significant risks that could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities, which includeincludes the following significant risks:
we may not be able to obtain financing for development projects on favorable terms or at all;
we may explore development opportunities that may be abandoned and the related investment impaired;
11
we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
we may have construction costs, total investment amounts and our share of remaining funding that exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues;
we may not be able to attract third-party investment in new development co-investment ventures or sufficient customer demand for our product;
we may have properties that perform below anticipated levels, producing cash flow below budgeted amounts;
we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in impairment charges;
development opportunities that we explore may be abandoned and the related investment impaired;
the properties may perform below anticipated levels, producing cash flow below budgeted amounts;
we may not be able to lease properties we develop on favorable terms or at all;
construction costs, total investment amounts and our share of remaining funding may exceed our estimates and projects may not be completed, delivered or stabilized as planned;
we may not be able to attract third party investment in new development co-investment ventures or sufficient customer demand for our product;
we may not be able to capture the anticipated enhanced value created by our redevelopment projectsvalue-added properties on expected timetables or at all;
we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and
we may have substantial renovation, new development and redevelopment activities, regardless of their ultimate success, typicallythat require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations.
We are subject to risks and liabilities in connection with forming co-investment ventures, investing in new or existing co-investment ventures, attracting third-party investment and investing in and managing properties through co-investment ventures.
At December 31, 2016, we had investments in real estate containing approximately 403 million square feet held through co-investment ventures, both public and private. Our organizational documents do not limit the amount of available funds that we may invest in these ventures, and we may and currently intend to develop and acquire properties through co-investment ventures and investments in other entities when warranted by the circumstances. However, there can be no assurance that we will be able to form new co-investment ventures, or attract third-party investment or that additional investments in new or existing ventures to develop or acquire properties will be successful. Further, there can be no assurance that we are able to realize value from such investments.
Our co-investment ventures involve certain additional risks that we do not otherwise face, including:
our partners may share certain approval rights over major decisions made on behalf of the ventures;
if our partners fail to fund their share of any required capital contributions, then we may choose to contribute such capital;
our partners might have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the property;
the venture or other governing agreements often restrict the transfer of an interest in the co-investment venture or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
our relationships with our partners are generally contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, we may not continue to manage or invest in the assets underlying such relationships resulting in reduced fee revenues or causing a need to purchase such interest to continue ownership; and
disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture to additional risk.
We generally seek to maintain sufficient influence over our co-investment ventures to permit us to achieve our business objectives; however, we may not be able to continue to do so indefinitely. We have formed publicly traded investment vehicles, such as NPR and FIBRA Prologis, for which we serve as sponsor or manager. We have contributed, and may continue to contribute, assets into such vehicles. There is a risk that our managerial relationship may be terminated.
We are exposed to various environmental risks, thatincluding the potential impacts of future climate change, which may result in unanticipated losses that could affect our operating results,business and financial condition and cash flow.condition.
Under various federal, state and local laws, ordinances and regulations, a current or previous owner, developer or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances. The costs of removal or remediation of such substances could be substantial. Such laws often impose liability without regard to whether the owner or operator
12
knew of, or was responsible for, the release or presence of such hazardous substances. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination.
Environmental laws in some countries, including the United States,U.S., also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition. These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties are known to contain asbestos-containing building materials.
In addition, some of our properties are leased or have been leased, in part, to owners and operators of businesses that use, store or otherwise handle petroleum products or other hazardous or toxic substances, creating a potential for the release of such hazardous or toxic substances. Further,Furthermore, certain of our properties are on, adjacent to or near other properties that have contained or currently contain petroleum products or other hazardous or toxic substances, or upon which others have engaged, are engaged or may engage in activities that may release such hazardous or toxic substances. From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions wherefor which we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In connection with certain divested properties, we have agreed to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties.
We are also exposed to potential physical risks from possible future changes in climate. Our logistics facilities may be exposed to rare catastrophic weather events, such as severe storms or floods. If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase. We do not currently consider ourselves to be exposed to regulatory risks related to climate change, as our operations generally do not emit a significant amount of greenhouse gases. However, we may be adversely impacted as a real estate developer in the future by potential impacts to the supply chain or stricter energy efficiency standards for buildings. We cannot give any assurance that other such conditions do not exist or may not arise in the future. The presence of such substances on our real estate properties could adversely affect our ability to lease, develop or sell such properties or to borrow using such properties as collateral, and this may have an adverse effect on our business and financial condition, and in particular, our distributable cash flow.
If we decide to contribute or sell properties to an unconsolidated entity or third parties to generate proceeds, we may
Our insurance coverage does not be successful.include all potential losses.
We may contribute or selland our unconsolidated co-investment ventures carry insurance coverage including property damage and rental loss insurance resulting from certain perils such as fire and additional perils as covered under an extended coverage policy, namely windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance, as appropriate for the markets where each of our properties to certainand business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties, business activities and markets. We believe our properties and the properties of our unconsolidated entitiesco-investment ventures are adequately insured. Certain losses, however, including losses from floods, earthquakes, acts of war, acts of terrorism or third parties onriots, generally are not insured against or generally are not fully insured against because it is not deemed economically feasible or prudent to do so. If an uninsured loss or a case-by-case basis. Our abilityloss in excess of insured limits occurs with respect to sell properties on advantageous terms is affected by competition from other ownersone or more of properties that are trying to dispose of their properties; market conditions, including the capitalization rates applicable to our properties; and other factors beyond our control. If our competitors sell assets similar to assets we intend to divest in the same markets and/or at valuations below our valuations for comparable assets, we may be unable to divest our assets at favorable pricing or on favorable terms or at all. The unconsolidated entity or third parties who might acquire our properties, may need to have access towe could experience a significant loss of capital invested and future revenues in these properties and could potentially remain obligated under any recourse debt and equity capital, inassociated with the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions couldproperty.
Furthermore, we cannot be delayed. If we are unable to generate proceeds through property sales we may have to delay our deleveraging plans, which may result in adverse effects on our liquidity, distributable cash flow, debt covenants, andsure that the market price of our securities.
We are subject to risks and liabilities in connection with forming co-investment ventures, investing in new or existing co-investment ventures, attracting third party investment and investing in and managing properties through co-investment ventures.
As of December 31, 2013, we had an investment in real estate containing approximately 270 million square feet held through unconsolidated entities. Our organizational documents do not limit the amount of available funds that we may invest in unconsolidated entities, and we may and currently intend to develop and acquire properties through co-investment ventures and investments in other entities when warranted by the circumstances. However, there can be no assurance that weinsurance companies will be able to form new co-investment ventures, attract third party investment or make additional investments in new or existing co-investment ventures, successfully develop or acquire properties through unconsolidated entities, or realize value from such unconsolidated entities. Our inability to do so may have an adverse effect on our growth, our earnings and the market price of our securities.
Our partners in our unconsolidated investments may share certain approval rights over major decisions and some partners may manage the properties in the unconsolidated entities. Our unconsolidated investments involve certain risks, including:
if our partners fail to fund their share of any required capital contributions, then we may choose to contribute such capital;
our partners might have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the property;
the venture or other governing agreements often restrict the transfer of an interest in the co-investment venture or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
our relationships with our partners are generally contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, we may not continue to manageoffer products with sufficient coverage at commercially reasonable rates. If we experience a loss that is uninsured or invest in the assets underlying such relationships resulting in reduced fee revenue or causing a needthat exceeds insured limits with respect to purchase such interest to continue ownership; and
disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture to additional risk.
We generally seek to maintain sufficient influence over our unconsolidated entities to permit us to achieve our business objectives; however, we may not be able to do so. We have formed publicly traded investment vehicles, like our publicly traded REIT in Japan, for which we serve as sponsor and/or manager. We have contributed, and may continue to contribute, assets into such vehicles. As with any of our publicly traded entities or funds, there is a risk that our managerial relationship may be terminated.
The occurrence of one or more of our properties or if the events described aboveinsurance companies fail to meet their coverage commitments to us in the event of an insured loss, then we could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties and, if there is recourse debt, then we would remain obligated for any mortgage debt or other financial obligations related to the properties. Any such losses or higher insurance costs could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.business.
Contingent or unknown liabilities could adversely affect our financial condition.
We have acquired and may in the future acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of any of these entities or properties, then we might have to pay substantial sums to settle it, which could adversely affect our cash flow.
Risks Related to Financing and Capital
We face risks associated with the use of debt to fund our business activities, including refinancing and interest rate risks, and our operating results and financial condition couldmay be adversely affected if we are unable to make required payments on our debt or are unable to refinance our debt.debt or our cash flow may be insufficient to make required debt payments.
We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest. There can be no assurance that we will be able to refinance any maturing indebtedness, that such refinancing would be on terms as favorable as the terms of the maturing indebtedness, or that we will be able to otherwise obtain funds by selling assets or raising equity to make required payments on maturing indebtedness. If we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flowbusiness and our financial condition wouldwill be adversely affectednegatively impacted and, if the maturing debt is secured, the lender may foreclose on the property securing such indebtedness. Our global senior credit facility, Japanese yen-based credit agreementfacilities and certain other debt bears interest at variable rates. Increases in interest rates would increase our interest expense under these agreements. From time to time, we may enter into interest rate swap or cap agreements. Such hedging arrangements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. The funds required to settle any swap breakage arrangements, if any, could be significant depending on the size of underlying financing and the applicable interest rates at the time of breakage. The failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial position. In addition, our unconsolidated entities may be unable to refinance indebtedness or meet payment obligations, which may impact our distributable cash flow and our financial condition and/or we may be required to recognize impairment charges of our investments.
Covenants in our credit agreements could limit our flexibility and breaches of these covenants could adversely affect our financial condition.
The terms of our various credit agreements, including our global senior credit facility and Japanese yen-based credit agreement,facilities, the indentures under which our senior notes are issued and other note agreements, require us to comply with a number of customary financial covenants, such as maintaining debt service
13
coverage, leverage ratios, fixed charge ratios and other operating covenants including maintaining insurance coverage. These covenants may limit our flexibility into run our operations,business, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness. If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, our business and financial condition generally and, in particular, the amount of our distributable cash flow and our financial condition could be adversely affected.
Adverse changes in our credit ratings could negatively affect our financing activity.
The credit ratings of our senior unsecured notes and preferred stock are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analyses of us. Our credit ratings can affect the amount of capital we can access, as well as the terms and pricing of any debt we may incur. There can be no assurance that we will be able to maintain our current credit ratings, and in the event our credit ratings are downgraded, we would likely incur higher borrowing costs and may encounter difficulty in obtaining additional financing. Also, a downgrade in our credit ratings may trigger additional payments or other negative consequences under our current and future credit facilities and other debt instruments. Adverse changes in our credit ratings could negatively impact our business and, in particular, our refinancing and other capital market activities, our ability to manage debt maturities, our future growth our financial condition, the market price of our securities, and our development and acquisition activity.
At December 31, 2016, our credit ratings were A3 from Moody’s and A- from S&P, both with stable outlook. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
We are dependentdepend on external sources of capital.capital.
In order to
To qualify as a REIT, we are required each year to distribute to our stockholders at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and by excluding any net capital gain) to our stockholders and we may be subject to tax to the extent our taxable income is not fully distributed. While historicallyHistorically, we have satisfied these distribution requirements by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, our own stock. For distributions with respect to taxable years endingthat ended on or before December 31, 2013,2016, and in some cases declared as late as December 31, 2014, the2016, a REIT can satisfy up to 90% of the distribution requirements discussed above through the distribution of shares of our stock if certain conditions are met. Assuming we continue to satisfy these distribution requirements with cash, we may not be able to fund all future capital needs, including acquisition and development activities, from cash retained from operations and may have to rely on third-party sources of capital. Further, in orderFurthermore, to maintain our REIT status and not have to pay federal income and excise taxes, we may need to borrow funds on a short-term basis to meet the REIT distribution requirements even if the then-prevailing market conditions are not favorable for these borrowings. These short-term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of non-deductiblenondeductible capital expenditures, the creation of reserves or required debt or
amortization payments. Our ability to access debt and equity capital on favorable terms or at all is dependent upondepends on a number of factors, including general market conditions, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of our securities.
Our stockholders may experience dilution if we issue additional common stock.stock or units in the Operating Partnership.
Any additional future issuance of common stock or operating partnership units will reduce the percentage of our common stock and units owned by investors. In most circumstances, stockholders and unitholders will not be entitled to vote on whether or not we issue additional common stock.stock or units. In addition, depending on the terms and pricing of anany additional offering of our common stock or units and the value of the properties, our stockholders and unitholders may experience dilution in both book value and fair value of their common stock.stock or units.
Federal
Income Tax Risks
Our
The failure of Prologis, Inc. to qualify as a REIT would have serious adverse consequences.
We
Prologis, Inc. elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 1997. We believe we have operated so asPrologis, Inc. to qualify as a REIT under the Internal Revenue Code and believe that ourthe current organization and method of operation comply with the rules and regulations promulgated under the Internal Revenue Code to enable usPrologis, Inc. to continue to qualify as a REIT. However, it is possible that we are organized or have operated in a manner that would not allow usPrologis, Inc. to qualify as a REIT, or that our future operations could cause usPrologis, Inc. to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some on an annualannually and others on a quarterly basis) established under highly technical and complex sections of the Internal Revenue Code for which there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, Prologis, Inc. must derive at least 95% of its gross income in any year from qualifying sources. In addition, wePrologis, Inc. must pay dividends to ourits stockholders aggregating annually at least 90% of ourits taxable income (determined without regard to the dividends paid deduction and by excluding capital gains) and must satisfy specified asset tests on a quarterly basis. The provisions of the Internal Revenue Code and applicable Treasury regulations regarding qualification as a REIT are more complicated in our casefor Prologis, Inc. because we hold assets through the Operating Partnership.
If we failPrologis, Inc. fails to qualify as a REIT in any taxable year, we will be required to pay federal income tax (including any applicable alternative minimum tax) on taxable income at regular corporate rates. Unless we are entitled to relief under certain statutory provisions, wePrologis, Inc. would be disqualified from treatment as a REIT for the four taxable years following the year in which weit lost the qualification. If wePrologis, Inc. lost ourits REIT status, our net earnings would be significantly reduced for each of the years involved.
14
Furthermore, we own a direct or indirect interest in certain subsidiary REITs whichthat elected to be taxed as REITs under Sections 856 through 860 of the Internal Revenue Code. Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests, and any dividend income or gains derived by us from such subsidiary REIT will generally be treated as income that qualifies for purposes of the REIT gross income tests. To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. If such subsidiary REIT were to fail to qualify as a REIT, and certain relief provisions did not apply, it would be treated as a regular taxable corporation and its income would be subject to United StatesU.S. federal income tax. In addition, a failure of the subsidiary REIT to qualify as a REIT would have an adverse effect on ourthe ability of Prologis, Inc. to comply with the REIT income and asset tests, and thus ourits ability to qualify as a REIT.
Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction.
From time to time, we may transfer or otherwise dispose of some of our properties, including by contributing properties to our co-investment ventures. Under the Internal Revenue Code, any gain resulting from transfers of properties we hold as inventory or primarily for sale to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax. We do not believe that our transfers or disposals of property or our contributions of properties into our co-investment ventures are prohibited transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The Internal Revenue Service may contend that certain transfers or dispositions of properties by us or contributions of properties into our co-investment ventures are prohibited transactions. While we believe that the Internal Revenue Service would not prevail in any such dispute, if the Internal Revenue CodeService were to argue successfully that a transfer, disposition or contribution of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT.
Legislative or regulatory action could adversely affect us.
In recent years, numerous legislative, judicial and administrative changes have been made to the federalU.S. and foreign income tax tawslaws applicable to investments in real estate, REITs, similar entities and similar entities.investments. Additional changes to tax laws are likely to continue to occur in the future, both in and outside of the U.S. and may impact our taxation or that of our stockholders.
Other Risks
Risks Associated with our Dependence on Key Personnel.
We depend on the efforts of our executive officers and other key employees. From time to time, our personnel and their roles may change. In connection with the completion of the Merger, there were changes to our personnel and their roles. While we believe that we have retained
our key talent and have found suitable employees to meet our personnel needs, the loss of key personnel, any change in their roles, or the limitation of their availability could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to security holders and the market price of our securities. If we are unable to continue to attract and retain our executive officers, or if compensation costs required to attract and retain key employees become more expensive, our performance and competitive position could be materially adversely affected.
Compliance or failure to comply with the Americans with Disabilities Act and other similar regulations could result in substantial costs.
Under the Americans with Disabilities Act, places of public accommodation must meet certain federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants. If we are required to make unanticipated expenditures to comply with the Americans with Disabilities Act, including removing access barriers, then our cash flow and the amounts available to make distributions and payments to our security holders may be adversely affected. Our properties are also subject to various federal, state and local regulatory requirements, such as state and local fire and life-safety requirements. We could incur fines or private damage awards if we fail to comply with these requirements. While we believe that our properties are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us that will affect our cash flow and results of operations.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.
The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weakness, in our internal control over financial reporting that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in the price of our securities, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
We are exposed to the potential impacts of future climate change and climate change related risks.
We consider that we are exposed to potential physical risks from possible future changes in climate. Our distribution facilities may be exposed to rare catastrophic weather events, such as severe storms and/or floods. If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
We do not currently consider ourselves to be exposed to regulatory risks related to climate change, as our operations do not emit a significant amount of greenhouse gases. However, we may be adversely impacted as a real estate developer in the future by potential impacts to the supply chain and/or stricter energy efficiency standards for buildings.
ITEM 1B. Unresolved Staff Comments
None.
We are investedinvest in real estate properties that are predominately industrial properties. In Japan, our industrial properties are generally multi-level centers, which is common in Japan due to the high cost and limited availability of land.logistics facilities. Our properties are typically used for distribution, storage, packaging, assembly and light manufacturing of consumer and industrial products. The vast majority of our operating properties are used by our customers for bulk distribution.
Our investment strategy focuses on providing distribution and logistics space to customers whose businesses are tied to global trade and depend on the efficient movement of goods through the global supply chain. Our properties are primarily located in two main market types, global markets and regional markets.
We manage our business on an “ownership blind” basis without regard to whether a particular property is wholly owned by us or owned by oneThe following tables provide details of our co-investment ventures.consolidated operating properties, investment in land and development portfolio. We believe this allows us to make business decisions based on the property operations and not based on our ownership. As such, we have also included the operating property information below for our Real Estate Operations segment and our owned and managed portfolio. The owned and managed portfolio includes the properties we consolidate and the properties owned by our unconsolidated co-investment ventures reflected at 100% of Prologis’the amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share.
Included in the operating property information below for our Real Estate Operations segmentconsolidated operating properties are 70646 buildings that are owned primarily by entitiestwo co-investment ventures that we consolidate but of which we own less than 100%. of the equity. No individual property or group of properties operating as a single business unit amounted to 10% or more of our consolidated total assets at December 31, 2013,2016, or generated income equal to 10% or more of our consolidated gross revenues for the year ended December 31, 2013.
15
Dollars and square feet in the following tables are in thousands.millions and items notated by ‘0‘ indicate an amount that rounds to less than one million:
Consolidated - Real Estate Operations Segment | Owned and Managed | |||||||||||||||||||
Operating properties | Rentable Square | Gross Book Value | Encumbrances (1) | Rentable Square | Gross Book Value | |||||||||||||||
Americas: | ||||||||||||||||||||
Global Markets: | ||||||||||||||||||||
United States: | ||||||||||||||||||||
Atlanta | 11,641 | $ | 473,711 | $ | 40,256 | 15,122 | $ | 682,544 | ||||||||||||
Baltimore/Washington | 3,993 | 295,896 | 37,953 | 7,596 | 618,639 | |||||||||||||||
Central & Eastern Pennsylvania | 12,261 | 742,091 | 68,760 | 14,842 | 894,956 | |||||||||||||||
Central Valley California | 7,592 | 449,315 | 44,735 | 9,985 | 587,562 | |||||||||||||||
Chicago | 26,190 | 1,496,703 | 196,157 | 36,566 | 2,187,163 | |||||||||||||||
Dallas/Fort Worth | 17,528 | 753,568 | 109,625 | 23,915 | 1,135,489 | |||||||||||||||
Houston | 6,146 | 288,460 | 47,633 | 10,907 | 644,994 | |||||||||||||||
New Jersey/New York City | 13,798 | 1,051,973 | 116,625 | 20,678 | 1,824,860 | |||||||||||||||
San Francisco Bay Area | 15,301 | 1,583,637 | 59,083 | 19,208 | 1,973,099 | |||||||||||||||
Seattle | 3,386 | 319,743 | 44,430 | 10,758 | 994,090 | |||||||||||||||
South Florida | 6,612 | 691,439 | 55,085 | 10,677 | 1,046,435 | |||||||||||||||
Southern California | 42,343 | 3,766,502 | 401,537 | 57,284 | 5,149,176 | |||||||||||||||
On Tarmac | 2,417 | 274,856 | 6,150 | 2,712 | 325,469 | |||||||||||||||
Canada | 4,690 | 438,984 | - | 6,383 | 604,006 | |||||||||||||||
Mexico | 21,460 | 1,254,170 | 344,626 | 30,964 | 1,858,728 | |||||||||||||||
Brazil | - | - | - | 4,043 | 370,412 | |||||||||||||||
Regional Markets - United States: | ||||||||||||||||||||
Austin | 1,006 | 60,056 | - | 2,213 | 140,969 | |||||||||||||||
Charlotte | 1,836 | 71,626 | 14,307 | 2,275 | 97,661 | |||||||||||||||
Cincinnati | 3,387 | 119,402 | 40,400 | 6,663 | 273,432 | |||||||||||||||
Columbus | 6,791 | 250,142 | 34,279 | 9,344 | 360,972 | |||||||||||||||
Denver | 3,895 | 227,374 | 29,646 | 5,136 | 292,220 | |||||||||||||||
Indianapolis | 2,614 | 91,797 | 29,297 | 5,095 | 199,794 | |||||||||||||||
Las Vegas | 2,882 | 152,275 | - | 3,585 | 205,693 | |||||||||||||||
Louisville | 3,435 | 143,684 | 12,608 | 3,435 | 143,684 | |||||||||||||||
Memphis | 4,577 | 156,959 | 23,691 | 5,297 | 183,679 | |||||||||||||||
Nashville | 4,562 | 159,939 | 41,603 | 5,961 | 211,885 | |||||||||||||||
Orlando | 2,959 | 184,449 | - | 4,178 | 277,403 | |||||||||||||||
Phoenix | 2,036 | 104,417 | - | 2,528 | 129,233 | |||||||||||||||
Portland | 826 | 51,465 | 8,940 | 2,052 | 150,855 | |||||||||||||||
San Antonio | 3,759 | 163,349 | 22,502 | 5,606 | 260,810 | |||||||||||||||
Other Markets - United States | 8,756 | 395,416 | 28,893 | 11,848 | 628,865 | |||||||||||||||
|
| |||||||||||||||||||
Subtotal Americas | 248,679 | 16,213,398 | 1,858,821 | 356,856 | 24,454,777 | |||||||||||||||
|
| |||||||||||||||||||
Europe: | ||||||||||||||||||||
Global Markets: | ||||||||||||||||||||
Belgium | 440 | 36,592 | - | 2,016 | 173,266 | |||||||||||||||
France | 899 | 71,553 | - | 30,026 | 2,536,025 | |||||||||||||||
Germany | 1,257 | 87,947 | - | 20,020 | 1,857,506 | |||||||||||||||
Netherlands | - | - | - | 11,089 | 1,064,607 | |||||||||||||||
Poland | 1,645 | 85,002 | - | 21,234 | 1,471,898 | |||||||||||||||
Spain | 449 | 45,679 | - | 7,125 | 584,138 | |||||||||||||||
United Kingdom | 834 | 83,350 | - | 20,077 | 2,590,057 | |||||||||||||||
Regional Markets: | ||||||||||||||||||||
Czech Republic | 278 | 25,699 | - | 6,828 | 520,979 | |||||||||||||||
Hungary | 201 | 12,163 | - | 5,348 | 386,789 | |||||||||||||||
Italy | 1,277 | 86,843 | - | 8,378 | 540,323 | |||||||||||||||
Slovakia | 548 | 32,412 | - | 4,620 | 332,142 | |||||||||||||||
Sweden | 524 | 38,407 | - | 3,807 | 401,558 | |||||||||||||||
Other Markets | 1,274 | 66,757 | - | 1,274 | 66,757 | |||||||||||||||
|
| |||||||||||||||||||
Subtotal Europe | 9,626 | 672,404 | - | 141,842 | 12,526,045 | |||||||||||||||
|
| |||||||||||||||||||
Asia | ||||||||||||||||||||
Global Markets: | ||||||||||||||||||||
China | 2,194 | 74,107 | - | 6,566 | 340,327 | |||||||||||||||
Japan | 4,365 | 647,415 | 14,294 | 22,873 | 4,078,374 | |||||||||||||||
Singapore | 942 | 145,032 | - | 942 | 145,032 | |||||||||||||||
|
| |||||||||||||||||||
Subtotal Asia | 7,501 | 866,554 | 14,294 | 30,381 | 4,563,733 | |||||||||||||||
|
| |||||||||||||||||||
Total operating portfolio | 265,806 | $ | 17,752,356 | $ | 1,873,115 | 529,079 | $ | 41,544,555 | ||||||||||||
Value added properties (2) | 1,291 | 48,708 | - | 2,311 | 87,274 | |||||||||||||||
|
| |||||||||||||||||||
Total operating properties | 267,097 | $ | 17,801,064 | $ | 1,873,115 | 531,390 | $ | 41,631,829 |
|
| Consolidated Operating Properties |
|
| Owned and Managed |
| ||||||||||||||
Operating properties |
| Rentable Square Footage |
|
| Gross Book Value |
|
| Encumbrances (1) |
|
| Rentable Square Footage |
|
| Gross Book Value |
| |||||
Global Markets – U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta |
|
| 16 |
|
| $ | 712 |
|
| $ | 128 |
|
|
| 17 |
|
| $ | 812 |
|
Baltimore/Washington D.C. |
|
| 6 |
|
|
| 518 |
|
|
| 68 |
|
|
| 8 |
|
|
| 704 |
|
Central Valley California |
|
| 11 |
|
|
| 609 |
|
|
| 61 |
|
|
| 11 |
|
|
| 638 |
|
Central and Eastern Pennsylvania |
|
| 18 |
|
|
| 1,103 |
|
|
| 56 |
|
|
| 18 |
|
|
| 1,104 |
|
Chicago |
|
| 34 |
|
|
| 2,137 |
|
|
| 129 |
|
|
| 41 |
|
|
| 2,616 |
|
Dallas/Fort Worth |
|
| 22 |
|
|
| 1,166 |
|
|
| 196 |
|
|
| 25 |
|
|
| 1,446 |
|
Houston |
|
| 9 |
|
|
| 519 |
|
|
| 68 |
|
|
| 13 |
|
|
| 832 |
|
New Jersey/New York City |
|
| 28 |
|
|
| 2,778 |
|
|
| 357 |
|
|
| 33 |
|
|
| 3,372 |
|
San Francisco Bay Area |
|
| 16 |
|
|
| 1,630 |
|
|
| 10 |
|
|
| 19 |
|
|
| 1,972 |
|
Seattle |
|
| 8 |
|
|
| 818 |
|
|
| 59 |
|
|
| 15 |
|
|
| 1,515 |
|
South Florida |
|
| 11 |
|
|
| 1,136 |
|
|
| 128 |
|
|
| 15 |
|
|
| 1,501 |
|
Southern California |
|
| 61 |
|
|
| 5,727 |
|
|
| 461 |
|
|
| 72 |
|
|
| 6,922 |
|
Regional Markets – U.S. (15 markets) (2) |
|
| 68 |
|
|
| 3,546 |
|
|
| 584 |
|
|
| 70 |
|
|
| 3,608 |
|
Other Markets – U.S (5 markets) |
|
| 1 |
|
|
| 59 |
|
|
| - |
|
|
| 1 |
|
|
| 106 |
|
Subtotal U.S. |
|
| 309 |
|
|
| 22,458 |
|
|
| 2,305 |
|
|
| 358 |
|
|
| 27,148 |
|
Global Markets – Other Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8 |
|
|
| 505 |
|
Canada |
|
| 8 |
|
|
| 635 |
|
|
| 145 |
|
|
| 8 |
|
|
| 635 |
|
Mexico: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guadalajara |
| 0 |
|
|
| 4 |
|
|
| - |
|
|
| 6 |
|
|
| 321 |
| |
Mexico City |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 12 |
|
|
| 819 |
|
Monterrey |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4 |
|
|
| 236 |
|
Regional Markets – Other Americas (3 markets) |
| 0 |
|
|
| 14 |
|
|
| - |
|
|
| 13 |
|
|
| 584 |
| |
Subtotal Other Americas |
|
| 8 |
|
|
| 653 |
|
|
| 145 |
|
|
| 51 |
|
|
| 3,100 |
|
Global Markets – Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belgium |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3 |
|
|
| 188 |
|
Czech Republic |
|
| 1 |
|
|
| 35 |
|
|
| - |
|
|
| 11 |
|
|
| 663 |
|
France |
|
| 2 |
|
|
| 78 |
|
|
| - |
|
|
| 33 |
|
|
| 2,141 |
|
Germany |
|
| 2 |
|
|
| 120 |
|
|
| - |
|
|
| 23 |
|
|
| 1,648 |
|
Italy |
|
| 1 |
|
|
| 68 |
|
|
| - |
|
|
| 10 |
|
|
| 528 |
|
Netherlands |
| 0 |
|
|
| 20 |
|
|
| - |
|
|
| 18 |
|
|
| 1,281 |
| |
Poland |
|
| 1 |
|
|
| 51 |
|
|
| - |
|
|
| 25 |
|
|
| 1,338 |
|
Spain |
|
| 1 |
|
|
| 35 |
|
|
| - |
|
|
| 8 |
|
|
| 537 |
|
U.K. |
|
| 1 |
|
|
| 121 |
|
|
| - |
|
|
| 23 |
|
|
| 2,718 |
|
Regional Markets – Europe (3 markets) |
|
| 1 |
|
| 47 |
|
|
| - |
|
|
| 17 |
|
|
| 960 |
| |
Other Markets – Europe (1 market) |
| 0 |
|
|
| 9 |
|
|
| - |
|
| 1 |
|
|
| 8 |
| ||
Subtotal Europe |
|
| 10 |
|
|
| 584 |
|
|
| - |
|
|
| 172 |
|
|
| 12,010 |
|
Global Markets – Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China |
|
| 2 |
|
|
| 69 |
|
|
| - |
|
|
| 14 |
|
|
| 627 |
|
Japan |
|
| 2 |
|
|
| 165 |
|
|
| - |
|
|
| 26 |
|
|
| 4,265 |
|
Singapore |
|
| 1 |
|
|
| 128 |
|
|
| - |
|
|
| 1 |
|
|
| 129 |
|
Subtotal Asia |
|
| 5 |
|
|
| 362 |
|
|
| - |
|
|
| 41 |
|
|
| 5,021 |
|
Total operating portfolio (3) |
|
| 332 |
|
|
| 24,057 |
|
|
| 2,450 |
|
|
| 622 |
|
|
| 47,279 |
|
Value-added properties |
|
| 2 |
|
|
| 117 |
|
|
| - |
|
|
| 3 |
|
|
| 192 |
|
Total operating properties |
|
| 334 |
|
| $ | 24,174 |
|
| $ | 2,450 |
|
|
| 625 |
|
| $ | 47,471 |
|
16
Investment in Land Development Consolidated land and development portfolio in the Real Estate Operations segment Estimated Build (sq. ft.) (3) Americas: Global Markets: United States: Atlanta Baltimore/Washington Central & Eastern Pennsylvania Central Valley California Chicago Dallas/Ft. Worth Houston New Jersey/New York City Seattle South Florida Southern California Canada Mexico Regional Markets: United States: Central Florida Charlotte Cincinnati Columbus Denver Indianapolis Las Vegas Memphis Phoenix Portland Other Markets - United States Subtotal Americas Europe: Global Markets: Belgium France Germany Netherlands Poland Spain United Kingdom Regional Markets: Czech Republic Hungary Italy Slovakia Sweden Other markets Subtotal Europe Asia: Global Markets: China Japan Singapore Subtotal Asia Total land and development portfolio
Portfolio Acres
Out Potential Current
Investment Rentable
Square
Footage Total
Expected
Investment (4) 613 8,655 $ 26,584 - $ - 97 1,147 10,245 395 42,742 416 5,412 50,192 - - 1,144 20,560 42,304 - - 511 9,497 33,209 - - 428 7,583 30,329 2,023 83,665 81 1,191 9,201 282 17,184 183 2,841 76,281 2,645 275,544 - - - 241 17,067 341 5,794 151,377 312 27,585 699 13,939 129,949 2,363 159,094 179 3,435 54,928 910 101,608 789 14,530 152,090 1,944 121,970 129 1,901 27,027 - - 20 308 1,389 - - 15 216 2,035 1,791 76,127 142 2,364 4,705 767 29,992 49 836 6,281 402 23,556 39 655 1,973 715 23,855 75 1,281 7,818 - - 165 2,839 6,901 - - 36 698 3,451 486 22,269 23 389 2,843 - - 565 8,790 37,358 - - 6,739 114,861 868,470 15,276 1,022,258 27 526 10,744 - - 448 7,992 79,745 1,322 71,058 112 2,239 25,752 - - 56 1,538 53,355 - - 696 12,958 89,516 376 24,350 100 2,021 17,031 - - 665 9,275 184,687 1,865 235,650 191 3,201 38,501 238 15,304 338 5,686 40,388 - - 107 2,451 34,048 - - 90 1,947 16,633 151 9,798 - - - 164 20,159 119 2,600 22,236 - - 2,949 52,434 612,636 4,116 376,319 18 172 8,793 131 5,707 41 2,173 26,267 3,538 459,131 - - - 17 2,056 59 2,345 35,060 3,686 466,894 9,747 169,640 $ 1,516,166 23,078 $ 1,865,471
The following is a summary of our investment in consolidated real estate properties at December 31, 2013 (in thousands):
|
| Consolidated – Investment in Land |
|
| Consolidated – Development Portfolio |
| ||||||||||||||
Region |
| Acres |
|
| Estimated Build Out Potential (square feet) (4) |
|
| Current Investment |
|
| Rentable Square Footage |
|
| TEI (5) |
| |||||
Global Markets – U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta |
|
| 135 |
|
|
| 2 |
|
| $ | 4 |
|
|
| 1 |
|
| $ | 49 |
|
Baltimore/Washington D.C. |
|
| 81 |
|
| 0 |
|
|
| 21 |
|
|
| - |
|
|
| - |
| |
Central Valley California |
|
| 1,090 |
|
|
| 22 |
|
|
| 93 |
|
|
| 1 |
|
|
| 98 |
|
Central and Eastern Pennsylvania |
|
| 137 |
|
|
| 2 |
|
|
| 24 |
|
|
| - |
|
|
| - |
|
Chicago |
|
| 219 |
|
|
| 4 |
|
|
| 19 |
|
| 0 |
|
|
| 20 |
| |
Dallas/Fort Worth |
|
| 178 |
|
|
| 3 |
|
|
| 23 |
|
|
| 1 |
|
|
| 40 |
|
Houston |
|
| 185 |
|
|
| 3 |
|
|
| 15 |
|
| 0 |
|
|
| 17 |
| |
New Jersey/New York City |
|
| 119 |
|
|
| 1 |
|
|
| 38 |
|
|
| 1 |
|
|
| 116 |
|
San Francisco Bay Area |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1 |
|
|
| 63 |
|
Seattle |
|
| 43 |
|
|
| 1 |
|
|
| 30 |
|
|
| 1 |
|
|
| 67 |
|
South Florida |
|
| 215 |
|
|
| 4 |
|
|
| 117 |
|
| 0 |
|
|
| 57 |
| |
Southern California |
|
| 144 |
|
|
| 3 |
|
|
| 30 |
|
|
| 2 |
|
|
| 166 |
|
Regional Markets – U.S. (15 markets) |
|
| 497 |
|
|
| 8 |
|
|
| 61 |
|
|
| 4 |
|
|
| 231 |
|
Other Markets – U.S (4 markets) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Subtotal U.S. |
|
| 3,043 |
|
|
| 53 |
|
|
| 475 |
|
|
| 12 |
|
|
| 924 |
|
Global Markets – Other Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
| 161 |
|
|
| 3 |
|
|
| 41 |
|
|
| 1 |
|
|
| 56 |
|
Mexico: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guadalajara |
|
| 15 |
|
| 0 |
|
|
| 4 |
|
| 0 |
|
|
| 28 |
| ||
Mexico City |
|
| 246 |
|
|
| 5 |
|
|
| 127 |
|
|
| 1 |
|
|
| 69 |
|
Monterrey |
|
| 110 |
|
|
| 2 |
|
|
| 22 |
|
|
| 1 |
|
|
| 31 |
|
Regional Markets – Other Americas (3 markets) |
|
| 352 |
|
|
| 6 |
|
|
| 31 |
|
|
| - |
|
|
| - |
|
Subtotal Other Americas |
|
| 884 |
|
|
| 16 |
|
|
| 225 |
|
|
| 3 |
|
|
| 184 |
|
Global Markets – Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belgium |
|
| 45 |
|
|
| 1 |
|
|
| 13 |
|
|
| - |
|
|
| - |
|
Czech Republic |
|
| 162 |
|
|
| 3 |
|
|
| 27 |
|
| 0 |
|
|
| 29 |
| |
France |
|
| 319 |
|
|
| 6 |
|
|
| 54 |
|
|
| 1 |
|
|
| 70 |
|
Germany |
|
| 50 |
|
|
| 1 |
|
|
| 13 |
|
|
| 1 |
|
|
| 43 |
|
Italy |
|
| 108 |
|
|
| 2 |
|
|
| 27 |
|
| 0 |
|
|
| 12 |
| |
Netherlands |
|
| 46 |
|
|
| 1 |
|
|
| 28 |
|
|
| 1 |
|
|
| 64 |
|
Poland |
|
| 443 |
|
|
| 8 |
|
|
| 42 |
|
|
| 1 |
|
|
| 53 |
|
Spain |
|
| 73 |
|
|
| 2 |
|
|
| 27 |
|
|
| 1 |
|
|
| 33 |
|
U.K. |
|
| 291 |
|
|
| 4 |
|
|
| 132 |
|
|
| 1 |
|
|
| 177 |
|
Regional Markets – Europe (3 markets) |
|
| 356 |
|
|
| 6 |
|
|
| 35 |
|
|
| 2 |
|
|
| 100 |
|
Other Markets – Europe (1 market) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Subtotal Europe |
|
| 1,893 |
|
|
| 34 |
|
|
| 398 |
|
|
| 8 |
|
|
| 581 |
|
Global Markets – Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China |
|
| 18 |
|
| 0 |
|
|
| 5 |
|
|
| - |
|
|
| - |
| |
Japan |
|
| 54 |
|
|
| 4 |
|
|
| 116 |
|
|
| 5 |
|
|
| 754 |
|
Subtotal Asia |
|
| 72 |
|
|
| 4 |
|
|
| 121 |
|
|
| 5 |
|
|
| 754 |
|
Total land and development portfolio |
|
| 5,892 |
|
|
| 107 |
|
| $ | 1,219 |
|
|
| 28 |
|
| $ | 2,443 |
|
Investment Before Depreciation | ||||
Industrial operating properties | $ | 17,801,064 | ||
Development portfolio, including cost of land | 1,021,017 | |||
Land | 1,516,166 | |||
Other real estate investments (5) | 486,230 | |||
|
| |||
Total consolidated real estate properties | $ | 20,824,477 |
(1) | Certain of our consolidated properties are pledged as security under |
(2) | No regional market within the U.S. represented more than 2% of the total gross book value of the consolidated operating properties. The regional markets within the U.S. by order of highest to lowest gross book value were: Las Vegas, Denver, Louisville, Orlando, Columbus, Reno, Nashville, Cincinnati, San Antonio, Portland, Indianapolis, Austin, Phoenix, Charlotte and Memphis. |
(3) | Included in our consolidated operating properties |
(4) | Represents the estimated finished square feet available for |
17
The following table summarizes our investment in consolidated real estate properties at December 31, 2016 (in millions):
|
| Investment Before Depreciation |
| |
Operating properties, excluding assets held for sale or contribution |
| $ | 23,943 |
|
Development portfolio, including cost of land |
|
| 1,432 |
|
Land |
|
| 1,219 |
|
Other real estate investments (1) |
|
| 525 |
|
Total consolidated real estate properties |
| $ | 27,119 |
|
(1) | Included in other real estate investments are: (i) |
Lease ExpirationsLEASE EXPIRATIONS
We generally lease our properties on a long termlong-term basis (with a weighted average lease term remaining of sevenfour years). The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place as ofat December 31, 2013, without giving effect to the exercise of renewal options or termination rights, if any2016 (dollars and square feet in thousands).millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Year | Number of Leases | Occupied Square Feet | Annualized Base Rent | % of Annualized Base Rent | ||||||||||||||||||||||||||||||||
Month-to-month | 234 | 7,213 | $ | 23,871 | 1.8% | |||||||||||||||||||||||||||||||
2014 | 904 | 36,110 | 180,084 | 13.9% | ||||||||||||||||||||||||||||||||
2015 | 877 | 48,321 | 235,977 | 18.2% | ||||||||||||||||||||||||||||||||
2016 | 746 | 45,931 | 226,200 | 17.4% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| NER |
| |||||||||||||||||||||||||
|
| Number of Leases |
|
| Occupied Square Feet |
|
| Dollars |
|
| Percent of Total |
|
| Dollars Per Square Foot |
| |||||||||||||||||||||
2017 | 507 | 36,245 | 184,766 | 14.2% |
|
| 750 |
|
|
| 38 |
|
| $ | 182 |
|
|
| 11.3 | % |
| $ | 4.76 |
| ||||||||||||
2018 | 394 | 26,539 | 152,013 | 11.7% |
|
| 827 |
|
|
| 49 |
|
|
| 246 |
|
|
| 15.3 | % |
|
| 5.01 |
| ||||||||||||
2019 | 217 | 22,944 | 115,797 | 8.9% |
|
| 747 |
|
|
| 52 |
|
|
| 242 |
|
|
| 15.0 | % |
|
| 4.70 |
| ||||||||||||
2020 | 81 | 7,876 | 46,865 | 3.6% |
|
| 568 |
|
|
| 34 |
|
|
| 176 |
|
|
| 10.9 | % |
|
| 5.24 |
| ||||||||||||
2021 | 50 | 6,164 | 28,558 | 2.2% |
|
| 592 |
|
|
| 45 |
|
|
| 232 |
|
|
| 14.4 | % |
|
| 5.19 |
| ||||||||||||
2022 | 34 | 3,074 | 20,045 | 1.5% |
|
| 281 |
|
|
| 32 |
|
|
| 160 |
|
|
| 9.9 | % |
|
| 5.05 |
| ||||||||||||
2023 | 46 | 5,631 | 38,640 | 3.0% |
|
| 138 |
|
|
| 16 |
|
|
| 85 |
|
|
| 5.3 | % |
|
| 5.35 |
| ||||||||||||
2024 and thereafter | 46 | 7,132 | 47,203 | 3.6% | ||||||||||||||||||||||||||||||||
2024 |
|
| 77 |
|
|
| 10 |
|
|
| 57 |
|
|
| 3.5 | % |
|
| 5.67 |
| ||||||||||||||||
2025 |
|
| 59 |
|
|
| 12 |
|
|
| 66 |
|
|
| 4.1 | % |
|
| 5.68 |
| ||||||||||||||||
2026 |
|
| 30 |
|
|
| 7 |
|
|
| 45 |
|
|
| 2.8 | % |
|
| 6.35 |
| ||||||||||||||||
Thereafter |
|
| 75 |
|
|
| 20 |
|
|
| 121 |
|
|
| 7.5 | % |
|
| 6.20 |
| ||||||||||||||||
|
|
|
|
|
| 4,144 |
|
|
| 315 |
|
| $ | 1,612 |
|
|
| 100.0 | % |
| $ | 5.15 |
| |||||||||||||
Month to month |
|
| 135 |
|
|
| 7 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | 4,136 | 253,180 | $ | 1,300,019 | 100% |
|
| 4,279 |
|
|
| 322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18
Unconsolidated Co-Investment VenturesCO-INVESTMENT VENTURES
Included in our owned and managed portfolio at December 31, 2013, are consolidated and unconsolidated co-investment ventures that hold investments in 1,323 real estate properties, that we hold through our equity investments in unconsolidated co-investment ventures, primarily industrial propertieslogistics facilities that we also manage. Below is a summary of ourOur unconsolidated co-investment ventures which representsare accounted for under the equity method. The amounts included for the unconsolidated ventures are reflected at 100% of the venture,amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share, as ofshare. The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 20132016 (in thousands).millions):
Operating Portfolio | Development Portfolio - Total Expected Investment | Investment in Land | ||||||||||||||
Unconsolidated Co-Investment Venture | Square Feet | Gross Book Value | ||||||||||||||
Americas: | ||||||||||||||||
Prologis Targeted U.S. Logistics Fund | 48,490 | $ | 4,418,783 | $ | 3,024 | $ | - | |||||||||
Prologis North American Industrial Fund | 46,500 | 2,859,230 | - | - | ||||||||||||
Prologis Mexico Industrial Fund | 9,503 | 604,558 | - | - | ||||||||||||
Prologis Brazil Logistics Partners Fund (“Brazil Fund”) and related joint ventures | 4,044 | 370,412 | 202,316 | 45,238 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Subtotal Americas | 108,537 | 8,252,983 | 205,340 | 45,238 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Europe: | ||||||||||||||||
Prologis Targeted Europe Logistics Fund | 13,652 | 1,764,442 | 27,963 | - | ||||||||||||
Prologis European Properties Fund II | 62,364 | 5,691,874 | 9,823 | - | ||||||||||||
Europe Logistics Venture 1 | 5,070 | 448,045 | - | - | ||||||||||||
Prologis European Logistics Partners | 51,790 | 3,976,242 | 19,251 | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Subtotal Europe | 132,876 | 11,880,603 | 57,037 | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Asia: | ||||||||||||||||
Nippon Prologis REIT | 18,508 | 3,430,960 | - | - | ||||||||||||
Prologis China Logistics Venture 1 | 4,372 | 266,219 | 241,676 | 23,847 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Subtotal Asia | 22,880 | 3,697,179 | 241,676 | 23,847 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 264,293 | $ | 23,830,765 | $ | 504,053 | $ | 69,085 |
| Operating Properties |
|
|
|
|
|
|
|
|
| ||||||
|
| Square Feet |
|
| Gross Book Value |
|
| Investment in Land |
|
| Development Portfolio – TEI |
| ||||
Consolidated Co-Investment Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prologis North American Industrial Fund (“NAIF”) |
|
| 40 |
|
| $ | 2,438 |
|
| $ | - |
|
| $ | - |
|
Prologis U.S. Logistics Venture (“USLV”) |
|
| 72 |
|
|
| 6,058 |
|
|
| 36 |
|
|
| 96 |
|
Totals |
|
| 112 |
|
| $ | 8,496 |
|
| $ | 36 |
|
| $ | 96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Co-Investment Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prologis Targeted U.S. Logistics Fund (“USLF”) |
|
| 50 |
|
| $ | 4,704 |
|
| $ | - |
|
| $ | - |
|
Subtotal U.S. |
|
| 50 |
|
|
| 4,704 |
|
|
| - |
|
|
| - |
|
Other Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIBRA Prologis |
|
| 34 |
|
|
| 1,942 |
|
|
| 2 |
|
|
| - |
|
Prologis Brazil Logistics Partners Fund I (“Brazil Fund”) and related joint ventures |
|
| 8 |
|
|
| 505 |
|
|
| 128 |
|
|
| 120 |
|
Subtotal Other Americas |
|
| 42 |
|
|
| 2,447 |
|
|
| 130 |
|
|
| 120 |
|
Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe Logistics Venture 1 (“ELV”) (1) |
|
| 6 |
|
|
| 378 |
|
|
| - |
|
|
| - |
|
Prologis European Logistics Partners Sàrl (“PELP”) |
|
| 59 |
|
|
| 3,769 |
|
|
| 28 |
|
|
| 26 |
|
Prologis European Properties Fund II (“PEPF II”) |
|
| 72 |
|
|
| 4,881 |
|
|
| 5 |
|
|
| 19 |
|
Prologis Targeted Europe Logistics Fund (“PTELF”) (1) |
|
| 26 |
|
|
| 2,458 |
|
|
| 2 |
|
|
| - |
|
Subtotal Europe |
|
| 163 |
|
|
| 11,486 |
|
|
| 35 |
|
|
| 45 |
|
Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nippon Prologis REIT (“NPR”) |
|
| 25 |
|
|
| 4,101 |
|
|
| - |
|
|
| - |
|
Prologis China Logistics Venture |
|
| 11 |
|
|
| 559 |
|
|
| 42 |
|
|
| 734 |
|
Subtotal Asia |
|
| 36 |
|
|
| 4,660 |
|
|
| 42 |
|
|
| 734 |
|
Totals |
|
| 291 |
|
| $ | 23,297 |
|
| $ | 207 |
|
| $ | 899 |
|
(1) | In January 2017, we sold our investment in ELV to our fund partner and ELV contributed its properties to PTELF in exchange for equity interests. |
For more information regarding our unconsolidated and consolidated co-investment ventures, see NoteNotes 5 and 12 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
From time to time, we and our unconsolidated entitiesco-investment ventures are parties to a variety of legal proceedings arising in the ordinary course of business. We believe that, with respect to any such matters thatto which we are currently a party, to, the ultimate disposition of any such matter will not result in a material adverse effect on our business, financial position or results of operations.
ITEM 4. Mine Safety Disclosures
Not Applicable
19
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and HoldersMARKET INFORMATION AND HOLDERS
Our common stock is listed on the NYSE under the symbol “PLD.” The following table sets forth the high and low sale price of theour common stock, of Prologis, Inc., as reported in the NYSE Composite Tape, and the declared dividends per common share, for the periods indicated.
| High |
|
| Low |
|
| Dividends |
| ||||||||||||||||
High | Low | Dividends | ||||||||||||||||||||||
2012 | ||||||||||||||||||||||||
2016 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
First Quarter | $ | 36.03 | $ | 28.16 | $ | 0.28 |
| $ | 44.26 |
|
| $ | 35.25 |
|
| $ | 0.42 |
| ||||||
Second Quarter | 36.62 | 30.03 | 0.28 |
| $ | 50.74 |
|
| $ | 43.45 |
|
| $ | 0.42 |
| |||||||||
Third Quarter | 37.58 | 31.03 | 0.28 |
| $ | 54.87 |
|
| $ | 48.46 |
|
| $ | 0.42 |
| |||||||||
Fourth Quarter | 36.80 | 32.31 | 0.28 |
| $ | 53.51 |
|
| $ | 45.93 |
|
| $ | 0.42 |
| |||||||||
2013 | ||||||||||||||||||||||||
2015 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
First Quarter | $ | 41.02 | $ | 37.04 | $ | 0.28 |
| $ | 47.56 |
|
| $ | 41.15 |
|
| $ | 0.36 |
| ||||||
Second Quarter | 45.52 | 35.09 | 0.28 |
| $ | 44.48 |
|
| $ | 37.03 |
|
| $ | 0.36 |
| |||||||||
Third Quarter | 40.58 | 34.60 | 0.28 |
| $ | 42.49 |
|
| $ | 36.26 |
|
| $ | 0.40 |
| |||||||||
Fourth Quarter | 40.99 | 35.71 | 0.28 |
| $ | 43.69 |
|
| $ | 38.66 |
|
| $ | 0.40 |
|
Our future common stock dividends, if and as declared, may vary and will be determined by the Board upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements. These dividends, if and as declared, may be adjusted at the discretion of the Board during the year.
On February 21, 2014,10, 2017, we had approximately 499,613,700529,345,000 shares of common stock outstanding, which were held of record by approximately 5,7874,690 stockholders.
Stock Performance Graph
The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 2008,2011, to the cumulative total return of the Standard and Poor’sS&P 500 Stock Index and the FTSEFinancial Times and Stock Exchange NAREIT Equity REITs Index from December 31, 20082011, to December 31, 2013.2016. The graph assumes an initial investment of $100 in theour common stock of Prologis, Inc. (AMB pre-Merger) and each of the indices on December 31, 2008,2011, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
*$100 invested on 12/31/08 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.20
Copyright© 2014 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
DividendsPREFERRED STOCK DIVIDENDS
In order to comply with the REIT requirements
At December 31, 2016, and 2015, we had 1.6 million shares of the Internal Revenue Code, we are generally required to make common andSeries Q preferred stock dividends (other than capital gain distributions) to our stockholders in amounts that together at least equal (i) the sumwith a liquidation preference of (a) 90% of our “REIT taxable income” computed without regard to the dividends paid deduction and net capital gains and (b) 90% of the net income (after tax), if any, from foreclosure property, minus (ii) certain excess non-cash income. Our common stock distribution policy is to distribute a percentage of our cash flow that ensures that we will meet the distribution requirements of the Internal Revenue Code and that allows us to also retain cash to meet other needs, such as capital improvements and other investment activities.
In 2013, we paid a quarterly cash dividend of $0.28$50 per common share. Our future common stock dividends may vary and will be determined by our Board upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
On April 19, 2013, we redeemed all of the outstanding series L, M, O, P, R, and S preferred stock. On December 31, 2013, we had one remaining series of preferred stock outstanding, the “series Q preferred stock”.
Holders of preferred stock outstanding have limited voting rights, subject to certain conditions, and are entitled to receive cumulative preferential dividends based upon each series’ respective liquidation preference. Dividends are payable quarterly in arrears on the last day of March, June, September and December. Dividends are payable when, and if, they have been declared by the Board, out of funds legally available for payment of dividends. After the respective redemption dates, preferred stock can be redeemed at our option. The following table sets forth the Company’s dividends paid or payable per share were $4.27 for the years ended December 31, 20132016, and 2012:2015.
Years Ended December 31, | ||||||||
2013 | 2012 | |||||||
Series L preferred stock | $ | 0.41 | $ | 1.63 | ||||
Series M preferred stock | $ | 0.42 | $ | 1.69 | ||||
Series O preferred stock | $ | 0.44 | $ | 1.75 | ||||
Series P preferred stock | $ | 0.43 | $ | 1.71 | ||||
Series Q preferred stock | $ | 4.27 | $ | 4.27 | ||||
Series R preferred stock | $ | 0.42 | $ | 1.69 | ||||
Series S preferred stock | $ | 0.42 | $ | 1.69 |
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
For more information regarding dividends, see Note 10 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
SALES OF UNREGISTERED SECURITIES
During 2016, we issued an aggregate of 1.9 million shares of common stock of Prologis, Inc. in connection with the redemption of common units of Prologis, L.P. During 2015, we issued common units and Class A Units of Prologis, L.P. See Note 11 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information. The issuance of the shares of common stock, common units and Class A Units was undertaken in reliance upon the exemption from registration requirements of the Securities Authorized for Issuance Under Equity Compensation PlansAct of 1933, as amended, afforded by Section 4(a)(2) thereof.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
For information regarding securities authorized for issuance under our equity compensation plans, see Notes 10 and 13 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
Other Stockholder MattersOTHER STOCKHOLDER MATTERS
Common Stock Plans
See our 2014 Proxy Statement or our subsequent amendment of this Form 10-K for further
Further information relative to our equity compensation plans.
21
ITEM 6. Selected Financial Data
The following table sets forthsummarizes selected financial data related to our historical financial condition and results of operations for 2013 and the four preceding years for both Prologis, Inc. and the Operating Partnership. As previously discussed, since ProLogis was the accounting acquirer in the Merger, the historical results of ProLogis are included for the entire period presented and the combined company’s results are included subsequent to the Merger. Certain amounts for the years prior to 2013 presented in the table below have been reclassified to conform to the 2013 financial statement presentation and to reflect discontinued operations. The amounts in the tables below are inPrologis, L.P. (in millions, except for per share/share and unit amounts.amounts):
Years Ended December 31, | Years Ended December 31, |
| |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 (1) | 2010 | 2009 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
| |||||||||||||||||||||
Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Total revenues | $ | 1,750 | $ | 1,961 | $ | 1,422 | $ | 827 | $ | 974 | $ | 2,533 |
|
| $ | 2,197 |
|
| $ | 1,761 |
|
| $ | 1,750 |
|
| $ | 1,961 |
| ||||||||||
Earnings (loss) from continuing operations (2) | $ | 230 | $ | (106) | $ | (275) | $ | (1,605) | $ | (372) | |||||||||||||||||||||||||||||
Net earnings (loss) per share attributable to common stock / unitholders - Basic (2): | |||||||||||||||||||||||||||||||||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net (1) | $ | 757 |
|
| $ | 759 |
|
| $ | 726 |
|
| $ | 715 |
|
| $ | 72 |
| ||||||||||||||||||||
Consolidated net earnings (loss) | $ | 1,293 |
|
| $ | 926 |
|
| $ | 739 |
|
| $ | 230 |
|
| $ | (106 | ) | ||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders and unitholders – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Continuing operations | $ | 0.40 | $ | (0.35) | $ | (0.83) | $ | (7.42) | $ | (2.21) | $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
| $ | 0.40 |
|
| $ | (0.35 | ) | ||||||||||
Discontinued operations (3) | $ | 0.25 | $ | 0.17 | $ | 0.32 | $ | 1.52 | $ | 2.20 | |||||||||||||||||||||||||||||
Net earnings (loss) per share attributable to common stock / unitholders - Basic | $ | 0.65 | $ | (0.18) | $ | (0.51) | $ | (5.90) | $ | (0.01) | |||||||||||||||||||||||||||||
Net earnings (loss) per share attributable to common stock / unitholders - Diluted (2): | |||||||||||||||||||||||||||||||||||||||
Discontinued operations (2) (3) |
| - |
|
|
| - |
|
|
| - |
|
|
| 0.25 |
|
|
| 0.17 |
| ||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders and unitholders – Basic | $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
| $ | 0.65 |
|
| $ | (0.18 | ) | ||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders and unitholders – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Continuing operations | $ | 0.39 | $ | (0.34) | $ | (0.82) | $ | (7.42) | $ | (2.21) | $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
| $ | 0.39 |
|
| $ | (0.34 | ) | ||||||||||
Discontinued operations | $ | 0.25 | $ | 0.16 | $ | 0.31 | $ | 1.52 | 2.20 |
| - |
|
|
| - |
|
|
| - |
|
|
| 0.25 |
|
|
| 0.16 |
| |||||||||||
Net earnings (loss) per share attributable to common stock / unitholders - Diluted | $ | 0.64 | $ | (0.18) | $ | (0.51) | $ | (5.90) | $ | (0.01) | |||||||||||||||||||||||||||||
Common share / unit distributions per share / unit (2) | $ | 1.12 | $ | 1.12 | $ | 1.06 | $ | 1.25 | $ | 1.57 | |||||||||||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders and unitholders – Diluted | $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
| $ | 0.64 |
|
| $ | (0.18 | ) | ||||||||||||||||||||
Dividends per common share and distributions per common unit | $ | 1.68 |
|
| $ | 1.52 |
|
| $ | 1.32 |
|
| $ | 1.12 |
|
| $ | 1.12 |
| ||||||||||||||||||||
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Total assets | $ | 24,572 | $ | 27,310 | $ | 27,724 | $ | 14,903 | $ | 16,797 | $ | 30,250 |
|
| $ | 31,395 |
|
| $ | 25,775 |
|
| $ | 24,534 |
|
| $ | 27,268 |
| ||||||||||
Total debt | $ | 9,011 | $ | 11,791 | $ | 11,382 | $ | 6,506 | $ | 7,978 | $ | 10,608 |
|
| $ | 11,627 |
|
| $ | 9,337 |
|
| $ | 8,973 |
|
| $ | 11,749 |
| ||||||||||
FFO (4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Reconciliation of net earnings (loss) to FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net earnings (loss) attributable to common shares | $ | 315 | $ | (81) | $ | (188) | $ | (1,296) | $ | (3) | |||||||||||||||||||||||||||||
Net earnings (loss) attributable to common stockholders | $ | 1,203 |
|
| $ | 863 |
|
| $ | 622 |
|
| $ | 315 |
|
| $ | (81 | ) | ||||||||||||||||||||
Total NAREIT defined adjustments | 504 | 633 | 660 | 368 | 260 |
| 534 |
|
|
| 461 |
|
|
| 299 |
|
|
| 504 |
|
|
| 633 |
| |||||||||||||||
Total our defined adjustments | 36 | - | (60) | (46) | (71) |
| (35 | ) |
|
| (15 | ) |
|
| (33 | ) |
|
| 36 |
|
|
| - |
| |||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
FFO, as defined by Prologis | $ | 855 | $ | 552 | $ | 412 | $ | (974) | $ | 186 | |||||||||||||||||||||||||||||
FFO, as modified by Prologis (4) | $ | 1,702 |
|
| $ | 1,309 |
|
| $ | 888 |
|
| $ | 855 |
|
| $ | 552 |
| ||||||||||||||||||||
Total core defined adjustments | (42) | 262 | 182 | 1,255 | 159 |
| (302 | ) |
|
| (128 | ) |
|
| 65 |
|
|
| (42 | ) |
|
| 262 |
| |||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
Core FFO (4) | $ | 813 | $ | 814 | $ | 594 | $ | 281 | $ | 345 | $ | 1,400 |
|
| $ | 1,181 |
|
| $ | 953 |
|
| $ | 813 |
|
| $ | 814 |
|
(1) | In |
(2) | Net earnings (loss) per share attributable to common unitholders for the |
(3) | In 2014, the accounting standard changed for classifying and reporting discontinued operations and as such, none of our dispositions in 2016, 2015 or 2014 met the qualifications to |
(4) | FFO; FFO, as modified by Prologis and Core FFO are non-GAAP |
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with ourthe Consolidated Financial Statements included in Item 88. Financial Statements and Supplementary Data of this report and the matters described under Item 1A. Risk Factors.
Management’s OverviewMANAGEMENT’S OVERVIEW
We believe the scalequality and qualityscale of our global operating platform,portfolio, the skillsexpertise of our team and the strength of our balance sheet will providegive us with unique competitive advantages going forward. We have a straightforwardadvantages. Our plan for growth thatto grow revenues, earnings, NOI, cash flows and funds from operations is based on the following three key elements:following:
22
into increased future earnings, NOI and cash flow, both on a consolidated basis and through the amounts we recognize from our unconsolidated co-investment ventures based on our ownership. This is reflected in the positive rent change on rollovers (when comparing the net effective rent of the new lease to the prior lease for the same space) on our owned and managed operating portfolio |
|
|
We believe these three strategies will enable us to generate growth in revenue, earnings, net operating income, Core FFO and dividends for our shareholders in the coming years.
Since the Merger, we were focused on the following priorities (“The Ten Quarter Plan”), which we completed June 30, 2013:
|
|
We have reduced our exposure to foreign currency exchange fluctuations by borrowing in local currencies where appropriate, utilizing derivative contracts to hedge our foreign denominated equity, as well as through holding assets outside the United States primarily in our co-investment ventures. As of December 31, 2013, we increased our share of net equity denominated in U.S. dollars to 77% from 45% at the time of the Merger. We expect our percentage of U.S. dollar denominated net equity to increase further in 2014.
|
|
|
|
Summary of 2013
We formed two new ventures and announced the formation of two additional ventures:
Value Creation from Development. We believe a successful development and redevelopment program involves maintaining control of well-positioned land. On the basis of our current estimates, our owned and managed land bank has the potential to support the development of $8.4 billion of TEI of logistics space. We believe the carrying value of our land bank is below its current fair value, and we expect to realize this value going forward primarily through development. During 2016, in our owned and managed portfolio, we stabilized development projects with a TEI of $2.5 billion. Post stabilization, we estimate the value of these buildings to be 25.5% above their book value or the cost to develop (defined as estimated margin and calculated using estimated yield and capitalization rates from our underwriting models). In early 2013, we launched the initial public offering for NPR. NPRaddition, these properties will servegenerate an increase in NOI as the long-term investment vehicle for our stabilized properties in Japan. On February 14, 2013, NPR was listed on the Tokyo Stock Exchangethey are leased up and commenced trading. At that time, NPR acquired a portfolio of 12 properties from us for an aggregate purchase price of ¥173 billion ($1.9 billion). During 2013, NPR completed two follow on equity offerings and used the proceeds to buy properties from us at appraised value.become occupied.
On March 19, 2013,Economies of Scale from Growth in Assets Under Management. Over the last several years, we closed onhave invested in a euro denominated co-investment venture, Prologis European Logistics Partners Sàrlvariety of technologies that have allowed us to achieve efficiencies and increase our investments in real estate with minimal increases to general and administrative (“PELP”). PELP is structured as a 50/50 joint venture with Norges Bank Investment Management (“NBIM”G&A”) expenses. We have increased our owned and has an initial term of 15 years, which may be extended for an additional 15-year period. At closing, the venture acquired a portfolio of 195 properties from us for an aggregate purchase price of €2.3 billion ($3.0 billion). PELP acquired additional properties from us during 2013.
In November, we extended the relationship with our partner in China and formed Prologis China Logistics Venture 2. The venture is expected to build, acquire and manage properties in China. The venture has potential investment capacity of over $1 billion, including $588 million of committed equity of which $88 million is our share.
We announced the formation of Prologis U.S. Logistics Venture (“USLV”) with NBIM in December. We closed on the venture in January 2014 with a contribution of 66 operating properties aggregating 12.8managed real estate assets by 85 million square feet for an aggregate purchase price $1.0 billion. These properties were acquired by us(or approximately 16%) over the last two years primarily through acquisitions and integrated the assets with only minimal increases in Juneoverhead related to property management and August through the acquisitionleasing functions. We will continue to leverage these technologies in order to further streamline our operations and reduce our costs as a percentage of our partners’ interests in two previous co-investment ventures (Prologis Institutional Alliance Fund II (“Fund II”) and Prologis North American Industrial Fund III (“NAIF III”), which are described below). We own 55% of the equity and the venture will be consolidated for accounting purposes dueassets under management, along with advanced data analysis to the structure and voting rights of the venture.enhance decision making.
We concluded four ventures (one in Japan, two in the United States and one in Mexico):Summary of 2016
In connection with the wind down of Prologis Japan Fund I in June 2013, we purchased 14 properties from the venture and the venture sold the remaining six properties to NPR.
In June 2013, we acquired our partners’ interest in Fund II, a consolidated co-investment venture. Based on the venture’s cumulative returns to the investors, we earned a promote payment of approximately $18.8 million from the venture. The third party investors’ portion of the promote payment was $13.5 million, which is reflected as a component of noncontrolling interest in the Consolidated Statements of Operations in Item 8. The assets and liabilities associated with this venture were wholly owned at December 31, 2013, and were subsequently contributed to USLV in January 2014.
On August 6, 2013, NAIF III sold 73 properties to a third party for $427.5 million and we acquired our partners 80% interest in the venture, which included 18 properties. All debt of the venture was paid in full at closing. As a result of these combined transactions, we recorded a net gain of $39.5 million. The assets and liabilities associated with this venture were wholly owned at December 31, 2013, and were subsequently contributed to USLV in January 2014.
On October 2, 2013, we acquired our partner’s 78.4% interest in Prologis SGP Mexico (“SGP Mexico”) and began consolidating its operating properties with an estimated total fair value of $409.5 million.
During the year ended December 31, 2016, operating fundamentals remained strong for our owned and includingmanaged portfolio and we ended the initial formationyear with occupancy of 97.1%. See below for details of the two new ventures discussed above, we contributed a total of 235operating and development properties to fiveactivity of our unconsolidated co-investment venturesOwned and generated net proceeds and net gains of $6.2 billion and $416.0 million, respectively. In addition,Managed Portfolio. During 2016, we contributed a total of 19 properties acquired from third partiescompleted the following activities as further described in the footnotes to three of our co-investment ventures and generated net proceeds and net gains of $337.4 million and $139.2 million, respectively.the Consolidated Financial Statements:
We generated net proceeds of $785.6$3.0 billion from the contribution and disposition of real estate assets. We recorded net gains of $354 million from the dispositions of land and 89 operating buildings to third parties, primarily in the U.S., and recognized a net gain of $125.4 million.$267 million from property contributions, principally in Europe and Japan.
In addition to the transactions discussed above, we invested a total of $505.7We earned promotes from PEP II, PTELF and USLV aggregating $96 million, of new commitments (with cashwhich $89 million was recorded in StrategicCapital Revenues, and $7 million was recorded in Net Earnings Attributable to Noncontrolling Interests.
We generated proceeds of $611 million and recorded gains of $136 million through contributions)the redemption of our investments in ourcertain unconsolidated co-investment ventures, which includes increasing our investment in three ventures:ventures.
We amended our global senior credit facility (the “Global Facility”) and increased the total borrowing capacity to $3.0 billion and extended the maturity until April 2020. This facility, along with our Japanese yen revolver, increased our ownership interest in Prologis European Properties Fund II to 32.5%.
We increased our ownership interest in Prologis Targeted Europe Logistics Fund to 43.1%.
We increased our ownership interest in Prologis Targeted U.S. Logistics Fund to 25.9%.
In April, we issued 35.65 million shares of common stock in a public offering at a price of $41.60 per share, generating approximately $1.4 billion in net proceeds (“Equity Offering”).
In April, we redeemed $482.5 million of our preferred stock.
We had a significant amount of capital markets activity in 2013. As a result and in combination with our significant contribution and disposition activity, along with the Equity Offering, we decreased our total debt to $9.0borrowing capacity, which was $3.3 billion at December 31, 2013, from $11.82016.
We entered into an ¥120.0 billion ($1.0 billion at December 31, 2012. We extended2016) unsecured yen senior term loan agreement (the “Yen Term Loan”) and repaid our maturitiesexisting yen term loans. See Liquidity and lowered our borrowing costs by issuing several seriesCapital Resources section below for details of new debt and repurchasing existing higher coupon debt. Details of debt activity are as follows:this transaction.
We issued senior notes during 2013 as follows (dollarsIn January 2017, we sold our investment in thousands):
Principal Amount | Effective Interest Rate | Maturity Date | ||||||||||
Senior Note Issuance Date: | ||||||||||||
August 15, 2013 | $ | 850,000 | 4.25 | % | August 15, 2023 | |||||||
August 15, 2013 | $ | 400,000 | 2.75 | % | February 15, 2019 | |||||||
November 1, 2013 | $ | 500,000 | 3.35 | % | February 1, 2021 | |||||||
December 3, 2013 | € | 700,000 | 3.00 | % | January 18, 2022 |
We used the proceeds of the newly issued debtELV to buy back debt of $1.5 billion through tender offers or private transactions, which resultedour fund partner and ELV contributed its properties to PTELF in a loss on early extinguishment of $180.7 million.
We repaid $1.6 billion of outstanding secured mortgage debt (with an average borrowing cost of 2.4%) with the proceeds from the contribution of properties, primarily to PELP and NPR, and we transferred $548.0 million of outstanding mortgage debt in connection with contributions. In addition, we used proceeds generated from property dispositions and the Equity Offering to repay $564.5 million in senior notes and $483.6 million in exchangeable senior notes. As a result of our repayment of debt, we recorded a loss on early extinguishment of $96.3 million.
All of this activity decreased our borrowing costs to 4.2% at December 31, 2013, from 4.4% at December 31, 2012, and increased the remaining maturity from 43 months to 58 monthsexchange for the same period. Also, the issuance of the euro denominated debt and derivative contracts increased the percentage of our total equity denominated in U.S. dollar to 77%.
We commenced construction of 68 development projects on an owned and managed basis, aggregating 23 million square feet with a total expected investment of $1.8 billion (our share was $1.5 billion), including 27 projects (42% of our share of the total expected investment) that were 100% leased prior to the start of development. These projects had an estimated weighted average yield at stabilization of 7.6% and an estimated development margin of 19.1%. We used $445.3 million of land we already owned for these projects. We expect these developments to be completed by June 2015 or earlier.
We leased a total of 151.9 million square feet in our owned and managed portfolio and incurred average turnover costs (tenant improvements and leasing costs) of $1.42 per square foot. At December 31, 2013, our owned and managed operating portfolio was 95.1% occupied and 95.1% leased as compared to 94.0% occupied and 94.5% leased at December 31, 2012.
Our rent change on roll over was positive in each quarter in 2013 for our owned and managed portfolio, ranging from 2% to 6%. Rent change in our portfolio is continuing its upward trend and we expect to continue to see increases in our rents on rollover. During 2013, we retained 82.6% of customers whose leases were expiring.
Operational Outlook
The recovery of the logistics real estate market further strengthened and broadened globally during 2013. Operating fundamentals continued to improve and we believe this trend will continue as the leading indicators of industrial real estate are strong. Global trade is expected to grow 4.9% in 2014 and 5.4% in 2015 (a). Based on our own internal surveys, space utilization in our facilities continues to trend higher, which means our customers are short on capacity to handle their current needs and their future growth.
Market conditions in the U.S. are very favorable and an ongoing supply and demand imbalance exists (b). The industrial market absorbed 233 million square feet in 2013, the highest level since 2005 (b). By contrast, development completions amounted to only 67 million square feet resulting in a demand imbalance of 166 million square feet, the highest on record (b). These conditions have driven U.S. market vacancy to a new record low of 7.2% (b). As customer demand remains active and supply pipelines are below historical norm, we expect vacancy to continue to decline and rental rates to continue to increase in 2014.
Operating conditions in our Latin American markets are positive and have outperformed uneven macroeconomic growth in 2013. In Mexico, demand has continued to recover and the market occupancy rate across the six largest logistics markets (Mexico City, Monterrey,
Guadalajara, Juarez, Reynosa and Tijuana) was 91.6% at the end of 2013, up 100 basis points from the prior year, based on internally generated data. In Brazil, despite a slowing economy, we believe it is an underserved logistics market and there is strong demand for modern logistics facilities as companies serve the growing consumer market.
In Europe, we believe we have seen the end of recessionary conditions in most countries. Customer sentiment continues to improve and broaden, which is translating into meaningful demand. Evidence for this includes pan-European market occupancy of 91.3%, higher than the level achieved in 2007 (c). The occupancy rate rose 1.0% in 2013 and we expect further gains in 2014. Economic momentum turned positive in 2013 and brighter macroeconomic prospects appear to be generating demand for logistics facilities, in our view. Our research indicates new starts for speculative development are near historic low levels. We expect net effective rents to continue to increase and the recovery to broaden to more of our markets. We believe high occupancy and rent growth, combined with declining capitalization rates will lead to a strong recovery in European industrial real estate values.
Expansionary market conditions are evident in our Asian markets. The availability of Class-A distribution space remains highly constrained and net effective rents are rising. In Japan, vacancy rates remain below 3% (a), and there is upward pressure on rents, especially in Tokyo and Osaka, as these markets have absorbed new deliveries. Increasing development costs, driven by higher land and construction pricing, are expected to keep new supply in balance. Demand in China is accelerating and we see new requirements from retailers and e-commerce customers. Low vacancy conditions continue to lead to outsized rental rate growth, in our view. Land availability has been constrained but appears to be improving. Barriers to supply continue to drive rents ahead of inflation, and we believe that we are well positioned with our development platform to meet this accelerating demand.
We believe elevated occupancy rates across our markets, coupled with the still-gradual pickup in new construction starts, are leading to notable increases in replacement-cost rents and effective rents. We expect to use our strategic land positions to support increased development activity in this environment. Our development business comprises speculative development, build-to-suit development, value-added conversions and redevelopment. We will develop directly and within our co-investment ventures, depending on location, market conditions, submarkets or building sites and availability of capital.interests.
ResultsWe evaluate our business operations based on the NOI of Operations
our two business reporting segments, Real Estate Operations Segment
The rental income and rental expense we recognizeStrategic Capital. NOI by segment is a non-GAAP financial measure that is calculated using revenues and expenses directly impactedfrom our financial statements. We consider NOI by our consolidated operating portfolio. As mentioned earlier, we have had significant real estate activity during the last several years that has impacted the sizesegment to be an appropriate supplemental measure of our portfolio. In addition, the operating fundamentals in our markets have been improving, which has impactedperformance because it helps both the occupancy and rental rates we have experienced, as well as fueling development activity. Also included in this segment is revenue from land we own and lease to customers under ground leases and development management and other income, offsetinvestors to understand the core operations of our business.
Below is a reconciliation of our NOI by acquisition, disposition and land holding costs. The results of properties soldsegment to third parties have been reclassified to Discontinued Operations for all periods presented. Net operating income fromOperating Income per the Real Estate Operations segmentConsolidated Financial Statements for the years ended December 31 was as follows (dollars(in millions). Each segment’s NOI is reconciled to a line item in thousands):the Consolidated Financial Statements in the respective segment discussion below.
23
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Real Estate Operations segment – NOI |
| $ | 1,655 |
|
| $ | 1,376 |
|
| $ | 1,087 |
|
Strategic Capital segment – NOI |
|
| 166 |
|
|
| 102 |
|
|
| 104 |
|
General and administrative expenses |
|
| (222 | ) |
|
| (217 | ) |
|
| (229 | ) |
Depreciation and amortization expenses |
|
| (931 | ) |
|
| (881 | ) |
|
| (642 | ) |
Operating income |
| $ | 668 |
|
| $ | 380 |
|
| $ | 320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Note 18 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each reportable business segment’s NOI to Operating Income and Earnings Before Income Taxes.
2013 | 2012 | 2011 | ||||||||||
Rental and other income | $ | 1,239,496 | $ | 1,469,419 | $ | 1,026,825 | ||||||
Rental recoveries | 331,518 | 364,320 | 257,327 | |||||||||
Rental and other expenses | (478,920) | (517,795) | (372,719) | |||||||||
|
| |||||||||||
Net operating income - Real Estate Operations segment | $ | 1,092,094 | $ | 1,315,944 | $ | 911,433 | ||||||
|
| |||||||||||
Operating margin | 69.5% | 71.8% | 71.0% | |||||||||
Average occupancy | 93.6% | 92.6% | 89.9% |
Detail of our consolidated operating properties as of December 31, was as follows (square feet in thousands):
2013 | 2012 | 2011 | ||||||||||
Number of properties | 1,610 | 1,853 | 1,797 | |||||||||
Square Feet | 267,097 | 316,347 | 291,051 | |||||||||
Occupied % | 94.9% | 93.7% | 91.4% |
Below are the key drivers that have influenced the net operating income (“NOI”) of this segment:
We contributed a significant amount of properties into our unconsolidated co-investment ventures during 2013. We generally used the proceeds from these contributions to repay debt and to fund future growth. As a result of the contributions of properties we made in 2013, our NOI decreased $299.4 million in 2013 from 2012. The net change in NOI from 2011 to 2012 related to contributions of properties during these periods was not significant. Since we have an ongoing ownership interest in these
|
We completed the Merger and PEPR Acquisition during 2011 and as a result, NOI increased $216.1 million in 2012 from 2011 ($293.6 million in rental income and $77.5 million in rental expense).
Occupancy of the operating properties has continued to increase. In our Real Estate Operations
This operating segment we leased a total of 87.6 million square feet and incurred average turnover costs of $1.71 per square foot. This compares to 2012, when we leased 92.4 million square feet with turnover costs of $1.41 per square feet. The increase in turnover costs is due to the longer term and higher value on the leases signed, resulting in higher leasing commissions.
We calculate the change in effectiveprincipally includes rental rates on leases signed during the quarter as compared to the previous rent on that same space. Rental rate change on rollover (in our total owned and managed operating portfolio) was negative for all periods in 2012 and 2011. Rental change on rollover was positive in all four quarters of 2013 and has continued to increase. Generally we believe that market rents are continuing to increase and the majority of leases that are rolling were put in place at the low end of the cycle. In addition, many of our leases have rent increases throughout the lease term that are based on the consumer price index and are therefore not included in rent leveling and increase therevenues, rental revenue we recognize.
We rationalized and acquired properties or a controlling interest in several of our unconsolidated co-investment ventures:
2013 — aggregated total portfolio of $1.1 billion and 16.3 million square feet; and
2012 — aggregated total portfolio of $2.3 billion and 46.3 million square feet.
We have also increased the size of our portfolio through acquisition activity and development activity. After the development properties are stabilized, we may contribute them to co-investment ventures or we may continue to hold and operate within our consolidated portfolio depending on various factors, including geography and market conditions. We expect to continue to increase our consolidated portfolio through both acquisition and development activity in the future.
Under the terms of our lease agreements, we are able to recover the majority of our rental expenses from customers. Rental expense recoveries included in both rental income and rental expenses were 73.4%, 74.2% and 73.8% of total rental expenses for the years ended December 31, 2013, 2012 and 2011, respectively.
Investment Management Segment
The net operating incomerecognized from the Investment Management segment, representing fees and incentives earned for services performed reduced by Investment Management expenses (direct costs of managing these entities and the properties they own), for the years ended December 31 was as follows (dollars in thousands):
2013 | 2012 | 2011 | ||||||||||
Net operating income — Investment Management Segment: | ||||||||||||
Americas: | ||||||||||||
Asset management and other fees | $ | 52,030 | $ | 55,448 | $ | 60,240 | ||||||
Leasing commissions, acquisition and other transaction fees | 14,078 | 13,974 | 16,632 | |||||||||
Incentive returns | 6,366 | - | - | |||||||||
Investment management expenses | (53,689) | (37,785) | (34,228) | |||||||||
|
| |||||||||||
Subtotal Americas | 18,785 | 31,637 | 42,644 | |||||||||
Europe: | ||||||||||||
Asset management and other fees | 53,190 | 32,951 | 34,934 | |||||||||
Leasing commissions, acquisition and other transaction fees | 10,604 | 4,096 | 11,153 | |||||||||
Investment management expenses | (22,531) | (15,348) | (15,379) | |||||||||
|
| |||||||||||
Subtotal Europe | 41,263 | 21,699 | 30,708 | |||||||||
Asia: | ||||||||||||
Asset management and other fees | 29,861 | 19,026 | 14,585 | |||||||||
Leasing commissions, acquisition and other transaction fees | 13,343 | 1,284 | 75 | |||||||||
Investment management expenses | (13,059) | (10,687) | (5,355) | |||||||||
|
| |||||||||||
Subtotal Asia | 30,145 | 9,623 | 9,305 | |||||||||
|
| |||||||||||
Net operating income — Investment Management segment | $ | 90,193 | $ | 62,959 | $ | 82,657 | ||||||
|
| |||||||||||
Operating Margin | 50.3% | 49.7% | 60.1% |
We had the following unconsolidated co-investment ventures under management as of December 31 (square feet and gross book value in thousands):
2013 | 2012 | 2011 | ||||||||||
Americas: | ||||||||||||
Number of ventures | 4 | 6 | 10 | |||||||||
Square feet | 108,537 | 127,455 | 190,541 | |||||||||
Gross book value | $ | 8,252,983 | $ | 9,190,638 | $ | 12,966,744 | ||||||
Europe: | ||||||||||||
Number of ventures | 4 | 3 | 3 | |||||||||
Square feet | 132,876 | 70,294 | 67,088 | |||||||||
Gross book value | $ | 11,880,603 | $ | 6,670,689 | $ | 6,261,114 | ||||||
Asia: | ||||||||||||
Number of ventures | 2 | 2 | 2 | |||||||||
Square feet | 22,880 | 11,004 | 10,123 | |||||||||
Gross book value | $ | 3,697,179 | $ | 1,764,608 | $ | 2,039,881 | ||||||
Total: | ||||||||||||
Number of ventures | 10 | 11 | 15 | |||||||||
Square feet | 264,293 | 208,753 | 267,752 | |||||||||
Gross book value | $ | 23,830,765 | $ | 17,625,935 | $ | 21,267,739 |
Investment management income fluctuates due to the number and size of co-investment ventures that are under management. As noted earlier, we have formed some new ventures and we have acquired the controlling interest in several co-investment ventures, which results in us owning the properties and reporting them in our consolidated results. In addition, the Merger resulted in the addition of several ventures during 2011.
The direct costs associated with our Investment Management segment totaled $89.3 million, $63.8 million, and $55.0 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are included in the line item Investment Management Expenses in the Consolidated Statements of Operations in Item 8. These expenses include the direct expenses associated with the asset management of the unconsolidated co-investment ventures provided by our employees who are assigned to our Investment Management segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by a team of professionals who are assigned to our Real Estate Operations segment. These individuals perform the property-level management of the properties in our owned and managed portfolio including properties we consolidate and the properties we manage that are owned by the unconsolidated entities.properties. We allocate the costs of our property management functionfunctions to the propertiesReal Estate Operations segment through Rental Expenses and the Strategic Capital segment through Strategic Capital Expenses based on the size of the relative portfolios as compared to our total owned and managed portfolio. The operating fundamentals in the markets in which we consolidate (reportedoperate continue to improve, which has positively affected both the rental rates and occupancy and also has fueled development activity.
Below are the components of Real Estate Operations revenues, expenses and NOI for the years ended December 31 (in millions), derived directly from line items inRental Expenses) the Consolidated Financial Statements.
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Rental revenues |
| $ | 1,735 |
|
| $ | 1,536 |
|
| $ | 1,179 |
|
Rental recoveries |
|
| 486 |
|
|
| 437 |
|
|
| 349 |
|
Development management and other revenues |
|
| 17 |
|
|
| 14 |
|
|
| 13 |
|
Rental expenses |
|
| (569 | ) |
|
| (544 | ) |
|
| (430 | ) |
Other expenses |
|
| (14 | ) |
|
| (67 | ) |
|
| (24 | ) |
Real Estate Operations – NOI |
| $ | 1,655 |
|
| $ | 1,376 |
|
| $ | 1,087 |
|
Real Estate Operations revenues, expenses and NOI are impacted by capital deployment activities, occupancy and changes in rental rates. The following items highlight the key changes in NOI for the years ended December 31 (in millions):
|
| Change in |
| |||||
|
| 2016 from 2015 |
|
| 2015 from 2014 |
| ||
Acquisitions (1) |
| $ | 194 |
|
| $ | 279 |
|
Rent rate and occupancy growth (2) |
|
| 89 |
|
|
| 76 |
|
Development activity (3) |
|
| 39 |
|
|
| 17 |
|
Contributions and dispositions |
|
| (91 | ) |
|
| (98 | ) |
Other (4) |
|
| 48 |
|
|
| 15 |
|
Total change in Real Estate Operations – NOI |
| $ | 279 |
|
| $ | 289 |
|
(1) | The impact from acquisitions in 2016 from 2015 was primarily due to the acquisition of the real estate assets and operating platform of KTR Capital Partners and its affiliates (“KTR”) in May 2015, which generated an additional $152 million of net revenues, including a decrease of $25 million acquisition costs in 2016. |
The impact from acquisitions in 2015 from 2014 included the KTR transaction in 2015 and the consolidation of NAIF in 2014. KTR included an additional $176 million of net revenues, which was slightly offset by $25 million in acquisition costs.
In the fourth quarter of 2014, we consolidated our co-investment venture NAIF, which increased NOI $153 million in 2015 from 2014.
Approximately 45% and 34% of KTR and NAIF activity, respectively, is offset in Net Earnings Attributable to Noncontrolling Interests attributable to our venture partner’s share. See Note 3 in the Consolidated Financial Statements for further detail on the KTR transaction and NAIF consolidation.
(2) | Rent rate growth is a combination of the turnover of existing leases and increases in rental rates from contractual rent increases on existing leases. If a lease has a contractual rent increase that is not known at the time the lease is signed, such as the consumer price index or a similar metric, the rent increase is not included in rent leveling and therefore, would impact the rental revenues we recognize. We have experienced an increase in rental rates on turnover of existing leases every quarter beginning in 2013 that has resulted in higher average rental rates in our portfolio and increased rental revenues and NOI as those leases commenced. |
(3) | We have had a steady increase in properties that have been completed and leased from 2014 to 2016. |
24
Below are key operating metrics of our consolidated operating portfolio for the years ended December 31:
Strategic Capital
This operating segment includes revenues from asset management and other fees as well as promotes earned for services performed for our unconsolidated co-investment ventures. Revenues associated with the Strategic Capital segment fluctuate because of the size of co-investment ventures under management, the transactional activity in the ventures and the timing of promotes. These revenues are reduced generally by the direct costs associated with the asset management and property-level management for the properties owned by these ventures. We allocate the unconsolidated entities (included inInvestment Management Expenses), by using the square feet owned by the respective portfolios. The increase inInvestment Management Expenses in 2013 was duecosts of our property management functions to the addition of PELP Strategic Capital segment through Strategic Capital Expenses and NPR and additional expense related to the incentive returns we recognized in 2013, offset somewhat byReal Estate Operations segment through Rental Expenses based on the conclusion of several ventures. The increase inInvestment Management Expenses in 2012 was due to the increased investment management platform and infrastructure that was part of the Merger, offset partially with a decline due to the consolidation of PEPR in June 2011 and the acquisition of three of our co-investment ventures in 2012; Prologis North American Industrial Fund II, Prologis California and Prologis North American Fund 1 (collectively the “2012 Co-Investment Venture Acquisitions”).
We expect the net operating income of this segment to increase in 2014 due to NPR and PELP and the increased size of the existingrelative portfolios as compared to our total owned and managed portfolio.
Below are the components of Strategic Capital revenues, expenses and NOI for the years ended December 31, derived directly from the line items in the Consolidated Financial Statements (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Strategic capital revenues |
| $ | 295 |
|
| $ | 210 |
|
| $ | 220 |
|
Strategic capital expenses |
|
| (129 | ) |
|
| (108 | ) |
|
| (116 | ) |
Strategic Capital – NOI |
| $ | 166 |
|
| $ | 102 |
|
| $ | 104 |
|
Below is additional detail of our Strategic Capital revenues, expenses and NOI for the years ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
U.S. (1): |
|
|
|
|
|
|
|
|
|
|
|
|
Asset management and other fees |
| $ | 33 |
|
| $ | 31 |
|
| $ | 41 |
|
Leasing commissions, acquisition and other transaction fees |
|
| 6 |
|
|
| 8 |
|
|
| 12 |
|
Promotes (2) |
|
| - |
|
|
| - |
|
|
| 31 |
|
Strategic capital expenses (3) |
|
| (41 | ) |
|
| (41 | ) |
|
| (46 | ) |
Subtotal U.S. |
|
| (2 | ) |
|
| (2 | ) |
|
| 38 |
|
Other Americas (4): |
|
|
|
|
|
|
|
|
|
|
|
|
Asset management and other fees |
|
| 21 |
|
|
| 20 |
|
|
| 11 |
|
Leasing commissions, acquisition and other transaction fees |
|
| 2 |
|
|
| 2 |
|
|
| - |
|
Strategic capital expenses |
|
| (10 | ) |
|
| (9 | ) |
|
| (9 | ) |
Subtotal Other Americas |
|
| 13 |
|
|
| 13 |
|
|
| 2 |
|
Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
Asset management and other fees |
|
| 84 |
|
|
| 71 |
|
|
| 71 |
|
Leasing commissions, acquisition and other transaction fees |
|
| 13 |
|
|
| 12 |
|
|
| 16 |
|
Promotes (2) |
|
| 89 |
|
|
| 30 |
|
|
| - |
|
Strategic capital expenses |
|
| (43 | ) |
|
| (27 | ) |
|
| (30 | ) |
Subtotal Europe |
|
| 143 |
|
|
| 86 |
|
|
| 57 |
|
Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
Asset management and other fees |
|
| 38 |
|
|
| 32 |
|
|
| 32 |
|
Leasing commissions, acquisition and other transaction fees |
|
| 9 |
|
|
| 4 |
|
|
| 6 |
|
Strategic capital expenses |
|
| (35 | ) |
|
| (31 | ) |
|
| (31 | ) |
Subtotal Asia |
|
| 12 |
|
|
| 5 |
|
|
| 7 |
|
Strategic Capital – NOI |
| $ | 166 |
|
| $ | 102 |
|
| $ | 104 |
|
25
(1) | In 2014, we acquired a controlling interest in our co-investment venture NAIF. See Notes 3 and 4 to the Consolidated Financial Statements for additional information on this venture. |
(2) | The promotes represent the third parties’ share based on the venture’s cumulative returns to the investors over the last three years. Approximately 40% of promote revenues are paid as a combination of cash and stock awards pursuant to the terms of the Prologis Promote Plan and expensed through Strategic Capital Expenses. |
(3) | This includes compensation and personnel costs for employees who are located in the U.S. but also support other regions. |
(4) | In 2014, we formed the co-investment venture FIBRA Prologis. See Note 4 to the Consolidated Financial Statements for additional information on this venture. |
The following real estate investments were held through our unconsolidated co-investment ventures through acquisitions from usat December 31 (dollars and third parties, as well as increased incentive returns.square feet in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
Number of properties owned |
|
| 369 |
|
|
| 391 |
|
|
| 392 |
|
Square feet |
|
| 50 |
|
|
| 50 |
|
|
| 50 |
|
Total assets |
| $ | 4,238 |
|
| $ | 4,408 |
|
| $ | 4,403 |
|
Other Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
Number of properties owned |
|
| 213 |
|
|
| 205 |
|
|
| 198 |
|
Square feet |
|
| 42 |
|
|
| 39 |
|
|
| 37 |
|
Total assets |
| $ | 2,793 |
|
| $ | 2,482 |
|
| $ | 2,653 |
|
Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
Number of properties owned |
|
| 700 |
|
|
| 688 |
|
|
| 636 |
|
Square feet |
|
| 163 |
|
|
| 159 |
|
|
| 148 |
|
Total assets |
| $ | 10,853 |
|
| $ | 11,343 |
|
| $ | 11,440 |
|
Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
Number of properties owned |
|
| 85 |
|
|
| 66 |
|
|
| 52 |
|
Square feet |
|
| 36 |
|
|
| 29 |
|
|
| 26 |
|
Total assets |
| $ | 5,173 |
|
| $ | 4,320 |
|
| $ | 4,120 |
|
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 9 |
|
|
| 9 |
|
|
| 9 |
|
Number of properties owned |
|
| 1,367 |
|
|
| 1,350 |
|
|
| 1,278 |
|
Square feet |
|
| 291 |
|
|
| 277 |
|
|
| 261 |
|
Total assets |
| $ | 23,057 |
|
| $ | 22,553 |
|
| $ | 22,616 |
|
See Note 5 to the Consolidated Financial Statements in Item 8 for additional information on our unconsolidated entities.co-investment ventures.
Other Components of Income
General and Administrative (“G&A”)&A Expenses
G&A expenses increased $5 million for the yearsyear ended December 31, consisted of2016, compared to the following (in thousands):
2013 | 2012 | 2011 | ||||||||||
Gross overhead | $ | 434,933 | $ | 394,845 | $ | 332,632 | ||||||
Less: rental expenses | (32,918) | (35,954) | (24,741) | |||||||||
Less: investment management expenses | (89,278) | (63,820) | (54,962) | |||||||||
Capitalized amounts | (83,530) | (67,003) | (57,768) | |||||||||
|
| |||||||||||
G&A expenses | $ | 229,207 | $ | 228,068 | $ | 195,161 |
The increasesame time period in 2015, primarily due to increased compensation, including equity-based compensation awards. G&A expenses decreased $12 million for the year ended December 31, 2015, compared to the same time period in 2014, primarily due to fluctuations in foreign currency exchange rates between the U.S. dollar and the various components from 2012 to 2013 was principally due to increased infrastructure to accommodate our growing business. In 2013, the gross book value for our ownedBritish pound sterling, euro and managed portfolio increased $1.4 billion to $45.5 billion at December 31, 2013. As discussed above, we allocate a portion of our G&A expenses that relate to property management functions to our Real Estate Operations segment and our Investment Management segment.Japanese yen.
The increase in G&A expenses and the various components from 2011 to 2012 was due principally to the larger infrastructure associated with the combined company following the Merger and the PEPR Acquisition.
We capitalize certain costs directly related to our development and leasing activities. Capitalized G&A expenses included salaries and related costs, as well as other general and administrativeG&A costs. The following table summarizes capitalized G&A costsamounts for the years ended December 31 were as follows (in thousands)millions):
| 2016 |
|
| 2015 |
|
| 2014 |
| ||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Development activities | $ | 64,113 | $ | 42,417 | $ | 34,301 | ||||||||||||||||||
Building and land development activities |
| $ | 61 |
|
| $ | 63 |
|
| $ | 56 |
| ||||||||||||
Leasing activities | 18,301 | 23,183 | 21,390 |
|
| 24 |
|
|
| 21 |
|
|
| 18 |
| |||||||||
Costs related to internally developed software | 1,116 | 1,403 | 2,077 | |||||||||||||||||||||
|
| |||||||||||||||||||||||
Operating building improvements and other |
|
| 16 |
|
|
| 16 |
|
|
| 13 |
| ||||||||||||
Total capitalized G&A expenses | $ | 83,530 | $ | 67,003 | $ | 57,768 |
| $ | 101 |
|
| $ | 100 |
|
| $ | 87 |
| ||||||
Capitalized salaries and related costs as a percent of total salaries and related costs |
|
| 26.0 | % |
|
| 27.6 | % |
|
| 23.9 | % |
For the years ended December 31, 2013, 2012 and 2011, the capitalized salaries and related costs represented 23.7%, 20.3%, and 20.0%, respectively, of our total salaries and related costs. Salaries and related costs are comprised primarily of wages, other compensation and employee-related expenses.26
Our development activity has increased over the last three years and therefore our capitalized costs have increased. We began consolidated development projects with a total expected investment of $1.4 billion, $1.3 billion (nearly half of which was started in the fourth quarter) and $0.8 billion during 2013, 2012, and 2011 respectively.
Depreciation and Amortization
Depreciation and Amortization Expenses
The following table highlights the key changes in depreciation and amortization was $648.7 million, $724.3 million and $542.4 millionexpenses for the years ended December 31 2013, 2012(in millions):
|
| Change in |
| |||||
|
| 2016 from 2015 |
|
| 2015 from 2014 |
| ||
Acquisition of properties (1) |
| $ | 65 |
|
| $ | 269 |
|
Development properties placed into service |
|
| 22 |
|
|
| 12 |
|
Disposition and contribution of properties |
|
| (45 | ) |
|
| (56 | ) |
Other |
|
| 9 |
|
|
| 13 |
|
Total change in depreciation and amortization expenses |
| $ | 51 |
|
| $ | 238 |
|
(1) | The increase in 2015 from 2014 included the KTR transaction and the consolidation of NAIF. |
Our Owned and 2011, respectively. The decrease from 2012Managed Properties
We manage our business on an owned and managed basis, which includes properties wholly owned by us or owned by one of our co-investment ventures. We review our operating fundamentals on an owned and managed basis. We believe reviewing these fundamentals this way allows management to 2013 is primarily dueunderstand the entire impact to less depreciationthe financial statements, as a result of contributions of properties, offset slightly by additional depreciationit will affect both the Real Estate Operations and amortization from completed and leased development properties and increased leasing activity. The increase from 2011 to 2012 is due to additional depreciation and amortization expenses associated with the assets (including intangible assets) acquired in the Merger and PEPR Acquisition during the second quarter of 2011 and the 2012 Co-Investment Venture Acquisitions,Strategic Capital segments, as well as completed and leased development properties and additional leasing and capital improvements in our operating properties.
Merger, Acquisition and Other Integration Expenses
We incurred significant transaction, integration and transitional costs related to the Merger and PEPR Acquisition during 2011 and 2012. See Note 14 to the Consolidated Financial Statements in Item 8 for more detail on these expenses.
Impairment of Real Estate Properties
During 2012 and 2011, we recognized impairment charges of real estate properties in continuing operations of $252.9 million and $21.2 million, respectively, due to our change of intent to no longer hold these assets for long-term investment. In 2012, these impairment charges related to our planned contribution of properties to PELP ($135.3 million), land parcels that we expected to sell to third parties ($88.9 million) and operating buildings we expected to contribute or sell ($28.7 million). See Notes 2 and 15 to the Consolidated Financial Statements in Item 8 for more detail on the process we took to value these assets and the related impairment charges recognized.
Earnings from Unconsolidated Entities, Net
We recognized net earnings from unconsolidated entities of $97.2 million, $31.7 million and $59.9 million for the years ended December 31, 2013, 2012 and 2011, respectively. The earnings we recognize are impacted by: (i) variances in revenuesfrom our unconsolidated co-investment ventures based on our ownership share. We do not control the unconsolidated co-investment ventures for purposes of GAAP and expensesthe presentation of the entity; (ii) the size and occupancy rate of the portfolio of properties owned by the entity; (iii) our ownership interest in the entity; and (iv) fluctuations in foreign currency exchange rates usedventures’ operating information does not represent a legal claim to translate our share of net earnings to U.S. dollars, if applicable. We manage the majority of the properties in which we have an ownership interest as part of our total owned and managed portfolio. We have had significant changes in the co-investment ventures in which we have an ownership interest that has impacted the earnings we recognized. See discussion of our co-investment ventures above in the Investment Management segment discussion and in Note 5 to the Consolidated Financial Statements in Item 8 for further breakdown of our share of net earnings recognized.
Interest Expense
Interest expense from continuing operations included the following components (in thousands) for the years ended December 31:such items.
2013 | 2012 | 2011 | ||||||||||
Gross interest expense | $ | 471,923 | $ | 578,518 | $ | 498,518 | ||||||
Amortization of discount (premium), net | (39,015) | (36,687) | 228 | |||||||||
Amortization of deferred loan costs | 14,374 | 16,781 | 20,476 | |||||||||
|
|
|
|
|
| |||||||
Interest expense before capitalization | 447,282 | 558,612 | 519,222 | |||||||||
Capitalized amounts | (67,955) | (53,397) | (52,651) | |||||||||
|
|
|
|
|
| |||||||
Net interest expense | $ | 379,327 | $ | 505,215 | $ | 466,571 |
Gross interest expense decreased in 2013 compared to 2012 due to lower debt levels. In 2013, we decreased our debt by $2.8 billion to $9.0 billion at December 31, 2013.
Gross interest expense increased in 2012 compared to 2011 due to higher debt levels as a result of the Merger, the PEPR Acquisition and the 2012 Co-Investment Venture Acquisitions, offset slightly by lower effective borrowing costs.
Our weighted average effective interest rate was 4.7%, 4.6% and 5.6% for the years ended December 31, 2013, 2012 and 2011, respectively. During 2012 and 2013, we issued new debt with lower borrowing costs and used the proceeds to pay down or buy back our higher cost debt resulting in a weighted average effective interest rate of 4.2% as of December 31, 2013.
Our future interest expense, both gross interest and the portion capitalized, will vary depending on, among other things, our effective borrowing rate and the level of our development activities.
See Note 9 to the Consolidated Financial Statements in Item 8 and Liquidity and Capital Resources for further discussion of our debt and borrowing costs.
Gains on Acquisitions and Dispositions of Investments in Real Estate, Net
In 2013, we recognized net gains on acquisitions and dispositions of investments in real estate in continuing operations of $597.7 million, primarily related to contributions of operating properties to our unconsolidated entities. We received proceeds of $6.7 billion from the contribution of 254 properties aggregating 71.5 million square feet.
In 2012, we recognized net gains on acquisitions and dispositions of investments in real estate in continuing operations of $305.6 million, which included $294.2 million of gains related to three 2012 co-investment ventures we acquired. The contributions of operating properties to our unconsolidated entities in 2012 resulted in cash proceeds of $381.9 million and net gains of $11.4 million.
During 2011, we recognized net gains on acquisitions and dispositions of investments in real estate in continuing operations of $111.7 million. This included gains recognized in the second quarter related to the PEPR Acquisition ($85.9 million) and the acquisition of our partner’s interest in one of our other unconsolidated ventures in Japan ($13.5 million). The contributions of operating properties to our unconsolidated entities in 2011 resulted in cash proceeds of $590.8 million and net gains of $12.3 million.
If we realize a gain on contribution of a property to an unconsolidated entity, we recognize the portion attributable to the third party ownership in the entity. If we realize a loss on contribution, we recognize the full amount as soon as it is known. Due to our continuing involvement through our ownership in the unconsolidated entity, these dispositions are not included in discontinued operations.
Foreign Currency and Derivative Gains (Losses), Net
We and certain of our foreign consolidated subsidiaries may have intercompany or third party debt that is not denominated in the entity’s functional currency. When the debt is remeasured against the functional currency of the entity, a gain or loss may result. To mitigate our foreign currency exchange exposure, we borrow in the functional currency of the borrowing entity when appropriate. Certain of our third party and intercompany debt is remeasured with the resulting adjustment recognized as a cumulative translation adjustment inForeign Currency Translation Loss, Net in the Consolidated Statements of Comprehensive Income (Loss). This treatment is applicable to third party debt that is designated as a hedge of our net investment and intercompany debt that is deemed to be long-term in nature.
If the intercompany debt is deemed short-term in nature, when the debt is remeasured, we recognize a gain or loss in earnings. We recognized net foreign currency exchange gains of $9.2 million and $7.4 million in 2013 and 2012, respectively, and losses of $5.9 million in 2011, related to the settlement and remeasurement of debt. Predominantly the gains or losses recognized in earnings relate to the remeasurement of intercompany loans between the United States parent and certain consolidated subsidiaries in Japan and Europe and result from fluctuations in the exchange rates of U.S. dollar to the euro, Japanese yen and British pound sterling. In addition, we recognized net foreign currency exchange losses of $0.6 million and $5.6 million, and gains of $2.1 million from the settlement of transactions with third parties in 2013, 2012 and 2011, respectively.
We recognized unrealized losses of $42.2 million (which included an adjustment to the amortization of a discount associated with a derivative instrument in the fourth quarter of 2013) and $22.3 million in 2013 and 2012, respectively, and an unrealized gain of $45.0 million in 2011 on the derivative instrument (exchange feature) related to our exchangeable senior notes, which became exchangeable at the time of the Merger.
Gains (Losses) on Early Extinguishment of Debt, Net
During the years ended December 31, 2013, 2012 and 2011, we purchased portions of several series of senior notes, senior exchangeable notes and extinguished some secured mortgage debt prior to maturity, which resulted in the recognition of losses of $277.0 million and $14.1 million in 2013 and 2012, respectively, and gains of $0.3 million in 2011. The gains or losses represent the difference between the recorded debt (net of premiums and discounts and including related debt issuance costs) and the consideration we paid to retire the debt, including fees. Included in this amount in 2012 are losses that were included inOther Comprehensive Income (Loss) in the Consolidated Statements of Comprehensive Income (Loss) in Item 8 related to hedge transactions and were deemed unrecoverable in the fourth quarter of 2012. These hedges were associated with debt that was repaid before maturity with the proceeds from the contributions to PELP in early 2013. See Note 9 to the Consolidated Financial Statements in Item 8 for more information regarding our debt repurchases.
Impairment of Other Assets
We recorded impairment charges in 2011 of $126.4 million on certain of our investments in and advances to unconsolidated entities, notes receivable and other assets, as we believed the decline in fair value to be other than temporary or we did not believe these amounts to be recoverable based on the present value of the estimated future cash flows associated with these assets, including estimated sales proceeds.
See Notes 2 and 15 to the Consolidated Financial Statements in Item 8 for further information on our process with regard to analyzing the recoverability of other assets.
Income Tax Benefit (Expense)
During the years ended December 31, 2013, 2012 and 2011, our current income tax expense was $126.2 million, $17.9 million and $21.6 million. We recognize current income tax expense for income taxes incurred by our taxable REIT subsidiaries and in certain foreign jurisdictions, as well as certain state taxes. We also include in current income tax expense the interest associated with our liability for uncertain tax positions. Our current income tax expense fluctuates from period to period based primarily on the timing of our taxable income and changes in tax and interest rates. The majority of the current income tax expense in 2013 relates to asset sales and contributions of certain properties that were held in foreign entities or taxable REIT subsidiaries.
In 2013, 2012 and 2011, we recognized a net deferred tax benefit of $19.4 million, $14.3 million and $19.8 million, respectively. Deferred income tax expense is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets in taxable subsidiaries operating in the United States or in foreign jurisdictions.
Our income taxes are discussed in more detail in Note 16 to the Consolidated Financial Statements in Item 8.
Discontinued Operations
Earnings from discontinued operations were $123.5 million, $75.9 million and $117.0 million for 2013, 2012 and 2011, respectively. Discontinued operations represent the results of operations of properties that have been sold to third parties or that are held for sale for all periods presented, along with the related gain or loss on sale. The results of operations that have been classified as discontinued operations are reported separately in the Consolidated Financial Statements in Item 8.
See Notes 4 and 8 to the Consolidated Financial Statements in Item 8 for further details on what is reported as discontinued operations.
Other Comprehensive Income (Loss) – Foreign Currency Translation Losses, Net
For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate their financial statements into U.S. dollars at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect as of the balance sheet date. The resulting translation adjustments, due to the fluctuations in exchange rates from the beginning of the period to the end of the period, are included inForeign Currency Translation Losses, Net in the Consolidated Statements of Comprehensive Income (Loss) in Item 8.
During 2013, we recorded unrealized losses of $234.7 million related to foreign currency translations of our foreign subsidiaries into U.S. dollars upon consolidation. This included approximately $190 million of foreign currency translation losses on the properties contributed to PELP and NPR due to the weakening of the euro and Japanese yen, respectively, to the U.S. dollar from December 31, 2012, through the date of the contributions. In addition we recorded net unrealized losses in 2013 due to the weakening of the Japanese yen to the U.S. dollar. During 2012, we recorded unrealized net losses of $79.0 million as the Japanese yen weakened relative to the U.S. dollar by 10.1% from December 31, 2011 to December 31, 2012, offset slightly by the euro and British pound sterling slightly strengthening against the U.S. dollar during the same period. During 2011, we recorded unrealized net losses of $192.6 million as the euro and British pound sterling remained relatively flat from December 31, 2010 to December 31, 2011, but both weakened relative to the U.S. dollar from the Merger and PEPR Acquisition date to December 31, 2011. These losses were offset slightly by the strengthening of the Japanese yen relative to the U.S. dollar during 2011.
Our total owned and managed portfolio includes operating industrial properties and does not include properties under development or properties held for sale to third parties and was as follows as ofat December 31 (square feet in thousands)millions):
2013 | 2012 | 2011 | 2016 |
|
| 2015 |
|
| 2014 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Number of Properties | Square Feet | Number of Properties | Square Feet | Number of Properties | Square Feet | Number of Properties |
|
| Square Feet |
|
| Percentage Occupied |
|
| Number of Properties |
|
| Square Feet |
|
| Percentage Occupied |
|
| Number of Properties |
|
| Square Feet |
|
| Percentage Occupied |
| ||||||||||||||||||||||||||||
Consolidated | 1,610 | 267,097 | 1,853 | 316,347 | 1,797 | 291,051 |
| 1,777 |
|
|
| 332 |
|
|
| 97.0 | % |
|
| 1,872 |
|
|
| 334 |
|
|
| 97.1 | % |
|
| 1,605 |
|
|
| 282 |
|
|
| 96.4 | % | ||||||||||||||||||
Unconsolidated | 1,323 | 264,293 | 1,163 | 208,753 | 1,403 | 267,752 |
| 1,359 |
|
|
| 290 |
|
|
| 97.2 | % |
|
| 1,331 |
|
|
| 273 |
|
|
| 96.7 | % |
|
| 1,248 |
|
|
| 255 |
|
|
| 95.9 | % | ||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Totals | 2,933 | 531,390 | 3,016 | 525,100 | 3,200 | 558,803 |
| 3,136 |
|
|
| 622 |
|
|
| 97.1 | % |
|
| 3,203 |
|
|
| 607 |
|
|
| 96.9 | % |
|
| 2,853 |
|
|
| 537 |
|
|
| 96.1 | % |
Operating Activity
Below is information summarizing the leasing activity of our owned and managed operating portfolio for the years ended December 31:
(1) | We retained at least 80% of our customers, based on the total square feet of leases signed, for each year during the three-year period ended December 31, 2016. |
(2) | Turnover costs represent the obligations incurred in connection with the signing of a lease, including leasing commissions and tenant improvements. |
27
We capitalize costs incurred in developing, renovating, rehabilitating and improving our properties as part of the investment basis. The following table summarizes our capital expenditures on previously leased buildings within our owned and managed portfolio for the years ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Property improvements |
| $ | 165 |
|
| $ | 143 |
|
| $ | 140 |
|
Tenant improvements |
|
| 120 |
|
|
| 127 |
|
|
| 117 |
|
Leasing commissions |
|
| 117 |
|
|
| 108 |
|
|
| 89 |
|
Total turnover costs |
|
| 237 |
|
|
| 235 |
|
|
| 206 |
|
Total capital expenditures |
| $ | 402 |
|
| $ | 378 |
|
| $ | 346 |
|
Our proportionate share of capital expenditures based on ownership (1) |
| $ | 261 |
|
| $ | 257 |
|
| $ | 245 |
|
(1) | We calculated our proportionate share of capital expenditures by applying our ownership percentage of each co-investment venture on an entity-by-entity basis to the capital expenditures each period. |
Development Start Activity
The following table summarizes development starts for the years ended December 31 (dollars and square feet in millions):
|
| 2016 (1) |
|
| 2015 |
|
| 2014 |
| |||
Number of new development projects during the period |
|
| 102 |
|
|
| 96 |
|
|
| 76 |
|
Square feet |
|
| 30 |
|
|
| 28 |
|
|
| 26 |
|
TEI |
| $ | 2,181 |
|
| $ | 2,247 |
|
| $ | 2,034 |
|
Our proportionate share of TEI (2) |
| $ | 1,809 |
|
| $ | 1,815 |
|
| $ | 1,792 |
|
Percentage of build-to-suits based on TEI |
|
| 35.6 | % |
|
| 43.6 | % |
|
| 32.6 | % |
(1) | We expect all of our properties under development at December 31, 2016, to be completed before July 2018. |
(2) | We calculate our proportionate share of TEI by applying our ownership percentage of each co-investment venture on an entity-by-entity basis to the TEI of each period. |
Development Stabilization Activity
The following table summarizes development stabilization activity for the years ended December 31 (dollars and square feet in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Number of development projects stabilized during the period |
|
| 98 |
|
|
| 81 |
|
|
| 47 |
|
Square feet |
|
| 32 |
|
|
| 26 |
|
|
| 17 |
|
TEI |
| $ | 2,510 |
|
| $ | 1,848 |
|
| $ | 1,105 |
|
Our proportionate share of TEI (1) |
| $ | 2,155 |
|
| $ | 1,640 |
|
| $ | 955 |
|
Weighted average expected yield on TEI (2) |
|
| 6.9 | % |
|
| 7.4 | % |
|
| 7.7 | % |
Estimated value at completion |
| $ | 3,150 |
|
| $ | 2,434 |
|
| $ | 1,360 |
|
Our proportionate share of estimated value at completion (1) |
| $ | 2,726 |
|
| $ | 2,173 |
|
| $ | 1,191 |
|
Estimated weighted average margin |
|
| 25.5 | % |
|
| 31.8 | % |
|
| 23.0 | % |
(1) | We calculate our proportionate share of TEI and estimated value by applying our ownership percentage of each co-investment venture on an entity-by-entity basis to the TEI of each period. |
(2) | We calculate the weighted average expected yield on TEI as estimated NOI assuming stabilized occupancy divided by TEI. |
For information on our development portfolio at December 31, 2016, see Item 2. Properties.
Same Store Analysis
We evaluate the operating performance of the 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 properties from our consolidatedowned and managed portfolio and properties owned by the co-investment ventures (accounted for on the equity method) that are managed by us (referred to as “unconsolidated entities”) in our same store analysis. We have defined the same store portfolio, for the three months ended December 31, 2013,2016, as those properties that were in operation at January 1, 2012,2015, and have been in operation throughout the same three-month periods in both 20132016 and 2012.2015 (including development properties that have been completed and available for lease). We have removed all properties that were disposed of to a third party or were classified as held for sale to a third party from the population for both periods. We believe the factors that impactaffect rental income,revenues, rental expenses and net operating incomeNOI in the same store portfolio are generally the same as for the total operating portfolio. In order toTo derive an appropriate
28
measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the currentrecent period end exchange rate to translate from local currency into the U.S. dollars,dollar, for both periods. The
Same store is a commonly used measure in the real estate industry. Our same store portfolio, formeasures are non-GAAP financial measures that are calculated beginning with rental revenues, rental recoveries and rental expenses from the three months ended December 31, 2013, included 489.8 millionfinancial statements prepared in accordance with GAAP. As our same store measures are non-GAAP financial measures, they have certain limitations as analytical tools and may vary among real estate companies. As a result, we provide a reconciliation from our financial statements prepared in accordance with GAAP to same store property NOI with explanations of aggregated square feet.how these metrics are calculated.
The following is a reconciliation of our consolidated rental income,revenues, rental recoveries, rental expenses and net operating income (calculated as rental income and recoveries less rental expenses)property NOI for the full year, as included in the Consolidated Statements of Operations in Item 8,Income and within Note 20 to the Consolidated Financial Statements, to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in thousands).millions):
Three Months Ended | ||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Full Year | ||||||||||||||||
|
| |||||||||||||||||||
2013 | ||||||||||||||||||||
Rental income and rental recoveries | $ | 444,144 | $ | 363,956 | $ | 372,185 | $ | 379,208 | $ | 1,559,493 | ||||||||||
Rental expenses | 130,354 | 109,837 | 106,811 | 104,936 | 451,938 | |||||||||||||||
|
| |||||||||||||||||||
Net operating income | $ | 313,790 | $ | 254,119 | $ | 265,374 | $ | 274,272 | $ | 1,107,555 | ||||||||||
|
| |||||||||||||||||||
2012 | ||||||||||||||||||||
Rental income and rental recoveries | $ | 433,984 | $ | 459,290 | $ | 460,213 | $ | 470,294 | $ | 1,823,781 | ||||||||||
Rental expenses | 115,674 | 123,248 | 124,401 | 127,916 | 491,239 | |||||||||||||||
|
| |||||||||||||||||||
Net operating income | $ | 318,310 | $ | 336,042 | $ | 335,812 | $ | 342,378 | $ | 1,332,542 |
Rental Income (1)(2) Consolidated: Rental income per the Consolidated Statements of Operations Rental recoveries per the Consolidated Statements of Operations Adjustments to derive same store results: Rental income and recoveries of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Rental income Same store portfolio – rental income (2)(3) Rental Expenses (1)(4) Consolidated: Rental expenses per the Consolidated Statements of Operations Adjustments to derive same store results: Rental expenses of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Rental expenses Adjusted same store portfolio – rental expenses (3)(4) Net Operating Income (1) Consolidated: Net operating income per the Consolidated Statements of Operations Adjustments to derive same store results: Net operating income of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Net operating income Adjusted same store portfolio – net operating income (3) For the Three Months Ended December 31, 2013 2012 Percentage
Change $ 301,627 $ 378,184 77,581 92,110 (29,856) (22,691) (1,275) (4,215) 409,482 308,012 $ 757,559 $ 751,400 0.8% $ 104,936 $ 127,916 (8,866) (6,521) 4,777 516 95,997 83,644 $ 196,844 $ 205,555 (4.2)% $ 274,272 $ 342,378 (20,990) (16,170) (6,052) (4,731) 313,485 224,368 $ 560,715 $ 545,845 2.7%
|
| Three Months Ended |
|
|
|
|
| |||||||||||||
|
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
|
| Full Year |
| |||||
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 437 |
|
| $ | 426 |
|
| $ | 436 |
|
| $ | 436 |
|
| $ | 1,735 |
|
Rental recoveries |
|
| 117 |
|
|
| 120 |
|
|
| 125 |
|
|
| 124 |
|
|
| 486 |
|
Rental expenses |
|
| (147 | ) |
|
| (141 | ) |
|
| (140 | ) |
|
| (141 | ) |
|
| (569 | ) |
Property NOI |
| $ | 407 |
|
| $ | 405 |
|
| $ | 421 |
|
| $ | 419 |
|
| $ | 1,652 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 325 |
|
| $ | 358 |
|
| $ | 418 |
|
| $ | 435 |
|
| $ | 1,536 |
|
Rental recoveries |
|
| 94 |
|
|
| 104 |
|
|
| 115 |
|
|
| 124 |
|
|
| 437 |
|
Rental expenses |
|
| (127 | ) |
|
| (126 | ) |
|
| (140 | ) |
|
| (151 | ) |
|
| (544 | ) |
Property NOI |
| $ | 292 |
|
| $ | 336 |
|
| $ | 393 |
|
| $ | 408 |
|
| $ | 1,429 |
|
|
| Three Months Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| Percentage Change |
| |||
Rental Revenues (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues (per the quarterly information table above) |
| $ | 436 |
|
| $ | 435 |
|
|
|
|
|
Rental recoveries (per the quarterly information table above) |
|
| 124 |
|
|
| 124 |
|
|
|
|
|
Consolidated adjustments to derive same store results: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues and recoveries of properties not in the same store portfolio – properties developed, acquired and sold to third parties during the period and land subject to ground leases |
|
| (168 | ) |
|
| (177 | ) |
|
|
|
|
Effect of changes in foreign currency exchange rates and other |
|
| (1 | ) |
|
| - |
|
|
|
|
|
Unconsolidated co-investment ventures – rental revenues |
|
| 436 |
|
|
| 423 |
|
|
|
|
|
Same store portfolio – rental revenues (2) |
| $ | 827 |
|
| $ | 805 |
|
|
| 2.7 | % |
Rental Expenses (1) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental expenses (per the quarterly information table above) |
| $ | 141 |
|
| $ | 151 |
|
|
|
|
|
Consolidated adjustments to derive same store results: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental expenses of properties not in the same store portfolio – properties developed, acquired and sold to third parties during the period and land subject to ground leases |
|
| (46 | ) |
|
| (52 | ) |
|
|
|
|
Effect of changes in foreign currency exchange rates and other |
|
| 14 |
|
|
| 7 |
|
|
|
|
|
Unconsolidated co-investment ventures – rental expenses |
|
| 99 |
|
|
| 97 |
|
|
|
|
|
Same store portfolio – rental expenses (3) |
| $ | 208 |
|
| $ | 203 |
|
|
| 2.5 | % |
NOI (1) |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI (per the quarterly information table above) |
| $ | 419 |
|
| $ | 408 |
|
|
|
|
|
Consolidated adjustments to derive same store results: |
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI of properties not in the same store portfolio – properties developed, acquired and sold to third parties during the period and land subject to ground leases |
|
| (122 | ) |
|
| (125 | ) |
|
|
|
|
Effect of changes in foreign currency exchange rates and other |
|
| (15 | ) |
|
| (7 | ) |
|
|
|
|
Unconsolidated co-investment ventures – property NOI |
|
| 337 |
|
|
| 326 |
|
|
|
|
|
Same store portfolio – NOI |
| $ | 619 |
|
| $ | 602 |
|
|
| 2.8 | % |
29
basis |
(2) | We exclude the net termination and renegotiation fees from our same store rental |
(3) |
Rental expenses |
consolidation, |
Other Components of Income (Expense)
Earnings from Unconsolidated Entities, Net
We recognized net earnings from unconsolidated entities that are accounted for using the equity method of $206 million, $159 million and $134 million for the years ended December 31, 2016, 2015 and 2014, respectively. The earnings we recognize can be impacted by: (i) variances in revenues and expenses of each venture; (ii) the size and occupancy rate of the portfolio of properties owned by each venture; (iii) gains or losses from the dispositions of properties; (iv) our ownership interest in each venture; and (v) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars.
See the discussion of our co-investment ventures above in the Strategic Capital segment discussion and in Note 5 to the Consolidated Financial Statements for a further breakdown of our share of net earnings recognized.
Interest Expense
The following table details our net interest expense for the year ended December 31 (dollars in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Gross interest expense |
| $ | 383 |
|
| $ | 394 |
|
| $ | 378 |
|
Amortization of premium, net and debt issuance costs |
|
| (15 | ) |
|
| (32 | ) |
|
| (8 | ) |
Capitalized amounts |
|
| (65 | ) |
|
| (61 | ) |
|
| (61 | ) |
Net interest expense |
| $ | 303 |
|
| $ | 301 |
|
| $ | 309 |
|
Weighted average effective interest rate |
|
| 3.3 | % |
|
| 3.3 | % |
|
| 4.2 | % |
Gross interest expense decreased in 2016, compared with 2015, principally from lower outstanding debt balances and borrowing costs during the periods. Our debt decreased by $1.0 billion from December 31, 2015, to December 31, 2016, primarily from the repayment of the senior term loan related to the KTR transaction with proceeds from contributions and dispositions. Gross interest expense increased in 2015, compared with 2014, due to higher debt driven by the KTR transaction, offset somewhat by a decrease in interest rates and fluctuations in foreign currency exchange rates. See Note 9 to the Consolidated Financial Statements for a further breakdown of gross interest expense, amortization and capitalized amounts included in net interest expense. See also the Liquidity and Capital Resources section for further discussion of our debt and borrowing costs.
Gains on Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Net
Over the last three years, we have contributed properties, generally that we had developed, to our co-investment ventures in Europe, Japan and Mexico, as included in the table below. We recognize a gain to the extent of the third party ownership in the venture acquiring the property. In 2014, our contribution activity included the properties that we contributed to FIBRA Prologis upon its formation.
In addition, we have sold properties to third parties, generally from our operating portfolio in the U.S. These dispositions have supported our strategic objective of owning a portfolio of high-quality properties in the most active centers of commerce.
We utilize the proceeds from both contributions and dispositions to fund our capital investments.
30
The following table details our gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net for the year ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Contributions to unconsolidated co-investment ventures |
|
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
|
| 35 |
|
|
| 31 |
|
|
| 126 |
|
Net gains on contributions |
| $ | 267 |
|
| $ | 149 |
|
| $ | 188 |
|
Dispositions to third parties |
|
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
|
| 172 |
|
|
| 136 |
|
|
| 145 |
|
Net gains on dispositions |
| $ | 354 |
|
| $ | 610 |
|
| $ | 337 |
|
Total net gains on contributions and dispositions |
| $ | 621 |
|
| $ | 759 |
|
| $ | 525 |
|
Gains on redemptions of investments in co-investment ventures |
|
| 136 |
|
|
| - |
|
|
| - |
|
Gains on revaluation of equity investments upon acquisition of a controlling interest, net (1) |
|
| - |
|
|
| - |
|
|
| 201 |
|
Total gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
| $ | 757 |
|
| $ | 759 |
|
| $ | 726 |
|
(1) | In 2014, we acquired the equity units from all but one partner in our co-investment venture NAIF, resulting in the acquisition of a controlling interest. This resulted in us gaining control over NAIF and recording a gain on the revaluation of our equity investment. See Note 3 to the Consolidated Financial Statements for further information on this transaction. |
See Notes 4 and 5 to the Consolidated Financial Statements for further information on the gains we recognized.
Foreign Currency and Derivative Gains (Losses), Net
The following table details our foreign currency and derivative gains (losses), net included in earnings for the year ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Realized foreign currency and derivative gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Gains on the settlement of unhedged derivative transactions |
| $ | 3 |
|
| $ | 15 |
|
| $ | 1 |
|
Losses on the settlement of transactions with third parties |
|
| (3 | ) |
|
| (4 | ) |
|
| 2 |
|
Total realized foreign currency and derivative gains |
|
| - |
|
|
| 11 |
|
|
| 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign currency and derivative gains (losses), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Gains on the change in fair value of unhedged derivative transactions |
|
| 10 |
|
|
| 16 |
|
|
| 15 |
|
Losses on remeasurement of certain assets and liabilities (1) |
|
| (2 | ) |
|
| (20 | ) |
|
| (8 | ) |
Gains (losses) on embedded derivative, including amortization (settled March 2015) |
|
| - |
|
|
| 5 |
|
|
| (28 | ) |
Total unrealized foreign currency and derivative gains (losses), net |
|
| 8 |
|
|
| 1 |
|
|
| (21 | ) |
Total foreign currency and derivative gains (losses), net |
| $ | 8 |
|
| $ | 12 |
|
| $ | (18 | ) |
(1) | These gains or losses were primarily related to the remeasurement of assets and liabilities that are denominated in currencies other than the functional currency of the entity, such as short-term intercompany loans between the U.S. parent and certain consolidated subsidiaries, debt and tax receivables and payables. |
See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative policies and Note 16 to the Consolidated Financial Statements for more information about our derivative transactions.
Gains (Losses) on Early Extinguishment of Debt, Net
We repurchased portions of several series of senior notes, senior exchangeable notes and secured mortgage debt that resulted in the recognition of a gain of $2 million in 2016 and losses of $86 million and $165 million in 2015 and 2014, respectively. As a result of these transactions, we reduced our effective interest rate and lengthened the maturities of our debt. See Note 9 to the Consolidated Financial Statements for more information regarding our debt repurchases.
Income Tax Expense (Benefit)
We recognize current income tax expense for income taxes incurred by our taxable REIT subsidiaries, state and local income taxes and taxes incurred in the foreign jurisdictions in which we operate. Our current income tax expense fluctuates from period to period based primarily on the timing of our taxable income. Deferred income tax expense (benefit) is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets in taxable subsidiaries operating in the U.S. or in foreign jurisdictions.
31
Environmental MattersThe following table summarizes our income tax expense (benefit) for the year ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Current income tax expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
| $ | 36 |
|
| $ | 24 |
|
| $ | 16 |
|
Income tax expense on dispositions |
|
| 24 |
|
|
| - |
|
|
| 15 |
|
Income tax expense on dispositions related to acquired tax liabilities |
|
| - |
|
|
| 4 |
|
|
| 30 |
|
Total current income tax expense | �� |
| 60 |
|
|
| 28 |
|
|
| 61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
| (5 | ) |
|
| (1 | ) |
|
| (57 | ) |
Income tax benefit on dispositions related to acquired tax liabilities |
|
| - |
|
|
| (4 | ) |
|
| (30 | ) |
Total deferred income tax benefit |
|
| (5 | ) |
|
| (5 | ) |
|
| (87 | ) |
Total income tax expense (benefit) |
| $ | 55 |
|
| $ | 23 |
|
| $ | (26 | ) |
Our income taxes are discussed in more detail in Note 14 to the Consolidated Financial Statements.
Net Earnings Attributable to Noncontrolling Interests
This amount represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third party share of fees or promotes payable to us and earned during the period.
The following table summarizes net earnings attributable to noncontrolling interests for the year ended December 31 (in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Prologis North American Industrial Fund |
| $ | 23 |
|
| $ | 4 |
|
| $ | 3 |
|
Prologis U.S. Logistics Venture (1) |
|
| 18 |
|
|
| 38 |
|
|
| 7 |
|
Other consolidated entities (2) |
|
| 8 |
|
|
| 3 |
|
|
| 91 |
|
Prologis, L.P. net earnings attributable to noncontrolling interests |
|
| 49 |
|
|
| 45 |
|
|
| 101 |
|
Limited partners in Prologis, L.P. |
|
| 34 |
|
|
| 11 |
|
|
| 2 |
|
Prologis, Inc. net earnings attributable to noncontrolling interests |
| $ | 83 |
|
| $ | 56 |
|
| $ | 103 |
|
(1) | USLV completed the KTR transaction in May 2015; approximately seven months of operating activity were included in 2015, offset by third-party share of acquisition costs and an acquisition fee payable to us. |
(2) | In 2014, we recognized net earnings attributable to noncontrolling interests in Prologis Mexico Fondo Logistico of $65 million because of the FIBRA Prologis transaction, primarily related to the third-party investors’ share of the gain on disposition and the net deferred income tax benefit. |
See Note 12 to the Consolidated Financial Statements for further information on our consolidated co-investment ventures.
Other Comprehensive Loss
During 2016, 2015 and 2014, we recorded net losses in our Statement of Comprehensive Income related to foreign currency translations of our foreign subsidiaries into U.S. dollars upon consolidation. These losses were principally due to the weakening of the Brazilian real, British pound sterling, euro and Japanese yen to the U.S. dollar.
During 2016, 2015 and 2014, we also recorded unrealized losses in our Statement of Comprehensive Income, related to the change in fair value of our cash flow hedges and our share of derivatives in our unconsolidated co-investment ventures.
See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative policies and Note 16 to the Consolidated Financial Statements for more information about our derivative transactions and other comprehensive losses.
Other Matters
On June 23, 2016, the U.K. passed a referendum to leave the European Union. Our key business driver remains intact, and we have not seen, nor do we anticipate, a material operational or financial impact. Our customers in the U.K. principally serve domestic consumers and we do not expect the decision to leave the European Union will materially change the consumption habits that drive our business. At December 31, 2016, our owned and managed U.K. operating portfolio was 99.5% leased and had a weighted average lease term of nine years with only 4.6% of the leases expiring in 2017. The U.K. portfolio contributes approximately 4% of our share of annual NOI through consolidated entities and co-investment ventures.
A majority of the properties we acquired by us were subjected to environmental reviews either by us or the previous owners. While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an
32
environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
We record a liability See Note 17 in the Consolidated Financial Statements for the estimated costs of environmental remediation to be incurred in connection with certain operating properties we acquire, as well as certain land parcels we acquire in connection with the planned development of the land. The liability is established to cover the environmental remediation costs, including cleanup costs, consulting fees for studies and investigations, monitoring costs and legal costs relating to cleanup, litigation defense, and the pursuit of responsible third parties. We purchase various environmental insurance policies to mitigate our exposure tofurther information about environmental liabilities. We are not aware of any environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
Liquidity and Capital ResourcesLIQUIDITY AND CAPITAL RESOURCES
Overview
We consider our ability to generate cash from operating activities, distributions from our co-investment ventures, dispositions of properties and from available financing sources to be adequate to meet our anticipated future development, acquisition, operating, debt service, dividend and distribution requirements.
Near-Term Principal Cash Sources and Uses
In addition to dividends to the common and preferred stockholders of Prologis and distributions to the holders of limited partnership units of the Operating Partnership and our partners in the consolidated co-investment ventures, we expect our primary cash needs will consist of the following:
repaymentcompletion of debt including payments onthe development and leasing of the properties in our credit facilitiesconsolidated development portfolio (at December 31, 2016, 89 properties in our development portfolio were 59.8% leased with a current investment of $1.4 billion and scheduled principal payments in 2014a TEI of $330 million, which does not include a $536 million senior term loan that was extended in January 2014 until 2015;$2.4 billion when completed and leased, leaving $1.0 billion remaining to be spent);
|
development of new properties for long-term investment, including the acquisition of land in certain markets;
capital expenditures and leasing costs on properties in our operating portfolio;
repayment of debt and scheduled principal payments of $622 million in 2017;
additional investments in current unconsolidated entities or new investments in future unconsolidated entities;co-investment ventures;
depending on market and other conditions, acquisition of operating properties and/or portfolios of operating properties in global or regional markets(depending on market and other conditions) for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our co-investment ventures); and
dependingrepurchase of our outstanding debt or equity securities (depending on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors, we may repurchase our outstanding debt or equity securitiesfactors) through cash purchases, in open marketopen-market purchases, privately negotiated transactions, tender offers or otherwise.
We expect to fund our cash needs principally from the following sources all subject(subject to market conditions:conditions):
available unrestricted cash balances ($491.1807 million at December 31, 2013)2016);
property operations;
fees and incentives earned for services performed on behalf of the co-investment ventures, and including promotes;
distributions received from the co-investment ventures;
proceeds from the disposition of properties, land parcels or other investments to third parties;
proceeds from the contributions of properties to current or future co-investment ventures, including the contribution of 66 operating properties we made to USLV in January 2014;ventures;
proceeds from the sale of a portion of our investments in co-investment ventures;
borrowing capacity under our current credit facility arrangements discussed below ($1.7 billion available as of December 31, 2013),in the following section, other facilities or borrowing arrangements;arrangements ($3.2 billion available at December 31, 2016); and
proceeds from the issuance of debt.
We may also generate proceeds from the issuance of equity securities, including throughsubject to market conditions.
33
The following table summarizes information about our debt at December 31 (dollars in millions):
|
| 2016 |
|
| 2015 |
| ||
Debt outstanding |
| $ | 10,608 |
|
| $ | 11,627 |
|
Weighted average interest rate |
|
| 3.2 | % |
|
| 3.2 | % |
Weighted average maturity in months |
| 60 |
|
| 67 |
|
In the first quarter of 2016, we repaid the $400 million remaining balance on the senior term loan that was used to fund the KTR transaction with proceeds generated from the contributions of development properties to our co-investment ventures and proceeds generated from the disposition of certain nonstrategic properties to third parties.
In March 2016, we entered into an at-the-market offering program (we haveunsecured term loan agreement under which we could draw in Japanese yen in an equity distribution agreementaggregate amount not to exceed ¥11.2 billion that allows uswas scheduled to sellmature in March 2017. In the first quarter of 2016, we borrowed ¥11.2 billion ($100 million) on this term loan.
In April 2016, we amended the Global Facility and increased our aggregate borrowing capacity to $3.0 billion
In August 2016, we entered into the Yen Term Loan under which we can draw in Japanese yen in an aggregate amount not to exceed ¥120.0 billion ($1.0 billion at December 31, 2016) bearing interest at yen LIBOR plus 0.65%, of which ¥50.0 billion ($427 million at December 31, 2016) matures in August 2022 and ¥70.0 billion ($598 million at December 31, 2016) matures in August 2023. We may increase the borrowings up to $750 million aggregate gross sales proceeds of shares of common stock through two designated agents, who earn a fee of up to 2% of the gross proceeds, as agreed to on a transaction-by-transaction basis). We have not issued any shares of common stock under this program; and
proceeds from the issuance of debt securities, including secured mortgage debt.
Debt
As of¥200.0 billion ($1.7 billion at December 31, 2013,2016), subject to obtaining additional lender commitments. In the third quarter of 2016, we had $9.0 billion of debt with a weighted average interest rate of 4.2% and a weighted average maturity of 58 months. During 2013, we decreased our debt $2.8 billion, reduced our borrowing costs and lengthenedborrowed on the maturities (was $11.8 billion, 4.4% and 43 months, respectively, as of December 31, 2012) principally with the proceeds from the contribution and the sale of properties and the Equity Offering. We also issued $2.7 billion of senior notes during 2013Yen Term Loan and used the proceeds to repay $1.7 billion of senior notesthe previously outstanding Japanese yen term loans entered into in 2014, 2015 and balances on our credit facilities.
As of2016. The Yen Term Loan was fully drawn at December 31, 2013,2016.
At December 31, 2016, we had credit facilities with an aggregate borrowing capacity of $2.5$3.3 billion, of which $1.7$3.2 billion was available remaining capacity.for borrowing.
As of
At December 31, 2013,2016, our credit ratings were A3 from Moody’s and A- from S&P, both with stable outlook. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
At December 31, 2016, we were in compliance with all of our debt covenants. These covenants include customary financial covenants for total debt, ratios, encumbered debt ratios and fixed charge coverage ratios.
See Note 9 to the Consolidated Financial Statements in Item 8 for further informationdiscussion on our debt.
Equity Commitments Related to Certain Co-Investment Ventures
Certain co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The venture may obtain financingSee the Cash Flow Summary below for the properties and therefore the equity commitment may be less than the acquisition price of the real estate. Depending on market conditions, themore information about our investment objectives of the ventures,activity in our liquidity needs and other factors, we may make contributions of properties to these ventures through the remaining commitment period and we may make additional cash investments in theseco-investment ventures.
The following table is a summary of remaining equity commitments as of December 31, 2013 (in millions):
Equity commitments | Expiration date for remaining | |||||||||||||
Prologis | Venture Partners | Total | ||||||||||||
Prologis Targeted U.S. Logistics Fund | $ | - | $ | 294.8 | $ | 294.8 | Various | |||||||
Prologis Targeted Europe Logistics Fund | 136.0 | 183.4 | 319.4 | June 2015 | ||||||||||
Prologis European Properties Fund II | 12.0 | 154.9 | 166.9 | September 2015 | ||||||||||
Europe Logistics Venture 1 | 25.7 | 145.8 | 171.5 | December 2014 | ||||||||||
Prologis European Logistics Partners | 255.7 | 255.7 | 511.4 | February 2016 | ||||||||||
Prologis China Logistics Venture 1 | 61.7 | 349.6 | 411.3 | March 2015 | ||||||||||
Prologis China Logistics Venture 2 | 88.2 | 500.0 | 588.2 | November 2017 | ||||||||||
|
| |||||||||||||
Total Unconsolidated | $ | 579.3 | $ | 1,884.2 | $ | 2,463.5 | ||||||||
Brazil Fund (1) | $ | 56.9 | $ | 56.9 | $ | 113.8 | December 2017 | |||||||
|
| |||||||||||||
Total Consolidated | $ | 56.9 | $ | 56.9 | $ | 113.8 | ||||||||
|
| |||||||||||||
Grand Total | $ | 636.2 | $ | 1,941.1 | $ | 2,577.3 |
For more information on equity commitments for our unconsolidated co-investment ventures, see Note 5 to the Consolidated Financial Statements in Item 8.Statements.
Cash Provided by Operating ActivitiesFlow Summary
Net
The following table summarizes our cash provided by operating activities was $485.0 million, $463.5 million and $207.1 millionflow activity for the years ended December 31 2013, 2012(in millions):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Net cash provided by operating activities |
| $ | 1,417 |
|
| $ | 1,116 |
|
| $ | 894 |
|
Net cash provided by (used in) investing activities |
| $ | 1,252 |
|
| $ | (4,789 | ) |
| $ | (665 | ) |
Net cash provided by (used in) financing activities |
| $ | (2,125 | ) |
| $ | 3,596 |
|
| $ | (351 | ) |
Cash Provided by Operating Activities
Cash provided by operating activities, exclusive of changes in receivables and 2011,payables, is impacted by the following significant activity:
Real estate operations. We receive the majority of our operating cash through net revenues of our Real Estate Operations segment. See our Results of Operations section above for further explanation of our Real Estate Operations segment. The revenues from this segment include noncash adjustments for straight-lined rent and amortization of above and below market leases of $94 million, $60 million and $14 million for 2016, 2015 and 2014, respectively. In 2013, 2012
Strategic capital.We also generate operating cash through our Strategic Capital segment by providing management services to our unconsolidated co-investment ventures, including promotes. See our Strategic Capital Results of Operations section above for the key drivers of our strategic capital revenues and 2011,expenses. Included in the cash provided by operating activities for 2016 is $30 million of cash received from promotes, which represented the third-party share and was less thanaccrued as strategic capital revenues for the cash dividends paid on common and preferred stock by $88.9year ended December 31, 2015.
34
G&A expenses. We incurred $222 million, $104.3$217 million and $207.0$229 million of G&A costs in 2016, 2015 and 2014, respectively.
Distributions from unconsolidated entities.In 2016, we adopted an accounting standard update that clarifies the classification methodology within the statement of cash flows for distributions received from equity method investments. We used a portionelected the nature of thedistributions approach, in which cash proceedsflows generated from the dispositionoperations of real estate properties ($5.4 billion in 2013, $2.0 billion in 2012an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and $1.6 billion in 2011) to fund dividends on common and preferred stock not covered by cash flows that are generated from operating activities.property sales, debt refinancing or redemption of ownership interests are classified as a return of investment (cash inflow from investing activities).
Following our adoption of this standard, we recognized $287 million, $285 million and $295 million of distributions from our unconsolidated entities in Net Cash InvestingProvided by Operating Activities in 2016, 2015 and Cash Financing Activities
2014, respectively. Included in 2016 are distributions of $27 million that represented our share of promotes earned in 2015. For the years ended December 31, 2013, 20122015 and 2011, investing activities provided net cash of $2.3 billion and $529.62014, we reclassified $141 million and used net cash$177 million of $233.1 million, respectively. The following aredistributions from our unconsolidated entities into Net Cash Provided by Operating Activities that were previously reported as Net Cash Provided by (Used in) Investing Activities. See Note 2 to the significant activitiesConsolidated Financial Statements for all periods presented:more detail on this adoption.
Equity-based compensation awards.We generated cash from contributionsrecord equity-based compensation expenses in Rental Expenses in the Real Estate Operations segment, Strategic Capital Expenses in the Strategic Capital segment and dispositionsG&A expenses. The total amounts expensed were $60 million, $54 million and $57 million in 2016, 2015 and 2014, respectively.
Cash paid for interest and income taxes.We paid combined amounts for interest and income taxes of properties$352 million, $370 million and land parcels of $5.4 billion$364 million in 2013, $2.0 billion in 20122016, 2015 and 2014, respectively. See Note 9 and Note 14 to the Consolidated Financial Statements for further information on this activity.
Cash Provided by (Used in) Investing Activities
Real estate development. We invested $1.6 billion, in 2011. The increase in 2013 is primarily due to the initial contribution of real estate properties in the first quarter of 2013 to our new co-investment ventures, PELP and NPR, that generated cash proceeds of $1.3 billion and $1.9$1.1 billion
|
In 2013, 2012 during 2016, 2015 and 2011, we invested $845.2 million, $793.3 million and $811.0 million,2014, respectively, in real estate development and leasing costs for first generation leases. We have 4660 properties under development and 1129 properties that arewere completed but not stabilized as ofat December 31, 2013,2016, and we expect to continue to develop new properties as the opportunities arise.
Real estate acquisitions. In 2016, we acquired total real estate of $459 million, which included 776 acres of land and nine operating properties. In 2015, we acquired total real estate of $890 million, which included 690 acres of land and 52 operating properties, excluding the KTR transaction. In 2014, we acquired 1,040 acres of land and eight operating properties for a combined total of $612 million.
KTR transaction, net of cash received. In 2015, we acquired the real estate assets of KTR for a net cash purchase price of $4.8 billion through our consolidated co-investment venture USLV. See Note 3 to the Consolidated Financial Statements for more detail on the transaction.
Capital expenditures.We invested $228.0$268 million, $214.2$238 million and $144.1$213 million in our operating properties during 2013, 20122016, 2015 and 2011,2014, respectively, which included recurring capital expenditures, tenant improvements and leasing commissions on existing operating properties that were previously leased.
In 2013, we paid netProceeds from contributions and dispositions. We generated cash from contributions and dispositions of $678.6 millionreal estate properties of $2.8 billion, $2.8 billion and $2.3 billion in 2016, 2015 and 2014, respectively. See Note 4 to acquirethe Consolidated Financial Statements for more detail about our partners’ interest in NAIF IIIcontributions and SGP Mexico. In connection with the acquisition of NAIF II in 2012, we repaid the loan from NAIF II to our partner for a total of $336.1 million. The loan repayment was reduced by the cash acquired in the consolidation of NAIF II. Also in 2012, we paid $47.8 million in connection with the acquisition of two of our unconsolidated co-investment ventures.dispositions.
35
In 2013, we acquired 536 acres of land and 26 operating properties for a combined total of $514.6 million, which includes properties acquired in connection with the wind-down of Prologis Japan Fund I. In 2012, we acquired 1,537 acres of land and 12 operating properties for a combined total of $254.4 million. In 2011, we acquired 78 acres of land and 8 operating properties for a combined total of $214.8 million.
|
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
| Other Americas |
|
|
|
|
|
|
|
|
|
|
|
|
| Prologis Brazil Logistics Partners Fund I and related joint ventures |
| $ | 34 |
|
| $ | 57 |
|
| $ | 71 |
|
| Europe |
|
|
|
|
|
|
|
|
|
|
|
|
| Prologis European Logistics Partners Sàrl |
|
| 125 |
|
|
| 222 |
|
|
| 478 |
|
| Prologis European Properties Fund II |
|
| 6 |
|
|
| 17 |
|
|
| 53 |
|
| Prologis Targeted Europe Logistics Fund |
|
| - |
|
|
| 91 |
|
|
| 73 |
|
| Asia |
|
|
|
|
|
|
|
|
|
|
|
|
| Nippon Prologis REIT |
|
| 53 |
|
|
| - |
|
|
| 57 |
|
| Prologis China Logistics Venture |
|
| 10 |
|
|
| 56 |
|
|
| 14 |
|
| Remaining unconsolidated co-investment ventures |
|
| - |
|
|
| 3 |
|
|
| 4 |
|
| Total co-investment ventures |
|
| 228 |
|
|
| 446 |
|
|
| 750 |
|
| Other unconsolidated joint ventures |
|
| 38 |
|
|
| 28 |
|
|
| 6 |
|
| Total |
| $ | 266 |
|
| $ | 474 |
|
| $ | 756 |
|
In 2013, 2012 and 2011, we invested cash of $1.2 billion, $165.0 million and $37.8 million, respectively, in our unconsolidated entities, net of repayment of advances by the entities. Our investment in 2013 principally relates to our investment in NPR of $411.5 million, Prologis Targeted Europe Logistics Fund of $210.2 million, Prologis European Properties Fund II of $167.2 million, PELP of $162.3 million, the Brazil Fund and related joint ventures of $111.5 million and Prologis Targeted U.S. Logistics Fund of $104.8 million. See Note 5 to the Consolidated Financial Statements for more detail on these investments.our unconsolidated co-investment ventures.
Purchase of a controlling interest. We paid net cash of $590 million to acquire a controlling interest in NAIF in 2014.
Return of investment. As discussed above, we adopted an accounting standard update in 2016 that clarifies the classification methodology within the statement of cash flows for distributions received from equity method investments. As a result, distributions generated from activities outside the operations of our unconsolidated entities, such as property sales, debt refinancing or redemptions of ownership interests, are reflected in Net Cash Provided by (Used in) Investing Activities. We received distributions from unconsolidated entitiesco-investment ventures and other ventures as a return of investment of $411.9$777 million, $291.7$29 million and $170.2$84 million during 2013, 20122016, 2015 and 2011,2014, respectively. We received $106.3Included in this amount for 2016 is $611 million in connection with the wind down of Prologis Japan Fund I in 2013. During 2012, we received $95.0 million, which represented a return of capital, from one of our other joint ventures that held a note receivable that was repaid during the quarter.
In 2012, we received a full redemption of a $55.0 million note receivable that was issued in 2011 through the sale of non-industrial assets.
In connection witha portion of our investments, and the Merger in 2011, we acquired $234.0 million in cash.
In 2011, we used $1.0 billion of cash to purchase units in PEPR. The acquisitionremaining amount was funded with borrowings on a new €500 million bridge facility (“PEPR Bridge Facility”), put in place for the acquisition, and borrowings underfrom property dispositions within our other credit facilities that were subsequently paid from our equity offering in 2011 (see below for more detail).
unconsolidated co-investment entities. For the years ended December 31, 2013, 20122015 and 2011, financing activities used net cash2014, we reclassified $141 million and $177 million, respectively, of $2.4 billion and $1.1 billion and provided net cash of $163.3 million, respectively. The following are the significant activities for all periods presented:distributions from our unconsolidated entities that were previously reported as Net Cash Provided by (Used in) Investing Activities into Net Cash Provided by Operating Activities.
Proceeds from repayment of notes receivable backed by real estate.In April 2013,2016, we received $203 million for the payment in full of notes receivable received in connection with dispositions of real estate to third parties in 2015. In 2014, we received $188 million for the payment in full of the notes receivable that originated in 2010 through the sale of a portfolio of properties. See Note 7 to the Consolidated Financial Statements for further information about notes receivable.
Settlement of net investment hedges. We received net proceeds of $1.4 billion$80 million, $128 million and $13 million from the issuancesettlement of 35.65 million shares of common stock. In June 2011, we completed an equity offeringnet investment hedges during 2016, 2015 and issued 34.5 million shares of common stock and received net proceeds of approximately $1.1 billion.2014, respectively. See Note 16 to the Consolidated Financial Statements for further information on our derivative activity.
Cash Provided by (Used in) Financing Activities
We generated proceedsProceeds from the issuance of common stock under our incentive stock plans, principallystock.
o | We generated net proceeds from the issuance of common stock under our incentive plans, primarily from the exercise of stock options, of $40 million, $18 million and $26 million in 2016, 2015 and 2014, respectively. |
o | We generated net proceeds of $72 million and $140 million from the issuance of 2 million shares and 3 million shares of common stock under our at-the-market program during 2015 and 2014, respectively. |
o | Norges Bank Investment Management exercised a warrant (that we issued in connection with the formation of PELP) for $214 million in exchange for 6 million shares of Prologis common stock in 2014. |
Dividends paid on common and preferred stock. We paid dividends of $22.4$893 million, $805 million and $31.0 million in 2013 and 2012, respectively. We had minimal activity in 2011.
In 2013, we paid $482.5 million to redeem all of the outstanding series L, M, O, P, R and S of preferred stock.
We paid distributions of $552.2 million, $520.3 million and $387.1$672 million to our common and preferred stockholders during 2013, 20122016, 2015 and 2011,2014, respectively. We paid dividends on our preferred stock of $21.7 million, $47.6 million, and $27.0 million during 2013, 2012 and 2011, respectively.
In 2013, we purchased our partners’ interestRepurchase of preferred stock and units. We paid $28 million to repurchase shares of series Q preferred stock in Fund II for $245.8 million. In 2012, we purchased an additional interest in PEPR for $117.3 million, Fund II for $14.1 million, and our partner’s interest in certain properties in the Brazil Fund and related joint ventures of $4.4 million. Additionally in 2013 and 2012, limited partners in the Operating Partnership redeemed units for cash of $4.9 million and $5.8 million, respectively.2014.
In 2013, 2012 and 2011, partnersNoncontrolling interests contributions. Our partner in consolidated co-investment venturesUSLV made contributions in 2015 of $145.5 million, $70.8 million and $123.9 million, respectively,$2.4 billion, primarily for the purchaseKTR transaction, and $446 million in 2014 related to the formation of real estate properties by Mexico Fondo Logistico and developmentthe venture.
36
Tax paid for shares withheld. In 2016, we adopted an accounting standard update that clarifies the classification methodology within the Brazil Fund and related joint ventures.
In 2013, 2012, and 2011,statement of cash flows for taxes paid to a tax authority by us when we distributed $116.0 million, $44.1withhold shares to cover employee withholding tax payments for certain stock compensation plans. As a result of the adoption, we reclassified payments of $12 million and $17.4$13 million from NetCash Provided by Operating Activitiesto various noncontrolling interests,Net Cash Provided by (Used in) Financing Activities for the years ended December 31, 2015 and 2014, respectively. The distribution in 2013 includes cash distributions of $40.6 million to our partners in Prologis AMS due to the disposition of a portfolio of properties.
In 2013,Net borrowings on credit facilities. We generated net proceeds of $33 million from our credit facilities in 2016. We made net payments of $8 million and $717 million in 2015 and 2014 respectively, on our credit facilities.
Repurchase and payments of debt. During 2016, we incurred $3.6made payments of $1.6 billion on our outstanding term loans, $233 million on regularly scheduled debt principal payments and payments at maturity and repurchased and extinguished secured mortgage debt of $461 million. During 2015, we made payments of $1.0 billion on our outstanding term loans, $128 million on regularly scheduled debt principallyprincipal payments and payments at maturity and repurchased and extinguished secured mortgage debt of $2.0 billion. During 2014, we made payments of $2.2 billion on our previous term loan, $102 million on regularly scheduled debt principal payments and payments at maturity and repurchased and extinguished senior notes and secured mortgage debt of $1.9 billion.
Proceeds from issuance of debt.In 2016, we issued $973 million of term loan. In 2012, we incurred $1.4 billionloans and $397 million of debt, principally secured mortgage debt and used the net proceeds for general corporate purposes. In 2015, we issued $1.5 billion of senior term loan. In 2011, we incurred $577.9notes, $565 million inof secured mortgage debt and borrowed $721.0$3.1 billion of term loans and used the net proceeds to fund our share of the purchase price for the KTR transaction, repurchased and redeemed senior notes and for general corporate purposes. In 2014, we issued €1.8 billion ($2.4 billion) of senior notes, $2.3 billion of term loans and $71 million on the PEPR Bridge Facility.of secured debt. See Note 9 to the Consolidated Financial Statements for more detail on the senior note issuances in 2013.debt.
During 2013, we extinguished senior notes and secured mortgage debt for $4.0 billion, of which $1.6 billion is the repayment of outstanding secured mortgage debt primarily with the proceeds received from contributions of properties to PELP and NPR and $2.4 billion is the repayment of senior notes. During 2012 and 2011, we extinguished certain senior notes, exchangeable senior notes, secured mortgage debt, senior term loans and other debt for $1.7 billion and $894.2 million, respectively.OFF-BALANCE SHEET ARRANGEMENTS
We made payments of $2.0 billion, $196.7 million and $975.5 million on regularly scheduled debt principal and maturity payments during 2013, 2012 and 2011, respectively. In 2013, we repaid $355.3 million of outstanding senior notes, $483.6 million of exchangeable senior notes and $135.9 million of secured mortgage debt. Also in 2013, we made payments of $899.0 million on the senior term loan. In 2011, we used $711.8 million in proceeds from our equity offering to repay the amounts borrowed under the PEPR Bridge Facility. Additionally, 2011 activity included the repayment of €101.3 million ($146.8 million) of the euro notes that matured in April 2011.
We made net payments of $93.1 million and $37.6 million in 2013 and 2011, respectively, on our credit facilities and received net proceeds of $9.1 million in 2012 from our credit facilities.
Off-Balance Sheet Arrangements
Unconsolidated Co-Investment VenturesVenture Debt
We had investments in and advances to certainour unconsolidated co-investment ventures, at December 31, 2013,2016, of $4.3$4.1 billion. These unconsolidated ventures had total third partythird-party debt of $7.7$6.5 billion (in the aggregate, not our proportionate share) at December 31, 2013.2016. This debt is primarily secured, or collateralized by properties within the venture and is non-recourse to Prologis or the other investors in the co-investment ventures, matures and maturesbears interest as follows (dollars in millions):
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Discount/ Premium | Total (1) | Prologis Ownership % at 12/31/13 | ||||||||||||||||||||||||||||
Prologis Targeted U.S. Logistics Fund | $ | 20.0 | $ | 185.1 | $ | 166.5 | $ | 164.2 | $ | 298.8 | $ | 824.2 | $ | 14.0 | $ | 1,672.8 | 25.9 | % | ||||||||||||||||||
Prologis North American Industrial Fund | - | 108.7 | 444.1 | 205.0 | 165.5 | 188.9 | - | 1,112.2 | 23.1 | % | ||||||||||||||||||||||||||
Prologis Mexico Industrial Fund | - | - | - | 214.1 | - | - | - | 214.1 | 20.0 | % | ||||||||||||||||||||||||||
Prologis Targeted Europe Logistics Fund | 31.8 | 241.8 | 4.6 | 4.7 | 97.5 | 115.0 | 2.9 | 498.3 | 43.1 | % | ||||||||||||||||||||||||||
Prologis European Properties Fund II (2) | 430.8 | 343.1 | 216.7 | 67.5 | 415.1 | 518.2 | (3.5 | ) | 1,987.9 | 32.5 | % | |||||||||||||||||||||||||
Prologis European Logistics Partners (3) | 288.0 | - | 220.4 | - | - | - | 3.6 | 512.0 | 50.0 | % | ||||||||||||||||||||||||||
Nippon Prologis REIT | 46.2 | - | 222.0 | 22.1 | 286.0 | 958.9 | - | 1,535.2 | 15.1 | % | ||||||||||||||||||||||||||
Prologis China Logistics Venture 1 | - | - | 180.0 | - | - | - | - | 180.0 | 15.0 | % | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
Total co-investment ventures | $ | 816.8 | $ | 878.7 | $ | 1,454.3 | $ | 677.6 | $ | 1,262.9 | $ | 2,605.2 | $ | 17.0 | $ | 7,712.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted |
|
| Gross |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| There- |
|
| Disc/ |
|
|
|
|
|
| Average |
|
| Book |
|
| Ownership |
| |||||
| 2017 |
|
| 2018 |
|
| 2019 |
|
| after |
|
| Prem |
|
| Total |
|
| Interest Rate |
|
| Value |
|
| % |
| |||||||||
Prologis Targeted U.S. Logistics Fund | $ | 19 |
|
| $ | 449 |
|
| $ | 14 |
|
| $ | 930 |
|
| $ | 2 |
|
| $ | 1,414 |
|
|
| 4.4% |
|
| $ | 4,704 |
|
|
| 14.9% |
|
FIBRA Prologis |
| 217 |
|
|
| 73 |
|
|
| 84 |
|
|
| 363 |
|
|
| 2 |
|
|
| 739 |
|
|
| 5.0% |
|
|
| 1,942 |
|
|
| 45.9% |
|
Prologis European Properties Fund II |
| 50 |
|
|
| 317 |
|
|
| 166 |
|
|
| 1,253 |
|
|
| (11 | ) |
|
| 1,775 |
|
|
| 3.1% |
|
|
| 4,881 |
|
|
| 31.2% |
|
Prologis Targeted Europe Logistics Fund |
| 5 |
|
|
| 77 |
|
|
| 233 |
|
|
| 361 |
|
|
| (5 | ) |
|
| 671 |
|
|
| 2.2% |
|
|
| 2,458 |
|
|
| 23.5% |
|
Nippon Prologis REIT |
| 77 |
|
|
| 254 |
|
|
| 231 |
|
|
| 1,063 |
|
|
| (9 | ) |
|
| 1,616 |
|
|
| 0.9% |
|
|
| 4,101 |
|
|
| 15.1% |
|
Prologis China Logistics Venture |
| - |
|
|
| 111 |
|
|
| 180 |
|
|
| 46 |
|
|
| (6 | ) |
|
| 331 |
|
|
| 4.5% |
|
|
| 559 |
|
|
| 15.0% |
|
Totals | $ | 368 |
|
| $ | 1,281 |
|
| $ | 908 |
|
| $ | 4,016 |
|
| $ | (27 | ) |
| $ | 6,546 |
|
|
|
|
|
| $ | 18,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2016, we did not guarantee any third-party debt of the co-investment ventures. In our role as the manager or sponsor, we work with the co-investment ventures to refinance their maturing debt. There can be no assurance that the co-investment ventures will be able to refinance any maturing indebtedness on terms as favorable as the maturing debt, or at all. If the ventures are unable to refinance the maturing indebtedness with newly issued debt, they may be able to obtain funds by voluntary capital contributions from us and our partners or by selling assets. Certain of our ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds.
37
Long-Term Contractual Obligations
We had
The following table summarizes our long-term contractual obligations at December 31, 2013 as follows2016 (in millions):
Payments Due By Period | ||||||||||||||||||||
Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | ||||||||||||||||
Debt obligations, other than credit facilities and exchangeable debt (1) | $ | 866 | $ | 1,543 | $ | 1,521 | $ | 3,855 | $ | 7,785 | ||||||||||
Interest on debt obligations, other than credit facilities and exchangeable debt | 346 | 617 | 421 | 435 | 1,819 | |||||||||||||||
Exchangeable debt | - | 460 | - | - | 460 | |||||||||||||||
Interest on exchangeable debt | 15 | 3 | - | - | 18 | |||||||||||||||
Amounts due on credit facilities | - | - | 725 | - | 725 | |||||||||||||||
Interest on credit facilities | 9 | 18 | 13 | - | 40 | |||||||||||||||
Unfunded commitments on the development portfolio (2) | 614 | 188 | - | - | 802 | |||||||||||||||
Operating lease payments | 36 | 60 | 44 | 227 | 367 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 1,886 | $ | 2,889 | $ | 2,724 | $ | 4,517 | $ | 12,016 |
| Payments Due by Period |
| |||||||||||||||||
| Less than 1 Year |
|
| 1 to 3 Years |
|
| 3 to 5 Years |
|
| More than 5 Years |
|
| Total |
| |||||
Debt obligations, other than credit facilities | $ | 622 |
|
| $ | 1,812 |
|
| $ | 2,641 |
|
| $ | 5,523 |
|
| $ | 10,598 |
|
Interest on debt obligations, other than credit facilities |
| 340 |
|
|
| 562 |
|
|
| 403 |
|
|
| 373 |
|
|
| 1,678 |
|
Unfunded commitments on the development portfolio (1) |
| 854 |
|
|
| 99 |
|
|
| - |
|
|
| - |
|
|
| 953 |
|
Operating lease payments |
| 31 |
|
|
| 62 |
|
|
| 52 |
|
|
| 333 |
|
|
| 478 |
|
Totals | $ | 1,847 |
|
| $ | 2,535 |
|
| $ | 3,096 |
|
| $ | 6,229 |
|
| $ | 13,707 |
|
(1) |
We had properties in our consolidated development portfolio (completed and under development) at December 31, |
Other Commitments
On a continuing basis, we are engaged in various stages of negotiations for the acquisition and/or disposition of individual properties or portfolios of properties.
Distribution and Dividend Requirements
Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure that we will meet the dividend requirements of the Internal Revenue Code, relative to maintaining our REIT status, while still allowing us to retain cash to meet other needs such as capital improvements and other investment activities.
In 2013 and 2012,2016, we paid quarterly cash dividends of $0.42 per common share. In 2015, we paid a quarterly cash dividend of $0.28$0.36 for the first two quarters and $0.40 per common share.share for the last two quarters. Our future common stock dividends, if and as declared, may vary and will be determined by ourthe Board upon the circumstances prevailing at the time, including our financial condition, operating results and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
In the fourth quarter of 2015, we issued a new class of common limited partnership units in the Operating Partnership that are entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units receive a quarterly distribution of at least $0.40 per unit. See Note 11 in the Consolidated Financial Statements for more information on this new partnership unit class. We paid a distribution of $0.64665 in December 2016 and in December 2015 related to this new partnership unit class. We make distributions to the common limited partnership units outstanding at the same per unit amount as our common stock dividend.
At December 31, 2013,2016, we had 1.6 million shares of one series of preferred stock outstanding – the series Q.“Series Q preferred stock,” with a liquidation preference of $50 per share. The annual dividend rate is 8.54% per share and dividends are payable quarterly in arrears.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
Other Commitments
On a continuing basis, we are engaged in various stages of negotiations for the acquisition or disposition of individual properties or portfolios of properties.
Critical Accounting PoliciesCRITICAL ACCOUNTING POLICIES
A critical accounting policy is one that is both important to the portrayal of an entity’s financial condition and results of operations and requires judgment on the part of management. Generally, the judgment requires management to make estimates and assumptions about the effect of matters that are inherently uncertain. Estimates are prepared using management’s best judgment, after considering past and current economic conditions and expectations for the future. Changes in estimates could affect our financial position and specific items in our results of operations that are used by stockholders, potential investors, industry analysts and lenders in their evaluation of our performance. Of the accounting policies discussed in Note 2 to the Consolidated Financial Statements, in Item 8, those presented below have been identified by us as critical accounting policies.
Impairment
Consolidation
We consolidate all entities that are wholly owned and those in which we own less than 100% of Long-Lived Assetsthe equity but control, as well as any variable interest entities in which we are the primary beneficiary. We evaluate our ability to control an entity including whether the entity is a variable interest entity and whether we are the primary beneficiary. We consider the substantive terms of the arrangement to identify which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Investments in entities that we do not control but over which we have the ability to exercise significant influence over operating and financial policies are accounted
We38
for using the equity method. Our ability to correctly assess our influence or control over an entity affects the carrying values of our respective long-lived assets whenever events or changes in circumstances indicate that the carrying amountspresentation of these assets may not be fully recoverable.investments in the Consolidated Financial Statements.
Recoverability
Business Combinations
Upon acquisition of real estate assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review our real estate assets for recoverability, we consider current market conditions, as well as our intent with respect to
holding or disposing of the asset. Our intent with regard to the underlying assets might change as market conditions change. Fair value is determined through various valuation techniques; including discounted cash flow models, applyingthat constitutes a capitalization rate to estimated net operating income of a property, quoted market values and third party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan we use to manage our underlying business. If our analysis indicates that the carrying value of a real estate property that we expect to hold is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount bybusiness, which the carrying value exceeds the current estimated fair value of the real estate property. At the time our intent changes to dispose of one of our real estate properties, we compare the carrying value of the property to the estimated proceeds from disposition. If there is an impairment, we record an impairment for any excess including costs to sell.
Assumptions and estimates used in the recoverability analyses for future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions or our intent with regard to our investment that occurs subsequent to our impairment analyses could impact these assumptions and result in future impairment of our long-lived assets.
Other than Temporary Impairment of Investments in Unconsolidated Entities
When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we determine there is a loss in value that is other than temporary, we recognize an impairment charge to reflect the investment at fair value. The use of projected future cash flows and other estimates of fair value, the determination of when a loss is other than temporary, and the calculation of the amount of the loss, is complex and subjective. Use of other estimates and assumptions may result in different conclusions. Changes in economic and operating conditions, as well as changes in our intent with regard to our investment, that occur subsequent to our review could impact these assumptions and result in future impairment charges of our equity investments.
Revenue Recognition – Gains on Disposition of Real Estate
We recognize gains from the contributions and sales of real estate assets, generally at the time the title is transferred, consideration is received and we no longer have substantial continuing involvement with the real estate sold. In many of our transactions, an entity in which we have an ownership interest will acquire a real estate asset from us. We make judgments based on the specific terms of each transaction as to the amount of the total profit from the transaction that we recognize given our continuing ownership interest and our level of future involvement with the entity that acquires the assets. We also make judgments regarding recognition in earnings of certain fees and incentives earned for services provided to these entities based on when they are earned, fixed and determinable.
Business Combinations
We acquire individual properties, as well as portfolios of properties, or businesses. We may also acquireincludes acquiring a controlling interest in an entity previously accounted for underusing the equity method of accounting. When we acquire a business or individual operating properties, with the intention to hold the investment for the long-term,accounting, we allocate the purchase price to the various components of the acquisition based uponon the fair value of each component. The components typically include buildings, land, building, debt, intangible assets related to above and below marketthe acquired leases, value of costs to obtain tenants,debt, deferred tax liabilities and other assumed assets and liabilities in the case of an acquisition of a business.liabilities. In an acquisition of multiple properties, we must also allocate the purchase price among the properties. The allocation of the purchase price is based on our assessment of estimated fair value and often times is based uponon the expected future cash flows of the property and various characteristics of the markets where the property is located. The fair value may also include an enterprise value premium that we estimate a third party would be willing to pay for a portfolio of properties. In the case of an acquisition of a controlling interest in an entity previously accounted for under the equity method of accounting, this allocation may result in a gain or a loss. The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not to exceed one year. The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenues and expenses.
Consolidation
Revenue Recognition – Gains (Losses) on Dispositions of Investments in Real Estate and Strategic Capital Revenues
We consolidate all entities that are wholly ownedrecognize gains from the contributions and thosesales of real estate assets, generally at the time the title is transferred, consideration is received and we no longer have substantial continuing involvement with the real estate sold. In many of our transactions, an entity in which we own less than 100% but control,have an equity investment will acquire a real estate asset from us. We make judgments based on the specific terms of each transaction as well as any variable interest entities in which we areto the primary beneficiary. We evaluate our ability to control an entity and whether the entity is a variable interest entity and we are the primary beneficiary through considerationamount of the substantive termstotal profit from the transaction that we recognize given our continuing ownership interest and our level of the arrangement to identify which enterprise has the power to direct the activities offuture involvement with the entity that most significantly impactsacquires the entity’s economic performanceassets. In addition, we make judgments regarding recognition in earnings of certain fees and incentives earned for services provided to these entities based on when they are earned, fixed and determinable.
Derivative Financial Instruments
Derivative financial instruments can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. We do not use derivatives for trading or speculative purposes. Accounting for derivatives as hedges requires that at inception, and over the obligation to absorb lossesterm of the entity orinstruments, the righthedged item and derivative qualify for hedge accounting. The rules and interpretations for derivatives are complex. Failure to receive benefits from the entity. Investmentsapply this guidance correctly may result in entitiesall changes in which we do not control but over which we have the ability to exercise significant influence over operating and financial policies are presented under the equity method. Investments in entities that we do not control and over which we do not exercise significant influence are carried at the lower of cost or fair value, as appropriate. Our ability to correctly assess our influence and/or control over an entity affects the presentation of these investments in our consolidated financial statements.
Capitalization of Costs and Depreciation
We capitalize costs incurred in developing, renovating, rehabilitating, and improving real estate assets as part of the investment basis. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. During the land development and construction periods, we capitalize interest costs, insurance, real estate taxes and certain general and administrative costs of the personnel performing development, renovations, and rehabilitation if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use.
Capitalized costs are included in the investment basis of real estate assets. We also capitalize costs incurred to successfully originate a lease that result directly from, and are essential to, the acquisition of that lease. Leasing costs that meet the requirements for capitalization are presented as a component of other assets.
We estimate the depreciable portion of our real estate assets and related useful lives in order to record depreciation expense. Our ability to estimate the depreciable portions of our real estate assets and useful lives is critical to the determination of the appropriate amount of depreciation expense recorded and the carrying value of the hedged derivative being recognized in earnings. We assess both at inception, and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying assets.exposures. Any ineffective portion of a derivative financial instrument's change in fair value is immediately recognized in earnings. Derivatives not designated as hedges are used to manage our exposure to foreign currency fluctuations and variable interest rates but do not meet the strict hedge accounting requirements. The rules and interpretations for derivatives are complex. Failure to apply this guidance correctly may result in all changes in fair value of the hedged derivative being recognized in earnings. See Notes 2 and 16 to the assets to be depreciatedConsolidated Financial Statements for additional information about our derivative financial instrument policy and the estimated depreciable lives of these assets would have an impact on the depreciation expense recognized.our derivative financial instruments.
Income Taxes
As part of the process of preparing our consolidated financial statements, significant
Significant management judgment is required to estimate our income tax liability for each taxable entity, the liability associated with open tax years that are under review, our REIT taxable income and our compliance with REIT requirements. Our estimates are based on interpretation of tax laws. We estimate our actual current income tax due and assess temporary differences resulting from differing treatment of items for book and tax purposes resulting in the recognition of deferred income tax assets and liabilities. These estimates may have an impact on the income tax expense recognized. Adjustments may be required by a change in assessment of our deferred income tax assets and liabilities,liabilities; changes in assessments of the recognition of income tax benefits for certain non-routine transactions,nonroutine transactions; changes due to audit adjustments by federal, international and state tax authorities,authorities; our inability to qualify as a REIT,REIT; the potential for built-in-gain recognition,built-in gain recognition; changes in the assessment of properties to be contributed to taxable REIT subsidiaries and changes in tax laws. Adjustments required in any given period are included within income tax expense. We recognize the tax benefit from an uncertain tax position only if it is “more-likely-than-not”more likely than not that the tax position will be sustained on examination by taxing authorities.
Derivative Financial Instruments
All derivatives are recognized at fair value inRecoverability of Real Estate Assets
We assess the Consolidated Balance Sheets within the line itemsOther Assetscarrying values of our respective long-lived assets whenever events orAccounts Payable and Accrued Expenses, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. The accounting for gains and losses that result from changes in circumstances indicate that the fair valuescarrying amounts of derivative instruments depends on whetherthese assets may not be fully recoverable.
Recoverability of real estate assets is measured by comparison of the derivatives are designatedcarrying amount of the asset to the estimated future undiscounted cash flows. To review our real estate assets for recoverability, we consider current market conditions, as and qualifywell as hedging instruments. Derivatives can be designatedour intent with respect to holding or disposing of the asset. Our intent with regard to the underlying assets might change as fairmarket conditions change. Fair value hedges,is determined through various valuation techniques, including discounted cash flow hedges or hedges of net investments in foreign operations.
For derivatives that will be accounted for as hedging instruments in accordance with the accounting standards, we formally designate and document, at inception, the financial instrument asmodels, applying a hedgecapitalization rate to estimated NOI of a specific underlying exposure, the risk management objectiveproperty, quoted market values and third-party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategy for undertaking the hedge transaction. In addition,
39
strategic plan we formally assess both at inception and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any ineffective portion of a derivative financial instrument’s change in fair value is immediately recognized in earnings. Derivatives not designated as hedges are not speculative and may be useduse to manage our exposureunderlying business. If our analysis indicates that the carrying value of a property that we expect to foreign currency fluctuations and variable interest rates but dohold is not meetrecoverable on an undiscounted cash flow basis, we recognize an impairment charge for the strict hedge accounting requirements.
Changes inamount by which the carrying value exceeds the current estimated fair value of derivatives that are designatedthe property. Assumptions and qualify as cash flow hedges and hedges of net investments in foreign operations are recorded inAccumulated Other Comprehensive Lossestimates used in the Consolidated Balance Sheets. Duerecoverability analyses for future cash flows, including market rents, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions or our intent with regard to our investment that occurs subsequent to our impairment analyses could impact these assumptions and result in future impairment.
Capitalization of Costs
During the land development and construction periods (including renovating and rehabilitating), we capitalize interest, insurance, real estate taxes and certain general and administrative costs of the personnel performing development, renovations and rehabilitation if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. The ability to specifically identify internal personnel costs associated with development and the determination of when a development project is substantially complete and capitalization must cease, requires a high degree of effectiveness between the hedging instrumentsjudgment and the underlying exposures hedged, fluctuationsfailure to accurately assess these costs and timing could result in the valuemisstatement of the derivative instruments will generally be offset by changesasset values and expenses. Capitalized costs are included in the fair values or cash flowsinvestment basis of the underlying exposures being hedged. The changes in fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. For cash flow hedges, we reclassify changes in the fair value of derivatives into the applicable line item in the Consolidated Statements of Operations in which the hedged items are recorded in the same period that the underlying hedged items affect earnings.real estate assets.
New Accounting PronouncementsNEW ACCOUNTING PRONOUNCEMENTS
See Note 2 to the Consolidated Financial Statements in Item 8.Statements.
Funds from OperationsFUNDS FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS/UNITHOLDERS (“FFO”)
FFO is a non-GAAP financial measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the
The National Association of Real Estate Investment Trusts (“NAREIT”) has published a definition ofdefines FFO modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business.
FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We believe net earnings computed under GAAP remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings computed under GAAP. Further, we believe our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and our operating performance.
NAREIT’s FFO measure adjusts net earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales, along with impairment charges, of previously depreciated properties. We agree that thesealso consider the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment to be similar as a gain from the sale of previously depreciated properties under the NAREIT definition of FFO. We exclude similar adjustments are useful to investors forfrom our unconsolidated entities and the following reasons:third parties’ share of our consolidated ventures.
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 analyzingbegin with NAREIT’s definition and we make certain adjustments to reflect our business and the performance ofway that management plans and executes 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.business strategy. While not infrequent or unusual, thesethe additional items we excludeadjust for in calculatingFFO, as definedmodified by Prologisand Core FFO, both as defined below, are subject to significant fluctuations from period to period that causeperiod. Although these items may have 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. These items have 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.
We usecalculate our FFO measures based on our proportionate ownership share of both our unconsolidated and consolidated ventures. We reflect our share of our FFO measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable reconciling items based on our average ownership percentage for the applicable periods.
These FFO measures are used by management as supplemental financial measures of operating performance.performance and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses. 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 atFFO, as defined by Prologis, we adjust the NAREIT defined FFO measure to exclude:
We calculateFFO, as defined by Prologisfor our unconsolidated entities on the same basis as we calculate ourFFO, 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 toFFO, as defined by Prologis,we also use Core FFO. To arrive atCore FFO,we adjustFFO, as defined by Prologis, to exclude the following recurring and non-recurring items that we recognized directly or our share of these items recognized by our unconsolidated entities to the extent they are included inFFO, as defined by Prologis:
We believe it is appropriate to further adjust ourFFO, 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 have 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. Over the last few years, we made it a priority to strengthen our financial position by reducing our debt, our investment in certain low yielding assets and our exposure to foreign currency exchange fluctuations. As a result, we changed our intent to sell or contribute certain of our real estate properties and recorded impairment charges when we did not expect to recover the cost of our investment. Also, we have purchased portions of our debt securities when we believed it was advantageous to do so, which was based on market conditions, and in an effort to lower our borrowing costs and extend our debt maturities. As a result, we have 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 included costs we incurred in 2011 and 2012 associated with the merger with AMB and ProLogis and the PEPR Acquisition and the integration of our systems and processes. In addition, we and our co-investment ventures make acquisitions of real estate and we believe the costs associated with these transactions are transaction based and not part of our core operations.
We analyze our operating performance primarily by the rental incomerevenues of our real estate and the revenue driven byrevenues from our investment managementstrategic 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
FFO, as modified by Prologis attributable to common stockholders and unitholders (“FFO, as modified by Prologis”)
To arrive at FFO, as modified by Prologis, we adjust the NAREIT defined FFO measure to exclude:
deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries;
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 earnings that is excluded from our defined FFO measure;
40
• | unhedged foreign currency exchange gains and losses resulting from debt transactions between us and our foreign consolidated subsidiaries and our foreign unconsolidated entities; |
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
mark-to-market adjustments associated with derivative financial instruments.
We use FFO, as modified by Prologis, so that management, analysts and investors are able to evaluate our performance against other REITs that do not have similar operations or operations in jurisdictions outside the U.S.
Core FFO attributable to common stockholders and unitholders (“Core FFO”)
In addition to FFO, as modified by Prologis, we also use Core FFO. To arrive at Core FFO, we adjust FFO, as modified by Prologis, to exclude the following recurring and nonrecurring items that we recognized directly in FFO, as modified by Prologis:
gains or losses from contribution or sale of land or development properties that were developed with the intent to contribute or sell;
income tax expense related to the sale of investments in real estate and third-party acquisition costs related to the acquisition of real estate;
impairment charges recognized related to our investments in real estate generally 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 overchange in intent to contribute or sell these properties;
gains or losses from the long-term.early extinguishment of debt and redemption and repurchase of preferred stock; and
expenses related to natural disasters.
We useCore 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;general, (ii) evaluate our performance and (vi)the performance of our properties in comparison with expected results and results of previous periods, relative to resource allocation decisions; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; (v) provide guidance to the financial markets to understand our expected operating performance; 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 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.
Limitations on Usethe use of our FFO Measuresmeasures
While we believe our definedmodified 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, these are only a few of the many measures we use when analyzing our business. Some of these limitations are:
The current income tax expenses and acquisition costs that are excluded from our modified FFO measures represent the taxes and transaction costs 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. Furthermore, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of logistics facilities are not reflected in FFO. |
Gains or losses from non-development property acquisitions and dispositions or impairment charges related to expected dispositions represent changes in 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 modified 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 modified 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 modified 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 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 natural disaster expenses that we exclude from Core FFO are costs that we have incurred.
41
We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete consolidated financial statementsConsolidated Financial Statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our definedmodified FFO measures to our net earnings computed under GAAP for the years ended December 31 as follows (in thousands)millions).
2013 | 2012 | 2011 | ||||||||||
FFO: | ||||||||||||
Reconciliation of net loss to FFO measures: | ||||||||||||
Net earnings (loss) attributable to common stockholders | $ | 315,422 | $ | (80,946) | $ | (188,110) | ||||||
Add (deduct) NAREIT defined adjustments: | ||||||||||||
Real estate related depreciation and amortization | 624,573 | 705,717 | 523,424 | |||||||||
Impairment charges on certain real estate properties | - | 34,801 | 5,300 | |||||||||
Net (gain) loss on non-FFO dispositions and acquisitions | (271,315) | (207,033) | 3,092 | |||||||||
Reconciling items related to noncontrolling interests | (8,993) | (27,680) | (19,889) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 159,792 | 127,323 | 147,608 | |||||||||
|
|
|
|
|
| |||||||
Subtotal-NAREIT defined FFO | 819,479 | 552,182 | 471,425 | |||||||||
Add (deduct) our defined adjustments: | ||||||||||||
Unrealized foreign currency and derivative losses (gains) and related amortization, net | 32,870 | 14,892 | (39,034) | |||||||||
Deferred income tax expense (benefit) | 656 | (8,804) | (19,803) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 2,168 | (5,835) | (900) | |||||||||
|
|
|
|
|
| |||||||
FFO, as defined by Prologis | 855,173 | 552,435 | 411,688 | |||||||||
Net gains on acquisitions and dispositions of investments in real estate, net of expenses | (336,815) | (121,303) | (110,469) | |||||||||
Losses (gains) on early extinguishment of debt and redemption of preferred stock | 286,122 | 14,114 | (258) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 8,744 | 23,097 | 2,223 | |||||||||
Impairment charges | - | 264,844 | 145,028 | |||||||||
Merger, acquisition and other integration expenses | - | 80,676 | 140,495 | |||||||||
Natural disaster expenses | - | - | 5,210 | |||||||||
|
|
|
|
|
| |||||||
Core FFO | $ | 813,224 | $ | 813,863 | $ | 593,917 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
FFO |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net earnings to FFO measures: |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to common stockholders |
| $ | 1,203 |
|
| $ | 863 |
|
| $ | 622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (deduct) NAREIT defined adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate related depreciation and amortization |
|
| 900 |
|
|
| 855 |
|
|
| 618 |
|
Gains on dispositions of investments in real estate properties, net |
|
| (423 | ) |
|
| (501 | ) |
|
| (553 | ) |
Reconciling items related to noncontrolling interests |
|
| (105 | ) |
|
| (78 | ) |
|
| 48 |
|
Our share of reconciling items included in earnings from unconsolidated entities |
|
| 162 |
|
|
| 185 |
|
|
| 186 |
|
NAREIT defined FFO |
|
| 1,737 |
|
|
| 1,324 |
|
|
| 921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (deduct) our modified adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign currency and derivative losses (gains), net |
|
| (8 | ) |
|
| 1 |
|
|
| 19 |
|
Deferred income tax benefit, net |
|
| (5 | ) |
|
| (5 | ) |
|
| (87 | ) |
Current income tax expense related to acquired tax liabilities |
|
| - |
|
|
| 4 |
|
|
| 30 |
|
Reconciling items related to noncontrolling interests |
|
| 1 |
|
|
| (1 | ) |
|
| - |
|
Our share of reconciling items included in earnings from unconsolidated entities |
|
| (23 | ) |
|
| (14 | ) |
|
| 5 |
|
FFO, as modified by Prologis |
|
| 1,702 |
|
|
| 1,309 |
|
|
| 888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive at Core FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
Gains on dispositions of development properties and land, net |
|
| (334 | ) |
|
| (258 | ) |
|
| (173 | ) |
Current income tax expense on dispositions |
|
| 24 |
|
|
| - |
|
|
| 15 |
|
Acquisition expenses |
|
| 4 |
|
|
| 47 |
|
|
| 4 |
|
Losses (gains) on early extinguishment of debt and repurchase of preferred stock, net |
|
| (2 | ) |
|
| 86 |
|
|
| 172 |
|
Reconciling items related to noncontrolling interests |
|
| 4 |
|
|
| (11 | ) |
|
| - |
|
Our share of reconciling items included in earnings from unconsolidated entities |
|
| 2 |
|
|
| 8 |
|
|
| 47 |
|
Core FFO |
| $ | 1,400 |
|
| $ | 1,181 |
|
| $ | 953 |
|
ITEM 7A. Quantitative and Qualitative Disclosures aboutAbout Market Risk
We are exposed to the impact of interest rate changes and foreign-exchange relatedforeign exchange-related variability and earnings volatility on our foreign investments. investments and interest rate changes. See our risk factors in Item 1A. Risk Factors, specifically: The depreciation in the value of the foreign currency in countries where we have a significant investment may adversely affect our results of operations and financial position and We have used certainmay be unable to refinance our debt or our cash flow may be insufficient to make required debt payments. See also Notes 2 and 16 in the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information about our foreign operations and derivative financial instruments, primarily foreign currency forward contracts, to reduce our foreign currency market risk, as we deem appropriate. We have also used interest rate swap agreements to reduce our interest rate market risk. We do not use financial instruments for trading or speculative purposes and all financial instruments are entered into in accordance with established policies and procedures.instruments.
We monitor our market risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 10% adverse change in exchange or interest rates at December 31, 2013.2016. The results of the sensitivity analysis are
summarized below.in the following sections. The sensitivity analysis is of limited predictive value. As a result, revenues and expenses, as well as our ultimate realized gains or losses with respect to interest rate and foreign currency exchange rate fluctuations will depend on the exposures that arise during a future period, hedging strategies at the time and the prevailing interest and foreign currency exchange rates. The failure to hedge effectively against exchange and interest rate changes may materially adversely affect our results of operations and financial position.
Foreign Currency Risk
We are exposed to foreign exchange-related variability of investments and earnings from our foreign investments. Foreign currency market risk is the possibility that our financial results or financial position could be better or worse than planned because of changes in foreign currency exchange rates.
Our primary exposure to foreign currency exchange rates relates to the translation of the net income and net investment At December 31, 2016, after consideration of our foreign entities intoderivative and nonderivative financial instruments, we had net equity of approximately $1.6 billion denominated in a currency other than the U.S. dollar principally euro, British pound sterling and Japanese yen, especially to the extent we wish to repatriate funds to the United States. We also have some exposure to movementsrepresenting 7.9% of total net equity. Based on our sensitivity analysis, a 10% reduction in exchange rates relatedwould cause a reduction of $161 million to certain intercompany loansour net equity.
At December 31, 2016, we issue from time to time. To mitigate our foreign currency exchange exposure, we borrow in the functional currency of the borrowing entity, when appropriate. We also may usehad foreign currency forward contracts, or other forms of hedging instruments to manage foreign currency exchange rate risk associated with the projectedwhich were designated and qualify as net operating income or net equity of our foreign consolidated subsidiaries and unconsolidated entities. Hedging arrangements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and the risk of fluctuation in the relative value of the foreign currency. The funds required to settle such arrangements could be significant depending on the stability and movement of foreign currency. The failure to hedge effectively against exchange and interest rate changes may materially adversely affect our results of operations and financial position. We may experience fluctuations in our earnings as a result of changes in foreign currency exchange rates.
In 2013, we entered into seven foreign currency forward contracts that expire in June 2017 and June 2018investment hedges, with an aggregate notional amount of €599.9$146 million ($800.0 million using the forward rate of 1.33) to hedge a portion of our investmentinvestments in Europe at a fixed euro rate in U.S. dollars. We also entered into three foreign currency forward contracts that expire in June 2018 with an aggregate notional amount of ¥24.1 billion ($250.0 million usingCanada and the forward rate of 96.54) to hedge a portionU.K. On the basis of our investment in Japan at a fixed yen rate in U.S. dollars. Based on a sensitivity analysis, a strengthening or weakening of the U.S. dollar against the euro and Japanese yenBritish pound sterling or Canadian dollar by 10% would result in a $105.0$15 million positive or negative change respectively, in our cash flows upon settlementon settlement. In addition, we also have British pound sterling, Canadian dollar, euro and Japanese yen forward and option contracts, which were not designated as hedges, and have an aggregate notional amount of $457 million to mitigate risk associated with the translation of the forward contracts. These derivatives were designatedprojected earnings of our subsidiaries in Canada, Europe and qualify as hedging instruments and thereforeJapan. A
42
weakening of the changes in fair value of these derivatives will be recorded in the foreign currency translation component ofAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets in Item 8.
We issued €700 million ($950.5 million) of debt during December 2013. This debt was issued by the Operating Partnership, which is a U.S. dollar functional entity. To mitigate the risk of fluctuationsagainst these currencies by 10% would result in the exchange rate of the euro, we designated the debt as a non-derivative financial instrument hedge, and as a result, the$46 million negative change in the value of this debt upon translation into U.S. dollars is recorded in the foreign currency translation component ofAccumulated Other Comprehensive Lossin the Consolidated Balance Sheets in Item 8 to offset the foreign currency fluctuations related to our investment in Europe.
We may enter into similar agreements in the future to further hedge our investments in Europe, Japan or other regions outside the United States. As of December 31, 2013, taking into account the net investment hedges, approximately 77% of our net equity was denominated in U.S. dollars.income and cash flows on settlement.
Interest Rate Risk
Our interest rate risk objective is
We also are exposed to limit the impact of future interest rate changes on future earnings and cash flows. To achieve this objective, we primarily borrow on a fixed rate basis for longer-term debt issuances. As ofAt December 31, 2013,2016, we had a total of $1.4$1.8 billion of variable rate debt outstanding, of which $725.5$1.5 billion was outstanding on our term loans, $279 million was outstanding on secured mortgage debt and $35 million was outstanding on our credit facilities, $535.9 million was outstanding under a multi-currency senior term loan and $96.0 million was outstanding secured mortgage debt. As offacilities. At December 31, 2013,2016, we have entered intohad interest rate swap agreements to fix $71.0$276 million (CAD $372 million) of our variable rate secured mortgage debt.
Our primary interest rate risk not subject to interest rate swap agreements is created by the variable rate credit facilities, seniorCanadian term loan and certain secured mortgage debt.loan. During the year ended December 31, 2013,2016, we had weighted average daily outstanding borrowings of $1.4 billion$126 million on our variable rate debt not subject to interest rate swap agreements. Based oncredit facilities. On the resultsbasis of aour sensitivity analysis, assuming a 10% adverse change in interest rates based on our average outstanding variable rate debt balances not subject to interest rate swap agreements during the period the impact was $2.2would result in additional annual interest expense of $2 million, which equates to a change in interest rates of 1611 basis points.
ITEM 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets as of Prologis, Inc. and Prologis, L.P. at December 31, 20132016, and 2012,2015, the Consolidated Statements of Operations,Income of Prologis, Inc. and Prologis, L.P., the Consolidated Statements of Comprehensive Income (Loss)of Prologis, Inc. and Prologis, L.P., Equity/the Consolidated Statements of Equity of Prologis, Inc., the Consolidated Statements of Capital of Prologis, L.P. and the Consolidated Statements Cash Flows of Prologis, Inc. and Prologis, L.P. for each of the years in the three-year period ended December 31, 2013,2016, Notes to Consolidated Financial Statements and Schedule III — Real Estate and Accumulated Depreciation, together with the reports of KPMG LLP, Independent Registered Public Accounting Firm,independent registered public accounting firm, are included under Item 15 of this report and are incorporated herein by reference. Selected unaudited quarterly financial data isare presented in Note 2320 of the Consolidated Financial Statements.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Controls and Procedures (Prologis, Inc.)(The Parent)
Prologis, Inc. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities and Exchange Act) asAct of 1934 (the “Exchange Act”)) at December 31, 2013.2016. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Subsequent to December 31, 2013,2016, there were no significant changes in the internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2013,2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the internal control over financial reporting was conducted as ofat December 31, 2013,2016, based on the criteria described in “Internal Control — Integrated Framework” (1992)(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as ofat December 31, 2013,2016, the internal control over financial reporting was effective.
Our internal control over financial reporting as ofat December 31, 2013,2016, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.
Limitations of the Effectiveness of Controls
Management’s assessment included an evaluation of the design of the internal control over financial reporting and testing of the operational effectiveness of the internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent
43
or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Controls and Procedures (The Operating Partnership)
Prologis, L.P. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) at December 31, 2016. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Subsequent to December 31, 2016, there were no significant changes in the internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the internal control over financial reporting was conducted at December 31, 2016, based on the criteria described in “Internal Control — Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, at December 31, 2016, the internal control over financial reporting was effective.
Limitations of the Effectiveness of Controls
Management’s assessment included an evaluation of the design of the internal control over financial reporting and testing of the operational effectiveness of the internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Controls and Procedures (Prologis, L.P.)
Prologis, L.P. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as of December 31, 2013. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Subsequent to December 31, 2013, there were no significant changes in the internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the internal control over financial reporting was conducted as of December 31, 2013, based on the criteria described in “Internal Control — Integrated Framework” (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as of December 31, 2013, the internal control over financial reporting was effective.
Limitations of the Effectiveness of Controls
Management’s assessment included an evaluation of the design of the internal control over financial reporting and testing of the operational effectiveness of the internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
None.
ITEM 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated herein by reference to, including relevant sections in our 2017 Proxy Statement, under the captions entitled Board of Directors and OfficersCorporate Governance; Executive Officers; Executive Compensation; Director Compensation; Security Ownership; Equity Compensation Plans and Additional Information or will be provided in an amendment filed on Form 10-K/A.
ITEM 11. Executive Compensation
The information required by this item is incorporated herein by reference to the descriptionsrelevant sections in our 2017 Proxy Statement, under the captions “Electionentitled Board of Directors — Nominees,” Information Relating to Stockholders, Directors, Nominees, and Corporate Governance; Executive Officers — Certain Information with Respect toOfficers; Executive Officers, “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance ,”Compensation and “Board of Directors” in our 2014 Proxy StatementDirector Compensation or will be provided in an amendment filed on Form 10-K/A.
ITEM 11. Executive Compensation
The information required by this item is incorporated herein by reference to the descriptions under the captions “Executive Compensation Matters” and “Board of Directors and Committees” in our 2014 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated herein by reference to the descriptions under the captions “Information Relating to Stockholders, Directors, Nominees, and Executive Officers — Security Ownership” and “Equity Compensation Plans” in our 2014 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated herein by reference to the descriptions under the captions “Information Relating to Stockholders, Directors, Nominees, and Executive Officers — Certain Relationships and Related Transactions” and “Corporate Governance” in our 2014 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 14. Principal Accounting Fees and Services
The information required by this item is incorporated herein by reference to the descriptionrelevant sections in our 2017 Proxy Statement, under the caption “Independent Registered Public Accounting Firm” in our 2014 Proxy Statementcaptions entitled Security Ownership and Equity Compensation Plans or will be provided in an amendment filed on Form 10-K/A.
44
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated herein by reference to the relevant sections in our 2017 Proxy Statement, under the caption entitled Board of Directors and Corporate Governance or will be provided in an amendment filed on Form 10-K/A.
ITEM 14. Principal Accounting Fees and Services
The information required by this item is incorporated herein by reference to the relevant sections in our 2017 Proxy Statement, under the caption entitled Audit Matters or will be provided in an amendment filed on Form 10-K/A.
ITEM 15. Exhibits, Financial StatementStatements and Schedules
The following documents are filed as a part of this report:
(a) Financial Statements and Schedules:
1. Financial Statements:
See Index to the Consolidated Financial Statements and Schedule III on page 4746 of this report, which is incorporated herein by reference.
2. Financial Statement Schedules:
Schedule III — Real Estate and Accumulated Depreciation
All other schedules have been omitted since the required information is presented in the Consolidated Financial Statements and the related Notes or is not applicable.
(b) Exhibits: The Exhibits required by Item 601 of Regulation S-K are listed in the Index to the Exhibits on pages 121116 to 126121 of this report, which is incorporated herein by reference.
(c) Financial Statements: See Index to the Consolidated Financial Statements and Schedule III on page 4746 of this report, which is incorporated by reference.
Not Applicable.
45
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE III
Page | Number | |||
Prologis, Inc. and Prologis, L.P.: | ||||
47 | ||||
Prologis, Inc.: | ||||
50 | ||||
51 | ||||
52 | ||||
53 | ||||
54 | ||||
Prologis, L.P.: | ||||
55 | ||||
56 | ||||
57 | ||||
58 | ||||
59 | ||||
Prologis, Inc. and Prologis, L.P.: | ||||
60 | ||||
60 | ||||
60 | ||||
68 | ||||
69 | ||||
71 | ||||
74 | ||||
75 | ||||
75 | ||||
76 | ||||
80 | ||||
81 | ||||
82 | ||||
83 | ||||
86 | ||||
87 | ||||
89 | ||||
92 | ||||
93 | ||||
95 | ||||
96 | ||||
98 | ||||
100 |
46
REPORTREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Prologis, Inc.:
We have audited the accompanying consolidated balance sheets of Prologis, Inc. and subsidiaries (the “Company”) as of December 31, 20132016 and 2012,2015, and the related consolidated statements of operations,income, comprehensive income, (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2013.2016. These consolidated financial statements are the responsibility of Prologis, Inc.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Prologis, Inc. and subsidiaries as of December 31, 20132016 and 2012,2015, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013,2016, in conformity with U.S. generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for discontinued
operations as of January 1, 2014, on a prospective basis, due to the adoption of Accounting Standards Update 2014-08.
As discussed in Note 2 to the consolidated financial statements, during 2016 the Company has changed its method for classifying distributions received from equity method investees in the statements of cash flows for all periods presented, on a retrospective basis, due to the early adoption of Accounting Standards Update 2016-15.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Prologis, Inc.’s internal control over financial reporting as of December 31, 2013,2016, based on criteria established inInternal Control — Integrated Framework(1992) (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 201414, 2017 expressed an unqualified opinion on the effectiveness of Prologis, Inc.’s internal control over financial reporting.
/s/ KPMG LLP
Denver, Colorado
February 26, 2014
47
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Partners
Prologis, L.P.:
We have audited the accompanying consolidated balance sheets of Prologis, L.P. and subsidiaries (the “Company”) as of December 31, 20132016 and 2012,2015, and the related consolidated statements of operations,income, comprehensive income, (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2013.2016. These consolidated financial statements are the responsibility of Prologis, L.P.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for discontinued operations as of January 1, 2014, on a prospective basis, due to the adoption of Accounting Standards Update 2014-08.
As discussed in Note 2 to the consolidated financial statements, during 2016 the Operating Partnership has changed its method for classifying distributions received from equity method investees in the statements of cash flows for all periods presented, on a retrospective basis, due to the early adoption of Accounting Standards Update 2016-15.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Prologis, L.P. and subsidiaries as of December 31, 20132016 and 2012,2015, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013,2016, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Denver, Colorado
February 26, 2014
48
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Prologis, Inc.:
We have audited Prologis, Inc.’s internal control over financial reporting as of December 31, 2013,2016, based on criteria established inInternal Control — Integrated Framework (1992) (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Prologis, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Prologis, Inc.’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Prologis, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013,2016, based on criteria established inInternal Control — Integrated Framework(1992) (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Prologis, Inc. and subsidiaries as of December 31, 20132016 and 2012,2015, and the related consolidated statements of operations,income, comprehensive income, (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2013,2016, and our report dated February 26, 201414, 2017 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP
Denver, Colorado
February 26, 2014
49
(In thousands, except per share data)
December 31, | ||||||||
2013 | 2012 | |||||||
ASSETS |
| |||||||
Investments in real estate properties | $ | 20,824,477 | $ | 25,809,123 | ||||
Less accumulated depreciation | 2,568,998 | 2,480,660 | ||||||
|
|
|
| |||||
Net investments in real estate properties | 18,255,479 | 23,328,463 | ||||||
Investments in and advances to unconsolidated entities | 4,430,239 | 2,195,782 | ||||||
Notes receivable backed by real estate | 188,000 | 188,000 | ||||||
Assets held for sale | 4,042 | 26,027 | ||||||
|
|
|
| |||||
Net investments in real estate | 22,877,760 | 25,738,272 | ||||||
Cash and cash equivalents | 491,129 | 100,810 | ||||||
Restricted cash | 14,210 | 176,926 | ||||||
Accounts receivable | 128,196 | 171,084 | ||||||
Other assets | 1,061,012 | 1,123,053 | ||||||
|
|
|
| |||||
Total assets | $ | 24,572,307 | $ | 27,310,145 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Debt | $ | 9,011,216 | $ | 11,790,794 | ||||
Accounts payable and accrued expenses | 641,011 | 611,770 | ||||||
Other liabilities | 742,191 | 1,115,911 | ||||||
Liabilities related to assets held for sale | 1,436 | 18,334 | ||||||
|
|
|
| |||||
Total liabilities | 10,395,854 | 13,536,809 | ||||||
|
|
|
| |||||
Equity: | ||||||||
Prologis, Inc. stockholders’ equity: | ||||||||
Preferred stock | 100,000 | 582,200 | ||||||
Common stock; $0.01 par value; 498,799 shares and 461,770 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively | 4,988 | 4,618 | ||||||
Additional paid-in capital | 17,974,509 | 16,411,855 | ||||||
Accumulated other comprehensive loss | (435,675) | (233,563) | ||||||
Distributions in excess of net earnings | (3,932,664) | (3,696,093) | ||||||
|
|
|
| |||||
Total Prologis, Inc. stockholders’ equity | 13,711,158 | 13,069,017 | ||||||
Noncontrolling interests | 465,295 | 704,319 | ||||||
|
|
|
| |||||
Total equity | 14,176,453 | 13,773,336 | ||||||
|
|
|
| |||||
Total liabilities and equity | $ | 24,572,307 | $ | 27,310,145 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2013, 2012, 2011
(In thousands, except per share amounts)
| Year Ended December 31, |
| |||||
| 2016 |
|
| 2015 |
| ||
ASSETS |
|
|
|
|
|
|
|
Investments in real estate properties | $ | 27,119,330 |
|
| $ | 27,521,368 |
|
Less accumulated depreciation |
| 3,758,372 |
|
|
| 3,274,284 |
|
Net investments in real estate properties |
| 23,360,958 |
|
|
| 24,247,084 |
|
Investments in and advances to unconsolidated entities |
| 4,230,429 |
|
|
| 4,755,620 |
|
Assets held for sale or contribution |
| 322,139 |
|
|
| 378,423 |
|
Notes receivable backed by real estate |
| 32,100 |
|
|
| 235,050 |
|
Net investments in real estate |
| 27,945,626 |
|
|
| 29,616,177 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 807,316 |
|
|
| 264,080 |
|
Other assets |
| 1,496,990 |
|
|
| 1,514,510 |
|
Total assets | $ | 30,249,932 |
|
| $ | 31,394,767 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Debt | $ | 10,608,294 |
|
| $ | 11,626,831 |
|
Accounts payable and accrued expenses |
| 556,179 |
|
|
| 712,725 |
|
Other liabilities |
| 627,319 |
|
|
| 634,375 |
|
Total liabilities |
| 11,791,792 |
|
|
| 12,973,931 |
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Prologis, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
Series Q preferred stock at stated liquidation preference of $50 per share; $0.01 par value; 1,565 shares issued and outstanding and 100,000 preferred shares authorized at December 31, 2016, and 2015 |
| 78,235 |
|
|
| 78,235 |
|
Common stock; $0.01 par value; 528,671 shares and 524,512 shares issued and outstanding at December 31, 2016, and 2015, respectively |
| 5,287 |
|
|
| 5,245 |
|
Additional paid-in capital |
| 19,455,039 |
|
|
| 19,302,367 |
|
Accumulated other comprehensive loss |
| (937,473 | ) |
|
| (791,429 | ) |
Distributions in excess of net earnings |
| (3,610,007 | ) |
|
| (3,926,483 | ) |
Total Prologis, Inc. stockholders’ equity |
| 14,991,081 |
|
|
| 14,667,935 |
|
Noncontrolling interests |
| 3,467,059 |
|
|
| 3,752,901 |
|
Total equity |
| 18,458,140 |
|
|
| 18,420,836 |
|
Total liabilities and equity | $ | 30,249,932 |
|
| $ | 31,394,767 |
|
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 1,227,975 | $ | 1,459,461 | $ | 1,007,989 | ||||||
Rental recoveries | 331,518 | 364,320 | 257,327 | |||||||||
Investment management income | 179,472 | 126,779 | 137,619 | |||||||||
Development management and other income | 11,521 | 9,958 | 18,836 | |||||||||
|
|
|
|
|
| |||||||
Total revenues | 1,750,486 | 1,960,518 | 1,421,771 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Rental expenses | 451,938 | 491,239 | 348,688 | |||||||||
Investment management expenses | 89,279 | 63,820 | 54,962 | |||||||||
General and administrative expenses | 229,207 | 228,068 | 195,161 | |||||||||
Depreciation and amortization | 648,668 | 724,262 | 542,419 | |||||||||
Other expenses | 26,982 | 26,556 | 24,031 | |||||||||
Merger, acquisition and other integration expenses | - | 80,676 | 140,495 | |||||||||
Impairment of real estate properties | - | 252,914 | 21,237 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,446,074 | 1,867,535 | 1,326,993 | |||||||||
|
|
|
|
|
| |||||||
Operating income | 304,412 | 92,983 | 94,778 | |||||||||
Other income (expense): | ||||||||||||
Earnings from unconsolidated entities, net | 97,220 | 31,676 | 59,935 | |||||||||
Interest expense | (379,327) | (505,215) | (466,571) | |||||||||
Interest and other income, net | 26,948 | 22,878 | 12,008 | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 597,656 | 305,607 | 111,684 | |||||||||
Foreign currency and derivative gains (losses), net | (33,633) | (20,497) | 41,172 | |||||||||
Gain (loss) on early extinguishment of debt, net | (277,014) | (14,114) | 258 | |||||||||
Impairment of other assets | - | (16,135) | (126,432) | |||||||||
|
|
|
|
|
| |||||||
Total other income (expense) | 31,850 | (195,800) | (367,946) | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) before income taxes | 336,262 | (102,817) | (273,168) | |||||||||
Current income tax expense | 126,180 | 17,870 | 21,579 | |||||||||
Deferred income tax benefit | (19,447) | (14,290) | (19,803) | |||||||||
|
|
|
|
|
| |||||||
Total income tax expense | 106,733 | 3,580 | 1,776 | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) from continuing operations | 229,529 | (106,397) | (274,944) | |||||||||
|
|
|
|
|
| |||||||
Discontinued operations: | ||||||||||||
Income attributable to disposed properties and assets held for sale | 6,970 | 40,827 | 58,392 | |||||||||
Net gains on dispositions, including related impairment charges and taxes | 116,550 | 35,098 | 58,614 | |||||||||
|
|
|
|
|
| |||||||
Total discontinued operations | 123,520 | 75,925 | 117,006 | |||||||||
|
|
|
|
|
| |||||||
Consolidated net earnings (loss) | 353,049 | (30,472) | (157,938) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (10,128) | (9,248) | 4,524 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to controlling interests | 342,921 | (39,720) | (153,414) | |||||||||
Less preferred stock dividend | 18,391 | 41,226 | 34,696 | |||||||||
Loss on preferred stock redemption | 9,108 | - | - | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to common stockholders | $ | 315,422 | $ | (80,946) | $ | (188,110) | ||||||
|
|
|
|
|
| |||||||
Weighted average common shares outstanding - Basic | 486,076 | 459,895 | 370,534 | |||||||||
|
|
|
|
|
| |||||||
Weighted average common shares outstanding - Diluted | 491,546 | 461,848 | 371,730 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per share attributable to common stockholders - Basic: | ||||||||||||
Continuing operations | $ | 0.40 | $ | (0.35) | $ | (0.83) | ||||||
Discontinued operations | 0.25 | 0.17 | 0.32 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per share attributable to common stockholders - Basic | $ | 0.65 | $ | (0.18) | $ | (0.51) | ||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per share attributable to common stockholders - Diluted: | ||||||||||||
Continuing operations | $ | 0.39 | $ | (0.34) | $ | (0.82) | ||||||
Discontinued operations | 0.25 | 0.16 | 0.31 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per share attributable to common stockholders - Diluted | $ | 0.64 | $ | (0.18) | $ | (0.51) | ||||||
|
|
|
|
|
| |||||||
Dividends per common share | $ | 1.12 | $ | 1.12 | $ | 1.06 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
2013 | 2012 | 2011 | ||||||||||
Consolidated net earnings (loss) | $ | 353,049 | $ | (30,472) | $ | (157,938) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (234,680) | (79,014) | (192,591) | |||||||||
Unrealized gain (loss) and amortization on derivative contracts, net | 19,590 | 17,986 | (8,166) | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) | 137,959 | (91,500) | (358,695) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (10,128) | (9,248) | 4,524 | |||||||||
Other comprehensive loss attributable to noncontrolling interest | 12,978 | 9,786 | 21,596 | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) attributable to common stockholders | $ | 140,809 | $ | (90,962) | $ | (332,575) |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF EQUITY
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Distributions in Excess of Net Earnings | Non- controlling Interests | Total Equity | ||||||||||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||||||||||||
Balance as of January 1, 2011 | $ | 350,000 | 254,482 | $ | 2,545 | $ | 9,671,560 | $ | (3,160) | $ | (2,515,722) | $ | 15,132 | $ | 7,520,355 | |||||||||||||||||
Consolidated net loss | - | - | - | - | - | (153,414) | (4,524) | (157,938) | ||||||||||||||||||||||||
Merger and PEPR Acquisition | 232,200 | 169,626 | 1,696 | 5,552,412 | - | - | 751,068 | 6,537,376 | ||||||||||||||||||||||||
Issuances of stock in equity offering, net of issuance costs | - | 34,500 | 345 | 1,111,787 | - | - | - | 1,112,132 | ||||||||||||||||||||||||
Effect of common stock plans | - | 793 | 8 | 2,390 | - | - | - | 2,398 | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 94,020 | 94,020 | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (170,995) | - | (21,596) | (192,591) | ||||||||||||||||||||||||
Unrealized losses and amortization on derivative contracts, net | - | - | - | - | (8,166) | - | - | (8,166) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 11,179 | - | (423,026) | (40,265) | (452,112) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2011 | $ | 582,200 | 459,401 | $ | 4,594 | $ | 16,349,328 | $ | (182,321) | $ | (3,092,162) | $ | 793,835 | $ | 14,455,474 | |||||||||||||||||
Consolidated net earnings (loss) | - | - | - | - | - | (39,720) | 9,248 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of common stock plans | - | 2,258 | 23 | 72,909 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances | ||||||||||||||||||||||||||||||||
(conversions), net | - | 111 | 1 | 2,380 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (128,066) | (142,064) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (69,155) | - | (9,859) | (79,014) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | - | 17,913 | - | 73 | 17,986 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 1,236 | - | (564,211) | (43,141) | (606,116) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2012 | $ | 582,200 | 461,770 | $ | 4,618 | $ | 16,411,855 | $ | (233,563) | $ | (3,696,093) | $ | 704,319 | $ | 13,773,336 | |||||||||||||||||
Consolidated net earnings | - | - | - | - | - | 342,921 | 10,128 | 353,049 | ||||||||||||||||||||||||
Effect of common stock plans | - | 1,351 | 13 | 93,692 | - | - | - | 93,705 | ||||||||||||||||||||||||
Issuance of stock in equity offering, net of issuance costs | - | 35,650 | 357 | 1,437,340 | - | - | - | 1,437,697 | ||||||||||||||||||||||||
Redemption of preferred stock | (482,200) | - | - | 8,593 | - | (9,108) | - | (482,715) | ||||||||||||||||||||||||
Issuance of warrants | - | - | - | 32,359 | - | - | - | 32,359 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 146,130 | 146,130 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | 28 | - | (7,868) | - | - | (247,683) | (255,551) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (221,633) | - | (13,047) | (234,680) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | - | 19,521 | - | 69 | 19,590 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (1,462) | - | (570,384) | (134,621) | (706,467) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2013 | $ | 100,000 | 498,799 | $ | 4,988 | $ | 17,974,509 | $ | (435,675) | $ | (3,932,664) | $ | 465,295 | $ | 14,176,453 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
2013 | 2012 | 2011 | ||||||||||
Operating activities: | ||||||||||||
Consolidated net earnings (loss) | $ | 353,049 | $ | (30,472) | $ | (157,938) | ||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||
Straight-lined rents | (46,861) | (62,290) | (59,384) | |||||||||
Stock-based compensation awards, net | 49,239 | 32,138 | 28,920 | |||||||||
Depreciation and amortization | 664,007 | 767,459 | 603,884 | |||||||||
Earnings from unconsolidated entities, net | (97,220) | (31,676) | (59,935) | |||||||||
Distributions and changes in operating receivables from unconsolidated entities | 75,859 | 6,581 | 58,981 | |||||||||
Amortization of debt and lease intangibles | 10,140 | 21,008 | 43,556 | |||||||||
Non-cash merger, acquisition and other integration expenses | - | 17,581 | 20,290 | |||||||||
Impairment of real estate properties and other assets | - | 269,049 | 147,669 | |||||||||
Net gains on dispositions, net of related impairment charges, in discontinued operations | (118,102) | (43,008) | (61,830) | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | (597,656) | (305,607) | (111,684) | |||||||||
Losses (gains) on early extinguishment of debt, net | 277,014 | 14,114 | (258) | |||||||||
Unrealized foreign currency and derivative losses (gains), net | 28,619 | 14,892 | (38,398) | |||||||||
Deferred income tax benefit | (20,067) | (21,967) | (19,803) | |||||||||
Increase in restricted cash, accounts receivable and other assets | (12,912) | (178,387) | (40,095) | |||||||||
Decrease in accounts payable and accrued expenses and other liabilities | (80,120) | (5,923) | (146,911) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 484,989 | 463,492 | 207,064 | |||||||||
|
|
|
|
|
| |||||||
Investing activities: | ||||||||||||
Real estate development activity | (845,234) | (793,349) | (811,035) | |||||||||
Real estate acquisitions, net of cash received | (514,611) | (254,414) | (214,759) | |||||||||
Tenant improvements and lease commissions on previously leased space | (145,424) | (133,558) | (88,368) | |||||||||
Non-development capital expenditures | (82,610) | (80,612) | (55,702) | |||||||||
Investments in and advances to unconsolidated entities, net | (1,221,155) | (165,011) | (37,755) | |||||||||
Return of investment from unconsolidated entities | 411,853 | 291,679 | 170,158 | |||||||||
Proceeds from dispositions and contributions of real estate properties | 5,409,745 | 1,975,036 | 1,644,152 | |||||||||
Proceeds from repayment of notes receivable backed by real estate and other notes receivable | - | 55,000 | 6,450 | |||||||||
Acquisition of co-investment ventures, net of cash received | (678,642) | (365,156) | - | |||||||||
Investments in notes receivable backed by real estate and advances on other notes receivable | - | - | (55,000) | |||||||||
Cash acquired in connection with the Merger | - | - | 234,045 | |||||||||
Acquisition of PEPR, net of cash received | - | - | (1,025,251) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by (used in) investing activities | 2,333,922 | 529,615 | (233,065) | |||||||||
|
|
|
|
|
| |||||||
Financing activities: | ||||||||||||
Proceeds from issuance of common stock, net | 1,505,791 | 30,981 | 1,156,493 | |||||||||
Dividends paid on common stock | (552,170) | (520,253) | (387,133) | |||||||||
Dividends paid on preferred stock | (21,684) | (47,581) | (26,965) | |||||||||
Redemption of preferred stock | (482,500) | - | - | |||||||||
Noncontrolling interest contributions | 145,522 | 70,820 | 123,924 | |||||||||
Noncontrolling interest distributions | (115,999) | (44,070) | (17,378) | |||||||||
Purchase of noncontrolling interest | (250,740) | (142,064) | - | |||||||||
Debt and equity issuance costs paid | (77,017) | (10,963) | (77,241) | |||||||||
Net proceeds from (payments on) credit facilities | (93,075) | 9,064 | (37,558) | |||||||||
Repurchase and early extinguishment of debt | (3,985,673) | (1,653,989) | (894,249) | |||||||||
Proceeds from the issuance of debt | 3,588,683 | 1,433,254 | 1,298,891 | |||||||||
Payments on debt | (2,026,760) | (196,710) | (975,466) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by (used in) financing activities | (2,365,622) | (1,071,511) | 163,318 | |||||||||
|
|
|
|
|
| |||||||
Effect of foreign currency exchange rate changes on cash | (62,970) | 3,142 | 1,121 | |||||||||
Net increase (decrease) in cash and cash equivalents | 390,319 | (75,262) | 138,438 | |||||||||
Cash and cash equivalents, beginning of year | 100,810 | 176,072 | 37,634 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents, end of year | $ | 491,129 | $ | 100,810 | $ | 176,072 |
See Note 22 for information on non-cash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
50
CONSOLIDATED BALANCE SHEETS
(In thousands)INC.
December 31, | ||||||||
2013 | 2012 | |||||||
ASSETS |
| |||||||
Investments in real estate properties | $ | 20,824,477 | $ | 25,809,123 | ||||
Less accumulated depreciation | 2,568,998 | 2,480,660 | ||||||
|
|
|
| |||||
Net investments in real estate properties | 18,255,479 | 23,328,463 | ||||||
Investments in and advances to unconsolidated entities | 4,430,239 | 2,195,782 | ||||||
Notes receivable backed by real estate | 188,000 | 188,000 | ||||||
Assets held for sale | 4,042 | 26,027 | ||||||
|
|
|
| |||||
Net investments in real estate | 22,877,760 | 25,738,272 | ||||||
Cash and cash equivalents | 491,129 | 100,810 | ||||||
Restricted cash | 14,210 | 176,926 | ||||||
Accounts receivable | 128,196 | 171,084 | ||||||
Other assets | 1,061,012 | 1,123,053 | ||||||
|
|
|
| |||||
Total assets | $ | 24,572,307 | $ | 27,310,145 | ||||
LIABILITIES AND CAPITAL | ||||||||
Liabilities: | ||||||||
Debt | $ | 9,011,216 | $ | 11,790,794 | ||||
Accounts payable and accrued expenses | 641,011 | 611,770 | ||||||
Other liabilities | 742,191 | 1,115,911 | ||||||
Liabilities related to assets held for sale | 1,436 | 18,334 | ||||||
|
|
|
| |||||
Total liabilities | 10,395,854 | 13,536,809 | ||||||
|
|
|
| |||||
Capital: | ||||||||
Partners’ capital: | ||||||||
General partner - preferred | 100,000 | 582,200 | ||||||
General partner - common | 13,611,158 | 12,486,817 | ||||||
Limited partners | 48,209 | 51,194 | ||||||
|
|
|
| |||||
Total partners’ capital | 13,759,367 | 13,120,211 | ||||||
Noncontrolling interests | 417,086 | 653,125 | ||||||
|
|
|
| |||||
Total capital | 14,176,453 | 13,773,336 | ||||||
|
|
|
| |||||
Total liabilities and capital | $ | 24,572,307 | $ | 27,310,145 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF OPERATIONSINCOME
Years Ended December 31, 2013, 2012, 2011
(In thousands, except per unitshare amounts)
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 1,227,975 | $ | 1,459,461 | $ | 1,007,989 | ||||||
Rental recoveries | 331,518 | 364,320 | 257,327 | |||||||||
Investment management income | 179,472 | 126,779 | 137,619 | |||||||||
Development management and other income | 11,521 | 9,958 | 18,836 | |||||||||
|
|
|
|
|
| |||||||
Total revenues | 1,750,486 | 1,960,518 | 1,421,771 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Rental expenses | 451,938 | 491,239 | 348,688 | |||||||||
Investment management expenses | 89,279 | 63,820 | 54,962 | |||||||||
General and administrative expenses | 229,207 | 228,068 | 195,161 | |||||||||
Depreciation and amortization | 648,668 | 724,262 | 542,419 | |||||||||
Other expenses | 26,982 | 26,556 | 24,031 | |||||||||
Merger, acquisition and other integration expenses | - | 80,676 | 140,495 | |||||||||
Impairment of real estate properties | - | 252,914 | 21,237 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,446,074 | 1,867,535 | 1,326,993 | |||||||||
|
|
|
|
|
| |||||||
Operating income | 304,412 | 92,983 | 94,778 | |||||||||
Other income (expense): | ||||||||||||
Earnings from unconsolidated entities, net | 97,220 | 31,676 | 59,935 | |||||||||
Interest expense | (379,327) | (505,215) | (466,571) | |||||||||
Interest and other income, net | 26,948 | 22,878 | 12,008 | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 597,656 | 305,607 | 111,684 | |||||||||
Foreign currency and derivative gains (losses), net | (33,633) | (20,497) | 41,172 | |||||||||
Gain (loss) on early extinguishment of debt, net | (277,014) | (14,114) | 258 | |||||||||
Impairment of other assets | - | (16,135) | (126,432) | |||||||||
|
|
|
|
|
| |||||||
Total other income (expense) | 31,850 | (195,800) | (367,946) | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) before income taxes | 336,262 | (102,817) | (273,168) | |||||||||
Current income tax expense | 126,180 | 17,870 | 21,579 | |||||||||
Deferred income tax benefit | (19,447) | (14,290) | (19,803) | |||||||||
|
|
|
|
|
| |||||||
Total income tax expense | 106,733 | 3,580 | 1,776 | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) from continuing operations | 229,529 | (106,397) | (274,944) | |||||||||
|
|
|
|
|
| |||||||
Discontinued operations: | ||||||||||||
Income attributable to disposed properties and assets held for sale | 6,970 | 40,827 | 58,392 | |||||||||
Net gains on dispositions, including related impairment charges and taxes | 116,550 | 35,098 | 58,614 | |||||||||
|
|
|
|
|
| |||||||
Total discontinued operations | 123,520 | 75,925 | 117,006 | |||||||||
|
|
|
|
|
| |||||||
Consolidated net earnings (loss) | 353,049 | (30,472) | (157,938) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (8,920) | (9,410) | 4,175 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to controlling interests | 344,129 | (39,882) | (153,763) | |||||||||
Less preferred unit distribution | 18,391 | 41,226 | 34,696 | |||||||||
Loss on preferred unit redemption | 9,108 | - | - | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to common unitholders | $ | 316,630 | $ | (81,108) | $ | (188,459) | ||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Basic | 487,936 | 461,848 | 371,730 | |||||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Diluted | 491,546 | 461,848 | 371,730 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Basic: | ||||||||||||
Continuing operations | $ | 0.40 | $ | (0.34) | $ | (0.82) | ||||||
Discontinued operations | 0.25 | 0.16 | 0.31 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Basic | $ | 0.65 | $ | (0.18) | $ | (0.51) | ||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted: | ||||||||||||
Continuing operations | $ | 0.39 | $ | (0.34) | $ | (0.82) | ||||||
Discontinued operations | 0.25 | 0.16 | 0.31 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted | $ | 0.64 | $ | (0.18) | $ | (0.51) | ||||||
|
|
|
|
|
| |||||||
Distributions per common unit | $ | 1.12 | $ | 1.12 | $ | 1.06 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
|
| Year Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
| $ | 1,734,844 |
|
| $ | 1,536,117 |
|
| $ | 1,178,609 |
|
Rental recoveries |
|
| 485,565 |
|
|
| 437,070 |
|
|
| 348,740 |
|
Strategic capital |
|
| 294,552 |
|
|
| 210,362 |
|
|
| 219,871 |
|
Development management and other |
|
| 18,174 |
|
|
| 13,525 |
|
|
| 13,567 |
|
Total revenues |
|
| 2,533,135 |
|
|
| 2,197,074 |
|
|
| 1,760,787 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
|
| 568,870 |
|
|
| 544,182 |
|
|
| 430,289 |
|
Strategic capital |
|
| 128,506 |
|
|
| 108,422 |
|
|
| 115,430 |
|
General and administrative |
|
| 222,067 |
|
|
| 217,227 |
|
|
| 229,332 |
|
Depreciation and amortization |
|
| 930,985 |
|
|
| 880,373 |
|
|
| 642,461 |
|
Other |
|
| 14,329 |
|
|
| 66,698 |
|
|
| 23,467 |
|
Total expenses |
|
| 1,864,757 |
|
|
| 1,816,902 |
|
|
| 1,440,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
| 668,378 |
|
|
| 380,172 |
|
|
| 319,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from unconsolidated entities, net |
|
| 206,307 |
|
|
| 159,262 |
|
|
| 134,288 |
|
Interest expense |
|
| (303,146 | ) |
|
| (301,363 | ) |
|
| (308,885 | ) |
Interest and other income, net |
|
| 8,101 |
|
|
| 25,484 |
|
|
| 25,768 |
|
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
|
| 757,398 |
|
|
| 758,887 |
|
|
| 725,790 |
|
Foreign currency and derivative gains (losses), net |
|
| 7,582 |
|
|
| 12,466 |
|
|
| (17,841 | ) |
Gains (losses) on early extinguishment of debt, net |
|
| 2,484 |
|
|
| (86,303 | ) |
|
| (165,300 | ) |
Total other income |
|
| 678,726 |
|
|
| 568,433 |
|
|
| 393,820 |
|
Earnings before income taxes |
|
| 1,347,104 |
|
|
| 948,605 |
|
|
| 713,628 |
|
Total income tax expense (benefit) |
|
| 54,564 |
|
|
| 23,090 |
|
|
| (25,656 | ) |
Consolidated net earnings |
|
| 1,292,540 |
|
|
| 925,515 |
|
|
| 739,284 |
|
Less net earnings attributable to noncontrolling interests |
|
| 82,608 |
|
|
| 56,076 |
|
|
| 103,101 |
|
Net earnings attributable to controlling interests |
|
| 1,209,932 |
|
|
| 869,439 |
|
|
| 636,183 |
|
Less preferred stock dividends |
|
| 6,714 |
|
|
| 6,651 |
|
|
| 7,431 |
|
Loss on preferred stock repurchase |
|
| - |
|
|
| - |
|
|
| 6,517 |
|
Net earnings attributable to common stockholders |
| $ | 1,203,218 |
|
| $ | 862,788 |
|
| $ | 622,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – Basic |
|
| 526,103 |
|
|
| 521,241 |
|
|
| 499,583 |
|
Weighted average common shares outstanding – Diluted |
|
| 546,666 |
|
|
| 533,944 |
|
|
| 506,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to common stockholders – Basic |
| $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to common stockholders – Diluted |
| $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share |
| $ | 1.68 |
|
| $ | 1.52 |
|
| $ | 1.32 |
|
2013 | 2012 | 2011 | ||||||||||
Consolidated net earnings (loss) | $ | 353,049 | $ | (30,472) | $ | (157,938) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (234,680) | (79,014) | (192,591) | |||||||||
Unrealized gain (loss) and amortization on derivative contracts, net | 19,590 | 17,986 | (8,166) | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) | 137,959 | (91,500) | (358,695) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (8,920) | (9,410) | 4,175 | |||||||||
Other comprehensive loss attributable to noncontrolling interests | 12,261 | 9,573 | 21,596 | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) attributable to common unitholders | $ | 141,300 | $ | (91,337) | $ | (332,924) |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CAPITAL
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
General Partner | Limited Partners | Non- controlling Interests | Total | |||||||||||||||||||||||||||||
Preferred | Common | Common | ||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||
Balance as of January 1, 2011 | 12,000 | $ | 350,000 | 254,482 | $ | 7,155,223 | - | $ | - | $ | 15,132 | $ | 7,520,355 | |||||||||||||||||||
Consolidated net loss | - | - | - | (153,414) | - | (349) | (4,175) | (157,938) | ||||||||||||||||||||||||
Merger and PEPR Acquisition | 9,300 | 232,200 | 169,626 | 5,554,108 | 2,059 | 70,141 | 680,927 | 6,537,376 | ||||||||||||||||||||||||
Issuance of units in exchange for contributions of equity offering proceeds | - | - | 34,500 | 1,112,132 | - | - | - | 1,112,132 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 793 | 2,398 | - | - | - | 2,398 | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 94,020 | 94,020 | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (170,995) | - | - | (21,596) | (192,591) | ||||||||||||||||||||||||
Unrealized losses and amortization on derivative contracts, net | - | - | - | (8,166) | - | - | - | (8,166) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (411,847) | - | (11,179) | (29,086) | (452,112) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2011 | 21,300 | $ | 582,200 | 459,401 | $ | 13,079,439 | 2,059 | $ | 58,613 | $ | 735,222 | $ | 14,455,474 | |||||||||||||||||||
Consolidated net earnings (loss) | - | - | - | (39,720) | - | (162) | 9,410 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 2,258 | 72,932 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | - | 111 | 2,381 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (122,258) | (136,256) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (69,155) | - | (286) | (9,573) | (79,014) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | 17,913 | - | 73 | - | 17,986 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (562,975) | (166) | (7,044) | (41,905) | (611,924) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2012 | 21,300 | $ | 582,200 | 461,770 | $ | 12,486,817 | 1,893 | $ | 51,194 | $ | 653,125 | $ | 13,773,336 | |||||||||||||||||||
Consolidated net earnings | - | - | - | 342,921 | - | 1,208 | 8,920 | 353,049 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 1,351 | 93,705 | - | - | - | 93,705 | ||||||||||||||||||||||||
Issuance of units in exchange for contribution of equity offering proceeds | - | - | 35,650 | 1,437,697 | - | - | - | 1,437,697 | ||||||||||||||||||||||||
Redemption of preferred units | (19,300) | (482,200) | - | (515) | - | - | - | (482,715) | ||||||||||||||||||||||||
Issuance of warrants by the REIT | - | - | - | 32,359 | - | - | - | 32,359 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 146,130 | 146,130 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | - | 28 | (7,868) | - | - | (242,745) | (250,613) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (221,633) | - | (786) | (12,261) | (234,680) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | 19,521 | - | 69 | - | 19,590 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (571,846) | (126) | (3,476) | (136,083) | (711,405) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2013 | 2,000 | $ | 100,000 | 498,799 | $ | 13,611,158 | 1,767 | $ | 48,209 | $ | 417,086 | $ | 14,176,453 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2013, 2012 and 2011
(In thousands)
2013 | 2012 | 2011 | ||||||||||
Operating activities: | ||||||||||||
Consolidated net earnings (loss) | $ | 353,049 | $ | (30,472) | $ | (157,938) | ||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||
Straight-lined rents | (46,861) | (62,290) | (59,384) | |||||||||
REIT stock-based compensation awards, net | 49,239 | 32,138 | 28,920 | |||||||||
Depreciation and amortization | 664,007 | 767,459 | 603,884 | |||||||||
Earnings from unconsolidated entities, net | (97,220) | (31,676) | (59,935) | |||||||||
Distributions and changes in operating receivables from unconsolidated entities | 75,859 | 6,581 | 58,981 | |||||||||
Amortization of debt and lease intangibles | 10,140 | 21,008 | 43,556 | |||||||||
Non-cash Merger, acquisition and other integration expenses | - | 17,581 | 20,290 | |||||||||
Impairment of real estate properties and other assets | - | 269,049 | 147,669 | |||||||||
Net gains on dispositions, net of related impairment charges, in discontinued operations | (118,102) | (43,008) | (61,830) | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | (597,656) | (305,607) | (111,684) | |||||||||
Losses (gains) on early extinguishment of debt, net | 277,014 | 14,114 | (258) | |||||||||
Unrealized foreign currency and derivative losses (gains), net | 28,619 | 14,892 | (38,398) | |||||||||
Deferred income tax benefit | (20,067) | (21,967) | (19,803) | |||||||||
Increase in restricted cash, accounts receivable and other assets | (12,912) | (178,387) | (40,095) | |||||||||
Decrease in accounts payable and accrued expenses and other liabilities | (80,120) | (5,923) | (146,911) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 484,989 | 463,492 | 207,064 | |||||||||
|
|
|
|
|
| |||||||
Investing activities: | ||||||||||||
Real estate development activity | (845,234) | (793,349) | (811,035) | |||||||||
Real estate acquisitions, net of cash received | (514,611) | (254,414) | (214,759) | |||||||||
Tenant improvements and lease commissions on previously leased space | (145,424) | (133,558) | (88,368) | |||||||||
Non-development capital expenditures | (82,610) | (80,612) | (55,702) | |||||||||
Investments in and advances to unconsolidated entities, net | (1,221,155) | (165,011) | (37,755) | |||||||||
Return of investment from unconsolidated entities | 411,853 | 291,679 | 170,158 | |||||||||
Proceeds from dispositions and contributions of real estate properties | 5,409,745 | 1,975,036 | 1,644,152 | |||||||||
Proceeds from repayment of notes receivable backed by real estate and other notes receivable | - | 55,000 | 6,450 | |||||||||
Acquisition of co-investment ventures net of cash received | (678,642) | (365,156) | - | |||||||||
Investments in notes receivable backed by real estate and advances on other notes receivable | - | - | (55,000) | |||||||||
Cash acquired in connection with the Merger | - | - | 234,045 | |||||||||
Acquisition of PEPR, net of cash received | - | - | (1,025,251) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by (used in) investing activities | 2,333,922 | 529,615 | (233,065) | |||||||||
|
|
|
|
|
| |||||||
Financing activities: | ||||||||||||
Proceeds from issuance of common partnership units in exchange for contributions from the REIT, net | 1,505,791 | 30,981 | 1,156,493 | |||||||||
Distributions paid on common partnership units | (559,178) | (528,226) | (388,333) | |||||||||
Distributions paid on preferred units | (21,684) | (47,581) | (26,965) | |||||||||
Redemption of preferred stock | (482,500) | - | - | |||||||||
Noncontrolling interest contributions | 145,522 | 70,820 | 123,924 | |||||||||
Noncontrolling interest distributions | (113,928) | (41,905) | (16,178) | |||||||||
Purchase of noncontrolling interest | (245,803) | (136,256) | - | |||||||||
Debt and equity issuance costs paid | (77,017) | (10,963) | (77,241) | |||||||||
Net proceeds from (payments on) credit facilities | (93,075) | 9,064 | (37,558) | |||||||||
Repurchase and early extinguishment of debt | (3,985,673) | (1,653,989) | (894,249) | |||||||||
Proceeds from the issuance of debt | 3,588,683 | 1,433,254 | 1,298,891 | |||||||||
Payments on debt | (2,026,760) | (196,710) | (975,466) | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by (used in) financing activities | (2,365,622) | (1,071,511) | 163,318 | |||||||||
|
|
|
|
|
| |||||||
Effect of foreign currency exchange rate changes on cash | (62,970) | 3,142 | 1,121 | |||||||||
Net increase (decrease) in cash and cash equivalents | 390,319 | (75,262) | 138,438 | |||||||||
Cash and cash equivalents, beginning of year | 100,810 | 176,072 | 37,634 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents, end of year | $ | 491,129 | $ | 100,810 | $ | 176,072 |
See Note 22 for information on non-cash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
51
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
|
| Year Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Consolidated net earnings |
| $ | 1,292,540 |
|
| $ | 925,515 |
|
| $ | 739,284 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation losses, net |
|
| (135,958 | ) |
|
| (208,901 | ) |
|
| (171,401 | ) |
Unrealized losses on derivative contracts, net |
|
| (1,349 | ) |
|
| (17,457 | ) |
|
| (6,498 | ) |
Comprehensive income |
|
| 1,155,233 |
|
|
| 699,157 |
|
|
| 561,385 |
|
Net earnings attributable to noncontrolling interests |
|
| (82,608 | ) |
|
| (56,076 | ) |
|
| (103,101 | ) |
Other comprehensive loss (gain) attributable to noncontrolling interests |
|
| (8,737 | ) |
|
| 35,266 |
|
|
| 13,237 |
|
Comprehensive income attributable to common stockholders |
| $ | 1,063,888 |
|
| $ | 678,347 |
|
| $ | 471,521 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
52
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
|
|
|
|
| Common Stock |
|
|
|
|
|
| Accumulated |
|
| Distributions |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
| Number |
|
|
|
|
|
| Additional |
|
| Other |
|
| in Excess of |
|
| Non- |
|
|
|
|
| |||||
| Preferred |
|
| of |
|
| Par |
|
| Paid-in |
|
| Comprehensive |
|
| Net |
|
| controlling |
|
| Total |
| ||||||||
| Stock |
|
| Shares |
|
| Value |
|
| Capital |
|
| Income (Loss) |
|
| Earnings |
|
| Interests |
|
| Equity |
| ||||||||
Balance at January 1, 2014 | $ | 100,000 |
|
|
| 498,799 |
|
| $ | 4,988 |
|
| $ | 17,974,509 |
|
| $ | (435,675 | ) |
| $ | (3,932,664 | ) |
| $ | 465,295 |
|
| $ | 14,176,453 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 636,183 |
|
|
| 103,101 |
|
|
| 739,284 |
|
Effect of equity compensation plans |
| - |
|
|
| 1,383 |
|
|
| 14 |
|
|
| 88,424 |
|
|
| - |
|
|
| - |
|
|
| 450 |
|
|
| 88,888 |
|
Issuance of stock in at-the-market program, net of issuance costs |
| - |
|
|
| 3,316 |
|
|
| 33 |
|
|
| 140,102 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 140,135 |
|
Repurchase of preferred sock |
| (21,765 | ) |
|
| - |
|
|
| - |
|
|
| 639 |
|
|
| - |
|
|
| (6,517 | ) |
|
| - |
|
|
| (27,643 | ) |
Issuance of stock from exercise of warrant |
| - |
|
|
| 6,000 |
|
|
| 60 |
|
|
| 213,780 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 213,840 |
|
Formation of Prologis U.S. Logistics Venture |
| - |
|
|
| - |
|
|
| - |
|
|
| 13,721 |
|
|
| - |
|
|
| - |
|
|
| 442,251 |
|
|
| 455,972 |
|
Consolidation of Prologis North American Industrial Fund |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 12,507 |
|
|
| - |
|
|
| 554,493 |
|
|
| 567,000 |
|
Capital contributions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 14,464 |
|
|
| 14,464 |
|
Settlement of noncontrolling interests |
| - |
|
|
| - |
|
|
| - |
|
|
| 33,803 |
|
|
| - |
|
|
| - |
|
|
| (36,243 | ) |
|
| (2,440 | ) |
Foreign currency translation losses, net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (167,950 | ) |
|
| - |
|
|
| (13,214 | ) |
|
| (181,164 | ) |
Unrealized losses and amortization on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (9,219 | ) |
|
| - |
|
|
| (23 | ) |
|
| (9,242 | ) |
Distributions and allocations |
| - |
|
|
| - |
|
|
| - |
|
|
| 2,031 |
|
|
| - |
|
|
| (671,495 | ) |
|
| (322,484 | ) |
|
| (991,948 | ) |
Balance at December 31, 2014 | $ | 78,235 |
|
|
| 509,498 |
|
| $ | 5,095 |
|
| $ | 18,467,009 |
|
| $ | (600,337 | ) |
| $ | (3,974,493 | ) |
| $ | 1,208,090 |
|
| $ | 15,183,599 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 869,439 |
|
|
| 56,076 |
|
|
| 925,515 |
|
Effect of equity compensation plans |
| - |
|
|
| 1,475 |
|
|
| 15 |
|
|
| 57,454 |
|
|
| - |
|
|
| - |
|
|
| 26,234 |
|
|
| 83,703 |
|
Issuance of stock in at-the-market program, net of issuance costs |
| - |
|
|
| 1,662 |
|
|
| 16 |
|
|
| 71,532 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 71,548 |
|
Issuance of stock upon conversion of exchangeable debt |
| - |
|
|
| 11,872 |
|
|
| 119 |
|
|
| 502,613 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 502,732 |
|
Issuance of units related to KTR transaction |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 181,170 |
|
|
| 181,170 |
|
Issuance of units related to other acquisitions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 371,570 |
|
|
| 371,570 |
|
Capital contributions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,355,596 |
|
|
| 2,355,596 |
|
Foreign currency translation losses, net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (173,852 | ) |
|
| - |
|
|
| (35,049 | ) |
|
| (208,901 | ) |
Unrealized losses and amortization on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (17,240 | ) |
|
| - |
|
|
| (217 | ) |
|
| (17,457 | ) |
Reallocation of equity |
| - |
|
|
| - |
|
|
| - |
|
|
| 202,812 |
|
|
| - |
|
|
| (15,894 | ) |
|
| (186,918 | ) |
|
| - |
|
Distributions and other |
| - |
|
|
| 5 |
|
|
| - |
|
|
| 947 |
|
|
| - |
|
|
| (805,535 | ) |
|
| (223,651 | ) |
|
| (1,028,239 | ) |
Balance at December 31, 2015 | $ | 78,235 |
|
|
| 524,512 |
|
| $ | 5,245 |
|
| $ | 19,302,367 |
|
| $ | (791,429 | ) |
| $ | (3,926,483 | ) |
| $ | 3,752,901 |
|
| $ | 18,420,836 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,209,932 |
|
|
| 82,608 |
|
|
| 1,292,540 |
|
Effect of equity compensation plans |
| - |
|
|
| 2,282 |
|
|
| 23 |
|
|
| 91,191 |
|
|
| - |
|
|
| - |
|
|
| 26,483 |
|
|
| 117,697 |
|
Issuance of units related to acquisitions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,162 |
|
|
| 3,162 |
|
Conversion of noncontrolling interests |
| - |
|
|
| 1,877 |
|
|
| 19 |
|
|
| 52,237 |
|
|
| - |
|
|
| - |
|
|
| (52,256 | ) |
|
| - |
|
Foreign currency translation gains (losses), net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (144,730 | ) |
|
| - |
|
|
| 8,772 |
|
|
| (135,958 | ) |
Unrealized losses on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,314 | ) |
|
| - |
|
|
| (35 | ) |
|
| (1,349 | ) |
Reallocation of equity |
| - |
|
|
| - |
|
|
| - |
|
|
| 8,657 |
|
|
| - |
|
|
| - |
|
|
| (8,657 | ) |
|
| - |
|
Distributions and other |
| - |
|
|
| - |
|
|
| - |
|
|
| 587 |
|
|
| - |
|
|
| (893,456 | ) |
|
| (345,919 | ) |
|
| (1,238,788 | ) |
Balance at December 31, 2016 | $ | 78,235 |
|
|
| 528,671 |
|
| $ | 5,287 |
|
| $ | 19,455,039 |
|
| $ | (937,473 | ) |
| $ | (3,610,007 | ) |
| $ | 3,467,059 |
|
| $ | 18,458,140 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
53
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
| Years Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net earnings |
| $ | 1,292,540 |
|
| $ | 925,515 |
|
| $ | 739,284 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Straight-lined rents and amortization of above and below market leases |
|
| (93,608 | ) |
|
| (59,619 | ) |
|
| (14,392 | ) |
Equity-based compensation awards |
|
| 60,341 |
|
|
| 53,665 |
|
|
| 57,478 |
|
Depreciation and amortization |
|
| 930,985 |
|
|
| 880,373 |
|
|
| 642,461 |
|
Earnings from unconsolidated entities, net |
|
| (206,307 | ) |
|
| (159,262 | ) |
|
| (134,288 | ) |
Distributions from unconsolidated entities |
|
| 286,651 |
|
|
| 284,664 |
|
|
| 294,890 |
|
Net changes in operating receivables from unconsolidated entities |
|
| 14,823 |
|
|
| (38,185 | ) |
|
| (7,503 | ) |
Amortization of debt premiums, net of deferred financing costs |
|
| (15,137 | ) |
|
| (31,841 | ) |
|
| (7,324 | ) |
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
|
| (757,398 | ) |
|
| (758,887 | ) |
|
| (725,790 | ) |
Unrealized foreign currency and derivative losses (gains), net |
|
| (8,052 | ) |
|
| (1,019 | ) |
|
| 22,571 |
|
Losses (gains) on early extinguishment of debt, net |
|
| (2,484 | ) |
|
| 86,303 |
|
|
| 165,300 |
|
Deferred income tax benefit |
|
| (5,525 | ) |
|
| (5,057 | ) |
|
| (87,240 | ) |
Increase in accounts receivable and other assets |
|
| (106,337 | ) |
|
| (64,749 | ) |
|
| (93 | ) |
Increase (decrease) in accounts payable and accrued expenses and other liabilities |
|
| 26,513 |
|
|
| 4,426 |
|
|
| (50,881 | ) |
Net cash provided by operating activities |
|
| 1,417,005 |
|
|
| 1,116,327 |
|
|
| 894,473 |
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate development |
|
| (1,641,560 | ) |
|
| (1,339,904 | ) |
|
| (1,064,220 | ) |
Real estate acquisitions |
|
| (458,516 | ) |
|
| (890,183 | ) |
|
| (612,330 | ) |
KTR transaction, net of cash received |
|
| - |
|
|
| (4,809,499 | ) |
|
| - |
|
Tenant improvements and lease commissions on previously leased space |
|
| (165,933 | ) |
|
| (154,564 | ) |
|
| (133,957 | ) |
Nondevelopment capital expenditures |
|
| (101,677 | ) |
|
| (83,351 | ) |
|
| (78,610 | ) |
Proceeds from dispositions and contributions of real estate properties |
|
| 2,826,408 |
|
|
| 2,795,249 |
|
|
| 2,285,488 |
|
Investments in and advances to unconsolidated entities |
|
| (265,951 | ) |
|
| (474,420 | ) |
|
| (756,416 | ) |
Acquisition of a controlling interest in unconsolidated co-investment ventures, net of cash received |
|
| - |
|
|
| - |
|
|
| (590,390 | ) |
Return of investment from unconsolidated entities |
|
| 776,550 |
|
|
| 29,406 |
|
|
| 84,135 |
|
Proceeds from repayment of notes receivable backed by real estate |
|
| 202,950 |
|
|
| 9,866 |
|
|
| 188,000 |
|
Proceeds from the settlement of net investment hedges |
|
| 79,767 |
|
|
| 129,149 |
|
|
| 31,409 |
|
Payments on the settlement of net investment hedges |
|
| - |
|
|
| (981 | ) |
|
| (18,370 | ) |
Net cash provided by (used in) investing activities |
|
| 1,252,038 |
|
|
| (4,789,232 | ) |
|
| (665,261 | ) |
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
| 39,470 |
|
|
| 90,258 |
|
|
| 378,247 |
|
Distributions paid on common and preferred stock |
|
| (893,455 | ) |
|
| (804,697 | ) |
|
| (672,190 | ) |
Repurchase of preferred stock |
|
| - |
|
|
| - |
|
|
| (27,643 | ) |
Noncontrolling interests contributions |
|
| 2,168 |
|
|
| 2,355,367 |
|
|
| 468,280 |
|
Noncontrolling interests distributions |
|
| (343,550 | ) |
|
| (215,740 | ) |
|
| (315,426 | ) |
Purchase of noncontrolling interests |
|
| (3,083 | ) |
|
| (2,560 | ) |
|
| (2,440 | ) |
Tax paid for shares withheld |
|
| (8,570 | ) |
|
| (12,298 | ) |
|
| (12,990 | ) |
Debt and equity issuance costs paid |
|
| (20,123 | ) |
|
| (32,012 | ) |
|
| (23,420 | ) |
Net proceeds from (payments on) credit facilities |
|
| 33,435 |
|
|
| (7,970 | ) |
|
| (717,369 | ) |
Repurchase and payments of debt |
|
| (2,301,647 | ) |
|
| (3,156,294 | ) |
|
| (4,205,806 | ) |
Proceeds from issuance of debt |
|
| 1,369,890 |
|
|
| 5,381,862 |
|
|
| 4,779,950 |
|
Net cash provided by (used in) financing activities |
|
| (2,125,465 | ) |
|
| 3,595,916 |
|
|
| (350,807 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash |
|
| (342 | ) |
|
| (9,623 | ) |
|
| (18,842 | ) |
Net increase (decrease) in cash and cash equivalents |
|
| 543,236 |
|
|
| (86,612 | ) |
|
| (140,437 | ) |
Cash and cash equivalents, beginning of year |
|
| 264,080 |
|
|
| 350,692 |
|
|
| 491,129 |
|
Cash and cash equivalents, end of year |
| $ | 807,316 |
|
| $ | 264,080 |
|
| $ | 350,692 |
|
See Note 19 for information on noncash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
54
(In thousands)
| Year Ended December 31, |
| |||||
| 2016 |
|
| 2015 |
| ||
ASSETS |
|
|
|
|
|
|
|
Investments in real estate properties | $ | 27,119,330 |
|
| $ | 27,521,368 |
|
Less accumulated depreciation |
| 3,758,372 |
|
|
| 3,274,284 |
|
Net investments in real estate properties |
| 23,360,958 |
|
|
| 24,247,084 |
|
Investments in and advances to unconsolidated entities |
| 4,230,429 |
|
|
| 4,755,620 |
|
Assets held for sale or contribution |
| 322,139 |
|
|
| 378,423 |
|
Notes receivable backed by real estate |
| 32,100 |
|
|
| 235,050 |
|
Net investments in real estate |
| 27,945,626 |
|
|
| 29,616,177 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 807,316 |
|
|
| 264,080 |
|
Other assets |
| 1,496,990 |
|
|
| 1,514,510 |
|
Total assets | $ | 30,249,932 |
|
| $ | 31,394,767 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND CAPITAL |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Debt | $ | 10,608,294 |
|
| $ | 11,626,831 |
|
Accounts payable and accrued expenses |
| 556,179 |
|
|
| 712,725 |
|
Other liabilities |
| 627,319 |
|
|
| 634,375 |
|
Total liabilities |
| 11,791,792 |
|
|
| 12,973,931 |
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
Partners’ capital: |
|
|
|
|
|
|
|
General partner – preferred |
| 78,235 |
|
|
| 78,235 |
|
General partner – common |
| 14,912,846 |
|
|
| 14,589,700 |
|
Limited partners – common |
| 150,173 |
|
|
| 186,683 |
|
Limited partners – Class A common |
| 244,417 |
|
|
| 245,991 |
|
Total partners’ capital |
| 15,385,671 |
|
|
| 15,100,609 |
|
Noncontrolling interests |
| 3,072,469 |
|
|
| 3,320,227 |
|
Total capital |
| 18,458,140 |
|
|
| 18,420,836 |
|
Total liabilities and capital | $ | 30,249,932 |
|
| $ | 31,394,767 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
55
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit amounts)
|
| Year Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
| $ | 1,734,844 |
|
| $ | 1,536,117 |
|
| $ | 1,178,609 |
|
Rental recoveries |
|
| 485,565 |
|
|
| 437,070 |
|
|
| 348,740 |
|
Strategic capital |
|
| 294,552 |
|
|
| 210,362 |
|
|
| 219,871 |
|
Development management and other |
|
| 18,174 |
|
|
| 13,525 |
|
|
| 13,567 |
|
Total revenues |
|
| 2,533,135 |
|
|
| 2,197,074 |
|
|
| 1,760,787 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
|
| 568,870 |
|
|
| 544,182 |
|
|
| 430,289 |
|
Strategic capital |
|
| 128,506 |
|
|
| 108,422 |
|
|
| 115,430 |
|
General and administrative |
|
| 222,067 |
|
|
| 217,227 |
|
|
| 229,332 |
|
Depreciation and amortization |
|
| 930,985 |
|
|
| 880,373 |
|
|
| 642,461 |
|
Other |
|
| 14,329 |
|
|
| 66,698 |
|
|
| 23,467 |
|
Total expenses |
|
| 1,864,757 |
|
|
| 1,816,902 |
|
|
| 1,440,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
| 668,378 |
|
|
| 380,172 |
|
|
| 319,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from unconsolidated entities, net |
|
| 206,307 |
|
|
| 159,262 |
|
|
| 134,288 |
|
Interest expense |
|
| (303,146 | ) |
|
| (301,363 | ) |
|
| (308,885 | ) |
Interest and other income, net |
|
| 8,101 |
|
|
| 25,484 |
|
|
| 25,768 |
|
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
|
| 757,398 |
|
|
| 758,887 |
|
|
| 725,790 |
|
Foreign currency and derivative gains (losses), net |
|
| 7,582 |
|
|
| 12,466 |
|
|
| (17,841 | ) |
Losses on early extinguishment of debt, net |
|
| 2,484 |
|
|
| (86,303 | ) |
|
| (165,300 | ) |
Total other income |
|
| 678,726 |
|
|
| 568,433 |
|
|
| 393,820 |
|
Earnings before income taxes |
|
| 1,347,104 |
|
|
| 948,605 |
|
|
| 713,628 |
|
Total income tax expense (benefit) |
|
| 54,564 |
|
|
| 23,090 |
|
|
| (25,656 | ) |
Consolidated net earnings |
|
| 1,292,540 |
|
|
| 925,515 |
|
|
| 739,284 |
|
Less net earnings attributable to noncontrolling interests |
|
| 48,307 |
|
|
| 44,950 |
|
|
| 100,900 |
|
Net earnings attributable to controlling interests |
|
| 1,244,233 |
|
|
| 880,565 |
|
|
| 638,384 |
|
Less preferred unit distributions |
|
| 6,714 |
|
|
| 6,651 |
|
|
| 7,431 |
|
Loss on preferred unit repurchase |
|
| - |
|
|
| - |
|
|
| 6,517 |
|
Net earnings attributable to common unitholders |
| $ | 1,237,519 |
|
| $ | 873,914 |
|
| $ | 624,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding – Basic |
|
| 532,326 |
|
|
| 525,912 |
|
|
| 501,349 |
|
Weighted average common units outstanding – Diluted |
|
| 546,666 |
|
|
| 533,944 |
|
|
| 506,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per unit attributable to common unitholders – Basic |
| $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per unit attributable to common unitholders – Diluted |
| $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions per common unit |
| $ | 1.68 |
|
| $ | 1.52 |
|
| $ | 1.32 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
56
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
|
| Year Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Consolidated net earnings |
| $ | 1,292,540 |
|
| $ | 925,515 |
|
| $ | 739,284 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation losses, net |
|
| (135,958 | ) |
|
| (208,901 | ) |
|
| (171,401 | ) |
Unrealized losses on derivative contracts, net |
|
| (1,349 | ) |
|
| (17,457 | ) |
|
| (6,498 | ) |
Comprehensive income |
|
| 1,155,233 |
|
|
| 699,157 |
|
|
| 561,385 |
|
Net earnings attributable to noncontrolling interests |
|
| (48,307 | ) |
|
| (44,950 | ) |
|
| (100,900 | ) |
Other comprehensive loss (gain) attributable to noncontrolling interests |
|
| (12,601 | ) |
|
| 32,862 |
|
|
| 12,666 |
|
Comprehensive income attributable to common unitholders |
| $ | 1,094,325 |
|
| $ | 687,069 |
|
| $ | 473,151 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
57
CONSOLIDATED STATEMENTS OF CAPITAL
(In thousands)
| General Partner |
|
| Limited Partners |
|
| Non- |
|
|
|
|
| |||||||||||||||||||||||||||
| Preferred |
|
| Common |
|
| Common |
|
| Class A Common |
|
| controlling |
|
|
|
|
| |||||||||||||||||||||
| Units |
|
| Amount |
|
| Units |
|
| Amount |
|
| Units |
|
| Amount |
|
| Units |
|
| Amount |
|
| Interests |
|
| Total |
| ||||||||||
Balance at January 1, 2014 |
| 2,000 |
|
| $ | 100,000 |
|
|
| 498,799 |
|
| $ | 13,611,158 |
|
|
| 1,767 |
|
| $ | 48,209 |
|
|
| - |
|
| $ | - |
|
| $ | 417,086 |
|
| $ | 14,176,453 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| 636,183 |
|
|
| - |
|
|
| 2,201 |
|
|
| - |
|
|
| - |
|
|
| 100,900 |
|
|
| 739,284 |
|
Effect of equity compensation plans |
| - |
|
|
| - |
|
|
| 1,383 |
|
|
| 88,438 |
|
|
| - |
|
|
| 450 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 88,888 |
|
Issuance of units in exchange for contribution of at-the-market offering proceeds |
| - |
|
|
| - |
|
|
| 3,316 |
|
|
| 140,135 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 140,135 |
|
Repurchase of preferred units |
| (435 | ) |
|
| (21,765 | ) |
|
| - |
|
|
| (5,878 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (27,643 | ) |
Issuance of units in exchange for proceeds from exercise of warrant |
| - |
|
|
| - |
|
|
| 6,000 |
|
|
| 213,840 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 213,840 |
|
Formation of Prologis U.S. Logistics Venture |
| - |
|
|
| - |
|
|
| - |
|
|
| 13,721 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 442,251 |
|
|
| 455,972 |
|
Consolidation of Prologis North American Industrial Fund |
| - |
|
|
| - |
|
|
| - |
|
|
| 12,507 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 554,493 |
|
|
| 567,000 |
|
Capital contributions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 14,464 |
|
|
| 14,464 |
|
Settlement of noncontrolling interests |
| - |
|
|
| - |
|
|
| - |
|
|
| 33,803 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (36,243 | ) |
|
| (2,440 | ) |
Foreign currency translation losses, net |
| - |
|
|
| - |
|
|
| - |
|
|
| (167,950 | ) |
|
| - |
|
|
| (548 | ) |
|
| - |
|
|
| - |
|
|
| (12,666 | ) |
|
| (181,164 | ) |
Unrealized losses and amortization on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| (9,219 | ) |
|
| - |
|
|
| (23 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (9,242 | ) |
Distributions and allocations |
| - |
|
|
| - |
|
|
| - |
|
|
| (669,464 | ) |
|
| - |
|
|
| (2,100 | ) |
|
| - |
|
|
| - |
|
|
| (320,384 | ) |
|
| (991,948 | ) |
Balance at December 31, 2014 |
| 1,565 |
|
| $ | 78,235 |
|
|
| 509,498 |
|
| $ | 13,897,274 |
|
|
| 1,767 |
|
| $ | 48,189 |
|
|
| - |
|
| $ | - |
|
| $ | 1,159,901 |
|
| $ | 15,183,599 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| 869,439 |
|
|
| - |
|
|
| 7,733 |
|
|
| - |
|
|
| 3,393 |
|
|
| 44,950 |
|
|
| 925,515 |
|
Effect of equity compensation plans |
| - |
|
|
| - |
|
|
| 1,475 |
|
|
| 57,469 |
|
|
| 303 |
|
|
| 26,234 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 83,703 |
|
Issuance of units in exchange for contribution of at-the-market offering proceeds |
| - |
|
|
| - |
|
|
| 1,662 |
|
|
| 71,548 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 71,548 |
|
Issuance of units upon conversion of exchangeable debt |
| - |
|
|
| - |
|
|
| 11,872 |
|
|
| 502,732 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 502,732 |
|
Issuance of units related to KTR transaction |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,500 |
|
|
| 181,170 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 181,170 |
|
Issuance of units related to other acquisitions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 157 |
|
|
| 6,534 |
|
|
| 8,894 |
|
|
| 365,036 |
|
|
| - |
|
|
| 371,570 |
|
Capital contributions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,355,596 |
|
|
| 2,355,596 |
|
Foreign currency translation losses, net |
| - |
|
|
| - |
|
|
| - |
|
|
| (173,852 | ) |
|
| - |
|
|
| (1,520 | ) |
|
| - |
|
|
| (667 | ) |
|
| (32,862 | ) |
|
| (208,901 | ) |
Unrealized losses and amortization on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| (17,240 | ) |
|
| - |
|
|
| (151 | ) |
|
| - |
|
|
| (66 | ) |
|
| - |
|
|
| (17,457 | ) |
Reallocation of capital |
| - |
|
|
| - |
|
|
| - |
|
|
| 186,918 |
|
|
| - |
|
|
| (70,965 | ) |
|
| - |
|
|
| (115,953 | ) |
|
| - |
|
|
| - |
|
Distributions and other |
| - |
|
|
| - |
|
|
| 5 |
|
|
| (804,588 | ) |
|
| (16 | ) |
|
| (10,541 | ) |
|
| - |
|
|
| (5,752 | ) |
|
| (207,358 | ) |
|
| (1,028,239 | ) |
Balance at December 31, 2015 |
| 1,565 |
|
| $ | 78,235 |
|
|
| 524,512 |
|
| $ | 14,589,700 |
|
|
| 6,711 |
|
| $ | 186,683 |
|
|
| 8,894 |
|
| $ | 245,991 |
|
| $ | 3,320,227 |
|
| $ | 18,420,836 |
|
Consolidated net earnings |
| - |
|
|
| - |
|
|
| - |
|
|
| 1,209,932 |
|
|
| - |
|
|
| 14,232 |
|
|
| - |
|
|
| 20,069 |
|
|
| 48,307 |
|
|
| 1,292,540 |
|
Effect of equity compensation plans |
| - |
|
|
| - |
|
|
| 2,282 |
|
|
| 91,214 |
|
|
| 440 |
|
|
| 26,483 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 117,697 |
|
Issuance of units related to acquisitions |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 71 |
|
|
| 3,162 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,162 |
|
Conversion of limited partners units |
| - |
|
|
| - |
|
|
| 1,877 |
|
|
| 52,256 |
|
|
| (1,877 | ) |
|
| (52,256 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Foreign currency translation gains (losses), net |
| - |
|
|
| - |
|
|
| - |
|
|
| (144,730 | ) |
|
| - |
|
|
| (1,457 | ) |
|
| - |
|
|
| (2,372 | ) |
|
| 12,601 |
|
|
| (135,958 | ) |
Unrealized losses on derivative contracts, net |
| - |
|
|
| - |
|
|
| - |
|
|
| (1,314 | ) |
|
| - |
|
|
| (13 | ) |
|
| - |
|
|
| (22 | ) |
|
| - |
|
|
| (1,349 | ) |
Reallocation of capital |
| - |
|
|
| - |
|
|
| - |
|
|
| 8,657 |
|
|
| - |
|
|
| (12,414 | ) |
|
| - |
|
|
| 3,757 |
|
|
| - |
|
|
| - |
|
Distributions and other |
| - |
|
|
| - |
|
|
| - |
|
|
| (892,869 | ) |
|
| (22 | ) |
|
| (14,247 | ) |
|
| - |
|
|
| (23,006 | ) |
|
| (308,666 | ) |
|
| (1,238,788 | ) |
Balance at December 31, 2016 |
| 1,565 |
|
| $ | 78,235 |
|
|
| 528,671 |
|
| $ | 14,912,846 |
|
|
| 5,323 |
|
| $ | 150,173 |
|
|
| 8,894 |
|
| $ | 244,417 |
|
| $ | 3,072,469 |
|
| $ | 18,458,140 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
58
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
| Years Ended December 31, |
| |||||||||
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net earnings |
| $ | 1,292,540 |
|
| $ | 925,515 |
|
| $ | 739,284 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Straight-lined rents and amortization of above and below market leases |
|
| (93,608 | ) |
|
| (59,619 | ) |
|
| (14,392 | ) |
Equity-based compensation awards |
|
| 60,341 |
|
|
| 53,665 |
|
|
| 57,478 |
|
Depreciation and amortization |
|
| 930,985 |
|
|
| 880,373 |
|
|
| 642,461 |
|
Earnings from unconsolidated entities, net |
|
| (206,307 | ) |
|
| (159,262 | ) |
|
| (134,288 | ) |
Distributions from unconsolidated entities |
|
| 286,651 |
|
|
| 284,664 |
|
|
| 294,890 |
|
Net changes in operating receivables from unconsolidated entities |
|
| 14,823 |
|
|
| (38,185 | ) |
|
| (7,503 | ) |
Amortization of debt premiums, net of deferred financing costs |
|
| (15,137 | ) |
|
| (31,841 | ) |
|
| (7,324 | ) |
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
|
| (757,398 | ) |
|
| (758,887 | ) |
|
| (725,790 | ) |
Unrealized foreign currency and derivative losses (gains), net |
|
| (8,052 | ) |
|
| (1,019 | ) |
|
| 22,571 |
|
Losses on early extinguishment of debt, net |
|
| (2,484 | ) |
|
| 86,303 |
|
|
| 165,300 |
|
Deferred income tax benefit |
|
| (5,525 | ) |
|
| (5,057 | ) |
|
| (87,240 | ) |
Increase in accounts receivable and other assets |
|
| (106,337 | ) |
|
| (64,749 | ) |
|
| (93 | ) |
Increase (decrease) in accounts payable and accrued expenses and other liabilities |
|
| 26,513 |
|
|
| 4,426 |
|
|
| (50,881 | ) |
Net cash provided by operating activities |
|
| 1,417,005 |
|
|
| 1,116,327 |
|
|
| 894,473 |
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate development |
|
| (1,641,560 | ) |
|
| (1,339,904 | ) |
|
| (1,064,220 | ) |
Real estate acquisitions |
|
| (458,516 | ) |
|
| (890,183 | ) |
|
| (612,330 | ) |
KTR transaction, net of cash received |
|
| - |
|
|
| (4,809,499 | ) |
|
| - |
|
Tenant improvements and lease commissions on previously leased space |
|
| (165,933 | ) |
|
| (154,564 | ) |
|
| (133,957 | ) |
Nondevelopment capital expenditures |
|
| (101,677 | ) |
|
| (83,351 | ) |
|
| (78,610 | ) |
Proceeds from dispositions and contributions of real estate properties |
|
| 2,826,408 |
|
|
| 2,795,249 |
|
|
| 2,285,488 |
|
Investments in and advances to unconsolidated entities |
|
| (265,951 | ) |
|
| (474,420 | ) |
|
| (756,416 | ) |
Acquisition of a controlling interest in unconsolidated co-investment ventures, net of cash received |
|
| - |
|
|
| - |
|
|
| (590,390 | ) |
Return of investment from unconsolidated entities |
|
| 776,550 |
|
|
| 29,406 |
|
|
| 84,135 |
|
Proceeds from repayment of notes receivable backed by real estate |
|
| 202,950 |
|
|
| 9,866 |
|
|
| 188,000 |
|
Proceeds from the settlement of net investment hedges |
|
| 79,767 |
|
|
| 129,149 |
|
|
| 31,409 |
|
Payments on the settlement of net investment hedges |
|
| - |
|
|
| (981 | ) |
|
| (18,370 | ) |
Net cash provided by (used in) investing activities |
|
| 1,252,038 |
|
|
| (4,789,232 | ) |
|
| (665,261 | ) |
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common partnership units in exchange for contributions from Prologis, Inc. |
|
| 39,470 |
|
|
| 90,258 |
|
|
| 378,247 |
|
Distributions paid on common and preferred units |
|
| (931,559 | ) |
|
| (820,989 | ) |
|
| (674,344 | ) |
Repurchase of preferred units |
|
| - |
|
|
| - |
|
|
| (27,643 | ) |
Noncontrolling interests contributions |
|
| 2,168 |
|
|
| 2,355,367 |
|
|
| 468,280 |
|
Noncontrolling interests distributions |
|
| (306,297 | ) |
|
| (199,845 | ) |
|
| (313,272 | ) |
Purchase of noncontrolling interests |
|
| (2,232 | ) |
|
| (2,163 | ) |
|
| (2,440 | ) |
Tax paid for shares of the Parent withheld |
|
| (8,570 | ) |
|
| (12,298 | ) |
|
| (12,990 | ) |
Debt and capital issuance costs paid |
|
| (20,123 | ) |
|
| (32,012 | ) |
|
| (23,420 | ) |
Net proceeds from (payments on) credit facilities |
|
| 33,435 |
|
|
| (7,970 | ) |
|
| (717,369 | ) |
Repurchase and payments of debt |
|
| (2,301,647 | ) |
|
| (3,156,294 | ) |
|
| (4,205,806 | ) |
Proceeds from issuance of debt |
|
| 1,369,890 |
|
|
| 5,381,862 |
|
|
| 4,779,950 |
|
Net cash provided by (used in) financing activities |
|
| (2,125,465 | ) |
|
| 3,595,916 |
|
|
| (350,807 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash |
|
| (342 | ) |
|
| (9,623 | ) |
|
| (18,842 | ) |
Net increase (decrease) in cash and cash equivalents |
|
| 543,236 |
|
|
| (86,612 | ) |
|
| (140,437 | ) |
Cash and cash equivalents, beginning of year |
|
| 264,080 |
|
|
| 350,692 |
|
|
| 491,129 |
|
Cash and cash equivalents, end of year |
| $ | 807,316 |
|
| $ | 264,080 |
|
| $ | 350,692 |
|
See Note 19 for information on noncash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
59
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF THE BUSINESS
Prologis, Inc. (the “REIT”(or the “Parent”) commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (“Internal(the “Internal Revenue Code”), and believes the current organization and method of operation will enable the REITit to maintain its status as a real estate investment trust.REIT. The REITParent is the general partner of Prologis, L.P. (the(or the “Operating Partnership”). Through the controlling interest in the Operating Partnership, we are engaged in the ownership, acquisition, development and operationmanagement of industriallogistics properties in globalthe world’s primary population centers and regional markets throughout the Americas, Europe and Asia.in those supported by extensive transportation infrastructure. Our current business strategy includesconsists of two reportableoperating business segments: Real Estate Operations and Investment Management (previously referred to as Private Capital).Strategic Capital. Our Real Estate Operations segment represents the long-term ownership and development of industriallogistics properties. Our Investment ManagementStrategic Capital segment represents the long-term management of co-investment ventures and other unconsolidated entities. See Note 2118 for further discussion of our business segments. Unless otherwise indicated, the notesNotes to the Consolidated Financial Statements apply to both the REITParent and the Operating Partnership. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the REITParent and Operating Partnership collectively.
As
For each share of common stock or preferred stock the Parent issues, the Operating Partnership issues a corresponding common or preferred partnership unit, as applicable, to the Parent in exchange for the contribution of the proceeds from the stock issuance. At December 31, 2013,2016, the REITParent owned an approximate 99.65%97.42% common general partnership interest in the Operating Partnership and 100% of the preferred units.units in the Operating Partnership. The remaining approximate 0.35%2.58% common limited partnership interests, which include 8.9 million Class A common limited partnership units (“Class A Units”) in the Operating Partnership, are owned by non-affiliatedunaffiliated investors and certain current and former directors and officers of the REIT. Parent. Each partner’s percentage interest in the Operating Partnership is determined based on the number of Operating Partnership units held, including the number of Operating Partnership units into which Class A Units are convertible, compared to total Operating Partnership units outstanding at each period end and is used as the basis for the allocation of net income or loss to each partner. At the end of each reporting period, a capital adjustment is made in the Operating Partnership to reflect the appropriate ownership interest for each of the common unitholders. These adjustments are reflected in the line items Reallocation of Equity in the Consolidated Statement of Equity and Reallocation of Capital in the Consolidated Statement of Capital.
As the sole general partner of the Operating Partnership, the REITParent has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. WePartnership and we operate the REITParent and the Operating Partnership as one enterprise. The management of the REITParent consists of the same members as the management of the Operating Partnership. These members are officers of the REITParent and employees of the Operating Partnership or one of its direct or indirect subsidiaries. As general partner with control of the Operating Partnership, the REITParent consolidates the Operating Partnership for financial reporting purposes, andPartnership. Because the REIT does not haveParent’s only significant assets other thanasset is its investment in the Operating Partnership. Therefore,Partnership, the assets and liabilities of the REITParent and the Operating Partnership are the same on their respective financial statements.
On June 3, 2011, AMB Property Corporation (“AMB”) and AMB Property, L.P. completed the merger contemplated by the Agreement and Plan of Merger with ProLogis, a Maryland real estate investment trust (“ProLogis”) and its subsidiaries (the “Merger”). Following the Merger, AMB changed its name to Prologis, Inc. AMB was the legal acquirer and ProLogis was the accounting acquirer. As such, in the Consolidated Financial Statements the historical results of ProLogis were included for the pre-Merger period and the combined results were included subsequent to the Merger. See Note 3 for further discussion on the Merger.
Information with respect to the square footage, number of buildings and acres of land is unaudited.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation. The accompanying consolidated financial statementsConsolidated Financial Statements are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and are presented in our reporting currency, the U.S. dollar. All material intercompany transactions with consolidated entities have been eliminated.
We consolidate all entities that are wholly owned and those in which we own less than 100% of the equity but control, as well as any variable interest entities in which we are the primary beneficiary. We evaluate our ability to control an entity and whether the entity is a variable interest entity and we are the primary beneficiary through consideration of substantive terms of the arrangement to identify which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity.
For entities that are not defined as variable interest entities (“VIEs”), we first consider whether Prologis iswe are the general partner or the limited partner (or the equivalent in such investments whichthat are not structured as partnerships). We consolidate entities in which we are the general partner and the limited partners in such entities do not have rights whichthat would preclude control. For entities in which we are the general partner but do not control the entity as the other partners hold substantive participating rights and/or kick-out rights, we apply the equity method of accounting is applied since as the general partner we have the ability to influence the venture. For ventures for which we are a limited partner or our investment is in an entity that is not structured similar to a partnership, we consider factors such as ownership interest, voting control, authority to make decisions, and contractual and substantive participating rights of the partners. In instances where the factors indicate that we control the venture, we consolidate the entity.
Reclassifications.Adjustments and Reclassifications. Certain amounts included in the consolidated financial statementsConsolidated Financial Statements for 20122015 and 20112014 have been reclassified to conform to the 20132016 financial statement presentation.
Use of Estimates. The accompanying consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as ofat the date of the financial statements, and revenuerevenues and expenses during the reporting
60
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
period. Our actual results could differ from those estimates and assumptions. Although we believe the assumptions and estimates we made are reasonable and appropriate, as discussed in the applicable sections throughout thesethe Consolidated Financial Statements, different assumptions and estimates could materially impact our reported results.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Foreign Operations. The U.S. dollar is the functional currency for our consolidated subsidiaries and unconsolidated entities operating in the United StatesU.S. and Mexico and certain of our consolidated subsidiaries that operate as holding companies for foreign investments. The functional currency for our consolidated subsidiaries and unconsolidated entities operating in countries other than the United StatesU.S. and Mexico is the principal currency in which the entity’s assets, liabilities, income and expenses are denominated, which may be different from the local currency of the country of incorporation or the country where the entity conducts its operations.
The functional currencies of our consolidated subsidiaries and unconsolidated entities generally include the Brazilian real, British pound sterling, Canadian dollar, Chinese renminbi, euro, Japanese yen and Singapore dollar. We are parties totake part in business transactions denominated in these and other currencies.local currencies where we operate.
For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate their financial statements into the U.S. dollarsdollar at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect as ofat the balance sheet date. The resulting translation adjustments are included in theAccumulated Other Comprehensive Loss(“AOCI”) in the Consolidated Balance Sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period and income statement accounts that represent significant non-recurringnonrecurring transactions are translated at the rate in effect as ofat the date of the transaction. We translate our share of the net earnings or losses of our unconsolidated entities whose functional currency is not the U.S. dollar at the average exchange rate for the period.
We and certain of our consolidated subsidiaries have intercompany and third partythird-party debt that is not denominated in the entity’s functional currency. When the debt is remeasured against the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in results of operations, unless it is intercompany debt that is deemed to be long-term in nature and then the adjustment is reflected as a cumulative translation adjustment inAccumulated Other Comprehensive LossAOCI.
We are subject to foreign currency risk due to potential fluctuations in exchange rates between certain foreign currencies and the U.S. dollar. A significant change in the value of the foreign currency of one or more countries where we have a significant investment would have an effect on our reported results of operations and financial position. Although we attempt to mitigate adverse effects by borrowing under debt agreements denominated in the same functional currency as the investment, and when deemed appropriate through the use of derivative contracts, there can be no assurance that those attempts to mitigate foreign currency risk will be completely successful.
Business Combinations. When we acquire a business, which includes an operating property, we record the acquisition at “full fair value.” Transaction costs related to the acquisition of a business are expensed as incurred. Generally, our acquisitions are of operating properties that meet the definition of a business. The transaction costs related to the acquisition of land, asset acquisitions, and the formation of equity method investments continue to be capitalized, as these are not considered to be business combinations.
When we acquire a business or individual operating properties, with the intention to hold the investment for the long-term,we allocate the purchase price to the various components of the acquisition based uponon the fair value of the acquired assets and liabilities.assumed liabilities, including an allocation to the individual buildings acquired. We generally acquire operating properties that meet the definition of a business and we expense transaction costs as incurred. The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not to exceed one year. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. A gain may be recognized to the extent the purchase price is less than the fair value of net tangible and intangible assets acquired.
When we obtain control of an unconsolidated entity, we account for the acquisition of the entity in accordance with the guidance for a business combination achieved in stages. We measureremeasure our previously held interest in the unconsolidated entity at its acquisition-date fair value and recognize the resulting gain or loss, if any, in earnings at the acquisition date.
We allocate the purchase price using primarily levelLevel 2 and levelLevel 3 inputs (further defined inFair Value Measurements) below) as follows:
Investments in Real Estate Properties. Industrial We value operating properties are valued as if vacant.vacant. We estimate fair value generally by applying an income approach methodology using a discounted cash flow analysis. Key assumptions in the discounted cash flow analysis include origination costsmarket rents, growth rates and discount and capitalization rates. DiscountWe determine discount and capitalization rates are determined by market and based on recent appraisals, transactions and other market data. The fair value of land is generally based on relevant market data, such as a comparison of the subject site to similar parcels that have recently been sold or are currently being offered on the market for sale.
Investments in Unconsolidated Entities. We estimate the fair value of the entity by using similar valuation methods as those used for consolidated real estate properties and debt. We multiply the estimated net asset value of the entity by our ownership percentage to estimate the fair value of our investment.
Lease IntangiblesPROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Intangible Assets.. We determine the portion of the purchase price related to intangible assets and liabilities as follows:
|
Above and Below Market Leases. We recognize an asset or liability for acquired in-place leases with favorable or unfavorable rents based on our estimate of current market rents of the applicable markets. The value is recorded in either Other Assets or Other Liabilities, as appropriate, and is amortized over the term of the respective leases, including any bargain renewal options, to rental revenues.
|
Foregone Rent. We calculate the value of the revenue and recovery of costs foregone during a reasonable lease-up period, as if the space was vacant, in each of the applicable markets. The values are recorded in Other Assets and amortized over the remaining life of the respective leases to amortization expense.
Debt. The fair value of debt is estimated based on contractual future cash flows discounted using borrowing spreads and market interest rates that would be available to us for the issuance of debt with similar terms and remaining maturities. In the case of publicly traded debt, we estimate the fair value is estimated based on available market data. Any discount or premium to the principal amount is included in the carrying value and amortized to interest expense over the remaining term of the related debt using the effective interest method to interest expense.method.
Noncontrolling Interest.Interests. We estimate the portion of the fair value of the net assets owned by third parties based on the fair value of the consolidated net assets, principally real estate properties and debt.
Working Capital. TheWe estimate fair value of all other assumedacquired assets and assumed liabilities is based on the best information available.
Fair Value Measurements. The objective of fair value is to determine the price that would be received uponon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). We estimate fair value using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize uponon disposition. The fair value hierarchy consists of three broad levels:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 — Unobservable inputs for the asset or liability.
Recurring Fair Value Measurements. Long-Lived Assets.We estimate the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes as follows:
Debt. We estimate the fair value of our senior notes and exchangeable senior notes for disclosure purposes based on quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimate the fair value of our credit facilities, term loans, secured mortgage debt and assessment bonds by discounting the future cash flows using rates and borrowing spreads currently available to us (Level 3).
Derivatives. We determine the fair value of our derivative instruments using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. We determine the fair values of our interest rate swaps using the market standard methodology of netting the discounted future fixed cash receipts or payments and the discounted expected variable cash payments. We base the variable cash payments on an expectation of future interest rates, or forward curves, derived from observable market interest rate curves. We base the fair values of our net investment hedges on the change in the spot rate at the end of the period as compared with the strike price at inception.
We incorporate credit valuation adjustments to appropriately reflect both our nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy. Although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, we assess the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.
Nonrecurring Fair Value Measurements. Assets measured at fair value on a nonrecurring basis generally consist of real estate assets and investments in and advances to unconsolidated entities that were subject to impairment charges related to our change of intent to sell the investments and through our recoverability analysis discussed below. We estimate fair value based on expected sales prices in the market (Level 2).
Real Estate Assets. Real estate assets are carried at depreciated cost. CostsWe capitalize costs incurred in developing, renovating, rehabilitating and improving real estate assets are capitalized as part of the investment basis of real estate assets. We expense costs for repairs and maintenance of the real estate assets. Costs of making repairs and maintaining real estate assets are expensed as incurred.
During the land development and construction periods of qualifying projects, we capitalize interest costs, insurance, real estate taxes and general and administrative costs of the personnel performing the development, renovation, and rehabilitation; if such costs are incremental and identifiable to a specific activity to getready the asset ready for its intended use. CapitalizedWe capitalize transaction costs are included inrelated to the investment basis
62
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
acquisition of real estate assets.land for future development. We capitalize costs incurred to successfully originate a lease that resultsresult directly from and are essential to acquire that lease, including internal costs that are incremental and identifiable as leasing activities. Leasing costs that meet the requirements for capitalization are presented as a component of other assets.Other Assets.
The
We charge the depreciable portions of real estate assets are charged to depreciation expense on a straight-line basis over the respective estimated useful lives. Depreciation commences atwhen the asset is ready for its intended use, which we define as the earlier of stabilization (defined as 90%(90% occupied) or one year after completion of construction. We generally use the following useful lives: 5 to 7 years for capital improvements, 10 years for standard tenant improvements, 25 years for depreciable land improvements, on developed buildings, 30 years for operating properties acquired and 40 years for operating properties we develop. Investments that are locatedWe depreciate building improvements on tarmac; which is land owned by federal, state or local airport authorities, andparcels subject to ground leases; are depreciatedleases over the shorter of the investmentestimated building improvement life or the contractual term of the underlying ground lease. Capitalized leasing costs are amortized over the estimated remaining lease term. Our weighted average lease term on leases signed during 2016, based on square feet for all leases, in effect at December 31, 2013, was sevenfive years.
We assess the carrying values of our respective long-livedreal estate assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. RecoverabilityWe measure the recoverability of the assets is measuredasset by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review our assets for recoverability, we consider current market conditions,
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
as well as our intent with respect to holding or disposing of the asset. Fair value is determined through various valuation techniques; including discounted cash flow models, quoted market values, and third party appraisals; where considered necessary. If our analysis indicates that the carrying value of the long-lived assetreal estate property is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. For assets we intend to sell, we compare the carrying value of the property to its estimated fair value based on estimated selling price less costs to sell and recognize an impairment for any excess.
We estimate the future undiscounted cash flows and fair value based on our intent as follows:
for |
The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan we use to manage our underlying business. However, assumptions and estimates about future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions and our ultimate investment intent that occur subsequent to our impairment analyses could impact these assumptions and result in future impairment of our real estate properties that we intend to hold long-term; including land held for development, properties currently under development and operating buildings; recoverability is assessed based on the estimated undiscounted future net rental income from operating the property and the terminal value, including anticipated costs to develop;
for real estate properties we intend to sell, including properties currently under development and operating buildings; recoverability is assessed based on proceeds from disposition that are estimated based on future net rental income of the property, expected market capitalization rates and anticipated costs to develop;
for land parcels we intend to sell, recoverability is assessed based on estimated proceeds from disposition; and
for costs incurred related to the potential acquisition of land or the recognitiondevelopment of a gainreal estate property, recoverability is assessed based on the probability that the acquisition or loss at time of disposal.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. We have $25.3 million of goodwill associated with our Investment Management segment in Europe. We perform an annual review of impairmentdevelopment is likely to occur at the reporting unit level during the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. We have an option to make a qualitative assessment of a reporting unit’s goodwill for impairment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required.measurement date.
Assets Held for Sale and Discontinued Operations.or Contribution. We classify a component of our business or property as held for sale or contribution when certain criteria are met, which are in accordance with GAAP. Assets classified as held for sale are expected to be sold to a third party and assets classified as held for contribution are newly developed assets we intend to contribute to an unconsolidated co-investment venture or to a third party within twelve months. At such time, the respective assets and liabilities are presented separately onin the Consolidated Balance Sheets and depreciation is no longer recognized. Assets held for sale or contribution are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets. Discontinued operations represent a component of an entity that has either been disposed of or is classified as held for sale and both the operations and cash flows of the component have been or will be eliminated from ongoing operations of the entity as a result of the disposal transaction and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. The results of operations of a component of our business or properties that have been classified as discontinued operations are also reported as discontinued operations for all periods presented.
Assets held for sale and properties disposed of are considered discontinued operations if sold to a third party. Properties contributed or sold to entities in which we maintain an ownership interest, act as manager or account for under the equity method are not considered discontinued operations due to our continuing involvement with the properties.
Investments in Unconsolidated Entities. Our We present our investments in certain entities are presented under the equity method. TheWe use the equity method is used when we have the ability to exercise significant influence over operating and financial policies of the venture but do not have control of the entity. Under the equity method, we initially recognize these investments (including advances) are initially recognized in the balance sheet at our cost, including formation costs and arenet of deferred gains from the contribution of properties, if applicable. We subsequently adjustedadjust the accounts to reflect our proportionate share of net earnings or losses recognized and accumulated other comprehensive income or loss, distributions received, deferred gains from the contribution of propertiescontributions made and certain other adjustments, as appropriate. When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we conclude it is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value.
Notes Receivable Backed by Real Estate. We hold certain investments in debt securities that are backed by real estate assets. We regularly review the creditworthiness of the entities with which we hold the note agreements and, if necessary, reduce the notes receivable balance by estimating an allowance for amounts that may become uncollectible in the future. The notes are also evaluated individually for impairment. We consider a loan to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the agreement.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Cash and Cash Equivalents. We consider all cash on hand, demand deposits with financial institutions and short-term highly liquid investments with original maturities of three months or less to be cash equivalents. Our cash and cash equivalents are financial instruments that are exposed to concentrations of credit risk. We invest our cash with high-credit quality institutions. Cash balances may be invested in money market accounts that are not insured. We have not realized any losses in such cash investments or accounts and believe that we are not exposed to any significant credit risk.
Restricted Cash. Restricted cash consists primarily of escrows under secured mortgage agreements for taxes, insurance and certain other reserve requirements relating to the underlying collateral. In certain limited circumstances, the lender retains control over cash received for rental income for a period of three to six months prior to releasing it to us.
Derivative Financial Instruments. We may use derivative financial instruments for the purpose of managing certain foreign currency exchange rate and interest rate risk. We reflectdo not use derivative financial instruments for trading or speculative purposes. All of our derivative financial instruments are customized derivative transactions and are not exchange-traded. Management reviews our hedging program, derivative positions, and overall risk management strategy on a regular basis. We only enter into transactions that we believe will be highly effective at offsetting the underlying risk. Our use of derivatives involves the risk that counterparties may default on a derivative contract. We establish exposure limits for each counterparty to minimize this risk and provide counterparty diversification. Substantially all of our derivative exposures are with counterparties that have long-term credit ratings of single-A or better. We enter into master agreements with counterparties that generally allow for netting of certain exposures; thereby significantly reducing the
63
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
actual loss that would be incurred should a counterparty fail to perform its contractual obligations. To mitigate pre-settlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. On the basis of these factors, we consider the risk of counterparty default to be minimal.
We recognize all derivatives at fair value within the line items Other Assets or Other Liabilities, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and recorddisclosure. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives are designated as, and qualify as, hedging instruments. For derivatives that will be accounted for as hedging instruments, at inception of the transaction, we formally designate and document the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, we formally assess both at inception and at least quarterly thereafter, the effectiveness of our hedging transactions. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and hedges of net investments in foreign operations are recorded in AOCI. The ineffective portion of a derivative financial instrument's change in fair value, if any, is immediately recognized in earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures hedged, fluctuations in the value of the derivative instruments will generally be offset by changes in the fair values or cash flows of the underlying exposures being hedged. We also use derivatives that are not designated as hedges (and may not meet the hedge accounting requirements) to manage certain risk. The changes in fair values of derivatives that were not designated or did not qualify as hedging instruments are immediately recognized in earnings. For cash flow hedges, we reclassify changes in the fair value of these derivatives eachinto the applicable line item in the Consolidated Statements of Income in which the hedged items are recorded in the same period that the underlying hedged items affect earnings.
Foreign Currency. We primarily manage our foreign currency exposure by borrowing in the currencies in which we invest. In certain circumstances, we may issue debt in a currency that is not the same functional currency of the borrowing entity to offset the translation and economic exposures related to our net investment in international subsidiaries. To mitigate the impact in earnings unless specificof translation from the fluctuations in exchange rates, we may designate the debt as a nonderivative financial instrument hedge. We also hedge accounting criteria are met. To qualify for hedge accounting treatment, generally theour investments in certain international subsidiaries using foreign currency derivative instruments used for risk management purposes must effectively reduce the risk exposure that they are designed to hedge (primarily interest rate swaps and netcontracts (net investment hedges) to offset the translation and ifeconomic exposures related to our investments in these subsidiaries by locking in a derivative instrument is utilized to hedge an anticipated transaction, the anticipated transaction must be probable of occurring. Derivative instruments meeting these hedging criteria are formally designated as hedgesforward exchange rate at the inception of the contract or athedge. To the redesignation process, if applicable.
The unrealized gains and losses resulting fromextent we have an effective hedging relationship, we report all changes in fair value of an effective hedgethe hedged portion of the nonderivative financial instruments and net investment hedges in equity in the foreign currency translation component of AOCI. These amounts offset the translation adjustments on the underlying net assets of our foreign investments, which we also record in AOCI. The foreign currency translation changes of the portion of the nonderivative financial instruments that are not designated as hedges are recorded inAccumulated Other Comprehensive Lossfor the REIT and Partners’ Capitalfor the Operating Partnership. For hedges related to issued debt, these amounts are amortized to earnings over the remaining term of the hedged items. Changes in fair value of a net investment hedge remain in equity until the investment is substantially liquidated. The ineffective portion of a hedge, if any, is immediately recognizeddirectly in earnings towithin the extent that the change in value of the derivative instrument does not perfectly offset the change in value of theline item being hedged. We estimate the fair value of our financial instruments through a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Primarily, we use quoted market prices or quotes from brokers or dealers for the same or similar instruments. These values represent a general approximation of possible value and may never actually be realized.
Exchangeable Debt. For the convertible notes we issued in 2008 and 2007, we were required to separate the accounting for the debt and equity components as we had the ability to settle the conversion of the debt and conversion spread, at our option, in cash, common stock, or a combination of cash and stock. The liability and equity components of convertible debt were accounted for separately. The value assigned to the debt component was the estimated fair value at the date of issuance of a similar bond without the conversion feature, which resulted in the debt being recorded at a discount. The resulting debt discount was amortized over the estimated remaining life of the debt as additional non-cash interest expense. The carrying amount of the equity component was determined by deducting the fair value of the debt component from the initial proceeds of the convertible debt instrument as a whole. Under the terms of the issuance of the 2010 convertible notes, we were required to settle the conversion by issuance of common shares and therefore this accounting did not apply to these notes.
In connection with the Merger and the debt exchange offer in June 2011, all issuances of our convertible notes became exchangeable notes issued by the Operating Partnership that are exchangeable into common stock of the REIT. As a result, the accounting for the exchangeable senior notes required us to separate the fair value of the derivative instrument (exchange feature) from the debt instrument and account for it separately as a derivative. At each reporting period, we adjust the derivative instrument to fair value with the adjustment being recorded in earnings asForeign Currency Exchange and Derivative Gains (Losses), Net in the Consolidated Statements of Income. We recognize ineffectiveness, if any, in earnings at the time the ineffectiveness occurred.
We may use foreign currency option contracts, including puts, calls and collars to mitigate foreign currency exchange rate risk associated with the translation of our projected earnings of our international subsidiaries, principally in Canada, Europe and Japan. Put option contracts provide us with the option to exchange foreign currency for U.S. dollars at a fixed exchange rate if the foreign currency were to depreciate against the U.S. dollar. Call option contracts create an obligation to exchange foreign currency for U.S. dollars at a fixed exchange rate if the foreign currency were to appreciate against the U.S. dollar. Collar option contracts combine the put and call options into one contract to effectively lock in a range around the rate at which net operating income of our subsidiaries will be translated into U.S. dollars. Foreign currency option contracts are not designated as hedges as they do not meet hedge accounting requirements. Changes in the fair value of non-hedge designated derivatives are recorded directly in earnings within the line item Foreign Currency and Derivative Gains (Losses), Net.
We may also use foreign currency forwards designed as cash flow hedges to mitigate foreign currency exchange rate risk associated with payments in a currency that is not the functional currency of our foreign subsidiaries. To the extent we have an effective hedging relationship, we report all changes in fair value of the hedged portion of the foreign currency forwards cash flow hedges in AOCI. We amortizerecognize ineffectiveness, if any, in earnings at the discounttime the ineffectiveness occurred.
Interest Rate. Our interest rate risk management strategy is to limit the impact of future interest rate changes on earnings and cash flows as well as to stabilize interest expense and manage our exposure to interest rate movements. We primarily accomplish this by issuing fixed rate debt with staggering maturities. We may enter into interest rate swap agreements, which allow us to borrow on a fixed rate basis for longer-term debt issuances. We typically designate our interest rate swap and interest rate cap agreements as cash flow hedges as these derivative instruments may be used to manage the interest rate risk on potential future debt issuances or to fix the interest rate on variable rate debt issuances. The maximum length of time that we hedge our exposure to future cash flows is typically 10 years or less. We have entered into interest rate swap agreements that allow us to receive variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the remaining termlife of our agreements without the exchange of the exchangeable notes.underlying notional amount.
We report the effective portion of the gain or loss on the derivative as a component of Noncontrolling Interests.AOCI, and reclassify it to Interest Expense in the Consolidated Statements of Income over the corresponding period of the hedged item. To the extent the hedged debt is paid off early, we write off the remaining balance in AOCI and we recognize the amount in Interest Expense in the Consolidated Statements of Income. We recognize losses on a derivative representing hedge ineffectiveness in Interest Expense at the noncontrollingtime the ineffectiveness occurred.
64
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Costs of Raising Capital. We treat costs incurred in connection with the issuance of common and preferred stock as a reduction to additional paid-in capital. We capitalize costs incurred in connection with the issuance of debt. Costs related to our credit facilities are included in Other Assets and costs related to all our other debt are recorded as a direct reduction of the liability. Costs associated with debt modifications are expensed when incurred.
AOCI. For the Parent, we include AOCI as a separate component of stockholders' equity in the Consolidated Balance Sheets. For the Operating Partnership, AOCI is included in partners’ capital in the Consolidated Balance Sheets. Any reference to AOCI in this document is referring to the component of stockholders’ equity for the Parent and partners’ capital for the Operating Partnership.
Noncontrolling Interests. Noncontrolling interests inrepresent the share of consolidated entities that we consolidate but of which we do not own 100%owned by usingthird parties. We recognize each noncontrolling holder’s respective share of the estimated fair value of the net assets as ofat the date of formation or acquisition. Noncontrolling interest isinterests are subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions to noncontrolling holders and the noncontrolling holders�� proportionatetheir share of the net earnings or losses of each respective consolidated entity. We allocate net income to noncontrolling interests based on the weighted-average ownership interest during the period. The net income that is not attributable to us is reflected in the line item Net Earnings Attributable to Noncontrolling Interests. We do not recognize a gain or loss on transactions with a consolidated entity in which we do not own 100% of the equity, but we reflect the difference in cash received or paid from the noncontrolling interests carrying amount as paid-in-capital.
Certain limited partnership interests issued by us in connection with the formation of a real estate partnership and as consideration in a business combination are exchangeable into our common stock. Common stock issued upon exchange of a holder’s noncontrolling interest is accounted for at ourthe carrying value of the surrendered noncontrollinglimited partnership interest.
Costs of Raising Capital. Costs incurred in connection with the issuance of both common stock and preferred stock are treated as a reduction to additional paid-in capital. Costs incurred in connection with the issuance or renewal of debt are capitalized in other assets, and amortized to interest expense over the term of the related debt.
Accumulated Other Comprehensive Income (Loss). For the REIT, we includeAccumulated Other Comprehensive Loss as a separate component of stockholders’ equity in the Consolidated Balance Sheets. For the Operating Partnership,Accumulated Other Comprehensive Loss is included in partners’ capital in the Consolidated Balance Sheets. Any reference toAccumulated Other Comprehensive Lossin this document is referring to the component of stockholders’ equity for the REIT and partners’ capital for the Operating Partnership.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Revenue Recognition.
Revenue Recognition.
Rental Income.Revenues. We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term. Generally, under the terms of our leases, the majority of our rental expenses are recovered from our customers. We reflect amounts recovered from customers as revenuerevenues in the period that the applicable expenses are incurred. AWe make a provision for possible loss is made if the collection of a receivable balance is considered doubtful.
Strategic Capital Revenues.Investment Management Revenue. Investment management revenue includes Strategic capital revenues include revenues we earn from the management services we provide to unconsolidated entities and certain third parties.entities. These fees are recognized as earned anddetermined in accordance with the terms specific to each arrangement and may include property and asset management fees or transactional fees for leasing, acquisition, development, construction, financing, legal and tax services provided. We may also earn promote paymentsincentive returns (called “promotes”) based on third partythird-party investor returns over time, which may be during the duration of the venture or at the time of liquidation. We recognize these fees when they are earned, fixed and determinable. We report these fees in Strategic Capital Revenues. The fees we earn to develop properties within these ventures are reflected in Development Management and Other Revenues on a percentage of completion basis.
We also earned fees from ventures that we consolidate. Upon consolidation these fees were eliminated from our earnings and the third party share of these fees were recognized as a reduction of Net Earnings Attributable to Noncontrolling Interests.
Gains (Losses) on DispositionDispositions of Investments in Real Estate. Gains We recognize gains on the disposition of real estate are recorded when the recognition criteria have been met, generally at the time the risks and rewards and title have transferred and we no longer have substantial continuing involvement with the real estate sold. LossesWe recognize losses from the disposition of real estate are recognized when known.
When we contribute a property to an unconsolidated entity in which we have an ownership interest, we do not recognize a portion of the gain realized. If a loss is realized, it is recognized when known. The amount of gain not recognized, based on our ownership interest in the entity acquiring the property, is deferred by recognizing a reduction to our investment in the applicable unconsolidated entity. We adjust our proportionate share of net earnings or losses recognized in future periods to reflect the entities’ recorded depreciation expense as if it were computed on our lower basis in the contributed properties rather than on the entity’s basis.
When a property that we originally contributed to an unconsolidated entity is disposed of to a third party, we recognize the amount of the gain we had previously deferred, along with our proportionate share of the gain recognized by the unconsolidated entity. During periods whenIf our ownership interest in an unconsolidated entity decreases and the decrease is expected to be permanent, we recognize the amounts relating to previously deferred gains to coincide with our new ownership interest.
Rental Expenses. Rental expenses primarily include the cost of our property management personnel, utilities, repairs and maintenance, property insurance and real estate taxes.
Strategic Capital Expenses.Investment Management Expenses. These costs include the property management Strategic capital expenses associated with the property-level management of the properties owned by our unconsolidated entities andgenerally include the direct expenses associated with the asset management of the unconsolidated entities.co-investment ventures provided by our employees who are assigned to our Strategic Capital segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by property management personnel who are assigned to our Real Estate Operations segment. These individuals perform the property-level management of the properties in our owned and managed portfolio, which include properties we consolidate and those we manage that are owned by the unconsolidated co-investment ventures. We allocate the costs of our property management to the properties we
65
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Stock-Basedconsolidate (included in Rental Expenses) and the properties owned by the unconsolidated co-investment ventures (included in Strategic Capital Expenses) by using the square feet owned by the respective portfolios.
Equity-Based Compensation. We account for stock-basedequity-based compensation by measuring the cost of employee services received in exchange for an award of an equity instrument based on the fair value of the award on the grant date. We recognize the cost of the entire award on a straight-linedstraight-line basis over the period during which an employee is required to provide service in exchange for the award, generally the vesting period.
Income Taxes. The REIT commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust under the Internal Revenue Code, and believes the current organization and method of operation will enable the REIT to maintain its status as a real estate investment trust. Under the Internal Revenue Code, real estate investment trustsREITs are generally not required to pay federal income taxes if they distribute 100% of their taxable income and meet certain income, asset and stockholder tests. If we fail to qualify as a real estate investment trustREIT in any taxable year, we will be subject to federal income taxes at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a real estate investment trustREIT for the four subsequent taxable years. Even as a real estate investment trust,REIT, we may be subject to certain state and local taxes on our own income and property, and to federal income and excise taxes on our undistributed taxable income.
We have elected taxable real estate investment trustREIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. This allows us to provide services that would otherwise be considered impermissible for real estate investment trusts.REITs. Many of the foreign countries in which we have operations do not recognize real estate investment trustsREITs or do not accord real estate investment trustREIT status under their respective tax laws to our entities that operate in their jurisdiction. In the United States,U.S., we are taxed in certain states in which we operate. Accordingly, we recognize income tax expense for the federal and state income taxes incurred by our TRSs, taxes incurred in certain states and foreign jurisdictions, and interest and penalties associated with our unrecognized tax benefit liabilities.
We evaluate tax positions taken in the financial statements on a quarterly basisConsolidated Financial Statements under the interpretation for accounting for uncertainty in income taxes. As a result of this evaluation, we may recognize a tax benefit from an uncertain tax position only if it is “more-likely-than-not”more likely than not that the tax position will be sustained on examination by taxing authorities.
Deferred
We recognize deferred income taxes are recognized in certain taxable entities. For federal income tax purposes, certain acquisitions have been treated as tax-free transactions resulting in a carry-over basis in assets and liabilities. For financial reporting purposes and in accordance with purchase accounting, we record all of the acquired assets and assumed liabilities at the estimated fair value at the date of acquisition. For our taxable subsidiaries, including certain international jurisdictions, we recognize the deferred income tax liabilities that represent the tax effect of the difference between the tax basis carried over and the fair value of the tangible and intangible assets at the date of acquisition. Any subsequent increases or decreases to the deferred income tax liability recorded in connection with these acquisitions, related to tax uncertainties acquired, are reflected in earnings.
If taxable income is generated in these subsidiaries, we recognize a benefit in earnings as a result of the reversal of the deferred income tax liability previously recorded at the acquisition date and we record current income tax expense representing the entire current income tax liability. If the reversal of the deferred income tax liability results from a sale or contribution of assets, the classification of the reversal to the Consolidated Statement of Income is based on the taxability of the transaction. We record the reversal to deferred income tax benefit as a taxable transaction if we dispose of the asset. We record the reversal as Gains on Dispositions of Investments in Real Estate and Revaluation of Equity Investments Upon Acquisition of a Controlling Interest, Net as a non-taxable transaction if we dispose of the asset along with the entity that owns the asset.
Deferred income tax expense is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes) and the utilization of tax net operating
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
losses (“NOL”) generated in prior years that had been previously recognized as deferred income tax assets. AWe provide for a valuation allowance for deferred income tax assets is provided if we believe all or some portion of the deferred income tax asset may not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances that causes a change in the estimated realizability ofability to realize the related deferred income tax asset is included in deferred tax expense.
Environmental Costs. We incur certain environmental remediation costs, including cleanup costs, consulting fees for environmental studies and investigations, monitoring costs, and legal costs relating to cleanup, litigation defense, and the pursuit of responsible third parties. CostsWe expense costs incurred in connection with operating properties and properties previously sold are expensed. Costssold. We capitalize costs related to undeveloped land are capitalized as development costs. Costscosts and include any expected future environmental liabilities at the time of acquisition. We include costs incurred for properties to be disposed are included in the cost of the properties upon disposition. We maintain a liability for the estimated costs of environmental remediation expected to be incurred in connection with undeveloped land, operating properties and properties previously sold that we adjust as appropriate as information becomes available.
New Accounting Pronouncements.
New Accounting Standards Adopted
In March 2013,August 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that provides guidance for areas in which there is diversity in how certain cash receipts and payments are presented and classified in the statements of cash flows. The update clarifies the classification methodology within the statements of cash flows for eight specific topics. In 2016, we early adopted the standard in its entirety on a retrospective basis, and we determined that the only clarification to significantly impact us was the classification of distributions received from equity method investments. The update allows for the election to classify distributions
66
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
received from equity method investments based on either a cumulative earnings approach or a nature of distribution approach. We have elected the nature of distribution approach, in which cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that are generated from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). We adopted this approach based on the accounting for currency translation adjustment (“CTA”) when a parent sells or transfers part of its ownership interest in a foreign entity. When a company sells a subsidiary or group of assets that constitute a business while maintaining ownershipinformation available to us to determine the nature of the foreign entity in which those assets or subsidiary reside,underlying activity that generated the distributions from unconsolidated entities. As a complete or substantially complete liquidationresult of our adoption of this standard, we reclassified $140.6 million and $177.0 million of distributions from our unconsolidated entities into Net Cash Provided by Operating Activities that was previously reported as Net Cash Provided by (Used in) Investing Activities for the foreign entity is required in order for a parent entity to release CTA to earnings. However, for a company that sells all or part of its ownership interest in a foreign entity, CTA is released upon the loss of a controlling financial interest in a consolidated foreign entity or partial sale of an equity method investment in a foreign entity. For step acquisitions, the CTA associated with the previous equity-method investment is fully released when control is obtainedyears ended December 31, 2015, and consolidation occurs. The guidance is effective for us on January 1, 2014, and we do not expect the guidance to have a material impact on the Consolidated Financial Statements.respectively.
In February 2013,March 2016, the FASB issued an accounting standard update that requires disclosureamends the stock compensation requirements in existing GAAP. The update simplifies certain aspects of accounting for share-based payment transactions, including income tax consequences, statutory tax withholding requirements, forfeitures and classification of taxes paid to a tax authority by us when we withhold shares to cover employee withholding tax payments for certain stock compensation plans in the effectstatements of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. The new guidance was effective for us on January 1, 2013, for annual and interim periods.cash flows. We adopted the standard in its entirety on a retrospective basis in 2016. As a result of our adoption of this standard, aswe reclassified payments of January 1, 2013,$12.3 million and it did not have a material impact on$13.0 million from Net Cash Provided by Operating Activities to Net Cash Provided by (Used in) Financing Activities for the Consolidated Financial Statements.years ended December 31, 2015, and 2014, respectively.
In December 2011,February 2015, the FASB issued an accounting standard update that requires disclosures about offsettingamends the consolidation requirements in existing GAAP. Under the update, all entities, including limited partnerships and related arrangements to enable financial statement users to evaluatesimilar legal entities, are now within the effect or potential effectscope of netting arrangements on an entity’s financial position, including rights of setoff associated with certain financial instruments and derivative instruments. In January 2013, the FASB clarified that theconsolidation guidance, applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria under GAAP or subject tounless a master netting arrangement or similar agreement.scope exception applies. We adopted this standard as ofon a modified retrospective basis on January 1, 2013,2016, and itthe adoption did not have a material impactsignificant effect on the Consolidated Financial Statements.Statements, however the Operating Partnership and certain of our consolidated co-investment ventures now qualify as VIEs under the new guidance, which required additional disclosures. See Note 12 for additional information about our VIEs.
New Accounting Standards Issued but not yet Adopted
In December 2011,January 2017, the FASB issued an accounting standard update to clarifythat clarifies the scopedefinition of current GAAP.a business. The update clarifiesadds further guidance that assists preparers in evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. We expect most of our acquisitions of operating properties and portfolios of operating properties to qualify as asset acquisitions under the real estate sales guidance appliesstandard which permits the capitalization of acquisition costs to the derecognitionbasis of in-substance real estate as a result of default on the subsidiary’s nonrecourse debt. Thatacquired buildings. This standard is even ifeffective for periods beginning after December 31, 2017, however we plan to adopt this standard in 2017 for the annual and interim reporting entity ceasesperiods beginning after December 31, 2016. We do not expect the adoption to have a controlling financial interest under the consolidation guidance, the reporting entity would continue to include the real estate, debt, and the results of the subsidiary’s operations in its consolidated financial statements until legal title to the real estate is transferred to legally satisfy the debt. We adopted this standard as of January 1, 2013, and it did not have anysignificant impact on the Consolidated Financial Statements.
MergerIn May 2014, the FASB issued an accounting standard that requires companies to use a five step model to determine when to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. We are evaluating each of AMBour revenue streams and ProLogisrelated accounting policy under the standard. Rental revenues and recoveries earned from leasing our operating properties will be evaluated with the adoption of the lease accounting standard (discussed below). Our evaluation under the revenue recognition standard also includes sales to third parties and unconsolidated co-investment ventures as well as recurring fees and promotes earned from our co-investment ventures. For sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of or accounting for these sales. Due to our continuing involvement through our equity ownership in our unconsolidated co-investment ventures, we are evaluating the accounting for sales to unconsolidated co-investment ventures under the standard. Additionally, while we do not expect changes in the recognition of recurring fees earned from the co-investment ventures, we are evaluating both the timing and measurement of promotes earned from co-investment ventures under the standard that may result in recognizing such fees when they are probable of being earned. The standard is effective for us on January 1, 2018. In addition to the recognition changes discussed above, expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to the standard. We expect to adopt the standard on a modified retrospective basis.
As discussed
In February 2016, the FASB issued an accounting standard that provides the principles for the recognition, measurement, presentation and disclosure of leases.
The accounting for lessors will remain largely unchanged from current GAAP; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and therefore this new standard may result in certain of these costs being expensed as incurred after adoption. This standard may also impact the timing, recognition and disclosures related to our rental recoveries from tenants earned from leasing our operating properties.
Under the standard, lessees apply a dual approach, classifying leases as either finance or operating leases. A lessee is required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months, regardless of their lease classification. Based on our real estate leases, we are a lessee on ground leases in certain markets and office space leases. Due to the length of the lease terms of certain ground leases, it is likely they will be classified as finance leases under the standard. At December 31, 2016, we have approximately 90 ground and office space leases that will require us to measure and record a right-of-use asset and a lease liability upon adoption of the standard. Details of our future minimum rental payments under these ground and office space leases are disclosed in Note 1, we completed the Merger on June 3, 2011. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger resulted in a reverse acquisition in which AMB was the “legal acquirer” because AMB issued its common stock to ProLogis shareholders and ProLogis was the “accounting acquirer” due to various factors, including the fact that ProLogis shareholders held the largest portion of the voting rights in the merged entity and ProLogis appointees represented the majority of the Board of Directors (“Board”). In the Consolidated Financial Statements, the period ended December 31, 2011, included the historical results of ProLogis for the entire period presented, and the results of the merged company for the period subsequent to the Merger.4.
67
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The standard is effective for us on January 1, 2019. We are assessing the practical expedients available for implementation under the standard. If the practical expedients are elected, we would not be required to reassess (i) whether an expired or existing contract meets the definition of a lease, (ii) the lease classification at the adoption date for expired or existing leases, and (iii) whether costs previously capitalized as initial direct costs would continue to be amortized. The standard will also require new disclosures within the notes accompanying our consolidated financial statements. We will continue to assess the method of adoption and the overall impact the adoption will have on the Consolidated Financial Statements.
As ProLogisNOTE 3. BUSINESS COMBINATIONS
KTR Capital Partners and Its Affiliates
On May 29, 2015, we acquired the high quality real estate assets and operating platform with high profile customers and comparable market composition to ours from KTR Capital Partners and its affiliates (“KTR”). The portfolio consisted of 315 operating properties, aggregating 59.0 million square feet, 3.6 million square feet of properties under development and land parcels that will support an estimated build out of 6.8 million square feet. The properties were acquired by our consolidated co-investment venture Prologis U.S. Logistics Venture (“USLV”), of which we own 55%. The transaction was funded through cash (which included the accounting acquirer,contribution of $2.3 billion from our venture partner and the calculationproceeds from the issuance of debt, as detailed in Note 9), the purchase price for accounting purposes is based onassumption of secured mortgage debt and the priceissuance of ProLogis4.5 million common shares and common shares ProLogis would have had to issue to achieve a similar ownership split between AMB stockholders and ProLogis shareholders. We estimated the fair value of the pre-combination portion of AMB’s share-based payment awards based on market data and,limited partnership units in the caseOperating Partnership. We incurred $24.7 million of stock options, we used a Black-Scholes model to estimate the fair value of these awards as of the Merger date. An adjustment was made to equity for the vested portion while the unvested portion will be expensed over the remaining service period. The purchase price allocation reflects aggregate consideration of approximately $5.9 billion, as calculated below (in millions, except price per share):acquisition costs that are included in Other Expenses during 2015.
ProLogis shares and limited partnership units outstanding at June 2, 2011 (60% of total shares of the combined company) | 571.4 | |||
Total shares of the combined company (for accounting purposes) | 952.3 | |||
|
| |||
Number of AMB shares to be issued (40% of total shares of the combined company) | 380.9 | |||
Multiplied by price of ProLogis common share on June 2, 2011 | $ | 15.21 | ||
|
| |||
Consideration associated with common shares issued | $ | 5,794.1 | ||
Add consideration associated with share based payment awards. | 62.4 | |||
|
| |||
Total consideration of the Operating Partnership | $ | 5,856.5 |
The allocation of the purchase price requires a significant amount of judgment. The allocation was based on our valuation, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities acquired. The purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations. The allocation of the purchase price was as follows (in millions):
Investments in real estate properties | $ | 8,197.6 | ||
Investments in and advances to unconsolidated entities | 1,592.3 | |||
Cash, accounts receivable and other assets | 691.3 | |||
Debt | (3,646.7) | |||
Accounts payable, accrued expenses and other liabilities | (420.5) | |||
Noncontrolling interests | (557.5) | |||
|
| |||
Total purchase price of the Operating Partnership | $ | 5,856.5 |
Acquisition of ProLogis European Properties
During the second quarter of 2011, we increased our ownership of ProLogis European Properties (“PEPR”) through open market purchases and a mandatory tender offer. In May 2011, we settled our mandatory tender offer that resulted in the acquisition of an additional 96.5 million ordinary units and 2.7 million convertible preferred units of PEPR. During all of the second quarter of 2011, we made aggregate cash purchases totaling €715.8 million ($1.0 billion). We funded the purchases through borrowings under our global line of credit and a new €500 million bridge facility, which was subsequently repaid with proceeds from an equity offering in June 2011.
Upon completion of the tender offer, we met the requirements to consolidate PEPR. In accordance with the accounting rules for business combinations, we marked our equity investment in PEPR from its carrying value to fair value of approximately €486 million, which resulted in the recognition of a gain of €59.6 million ($85.9 million). We refer to this transaction as the “PEPR Acquisition.” The fair value was based on the trading price for our previously owned units and our acquisition price for the PEPR units purchased during the tender offer period.
We have allocated the aggregate purchase price, representing the share of PEPR we owned at the time of consolidation of €1.1 billion ($1.6 billion). The allocation of the purchase price required a significant amount of judgment and was based on our valuation,valuations, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities acquired.assumed. The adjustments finalizing the purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations.
The allocation of the purchase price was as follows (in millions)thousands):
Investments in real estate properties |
| $ | 5,441,384 |
|
Intangible assets, net of intangible liabilities |
|
| 332,708 |
|
Accounts receivable and other assets |
|
| 8,062 |
|
Debt, including premium |
|
| (735,172 | ) |
Accounts payable, accrued expenses and other liabilities |
|
| (56,313 | ) |
Total estimated purchase price |
|
| 4,990,669 |
|
Our venture partner’s share of purchase price |
|
| (2,253,234 | ) |
Common limited partnership units issued in the Operating Partnership |
|
| (181,170 | ) |
Prologis share of cash purchase price |
| $ | 2,556,265 |
|
Investments in real estate properties | $ | 4,448.2 | ||
Cash, accounts receivable and other assets | 251.4 | |||
Debt | (2,240.8) | |||
Accounts payable, accrued expenses and other liabilities | (698.2) | |||
Noncontrolling interests | (133.7) | |||
|
| |||
Total purchase price | $ | 1,626.9 |
Pro forma Information (unaudited)
The following unaudited pro forma financial information presents our results as though the Merger and the PEPR Acquisition, as well as the equity offering in June 2011 that was used, in part, to repay the loans used to fund the PEPR Acquisition,KTR transaction had been consummated as of
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
completed on January 1, 2010.2014. The pro forma information does not necessarily reflect the actual results of operations had the transactionstransaction actually been consummated at the beginning of the period indicated norcompleted on January 1, 2014, and it is it necessarilynot indicative of future operating results. The pro forma information does not give effect to any cost synergies or other operating efficiencies that have resulted or could result fromresults for the Merger and also does notyear ended December 31, 2015, include any merger and integration expenses. The results included approximately seven months of actual results for both the Mergertransaction, the acquisition expenses, and PEPR Acquisition, andfive months of pro forma adjustments for five months.adjustments. Actual results in 2015 include rental incomerevenues and rental expenses of the properties acquired through the Merger and PEPR Acquisition of $575.2$235.7 million and $154.4$56.9 million, respectively, of which $74.2 million of rental income and $17.7 million of rental expenses are included in discontinued operations. Pro forma information forrepresenting the year endedperiod from acquisition through December 31, 2011 was as follows:2015.
The following amounts are in thousands, except per share amounts:
| |||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||
|
These results include certain adjustments, primarilyprimarily: (i) decreased revenues resulting from the amortization of the net assetassets from the acquired leases with net favorable or unfavorable rents relative to estimated market rents,rents; (ii) increased depreciation and amortization expense resulting from the adjustment of real estate assets to estimated fair value and recognition of intangible assets related to in-place leasesleases; and acquired management contracts and(iii) additional interest expense attributable to the debt issued to finance our cash portion of the acquisition offset by lower interest expense due to the accretion of the fair value adjustment of debt.
2013 Acquisitions
Acquisition of Unconsolidated Co-Investment Ventures
On August 6, 2013, we concluded the unconsolidated co-investment venturea Controlling Interest in Prologis North American Industrial Fund III
During 2014, we increased our ownership in Prologis North American Industrial Fund (“NAIF”) from 23.1% to 66.1% by acquiring the equity units from all but one partner for an aggregate of $679.0 million. This included the acquisition of $46.8 million of equity units on October 20, 2014, that resulted in our gaining control over NAIF, III”). The venture sold 73 properties aggregating 9.5 million square feet to a third party for proceeds of $427.5 million and subsequently paid off allbased on the remaining debt obligationsrights of the venture. Following the sale of these properties,limited partners, and therefore we acquired our partner’s 80% ownership in this venturebegan
68
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
consolidating NAIF at that date and now own 100% of the remaining assets and liabilities. The assets and liabilities of this venture, as well as the activity since the acquisition date, have been included in the Consolidated Financial Statements. In accordance with the accounting rules for business combinations, we marked our equity investment in NAIF III from its carrying value to the estimated fair value. The fair value was determined and allocated based on our valuation, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities. The allocation of net assets acquired was $519.2 million in real estate assets and $22.0 million of net other assets. As a result of these transactions, we have recordedrecognized a gain of $39.5$201.3 million inGains on Acquisitions and Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Net.
The total purchase price was $1.1 billion, which included our investment in NAIF at the Consolidated Statementstime of Operations. While the current allocation ofconsolidation. The adjustments finalizing the purchase price is substantially complete, the valuation of the real estate properties is being finalized. We do not expect future revisions, if any, to have a significant impact on our financial position or results of operations. The impact of the results in 2013 for the properties acquired from NAIF III was not significant.
On October 2, 2013, we acquired our partner’s 78.4% interest in and concluded the unconsolidated co-investment venture Prologis SGP Mexico (“SGP Mexico”). The assets and liabilities of this venture, as well as the activity since the acquisition date, have been included in the Consolidated Financial Statements. In accordance with the accounting rules for business combinations, we marked our equity investment in SGP Mexico from its carrying value to the estimated fair value. The fair value was determined and allocated based on our valuation, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities. The allocation of net assets acquired was $409.5 million in real estate assets and $4.0 million of net other assets and $158.4 million in debt. As a result of these transactions, we have recorded a loss of $1.1 million inGains on Acquisitions and Dispositions of Investments in Real Estate, Net, in the Consolidated Statements of Operations. While the current allocation of the purchase price is substantially complete, the valuation of the real estate properties is being finalized. We do not expect future revisions, if any, to have a significant impact on our financial position or results of operations. The impact of the results in 2013 for the properties acquired from SGP Mexico was not significant.
2012 Acquisitions of Unconsolidated Co-Investment Ventures
On February 3, 2012, we acquired our partner’s 63% interest in and now own 100% of our previously unconsolidated co-investment venture Prologis North American Industrial Fund II (“NAIF II”) and we repaid the loan from NAIF II to our partner for a total of $336.1 million. The assets and liabilities of this venture, as well as the activity since the acquisition date, have been included in the Consolidated Financial Statements. In accordance with the accounting rules for business combinations, we marked our equity investment in NAIF II from its carrying value to the estimated fair value. The fair value was determined and allocated based on our valuation, estimates, and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities. The allocation of net assets acquired was approximately $1.6 billion in real estate assets, $27.3 million of net other assets and $875.4 million in debt. The purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations. We did not record a gain or loss with this transaction, as the carrying value of our investment was equal to the estimated fair value.
On February 22, 2012, we dissolved the unconsolidated co-investment venture Prologis California and divided the portfolio equally with our partner. The net value of the assets and liabilities distributed represented the fair value of our ownership interest in the co-investment venture on that date. In accordance with the accounting rules for business combinations, we marked our equity investment in Prologis California from
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
its carrying value to the estimated fair value which resulted in a gain of $273.0 million. The gain is recorded inGains on Acquisitions and Dispositions of Investments in Real Estate, Net in the Consolidated Statements of Operations. The fair value was determined and allocated based on our valuation, estimates, and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities. The allocation of net assets acquired is approximately $496.3 million in real estate assets, $17.7 million of net other assets and $150.0 million in debt. Thethe purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position orwas as follows (in thousands):
Investments in real estate properties |
| $ | 2,658,252 |
|
Intangible assets, net of intangible liabilities |
|
| 138,185 |
|
Cash |
|
| 87,780 |
|
Accounts receivable and other assets |
|
| 5,664 |
|
Debt, including premium |
|
| (1,195,213 | ) |
Accounts payable, accrued expenses and other liabilities |
|
| (57,655 | ) |
Noncontrolling interests |
|
| (554,493 | ) |
Total purchase price |
| $ | 1,082,520 |
|
Actual results of operations.
On November 30, 2012, Prologis North American Properties Fund 1 (“Fund 1”) distributed real estate properties based on fair value to our partner. We acquired the remaining interest in Fund 1 for total consideration of $33.2 million. In accordance with the accounting rules for business combinations, we marked our equity investment in Fund 1 from its carrying value to the estimated fair value which resulted in a gain of $21.2 million. The gain is recorded inGains on Acquisitions and Dispositions of Investments in Real Estate, Net in the Consolidated Statements of Operations. The fair value was determined and allocated based on our valuation, estimates, and assumptions of the acquisition date fair value, which consisted primarily of real estate and intangible assets of $117.0 million. The purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations.
We refer to these three transactions collectively as the “2012 Co-Investment Venture Acquisitions.”
Our results for 2012 include2014 included rental incomerevenues and rental expenses of the properties acquired in the 2012 Co-Investment Venture AcquisitionsNAIF acquisition of $170.6$49.2 million and $42.5$13.3 million, respectively, offset by the impact of which $11.5 million of rental income and $2.5 million of rental expenses are included in discontinued operations.noncontrolling interests.
Investments in real estate properties are presented at cost, and consistconsisted of the following as ofat December 31 (square(dollars and square feet and dollars in thousands):
Square Feet |
|
| Number of Buildings |
|
|
|
| ||||||||||||||||||||||||||||||||||||||||
Square Feet /Acres (1) | No. of Buildings (1) | Investment Balance | 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
| ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
Industrial operating properties: | |||||||||||||||||||||||||||||||||||||||||||||||
Operating properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Buildings and improvements |
| 331,210 |
|
|
| 333,830 |
|
|
| 1,776 |
|
|
| 1,872 |
|
| $ | 17,905,914 |
|
| $ | 17,861,693 |
| ||||||||||||||||||||||||
Improved land | - - | - - | - - | - - | $ | 4,074,647 | $ | 5,317,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,037,543 |
|
|
| 5,874,052 |
| ||||||||||||||||
Buildings and improvements | 267,097 | 316,347 | 1,610 | 1,853 | 13,726,417 | 17,291,125 | |||||||||||||||||||||||||||||||||||||||||
Development portfolio, including cost of land: | |||||||||||||||||||||||||||||||||||||||||||||||
Pre-stabilized | 4,491 | 4,785 | 11 | 15 | 204,022 | 472,413 | |||||||||||||||||||||||||||||||||||||||||
Development portfolio, including land costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Prestabilized |
| 8,256 |
|
|
| 12,598 |
|
|
| 29 |
|
|
| 28 |
|
|
| 798,233 |
|
|
| 918,099 |
| ||||||||||||||||||||||||
Properties under development | 18,587 | 13,216 | 46 | 30 | 816,995 | 479,230 |
| 19,539 |
|
|
| 19,630 |
|
|
| 60 |
|
|
| 63 |
|
|
| 633,849 |
|
|
| 954,804 |
| ||||||||||||||||||
Land | 9,747 | 10,915 | - - | - - | 1,516,166 | 1,794,364 | |||||||||||||||||||||||||||||||||||||||||
Land (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,218,904 |
|
|
| 1,359,794 |
| ||||||||||||||||||||||||
Other real estate investments (2) | - - | - - | - - | - - | 486,230 | 454,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 524,887 |
|
|
| 552,926 |
| ||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Total investments in real estate properties | 20,824,477 | 25,809,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27,119,330 |
|
|
| 27,521,368 |
| ||||||||||||||||||||||
Less accumulated depreciation | 2,568,998 | 2,480,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,758,372 |
|
|
| 3,274,284 |
| ||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Net investments in real estate properties | $ | 18,255,479 | $ | 23,328,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 23,360,958 |
|
| $ | 24,247,084 |
|
(1) | Included in our investments in real estate at December 31, 2016, and 2015 were 5,892 and 7,404 acres of land, respectively. |
(2) | Included in other real estate investments |
At December 31, 2013, excluding our assets held for sale,2016, we owned real estate assets in the U.S. and other Americas (Canada Mexico and the United States)Mexico), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom)Kingdom (“U.K.”)) and Asia (China, Japan and Singapore).
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Acquisitions
Acquisitions
Real estate acquisition activityThe following table summarizes our acquisitions of properties from third parties for the years ended December 31 2013, 2012 and 2011 was as follows (dollars and square feet in thousands):
2013 | 2012 | 2011 | ||||||||||
Acquisitions of properties from unconsolidated co-investment ventures | ||||||||||||
Number of properties | 58 | 215 | 233 | |||||||||
Square feet | 16,319 | 46,277 | 53,603 | |||||||||
Real estate acquisition value | $ | 1,141,128 | $ | 2,294,892 | $ | 4,591,017 | ||||||
Net gains | $ | 34,787 | $ | 286,335 | $ | 99,369 | ||||||
Building acquisitions from third parties | ||||||||||||
Number of properties | 12 | 12 | 8 | |||||||||
Square feet | 3,262 | 1,622 | 1,498 | |||||||||
Real estate acquisition value | $ | 146,331 | $ | 77,397 | $ | 86,851 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Number of operating properties |
|
| 9 |
|
|
| 52 |
|
|
| 8 |
|
Square feet |
|
| 1,823 |
|
|
| 7,375 |
|
|
| 1,004 |
|
Real estate acquisition value (1) |
| $ | 411,706 |
|
| $ | 1,042,562 |
|
| $ | 548,201 |
|
(1) | Value includes the acquisition of 776, 690, and 1,040 acres of land in 2016, 2015 and 2014, respectively. |
69
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The table above does not include the properties acquired in the KTR transaction, as this transaction is explained in Note 3.
Dispositions
The acquisitions of properties from unconsolidated co-investment ventures primarily relate to when we have acquired all or a portion of the third parties share of a co-investment venture upon dissolution of the venture.
Dispositions
Realfollowing table summarizes our real estate disposition activity for the years ended December 31 2013, 2012 and 2011 was as follows (dollars and square feet in thousands):
2013 | 2012 | 2011 | ||||||||||
Continuing Operations | ||||||||||||
Number of properties | 254 | 25 | 57 | |||||||||
Square feet | 71,503 | 4,784 | 7,784 | |||||||||
Net proceeds from contributions and dispositions | $ | 6,656,980 | $ | 475,467 | $ | 731,072 | ||||||
Net gains from contributions and dispositions | $ | 562,869 | $ | 19,272 | $ | 12,315 | ||||||
Discontinued Operations | ||||||||||||
Number of properties | 89 | 200 | 94 | |||||||||
Square feet | 9,196 | 27,169 | 10,739 | |||||||||
Net proceeds from dispositions | $ | 608,286 | $ | 1,562,189 | $ | 931,443 | ||||||
Net gains from dispositions, including related impairment charges and taxes | $ | 116,550 | $ | 35,098 | $ | 58,614 |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Contributions to unconsolidated co-investment ventures |
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
| 35 |
|
|
| 31 |
|
|
| 126 |
|
Square feet |
| 11,624 |
|
|
| 8,355 |
|
|
| 25,247 |
|
Net proceeds (1) | $ | 1,231,878 |
|
| $ | 835,385 |
|
| $ | 1,825,311 |
|
Net gains on contributions (1) | $ | 267,441 |
|
| $ | 148,987 |
|
| $ | 188,268 |
|
Dispositions to third parties |
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
| 172 |
|
|
| 136 |
|
|
| 145 |
|
Square feet |
| 20,360 |
|
|
| 23,024 |
|
|
| 19,856 |
|
Net proceeds (1) | $ | 1,760,048 |
|
| $ | 2,352,645 |
|
| $ | 1,365,318 |
|
Net gains on dispositions (1) | $ | 353,668 |
|
| $ | 609,900 |
|
| $ | 336,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gains on contributions and dispositions | $ | 621,109 |
|
| $ | 758,887 |
|
| $ | 524,471 |
|
Gains on redemptions of investments in co-investment ventures (2) |
| 136,289 |
|
|
| - |
|
|
| - |
|
Gains on revaluation of equity investments upon acquisition of a controlling interest, net (3) |
| - |
|
|
| - |
|
|
| 201,319 |
|
Total gains on dispositions of investments in real estate, net | $ | 757,398 |
|
| $ | 758,887 |
|
| $ | 725,790 |
|
(1) | Includes the disposition of land parcels. |
(2) | See Note 5 for more information on these transactions. |
(3) | See Note 3 for more information on this transaction. |
In 2014, we launched the initial public offering of FIBRA Prologis, a Mexican REIT. In connection with the offering, FIBRA Prologis purchased 177 properties aggregating 29.7 million square feet (12.6 million square feet related to our wholly owned portfolio, 7.6 million square feet from our consolidated co-investment venture Prologis Mexico Fondo Logistico (“AFORES”) and 9.5 million square feet from our unconsolidated co-investment venture Prologis Mexico Industrial Fund). Also in 2014, AFORES contributed its remaining operating properties and the balance of its secured debt to FIBRA Prologis. The difference between the amount received and the noncontrolling interests balance related to the properties contributed was $34.6 million, and was adjusted through equity with no gain or loss recognized. On the basis of this transaction, we recognized a gain on disposition of investments in real estate of $52.5 million; current tax expense of $32.4 million; deferred tax benefit of $55.5 million; and earnings attributable to noncontrolling interest of $61.0 million.
Operating Lease Agreements
We lease our operating properties and certain land parcels to customers under agreements that are generally classified as operating leases. Our weighted average lease term remaining, based on square feet for all leases in effect at December 31, 2016, was four years.
The following table summarizes our minimum lease payments on leases with lease periods greater than one year for space in our operating properties, pre-stabilized development properties and leases of land subject to ground leases at December 31, 2016 (in thousands):
2017 |
| $ | 1,633,990 |
|
2018 |
|
| 1,488,049 |
|
2019 |
|
| 1,239,683 |
|
2020 |
|
| 1,038,305 |
|
2021 |
|
| 809,961 |
|
Thereafter |
|
| 2,391,452 |
|
Total |
| $ | 8,601,440 |
|
These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses.
70
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We have entered into operating ground leases as a lessee on certain land parcels, primarily on-tarmac facilities and office space with remaining lease terms of 1 to 7573 years. Buildings and improvements subject to ground leases are depreciated ratably over the shorter of the term of the related leases or the useful life of the real estate. FutureThe following table summarizes our future minimum rental payments under non-cancelable operating leases in effect as ofat December 31, 2013, were as follows2016 (in thousands):
2017 |
| $ | 30,976 |
|
2018 |
|
| 32,035 |
|
2019 |
|
| 29,520 |
|
2020 |
|
| 28,379 |
|
2021 |
|
| 24,480 |
|
Thereafter |
|
| 332,835 |
|
Total |
| $ | 478,225 |
|
2014 | $ | 36,474 | ||
2015 | 34,105 | |||
2016 | 25,434 | |||
2017 | 22,956 | |||
2018 | 20,752 | |||
Thereafter | 227,141 | |||
|
| |||
Total | $ | 366,862 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)NOTE 5. UNCONSOLIDATED ENTITIES
Operating Lease Agreements
We lease our operating properties and certain land parcels to customers under agreements that are generally classified as operating leases. Our largest customer and 25 largest customers accounted for 1.6% and 22.6%, respectively, of our annualized base rents at December 31, 2013. At December 31, 2013, minimum lease payments on leases with lease periods greater than one year for space in our operating properties and leases of land subject to ground leases were as follows (in thousands):
2014 | $ | 1,106,254 | ||
2015 | 966,365 | |||
2016 | 780,354 | |||
2017 | 574,171 | |||
2018 | 421,255 | |||
Thereafter | 1,139,570 | |||
|
| |||
Total | $ | 4,987,969 |
These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses. These reimbursements are reflected as rental recoveries and rental expenses in the accompanying Consolidated Statements of Operations.
Summary of Investments
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with strategic capitalpartners and investors and provide asset and property management services to these entities. Weentities, which we refer to these entities as co-investment ventures. Our ownership interest in these entities generally ranges from 15-50%. These entities may be consolidated or unconsolidated, depending on the structure, our partner’s rightsparticipation and participationother rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, thatwhich are accounted for using the equity method of accounting. See Note 12 for more detail regarding our consolidated investments.
We also have other ventures, generally with one partner and that we do not manage.manage, which we account for using the equity method. We refer to our investments in theall entities accounted for onusing the equity method, both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.
Our
The following table summarizes our investments in and advances to our unconsolidated entities as ofat December 31 are summarized below (in thousands):
2013 | 2012 |
| 2016 |
|
| 2015 |
| |||||||||
Unconsolidated co-investment ventures | $ | 4,250,015 | $ | 2,013,080 |
| $ | 4,057,524 |
|
| $ | 4,585,427 |
| ||||
Other ventures | 180,224 | 182,702 |
|
| 172,905 |
|
|
| 170,193 |
| ||||||
|
| |||||||||||||||
Totals | $ | 4,430,239 | $ | 2,195,782 |
| $ | 4,230,429 |
|
| $ | 4,755,620 |
|
Unconsolidated Co-Investment Ventures
As of December 31, 2013, we had investments in and managed 10 unconsolidated co-investment ventures that own portfolios of operating industrial properties and may also develop properties. We account for our investments in these ventures under the equity method of accounting and, therefore, we record our share of each venture’s net earnings or loss asEarnings from Unconsolidated Entities, Net in the Consolidated Statements of Operations. We earn fees for the management services we provide to these ventures. These fees are recognized as earned and may include property and asset management fees or transactional fees for leasing, acquisition, construction, financing, legal and tax services. We may also earn incentive returns or promotes based on the third party investor returns over time. We report these fees and incentives asInvestment Management Income in the Consolidated Statements of Operations. In addition, we may earn fees for services provided to develop a building within these ventures and those fees are reflected asDevelopment Management and Other Income in the Consolidated Statements of Operations.
In the first quarter of 2013, we launched the initial public offering for Nippon Prologis REIT, Inc. (“NPR”). NPR is a long-term investment vehicle for our stabilized properties in Japan. On February 14, 2013, NPR was listed on the Japan Stock Exchange and commenced trading. At that time, NPR acquired a portfolio of 12 properties totaling 9.6 million square feet from us for an aggregate purchase price of ¥173 billion ($1.9 billion). At the time, we had a 15% ownership interest that we accounted for under the equity method. As a result of this transaction, we recognized a gain of $337.9 million, net of a $59.6 million deferral due to our ongoing investment. The gain was recorded inGains on Acquisitions and Dispositions of Investments in Real Estate, Net in the Consolidated Statements of Operations. We recognized $38.6 million of current tax expense in connection with this contribution.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
On March 19, 2013, we closed Prologis European Logistics Partners Sàrl (“PELP”), a joint venture with Norges Bank Investment Management (“NBIM”), which is the manager of the Norwegian Government Pension Fund Global. We have a 50% ownership interest that we account for under the equity method. The venture has an initial term of 15 years, which may be extended for an additional 15-year period, and thereafter extended upon negotiation between partners. We will have the ability to reduce our ownership to 20% following the second anniversary of closing. The venture acquired a portfolio from us for approximately €2.3 billion ($3.0 billion) consisting of 195 properties and 48.7 million square feet in 11 target European global markets. As a result of this transaction, we recognized a gain of $1.8 million, net of a deferred gain due to our ongoing investment. The gain was recorded inGains on Acquisitions and Dispositions of Investments in Real Estate, Net in the Consolidated Statements of Operations. In connection with the closing, a warrant NBIM received at signing to acquire six million shares of Prologis common stock with a strike price of $35.64 became exercisable. The warrant can be net share settled. We used the Black-Scholes pricing model to value the warrant and this value was included as consideration in the overall result of the transaction.
During the three years ended December 31, 2013, we also acquired controlling interests in several co-investment ventures and began consolidating the venture or the properties. In addition, during this period we have made contributions of properties to several other co-investment ventures. See Notes 3 and 4 for discussion of these transactions and the impact on our real estate properties. In connection with the Merger, we added several co-investment ventures for which we recognized fees and our proportionate share of earnings (loss) for approximately seven months in 2011.
Summarized information regarding the amounts we recognize in the Consolidated Statements of Operations fromtable summarizes our investments in the unconsolidatedindividual co-investment ventures for the years endedat December 31 was as follows (in(dollars in thousands):
2013 | 2012 | 2011 | ||||||||||
Earnings (loss) from unconsolidated co-investment ventures: | ||||||||||||
Americas | $ | 21,724 | $ | (7,843) | $ | 22,709 | ||||||
Europe | 63,839 | 31,174 | 25,709 | |||||||||
Asia | 9,091 | 2,372 | 908 | |||||||||
|
|
|
|
|
| |||||||
Total earnings (loss) from unconsolidated co-investment ventures, net | $ | 94,654 | $ | 25,703 | $ | 49,326 | ||||||
|
|
|
|
|
| |||||||
Investment management and other income: | ||||||||||||
Americas (1) | $ | 70,642 | $ | 68,142 | $ | 67,293 | ||||||
Europe | 63,794 | 37,173 | 45,758 | |||||||||
Asia | 42,749 | 19,870 | 14,149 | |||||||||
|
|
|
|
|
| |||||||
Total investment management income | 177,185 | 125,185 | 127,200 | |||||||||
Development management and other income | 4,007 | 535 | 5,943 | |||||||||
|
|
|
|
|
| |||||||
Total investment management and other income | $ | 181,192 | $ | 125,720 | $ | 133,143 |
|
| Ownership Percentage |
|
| Investment in and Advances to |
| ||||||||||
Co-Investment Venture |
| 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
| ||||
Prologis Targeted U.S. Logistics Fund, L.P. (“USLF”) (1) |
|
| 14.9 | % |
|
| 22.5 | % |
| $ | 434,818 |
|
| $ | 689,408 |
|
FIBRA Prologis (2) (3) |
|
| 45.9 | % |
|
| 45.9 | % |
|
| 547,744 |
|
|
| 569,800 |
|
Prologis Brazil Logistics Partners Fund I, L.P. (“Brazil Fund”) and related joint ventures (4) |
| various |
|
| various |
|
|
| 297,300 |
|
|
| 216,668 |
| ||
Europe Logistics Venture 1, FCP-FIS (“ELV”) (5) (6) |
|
| 15.0 | % |
|
| 15.0 | % |
|
| 48,289 |
|
|
| 53,960 |
|
Prologis European Logistics Partners Sàrl (“PELP”) (5) |
|
| 50.0 | % |
|
| 50.0 | % |
|
| 1,623,707 |
|
|
| 1,762,291 |
|
Prologis European Properties Fund II, FCP-FIS (“PEPF II”) |
|
| 31.2 | % |
|
| 31.3 | % |
|
| 344,200 |
|
|
| 410,984 |
|
Prologis Targeted Europe Logistics Fund, FCP-FIS (“PTELF”) (1) (6) |
|
| 23.5 | % |
|
| 41.6 | % |
|
| 310,118 |
|
|
| 480,401 |
|
Nippon Prologis REIT, Inc. (“NPR”) (7) (8) |
|
| 15.1 | % |
|
| 15.1 | % |
|
| 348,570 |
|
|
| 300,822 |
|
Prologis China Logistics Venture I, LP and II, LP (Prologis China Logistics Venture) (5) |
|
| 15.0 | % |
|
| 15.0 | % |
|
| 102,778 |
|
|
| 101,093 |
|
Totals |
|
|
|
|
|
|
|
|
| $ | 4,057,524 |
|
| $ | 4,585,427 |
|
(1) | During 2016, we redeemed a portion of |
(2) | At December 31, 2016, we owned 291.1 million units of |
The amounts of Investment Management Income and Earnings we recognize depends on the number and size of co-investment ventures in which we have an ownership interest and manage. A summary of our outstanding unconsolidated co-investment ventures at December 31 was as follows (square feet and total assets in thousands and represents 100% of the venture):71
2013 | 2012 | 2011 | ||||||||||
Number of ventures | 10 | 11 | 15 | |||||||||
Square feet | 264,293 | 208,753 | 267,752 | |||||||||
Total assets | $ | 23,865,250 | $ | 17,612,590 | $ | 20,692,939 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Information about our investments in the co-investment ventures as of December 31 was as follows (dollars and square feet in thousands):
Number of properties owned | Square feet | Ownership Percentage | Investment in and Advances to | |||||||||||||||||||||
Co-Investment Venture | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Prologis Targeted U.S. Logistics Fund | 385 | 48,490 | 25.9 % | 23.9 % | $ | 743,454 | $ | 645,241 | ||||||||||||||||
Prologis North American Industrial Fund (2) | 237 | 46,500 | 23.1 % | 23.1 % | 201,482 | 209,580 | ||||||||||||||||||
Prologis North American Industrial Fund III | - | - | - | 20.0 % | - | 20,860 | ||||||||||||||||||
Prologis Mexico Industrial Fund | 74 | 9,503 | 20.0 % | 20.0 % | 49,684 | 50,681 | ||||||||||||||||||
Prologis SGP Mexico | - | - | - | 21.6 % | - | 33,245 | ||||||||||||||||||
Prologis Brazil Logistics Partners Fund (“Brazil Fund”) and related joint ventures (“Brazil Ventures”) (6) | 11 | 4,044 | 50.0 % | 50.0 % | 199,392 | 152,224 | ||||||||||||||||||
Prologis Targeted Europe Logistics Fund | 84 | 13,652 | 43.1 % | 32.4 % | 471,896 | 280,430 | ||||||||||||||||||
Prologis European Properties Fund II (8) | 250 | 62,364 | 32.5 % | 29.7 % | 582,828 | 398,291 | ||||||||||||||||||
Europe Logistics Venture 1 | 24 | 5,070 | 15.0 % | 15.0 % | 62,654 | 44,027 | ||||||||||||||||||
Prologis European Logistics Partners (9) (11) | 209 | 51,790 | 50.0 % | - | 1,585,923 | - | ||||||||||||||||||
Nippon Prologis REIT (12) | 24 | 18,508 | 15.1 % | - | 309,715 | - | ||||||||||||||||||
Prologis Japan Fund 1 (Prologis Japan Fund I, LP) (13) | - | - | - | 20.0 % | - | 144,352 | ||||||||||||||||||
Prologis China Logistics Venture 1 | 19 | 4,372 | 15.0 % | 15.0 % | 42,987 | 34,149 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Totals | 1,317 | 264,293 | $ | 4,250,015 | $ | 2,013,080 |
(3) | We have |
(4) |
We have a 50% ownership interest in and consolidate an entity that in turn owns 50% of several entities that we account for on the equity |
(5) |
We have one partner in each of these co-investment ventures. |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(6) | In January 2017, we sold our investment in ELV to our fund partner and ELV contributed |
The following is summarized financial information of the unconsolidated co-investment ventures and our investment (dollars in millions). The co-investment venture information represents 100% of Prologis’ stepped up basis, not our proportionate share, and may not be comparable to values reflected in the entities’ stand alone financial statements calculated on a different basis.
2013 (1) | Americas | Europe | Asia | Total | ||||||||||||
Revenues | $ | 702.4 | $ | 801.4 | $ | 223.8 | $ | 1,727.6 | ||||||||
Net operating income | $ | 512.9 | $ | 621.1 | $ | 174.7 | $ | 1,308.7 | ||||||||
Net earnings (loss) (2) | $ | 58.3 | $ | 130.6 | $ | 47.5 | $ | 236.4 | ||||||||
Total assets | $ | 8,014.4 | $ | 11,818.8 | $ | 4,032.1 | $ | 23,865.3 | ||||||||
Amounts due to us (3) | $ | 10.3 | $ | 43.7 | $ | 110.0 | $ | 164.0 | ||||||||
Third party debt (4) | $ | 2,999.1 | $ | 2,998.2 | $ | 1,715.2 | $ | 7,712.5 | ||||||||
Total liabilities | $ | 3,177.1 | $ | 4,113.6 | $ | 1,899.2 | $ | 9,189.9 | ||||||||
Our weighted average ownership (5) | 22.7% | 39.0% | 15.0% | 29.2% | ||||||||||||
Our investment balance (6) | $ | 1,194.0 | $ | 2,703.3 | $ | 352.7 | $ | 4,250.0 | ||||||||
Our deferred gains, net of amortization (7) | $ | 139.6 | $ | 196.7 | $ | 94.8 | $ | 431.1 | ||||||||
2012 (1) | Americas | Europe | Asia | Total | ||||||||||||
Revenues | $ | 759.3 | $ | 489.8 | $ | 140.5 | $ | 1,389.6 | ||||||||
Net operating income | $ | 560.8 | $ | 380.2 | $ | 109.4 | $ | 1,050.4 | ||||||||
Net earnings (loss) (2) | $ | (88.1) | $ | 85.7 | $ | 8.2 | $ | 5.8 | ||||||||
Total assets | $ | 9,070.4 | $ | 6,605.2 | $ | 1,937.0 | $ | 17,612.6 | ||||||||
Amounts due to us (3) | $ | 31.9 | $ | 33.3 | $ | 7.7 | $ | 72.9 | ||||||||
Third party debt (4) | $ | 3,835.5 | $ | 2,384.2 | $ | 972.9 | $ | 7,192.6 | ||||||||
Total liabilities | $ | 4,170.4 | $ | 2,953.8 | $ | 1,062.5 | $ | 8,186.7 | ||||||||
Our weighted average ownership (5) | 23.2% | 29.7% | 19.2% | 25.1% | ||||||||||||
Our investment balance (6) | $ | 1,111.8 | $ | 722.8 | $ | 178.5 | $ | 2,013.1 | ||||||||
Our deferred gains, net of amortization (7) | $ | 147.9 | $ | 181.6 | $ | 0.1 | $ | 329.6 |
(7) |
At December 31, |
(8) | For any properties we develop and plan to sell in |
The amounts recognized in Strategic Capital Revenues and Earnings from Unconsolidated Entities, Net depend on the size and operations of the co-investment ventures, the timing of revenues earned through promotes during the life of a venture or upon liquidation, as well as fluctuations in foreign currency exchange rates. We recognized Strategic Capital Expenses for direct costs associated with the asset management of these ventures and allocated property-level management costs for the properties owned by the ventures. Our ownership interest in these ventures also impacts the earnings we recognize.
The following table summarizes the amounts we recognized in the Consolidated Statements of Income related to the unconsolidated co-investment ventures for the years ended December 31 (in thousands):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Strategic capital revenues and other revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 37,911 |
|
| $ | 36,964 |
|
| $ | 81,351 |
|
Other Americas |
|
| 22,777 |
|
|
| 22,516 |
|
|
| 13,003 |
|
Europe |
|
| 184,956 |
|
|
| 112,675 |
|
|
| 86,487 |
|
Asia |
|
| 46,521 |
|
|
| 35,453 |
|
|
| 37,509 |
|
Total strategic capital revenues |
|
| 292,165 |
|
|
| 207,608 |
|
|
| 218,350 |
|
Development management and other revenues |
|
| 11,006 |
|
|
| 7,467 |
|
|
| 5,424 |
|
Total strategic capital revenues and other revenues |
| $ | 303,171 |
|
| $ | 215,075 |
|
| $ | 223,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from unconsolidated co-investment ventures, net: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 10,441 |
|
| $ | 7,124 |
|
| $ | 16,420 |
|
Other Americas |
|
| 27,155 |
|
|
| 28,842 |
|
|
| (7,824 | ) |
Europe |
|
| 137,652 |
|
|
| 106,656 |
|
|
| 108,430 |
|
Asia |
|
| 16,629 |
|
|
| 12,780 |
|
|
| 14,022 |
|
Total earnings from unconsolidated co-investment ventures, net |
| $ | 191,877 |
|
| $ | 155,402 |
|
| $ | 131,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the promotes earned and recognized in Strategic Capital Revenues for the years ended December 31 (in thousands):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Strategic capital – promote revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Total promote (1) |
| $ | 99,766 |
|
| $ | 56,637 |
|
| $ | 42,132 |
|
Less: Prologis’ share |
|
| 11,222 |
|
|
| 27,175 |
|
|
| 10,852 |
|
Net promote recognized (third-party share) in strategic capital revenues |
| $ | 88,544 |
|
| $ | 29,462 |
|
| $ | 31,280 |
|
(1) | We earned promotes from PTELF and PEPF II in 2016, PELP and ELV in 2015 and USLF in 2014, each based on the venture’s cumulative returns to the investors over the last three years. |
Approximately 40% of promote revenues are paid as a combination of cash and stock awards pursuant to the terms of the Prologis Promote Plan and expensed through Strategic Capital Expenses. See Note 13 for more information on this plan.
72
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following tables summarize the operating information and financial position of our unconsolidated co-investment ventures (not our proportionate share), at December 31 and for the years ended December 31 as presented at our adjusted basis derived from the ventures’ GAAP information:
(dollars and square feet in millions) |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
Number of properties owned |
|
| 369 |
|
|
| 391 |
|
|
| 392 |
|
Square feet |
|
| 50 |
|
|
| 50 |
|
|
| 50 |
|
Total assets |
| $ | 4,238 |
|
| $ | 4,408 |
|
| $ | 4,403 |
|
Third-party debt |
| $ | 1,414 |
|
| $ | 1,433 |
|
| $ | 1,594 |
|
Total liabilities |
| $ | 1,540 |
|
| $ | 1,550 |
|
| $ | 1,697 |
|
Our investment balance (1) |
| $ | 435 |
|
| $ | 690 |
|
| $ | 712 |
|
Our weighted average ownership (2) |
|
| 14.9 | % |
|
| 22.5 | % |
|
| 24.3 | % |
Other Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
Number of properties owned |
|
| 213 |
|
|
| 205 |
|
|
| 198 |
|
Square feet |
|
| 42 |
|
|
| 39 |
|
|
| 37 |
|
Total assets |
| $ | 2,793 |
|
| $ | 2,482 |
|
| $ | 2,653 |
|
Third-party debt |
| $ | 739 |
|
| $ | 657 |
|
| $ | 679 |
|
Total liabilities |
| $ | 814 |
|
| $ | 708 |
|
| $ | 717 |
|
Our investment balance (1) |
| $ | 845 |
|
| $ | 786 |
|
| $ | 825 |
|
Our weighted average ownership (2) |
|
| 43.9 | % |
|
| 43.8 | % |
|
| 42.9 | % |
Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
Number of properties owned |
|
| 700 |
|
|
| 688 |
|
|
| 636 |
|
Square feet |
|
| 163 |
|
|
| 159 |
|
|
| 148 |
|
Total assets |
| $ | 10,853 |
|
| $ | 11,343 |
|
| $ | 11,440 |
|
Third-party debt |
| $ | 2,446 |
|
| $ | 2,640 |
|
| $ | 2,621 |
|
Total liabilities |
| $ | 3,283 |
|
| $ | 3,584 |
|
| $ | 3,501 |
|
Our investment balance (1) |
| $ | 2,327 |
|
| $ | 2,707 |
|
| $ | 2,773 |
|
Our weighted average ownership (2) |
|
| 35.1 | % |
|
| 38.9 | % |
|
| 38.8 | % |
Asia: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
Number of properties owned |
|
| 85 |
|
|
| 66 |
|
|
| 52 |
|
Square feet |
|
| 36 |
|
|
| 29 |
|
|
| 26 |
|
Total assets |
| $ | 5,173 |
|
| $ | 4,320 |
|
| $ | 4,120 |
|
Third-party debt |
| $ | 1,947 |
|
| $ | 1,520 |
|
| $ | 1,637 |
|
Total liabilities |
| $ | 2,239 |
|
| $ | 1,751 |
|
| $ | 1,734 |
|
Our investment balance (1) |
| $ | 451 |
|
| $ | 402 |
|
| $ | 356 |
|
Our weighted average ownership (2) |
|
| 15.1 | % |
|
| 15.0 | % |
|
| 15.0 | % |
Totals: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of ventures |
|
| 9 |
|
|
| 9 |
|
|
| 9 |
|
Number of properties owned |
|
| 1,367 |
|
|
| 1,350 |
|
|
| 1,278 |
|
Square feet |
|
| 291 |
|
|
| 277 |
|
|
| 261 |
|
Total assets |
| $ | 23,057 |
|
| $ | 22,553 |
|
| $ | 22,616 |
|
Third-party debt |
| $ | 6,546 |
|
| $ | 6,250 |
|
| $ | 6,531 |
|
Total liabilities |
| $ | 7,876 |
|
| $ | 7,593 |
|
| $ | 7,649 |
|
Our investment balance (1) |
| $ | 4,058 |
|
| $ | 4,585 |
|
| $ | 4,666 |
|
Our weighted average ownership (2) |
|
| 27.9 | % |
|
| 31.6 | % |
|
| 32.0 | % |
73
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2016 |
|
| 2015 |
|
| 2014 (3) |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 395 |
|
| $ | 382 |
|
| $ | 541 |
|
Other Americas |
|
| 242 |
|
|
| 228 |
|
|
| 170 |
|
Europe |
|
| 964 |
|
|
| 947 |
|
|
| 1,001 |
|
Asia: |
|
| 342 |
|
|
| 275 |
|
|
| 280 |
|
Total revenues |
| $ | 1,943 |
|
| $ | 1,832 |
|
| $ | 1,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 57 |
|
| $ | 35 |
|
| $ | 55 |
|
Other Americas |
|
| 71 |
|
|
| 78 |
|
|
| (1 | ) |
Europe |
|
| 333 |
|
|
| 261 |
|
|
| 268 |
|
Asia |
|
| 101 |
|
|
| 77 |
|
|
| 86 |
|
Total net earnings |
| $ | 562 |
|
| $ | 451 |
|
| $ | 408 |
|
(1) |
our partner’s interest on October 2, 2013. The remaining amounts represent current balances from services provided by us to the venture.
The difference between our ownership interest of |
(2) | Represents our |
(3) | We had significant activity with our U.S. and Other Americas unconsolidated co-investment ventures in 2014 as explained in Notes 3 and 4. We began consolidating NAIF in 2014. We formed and invested in FIBRA Prologis in 2014 and in connection with this transaction, we concluded our unconsolidated co-investment venture in Mexico. |
Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures
Certain co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The venture may obtain financing for the properties and therefore the equity commitment may be less than the acquisition price of additional investments that the real estate.venture could make may be more than the equity commitment. Depending on market conditions, the investment objectives of the ventures, our liquidity needs and other factors, we may make additional contributions of properties toor additional cash investments in these ventures through the remaining commitment period and we may make additional cash investments in these ventures.period.
The following table is a summary ofsummarizes the remaining equity commitments as ofat December 31, 20132016 (in millions):
Equity commitments | Expiration date for remaining commitments | |||||||||||||
Prologis | Venture Partners | Total | ||||||||||||
Prologis Targeted U.S. Logistics Fund (1) | $ | - | $ | 294.8 | $ | 294.8 | Various | |||||||
Prologis Targeted Europe Logistics Fund (2) (3) | $ | 136.0 | $ | 183.4 | $ | 319.4 | June 2015 | |||||||
Prologis European Properties Fund II (2) (4) | $ | 12.0 | $ | 154.9 | $ | 166.9 | September 2015 | |||||||
Europe Logistics Venture 1 (2) (5) | $ | 25.7 | $ | 145.8 | $ | 171.5 | December 2014 | |||||||
Prologis European Logistics Partners (6) | $ | 255.7 | $ | 255.7 | $ | 511.4 | February 2016 | |||||||
Prologis China Logistics Venture 1 (7) | $ | 61.7 | $ | 349.6 | $ | 411.3 | March 2015 | |||||||
Prologis China Logistics Venture 2 (8) | $ | 88.2 | $ | 500.0 | $ | 588.2 | November 2017 | |||||||
|
|
|
|
|
| |||||||||
Total | $ | 579.3 | $ | 1,884.2 | $ | 2,463.5 |
|
| Equity Commitments |
|
| Expiration Date for Remaining Commitments | |||||||||
|
| Prologis |
|
| Venture Partners |
|
| Total |
|
|
| |||
Prologis Targeted U.S. Logistics Fund |
| $ | - |
|
| $ | 180 |
|
| $ | 180 |
|
| 2017 |
Prologis Targeted Europe Logistics Fund (1) |
|
| - |
|
|
| 243 |
|
|
| 243 |
|
| 2017 |
Prologis China Logistics Venture |
|
| 294 |
|
|
| 1,665 |
|
|
| 1,959 |
|
| 2017 |
Total |
| $ | 294 |
|
| $ | 2,088 |
|
| $ | 2,382 |
|
|
|
(1) |
Equity commitments are denominated in euro and reported |
|
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6. ASSETS HELD FOR SALE OR CONTRIBUTION
To the extent an unconsolidated entity acquires properties from a third party or requires cash to retire debt or has other cash needs, we may be required or agree to contribute our proportionate share of the equity component in cash to the unconsolidated entity.
Other ventures
We have several investments in other unconsolidated ventures that owncertain real estate properties and/or perform development activity. We recognized our proportionate share of the earnings from our investments in these entities of $2.6 million, $6.0 million and $10.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.
At December 31, 2013 and 2012, we had $188.0 million of notes backed by real estate. The balance for both periods represents an investment in a preferred equity interest made in 2010 through the sale of a portfolio of industrial properties. Based on the terms of this instrument, the preferred equity interest meets the definition of an investment in a debt security from an accounting perspective. We earned a preferred return at an annual rate of 7% for the first three years, 8% for the fourth year and 10% thereafter until redeemed. Partial or full redemption can occur at any time at the buyer’s discretion or after 2015 at our discretion.
Our other assets consisted of the following, net of amortization and depreciation, if applicable, as of December 31 (in thousands):
2013 | 2012 | |||||||
Rent leveling and above market leases | $ | 256,018 | $ | 349,634 | ||||
Leasing commissions | 222,267 | 218,506 | ||||||
Prepaid assets | 136,729 | 104,012 | ||||||
Value added taxes receivable | 106,074 | 110,906 | ||||||
Fixed assets | 85,389 | 90,177 | ||||||
Management contracts | 61,082 | 66,466 | ||||||
Loan fees | 49,920 | 49,344 | ||||||
Other notes receivable | 38,860 | 34,763 | ||||||
Deferred income taxes | 19,020 | 31,733 | ||||||
Other | 85,653 | 67,512 | ||||||
|
|
|
| |||||
Totals | $ | 1,061,012 | $ | 1,123,053 |
Our other liabilities consisted of the following, net of amortization, if applicable, as of December 31 (in thousands):
2013 | 2012 | |||||||
Tenant security deposits | $ | 191,070 | $ | 174,137 | ||||
Income tax liabilities | 184,888 | 463,102 | ||||||
Unearned rents | 64,156 | 115,020 | ||||||
Value added taxes payable | 57,260 | 31,399 | ||||||
Deferred income | 39,565 | 50,025 | ||||||
Below market leases | 30,031 | 53,289 | ||||||
Environmental | 16,926 | 30,075 | ||||||
Other | 158,295 | 198,864 | ||||||
|
|
|
| |||||
Totals | $ | 742,191 | $ | 1,115,911 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The decrease in other assets and other liabilities, from December 31, 2012 to December 31, 2013, is principally due to the NPR and PELP contributions. See Note 5 for more details on these transactions.
The expected future amortization of leasing commissions of $222.3 million is summarized in the table below. We also expect our above and below market leases and rent leveling net assets, which total $226.0 million at December 31, 2013, to be amortized into rental income as follows (in thousands):
Amortization Expense | Net Charge to Rental Income | |||||||
2014 | $ | 65,867 | $ | 34,830 | ||||
2015 | 52,449 | 41,036 | ||||||
2016 | 35,544 | 30,188 | ||||||
2017 | 24,198 | 25,999 | ||||||
2018 | 14,399 | 20,330 | ||||||
Thereafter | 29,810 | 73,604 | ||||||
|
|
|
| |||||
Totals | $ | 222,267 | $ | 225,987 |
We had three land parcels that met the criteria to be classified as held for sale or contribution at December 31, 2013,2016 and five land parcels and one operating building that met the criteria2015. These properties are expected to be classified as held for sale at December 31, 2012.sold to third parties or contributed to unconsolidated co-investment ventures within twelve months. The amounts included in heldAssets Held for sale as of December 31, 2013 and 2012,Sale or Contribution represented real estate investment balances and the related assets and liabilities for each property.
The operations of the properties74
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Assets held for sale or disposedcontribution consisted of to third partiesthe following (dollars and the aggregatesquare feet in thousands):
|
| 2016 |
|
| 2015 |
| ||
Number of operating properties |
|
| 13 |
|
|
| 17 |
|
Square feet |
|
| 4,167 |
|
|
| 5,065 |
|
Total assets held for sale or contribution |
| $ | 322,139 |
|
| $ | 378,423 |
|
Total liabilities associated with assets held for sale or contribution – included in Other Liabilities |
| $ | 4,984 |
|
| $ | 6,874 |
|
NOTE 7. NOTES RECEIVABLE BACKED BY REAL ESTATE
The following table summarizes information about our notes receivable backed by real estate (dollars in thousands):
|
| Balance Outstanding |
|
| Interest Rates |
| Maturity Dates | |
Balance at January 1, 2016 |
| $ | 235,050 |
|
| 2.0% – 10.0% |
| February 2016 – April 2017 |
Additions |
|
| - |
|
|
|
|
|
Repayments |
|
| (202,950 | ) |
|
|
|
|
Balance at December 31, 2016 |
| $ | 32,100 |
|
| 5.8% – 10.0% |
| April 2017 – December 2017 |
NOTE 8. OTHER ASSETS AND OTHER LIABILITIES
The following table summarizes our other assets, net gains or losses recognized upon their disposition are presented asDiscontinued Operations in the Consolidated Statements of Operations for all periods presented. Interest expense is included in discontinued operations onlyamortization and depreciation, if it is directly attributable to these properties.
Discontinued operations are summarized as follows for the years endedapplicable, at December 31 (in thousands):
2013 | 2012 | 2011 | ||||||||||
Rental income and recoveries | $ | 34,105 | $ | 128,162 | $ | 171,103 | ||||||
Rental expenses | (10,633) | (40,925) | (48,528) | |||||||||
Depreciation and amortization | (15,339) | (43,197) | (61,465) | |||||||||
Interest expense | (1,163) | (3,213) | (2,718) | |||||||||
|
|
|
|
|
| |||||||
Income attributable to disposed properties and assets held for sale | 6,970 | 40,827 | 58,392 | |||||||||
Net gains on dispositions | 117,738 | 65,927 | 64,489 | |||||||||
Impairment charges | - | (30,596) | (2,659) | |||||||||
Income tax on dispositions | (1,188) | (233) | (3,216) | |||||||||
|
|
|
|
|
| |||||||
Total discontinued operations | $ | 123,520 | $ | 75,925 | $ | 117,006 |
|
| 2016 |
|
| 2015 |
| ||
Leasing commissions |
| $ | 286,821 |
|
| $ | 229,645 |
|
Rent leveling |
|
| 285,824 |
|
|
| 226,239 |
|
Acquired lease intangibles |
|
| 267,907 |
|
|
| 433,949 |
|
Prepaid assets |
|
| 120,361 |
|
|
| 107,000 |
|
Accounts receivable |
|
| 110,918 |
|
|
| 89,611 |
|
Fixed assets |
|
| 102,830 |
|
|
| 94,178 |
|
Value added taxes receivable |
|
| 94,713 |
|
|
| 86,115 |
|
Derivative assets |
|
| 47,114 |
|
|
| 53,579 |
|
Management contracts |
|
| 41,993 |
|
|
| 46,293 |
|
Other notes receivable |
|
| 35,824 |
|
|
| 41,262 |
|
Deferred income taxes |
|
| 14,052 |
|
|
| 14,650 |
|
Other |
|
| 88,633 |
|
|
| 91,989 |
|
Totals |
| $ | 1,496,990 |
|
| $ | 1,514,510 |
|
The following table summarizes our other liabilities, net of amortization, if applicable, at December 31 (in thousands):
|
| 2016 |
|
| 2015 |
| ||
Tenant security deposits |
| $ | 206,301 |
|
| $ | 190,160 |
|
Unearned rents |
|
| 90,233 |
|
|
| 77,730 |
|
Income tax liabilities |
|
| 68,666 |
|
|
| 81,125 |
|
Acquired lease intangibles |
|
| 31,707 |
|
|
| 55,976 |
|
Environmental liabilities |
|
| 24,572 |
|
|
| 21,484 |
|
Deferred income |
|
| 21,629 |
|
|
| 29,197 |
|
Value added taxes payable |
|
| 15,888 |
|
|
| 10,272 |
|
Derivative liabilities |
|
| 1,268 |
|
|
| 13,729 |
|
Other |
|
| 167,055 |
|
|
| 154,702 |
|
Totals |
| $ | 627,319 |
|
| $ | 634,375 |
|
75
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table summarizes the expected future amortization of leasing commissions and foregone rent into amortization expense and above and below market leases and rent leveling net assets into rental revenues, all based on the balances at December 31, 2016 (in thousands):
|
| Amortization Expense |
|
| Net (Increase) Decrease to Rental Revenues |
| ||
2017 |
| $ | 135,263 |
|
| $ | (24,939 | ) |
2018 |
|
| 98,435 |
|
|
| 25,795 |
|
2019 |
|
| 76,315 |
|
|
| 40,306 |
|
2020 |
|
| 59,969 |
|
|
| 46,465 |
|
2021 |
|
| 44,137 |
|
|
| 41,831 |
|
Thereafter |
|
| 106,325 |
|
|
| 158,943 |
|
Totals |
| $ | 520,444 |
|
| $ | 288,401 |
|
All debt is held directly or indirectlyincurred by the Operating Partnership. The REIT itselfParent does not have any indebtedness, but guarantees the unsecured debt of the Operating Partnership. We generally do not guarantee the debt issued by non-wholly owned subsidiaries.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
OurThe following table summarizes our debt consisted of the following as ofat December 31 (dollars in thousands):
2013 | 2012 | |||||||||||||||
Weighted Average Interest Rate (1) | Amount Outstanding (2) | Weighted Average Interest Rate (1) | Amount Outstanding | |||||||||||||
Credit Facilities | 1.2% | $ | 725,483 | 1.5% | $ | 888,966 | ||||||||||
Senior notes (3) | 4.5% | 5,357,933 | 5.6% | 5,223,136 | ||||||||||||
Exchangeable senior notes (4) | 3.3% | 438,481 | 4.6% | 876,884 | ||||||||||||
Secured mortgage debt (5) | 5.6% | 1,696,597 | 4.0% | 3,625,908 | ||||||||||||
Secured mortgage debt of consolidated entities (6) | 4.7% | 239,992 | 4.4% | 450,923 | ||||||||||||
Other debt of consolidated entities | - | - | 4.8% | 67,749 | ||||||||||||
Term loan | 1.7% | 535,908 | 1.7% | 639,636 | ||||||||||||
Other debt (7) | 6.2% | 16,822 | 6.2% | 17,592 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | 4.2% | $ | 9,011,216 | 4.4% | $ | 11,790,794 |
|
| 2016 |
|
| 2015 |
| ||||||||||
|
| Weighted Average Interest Rate (1) |
|
| Amount Outstanding (2) |
|
| Weighted Average Interest Rate (1) |
|
| Amount Outstanding |
| ||||
Credit facilities |
|
| 1.0 | % |
| $ | 35,023 |
|
| - |
|
| $ | - |
| |
Senior notes (3) |
|
| 3.3 | % |
|
| 6,417,492 |
|
|
| 3.3 | % |
|
| 6,516,392 |
|
Term loans |
|
| 1.4 | % |
|
| 1,484,523 |
|
|
| 2.1 | % |
|
| 2,100,009 |
|
Unsecured other (4) |
|
| 6.1 | % |
|
| 14,478 |
|
|
| 6.2 | % |
|
| 15,448 |
|
Secured mortgages (5) |
|
| 4.9 | % |
|
| 979,585 |
|
|
| 5.1 | % |
|
| 1,172,473 |
|
Secured mortgages of consolidated entities (6) |
|
| 3.0 | % |
|
| 1,677,193 |
|
|
| 2.9 | % |
|
| 1,822,509 |
|
Totals |
|
| 3.2 | % |
| $ | 10,608,294 |
|
|
| 3.2 | % |
| $ | 11,626,831 |
|
(1) | The interest rates presented represent the effective interest rates (including amortization of debt issuance costs and the |
(2) | Included in the outstanding balances are borrowings denominated in non-U.S. |
(3) | Notes are due |
(4) | The |
(5) | Debt is due May 2018 to December 2025 with effective interest rates ranging from 0.4% to 7.8% at December 31, 2016. The debt is secured by 145 real estate properties with an aggregate undepreciated cost of $2.4 billion at December 31, 2016. |
(6) | Debt is due July 2017 to December 2027 with effective interest rates ranging from 2.4% to 5.3% at December 31, 2016. The debt is secured by 208 real estate properties with an aggregate undepreciated cost of $3.0 billion at December 31, 2016. |
Credit Facilities
On July 11, 2013, we terminated our existing
We have a global senior credit facility and entered into a new facility (the “Global Facility”). Under the new facility, funds, under which we may be drawndraw in U.S. dollar,British pounds sterling, Canadian dollars, euro, Japanese yen British pound sterling and Canadian dollarU.S. dollars on a revolving basis upbasis. In 2016, we renewed and amended the Global Facility to $2.0increase our availability from $2.3 billion to $3.0 billion (subject to currency fluctuations). We mayhave the ability to increase the Global Facility to $3.0$3.8 billion, (subjectsubject to currency fluctuations and obtaining additional lender commitments). The Global Facility is scheduled to mature on July 11, 2017; however, we may extend the maturity date by six months twice, subject to satisfaction of certain conditions and payment of extension fees.commitments. Pricing under the Global Facility, including the spread over LIBOR, facility fees and letter of credit fees, varies based uponon the public debt ratings of the Operating Partnership. The Global Facility contains customary representations, covenantsis scheduled to mature in April 2020; however, we may extend the maturity date for six months on two occasions, subject to the satisfaction of certain conditions and defaults (includingpayment of extension fees.
76
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We also have a cross-acceleration to other recourse indebtedness of more than $50 million).
On August 14, 2013, we entered into a fourth amended and restated¥45 billion ($384.4 million at December 31, 2016) Japanese yen revolver (the “Revolver”). As a result, we increased our with availability under the Revolver to ¥45.0increase to ¥56.5 billion (approximately $428.8($482.6 million at December 31, 2013). The Revolver matures on May 14, 2018. We may increase availability under the Revolver to an amount not exceeding ¥56.5 billion (approximately $538.4 million at December 31, 2013)2016), subject to obtaining additional lender commitments. Pricing under the Revolver, was consistent withincluding the Global Facility at December 31, 2013.spread over LIBOR, facility fees and letter of credit fees, varies based on the public debt ratings of the Operating Partnership. The Revolver contains certain customary representations, covenants and defaults that are substantially the same as the corresponding provisions of the Global Facility.is scheduled to mature in May 2018.
We refer to the Global Facility and the Revolver, collectively, as our “Credit Facilities.”
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Commitments and availability underThe following table summarizes information about our Credit Facilities were as follows (dollars in millions):
2013 | 2012 | 2011 |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||||||||||||
For the years ended December 31: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Weighted average daily interest rate | 1.7 % | 1.6 % | 2.7 % |
|
| 1.4 | % |
|
| 1.1 | % |
|
| 1.1 | % | |||||||||
Weighted average daily borrowings | $ | 789.1 | $ | 815.2 | $ | 870.9 |
| $ | 128 |
|
| $ | 261 |
|
| $ | 182 |
| ||||||
Maximum borrowings outstanding at any month-end | $ | 1,325.4 | $ | 1,633.9 | $ | 2,368.1 |
| $ | 307 |
|
| $ | 942 |
|
| $ | 742 |
| ||||||
As of December 31: | ||||||||||||||||||||||||
Aggregate borrowing capacity | $ | 2,450.9 | $ | 2,118.3 | $ | 2,184.6 | ||||||||||||||||||
At December 31: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Aggregate lender – commitments |
| $ | 3,306 |
|
| $ | 2,662 |
|
| $ | 2,742 |
| ||||||||||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Borrowings outstanding | $ | 725.5 | $ | 888.9 | $ | 934.9 |
|
| 35 |
|
|
| - |
|
|
| - |
| ||||||
Outstanding letters of credit | $ | 73.2 | $ | 68.0 | $ | 85.0 |
|
| 36 |
|
|
| 32 |
|
|
| 35 |
| ||||||
Aggregate remaining capacity available | $ | 1,652.2 | $ | 1,161.4 | $ | 1,164.7 | ||||||||||||||||||
Current availability |
| $ | 3,235 |
|
| $ | 2,630 |
|
| $ | 2,707 |
|
In February 2013, we entered into a $500 million bridge loan under which we can borrow in U. S. dollar, euro or yen. We borrowed ¥20 billion ($215.7 million) under the bridge loan to make our initial cash investment in NPR. In connection with the contribution of properties to NPR, we paid the borrowings outstanding on this bridge loan and terminated the facility.
Senior Notes
The senior unsecured notes are issued by the Operating Partnershipunsecured and guaranteed by the REIT. Ourour obligations under the senior notes are effectively subordinated in certain respects to any of our debt that is secured by a lien on real property, to the extent of the value of such real property. The senior notes require interest payments be made quarterly, semi-annually or annually. All of the senior and other notes are redeemable at any time at our option, subject to certain prepayment penalties. Such redemptionrepurchase and other terms are governed by the provisions of indenture agreements, various note purchase agreements and aor trust deed.deeds.
In connection with
During the equity offering in April 2013 (see Note 10 for additional details),years ended December 31 we repaid $202.3 million of outstandingissued the following senior notes (dollars and euros in thousands):
|
| Principal Amount |
|
| Stated Interest Rate |
|
| Effective Interest Rate |
|
| Maturity Date | |||||||
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 2015 (1) |
| € | 700,000 |
|
| $ | 785,470 |
|
|
| 1.4% |
|
|
| 1.5% |
|
| May 2021 |
October 2015 |
|
|
|
|
| $ | 750,000 |
|
|
| 3.8% |
|
|
| 4.0% |
|
| November 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 2014 (1) |
| € | 700,000 |
|
| $ | 959,420 |
|
|
| 3.4% |
|
|
| 3.5% |
|
| February 2024 |
June 2014 (1) |
| € | 500,000 |
|
| $ | 680,550 |
|
|
| 3.0% |
|
|
| 3.1% |
|
| June 2026 |
October 2014 (1) |
| € | 600,000 |
|
| $ | 756,420 |
|
|
| 1.4% |
|
|
| 1.4% |
|
| October 2020 |
(1) | This debt is denominated in euro and the exchange rate used to calculate into U.S. dollar was the effective rate at the date of the transaction. |
77
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table summarizes our outstanding term loans at maturityDecember 31 (dollars and incurred $32.6 million of debt extinguishment costs, primarily due to the prepayment of $350.0 million of senior notes that were scheduled to matureborrowing currency in 2014.thousands):
In August 2013,
Term Loan | Borrowing Currency |
| Initial Borrowing Date |
| Lender Commitment at 2016 |
|
| Amount Outstanding at 2016 |
|
| Amount Outstanding at 2015 |
|
| Interest Rate |
| Maturity Date | ||||||
|
|
|
|
| Borrowing Currency |
| USD |
|
| USD |
|
| USD |
|
|
|
|
| ||||
2014 Yen Term Loan (1) | JPY |
| May 2014 |
|
|
|
|
|
|
|
| $ | - |
|
| $ | 339,858 |
|
| LIBOR plus 1.20% |
|
|
Euro Term Loan (2) | USD, EUR, JPY and GBP |
| June 2014 |
| € | 500,000 |
| $ | 525,000 |
|
|
| 193,293 |
|
|
| 561,879 |
|
| LIBOR plus 0.98% |
| June 2017 |
Senior Term Loan (3) | USD |
| May 2015 |
|
|
|
|
|
|
|
|
| - |
|
|
| 400,000 |
|
| LIBOR plus 1.00% |
|
|
2015 Yen Term Loan (1) | JPY |
| June 2015 |
|
|
|
|
|
|
|
|
| - |
|
|
| 539,906 |
|
| LIBOR plus 1.10% |
|
|
2015 Canadian Term Loan | CAD |
| December 2015 |
| $ | 371,925 |
| $ | 276,322 |
|
|
| 276,322 |
|
|
| 267,872 |
|
| CDOR rate plus 1.50% |
| February 2023 |
Yen Term Loan (1) | JPY |
| August 2016 |
| ¥ | 120,000,000 |
| $ | 1,025,057 |
|
|
| 1,025,057 |
|
|
| - |
|
| Yen LIBOR plus 0.65% |
| August 2022 and 2023 |
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
| 1,494,672 |
|
|
| 2,109,515 |
|
|
|
|
|
Debt issuance costs, net |
|
|
|
|
|
|
|
|
|
|
|
| (10,149 | ) |
|
| (9,506 | ) |
|
|
|
|
Totals |
|
|
|
|
|
|
|
|
|
|
| $ | 1,484,523 |
|
| $ | 2,100,009 |
|
|
|
|
|
(1) | In March 2016, we entered into an unsecured senior term loan agreement under which we could draw in Japanese yen and borrowed ¥11.2 billion ($99.5 million). In August 2016, we entered into a separate unsecured senior term loan agreement (the “Yen Term Loan”) under which we can draw in Japanese yen, of which ¥50.0 billion ($427.1 million at December 31, 2016) matures in August 2022 and ¥70.0 billion ($597.9 million at December 31, 2016) matures in August 2023. We may increase the borrowings up to ¥200.0 billion ($1.7 billion at December 31, 2016), subject to obtaining additional lender commitments. In the third quarter of 2016, we borrowed on the Yen Term Loan ($1.2 billion) and used the proceeds to repay and cancel the previous outstanding Japanese yen term loans entered into in 2014 and 2015 and 2016. The Yen Term Loan was fully drawn at December 31, 2016. |
(2) | We may increase the borrowings up to €1.0 billion ($1.1 billion at December 31, 2016), subject to obtaining additional lender commitments. We may pay down and reborrow on this term loan. We may extend the maturity date twice, by one year each, subject to the satisfaction of certain conditions and payment of an extension fee. |
(3) | We entered into the Senior Term Loan in connection with the KTR transaction and initially borrowed $1.0 billion. During 2016, we paid down the remaining balance and cancelled Senior Term Loan. |
Secured Mortgage Debt
During 2016, we issued $1.25secured mortgage debt totaling $152.6 million. The debt has a stated interest rate of 3.3% (an effective interest rate of 3.5%) and matures in January 2022.
TMK bonds are a financing vehicle in Japan for special purposes companies known as TMKs. In 2016, we issued ¥25.7 billion ($244.6 million) of new TMK bonds and paid off or transferred substantially all of our outstanding TMK bonds leaving one TMK bond outstanding for ¥20.0 billion ($170.8 million at December 31, 2016). During 2015, we issued new TMK bonds totaling ¥23.0 billion ($191.0 million).
Debt Covenants
We have approximately $6.5 billion of senior notes and $1.5 billion of term loans outstanding at December 31, 2016, under three separate indentures, as follows: (i) $400.0 million at an interest rate of 2.75% maturing in 2019, at 99.97% of par value for an all-in rate of 2.76%;supplemented, and (ii) $850.0 million at an interest rate of 4.25% maturing in 2023, at 99.74% of par value for an all-in rate of 4.28%. In connection with this issuance, we tendered for several series of debt maturing in 2018 through 2020. Pursuantare subject to this tender, we acquired a principal amount of debt aggregatingcertain financial covenants. We are also subject to $611.4 million and recognized a $114.1 million loss from the early extinguishment. We used the remaining proceeds of this issuance to repay borrowings onfinancial covenants under our Credit Facilities.Facilities and certain secured mortgage debt. At December 31, 2016, we were in compliance with all of our debt covenants.
In November 2013, we issued $500.0 million of senior notes with an interest rate of 3.35% and maturing in 2021, at 99.98% of par value for an all-in rate of 3.35%. In connection with this issuance, we tendered for several series of debt maturing in 2018. Pursuant to this tender, we acquired a principal amount of debt aggregating to $299.0 million and recognized a $50.6 million loss from the early extinguishment. We used the remaining proceeds of this issuance to repay borrowings on our Credit Facilities.
In December 2013, we issued €700.0 million ($950.5 million) of senior notes at an interest rate of 3.00% and maturing in 2022, at 99.48% of par value for an all-in rate of 3.08%. In connection with this issuance, we repurchased €407.5 million ($562.0 million) of senior notes maturing in 2014, and recognized a $16.0 million loss from the early extinguishment. We used the remaining proceeds of this issuance to repay borrowings on our Credit Facilities.78
During 2013, we also repurchased senior debt maturing in 2018 through 2020. As a result, we acquired a principal amount of debt aggregating $214.5 million and recognized a $43.2 million loss from early extinguishment.
Exchangeable Senior Notes
We issued three series of exchangeable senior notes in 2007 and 2008 and refer to them collectively as the “2007 and 2008 Exchangeable Notes.” The 2007 and 2008 Exchangeable Notes were senior obligations of Prologis and were exchangeable, under certain circumstances, for cash, our common stock or a combination of cash and our common stock, at our option. In April 2012, we redeemed $448.9 million of the exchangeable notes that were issued in March 2007, which was when the holders had the right to require us to repurchase their notes for cash. In January 2013, we redeemed $141.4 million of the exchangeable notes issued in November 2007. In May 2013, we redeemed $270.1 million of the exchangeable notes issued in May 2008. In June 2013, we redeemed the remainder of the 2007 and 2008 Exchangeable Notes for a total of $72.1 million.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Principal payments due on our debt, for each year through the period ending December 31, 2026, and thereafter were as follows at December 31, 2016 (in thousands):
| Unsecured |
|
|
|
|
|
|
| ||||||||||||
|
| Credit |
|
| Senior |
|
| Term Loans |
|
| Secured |
|
|
|
|
| ||||
Maturity |
| Facilities |
|
| Notes |
|
| and Other |
|
| Mortgage Debt |
|
| Total |
| |||||
2017 (1) (2) |
| $ | - |
|
| $ | - |
|
| $ | 194,150 |
|
| $ | 428,196 |
|
| $ | 622,346 |
|
2018 |
|
| 35,023 |
|
|
| 175,000 |
|
|
| 961 |
|
|
| 570,291 |
|
|
| 781,275 |
|
2019 |
|
| - |
|
|
| 618,294 |
|
|
| 1,084 |
|
|
| 446,360 |
|
|
| 1,065,738 |
|
2020 |
|
| - |
|
|
| 831,071 |
|
|
| 1,190 |
|
|
| 428,725 |
|
|
| 1,260,986 |
|
2021 |
|
| - |
|
|
| 1,237,871 |
|
|
| 1,012 |
|
|
| 141,548 |
|
|
| 1,380,431 |
|
2022 |
|
| - |
|
|
| 737,870 |
|
|
| 427,886 |
|
|
| 163,172 |
|
|
| 1,328,928 |
|
2023 |
|
| - |
|
|
| 850,000 |
|
|
| 874,916 |
|
|
| 174,624 |
|
|
| 1,899,540 |
|
2024 |
|
| - |
|
|
| 737,870 |
|
|
| 911 |
|
|
| 133,308 |
|
|
| 872,089 |
|
2025 |
|
| - |
|
|
| 750,000 |
|
|
| 976 |
|
|
| 134,727 |
|
|
| 885,703 |
|
2026 |
|
| - |
|
|
| 527,050 |
|
|
| 696 |
|
|
| 1,223 |
|
|
| 528,969 |
|
Thereafter |
|
| - |
|
|
| - |
|
|
| 5,368 |
|
|
| 1,161 |
|
|
| 6,529 |
|
Subtotal |
|
| 35,023 |
|
|
| 6,465,026 |
|
|
| 1,509,150 |
|
|
| 2,623,335 |
|
|
| 10,632,534 |
|
Premiums (discounts), net |
|
| - |
|
|
| (19,573 | ) |
|
| - |
|
|
| 43,286 |
|
|
| 23,713 |
|
Debt issuance costs, net |
|
| - |
|
|
| (27,961 | ) |
|
| (10,149 | ) |
|
| (9,843 | ) |
|
| (47,953 | ) |
Totals |
| $ | 35,023 |
|
| $ | 6,417,492 |
|
| $ | 1,499,001 |
|
| $ | 2,656,778 |
|
| $ | 10,608,294 |
|
(1) | We expect to repay the amounts maturing in 2017 with cash generated from operations, proceeds from dispositions of wholly owned real estate properties, or as necessary, with borrowings on our Credit Facilities. |
(2) | Included in 2017 maturities is the Euro Term Loan that can be extended until 2019. |
Interest expense related toExpense
The following table summarizes the 2007 and 2008 Exchangeable Notescomponents of interest expense for the years ended December 31 included the following components (dollars in(in thousands):
2013 | 2012 | 2011 | ||||||||||
Coupon rate | $ | 3,655 | $ | 14,312 | $ | 24,810 | ||||||
Amortization of discount | 4,169 | 18,425 | 32,393 | |||||||||
Amortization of deferred loan costs | 490 | 1,280 | 2,071 | |||||||||
|
|
|
|
|
| |||||||
Interest expense | $ | 8,314 | $ | 34,017 | $ | 59,274 | ||||||
|
|
|
|
|
| |||||||
Effective interest rate | 5.9 % | 5.7 % | 5.7 % |
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Gross interest expense |
| $ | 383,098 |
|
| $ | 394,012 |
|
| $ | 377,666 |
|
Amortization of premium, net |
|
| (30,596 | ) |
|
| (45,253 | ) |
|
| (21,440 | ) |
Amortization of debt issuance costs |
|
| 15,459 |
|
|
| 13,412 |
|
|
| 14,116 |
|
Interest expense before capitalization |
| $ | 367,961 |
|
| $ | 362,171 |
|
| $ | 370,342 |
|
Capitalized amounts |
|
| (64,815 | ) |
|
| (60,808 | ) |
|
| (61,457 | ) |
Net interest expense |
| $ | 303,146 |
|
| $ | 301,363 |
|
| $ | 308,885 |
|
Total cash paid for interest, net of amounts capitalized |
| $ | 322,442 |
|
| $ | 345,916 |
|
| $ | 258,441 |
|
On March 16, 2010,
Early Extinguishment of Debt
In 2014 and 2015, we issued $460.0repurchased or repaid certain debt before the maturity date in an effort to reduce our borrowing costs and extend our debt maturities. As a result, we recognize gains or losses represented by the difference between the recorded debt (including premiums and discounts and related debt issuance costs) and the consideration we paid to retire the debt, including fees.
79
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table summarizes the activity related to the repurchase of debt and net loss on early extinguishment of debt for the years ending December 31 (in millions):
|
| 2015 |
|
| 2014 |
| ||
Senior notes: |
|
|
|
|
|
|
|
|
Original principal amount |
| $ | 709.7 |
|
| $ | 1,290.4 |
|
Cash purchase price |
| $ | 789.0 |
|
| $ | 1,460.3 |
|
Term loans: |
|
|
|
|
|
|
|
|
Original principal amount |
| $ | 600.0 |
|
| $ | - |
|
Cash repayment price |
| $ | 600.0 |
|
| $ | - |
|
Secured mortgage debt: |
|
|
|
|
|
|
|
|
Original principal amount |
| $ | 571.5 |
|
| $ | 528.0 |
|
Cash repayment price |
| $ | 595.5 |
|
| $ | 531.2 |
|
Total: |
|
|
|
|
|
|
|
|
Original principal amount |
| $ | 1,881.2 |
|
| $ | 1,818.4 |
|
Cash purchase / repayment price |
| $ | 1,984.5 |
|
| $ | 1,991.5 |
|
Losses on early extinguishment of debt |
| $ | 86.3 |
|
| $ | 165.3 |
|
During 2016, we repaid certain debt at the earliest available payment date with no prepayment costs. As a result, we recorded a gain of $2.5 million, which related to premiums associated with the extinguished debt, net of 3.3%remaining debt issuance costs.
Exchangeable Senior Notes
We had exchangeable senior notes maturing in 2015 (“2010 Exchangeable Notes”). The 2010 Exchangeable Notes are exchangeable at any time by holders at an initial conversion rate of 25.8244 shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $38.72 per share, subject to adjustment upon the occurrence of certain events. The holders of the notes have the right to require us to repurchase their notes for cash at any time on or prior to the maturity date upon a change in control or a termination of trading (each as defined in the notes). Based on current conversion rates, 11.9 million shares would be required to settle the principal amount in stock for the 2010 Exchangeable Notes. The conversion of the 2010 Exchangeable Notes into stock, and the corresponding adjustment to interest expense, are included in our computation of diluted earnings per share/unit, unless the impact is anti-dilutive. During 2013, 2012, and 2011, the impact of these notes was anti-dilutive.
The 2010 Exchangeable Notes arethat were issued by the Operating Partnership and arewere exchangeable into common stock of the REIT.Parent. The accounting for the 2010 Exchangeable Notesexchangeable senior notes required us to separate the fair value of the derivative instrument (exchange feature) from the debt instrument and account for it separately as a derivative contract beginning withderivative. During the Merger date. At each reporting period, we adjustperiods, any adjustments to the fair value of the derivative instrument to fair value with the resulting adjustment beingwere recorded in earnings asForeign Currency and Derivative Gains (Losses), Net.Net. The derivative on the debt instrument was amortized over the term of the exchangeable notes. During March 2015, the holders of the exchangeable notes exchanged $459.8 million of their notes for 11.9 million shares of common stock of the Parent and $0.2 million of their notes for cash.
The fair value of the exchange option was $43.0 million immediately before the exchange in March 2015. When the debt was exchanged into common stock, the value of the derivative associated with the 2010 Exchangeable Notesdebt was a liability of $41.0 million and $39.8 million at December 31, 2013 and December 31, 2012, respectively.reclassified to Additional Paid-In Capital. We recognized unrealized gains of $8.3 million during the first quarter of 2015 and unrealized losses of $1.2 million and $22.3 million for the years ended December 31, 2013 and 2012, respectively and an unrealized gain of $45.0$10.3 million for the year ended December 31, 2011.
Secured Mortgage Debt
TMK bonds are a financing vehicle2014 on the change in Japan for special purpose companies known as TMKs. In 2013, we issued ¥10.6 billion ($106.4 million)fair value of new TMK bonds with maturity dates ranging from August 2014 to October 2016 and interest rates ranging from 0.5% to 0.9%. Subsequently, we paid off or transferred substantially all of our outstanding TMKs. At December 31, 2013, we had one TMK bond outstanding for ¥1.5 billion ($14.3 million as of December 31, 2013) with an interest rate of 0.5% and a maturity date of October 2016. The remaining TMK bond is secured by one property with an undepreciated cost of $58.7 million at December 31, 2013.
In connection with a property acquisition and the acquisition of a controlling interest in certain of our co-investment ventures in 2013, we assumed secured mortgage debt of $190.4 million.
Term Loan
We have a senior term loan agreement where we may obtain loans in an aggregate amount not to exceed €487.5 million ($672.3 million at December 31, 2013). The loans can be obtained in U.S. dollar, euro, Japanese yen, and British pound sterling. We may increase the borrowings to approximately €987.5 million ($1.4 billion at December 31, 2013), subject to obtaining additional lender commitments. We fully drew the senior term loan and used the proceeds to pay off two term loans assumed in connectionderivative instrument associated with the Merger and the remainder to pay down borrowings on our Credit Facilities. The loan agreement was scheduled to mature on February 2, 2014, with an option to extend the maturity date three times, in each case up to one year, subject to satisfaction of certain conditions and payment of extension fees. In January 2014, we extended the maturity to February 2015.
Debt Covenants
We have approximately $5.8 billion of senior notes and exchangeable senior notes outstanding as of December 31, 2013. The senior notes were issued under three separate indentures, as supplemented, and are subject to certain financial covenants. The exchangeable senior notes, as well as approximately $128.1 million of notes that were not exchanged for Prologis senior notes at the time of the Merger, are not subject to financial covenants.
We are also subject to financial covenants under our Credit Facilities and certain secured mortgage debt.
As of December 31, 2013, we were in compliance with all of our debt covenants.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10. STOCKHOLDERS’ EQUITY OF PROLOGIS, INC.
Debt Maturities
Principal payments due on our consolidated debt during each of the years in the ten-year period ending December 31, 2023, and thereafter are as follows (in millions):Shares Authorized
Prologis | ||||||||||||||||||||||||||||||||
Unsecured | Secured Mortgage Debt | Total | Consolidated Entities’ Debt | Total Consolidated Debt | ||||||||||||||||||||||||||||
Senior | Exchangeable | Credit | Other | |||||||||||||||||||||||||||||
Maturity | Debt | Notes | Facilities (1) | Debt (2) | ||||||||||||||||||||||||||||
2014(3) | $ | 25 | $ | - | $ | - | $ | 537 | $ | 293 | $ | 855 | $ | 11 | $ | 866 | ||||||||||||||||
2015 | 175 | 460 | - | 1 | 134 | 770 | 9 | 779 | ||||||||||||||||||||||||
2016 | 641 | - | - | 1 | 456 | 1,098 | 126 | 1,224 | ||||||||||||||||||||||||
2017 | 438 | - | 456 | 1 | 226 | 1,121 | 4 | 1,125 | ||||||||||||||||||||||||
2018 | 667 | - | 269 | 1 | 110 | 1,047 | 74 | 1,121 | ||||||||||||||||||||||||
2019 | 693 | - | - | 1 | 285 | 979 | 2 | 981 | ||||||||||||||||||||||||
2020 | 379 | - | - | 1 | 6 | 386 | 2 | 388 | ||||||||||||||||||||||||
2021 | 500 | - | - | - | 6 | 506 | 2 | 508 | ||||||||||||||||||||||||
2022 | 965 | - | - | - | 7 | 972 | 3 | 975 | ||||||||||||||||||||||||
2023 | 850 | - | - | - | 7 | 857 | 1 | 858 | ||||||||||||||||||||||||
Thereafter | - | - | - | 10 | 130 | 140 | 5 | 145 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Subtotal | $ | 5,333 | $ | 460 | $ | 725 | $ | 553 | $ | 1,660 | $ | 8,731 | $ | 239 | $ | 8,970 | ||||||||||||||||
Unamortized (discounts) premiums, net | 25 | (22) | - | - | 37 | 40 | 1 | 41 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total | $ | 5,358 | $ | 438 | $ | 725 | $ | 553 | $ | 1,697 | $ | 8,771 | $ | 240 | $ | 9,011 |
Interest Expense
Interest expense from continuing operations included the following components for the years ended December 31 (in thousands):
2013 | 2012 | 2011 | ||||||||||
Gross interest expense | $ | 471,923 | $ | 578,518 | $ | 498,518 | ||||||
Amortization of discount (premium), net | (39,015) | (36,687) | 228 | |||||||||
Amortization of deferred loan costs | 14,374 | 16,781 | 20,476 | |||||||||
|
|
|
|
|
| |||||||
Interest expense before capitalization | 447,282 | 558,612 | 519,222 | |||||||||
Capitalized amounts | (67,955) | (53,397) | (52,651) | |||||||||
|
|
|
|
|
| |||||||
Net interest expense | $ | 379,327 | $ | 505,215 | $ | 466,571 | ||||||
|
|
|
|
|
| |||||||
Total cash paid for interest, net of amounts capitalized | $ | 426,528 | $ | 546,627 | $ | 467,400 |
Shares Authorized
At December 31, 2013,2016, 1.1 billion shares were authorized to be issued by the REIT,Parent, of which 1.0 billion shares represent common stock. The BoardOur board of directors (the “Board”) may, without stockholder approval, classify or reclassify any unissued shares of our stock from time to time by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms or conditions of redemption of such shares. As of December 31, 2013, we had 498.8
Common Stock
We issued 1.7 million and 3.3 million shares of common stock outstanding.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Common Stock
On April 30, 2013, we completed a public offering of 35.65under our at-the-market program during 2015 and 2014, respectively, which generated $71.5 million shares of common stock at a price of $41.60 per share, generating approximately $1.4 billionand $140.1 million in net proceeds.
In June 2013, we entered intoproceeds, respectively. We have an equity distribution agreement that allows us to sell up to $750$750.0 million aggregate gross sales proceeds of shares of common stock, in an at-the-market offering program,of which $535.2 million remains available for sale, through twosix designated agents, who earn a fee of up to 2% of the gross proceeds, as agreed to on a transaction-by-transaction basis. We have not issued any shares of common stock under this program.
Under the 2012 Long-Term Incentive Plan and Outside Trustees Plan,(the “LTIP”), certain of our employees and outside directors wereare able to participate in stock-basedequity-based compensation plans that provided compensation, generally in the form of common stock. In 2012, the new Prologis, Inc. 2012 Long-Term Incentive Plan was approved, which replaced all prior active incentive plans. See Note 13 for additional information on these plans. Under these plans, wethis plan. We received gross proceeds and issued sharesfor the issuance of common stock as followsupon the exercise of stock options of $39.5 million, $18.2 million and $25.8 million, for the years ended December 31, (in thousands),2016, 2015 and 2014, respectfully. See Note 13 for additional information on this plan.
2013 | 2012 | 2011 | ||||||||||
Gross proceeds received | $ | 22,410 | $ | 30,980 | $ | 749 | ||||||
Shares of common stock issued | 1,358 | 2,258 | 793 |
Limited partnership units were redeemed for $4.9 millionPreferred Stock
At December 31, 2016, and $5.8 million in 2013 and 2012, respectively. We did not redeem any limited partnership units in 2011. See Note 12 for more details.
In 2011, in connection with the Merger, holders of ProLogis common shares received 0.4464 of a newly issued share of AMB common stock, ProLogis became a subsidiary of AMB and AMB changed its name to Prologis, Inc. Because ProLogis was the accounting acquirer (as discussed in Note 3), the historical ProLogis shares outstanding were adjusted by the Merger exchange ratio and restated. As of the Merger date, 169.6 million shares were added to reflect the outstanding shares of common stock of AMB. In addition, in June 2011 we issued 34.5 million shares of common stock generating net proceeds of $1.1 billion.
Preferred Stock
On April 19, 2013, we redeemed all of the outstanding series L, M, O, P, R and S preferred stock. We recognized a loss of $9.1 million in the first quarter of 2013, which primarily represented the difference between redemption value and carrying value net of deferred issuance costs. This amount was recognized in March when we notified the holders of2015 our intent to redeem these series of preferred stock.
We have two million shares of seriesSeries Q preferred stock our only remaining outstanding series of preferred stock, with a liquidation preference of $50 per share, a par value of $0.01, andhad a dividend rate of 8.54%, whichand will be redeemable at our option on or after November 13, 2026. Holders have, subject to certain conditions, limited voting rights and all holders are entitled to receive cumulative preferential dividends based uponon liquidation preference. The dividends are payable quarterly in arrears on the last
80
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
day of March, June, September, and December.each quarter. Dividends are payable when, and if, they have been declared by the Board, out of funds legally available for the payment of dividends. The cash redemption price (other than the portion consisting of accrued and unpaid dividends) is payable solely out of the cumulative sales proceeds of our other capital stock, which may include stock of other series of preferred stock.
We had the following preferred stock issued and outstanding as of December 31 (in thousands):
2013 | 2012 | |||||||
Series L | $ | - | $ | 49,100 | ||||
Series M | - | 57,500 | ||||||
Series O | - | 75,300 | ||||||
Series P | - | 50,300 | ||||||
Series Q | 100,000 | 100,000 | ||||||
Series R | - | 125,000 | ||||||
Series S | - | 125,000 | ||||||
|
|
|
| |||||
Total preferred stock | $ | 100,000 | $ | 582,200 |
Ownership Restrictions
For us to qualify as a real estate investment trust under the Internal Revenue Code,REIT, five or fewer individuals may not own more than 50% of the value of our outstanding stock at any time during the last half of our taxable year. Therefore, our charter restricts beneficial ownership (or
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ownership generally attributed to a person under the real estate investment trust tax rules,REIT rules), by a person, or persons acting as a group, of issued and outstanding common and series Q preferred stock that would cause that person to own or be deemed to own more than 9.8% (by value or number of shares, whichever is more restrictive) of our issued and outstanding capital stock. Further,Furthermore, subject to certain exceptions, no person shall at any time directly or indirectly acquire ownership of more than 25% of any of the series Q preferred stock. These provisions assist us in protecting and preserving our real estate investment trustREIT status and protect the interests of stockholders in takeover transactions by preventing the acquisition of a substantial block of outstanding shares of stock.
Shares of stock owned by a person or group of personspeople in excess of these limits are subject to redemption by us. The provision does not apply where a majority of the Board, in its sole and absolute discretion, waives such limit after determining that theour status of us as a real estate investment trustREIT for federal income tax purposes will not be jeopardized or the disqualification of us as a real estate investment trust is advantageous to our shareholders.jeopardized.
Dividends
In 2013, 2012 and 2011, we paid all of our dividends in cash. The following summarizes the taxability of our common and preferred stock dividends for the years ended December 31:
2013 (1) | 2012 | 2011 | ||||||||||
Common Stock: (2) | ||||||||||||
Ordinary income | $ | - | $ | 0.38 | $ | 0.07 | ||||||
Qualified dividend | - | 0.20 | 0.01 | |||||||||
Capital gains | 1.12 | 0.54 | 0.84 | |||||||||
Return of capital | - | - | 0.14 | |||||||||
|
|
|
|
|
| |||||||
Total distribution | $ | 1.12 | $ | 1.12 | $ | 1.06 | ||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series L (3): | ||||||||||||
Ordinary income | $ | - | 0.55 | 0.15 | ||||||||
Qualified dividend | - | 0.28 | - | |||||||||
Capital gains | 0.41 | 0.80 | 1.07 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.41 | 1.63 | 1.22 | ||||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series M (3): | ||||||||||||
Ordinary income | $ | - | 0.57 | 0.15 | ||||||||
Qualified dividend | - | 0.30 | - | |||||||||
Capital gains | 0.42 | 0.82 | 1.11 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.42 | 1.69 | 1.26 | ||||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series O (3): | ||||||||||||
Ordinary income | $ | - | 0.59 | 0.16 | ||||||||
Qualified dividend | - | 0.31 | - | |||||||||
Capital gains | 0.44 | 0.85 | 1.15 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.44 | 1.75 | 1.31 | ||||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series P (3): | ||||||||||||
Ordinary income | $ | - | 0.58 | 0.15 | ||||||||
Qualified dividend | - | 0.30 | - | |||||||||
Capital gains | 0.43 | 0.83 | 1.13 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.43 | 1.71 | 1.28 | ||||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series Q (4): | ||||||||||||
Ordinary income | $ | - | $ | 1.44 | $ | 0.38 | ||||||
Qualified dividend | - | 0.75 | 0.04 | |||||||||
Capital gains | 4.27 | 2.08 | 3.85 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 4.27 | $ | 4.27 | $ | 4.27 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2013 (1) | 2012 | 2011 | ||||||||||
Preferred Stock - Series R (4): | ||||||||||||
Ordinary income | $ | - | $ | 0.57 | $ | 0.15 | ||||||
Qualified dividend | - | 0.30 | 0.02 | |||||||||
Capital gains | 0.42 | 0.82 | 1.52 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.42 | $ | 1.69 | $ | 1.69 | ||||||
|
|
|
|
|
| |||||||
Preferred Stock - Series S (4): | ||||||||||||
Ordinary income | $ | - | $ | 0.57 | $ | 0.15 | ||||||
Qualified dividend | - | 0.30 | 0.02 | |||||||||
Capital gains | 0.42 | 0.82 | 1.52 | |||||||||
|
|
|
|
|
| |||||||
Total dividend | $ | 0.42 | $ | 1.69 | $ | 1.69 |
In order toTo comply with the real estate investment trustREIT requirements of the Internal Revenue Code, we are generally required to make common and preferred stock distributionsdividends (other than capital gain distributions) to our stockholders in amounts that together at least equal to (i) the sum of (a) 90% of our “REIT taxable income” computed without regard to the dividends paid deduction and net capital gains and (b) 90% of the net income (after tax), if any, from foreclosure property, minus (ii) certain excess non-cash income. Our common stock dividenddistribution policy is to distribute a percentage of our cash flow to ensurethat ensures that we will meet the distribution requirements of the Internal Revenue Code while allowingand that allows us to also retain cash to meet other needs, such as capital improvements and other investment activities.
Our tax return for the year ended December 31, 2016, has not been filed. The taxability information presented for our dividends paid in 2016 is based on management’s estimate. Our tax returns for open tax years have not been examined by the Internal Revenue Service, other than those discussed in Note 14. Consequently, the taxability of dividends is subject to change.
In 2016, 2015 and 2014, we paid all of our dividends in cash. The following summarizes the taxability of our common and preferred stock dividends for the years ended December 31:
|
| 2016 (1) |
|
| 2015 |
|
| 2014 |
| |||
Common Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income |
| $ | 0.60 |
|
| $ | 0.36 |
|
| $ | 0.29 |
|
Qualified dividend |
|
| 0.15 |
|
|
| 0.08 |
|
|
| 0.41 |
|
Capital gains |
|
| 0.93 |
|
|
| 1.08 |
|
|
| 0.62 |
|
Total distribution |
| $ | 1.68 |
|
| $ | 1.52 |
|
| $ | 1.32 |
|
Preferred Stock – Series Q: |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income |
| $ | 2.02 |
|
| $ | 0.77 |
|
| $ | 0.71 |
|
Qualified dividend |
|
| 0.29 |
|
|
| 0.62 |
|
|
| 1.01 |
|
Capital gains |
|
| 1.96 |
|
|
| 2.88 |
|
|
| 2.55 |
|
Total dividend |
| $ | 4.27 |
|
| $ | 4.27 |
|
| $ | 4.27 |
|
(1) | Taxability for 2016 is estimated. |
Common stock dividends are characterized for federal income tax purposes as ordinary income, qualified dividend, capital gains, non-taxable return of capital or a combination of the four. Common stock dividends that exceed our current and accumulated earnings and profits (calculated for tax purposes) constitute a return of capital rather than a dividend and generally reduce the stockholder’s basis in the common stock. To the extent that a dividend exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common stock, it will generally be treated as a gain from the sale or exchange of that stockholder’s common stock. At the beginning of each year, we notify our stockholders of the taxability of the common stock dividends paid during the preceding year.
The payment of common stock dividends is dependent upon our financial condition, operating results and real estate investment trust distribution requirements and may be adjusted at the discretion of the Board during the year.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
Our tax return for the year ended December 31, 2013 has not been filed. The taxability information presented for our dividends paid in 2013 is based upon management’s estimate. Our tax returns for open tax years have not been examined by the Internal Revenue Service, other than those discussed in Note 16. Consequently, the taxability of dividends is subject to change.
NOTE 11. PARTNERS’ CAPITAL OF PROLOGIS, L.P.
For each share of common stock or preferred stock the REIT issues, the Operating Partnership issues a corresponding common or preferred partnership unit, as applicable, to the REIT in exchange for the contribution of the proceeds from the stock issuance. In addition, other third parties own common limited partnership units that make up 0.35% of the common partnership units.
As of December 31, 2013, the Operating Partnership had outstanding 498.8 million common general partnership units, 1.8 million common limited partnership units and 2.0 million preferred general partnership units.
Distributions paid to the common limited partnership units and the taxability of thethose distributions are similar to the REIT’sParent’s common stock disclosed above.
81
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In May 2015, we issued 4.5 million common limited partnership units in the Operating Partnership in connection with the KTR transaction. See Note 3 for more details on the transaction.
In connection with the acquisition of a portfolio of properties in October 2015, we issued 0.2 million common limited partnership units and 8.9 million Class A Units. The number of units issued was based upon an agreed upon price and had a per unit weighted average fair value at the date of issuance of $41.06. The Class A Units generally have the same rights as the existing common units of the Operating Partnership, except that the Class A Units are entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units receive a quarterly distribution of at least $0.40 per unit (in the event the common units receive a quarterly distribution of less than $0.40 per unit, the Class A Unit distribution would be reduced by a proportionate amount). Class A Units are convertible into common units at an initial conversion rate of one-for-one. The conversion rate will be increased or decreased to the extent that, at the time of conversion, the net present value of the distributions paid with respect to the Class A Units are less or more than the distributions paid on common units from the time of issuance of the Class A Units until the time of conversion. At December 31, 2016, the Class A Units were convertible into 8.7 million common units. The Operating Partnership may redeem the Class A Units at any time after October 7, 2025, for an amount in cash equal to the then-current number of the common units into which the Class A Units are convertible, multiplied by $43.11, subject to the holders’ right to convert the Class A Units into common units.
Distributions paid on the common units and Class A Units, and the taxability of those distributions, are similar to dividends paid on the Parent’s common stock disclosed above.
NOTE 12. NONCONTROLLING INTERESTS
Prologis, L.P.
We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the common equity. These entities include two real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are exchangeableredeemable for cash or, at our option into shares of ourthe Parent’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% of the equity and the units of the entitythese entities are not exchangeable into our common stock.
If we contribute a property to a consolidated co-investment venture,
As discussed in Note 1, the property is still reflectedParent has complete responsibility, power and discretion in the 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.
In June 2013, we acquired our partners’ interest in Prologis Institutional Alliance Fund II (“Fund II”), a consolidated co-investment venture. In connection with this transaction, we paid $245.8 million and issued 804,734 limited partnership units worth $31.3 million in one of our limited partnerships based primarily on appraised valuesday-to-day management of the properties. These units are exchangeable into an equal number of shares of our common stock.Operating Partnership. The difference betweenParent, through its majority interest, has the amount we paidright to receive benefits from and the noncontrolling interest balance at the time was not significant, but was adjusted through equity with no gain or loss recognized. As a result of this transaction, the assets and liabilities associated with this venture are now wholly owned in the Consolidated Balance Sheets.
In the second quarter of 2013, we earned a promote fee from Fund II, of $18.8 million from the fund, which was based on the venture’s cumulative returns to the investors over the lifeincur losses of the venture. OfOperating Partnership. In addition, the Operating Partnership does not have either substantive liquidation rights or substantive kick-out rights without cause or substantive participating rights that amount, $13.5 million representedcould be exercised by a simple majority of noncontrolling interests. The absence of such rights renders the third party investors’ portion and is reflectedOperating Partnership as a component ofNoncontrolling Interest inVIE. Accordingly, the Consolidated Statements of Operations. We also recognized $2.7 million of expense for the year ended December 31, 2013, inInvestment Management Expenses in the Consolidated Statements of Operations, representing the associated cash bonus paid out to certain employees pursuant to the terms of the Prologis Promote Plan, previously referred to as the Private Capital Plan.
In December 2013, we announced the formation of a new co-investment venture, Prologis U.S. Logistics Venture (“USLV”). Prologis’ partner is NBIM, whichParent is the same partner in our new European fund, PELP. On January 9, 2014, we contributed 66 properties toprimary beneficiary of and consolidates the fund. We own 55% of the equity and the venture is consolidated for accounting purposes due to the structure and voting rights of the venture.Operating Partnership.
REIT
Prologis, Inc.
The noncontrolling interestinterests of the REIT includesParent include 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 December 31, 2013, the REIT owned 99.65% of the common partnership units of the Operating Partnership.
During 2013, net earnings attributable to noncontrolling interests was $10.1 million, of which $0.5 million was a loss from continuing operations and $10.6 million was income from discontinued operations. Amounts allocated to discontinued operations for 2012 and 2011 were not considered significant.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following is a summary of thetable summarizes our ownership percentages and noncontrolling interestinterests and the consolidated entity’sentities’ total investment in real estateassets and debttotal liabilities at December 31 (dollars in thousands):
Our Ownership Percentage | Noncontrolling Interest | Total Investment In Real Estate | Debt | |||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||
Partnerships with exchangeable units (1) | various | various | $ | 75,532 | $ | 44,476 | $ | 783,052 | $ | 826,605 | $ | - | $ | - | ||||||||||||||||||
Fund II (2) | N/A | 28.2% | - | 280,751 | - | 571,668 | - | 178,778 | ||||||||||||||||||||||||
Mexico Fondo Logistico (AFORES) (3) | 20.0% | 20.0% | 220,292 | 157,843 | 457,006 | 388,960 | 191,866 | 214,084 | ||||||||||||||||||||||||
Brazil Fund (4) | 50.0% | 50.0% | 65,006 | 66,494 | - | - | - | - | ||||||||||||||||||||||||
Prologis AMS | 38.5% | 38.5% | 24,791 | 59,631 | 58,575 | 160,649 | 17,063 | 63,749 | ||||||||||||||||||||||||
Other consolidated entities | various | various | 31,465 | 43,930 | 312,358 | 404,825 | 31,063 | 62,061 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Operating Partnership noncontrolling interests | 417,086 | 653,125 | 1,610,991 | 2,352,707 | 239,992 | 518,672 | ||||||||||||||||||||||||||
Limited partners in the Operating Partnership (5) | 48,209 | 51,194 | - | - | - | - | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
REIT noncontrolling interests | $ | 465,295 | $ | 704,319 | $ | 1,610,991 | $ | 2,352,707 | $ | 239,992 | $ | 518,672 |
|
| Our Ownership Percentage |
|
| Noncontrolling Interests |
|
| Total Assets |
|
| Total Liabilities |
| ||||||||||||||||||||
|
| 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
|
| 2016 |
|
| 2015 |
| ||||||||
Prologis U.S. Logistics Venture |
|
| 55.0 | % |
|
| 55.0 | % |
| $ | 2,424,800 |
|
| $ | 2,677,642 |
|
| $ | 6,201,278 |
|
| $ | 6,788,968 |
|
| $ | 797,593 |
|
| $ | 847,084 |
|
Prologis North American Industrial Fund (1) |
|
| 66.1 | % |
|
| 66.1 | % |
|
| 486,648 |
|
|
| 490,444 |
|
|
| 2,479,072 |
|
|
| 2,619,241 |
|
|
| 1,038,708 |
|
|
| 1,165,617 |
|
Prologis Brazil Logistics Partners Fund I (1) (2) |
|
| 50.0 | % |
|
| 50.0 | % |
|
| 61,836 |
|
|
| 49,313 |
|
|
| 131,581 |
|
|
| 100,836 |
|
|
| 720 |
|
|
| 192 |
|
Other consolidated entities (3) |
| various |
|
| various |
|
|
| 99,185 |
|
|
| 102,828 |
|
|
| 866,821 |
|
|
| 985,188 |
|
|
| 34,073 |
|
|
| 42,811 |
| ||
Prologis, L.P. noncontrolling interests |
|
|
|
|
|
|
|
|
|
| 3,072,469 |
|
|
| 3,320,227 |
|
|
| 9,678,752 |
|
|
| 10,494,233 |
|
|
| 1,871,094 |
|
|
| 2,055,704 |
|
Limited partners in Prologis, L.P. (4) (5) |
|
|
|
|
|
|
|
|
|
| 394,590 |
|
|
| 432,674 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Prologis, Inc. noncontrolling interests |
|
|
|
|
|
|
|
|
| $ | 3,467,059 |
|
| $ | 3,752,901 |
|
| $ | 9,678,752 |
|
| $ | 10,494,233 |
|
| $ | 1,871,094 |
|
| $ | 2,055,704 |
|
82
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
lack the power to direct the significant activities of these ventures that most significantly impact the venture’s economic performance. We have both the power to direct the significant activities and the obligation to absorb losses and the rights to receive benefits from these ventures. As a result, we are the primary beneficiary of both ventures and consistent with prior reporting periods, we consolidate each venture within our financial statements. |
(2) | The assets of the Brazil Fund are primarily investments in unconsolidated entities of $113.1 million and $103.1 million at December 31, 2016 and 2015, respectively. For additional information on our unconsolidated investments, see Note 5. |
(3) | This line item includes our two partnerships that have issued limited partnership units to third parties, as discussed above, along with various other consolidated entities. At December 31, |
(4) |
We had 8.9 million of Class A Units that were convertible into 8.7 million and |
(5) | At December 31, |
In MayNOTE 13. LONG-TERM COMPENSATION
The 2012 the stockholdersLTIP provides for grants of awards to officers, directors, employees, and consultants of the REIT approved the Prologis, Inc. 2012 Long-Term Incentive Plan (the “2012 LTIP”), which replaced all prior active long term incentive plans (“Prior Plans”). After approval of the 2012 LTIP, no further awards could be made under the Prior Plans but outstanding awards previously granted under Prior Plans will remain outstanding in accordance with their terms. The number of shares of common stock that may be issued under the 2012 LTIP is equal to 12.0 million shares plus the aggregate number of shares available for issuance under the Prior Plans at the time the 2012 LTIP was approved, resulting in a total of 27.2 million shares that have been reserved for issuance under the 2012 LTIP. As of December 31, 2013, there were 24.5 million shares of common stock available for future issuance of which 8.6 million are subject to outstanding awards.
Officers, directors and other employees, consultants, and independent contractors of the REITParent or its subsidiaries are eligible to become participants in the 2012 LTIP.subsidiaries. Awards made under the 2012 LTIP can be in the form of stock options (non-qualified options and incentive stock options), stock appreciation rights (“SAR”),and full value awards (restricted stock, restricted stock units and performance-based shares)(“RSUs”), Operating Partnership units (“LTIP Units”), special outperformance plan type of LTIP Units and cash incentive awards.awards). An LTIP Unit represents a partnership interest in the Operating Partnership. After vesting and the satisfaction of certain conditions, an LTIP Unit may be exchangeable for a common unit in the Operating Partnership and then redeemable for a share of common stock (or cash at the election of the Operating Partnership). No participant can be granted more than 1.5 million shares of common stock under the 2012 LTIP in any one calendar year. Awards canmay be made under the 2012 LTIP until it is terminated by the Board or until the ten-year anniversary of the effective date of the plan.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)We have 27.2 million shares reserved for issuance, of which 19.4 million shares of common stock were available for future issuance at December 31, 2016. Each LTIP Unit counts as one share of common stock for purposes of calculating the limit on shares that may be issued.
Prologis Outperformance Plan (“POP” formerly “OPP”)
In 2011, in connection with the Merger, each outstanding award of ProLogis was converted into 0.4464 of a newly issued award of the REIT. Additionally, the exercise prices of stock options and the grant date fair values of full value awards have been adjustedWe allocate participation points to reflect the conversion of the underlying award. Values of stock options, restricted stock and restricted stock units of AMB were adjustedparticipants under our POP corresponding to their current fair value as a result of the Merger.three-year performance periods beginning January 1. The fair value adjustment related to vested awards was recognized as an adjustment to paid-in capital and the portion of the adjustment related to unvested awards is beingare measured at the beginning of the performance period and amortized to expense over the remaining service periods.
Performance Plans
We grant performance-based incentive awards under twoapplicable performance compensation plans approved by the compensation committee of the Board in 2012. Under the approved performance plans, referred to as the Outperformance Plan and the Prologis Promote Plan, certain officers and employees may earn incentive compensation in the form of cash incentive awards or stock awards. The plans are designed such that awards will be paid only as a result of extraordinary performance by the Company.
Outperformance Plan (“OPP”)
OPPperiod. POP awards are earned to the extent our total shareholderstockholder return (“TSR”) for the performance period exceeds the TSR for the MSCIMorgan Stanley Capital International (“MSCI”) US REIT Index for the same period plus 100 basis points.points (the “Index”). If this outperformance hurdle is met, the compensation pool is equal to 3% of the excess value created, subject to a maximum of the greater of $75 million or 0.5% of the our equity market capitalization at the start of the performance period. Each participant is allocatedeligible to receive a percentage of the total compensation pool. Awards earned, if any, forpool based on the number of participation points allocated to the participant. If the performance periodcriteria are met, the participants’ points will generally be paid in eitherthe form of common stock or cash.POP LTIP Units (as discussed below). If the performance criteria are not met, the participants’ points will be forfeited. Awards earned at the end of the performance period cannot be paid to participants unless our absolute TSR, as defined in the plan, is positive for the performance period. If we outperform the Index, but the absolute TSR is not positive, payment will be delayed until such time as our absolute TSR becomes positive. If after seven years our absolute TSR has not become positive, the awards will be forfeited.
In February 2013, we granted points
The POP was amended in 2016. Starting with the 2016 – 2018 performance period, if the relevant performance thresholds are met, participants can earn POP awards for their share of an aggregate fair value of $23.9 million asperformance pool up to $75 million. If earned, these POP awards will be paid after the end of the dateinitial three-year performance period. If our levels of outperformance warrant an aggregate performance pool greater than $75 million, then participants can earn their share of the grantadditional award amount in excess of $75 million up to the Capitalization Cap (the “Excess Award Amount”) during the course of a three-year period after the end of the initial performance period.
83
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
One-third of this Excess Award Amount can be earned at the end of each of the three years after the initial performance period, if our performance meets or exceeds the Index in each of such three years. POP continues to include certain positive TSR requirements, which must be met before participants can be paid awards under POP. In addition, participants will not be able to sell or transfer any equity they receive as initial or excess POP awards until three years after the end of the initial performance period. This amendment impacted the 2016 POP awards, but not the previously issued awards.
We use a Monte Carlo valuation model to value the points allocated under the POP. Participants can elect to choose the form of payment of awards earned, if any, in common stock of the Parent or POP LTIP Units. If and as elected by the participant, POP participation points are exchanged for POP LTIP Units. If the performance criteria are not met, the POP LTIP Units will be forfeited. At December 31, 2016, all awards are equity classified.
The following table details the assumptions using a Monte Carlo valuation model that assumed a risk free interest rate of 0.39%, an expected volatility of 46% for Prologis and 30%each grant based on the year it was granted (dollars in thousands):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Risk free interest rate |
|
| 0.99 | % |
|
| 0.86 | % |
|
| 0.67 | % |
Expected volatility |
|
| 20.5 | % |
|
| 28.0 | % |
|
| 38.0 | % |
Aggregate fair value |
| $ | 26,600 |
|
| $ | 26,500 |
|
| $ | 23,100 |
|
The performance criteria was met for the index of selected peer companies and an expected service period of 3 years. Such points relate to a three-year2014 – 2016 performance period, that began onwhich resulted in an aggregate performance pool of $62.2 million awarded in January 1, 2013, and will end on December 31, 2015. If the performance criteria are met, the participants’ points will be paid2017 in the form of common stock.either vested RSUs or POP LTIP Units.
The performance criteria were not met for the 2012 – 2014 and 2013 – 2015 performance periods, therefore, no awards were earned and the awards were forfeited for such performance periods. As the 2013 awardPOP has market-based performance criteria, there is equity-classified,no adjustment to the fair valueexpense previously recognized at the completion of the award was measured at the grant-date and amortized over the performance period.
In 2012, we granted points relating to a three-year performance period (that began on January 1, 2012) that, if earned, were payable in cash. These awards were liability-classified and the fair value was re-measured on a quarterly basis and the expense was adjusted. On May 1, 2013, the compensation committeeregardless of the Board approved a modification of the settlement terms for the awards to be paid in shares of common stock. The award was reclassified from liability to equity based on the fair value at the modification date of $36.1 million using the Monte Carlo simulation model that assumed a risk free interest rate of 0.17%, an expected volatility of 27% for Prologis and 18% for the index of selected peer companies and an expected service period of 1.7 years. 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.outcome.
We recognized $23.0 million and $9.0 million of compensation expense relating to the OPP awards during the years ended December 31, 2013 and 2012, respectively.
Prologis Promote Plan (“PPP”)
Under the PPP, we establishedestablish a compensation pool equal to 40% of the aggregate incentive feespromotes earned by Prologis under agreements with our co-investment ventures. Each participant was allocated a percentagethat represents the third-party portion of the total compensation poolpromotes. The awards may be settled in some combination of cash, RSUs or for each co-investment venture in February 2012.certain participants LTIP Units. The firstRSUs and LTIP Units have a three-year vesting period.
The following table details the equity awards were madegranted under the PPP in August 2013. The total value of these PPP awards, $5.3 million, was settled in cash ($2.7 million) and RSUs (68,855 RSUs with a grant date fair value of $2.6 million and a three-year vesting period).
We evaluatefor the likelihood that we will earn incentive fees from our co-investment ventures on a quarterly basis. We record an accrual when it becomes probable and estimable that we will earn these fees. Atyear ended December 31 2013,(in thousands):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
RSUs granted |
|
| 77 |
|
|
| - |
|
|
| 57 |
|
Grant date fair value of RSUs granted |
| $ | 4,126 |
|
| $ | - |
|
| $ | 2,327 |
|
LTIP Units granted |
|
| 197 |
|
|
| - |
|
|
| 113 |
|
Grant date fair value of LTIP Units granted |
| $ | 8,984 |
|
| $ | - |
|
| $ | 4,692 |
|
Restricted Stock Units (“RSUs”)
In addition to the RSUs granted under the PPP, we accrued $1.3 million of compensation expense associated with incentive fees earned from the conclusion of SGP Mexico.
Full Value Awards
We have granted full value awards, generally in the form of restricted stock units (“RSUs”) and performance-based awards (“PSAs”),grant RSUs to certain employees, generally on an annual basis. We also grant deferred stock units (“DSUs”)Each RSU represents the right to our outside directors. Full value awards each representreceive one share of common stock of the Parent and generally vestvests over a continued service period. Full value awardsThe RSUs earn cash dividends or dividend equivalent units (“DEUs”) (at our common stock dividend rate) overduring the vesting period. Theperiod and are, therefore, considered participating securities. We charge the value of the dividends and DEUs is chargeddividend to retained earnings. The fair value of the full value awardsRSU is generally based on the market price of ourthe Parent’s common stock on the date the award is granted and is charged to compensation expense over the vesting or service period. For RSUs and PSAs, the vesting period, which is generally three years.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In 2011, we granted a target number of PSAs of 280,525, which were then earned based on specified performance criteria over a one-year performance period. Based on the attainment of specified individual and company performance goals, a total of 326,475 were earned. Earned PSAs were then subjected to a two-year vesting period. No PSAs were granted in 2012 or 2013.
DSUs issued in 2011 were fully vested at grant. DSUs granted since 2011 vest on the earlier of the date of the first annual meeting of stockholders after the grant date or the first anniversary of the grant date and are subject to a two-year deferral period after vest.
The weighted average fair value offollowing table summarizes the full value awards granted during the years ended December 31, 2013, 2012 and 2011 was $40.24, $32.60, and $34.13, respectively.
Summary of Activity of ouractivity for RSUs and PSAs
The activity for the year ended December 31, 2013 with respect to our RSU and PSA awards was as follows:2016 (units in thousands):
Number of Shares | Weighted Average Grant-Date Fair Value | Number of Shares Vested | ||||||||||
Balance at January 1, 2013 | 1,999,348 | $ | 32.28 | 47,680 | ||||||||
|
| |||||||||||
Granted | 1,288,457 | 40.24 | ||||||||||
Vested | (939,464) | 31.86 | ||||||||||
Forfeited | (81,898) | 36.66 | ||||||||||
|
|
|
|
|
| |||||||
Balance at December 31, 2013 | 2,266,443 | $ | 36.82 | 79,306 |
Restricted Stock
Restricted stock awards are full value awards that were granted under AMB’s Prior Plans prior to the Merger. Restricted stock awards are valued based on the market price of common stock on the grant date. The vesting period for restricted stock is generally three to four years. We recognize the value of the restricted stock earned as compensation expense over the applicable service period, which is generally the vesting period. Restricted stock has voting rights during the vesting period.
The activity for the year ended December 31, 2013, with respect to our unvested restricted stock was as follows:
|
| Number of RSUs |
|
| Weighted Average Grant-Date Fair Value |
|
| Number of RSUs Vested |
| |||
Balance at January 1, 2016 |
|
| 1,626 |
|
| $ | 42.21 |
|
|
| 109 |
|
Granted |
|
| 843 |
|
|
| 38.53 |
|
|
|
|
|
Vested and distributed |
|
| (807 | ) |
|
| 41.70 |
|
|
|
|
|
Forfeited |
|
| (45 | ) |
|
| 41.08 |
|
|
|
|
|
Balance at December 31, 2016 |
|
| 1,617 |
|
| $ | 40.58 |
|
|
| 125 |
|
Number of Shares | Weighted Average Grant-Date Fair Value | |||||||
Balance at January 1, 2013 | 687,277 | $ | 34.03 | |||||
Vested | (391,790) | 34.05 | ||||||
Forfeited | (18,326) | 34.07 | ||||||
|
|
|
| |||||
Balance at December 31, 2013 | 277,161 | $ | 34.00 |
Stock Options
Stock options outstanding were primarily granted under AMB’s Prior Plans, which were fair valued as of the Merger Date. No stock options have been granted subsequent to the Merger. Each stock option is exercisable into one share of common stock at an exercise price equal to the market price of our common stock on the grant date. Stock options granted to employees had graded vesting over a three or four year period while stock options granted to outside directors generally vested immediately or within one year of the grant. The maximum contractual terms of each stock option is ten years.
The activity for the year ended December 31, 2013, with respect to our stock options was as follows:
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number of Options | Weighted Average Price | Number of Options | Weighted Average Exercise Price | Weighted Average Life (in years) | ||||||||||||||||
Balance at January 1, 2013 | 7,513,217 | $ | 37.02 | |||||||||||||||||
Exercised | (869,443) | 30.69 | ||||||||||||||||||
Forfeited/Expired | (390,277) | 67.99 | ||||||||||||||||||
|
|
|
| |||||||||||||||||
Balance at December 31, 2013 | 6,253,497 | $ | 35.97 | 6,120,224 | $ | 36.04 | 4.3 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The aggregate intrinsic value of exercised options was $9.6 million, $21.3 million, and $2.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.
As discussed in Note 3, we estimated the fair value of the AMB stock options using the Black-Scholes pricing model as of the Merger date. The fair value of the vested awards were included as part of the total Merger consideration. We used the following assumptions:
| ||
| ||
| ||
| ||
|
Compensation Expense
During the years ended December 31, 2013, 2012 and 2011, we recognized $58.4 million, $56.9 million and $34.8 million, respectively, of compensation expense associated with the 2012 LTIP plan and performance plans. These amounts include expense reported asGeneral and Administrative Expenses andMerger, Acquisition and Other Integrated Expenses and are net of $18.8 million, $10.6 million and $8.7 million, respectively, that was capitalized due to our development and leasing activities.
Total remaining compensation cost related to unvested full value awards as ofRSUs outstanding at December 31, 2013,2016, was $54.7$31.4 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining expensecompensation cost will be recognized through 2017, which equates to2019, with a weighted average period of 1.4 years.
84
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Operating Partnership Long-Term Incentive Plan Units (“LTIP Units”)
LTIP Units are valued based on the market price of the Parent’s common stock on the date the award is granted and generally vest ratably over three years. Distributions are paid with respect to the LTIP Units during the vesting period and, therefore, such LTIP Units are considered participating securities. The fair value of the full value awards which vesteddistribution is charged to Net Income Attributable to Noncontrolling Interests in 2013the Operating Partnership.
The following table summarizes the activity for LTIP Units for the year ended December 31, 2016 (units in thousands):
|
| Number of LTIP Units |
|
| Weighted Average Grant-Date Fair Value |
|
| Number of LTIP Units Vested |
| |||
Balance at January 1, 2016 |
|
| 1,244 |
|
| $ | 42.21 |
|
|
| 303 |
|
Granted |
|
| 975 |
|
|
| 39.01 |
|
|
|
|
|
Balance at December 31, 2016 |
|
| 2,219 |
|
| $ | 40.81 |
|
|
| 743 |
|
Total remaining compensation cost related to LTIP Units at December 31, 2016, was $53.6 million.$38.6 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining compensation cost will be recognized through 2019, with a weighted average period of 1.4 years.
Other Plans
In 2011,Prologis Outperformance Plan Operating Partnership Long-Term Incentive Plan Units (“POP LTIP Units” formerly “OPP LTIP Units”)
At December 31, 2016, we had two 401(k) Savings Plan0.8 million, 1.4 million and Trusts, one from ProLogis1.3 million POP LTIP Units outstanding for the 2016 – 2018, 2015 – 2017 and one from AMB. Effective January 1, 2012,2014 – 2016 performance periods, respectively. The following table summarizes the AMBactivity for the POP LTIP Units for the year ended December 31, 2016 (units in thousands):
Number of POP LTIP Units | ||||
Balance at January 1, 2016 | 3,464 | |||
Granted | 953 | |||
Forfeited | (927 | ) | ||
Balance at December 31, 2016 | 3,490 |
Stock Options
We have 2.1 million stock options outstanding and exercisable at December 31, 2016, with a weighted average exercise price of $36.14 and a weighted average life of 2.5 years. The aggregate intrinsic value of exercised options was $45.6 million, $13.7 million, and $5.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. No stock options were granted in the three-year period ended December 31, 2016.
Other Plans
The Prologis 401(k) Plan merged into the ProLogis 401(k) Plan, with the Prologis Plan (the “Plan”“401(k) Plan”) continuing on as the surviving plan. The Plan provides for matching employer contributions of 50 cents$0.50 for every dollar contributed by an employee, up to 6% of the employee’s annual compensation (within the statutory compensation limit). In the 401(k) Plan, vesting in the matching employer contributions is based on the employee’s years of service, with 100% vesting at the completion of one year of service. Our contributions under the matching provisions were $2.7 million, $2.5 million and $2.2 million for 2016, 2015 and 2014, respectively.
In 2011, we had two nonqualified
We have a non-qualified savings plans to provide benefits for certain employees, one from ProLogis and one from AMB. Effective January 1, 2012, a new deferred compensation plan for Prologis was established. The purpose of this plan is to allowthat allows highly compensated employees the opportunity to defer the receipt and income taxation of a certain portion of their compensation in excess of the amount permitted under the 401(k) Plans.Plan. There has been no employer matching underin the new plan.
On a combined basis for all plans, our contributions under the matching provisions were $2.1 million, $1.8 million and $1.6 million for 2013, 2012 and 2011, respectively.
In connection with the Merger and other related activities, we incurred significant transaction, integration, and transitional costs in 2011 and 2012 (primarily in 2011). These costs included investment banker advisory fees; legal, tax, accounting and valuation fees; termination and severance costs (both cash and stock based compensation awards) for terminated and transitional employees; non-capitalized system conversion costs and other integration costs.
In 2012, we incurred $80.7 million of costs related principally to severance in connection with the Merger; system implementation costs, as portions of the project move into the phase when the costs are expensed (i.e., training and data conversion); additional costs due to the liquidation of PEPR and severance and related costs due to organizational changes in Europe to centralize finance activities and gain efficiencies. In 2011, we incurred $140.5 million of costs related principally to transaction and transitional costs directly related to the Merger, including severance, and transactional costs associated with the PEPR Acquisition. At the time of the Merger, we terminated our existing credit facilities and wrote-off the remaining unamortized deferred loan costs associated with such facilities, which is included in these costs.
Impairment of Real Estate Properties
During the yearsthree-year period ended December 31, 2012 and 2011, we recognized impairment charges related to certain of our real estate properties totaling $283.5 million and $23.9 million, respectively. We recorded no impairment charges during 2013.2016.
85
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Components of Earnings Before Income Taxes
Land
InThe following table summarizes the fourth quartercomponents of 2012, we reviewed our land bank based on our current intent to hold long-term (through the development of an industrial property) or to sell. This review resulted in a change in our intent from long-term hold to sell for some land parcels and the identification of other land parcels that had previously been impaired that are located primarily in Central and Eastern Europe for which the market had continued to lag in the global economic recovery. We had not experienced the same improvement in land values in these regional and other European markets that we had in a majority of our global markets. The fair value of the land parcels was based on internal valuations, which were corroborated primarily from brokers’ opinion of value and comparable land sales, if available. If the carrying value of the land parcel exceeded fair value, we adjusted the carrying value of the land. Accordingly, we recognized impairment charges of $77.5 million based on our evaluation of our investment in land as of December 31, 2012. Additionally during 2012, we recorded impairment charges of $11.4 million on land parcels that we expected to sell as the carrying value exceeded the fair value at that time. The fair value of the land was based on purchase and sale agreements.
Operating Properties
In the fourth quarter of 2012, we announced the signing of a definitive agreement for the formation of a new fund in Europe, PELP. Based on this agreement, we assessed the recoverability of the portfolio of assets we expected to contribute to PELP by comparing the total expected proceeds to the carrying value of the portfolio of assets as of December 31, 2012. As a result of this analysis, we recorded impairment charges of $135.3 million in continuing operations.
During 2012, we also recorded impairment charges for properties we expected to sell to third parties or contribute to co-investment ventures of $30.6 million in discontinued operations and $28.7 million in continuing operations, respectively. The impairment charges were calculated based on the carrying values of those assets compared to the fair value, which was primarily based upon letters of intent, purchase and sale agreements and third party appraisals.
During 2011, we recorded impairment charges for properties we expected to sell to third parties or contribute to co-investment ventures of $2.7 million in discontinued operations and $21.2 million in continuing operations, respectively.
Impairment of Other Assets
In the second quarter of 2011, we recorded impairment charges of $103.8 million primarily related to two of our investments in unconsolidated entities. This included our investment in NAIF III, which we concluded during the third quarter 2013, as discussed in Note 3. Based on the duration of time that the value of our investment had been less than carrying value and the lack of recovery as compared to our other real estate investments, we no longer believed the decline to be temporary. Also included was our investment in a co-investment venture in South Korea that we sold to our venture partner in July 2011. We had previously recognized an impairment associated with this investment due to the decline in value that we believed to be other than temporary.
We had a receivable from an entity that developed retail and mixed use properties in Europe that was secured by land parcels. In late 2011, the entity went into administration. In exchange for the note receivable, we received three land parcels and debt. Based on the fair value of the land less the assumption of debt received in the exchange, we impaired the remaining receivable balance of $20.5 million. In the first quarter of 2012, we recorded an additional impairment charge of $16.1 million.
Components of Loss before Income Taxes
Components of earnings (loss) before income taxes for the years ended December 31 were as follows (in thousands):
2013 | 2012 | 2011 | ||||||||||
Domestic | $ | (404,910) | $ | (65,566) | $ | (303,695) | ||||||
International | 741,172 | (37,251) | 30,527 | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) before income taxes | $ | 336,262 | $ | (102,817) | $ | (273,168) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Domestic |
| $ | 719,018 |
|
| $ | 511,025 |
|
| $ | 390,874 |
|
International |
|
| 628,086 |
|
|
| 437,580 |
|
|
| 322,754 |
|
Earnings before income taxes |
| $ | 1,347,104 |
|
| $ | 948,605 |
|
| $ | 713,628 |
|
Summary of Current and Deferred Income Taxes
Components
The following table summarizes the components of the provision for income taxes for the years ended December 31 were as follows (in thousands):
2013 | 2012 | 2011 |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||||||||||||
Current income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
United States Federal | $ | 20,009 | $ | (27,897) | $ | (9,392) | ||||||||||||||||||
U.S. federal |
| $ | 7,153 |
|
| $ | (11,633 | ) |
| $ | (6,585 | ) | ||||||||||||
International | 99,478 | 46,294 | 30,010 |
|
| 38,493 |
|
|
| 27,494 |
|
|
| 52,155 |
| |||||||||
State and local | 8,501 | 7,383 | 4,177 |
|
| 14,443 |
|
|
| 12,286 |
|
|
| 16,014 |
| |||||||||
|
|
| ||||||||||||||||||||||
Total current tax expense | 127,988 | 25,780 | 24,795 |
|
| 60,089 |
|
|
| 28,147 |
|
|
| 61,584 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Deferred income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
United States Federal | (1,133) | 152 | (1,333) | |||||||||||||||||||||
U.S. federal |
|
| (3,306 | ) |
|
| (810 | ) |
|
| (27,374 | ) | ||||||||||||
International | (18,934) | (22,119) | (18,470) |
|
| (2,219 | ) |
|
| (4,247 | ) |
|
| (59,866 | ) | |||||||||
|
|
| ||||||||||||||||||||||
Total deferred tax benefit | (20,067) | (21,967) | (19,803) |
|
| (5,525 | ) |
|
| (5,057 | ) |
|
| (87,240 | ) | |||||||||
|
|
| ||||||||||||||||||||||
Total income tax expense, included in continuing and discontinued operations | $ | 107,921 | $ | 3,813 | $ | 4,992 | ||||||||||||||||||
Total income tax expense (benefit) |
| $ | 54,564 |
|
| $ | 23,090 |
|
| $ | (25,656 | ) |
Current Income Taxes
Current income tax expense recognized during 2016 is generallyprincipally due to tax triggered upon the contribution of assets to our Mexico and Japan co-investment ventures and third party sales from our U.S.TRS. Contributions to our co-investment ventures were not significant during 2015, as such there was a function of the level oflimited impact on current income recognized by our taxable REIT subsidiaries (“TRS”), state income taxes, taxes incurred in foreign jurisdictions and interest and penalties associated with our uncertain tax positions. The increase in currentexpense. Current income tax expense during 20132014 is primarilyprincipally due to taxes triggered upon the contribution of the initial portfolio of properties of certain wholly-owned and AFORES entities to our unconsolidated co-investment ventures that were held in certain foreign jurisdictions and United States TRSs.FIBRA Prologis. Current income tax expense resulting fromduring 2015 and 2014 was netted against a current benefit recognized during each year as a result of the contribution of properties was partially offset by the utilization of net operating losses and section 163(j) interest limitation generated in prior years that had been previously recognized as deferred income tax assets in certain ofby our TRSs operating in the United States.U.S. TRS.
For the years ended December 31, 2013, 20122016, 2015 and 2011,2014, we recognized a net expense of $0.3 million and $3.0 million and a net benefit of $1.1 million for uncertain tax positions, of $1.8 million, $28.5 million and $9.0 million, respectively. The benefit that was recognized in all years relates to the reversal of certain expenses due to the expiration of the statute of limitations and settlements with the taxing authorities.
During the years ended December 31, 2013, 20122016, 2015 and 2011,2014, cash paid for income taxes, net of refunds, was $99.5$29.3 million, $38.4$24.1 million and $41.2$105.4 million, respectively.
Deferred Income Taxes
Deferred income tax is generally a function of the period’s temporary differences (principally basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income.
For federal income tax purposes, certain acquisitions have been treated as tax-free transactions resulting in a carry-over basis in assets and liabilities. For financial reporting purposes and in accordance with purchase accounting, we record all of the acquired assets and liabilities at the estimated fair values at the date of acquisition. For our taxable subsidiaries, including international jurisdictions, we recognize theThe deferred income tax liabilities that represent the tax effectbenefits recognized in 2016, 2015 and 2014 were primarily due to a reduction in book basis of the difference betweenreal estate as compared to the tax basis carried over and the fair value of the tangible and intangible assets at the date of acquisition. If taxable income is generated in these subsidiaries, we recognize a deferred income tax benefit in earnings as a result of the reversal of deferred tax liabilities from the contribution and dispositions of properties. The deferred income tax liability previouslyliabilities were originally recorded at the acquisition date andtime of acquisition. The majority of the deferred tax benefit we record current income tax expense representing the entire current income tax liability. Any increases or decreasesrecognized in 2014 was due to the reversal of deferred income tax liability recordedliabilities in connection with these acquisitions, relatedthe initial contribution of properties to tax uncertaintiesFIBRA Prologis and due to the expiration of the holding period on properties previously acquired are reflected in earnings.with existing built-in-gains.
86
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DeferredThe following table summarizes the deferred income tax assets and liabilities as ofat December 31 were as follows (in thousands):
2013 | 2012 | |||||||
Gross deferred income tax assets: | ||||||||
Net operating loss carryforwards (1) | $ | 391,764 | $ | 611,027 | ||||
Basis difference - real estate properties | 133,767 | 172,336 | ||||||
Basis difference - equity investments | 9,238 | 13,163 | ||||||
Basis difference - intangibles | 8,113 | 17,408 | ||||||
Alternative minimum tax credit carryforward | 1,387 | 1,387 | ||||||
Foreign tax credit carryforward | 1,963 | 1,963 | ||||||
Section 163(j) interest limitation | 33,224 | 53,542 | ||||||
Capital loss carryforward | 32,054 | 30,395 | ||||||
Other - temporary differences | 16,774 | 16,746 | ||||||
|
|
|
| |||||
Total gross deferred income tax assets | 628,284 | 917,967 | ||||||
Valuation allowance | (583,675) | (859,305) | ||||||
|
|
|
| |||||
Gross deferred income tax assets, net of valuation allowance | 44,609 | 58,662 | ||||||
|
|
|
| |||||
Gross deferred income tax liabilities: | ||||||||
Basis difference - real estate properties | 167,074 | 436,961 | ||||||
Built-in-gains - real estate properties | 5,409 | 6,402 | ||||||
Basis difference - equity investments | 877 | 958 | ||||||
Built-in-gains - equity investments | 21,707 | 22,053 | ||||||
Basis difference- intangibles | 8,823 | 10,591 | ||||||
Other - temporary differences | 5,269 | 5,123 | ||||||
|
|
|
| |||||
Total gross deferred income tax liabilities | 209,159 | 482,088 | ||||||
|
|
|
| |||||
Net deferred income tax liabilities | $ | 164,550 | $ | 423,426 |
|
| 2016 |
|
| 2015 |
| ||
Gross deferred income tax assets: |
|
|
|
|
|
|
|
|
Net operating loss carryforwards (1) |
| $ | 350,909 |
|
| $ | 321,144 |
|
Basis difference – real estate properties |
|
| 56,827 |
|
|
| 89,856 |
|
Basis difference – equity investments and intangibles |
|
| 4,666 |
|
|
| 15,593 |
|
Section 163(j) interest limitation |
|
| 40,766 |
|
|
| 32,684 |
|
Capital loss carryforward |
|
| 25,145 |
|
|
| 25,282 |
|
Other – temporary differences |
|
| 5,578 |
|
|
| 8,993 |
|
Total gross deferred income tax assets |
|
| 483,891 |
|
|
| 493,552 |
|
Valuation allowance |
|
| (456,699 | ) |
|
| (467,440 | ) |
Gross deferred income tax assets, net of valuation allowance |
|
| 27,192 |
|
|
| 26,112 |
|
Gross deferred income tax liabilities: |
|
|
|
|
|
|
|
|
Basis difference – real estate properties |
|
| 70,914 |
|
|
| 82,160 |
|
Basis difference – equity investments and intangibles |
|
| 6,864 |
|
|
| 6,170 |
|
Other – temporary differences |
|
| 1,028 |
|
|
| 993 |
|
Total gross deferred income tax liabilities |
|
| 78,806 |
|
|
| 89,323 |
|
Net deferred income tax liabilities |
| $ | 51,614 |
|
| $ | 63,211 |
|
(1) | At December 31, |
U.S. | Europe | Mexico | Japan | Other | ||||||||||||||||
Gross NOL carryforward | $ | 69.5 | $ | 692.5 | $ | 442.3 | $ | 118.2 | $ | 61.6 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tax-effected NOL carryforward | 26.1 | 195.6 | 132.7 | 22.7 | 14.7 | |||||||||||||||
Valuation allowance | (26.1) | (175.0) | (127.5) | (22.7) | (14.5) | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net deferred tax asset-NOL carryforward | $ | - | $ | 20.6 | $ | 5.2 | $ | - | $ | 0.2 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Expiration periods | 2027-2032 | 2014-indefinite | 2014-2023 | 2014-2022 | 2014-indefinite |
|
| U.S. |
|
| Europe |
|
| Mexico |
|
| Japan |
|
| Other |
| |||||
| Gross NOL carryforward | $ | 97,565 |
|
| $ | 640,431 |
|
| $ | 371,284 |
|
| $ | 115,154 |
|
| $ | 48,318 |
|
| Tax-effected NOL carryforward |
| 36,597 |
|
|
| 162,067 |
|
|
| 117,633 |
|
|
| 23,001 |
|
|
| 11,611 |
|
| Valuation allowance |
| (36,597 | ) |
|
| (146,684 | ) |
|
| (117,633 | ) |
|
| (23,001 | ) |
|
| (11,611 | ) |
| Net deferred tax asset – NOL carryforward | $ | - |
|
| $ | 15,383 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Expiration periods | 2023 – 2036 |
|
| 2017 – indefinite |
|
| 2017 – 2027 |
|
| 2017 – 2025 |
|
| 2017 – indefinite |
|
The decrease in net deferred tax liabilities is due to the transfer of deferred tax balances on real estate properties that were contributed to our unconsolidated co-investment ventures, principally the initial contribution of 195 properties to PELP in the first quarter of 2013.
In addition, we utilized net operating losses and section 163(j) interest limitation of $28.8 million which was generated in prior years in certain TRSs operating in the United States to offset current income tax expense resulting from the contribution of properties to our unconsolidated co-investment ventures. There was a full valuation allowance recorded against these deferred tax assets as of December 31, 2012, as the transaction was not deemed probable under the accounting rules at that time.
We record a valuation allowance against deferred tax assets in certain jurisdictions when we cannot sustain a conclusion that it is more likely than not that we can realize the deferred tax assets and NOL carryforwards during the periods in which these temporary differences become deductible. The deferred tax asset valuation allowance at December 31, 2016, is adequate to reduce the total deferred tax asset to an amount that we estimate will “more-likely-than-not”more likely than not be realized.
Liability for Uncertain Tax Positions
During the years ended December 31, 2013, 20122016, 2015 and 2011,2014, we believe that we have complied with the real estate investment trustREIT requirements of the Internal Revenue Code. The statute of limitations for our tax returns is generally three years. As such, our tax returns that
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
remain subject to examination would be primarily from 20102013 and thereafter. Our major tax jurisdictions outside the United States are Brazil, Canada, China, France, Germany, Japan, Luxembourg, Mexico, Netherlands, Poland, Singapore, Spain, and the United Kingdom.
The liability for uncertain tax positions was $3.0 million, $3.3 million and $0.3 million for the years ended December 31, 2016, 2015 and 2014, respectively, and principally consisted of estimated federal and state income tax liabilities and included accrued interest and penalties of $0.9 million and $0.8 million at December 31, 2013 and 2012, respectively. A reconciliation of the liability for uncertain tax positions was as follows (in thousands):penalties.
2013 | 2012 | |||||||
Balance at January 1, | $ | 7,943 | $ | 36,464 | ||||
Additions for tax positions taken during the current year | - | - | ||||||
Additions for tax positions taken during a prior year | 405 | 407 | ||||||
Reductions for tax positions taken during a prior year | - | (124) | ||||||
Settlements with taxing authorities | (7,030) | - | ||||||
Reductions due to lapse of applicable statute of limitations | - | (28,804) | ||||||
|
|
|
| |||||
Balance at December 31, | $ | 1,318 | $ | 7,943 |
NOTE 15. EARNINGS PER COMMON SHARE OR UNIT
We determine basic earnings per share/share or unit based on the weighted average number of shares of common stock/stock or units outstanding during the period. We compute diluted earnings per share/share or unit based on the weighted average number of shares or units outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.
87
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table sets forth the computation of our basic and diluted earnings per share/share and unit for the years ended December 31 (in thousands, except per share/share and unit amounts):
REIT | 2013 | 2012 | 2011 | |||||||||
Net earnings (loss) attributable to common stockholders | $ | 315,422 | $ | (80,946) | $ | (188,110) | ||||||
Noncontrolling interest attributable to exchangeable limited partnership units | 1,305 | (162) | (349) | |||||||||
|
|
|
|
|
| |||||||
Adjusted net earnings (loss) attributable to common stockholders | $ | 316,727 | $ | (81,108) | $ | (188,459) | ||||||
|
|
|
|
|
| |||||||
Weighted average common shares outstanding - Basic (1) | 486,076 | 459,895 | 370,534 | |||||||||
|
|
|
|
|
| |||||||
Incremental weighted average effect of exchange of limited partnership units (2) | 2,060 | 1,953 | 1,196 | |||||||||
Incremental weighted average effect of stock awards and warrants | 3,410 | - | - | |||||||||
|
|
|
|
|
| |||||||
Weighted average common shares outstanding - Diluted (3) | 491,546 | 461,848 | 371,730 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per share attributable to common stockholders - | ||||||||||||
Basic | $ | 0.65 | $ | (0.18) | $ | (0.51) | ||||||
Diluted | $ | 0.64 | $ | (0.18) | $ | (0.51) | ||||||
Operating Partnership | ||||||||||||
Net earnings (loss) attributable to common unitholders | $ | 316,630 | $ | (81,108) | $ | (188,459) | ||||||
Noncontrolling interest attributable to exchangeable limited partnership units | 97 | - | - | |||||||||
|
|
|
|
|
| |||||||
Adjusted net earnings (loss) attributable to common unitholders | $ | 316,727 | $ | (81,108) | $ | (188,459) | ||||||
|
|
|
|
|
| |||||||
Weighted average common partnership units outstanding - Basic (1) | 487,936 | 461,848 | 371,730 | |||||||||
Incremental weighted average effect on exchange of limited partnership units | 200 | - | - | |||||||||
Incremental weighted average effect of stock awards and warrants of the REIT | 3,410 | - | - | |||||||||
|
|
|
|
|
| |||||||
Weighted average common partnership units outstanding - Diluted (3) | 491,546 | 461,848 | 371,730 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - | ||||||||||||
Basic | $ | 0.65 | $ | (0.18) | $ | (0.51) | ||||||
Diluted | $ | 0.64 | $ | (0.18) | $ | (0.51) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) is as follows:
Prologis, Inc. |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Net earnings attributable to common stockholders – Basic |
| $ | 1,203,218 |
|
| $ | 862,788 |
|
| $ | 622,235 |
|
Net earnings attributable to exchangeable limited partnership units (1) |
|
| 37,079 |
|
|
| 13,120 |
|
|
| 3,636 |
|
Gains, net of expenses, associated with exchangeable debt assumed exchanged (2) |
|
| - |
|
|
| (1,614 | ) |
|
| - |
|
Adjusted net earnings attributable to common stockholders – Diluted |
| $ | 1,240,297 |
|
| $ | 874,294 |
|
| $ | 625,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – Basic |
|
| 526,103 |
|
|
| 521,241 |
|
|
| 499,583 |
|
Incremental weighted average effect on exchange of limited partnership units (1) |
|
| 16,833 |
|
|
| 8,569 |
|
|
| 3,501 |
|
Incremental weighted average effect of equity awards and warrant |
|
| 3,730 |
|
|
| 1,961 |
|
|
| 3,307 |
|
Incremental weighted average effect on exchangeable debt assumed exchanged (2) |
|
| - |
|
|
| 2,173 |
|
|
| - |
|
Weighted average common shares outstanding – Diluted (3) |
|
| 546,666 |
|
|
| 533,944 |
|
|
| 506,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
Diluted |
| $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
Prologis, L.P. |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Net earnings attributable to common unitholders |
| $ | 1,237,519 |
|
| $ | 873,914 |
|
| $ | 624,436 |
|
Net earnings attributable to Class A convertible common unitholders |
|
| (20,069 | ) |
|
| (3,393 | ) |
|
| - |
|
Net earnings attributable to common unitholders – Basic |
| $ | 1,217,450 |
|
| $ | 870,521 |
|
| $ | 624,436 |
|
Net earnings attributable to Class A convertible common unitholders |
|
| 20,069 |
|
|
| 3,393 |
|
|
| - |
|
Net earnings attributable to exchangeable limited partnership units |
|
| 2,778 |
|
|
| 1,994 |
|
|
| 1,435 |
|
Gain, net of expenses, associated with exchangeable debt assumed exchanged (2) |
|
| - |
|
|
| (1,614 | ) |
|
| - |
|
Adjusted net earnings attributable to common unitholders – Diluted |
| $ | 1,240,297 |
|
| $ | 874,294 |
|
| $ | 625,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common partnership units outstanding – Basic |
|
| 532,326 |
|
|
| 525,912 |
|
|
| 501,349 |
|
Incremental weighted average effect on exchange of Class A convertible units |
|
| 8,775 |
|
|
| 2,050 |
|
|
| - |
|
Incremental weighted average effect on exchange of limited partnership units |
|
| 1,835 |
|
|
| 1,848 |
|
|
| 1,735 |
|
Incremental weighted average effect of equity awards and warrant of Prologis, Inc. |
|
| 3,730 |
|
|
| 1,961 |
|
|
| 3,307 |
|
Incremental weighted average effect on exchangeable debt assumed exchanged (2) |
|
| - |
|
|
| 2,173 |
|
|
| - |
|
Weighted average common partnership units outstanding – Diluted (3) |
|
| 546,666 |
|
|
| 533,944 |
|
|
| 506,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per unit attributable to common unitholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 2.29 |
|
| $ | 1.66 |
|
| $ | 1.25 |
|
Diluted |
| $ | 2.27 |
|
| $ | 1.64 |
|
| $ | 1.24 |
|
(1) |
Earnings allocated to the exchangeable Operating Partnership units not held by the |
(2) | In March 2015, the exchangeable debt was settled primarily through the issuance of common stock. The |
(3) | Our total potentially dilutive |
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
| Total weighted average potentially dilutive limited partnership units |
| 10,610 |
|
|
| 3,898 |
|
|
| 1,932 |
|
| Total potentially dilutive stock awards |
| 8,444 |
|
|
| 7,299 |
|
|
| 14,366 |
|
| Total weighted average potentially dilutive shares and units from exchangeable debt |
| - |
|
|
| 2,173 |
|
|
| 11,879 |
|
| Total Prologis, L.P. |
| 19,054 |
|
|
| 13,370 |
|
|
| 28,177 |
|
| Limited partners in Prologis, L.P. |
| 6,223 |
|
|
| 4,671 |
|
|
| 1,766 |
|
| Total Prologis, Inc. |
| 25,277 |
|
|
| 18,041 |
|
|
| 29,943 |
|
In 2013 and 2012, Irving F. Lyons, III, member of the Board, Trustee of ProLogis prior to the Merger and former Chief Investment Officer, converted limited partnership units in the limited partnerships, in which we own a majority interest and consolidate, into 27,751 shares and 45,600 shares of our common stock, respectively. As of December 31, 2013, Mr. Lyons had no outstanding partnership units. See Note 12 for more information regarding these limited partnerships in the Americas.
Also see Note 5 for a discussion of transactions between us and the unconsolidated entities in which we invest.88
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 16. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Derivative Financial Instruments
In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates. To manage these risks, we may enter into various derivative contracts. Foreigncontracts, such as foreign currency contracts including forwards and options, may be used to manage foreign currency exposure. We may useexposure, and interest rate swaps to manage the effect of interest rate fluctuations. We do not use derivative financial instruments for trading or speculative purposes. The majorityAll of our derivative financial instruments are customized derivative transactions and are not exchange-traded. Management reviews our hedging program, derivative positions and overall risk management strategy on a regular basis. We only enter into only those transactions that we believe will be highly effective at offsetting the underlying risk.
Our use of derivatives does involve
See Note 2 for additional information about our derivative financial instrument policy.
The following table presents the risk that counterparties may default on a derivative contract. We establish exposure limits for each counterparty to minimize this riskfair value and provide counterparty diversification. Substantially allclassification of our derivative exposures are with counterparties that have long-term credit ratings of single-A or better. We enter into master agreements with counterparties that generally allow for netting of certain exposures; thereby significantly reducing the actual loss that would be incurred should a counterparty fail to perform its contractual obligations. To mitigate pre-settlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.
All derivatives are recognized at fair value in the Consolidated Balance Sheets within the line itemsOther Assets orAccounts Payable and Accrued Expenses, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives are designated as, and qualify as, hedging instruments.
For derivatives that will be accounted for as hedging instruments in accordance with the accounting standards, at inception of the transaction, we formally designate and document the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, we formally assess both at inception and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. The ineffective portion of a derivative financial instrument’s change in fair value, if any, is immediately recognized in earnings. Derivatives not designated as hedges are not speculative and are used to manage our exposure to foreign currency fluctuations but do not meet the strict hedge accounting requirements.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and hedges of net investments in foreign operations are recorded inAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures hedged, fluctuations in the value of the derivative instruments will generally be offset by changes in the fair values or cash flows of the underlying exposures being hedged. The changes in fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. For cash flow hedges, we reclassify changes in the fair value of derivatives into the applicable line item in the Consolidated Statements of Operations in which the hedged items are recorded in the same period that the underlying hedged items affect earnings.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Our co-investment ventures may also enter into derivative contracts. As we act as the manager of these ventures, our ventures use the same risk mitigation and exposure limits related to counterparties. In addition, these ventures primarily follow the same hedging strategy as Prologis. For our consolidated co-investment ventures, the accounting treatment is as described in this footnote. For our unconsolidated co-investment ventures, we record our proportionate share of any earnings impact inEarnings from Unconsolidated Entities, Netin the Consolidated Statements of Operations. In addition, for derivatives in our unconsolidated ventures that have been designated and qualify as hedging instruments, we record our proportionate share of the effective gain or loss as a component ofAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets. In both circumstances, we record the offsetting amount asInvestments in and Advances to Unconsolidated Entities in the Consolidated Balance Sheets.
Foreign currency hedges
We hedge the net assets of certain international subsidiaries (net investment hedges) using foreign currency derivative contracts to offset the translation and economic exposures related to our investments in these subsidiaries by locking in a forward exchange rate at the inception of the hedge. We measure the effectiveness of our net investment hedges by using the changes in forward exchange rates because this method reflects our risk management strategies, the economics of those strategies in the financial statements and better manages interest rate differentials between different countries. Under this method, all changes in fair value of the forward currency derivative contracts designated as net investment hedges are reported in equity in the foreign currency translation component ofAccumulated Other Comprehensive Loss and offsets translation adjustments on the underlying net assets of foreign entities and affiliates, which are also recorded in Accumulated Other Comprehensive Loss. Ineffectiveness, if any, is recognized in earnings.
In 2013, we entered into seven foreign currency contracts that expire in June 2017 and June 2018 with an aggregate notional amount of €599.9 million ($800.0 million using the weighted average forward rate of 1.33) to hedge a portion of our investment in Europe at a fixed euro rate in U.S. dollars. We also entered into three foreign currency contracts that expire in June 2018 with an aggregate notional amount of ¥24.1 billion ($250.0 million using the weighted average forward rate of 96.54) to hedge a portion of our investment in Japan at a fixed yen rate in U.S. dollars. Pursuant to these contracts, we will sell either euro or yen and buy U.S. dollars at the forward rate upon maturity. In addition, we will receive quarterly payments in U.S. dollars at a predetermined rate with no corresponding payments by us. These derivatives were designated and qualify as hedging instruments and, therefore, the changes in fair value of these derivatives were recorded in the foreign currency translation component ofAccumulated Other Comprehensive Lossin the Consolidated Balance Sheets.
As discussed in Note 9, we issued €700 million ($950.5 million) of debt during December 2013. This debt was issued by the Operating Partnership, which is a U.S. dollar functional entity. To mitigate the risk of fluctuations in the exchange rate of the euro, we designated the debt as a non-derivative financial instrument hedge, and as a result, the change in the value of this debt upon translation into dollars is recorded in the foreign currency translation component ofAccumulated Other Comprehensive Lossin the Consolidated Balance Sheets to offset the foreign currency fluctuations related to our investment in Europe.
In 2012, we entered into foreign currency contracts that expired in April and May 2013. These contracts were designated and qualified as hedging instruments. During 2013, we settled these contracts with a combined notional amount of $1.3 billion. As a result of these settlements, we realized a gain of $4.3 million, inOther Comprehensive Income (Loss)in the Consolidated Statements of Comprehensive Income during 2013.
We had $20.2 million recorded inOther Assetsat December 31 2013, and $30.3 million and $17.5 million recorded inAccounts Payable and Accrued Expenses at December 31, 2013 and December 31, 2012, respectively, in the Consolidated Balance Sheets relating to the fair value of our net investment hedges. Amounts included inAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets at December 31, 2013 and December 31, 2012, were gains of $0.4 million and losses of $17.5 million, respectively. None of our net investment hedges were ineffective during the year ended December 31, 2013; therefore, there was no impact on earnings. For the years ended December 31, 2013 and 2012, we recorded gains of $15.2 million and losses of $17.5 million respectively, inOther Comprehensive Income (Loss) in the Consolidated Statements of Comprehensive Income due to the change in fair value of our net investment hedges. We had no outstanding net investment hedges in 2011.(in thousands):
Interest rate hedges
|
| 2016 |
|
| 2015 |
| ||||||||||
|
| Asset |
|
| Liability |
|
| Asset |
|
| Liability |
| ||||
Net investment hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian dollar denominated |
| $ | 1,245 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Pound sterling denominated |
|
| 7,439 |
|
|
| - |
|
|
| 33,471 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards and options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro denominated (1) |
|
| 10,933 |
|
|
| - |
|
|
| 11,711 |
|
|
| 84 |
|
Pound sterling denominated (1) |
|
| 16,985 |
|
|
| - |
|
|
| 4,241 |
|
|
| 745 |
|
Yen denominated (1) |
|
| 9,246 |
|
|
| 1,071 |
|
|
| 832 |
|
|
| 717 |
|
Other (1) |
|
| 831 |
|
|
| 197 |
|
|
| 3,324 |
|
|
| 88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate hedges |
|
| 435 |
|
|
| - |
|
|
| - |
|
|
| 12,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fair value of derivatives |
| $ | 47,114 |
|
| $ | 1,268 |
|
| $ | 53,579 |
|
| $ | 13,729 |
|
(1) | As discussed in Note 2, these foreign currency contracts are not designated as hedges, with the exception of cash flow hedges denominated in pesos, which matured in 2016. |
Our interest rate risk management strategy is to limit the impact of future interest rate changes on earnings and cash flows as well as to stabilize interest expense and manage our exposure to interest rate movements. To achieve this objective, we may enter into interest rate swap agreements, which allow us to borrow on a fixed rate basis for longer-term debt issuances, or interest rate cap agreements, which allow us to minimize the impact of increases in interest rates. We typically designate our interest rate swap and interest rate cap agreements as cash flow hedges as these derivative instruments may be used to manage the interest rate risk on potential future debt issuances or to fix the interest rate on variable rate debt issuances. The maximum length of time that we hedge our exposure to future cash flows is typically less than 10 years. We use cash flow hedges to minimize the variability in cash flows of assets, liabilities or forecasted transactions caused by fluctuations in interest rates.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Foreign Currency
We have entered into interest rate swap agreements that allow us to receive variable-rate amounts from a counterpartyThe following tables summarize the activity in exchange for us making fixed-rate payments over the life of our agreements without the exchange of the underlying notional amount. We had one interest rate swap contract, which was denominated in U.S dollar, outstanding at December 31, 2013. We had $5.6 million and $28.0 million accrued inAccounts Payable and Accrued Expenses in the Consolidated Balance Sheets relating to unsettled derivativeforeign currency contracts at December 31, 2013 and 2012, respectively.
The effective portion of the gain or loss on the derivative is reported as a component ofAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets, and reclassified toInterest Expense in the Consolidated Statements of Operations over the corresponding period of the hedged item. The amounts reclassified to interest expense for the years ended December 31 2013(in millions, except for weighted average forward rates and 2011 were not considered significant. The amount reclassified to interest expense for the year ended December 31, 2012, was $14.7 million. For the next twelve months from December 31, 2013, the additional expense that will be reclassified into interest expense is not considered significant. Amounts included inAccumulated Other Comprehensive Loss in the Consolidated Balance Sheets at December 31, 2013 and 2012 were lossesnumber of $14.4active contracts):
2016 | Foreign Currency Contracts |
| |||||||||||||||||||||||||
| Net Investment Hedges |
|
| Forwards and Options |
| ||||||||||||||||||||||
Local Currency | CAD |
|
| GBP |
|
| JPY |
|
| EUR |
|
| GBP |
|
| JPY |
|
| Other |
| |||||||
Notional amounts at January 1 | $ | - |
|
| £ | 238 |
|
| ¥ | - |
|
| € | 275 |
|
| £ | 97 |
|
| ¥ | 12,840 |
|
|
|
|
|
New contracts |
| 133 |
|
|
| 90 |
|
|
| 11,189 |
|
|
| 369 |
|
|
| - |
|
|
| 15,460 |
|
|
|
|
|
Matured, expired or settled contracts |
| - |
|
|
| (297 | ) |
|
| (11,189 | ) |
|
| (470 | ) |
|
| (49 | ) |
|
| (12,800 | ) |
|
|
|
|
Notional amounts at December 31 | $ | 133 |
|
| £ | 31 |
|
| ¥ | - |
|
| € | 174 |
|
| £ | 48 |
|
| ¥ | 15,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign Currency Contracts |
| |||||||||||||||||||||||||
U.S. Dollar | Net Investment Hedges |
|
| Forwards and Options (1) |
| ||||||||||||||||||||||
Notional amounts at January 1 | $ | - |
|
| $ | 386 |
|
| $ | - |
|
| $ | 310 |
|
| $ | 148 |
|
| $ | 109 |
|
| $ | 50 |
|
New contracts |
| 100 |
|
|
| 131 |
|
|
| 99 |
|
|
| 413 |
|
|
| - |
|
|
| 146 |
|
|
| 15 |
|
Matured, expired or settled contracts |
| - |
|
|
| (471 | ) |
|
| (99 | ) |
|
| (526 | ) |
|
| (70 | ) |
|
| (111 | ) |
|
| (27 | ) |
Notional amounts at December 31 | $ | 100 |
|
| $ | 46 |
|
| $ | - |
|
| $ | 197 |
|
| $ | 78 |
|
| $ | 144 |
|
| $ | 38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average forward rate at December 31 |
| 1.33 |
|
|
| 1.51 |
|
|
| - |
|
|
| 1.13 |
|
|
| 1.54 |
|
|
| 107.68 |
|
|
|
|
|
Active contracts at December 31 |
| 2 |
|
|
| 2 |
|
|
| - |
|
|
| 24 |
|
|
| 8 |
|
|
| 30 |
|
|
| 16 |
|
89
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| Foreign Currency Contracts |
| ||||||||||||||||||||||||||||||
|
| Net Investment Hedges |
|
| Forwards and Options |
| ||||||||||||||||||||||||||
Local Currency |
| CAD |
|
| EUR |
|
| GBP |
|
| JPY |
|
| EUR |
|
| GBP |
|
| JPY |
|
| Other |
| ||||||||
Notional amounts at January 1 |
| $ | - |
|
| € | 300 |
|
| £ | 238 |
|
| ¥ | 24,136 |
|
| € | 284 |
|
| £ | - |
|
| ¥ | - |
|
|
|
|
|
New contracts |
|
| 394 |
|
|
| - |
|
|
| 118 |
|
|
| 43,373 |
|
|
| 333 |
|
|
| 199 |
|
|
| 18,740 |
|
|
|
|
|
Matured, expired or settled contracts |
|
| (394 | ) |
|
| (300 | ) |
|
| (118 | ) |
|
| (67,509 | ) |
|
| (342 | ) |
|
| (102 | ) |
|
| (5,900 | ) |
|
|
|
|
Notional amounts at December 31 |
| $ | - |
|
| € | - |
|
| £ | 238 |
|
| ¥ | - |
|
| € | 275 |
|
| £ | 97 |
|
| ¥ | 12,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign Currency Contracts |
| |||||||||||||||||||||||||||||
U.S. Dollar |
| Net Investment Hedges |
|
| Forwards and Options (1) |
| ||||||||||||||||||||||||||
Notional amounts at January 1 |
| $ | - |
|
| $ | 400 |
|
| $ | 400 |
|
| $ | 250 |
|
| $ | 354 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
New contracts |
|
| 298 |
|
|
| - |
|
|
| 186 |
|
|
| 353 |
|
|
| 375 |
|
|
| 300 |
|
|
| 159 |
|
|
| 71 |
|
Matured, expired or settled contracts |
|
| (298 | ) |
|
| (400 | ) |
|
| (200 | ) |
|
| (603 | ) |
|
| (419 | ) |
|
| (152 | ) |
|
| (50 | ) |
|
| (21 | ) |
Notional amounts at December 31 |
| $ | - |
|
| $ | - |
|
| $ | 386 |
|
| $ | - |
|
| $ | 310 |
|
| $ | 148 |
|
| $ | 109 |
|
| $ | 50 |
|
2014 |
| Foreign Currency Contracts |
| |||||||||||||
|
| Net Investment Hedges |
|
| Forwards and Options |
| ||||||||||
Local Currency |
| EUR |
|
| GBP |
|
| JPY |
|
| EUR |
| ||||
Notional amounts at January 1 |
| € | 600 |
|
| £ | - |
|
| ¥ | 24,136 |
|
| € | - |
|
New contracts |
|
| 1,746 |
|
|
| 238 |
|
|
| 79,010 |
|
|
| 365 |
|
Matured, expired or settled contracts |
|
| (2,046 | ) |
|
| - |
|
|
| (79,010 | ) |
|
| (81 | ) |
Notional amounts at December 31 |
| € | 300 |
|
| £ | 238 |
|
| ¥ | 24,136 |
|
| € | 284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign Currency Contracts |
| |||||||||||||
U.S. Dollar |
| Net Investment Hedges |
|
| Forwards and Options (1) |
| ||||||||||
Notional amounts at January 1 |
| $ | 800 |
|
| $ | - |
|
| $ | 250 |
|
| $ | - |
|
New contracts |
|
| 2,354 |
|
|
| 400 |
|
|
| 769 |
|
|
| 464 |
|
Matured, expired or settled contracts |
|
| (2,754 | ) |
|
| - |
|
|
| (769 | ) |
|
| (110 | ) |
Notional amounts at December 31 |
| $ | 400 |
|
| $ | 400 |
|
| $ | 250 |
|
| $ | 354 |
|
(1) | During 2016, 2015 and 2014, we exercised 49, 32 and 3 option contracts and realized gains of $3.0 million, $14.6 million and $1.1 million, respectively, in Foreign Currency and Derivative Gains (Losses), Net. |
We recognized unrealized gains of $19.1 million, $22.1 million and $33.8$7.7 million respectively. Toin Foreign Currency and Derivative Gains (Losses), Net from the extent the hedged debt is paid off early, the amountschange inAccumulated Other Comprehensive Loss are recognized asGains (Losses) on Early Extinguishment value of Debt, Net In the Consolidated Statements of Operations.
Losses on a derivative representing hedge ineffectiveness are recognized inInterest Expense at the time the ineffectiveness occurred. Losses due to hedge ineffectiveness were not considered material during the year ended December 31, 2013. We recorded losses of $2.4 million and $1.8 million duringour outstanding foreign currency option contracts for the years ended December 31, 20122016, 2015 and 2011,2014, respectively. Also in 2012, we recorded a loss of $11.0 million inGain (Loss)
We had no ineffectiveness on Early Extinguishment of Debt, Net related to interest rate swaps that were considered ineffective with a notional amount of $703.8 million. These derivatives were associated with debt that was paid offour foreign currency derivative contracts during 2016, 2015 or transferred in the first quarter of 2013, in connection with the contribution to our new European co-investment venture, PELP (see Note 6 for more details of this venture). When it was probable the related forecasted transaction would not occur, the hedge was deemed ineffective and the balance inAccumulated Other Comprehensive Loss was written off.2014.
Interest Rate
The following table summarizes the activity in our derivative instrumentsinterest rate swaps for the years ended December 31 as follows (in millions):
2013 | 2012 | 2011 | ||||||||||||||||||||||
Foreign Currency Forwards | Interest Rate Swaps (1) | Foreign Currency Forwards | Interest Rate Swaps (1) | Interest Rate Caps | Interest Rate Swaps (1) | |||||||||||||||||||
Notional amounts at January 1, | $ | 1,303.8 | $ | 1,314.8 | $ | - | $ | 1,496.5 | $ | - | $ | 268.1 | ||||||||||||
New contracts | 1,050.0 | - | 1,303.8 | 445.4 | - | - | ||||||||||||||||||
Acquired contracts (2) | - | - | - | 71.0 | 25.7 | 1,337.3 | ||||||||||||||||||
Matured or expired contracts | (1,303.8) | (1,243.8) | - | (698.1) | (25.7) | (108.9) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Notional amounts at December 31, | $ | 1,050.0 | $ | 71.0 | $ | 1,303.8 | $ | 1,314.8 | $ | - | $ | 1,496.5 |
|
| 2016 (1) |
|
| 2015 |
|
| 2014 |
| |||
Notional amounts at January 1 |
| $ | 1,196 |
|
| $ | 398 |
|
| $ | 71 |
|
New contracts |
|
| - |
|
|
| 1,158 |
|
|
| 398 |
|
Matured, expired or settled contracts |
|
| (925 | ) |
|
| (360 | ) |
|
| (71 | ) |
Notional amounts at December 31 |
| $ | 271 |
|
| $ | 1,196 |
|
| $ | 398 |
|
(1) | We |
In connection withJanuary 2016, the contributions to NPR, we reclassifiedBank of Japan introduced negative interest rates. As a lossresult, our two Japanese yen denominated interest rate hedges related to the 2015 yen term loan no longer qualified for hedge accounting due to a zero percent floor mismatch in the hedging relationship. These interest rate swaps of $7.8 million duringhedges were designated as cash flow hedges at December 31, 2015, and the first quarter of 2013 fromAccumulated change in fair value was recorded in Other Comprehensive LossIncome. We began recording the change in fair value of these interest rate hedges to the Consolidated Balance SheetsStatements of Income when the hedges no longer qualified for hedge accounting.
In August 2016, we entered into the Yen Term Loan and repaid our 2014, 2015 and 2016 yen term loans. At that time, we settled the outstanding contracts related toGains (Losses) the previously outstanding term loans for $26.3 million. The fair value of the contracts that qualified for hedge accounting at the date of repayment was recorded to AOCI and will be amortized to Interest Expense over the life of the original term loans. We had $13.7 million remaining in AOCI at December 31, 2016. The change in fair value on Early Extinguishmentthe unhedged portion of Debt, Netthe
90
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
contracts was recorded in the Consolidated Statements of Operations.Income. During the year ended December 31, 2016, we recorded a loss of $9.9 million, respectively, in Foreign Currency and Derivative Gains (Losses), Net. See Note 9 for further discussion of the Yen Term Loan.
During 2015, we entered into two contracts with a notional amount of $526.3 million (¥65.0 billion) to effectively fix the interest rate on the 2015 yen term loan (see above for discussion on the settlement of these contracts) and three contracts with a notional amount of CAD $371.9 million ($271.2 million) to effectively fix the interest rate on the Canadian term loan. In the third quarter of 2015, we entered into two contracts with a notional amount of $360.0 million to effectively fix the interest rate at the three month LIBOR rate of 2.3% on expected future debt issuances. These contracts were settled in the fourth quarter of 2015 when we entered into $750.0 million of senior notes. We recorded a loss of $11.0 million associated with these derivatives that will be amortized to Interest Expense, in accordance with our policy.
During 2014, we entered into two contracts with a notional amount of $398.3 million (¥40.9 billion) to effectively fix the interest rate on the 2014 yen term loan. See above for discussion on the settlement of these contracts.
See Note 9 for more information on our term loans.
Other Comprehensive Income
The change in Other Comprehensive Income in the Consolidated Statements of Comprehensive Income during the periods presented is due to the translation on consolidation of the financial statements into U.S. dollars of our consolidated subsidiaries whose functional currency is not the U.S. dollar for which we recorded losses of $304.0 million, $594.0 million and $614.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. It also includes the change in fair value for the effective portion of our derivative and nonderivative instruments that have been designated as hedges.
The following table presents the gains and (losses) associated with the change in fair value for the effective portion of our derivative and nonderivative hedging instruments included in Other Comprehensive Income for the years ended December 31 (in thousands):
|
| 2016 |
|
| 2015 |
|
| 2014 |
| |||
Derivative net investment hedges (1) |
| $ | 55,460 |
|
| $ | 63,934 |
|
| $ | 122,164 |
|
Interest rate and cash flow hedges (2) |
|
| (551 | ) |
|
| (21,714 | ) |
|
| (804 | ) |
Our share of derivatives from unconsolidated co-investment ventures |
|
| (798 | ) |
|
| 4,257 |
|
|
| (5,694 | ) |
Total derivative instruments |
|
| 54,111 |
|
|
| 46,477 |
|
|
| 115,666 |
|
Nonderivative net investment hedges (3) |
|
| 112,591 |
|
|
| 321,148 |
|
|
| 321,196 |
|
Total derivative and nonderivative hedging instruments |
| $ | 166,702 |
|
| $ | 367,625 |
|
| $ | 436,862 |
|
(1) | We received $79.8 million, $128.2 million and $13.0 million for the years ended December 31, 2016, 2015 and 2014, respectively, on the settlement of net investment hedges. |
(2) | The amount reclassified to interest expense was $5.5 million for 2016 and for 2015 and 2014 the amounts were not considered significant. For the next 12 months from December 31, 2016, we estimate an additional expense of $5.4 million will be reclassified to Interest Expense. |
(3) | At December 31, 2016, 2015 and 2014, we had €3.2 billion ($3.4 billion), €3.2 billion ($3.5 billion) and €2.5 million ($3.0 billion) of debt, net of accrued interest, respectively, designated as nonderivative financial instrument hedges of our net investment in international subsidiaries. We had €97.6 million ($118.5 million) of debt that was not designated as a nonderivative financial instrument hedge at December 31, 2014. We recognized unrealized gains of $10.0 million and $7.7 million in Foreign Currency and Derivative Gains (Losses), Net on the unhedged portion of our debt for the years ended December 31, 2015 and 2014, respectively. There were no unrealized gains or losses recognized for the year ended December 31, 2016. |
Fair Value Measurements
We have estimated the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize uponon disposition. See Note 2 for more information on our fair value measurements policy.
Fair Value Measurements on a Recurring and Non-Recurring Basis
At December 31, 20132016 and December 31, 2012,2015, other than the derivatives discussed above and in Note 9,previously, we dodid not have any significant financial assets or financial liabilities that arewere measured at fair value on a recurring basis in the Consolidated Financial Statements. We have
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts were not significant to the overall valuation. As a result, allAll of our derivatives held as ofat December 31, 20132016 and December 31, 2012,2015, were classified as Level 2 of the fair value hierarchy.
Assets
91
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Fair Value Measurements on Nonrecurring Basis
No assets met the criteria to be measured at fair value on a non-recurringnonrecurring basis in the Consolidated Financial Statements consist of real estate assets and investments in and advances to unconsolidated entities that were subject to impairment charges as discussed in Note 15. The table below aggregates the fair value of these assets at December 31, 2013 and 2012, respectively, by the levels in the fair value hierarchy (in thousands):2016 or 2015.
2013 | 2012 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Real estate assets | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 3,677,365 | $ | 3,677,365 |
Fair Value of Financial Instruments
At December 31, 20132016 and 2012, our2015, the carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts and notes receivable, accounts payable and accrued expenses were representative of their fair values due tobecause of the short-term nature of these instruments.
At December 31, 2013 and 2012, the fair value of our derivative instruments were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair values of our interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts or payments and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates, or forward curves, derived from observable market interest rate curves. The fair values of our net investment hedges are based upon the change in the spot rate at the end of the period as compared to the strike price at inception.
We incorporate credit valuation adjustments to appropriately reflect both our nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy. Although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.
At December 31, 2013 and 2012, the fair value of our senior notes and exchangeable senior notes has been estimated based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available, the fair value of our Credit Facilities has been estimated by discounting the future cash flows using rates and borrowing spreads currently available to us (Level 3), and the fair value of our secured mortgage debt and assessment bonds that do not have current quoted market prices available has been estimated by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value in the table below are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 20132016 and 2012,2015, as compared with those in effect when the debt was issued or acquired.assumed, including reduced borrowing spreads due to our improved credit ratings. The senior notes and many of the issues of secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table reflects the carrying amounts and estimated fair values of our debt as ofat December 31 (in thousands):
2013 | 2012 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Debt: | ||||||||||||||||
Credit Facilities | $ | 725,483 | $ | 725,679 | $ | 888,966 | $ | 893,577 | ||||||||
Senior notes | 5,357,933 | 5,698,864 | 5,223,136 | 5,867,124 | ||||||||||||
Exchangeable senior notes | 438,481 | 514,381 | 876,884 | 1,007,236 | ||||||||||||
Secured mortgage debt | 1,696,597 | 1,840,829 | 3,625,908 | 3,765,556 | ||||||||||||
Secured mortgage debt of consolidated entities | 239,992 | 246,324 | 450,923 | 455,880 | ||||||||||||
Other debt of consolidated entities | - | - | 67,749 | 68,751 | ||||||||||||
Term loan and other debt | 552,730 | 560,714 | 657,228 | 660,951 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total debt | $ | 9,011,216 | $ | 9,586,791 | $ | 11,790,794 | $ | 12,719,075 |
|
| 2016 |
|
| 2015 |
| ||||||||||
|
| Carrying Value |
|
| Fair Value |
|
| Carrying Value |
|
| Fair Value |
| ||||
Credit Facilities |
| $ | 35,023 |
|
| $ | 35,061 |
|
| $ | - |
|
| $ | - |
|
Senior notes |
|
| 6,417,492 |
|
|
| 6,935,485 |
|
|
| 6,516,392 |
|
|
| 6,801,118 |
|
Term loans and unsecured other |
|
| 1,499,001 |
|
|
| 1,510,661 |
|
|
| 2,115,457 |
|
|
| 2,128,270 |
|
Secured mortgages |
|
| 979,585 |
|
|
| 1,055,020 |
|
|
| 1,172,473 |
|
|
| 1,262,778 |
|
Secured mortgages of consolidated entities |
|
| 1,677,193 |
|
|
| 1,683,489 |
|
|
| 1,822,509 |
|
|
| 1,825,361 |
|
Total debt |
| $ | 10,608,294 |
|
| $ | 11,219,716 |
|
| $ | 11,626,831 |
|
| $ | 12,017,527 |
|
NOTE 17. COMMITMENTS AND CONTINGENCIES
Environmental Matters
A majority of the properties we acquire, including land, are subjected to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We establish a liability at the time of acquisition to cover such costs and adjust the liabilities as appropriate when additional information becomes available. We record our environmental liabilities in Other Liabilities. We purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liabilityliabilities that we believe would have a material adverse effect on our business, financial condition or results of operations.
Indemnification Agreements
We have indemnification agreements related to certain co-investment ventures operating outside of the United States for the contribution of certain properties.
We may enter into agreements whereby we indemnify thecertain co-investment ventures, or our venture partners, outside of the U.S. for taxes that may be assessed with respect to certain properties we contributecontributed to these ventures. Our contributions to these ventures are generally structured as contributions of shares of companies that own the real estate assets. Accordingly, the capital gains associated with the step up in the value of the underlying real estate assets, for tax purposes, are deferred and transferred at contribution. We have generally indemnified these ventures to the extent that the ventures: (i) incur capital gains or withholding tax as a result of a direct sale of the real estate asset, as opposed to a transaction in which the shares of the company owning the real estate asset are transferred or sold or (ii) are required to grant a discount to the buyer of shares under a share transfer transaction as a result of the ventures transferring the embedded capital gain tax liability to the buyer of the shares in the transaction. The agreements limit the amount that is subject to our indemnification with respect to each property to 100% of the actual tax liabilities related to the capital gains that are deferred and transferred by us to the ventures at the time of the initial contribution less any deferred tax assets transferred with the property.
The ultimate outcome under these agreements is uncertain as it is dependentdepends on the method and timing of dissolution of the related venture or disposition of any properties by the venture. In previous years, we had two agreements terminate without any amounts being due or payable by us. We consider the probability, timing and amounts in estimating our potential liability under the agreements. Liabilitiesrecord liabilities related to the indemnification agreements are recorded inOther Liabilitiesin the Consolidated Balance Sheets.. We continue to monitor these agreements and the likelihood of the sale of assets that would result in recognition and will adjust the potential liability in the future as facts and circumstances dictate.
Off-Balance Sheet Liabilities
We have issued performance and surety bonds and standby letters of credit in connection with certain development projects. Performance and surety bonds are commonly required by public agencies from real estate developers. Performance and surety bonds
92
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
are renewable and expire
upon on the completion of the improvements and infrastructure. As ofAt December 31, 20132016, and 2012,2015 we had approximately $25.5$123.5 million and $27.8$131.1 million, respectively, outstanding under such arrangements.
At December 31, 2013, we guaranteed $9.4 million of debt of certain of our unconsolidated entities.
We may be required under capital commitments or we may choose to make additional capital contributions to certain of our unconsolidated entities, representing our proportionate ownership interest, should additional capital contributions be necessary to fund development or acquisition costs, repayment of debt or operation shortfalls. See Note 5 for further discussion related to equity commitments to our unconsolidated entities.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Litigation
Litigation
In the normal course of business, fromFrom time to time, we and our unconsolidated entities are partiesparty to a variety of legal proceedings arising in the ordinary course of business. We believe that, with respect to any such matters that we are currently a party to, the ultimate disposition of any such matter will not result in ahave material adverse effect on our business, financial position or results of operations.
Our current business strategy includes two operating segments: Real Estate Operations and Investment Management.Strategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:
Real Estate Operations.This operating segment represents the ownership and development of operating properties and is the largest component of our revenues and earnings. We collect rent from our customers through operating leases, including reimbursements for the |
We own real estate in the Americas (Canada, Mexico and the United States), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China, Japan and Singapore).
|
We report the costs associated with our Investment Management segment for all periods presented in the line item Investment Management Expenses in the Consolidated Statements of Operations. These costs include the direct expenses associated with the asset management of the co-investment ventures provided by individuals who are assigned to our Investment Management segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functionsoperating costs. Each operating property is considered to be an individual operating segment with similar economic characteristics; these properties are provided by a team of professionals who are assigned to ourcombined within the reportable segment based on geographic location. Our Real Estate Operations segment. These individuals performsegment also includes development activities that lead to rental operations, including land held for development and properties currently under development. Within this line of business, we capitalize on the property-levelfollowing: (i) the land that we currently own; (ii) the development expertise of our local teams; (iii) our customer relationships; and (iv) our in-depth knowledge in connection with our development activities. Land we own and lease to customers under ground leases is also included in this segment.
Strategic Capital. This operating segment represents the management of unconsolidated co-investment ventures. We generate strategic capital revenues from our unconsolidated co-investment ventures through asset management and property management services and we earn additional revenues by providing leasing, acquisition, construction, development, financing and disposition services. Depending on the properties in our owned and managed portfolio, including properties we consolidatestructure of the venture and the propertiesreturns provided to our partners, we manage that are owned byalso earn revenues through promotes during the life of a venture or upon liquidation. Each unconsolidated entities. We allocate the costs of our property management function to the properties we consolidate (reported inRental Expenses in the Consolidated Statements of Operations) and the properties owned by the unconsolidated entities (included inInvestment Management Expenses in the Consolidated Statements of Operations), by using the square feet owned by the respective portfolios. We are further reimbursed by the co-investment ventures for certain expenses associated with managing these co-investment ventures.
Each entityventure we manage is considered to be an individual operating segment havingwith similar economic characteristics thatcharacteristics; these ventures are combined within the reportable segment based uponon geographic location. Our operations in the Investment Management segment are in the Americas (Brazil, Canada, Mexico and the United States), Europe (Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China and Japan).
We present the operations and net gains associated with properties sold to third parties or classified as held for sale as discontinued operations, which results in the restatement of prior year operating results to exclude the items presented as discontinued operations.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Reconciliations are presented below for: (i) each reportable business segment’s revenuerevenues from external customers toTotal Revenues in the Consolidated Statements of Operations;; (ii) each reportable business segment’s net operating income from external customers toEarnings (Loss) beforeOperating Income and Earnings Before Income Taxes in the Consolidated Statements of Operations;; and (iii) each reportable business segment’s assets toTotal Assetsin the Consolidated Balance Sheets.. Our chief operating decision makers rely primarily on net operating income and similar measures to make decisions about allocating resources and assessing segment performance. The applicable components ofTotal Revenues,, Operating Income, Earnings (Loss) beforeBefore Income Taxes andTotal Assets are allocated to each reportable business segment’s revenues, net operating income and assets. Items that are not directly assignable to a segment, such as certain corporate income and expenses, are not allocated but reflected as reconciling items. The following reconciliations are presented in thousands:
93
Years Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues (1): | ||||||||||||
Real estate operations: | ||||||||||||
Americas | $ | 1,288,925 | $ | 1,176,920 | $ | 821,090 | ||||||
Europe | 174,397 | 435,244 | 307,416 | |||||||||
Asia | 107,692 | 221,575 | 155,646 | |||||||||
|
|
|
|
|
| |||||||
Total Real Estate Operations segment | 1,571,014 | 1,833,739 | 1,284,152 | |||||||||
|
|
|
|
|
| |||||||
Investment management: | ||||||||||||
Americas | 72,474 | 69,422 | 76,872 | |||||||||
Europe | 63,794 | 37,047 | 46,087 | |||||||||
Asia | 43,204 | 20,310 | 14,660 | |||||||||
|
|
|
|
|
| |||||||
Total Investment Management segment | 179,472 | 126,779 | 137,619 | |||||||||
|
|
|
|
|
| |||||||
Total revenues | $ | 1,750,486 | $ | 1,960,518 | $ | 1,421,771 | ||||||
Net operating income: | ||||||||||||
Real estate operations: | ||||||||||||
Americas | $ | 899,053 | $ | 818,393 | $ | 569,843 | ||||||
Europe | 116,178 | 325,571 | 222,605 | |||||||||
Asia | 76,863 | 171,980 | 118,985 | |||||||||
|
|
|
|
|
| |||||||
Total Real Estate Operations segment | 1,092,094 | 1,315,944 | 911,433 | |||||||||
|
|
|
|
|
| |||||||
Investment management: | ||||||||||||
Americas | 18,785 | 31,637 | 42,644 | |||||||||
Europe | 41,263 | 21,699 | 30,708 | |||||||||
Asia | 30,145 | 9,623 | 9,305 | |||||||||
|
|
|
|
|
| |||||||
Total Investment Management segment | 90,193 | 62,959 | 82,657 | |||||||||
|
|
|
|
|
| |||||||
Total segment net operating income | 1,182,287 | 1,378,903 | 994,090 | |||||||||
Reconciling items: | ||||||||||||
General and administrative expenses | (229,207) | (228,068) | (195,161) | |||||||||
Depreciation and amortization | (648,668) | (724,262) | (542,419) | |||||||||
Merger, acquisition and other integration expenses | - | (80,676) | (140,495) | |||||||||
Impairment of real estate properties | - | (252,914) | (21,237) | |||||||||
Earnings from unconsolidated entities, net | 97,220 | 31,676 | 59,935 | |||||||||
Interest expense | (379,327) | (505,215) | (466,571) | |||||||||
Interest and other income, net | 26,948 | 22,878 | 12,008 | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 597,656 | 305,607 | 111,684 | |||||||||
Foreign currency and derivative gains (losses), net | (33,633) | (20,497) | 41,172 | |||||||||
Gain (loss) on early extinguishment of debt, net | (277,014) | (14,114) | 258 | |||||||||
Impairment of other assets | - | (16,135) | (126,432) | |||||||||
|
|
|
|
|
| |||||||
Total reconciling items | (846,025) | (1,481,720) | (1,267,258) | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) before income taxes | $ | 336,262 | $ | (102,817) | $ | (273,168) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
| Years Ended December 31, |
| |||||||||
|
|
| 2016 |
|
|
| 2015 |
|
|
| 2014 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate operations: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 2,040,308 |
|
| $ | 1,801,858 |
|
| $ | 1,306,194 |
|
Other Americas |
|
| 58,541 |
|
|
| 57,535 |
|
|
| 97,370 |
|
Europe |
|
| 76,759 |
|
|
| 69,527 |
|
|
| 74,413 |
|
Asia |
|
| 62,975 |
|
|
| 57,792 |
|
|
| 62,939 |
|
Total Real Estate Operations segment |
|
| 2,238,583 |
|
|
| 1,986,712 |
|
|
| 1,540,916 |
|
Strategic capital: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 39,360 |
|
|
| 39,396 |
|
|
| 84,178 |
|
Other Americas |
|
| 22,777 |
|
|
| 22,288 |
|
|
| 10,990 |
|
Europe |
|
| 185,495 |
|
|
| 112,793 |
|
|
| 86,549 |
|
Asia |
|
| 46,920 |
|
|
| 35,885 |
|
|
| 38,154 |
|
Total Strategic Capital segment |
|
| 294,552 |
|
|
| 210,362 |
|
|
| 219,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
| $ | 2,533,135 |
|
| $ | 2,197,074 |
|
| $ | 1,760,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate operations: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 1,520,571 |
|
| $ | 1,256,188 |
|
| $ | 932,151 |
|
Other Americas |
|
| 38,136 |
|
|
| 38,280 |
|
|
| 69,120 |
|
Europe |
|
| 55,563 |
|
|
| 39,672 |
|
|
| 40,627 |
|
Asia |
|
| 41,114 |
|
|
| 41,692 |
|
|
| 45,262 |
|
Total Real Estate Operations segment |
|
| 1,655,384 |
|
|
| 1,375,832 |
|
|
| 1,087,160 |
|
Strategic capital: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| (1,622 | ) |
|
| (1,925 | ) |
|
| 38,101 |
|
Other Americas |
|
| 12,755 |
|
|
| 13,277 |
|
|
| 1,911 |
|
Europe |
|
| 142,975 |
|
|
| 86,264 |
|
|
| 56,869 |
|
Asia |
|
| 11,938 |
|
|
| 4,324 |
|
|
| 7,560 |
|
Total Strategic Capital segment |
|
| 166,046 |
|
|
| 101,940 |
|
|
| 104,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment net operating income |
|
| 1,821,430 |
|
|
| 1,477,772 |
|
|
| 1,191,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
| 222,067 |
|
|
| 217,227 |
|
|
| 229,332 |
|
Depreciation and amortization expenses |
|
| 930,985 |
|
|
| 880,373 |
|
|
| 642,461 |
|
Operating income |
|
| 668,378 |
|
|
| 380,172 |
|
|
| 319,808 |
|
Earnings from unconsolidated entities, net |
|
| 206,307 |
|
|
| 159,262 |
|
|
| 134,288 |
|
Interest expense |
|
| (303,146 | ) |
|
| (301,363 | ) |
|
| (308,885 | ) |
Interest and other income, net |
|
| 8,101 |
|
|
| 25,484 |
|
|
| 25,768 |
|
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net |
|
| 757,398 |
|
|
| 758,887 |
|
|
| 725,790 |
|
Foreign currency and derivative gains (losses), net |
|
| 7,582 |
|
|
| 12,466 |
|
|
| (17,841 | ) |
Gains (losses) on early extinguishment of debt, net |
|
| 2,484 |
|
|
| (86,303 | ) |
|
| (165,300 | ) |
Earnings before income taxes |
| $ | 1,347,104 |
|
| $ | 948,605 |
|
| $ | 713,628 |
|
December 31, | ||||||||
2013 | 2012 | |||||||
Assets (2): | ||||||||
Real estate operations: | ||||||||
Americas | $ | 16,293,109 | $ | 15,236,921 | ||||
Europe | 1,634,867 | 5,738,245 | ||||||
Asia | 1,176,774 | 3,476,999 | ||||||
|
|
|
| |||||
Total Real Estate Operations segment | 19,104,750 | 24,452,165 | ||||||
|
|
|
| |||||
Investment management (3): | ||||||||
Americas | 22,154 | 24,373 | ||||||
Europe | 60,327 | 61,266 | ||||||
Asia | 3,634 | 6,108 | ||||||
|
|
|
| |||||
Total Investment Management segment | 86,115 | 91,747 | ||||||
|
|
|
| |||||
Total segment assets | 19,190,865 | 24,543,912 | ||||||
|
|
|
| |||||
Reconciling items: | ||||||||
Investments in and advances to other unconsolidated entities | 4,430,239 | 2,195,782 | ||||||
Notes receivable backed by real estate | 188,000 | 188,000 | ||||||
Assets held for sale | 4,042 | 26,027 | ||||||
Cash and cash equivalents | 491,129 | 100,810 | ||||||
Other assets | 268,032 | 255,614 | ||||||
|
|
|
| |||||
Total reconciling items | 5,381,442 | 2,766,233 | ||||||
|
|
|
| |||||
Total assets | $ | 24,572,307 | $ | 27,310,145 |
94
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| December 31, |
| ||||||
|
|
| 2016 |
|
|
| 2015 |
|
Assets: |
|
|
|
|
|
|
|
|
Real estate operations: |
|
|
|
|
|
|
|
|
U.S. |
| $ | 21,286,422 |
|
| $ | 22,030,457 |
|
Other Americas |
|
| 978,476 |
|
|
| 919,381 |
|
Europe |
|
| 1,346,589 |
|
|
| 1,291,991 |
|
Asia |
|
| 936,462 |
|
|
| 1,157,401 |
|
Total Real Estate Operations segment |
|
| 24,547,949 |
|
|
| 25,399,230 |
|
Strategic capital (1): |
|
|
|
|
|
|
|
|
U.S. |
|
| 18,090 |
|
|
| 19,363 |
|
Europe |
|
| 47,635 |
|
|
| 49,960 |
|
Asia |
|
| 1,301 |
|
|
| 2,005 |
|
Total Strategic Capital segment |
|
| 67,026 |
|
|
| 71,328 |
|
Total segment assets |
|
| 24,614,975 |
|
|
| 25,470,558 |
|
|
|
|
|
|
|
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
Investments in and advances to unconsolidated entities |
|
| 4,230,429 |
|
|
| 4,755,620 |
|
Assets held for sale or contribution |
|
| 322,139 |
|
|
| 378,423 |
|
Notes receivable backed by real estate |
|
| 32,100 |
|
|
| 235,050 |
|
Cash and cash equivalents |
|
| 807,316 |
|
|
| 264,080 |
|
Other assets |
|
| 242,973 |
|
|
| 291,036 |
|
Total reconciling items |
|
| 5,634,957 |
|
|
| 5,924,209 |
|
Total assets |
| $ | 30,249,932 |
|
| $ | 31,394,767 |
|
(1) |
Represents management contracts and goodwill recorded in connection with business combinations |
Non-cashNOTE 19. SUPPLEMENTAL CASH FLOW INFORMATION
Our significant noncash investing and financing activities for the years ended December 31, 2013, 20122016, 2015 and 2011 are as follows:2014 included the following:
As partial consideration for properties we contributed to PELP during the first quarter of 2013, we received ownership interests of $1.3 billion, representing a 50% ownership interest,We capitalized $25.8 million, $22.7 million and PELP assumed $353.2$21.6 million of secured debt.equity-based compensation expense resulting from our development and leasing activities during 2016, 2015 and 2014, respectively.
In 2016, we issued 1.9 million shares of the Parent’s common stock upon redemption of an equal number of common limited partnership units in the Operating Partnership as disclosed in Note 12.
We received $31.2 million, $17.7$135.3 million and $5.0$65.3 million of ownership interests in certain unconsolidated entities as a portion of our proceeds from the contribution of properties to these entities during 2013, 20122016 and 2011,2015, respectively.
During 2015, we assumed $290.7 million of secured mortgage debt in connection with the acquisition of real estate properties. Also, as partial consideration for the disposition of some properties acquired during 2015, the buyer assumed debt of $170.1 million.
In 2015, common limited partnership units were issued as partial consideration for the acquisition of properties as disclosed in Note 12.
See Notes 3, 9 and 12 for information related to the KTR transaction in May 2015.
We received $235.1 million of notes receivable backed by real estate in exchange for the disposition of real estate in 2015. See Note 7 for more information on our notes receivable backed by real estate.
Holders of our exchangeable senior notes exchanged the majority of their notes into common stock of the Parent in March 2015 as disclosed in Note 9.
As partial consideration for contributionsproperties we contributed to FIBRA Prologis and dispositions in 2013, the buyersconclusion of an unconsolidated co-investment venture during 2014, we received equity valued at $609.7 million and FIBRA Prologis assumed debt$345.1 million of $194.9 million.secured debt. See Note 4 for additional information about this transaction.
See Note 3 for information related to the Merger and PEPR Acquisitionacquisitions of controlling interests in 2011 and acquisitions ofour unconsolidated co-investment ventures in 2012 and 2013.2014.
In April 2011, we assumed $61.7 million of debt upon the acquisition of the remaining interest in a venture that owned one property in Japan.
95
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 20. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly 2013 and 2012 data has been adjusted from previously disclosed amounts due to the disposal of properties in 2013 whose results of operations were reclassified toDiscontinued Operations in the Consolidated Statements of Operations. The following table details our selected quarterly financial data was as follows (in thousands, except per share and unit data):
Three Months Ended, | ||||||||||||||||
REIT | March 31, | June 30, | September 30, | December 31, | ||||||||||||
2013: | ||||||||||||||||
Total revenues | $ | 479,971 | $ | 410,693 | $ | 423,058 | $ | 436,764 | ||||||||
Operating income | $ | 97,039 | $ | 58,514 | $ | 77,380 | $ | 71,479 | ||||||||
Earnings (loss) from continuing operations | $ | 289,306 | $ | (20,591) | $ | (48,671) | $ | 9,485 | ||||||||
Net earnings (loss) attributable to common stockholders | $ | 265,416 | $ | (1,517) | $ | (7,534) | $ | 59,057 | ||||||||
Net earnings (loss) attributable to common stockholders - Basic (1) | $ | 0.58 | $ | - | $ | (0.02) | $ | 0.12 | ||||||||
Net earnings (loss) attributable to common stockholders - Diluted (1)(2) | $ | 0.57 | $ | - | $ | (0.02) | $ | 0.12 | ||||||||
2012: | ||||||||||||||||
Total revenues | $ | 469,456 | $ | 492,012 | $ | 492,942 | $ | 506,108 | ||||||||
Operating income (loss) | $ | 81,522 | $ | 97,482 | $ | 76,522 | $ | (162,543) | ||||||||
Earnings (loss) from continuing operations | $ | 186,217 | $ | (15,192) | $ | (7,816) | $ | (269,606) | ||||||||
Net earnings (loss) attributable to common stockholders | $ | 202,412 | $ | (8,119) | $ | (46,526) | $ | (228,713) | ||||||||
Net earnings (loss) attributable to common stockholders - Basic (1) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
Net earnings (loss) attributable to common stockholders - Diluted (1)(2) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
Operating Partnership | ||||||||||||||||
2013: | ||||||||||||||||
Total revenues | $ | 479,971 | $ | 410,693 | $ | 423,058 | $ | 436,764 | ||||||||
Operating income | $ | 97,039 | $ | 58,514 | $ | 77,380 | $ | 71,479 | ||||||||
Earnings (loss) from continuing operations | $ | 289,306 | $ | (20,591) | $ | (48,671) | $ | 9,485 | ||||||||
Net earnings (loss) attributable to common unitholders | $ | 266,548 | $ | (1,592) | $ | (7,582) | $ | 59,256 | ||||||||
Net earnings (loss) attributable to common unitholders - Basic (1) | $ | 0.58 | $ | - | $ | (0.02) | $ | 0.12 | ||||||||
Net earnings (loss) attributable to common unitholders - Diluted (1)(2) | $ | 0.57 | $ | - | $ | (0.02) | $ | 0.12 | ||||||||
2012: | ||||||||||||||||
Total revenues | $ | 469,456 | $ | 492,012 | $ | 492,942 | $ | 506,108 | ||||||||
Operating income (loss) | $ | 81,522 | $ | 97,482 | $ | 76,522 | $ | (162,543) | ||||||||
Earnings (loss) from continuing operations | $ | 186,217 | $ | (15,192) | $ | (7,816) | $ | (269,606) | ||||||||
Net earnings (loss) attributable to common unitholders | $ | 203,353 | $ | (8,173) | $ | (46,678) | $ | (229,610) | ||||||||
Net earnings (loss) attributable to common unitholders - Basic (1) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
Net earnings (loss) attributable to common unitholders - Diluted (1)(2) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) |
|
| Three Months Ended, |
| |||||||||||||
Prologis, Inc. |
| March 31, |
|
| June 30, |
|
| September 30, |
|
| December 31, |
| ||||
2016: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 437,104 |
|
| $ | 426,150 |
|
| $ | 435,868 |
|
| $ | 435,722 |
|
Rental recoveries |
| $ | 117,012 |
|
| $ | 119,981 |
|
| $ | 124,409 |
|
| $ | 124,163 |
|
Total revenues |
| $ | 606,300 |
|
| $ | 602,155 |
|
| $ | 704,565 |
|
| $ | 620,115 |
|
Rental expenses |
| $ | (146,581 | ) |
| $ | (140,725 | ) |
| $ | (140,514 | ) |
| $ | (141,050 | ) |
Operating income |
| $ | 129,198 |
|
| $ | 142,348 |
|
| $ | 232,624 |
|
| $ | 164,208 |
|
Consolidated net earnings |
| $ | 222,805 |
|
| $ | 295,791 |
|
| $ | 307,242 |
|
| $ | 466,702 |
|
Net earnings attributable to common stockholders |
| $ | 208,041 |
|
| $ | 275,383 |
|
| $ | 279,255 |
|
| $ | 440,539 |
|
Net earnings per share attributable to common stockholders – Basic (1) |
| $ | 0.40 |
|
| $ | 0.52 |
|
| $ | 0.53 |
|
| $ | 0.83 |
|
Net earnings per share attributable to common stockholders – Diluted (1) (2) |
| $ | 0.39 |
|
| $ | 0.52 |
|
| $ | 0.52 |
|
| $ | 0.82 |
|
2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 324,547 |
|
| $ | 357,828 |
|
| $ | 418,116 |
|
| $ | 435,626 |
|
Rental recoveries |
| $ | 94,255 |
|
| $ | 103,616 |
|
| $ | 114,639 |
|
| $ | 124,560 |
|
Total revenues |
| $ | 462,847 |
|
| $ | 510,404 |
|
| $ | 580,622 |
|
| $ | 643,201 |
|
Rental expenses |
| $ | (127,095 | ) |
| $ | (125,820 | ) |
| $ | (140,284 | ) |
| $ | (150,983 | ) |
Operating income |
| $ | 83,881 |
|
| $ | 87,348 |
|
| $ | 103,392 |
|
| $ | 105,551 |
|
Consolidated net earnings |
| $ | 351,312 |
|
| $ | 140,260 |
|
| $ | 307,186 |
|
| $ | 126,757 |
|
Net earnings attributable to common stockholders |
| $ | 345,206 |
|
| $ | 140,240 |
|
| $ | 258,979 |
|
| $ | 118,363 |
|
Net earnings per share attributable to common stockholders – Basic (1) |
| $ | 0.67 |
|
| $ | 0.27 |
|
| $ | 0.49 |
|
| $ | 0.23 |
|
Net earnings per share attributable to common stockholders – Diluted (1) (2) |
| $ | 0.65 |
|
| $ | 0.27 |
|
| $ | 0.49 |
|
| $ | 0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prologis, L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 437,104 |
|
| $ | 426,150 |
|
| $ | 435,868 |
|
| $ | 435,722 |
|
Rental recoveries |
| $ | 117,012 |
|
| $ | 119,981 |
|
| $ | 124,409 |
|
| $ | 124,163 |
|
Total revenues |
| $ | 606,300 |
|
| $ | 602,155 |
|
| $ | 704,565 |
|
| $ | 620,115 |
|
Rental expenses |
| $ | (146,581 | ) |
| $ | (140,725 | ) |
| $ | (140,514 | ) |
| $ | (141,050 | ) |
Operating income |
| $ | 129,198 |
|
| $ | 142,348 |
|
| $ | 232,624 |
|
| $ | 164,208 |
|
Consolidated net earnings |
| $ | 222,805 |
|
| $ | 295,791 |
|
| $ | 307,242 |
|
| $ | 466,702 |
|
Net earnings attributable to common unitholders |
| $ | 214,275 |
|
| $ | 283,699 |
|
| $ | 286,943 |
|
| $ | 452,602 |
|
Net earnings per unit attributable to common unitholders – Basic (1) |
| $ | 0.40 |
|
| $ | 0.52 |
|
| $ | 0.53 |
|
| $ | 0.83 |
|
Net earnings per unit attributable to common unitholders – Diluted (1) (2) |
| $ | 0.39 |
|
| $ | 0.52 |
|
| $ | 0.52 |
|
| $ | 0.82 |
|
2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
| $ | 324,547 |
|
| $ | 357,828 |
|
| $ | 418,116 |
|
| $ | 435,626 |
|
Rental recoveries |
| $ | 94,255 |
|
| $ | 103,616 |
|
| $ | 114,639 |
|
| $ | 124,560 |
|
Total revenues |
| $ | 462,847 |
|
| $ | 510,404 |
|
| $ | 580,622 |
|
| $ | 643,201 |
|
Rental expenses |
| $ | (127,095 | ) |
| $ | (125,820 | ) |
| $ | (140,284 | ) |
| $ | (150,983 | ) |
Operating income |
| $ | 83,881 |
|
| $ | 87,348 |
|
| $ | 103,392 |
|
| $ | 105,551 |
|
Consolidated net earnings |
| $ | 351,312 |
|
| $ | 140,260 |
|
| $ | 307,186 |
|
| $ | 126,757 |
|
Net earnings attributable to common unitholders |
| $ | 346,488 |
|
| $ | 141,538 |
|
| $ | 262,155 |
|
| $ | 123,733 |
|
Net earnings per unit attributable to common unitholders – Basic (1) |
| $ | 0.67 |
|
| $ | 0.27 |
|
| $ | 0.49 |
|
| $ | 0.23 |
|
Net earnings per unit attributable to common unitholders – Diluted (1) (2) |
| $ | 0.65 |
|
| $ | 0.27 |
|
| $ | 0.49 |
|
| $ | 0.23 |
|
(1) | Quarterly earnings per common share or unit amounts may not total to the annual amounts due to rounding and the changes in the number of weighted common shares or units outstanding |
96
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In February 2014, we issued €700 million of senior notes at an interest rate of 3.38% maturing in 2024, at 98.9% of par value for an all-in rate of 3.52%. We intend to use the net proceeds for general corporate purposes, including repaying or repurchasing indebtedness. In the short term, we intend to use the net proceeds to repay our Credit Facilities.
97
REPORT OF INDEPENDENT REGISTEREDREGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Prologis, Inc.:
Under date of February 26, 2014,14, 2017, we reported on the consolidated balance sheets of Prologis, Inc. and subsidiaries as of December 31, 20132016 and 20122015 and the related consolidated statements of operations,income, comprehensive income, (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2013.2016. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule, Schedule III — Real Estate and Accumulated Depreciation (Schedule III). Schedule III is the responsibility of Prologis, Inc.’s management. Our responsibility is to express an opinion on Schedule III based on our audits.
In our opinion, Schedule III — Real Estate and Accumulated Depreciation, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
Denver, Colorado
February 26, 2014
98
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Partners
Prologis, L.P.:
Under date of February 26, 2014,14, 2017, we reported on the consolidated balance sheets of Prologis, L.P. and subsidiaries as of December 31, 20132016 and 20122015 and the related consolidated statements of operations,income, comprehensive income, (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2013.2016. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule, Schedule III — Real Estate and Accumulated Depreciation (Schedule III). Schedule III is the responsibility of Prologis, L.P.’s management. Our responsibility is to express an opinion on Schedule III based on our audits.
In our opinion, Schedule III — Real Estate and Accumulated Depreciation, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
Denver, Colorado
February 26, 2014
99
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated Depreciation (c) | Date of Construction/ Acquisition |
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||||||||
Industrial Operating Properties (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Americas Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
North American Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Atlanta, Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Atlanta Airport Distribution Center |
| 4 |
| (d) |
|
| 4,759 |
|
|
| 13,591 |
|
|
| 998 |
|
|
| 4,759 |
|
|
| 14,589 |
|
|
| 19,348 |
|
|
| (1,487 | ) |
| 2014, 2015 | ||||||||||||||||||||||||||||||||||||
Atlanta NE at Sugarloaf |
| 1 |
| (d) |
|
| 620 |
|
|
| 2,499 |
|
|
| 73 |
|
|
| 620 |
|
|
| 2,572 |
|
|
| 3,192 |
|
|
| (214 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
Atlanta NE Distribution Center | 8 | (d) | 5,582 | 3,047 | 28,916 | 6,276 | 31,269 | 37,545 | (16,861) | 1996, 1997 |
| 8 |
| (d) |
|
| 5,582 |
|
|
| 3,047 |
|
|
| 32,175 |
|
|
| 6,276 |
|
|
| 34,528 |
|
|
| 40,804 |
|
|
| (20,201 | ) |
| 1996, 1997 | ||||||||||||||||||||||||||
Atlanta South Business Park | 9 | 5,353 | 28,895 | 1,805 | 5,353 | 30,700 | 36,053 | (2,821) | 2011 |
| 9 |
|
|
|
| 5,353 |
|
|
| 28,895 |
|
|
| 4,341 |
|
|
| 5,353 |
|
|
| 33,236 |
|
|
| 38,589 |
|
|
| (6,832 | ) |
| 2011 | |||||||||||||||||||||||||||
Atlanta West Distribution Center | 7 | (d) | 7,208 | 26,306 | 10,960 | 7,208 | 37,266 | 44,474 | (13,205) | 1994, 2006, 2012 |
| 6 |
| (d) |
|
| 13,420 |
|
|
| 43,556 |
|
|
| 8,732 |
|
|
| 13,420 |
|
|
| 52,288 |
|
|
| 65,708 |
|
|
| (9,893 | ) |
| 1994, 2006, 2012, 2015 | ||||||||||||||||||||||||||
Berkeley Lake Distribution Center | 1 | (d) | 2,046 | 8,712 | 734 | 2,046 | 9,446 | 11,492 | (1,761) | 2006 |
| 1 |
| (d) |
|
| 2,046 |
|
|
| 8,712 |
|
|
| 1,204 |
|
|
| 2,046 |
|
|
| 9,916 |
|
|
| 11,962 |
|
|
| (2,659 | ) |
| 2006 | ||||||||||||||||||||||||||
Breckenridge Distribution Center |
| 1 |
| (d) |
|
| 1,645 |
|
|
| 6,627 |
|
|
| 277 |
|
|
| 1,645 |
|
|
| 6,904 |
|
|
| 8,549 |
|
|
| (555 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
Buford Distribution Center | 1 | 1,487 | — | 5,526 | 1,487 | 5,526 | 7,013 | (1,006) | 2007 |
| 2 |
|
|
|
| 2,659 |
|
|
| 8,847 |
|
|
| 6,101 |
|
|
| 2,659 |
|
|
| 14,948 |
|
|
| 17,607 |
|
|
| (2,190 | ) |
| 2007, 2015 | |||||||||||||||||||||||||||
Cobb Place Dist Ctr | 2 | (d) | 2,970 | 12,702 | 176 | 2,970 | 12,878 | 15,848 | (915) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dekalb Ind Ctr | 1 | 1,401 | 6,154 | 90 | 1,401 | 6,244 | 7,645 | (524) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carter-Pacific Business Center |
| 3 |
| (d) |
|
| 1,484 |
|
|
| 5,965 |
|
|
| 440 |
|
|
| 1,484 |
|
|
| 6,405 |
|
|
| 7,889 |
|
|
| (712 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
Cobb Place Distribution Center |
| 2 |
|
|
|
| 2,970 |
|
|
| 12,702 |
|
|
| 1,721 |
|
|
| 2,970 |
|
|
| 14,423 |
|
|
| 17,393 |
|
|
| (2,439 | ) |
| 2012 | ||||||||||||||||||||||||||||||||||||
Douglas Hill Distribution Center | 4 | 11,599 | 46,826 | 3,653 | 11,677 | 50,401 | 62,078 | (13,597) | 2005 |
| 4 |
|
|
|
| 11,599 |
|
|
| 46,826 |
|
|
| 4,820 |
|
|
| 11,677 |
|
|
| 51,568 |
|
|
| 63,245 |
|
|
| (19,347 | ) |
| 2005 | |||||||||||||||||||||||||||
Hartsfield East DC | 1 | 697 | 6,466 | 354 | 697 | 6,820 | 7,517 | (504) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hartsfield East Distribution Center |
| 1 |
|
|
|
| 697 |
|
|
| 6,466 |
|
|
| 654 |
|
|
| 697 |
|
|
| 7,120 |
|
|
| 7,817 |
|
|
| (1,131 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Horizon Distribution Center | 1 | 2,846 | 11,385 | 1,508 | 2,846 | 12,893 | 15,739 | (2,285) | 2006 |
| 2 |
| (d) |
|
| 7,364 |
|
|
| 36,015 |
|
|
| 1,659 |
|
|
| 7,364 |
|
|
| 37,674 |
|
|
| 45,038 |
|
|
| (4,744 | ) |
| 2006, 2015 | |||||||||||||||||||||||||||
LaGrange Distribution Center | 1 | 174 | 986 | 858 | 174 | 1,844 | 2,018 | (1,297) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Macon Dist Ctr | 1 | 604 | 2,691 | 1 | 604 | 2,692 | 3,296 | (278) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Midland Distribution Center | 1 | 1,919 | 7,679 | 1,471 | 1,919 | 9,150 | 11,069 | (2,363) | 2006 |
| 1 |
|
|
|
| 1,919 |
|
|
| 7,679 |
|
|
| 1,547 |
|
|
| 1,919 |
|
|
| 9,226 |
|
|
| 11,145 |
|
|
| (3,304 | ) |
| 2006 | |||||||||||||||||||||||||||
Northeast Industrial Center | 5 | (d) | 3,603 | 16,920 | 3,627 | 3,603 | 20,547 | 24,150 | (6,248) | 1996, 2012 |
| 2 |
|
|
|
| 2,821 |
|
|
| 12,176 |
|
|
| 1,707 |
|
|
| 2,821 |
|
|
| 13,883 |
|
|
| 16,704 |
|
|
| (2,899 | ) |
| 2012 | ||||||||||||||||||||||||||
Northmont Industrial Center | 1 | 566 | 3,209 | 1,398 | 566 | 4,607 | 5,173 | (3,077) | 1994 |
| 1 |
|
|
|
| 566 |
|
|
| 3,209 |
|
|
| 1,741 |
|
|
| 566 |
|
|
| 4,950 |
|
|
| 5,516 |
|
|
| (3,614 | ) |
| 1994 | |||||||||||||||||||||||||||
Olympic Industrial Center |
| 2 |
|
|
|
| 2,156 |
|
|
| 8,941 |
|
|
| 545 |
|
|
| 2,156 |
|
|
| 9,486 |
|
|
| 11,642 |
|
|
| (1,088 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
Park I-75 South | 1 | 8,369 | — | 35,671 | 8,369 | 35,671 | 44,040 | (403) | 2013 |
| 2 |
| (d) |
|
| 11,393 |
|
|
| 18,808 |
|
|
| 35,508 |
|
|
| 11,406 |
|
|
| 54,303 |
|
|
| 65,709 |
|
|
| (5,061 | ) |
| 2013, 2015 | |||||||||||||||||||||||||||
Park I-85 |
| 4 |
|
|
|
| 6,391 |
|
|
| 11,585 |
|
|
| 26,264 |
|
|
| 6,465 |
|
|
| 37,775 |
|
|
| 44,240 |
|
|
| (1,485 | ) |
| 2015 | ||||||||||||||||||||||||||||||||||||
Peachtree Corners Business Center | 5 | 1,519 | 7,253 | 3,536 | 1,519 | 10,789 | 12,308 | (5,470) | 1994, 2006 |
| 5 |
| (d) |
|
| 5,750 |
|
|
| 20,670 |
|
|
| 3,960 |
|
|
| 5,750 |
|
|
| 24,630 |
|
|
| 30,380 |
|
|
| (6,394 | ) |
| 1994, 2015 | |||||||||||||||||||||||||||
Piedmont Ct. Distribution Center | 2 | 885 | 5,013 | 3,689 | 885 | 8,702 | 9,587 | (5,372) | 1997 |
| 2 |
|
|
|
| 885 |
|
|
| 5,013 |
|
|
| 4,269 |
|
|
| 885 |
|
|
| 9,282 |
|
|
| 10,167 |
|
|
| (6,465 | ) |
| 1997 | |||||||||||||||||||||||||||
Riverside Distribution Center (ATL) | 3 | 2,533 | 13,336 | 3,756 | 2,556 | 17,069 | 19,625 | (9,019) | 1999 |
| 4 |
| (d) |
|
| 3,306 |
|
|
| 16,600 |
|
|
| 4,462 |
|
|
| 3,329 |
|
|
| 21,039 |
|
|
| 24,368 |
|
|
| (11,251 | ) |
| 1999, 2014 | |||||||||||||||||||||||||||
South Royal Atlanta Distribution Center | 2 | 1,191 | 5,719 | 1,408 | 1,191 | 7,127 | 8,318 | (1,529) | 2002, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Royal 85 Industrial Center |
| 3 |
|
|
|
| 3,306 |
|
|
| 16,859 |
|
|
| 776 |
|
|
| 3,306 |
|
|
| 17,635 |
|
|
| 20,941 |
|
|
| (1,081 | ) |
| 2015 | ||||||||||||||||||||||||||||||||||||
Savannah Logistics Center |
| 2 |
| (d) |
|
| 5,114 |
|
|
| 46,844 |
|
|
| 343 |
|
|
| 5,114 |
|
|
| 47,187 |
|
|
| 52,301 |
|
|
| (2,665 | ) |
| 2015 | ||||||||||||||||||||||||||||||||||||
Southfield-KRDC Industrial SG | 8 | 5,033 | 28,725 | 1,572 | 5,033 | 30,297 | 35,330 | (3,250) | 2011 |
| 1 |
|
|
|
| 1,551 |
|
|
| 8,621 |
|
|
| 524 |
|
|
| 1,551 |
|
|
| 9,145 |
|
|
| 10,696 |
|
|
| (2,705 | ) |
| 2011 | |||||||||||||||||||||||||||
Southside Distribution Center | 1 | 1,186 | 2,859 | 595 | 1,186 | 3,454 | 4,640 | (402) | 2011 |
| 1 |
|
|
|
| 1,186 |
|
|
| 2,859 |
|
|
| 590 |
|
|
| 1,186 |
|
|
| 3,449 |
|
|
| 4,635 |
|
|
| (952 | ) |
| 2011 | |||||||||||||||||||||||||||
Suwanee Creek Dist Ctr | 2 | 1,045 | 4,201 | 81 | 1,045 | 4,282 | 5,327 | (300) | 2010, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Suwanee Creek Distribution Center |
| 2 |
|
|
|
| 1,045 |
|
|
| 4,201 |
|
|
| 492 |
|
|
| 1,045 |
|
|
| 4,693 |
|
|
| 5,738 |
|
|
| (791 | ) |
| 2010, 2013 | ||||||||||||||||||||||||||||||||||||
Tradeport Distribution Center | 3 | (d) | 1,464 | 4,563 | 7,780 | 1,479 | 12,328 | 13,807 | (7,533) | 1994, 1996 |
| 3 |
| (d) |
|
| 1,464 |
|
|
| 4,563 |
|
|
| 9,663 |
|
|
| 1,479 |
|
|
| 14,211 |
|
|
| 15,690 |
|
|
| (8,957 | ) |
| 1994, 1996 | ||||||||||||||||||||||||||
Weaver Distribution Center | 2 | 935 | 5,182 | 2,199 | 935 | 7,381 | 8,316 | (4,973) | 1995 |
| 2 |
|
|
|
| 935 |
|
|
| 5,182 |
|
|
| 2,439 |
|
|
| 935 |
|
|
| 7,621 |
|
|
| 8,556 |
|
|
| (5,742 | ) |
| 1995 | |||||||||||||||||||||||||||
Westfork Industrial Center | 2 | (d) | 579 | 3,910 | 426 | 579 | 4,336 | 4,915 | (2,563) | 1995 |
| 3 |
| (d) |
|
| 6,216 |
|
|
| 19,382 |
|
|
| 823 |
|
|
| 6,216 |
|
|
| 20,205 |
|
|
| 26,421 |
|
|
| (1,306 | ) |
| 2015 | ||||||||||||||||||||||||||
Westgate Ind Ctr | 5 | 2,869 | 12,730 | 789 | 2,869 | 13,519 | 16,388 | (1,140) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta, Georgia | 80 | 75,663 | 275,469 | 122,579 | 76,473 | 397,238 | 473,711 | (108,696) |
| 84 |
|
|
|
| 116,202 |
|
|
| 436,940 |
|
|
| 158,848 |
|
|
| 117,099 |
|
|
| 594,891 |
|
|
| 711,990 |
|
|
| (138,164 | ) |
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Austin, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Corridor Park Corporate Center |
| 4 |
| (d) |
|
| 4,579 |
|
|
| 18,358 |
|
|
| 622 |
|
|
| 4,579 |
|
|
| 18,980 |
|
|
| 23,559 |
|
|
| (1,535 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
MET 4-12 LTD | 1 | 4,300 | 20,456 | 226 | 4,300 | 20,682 | 24,982 | (1,991) | 2011 |
| 1 |
|
|
|
| 4,300 |
|
|
| 20,456 |
|
|
| 294 |
|
|
| 4,300 |
|
|
| 20,750 |
|
|
| 25,050 |
|
|
| (4,125 | ) |
| 2011 | |||||||||||||||||||||||||||
MET PHASE 1 95 LTD | 4 | 5,593 | 17,211 | 874 | 5,593 | 18,085 | 23,678 | (1,748) | 2011 |
| 4 |
|
|
|
| 5,593 |
|
|
| 17,211 |
|
|
| 1,519 |
|
|
| 5,593 |
|
|
| 18,730 |
|
|
| 24,323 |
|
|
| (3,961 | ) |
| 2011 | |||||||||||||||||||||||||||
Montopolis Distribution Center | 1 | 580 | 3,384 | 2,544 | 580 | 5,928 | 6,508 | (3,949) | 1994 |
| 1 |
|
|
|
| 580 |
|
|
| 3,384 |
|
|
| 2,628 |
|
|
| 580 |
|
|
| 6,012 |
|
|
| 6,592 |
|
|
| (4,882 | ) |
| 1994 | |||||||||||||||||||||||||||
Riverside Distribution Center (AUS) |
| 1 |
|
|
|
| 1,849 |
|
|
| 7,195 |
|
|
| 93 |
|
|
| 1,849 |
|
|
| 7,288 |
|
|
| 9,137 |
|
|
| (435 | ) |
| 2015 | ||||||||||||||||||||||||||||||||||||
Southpark Corporate Center |
| 3 |
|
|
|
| 1,470 |
|
|
| 5,834 |
|
|
| 227 |
|
|
| 1,470 |
|
|
| 6,061 |
|
|
| 7,531 |
|
|
| (484 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
Walnut Creek Corporate Center | 3 | 461 | 4,089 | 338 | 515 | 4,373 | 4,888 | (2,930) | 1994 |
| 17 |
| (d) |
|
| 11,152 |
|
|
| 46,510 |
|
|
| 1,643 |
|
|
| 11,206 |
|
|
| 48,099 |
|
|
| 59,305 |
|
|
| (7,089 | ) |
| 1994, 2014 | |||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Austin, Texas | 9 | 10,934 | 45,140 | 3,982 | 10,988 | 49,068 | 60,056 | (10,618) |
| 31 |
|
|
|
| 29,523 |
|
|
| 118,948 |
|
|
| 7,026 |
|
|
| 29,577 |
|
|
| 125,920 |
|
|
| 155,497 |
|
|
| (22,511 | ) |
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Baltimore/Washington | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Baltimore/Washington DC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
1901 Park 100 Drive | 1 | (d) | 2,409 | 7,227 | 936 | 2,409 | 8,163 | 10,572 | (2,280) | 2006 |
| 1 |
| (d) |
|
| 2,409 |
|
|
| 7,227 |
|
|
| 1,178 |
|
|
| 2,409 |
|
|
| 8,405 |
|
|
| 10,814 |
|
|
| (3,306 | ) |
| 2006 | ||||||||||||||||||||||||||
Airport Commons Distribution Center | 2 | (d) | 2,320 | — | 10,170 | 2,360 | 10,130 | 12,490 | (4,263) | 1997 |
| 2 |
| (d) |
|
| 2,320 |
|
|
| - |
|
|
| 10,671 |
|
|
| 2,360 |
|
|
| 10,631 |
|
|
| 12,991 |
|
|
| (5,474 | ) |
| 1997 | ||||||||||||||||||||||||||
Ardmore Distribution Center | 3 | 1,431 | 8,110 | 3,185 | 1,431 | 11,295 | 12,726 | (6,837) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ardmore Industrial Center | 2 | 984 | 5,581 | 1,699 | 985 | 7,279 | 8,264 | (4,822) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beltway Distribution | 1 | 9,211 | 33,922 | 346 | 9,211 | 34,268 | 43,479 | (3,221) | 2011 |
| 1 |
|
|
|
| 9,211 |
|
|
| 33,922 |
|
|
| 909 |
|
|
| 9,211 |
|
|
| 34,831 |
|
|
| 44,042 |
|
|
| (7,016 | ) |
| 2011 | |||||||||||||||||||||||||||
BWI Cargo Center E |
| 1 |
|
|
|
| - |
|
|
| 10,725 |
|
|
| 115 |
|
|
| - |
|
|
| 10,840 |
|
|
| 10,840 |
|
|
| (7,174 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Corcorde Industrial Center | 4 | (d) | 1,538 | 8,717 | 3,831 | 1,538 | 12,548 | 14,086 | (8,339) | 1995 |
| 4 |
| (d) |
|
| 1,538 |
|
|
| 8,717 |
|
|
| 5,104 |
|
|
| 1,538 |
|
|
| 13,821 |
|
|
| 15,359 |
|
|
| (9,946 | ) |
| 1995 | ||||||||||||||||||||||||||
Corridor Industrial | 1 | 1,921 | 7,224 | 5 | 1,921 | 7,229 | 9,150 | (703) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crysen Industrial | 1 | 2,285 | 6,267 | 354 | 2,285 | 6,621 | 8,906 | (706) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gateway Bus Ctr | 2 | 4,414 | — | 11,681 | 2,356 | 13,739 | 16,095 | (96) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corridor Industrial Center |
| 1 |
|
|
|
| 1,921 |
|
|
| 7,224 |
|
|
| 365 |
|
|
| 1,921 |
|
|
| 7,589 |
|
|
| 9,510 |
|
|
| (1,515 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Crysen Industrial Center |
| 1 |
|
|
|
| 2,285 |
|
|
| 6,267 |
|
|
| 656 |
|
|
| 2,285 |
|
|
| 6,923 |
|
|
| 9,208 |
|
|
| (1,599 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Gateway Business Center |
| 8 |
|
|
|
| 22,025 |
|
|
| 25,117 |
|
|
| 21,843 |
|
|
| 22,261 |
|
|
| 46,724 |
|
|
| 68,985 |
|
|
| (4,062 | ) |
| 2012, 2014 | ||||||||||||||||||||||||||||||||||||
Gateway Distribution Center | 3 | 2,523 | 5,715 | 4,760 | 3,163 | 9,835 | 12,998 | (2,201) | 1998, 2012 |
| 3 |
|
|
|
| 2,523 |
|
|
| 5,715 |
|
|
| 5,217 |
|
|
| 3,163 |
|
|
| 10,292 |
|
|
| 13,455 |
|
|
| (3,229 | ) |
| 1998, 2012 | |||||||||||||||||||||||||||
Granite Hill Dist. Center | 2 | 2,959 | 9,344 | 74 | 2,959 | 9,418 | 12,377 | (1,115) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greenwood Industrial | 3 | 6,828 | 24,253 | 490 | 6,828 | 24,743 | 31,571 | (2,429) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granite Hill Distribution Center |
| 2 |
|
|
|
| 2,959 |
|
|
| 9,344 |
|
|
| 74 |
|
|
| 2,959 |
|
|
| 9,418 |
|
|
| 12,377 |
|
|
| (2,413 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Greenwood Industrial Center |
| 3 |
|
|
|
| 6,828 |
|
|
| 24,253 |
|
|
| 2,912 |
|
|
| 6,828 |
|
|
| 27,165 |
|
|
| 33,993 |
|
|
| (5,534 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Hampton Central Distribution Center |
| 3 |
| (d) |
|
| 8,928 |
|
|
| 26,787 |
|
|
| 1,090 |
|
|
| 8,928 |
|
|
| 27,877 |
|
|
| 36,805 |
|
|
| (2,214 | ) |
| 2014 | ||||||||||||||||||||||||||||||||||||
IAD Cargo Center 5 |
| 1 |
|
|
|
| - |
|
|
| 43,060 |
|
|
| 96 |
|
|
| - |
|
|
| 43,156 |
|
|
| 43,156 |
|
|
| (39,338 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Meadowridge Distribution Center | 1 | (d) | 1,757 | — | 6,436 | 1,902 | 6,291 | 8,193 | (2,791) | 1998 |
| 3 |
| (d) |
|
| 7,827 |
|
|
| 18,076 |
|
|
| 8,397 |
|
|
| 7,972 |
|
|
| 26,328 |
|
|
| 34,300 |
|
|
| (4,959 | ) |
| 1998, 2014 | ||||||||||||||||||||||||||
Meadowridge Industrial | 3 | 4,845 | 20,576 | 2,520 | 4,845 | 23,096 | 27,941 | (1,817) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowridge Industrial Center |
| 3 |
|
|
|
| 4,845 |
|
|
| 20,576 |
|
|
| 4,564 |
|
|
| 4,845 |
|
|
| 25,140 |
|
|
| 29,985 |
|
|
| (4,891 | ) |
| 2011 | ||||||||||||||||||||||||||||||||||||
Patuxent Range Road | 2 | 2,281 | 9,638 | 1,226 | 2,281 | 10,864 | 13,145 | (993) | 2011 |
| 2 |
|
|
|
| 2,281 |
|
|
| 9,638 |
|
|
| 1,630 |
|
|
| 2,281 |
|
|
| 11,268 |
|
|
| 13,549 |
|
|
| (2,490 | ) |
| 2011 | |||||||||||||||||||||||||||
Preston Court | 1 | 2,326 | 10,146 | 195 | 2,326 | 10,341 | 12,667 | (975) | 2011 |
| 1 |
|
|
|
| 2,326 |
|
|
| 10,146 |
|
|
| 331 |
|
|
| 2,326 |
|
|
| 10,477 |
|
|
| 12,803 |
|
|
| (2,181 | ) |
| 2011 | |||||||||||||||||||||||||||
ProLogis Park - Dulles | 3 | (d) | 8,053 | 19,495 | 553 | 8,053 | 20,048 | 28,101 | (1,314) | 2012 |
| 7 |
| (d) |
|
| 16,703 |
|
|
| 35,291 |
|
|
| 854 |
|
|
| 16,703 |
|
|
| 36,145 |
|
|
| 52,848 |
|
|
| (4,850 | ) |
| 2012, 2014 | ||||||||||||||||||||||||||
Troy Hill Dist Ctr | 2 | (d) | 2,495 | 10,615 | 25 | 2,495 | 10,640 | 13,135 | (744) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Troy Hill Distribution Center |
| 3 |
|
|
|
| 9,179 |
|
|
| 30,415 |
|
|
| 741 |
|
|
| 9,179 |
|
|
| 31,156 |
|
|
| 40,335 |
|
|
| (3,570 | ) |
| 2012, 2014 | ||||||||||||||||||||||||||||||||||||
White Marsh Distribution Center |
| 1 |
|
|
|
| 4,714 |
|
|
| 6,955 |
|
|
| 625 |
|
|
| 4,714 |
|
|
| 7,580 |
|
|
| 12,294 |
|
|
| (256 | ) |
| 2015 | ||||||||||||||||||||||||||||||||||||
Baltimore/Washington DC |
| 51 |
|
|
|
| 110,822 |
|
|
| 339,455 |
|
|
| 67,372 |
|
|
| 111,883 |
|
|
| 405,766 |
|
|
| 517,649 |
|
|
| (116,017 | ) |
|
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Baltimore/Washington | 37 | 60,580 | 186,830 | 48,486 | 59,348 | 236,548 | 295,896 | (45,646) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boston, Massachusetts | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boston Industrial | 6 | 19,134 | 40,176 | (1,965 | ) | 19,138 | 38,207 | 57,345 | (5,238) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cabot Business Park | 9 | 15,977 | 41,088 | (4,367 | ) | 15,977 | 36,721 | 52,698 | (5,079) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cabot Business Park SGP | 3 | 6,380 | 19,563 | (395 | ) | 6,380 | 19,168 | 25,548 | (2,706) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boston, Massachusetts | 18 | 41,491 | 100,827 | (6,727 | ) | 41,495 | 94,096 | 135,591 | (13,023) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central & Eastern, Pennsylvania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carlisle Dist Ctr | 6 | (d) | 54,852 | 233,619 | 4,494 | 54,852 | 238,113 | 292,965 | (6,337) | 2012, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chambersburg Dist Ctr | 1 | 4,188 | 17,796 | 77 | 4,188 | 17,873 | 22,061 | (250) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harrisburg Distribution Center | 5 | 21,950 | 96,007 | 901 | 21,950 | 96,908 | 118,858 | (5,540) | 2004, 2013 |
100
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition |
|
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) |
| No. of Bldgs. |
|
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||||||||||||||||||||||||||||||||||
Central & Eastern, Pennsylvania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Carlisle Distribution Center |
| 9 |
|
|
|
|
| 92,681 |
|
|
| 328,514 |
|
|
| 45,559 |
|
|
| 92,707 |
|
|
| 374,047 |
|
|
| 466,754 |
|
|
| (38,465 | ) |
| 2012, 2013, 2015 | |||||||||||||||||||||||||||||||||||||
Chambersburg Distribution Center |
| 1 |
|
|
|
|
| 4,188 |
|
|
| 17,796 |
|
|
| 138 |
|
|
| 4,188 |
|
|
| 17,934 |
|
|
| 22,122 |
|
|
| (2,277 | ) |
| 2013 | |||||||||||||||||||||||||||||||||||||
Harrisburg Distribution Center |
|
| 6 |
|
|
|
|
| 30,801 |
|
|
| 122,169 |
|
|
| 5,554 |
|
|
| 30,801 |
|
|
| 127,723 |
|
|
| 158,524 |
|
|
| (18,167 | ) |
| 2004, 2013, 2015 | ||||||||||||||||||||||||||||||||||||
Harrisburg Industrial Center | 1 | 782 | 6,190 | 964 | 782 | 7,154 | 7,936 | (2,258) | 2002 |
| 1 |
|
|
|
|
| 782 |
|
|
| 6,190 |
|
|
| 1,837 |
|
|
| 782 |
|
|
| 8,027 |
|
|
| 8,809 |
|
|
| (3,776 | ) |
| 2002 | ||||||||||||||||||||||||||||
I-78 Dist. Center | 1 | 13,030 | 30,007 | 202 | 13,030 | 30,209 | 43,239 | (2,627) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-81 Distribution | 1 | 1,822 | 21,583 | 247 | 1,822 | 21,830 | 23,652 | (1,848) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-78 Distribution Center |
| 1 |
|
|
|
|
| 13,030 |
|
|
| 30,007 |
|
|
| 444 |
|
|
| 13,030 |
|
|
| 30,451 |
|
|
| 43,481 |
|
|
| (5,670 | ) |
| 2011 | |||||||||||||||||||||||||||||||||||||
I-81 Distribution Center |
| 1 |
|
|
|
|
| 1,822 |
|
|
| 21,583 |
|
|
| 377 |
|
|
| 1,822 |
|
|
| 21,960 |
|
|
| 23,782 |
|
|
| (3,998 | ) |
| 2011 | |||||||||||||||||||||||||||||||||||||
Kraft Distribution Center |
| 1 |
|
| (d) |
|
| 7,450 |
|
|
| 22,457 |
|
|
| 20 |
|
|
| 7,450 |
|
|
| 22,477 |
|
|
| 29,927 |
|
|
| (1,879 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Lehigh Valley Distribution Center | 6 | 22,380 | 74,787 | 22,709 | 22,380 | 97,496 | 119,876 | (4,391) | 2004, 2010, 2013 |
| 9 |
|
| (d) |
|
| 32,520 |
|
|
| 88,519 |
|
|
| 50,908 |
|
|
| 32,782 |
|
|
| 139,165 |
|
|
| 171,947 |
|
|
| (17,211 | ) |
| 2004, 2010, 2013, 2014, 2015 | ||||||||||||||||||||||||||||
Northport Industrial Center |
| 1 |
|
| (d) |
|
| 12,282 |
|
|
| 37,910 |
|
|
| - |
|
|
| 12,282 |
|
|
| 37,910 |
|
|
| 50,192 |
|
|
| (3,199 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Park 33 Distribution Center | 1 | (d) | 13,411 | - | 41,110 | 15,698 | 38,823 | 54,521 | (4,443) | 2007 |
| 2 |
|
|
|
|
| 28,947 |
|
|
| 47,081 |
|
|
| 41,468 |
|
|
| 31,231 |
|
|
| 86,265 |
|
|
| 117,496 |
|
|
| (12,094 | ) |
| 2007,2014 | |||||||||||||||||||||||||||
Pottsville Dist Ctr | 1 | 4,486 | 19,527 | 306 | 4,486 | 19,833 | 24,319 | (1,439) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PHL Cargo Center C2 |
| 1 |
|
|
|
|
| - |
|
|
| 11,966 |
|
|
| 87 |
|
|
| - |
|
|
| 12,053 |
|
|
| 12,053 |
|
|
| (6,738 | ) |
| 2011 | |||||||||||||||||||||||||||||||||||||
Quakertown Distribution Center | 1 | 6,966 | - | 27,698 | 6,966 | 27,698 | 34,664 | (5,258) | 2006 |
| 1 |
|
|
|
|
| 6,966 |
|
|
| - |
|
|
| 28,369 |
|
|
| 6,966 |
|
|
| 28,369 |
|
|
| 35,335 |
|
|
| (7,035 | ) |
| 2006 | ||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central & Eastern, Pennsylvania | 24 | 143,867 | 499,516 | 98,708 | 146,154 | 595,937 | 742,091 | (34,391) |
| 34 |
|
|
|
|
| 231,469 |
|
|
| 734,192 |
|
|
| 174,761 |
|
|
| 234,041 |
|
|
| 906,381 |
|
|
| 1,140,422 |
|
|
| (120,509 | ) |
|
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Central Valley, CA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Valley, California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Arch Road Logistics Center | 2 | (d) | 9,492 | 38,060 | 2,273 | 9,492 | 40,333 | 49,825 | (4,172) | 2010 |
| 2 |
|
| (d) |
|
| 9,492 |
|
|
| 38,060 |
|
|
| 2,314 |
|
|
| 9,492 |
|
|
| 40,374 |
|
|
| 49,866 |
|
|
| (8,729 | ) |
| 2010 | |||||||||||||||||||||||||||
Central Valley Distribution Center |
| 2 |
|
| (d) |
|
| 4,329 |
|
|
| 25,033 |
|
|
| 885 |
|
|
| 4,329 |
|
|
| 25,918 |
|
|
| 30,247 |
|
|
| (2,205 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Central Valley Industrial Center | 4 | (d) | 11,418 | 48,726 | 8,430 | 11,868 | 56,706 | 68,574 | (23,305) | 1999, 2002, 2005 |
| 4 |
|
| (d) |
|
| 13,064 |
|
|
| 58,080 |
|
|
| 9,062 |
|
|
| 13,473 |
|
|
| 66,733 |
|
|
| 80,206 |
|
|
| (26,734 | ) |
| 1999, 2002, 2005, 2014 | |||||||||||||||||||||||||||
Chabot Commerce Ctr | 2 | 5,222 | 13,697 | 5,474 | 5,222 | 19,171 | 24,393 | (2,289) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chabot Commerce Center |
| 2 |
|
|
|
|
| 5,222 |
|
|
| 13,697 |
|
|
| 7,731 |
|
|
| 5,222 |
|
|
| 21,428 |
|
|
| 26,650 |
|
|
| (6,173 | ) |
| 2011 | |||||||||||||||||||||||||||||||||||||
Duck Creek Distribution Center |
| 1 |
|
| (d) |
|
| 6,690 |
|
|
| 37,858 |
|
|
| - |
|
|
| 6,690 |
|
|
| 37,858 |
|
|
| 44,548 |
|
|
| (3,048 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Manteca Distribution Center | 1 | 9,280 | 27,840 | 527 | 9,480 | 28,167 | 37,647 | (7,772) | 2005 |
| 1 |
|
|
|
|
| 9,280 |
|
|
| 27,840 |
|
|
| 669 |
|
|
| 9,480 |
|
|
| 28,309 |
|
|
| 37,789 |
|
|
| (10,673 | ) |
| 2005 | ||||||||||||||||||||||||||||
Patterson Pass Business Center | 3 | (d) | 9,278 | 23,508 | 5,680 | 9,291 | 29,175 | 38,466 | (2,727) | 2007, 2012 |
| 4 |
|
|
|
|
| 14,225 |
|
|
| 19,547 |
|
|
| 96,523 |
|
|
| 17,267 |
|
|
| 113,028 |
|
|
| 130,295 |
|
|
| (7,398 | ) |
| 2007, 2012, 2015, 2016 | |||||||||||||||||||||||||||
Tracy II Distribution Center | 5 | 23,848 | 32,080 | 174,482 | 29,189 | 201,221 | 230,410 | (14,530) | 2007, 2009, 2012, 2013 |
| 5 |
|
|
|
|
| 23,905 |
|
|
| 32,080 |
|
|
| 152,941 |
|
|
| 29,246 |
|
|
| 179,680 |
|
|
| 208,926 |
|
|
| (31,106 | ) |
| 2007, 2009, 2012, 2013 | ||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Valley, CA | 17 | 68,538 | 183,911 | 196,866 | 74,542 | 374,773 | 449,315 | (54,795) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Valley, California |
| 21 |
|
|
|
|
| 86,207 |
|
|
| 252,195 |
|
|
| 270,125 |
|
|
| 95,199 |
|
|
| 513,328 |
|
|
| 608,527 |
|
|
| (96,066 | ) |
|
| |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Charlotte, North Carolina |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Charlotte Distribution Center | 9 | (d) | 4,578 | - | 28,376 | 6,096 | 26,858 | 32,954 | (14,818) | 1995, 1996, 1997, 1998 |
| 11 |
|
| (d) |
|
| 6,596 |
|
|
| 8,206 |
|
|
| 30,225 |
|
|
| 8,114 |
|
|
| 36,913 |
|
|
| 45,027 |
|
|
| (18,116 | ) |
| 1995, 1996, 1997, 1998, 2014 | |||||||||||||||||||||||||||
Northpark Distribution Center | 2 | (d) | 1,183 | 6,707 | 2,671 | 1,184 | 9,377 | 10,561 | (6,015) | 1994, 1998 |
| 2 |
|
| (d) |
|
| 1,183 |
|
|
| 6,707 |
|
|
| 3,287 |
|
|
| 1,184 |
|
|
| 9,993 |
|
|
| 11,177 |
|
|
| (6,977 | ) |
| 1994, 1998 | |||||||||||||||||||||||||||
West Pointe Business Center | 2 | 5,440 | 12,953 | 9,718 | 5,440 | 22,671 | 28,111 | (3,134) | 2006, 2012 |
| 6 |
|
| (d) |
|
| 12,832 |
|
|
| 39,809 |
|
|
| 20,969 |
|
|
| 13,134 |
|
|
| 60,476 |
|
|
| 73,610 |
|
|
| (8,672 | ) |
| 2006, 2012, 2014, 2015 | ||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charlotte, North Carolina | 13 | 11,201 | 19,660 | 40,765 | 12,720 | 58,906 | 71,626 | (23,967) |
| 19 |
|
|
|
|
| 20,611 |
|
|
| 54,722 |
|
|
| 54,481 |
|
|
| 22,432 |
|
|
| 107,382 |
|
|
| 129,814 |
|
|
| (33,765 | ) |
|
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Chicago, Illinois |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Addison Business Center | 1 | 1,293 | 2,907 | 489 | 1,293 | 3,396 | 4,689 | (322) | 2011 |
| 1 |
|
|
|
|
| 1,293 |
|
|
| 2,907 |
|
|
| 536 |
|
|
| 1,293 |
|
|
| 3,443 |
|
|
| 4,736 |
|
|
| (835 | ) |
| 2011 | ||||||||||||||||||||||||||||
Addison Distribution Center | 1 | 640 | 3,661 | 1,232 | 640 | 4,893 | 5,533 | (2,833) | 1997 |
| 2 |
|
|
|
|
| 2,594 |
|
|
| 11,779 |
|
|
| 2,295 |
|
|
| 2,594 |
|
|
| 14,074 |
|
|
| 16,668 |
|
|
| (4,012 | ) |
| 1997, 2015 | ||||||||||||||||||||||||||||
Alsip Distribution Center | 2 | 2,093 | 11,859 | 11,105 | 2,549 | 22,508 | 25,057 | (14,363) | 1997, 1999 |
| 1 |
|
|
|
|
| 4,895 |
|
|
| 9,710 |
|
|
| 250 |
|
|
| 4,895 |
|
|
| 9,960 |
|
|
| 14,855 |
|
|
| (691 | ) |
| 2015 | ||||||||||||||||||||||||||||
Alsip Industrial | 1 | 1,422 | 2,336 | 17 | 1,422 | 2,353 | 3,775 | (483) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arlington Heights Distribution Center | 1 | 831 | 3,326 | 2,244 | 831 | 5,570 | 6,401 | (1,223) | 2006 |
| 2 |
|
|
|
|
| 5,263 |
|
|
| 10,361 |
|
|
| 3,568 |
|
|
| 5,264 |
|
|
| 13,928 |
|
|
| 19,192 |
|
|
| (2,754 | ) |
| 2006, 2015 | ||||||||||||||||||||||||||||
Aurora Distribution Center |
| 6 |
|
|
|
|
| 9,921 |
|
|
| 53,571 |
|
|
| 1,645 |
|
|
| 9,921 |
|
|
| 55,216 |
|
|
| 65,137 |
|
|
| (4,509 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Bedford Park Distribution Center |
| 2 |
|
| (d) |
|
| 3,014 |
|
|
| 9,271 |
|
|
| 359 |
|
|
| 3,014 |
|
|
| 9,630 |
|
|
| 12,644 |
|
|
| (697 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Bensenville Distribution Center | 1 | 926 | 3,842 | 6,209 | 940 | 10,037 | 10,977 | (6,887) | 1997 |
| 1 |
|
|
|
|
| 926 |
|
|
| 3,842 |
|
|
| 6,429 |
|
|
| 940 |
|
|
| 10,257 |
|
|
| 11,197 |
|
|
| (7,769 | ) |
| 1997 | ||||||||||||||||||||||||||||
Bensenville Ind Park | 13 | 37,681 | 92,909 | 3,157 | 37,681 | 96,066 | 133,747 | (10,463) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bensenville Industrial Park |
| 14 |
|
| (d) |
|
| 43,455 |
|
|
| 111,007 |
|
|
| 9,495 |
|
|
| 43,455 |
|
|
| 120,502 |
|
|
| 163,957 |
|
|
| (24,998 | ) |
| 2011, 2015 | |||||||||||||||||||||||||||||||||||||
Bloomingdale 100 Business Center |
| 4 |
|
| (d) |
|
| 6,563 |
|
|
| 26,145 |
|
|
| 1,784 |
|
|
| 6,563 |
|
|
| 27,929 |
|
|
| 34,492 |
|
|
| (2,262 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Bolingbrook Distribution Center | 5 | (d) | 15,110 | 68,440 | 4,501 | 15,110 | 72,941 | 88,051 | (24,888) | 1999, 2006 |
| 13 |
|
| (d) |
|
| 40,219 |
|
|
| 154,530 |
|
|
| 28,173 |
|
|
| 40,219 |
|
|
| 182,703 |
|
|
| 222,922 |
|
|
| (29,862 | ) |
| 1999, 2006, 2014, 2015 | |||||||||||||||||||||||||||
Bridgeview Industrial | 1 | 1,380 | 3,404 | 310 | 1,380 | 3,714 | 5,094 | (430) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bridgeview Distribution Center |
| 4 |
|
|
|
|
| 1,662 |
|
|
| 6,882 |
|
|
| 170 |
|
|
| 1,662 |
|
|
| 7,052 |
|
|
| 8,714 |
|
|
| (895 | ) |
| 2014 | |||||||||||||||||||||||||||||||||||||
Chicago Industrial Portfolio | 1 | 1,330 | 2,876 | 384 | 1,330 | 3,260 | 4,590 | (372) | 2011 |
| 1 |
|
|
|
|
| 1,330 |
|
|
| 2,876 |
|
|
| 428 |
|
|
| 1,330 |
|
|
| 3,304 |
|
|
| 4,634 |
|
|
| (940 | ) |
| 2011 | ||||||||||||||||||||||||||||
Chicago Ridge Freight Terminal | 1 | 1,789 | 6,187 | 268 | 1,789 | 6,455 | 8,244 | (547) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cicero Distribution Center |
| 1 |
|
|
|
|
| 3,789 |
|
|
| 5,819 |
|
|
| 849 |
|
|
| 3,789 |
|
|
| 6,668 |
|
|
| 10,457 |
|
|
| (762 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Des Plaines Distribution Center | 3 | 2,158 | 12,232 | 6,616 | 2,159 | 18,847 | 21,006 | (11,958) | 1995, 1996 |
| 4 |
|
|
|
|
| 8,022 |
|
|
| 17,145 |
|
|
| 4,129 |
|
|
| 8,023 |
|
|
| 21,273 |
|
|
| 29,296 |
|
|
| (8,745 | ) |
| 1995, 1996, 2015 | ||||||||||||||||||||||||||||
Elgin Distribution Center |
| 1 |
|
|
|
|
| 2,480 |
|
|
| 6,422 |
|
|
| 854 |
|
|
| 2,480 |
|
|
| 7,276 |
|
|
| 9,756 |
|
|
| (404 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Elk Grove Distribution Center | 22 | (d) | 30,882 | 80,898 | 48,660 | 30,882 | 129,558 | 160,440 | (48,229) | 1995, 1996, 1997, 1999, 2006, 2009 |
| 14 |
|
| (d) |
|
| 37,200 |
|
|
| 81,638 |
|
|
| 41,879 |
|
|
| 37,200 |
|
|
| 123,517 |
|
|
| 160,717 |
|
|
| (48,437 | ) |
| 1995, 1996, 1997, 1999, 2006, 2009, 2015 | |||||||||||||||||||||||||||
Elk Grove Du Page | 21 | (d) | 14,830 | 64,408 | 6,936 | 14,830 | 71,344 | 86,174 | (3,880) | 2012 |
| 21 |
|
|
|
|
| 14,830 |
|
|
| 64,408 |
|
|
| 13,911 |
|
|
| 14,830 |
|
|
| 78,319 |
|
|
| 93,149 |
|
|
| (17,943 | ) |
| 2012 | |||||||||||||||||||||||||||
Elk Grove Village SG | 9 | 9,580 | 18,750 | 1,354 | 9,580 | 20,104 | 29,684 | (2,588) | 2011 |
| 5 |
|
|
|
|
| 5,856 |
|
|
| 11,049 |
|
|
| 1,484 |
|
|
| 5,856 |
|
|
| 12,533 |
|
|
| 18,389 |
|
|
| (3,484 | ) |
| 2011 | ||||||||||||||||||||||||||||
Elmhurst Distribution Center | 1 | 713 | 4,043 | 1,204 | 713 | 5,247 | 5,960 | (3,170) | 1997 |
| 1 |
|
|
|
|
| 1,862 |
|
|
| 3,263 |
|
|
| 472 |
|
|
| 1,862 |
|
|
| 3,735 |
|
|
| 5,597 |
|
|
| (197 | ) |
| 2015 | ||||||||||||||||||||||||||||
Executive Drive | 1 | 1,371 | 6,430 | 249 | 1,371 | 6,679 | 8,050 | (627) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franklin Park Distribution Center |
| 3 |
|
|
|
|
| 22,998 |
|
|
| 49,906 |
|
|
| 805 |
|
|
| 22,998 |
|
|
| 50,711 |
|
|
| 73,709 |
|
|
| (2,516 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Glendale Heights Distribution Center | 3 | (d) | 3,903 | 22,119 | 4,105 | 3,903 | 26,224 | 30,127 | (13,374) | 1999 |
| 5 |
|
|
|
|
| 8,381 |
|
|
| 39,047 |
|
|
| 5,895 |
|
|
| 8,381 |
|
|
| 44,942 |
|
|
| 53,323 |
|
|
| (17,374 | ) |
| 1999, 2015 | |||||||||||||||||||||||||||
Glenview Distribution Center | 2 | 1,156 | 6,550 | 2,093 | 1,156 | 8,643 | 9,799 | (4,938) | 1996, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Golf Distribution | 1 | 5,372 | 16,619 | 85 | 5,372 | 16,704 | 22,076 | (2,078) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hintz Building | 1 | 354 | 1,970 | 72 | 354 | 2,042 | 2,396 | (205) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-294 Dist Ctr | 1 | 3,877 | 16,589 | 2 | 3,877 | 16,591 | 20,468 | (1,172) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grand Rapids Distribution Center |
| 1 |
|
| (d) |
|
| 839 |
|
|
| 1,516 |
|
|
| 16 |
|
|
| 839 |
|
|
| 1,532 |
|
|
| 2,371 |
|
|
| (77 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Gurnee Distribution Center |
| 2 |
|
|
|
|
| 2,353 |
|
|
| 5,579 |
|
|
| 298 |
|
|
| 2,353 |
|
|
| 5,877 |
|
|
| 8,230 |
|
|
| (385 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
I-55 Distribution Center | 2 | (d) | 5,383 | 25,504 | 35,327 | 11,786 | 54,428 | 66,214 | (11,587) | 2007 |
| 2 |
|
| (d) |
|
| 5,383 |
|
|
| 25,504 |
|
|
| 36,018 |
|
|
| 11,786 |
|
|
| 55,119 |
|
|
| 66,905 |
|
|
| (19,352 | ) |
| 2007 | |||||||||||||||||||||||||||
Itasca Distribution Center | 1 | 300 | 1,941 | 899 | 300 | 2,840 | 3,140 | (1,785) | 1996 |
| 1 |
|
| (d) |
|
| 1,222 |
|
|
| 5,178 |
|
|
| 1,077 |
|
|
| 1,222 |
|
|
| 6,255 |
|
|
| 7,477 |
|
|
| (806 | ) |
| 2014 | ||||||||||||||||||||||||||||
Itasca Industrial Portfolio | 4 | 5,942 | 13,574 | 262 | 5,942 | 13,836 | 19,778 | (1,532) | 2011 |
| 1 |
|
|
|
|
| 1,044 |
|
|
| 1,920 |
|
|
| 229 |
|
|
| 1,044 |
|
|
| 2,149 |
|
|
| 3,193 |
|
|
| (545 | ) |
| 2011 | ||||||||||||||||||||||||||||
Kehoe Industrial | 1 | 1,394 | 3,247 | 389 | 1,394 | 3,636 | 5,030 | (317) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Melrose Park Distribution Ctr. | 1 | 2,657 | 9,292 | 215 | 2,657 | 9,507 | 12,164 | (1,126) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kehoe Industrial Center |
| 2 |
|
|
|
|
| 2,975 |
|
|
| 7,876 |
|
|
| 545 |
|
|
| 2,975 |
|
|
| 8,421 |
|
|
| 11,396 |
|
|
| (1,013 | ) |
| 2011, 2015 | |||||||||||||||||||||||||||||||||||||
Kennicott Park Distribution Center |
| 1 |
|
|
|
|
| 811 |
|
|
| 2,996 |
|
|
| 24 |
|
|
| 811 |
|
|
| 3,020 |
|
|
| 3,831 |
|
|
| (221 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Kenosha Distribution Center |
| 2 |
|
|
|
|
| 14,484 |
|
|
| 117,728 |
|
|
| 521 |
|
|
| 14,484 |
|
|
| 118,249 |
|
|
| 132,733 |
|
|
| (5,085 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
McCook Distribution Center |
| 1 |
|
|
|
|
| 1,968 |
|
|
| 6,784 |
|
|
| 281 |
|
|
| 1,968 |
|
|
| 7,065 |
|
|
| 9,033 |
|
|
| (333 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Melrose Park Distribution Center |
| 2 |
|
|
|
|
| 9,544 |
|
|
| 27,851 |
|
|
| 488 |
|
|
| 9,544 |
|
|
| 28,339 |
|
|
| 37,883 |
|
|
| (1,390 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
Minooka Distribution Center | 2 | (d) | 12,240 | 41,745 | 17,741 | 13,223 | 58,503 | 71,726 | (14,515) | 2005, 2008 |
| 3 |
|
|
|
|
| 18,420 |
|
|
| 67,250 |
|
|
| 18,437 |
|
|
| 19,404 |
|
|
| 84,703 |
|
|
| 104,107 |
|
|
| (23,238 | ) |
| 2005, 2008, 2014 | |||||||||||||||||||||||||||
Mitchell Distribution Center | 1 | 1,236 | 7,004 | 3,744 | 1,236 | 10,748 | 11,984 | (6,500) | 1996 |
| 1 |
|
|
|
|
| 1,236 |
|
|
| 7,004 |
|
|
| 4,355 |
|
|
| 1,236 |
|
|
| 11,359 |
|
|
| 12,595 |
|
|
| (7,913 | ) |
| 1996 | ||||||||||||||||||||||||||||
Mount Pleasant Distribution Center |
| 1 |
|
|
|
|
| 2,876 |
|
|
| 8,171 |
|
|
| 574 |
|
|
| 2,876 |
|
|
| 8,745 |
|
|
| 11,621 |
|
|
| (399 | ) |
| 2015 | |||||||||||||||||||||||||||||||||||||
NDP - Chicago | 1 | 461 | 1,362 | 11 | 461 | 1,373 | 1,834 | (131) | 2011 |
| 1 |
|
|
|
|
| 461 |
|
|
| 1,362 |
|
|
| 78 |
|
|
| 461 |
|
|
| 1,440 |
|
|
| 1,901 |
|
|
| (294 | ) |
| 2011 | ||||||||||||||||||||||||||||
Nicholas Logistics Center | 1 | 2,354 | 10,799 | 44 | 2,354 | 10,843 | 13,197 | (1,255) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northbrook Distribution Center | 1 | 2,056 | 8,227 | 405 | 2,056 | 8,632 | 10,688 | (2,022) | 2007 |
| 1 |
|
|
|
|
| 2,056 |
|
|
| 8,227 |
|
|
| 4,015 |
|
|
| 2,056 |
|
|
| 12,242 |
|
|
| 14,298 |
|
|
| (3,532 | ) |
| 2007 | ||||||||||||||||||||||||||||
Northlake Distribution Center | 1 | 372 | 2,105 | 775 | 372 | 2,880 | 3,252 | (1,908) | 1996 |
| 1 |
|
|
|
|
| 5,015 |
|
|
| 13,569 |
|
|
| 125 |
|
|
| 5,015 |
|
|
| 13,694 |
|
|
| 18,709 |
|
|
| (760 | ) |
| 2015 | ||||||||||||||||||||||||||||
OHare Industrial Portfolio | 8 | 4,989 | 12,542 | 118 | 4,989 | 12,660 | 17,649 | (1,583) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pleasant Prairie Distribution Center | 1 | (d) | 1,314 | 7,450 | 2,540 | 1,315 | 9,989 | 11,304 | (5,501) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Poplar Gateway Truck Terminal | 1 | 2,321 | 4,699 | 507 | 2,321 | 5,206 | 7,527 | (510) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port OHare | 2 | 4,819 | 5,547 | 61 | 4,819 | 5,608 | 10,427 | (695) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remington Lakes Dist | 1 | 2,382 | 11,657 | 569 | 2,382 | 12,226 | 14,608 | (980) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rochelle Distribution Center | 1 | 4,457 | 20,100 | 11,131 | 5,254 | 30,434 | 35,688 | (3,857) | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Romeoville Distribution Center | 5 | (d) | 23,325 | 94,197 | 7,494 | 23,325 | 101,691 | 125,016 | (27,673) | 1999, 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
S.C. Johnson & Son | 1 | 2,267 | 15,911 | 1,552 | 3,152 | 16,578 | 19,730 | (2,603) | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sivert Distribution | 1 | 1,497 | 1,470 | - | 1,497 | 1,470 | 2,967 | (170) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Touhy Cargo Terminal | 1 | 2,697 | 8,909 | - | 2,697 | 8,909 | 11,606 | (699) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Waukegan Distribution Center | 2 | (d) | 4,368 | 17,632 | 976 | 4,368 | 18,608 | 22,976 | (4,517) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West Chicago Distribution Center | 1 | 3,125 | 12,499 | 2,579 | 3,125 | 15,078 | 18,203 | (3,849) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Windsor Court | 1 | 635 | 3,493 | 182 | 635 | 3,675 | 4,310 | (389) | 2011 |
101
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||
Wood Dale Industrial SG | 5 | 4,343 | 10,174 | 418 | 4,343 | 10,592 | 14,935 | (1,083) | 2011 | |||||||||||||||||||||||||||
Woodale Distribution Center | 1 | 263 | 1,490 | 541 | 263 | 2,031 | 2,294 | (1,242) | 1997 | |||||||||||||||||||||||||||
Woodridge Distribution Center | 14 | (d) | 46,575 | 197,289 | 19,571 | 49,942 | 213,493 | 263,435 | (57,593) | 2005, 2007 | ||||||||||||||||||||||||||
Yohan Industrial | 3 | 4,219 | 12,306 | 883 | 4,219 | 13,189 | 17,408 | (1,217) | 2011 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Chicago, Illinois | 158 | 286,682 | 1,014,520 | 210,226 | 299,589 | 1,211,839 | 1,511,428 | (311,869) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Cincinnati, Ohio | ||||||||||||||||||||||||||||||||||||
Airpark Distribution Center | 2 | (d) | 2,958 | 9,894 | 13,228 | 3,938 | 22,142 | 26,080 | (6,803) | 1996, 2012 | ||||||||||||||||||||||||||
Capital Distribution Center II | 5 | 1,953 | 11,067 | 7,201 | 1,953 | 18,268 | 20,221 | (11,519) | 1994 | |||||||||||||||||||||||||||
Empire Distribution Center | 3 | 529 | 2,995 | 2,882 | 529 | 5,877 | 6,406 | (3,954) | 1995 | |||||||||||||||||||||||||||
Fairfield Business Center | 1 | 348 | 1,971 | 754 | 381 | 2,692 | 3,073 | (1,004) | 2004 | |||||||||||||||||||||||||||
Park I-275 | 2 | (d) | 7,109 | 26,097 | 2,858 | 7,109 | 28,955 | 36,064 | (2,867) | 2008, 2012 | ||||||||||||||||||||||||||
Sharonville Distribution Center | 2 | (d) | 1,202 | - | 14,661 | 2,424 | 13,439 | 15,863 | (5,853) | 1997 | ||||||||||||||||||||||||||
West Chester Comm Park I | 2 | (d) | 1,939 | 8,224 | 1,532 | 1,939 | 9,756 | 11,695 | (598) | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Cincinnati, Ohio | 17 | 16,038 | 60,248 | 43,116 | 18,273 | 101,129 | 119,402 | (32,598) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Columbus, Ohio | ||||||||||||||||||||||||||||||||||||
Alum Creek Dist Ctr | 1 | 917 | 4,584 | 260 | 917 | 4,844 | 5,761 | (415) | 2012 | |||||||||||||||||||||||||||
Brookham Distribution Center | 2 | 5,964 | 23,858 | 4,392 | 5,965 | 28,249 | 34,214 | (8,939) | 2005 | |||||||||||||||||||||||||||
Canal Pointe Distribution Center | 1 | 1,237 | 7,013 | 1,578 | 1,280 | 8,548 | 9,828 | (4,191) | 1999 | |||||||||||||||||||||||||||
Capital Park South Distribution Center | 7 | (d) | 8,484 | 30,385 | 27,588 | 8,876 | 57,581 | 66,457 | (16,155) | 1996, 2012 | ||||||||||||||||||||||||||
Charter Street Distribution Center | 1 | 1,245 | 7,055 | 889 | 1,245 | 7,944 | 9,189 | (3,809) | 1999 | |||||||||||||||||||||||||||
Corporate Park West | 1 | 361 | 2,265 | 1,368 | 361 | 3,633 | 3,994 | (2,300) | 1996 | |||||||||||||||||||||||||||
Etna Distribution Center | 1 | 1,669 | - | 19,964 | 1,669 | 19,964 | 21,633 | (4,244) | 2007 | |||||||||||||||||||||||||||
Fisher Distribution Center | 1 | 1,197 | 6,785 | 5,524 | 1,197 | 12,309 | 13,506 | (6,825) | 1995 | |||||||||||||||||||||||||||
Foreign Trade Center I | 3 | 3,619 | 21,279 | 6,038 | 3,975 | 26,961 | 30,936 | (13,698) | 1999 | |||||||||||||||||||||||||||
International Street Comm Ctr | 2 | (d) | 1,503 | 6,356 | 262 | 1,503 | 6,618 | 8,121 | (465) | 2012 | ||||||||||||||||||||||||||
Lockbourne Dist Ctr | 1 | 540 | 3,030 | 351 | 540 | 3,381 | 3,921 | (346) | 2012 | |||||||||||||||||||||||||||
South Park Distribution Center | 2 | (d) | 3,343 | 15,182 | 3,274 | 3,343 | 18,456 | 21,799 | (6,916) | 1999, 2005 | ||||||||||||||||||||||||||
Westbelt Business Center | 3 | 1,777 | 7,168 | 1,863 | 1,777 | 9,031 | 10,808 | (2,211) | 2006 | |||||||||||||||||||||||||||
Westpointe Distribution Center | 2 | (d) | 1,446 | 7,601 | 928 | 1,446 | 8,529 | 9,975 | (2,952) | 2007 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Columbus, Ohio | 28 | 33,302 | 142,561 | 74,279 | 34,094 | 216,048 | 250,142 | (73,466) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Dallas/Fort Worth, Texas | ||||||||||||||||||||||||||||||||||||
Addison Technology Center | 1 | 858 | 3,996 | 11 | 858 | 4,007 | 4,865 | (391) | 2011 | |||||||||||||||||||||||||||
Arlington Corp Ctr | 1 | 3,212 | 13,971 | 47 | 3,212 | 14,018 | 17,230 | (608) | 2012 | |||||||||||||||||||||||||||
Centerport Distribution Center | 1 | 1,250 | 7,082 | 1,175 | 1,250 | 8,257 | 9,507 | (4,178) | 1999 | |||||||||||||||||||||||||||
Dallas Corporate Center | 11 | (d) | 6,449 | 5,441 | 33,879 | 6,645 | 39,124 | 45,769 | (17,121) | 1996, 1997, 1998, 1999, 2012 | ||||||||||||||||||||||||||
Dallas Industrial | 12 | 7,180 | 26,514 | 1,814 | 7,180 | 28,328 | 35,508 | (2,961) | 2011 | |||||||||||||||||||||||||||
Flower Mound Distribution Center | 1 | (d) | 5,157 | 20,991 | 2,446 | 5,157 | 23,437 | 28,594 | (5,279) | 2007 | ||||||||||||||||||||||||||
Freeport Corp Ctr | 2 | (d) | 8,947 | 38,219 | 506 | 8,947 | 38,725 | 47,672 | (2,728) | 2012 | ||||||||||||||||||||||||||
Freeport Distribution Center | 4 | 1,393 | 5,549 | 5,591 | 1,440 | 11,093 | 12,533 | (6,036) | 1996, 1997, 1998 | |||||||||||||||||||||||||||
Great Southwest Distribution Center | 32 | (d) | 41,069 | 178,346 | 29,727 | 41,069 | 208,073 | 249,142 | (67,485) | 1995, 1996, 1997, 1999, 2000, 2001, 2002, 2005, 2012 | ||||||||||||||||||||||||||
Greater Dallas Industrial Port | 3 | 3,525 | 16,375 | 405 | 3,525 | 16,780 | 20,305 | (1,757) | 2011 | |||||||||||||||||||||||||||
Lancaster Distribution Center | 3 | (d) | 7,610 | 14,362 | 37,778 | 7,265 | 52,485 | 59,750 | (6,035) | 2007, 2008, 2013 | ||||||||||||||||||||||||||
Lincoln Industrial Center | 1 | 738 | 1,600 | 101 | 738 | 1,701 | 2,439 | (245) | 2011 | |||||||||||||||||||||||||||
Lonestar Portfolio | 3 | 4,736 | 13,035 | 1,112 | 4,736 | 14,147 | 18,883 | (1,656) | 2011 | |||||||||||||||||||||||||||
Mesquite Dist Ctr | 1 | 3,692 | 15,473 | 20 | 3,692 | 15,493 | 19,185 | (1,056) | 2012 | |||||||||||||||||||||||||||
Mesquite Dist III | 1 | 2,800 | - | 8,864 | 2,800 | 8,864 | 11,664 | (154) | 2013 | |||||||||||||||||||||||||||
Northgate Distribution Center | 8 | (d) | 10,411 | 51,454 | 6,473 | 10,898 | 57,440 | 68,338 | (16,041) | 1999, 2005, 2008, 2012 | ||||||||||||||||||||||||||
Pinnacle Park Distribution Center | 1 | 1,657 | 6,940 | 128 | 1,657 | 7,068 | 8,725 | (474) | 2012 | |||||||||||||||||||||||||||
Richardson Tech Center SGP | 2 | 1,462 | 4,557 | 240 | 1,462 | 4,797 | 6,259 | (510) | 2011 | |||||||||||||||||||||||||||
Royal Distribution Center | 1 | 811 | 4,598 | 1,124 | 811 | 5,722 | 6,533 | (2,471) | 2001 | |||||||||||||||||||||||||||
Stemmons Distribution Center | 1 | 272 | 1,544 | 848 | 272 | 2,392 | 2,664 | (1,562) | 1995 | |||||||||||||||||||||||||||
Stemmons Industrial Center | 8 | 1,653 | 10,526 | 5,896 | 1,653 | 16,422 | 18,075 | (10,414) | 1994, 1995, 1996, 1999 | |||||||||||||||||||||||||||
Trinity Mills Distribution Center | 4 | (d) | 3,181 | �� | 18,090 | 4,556 | 3,181 | 22,646 | 25,827 | (11,719) | 1996, 1999, 2001 | |||||||||||||||||||||||||
Valwood Business Center | 3 | 2,842 | 11,715 | 1,110 | 2,842 | 12,825 | 15,667 | (3,928) | 2001, 2006 | |||||||||||||||||||||||||||
Valwood Distribution Center | 1 | 850 | 4,890 | 894 | 850 | 5,784 | 6,634 | (2,779) | 1999 | |||||||||||||||||||||||||||
Valwood Industrial | 2 | 1,802 | 9,658 | 340 | 1,802 | 9,998 | 11,800 | (1,144) | 2011 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Dallas/Fort Worth, Texas | 108 | 123,557 | 484,926 | 145,085 | 123,942 | 629,626 | 753,568 | (168,732) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Denver, Colorado | ||||||||||||||||||||||||||||||||||||
Denver Business Center | 4 | (d) | 3,497 | 14,938 | 481 | 3,497 | 15,419 | 18,916 | (918) | 2012 | ||||||||||||||||||||||||||
Pagosa Distribution Center | 1 | (d) | 398 | 2,322 | 1,458 | 398 | 3,780 | 4,178 | (2,660) | 1993 | ||||||||||||||||||||||||||
Stapleton Business Center | 12 | (d) | 34,634 | 139,257 | 8,344 | 34,635 | 147,600 | 182,235 | (41,672) | 2005 | ||||||||||||||||||||||||||
Upland Distribution Center | 3 | 385 | 4,421 | 4,861 | 398 | 9,269 | 9,667 | (4,934) | 1994, 1995 | |||||||||||||||||||||||||||
Upland Distribution Center II | 3 | 1,295 | 5,159 | 5,924 | 1,328 | 11,050 | 12,378 | (7,713) | 1993 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Denver, Colorado | 23 | 40,209 | 166,097 | 21,068 | 40,256 | 187,118 | 227,374 | (57,897) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
El Paso, Texas | ||||||||||||||||||||||||||||||||||||
Billy the Kid Distribution Center | 1 | 273 | 1,547 | 1,660 | 273 | 3,207 | 3,480 | (2,262) | 1994 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
OHare Industrial Portfolio |
| 5 |
|
|
|
| 3,455 |
|
|
| 8,724 |
|
|
| 216 |
|
|
| 3,455 |
|
|
| 8,940 |
|
|
| 12,395 |
|
|
| (2,387 | ) |
| 2011 |
Palatine Distribution Center |
| 1 |
|
|
|
| 497 |
|
|
| 2,723 |
|
|
| 299 |
|
|
| 497 |
|
|
| 3,022 |
|
|
| 3,519 |
|
|
| (200 | ) |
| 2015 |
Pleasant Prairie Distribution Center |
| 2 |
|
|
|
| 3,293 |
|
|
| 16,321 |
|
|
| 3,597 |
|
|
| 3,293 |
|
|
| 19,918 |
|
|
| 23,211 |
|
|
| (7,053 | ) |
| 1999, 2015 |
Remington Lakes Distribution Center |
| 1 |
|
|
|
| 2,382 |
|
|
| 11,657 |
|
|
| 901 |
|
|
| 2,382 |
|
|
| 12,558 |
|
|
| 14,940 |
|
|
| (2,210 | ) |
| 2011 |
Romeoville Distribution Center |
| 7 |
| (d) |
|
| 30,559 |
|
|
| 116,956 |
|
|
| 11,527 |
|
|
| 30,559 |
|
|
| 128,483 |
|
|
| 159,042 |
|
|
| (38,273 | ) |
| 2005, 2015 |
S.C. Johnson & Son |
| 1 |
|
|
|
| 2,267 |
|
|
| 15,911 |
|
|
| 1,842 |
|
|
| 3,152 |
|
|
| 16,868 |
|
|
| 20,020 |
|
|
| (4,287 | ) |
| 2008 |
Shiller Park Distribution Center |
| 17 |
|
|
|
| 17,339 |
|
|
| 33,001 |
|
|
| 3,350 |
|
|
| 17,339 |
|
|
| 36,351 |
|
|
| 53,690 |
|
|
| (2,363 | ) |
| 2015 |
Touhy Cargo Terminal |
| 1 |
|
|
|
| 2,697 |
|
|
| 8,909 |
|
|
| - |
|
|
| 2,697 |
|
|
| 8,909 |
|
|
| 11,606 |
|
|
| (1,503 | ) |
| 2011 |
Tower Distribution Center |
| 1 |
|
|
|
| 2,050 |
|
|
| 1,279 |
|
|
| 5 |
|
|
| 2,050 |
|
|
| 1,284 |
|
|
| 3,334 |
|
|
| (62 | ) |
| 2015 |
Waukegan Distribution Center |
| 1 |
|
|
|
| 2,451 |
|
|
| 9,438 |
|
|
| 506 |
|
|
| 2,451 |
|
|
| 9,944 |
|
|
| 12,395 |
|
|
| (3,260 | ) |
| 2007 |
West Chicago Distribution Center |
| 2 |
|
|
|
| 3,125 |
|
|
| 12,764 |
|
|
| 4,971 |
|
|
| 3,125 |
|
|
| 17,735 |
|
|
| 20,860 |
|
|
| (6,425 | ) |
| 2005, 2015 |
Willowbrook Distribution Center |
| 1 |
| (d) |
|
| 855 |
|
|
| 3,134 |
|
|
| 23 |
|
|
| 855 |
|
|
| 3,157 |
|
|
| 4,012 |
|
|
| (337 | ) |
| 2015 |
Windsor Court |
| 1 |
|
|
|
| 635 |
|
|
| 3,493 |
|
|
| 536 |
|
|
| 635 |
|
|
| 4,029 |
|
|
| 4,664 |
|
|
| (880 | ) |
| 2011 |
Woodale Distribution Center |
| 1 |
|
|
|
| 263 |
|
|
| 1,490 |
|
|
| 599 |
|
|
| 263 |
|
|
| 2,089 |
|
|
| 2,352 |
|
|
| (1,454 | ) |
| 1997 |
Woodridge Distribution Center |
| 15 |
| (d) |
|
| 49,943 |
|
|
| 215,504 |
|
|
| 27,177 |
|
|
| 53,310 |
|
|
| 239,314 |
|
|
| 292,624 |
|
|
| (83,241 | ) |
| 2005, 2007, 2015 |
Yohan Industrial Center |
| 3 |
|
|
|
| 4,219 |
|
|
| 12,306 |
|
|
| 1,685 |
|
|
| 4,219 |
|
|
| 13,991 |
|
|
| 18,210 |
|
|
| (2,937 | ) |
| 2011 |
Chicago, Illinois |
| 189 |
|
|
|
| 423,270 |
|
|
| 1,463,703 |
|
|
| 249,725 |
|
|
| 434,925 |
|
|
| 1,701,773 |
|
|
| 2,136,698 |
|
|
| (402,301 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati, Ohio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airpark Distribution Center |
| 4 |
| (d) |
|
| 5,851 |
|
|
| 21,846 |
|
|
| 15,049 |
|
|
| 6,831 |
|
|
| 35,915 |
|
|
| 42,746 |
|
|
| (10,495 | ) |
| 1996, 2012, 2014 |
DAY Cargo Center |
| 5 |
|
|
|
| - |
|
|
| 4,749 |
|
|
| 671 |
|
|
| - |
|
|
| 5,420 |
|
|
| 5,420 |
|
|
| (2,388 | ) |
| 2011 |
Fairfield Commerce Center |
| 1 |
| (d) |
|
| 2,526 |
|
|
| 10,110 |
|
|
| 105 |
|
|
| 2,526 |
|
|
| 10,215 |
|
|
| 12,741 |
|
|
| (870 | ) |
| 2014 |
Gateway International Distribution Center |
| 1 |
|
|
|
| 2,676 |
|
|
| - |
|
|
| 18,534 |
|
|
| 2,695 |
|
|
| 18,515 |
|
|
| 21,210 |
|
|
| (445 | ) |
| 2015 |
Monroe Park |
| 1 |
| (d) |
|
| 7,222 |
|
|
| 29,606 |
|
|
| 506 |
|
|
| 7,222 |
|
|
| 30,112 |
|
|
| 37,334 |
|
|
| (2,547 | ) |
| 2014 |
Mosteller Distribution Center |
| 1 |
| (d) |
|
| 921 |
|
|
| 3,888 |
|
|
| 165 |
|
|
| 921 |
|
|
| 4,053 |
|
|
| 4,974 |
|
|
| (379 | ) |
| 2014 |
Park I-275 |
| 4 |
| (d) |
|
| 15,939 |
|
|
| 61,886 |
|
|
| 3,815 |
|
|
| 15,939 |
|
|
| 65,701 |
|
|
| 81,640 |
|
|
| (9,244 | ) |
| 2008, 2012, 2014 |
Sharonville Distribution Center |
| 2 |
| (d) |
|
| 1,202 |
|
|
| - |
|
|
| 15,838 |
|
|
| 2,424 |
|
|
| 14,616 |
|
|
| 17,040 |
|
|
| (7,486 | ) |
| 1997 |
West Chester Commerce Park I |
| 3 |
|
|
|
| 3,366 |
|
|
| 13,877 |
|
|
| 3,203 |
|
|
| 3,366 |
|
|
| 17,080 |
|
|
| 20,446 |
|
|
| (2,581 | ) |
| 2012, 2014 |
Cincinnati, Ohio |
| 22 |
|
|
|
| 39,703 |
|
|
| 145,962 |
|
|
| 57,886 |
|
|
| 41,924 |
|
|
| 201,627 |
|
|
| 243,551 |
|
|
| (36,435 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbus, Ohio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alum Creek Distribution Center |
| 3 |
| (d) |
|
| 3,945 |
|
|
| 33,239 |
|
|
| 321 |
|
|
| 3,945 |
|
|
| 33,560 |
|
|
| 37,505 |
|
|
| (1,871 | ) |
| 2015 |
Brookham Distribution Center |
| 2 |
|
|
|
| 5,964 |
|
|
| 23,858 |
|
|
| 5,130 |
|
|
| 5,965 |
|
|
| 28,987 |
|
|
| 34,952 |
|
|
| (12,576 | ) |
| 2005 |
Capital Park South Distribution Center |
| 8 |
| (d) |
|
| 10,077 |
|
|
| 39,631 |
|
|
| 32,697 |
|
|
| 10,470 |
|
|
| 71,935 |
|
|
| 82,405 |
|
|
| (24,153 | ) |
| 1996, 2012, 2014 |
Columbus West Industrial Center |
| 1 |
|
|
|
| 427 |
|
|
| 2,407 |
|
|
| 202 |
|
|
| 427 |
|
|
| 2,609 |
|
|
| 3,036 |
|
|
| (298 | ) |
| 2014 |
Corporate Park West |
| 1 |
| (d) |
|
| 633 |
|
|
| 3,583 |
|
|
| 89 |
|
|
| 633 |
|
|
| 3,672 |
|
|
| 4,305 |
|
|
| (327 | ) |
| 2014 |
Crosswinds Distribution Center |
| 1 |
|
|
|
| 3,058 |
|
|
| 17,758 |
|
|
| 500 |
|
|
| 3,058 |
|
|
| 18,258 |
|
|
| 21,316 |
|
|
| (1,666 | ) |
| 2014 |
Etna Distribution Center |
| 2 |
| (d) |
|
| 5,840 |
|
|
| 33,734 |
|
|
| 1,055 |
|
|
| 5,840 |
|
|
| 34,789 |
|
|
| 40,629 |
|
|
| (2,954 | ) |
| 2014 |
International Street Commerce Center |
| 2 |
|
|
|
| 1,503 |
|
|
| 6,356 |
|
|
| 483 |
|
|
| 1,503 |
|
|
| 6,839 |
|
|
| 8,342 |
|
|
| (1,312 | ) |
| 2012 |
South Park Distribution Center |
| 2 |
| (d) |
|
| 3,343 |
|
|
| 15,182 |
|
|
| 3,627 |
|
|
| 3,343 |
|
|
| 18,809 |
|
|
| 22,152 |
|
|
| (9,453 | ) |
| 1999, 2005 |
Westpointe Distribution Center |
| 2 |
|
|
|
| 1,446 |
|
|
| 7,601 |
|
|
| 1,764 |
|
|
| 1,446 |
|
|
| 9,365 |
|
|
| 10,811 |
|
|
| (4,312 | ) |
| 2007 |
Columbus, Ohio |
| 24 |
|
|
|
| 36,236 |
|
|
| 183,349 |
|
|
| 45,868 |
|
|
| 36,630 |
|
|
| 228,823 |
|
|
| 265,453 |
|
|
| (58,922 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dallas/Fort Worth, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington Corporate Center |
| 4 |
| (d) |
|
| 9,380 |
|
|
| 41,744 |
|
|
| 450 |
|
|
| 9,380 |
|
|
| 42,194 |
|
|
| 51,574 |
|
|
| (5,320 | ) |
| 2012, 2014, 2015 |
Dallas Corporate Center |
| 11 |
| (d) |
|
| 6,449 |
|
|
| 5,441 |
|
|
| 35,845 |
|
|
| 6,645 |
|
|
| 41,090 |
|
|
| 47,735 |
|
|
| (21,109 | ) |
| 1996, 1997, 1998, 1999, 2012 |
Dallas Corporate Center North Distribution Center |
| 2 |
|
|
|
| 6,014 |
|
|
| - |
|
|
| 20,152 |
|
|
| 5,990 |
|
|
| 20,176 |
|
|
| 26,166 |
|
|
| (301 | ) |
| 2015 |
DFW Cargo Center 1 |
| 1 |
|
|
|
| - |
|
|
| 35,117 |
|
|
| 1,284 |
|
|
| - |
|
|
| 36,401 |
|
|
| 36,401 |
|
|
| (8,082 | ) |
| 2011 |
DFW Cargo Center 2 |
| 1 |
|
|
|
| - |
|
|
| 27,916 |
|
|
| 221 |
|
|
| - |
|
|
| 28,137 |
|
|
| 28,137 |
|
|
| (5,964 | ) |
| 2011 |
DFW Cargo Center East |
| 3 |
|
|
|
| - |
|
|
| 19,730 |
|
|
| 367 |
|
|
| - |
|
|
| 20,097 |
|
|
| 20,097 |
|
|
| (7,001 | ) |
| 2011 |
DFW Logistics Center 6 |
| 1 |
|
|
|
| 2,010 |
|
|
| 8,153 |
|
|
| 580 |
|
|
| 2,010 |
|
|
| 8,733 |
|
|
| 10,743 |
|
|
| (418 | ) |
| 2015 |
Flower Mound Distribution Center |
| 1 |
| (d) |
|
| 5,157 |
|
|
| 20,991 |
|
|
| 2,588 |
|
|
| 5,157 |
|
|
| 23,579 |
|
|
| 28,736 |
|
|
| (8,198 | ) |
| 2007 |
Frankford Trade Center |
| 4 |
|
|
|
| 6,882 |
|
|
| 27,530 |
|
|
| 807 |
|
|
| 6,882 |
|
|
| 28,337 |
|
|
| 35,219 |
|
|
| (938 | ) |
| 2015 |
Freeport Corporate Center |
| 6 |
| (d) |
|
| 15,965 |
|
|
| 63,935 |
|
|
| 9,665 |
|
|
| 15,872 |
|
|
| 73,693 |
|
|
| 89,565 |
|
|
| (9,737 | ) |
| 2012, 2014 |
Freeport Distribution Center |
| 4 |
|
|
|
| 1,393 |
|
|
| 5,549 |
|
|
| 6,289 |
|
|
| 1,440 |
|
|
| 11,791 |
|
|
| 13,231 |
|
|
| (7,219 | ) |
| 1996, 1997, 1998 |
Gold Spike Distribution Center |
| 1 |
|
|
|
| 3,629 |
|
|
| - |
|
|
| 18,094 |
|
|
| 3,629 |
|
|
| 18,094 |
|
|
| 21,723 |
|
|
| (334 | ) |
| 2015 |
Great Southwest Corporate Center |
| 3 |
|
|
|
| 4,476 |
|
|
| 18,358 |
|
|
| 455 |
|
|
| 4,476 |
|
|
| 18,813 |
|
|
| 23,289 |
|
|
| (1,625 | ) |
| 2014 |
Great Southwest Distribution Center |
| 22 |
| (d) |
|
| 44,349 |
|
|
| 190,068 |
|
|
| 26,195 |
|
|
| 44,454 |
|
|
| 216,158 |
|
|
| 260,612 |
|
|
| (67,964 | ) |
| 1995, 1996, 1997, 1999, 2000, 2005, 2012, 2014, 2015 |
Greater Dallas Industrial Portfolio |
| 3 |
|
|
|
| 3,525 |
|
|
| 16,375 |
|
|
| 1,713 |
|
|
| 3,525 |
|
|
| 18,088 |
|
|
| 21,613 |
|
|
| (4,066 | ) |
| 2011 |
Heritage Business Park |
| 9 |
| (d) |
|
| 20,153 |
|
|
| 93,145 |
|
|
| 29,179 |
|
|
| 20,153 |
|
|
| 122,324 |
|
|
| 142,477 |
|
|
| (5,187 | ) |
| 2015 |
Lonestar Portfolio |
| 1 |
|
|
|
| 2,396 |
|
|
| 7,839 |
|
|
| 2,774 |
|
|
| 2,396 |
|
|
| 10,613 |
|
|
| 13,009 |
|
|
| (2,655 | ) |
| 2011 |
Mesquite Distribution Center |
| 2 |
|
|
|
| 8,355 |
|
|
| 34,609 |
|
|
| 1,247 |
|
|
| 8,355 |
|
|
| 35,856 |
|
|
| 44,211 |
|
|
| (4,450 | ) |
| 2012, 2014 |
Northgate Distribution Center |
| 10 |
| (d) |
|
| 13,001 |
|
|
| 62,062 |
|
|
| 9,361 |
|
|
| 13,488 |
|
|
| 70,936 |
|
|
| 84,424 |
|
|
| (23,775 | ) |
| 1999, 2005, 2008, 2012, 2014 |
Park 121 Distribution Center |
| 1 |
|
|
|
| 6,888 |
|
|
| - |
|
|
| 14,628 |
|
|
| 7,662 |
|
|
| 13,854 |
|
|
| 21,516 |
|
|
| (217 | ) |
| 2016 |
Riverside Drive Distribution Center |
| 1 |
| (d) |
|
| 5,107 |
|
|
| 14,919 |
|
|
| 74 |
|
|
| 5,107 |
|
|
| 14,993 |
|
|
| 20,100 |
|
|
| (1,020 | ) |
| 2015 |
ST Micro Distribution Center |
| 2 |
|
|
|
| 2,429 |
|
|
| - |
|
|
| 17,317 |
|
|
| 4,026 |
|
|
| 15,720 |
|
|
| 19,746 |
|
|
| (96 | ) |
| 2016 |
Stemmons Distribution Center |
| 1 |
|
|
|
| 272 |
|
|
| 1,544 |
|
|
| 1,018 |
|
|
| 272 |
|
|
| 2,562 |
|
|
| 2,834 |
|
|
| (1,887 | ) |
| 1995 |
Stemmons Industrial Center |
| 8 |
|
|
|
| 1,653 |
|
|
| 10,526 |
|
|
| 6,697 |
|
|
| 1,653 |
|
|
| 17,223 |
|
|
| 18,876 |
|
|
| (12,552 | ) |
| 1994, 1995, 1996, 1999 |
Trinity Mills Distribution Center |
| 1 |
| (d) |
|
| 735 |
|
|
| 3,774 |
|
|
| 1,114 |
|
|
| 735 |
|
|
| 4,888 |
|
|
| 5,623 |
|
|
| (2,907 | ) |
| 1999 |
Valwood Business Center |
| 5 |
| (d) |
|
| 4,679 |
|
|
| 19,195 |
|
|
| 1,762 |
|
|
| 4,679 |
|
|
| 20,957 |
|
|
| 25,636 |
|
|
| (6,034 | ) |
| 2001, 2006, 2014 |
102
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Northwestern Corporate Center | 7 | 6,104 | 21,838 | 22,361 | 7,043 | 43,260 | 50,303 | (13,021) | 1992, 1993, 1994, 1997, 2012 | |||||||||||||||||||||||||||||
Vista Del Sol Ind Ctr III | 1 | 2,040 | 8,840 | 54 | 2,040 | 8,894 | 10,934 | (389) | 2012 | |||||||||||||||||||||||||||||
Vista Del Sol Industrial Center II | 3 | 3,587 | 13,793 | 7,681 | 3,977 | 21,084 | 25,061 | (4,711) | 1997, 1998, 2012 | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
El Paso, Texas | 12 | 12,004 | 46,018 | 31,756 | 13,333 | 76,445 | 89,778 | (20,383) | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Houston, Texas | ||||||||||||||||||||||||||||||||||||||
Blalock Distribution Center | 3 | (d | ) | 5,032 | 21,983 | 3,018 | 5,031 | 25,002 | 30,033 | (3,438 | ) | 2002, 2012 | ||||||||||||||||||||||||||
Crosstimbers Distribution Center | 1 | 359 | 2,035 | 1,222 | 359 | 3,257 | 3,616 | (2,203 | ) | 1994 | ||||||||||||||||||||||||||||
Jersey Village Corp Ctr | 2 | (d | ) | 9,760 | 40,857 | 256 | 9,760 | 41,113 | 50,873 | (2,788 | ) | 2012 | ||||||||||||||||||||||||||
Kempwood Business Center | 4 | 1,746 | 9,894 | 3,416 | 1,746 | 13,310 | 15,056 | (6,187 | ) | 2001 | ||||||||||||||||||||||||||||
Northpark Distribution Center | 4 | (d | ) | 5,313 | 16,568 | 9,140 | 5,313 | 25,708 | 31,021 | (3,630 | ) | 2006, 2008, 2012 | ||||||||||||||||||||||||||
Perimeter Distribution Center | 2 | 813 | 4,604 | 1,577 | 813 | 6,181 | 6,994 | (3,336 | ) | 1999 | ||||||||||||||||||||||||||||
Pine Forest Business Center | 9 | 2,665 | 14,132 | 7,510 | 2,665 | 21,642 | 24,307 | (13,901 | ) | 1993, 1995 | ||||||||||||||||||||||||||||
Pine North Distribution Center | 2 | 847 | 4,800 | 1,157 | 847 | 5,957 | 6,804 | (3,132 | ) | 1999 | ||||||||||||||||||||||||||||
Pinemont Distribution Center | 2 | 642 | 3,636 | 958 | 642 | 4,594 | 5,236 | (2,408 | ) | 1999 | ||||||||||||||||||||||||||||
Post Oak Business Center | 11 | 2,334 | 11,655 | 9,185 | 2,334 | 20,840 | 23,174 | (13,197 | ) | 1993, 1994, 1996 | ||||||||||||||||||||||||||||
Post Oak Distribution Center | 5 | 1,522 | 8,758 | 5,644 | 1,522 | 14,402 | 15,924 | (10,153 | ) | 1993, 1994 | ||||||||||||||||||||||||||||
South Loop Distribution Center | 2 | 418 | 1,943 | 1,934 | 418 | 3,877 | 4,295 | (2,512 | ) | 1994 | ||||||||||||||||||||||||||||
Southland Distribution Center | 2 | 2,505 | 12,437 | 2,013 | 2,505 | 14,450 | 16,955 | (3,692 | ) | 2002, 2012 | ||||||||||||||||||||||||||||
West by Northwest Industrial Center | 5 | (d | ) | 4,510 | 19,142 | 3,386 | 4,650 | 22,388 | 27,038 | (4,231 | ) | 1993, 1994, 2012 | ||||||||||||||||||||||||||
White Street Distribution Center | 1 | 469 | 2,656 | 2,147 | 469 | 4,803 | 5,272 | (3,059 | ) | 1995 | ||||||||||||||||||||||||||||
Wingfoot Dist Ctr | 2 | 1,976 | 8,606 | 3,387 | 1,976 | 11,993 | 13,969 | (752 | ) | 2012, 2013 | ||||||||||||||||||||||||||||
World Houston Dist Ctr | 1 | 1,529 | 6,326 | 38 | 1,529 | 6,364 | 7,893 | (256 | ) | 2012 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Houston, Texas | 58 | 42,440 | 190,032 | 55,988 | 42,579 | 245,881 | 288,460 | (78,875 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Indianapolis, Indiana | ||||||||||||||||||||||||||||||||||||||
Eastside Distribution Center | 1 | 228 | 1,187 | 2,021 | 299 | 3,137 | 3,436 | (1,630 | ) | 1995 | ||||||||||||||||||||||||||||
North by Northeast Corporate Center | 1 | 1,058 | - | 9,028 | 1,059 | 9,027 | 10,086 | (4,263 | ) | 1995 | ||||||||||||||||||||||||||||
Park 100 Industrial Center | 17 | (d | ) | 10,410 | 43,048 | 19,055 | 10,410 | 62,103 | 72,513 | (18,372 | ) | 1995, 2012 | ||||||||||||||||||||||||||
Shadeland Industrial Center | 3 | 428 | 2,431 | 2,903 | 429 | 5,333 | 5,762 | (3,553 | ) | 1995 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Indianapolis, Indiana | 22 | 12,124 | 46,666 | 33,007 | 12,197 | 79,600 | 91,797 | (27,818 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Las Vegas, Nevada | ||||||||||||||||||||||||||||||||||||||
Black Mountain Distribution Center | 2 | 1,108 | - | 7,765 | 1,206 | 7,667 | 8,873 | (3,747 | ) | 1997 | ||||||||||||||||||||||||||||
Cameron Business Center | 1 | 1,634 | 9,255 | 1,178 | 1,634 | 10,433 | 12,067 | (4,913 | ) | 1999 | ||||||||||||||||||||||||||||
Sunrise Ind Park | 8 | 19,782 | 89,555 | 898 | 19,782 | 90,453 | 110,235 | (1,729 | ) | 2011, 2013 | ||||||||||||||||||||||||||||
West One Business Center | 4 | 2,468 | 13,985 | 4,647 | 2,468 | 18,632 | 21,100 | (10,586 | ) | 1996 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Las Vegas, Nevada | 15 | 24,992 | 112,795 | 14,488 | 25,090 | 127,185 | 152,275 | (20,975 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Louisville, Kentucky | ||||||||||||||||||||||||||||||||||||||
Cedar Grove Distribution Center | 3 | 9,611 | 45,964 | 3,274 | 9,610 | 49,239 | 58,849 | (8,438 | ) | 2005, 2008, 2012 | ||||||||||||||||||||||||||||
Commerce Crossings Distribution Center | 1 | 1,912 | 7,649 | 137 | 1,912 | 7,786 | 9,698 | (2,179 | ) | 2005 | ||||||||||||||||||||||||||||
I-65 Meyer Dist. Center | 2 | (d | ) | 7,770 | 15,282 | 24,432 | 8,077 | 39,407 | 47,484 | (6,067 | ) | 2006, 2012 | ||||||||||||||||||||||||||
New Cut Road Dist Ctr | 1 | 2,711 | 11,694 | 484 | 2,711 | 12,178 | 14,889 | (869 | ) | 2012 | ||||||||||||||||||||||||||||
Riverport Distribution Center | 1 | 1,515 | 8,585 | 2,664 | 1,515 | 11,249 | 12,764 | (6,491 | ) | 1999 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Louisville, Kentucky | 8 | 23,519 | 89,174 | 30,991 | 23,825 | 119,859 | 143,684 | (24,044 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Memphis, Tennessee | ||||||||||||||||||||||||||||||||||||||
Delp Distribution Center | 3 | 1,068 | 10,546 | 373 | 1,068 | 10,919 | 11,987 | (6,767 | ) | 1995 | ||||||||||||||||||||||||||||
DeSoto Distribution Center | 1 | 4,761 | - | 27,060 | 4,761 | 27,060 | 31,821 | (4,775 | ) | 2007 | ||||||||||||||||||||||||||||
Memphis Distribution Center | 4 | 9,506 | 42,731 | 978 | 9,390 | 43,825 | 53,215 | (4,454 | ) | 2002, 2012 | ||||||||||||||||||||||||||||
Memphis Ind Park | 2 | 3,252 | 14,448 | 137 | 3,252 | 14,585 | 17,837 | (1,095 | ) | 2012 | ||||||||||||||||||||||||||||
Olive Branch Distribution Center | 1 | (d | ) | 6,719 | 31,134 | 187 | 6,719 | 31,321 | 38,040 | (2,497 | ) | 2012 | ||||||||||||||||||||||||||
Willow Lake Distribution Center | 1 | 613 | 3,474 | (28 | ) | 613 | 3,446 | 4,059 | (1,952 | ) | 1999 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Memphis, Tennessee | 12 | 25,919 | 102,333 | 28,707 | 25,803 | 131,156 | 156,959 | (21,540 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Nashville, Tennessee | ||||||||||||||||||||||||||||||||||||||
CentrePointe Distribution Center | 2 | (d | ) | 3,760 | 15,042 | - | 3,760 | 15,042 | 18,802 | - | 2013 | |||||||||||||||||||||||||||
Elam Farms Park | 1 | 2,097 | 8,386 | 353 | 2,097 | 8,739 | 10,836 | (153 | ) | 2013 | ||||||||||||||||||||||||||||
I-40 Industrial Center | 4 | 3,075 | 15,333 | 3,500 | 3,075 | 18,833 | 21,908 | (6,288 | ) | 1995, 1996, 1999, 2012 | ||||||||||||||||||||||||||||
Interchange City Distribution Center | 3 | (d | ) | 2,938 | 14,314 | 5,889 | 3,452 | 19,689 | 23,141 | (3,806 | ) | 1998, 2012 | ||||||||||||||||||||||||||
Southpark Distribution Center | 4 | (d | ) | 11,834 | 47,336 | - | 11,834 | 47,336 | 59,170 | - | 2013 | |||||||||||||||||||||||||||
Space Park South Distribution Center | 15 | 3,499 | 19,830 | 13,589 | 3,499 | 33,419 | 36,918 | (21,902 | ) | 1994 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Nashville, Tennessee | 29 | 27,203 | 120,241 | 23,331 | 27,717 | 143,058 | 170,775 | (32,149 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
New Jersey/New York City | ||||||||||||||||||||||||||||||||||||||
Brunswick Distribution Center | 2 | 870 | 4,928 | 2,802 | 870 | 7,730 | 8,600 | (4,764 | ) | 1997 | ||||||||||||||||||||||||||||
CenterPoint Dist Ctr | 1 | 2,839 | 12,490 | 194 | 2,839 | 12,684 | 15,523 | (1,069 | ) | 2012 | ||||||||||||||||||||||||||||
Chester Distribution Center | 1 | 548 | 5,319 | 300 | 548 | 5,619 | 6,167 | (3,974 | ) | 2002 | ||||||||||||||||||||||||||||
Clifton Dist Ctr | 1 | 8,064 | 12,096 | 982 | 8,064 | 13,078 | 21,142 | (1,518 | ) | 2010 | ||||||||||||||||||||||||||||
Cranbury Bus Park | 5 | (d | ) | 18,180 | 53,248 | 1,498 | 18,180 | 54,746 | 72,926 | (2,803 | ) | 2012 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
Valwood Distribution Center |
| 5 |
| (d) |
|
| 4,742 |
|
|
| 20,629 |
|
|
| 1,860 |
|
|
| 4,742 |
|
|
| 22,489 |
|
|
| 27,231 |
|
|
| (5,039 | ) |
| 1999, 2014 |
Valwood Industrial Center |
| 2 |
|
|
|
| 1,802 |
|
|
| 9,658 |
|
|
| 958 |
|
|
| 1,802 |
|
|
| 10,616 |
|
|
| 12,418 |
|
|
| (2,564 | ) |
| 2011 |
Watersridge Distribution Center |
| 1 |
| (d) |
|
| 1,939 |
|
|
| 11,365 |
|
|
| 103 |
|
|
| 1,939 |
|
|
| 11,468 |
|
|
| 13,407 |
|
|
| (622 | ) |
| 2015 |
Dallas/Fort Worth, Texas |
| 116 |
|
|
|
| 183,380 |
|
|
| 770,172 |
|
|
| 212,797 |
|
|
| 186,469 |
|
|
| 979,880 |
|
|
| 1,166,349 |
|
|
| (217,281 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver, Colorado |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver Business Center |
| 3 |
|
|
|
| 3,142 |
|
|
| 13,396 |
|
|
| 830 |
|
|
| 3,142 |
|
|
| 14,226 |
|
|
| 17,368 |
|
|
| (2,507 | ) |
| 2012 |
Havana Distribution Center |
| 1 |
| (d) |
|
| 1,421 |
|
|
| 5,657 |
|
|
| 330 |
|
|
| 1,421 |
|
|
| 5,987 |
|
|
| 7,408 |
|
|
| (700 | ) |
| 2014 |
Pagosa Distribution Center |
| 1 |
| (d) |
|
| 398 |
|
|
| 2,322 |
|
|
| 1,993 |
|
|
| 398 |
|
|
| 4,315 |
|
|
| 4,713 |
|
|
| (3,249 | ) |
| 1993 |
Peoria Distribution Center |
| 2 |
| (d) |
|
| 4,129 |
|
|
| 16,593 |
|
|
| 160 |
|
|
| 4,129 |
|
|
| 16,753 |
|
|
| 20,882 |
|
|
| (1,392 | ) |
| 2014 |
Stapleton Business Center North |
| 2 |
|
|
|
| 8,930 |
|
|
| - |
|
|
| 32,664 |
|
|
| 7,230 |
|
|
| 34,364 |
|
|
| 41,594 |
|
|
| (1,869 | ) |
| 2014, 2015 |
Stapleton Business Center |
| 12 |
|
|
|
| 34,634 |
|
|
| 139,257 |
|
|
| 12,215 |
|
|
| 34,635 |
|
|
| 151,471 |
|
|
| 186,106 |
|
|
| (58,668 | ) |
| 2005 |
Upland Distribution Center |
| 6 |
| (d) |
|
| 4,064 |
|
|
| 19,035 |
|
|
| 6,180 |
|
|
| 4,077 |
|
|
| 25,202 |
|
|
| 29,279 |
|
|
| (7,295 | ) |
| 1994, 1995, 2014 |
Upland Distribution Center II |
| 2 |
| (d) |
|
| 1,396 |
|
|
| 5,349 |
|
|
| 2,183 |
|
|
| 1,409 |
|
|
| 7,519 |
|
|
| 8,928 |
|
|
| (3,465 | ) |
| 1993, 2014 |
Denver, Colorado |
| 29 |
|
|
|
| 58,114 |
|
|
| 201,609 |
|
|
| 56,555 |
|
|
| 56,441 |
|
|
| 259,837 |
|
|
| 316,278 |
|
|
| (79,145 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avondale Distribution Center |
| 1 |
|
|
|
| 2,231 |
|
|
| 5,044 |
|
|
| 451 |
|
|
| 2,231 |
|
|
| 5,495 |
|
|
| 7,726 |
|
|
| (306 | ) |
| 2015 |
Blalock Distribution Center |
| 3 |
| (d) |
|
| 5,032 |
|
|
| 21,983 |
|
|
| 3,340 |
|
|
| 5,031 |
|
|
| 25,324 |
|
|
| 30,355 |
|
|
| (6,747 | ) |
| 2002, 2012 |
Cole Creek Distribution Center |
| 1 |
|
|
|
| 3,865 |
|
|
| 22,534 |
|
|
| 298 |
|
|
| 3,865 |
|
|
| 22,832 |
|
|
| 26,697 |
|
|
| (1,111 | ) |
| 2015 |
IAH Cargo Center 1 |
| 1 |
|
|
|
| - |
|
|
| 13,267 |
|
|
| 546 |
|
|
| - |
|
|
| 13,813 |
|
|
| 13,813 |
|
|
| (1,813 | ) |
| 2012 |
Jersey Village Corporate Center |
| 4 |
| (d) |
|
| 17,971 |
|
|
| 73,062 |
|
|
| 2,905 |
|
|
| 17,830 |
|
|
| 76,108 |
|
|
| 93,938 |
|
|
| (9,957 | ) |
| 2012, 2014 |
Kempwood Business Center |
| 4 |
|
|
|
| 1,746 |
|
|
| 9,894 |
|
|
| 3,819 |
|
|
| 1,746 |
|
|
| 13,713 |
|
|
| 15,459 |
|
|
| (7,878 | ) |
| 2001 |
Northpark Distribution Center |
| 12 |
| (d) |
|
| 15,015 |
|
|
| 37,139 |
|
|
| 36,813 |
|
|
| 15,015 |
|
|
| 73,952 |
|
|
| 88,967 |
|
|
| (10,763 | ) |
| 2006, 2008, 2012, 2013, 2014 |
Perimeter Distribution Center |
| 2 |
|
|
|
| 676 |
|
|
| 4,604 |
|
|
| 1,131 |
|
|
| 745 |
|
|
| 5,666 |
|
|
| 6,411 |
|
|
| (3,443 | ) |
| 1999 |
Pine Forest Business Center |
| 11 |
| (d) |
|
| 6,042 |
|
|
| 27,639 |
|
|
| 9,861 |
|
|
| 6,042 |
|
|
| 37,500 |
|
|
| 43,542 |
|
|
| (18,792 | ) |
| 1993, 1995, 2014 |
Pine North Distribution Center |
| 2 |
|
|
|
| 847 |
|
|
| 4,800 |
|
|
| 2,067 |
|
|
| 847 |
|
|
| 6,867 |
|
|
| 7,714 |
|
|
| (3,889 | ) |
| 1999 |
Pinemont Distribution Center |
| 2 |
|
|
|
| 642 |
|
|
| 3,636 |
|
|
| 1,153 |
|
|
| 642 |
|
|
| 4,789 |
|
|
| 5,431 |
|
|
| (2,976 | ) |
| 1999 |
Post Oak Business Center |
| 11 |
|
|
|
| 2,334 |
|
|
| 11,655 |
|
|
| 10,351 |
|
|
| 2,334 |
|
|
| 22,006 |
|
|
| 24,340 |
|
|
| (16,351 | ) |
| 1993, 1994, 1996 |
Post Oak Distribution Center |
| 5 |
|
|
|
| 1,522 |
|
|
| 8,758 |
|
|
| 6,560 |
|
|
| 1,522 |
|
|
| 15,318 |
|
|
| 16,840 |
|
|
| (11,915 | ) |
| 1993, 1994 |
Satsuma Station Distribution Center |
| 1 |
| (d) |
|
| 3,088 |
|
|
| 22,389 |
|
|
| 190 |
|
|
| 3,088 |
|
|
| 22,579 |
|
|
| 25,667 |
|
|
| (1,018 | ) |
| 2015 |
South Loop Distribution Center |
| 2 |
|
|
|
| 418 |
|
|
| 1,943 |
|
|
| 2,285 |
|
|
| 418 |
|
|
| 4,228 |
|
|
| 4,646 |
|
|
| (3,106 | ) |
| 1994 |
Sugarland Corporate Center |
| 2 |
|
|
|
| 3,506 |
|
|
| 14,067 |
|
|
| 123 |
|
|
| 3,506 |
|
|
| 14,190 |
|
|
| 17,696 |
|
|
| (1,173 | ) |
| 2014 |
West by Northwest Industrial Center |
| 9 |
| (d) |
|
| 11,316 |
|
|
| 46,372 |
|
|
| 4,386 |
|
|
| 11,456 |
|
|
| 50,618 |
|
|
| 62,074 |
|
|
| (9,179 | ) |
| 1993, 1994, 2012, 2014 |
White Street Distribution Center |
| 1 |
|
|
|
| 469 |
|
|
| 2,656 |
|
|
| 2,544 |
|
|
| 469 |
|
|
| 5,200 |
|
|
| 5,669 |
|
|
| (3,797 | ) |
| 1995 |
Wingfoot Distribution Center |
| 2 |
|
|
|
| 1,976 |
|
|
| 8,606 |
|
|
| 3,480 |
|
|
| 1,976 |
|
|
| 12,086 |
|
|
| 14,062 |
|
|
| (2,229 | ) |
| 2012, 2013 |
World Houston Distribution Center |
| 1 |
|
|
|
| 1,529 |
|
|
| 6,326 |
|
|
| 91 |
|
|
| 1,529 |
|
|
| 6,417 |
|
|
| 7,946 |
|
|
| (950 | ) |
| 2012 |
Houston, Texas |
| 77 |
|
|
|
| 80,225 |
|
|
| 346,374 |
|
|
| 92,394 |
|
|
| 80,292 |
|
|
| 438,701 |
|
|
| 518,993 |
|
|
| (117,393 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indianapolis, Indiana |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airport Business Center |
| 2 |
| (d) |
|
| 1,667 |
|
|
| 6,445 |
|
|
| 464 |
|
|
| 1,667 |
|
|
| 6,909 |
|
|
| 8,576 |
|
|
| (577 | ) |
| 2014 |
Airtech Park |
| 1 |
| (d) |
|
| 7,305 |
|
|
| 29,001 |
|
|
| 467 |
|
|
| 7,305 |
|
|
| 29,468 |
|
|
| 36,773 |
|
|
| (2,464 | ) |
| 2014 |
Eastside Distribution Center |
| 1 |
|
|
|
| 228 |
|
|
| 1,187 |
|
|
| 2,255 |
|
|
| 299 |
|
|
| 3,371 |
|
|
| 3,670 |
|
|
| (2,188 | ) |
| 1995 |
North by Northeast Corporate Center |
| 1 |
|
|
|
| 1,058 |
|
|
| - |
|
|
| 9,302 |
|
|
| 1,059 |
|
|
| 9,301 |
|
|
| 10,360 |
|
|
| (5,718 | ) |
| 1995 |
North Plainfield Park Distribution Center |
| 1 |
| (d) |
|
| 8,562 |
|
|
| 34,778 |
|
|
| 103 |
|
|
| 8,562 |
|
|
| 34,881 |
|
|
| 43,443 |
|
|
| (2,925 | ) |
| 2014 |
Park 100 Industrial Center |
| 16 |
| (d) |
|
| 9,360 |
|
|
| 38,402 |
|
|
| 23,790 |
|
|
| 9,360 |
|
|
| 62,192 |
|
|
| 71,552 |
|
|
| (27,240 | ) |
| 1995, 2012 |
Park 267 |
| 1 |
|
|
|
| 3,705 |
|
|
| 15,695 |
|
|
| 948 |
|
|
| 3,705 |
|
|
| 16,643 |
|
|
| 20,348 |
|
|
| (1,293 | ) |
| 2014 |
Shadeland Industrial Center |
| 3 |
|
|
|
| 428 |
|
|
| 2,431 |
|
|
| 3,459 |
|
|
| 429 |
|
|
| 5,889 |
|
|
| 6,318 |
|
|
| (4,225 | ) |
| 1995 |
Indianapolis, Indiana |
| 26 |
|
|
|
| 32,313 |
|
|
| 127,939 |
|
|
| 40,788 |
|
|
| 32,386 |
|
|
| 168,654 |
|
|
| 201,040 |
|
|
| (46,630 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jacksonville, Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JAX Cargo Center |
| 1 |
|
|
|
| - |
|
|
| 2,892 |
|
|
| 176 |
|
|
| - |
|
|
| 3,068 |
|
|
| 3,068 |
|
|
| (1,423 | ) |
| 2011 |
Jacksonville, Florida |
| 1 |
|
|
|
| - |
|
|
| 2,892 |
|
|
| 176 |
|
|
| - |
|
|
| 3,068 |
|
|
| 3,068 |
|
|
| (1,423 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kansas City, Kansas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MCI Cargo Center 1 |
| 1 |
|
|
|
| - |
|
|
| 2,781 |
|
|
| 278 |
|
|
| - |
|
|
| 3,059 |
|
|
| 3,059 |
|
|
| (2,026 | ) |
| 2011 |
MCI Cargo Center 2 |
| 1 |
|
|
|
| - |
|
|
| 11,630 |
|
|
| - |
|
|
| - |
|
|
| 11,630 |
|
|
| 11,630 |
|
|
| (3,975 | ) |
| 2011 |
Kansas City, Kansas |
| 2 |
|
|
|
| - |
|
|
| 14,411 |
|
|
| 278 |
|
|
| - |
|
|
| 14,689 |
|
|
| 14,689 |
|
|
| (6,001 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas, Nevada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arrowhead Commerce Center |
| 15 |
| (d) |
|
| 30,075 |
|
|
| 82,214 |
|
|
| 2,599 |
|
|
| 30,075 |
|
|
| 84,813 |
|
|
| 114,888 |
|
|
| (4,433 | ) |
| 2015 |
Cameron Business Center |
| 1 |
|
|
|
| 1,963 |
|
|
| 3,626 |
|
|
| 343 |
|
|
| 1,963 |
|
|
| 3,969 |
|
|
| 5,932 |
|
|
| (206 | ) |
| 2015 |
Las Vegas Corporate Center |
| 6 |
|
|
|
| 23,118 |
|
|
| 51,157 |
|
|
| 1,846 |
|
|
| 13,656 |
|
|
| 62,465 |
|
|
| 76,121 |
|
|
| (3,813 | ) |
| 2014, 2015 |
Montessouri Distribution Center |
| 1 |
|
|
|
| 1,039 |
|
|
| 2,967 |
|
|
| 15 |
|
|
| 1,039 |
|
|
| 2,982 |
|
|
| 4,021 |
|
|
| (184 | ) |
| 2015 |
North 15 Freeway Distribution Center |
| 1 |
|
|
|
| 2,638 |
|
|
| 9,887 |
|
|
| 1,731 |
|
|
| 2,655 |
|
|
| 11,601 |
|
|
| 14,256 |
|
|
| (67 | ) |
| 2016 |
Pama Distribution Center |
| 1 |
| (d) |
|
| 2,223 |
|
|
| 5,695 |
|
|
| 78 |
|
|
| 2,223 |
|
|
| 5,773 |
|
|
| 7,996 |
|
|
| (292 | ) |
| 2015 |
Sunrise Industrial Park |
| 10 |
|
|
|
| 21,499 |
|
|
| 92,503 |
|
|
| 19,237 |
|
|
| 21,611 |
|
|
| 111,628 |
|
|
| 133,239 |
|
|
| (13,142 | ) |
| 2011, 2013, 2014, 2016 |
Valley View Distribution Center |
| 1 |
|
|
|
| 2,420 |
|
|
| 258 |
|
|
| 8 |
|
|
| 2,420 |
|
|
| 266 |
|
|
| 2,686 |
|
|
| (168 | ) |
| 2015 |
Warm Springs Distribution Center |
| 6 |
| (d) |
|
| 8,897 |
|
|
| 39,055 |
|
|
| 606 |
|
|
| 8,897 |
|
|
| 39,661 |
|
|
| 48,558 |
|
|
| (2,104 | ) |
| 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Dellamor | 7 | 6,710 | 35,478 | 920 | 6,710 | 36,398 | 43,108 | (4,185 | ) | 2011 | ||||||||||||||||||||||||||||
Docks Corner SG (Phase II) | 1 | 16,232 | 19,264 | 4,527 | 16,232 | 23,791 | 40,023 | (3,837 | ) | 2011 | ||||||||||||||||||||||||||||
Exit 10 Distribution Center | 7 | (d | ) | 24,152 | 130,270 | 5,054 | 24,152 | 135,324 | 159,476 | (37,077 | ) | 2005, 2010 | ||||||||||||||||||||||||||
Exit 8A Distribution Center | 1 | 7,531 | 44,103 | 412 | 7,531 | 44,515 | 52,046 | (12,335 | ) | 2005 | ||||||||||||||||||||||||||||
Franklin Comm Ctr | 1 | 9,304 | 23,768 | 81 | 9,304 | 23,849 | 33,153 | (1,904 | ) | 2011 | ||||||||||||||||||||||||||||
Highway 17 55 Madis | 1 | 2,937 | 13,477 | 22 | 2,937 | 13,499 | 16,436 | (1,519 | ) | 2011 | ||||||||||||||||||||||||||||
Kilmer Distribution Center | 4 | (d | ) | 2,526 | 14,313 | 3,622 | 2,526 | 17,935 | 20,461 | (10,885 | ) | 1996 | ||||||||||||||||||||||||||
Liberty Log Ctr | 1 | 3,273 | 24,029 | 60 | 3,273 | 24,089 | 27,362 | (1,748 | ) | 2011 | ||||||||||||||||||||||||||||
Linden Industrial | 1 | 1,321 | 7,523 | 355 | 1,321 | 7,878 | 9,199 | (760 | ) | 2011 | ||||||||||||||||||||||||||||
Mahwah Corporate Center | 4 | 12,695 | 27,342 | 81 | 12,695 | 27,423 | 40,118 | (2,738 | ) | 2011 | ||||||||||||||||||||||||||||
Meadow Lane | 1 | 1,036 | 6,388 | - | 1,036 | 6,388 | 7,424 | (704 | ) | 2011 | ||||||||||||||||||||||||||||
Meadowland Distribution Center | 4 | (d | ) | 10,271 | 57,480 | 4,113 | 10,271 | 61,593 | 71,864 | (17,143 | ) | 2005 | ||||||||||||||||||||||||||
Meadowland Industrial Center | 7 | (d | ) | 4,190 | 13,469 | 17,202 | 4,190 | 30,671 | 34,861 | (18,850 | ) | 1996, 1998 | ||||||||||||||||||||||||||
Meadowlands ALFII | 3 | 3,972 | 18,895 | 1,584 | 3,972 | 20,479 | 24,451 | (1,863 | ) | 2011 | ||||||||||||||||||||||||||||
Meadowlands Cross Dock | 1 | 1,607 | 5,049 | 659 | 1,607 | 5,708 | 7,315 | (591 | ) | 2011 | ||||||||||||||||||||||||||||
Meadowlands Park | 8 | 6,898 | 41,471 | 1,300 | 6,898 | 42,771 | 49,669 | (4,624 | ) | 2011 | ||||||||||||||||||||||||||||
Mooncreek Distribution Center | 1 | 3,319 | 13,422 | 15 | 3,319 | 13,437 | 16,756 | (1,606 | ) | 2011 | ||||||||||||||||||||||||||||
Murray Hill Parkway | 2 | 2,907 | 12,040 | 84 | 2,907 | 12,124 | 15,031 | (1,209 | ) | 2011 | ||||||||||||||||||||||||||||
Newark Airport I and II | 2 | 2,757 | 8,749 | 84 | 2,757 | 8,833 | 11,590 | (831 | ) | 2011 | ||||||||||||||||||||||||||||
Orchard Hill | 1 | 678 | 3,756 | - | 678 | 3,756 | 4,434 | (444 | ) | 2011 | ||||||||||||||||||||||||||||
Pennsauken Distribution Center | 2 | 192 | 959 | 509 | 203 | 1,457 | 1,660 | (764 | ) | 1999 | ||||||||||||||||||||||||||||
Porete Avenue Warehouse | 1 | 5,386 | 21,869 | 393 | 5,386 | 22,262 | 27,648 | (1,878 | ) | 2011 | ||||||||||||||||||||||||||||
Port Reading Business Park | 1 | (d | ) | 3,370 | - | 24,669 | 3,370 | 24,669 | 28,039 | (6,871 | ) | 2005 | ||||||||||||||||||||||||||
Portview Commerce Center | 3 | (d | ) | 9,577 | 21,581 | 19,080 | 9,577 | 40,661 | 50,238 | (2,208 | ) | 2011, 2012 | ||||||||||||||||||||||||||
Rancocas Dist Ctr | 1 | 4,103 | 17,291 | 99 | 4,103 | 17,390 | 21,493 | (1,195 | ) | 2012 | ||||||||||||||||||||||||||||
Secaucus Dist Ctr | 2 | (d | ) | 9,603 | - | 26,882 | 9,603 | 26,882 | 36,485 | (591 | ) | 2012 | ||||||||||||||||||||||||||
Skyland Crossdock | 1 | - | 9,831 | 1,219 | - | 11,050 | 11,050 | (1,144 | ) | 2011 | ||||||||||||||||||||||||||||
South Jersey Distribution Center | 1 | 6,912 | 17,437 | - | 6,912 | 17,437 | 24,349 | (251 | ) | 2013 | ||||||||||||||||||||||||||||
Teterboro Meadowlands 15 | 1 | 5,837 | 23,214 | - | 5,837 | 23,214 | 29,051 | (2,219 | ) | 2011 | ||||||||||||||||||||||||||||
Two South Middlesex | 1 | 4,389 | 8,410 | 26 | 4,389 | 8,436 | 12,825 | (1,056 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
New Jersey/New York City | 82 | 204,186 | 728,959 | 118,828 | 204,197 | 847,776 | 1,051,973 | (157,158 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
On Tarmac | ||||||||||||||||||||||||||||||||||||||
BWI Cargo Center E | 1 | - | 10,725 | 108 | - | 10,833 | 10,833 | (3,308 | ) | 2011 | ||||||||||||||||||||||||||||
DAY Cargo Center | 5 | - | 4,749 | 531 | - | 5,280 | 5,280 | (1,031 | ) | 2011 | ||||||||||||||||||||||||||||
DFW Cargo Center 1 | 1 | - | 35,117 | 754 | - | 35,871 | 35,871 | (3,625 | ) | 2011 | ||||||||||||||||||||||||||||
DFW Cargo Center 2 | 1 | - | 27,916 | 173 | - | 28,089 | 28,089 | (2,762 | ) | 2011 | ||||||||||||||||||||||||||||
DFW Cargo Center East | 3 | - | 19,730 | 183 | - | 19,913 | 19,913 | (3,202 | ) | 2011 | ||||||||||||||||||||||||||||
IAD Cargo Center 5 | 1 | - | 43,060 | 64 | - | 43,124 | 43,124 | (18,206 | ) | 2011 | ||||||||||||||||||||||||||||
IAH Cargo Center 1 | 1 | - | 13,267 | 252 | - | 13,519 | 13,519 | (461 | ) | 2012 | ||||||||||||||||||||||||||||
JAX Cargo Center | 1 | - | 2,892 | 115 | - | 3,007 | 3,007 | (643 | ) | 2011 | ||||||||||||||||||||||||||||
JFK Cargo Center 75_77 | 2 | - | 35,916 | 2,399 | - | 38,315 | 38,315 | (12,914 | ) | 2011 | ||||||||||||||||||||||||||||
LAX Cargo Center | 3 | - | 19,217 | 62 | - | 19,279 | 19,279 | (3,448 | ) | 2011 | ||||||||||||||||||||||||||||
MCI Cargo Center 1 | 1 | - | 2,781 | 11 | - | 2,792 | 2,792 | (935 | ) | 2011 | ||||||||||||||||||||||||||||
MCI Cargo Center 2 | 1 | (d | ) | - | 11,630 | - | - | 11,630 | 11,630 | (1,843 | ) | 2011 | ||||||||||||||||||||||||||
PDX Cargo Center Airtrans | 2 | - | 13,697 | 131 | - | 13,828 | 13,828 | (1,958 | ) | 2011 | ||||||||||||||||||||||||||||
PHL Cargo Center C2 | 1 | - | 11,966 | 26 | - | 11,992 | 11,992 | (3,119 | ) | 2011 | ||||||||||||||||||||||||||||
RNO Cargo Center 10_11 | 2 | - | 4,265 | 60 | - | 4,325 | 4,325 | (757 | ) | 2011 | ||||||||||||||||||||||||||||
SEA Cargo Center North | 1 | - | 10,279 | 25 | - | 10,304 | 10,304 | (4,088 | ) | 2011 | ||||||||||||||||||||||||||||
SEA Cargo Center South | 1 | - | 2,745 | 10 | - | 2,755 | 2,755 | (2,055 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
On Tarmac | 28 | - | 269,952 | 4,904 | - | 274,856 | 274,856 | (64,355 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Orlando, Florida | ||||||||||||||||||||||||||||||||||||||
Beltway Commerce Center | 3 | 17,082 | 25,526 | 5,428 | 17,082 | 30,954 | 48,036 | (3,476 | ) | 2008 | ||||||||||||||||||||||||||||
Chancellor Distribution Center | 1 | 380 | 2,157 | 2,264 | 380 | 4,421 | 4,801 | (2,704 | ) | 1994 | ||||||||||||||||||||||||||||
Chancellor Square | 3 | 2,087 | 9,708 | 1,668 | 2,087 | 11,376 | 13,463 | (1,034 | ) | 2011 | ||||||||||||||||||||||||||||
Consulate Distribution Center | 3 | 4,148 | 23,617 | 2,021 | 4,148 | 25,638 | 29,786 | (12,668 | ) | 1999 | ||||||||||||||||||||||||||||
Davenport Dist Ctr | 1 | 934 | 3,991 | 91 | 934 | 4,082 | 5,016 | (282 | ) | 2012 | ||||||||||||||||||||||||||||
Jacksonville Dist Ctr | 1 | 1,786 | 8,041 | 192 | 1,786 | 8,233 | 10,019 | (843 | ) | 2012 | ||||||||||||||||||||||||||||
Orlando Central Park | 1 | 1,398 | 5,977 | 39 | 1,398 | 6,016 | 7,414 | (495 | ) | 2012 | ||||||||||||||||||||||||||||
Presidents Drive | 6 | 6,845 | 31,180 | 1,891 | 6,845 | 33,071 | 39,916 | (3,542 | ) | 2011 | ||||||||||||||||||||||||||||
Sand Lake Service Center | 6 | 3,704 | 19,546 | 2,748 | 3,704 | 22,294 | 25,998 | (2,297 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Orlando, Florida | 25 | 38,364 | 129,743 | 16,342 | 38,364 | 146,085 | 184,449 | (27,341 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Phoenix, Arizona | ||||||||||||||||||||||||||||||||||||||
24th Street Industrial Center | 2 | 503 | 2,852 | 1,774 | 561 | 4,568 | 5,129 | (3,295 | ) | 1994 | ||||||||||||||||||||||||||||
Alameda Distribution Center | 2 | 3,872 | 14,358 | 2,375 | 3,872 | 16,733 | 20,605 | (4,911 | ) | 2005 | ||||||||||||||||||||||||||||
Hohokam 10 Business Center | 1 | 1,317 | 7,468 | 1,307 | 1,318 | 8,774 | 10,092 | (4,200 | ) | 1999 | ||||||||||||||||||||||||||||
Kyrene Commons Distribution Center | 3 | 1,093 | 5,475 | 2,429 | 1,093 | 7,904 | 8,997 | (4,590 | ) | 1992, 1998, 1999 | ||||||||||||||||||||||||||||
Papago Distribution Center | 3 | 4,828 | 20,017 | 4,634 | 4,829 | 24,650 | 29,479 | (8,426 | ) | 1994, 2005 | ||||||||||||||||||||||||||||
Phoenix Distribution Center | 1 | 1,441 | 5,578 | 205 | 1,441 | 5,783 | 7,224 | (298 | ) | 2012 | ||||||||||||||||||||||||||||
Riverside Dist Ctr (PHX) | 1 | 1,783 | 7,130 | 911 | 1,783 | 8,041 | 9,824 | (578 | ) | 2011 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
West One Business Center |
| 4 |
|
|
|
| 2,468 |
|
|
| 13,985 |
|
|
| 5,614 |
|
|
| 2,468 |
|
|
| 19,599 |
|
|
| 22,067 |
|
|
| (13,436 | ) |
| 1996 |
Las Vegas, Nevada |
| 46 |
|
|
|
| 96,340 |
|
|
| 301,347 |
|
|
| 32,077 |
|
|
| 87,007 |
|
|
| 342,757 |
|
|
| 429,764 |
|
|
| (37,845 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Louisville, Kentucky |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cedar Grove Distribution Center |
| 5 |
|
|
|
| 20,697 |
|
|
| 105,257 |
|
|
| 4,238 |
|
|
| 20,696 |
|
|
| 109,496 |
|
|
| 130,192 |
|
|
| (17,257 | ) |
| 2005, 2008, 2012, 2015 |
Commerce Crossings Distribution Center |
| 1 |
|
|
|
| 1,912 |
|
|
| 7,649 |
|
|
| 284 |
|
|
| 1,912 |
|
|
| 7,933 |
|
|
| 9,845 |
|
|
| (3,018 | ) |
| 2005 |
I-65 Meyer Distribution Center |
| 3 |
|
|
|
| 9,557 |
|
|
| 32,334 |
|
|
| 25,882 |
|
|
| 9,864 |
|
|
| 57,909 |
|
|
| 67,773 |
|
|
| (11,615 | ) |
| 2006, 2012, 2015 |
New Cut Road Distribution Center |
| 1 |
|
|
|
| 2,711 |
|
|
| 11,694 |
|
|
| 803 |
|
|
| 2,711 |
|
|
| 12,497 |
|
|
| 15,208 |
|
|
| (2,436 | ) |
| 2012 |
River Ridge Distribution Center |
| 1 |
|
|
|
| 8,102 |
|
|
| 69,329 |
|
|
| 303 |
|
|
| 8,102 |
|
|
| 69,632 |
|
|
| 77,734 |
|
|
| (3,044 | ) |
| 2015 |
Louisville, Kentucky |
| 11 |
|
|
|
| 42,979 |
|
|
| 226,263 |
|
|
| 31,510 |
|
|
| 43,285 |
|
|
| 257,467 |
|
|
| 300,752 |
|
|
| (37,370 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memphis, Tennessee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delp Distribution Center |
| 3 |
|
|
|
| 1,068 |
|
|
| 10,546 |
|
|
| 1,036 |
|
|
| 1,068 |
|
|
| 11,582 |
|
|
| 12,650 |
|
|
| (8,384 | ) |
| 1995 |
DeSoto Distribution Center |
| 3 |
| (d) |
|
| 7,225 |
|
|
| 4,136 |
|
|
| 35,967 |
|
|
| 6,778 |
|
|
| 40,550 |
|
|
| 47,328 |
|
|
| (9,042 | ) |
| 2007, 2014 |
Memphis Industrial Park |
| 2 |
|
|
|
| 3,252 |
|
|
| 14,448 |
|
|
| 1,693 |
|
|
| 3,252 |
|
|
| 16,141 |
|
|
| 19,393 |
|
|
| (3,114 | ) |
| 2012 |
Olive Branch Distribution Center |
| 1 |
|
|
|
| 6,719 |
|
|
| 31,134 |
|
|
| 443 |
|
|
| 6,719 |
|
|
| 31,577 |
|
|
| 38,296 |
|
|
| (6,611 | ) |
| 2012 |
Willow Lake Distribution Center |
| 1 |
|
|
|
| 613 |
|
|
| 3,474 |
|
|
| 109 |
|
|
| 613 |
|
|
| 3,583 |
|
|
| 4,196 |
|
|
| (2,313 | ) |
| 1999 |
Memphis, Tennessee |
| 10 |
|
|
|
| 18,877 |
|
|
| 63,738 |
|
|
| 39,248 |
|
|
| 18,430 |
|
|
| 103,433 |
|
|
| 121,863 |
|
|
| (29,464 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nashville, Tennessee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CentrePointe Distribution Center |
| 4 |
| (d) |
|
| 7,507 |
|
|
| 15,042 |
|
|
| 16,220 |
|
|
| 9,067 |
|
|
| 29,702 |
|
|
| 38,769 |
|
|
| (1,801 | ) |
| 2013, 2016 |
Elam Farms Park |
| 1 |
|
|
|
| 2,097 |
|
|
| 8,386 |
|
|
| 1,928 |
|
|
| 2,097 |
|
|
| 10,314 |
|
|
| 12,411 |
|
|
| (1,758 | ) |
| 2013 |
I-40 Industrial Center |
| 4 |
|
|
|
| 3,075 |
|
|
| 15,333 |
|
|
| 5,611 |
|
|
| 3,075 |
|
|
| 20,944 |
|
|
| 24,019 |
|
|
| (9,101 | ) |
| 1995, 1996, 1999, 2012 |
Interchange City Distribution Center |
| 11 |
| (d) |
|
| 11,460 |
|
|
| 49,472 |
|
|
| 6,184 |
|
|
| 11,460 |
|
|
| 55,656 |
|
|
| 67,116 |
|
|
| (8,538 | ) |
| 1999, 2012, 2014 |
Nashville North Distribution Center |
| 4 |
| (d) |
|
| 6,194 |
|
|
| 44,587 |
|
|
| 839 |
|
|
| 6,194 |
|
|
| 45,426 |
|
|
| 51,620 |
|
|
| (2,479 | ) |
| 2015 |
Southpark Distribution Center |
| 4 |
| (d) |
|
| 11,834 |
|
|
| 47,335 |
|
|
| 1,583 |
|
|
| 11,834 |
|
|
| 48,918 |
|
|
| 60,752 |
|
|
| (5,019 | ) |
| 2013 |
Nashville, Tennessee |
| 28 |
|
|
|
| 42,167 |
|
|
| 180,155 |
|
|
| 32,365 |
|
|
| 43,727 |
|
|
| 210,960 |
|
|
| 254,687 |
|
|
| (28,696 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey/New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brunswick Distribution Center |
| 2 |
|
|
|
| 870 |
|
|
| 4,928 |
|
|
| 3,665 |
|
|
| 870 |
|
|
| 8,593 |
|
|
| 9,463 |
|
|
| (5,681 | ) |
| 1997 |
Carteret Distribution Center |
| 3 |
|
|
|
| 39,148 |
|
|
| 109,124 |
|
|
| 892 |
|
|
| 39,148 |
|
|
| 110,016 |
|
|
| 149,164 |
|
|
| (6,225 | ) |
| 2015 |
CenterPoint Distribution Center |
| 1 |
|
|
|
| 2,839 |
|
|
| 12,490 |
|
|
| 1,851 |
|
|
| 2,839 |
|
|
| 14,341 |
|
|
| 17,180 |
|
|
| (3,314 | ) |
| 2012 |
Clifton Distribution Center |
| 1 |
|
|
|
| 8,064 |
|
|
| 12,096 |
|
|
| 2,555 |
|
|
| 8,064 |
|
|
| 14,651 |
|
|
| 22,715 |
|
|
| (3,165 | ) |
| 2010 |
Cranbury Business Park |
| 8 |
| (d) |
|
| 43,056 |
|
|
| 91,129 |
|
|
| 4,561 |
|
|
| 43,056 |
|
|
| 95,690 |
|
|
| 138,746 |
|
|
| (13,029 | ) |
| 2012, 2014 |
Dellamor |
| 7 |
|
|
|
| 6,710 |
|
|
| 35,478 |
|
|
| 2,669 |
|
|
| 6,710 |
|
|
| 38,147 |
|
|
| 44,857 |
|
|
| (9,617 | ) |
| 2011 |
Docks Corner SG (Phase II) |
| 1 |
|
|
|
| 16,232 |
|
|
| 19,264 |
|
|
| 7,270 |
|
|
| 16,232 |
|
|
| 26,534 |
|
|
| 42,766 |
|
|
| (9,747 | ) |
| 2011 |
Edison Distribution Center |
| 1 |
|
|
|
| 30,610 |
|
|
| 52,190 |
|
|
| 11,042 |
|
|
| 30,610 |
|
|
| 63,232 |
|
|
| 93,842 |
|
|
| (1,789 | ) |
| 2015 |
Elizabeth Seaport II |
| 1 |
|
|
|
| 37,325 |
|
|
| - |
|
|
| 38,131 |
|
|
| 40,896 |
|
|
| 34,560 |
|
|
| 75,456 |
|
|
| (49 | ) |
| 2016 |
Exit 10 Distribution Center |
| 7 |
| (d) |
|
| 35,289 |
|
|
| 147,492 |
|
|
| 12,715 |
|
|
| 35,289 |
|
|
| 160,207 |
|
|
| 195,496 |
|
|
| (53,850 | ) |
| 2005, 2015 |
Exit 7 Distribution Center |
| 2 |
| (d) |
|
| 35,728 |
|
|
| 117,157 |
|
|
| 753 |
|
|
| 35,728 |
|
|
| 117,910 |
|
|
| 153,638 |
|
|
| (5,139 | ) |
| 2015 |
Exit 8A Distribution Center |
| 2 |
| (d) |
|
| 21,164 |
|
|
| 85,257 |
|
|
| 4,876 |
|
|
| 21,164 |
|
|
| 90,133 |
|
|
| 111,297 |
|
|
| (20,304 | ) |
| 2005, 2014 |
Franklin Commerce Center |
| 1 |
|
|
|
| 9,304 |
|
|
| 23,768 |
|
|
| 502 |
|
|
| 9,304 |
|
|
| 24,270 |
|
|
| 33,574 |
|
|
| (4,090 | ) |
| 2011 |
Gourmet Lane Distribution Center |
| 1 |
|
|
|
| 13,099 |
|
|
| 23,539 |
|
|
| 1,167 |
|
|
| 13,099 |
|
|
| 24,706 |
|
|
| 37,805 |
|
|
| (856 | ) |
| 2015 |
Highway 17 55 Madis |
| 1 |
|
|
|
| 2,937 |
|
|
| 13,477 |
|
|
| 1,115 |
|
|
| 2,937 |
|
|
| 14,592 |
|
|
| 17,529 |
|
|
| (3,582 | ) |
| 2011 |
Interstate Distribution Center |
| 3 |
| (d) |
|
| 30,188 |
|
|
| 76,705 |
|
|
| 902 |
|
|
| 30,188 |
|
|
| 77,607 |
|
|
| 107,795 |
|
|
| (3,682 | ) |
| 2015 |
JFK Cargo Center 75_77 |
| 2 |
|
|
|
| - |
|
|
| 35,916 |
|
|
| 5,489 |
|
|
| - |
|
|
| 41,405 |
|
|
| 41,405 |
|
|
| (19,902 | ) |
| 2011 |
Kilmer Distribution Center |
| 4 |
| (d) |
|
| 2,526 |
|
|
| 14,313 |
|
|
| 5,007 |
|
|
| 2,526 |
|
|
| 19,320 |
|
|
| 21,846 |
|
|
| (12,851 | ) |
| 1996 |
Liberty Log Center |
| 1 |
|
|
|
| 3,273 |
|
|
| 24,029 |
|
|
| 372 |
|
|
| 3,273 |
|
|
| 24,401 |
|
|
| 27,674 |
|
|
| (3,771 | ) |
| 2011 |
Linden Industrial Center |
| 1 |
| (d) |
|
| 17,332 |
|
|
| 24,264 |
|
|
| 1,397 |
|
|
| 17,332 |
|
|
| 25,661 |
|
|
| 42,993 |
|
|
| (920 | ) |
| 2015 |
Lister Distribution Center |
| 1 |
|
|
|
| 16,855 |
|
|
| 21,802 |
|
|
| 1,422 |
|
|
| 16,855 |
|
|
| 23,224 |
|
|
| 40,079 |
|
|
| (768 | ) |
| 2015 |
Maspeth Distribution Center |
| 1 |
| (d) |
|
| 23,784 |
|
|
| 10,849 |
|
|
| 278 |
|
|
| 23,784 |
|
|
| 11,127 |
|
|
| 34,911 |
|
|
| (364 | ) |
| 2015 |
Meadow Lane |
| 1 |
|
|
|
| 1,036 |
|
|
| 6,388 |
|
|
| 27 |
|
|
| 1,036 |
|
|
| 6,415 |
|
|
| 7,451 |
|
|
| (1,518 | ) |
| 2011 |
Meadowland Distribution Center |
| 6 |
| (d) |
|
| 26,379 |
|
|
| 83,224 |
|
|
| 7,428 |
|
|
| 26,379 |
|
|
| 90,652 |
|
|
| 117,031 |
|
|
| (25,559 | ) |
| 2005, 2015 |
Meadowland Industrial Center |
| 7 |
| (d) |
|
| 4,190 |
|
|
| 13,469 |
|
|
| 20,655 |
|
|
| 4,190 |
|
|
| 34,124 |
|
|
| 38,314 |
|
|
| (22,140 | ) |
| 1996, 1998 |
Meadowlands ALFII |
| 3 |
|
|
|
| 3,972 |
|
|
| 18,895 |
|
|
| 3,427 |
|
|
| 3,972 |
|
|
| 22,322 |
|
|
| 26,294 |
|
|
| (4,846 | ) |
| 2011 |
Meadowlands Park |
| 8 |
|
|
|
| 6,898 |
|
|
| 41,471 |
|
|
| 1,998 |
|
|
| 6,898 |
|
|
| 43,469 |
|
|
| 50,367 |
|
|
| (10,405 | ) |
| 2011 |
Mooncreek Distribution Center |
| 1 |
|
|
|
| 3,319 |
|
|
| 13,422 |
|
|
| 15 |
|
|
| 3,319 |
|
|
| 13,437 |
|
|
| 16,756 |
|
|
| (3,429 | ) |
| 2011 |
Murray Hill Parkway |
| 2 |
|
|
|
| 2,907 |
|
|
| 12,040 |
|
|
| 525 |
|
|
| 2,907 |
|
|
| 12,565 |
|
|
| 15,472 |
|
|
| (2,655 | ) |
| 2011 |
Newark Airport I and II |
| 2 |
|
|
|
| 19,045 |
|
|
| 21,936 |
|
|
| 901 |
|
|
| 19,045 |
|
|
| 22,837 |
|
|
| 41,882 |
|
|
| (1,882 | ) |
| 2011, 2015 |
Orchard Hill |
| 1 |
|
|
|
| 678 |
|
|
| 3,756 |
|
|
| 20 |
|
|
| 678 |
|
|
| 3,776 |
|
|
| 4,454 |
|
|
| (955 | ) |
| 2011 |
Pennsauken Distribution Center |
| 2 |
|
|
|
| 192 |
|
|
| 959 |
|
|
| 655 |
|
|
| 203 |
|
|
| 1,603 |
|
|
| 1,806 |
|
|
| (958 | ) |
| 1999 |
Perth Amboy Corporate Park |
| 2 |
| (d) |
|
| 54,701 |
|
|
| 66,534 |
|
|
| 4,365 |
|
|
| 54,701 |
|
|
| 70,899 |
|
|
| 125,600 |
|
|
| (2,554 | ) |
| 2015 |
Port Reading Business Park |
| 10 |
| (d) |
|
| 211,931 |
|
|
| 256,740 |
|
|
| 119,387 |
|
|
| 201,814 |
|
|
| 386,244 |
|
|
| 588,058 |
|
|
| (27,772 | ) |
| 2005, 2014, 2015 |
Ports Jersey City Distribution Center |
| 1 |
|
|
|
| 34,133 |
|
|
| - |
|
|
| 61,057 |
|
|
| 34,504 |
|
|
| 60,686 |
|
|
| 95,190 |
|
|
| (4,454 | ) |
| 2014 |
Portview Commerce Center |
| 3 |
| (d) |
|
| 9,577 |
|
|
| 21,581 |
|
|
| 19,134 |
|
|
| 9,798 |
|
|
| 40,494 |
|
|
| 50,292 |
|
|
| (5,710 | ) |
| 2011, 2012 |
Secaucus Distribution Center |
| 2 |
| (d) |
|
| 9,603 |
|
|
| - |
|
|
| 26,905 |
|
|
| 9,603 |
|
|
| 26,905 |
|
|
| 36,508 |
|
|
| (3,142 | ) |
| 2012 |
Skyland Crossdock |
| 1 |
|
|
|
| - |
|
|
| 9,831 |
|
|
| 1,308 |
|
|
| - |
|
|
| 11,139 |
|
|
| 11,139 |
|
|
| (3,018 | ) |
| 2011 |
South Jersey Distribution Center |
| 1 |
|
|
|
| 6,912 |
|
|
| 17,437 |
|
|
| 216 |
|
|
| 6,912 |
|
|
| 17,653 |
|
|
| 24,565 |
|
|
| (2,317 | ) |
| 2013 |
Teterboro Meadowlands 15 |
| 2 |
|
|
|
| 18,169 |
|
|
| 34,604 |
|
|
| 226 |
|
|
| 18,169 |
|
|
| 34,830 |
|
|
| 52,999 |
|
|
| (5,752 | ) |
| 2011, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
University Dr Distribution Center | 1 | 683 | 2,735 | 234 | 683 | 2,969 | 3,652 | (880 | ) | 2005 | ||||||||||||||||||||||||||||
Watkins Street Distribution Center | 1 | 242 | 1,375 | 530 | 243 | 1,904 | 2,147 | (1,262 | ) | 1995 | ||||||||||||||||||||||||||||
Wilson Drive Distribution Center | 1 | 1,273 | 5,093 | 902 | 1,273 | 5,995 | 7,268 | (1,677 | ) | 2005 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Phoenix, Arizona | 16 | 17,035 | 72,081 | 15,301 | 17,096 | 87,321 | 104,417 | (30,117 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Portland, Oregon | ||||||||||||||||||||||||||||||||||||||
Clackamas Dist Ctr | 1 | 1,540 | 6,420 | 37 | 1,540 | 6,457 | 7,997 | (436 | ) | 2012 | ||||||||||||||||||||||||||||
PDX Corporate Center North Phase II | 1 | (d | )(e) | 5,051 | 9,895 | 1,761 | 5,051 | 11,656 | 16,707 | (1,753 | ) | 2008 | ||||||||||||||||||||||||||
Southshore Corporate Center | 1 | (d | )(e) | 3,521 | 13,915 | (279 | ) | 3,578 | 13,579 | 17,157 | (3,376 | ) | 2006 | |||||||||||||||||||||||||
Wilsonville Corporate Center | 3 | 1,570 | - | 8,034 | 1,588 | 8,016 | 9,604 | (4,617 | ) | 1995 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Portland, Oregon | 6 | 11,682 | 30,230 | 9,553 | 11,757 | 39,708 | 51,465 | (10,182 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Reno, Nevada | ||||||||||||||||||||||||||||||||||||||
Damonte Ranch Dist Ctr | 2 | (d | ) | 7,056 | 29,742 | 514 | 7,056 | 30,256 | 37,312 | (2,077 | ) | 2012 | ||||||||||||||||||||||||||
Golden Valley Distribution Center | 1 | 940 | 13,686 | 2,167 | 2,415 | 14,378 | 16,793 | (4,051 | ) | 2005 | ||||||||||||||||||||||||||||
Meredith Kleppe Business Center | 1 | 526 | 753 | 3,646 | 526 | 4,399 | 4,925 | (2,969 | ) | 1993 | ||||||||||||||||||||||||||||
Packer Way Distribution Center | 2 | 506 | 2,879 | 1,710 | 506 | 4,589 | 5,095 | (3,321 | ) | 1993 | ||||||||||||||||||||||||||||
Tahoe-Reno Industrial Center | 1 | 3,281 | - | 23,732 | 3,281 | 23,732 | 27,013 | (4,120 | ) | 2007 | ||||||||||||||||||||||||||||
Vista Industrial Park | 6 | (d | ) | 5,923 | 26,807 | 9,953 | 5,923 | 36,760 | 42,683 | (16,181 | ) | 1994, 2001 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Reno, Nevada | 13 | 18,232 | 73,867 | 41,722 | 19,707 | 114,114 | 133,821 | (32,719 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Salt Lake City, Utah | ||||||||||||||||||||||||||||||||||||||
Crossroads Corp Ctr | 1 | 1,549 | 6,549 | 70 | 1,549 | 6,619 | 8,168 | (464 | ) | 2012 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Salt Lake City, Utah | 1 | 1,549 | 6,549 | 70 | 1,549 | 6,619 | 8,168 | (464 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
San Antonio, Texas | ||||||||||||||||||||||||||||||||||||||
Director Drive Dist Ctr | 2 | 1,271 | 5,455 | 141 | 1,271 | 5,596 | 6,867 | (465 | ) | 2012 | ||||||||||||||||||||||||||||
Eisenhauer Distribution Center | 3 | (d | ) | 3,693 | 15,848 | 351 | 3,693 | 16,199 | 19,892 | (1,150 | ) | 2012 | ||||||||||||||||||||||||||
Interchange East Dist Ctr | 1 | 1,496 | 6,535 | 221 | 1,496 | 6,756 | 8,252 | (711 | ) | 2012 | ||||||||||||||||||||||||||||
Macro Distribution Center | 3 | 1,705 | 9,024 | 3,034 | 1,705 | 12,058 | 13,763 | (4,126 | ) | 2002 | ||||||||||||||||||||||||||||
Perrin Creek Corporate Center | 2 | (d | ) | 5,454 | 22,689 | 86 | 5,454 | 22,775 | 28,229 | (1,530 | ) | 2012 | ||||||||||||||||||||||||||
Rittiman East Industrial Park | 2 | 4,848 | 19,223 | 2,722 | 4,848 | 21,945 | 26,793 | (5,240 | ) | 2006 | ||||||||||||||||||||||||||||
Rittiman West Industrial Park | 2 | 1,230 | 4,950 | 1,049 | 1,230 | 5,999 | 7,229 | (1,640 | ) | 2006 | ||||||||||||||||||||||||||||
San Antonio Distribution Center I | 6 | 1,203 | 4,648 | 7,194 | 1,203 | 11,842 | 13,045 | (8,365 | ) | 1993 | ||||||||||||||||||||||||||||
San Antonio Distribution Center II | 3 | 885 | - | 7,508 | 885 | 7,508 | 8,393 | (4,048 | ) | 1994 | ||||||||||||||||||||||||||||
San Antonio Distribution Center III | 2 | 1,408 | 7,531 | 187 | 1,412 | 7,714 | 9,126 | (2,554 | ) | 1996, 2012 | ||||||||||||||||||||||||||||
Tri-County Distribution Center | 2 | (d | ) | 3,183 | 12,743 | 627 | 3,184 | 13,369 | 16,553 | (2,845 | ) | 2007 | ||||||||||||||||||||||||||
Valley Industrial Center | 1 | 363 | - | 4,844 | 363 | 4,844 | 5,207 | (2,581 | ) | 1997 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
San Antonio, Texas | 29 | 26,739 | 108,646 | 27,964 | 26,744 | 136,605 | 163,349 | (35,255 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
San Francisco Bay Area, California | ||||||||||||||||||||||||||||||||||||||
Acer Distribution Center | 1 | (d | ) | 3,368 | 15,139 | 209 | 3,368 | 15,348 | 18,716 | (1,740 | ) | 2011 | ||||||||||||||||||||||||||
Alvarado Business Center | 10 | (d | ) | 20,739 | 62,595 | 5,634 | 20,739 | 68,229 | 88,968 | (19,250 | ) | 2005 | ||||||||||||||||||||||||||
Arques Business Pk | 2 | 4,895 | 12,848 | 1,661 | 4,895 | 14,509 | 19,404 | (1,345 | ) | 2011 | ||||||||||||||||||||||||||||
Bayshore Distribution Center | 1 | 6,450 | 15,049 | 2,447 | 6,450 | 17,496 | 23,946 | (1,825 | ) | 2011 | ||||||||||||||||||||||||||||
Bayside Corporate Center | 7 | 4,365 | - | 20,532 | 4,365 | 20,532 | 24,897 | (12,414 | ) | 1995, 1996 | ||||||||||||||||||||||||||||
Bayside Plaza I | 12 | 5,212 | 18,008 | 7,593 | 5,216 | 25,597 | 30,813 | (16,486 | ) | 1993 | ||||||||||||||||||||||||||||
Bayside Plaza II | 2 | 634 | - | 3,459 | 634 | 3,459 | 4,093 | (2,327 | ) | 1994 | ||||||||||||||||||||||||||||
Brennan Distribution | 1 | 1,912 | 7,553 | 58 | 1,912 | 7,611 | 9,523 | (859 | ) | 2011 | ||||||||||||||||||||||||||||
Component Drive Ind Port | 3 | 2,829 | 13,532 | 533 | 2,829 | 14,065 | 16,894 | (1,547 | ) | 2011 | ||||||||||||||||||||||||||||
Cypress | 1 | 1,065 | 5,103 | 46 | 1,065 | 5,149 | 6,214 | (563 | ) | 2011 | ||||||||||||||||||||||||||||
Dado Distribution | 1 | 2,194 | 11,079 | 257 | 2,194 | 11,336 | 13,530 | (1,333 | ) | 2011 | ||||||||||||||||||||||||||||
Doolittle Distribution Center | 1 | 2,843 | 18,849 | 712 | 2,843 | 19,561 | 22,404 | (1,830 | ) | 2011 | ||||||||||||||||||||||||||||
Dowe Industrial Center | 2 | (d | ) | 5,884 | 20,400 | 727 | 5,884 | 21,127 | 27,011 | (2,377 | ) | 2011 | ||||||||||||||||||||||||||
Dublin Ind Portfolio | 1 | 3,241 | 15,951 | 993 | 3,241 | 16,944 | 20,185 | (1,570 | ) | 2011 | ||||||||||||||||||||||||||||
East Bay Doolittle | 1 | 4,015 | 15,988 | 1,113 | 4,015 | 17,101 | 21,116 | (1,956 | ) | 2011 | ||||||||||||||||||||||||||||
East Grand Airfreight | 2 | 3,977 | 11,730 | 144 | 3,977 | 11,874 | 15,851 | (1,086 | ) | 2011 | ||||||||||||||||||||||||||||
Edgewater Industrial Center | 1 | 6,630 | 31,153 | 1,745 | 6,630 | 32,898 | 39,528 | (3,612 | ) | 2011 | ||||||||||||||||||||||||||||
Eigenbrodt Way Distribution Center | 1 | 393 | 2,228 | 628 | 393 | 2,856 | 3,249 | (1,930 | ) | 1993 | ||||||||||||||||||||||||||||
Gateway Corporate Center | 10 | 6,736 | 24,747 | 9,783 | 6,744 | 34,522 | 41,266 | (22,190 | ) | 1993 | ||||||||||||||||||||||||||||
Hayward Commerce Center | 4 | 1,933 | 10,955 | 3,625 | 1,933 | 14,580 | 16,513 | (9,568 | ) | 1993 | ||||||||||||||||||||||||||||
Hayward Distribution Center | 2 | 831 | 5,510 | 3,117 | 1,038 | 8,420 | 9,458 | (6,090 | ) | 1993 | ||||||||||||||||||||||||||||
Hayward Ind—Hathaway | 2 | 6,177 | 8,271 | 29 | 6,177 | 8,300 | 14,477 | (2,336 | ) | 2011 | ||||||||||||||||||||||||||||
Hayward Industrial Center | 13 | 4,481 | 25,393 | 8,499 | 4,481 | 33,892 | 38,373 | (22,621 | ) | 1993 | ||||||||||||||||||||||||||||
Junction Industrial Park | 4 | 7,658 | 39,106 | 1,098 | 7,658 | 40,204 | 47,862 | (3,714 | ) | 2011 | ||||||||||||||||||||||||||||
Lakeside BC | 2 | 7,280 | 21,116 | 1,039 | 7,280 | 22,155 | 29,435 | (1,706 | ) | 2011 | ||||||||||||||||||||||||||||
Laurelwood Drive | 2 | 3,941 | 13,161 | 255 | 3,941 | 13,416 | 17,357 | (1,217 | ) | 2011 | ||||||||||||||||||||||||||||
Lawrence SSF | 1 | 2,189 | 7,498 | 91 | 2,189 | 7,589 | 9,778 | (809 | ) | 2011 | ||||||||||||||||||||||||||||
Livermore Distribution Center | 4 | 8,992 | 26,976 | 2,236 | 8,992 | 29,212 | 38,204 | (8,638 | ) | 2005 | ||||||||||||||||||||||||||||
Manzanita R and D | 1 | 1,420 | 3,454 | 399 | 1,420 | 3,853 | 5,273 | (335 | ) | 2011 | ||||||||||||||||||||||||||||
Martin-Scott Ind Port | 2 | 3,546 | 9,717 | 303 | 3,546 | 10,020 | 13,566 | (1,110 | ) | 2011 | ||||||||||||||||||||||||||||
Moffett Distribution | 7 | 16,889 | 30,590 | 386 | 16,889 | 30,976 | 47,865 | (3,030 | ) | 2011 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
Two South Middlesex |
| 1 |
|
|
|
| 4,389 |
|
|
| 8,410 |
|
|
| 1,030 |
|
|
| 4,389 |
|
|
| 9,440 |
|
|
| 13,829 |
|
|
| (2,408 | ) |
| 2011 |
New Jersey/New York |
| 108 |
|
|
|
| 814,364 |
|
|
| 1,585,964 |
|
|
| 377,910 |
|
|
| 808,421 |
|
|
| 1,969,817 |
|
|
| 2,778,238 |
|
|
| (314,169 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando, Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beltway Commerce Center |
| 4 |
|
|
|
| 18,835 |
|
|
| 25,526 |
|
|
| 15,316 |
|
|
| 18,840 |
|
|
| 40,837 |
|
|
| 59,677 |
|
|
| (7,093 | ) |
| 2008, 2015 |
Chancellor Distribution Center |
| 1 |
|
|
|
| 380 |
|
|
| 2,157 |
|
|
| 2,615 |
|
|
| 380 |
|
|
| 4,772 |
|
|
| 5,152 |
|
|
| (3,391 | ) |
| 1994 |
Chancellor Square |
| 3 |
|
|
|
| 2,087 |
|
|
| 9,708 |
|
|
| 2,320 |
|
|
| 687 |
|
|
| 13,428 |
|
|
| 14,115 |
|
|
| (2,928 | ) |
| 2011 |
Consulate Distribution Center |
| 5 |
| (d) |
|
| 6,105 |
|
|
| 31,550 |
|
|
| 3,419 |
|
|
| 6,105 |
|
|
| 34,969 |
|
|
| 41,074 |
|
|
| (16,254 | ) |
| 1999, 2014 |
Crowne Pointe Park |
| 1 |
|
|
|
| 3,888 |
|
|
| 7,497 |
|
|
| 1,592 |
|
|
| 3,888 |
|
|
| 9,089 |
|
|
| 12,977 |
|
|
| (434 | ) |
| 2015 |
Davenport Distribution Center |
| 1 |
|
|
|
| 934 |
|
|
| 3,991 |
|
|
| 102 |
|
|
| 934 |
|
|
| 4,093 |
|
|
| 5,027 |
|
|
| (763 | ) |
| 2012 |
Lake Mary Logistics Center |
| 1 |
|
|
|
| 1,374 |
|
|
| 5,101 |
|
|
| 185 |
|
|
| 1,374 |
|
|
| 5,286 |
|
|
| 6,660 |
|
|
| (277 | ) |
| 2015 |
Orlando Airport Park |
| 1 |
|
|
|
| 5,259 |
|
|
| - |
|
|
| 17,025 |
|
|
| 5,724 |
|
|
| 16,560 |
|
|
| 22,284 |
|
|
| (104 | ) |
| 2016 |
Orlando Central Park |
| 1 |
|
|
|
| 1,398 |
|
|
| 5,977 |
|
|
| 416 |
|
|
| 1,398 |
|
|
| 6,393 |
|
|
| 7,791 |
|
|
| (1,378 | ) |
| 2012 |
Orlando Corporate Center |
| 6 |
| (d) |
|
| 8,061 |
|
|
| 33,030 |
|
|
| 1,544 |
|
|
| 8,061 |
|
|
| 34,574 |
|
|
| 42,635 |
|
|
| (3,061 | ) |
| 2014 |
Presidents Drive |
| 6 |
|
|
|
| 6,845 |
|
|
| 31,180 |
|
|
| 4,240 |
|
|
| 6,845 |
|
|
| 35,420 |
|
|
| 42,265 |
|
|
| (8,892 | ) |
| 2011 |
Sand Lake Service Center |
| 6 |
|
|
|
| 3,704 |
|
|
| 19,546 |
|
|
| 4,035 |
|
|
| 3,704 |
|
|
| 23,581 |
|
|
| 27,285 |
|
|
| (5,793 | ) |
| 2011 |
Orlando, Florida |
| 36 |
|
|
|
| 58,870 |
|
|
| 175,263 |
|
|
| 52,809 |
|
|
| 57,940 |
|
|
| 229,002 |
|
|
| 286,942 |
|
|
| (50,368 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phoenix, Arizona |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24th Street Industrial Center |
| 2 |
|
|
|
| 503 |
|
|
| 2,852 |
|
|
| 2,042 |
|
|
| 561 |
|
|
| 4,836 |
|
|
| 5,397 |
|
|
| (3,781 | ) |
| 1994 |
Alameda Distribution Center |
| 2 |
|
|
|
| 3,872 |
|
|
| 14,358 |
|
|
| 3,184 |
|
|
| 3,872 |
|
|
| 17,542 |
|
|
| 21,414 |
|
|
| (6,945 | ) |
| 2005 |
Brookridge Distribution Center |
| 1 |
| (d) |
|
| 3,897 |
|
|
| 15,153 |
|
|
| 241 |
|
|
| 3,897 |
|
|
| 15,394 |
|
|
| 19,291 |
|
|
| (1,357 | ) |
| 2014 |
Hohokam 10 Business Center |
| 1 |
|
|
|
| 1,317 |
|
|
| 7,468 |
|
|
| 1,581 |
|
|
| 1,318 |
|
|
| 9,048 |
|
|
| 10,366 |
|
|
| (5,355 | ) |
| 1999 |
Kyrene Commons Distribution Center |
| 3 |
|
|
|
| 1,093 |
|
|
| 5,475 |
|
|
| 2,909 |
|
|
| 1,093 |
|
|
| 8,384 |
|
|
| 9,477 |
|
|
| (5,550 | ) |
| 1992, 1998, 1999 |
Papago Distribution Center |
| 3 |
|
|
|
| 4,828 |
|
|
| 20,017 |
|
|
| 5,275 |
|
|
| 4,829 |
|
|
| 25,291 |
|
|
| 30,120 |
|
|
| (11,790 | ) |
| 1994, 2005 |
Phoenix Distribution Center |
| 1 |
|
|
|
| 1,441 |
|
|
| 5,578 |
|
|
| 1,026 |
|
|
| 1,441 |
|
|
| 6,604 |
|
|
| 8,045 |
|
|
| (978 | ) |
| 2012 |
Sky Harbor Distribution Center |
| 3 |
|
|
|
| - |
|
|
| 14,023 |
|
|
| 2,714 |
|
|
| - |
|
|
| 16,737 |
|
|
| 16,737 |
|
|
| (336 | ) |
| 2016 |
University Dr Distribution Center |
| 1 |
|
|
|
| 683 |
|
|
| 2,735 |
|
|
| 825 |
|
|
| 683 |
|
|
| 3,560 |
|
|
| 4,243 |
|
|
| (1,298 | ) |
| 2005 |
Watkins Street Distribution Center |
| 1 |
|
|
|
| 242 |
|
|
| 1,375 |
|
|
| 801 |
|
|
| 243 |
|
|
| 2,175 |
|
|
| 2,418 |
|
|
| (1,496 | ) |
| 1995 |
Wilson Drive Distribution Center |
| 1 |
|
|
|
| 1,273 |
|
|
| 5,093 |
|
|
| 992 |
|
|
| 1,273 |
|
|
| 6,085 |
|
|
| 7,358 |
|
|
| (2,499 | ) |
| 2005 |
Phoenix, Arizona |
| 19 |
|
|
|
| 19,149 |
|
|
| 94,127 |
|
|
| 21,590 |
|
|
| 19,210 |
|
|
| 115,656 |
|
|
| 134,866 |
|
|
| (41,385 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portland, Oregon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clackamas Distribution Center |
| 5 |
| (d) |
|
| 8,828 |
|
|
| 28,192 |
|
|
| 590 |
|
|
| 8,828 |
|
|
| 28,782 |
|
|
| 37,610 |
|
|
| (2,907 | ) |
| 2012, 2014 |
PDX Cargo Center Airtrans |
| 2 |
|
|
|
| - |
|
|
| 13,697 |
|
|
| 246 |
|
|
| - |
|
|
| 13,943 |
|
|
| 13,943 |
|
|
| (4,284 | ) |
| 2011 |
PDX Corporate Center East |
| 4 |
| (d) |
|
| 7,126 |
|
|
| 21,303 |
|
|
| 352 |
|
|
| 7,126 |
|
|
| 21,655 |
|
|
| 28,781 |
|
|
| (1,743 | ) |
| 2014 |
PDX Corporate Center North Phase II |
| 4 |
| (d)(e) |
|
| 10,293 |
|
|
| 25,461 |
|
|
| 2,155 |
|
|
| 10,293 |
|
|
| 27,616 |
|
|
| 37,909 |
|
|
| (4,266 | ) |
| 2008, 2014 |
Portland Northwest Corporate Park |
| 10 |
|
|
|
| 13,666 |
|
|
| 40,999 |
|
|
| 1,068 |
|
|
| 13,666 |
|
|
| 42,067 |
|
|
| 55,733 |
|
|
| (2,171 | ) |
| 2015 |
Southshore Corporate Center |
| 3 |
| (d) |
|
| 9,480 |
|
|
| 24,173 |
|
|
| 11,154 |
|
|
| 8,143 |
|
|
| 36,664 |
|
|
| 44,807 |
|
|
| (6,029 | ) |
| 2006, 2014, 2015 |
Portland, Oregon |
| 28 |
|
|
|
| 49,393 |
|
|
| 153,825 |
|
|
| 15,565 |
|
|
| 48,056 |
|
|
| 170,727 |
|
|
| 218,783 |
|
|
| (21,400 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reno, Nevada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Damonte Ranch Distribution Center |
| 3 |
| (d) |
|
| 8,764 |
|
|
| 36,766 |
|
|
| 1,317 |
|
|
| 8,764 |
|
|
| 38,083 |
|
|
| 46,847 |
|
|
| (6,238 | ) |
| 2012, 2014 |
Golden Valley Distribution Center |
| 1 |
|
|
|
| 940 |
|
|
| 13,686 |
|
|
| 4,237 |
|
|
| 2,415 |
|
|
| 16,448 |
|
|
| 18,863 |
|
|
| (5,720 | ) |
| 2005 |
Reno Aircenter |
| 1 |
|
|
|
| 544 |
|
|
| 12,292 |
|
|
| 1,686 |
|
|
| 544 |
|
|
| 13,978 |
|
|
| 14,522 |
|
|
| (571 | ) |
| 2015 |
RNO Cargo Center 10_11 |
| 2 |
|
|
|
| - |
|
|
| 4,265 |
|
|
| 405 |
|
|
| - |
|
|
| 4,670 |
|
|
| 4,670 |
|
|
| (1,658 | ) |
| 2011 |
Sage Point Business Park |
| 1 |
|
|
|
| 1,705 |
|
|
| 6,821 |
|
|
| 457 |
|
|
| 1,705 |
|
|
| 7,278 |
|
|
| 8,983 |
|
|
| (368 | ) |
| 2015 |
Stead Distribution Center |
| 1 |
| (d) |
|
| 1,046 |
|
|
| 19,330 |
|
|
| 607 |
|
|
| 1,046 |
|
|
| 19,937 |
|
|
| 20,983 |
|
|
| (931 | ) |
| 2015 |
Tahoe-Reno Industrial Center |
| 3 |
| (d) |
|
| 6,705 |
|
|
| 30,381 |
|
|
| 59,889 |
|
|
| 6,704 |
|
|
| 90,271 |
|
|
| 96,975 |
|
|
| (8,571 | ) |
| 2007, 2015 |
Vista Industrial Park |
| 6 |
| (d) |
|
| 5,923 |
|
|
| 26,807 |
|
|
| 10,940 |
|
|
| 5,923 |
|
|
| 37,747 |
|
|
| 43,670 |
|
|
| (20,665 | ) |
| 1994, 2001 |
Reno, Nevada |
| 18 |
|
|
|
| 25,627 |
|
|
| 150,348 |
|
|
| 79,538 |
|
|
| 27,101 |
|
|
| 228,412 |
|
|
| 255,513 |
|
|
| (44,722 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Antonio, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coliseum Distribution Center |
| 2 |
| (d) |
|
| 1,607 |
|
|
| 6,548 |
|
|
| 94 |
|
|
| 1,607 |
|
|
| 6,642 |
|
|
| 8,249 |
|
|
| (565 | ) |
| 2014 |
Cornerstone Distribution Center |
| 1 |
|
|
|
| 2,173 |
|
|
| - |
|
|
| 14,823 |
|
|
| 2,386 |
|
|
| 14,610 |
|
|
| 16,996 |
|
|
| (191 | ) |
| 2016 |
Director Drive Distribution Center |
| 2 |
|
|
|
| 1,271 |
|
|
| 5,455 |
|
|
| 299 |
|
|
| 1,271 |
|
|
| 5,754 |
|
|
| 7,025 |
|
|
| (1,268 | ) |
| 2012 |
Downtown Distribution Center |
| 1 |
|
|
|
| 579 |
|
|
| 2,347 |
|
|
| - |
|
|
| 579 |
|
|
| 2,347 |
|
|
| 2,926 |
|
|
| (206 | ) |
| 2014 |
Eisenhauer Distribution Center |
| 5 |
| (d) |
|
| 5,042 |
|
|
| 21,383 |
|
|
| 1,592 |
|
|
| 5,042 |
|
|
| 22,975 |
|
|
| 28,017 |
|
|
| (3,625 | ) |
| 2012, 2014 |
Interchange East Distribution Center |
| 1 |
|
|
|
| 1,496 |
|
|
| 6,535 |
|
|
| 234 |
|
|
| 1,496 |
|
|
| 6,769 |
|
|
| 8,265 |
|
|
| (1,872 | ) |
| 2012 |
Macro Distribution Center |
| 4 |
|
|
|
| 2,535 |
|
|
| 12,395 |
|
|
| 4,887 |
|
|
| 2,535 |
|
|
| 17,282 |
|
|
| 19,817 |
|
|
| (6,481 | ) |
| 2002, 2014 |
Perrin Creek Corporate Center |
| 10 |
| (d) |
|
| 9,770 |
|
|
| 40,193 |
|
|
| 1,526 |
|
|
| 9,770 |
|
|
| 41,719 |
|
|
| 51,489 |
|
|
| (5,552 | ) |
| 2012, 2014 |
Rittiman East Industrial Park |
| 2 |
|
|
|
| 4,848 |
|
|
| 19,223 |
|
|
| 3,292 |
|
|
| 4,848 |
|
|
| 22,515 |
|
|
| 27,363 |
|
|
| (8,173 | ) |
| 2006 |
San Antonio Distribution Center II |
| 3 |
|
|
|
| 885 |
|
|
| - |
|
|
| 7,893 |
|
|
| 885 |
|
|
| 7,893 |
|
|
| 8,778 |
|
|
| (4,834 | ) |
| 1994 |
San Antonio Distribution Center III |
| 3 |
| (d) |
|
| 3,154 |
|
|
| 12,876 |
|
|
| 211 |
|
|
| 3,154 |
|
|
| 13,087 |
|
|
| 16,241 |
|
|
| (1,526 | ) |
| 2012, 2014 |
Tri-County Distribution Center |
| 4 |
| (d) |
|
| 6,888 |
|
|
| 27,718 |
|
|
| 2,269 |
|
|
| 6,889 |
|
|
| 29,986 |
|
|
| 36,875 |
|
|
| (5,729 | ) |
| 2007, 2014 |
San Antonio, Texas |
| 38 |
|
|
|
| 40,248 |
|
|
| 154,673 |
|
|
| 37,120 |
|
|
| 40,462 |
|
|
| 191,579 |
|
|
| 232,041 |
|
|
| (40,022 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco Bay Area, California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acer Distribution Center |
| 1 |
| (d) |
|
| 3,368 |
|
|
| 15,139 |
|
|
| 277 |
|
|
| 3,368 |
|
|
| 15,416 |
|
|
| 18,784 |
|
|
| (3,777 | ) |
| 2011 |
Alvarado Business Center |
| 10 |
|
|
|
| 20,739 |
|
|
| 62,595 |
|
|
| 7,995 |
|
|
| 20,739 |
|
|
| 70,590 |
|
|
| 91,329 |
|
|
| (27,825 | ) |
| 2005 |
105
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Moffett Park - Bordeaux R and D | 4 | 6,663 | 19,552 | 223 | 6,663 | 19,775 | 26,438 | (2,096 | ) | 2011 | ||||||||||||||||||||||||||||
Oakland Industrial Center | 3 | (d | ) | 8,234 | 24,704 | 2,539 | 8,235 | 27,242 | 35,477 | (7,612 | ) | 2005 | ||||||||||||||||||||||||||
Overlook Distribution Center | 1 | 1,573 | 8,915 | 575 | 1,573 | 9,490 | 11,063 | (4,497 | ) | 1999 | ||||||||||||||||||||||||||||
Pacific Business Center | 2 | 6,075 | 26,260 | 3,439 | 6,075 | 29,699 | 35,774 | (2,685 | ) | 2011 | ||||||||||||||||||||||||||||
Pacific Commons Industrial Center | 5 | (d | )(e) | 25,784 | 77,594 | 2,160 | 25,805 | 79,733 | 105,538 | (22,450 | ) | 2005 | ||||||||||||||||||||||||||
Pacific Industrial Center | 6 | (d | ) | 21,675 | 65,083 | 3,423 | 21,675 | 68,506 | 90,181 | (19,362 | ) | 2005 | ||||||||||||||||||||||||||
San Leandro Distribution Center | 3 | 1,387 | 7,862 | 2,779 | 1,387 | 10,641 | 12,028 | (7,132 | ) | 1993 | ||||||||||||||||||||||||||||
Shoreline Business Center | 8 | 4,328 | 16,101 | 5,454 | 4,328 | 21,555 | 25,883 | (13,136 | ) | 1993 | ||||||||||||||||||||||||||||
Silicon Valley R and D | 4 | 6,059 | 21,762 | 981 | 6,059 | 22,743 | 28,802 | (2,327 | ) | 2011 | ||||||||||||||||||||||||||||
South Bay Brokaw | 3 | 4,014 | 23,296 | 690 | 4,014 | 23,986 | 28,000 | (2,266 | ) | 2011 | ||||||||||||||||||||||||||||
South Bay Junction | 2 | 3,662 | 21,120 | 672 | 3,662 | 21,792 | 25,454 | (2,049 | ) | 2011 | ||||||||||||||||||||||||||||
South Bay Lundy | 2 | 6,500 | 33,642 | 2,145 | 6,500 | 35,787 | 42,287 | (3,330 | ) | 2011 | ||||||||||||||||||||||||||||
Spinnaker Business Center | 12 | 7,043 | 25,220 | 11,103 | 7,043 | 36,323 | 43,366 | (22,216 | ) | 1993 | ||||||||||||||||||||||||||||
Thornton Business Center | 4 | 2,047 | 11,706 | 3,939 | 2,066 | 15,626 | 17,692 | (9,626 | ) | 1993 | ||||||||||||||||||||||||||||
TriPoint Bus Park | 4 | 9,057 | 23,727 | 3,083 | 9,057 | 26,810 | 35,867 | (2,298 | ) | 2011 | ||||||||||||||||||||||||||||
Utah Airfreight | 1 | 10,657 | 42,842 | 856 | 10,657 | 43,698 | 54,355 | (4,060 | ) | 2011 | ||||||||||||||||||||||||||||
Wiegman Road | 1 | 2,285 | 12,531 | 294 | 2,285 | 12,825 | 15,110 | (1,019 | ) | 2011 | ||||||||||||||||||||||||||||
Willow Park Ind - Ph 1 | 7 | 6,628 | 18,118 | 436 | 6,628 | 18,554 | 25,182 | (2,319 | ) | 2011 | ||||||||||||||||||||||||||||
Willow Park Ind - Ph 2 and 3 | 4 | 15,086 | 27,044 | 1,329 | 15,086 | 28,373 | 43,459 | (3,233 | ) | 2011 | ||||||||||||||||||||||||||||
Willow Park Ind - Ph 4 5 7 8 | 8 | 12,131 | 65,486 | 2,535 | 12,131 | 68,021 | 80,152 | (6,707 | ) | 2011 | ||||||||||||||||||||||||||||
Willow Park Ind - Ph 6 | 2 | 3,696 | 20,929 | 2,074 | 3,696 | 23,003 | 26,699 | (2,503 | ) | 2011 | ||||||||||||||||||||||||||||
Yosemite Drive | 1 | 2,439 | 12,068 | 271 | 2,439 | 12,339 | 14,778 | (1,119 | ) | 2011 | ||||||||||||||||||||||||||||
Zanker-Charcot Industrial | 5 | 4,867 | 28,750 | 876 | 4,867 | 29,626 | 34,493 | (2,714 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
San Francisco Bay Area, California | 196 | 324,609 | 1,138,011 | 131,227 | 324,869 | 1,268,978 | 1,593,847 | (304,170 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Savannah, Georgia | ||||||||||||||||||||||||||||||||||||||
Morgan Bus Ctr | 1 | 2,161 | 14,680 | 532 | 2,161 | 15,212 | 17,373 | (1,201 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Savannah, Georgia | 1 | 2,161 | 14,680 | 532 | 2,161 | 15,212 | 17,373 | (1,201 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Seattle, Washington | ||||||||||||||||||||||||||||||||||||||
East Valley Warehouse | 1 | (d | )(e) | 10,472 | 57,825 | 792 | 10,472 | 58,617 | 69,089 | (4,807 | ) | 2011 | ||||||||||||||||||||||||||
Harvest Business Park | 3 | (e | ) | 3,541 | 18,827 | 650 | 3,541 | 19,477 | 23,018 | (1,744 | ) | 2011 | ||||||||||||||||||||||||||
Kent Centre Corporate Park | 4 | (e | ) | 5,397 | 21,599 | 552 | 5,397 | 22,151 | 27,548 | (2,030 | ) | 2011 | ||||||||||||||||||||||||||
Kingsport Industrial Park | 7 | 16,605 | 48,942 | 1,941 | 16,800 | 50,688 | 67,488 | (6,109 | ) | 2011 | ||||||||||||||||||||||||||||
Northwest Distribution Center | 3 | (e | ) | 5,114 | 24,090 | 1,090 | 5,114 | 25,180 | 30,294 | (2,278 | ) | 2011 | ||||||||||||||||||||||||||
ProLogis Park SeaTac | 2 | (d | ) | 12,230 | 14,170 | 3,453 | 12,457 | 17,396 | 29,853 | (2,476 | ) | 2008 | ||||||||||||||||||||||||||
Puget Sound Airfreight | 1 | 1,408 | 4,201 | 92 | 1,408 | 4,293 | 5,701 | (410 | ) | 2011 | ||||||||||||||||||||||||||||
Renton Northwest Corp. Park | 4 | 5,102 | 17,946 | 263 | 5,102 | 18,209 | 23,311 | (2,002 | ) | 2011 | ||||||||||||||||||||||||||||
Sumner Landing | 1 | (e | ) | 10,332 | 32,545 | 564 | 10,332 | 33,109 | 43,441 | (2,399 | ) | 2011 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Seattle, Washington | 26 | 70,201 | 240,145 | 9,397 | 70,623 | 249,120 | 319,743 | (24,255 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
South Florida | ||||||||||||||||||||||||||||||||||||||
Airport West Distribution Center | 2 | (d | ) | 1,253 | 3,825 | 4,079 | 1,974 | 7,183 | 9,157 | (3,413 | ) | 1995, 1998 | ||||||||||||||||||||||||||
Beacon Centre | 18 | 37,998 | 196,004 | 5,299 | 37,998 | 201,303 | 239,301 | (17,468 | ) | 2011 | ||||||||||||||||||||||||||||
Beacon Industrial Park | 8 | (d | ) | 20,139 | 68,093 | 2,870 | 20,139 | 70,963 | 91,102 | (6,006 | ) | 2011 | ||||||||||||||||||||||||||
Beacon Lakes | 1 | 3,312 | - | 9,958 | 3,312 | 9,958 | 13,270 | (8 | ) | 2012 | ||||||||||||||||||||||||||||
Blue Lagoon Business Park | 2 | (d | ) | 9,189 | 29,451 | 1,193 | 9,189 | 30,644 | 39,833 | (2,871 | ) | 2011 | ||||||||||||||||||||||||||
Boca Distribution Center | 1 | 1,474 | 5,918 | 1,060 | 1,474 | 6,978 | 8,452 | (1,705 | ) | 2006 | ||||||||||||||||||||||||||||
CenterPort Distribution Center | 5 | (d | ) | 8,802 | 22,504 | 2,301 | 8,922 | 24,685 | 33,607 | (7,545 | ) | 1999, 2012 | ||||||||||||||||||||||||||
Copans Distribution Center | 2 | 504 | 2,857 | 1,110 | 504 | 3,967 | 4,471 | (2,002 | ) | 1997, 1998 | ||||||||||||||||||||||||||||
Dade Distribution Center | 1 | 2,589 | 14,669 | 390 | 2,589 | 15,059 | 17,648 | (4,325 | ) | 2005 | ||||||||||||||||||||||||||||
Dolphin Distribution Center | 1 | 2,716 | 7,364 | 852 | 2,716 | 8,216 | 10,932 | (983 | ) | 2011 | ||||||||||||||||||||||||||||
International Corp Park | 2 | 10,596 | 15,898 | 1,543 | 10,596 | 17,441 | 28,037 | (1,959 | ) | 2010 | ||||||||||||||||||||||||||||
Marlin Distribution Center | 1 | 1,844 | 6,603 | 32 | 1,844 | 6,635 | 8,479 | (748 | ) | 2011 | ||||||||||||||||||||||||||||
Miami Airport Business Center | 6 | 11,173 | 45,921 | 1,979 | 11,173 | 47,900 | 59,073 | (4,609 | ) | 2011 | ||||||||||||||||||||||||||||
North Andrews Distribution Center | 1 | 698 | 3,956 | 335 | 698 | 4,291 | 4,989 | (2,633 | ) | 1994 | ||||||||||||||||||||||||||||
Pompano Beach Distribution Center | 3 | 11,035 | 15,136 | 3,418 | 11,035 | 18,554 | 29,589 | (2,164 | ) | 2008 | ||||||||||||||||||||||||||||
Pompano Center of Commer | 5 | 5,171 | 13,930 | 260 | 5,171 | 14,190 | 19,361 | (1,210 | ) | 2011 | ||||||||||||||||||||||||||||
Port Lauderdale Distribution Center | 3 | (d | ) | 7,118 | 10,034 | 9,427 | 8,427 | 18,152 | 26,579 | (4,321 | ) | 1997, 2012 | ||||||||||||||||||||||||||
ProLogis Park I-595 | 2 | (d | ) | 1,998 | 11,326 | 750 | 1,999 | 12,075 | 14,074 | (4,479 | ) | 2003 | ||||||||||||||||||||||||||
Sawgrass Distribution Center | 2 | 10,016 | - | 15,024 | 10,016 | 15,024 | 25,040 | (1,403 | ) | 2009 | ||||||||||||||||||||||||||||
Tarpon Distribution Center | 1 | 1,847 | 6,451 | 147 | 1,847 | 6,598 | 8,445 | (823 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
South Florida | 67 | 149,472 | 479,940 | 62,027 | 151,623 | 539,816 | 691,439 | (70,675 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Anaheim Industrial Center | 12 | (d | ) | 31,086 | 57,836 | 2,399 | 31,086 | 60,235 | 91,321 | (16,857 | ) | 2005 | ||||||||||||||||||||||||||
Anaheim Industrial Property | 1 | 5,096 | 10,816 | 14 | 5,096 | 10,830 | 15,926 | (989 | ) | 2011 | ||||||||||||||||||||||||||||
Arrow Ind. Park | 2 | (d | ) | 4,840 | 8,120 | 637 | 4,840 | 8,757 | 13,597 | (714 | ) | 2012 | ||||||||||||||||||||||||||
Artesia Industrial | 19 | 68,691 | 145,492 | 3,839 | 68,691 | 149,331 | 218,022 | (15,097 | ) | 2011 | ||||||||||||||||||||||||||||
Bell Ranch Distribution | 4 | 5,539 | 23,092 | 1,577 | 5,539 | 24,669 | 30,208 | (2,418 | ) | 2011 | ||||||||||||||||||||||||||||
Brea Ind Ctr | 1 | 2,488 | 4,062 | 37 | 2,488 | 4,099 | 6,587 | (298 | ) | 2012 | ||||||||||||||||||||||||||||
California Commerce Center | 4 | (d | ) | 16,432 | 26,531 | 1,917 | 16,432 | 28,448 | 44,880 | (2,049 | ) | 2012 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
Bayshore Distribution Center |
| 1 |
|
|
|
| 6,450 |
|
|
| 15,049 |
|
|
| 2,696 |
|
|
| 6,450 |
|
|
| 17,745 |
|
|
| 24,195 |
|
|
| (4,679 | ) |
| 2011 |
Bayside Corporate Center |
| 7 |
|
|
|
| 4,365 |
|
|
| - |
|
|
| 23,031 |
|
|
| 4,365 |
|
|
| 23,031 |
|
|
| 27,396 |
|
|
| (14,496 | ) |
| 1995, 1996 |
Bayside Plaza I |
| 12 |
|
|
|
| 5,212 |
|
|
| 18,008 |
|
|
| 9,688 |
|
|
| 5,216 |
|
|
| 27,692 |
|
|
| 32,908 |
|
|
| (20,122 | ) |
| 1993 |
Bayside Plaza II |
| 2 |
|
|
|
| 634 |
|
|
| - |
|
|
| 3,931 |
|
|
| 634 |
|
|
| 3,931 |
|
|
| 4,565 |
|
|
| (2,655 | ) |
| 1994 |
Boyce Distribution Center |
| 2 |
|
|
|
| 21,719 |
|
|
| - |
|
|
| 35,182 |
|
|
| 22,360 |
|
|
| 34,541 |
|
|
| 56,901 |
|
|
| (447 | ) |
| 2016 |
Brennan Distribution Center |
| 1 |
|
|
|
| 1,912 |
|
|
| 7,553 |
|
|
| 125 |
|
|
| 1,912 |
|
|
| 7,678 |
|
|
| 9,590 |
|
|
| (1,842 | ) |
| 2011 |
Component Drive Industrial Portfolio |
| 3 |
|
|
|
| 2,829 |
|
|
| 13,532 |
|
|
| 785 |
|
|
| 2,829 |
|
|
| 14,317 |
|
|
| 17,146 |
|
|
| (3,489 | ) |
| 2011 |
Cypress |
| 1 |
|
|
|
| 1,065 |
|
|
| 5,103 |
|
|
| 252 |
|
|
| 1,065 |
|
|
| 5,355 |
|
|
| 6,420 |
|
|
| (1,275 | ) |
| 2011 |
Dado Distribution Center |
| 1 |
|
|
|
| 2,194 |
|
|
| 11,079 |
|
|
| 283 |
|
|
| 2,194 |
|
|
| 11,362 |
|
|
| 13,556 |
|
|
| (2,900 | ) |
| 2011 |
Doolittle Distribution Center |
| 1 |
|
|
|
| 2,843 |
|
|
| 18,849 |
|
|
| 1,672 |
|
|
| 2,843 |
|
|
| 20,521 |
|
|
| 23,364 |
|
|
| (4,272 | ) |
| 2011 |
Dowe Industrial Center |
| 2 |
| (d) |
|
| 5,884 |
|
|
| 20,400 |
|
|
| 912 |
|
|
| 5,884 |
|
|
| 21,312 |
|
|
| 27,196 |
|
|
| (5,320 | ) |
| 2011 |
Dublin Industrial Portfolio |
| 1 |
|
|
|
| 3,241 |
|
|
| 15,951 |
|
|
| 1,071 |
|
|
| 3,241 |
|
|
| 17,022 |
|
|
| 20,263 |
|
|
| (3,393 | ) |
| 2011 |
East Bay Doolittle |
| 1 |
|
|
|
| 4,015 |
|
|
| 15,988 |
|
|
| 1,794 |
|
|
| 4,015 |
|
|
| 17,782 |
|
|
| 21,797 |
|
|
| (4,765 | ) |
| 2011 |
East Grand Airfreight |
| 10 |
|
|
|
| 43,310 |
|
|
| 43,350 |
|
|
| 7,435 |
|
|
| 43,310 |
|
|
| 50,785 |
|
|
| 94,095 |
|
|
| (5,017 | ) |
| 2011, 2015, 2016 |
Edgewater Industrial Center |
| 1 |
|
|
|
| 6,630 |
|
|
| 31,153 |
|
|
| 3,340 |
|
|
| 6,630 |
|
|
| 34,493 |
|
|
| 41,123 |
|
|
| (8,615 | ) |
| 2011 |
Eigenbrodt Way Distribution Center |
| 1 |
|
|
|
| 393 |
|
|
| 2,228 |
|
|
| 694 |
|
|
| 393 |
|
|
| 2,922 |
|
|
| 3,315 |
|
|
| (2,266 | ) |
| 1993 |
Gateway Corporate Center |
| 10 |
|
|
|
| 6,736 |
|
|
| 24,747 |
|
|
| 11,655 |
|
|
| 6,744 |
|
|
| 36,394 |
|
|
| 43,138 |
|
|
| (26,840 | ) |
| 1993 |
Hayward Commerce Center |
| 4 |
|
|
|
| 1,933 |
|
|
| 10,955 |
|
|
| 3,961 |
|
|
| 1,933 |
|
|
| 14,916 |
|
|
| 16,849 |
|
|
| (11,363 | ) |
| 1993 |
Hayward Commerce Park |
| 2 |
|
|
|
| 7,131 |
|
|
| 10,519 |
|
|
| 763 |
|
|
| 7,131 |
|
|
| 11,282 |
|
|
| 18,413 |
|
|
| (1,321 | ) |
| 2014 |
Hayward Distribution Center |
| 2 |
|
|
|
| 831 |
|
|
| 5,510 |
|
|
| 3,554 |
|
|
| 1,038 |
|
|
| 8,857 |
|
|
| 9,895 |
|
|
| (7,004 | ) |
| 1993 |
Hayward Industrial Center |
| 20 |
|
|
|
| 13,535 |
|
|
| 48,573 |
|
|
| 13,659 |
|
|
| 13,535 |
|
|
| 62,232 |
|
|
| 75,767 |
|
|
| (28,586 | ) |
| 1993, 2015 |
Junction Industrial Park |
| 4 |
|
|
|
| 7,658 |
|
|
| 39,106 |
|
|
| 2,156 |
|
|
| 7,658 |
|
|
| 41,262 |
|
|
| 48,920 |
|
|
| (8,288 | ) |
| 2011 |
Laurelwood Drive |
| 3 |
|
|
|
| 18,709 |
|
|
| 34,925 |
|
|
| 1,098 |
|
|
| 18,709 |
|
|
| 36,023 |
|
|
| 54,732 |
|
|
| (4,197 | ) |
| 2011, 2015 |
Lawrence SSF |
| 1 |
|
|
|
| 2,189 |
|
|
| 7,498 |
|
|
| 299 |
|
|
| 2,189 |
|
|
| 7,797 |
|
|
| 9,986 |
|
|
| (1,813 | ) |
| 2011 |
Livermore Distribution Center |
| 4 |
|
|
|
| 8,992 |
|
|
| 26,976 |
|
|
| 3,841 |
|
|
| 8,992 |
|
|
| 30,817 |
|
|
| 39,809 |
|
|
| (12,003 | ) |
| 2005 |
Martin-Scott Industrial Portfolio |
| 2 |
|
|
|
| 3,546 |
|
|
| 9,717 |
|
|
| 498 |
|
|
| 3,546 |
|
|
| 10,215 |
|
|
| 13,761 |
|
|
| (2,468 | ) |
| 2011 |
Oakland Industrial Center |
| 3 |
|
|
|
| 8,234 |
|
|
| 24,704 |
|
|
| 2,650 |
|
|
| 8,235 |
|
|
| 27,353 |
|
|
| 35,588 |
|
|
| (10,629 | ) |
| 2005 |
Overlook Distribution Center |
| 1 |
|
|
|
| 1,573 |
|
|
| 8,915 |
|
|
| 2,576 |
|
|
| 1,573 |
|
|
| 11,491 |
|
|
| 13,064 |
|
|
| (5,981 | ) |
| 1999 |
Pacific Business Center |
| 2 |
|
|
|
| 6,075 |
|
|
| 26,260 |
|
|
| 4,153 |
|
|
| 6,075 |
|
|
| 30,413 |
|
|
| 36,488 |
|
|
| (7,034 | ) |
| 2011 |
Pacific Commons Industrial Center |
| 5 |
|
|
|
| 25,784 |
|
|
| 77,594 |
|
|
| 2,350 |
|
|
| 25,805 |
|
|
| 79,923 |
|
|
| 105,728 |
|
|
| (30,853 | ) |
| 2005 |
Pacific Industrial Center |
| 6 |
|
|
|
| 21,675 |
|
|
| 65,083 |
|
|
| 5,055 |
|
|
| 21,675 |
|
|
| 70,138 |
|
|
| 91,813 |
|
|
| (27,280 | ) |
| 2005 |
San Francisco Industrial Park |
| 4 |
|
|
|
| 35,017 |
|
|
| 15,007 |
|
|
| 81 |
|
|
| 35,017 |
|
|
| 15,088 |
|
|
| 50,105 |
|
|
| (2,641 | ) |
| 2015 |
San Leandro Distribution Center |
| 9 |
|
|
|
| 28,264 |
|
|
| 44,507 |
|
|
| 5,680 |
|
|
| 28,265 |
|
|
| 50,186 |
|
|
| 78,451 |
|
|
| (11,452 | ) |
| 1993, 2015 |
Shoreline Business Center |
| 8 |
|
|
|
| 4,328 |
|
|
| 16,101 |
|
|
| 7,029 |
|
|
| 4,328 |
|
|
| 23,130 |
|
|
| 27,458 |
|
|
| (16,550 | ) |
| 1993 |
South Bay Brokaw |
| 3 |
|
|
|
| 4,014 |
|
|
| 23,296 |
|
|
| 1,819 |
|
|
| 4,014 |
|
|
| 25,115 |
|
|
| 29,129 |
|
|
| (5,145 | ) |
| 2011 |
South Bay Junction |
| 2 |
|
|
|
| 3,662 |
|
|
| 21,120 |
|
|
| 1,891 |
|
|
| 3,662 |
|
|
| 23,011 |
|
|
| 26,673 |
|
|
| (4,702 | ) |
| 2011 |
South Bay Lundy |
| 2 |
|
|
|
| 6,500 |
|
|
| 33,642 |
|
|
| 2,691 |
|
|
| 6,500 |
|
|
| 36,333 |
|
|
| 42,833 |
|
|
| (7,830 | ) |
| 2011 |
Spinnaker Business Center |
| 12 |
|
|
|
| 7,043 |
|
|
| 25,220 |
|
|
| 13,120 |
|
|
| 7,043 |
|
|
| 38,340 |
|
|
| 45,383 |
|
|
| (27,323 | ) |
| 1993 |
Thornton Business Center |
| 4 |
|
|
|
| 2,047 |
|
|
| 11,706 |
|
|
| 4,822 |
|
|
| 2,066 |
|
|
| 16,509 |
|
|
| 18,575 |
|
|
| (11,978 | ) |
| 1993 |
TriPoint Business Park |
| 4 |
|
|
|
| 9,057 |
|
|
| 23,727 |
|
|
| 4,874 |
|
|
| 9,057 |
|
|
| 28,601 |
|
|
| 37,658 |
|
|
| (5,468 | ) |
| 2011 |
Utah Airfreight |
| 1 |
|
|
|
| 10,657 |
|
|
| 42,842 |
|
|
| 2,806 |
|
|
| 10,657 |
|
|
| 45,648 |
|
|
| 56,305 |
|
|
| (9,147 | ) |
| 2011 |
Wiegman Road |
| 1 |
|
|
|
| 2,285 |
|
|
| 12,531 |
|
|
| 1,255 |
|
|
| 2,285 |
|
|
| 13,786 |
|
|
| 16,071 |
|
|
| (2,320 | ) |
| 2011 |
Yosemite Drive |
| 10 |
|
|
|
| 31,304 |
|
|
| 65,674 |
|
|
| 295 |
|
|
| 31,304 |
|
|
| 65,969 |
|
|
| 97,273 |
|
|
| (4,245 | ) |
| 2011, 2015 |
Zanker-Charcot Industrial Center |
| 5 |
|
|
|
| 4,867 |
|
|
| 28,750 |
|
|
| 2,224 |
|
|
| 4,867 |
|
|
| 30,974 |
|
|
| 35,841 |
|
|
| (6,192 | ) |
| 2011 |
San Francisco Bay Area, California |
| 192 |
|
|
|
| 420,449 |
|
|
| 1,081,182 |
|
|
| 208,018 |
|
|
| 421,351 |
|
|
| 1,288,298 |
|
|
| 1,709,649 |
|
|
| (417,808 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savannah, Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan Business Center |
| 1 |
|
|
|
| 2,161 |
|
|
| 14,680 |
|
|
| 1,260 |
|
|
| 2,161 |
|
|
| 15,940 |
|
|
| 18,101 |
|
|
| (2,794 | ) |
| 2011 |
Savannah, Georgia |
| 1 |
|
|
|
| 2,161 |
|
|
| 14,680 |
|
|
| 1,260 |
|
|
| 2,161 |
|
|
| 15,940 |
|
|
| 18,101 |
|
|
| (2,794 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seattle, Washington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auburn Distribution Center |
| 1 |
|
|
|
| 2,608 |
|
|
| 5,742 |
|
|
| 33 |
|
|
| 2,608 |
|
|
| 5,775 |
|
|
| 8,383 |
|
|
| (233 | ) |
| 2015 |
East Valley Warehouse |
| 1 |
| (d)(e) |
|
| 10,472 |
|
|
| 57,825 |
|
|
| 1,012 |
|
|
| 10,472 |
|
|
| 58,837 |
|
|
| 69,309 |
|
|
| (10,563 | ) |
| 2011 |
Fife Distribution Center |
| 1 |
|
|
|
| 3,245 |
|
|
| - |
|
|
| 13,811 |
|
|
| 3,588 |
|
|
| 13,468 |
|
|
| 17,056 |
|
|
| (1,295 | ) |
| 2013 |
Harvest Business Park |
| 3 |
|
|
|
| 3,541 |
|
|
| 18,827 |
|
|
| 1,002 |
|
|
| 3,541 |
|
|
| 19,829 |
|
|
| 23,370 |
|
|
| (3,998 | ) |
| 2011 |
Interurban Distribution Center |
| 1 |
| (d) |
|
| 7,233 |
|
|
| 13,958 |
|
|
| 78 |
|
|
| 7,233 |
|
|
| 14,036 |
|
|
| 21,269 |
|
|
| (1,532 | ) |
| 2015 |
Kent Centre Corporate Park |
| 4 |
|
|
|
| 5,397 |
|
|
| 21,599 |
|
|
| 1,170 |
|
|
| 5,397 |
|
|
| 22,769 |
|
|
| 28,166 |
|
|
| (4,519 | ) |
| 2011 |
Kent Corporate Center |
| 1 |
|
|
|
| 12,616 |
|
|
| 8,368 |
|
|
| 842 |
|
|
| 12,616 |
|
|
| 9,210 |
|
|
| 21,826 |
|
|
| (539 | ) |
| 2015 |
Kent-Northwest Corporate Park |
| 18 |
|
|
|
| 71,768 |
|
|
| 139,886 |
|
|
| 3,069 |
|
|
| 71,768 |
|
|
| 142,955 |
|
|
| 214,723 |
|
|
| (9,422 | ) |
| 2015 |
Kingsport Industrial Park |
| 7 |
|
|
|
| 16,605 |
|
|
| 48,942 |
|
|
| 3,139 |
|
|
| 16,800 |
|
|
| 51,886 |
|
|
| 68,686 |
|
|
| (13,669 | ) |
| 2011 |
Northwest Distribution Center |
| 3 |
|
|
|
| 5,114 |
|
|
| 24,090 |
|
|
| 1,994 |
|
|
| 5,114 |
|
|
| 26,084 |
|
|
| 31,198 |
|
|
| (5,403 | ) |
| 2011 |
Occidental Distribution Center |
| 1 |
|
|
|
| 1,770 |
|
|
| 1,960 |
|
|
| 471 |
|
|
| 1,770 |
|
|
| 2,431 |
|
|
| 4,201 |
|
|
| (100 | ) |
| 2015 |
Portside Distribution Center |
| 5 |
|
|
|
| 111,175 |
|
|
| 71,376 |
|
|
| 2,274 |
|
|
| 112,575 |
|
|
| 72,250 |
|
|
| 184,825 |
|
|
| (3,896 | ) |
| 2015, 2016 |
ProLogis Park SeaTac |
| 2 |
| (d) |
|
| 12,230 |
|
|
| 14,170 |
|
|
| 3,752 |
|
|
| 12,457 |
|
|
| 17,695 |
|
|
| 30,152 |
|
|
| (4,423 | ) |
| 2008 |
Puget Sound Airfreight |
| 1 |
|
|
|
| 1,408 |
|
|
| 4,201 |
|
|
| 450 |
|
|
| 1,408 |
|
|
| 4,651 |
|
|
| 6,059 |
|
|
| (943 | ) |
| 2011 |
Renton Northwest Corporate Park |
| 4 |
|
|
|
| 5,102 |
|
|
| 17,946 |
|
|
| 1,304 |
|
|
| 5,102 |
|
|
| 19,250 |
|
|
| 24,352 |
|
|
| (4,479 | ) |
| 2011 |
SEA Cargo Center North |
| 1 |
|
|
|
| - |
|
|
| 10,279 |
|
|
| 63 |
|
|
| - |
|
|
| 10,342 |
|
|
| 10,342 |
|
|
| (8,842 | ) |
| 2011 |
Sumner Landing |
| 1 |
| (e) |
|
| 10,332 |
|
|
| 32,545 |
|
|
| 894 |
|
|
| 10,332 |
|
|
| 33,439 |
|
|
| 43,771 |
|
|
| (5,359 | ) |
| 2011 |
Van Doren's Distribution Center |
| 1 |
| (d) |
|
| 3,166 |
|
|
| 7,339 |
|
|
| 7 |
|
|
| 3,166 |
|
|
| 7,346 |
|
|
| 10,512 |
|
|
| (590 | ) |
| 2014 |
Seattle, Washington |
| 56 |
|
|
|
| 283,782 |
|
|
| 499,053 |
|
|
| 35,365 |
|
|
| 285,947 |
|
|
| 532,253 |
|
|
| 818,200 |
|
|
| (79,805 | ) |
|
|
106
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Carson Dist Ctr | 1 | 15,491 | - | 16,978 | 15,491 | 16,978 | 32,469 | (827 | ) | 2011 | ||||||||||||||||||||||||||||
Carson Industrial | 12 | 13,608 | 32,802 | 1,062 | 13,608 | 33,864 | 47,472 | (3,526 | ) | 2011 | ||||||||||||||||||||||||||||
Carson Town Center | 2 | 11,781 | 31,572 | 185 | 11,781 | 31,757 | 43,538 | (2,656 | ) | 2011 | ||||||||||||||||||||||||||||
Cedarpointe Ind Park | 5 | (d | ) | 7,824 | 12,476 | 652 | 7,824 | 13,128 | 20,952 | (945 | ) | 2012 | ||||||||||||||||||||||||||
Chartwell Distribution Center | 1 | 6,417 | 16,964 | 786 | 6,417 | 17,750 | 24,167 | (1,644 | ) | 2011 | ||||||||||||||||||||||||||||
Chino Ind Ctr | 4 | 850 | 1,274 | 10 | 850 | 1,284 | 2,134 | (394 | ) | 2012 | ||||||||||||||||||||||||||||
Commerce Ind Ctr | 1 | (d | ) | 11,345 | 17,653 | 88 | 11,345 | 17,741 | 29,086 | (1,190 | ) | 2012 | ||||||||||||||||||||||||||
Corona Dist Ctr | 1 | (d | ) | 4,249 | 6,657 | 161 | 4,249 | 6,818 | 11,067 | (454 | ) | 2012 | ||||||||||||||||||||||||||
Crossroads Business Park | 7 | (d | ) | 21,393 | 82,655 | 105,706 | 74,914 | 134,840 | 209,754 | (30,140 | ) | 2005, 2010 | ||||||||||||||||||||||||||
Del Amo Industrial Center | 1 | 7,471 | 17,889 | 387 | 7,471 | 18,276 | 25,747 | (1,968 | ) | 2011 | ||||||||||||||||||||||||||||
Dominguez North Industrial Center | 6 | (d | ) | 20,662 | 34,382 | 1,725 | 20,688 | 36,081 | 56,769 | (4,769 | ) | 2007, 2012 | ||||||||||||||||||||||||||
Eaves Distribution Center | 3 | 13,914 | 31,041 | 1,180 | 13,914 | 32,221 | 46,135 | (3,636 | ) | 2011 | ||||||||||||||||||||||||||||
Foothill Bus Ctr | 3 | (d | ) | 5,254 | 8,096 | 112 | 5,254 | 8,208 | 13,462 | (539 | ) | 2012 | ||||||||||||||||||||||||||
Ford Distribution Cntr | 7 | 29,895 | 81,433 | 1,461 | 29,895 | 82,894 | 112,789 | (9,542 | ) | 2011 | ||||||||||||||||||||||||||||
Fordyce Distribution Center | 1 | 6,110 | 19,485 | 378 | 6,110 | 19,863 | 25,973 | (2,416 | ) | 2011 | ||||||||||||||||||||||||||||
Harris Bus Ctr Alliance II | 9 | 13,134 | 66,195 | 1,395 | 13,134 | 67,590 | 80,724 | (6,404 | ) | 2011 | ||||||||||||||||||||||||||||
Haven Distribution Center | 4 | (d | ) | 96,975 | 73,903 | 7,396 | 96,975 | 81,299 | 178,274 | (10,779 | ) | 2008 | ||||||||||||||||||||||||||
Industry Distribution Center | 8 | (d | )(e) | 54,170 | 99,434 | 4,601 | 54,170 | 104,035 | 158,205 | (27,972 | ) | 2005, 2012 | ||||||||||||||||||||||||||
Inland Empire Distribution Center | 8 | (d | )(e) | 47,947 | 102,103 | 8,113 | 48,726 | 109,437 | 158,163 | (21,285 | ) | 2005, 2012 | ||||||||||||||||||||||||||
International Multifoods | 1 | 4,700 | 8,036 | 802 | 4,700 | 8,838 | 13,538 | (859 | ) | 2011 | ||||||||||||||||||||||||||||
Kaiser Distribution Center | 8 | (d | )(e) | 131,819 | 242,618 | 19,213 | 136,027 | 257,623 | 393,650 | (70,539 | ) | 2005, 2008 | ||||||||||||||||||||||||||
Los Angeles Industrial Center | 2 | 3,777 | 7,015 | 353 | 3,777 | 7,368 | 11,145 | (2,145 | ) | 2005 | ||||||||||||||||||||||||||||
Meridian Park | 1 | 12,931 | 24,268 | 139 | 12,931 | 24,407 | 37,338 | (4,787 | ) | 2008 | ||||||||||||||||||||||||||||
Mid Counties Industrial Center | 18 | (d | ) | 55,436 | 96,453 | 14,785 | 55,437 | 111,237 | 166,674 | (30,941 | ) | 2005, 2006, 2010, 2012 | ||||||||||||||||||||||||||
Milliken Dist Ctr | 1 | (d | ) | 18,906 | 30,811 | 179 | 18,906 | 30,990 | 49,896 | (2,245 | ) | 2012 | ||||||||||||||||||||||||||
NDP—Los Angeles | 5 | 14,855 | 41,115 | 1,109 | 14,855 | 42,224 | 57,079 | (4,716 | ) | 2011 | ||||||||||||||||||||||||||||
Normandie Industrial | 1 | 12,297 | 14,957 | 614 | 12,297 | 15,571 | 27,868 | (1,926 | ) | 2011 | ||||||||||||||||||||||||||||
North County Dist Ctr | 3 | 49,949 | 76,943 | 3,056 | 49,949 | 79,999 | 129,948 | (5,567 | ) | 2011, 2012 | ||||||||||||||||||||||||||||
Ontario Dist Ctr | 1 | (d | ) | 18,823 | 29,524 | 379 | 18,823 | 29,903 | 48,726 | (2,016 | ) | 2012 | ||||||||||||||||||||||||||
Orange Industrial Center | 1 | 4,156 | 7,836 | 334 | 4,157 | 8,169 | 12,326 | (2,257 | ) | 2005 | ||||||||||||||||||||||||||||
Pacific Bus Ctr | 5 | (d | ) | 20,810 | 32,169 | 1,504 | 20,810 | 33,673 | 54,483 | (2,194 | ) | 2012 | ||||||||||||||||||||||||||
ProLogis Park Ontario | 2 | (d | ) | 25,499 | 47,366 | 609 | 25,499 | 47,975 | 73,474 | (10,855 | ) | 2007 | ||||||||||||||||||||||||||
Rancho Cucamonga Distribution Center | 4 | (d | )(e) | 46,471 | 86,305 | 1,459 | 46,472 | 87,763 | 134,235 | (24,262 | ) | 2005 | ||||||||||||||||||||||||||
Redlands Distribution Center | 3 | (d | ) | 27,060 | 66,820 | 28,562 | 28,328 | 94,114 | 122,442 | (14,598 | ) | 2006, 2007, 2012 | ||||||||||||||||||||||||||
Rialto Dist Ctr | 2 | 26,562 | 110,174 | 321 | 26,562 | 110,495 | 137,057 | (7,379 | ) | 2012 | ||||||||||||||||||||||||||||
Riverbluff Distribution Center | 1 | (d | ) | 42,964 | - | 32,918 | 42,964 | 32,918 | 75,882 | (4,941 | ) | 2009 | ||||||||||||||||||||||||||
Riverside Dist Ctr (LAX) | 2 | 2,178 | 3,440 | 34 | 2,178 | 3,474 | 5,652 | (242 | ) | 2012 | ||||||||||||||||||||||||||||
Santa Ana Distribution Center | 2 | 4,318 | 8,019 | 693 | 4,318 | 8,712 | 13,030 | (2,443 | ) | 2005 | ||||||||||||||||||||||||||||
South Bay Distribution Center | 4 | (d | ) | 14,478 | 27,511 | 3,210 | 15,280 | 29,919 | 45,199 | (8,728 | ) | 2005, 2007 | ||||||||||||||||||||||||||
Spinnaker Logistics | 1 | (d | ) | 13,483 | 22,081 | 926 | 13,483 | 23,007 | 36,490 | (2,271 | ) | 2011 | ||||||||||||||||||||||||||
Starboard Distribution Ctr | 1 | 18,763 | 53,824 | 64 | 18,763 | 53,888 | 72,651 | (4,956 | ) | 2011 | ||||||||||||||||||||||||||||
Terra Francesco | 1 | 11,196 | - | 15,305 | 11,196 | 15,305 | 26,501 | (63 | ) | 2012 | ||||||||||||||||||||||||||||
Torrance Dist Ctr | 1 | 25,730 | 40,414 | 63 | 25,730 | 40,477 | 66,207 | (2,753 | ) | 2012 | ||||||||||||||||||||||||||||
Van Nuys Airport Industrial | 4 | 23,455 | 39,916 | 2,335 | 23,455 | 42,251 | 65,706 | (3,428 | ) | 2011 | ||||||||||||||||||||||||||||
Vernon Distribution Center | 15 | 25,439 | 47,250 | 3,538 | 25,441 | 50,786 | 76,227 | (14,787 | ) | 2005 | ||||||||||||||||||||||||||||
Vernon Industrial | 2 | 3,626 | 3,319 | 216 | 3,626 | 3,535 | 7,161 | (1,498 | ) | 2011 | ||||||||||||||||||||||||||||
Vista Distribution Center | 1 | 4,150 | 6,225 | 2,562 | 4,150 | 8,787 | 12,937 | (912 | ) | 2012 | ||||||||||||||||||||||||||||
Vista Rialto Distrib Ctr | 1 | 5,885 | 25,991 | 185 | 5,885 | 26,176 | 32,061 | (2,237 | ) | 2011 | ||||||||||||||||||||||||||||
Walnut Drive | 1 | 2,665 | 7,397 | 25 | 2,665 | 7,422 | 10,087 | (685 | ) | 2011 | ||||||||||||||||||||||||||||
Watson Industrial Center AFdII | 1 | 6,944 | 11,193 | - | 6,944 | 11,193 | 18,137 | (1,064 | ) | 2011 | ||||||||||||||||||||||||||||
Wilmington Avenue Warehouse | 2 | 11,172 | 34,723 | 2,316 | 11,172 | 37,039 | 48,211 | (3,195 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Southern California | 225 | 1,213,159 | 2,265,676 | 300,604 | 1,273,768 | 2,505,671 | 3,779,439 | (410,997 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
St. Louis, Missouri | ||||||||||||||||||||||||||||||||||||||
Earth City Industrial Center | 2 | 657 | 4,141 | 1,976 | 657 | 6,117 | 6,774 | (3,560 | ) | 1998 | ||||||||||||||||||||||||||||
Westport Distribution Center | 1 | 365 | 1,247 | 2,299 | 365 | 3,546 | 3,911 | (2,092 | ) | 1997 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
St. Louis, Missouri | 3 | 1,022 | 5,388 | 4,275 | 1,022 | 9,663 | 10,685 | (5,652 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||
Accion Centro SGP | 5 | (d | ) | 9,695 | 38,837 | 139 | 9,709 | 38,962 | 48,671 | (449 | ) | 2013 | ||||||||||||||||||||||||||
Agave Ind Park SGP | 5 | (d | ) | 18,776 | 75,627 | (221 | ) | 18,907 | 75,275 | 94,182 | (942 | ) | 2013 | |||||||||||||||||||||||||
Agua Fria Ind. Park | 5 | (d | ) | 8,073 | 24,560 | 8,426 | 8,073 | 32,986 | 41,059 | (1,944 | ) | 2011, 2012 | ||||||||||||||||||||||||||
Arbolada Distribution Ctr | 3 | (d | ) | 4,231 | 16,923 | 65 | 4,231 | 16,988 | 21,219 | (200 | ) | 2013 | ||||||||||||||||||||||||||
Arrayanes Industrial Park | 2 | (d | ) | 6,639 | 26,557 | 150 | 6,639 | 26,707 | 33,346 | (260 | ) | 2013 | ||||||||||||||||||||||||||
Arrayanes IP (REIT) | 1 | (d | ) | 2,016 | 3,775 | 2,852 | 2,016 | 6,627 | 8,643 | (337 | ) | 2011 | ||||||||||||||||||||||||||
Bermudez Industrial Center | 2 | 1,155 | 4,619 | 4,168 | 1,158 | 8,784 | 9,942 | (2,778 | ) | 2007 | ||||||||||||||||||||||||||||
Bosques Industrial Park | 1 | (d | ) | 1,983 | 6,256 | 1,244 | 1,983 | 7,500 | 9,483 | (986 | ) | 2011 | ||||||||||||||||||||||||||
Carrizal Ind Park | 3 | (d | ) | 2,778 | 42,692 | 940 | 2,778 | 43,632 | 46,410 | (3,428 | ) | 2011 | ||||||||||||||||||||||||||
Cedros-Tepotzotlan Distribution Center | 2 | (d | ) | 11,990 | 6,719 | 17,276 | 12,799 | 23,186 | 35,985 | (4,915 | ) | 2006, 2007 | ||||||||||||||||||||||||||
Centro Industrial Center | 3 | 8,274 | - | 14,434 | 8,274 | 14,434 | 22,708 | (1,986 | ) | 2009 | ||||||||||||||||||||||||||||
Corregidora Distr Ctr | 1 | (d | ) | 939 | 3,758 | 39 | 939 | 3,797 | 4,736 | (63 | ) | 2013 | ||||||||||||||||||||||||||
Del Norte Industrial Center II | 3 | 2,803 | 11,450 | 3,513 | 2,803 | 14,963 | 17,766 | (1,325 | ) | 2008, 2012 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
South Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airport West Distribution Center |
| 2 |
| (d) |
|
| 1,253 |
|
|
| 3,825 |
|
|
| 4,116 |
|
|
| 1,974 |
|
|
| 7,220 |
|
|
| 9,194 |
|
|
| (4,260 | ) |
| 1995, 1998 |
Beacon Centre |
| 18 |
|
|
|
| 37,998 |
|
|
| 196,004 |
|
|
| 15,561 |
|
|
| 37,998 |
|
|
| 211,565 |
|
|
| 249,563 |
|
|
| (40,076 | ) |
| 2011 |
Beacon Industrial Park |
| 9 |
| (d) |
|
| 23,511 |
|
|
| 75,424 |
|
|
| 4,812 |
|
|
| 23,511 |
|
|
| 80,236 |
|
|
| 103,747 |
|
|
| (14,551 | ) |
| 2011, 2015 |
Beacon Lakes |
| 5 |
|
|
|
| 32,911 |
|
|
| 24,691 |
|
|
| 39,333 |
|
|
| 32,658 |
|
|
| 64,277 |
|
|
| 96,935 |
|
|
| (3,646 | ) |
| 2012, 2014, 2015 |
Blue Lagoon Business Park |
| 2 |
| (d) |
|
| 9,189 |
|
|
| 29,451 |
|
|
| 2,429 |
|
|
| 9,189 |
|
|
| 31,880 |
|
|
| 41,069 |
|
|
| (6,369 | ) |
| 2011 |
CenterPort Distribution Center |
| 5 |
| (d) |
|
| 8,802 |
|
|
| 22,504 |
|
|
| 3,958 |
|
|
| 8,922 |
|
|
| 26,342 |
|
|
| 35,264 |
|
|
| (10,623 | ) |
| 1999, 2012 |
Commercial Logistics Center |
| 1 |
|
|
|
| 7,938 |
|
|
| 11,083 |
|
|
| 632 |
|
|
| 7,938 |
|
|
| 11,715 |
|
|
| 19,653 |
|
|
| (920 | ) |
| 2015 |
Congress Distribution Center |
| 1 |
| (d) |
|
| 2,266 |
|
|
| 5,639 |
|
|
| 381 |
|
|
| 2,266 |
|
|
| 6,020 |
|
|
| 8,286 |
|
|
| (375 | ) |
| 2015 |
Dolphin Distribution Center |
| 1 |
|
|
|
| 2,716 |
|
|
| 7,364 |
|
|
| 858 |
|
|
| 2,716 |
|
|
| 8,222 |
|
|
| 10,938 |
|
|
| (2,263 | ) |
| 2011 |
Gateway Center |
| 1 |
| (d) |
|
| 1,015 |
|
|
| 1,284 |
|
|
| 18 |
|
|
| 1,015 |
|
|
| 1,302 |
|
|
| 2,317 |
|
|
| (91 | ) |
| 2015 |
Hollywood Park Distribution Center |
| 13 |
|
|
|
| 16,848 |
|
|
| 36,191 |
|
|
| 1,574 |
|
|
| 16,848 |
|
|
| 37,765 |
|
|
| 54,613 |
|
|
| (2,597 | ) |
| 2015 |
International Corporate Park |
| 5 |
|
|
|
| 26,915 |
|
|
| 54,436 |
|
|
| 3,849 |
|
|
| 26,915 |
|
|
| 58,285 |
|
|
| 85,200 |
|
|
| (6,376 | ) |
| 2010, 2015 |
Lyons Technology Park |
| 1 |
| (d) |
|
| 1,988 |
|
|
| 3,651 |
|
|
| 32 |
|
|
| 1,988 |
|
|
| 3,683 |
|
|
| 5,671 |
|
|
| (245 | ) |
| 2015 |
Magnolia Park Distribution Center |
| 1 |
| (d) |
|
| 1,398 |
|
|
| 1,613 |
|
|
| 99 |
|
|
| 1,398 |
|
|
| 1,712 |
|
|
| 3,110 |
|
|
| (108 | ) |
| 2015 |
Marlin Distribution Center |
| 1 |
|
|
|
| 1,844 |
|
|
| 6,603 |
|
|
| 449 |
|
|
| 1,844 |
|
|
| 7,052 |
|
|
| 8,896 |
|
|
| (1,649 | ) |
| 2011 |
Miami Airport Business Center |
| 6 |
|
|
|
| 11,173 |
|
|
| 45,921 |
|
|
| 2,917 |
|
|
| 11,173 |
|
|
| 48,838 |
|
|
| 60,011 |
|
|
| (10,456 | ) |
| 2011 |
North Andrews Distribution Center |
| 2 |
| (d) |
|
| 11,327 |
|
|
| 22,330 |
|
|
| 562 |
|
|
| 11,327 |
|
|
| 22,892 |
|
|
| 34,219 |
|
|
| (3,963 | ) |
| 1994, 2015 |
Pompano Beach Distribution Center |
| 3 |
|
|
|
| 11,035 |
|
|
| 15,136 |
|
|
| 3,879 |
|
|
| 11,035 |
|
|
| 19,015 |
|
|
| 30,050 |
|
|
| (4,090 | ) |
| 2008 |
Pompano Center of Commerce |
| 5 |
|
|
|
| 5,171 |
|
|
| 13,930 |
|
|
| 580 |
|
|
| 5,171 |
|
|
| 14,510 |
|
|
| 19,681 |
|
|
| (2,669 | ) |
| 2011 |
Port Lauderdale Distribution Center |
| 9 |
| (d) |
|
| 40,927 |
|
|
| 73,128 |
|
|
| 11,407 |
|
|
| 42,235 |
|
|
| 83,227 |
|
|
| 125,462 |
|
|
| (11,392 | ) |
| 1997, 2012, 2014, 2015 |
Port Lucie West Distribution Center |
| 2 |
| (d) |
|
| 1,131 |
|
|
| 1,412 |
|
|
| 56 |
|
|
| 1,131 |
|
|
| 1,468 |
|
|
| 2,599 |
|
|
| (122 | ) |
| 2015 |
ProLogis Park I-595 |
| 2 |
| (d) |
|
| 1,998 |
|
|
| 11,326 |
|
|
| 1,098 |
|
|
| 1,999 |
|
|
| 12,423 |
|
|
| 14,422 |
|
|
| (5,889 | ) |
| 2003 |
Prospect Park Distribution Center |
| 3 |
|
|
|
| 4,859 |
|
|
| 11,041 |
|
|
| 205 |
|
|
| 4,859 |
|
|
| 11,246 |
|
|
| 16,105 |
|
|
| (764 | ) |
| 2015 |
Sawgrass International Park |
| 1 |
|
|
|
| 5,163 |
|
|
| 11,476 |
|
|
| 641 |
|
|
| 5,163 |
|
|
| 12,117 |
|
|
| 17,280 |
|
|
| (565 | ) |
| 2015 |
Seneca Distribution Center |
| 3 |
|
|
|
| 16,357 |
|
|
| 46,738 |
|
|
| 327 |
|
|
| 16,357 |
|
|
| 47,065 |
|
|
| 63,422 |
|
|
| (2,230 | ) |
| 2015 |
South Dade Commerce Center |
| 1 |
| (d) |
|
| 1,791 |
|
|
| 147 |
|
|
| 22 |
|
|
| 1,791 |
|
|
| 169 |
|
|
| 1,960 |
|
|
| (36 | ) |
| 2015 |
Sunshine Park Distribution Center |
| 1 |
|
|
|
| 2,822 |
|
|
| 4,857 |
|
|
| 35 |
|
|
| 2,822 |
|
|
| 4,892 |
|
|
| 7,714 |
|
|
| (365 | ) |
| 2015 |
Tarpon Distribution Center |
| 1 |
|
|
|
| 1,847 |
|
|
| 6,451 |
|
|
| 337 |
|
|
| 1,847 |
|
|
| 6,788 |
|
|
| 8,635 |
|
|
| (1,804 | ) |
| 2011 |
South Florida |
| 105 |
|
|
|
| 292,193 |
|
|
| 743,656 |
|
|
| 100,167 |
|
|
| 294,090 |
|
|
| 841,926 |
|
|
| 1,136,016 |
|
|
| (138,494 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity Distribution Center |
| 4 |
|
|
|
| 10,820 |
|
|
| 27,410 |
|
|
| 421 |
|
|
| 10,820 |
|
|
| 27,831 |
|
|
| 38,651 |
|
|
| (1,510 | ) |
| 2015 |
Anaheim Industrial Center |
| 12 |
|
|
|
| 31,086 |
|
|
| 57,836 |
|
|
| 4,114 |
|
|
| 31,086 |
|
|
| 61,950 |
|
|
| 93,036 |
|
|
| (23,552 | ) |
| 2005 |
Anaheim Industrial Property |
| 1 |
|
|
|
| 5,096 |
|
|
| 10,816 |
|
|
| 71 |
|
|
| 5,096 |
|
|
| 10,887 |
|
|
| 15,983 |
|
|
| (2,151 | ) |
| 2011 |
Arrow Industrial Park |
| 2 |
|
|
|
| 4,840 |
|
|
| 8,120 |
|
|
| 1,112 |
|
|
| 4,840 |
|
|
| 9,232 |
|
|
| 14,072 |
|
|
| (2,029 | ) |
| 2012 |
Artesia Industrial Center |
| 26 |
| (d) |
|
| 163,764 |
|
|
| 217,400 |
|
|
| 41,082 |
|
|
| 178,700 |
|
|
| 243,546 |
|
|
| 422,246 |
|
|
| (38,492 | ) |
| 2011, 2015 |
Bell Ranch Distribution Center |
| 4 |
|
|
|
| 5,539 |
|
|
| 23,092 |
|
|
| 1,785 |
|
|
| 5,539 |
|
|
| 24,877 |
|
|
| 30,416 |
|
|
| (5,635 | ) |
| 2011 |
Brea Industrial Center |
| 1 |
|
|
|
| 2,488 |
|
|
| 4,062 |
|
|
| 467 |
|
|
| 2,488 |
|
|
| 4,529 |
|
|
| 7,017 |
|
|
| (888 | ) |
| 2012 |
California Commerce Center |
| 6 |
| (d) |
|
| 30,127 |
|
|
| 52,094 |
|
|
| 4,781 |
|
|
| 30,127 |
|
|
| 56,875 |
|
|
| 87,002 |
|
|
| (7,914 | ) |
| 2012, 2014, 2015 |
Carson Distribution Center |
| 2 |
| (d) |
|
| 29,974 |
|
|
| 22,483 |
|
|
| 17,531 |
|
|
| 29,975 |
|
|
| 40,013 |
|
|
| 69,988 |
|
|
| (3,568 | ) |
| 2011, 2015 |
Carson Industrial Center |
| 1 |
|
|
|
| 844 |
|
|
| 2,081 |
|
|
| 968 |
|
|
| 844 |
|
|
| 3,049 |
|
|
| 3,893 |
|
|
| (747 | ) |
| 2011 |
Carson Town Center |
| 2 |
|
|
|
| 11,781 |
|
|
| 31,572 |
|
|
| 1,287 |
|
|
| 11,781 |
|
|
| 32,859 |
|
|
| 44,640 |
|
|
| (5,899 | ) |
| 2011 |
CAT - Kaiser Commerce Center |
| 1 |
| (e) |
|
| 4,971 |
|
|
| - |
|
|
| 8,807 |
|
|
| 4,972 |
|
|
| 8,806 |
|
|
| 13,778 |
|
|
| (328 | ) |
| 2015 |
Cedarpointe Industrial Park |
| 9 |
| (d) |
|
| 56,349 |
|
|
| 105,792 |
|
|
| 1,518 |
|
|
| 56,349 |
|
|
| 107,310 |
|
|
| 163,659 |
|
|
| (7,316 | ) |
| 2012, 2015 |
Chartwell Distribution Center |
| 3 |
|
|
|
| 55,803 |
|
|
| 77,135 |
|
|
| 4,679 |
|
|
| 55,803 |
|
|
| 81,814 |
|
|
| 137,617 |
|
|
| (6,953 | ) |
| 2011, 2015 |
Chatsworth Distribution Center |
| 2 |
|
|
|
| 11,713 |
|
|
| 17,569 |
|
|
| 121 |
|
|
| 11,713 |
|
|
| 17,690 |
|
|
| 29,403 |
|
|
| (1,159 | ) |
| 2015 |
Chino Industrial Center |
| 4 |
|
|
|
| 850 |
|
|
| 1,274 |
|
|
| 8,338 |
|
|
| 9,178 |
|
|
| 1,284 |
|
|
| 10,462 |
|
|
| (1,161 | ) |
| 2012 |
Commerce Industrial Center |
| 1 |
|
|
|
| 11,345 |
|
|
| 17,653 |
|
|
| 2,415 |
|
|
| 11,345 |
|
|
| 20,068 |
|
|
| 31,413 |
|
|
| (3,274 | ) |
| 2012 |
Crossroads Business Park |
| 9 |
| (d) |
|
| 36,131 |
|
|
| 98,030 |
|
|
| 114,144 |
|
|
| 89,673 |
|
|
| 158,632 |
|
|
| 248,305 |
|
|
| (44,682 | ) |
| 2005, 2010, 2014 |
Del Amo Industrial Center |
| 1 |
|
|
|
| 7,471 |
|
|
| 17,889 |
|
|
| 386 |
|
|
| 7,471 |
|
|
| 18,275 |
|
|
| 25,746 |
|
|
| (4,291 | ) |
| 2011 |
Dominguez North Industrial Center |
| 6 |
| (d) |
|
| 20,662 |
|
|
| 34,382 |
|
|
| 4,723 |
|
|
| 20,688 |
|
|
| 39,079 |
|
|
| 59,767 |
|
|
| (9,587 | ) |
| 2007, 2012 |
Eaves Distribution Center |
| 3 |
|
|
|
| 13,914 |
|
|
| 31,041 |
|
|
| 2,748 |
|
|
| 13,914 |
|
|
| 33,789 |
|
|
| 47,703 |
|
|
| (8,308 | ) |
| 2011 |
Foothill Business Center |
| 3 |
|
|
|
| 5,254 |
|
|
| 8,096 |
|
|
| 322 |
|
|
| 5,254 |
|
|
| 8,418 |
|
|
| 13,672 |
|
|
| (1,437 | ) |
| 2012 |
Ford Distribution Center |
| 11 |
|
|
|
| 44,128 |
|
|
| 108,125 |
|
|
| 3,837 |
|
|
| 44,128 |
|
|
| 111,962 |
|
|
| 156,090 |
|
|
| (22,488 | ) |
| 2011, 2015 |
Fordyce Distribution Center |
| 1 |
|
|
|
| 6,110 |
|
|
| 19,485 |
|
|
| 910 |
|
|
| 6,110 |
|
|
| 20,395 |
|
|
| 26,505 |
|
|
| (5,266 | ) |
| 2011 |
Harris Business Center Alliance II |
| 9 |
|
|
|
| 13,134 |
|
|
| 66,195 |
|
|
| 3,076 |
|
|
| 13,134 |
|
|
| 69,271 |
|
|
| 82,405 |
|
|
| (14,258 | ) |
| 2011 |
Haven Distribution Center |
| 4 |
| (d) |
|
| 96,975 |
|
|
| 73,903 |
|
|
| 8,385 |
|
|
| 96,975 |
|
|
| 82,288 |
|
|
| 179,263 |
|
|
| (18,460 | ) |
| 2008 |
Huntington Beach Distribution Center |
| 1 |
|
|
|
| 14,679 |
|
|
| 22,019 |
|
|
| 794 |
|
|
| 14,679 |
|
|
| 22,813 |
|
|
| 37,492 |
|
|
| (981 | ) |
| 2015 |
Industry Distribution Center |
| 8 |
| (e) |
|
| 54,170 |
|
|
| 99,434 |
|
|
| 8,623 |
|
|
| 54,170 |
|
|
| 108,057 |
|
|
| 162,227 |
|
|
| (40,067 | ) |
| 2005, 2012 |
Inland Empire Distribution Center |
| 6 |
|
|
|
| 43,320 |
|
|
| 84,006 |
|
|
| 8,410 |
|
|
| 44,100 |
|
|
| 91,636 |
|
|
| 135,736 |
|
|
| (26,974 | ) |
| 2005, 2012, 2015 |
Jack Northrup Distribution Center |
| 1 |
|
|
|
| 4,280 |
|
|
| 9,820 |
|
|
| 53 |
|
|
| 4,280 |
|
|
| 9,873 |
|
|
| 14,153 |
|
|
| (493 | ) |
| 2015 |
Kaiser Distribution Center |
| 8 |
| (d)(e) |
|
| 131,819 |
|
|
| 242,618 |
|
|
| 16,957 |
|
|
| 136,030 |
|
|
| 255,364 |
|
|
| 391,394 |
|
|
| (92,994 | ) |
| 2005, 2008 |
LAX Cargo Center |
| 3 |
|
|
|
| - |
|
|
| 19,217 |
|
|
| 379 |
|
|
| - |
|
|
| 19,596 |
|
|
| 19,596 |
|
|
| (7,520 | ) |
| 2011 |
Los Angeles Industrial Center |
| 2 |
|
|
|
| 3,777 |
|
|
| 7,015 |
|
|
| 378 |
|
|
| 3,777 |
|
|
| 7,393 |
|
|
| 11,170 |
|
|
| (2,965 | ) |
| 2005 |
Main St Distribution Center |
| 1 |
|
|
|
| 13,058 |
|
|
| 20,370 |
|
|
| 853 |
|
|
| 13,058 |
|
|
| 21,223 |
|
|
| 34,281 |
|
|
| (1,132 | ) |
| 2015 |
Meridian Park |
| 2 |
|
|
|
| 38,270 |
|
|
| 70,022 |
|
|
| 1,044 |
|
|
| 38,270 |
|
|
| 71,066 |
|
|
| 109,336 |
|
|
| (9,381 | ) |
| 2008, 2015 |
Mid Counties Industrial Center |
| 18 |
| (d) |
|
| 55,436 |
|
|
| 96,453 |
|
|
| 16,685 |
|
|
| 55,437 |
|
|
| 113,137 |
|
|
| 168,574 |
|
|
| (43,364 | ) |
| 2005, 2006, 2010, 2012 |
Mill Street Distribution Center |
| 1 |
| (d) |
|
| 1,825 |
|
|
| 4,306 |
|
|
| (1 | ) |
|
| 1,825 |
|
|
| 4,305 |
|
|
| 6,130 |
|
|
| (363 | ) |
| 2014 |
Mill Street Spec Distribution Center |
| 1 |
| (d) |
|
| 15,691 |
|
|
| 36,550 |
|
|
| 188 |
|
|
| 15,691 |
|
|
| 36,738 |
|
|
| 52,429 |
|
|
| (2,999 | ) |
| 2014 |
107
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
El Puente Industrial Center | 2 | 1,906 | 5,823 | 1,923 | 1,889 | 7,763 | 9,652 | (1,639 | ) | 2008 | ||||||||||||||||||||||||||||
El Salto Distribution Center | 2 | (d | ) | 4,473 | 6,159 | 2,215 | 4,449 | 8,398 | 12,847 | (903 | ) | 2008 | ||||||||||||||||||||||||||
Encino Distribution Ctr. SGP | 1 | (d | ) | 9,052 | 36,822 | 803 | 9,206 | 37,471 | 46,677 | (380 | ) | 2013 | ||||||||||||||||||||||||||
Frontera Dist. Center | 1 | 1,619 | 6,475 | (5 | ) | 1,619 | 6,470 | 8,089 | (130 | ) | 2013 | |||||||||||||||||||||||||||
Iztapalapa Distribution Center | 1 | 1,287 | 7,294 | 1,660 | 1,287 | 8,954 | 10,241 | (338 | ) | 2012 | ||||||||||||||||||||||||||||
Libramiento Aeropuerto | 2 | 1,614 | 7,028 | 1,801 | 1,614 | 8,829 | 10,443 | (579 | ) | 2012 | ||||||||||||||||||||||||||||
Los Altos Ind Park | 4 | (d | ) | 8,026 | 26,300 | 16,755 | 8,026 | 43,055 | 51,081 | (2,798 | ) | 2011, 2012 | ||||||||||||||||||||||||||
Los Altos Industrial Park | 4 | (d | ) | 11,276 | 45,102 | 842 | 11,276 | 45,944 | 57,220 | (601 | ) | 2013 | ||||||||||||||||||||||||||
Mezquite Dist SGP | 2 | (d | ) | 5,039 | 20,157 | 260 | 5,039 | 20,417 | 25,456 | (219 | ) | 2013 | ||||||||||||||||||||||||||
Mezquite III prefund | 1 | (d | ) | 906 | 14,419 | 294 | 906 | 14,713 | 15,619 | (1,653 | ) | 2011 | ||||||||||||||||||||||||||
Monterrey Airport | 4 | (d | ) | 12,826 | 12,878 | 21,546 | 12,781 | 34,469 | 47,250 | (3,329 | ) | 2007, 2008, 2013 | ||||||||||||||||||||||||||
Monterrey Industrial Park | 8 | (d | ) | 12,079 | 32,861 | 2,718 | 12,409 | 35,249 | 47,658 | (2,135 | ) | 1997, 2011 | ||||||||||||||||||||||||||
Nor-T Distribution Center | 4 | 7,247 | 32,135 | 6,430 | 5,898 | 39,914 | 45,812 | (9,701 | ) | 2006 | ||||||||||||||||||||||||||||
Ojo de Agua Ind Ctr | 1 | (d | ) | 1,826 | 11,447 | 1,223 | 1,826 | 12,670 | 14,496 | (882 | ) | 2011 | ||||||||||||||||||||||||||
Pacifico Distr Ctr | 4 | 2,886 | 14,736 | 270 | 2,886 | 15,006 | 17,892 | (1,990 | ) | 2011 | ||||||||||||||||||||||||||||
Palma 1 Dist. Ctr. | 1 | 1,972 | 4,888 | 262 | 1,972 | 5,150 | 7,122 | (689 | ) | 2011 | ||||||||||||||||||||||||||||
Parque Opcion | 1 | 730 | 2,287 | 1,362 | 730 | 3,649 | 4,379 | (363 | ) | 2011 | ||||||||||||||||||||||||||||
Periferico Sur Industrial Park | 2 | 3,058 | 13,926 | 12 | 3,058 | 13,938 | 16,996 | (200 | ) | 2012, 2013 | ||||||||||||||||||||||||||||
Pharr Bridge Industrial Center | 3 | �� | 6,466 | 14,501 | 16,980 | 6,530 | 31,417 | 37,947 | (3,614 | ) | 2008, 2009, 2012 | |||||||||||||||||||||||||||
Piracanto Ind Park | 4 | 11,646 | 33,660 | 276 | 11,646 | 33,936 | 45,582 | (2,863 | ) | 2011 | ||||||||||||||||||||||||||||
ProLogis Park Alamar | 3 | 20,540 | 17,081 | 290 | 20,536 | 17,375 | 37,911 | (2,104 | ) | 2008 | ||||||||||||||||||||||||||||
Puente Grande Distribution Center | 2 | (d | ) | 14,975 | 6,813 | 14,938 | 14,889 | 21,837 | 36,726 | (3,011 | ) | 2008, 2009 | ||||||||||||||||||||||||||
Ramon Rivera Lara Industrial Center | 1 | 444 | - | 4,672 | 2,269 | 2,847 | 5,116 | (1,029 | ) | 2000 | ||||||||||||||||||||||||||||
Reynosa Ind Ctr | 1 | 756 | 3,309 | 1,047 | 756 | 4,356 | 5,112 | (284 | ) | 2012 | ||||||||||||||||||||||||||||
Reynosa Ind Ctr III | 4 | 3,251 | 14,111 | 3,668 | 3,251 | 17,779 | 21,030 | (1,199 | ) | 2012 | ||||||||||||||||||||||||||||
Tijuana Ind Ctr Iilam | 1 | 1,388 | 5,918 | 2,483 | 1,388 | 8,401 | 9,789 | (516 | ) | 2012 | ||||||||||||||||||||||||||||
Tijuana Infd Ctr | 9 | 10,228 | 43,963 | 11,892 | 10,228 | 55,855 | 66,083 | (3,756 | ) | 2012 | ||||||||||||||||||||||||||||
Toluca Distribution Center | 1 | (d | ) | 7,952 | - | 16,414 | 7,952 | 16,414 | 24,366 | (1,850 | ) | 2009 | ||||||||||||||||||||||||||
Tres Rios | 7 | (d | ) | 31,284 | 73,124 | 17,020 | 32,650 | 88,778 | 121,428 | (1,908 | ) | 2011, 2012, 2013 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Mexico | 117 | 276,104 | 774,990 | 203,076 | 279,275 | 974,895 | 1,254,170 | (70,276 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Airport Rd. Dist Ctr | 1 | 28,401 | 79,901 | 2,516 | 29,683 | 81,135 | 110,818 | (6,155 | ) | 2011 | ||||||||||||||||||||||||||||
Annagem Dist. Center | 1 | 3,831 | 13,104 | 864 | 4,004 | 13,795 | 17,799 | (1,088 | ) | 2011 | ||||||||||||||||||||||||||||
Annagem Distrib Centre II | 1 | 2,157 | 5,527 | 755 | 2,254 | 6,185 | 8,439 | �� | (556 | ) | 2011 | |||||||||||||||||||||||||||
Bolton Distribution Center | 1 | 8,681 | - | 27,006 | 9,073 | 26,614 | 35,687 | (2,423 | ) | 2009 | ||||||||||||||||||||||||||||
Keele Distribution Center | 1 | 1,349 | 5,414 | 328 | 1,410 | 5,681 | 7,091 | (602 | ) | 2011 | ||||||||||||||||||||||||||||
Millcreek Distribution Ctr | 2 | 9,397 | 35,745 | 758 | 9,821 | 36,079 | 45,900 | (2,832 | ) | 2011 | ||||||||||||||||||||||||||||
Milton 401 Bus. Park | 1 | 7,331 | 24,017 | 2,417 | 7,661 | 26,104 | 33,765 | (2,011 | ) | 2011 | ||||||||||||||||||||||||||||
Milton 402 Bus Park | 1 | 6,821 | 20,407 | 360 | 7,129 | 20,459 | 27,588 | (1,591 | ) | 2011 | ||||||||||||||||||||||||||||
Milton Crossings Bus Pk | 2 | 21,411 | 52,116 | 3,824 | 22,377 | 54,974 | 77,351 | (4,220 | ) | 2011 | ||||||||||||||||||||||||||||
Mississauga Gateway Center | 1 | 2,188 | 7,601 | 718 | 2,487 | 8,020 | 10,507 | (1,313 | ) | 2008 | ||||||||||||||||||||||||||||
Pearson Logist. Ctr | 2 | 13,659 | 48,963 | 1,417 | 14,276 | 49,763 | 64,039 | (3,759 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Canada | 14 | 105,226 | 292,795 | 40,963 | 110,175 | 328,809 | 438,984 | (26,550 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal Americas Markets: | 1,537 | 3,540,004 | 10,518,616 | 2,203,486 | 3,641,348 | 12,620,758 | 16,262,106 | (2,432,849 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
European Markets: | ||||||||||||||||||||||||||||||||||||||
Austria | ||||||||||||||||||||||||||||||||||||||
Himberg DC | 1 | 4,219 | - | 6,669 | 4,232 | 6,656 | 10,888 | (462 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Austria | 1 | 4,219 | - | 6,669 | 4,232 | 6,656 | 10,888 | (462 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Belgium | ||||||||||||||||||||||||||||||||||||||
Boom Distribution Ct | 1 | 15,530 | 20,989 | 73 | 15,530 | 21,062 | 36,592 | (1,702 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Belgium | 1 | 15,530 | 20,989 | 73 | 15,530 | 21,062 | 36,592 | (1,702 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Czech Republic | ||||||||||||||||||||||||||||||||||||||
Uzice Distribution Center | 1 | 3,068 | - | 22,631 | 3,131 | 22,568 | 25,699 | (3,310 | ) | 2007 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Czech Republic | 1 | 3,068 | - | 22,631 | 3,131 | 22,568 | 25,699 | (3,310 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
France | ||||||||||||||||||||||||||||||||||||||
Bonneuil Distribution Center | 1 | - | - | 17,947 | - | 17,947 | 17,947 | (3,533 | ) | 2012 | ||||||||||||||||||||||||||||
Isle d’Abeau Distribution Center | 1 | 3,607 | 16,184 | 3,891 | 4,921 | 18,761 | 23,682 | (2,159 | ) | 2011 | ||||||||||||||||||||||||||||
LGR Genevill. 1 SAS | 1 | 2,541 | 2,757 | 918 | 2,541 | 3,675 | 6,216 | (263 | ) | 2011 | ||||||||||||||||||||||||||||
LGR Genevill. 2 SAS | 1 | 1,954 | 4,049 | 21 | 1,954 | 4,070 | 6,024 | (283 | ) | 2011 | ||||||||||||||||||||||||||||
Port of Rouen | 1 | - | 17,584 | 100 | - | 17,684 | 17,684 | (1,676 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
France | 5 | 8,102 | 40,574 | 22,877 | 9,416 | 62,137 | 71,553 | (7,914 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Germany | ||||||||||||||||||||||||||||||||||||||
Hausbruch Ind Ctr 4-B | 1 | 9,421 | 6,128 | 148 | 9,421 | 6,276 | 15,697 | (1,289 | ) | 2011 | ||||||||||||||||||||||||||||
Hausbruch Ind Ctr 5-650 | 1 | 3,392 | 523 | 48 | 3,392 | 571 | 3,963 | (80 | ) | 2011 |
|
|
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
|
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | ||||||||
Milliken Distribution Center |
| 1 |
|
|
|
|
| 18,831 |
|
|
| 30,811 |
|
|
| 232 |
|
|
| 18,831 |
|
|
| 31,043 |
|
|
| 49,874 |
|
|
| (5,888 | ) |
| 2012 | |
NDP - Los Angeles |
| 5 |
|
|
|
|
| 14,855 |
|
|
| 41,115 |
|
|
| 3,529 |
|
|
| 14,855 |
|
|
| 44,644 |
|
|
| 59,499 |
|
|
| (10,837 | ) |
| 2011 | |
Normandie Industrial Center |
| 1 |
|
|
|
|
| 12,297 |
|
|
| 14,957 |
|
|
| 1,989 |
|
|
| 12,297 |
|
|
| 16,946 |
|
|
| 29,243 |
|
|
| (4,317 | ) |
| 2011 | |
North County Distribution Center |
| 4 |
|
|
|
|
| 75,581 |
|
|
| 101,342 |
|
|
| 10,236 |
|
|
| 75,581 |
|
|
| 111,578 |
|
|
| 187,159 |
|
|
| (17,449 | ) |
| 2011, 2012, 2015 | |
Ontario Distribution Center |
| 1 |
|
|
|
|
| 18,823 |
|
|
| 29,524 |
|
|
| 482 |
|
|
| 18,823 |
|
|
| 30,006 |
|
|
| 48,829 |
|
|
| (5,341 | ) |
| 2012 | |
Orange Industrial Center |
| 2 |
|
|
|
|
| 19,296 |
|
|
| 9,514 |
|
|
| 706 |
|
|
| 4,157 |
|
|
| 25,359 |
|
|
| 29,516 |
|
|
| (3,172 | ) |
| 2005, 2016 | |
Pacific Business Center |
| 5 |
|
|
|
|
| 20,810 |
|
|
| 32,169 |
|
|
| 3,170 |
|
|
| 20,810 |
|
|
| 35,339 |
|
|
| 56,149 |
|
|
| (6,205 | ) |
| 2012 | |
Pomona Distribution Center |
| 1 |
|
| (d) |
|
| 22,361 |
|
|
| 27,898 |
|
|
| 205 |
|
|
| 22,361 |
|
|
| 28,103 |
|
|
| 50,464 |
|
|
| (2,519 | ) |
| 2015 | |
ProLogis Park Ontario |
| 2 |
|
| (d) |
|
| 25,499 |
|
|
| 47,366 |
|
|
| 1,283 |
|
|
| 25,499 |
|
|
| 48,649 |
|
|
| 74,148 |
|
|
| (15,843 | ) |
| 2007 | |
Rancho Cucamonga Distribution Center |
| 6 |
|
| (d)(e) |
|
| 58,710 |
|
|
| 113,273 |
|
|
| 5,079 |
|
|
| 58,711 |
|
|
| 118,351 |
|
|
| 177,062 |
|
|
| (34,842 | ) |
| 2005, 2015 | |
Redlands Commerce Center |
| 1 |
|
| (d) |
|
| 20,583 |
|
|
| 30,881 |
|
|
| 13 |
|
|
| 20,583 |
|
|
| 30,894 |
|
|
| 51,477 |
|
|
| (2,552 | ) |
| 2014 | |
Redlands Distribution Center |
| 12 |
|
| (d) |
|
| 156,478 |
|
|
| 120,920 |
|
|
| 200,028 |
|
|
| 154,454 |
|
|
| 322,972 |
|
|
| 477,426 |
|
|
| (32,938 | ) |
| 2006, 2007, 2012, 2013, 2014, 2015 | |
Redondo Beach Distribution Center |
| 1 |
|
|
|
|
| 7,455 |
|
|
| 11,223 |
|
|
| 72 |
|
|
| 7,455 |
|
|
| 11,295 |
|
|
| 18,750 |
|
|
| (934 | ) |
| 2015 | |
Rialto Distribution Center |
| 5 |
|
| (d) |
|
| 86,270 |
|
|
| 200,602 |
|
|
| 33,564 |
|
|
| 88,648 |
|
|
| 231,788 |
|
|
| 320,436 |
|
|
| (30,989 | ) |
| 2012, 2014, 2015 | |
Riverbluff Distribution Center |
| 1 |
|
| (d) |
|
| 42,964 |
|
|
| - |
|
|
| 33,014 |
|
|
| 42,964 |
|
|
| 33,014 |
|
|
| 75,978 |
|
|
| (8,401 | ) |
| 2009 | |
Santa Ana Distribution Center |
| 3 |
|
|
|
|
| 27,070 |
|
|
| 32,168 |
|
|
| 1,253 |
|
|
| 27,070 |
|
|
| 33,421 |
|
|
| 60,491 |
|
|
| (4,699 | ) |
| 2005, 2015 | |
Santa Fe Distribution Center |
| 1 |
|
|
|
|
| 12,163 |
|
|
| 9,927 |
|
|
| 84 |
|
|
| 12,163 |
|
|
| 10,011 |
|
|
| 22,174 |
|
|
| (664 | ) |
| 2015 | |
Slover Distribution Center |
| 4 |
|
| (d) |
|
| 40,335 |
|
|
| 45,492 |
|
|
| 386 |
|
|
| 40,335 |
|
|
| 45,878 |
|
|
| 86,213 |
|
|
| (2,319 | ) |
| 2015 | |
South Bay Distribution Center |
| 4 |
|
| (d) |
|
| 14,478 |
|
|
| 27,511 |
|
|
| 6,608 |
|
|
| 15,280 |
|
|
| 33,317 |
|
|
| 48,597 |
|
|
| (12,633 | ) |
| 2005, 2007 | |
South Bay Transport |
| 1 |
|
|
|
|
| 15,928 |
|
|
| 23,891 |
|
|
| 106 |
|
|
| 15,928 |
|
|
| 23,997 |
|
|
| 39,925 |
|
|
| (630 | ) |
| 2015 | |
Starboard Distribution Center |
| 1 |
|
|
|
|
| 18,763 |
|
|
| 53,824 |
|
|
| 386 |
|
|
| 18,763 |
|
|
| 54,210 |
|
|
| 72,973 |
|
|
| (10,725 | ) |
| 2011 | |
Terra Francesco |
| 1 |
|
|
|
|
| 11,196 |
|
|
| - |
|
|
| 15,673 |
|
|
| 11,196 |
|
|
| 15,673 |
|
|
| 26,869 |
|
|
| (582 | ) |
| 2012 | |
Torrance Distribution Center |
| 1 |
|
|
|
|
| 25,730 |
|
|
| 40,414 |
|
|
| 1,134 |
|
|
| 25,730 |
|
|
| 41,548 |
|
|
| 67,278 |
|
|
| (7,211 | ) |
| 2012 | |
Transpark Inland Empire Distribution Center |
| 1 |
|
|
|
|
| 28,936 |
|
|
| 42,167 |
|
|
| 578 |
|
|
| 28,936 |
|
|
| 42,745 |
|
|
| 71,681 |
|
|
| (3,339 | ) |
| 2014 | |
Van Nuys Airport Industrial Center |
| 4 |
|
|
|
|
| 23,455 |
|
|
| 39,916 |
|
|
| 2,860 |
|
|
| 23,455 |
|
|
| 42,776 |
|
|
| 66,231 |
|
|
| (8,225 | ) |
| 2011 | |
Vernon Distribution Center |
| 14 |
|
|
|
|
| 23,998 |
|
|
| 44,529 |
|
|
| 4,788 |
|
|
| 24,000 |
|
|
| 49,315 |
|
|
| 73,315 |
|
|
| (19,476 | ) |
| 2005 | |
Vernon Industrial Center |
| 2 |
|
|
|
|
| 3,626 |
|
|
| 3,319 |
|
|
| 692 |
|
|
| 4,121 |
|
|
| 3,516 |
|
|
| 7,637 |
|
|
| (2,993 | ) |
| 2011 | |
Vista Distribution Center |
| 1 |
|
|
|
|
| 4,150 |
|
|
| 6,225 |
|
|
| 3,933 |
|
|
| 4,150 |
|
|
| 10,158 |
|
|
| 14,308 |
|
|
| (3,274 | ) |
| 2012 | |
Walnut Drive |
| 1 |
|
|
|
|
| 2,665 |
|
|
| 7,397 |
|
|
| 218 |
|
|
| 2,665 |
|
|
| 7,615 |
|
|
| 10,280 |
|
|
| (1,544 | ) |
| 2011 | |
Watson Industrial Center AFdII |
| 1 |
|
|
|
|
| 6,944 |
|
|
| 11,193 |
|
|
| 398 |
|
|
| 6,944 |
|
|
| 11,591 |
|
|
| 18,535 |
|
|
| (2,345 | ) |
| 2011 | |
Wilmington Avenue Warehouse |
| 2 |
|
|
|
|
| 11,172 |
|
|
| 34,723 |
|
|
| 2,952 |
|
|
| 11,172 |
|
|
| 37,675 |
|
|
| 48,847 |
|
|
| (7,616 | ) |
| 2011 | |
Workman Mill Distribution Center |
| 1 |
|
|
|
|
| 32,467 |
|
|
| 56,672 |
|
|
| 768 |
|
|
| 32,470 |
|
|
| 57,437 |
|
|
| 89,907 |
|
|
| (2,505 | ) |
| 2015 | |
Southern California |
| 271 |
|
|
|
|
| 1,961,383 |
|
|
| 3,136,328 |
|
|
| 628,810 |
|
|
| 2,029,727 |
|
|
| 3,696,794 |
|
|
| 5,726,521 |
|
|
| (743,593 | ) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tampa, Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Center Tampa |
| 6 |
|
|
|
|
| 4,458 |
|
|
| 19,166 |
|
|
| (429 | ) |
|
| 4,458 |
|
|
| 18,737 |
|
|
| 23,195 |
|
|
| (1,143 | ) |
| 2015 | |
Tampa, Florida |
| 6 |
|
|
|
|
| 4,458 |
|
|
| 19,166 |
|
|
| (429 | ) |
|
| 4,458 |
|
|
| 18,737 |
|
|
| 23,195 |
|
|
| (1,143 | ) |
|
| |
Subtotal United States: |
|
| 1,699 |
|
|
|
|
| 5,620,515 |
|
|
| 13,772,631 |
|
|
| 3,182,003 |
|
|
| 5,710,671 |
|
|
| 16,864,478 |
|
|
| 22,575,149 |
|
|
| (3,521,641 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toronto |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airport Road Distribution Center |
| 1 |
|
| (d) |
|
| 22,447 |
|
|
| 63,150 |
|
|
| 2,165 |
|
|
| 23,461 |
|
|
| 64,301 |
|
|
| 87,762 |
|
|
| (10,661 | ) |
| 2011 | |
Annagem Distribution Center |
| 1 |
|
|
|
|
| 3,028 |
|
|
| 10,357 |
|
|
| 763 |
|
|
| 3,164 |
|
|
| 10,984 |
|
|
| 14,148 |
|
|
| (1,870 | ) |
| 2011 | |
Annagem Distribution Center II |
| 1 |
|
|
|
|
| 1,705 |
|
|
| 4,368 |
|
|
| 1,238 |
|
|
| 1,782 |
|
|
| 5,529 |
|
|
| 7,311 |
|
|
| (945 | ) |
| 2011 | |
Bolton Distribution Center |
| 1 |
|
| (d) |
|
| 6,861 |
|
|
| - |
|
|
| 21,418 |
|
|
| 7,171 |
|
|
| 21,108 |
|
|
| 28,279 |
|
|
| (3,943 | ) |
| 2009 | |
Keele Distribution Center |
| 1 |
|
|
|
|
| 1,066 |
|
|
| 4,279 |
|
|
| 515 |
|
|
| 1,115 |
|
|
| 4,745 |
|
|
| 5,860 |
|
|
| (1,214 | ) |
| 2011 | |
Meadowvale Distribution Center |
| 2 |
|
| (d) |
|
| 31,136 |
|
|
| - |
|
|
| 47,244 |
|
|
| 31,718 |
|
|
| 46,662 |
|
|
| 78,380 |
|
|
| (2,118 | ) |
| 2014 | |
Millcreek Distribution Center |
| 2 |
|
|
|
|
| 7,427 |
|
|
| 28,251 |
|
|
| 850 |
|
|
| 7,762 |
|
|
| 28,766 |
|
|
| 36,528 |
|
|
| (4,873 | ) |
| 2011 | |
Milton 401 Business Park |
| 1 |
|
|
|
|
| 5,794 |
|
|
| 18,982 |
|
|
| 3,080 |
|
|
| 6,055 |
|
|
| 21,801 |
|
|
| 27,856 |
|
|
| (4,627 | ) |
| 2011 | |
Milton 402 Business Park |
| 3 |
|
| (d) |
|
| 11,960 |
|
|
| 32,582 |
|
|
| 8,882 |
|
|
| 12,262 |
|
|
| 41,162 |
|
|
| 53,424 |
|
|
| (4,193 | ) |
| 2011, 2014, 2016 | |
Milton Crossings Business Park |
| 2 |
|
|
|
|
| 16,922 |
|
|
| 41,190 |
|
|
| 4,588 |
|
|
| 17,686 |
|
|
| 45,014 |
|
|
| 62,700 |
|
|
| (7,437 | ) |
| 2011 | |
Mississauga Gateway Center |
| 7 |
|
| (d) |
|
| 51,330 |
|
|
| 118,855 |
|
|
| 532 |
|
|
| 51,673 |
|
|
| 119,044 |
|
|
| 170,717 |
|
|
| (9,989 | ) |
| 2008, 2014, 2016 | |
Pearson Logistics Center |
| 2 |
|
| (d) |
|
| 10,796 |
|
|
| 38,698 |
|
|
| 1,526 |
|
|
| 11,283 |
|
|
| 39,737 |
|
|
| 51,020 |
|
|
| (6,650 | ) |
| 2011 | |
Tapscott Distribution Center |
| 1 |
|
|
|
|
| 4,571 |
|
|
| - |
|
|
| 6,302 |
|
|
| 3,368 |
|
|
| 7,505 |
|
|
| 10,873 |
|
|
| (241 | ) |
| 2015 | |
Toronto |
| 25 |
|
|
|
|
| 175,043 |
|
|
| 360,712 |
|
|
| 99,103 |
|
|
| 178,500 |
|
|
| 456,358 |
|
|
| 634,858 |
|
|
| (58,761 | ) |
|
| |
Subtotal Canada: |
| 25 |
|
|
|
|
| 175,043 |
|
|
| 360,712 |
|
|
| 99,103 |
|
|
| 178,500 |
|
|
| 456,358 |
|
|
| 634,858 |
|
|
| (58,761 | ) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guadalajara |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parque Opcion |
| 1 |
|
|
|
|
| 730 |
|
|
| 2,287 |
|
|
| 1,362 |
|
|
| 730 |
|
|
| 3,649 |
|
|
| 4,379 |
|
|
| (802 | ) |
| 2011 | |
Guadalajara |
| 1 |
|
|
|
|
| 730 |
|
|
| 2,287 |
|
|
| 1,362 |
|
|
| 730 |
|
|
| 3,649 |
|
|
| 4,379 |
|
|
| (802 | ) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Huenxe Dist Ctr | 1 | 2,342 | - | 10,596 | 1,803 | 11,135 | 12,938 | (365 | ) | 2012 | ||||||||||||||||||||||||||||
Kolleda Distribution Center | 1 | 292 | 4,514 | (361 | ) | 292 | 4,153 | 4,445 | (480 | ) | 2008 | |||||||||||||||||||||||||||
Lauenau Dist Ctr | 1 | 3,162 | 7,039 | 84 | 3,162 | 7,123 | 10,285 | (688 | ) | 2011 | ||||||||||||||||||||||||||||
Martinszehnten Dist Ctr | 1 | 5,528 | 8,099 | 110 | 5,528 | 8,209 | 13,737 | (852 | ) | 2011 | ||||||||||||||||||||||||||||
Meerane Distribution Center | 1 | 779 | 5,990 | (273 | ) | 779 | 5,717 | 6,496 | (615 | ) | 2008 | |||||||||||||||||||||||||||
Muggensturm | 2 | 4,013 | 16,275 | 98 | 4,013 | 16,373 | 20,386 | (1,594 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Germany | 9 | 28,929 | 48,568 | 10,450 | 28,390 | 59,557 | 87,947 | (5,963 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Hungary | ||||||||||||||||||||||||||||||||||||||
Budapest-Sziget Dist. Center | 1 | 2,897 | 9,959 | (693 | ) | 2,940 | 9,223 | 12,163 | (1,016 | ) | 2008 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Hungary | 1 | 2,897 | 9,959 | (693 | ) | 2,940 | 9,223 | 12,163 | (1,016 | ) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Italy | ||||||||||||||||||||||||||||||||||||||
Arena Po Dist Ctr | 2 | 9,400 | 25,443 | 118 | 9,400 | 25,561 | 34,961 | (3,217 | ) | 2011 | ||||||||||||||||||||||||||||
Castel San Giovanni Dist Ctr | 1 | 3,906 | 11,928 | 176 | 3,906 | 12,104 | 16,010 | (1,267 | ) | 2011 | ||||||||||||||||||||||||||||
Siziano Logis Park | 1 | 12,478 | 22,621 | 773 | 12,478 | 23,394 | 35,872 | (1,972 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Italy | 4 | 25,784 | 59,992 | 1,067 | 25,784 | 61,059 | 86,843 | (6,456 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Poland | ||||||||||||||||||||||||||||||||||||||
Nadarzyn Distribution Center | 1 | 2,852 | - | 8,773 | 2,852 | 8,773 | 11,625 | (990 | ) | 2009 | ||||||||||||||||||||||||||||
Piotrkow II Distribution Center | 1 | 1,855 | - | 6,321 | 1,806 | 6,370 | 8,176 | (850 | ) | 2009 | ||||||||||||||||||||||||||||
Sochaczew Distribution Center. | 2 | 151 | 13,400 | 2,190 | 873 | 14,868 | 15,741 | (2,288 | ) | 2008 | ||||||||||||||||||||||||||||
Teresin Dist Ctr | 2 | 3,856 | 20,150 | 1,164 | 4,558 | 20,612 | 25,170 | (2,136 | ) | 2011 | ||||||||||||||||||||||||||||
Wroclaw V DC | 2 | 5,378 | - | 18,912 | 5,378 | 18,912 | 24,290 | (175 | ) | 2013 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Poland | 8 | 14,092 | 33,550 | 37,360 | 15,467 | 69,535 | 85,002 | (6,439 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Romania | ||||||||||||||||||||||||||||||||||||||
Bucharest Distribution Center | 4 | 7,959 | 34,792 | 13,118 | 9,948 | 45,921 | 55,869 | (7,208 | ) | 2007, 2008 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Romania | 4 | 7,959 | 34,792 | 13,118 | 9,948 | 45,921 | 55,869 | (7,208 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Slovakia | ||||||||||||||||||||||||||||||||||||||
Bratislava Distribution Center | 1 | 2,718 | - | 12,051 | 2,718 | 12,051 | 14,769 | - | 2012 | |||||||||||||||||||||||||||||
Sered Distribution Center | 1 | 2,754 | - | 14,889 | 2,754 | 14,889 | 17,643 | (1,611 | ) | 2009 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Slovakia | 2 | 5,472 | - | 26,940 | 5,472 | 26,940 | 32,412 | (1,611 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Spain | ||||||||||||||||||||||||||||||||||||||
Barajas MAD Logistics | 4 | - | 44,613 | 1,066 | - | 45,679 | 45,679 | (4,603 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Spain | 4 | - | 44,613 | 1,066 | - | 45,679 | 45,679 | (4,603 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Sweden | ||||||||||||||||||||||||||||||||||||||
Orebro Dist Ctr | 1 | 11,432 | 24,994 | 1,981 | 11,432 | 26,975 | 38,407 | (3,774 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Sweden | 1 | 11,432 | 24,994 | 1,981 | 11,432 | 26,975 | 38,407 | (3,774 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
United Kingdom | ||||||||||||||||||||||||||||||||||||||
Midpoint Park | 2 | 33,297 | 12,800 | 18,281 | 33,331 | 31,047 | 64,378 | (1,184 | ) | 2008, 2013 | ||||||||||||||||||||||||||||
North Kettering Bus Pk | 1 | 2,673 | 7,935 | 8,364 | 4,684 | 14,288 | 18,972 | (3,273 | ) | 2007 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
United Kingdom | 3 | 35,970 | 20,735 | 26,645 | 38,015 | 45,335 | 83,350 | (4,457 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal European Markets: | 44 | 163,454 | 338,766 | 170,184 | 169,757 | 502,647 | 672,404 | (54,915 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Asian Markets: | ||||||||||||||||||||||||||||||||||||||
China | ||||||||||||||||||||||||||||||||||||||
Dalian Ind. Park DC | 1 | 2,547 | 14,596 | 145 | 2,511 | 14,777 | 17,288 | (1,053 | ) | 2011 | ||||||||||||||||||||||||||||
Fengxian Logistics C | 3 | - | 13,823 | 368 | - | 14,191 | 14,191 | (2,537 | ) | 2011 | ||||||||||||||||||||||||||||
Jiaxing Distri Ctr | 3 | 9,404 | 11,145 | 10,892 | 9,287 | 22,154 | 31,441 | (967 | ) | 2011, 2013 | ||||||||||||||||||||||||||||
Tianjin Bonded LP | 2 | 1,570 | 9,519 | 98 | 1,546 | 9,641 | 11,187 | (782 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
China | 9 | 13,521 | 49,083 | 11,503 | 13,344 | 60,763 | 74,107 | (5,339 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Japan | ||||||||||||||||||||||||||||||||||||||
Amagasaki DC 2 (fund) | 1 | (d | ) | 24,257 | - | 34,470 | 24,257 | 34,470 | 58,727 | (225 | ) | 2013 | ||||||||||||||||||||||||||
Chiba DC 1 | 1 | 1,294 | 1,621 | - | 1,294 | 1,621 | 2,915 | (47 | ) | 2013 | ||||||||||||||||||||||||||||
Ebina Distribution Center | 1 | 50,235 | - | 30,341 | 50,235 | 30,341 | 80,576 | (2,847 | ) | 2010 | ||||||||||||||||||||||||||||
Funabashi DC 7 | 1 | 4,217 | 18,278 | 4,217 | 18,278 | 22,495 | (533 | ) | 2013 | |||||||||||||||||||||||||||||
Funabashi DC 8 | 1 | 5,055 | 8,930 | 212 | 5,055 | 9,142 | 14,197 | (293 | ) | 2013 | ||||||||||||||||||||||||||||
Funabashi Dist Cntr 2 Nishiura | 1 | 3,249 | 3,176 | - | 3,249 | 3,176 | 6,425 | (93 | ) | 2013 | ||||||||||||||||||||||||||||
Funabashi Dist Cntr Shiomi | 1 | 9,513 | 16,746 | - | 9,513 | 16,746 | 26,259 | (488 | ) | 2013 | ||||||||||||||||||||||||||||
Kawanishi Distribution Center | 1 | 26,304 | - | 59,588 | 26,304 | 59,588 | 85,892 | (2,067 | ) | 2013 | ||||||||||||||||||||||||||||
Kobe Distribution Center | 1 | 9,896 | - | 28,347 | 9,896 | 28,347 | 38,243 | (61 | ) | 2013 | ||||||||||||||||||||||||||||
Narashino DC 1 | 1 | 3,996 | 10,399 | - | 3,996 | 10,399 | 14,395 | (303 | ) | 2013 | ||||||||||||||||||||||||||||
ProLogis Park Aichi Distribution Center | 1 | 21,006 | - | 80,107 | 28,146 | 72,967 | 101,113 | (10,295 | ) | 2007 | ||||||||||||||||||||||||||||
ProLogis Park Narita III | 1 | 19,544 | 69,290 | 10,839 | 20,967 | 78,706 | 99,673 | (9,011 | ) | 2008 |
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | |||||||
Reynosa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Puente Industrial Center |
| 1 |
|
|
|
| 989 |
|
|
| - |
|
|
| 12,916 |
|
|
| 1,767 |
|
|
| 12,138 |
|
|
| 13,905 |
|
|
| (314 | ) |
| 2015 |
Reynosa |
| 1 |
|
|
|
| 989 |
|
|
| - |
|
|
| 12,916 |
|
|
| 1,767 |
|
|
| 12,138 |
|
|
| 13,905 |
|
|
| (314 | ) |
|
|
Subtotal Mexico: |
| 2 |
|
|
|
| 1,719 |
|
|
| 2,287 |
|
|
| 14,278 |
|
|
| 2,497 |
|
|
| 15,787 |
|
|
| 18,284 |
|
|
| (1,116 | ) |
|
|
Subtotal North American Markets: |
| 1726 |
|
|
|
| 5,797,277 |
|
|
| 14,135,630 |
|
|
| 3,295,384 |
|
|
| 5,891,668 |
|
|
| 17,336,623 |
|
|
| 23,228,291 |
|
|
| (3,581,518 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Austria |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himberg Distribution Center |
| 1 |
|
|
|
| 3,225 |
|
|
| - |
|
|
| 5,473 |
|
|
| 3,551 |
|
|
| 5,147 |
|
|
| 8,698 |
|
|
| (786 | ) |
| 2011 |
Austria |
| 1 |
|
|
|
| 3,225 |
|
|
| - |
|
|
| 5,473 |
|
|
| 3,551 |
|
|
| 5,147 |
|
|
| 8,698 |
|
|
| (786 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Czech Republic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prague Rudna Distribution Center |
| 1 |
|
|
|
| 2,259 |
|
|
| 11,770 |
|
|
| 3,035 |
|
|
| 2,259 |
|
|
| 14,805 |
|
|
| 17,064 |
|
|
| (825 | ) |
| 2015 |
Uzice Distribution Center |
| 1 |
|
|
|
| 2,345 |
|
|
| - |
|
|
| 15,313 |
|
|
| 2,345 |
|
|
| 15,313 |
|
|
| 17,658 |
|
|
| (4,130 | ) |
| 2007 |
Czech Republic |
| 2 |
|
|
|
| 4,604 |
|
|
| 11,770 |
|
|
| 18,348 |
|
|
| 4,604 |
|
|
| 30,118 |
|
|
| 34,722 |
|
|
| (4,955 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonneuil Distribution Center |
| 1 |
|
|
|
| - |
|
|
| - |
|
|
| 11,840 |
|
|
| - |
|
|
| 11,840 |
|
|
| 11,840 |
|
|
| (1,293 | ) |
| 2012 |
Le Havre Distribution Center |
| 1 |
|
|
|
| 620 |
|
|
| - |
|
|
| 7,439 |
|
|
| 620 |
|
|
| 7,439 |
|
|
| 8,059 |
|
|
| (178 | ) |
| 2016 |
LGR Genevill. 1 SAS |
| 1 |
|
|
|
| 1,942 |
|
|
| 2,107 |
|
|
| 718 |
|
|
| 1,942 |
|
|
| 2,825 |
|
|
| 4,767 |
|
|
| (442 | ) |
| 2011 |
LGR Genevill. 2 SAS |
| 1 |
|
|
|
| 1,493 |
|
|
| 3,095 |
|
|
| 44 |
|
|
| 1,493 |
|
|
| 3,139 |
|
|
| 4,632 |
|
|
| (477 | ) |
| 2011 |
Moissy II Distribution Center |
| 2 |
|
|
|
| 9,562 |
|
|
| 3,555 |
|
|
| 21,878 |
|
|
| 10,250 |
|
|
| 24,745 |
|
|
| 34,995 |
|
|
| (2,425 | ) |
| 2014, 2016 |
Port of Rouen |
| 1 |
|
|
|
| - |
|
|
| 13,440 |
|
|
| 170 |
|
|
| - |
|
|
| 13,610 |
|
|
| 13,610 |
|
|
| (2,791 | ) |
| 2011 |
France |
| 7 |
|
|
|
| 13,617 |
|
|
| 22,197 |
|
|
| 42,089 |
|
|
| 14,305 |
|
|
| 63,598 |
|
|
| 77,903 |
|
|
| (7,606 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hausbruch Industrial Center 4-B |
| 1 |
|
|
|
| 7,201 |
|
|
| 4,684 |
|
|
| 222 |
|
|
| 7,201 |
|
|
| 4,906 |
|
|
| 12,107 |
|
|
| (2,096 | ) |
| 2011 |
Hausbruch Industrial Center 5-650 |
| 1 |
|
|
|
| 2,592 |
|
|
| 400 |
|
|
| 292 |
|
|
| 2,592 |
|
|
| 692 |
|
|
| 3,284 |
|
|
| (210 | ) |
| 2011 |
Kolleda Distribution Center |
| 1 |
|
|
|
| 223 |
|
|
| 3,450 |
|
|
| (276 | ) |
|
| 223 |
|
|
| 3,174 |
|
|
| 3,397 |
|
|
| (605 | ) |
| 2008 |
Lauenau Distribution Center |
| 1 |
|
|
|
| 2,417 |
|
|
| 5,380 |
|
|
| 304 |
|
|
| 2,417 |
|
|
| 5,684 |
|
|
| 8,101 |
|
|
| (1,120 | ) |
| 2011 |
Meerane Distribution Center |
| 1 |
|
|
|
| 22,214 |
|
|
| - |
|
|
| 71,263 |
|
|
| 25,970 |
|
|
| 67,507 |
|
|
| 93,477 |
|
|
| (983 | ) |
| 2016 |
Germany |
| 5 |
|
|
|
| 34,647 |
|
|
| 13,914 |
|
|
| 71,805 |
|
|
| 38,403 |
|
|
| 81,963 |
|
|
| 120,366 |
|
|
| (5,014 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hungary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hegyeshalom Distribution Center |
| 1 |
|
|
|
| 245 |
|
|
| - |
|
|
| 2,969 |
|
|
| - |
|
|
| 3,214 |
|
|
| 3,214 |
|
|
| - |
|
| 2015 |
Hungary |
| 1 |
|
|
|
| 245 |
|
|
| - |
|
|
| 2,969 |
|
|
| - |
|
|
| 3,214 |
|
|
| 3,214 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Italy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arena Po Distribution Center |
| 2 |
|
|
|
| 7,185 |
|
|
| 19,447 |
|
|
| 605 |
|
|
| 7,185 |
|
|
| 20,052 |
|
|
| 27,237 |
|
|
| (5,360 | ) |
| 2011 |
Castel San Giovanni Distribution Center |
| 1 |
|
|
|
| 2,986 |
|
|
| 9,117 |
|
|
| 321 |
|
|
| 2,986 |
|
|
| 9,438 |
|
|
| 12,424 |
|
|
| (1,885 | ) |
| 2011 |
Siziano Logistics Park |
| 1 |
|
|
|
| 9,538 |
|
|
| 17,290 |
|
|
| 1,198 |
|
|
| 9,538 |
|
|
| 18,488 |
|
|
| 28,026 |
|
|
| (3,255 | ) |
| 2011 |
Italy |
| 4 |
|
|
|
| 19,709 |
|
|
| 45,854 |
|
|
| 2,124 |
|
|
| 19,709 |
|
|
| 47,978 |
|
|
| 67,687 |
|
|
| (10,500 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nadarzyn Distribution Center |
| 1 |
|
|
|
| 2,180 |
|
|
| - |
|
|
| 6,905 |
|
|
| 2,180 |
|
|
| 6,905 |
|
|
| 9,085 |
|
|
| (1,486 | ) |
| 2009 |
Piotrkow II Distribution Center |
| 1 |
|
|
|
| 1,418 |
|
|
| - |
|
|
| 4,864 |
|
|
| 1,396 |
|
|
| 4,886 |
|
|
| 6,282 |
|
|
| (1,170 | ) |
| 2009 |
Sochaczew Distribution Center |
| 2 |
|
|
|
| 116 |
|
|
| 10,242 |
|
|
| 2,214 |
|
|
| 750 |
|
|
| 11,822 |
|
|
| 12,572 |
|
|
| (2,874 | ) |
| 2008 |
Szczecin Distribution Center |
| 2 |
|
|
|
| 925 |
|
|
| - |
|
|
| 13,163 |
|
|
| 928 |
|
|
| 13,160 |
|
|
| 14,088 |
|
|
| (218 | ) |
| 2014, 2015 |
Poland |
| 6 |
|
|
|
| 4,639 |
|
|
| 10,242 |
|
|
| 27,146 |
|
|
| 5,254 |
|
|
| 36,773 |
|
|
| 42,027 |
|
|
| (5,748 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Slovakia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sered Distribution Center |
| 1 |
|
|
|
| 2,105 |
|
|
| - |
|
|
| 11,559 |
|
|
| 2,105 |
|
|
| 11,559 |
|
|
| 13,664 |
|
|
| (2,233 | ) |
| 2009 |
Slovakia |
| 1 |
|
|
|
| 2,105 |
|
|
| - |
|
|
| 11,559 |
|
|
| 2,105 |
|
|
| 11,559 |
|
|
| 13,664 |
|
|
| (2,233 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baraja MAD Logistics Center |
| 4 |
|
|
|
| - |
|
|
| 34,100 |
|
|
| 1,040 |
|
|
| - |
|
|
| 35,140 |
|
|
| 35,140 |
|
|
| (7,935 | ) |
| 2011 |
Spain |
| 4 |
|
|
|
| - |
|
|
| 34,100 |
|
|
| 1,040 |
|
|
| - |
|
|
| 35,140 |
|
|
| 35,140 |
|
|
| (7,935 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweden |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orebro Distribution Center |
| 1 |
|
|
|
| 8,738 |
|
|
| 19,104 |
|
|
| 2,230 |
|
|
| 8,738 |
|
|
| 21,334 |
|
|
| 30,072 |
|
|
| (6,267 | ) |
| 2011 |
Sweden |
| 1 |
|
|
|
| 8,738 |
|
|
| 19,104 |
|
|
| 2,230 |
|
|
| 8,738 |
|
|
| 21,334 |
|
|
| 30,072 |
|
|
| (6,267 | ) |
|
|
109
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Saitama Distribution Center 1 | 2 | 24,943 | 28,063- | 24,943 | 28,063 | 53,006 | (819 | ) | 2013 | |||||||||||||||||||||||||||||
Shiohama Distr Ctr 1 | 1 | 19,779 | 23,720 | - | 38,126 | 5,373 | 43,499 | (3,011 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Japan | 15 | 223,288 | 180,223 | 243,904 | 250,198 | 397,217 | 647,415 | (30,093 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Singapore | ||||||||||||||||||||||||||||||||||||||
Airport Logistics Center 3 | 1 | - | 26,958 | 126 | - | 27,084 | 27,084 | (3,093 | ) | 2011 | ||||||||||||||||||||||||||||
Changi South Distr Ctr 1 | 1 | - | 43,932 | 118 | - | 44,050 | 44,050 | (4,611 | ) | 2011 | ||||||||||||||||||||||||||||
Changi-North DC1 | 1 | - | 14,536 | 63 | - | 14,599 | 14,599 | (1,552 | ) | 2011 | ||||||||||||||||||||||||||||
Singapore Airport Logist Ctr 2 | 1 | - | 39,035 | 185 | - | 39,220 | 39,220 | (4,486 | ) | 2011 | ||||||||||||||||||||||||||||
Tuas Distribution Center | 1 | - | 19,827 | 252 | - | 20,079 | 20,079 | (3,329 | ) | 2011 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Singapore | 5 | - | 144,288 | 744 | - | 145,032 | 145,032 | (17,071 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal Asian Markets: | 29 | 236,809 | 373,594 | 256,151 | 263,542 | 603,012 | 866,554 | (52,503 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Total Industrial Operating Properties: | 1,610 | 3,940,267 | 11,230,976 | 2,629,821 | 4,074,647 | 13,726,417 | 17,801,064 | (2,540,267 | ) | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Development Portfolio | ||||||||||||||||||||||||||||||||||||||
American Markets: | ||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||
Baltimore/Washington | ||||||||||||||||||||||||||||||||||||||
Gateway Bus Ctr | 4 | 11,569 | - | 4,360 | 11,569 | 4,360 | 15,929 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Baltimore/Washington | 4 | 11,569 | - | 4,360 | 11,569 | 4,360 | 15,929 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Cincinnati, Ohio | ||||||||||||||||||||||||||||||||||||||
Union Airpark Distribution Center | 1 | 4,991 | - | 11,017 | 4,991 | 11,017 | 16,008 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Cincinnati, Ohio | 1 | 4,991 | - | 11,017 | 4,991 | 11,017 | 16,008 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Columbus, Ohio | ||||||||||||||||||||||||||||||||||||||
Etna Distribution Center | 1 | 3,270 | - | 22,244 | 3,270 | 22,244 | 25,514 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Columbus, Ohio | 1 | 3,270 | - | 22,244 | 3,270 | 22,244 | 25,514 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Dallas/Fort Worth, Texas | ||||||||||||||||||||||||||||||||||||||
Freeport Corp Ctr | 1 | 458 | - | 1,134 | 458 | 1,134 | 1,592 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Lancaster Distribution Center | 2 | 13,025 | - | 53,333 | 13,025 | 53,333 | 66,358 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Dallas/Fort Worth, Texas | 3 | 13,483 | - | 54,467 | 13,483 | 54,467 | 67,950 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Denver, Colorado | ||||||||||||||||||||||||||||||||||||||
Stapleton Bus Ctr North | 1 | 2,954 | - | 764 | 2,954 | 764 | 3,718 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Denver, Colorado | 1 | 2,954 | - | 764 | 2,954 | 764 | 3,718 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Houston, Texas | ||||||||||||||||||||||||||||||||||||||
Northpark Distribution Center | 2 | 2,532 | - | 11,851 | 2,532 | 11,851 | 14,383 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Houston, Texas | 2 | 2,532 | - | 11,851 | 2,532 | 11,851 | 14,383 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Indianapolis, Indiana | ||||||||||||||||||||||||||||||||||||||
Lebanon Commerce Park | 1 | 2,045 | - | 18,625 | 2,045 | 18,625 | 20,670 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Indianapolis, Indiana | 1 | 2,045 | - | 18,625 | 2,045 | 18,625 | 20,670 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
New Jersey/New York | ||||||||||||||||||||||||||||||||||||||
Port Reading Business Park | 4 | 53,784 | - | 34,706 | 53,784 | 34,706 | 88,490 | |||||||||||||||||||||||||||||||
Ports Jersey City Distribution Center | 1 | 27,472 | - | 49,754 | 27,472 | 49,754 | 77,226 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
New Jersey/New York | 5 | 81,256 | - | 84,460 | 81,256 | 84,460 | 165,716 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Phoenix, Arizona | ||||||||||||||||||||||||||||||||||||||
Riverside Dist Ctr (PHX) | 1 | 2,478 | - | 13,954 | 2,478 | 13,954 | 16,432 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Phoenix, Arizona | 1 | 2,478 | - | 13,954 | 2,478 | 13,954 | 16,432 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Seattle, Washington | ||||||||||||||||||||||||||||||||||||||
Fife Distribution Center | 1 | 3,236 | - | 11,697 | 3,236 | 11,697 | 14,933 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Seattle, Washington | 1 | 3,236 | - | 11,697 | 3,236 | 11,697 | 14,933 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
South Florida | ||||||||||||||||||||||||||||||||||||||
Beacon Lakes | 2 | 7,316 | - | 12,557 | 7,316 | 12,557 | 19,873 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
South Florida | 2 | 7,316 | - | 12,557 | 7,316 | 12,557 | 19,873 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Crossroads Business Park | 1 | 8,218 | - | 6,170 | 8,218 | 6,170 | 14,388 | |||||||||||||||||||||||||||||||
Redlands Distribution Center | 3 | 43,992 | - | 31,920 | 43,992 | 31,920 | 75,912 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Southern California | 4 | 52,210 | - | 38,090 | 52,210 | 38,090 | 90,300 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
|
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | ||||||||
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grange Park |
| 1 |
|
|
|
|
| 13,258 |
|
|
| - |
|
|
| 14,900 |
|
|
| 14,331 |
|
|
| 13,827 |
|
|
| 28,158 |
|
|
| (519 | ) |
| 2015 | |
Midpoint Park |
| 2 |
|
|
|
|
| 17,843 |
|
|
| 9,526 |
|
|
| 24,621 |
|
|
| 23,011 |
|
|
| 28,979 |
|
|
| 51,990 |
|
|
| (2,253 | ) |
| 2008, 2015 | |
United Kingdom |
| 3 |
|
|
|
|
| 31,101 |
|
|
| 9,526 |
|
|
| 39,521 |
|
|
| 37,342 |
|
|
| 42,806 |
|
|
| 80,148 |
|
|
| (2,772 | ) |
|
| |
Subtotal European Markets: |
| 35 |
|
|
|
|
| 122,630 |
|
|
| 166,707 |
|
|
| 224,304 |
|
|
| 134,011 |
|
|
| 379,630 |
|
|
| 513,641 |
|
|
| (53,816 | ) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asian Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dalian Industrial Park Distribution Center |
| 1 |
|
|
|
|
| 2,239 |
|
|
| 12,828 |
|
|
| 30 |
|
|
| 2,052 |
|
|
| 13,045 |
|
|
| 15,097 |
|
|
| (2,043 | ) |
| 2011 | |
Fengxian Logistics Center |
| 3 |
|
|
|
|
| - |
|
|
| 12,149 |
|
|
| 991 |
|
|
| - |
|
|
| 13,140 |
|
|
| 13,140 |
|
|
| (5,073 | ) |
| 2011 | |
Jiaxing Distribution Center |
| 4 |
|
|
|
|
| 10,104 |
|
|
| 9,795 |
|
|
| 15,058 |
|
|
| 8,555 |
|
|
| 26,402 |
|
|
| 34,957 |
|
|
| (2,715 | ) |
| 2011, 2013 | |
Tianjin Bonded Logistics Park |
| 2 |
|
|
|
|
| 1,380 |
|
|
| 8,367 |
|
|
| 25 |
|
|
| 1,257 |
|
|
| 8,515 |
|
|
| 9,772 |
|
|
| (1,515 | ) |
| 2011 | |
ProLogis Park Narita III |
| 10 |
|
|
|
|
| 13,723 |
|
|
| 43,139 |
|
|
| 16,104 |
|
|
| 11,864 |
|
|
| 61,102 |
|
|
| 72,966 |
|
|
| (11,346 | ) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Singapore |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airport Logistics Center 3 |
| 1 |
|
|
|
|
| - |
|
|
| 23,553 |
|
|
| 201 |
|
|
| - |
|
|
| 23,754 |
|
|
| 23,754 |
|
|
| (5,890 | ) |
| 2011 | |
Changi South Distribution Center 1 |
| 1 |
|
|
|
|
| - |
|
|
| 38,384 |
|
|
| 104 |
|
|
| - |
|
|
| 38,488 |
|
|
| 38,488 |
|
|
| (8,773 | ) |
| 2011 | |
Changi-North Distribution Center 1 |
| 1 |
|
|
|
|
| - |
|
|
| 14,276 |
|
|
| 140 |
|
|
| - |
|
|
| 14,416 |
|
|
| 14,416 |
|
|
| (3,158 | ) |
| 2011 | |
Singapore Airport Logistics Center 2 |
| 1 |
|
|
|
|
| - |
|
|
| 34,105 |
|
|
| 194 |
|
|
| - |
|
|
| 34,299 |
|
|
| 34,299 |
|
|
| (8,547 | ) |
| 2011 | |
Tuas Distribution Center |
| 1 |
|
|
|
|
| - |
|
|
| 17,324 |
|
|
| 278 |
|
|
| - |
|
|
| 17,602 |
|
|
| 17,602 |
|
|
| (6,431 | ) |
| 2011 | |
Singapore |
| 5 |
|
|
|
|
| - |
|
|
| 127,642 |
|
|
| 917 |
|
|
| - |
|
|
| 128,559 |
|
|
| 128,559 |
|
|
| (32,799 | ) |
|
| |
Subtotal Asian Markets: |
| 15 |
|
|
|
|
| 13,723 |
|
|
| 170,781 |
|
|
| 17,021 |
|
|
| 11,864 |
|
|
| 189,661 |
|
|
| 201,525 |
|
|
| (44,145 | ) |
|
| |
Total Industrial Operating Properties |
|
| 1,776 |
|
|
|
|
| 5,933,630 |
|
|
| 14,473,118 |
|
|
| 3,536,709 |
|
|
| 6,037,543 |
|
|
| 17,905,914 |
|
|
| 23,943,457 |
|
|
| (3,679,479 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta, Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park I-75 South |
| 1 |
|
|
|
|
| 9,868 |
|
|
| - |
|
|
| 28,881 |
|
|
| 9,868 |
|
|
| 28,881 |
|
|
| 38,749 |
|
|
|
|
|
|
| |
Atlanta, Georgia |
| 1 |
|
|
|
|
| 9,868 |
|
|
| - |
|
|
| 28,881 |
|
|
| 9,868 |
|
|
| 28,881 |
|
|
| 38,749 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Valley, California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Park of Commerce |
| 1 |
|
|
|
|
| 3,048 |
|
|
| - |
|
|
| 2 |
|
|
| 3,048 |
|
|
| 2 |
|
|
| 3,050 |
|
|
|
|
|
|
| |
Patterson Pass Business Center |
| 2 |
|
|
|
|
| 2,922 |
|
|
| - |
|
|
| 11,360 |
|
|
| 2,922 |
|
|
| 11,360 |
|
|
| 14,282 |
|
|
|
|
|
|
| |
Central Valley, California |
| 3 |
|
|
|
|
| 5,970 |
|
|
| - |
|
|
| 11,362 |
|
|
| 5,970 |
|
|
| 11,362 |
|
|
| 17,332 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chicago, Illinois |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glendale Heights Distribution Center |
| 1 |
|
|
|
|
| 153 |
|
|
| - |
|
|
| 9,825 |
|
|
| 153 |
|
|
| 9,825 |
|
|
| 9,978 |
|
|
|
|
|
| 2016 | |
Woodridge Distribution Center |
| 1 |
|
|
|
|
| 1,424 |
|
|
| - |
|
|
| 3,725 |
|
|
| 1,424 |
|
|
| 3,725 |
|
|
| 5,149 |
|
|
|
|
|
| 2016 | |
Chicago, Illinois |
| 2 |
|
|
|
|
| 1,577 |
|
|
| - |
|
|
| 13,550 |
|
|
| 1,577 |
|
|
| 13,550 |
|
|
| 15,127 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dallas/Fort Worth, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park 121 Distribution Center |
| 2 |
|
|
|
|
| 8,546 |
|
|
| - |
|
|
| 5,874 |
|
|
| 8,546 |
|
|
| 5,874 |
|
|
| 14,420 |
|
|
|
|
|
|
| |
Dallas/Fort Worth, Texas |
| 2 |
|
|
|
|
| 8,546 |
|
|
| - |
|
|
| 5,874 |
|
|
| 8,546 |
|
|
| 5,874 |
|
|
| 14,420 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver, Colorado |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stapleton Business Center North |
| 1 |
|
|
|
|
| 2,403 |
|
|
| - |
|
|
| 14,430 |
|
|
| 2,403 |
|
|
| 14,430 |
|
|
| 16,833 |
|
|
|
|
|
| 2016 | |
Denver, Colorado |
| 1 |
|
|
|
|
| 2,403 |
|
|
| - |
|
|
| 14,430 |
|
|
| 2,403 |
|
|
| 14,430 |
|
|
| 16,833 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greens Parkway Distribution Center |
| 1 |
|
|
|
|
| 1,246 |
|
|
| - |
|
|
| 14,477 |
|
|
| 1,246 |
|
|
| 14,477 |
|
|
| 15,723 |
|
|
|
|
|
| 2016 | |
Houston, Texas |
| 1 |
|
|
|
|
| 1,246 |
|
|
| - |
|
|
| 14,477 |
|
|
| 1,246 |
|
|
| 14,477 |
|
|
| 15,723 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas, Nevada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ann Rd-N Sloan LN Distribution Center |
| 1 |
|
|
|
|
| 3,609 |
|
|
| - |
|
|
| 19,749 |
|
|
| 3,609 |
|
|
| 19,749 |
|
|
| 23,358 |
|
|
|
|
|
|
| |
Las Vegas Beltway Distribution Center |
| 1 |
|
|
|
|
| 7,321 |
|
|
| - |
|
|
| 7,443 |
|
|
| 7,321 |
|
|
| 7,443 |
|
|
| 14,764 |
|
|
|
|
|
| 2016 | |
Las Vegas Corporate Center |
| 2 |
|
|
|
|
| 3,936 |
|
|
| - |
|
|
| 1,003 |
|
|
| 3,936 |
|
|
| 1,003 |
|
|
| 4,939 |
|
|
|
|
|
|
| |
North 15 Freeway Distribution Center |
| 1 |
|
|
|
|
| 2,734 |
|
|
| - |
|
|
| 10,114 |
|
|
| 2,734 |
|
|
| 10,114 |
|
|
| 12,848 |
|
|
|
|
|
| 2016 | |
Sunrise Industrial Park |
| 1 |
|
|
|
|
| 5,348 |
|
|
| - |
|
|
| 8,011 |
|
|
| 5,348 |
|
|
| 8,011 |
|
|
| 13,359 |
|
|
|
|
|
|
| |
Las Vegas, Nevada |
| 6 |
|
|
|
|
| 22,948 |
|
|
| - |
|
|
| 46,320 |
|
|
| 22,948 |
|
|
| 46,320 |
|
|
| 69,268 |
|
|
|
|
|
|
|
110
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20132016
(In thousands of U.S. dollars, as applicable)
No. of | Encum- | Initial Cost to Prologis | Costs To | Gross Amounts At Which Carried as of December 31, 2013 | Accumulated | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||
El Puente Industrial Center | 1 | 1,765 | - | 36 | 1,765 | 36 | 1,801 | |||||||||||||||||||||||||||||||
Los Altos Ind Park | 1 | 2,586 | - | 2,448 | 2,586 | 2,448 | 5,034 | |||||||||||||||||||||||||||||||
Puente Grande Distribution Center | 1 | 10,538 | - | 6,752 | 10,538 | 6,752 | 17,290 | |||||||||||||||||||||||||||||||
Toluca Distribution Center | 1 | 3,235 | - | 5,802 | 3,235 | 5,802 | 9,037 | 2013 | ||||||||||||||||||||||||||||||
Tres Rios | 3 | 19,924 | - | 20,904 | 19,924 | 20,904 | 40,828 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Mexico | 7 | 38,048 | - | 35,942 | 38,048 | 35,942 | 73,990 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||||||||||||||
Meadowvale Dist Ctr | 2 | 38,353 | - | 34,200 | 38,353 | 34,200 | 72,553 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Canada | 2 | 38,353 | - | 34,200 | 38,353 | 34,200 | 72,553 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal Americas Markets: | 35 | 263,741 | - | 354,228 | 263,741 | 354,228 | 617,969 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
European Markets: | ||||||||||||||||||||||||||||||||||||||
Czech Republic | ||||||||||||||||||||||||||||||||||||||
Prague West | 1 | 3,526 | - | 6,232 | 3,526 | 6,232 | 9,758 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Czech Republic | 1 | 3,526 | - | 6,232 | 3,526 | 6,232 | 9,758 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
France | ||||||||||||||||||||||||||||||||||||||
LG Roissy Sorbiers SAS | 1 | 4 | - | - | 4 | - | 4 | |||||||||||||||||||||||||||||||
Moissy II Distribution Center | 1 | 6,306 | - | 2,687 | 6,306 | 2,687 | 8,993 | |||||||||||||||||||||||||||||||
Vemars Distribution Center | 1 | 9,428 | - | 6,554 | 9,428 | 6,554 | 15,982 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
France | 3 | 15,738 | - | 9,241 | 15,738 | 9,241 | 24,979 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Poland | ||||||||||||||||||||||||||||||||||||||
Wroclaw V DC | 1 | 4,490 | - | 16,592 | 4,490 | 16,592 | 21,082 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Poland | 1 | 4,490 | - | 16,592 | 4,490 | 16,592 | 21,082 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Slovakia | ||||||||||||||||||||||||||||||||||||||
ProLogis Park Nove Mesto | 1 | 971 | - | 155 | 971 | 155 | 1,126 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Slovakia | 1 | 971 | - | 155 | 971 | 155 | 1,126 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Sweden | ||||||||||||||||||||||||||||||||||||||
Gothenburg Distribution Center | 1 | 3,523 | - | 42 | 3,523 | 42 | 3,565 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Sweden | 1 | 3,523 | - | 42 | 3,523 | 42 | 3,565 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
United Kingdom | ||||||||||||||||||||||||||||||||||||||
Boscombe Road Distribution Center | 1 | 15,612 | - | 1,450 | 15,612 | 1,450 | 17,062 | |||||||||||||||||||||||||||||||
Dirft Dist Ctr | 1 | 44,441 | - | 6,650 | 44,441 | 6,650 | 51,091 | |||||||||||||||||||||||||||||||
Park Ryton Dist Ctr | 3 | 19,793 | - | 13,093 | 19,793 | 13,093 | 32,886 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
United Kingdom | 5 | 79,846 | - | 21,193 | 79,846 | 21,193 | 101,039 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal European Markets: | 12 | 108,094 | - | 53,455 | 108,094 | 53,455 | 161,549 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Asia Markets: | ||||||||||||||||||||||||||||||||||||||
China | ||||||||||||||||||||||||||||||||||||||
Jiaxing Distri Ctr | 1 | 2,092 | - | 3,385 | 2,092 | 3,385 | 5,477 | 2013 | ||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
China | 1 | 2,092 | - | 3,385 | 2,092 | 3,385 | 5,477 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Japan | ||||||||||||||||||||||||||||||||||||||
Funabashi Dist Cntr 4 Nishiura | 1 | 11,502 | - | 4,881 | 11,502 | 4,881 | 16,383 | |||||||||||||||||||||||||||||||
Hisayama Dist Ctr | 1 | 5,766 | - | 511 | 5,766 | 511 | 6,277 | |||||||||||||||||||||||||||||||
Joso Dist Ctr | 1 | 13,687 | - | 275 | 13,687 | 275 | 13,962 | |||||||||||||||||||||||||||||||
Kawajima Park | 1 | 17,096 | - | 31,421 | 17,096 | 31,421 | 48,517 | |||||||||||||||||||||||||||||||
Kitamoto Distribution Center | 1 | 20,018 | - | 54,052 | 20,018 | 54,052 | 74,070 | |||||||||||||||||||||||||||||||
Narita 1 | 1 | 10,538 | - | 154 | 10,538 | 154 | 10,692 | |||||||||||||||||||||||||||||||
Osaka 5 | 1 | 39,997 | - | 16,065 | 39,997 | 16,065 | 56,062 | |||||||||||||||||||||||||||||||
ProLogis Parc Tomiya III | 1 | 9,704 | - | 355 | 9,704 | 355 | 10,059 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Japan | 8 | 128,308 | - | 107,714 | 128,308 | 107,714 | 236,022 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Singapore | ||||||||||||||||||||||||||||||||||||||
Changi-North DC1 | 1 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Singapore | 1 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Subtotal Asian Markets: | 10 | 130,400 | - | 111,099 | 130,400 | 111,099 | 241,499 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
Total Development Portfolio | 57 | 502,235 | - | 518,782 | 502,235 | 518,782 | 1,021,017 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||
GRAND TOTAL | 1,667 | 4,442,502 | 11,230,976 | 3,148,603 | 4,576,882 | 14,245,199 | 18,822,081 | (2,540,267 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
| Date of Construction/ Acquisition | ||||||
Memphis, Tennessee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DeSoto Distribution Center |
| 1 |
|
|
|
| 4,140 |
|
|
| - |
|
|
| 21,382 |
|
|
| 4,140 |
|
|
| 21,382 |
|
|
| 25,522 |
|
|
|
|
|
Memphis, Tennessee |
| 1 |
|
|
|
| 4,140 |
|
|
| - |
|
|
| 21,382 |
|
|
| 4,140 |
|
|
| 21,382 |
|
|
| 25,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Seaport |
| 1 |
|
|
|
| 15,732 |
|
|
| - |
|
|
| 3,145 |
|
|
| 15,732 |
|
|
| 3,145 |
|
|
| 18,877 |
|
|
|
|
|
Tri-Port Distribution Center |
| 1 |
|
|
|
| 34,102 |
|
|
| - |
|
|
| - |
|
|
| 34,102 |
|
|
| - |
|
|
| 34,102 |
|
|
|
|
|
New Jersey |
| 2 |
|
|
|
| 49,834 |
|
|
| - |
|
|
| 3,145 |
|
|
| 49,834 |
|
|
| 3,145 |
|
|
| 52,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phoenix, Arizona |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Riverside Distribution Center |
| 1 |
|
|
|
| 1,075 |
|
|
| - |
|
|
| 274 |
|
|
| 1,075 |
|
|
| 274 |
|
|
| 1,349 |
|
|
|
|
|
Phoenix, Arizona |
| 1 |
|
|
|
| 1,075 |
|
|
| - |
|
|
| 274 |
|
|
| 1,075 |
|
|
| 274 |
|
|
| 1,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Antonio, Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southport Distribution Center |
| 1 |
|
|
|
| 1,599 |
|
|
| - |
|
|
| 20,594 |
|
|
| 1,599 |
|
|
| 20,594 |
|
|
| 22,193 |
|
|
|
|
|
San Antonio, Texas |
| 1 |
|
|
|
| 1,599 |
|
|
| - |
|
|
| 20,594 |
|
|
| 1,599 |
|
|
| 20,594 |
|
|
| 22,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco Bay Area, California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hayward Industrial Center |
| 1 |
|
|
|
| 11,287 |
|
|
| - |
|
|
| 14,693 |
|
|
| 11,287 |
|
|
| 14,693 |
|
|
| 25,980 |
|
|
|
| 2016 |
Oakland Logistics Park |
| 1 |
|
|
|
| 815 |
|
|
| - |
|
|
| 4,327 |
|
|
| 815 |
|
|
| 4,327 |
|
|
| 5,142 |
|
|
|
|
|
San Francisco Bay Area, California |
| 2 |
|
|
|
| 12,102 |
|
|
| - |
|
|
| 19,020 |
|
|
| 12,102 |
|
|
| 19,020 |
|
|
| 31,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seattle, Washington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park Tacoma Distribution Center |
| 2 |
|
|
|
| 2,528 |
|
|
| - |
|
|
| 681 |
|
|
| 2,528 |
|
|
| 681 |
|
|
| 3,209 |
|
|
|
|
|
Seattle, Washington |
| 2 |
|
|
|
| 2,528 |
|
|
| - |
|
|
| 681 |
|
|
| 2,528 |
|
|
| 681 |
|
|
| 3,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beacon Lakes |
| 3 |
|
|
|
| 11,833 |
|
|
| - |
|
|
| 8,112 |
|
|
| 11,833 |
|
|
| 8,112 |
|
|
| 19,945 |
|
|
|
|
|
South Florida |
| 3 |
|
|
|
| 11,833 |
|
|
| - |
|
|
| 8,112 |
|
|
| 11,833 |
|
|
| 8,112 |
|
|
| 19,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agua Mansa |
| 3 |
|
|
|
| 15,511 |
|
|
| - |
|
|
| 1,250 |
|
|
| 15,511 |
|
|
| 1,250 |
|
|
| 16,761 |
|
|
|
|
|
Meridan Park |
| 1 |
|
|
|
| 17,021 |
|
|
| - |
|
|
| 6,951 |
|
|
| 17,021 |
|
|
| 6,951 |
|
|
| 23,972 |
|
|
|
|
|
Redlands Distribution Center |
| 2 |
|
|
|
| 18,136 |
|
|
| - |
|
|
| 5,474 |
|
|
| 18,136 |
|
|
| 5,474 |
|
|
| 23,610 |
|
|
|
|
|
Southern California |
| 6 |
|
|
|
| 50,668 |
|
|
| - |
|
|
| 13,675 |
|
|
| 50,668 |
|
|
| 13,675 |
|
|
| 64,343 |
|
|
|
|
|
Subtotal United States: |
| 34 |
|
|
|
| 186,337 |
|
|
| - |
|
|
| 221,777 |
|
|
| 186,337 |
|
|
| 221,777 |
|
|
| 408,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Milton 402 Business Park |
| 2 |
|
|
|
| 7,792 |
|
|
|
|
|
|
| 20,390 |
|
|
| 7,792 |
|
|
| 20,390 |
|
|
| 28,182 |
|
|
|
| 2016 |
Tapscott Distribution Center |
| 2 |
|
|
|
| 7,875 |
|
|
| - |
|
|
| 15,631 |
|
|
| 7,875 |
|
|
| 15,631 |
|
|
| 23,506 |
|
|
|
| 2016 |
Canada |
| 4 |
|
|
|
| 15,667 |
|
|
| - |
|
|
| 36,021 |
|
|
| 15,667 |
|
|
| 36,021 |
|
|
| 51,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agua Fria Industrial Park |
| 1 |
|
|
|
| 4,912 |
|
|
| - |
|
|
| 10,941 |
|
|
| 4,912 |
|
|
| 10,941 |
|
|
| 15,853 |
|
|
|
|
|
Arrayanes Industrial Park |
| 1 |
|
|
|
| 4,738 |
|
|
| - |
|
|
| 6,744 |
|
|
| 4,738 |
|
|
| 6,744 |
|
|
| 11,482 |
|
|
|
|
|
Los Altos Industrial Park |
| 1 |
|
|
|
| 3,726 |
|
|
| - |
|
|
| 5,712 |
|
|
| 3,726 |
|
|
| 5,712 |
|
|
| 9,438 |
|
|
|
| 2016 |
San Jose Distribution Center |
| 3 |
|
|
|
| 24,303 |
|
|
| - |
|
|
| 19,060 |
|
|
| 24,303 |
|
|
| 19,060 |
|
|
| 43,363 |
|
|
|
| 2016 |
Toluca Distribution Center |
| 1 |
|
|
|
| 3,174 |
|
|
| - |
|
|
| 4,485 |
|
|
| 3,174 |
|
|
| 4,485 |
|
|
| 7,659 |
|
|
|
| 2016 |
Mexico |
| 7 |
|
|
|
| 40,853 |
|
|
| - |
|
|
| 46,942 |
|
|
| 40,853 |
|
|
| 46,942 |
|
|
| 87,795 |
|
|
|
|
|
Subtotal North American Markets: |
| 45 |
|
|
|
| 242,857 |
|
|
| - |
|
|
| 304,740 |
|
|
| 242,857 |
|
|
| 304,740 |
|
|
| 547,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Czech Republic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prague Airport Distribution Center |
| 1 |
|
|
|
| 1,858 |
|
|
| - |
|
|
| 1,444 |
|
|
| 1,858 |
|
|
| 1,444 |
|
|
| 3,302 |
|
|
|
|
|
Prague Rudna Distribution Center |
| 1 |
|
|
|
| 6,540 |
|
|
| - |
|
|
| 8,971 |
|
|
| 6,540 |
|
|
| 8,971 |
|
|
| 15,511 |
|
|
|
| 2016 |
Czech Republic |
| 2 |
|
|
|
| 8,398 |
|
|
| - |
|
|
| 10,415 |
|
|
| 8,398 |
|
|
| 10,415 |
|
|
| 18,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Isle d'Abeau Distribution Center |
| 1 |
|
|
|
| 7,492 |
|
|
| - |
|
|
| 7,348 |
|
|
| 7,492 |
|
|
| 7,348 |
|
|
| 14,840 |
|
|
|
| 2016 |
Le Havre Distribution Center |
| 2 |
|
|
|
| 868 |
|
|
| - |
|
|
| 25,104 |
|
|
| 868 |
|
|
| 25,104 |
|
|
| 25,972 |
|
|
|
| 2016 |
Moissy II Distribution Center |
| 1 |
|
|
|
| 2,459 |
|
|
| - |
|
|
| 2,131 |
|
|
| 2,459 |
|
|
| 2,131 |
|
|
| 4,590 |
|
|
|
|
|
France |
| 4 |
|
|
|
| 10,819 |
|
|
| - |
|
|
| 34,583 |
|
|
| 10,819 |
|
|
| 34,583 |
|
|
| 45,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bremen Distribution Center |
| 1 |
|
|
|
| 1,275 |
|
|
| - |
|
|
| 5,198 |
|
|
| 1,275 |
|
|
| 5,198 |
|
|
| 6,473 |
|
|
|
|
|
Hamm Distribution Center 1 |
| 1 |
|
|
|
| 4,699 |
|
|
| - |
|
|
| - |
|
|
| 4,699 |
|
|
| - |
|
|
| 4,699 |
|
|
|
|
|
Krefeld Park |
| 1 |
|
|
|
| 1,372 |
|
|
| - |
|
|
| 3,378 |
|
|
| 1,372 |
|
|
| 3,378 |
|
|
| 4,750 |
|
|
|
|
|
Germany |
| 3 |
|
|
|
| 7,346 |
|
|
| - |
|
|
| 8,576 |
|
|
| 7,346 |
|
|
| 8,576 |
|
|
| 15,922 |
|
|
|
|
|
111
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2016
(In thousands of U.S. dollars, as applicable)
|
|
|
|
|
|
|
| Initial Cost to Prologis |
|
| Costs Capitalized |
|
| Gross Amounts at Which Carried at December 31, 2016 |
|
|
|
|
|
|
| |||||||||||||||
Description |
| No. of Bldgs. |
|
| Encum- brances |
| Land |
|
| Building & Improvements |
|
| Subsequent to Acquisition |
|
| Land |
|
| Building & Improvements |
|
| Total (a,b) |
|
| Accumulated Depreciation (c) |
|
| Date of Construction/ Acquisition | ||||||||
Hungary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Budapest-Sziget Distribution Center |
| 3 |
|
|
|
|
| 4,250 |
|
|
| - |
|
|
| 9,381 |
|
|
| 4,250 |
|
|
| 9,381 |
|
|
| 13,631 |
|
|
|
|
|
| 2016 | |
Hungary |
| 3 |
|
|
|
|
| 4,250 |
|
|
| - |
|
|
| 9,381 |
|
|
| 4,250 |
|
|
| 9,381 |
|
|
| 13,631 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Italy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bologna Distribution Center |
| 1 |
|
|
|
|
| 2,291 |
|
|
| - |
|
|
| 961 |
|
|
| 2,291 |
|
|
| 961 |
|
|
| 3,252 |
|
|
|
|
|
|
| |
Italy |
| 1 |
|
|
|
|
| 2,291 |
|
|
| - |
|
|
| 961 |
|
|
| 2,291 |
|
|
| 961 |
|
|
| 3,252 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Netherlands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nieuwegein Distribution Center |
| 1 |
|
|
|
|
| 6,551 |
|
|
| - |
|
|
| 7,766 |
|
|
| 6,551 |
|
|
| 7,766 |
|
|
| 14,317 |
|
|
|
|
|
|
| |
Venlo Distribution Center |
| 1 |
|
|
|
|
| 13,125 |
|
|
| - |
|
|
| 13,297 |
|
|
| 13,125 |
|
|
| 13,297 |
|
|
| 26,422 |
|
|
|
|
|
|
| |
Netherlands |
| 2 |
|
|
|
|
| 19,676 |
|
|
| - |
|
|
| 21,063 |
|
|
| 19,676 |
|
|
| 21,063 |
|
|
| 40,739 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chorzow Distribution Center |
| 1 |
|
|
|
|
| 3,684 |
|
|
| - |
|
|
| 7,096 |
|
|
| 3,684 |
|
|
| 7,096 |
|
|
| 10,780 |
|
|
|
|
|
| 2016 | |
Piotrkow II Distribution Center |
| 1 |
|
|
|
|
| 2,252 |
|
|
| - |
|
|
| 9,880 |
|
|
| 2,252 |
|
|
| 9,880 |
|
|
| 12,132 |
|
|
|
|
|
|
| |
Strykow |
| 2 |
|
|
|
|
| 4,646 |
|
|
| - |
|
|
| 6,789 |
|
|
| 4,646 |
|
|
| 6,789 |
|
|
| 11,435 |
|
|
|
|
|
|
| |
Szczecin Distribution Center |
| 1 |
|
|
|
|
| 329 |
|
|
| - |
|
|
| 2,666 |
|
|
| 329 |
|
|
| 2,666 |
|
|
| 2,995 |
|
|
|
|
|
|
| |
Poland |
| 5 |
|
|
|
|
| 10,911 |
|
|
| - |
|
|
| 26,431 |
|
|
| 10,911 |
|
|
| 26,431 |
|
|
| 37,342 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Slovakia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Galanta Distribution Center |
| 1 |
|
|
|
|
| 5,296 |
|
|
| - |
|
|
| 2,569 |
|
|
| 5,296 |
|
|
| 2,569 |
|
|
| 7,865 |
|
|
|
|
|
|
| |
ProLogis Park Nove Mesto |
| 1 |
|
|
|
|
| 2,473 |
|
|
| - |
|
|
| 5,941 |
|
|
| 2,473 |
|
|
| 5,941 |
|
|
| 8,414 |
|
|
|
|
|
|
| |
Slovakia |
| 2 |
|
|
|
|
| 7,769 |
|
|
| - |
|
|
| 8,510 |
|
|
| 7,769 |
|
|
| 8,510 |
|
|
| 16,279 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massalaves Distribution Center |
| 1 |
|
|
|
|
| 4,809 |
|
|
| - |
|
|
| 303 |
|
|
| 4,809 |
|
|
| 303 |
|
|
| 5,112 |
|
|
|
|
|
|
| |
San Fernando Distribution Center |
| 1 |
|
|
|
|
| 6,350 |
|
|
| - |
|
|
| 28 |
|
|
| 6,350 |
|
|
| 28 |
|
|
| 6,378 |
|
|
|
|
|
|
| |
Spain |
| 2 |
|
|
|
|
| 11,159 |
|
|
| - |
|
|
| 331 |
|
|
| 11,159 |
|
|
| 331 |
|
|
| 11,490 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweden |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gothenburg Distribution Center |
| 2 |
|
|
|
|
| 13,142 |
|
|
| - |
|
|
| 14,638 |
|
|
| 13,142 |
|
|
| 14,638 |
|
|
| 27,780 |
|
|
|
|
|
|
| |
Sweden |
| 2 |
|
|
|
|
| 13,142 |
|
|
| - |
|
|
| 14,638 |
|
|
| 13,142 |
|
|
| 14,638 |
|
|
| 27,780 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Birmingham International Gateway Distribution Center |
| 4 |
|
|
|
|
| 13,835 |
|
|
| - |
|
|
| 9,616 |
|
|
| 13,835 |
|
|
| 9,616 |
|
|
| 23,451 |
|
|
|
|
|
| 2016 | |
Daventry Phase II Distribution Center |
| 1 |
|
|
|
|
| 5,524 |
|
|
| - |
|
|
| 602 |
|
|
| 5,524 |
|
|
| 602 |
|
|
| 6,126 |
|
|
|
|
|
|
| |
Dirft Distribution Center |
| 1 |
|
|
|
|
| 3,945 |
|
|
| - |
|
|
| 123 |
|
|
| 3,945 |
|
|
| 123 |
|
|
| 4,068 |
|
|
|
|
|
|
| |
Marston Gate Distribution Center |
| 2 |
|
|
|
|
| 13,735 |
|
|
| - |
|
|
| 9,714 |
|
|
| 13,735 |
|
|
| 9,714 |
|
|
| 23,449 |
|
|
|
|
|
|
| |
North Kettering Business Park |
| 1 |
|
|
|
|
| 2,367 |
|
|
| - |
|
|
| 32 |
|
|
| 2,367 |
|
|
| 32 |
|
|
| 2,399 |
|
|
|
|
|
|
| |
Stockly Park Distribution Center |
| 2 |
|
|
|
|
| 24,153 |
|
|
| - |
|
|
| 16,910 |
|
|
| 24,153 |
|
|
| 16,910 |
|
|
| 41,063 |
|
|
|
|
|
| 2016 | |
United Kingdom |
| 11 |
|
|
|
|
| 63,559 |
|
|
| - |
|
|
| 36,997 |
|
|
| 63,559 |
|
|
| 36,997 |
|
|
| 100,556 |
|
|
|
|
|
|
| |
Subtotal European Markets: |
| 37 |
|
|
|
|
| 159,320 |
|
|
| - |
|
|
| 171,886 |
|
|
| 159,320 |
|
|
| 171,886 |
|
|
| 331,206 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asian Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Japan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chiba New Town Distribution Center |
| 1 |
|
|
|
|
| 31,406 |
|
|
| - |
|
|
| 124,053 |
|
|
| 31,406 |
|
|
| 124,053 |
|
|
| 155,459 |
|
|
|
|
|
|
| |
Higashi Matsuyama Distribution Center |
| 1 |
|
|
|
|
| 13,402 |
|
|
| - |
|
|
| 7,841 |
|
|
| 13,402 |
|
|
| 7,841 |
|
|
| 21,243 |
|
|
|
|
|
|
| |
Ibaraki Distribution Center |
| 1 |
|
|
|
|
| 43,515 |
|
|
| - |
|
|
| 178,641 |
|
|
| 43,515 |
|
|
| 178,641 |
|
|
| 222,156 |
|
|
|
|
|
| 2016 | |
Koga Distribution Center |
| 2 |
|
|
|
|
| 8,257 |
|
|
| - |
|
|
| 12,090 |
|
|
| 8,257 |
|
|
| 12,090 |
|
|
| 20,347 |
|
|
|
|
|
|
| |
Narashino IV Distribution Center |
| 1 |
|
|
|
|
| 19,424 |
|
|
| - |
|
|
| 66,114 |
|
|
| 19,424 |
|
|
| 66,114 |
|
|
| 85,538 |
|
|
|
|
|
| 2016 | |
Shiohama Distribution Center |
| 1 |
|
|
|
|
| 35,058 |
|
|
| - |
|
|
| 13,478 |
|
|
| 35,058 |
|
|
| 13,478 |
|
|
| 48,536 |
|
|
|
|
|
|
| |
Japan |
| 7 |
|
|
|
|
| 151,062 |
|
|
| - |
|
|
| 402,217 |
|
|
| 151,062 |
|
|
| 402,217 |
|
|
| 553,279 |
|
|
|
|
|
|
| |
Subtotal Asian Markets: |
| 7 |
|
|
|
|
| 151,062 |
|
|
| - |
|
|
| 402,217 |
|
|
| 151,062 |
|
|
| 402,217 |
|
|
| 553,279 |
|
|
|
|
|
|
| |
Total Development Portfolio |
| 89 |
|
|
|
|
| 553,239 |
|
|
| - |
|
|
| 878,843 |
|
|
| 553,239 |
|
|
| 878,843 |
|
|
| 1,432,082 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAND TOTAL |
|
| 1,865 |
|
|
|
|
| 6,486,869 |
|
|
| 14,473,118 |
|
|
| 4,415,552 |
|
|
| 6,590,782 |
|
|
| 18,784,757 |
|
|
| 25,375,539 |
|
|
| (3,679,479 | ) |
|
|
112
(a) | The following table reconciles real estate assets per Schedule III to the Consolidated Balance Sheet |
Total per Schedule III | $ | 18,822,081 |
| $ | 25,375,539 |
|
| ||||||
Land | 1,516,166 |
|
| 1,218,904 |
|
| |||||||
Other real estate investments | 486,230 |
|
| 524,887 |
|
| |||||||
|
| ||||||||||||
Total per consolidated balance sheet | $ | 20,824,477 | (f) |
| $ | 27,119,330 |
| (f) |
(b) | The aggregate cost for |
(c) | Real estate assets (excluding land balances) are depreciated over their estimated useful lives. These useful lives are generally 5 to 7 years for capital improvements, 10 years for standard tenant improvements, 25 years for depreciable land improvements, |
Reconciliation of
The following table reconciles accumulated depreciation per Schedule III to the Consolidated Balance Sheets as ofSheet in Item 8. Financial Statements and Supplementary Data at December 31, 20132016 (in thousands):
Total accumulated depreciation per Schedule III | $ | 2,540,267 |
| $ | 3,679,479 |
| ||
Accumulated depreciation on other real estate investments | 28,731 |
|
| 78,893 |
| |||
| ||||||||
Total per consolidated balance sheet | $ | 2,568,998 |
| $ | 3,758,372 |
|
(d) | Properties with an aggregate undepreciated cost of |
(e) | Assessment bonds of |
(f) | The following table summarizes our real estate assets and accumulated depreciation for the years ended December 31 (in thousands): |
2013 | 2012 | 2011 |
| 2016 |
|
| 2015 |
|
| 2014 |
| |||||||||||||
Real estate assets: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Balance at beginning of year | $ | 23,559,891 | $ | 22,413,079 | $ | 11,080,161 |
| $ | 25,608,648 |
|
| $ | 20,109,432 |
|
| $ | 18,822,081 |
| ||||||
Acquisitions of operating properties, improvements to operating properties, development activity, transfers of land to CIP and net effect of changes in foreign exchange rates and other | 2,050,810 | 2,881,005 | 12,150,482 | |||||||||||||||||||||
Acquisitions of operating properties, improvements to operating properties development activity, transfers of land to CIP and net effect of changes in foreign exchange rates and other |
|
| 1,883,888 |
|
|
| 7,191,335 |
|
|
| 3,595,836 |
| ||||||||||||
Basis of operating properties disposed of | (6,857,994) | (1,630,764) | (906,602) |
|
| (1,359,186 | ) |
|
| (1,719,632 | ) |
|
| (2,713,300 | ) | |||||||||
Change in the development portfolio balance, including the acquisition of properties | 69,374 | 91,112 | 495,169 |
|
| (440,821 | ) |
|
| 398,923 |
|
|
| 452,963 |
| |||||||||
Impairment of real estate properties (1) | - | (194,541) | (21,237) | |||||||||||||||||||||
Assets transferred to held-for-sale | - | - | (384,894) |
|
| (316,990 | ) |
|
| (371,410 | ) |
|
| (48,148 | ) | |||||||||
Balance at end year |
| $ | 25,375,539 |
|
| $ | 25,608,648 |
|
| $ | 20,109,432 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Balance at end of year | $ | 18,822,081 | $ | 23,559,891 | $ | 22,413,079 | ||||||||||||||||||
|
|
| ||||||||||||||||||||||
Accumulated Depreciation: | ||||||||||||||||||||||||
Accumulated depreciation: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Balance at beginning of year | $ | 2,460,642 | $ | 2,150,713 | $ | 1,589,251 |
| $ | 3,207,855 |
|
| $ | 2,748,835 |
|
| $ | 2,540,267 |
| ||||||
Depreciation expense | 505,691 | 665,239 | 574,524 |
|
| 668,686 |
|
|
| 617,258 |
|
|
| 490,298 |
| |||||||||
Balances retired upon disposition of operating properties and net effect of changes in foreign exchange rates and other | (426,066) | (355,310) | (994) |
|
| (195,895 | ) |
|
| (153,621 | ) |
|
| (277,516 | ) | |||||||||
Assets transferred to held-for-sale | - | - | (12,068) |
|
| (1,167 | ) |
|
| (4,617 | ) |
|
| (4,214 | ) | |||||||||
|
|
| ||||||||||||||||||||||
Balance at end of year | $ | 2,540,267 | $ | 2,460,642 | $ | 2,150,713 |
| $ | 3,679,479 |
|
| $ | 3,207,855 |
|
| $ | 2,748,835 |
|
113
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROLOGIS, INC. | ||||
By: | /s/ HAMID R. MOGHADAM | |||
Hamid R. Moghadam | ||||
Chief Executive Officer |
Date: February 26, 201414, 2017
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Prologis, Inc., hereby severally constitute Hamid R. Moghadam, Thomas S. Olinger and Edward S. Nekritz, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Form 10-K filed herewith and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Prologis, Inc. to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the U.S. Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | |||
|
|
| |||
/s/ HAMID R. MOGHADAM |
| Chairman of the Board and Chief Executive Officer | February | ||
Hamid R. Moghadam | |||||
/s/ THOMAS S. OLINGER | Chief Financial Officer | February 14, 2017 | |||
Thomas S. Olinger | |||||
/s/ LORI A. PALAZZOLO |
| Managing Director and Chief Accounting Officer | February | ||
Lori A. Palazzolo | |||||
/s/ GEORGE L. FOTIADES | Director | February 14, 2017 | |||
George L. Fotiades | |||||
/s/ CHRISTINE N. GARVEY | Director | February 14, 2017 | |||
Christine N. Garvey | |||||
/s/ LYDIA H. KENNARD | Director | February 14, 2017 | |||
Lydia H. Kennard | |||||
/s/ J. MICHAEL LOSH | Director | February 14, 2017 | |||
J. Michael Losh | |||||
/s/ IRVING F. LYONS III | Director | February 14, 2017 | |||
Irving F. Lyons III | |||||
/s/ DAVID P. O’CONNOR | Director | February 14, 2017 | |||
David P. O’Connor | |||||
/s/ JEFFREY L. SKELTON | Director | February 14, 2017 | |||
Jeffrey L. Skelton | |||||
| |||||
/s/ CARL B. WEBB | Director | February 14, 2017 | |||
Carl B. Webb | |||||
/s/ WILLIAM D. ZOLLARS | Director | February 14, 2017 | |||
William D. Zollars |
114
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROLOGIS, L.P. | ||||
By: | Prologis, Inc., its general partner | |||
By: | /s/ HAMID R. MOGHADAM | |||
Hamid R. Moghadam | ||||
Chief Executive Officer |
Date: February 26, 201414, 2017
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Prologis, L.P., hereby severally constitute Hamid R. Moghadam, Thomas S. Olinger and Edward S. Nekritz, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Form 10-K filed herewith and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Prologis, L.P. to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the U.S. Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | |||
|
|
| |||
/s/ HAMID R. MOGHADAM |
| Chairman of the Board and Chief Executive Officer | February | ||
Hamid R. Moghadam | |||||
/s/ THOMAS S. OLINGER | Chief Financial Officer | February 14, 2017 | |||
Thomas S. Olinger | |||||
/s/ LORI A. PALAZZOLO |
| Managing Director and Chief Accounting Officer | February | ||
Lori A. Palazzolo | |||||
/s/ GEORGE L. FOTIADES | Director | February 14, 2017 | |||
George L. Fotiades | |||||
/s/ CHRISTINE N. GARVEY | Director | February 14, 2017 | |||
Christine N. Garvey | |||||
/s/ LYDIA H. KENNARD | Director | February 14, 2017 | |||
Lydia H. Kennard | |||||
/s/ J. MICHAEL LOSH | Director | February 14, 2017 | |||
J. Michael Losh | |||||
/s/ IRVING F. LYONS III | Director | February 14, 2017 | |||
Irving F. Lyons III | |||||
/s/ DAVID P. O’CONNOR | Director | February 14, 2017 | |||
David P. O’Connor | |||||
/s/ JEFFREY L. SKELTON | Director | February 14, 2017 | |||
Jeffrey L. Skelton | |||||
| |||||
/s/ CARL B. WEBB | Director | February 14, 2017 | |||
Carl B. Webb | |||||
/s/ WILLIAM D. ZOLLARS | Director | February 14, 2017 | |||
William D. Zollars |
115
Certain of the following documents are filed herewith. Certain other of the following documents that have been previously filed with the Securities and Exchange Commission and, pursuant to Rule 12b-32, are incorporated herein by reference.
1.1 | Equity Distribution Agreement, dated as of February 5, 2015, among Prologis, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC. (incorporated by reference to Exhibit 1.1 to Prologis’ Current Report on Form 8-K filed February 5, 2015). | |
3.1 | Articles of Incorporation of Prologis (incorporated by reference to Exhibit 3.1 to Prologis’ Registration Statement onForm S-11 (No. 333-35915) filed September 18, 1997). | |
3.2 | ||
Articles Supplementary establishing and fixing the rights and preferences of the Series Q Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.4 to Prologis’ Registration Statement on Form 8-A filed June 2, 2011). | ||
3.3 | ||
Articles of Merger of New Pumpkin Inc., a Maryland corporation, with and into Prologis, Inc., a Maryland corporation, changing the name of “AMB Property Corporation” to “Prologis, Inc.”, as filed with the Stated Department of Assessments and Taxation of Maryland on June 2, 2011, and effective June 3, 2011 (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | ||
3.4 | Articles of Amendment (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed May 8, 2012). | |
3.5 | ||
Thirteenth Amended and Restated Agreement of Limited Partnership of the Operating Partnership (incorporated by reference to Exhibit 3.6 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | ||
3.6 | First Amendment to Thirteenth Amended and Restated Agreement of Limited Partnership of Prologis, L.P., dated February 27, 2014, (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed on February 27, 2014). | |
3.7 | Second Amendment to the Thirteenth Amended and Restated Agreement of the Limited Partnership of Prologis, L.P., dated October 7, 2015 (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed on October 13, 2015). | |
3.8 | Amended and Restated Certificate of Limited Partnership of the Operating Partnership (incorporated by reference to Exhibit 3.7 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | |
3.9 | Articles Supplementary dated April 3, 2014, (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed on April 3, 2014). | |
3.10 | Eighth Amended and Restated Bylaws of Prologis, Inc. (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed on September 23, 2016). | |
4.1 | Form of Certificate for Common Stock of Prologis (incorporated by reference to Exhibit 4.1 to Prologis’ Registration Statement on Form S-4/A (No. 333-172741) filed April 12, 2011). | |
4.2 | Form of Certificate for the Series Q Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-4/A (No. 333-172741) filed April 28, 2011). | |
4.3 | Indenture, dated as of June 8, 2011, by and among the Operating Partnership, as issuer, Prologis, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-3 (No. 333-177112) filed September 30, 2011). | |
4.4 | ||
Fifth Supplemental Indenture, dated as of August 15, 2013, among Prologis, Inc., Prologis, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | ||
4.5 | Form of Sixth Supplemental Indenture among Prologis, Inc., Prologis, L.P., Elavon Financial Services Limited, UK Branch, Elavon Financial Services Limited and U.S. Bank National Association (incorporated by reference to Exhibit | |
4.6 | Form of Seventh Supplemental Indenture among Prologis, Inc., Prologis, L.P., Elavon Financial Services Limited, UK Branch, Elavon Financial Services Limited and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed February 18, 2014). | |
4.7 | Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 10, 2006 and also incorporated by reference to Exhibit 4.1 to the Operating Partnership’s Current Report on Form 8-K filed August 10, 2006). |
116
First Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed | ||
4.9 | Second Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.3 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed April 2, 1998). | |
4.10 | Third Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.4 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed | |
4.11 | Seventh Supplemental Indenture, dated as of August 10, 2006, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed August 10, 2006 and also incorporated by reference to Exhibit 4.2 to the Operating Partnership’s Current Report on Form 8-K filed August 10, 2006). | |
4.12 | Eighth Supplemental Indenture, dated as of November 20, 2009, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 20, 2009). | |
4.13 | Ninth Supplemental Indenture, dated as of November 20, 2009, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 20, 2009). | |
4.14 | Tenth Supplemental Indenture, dated as of August 9, 2010, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 9, 2010). | |
4.15 | Eleventh Supplemental Indenture, dated as of November 12, 2010, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 10, 2010). | |
4.16 | ||
4.00% Notes due 2018 and Related Guarantee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 10, 2010). | ||
4.17 | ||
Form of 2.750% Notes due 2019 (incorporated by reference to Exhibit 4.4 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | ||
4.18 | Form of 4.250% Notes due 2023 (incorporated by reference to Exhibit 4.5 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | |
4.19 | 3.350% Notes due 2021 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 1, 2013). | |
4.20 | Form of 3.000% Notes due 2022 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed December 2, 2013). | |
4.21 | Form of 3.375% Notes due 2024 (incorporated by reference to Exhibit 4.3 to Prologis’ Current Report on Form 8-K filed February 18, 2014). | |
4.22 | Form of | |
4.23 | Form of | |
4.24 | Officers’ Certificate related to the 2.750% Notes due 2019 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | |
4.25 | Officers’ Certificate related to the 4.250% Notes due 2023 (incorporated by reference to Exhibit 4.3 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | |
4.26 | Officers’ Certificate related to the 3.350% Notes due 2021 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 1, 2013). | |
4.27 | Form of Officers’ Certificate related to the 3.375% Notes due 2024 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed February 18, 2014). |
117
Form of Officer’s Certificate related to | ||
4.29 | Form of Officer’s Certificate related to 1.375% Notes due 2020 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-k filed on October 6, 2014). | |
4.30 | Form of Officers’ Certificate related to the 1.375% Notes due 2021 (incorporated by reference to Exhibit 4.1 of Prologis’ Current Report on Form 8-K filed May 12, 2015). | |
4.31 | Form of 1.375% Notes due 2021 (incorporated by reference to Exhibit 4.2 of Prologis’ Current Report on Form 8-K filed May 12, 2015). | |
4.32 | Form of Officers’ Certificate related to the 3.750% Notes due 2025 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed on October 30, 2015). | |
4.33 | Form of 3.750% Notes due 2025 (incorporated by reference to Exhibit 4.2 of Prologis’ Current Report on Form 8-K filed October 30, 2015). |
Other debt instruments are omitted in accordance with Item 601(b)(4)(iii)(A) of Registration S-K. Copies of such instruments will be furnished to the Securities and Exchange Commission upon request.
10.1 | ||
Agreement of Limited Partnership of ProLogis Limited Partnership-I, dated as of December 22, 1993 (incorporated by reference to Exhibit 10.4 to the Trust’s Registration Statement (No. 33-73382)) . |
10.2 | Amended and Restated Agreement of Limited Partnership of ProLogis Fraser, L.P., dated as of August 4, 2004 (incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). | |
10.3 | Fifteenth Amended and Restated Agreement of Limited Partnership of Prologis 2, L.P., (f/k/a AMB Property II, L.P.) dated February 19, 2010 (incorporated by reference to Exhibit 10.6 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2009). | |
10.4* | ||
The Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.22 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2001 and also incorporated by reference to Exhibit 10.19 to the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2001). | ||
10.5* | Amendment No. 1 to the Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.23 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2001 and also incorporated by reference to Exhibit 10.20 to the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2001). | |
10.6* | Amendment No. 2 to the Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.5 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and also incorporated by reference to Exhibit 10.4 to the Operating Partnership’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004). | |
10.7* | Amended and Restated 2002 Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed October 4, 2006 and also incorporated by reference to Exhibit 10.2 to the Operating Partnership’s Current Report on Form 8-K filed October 4, 2006). | |
10.8* | The Amended and Restated 2002 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed May 15, 2007 and also incorporated by reference to Exhibit 10.1 to the Operating Partnership’s Current Report on Form 8-K filed May 15, 2007). | |
10.9* | ||
Prologis Outperformance Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed December 22, 2011). | ||
10.10* | Prologis, Inc. 2016 Outperformance Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed on August 17, 2016). | |
10.11* | Form of Prologis, Inc. 2016 Outperformance Plan LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed on August 17, 2016). | |
10.12* | Form of Participation Points and LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed on February 27, 2014). | |
10.13* | Second Amended and Restated Prologis Promote Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed on August |
118
10.35* | Form of Prologis, Inc. Long-Term Incentive Plan LTIP Unit Award Agreement | |
10.36* | Form of | |
10.37* | Form of |
119
120
* | Management Contract or Compensatory Plan or Arrangement |
† | Filed herewith |
126
121